Vincent Kelly
About Vincent Kelly
Vincent D. Kelly (age 65) has served as SPOK’s President, CEO, and director since the company’s 2004 formation via the Metrocall–Arch Wireless merger; he previously held COO, CFO, EVP, Treasurer, and director roles at Metrocall and holds a BS in accounting from George Mason University . Pay-for-performance metrics center on adjusted EBITDA, wireless revenue retention, and Spok Care Connect (CCS) bookings; 2024 results delivered adjusted EBITDA of $29.173M against target $27.594M (121.4% payout on that metric) and CCS bookings of $34.083M (130% payout on that metric) . Over 2020–2024, SPOK’s cumulative TSR outperformed its peer index (value of $100 investment: Company $204 vs. S&P Composite 1500 Health Care Technology Index $92), with 2024 net income of $14.965M and adjusted EBITDA of $29.173M .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Spok Holdings, Inc. (formed from Metrocall + Arch) | President & CEO; Director | 2004–present | CEO during transition from declining wireless to healthcare communications model; >35 years in wireless/telecom and >10 years in software |
| Metrocall Holdings, Inc. | President & CEO; previously COO, CFO, EVP; Treasurer; Director | CEO from Feb 2003; Treasurer 1995–2003; Director 1990–96 and 2003–04 | Led Metrocall into merger creating Spok; broad finance/ops leadership prior to CEO |
External Roles
| Organization | Role | Years |
|---|---|---|
| Tellabs | Director | 2012–2013 |
| Penton Media | Director | 2003–2007 |
Fixed Compensation
Multi-year compensation (Summary Compensation Table):
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $600,000 | $500,000 | $500,000 |
| Stock Awards (Grant-date FV) | $999,992 | $799,999 | $999,993 |
| Non-Equity Incentive (STIP paid) | $539,000 | $567,600 | $472,800 |
| All Other Compensation | $102,970 | $504,262 | $269,079 |
| Total Compensation | $2,241,962 | $2,371,861 | $2,241,872 |
Additional 2024 fixed pay terms per employment agreement (effective 2024–2026): base salary $500,000; target annual cash bonus $400,000; target annual LTIP grant value $1,000,000 .
Performance Compensation
Short-term incentive plan (STIP) design and 2024 outcomes:
- Structure: 100% performance-based; metrics and weights: Adjusted EBITDA (50%), Wireless Revenue (25%), CCS Operations Bookings (25%) .
- Interpolation between threshold/target/maximum; no payout below threshold .
| Metric | Weight | Threshold (000s) | Target (000s) | Maximum (000s) | Actual (000s) | Payout vs Target | Weighted Payout |
|---|---|---|---|---|---|---|---|
| Adjusted EBITDA | 50% | $22,075 | $27,594 | $35,872 | $29,173 | 121.4% | 60.7% |
| Wireless Revenue | 25% | $58,961 | $73,701 | $95,811 | $73,523 | 99.8% | 25.0% |
| CCS Operations Bookings | 25% | $24,400 | $30,500 | $39,650 | $34,083 | 130.0% | 32.5% |
| Total | 100% | 118.2% |
CEO STIP specifics:
- Target opportunity: 80% of base salary = $400,000; actual paid: $472,800 (118.2% of target) .
Long-term incentive plan (LTIP) – 2024 grants and vesting:
- Mix: 50% time-based RSUs; 50% performance-based RSUs (PBRSUs) tied to 2024–2026 cumulative adjusted EBITDA; straight-line interpolation; payout in March 2027 post-10-K; DERs accrue and pay in cash upon vest .
- No stock options; company has not granted options since inception .
| 2024 LTIP Grant (CEO) | RSUs (#) | Grant-date FV ($) | Vesting |
|---|---|---|---|
| Time-based RSUs | 32,299 | $499,989 | 1/3 on 12/31/2024, 12/31/2025, 12/31/2026 (service-based) |
| Performance-based RSUs | 32,300 | $500,004 | Cliff 12/31/2026 if adjusted EBITDA goals met; paid Mar 2027 |
Recent LTIP vesting (paid after 2024 10-K):
| 2024 Vesting | Shares | Value at vest ($) |
|---|---|---|
| Time-based shares vested (CEO) | 46,314 | $743,340 (at $16.05) |
| Performance-based shares vested (CEO; 2022–2024 cycle at 130% of target) | 75,144 | $1,206,061 (at $16.05) |
| 2022–2024 Cumulative Adjusted EBITDA (for PBRSU) | $74,479K vs $58,036K target; 130% payout |
Equity Ownership & Alignment
- Beneficial ownership (as of Apr 3, 2025): 187,817 shares (held via Vincent DePaul Kelly Revocable Trust); <1% of outstanding; sole voting/dispositive power . Shares outstanding April 1, 2025: 20,572,296 .
