Jonah Adelman
KRATOS DEFENSE & SECURITY SOLUTIONSAbout Jonah Adelman
Jonah Adelman is President of Kratos’ Microwave Electronics Division (MED), a role he has held since August 2015. He previously led Kratos’ Israel electronics business (acquired March 2011) and earlier served as General Manager of General Microwave Israel after engineering roles at General Microwave Corporation in New York; he holds a B.A. in Mathematics & Physics (Brooklyn College) and an M.S. in Applied Mathematics (NYU), and is a longtime IEEE member recognized by the Israeli IEEE Microwave Chapter in 2008 . Mr. Adelman is 74 and is one of Kratos’ “operational” named executive officers, with incentive pay tied primarily to division financials (revenue, Adjusted EBITDA, free cash flow) and company EBITDA; in 2024 Kratos delivered record Adjusted EBITDA of $105.7 million, achieved 99.3% of a ~$1.144 billion revenue target, and improved free cash flow use to ~$8.5 million versus a target use of ~$28.6 million, underpinning near‑target bonus payouts for executives including Mr. Adelman .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Kratos Defense & Security Solutions – Microwave Electronics Division | President | 2015–present | Leads MED; role classified as “operational NEO” with incentives tied to division EBITDA, revenue, and FCF plus consolidated EBITDA, aligning execution with financial outcomes . |
| Kratos Electronic Products Division (Israel) | General Manager | 2011–2015 | Guided integration and growth of Israel electronics business post-acquisition (March 2011), contributing to Kratos’ microwave capabilities and backlog pipeline . |
| General Microwave Israel (subsidiary of GMC) | General Manager | 1990–2011 | Scaled operations and engineering in Israel; longstanding leadership of microwave engineering/manufacturing business later acquired by Kratos . |
| General Microwave Corporation (NY, USA) | R&D Microwave Engineer; Assistant GM | Early career–1990 | Built core microwave engineering expertise; contributed to technology foundation later leveraged in Israel operations . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| IEEE / IEEE Microwave Chapter (Israel) | Member; Certificate of Appreciation recipient | Longtime; 2008 recognition | Professional standing in microwave engineering; industry visibility in specialty relevant to Kratos products . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 350,000 | 350,000 | 350,000 |
| Target Annual Bonus ($) | — | — | 210,000 (60% of salary for operational NEOs) |
| Actual Annual Bonus Paid ($) | 27,183 | 204,750 | 210,000 (100% of target) |
Notes:
- Operational NEO bonus design (applies to Mr. Adelman): 60% of base salary target; up to 75% of target driven by division financials (30% division Adj. EBITDA, 15% division revenue, 20% division FCF, 10% consolidated Adj. EBITDA), and up to 25% by individual goals; 90% threshold on each financial metric and on division Adj. EBITDA gateway is required for payout .
Performance Compensation
Annual Incentive Plan – Design and 2024 Outcome
| Metric | Weighting | Target (Mr. Adelman) | Actual 2024 | Payout |
|---|---|---|---|---|
| Division Adjusted EBITDA | 30% of target bonus | Included in $210,000 target | Not individually disclosed; operational NEO financial achievements ranged 0–100% | Rolled into total outcome |
| Division Revenue | 15% | Included in $210,000 target | Not individually disclosed | Rolled into total outcome |
| Division Free Cash Flow | 20% | Included in $210,000 target | Not individually disclosed | Rolled into total outcome |
| Consolidated Adjusted EBITDA | 10% | Included in $210,000 target | Company beat $105.1m target (achieved $105.7m) | Counted toward payout |
| Individual Objectives | Up to 25% | Included in $210,000 target | CEO-evaluated for operational NEOs; 90–100% achievement range across execs | Counted toward payout |
| Total Annual Bonus | — | $210,000 | 100.0% of target | $210,000 |
Key plan rules:
- No upside above 100% of target (peer plans often 150–300%); 90% threshold per financial metric; Adj. EBITDA gateway at 90% must be met for any financial payouts .
Long-Term Incentives (RSUs)
| Grant Year | Time-based RSUs (#) | Vesting | Performance RSUs (#) | Performance Condition & Vesting |
|---|---|---|---|---|
| 2024 | 15,000 | Ratable annually over 5 years | 15,000 | 33.3% vests for each 10% increase in Adjusted EBITDA over a 5-year period; 10% min threshold; 30% growth = 100% earned |
| 2025 | 15,000 | Ratable annually over 5 years | 15,000 | Same framework; growth measured from record 2024 Adjusted EBITDA baseline, making hurdles progressively more challenging |
Additional vesting detail (Form 4 references):
- Prior RSUs include 15,000 grants dated Jan 4, 2021; Jan 3, 2023; Jan 4, 2024, each vesting ratably over five anniversaries (time-based tranche) .
Company equity vehicle mix and policy:
- Kratos has emphasized 50/50 performance- and time-based RSUs (no stock options currently granted), with new equity awards carrying double-trigger change-in-control provisions (subject to any applicable agreements) .
