Karen Fagg
About Karen B. Fagg
Karen B. Fagg, age 71, is the independent Chair of the Board at Knife River Corporation (KNF) and a member of the Nominating & Governance Committee. She has served on KNF’s board since 2023 and brings decades of operating and public-sector experience in engineering, environmental stewardship, and energy resource development, including service as Director of the Montana Department of Natural Resources and Conservation and leadership of an engineering firm she owned and led. Her cumulative board tenure, inclusive of prior service on MDU Resources before Knife River’s 2023 separation, totals roughly 20 years, underscoring deep sector familiarity alongside independent oversight credentials .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| DOWL LLC (dba DOWL HKM) | Vice President | Apr 2008 – Dec 2011 | Senior leadership in engineering/design |
| HKM Engineering, Inc. | President (1995–2000); Chair, CEO & Majority Owner (2000–Mar 2008) | Apr 1995 – Mar 2008 | Led growth and merger into DOWL LLC |
| MSE, Inc. (energy R&D) | Various roles including VP Operations & Corporate Development Director | 1976–1988; 1993–Apr 1995 | Operations, corporate development |
| Montana Dept. of Natural Resources & Conservation | Director | 1989–1992 | Oversight of water, soil, energy, rangeland resources |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Intermountain Health Peaks Region Board | Director; member of quality committee | Since Jan 2023 | Non-profit/healthcare governance |
| Montana State Fund | Director; Finance Committee Chair | Since Mar 2021 | State workers’ comp insurer |
| SCL Health Montana Regional Board | Director (incl. a term as Chair) | Since Jan 2020 | Healthcare regional board |
| Carroll College Board of Trustees | Trustee (2005–2010); Executive Committee member (2019–2022) | Various | Academic governance |
| MDU Resources (public company) | Director (former) | Nov 2005 – May 2023 | Prior public board; ended prior to KNF separation |
Board Governance
- Roles and committees: Chair of the Board; member, Nominating & Governance Committee. Not a member of the Audit or Compensation Committees .
- Independence: The board determined all directors except the CEO are independent; all committee members are independent. Ms. Fagg is an independent director .
- Board structure: KNF separates the Chair and CEO roles; the Chair is independent. Independent directors meet in executive session at each regular quarterly meeting, presided over by the Chair of the Board .
- Attendance: The board met seven times in 2024; each director attended at least 75% of the combined meetings of the board and their committees. The Nominating & Governance Committee met five times in 2024 .
- Director class/term: Class III director; term expires at the 2026 annual meeting .
- Overboarding policy: Directors may not serve on more than two other public company boards; all directors are in compliance .
- Governance enhancements: Proposal to eliminate supermajority voting requirements; robust investor engagement program .
Fixed Compensation
| Component (2024) | Amount | Notes |
|---|---|---|
| Annual Cash Fees (Director + Chair retainer) | $235,000 | Sum of $110,000 director retainer and $125,000 additional cash retainer for Board Chair; paid monthly; no meeting fees |
| Equity Awards (Grant-date Fair Value) | $239,925 | RSUs that vest the day before the next annual meeting; Board Chair also receives an additional RSU grant valued at $25,000 |
| Other Compensation | $103 | Group life insurance premium |
| Total | $475,028 | 2024 non-employee director compensation |
Additional details:
- Standard 2024 director equity: On May 15, 2024, each non-employee director received 1,905 RSUs based on the $78.74 closing price; RSUs vest the day immediately prior to the next annual meeting. The Chair of the Board receives an additional $25,000 RSU grant with the same vest schedule .
- Unvested RSUs held by Ms. Fagg as of Dec 31, 2024: 2,222 units .
- Deferral features: Directors may defer cash retainers; balances are held as phantom stock and paid in cash over five years after board departure .
Performance Compensation
| Performance Metric | Weight | Target | Actual | Payout |
|---|---|---|---|---|
| None – Director RSUs are time-based (vest on the day immediately prior to the next annual meeting) | N/A | N/A | N/A | N/A |
KNF uses performance-based metrics primarily for executives; director equity is time-vested to align with shareholder interests while preserving board independence .
