Trent McKenna
COMFORT SYSTEMS USAAbout Trent McKenna
Executive Vice President and Chief Operating Officer at Comfort Systems USA (FIX). Age: 52. Served as Senior Vice President and COO during 2021; promoted to EVP & COO in January 2022 . Company performance during his recent tenure has been strong: 2024 revenue $7.03B, EPS $14.60, operating cash flow $849.1M, and free cash flow $743.5M, all up materially versus 2023; backlog ended 2024 at $5.99B . Annual incentives are explicitly tied to EPS and FCF, with corporate payouts at max (200%) in 2024 based on performance against pre-set goals .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Comfort Systems USA, Inc. | Senior Vice President & Chief Operating Officer | 2021 | Focused on enterprise strategy, succession planning, service growth, safety, and D&I goals |
| Comfort Systems USA, Inc. | Executive Vice President & Chief Operating Officer | Jan 2022–present | Led enterprise strategy and strategic service growth initiatives; advanced talent goals and safety programs |
External Roles
No external public company directorships disclosed in the proxy materials reviewed .
Fixed Compensation
Multi-year cash and total compensation for Trent McKenna:
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 440,000 | 506,000 | 575,000 |
| Stock Awards ($) | 571,969 | 733,598 | 1,006,021 |
| Non-Equity Incentive Plan Compensation ($) | 757,273 | 951,280 | 1,070,363 |
| All Other Compensation ($) | 8,469 | 9,374 | 11,564 |
| Total ($) | 1,821,711 | 2,200,252 | 2,662,948 |
Notes:
- Target annual incentive mix for Trent (unchanged vs 2023): 90% Corporate (EPS/FCF) + 10% Individual Performance; total 100% of base salary at target .
- The company provides enhanced life and disability insurance for executives; otherwise limited perquisites .
Performance Compensation
Annual Incentive (2024)
Corporate component (70% EPS / 30% FCF) and individual goals:
| Metric | Weighting | Threshold | Target | Max | Actual (2024) | Payout (% of base) | Payout ($) |
|---|---|---|---|---|---|---|---|
| EPS | 70% of Corporate | $6.30 | $9.00 | $11.70 | $14.60 | 126.0% | 724,500 |
| FCF | 30% of Corporate | $150.5M | $215.0M | $279.5M | $743.5M | 54.0% | 310,500 |
| Individual Performance | 10% of total | — | — | — | Score 61.5% | 6.15% | 35,363 |
Annual incentive total corporate payout: 180.0% of base salary ($1,035,000) . Individual payout: 6.15% ($35,363) .
Annual Incentive (2023)
Corporate payouts and individual component:
| Metric | EPS payout (% of base) | EPS ($) | FCF payout (% of base) | FCF ($) | Corporate total (% of base) | Corporate total ($) | Individual payout (% of base) | Individual ($) |
|---|---|---|---|---|---|---|---|---|
| 2023 | 126.0% | 637,560 | 54.0% | 273,240 | 180.0% | 910,800 | 8.0% | 40,480 |
Long-Term Incentives (LTI) – Awards and Design
RSUs vest ratably over three years; PSUs are dollar-denominated, measured on EPS and relative TSR over a 3-year period, and cliff vest after the performance period if earned .
| Award Type | 2023 | 2024 | Vesting | Performance Conditions |
|---|---|---|---|---|
| RSUs (shares) | 2,597 | 1,600 | Equal annual installments over 3 years | Time-based |
| PSUs (target $) | 366,850 | 503,125 | Cliff vest after 3-year performance period | 50% EPS (3-year average vs goals); 50% relative TSR vs defined peers |
PSU design details: dollar value up to 200% of original target can be earned; settled in shares based on market value after the performance period. TSR peer set includes Matrix Service, Primoris, Tutor Perini, Stantec, Dycom, MasTec, Sterling Infrastructure, EMCOR, MYR Group, Quanta Services, Tetra Tech, Great Lakes Dredge & Dock, Granite Construction, Limbach, and APi Group (for 2024 grants) .
Options and Vesting Activity
Outstanding options at 12/31/2023 vs 12/31/2024 and 2023–2024 vesting/exercise:
| Metric | 12/31/2023 | 12/31/2024 |
|---|---|---|
| Options exercisable (#) | 2,000 | — |
| Options unexercisable (#) | 2,000 | — |
| Exercise price ($) | 36.25; 42.50 | — |
| Expiration | 03/08/2027; 03/07/2028 | — |
| Metric | 2023 | 2024 |
|---|---|---|
| Options exercised (#) | — | 4,000 |
| Value realized on exercise ($) | — | 1,781,615 |
| RSUs vested (#) | 3,675 | 2,937 |
| RSUs value realized ($) | 538,167 | 939,928 |
| PSUs vested (#) | 2,876 | 1,462 |
| PSUs value realized ($) | 406,149 | 459,521 |
Equity Ownership & Alignment
Beneficial ownership and unvested equity as reported:
| Metric | As of | Value |
|---|---|---|
| Beneficial ownership (shares) | 03/01/2025 | 23,990; includes 4,377 RSUs subject to tenure vesting |
| % of class | 03/01/2025 | <1% |
| Unvested RSUs (#) | 12/31/2024 | 4,377 |
| Market value of unvested RSUs ($) | 12/31/2024 | 1,856,111 |
| Unearned PSUs (#) | 12/31/2024 | 1,348; 2,372; 1,730 |
| Payout value of unearned PSUs ($) | 12/31/2024 | 572,000; 1,006,250; 733,700 |
Policy alignment:
- Stock ownership requirements: executives must beneficially own shares measured as a multiple of base salary; all executive officers were in compliance as of 12/31/2024 .
