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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
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Filed by the Registrant |
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Filed by a Party other than the Registrant |
| Check the appropriate box: |
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14A-6(E)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under §240.14a-12 |
KBR, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if
other than the Registrant)
| Payment of Filing Fee (Check all boxes that apply): |
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No fee required. |
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Fee paid previously with preliminary materials. |
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Table of Contents
About KBR
We deliver science, technology
and engineering solutions to governments and companies around the world. KBR employs approximately 38,000 people performing multi-faceted,
complex and mission-critical roles in over 29 countries.
With a full portfolio of services, proprietary technologies
and expertise, our employees are ready to handle projects and missions from planning and design to sustainability and maintenance.
Whether at the bottom of the ocean or in outer space, our clients trust us to deliver the impossible on a daily basis.
Table of Contents
STUART J. B. BRADIE
President and Chief Executive Officer
At
KBR, We Deliver.
Our
people are helping our customers solve their greatest challenges.
$21.2B
In backlog and options
at the end of fiscal 2024
0.050 TRIR
Exceptional total recordable
incident rate
March 31, 2025
Dear
KBR Stockholders,
In 2024, the 38,000
people of KBR once again achieved exceptional financial, operational, safety and sustainability results, delivering dynamic, digitally-enabled
solutions and creating value for our stakeholders – all while navigating an increasingly challenging environment globally. Every
day, around the clock, all around the world, our people are helping our customers solve their greatest challenges. In short, we
do things that matter.
2024
Key Highlights
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Delivered 11% revenue growth and 16% adjusted
EBITDA(1) growth |
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Achieved backlog and options of $21.2 billion with
1.1x TTM book-to-bill(2) |
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Maintained our industry-leading safety record with
94% incident-free days and an exceptional total recordable incident rate (TRIR) of 0.050 |
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Acquired LinQuest, adding key capabilities for national
security and military space missions |
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Enabled Plaquemines’ first production of liquefied
natural gas (LNG) in December, representing an industry benchmark for speed to market |
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Received MSCI’s AAA sustainability ranking, the highest level achievable,
for the second year in a row |
During the year, we worked collaboratively and drove
commercial excellence; key contract-related highlights include:
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Secured 7 ammonia projects through the year
across the globe with awards in grey, blue and green ammonia. |
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Awarded the U.S. State Department Task Order for Medical Support
Services in Iraq delivering on our strategy to expand customers in our Readiness and Sustainment business. |
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Awarded over $1.5 billion via the Information Analysis Center Multiple
Award Contract (IAC MAC) vehicle within our Defense and Intelligence business. This included awards supporting critical technology
areas of trusted Artificial Intelligence (Al) and autonomy, integrated sensing and cyber, advanced computing and hypersonic
vehicle test. |
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Signed the reimbursable LNG contract for Energy Transfer LP’s
Lake Charles project. |
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Successfully transitioned the Heavy Transport Contract from a private
finance initiative project (PFI) into a commercial contract with the UK government. |
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Secured expansion contracts for the SSN-AUKUS submarine program
in Australia and via KBR’s Frazer-Nash Consultancy in the UK putting KBR at the heart of this important national security
program. |
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Closed the LinQuest acquisition in Q3; announced over $1 billion
of Indefinite Delivery Indefinite Quantity (IDIQ) awards in the areas of military space, model-based systems engineering and
interoperability. |
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Secured multiple contracts supporting our strategic growth in human
health within our Science and Space business. |
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Added talent across KBR, with a focus on growth markets, including
the Middle East and India; attrition was down markedly. |
Our wins demonstrate the breadth, depth and global
nature of our complex execution capabilities, and these are only a few examples of how our people are going above and beyond for
our customers and doing things that matter. With our unique capabilities, KBR is well-positioned to benefit from secular growth
trends, specifically global defense, digitalization and sustainability.
| (1) |
A
reconciliation of adjusted EBITDA to net income attributable to KBR is provided under “Non-GAAP Financial Information.” |
| (2) |
Book-to-bill
excludes long-term UK private finance initiative (PFI) projects and the Plaquemines LNG project. |
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2025
Proxy Statement 1
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Table of Contents
A Company Advancing
We continue to evolve our business to support our
long-term strategy of providing differentiated, innovative, up-market science, technology and engineering solutions to government
and commercial customers globally.
Our strategy comprises four key pillars:
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Thrive and Expand in Core Markets and New Geographies
– Capture Breakout Growth |
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Deliver Technical, Digital and Process Innovation – Create Customer
Intimacy |
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Drive Operational Excellence Globally –
Achieve Industry-leading Margins |
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Deploy Capital Effectively – Generate Strong Returns |
The acquisition of LinQuest closed in September 2024,
strengthening our already formidable Mission Technology Solutions(3) segment with additional advanced engineering, data analytics,
digital integration and national security space expertise. We were proud to welcome the approximately 1,550 LinQuest employees
to the KBR family and are already seeing tangible synergies as we work to integrate our companies in support of offering a differentiated
value proposition to customers.
To advance our strategic direction, in early 2025,
we completed a realignment of our portfolio, comprising our two market-facing segments: Mission Technology Solutions and Sustainable
Technology Solutions. Our actions align capabilities and talent to customers and end markets; increase cross-business connectivity,
opening a pipeline to additional opportunities; and achieve structural cost savings and a more efficient cost base to support
continued profitable growth as we scale.
Looking ahead to 2025 and beyond, there’s much
to be excited about. Our vision and mission are clear. Our strategy is sound. KBR is poised to go further than ever before. And
our people are ready.
I would like to close on a personal note. General Lester Lyles, USAF (Ret.) is stepping down from the KBR
Board of Directors, on which he has served for the past 17 years. His intelligence, integrity, wisdom and sense of duty have been
constant and vital in helping shape KBR’s trajectory. I want to thank Les for his service, his contributions and his friendship.
Finally, on behalf of the KBR Board, I would like
to thank you, our stockholders. KBR couldn’t do the important work it does without you. We remain committed to fostering connection
and transparency with you and to delivering successes that reward your trust in us. We welcome your views and encourage you to
vote, which you may promptly do via phone or internet, or by mailing your completed and signed voting card.
Thank you again for your interest and support.
Sincerely,
Stuart J. B. Bradie
KBR Board Chair-Elect, President and Chief Executive
Officer
| (3) |
Formerly
Government Solutions |
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2 2025
Proxy Statement
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www.kbr.com |
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Table of Contents
Notice of Annual Meeting of Stockholders
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When |
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Place |
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Time |
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Wednesday
May 14, 2025 |
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The Annual Meeting will be completely virtual and only conducted via live webcast at virtualshareholdermeeting.com/KBR2025.
There will be no physical meeting location. |
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10:00 a.m.
Central Daylight Time |
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We invite you to attend KBR’s virtual annual
stockholders’ meeting and act upon the following matters:
| Proposals |
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Board Vote Recommendation |
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For Further Details |
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Elect as directors the ten nominees named in the attached proxy statement. |
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“FOR”
each director nominee |
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Page 13 |
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Consider and act upon an advisory vote to approve the named executive officer compensation as described in the Compensation
Discussion and Analysis. |
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“FOR” |
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Page 55 |
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Ratify the appointment of KPMG LLP as the independent registered public accounting firm to audit KBR’s consolidated
financial statements for the fiscal year ending January 2, 2026. |
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“FOR” |
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Page 103 |
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Approve the adoption of the Amended and Restated Certificate of Incorporation to, among other things, limit the liability
of certain officers of the Company as permitted by recent amendments to Delaware law. |
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“FOR” |
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Page 104 |
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Transact any other business that properly
comes before the meeting or any adjournment or postponement of the meeting. |
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The Proxy Statement that follows describes these items.
By Order of the Board of Directors, March 31, 2025
Sonia Galindo
Executive Vice President, General Counsel & Corporate Secretary
RECORD DATE
The record date for determining which stockholders
are entitled to cast votes at the virtual Annual Meeting and at any adjournment or postponement of the meeting is Monday, March
17, 2025.
HOW TO VOTE
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Check
out our 2025 Notice of Annual Stockholder Meeting, online Proxy Statement, Annual Report and Sustainability Report at:
proxyvote.com
kbr.com/proxy
kbr.com/annualreport
kbr.com/sustainabilityreport |
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Via the Internet at
proxyvote.com(1) |
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Mail your signed
proxy card. |
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Call toll-free
(US/Canada)
at 1-800-690-6903(1) |
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Virtually during the Annual Meeting through virtualshareholdermeeting.com/KBR2025.
See page 105 for instructions. |
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If you hold your shares through a broker
or bank rather than directly with KBR, check with your broker or bank to see if telephone or Internet voting is available
to you. Voting via the Internet or toll-free call is open until 11:59 p.m. EDT on May 13. |
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2025
Proxy Statement 3
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Table of Contents
Table of Contents
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Proxy Statement
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Proxy Summary
Business Highlights
| $8.8B |
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1.1x |
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$462MM |
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>75% |
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| Bookings and options(1) awarded in 2024 – provides greater visibility
of long-term growth targets |
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Trailing-twelve-months
book-to-bill(1) as of January 3, 2025 |
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Operating cash flows generated in 2024 |
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Work under contract for 2025 |
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Completed LinQuest
Acquisition
Expands KBR’s digital, national security space
and intelligence capabilities. LinQuest is a leading provider of advanced engineering, data analytics and digital integration
with a strong history of solving complex technical challenges for national security and military space missions. Announced
over $1 billion of Indefinite Delivery Indefinite Quantity (IDIQ) awards in the areas of military space, model-based systems
engineering and interoperability in 2024. |
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Plaquemines LNG Production
Already Underway
Plaquemines liquefied natural gas (LNG) project produced first LNG in December 2024, representing
an industry benchmark for speed to market. |
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Heavy Transport Contract
Transitioned from PFI to UK Government Commercial Contract
Successfully transitioned the Heavy Transport
Contract from a private finance initiative project (PFI) into a commercial contract with the UK government. |
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> $1.5 Billion Awarded
Via IAC MAC
Awarded over
$1.5 billion via the Information Analysis Center Multiple Award Contract
(IAC MAC) vehicle within KBR’s Defense and Intelligence business.
This included awards supporting critical technology areas of trusted Artificial Intelligence (AI) and autonomy, integrated sensing
and cyber, advanced computing, and hypersonic vehicle test. |
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Secured Expansion Contracts
for SSN-AUKUS Submarine Program
KBR will continue delivering technical design services at HMAS Stirling by the Security and Estate
Group and the Australian Submarine Agency. This work will support the sovereign nuclear-powered submarines facilities
and infrastructure program, enabling the Submarine Rotational Force (SRF) – West, and accelerating Australia’s ability
to safely own, operate, maintain and sustain its own future nuclear powered submarine fleet. |
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Awarded U.S. State Department
Task Order for Medical Support Services in Iraq
Awarded new time and material (T&M), cost-reimbursable
task order by the U.S. Department of State to provide medical support services to over 4,000 personnel in Iraq. The task
order has a $187 million ceiling and falls under the Diplomatic Platform Support Services contract. KBR will operate a
Diplomatic Support Hospital and four clinics supporting the U.S. Embassy in Iraq. |
(1) Book-to-bill and bookings and options exclude long-term
UK PFIs and the Plaquemines LNG project.
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2025
Proxy Statement 5
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Table of Contents
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Proxy Summary |
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Financial Highlights |
Financial Highlights
| REVENUE |
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DILUTED EARNINGS PER SHARE |
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OPERATING CASH FLOWS |
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| ADJUSTED EBITDA* |
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ADJUSTED EARNINGS PER SHARE** |
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ADJUSTED OPERATING CASH FLOWS*** |
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| * |
Adjusted EBITDA is defined as Net income (loss) attributable
to KBR, plus Interest expense; Accretion of Convertible Notes debt discounts; Other non-operating expense (income);
Provision for income taxes; Depreciation and amortization; and certain discrete items as identified by management to be non-recurring
in nature. A reconciliation of adjusted EBITDA to net income is provided under the section titled “Non-GAAP Financial
Information” at the end of this proxy statement. |
| ** |
Diluted EPS reflects our Net income (loss) attributable to KBR divided
by the weighted average number of common shares outstanding during the period in addition to common shares that would have
been outstanding if potential common shares with a dilutive effect had been issued. Adjusted EPS excludes certain amounts
included in diluted EPS. A reconciliation of adjusted EPS to diluted EPS is provided under the section titled “Non-GAAP
Financial Information” at the end of this proxy statement. |
| *** |
Adjusted operating cash flows exclude certain amounts included in
the cash flows provided by operating activities calculated in accordance with Generally Accepted Accounting Principles (“GAAP”).
The most directly comparable financial measure calculated in accordance with GAAP is cash flows provided by operating activities.
A reconciliation of adjusted operating cash flows to cash flows provided by operating activities is provided under the section
titled “Non-GAAP Financial Information” at the end of this proxy statement. |
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Returned $297 million of value to shareholders through share repurchases and dividends |
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DIVIDENDS PAID
OUT IN 2024 |
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TSR PEER GROUP 3-YEAR RANKING
2022-2024 |
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QUARTERLY DIVIDEND
INCREASE IN 2024 |
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$79MM |
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4TH |
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11.1% |
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6 2025
Proxy Statement
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www.kbr.com |
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| Proxy
Summary |
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| Sustainability Highlights |
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Sustainability Highlights
To reach our vision of ‘delivering a safer, more secure and
sustainable world’ we are driving sustainability deep into our DNA, from the highest level of the organization through our
business strategy and into our operations. Our dedication to creating positive impact for the planet and for people is delivered
both through the innovative and sustainable solutions we offer our clients and in the way we conduct our day-to-day business, all
of which contribute to the creation of long-term success, growth, business resilience, and shared prosperity for all.
We continue to increase our sustainability-focused revenue through
the delivery of our sustainable solutions to the key governments and customers we serve, and in 2023 our sustainability-linked
revenue reached 37% of our total revenue, representing a 3% increase from the previous year.
Strengthening this sustainability
drive is our short-term incentive plan with a sustainability performance weighting of 10%. This metric measures executive and senior
leadership performance against the success of our Sustainability Pillars, including safety and environmental management.
With an aim to further enhance our business resilience and future-proof
the organization, we established processes to give due consideration to sustainability risks and opportunities that influence both
our operations and the markets in which we operate, by embedding these factors into our COSO based enterprise risk management system.
We are proud of our employees’ dedication to aiming for Zero
Harm in all that they do 24/7 and continuing to reach new heights in our aim for Zero Harm (incident free) days. In 2024, we reached
a new record of 94% incident free days and recorded another consecutive year of industry-leading HSSE performance with a total
recordable incident rate (“TRIR”) of 0.050.
The success of all this work is reflected in the external recognition
we continue to receive as highlighted below.
Key Recognitions
Key Sustainability Achievements
More information on Sustainability and KBR is provided
on page 48.
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2025
Proxy Statement 7
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Table of Contents
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Proxy
Summary |
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Information About
the Board of Directors |
Information
About the Board of Directors
The KBR Board of Directors is currently composed of ten directors with
an extensive variety of skills, expertise, and experience who guide and support our strategy to create long-term value for
our stockholders and other stakeholders. Each of our directors is independent except Mr. Bradie, our CEO. On December 17,
2024, General Lester Lyles, USAF (Ret.) notified our Board of Directors of his decision to retire from service on the Board
of Directors, effective as of the conclusion of this Annual Meeting. Also effective as of the conclusion of this
Annual Meeting, Mr. Bradie will begin service as the new Chair of our Board of Directors, and Lt. General Wendy Masiello,
USAF (Ret.) will begin service as the new Lead Independent Director of our Board of Directors. The Lead Independent Director
role is a new position created to ensure the continued effectiveness of our independent directors, whereby the Lead
Independent Director will act as a liaison between the CEO and Chair and the other directors, assess the performance and
succession planning of the CEO and Chair, provide a meaningful point of contact for shareholders to raise concerns and ask
questions, and help maintain KBR’s strong corporate governance by providing independent oversight and facilitating
effective communication and building consensus within our Board of Directors. To fill the vacancy due to General
Lyles’ retirement, on March 12, 2025, our Board of Directors nominated Lewis F. Von Thaer for election at our 2025
Annual Meeting of Stockholders.
 KBR’s
Board of Directors from left: Joseph Dominguez, Lynn Dugle, Jack Moore, Ann Pickard, Stuart Bradie, General Lester Lyles, USAF (Ret.), Lt. General Wendy Masiello, USAF (Ret.), Sir John Manzoni KCB, Carlos Sabater, and Nchacha Etta.
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Stuart Bradie |
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General Lester Lyles, USAF (Ret.) |
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President and Chief Executive Officer, KBR, Inc.
Age: 58
Director since: 2014
Committees: None
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Independent Consultant
Age: 78
Director since: 2007
Board Chair since: 2019
Committees:
●
Cybersecurity
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Nominating and Corporate Governance |
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Joseph Dominguez |
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Lynn Dugle |
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Nchacha Etta |
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President and Chief Executive Officer, Constellation
Energy Corp
Age: 62
Director since: 2024
Committees:
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Compensation
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Cybersecurity |
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Former Chairperson, President and Chief Executive
Officer at Engility Holdings Inc.
Age: 65
Director since: 2020
Committees:
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Nominating and Corporate
Governance (Chair)
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Compensation
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Cybersecurity |
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Executive Vice President and Chief Financial Officer
of Omnicell, Inc.
Age: 54
Director since: 2024
Committees:
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Audit
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Sustainability and Corporate Responsibility |
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8 2025
Proxy Statement
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| Proxy
Summary |
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| Information About
the Board of Directors |
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Sir John Manzoni KCB |
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Lt. General Wendy Masiello, USAF (Ret.) |
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Jack Moore |
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Former Permanent Secretary for the Cabinet Office,
U.K. Government
Age: 65
Director since: 2022
Committees:
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Audit
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Sustainability and Corporate Responsibility |
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Independent Consultant
Age: 66
Director since: 2017
Committees:
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Cybersecurity (Chair)
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Compensation
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Sustainability and Corporate Responsibility |
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Former Chairman, President and Chief Executive
Officer for Cameron International Corporation
Age: 71
Director since: 2012
Committees:
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Compensation (Chair)
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Cybersecurity
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Nominating and Corporate Governance
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Ann Pickard |
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Carlos Sabater |
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Former Executive Vice President, Arctic for Royal Dutch Shell plc
Age: 69
Director since: 2015
Committees:
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Sustainability and Corporate Responsibility (Chair)
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Compensation |
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Former Senior Global Partner for Deloitte Touche Tohmatsu Limited
Age: 66
Director since: 2021
Committees:
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Audit (Chair)
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Nominating and Corporate Governance |
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2025
Proxy Statement 9
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Table of Contents
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Proxy
Summary |
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Information About
the Board of Directors |
Board Snapshot
| NATIONALITY |
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The above information describes our current Board of
Directors, including General Lester Lyles, who will serve on our Board of Directors until his retirement at the conclusion of
the Annual Meeting. It does not include Mr. Mark Baldwin, who served on our Board of Directors until his retirement on
December 7, 2024. It also does not include Mr. Lewis Von Thaer, who is a new director nominee to be considered for election
to the Board of Directors at the Annual Meeting.
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Proxy Statement
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Table of Contents
| Proxy
Summary |
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| Governance Highlights |
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Governance Highlights
Our Board of Directors believes that good corporate governance and
transparent communication with our stockholders and other stakeholders are essential for KBR’s long-term success.
Focus
on Accountability
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Annual director elections with majority voting standards |
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Annual Board governance review, including review of investor feedback |
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Periodic independent director meetings with investors |
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Negative discretion applied to the 2020, 2022, and 2023 short-term incentive (“STI”) plan payouts of all our Named Executive Officers (“NEOs”) |
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Commitment to regular stockholder outreach and soliciting of feedback |
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Increased sustainability focus and enhanced disclosures in KBR’s Corporate Sustainability Report |
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Linked 10% of our NEOs’ STI plan payout opportunity to Zero Harm / Sustainability performance every year since 2021 |
Independent and Engaged
Board
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Significant knowledge of KBR’s industries and markets |
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Annual Board visits to KBR businesses or project sites |
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Annual assessment of Board leadership structure |
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Creation of new Lead Independent Director role in light of the consolidation of the Chair and CEO role, to ensure the continued effectiveness of our independent directors |
New Lead Independent
Director
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Lt. General Masiello brings extensive leadership experience, operational expertise and strategic vision to the newly created role of Lead Independent Director |
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In 2025, the Board enhanced the Lead Independent Director’s duties under the Company’s Corporate Governance Guidelines |
| * |
Through the conclusion of this Annual Meeting. Effective as of the conclusion of this Annual Meeting, General Lyles will step down as Chair, and Mr. Bradie will begin his service as Chair of the Board of Directors. Concurrently, Lt. General Masiello will begin service as the new Lead Independent Director of the Board of Directors. |
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| 28 |
Independent board committee meetings held in 2024 |
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| 24 |
Executive sessions held in 2024 without management present |
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| 2 |
New independent directors in 2024 |
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| 1 |
New independent board committee chair appointment in 2024 |
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2025
Proxy Statement 11
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Table of Contents
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Proxy
Summary |
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Compensation Highlights |
Compensation Highlights
Our compensation program links pay to performance to align our senior
executives’ interests with those of our stockholders. Consistent with our business strategy, our senior executives’
individual Key Performance Indicators (“KPIs”) are focused on growth and expansion, reducing costs, and increasing
efficiencies and cash flow performance. The Compensation Committee set rigorous targets for 2024 for both the short-term incentive
(“STI”) and long-term incentive (“LTI”) plans.
STRONG LINK BETWEEN PAY AND PERFORMANCE
The design of our compensation program establishes a strong link
between senior executives’ pay and KBR’s financial and sustainability performance. Our Compensation Committee periodically
reviews and makes changes to our compensation programs, including changes to STI and LTI metrics in recent years, in order to maintain
this strong alignment and in some cases to respond to stockholder concerns.
CEO HAS RECEIVED SIX BASE SALARY INCREASES IN
ELEVEN YEARS
Aligned with our rigorous Executive Compensation program, our
CEO’s base salary has increased only six times since he was appointed in 2014 to reward him for his demonstrated success
at:
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Positioning KBR for long-term growth by aligning and expanding our businesses. |
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Increasing Company performance and stockholder value. |
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Driving cultural change to emphasize the importance of our people and their safety as well as belonging, connecting, and growing at KBR. |
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Advancing KBR’s sustainability strategy. |
NAMED EXECUTIVE OFFICER TARGET 2024 COMPENSATION
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12 2025
Proxy Statement
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Table of Contents
Corporate Governance
| PROPOSAL NO. 1 |
Election of Directors |
At our 2025 Annual Meeting of Stockholders, ten directors are to
be elected to hold office until the 2026 Annual Meeting of Stockholders. All directors are elected annually, with each nominee
standing for election to a one-year term. The members of our Board of Directors (the “Board of Directors” or “Board”)
hold office until their successors are elected and qualified or until their earlier resignation or removal.
On December 17, 2024, General Lester Lyles, USAF (Ret.) notified
our Board of Directors of his decision to retire from service on the Board of Directors, effective as of the conclusion of this
Annual Meeting.
To fill the vacancy due to General Lyles’ retirement, our Board of
Directors nominated Lewis F. Von Thaer for election at our 2025 Annual Meeting of Stockholders. Mr. Von Thaer was
identified as a qualified director candidate by an independent executive search firm engaged by our Nominating and Corporate
Governance Committee. Mr. Von Thaer’s nomination resulted from a comprehensive evaluation of his respective
abilities, skills, and experience following the process and criteria outlined in “Process for Selecting New
Directors.” There are no arrangements between any director nominee and any other person pursuant to which such director
nominee was selected as a director nominee. All nominees besides Mr. Von Thaer are incumbent director nominees.
Each nominee has indicated a willingness to serve, if elected. If
any nominee declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election, the proxies may
be voted for such substitute nominee as the Board of Directors may designate. We have no reason to believe that any of the nominees
will be unable to serve if elected. Directors are elected by a majority of votes cast. This means that the number of shares voted
“For” a candidate must exceed the number of shares voted “Against” the candidate. Shares present but not
voting on the election of directors will be disregarded, except for quorum purposes, and will have no effect on the outcome of
the vote.
Our
Board
A top priority of our Board and Nominating and Corporate Governance Committee is ensuring that our Board of Directors is composed of directors who:
| ● |
bring a variety of knowledge, skills, and perspectives that are relevant to our business, |
| ● |
provide expertise that is useful to KBR and complementary to the background and experience of other Board members, |
| ● |
understand and guide KBR’s business and strategic plan and can meaningfully contribute to the success of KBR’s business and strategic plan, and |
| ● |
effectively represent and promote the long-term interests of our stockholders. |
As shown on the next page, the
incumbent directors and new director nominee (Lewis F. Von Thaer) have a wide range of skills and experience that will enable
the Board to effectively oversee management and the business of KBR.
| |
2025
Proxy Statement 13
|
| |
|
Table of Contents
|
Corporate
Governance |
| |
|
| |
Election of Directors |
| |
|
| |
Bradie |
Dominguez |
Dugle |
Etta |
Manzoni |
Masiello |
Moore |
Pickard |
Sabater |
Von
Thaer |
| Industry
Experience |
Engineering
Government
Technology |
Energy
Engineering |
Aerospace
Engineering
Government
Technology |
Professional
Services |
Energy
Engineering
Government |
Aerospace
Government
Technology |
Energy |
Energy
Engineering
Technology |
Professional
Services |
Aerospace
Government
Technology |
C-Suite
CEO/CFO |
 |
|
|
|
|
| |
| |
|
Cyber
Cybersecurity/Data
Privacy/IT |
|
|
|
|
| |
| |
| |
Finance
Accounting/Audit/Finance |
| |
|
|
|
|
|
|
|
|
Risk
Risk
Management/Oversight |
|
|
|
|
|
|
|
|
|
|
Sustainability
Climate/Environment/Sustainability |
|
|
| |
|
|
| |
| |
Technology
IP/Licensing/Technology |
|
| |
|
|
|
| |
| |
Veteran
Military
Service |
|
|
|
|
| |
| |
|
|
| Demographics |
|
|
|
|
|
|
|
|
|
|
| Age |
58 |
62 |
65 |
54 |
65 |
66 |
71 |
69 |
66 |
64 |
| Tenure |
10 |
<1 |
5 |
<1 |
2 |
7 |
13 |
9 |
3 |
0 |
| Gender |
M |
M |
F |
M |
M |
F |
M |
F |
M |
M |
| Nationality |
U.K. |
U.S. |
U.S. |
U.S. |
U.k. |
U.S. |
U.S. |
U.S. |
U.S. |
U.S. |
| Race/Ethnicity |
White |
White
+ Hispanic |
White |
African
American |
White |
White |
White |
White |
White
+ Hispanic |
White |
| Generals |
|
|
|
|
|  |
| |
|
|
 |
The Board of Directors recommends that you VOTE FOR the election of all the director nominees presented on the next several pages. All proxies will be so voted unless a stockholder specifies otherwise. |
|
14 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
| Corporate
Governance |
|
| |
|
| Election of Directors |
|
The following biographical information about the director nominees is as of March 17, 2025.
