Kenneth McGrath
ORASURE TECHNOLOGIESAbout Kenneth McGrath
Kenneth J. McGrath (age 53) is Chief Financial Officer of OraSure Technologies, Inc. and has served in this role since August 2022. He previously led finance functions at Quest Diagnostics and Johnson & Johnson, and began his career at Ford Motor Company. He holds a B.S. in Mechanical Engineering from the University of Notre Dame and an MBA from the University of Michigan (Ross). Company performance informing his pay-for-performance outcomes in 2024 included net revenues of $185.8M, adjusted operating loss of $(6.2)M, cost savings of $24.5M, and cumulative TSR value of 44.96 for 2024 versus peer index 84.53 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Quest Diagnostics | Vice President, Finance (led finance for clinical franchises, R&D, global markets, IT) | 2014–2022 | Oversaw finance across clinical franchises and strategic functions, enabling innovation and growth investments |
| Johnson & Johnson (Janssen R&D) | Senior Finance Director; other finance roles | ~15 years prior to 2014 | Directed R&D finance and broader J&J finance roles supporting product development portfolios |
| Ford Motor Company | Engineer | Began 1993 | Early career engineering experience building technical and operational foundation |
External Roles
None disclosed .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $173,558 | $483,000 | $497,500 |
| Target Bonus (% of Salary) | 50% | 50% | 50% |
| Non-Equity Incentive Paid ($) | $261,250 | $369,495 | $238,054 |
Notes:
- 2024 CFO salary rose ~3% per merit framework (Outstanding/Exceeds/Meets ranges) and benchmarking; McGrath’s salary increased from $483,000 to $497,500 (+3%) .
- 2024 bonus payout factor was 95.7% of target, resulting in $238,054 .
Performance Compensation
Annual Bonus (OTIP) Structure and 2024 Outcomes
| Metric (Weight) | Threshold (80%) | Target (100%) | Maximum | Actual | Achieved % | Payout % |
|---|---|---|---|---|---|---|
| Consolidated Net Revenues (50%) | $180M | $190.1–$194.1M | $220M; capped if core rev didn’t grow | $185.8M | 91% | 45.7% |
| Adjusted Operating Income (Loss) (25%) | $(18)M | $(16)M to $(13)M | $0 | $(6.2)M | 152% (capped to 100%) | 25.0% |
| Cost Savings (25%) | $15M | $17.6–$24.5M | $30M | $24.5M | 100% | 25.0% |
| Total Payout Factor | 95.7% |
Design features:
- No positive discretion for NEOs; revenue payout capped at 100% if core revenue did not grow YoY (it did not) .
- Final adjusted payout factor 95.7% for NEOs .
Long-Term Incentive (LTIP) 2024 Grants and PRU Performance Metrics
| Component | Grant Detail | Performance Structure |
|---|---|---|
| Time-vested RS (50%) | 58,759 shares granted 3/1/2024 | Vests in equal annual installments over 3 years (2025–2027) |
| Performance-vested PRUs (50%) | 58,759 target units granted 3/1/2024 | 50% cumulative revenue (2024–2026) with threshold/target/max of $450M/$500M/$550M and CFO positive in 2025 required to pay >100%; 50% rTSR vs peer group with thresholds p25/p51/p75 and cap at 105% if absolute TSR negative |
LTIP award range (2024 basis):
- CFO LTIP as % of salary: 105% (lower), 140% (target), 175% (max) .
Historical PRU vesting context:
- McGrath did not receive 2022–2024 PRUs due to onboarding timing; 2022 PRUs were not applicable to him .
Equity Ownership & Alignment
| Ownership Metric | Value |
|---|---|
| Total Beneficial Ownership (shares) | 460,987 |
| Percent of Shares Outstanding | <1% |
| Unvested RS (included in beneficial ownership footnote) | 201,657 shares (group footnote shows unvested RS by person; Mr. McGrath 201,657) |
| Options (exercisable/unexercisable) | None disclosed for CFO |
| Pledging/Hedging | Prohibited; no pledging or hedging allowed |
| Stock Ownership Guideline | CFO must hold 2x base salary; 5-year compliance window; 50% net shares retention until guideline met |
Upcoming vesting (potential selling pressure windows):
- RS: 43,961 vest 8/8/2025; 17,877 vest 3/1/2025; 17,876 vest 3/1/2026; 58,759 RS vest in thirds on 3/1/2025, 3/1/2026, 3/1/2027 .
- PRUs: 53,629 cliff vest 3/1/2026 (subject to performance); 29,379 and 29,380 cliff vest 3/1/2027 (subject to performance) .
