Andrew Hess
Knight-Swift Transportation HoldingsAbout Andrew Hess
Andrew Hess (age 52) has served as Chief Financial Officer of Knight-Swift Transportation Holdings Inc. since February 26, 2024, after leading M&A and finance roles across the Knight and Swift businesses since 2019; previously he was VP & CFO of Honeywell Aerospace Services & Connectivity (2016–2019). He holds a B.A. in International Relations and an MBA from Brigham Young University . Under his tenure as an NEO in 2024, KNX reported FY2024 revenue of $7.41B versus $7.14B in 2023 (approx. +3.8% YoY), with Q4 2024 consolidated operating income up 326% YoY and Adjusted EPS of $0.36 vs $0.09 in Q4 2023, reflecting disciplined cost actions and diversification benefits (particularly in Truckload and LTL) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Knight-Swift Transportation | Chief Financial Officer | Feb 2024–present | Oversight of finance during diversification and LTL expansion; ongoing integration initiatives . |
| Knight-Swift Transportation | SVP Finance & Corporate Development (enterprise); SVP Finance (Swift) | 2021–2024 (SVP F&CD); 2023–2024 (SVP Finance, Swift) | Led M&A (AAA Cooper, MME, U.S. Xpress), developed deep operating and financial experience across Knight and Swift . |
| Knight Transportation (pre-2017 merger)/Knight | SVP Finance (Knight Transportation); various finance roles | 2019–2021 (SVP Finance Knight); prior roles since 2019 | Financial leadership across Knight segment prior to enterprise role . |
| Honeywell International | VP & CFO, Aerospace Services & Connectivity | 2016–2019 | P&L and finance leadership for Aerospace services/connectivity segment . |
External Roles
- None disclosed .
Fixed Compensation
| Item | 2024 Detail |
|---|---|
| Base salary (effective at 12/31/2024) | $500,000; raised from $300,000 to $425,000 in Mar 2024 upon promotion; from $425,000 to $500,000 in Nov 2024 . |
| Target annual bonus % (2024) | 75% of base salary . |
| Actual cash bonus paid for 2024 performance | $297,000 (79.2% of target; paid Feb 21, 2025) . |
| 2025 target annual bonus % | 90% of base salary . |
| All other compensation (2024) | $10,554 (includes $204 gift card; $10,350 401(k) match) . |
| 2024 total reported compensation | $2,319,485 (Salary $409,615; Stock awards $1,602,316; Bonus $297,000; Other $10,554) . |
Performance Compensation
2024 Annual Cash Bonus Plan
| Metric | Weight | Target structure | 2024 actual result | Payout factor |
|---|---|---|---|---|
| Adjusted Operating Income Growth | 40% | Sliding scale from 0% (<0%) to 200% (>40%) . | Not met . | 0% for this component . |
| Consolidated Revenue Growth (ex Trucking & LTL fuel surcharge) | 30% | Sliding scale from 0% (<4%) to 200% (>12%) . | 4.8% . | Corresponding scale applied . |
| Strategic Objectives: (1) Improve U.S. Xpress profitability; (2) Expand LTL terminal network | 30% | Committee discretion based on milestones . | Both achieved at 200% . | 200% for this component . |
| ESG modifier | ±10% | Based on ratings from MSCI, Sustainalytics, CDP, EcoVadis, S&P Global . | +10% . | Applied to total . |
| Resulting payout | — | — | Company-wide payout at 79.2% of target; Hess received $297,000 . | 79.2% . |
Long‑Term Incentives (granted in 2024)
| Grant date | Instrument | Target shares | Vesting/performance details | Grant-date fair value / pricing notes |
|---|---|---|---|---|
| Mar 13, 2024 | RSUs | 5,130 | Time-vested: 33% on Jan 31, 2025; 33% on Jan 31, 2026; 34% on Jan 31, 2027 . | RSU fair value $56.13 per share (close on grant date) . |
| Mar 13, 2024 | PRSUs | 7,695 (target) | Company performance (Adjusted EPS CAGR and Consolidated Revenue ex Trucking & LTL FSC CAGR) over 1/1/2024–12/31/2026; TSR modifier vs benchmarking peer group; payout 0–200%; vests Jan 31, 2027 . | PRSU fair value model $58.01 per share (Monte Carlo, probable outcome); maximum payout assumption separately disclosed . |
| Nov 30, 2024 | RSUs | 5,727 | Time-vested: 33% on Jan 31, 2026; 33% on Jan 31, 2027; 34% on Jan 31, 2028 . | RSU fair value $59.36 per share (close prior trading day) . |
| Nov 30, 2024 | PRSUs | 8,590 (target) | Three-year period 1/1/2025–12/31/2027. One‑third “Company Performance PRSUs”: half on Adjusted EPS CAGR, half on Consolidated Revenue (ex Truckload & LTL FSC) CAGR. Two‑thirds “Relative Performance PRSUs”: half on relative total revenue growth rank, half on relative Return on Net Tangible Assets rank vs TL peers (CVLG, HTLD, MRTN, SNDR, WERN). TSR modifier adjusts ±25% based on percentile . | PRSU fair value model $61.47 per share (Monte Carlo, probable outcome) . |
Key PRSU payout curves (selected):
- Adjusted EPS CAGR: 0% payout if <10%; 100% at 22–28%; 200% at >40% .