Nominees
for Director
| |
|
|
|
|
 |
|
STUART J. B. BRADIE
Age: 58 | Director since: 2014 | Chair of the Board since: 2025*
|
| |
|
|
|
| |
KBR Board Committees: None
|
|
Other Public Company Boards:
Rolls Royce Holdings Plc
|
| |
|
|
|
|
Key Qualifications and Skills: C-Suite Risk Sustainability Technology
|
| |
|
|
|
|
|
Current
Business Experience
●
President
and Chief Executive Officer, KBR, Inc. (since 2014)
Prior Business Experience
● Group
Managing Director — Operations and Delivery for WorleyParsons
● Managing
Director across Europe, Africa, Asia and the Middle East for WorleyParsons
● Managing
Director for PT Kvaerner Indonesia
● Country
Manager for Kvaerner Philippines
● Global
experience across over 40 countries in the hydrocarbons, mining and chemicals, power and infrastructure sectors
|
|
Education
● B.S.
(Mechanical Engineering), Aberdeen University
● M.B.A.,
Edinburgh Business School, Heriot-Watt University
|
*Effective as of the conclusion of this Annual Meeting.
| |
|
|
|
|
 |
|
JOSEPH DOMINGUEZ
Age: 62 | Director since:
2024 | Independent
|
| |
|
|
|
| |
KBR Board Committees: Compensation Committee and Cybersecurity Committee
Other Public Company Boards:
Constellation Energy Corp |
|
Current Affiliations: Electric Power Research Institute (Director);
Hispanics in Energy (Chair); Institute of Nuclear Power Operations (Director); and Nuclear Energy Institute (Director)
|
| |
|
|
|
|
Key Qualifications and Skills: C-Suite Finance Risk Sustainability
|
| |
|
|
|
|
|
Current
Business Experience
● President and Chief Executive Officer at Constellation Energy Corp (since 2022)
Prior Business Experience
● Chief Executive Officer at Commonwealth Edison Company (ComEd)
● Executive Vice President of Governmental and Regulatory Affairs and Public Policy at Exelon Corporation
● Partner at White and Williams, LLP
● Assistant U.S. Attorney for Eastern District of Pennsylvania
|
|
Education
● B.S. (Mechanical Engineering), New Jersey Institute of Technology
● J.D., Rutgers University School of Law
|
| |
2025
Proxy Statement 15
|
| |
|
Table of Contents
|
Corporate
Governance |
| |
|
| |
Election of Directors |
| |
|
| |
|
|
|
|
 |
|
LYNN A. DUGLE
Age: 65 | Director since:
2020 | Independent
|
| |
|
|
|
| |
KBR Board Committees: Nominating and Corporate Governance Committee
(Chair), Compensation Committee, and Cybersecurity Committee
Other Public Company Boards: EOG
Resources, Inc., Micron Technology, Inc. (Audit Committee Member and Security Committee Member), and TE Connectivity Ltd. (Audit Committee Member) |
|
Current Affiliations: ZOE Empowers (Member)
Previous Affiliations: Avantus Federal (Member); The B2B Project (Member);
The Board on Army Research and Development of the National Academy of Sciences (Member); First Light Acquisition Group, Inc.
(Advisor Partner); Intelligence and National Security Alliance (Member); and State Street Corporation (Director) |
| |
|
|
|
|
Key Qualifications and Skills: C-Suite Cyber Finance Risk Technology
|
| |
|
|
|
|
|
Prior Business Experience
● Chairperson, President and Chief Executive Officer at Engility Holdings Inc., where she led the sale of the
company in its sale to Science Applications International Corporation
● Corporate Vice President and President of Intelligence, Information and Services at Raytheon Company
● Vice President, Engineering, Technology and Quality, Network Centric Systems at Raytheon Company
● Responsible for acquiring more than a dozen cyber-related companies while at Raytheon Company
● Vice President and General Manager, Product, Systems Software Division at ADC Telecommunications, Inc.
● General Manager, Cable Systems Division at ADC Telecommunications, Inc.
● Vice President, Support Engineering and Quality for the Defense Systems and Electronics Group at Texas Instruments,
Inc.
|
|
Education
● B.A. (Spanish), Purdue University
● B.S. (Technical Management), Purdue University
● M.B.A., University of Texas at Dallas
|
|
16 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
| Corporate
Governance |
|
| |
|
| Election of Directors |
|
| |
|
| |
|
|
|
|
 |
|
NCHACHA E. ETTA
Age: 54 | Director since:
2024 | Independent
|
| |
|
|
|
| |
KBR Board Committees: Audit Committee and Sustainability and Corporate Responsibility Committee
Other Public Company Boards:
None |
|
Current Affiliations: None
Previous Affiliations:
Helen Keller International (Trustee) and Howard University (Trustee) |
| |
|
|
|
|
Key Qualifications and Skills: C-Suite Cyber Finance Risk Sustainability Technology
|
| |
|
|
|
|
|
Current
Business Experience
● Executive
Vice President and Chief Financial Officer at Omnicell, Inc. (since 2023)
Prior Business Experience
● Senior
Vice President and Chief Financial Officer at Essilor of America, Inc. (a subsidiary of EssilorLuxottica SA)
● Worldwide Vice President and Chief Financial Officer at Johnson & Johnson Vision
● Various senior financial roles at The Coca-Cola Company
● Various roles with Microsoft Corporation, Eli Lilly & Company, and the International Investments Fund
at The Carlyle Group
● Senior Accountant at Orano Cycle (formerly COGEMA (Compagnie générale des matières nucléaires))
and Areva NC
|
|
Education
● B.S. (Accounting), George Mason University
● M.B.A. (Finance), Howard University
|
| |
|
|
|
|
 |
|
SIR JOHN A. MANZONI KCB
Age: 65 | Director since:
2022 | Independent
|
| |
|
|
|
| |
KBR Board Committees: Audit Committee and Sustainability and Corporate Responsibility Committee
Other Public Company Boards:
Diageo plc (Chair; Audit Committee Member; Nomination Committee
Member; and Remuneration Committee Member) and SSE plc (Chair;
Energy Markets Risk Committee Member; Nomination Committee Chair; Remuneration Committee Member; and Safety, Sustainability,
Health and Environment Committee Member) |
|
Current Affiliations: Chairman Mentors International (Mentor); National
Centre for Universities and Business (Director); and Saïd Business School at the University of Oxford (Global Leadership Council Member)
Previous Affiliations: Accenture Energy (Advisor); Adamant Ventures
(Advisor); Aspen Institute Corporate Values Group (Advisor); Atomic Weapons Establishment (Chair); BP plc (Director); Leyshon
Energy Ltd (Chair); SABMiller plc (Director); and Stanford University Graduate School of Business (Advisor) |
| |
|
|
|
|
Key Qualifications and Skills: C-Suite Finance Risk Sustainability
|
| |
|
|
|
|
|
Prior Business Experience
● Permanent Secretary for the Cabinet Office, U.K. Government
● Chief Executive of the Civil Service, U.K. Government
● Chief Executive of the Major Projects Authority, U.K. Government
● President
and Chief Executive Officer at Talisman Energy Inc.
● Chief Executive, Refining and Marketing at BP plc
● Chief Executive, Gas and Power at BP plc
|
|
Education
● B.S. (Civil Engineering), Imperial College London
● M.S. (Petroleum Engineering), Imperial College London
● M.S. (Management), Sloan Fellow, Stanford University
● Honorary Doctorate, Aberdeen University
|
| |
2025
Proxy Statement 17
|
| |
|
Table of Contents
|
Corporate
Governance |
| |
|
| |
Election of Directors |
| |
|
| |
|
|
|
|
 |
|
LT. GENERAL WENDY M. MASIELLO, USAF (RET.)
Age: 66 | Director since:
2017 | Lead Independent Director since: 2025*
|
| |
|
|
|
| |
KBR Board Committees: Cybersecurity Committee (Chair), Compensation
Committee, and Sustainability and Corporate Responsibility Committee
Other Public Company Boards:
StandardAero (Audit Committee Member) |
|
Current Affiliations: Acquisition Innovation and Research Center Advisory
Panel to the Office of the Under Secretary of Defense for Acquisition and Sustainment (Advisor); Air Force Studies Board of
the National Academy of Sciences (Member); DEFCON AI (Strategic Advisor); EURPAC Service, Inc. (Director); MRIGlobal
(Director); Procurement Round Table (Director); Rebuilding Together (Director); and Tlingit Haida Tribal Business Corporation (Director)
Previous Affiliations: National Contract Management Association (Past
Chair); Public Spend Forum (Advisory Council); and Rawls College, Texas Tech University (Advisory Council) |
| |
|
|
|
|
Key Qualifications and Skills: Cyber Finance Risk Sustainability Technology Veteran
|
| |
|
|
|
|
|
Current
Business Experience
● Independent Consultant (since 2017)
Prior Business Experience
● Retired Three-Star General of the U.S. Air Force
● Director of the Defense Contract Management Agency, overseeing a $1.4 billion budget, managing 12,000 employees
and 20,000 contractors on contracts valued at $6 trillion
● Deputy Assistant Secretary (Contracting), Office of the Assistant Secretary of the Air Force for Acquisition,
where she was responsible for shaping Air Force contracting policy and its 11,000 personnel force
● Program
Executive Officer for the Air Force’s $65 billion Service Acquisition portfolio
● Deployment to Iraq to lead contracting support for military forces in Iraq and Afghanistan
|
|
Education
● B.B.A. (Marketing), Texas Tech University
● M.S. (Logistics Management), Air Force Institute of Technology
● Defense Systems Management College, Fort Belvoir, Virginia
● M.S. (National Resource Strategy), Industrial College of the Armed Forces, Fort Lesley J. McNair, Washington,
D.C.
● Senior Acquisition Course, Industrial College of the Armed Forces, Fort Lesley J. McNair, Washington, D.C.
● Joint and Combined Warfighting School, Joint Forces Staff College, Norfolk, Virginia
● Harvard Kennedy School’s Senior Managers in Government
● CERT Certificate in Cyber-Risk Oversight (March 2024), National Association of Corporate Directors
|
*Effective as of the conclusion of this Annual Meeting.
|
18 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
| Corporate
Governance |
|
| |
|
| Election of Directors |
|
| |
|
| |
|
|
|
|
 |
|
JACK B. MOORE
Age: 71 | Director since:
2012 | Independent
|
| |
|
|
|
| |
KBR Board Committees: Compensation Committee (Chair), Cybersecurity
Committee, and Nominating and Corporate Governance Committee
Other Public Company Boards:
Occidental Petroleum Corporation (Chair; Executive Compensation Committee Chair; and Corporate Governance and Nominating Committee
Member) and ProPetro Holding Corp. (Nominating and Corporate Governance Committee Chair; and Compensation Committee Member) |
|
Current Affiliations: American Heart Association (Member); MAM (Memorial
Assistance Ministries) (Director); and University of Houston System Board of Regents (Member)
Previous Affiliations: American Petroleum Institute (Director); Cameron
International Corporation (Chair); Rowan Companies plc (Director); United Way of Greater Houston (Executive Committee); and University of Houston’s Board of Visitors (Director) |
| |
|
|
|
|
Key
Qualifications and Skills: C-Suite Finance Risk
|
| |
|
|
|
|
|
Prior Business Experience
● Chairman, President and Chief Executive Officer for Cameron International Corporation
● President and Chief Operating Officer for Cameron International Corporation
● President, Western Hemisphere of Drilling & Production Systems group for Cameron International Corporation
● Vice President and General Manager, Western Hemisphere of Drilling & Production Systems group for Cameron
International Corporation
● Various management positions at Baker Hughes Incorporated
|
|
Education
● B.B.A., University of Houston
● Graduate of the Advanced Management Program at Harvard Business School
|
| |
2025
Proxy Statement 19
|
| |
|
Table of Contents
|
Corporate
Governance |
| |
|
| |
Election of Directors |
| |
|
| |
|
|
|
|
 |
|
ANN D. PICKARD
Age: 69 | Director since:
2015 | Independent
|
| |
|
|
|
| |
KBR Board Committees: Sustainability and Corporate Responsibility Committee
(Chair) and Compensation Committee
Other Public Company Boards: Noble
Corporation plc (Nominating and Governance Committee Chair and Safety and Sustainability Committee Member) and Woodside
Energy Group Ltd. (Human Resources & Compensation Committee Member and Sustainability Committee Chair) |
|
Current Affiliations: The University of Wyoming Foundation (Budget/Audit) and Chief Executive Women (Member)
Previous Affiliations: Advisory Council of the Eurasia Foundation (Member);
Catalyst (Board of Advisors); Global Agenda Council on the Arctic for the World Economic Forum (Member); and Westpac Banking Corporation (Director) |
| |
|
|
|
|
Key Qualifications and Skills: Cyber Finance Risk Sustainability Technology
|
| |
|
|
|
|
|
Prior Business Experience
● Executive Vice President, Arctic for Royal Dutch Shell plc
● Executive Vice President and Country Chair, Australia and New Zealand, for Royal Dutch Shell plc
● Regional Executive Vice President, Sub Saharan Africa, for Royal Dutch Shell plc
● Director, Global Businesses and Strategy and a member of the Shell Gas & Power Executive Committee for
Royal Dutch Shell plc
● 11-year tenure with Mobil prior to its merger with Exxon
● Significant business experience throughout South America, Australia, the countries of the former Soviet Union,
the Middle East, and Africa, and in sectors like exploration efforts, LNG, and gas and power
|
|
Education
● B.A., University of California San Diego
● M.A., University of Pennsylvania
|
|
20 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
| Corporate
Governance |
|
| |
|
| Election of Directors |
|
| |
|
| |
|
|
|
|
 |
|
CARLOS A. SABATER
Age: 66 | Director since:
2021 | Independent
|
| |
|
|
|
| |
KBR Board Committees: Audit Committee (Chair) and Nominating and Corporate Governance Committee
Other Public Company Boards:
Pool Corporation (Audit Committee Member and Nominating and Corporate Governance Committee Member) |
|
Current Affiliations: FIU Foundation (Director)
Previous Affiliations: Chamber of Commerce (Director); DACF Ltd.
(Director); Florida International University (Director); Kiwanis Club (Director); PDC Energy, Inc. (Director); and YMCA (Director) |
| |
|
|
|
|
Key Qualifications and Skills: Finance Risk
|
| |
|
|
|
|
|
Prior Business Experience
● Senior Global Partner for Deloitte Touche Tohmatsu Limited (“Deloitte”)
● Managing Principal, Americas Region for Deloitte
● Global Managing Director Audit and Enterprise Risk Services for Deloitte
● Various senior leadership and operational roles over the course of a nearly 40-year career with Deloitte,
with extensive experience in accounting, finance, and SEC reporting
● Qualified board of director financial expert and NACD Directorship Certified
|
|
Education
● B.B.A. (Accounting and Finance), Florida International University
● Named
scholarship program at Florida International University (“The Deloitte Foundation – Sabater Scholars Program”)
|
| |
|
|
|
|
 |
|
LEWIS F. VON THAER
Age: 64 | Director Nominee:
2025 | Independent
|
| |
|
|
|
| |
KBR Board Committees: Not yet appointed
Other Public Company Boards:
American Electric Power Co Inc (Human Resources Committee Member; Nuclear Oversight Committee Member; and Technology Committee Chair) |
|
Current Affiliations: Ambri (Director), AmplifyBio (Chair), Columbus
Partnership (Executive Committee Member), InnovateOhio (Advisor), National Veterans Memorial and Museum (Chair), Pacific
Northwest National Laboratory (Chair), and UT-Battelle, Operator of Oak Ridge National Laboratory (Vice Chair)
Previous Affiliations: Defense Science Board (Member), Kansas State
University Foundation (Director), National Defense Industrial Association (Member), National Intelligence University
Foundation (Director), Nationwide Children’s Hospital (Director), The Ohio State University Board of Trustees
(Trustee), and Tragedy Assistance Program for Survivors (Member) |
| |
|
|
|
|
Key Qualifications and Skills: C-Suite Cyber Finance Risk Technology
|
| |
|
|
|
|
|
Current
Business Experience
● President and Chief Executive Officer at Battelle Memorial Institute (since 2017)
Prior Business Experience
● Chief Executive Officer at DynCorp International
● Executive Vice President and President, National Security Sector at Leidos Holdings, Inc.
● President and Corporate Vice President at General Dynamics Corp
● Senior Vice President, Operations at General Dynamics Corp
● Various management positions at General Dynamics Corp
|
|
Education
● B.S. (Electrical Engineering), Kansas State University
● M.S. (Electrical Engineering), Rutgers, The State University of New Jersey
|
| |
2025
Proxy Statement 21
|
| |
|
Table of Contents
|
Corporate
Governance |
| |
|
| |
Election of Directors |
The
Following Director with a Term Ending in 2025 is Retiring and Not Standing for Re-Election
| |
|
|
|
|
 |
|
GENERAL LESTER L. LYLES, USAF (RET.)
Age: 78 | Director since:
2007 | Chair of the Board since: 2019 | Independent
|
| |
|
|
|
| |
KBR Board Committees: Cybersecurity Committee and Nominating and Corporate Governance Committee
Other Public Company Boards:
None |
|
Current Affiliations: American Institute of Aeronautics and Astronautics
(Fellow); Frontier Technology Inc. (Director); National Air and Space Museum Board (Member); National Space Council
Users’ Advisory Group administered by NASA (Chairman); JobsOhio (Director); and National Academy of Engineering (Inducted Member)
Previous Affiliations: Battelle Memorial Institute (Director); Defense
Science Board in the Pentagon (Member); General Dynamics Corporation (Director); International Security Advisory Board at
the U.S. Department of State (Member); Precision Castparts Corp.
(Director); President’s Intelligence Advisory Board in the White House (Member); and United Services Automobile Association (Chair) |
| |
|
|
|
|
Key Qualifications and Skills: Cyber Finance Risk Sustainability Veteran
|
| |
|
|
|
|
|
Current
Business Experience
● Independent Consultant (since 2003)
Prior Business Experience
● Retired Four-Star General of the U.S. Air Force
● Commander of the U.S. Air Force Materiel Command
● Vice Chief of Staff of the Headquarters of the U.S. Air Force
● Director of the Ballistic Missile Defense Organization
● Commander of the Space and Missile Systems Center
|
|
Education
● B.S. (Mechanical Engineering), Howard University
● M.S. (Mechanical and Nuclear Engineering), Air Force Institute of Technology Program, New Mexico State University
● Defense Systems Management College, Fort Belvoir, Virginia
● Armed Forces Staff College, Norfolk, Virginia
● National War College, Fort Lesley J. McNair, Washington, D.C.
● National and International Security Management Course at Harvard University
● Honorary
Doctor of Laws degrees from New Mexico State University and Urbana University
|
|
22 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
| Corporate Governance |
|
| |
|
| Board and Governance Structure |
|
Board
and Governance Structure
We are committed
to good corporate governance and to effective communication with our stockholders. This section describes our governance policies
and practices, and the roles, duties, and responsibilities of the Board of Directors and each of its committees. See the section
titled “Corporate Governance Materials” to learn how to find our policies, practices, and committee charters.
Role of the
Board of Directors
BOARD
OPERATIONS
 |
The Board of Directors represents
the interests of our stockholders in maintaining a successful business. Specifically, the Board of Directors oversees the effectiveness
of management’s policies and decisions, including the execution of KBR’s strategies, with a commitment to enhancing
stockholder value over the long term. To this end, Board members are expected to act in the best interests of all stockholders,
to be knowledgeable about our businesses, to exercise informed and independent judgment, and to understand general economic trends
and conditions, as well as trends in corporate governance.
Our Board
Leadership Structure
Our Corporate Governance Guidelines
currently provide that if the Chairperson of the Board is not from among the directors of the Corporation who are not also executive
officers of the Corporation (“Non-Management Directors”), the Board will have a Lead Independent Director, to be designated
by the Board from the Non-Management Directors. The Board reviews its leadership structure from time to time to determine whether
this continues to best serve KBR and our stockholders, considering factors such as the current composition of the Board, Board
effectiveness, and the current and future needs of KBR.
On December 17, 2024, General
Lester Lyles, USAF (Ret.) notified our Board of Directors of his decision to retire from service on the Board of Directors, effective
as of the conclusion of this Annual Meeting. In considering the current composition of the Board of Directors, the benefits of
refreshment and implementing effective future succession planning of the Board of Directors, the Board of Directors approved the
following changes to our Board Leadership Structure:
| ● |
Beginning at the conclusion of this Annual Meeting and continuing until such time as the Board may
determine otherwise, there will be a combined CEO and Chair role; and |
| ● |
Beginning at the conclusion of this Annual Meeting and continuing until such time as the Board may determine otherwise,
there will be a Lead Independent Director role to complement the new combined CEO and Chair role. |
The Board believes that the unified
Chair and Chief Executive Officer roles, combined with the robust authority given to the Lead Independent Director, effectively
represents the interests of stockholders and enables the Board to discharge appropriate levels of independence, oversight and
responsibility to serve the Company.
Accordingly, following the Annual
Meeting, Mr. Stuart J. B. Bradie will begin service as the new Chair of our Board of Directors. Mr. Bradie has served as President
and Chief Executive Officer of KBR for over a decade and has over thirty years of industry experience. Under Mr. Bradie’s
leadership, KBR has experienced strong and steady growth and expansion of its businesses and significant achievements and successes
in securing new partnerships and contract work. Mr. Bradie has also introduced, built and cultivated a pervasive Zero Harm culture
at KBR, prioritizing and supporting employees’ health, safety, and wellness. The Board is confident that, with Mr. Bradie’s
experience, deep knowledge and dedication to KBR, he will effectively lead the Board in his new combined CEO and Chair role.
| |
2025
Proxy Statement 23
|
| |
|
Table of Contents
|
Corporate
Governance |
| |
|
| |
Board and Governance Structure |
Concurrently with Mr. Bradie’s
appointment as Chair, Lt. General Wendy M. Masiello, USAF (Ret.) will begin service as the new Lead Independent Director of our
Board of Directors. Lt. General Masiello has served on the Board of Directors since 2017 and brings a wealth of experience in
cybersecurity, finance, risk, sustainability, technology and government defense work. During her time on the Board of Directors,
she has served on numerous committees: she currently serves as Chair of the Cybersecurity Committee and as a member of the Compensation
Committee and the Sustainability and Corporate Responsibility Committee, and she previously served as a member on the Audit Committee.
Her strong government experience has been integral in overseeing the expansion of KBR’s Government Solutions business, and
her technology and cyber background has been valuable in overseeing the growth of our Sustainable Technology Solutions business.
The Board of Directors is confident in Lt. General Masiello’s ability to effectively serve as the Lead Independent Director
and facilitate communications between the independent directors, the CEO/Chair, and the rest of management and KBR stockholders.
 |
Stuart J. B. Bradie
Chair of the Board and CEO
● Manages the
overall functioning of the Board
● Promotes open
and transparent dialogue during Board and committee meetings
● Sets the strategic
direction for KBR
● Provides day-to-day
leadership over KBR’s operations
● Focuses on execution
of KBR’s business strategy, growth, and development
● Sets the tone-at-the
top for the One KBR culture
● Develops and
oversees enterprise-wide initiatives |
|
 |
Lt. General Wendy M. Masiello, USAF (Ret.)
Lead Independent Director
● Collaborates
with the Chair of the Board-Chief Executive Officer to set meeting agendas and the annual schedule of Board meetings
● Establishes
the agenda for and presides at executive sessions of Non-Management Directors and briefs the Chair of the Board-Chief
Executive Officer on issues arising from executive sessions
● Serves as the
liaison between the Non-Management Directors and the Chair of the Board-Chief Executive Officer
● Works with the
Nominating and Corporate Governance Committee and the Chair of the Board-Chief Executive Officer on the Board succession
and refreshment process, including interviewing director candidates and making recommendations to the Nominating and Corporate
Governance Committee and the Board |
Our Board is currently led by
a Chair who is recommended by the Nominating and Corporate Governance Committee and appointed by the full Board. Our Board does
not have a policy as to whether the roles of Chair of the Board and CEO should be separate or combined. Our Board believes that
it is important to retain its flexibility to allocate the responsibilities of the offices of the Chair and Chief Executive Officer
in any way that is in the best interests of KBR and its shareholders at a given point in time.
The Lead Independent Director
role is a new position created to ensure the continued effectiveness of our independent directors, whereby the Lead Independent
Director will act as a liaison between the CEO and Chair and the other directors, assess the performance and succession planning
of the CEO and Chair, provide a meaningful point of contact for shareholders to raise concerns and ask questions, and help maintain
KBR’s strong corporate governance by providing independent oversight and facilitating effective communication and building
consensus within our Board of Directors.
Our CEO is responsible to the
Board for the overall management and functioning of the Company. KBR’s Corporate Governance Guidelines provide for two important
checks on the CEO’s authority:
| ● |
The CEO may not serve on any Board committees, and |
| ● |
The CEO’s performance evaluation includes a review of how well he keeps the Board informed on matters affecting
the Company and its operating units. |
KBR’s Board of Directors
has determined that its current leadership structure is appropriate at this time.
|
24 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
| Corporate
Governance |
|
| |
|
| Director Independence |
|
Director Independence
Our Corporate Governance Guidelines
provide that at least two-thirds of the Board must be independent directors. Directors are considered independent if they are
not involved in any material relationships with KBR, either directly or indirectly. Our Corporate Governance Guidelines set forth
specific independence standards that are consistent with the requirements of the U.S. Securities and Exchange Commission (“SEC”)
and the New York Stock Exchange (“NYSE”).
The Nominating and Corporate
Governance Committee periodically reviews KBR’s definition of independence and the Board’s compliance with our independence
standards.
Our directors complete independence questionnaires at least annually. Our
Board determines the independence of its members generally and considers whether various committee members meet the heightened
independence or other requirements prescribed by the NYSE and SEC. Our Board determined that all our current directors are
independent except Mr. Bradie, who serves as KBR’s president and chief executive officer. Our Board determined that, if
elected to the Board of Directors, Lewis Von Thaer will also be independent under the standards and requirements set forth under
applicable SEC and NYSE rules.
Our Board believes that its membership
should include no more than two directors who are also employees of KBR, though this number is not an absolute limitation. We
believe KBR’s chief executive officer should always be a member of the Board. Our chief executive officer has been the only
executive director since KBR became an independent public company.
| |
2025
Proxy Statement 25
|
| |
|
Table of Contents
|
Corporate
Governance |
| |
|
| |
Committees of the Board |
Committees of the Board
KBR’s Board does a substantial portion of its analysis and work
with five standing committees, each of which is composed entirely of independent directors.
Our Board approved charters for each of the committees that govern and
set forth their respective duties, responsibilities, and actions. These charters are available on KBR’s website at kbr.com/en/who-we-are/our-company/corporate-governance.
