DEF 14A of Kennametal Inc
Filed Sep 15, 2025 · FY20250001104659-25-089785
Board Nominees
Board Nominees
Board Nominees
| | | | | | Committee Memberships | | | Other Public | | Name | Age | Director Since (1) | Occupation | Independent | AC | CHC | N/CG | Company Boards | | Joseph Alvarado | 73 | 2018 | Board of Directors, Arcosa, Inc., PNC Financial Services Group, Inc. and Trinseo, S.A. | Yes | — | ✘ | Chair | Arcosa, Inc.; PNC Financial Services Group, Inc.; Trinseo, S.A. | | Shelley Bausch | 59 | 2025 | Board of Directors, GATX Corporation | Yes | ✘ | — | — | GATX Corporation | | Sanjay Chowbey | 57 | 2024 | President and Chief Executive Officer (“CEO”), Kennametal Inc. | No | — | — | — | — | | Douglas T. Dietrich | 56 | 2025 | Chairman and CEO, Minerals Technologies Inc. | Yes | ✘ | — | — | Minerals Technologies Inc. | | William M. Lambert | 67 | 2016 | Chairman of the Board, Kennametal Inc. | Yes | — | — | — | MSA Safety Incorporated | | Lorraine M. Martin | 63 | 2018 | President and CEO, National Safety Council | Yes | — | ✘ | | IperionX Limited | | Sagar A. Patel | 59 | 2016 | Board Member, Aerospace Portfolio Company, Ronin Equity Partners | Yes | ✘ | — | ✘ | — | | Paul Sternlieb | 53 | 2023 | President and CEO and member of the Board of Directors, Enerpac Tool Group | Yes | ✘ | — | — | Enerpac Tool Group |
Board Nominees
| (1) References are to calendar years |
Board Nominees
| AC | Audit Committee |
Board Nominees
| CHC | Compensation and Human Capital Committee |
Board Nominees
| N/CG | Nominating/Corporate Governance Committee |
Board Nominees
| ● | Attendance: In Fiscal 2025, each of our directors serving on the Board attended at least 75% of the Board and committee meetings on which he or she sat during his or her tenure as a director. The following changes were made to the Board in Fiscal 2025: Mr. Dietrich was elected to the Kennametal Inc. Board effective February 1, 2025 and Ms. Bausch was elected to the Kennametal Inc. Board effective May 1, 2025. At the same time, effective February 1, 2025, Mr. Dietrich was appointed to serve on the Audit Committee. Effective May 1, 2025, Ms. Bausch was appointed to serve on the Audit Committee. During Fiscal 2025, there were no changes to the Compensation and Human Capital Committee and Nominating/Corporate Governance Committee memberships. During Fiscal 2025, Cindy L. Davis served Chair of the Compensation and Human Capital Committee and a member of the Nominating/Corporate Governance Committee, William J. Harvey served as a member of the Compensation and Human Capital Committee and the Nominating/Corporate Governance Committee, and Steven H. Wunning as Chair of the Audit Committee. |
Board Nominees
| ● | Director Elections: Directors are elected by a majority of votes cast; meaning that the number of votes cast “for” such director nominee must exceed the number of votes cast “against” such nominee in order for a director to be elected. |
Executive Compensation Highlights for Fiscal 2025
| ● | Compensation is paid in a mix of base salary, annual cash-based incentives under our AIP, and equity-based long-term incentive awards. |
Executive Compensation Highlights for Fiscal 2025
| ● | Annual cash-based incentive plan: “first half” and “second half” goal setting for metrics that comprise 70% of the AIP weight, which provides the Committee with better insights into economic conditions that can rapidly impact our business either positively or negatively. No payments are made until the end of the fiscal year. |
Executive Compensation Highlights for Fiscal 2025
| ● | PSU plan: Adjusted ROIC performance goals established annually for each fiscal year. No awards are paid until following the full three-year performance period. The Committee adopted this methodology to alleviate instances where rapidly changing economic conditions render performance goals either not challenging (goals set in an economic trough) or unachievable early in the three-year performance period which can result in retention risks and even the need for separate retention awards. Adjusted ROIC performance goals and related payouts for Fiscal 2025 were approved by the Committee in July 2024. Adjusted ROIC performance goals for Fiscal 2026 and Fiscal 2027 will be determined near the beginning of each of the subsequent fiscal years. The Committee approved the Average Adjusted EBITDA Margin goal and related payouts at its July 2025 meeting for the full three-year performance period. |
Executive Compensation Highlights for Fiscal 2025
| ● | Payment of annual cash-based incentives under the AIP is based on achieving critical measures of Company and Segment performance, consistent with our pay-for-performance philosophy. Payments earned under the Fiscal 2025 AIP were based on financial metrics with two six-month performance periods and one financial metric with a twelve-month performance period, while ESG goals were measured over the full fiscal year. The financial metrics and weightings are described above in the section “Changes to Executive Compensation Arrangements in Fiscal 2025.” No award earned is paid prior to the end of the fiscal year. |
Executive Compensation Highlights for Fiscal 2025
| ● | Our equity-based long-term incentive program is intended to drive the achievement of critical long-term business objectives, align management’s interests with those of our shareowners and foster retention of key executives. In Fiscal 2025, 60% of the target value of each executive’s long-term incentive opportunity was granted as PSUs and 40% was granted as RSUs, all of which are settled in stock. RSUs continue to vest at the rate of one-third per year on each grant date anniversary over three years. |
Executive Compensation Highlights for Fiscal 2025
| ● | Vesting of Fiscal 2025 PSUs is based on the attainment of an Adjusted ROIC financial performance goal (66.66% weight) and Average Adjusted EBITDA Margin (33.34% weight). PSUs are subject to an additional continuous service requirement, which provides that award recipients must remain employed by the Company through the distribution date to receive the units, which is three years after the grant date. For Fiscal 2025, only one-third of the Adjusted ROIC component of the FY2025-2027 PSU award will be reported in the subsequent tables following the Compensation and Human Capital Committee Report, as financial targets for remaining tranches will be set at or near the beginning of each subsequent fiscal year. Accordingly, only the Fiscal 2025 tranche for Adjusted ROIC performance is included as part of the grant under applicable disclosure rules in the tables below. The remaining tranches will be reported as separate grants when the applicable PSU targets are established. |
Fiscal 2025 AIP
Fiscal 2025 AIP
Fiscal 2025 AIP
| ● | For Fiscal 2025, including “first half” and “second half” performance, the total payout for twelve months was as follows, based on performance against our financial metrics and including the ESG modifier, which reduced NEO payouts by 10%: Corporate NEOs was 63.2% of target; Mr. Bersaglini (who had prorated payments for the first half performance period and PWCPS full-year performance period) was 59.2% of target; and Mr. Hamadi (who had a blend of Corporate and Infrastructure Segment) was 66.7% of target. Mr. Cardenas was paid based upon the Infrastructure Segment performance, which was 70.5% of target. No payments were made at the end of the first six-month period. |
Performance Stock Units
Performance Stock Units
Performance Stock Units
| ● | The first of three tranches of the 2025 PSUs tied to Adjusted ROIC achieved performance at an 81.1% multiple of target. Average Adjusted EBITDA Margin is yet to be calculated for the three-year period ending June 30, 2027. No payment has been made under the 2025 PSUs. |
Performance Stock Units
| ● | The second of three tranches of the 2024 PSUs tied to Adjusted ROIC achieved performance, at an 81.1% multiple of target. The tranche tied to Average Adjusted EBITDA Margin is yet to be calculated for the three-year period ending June 30, 2026. No payment has been made under the 2024 PSUs. |
Performance Stock Units
| ● | The third of three tranches of the 2023 PSUs tied to Adjusted ROIC achieved performance at an 81.1% multiple of target, and when combined with the first and second tranches tied to Adjusted ROIC, the three tranches achieved 91.1% multiple of target and comprised 66.66% weight of the number of PSUs awarded. The tranche tied to Average Adjusted EBITDA Margin, which comprised 33.34% weight of the number of PSUs awarded, achieved performance at a 92.4% payout multiple of target over the three-year performance period. The cumulative total payout multiple was 91.5% of target for the combined three years of ROIC performance (fiscal years 2023, 2024 and 2025) and Average Adjusted EBITDA Margin for fiscal years 2023 through 2025. |
Performance Stock Units
| HIDDEN_ROW | | | GENERAL INFORMATION | 1 | | PROPOSAL I. ELECTION OF DIRECTORS | 7 | | ETHICS AND CORPORATE GOVERNANCE | 16 | | Code of Conduct | 16 | | Corporate Governance | 16 | | The Board’s Oversight of Risk Management | 22 | | Corporate Responsibility Reporting | 22 | | BOARD OF DIRECTORS AND BOARD COMMITTEES | 25 | | Meeting Information | 25 | | Board Committees | 25 | | Committee Functions | 26 | | Board of Directors Compensation and Benefits | 27 | | AUDIT COMMITTEE REPORT | 31 | | PROPOSAL II. RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 33 | | EXECUTIVE COMPENSATION | 35 | | COMPENSATION DISCUSSION AND ANALYSIS | 35 | | Fiscal 2025 Summary | 35 | | Executive Compensation Highlights for Fiscal 2025 | 36 | | Relationship Between Pay and Performance | 38 | | Design of our Executive Compensation Program | 41 | | How Compensation Decisions are Made | 44 | | 2025 Executive Compensation Program | 46 | | COMPENSATION AND HUMAN CAPITAL COMMITTEE REPORT | 61 | | ANALYSIS OF RISK INHERENT IN OUR COMPENSATION POLICIES AND PRACTICES | 62 | | Executive Compensation Tables | 63 | | 2025 Nonqualified Deferred Compensation | 70 | | Retirement Programs | 70 | | EQUITY COMPENSATION PLANS | 72 | | POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL | 74 | | CEO PAY RATIO FOR FISCAL YEAR 2025 | 81 | | Pay Versus Performance (“PVP”) | 82 | | PROPOSAL III. NON-BINDING (ADVISORY) VOTE TO APPROVE THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS | 89 | | OWNERSHIP OF CAPITAL STOCK BY DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS | 90 | | PRINCIPAL HOLDERS OF VOTING SECURITIES | 92 | | FORM 10-K ANNUAL REPORT | 93 | | OTHER MATTERS | 94 | | Delinquent Section 16(a) Reports | 94 | | APPENDIX A — EBITDA, EBITDA MARGIN, ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN, PWC, PWCPS, ROIC AND ADJUSTED ROIC RECONCILIATIONS | A-1 |
Director Skills and Experience Matrix
Director Skills and Experience Matrix
Director Skills and Experience Matrix
| | Alvarado | Bausch | Chowbey | Dietrich | Lambert | Martin | Patel | Sternlieb | | Regulatory MATTERS | | | | | | | | | | Financial Expert | ✘ | | ✘ | ✘ | ✘ | | | ✘ | | Independent Director | ✘ | ✘ | | ✘ | ✘ | ✘ | ✘ | ✘ | | SKILLS / EXPERIENCE | | | | | | | | | | CEO Experience | ✘ | | ✘ | ✘ | ✘ | | | ✘ | | Corporate Finance (public company) | ✘ | ✘ | ✘ | ✘ | ✘ | | | ✘ | | Corporate Governance / Corporate Responsibility | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | Current or Recent Executive Experience | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | Diversity | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | Environmental / Health / Safety | ✘ | | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | Government / Military | ✘ | | | ✘ | ✘ | ✘ | ✘ | ✘ | | Industry / Manufacturing Knowledge | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | International | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | Legal – Transactions | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | Operations Production | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | Public Company Board Experience | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | Risk Management | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | Sales and Marketing | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | Strategic Planning | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | Technology / Engineering | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | Cybersecurity | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | | | Climate Change | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | |
Director Skills and Experience Matrix
| | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE NOMINEES. |
Director Skills and Experience Matrix
We have provided additional information about each nominee and each director whose term of office will continue after the Annual Meeting below, if elected, including the specific characteristics and traits that we believe qualify these individuals to serve as directors of our Company. We have also provided Ms. Davis’s, Mr. Wunning’s and Mr. Harvey’s information even though Ms. Davis retired as of September 1, 2025 and Mr. Wunning and Mr. Harvey are retiring as of the date of the Annual Meeting.
