Paul Keel
Envista HoldingsAbout Paul Keel
Paul Keel is President and Chief Executive Officer of Envista and a director since May 1, 2024. He is age 55 and previously served as CEO of FTSE 100 constituent Smiths Group plc (May 2021–March 2024) and held senior leadership roles at 3M, including Group President of the Consumer Business Group and President of 3M Medical and 3M Unitek; earlier in his career he worked at GE, McKinsey & Company, and General Mills . He holds a BA from Carleton College and an MBA from Harvard Business School . 2024 was a transition year at Envista: the Board revised guidance in August 2024 and reset annual incentive goals and cap; company-reported adjusted EBITDA margin was 11.8% and net loss was $1,118.6 million for 2024, while PSUs incorporate a 3-year relative TSR modifier versus the S&P 400 Health Care Sector Index .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Smiths Group plc | Chief Executive Officer | May 2021–Mar 2024 | Led organization to “record growth and profitability” per NVST Board disclosure . |
| 3M Company | Group President, Consumer Business Group | Mar 2019–Aug 2020 | Senior P&L leadership at a global innovator; prior roles included President 3M Medical and President 3M Unitek (specialty dental) . |
| GE; McKinsey & Company; General Mills | Various roles | Pre‑2004 | Early-career leadership/consulting and operating experience before joining 3M in 2004 . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Envista Holdings Corporation | Director | Since 2024 | Director nominee; Board committees: none . |
| Other current public company boards | — | — | None . |
Fixed Compensation
| Component | Value | Notes |
|---|---|---|
| Base salary (ongoing) | $1,100,000 | Employment agreement initial annual rate . |
| Target annual bonus (ICP) | 150% of base (max 300%) | Prorated for 2024 service; ICP goals revised in Aug-2024 and max payout for 2024 cut to 125% of target . |
| Target LTI (annual, ongoing) | ~$6,500,000 | 60% PSUs, 20% RSUs, 20% stock options . |
| Target total direct comp (ongoing) | $9,250,000 | As summarized in proxy . |
| 2024 actual bonus paid | $1,086,144 | Non-Equity Incentive Plan Compensation . |
| 2024 401(k) contribution | $13,800 | Company contribution . |
| 2024 relocation reimbursements | $348,993 | Relocation up to $650,000 with tax gross-up; paid amount shown . |
| 2024 cash make‑whole (one‑time) | $281,466 | Clawback if termination for Cause or resignation without Good Reason within 12 months . |
Performance Compensation
- Annual LTI structure and metrics
- 2024 annual LTI awarded at ~$6.5M: 60% PSUs, 20% stock options, 20% time-based RSUs .
- PSU metrics: core sales growth and adjusted EBITDA margin (independent goals) over three years; modifier based on relative TSR vs S&P 400 Health Care Sector Index .
- New-hire/make-whole equity and special awards
- Make-whole equity ~$11,000,000: 50% RSUs, 50% stock options; vests in equal tranches on Nov 1, 2024, Nov 1, 2025, Nov 1, 2026; accelerates on involuntary termination without Cause/for Good Reason .
- Special performance-based stock options granted 8/25/2024: 485,680 unearned options at $18.70, expiring 8/25/2034 (performance conditions per plan) .
- 2024 incentive plan reset during transition
- Following CEO appointment and revised guidance on Aug 7, 2024, the Compensation Committee re-aligned 2024 ICP sales and adjusted EBITDA targets and lowered the ICP max payout from 200% to 125% of target for 2024 .
2024 Grants and Vesting Detail
| Grant | Date | Instrument | Shares/Options | Terms |
|---|---|---|---|---|
| Annual CEO LTI | 5/25/2024 | PSUs (target) | 205,265 | 3-year performance; core sales growth and adjusted EBITDA margin; relative TSR modifier . |
| Annual CEO LTI | 5/25/2024 | Stock options | 164,560 | Vest ratably over 3 years; strike $18.25; expire 5/25/2034 . |
| Annual CEO LTI | 5/25/2024 | Time-based RSUs | 71,235 | Vest ratably over 3 years . |
| Make‑whole | 5/25/2024 | Stock options | 696,210 | Equal tranches vest 11/1/2024, 11/1/2025, 11/1/2026; accel. on qualifying termination; strike per grant docs . |
| Make‑whole | 5/25/2024 | Time-based RSUs | 301,370 | Equal tranches vest 11/1/2024, 11/1/2025, 11/1/2026; accel. on qualifying termination . |
| Special performance options | 8/25/2024 | Performance options | 485,680 (unearned) | Strike $18.70; expire 8/25/2034; performance-based . |
Compensation Mix and Pay Outcomes (2024)
| Item | Value |
|---|---|
| Salary | $1,100,000 . |
| Non-equity incentive (paid) | $1,086,144 . |
| Annual LTI (excl. make-whole): PSUs | $3,900,035 . |
| Annual LTI (excl. make-whole): RSUs | $1,300,039 . |
| Annual LTI (excl. make-whole): Options | $1,300,024 . |
| Make‑whole equity: RSUs | $5,500,003 . |
| Make‑whole equity: Options | $9,400,069 . |
| Make‑whole cash | $281,466 . |
Equity Ownership & Alignment
| Measure | Value | Notes |
|---|---|---|
| Beneficial ownership (as of 4/14/2025) | 387,128 shares | Includes 76,460 shares held, 232,070 options exercisable, 23,745 RSUs vesting within 60 days, and 54,853 options vesting within 60 days . |
