Michael K. Kneller
LANDSTAR SYSTEMAbout Michael K. Kneller
Michael K. Kneller (age 50) serves as Vice President, General Counsel and Secretary of Landstar System, Inc. and has been an executive officer since June 2005; prior to Landstar, he was a corporate attorney at Debevoise & Plimpton LLP . Over his tenure, Landstar’s 5-year cumulative TSR reached 70% versus 47% for the Dow Jones Transportation Stock Index, while 2024 diluted EPS was $5.51 and net income $195.9M amid a freight downcycle that drove 2024 revenue 9% below 2023, resulting in no ICP payouts to executives for 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Debevoise & Plimpton LLP | Corporate Attorney | Prior to 2005 | Corporate legal training and complex transactions expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Landstar Scholarship Fund | Trustee | Current | Community engagement and education support |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $400,000 | $400,000 | $400,000; increased to $425,000 effective Jan 1, 2025 |
| ICP Participation (“target bonus %” proxy) | 50% participant percentage | 50% participant percentage | 50% participant percentage |
| Actual ICP Bonus Paid ($) | $835,000 | $0 (threshold not met) | $0 (threshold not met) |
| All Other Compensation ($) | $27,107 | $26,219 | $22,066 (401k $8,500; HSA $2,070; insurance premiums $9,996) |
Performance Compensation
Annual ICP structure and 2024 outcome
| Metric | Threshold | Target | Actual | Payout ($) |
|---|---|---|---|---|
| Diluted EPS (FY2024) | $6.63 | $7.36 | $5.51 | $0 (below threshold) |
RSU performance multiple schedule (applies to Regular RSU Awards)
| Performance Hurdle (avg change in Operating Income and Pre-tax EPS) | Performance Multiple |
|---|---|
| 0% | 0% |
| 25% | 50% |
| 50% (Target) | 100% |
| 75% | 150% |
| 100% (Maximum) | 200% |
Regular RSUs vest on the 3rd, 4th and 5th anniversaries of grant; dividend equivalents accrue in RSUs; post-vesting 1-year holding applies to RSU shares (net of taxes) .
Equity grants to Kneller (multi-year)
| Grant Type | 2022 | 2023 | 2024 |
|---|---|---|---|
| RSUs (#) | 4,921 RSUs (grant 1/28/2022) | 4,159 RSUs (grant 2/3/2023) | 3,972 RSUs (grant 2/2/2024) |
| RSU Vesting | 3rd/4th/5th anniversaries (2025/2026/2027) | 3rd/4th/5th anniversaries (2026/2027/2028) | 1/31/2027, 1/31/2028, 1/31/2029; expire 3/1/2029 |
| RSU Grant Date Fair Value ($) | Included in $947,337 total stock awards | Included in $947,220 total stock awards | $697,346 (RSUs) |
| Restricted Stock (#) | 1,640 shares (grant 1/28/2022) | 1,386 shares (grant 2/3/2023) | 1,324 shares (grant 2/2/2024) |
| Restricted Stock Vesting | 1/31/2023, 1/31/2024, 1/31/2025 | 1/31/2024, 1/31/2025, 1/31/2026 | 1/31/2025, 1/31/2026, 1/31/2027 |
| Restricted Stock Grant Date Fair Value ($) | Included in $947,337 total stock awards | Included in $947,220 total stock awards | $249,945 (restricted stock); FMV/share $188.78 |
Stock vested in 2024 (realized)
| Name | Shares Vested (#) | Value Realized ($) |
|---|---|---|
| Michael K. Kneller | 4,714 | $916,260 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (3/21/2025) | 62,247 shares; <1% of class |
| Unvested Restricted Stock (12/28/2024) | 2,794 shares; market value $487,050 (at $174.32) |
| Unearned RSUs Outstanding (12/28/2024) | 14,016 RSUs; payout value basis $2,443,269 (at $174.32) |
| Ownership Guidelines | 4× salary for Named Executives; achieved by those ≥5 years (Kneller qualifies) |
| Hedging/Pledging | Prohibited for executives and employees |
| Post-vesting Holding | 1-year hold on RSU settlement shares (net of taxes) |
Employment Terms
| Provision | Terms |
|---|---|
| Key Executive Employment Protection Agreement | Double-trigger style: severance if terminated without cause or resign for good reason within 2 years post-change-in-control, or after signing definitive agreement pre-close if transaction consummates |
| Severance Multiple | 2× (base salary + “threshold” bonus amount calculated via ICP participation) |
| Pro Rata Bonus & Benefits | Pro rata “threshold” bonus for year of termination; up to 1-year medical benefits continuation |
| Change-in-Control Value (as of 12/27/2024) | $2,407,676 (severance, pro rata threshold bonus, medical, plus intrinsic value of partially accelerated equity at $174.32) |
| Equity Acceleration on CIC | Restricted stock accelerates; RSUs partially accelerate per plan (20% target or performance-based partial in early years) |
Compensation and Performance Linkages
| Measure | Company Practice |
|---|---|
| Annual Bonus (ICP) | Single metric: diluted EPS vs threshold/target; no payout in FY2024 as EPS fell short |
| Long-term RSUs | Performance based on avg change in Operating Income and Pre-tax EPS per diluted share; 0–200% multiple; 3/4/5-year vesting cadence |
| Restricted Stock | Time-based retention; 3 equal annual tranches |
| Clawback | Recoup incentive compensation upon accounting restatements (3-year lookback) |
Say‑on‑Pay, Peer Group, and Governance Signals
- Say‑on‑Pay support ~96% at the 2024 Annual Meeting, indicating strong shareholder endorsement of pay design .
- CEO/PEO benchmarking peer group (transport/logistics): JBHT, CHRW, ODFL, Ryder, Saia, Schneider, Hub Group, Werner, Matson, Forward Air, etc. (two peers removed post-delisting) .
- 2024 operating backdrop: truck volumes and pricing down; revenue −9% y/y; short‑term pay reflected performance (no ICP payout) while long‑term equity maintained alignment .
Investment Implications
- Pay-for-performance alignment: Kneller’s 2024 bonus was zero under the EPS-driven ICP, reinforcing discipline in downturns; long-term RSUs tie payouts directly to Operating Income and Pre‑tax EPS improvements, with post‑vesting holds mitigating immediate sell pressure .
- Retention risk: Multi-year RSU and restricted stock schedules plus a 2× CIC severance reduce attrition risk; hedging/pledging prohibitions and ownership guidelines indicate “skin in the game” without leverage risk .
- Trading signals: Upcoming restricted stock vesting dates (Jan 31, 2025/2026/2027) and RSU tranches (2027–2029) create potential supply, but the 1-year RSU holding requirement dampens near-term selling; monitor Form 4s around vest dates for flow impact .
- Performance context: Despite 2024 earnings pressure (EPS $5.51), Landstar’s 5-year TSR of 70% vs 47% for the sector peer index supports long-term value creation under current governance/comp design .