Payman Khales
About Payman Khales
Integer’s President and CEO since October 24, 2025 (age 55), previously COO (Oct 2024–Oct 2025) and President, Cardio & Vascular (joined Feb 20, 2018). Education: Executive MBA (Indiana University Kelley), B.S. Mechanical Engineering (École Polytechnique de Montréal) . Under his leadership of Cardio & Vascular, the business doubled sales over seven years while improving service levels and profitability . Company performance context: 2024 sales +10% to $1.717B; operating income +28% to $208M; adjusted EPS $5.30 (non‑GAAP), with PSU designs tied to organic sales growth and relative TSR, which paid 200% for the 2022 cycle on both metrics (rTSR at 80th percentile; organic growth above max) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Integer | President & CEO | Oct 2025–present | Continuing strategy focus on above‑market growth, margin expansion, tuck‑in M&A; leverage target 2.5–3.5x . |
| Integer | Chief Operating Officer | Oct 2024–Oct 2025 | Oversaw both business units and global operations; continuity of growth/manufacturing excellence plan . |
| Integer | President, Cardio & Vascular | 2018–Oct 2024 | Doubled sales in seven years; improved service levels/profitability . |
| CECO Environmental | President, Environmental Technologies Segment | 2014–2017 | Led segment within diversified engineered technologies provider . |
| Ingersoll Rand | VP roles incl. Product Mgmt (Power Tools), Strategic Accounts & Channels | 2010–2014 | Commercial and product leadership across U.S./Canada . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Integer Board of Directors | Director; Technology Strategy Committee | Appointed Oct 24, 2025–present | No additional board compensation while serving as CEO . |
Fixed Compensation
Multi-year reported pay (as NEO):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 443,865 | 528,846 | 550,000 |
| Stock Awards (grant date fair value, $) | 1,649,924 | 2,899,951 | 899,905 |
| Non‑Equity Incentive (STI, $) | 176,139 | 572,027 | 474,819 |
| All Other Compensation ($) | 32,919 | 35,822 | 52,086 |
| Total ($) | 2,302,847 | 4,036,646 | 1,976,810 |
Key 2024 cash comp parameters:
- Annualized base salary: $550,000; target bonus 75% of salary; STI earned 115.11% of target (payout $474,819) .
Perquisites/benefits highlights (2024):
- 401(k) match $10,350; Restoration Plan contrib. $23,311; life insurance $2,743; LTD $9,647; perquisites $6,035 .
- Nonqualified deferred comp: Executive contribution $46,622; company $23,311; YE balance $186,132 .
Performance Compensation
Short-term incentive design and 2024 outcome:
| Component | Weighting | Target basis | 2024 Achievement | Payout mechanics |
|---|---|---|---|---|
| Company STI Adjusted Operating Income (STI AOI) multiplier | Applies to all components | Corporate AOI (adjusted) | 104.4% of target → 133.35% factor | Multiplies all components; threshold 85%→25% payout; max 113%→200% |
| ELT Team Goal (strategic objectives) | 20% (for Product Category leaders) | Company-wide strategic objectives | 100% | Multiplied by AOI factor |
| Product Category Performance (for Cardio & Vascular President) | 80% | Category AOI, Quality CLA, Inventory DOH, On‑time Delivery, Challenge metric | 110.55% | Multiplied by AOI factor |
Resulting 2024 STI payout for Khales: 115.11% of target; target $412,500; payout $474,819 .
Long-term incentives (structure and 2024 grants):
| Vehicle | 2024 Grant Value ($) | Target units | Performance/vesting | Payout range |
|---|---|---|---|---|
| Time-based RSUs | 300,000 | 2,884 units (1/19/24) | Vests 1/3 annually over 3 years | N/A |
| PSUs – rTSR vs peer group | 300,000 | 2,544 target units (1/19/24) | 3-year rTSR vs peer group (55th=100%, 75th=200%) | 50%–200% |
| PSUs – Organic Sales Growth | 300,000 | 2,884 target units (1/19/24) | 3-year organic sales growth; average of annual results; cap at target if 3-yr CAGR doesn’t exceed target | 50%–200% |
Recent PSU results context (for 2022 cycle): rTSR at 80th percentile and organic growth above max → both paid 200% (vested in early 2025) .
Equity Ownership & Alignment
- Beneficial ownership: 19,738 shares as of March 24, 2025; <1% of shares outstanding .
- Outstanding awards and vesting (as of 12/31/2024):
| Award type | Units | Vesting/Performance detail |
|---|---|---|
| RSUs (time-based) | 906 | Vest 1/21/2025 |
| RSUs (time-based) | 2,695 | Vest 1/20/2025 and 1/20/2026 |
| RSUs (time-based, 2024 grant) | 2,884 | Vest 1/19/2025, 1/20/2026, 1/20/2027 |
| RSUs (time-based) | 5,432 | Vest 2/24/2026 |
| PSUs (2022 rTSR) | 4,964 (shown at max tracking) | 3-year rTSR ended Jan 2025; certified at 200% |
| PSUs (2023 cohorts) | 16,162 (shown at max tracking) | rTSR and organic growth; performance periods through early 2026 |
| PSUs (2024 cohorts) | 10,856 (shown at max tracking) | rTSR and organic growth; performance periods through early 2027 |
Stock vested in 2024: 14,883 shares (value realized $1,503,227); table does not indicate any open-market sales (note: shares may be withheld for taxes) .