- Ownership guidelines: CEO required ≥3x salary; as of Apr 1, 2025 he held >12x salary in company stock and RSUs; all executives exceed guidelines; hedging and pledging prohibited .
- Overhang and plan capacity (12/31/2024): 928,522 RSUs/DSUs outstanding; 962,044 shares remain available under 2020 Equity Incentive Plan .
- 2024 DER cash accrued to CEO: $256,194 .
Vested vs unvested (CEO; at 12/31/2024):
| Category | Unvested RSUs (#) | Reference | Market value at $16.05 |
|---|---|---|---|
| Time-based RSUs (2024 grant) | 21,533 | Time-based tranche remaining; vests 12/31/2025 & 12/31/2026 | $345,605 |
| Time-based RSUs (2023 grant) | 16,280 | Vest 12/31/2025 | $261,294 |
| PBRSUs (2024–2026 target) | 32,300 | Cliff 12/31/2026, subject to performance | $518,415 |
| PBRSUs (2023–2025 target) | 48,840 | Vests 12/31/2025, subject to performance | $783,882 |
Upcoming vesting/supply considerations:
- Time-based: remaining 2024 grant (21,533) splits over 12/31/2025 and 12/31/2026; 2023 grant (16,280) vests on 12/31/2025 .
- Performance-based: 2023 PBRSUs (48,840 target) eligible 12/31/2025; 2024 PBRSUs (32,300 target) eligible 12/31/2026; vest only if adjusted EBITDA goals achieved .
Policies impacting alignment and selling pressure:
- Hedging/pledging prohibited; robust clawback aligned with SEC/NASDAQ restatement rules (3-year lookback) .
- No options granted; equity is RSU-based, which can reduce leverage-driven risk-taking .
Employment Terms
Key CEO employment agreement terms (extended to Dec 31, 2026):
- Base salary $500,000; target annual bonus $400,000; target annual LTIP value $1,000,000 .
- Non-compete/non-solicit: 2 years post-termination covering wireless and software businesses .
- No excise tax gross-up .
Severance economics (CEO):
- Termination without cause or for good reason (no CIC): 2x base salary (lump sum); 1x target annual bonus; prorated current-year target bonus; 24 months COBRA reimbursement; up to $35,000 outplacement; full vesting of unvested time-based equity; service condition waived on PBRSUs (payable if and when performance met) .
- If within 1 year post-change-in-control: bonus multiple increases to 2x target (in place of 1x) .
- Illustrative payout values at 12/31/2024 (stock $16.05): Disability $4.89M; Death $5.27M; Termination without cause/for good reason $6.88M (includes equity components and STIP as detailed in proxy) .
NEO policies (context):
- Other NEOs have severance/change-in-control agreements with 1.5x–2.0x base salary cash, 100% target STIP, health benefits, and specified accelerated vesting schedules upon CIC; equity acceleration schedules for NEOs differ from CEO .
Clawback/insider policies:
- Clawback expanded in 2023 to cover restatement scenarios under SEC/NASDAQ rules .
- Prohibitions on hedging/pledging; insider trading policies in place .
Board Governance
- Role: CEO and director since 2004; not independent; no additional director compensation as a company employee .
- Board leadership: Independent Chair (Christine Cournoyer); Chair and CEO roles separated since 2004 inception .
- Committees: Audit, Compensation, Nominating & Governance—each solely independent directors; chairs: Audit (Todd Stein), Compensation (Randy Hyun), N&G (Christine Cournoyer) .
- 2024 board operations: 5 meetings; 100% attendance by all directors at board and committee meetings; executive session at every board meeting; all directors attended 2024 annual meeting .
- Independence determination: all directors independent except Mr. Kelly .