- Anti-hedging/pledging policy prohibits holding securities in margin accounts or pledging company stock; hedging transactions are disallowed .
Employment Terms
Severance and Change-in-Control (CIC)
Structure and economics:
- Executive Severance Policy (termination without cause, not CIC): COO/EVP multiple = 1.5x salary+bonus; COBRA reimbursements up to 12 months; up to $50,000 outplacement; non-compete for one year required to receive benefits .
- Change-in-Control Agreements: Double-trigger (termination without cause or for good reason within 12 months); Trent McKenna’s CIC multiple = 2x salary+bonus; equity vests in full at target upon CIC .
- Tax gross-ups: Company eliminated new gross-ups starting 2013; older agreements for certain executives include potential excise tax gross-ups—Trent’s agreement (post-2014) does not include the 90-day resignation feature and does not reference a gross-up entitlement .
Illustrative payout amounts as of 12/31/2024:
| Scenario | Cash ($) | Equity acceleration ($) | Total ($) |
|---|---|---|---|
| CIC + qualifying termination | 3,312,181 | 3,012,086 | 6,324,267 |
Non-CIC termination estimates:
| Scenario | Amount ($) |
|---|---|
| Without cause (severance policy) | 2,514,500 (includes 1.5x salary+bonus, COBRA est., and outplacement est.) |
| Death | 575,000 (net of insurance) |
| Disability | 575,000 (net of insurance) |
Clawback and recovery policies: Expanded in 2023 to comply with Dodd-Frank/SEC rules; applies to recovery of erroneously-awarded incentive compensation; existing Sarbanes-Oxley 304 recovery for CEO/CFO; anti-hedging/pledging policy in place .
Compensation Structure Analysis
- Pay-for-performance backbone: Annual incentives are split into EPS (70%) and FCF (30%) with threshold/target/max levels; 2024 corporate payouts at max driven by EPS $14.60 and FCF $743.5M well above targets .
- Mix shift: Trent’s stock awards increased year-over-year ($571,969 in 2022 → $733,598 in 2023 → $1,006,021 in 2024), and his non-equity incentive rose consistently ($757,273 → $951,280 → $1,070,363), indicating higher variable pay aligned with stronger performance .
- Equity design: 50% of annual LTI is PSUs with 3-year EPS and relative TSR goals; remaining 50% RSUs time-based, vesting over 3 years .
- Options: No options granted in 2024; Trent exercised legacy options in 2024 (4,000 shares; $1.78M value), eliminating option overhang at year-end 2024 .
Compensation Peer Group (Benchmarking)
Peer set used to inform design and reasonableness; refined in August 2024 (removed Ameresco and Limbach; added Fluor and AECOM). 2024 peer group included: EMCOR, MasTec, KBR, ABM, Tutor Perini, Valmont, Granite Construction, Dycom, MYR Group, Primoris, Tetra Tech, IES Holdings, APi Group, Sterling Infrastructure, Oshkosh, MDU, Ameresco, Limbach; refinement added Fluor and AECOM to better match revenue and market cap .
Say-On-Pay & Shareholder Feedback
Say-on-pay approval exceeded 95% in 2024, signaling broad investor support for the compensation program; committee made no structural changes as a direct result of the vote .
Investment Implications
- Strong alignment: Heavy emphasis on EPS and FCF in annual incentives plus 3-year EPS/TSR PSUs supports long-term value creation and discipline; executives in compliance with ownership requirements and prohibited from pledging/hedging .
- Near-term supply dynamics: 2024 option exercise removed legacy options; RSUs and PSUs continue to vest on normal cycles, with 4,377 RSUs and multiple PSU tranches outstanding at 12/31/2024 that will settle upon performance determination—monitor vesting dates for potential selling pressure .
- Retention and transition risk: Severance/CIC protections (1.5x without cause; 2x under CIC; double-trigger; accelerated vesting at target) reduce retention risk during transitions but create defined economics if leadership changes; no excise tax gross-up for McKenna under post-2014 CIC structure .
- Execution track record: Corporate incentive payouts at max in 2023 and 2024 reflect overachievement on EPS and FCF targets, consistent with strong operational execution, which should underpin continued investor confidence in management’s strategy .