Kenny K. Cheung
SYSCOAbout Kenny K. Cheung
Executive Vice President and Chief Financial Officer of Sysco since April 2023; age 42 in FY2024; previously CFO of Hertz, with senior finance roles at Nielsen and GE; B.S. Finance (University of Maryland) and MBA (Washington University in St. Louis) . During his tenure, Sysco delivered revenue of $78.8B (+3.3% YoY) in FY2024 and $81.4B (+3.2% YoY) in FY2025, with operating income of $3.2B (+5.4%) in FY2024 and $3.1B in FY2025, adjusted operating income of $3.5B, and robust capital returns to shareholders ($2.2B FY2024; ~$2.3B FY2025) . Pay-versus-performance disclosure shows cumulative TSR of 151 in FY2024 and 164 in FY2025 (base=100), with operating income of $3.481B (FY2024) and $3.523B (FY2025) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Hertz Corporation | Executive Vice President, CFO | Sep 2020–Mar 2023 | Led global finance, drove successful restructuring and Chapter 11 emergence in 2021; re-IPO in Nov 2021 . |
| Hertz North America | CFO | Apr 2020–Sep 2020 | Oversaw regional finance during post-COVID recovery . |
| Hertz | SVP, Global FP&A | Dec 2018–Apr 2020 | Built FP&A discipline supporting performance management . |
| Nielsen Holdings PLC | Global Chief Audit Executive | 2017–2018 | Strengthened audit and controls, international experience . |
| Nielsen Holdings PLC | Regional COO / Regional CFO | 2012–2017 | Operational and financial leadership across regions . |
| General Electric | Finance roles (supply chain, operations, FP&A) | 2005–2007 | Early career operational finance grounding . |
External Roles
| Organization | Role | Years |
|---|---|---|
| — | — | — |
Fixed Compensation
| Metric | FY2024 | FY2025 |
|---|---|---|
| Base Salary ($) | 784,139 | 823,538 |
| Base Salary (policy table, annualized) | $788,000 | $830,000 |
| AIP Target (% of Base) | 100% | 125% (increase from 100%) |
| LTIP Target (% of Base) | 325% | 375% (increase from 325%) |
Notes:
- FY2024 AIP design: 70% financial (Operating Income 40%, Sales 30%), 20% Recipe for Growth SBOs, 10% Responsible Growth SBOs .
- FY2025 AIP design: 70% financial (Operating Income 50%, Sales 20%), 30% SBOs (Local Case Growth 10%, USBL Cost Per Piece 10%, Engagement Improvement 10%) .
Performance Compensation
Annual Incentive Plan (FY2025)
| Metric | Weight | Threshold | Target | Max | Actual | % of Target |
|---|---|---|---|---|---|---|
| Operating Income (Adjusted, $B) | 50% | 3.516 | 3.742 | 3.899 | 3.523 | 51.52% |
| Sales Revenue ($B) | 20% | 80.421 | 83.181 | 85.152 | 81.370 | 67.19% |
| Local Case Growth | 10% | 0.50% | 4.00% | 6.00% | 0.60% | 51.40% |
| USBL Cost Per Piece | 10% | 103% of Target | 100% | 97% of Target | 102% | 70.00% |
| Engagement Improvement | 10% | -1% | 1% | 3% | 2% | 150.00% |
- Individual performance modifier: 1.00 for all NEOs in FY2025 .
- Cheung FY2025 AIP payout: $683,000 .
Long-Term Incentive (FY2025 awards, granted Aug 21, 2024)
- Mix: 50% PSUs, 30% RSUs, 20% Stock Options .
- Cheung target LTIP award: 375% of base salary (increase from 325%) .
PSUs (3-year performance: FY2025–FY2027):
- Metrics: EPS (37.5%), ROIC (37.5%), Revenue (25%) .
- Payout curve: 50% at threshold, 100% at target, 200% at max; TSR modifier ±25% vs S&P 500, capped at 200% .
| Grant Component | Units/$ | Key Terms |
|---|---|---|
| PSUs (Target units) | 20,509 PSUs | 3-year cliff vest; TSR ±25% modifier |
| RSUs | 12,305 RSUs | Vest ratably over 3 years (Aug 21, 2025/2026/2027); cash dividend equivalents upon vest |
| Stock Options | 32,404 options @ $76.54 | 10-year term; vest ratably over 3 years starting Aug 21, 2025 |
FY2023 PSU results (for awards with FY2023–FY2025 performance period):
| Metric | Weight | Threshold | Target | Max | Result | Payout |
|---|---|---|---|---|---|---|
| Adjusted EPS (avg) | 50% | $4.19 | $4.46 | $4.87 | $4.26 | 48.69% |
| Market share growth (avg) | 50% | 1.10x | 1.40x | 1.60x | 1.45x | 110.00% |
| Relative TSR vs S&P 500 | modifier | 25th pct | 50–55th pct | 75th pct | 25.2 pct | -23.20% |
| Aggregate PSU payout | — | — | — | — | — | 56.14% |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 4,243 shares directly; 20,864 underlying options; total 25,107; <1% outstanding (as of Sep 16, 2024; shares outstanding 491,237,936) . |
| Outstanding equity (as of Jun 28, 2025) | PSUs (target) 20,936 units; RSUs 12,305; 2024 options 32,404 exercisable per schedule . |
| Vesting schedules | 2024 RSUs vest 1/3 on Aug 21, 2025/2026/2027; 2024 options vest 1/3 on same dates; 2024 PSUs vest after performance ends FY2027 . |
| Ownership guidelines | 4x base salary for EVPs; all NEOs exceeded or on track as of record date (Sep 17, 2025) . |
| Hedging/pledging | Prohibited for NEOs/directors/insiders per Trading Policy . |
| Trading | Transactions only via pre-approved Rule 10b5-1 plans; blackout windows enforced . |
Potential insider selling pressure: Near-term supply largely tied to scheduled RSU/option vesting (Aug 2025–2027) and PSU settlement after FY2027; trading plan and blackout restrictions mitigate opportunistic sales .
