Mark Kavanaugh
KBRAbout Mark Kavanaugh
Mark Kavanaugh is President, Defense, Intel and Space at KBR, overseeing the Science & Space (S&S), National Security Solutions (NSS) and Defense & Technology Solutions (DTS) portfolios within Mission Technology Solutions; he has served in this role since May 2025 and sits on KBR’s Executive Leadership Team . He joined KBR in December 2016 after leadership roles at BAE Systems and Booz Allen Hamilton and a career in the U.S. Navy as an Explosive Ordnance Disposal officer and NAVSEA major program manager . In 2024, KBR delivered 11% revenue growth and 16% adjusted EBITDA growth, with 1.1x TTM book‑to‑bill and $21.2B of backlog/options, and ranked 4th in its TSR peer group over 2022–2024—performance context for senior executive incentives and pay alignment at KBR .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| KBR | President, Defense, Intel & Space | May 2025–present | Leads S&S, NSS and DTS portfolios under MTS; member of ELT; expanding D.C. presence to deepen engagement with defense/intel stakeholders |
| KBR | Senior Vice President, DTS | Pre‑May 2025 (immediately prior) | Ran DTS portfolio; preceded by VP, Acquisition Engineering |
| KBR | Vice President, Acquisition Engineering (Engineering Group) | Pre‑2016–2019 (not fully disclosed) | P&L, operations and BD leadership for acquisition engineering |
| BAE Systems | Director, Combat & Expeditionary Programs, Warfare Business Group | Pre‑2016 | Led combat/expeditionary programs; defense domain leadership |
| Booz Allen Hamilton | Senior Associate (Navy/USMC C‑IED) | Pre‑2016 | Led Navy/USMC counter‑IED program and BD |
| U.S. Navy | EOD Officer; NAVSEA major program manager | Pre‑industry | Acquisition leadership; Packard Award for Acquisition Excellence |
External Roles
- No external public company directorships disclosed in KBR’s executive leadership biography for Mr. Kavanaugh .
Fixed Compensation
| Element | KBR senior executive design (policy/market practice) | Data points |
|---|---|---|
| Base salary | Targeted near 50th percentile for “good performance,” above median for sustained outperformance; individualized based on role, internal equity, experience | Compensation Committee benchmarks vs peer groups; adjusts for retention risk and internal equity |
| Target annual bonus (STI) | Expressed as % of base; threshold 25%, target 100%, max 200%; metrics include Adj. EPS, Adj. OCF, KPIs and 10% Zero Harm/Sustainability | Example NEO targets (2024): CEO 150% target; other NEOs 95% target; same 25/100/200% payout curve |
Note: KBR does not disclose Mr. Kavanaugh’s specific salary or target STI; data above reflects KBR’s disclosed framework and 2024 NEO examples .
Performance Compensation
| Incentive | Metric | Weighting/Structure | Targets/Payout Mechanics |
|---|---|---|---|
| STI (annual) | Adjusted EPS | Part of financial metrics | Payouts 0–200% per metric; 2024 financial metrics combined paid 107.1% after Committee certification |
| Adjusted Operating Cash Flow (OCF) | Part of financial metrics | Same curve; 2024 adjusted OCF achieved $462MM (within certified results) | |
| Individual KPIs | Individualized | Committee sets and rates KPIs; example CEO KPI result 87.5% in 2024 leading to 17.5% KPI payout share | |
| Zero Harm/Sustainability | 10% of STI | Company uses 10% sustainability weighting; assessed ME/SE/EE scale; e.g., CEO achieved 100% of this component in 2024 | |
| LTI (3‑year) | Relative TSR vs TSR Peer Group | 50% of award | Sustained quarterly TSR methodology; target at 50th percentile, max at 90th+ percentile; payout 0–200% |
| Book‑to‑Bill (B2B) | 50% of award | Annual B2B targets set each year; 3‑yr average determines payout; 0–200% with linear interpolation |
Additional LTI features:
- RSUs vest in three equal annual installments (subject to continued service); 20% of RSU and performance award target could be forfeited if 2024 deemed unsuccessful (Committee did not exercise this forfeiture for 2024) .
- Negative discretion: Committee may reduce, but not increase, payouts for performance awards (absent corporate change) .
Note: Individual award sizes/targets for Mr. Kavanaugh are not disclosed; tables reflect KBR’s senior executive plan design .
Equity Ownership & Alignment
| Topic | KBR policy/practice | Implication |
|---|---|---|
| Stock ownership guidelines | 3x base salary for Level 1 executives (CEO directs); CEO 5x; Level 2: 1x | As a direct report to the CEO, Mr. Kavanaugh would be subject to 3x salary guideline if designated as Level 1 |
| Hedging/pledging | Prohibited for officers and directors | Reduces alignment risks from hedging or margin pledges |
| Clawback | NYSE/Exchange Act 10D-compliant clawback; recoup erroneously awarded incentive comp; certain awards carry additional clawbacks | Strong recourse in restatement or misconduct scenarios |
| Award vehicles | Mix of performance units (TSR/B2B) and time‑based RSUs; TSR settled in stock, B2B in cash | Long‑term, performance‑linked equity exposure |
| Beneficial ownership | Company discloses NEOs/directors; individual ownership for Mr. Kavanaugh not disclosed in 2025 proxy | No public data to quantify his current holdings (no pledging permitted) |
Employment Terms
| Provision | Standard terms disclosed by KBR | Notes |
|---|---|---|
| Employment agreements | KBR NEOs do not have employment agreements | Senior execs are typically covered by severance/CIC agreements rather than fixed‑term employment |
| Severance (pre‑CIC) | If terminated without cause/for good reason: lump sum equal to 1x base salary + 1x target bonus (CEO 2x/2x); unvested equity forfeited unless Committee decides otherwise for non‑performance awards | Applies to NEOs and “certain other senior executive officers” per KBR |
| Change‑in‑control (double trigger) | If terminated within 2 years post‑CIC: cash = 2x base + 2x target bonus (CEO 3x/3x); pro‑rated current‑year bonus; prior‑year bonus; time‑based equity vests; performance awards vest at target; welfare benefits for 2 years (CEO 3) | Double‑trigger required; no excise tax gross‑ups |
| Restrictive covenants | Confidentiality, non‑competition, non‑solicitation; mandatory arbitration; clawback of severance if cause is later determined | Company‑standard protections |
| Deferred comp | Elective Deferral Plan and Benefit Restoration Plan available to eligible executives; NEOs do not participate in DB pension plans | BRP/Elective deferral plan features disclosed |
Applicability: KBR states these agreements cover NEOs and “certain other senior executive officers”; the company does not specifically name Mr. Kavanaugh’s agreement in the proxy. If party to the standard agreement, the economics above would apply .
