Kenneth Gunderman
About Kenneth Gunderman
Kenneth A. Gunderman is President and CEO of Uniti Group Inc. and has served as a director since 2015; he became CEO on March 2, 2015 and is age 54 . He holds an MBA from Yale and a BA from Hendrix College, with prior roles in investment banking at Stephens Inc. (co-head) and Lehman Brothers, and earlier work as a CPA at KPMG . 2024 pay-versus-performance disclosure shows Company TSR at 100 vs Peer Group TSR at 123, Net Income of $93.4 million and Adjusted EBITDA of $940.1 million, framing recent performance context . 2024 say‑on‑pay passed with approximately 93% support, and the board maintains independent leadership with an independent chairman; Gunderman is the sole management director nominee and not independent under Nasdaq rules .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Stephens Inc. | Co-Head of Investment Banking | Not disclosed | Led strategic direction; advised notable transactions |
| Lehman Brothers | Telecom Investment Banking | Not disclosed | Advised on transactions/financings totaling >$125B |
| KPMG | Certified Public Accountant | Not disclosed | Financial and accounting foundation |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| America’s Car‑Mart, Inc. | Director | Jul 2014 – Aug 2017 | Governance experience at public company |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $725,000 | $725,000 | $725,000 |
| Target Bonus % of Salary | 150% (plan design) | 150% (plan design) | 150% (plan design) |
| Target Bonus ($) | $1,087,500 | $1,087,500 | $1,087,500 |
| Actual Bonus Paid ($) | $1,305,000 | $1,007,750 | $2,109,750 |
| All Other Compensation ($) | $14,135 | $14,442 | $15,042 |
| Deferred Compensation: Executive Contributions ($) | — | — | $72,500 |
| Deferred Compensation: Aggregated Earnings ($) | — | — | $33,406 |
| Deferred Compensation: Aggregate Balance at FY End ($) | — | — | $769,912 |
Performance Compensation
2024 Short‑Term Incentive Plan (STIP) – Metrics and Outcome
| Metric | Weighting (CEO) | Threshold | Target | Maximum | Actual | Payout impact |
|---|---|---|---|---|---|---|
| Consolidated AFFO | 50% | $368.0M | $374.0M | $379.0M | $379.0M | Max achieved; supports 194% of target payout |
| Consolidated Bookings | 15% | $3.0M | $3.6M | $4.0M | $3.3M | Above threshold |
| On‑Time Delivery | 15% | 65.0% | 75.0% | 85.0% | 91.0% | Max achieved |
| Gross Margin | 20% | 60.0% | 62.9% | 65.0% | 62.9% | Target achieved |
| CEO STIP Payout (% of Target) | — | — | — | — | — | 194% of target; $2,109,750 |
2024 Long‑Term Incentive Grants (Annual)
| Component | Number/Value | Vesting | Grant Date Fair Value ($) |
|---|---|---|---|
| Time‑based Restricted Shares | 260,917 shares | 1/3 each on Feb 21, 2025/2026/2027 | $1,471,572 |
| Performance‑based RSUs (PBRSUs) | 260,917 target; 0–200% payout | TSR vs Peer Group over 3 years ending Feb 21, 2027 | $2,191,703 (probable); $2,943,144 (max) |
| Annual Award Total (reported in SCT) | — | — | $3,663,275 |
Special Merger Grants (approved May 16, 2024; contingent on Windstream closing)
| Component | Threshold | Target | Maximum | Vesting Terms |
|---|---|---|---|---|
| Merger PBRSUs | 218,621 sh | 437,243 sh | 874,486 sh | 0–200% based on TSR vs combined‑company peer group over 3 years post‑close |
| Merger RSAs | — | 1,311,728 sh | — | 20%/30%/50% on 1st/2nd/3rd anniversaries of merger closing |
| Merger RSAs Fair Value | — | — | — | $4,761,573 (grant date fair value) |
| CIC Treatment | — | — | — | TSR deemed achieved at maximum; service‑vesting continues; Qualifying Termination within one year → full vesting |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 3,098,835 shares; 1.26% of 245,454,337 shares outstanding (as of Mar 21, 2025) |
| Shares Counted Under Ownership Guidelines | 1,260,265 shares vs guideline amount 1,111,963; meets CEO guideline (5x base salary) |
| Unvested Time‑based Restricted Shares (12/31/2024) | 1,759,104 shares; market value $9,675,072 (at $5.50) |
| PBRSUs Outstanding (status at 12/31/2024) | 58,292 (2022 cycle, threshold) ; 221,397 (2023 target) ; 260,917 (2024 target) ; 437,243 (Merger PBRSUs target) |
| Stock Ownership Policy | CEO must hold ≥5x base salary; directors must hold $500,000; 100% net shares retained until compliant; options/unvested units not counted |
| Hedging/Pledging | Hedging prohibited; short sales, exchange‑traded options prohibited; pledging without approval prohibited; pre‑clearance and blackout windows apply |
Upcoming Vesting Schedule (selected tranches)
| Vesting Date | Shares (CEO) |
|---|---|
| Feb 21, 2025 | 86,973 |
| Feb 23, 2025 | 38,862 |
| Feb 27, 2025 | 73,799 |
| Feb 21, 2026 | 86,972 |
| Feb 21, 2027 | 86,972 |
| 1‑Year Anniversary of Merger Close | 262,346 (RSAs) |
| 2‑Year Anniversary of Merger Close | 393,518 (RSAs) |
| 3‑Year Anniversary of Merger Close | 655,864 (RSAs) |
Employment Terms
- Employment agreement auto‑renews annually (initial term through Dec 31, 2021); base salary ≥$725,000; target bonus 150% of base (committee discretion up to 200%) .