Employment Terms
| Term | Detail |
|---|---|
| Appointment & start | Named EVP & CFO on Mar 24, 2023; effective Apr 17, 2023 . |
| Initial comp terms | Base salary $765,000; FY2023 AIP target 100% (pro-rated); FY2024 LTI grant at 325% of salary . |
| Sign-on & make-whole | $600,000 cash sign-on; full FY2023 LTI (not pro-rated) at 325% of salary (50% PSUs, 30% options, 20% RSUs) to offset forfeited Hertz equity . |
| Protective covenants | Required as condition for equity awards (non-compete, non-solicit, confidentiality); forfeiture for violations . |
| Clawback | Dodd-Frank compliant clawback for erroneously awarded incentive pay upon restatement; broader policy for misconduct or material harm . |
| Severance (standard EVP agreements) | Non-CIC: 2x base salary; pro-rated AIP (based on actual performance); 18 months COBRA differential; outplacement up to 12 months . CIC (double trigger): 2x (base + target AIP); pro-rated AIP; COBRA differential for 18 months; outplacement; 280G best-net cutback applies . |
Quantified severance economics (assumes event on Jun 28, 2025):
| Scenario | Severance Payment ($) | PSU Payments ($) | Accel. RSU/Options ($) | Insurance ($) | Other ($) |
|---|---|---|---|---|---|
| Involuntary termination w/o cause or resignation for good reason | 1,660,000 | — | — | 24,786 | 68,939 |
| CIC termination w/o cause (double trigger) | 3,735,000 | 2,917,860 | 1,697,979 | 24,786 | 68,939 |
Multi-Year Compensation (Summary Compensation Table)
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Salary ($) | 159,288 | 784,139 | 823,538 |
| Bonus ($) | 600,000 (sign-on) | — | — |
| Stock Awards ($) | 1,686,062 | 2,012,590 | 2,511,584 |
| Option Awards ($) | 745,859 | 512,194 | 622,481 |
| Non-Equity Incentive ($) | 144,406 | 742,000 | 683,000 |
| All Other Compensation ($) | 33,760 | 254,080 | 88,637 |
| Total ($) | 3,369,375 | 4,305,003 | 4,729,240 |
All Other Compensation (FY2025 detail): 401(k) employer contribution $20,850; MSP employer contribution $64,153; perquisites $3,634 .
Compensation Structure Analysis
- Year-over-year shifts: AIP target increased from 100% to 125% and LTIP target from 325% to 375% of salary for FY2025, increasing at-risk pay weight and long-term equity exposure .
- Equity-heavy mix: FY2025 stock awards + options totaled ~$3.13M, with PSUs tied to EPS, ROIC, revenue, and relative TSR modifier, strengthening alignment with shareholder value creation .
- Pay-for-performance integrity: FY2025 AIP paid at 66.34% due to below-target operating income and mixed SBO results; PSUs incorporate rigorous financial targets with TSR overlay; clawback policies are robust .
- No shareholder-unfriendly features: No option repricing; no excise tax gross-ups; hedging/pledging prohibited; double-trigger CIC vesting only .
Equity Ownership & Alignment Risks
- Ownership scale is modest relative to total shares outstanding (<1%), but policy mandates 4x salary ownership for EVPs, with compliance/on-track status; extensive unvested PSUs/RSUs/options create retention incentives .
- Pledging and hedging explicitly prohibited; trades limited to pre-approved 10b5-1 plans, reducing misalignment risk .
Say-on-Pay & Shareholder Feedback
- Approval: 93.80% “FOR” in 2024; 93.37% “FOR” in 2023, indicating strong investor support for compensation practices .
- Peer benchmarking: CLD Committee uses a large-cap logistics/distribution/retail peer group; Semler Brossy advises; committee references peer medians but does not target specific percentiles per element .
Employment Contracts & Change-of-Control Economics
- Severance multiples: Non-CIC 2x salary; CIC 2x salary + target AIP; double trigger; COBRA differential; outplacement; 280G best-net cutback (Cheung’s indicative cutback $1,543,833 under CIC termination scenario methodology) .
- Protective covenants and clawbacks strengthen post-termination controls and recovery rights .
Investment Implications
- Alignment: Increased LTIP scale (375% of salary) and PSU design tied to EPS/ROIC/revenue plus TSR modifier enhance alignment with long-term value creation; ownership guidelines and hedging/pledging prohibitions reduce misalignment risk .
- Retention risk: Significant unvested equity across PSUs/RSUs/options with multi-year vesting schedules supports retention; severance economics are market-standard, with double-trigger CIC terms and clawbacks mitigating payout risk .
- Near-term selling pressure: Expected vesting cadence (Aug 2025–2027) and 10b5-1 plan constraints temper supply; monitor Form 4 filings to track execution against trading plans.
- Performance sensitivity: FY2025 AIP payout at 66.34% evidences pay-for-performance discipline amid below-target operating income; PSU outcomes remain leveraged to EPS/ROIC/revenue trajectories and relative TSR into FY2027 .