Keith Pratt
Executive Vice President, Chief Financial Officer and Assistant Corporate Secretary at MGRC
Executive
About Keith Pratt
Keith E. Pratt (age 62) is Executive Vice President, Chief Financial Officer, and Assistant Corporate Secretary of McGrath RentCorp (MGRC). He joined MGRC in January 2006, became CFO in March 2006, and has served as EVP & CFO since February 2017; he holds a B.A. in Production Engineering from Cambridge University and an MBA from Stanford University . Company performance under his tenure in 2024 included 10% year-over-year revenue and Adjusted EBITDA growth despite demand headwinds in certain segments and distraction from a terminated merger process . Over the 12/31/2019–12/31/2024 period, MGRC’s cumulative TSR translated to $162.65 for $100 invested, alongside 2024 net income of $231.7 million and pre-tax income of $313.6 million .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| McGrath RentCorp | EVP & CFO; CFO | EVP CFO since 2017; CFO since 2006 | Led finance through organic and inorganic growth; capital allocation; compensation architecture |
| Advanced Fibre Communications (AFC) | CFO; Director Corporate Development | CFO 1999–2004; Director Corp Dev 1997–1999 | Guided public telecom equipment company through growth and sale to Tellabs |
| Pacific Telesis Group | Director, Strategy & Business Development | 1995–1997 | Corporate strategy and business development in telecom |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No external board roles disclosed for Pratt in MGRC proxies |
Fixed Compensation
Multi-year compensation (USD):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $480,000 | $500,000 | $520,000 |
| Discretionary Bonus | — | — | $40,000 |
| Stock Awards (Grant-date fair value) | $524,876 | $750,672 | $1,150,329 |
| Option Awards | — | — | — |
| Non-Equity Incentive Plan (Annual Cash Bonus) | $385,248 | $426,900 | $325,806 |
| All Other Compensation | $43,993 | $61,931 | $62,175 |
| Total Compensation | $1,434,117 | $1,739,503 | $2,098,310 |
Base salary progression:
| Year | Base Salary |
|---|---|
| 2024 | $520,000 |
| 2025 | $540,000 |
Performance Compensation
Annual cash bonus mechanics (2024):
| Component | Weight | Target | Actual | Payout % | Amount |
|---|---|---|---|---|---|
| Company Adjusted EBITDA | 75% | $349,676,000 | $351,725,000 | 105.90% | $247,806 |
| Personal Annual Priorities | 25% | Qualitative goals (max 100%) | 100% achieved | 100.00% | $78,000 |
| Total vs Target | — | Target bonus $312,000 | — | 104.40% | $325,806 |
Long-term equity incentives:
| Grant/Period | Type | Metric(s) | Target → Earned | Vesting |
|---|---|---|---|---|
| 2022–2024 PSUs | Performance RSUs | 3-year ROIC (corporate) | 3,230 → 6,460 units (200%) | Cliff vest at end of 3-year period (2/25/2025) |
| 2023–2025 PSUs | Performance RSUs | 50% ROIC, 50% Revenue (corporate) | In progress | Cliff vest at end of 3-year period (2/24/2026); change-in-control prorata at target if applicable |
| 2024 grant (Feb 23, 2024) | Time-based RSUs | Service-based (no performance metric) | 9,210 units | 33% on 2/23/2025; 33% on 2/23/2026; 34% on 2/23/2027 |
Plan design notes:
- 2024 equity was 100% RSUs due to pending WillScot transaction; reverted to 50% RSUs / 50% PSUs in 2025 .
- Annual bonus threshold/target/max calibration: 90% → 50%, 100% → 100%, 110% → 200% (straight-line) .
Equity Ownership & Alignment
Ownership and guidelines:
| Item | Detail |
|---|---|
| Beneficial Ownership | 57,945 shares (incl. 418 KSOP shares) |
| Shares Outstanding | 24,611,329 as of 4/17/2025 |
| Ownership % of Outstanding | ~0.24% (57,945 / 24,611,329) |
| Stock Ownership Guidelines (Execs) | CFO must hold equity equal to 2× base salary; 5 years to comply; 50% net shares holdback until met; calculation based on vested RSUs/PSUs (unvested RSUs and vested options excluded) |
| Hedging/Pledging | Prohibited for employees/officers/directors under Insider Trading Policy |
Vested vs unvested breakdown (as of 12/31/2024):
| Award | Unvested Units | Market/Payout Value |
|---|---|---|
| RSUs (granted 2/25/2022) | 1,077 units | $120,430 |
| RSUs (granted 2/24/2023) | 2,401 units | $268,480 |
| RSUs (granted 2/23/2024) | 9,210 units | $1,029,862 |
| PSUs (granted 2/25/2022) | 6,460 units (unearned until performance/vesting) | $722,357 |
| PSUs (granted 2/24/2023) | 3,600 units (unearned until performance/vesting) | $402,552 |
| Options Outstanding | None disclosed (no unexercised options listed) | — |
Recent vesting/settlement:
| Year | Shares Acquired on Vesting | Value Realized |
|---|---|---|
| 2024 | 9,393 | $1,170,837 |
Policy alignment:
- Clawback: Amended and restated compensation recoupment policy adopted in 2023; applies to cash and equity incentive compensation over prior 3 years in case of restatement .
- No tax gross-ups, no repricing, limited perquisites; hedging and pledging banned .
Employment Terms
Severance and change-of-control economics (CFO):
| Scenario | Cash Severance | Bonus Component | Medical COBRA | Equity Treatment | Notes |
|---|---|---|---|---|---|
| Termination without cause (outside change-in-control window) – Amended Severance Plan (Feb 2025) | 18 months base salary | 150% of target annual cash bonus | Up to 18 months | Prorated vesting of RSUs and PSUs at target | Requires release; consolidated plan |
| Termination without cause or resignation for good reason within 24 months after change in control – Amended Severance Plan (Feb 2025) | 24 months base salary | 200% of target annual cash bonus | 12 months | 100% vesting of RSUs; PSUs vest at target | Double-trigger; requires release |
| Prior Plans (applicable through 12/31/2024) | 2× base salary | 2× target bonus | 12 months (CFO) | Full acceleration of equity awards; PSUs at target prorated under certain conditions | Separate Change-in-Control and Severance plans |
| Annual Bonus Accrual on Termination | Pro-rata at target for profitability component; full satisfaction for priorities component (if termination without cause/good reason) | — | — | — | Applies under the annual plan terms |
Employment agreements: MGRC states it does not have employment agreements with executive officers; severance governed by plan documents and award agreements .
Investment Implications
- Pay-for-performance alignment is strong: 2024 corporate Adjusted EBITDA exceeded plan (100.59%), driving a 105.9% payout on the profitability bonus component; PSUs have historically paid at 200% for 2022–2024, evidencing above-target ROIC performance .
- 2024 equity issuance was entirely time-based RSUs due to a pending merger, temporarily lowering performance linkage; the reversion to 50% PSUs in 2025 restores longer-term, ROIC/revenue-tied incentives, reducing execution risk drift .
- Insider selling pressure risk from scheduled RSU vestings exists each February (2025–2027) but is mitigated by a 50% net-share holdback until ownership guidelines are met and by prohibitions on hedging/pledging; 2024 vesting settlements totaled $1.17 million in value .
- Retention risk is modest: enhanced severance (18–24 months base and 150–200% of target bonus) and full acceleration under change-of-control provide meaningful protection; governance features (clawback, say-on-pay ~97% approval) suggest shareholder-friendly oversight despite robust protections .