Kenneth D. Krause
ROLLINSAbout Kenneth D. Krause
Kenneth D. Krause, age 50, is Executive Vice President and Chief Financial Officer of Rollins, Inc., serving since September 2022; he also served as Treasurer until February 2025. He previously was SVP, CFO, Chief Strategy Officer and Treasurer at MSA Safety (2015–2022), following earlier finance roles there (2006–2015) and prior audit experience at KPMG; he holds a B.S. in Accounting (Slippery Rock University) and an MBA (University of Pittsburgh) and is a CPA (inactive, PA) . Company performance tied to his incentive plan in 2024 included 10.3% revenue growth vs a 9.5% target, and adjusted pre-tax profit of $643.3M at 97.5% of target, driving above-target payout on revenue and below-target payout on profit . Over 2022–2024, Rollins’ $100 TSR values were $171 (2022), $207 (2023), and $223 (2024), indicating positive shareholder returns across his tenure period .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| MSA Safety, Inc. | SVP, CFO, Chief Strategy Officer & Treasurer | 2015–2022 | Led finance, strategy, and treasury across global safety products, aligning capital allocation and growth . |
| MSA Safety, Inc. | Various finance leadership roles | 2006–2015 | Progressive leadership with increasing responsibility in finance . |
| KPMG | Senior Manager, Audit | Pre-2006 | Public-company audit, controls, and reporting expertise . |
External Roles
| Organization | Role | Years |
|---|---|---|
| Metro Atlanta Chamber | Board of Directors member | Current |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $212,885 | $702,000 | $730,000 |
| Perquisites & Other ($) | $465,624 | $228,470 | $33,819 |
| Perquisite Detail (2024) | — | — | Auto allowance $14,598; Executive physical $3,696; 401(k) match $15,525 |
Notes:
- 2022 includes sign-on cash bonus ($500,000) and make-whole cash bonus ($430,000) per offer letter .
- No executive pension or SERP; deferred compensation plan participation for Krause showed no 2024 activity .
Performance Compensation
Annual Cash Incentive (Executive Bonus Plan – 2024)
| Metric | Weighting | Target | Actual | Payout % | Payout $ |
|---|---|---|---|---|---|
| Revenue to Plan | 40% of salary | +9.5% YoY revenue growth | +10.3% YoY; 101% of plan | 105% of element | $306,600 (0.40 × $730,000 × 1.05), derived from disclosed inputs |
| Pre-Tax Profit to Plan | 60% of salary | Committee-adjusted target | $643.3M; 97.5% of plan | 85% of element | $372,300 (0.60 × $730,000 × 0.85), derived from disclosed inputs |
| Total Bonus Paid | — | — | — | — | $678,900 |
Plan mechanics:
- Threshold at 95% of target pays 75% of element; max at ≥105% pays 125% .
- Committee may adjust for acquisitions/disposals and unusual items .
Equity Awards (2018 Stock Incentive Plan – 2024 grants)
| Grant Type | Grant Date | Shares/Units | Vesting | Performance Metrics |
|---|---|---|---|---|
| RSAs | 2/20/2024 | 35,750 | Time-based; one-third per year starting 1st anniversary (fully vests 2/20/2027) | N/A |
| PSUs (target) | 2/20/2024 | 20,250 | Cliff vest 2/20/2027 (continuous service) | 3 components: 3-year Revenue CAGR; 3-year Aggregate Adjusted EBITDA Margin; 3-year Relative TSR vs S&P 500 |
PSU component targets (target-level shares):
- Revenue CAGR: 6,750 shares .
- Adjusted EBITDA Margin: 6,750 shares .
- TSR vs S&P 500: 6,750 shares .
Other program terms:
- No stock options outstanding; company does not currently grant options .
- Dividend equivalents accrue on PSUs at target and pay on vest; no voting rights pre-vest .
- Clawback policy adopted Oct 2, 2023 (SEC/NYSE-compliant) covering restatements and bonus recoupment provisions .
- Hedging and pledging of company stock prohibited for NEOs/directors .