Alignment policies:
- Ownership guideline: 2.5× base salary; status: attained as of March 24, 2025 .
- Hedging/pledging: Prohibited for directors and executive officers .
- Clawback: Recoupment policy covers cash and equity upon restatement and specified circumstances .
Employment Terms
Pre-CEO (offer letter/legacy CIC agreement; status as of 12/31/2024):
- Termination without cause: Cash severance $550,000; pro‑rated PSU treatment (older than 1 year); benefits continuance est. $18,300 .
- Death/disability equity acceleration value estimate: $9,044,755 (illustrative, using $132.52 share price at 12/31/2024) .
- Change‑in‑control (double trigger; company-wide design): For NEOs other than CEO, 2× salary and 2× greater of 3‑yr avg bonus or target, 2× prior-year retirement contributions, 24 months COBRA-equivalent cash, $25K outplacement, immediate vesting (subject to award agreements); best-after-tax provision . Illustrative total for Khales (as of 12/31/2024): $11,107,355 (incl. equity acceleration) .
Current CEO Employment Agreement (effective Oct 24, 2025; supersedes prior letter and CIC agreement):
- Base salary: $875,000; target STI: 100% of salary; 2026 LTI target: ≥$5,000,000; special RSU grant $550,000 vesting ratably over 3 years from 10/24/2025 .
- Severance (non‑CIC): 2× (salary + target STI) cash; 24 months medical premium equivalent cash; pro‑rata treatment of eligible equity (time‑based and performance-based as specified) .
- Severance (CIC window: 60 days before to 24 months after): Pre‑CIC severance benefits plus 2× prior‑year retirement contributions; equity: performance awards vest on full opportunity with performance level pre‑set by committee; time‑based vest in full; best after‑tax excise treatment; release required; clawback applies .
Board Governance
- Board/committee structure: Non‑executive independent Chair (Pamela G. Bailey); 9 of 10 director nominees were independent in 2025; all Audit, Compensation, and Corporate Governance committees composed entirely of independent directors; annual elections for all directors .
- Khales’ dual role: CEO and director (Technology Strategy Committee). Independence risk mitigated by independent Chair and fully independent key committees; policy bars hedging/pledging; executive sessions of independent directors occur regularly .
Compensation Program Design Signals (for pay-for-performance and retention)
- Mix and metrics: Two‑thirds of LTI in PSUs (organic sales growth and rTSR), one‑third time-based RSUs; STI funding driven by AOI with steepened curve post‑pandemic; no option repricing; no single‑trigger vesting if awards are assumed; double trigger for severance/CIC; no tax gross‑ups .
- Peer benchmarking: Program targets competitive market levels; peer list includes CONMED, Haemonetics, Teleflex, Globus, Masimo, Benchmark, Plexus, Nordson, etc.; peer set updated for 2025 decisions (added Enovis, LivaNova) .
- Say‑on‑Pay: 98% approval at 2024 meeting, indicating strong investor support .
Risk Indicators and Related-Party
- Related‑party transactions in 2024: None .
- No hedging/pledging; no option repricing; double‑trigger CIC; robust clawback .
Performance & Track Record Context
- Integer 2024 highlights: Sales +10% to $1.717B; operating income +28% to $208M; adjusted EPS $5.30 (non‑GAAP). Organic growth and rTSR PSU cycles paid at 200% for the 2022 program, confirming above‑target execution .
- 2025 outlook (Q2 call): H1 growth 9% with adjusted OI +14% YoY; full‑year midpoint outlook: sales +8.5%, adjusted OI +14%, adjusted EPS +20%; CEO‑elect (Khales) emphasized continuity of strategy and leverage range 2.5–3.5x .
- Leadership transition: Announced April 2025; Khales appointed CEO and board member Oct 24, 2025; Dziedzic to serve as Special Advisor through March 31, 2026 .
Investment Implications
- Alignment and incentives: High at‑risk mix and multi‑year PSU structure tightly link pay to organic growth and rTSR; ownership guideline met; hedging/pledging banned—strong alignment with shareholders .
- Retention and overhang: CEO agreement features competitive severance and sizable forward LTI target (≥$5M in 2026) plus a modest special RSU; vesting schedules and multi‑year PSU cycles suggest manageable selling pressure cadence, though 2024 saw ~14.9K shares vest for Khales (tax withholdings likely) .
- Execution risk: Strategy continuity under Khales is positive given prior C&V outperformance; key watch items are organic growth sustainability, PSU goal calibration, M&A integration cadence, and adherence to leverage guardrails (2.5–3.5x) .
- Governance: Dual CEO/director role mitigated by independent Chair and fully independent key committees; investor support for compensation (98% Say‑on‑Pay) reduces governance overhang risk near term .