filings.toolsItem 11. EXECUTIVE COMPENSATION
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Item 11. EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation Philosophy
In general, our compensation program for our employees has three primary objectives: (1) to attract, motivate, and retain them, (2) to align their interests with those of our stockholders and other stakeholders, and (3) to reinforce our culture and values.
Our employees. Our business is dependent on the services of our employees, including our named executive officers. Among other things, we depend on their ability, where applicable, to find, select and execute investments, manage and improve portfolio company operations, find and develop relationships with fund investors and other sources of capital, find, select and execute capital markets opportunities, and operate our various businesses, and we cannot compete effectively without their continued employment with us. Therefore, it is important that our key employees are compensated in a manner that motivates them to excel consistently and encourages them to remain with the firm.
Alignment of interests. Management equity ownership in the businesses in which we invest has been a guiding principle throughout our firm's history, and we apply that principle to ourselves: every senior employee of the firm is expected to have an equity interest in KKR. This equity ownership serves to align the interests of our senior employees, including our named executive officers, with those of our stockholders. In addition, because we invest in and alongside our investment funds and have a carry pool from which we can allocate to our senior employees a portion of the carried interest that we generate through our business, we believe that our senior employees' interests are also aligned with those of our investors in the funds, vehicles and accounts that we manage, which in turn benefits our stockholders.
Culture and values. One of our most important values for our senior employees is our "one firm" approach with shared responsibility and success, and we also subscribe to a culture of meritocracy and fairness. Therefore, compensation for our senior employees is based on the performance of the firm as a whole as well as on an individual's contributions to the firm. For example, we generally do not compensate our senior employees based merely on an individual's accomplishments in relation to the profits and losses of his or her business unit. In addition, we conduct, at least annually, an evaluation process based on input from a wide range of persons regarding each employee's contribution to the firm, including his or her commitment to the firm's culture and values. We believe that using this kind of evaluation process also promotes a measure of objectivity as a balance to a single manager's judgment.
Named Executive Officers. We refer to our two Co-Executive Chairmen (Henry Kravis and George Roberts), our two Co-Chief Executive Officers (Joseph Bae and Scott Nuttall), our Chief Financial Officer (Robert Lewin), and our Chief Administrative Officer (Dane Holmes), as our "named executive officers" for the year ended December 31, 2024.
We are neither required to conduct say-on-pay or say-on-frequency votes nor to provide disclosures relating to pay-versus-performance under the Dodd-Frank Act. However, we intend periodically to review the elements of our compensation, and we may make changes to the compensation structure relating to one or more named executive officers based on the outcome of such reviews from time to time.
Compensation Elements
Base Salary
For 2024, Messrs. Kravis, Roberts, Bae, Nuttall, Lewin, and Holmes were each paid an annual salary of $300,000. We believe that the base salary of our named executive officers should typically not be the most significant component of total compensation. Our Co-Executive Chairmen determined that $300,000 is a sufficient minimum base salary for our named executive officers.
Year-End Bonus Compensation
Our Co-Executive Chairmen, Co-Chief Executive Officers and Chief Financial Officer did not receive any discretionary year-end cash bonus compensation in 2024, based on the overall values received by them during the year, including their allocations of carried interest. As noted below, KKR increased its allocation of carried interest to the carry pool effective January 2, 2024.
In 2024, our Co-Chief Executive Officers determined that year-end cash bonus compensation should be awarded to our Chief Administrative Officer. In determining the size of his year-end cash bonus compensation, our Co-Chief Executive Officers considered various factors, including (i) Mr. Holmes’s contributions and accomplishments in 2024 in terms of driving commercial results for the firm, leading and managing people, and living the firm's values; and (ii) his performance and contributions in 2024 as the Chief Administrative Officer for the firm, which included his leadership and oversight of our human capital, communications and marketing, citizenship, and sustainability functions. The size of the overall bonus pool available for year-end cash bonus compensation was determined based on our compensation framework, which was driven primarily by increases in total operating earnings and total investing earnings in 2024 as compared to 2023.
Incentive Equity Awards
From time to time, we may grant equity awards consisting of restricted holdings units from our 2019 Equity Incentive Plan. Restricted holdings units are equity awards issued that provide the recipient with the right to exchange them on a one-for-one basis for our common stock after vesting and subject to satisfying certain other conditions. The overall objectives of these grants are principally to incentivize our most senior employees, to align their interests with those of our stockholders, and to retain them by providing meaningful long-term economic incentives. KKR currently intends that no additional equity incentive awards will be granted to Messrs. Bae and Nuttall during the five years following the grants they received in December 2021. Although we did not grant any year-end equity awards to our executive officers in 2024, we may make such equity grants in the future. See also “—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table.”
Carried Interest
Our senior employees are eligible for allocations of carried interest from Associates Holdings, which is referred to as our carry pool. Effective as of January 2, 2024, KKR allocates up to 80% of the carried interest that KKR earns from its funds that provide for carried interest to the carry pool, from which our Co-Founders are currently authorized to determine the amounts of carried interest allocable to individuals from the carry pool.
Due to our Co-Executive Chairmen's unique status as Co-Founders of our firm, our Co-Founders determine their own allocation from the carry pool, subject to certain restrictions and changes relating to the Sunset Date (which will occur no later than December 31, 2026) as described below. To make the total dollar value determination for the other named executive officers, our Co-Founders took into consideration the executive officer's performance and contributions to the firm (including in terms of driving commercial results for the firm, leading and managing people, and living the firm's values), as well as the recommendations by our Co-Chief Executive Officers.
