Steven Korn
About Steven Korn
Steven T. Korn is Chief Operating Officer at Kimball Electronics (KE), appointed effective July 1, 2023; he has 30+ years in EMS operations and holds a Mechanical Engineering degree from South Dakota School of Mines and Technology . He joined KE in 2004, became an executive officer in 2014, and is currently age 61 . Company performance during his recent leadership period included a record FY2023 with net sales of $1,823.4 million, operating income margin of 4.8%, and diluted EPS of $2.22, up 79% year-over-year .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Kimball Electronics | Chief Operating Officer | 2023–present | Promotion reorganized leadership/reporting; special COO grant tied to building leadership bench and org design |
| Kimball Electronics | President, Global EMS Operations | 2020–2023 | Led global EMS operations; period saw facility expansions in Thailand and Mexico referenced in FY2023 disclosures |
| Kimball Electronics | Vice President, North American Operations & Global Supply Chain | 2007–2020 | Ran NA operations and global supply chain through spin-off era |
| Kimball Electronics | Joined Company | 2004 | Long-tenured KE operator |
Fixed Compensation
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 (COO appointment) |
|---|---|---|---|---|
| Base Salary ($) | $323,179 | $373,007 | $419,231 | $475,000 (set with COO promotion) |
| Actual Bonus Paid ($) | $96,954 | $249,915 | $142,538 | — (not disclosed) |
| Stock Awards – Grant Date Fair Value ($) | $155,038 | $223,874 | $437,252 | — (not disclosed) |
| Target Bonus % of Base | — | 40%–50% (Tier 4 Profit Sharing) | — | — |
Notes:
- Annual cash incentives are under KE’s Profit Sharing Incentive Bonus Plan; payouts are structured post-fiscal year (60% in August, 40% in January) .
Performance Compensation
Long-term Equity Grants (Performance Shares and Restricted Shares)
| Grant Cohort | Target Opportunity (% of Base) | Target Value ($) | Performance Shares (Target #) | Restricted Shares (#) | Vesting Terms |
|---|---|---|---|---|---|
| FY2022–2024 | 93% | $391,530 | 16,724 | — | 3-year cliff vest post performance period |
| FY2023–2025 | 131% | $593,770 | 20,352 | 5,088 | PS: vest post period on goal attainment; RS: annual installments over 3 years; grant price $23.34 (Aug 19, 2022) |
| FY2024–2026 | 167% | $794,260 | 17,331 | 9,879 | PS: vest post period on goals; RS: annual installments over 3 years; grant price $29.19 (Aug 29, 2023) |
| FY2024–2028 (COO Grant) | — | — | 35,033 | 23,356 | RS: annual vest in years 3–5; PS: earn in years 3–5 based on leadership development and org design metrics |
Performance Metrics and Design
- Annual cash and stock incentives are tied to economic profit (with cost of capital), operating income, and sales growth against specific goals; performance share awards are linked to sales growth and profitability .
- Historical LTPS methodology for older cohorts: payout based on the three-year average worldwide Category 1 bonus percentage (target 40%) and KE’s 3-year CAGR vs EMS industry CAGR .
- FY2021 LTPS result: NEOs earned 96% of shares awarded for FY2021 performance period .
Grants of Plan-Based Awards (Illustrative FY2021)
| Metric | Korn FY2021 |
|---|---|
| Non-Equity Incentive – Target ($) | $149,203 |
| LTPS Target Shares Granted (Aug 24, 2020) | 16,377 |
| LTPS Grant Date Fair Value ($13.67/share) | $223,874 |
| LTPS Earned (% of tranche) | 96% |
Equity Ownership & Alignment
Beneficial Ownership History
| Metric | 2015 | 2016 | 2018 | 2019 |
|---|---|---|---|---|
| Shares Beneficially Owned | 54,892 | 60,063 | 81,750 | 90,531 |
| Ownership as % of Outstanding | <1% | <1% | <1% | <1% (25,418,807 shares outstanding) |
Outstanding Equity (Selected Point-in-time)
| Metric | FY End 2021 |
|---|---|
| Unearned Shares Not Vested (#) | 38,396 |
| Market/Payout Value ($) | $834,729 |
Alignment Policies and Practices:
- Anti-hedging/anti-pledging policy prohibits directors/executives from pledging or hedging KE stock; to KE’s knowledge, no NEO has engaged in pledging/hedging .