Each committee reviews its charter annually and recommends changes, as necessary, to the Board.
| | |
| |
Board and Committee
Member Meeting
Attendance Rate
in 2024 | |
Audit
Committee | |
Compensation
Committee | |
Cybersecurity
Committee | |
Nominating
and Corporate
Governance
Committee | |
Sustainability
and Corporate
Responsibility
Committee |
| Stuart Bradie* | |
 | |
100% | |
| |
| |
|
|
|
|
|
| Joseph Dominguez | |
| |
100% | |
| |
 | |
|
|
|
|
|
| Lynn Dugle | |
| |
100% | |
| |
| |
|
|
 |
|
|
| Nchacha Etta | |
 | |
100% | |
| |
| |
|
|
|
|
|
| Lester Lyles* | |
| |
94% | |
| |
| |
|
|
|
|
|
| John Manzoni | |
| |
100% | |
| |
| |
|
|
|
|
|
| Wendy Masiello** | |
 | |
100% | |
| |
| |
|
|
|
|
|
| Jack Moore | |
| |
100% | |
| |
| |
|
|
|
|
|
| Ann Pickard | |
| |
100% | |
| |
| |
|
|
|
|
|
| Carlos Sabater | |
| |
100% | |
| |
| |
|
|
|
|
|
| Lewis
Von Thaer*** | |
| |
| |
| |
| |
|
|
|
|
|
| Number of Meetings in 2024 | |
| |
| |
10 | |
5 | |
4 | |
5 | |
4 |
| Committee Member Attendance in 2024 | |
| |
| |
100% | |
100% | |
100% | |
100% | |
100% |
|
Chair of the Board |
|
|
Lead Independent Director |
|
|
Committee Chair |
|
|
Member |
|
|
Audit Committee Financial Expert |
* General Lyles will serve as
Chair of the Board of Directors until his retirement from the Board of Directors at the conclusion of the Annual Meeting. Effective
as of the conclusion of the Annual Meeting, Mr. Bradie will serve as Chair of the Board of Directors.
** Effective as of the conclusion
of the Annual Meeting and concurrent with Mr. Bradie’s appointment as Chair of the Board, Lt. General Masiello will serve
as Lead Independent Director of the Board of Directors.
*** Mr. Von Thaer’s committee
memberships will be determined after the Annual Meeting, subject to his election by KBR’s stockholders to the Board of Directors.
The information in the above
table does not include Mr. Mark Baldwin, who retired from the Board of Directors on December 7, 2024; however, in 2024, he attended
every meeting of the Board of Directors and every meeting of each committee on which he served.
|
26 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
| Corporate
Governance |
|
| |
|
| Committees of the Board |
|
The current composition as of March 17, 2025, purpose,
duties, and responsibilities of each committee are summarized on the next several pages.
AUDIT COMMITTEE
|
Members:
Carlos A. Sabater (Chair)
Nchacha E. Etta
Sir John A. Manzoni KCB
Meetings in 2024: 10
Attendance: 100%
Audit Committee Report:
Page 101
|
The Audit Committee:
●
reviews
and discusses with management and the independent auditors, and recommends to the Board for approval, KBR’s annual audited
financial statements, disclosures made in management’s discussion and analysis of financial condition and results of operations
(“MD&A”), KBR’s internal controls report, and the independent auditors’ attestation of the report in
KBR’s annual report on Form 10-K;
●
reviews and discusses
with management and the independent auditors KBR’s quarterly financial statements and MD&A disclosures in KBR’s
quarterly reports on Form 10-Q;
●
reviews
our earnings press releases and use of any non-GAAP financial measures;
●
reviews
and reports to the Board the scope and results of audits by our principal independent public accountants and our internal auditors;
●
reviews
and discusses with management and the independent auditors any issues and judgments regarding KBR’s accounting principles
and financial statement presentations;
●
reviews
and discusses with management (including the head of internal audit) and the independent auditors the effectiveness of our system
of disclosure controls and internal controls, as well as critical audit matters;
●
reviews
KBR’s major financial risk exposures and risk management policies;
●
reviews
and takes appropriate action with respect to any reports concerning legal and regulatory compliance or breaches of fiduciary duty;
●
reviews
and oversees KBR’s internal audit function;
●
engages
our independent auditing firm each year, reviews the audit and other professional services rendered by the firm, periodically reviews
the firm’s qualifications, performance and independence, and reviews our policy on hiring the firm’s current or former
personnel;
●
confirms
the regular rotation of audit partners as required by law;
●
reviews
KBR’s processes for identifying related party transactions and approves related party transactions as needed;
●
reviews and verifies
compliance with our Code of Business Conduct and establishes policies on making exceptions to the code;
●
establishes procedures
for the confidential and anonymous submission, receipt, retention, and treatment of complaints received by KBR regarding accounting,
internal accounting controls, or auditing matters;
●
reviews with the Sustainability
and Corporate Responsibility Committee and with management the internal controls, processes and disclosures relating to sustainability,
human capital management, and corporate responsibility matters;
●
reviews with the Cybersecurity
Committee and with management the internal controls, processes and disclosures relating to cybersecurity, artificial intelligence
and information technology matters;
●
prepares and publishes
an annual Audit Committee report, which is included in this proxy statement; and
●
meets
periodically in separate executive sessions with management (including KBR’s Chief Financial Officer and General Counsel),
the internal auditors, and the independent auditors and has such other direct and independent interaction with such persons from
time to time as appropriate.
Our Board determined that each member of the Audit Committee
is financially literate and qualifies as an “audit committee financial expert,” as defined in SEC rules. In addition,
each member of the Audit Committee is “independent” under the standards prescribed for audit committee members by NYSE
and SEC rules.
|
| |
2025
Proxy Statement 27
|
| |
|
Table of Contents
|
Corporate
Governance |
| |
|
| |
Committees of the Board |
COMPENSATION COMMITTEE
|
Members:
Jack B. Moore (Chair)
Joseph Dominguez
Lynn A. Dugle
Lt. General Wendy
M. Masiello
Ann D. Pickard
Meetings in 2024: 5
Attendance: 100%
Compensation Committee Report:
Page 80
|
The Compensation Committee:
●
evaluates
and advises the Board regarding the compensation policies applicable to our executive officers, including the specific relationship
between corporate performance and executive compensation;
●
reviews and recommends
to the Board the corporate goals and objectives relevant to compensation for the CEO, the CEO’s performance in light of these
established goals and objectives, and the CEO’s compensation package based on this evaluation, the results of the most recent
Say-on-Pay Vote and other relevant factors;
●
reviews
the CEO’s recommendations with respect to, and approves, the compensation to be paid to KBR’s other executive officers
consistent with the general compensation policies established by the Board and having considered the results of the most recent
Say-on-Pay Vote;
●
reviews and makes
recommendations to the Board with respect to incentive compensation and other stock-based plans and identifies and sets financial
and/or non-financial performance related metrics as targets;
●
reviews and approves
the selection of comparable peer group companies for the purpose of benchmarking CEO and other executive officers’ compensation;
●
administers
KBR’s incentive compensation and other stock-based plans, including the equity grant policy;
●
reviews and discusses
with management the “Compensation Discussion and Analysis” and determines whether to recommend to the Board that it
be included in KBR’s annual proxy statement or annual report on Form 10-K;
●
prepares
and publishes an annual executive compensation report, which is included in this proxy statement;
●
reviews
the risk assessment of KBR’s compensation plans to ensure that the programs do not create risks that are reasonably likely
to have a material adverse effect on KBR;
●
reviews and approves
the creation or revision of any clawback policy allowing KBR to recoup compensation paid to employees, including KBR’s Procedure
for the Recovery of Erroneously Awarded Compensation and any other clawback policies adopted to satisfy the minimum clawback requirements
adopted under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations thereunder or any other
applicable law or securities exchange listing standard, and to oversee the implementation and enforcement of any such clawback
policy;
●
periodically reviews
the compensation paid to non-executive directors and makes recommendations to the Board regarding any adjustments;
●
selects an independent
compensation consultant or other adviser to assist the committee in its work; and
●
approves
disclosures and makes recommendations to the Board regarding the disclosures on KBR’s Advisory Vote on Executive Compensation
and Advisory Vote on the Frequency of Advisory Votes on the Named Executive Compensation included in KBR’s annual proxy statement.
Our Board determined that each member of our Compensation Committee
is a “non-employee director” as defined in SEC rules.
|
|
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Proxy Statement
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www.kbr.com |
| |
|
Table of Contents
| Corporate
Governance |
|
| |
|
| Committees of the Board |
|
CYBERSECURITY COMMITTEE
|
Members:
Lt. General Wendy
M. Masiello (Chair)
Joseph Dominguez
Lynn A. Dugle
General Lester L. Lyles
Jack B. Moore
Meetings in 2024: 4
Attendance: 100%
|
The Cybersecurity Committee:
●
reviews
with management the status of KBR’s information technology systems and risks relating to information technology;
●
oversees global data
privacy and security regulations compliance and requirements and assesses the effectiveness of the systems, controls, and procedures
used to ensure compliance;
●
reviews
with management KBR’s data security incident response plan and program, both with respect to cybersecurity incidents and
information technology system and/or infrastructure disruptions not in connection with a cyber-attack or security breach;
●
oversees
the selection, appointment, and retention of outside advisors to review KBR’s cybersecurity and data privacy program and
otherwise support the Cybersecurity Committee;
●
reviews
the plans and methodology for the periodic review and assessment of KBR’s data protection program by outside advisors, if
applicable;
●
reviews with management
and outside advisors the findings and corresponding remediation plans from reviews, assessments, and audits of KBR’s data
protection program;
●
reviews with management
the assessment of how KBR’s cybersecurity and data privacy programs align with industry frameworks and standards;
●
reviews
with management and reports to the Board with respect to any significant cybersecurity or data privacy incident;
●
reviews with the Audit
Committee and reports to the Board as appropriate any disclosures made by KBR in regards to any material cybersecurity breach or
incident;
●
reviews and discusses
with management the laws, regulations, and significant legislative and regulatory developments that could materially impact KBR’s
cybersecurity and data privacy risk exposure, and evaluates the integrity of KBR’s information technology systems, processes,
policies, and controls to maintain compliance;
●
reviews with the Audit
Committee and with management the adequacy of KBR’s disclosure controls and procedures related to cybersecurity, artificial
intelligence and information technology issues;
●
reviews and discusses
with management the current data protection best practices utilized by government entities and companies in our industry in comparison
to the practices of KBR;
●
reviews
the appropriateness and adequacy of KBR’s cyber insurance coverage;
●
reviews
and reports to the Board with respect to the budget and resources allocated to cybersecurity and data privacy programs; and
●
meets
periodically in separate executive session with KBR’s General Counsel, Chief Information Officer, and Chief Information Security
Officer.
|
| |
2025
Proxy Statement 29
|
| |
|
Table of Contents
|
Corporate
Governance |
| |
|
| |
Committees of the Board |
NOMINATING AND CORPORATE
GOVERNANCE COMMITTEE
|
Members:
Lynn A. Dugle (Chair)
General Lester L. Lyles
Jack B. Moore
Carlos A. Sabater
Meetings in 2024: 5
Attendance: 100%
|
The Nominating and Corporate
Governance Committee:
●
develops,
implements, and reviews KBR’s corporate governance guidelines;
●
develops
and implements a process to assess Board and committee effectiveness;
●
identifies
and evaluates individuals qualified to become Board members, consistent with Board-approved criteria, NYSE listing standards,
and other applicable requirements;
●
develops
and updates criteria for Board membership and determines the composition of the Board and its committees;
●
reviews
and makes determinations annually regarding each director’s continuation on the Board, independence status and membership
on committees;
●
reviews
and regularly reports to the Board on succession plans and management development programs for members of executive management
and the CEO;
●
reviews
and recommends to the Board the Section 16 officer determinations;
●
establishes
procedures for stockholders to recommend individuals for consideration as possible candidates for election to the Board;
●
establishes
and maintains a Board action plan to address shareholder activism;
●
reviews
shareholder proposals submitted for inclusion in KBR’s proxy statement and recommends any responses to the Board;
●
determines
stock ownership guidelines for KBR’s directors; and
●
reviews
and recommends ways that KBR can enhance shareholder relations.
Our Board determined that each member of the Nominating and Corporate
Governance Committee is independent as defined in NYSE listing standards.
|
|
30 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
| Corporate
Governance |
|
| |
|
| Committees of the Board |
|
SUSTAINABILITY AND
CORPORATE RESPONSIBILITY COMMITTEE
Members:
Ann D. Pickard (Chair)
Nchacha E. Etta
Sir John A. Manzoni KCB
Lt. General Wendy
M. Masiello
Meetings in 2024: 4
Attendance: 100%
|
The Sustainability and Corporate
Responsibility Committee:
●
reviews
KBR’s policies relating to sustainability, human capital management, and corporate responsibility (“SHCMCR”),
including processes to ensure compliance with applicable laws and regulations;
●
reviews
and provides feedback on the management of current and emerging SHCMCR issues;
●
oversees
KBR’s activities in managing major SHCMCR risk exposures;
●
oversees
and receives presentations at least annually from KBR’s Chief HSSE Officer, Chief Sustainability Officer, and Chief People
Officer;
●
reviews
KBR’s political and charitable contributions and social responsibility activities;
●
reviews
and oversees KBR’s SHCMCR strategies and the implementation thereof, including carbon dioxide emission neutrality and other
sustainability goals;
●
reviews
KBR’s public sustainability report and any other applicable public disclosures relating to SHCMCR and (in coordination with
the Audit Committee) the adequacy of KBR’s disclosure controls and procedures related to those reports;
●
oversees
KBR’s development and implementation of its human capital management, including its commitment to the Employee Value Proposition,
and discusses with management reports regarding the development, implementation, and effectiveness of KBR’s policies relating
to human capital management;
●
oversees KBR’s
compliance and plans for compliance in light of new and evolving laws, regulations, rules and policies relating to climate risk,
sustainability, voluntary carbon credits and offsets, human capital management and other related matters, and (in coordination
with the Audit Committee) discusses with management any such developments that may materially impact KBR’s related risk exposures;
and
●
ensures
KBR has policies and procedures and periodically reviews such policies and procedures to protect our culture and values, ensure
fundamental human and workplace rights, prohibit all forms of forced labor and human trafficking, ensure we operate transparently
and with integrity, support human capital management, and build a safe and resilient business that considers climate risk and other
sustainability issues.
|
| |
2025
Proxy Statement 31
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| |
|
Table of Contents
|
Corporate
Governance |
| |
|
| |
Enterprise Risk Management |
Enterprise Risk Management
ERM Framework
The KBR Enterprise Risk Management Organization
administers a fully integrated, enterprise-wide risk management (“ERM”) framework. The framework enhances business
resilience by encouraging uncertainty anticipation and resolution at all levels — from project to enterprise, globally,
across all business units. The ERM team reports to the Chief Compliance Officer (who reports to the General Counsel).
The framework is key to enabling global, real-time
visibility of KBR’s risk profile, where crucial adjustments are the result of risk-based strategy decisions, which in turn
lead to value-added communications to stakeholders. KBR’s ERM mission is essential to growing a successful and sustainable
business.
This inter-connected approach is a consistent,
scalable, and auditable means for us to identify and manage existing and emerging risks and opportunities, both internal and external,
for KBR’s current and future operations, at project, business unit, corporate function, and enterprise levels.
The KBR ERM Framework comprises six phases: Identification,
Assessment, Analysis, Mitigation, Monitoring, and Evaluation. This approach helps leadership see KBR’s changing risk profile
and enables informed strategy decisions and adjustments, better communications to stakeholders, and a common focus based on consistent
and reliable data.
|
32 2025
Proxy Statement
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| |
|
Table of Contents
| Corporate
Governance |
|
| |
|
| Enterprise Risk Management |
|
ERM Program
Risk Management, as one of KBR’s 10 Sustainability
Pillars (as described in the section titled “Sustainability and KBR”), is key to driving KBR to sustainable
business growth. Our resilience, success, and continued evolution depends on our ability to anticipate and respond to the constantly
changing risks in our existing and future operating environments. By rooting ERM principles and practices in our culture and across
our operations, we can consistently visualize the entire risk landscape, mitigate threats, capitalize on opportunities, and create
value and predictable outcomes.
Every employee is empowered to identify risks and
opportunities. Under KBR’s ERM Policy, every risk and opportunity is assigned to an owner, who is accountable for the ongoing
management of the risk or opportunity, including the development and implementation of mitigation plans through to successful
conclusion.
Risks and opportunities are identified and assessed
consistently at the project, business unit, and enterprise levels:
| ● | Stakeholder and multi-disciplinary subject-matter experts identify risks and opportunities and their owners. |
| ● | Owners develop detailed description, risk window, and applicability. Risks are categorized within the two-tier risk breakdown
structure (taxonomy). |
| ● | Owners assess (score) risks and opportunities using a global scoring matrix for probability, commercial impact, schedule impact,
reputational impact, and manageability, in three circumstances: Original (inherent, unmitigated risk), Current (residual, mitigated
with existing controls and actions), and Target (acceptable position). |
| ● | Owners develop responsive action plans, including due dates and action owners. |
| ● | Owners and project/business unit/enterprise ERM focal points regularly review risk/opportunity status, current score, and the
effectiveness of action plans. |
All risks and opportunities are managed on our cloud-based platform,
which provides consistency and real-time data analytics and reporting.
KBR’s Executive Leadership Team (“ELT”) convenes
for dedicated risk and opportunity reviews at least three times per year. The outputs are reported to our Board twice per year,
and to individual business units and projects on a regular basis. This flow of information facilitates management of risks and
opportunities, on an ongoing basis, using the ERM process and tools to provide real time risk-based data.
The ELT review of enterprise risks and opportunities is carried
out in the context of the changing risk and opportunity landscape and KBR’s strategy, which is embedded in the process such
that strategy and the interconnected risks and opportunities are aligned.
Board Oversight
of ERM
Risk oversight is an integral part of the role
of KBR’s Board of Directors. KBR’s Board holds discussions regarding risks and opportunities throughout the year.
The outputs from the ERM Program are formally presented
to our Board twice per year. The ERM report includes strategic, operational, HSSE, information technology and cybersecurity, financial,
geopolitical, sustainability and any new developing areas of risks and opportunities, as well as management’s assessment
of their likelihood and impact, the perceived trend for each (whether increasing, decreasing, or stable), and the measures being
taken to monitor and manage those risks and opportunities.
| |
2025
Proxy Statement 33
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| |
|
Table of Contents
|
Corporate
Governance |
| |
|
| |
Enterprise Risk Management |
While our Board has overall oversight responsibility
for KBR’s ERM Program, various committees of the Board also have the following responsibilities for risk oversight:
|
 BOARD
OF DIRECTORS
●
Reviews
periodic risk reports, including strategic, operational, financial, and hazard risks, as well as management’s assessment
of their likelihood and impact, the perceived trend for each risk (whether increasing, decreasing or stable), and the measures
being taken to monitor and manage those risks.
●
Reviews
legal and compliance risks.
●
Approves
project prospects and merger and acquisition prospects exceeding a prescribed amount of expected revenues, after considering related
commercial, legal and financial risks, agreement terms, and integration process.
|
| |
|
 EXECUTIVES VIA
KBR’S ENTERPRISE RISK MANAGEMENT FRAMEWORK
●
Guide
all business segments in consistently implementing KBR’s ERM Policy and Framework.
●
Report
periodically to the Board on KBR’s changing risk profile, enabling risk-based strategy decisions and improved communications
to stakeholders.
|
| |
 AUDIT
COMMITTEE |
| |
| |
|
●
Reviews
with management KBR’s significant financial risk exposures, as well as other areas of risk exposure if requested by the Board,
and management’s actions to monitor and mitigate those exposures.
●
Receives
periodic reports about potential exposure areas, including litigation, liquidity and capital resources, financial reporting and
disclosures, and regulatory and tax risks.
●
Assesses
in-depth periodic reports from management regarding ethics and compliance issues, and findings from our risk assessment and control
monitoring activities, such as internal controls testing, internal audits, and foreign exchange risk management.
●
Conducts
private sessions with KBR’s Chief Financial Officer, Chief Accounting Officer, Vice President of Internal Audit, and General
Counsel at each regular meeting, and with the independent auditors at each meeting prior to the release of quarterly and annual
results.
●
Provides
a report to the full Board at each regular meeting to ensure the entire Board is informed of matters that the Audit Committee determines
warrant full Board discussion.
|
 |
|
|
|
|
COMPENSATION
COMMITTEE
●
Regularly
considers whether incentive awards and the related performance goals are aligned with our Code of Business Conduct and do not encourage
undue risk-taking.
●
Oversees
annual compensation risk assessment and, if appropriate, recommends changes to our compensation program to mitigate potential risks.
|
NOMINATING
AND CORPORATE GOVERNANCE COMMITTEE
●
Oversees
compliance risks related to KBR’s governance structure and policies.
●
Reviews
succession plans and management development programs for senior executive management to ensure business continuity.
|
CYBERSECURITY
COMMITTEE
Oversees KBR’s information
technology systems (i.e., processes, policies, controls and procedures) to:
●
identify,
assess, and manage risks related to cybersecurity and data privacy;
●
respond
to and manage cybersecurity threats, including cybersecurity incidents; and
●
comply
with legal and regulatory requirements governing data security and protection.
|
SUSTAINABILITY
AND CORPORATE RESPONSIBILITY COMMITTEE
●
Oversees
KBR’s activities in managing its major risk exposures within the sustainability, climate, environment, human capital management,
workforce health, safety, and physical security, and corporate responsibility development areas.
●
Receives
periodic reports from KBR’s Global Sustainability Committee related to these risk exposures and KBR’s efforts to mitigate
the potential risks.
|
Our Board has aligned the ERM Program with KBR’s
strategic goals, linking risk management to business performance. This robust program quickly identifies and assesses risks, ensuring
timely and appropriate responses. Regular evaluations by the Board refine strategies, keeping KBR ahead of emerging risks.
|
34 2025
Proxy Statement
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|
Table of Contents
| Corporate
Governance |
|
| |
|
| Board and Committee Evaluations |
|
Management
Succession Planning
As required by our Corporate Governance Guidelines,
our Board, with input from the Nominating and Corporate Governance Committee, Chair of the Board, and CEO, regularly reviews KBR’s
succession plan and management development programs for all senior management positions. One of the elements that the CEO is evaluated
on each year is the robustness of the executive succession plan, including assessment and development of internal candidates for
the CEO and top-level executive positions.
The entire Board addresses issues relating to CEO
succession planning regularly, and no less than annually, facilitated by the non-executive Chair of the Board. While the Nominating
and Corporate Governance Committee performs the initial review of KBR’s succession plans and makes recommendations to the
Board as necessary, the entire Board has primary responsibility for CEO succession planning and develops both long-term and contingency
plans for this purpose. This process necessarily involves developing and reviewing criteria for the CEO position that reflect
KBR’s business strategy and identifying and developing internal candidates or recognizing the need for external candidates,
as appropriate.
Board and Committee Evaluations
At the direction of our Nominating and Corporate
Governance Committee, we conduct an annual evaluation process to assess the performance of and enhance the overall effectiveness
of our Board and its standing committees.
This process begins with our non-executive directors
completing questionnaires regarding the performance of our Board as a group and the performance of each Board committee they serve.
The questionnaires cover matters such as the effectiveness of the Board’s or committee’s composition, the quality
of discussions at meetings, the adequacy of the Board’s or committee’s risk assessments, Board and committee culture,
quality of engagement with management and other directors, access to information and management support, coordination among committees,
areas of contribution, and areas for further development.
The Nominating and Corporate Governance Committee
presents the results of the questionnaires, which are compiled anonymously, to our Board and committees at regularly scheduled
meetings. The Board and each committee discuss the results and findings of the questionnaires and identify areas for future focus
or continued improvement.
As a result of this evaluation process, the Board
and Board committees instituted several enhancements, including to committee composition, Board processes, Board succession planning,
meeting agendas, director education, and other resources. These changes have also allowed more time for discussion, debate, and
detailed reviews of key risk areas and opportunities, which drives strategic priorities and facilitates stronger governance and
oversight. They have also sharpened the focus on strategic trends for KBR and augmented the Board’s engagement and interaction
with senior management and emerging talent within KBR.
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Table of Contents
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Corporate
Governance |
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Board Refreshment |
Board Refreshment
Process for Selecting New Directors
The Board has delegated to the Nominating and Corporate Governance Committee
the duty of selecting and recommending prospective nominees to the Board for approval. The Nominating and Corporate Governance
Committee considers suggestions of candidates made by current committee and Board members, KBR management, and stockholders. The
Committee also may retain an independent executive search firm to identify candidates for consideration. Stockholders may suggest
candidates for nomination by contacting the Nominating and Corporate Governance Committee in the manner provided under the section
titled “How to Contact the Board.” Candidates suggested by stockholders will be evaluated through the same process
as candidates identified by the Nominating and Corporate Governance Committee, the Board, and KBR management.
BOARD REFRESHMENT
Since 2020:
| 7 |
NEW INDEPENDENT
DIRECTORS (including one director nominee
in 2025) |
2020 |
1 |
2021 |
2 |
2022 |
1 |
2024 |
2 |
2025 |
1 |
| |
new director |
|
new directors |
|
new director |
|
new directors |
|
new director nominee |
|
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Table of Contents
| Corporate
Governance |
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| Stockholder
Engagement |
|
Director Qualifications
Candidates nominated for election or re-election to the Board
of Directors should possess the following qualifications:
| ● |
the highest personal and professional ethics, integrity and values; |
| ● |
an inquiring and independent mind; |
| ● |
practical wisdom and mature judgment; |
| ● |
broad training and experience at the policy-making level in business, government, or technology; |
| ● |
expertise that is useful to KBR and complementary to the background and experience of other Board members; |
| ● |
willingness to devote the required amount of time to carrying out the duties and responsibilities of Board membership; |
| ● |
commitment to serve on the Board for several years to develop knowledge about KBR’s principal operations; |
| ● |
willingness to represent the best interests of all stockholders and objectively appraise management performance; and |
| ● |
involvement only in activities or interests that do not create a conflict with a director’s responsibilities to
KBR and our stockholders. |
The Nominating and Corporate Governance Committee is responsible for
assessing the appropriate mix of skills and characteristics required of Board members in the context of the needs of the Board
at a given point in time. These criteria are periodically reviewed and updated. The Nominating and Corporate Governance Committee
may consider business and other relevant experience, education, areas of expertise, and cultural and personal background when
evaluating individual candidates.
Stockholder Engagement
We actively engage with our investors throughout the year. Senior executives
meet with analysts and investors at our Investor Days and host Investor Calls, and our Corporate Secretary reaches out to our
largest 25 investors twice a year.
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Table of Contents
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Corporate Governance |
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Director Orientation and
Education |
Director Orientation and Education
During director orientation, our new directors typically meet with the
rest of our Board and senior executives before attending their first Board and committee meetings. These preliminary meetings
ensure that our new directors are well-informed about KBR’s current matters in addition to the broad scope of our businesses.
Our new directors also visit project sites and attend town hall meetings to gain more in-depth knowledge of our business practices,
including Zero Harm.
Continuing education for our directors is both important and necessary
due to the fast pace at which business and technology are evolving. Generally, every quarter our Board is presented with an educational
program. Recent topics have included cybersecurity, data protection, data privacy, digitalization, internal controls, governance,
sustainability, and workplace culture. In addition, our directors participate in continuing education outside KBR (at KBR’s
expense) covering a wide range of topics, such as audit matters, board effectiveness, cybersecurity board governance, finance,
and strategy and innovation.
Board Practices and Procedures
Attendance at Meetings
Board members are expected to make every effort to attend the meetings
of the Board and the committees of the Board on which they serve, as well as annual stockholder meetings. KBR’s directors
attended 97% of the aggregate of all meetings of the Board and all meetings of each of the five standing committees during 2024.
All of our current directors attended our 2024 Annual Meeting of Stockholders except for Mr. Nchacha Etta, who joined our Board
of Directors in August 2024, which was after the 2024 Annual Meeting of Stockholders.
