Lea Knight
INTEGRA LIFESCIENCES HOLDINGSAbout Lea Knight
Lea Knight, 53, is Executive Vice President and Chief Financial Officer of Integra LifeSciences, responsible for accounting, reporting, budgeting, internal audit, tax, treasury, IR and IT; she joined Integra in June 2023 after senior finance roles at Booz Allen Hamilton and Johnson & Johnson, and began her career at Arthur Andersen . She holds a B.S. in accounting from the University of Virginia, an MBA in finance/strategy from Wharton, and is a CPA (PA) . Company operating context in 2024: reported revenue was $1,610.5m (+4.5% reported), organic revenue declined 1.3%, GAAP net income was -$6.9m, and adjusted EBITDA was ~$322.3m amid quality and supply challenges and the Acclarent acquisition integration . The compensation program emphasizes pay-for-performance with majority at risk, using revenue, adjusted EBITDA, operating cash flow in the annual bonus, and annual organic revenue growth for PSUs; 2024 bonus pool funded at 39.3%, and 2024 PSUs (for 2022–2024 grant cycles) vested at 0% for the 2024 performance tranche .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Booz Allen Hamilton | EVP, Business Finance | Sep 2022 – Jun 2023 | Provided strategic and financial leadership to business sectors . |
| Johnson & Johnson | Various finance leadership roles; CFO, North America Pharmaceuticals | ~2004 – Jul 2022; CFO Sep 2021 – Jul 2022 | Led financial management across multiple divisions, culminating as NA Pharma CFO . |
| Arthur Andersen LLP | Public Accounting (Audit; helped stand up Healthcare Consulting and M&A in Philadelphia) | Early career | Managed audit engagements; supported healthcare consulting and M&A practices build-out . |
External Roles
| Organization | Role | Years |
|---|---|---|
| Thomas Jefferson University and Health System | Board Trustee | Current (noted in 2025 proxy) |
| Philadelphia Forum of Executive Women | Member | Current |
| Public Interest Law Center | Former Board Chair | Prior |
Fixed Compensation
| Component | 2023 | 2024 | Notes |
|---|---|---|---|
| Base Salary (Rate) | $600,000 | $622,800 (+3.8%) | 2024 increase aligned with global merit budget . |
| Salary Paid (SCT) | $295,385 | $616,662 | Reflects timing of 2023 hire and 2024 rate change . |
| Target Bonus % of Base | — | 90% | Target award $560,520 for 2024 . |
Performance Compensation
Annual Cash Bonus (2024 performance, paid Mar 2025)
- Plan metrics and weights: Revenue 40%, Adjusted EBITDA 40%, Operating Cash Flow 20% .
- Thresholds/targets: Revenue (96%/100%/104%), Adjusted EBITDA (93%/100%/107%), Operating Cash Flow (85%/100%/115%) of target; funding range 0%/20%/100%/150% .
- Company achievement: Revenue 99.9% of target (FX-adjusted to $1,616.6m), Adjusted EBITDA 82%, Operating Cash Flow 57% → overall pool funded at 39.3% .
- Knight payout: 90% of target ($502,226 total), consisting of $220,284 at funded rate plus $281,942 discretionary adjustment recognizing leadership through CEO transition .
| Metric | Weight | Target | Actual Outcome | Pool Impact |
|---|---|---|---|---|
| Revenue | 40% | 100% | 99.9% (FX-adjusted $1,616.6m) | Contributed to 39.3% pool |
| Adjusted EBITDA | 40% | 100% | 82% | Contributed to 39.3% pool |
| Operating Cash Flow | 20% | 100% | 57% | Contributed to 39.3% pool |
| Total Pool Funding | — | — | 39.3% | — |
| Executive | Target % | Target ($) | Paid at 39.3% | Discretionary Add | Total Paid |
|---|---|---|---|---|---|
| Lea Knight | 90% | $560,520 | $220,284 | $281,942 | $502,226 |
Long-Term Incentives (Grants on Mar 11, 2024)
- Mix for non-CEO NEOs: RSAs (with special two-year cliff vesting in 2024), stock options, PSUs (organic revenue growth) .
- PSU metric and curve: Annual organic revenue growth vs prior year; 2024 target 5.7%, threshold 2% (50% vest), max 7% (150% vest) .