Notable Achievements and Operating Context (relevant to portfolio)
- Axiom AxEMU spacesuit underwater crewed tests at NASA’s NBL completed; KBR’s role under xEVAS highlighted by Kavanaugh, emphasizing technical leadership in EVA systems supporting Artemis III .
- KBR expanded federal engagement via a new Rosslyn, VA office; Kavanaugh underscored support for ambitious national security projects and D.C. growth strategy .
- KBR announced intent to spin off Mission Technology Solutions; CEO/CFO processes underway for SpinCo—organizational transition relevant to MTS leadership teams .
Compensation Structure Analysis
- Mix and leverage: Majority at‑risk via STI/LTI; STI includes a 10% sustainability component; LTI equally split between relative TSR and 3‑year book‑to‑bill—aligns incentives to growth, cash generation and stockholder value .
- Discretion and risk controls: Negative discretion on LTI; robust clawback; no option repricing; prohibition on hedging/pledging; double‑trigger CIC to avoid windfalls .
- Benchmarking and peer group: Programs targeted near median with upside for sustained outperformance; peer group spans government services, IT consulting, E&C, and industrials; Committee uses Meridian for independent advice .
Tables
KBR 2024 Performance Context (Company-Level)
| Metric | FY 2024 Result | Source |
|---|---|---|
| Revenue growth | +11% YoY | |
| Adjusted EBITDA growth | +16% YoY | |
| Backlog and options | $21.2B (ex‑PFI, Plaquemines LNG) | |
| TTM book‑to‑bill | 1.1x | |
| 3‑yr TSR peer ranking | 4th (2022–2024) | |
| Cash from operations | $462MM (2024) |
KBR Senior Executive STI Design (2024 Example)
| Component | Structure | 2024 Notes |
|---|---|---|
| Adjusted EPS | Metric with 0–200% payout | Achieved $3.34 adjusted EPS; component contributed to 107.1% financial payout |
| Adjusted OCF | Metric with 0–200% payout | Achieved $462MM; component included in 107.1% financial payout |
| KPIs | Individualized | Committee‑rated; e.g., CEO KPI result 87.5% in 2024 |
| Zero Harm/Sustainability | 10% weighting | Company‑wide sustainability metric used since 2021 |
KBR Senior Executive LTI Design
| Metric | Weight | Payout Mechanics |
|---|---|---|
| Relative TSR | 50% | Sustained quarterly TSR vs peer group; target at 50th percentile; 0–200% payout; capped at target if TSR negative for certain officers |
| Book‑to‑Bill (B2B) | 50% | Annual B2B goals; 3‑yr average; 0–200% payout with interpolation |
Severance and Change‑in‑Control Economics (Standard KBR Terms)
| Scenario | Cash Multiple | Equity Treatment | Benefits |
|---|---|---|---|
| Termination without cause / for good reason (pre‑CIC) | 1x base + 1x target bonus (CEO 2x/2x) | Unvested equity forfeited unless Committee decides otherwise for non‑performance awards | N/A |
| Double‑trigger CIC termination (within 2 years post‑CIC) | 2x base + 2x target bonus (CEO 3x/3x) | Time‑based equity vests; performance awards vest at target | Welfare costs for 2 years (CEO 3) + pro‑rata current‑year bonus + prior‑year bonus |
Employment & Contracts
- No employment agreements for NEOs; severance/CIC agreements used; double trigger required; no excise tax gross‑ups; mandatory arbitration and restrictive covenants standard .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval ~98%; bi‑annual outreach to top 25 investors with feedback integrated into program design .
Investment Implications
- Pay‑for‑performance alignment: STI ties to adjusted EPS/OCF and safety/sustainability, and LTI to 3‑yr TSR and B2B, supporting disciplined growth and cash focus in defense/space portfolios under Kavanaugh’s remit .
- Retention/transition: Planned MTS spin‑off introduces leadership transition risk/opportunity across the segment; KBR has begun leadership processes to manage separation, but investors should monitor senior team continuity and any SpinCo leadership announcements affecting Kavanaugh’s organization .
- Selling pressure and alignment: Prohibition on hedging/pledging and stock ownership guidelines (3x salary for Level 1 execs) reinforce alignment; RSU three‑year vesting and TSR/B2B performance cycles can create periodic vest‑related liquidity but with balanced long‑term horizons .
- Operating momentum: Portfolio achievements (e.g., AxEMU test support) and D.C. presence expansion under Kavanaugh’s leadership support positioning for federal demand cycles, though macro contract and program risks remain .
Sources: KBR 2025 Proxy Statement (DEF 14A) ; KBR 8‑K/press materials (leadership change; Rosslyn office) ; KBR executive leadership biography and role scope ; GovConWire appointment coverage ; Axiom AxEMU test release .