| Ownership as % of outstanding | <1% | Based on 169,467,689 shares outstanding as of 4/14/2025 . |
| Executive stock ownership guideline | 5x base salary | 5-year compliance window; NEOs in compliance/have time to comply as of 12/31/2024 . |
| Pledging/Hedging | Prohibited | No pledging; no hedging/derivatives for directors or employees . |
| Deferred comp (2024 elections) | None disclosed for Keel | 2024 deferral table shows no deferrals for Keel . |
Employment Terms
| Topic | Key terms |
|---|---|
| Employment agreement | At-will; CEO and Director appointment effective May 1, 2024 . |
| Severance (no CIC) | 2.0x (base + target bonus) for CEO; for Keel, illustration shows $5,500,000 cash severance; benefits continuation valued at $32,537 . |
| Severance (within 24 months post‑CIC) | 2.5x (base + target bonus) for CEO; for Keel, illustration shows $6,875,000 cash severance; benefits continuation $32,537; full vesting of unvested equity; PSUs vest at target . |
| Change-in-control trigger | Double-trigger (requires CIC + qualifying termination) . |
| Clawbacks | Company-wide “rigorous, no-fault” clawback policy; make‑whole cash and relocation reimbursements subject to clawback upon certain separations within 12 months . |
| Non-compete / Non-solicit | Non-compete during employment and generally 12 months post-termination; non-solicit of employees generally 24 months post-termination (state-specific carve-outs apply) –. |
| Relocation and tax gross‑up | Reimbursement up to $650,000 plus tax gross‑up; repayment required under specified circumstances . |
| 409A and tax | Agreement structured to comply with 409A; standard six-month delay for specified employees –. |
Board Governance
- Board service: Director since 2024; not assigned to Audit, Compensation, Nominating & Governance, or Finance committees as of April 14, 2025 .
- Independence: Other directors are marked “Independent”; Keel is not so designated in the director table (consistent with CEO status) .
- Attendance: Board met 9 times in 2024; all directors attended at least 75% of Board and committee meetings .
- Director pay: No additional director compensation for Keel while serving as CEO; non-employee director policy includes 5x retainer ownership guideline; hedging/pledging prohibited .
Performance & Track Record
- Transition and guidance: Following Keel’s appointment, Envista revised 2024 guidance (Aug 7, 2024) and re-aligned ICP goals; max ICP payout reduced to 125% for 2024 to balance incentives and shareholder fairness in a transition year .
- Early operating indicators: Company cited improving performance in 2H24—progress in implants (Nobel Biocare, Implant Direct, Alpha‑Bio) and gross margin improvement in Spark aligners by Q4 2024 .
- Pay-versus-performance context: 2024 adjusted EBITDA margin 11.8%; 2024 net loss $(1,118.6) million; PSU design includes a 3-year relative TSR modifier vs S&P 400 Health Care Sector .
Compensation Structure Analysis
- Market benchmarking and recruiting: Committee sized Keel’s package using CEO market data from its independent consultant; make‑whole awards (~$11.3M forfeitures considered) were predominantly equity, including 50% options, to align value creation with shareholders .
- Mix and risk: For 2024, the vast majority of CEO total target comp was variable/performance-based (~88% at target for PEO); multi-year vesting and PSU metrics aim to balance growth and profitability with TSR alignment .
- Plan changes in 2024: ICP targets re-set to updated guidance and payout cap reduced to 125% for 2024—an unusual year-of-transition adjustment .
Related Party Transactions and Red Flags
- Related party transactions: None requiring disclosure since Jan 1, 2024 .
- Hedging/pledging: Prohibited—reduces alignment risks associated with collateralized borrowing or hedging .
- Clawbacks: “No-fault” company policy and award-specific clawbacks on make‑whole cash/relocation .
- Option repricing: Not disclosed .
Compensation Committee and Processes
- Independent consultant (FW Cook) conducted a deep-dive risk review in 2024; Committee concluded program does not encourage inappropriate risk-taking .
- Peer and market data informed CEO package and LTI structure .
Investment Implications
- Near-term selling pressure: Significant RSU vesting dates (Nov 1, 2025 and Nov 1, 2026 for make‑whole tranches) and annual RSU vesting cadence may create periodic liquidity events for insiders; pledging and hedging prohibitions mitigate alignment concerns .
- Performance leverage: Large option overhang across annual and make‑whole grants plus special performance options (8/25/2024 at $18.70, expiring 2034) increases upside sensitivity to sustained execution and stock appreciation .
- Retention and CIC economics: Double-trigger CIC with full vesting (PSUs at target) and 2.5x cash multiple provides strong retention through change events; base case severance multiple of 2.0x supports continuity during turnaround .
- Pay alignment: PSU metrics (core sales growth, adjusted EBITDA margin) and TSR modifier align rewards with multi-year value creation; 2024 ICP reset reflects pragmatic recalibration during leadership transition .