Kristian Talvitie
PTCAbout Kristian Talvitie
Executive Vice President and Chief Financial Officer of PTC since May 2019; age 53 as disclosed in the 2024 proxy. Prior PTC roles include Corporate Vice President, Finance, and SVP, FP&A and Investor Relations; prior CFO roles at Sovos Compliance and Syncsort. Under his finance leadership in FY2024, PTC achieved ARR growth of 14% to $2.255B, total revenue growth of 10% to $2.299B, operating income up 28%, and free cash flow up 25% to $736M. Long‑term incentives are tied to adjusted free cash flow growth (AFCF) and relative TSR, with FY2024 results earning 85% for AFCF and 142% for rTSR (three‑year) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| PTC Inc. | EVP & CFO | May 2019–Present | Principal financial officer; oversees capital allocation and investor communications . |
| PTC Inc. | Corporate VP, Finance | Jul 2013–Jul 2016 | Led finance operations . |
| PTC Inc. | SVP, FP&A and Investor Relations | Nov 2010–Jul 2013 | Built FP&A and IR capabilities . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Syncsort Incorporated | Chief Financial Officer | Oct 2018–May 2019 | Private software CFO experience . |
| Sovos Compliance, LLC | Chief Financial Officer | Jul 2016–Oct 2018 | Private SaaS CFO; tax compliance software . |
Fixed Compensation
| Metric ($) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary | 519,231 | 515,000 | 575,000 |
| Target Annual Bonus (set by Committee) | — | 515,000 | 575,000 |
| Non‑Equity Incentive Paid | 645,529 | 695,250 | 776,250 |
| Stock Awards (Grant‑Date Fair Value) | 3,363,922 | 5,214,356 | 6,349,268 |
| All Other Compensation | 10,708 | 11,400 | 11,919 |
| Total Compensation | 4,539,389 | 6,436,006 | 7,712,437 |
Performance Compensation
| Component | Metric | Target / Scale | FY2024 Actual | Payout | Vesting Design |
|---|---|---|---|---|---|
| Operating Performance RSUs | Adjusted Free Cash Flow growth (YoY) | Threshold 10%, Target 25%, Upside 40% | 22% | 85% of target earned | Annual measurement; 3 equal annual vesting; up to 200% earn‑out . |
| Relative TSR RSUs | 3‑Year rTSR vs S&P 500 Software & Services + peers | Threshold 25th, Target 50th, 75th/90th for upside | 71st percentile | 142% of target earned; capped at 100% if 3‑year stock price declines | Single 3‑year period; up to 200% earn‑out with price‑decline cap . |
2024 annual grants (11/15/2023): service RSUs and two PSU tranches; target and maximum amounts shown below.
| Grant Type | Grant Date | Target (#) | Max (#) | Grant‑Date Fair Value ($) |
|---|---|---|---|---|
| Operating Performance RSUs | 11/15/2023 | 8,081 | 16,162 | 2,159,108 |
| rTSR Performance RSUs | 11/15/2023 | 8,081 | 16,162 | 1,690,222 |
| Service‑Based RSUs | 11/15/2023 | 16,162 | — | 2,499,938 |
Notes: Maximum potential for PSUs is 200% of target; service RSUs vest in three equal annual tranches .
Equity Ownership & Alignment
- Beneficial ownership: 67,440 shares as of November 30, 2024; <1% of outstanding .
- 2024 vesting realized: 31,414 shares; $4,859,118 value .
- Stock ownership guidelines and compliance: executives must hold 3x salary; PTC states all executives meet requirements. Hedging and pledging are prohibited; pre‑clearance required for trades .
Outstanding equity awards (FY2024 year‑end):
| Category | Units (#) | Market/Payout Value ($) | Vesting Reference |
|---|---|---|---|
| Service RSUs (FY21 tranche) | 4,527 | 817,848 | (4) |
| Service RSUs (FY22 remaining) | 10,269 | 1,855,198 | (5) |
| Service RSUs (FY23 remaining) | 16,162 | 2,919,827 | (6) |
| Performance RSUs (FY21 cohort) | 2,263 | 408,834 | (7) |
| Performance RSUs (FY21 cohort) | 6,791 | 1,226,862 | (8) |
| Performance RSUs (FY22 cohort) | 5,134 | 927,508 | (9) |
| Performance RSUs (FY22 cohort) | 7,702 | 1,391,443 | (10) |
| Performance RSUs (FY22 cohort) | 8,081 | 1,459,913 | (11) |
| Performance RSUs (FY23 cohort) | 8,081 | 1,459,913 | (12) |
Insider selling program: Adopted Rule 10b5‑1 plan on Aug 2, 2024 to sell “15,050 plus” net shares from FY2024 CIP and November 15, 2024 PSU vestings; plan ends February 2, 2025 .
