William McMorrow
Kennedy-Wilson HoldingsAbout William McMorrow
William J. McMorrow, age 78, has served as Chairman and Chief Executive Officer of Kennedy‑Wilson Holdings since 1988; he holds a B.S. and an MBA from the University of Southern California and previously accumulated 17+ years in banking at Imperial Bancorp (EVP; chaired Credit Policy Committee) and Fidelity Bank (SVP for eight years) . Recent SEC “pay vs performance” disclosure shows Company TSR of 59.34 for 2024 (vs 90.55 peer group TSR), net income of $(33.7) million, and ROIA of 5.83%, with multi‑year TSR, net income and ROIA trends provided for 2020–2024 . KW’s 2024 say‑on‑pay received ~89% approval, signaling investor support for the program’s pay‑for‑performance orientation .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Imperial Bancorp | EVP; Chairman, Credit Policy Committee | Not disclosed | Senior credit policy leadership prior to KW; banking experience |
| Fidelity Bank | SVP | 8 years | Senior banking role; contributes finance/credit expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Kennedy Wilson Europe Real Estate plc (LSE: KWE) | Director | 2014–2017 | Oversight of externally managed affiliate; European market exposure |
| University of Southern California | Trustee | Not disclosed | Governance/strategic involvement; alumni leadership and programs |
| Navy SEAL Foundation | Board member (until Jan 2021) | Until 2021 | Non‑profit governance; community leadership |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,500,000 | 1,500,000 | 1,500,000 |
| Target Annual Bonus Opportunity (% of base) | — | Unchanged vs 2024 per program disclosure | Target 200%; Threshold 100%; Max 300% |
| Actual Annual Cash Bonus ($) | 3,375,000 | 2,065,500 | 3,735,000 |
Notes:
- CEO base salary has remained unchanged since 2015 .
Performance Compensation
2024 Annual Cash Bonus Program – Metrics, Weighting and Actual Attainment
| Metric | Weighting | Threshold | Target | Maximum | Actual |
|---|---|---|---|---|---|
| Growth in Investment Management Fees (ex‑promote) | 25% | 25.0% | 35.0% | 45.0% | 53.7% |
| Cash from Asset Sales | 25% | $350M | $500M | $650M | $562.4M |
| Unsecured Debt Reduction | 15% | ($150M) | ($250M) | ($350M) | ($307.3M) |
| Asset Stabilizations | 15% | $15M | $20M | $25M | $28.5M |
| Other Key Corporate Performance & Individual Factors | 20% | Qualitative | Qualitative | Qualitative | Below Target for CEO |
- 2024 bonus opportunities: Threshold 100%, Target 200%, Maximum 300% of base for the CEO .
- Committee determined CEO’s payout was ~25% below target primarily due to stock price performance in the qualitative component .
- Actual 2024 CEO cash bonus paid: $3,735,000 .
2024 Long‑Term Equity Program – Grant Detail and Vesting
| Award Type | Grant Date | Target Shares (#) | Vesting / Hurdles | Grant Date Fair Value ($) |
|---|---|---|---|---|
| Relative TSR RSUs | 2/16/2024 | 327,246 | Cliff vest at 12/31/2026 vs MSCI World Real Estate (GICS 1); Threshold −1200 bps=25%, Target 0 bps=50%, Max +1200 bps=100%; Max capped at 75% if absolute TSR <20%; 3‑year post‑vesting hold | 3,099,020 |
| ROIA RSUs | 2/16/2024 | 327,246 | 1/3 vest at 12/31/2024, 12/31/2025, 12/31/2026 if ROIA ≥4.8%/5.2%/5.6% for Threshold/Target/Max; Max capped at 75% if absolute TSR hurdles not met (7%, 14%, 21% cumulative); 3‑year post‑vesting hold | 2,817,588 |
| Retentive RSUs (time‑based) | 2/16/2024 | 327,246 | Three‑year annual pro‑rata vest; 3‑year post‑vesting hold | 2,817,588 |
| Total 2024 Equity at Target | 2/16/2024 | 981,738 | Mix: 33% TSR, 33% ROIA, 33% Retentive; rigorous hurdles and holding requirements | 8,734,196 |
Additional facts:
- On average, only ~30% of performance‑based RSUs eligible to vest based on performance through 12/31/2024 were earned, evidencing rigorous hurdles (NEO cohort) .