Outstanding Equity Awards (as of 12/31/2024) – CFO
| Award Type | Shares/Units | Key Dates | Notes |
|---|---|---|---|
| RS | 43,961 | 8/8/2025 | Onboarding grant vesting schedule |
| RS | 35,753 | 3/1/2025 & 3/1/2026 | Time-based vesting |
| RS | 58,759 | 3/1/2025, 3/1/2026, 3/1/2027 | 2024 cycle RS |
| PRUs | 53,629 | Cliff 3/1/2026; perf-dependent | 3-year PRU |
| PRUs | 29,379 + 29,380 | Cliff 3/1/2027; perf-dependent | 3-year PRU |
Employment Terms
| Provision | Terms |
|---|---|
| Agreement Date/Start | Agreement in Aug 2022; CFO since Aug 2022 |
| Base/Bonus Targets | Minimum base $475,000; target bonus 50% |
| New-hire Equity | 131,883 RS (value determined by 20-day trailing average); vests over 3 years |
| Severance (non-CoC) | If terminated without cause or resigns for good reason: 12 months base + target bonus; 12 months subsidized COBRA; 50% of outstanding unvested time-based equity accelerated; 50% of performance equity eligible based on actual performance through period end |
| Severance (CoC period, double-trigger) | 24 months base + target bonus; 18 months subsidized COBRA; full acceleration of time-based equity; performance equity eligible through period end at not less than target if severance occurs after CoC |
| Non-compete/Non-solicit | Restricted from competing or soliciting during employment and 18 months thereafter |
| Clawback | Company will recoup excess compensation after restatement; up to 100% of incentive comp for misconduct/fraud; 3-year recovery period; Dodd-Frank compliant |
| Hedging/Pledging | Prohibited for executives and directors |
Compensation Structure Analysis
- Pay mix and governance: CFO compensation targets disciplined to peer group median (50th percentile); LTIP is 50% PRUs (rTSR and revenue) with 3-year vesting; OTIP emphasizes revenues, adjusted operating income, and cost savings; limited positive discretion; clawback policy exceeds minimum SEC requirements .
- Peer group benchmarking: Diagnostics/tools peers such as Adaptive Biotechnologies, Cerus, Standard BioTools, Veracyte; OraSure revenue $186M placed ~44th percentile; pay calibrated accordingly .
- Say-on-pay momentum: SOP support increased from 66% (2023) to 93% (2024) after program refinements (rTSR weight to 50%, rTSR cap if absolute TSR negative; revenue thresholds aligned to operating cash flow targets; removal of NEO individual modifiers) .
Performance & Track Record
| Area | Detail |
|---|---|
| 2024 CFO Performance Rating | Meets |
| 2024 Company Outcomes | Net revenues $185.8M; adjusted operating loss $(6.2)M; cost savings $24.5M; COVID-19 contract revenues $45M; positive operating cash flow from core business in Q3/Q4; 100 bps gross margin improvement to 43% YoY |
| Strategic Execution | Streamlined footprint; insourced production; exited risk assessment and Diversigen services; Sherlock acquisition; Sapphiros investment and distribution; Diagnostics Direct syphilis test partnership; expanded OraQuick labels and WHO prequalification for HCV self-test |
Equity Ownership & Alignment Details
| Topic | Company Policy / Status |
|---|---|
| Ownership guidelines | CFO 2x salary; 5 years to comply; retain 50% net shares until compliant |
| Compliance status | Not specifically disclosed for CFO |
| Insider trading policy | Trading windows and pre-clearance; adherence to Nasdaq/SEC; code prohibits short sales, hedging, pledging |
Employment Agreements & Potential Payments
| Scenario (as of 12/31/2024) | Estimated Benefits (CFO) |
|---|---|
| Death/Disability | Bonus earned but unpaid; equity acceleration per policy; health care benefits not specified for CFO in summary table; executive terms detailed in his agreement |
| Good Reason/Without Cause (non-CoC) | 12 months base ($497,500) + target bonus ($248,750); COBRA ~12 months; 50% acceleration of unvested time-based equity; 50% PRU eligibility based on actual performance |
| Good Reason/Without Cause (CoC period) | 24 months base ($995,000) + target bonus ($248,750); COBRA ~18 months; full acceleration of unvested time-based equity; PRUs eligible at not less than target if severance post-CoC |
Investment Implications
- Alignment: Strong pay-for-performance design with balanced OTIP metrics and 50% PRUs tied to rTSR and multi-year revenue, plus strict clawback and ownership guidelines; prohibitions on hedging/pledging mitigate misalignment risk .
- Retention risk: Double-trigger CoC protections (24 months base + target bonus and full equity acceleration) and robust LTIP cadence support retention; non-compete for 18 months adds post-exit friction .
- Trading signals: Multiple scheduled RS and PRU cliffs in Mar 2025–2027 may create periodic selling pressure; however, PRUs depend on multi-year performance (revenue and rTSR), potentially moderating immediate sell dynamics .
- Execution risk: 2024 outcomes show progress on cost containment and margin, but revenue declines tied to COVID wind-down and core softness underscore sensitivity to end-market demand; 2024 CFO rating “Meets” aligns with calibrated bonus payout (95.7% of target) .