Director Skills and Experience Matrix
| Joseph Alvarado Age: 73 Director since: 2018 Independent Committee Memberships: Compensation and Human Capital Nominating / Corporate Governance (Chair) Other Directorships: Arcosa, Inc. PNC Financial Services Group, Inc. Trinseo, S.A. | Mr. Alvarado is a Director, retired Chairman, President and CEO of Commercial Metals Company (“CMC”), a global manufacturer, recycler and marketer of steel and other metals. He joined CMC in April 2010 as Executive Vice President and Chief Operating Officer (“COO”) and became President and COO in April 2011. He was named President and CEO and elected to CMC’s Board in September 2011; he served as Chairman of the Board from January 2013 until his retirement in January 2018. Before joining CMC, Mr. Alvarado was Operating Partner for Wingate Partners and The Edgewater Funds and, prior to that, he was the President of U.S. Steel Tubular Products, Inc., a division of United States Steel Corporation. Throughout his career, Mr. Alvarado served in various leadership and executive positions including President and COO of Lone Star Technologies, Inc., Vice President-Long Products Sales and Marketing for Ispat North America, Inc., Executive Vice President, Commercial at Birmingham Steel Company, and President of Inland Steel Bar Company. Mr. Alvarado has an MBA from the Johnson School, Cornell University and a Bachelor of Arts degree in Economics from the University of Notre Dame. | | | Qualifications: Mr. Alvarado is a strong leader with significant experience in managing global businesses. With his extensive knowledge of the metals industry and years of experience in manufacturing, he understands the challenges and opportunities facing Kennametal. He provides strategic insight and valuable perspective to our Board and is an “audit committee financial expert” based on his relevant experience with financial and accounting matters. |
Director Skills and Experience Matrix
| Shelley Bausch Age: 59 Director since: 2025 Independent Committee Memberships: Audit Other Directorships: GATX Corporation Kraton Corporation (2017-2022) | Shelley Bausch recently retired as President, Global Industrial Coatings at Axalta. She led Axalta’s Industrial Coatings businesses, which include energy solutions, coil, wood, general industrial and powder coatings, and drove expansion into new industrial coatings markets. Previously, Ms. Bausch led the Asia Pacific region and the Fluid Technologies business unit for the Carlisle Companies Inc., a manufacturer of engineered products used in roofing, architectural metal, aerospace, medical technologies, industrial, transportation, refinish, and agriculture, mining and construction equipment markets. Before Carlisle, she led the Industrial Coatings business for PPG from 2014 to 2017 and spent 25 years at Dow Corning Corporation in a variety of senior management and commercial roles, including several years in Shanghai, China. Since 2023, Ms. Bausch has served on the board of directors of GATX Corporation, a leading global lessor of transportation assets including railcars and aircraft spare engines, where she also serves on the Audit Committee and Governance Committee. | | | Qualifications: Ms. Bausch earned a B.S. in Business Administration, summa cum laude, from Alma College and an M.B.A. from the University of Michigan – Flint. |
Director Skills and Experience Matrix
| Sanjay Chowbey Age: 57 Director since: 2024 Non-Independent Other Directorships: The National Association of Manufacturers | Mr. Chowbey is President and CEO and a member of the Board of Directors of Kennametal Inc. He has been serving in these positions since June 1, 2024. Chowbey joined Kennametal in 2021 as Vice President Kennametal Inc. and President of the Metal Cutting segment where he had global responsibility for advancing the business segment’s strategy, driving operational excellence and delivering profitable growth. Prior to that, he served as President of the $1.2 billion Services & Solutions business at Flowserve. He has more than 20 years of experience at various industrial companies, including Flowserve Corporation, Danaher and Arvin Meritor Inc. Chowbey brings deep global and cross-functional perspective having held various President and General Manager roles, with responsibility for strategy, operations, sales, marketing and finance. | | | Qualifications: Mr. Chowbey earned his MBA from the Kellogg School of Management at Northwestern University; Master of Science degree in mechanical engineering from Tennessee Tech University; and Bachelor of Science degree in mechanical engineering from B.I.T. in Sindri, India. |
Director Skills and Experience Matrix
| Douglas T. Dietrich Age: 56 Director since: 2025 Independent Committee Memberships: Audit Other Directorships: Minerals Technologies Inc. | Douglas T. Dietrich was elected Minerals Technologies Chairman of the Board in March 2021. He has served as the Chief Executive Officer of Minerals Technologies Inc. (MTI) since December 2016. Dietrich has over 30 years of experience in the industrial goods, mining and metals manufacturing sector as well as significant expertise in engineering, management and operations. Since joining MTI in 2007, Mr. Dietrich has held numerous key management positions, including Senior Vice President, Finance and Treasury and Chief Financial Officer with responsibility for the overall finance function, and Vice President, Corporate Development and Treasury where he led Corporate Strategy and M&A initiatives. Prior to his tenure at MTI, Mr. Dietrich held several positions of increasing leadership responsibility at Alcoa Inc. These roles included Vice President, Alcoa Wheel Products - Automotive Wheels; President, Alcoa Latin America Extrusions; General Manager, Global Rod and Bar Products; and Manager, Business Development and Strategic Global Sourcing – Asia and Latin America. Earlier in his career, Mr. Dietrich worked for Eaton Corporation and Westinghouse Electric Corporation where he held various positions in Engineering and Operations Management. | | | Qualifications: Mr. Dietrich holds a Bachelor of Science degree in Mechanical Engineering from the University of Michigan and an MBA in Finance from The Wharton School at the University of Pennsylvania. He provides strategic insight and valuable perspective to our Board and is an “audit committee financial expert” based on his relevant experience with financial and accounting matters. |
Director Skills and Experience Matrix
| William M. Lambert Age: 67 Director since: 2016 Chairman of the Board Independent Other Directorships: MSA Safety Incorporated | Mr. Lambert is Chairman of the Board of Directors for Kennametal Inc., serving in this position since November 1, 2023. Mr. Lambert is a member of the Board of Directors of MSA Safety Incorporated (“MSA”), a global leader in the manufacture and supply of workplace safety products. He is the retired President and Chief Executive Officer of MSA, having served in this position from 2008 until May 2018. Mr. Lambert has been a director on MSA’s Board since 2007, holding the Chairman position from May 2015 through May 2020. He joined MSA in 1981 as a design engineer and over the years served the company in a variety of capacities of increasing responsibility. He previously served on the Board of Directors of EQT Corporation, a natural gas producer, from November 2018 through July 2019. Mr. Lambert has achieved “Fellow” status with the National Association of Corporate Directors (NACD). He holds a Bachelor’s degree in Mechanical Engineering from Penn State University and a Master’s degree in Industrial Administration from Carnegie Mellon University. | | | Qualifications: Mr. Lambert has extensive experience leading a global manufacturing company and he brings to the Board valuable knowledge in business strategy, product development, marketing and finance. In his capacity as independent Chairman of the Board, he serves as the independent liaison between our management, our shareowners and the Board. He provides strategic insight and valuable perspective to our Board and is an “audit committee financial expert” based on his relevant experience with financial and accounting matters. |
Director Skills and Experience Matrix
| Lorraine M. Martin Age: 63 Director since: 2018 Independent Committee Memberships: Compensation and Human Capital Other Directorships: National Safety Council IperionX Limited | Ms. Martin is a director, President and CEO of the National Safety Council, serving in this position since June 2019. She is also co-founder and President of Pegasus Springs Foundation, a nonprofit organization focused on education and mentoring. In 2021, Ms. Martin was appointed to the Board of Directors of IperionX Limited, a developer of sustainable, critical material supply chains, and was appointed independent Lead Director in March 2025. Ms. Martin is the retired Executive Vice President and Deputy of Rotary and Mission Systems (RMS) for Lockheed Martin Corporation, a global aerospace, defense, security and advance technologies company. Prior to RMS, Ms. Martin was Executive Vice President and General Manager for the F-35 Lightning II Program for Lockheed Martin Aeronautics Company. Her leadership of the F-35 program earned Pentagon recognition for reducing program costs while increasing production and fielding more aircraft worldwide. She joined Lockheed Martin in 1988 and during her tenure, held a variety of high visibility leadership positions across the corporation. Prior to joining Lockheed Martin, she served as an officer in the U.S. Air Force, holding various leadership positions for software intensive technology and development programs. She has a Master of Science degree in Computer Science from Boston University and a Bachelor of Arts degree in Computational Mathematics from DePauw University. | | | Qualifications: Ms. Martin has over 35 years’ experience in the aerospace industry and is a proven leader in a variety of challenging roles. Her experience in international business and manufacturing is of significant value to Kennametal. She brings a unique perspective to our Board with her extensive knowledge of the aerospace industry, technology, supply chain management and strategic planning. |
Director Skills and Experience Matrix
| Sagar A. Patel Age: 59 Director since: 2016 Independent Committee Memberships: Audit Nominating / Corporate Governance Other Directorships: Ronin Equity Partners | Mr. Patel is self-employed since October 2022, consulting in the area of Aerospace and Defense M&A projects. Mr. Patel is a Board Member and Operating Advisory of Ronin Equity Partners. Mr. Patel is an Advisor and Equity Investor of Jeh Aerospace Inc. Mr. Patel is the retired Group President, Engine Systems for Woodward, Inc., a manufacturer and service provider of control solutions for the aerospace and industrial markets, a position he held from 2021 through October 2022. He joined Woodward, Inc. in June 2011 as President Aircraft Turbine Systems and in 2019 became the Business Unit President, Fuel Systems and Controls for Woodward. In January 2020 he became Business Unit President, Aerospace After market and Hydraulic Systems through 2021. Before joining Woodward, Mr. Patel worked at General Electric, where he last served as President, Mechanical Systems, GE Aviation in Cincinnati, Ohio. At GE’s Aviation and Transportation businesses, Mr. Patel held roles with increasing responsibilities in engineering, operations, services, and P&L management. Earlier in his career, he worked for a utility company in India for three years. Mr. Patel served as Chairman of the Rockford Area Economic Development Council (RAEDC) in Rockford, Illinois, in addition to serving on the Illinois Governor’s Innovation Advisory Council. Mr. Patel holds a Master’s degree in electrical engineering from the University of Pittsburgh and a Bachelor’s degree in Controls and Instrumentation Engineering from Gujarat University in India. | | | Qualifications: Mr. Patel has more than 30 years’ experience in the aerospace, transportation and energy industries, bringing to our Board extensive experience in product and advanced manufacturing innovation, global operations and strategic growth areas. |
Director Skills and Experience Matrix
| Paul Sternlieb Age: 53 Director since: 2023 Independent Committee Memberships: Audit Other Directorships: Enerpac Tool Group Children’s Wisconsin Metropolitan Milwaukee Association of Commerce Manufacturers Alliance of Productivity and Innovation | Mr. Sternlieb is the President & CEO and a member of the Board of Directors of Enerpac Tool Group, effective October 2021. Before joining Enerpac Tool Group, he served as EVP & President, Protein at JBT Corporation from 2017 to 2021. Prior to this, Mr. Sternlieb was Group President, Global Cooking Equipment within the Food Equipment Group segment of Illinois Tool Works from 2014 to 2017; and Vice President & General Manager with Danaher from 2011 to 2014, where he led a division within the industrial technologies segment. Prior to these roles, Mr. Sternlieb held senior marketing and strategy positions at H.J. Heinz, in both the US and Europe, and he was also an Engagement Manager with McKinsey & Company where he led marketing and growth strategy projects for clients in both the US and Europe. Mr. Sternlieb holds dual Bachelor’s degrees, in Economics and Computer Science, from the University of Pennsylvania. He received his MBA from the Wharton School, where he graduated as a Palmer Scholar. | | | Qualifications: Mr. Sternlieb brings extensive operational and international experience to the Board, as a sitting President and CEO of an industrial manufacturing company. He has an established record of using a systematic approach to delivering growth and margin expansion at industrial businesses. He provides strategic insight and valuable perspective to our Board and is an “audit committee financial expert” based on his relevant experience with financial and accounting matters. |
Director Skills and Experience Matrix
| Retired in 2025 Cindy L. Davis Age: 63 Director since: 2012 Independent Committee Memberships: Compensation and Human Capital (Chair) Nominating / Corporate Governance Other Directorships: Brinker International, Inc. Deckers Outdoor Corporation Furman University | Ms. Davis is a retired Vice President of Nike, Inc., and retired President, Nike Golf, a global leading innovator in athletic footwear, apparel, equipment and accessories, positions she held from 2008 through January 2015. Ms. Davis joined Nike, Inc. in 2005 as General Manager, Nike Golf USA after holding a variety of marketing and executive positions for companies such as the Arnold Palmer Golf Company and The Golf Channel. She has served as a director on the Boards of Deckers Outdoor Corporation and Brinker International, Inc., since June 2018 and January 2019, respectively. She currently serves as Chairperson of the Board of Directors of Deckers Outdoor Corporation. She previously served on the Board of Directors of Buffalo Wild Wings, a casual dining restaurant and sports bar franchise, from January 2015 through February 2018. She currently serves as Chairperson on the Board of Trustees for Furman University and is a Trustee of AMB Board of Trustees. Ms. Davis earned an MBA in Marketing and Finance at the University of Maryland, and a Bachelor of Arts degree in Economics at Furman University in Greenville, South Carolina. | | | Qualifications: Ms. Davis’ experience with brand strategy and global brands adds valued perspective to our Board. Her winning track record of driving innovation and profitable growth, globally, positions her as an excellent fit for our Board of Directors. Ms. Davis served as Chair of our Compensation and Human Capital Committee until her retirement on September 1, 2025. |
Director Skills and Experience Matrix
| Retiring in 2025 William J. Harvey Age: 74 Director since: 2011 Independent Committee Memberships: Compensation and Human Capital Nominating / Corporate Governance Other Directorships: Bridgestone Americas, Inc. (2017-2023) Clean Chemistry, Inc. Huber Engineered Woods LLC Origin Materials, Inc. The Delrin Company | Mr. Harvey is the retired President of DuPont Packaging & Industrial Polymers, a multi-billion-dollar global business unit of E.I. DuPont de Nemours & Company, a science and technology-based company, serving in that position from 2009 through 2015. Mr. Harvey joined DuPont in 1977 and left in 1992 to become General Manager of the Peroxygen Chemical Division of FMC Corporation, a diversified chemical company. He rejoined DuPont in 1996 as Global Business Director for DuPont Packaging & Industrial Polymers. Mr. Harvey held various management-level positions with DuPont including Vice President and General Manager of the DuPont Advanced Fiber businesses, Kevlar and Nomex Fibers, Vice President of DuPont Corporate Operations and Vice President of DuPont Corporate Plans. Mr. Harvey holds a Bachelor’s degree in Economics from Virginia Commonwealth University and a Master’s degree from the University of Virginia Darden Graduate School of Business. He is the former Vice-Chair of the Board of Trustees of Washington College where he served on the Executive Committee and chaired the Admissions and Financial Aid Committee. Mr. Harvey previously held Board of Trustees positions at the Darden School at the University of Virginia and Delaware State University. | | | Qualifications: Mr. Harvey brings to the Board keen strategic insight and commercial expertise. His wealth of global experience and business acumen make an excellent contribution to our Board until his retirement on October 28, 2025. |
Director Skills and Experience Matrix
| Retiring in 2025 Steven H. Wunning Age: 74 Director since: 2005 Independent Committee Memberships: Audit (Chair) Other Directorships: Black & Veatch Company (2004-2022) Summit Materials, Inc. (2016-2025) The Sherwin Williams Company (2015-2023) | Mr. Wunning is the retired Group President and Executive Office member of Caterpillar Inc., a global manufacturer of construction, mining, and industrial equipment, having served in those positions from January 2004 to January 2015. In that capacity, he had administrative responsibility for the Resource Industries Group which included Advanced Components & Systems Division, Integrated Manufacturing Operations Division, Mining Products Division, Mining Sales & Marketing Division, and Product Development & Global Technology Division. Mr. Wunning joined Caterpillar in 1973 and served in positions of increasing responsibility, including Vice President and then President of Cat Logistics and Corporate Vice President of the Logistics & Product Services Division. He previously served as a director on the Boards of Summit Materials, Inc. from 2016 through 2025, Neovia Logistics Services, LLC, from 2015 through 2020, and Black and Veatch Holding Company from 2004 through May 2022 and the Sherwin Williams Company from 2015 until April 2023. Mr. Wunning is a member of the Board of Trustees of the Missouri University of Science and Technology. He has a Bachelor of Science degree in Metallurgical Engineering from the University of Missouri at Rolla, now Missouri University of Science and Technology, and an Executive MBA from the University of Illinois. | | | Qualifications: Mr. Wunning has extensive operational and management experience in the areas of quality, manufacturing, product support and logistics for a complex, global organization. He understands the challenges of managing a global manufacturing organization and provides valuable insight and perspective to our Board with respect to operations, supply chain logistics and customer relations. Mr. Wunning currently serves as Chair of our Audit Committee until his retirement on October 28, 2025. |
Board of Directors Compensation and Benefits
Board of Directors Compensation and Benefits The Board has delegated primary responsibility for matters relating to compensation of our directors to the Nominating/Corporate Governance Committee. Because the Nominating/Corporate Governance Committee is also responsible for the recruitment of new directors and ensuring that the Board and committees are properly constituted, the Board believes that compensation matters relating to our directors should also reside with the Nominating/Corporate Governance Committee. The Nominating/Corporate Governance Committee, in consultation with the Board’s independent compensation consultant, Pay Governance, as appropriate, recommends the overall compensation structure for directors to the full Board for review and approval. Committee Review of Director Compensation The Nominating/Corporate Governance Committee determines appropriate levels of compensation for our non-employee directors by reviewing data from other publicly-traded companies and conferring with independent outside advisors as necessary, to obtain information on competitive director compensation practices and trends. The Committee uses this information to determine appropriate levels of non-employee director compensation. The Committee then makes recommendations regarding non-employee director compensation to the full Board for approval. In April 2025, the Nominating/Corporate Governance Committee commissioned a director compensation assessment that was conducted by the Compensation and Human Capital Committee’s independent consultant, Pay Governance. The consultant compared the Company’s director compensation levels and program practices to those of the Company’s peer group of 19 companies and a broader set of 148 general industrial companies of similar size to Kennametal. The consultant also advised the Committee of current trends and practices in director compensation, which include shareowner approval of equity award limits to directors. The consultant considered that the Company maintains a directors’ equity award limit of $500,000 in Company stock, which is contained in the 2024 Stock and Incentive Plan approved by the Company’s shareowners. The equity award limit prevents any individual non-employee director from receiving more than $500,000 in Company stock in any individual year. The 2024 Stock and Incentive Plan includes an overall limit of $850,000 per year for all non-employee director compensation, including equity, cash fees and cash awards. Based upon the assessment conducted by the compensation consultant, among other considerations, the Nominating/Corporate Governance Committee, at its April 29, 2025 committee meeting, recommended no changes in director compensation for Fiscal 2025. Equity Ownership by Directors The Board believes that directors should hold meaningful equity ownership positions in the Company. Accordingly, a significant portion of overall director compensation is in the form of Company equity, as shown in the “Overview of Director Compensation” section below. Our Stock Ownership Guidelines require our directors to accumulate and maintain equity ownership in the Company having a value of no less than five times the annual retainer within five years of the date they become subject to the policy. Overview of Director Compensation We do not pay any additional cash compensation to management employees who serve as directors. In addition, no director who is employed by the Company may serve on any Board committee. Mr. Chowbey, our President and CEO, is the only employee of the Company who serves as a director. Our non-employee directors receive a combination of cash and equity compensation for their services as a director or committee member as described below.
