Form 4: Kennametal CEO Awarded Performance Stock Units Based on ROIC and EBITDA Targets

Kennametal Inc. President and CEO Sanjay Chowbey was awarded performance stock units totaling 29,827 shares of common stock based on the achievement of adjusted ROIC and EBITDA margin targets for various performance periods.

Summary

• Sanjay Chowbey, President and CEO of Kennametal Inc., was awarded a total of 29,827 performance stock units on July 28, 2025.
• The awards are based on the achievement of specific performance metrics: adjusted Return on Invested Capital (ROIC) and adjusted EBITDA margin.
• For the third tranche of the 2022 Performance Unit Award (ROIC), 3,505 units were earned with an 81.1% payout multiple.
• For the tranche of the 2022 Performance Unit Award (EBITDA margin), 5,991 units were earned with a 92.4% payout.
• For the second tranche of the 2023 Performance Unit Award (ROIC), 3,780 units were earned with an 81.1% payout multiple.
• For the first tranche of the 2024 Performance Unit Award (ROIC), 16,651 units were earned with an 81.1% payout.
• Vesting and actual distribution of these shares are contingent upon Mr. Chowbey's continued employment with the Company through August 15, 2025, August 15, 2026, and August 15, 2027, depending on the award tranche.
• Following these transactions, Mr. Chowbey beneficially owns 107,522.483 shares of common stock, including 319.48 shares held in the Kennametal Inc. 401(k) Plan.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. While payout multiples were not 100%, the fact that significant performance units were earned indicates that the company met substantial portions of its performance targets, which is a positive signal for operational execution and executive alignment.

Positives

• Performance targets for adjusted ROIC and adjusted EBITDA margin were met, leading to the earning of performance stock units.
• The Compensation and Human Capital Committee approved payout multiples of 81.1% for ROIC-based awards and 92.4% for EBITDA margin-based awards, indicating strong performance against these metrics.
• The awards demonstrate the company's commitment to performance-based executive compensation aligned with shareholder value.

Negatives

• Payout multiples for ROIC (81.1%) and EBITDA margin (92.4%) were less than 100%, indicating that the maximum performance targets were not fully achieved for these specific tranches.

Risks

• Vesting and actual distribution of the performance stock units are subject to the reporting person's continued employment with the Company through specific future dates (August 15, 2025, August 15, 2026, and August 15, 2027), posing a forfeiture risk if employment ceases before these dates.

Future Outlook

The future outlook indicates that the actual distribution of these performance stock units is contingent on the CEO's continued employment through specific future dates, aligning executive incentives with long-term company performance and retention.

Industry Context

This filing is a routine executive compensation disclosure (Form 4) and does not provide information directly related to broader industry trends or competitive dynamics. It reflects standard corporate governance practices regarding performance-based compensation for senior executives.

Corporate Governance

Stakeholder Impact

• Shareholders: The earning of performance units based on ROIC and EBITDA margin suggests management is being incentivized to drive profitability and efficient capital use, which could positively impact shareholder returns.
• Employees: The continued employment condition for vesting emphasizes retention of key leadership.

Next Steps

• Actual distribution of the earned performance stock units will occur subject to the CEO's continued employment through August 15, 2025, August 15, 2026, and August 15, 2027, depending on the specific award tranche.

Key Dates

Keywords

Kennametal Inc., KMT, Performance Stock Units, Executive Compensation, Sanjay Chowbey, SEC Form 4, ROIC, EBITDA Margin, Stock Incentive Plan, Beneficial Ownership