Form 4: Kennametal VP Judith Bacchus Earns Performance Stock Units

Kennametal Inc. Vice President Judith L. Bacchus has earned 10,151 performance stock units across multiple awards, contingent on continued employment and based on strong adjusted ROIC and EBITDA margin performance.

Summary

• Judith L. Bacchus, Vice President of Kennametal Inc., was deemed to have earned a total of 10,151 performance stock units (PSUs) on July 28, 2025.
• This includes 2,065 PSUs from the third tranche of the 2022 Performance Unit Award, based on adjusted Return on Invested Capital (ROIC) with an 81.1% payout multiple.
• An additional 3,531 PSUs were earned from the 2022 Performance Unit Award, tied to adjusted EBITDA margin with a 92.4% payout.
• 2,204 PSUs were earned from the second tranche of the 2023 Performance Unit Award, also based on adjusted ROIC with an 81.1% payout multiple.
• Finally, 2,351 PSUs were earned from the first tranche of the 2024 Performance Unit Award, linked to adjusted ROIC with an 81.1% payout.
• The vesting and actual distribution of these shares are contingent upon Ms. Bacchus's continued employment with Kennametal Inc. through specific future dates: August 15, 2025 (for 2022 awards), August 15, 2026 (for 2023 awards), and August 15, 2027 (for 2024 awards).
• Following these transactions, Ms. Bacchus beneficially owns 44,651.302 shares, which includes 2,000.302 shares held in the Kennametal Inc. 401(k) Plan.

Sentiment

Score: 7

Explanation: The filing indicates that the company's performance metrics (adjusted ROIC and EBITDA margin) met targets, leading to the earning of performance-based executive compensation. This suggests positive operational performance and effective incentive alignment, which is generally favorable.

Positives

• Company performance metrics (adjusted ROIC and adjusted EBITDA margin) met targets, leading to the earning of performance stock units for an executive.
• The Compensation and Human Capital Committee approved payout multiples of 81.1% for adjusted ROIC and 92.4% for adjusted EBITDA margin, indicating strong performance against set goals.
• The awards incentivize long-term executive retention, as vesting is tied to continued employment for several years.

Risks

• The actual distribution of the earned performance stock units is 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).

Future Outlook

The actual distribution of the earned performance stock units is contingent on the reporting person's continued employment with the company through specific future dates in August 2025, August 2026, and August 2027.

Management Comments

• The Compensation and Human Capital Committee approved adjusted ROIC payout multiple at 81.1 percent for such tranche of the 2022 Performance Unit Award.
• The Compensation and Human Capital Committee approved adjusted EBITDA margin payout at 92.4% for such tranche of the 2022 Performance Unit Award.

Industry Context

This filing reflects a standard practice in corporate executive compensation, where a portion of an executive's remuneration is tied to the achievement of specific financial performance metrics (like ROIC and EBITDA margin) over multi-year periods. Such performance-based awards are designed to align executive incentives with shareholder value creation and long-term company success, a common trend across various industries.

Comparison to Industry Standards

• It is difficult to provide specific comparable companies, projects, or results without detailed industry-specific compensation benchmarks.
• Performance-based equity awards tied to metrics like ROIC and EBITDA are standard practice for executive compensation in industrial and manufacturing sectors, similar to companies like Illinois Tool Works (ITW) or Stanley Black & Decker (SWK), which also utilize such metrics to incentivize management performance.
• The payout percentages of 81.1% and 92.4% suggest that Kennametal's performance against these internal targets was strong, but without knowing the specific target levels, a direct comparison to external industry averages for payout achievement is not feasible.

Corporate Governance

Stakeholder Impact

• Shareholders: The earning of performance-based awards suggests that the company met certain financial targets, which could be viewed positively as it indicates operational success and alignment of executive incentives with shareholder value.
• Employees: The filing specifically relates to executive compensation and does not directly impact the broader employee base, beyond potentially signaling overall company performance.
• Management: Judith L. Bacchus, as the reporting person, benefits directly from the earning of these performance stock units, contingent on her continued employment.

Next Steps

• Continued employment of Judith L. Bacchus through August 15, 2025, for the vesting and distribution of 2022 Performance Unit Awards.
• Continued employment of Judith L. Bacchus through August 15, 2026, for the vesting and distribution of 2023 Performance Unit Awards.
• Continued employment of Judith L. Bacchus through August 15, 2027, for the vesting and distribution of 2024 Performance Unit Awards.

Key Dates

Recommendation

This Form 4 filing primarily details routine executive compensation in the form of performance stock units earned based on pre-defined financial targets. While the achievement of these targets is a positive signal regarding company performance, the filing itself is a standard disclosure and does not typically contain new, material information that would warrant a significant change in investment recommendation. It confirms the execution of an existing compensation plan rather than revealing unexpected operational or strategic shifts.

Keywords

Kennametal, KMT, SEC Form 4, insider ownership, executive compensation, performance stock units, stock awards, corporate governance, ROIC, EBITDA margin