Carry pool allocations for the named executive officers in any year are made by determining a total dollar value for the named executive officer's interest in the carry pool. The total dollar value available to be allocated to the named executive officers and other employees is limited by the total amount of investments made by our investment funds during the fiscal year. Other carried interest is distributed in any year based on investment proceeds generated by our funds. The carried interest allocated to and distributed by the carry pool is maintained and administered by Associates Holdings, which is not currently a subsidiary of ours.
On the Sunset Date, KKR will acquire control of Associates Holdings and will commence making decisions regarding the allocation of carried interest pursuant to the limited partnership agreement of Associates Holdings. Until the Sunset Date, our Co-Founders will continue to make decisions regarding the allocation of carried interest to themselves and others, pursuant to the limited partnership agreement of Associates Holdings, provided that any allocation of carried interest to the Co-Founders will be on a percentage basis consistent with past practice. For more information see “Certain Relationships and Related Transactions, and Director Independence—Reorganization Agreement,” “Certain Defined Terms Used in this Report,” and “Business—Organizational Structure” in this report.
Participation in our carry pool for our senior employees, including our named executive officers, is generally subject only to service-based vesting with certain exceptions, including additional vesting upon death, disability or certain retirement events. In general, the vesting for carry pool allocations is over a four-year period (other than for our Co-Founders). Vesting serves as an employment retention mechanism and enhances the alignment of interests between a participant in our carry pool and the firm as well as the limited partners in our investment funds. Due to our Co-Executive Chairmen's status as Co-Founders of our firm, our Co-Founders are typically completely vested in their carry pool allocations upon grant.
Carry pool allocations after December 31, 2018, whether or not vested, are subject to forfeiture if the recipient violates his or her confidentiality and restrictive covenant agreement. See "—Narrative Disclosure to Summary Compensation Table and Grants of Plan‑Based Awards—Terms of Confidentiality and Restrictive Covenant Agreements."
Other Compensation
We have a program to match certain charitable donations made by our senior employees, including our executive officers, and we also pay for certain miscellaneous benefits for them, including tax preparation, financial planning services, and personal security services. In addition, our Co-Executive Chairmen are reimbursed by us for the use of a car and driver, and we pay for certain other miscellaneous benefits for them, including the compensation of certain personnel who administer personal matters for them. We believe that these benefits are appropriate in light of the time that they spend on our business, the limited compensation paid by us for their services and their unique status as Co-Founders of our firm.
Minimum Retained Ownership and Transfer Restrictions
While employed by us, unless waived in whole or in part, each of our named executive officers has a minimum retained ownership requirement obligating them to continue hold at least 25% of the cumulative amount of restricted holdings units that have satisfied the vesting conditions during the duration of his or her employment with the firm, unless waived. Upon vesting, restricted holdings units are also subject to additional restrictions, including transfer restrictions, which typically lasts for (1) one year with respect to one-half of the units vesting on such vesting date and (2) two years with respect to the other one-half of the units vesting on such vesting date.
Compensation and Risk
Our compensation program includes elements that we believe discourage excessive risk-taking and align the compensation of our employees with the long-term performance of the firm. For example, all compensation elements are allocated at the discretion of our firm or by our Co-Executive Chairmen or our Co-Chief Executive Officers based on the considerations described above, and a significant majority of the equity awards granted to our employees are subject to a multi-year vesting conditions, one- and two-year post-vesting transfer restriction periods and/or a minimum retained ownership requirement and subject to forfeiture in connection with the breach of certain restrictive covenant obligations. Because our equity awards typically have multi-year vesting provisions (in addition to market-based conditions for certain senior employees) the actual amount of compensation realized by the recipient will be tied to the long-term performance of our common stock. Pursuant to our internal policies, without the prior authorization of our Chief Legal Officer, our employees are not permitted to buy or sell derivative securities, including for hedging purposes, or to engage in short-selling to hedge their economic risk of ownership.
We only make cash payments of carried interest to our employees when profitable investments have been realized and after sufficient cash has been distributed to the investors in our funds. Carried interest, if any, from the carry pool in respect of any particular investment or fund is only paid in cash after all of the following are met: (i) a realization event has occurred (e.g., sale of a portfolio company, dividend, etc.); (ii) the vehicle has achieved positive overall investment returns since its inception, in excess of performance hurdles where applicable, and is accruing carried interest; and (iii) with respect to investments with a fair value below cost, cost has been returned to fund investors in an amount sufficient to reduce remaining cost to the investments' fair value. In addition, because the amount of carried interest payable is directly tied to the realized performance of the underlying investments, we believe this fosters a strong alignment of interests among the investors in those funds and the named executive officers, and thus benefits our stockholders.
2024 Summary Compensation Table
The following table presents summary information concerning compensation that was paid for services rendered by our named executive officers during the fiscal years ended December 31, 2022, 2023, and 2024.
In 2022, 2023, and 2024, our named executive officers received dividends on shares of common stock they hold. Because these dividends are not considered to be compensation, they are not reflected as compensation in the table below.
Carried interest distributions to our named executive officers from the carry pool for the years ended December 31, 2022, 2023, and 2024 are reflected in the All Other Compensation column in the table below. In each of 2022, 2023, and 2024, our Co-Chief Executive Officers were allocated total dollar values of carried interest that were identical to each other; the different amounts set forth below are due to historically different allocations of carried interest in respect of fund investments that generated investment proceeds in each respective year.