The Board of Directors meets each year immediately following the Annual
Meeting of Stockholders and at least four other times per year. Additional regular meetings are scheduled as needed, and special
meetings may be called by the Chair of the Board, the Chief Executive Officer, the President, the Corporate Secretary, or a majority
of the directors in office. KBR’s Bylaws permit action to be taken without a meeting if all members of the Board consent
to such action in writing or by electronic transmission. During 2024, the Board of Directors held seven regular meetings, three
of which were conducted virtually, and one special meeting. The Chair of the Board presides at all Board meetings.
During regular Board meetings, KBR’s independent non-executive
directors meet in scheduled executive sessions, presided over by our independent, non-executive Chair of the Board. During 2024,
the non-executive directors met without management seven times.
Retirement Policy
Non-management directors may not seek re-election once they reach the
age of 75; however, this retirement age may be extended under special circumstances if the Board deems it to be in the best interest
of KBR. For each of the 2021, 2022, and 2023 annual meetings of stockholders, the Board approved the recommendation of the Nominating
and Corporate Governance Committee to grant a 12-month extension to the mandatory retirement age for General Lester Lyles, our
independent, non-executive Chair of the Board, who turned 75 in April 2021.
In 2024, the Nominating and Corporate Governance Committee and the Board
determined that it was in the best interest of KBR to further delay General Lyles’s mandatory retirement because they believed
it was crucial to maintain his leadership and benefit from his significant knowledge, skills, and industry experience, including
in the government, defense, and space fields. General Lyles agreed to continue serving on the Board for another year following
KBR’s 2024 annual meeting of stockholders, and the Board approved the recommendation of the Nominating and Corporate Governance
Committee to grant a fourth, 12-month extension to the mandatory retirement age for General Lyles. On December 17, 2024, General
Lyles notified our Board of his decision to retire from service on the Board, effective as of the conclusion of the 2025 annual
meeting of stockholders.
Any director who retires from their principal current employment or experiences
a material change to their employment status shall promptly notify the Board and offer to tender a letter of resignation to the
Board, shall only be effective if the Board accepts the resignation.
Management directors must retire from the Board at the same time they
leave employment with KBR unless the Board approves continued service as a director.
Service on Other Boards
KBR directors may not serve on the boards of directors of more than three
other publicly held companies or investment companies. In addition, directors serving on the KBR Audit Committee may not serve
on the audit committees of more than two other public companies. Directors must advise the chair of the Nominating and Corporate
Governance Committee before accepting an invitation to serve on another board.
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Table of Contents
| Corporate Governance |
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| Board Practices and Procedures |
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Anti-Hedging Policy
Our anti-hedging policy prohibits all directors, employees, and agents
from speculative trading in our securities; engaging in hedging transactions using our securities; “short selling”
our securities; and trading derivative securities, such as put options, call options, swaps, or collars related to our securities.
Trading in Company Securities
We have adopted a trading in company securities policy governing the
purchase, sale, and other dispositions of securities of the Company by directors, officers, and employees that we believe is reasonably
designed to promote compliance with insider trading laws, rules, and regulations. Our trading in company securities policy states,
among other things, that our directors, officers, and employees are prohibited from trading in such securities while in possession
of material, nonpublic information. The foregoing summary of our trading in company securities policies and procedures does not
purport to be complete and is qualified by reference to our KBR, Inc. Policy on Trading in Company Securities filed as an exhibit
to our Annual Report on Form 10-K for the fiscal year ended January 3, 2025.
Corporate Governance Materials
To ensure that our stockholders have access to our governing documents,
we provide copies of our Code of Business Conduct, Corporate Governance Guidelines, and the charters of each of our standing Board
committees on our website at kbr.com/en/who-we-are/our-company/corporate-governance. Copies will be provided to any stockholder
who requests them by writing to our Investor Relations Department at: 601 Jefferson Street, Suite 3400, Houston, Texas 77002.
Our Code of Business Conduct applies to all directors, officers, and
employees of KBR, and all employees of KBR’s agents. KBR intends to satisfy SEC disclosure requirements regarding amendments
to, or waivers from, any provision of the Code of Business Conduct by posting such information on our website.
How to Contact the Board
KBR invites stockholders and other interested parties to communicate
with the Audit Committee and the Board of Directors. Concerns may be reported anonymously or confidentially via the KBR Ethics
Hotline at ethics.kbr.com or 1-800-461-9330 (instructions for dialing internationally are provided on the ethics.kbr.com homepage).
You may communicate with our Board of Directors, the non-executive directors,
or any Board committee by mail (Board of Directors c/o Director of Business Conduct, KBR, Inc., P.O. Box 3406, Houston, Texas
77253-3406) or e-mail (fhoukbrbod@kbr.com).
Our Director of Business Conduct reviews all communications directed
to the Audit Committee and the Board of Directors. The Chair of the Audit Committee is promptly notified of any significant communication
involving accounting, internal controls, auditing matters, or similar issues. Communications addressed to a named director are
promptly sent to the director. Communications directed to the non-executive directors are promptly sent to the non-executive Chair
of the Board. Communications relating to suggestions for director candidates to be considered and evaluated by the Nominating
and Corporate Governance Committee are promptly sent to the Chair of the Nominating and Corporate Governance Committee. See the
section titled “Board Refreshment” for more information regarding the process for selecting new directors and
the qualifications director candidates should possess. A report summarizing the significant communications is sent to each director
quarterly, and copies of communications are available for review by any director, except that those items addressed to the non-executive
directors are not available to executive directors.
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Corporate Governance |
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Director Compensation |
Director Compensation
The annual compensation for our non-executive Directors is shown below.
Our Compensation Committee reviews the competitiveness of the compensation paid to our non-executive Directors at least annually.
The results of the most recent reviews were presented to our Board in May 2024 and February 2025, and adjustments were made following
these reviews to bring KBR’s average non-executive director compensation closer to the median of compensation paid by our
peers and to reflect the addition of a non-executive lead director role in May 2025.
Mr. Bradie does not receive any additional compensation for serving
on our Board.
| Who receives |
|
Amount and type of compensation |
|
How paid |
| All non-executive directors |
|
$120,000 annual retainer |
|
Quarterly cash payments made prior to the end of each quarter |
| Non-executive Chair of the Board |
|
Additional $200,000 annual retainer |
|
|
| Non-executive Lead Director |
|
Additional $45,000 annual retainer |
|
|
| Audit Committee Chair |
|
Additional $25,000 annual retainer |
|
|
| Compensation Committee Chair |
|
Additional $20,000 annual retainer |
|
|
| Cybersecurity Committee Chair |
|
Additional $20,000 annual retainer |
|
|
| Nominating and Corporate Governance Committee Chair(1) |
|
Additional $20,000 annual retainer |
|
|
| Sustainability and Corporate Responsibility Committee Chair |
|
Additional $20,000 annual retainer |
|
|
| All non-executive directors |
|
$170,000 equity award(2) |
|
Annual grant of restricted stock units that vest in full after six months |
| (1) |
If the non-executive Chair of the Board is concurrently serving as the Chair of the Nominating
and Corporate Governance Committee, there will be no additional annual retainer for the Nominating and Corporate Governance
Committee Chair. |
| (2) |
The number of restricted stock units awarded each non-employee director is equal to $170,000 divided by the
closing price of our common stock on the date of grant (rounded up to the next whole share). |
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Table of Contents
| Corporate Governance |
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| Director Compensation |
|
KBR’s nonqualified elective deferral plan for non-executive Directors
permits non-executive Directors to make an annual election to defer payment of some or all of their cash retainers and equity
compensation for the following year. The non-executive Directors also have the option to elect to have their cash compensation
converted to RSUs. For the 2024 plan year, Ms. Dugle elected to defer 100% of her equity compensation into the plan.
The following table sets forth certain information with respect to KBR’s
compensation for non-executive directors during the fiscal year ended January 3, 2025.
| Name(1) |
|
Fees Earned or
Paid in Cash
($)(2) |
|
Stock Awards
($)(3) |
|
Change in Pension Value and Nonqualified
Deferred Compensation Earnings
($)(4) |
|
All Other
Compensation
($)(5) |
|
Total
($) |
| (a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f) |
| Mark E. Baldwin |
|
132,500 |
|
170,015 |
|
— |
|
2,033 |
|
304,548 |
| Joseph Dominguez |
|
90,000 |
|
170,033 |
|
— |
|
226 |
|
260,259 |
| Lynn A. Dugle |
|
138,750 |
|
170,015 |
|
— |
|
— |
|
308,765 |
| Nchacha E. Etta |
|
60,000 |
|
170,048 |
|
— |
|
— |
|
230,048 |
| Lester L. Lyles |
|
320,000 |
|
170,015 |
|
1,029 |
|
226 |
|
491,270 |
| John A. Manzoni |
|
120,000 |
|
170,015 |
|
— |
|
— |
|
290,015 |
| Wendy M. Masiello |
|
138,750 |
|
170,015 |
|
— |
|
— |
|
308,765 |
| Jack B. Moore |
|
138,750 |
|
170,015 |
|
— |
|
2,435 |
|
311,200 |
| Ann D. Pickard |
|
138,750 |
|
170,015 |
|
— |
|
2,109 |
|
310,874 |
| Carlos A. Sabater |
|
138,750 |
|
170,015 |
|
— |
|
2,235 |
|
311,000 |
| (1) |
Directors who were also full-time officers or employees of KBR received no additional compensation
for serving as directors. |
| (2) |
Reflects fees earned in 2024, including fees that may have been deferred into the KBR Non-Employee Directors
Elective Deferral Plan. Messrs. Dominguez and Etta joined the Board of Directors in May and August 2024, respectively, so
they did not earn cash retainers for the full year. |
| (3) |
The amounts in column (c) represent the grant date fair value of awards granted in 2024
pursuant to the KBR Stock and Incentive Plan. The fair values were determined in accordance with FASB ASC 718,
“Stock Compensation.” Assumptions used in the calculation of these amounts are described in note 1 under
“Significant Accounting Policies” and note 18 under “Share-based Compensation and Incentive
Plans” of our audited financial statements included in our annual report on Form 10-K for the fiscal year ended
January 3, 2025. Dividends paid on the stock awards are not reported separately in this table because they are already
factored into the grant date fair value. Except for Mr. Etta, all directors were fully vested in their restricted stock units
at the end of 2024 because their annual equity awards granted on February 22, 2024, vested in full on August 22, 2024, or
with respect to Mr. Dominguez, granted on May 15, 2024, vested on November 15, 2024. Mr. Etta’s annual equity award
was granted on August 12, 2024, and vested in full on February 12, 2025. |
| (4) |
The amount in column (d) reflects the above-market or preferential earnings on nonqualified deferred compensation
in General Lyles’s cash retainer account under the KBR Non-Employee Directors Elective Deferral Plan. |
| (5) |
The amounts in column (e) reflect travel expenses for spouses to accompany the Directors to one board meeting in 2024. |
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Corporate Governance |
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Director Stock Ownership Guidelines |
Director Stock Ownership Guidelines
Our Board of Directors established stock ownership guidelines for the
non-executive directors to link their financial interests with those of KBR’s stockholders. Non-executive directors are
required to own KBR stock in an amount equal to five times the annual cash retainer within five years of joining the Board of
Directors. As shown below, all of our non-executive directors who have served at least five years are in compliance with the stock
ownership guidelines.
STOCK OWNERSHIP WITH RESPECT TO STOCK OWNERSHIP
GUIDELINES AS OF 2/28/2025
Certain Relationships and Related Transactions
We perform many of our projects through incorporated and unincorporated
joint ventures. In addition to participating as a joint venture partner, we often provide engineering, procurement, construction,
operations, or maintenance services to the joint venture as a subcontractor. Where we provide services to a joint venture that
we control and therefore consolidate for financial reporting purposes, we eliminate intercompany revenues and expenses on such
transactions. In situations where we account for our interest in the joint venture under the equity method of accounting, we do
not eliminate any portion of our subcontractor revenues or expenses; however, we recognize profit on our subcontractor scope of
work up to, but not in excess of, the joint venture’s percent complete on its scope of work. We recognize revenue over time on
our services provided to joint ventures that we consolidate and our services provided to joint ventures that we record under the
equity method of accounting.
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| Corporate Governance |
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| Related Person Policies |
|
Related Person Policies
Our Board of Directors has adopted a policy requiring approval of any
transactions involving our directors, executive officers, nominees for director, any person who is known to be the beneficial
owner of more than 5% of any class of KBR’s voting securities, and any of their respective immediate family members. This
policy covers transactions, arrangements, or relationships or any series of similar transactions, arrangements, or relationships
(including any indebtedness or guarantee of indebtedness) in which (1) KBR (including any of our subsidiaries) is or will be a
participant, (2) the aggregate amount involved exceeds $120,000 in any calendar year, and (3) any related person had, has or will
have a direct or indirect interest (other than solely as a result of being a director or holding less than a 10% beneficial ownership
interest in another entity), and which is required by SEC rules to be disclosed in our public filings. The Board of Directors
will only approve a transaction with related persons when the Board determines such transaction is in the best interests of KBR
or our stockholders. In determining whether to approve or ratify a related person transaction, the Board of Directors will consider
the following factors and such other factors as it deems appropriate:
| ● |
whether the related person transaction is on terms no less favorable than terms generally available
to an unaffiliated third-party under the same or similar circumstances; |
| ● |
whether the transaction is material to KBR or the related person; |
| ● |
the role the related person has played in arranging the related person transaction; |
| ● |
the structure of the related person transaction; |
| ● |
the extent of the related person’s interest in the transaction; |
| ● |
whether there are alternative sources for the subject of the transaction; |
| ● |
the business reason(s) for entering into the transaction; |
| ● |
whether the transaction would impair the independence of an otherwise independent director; and |
| ● |
whether the transaction would present an improper conflict of interest for any director or executive officer of KBR. |
There were no related-person transactions identified for fiscal year
2024.
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Corporate Governance |
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Executive Officers |
Executive Officers
The following biographical information
with respect to each of KBR’s executive officers is current as of March 17, 2025.
 |
|
W.
BYRON BRIGHT, JR.
Age: 51 | Joined KBR in: 2010 | President, Mission Technology Solutions*
Current Position since: January 2025 |
Prior Business Experience
Positions with KBR
● President, Government Solutions — U.S.
● President, KBRwyle
● Senior Vice President of Operations for U.S. Government Services
● Vice President of Business Development for U.S. Government Services
Other Professional Experience
● Supported the government services business at Jacobs Engineering Group Inc.
● Officer in the U.S. Air Force, primarily working in Developmental Test and Engineering, supporting weapons development and rotary wing aircraft flight testing
Education
● B.S. (Engineering and Mechanics), distinguished graduate, U.S. Air Force Academy
● M.S. (Mechanical Engineering), Georgia Institute of Technology
● Graduated from the U.S. Air Force Test Pilot School and has flown in over 25 different aircraft as a flight test engineer
|
| * |
As announced in December 2024, Mr. Bright has been appointed to serve in KBR’s newly created Chief
Operating Officer role effective May 1, 2025. |
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| Corporate Governance |
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| Executive Officers |
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 |
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GREGORY S. CONLON
Age: 56 | Joined KBR in: 2016 | Chief Digital and Development Officer
Current Position since: January 2019 |
Prior Business Experience
Positions
with KBR
● Executive Vice President and Chief Development Officer responsible for Strategy, Global Business Development, Marketing, and Mergers & Acquisitions
● President, Asia-Pacific (“APAC”) responsible for Engineering & Construction (“E&C”) and Government Services (“GS”) in this region
● President, E&C APAC
Other Professional Experience
● Executive Vice President leading business development globally for the WorleyParsons Services business line, the largest business within WorleyParsons
● Has over 25 years of experience in the E&C business, with global experience across a range of subsectors from hydrocarbons to specialist infrastructure
● Various positions in the energy and resources sectors in Australia, Canada, China, Indonesia, Singapore, Thailand, and the United Kingdom
Education
● B.S. (Mechanical Engineering), Royal Melbourne Institute of Technology
|
 |
|
SONIA GALINDO
Age: 56 | Joined KBR in: 2021 | Executive Vice President, General Counsel and Corporate Secretary
Current Position since: November 2021 |
Prior Business Experience
● Senior Vice President, General Counsel, Secretary, and Chief Ethics and Compliance Officer at FLIR Systems, Inc. (now, Teledyne F LLC, a subsidiary of Teledyne Technologies)
● General Counsel and Corporate Secretary at Rosetta Stone Inc.
● Various positions in the public and private sector including at the U.S. Securities and Exchange Commission, the Bill & Melinda Gates Foundation, Keurig Green Mountain, Inc., and McCormick & Company, Inc.
Education
● B.A. (Economics and Management), Hood College for Women
● J.D., University of Illinois Chicago School of Law (formerly John Marshall Law School)
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Corporate Governance |
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Executive Officers |
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 |
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J. JAY IBRAHIM
Age: 64 | Joined KBR in: 2015 | President, Sustainable Technology Solutions
Current Position since: June 2020 |
Prior Business Experience
Positions with KBR
● President, Energy Solutions — Services
● President, Europe, Middle East and Africa (“EMEA”) and APAC responsible for E&C and GS in these regions
● President, EMEA responsible for E&C and GS in this region
● President, E&C EMEA
Other Professional Experience
● Has a wealth of senior experience developing and expanding client relationships within the energy, infrastructure, and government services sectors, with a focus on sustainability and energy transition
● Has over 30 years of E&C and GS experience in both domestic and international markets, having served in a variety of engineering, project management, business development, and business management roles for KBR and previously Parsons E&C/WorleyParsons
Education
● B.S. (Mechanical Engineering), Wichita State University
● M.S. (Mechanical Engineering), Wichita State University
● Diploma in Advanced Management, Harvard University
|
 |
|
JENNI C. MYLES
Age: 57 | Joined KBR in: 2020 | Executive Vice President, Chief People Officer
Current Position since: May 2020 |
Prior Business Experience
● Group HR Director and core member of the Group Executive Committee at G4S
● Chief HR Officer, Americas Region at G4S
● Director of HR & Employee Engagement at G4S
● Various employee relations and human resources management roles at KPMG, Northern Foods, and Ford Motor Company
Education
● L.L.B. (Hons), University of Glasgow
● Fellow of the Chartered Institute of Personnel & Development
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| Executive Officers |
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MARK W. SOPP
Age: 59 | Joined KBR in: 2017 | Executive Vice President and Chief Financial Officer
Current Position since: February 2017 |
Prior Business Experience
● Chief
Financial Officer and Executive Vice President for Leidos Holdings, Inc., previously Science Applications International
Corporation, one of the largest publicly-traded government contractors in the U.S. with significant technically-focused commercial
professional services operations, including serving energy markets
● Various executive positions with Titan Corporation, also involved in government contracting and commercial business areas
Education
● B.S. (Accounting), New Mexico State University
● Completed the Executive Program at UCLA Anderson School
|
 |
|
ALISON G. VASQUEZ
Age: 50 | Joined KBR in: 2016 | Senior Vice President and Chief Accounting Officer
Current Position since: May 2024 |
Prior Business Experience
Positions with KBR
● Vice President of Finance, Sustainable Technology Solutions
● Vice President, FP&A and Investor Relations
● Vice President, Internal Audit
Other Professional Experience
● Director, Internal Audit at Noble Corporation plc
● Director of Corporate Assurance at Energy Transfer LP
● Various public accounting positions with Arthur Andersen LLP and PricewaterhouseCoopers LLP
Education
● B.B.A. (Accounting), University of Texas at Austin
● M.P.A. (Professional Accounting), University of Texas at Austin
● Certified Public Accountant in the State of Texas
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Sustainability and KBR
Vision: to create a safer,
more secure, and sustainable world.
Building on our strong legacy as leaders
in science, technology, and engineering, we are uniquely positioned to deliver world-class solutions to help our customers build a safer,
more secure, and sustainable world. Our One KBR Values underpin that mission and guide our governance, business practices, and behaviors.
KBR’s Code of Business Conduct and other key policies including our Global Sustainability Policy, Global Human Rights Policy, and
Global Environmental Policy define our intentions for preserving our planet and advancing society while pursuing business growth.
Our Sustainability Pillars — ten
key areas of focus across our company spanning people, the planet, and governance — are the foundation of our sustainability efforts
and closely correspond with the United Nations’ (“UN”) Sustainable Development Goals (“SDGs”). As signatories
to the UN Global Compact, we are committed to ensuring that our business is firmly aligned with SDG principles and that they serve as
the benchmark for accomplishing our sustainability goals.
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| Sustainability and KBR |
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| Our Sustainability Pillars and Focus Areas Within Each Topic |
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Our Sustainability Pillars
and Focus Areas Within Each Topic
| People |
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Sustainability Topics |
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Total Inclusion |
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Belong Connect Grow |
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Cybersecurity and data privacy Global human rights |
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Health, Safety &
Security |
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Physical and mental health and well-being |
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Community
Engagement |
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Corporate Giving
● Donate/Charity
● Volunteering |
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Project social impact and value
● Project Community Engagement |
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| Planet |
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Sustainability Topics |
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Cleaner Planet |
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Net Zero and emissions reduction plans |
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Natural Capital
● Water quality
● Air quality
● Ground quality |
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Recycle/Reuse |
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Circular Economy
● Waste/reduction
● Biodiversity |
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Efficient Energy |
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Renewable Energy |
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Sustainable
Travel |
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Efficient and sustainable travel |
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| Principled Governance |
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Sustainability Topics |
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Risk
Management |
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Embedding Sustainable Risk |
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Governance |
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Business Integrity (Our Code of Business Conduct) |
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Supply Partners |
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Sustainable Supply Chain Management |
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Measuring our Impact |
Measuring our Impact
Our top-line KPIs — support for our
Sustainability Pillars — are incentivized via our short-term incentive plans for key executives. We publicly report our sustainability
performance via universally recognized frameworks and standards, and we regularly engage with our key stakeholder groups for continuous
improvement.
Environmental Impact
We have made a significant investment in
our sustainable solutions to help customers reach their own sustainability goals. These solutions range from improving sustainable production
of clothes and furniture, to recycling batteries and utilizing waste to aviation fuel.
Our Global Sustainability Policy, Global
Environmental Policy, and related procedures outline the commitments, expectations, and responsibilities for each employee and project
team to meet identified targets and objectives for each area of the environment. For large scale projects, we measure, manage, and monitor
our use of natural resources, including energy, water, and materials, and seek to reduce emissions and recycle waste throughout our project
work. We also proactively protect and regenerate biodiversity and natural habitat in certain areas where we conduct our business.
Social Impact
KBR’s extensive policies, procedures,
and codes of conduct are designed and implemented to maximize social value and impact for all our stakeholder groups. Our key areas of
social impact and human capital development are reflected in the “People Strategy” section.
People Strategy
Human Capital Management
Every day, the people of KBR help solve
some of the world’s most challenging scientific, technological and engineering problems. From our promising new interns to world-renowned
experts, this Team of Teams delivers for our customers, so in turn, we put them first. At the end of fiscal 2024, we employed approximately
38,000 people performing multi-faceted, complex and mission critical roles in over 29 countries. In addition, our unconsolidated
joint ventures employ approximately 10,000 employees.
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| Measuring our Impact |
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Our Employee Value Proposition (“EVP”)
is the unique set of experiences and offerings that help differentiate KBR from other competitors for our employees’ time and talents
and describes in practical terms how we put our people first.
Purpose & Values
At the center of our EVP is Purpose, because
at KBR, we do work that matters, helping to solve the great challenges of our time while striving to create a better, safer, more sustainable
world. Our vision is to bring together the best and brightest employees to deliver technology and solutions that help our customers accomplish
their most critical missions and objectives, and this important work enables us to attract and retain some of the world’s best
talent, who thrive in this purposeful environment.
Our Values unite us across global cultures,
guiding our behavior and decision making throughout KBR. We have embedded our values in our business processes, established them as a
foundation for our learning and development activities and regularly celebrate employees who epitomize our values-led behavior. Our employees
have told us that their experience is aligned to our values even in the ‘new normal’ of a hybrid and flexible working environment.
While our One KBR Values unite us, as a
global business operating in distinct markets and environments, we recognize and respect that our cultures are different. Acknowledging
these differences, our sustainability culture weaves a golden thread through KBR. Our employees take enormous pride in being part of
an organization with a philosophical, practical and proven commitment to Zero Harm.
Health and Safety
We are subject to numerous worker health
and safety laws and regulations. Our commitment to the health and safety of each employee as well as anyone we work with is the foundation
of our Zero Harm culture. We know that our employees’ willingness to implement each commitment into their daily work tasks is vital
to our operations and has contributed to our strong safety performance among our customers, partners and peers.
The six core processes that comprise our
Transactional Health, Safety, Security, Environmental (“HSSE”) Management that lead to Transformational Leadership are non-negotiable
KBR safety standards that are required to be observed and followed by employees and contractors at all locations and projects. By requiring
our employees to personally internalize and adhere to these standards, we aim to safeguard our individual health and safety and the well-being
of all those around us.
We believe that KBR has provided the tools
and processes our people need to achieve the mindset of 24/7 Zero Harm. One process known as the Courage to Care Conversation is instrumental
in developing a continual awareness of unsafe acts through observation, intervention and conversation. The goal of the Courage to Care
Conversation is to continuously evaluate the work environment and to focus on people and their actions.
Thanks to our people’s commitment to our
Zero Harm culture, we recorded another consecutive year of industry-leading HSSE performance, with a total recordable incident rate of
0.050.
Our Journey to Zero Harm has allowed us
to create a company culture where safe execution is non-negotiable and people take responsibility and accountability. When it comes to
safety, we strive for one number: Zero.
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Measuring our Impact |
Ethics and Compliance
KBR’s ethics and our Code of Business Conduct
(the “Code”) are rooted in our values and provide the standards and support to help us successfully navigate issues, make
the right decisions, and conduct our business with the integrity that reflects our heritage and ethical reputation. Additionally, our
Code is essential to how we as a Team of Teams interact with the world around us and to our success.
We believe that an ethical culture, where
employees are treated fairly, respectfully and without favoritism, is key to employee satisfaction and retention. We promote a speak-up
culture where employees are comfortable making reports of possible unethical behavior and workplace issues. The Business Integrity Team
has implemented a Question Manager as part of our Ethics Hotline for employees to receive advice, confidentially or anonymously, on ethical
or other inquiries. Employees speaking up and reporting issues enable us to address and remediate these issues early and effectively
while instilling confidence that employee concerns are heard and addressed. The recent People Perspective Survey indicates that a majority
of our employees feel safe to report misconduct and reflects our dedication to an ethical culture.
Retaliation undermines a speak-up culture
and is not tolerated. Our Code and our Whistleblower program set forth our anti-retaliation commitment, which is reinforced in our communications
and our annual Ethics training. To further convey to the workforce that reports of unethical behavior are investigated and remediated,
the Ethics training incorporates examples of past misconduct incidents.
Career
As well as providing meaningful work from
Day 1, our employees and job applicants are attracted to KBR because of the opportunity to develop personally and reach their full potential.
Providing the opportunity to ‘Grow’ at KBR is a key component in our EVP. We have a good reputation among our employees for
providing growth opportunities and have continued to focus on enhancing these growth prospects in several ways throughout fiscal 2024
with the introduction of formal mentoring and sponsorship programs, skills for the future offerings and an internal career pathways forum.
In addition, we invest in training our employees across a range of topics that align with and enhance our values, including programs
that focus on leadership, ethics and technical development.