Multi‑Year Compensation Snapshot (Total, by SEC SCT)
| Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|
| 2022 | 350,000 | 589,500 | 27,183 | 81,655 | 1,048,338 |
| 2023 | 350,000 | 300,900 | 204,750 | 81,578 | 937,228 |
| 2024 | 350,000 | 555,900 | 210,000 | 81,848 | 1,197,748 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/17/2025) | 79,348 shares; <1% of outstanding (153,285,643 shares) . |
| Outstanding unearned/unvested equity (12/29/2024) | 80,000 RSUs; indicative market value $2,121,600 at $26.52/share, assuming performance RSUs at target . |
| Stock ownership guidelines | Proxy discloses CEO 5x salary guideline; no specific multiple disclosed for other executives . |
| Hedging/pledging | Company prohibits hedging and pledging by executives; no pledging disclosed for Mr. Adelman . |
| Options | Company does not currently grant options; RSUs are primary equity vehicle . |
Insider trading and potential selling pressure:
- On May 13, 2025, Mr. Adelman sold 40,000 shares at $33.76 for proceeds of ~$1.35 million; shares owned following the transaction were 39,348 (down from 79,348 reported as of 3/17/2025) .
Employment Terms
| Term | Mr. Adelman |
|---|---|
| Employment agreement | None; no individual employment agreement . |
| Severance | Not disclosed for Mr. Adelman (contrast: specific terms disclosed for another division president) . |
| Change-in-control (CIC) | Certain RSUs vest upon a change in control; modeled acceleration value $2,121,600 if CIC had occurred on 12/29/2024 (performance awards valued at target for this calculation) . |
| CIC triggers (company policy) | New equity awards include double-trigger vesting upon CIC (subject to applicable agreements) . |
| Clawback | Company incentive compensation recoupment policy; updated in 2023 to comply with Rule 10D‑1/Nasdaq . |
| Anti‑hedging/pledging | Prohibited for directors and executive officers . |
Performance & Track Record Context
| Company performance items relevant to 2024 pay | Detail |
|---|---|
| 2024 revenue | $1.136 billion vs. $1.144 billion target (99.3% attainment) . |
| 2024 Adjusted EBITDA | $105.7 million vs. $105.1 million target (beat) . |
| 2024 free cash flow | Use of ~$8.5 million vs. targeted use of ~$28.6 million (outperformed target) . |
| Pay vs. performance disclosures | “Compensation actually paid” framework tied to TSR, Net Income, and Adjusted EBITDA over 2020–2024; 2024 Adjusted EBITDA shown at $105.69 million . |
| Say‑on‑pay support | 92.22% approval for 2023 NEO pay at 2024 annual meeting . |
Compensation Structure Analysis
- Cash vs. equity mix: Equity dominates NEO compensation via RSUs; company emphasizes 50% performance-based RSUs tied to 5-year Adjusted EBITDA growth, aligning long-term outcomes with profitability expansion; options not currently used, reducing risk of option repricing concerns .
- Annual bonus rigor: No payout above 100%; 90% thresholds across financial metrics and a 90% Adj. EBITDA gateway create high hurdles versus peers (which often allow 150–300% upside) .
- Peer group calibration: For 2025, peer set updated to include Leonardo DRS to reflect sector consolidation; supports competitive alignment of awards while limiting inflationary drift .
- Discretion/clawback: Committee retains measured discretion within a capped framework; robust clawback and no excise tax gross‑ups in new/renewed agreements improve governance quality .
Insider Transactions & Vesting Schedules (recent)
| Date | Action | Amount/Price | Post-transaction holdings |
|---|---|---|---|
| 2025-05-13 | Open market sale | 40,000 @ $33.76; ~$1.35m proceeds | 39,348 shares (direct) |
| 2024 RSU grants | 15,000 TBRSUs; 15,000 PBRSUs | TBRSUs: 5‑year ratable vest; PBRSUs: 33.3% per 10% Adjusted EBITDA growth (5-year window) | Outstanding unearned RSUs valued at $2,121,600 (as of 12/29/2024) |
| 2025 RSU grants | 15,000 TBRSUs; 15,000 PBRSUs | Same structures; PBRSU growth measured off record 2024 EBITDA baseline | — |
Note: Form 4 filings also reference prior time-based RSU grants dated Jan 4, 2021 and Jan 3, 2023 vesting ratably over five anniversaries .
Investment Implications
- Alignment and retention: Mr. Adelman’s incentives are heavily contingent on multi-year Adjusted EBITDA growth and division-level profitability/cash flow, promoting durable alignment. The sizable unearned RSUs (~80,000 units; ~$2.12 million illustrative value) indicate material unvested equity, a positive retention anchor assuming continued performance .
- Near-term selling pressure: The May 2025 sale of 40,000 shares reduced direct holdings to ~39,348; monitor subsequent Form 4s for pattern/plan indicators and any additional supply into strength .
- Governance quality: No individual employment agreement, robust clawback, anti‑pledging/hedging policy, and capped bonus without upside mitigate pay-risk concerns; high say‑on‑pay support (92.22%) suggests shareholder endorsement of pay design .
- Performance dependency: Bonus gateways (90% thresholds) and PBRSU hurdles (≥10% growth to earn, 30% for full vest) make realized compensation sensitive to sustained EBITDA growth; 2024 execution (record EBITDA, near‑target revenue, improved FCF) supported a 100% annual bonus for Mr. Adelman but continued outperformance is required for PBRSU vesting, particularly as 2025 PBRSUs benchmark from record 2024 levels .