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | All Other Compensation ($) (2) | Total ($) | |||||||||||||||||||||||||||||||||||
| Henry R. Kravis | 2024 | 300,000 | — | — | 46,354,195 | (3) | 46,654,195 | ||||||||||||||||||||||||||||||||||
| Co-Executive Chairman | 2023 | 300,000 | — | — | 34,976,652 | 35,276,652 | |||||||||||||||||||||||||||||||||||
| 2022 | 300,000 | — | 29,991,767 | 78,055,688 | 108,347,455 | ||||||||||||||||||||||||||||||||||||
| George R. Roberts | 2024 | 300,000 | — | — | 44,820,455 | (4) | 45,120,455 | ||||||||||||||||||||||||||||||||||
| Co-Executive Chairman | 2023 | 300,000 | — | — | 34,918,579 | 35,218,579 | |||||||||||||||||||||||||||||||||||
| 2022 | 300,000 | — | 29,991,711 | 78,017,254 | 108,308,965 | ||||||||||||||||||||||||||||||||||||
| Joseph Y. Bae | 2024 | 300,000 | — | — | 72,787,375 | (5) | 73,087,375 | ||||||||||||||||||||||||||||||||||
| Co-Chief Executive Officer | 2023 | 300,000 | 13,000,000 | — | 36,659,449 | 49,959,449 | |||||||||||||||||||||||||||||||||||
| 2022 | 300,000 | 19,350,000 | — | 60,349,836 | 79,999,836 | ||||||||||||||||||||||||||||||||||||
| Scott C. Nuttall | 2024 | 300,000 | — | — | 63,895,805 | (6) | 64,195,805 | ||||||||||||||||||||||||||||||||||
| Co-Chief Executive Officer | 2023 | 300,000 | 13,000,000 | — | 33,807,444 | 47,107,444 | |||||||||||||||||||||||||||||||||||
| 2022 | 300,000 | 19,350,000 | — | 58,618,684 | 78,268,684 | ||||||||||||||||||||||||||||||||||||
| Robert H. Lewin | 2024 | 300,000 | — | — | 10,358,184 | (7) | 10,658,184 | ||||||||||||||||||||||||||||||||||
| Chief Financial Officer | 2023 | 300,000 | 5,200,000 | 15,975,000 | 4,469,737 | 25,944,737 | |||||||||||||||||||||||||||||||||||
| 2022 | 300,000 | 5,950,000 | — | 8,178,845 | 14,428,845 | ||||||||||||||||||||||||||||||||||||
| Dane E. Holmes | 2024 | 300,000 | 3,200,000 | — | 100,000 | (8) | 3,600,000 | ||||||||||||||||||||||||||||||||||
| Chief Administrative Officer | 2023 | 1,250 | — | 26,190,667 | 322,950 | 26,514,867 | |||||||||||||||||||||||||||||||||||
| (1) | Stock awards reflected in the table above for each year presented represent the value of the restricted holdings units granted in such reporting period and the grant of units in KKR Holdings ("KKR Holdings Units") prior to the acquisition of KKR Holdings by KKR in May 2022. Fair value of the restricted holdings units and KKR Holdings Units granted to our named executive officers are calculated in accordance with Accounting Standards Codification Topic 718, Compensation-Stock Compensation ("ASC Topic 718"). See Note 19 "Equity Based Compensation" in our consolidated financial statements included elsewhere in this report for additional information about the valuation assumptions with respect to all grants reflected in this column. These amounts reflect the aggregate grant date fair values calculated under ASC Topic 718, and may not correspond to the actual value that will be recognized by our named executive officers. | ||||||||||||||||||||||||||||||||||||||||
| (2) | Carried interest is presented on the basis of cash distributions received by our named executive officers in the respective fiscal year. We believe that presenting actual cash received by our named executive officers is a more representative disclosure of their compensation than presenting accrued carried interest, because carried interest is paid only if and when there are profitable realization events relating to the underlying investments. Carried interest also includes amounts retained and allocated for distribution to the respective named executive officer, but not yet distributed to the named executive officer, which could be used to fund potential future clawback obligations if any were to arise. | ||||||||||||||||||||||||||||||||||||||||
| (3) | Consists of $45,356,214 in cash distributions from the carry pool during 2024. For 2024, also consists of the following payments made by KKR: $184,056 related to the cost of Mr. Kravis' and his spouse's use of a car and driver during 2024; $667,125 related to certain personnel who administer personal matters for Mr. Kravis during 2024 (the entire cost of which is reported, because we do not separately track whether their time is spent for business or personal reasons); $25,000 related to financial planning services fees; $25,000 related to tax preparation fees; $36,800 related to personal security services; $50,000 of matching charitable donations; and up to $10,000 of benefits relating to healthcare costs. SEC rules require that transportation and other expenses not directly and integrally related to our business be disclosed as compensation to Mr. Kravis. KKR also paid certain amounts for the use for KKR business of aircraft owned by an entity controlled by Mr. Kravis as described in “Certain Relationships and Related Party Transactions, Director Independence – Firm Use of Private Aircraft.” From time to time, family members and other personal guests of Mr. Kravis may accompany him on flights or otherwise on business travel, for which KKR incurs no incremental out of pocket cost. | ||||||||||||||||||||||||||||||||||||||||
| (4) | Consists of $43,908,588 in cash distributions from the carry pool during 2024. For 2024, also consists of the following payments made by KKR: $198,582 related to the cost of Mr. Roberts' use of a car and driver during 2024; $603,285 related to certain personnel who administer personal matters for Mr. Roberts during 2024 (the entire cost of which is reported, because we do not separately track whether their time is spent for business or personal reasons); $25,000 related to financial planning services fees; $25,000 related to tax preparation fees; $50,000 of matching charitable donations; and up to $10,000 of benefits relating to healthcare costs. SEC rules require that transportation and other expenses not directly and integrally related to our business be disclosed as compensation to Mr. Roberts. KKR also paid certain amounts for the use for KKR business of aircraft owned by an entity controlled by Mr. Roberts as described in “Certain Relationships and Related Party Transactions, Director Independence – Firm Use of Private Aircraft.” From time to time, family members and other personal guests of Mr. Roberts may accompany him on flights or otherwise on business travel, for which KKR incurs no incremental out of pocket cost. | ||||||||||||||||||||||||||||||||||||||||
