Michael Liu

About Michael Liu

Michael Liu is Executive Vice President of Operations at Knight (Knight-Swift Transportation Holdings Inc.), age 52, with 25 years at the company; he has served as EVP of Operations since 2017 following regional leadership roles and holds a BS in Business Management from the University of Phoenix . Company performance during his senior-operations tenure included total revenue of $7.4B in 2024 (adjusted operating ratio 94.7%, operating cash flow $799M, free cash flow $234M) and $7.1B in 2023 (adjusted operating ratio 93.1%) . Long‑term incentive TSR outcomes across recent PRSU cycles reflect mixed performance: the 2020 relative PRSUs paid at 127.5% (peer-relative RO NTA and revenue growth rankings both second; TSR ~27.3% with 40th–45th percentile adjustment) and the 2021 relative PRSUs paid at 112.5% (peer-relative rankings both second; TSR ~‑1.88% below the 40th percentile) .

Past Roles

Fixed Compensation

• Michael Liu is not a named executive officer (NEO) and his individual base salary, target/actual bonus, and grant values are not disclosed in the company’s proxy; KNX discloses detailed compensation only for NEOs (CEO, CFO, Executive/Vice Chairs, General Counsel) .
• KNX’s design features relevant to senior executives: conservative base pay targeted to market median, with strong pay‑for‑performance using annual cash incentives (capped) and long‑term equity with 60% performance‑based PRSUs, 40% time‑based RSUs; clawback policy; double‑trigger vesting on change of control; no option repricing; no tax gross‑ups .

Performance Compensation

Note: The above reflects the 2024 cash bonus construct and outcomes for NEOs; Michael Liu’s individual eligibility/payout is not disclosed .

Long‑Term Incentives (structure applied to NEOs; design signals for broader senior leadership retention):

• PRSUs (60%): 3‑year performance period with two components: Adjusted EPS CAGR and consolidated revenue CAGR (ex fuel surcharge) for one‑third; peer‑relative rankings on revenue growth and return on net tangible assets for two‑thirds; TSR modifier 75–125% vs a benchmarking peer group; earned shares vest post‑measurement (e.g., January 31 following period) .
• RSUs (40%): time‑based vesting 33%/33%/34% over three years; no dividends on unvested awards; intended for retention and management stability .

Equity Ownership & Alignment

Employment Terms

• Employment agreement, severance, and change‑of‑control terms for Michael Liu are not disclosed; KNX’s Omnibus Plan mandates double‑trigger vesting for equity on change of control, and the company maintains a clawback policy with a 3‑year look‑back for restatements and certain covered officers .

Performance & Track Record

• Strategic initiatives under KNX leadership in 2023–2025 include the U.S. Xpress acquisition with $144M annualized run‑rate improvements and an expectation to be $1 accretive to EPS by 2026, signaling execution on integration and cost/revenue synergies .
• In 2024, KNX expanded LTL through the DHE (Dependable Highway Express) LTL acquisition and 51 terminal additions, increasing door count over 30% and integrating DHE within ~3 months, reinforcing LTL as a core pillar and diversifying revenue streams .
• Cybersecurity governance: no material information security breaches in the last four years; no fines, penalties, or settlements for information security; independent oversight by the Nominating and Corporate Governance Committee .

Compensation Structure Analysis

• Year‑over‑year compensation mix remains weighted to equity with performance PRSUs (60%) and capped short‑term cash, emphasizing pay‑for‑performance and retention through multi‑year vesting; TSR modifies PRSU outcomes, aligning with shareholder returns .
• Design emphasizes diversified revenue growth and efficiency: metrics include adjusted operating income growth, revenue growth (ex fuel surcharge), relative RO NTA/revenue growth vs truckload peers, with ESG modifier to integrate sustainability performance .
• Governance features: clawback; anti‑pledging; prohibition on option repricing; double‑trigger CoC vesting; no tax gross‑ups—reducing shareholder‑unfriendly risk factors .

Risk Indicators & Red Flags

• Regulatory/investigations: KNX states neither the company nor its directors/officers are under investigation by regulators in the past two years .
• Pledging: legacy pledges exist for Kevin and Gary Knight (grandfathered, reduced, monitored), but no disclosure of pledging by Michael Liu .
• Info security: no material breaches in last four years; strong oversight and testing cadence .
• Say‑on‑pay support: 98.3% approval in 2024, indicating broad investor endorsement of the compensation program .

Investment Implications

• Alignment and retention: While Liu’s specific grants are undisclosed, KNX’s executive incentive architecture (multi‑year PRSU/RSU cycles, double‑trigger protection, clawback, ownership/retention rules) suggests high retention focus and alignment for senior operators, dampening near‑term insider selling pressure via pre‑clearance/blackouts and share‑retention requirements .
• Execution signal: Corporate payout outcomes (2024 bonus driven by strategic objectives despite AOI miss) highlight management’s ability to deliver on integration and LTL expansion—key operational levers under Liu’s remit—supporting future margin normalization when truckload cycles turn .
• Monitoring: Absence of individual Form 4 detail for Liu limits direct read‑through on personal selling; monitor future proxy disclosures (beneficial ownership table) and 8‑Ks for comp changes, plus periodic PRSU vesting cohorts and TSR outcomes to assess incentive realization across cycles .