Technical Professionals
For our Technical Talent, our One KBR Tech
Fellows program provides funding and opportunities for these world-leading scientists and technical professionals to conduct advanced
research into topics ranging from carbon capture to machine learning. Our Fellows also provide valuable input into strategy development,
business development and talent development within KBR. Understanding the importance of internal advancement for attracting and retaining
top technical talent, we introduced the Career Opportunities Technical Talent Guide to outline technical career growth through roadmaps,
expectations for each career journey stages and resources and tools. KBR Communities of Interest (“COIs”) are also designed
to foster technical development by providing collaborative, virtual forums for subject matter experts and those who support them. Our
COIs continue to evolve, ensuring that subject matter experts across the globe can connect and collaborate on Data Science and Digital
Technologies, Sustainability and Energy Transition, Human Performance and other technical specialties that inform our customers’
and society’s greatest challenges today.
Leadership
Our flagship leadership program, the Global
Leadership Development Program, is expanding to go beyond training to develop capabilities in being effective future executive leaders.
As well as developing strategic thinking through research projects ranging from sustainability investments to digital supply chain solutions,
these leaders attend intense learning events focused on executive skills and leading courageously and with integrity. The revamped course
will cultivate peer networks, sharpen enterprise mindsets and build commercial and strategy acumen. We also strengthen our future leadership
by running regular Manager Excellence Programs, and our Front Line Leaders Program grew substantially in fiscal 2024 to support over
1,000 employees globally who were newly transitioning into these critical leadership roles.
Talent Development & Succession Planning
In fiscal 2024, our Talent Calibration
conversations covered over 5,000 KBR employees in this rigorous assessment of performance and potential. As well as providing organization-wide
talent trends and data, these conversations lead to individual career plans and added rigor to our succession plans. The Board Nominations & Corporate Governance Committee received regular updates on this process throughout the year, culminating in detailed discussions on updated
succession plans for the CEO and Executive Leadership Team.
Performance Management
Our agile approach to performance management
continued successfully into fiscal 2024 where we focused on frequent Check-in Conversations about performance, career development, and
priority alignment between managers and their team members. Our employees indicated in surveys that they prefer this approach and we
view it as more inclusive, engaging, agile and supportive of a high-performing culture. In fiscal 2024, we continued to embed the Agile
Performance & Development process across KBR and strengthen capabilities for holding quality, effective Check-ins.
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| Measuring our Impact |
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Employee Engagement
Our employee survey measures our progress
through the eyes of our people. We partner with Great Place to Work to conduct the survey on our behalf, enabling us to provide the survey
in multiple languages and benchmark how we perform compared to other similar organizations. In fiscal 2024, our employee participation
rate in our People’s Perspective survey increased by 10%. The data from our survey was reviewed in detail by different team leaders
and across different business areas, resulting in tailored action plans that are already being executed across KBR. A significant majority
of our employees who responded to the survey reported that they believe KBR is a great place to work, resulting in KBR being certified
as a ‘Great Place to Work’ in several countries, taking us to thirteen countries where KBR is officially certified. We were
also awarded for one of Glassdoor’s Best-led Companies, Newsweek’s Greatest Workplaces and Times Best Companies list amongst
many other regional awards in 2024.
Total Reward
Competition for talent was compounded by
high levels of inflation in the general economy well into fiscal 2024. Throughout fiscal 2024, we continued to benchmark pay and benefits
in local markets and expand our offerings to help us attract and retain the best and brightest talent.
Talent Acquisition
In fiscal 2024, we updated our comprehensive
Talent Acquisition strategy, aligning recruitment efforts with broader business objectives. This unified approach ensures consistency
across regions while empowering teams to tailor strategies to their local markets. By fostering cross-border collaboration and establishing
teams from varying regions, we improved process consistency, adoption of best practices and scalability. These efforts strengthened internal
mobility, built future-focused talent pipelines and enhanced our ability to meet hiring demands effectively. We also made enhancements
to our Applicant Tracking System and Customer Relationship System platforms, further streamlining workflows for candidates, hiring managers
and recruiters while improving training and standardization.
As a result, we hired over 8,600 employees
in fiscal 2024, supporting our ability to deliver excellent solutions for our customers and meet our strategic growth targets.
 KBR employees recently joined over 90,000
participants to ‘run Sydney’ in the world’s largest fun run, City2Surf, where they collectively raised over $3 million
for charity. Widely recognized as a bucket-list event for runners and adventure lovers around the world, City2Surf commences in the central
business district of Australia’s largest city, Sydney, before making its way to one of the world’s most iconic beaches, Bondi.
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Executive Compensation
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| Executive Compensation |
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| Proposal No. 2 |
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| PROPOSAL NO. 2 |
Advisory Vote to Approve Named Executive Officer Compensation |
The Board of Directors is providing our stockholders
with the opportunity to cast a non-binding advisory vote to approve the compensation of our Named Executive Officers (“NEOs”)
as disclosed in this proxy statement.
Our Compensation Committee establishes, recommends, and governs all the
compensation and benefits policies and actions for KBR’s NEOs, as discussed in the “Compensation Discussion and Analysis”
section of this proxy statement. Consistent with our compensation philosophy, our executive compensation program was designed
to achieve the following primary objectives:
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provide a clear and direct relationship between executive pay and company (and business segment, as
applicable) performance, both on a short- and long-term basis; |
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emphasize operating performance measures; |
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link executive pay to measures of stockholder value; |
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support our business strategies and management processes in order to motivate our executives; and |
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generally target base salary, short-term incentives, long-term incentives, and total compensation levels near the 50th percentile
of the competitive market for good performance, and above the 50th percentile of the competitive market for consistent,
outstanding performance. |
In light of these objectives, KBR provides pay that is highly dependent
on performance. We continually review best practices in governance and executive compensation. Consistent with such best practices,
KBR:
| |
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does not maintain employment agreements with the NEOs; |
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does not provide excise tax gross-ups; |
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has incentive plans that discourage undue risk and align executive rewards with short- and long-term company performance;
and |
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requires executives to satisfy stock ownership requirements. |
For the reasons discussed above, the Board of Directors unanimously recommends
that stockholders vote in favor of the following resolution:
“RESOLVED, that the compensation paid to KBR’s named
executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation
tables and narrative discussion, is hereby APPROVED.”
While the resolution is non-binding, the Board of Directors values your
opinion and will consider the outcome of the vote when making future compensation decisions.
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The Board of Directors recommends that you Vote FOR the
advisory vote to approve our NEOs’ compensation as disclosed in this proxy statement. All proxies will be so voted unless
a stockholder specifies otherwise. |
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Compensation Discussion and Analysis |
Compensation Discussion and Analysis
Executive Summary
NAMED EXECUTIVE OFFICERS
This Compensation Discussion and Analysis provides a detailed description
of our compensation philosophy, objectives, policies, and practices in place during 2024, and it explains the factors considered
by our Compensation Committee in making compensation decisions for the following NEOs:
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| Stuart Bradie |
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Mark Sopp |
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Byron Bright* |
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Jay Ibrahim |
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Sonia Galindo |
President and Chief
Executive Officer |
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Executive Vice
President and Chief
Financial Officer |
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President, Mission
Technology Solutions |
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President, Sustainable
Technology Solutions |
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Executive Vice
President, General
Counsel and Corporate
Secretary |
*Effective May 1, 2025, Byron Bright will assume the position of Chief
Operating Officer of KBR.
These NEOs, together with the other members of our executive management
team whose compensation is determined by our Compensation Committee and our Board of Directors, are referred to as our “Senior
Executive Management.”
COMPENSATION HIGHLIGHTS
Key Compensation Decisions for 2024
Our Compensation Committee made the following key decisions related to
KBR’s compensation program for 2024:
| BASE
SALARY |
SHORT-TERM
INCENTIVE (“STI”)
PLAN PAYOUT |
LONG-TERM
INCENTIVE (“LTI”)
PLAN PAYOUT |
| Each of our NEOs received a raise in 2024 to reflect their
strong performances, maintain alignment with market benchmarks, and with respect to Mr. Ibrahim, enhance internal pay equity. |
Each of our NEOs earned an above-target payout for their 2024 STI awards based on KBR’s exceptional
financial results and their personal contributions to our operational, safety and sustainability improvements. |
Each of our NEOs earned above-target cash and stock payouts for
their 2022 Long-Term Performance Cash and Stock Awards, which had a three-year performance period that ended December 31, 2024. |
Their
2024 raises were approximately:
● Bradie:
4%
● Sopp,
Bright, and Galindo: 5%
● Ibrahim:
10% |
Their 2024
STI payout percentages were:
● Bradie: 134.6%
● Sopp and Bright: 132.1%
● Ibrahim: 145.4%
● Galindo: 135.4% |
For
each of our NEOs, their 2022 LTI performance award payouts were:
● Cash: 158.3% of target
for the 50% portion based on book-to-bill (“B2B”) performance
● Stock: 117.8% of target
for the 50% portion based on relative total stockholder return (“TSR”) performance |
Our Compensation Committee believes all our compensation programs strongly
reflect our pay-for-performance strategy.
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| Compensation Discussion and Analysis |
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Advisory Vote on Compensation and Stockholder
Engagement
We believe we have a well-designed executive compensation program, and
KBR’s stockholders seem to agree. Our most recent say-on-pay proposal, presented during the 2024 annual meeting, garnered
the support of approximately 98% of the votes cast. The Compensation Committee was gratified by this result.
In addition to the Compensation Committee considering the outcome of
our say-on-pay proposal, our Corporate Secretary reaches out to our largest investors bi-annually to maintain an open dialogue
about our compensation policies, practices, and structure, and to receive feedback on elements that could be changed to better
align with stockholders’ interests. In 2024, our Corporate Secretary reached out to all of KBR’s top 25 investors,
which collectively represented approximately 68% of our outstanding stock, and had calls with or heard from investors representing
approximately 33% of our outstanding stock. A majority of these investors indicated that they did not have any significant concerns
about our executive compensation program.
We will continue to consider the outcome of our say-on-pay proposal and
other stockholder feedback when determining future compensation policies and decisions for our NEOs.
CEO Compensation and KBR Performance
Our CEO’s strategic actions positioned KBR for long-term growth,
and we have continued to see these actions deliver strong results and improve stockholder value. Our adjusted EPS increased by
15% from fiscal 2023, and our adjusted EBITDA increased by 16% from fiscal 2023 (see reconciliations under the section titled
“Non-GAAP Financial Information” at the end of this proxy statement).
The alignment of our CEO’s compensation with KBR’s performance
and stockholder value during the past three years is summarized below and on the next two pages. These graphs are not intended
to replace the disclosure required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and
Item 402(v) of Regulation S-K, which is presented in the section titled “Pay Versus Performance”.
CEO’S REALIZED COMPENSATION
| * |
The LTI Payouts represent the cash and KBR common stock payouts of the 2020, 2021, and 2022 KBR
Long-Term Performance Cash and Stock Awards, with the stock valued at the closing prices on December 30, 2022, December
29, 2023, and January 3, 2025, respectively (the last trading days of the fiscal years). |
| ** |
Diluted EPS reflects our Net income (loss) attributable to KBR divided by the weighted average number of common shares
outstanding during the period in addition to common shares that would have been outstanding if potential common shares with
a dilutive effect had been issued. Adjusted EPS excludes certain amounts included in diluted EPS. A reconciliation of adjusted
EPS to diluted EPS is provided under the section titled “Non-GAAP Financial Information” at the end of
this proxy statement. |
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Compensation Discussion and Analysis |
KBR TOTAL STOCKHOLDER RETURN*
| * |
The KBR TSR shown above is the cumulative TSR on shares of our common stock assuming an investment
of $100 on December 31, 2019, and reinvestment of all dividends. |
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ADJUSTED EBITDA* GROWTH AND STRATEGIC ACTIONS
| Acquisition of VIMA Group. Committed to investment of an additional £80M
in Mura Technology to advance the plastics circular economy. Global Household Goods contract award was upheld in the Court
of Federal Claims. KBR’s joint venture with Zachry Group, KZJV, was issued a full notice to proceed with Phase 1 of Plaquemines
LNG. |
|
Retired convertible notes and warrants without dilution. Launched Sustainable Aviation
Fuel technology to extend our decarbonization and energy transition portfolio into the aviation sector. KBR’s H2ACTSM
hydrogen technology selected for the world’s first commercial ammonia cracking unit. Received a coveted AAA designation
in MSCI’s 2023 sustainability ratings. |
|
Acquisition of LinQuest. Executed segment realignment for fiscal 2025 to better serve
KBR’s customers and end markets, reduce costs, and open a larger pipeline of opportunities. |
| * |
Adjusted EBITDA is defined as Net income (loss) attributable to KBR, plus Interest expense; Accretion
of Convertible Notes debt discounts; Other non-operating expense (income); Provision for income taxes; Depreciation
and amortization; and certain discrete items as identified by management to be non-recurring in nature. A reconciliation
of adjusted EBITDA to net income is provided under the section titled “Non-GAAP Financial Information” at
the end of this proxy statement. |
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Compensation Discussion and Analysis |
Overview of Executive Compensation Philosophy,
Policies and Practices
KEY CONSIDERATIONS IN DETERMINING EXECUTIVE
COMPENSATION
Our Compensation Committee regularly reviews the elements of the individual compensation packages for our NEOs, with a goal
of ensuring that:
| ● |
Pay packages align executives’ interests with our stockholders’ interests; |
| ● |
Performance metrics are sufficiently challenging; |
| ● |
Target pay packages reflect an appropriate mix of short-term and long-term incentives; and |
| ● |
Total compensation, as well as each individual compensation element, is targeted near the 50th percentile of the
competitive market for good performance and above the 50th percentile of the competitive market for consistent, outstanding
performance, taking into consideration factors like differences in our NEOs’ respective responsibilities compared to
responsibilities ascribed to their counterparts at our peers, as well as experience, retention risk, and internal pay
equity. |
Our executive compensation program is regularly reviewed to ensure that
it remains consistent with these objectives and is administered in accordance with established compensation policies.
POLICIES AND PRACTICES
Below is a summary of our compensation policies and practices in place
during 2024.
| Clawbacks |
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● |
We have adopted a clawback policy in compliance with Section 10D of the Securities Exchange Act of
1934 (“Exchange Act”) and the NYSE rules. Pursuant to our policy, if the Company is required to prepare an accounting
restatement, our Compensation Committee must recoup any erroneously awarded incentive compensation paid to current and former
executive officers of the Company. |
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|
● |
Certain of our officers’ award agreements also include additional clawback provisions that extend beyond the requirements
of Section 10D of the Exchange Act and the NYSE rules. |
| Stock Ownership Guidelines |
|
● |
We require our NEOs to own a significant amount of KBR stock to align their interests with our stockholders’ interests. |
| No Pledging |
|
● |
Officers and directors may not pledge KBR stock. |
| No Hedging |
|
● |
Officers and directors may not hedge KBR stock. |
| Equity Award Grant Practices |
|
● |
We do not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. |
| Market Comparison |
|
● |
Our Compensation Committee benchmarks executive compensation against relevant peer groups of companies in our industry
and companies of similar size and complexity. |
| Performance-Based Compensation |
|
● |
A majority of our NEOs’ compensation is performance-based and varies depending on the achievement of absolute and
relative performance goals. |
| Double-Trigger |
|
● |
Our severance and change-in-control agreements require a double-trigger for a change-in-control termination (i.e., the
occurrence of both a change in control and a termination of employment within two years thereafter) in order for an executive
to receive change-in-control benefits. |
| No Employment Agreements |
|
● |
Our NEOs do not have employment agreements. |
| No Tax Gross-Ups |
|
● |
We do not provide excise tax gross-up agreements. |
| No Option Repricing |
|
● |
We prohibit the repricing of KBR stock options. |
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| Compensation Discussion and Analysis |
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ROLE OF THE BOARD AND THE COMPENSATION COMMITTEE
Each year, usually in December, our non-executive directors meet in executive
session to evaluate the performance of our Chief Executive Officer, considering qualitative and quantitative elements of the CEO’s
performance, including:
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leadership and vision; |
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● |
integrity; |
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● |
keeping the Board informed on matters affecting KBR and its operating units; |
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performance of the business, including such measurements as TSR and achievement of financial objectives and goals; |
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development and implementation of initiatives to provide long-term economic benefit to KBR; |
| |
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accomplishment of strategic objectives; and |
| |
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development of management. |
The CEO’s evaluation and compensation for the next full year, including
an evaluation of whether the CEO has created adequate management succession programs, are communicated to the CEO by the non-executive
Chair of the Board after review and approval by our Compensation Committee and the full Board of Directors (other than the CEO).
Based on the CEO’s recommendations and in concert with him, our
Compensation Committee annually reviews and approves the compensation and incentive awards for our Senior Executive Management.
ROLE OF THE CEO
During 2024, our CEO made recommendations to our Compensation Committee
regarding the compensation and incentives for our NEOs other than himself. Our CEO also:
| |
● |
recommended performance measures, target goals, and award schedules for short-term
and long-term incentive awards, and reviewed performance goals for consistency with our projected business plan; |
| |
● |
reviewed competitive market data for Senior Executive Management positions; and |
| |
● |
developed specific recommendations regarding the amount and form of equity compensation to be awarded to our NEOs other
than himself. |
ROLE OF INDEPENDENT CONSULTANTS
Under its charter, our Compensation Committee is authorized to retain
a compensation consultant and has the sole authority to approve the consultant’s fees and other retention terms. While we
believe that retaining third-party consultants is an efficient way to remain informed about competitive compensation practices,
the advice of outside professionals is just one of many factors the Compensation Committee considers. Most importantly, we design
and adjust our compensation program to address the program’s intended objectives.
In 2024, our Compensation Committee used the services of one compensation
consulting firm, Meridian Compensation Partners, LLC (“Meridian”). Our Compensation Committee engaged and managed
its relationship with Meridian directly, and Meridian reported directly to our Compensation Committee. Outside of providing advisory
services to our Compensation Committee, Meridian provided no other services to KBR or our affiliates.
Meridian’s work for KBR included advising our Compensation Committee,
as requested, with respect to all executive compensation matters and various director compensation matters, including:
| |
● |
A review of CEO pay considerations for 2024; |
| |
● |
A review of our short-term and long-term incentive design and peer groups for the 2024-2025 compensation cycle; |
| |
● |
Regular updates on notable legislative and regulatory activities; |
| |
● |
Competitive market studies of compensation for Senior Executive Management and for non-executive directors; and |
| |
● |
A review of the risk profile of our short-term and long-term incentive programs. |
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In December 2024, our Compensation Committee reviewed the independence
factors prescribed by the SEC (as well as other factors identified by the NYSE) as affecting the independence of a consultant
or adviser, including the following:
| |
● |
Whether Meridian provides other services to KBR; |
| |
● |
The amount of fees Meridian received from KBR as a percentage of
that firm’s total revenue; |
| |
● |
Meridian’s policies and procedures that are designed to prevent
conflicts of interest; |
| |
● |
Whether there is any business or personal relationship between an
individual Meridian compensation consultant or other adviser and a member of our Compensation Committee; |
| |
● |
Whether there is any business or personal relationship between an
individual Meridian compensation consultant, principal, or employee, or Meridian as an organization, and any of KBR’s
executive officers; and |
| |
● |
Whether Meridian or any of its principals or employees owns any
stock of KBR. |
Based on the results of this review, our Compensation Committee confirmed
Meridian’s independence and lack of any conflicts of interest in 2024 and approved the continued retention of Meridian for
2025.
PEER GROUPS
In the design and administration of our 2024 executive compensation programs
for our NEOs, our Compensation Committee considered competitive market data from a peer group (the “Peer Group”).
As discussed under the section titled “KBR Long-Term Performance Cash and Stock Awards” on page 72, the Compensation
Committee also refers to a “TSR Peer Group” for limited purposes related to the NEOs’ long-term incentive awards.
The Peer Group comprised 19 companies for the 2023-2024 compensation
cycle. The Peer Group was unchanged from the 2022-2023 compensation cycle except for the removal of ManTech International Corporation
due to its acquisition by The Carlyle Group Inc. in September 2022.
The Peer Group was formed based on a review considering KBR’s two
operating business segments in fiscal 2023 — Government Solutions (renamed Mission Technology Solutions as part of a segment
realignment for fiscal 2025) and Sustainable Technology Solutions — and several factors relating to the constituent companies,
including an analysis of certain financial metrics (such as revenue, net assets, market capitalization, enterprise value, and
number of employees), business strategies, the effects of corporate transactions, and the availability of market data. The Peer
Group companies in the table on the next page have operations in the following industry sectors: government services, information
technology consulting, engineering and construction, and industrial and manufacturing. Our Compensation Committee believes the
Peer Group companies appropriately represent KBR’s market for key management and technical talent and are the companies against
which KBR most competes for employees and business.
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| Compensation Discussion and Analysis |
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The Peer Group used for 2024 compensation decisions
consisted of the following companies:
| Company | |
| | |
| | |
|
| (Data in billions — as of 12/31/2023 except as otherwise indicated) | |
Revenues | | |
Assets | | |
Market Cap |
| BAE Systems plc | |
$ | 23.078 | | |
$ | 32.064 | | |
$ | 42.962 |
| Booz Allen Hamilton Holding Corporation(1) | |
$ | 9.259 | | |
$ | 6.551 | | |
$ | 16.677 |
| CACI International Inc.(2) | |
$ | 6.703 | | |
$ | 6.601 | | |
$ | 7.215 |
| Conduent Incorporated | |
$ | 3.722 | | |
$ | 3.162 | | |
$ | 0.793 |
| Dover Corporation | |
$ | 7.684 | | |
$ | 11.349 | | |
$ | 21.517 |
| Flowserve Corporation | |
$ | 4.321 | | |
$ | 5.109 | | |
$ | 5.408 |
| Fluor Corporation | |
$ | 15.474 | | |
$ | 6.973 | | |
$ | 6.674 |
| Gartner, Inc. | |
$ | 5.907 | | |
$ | 7.836 | | |
$ | 35.163 |
| Hubbell Incorporated | |
$ | 5.373 | | |
$ | 6.914 | | |
$ | 17.638 |
| Huntington Ingalls Industries, Inc. | |
$ | 11.454 | | |
$ | 11.215 | | |
$ | 10.314 |
| Jacobs Solutions Inc.(3) | |
$ | 10.851 | | |
$ | 14.617 | | |
$ | 16.396 |
| L3Harris Technologies, Inc. | |
$ | 19.419 | | |
$ | 41.687 | | |
$ | 39.921 |
| Leidos Holdings, Inc. | |
$ | 15.438 | | |
$ | 12.695 | | |
$ | 14.884 |
| Parsons Corporation | |
$ | 5.443 | | |
$ | 4.804 | | |
$ | 6.578 |
| Science Applications International Corporation(4) | |
$ | 7.704 | | |
$ | 5.543 | | |
$ | 6.472 |
| Teradata Corporation | |
$ | 1.833 | | |
$ | 1.873 | | |
$ | 4.255 |
| Tetra Tech, Inc. | |
$ | 4.523 | | |
$ | 3.820 | | |
$ | 8.889 |
| Textron Inc. | |
$ | 13.683 | | |
$ | 16.856 | | |
$ | 15.763 |
| The Timken Company | |
$ | 4.769 | | |
$ | 6.542 | | |
$ | 5.655 |
| MEDIAN
(INCLUDING KBR) | |
$ | 7.320 | | |
$ | 6.757 | | |
$ | 9.601 |
| KBR, INC. | |
$ | 6.956 | | |
$ | 5.565 | | |
$ | 7.481 |
| (1) |
Booz Allen Hamilton Holding Corporation’s revenues and assets are as of 3/31/2023 and market cap is as of 12/31/2023. |
| (2) |
CACI International Inc.’s revenues and assets are as of 6/30/2023 and market cap is as of 12/31/2023. |
| (3) |
Jacobs Solutions Inc.’s revenues and assets are as of 9/30/2023 and market cap is as of 12/31/2023. |
| (4) |
Science Applications International Corporation’s revenues and assets are as of 1/31/2023 and market cap is as of 12/31/2023. |
The compensation data
for our Peer Group was obtained from publicly available sources, including proxy statements and Form 4 and 8-K disclosures,
and was not adjusted, and the Equilar Executive Compensation Survey (which Meridian used to analyze peer company compensation
data that was not publicly available).
During 2024, our Compensation Committee asked
Meridian to review the appropriateness of the Peer Group for assessing the competitiveness of our executive compensation programs.
As a result of Meridian’s review and recommendation, our Compensation Committee maintained the same Peer Group for 2025 compensation
with the exception of removing Conduent Incorporated due to its financial position.
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Summary of 2024 Target
Compensation of Named Executive Officers
The table below reflects target annual
compensation and is not intended to replace the more detailed information provided in the Summary Compensation table. The target
dollar amounts for restricted stock units and performance cash and stock awards represent 33 ⅓% and 66 ⅔% of the
long-term performance incentives, respectively. The number of restricted stock units is determined by dividing the target dollar
amount by the closing price of KBR common stock on the date of grant. The target number of performance cash and stock award units
that represents the right to receive one share of KBR common stock if the TSR performance metric is achieved is determined by
dividing the target dollar amount of the TSR portion of the award by the closing price of KBR common stock on the date of grant. See
the section titled “Long-Term Performance Incentives” for more information.
| | |
| | |
| | Target 2024 Long-Term Performance
Incentives | |
|
| |
2024
Base Salary | | |
Target 2024
Short-Term
Incentive | | |
Time-Based
Restricted Stock
Units Target
Dollar Amount | | |
Performance
Cash and Stock
Award Target
Dollar Amount | | |
Total Target
Amount |
| Mr. Bradie | |
$ | 1,275,000 | | |
$ | 1,912,500 | | |
$ | 2,550,048 | | |
$ | 5,100,000 | | |
$ | 10,837,500 |
| Mr. Sopp | |
$ | 741,303 | | |
$ | 704,238 | | |
$ | 600,032 | | |
$ | 1,200,000 | | |
$ | 3,245,541 |
| Mr. Bright | |
$ | 712,006 | | |
$ | 676,406 | | |
$ | 433,337 | | |
$ | 866,667 | | |
$ | 2,688,412 |
| Mr. Ibrahim | |
$ | 678,101 | | |
$ | 644,196 | | |
$ | 400,021 | | |
$ | 800,000 | | |
$ | 2,522,297 |
| Ms. Galindo | |
$ | 648,900 | | |
$ | 616,455 | | |
$ | 366,706 | | |
$ | 733,333 | | |
$ | 2,365,355 |
Elements of Compensation
Our executive compensation program has been
designed to ensure that KBR can attract and retain talented executives who are motivated to pursue KBR’s strategies, focus
employees’ efforts, and achieve business success. The compensation program also must align executives’ interests with
stockholders’ interests. There is no pre-established formula for the allocation between cash and non-cash compensation or
between short-term and long-term compensation. Instead, each year our Compensation Committee determines, in its discretion and
business judgment, the appropriate level and mix of compensation to reward our NEOs for near-term superior performance and to encourage
commitment to our long-range strategic business goals. When making these decisions, our Compensation Committee is always mindful
of our philosophy that the majority of NEO compensation should vary with KBR’s performance.
As shown below, a significant portion of our
NEOs’ target annual compensation in 2024 was performance-based.
| CEO’s TARGET COMPENSATION |
|
AVERAGE OF OTHER NEOs’ TARGET COMPENSATION |
| |
|
|
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|
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| Compensation Discussion and Analysis |
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Our 2024 executive compensation program consisted
of three core elements of direct compensation: base salary, short-term (annual) incentives, and long-term incentives. These elements
are described on the next several pages.