Employment Terms
Structural terms per Executive Agreement (Kristian Talvitie):
- Termination without cause: 1x base salary; 1x target bonus; acceleration of equity scheduled to vest within 1 year (performance equity at target); 1 year benefits continuation; paid upon event; no tax gross‑up .
- Change in Control (no termination): pro‑rated target bonus only .
- Double‑trigger (termination without cause or good reason within 2 years post‑CIC): 1x base; 1x target bonus; 100% accelerated equity; 1 year benefits continuation; paid upon event; no gross‑up .
Estimated values as of September 30, 2024:
| Scenario | Base ($) | Target Bonus ($) | Pro‑Rated Bonus ($) | Accelerated Equity ($) | Benefits ($) | Total ($) |
|---|---|---|---|---|---|---|
| Termination without Cause | 575,000 | 575,000 | — | 5,304,900 | 20,119 | 6,475,019 |
| Termination for Cause/Voluntary Resignation | — | — | — | — | — | 0 |
| Change in Control (no termination) | — | — | 575,000 | — | — | 575,000 |
| Double‑Trigger (within 2 years of CIC) | 575,000 | 575,000 | — | 14,618,898 | 20,119 | 15,789,017 |
| Disability or Death | — | — | — | 12,467,347 | — | 12,467,347 |
Other provisions:
- Clawback: Executive Compensation Recoupment Policy compliant with SEC/Nasdaq; enables recovery of performance‑based pay upon restatement or correction of prior period measures .
- Perquisites in 2024: 401(k) match $10,350; HSA match $1,154; taxable prize income $69 .
- No excise tax gross‑ups .
Compensation Structure Analysis
- 2024 increases: Committee raised base and target bonus by 12% and long‑term RSUs by 25% for Talvitie, targeting ~50th percentile of peer group .
- Mix of long‑term equity: approximately 50/50 service‑based vs performance‑based RSUs; PSUs have up to 200% upside and rTSR cap if stock price declines over the period .
- Peer group benchmarking: 17 U.S. software companies (Akamai, ANSYS, Autodesk, Cadence, ServiceNow, Splunk, Tyler, etc.) used for 2024 analysis; peer selection criteria include revenue and market cap ranges and product similarity .
- Say‑on‑pay support: 92% approval in 2024, reflecting shareholder endorsement of pay design .
Risk Indicators & Red Flags
- Trading/pledging risk: Hedging and pledging of PTC stock prohibited; executive trades require pre‑clearance .
- Insider selling pressure: Active 10b5‑1 plan covering sales of net vested shares through February 2, 2025, which can create supply near vest dates .
- Legal/SEC matters: Company disclosed no legal proceedings in FY2024 10‑K; compensation programs assessed for risk and deemed not likely to have a material adverse effect .
Equity Ownership & Alignment Guidance
- Ownership guidelines: 3x salary for executive officers; PTC states all executives meet their requirements .
- Alignment: Heavy use of performance‑based RSUs tied to AFCF and rTSR aligns incentives with cash generation and shareholder returns .
Say‑on‑Pay & Shareholder Feedback
- Advisory vote held annually; 2024 say‑on‑pay support 92% informs Committee’s design decisions .
Investment Implications
- Alignment: Significant performance equity (AFCF and rTSR) with up to 200% upside and rTSR cap incentivizes durable cash flow growth and competitive TSR, supporting long‑term value creation .
- Selling dynamics: The Aug 2024 10b5‑1 plan scheduling sales of net vested shares through Feb 2025 may add near‑term selling pressure around vesting and bonus share issuance dates; monitor Form 4s and vesting calendars .
- Retention/transition risk: Severance provides 1x salary+bonus and one‑year equity acceleration without cause; double‑trigger CIC yields full acceleration—reasonable market terms that balance retention with shareholder protection (no gross‑ups) .
- Governance quality: Strong policies (clawback, no hedging/pledging, ownership requirements) and 92% say‑on‑pay support reduce governance and alignment risk for the CFO’s compensation .