Katherine Stepp
Executive Vice President, Chief Technology Officer at FDS
Executive
About Katherine Stepp
Katherine M. Stepp is Executive Vice President and Chief Technology Officer (CTO) at FactSet, appointed effective September 1, 2022; she joined FactSet in 2008 after progressing through senior engineering and product management leadership roles and holds a B.S. in Computer Science from Carnegie Mellon University . Under FY2025 performance, FactSet delivered GAAP revenue growth of 5.4% to $2.32 billion, GAAP operating margin of 32.2%, and GAAP diluted EPS of $15.55 (+11.8% YoY), with net cash from operations of $726.3 million and >95% annual ASV retention . Over the five-year SEC Pay Versus Performance window (measured from August 31, 2020), $100 invested in FactSet’s stock was worth $111.53 as of FY2025, while revenue (the company selected measure) was $2,321,748 thousand, contextualizing TSR and top-line outcomes alongside executive pay .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| FactSet Research Systems | Senior Director, Product Management (Research & Advisory workflows) | 2008–2022 | Led product strategy and workflows that underpin core research/advisory solutions |
| FactSet Research Systems | Senior Director, Engineering (Research workflows) | 2008–2022 | Oversaw engineering for research workflows, supporting platform modernization |
External Roles
Skipped (no external directorships or roles disclosed for Ms. Stepp) .
Fixed Compensation
| Metric | FY 2024 | FY 2025 |
|---|---|---|
| Base Salary ($) | 425,000 | 440,000 |
| Target Annual Incentive (% of Base) | 100% | 100% |
| Annual Incentive Paid ($) | 325,795 | 447,539 |
Notes:
- FY2025 annual incentive outcomes reflect corporate metrics (ASV Growth, Adjusted Operating Margin) and individual goals, with Ms. Stepp’s total annual incentive percentage awarded at 102% .
Performance Compensation
Annual Incentive (FY2025)
| Component | Weight | Target | Actual | Payout Mechanics |
|---|---|---|---|---|
| ASV Growth | 66.7% | $131.2M | $130.6M | Financial goals capped at 200%; margin capped at 150% unless ASV at least target |
| Adjusted Operating Margin | 33.3% | 36.1% | 36.3% | Financial goals capped as above |
| Individual Goals (Management Behaviors; GenAI deliverable; GenAI monetization ASV) | 20% | Qualitative targets | Ms. Stepp’s FY2025 goals: product mindset; modern performant tech foundation; IT disaster recovery posture; market-leading AI solutions; foundational AI work | Individual goals capped at 150% |
Result: Ms. Stepp’s total annual incentive percentage awarded was 102% ($447,539 paid vs. $440,000 target) .
Long-Term Incentives (FY2025)
| Instrument | Grant Date | Target Value ($) | Quantity/Terms | Vesting | Performance Metrics |
|---|---|---|---|---|---|
| Stock Options | Nov 1, 2024 | 475,034 | 3,569 options @ $458.80 strike | 20% annually over 5 years; next tranches each Nov 1 | Stock price appreciation (service-based) |
| Performance Share Units (PSUs) | Nov 1, 2024 | 475,404 | 1,066 target PSUs | Cliff vest Nov 1, 2027 | 50% Adjusted Cumulative Operating Earnings, 50% Adjusted Cumulative Revenues (3-year performance period: 9/1/2024–8/31/2027) |
Recent PSU outcomes:
- FY22 PSU cycle vested Nov 1, 2024 at 127.5% of target; Ms. Stepp received 317 shares .