Equity Compensation
Equity Compensation Equity compensation for our non-employee directors consists of:
Equity Compensation
| Annual Grant of Restricted Stock, Restricted Stock Units or Deferred Stock Credits (grant amount is rounded up to the next whole share) | $145,000 |
Directors Stock Incentive Plan
Directors Stock Incentive Plan Under the Directors Stock Incentive Plan, any non-employee director may elect (i) to receive shares of the Company’s capital stock in lieu of all or any portion of cash compensation they are otherwise entitled to receive; or (ii) to have stock credits (representing an equivalent amount of the cash being deferred) credited to an account established by the Company for such participating director. If a non-employee director elects to receive shares of the Company’s capital stock in lieu of all or any portion of the cash compensation otherwise payable to such director, the director will receive, on the date that the compensation otherwise would have been paid, the number of shares of capital stock of the Company that could have been purchased on that date based on the amount of cash compensation and the fair market value of the Company’s capital stock on that date. If a non-employee director makes a stock credit election, an account established for the non-employee director is credited with a number of stock credits equal to the number of shares of capital stock that could have been purchased with the amount of cash compensation being deferred based on the fair market value of the Company’s capital stock on the day that the compensation would have been paid to the non-employee director. Dividend equivalents are credited to the account of any director who has elected to receive stock credits in lieu of cash compensation. Dividend equivalents are calculated at the same rate as the current dividend; there is no preferential or above-market earnings potential for deferrals into stock credits. In the event of a change in control, issued and outstanding shares of capital stock equal to the aggregate number of stock credits in each non-employee director’s stock credit account would be contributed to a deferred compensation trust (a “Rabbi Trust”) established by the Company and administered by an independent trustee. Generally, unless a director has selected a different payment option, as permitted under the plan, the director will receive upon his/her Separation from Service (as defined in the plan) that number of shares of the Company’s capital stock equal to the number of stock credits in such director’s account multiplied by the fair market value of the Company’s capital stock as of the date of the director’s Separation from Service.
2025 Non-Employee Director Compensation
2025 Non-Employee Director Compensation The following table shows the actual compensation we paid to our non-employee directors for service on the Board and applicable committees in 2025. 2025 Non-Employee Director Compensation
2025 Non-Employee Director Compensation
| | | Restricted | | | | | Fees Earned or | Stock Unit | All Other | | | | Paid in Cash | Awards | Compensation | | | Name | ($)(1) | ($)(2)(3) | ($)(4) | Total($) | | Joseph Alvarado | 95,000 | 145,000 | 69.6 | 240,070 | | Shelley Bausch | 14,165 | 24,167 | 69.6 | 38,402 | | Cindy L. Davis | 100,000 | 145,000 | 69.6 | 245,070 | | Douglas Dietrich | 35,415 | 60,417 | 69.6 | 95,902 | | William J. Harvey | 85,000 | 145,000 | 69.6 | 230,070 | | William M. Lambert | 185,000 | 145,000 | 69.6 | 330,070 | | Lorraine M. Martin | 85,000 | 145,000 | 69.6 | 230,070 | | Sagar A. Patel | 85,000 | 145,000 | 69.6 | 230,070 | | Paul Sternlieb | 85,000 | 145,000 | 69.6 | 230,070 | | Lawrence W. Stranghoener (5) | 21,250 | 145,000 | 69.6 | 166,320 | | Steven H. Wunning | 103,000 | 145,000 | 69.6 | 248,070 |
2025 Non-Employee Director Compensation
| (1) Our directors may elect to receive these fees in cash, in shares of our capital stock, or in deferred stock credits. |
2025 Non-Employee Director Compensation
| (2) On August 15, 2024, each non-employee director received a grant of RSUs with a grant date fair value of $144,998 or deferred stock credits amounting to $144,998 for those who elected to defer their restricted unit awards into deferred stock credits. RSUs vest at a rate of one-third per year over a three-year period beginning on the first anniversary of the grant date. Deferred stock credits may not be paid until the third anniversary of the grant date. The aggregate number of equity awards held by each director as of June 30, 2025, is set forth below in the Supplemental Table to 2025 Non-Employee Director Compensation Table. The values set forth in this column are based on the aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718 (excluding the effect of estimated forfeitures). Please refer to Note 18 to the financial statements included in Kennametal’s Annual Report on Form 10-K for 2025 for a discussion of additional assumptions used in calculating grant date fair value. |
2025 Non-Employee Director Compensation
| (3) We pay dividend equivalents on unvested RSUs during the restriction period, but the dividends are not preferential. For those directors who elected to defer their RSUs into deferred stock credits, their accounts are credited quarterly with dividend equivalents, but again, these are not preferential. |
2025 Non-Employee Director Compensation
| (4) These amounts consist of premiums paid by the Company for life insurance. |
2025 Non-Employee Director Compensation
| (5) Mr. Stranghoener did not stand for re-election at our 2024 Annual Meeting, and as such, only served as an independent Director for a portion of Fiscal 2025. |
2025 Non-Employee Director Compensation
Supplemental Table to 2025 Non-Employee Director Compensation Table
2025 Non-Employee Director Compensation
| | | | Aggregate Deferred | | | Aggregate Stock | Aggregate Unvested | Unvested Restricted | | | Options | Restricted Stock Units | Stock Units | | | Outstanding at | Outstanding at | Outstanding at | | Name | Fiscal Year-End | Fiscal Year-End | Fiscal Year-End(1) | | Joseph Alvarado | — | 11,293 | — | | Shelley Bausch | — | — | 1,773.564 | | Cindy L. Davis | — | 11,293 | — | | Douglas Dietrich | — | 2,523 | 1,618.507 | | William J. Harvey | 7,000 | 11,293 | 2,925.646 | | William M. Lambert | 14,000 | 11,293 | — | | Lorraine M. Martin | — | 11,293 | — | | Sagar A. Patel | — | — | 11,948.086 | | Paul Sternlieb | — | 10,405 | — | | Lawrence W. Stranghoener | 7,000 | — | 17,795.784 | | Steven H. Wunning | 7,000 | 11,293 | 15,217.923 |
2025 Non-Employee Director Compensation
| (1) Represents RSUs that were electively deferred by the Board member into deferred stock credits subject to a minimum deferral period of three years from the date of the grant. |
Changes to Executive Compensation Arrangements in Fiscal 2025
Changes to Executive Compensation Arrangements in Fiscal 2025 At its June 2024 meeting, the Compensation and Human Capital Committee (the “Committee”) modified the NEO’s Annual Incentive Plan (“AIP”) metrics for Fiscal 2025. For all NEOs, the performance period for the Corporate PWCPS metric was increased to twelve months from two six-month performance periods in recognition that Kennametal PWCPS is less volatile than revenue or profit metrics and generally has a minor difference in performance between six-month or annual goal setting. The Segment Presidents (defined as Infrastructure Segment President and Metal Cutting Segment President and, through April 1, 2025, the Former President, Infrastructure Segment) had their weighting of Segment Adjusted EBIT reduced from 25% to 15% with a corresponding increase in Kennametal Adjusted EBITDA from 25% to 35%. In 2025, the corporate NEOs had three financial metrics in addition to the ESG modifier as follows: Kennametal Revenue (weighted at 20%), Kennametal Adjusted EBITDA (weighted at 50%), and Kennametal PWCPS (weighted at 30%). The Segment Presidents had four financial metrics in addition to the ESG modifier as follows: Segment Revenue (weighted at 20%), Kennametal Adjusted EBITDA (weighted at 35%), Segment Adjusted EBIT (weighted at 15%), and Kennametal PWCPS (weighted at 30%). As Mr. Hamadi had two roles in Fiscal 2025, the first half of the fiscal year his AIP design was aligned with the corporate design and for the second half of the fiscal year his AIP design was aligned with the Infrastructure Segment design. No changes were made to the long-term incentive program (“LTIP”) for Fiscal 2025, reflecting a continuation of our practice to grant 60% of the target value of each executive’s long-term incentive opportunity as PSUs and 40% as RSUs.
Executive Compensation Highlights for Fiscal 2025
| ● | Compensation is paid in a mix of base salary, annual cash-based incentives under our AIP, and equity-based long-term incentive awards. |
Executive Compensation Highlights for Fiscal 2025
| ● | Annual cash-based incentive plan: “first half” and “second half” goal setting for certain metrics that comprise 70% of the AIP weight, which provides the Committee with better insights into economic conditions that can rapidly impact our business either positively or negatively. No payments are made until the end of the fiscal year. |
Executive Compensation Highlights for Fiscal 2025
| ● | PSU plan: Adjusted ROIC performance goals established annually for each fiscal year. No awards are paid until following the full three-year performance period. The Committee adopted this methodology to alleviate instances where rapidly changing economic conditions render performance goals either not challenging (goals set in an economic trough) or unachievable early in the three-year performance period which can result in retention risks and even the need for separate retention awards. Adjusted ROIC performance goals and related payouts for Fiscal 2025 were approved by the Committee in July 2024. Adjusted ROIC performance goals for Fiscal 2026 and Fiscal 2027 will be determined near the beginning of each of the subsequent fiscal years. The Committee approved the Average Adjusted EBITDA Margin goal and related payouts at its July 2025 meeting for the full three-year performance period. |
Executive Compensation Highlights for Fiscal 2025
| ● | Payment of annual cash-based incentives under the AIP is based on achieving critical measures of Company and Segment performance, consistent with our pay-for-performance philosophy. Payments earned under the Fiscal 2025 AIP were based on financial metrics with two six-month performance periods and one financial metric with a twelve-month performance period, while ESG goals were measured over the full fiscal year. The financial metrics and weightings are described above in the section “Changes to Executive Compensation Arrangements in Fiscal 2025.” No award earned is paid prior to the end of the fiscal year. |
Executive Compensation Highlights for Fiscal 2025
| ● | Our equity-based long-term incentive program is intended to drive the achievement of critical long-term business objectives, align management’s interests with those of our shareowners and foster retention of key executives. In Fiscal 2025, 60% of the target value of each executive’s long-term incentive opportunity was granted as PSUs and 40% was granted as RSUs, all of which are settled in stock. RSUs continue to vest at the rate of one-third per year on each grant date anniversary over three years. |
Executive Compensation Highlights for Fiscal 2025
| ● | Vesting of Fiscal 2025 PSUs is based on the attainment of an Adjusted ROIC financial performance goal (66.66% weight) and Average Adjusted EBITDA Margin (33.34% weight). PSUs are subject to an additional continuous service requirement, which provides that award recipients must remain employed by the Company through the distribution date to receive the units, which is three years after the grant date. For Fiscal 2025, only one-third of the Adjusted ROIC component of the FY2025-2027 PSU award will be reported in the subsequent tables following the Compensation and Human Capital Committee Report, as financial targets for remaining tranches will be set at or near the beginning of each subsequent fiscal year. Accordingly, only the Fiscal 2025 tranche for Adjusted ROIC performance is included as part of the grant under applicable disclosure rules in the tables below. The remaining tranches will be reported as separate grants when the applicable PSU targets are established. |
Fiscal 2025 AIP
Fiscal 2025 AIP
Fiscal 2025 AIP
| ● | For Fiscal 2025, including “first half” and “second half” performance, the total payout for twelve months was as follows, based on performance against our financial metrics and including the ESG modifier, which reduced NEO payouts by 10%: Corporate NEOs was 63.2% of target; Mr. Bersaglini (who had prorated payments for the first half performance period and PWCPS full-year performance period) was 59.2% of target; and Mr. Hamadi (who had a blend of Corporate and Infrastructure Segment) was 66.7% of target. Mr. Cardenas was paid based upon the Infrastructure Segment performance, which was 70.5% of target. No payments were made at the end of the first six-month period. |
Performance Stock Units
Performance Stock Units
Performance Stock Units
| ● | The first of three tranches of the 2025 PSUs tied to Adjusted ROIC achieved performance at an 81.1% multiple of target. Average Adjusted EBITDA Margin is yet to be calculated for the three-year period ending June 30, 2027. No payment has been made under the 2025 PSUs. |
Performance Stock Units
| ● | The second of three tranches of the 2024 PSUs tied to Adjusted ROIC achieved performance, at an 81.1% multiple of target. The tranche tied to Average Adjusted EBITDA Margin is yet to be calculated for the three-year period ending June 30, 2026. No payment has been made under the 2024 PSUs. |
Performance Stock Units
| ● | The third of three tranches of the 2023 PSUs tied to Adjusted ROIC achieved performance at an 81.1% multiple of target, and when combined with the first and second tranches tied to Adjusted ROIC, the three tranches achieved 91.1% multiple of target and comprised 66.66% weight of the number of PSUs awarded. The tranche tied to Average Adjusted EBITDA Margin, which comprised 33.34% weight of the number of PSUs awarded, achieved performance at a 92.4% payout multiple of target over the three-year performance period. The cumulative total payout multiple was 91.5% of target for the combined three years of ROIC performance (fiscal years 2023, 2024 and 2025) and Average Adjusted EBITDA Margin for fiscal years 2023 through 2025. |
Executive Compensation Philosophy
| ● | Pay-for-Performance. Executive compensation should be tied to both individual performance and Company performance (annual through the AIP performance component and long-term through the grant values of the LTIP awards). Individual performance may be reflected in the annual merit increase and/or in the annual LTIP award. Prior to Fiscal 2024, individual performance was also a component of the AIP. |
Executive Compensation Philosophy
| ● | Promote a Long-Term Perspective. Our compensation program should promote the long-term focus and strategic vision required for our future growth and success. |
Executive Compensation Philosophy
| ● | Offer Competitive Compensation. We believe that highly qualified and skilled executives can provide differentiation and a competitive advantage in the marketplace. Our objective is to offer compensation that is competitive with that offered by other companies that we compete with for talent. |
Objectives of the Executive Compensation Program
| ● | Focus our executives’ attention on the attainment of significant business objectives that align with our business strategy and the creation of long-term shareowner value; |
Relationship Between Pay and Performance
| ● | Whether performance goals have been set at appropriately challenging and achievable levels over the Reviewed Period; and |
Relationship Between Pay and Performance
| ● | Whether the weighting assigned to each long-term incentive vehicle is weighted appropriately resulting in an acceptable amount of leverage. |
Overall Design of the Executive Compensation Program
| Compensation Component | Why We Provide it | How We Determine the Amount for Tenured Executives | What it is Intended to Reward | | Base Salary | ● Consistent with competitive practice | ● Salaries at approximately the median of similar-sized manufacturing companies | ● Individual performance and level of experience, expertise, and responsibility within the Company | | Annual Incentive Plan (AIP) | ● To link pay and company performance over the fiscal year ● To drive the achievement of annual business objectives ● Consistent with competitive practice | ● Awards are performance-based and calculated as a percentage of base salary: — Target award opportunities are determined on an individual basis for similar positions in peer group manufacturing and general industrial companies | ● Annual Company financial and ESG performance | | Long-Term Incentives (includes restricted stock units and performance stock units) | ● To link pay and company performance over multiple fiscal years ● To drive the achievement of critical long-term business objectives ● To align management’s interests with those of our shareowners ● To foster the long-term retention of key executives ● Consistent with competitive practice | ● Total long-term incentive opportunity is determined on an individual basis based on the executive’s performance and career potential (internal and individual factors), and considering the long-term compensation paid to similar positions among peer group, manufacturing and general industrial companies ● For Fiscal 2025, the total long-term incentive opportunity was allocated between PSUs (60%) and RSUs (40%) | ● Long-term Company performance and individual performance ● PSUs—increased return on capital, improved profit margins and shareowner value and overall Company performance over the long-term ● RSUs—increased shareowner value and long-term commitment to the Company | | Retirement Benefits | ● Consistent with competitive practice | ● Market practice and Company-specific circumstances | ● To provide long-term financial security to executives who have demonstrated long-term commitment to the Company |
Overall Design of the Executive Compensation Program
We have designed our executive compensation program to target total direct compensation for each of our tenured executives in their current roles near the median level for executives in similar positions within our industry and peer group with the opportunity to earn actual compensation above or below median compensation depending on Company and individual performance. We believe that the design of the compensation program allows for actual compensation earned under our incentive plans to be above-median compensation for exceptional performance, as well as below-median compensation when performance falls below our expectations. Also, we may deviate from targeting the median if, in the judgment of management and/or the Committee, the value of an executive’s experience, performance and specific skill set warrants such a deviation. For individual executives, compensation may also vary depending on the executive’s experience, responsibility and expertise, such person’s contribution to our business strategy and the market’s demand for such skills and talent. The foundation of our program is based on a system of benchmark market pricing. Each executive’s compensation is competitively benchmarked against executives in comparable positions in similar revenue-sized manufacturing and general industrial companies and, in some cases, against a peer group of companies. This benchmarking process as well as an internal assessment of the position’s internal value to the Company, scope and complexity of responsibilities generally defines a range of opportunities for base salary, annual incentives and long-term incentives. The pay ranges give the Committee flexibility to position individual compensation above or below market median levels depending on the individual’s job performance, professional qualifications, business experience, technical expertise and career potential.