BASE SALARY
We pay our NEOs market-competitive base salaries
for the skills and experience they bring to their respective roles. To arrive at base salary amounts, our Compensation Committee
uses its discretion to adjust market-based amounts to reflect:
| |
● |
Leadership and individual performance; |
| |
● |
Internal pay equity; |
| |
● |
Level of responsibility; |
| |
● |
Experience in current role; and |
| |
● |
External factors involving general economic conditions and marketplace compensation trends. |
The table below shows the base salaries for
our NEOs, effective January 1, 2024.
| |
Increase
(% of 2023 Base Salary) |
2024
Base Salary |
Basis for Decision |
| Mr. Bradie |
$ |
47,500 |
$ |
1,275,000 |
Market data alignment,
strong performance,
and internal pay equity |
| |
|
(4%) |
|
|
| Mr. Sopp |
$ |
35,300 |
$ |
741,303 |
| |
|
(5%) |
|
|
| Mr. Bright |
$ |
33,905 |
$ |
712,006 |
| |
|
(5%) |
|
|
| Mr. Ibrahim |
$ |
61,646 |
$ |
678,101 |
| |
|
(10%) |
|
|
| Ms. Galindo |
$ |
30,900 |
$ |
648,900 |
| |
|
(5%) |
|
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SHORT-TERM INCENTIVES
(ANNUAL)
Our Compensation Committee established the
KBR Senior Executive Performance Pay Plan (the “Performance Pay Plan”) to reward Senior Executive Management for improving
financial results for our stockholders by linking cash compensation to the achievement of KBR’s short-term financial performance
and individual annual goals. The Performance Pay Plan was created under the stockholder-approved Amended and Restated KBR, Inc.
2006 Stock and Incentive Plan (“KBR Stock and Incentive Plan”), which is described in more detail in the “KBR
Stock and Incentive Plan” section of this proxy statement.
Incentive Award Opportunities
In December 2023, our Compensation Committee
met to determine the 2024 target awards for our NEOs under the Performance Pay Plan. These target STI awards, which are expressed
as percentages of base salary, were generally set to be consistent with the median target awards for executives in similar positions
within our Peer Group. The STI award threshold (25%), target (100%), and maximum (200%) payout opportunities for 2024 are shown
below.
|
Threshold –25%
(% of Base Salary) |
|
Target – 100%
(% of Base Salary) |
|
Maximum – 200%
(% of Base Salary) |
|
Increase to Target
Award from 2023 |
|
Basis for
Decision |
| Mr. Bradie |
37.5% |
|
150% |
|
300% |
|
10% |
|
Market data alignment,
strong performance,
and internal pay equity |
| Messrs. Sopp, Bright, and Ibrahim |
23.75% |
|
95% |
|
190% |
|
0% |
|
| Ms. Galindo |
23.75% |
|
95% |
|
190% |
|
5% |
|
2024 STI Performance Metrics
The performance metrics we used for 2024 STI
awards focus our NEOs on the key measures of success in connection with the execution of our strategic plan. No changes were made
to the design of the STI Plan for 2024 because the STI Plan in effect in 2023 was still considered to be aligned with the interests
of KBR and our stockholders. However, our Compensation Committee updated the specific goals for each performance metric to ensure
they remained challenging and competitive.
The table below summarizes the 2024 performance
metrics and weightings for our CEO and other NEOs. We believe these are the most important metrics for measuring our NEOs’
efforts to drive KBR’s growth and create value for our stockholders.
| Performance Metric |
|
Weighting |
|
Rationale |
KBR Adjusted Earnings Per Share (“EPS”)
Diluted EPS measures net income divided by the weighted average number of fully diluted shares of KBR common stock outstanding. Adjusted EPS excludes certain amounts included in diluted EPS. |
|
 |
|
This metric helps to align our NEOs with the interests of our stockholders because strong adjusted EPS generally increases the value of our stock. We consider buybacks when reviewing adjusted EPS achievement to provide for an accurate comparison against the pre-established target. |
KBR Adjusted Consolidated Operating Cash Flow (“OCF”)
KBR adjusted OCF measures the amount of cash generated by KBR’s operations. |
|
 |
|
Our adjusted OCF target is based on KBR’s 2024 budgeted cash flows from operations and is aligned with our capital deployment strategy. This metric aims to ensure that our NEOs focus on cash management. |
Key Performance Indicators (“KPIs”)
KPIs are individual performance metrics typically specific to each NEO. The KPIs are described on pages 68 through 70. |
|
 |
|
KPIs allow us to reward individual contributions to KBR’s key strategic focus areas. |
KBR Zero Harm / Sustainability Performance Across KBR’s Sustainability Pillars
Measures continued progress in KBR’s Zero Harm / Sustainability performance across KBR’s sustainability pillars. |
|
 |
|
Emphasizing this metric promotes continued progress in KBR’s Zero Harm and Sustainability performance across KBR’s sustainability pillars, including KBR Health, Safety & Security and Clean Planet, which in turn promotes a sustainable business. |
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Target Performance Goals
When establishing target performance goals
for the STI awards for 2024, our Compensation Committee considered, among other things, projected company performance and general
business and industry conditions, as well as our strategic business objectives. At the time the target goals are established, the
outcomes are intended to be substantially uncertain but achievable with better-than-expected performance from our NEOs. Our Compensation
Committee adopted target performance goals for our STI metrics that maintained the same rigor as the performance goals from the
prior year, especially in light of our strategic goal to position KBR for long-term growth.
Our Compensation Committee established the
2024 threshold, target, and maximum performance goals shown in the table below. The threshold, target, and maximum award payout
levels remained at 25%, 100%, and 200%, respectively. Each performance metric can earn a result from 0% to 200% of target. Achievement
less than the threshold payout level earns a 0% metric result. For achievement between threshold and target or target and maximum,
the metric result is determined by linear interpolation. The actual metric result is multiplied by the metric weighting to determine
the metric payout. The results and payouts were certified by our Compensation Committee in February 2025.
2024 SHORT-TERM INCENTIVES
TABLE
| (1) |
The 2024 EPS metric result of $3.34 relates to the achieved adjusted EPS for the year. A reconciliation of adjusted EPS to diluted EPS is provided at the end of this proxy statement. |
| (2) |
The 2024 OCF metric result of $462MM relates to the achieved adjusted consolidated OCF for the year. A reconciliation of adjusted OCF to OCF is provided at the end of this proxy statement. |
| (3) |
The financial metrics payout percentage is not the actual payout percentage because it does not include the percentages earned with respect to the Zero Harm / Sustainability performance metric and KPIs. The actual payouts for our CEO and other NEOs are disclosed on pages 68 through 70. |
| (4) |
The Zero Harm / Sustainability performance metric was related to continued progress across KBR’s sustainability pillars, including KBR Health, Safety & Security (e.g., visible leadership and reduction in total recordable incident rate) and Clean Planet (e.g., reduction in Scopes 1 & 2 emissions and increased sustainability-focused revenue). The Threshold, Target and Maximum performance goals of ME, SE, and EE, respectively, are a discretionary rating system. ME = Meets Expectations; SE= Surpasses Expectations; EE= Exceeds Expectations. |
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Compensation Discussion and Analysis |
KPIs and STI Payout for
Mr. Bradie
Target Payout
$1,912,500
(Base Salary x 150%) |
|
Actual Payout
$2,574,225
(Target Payout x 134.6%) |
 |
Financial Metrics
Payout
$2,048,288
107.1% |
 |
Zero Harm /
Sustainability Payout
$191,250
10% |
|
KPI
Payout
$334,687
17.5% |
Our Board of Directors determined that Mr.
Bradie earned an 87.5% metric result—in between threshold and target level achievement—with respect to his 2024 KPIs,
which resulted in a 17.5% payout for the KPI portion of his STI payout. Key factors for this determination include:
| |
● |
Mr. Bradie delivered strong progress on digital strategy, implementing use cases in Government Solutions (renamed Mission Technology Solutions as part of a segment realignment for fiscal 2025) and Sustainable Technology Solutions aligned with overall strategic direction of the Company. |
| |
● |
He drove the strategic realignment of KBR into two segments aligned with the Company’s capabilities and business model, in parallel with the successful acquisition and integration of LinQuest. |
| |
● |
Mr. Bradie’s KPI score took into account progress on the ramp-up for the HomeSafe Alliance project. |
Our Board of Directors determined that Mr.
Bradie earned a 100% metric result—target level achievement—with respect to his 2024 Zero Harm / Sustainability performance,
which resulted in a 10% payout for the Zero Harm / Sustainability portion of his STI payout. The determination was based on Mr.
Bradie’s accomplishments with respect to 2024 Zero Harm goals and across KBR’s sustainability pillars.
KPIs and STI Payout for
Mr. Sopp
Target Payout
$704,238
(Base Salary x 95%) |
|
Actual Payout
$930,299
(Target Payout x 132.1%) |
|
Financial Metrics
Payout
$754,239
107.1% |
|
Zero Harm /
Sustainability Payout
$70,424
10% |
|
KPI
Payout
$105,636
15% |
Our Compensation Committee determined that
Mr. Sopp earned a 75% metric result—in between threshold and target level achievement—with respect to his 2024 KPIs,
which resulted in a 15% payout for the KPI portion of his STI payout. Key factors for this determination include:
| |
● |
Mr. Sopp supported several transformational transactions including the LinQuest acquisition. |
| |
● |
He drove two major investor outreach events: the Sustainable Technology Solutions Primer Day and KBR’s 2024 Investor Day. |
| |
● |
He progressed digital modernization initiatives for KBR, including with Microsoft Dynamics, Enterprise Performance Management and global corporate support centers. |
| |
● |
Mr. Sopp’s KPI score took into account certain system implementation and process improvements. |
Our Compensation Committee determined that
Mr. Sopp earned a 100% metric result—target level achievement—with respect to his 2024 Zero Harm / Sustainability performance,
which resulted in a 10% payout for the Zero Harm / Sustainability portion of his STI payout. The determination was based on Mr.
Sopp’s accomplishments with respect to 2024 Zero Harm goals and across KBR’s sustainability pillars.
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KPIs and STI Payout for
Mr. Bright
Target Payout
$676,406
(Base Salary x 95%) |
|
Actual Payout
$893,532
(Target Payout x 132.1%) |
|
Financial Metrics
Payout
$724,430
107.1% |
|
Zero Harm /
Sustainability Payout
$67,641
10% |
|
KPI
Payout
$101,461
15% |
Our Compensation Committee determined that
Mr. Bright earned a 75% metric result—in between threshold and target level achievement—with respect to his 2024 KPIs,
which resulted in a 15% payout for the KPI portion of his STI payout. Key factors for this determination include:
| |
● |
Mr. Bright enhanced organic growth across the Government Solutions U.S. business, exceeding book-to-bill targets and increasing the pipeline substantially. He also drove the successful LinQuest acquisition and integration. |
| |
● |
He progressed a digital strategy across Government Solutions U.S. (e.g., Model-Based Systems Engineering) and led Large Language Model strategy development across KBR. |
| |
● |
Mr. Bright’s KPI score took into account progress on the strategic drive for margin enhancement and the ramp-up for the HomeSafe Alliance project. |
Our Compensation Committee determined that
Mr. Bright earned a 100% metric result—target level achievement—with respect to his 2024 Zero Harm / Sustainability
performance, which resulted in a 10% payout for the Zero Harm / Sustainability portion of his STI payout. The determination was
based on Mr. Bright’s accomplishments with respect to 2024 Zero Harm goals and across KBR’s sustainability pillars.
KPIs and STI Payout for
Mr. Ibrahim
Target Payout
$644,196
(Base Salary x 95%) |
|
Actual Payout
$936,661
(Target Payout x
145.4%) |
|
Financial Metrics
Payout
$689,934
107.1% |
|
Zero Harm /
Sustainability Payout
$85,678
13.3% |
|
KPI
Payout
$161,049
25% |
Our Compensation Committee
determined that Mr. Ibrahim earned a 125% metric result—in between target and maximum level
achievement—with respect to his 2024 KPIs, which
resulted in a 25% payout for the KPI portion of his STI payout. Key factors for this determination include:
| |
● |
Mr. Ibrahim delivered significant growth and relationship development in Middle East through executive sponsorship and visible leadership. |
| |
● |
He advanced the strategic relationship with Venture Global LNG to proactively address risks and achieve key project deliverables. |
| |
● |
Mr. Ibrahim also successfully transitioned to new leadership team to bolster the One KBR model in Sustainable Technology Solutions and streamlined the organization. |
Our Compensation Committee determined that
Mr. Ibrahim earned a 133% metric result—in between target and maximum level achievement—with respect to his 2024 Zero
Harm / Sustainability performance, which resulted in a 13.3% payout for the Zero Harm / Sustainability portion of his STI payout.
The determination was based on Mr. Ibrahim’s accomplishments with respect to 2024 Zero Harm goals and across KBR’s
sustainability pillars, which exceeded goals through personal engagement and inspiring leadership across the globe.
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KPIs and STI Payout for
Ms. Galindo
Target Payout
$616,455
(Base Salary x 95%) |
|
Actual Payout
$834,680
(Target Payout x 135.4%) |
|
Financial Metrics
Payout
$660,223
107.1% |
|
Zero Harm /
Sustainability Payout
$51,166
8.3% |
|
KPI
Payout
$123,291
20% |
Our Compensation Committee determined that
Ms. Galindo earned a 100% metric result—target level achievement—with respect to her 2024 KPIs, which resulted in a
20% payout for the KPI portion of her STI payout. Key factors for this determination include:
| |
● |
Ms. Galindo successfully drove KBR’s legal team talent development strategy. |
| |
● |
She supported risk mitigation strategies for certain key projects. |
| |
● |
She advanced development of a digital strategy to enhance legal service provision. |
| |
● |
Ms. Galindo optimized legal resources to support KBR’s growth strategy and managed litigation matters prudently. |
Our Compensation Committee determined that
Ms. Galindo earned an 83% metric result—in between threshold and target level achievement—with respect to her 2024
Zero Harm / Sustainability performance, which resulted in a 8.3% payout for the Zero Harm / Sustainability portion of her STI payout.
The determination was based on Ms. Galindo’s accomplishments with respect to 2024 Zero Harm goals and across KBR’s
sustainability pillars.
|
No Changes Made to KBR’s
2025 STI Plan
No changes were made to the design of the
STI Plan for 2025 because the STI Plan in effect in 2024 is still considered to be aligned with the interests of KBR and our stockholders. |
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Table of Contents
| Executive
Compensation |
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| Compensation Discussion and Analysis |
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Long-Term Performance Incentives
Under the KBR Stock and Incentive Plan, our
Compensation Committee made grants to our NEOs in 2024 in the form of KBR Long-Term Performance Cash and Stock Awards and KBR Restricted
Stock Units. This section discusses the KBR Stock and Incentive Plan, the methodology used by our Compensation Committee to determine
the mix of awards to grant, and the actual 2024 grants to the NEOs.
KBR STOCK AND INCENTIVE
PLAN
We use long-term performance incentives to
achieve three objectives:
| |
● |
reward consistent value creation and achievement of operating performance goals; |
| |
● |
align management’s interests with stockholders’ interests; and |
| |
● |
encourage long-term perspectives and commitment. |
Long-term incentives represent the largest
component of the total executive compensation opportunity for our executives.
The KBR Stock and Incentive Plan provides for
a variety of cash and stock-based awards, including nonqualified and incentive stock options, restricted stock/units, performance
shares/units, stock appreciation rights, and stock value equivalents (also known as phantom stock). The KBR Stock and Incentive
Plan allows our Compensation Committee the discretion to select from among these types of awards to establish individual long-term
incentive awards.
Our Compensation Committee met in December
2023 to review the number of shares available under the KBR Stock and Incentive Plan for future stock-based awards and to review
the CEO’s recommendations for the value of the long-term incentive awards to Senior Executive Management. The Compensation
Committee met again in February 2024 to review and approve the amount and mix of long-term incentive awards to be granted to our
NEOs.
TARGET AWARD LEVELS
For purposes of establishing the target dollar
value of the long-term incentive awards, our Compensation Committee requested that Meridian review our NEOs’ long-term incentive
compensation as part of its engagement to advise the Compensation Committee on all executive compensation matters. Based on this
review and related information about our Peer Group, in February 2024, our Compensation Committee approved the grant of the following
long-term incentive target dollar values to our NEOs:
|
|
2024 Long-Term
Incentive
Target Dollar Value of
Award |
Increase
(% of Target 2023 Long-Term
Incentive Award) |
Basis for Decision |
| Mr. Bradie |
$ |
7,650,000 |
$ |
400,000 (5.5%) |
Market data alignment,
strong performance,
and internal pay equity |
| Mr. Sopp |
$ |
1,800,000 |
$ |
200,000 (12.5%) |
| Mr. Bright |
$ |
1,300,000 |
$ |
50,000 (4%) |
| Mr. Ibrahim |
$ |
1,200,000 |
$ |
200,000 (20%) |
| Ms. Galindo |
$ |
1,100,000 |
$ |
100,000 (10%) |
These awards consist of a mix of 66⅔% KBR
Long-Term Performance Cash and Stock Awards (based on target value) and 33⅓% time-based KBR Restricted Stock Units. Our Compensation
Committee concluded that this allocation was consistent with KBR’s pay-for-performance objectives. In particular, KBR awarded
a higher percentage of performance-based awards (66⅔%) than the companies in our Peer Group because our Compensation Committee
believes that emphasizing the two performance metrics for these awards—book-to-bill (“B2B”) and relative TSR—is
more likely than other forms of incentive compensation to promote a sustained increase in stockholder value.
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Compensation |
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Compensation Discussion and Analysis |
KBR LONG-TERM PERFORMANCE
CASH AND STOCK AWARDS
The KBR Long-Term Performance Cash and Stock Awards are designed
to provide selected executives with incentive opportunities that are contingent on the level of achievement of pre-established corporate
performance objectives. For the awards granted to our NEOs in February 2024, our Compensation Committee selected relative TSR and B2B,
each weighted 50%, as described below.
For the 2024 grants, TSR and B2B will be measured
over a three-year performance period beginning January 1, 2024, and ending December 31, 2026. Our Compensation Committee
believes that a three-year performance award cycle encourages retention and aligns with long-term stockholder
returns.
When establishing target levels for the TSR and B2B performance
metrics, our Compensation Committee considered, among other things, projected company performance and general business and industry conditions,
as well as KBR’s strategic business objectives. At the time the target levels were established, the outcomes were intended to be
substantially uncertain, but achievable.
The KBR Long-Term Performance Cash and Stock Awards for each
NEO were allocated one-half to the B2B portion and one-half to the TSR portion. Prior to 2020, these long-term awards were settled entirely
in cash. However, consistent with the change made in 2020 in response to stockholders’ preference for a compensation program more
heavily weighted in stock, our 2024 awards for the NEOs will be settled in a mix of cash and stock, as described below.
| |
● |
The B2B portion of the award is based
on a $1.00 target value for each unit and will be paid out in cash. The actual value of each unit may increase to a maximum of 200%
of $1.00, or $2.00, or decrease to as low as $0.00, depending on KBR’s performance in relation to the B2B performance goal. |
| |
● |
For the TSR portion of the award, the Compensation Committee
granted a target number of units that each represent the right to receive one share of KBR common stock if the performance metric
is achieved. The number of such units initially is determined by dividing the target value of the TSR portion of the award by the
closing price of a share of KBR common stock on the grant date (rounded up to the next whole unit). The number of units ultimately
earned may increase to a maximum of 200% of the original number of units granted, or decrease to 0, in each case depending
on KBR’s performance in relation to the TSR performance objective. |
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| Compensation
Discussion and Analysis |
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TSR METRIC
TSR is measured based on a sustained approach rather than
a cumulative (point-to-point) approach. Our Compensation Committee believes that measuring TSR just from the beginning of the performance
period to the end would not adequately capture stockholder value. In contrast, our sustained measurement approach considers how investors
fare at different times during the three-year performance period.
We measure sustained performance as follows:
| |
● |
calculate the TSR of each company
in the TSR Peer Group (measured using a 20-trading-day average price) every quarter during the three-year performance period |
| |
● |
use each company’s 12 quarterly TSRs to calculate
the company’s average TSR for the performance period |
| |
● |
rank KBR’s average TSR (calculated in the same
manner) against those results |
The TSR percentile is calculated by subtracting KBR’s
TSR ranking as compared to the TSR Peer Group from the total number of companies in the TSR Peer Group (including KBR), dividing the
difference by the number of companies (excluding KBR), and multiplying the quotient by 100%. If any companies are removed from the TSR
Peer Group (e.g., due to acquisition by another company or significant divestiture), then the TSR percentiles and payout percentages
will adjust for the change in the number of companies; provided, however, that the adjustment must require at least a 90.0 percentile
to receive the maximum TSR payout, at least a 50.0 percentile to receive the target TSR payout, and at least a 20.0 percentile to receive
the threshold TSR payout. The 2024 TSR Peer Group of 20 companies (including KBR) and corresponding TSR percentiles and payout percentages
are shown in the table on the next page. The payout associated with KBR’s TSR ranking following any applicable adjustments to the
TSR percentiles and payout percentages will be applied to each NEO’s TSR-based award.
For our CEO and any of his direct reports who are also KBR
officers required to file reports with the SEC under Section 16 of the Exchange Act, if KBR’s average TSR at the end of the
three-year performance period is negative, the payment of vested performance units will not exceed the target (100%) payout under the
TSR Peer Group Percentile and TSR Payout Percentage Table. This provision does not apply upon a double trigger event occurring during
the three-year performance period.
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Compensation |
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Compensation Discussion and Analysis |
TSR Peer Group Percentile and TSR
Payout Percentage Table for 2024 Awards
| Performance
Level |
2024-2026
3-YR TSR Ranking |
|
TSR
Percentile |
|
TSR
Payout |
| |
1 |
|
100.0% |
|
200.0% |
| Maximum |
2 |
|
94.7% |
|
200.0% |
| |
3 |
|
89.5% |
|
198.8% |
| |
4 |
|
84.2% |
|
185.5% |
| |
5 |
|
78.9% |
|
172.3% |
| |
6 |
|
73.7% |
|
159.3% |
| |
7 |
|
68.4% |
|
146.0% |
| |
8 |
|
63.2% |
|
133.0% |
| |
9 |
|
57.9% |
|
119.8% |
| Target |
10 |
|
52.6% |
|
106.5% |
| |
11 |
|
47.4% |
|
93.5% |
| |
12 |
|
42.1% |
|
80.3% |
| |
13 |
|
36.8% |
|
67.0% |
| |
14 |
|
31.6% |
|
54.0% |
| |
15 |
|
26.3% |
|
40.8% |
| Threshold |
16 |
|
21.1% |
|
27.8% |
| |
17 |
|
15.8% |
|
0.0% |
| |
18 |
|
10.5% |
|
0.0% |
| |
19 |
|
5.3% |
|
0.0% |
| |
20 |
|
0.0% |
|
0.0% |
B2B METRIC
The remaining 50% of the KBR Long-Term Performance Cash and
Stock Awards will be determined based on B2B over the same three-year performance period. B2B is appropriately measured over three years
because our contracts are long-term in nature and often involve amendments and scope adjustments that might distort a shorter performance
period. We believe using three-year B2B as a performance metric incentivizes the NEOs to win the right work, which is one of our key
strategic priorities and a means to create long-term growth and position KBR for a strong and stable future amidst economic volatility.
Our Compensation Committee establishes the B2B target one
year at a time—rather than setting a target for the entire three-year performance period—because it is difficult to forecast
B2B beyond one year in the ever-changing market conditions. The final award for the B2B metric will be determined by the average of the
B2B payout percentages achieved during each year of the performance period.
The 2024 performance goals and associated payouts for B2B
are shown below.
| |
|
Threshold |
|
Target |
|
Maximum |
| Performance Goal |
|
0.90 |
|
1.05 |
|
≥ 1.20 |
| Payout %* |
|
25% |
|
100% |
|
200% |
| * |
For a result between threshold
and target and target and maximum, the payout is determined by linear interpolation. |
Our Compensation Committee will set the B2B targets for the
second and third years in the performance period at levels that remain rigorous.
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| Compensation Discussion and Analysis |
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Possible Negative Discretion
Regardless of KBR’s TSR and B2B
performance, 20% of the 2024 KBR Long-Term Performance Cash and Stock Award target opportunity was subject to forfeiture if
our Compensation Committee determined, in its sole discretion, that 2024 was not a successful year for us. The possible 20%
reduction is determined by our Compensation Committee on or before March 31, 2025, and the amount forfeited cannot be earned
back during the three-year performance period, which runs from January 1, 2024, to December 31, 2026. There is no upside
opportunity to this discretion; our Compensation Committee is not authorized to increase payouts, even if 2024 is a
particularly strong year. In February 2025, our Compensation Committee determined that 2024 was a successful year for KBR
and, accordingly, it did not exercise its discretion to cause a forfeiture of 20% of the KBR Long-Term Performance Cash and
Stock Award target opportunity.
Similarly, the KBR Long-Term Performance Cash and Stock Awards
that were granted to our NEOs in 2024 provide our Compensation Committee with the discretion to reduce for poor performance, but not
increase, by any amount (including a reduction resulting in no payout) the payments that would otherwise be made with respect to such
awards. This negative discretion may be exercised by our Compensation Committee at any time before payment is made with respect to these
awards, but it may not be exercised following the occurrence of a corporate change (as defined in the KBR Stock and Incentive Plan).
Our Compensation Committee did not exercise negative discretion to reduce the payments made under the KBR Long-Term Performance Cash
and Stock Awards that were granted to our NEOs in 2024.
RESULTS AND PAYOUTS FOR AWARDS
FOR THE 2022-2024 PERFORMANCE PERIOD
In February 2025, our Compensation Committee certified the
results for the KBR Long-Term Performance Cash and Stock Awards that were granted on February 24, 2022, based on the achievement
of TSR and B2B performance goals.
