Kip Ellis
PATRICK INDUSTRIESAbout Kip Ellis
Kip B. Ellis is President—Powersports, Technology, and Housing at Patrick Industries (since Jan 2024), after serving as EVP of Operations and Chief Operating Officer from Sep 2016 to Jan 2024; he joined PATK in Apr 2016 after senior roles at Dometic (VP Aftermarket Sales, 2015–2016) and Atwood Mobile Products (VP Global Sales & Marketing, 2007–2015), with 28+ years of industry experience across RV, marine, manufactured housing, industrial and automotive markets . Pay is tightly linked to performance: 2024 STIP was based 70% on adjusted net income and 30% on individual objectives, with Ellis earning 127% of target ($1.144m) on 98% company performance; LTIP vests on 3-year cumulative EBITDA with 50–200% payout range and includes both performance-contingent and time-based shares . Notably, 2021 performance-contingent shares vested at 200% of target (Jan 2024), reflecting strong historical execution on multi-year EBITDA goals .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Patrick Industries | President—Powersports, Technology & Housing | Jan 2024–present | Oversees leadership, strategic planning and accounting across powersports, technology, and housing end markets . |
| Patrick Industries | EVP Operations & Chief Operating Officer | Sep 2016–Jan 2024 | Led operations across PATK’s platform during cyclical swings; elected officer Sep 2016 . |
| Patrick Industries | VP Market Development | Apr 2016–Sep 2016 | Commercial development across target end markets . |
| Dometic Group | VP Aftermarket Sales | 2015–2016 | Aftermarket growth and channel leadership . |
| Atwood Mobile Products | VP Global Sales & Marketing | 2007–2015 | Global sales/marketing leadership in RV ecosystem . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No external public company directorships disclosed for Ellis in the 2024 or 2025 proxies . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 516,346 | 504,808 | 525,000 |
| Base Salary (Board-set annual rate) ($) | 525,000 | 525,000 | 525,000 |
| All Other Compensation ($) | 24,800 | 25,800 | 26,400 |
Notes:
- “All Other Compensation” primarily includes 401(k) match and car allowance/health benefits (e.g., 2024: $13,800 401(k) match + $12,600 other) .
Performance Compensation
Summary Compensation (cash + equity)
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Stock Awards ($, grant-date fair value) | 1,289,264 | 1,540,064 | 1,336,742 |
| Non-Equity Incentive Plan (STIP) ($) | 1,710,090 | 793,890 | 1,144,350 |
| Total Compensation ($) | 3,540,500 | 2,864,562 | 3,032,492 |
2024 STIP design and payout (Ellis)
| Metric | Weight | Target | Actual | Payout Mechanic | Ellis Result |
|---|---|---|---|---|---|
| Company adj. Net Income | 70% | $153.4m | $150.2m (98% of plan) | 50–200% vs plan (threshold 75%, target 100%, 110% stretch, 115% max) | Included in 127% total |
| Individual strategic objectives | 30% | Rating 3.5 | Company uses 0–5 scale; Ellis assessed individually | 50–200% vs rating (2.5=threshold, 3.5=target, 4.4=stretch, 5.0=max) | Included in 127% total |
| Total | 100% | $900,000 target (171% of $525k base) | — | — | 127% of target = $1,144,350 |
LTIP design and Ellis’s 2024 grant
- Structure: 80% performance-contingent RSUs (3-year cumulative EBITDA 2024–2026), 20% time-based RSUs (3-year cliff) .
- Payout grid (Performance RSUs): <80% plan=0%; 80%=50%; 100%=100%; 110%=150%; 120%=200% .
- Ellis 2024 LTIP target: 243% of base ($1,275,000), 20,132 target shares = 4,026 time-based + 16,106 performance-contingent shares (board price $63.34) . Time-based vests 1/24/2027; performance RSUs vest based on 2024–2026 EBITDA .
| LTIP Component (2024) | Weight | Shares (Ellis) | Vesting / Performance |
|---|---|---|---|
| Time-based RSUs | 20% | 4,026 | Cliff vest on 1/24/2027 |
| Performance RSUs (3-yr EBITDA) | 80% | 16,106 target (range 8,053–32,212) | Earned at 50–200% based on 2024–2026 cumulative EBITDA |
Historical signal: 2021 performance shares vested at 200% (Jan 17, 2024), underscoring outperformance vs plan .
Options/SARs
- No options/SARs granted 2022–2024; Ellis exercised all remaining options in 2024; no options/SARs outstanding at 12/31/2024 .
- New 2025 award: 42,180 stock options (exercise price $92.72) vesting pro-rata over 4 years (9-year term) and 42,180 SARs with 4 equal tranches (strike prices $92.72, $110.76, $132.31, $158.05) vesting pro-rata over 4 years (9-year term) .
Vests/Exercises (liquidity/pressure signals)
| Event | Detail | Value Realized |
|---|---|---|
| 2024 PSU vest (2019–2021 grant) | 200% payout; part of broader NEO vesting | Included in 38,573 shares vested for Ellis in 2024 |
| 2024 option exercises | 27,000 options (granted 5/14/2020) | $1,281,060 |
| 2023 option exercises | 21,000 options (granted 5/14/2020) | $977,130 |
Equity Ownership & Alignment
- Beneficial ownership: 147,744 shares as of Mar 21, 2025; <1% of shares outstanding . Prior year (Mar 22, 2024): 101,316 shares; <1% .
- Unvested equity at 12/31/2024: 4,026 time-based RSUs ($334,480 value at $83.08) and 16,106 performance RSUs target ($1,338,086) . Time-based grants from 2022 and 2023 vest on 1/26/2025 and 1/25/2026, respectively .