Factors that Influence Compensation
| ● | Individual Performance. All executives are evaluated against an annual performance plan. The performance plan is based on individual performance objectives that will further the goals of the executive’s business unit, if applicable, and the strategic goals of the Company. These objectives, which include both quantitative and qualitative goals, are reviewed and assessed periodically by the executive with the CEO and by the CEO with the Board. At the end of the fiscal year there is a comprehensive analysis of the executive’s actual performance vis-à-vis the individual’s performance plan, and that analysis is provided to the Committee for review. |
Variable Compensation and Promotion of a Long-Term Perspective
Variable Compensation and Promotion of a Long-Term Perspective We increase the variable component of compensation for our executives as they progress through our management levels and adjust the ratio of short-term to long-term compensation to promote accountability and a long-term perspective. We structure our executive compensation program so that the proportion of variable versus fixed compensation increases as the role and responsibility of the executive increases. We believe this is appropriate because the executives are best positioned to be able to affect the Company’s performance. Therefore, they should receive a substantial portion of their total compensation value in the form of long-term incentives that measure and reward Kennametal’s performance over a period of greater than one year. The table below illustrates that the actual percentage of variable pay relative to total compensation depends on the executive’s position within the Company. In general, the higher the executive’s position within the Company, the greater the proportion of variable pay that is linked to Company performance and stock price. Similarly, as the executive rises to positions of greater responsibility within our Company, short-term compensation begins to decrease proportionately relative to long-term compensation which, in most cases, begins to represent a greater proportion of the executive’s total compensation. Accordingly, the decision to emphasize variable elements for these individuals results in a reduced emphasis on fixed elements of compensation. In some cases, the variances between short-term and long-term compensation may be related to the length of tenure in the position or initial compensation package provided upon hiring. The following table summarizes the breakout of fixed annualized salary versus target variable compensation and target variable short-term versus target variable long-term compensation for our NEOs at the end of Fiscal 2025 based on the target total direct compensation structure of their roles, except for Mr. Cardenas as explained in the footnote.
Variable Compensation and Promotion of a Long-Term Perspective
| | Fixed vs. Target Variable Breakout | | Target Variable Breakout | | | | % of Annual | % of Annual | | | | | Target Total | Target Total | | | | | Direct | Direct | % Short- | % Long- | | | Compensation | Compensation | Term | Term | | Title | Fixed | Variable | Compensation | Compensation | | Mr. Chowbey President and CEO | 16% | 84% | 21% | 79% | | Vice President and Chief Financial Officer | 30% | 70% | 32% | 68% | | Vice President and President, Metal Cutting | 33% | 67% | 38% | 62% | | Vice President and President, Infrastructure Segment | 33% | 67% | 38% | 62% | | Vice President, Secretary and General Counsel | 32% | 68% | 29% | 71% | | Former Vice President and President, Infrastructure Segment (1) | 28% | 72% | 30% | 70% |
Variable Compensation and Promotion of a Long-Term Perspective
| (1) Mr. Cardenas’ percentages reflect his target total direct compensation structure on his last day as an employee of the Company. |
Variable Compensation and Promotion of a Long-Term Perspective
Competitive Compensation
Pay Positioning Relative to Market — Benchmarking
Pay Positioning Relative to Market — Benchmarking When we make compensation decisions, we compare the compensation paid to our executive officers to the compensation paid to similarly positioned executives at other companies within our industry or general manufacturing to gain a general understanding of current market compensation practices for these positions. Specifically, we benchmark total compensation levels and certain of the individual elements of our compensation packages (mainly base salary, AIP (together, “total cash compensation”) and long-term incentives (together with total cash compensation, “total direct compensation”)) to both published survey data of comparable companies and to a custom peer group of public companies within the manufacturing industry. Benchmark data is part of the external information we consider when designing and executing our compensation programs. The Committee’s independent compensation consultant assists the Committee in its benchmarking efforts, by collecting compensation data for our peer group companies from the most recently available annual proxy statement for each company. Pay Governance can also provide survey data representing industry-specific and general industrial companies included in the Willis Towers Watson Executive Compensation Database. In consultation with management, the consultant provides the Committee with the results of its benchmarking efforts on an annual basis. The benchmarking data helps us assess the competitiveness of our executives’ compensation compared to that of other executives at our peer companies and in the broader market. We also use the data to help ensure proper alignment between executive and shareowner interests, and to assess compensation versus Company performance. When we evaluate our compensation structure, we compare the target range for total direct compensation, the mix of compensation components and the allocation of those components in our executives’ individual compensation packages against benchmark data. Each year we evaluate the target total cash compensation and target total direct compensation we provide to our executives against the benchmark data to determine whether our compensation structure accurately reflects our goal of providing compensation at approximately the median level within our peer group and industry. The Committee considers this information, along with data provided by the consultant, the Company and individual performance factors, when it sets compensation levels. Pay Governance annually reviews our peer group to ensure that the peer companies continue to be appropriate comparisons for performance purposes and for compensation purposes. The companies in our current peer group are included based on their alignment with the following selection criteria: comparable annual revenue, market capitalization, operational scope and organizational complexity. While some of the peers are smaller than we are, others are larger. Nevertheless, we include these companies to help us understand the effect size and complexity have on compensation levels and designs. In Fiscal 2025, based on a comprehensive review and evaluation by Pay Governance, our peer group was updated for more appropriate comparisons based on revenue and market capitalization. Three companies with revenues greater than $4 billion were removed: The Timken Company, Flowserve Corporation, and Lincoln Electric Holdings, Inc. Three companies with revenues and market capitalization lower than Kennametal Inc.’s were added: The Manitowoc Company, Inc., Astec Industries, Inc., and Columbus McKinnon Corporation. As a result, effective February 2025, the following 20 companies comprised our peer group for compensation purposes:
Pay Positioning Relative to Market — Benchmarking
| The Manitowoc Company, Inc. | Astec Industries, Inc. | | Columbus McKinnon Corporation | Crane Company | | ITT Inc. | Woodward, Inc. | | Curtiss-Wright Corporation | ESAB Corporation | | Carpenter Technology Corporation | Nordson Corporation | | Simpson Manufacturing Co., Inc. | Graco Inc. | | Franklin Electric Co., Inc. | Watts Water Technologies, Inc. | | SPX Technologies, Inc. | Alamo Group Inc. | | Zurn Elkay Water Solutions Corporation | Barnes Group Inc. | | Mueller Water Products, Inc. | Enpro Inc. |
Role of the Compensation Consultant
Role of the Compensation Consultant Pay Governance has been engaged by and serves as the Committee’s independent compensation consultant and provides no other services to the Company, outside of advising on compensation matters. The Committee annually reviews its retention of Pay Governance as its compensation consultant, as well as its performance in advising the Committee. Pay Governance provides the Committee with the objective information and expertise necessary to make informed decisions that are in the best long-term interests of our business and shareowners and also keeps the Committee informed as to compensation trends and regulatory developments affecting public companies in general and the manufacturing industry in particular. The Committee solicits advice and counsel from its consultant on all matters related to executive compensation design and delivery. Specifically, the compensation consultant is requested to provide, and delivers, the following types of services to the Committee:
Role of the Compensation Consultant
| ● | Competitive data and benchmarking analytics for all components of pay for executive officers (including the CEO); |
Role of the Compensation Consultant
| ● | Equity dilution, value sharing, and performance assessment analyses relative to peers; |
Role of the Compensation Consultant
| ● | Compensation program analysis, redesign considerations, and recommendations; |
Role of the Compensation Consultant
| ● | Diagnostic assessments regarding the rigor of performance goals; |
Role of the Compensation Consultant
| ● | Tax, accounting, regulatory, and other compensation-related education; |
Role of the Compensation Consultant
| ● | Individual pay considerations for the CEO, as well as executive officer promotions and new hires; |
Role of the Compensation Consultant
| ● | Competitive analysis of pay for other senior leaders; |
Role of the Compensation Consultant
| ● | Review of compensation plan payouts for the CEO and executive officers; |
Role of the Compensation Consultant
| ● | Assessment of risk regarding compensation policies and practices; |
Role of the Compensation Consultant
| ● | Assessment of pay-for-performance alignment; and |
Role of the Compensation Consultant
| ● | CD&A review and recommendations. |
Role of the Compensation Consultant
Pay Governance attends each of the Committee meetings and attends executive sessions at the request of the Committee. The compensation consultant also collaborates with our management team for purposes of meeting planning, program design and analysis and other logistics, but all executive compensation-related services performed by the consultants are at the direction of the Committee. The Committee reviews the fees and performance of Pay Governance each year and provides feedback to the consultant as necessary and provides a full report of its review to the Board. The Committee has the authority to terminate the relationship with Pay Governance at any point in time. Each year, the Committee reviews and determines the independence of its compensation consultant. When gauging the independence of an adviser, the Committee considers the following six factors, as required by the New York Stock Exchange and SEC rules and regulations:
Role of the Compensation Consultant
| ● | If the adviser’s firm provides other services to the Company; |
Role of the Compensation Consultant
| ● | The amount of fees received from the Company as a percentage of the total revenue of the adviser’s firm; |
Role of the Compensation Consultant
| ● | Policies and procedures of the adviser’s firm designed to prevent conflicts of interest; |
Role of the Compensation Consultant
| ● | Any business or personal relationship of the compensation consultant, counsel or other adviser with members of the compensation committee; |
Role of the Compensation Consultant
| ● | Company stock owned by the adviser; and |
Role of the Compensation Consultant
| ● | Any business or personal relationship between the adviser or the adviser’s firm and an executive officer of the Company. |
Role of the Compensation Consultant
Based on the Committee’s review of the factors above, it determined that its adviser, Pay Governance, is independent and free of conflicts of interest.
AIP
AIP Overview. The AIP is a formula-based, pay-for-performance annual cash incentive plan. The AIP is the main vehicle we use to reward participants for their contributions to strong annual business performance. The purpose of the AIP is to motivate participants to help the Company to achieve pre-established shorter-term financial and strategic goals, which are designed to create sustainable long-term shareowner value, and to reward participants to the extent the Company achieves those goals. All executives, senior management team members, and other team members participate in the AIP. AIP Target Amounts. AIP target amounts are established for tenured executives based on a combination of individual factors and market-competitive data for similar jobs at other companies and are established as a percentage of base salary. Consistent with our executive compensation philosophy, individuals with greater job responsibilities have a greater proportion of their total cash compensation tied to Company performance through the AIP. Each year, the Committee sets AIP target amounts for our CEO and other executives based on recommendations from our management and the CEO (except with respect to his own target AIP) and its own evaluation of the competitiveness of each executive’s compensation package based on input from its compensation consultant. AIP Performance Goals. We link AIP opportunities directly with Company performance to maximize shareowner value. The Board approves the goals for overall Company performance based upon management’s financial and strategic plans. The Committee has the responsibility to review and approve the AIP design. Individual Performance. Although the Committee reviews and approves the individual performance goals of the CEO, and the CEO has the responsibility to establish individual goals for the NEOs, the Fiscal 2025 AIP design did not have an individual component. However, the Committee has the discretion to adjust an executive’s calculated AIP award based on its assessment of the individual’s performance. The Committee did not adjust the calculated AIP award for any of our NEOs. 2025 AIP. For all NEOs, the performance period for Kennametal PWCPS was increased to twelve months from two six-month performance periods, and the Segment Presidents had their weighting of Segment Adjusted EBIT reduced from 25% to 15% with a corresponding increase in Kennametal Adjusted EBITDA to 35% from 25%.
AIP
| Metrics | Goal Setting | CEO and Corporate ELT (1) | Segment Presidents (1) | | Kennametal Revenue | 6-months | 20% | – | | Kennametal Adjusted EBITDA | 6-months | 50% | 35% | | Kennametal PWCPS | Annual | 30% | 30% | | Segment Revenue | 6-months | – | 20% | | Segment Adjusted EBIT | 6-months | – | 15% | | Kennametal ESG Goals | Annual | Modifier +/- 10% | Modifier +/- 10% |
AIP
Mr. Hamadi had a blend of Corporate (first half of the fiscal year) and Infrastructure Segment (second half of the fiscal year) metrics and goals. The Committee and management believe the use of Revenue and Segment Revenue will help to focus team members on increasing market share, customer service, and proper pricing of products. Adjusted EBITDA, Adjusted EBIT and PWCPS will help to focus team members on the successful execution of the simplification/modernization of manufacturing efforts at the Company. Performance goals for Revenue, Segment Revenue, Adjusted EBITDA and Adjusted EBIT were set by the Committee for the two six-month increment periods of July 1, 2024 through December 31, 2024 and January 1, 2025 through June 30, 2025. The rationale for maintaining financial performance goals on a half-year basis was to better align the goal setting process to the cyclicality and volatility of the Company’s industry and its rapid impact on the Company’s operational and financial results. The Committee was concerned that establishing full-year financial performance goals could result in a plan that was either too challenging or not challenging enough given the timing of our fiscal year in relation to a number of factors including persistent higher inflation, the U.S. presential election outcome uncertainty and its potential impact on global trade, the protracted Eastern European conflict, and increasing tensions among the G-7 countries and China. PWCPS performance goals were set by the Committee on an annual basis to reflect lower volatility compared to revenue and profit performance. ESG annual goals were established as part of the Fiscal 2025 AIP consisting of three culture goals and one safety goal for NEOs. Culture focused on: (i) improvement in the number of women in professional roles globally, (ii) global employee engagement survey results focused on belonging, and (iii) employee engagement survey results for ethnically diverse employees within the United States focused on belonging. The safety goal focused on fatal and serious incidents (“FSI”) risks identified (along with mitigation action plans in place within 24 hours to address the identified risks) across 38 manufacturing locations. Payout calculations for the ESG component are calculated based upon the number of the goals achieved as shown in the tables below.