Our average three-year TSR from January 1, 2022,
until December 31, 2024, was 12.5% and ranked fourth among our TSR Peer Group that period, resulting in a 117.8% payout for
the 2022 awards. The original 2022 TSR Peer Group of nine companies (including KBR) was reduced to eight companies due to the
removal of ManTech International Corporation because it was acquired by The Carlyle Group Inc. in September 2022. As a
result, the TSR percentiles and payout percentages were adjusted for the change in the number of companies.
| TSR Peer Group |
|
2022-2024
3-YR TSR Rank |
|
Average
3-YR TSR |
| Parsons Corporation |
|
1 |
|
25.0% |
| CACI International Inc |
|
2 |
|
14.5% |
| Leidos Holdings, Inc. |
|
3 |
|
13.6% |
| KBR, Inc. |
|
4 |
|
12.5% |
| Booz Allen Hamilton Holding Corporation |
|
5 |
|
11.6% |
| Fluor Corporation |
|
6 |
|
11.5% |
| Science Applications International Corporation |
|
7 |
|
6.0% |
| Jacobs Solutions Inc. |
|
8 |
|
3.4% |
Our B2B performance for each of the three years in the performance
period is shown in the table below. The average B2B payout ratio for the three-year performance period was 158.3%.
| Year |
|
Threshold
–25% |
|
Target
– 100% |
|
Maximum
– 200% |
|
B2B* |
|
B2B
Payout Ratio |
| 2022 |
|
1.00 |
|
1.05 |
|
1.10 |
|
1.20 |
|
200% |
| 2023 |
|
0.90 |
|
1.00 |
|
1.10 |
|
1.10 |
|
200% |
| 2024 |
|
0.90 |
|
1.05 |
|
1.20 |
|
1.00 |
|
75% |
| Average B2B Payout
Ratio |
|
|
|
|
|
|
|
|
|
158.3% |
| * |
With respect to the KBR Long-Term
Performance Cash and Stock Awards, the calculation of book-to-bill excludes KBR’s long-term private finance
initiative (PFI) projects in the UK. |
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Compensation Discussion and Analysis |
Payout Table for 2022-2024
KBR Long-Term Performance Cash and Stock Award Period
2022 Long-Term
Performance
Cash and Stock Award | | Average Total Stockholder Return
2022-2024 | | Book-to-Bill
2022-2024 |
Named
Executive
Officer | |
Target
Performance
Cash and
Stock
Award
($) | | |
Target
TSR-
Related
Shares of
Stock*
(#) | | |
Target
B2B-
Related
Cash
Units
($) | | |
Avg
TSR
Payout
(%) | | |
Actual
Avg TSR
Payout in
Shares of
Stock
(#) | | |
Avg
B2B
Payout
Ratio
Payout
(%) | | |
Actual
Avg
B2B
Payout
Ratio
Payout in
Cash
($) |
| Mr. Bradie | |
| 4,666,667 | | |
| 48,551 | | |
| 2,333,334 | | |
| 117.8 | | |
| 57,193 | | |
| 158.3 | | |
| 3,693,668 |
| Mr. Sopp | |
| 1,000,000 | | |
| 10,404 | | |
| 500,000 | | |
| 117.8 | | |
| 12,256 | | |
| 158.3 | | |
| 791,500 |
| Mr. Bright | |
| 833,333 | | |
| 8,670 | | |
| 416,667 | | |
| 117.8 | | |
| 10,213 | | |
| 158.3 | | |
| 659,584 |
| Mr. Ibrahim | |
| 666,667 | | |
| 6,936 | | |
| 333,334 | | |
| 117.8 | | |
| 8,171 | | |
| 158.3 | | |
| 527,668 |
| Ms. Galindo | |
| 666,667 | | |
| 6,936 | | |
| 333,334 | | |
| 117.8 | | |
| 8,171 | | |
| 158.3 | | |
| 527,668 |
| * |
The
Target TSR-Related Shares of Stock is determined by dividing the target value of the TSR portion (50%) of the
Target Performance Cash and Stock Award by the closing price of a share of KBR common stock on the grant date (rounded up
to the next whole unit). The date of grant was February 24, 2022, and the closing price of a share of KBR
common stock on that date was $48.06. |
KBR RESTRICTED STOCK UNITS
The KBR Restricted Stock Units granted to our NEOs in 2024 will
vest in three equal annual installments, beginning on the first anniversary of the grant date, subject to continued service
with KBR. For KBR Restricted Stock Units subject to the U.S. forms of grant agreements, dividend equivalents will be paid on
restricted stock units at the same time dividends, if any, are paid to common stockholders. For KBR Restricted Stock Units
subject to the international forms of grant agreements, dividend equivalents will accrue on restricted stock units at the
same time dividends, if any, are paid to common stockholders but will not be paid until such shares of KBR common stock
underlying the restricted stock units have been settled. Our Compensation Committee determined the number of restricted stock
units for each NEO by dividing the portion of the total target long-term incentive award allocated to KBR restricted stock
units (33 ⅓%) by $59.28, the closing price of our common stock on the date of grant (rounded up to the next whole
share). Our Compensation Committee selected a three-year vesting schedule to facilitate retention and to provide incentives
to enhance long-term value.
As with the KBR Long-Term Performance Cash and Stock Awards,
20% of the restricted stock unit grants was subject to forfeiture based on the discretion of our Compensation Committee if it determined
on or before the first anniversary of the date of grant that 2024 was not a successful year for us. Any amount of restricted stock units
forfeited could not be earned back during the second and third years of the three-year vesting period. In February 2025, our Compensation
Committee determined that 2024 was a successful year for KBR and, accordingly, it did not exercise its discretion to cause a forfeiture
of 20% of the KBR Restricted Stock Units.
No Changes Made to KBR’s
2025 Long-Term Incentive Awards
No changes were made to the design of the LTI Plan for 2025
because the LTI Plan in effect in 2024 is still considered to be aligned with the interests of KBR and our stockholders. The TSR Peer
Group for the 2025 LTI Plan includes the same companies used to benchmark the 2025 executive compensation for our NEOs.
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| Compensation Discussion and Analysis |
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Other Compensation Elements
NONQUALIFIED DEFERRED COMPENSATION
We maintain two active nonqualified deferred compensation
plans in which our NEOs may participate: the KBR Elective Deferral Plan and the KBR Benefit Restoration Plan. Both plans are available
to all KBR employees who meet the limits imposed by the Internal Revenue Code or the Employee Retirement Income Security Act, as applicable.
KBR maintains these plans because similar plans are offered by many of the companies in our Peer Group. Our NEOs do not participate in
any KBR-sponsored defined benefit pension plans.
The KBR Elective Deferral Plan helps
certain employees meet their retirement and other future income needs. No company contributions are made to fund deferrals
under this plan. Benefits under this plan are payable upon a termination of employment or at a future date specified by the
employee.
The KBR Benefit Restoration Plan provides a vehicle
to restore qualified plan benefits that are reduced because of limitations imposed under the Internal Revenue Code or because an employee
participates in other company-sponsored plans. Benefits under this plan are payable upon a termination of employment.
SEVERANCE AND CHANGE-IN-CONTROL
PROTECTION
Our Compensation Committee offers certain members of Senior
Executive Management a severance and change-in-control agreement (an “Agreement”), each of which is substantially the same
for each NEO. We believe that providing termination benefits under a severance and change-in-control agreement allows KBR to be competitive
with the practices of the companies in the Peer Group, as well as the general market. In addition, the specific terms for receiving termination
benefits under the Agreements serve to motivate and retain key employees. The Agreements offered to our NEOs are further described
in the sections titled “2024 Potential Payments Upon Termination or Change In Control” and “Severance and Change-in-Control
Agreements.”
The Agreement requires a double-trigger change-in-control termination (i.e., the occurrence of both a change in control
and a termination of employment within two years thereafter) in order for an executive to receive change-in-control benefits. None of
the Agreements contain an excise tax gross-up, and our Compensation Committee has committed not to provide for such gross-ups in the
future.
Our Compensation Committee offered the Agreement
to Mr. Bradie in June 2014, Mr. Ibrahim in May 2015, Mr. Sopp in February 2017, Mr. Bright in January
2021, and Ms. Galindo in November 2021 because each of our other members of Senior Executive Management at those times had an
Agreement or to incentivize them to leave their former employer and join KBR. The Agreements terminate automatically on the
earlier of (i) the executive’s termination of employment with KBR or (ii) two years after a change in control
that occurs during the term of the Agreement.
The Agreement provides for:
| |
● |
Severance termination benefits (prior
to a change in control), which for Mr. Sopp, were graded based on service time with KBR; |
| |
● |
Double-trigger change-in-control termination benefits
(after a change in control); and |
| |
● |
Death, disability, and retirement benefits. |
As a condition of receiving these benefits (other than the
death and disability benefits), the applicable executive must first execute a release and full settlement agreement.
The Agreement contains customary confidentiality, non-competition,
and non-solicitation covenants, as well as a mandatory arbitration provision. In addition, the Agreement contains a clawback provision
that allows KBR to recover any benefits paid under the Agreement if our Compensation Committee determines within two years after the
executive’s termination of employment that the executive’s employment could have been terminated for “Cause,”
as defined in the Agreement. The Agreement provides that in any involuntary or voluntary termination, executives forfeit all unvested
stock options, stock appreciation rights, restricted stock, restricted stock units, and performance cash awards granted to such executive.
Such awards will fully vest upon a double-trigger change-in-control termination.
OTHER BENEFITS
Generally, our NEOs participate in the same retirement and
health and welfare programs as our other employees. In 2024, all our NEOs participated in a 401(k) plan, under which KBR made employer
matching contributions up to 5.5% of eligible compensation. Our NEOs’ health care and insurance coverage are the same as those
provided to other active employees, except that the NEOs are eligible to receive an executive physical under our Zero Harm initiative
and our CEO receives a global welfare plan to ensure he has easy access to medical care worldwide due to his extensive business travel.
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NEOs are eligible to receive limited financial
planning advice. Otherwise, we typically do not offer perquisites to our NEOs that are not generally available to other
employees. With a few exceptions, our executives do not have company cars or allowances for cars, housing, or travel, unless
we ask them to relocate. In connection with a prior international assignment that ended in 2019, Mr. Ibrahim received the
standard allowances for a car, housing, school, and relocation costs, and he was included in our standard tax equalization
program. He is no longer entitled to these benefits and has not received any since the end of his international
assignment.
To allow for maximum efficiency and productive use of time,
we have one leased car and a driver in Houston for use by our NEOs and others for business purposes. Our NEOs may use this car and the
driver for limited personal use only if the car is not being used for business purposes at that time.
Stock-Related Policies
STOCK OWNERSHIP GUIDELINES FOR
OFFICERS
We established stock ownership guidelines for certain of
our officers and officers of our subsidiaries to link these officers’ financial interests more closely with those of our stockholders.
Our Board of Directors adopted ownership guidelines for our executives at the levels indicated below.
| Group |
Ownership
Level |
| CEO |
5x base salary |
| Level 1 Executives (Direct reports to CEO, including
all the NEOs) |
3x base salary |
| Level 2 Executives (Direct reports to Level 1
Executives and at least a vice president) |
1x base salary |
Each executive subject to the ownership guidelines has five
years after the adoption of the guidelines or his or her appointment to a covered position, whichever is later, to achieve the indicated
ownership level. All beneficially owned shares of KBR common stock, as well as vested and unvested restricted stock and restricted stock
units, are counted towards achievement of the ownership guidelines. For purposes of determining compliance, the value of an executive’s
shares of common stock is determined based on the closing price of the common stock on the selected date. An executive who has achieved
the applicable ownership level is not required to retain or purchase additional shares if a decline in the price of the common stock
causes his or her holdings to fall below the requisite ownership level. For any executive other than the CEO, the Chief Operating Officer
(if any), the CFO, and the General Counsel, the required ownership level is reduced by fifty percent on and after the executive’s
60th birthday.
All our NEOs who have served in their covered positions at
least five years are in compliance with our Stock Ownership Guidelines.
 |
| |
|
| * |
Mr. Ibrahim’s required ownership
value is based on fifty percent of his 2025 base salary because he meets the age reduction rule under the stock ownership guidelines. |
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| Compensation Discussion and Analysis |
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NO PLEDGING OR HEDGING
No KBR officer may pledge, hypothecate, create
any lien or security interest on, or enter into a margin contract secured by, any shares, options to purchase shares, or any
other interest in shares of KBR common stock. In addition, our anti-hedging policy prohibits all members of our Board of
Directors, employees, and agents from (i) speculative trading in our securities; (ii) engaging in hedging
transactions using our securities; (iii) “short selling” our securities; and (iv) trading derivative
securities, such as put options, call options, swaps, or collars related to our securities.
EQUITY AWARD GRANT PRACTICES
Equity awards are discretionary and are generally granted
to our NEOs two business days after KBR files a Form 10-K with the SEC in the first quarter of the grant year. In certain circumstances,
including the hiring or promotion of an officer, our Compensation Committee may approve grants to be effective at other times. KBR did
not grant stock options to its employees during the last completed fiscal year; however, stock option grants, when approved by our Compensation
Committee, are never issued with an exercise price below the fair market value of our common stock on the date of grant. KBR does not
time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.
Impact of Accounting, Regulatory,
and Tax Requirements on Compensation
We apply the fair value recognition provisions of Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718-10 to account for and report
equity-based compensation. FASB ASC 718-10 requires that compensation expense for equity-classified awards be measured based on
the grant date fair value of the award and recognized on a straight-line basis over the requisite service period or the vesting period.
Compensation expense for performance-based awards settled in cash is measured based on the grant date fair value, which is re-measured
at each reporting date through the settlement date. Changes in fair value during the requisite service period or the vesting period are
recognized as compensation cost on a straight-line basis over that period. Compensation expense was recognized for restricted stock units,
performance stock units, and cash and stock performance awards.
In the years when we grant stock option awards, the grant
date fair value is estimated using option-pricing models. If an award is modified after the grant date, incremental compensation cost
is recognized immediately before the modification. The benefits of tax deductions in excess of the compensation cost recognized for the
options (excess tax benefits) are classified as addition to paid-in-capital, and cash retained as a result of these excess tax benefits
is presented in the statement of cash flows as financing cash inflows.
We will continue to monitor issues concerning the tax deductibility
of executive compensation and will take appropriate action if we believe it is warranted. Since corporate objectives and strategic needs
may not always be consistent with the requirements of full deductibility, we expect, if we believe it is appropriate, to enter into compensation
arrangements or provide compensation under which payments will not be fully deductible.
Impact of Executive Conduct or
a Restatement of Earnings on Compensation (Clawback Policies)
We maintain a discretionary clawback policy that provides
that, if we determine at any time within two years after the termination of employment of an NEO that such executive’s employment
could have been terminated for Cause, as defined in the executive’s Agreement, we retain the right to recover any severance benefits
(both cash and equity) provided under the Agreement to such executive. In such a case, the executive agrees to promptly repay such amounts
to us.
Prior to our adoption of a clawback policy that complies
with Section 10D of the Exchange Act and the NYSE rules, we included in our cash and equity incentive programs a provision that allowed
our Compensation Committee to seek recovery of any incentives that are determined to be an overpayment following any restatement of our
financial results that impacts the performance metrics on which the incentive awards were calculated.
In October 2022, the SEC adopted rules requiring
that the stock exchanges, including the NYSE, establish new listing rules that set minimum standards for clawback policies
that must be implemented by their listed companies. Upon adoption of the rules, effective October 2, 2023, our
Board of Directors approved and adopted KBR’s Procedure for the Recovery of Erroneously Awarded Compensation (the
“Clawback Procedure”) to comply with Section 10D of the Exchange Act and the NYSE rules. The Clawback Procedure
requires the Company to claw back erroneously awarded incentive-based compensation from current and former executive officers
of the Company (“Covered Officers”) in the event that the Company is required to prepare an accounting
restatement. The recovery of such compensation under the Clawback Procedure applies regardless of whether a Covered Officer
engaged in misconduct or otherwise caused or contributed to the requirement of an accounting restatement. The Compensation
Committee oversees the administration of the Clawback Procedure. The foregoing summary of the Clawback Procedure does
not purport to be complete and is qualified in its entirety by reference to the full text of the Clawback
Procedure.
Conclusion
In a highly competitive market for executive talent, we believe
our customers’ and employees’ interests, as well as those of our stockholders and other stakeholders, are well served by
our compensation programs. These programs are reasonably positioned among our Peer Group, encourage and promote our compensation objectives
with a strong emphasis on pay for performance, and permit the exercise of our Compensation Committee’s discretion in the design
and implementation of compensation packages. Going forward, we will continue to review our compensation plans periodically to determine
what revisions, if any, should be made.
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Proxy Statement 79
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Table of Contents
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Executive
Compensation |
| |
|
| |
Compensation Committee Report |
Compensation Committee Report
Our Compensation Committee reviewed and discussed the Compensation
Discussion and Analysis, as provided above, with KBR’s management. Based on its review, our Compensation Committee recommended
to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement. This report shall not be
deemed to be “soliciting material” or to otherwise be considered “filed” with the SEC, nor shall such information
be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, except to the extent that KBR specifically incorporates it by reference into such filing.
Respectfully submitted,
The Compensation Committee of Directors
Jack B. Moore, Chair
Joseph Dominguez
Lynn A. Dugle
Lt. General Wendy M. Masiello
Ann D. Pickard
March 12, 2025
Compensation Committee Interlocks
and Insider Participation
As of the date of this proxy statement, no member of our
Compensation Committee has served as an officer or employee of KBR. Further, none of KBR’s executive officers have served on a
board of directors or compensation committee of any entity that had one or more of its executive officers serving on the Board or the
Compensation Committee of KBR.
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80 2025
Proxy Statement
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www.kbr.com |
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|
Table of Contents
| Executive
Compensation |
|
| |
|
| Executive Compensation Tables |
|
Executive Compensation Tables
Summary Compensation
The following table sets forth information regarding the
compensation of our NEOs for the fiscal year ended January 3, 2025, and, if the individual was an NEO for the applicable fiscal year,
for the fiscal years ended December 29, 2023, and December 31, 2022.
Name and
Principal Position | |
Year | | |
Salary
($)(1) | | |
Stock
Awards
($)(2)(3) | | |
Non-Equity
Incentive Plan
Compensation
($)(4) | | |
Change
in Pension Value
and Nonqualified Deferred
Compensation Earnings
($)(5) | | |
All
Other
Compensation
($)(6) | | |
Total
($) |
| (a) | |
(b) | | |
(c) | | |
(d) | | |
(e) | | |
(f) | | |
(g) | | |
(h) |
Stuart
J. B. Bradie
President
& CEO | |
| 2024 | | |
| 1,284,698 | | |
| 4,819,548 | | |
| 6,267,669 | | |
| 3,850 | | |
| 181,180 | | |
| 12,556,945 |
| |
| 2023 | | |
| 1,226,983 | | |
| 4,630,378 | | |
| 6,656,775 | | |
| 11,507 | | |
| 134,277 | | |
| 12,659,920 |
| |
| 2022 | | |
| 1,191,360 | | |
| 4,641,028 | | |
| 6,645,508 | | |
| 13,229 | | |
| 125,910 | | |
| 12,617,035 |
Mark
W. Sopp
EVP & CFO | |
| 2024 | | |
| 768,458 | | |
| 1,134,032 | | |
| 1,721,798 | | |
| 1,131 | | |
| 41,905 | | |
| 3,667,324 |
| |
| 2023 | | |
| 705,223 | | |
| 1,021,917 | | |
| 1,960,446 | | |
| 3,583 | | |
| 50,844 | | |
| 3,742,013 |
| |
| 2022 | | |
| 684,188 | | |
| 994,516 | | |
| 1,987,034 | | |
| 3,757 | | |
| 37,630 | | |
| 3,707,125 |
W.
Byron Bright, Jr.
President, Mission Technology Solutions | |
| 2024 | | |
| 738,088 | | |
| 819,004 | | |
| 1,553,116 | | |
| 927 | | |
| 54,089 | | |
| 3,165,224 |
| |
| 2023 | | |
| 677,362 | | |
| 798,358 | | |
| 1,592,527 | | |
| 2,857 | | |
| 62,067 | | |
| 3,133,171 |
| |
| 2022 | | |
| 657,156 | | |
| 828,763 | | |
| 1,496,189 | | |
| 2,859 | | |
| 51,144 | | |
| 3,036,112 |
J.
Jay Ibrahim
President, Sustainable Technology Solutions | |
| 2024 | | |
| 701,832 | | |
| 756,021 | | |
| 1,464,329 | | |
| 994 | | |
| 52,166 | | |
| 2,975,342 |
| |
| 2023 | | |
| 615,780 | | |
| 638,698 | | |
| 1,593,138 | | |
| 3,238 | | |
| 48,868 | | |
| 2,899,722 |
| |
| 2022 | | |
| 597,423 | | |
| 663,011 | | |
| 1,528,508 | | |
| 3,544 | | |
| 47,858 | | |
| 2,840,344 |
Sonia
Galindo
EVP, General Counsel & Corporate Secretary | |
| 2024 | | |
| 672,670 | | |
| 693,039 | | |
| 1,362,348 | | |
| 286 | | |
| 53,523 | | |
| 2,781,866 |
| (1) |
Salary equals
base pay paid to each NEO during the applicable year, including any elective deferrals into the Kellogg Brown & Root, Inc.
Retirement and Savings Plan or the KBR Elective Deferral Plan. The actual salary paid may fluctuate due to the timing of payroll
processing at each year end. With respect to Mr. Bradie, his 2024, 2023, and 2022 salary payments were converted from British
Pounds to U.S. Dollars using the exchange rate applicable for each month in each year. The exchange rates used were the rates reported
by Bloomberg on the last business day of the month prior to payment. The exchange rates ranged from $1.2494 to $1.3380 during the
period of December 30, 2023, through January 3, 2025; $1.1943 to $1.2858 during the period of January 1, 2023, through December 29, 2023; and $1.3533 to $1.2098 during the period of January 1, 2022, through December 31, 2022. |
| (2) |
The amounts in column (d) represent the
aggregate grant date fair value of awards granted in 2022, 2023, and 2024, pursuant to the KBR Stock and Incentive Plan.
The fair values were determined in accordance with FASB ASC 718, “Stock Compensation.” Assumptions used
in the calculation of these amounts are described in note 1 under “Significant Accounting Policies” and
note 18 under “Share-based Compensation and Incentive Plans” of our audited financial statements
included in our annual report on Form 10-K for the fiscal year ended January 3, 2025, and the comparable
disclosures in fiscal 2022 and fiscal 2023. |
| (3) |
With respect to the
performance awards granted in 2022, 2023, and 2024, which are based 50% on TSR, and to that extent are included in the
value of stock awards in column (d), the assumptions assume the probable outcome of the TSR performance condition, which
is computed in accordance with FASB ASC 718 (excluding the effect of estimated forfeitures). At maximum
performance, the value of the shares of KBR common stock underlying each performance award reported in column (d) would
be equal to the product of twice the number of shares of KBR common stock underlying each performance award and $48.06,
with respect to the performance awards granted in 2022, $55.70, with respect to the performance awards granted in 2023,
and $59.28, with respect to the performance awards granted in 2024, the closing prices of KBR’s common stock on the
dates of grant. This would give (i) Mr. Bradie a stock awards value under column (d) of $7,650,143 in 2024,
$7,250,135 in 2023, and $7,000,083 in 2022; (ii) Mr. Sopp a stock awards value under column (d) of $1,800,096
in 2024, $1,600,150 in 2023, and $1,500,049 in 2022; (iii) Mr. Bright a stock awards value under column (d) of
$1,300,010 in 2024, $1,250,075 in 2023, and $1,250,041 in 2022; (iv) Mr. Ibrahim a stock awards value under column
(d) of $1,200,064 in 2024, $1,000,094 in 2023, and $1,000,032 in 2022; and (v) Ms. Galindo a stock awards value
under column (d) of $1,100,118 in 2024. |
| (4) |
Amounts reportable in column
(e) relate to (i) payments under our Performance Pay Plan for 2024, 2023, and 2022; and (ii) payments related to the 50%
portions of the 2022, 2021, and 2020 performance awards that are based on the B2B performance measure with respect to the 2022 performance
awards and JIS performance measure with respect to the 2021 and 2020 performance awards and which were granted under our KBR Stock
and Incentive Plan. Benefits under our Performance Pay Plan and the KBR Stock and Incentive Plan are payable by their terms during
the first quarter of the following year. |
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2025 Proxy Statement 81
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Table of Contents
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Executive
Compensation |
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Executive Compensation Tables |
| (5) |
The amounts shown in column (f)
include the following: |
| Name | |
Year | | |
Benefit
Restoration | | |
Elective
Deferral | | |
Total(A) |
| Bradie | |
| 2024 | | |
| 3,850 | | |
| — | | |
| 3,850 |
| |
| 2023 | | |
| 11,507 | | |
| — | | |
| 11,507 |
| |
| 2022 | | |
| 13,229 | | |
| — | | |
| 13,229 |
| Sopp | |
| 2024 | | |
| 1,131 | | |
| — | | |
| 1,131 |
| |
| 2023 | | |
| 3,583 | | |
| — | | |
| 3,583 |
| |
| 2022 | | |
| 3,757 | | |
| — | | |
| 3,757 |
| Bright | |
| 2024 | | |
| 927 | | |
| — | | |
| 927 |
| |
| 2023 | | |
| 2,857 | | |
| — | | |
| 2,857 |
| |
| 2022 | | |
| 2,859 | | |
| — | | |
| 2,859 |
| Ibrahim | |
| 2024 | | |
| 994 | | |
| — | | |
| 994 |
| |
| 2023 | | |
| 3,238 | | |
| — | | |
| 3,238 |
| |
| 2022 | | |
| 3,544 | | |
| — | | |
| 3,544 |
| Galindo | |
| 2024 | | |
| 286 | | |
| — | | |
| 286 |
| (A) |
Any amounts reportable here and
in column (f) of the Summary Compensation Table are payable in connection with KBR’s nonqualified deferred compensation plans,
including the KBR Benefit Restoration Plan (“Benefit Restoration”) and KBR Elective Deferral Plan (“Elective Deferral”).
These amounts reflect above-market or preferential earnings on nonqualified deferred compensation. None of our NEOs participate
in the KBR Elective Deferral Plan. |
| |
|
| (6) |
The amounts shown in column (g)
include the following: |
| Name | |
Year | | |
Retirement
Plan
Company Match | | |
Benefit
Restoration
Award | | |
Travel(A) | | |
Executive
Physicals(B) | | |
Global
Medical
Plan(C) | | |
Financial
Planning/Tax
Preparation Fees(D) | | |
Total |
| Bradie | |
| 2024 | | |
| 13,262 | | |
| 51,144 | | |
| 24,055 | | |
| 7,581 | | |
| 76,381 | | |
| 8,756 | | |
| 181,180 |
| Sopp | |
| 2024 | | |
| 18,975 | | |
| 21,722 | | |
| 673 | | |
| 535 | | |
| — | | |
| — | | |
| 41,905 |
| Bright | |
| 2024 | | |
| 18,975 | | |
| 20,114 | | |
| — | | |
| — | | |
| — | | |
| 15,000 | | |
| 54,089 |
| Ibrahim | |
| 2024 | | |
| 18,975 | | |
| 18,191 | | |
| — | | |
| — | | |
| — | | |
| 15,000 | | |
| 52,166 |
| Galindo | |
| 2024 | | |
| 18,975 | | |
| 16,649 | | |
| 2,899 | | |
| — | | |
| — | | |
| 15,000 | | |
| 53,523 |
| (A) |
The amounts
in this column represent travel payments for Messrs. Bradie and Sopp and Ms. Galindo that relate to a spouse or significant
other’s travel for a business trip. |
| (B) |
The amounts in this column
represent the costs for executive physicals offered by KBR. KBR believes the health of its leadership impacts how it delivers for
the organization. Taking a proactive approach to health and wellness with a focus on prevention aligns with KBR’s Zero Harm
and Wellness Program initiatives and ensures business stability. |
| (C) |
The amount in this column
represents KBR’s cost for Mr. Bradie’s self-insured global medical plan. |
| (D) |
The amounts in this column
represent the costs for assistance with Mr. Bradie’s tax returns and Messrs. Bright and Ibrahim’s and Ms. Galindo’s
financial planning. |
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82 2025
Proxy Statement
|
www.kbr.com |
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|
Table of Contents
| Executive
Compensation |
|
| |
|
| Executive Compensation Tables |
|
Grants of Plan-Based Awards
The following table provides information regarding awards
in 2024 under the KBR Senior Executive Performance Pay Plan and the KBR Stock and Incentive Plan.
| | |
| |
| |
| |
Number
Of
Non-Equity
Incentive | | |
Estimated
Future Payouts Under
Non-Equity
Incentive Plan Awards(2) | | |
Estimated
Future Payouts Under
Equity
Incentive Plan Awards(2) | | |
All
Other
Stock
Awards:
Number
Of Shares
Of Stock | | |
Grant Date
Fair Value
Of Stock
And Option |
| Name | |
Grant
Type(1) | |
Grant
Date | |
Approval
Date | |
Plan
Units
Granted | | |
Threshold
($) | | |
Target
($) | | |
Maximum
($) | | |
Threshold
(#) | | |
Target
(#) | | |
Maximum
(#) | | |
Or
Units
(#)(3) | | |
Awards
($)(4) |
| (a) | |
(b) | |
(c) | |
(d) | |
(e) | | |
(f) | | |
(g) | | |
(h) | | |
(i) | | |
(j) | | |
(k) | | |
(l) | | |
(m) |
| Stuart J. B. Bradie | |
STI | |
— | |
— | |
| — | | |
| 478,125 | | |
| 1,912,500 | | |
| 3,825,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| |
PAs-TSR | |
2/22/2024 | |
2/21/2024 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 637,500 | | |
| 2,550,000 | | |
| 5,100,000 | | |
| — | | |
| 2,269,500 |
| |
PAs-B2B | |
2/22/2024 | |
2/21/2024 | |
| 2,550,000 | | |
| 637,500 | | |
| 2,550,000 | | |
| 5,100,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| |
RSUs | |
2/22/2024 | |
2/21/2024 | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 43,017 | | |
| 2,550,048 |
| Mark W.
