Kendal Reed
About Kendal Reed
Kendal Reed, age 37, is Chief Financial Officer of Innovex International (“INVX”) since the closing of the Dril‑Quip/Innovex merger in 2024; he served as CFO of Legacy Innovex from 2019, and joined Innovex in 2016 as VP of Corporate Development after seven years as a Vice President at Amberjack. He holds a B.S. in Finance and Marketing from the University of Kansas . Company performance in FY2024: revenues $660.8 million, net income $140.3 million, and Adjusted EBITDA $138.5 million (21% Adjusted EBITDA margin), with revenue up 19% YoY, net income up 90% YoY, and Adjusted EBITDA up 5% YoY . The pay‑versus‑performance table shows the value of a $100 TSR investment declined from $49.61 (2023) to $29.78 (2024), while net income and Adjusted EBITDA increased; key incentive metrics used include Relative TSR, Free Cash Flow, and Adjusted EBITDA .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Innovex International (Legacy Innovex) | CFO | 2019–2024 | Led M&A, treasury, integration for growth and merger execution . |
| Innovex International | VP, Corporate Development | 2016–2019 | Drove acquisitions, integration and financing strategy . |
| Amberjack | Vice President | ~7 years (pre‑2016) | Sourced/managed oilfield service investments; investor-side rigor . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Amberjack Capital Partners | Vice President | ~7 years | Investment evaluation and portfolio management experience . |
Fixed Compensation
| Component | 2024 Detail | Notes |
|---|---|---|
| Annual Base Salary | $375,000 | Increased from $350,000 in connection with new employment agreement . |
| Target Bonus (% of Salary) | 60% (=$225,000) | Legacy Innovex program; 2024 split into H1/H2 components . |
| Actual Bonus Paid (for 2024, paid Feb 2025) | $225,000 | H1 (Legacy Innovex EBITDA) + H2 (Q4 2024 Adjusted EBITDA) . |
| All Other Compensation | $11,550 | Includes 401(k) match $10,350 and $1,200 cell phone reimbursement . |
Performance Compensation
Annual Cash Incentive (2024 structure and outcome)
| Metric | Weighting | Target | Actual | Payout | Vesting/Timing |
|---|---|---|---|---|---|
| H1 2024 EBITDA (Legacy Innovex pre‑merger) | 50% | Pre‑set H1 EBITDA (no above‑target if not achieved) | Achieved (Board determined) | 50% of annual target accrued | Paid Feb 2025 . |
| Q4 2024 Adjusted EBITDA (Company) | 50% | Threshold $32m; Target $40m | $49m achieved | Final total bonus = $225,000 (100% of annual target) | Paid Feb 2025 . |
Equity awards
| Grant | Type | Grant Date | Shares Granted | Grant‑Date Fair Value | Vesting Schedule |
|---|---|---|---|---|---|
| 2024 RSUs (Innovex + continuing) | RSUs | 3/15/2024 | 18,875 | $660,625 | Innovex RSUs vested at merger close; “continuing RSUs” vest 33⅓% at 6 months, 1 year, and 2 years post‑close, subject to employment . |
| 2023 RSUs | RSUs | 5/11/2023 | 57,961 unvested at 12/31/24 | $809,715 market value at 12/31/24 | 25% annually on each of the 1st–4th anniversaries of Jan 1, 2023; accelerates upon “Liquidity Event” . |
Planned 2025 LTIP structure (subject to shareholder approval): Committee contemplating grants for Legacy Innovex NEOs of 50% time‑based RSUs and 50% performance‑based RSUs with performance tied to Relative TSR and ROCE .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 186,232 shares; less than 1% of shares outstanding . |
| Breakdown | 109,859 owned; 12,452 RSUs vesting within 60 days; 63,921 RSUs vesting after 60 days . |
| Outstanding Unvested RSUs | 57,961 (2023 grant) and 37,733 (continuing RSUs); market values $809,715 and $527,130 at 12/31/24 . |
| Stock Ownership Guidelines | CFO required ownership = 3× base salary; executives are compliant or within allowed timeframe . |
| Hedging/Pledging | Prohibited for directors and executive officers (options, derivatives, forwards, monetization, and pledging) . |
Vesting cadence and potential selling pressure:
- Continuing RSUs vest 33⅓% at 6 months, 1 year, and 2 years after the merger closing date (merger closed September 9, 2024), which sets three near/medium‑term vesting events that could add supply to the market, subject to trading windows and policy constraints .