- RSUs vested for CEO in 2024: 114,888 shares; value realized $1,285,597 (closing price at vest) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 11,772,373 shares; includes 7,849,517 in the William J. McMorrow Revocable Trust; includes 90,851 owned by spouse (disclaimed); ~8.5% of outstanding (138,293,288 shares) as of 4/15/2025 |
| Outstanding (Unvested) Service‑Based RSUs at 12/31/2024 | 33,079 (1/20/22); 81,399 (1/19/23); 327,246 (2/16/24) |
| Outstanding (Unearned) Performance RSUs at 12/31/2024 | 66,157; 99,237 (1/20/22 grants); 162,799; 122,075 (1/19/23 grants); 654,492; 163,623 (2/16/24 grants) |
| Stock Ownership Guidelines | CEO required to hold 10x base salary; compliance “Yes” (as of 12/31/2024); 3‑year mandatory post‑vesting holding for all RSUs |
| Hedging/Pledging | Anti‑hedging and anti‑pledging policies apply to officers and directors; no existing pledges by executives as of 12/31/2024 |
Employment Terms
| Term | Provision |
|---|---|
| Agreement Term | Expires September 29, 2026; annual base salary $1,500,000; eligible for annual performance bonus and equity awards per Compensation Committee |
| Severance (Without Cause / Good Reason) | Cash severance equals continued base salary through remainder of term plus lump sum equal to 3x average of prior 3 years’ base + annual cash bonus (less continued salary); Company‑subsidized healthcare; vesting of outstanding equity awards; illustrative cash severance $14,440,500; continued benefits $45,813; equity acceleration $30,908,750; total $45,395,063 (as of 12/31/2024 assumptions) |
| Disability/Death | Cash amount per agreement and continuation of vesting; life insurance policy procured with $32 million payable upon death (company purchased premiums) |
| Change in Control (CIC) | CIC only (no termination): equity award acceleration illustrated at $30,908,750; CIC with termination: same cash severance and benefits as above plus equity acceleration; 280G cutback not applicable for CEO in the illustration |
| Definitions | “Cause” and “Good Reason” definitions included; Change‑in‑Control removed from Good Reason in program evolution (no modified single trigger cash severance) |
| Clawback | Amended and Restated Compensation Recovery Policy compliant with SEC/NYSE; applies to incentive‑based compensation for current/former executives; awards on/after Oct 2, 2023 subject to policy |
Board Governance
- Role: Chairman and Chief Executive Officer; combined leadership structure with Lead Independent Director (David A. Minella) to mitigate independence concerns and chair executive sessions of non‑management directors .
- Independence: Company reports 11 independent directors; the CEO/Chairman is not independent by virtue of executive status .
- Committees: Board has Audit, Compensation, Nominating, Capital Markets, and ESG Committees; McMorrow is listed with Capital Markets committee involvement in director biographies .
- Attendance: In 2024 the Board held eight meetings; no director attended fewer than 75% of aggregate Board and committee meetings except one (Boehly) who was below 75% (Board and Capital Markets Committee) .
- Director fees: McMorrow did not receive director fees in 2024 (non‑employee retainer structure applies only to independent directors) .