| (5) | Consists of $72,593,127 in cash distributions from the carry pool during 2024. For 2024, also consists of the following payments made by KKR: $25,000 related to financial planning services fees; $25,000 related to tax preparation fees, $38,320 relating to personal security services; $50,000 of matching charitable donations, and $55,928 relating to the provision of certain benefits disclosed in this footnote. From time to time, family members and other personal guests of Mr. Bae may accompany him on flights or otherwise on business travel, for which KKR incurs no incremental cost. | ||||||||||||||||||||||||||||||||||||||||
| (6) | Consists of $63,703,077 in cash distributions from the carry pool during 2024. For 2024, also consists of the following payments made by KKR: $25,000 related to financial planning services fees, $25,000 related to tax preparation fees, $36,800 relating to personal security services; $50,000 of matching charitable donations, and $55,928 relating to the provision of certain benefits disclosed in this footnote. SEC rules require that transportation and other expenses not directly and integrally related to our business be disclosed as compensation to Mr. Nuttall. KKR also paid certain amounts for the use for KKR business of aircraft owned by an entity controlled by Mr. Nuttall as described in “Certain Relationships and Related Party Transactions, Director Independence – Firm Use of Private Aircraft.” From time to time, family members and other personal guests of Mr. Nuttall may accompany him on flights or otherwise on business travel, for which KKR incurs no incremental out of pocket cost. | ||||||||||||||||||||||||||||||||||||||||
| (7) | Consists of $10,202,256 in cash distributions from the carry pool during 2024. For 2024, also consists of the following payments made by KKR: $25,000 related to financial planning services fees; $25,000 related to tax preparation fees; $50,000 of matching charitable donations; and $55,928 relating to the provision of certain benefits disclosed in this footnote. | ||||||||||||||||||||||||||||||||||||||||
| (8) | Consists of the following payments made by KKR: $25,000 related to financial planning services fees; $25,000 related to tax preparation fees; and $50,000 of matching charitable donations. | ||||||||||||||||||||||||||||||||||||||||
Grants of Plan-Based Awards in 2024
We made no new grants of plan-based awards to our named executive officers in 2024.
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Terms of KKR Holdings Units
On May 31, 2022, KKR completed the Reorganization Mergers contemplated by the Reorganization Agreement pursuant to which KKR acquired KKR Holdings and all of the KKR Group Partnership Units held by it. Before the completion of the Reorganization Mergers, certain of our named executive officers held interests in our business through KKR Holdings Units.
Pursuant to the Reorganization Agreement, 500,000 outstanding KKR Holdings Units held by each of Messrs. Kravis and Roberts and 1,455,000 outstanding KKR Holdings Units held by each of Messrs. Bae and Nuttall, each of which had previously been scheduled to vest on October 1, 2022, were accelerated to vest immediately prior to the closing of the Reorganization Mergers, and such KKR Holdings Units became vested and received their allocable share of the common stock in connection with the Reorganization Mergers. The two-year transfer restrictions applicable to such KKR Holdings Units continued to apply to the shares received in exchange therefor pursuant to the Reorganization Agreement until October 1, 2024 (with the customary one-year transfer restriction having expired on October 1, 2023). The 500,000 KKR Holdings Units held by each of Messrs. Kravis and Roberts were already considered fully vested given their age and years of service at KKR.
In addition, KKR Holdings allocated 1,150,000 KKR Holdings Units to each of Messrs. Bae and Nuttall, of which 30% had been subject to forfeiture had such executive not been employed by KKR on October 1, 2022 (except in the case of death or permanent disability). The number of KKR units allocated to Messrs. Bae and Nuttall was determined by Messrs. Kravis and Roberts, and the allocations were made as part of the Reorganization Mergers, which were approved by our board of directors following the recommendation of our conflicts committee. These KKR Holdings Units were exchanged for shares of common stock in connection with the Reorganization Mergers and were subject to customary one- and two-year transfer restrictions with the two-year transfer restriction through October 1, 2024 (with the customary one-year transfer restriction having expired on October 1, 2023). In addition, Messrs. Kravis and Roberts were authorized to allocate the balance of any outstanding and unallocated KKR Holdings Units, in their sole discretion, to themselves or others, on such terms as they determined, prior to the closing of the Reorganization Mergers. In May 2022, KKR Holdings allocated 535,185 and 535,184 KKR Holdings Units to each of Messrs. Kravis and Roberts, respectively, which were fully vested upon allocation.
Terms of Restricted Holdings Units
Restricted holdings units granted under our 2019 Equity Incentive Plan are equity awards, for which the number of shares of common stock in respect of such awards is subject to the overall limitation on the number of shares of common stock that may be awarded under the 2019 Equity Incentive Plan. The overall restricted holdings units program was approved by a committee of independent directors of our board of directors. KKR's independent directors are ineligible to receive restricted holdings units.
In general, restricted holdings units are subject to either (i) a service-based vesting condition with vesting in annual installments over a multi‑year period (generally three to five years) from a specified date, subject to the recipient's continued employment with us on the applicable vesting dates, subject to exceptions, or (ii) a market price-based vesting condition where the portion of the units that satisfies stock price target requirements will vest on a scheduled vesting date (generally five years from the grant date), subject to the recipient's continued employment with us on the scheduled vesting date, subject to exceptions. Certain restricted holdings units agreements may also contain additional vesting requirements.