AIP
| Number of ESG Goals Achieved | % Modifications | Effect on Overall AIP Payout | | 0 or 1 of 4 | 90% | 10% decrease | | 2 of 4 | 95% | 5% decrease | | 3 of 4 | 100% | No effect | | 4 of 4 | 110% | 10% increase |
AIP
2025 Target AIP Amounts. For 2025, the Committee approved target AIP amounts as a percentage of base salary for our NEOs at the following levels:
AIP
| Name | Target Annual Incentive Amount as a Percentage of Base Salary(1) | | Sanjay Chowbey | 110% | | Patrick Watson | 75% | | Dave Bersaglini | 75% | | Faisal Hamadi | 55% and 75% (1) | | Michelle Keating | 60% | | Franklin Cardenas | 75% (2) |
AIP
| (1) Reflects Mr. Hamadi’s AIP target as Vice President, Business Systems Office for the first half of the fiscal year and his AIP target as President, Infrastructure Segment for the second half of the fiscal year. |
AIP
| (2) Reflects Mr. Cardenas’ AIP target on his last day as an employee of the Company. |
AIP
The following tables present the possible payouts under the AIP at various levels of performance relative to the target performance goals established for the year: 2025 Corporate Financial Performance Metrics.
AIP
| | Performance Range as a Percentage of Target | | | | | Kennametal Metric | Below Threshold | Threshold | Target | Maximum | | Revenue (Corporate and Segment) | Less than 92% | 92% | 100% | 108% | | Corporate Adjusted EBITDA | Less than 75% | 75% | 100% | 125% | | Corporate PWCPS | More than 110% | 110% | 100% | 90% | | Metal Cutting Segment Adjusted EBIT | Less than 56% | 56% | 100% | 144% | | Infrastructure Segment Adjusted EBIT | Less than 60% | 60% | 100% | 140% | | Payout Range | 0% | 50% | 100% | 200% |
AIP
With respect to each of the financial performance metrics, no AIP is awarded with respect to the particular metric if actual performance is below the threshold for the performance goal and no payout is made in excess of 200% of the AIP target amount, regardless of the performance achieved. Under the terms of the AIP, the Committee makes the same adjustments that are made for non-recurring or unusual items in our financial results as reported to our shareowners in determining whether performance goals have been met. 2025 Financial Performance Goals. At the July 2024 meeting, the Board approved the following target Financial Performance Goals for the Company for the July 1, 2024 through December 31, 2024 performance period: Corporate Revenue of $1,010 million, Corporate Adjusted EBITDA of $151 million, Metal Cutting Revenue of $634 million, Infrastructure Revenue of $376 million, Metal Cutting Adjusted EBIT of $63 million and Infrastructure Adjusted EBIT of $30 million, which reflected the Company’s business plan for the first half of Fiscal 2024. The Board also approved a Corporate PWCPS Financial Performance Goal of 29.9% for the July 1, 2024 through June 30, 2025 performance period. At the January 2025 meeting, the Board established the following target Financial Performance Goals for the Company for the January 1, 2025 through June 30, 2025 performance period: Corporate Revenue of $1,086 million, Corporate Adjusted EBITDA of $199 million, Metal Cutting Revenue of $683 million, Infrastructure Revenue of $405 million, Metal Cutting Adjusted EBIT of $96 million, and Infrastructure Adjusted EBIT of $40 million. At the time it set these respective goals, the Board considered the targets to be challenging for the Company, but achievable if the financial and strategic plans of the Company were well executed. These Financial Performance Goals were then adopted by the Committee as the target Financial Performance Goals under the Fiscal 2025 AIP. 2025 Corporate ESG Performance Goals. At the July 2024 meeting, the Board approved Corporate ESG Performance Goals with the following desired outcomes for the Company for the July 1, 2024 through June 30, 2025, performance period: (i) the number of women in professional roles globally to be ≥ 18%, (ii) belonging score for all employees to be ≥ 72, (iii) belonging score for ethnically diverse employees within the United States to be ≥ 68, and (iv) average > 1.75 per month FSI risk identified across 38 global manufacturing locations. The Committee also retains the discretion to reduce payments for safety risks and occurrences and ESG issues even if the performance goals are achieved. 2025 Financial Performance. The following tables show the financial performance achieved (as a percentage of target) and the amount of 2024 AIP awards paid to each of our NEOs
AIP
| First Half FY 2025 AIP Financial Performance Measures Achievements | | | | | | | | | | | | Weighting (1) | Threshold | | Target | Maximum | | Actual | | | | | | | | | | | | | Payout % | | | | | % of | | | % of | | % of | of | | Kennametal Financial Performance Measures | | $ / % | Target | $ / % | $ / % | Target | $ / % | Target(2) | Target | | Corporate Revenue (millions) | 10% | $929 | 92% | $1,010 | $1,091 | 108% | $961.847 | 95.2% | 70.3% | | Corporate Adjusted EBITDA (millions) | 25% & 17.5% | $113 | 75% | $151 | $189 | 125% | $138.191 | 91.5% | 83.1% | | Corporate PWCPS(3) | 30% | 32.9% | 110% | 29.9% | 26.9% | 90% | 31.7% | 106.0% | 70.0% | | Metal Cutting Revenue (millions) | 10% | $583 | 92% | $634 | $685 | 108% | $594.448 | 93.8% | 61.2% | | Metal Cutting Adjusted EBIT (millions) | 7.5% | $35 | 56% | $63 | $91 | 144% | $42.717 | 67.8% | 63.8% | | Infrastructure Revenue (millions) | 10% | $346 | 92% | $376 | $406 | 108% | $367.399 | 97.7% | 85.7% | | Infrastructure Adjusted EBIT (millions) | 7.5% | $18 | 60% | $30 | $42.0 | 140% | $31.458 | 104.9% | 112.2% |
AIP
| Second Half FY 2025 AIP Financial Performance Measures Achievements | | | | | | | | | | | | Weighting (1) | Threshold | | Target | Maximum | | Actual | | | | | | | | | | | | | Payout % | | | | | % of | | | % of | | % of | of | | Kennametal Financial Performance Measures | | $ / % | Target | $ / % | $ / % | Target | $ / % | Target | Target | | Corporate Revenue (millions) | 10% | $999 | 92% | $1,086 | $1,173 | 108% | $1,010.496 | 93.0% | 56.6% | | Corporate Adjusted EBITDA (millions) | 25% and 17.5% | $149 | 75% | $199 | $249 | 125% | $161.616 | 81.2% | 62.6% | | Metal Cutting Revenue (millions) | 10% | $628 | 92% | $683 | $738 | 108% | $631.187 | 92.4% | 52.9% | | Metal Cutting Adjusted EBIT (millions) | 7.5% | $54 | 56% | $96 | $138 | 144% | $58.215 | 60.6% | 55.0% | | Infrastructure Revenue (millions) | 10% | $373 | 92% | $405 | $437 | 108% | $379.309 | 93.7% | 59.9% | | Infrastructure Adjusted EBIT (millions) | 7.5% | $24.0 | 60% | $40 | $56.0 | 140% | $42.578 | 106.4% | 116.1% |
AIP
| (1) The weighting for Corporate Adjusted EBITDA is 25% for Corporate participants and 17.5% for Segment participants. |
AIP
| (2) For the PWCPS performance measure, actual achievement that is lower than the pre-established target is favorable and results in a higher payout above target for participants. |
AIP
| (3) Corporate PWCPS is an annual goal with a twelve-month performance period. |
AIP
2025 ESG Performance (+/- 10% modifier), measuring improvement in inclusion and risk identification in safety metric:
AIP
| Metrics | Goals | Actual Achievement | | The number of women in professional roles globally | ≥ 18.0% | 17.9% | | Belonging score for all employees globally | ≥ 72 | 70 | | Belonging score for ethnically diverse employees within the United States | ≥ 68 | 66 | | Average FSI risk identified per month across 38 manufacturing locations | ≥ 1.75 | 3.14 |
AIP
Actual achievement of one of four ESG goals resulted in a 90% modifier applied to the full fiscal year calculation of financial performance for NEOs, or a 10% reduction in AIP payouts for the NEOs. Based on the actual performance in the tables above for the financial and ESG metrics the fiscal year total payout as a percent of target for Fiscal 2025 is as follows: 63.2% for Corporate NEOs; 59.2% for the President, Metal Cutting Segment (Mr. Bersaglini, and reflects his proration for time in performance periods); 66.7% for the President, Infrastructure Segment (Mr. Hamadi, and reflects his time in both Corporate and Segment roles) and 70.5% for the former President, Infrastructure Segment.
AIP
| | Actual FY 2025 AIP Earned | | | | | | | Total as a % | | | | | of Fiscal | | | FY 2025 AIP Opportunities | Total with | Year End | | | as a % of Base Salary | ESG Modifier | Base Salary | | Name and Principal Position | Target | | | | Sanjay Chowbey | 110% | $643,060 | 69.5% | | Patrick Watson | 75% | $248,850 | 47.4% | | Dave Bersaglini | 75% | $192,471 | 37.0% | | Faisal Hamadi (1) | 75% | $179,556 | 42.2% | | Michelle Keating | 60% | $162,544 | 37.9% | | Franklin Cardenas (2) | 75% | $242,638 | 52.9% |
AIP
| (1) Reflects Mr. Hamadi’s AIP target at the end of the fiscal year in his role as President, Infrastructure Segment. |
AIP
| (1) Mr. Cardenas’ AIP payout was for the full twelve months of the fiscal year. |
Long-Term Incentives
Long-Term Incentives Overview. Kennametal’s long-term incentives are designed to focus our employees on sustainable, long-term performance. We use these incentives because we believe they promote an ownership culture, align the interests of our employees and shareowners, and foster the long-term perspective necessary to increase shareowner value. They also aid in retention and help advance stock ownership by our employees. All of our executives, members of senior management, and a sizable number of key employees are eligible to receive long-term incentive awards under our broad-based LTI program. We use a portfolio approach to our LTI program, which includes RSU awards and PSU awards. We provide more information about each of these components below. The Committee approves all equity-based and other long-term incentive awards for our executives. All the NEOs’ outstanding long-term incentive awards have been granted under shareowner approved plans, which provide for the granting of non-statutory and incentive stock options, incentive bonus awards, performance share awards, PSU awards, restricted stock awards, RSU awards, stock appreciation rights, share awards, stock unit awards, and other share-based awards. Target Long-Term Incentive Award Amounts. Each year the Committee grants equity-based awards for each of our executives based on the executive’s performance and career potential (individual factors). The Committee also considers the long-term compensation paid by our competitors for similar positions based on the peer group and survey data provided by its compensation consultant (external factors). The Committee sets target LTI program opportunities for our executives for the relevant three-year vesting cycle at its meeting following each fiscal year-end. Fiscal 2025 LTI Decisions. The following table shows the target long-term incentive value granted to each of our NEOs under our broad-based annual LTI program for Fiscal 2025.
Long-Term Incentives
| | Target Long-term Incentive Grant | Target Long-term Incentive Grant | | Name | as a % of Salary | Value for Fiscal 2025(1) | | Sanjay Chowbey | 416% | $3,850,000 | | Patrick Watson | 160% | $840,000 | | Dave Bersaglini (2) | 183% | $950,000 | | Faisal Hamadi (3) | 153% | $650,000 | | Michelle Keating | 150% | $642,973 | | Franklin Cardenas | 177% | $812,234 |
Long-Term Incentives
| (1) These values include the target value of all PSUs awarded during the fiscal year, which differs from the PSU values required under applicable disclosure rules in subsequent tables following the Committee Report. |
Long-Term Incentives
| (2) Includes RSUs with a grant date value of $300,000 related to Mr. Bersaglini’s sign-on award, which has a two-year cliff vesting schedule and is described below. |
Long-Term Incentives
| (3) Includes RSUs with a grant date value of $250,000 related to Mr. Hamadi’s sign-on award, which has a two-year cliff vesting schedule and is described below. |
Long-Term Incentives
Timing of Equity Grants. The Committee grants equity-based awards to our executives on both an annual and as determined basis. Currently we do not grant stock options or stock appreciation rights and only grant RSUs and PSUs. We do not have any program, plan or practice to time annual or ad hoc grants of equity-based awards in coordination with the release of material non-public information or otherwise. In addition, we do not grant stock options or stock appreciation rights during periods in which there is material nonpublic information about our Company, including at any time during the four business days prior to or the one business day following the filing of our periodic reports or the filing or furnishing of a Form 8-K that discloses material nonpublic information.
Long-Term Incentives
| ● | Annual Grants. We generally make LTI grants to our NEOs and other senior management on an annual basis. As part of its standing agenda, the Committee approves annual grants of equity-based awards to our executives at its regularly scheduled meeting in July of each year. The Committee has continued to refine its process for determining the date for the annual grant of equity awards, with the intent of insulating the choice of date from any market influences that might affect the decision at a given time. Accordingly, for Fiscal 2025, the Committee determined in advance that grants would be awarded on August 15, 2024, using the fair market value at the close of trading on August 15, 2024. Mr. Bersaglini’s annual award occurred on September 1, 2024 (using the closing price of August 30, 2024), as his start date was August 26, 2024. |
Long-Term Incentives
| ● | Special or One-Time Grants. The Committee retains the discretion to make additional awards to executives at other times relating to the initial hiring of a new officer, for recognition or retention purposes or otherwise. Messrs. Bersaglini and Hamadi received sign-on awards in Fiscal 2025. |
Long-Term Incentives
RSU Awards. Since 2010, we have granted restricted stock unit (“RSU”) awards as part of our LTI program. We grant RSU awards because we believe they build ownership in the Company, serve to promote the retention of our employees and address the cyclicality of our business, thereby aligning the interests of our employees and our shareowners. We typically grant RSU awards annually to our executives as part of our broader LTI program, but we sometimes make these grants for other purposes. For example, we may grant these awards to attract new talent or to recognize or motivate our employees. The majority of RSU awards granted under our annual broad-based LTI program vest at the rate of one-third per year over three years. We believe our use of RSU awards helps to promote our retention efforts in that any unvested portion of a RSU award is forfeited if an executive voluntarily terminates employment prior to the applicable vesting date, unless for specific qualified reasons outlined in the award agreements. The number of RSUs awarded to each NEO in Fiscal 2025 as part of their annual award was determined by dividing 40% of the total LTI opportunity grant value by the closing price of our stock on the grant date. PSU Awards. PSU awards are both performance-based and service-based, which can only be earned if the Company achieves certain threshold performance criteria established by the Committee and requires the executive to be employed by the Company through the vesting date anniversary following the close of the performance period. Performance metrics for PSUs granted in fiscal years 2023, 2024, and 2025 are shown below.