Compensation Tables
Summary Compensation (CEO)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 1,500,000 | 1,500,000 | 1,500,000 |
| Stock Awards ($) | 10,152,901 | 8,934,017 | 8,734,196 |
| Non‑Equity Incentive Plan ($) | 3,375,000 | 2,065,500 | 3,735,000 |
| All Other Compensation ($) | 1,495,180 | 1,364,549 | 1,873,332 (incl. personal aircraft use; life insurance premiums; 401k) |
| Total ($) | 16,523,080 | 13,864,066 | 15,842,528 |
2024 Grants of Plan-Based Awards (CEO)
| Grant Date | TSR RSUs Target (#) | ROIA RSUs Target (#) | Retentive RSUs (#) | Fair Value TSR ($) | Fair Value ROIA ($) | Fair Value Retentive ($) |
|---|---|---|---|---|---|---|
| 2/16/2024 | 327,246 | 327,246 | 327,246 | 3,099,020 | 2,817,588 | 2,817,588 |
Outstanding and Unearned Equity at FY‑end 2024 (CEO)
| Grant Date | Unvested Service RSUs (#) | Unearned Performance RSUs (#) |
|---|---|---|
| 1/20/2022 | 33,079 | 66,157; 99,237 |
| 1/19/2023 | 81,399 | 162,799; 122,075 |
| 2/16/2024 | 327,246 | 654,492; 163,623 |
Employment & Contracts
| Item | Detail |
|---|---|
| Start at KW | 1988 (Chairman & CEO since joining) |
| Contract Expiration | September 29, 2026 |
| Auto‑Renewal | Not disclosed — |
| Non‑Compete/Non‑Solicit | General restrictive covenants referenced; specific terms not disclosed |
| Garden Leave | Not disclosed — |
| Post‑termination Consulting | Not disclosed — |
Performance & Track Record
| Year | Company TSR ($) | Net Income ($ mm) | ROIA (%) |
|---|---|---|---|
| 2020 | 85.01 | 107.8 | 3.57 |
| 2021 | 118.36 | 336.4 | 4.35 |
| 2022 | 82.21 | 101.9 | 5.09 |
| 2023 | 69.02 | (281.4) | 5.20 |
| 2024 | 59.34 | (33.7) | 5.83 |
Qualitative 2024 highlights: investment management fee growth to $99m (+60%); fee‑bearing capital to $8.8b (+5% YoY; +126% since 2020); real estate AUM to $28b (+12%); ~$571m cash from asset sales/recaps/repayments; multifamily same‑property NOI growth 3.6%; stabilization initiatives adding an estimated $65m in annual NOI .
Compensation Structure Analysis
- Mix emphasizes equity (majority of CEO pay in RSUs), with rigorous TSR and ROIA hurdles and a 3‑year post‑vesting hold, increasing alignment and deferring liquidity .
- Program enhancements include adding an absolute TSR cap and eliminating CIC as Good Reason in severance (reducing single‑trigger cash severance risk) .
- 2024 cash bonuses tied 80% to objective metrics; CEO qualitative component assessed below target due to stock price performance, demonstrating linkage to TSR .
Risk Indicators & Red Flags
- Anti‑hedging and anti‑pledging policies in place; no executive pledges outstanding as of 12/31/2024, reducing forced‑sale risk .
- Broad clawback policy (cash and equity) adopted and applied to awards since Oct 2023, enhancing recourse on restatements .
- Equity acceleration upon CIC (even with no termination) presents event‑driven payout sensitivity for shareholders .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval ~89%; Compensation Committee conducted peer group review and added absolute TSR modifiers to long‑term awards to strengthen alignment with shareholder returns .
Equity Ownership & Alignment – Additional Detail
| Holder | Shares | % Outstanding |
|---|---|---|
| William J. McMorrow | 11,772,373 (incl. 7,849,517 via revocable trust; 90,851 spouse‑owned, disclaimed) | 8.5% |
- Minimum ownership guideline compliance (CEO 10x base salary) and mandatory 3‑year post‑vesting holding period on RSUs enhance alignment and dampen near‑term selling pressure .
Investment Implications
- Alignment and retention: Large beneficial ownership (~8.5%), stringent long‑term RSU hurdles, and 3‑year post‑vesting holding period materially align incentives and defer liquidity, limiting near‑term insider‑selling pressure despite ongoing annual vesting .
- Pay‑for‑performance: 2024 bonus metrics exceeded on objective goals (fees, asset sales, debt reduction, stabilizations) while qualitative TSR‑linked component pulled CEO payout below target, reinforcing TSR linkage; performance RSU earn‑rates (~30% earned cohort‑wide) corroborate hurdle rigor .
- Event risk: Equity acceleration on CIC without termination may increase payout sensitivity to strategic transactions; cash severance remains double‑trigger, moderating single‑trigger cash risk .
- Governance: Combined CEO/Chairman structure offset by Lead Independent Director and independent committees; robust anti‑hedging/pledging and clawback policies mitigate governance risk; high say‑on‑pay support reduces over‑compensation concerns .