- Revenue CAGR (ex TL & LTL FSC): 0% if <−4%; 100% at −1.0% to +0.5%; 200% at >3.5% .
- Relative RONTA and Total Revenue Growth rank: 0% at rank 6; 100% at rank 3; 200% at rank 1 .
- TSR modifier: −25% below 35th percentile; +25% above 65th percentile .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (as of Mar 17, 2025) | 7,874 shares; less than 1% of outstanding (162,000,854 shares) . |
| Unvested RSUs (as of Dec 31, 2024) | 5,130 (Mar 2024 grant); 5,727 (Nov 2024 grant); plus earlier tranches: 306 (5/31/2025), 3,241 (50% vest 1/31/2025 & 50% 1/31/2026), 629 (5/31/2025 & 5/31/2026), 1,370 (5/31/2025–2027), 1,746 (25% annually 2025–2028) . |
| PRSUs outstanding (as of Dec 31, 2024) | Target 7,695 (performance period 2024–2026); Target 8,590 (2025–2027). Disclosure table shows 19,238 (max) for the 2024–2026 cycle and 354 (threshold) placeholder for the 2025–2027 cycle; target levels are 7,695 and 8,590, respectively . |
| Stock ownership guideline | CFO must hold KNX stock equal to 3× base salary; eight-year compliance window; retain at least 50% of “Covered Shares” for two years post-earn . |
| Guideline status | All directors and officers currently in compliance with the Stock Ownership and Retention Policy . |
| Pledging/hedging | Prohibited for Designated Persons (includes CFO); no hardship exemption. Only certain pre-existing Knight family pledges are grandfathered and monitored . |
| Clawback | Dodd-Frank compliant clawback (NYSE 303A.14): recoup incentive-based compensation upon material restatement; three-year look-back . |
Vesting calendar and potential selling pressure indicators:
- January 31 each year has significant RSU/PRSU vest tranches (2025–2028), which can create episodic liquidity/trading windows around tax settlements and diversification needs .
- Company Securities Trading Policy imposes pre-clearance/blackouts for insiders, which can mitigate opportunistic trading timing .
Employment Terms
| Topic | Key terms |
|---|---|
| Appointment | Appointed CFO effective Feb 26, 2024; compensation adjustments subsequently set by Compensation Committee and disclosed in 2024–2025 proxies . |
| Base salary path | $300,000 pre-promotion; $425,000 effective Mar 2024; $500,000 effective Nov 2024 . |
| Annual bonus targets | 75% of salary (2024); 90% (2025) . |
| Change-of-control and severance mechanics | Omnibus equity plan requires double-trigger vesting upon change of control (CIC + qualifying termination); RSUs/PRSUs vest on death/disability (PRSUs at performance through end of calendar year); no vesting if performance period had not started before trigger . |
| Estimated equity acceleration (as of 12/31/2024) | CIC with qualifying termination: PRSUs $440,815. Death/Disability: RSUs $962,623; PRSUs $440,815. Eligible Retirement: RSUs $658,863 . |
| Clawback; anti-pledging/hedging | Clawback per NYSE Rule 303A.14; anti-pledging/hedging policy prohibitions apply to CFO . |
| Tax gross-ups | None; company highlights “No tax gross-up payments” in plan design . |
Investment Implications
- Pay-for-performance alignment: Hess’ 2024 cash bonus paid at 79.2% of target (not a windfall), reflecting AOI growth miss but strong strategic execution (USX profitability improvement, LTL expansion) and an ESG uplift; PRSUs are majority of LTI (60%), tied to EPS/revenue CAGR and relative RONTA/Revenue Growth with a TSR modifier, aligning incentives with profitable growth and peer outperformance .
