Paul Thompson
About Paul Thompson
Paul Thompson, 57, is Chief Executive Officer of KinderCare Learning Companies, Inc. (KLC) and was elected to the Board in June 2025 after serving as President (2021–2024) and CFO (2015–2019). He holds a B.A. from Gustavus Adolphus College and is a Certified Public Accountant (Minnesota, inactive) . KLC completed its IPO in October 2024 and reported FY 2024 revenue of $2,663.0 million and Adjusted EBITDA of $298.1 million; Q4 2024 revenue grew 4.7% year over year, with IPO proceeds used to repay $608 million of first-lien term loan principal . The proxy’s compensation framework ties annual incentives to Adjusted EBITDA and Net Revenue, with 2024 STIP paying out at 73.91% of target, supporting pay-for-performance alignment .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| KinderCare Learning Companies | Chief Executive Officer | 2024–present | Led post-IPO public company transition; capital structure de-leveraging following IPO |
| KinderCare Learning Companies | President | 2021–2024 | Oversaw operations leading into IPO; continuity of leadership through CEO succession |
| KinderCare Learning Companies | Chief Financial Officer | 2015–2019 | Financial leadership through private period and incentive structure evolution |
| Safeway Inc. | Senior Vice President, Finance | 2005–2015 | Large-scale retail finance and operations experience |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Safeway Inc. | Senior Vice President, Finance | 2005–2015 | Multi-site, consumer-facing operations and capital discipline |
Fixed Compensation
| Item | 2024 | 2023 | Notes |
|---|---|---|---|
| Base salary (end-of-year) | $875,000 | $650,000 | Increased effective June 1, 2024 upon promotion to CEO |
| Target annual bonus (% of salary) | 110% | 90% | Target increased with CEO promotion; STIP payout based on blended 2024 salary |
| Actual STIP bonus paid | $593,301 | $815,519 | 2024 payout reflects 73.91% of target; 2023 shown from SCT |
| All other compensation | $23,786 | $20,590 | Matching contributions, insurance premiums |
Summary Compensation Table detail (note IPO-related effects):
- 2024 total reported compensation $21,374,546 driven predominantly by a non-cash “Option Awards” incremental fair value ($19,227,835) from pre-IPO Class B unit and award modifications; no new equity grants in 2024 .
- 2023 total $1,858,402, including non-cash stock/option modification charges; no 2023 stock grants .
Performance Compensation
Annual Incentive (STIP) – 2024 Design and Outcomes
| Metric | Weight | Target | Actual | Payout vs Target | Notes |
|---|---|---|---|---|---|
| STIP Adjusted EBITDA ($MM) | 50% | $346.0 | $319.2 | 61.25% | Defined with specific adjustments; program-level matrix |
| Net Revenue ($MM) | 30% | $2,724.0 | $2,663.04 | 77.60% | |
| Strategic initiatives | 20% | 100% | 100% | 100% | Non-formulaic component |
| Total payout rate | — | — | — | 73.91% | Applies to each NEO |
| Paul Thompson payout ($) | — | — | — | $593,301 | 73.91% of target |
STIP target as a percent of salary: 110% for CEO in 2024; other NEO targets per proxy .