- FY23 PSU cycle set to vest Nov 1, 2025; company-level payout determined at 50.8% of target; Ms. Stepp earned 367 shares scheduled to convert on Nov 1, 2025 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (Oct 1, 2025) | 8,500 shares; includes 7,521 options exercisable within 60 days and 367 earned PSUs/RSUs vesting within 60 days; <1% of outstanding |
| Outstanding/Unvested Awards (Aug 31, 2025) | Unexercisable options: 259 (2020 @ $316.71), 411 (2021 @ $434.82), 1,435 (2022 @ $426.25), 2,414 (2023 @ $436.57), 3,569 (2024 @ $458.80); PSUs at max placeholder counts: 1,884 (FY2023 cycle), 2,132 (FY2024 cycle) |
| Stock Ownership Guidelines | Other CEO direct reports: 2x annual base pay; compliance calculated annually; all NEOs in compliance or on pace as of Feb 1, 2025 |
| Hedging/Pledging | Prohibited for directors and executive officers; blackout periods apply; no margin accounts or pledging allowed |
| Option Grant Policy | No timing grants around MNPI; blackout around SEC filings and MNPI-related 8-Ks; grants not within specified pre/post filing windows |
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement | None disclosed for Ms. Stepp; NEOs covered by Executive Severance Plan and Equity Award Agreements |
| Severance (No CIC; termination without cause) | 1x base + target bonus, pro rata bonus at actual performance (individual deemed ≥ target), 12 months health benefits, up to $25,000 outplacement; equity: next tranche vest for options/RSUs ≥1yr old; PSUs pro rata based on service and actual performance |
| Severance (With CIC; termination without cause or good reason within 2 years of CIC) | 1.5x base + target bonus (2x for CEO), 18 months health (24 months CEO), up to $25,000 outplacement; equity: options/RSUs vest in full; PSUs vest at greater of pro rata at target vs. actual through CIC |
| Retirement (≥60 years and ≥10 years service) | Options granted ≥1 year continue to vest; RSUs vest next tranche only; PSUs continue subject to performance; awards <1 year forfeited |
| Non-Compete/Non-Solicit/Confidentiality | Covered under Executive Severance Plan restrictive covenants to enhance retention and protect the enterprise |
| Clawback | Covers incentive compensation (cash and equity) for restatements; also allows recovery of time-based equity upon misconduct causing material financial or reputational harm |
Potential payments (as of Aug 31, 2025; $373.32 share price):
| Scenario | Severance ($) | Equity ($) | Health ($) | Outplacement ($) |
|---|---|---|---|---|
| Termination with Cause | — | — | — | — |
| Termination without Cause | 1,320,000 | 519,017 | 19,132 | 25,000 |
| Termination after CIC | 1,760,000 | 768,893 | 28,699 | 25,000 |
| Retirement | — | — | — | — |
| Death or Disability | — | 636,240 | — | — |
Governance notes:
- No tax gross-ups on change-of-control; no option repricing; robust best-practice plan features .
Risk Indicators & Red Flags
- Hedging/pledging strictly prohibited; Section 16(a) filings timely for executive officers (reduces governance risk) .
- No related-party transactions involving executives disclosed for FY2025 (mitigates conflict-of-interest risk) .
- Company maintains a clawback policy for errors or misconduct and strict option grant/insider trading controls (improves pay-risk alignment) .
Investment Implications
- Pay-for-performance alignment: Annual cash incentive tied to ASV growth and adjusted operating margin, with individual goals focused on AI commercialization and technology foundational work; LTI mix of 50% options (5-year vest) and 50% PSUs linked to multi-year revenue and operating earnings embeds long-horizon value creation behavior .
- Ownership and trading constraints: 2x salary ownership guideline (compliance/on pace), strict hedging/pledging prohibitions, and blackout windows reduce misalignment and opportunistic trading risk, though scheduled vesting points (e.g., Nov 1 for PSUs/options) can create predictable liquidity events .
- Retention economics: Executive Severance Plan (1x without CIC, 1.5x with CIC) plus continued vesting treatment for certain awards post-termination or retirement balances retention with shareholder protections (double trigger, clawback, no gross-ups) .
- Execution track: FY2025 achievements include multiple AI product launches and the Intelligent Platform initiative, consistent with CTO goals to deliver market-leading AI solutions and modernize the tech foundation; this supports revenue and margin objectives while anchoring incentives in measurable outcomes .