- Ownership guidelines: Required multiple = 2x base salary; Ellis requirement $1,050,000; PATK discloses all NEOs exceeded the requirement for 2024 .
- Hedging/pledging: Hedging transactions are permitted; company has no policy prohibiting hedging; no specific holding period post-exercise/vesting; no pledging disclosure for Ellis .
- Options outstanding: None as of 12/31/2024 (all exercised); new 2025 grants create future multi-year vesting overhang (see above) .
Employment Terms
- Employment agreement: Provides severance of 12 months base salary plus annual non-equity incentive compensation (pro-rated if termination during the year) upon termination without cause; includes two-year non-compete and other restrictive covenants .
- Equity on termination/CIC: Time-based RSUs fully vest upon termination without cause, death/disability, or change in control; performance RSUs continue to vest if terminated without cause/death/disability (subject to performance) and fully vest at target upon change in control (single-trigger for equity) .
Potential payments (as of 12/31/2024 market price $83.08):
| Scenario | Base Salary | Acceleration of LTIs | Annual Non-Equity Incentive Bonus | Total Benefits |
|---|---|---|---|---|
| Termination without cause | $525,000 | $6,275,448 | $1,144,350 | $7,944,798 |
| Change of control (equity vests at target) | $525,000 | $6,275,448 | $1,144,350 | $7,944,798 |
| Death or disability | — | $6,275,448 | $1,144,350 | $7,419,798 |
Compensation Structure Analysis
- High pay-at-risk mix: Base set near 25th–50th percentile; majority of total target comp variable (STIP + LTIP) to reinforce performance alignment .
- Shift to RSUs vs options: LTIP is 100% RSUs (80% performance/20% time) during 2022–2024; options/SARs reintroduced in 2025 with multi-strike SARs—expands upside convexity but introduces future vest-driven supply .
- Performance rigor: STIP tied to adjusted net income and individual objectives; LTIP tied to 3-year EBITDA with 50–200% payout; historical 200% PSU payouts (2021 grant) indicate prior outperformance .
- Governance flags: Hedging permitted; no mandated post-vest holding period; equity vests at target upon CIC (single-trigger for equity), which may reduce retention leverage in a sale .
Performance & Track Record
- 2024 STIP outcome: Company achieved 98% of adjusted net income target; Ellis earned 127% of target STIP—above target via individual performance differentiation .
- Multi-year EBITDA execution: 2021 PSU tranche paid at 200% (vested Jan 2024), demonstrating strong three-year EBITDA performance vs plan .
- Value realization: Significant equity monetization via 2023–2024 option exercises ($977k and $1.28m, respectively) alongside large PSU vesting, evidencing value creation and potential supply overhang management .
Equity Awards & Vesting Schedule Details (Ellis)
| Grant | Type | Target/Granted Shares | Vesting/Measurement |
|---|---|---|---|
| 1/26/2022 | Time-based RSUs | 4,286 | Vest 1/26/2025 |
| 1/26/2022 | Performance RSUs | 17,144 (target) | 2022–2024 EBITDA; vest per payout grid |
| 1/25/2023 | Time-based RSUs | 4,853 | Vest 1/25/2026 |
| 1/25/2023 | Performance RSUs | 29,120 (target) | 2023–2025 EBITDA; vest per payout grid |
| 1/24/2024 | Time-based RSUs | 4,026 | Vest 1/24/2027 |
| 1/24/2024 | Performance RSUs | 16,106 (target) | 2024–2026 EBITDA; 50–200% payout |
| 2/25/2025 | Stock Options | 42,180 | Pro-rata vest over 4 years; $92.72 strike; 9-year term |
| 2/25/2025 | SARs | 42,180 | Four tranches vest pro-rata over 4 years; strikes $92.72/$110.76/$132.31/$158.05; 9-year term |
Equity Ownership Snapshot
| Record Date | Shares Beneficially Owned | % of Class |
|---|---|---|
| Mar 21, 2025 | 147,744 | <1% |
| Mar 22, 2024 | 101,316 | <1% |
Employment & Contracts
- Start at PATK: April 2016; officer since Sep 2016; President—Powersports, Technology & Housing since Jan 2024 .
- Non-compete: Two years post-termination; additional restrictive covenants .
- Severance economics: One year base salary plus annual non-equity incentive compensation (pro-rated if mid-year termination) on termination without cause .
- CIC equity: Single-trigger full vesting of time-based RSUs and target vesting of performance RSUs upon change of control .
- Clawback: Incentive Compensation Recovery Policy implemented in 2023 compliant with SEC/NASDAQ rules .
- Pensions/Deferred comp: Ellis is not a participant in the Executive Retirement Plan; no NQDC contributions in 2024 .
Investment Implications
- Alignment: High variable pay, multi-year EBITDA PSU framework, and ownership guideline compliance support alignment; however, hedging permitted and no holding requirements dilute some alignment optics .
- Retention/overhang: Large unvested PSU/RSU stacks (2022–2024 grants) plus 2025 options/SARs create meaningful multi-year retention hooks but also future supply as tranches vest; single-trigger CIC equity could reduce stickiness in a sale .
- Performance signal: 200% PSU payout on 2021 grant and above-target 2024 STIP outcome indicate strong prior execution; watch three-year EBITDA trajectory through 2026 for LTIP realization and incremental insider liquidity .
- Cash severance risk: Cash severance is modest (1x salary + bonus), limiting windfall risk; main cost in a transition event would be accelerated equity, which is material ($6.28m at 12/31/24 prices) .