Long-Term Incentive (LTIP) – Cash-based
| Grant Year | Performance Period | Metric | Target Award (Paul Thompson) | Payout Range | Notes |
|---|---|---|---|---|---|
| 2023 LTIP | FY 2023–FY 2025 | Cumulative EBITDA | $2,225,000 | 0–200% | Cash-based LTIP; Wyatt’s award prorated for retirement; program continues |
| 2024 LTIP | FY 2024–FY 2026 | Cumulative EBITDA | $2,400,000 | 0–200% | Target set in CEO promotion notice |
Equity Program Context
- 2022 Plan outstanding awards vest ratably over 3–4 years (RSUs and Options), with acceleration on death/disability; single-trigger if not assumed at CIC; double-trigger if terminated within 12 months post-CIC .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 1,276,536 shares; 1.1% of outstanding as of April 11, 2025 |
| Outstanding Options (2/23/22 grant) | 83,023 exercisable; 37,737 unexercisable; exercise price $20.61; expires 2/23/2032 |
| Outstanding Options (5/17/22 grant) | 87,268 exercisable; 43,635 unexercisable; exercise price $21.70; expires 5/17/2032 |
| Unvested RSUs (2/23/22) | 16,874 units; market value $300,526 at 12/27/2024 |
| Unvested RSUs (5/17/22) | 20,554 units; market value $366,067 at 12/27/2024 |
| Vesting schedules | 2/23/22 awards: 25% at 1-year, then quarterly to full vest at 4 years (through Feb 23, 2026); 5/17/22 awards: 1/3 at 1-year, then annually to full vest at 3 years (through May 17, 2025) |
| 2024 vesting/realization (legacy units) | 7,047,615 Class B units vested; value realized $16,784,684 on IPO price; RSUs vested 34,054; value $763,879; no option exercises in 2024 |
| Nonqualified deferred comp (2024) | Exec contrib $93,577; company contrib $15,596; earnings $57,409; ending balance $694,995 |
| Hedging/pledging | Insider Trading Compliance Policy referenced in proxy; specific prohibitions not detailed in retrieved sections |
| Ownership guidelines | Compensation committee oversees/recommends guidelines; specific multiples not disclosed in retrieved sections |
Employment Terms
- Structure: At-will employment (original agreement dated July 8, 2015 for CFO role; continues to govern employment as President/CEO with updated notice of terms) .
- CEO terms (effective June 1, 2024): Base salary $875,000; target bonus 110% of base; cash LTIP target $2,400,000 .
- Restrictive covenants: Non-solicitation through one year after he no longer receives any payment; 12-month post-termination non-compete; perpetual confidentiality .
- Severance/CIC: Benefits via Executive Severance Policy and CIC Plan; equity acceleration per plan terms noted above .
Potential payments upon termination (assumes event on Dec 28, 2024):
| Scenario | Cash | Equity Acceleration | COBRA/Other | Total |
|---|---|---|---|---|
| Voluntary termination due to retirement | $3,362,500 | $666,593 | — | $4,029,093 |
| Termination without cause or for Good Reason | $6,118,750 | $666,593 | $9,814 | $6,795,157 |
| Change in Control (no termination) | — | — | — | — |
| Change in Control with involuntary termination | $7,037,500 | $666,593 | $13,085 | $7,717,178 |
| Death | $3,362,500 | $666,593 | — | $4,029,093 |
Notes:
- Equity acceleration values based on closing price on Dec 27, 2024 .
- COBRA reimbursement where applicable until 12 months (no CIC) or 18 months (with CIC) .
Board Governance
- Role and election: CEO and Director; nominated in the Class I slate and elected June 5, 2025 (Votes For: 111,047,542; Withheld: 160,027) .
- Committee service: None; all three standing committees (Audit, Compensation, Nominating & Governance) are comprised of independent, non-employee directors .
- Independence: As CEO, not independent. Board leadership is separated (Chair: John T. “Tom” Wyatt; CEO: Paul Thompson); Lead Independent Director: Jean Desravines. All directors attended at least 75% of meetings post-IPO in Fiscal 2024 .
- Director compensation: Executives are not eligible for additional director compensation; non-employee director pay disclosed separately .
Say-on-Pay & Shareholder Feedback
- 2025 Annual Meeting results: Say-on-Pay approved (Votes For: 110,830,838; Against: 372,105; Abstentions: 4,626); frequency of Say-on-Pay: 1 year (One Year: 111,135,360) .
- Board recommended FOR Say-on-Pay and annual frequency .