Restricted holdings units provide the holder the ability, after vesting and the satisfaction of certain other conditions, to exchange them for shares of our common stock on a one-for-one basis (or at the discretion of KKR, cash in an amount equal to the fair market value of the shares of common stock that would otherwise be deliverable in such exchange). There is no tax receivable agreement in place for such exchange of restricted holdings units granted under the 2019 Equity Incentive Plan, and therefore, we will receive 100% of any tax benefits arising from the exchange of restricted holdings units granted under that plan. Prior to vesting, restricted holdings units are not entitled to any distributions from us. Following vesting, restricted holdings units become entitled to receive distributions from us. The amount of distribution per vested restricted holdings unit is equal to the amount distributed on one KKR Group Partnership Unit. To the extent that distributions are made on a KKR Group Partnership Unit that corresponds to a restricted holdings units that is not vested, such distribution amount will be allocated or otherwise applied in a manner we may determine in our discretion. Upon vesting, restricted holdings units are generally subject to additional restrictions, including transfer restrictions, which typically lasts for (1) one year with respect to one-half of the units vesting on such vesting date and (2) two years with respect to the other one-half of the units vesting on such vesting date, and minimum retained ownership requirements, which obligate the recipients to continuously hold at least 25% of their cumulatively vested restricted holdings units, unless waived. Transfer restricted units become fully vested and transferable and may be exchanged into shares of common stock at the end of the transfer restriction period if the holder is not terminated for cause and has complied with the terms of his or her confidentiality and restrictive covenant agreement during the transfer restrictions period. See "—Terms of Confidentiality and Restrictive Covenant Agreements" below.
Terms of Confidentiality and Restrictive Covenant Agreements
The confidentiality and restrictive covenant agreements with each of our named executive officers include prohibitions on them competing with us or soliciting our fund investors, clients or employees while employed by us and during a restricted period following their departure from the firm. These agreements also have non-disparagement obligations and require our named executive officers to protect and use the firm's confidential information only in accordance with confidentiality restrictions set forth in the agreement.
The restricted periods for our Co‑Executive Chairmen expire two years from termination for both the prohibitions on competition with us and the prohibitions on the solicitation of our fund investors, clients and employees. In cases where a Co-Executive Chairman is terminated involuntarily and for reasons not constituting cause, such periods are reduced to one year from termination. The restricted periods for our other named executive officers expire (1) in the case of the prohibitions on competition with us, 12 months from termination and (2) in the case of the prohibitions on the solicitation of our fund investors, clients, and employees, 15 months from termination. These agreements also require that we, and our Co-Executive Chairmen and other named executive officers, provide advance notice prior to termination of employment.
Our named executive officers (other than our Co‑Executive Chairmen) have entered into these confidentiality and restrictive covenant agreements with us through their restricted holdings unit grant agreements. Because our Co‑Executive Chairmen have not received any restricted holdings units from us, their confidentiality and restrictive covenant agreements were solely with KKR Holdings, which KKR acquired in May 2022.
Notwithstanding the foregoing, KKR complies with California's ban on non-competition provisions as provided in California Business and Professional Code Section 16600, and all terms relating to non-competition following the termination of a named executive officer's employment in California, are void.
Outstanding Equity Awards at 2024 Fiscal Year‑End
The following table sets forth information concerning unvested restricted holdings units for each of the named executive officers as of December 31, 2024.
| Stock Awards | |||||||||||||||||
| Name | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||
| Henry R. Kravis | — | $ | — | — | $ | — | |||||||||||
| George R. Roberts | — | $ | — | — | $ | — | |||||||||||
| Joseph Y. Bae | 8,500,000 (2) | $ | 1,257,235,000 | — | $ | — | |||||||||||
| Scott C. Nuttall | 7,500,000 (3) | $ | 1,109,325,000 | — | $ | — | |||||||||||
| Robert H. Lewin | 1,400,000 (4) | $ | 207,074,000 | — | $ | — | |||||||||||
| Dane E. Holmes | 366,667 (5) | $ | 54,233,716 | — | $ | — | |||||||||||
(1)These amounts are based on the closing market price of our common stock on the last trading day of the year ended December 31, 2024, which was $147.91 per share.
(2)Represents 1,000,000 restricted holdings units granted on February 18, 2021 ("2021 Grant"), the vesting of which was subject to the average closing price of our common stock during 20 consecutive trading days meeting or exceeding certain specified stock price targets ranging from $45.00 to $70.00, all of which were achieved prior to December 31, 2021. These 2021 Grant restricted holdings units will vest on May 1, 2026 if the named executive officer continues to serve as an employee until that date, subject to certain exceptions. Additionally, represents 7,500,000 restricted holdings units granted on December 9, 2021, the vesting of which was subject to the average closing price of our common stock during 20 consecutive trading days meeting or exceeding certain specified stock price targets ranging from $95.80 to $135.80, all of which were achieved prior to December 31, 2024. These restricted holdings units will vest on December 31, 2026 if the named executive officer continues to serve as an employee until that date, subject to certain exceptions.
(3)Represents 7,500,000 restricted holdings units granted on December 9, 2021, the vesting of which was subject to the average closing price of our common stock during 20 consecutive trading days meeting or exceeding certain specified stock price targets ranging from $95.80 to $135.80, all of which were achieved prior to December 31, 2024. These restricted holdings units will vest on December 31, 2026 if the named executive officer continues to serve as an employee until that date, subject to certain exceptions.
(4)Represents 900,000 restricted holdings units granted on February 18, 2021, the vesting of which was subject to the average closing price of our common stock during 20 consecutive trading days meeting or exceeding certain specified stock price targets ranging from $45.00 to $70.00, all of which were achieved prior to December 31, 2021. These restricted holdings units will vest on May 1, 2026 if the named executive officer continues to serve as an employee until that date, subject to certain exceptions. Additionally, represents 500,000 restricted holdings units granted on August 4, 2023, the vesting of which was subject to the average closing price of our common stock during 20 consecutive trading days meeting or exceeding certain specified stock price targets ranging from $95.80 to $135.80, all of which were achieved prior to December 31, 2024. These restricted holdings units will vest on December 31, 2028 if the named executive officer continues to serve as an employee until that date, subject to certain exceptions.
