Form 4: Kennametal VP Michelle Keating Earns Performance Stock Units

Kennametal Inc. Vice President Michelle Keating was awarded 10,725 performance stock units, reflecting the achievement of adjusted ROIC and EBITDA margin targets, with vesting contingent on continued employment.

Summary

• Michelle R. Keating, Vice President of Kennametal Inc. (KMT), was deemed to have earned 10,725 performance stock units (PSUs) on July 28, 2025.
• The PSUs were earned across multiple tranches of Performance Unit Awards granted in 2022, 2023, and 2024 under the Kennametal Inc. 2020 and 2024 Stock and Incentive Plans.
• The Compensation and Human Capital Committee approved an adjusted ROIC payout multiple of 81.1% for the relevant tranches.
• An adjusted EBITDA margin payout of 92.4% was approved for a tranche of the 2022 Performance Unit Award.
• Vesting and actual distribution of these shares are subject to Ms. Keating's continued employment with the company through specific future dates.
• Following these transactions, Ms. Keating's total beneficial ownership of Common Stock is 42,267.72 shares, which includes 74.27 shares held in the Kennametal Inc. 401(k) Plan.

Sentiment

Score: 7

Explanation: The sentiment is positive for the executive as compensation was earned, and generally positive for the company as it indicates the achievement of performance targets, aligning executive incentives with company success.

Positives

• The earning of performance stock units indicates that Kennametal Inc. met specific financial performance targets, including adjusted ROIC and adjusted EBITDA margin.
• The award aligns executive compensation with company performance, incentivizing the Vice President to contribute to long-term shareholder value.
• The continued employment condition for vesting helps retain key management personnel.

Risks

• For the reporting person, the actual distribution of the earned performance stock units is contingent upon continued employment with Kennametal Inc. through August 15, 2025, August 15, 2026, and August 15, 2027.

Future Outlook

The actual distribution of the earned performance stock units is contingent upon the reporting person's continued employment with Kennametal Inc. through August 15, 2025, August 15, 2026, and August 15, 2027, aligning future compensation with ongoing service.

Industry Context

This filing reflects standard executive compensation practices within the manufacturing and industrial tools sector, where performance-based equity awards are common to incentivize management to achieve financial targets and align with shareholder interests.

Comparison to Industry Standards

• Performance-based stock unit awards are a common component of executive compensation packages across the industrial sector, similar to practices at companies like Sandvik, Iscar, and Sumitomo Electric Industries, which also utilize long-term incentives tied to financial metrics.
• The use of adjusted ROIC and adjusted EBITDA margin as performance metrics is standard for evaluating operational efficiency and profitability in manufacturing companies, comparable to metrics used by peers in the cutting tools and materials science industries.

Stakeholder Impact

• Shareholders: The award of performance stock units represents a form of compensation that aligns the interests of the executive with shareholder value creation, as the awards are tied to financial performance metrics. There is a minor potential for dilution from the issuance of new shares upon vesting.
• Employees (specifically the reporting person): The earned units provide significant incentive for the Vice President to remain with the company and continue contributing to its performance.

Next Steps

• The earned performance stock units will vest and be distributed to the reporting person upon continued employment through August 15, 2025, for the 2022 awards.
• The 2023 performance stock units will vest upon continued employment through August 15, 2026.
• The 2024 performance stock units will vest upon continued employment through August 15, 2027.

Key Dates

Recommendation

This Form 4 filing details an executive compensation event (earning of performance stock units) rather than a market transaction or significant operational update. While it indicates the company met certain performance targets, it does not provide new information that would fundamentally alter the investment thesis or warrant a change in a seasoned investor's current position based solely on this filing. It reinforces management alignment but is not a catalyst for a 'buy' or 'sell' decision.

Keywords

Kennametal Inc., KMT, Performance Stock Units, Executive Compensation, SEC Form 4, Insider Transaction, ROIC, EBITDA Margin, Stock Incentive Plan