Compensation Structure Analysis
- Mix and alignment: 2024 annual incentive tied 80% to financials (Adj. EBITDA and Net Revenue) and 20% to strategic objectives; payout at 73.91% supports alignment with performance that came in below target on EBITDA and revenue .
- Equity program shift: No new equity grants in 2024; reported “Option Awards” in SCT reflect non-cash incremental fair value from modifications connected to IPO and conversion of private partnership units—these do not represent new awards or cash realized in 2024 .
- LTIP structure: Cash-based, multi-year cumulative EBITDA with 0–200% payout range, reinforcing operational execution focus through 2026 .
Performance & Track Record
- IPO and de-leveraging: Completed IPO on Oct 10, 2024; net proceeds $616.1 million used primarily to repay $608.0 million of first-lien term loan principal .
- FY 2024 results: Revenue $2,663.0 million; Adjusted EBITDA $298.1 million; Q4 2024 revenue growth 4.7% YoY .
- Leadership communications: CEO emphasized growth through diversified offerings and scale in childcare benefits and centers .
Equity Compensation Detail (Outstanding at FY 2024 year-end)
| Award | Grant Date | Exercisable | Unexercisable | Strike | Expiration | Unvested RSUs | RSU Market Value |
|---|---|---|---|---|---|---|---|
| Stock Options | 2/23/2022 | 83,023 | 37,737 | $20.61 | 2/23/2032 | — | — |
| RSUs | 2/23/2022 | — | — | — | — | 16,874 | $300,526 |
| Stock Options | 5/17/2022 | 87,268 | 43,635 | $21.70 | 5/17/2032 | — | — |
| RSUs | 5/17/2022 | — | — | — | — | 20,554 | $366,067 |
Vesting schedules:
- 2/23/22 awards: 25% after 1 year, then quarterly to 4 years (full vest by Feb 23, 2026) .
- 5/17/22 awards: 1/3 after 1 year, then annually to 3 years (full vest by May 17, 2025) .
Compensation Peer Group (Benchmarking)
- The compensation committee (with Farient Advisors) benchmarks against an executive pay peer set including Bright Horizons Family Solutions, H&R Block, Five Below, American Eagle Outfitters, Abercrombie & Fitch, Petco, Sally Beauty, and others (retail, consumer, education services with multi-site operations). The peer set is used as a market input rather than a formulaic determinant .
Related Party Agreements and Policies
- Paul Thompson is a party (“Management Holder”) to the October 8, 2024 Registration Rights Agreement alongside Partners Group affiliates and the Chair; includes demand, shelf, piggyback rights and lock-up provisions .
- The pre-IPO Management Stockholders Agreement (transfer restrictions, repurchase rights) terminated automatically at IPO .
Investment Implications
- Incentive alignment: 2024 STIP tied to Adjusted EBITDA and Net Revenue with a measured payout (73.91%) reflects balance between growth and profitability targets; multi-year cash LTIP on cumulative EBITDA can reinforce operating discipline through 2026 .
- Retention and supply overhang: Remaining 2022 RSUs/options vest through May 2025 and February 2026, potentially adding modest incremental share supply on vest/option exercise; absence of specific hedging/pledging disclosures and presence of ownership of 1.1% aligns interests but monitor future Form 4 activity post-vesting .
- Governance mitigants: CEO also serves as director, but independence concerns are mitigated by separate Chair and a Lead Independent Director; committees are fully independent .
- Change-in-control economics: Double-trigger CIC benefits are sizable in absolute dollars and include equity acceleration; termination without cause/Good Reason benefits are meaningful—investors should factor into potential transaction scenarios and retention modeling .
- Shareholder sentiment: Strong Say-on-Pay support and annual SOP frequency provide current endorsement of the compensation program as disclosed .
Appendix: Company performance context (selected figures)
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Revenue ($MM) | $2,510.2* | $2,663.0 |
| Adjusted EBITDA ($MM) | — | $298.1 |
*Values retrieved from S&P Global.