(5)Represents (i) 166,667 restricted holdings units granted on December 29, 2023, which will vest in five equal annual installments on each May 1st from May 1, 2025 through May 1, 2029, subject to the named executive officer’s continued service as an employee on each vesting date. Additionally, represents 200,000 restricted holdings units granted on December 29, 2023, the vesting of which was subject to the average closing price of our common stock during 20 consecutive trading days meeting or exceeding certain specified stock price targets ranging from $95.80 to $135.80, all of which were achieved prior to December 31, 2024. These restricted holdings units will vest on December 31, 2028 if the named executive officer continues to serve as an employee until that date, subject to certain exceptions.
Option Exercises and Stock Vested in 2024
The following table sets forth information concerning the vesting of restricted holdings units held by each of our named executive officers during the year ended December 31, 2024.
| Stock Awards | |||||||||||||||||||||||||||||||||||
| Name | Number of Shares Acquired on Vesting (#) (1) | Value Realized on Vesting ($) (2) | |||||||||||||||||||||||||||||||||
| Henry R. Kravis | — | $ | — | ||||||||||||||||||||||||||||||||
| George R. Roberts | — | $ | — | ||||||||||||||||||||||||||||||||
| Joseph Y. Bae | — | $ | — | ||||||||||||||||||||||||||||||||
| Scott C. Nuttall | — | $ | — | ||||||||||||||||||||||||||||||||
| Robert H. Lewin | — | $ | — | ||||||||||||||||||||||||||||||||
| Dane E. Holmes | 33,333 | $ | 4,328,957 | ||||||||||||||||||||||||||||||||
(1)The amounts reflected in this column represent restricted holdings units, a portion of which are subject to one- and two-year transfer restrictions upon vesting. See "—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table" for additional terms, including with respect to the transfer of certain restrictions from the restricted stock units to employees' restricted holdings units.
(2)These amounts are based on the closing market price of our common stock on each respective vesting date.
Pension Benefits for 2024
We provided no pension benefits during the fiscal year ended December 31, 2024.
Nonqualified Deferred Compensation for 2024
We provided no defined contribution plan for the deferral of compensation on a basis that is not tax‑qualified during the fiscal year ended December 31, 2024.
Potential Payments Upon Termination or Change in Control
Upon termination of employment (other than due to death or permanent disability), vesting generally ceases for restricted holdings units that have not vested. In addition, transfer-restricted vested restricted holdings units remain subject to transfer restrictions for one- and two-year periods, except as described below. See "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" for additional information regarding the common stock held by our named executive officers.
In general, a named executive officer who retires after the first date on which his or her age plus years of service to KKR equals 80 ("qualified retirement") will generally (i) vest in his or her unvested restricted holdings units (for those with service based vesting conditions) that would otherwise vest within two years following retirement and (ii) vest in a pro rata portion of his or her unvested and restricted holdings units (for those with market price based vesting conditions) that satisfied the stock price target requirements at the time of qualified retirement, in each case, subject to compliance, if applicable, with the requirement that the holder not violate the terms and conditions of his or her confidentiality and restrictive covenants during the period in which such restricted holdings units, if applicable, remains transfer restricted over the one- and two-year periods from the original vesting date. However, the additional vesting terms upon a qualified retirement do not apply to the restricted holdings units awarded to the Co-Chief Executive Officers in December 2021.
Upon death or permanent disability, generally (i) a holder of restricted holdings units (for those with service based vesting conditions) will become vested with respect to service based vesting conditions in all restricted holdings units, respectively, and (ii) a holder of restricted holdings units (for those with market price based conditions) will be eligible to vest in a pro rata portion of his or her unvested restricted holdings units that satisfy the stock price target requirements at a prescribed time, which include the time of death or permanent disability or at the end of the service based vesting requirement. Upon vesting, restricted holdings units will become permitted to be exchanged into shares of common stock after the applicable transfer restrictions following vesting have lapsed. In addition, upon a change in control of KKR, a holder of restricted holdings units may become immediately vested in all unvested restricted holdings units. The values of unvested restricted holdings units held by the named executive officers as of December 31, 2024 are set forth above in "—Outstanding Equity Awards at 2024 Fiscal Year-End."
Upon termination of employment, vesting generally ceases for carried interest allocations, some of which are subject to forfeiture for breach of the confidentiality and restrictive covenant agreement, to the extent permitted under applicable law. In addition, carried interest allocations generally become immediately vested upon death or disability, and certain carried interest allocations permit additional vesting upon retirement.
Pay Ratio Disclosure
For the fiscal year ended December 31, 2024:
-
the median of the annual total compensation of all employees of our company (other than Messrs. Bae and Nuttall, who are our Co-Chief Executive Officers as of December 31, 2024) was $210,000;
-
the annual total compensation of Messrs. Bae and Nuttall were $73,087,375 and $64,195,805, respectively; and
-
the ratio of the averaged annual total compensation of our Co-Chief Executive Officers to the median of the annual total compensation of all other employees was 327 to 1.
