Ken Knott
SM EnergyAbout Ken Knott
Kenneth J. Knott is Senior Vice President – Business Development and Land at SM Energy; age 60 as of March 24, 2025, and in his current role since August 2014 after joining SM in November 2000 . His scope spans business development and land functions, with compensation outcomes tied to company performance metrics including multi-year absolute and relative TSR, adjusted free cash flow, and sustainability measures under SM’s LTIP; the 2021–2024 performance period paid at 1.69x driven by 28% annualized TSR, strong FCF, and deleveraging . Annual STIP results were 1.65x in 2023 and 1.31x in 2024, reflecting cash flow, proved developed reserve additions, cost efficiency, and production goals, with TSR modifiers applied per plan design .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| SM Energy | Senior Vice President – Business Development & Land | Aug 2014–present | — |
| SM Energy | Vice President – Land and Assistant Secretary | Oct 2012–Aug 2014 | — |
| SM Energy | Vice President – Business Development & Land and Assistant Secretary | Aug 2008–Oct 2012 | — |
| SM Energy | Senior Landman (Gulf Coast) / Gulf Coast Regional Land Manager | Nov 2000–Mar 2004 (office move noted Mar 2004) | — |
External Roles
No external roles disclosed for Mr. Knott .
Fixed Compensation
Salary paid and STIP outcomes (actual cash bonus), by year:
| Metric | 2023 | 2024 |
|---|---|---|
| Salary Paid ($) | $378,499 | $396,996 |
| STIP Target (% of salary) | 75% | 75% |
| STIP Multiplier | 1.65x | 1.31x |
| STIP Paid ($) | $468,300 | $390,048 |
Base salary rate (set annually):
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary Rate ($) | $384,356 | $401,652 |
Deferred compensation participation (2024):
| Metric | Executive Contributions (2024) | Company Match (2024) | Aggregate Earnings (2024) | Aggregate Balance (12/31/2024) |
|---|---|---|---|---|
| Non-Qualified Deferred Compensation Plan ($) | $70,650 | $51,918 | $138,500 | $1,422,368 |
2024 Summary Compensation Table components (context):
- Non‑Equity Incentive Plan Compensation: $875,923 comprised of $390,048 STIP and $485,875 performance‑based cash award (granted 2021, settled 2024) .
- Stock Awards (grant-date fair value): $800,019 in 2024 .
Performance Compensation
2024 grants and structure:
| Award Type | Grant Date | Shares/Units | Grant-Date Fair Value ($) | Vesting / Performance |
|---|---|---|---|---|
| RSU | Jul 1, 2024 | 9,162 | $400,013 | Vests 1/3 on Jul 1, 2025, 1/3 on Jul 1, 2026, 1/3 on Jul 1, 2027 |
| PSU | Oct 1, 2024 | Threshold 2,339; Target 9,355; Max 18,710 | $400,006 | 3-year performance (10/1/2024–6/30/2027); vests Jul 1, 2027; metrics: adjusted FCF (25%), absolute TSR (25%), relative TSR (25%), sustainability (25%) |
Outstanding equity awards at 12/31/2024 (Knott):
| Award | Not Vested/Unearned Units | Market/Payout Value ($) | Key Vesting Dates |
|---|---|---|---|
| RSUs (granted 7/1/2022) | 3,179 | $123,218 | 1/3 on Jul 1, 2025 |
| RSUs (granted 7/1/2023) | 7,904 | $306,359 | 1/3 on Jul 1, 2025; 1/3 on Jul 1, 2026 |
| RSUs (granted 7/1/2024) | 9,162 | $355,119 | 1/3 on Jul 1, 2025; 1/3 on Jul 1, 2026; 1/3 on Jul 1, 2027 |
| PSUs (granted 7/1/2022) | 12,185 | $472,291 | Vests Jul 1, 2025 (3‑year period ending 6/30/2025) |
| PSUs (granted 7/1/2023) | 12,530 | $485,663 | Vests Jul 1, 2026 (3‑year period ending 6/30/2026) |
| PSUs (granted 10/1/2024) | 9,355 | $362,600 | Vests Jul 1, 2027 (3‑year period ending 6/30/2027) |
LTIP performance outcomes (context):
- 2021–2024 performance awards paid at 1.69x driven by FCF ($1.99B, capped), net debt/EBITDAX (0.60x, capped), sustainability (0.76x), absolute TSR (+28%, capped) .