Employment Terms
| Provision | Non‑CIC Termination | CIC Window Termination (“Non‑CEO Protected Period”) |
|---|---|---|
| Base + Bonus Severance | 1× base + 1× target bonus, paid over 12 months | 2× base + 2× target bonus, lump sum . |
| Health Coverage | Up to 12 months taxable premium equivalents | Up to 24 months taxable premium equivalents . |
| Bonus Treatment | Earned but unpaid annual bonus paid | Earned but unpaid bonus paid . |
| Time‑Vested Equity | Vests as if employed for 12 months post‑termination | Immediately and fully vests . |
| Performance Equity | Time component vests as if employed for 12 months; performance component per award terms | Time component immediately vests; performance deemed at target if not determinable at CIC . |
| Restrictive Covenants | Confidentiality (perpetual), 2‑year non‑solicit; 1‑year non‑compete (2‑year if terminated during CIC window) . | |
| Contract Term | No fixed term; terminable at any time per agreement . |
Payments table (proxy disclosure, illustrative calculations at 12/31/24):
| Scenario | Unpaid Salary & Vacation | Base Severance | Pro‑rated Cash Incentive | Additional Cash Incentive | RSU Vesting | Insurance Continuation | Total |
|---|---|---|---|---|---|---|---|
| Without Cause/Good Reason (outside CIC window) | $43,269 | $375,000 | $225,000 | $375,000 | $706,274 | $7,031 | $1,731,574 |
| Without Cause/Good Reason (during CIC window) | $43,269 | $750,000 | $225,000 | $750,000 | $1,336,845 | $14,062 | $3,119,176 |
| With Cause/Other; Death/Disability | $43,269 | — | — | — | — | — | $43,269 |
Trigger structure: Benefits require qualifying termination without cause or for good reason in proximity to change in control (double‑trigger design) .
Performance & Track Record
- FY2024: Revenues $660.8m (+19% YoY), net income $140.3m (+90% YoY), Adjusted EBITDA $138.5m (+$6.7m YoY; margin 21% vs 24% prior), reflecting merger effects, demand, and operating leverage .
- Q4 2024 incentive determination: Company achieved $49m Adjusted EBITDA, driving full‑target bonus payouts to Legacy Innovex NEOs including Reed .
- TSR context: Cumulative TSR value of a $100 investment declined to $29.78 in 2024 (from $49.61 in 2023) while fundamental profitability improved; peer TSR also declined ($102.35 vs $116.80) .
Compensation Committee Analysis
- Committee objectives: competitive pay, retention through integration, continuity with prior arrangements, and rewarding merger completion/integration efforts .
- Program elements: base salary, annual cash incentives, equity‑based long‑term incentives, severance benefits; strong stockholder support (98% say‑on‑pay approval in 2024) .
- Hedging/pledging strictly prohibited; ownership guidelines of 3× salary for non‑CEO executives support alignment .
- Compensation Committee members (report signatories): Terence Jupp, Bonnie S. Black, John Lovoi .
Equity Compensation Plan and Overhang
- As of 12/31/24: 887,794 securities to be issued upon exercise of outstanding options/rights; weighted‑average exercise price $17.77; 535,697 shares remaining for future issuance under equity plans .
- 2025 LTIP proposal: 5,000,000 share reserve; expected overhang approximately 7.2% on adoption; burn rates: 0.23% (2024), 1.55% (2023), 1.75% (2022) .
Equity Ownership Table (Beneficial Owners and Management — Reed Extract)
| Holder | Shares | Percent |
|---|---|---|
| Kendal Reed | 186,232 | Less than 1% |
Footnote breakdown: 109,859 shares owned; 12,452 RSUs vesting within 60 days; 63,921 RSUs vesting after 60 days . Amberjack Capital Partners beneficially owns ~42.3% (29,369,822 shares), indicating a concentrated shareholder base relevant to governance dynamics .
Employment Contracts — Key Terms
- Reed Employment Agreement dated August 26, 2024: base salary $375,000; target bonus 60% of salary; annual equity grants from 2025 based on peer data; terminable at will; severance and CIC benefits as detailed above .
- Restrictive covenants: confidentiality (perpetual), non‑solicit (2 years), non‑compete (1 year; 2 years in CIC window) .
Say‑on‑Pay & Shareholder Feedback
- 2024 advisory vote support ~98%; 2025 say‑on‑pay advisory vote planned, with Committee considering outcomes in future decisions .
Investment Implications
- Alignment and retention: Ownership guidelines (3× salary) and sizable unvested RSUs align interests; strict anti‑hedging/pledging policy reduces misalignment risk; severance features are standard, with double‑trigger CIC design limiting windfalls without job loss .
- Near‑term supply dynamics: Multiple RSU vesting tranches over 2025–2026 from merger‑related and 2023 awards could create episodic selling pressure, subject to policy/trading windows .
- Pay‑for‑performance: 2024 cash bonus tied to EBITDA achievements (H1 pre‑merger and Q4 post‑merger), paid at target; planned 2025 PSUs add Relative TSR and ROCE metrics, strengthening alignment with shareholder returns and capital efficiency .
- Execution risk: While fundamental results improved in 2024 (revenue, net income, Adjusted EBITDA), TSR declined, highlighting market perception and integration‑execution risk; continued delivery against ROCE/EBITDA targets and clarity on long‑term incentive metrics will be key to investor confidence .