Form 4: Kyndryl CEO Schroeter Settles Performance Share Units, Retains Significant Holdings

Kyndryl CEO Martin J Schroeter settled performance share units (PSUs) on February 1, 2025, receiving 152,170 shares while also having 73,804 shares withheld for tax obligations.

Summary

• On February 1, 2025, Martin J Schroeter, the Chairman and CEO of Kyndryl Holdings, Inc., settled performance share units (PSUs) that were previously granted on December 16, 2021.
• The PSUs vested based on Kyndryl's achievement of pre-established share price targets over a three-year performance period from December 16, 2021, to December 15, 2024.
• The settlement resulted in Schroeter acquiring 152,170 shares of Kyndryl's common stock.
• Additionally, 73,804 shares were withheld by the Issuer to satisfy Schroeter's tax withholding obligations at a price of $37.7 per share.
• Following these transactions, Schroeter directly owns 1,404,631 shares of Kyndryl common stock.
• The settled PSUs represent a contingent right to receive one share of Kyndryl's common stock, payable in common stock or cash at the discretion of the Issuer.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The vesting of PSUs suggests that the company met certain performance targets. The CEO's continued significant ownership is also a positive sign.

Positives

• The vesting of PSUs indicates that Kyndryl met certain share price performance targets, which is a positive signal.
• Martin J Schroeter's continued significant holdings in Kyndryl (1,404,631 shares) demonstrates his alignment with the company's success.

Industry Context

This filing is a routine disclosure related to executive compensation and equity ownership. It's common for executives to receive equity-based compensation, such as PSUs, which vest based on company performance. The settlement of these units and the subsequent tax withholding are standard procedures.

Comparison to Industry Standards

• Executive compensation packages often include performance-based equity grants like PSUs to align management's interests with shareholder value.
• Companies like IBM, Accenture, and Tata Consultancy Services also utilize similar compensation structures for their executives.
• The vesting criteria for PSUs typically involve metrics such as revenue growth, profitability, or share price appreciation, similar to Kyndryl's share price target-based vesting.
• Tax withholding on equity awards is a standard practice across the industry to ensure compliance with tax regulations.

Stakeholder Impact

• Shareholders may view the vesting of PSUs as a positive sign, indicating that the company is achieving its performance goals.
• The tax withholding has no direct impact on employees, customers, suppliers, or creditors.

Key Dates