To identify the median employee for the purpose of providing the information above, we examined the compensation of all our current employees (other than our Co-Chief Executive Officers) as of December 31, 2024, using, based on our payroll records, a consistently applied compensation measure consisting of such employees' annual salary, annual cash bonus, actual overtime, carried interest payouts, and equity granted. Employees on unpaid leave of absence and employees who were not part of the regular year-end compensation process are each excluded from the calculation. Compensation of employees who were employed for less than the full year of 2024 were annualized only if they were part of the regular year-end compensation process. We reviewed all compensation in U.S. dollars, using the relevant exchange rate for any compensation paid in other currencies. After identifying the median employee, we calculated annual total compensation for such employee using the same methodology we use for our principal executive officers as set forth in "—2024 Summary Compensation Table." As noted in “—Compensation Discussion and Analysis," distributions from KKR Holdings and dividends paid on shares of common stock are not considered compensation and accordingly are not included in the pay ratio calculation above. The above CEO pay ratio represents a reasonable good faith estimate, calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above.
Director Compensation
We limit compensation for service on our board of directors to the independent directors. During 2024, each independent director received (1) an annual cash retainer of $130,000, (2) an additional annual cash retainer of $15,000 if such independent director is a member of the nominating and corporate governance committee, (3) an additional annual cash retainer of $25,000 if such independent director is a member of the audit committee and an additional annual cash retainer of $25,000 (in addition to the annual cash retainer as a member of the audit committee) if such independent director serves as the chairman of the audit committee, (4) an additional annual cash retainer of $15,000 if such independent director is a member of the conflicts committee, and an additional annual cash retainer of $15,000 (in addition to the annual cash retainer as a member of the conflicts committee) if such independent director serves as the chairman of the conflicts committee, and (5) an additional annual cash retainer of $20,000 if such independent director is a member of the risk committee and an additional annual cash retainer of $20,000 (in addition to the annual cash retainer as a member of the risk committee) if such independent director serves as the chairman of the risk committee.
Cash retainers are pro-rated if, during the fiscal year, a director joins or resigns from the board of directors, a director joins or resigns from a committee or the amount of a retainer is increased or decreased. In addition, on December 12, 2024, restricted stock units were granted to each independent director pursuant to our 2019 Equity Incentive Plan.
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | Total ($) | ||||||||
| Adriane M. Brown | 150,000 | 191,915 | 341,915 | ||||||||
| Matthew R. Cohler | 195,000 | 191,915 | 386,915 | ||||||||
| Mary N. Dillon | 165,000 | 191,915 | 356,915 | ||||||||
| Arturo Gutiérrez Hernández | 145,000 | 191,915 | 336,915 | ||||||||
| Xavier B. Niel | 130,000 | 191,915 | 321,915 | ||||||||
| Kimberly A. Ross | 131,302 | 191,915 | 323,217 | ||||||||
| Patricia F. Russo | 170,000 | 191,915 | 361,915 | ||||||||
| Robert W. Scully | 225,000 | 191,915 | 416,915 | ||||||||
| Evan T. Spiegel | 130,000 | 191,915 | 321,915 | ||||||||
(1)Represents the aggregate grant date fair value of restricted stock units granted to each of the independent directors during the year ended December 31, 2024 as calculated in accordance with ASC Topic 718. See Note 19 "Equity Based Compensation" in our consolidated financial statements included elsewhere in this report for additional information about the valuation assumptions with respect to all grants reflected in this column. These amounts reflect the aggregate grant date fair values calculated under ASC Topic 718 and may not correspond to the actual value that will be recognized by the independent directors.
The following table details grants of restricted stock units to each independent director in the year ended December 31, 2024. The table includes the grant date and grant date fair value of 2024 restricted stock units and the aggregate number of unvested restricted stock units as of December 31, 2024 owned by each independent director who served as a director during the year ended December 31, 2024:
| Name | Grant Date (1) | Stock Awards (#) | Grant Date Fair Value ($) (2) | Total Number of Unvested Stock Awards on December 31, 2024 (#) | ||||||||||
| Adriane M. Brown | 12/12/2024 | 1,238 | 191,915 | 1,238 | ||||||||||
| Matthew R. Cohler | 12/12/2024 | 1,238 | 191,915 | 1,238 | ||||||||||
| Mary N. Dillon | 12/12/2024 | 1,238 | 191,915 | 1,238 | ||||||||||
| Arturo Gutiérrez Hernández | 12/12/2024 | 1,238 | 191,915 | 1,238 | ||||||||||
| Xavier B. Niel | 12/12/2024 | 1,238 | 191,915 | 1,238 | ||||||||||
| Kimberly A. Ross | 12/12/2024 | 1,238 | 191,915 | 1,238 | ||||||||||
| Patricia F. Russo | 12/12/2024 | 1,238 | 191,915 | 1,238 | ||||||||||
| Robert W. Scully | 12/12/2024 | 1,238 | 191,915 | 1,238 | ||||||||||
| Evan T. Spiegel | 12/12/2024 | 1,238 | 191,915 | 1,238 | ||||||||||
(1)The restricted stock units were granted on December 12, 2024 and will vest on December 1, 2025, subject to the grantee's continued service through the vesting date. The grants were each approved by the board of directors on December 11, 2024.
(2)Represents the grant date fair value of restricted stock units granted to each of the independent directors during the year ended December 31, 2024 as calculated in accordance with ASC Topic 718. See Note 19 "Equity Based Compensation" in our consolidated financial statements included elsewhere in this report for additional information about the valuation assumptions with respect to all grants reflected in this column. These amounts reflect the aggregate grant date fair values calculated under ASC Topic 718 and may not correspond to the actual value that will be recognized by the independent directors.
KKR & Co. Inc. Equity Incentive Plan
Our outstanding equity awards were granted under the Amended and Restated KKR & Co. Inc. 2019 Equity Incentive Plan, which we refer to as our 2019 Equity Incentive Plan. Following the effectiveness of our 2019 Equity Incentive Plan, it is our only plan for providing equity awards. Our 2019 Equity Incentive Plan has a term of 10 years from the effective date.
