Brian Gray
About Brian Gray
Brian R. Gray, age 54, is President and Chief Executive Officer of Knife River Corporation (KNF) and has served as a director since 2023; he was appointed President on March 1, 2023 and CEO on May 3, 2023, bringing 30+ years of company experience and leading KNF’s EDGE strategy focused on EBITDA margin improvement, discipline, growth and excellence . Under Gray’s leadership, KNF delivered record 2024 results: revenue $2.9B (+2% YoY), net income $201.7M (+10% YoY), Adjusted EBITDA $463.0M (+7% YoY), and Adjusted EBITDA margin 16.0% (+70 bps), while relative TSR performance was strong with $100 invested returning $290.23 vs. peer group $117.14 in 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Knife River Corporation – Northwest segment | Region President | 2012–2022 | Led eight acquisitions; developed Training Center; advanced safety/training/sustainability; built recruiting (“Life at Knife”) and T&D programs . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| National Ready Mixed Concrete Association | Director; Executive Committee member (multiple one-year terms) | Board since 2022; Exec Committee 2020–2021, 2022–2023, 2024–2025 | Industry leadership; governance exposure in ready-mix sector . |
| Oregon State University Construction Education Foundation | Director; VP (2020); President (2022) | 2012–present | Workforce development and industry-academia link; OSU Oregon Stater Award (2022) . |
| Associated General Contractors Oregon–Columbia | Director; Secretary (2014–2015); 2nd VP (2015–2016); 1st VP (2016–2017); President (2017–2018) | 2007–present | Regional industry leadership; advocacy and safety initiatives . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 359,341 | 658,334 | 880,000 |
| Target Annual Cash Incentive (% of salary) | — | 115% | 115% |
| Actual Annual Cash Incentive ($) | 332,717 | 1,644,521 | 1,825,838 |
| All Other Compensation ($) | 72,308 | 68,348 | 116,374 |
| Total Compensation ($) | 764,366 | 4,991,482 | 6,941,573 |
2024 target pay design allocated a relatively small fixed component and higher variable pay: base salary $880,000, target annual cash incentive 115% of salary, and target long-term equity incentive 375% of salary, totaling $5,192,000 in target compensation .
Performance Compensation
Annual Cash Incentive (2024 design and results)
| Metric | Weighting | Threshold | Target | Maximum | 2024 Actual | % of Target Achieved | Weighted Payout |
|---|---|---|---|---|---|---|---|
| Adjusted EBITDA | 90% | $325.5M | $434.0M | $477.4M | $469.5M | 181.8% | 163.6% |
| TRIR | 5% | 2.40 | 2.10 | 1.84 | 1.89 | 180.8% | 9.0% |
| LTIR | 5% | 0.91 | 0.55 | 0.26 | 0.39 | 155.2% | 7.8% |
| Total | 100% | — | — | — | — | — | 180.4% |
Payout mechanics: 0–200% with straight-line interpolation; CEO 2024 actual cash incentive $1,825,838 at 180.4% of target ($1,012,000) .
Long-Term Incentive (2024 grants)
| Component | Proportion | Grant Date | Target Units | Grant Date Fair Value ($) |
|---|---|---|---|---|
| PSAs (2024–2026) | 65% | Feb 22, 2024 | 33,000 | 2,837,505 |
| RSUs (2024–2026) | 35% | Feb 22, 2024 | 17,769 | 1,281,856 |
| Total LTI | — | — | — | 4,119,361 (SCT stock awards value) |
PSA performance measures (equal-weighted): relative TSR vs a 36-company peer set and Adjusted EBITDA margin growth over 2024–2026; earnout range 0–200% with settlement expected Feb 2027 . If PSAs paid at the highest level, aggregate grant date fair value would be $6,956,866 for Gray .
Vesting schedules (as of 12/31/2024)
| Award Type | Unvested Units | Vesting/Measurement | Market Value at $101.64 |
|---|---|---|---|
| RSUs (2023 grant) | 62,923 vest 12/31/2025 | Time-based | $6,392,961 |
| RSUs (2024 grant) | 17,769 vest 12/31/2026 | Time-based | $1,808,574 |
| PSAs (2024–2026 target) | 33,000 | Performance through 12/31/2026 | $3,354,120 |
| Total | 113,692 | See above | RSUs $8,201,535; PSAs $3,354,120 |
Notes: RSUs settle January 2027; PSAs shown at target based on first-year results between threshold and target . Annual safety and financial metrics and three-year PSA design help anchor pay-for-performance alignment .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 8,311 shares as of Feb 28, 2025; <1% of class (56,652,361 shares outstanding) . |
| Unvested Equity | 80,692 RSUs and 33,000 target PSAs outstanding as of 12/31/2024 . |
| Ownership Guidelines | CEO required 6× base salary; Gray at 10.3×; must meet by 06/01/2028; executives must hold all net vested shares until compliant . |
| Hedging & Pledging | Prohibited for executives and directors; margin accounts/pledging generally prohibited with limited margin account exceptions if stock is explicitly excluded . |
| Stock Options | Company does not use options; LTI delivered via PSAs and RSUs . |
Implications: High unvested equity and strong ownership multiple reduce near-term selling pressure; anti-hedging/pledging policies enhance alignment .
Employment Terms
| Term | Disclosure |
|---|---|
| Employment Agreement | None; executives (including CEO) do not have employment agreements entitling continued employment or specific termination payments . |
| Clawback | Incentive Compensation Recovery Policy effective Oct 2, 2023, compliant with SEC/NYSE; recovery of erroneously awarded incentive compensation upon restatement regardless of misconduct . |
| Deferred Compensation | Company contributions in 2024: $88,000 (10% of salary) for Gray; vests over 3 years; DCP allows elective deferrals of salary/annual incentive . |
| Pension/SERP | SISP participants are Hastings and Christenson; Gray not disclosed as participant . |
| Perquisites | Executives do not receive material perquisites beyond those available broadly; All Other Compensation for Gray was $116,374 in 2024 . |
Change-in-Control (CIC) and Severance Economics
| Feature | Detail |
|---|---|
| CIC Severance Multiple | 3× base salary + target annual cash incentive; plus prorated target bonus for year of termination; plus COBRA premium multiple (under CIC plan) . |
| Triggers | Double-trigger: termination by company without cause or by executive for good reason within two years post-CIC; death/disability excluded . |
| Equity Vesting on CIC | For 2024 awards, PSAs and RSUs deemed fully earned and vest at target upon CIC; starting with 2025 awards, vesting changes to double-trigger (no automatic vesting on CIC) . |
| Restrictive Covenants | One-year non-compete and non-solicit; two-year non-disparagement; perpetual confidentiality; release requirement . |
| 280G | Cut-back if beneficial to avoid excise tax under IRC §4999; no gross-up . |
Potential Payments (as of 12/31/2024)
| Scenario | PSAs ($) | RSUs ($) | CIC Cash ($) | Disability Benefits ($) | Total ($) |
|---|---|---|---|---|---|
| Voluntary/Not for Cause Termination | — | — | — | — | — |
| Death | — | 4,865,676 | — | — | 4,865,676 |
| Disability | — | 4,865,676 | — | 478,936 | 5,344,612 |
| CIC with Termination | 3,354,120 | 8,201,535 | 5,900,651 | — | 17,456,306 |
| CIC without Termination | 3,354,120 | 8,201,535 | — | — | 11,555,655 |
Board Governance and Director Service
- Board service history: Gray has served as a Class III director since 2023; current term expires at the 2026 annual meeting; he is the only officer serving on KNF’s board .
- Committee roles: Standing committees (Audit, Compensation, Nominating & Governance) consist entirely of independent directors; Gray is not a member of these committees .
- Board leadership and independence: KNF separates Chair and CEO roles; all directors other than Gray are independent; executive sessions of independent directors occur at every regular board meeting .
- Board activity: The board held seven meetings in 2024; each director attended at least 75% of combined board and committee meetings; near-full attendance at the 2024 annual meeting .
- Director compensation: Gray receives no additional compensation for board service; non-employee directors receive retainers and RSUs under the Director Compensation Policy .
Dual-role implications: While Gray is both CEO and a director, the independent Chair structure, majority-independent board, and fully independent committees mitigate independence concerns; regular executive sessions and majority voting further reinforce governance quality .
Compensation Structure Analysis
- Mix and risk profile: Over 80% of CEO target pay is at risk, with 65% of LTI in PSAs tied to multi-year relative TSR and Adjusted EBITDA margin growth, and 35% in RSUs emphasizing retention .
- Annual incentive rigor: 90% weighting to Adjusted EBITDA and 10% to safety (TRIR/LTIR), with 0–200% payout caps and straight-line interpolation; 2024 payout was 180.4% on strong execution .
- Governance safeguards: No stock options, no employment agreements, clawback policy, stock ownership and retention requirements, anti-hedging/pledging, annual compensation risk analysis .
- Peer benchmarking: Compensation targeted at the 50th percentile versus a 17-company peer set (median revenue ~$2.2B) and validated by Meridian Compensation Partners .
Equity Ownership & Alignment (detail)
| Measure | Value |
|---|---|
| Shares owned (beneficial) | 8,311 |
| Ownership multiple vs. guideline | 10.3× vs. 6× required by 06/01/2028; compliant and exceeding . |
| Unvested RSUs | 80,692 (62,923 vest 12/31/2025; 17,769 vest 12/31/2026) . |
| Target PSAs outstanding | 33,000 (2024–2026 performance period) . |
| Hedging/pledging | Prohibited; retention of vested shares until guideline met . |
Employment Terms (additional)
- Insider Trading Policy: prohibits hedging, pledging, margin accounts; requires compliance with trading windows and policies .
- Stock ownership policy: directors must own 5× cash retainer; executives (including CEO) must meet multiples within five years of appointment/promotion; monitored annually .
Performance & Track Record
- Value creation: 2024 records in revenue, net income, Adjusted EBITDA, and margin expansion per EDGE strategy .
- Strategic execution: Six acquisitions in 2024 totaling $131M; extended liquid asphalt footprint via Albina Asphalt acquisition (Nov 2024); acquired Strata Corporation (Mar 2025) .
- Investor engagement: Active outreach to top holders; disclosures and governance proposals (e.g., eliminating supermajority requirements) .
Investment Implications
- Alignment: High at-risk pay mix, multi-year PSAs tied to TSR and margin growth, and strict ownership/anti-hedging policies signal strong alignment with shareholders .
- Retention risk: Significant unvested RSUs/PSAs through 2026–2027 and DCP contributions with three-year vesting support retention; absence of employment agreements offset by CIC protection with 3× multiple and restrictive covenants .
- Trading signals: Large scheduled vesting events (Dec 2025 and Dec 2026 with settlement in Jan 2027) could create episodic supply, but Gray’s ownership multiple exceeds guidelines and anti-pledging/hedging reduces forced selling risk .
- Governance: Separate Chair/CEO, independent committees, and clawback/double-trigger changes post-2025 enhance governance quality and reduce dual-role concerns .