STIP design and 2024 results (context):
- 2024 STIP quantitative multiplier 1.21x; qualitative inventory modifier +0.10 (to 1.31x); TSR modifier 0.0 (absolute TSR +2%) .
Equity Ownership & Alignment
Ownership and unvested equity:
| Metric | As of Date | Value |
|---|---|---|
| Beneficially Owned Shares | Mar 24, 2025 | 123,343 shares; <1% of outstanding |
| RSUs Outstanding (Total) | Mar 24, 2025 | 20,245 units |
| PSUs Outstanding (Total) | Mar 24, 2025 | 34,070 units |
Alignment policies and restrictions:
- Stock ownership guidelines: Senior Vice Presidents must hold stock equal to 1x annual base salary; unvested RSUs count, unvested PSUs excluded; sales restricted until compliance and require approvals .
- Securities policy prohibits hedging, holding shares in margin accounts, pledging, options/derivatives, short selling; trading generally requires pre‑clearance (Rule 10b5‑1 plans permitted) .
- Section 16(a) filings were timely in 2024 .
Upcoming vesting events (potential supply overhang):
- RSUs and PSUs scheduled vesting dates for Knott: RSUs on Jul 1, 2025/2026/2027 per grant cohorts; PSUs settle at end of performance periods with vest on Jul 1, 2025/2026/2027 and shares delivered based on actual performance (0–200%) .
Employment Terms
Change-of-control and severance mechanics:
- Double-trigger required (CoC + qualifying termination within ~30 months); upon CoC termination: RSUs lapse; PSUs deemed achieved at target and immediately payable; options/SARs become exercisable; Committee discretion on alternate awards/cash settlement; no single-trigger acceleration .
- No excise tax gross-ups; severance may be reduced to optimize after-tax if 280G excise tax would apply .
Potential payments upon termination (estimated at 12/31/2024):
| Scenario | Base Salary ($) | Cash Bonus ($) | Accelerated Vesting ($) | Continued Benefits ($) | Total ($) |
|---|---|---|---|---|---|
| Change of Control – No Termination | — | — | — | — | — |
| Change of Control Termination | 1,004,130 | 1,054,337 | 1,884,702 | 58,027 | 4,001,196 |
| Death or Disability | — | — | 1,884,702 | — | 1,884,702 |
| Voluntary Termination/Retirement | — | — | — | — | — |
Clawback and other provisions:
- SEC/NYSE-compliant clawback applies to incentive compensation upon material financial restatement; repayment regardless of fault for prior three fiscal years .
- Awards nontransferable; Committee may impose additional restrictions/forfeiture conditions (e.g., non-compete, confidentiality) per plan .
Performance Compensation (Metrics Detail)
| Metric | Weighting | Targeting/Notes | Performance Period |
|---|---|---|---|
| Adjusted Free Cash Flow (FCF) | 25% | Multi-year FCF generation; payout capped at max if performance exceeds cap | 10/1/2024–6/30/2027 (2024 PSU cohort) |
| Absolute TSR | 25% | Negative absolute TSR caps performance-based equity at target | 10/1/2024–6/30/2027 |
| Relative TSR | 25% | Above median required for target payout | 10/1/2024–6/30/2027 |
| Sustainability (GHG intensity, Safety, Spills) | 25% total; 10%+10%+5% | AXPC-based top-quartile goals (safety/spills); multi-year GHG intensity reduction | GHG: 1/1/2024–12/31/2026; Safety/Spills: 7/1/2024–6/30/2027 |
Investment Implications
- Alignment is strong: no hedging/pledging allowed; equity ownership guidelines require meaningful stockholding; double‑trigger CoC with target‑level PSU payout mitigates windfall risk .
- Vesting calendar implies potential supply windows: sizable RSU tranches and PSU settlements on Jul 1, 2025/2026/2027; monitor trading pre‑clearance windows around those dates for possible liquidity effects, though policy constraints reduce immediate selling pressure .
- Pay-for-performance features: STIP and LTIP emphasize FCF, TSR, deleveraging, and sustainability; recent outcomes (2023–2024) show robust payouts driven by strong operational/financial metrics, supportive of executive retention and incentive alignment .
- Severance economics for Knott are moderate relative to CEO/EVP levels; CoC benefits dominated by accelerated equity at target, reinforcing long-term equity as primary value lever .