Other Directorships & Interlocks
| Category | Company | Role | Notes |
|---|---|---|---|
| Current public company boards | None disclosed | — | No current public company directorships beyond KNF |
| Prior public company boards | MDU Resources | Director | Ended May 2023; KNF was separated from MDU on May 31, 2023 |
| Non-profit/State/Academic | Intermountain Health (Peaks Region); Montana State Fund; SCL Health Montana; Carroll College | Director/Chair roles | Ongoing governance roles in healthcare and state insurance |
Potential interlocks/conflicts:
- Related-party transactions: KNF reports no related person transactions involving directors or executive officers since the beginning of 2024; separation-related agreements with MDU (transition services, tax, employee matters) were arms-length and the transition services agreement terminated in 2024 (KNF paid ~$1.2m; received ~$156k) .
Expertise & Qualifications
- Executive leadership; risk management/compliance; human capital management; environment and sustainability; legal/regulatory/public policy; industry familiarity relevant to construction materials .
- Board skills grid lists Ms. Fagg with relevant checkmarks across leadership, risk, human capital, environment/sustainability, and legal/regulatory expertise, supporting her role as independent Chair .
Equity Ownership
| Item | Detail |
|---|---|
| Beneficial Ownership (as of Feb 28, 2025) | 26,905 shares; less than 1% of class (56,652,361 shares outstanding) |
| Unvested RSUs (as of Dec 31, 2024) | 2,222 units |
| Hedging/Pledging | Prohibited for directors; stock may not be pledged or held in margin (with limited exception excluding stock from margin) |
| Stock Ownership Guidelines | Directors must hold shares equal to 5x annual cash base retainer; five-year compliance window; all directors are in compliance or within the five-year grace period |
Insider Trades
| Transaction Date | Filing Date | Type | Security | Shares | Price | Post-Transaction Ownership | Source |
|---|---|---|---|---|---|---|---|
| 2025-05-22 | 2025-05-27 | Award (A) | Common Stock | 1,810 | $0.00 | 30,937 | https://www.sec.gov/Archives/edgar/data/1955520/000122520825005471/0001225208-25-005471-index.htm |
| 2024-12-31 | 2025-01-02 | Award (A) | Phantom Stock | 173.765 | $0.00 | 839.983 | https://www.sec.gov/Archives/edgar/data/1955520/000122520825000018/0001225208-25-000018-index.htm |
| 2024-09-30 | 2024-10-01 | Award (A) | Phantom Stock | 197.556 | $0.00 | 666.218 | https://www.sec.gov/Archives/edgar/data/1955520/000122520824008945/0001225208-24-008945-index.htm |
- Context: Director equity is granted as RSUs that settle in stock and may be deferred as phantom stock; no open-market purchases/sales by Ms. Fagg are disclosed in the above period, indicating alignment via equity awards rather than trading .
Governance Assessment
-
Positives:
- Independent Chair with separated Chair/CEO roles; regular executive sessions of independent directors with the Chair presiding .
- Majority independent board; all committees comprised solely of independent directors .
- Strong committee coverage (risk, compensation, governance) and active Nominating & Governance involvement by Ms. Fagg .
- Stock ownership guidelines (5x retainer) and prohibitions on hedging/pledging enhance alignment; directors in compliance or within the grace period .
- No director/executive related-person transactions; MDU transition services ended in 2024 with explicit disclosure .
- Shareholder-responsive governance (proposal to eliminate supermajority voting) and sustained investor outreach .
- Attendance threshold achieved by all directors in 2024; N&G Committee active (5 meetings) .
-
Watch items:
- Director compensation levels benchmarked above the 75th percentile of the peer group may draw scrutiny; however, mix includes meaningful equity and an independent consultant (Meridian) advises the Compensation Committee .
- Long cumulative tenure (20 years including pre-separation service) may raise entrenchment optics; mitigated by independent Chair role, ongoing board refreshment, and a mandatory retirement policy (generally age 74) .