Administration
Our board of directors or a committee or subcommittee thereof administers or will administer, as applicable, our Equity Incentive Plan (the "Administrator"). The Administrator has the authority to make all decisions, determinations and interpretations with respect to the administration of our 2019 Equity Incentive Plan, including determining who will receive awards thereunder, the number of shares of common stock underlying the awards and the terms and conditions of the awards, and is permitted, subject to applicable law, to delegate all or any part of its responsibilities and powers to any employee or employees selected by it in accordance with the terms of the 2019 Equity Incentive Plan. The board of directors authorized its executive committee (consisting of Messrs. Kravis and Roberts) to act as the Administrator under the 2019 Equity Incentive Plan, provided that (i) the Executive Committee is not authorized to make grants with respect to our executive officers without approval of the board of directors and (ii) the board of directors reserved the power and authority to act as the Administrator and to modify the power and authority of the Executive Committee under the 2019 Equity Incentive Plan.
Common Stock Subject to the Plan
As of December 31, 2024, 48,929,325 shares of common stock were available for issuance in respect of outstanding awards and the grant of future awards, representing 15% of the Diluted Common Shares outstanding at the close of business on December 31, 2024, minus the number of shares underlying any outstanding equity awards granted under our 2019 Equity Incentive Plan that have not yet been delivered upon vesting. Under the 2019 Equity Incentive Plan, the aggregate number of shares of common stock available under the plan will be increased, on the first day of each fiscal year, by a number of shares of common stock equal to the positive difference, if any, between (x) 15% of the number of Diluted Common Shares outstanding at the close of business on the last day of the immediately preceding fiscal year minus (y) the number of shares of common stock available for issuance in respect of outstanding awards and the grant of future awards, in each case, under our 2019 Equity Incentive Plan as of the last day of such year, unless the Administrator in its sole discretion should decide to increase the number of shares of common stock available under the plan by a lesser amount on any such date. As a result, on the first day of each fiscal year, the number of shares of common stock available for issuance of future awards under our 2019 Equity Incentive Plan will be adjusted upwards to 15% of the number of Diluted Common Shares outstanding at the close of business on the last day of the immediately preceding fiscal year, minus the number of shares underlying any outstanding equity awards granted under our 2019 Equity Incentive Plan that have not yet been delivered upon vesting. Therefore, we expect that the number of shares of common stock available for issuance of future awards under our 2019 Equity Incentive Plan will increase at the beginning of each fiscal year compared to the end of the immediately preceding fiscal year if, during the immediately preceding year, there has been (i) any increase in the aggregate number of shares of common stock and KKR Group Partnership Units outstanding or (ii) any delivery of underlying shares upon vesting of outstanding equity awards under our 2019 Equity Incentive Plan.
Restricted Stock Units and Other Equity-Based Awards
The Administrator may grant or sell awards of restricted stock units, restricted holdings units, common stock, restricted common stock, deferred restricted common stock, phantom restricted common stock, or any other awards that are valued in whole or in part by reference to, or are otherwise based on the fair market value of, our common stock. Any of these or other equity-based awards may be in such form, and dependent on such conditions, as the Administrator determines, including the right to receive, or vest with respect to, one or more shares of common stock (or the equivalent cash value of such shares) upon the completion of a specified period of service, the occurrence of an event and/or the attainment of performance objectives. The Administrator may determine whether any such equity-based awards will be payable in cash, shares of common stock or other assets or a combination of cash, common stock and other assets.
Options and Stock Appreciation Rights
The Administrator may award non-qualified stock options and stock appreciation rights. Options and stock appreciation rights granted under the 2019 Equity Incentive Plan will become vested and exercisable at such times and upon such terms and conditions as may be determined by the Administrator at the time of grant, but no option or stock appreciation right will be exercisable for a period of more than ten years after it is granted. The exercise price per share will be determined by the Administrator, provided that options and stock appreciation rights granted to participants who are U.S. taxpayers will not be granted with an exercise price less than 100% of the fair market value per share of common stock on the date of grant. To the extent permitted by the Administrator, the exercise price of an option may be paid in cash or its equivalent, in shares of common stock having a fair market value equal to the aggregate exercise price and satisfying such other requirements as may be imposed by the Administrator, partly in cash and partly in shares of common stock or net settlement in shares of common stock. As determined by the Administrator, stock appreciation rights may be settled in shares of common stock, cash or any combination thereof.
Compensation Committee Interlocks and Insider Participation
Because we are a "controlled company" within the meaning of the corporate governance standards of the NYSE, our board of directors is not required by NYSE rules to establish a compensation committee. Messrs. Kravis and Roberts, our Co-Executive Chairmen, participated in discussions regarding executive compensation, and Messrs. Bae and Nuttall, our Co-Chief Executive Officers, participated in discussions regarding the compensation of our other executive officers. For a description of certain transactions between us and our executive officers and directors, see "Certain Relationships and Related Transactions, and Director Independence."
Compensation Committee Report
Our board of directors does not have a compensation committee. The entire board of directors has reviewed and discussed with management the foregoing Compensation Discussion and Analysis and, based on such review and discussion, has determined that the Compensation Discussion and Analysis should be included in this report.
| Henry R. Kravis | |||||
| George R. Roberts | |||||
| Joseph Y. Bae | |||||
| Scott C. Nuttall | |||||
| Adriane M. Brown | |||||
| Matthew R. Cohler | |||||
| Mary N. Dillon | |||||
| Arturo Gutiérrez Hernández | |||||
| Xavier B. Niel | |||||
| Kimberly A. Ross | |||||
| Patricia F. Russo | |||||
| Robert W. Scully | |||||
| Evan T. Spiegel | |||||
Previous: Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE · Next: Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS