Michael Colwell
About Michael Colwell
Senior Vice President at Kadant Inc. (KAI); appointed company Vice President effective July 1, 2019 after leading Kadant Carmanah Design since November 2013; previously President & CEO of Carmanah Design & Manufacturing Inc. from April 2010 until Kadant’s acquisition in November 2013. He was age 53 at his 2019 appointment; tenure at Kadant dates to the 2013 acquisition. Kadant’s incentive plans he participates in are tied to adjusted diluted EPS growth, adjusted ROE, and adjusted EBITDA, with 2024 company performance of $1.05B revenue (+10% YoY), adjusted EBITDA $230M (+14% YoY), adjusted EBITDA margin 21.8%, and TSR of 25% one-year and 15% three-year, supporting above-target payouts in 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Kadant Inc. | Vice President (promoted to executive officer) | Effective July 1, 2019 | Executive leadership responsibility within Material Processing Group; entered Cadant’s standard executive retention and indemnification agreements . |
| Kadant Canada Corp. (Kadant Carmanah Design division) | President | Since November 2013 | Led OSB equipment business post-acquisition, integrating prior Carmanah operations into Kadant . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Carmanah Design & Manufacturing Inc. | President & CEO | April 2010 – November 2013 | Led independent OSB equipment company until acquisition by Kadant; foundational domain expertise for Kadant Carmanah . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $381,000 | $445,100 | $492,100 (10.6% increase in 2024 approved to align with ~55th percentile) |
| Actual Annual Cash Bonus (Non-Equity Incentive Plan Compensation, $) | $405,000 | $485,300 | $460,700 (paid on 2024 metrics) |
Performance Compensation
| Component | Metric | Weighting | Target | Actual (FY 2024 result) | Payout | Vesting/Timing |
|---|---|---|---|---|---|---|
| Annual Cash Incentive | Adjusted diluted EPS growth vs. avg prior 2 years | 50% | 10% growth | 6.11% → bonus factor 0.90 | Included in weighted bonus factor | Cash paid after fiscal year close (Feb 2025) |
| Annual Cash Incentive | Adjusted ROE (avg stockholders’ equity) | 50% | 8% ROE | 14.80% → max bonus factor 2.50 | Included in weighted bonus factor | Cash paid after fiscal year close (Feb 2025) |
| Annual Cash Incentive | Weighted payout factor | — | — | Weighted bonus factor 1.70 applied to target bonus opportunity | Actual bonus $460,700 for Colwell | Paid in cash |
| Performance-based RSUs (granted Mar 6, 2024) | Adjusted EBITDA | 100% of PBRSU tranche | Target $233.6M | Actual $236.9M (101.4% of target) | Earned at 104.8% of target RSU amount | Time-based vesting in three equal annual installments on March 10 beginning 2025 |
| Time-based RSUs (granted Mar 6, 2024) | Service/retention | — | — | — | — | One-third vests each March 10 over 3 years; accelerated on death, disability, or change in control |
FY 2024 Equity Grants (Colwell)
| Grant Type | Grant Date | Shares Granted | Per-Share Fair Value | Grant Date Fair Value ($) |
|---|---|---|---|---|
| Performance-based RSUs (earned units) | 3/6/2024 | 1,315 | $317.40 | $417,381 |
| Time-based RSUs | 3/6/2024 | 314 | $317.40 | $99,664 |
Equity Ownership & Alignment
| Ownership Item | Amount | Notes |
|---|---|---|
| Beneficial ownership (common) | 3,817 shares; <1% of class | Includes RSUs vesting/distributable within 60 days (1,669 for Colwell) . |
| RSUs vesting within 60 days of 3/1/2025 | 1,669 units | Counted in beneficial ownership under SEC rules . |
| Unvested RSUs outstanding (12/27/2024) | 3,448 units | Market value $1,209,558 at $350.80/share . |
| 2024 RSUs vested | 1,612 shares | Value realized on vesting $527,124 at $327.00/share (3/10/2024) . |
| Options outstanding | None (company hasn’t granted options since 2013) | Reduces repricing risk . |
| Stock ownership guidelines | 1× base salary for non-CEO executive officers | Executives must hold 50% of shares from RSU vesting until guideline met; all executive officers in compliance as of 3/1/2025 . |
| Pledging/Hedging | Prohibited for directors and officers | Insider trading policy prohibits pledging and hedging . |
| Clawback policy | NYSE-compliant; adopted May 2023 | Applies to incentive-based comp; recovery for material noncompliance/restatements . |
Employment Terms
| Provision | Michael Colwell – Current Retention Agreement Terms |
|---|---|
| Agreement type | Executive retention agreement (entered when promoted to VP on 7/1/2019); double-trigger (termination within 24 months post-change in control) . |
| Change-in-control definition changes vs. prior form | Ownership threshold increased to 40%; post-transaction shareholder ownership threshold decreased to 60% . |
| Severance multiple | Lump sum equal to 2× the sum of the greater of highest annual salary (in the 12 months ending on change-in-control or termination date) and the greater of average annual bonus (prior 3 years) or reference bonus (higher of bonus for year of change-in-control or year of termination) . |
| Benefits continuation | COBRA premiums (less employee portion) for 18 months; 401(k) matching contributions for 2 years; reimbursement of unpaid business expenses; outplacement cash $20,000 . |
| Equity treatment | Immediate vesting of all unvested equity awards upon change in control, with release becoming enforceable within 60 days from termination . |
| Tax gross-ups | None; cut-back applied if 4999 excise tax would reduce net amount . |
| Estimated payout if CIC and termination occurred 12/28/2024 | Lump sum $1,884,867; equity acceleration value $1,209,558; benefits continuation estimated $83,619; outplacement $20,000 . |
Multi-Year Compensation (Summary Compensation Table Extract – Colwell)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | 381,000 | 445,100 | 492,100 |
| Stock Awards ($) | 252,859 | 448,866 | 517,045 |
| Non-Equity Incentive Plan Compensation ($) | 405,000 | 485,300 | 460,700 |
| All Other Compensation ($) | 111,968 | 146,081 | 20,087 |
| Total ($) | 1,150,827 | 1,525,347 | 1,489,932 |
Governance, Say-on-Pay, and Peer Context
- 2024 say-on-pay support was approximately 93%, indicating strong investor endorsement of the program .
- Compensation peer group benchmarking targets total direct compensation roughly between the 50th–60th percentile, with a heavy emphasis on performance-based and at-risk pay; director and executive program designs reviewed by Willis Towers Watson .
- 2024 incentives paid above target driven by adjusted ROE and EBITDA outcomes; structure emphasizes corporate (not individual) metrics, strengthening pay-for-performance alignment .
Investment Implications
- Incentive alignment: Cash bonus driven by adjusted ROE and EPS growth, with 2024 weighted factor 1.70; equity heavily performance-based on adjusted EBITDA with measured linear payout, supporting alignment with profitability and returns .
- Selling pressure: RSU vesting tranches each March 10 for three years may create periodic supply; Colwell realized $527,124 on 1,612 shares vesting in March 2024, and had 3,448 unvested RSUs at YE 2024 and 1,669 vesting within 60 days as of March 1, 2025 .
- Retention risk: Double-trigger CIC protection with 2× cash and full equity acceleration reduces flight risk in transformational scenarios; no tax gross-up and cut-back provision is shareholder-friendly .
- Skin in the game: Beneficial ownership is modest (<1%) but executive ownership guidelines enforced and in compliance; prohibitions on pledging/hedging enhance alignment and reduce risk flags .
- Performance backdrop: Record 2024 adjusted EBITDA and strong TSR underpin above-target payouts, signaling execution strength in divisions Colwell previously led (Carmanah/OSB) .