Elly Keinan

About Elly Keinan

Elly Keinan is Group President and a named executive officer (NEO) at Kyndryl (KD). He transferred from IBM to Kyndryl at the time of the spin-off and participates in the Kyndryl Excess nonqualified deferred compensation plan for IBM transferees, indicating senior tenure pre-spin . His incentive pay is tightly linked to company performance: FY2025 annual bonus was determined by Adjusted EBITDA, Revenue, and corporate citizenship (weighted payout 118.4% vs. target), with EBITDA above target and revenue slightly below; FY2024 weighted payout was 162% with both revenue and adjusted EBITDA above plan after FX adjustments . Long-term PSUs for the FY2023–FY2025 cycle paid 200% on Relative TSR, ~110% on Adjusted Operating Cash Flow, and 34% on Signings; “Launch PSUs” tied to post-spin share-price hurdles paid at Tier 1 (50% of target) after the stock sustained ≥1.25x the Initial Share Price in July 2024 .

Fixed Compensation

Notes:

• 2024 perquisites disclosed include personal financial planning, ground transportation, spousal travel, executive physical, and company gifts; no tax gross-ups for perqs .
• NEOs may defer compensation under the Kyndryl Excess Plan; for Keinan, Kyndryl’s automatic contribution was $190,994 in FY2025; balance $410,371 at FYE .

Performance Compensation

Annual Incentive Plan (AIP) – Structure and Outcomes

AIP adjustment methodology removes FX effects and certain pre-determined items when assessing results .

Long-Term Incentives (LTI) – FY2025–FY2027 Grant (Granted 6/3/2024)

FY2025 plan-based grant sizing (Keinan): RSU 100,492 shares; PSU threshold/target/max 9,353 / 187,055 / 280,583 shares .

Outstanding Equity and Realized LTI Results

Equity Ownership & Alignment

Additional alignment controls:

• Stock ownership guidelines: NEOs (non-CEO) must hold ≥3x base salary; all NEOs are in compliance; executives must retain 100% of shares received until compliant; RSUs count toward compliance (unexercised options and unvested PSUs excluded) .
• Hedging and pledging prohibited for directors/executives; no stock may be pledged or hedged (includes margin accounts and derivatives) .

Employment Terms

• Severance (non-CIC covered termination): 18 months’ base salary lump-sum; pro-rata bonus based on actual performance; 18 months health coverage; 6 months outplacement; non-solicit 2 years; contingent on release and restrictive covenants .
• CIC Double-Trigger: if terminated within 24 months post-CIC, lump-sum equals 18 months’ base salary + 1.5x target AIP; pro-rata bonus at target; health coverage; outplacement; financial advisory services .
• Equity upon termination: provisions for acceleration/continued vesting vary by event; options in-the-money were included in CIC acceleration values at $31.40 stock price as of 3/31/2025 .
• Qualifying retirement: age ≥55 and ≥10 years service (IBM service credited for transferees); continued RSU vesting if conditions met .
• Non-compete: applies during employment and 12 months post-termination (24 months in certain severance/retirement cases); non-solicit generally 12 months (2 years for retirement) .
• 280G cutback: payments reduced to avoid excess parachute tax if net after-tax is higher with the cutback; no tax gross-ups .

Potential payments (as of 3/31/2025):

Compensation Structure Analysis

• Mix and at-risk pay: For FY2025 target compensation, ~74% of Keinan’s total target compensation is long-term equity and at-risk (PSUs and RSUs), reinforcing alignment with shareholders and multi-year outcomes .
• AIP metrics and rigor: The program pays for profitable growth and operational execution. FY2025 results showed above-target Adjusted EBITDA but slight revenue shortfall; FY2024 delivered strong outperformance in both metrics (after FX normalization), yielding 162% payout .
• LTI performance lens: FY2023–FY2025 PSU outcomes emphasize strong Relative TSR (200% payout) and solid cash-flow execution (110%), with Signings underperforming (34%), sharpening focus on forward pipeline and bookings quality .
• Risk controls: Robust clawbacks, no hedging/pledging, and ownership retention requirements temper risk-taking and align incentives; no tax gross-ups or single-trigger CIC vesting .

Vesting Schedules and Potential Insider Selling Pressure

• Near-term scheduled vesting: RSUs vest 8/1/2025 (multiple tranches) and 12/16/2025; options from 12/16/2021 vest annually and are in-the-money as of 3/31/2025 (strike $17.78 vs $31.40) .
• Trading policy: Executives require pre-clearance and may trade only during open windows; hedging/pledging is prohibited .
• Implication: Scheduled vesting and in-the-money options create potential supply during open windows, though ownership guidelines (retention until thresholds are met) mitigate wholesale sales .

Equity Ownership & Outstanding Awards – Detailed Schedule

Governance, Policies, and Committee Oversight

• CHC Committee oversees executive pay; uses independent consultant FW Cook; “What we do / don’t do” includes robust ownership guidelines (3x salary for NEOs), stringent clawbacks, no single-trigger CIC equity, and no repricing of options without shareholder approval .
• Compensation risk review concluded FY2025 program does not create risks reasonably likely to have a material adverse effect; design emphasizes multi-year equity and capped payouts .

Investment Implications

• Alignment: High equity-at-risk (74% LTI) with PSU metrics spanning cash flow, bookings (signings), and TSR aligns Keinan’s incentives with durable value creation; policy bans on hedging/pledging and strict ownership retention further align interests .
• Execution signals: FY2023–FY2025 PSU outcomes rewarded TSR and cash flow while penalizing signings underperformance, spotlighting bookings quality as the key lever for future payouts and sustained margin expansion .
• Retention and change-in-control economics: Significant unvested equity and competitive severance/CIC protections (double-trigger) reduce unwanted turnover risk but could increase stay incentives around strategic events; total CIC-trigger value for Keinan is ~$42.6M (driven by equity acceleration) .
• Trading dynamics: Multiple 2025–2027 RSU tranches and in-the-money options create periodic supply potential during open windows; retention requirements and pre-clearance rules moderate immediate sell pressure .