Equity Ownership & Alignment
| Measure | Value |
|---|---|
| Beneficial Ownership (as of Feb 28, 2025) | 108,063 shares; includes 72,145 restricted shares |
| Ownership % of Outstanding | <1% (denoted “**”) |
| Unvested RSAs at 12/31/2024 | 35,750 (granted 2/20/2024; vests through 2/20/2027); 21,825 (granted 2/16/2023; vests through 2/16/2027); 24,396 (granted 9/1/2022; fully vested 1/1/2025) |
| Unvested PSUs at 12/31/2024 | 40,500 (2024 grant; scheduled vest 2/20/2027); 29,100 (2023 grant; scheduled vest 2/16/2026) |
| Stock Ownership Guidelines | Officers: 3× base salary; 5-year compliance window |
| Hedging/Pledging | Prohibited for directors/NEOs (policy) |
Notes:
- Market value illustrations for unvested awards in proxy use $46.35 closing price on 12/31/2024; Krause’s illustrated PSU max values: $1,877,175 (2024 grant); $1,348,785 (2023 grant) . Actual realized values depend on performance and share price at vest .
Employment Terms
| Term | Detail |
|---|---|
| Start Date & Role | CFO since September 2022; Treasurer role through February 2025 |
| Employment Agreement | No long-term employment contract disclosed; initial offer letter included sign-on/make-whole cash bonuses in 2022 |
| Change-in-Control Severance | CIC Agreements approved Feb 11, 2025; double-trigger (termination without cause or for good reason within 24 months post-CIC) |
| CIC Cash Multiple | 2× base salary + target bonus (lump sum) |
| Additional CIC Benefits | Pro-rated annual bonus; employer-paid health premiums for 18 months; PSUs vest based on assumed target performance |
| Restrictive Covenants | 2-year post-employment non-compete; 2-year non-solicitation of customers; 2-year non-recruitment; confidentiality; non-disparagement |
| Equity Treatment (non-CIC plan terms) | RSAs vest immediately on change-in-control; PSUs do not have CIC acceleration in award agreements (separate CIC Agreements govern PSU vest at target upon qualifying termination post-CIC) |
| Indemnification | Standard director/officer indemnification agreement |
Vesting Schedules and Overhang
| Award | Grant Date | Vesting Mechanics | Next Vest Dates |
|---|---|---|---|
| RSAs (2024 grant) | 2/20/2024 | 1/3 per year beginning 1st anniversary; fully vests 2/20/2027 | 2/20/2025, 2/20/2026, 2/20/2027 |
| RSAs (2023 grant) | 2/16/2023 | 1/4 per year beginning 1st anniversary; fully vests 2/16/2027 | 2/16/2025, 2/16/2026, 2/16/2027 |
| RSAs (2022 grant) | 9/1/2022 | Vested fully 1/1/2025 | Completed |
| PSUs (2024 grant) | 2/20/2024 | Cliff vest 2/20/2027 based on 2024–2026 performance and service | 2/20/2027 |
| PSUs (2023 grant) | 2/16/2023 | Cliff vest 2/16/2026 based on 2023–2025 performance and service | 2/16/2026 |
Implications:
- Annual RSA tranches and 2026/2027 PSU cliffs create periodic potential selling pressure around vest dates for tax withholding and diversification, subject to insider-window constraints and policy; pledging/hedging prohibited .
Governance, Peer Benchmarking, and Say‑on‑Pay
- Compensation governance: Independent Human Capital Management & Compensation Committee with Mercer as independent consultant; 2024 consultant fees $223,000 .
- 2024 peer group (16 companies) centered on environmental/facilities services and adjacent sectors for pay benchmarking; revenue-size screens applied .
- Say‑on‑pay: strong approval in April 2023; triennial frequency adopted .
Investment Implications
- Pay-for-performance alignment: 2024 annual bonus tied to revenue growth and pre-tax profit with symmetric thresholds and caps; actual payout matched disclosed plan math (revenue element overachieved; profit element underachieved), indicating disciplined linkage to financial delivery .
- Long-term equity mix favors RSAs and multi-factor PSUs (Revenue CAGR, Adjusted EBITDA Margin, Relative TSR), reinforcing growth, profitability, and shareholder return; no stock options, reducing overhang and risk of repricing .
- Retention and change-in-control: Double-trigger CIC at 2× salary+target bonus plus target-level PSU vest provides continuity incentives while avoiding single-trigger windfalls; robust 2-year non-compete/non-solicit guards against talent leakage .
- Ownership alignment: Beneficial ownership of 108,063 shares (including restricted shares) with formal 3× salary ownership guidelines and anti-hedging/anti-pledging policy; guidelines allow 5 years to comply—monitor progress to gauge alignment depth .
- Trading signals: Material vesting events in 2026 (PSUs) and annually for RSAs may coincide with liquidity needs; watch Form 4 filings around vest dates and blackout windows for potential supply. Positive TSR trend across 2022–2024 underscores aligned value creation during tenure .