Long-Term Incentives
| Fiscal Year | Metrics | Weighting | Performance Period | Goals Established | | Fiscal 2023 “2023 PSUs” | Adjusted ROIC | 66.66% | 3 one-year periods | July of each fiscal year for each one-year period | | | Average Adjusted EBITDA Margin | 33.34% | Three-year period | July 2022 | | Fiscal 2024 “2024 PSUs” | Adjusted ROIC | 66.66% | 3 one-year periods | July of each fiscal year for each one-year period | | | Average Adjusted EBITDA Margin | 33.34% | Three-year period | July 2023 | | Fiscal 2025 “2025 PSUs” | Adjusted ROIC | 66.66% | 3 one-year periods | July of each fiscal year for each one-year period | | | Average Adjusted EBITDA Margin | 33.34% | Three-year period | July 2024 |
Long-Term Incentives
For the 2023, 2024, and 2025 PSUs, 66.66% of the PSUs were weighted based on Adjusted ROIC performance and 33.34% were weighted based on Average Adjusted EBITDA Margin, with the Average Adjusted EBITDA Margin applied at the end of the three-year performance period. Adjusted ROIC goals have been established at threshold, target and maximum award levels for each year within the applicable performance period. The Committee has established this approach to goal setting to address the cyclicality of our industry and to partially mitigate the risk of establishing long-term performance goals at either the peak or trough of the business cycle. In addition, the service condition encourages retention. For Fiscal 2025 only one-third of the Fiscal 2023, Fiscal 2024, and Fiscal 2025 PSU awards tied to Adjusted ROIC will be reported in subsequent tables following the Committee Report under applicable disclosure rules, as financial targets for remaining tranches will be set near the beginning of each of the subsequent fiscal years. The remaining tranches will be reported as separate grants when the applicable Adjusted ROIC goals are established by the Committee. The number of target PSUs awarded to each NEO in Fiscal 2025 as part of their annual awards was determined by dividing 60% of the total LTI opportunity grant value by the closing price of our stock on the grant date with the opportunity to earn more or less than the target PSUs awarded as described below. The table below presents the Adjusted ROIC goals for the 2023 PSUs for Fiscal 2025 (which was the third year of the 2023 PSUs) and Adjusted EBITDA Margin three-year average goals. Any fiscal year performance below threshold ROIC results in no payment for that fiscal year’s tranche; any EBITDA Margin three-year average performance below threshold results in no payment for the three-year period.
Long-Term Incentives
| Adjusted ROIC Performance Level | | | Adjusted EBITDA Margin 3-year Average Goals (FY23-FY25) | | | | Maximum | Target | Threshold | Maximum | Target | Threshold | | 11.9% | 8.2% | 4.5% | 18.2% | 15.7% | 13.3% | | (200% payout) | (100%payout) | (50% payout) | (200% payout) | (100% payout) | (50% payout) | | 2023 PSU payable August 2025 | | | | | |
Long-Term Incentives
The table below presents the Adjusted ROIC goals for the 2024 PSUs for Fiscal 2025 (which was the second year of the 2024 PSUs) and Adjusted EBITDA Margin three-year average goals. Any fiscal year performance below threshold ROIC results in no payment for that fiscal year’s tranche; any EBITDA Margin three-year average performance below threshold results in no payment for the three-year period.
Long-Term Incentives
| Adjusted ROIC Performance Level | | | Adjusted EBITDA Margin 3-year Average Goals (FY24-FY26) | | | | Maximum | Target | Threshold | Maximum | Target | Threshold | | 11.9% | 8.2% | 4.5% | 18.5% | 16.8% | 14.3% | | (200% payout) | (100%payout) | (50% payout) | (200% payout) | (100% payout) | (50% payout) | | 2024 PSU payable August 2026 | | | | | |
Long-Term Incentives
The table below presents the Adjusted ROIC goals for the 2025 PSUs for Fiscal 2025 (which was the first year of the 2025 PSUs) and Adjusted EBITDA Margin three-year average goals. Any fiscal year performance below threshold ROIC results in no payment for that fiscal year’s tranche; any EBITDA Margin three-year average performance below threshold results in no payment for the three-year period.
Long-Term Incentives
| Adjusted ROIC Performance Level | | | Adjusted EBITDA Margin 3-year Average Goals (FY25-FY27) | | | | Maximum | Target | Threshold | Maximum | Target | Threshold | | 11.9% | 8.2% | 4.5% | 20.2% | 16.8% | 14.3% | | (200% payout) | (100%payout) | (50% payout) | (200% payout) | (100% payout) | (50% payout) | | 2025 PSU payable August 2027 | | | | | |
Long-Term Incentives
PSUs Earned for Fiscal 2025. At its July 2025 meeting, the Committee certified Fiscal 2025 Adjusted ROIC performance of 6.8%. This performance resulted in the following payout multiple (subject to continued service) for outstanding PSUs as follows:
Long-Term Incentives
| PSU Award | Tranche | 7.6% Adjusted ROIC Performance | Payout Multiple | | 2023 PSUs | 3 of 3 | Between threshold and target | 81.1% | | 2024 PSUs | 2 of 3 | Between threshold and target | 81.1% | | 2025 PSUs | 1 of 3 | Between threshold and target | 81.1% |
Long-Term Incentives
The Committee also certified Fiscal 2023 through Fiscal 2025 Adjusted EBITDA Margin three-year average performance of 15.3%, which was between threshold and target, which achieved performance at a 92.4% payout multiple of target over the three-year performance period. Overall, the 2023 PSUs vested as follows:
Long-Term Incentives
| Adjusted ROIC Tranche (2/3 Weighting) | Fiscal Year | Actual Adjusted ROIC Performance | Payout Multiple | | 1 | 2023 | 7.8% | 125.0% | | 2 | 2024 | 7.6% | 67.3% | | 3 | 2025 | 6.8% | 81.1% | | Adjusted EBITDA Margin 3-Year Average (1/3 Weighting) | Fiscal Year | Actual Adjusted EBITDA Margin Average Performance | Payout Multiple | | 1 Tranche | 2023 through 2025 | 15.3% | 92.4% |
Long-Term Incentives
The total number of PSUs that vested related to the 2023 PSUs was 91.5% of target (weighted 2/3 Adjusted ROIC and 1/3 Adjusted EBITDA Margin). The Company did not grant any Stock Option Awards in Fiscal 2025. The Stock Option Awards granted in prior years are disclosed in the compensation tables provided below.
Sign-On Awards
Sign-On Awards Both Messrs. Hamadi and Bersaglini joined the Company in Fiscal 2025 and had sign-on cash and equity-based awards that were not part of their ongoing compensation structure. Mr. Hamadi received a one-time RSU award with a grant date value of $250,000 that will cliff vest on the second anniversary of the grant date. Mr. Hamadi also received a one-time cash award of $50,000 with a clawback provision that would have required repayment within thirty days of his last day with the Company had he voluntarily resigned within twelve months of his start date. Mr. Bersaglini received an RSU award with a grant date value of $300,000 that will cliff vest on the second anniversary of the grant date. Mr. Bersaglini also received a long-term incentive award with a grant date value of $650,000 (comprised of 40% RSUs and 60% PSUs) with the same vesting criteria as the other NEOs who received long-term incentive awards on August 15, 2024, which is described in detail in the Long-Term Incentives section of the Compensation Discussion & Analysis. Mr. Bersaglini also received a one-time cash award of $125,000 with the same clawback provision as Mr. Hamadi described above.
Changes to 2026 AIP
Changes to 2026 AIP Three changes were made to the Fiscal 2026 AIP. The +/- 10% ESG modifier was removed. Corporate PWCPS was reduced to 20% (from 30%), and a nonfinancial component was added at a 10% weighting (comprised of both enterprise FSI and individual performance rating goals). Also, for the Segment Presidents, Corporate Adjusted EBITDA was reduced to 25% (from 35%), and both Segment Revenue and Segment Adjusted EBIT weightings were increased 5% each (to 25% and 20%, respectively) to increase their focus on Segment top-line revenue growth and corresponding Segment profitability.
Changes to 2026 LTI Program
Changes to 2026 LTI Program The Fiscal 2026 long-term incentive program reduced the weighting on Adjusted ROIC and increased the weighting on three-year average Adjusted EBITDA Margin so that each metric is balanced at a 50% weighting. The following table shows the target long-term incentive grant value set for each of our NEOs under our LTI program for Fiscal 2026:
Changes to 2026 LTI Program
| | Long-term | | | Incentive | | | Grant Value for | | Name | Fiscal 2026 | | Sanjay Chowbey | $4,000,000 | | Patrick Watson | $1,000,388 | | Dave Bersaglini | $719,550 | | Faisal Hamadi | $588,094 | | Michelle Keating | $630,000 |
Employment Agreements
Employment Agreements We have employment agreements with all executive officers. The employment agreement with Mr. Cardenas terminated upon his departure, subject to any remaining covenants. We have summarized the material terms of these agreements below. General. The agreements require our executives to devote their entire time and attention to the business and affairs of Kennametal while they are employed. Term. There is no predetermined term. Each executive entered into the agreement upon commencing duties as an executive officer of the Company. Compensation. Except as noted below, the executive officer’s base salary, AIP opportunity, if any, and any other compensation for services are not specified under the agreements but rather are determined by the Committee upon the commencement of employment and assignment of the executive to a salary band. Thereafter, the Committee makes determinations regarding base salary, incentive awards, and all other components of compensation as described in this CD&A section. Non-competition/Non-disclosure. Unless the Company provides prior consent in writing, if an executive officer decides to voluntarily terminate his or her employment or the Company terminates the executive’s employment for cause, then for two or three years after the date of termination (depending on the executive), the executive cannot, in any geographic area in which the Company is offering its services and products: (a) directly or indirectly engage in; (b) assist or have an active interest in; or (c) enter the employ of, or act as agent for, or advisor or consultant to, any entity which is or is about to become directly or indirectly engaged in any business that is competitive with any business of the Company or any of our subsidiaries or affiliates in which the executive is or was engaged. Messrs. Watson, Bersaglini and Hamadi and Ms. Keating are subject to a one-year non-competition provision if terminated by the Company without cause, as was Mr. Cardenas upon his departure. Under the terms of his employment agreement Mr. Chowbey is subject to a two-year non-competition provision if terminated by the Company without cause. However, in case of termination for any reason, the executive cannot disclose any of our confidential or trade secret information. Assignment of Inventions. Each executive officer must assign to us all inventions conceived or made during his or her employment with the Company. Employment Termination. The executive officer’s employment may be terminated by either party at any time, for any reason or no reason at all; provided that the Company may only terminate an executive officer’s employment with the approval and authorization of the Board. Severance. If, with Board authorization, we involuntarily terminate an executive officer’s employment prior to a change in control and not for cause (and the executive has been employed by the company for a minimum of 2 years), the executive is entitled to 12 months of severance in the form of salary continuation, except for our CEO, Mr. Chowbey, who is entitled to 24 months of severance in the form of salary continuation. Mr. Cardenas’ employment agreement also included the 12- month severance term. Our executive officers are not entitled to severance under any other termination scenario outside of a change in control context as described below. Change in Control. Under certain circumstances, the agreements provide for payments to an executive officer if his employment is terminated after a change of control. See “Termination Conditions and Arrangements” below and the “Potential Payments upon Termination or Change in Control” section of this Proxy Statement for a more detailed discussion. No partial excise tax gross-up in agreements. Our executive officer employment agreements do not provide for any partial excise tax gross-up.
Termination Conditions and Arrangements
Termination Conditions and Arrangements In a non-change in control context, our executive employment agreements provide for severance if the executive’s employment is terminated by us without “cause.” Additional details regarding the severance provisions and potential payments to our NEOs outside of a change in control context can be found in the “Potential Payments upon Termination or Change in Control” section. Our executive employment agreements, stock and incentive plans and certain of our retirement and post-employment plans contain change in control provisions. The change in control provisions in the executive employment agreements are applicable only for those executives that have entered into these agreements, which includes each of our NEOs. The provisions of our incentive plans and retirement plans are applicable to a broader base of our employees and include all those who participate in those plans. We include these provisions because we believe they help to align executive, Company, and shareowner interests. If we evaluate a possible transaction, we want our management to focus on the potential fit with our corporate goals and strategy and the creation of long-term value for our shareowners. We believe that change in control protections enable our management to consider corporate transactions objectively and to decide whether they are in the best interests of the Company and its shareowners without undue concern over whether the transactions may jeopardize future employment. The change in control protections under our executive employment agreements only provide payments upon the occurrence of a “double trigger,” rather than on the single occurrence of a change in control when the executive has not experienced a separation from service. For severance benefits to be “triggered,” a change in control must take place and an executive must be involuntarily terminated by us (other than for “cause” or Disability (as defined in the employment agreements)) or must voluntarily leave for “good reason” within 6 months prior to or 24 months following the change in control in the case of Messrs. Chowbey, Watson, Bersaglini and Hamadi, and Ms. Keating, and including Mr. Cardenas prior to his departure. For additional information concerning the change in control arrangements for our NEOs, see the “Potential Payments upon Termination or Change in Control” section of this Proxy Statement.
Recoupment of Awards and Incentive Payments
Recoupment of Awards and Incentive Payments In any case where there has been an allegation of fraud or misconduct, the Board of Directors would investigate and carefully review the facts and circumstances of the alleged misconduct before determining the appropriate course of action. If, after completing its investigation, the Board were to determine that an employee or officer did engage in fraudulent behavior or misconduct, the Board would take appropriate action, which could include, among other things, termination of employment, institution of legal proceedings against the wrongdoer, or bringing the misconduct to the attention of the proper authorities. If the misconduct results in a material restatement of the Company’s financial results, then the Board, in addition to the above remedies, may also seek repayment of any bonus received for the period restated, seek repayment of gains realized because of exercising stock options awarded for the period restated, or cancel any outstanding stock options or other equity or incentive compensation. Pursuant to a new rule adopted by the Securities and Exchange Commission in October 2022, we adopted a clawback policy in Fiscal 2024 to reflect the requirements of the new mandatory recoupment rule issued by the New York Stock Exchange. The Company also incorporates restrictive covenants (prohibiting working for competitors for a period following separation from employment and disclosure of confidential or proprietary information) into the executive employment agreements. If the Board of Directors determines that a violation of any one of these covenants has occurred, it may, in its discretion, discontinue any future payments and/or take appropriate legal action to recoup the amounts paid under these programs.
Tools and Analytics
| ● | Realizable pay-for-performance and value sharing assessments versus our peer group; |
Tools and Analytics
| ● | Equity expense comparisons versus our peer group; |
Tools and Analytics
| ● | Annual and long-term incentive plan performance and progress updates; |
Compensation and Human Capital Committee Report
| ● | The AIP is based on balanced performance metrics that promote disciplined progress towards longer-term Company goals; |
Compensation and Human Capital Committee Report
| ● | We do not offer significant short-term incentives that might drive high-risk investments at the expense of long-term Company and shareowner value; |
Compensation and Human Capital Committee Report
| ● | At the senior management and executive levels, our compensation programs are weighted towards offering long-term incentives that reward sustainable long-term performance, especially when considering our share ownership guidelines and vesting requirements; and |
Executive Compensation Tables
| (b) This column includes our contributions on behalf of the NEOs under the TPP. Please see “2025 Nonqualified Deferred Compensation and Retirement Programs” for more details about the TPP. |
2025 Grants of Plan-Based Awards
2025 Grants of Plan-Based Awards
2025 Grants of Plan-Based Awards
| | | | | | | | | All Other | All Other | | Grant | | | | | | | | | | Stock | Option | | Date | | | | | | | | | | Awards: | Awards: | Exercise | Fair Value | | | | Estimated Future Payouts | | | Estimated Future Payouts | | | Number of | Number of | or Base | of | | | | Under Non-Equity | | | Under Equity Incentive | | | Shares of | Securities | Price of | Stock and | | | | Incentive Plan Awards(2) | | | Plan Awards(3) | | | Stock or | Underlying | Option | Option | | | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | Units(4) | Option | Awards | Awards(5) | | Name | Date(1) | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/Sh) | ($) | | Sanjay Chowbey | | 457,875 | 1,017,500 | 2,238,500 | | | | | | | | | | 7/29/2024 | | | | 4,492 | 8,983 | 17,966 | | | | 229,516 | | | 8/15/2024 | | | | | | | 61,600 | | | 1,540,000 | | | 8/15/2024 | | | | 25,669 | 51,337 | 102,674 | | | | 1,283,425 | | Patrick Watson | | 177,188 | 393,750 | 866,250 | | | | | | | | | | 7/29/2024 | | | | 2,548 | 5,095 | 16,578 | | | | 130,177 | | | 8/15/2024 | | | | | | | 13,440 | | | 336,000 | | | 8/15/2024 | | | | 5,600 | 11,200 | 22,400 | | | | 280,000 | | Dave Bersaglini | | 146,250 | 325,000 | 715,000 | | | | | | | | | | 9/1/2024 | | | | | | | 11,596 | | | 299,989 | | | 9/1/2024 | | | | | | | 10,050 | | | 259,994 | | | 9/1/2024 | | | | 4,188 | 8,376 | 16,752 | | | | 216,687 | | Faisal Hamadi | | 121,219 | 269,375 | 592,625 | | | | | | | | | | 8/1/2024 | | | | | | | 9,917 | | | 250,008 | | | 8/15/2024 | | | | | | | 6,400 | | | 160,000 | | | 8/15/2024 | | | | 2,667 | 5,334 | 10,668 | | | | 133,350 | | Michelle Keating | | 115,735 | 257,189 | 565,816 | | | | | | | | | | 7/29/2024 | | | | 2,684 | 5,367 | 10,734 | | | | 137,127 | | | 8/15/2024 | | | | | | | 10,288 | | | 257,200 | | | 8/15/2024 | | | | 4,287 | 8,573 | 17,146 | | | | 214,325 | | Franklin Cardenas | | 154,875 | 344,167 | 757,167 | | | | | | | | | | 7/29/2024 | | | | 4,145 | 8,289 | 16,578 | | | | 211,784 | | | 8/15/2024 | | | | | | | 12,996 | | | 324,900 | | | 8/15/2024 | | | | 5,415 | 10,830 | 21,660 | | | | 270,750 |
2025 Grants of Plan-Based Awards
Notes and Supplemental Tables to the 2025 Grants of Plan-Based Awards Table
2025 Grants of Plan-Based Awards
| (1) The PSUs granted on 7/29/2024, originally approved by the Committee on 8/9/2023, represent the second tranche of the Fiscal 2024 PSUs and the third tranche of the Fiscal 2023 PSUs tied to Adjusted ROIC one-year goals established by the Board of Directors for Fiscal 2024 on 7/29/2024. The PSUs granted on 8/15/2024, as approved by the Committee on 8/9/2023, represents the first tranche of the Fiscal 2025 PSUs tied to Adjusted ROIC one-year goals for Fiscal 2025 and Adjusted EBITDA Margin three-year goals for Fiscal 2025 through Fiscal 2027, which were established by the Board of Directors on 7/29/2024. |
2025 Grants of Plan-Based Awards
| (2) These columns reflect the possible payouts under the AIP, which is described more fully in the “AIP” section of the CD&A. The amounts presented in these columns reflect the amounts that could have been earned for 2025 based upon the level of achievement of the performance goals underlying such awards. Actual AIP earned for 2025 are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. |
2025 Grants of Plan-Based Awards
| (3) The amounts presented in these columns reflect the number of shares of our capital stock which could be earned over the course of the applicable performance period based upon the level of achievement of the performance goals underlying such awards. A description of our PSUs is set forth in the “Long-Term Incentives” section of the CD&A. |
2025 Grants of Plan-Based Awards
| (4) This column reflects the number of RSUs awarded to the NEOs in August 2024, excepting Mr. Bersaglini, who was awarded RSUs in September 2024. A description of our RSUs is set forth in the “Long-Term Incentives” section of the CD&A. |
2025 Grants of Plan-Based Awards
| (5) The amounts reported in this column represent the grant date fair value of each equity-based award as determined pursuant to FASB ASC Topic 718 (disregarding any estimates of forfeitures). Please refer to Note 18 to the financial statements included in Kennametal’s Annual Report on Form 10-K for 2025 for a discussion of additional assumptions |
2025 Grants of Plan-Based Awards
| used in calculating grant date fair value. The values reported in this column for the PSU awards were calculated at target. |
2025 Grants of Plan-Based Awards
Outstanding Equity Awards at Fiscal Year End 2025
2025 Grants of Plan-Based Awards
| | Option Awards(1) | | | | | Stock Awards(1) | | | | | | | | | | | | | | | | Equity | | | | | | | | | | | | Incentive | | | | | | | | | | | Equity | Plan | | | | | | | | | | | Incentive | Awards: | | | | | | | | | | | Plan | Market or | | | | | | | | | | | Awards: | Payout | | | | | | | | | | | Number of | Value of | | | | | | | | | | Market | Unearned | Unearned | | | | | | | | | Number of | Value of | Shares, | Shares, | | | | Number of | Number of | | | | Shares | Shares or | Units or | Units or | | | | Securities | Securities | | | | or Units | Units of | Other | Other | | | | Underlying | Underlying | | | | of Stock | Stock | Rights | Rights | | | | Unexercised | Unexercised | Option | | | That | That | That | That | | | | Options | Options | Exercise | Option | | Have Not | Have Not | Have Not | Have Not | | | Grant | (#) | (#) | Price | Expiration | Grant | Vested | Vested | Vested | Vested | | Name | Date | Exercisable | Unexercisable | ($) | Date | Date | (#) | ($)(2) | (#) | ($)(2) | | Sanjay Chowbey | | | | | | | | | | | | | | | | | | 8/15/2022(a) | 4,323 | 99,256 | | | | | | | | | | 8/15/2022(b) | 17,808 | 408,872 | | | | | | | | | | 8/15/2023(a) | 9,323 | 214,056 | | | | | | | | | | 8/15/2023(b) | 6,917 | 158,814 | 11654 | 267,576 | | | | | | | | 8/15/2024(a) | 61,600 | 1,414,336 | | | | | | | | | | 8/15/2024(b) | 16,651 | 382,307 | 71,869 | 1,650,112 | | Totals | | | | | | | 116,622 | 2,677,641 | 83,523 | 1,917,688 | | Patrick Watson | | | | | | | | | | | | | 8/1/2015 | 13,890 | — | 31.69 | 8/1/2025 | 8/15/2022(a) | 2,018 | 46,333 | | | | | | | | | | 8/15/2022(b) | 8,311 | 190,821 | | | | | | | | | | 8/15/2023(a) | 6,156 | 141,342 | | | | | | | | | | 8/15/2023(b) | 4,567 | 104,858 | 7,695 | 176,677 | | | | | | | | 8/15/2024(a) | 13,440 | 308,582 | | | | | | | | | | 8/15/2024(b) | 3,632 | 83,391 | 15,681 | 360,036 | | Totals | | 13,890 | | | | | 38,124 | 875,327 | 23,376 | 536,713 | | Dave Bersaglini | | | | | | | | | | | | | | | | | | 9/1/2024(a) | 11,596 | 266,244 | | | | | | | | | | 9/1/2024(b) | 10,050 | 230,748 | | | | | | | | | | 9/1/2024(c) | 2,717 | 62,382 | 11,725 | 269,206 | | Totals | | | | | | | 24,363 | 559,374 | 11,725 | 269,206 | | Faisal Hamadi | | | | | | | | | | | | | | | | | | 8/1/2024(a) | 9,917 | 227,694 | | | | | | | | | | 8/15/2024(a) | 6,400 | 146,944 | | | | | | | | | | 8/15/2024(b) | 1,730 | 39,721 | 7,467 | 171,442 | | Totals | | | | | | | 18,047 | 414,359 | 7,467 | 171,442 | | Michelle Keating | | | | | | | | | | | | | | | | | | 8/15/2022(a) | 2,592 | 59,512 | | | | | | | | | | 8/15/2022(b) | 10,678 | 245,167 | — | — | | | | | | | | 8/15/2023(a) | 5,551 | 127,451 | | | | | | | | | | 8/15/2023(b) | 4,118 | 94,549 | 6,939 | 159,319 | | | | | | | | 8/15/2024(a) | 10,288 | 236,212 | | | | | | | | | | 8/15/2024(b) | 2,780 | 63,829 | 12,003 | 275,589 | | Totals | | | | | | | 36,007 | 826,721 | 18,942 | 434,908 | | Franklin Cardenas | | | | | | | | | | | | | | | | | | 8/15/2022(a) | 4,046 | 92,896 | | | | | | | | | | 8/15/2022(b) | 16,666 | 382,651 | — | — | | | | | | | | 8/15/2023(a) | 4,245 | 97,465 | | | | | | | | | | 8/15/2023(b) | — | — | — | — | | | | | | | | 8/15/2024(a) | 4,332 | 99,463 | | | | | | | | | | 8/15/2024(b) | — | — | — | — | | Totals | | | | | | | 29,289 | 672,475 | — | — |
2025 Grants of Plan-Based Awards
Notes and Supplemental Table to “Outstanding Equity Awards at Fiscal Year End 2025” Table
2025 Grants of Plan-Based Awards
| (1) Vesting Information |
2025 Grants of Plan-Based Awards
| Grant Date | Vesting Schedule | | 8/15/2022 | (a) The RSU awards granted on this date vest 1/3 each year over three years beginning on the first anniversary of the grant date. (b) The PSU Awards granted on this date are subject to annual Adjusted ROIC performance conditions and may be earned 22.22% each year over a three-year period if the performance conditions for each year are satisfied. Additionally, 33.34% of the PSU Awards are tied to Fiscal 2022 through Fiscal 2025 Adjusted EBITDA Margin. The Adjusted ROIC performance conditions underlying Year 3 (Fiscal 2025) of the performance period for this award were achieved and deemed earned by the Compensation and Human Capital Committee as of June 30, 2025, which was the end of the performance vesting period for these PSUs. | | 8/15/2023 | (a) The RSU awards granted on this date vest 1/3 each year over three years beginning on the first anniversary of the grant date. (b) The PSU Awards granted on this date are subject to annual Adjusted ROIC performance conditions and may be earned 22.22% each year over a three-year period if the performance conditions for each year are satisfied. Additionally, 33.34% of the PSU Awards are tied to Fiscal 2024 through Fiscal 2026 Adjusted EBITDA Margin. The Adjusted ROIC performance conditions underlying Year 2 (Fiscal 2025) of the performance period for this award were achieved and deemed earned by the Compensation and Human Capital Committee as of June 30, 2025. PSUs that are deemed earned for any given fiscal year remain subject to an additional service condition that requires the executive to be employed by us through the payment date following the three-year performance period. The number of PSUs which remain subject to performance conditions have been included in the “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have Not Vested” column based on achieving target performance goals. | | 8/1/2024 | The RSU award granted on this date will cliff vest fully on August 1, 2026. | | 8/15/2024 | (a) The RSU awards granted on this date vest 1/3 each year over three years beginning on the first anniversary of the grant date. (b) The PSU Awards granted on this date are subject to annual Adjusted ROIC performance conditions and may be earned 22.22% each year over a three-year period if the performance conditions for each year are satisfied. Additionally, 33.34% of the PSU Awards are tied to Fiscal 2025 through Fiscal 2027 Adjusted EBITDA Margin. The Adjusted ROIC performance conditions underlying Year 1 (Fiscal 2025) of the performance period for this award were achieved and deemed earned by the Compensation and Human Capital Committee as of June 30, 2025. PSUs that are deemed earned for any given fiscal year remain subject to an additional service condition that requires the executive to be employed by us through the payment date following the three-year performance period. The number of PSUs which remain subject to performance conditions have been included in the “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have Not Vested” column based on achieving target performance goals. | | 9/1/2024 | (a) The RSU award granted on this date will cliff vest fully on September 1, 2026. (b) The RSU awards granted on this date vest 1/3 each year over three years beginning on the first anniversary of the grant date. (c) The PSU Awards granted on this date are subject to annual Adjusted ROIC performance conditions and may be earned 22.22% each year over a three-year period if the performance conditions for each year are satisfied. Additionally, 33.34% of the PSU Awards are tied to Fiscal 2025 through Fiscal 2027 Adjusted EBITDA Margin. The Adjusted ROIC performance conditions underlying Year 1 (Fiscal 2025) of the performance period for this award were achieved and deemed earned by the Compensation and Human Capital Committee as of June 30, 2025. PSUs that are deemed earned for any given fiscal year remain subject to an additional service condition that requires the executive to be employed by us through the payment date following the three-year performance period. The number of PSUs which remain subject to performance conditions have been included in the “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have Not Vested” column based on achieving target performance goals. |
2025 Grants of Plan-Based Awards
| (2) Market value is calculated using the closing price of our common stock on June 30, 2025 ($22.96). |
2025 Grants of Plan-Based Awards
Option Exercises and Stock Vested In 2025
2025 Grants of Plan-Based Awards
| | Option Awards | | Stock Awards | | | | Number of | Value | Number of | Value | | | Shares Acquired | Realized | Shares Acquired | Realized | | | on Exercise | on Exercise | on Vesting | on Vesting | | Name | (#) | ($) | (#) | ($)(1)(2) | | Sanjay Chowbey | — | — | 25,449 | 687,318 | | Patrick Watson | — | — | 7,742 | 205,593 | | Dave Bersaglini | — | — | — | — | | Faisal Hamadi | — | — | — | — | | Michelle Keating | — | — | 11,081 | 297,107 | | Franklin Cardenas | — | — | 19,558 | 525,861 |
2025 Grants of Plan-Based Awards
Notes and Supplemental Tables to Option Exercises and Stock Vested in 2025 Table
2025 Grants of Plan-Based Awards
| (1) These values represent the aggregate dollar amount realized upon vesting. The value is calculated by multiplying the number of shares of stock that vested by the market value of the shares on the vesting date. |
2025 Grants of Plan-Based Awards
| (2) Regarding the vesting of RSU awards and PSUs, our NEOs surrendered shares to satisfy tax withholding requirements, which reduced the gross value received upon vesting. The number of shares surrendered and the corresponding value of those shares is shown below. |
2025 Grants of Plan-Based Awards
| | Number of | | | | Shares | Value of | | | Surrendered | Shares | | | for Tax | Surrendered | | Name | Withholding | ($) | | Sanjay Chowbey | 6,195 | 167,316 | | Patrick Watson | 2,360 | 62,625 | | Dave Bersaglini | — | — | | Faisal Hamadi | — | — | | Michelle Keating | 3,379 | 90,531 | | Franklin Cardenas | 8,898 | 238,537 |
Executive Compensation Tables and 2025 Nonqualified Deferred Compensation
Executive Compensation Tables and 2025 Nonqualified Deferred Compensation The following table shows benefits our NEOs are entitled to under our retirement programs, which are described more fully in the narrative that follows and in the CD&A. 2025 Pension Benefits
Executive Compensation Tables and 2025 Nonqualified Deferred Compensation
| | | Number of | Present Value of | Payments | | | | Years Credited | Accumulated | During Last | | | | Service | Benefit | Fiscal Year | | Name(1) | Plan Name(2) | (#) | ($) | ($) | | Sanjay Chowbey | N/A | N/A | N/A | N/A | | Patrick Watson | N/A | N/A | N/A | N/A | | Dave Bersaglini | N/A | N/A | N/A | N/A | | Faisal Hamadi | N/A | N/A | N/A | N/A | | Michelle Keating | N/A | N/A | N/A | N/A | | Franklin Cardenas | N/A | N/A | N/A | N/A |
Executive Compensation Tables and 2025 Nonqualified Deferred Compensation
Notes to 2025 Pension Benefits Table
Executive Compensation Tables and 2025 Nonqualified Deferred Compensation
| (1) Messrs. Chowbey, Watson, Bersaglini, Hamadi, Cardenas, and Ms. Keating do not participate in the Company’s ERP, described below, and Mr. Cardenas did not participate in the ERP during his employment. |
Executive Compensation Tables and 2025 Nonqualified Deferred Compensation
| (2) Refer to the “Retirement Programs” section below for a narrative description of the material factors of the ERP. |
2025 Nonqualified Deferred Compensation and Retirement Programs
2025 Nonqualified Deferred Compensation and Retirement Programs The following table provides, for each NEO, their contributions, the Company’s contributions, the aggregate earnings and withdrawals in Fiscal 2025 and the aggregate balance, each under the Kennametal Restoration Plan, as of June 30, 2025.