- Stock ownership guidelines require beneficial ownership as multiples of base salary: Vice President 3x; CEO 5x; Directors 3x. Executives are given reasonable time to comply; reviewed annually .
Deferred Compensation:
- SERP aggregate balance (FY2023): Korn $1,134,992; company contribution $14,566; executive deferrals $30,687; earnings $152,459; fully vested; SERP assets held in a “rabbi trust” (subject to general creditors) .
Employment Terms
Status and Agreements
- At-will employment; no individual employment agreements for NEOs .
- Leadership Team Severance and Change in Control Plan effective Nov 21, 2023 (replaced July 1, 2021 plan) .
- Double-trigger change-in-control: benefits only if qualifying termination within 24 months of change in control; no excise tax gross-ups .
- Restrictive covenants: confidentiality; non-compete/unfair competition obligations; non-solicitation of employees/customers for 12 months post-qualifying termination .
- Clawback: “no-fault” recovery for 3 completed fiscal years preceding a restatement; applies to misconduct and allows recovery of vested/unvested incentive comp .
Estimated Severance and Change-in-Control Economics (Point-in-time)
| Name | FY2022 Change in Control + Qualifying Termination | FY2022 Qualifying Termination | FY2023 Change in Control + Qualifying Termination | FY2023 Qualifying Termination | FY2024 Change in Control + Qualifying Termination | FY2024 Qualifying Termination | FY2025 Change in Control + Qualifying Termination | FY2025 Qualifying Termination |
|---|---|---|---|---|---|---|---|---|
| Steven T. Korn – Cash ($) | $1,772,452 | $719,000 | $1,994,053 | $763,555 | $1,681,502 | $554,042 | $1,757,019 | $571,526 |
| Steven T. Korn – Equity ($) | $1,114,867 | $633,931 | $1,719,360 | $1,143,534 | $2,770,953 | $980,687 | $3,017,187 | $1,034,791 |
| TOTAL ($) | $2,887,319 | $1,352,931 | $3,713,413 | $1,907,089 | $4,452,455 | $1,534,729 | $4,774,206 | $1,606,317 |
Notes:
- Severance cash calculated on base salary plus target cash incentive; includes benefits allowance and outplacement; equity valued at period-specific share price; qualifying termination outside change-in-control prorates equity based on service .
Performance Compensation Detail
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Economic profit (incl. cost of capital) – annual cash | Not disclosed | Pre-set yearly goals | Not disclosed | Paid as per plan timing | — |
| Operating income & sales growth – stock PS | Not disclosed | Pre-set cohort goals | Not disclosed for open periods | Earned post-period | Cliff vest after performance periods |
| FY2021 LTPS tranche | — | Per LTPS formula | 96% earned | 96% of tranche | Annual installments under legacy design |
| COO FY2024–2028 PS (leadership metrics) | — | Year 3–5 qualitative leadership KPI set (org design, talent pipeline) | Assessed year-by-year | 0–100% per year | Earn in years 3–5; RS vest years 3–5 |
Investment Implications
- Pay-for-performance alignment: Korn’s incentives are predominantly at-risk equity tied to operating income and sales growth, plus economic profit in annual cash—supportive of shareholder alignment; the 3-year cliff PS and RS cadence dampens near-term selling pressure .
- Retention and vesting overhang: Significant unvested equity and a sizable FY2024–2028 COO grant with vesting concentrated in years 3–5 indicate strong retention hooks; expect limited insider selling pressure until vest windows open .
- Governance and risk controls: Robust anti-hedging/pledging and a broad clawback (including misconduct) reduce misalignment and risk of opportunistic trading by insiders .
- Change-in-control economics: Korn’s modeled COC packages ($3.7M–$4.8M total in recent proxies) reflect meaningful equity acceleration upon double-trigger; for event-driven investors, these represent potential dilution and payout sensitivities in M&A scenarios .
- Qualitative COO grant metrics: Unique leadership-development KPIs for Korn’s special grant prioritize organization-building; while strategic, they are not directly financial, warranting monitoring of how TCC maps these outcomes to value creation .
- Liquidity and retirement: An accumulated SERP balance ($1.13M) signals deferred comp flexibility; combined with no executive-only perquisites in FY2024, cash comp structure appears shareholder-friendly .