- Severance (no CIC): 2.5x salary + average bonus (last 3 years), plus 2 years’ health/dental continuation; subject to release and non‑compete/non‑solicit (2 years for most terminations; 1 year for termination for cause or after CIC) .
- Change‑in‑Control severance (double‑trigger within 1 year): pro‑rata target bonus, 2.5x of the higher of pre‑CIC or termination salary plus average bonus, and 2 years’ health/dental continuation; no excise tax gross‑up, with cut‑back if beneficial .
- Equity treatment (non‑merger awards): time‑based RS fully accelerate on certain terminations; PBRSUs pro‑rated and remain eligible based on actual performance; if terminated within 1 year post‑CIC, PBRSUs vest based on performance to most recent month‑end .
- Special Merger Grants: contingent on Windstream closing; detailed vesting and CIC rules including maximum TSR deemed achieved at CIC and full vesting on Qualifying Termination within one year .
- Clawback: Nasdaq‑compliant policy for restatements; after a tax‑related restatement of 2023 interim financials, no recovery required as performance measures were unaffected .
Board Governance (service, roles, and dual‑role implications)
- Board Service: Director since 2015; currently nominated for re‑election; sole management director nominee; not independent under Nasdaq standards .
- Committee Roles: Does not serve on Audit, Compensation, or Governance committees; all independent directors serve on committees .
- Board Leadership: Independent Chairman; independent directors hold executive sessions at each regular meeting; board met eight times in 2024; directors attended ≥75% of meetings .
- Dual‑Role Implications: CEO serves on board to provide operating insight; independence safeguarded via independent chair, majority‑independent board, executive sessions, and committee structures without management .
Compensation Structure Analysis
- High variable pay mix: 84% of CEO’s target total direct compensation variable in 2024, reinforcing pay‑for‑performance .
- Shift away from options: Company does not grant options; favors RSAs and PBRSUs given REIT dividend‑driven valuation and to manage dilution; options and SARs not discounted .
- Performance metrics: STIP tied to AFFO, bookings, on‑time delivery, gross margin; 2024 outcomes drove 194% of CEO target payout .
- Special Merger Grants: Additional RSAs and PBRSUs to align incentives post‑Windstream merger, including TSR‑based PBRSUs against telecom‑focused peer group; materially increases equity‑linked retention .
- Governance safeguards: Double‑trigger CIC vesting, caps on incentive opportunities, clawback, prohibition on dividends on PBRSUs before vesting .
Risk Indicators & Red Flags
- 2024 restatement of 2023 interim financials related to tax benefit for goodwill impairment; clawback review concluded no compensation recovery required; monitor future internal control disclosures .
- 2021 PBRSUs did not vest due to relative TSR underperformance, indicating strict performance gating; 2022 PBRSUs also did not vest (except one amended award for another NEO), reinforcing pay‑for‑performance rigor .
- CIC treatment for Special Merger Grants deems TSR achieved at max upon CIC, with full vesting on Qualifying Termination within one year—creates potential payout acceleration in strategic transactions (standard in market, but watch investor optics) .
- Anti‑hedging and anti‑pledging policies reduce misalignment risk; blackout windows and pre‑clearance mitigate trading timing risk .
Compensation Peer Group (2024 program design)
- Peer Group blended REITs and telecom (e.g., AMT, CCI, SBAC, DLR, LUMN, CNSL, OHI, EPR, NNN, HPP, PDM, HR, UMH, AKR, CDP, SRC) used for market analysis alongside NAREIT survey data; committee plans telecom‑focused peer group post‑merger .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay: ~93% approval; committee maintained core design for 2025 pending merger‑related program refinements and investor alignment for combined company .
Performance & Track Record (Selected Company Metrics)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Company TSR (Value of $100) | $153 | $193 | $81 | $97 | $100 |
| Peer Group TSR (Value of $100) | $92 | $132 | $100 | $114 | $123 |
| Net Income (Loss), $mm | (718.8) | 124.7 | (8.1) | (81.7) | 93.4 |
| Adjusted EBITDA, $mm | 818.8 | 878.3 | 905.9 | 923.5 | 940.1 |
Investment Implications
- Alignment: Large unvested equity (time‑based and performance‑based) plus stringent stock ownership guidelines and anti‑hedging/pledging policies align incentives with long‑term shareholder value, especially through TSR‑linked PBRSUs .
- Retention and Merger Optionality: Special Merger Grants materially increase service‑vesting over three years and TSR‑based payouts post‑close, reducing near‑term departure risk but creating meaningful equity acceleration in CIC scenarios; monitor merger closing and subsequent peer group calibration .
- Pay‑for‑Performance Rigor: Non‑vesting of prior PBRSUs on TSR underperformance and the 2024 metric mix (AFFO, operational KPIs) indicate disciplined incentive design; 2024 over‑achievement on AFFO and on‑time delivery drove high STIP payout—watch for sustainability of operational execution .
- Trading Signals: Upcoming time‑based vesting tranches and RSAs tied to merger closing could increase routine tax‑related share withholding flows around vest dates; pre‑clearance and blackout rules govern discretionary trading .
- Governance: Independent chair and fully independent committees mitigate dual‑role risks of CEO/director; strong say‑on‑pay support suggests investor acceptance of design, though CIC max‑TSR deeming for Special Merger Grants warrants attention in event‑driven scenarios .