- Retention and selling pressure: RSUs vest heavily on January 31 each year (through 2028) and legacy grants vest across May 31 tranches, implying recurring potential for tax-withholding sales; however, pre-clearance/blackouts and ownership retention rules (retain 50% of Covered Shares for two years) temper near-term selling pressure .
- Ownership “skin in the game”: Beneficial ownership is modest in absolute terms (7,874 shares, <1%), but the CFO is subject to a 3× salary ownership requirement and is reported as compliant; continued vesting should raise holdings over time if net shares are retained per policy .
- Governance and risk safeguards: Robust anti-pledging/hedging policy, Dodd-Frank clawback, double-trigger CIC vesting, and absence of tax gross-ups reduce governance risk; say-on-pay support was very strong (98.3% in 2024), lowering risk of compensation friction with shareholders .
- Execution track record: Hess has a direct track record leading KNX’s strategic M&A (AAA Cooper, MME, U.S. Xpress), while 2024 results showed improved Q4 efficiency and diversified performance; the LTI framework focuses on multi-year EPS and revenue CAGR, which should reinforce disciplined execution through a freight upcycle .
Supporting Data
2024 Summary Compensation (Hess)
| Metric | 2024 |
|---|---|
| Salary | $409,615 |
| Stock Awards | $1,602,316 |
| Non-Equity Incentive (cash bonus) | $297,000 |
| All Other Compensation | $10,554 |
| Total | $2,319,485 |
2024–2025 Equity Awards Outstanding (Hess)
| Award | Shares | Notes |
|---|---|---|
| RSUs (Mar 13, 2024) | 5,130 | 33% vests 1/31/2025; 33% vests 1/31/2026; 34% vests 1/31/2027 . |
| PRSUs (Mar 13, 2024) | 7,695 (target) | Performance 2024–2026; TSR modifier; vests 1/31/2027 . |
| RSUs (Nov 30, 2024) | 5,727 | 33% vests 1/31/2026; 33% vests 1/31/2027; 34% vests 1/31/2028 . |
| PRSUs (Nov 30, 2024) | 8,590 (target) | Performance 2025–2027; TSR modifier; vests 1/31/2028 . |
| Earlier RSU tranches | 306; 3,241; 629; 1,370; 1,746 | Various legacy vesting dates 1/31/2025–5/31/2028 per footnotes . |
Beneficial Ownership (as of Mar 17, 2025)
| Holder | Shares | % of class |
|---|---|---|
| Andrew Hess (CFO) | 7,874 | <1% (of 162,000,854 shares) |
Change-of-Control / Separation Equity Acceleration (as of Dec 31, 2024; valuation at $53.04/sh)
| Event | RSUs | PRSUs | Total |
|---|---|---|---|
| CIC without qualifying termination | — | — | — |
| CIC with qualifying termination | — | $440,815 | $440,815 |
| Death/Disability | $962,623 | $440,815 | $1,403,438 |
| Eligible Retirement | $658,863 | — | $658,863 |
Notes and Omissions
- No separate employment agreement disclosure for Hess (beyond compensation program terms) was identified; severance cash multiples (salary+bonus) are not disclosed, but equity treatment on CIC/death/disability/retirement is provided above .
- Insider Form 4 transaction history was not available in the materials reviewed here; potential selling pressure commentary is based on scheduled vesting and company trading/retention policies .
Investment Implications
- Incentive design emphasizes multi-year profit growth and relative capital efficiency, with TSR as a modifier, which is favorable for long-term alignment. 2024 cash payout at 79.2% indicates measured pay outcomes in a challenging freight environment .
- The January 31 vesting cadence across multiple grants could create recurring event-driven trading windows; however, anti-hedging/pledging rules and retention requirements reduce misalignment risk .
- Ownership is modest but governed by a stringent 3× salary guideline and strong say-on-pay support (98.3%), suggesting low compensation-governance controversy risk and management alignment with shareholder value creation .