2025 Nonqualified Deferred Compensation and Retirement Programs
| | Executive | Registrant | Aggregate | Aggregate | Aggregate | | | Contributions | Contributions | Earnings | Withdrawals/ | Balance | | | During FY | During FY | During FY | Distributions | at FYE | | Name | ($)(1) | ($)(2) | ($)(3) | ($) | ($)(4) | | Sanjay Chowbey | 132,326 | 44,612 | 11,235 | — | 636,468 | | Patrick Watson | 56,350 | 27,126 | 6,921 | — | 315,047 | | Dave Bersaglini | — | — | — | — | — | | Faisal Hamadi | — | — | — | — | — | | Michelle Keating | 8,511 | 16,518 | — | — | 208,075 | | Franklin Cardenas | 270,369 | 23,078 | 4,307 | — | 1,299,745 |
2025 Nonqualified Deferred Compensation and Retirement Programs
Notes to 2025 Nonqualified Deferred Compensation Table
2025 Nonqualified Deferred Compensation and Retirement Programs
| (1) Amounts reflected are included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns of the Summary Compensation Table above, as appropriate. |
2025 Nonqualified Deferred Compensation and Retirement Programs
| (2) Amounts reflected are included in the “All Other Compensation” column of the Summary Compensation Table above. |
2025 Nonqualified Deferred Compensation and Retirement Programs
| (3) Amounts reflected are not included as compensation for the relevant NEOs in the Summary Compensation Table above. |
2025 Nonqualified Deferred Compensation and Retirement Programs
| (4) All contributions comprising a portion of the aggregate balance at the end of Fiscal Year 2025 were included in the compensation reported in the Summary Compensation Table and prior years’ summary compensation tables, as applicable. |
2024 Nonqualified Deferred Compensation and Retirement Programs
2024 Nonqualified Deferred Compensation and Retirement Programs Non-Qualified Plans. Our ERP, a non-qualified retirement plan is a legacy program that provides a formula-based benefit to eligible NEOs that is payable on a lump sum basis, and is no longer open to new participants. The amount of the benefit is based upon an executive’s accrued benefit percentage (which varies by age) and compensation (base salary together with AIP target awards averaged for the three most recent fiscal years). ERP benefits vest once an executive’s accrued benefit percentage reaches 150%. If an executive terminates employment prior to reaching age 62, then the accrued benefit percentage is reduced to reflect the accrued benefit percentage that was applicable to the executive two years prior to the date of termination. The ERP was frozen as of December 31, 2016, with no new participants permitted into the ERP and those in the ERP as of December 31, 2016, are grandfathered in the ERP. The Kennametal Restoration Plan, a non-qualified retirement plan, allows eligible NEOs to make pre-tax contributions on eligible compensation in excess of the Internal Revenue Code (IRC) Section 401(a)(17) dollar limits ($350,000 for 2025) applicable to the TPP. In addition, it provides for a “make whole” Company contribution equal to the maximum matching contributions not provided to eligible employees under the TPP on compensation in excess of this IRC limit on compensation that can be taken into account by the TPP. Company contributions are vested when made, however, subject to later forfeiture in the event the NEO is terminated for cause or engages in any business activities determined to be in competition with the Company. The NEO contributions, Company contributions and earnings thereon are invested in the same “notional options” available under the TPP (other than the brokerage option) and ultimately paid out in cash, in accordance with elections made by the participant.
CEO Pay Ratio for Fiscal Year 2025
CEO Pay Ratio for Fiscal Year 2025 Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are required to disclose the ratio of the total annual compensation of our CEO to the annual total compensation of our median employee. As permitted by SEC rules, we used Target Total Direct Compensation as our consistently applied compensation measure to determine our median employee from our employee population, excluding our CEOs, as of June 30, 2025 (8,123 employees in total, 2,504 of whom were located in the United States and 5,619 of whom were located in various jurisdictions outside of the United States). Target Total Direct Compensation is defined as the sum of annual salary, target annual cash incentives and target long-term incentives. For hourly employees, the annual salary component of Target Total Direct Compensation was calculated using a reasonable estimate of hours worked and their hourly wage rate. We annualized Target Total Direct Compensation for those of our 8,123 employees who were employed as of June 30, 2025, but were not employed for the full fiscal year. For our non-U.S. employees, we used the foreign exchange rates applicable at June 1, 2025 to convert their Target Total Direct Compensation into U.S. dollars. As permitted by SEC rules, we excluded all employees in certain jurisdictions located outside of the United States, which collectively represented less than 5% of our total number of employees. Approximately the following number of employees were excluded by jurisdiction: Poland (145), Spain (152), Switzerland (23), and the United Kingdom (83). After excluding employees in these jurisdictions, as referenced above, our pay ratio calculation included 7,720 of our total 8,123 employees. After identifying the median employee, we calculated the annual total compensation for the median employee using the same methodology that we use for determining our CEO total compensation as disclosed in the Summary Compensation Table. Mr. Chowbey’s annual total compensation, as reported in the Summary Compensation Table, was $4,694,633. For 2025, the median employee’s annual total compensation was $72,021. Accordingly, the Fiscal Year 2025 ratio of the annualized total compensation for Mr. Chowbey relative to our median employee’s annual total compensation is 65:1, which is a reasonable estimate that has been calculated in a manner consistent with the rules adopted by the SEC and is based on our records and the methodology described above. As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between compensation actually paid to our Named Executive Officers (NEOs) and certain financial performance metrics of the Company using a methodology that has been prescribed by the SEC.
CEO Pay Ratio for Fiscal Year 2025
| | | | | | Average | | Value of Initial Fixed $100 | | | | | | | Summary | | | Summary | Average | Investment Based on: | | | | | | Summary | Compensation | | | Compensation | Compensation | | Peer Group | | | | | Compensation | Table Total | Compensation | Compensation | Table Total | Actually Paid | Total | Total | Net Income | Adjusted | | Fiscal | Table Total | for Mr. | Actually Paid to | Actually Paid to | for non-PEO | to non-PEO | Shareholder | Shareholder | (Loss) | EBITDA(5) | | Year | for Mr. Rossi (1) | Chowbey (1) | Mr. Rossi (1)(2)(3) | Mr. Chowbey (1)(2)(3) | NEOs(1) | NEOs(1)(2)(3) | Return | Return(4) | ($ millions) | ($ millions) | | (a) | (b) | (b) | (c) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2025 | $N/A | $4,694,633 | $N/A | $4,421,080 | $1,532,141 | $1,294,523 | $92.13 | $267.12 | $98.7 | $299.5 | | 2024 | $6,399,926 | $1,794,097 | $4,127,786 | $1,338,821 | $1,375,327 | $1,072,413 | $91.40 | $232.08 | $109.3 | $312.5 | | 2023 | $6,729,013 | $N/A | $8,519,849 | $N/A | $1,361,854 | $1,609,461 | $106.81 | $195.54 | $118.5 | $323.0 | | 2022 | $6,131,892 | $N/A | $2,368,850 | $N/A | $1,464,994 | $576,965 | $84.82 | $133.64 | $144.6 | $364.0 | | 2021 | $6,447,574 | $N/A | $6,723,938 | $N/A | $1,801,001 | $1,982,039 | $128.02 | $163.07 | $54.4 | $276.0 |
CEO Pay Ratio for Fiscal Year 2025
| (1) Mr. Chowbey served as our principal executive officer (PEO) beginning on June 1, 2024. Mr. Rossi served as our (PEO) for 2021 through May 31, 2024. Our non-PEO named executive officers (NEOs) included: (a) for fiscal year 2025, Messrs. Watson, Bersaglini, Hamadi, and Cardenas, and Ms. Keating, (b) for fiscal year 2024, Messrs. Watson and Cardenas, and Mses. Bacchus and Keating; (c) for fiscal year 2023, Messrs. Watson, Chowbey, Cardenas, and Ms. Keating; (d) for fiscal year 2022, Messrs. Audia, Chowbey, Watson, Cardenas, and Ms. Bacchus; and (e) for fiscal year 2021, Messrs. Audia, Dragich, and Cardenas, and Mses. Bacchus and Keating. |
CEO Pay Ratio for Fiscal Year 2025
| (2) Certain values in the table above and footnotes below differ as compared to our 2024 proxy statement due to miscalculations of equity awards in our disclosure last year. |
CEO Pay Ratio for Fiscal Year 2025
| (3) The following amounts were deducted from / added to Summary Compensation Table (SCT) total compensation in accordance with the SEC-mandated adjustments to calculate Compensation Actually Paid (CAP) to our principal executive officers (PEO) and average CAP to our non-PEO named executive officers. The fair value of equity awards was determined using methodologies and assumptions developed in a manner substantively consistent with those used to determine the grant date fair value of such awards. |
CEO Pay Ratio for Fiscal Year 2025
Mr. Rossi SCT Total to CAP Reconciliation
CEO Pay Ratio for Fiscal Year 2025
| Fiscal Year | 2021 | 2022 | 2023 | 2024 | 2025 | | SCT Total | $6,447,574 | $6,131,892 | $6,729,013 | $6,399,926 | — | | - Change in Actuarial Present Value of Pension Plans Reported in Fiscal Year | $— | $— | $— | $— | — | | + Service Cost of Pension in Fiscal Year | $— | $— | $— | $— | — | | + Prior Service Cost of Pension in Fiscal Year | $— | $— | $— | $— | — | | - Grant Date Fair Value of Stock Awards Granted in Fiscal Year | $(3,800,016) | $(3,774,347) | $(4,417,134) | $(4,344,086) | — | | ± Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | $4,712,231 | $2,418,762 | $4,957,682 | $1,786,630 | — | | | | | | | — | | ± Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | $(847,928) | $(1,719,194) | $791,291 | $(1,115,481) | — | | ± Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $— | $— | $— | $1,783,368 | — | | ± Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $68,517 | $47,370 | $220,778 | $(605,434) | — | | - Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $— | $(886,412) | $— | $— | — | | + Dividends or Other Earnings Paid on Stock Awards in the Fiscal Year Prior to the Vesting Date that are not otherwise included in the Total Compensation for the Fiscal Year | $143,560 | $150,779 | $238,219 | $222,863 | — | | Compensation Actually Paid | $6,723,938 | $2,368,850 | $8,519,849 | $4,127,786 | — |
CEO Pay Ratio for Fiscal Year 2025
Mr. Chowbey SCT Total to CAP Reconciliation
CEO Pay Ratio for Fiscal Year 2025
| Fiscal Year | 2021 | 2022 | 2023 | 2024 | 2025 | | SCT Total | $— | $— | $— | $1,794,097 | $4,694,633 | | - Change in Actuarial Present Value of Pension Plans Reported in Fiscal Year | $— | $— | $— | $— | $— | | + Service Cost of Pension in Fiscal Year | $— | $— | $— | $— | $— | | + Prior Service Cost of Pension in Fiscal Year | $— | $— | $— | $— | $— | | - Grant Date Fair Value of Stock Awards Granted in Fiscal Year | $— | $— | $— | $(865,913) | $(3,052,941) | | ± Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | $— | $— | $— | $683,432 | $2,671,209 | | ± Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | $— | $— | $— | $(296,905) | $(33,688) | | ± Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $— | $— | $— | $— | $— | | ± Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $— | $— | $— | $(16,488) | $38,086 | | - Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $— | $— | $— | $— | $— | | + Dividends or Other Earnings Paid on Stock Awards in the Fiscal Year Prior to the Vesting Date that are not otherwise included in the Total Compensation for the Fiscal Year | $— | $— | $— | $40,598 | $103,781 | | Compensation Actually Paid | $— | $— | $— | $1,338,821 | $4,421,080 |
CEO Pay Ratio for Fiscal Year 2025
Non-PEO NEO Average SCT Total to Average CAP Reconciliation
CEO Pay Ratio for Fiscal Year 2025
| Fiscal Year | 2021 | 2022 | 2023 | 2024 | 2025 | | Average SCT Total | $1,801,001 | $1,464,994 | $1,361,854 | $1,375,327 | $1,532,141 | | - Change in Actuarial Present Value of Pension Plans Reported in Fiscal Year | $(49,438) | $(53,093) | $— | $(75,872) | $— | | + Service Cost of Pension in Fiscal Year | $79,388 | $35,758 | $— | $77,227 | $— | | + Prior Service Cost of Pension in Fiscal Year | $— | $— | $— | $— | $— | | - Grant Date Fair Value of Stock Awards Granted in Fiscal Year | $(701,109) | $(741,024) | $(585,894) | $(578,424) | $(696,041) | | ± Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | $868,203 | $351,046 | $656,444 | $460,026 | $499,290 | | ± Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | $(67,579) | $(134,416) | $94,368 | $(159,167) | $(12,298) | | ± Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $— | $— | $— | $— | $— | | ± Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $19,407 | $(3,863) | $51,615 | $(54,770) | $11,208 | | - Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $— | $(356,522) | $— | $— | $(63,418) | | + Dividends or Other Earnings Paid on Stock Awards in the Fiscal Year Prior to the Vesting Date that are not otherwise included in the Total Compensation for the Fiscal Year | $32,166 | $14,085 | $31,074 | $28,066 | $23,641 | | Average Compensation Actually Paid | $1,982,039 | $576,965 | $1,609,461 | $1,072,413 | $1,294,523 |
CEO Pay Ratio for Fiscal Year 2025
(4) The Peer Group for which Total Shareholder Return is provided in column (g) is the S&P 400 Capital Goods Index. (5) Adjusted EBITDA is a Non-GAAP financial measure. (see Appendix A for a reconciliation to GAAP). CHARTS OF CAP VERSUS PERFORMANCE METRICS The chart below illustrates the relationship between the PEO and average Non-PEO CAP amounts and the Company’s and Peer Group’s TSR during fiscal years 2021-2025. The charts below illustrate the relationship between the PEO and Non-PEO CAP amounts and the Company’s Net Income and Adjusted EBITDA during fiscal years 2021-2025. TABULAR LIST OF MOST IMPORTANT PERFORMANCE MEASURES The six items listed below represent the most important performance metrics we used to determine CAP for Fiscal 2024 as further described in our Compensation Discussion and Analysis (CD&A).
CEO Pay Ratio for Fiscal Year 2025
| Most Important Performance Measures | | ● Adjusted EBITDA ● Primary Working Capital as a Percent of Sales ● Revenue ● Adjusted EBIT ● Adjusted EBITDA Margin ● Adjusted ROIC |
CEO Pay Ratio for Fiscal Year 2025
SUPPLEMENTAL DISCLOSURE The charts below illustrate the relationship between the PEOs’ and other NEOs’ SCT Total Compensation, total shareholder return, and CAP amounts during fiscal year 2021-2025. This relationship reflects the impact of changes in the Company’s stock price performance on the amount of Compensation Actually Paid in each year in relation to the amount reported in the Summary Compensation Table for the current PEO and other NEOs.