Director compensation (context):
- Non-executive directors receive $45,000 cash retainer (+ committee retainers), $100,000 annual restricted stock; Mr. Kelly receives no incremental pay for board service .
Performance & Track Record
Pay versus performance and financial trajectory:
| Measure | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Value of $100 Investment – Company TSR | $96 | $84 | $87 | $182 | $204 |
| Value of $100 Investment – Peer Group TSR | $115 | $135 | $115 | $84 | $92 |
| Net Income (USD) | $(44,225,000) | $(22,180,000) | $21,856,000 | $15,666,000 | $14,965,000 |
| Adjusted EBITDA (USD) | $6,346,000 | $(4,892,000) | $14,965,000 | $30,342,000 | $29,173,000 |
- Five-year cumulative TSR above peer index; executive compensation actually paid (CAP) directionally aligned with TSR; equity-heavy LTIP strengthens alignment .
- Capital return context: $96.8M returned to shareholders via dividends and buybacks during 2020–2024 .
Say-on-Pay & Peer Benchmarking
- Say-on-Pay approval: 92% support at 2024 annual meeting for the 2023 NEO program .
- Stockholder outreach covered ~70% of outstanding shares during 2024; ongoing engagement via quarterly reviews, roadshows, and conferences .
- Peer group reviewed with AON in 2024 to reflect software emphasis; compensation levels found below median of peer groups; no material design changes for 2024 .
Compensation Structure Analysis
- Cash vs. equity: Significant portion at-risk; 2024 STIP 100% performance-based; 2024 LTIP 50% PBRSUs/50% time-based RSUs .
- Metrics: Shift toward profitability and growth balance—Adjusted EBITDA, wireless revenue retention, and CCS bookings connecting to long-term value creation .
- Equity instruments: RSUs only; company does not grant options (reduces leverage and repricing risk) .
- Policies: Clawback aligned to restatement triggers; no excise tax gross-ups; hedging/pledging prohibited .
Risk Indicators & Red Flags
- No options or repricing; no hedging/pledging; clawback in force; no gross-ups—supportive of shareholder-friendly governance .
- Related party oversight: processes defined; noted customer relationship with a director’s employer reviewed (not involving Mr. Kelly) .
- Board independence and structure mitigate CEO dual-role concerns: independent Chair; independent committees; regular executive sessions .
- Insider trading controls and blackout policies referenced via insider trading statements .
Equity Ownership & Alignment (Supplemental Director/Officer Snapshot)
| Holder | Beneficial Shares | % of Class |
|---|---|---|
| Vincent D. Kelly | 187,817 | <1% |
| All directors/officers (9) | 1,938,430 | 7.37% |
Employment Terms (Severance and CIC – Detail Summary)
- Without cause/for good reason: 2x salary; 1x target bonus; pro-rata target bonus; 24 months COBRA; outplacement up to $35k; full time-based equity vesting; PBRSUs vest if/when performance met .
- Within 1 year post-CIC: bonus multiple increases to 2x target; other terms as above; no excise tax gross-up .
Investment Implications
- Alignment: High equity alignment—CEO exceeds ownership guidelines by >12x salary; 50% of LTIP performance-based; metrics (Adj. EBITDA, CCS bookings) link to profitability and growth; clawback and no hedging/pledging reduce misalignment risk .
- Retention risk: Low near-term—contract through 2026 with competitive at-risk mix; 2-year non-compete/solicit; severance/CIC protections reduce flight risk but create modest parachute expense in downside scenarios .
- Selling pressure: 2025–2026 will see sizeable vesting events (time-based tranches plus 2023 PBRSUs in 2025; 2024 PBRSUs in 2026, subject to performance), which can create periodic liquidity windows; hedging/pledging bans, insider policies, and DER cash accruals moderate risk of forced sales .
- Governance quality: Independent Chair, fully independent committees, regular executive sessions, and strong Say-on-Pay support (92%) point to balanced oversight of CEO dual role and continued focus on pay-for-performance .
- Performance momentum signals: 2024 STIP paid at 118.2% on outperformance in adjusted EBITDA and CCS bookings; 2022–2024 LTIP paid at 130% on cumulative adjusted EBITDA, supporting positive execution against internal financial targets .