- 2024 outcome for PSU tranches: Organic revenue -1.3% vs baseline → 0% vesting for 2022Y3/2023Y2/2024Y1 PSU tranches .
| Award (3/11/2024) | Shares/Units | Grant-Date FMV ($) | Vesting |
|---|---|---|---|
| RSAs | 20,105 | 728,203 | Special two-year cliff (retention) per 2024 design . |
| Stock Options (Ex. Price $36.22) | 27,308 | 428,189 | Annual over 4 years . |
| PSUs (Target) | 23,644 | 856,386 | 3 annual tranches based on annual organic revenue growth . |
Equity Ownership & Alignment
- Beneficial ownership: 41,935 shares owned; rights to acquire 6,827 shares within 60 days; total 48,762 shares beneficially owned (≈0.06% of 77,204,646 shares outstanding) .
- Outstanding equity (12/31/2024):
- Unvested time-based stock (RSAs/RSUs): 38,460 shares ($872,273 market value) .
- Unearned PSUs (target): 23,644 units ($536,246 payout value placeholder) .
- Stock options: 27,308 unexercisable at $36.22 expiring 3/11/2032; no currently exercisable options .
- As of 12/31/2024, options are out-of-the-money (stock $22.68 vs $36.22 strike) .
- Upcoming vesting schedule (time-based equity as of 12/31/2024):
- 2025: 3/11 — 3,901 shares; 7/3 — 6,037 shares .
- 2026: 3/11 — 12,184 shares; 7/3 — 12,318 shares .
- 2027: 3/11 — 4,020 shares .
- Ownership policy: CFO must hold 2x base salary in stock; 5-year compliance window from hire (by June 28, 2028); Knight is progressing toward compliance .
- Hedging/pledging: Company prohibits hedging and pledging of company securities (no margining, pledges, short sales, derivatives) .
- Clawbacks: Nasdaq Rule 10D-1-compliant clawback adopted Oct 2023; separate misconduct-related clawback also in place .
| Ownership Detail | Amount |
|---|---|
| Shares owned | 41,935 |
| Right to acquire within 60 days | 6,827 |
| Unvested RSAs/RSUs (FV) | 38,460 ($872,273) |
| Unearned PSUs (target, payout value) | 23,644 ($536,246) |
| Unexercisable options | 27,308 @ $36.22, exp. 3/11/2032 |
| Stock price (12/31/2024) | $22.68 |
| Shares outstanding basis for % | 77,204,646 |
Employment Terms
- Employment agreement: Integra has no employment agreements with NEOs other than the CEO; Knight participates in standard programs .
- Change-in-control (CIC) severance (double-trigger): If terminated without cause or resigns for good reason within 24 months post-CIC, Knight receives 2.0x (base + target bonus), pro rata target bonus for year of termination, up to 18 months COBRA subsidy, up to 12 months outplacement; no excise tax gross-up, with “best-pay cap” if applicable .
- Death/disability: All unvested time-based equity vests; performance stock remains subject to performance goals .
- Non-compete/non-solicit: One-year post-employment restrictive covenants; severance benefits conditioned on release and compliance .
- Vesting on CIC for equity: Awards granted since 1/1/2013 generally require both CIC and qualifying termination for accelerated vesting; performance awards have specific treatment on CIC plus termination .
- Insider trading controls: Pre-clearance, trading windows, and 10b5-1 plans permitted subject to policy .
Compensation Structure Analysis
- Cash vs equity mix: Knight’s total direct compensation includes a significant equity component (RSAs/options/PSUs), consistent with a program where majority is at-risk; 2024 RSAs included a special two-year cliff to address retention and engagement post-2023 challenges (more guaranteed time-vesting vs performance), shifting some mix toward retention equity in 2024 .
- Performance rigor: 2024 bonus pool funded at 39.3% and PSUs (2024 tranches) vested at 0% given -1.3% organic revenue, evidencing payout sensitivity to performance; Compensation Committee exercised discretion to elevate non-CEO NEO bonuses (Knight to 90% of target) due to leadership needs and retention considerations during CEO transition and operational remediation .
- Peer benchmarking: Pay targeted to median (50th percentile) of an updated medtech peer group; WTW engaged as independent consultant; program employs double-trigger CIC, no repricing, no tax gross-ups, and robust clawbacks .
- Equity plan supply/dilution: 2025 proposal to add 2.2m shares to the equity plan; three-year average run rate 1.17% (2022–2024) and overhang would be ~11.2% post-amendment as of 3/12/2025, indicating continued reliance on equity for retention and alignment .
Performance & Track Record
- 2024 achievements attributed to Knight: led productivity projects at manufacturing sites; delivered adjusted gross margin of 64% (down ~2 pts YoY) amid supply challenges; drove cost controls and strengthened finance org; refreshed IR approach and took expanded leadership responsibilities during CEO transition; served as executive sponsor of BUILD BRG .
- Company financial performance 2024: reported revenue $1,610.5m (+4.5% reported; -1.3% organic), GAAP net income $(6.9)m, adjusted EBITDA ~$322.3m; environment included quality system remediation, supply constraints, and Acclarent integration .
Equity Vesting & Potential Selling Pressure
| Date | Instrument | Shares | Notes |
|---|---|---|---|
| Mar 11, 2025 | RSAs/RSUs | 3,901 | Scheduled vest . |
| Jul 3, 2025 | RSAs/RSUs | 6,037 | Scheduled vest . |
| Mar 11, 2026 | RSAs/RSUs | 12,184 | Scheduled vest; includes 2024 two-year cliff RSAs . |
| Jul 3, 2026 | RSAs/RSUs | 12,318 | Scheduled vest . |
| Mar 11, 2027 | RSAs/RSUs | 4,020 | Scheduled vest . |
| Various 2025–2027 | Options | See schedule | Options vest over four years; 6,827 options vest on 3/11/2025; options are OTM at $22.68 vs $36.22 strike as of 12/31/2024 . |
| 2025 tranche | PSUs | 0% vested for 2024 performance | Organic revenue -1.3% → no vest for 2022Y3/2023Y2/2024Y1 tranches . |
Hedging/pledging prohibitions and ownership guidelines mitigate risk of forced selling; primary near-term supply is from time-based RSA/RSU vests in 2025–2026, while options are currently out-of-the-money and PSUs for 2024 tranches did not vest .
Employment Terms (Severance/CIC) — Key Economics
| Scenario | Cash | Equity | Benefits | Triggers |
|---|---|---|---|---|
| CIC + qualifying termination (CFO) | 2.0x (base + target bonus) + pro rata target bonus | Double-trigger acceleration; performance awards per plan rules | COBRA subsidy up to 18 months; outplacement up to 12 months | Termination without cause or for good reason within 24 months post-CIC; no excise gross-up; best-pay cap . |
| Death/Disability | — | Time-based awards vest; PSUs remain performance-based | — | — |
| Termination (no CIC) | — | No accelerated vesting under standard NEO program | — | — |
| Restrictive covenants | — | — | — | 1-year non-compete and non-solicit; release required for benefits . |
Governance, Say-on-Pay, and Peer Group
- Say-on-pay support was 98.8% at the 2024 annual meeting, indicating investor endorsement of program design .
- 2024/2025 peer group calibration reflects size/model alignment; pay positioned at median of peers; WTW engaged as independent advisor .
Investment Implications
- Alignment: Strong governance features (double-trigger CIC, clawbacks, anti-hedging/pledging, stock ownership guidelines) and hard 0% PSU vesting on underperformance reinforce pay-for-performance; however, 2024 discretionary bonus uplifts (Knight at 90% of target) despite a 39.3% pool highlight retention priorities amid operational remediation and CEO transition .
- Selling pressure: Near-term supply is concentrated in time-based RSA/RSU vests (3/11/2025, 7/3/2025, and larger cliffs in 2026); options are currently OTM and 2024 PSU tranches did not vest, moderating incremental supply; hedging/pledging prohibitions reduce forced selling risk .
- Retention risk: 2024 retention-oriented RSAs with two-year cliffs and high say-on-pay support suggest the board is prioritizing stability in finance leadership; CIC terms (2.0x multiple for CFO) are competitive but not excessive (no gross-ups), limiting windfall risk while providing protection in strategic scenarios .
- Execution risk and value creation: 2024 results reflect quality/supply headwinds and negative organic growth, yet finance-led productivity, cost control, and IR stewardship through transition are positives; sustained improvement in organic growth and cash metrics are needed to unlock PSU value and reduce compensation friction .