Sopp | |
STI | |
— | |
— | |
| — | | |
| 176,059 | | |
| 704,238 | | |
| 1,408,476 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| |
PAs-TSR | |
2/22/2024 | |
2/21/2024 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 150,000 | | |
| 600,000 | | |
| 1,200,000 | | |
| — | | |
| 534,000 |
| |
PAs-B2B | |
2/22/2024 | |
2/21/2024 | |
| 600,000 | | |
| 150,000 | | |
| 600,000 | | |
| 1,200,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| |
RSUs | |
2/22/2024 | |
2/21/2024 | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 10,122 | | |
| 600,032 |
| W. Byron Bright, Jr. | |
STI | |
— | |
— | |
| — | | |
| 169,101 | | |
| 676,406 | | |
| 1,352,811 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| |
PAs-TSR | |
2/22/2024 | |
2/21/2024 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 108,333 | | |
| 433,333 | | |
| 866,666 | | |
| — | | |
| 385,666 |
| |
PAs-B2B | |
2/22/2024 | |
2/21/2024 | |
| 433,334 | | |
| 108,334 | | |
| 433,334 | | |
| 866,668 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| |
RSUs | |
2/22/2024 | |
2/21/2024 | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 7,310 | | |
| 433,337 |
| J. Jay Ibrahim | |
STI | |
— | |
— | |
| — | | |
| 161,049 | | |
| 644,196 | | |
| 1,288,392 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| |
PAs-TSR | |
2/22/2024 | |
2/21/2024 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 100,000 | | |
| 400,000 | | |
| 800,000 | | |
| — | | |
| 356,000 |
| |
PAs-B2B | |
2/22/2024 | |
2/21/2024 | |
| 400,000 | | |
| 100,000 | | |
| 400,000 | | |
| 800,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| |
RSUs | |
2/22/2024 | |
2/21/2024 | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 6,748 | | |
| 400,021 |
| Sonia Galindo | |
STI | |
— | |
— | |
| — | | |
| 154,114 | | |
| 616,455 | | |
| 1,232,910 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| |
PAs-TSR | |
2/22/2024 | |
2/21/2024 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 91,667 | | |
| 366,666 | | |
| 733,332 | | |
| — | | |
| 326,333 |
| |
PAs-B2B | |
2/22/2024 | |
2/21/2024 | |
| 366,667 | | |
| 91,667 | | |
| 366,667 | | |
| 733,334 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| |
RSUs | |
2/22/2024 | |
2/21/2024 | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 6,186 | | |
| 366,706 |
| (1) |
During fiscal
year 2024, the NEOs received the following types of plan-based awards: STI (Annual); LTI Performance Cash and Stock Awards
(“PAs”), which are based 50% on relative TSR and 50% on B2B; and KBR Restricted Stock Units (“RSUs”). All
awards were granted under the KBR Stock and Incentive Plan, except that the STI was granted under the Performance Pay Plan, which
is a performance program under the KBR Stock and Incentive Plan. |
| (2) |
The PAs in the Non-Equity
columns represent the 50% portion of the award based on B2B and have a target value of $1.00 per unit (not the value of
KBR’s common stock), and such amounts represent the total dollar value of the incentive opportunity at the threshold,
target, and maximum potential payout levels. The PAs in the Equity Incentive Plan columns represent the 50% portion of the
award based on TSR and are based upon the number of shares of KBR common stock underlying each award at the threshold,
target, and maximum potential payout levels. Actual STI and PA payouts may equal amounts between performance level
percentages based on the achievement levels of performance metrics. The 2024 STI payouts are calculated using the
Participant’s annual base salary as determined on January 1, 2024 (or the first day the Participant becomes eligible to
participate in the Performance Pay Plan if such day occurs after the first day of January). Estimated payouts of the portions
of the PAs based 50% on TSR and 50% on B2B are each calculated using half of the Participant’s total KBR
Long-Term Performance Cash and Stock Award granted in 2024. |
| (3) |
The RSUs in column (l)
vest equally over three years. |
| (4) |
The amounts in column (m)
are calculated for RSUs based on the product of the number of RSUs granted and the closing price of KBR’s common stock on the
Grant Date of $59.28 and are calculated for PAs based on each PA unit having a grant date fair value of $0.890. These amounts reflect
the aggregate grant date fair value computed in accordance with FASB ASC 718. |
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Executive
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Executive Compensation Tables |
Narrative Disclosure to Summary
Compensation Table and Grants of Plan-Based Awards Table
NO EMPLOYMENT AGREEMENTS
Our NEOs do not have employment agreements. Each of our NEOs
entered into a severance and change-in-control agreement that only provides for severance-type benefits, including severance following
a change in control. For more information, see “Severance and Change-in-Control Agreements.”
LONG-TERM INCENTIVES
During fiscal year 2024, our NEOs received the following
types of plan-based awards under the KBR Stock and Incentive Plan: (1) an annual STI award, which is based on achieving goals for pre-established
performance metrics and is paid in cash (see “Short-Term Incentives (Annual)” for more detail), (2) LTI PAs, which are based
50% on B2B and 50% on relative TSR (see “KBR Long-Term Performance Cash and Stock Awards” for more detail), and (3) RSUs.
The PAs were granted on February 22, 2024. One-half of the
target value of the PAs was granted with respect to the TSR portion of the award and consisted of a target number of units that each
represent the right to receive one share of our common stock, with the number of such units initially determined by dividing the target
value of the TSR portion of the award by $59.28, the closing price of a share of our common stock on the date of grant (rounded up to
the next whole unit). The number of such units (and, accordingly, the number of shares of our common stock delivered in settlement of
the units) under the TSR portion of the PAs will depend on the level of achievement of the TSR performance objective and may vary from
0% to 200% of the original target number of units granted. The level of achievement of the TSR performance objective will be determined
at the end of the performance period based on the level of achievement during the performance period of the comparison of the average
TSR (measured with a 20-trading-day average price) of KBR’s common stock at the end of the performance period to the average TSR
of each of the common stocks of the members of the peer group for the performance period. Specifically, each peer group company’s
TSR is measured every quarter, indexed back to the start of the year, and KBR’s similarly calculated average quarterly indexed
TSR is ranked relative to its peers. KBR’s average quarterly indexed TSR rank is measured over the three-year performance period,
which runs from January 1, 2024, to December 31, 2026.
The remaining 50% of the PAs will be determined based on
B2B over the same three-year performance period. The B2B portion of each PA has a target value of $1.00 per unit. B2B is a measurement
of the value of awarded contracts in comparison to revenue earned in the period. B2B is a standard industry metric for both government
and commercial/industrial peers. B2B is calculated as the average of the achievement levels of the B2B performance metric for each year
during the three-year performance period. Like the TSR portion of the 2024 PAs, achievement of Threshold pays out at 25%, Target at 100%,
and Maximum at 200%, all weighted 50%. However, the B2B portion of the 2024 PAs is paid out in cash, whereas the TSR portion of the 2024
PAs is settled in shares of our common stock. No award will be paid for B2B under the PAs until after the end of the three-year performance
period when the average B2B earned will be calculated using the average B2B percentage achieved during each year in the three-year performance
period.
In addition to the TSR and B2B performance measures, 20%
of the PAs granted on February 22, 2024, were subject to forfeiture if our Compensation Committee in its sole discretion determined that
2024 was not a successful year for us. The metric was a one-time metric that if not satisfied at the end of 2024 would result in the
forfeiture of 20% of the PAs granted in 2024. In 2024, this performance metric was satisfied.
The stock-settled payout for the 50% TSR portion of the 2022,
2023, and 2024 grants of KBR Long-Term Performance Cash and Stock Awards are reported in the “Stock Awards” column of the
Summary Compensation Table for 2022, 2023, and 2024, the years in which the awards were granted (rather than in the “Non-Equity
Incentive Plan Compensation” column in the year they were earned (2024, 2025, and 2026)), because the TSR portion of KBR Long-Term
Performance Cash and Stock Awards fell within the scope of FASB ASC 718.
The cash payout for the 50% B2B portion of the 2022, 2023,
and 2024 KBR Long-Term Performance Cash and Stock Awards will be reported in the “Non-Equity Incentive Plan Compensation”
column of the Summary Compensation Table in the year earned because the B2B portion falls within the scope of FASB ASC 718. Due
to the B2B performance requirement being met in 2024 for the 2022 KBR Long-Term Performance Cash and Stock Awards, the “Non-Equity
Incentive Plan Compensation” column of the Summary Compensation Table includes the B2B portion of the 2022 KBR Long-Term Performance
Cash and Stock Awards in 2024.
In February 2024, our Compensation Committee approved long-term
incentive target values of $7,650,000 for Mr. Bradie, $1,800,000 for Mr. Sopp, $1,300,000 for Mr. Bright, $1,200,000 for
Mr. Ibrahim, and $1,100,000 for Ms. Galindo as described in the “Compensation Discussion and Analysis” section
of this proxy statement under the header “KBR Stock and Incentive Plan.” Long-term incentive awards were delivered
through a combination of cash- and stock-based PAs and stock-based RSUs.
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| Executive
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| Executive Compensation Tables |
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Our Compensation
Committee determined the number of PAs for 2024 for each NEO by multiplying the total long-term incentive target value by 66 ⅔%, one-half of which was allocated to each of the B2B portion and the TSR portion of the award. The target value
allocated to the B2B portion of the PA was divided by $1.00 (the target value of each unit associated with that portion of
the PA). Our Compensation Committee decided to use $1.00 as the target value for the B2B portion of each PA for the purpose
of administering and communicating the award. In addition, the use of $1.00 as a target value for the B2B portion of each PA
is a means of expressing the value of that portion of the award since the number of PAs were granted based on the total
target value of long-term incentive awards. The actual value of the B2B portion of a PA may increase to a maximum of 200% of
$1.00, or $2.00, or decrease to below threshold to 0% of $1.00, or $0.00. The value of the B2B portion of PAs for performance
between threshold and target or target and maximum will be calculated using linear interpolation. The target value of the PAs
allocated to the TSR portion of the award is represented by a target number of units that each represent the right to receive
one share of our common stock, with the number of such units initially determined by dividing the target value of the TSR
portion of the award by the closing price of a share of our common stock on the date of grant (rounded up to the next whole
unit). The number of such units (and, accordingly, the number of shares of our common stock delivered in settlement of the
units) under the TSR portion of a PA may increase to a maximum of 200% of the original number of units granted, or decrease
to 0% of the original number of units granted, in each case depending on the level of achievement of the TSR performance
objective.
The Compensation Committee adopted a three-year performance
award cycle because it promotes retention and aligns the long-term interests of the NEOs with the interests of our stockholders.
The RSUs granted on February 22, 2024, under the
KBR Stock and Incentive Plan vest in equal annual increments beginning on the first anniversary of the grant date. Our
Compensation Committee determined the number of RSUs for each NEO by multiplying the total long-term incentive target value
by 33 ⅓% and dividing the product by the closing price of our common stock on the date of grant.
In addition to the service requirement for vesting, 20% of
the RSUs that were granted in 2024 were subject to forfeiture if our Compensation Committee in its sole discretion determined that 2024
was not a successful year for KBR. After reviewing KBR’s results for 2024, the Compensation Committee did not initiate a forfeiture.
SHORT-TERM INCENTIVES (ANNUAL)
Our NEOs were eligible to participate in the
Performance Pay Plan for the 2024 calendar year. Payouts under the Performance Pay Plan are based on a combination of
individual performance and company performance against goals for pre-established performance metrics, as described in the
Compensation Discussion and Analysis.
Each NEO’s short-term incentive award opportunity was
based on a percentage of base salary for each possible performance level (threshold, target, or maximum), as follows: (i) for Mr. Bradie,
37.5%, 150%, and 300% and (ii) for Ms. Galindo and Messrs. Bright, Ibrahim, and Sopp, 23.75%, 95% and 190%.
SALARY AND SHORT-TERM INCENTIVE
IN PROPORTION TO TOTAL COMPENSATION
Assuming target performance with respect to the long-term
incentive awards, our CEO, Mr. Bradie, received approximately 29% of his total compensation in the form of base salary and annual
cash-based STI awards, and our NEOs (other than our CEO) generally received on average approximately 51% of their total compensation
in the form of base salary and annual cash-based STI awards. Please see the “Compensation Discussion and Analysis”
section of this proxy statement for a description of the philosophy and objectives of our compensation program.
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Compensation |
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Executive Compensation Tables |
Outstanding Equity Awards at Fiscal
Year End
The following table provides information on previously awarded
equity grants outstanding as of January 3, 2025.
| | |
| |
Stock
Awards |
| Name | |
Grant
Date(1) | |
Number
of Shares
or Units
of Stock That
Have Not Vested
(#)(2) | | |
Market
Value of Shares
or
Units of Stock That
Have Not Vested
($)(3) | | |
Equity
Incentive Plan Awards:
#
of Unearned Shares, Units or
Other Rights That
Have
Not Vested
(#)(4) | | |
Equity
Incentive Plan Awards:
Market
or Payout Value
of Unearned Shares, Units or
Other
Rights That
Have Not Vested
($)(5) |
| (a) | |
| |
(b) | | |
(c) | | |
(d) | | |
(e) |
| Stuart
J. B. Bradie | |
2/22/2024 | |
| 43,017 | | |
| 2,538,433 | | |
| 43,017 | | |
| 5,076,866 |
| |
2/22/2023 | |
| 28,926 | | |
| 1,706,923 | | |
| 43,388 | | |
| 5,120,652 |
| |
2/24/2022 | |
| 16,184 | | |
| 955,018 | | |
| — | | |
| — |
| TOTAL | |
| |
| 88,127 | | |
| 5,200,374 | | |
| 86,405 | | |
| 10,197,518 |
| Mark W.
Sopp | |
2/22/2024 | |
| 10,122 | | |
| 597,299 | | |
| 10,122 | | |
| 1,194,598 |
| |
2/22/2023 | |
| 6,384 | | |
| 376,720 | | |
| 9,576 | | |
| 1,130,160 |
| |
2/24/2022 | |
| 3,468 | | |
| 204,647 | | |
| — | | |
| — |
| TOTAL | |
| |
| 19,974 | | |
| 1,178,666 | | |
| 19,698 | | |
| 2,324,758 |
| W. Byron
Bright, Jr. | |
2/22/2024 | |
| 7,310 | | |
| 431,363 | | |
| 7,310 | | |
| 862,726 |
| |
2/22/2023 | |
| 4,987 | | |
| 294,283 | | |
| 7,481 | | |
| 882,908 |
| |
2/24/2022 | |
| 2,890 | | |
| 170,539 | | |
| — | | |
| — |
| TOTAL | |
| |
| 15,187 | | |
| 896,185 | | |
| 14,791 | | |
| 1,745,634 |
| J. Jay
Ibrahim | |
2/22/2024 | |
| 6,748 | | |
| 398,199 | | |
| 6,748 | | |
| 796,399 |
| |
2/22/2023 | |
| 3,990 | | |
| 235,450 | | |
| 5,985 | | |
| 706,350 |
| |
2/24/2022 | |
| 2,312 | | |
| 136,431 | | |
| — | | |
| — |
| TOTAL | |
| |
| 13,050 | | |
| 770,080 | | |
| 12,733 | | |
| 1,502,749 |
| Sonia Galindo | |
2/22/2024 | |
| 6,186 | | |
| 365,036 | | |
| 6,186 | | |
| 730,072 |
| |
2/22/2023 | |
| 3,990 | | |
| 235,450 | | |
| 5,985 | | |
| 706,350 |
| |
2/24/2022 | |
| 2,312 | | |
| 136,431 | | |
| — | | |
| — |
| TOTAL | |
| |
| 12,488 | | |
| 736,917 | | |
| 12,171 | | |
| 1,436,422 |
| (1) |
The awards
granted consist of RSUs and performance awards based on relative TSR under the KBR Stock and Incentive Plan. |
| (2) |
With respect to the RSUs granted on February 24, 2022, February
22, 2023, and February 22, 2024, for all NEOs, the units vest at a rate of 33 ⅓% per year over a three-year
vesting period. However, vesting of 20% of the total number of RSUs granted as part of the annual long-term incentive
awards is subject to whether our Compensation Committee determines, in its sole discretion, that each of 2022, 2023, and 2024
was a successful year for KBR. The Compensation Committee determined that all three years were successful. |
| (3) |
Market value in this table
is based upon a fair market value of $59.01 per share, the closing price for KBR common stock on January 3, 2025 (the last trading
day of the fiscal year). |
| (4) |
This column includes the
50% portions of the performance awards granted in 2023 and 2024 that are based on TSR and settled in shares of our common stock.
These performance awards vest, to the extent earned, at the end of the applicable three-year performance period. |
| (5) |
This column includes the
values of the TSR-based portions of the performance awards granted in 2023 and 2024, which are calculated by multiplying the
market value based upon a fair market value of $59.01 per share for KBR common stock, the closing price on January 3, 2025 (the last
trading day of the fiscal year), by the maximum number of shares of KBR common stock deliverable under the TSR-based portions
of the performance awards granted in 2023 and 2024, which is equal to the product of twice the number of shares of KBR common stock
underlying each performance award. Under the SEC rules, the payout value reported in this column must be disclosed based on achieving
threshold performance goals, except that if performance during the last completed fiscal year (or, if the payout is based on performance
to occur over more than one year, the last completed fiscal years over which performance is measured) has exceeded threshold, we
must disclose the next higher performance measure (target or maximum) that exceeds the last completed fiscal year’s performance
(or, if the payout is based on performance to occur over more than one year, the last completed fiscal years over which performance
is measured). Under SEC rules, if an award provides only for a single estimated payout, that amount should be reported. |
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| Executive
Compensation |
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| Executive Compensation Tables |
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Option Exercises and Stock Vested
The following table shows information for 2024 regarding
the exercise of stock options and the vesting of restricted stock units.
| | |
Option
Awards | | |
Stock
Awards |
| Name | |
Number
of Shares
Acquired on Exercise
(#) | | |
Value
Realized on
Exercise
($)(1) | | |
Number
of Shares
Acquired
on Vesting
(#)(2) | | |
Value
Realized on
Vesting
($)(3) |
| (a) | |
(b) | | |
(c) | | |
(d) | | |
(e) |
| Stuart
J. B. Bradie | |
| — | | |
| — | | |
| 109,891 | | |
| 6,455,067 |
| Mark
W. Sopp | |
| — | | |
| — | | |
| 24,209 | | |
| 1,422,766 |
| W.
Byron Bright, Jr. | |
| — | | |
| — | | |
| 19,655 | | |
| 1,154,640 |
| J.
Jay Ibrahim | |
| 22,190 | | |
| 1,070,818 | | |
| 16,007 | | |
| 940,665 |
| Sonia
Galindo | |
| — | | |
| — | | |
| 17,203 | | |
| 1,047,188 |
| (1) |
When applicable, represents the
pre-tax value realized on option awards that were exercised during the fiscal year, computed by multiplying the number of
shares acquired on exercise by the difference between the closing price of common stock on the exercise date and the option price. |
| (2) |
Represents the number of restricted stock units
(“RSUs”) and performance stock units (“PSUs”) that vested during the fiscal year 2024 and a portion of the
cash and stock performance awards (“PAs”) granted in 2022 that vested on December 31, 2024. The amounts included
under columns (d) and (e) above attributable to the PAs granted in 2022 reflect the TSR-based portion of such PAs that is
settled in shares of KBR common stock. For Mr. Bradie, 42,160 RSUs, 10,538 PSUs, and 57,193 PAs vested. For Mr. Sopp, 9,563
RSUs, 2,390 PSUs, and 12,256 PAs vested. For Mr. Bright, 7,554 RSUs, 1,888 PSUs, and 10,213 PAs vested. For Mr. Ibrahim,
6,268 RSUs, 1,568 PSUs, and 8,171 PAs vested. For Ms. Galindo, 8,170 RSUs, 862 PSUs, and 8,171 PAs vested. The B2B-based
portion of the PAs that vested in fiscal year 2024 is not included under columns (d) and (e) above since it was paid out in cash
but is reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for 2024. |
| (3) |
Represents the pre-tax value realized on stock
awards that vested during the fiscal year, computed by multiplying the number of shares acquired on vesting by the closing
price of common stock on the vesting date. This also represents the value realized on the TSR-based portion of the
2022 PAs at the end of the three-year performance period on December 31, 2024, computed by multiplying
the product of the target number of shares of KBR common stock granted and the TSR metric payout percentage of 117.8% (i.e.,
the number of shares of KBR common stock earned) by the closing price of common stock on December 31, 2024. The TSR
metric payout percentage of 117.8% was certified by our Board, with respect to Mr. Bradie, and Compensation Committee, with
respect to our other NEOs, effective as of February 25, 2025. The value realized on the TSR-based portion of the 2022 PAs on
the date of certification for each NEO is as follows: Mr. Bradie, $2,758,990; Mr. Sopp, $591,229; Mr. Bright,
$492,675; Mr. Ibrahim, $394,169; and Ms. Galindo, $394,169. |
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Compensation |
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Executive Compensation Tables |
Pension Benefits
Our NEOs did not participate in a KBR-sponsored pension plan
required to be reported under the Pension Benefits table.
Nonqualified Deferred Compensation
The following table provides information regarding each NEO’s
contributions to covered deferred compensation plans, earnings accrued during the year, withdrawals and distributions during the year,
and plan balances at fiscal year-end.
| Name | |
Plan | |
Executive
Contributions in Last FY
($)(1) | | |
Registrant
Contributions
in Last FY
($)(2) | | |
Aggregate
Earnings
in Last FY
($)(3) | | |
Aggregate
Withdrawals/
Distributions
($) | | |
Aggregate
Balance at Last
FYE
($)(4) |
| (a) | |
| |
(b) | | |
(c) | | |
(d) | | |
(e) | | |
(f) |
| Stuart
J. B. Bradie | |
Elective Deferral | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| | |
Restoration | |
| — | | |
| 51,144 | | |
| 33,217 | | |
| — | | |
| 638,117 |
| Mark W.
Sopp | |
Elective Deferral | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| | |
Restoration | |
| — | | |
| 21,722 | | |
| 9,967 | | |
| — | | |
| 197,867 |
| W. Byron
Bright, Jr. | |
Elective Deferral | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| | |
Restoration | |
| — | | |
| 20,114 | | |
| 8,081 | | |
| — | | |
| 162,927 |
| J. Jay
Ibrahim | |
Elective Deferral | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| | |
Restoration | |
| — | | |
| 18,191 | | |
| 8,856 | | |
| — | | |
| 174,687 |
| Sonia Galindo | |
Elective Deferral | |
| — | | |
| — | | |
| — | | |
| — | | |
| — |
| | |
Restoration | |
| — | | |
| 16,649 | | |
| 1,991 | | |
| — | | |
| 51,870 |
| (1) |
To the extent
there are any amounts listed in column (b) above, those amounts will also be reported as compensation in the most recent year in
columns (c) and/or (g) of the Summary Compensation Table. |
| (2) |
The amounts in column (c)
are reported as compensation for 2024 in column (g) of the Summary Compensation Table. |
| (3) |
Only the above-market
earnings in column (d) are reported as compensation for 2024 in column (f) of the Summary Compensation Table. |
| (4) |
Only the amount of the
aggregate balance in column (f) that relates to registrant contributions that are reported in column (c) are reported as compensation
in the “All Other Compensation” column of the Summary Compensation Table for 2024 as well as amounts previously reported
in prior Summary Compensation Tables. The amounts disclosed in the Summary Compensation Table, both as currently and previously reported,
as applicable, for each NEO are as follows: Mr. Bradie, $149,228; Mr. Sopp, $63,214; Mr. Bright, $58,588; Mr. Ibrahim,
$49,992; and Ms. Galindo, $16,649. |
NARRATIVE DISCLOSURE TO NONQUALIFIED
DEFERRED COMPENSATION TABLE
Under the Elective Deferral Plan, voluntary pretax deferrals
of up to 75% of base salary and incentive compensation are allowed each year. The Benefit Restoration Plan does not allow employee elective
deferrals.
Earnings under the Elective Deferral Plan are based upon
the executive’s election from a variety of investment options that include both stock and bond funds. Generally, participants may
change their investment elections without limit; however, most of the funds are subject to waiting periods for transfers and reallocations
into and out of the same fund. Any preferential interest credited above 120% of the applicable Federal long-term rate is recorded in
column (f) the Summary Compensation Table.
Earnings for the Benefit Restoration Plan that were applicable
to allocation years prior to January 1, 2024, were credited based on a legacy bond fund in the KBR Elective Deferral Plan,
which had 2022 and 2023 yields that exceeded 120% of the applicable Federal long-term rates. That preferential interest is recorded in
column (f) of the Summary Compensation Table. In 2024, our NEOs received awards under the Benefit Restoration Plan in the amounts shown
in the footnote table to column (g) of the Summary Compensation Table. Earnings for the Benefit Restoration Plan that are applicable
to allocation years beginning on and after January 1, 2024, will be credited based upon the executive’s election from
a variety of investment options that consist of the same funds offered under the Elective Deferral Plan. Similar to the Elective Deferral
Plan, participants under the Benefit Restoration Plan may change their investment elections without limit, subject to the waiting periods
for transfers into and out of the same fund.
Benefits under the Benefit Restoration Plan are paid in
a lump sum upon termination. Benefits under the Elective Deferral Plan are paid on termination of employment or a specified future
date, either as a lump sum or in installments. Withdrawals under the Elective Deferral Plan are allowed in the case of an
unforeseeable emergency.
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Table of Contents
| Executive
Compensation |
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| Executive Compensation Tables |
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ELEMENTS OF POST-TERMINATION
COMPENSATION AND BENEFITS
KBR entered into severance and change-in-control agreements
with each of our NEOs—in 2014 with respect to Mr. Bradie, in 2015 with respect to Mr. Ibrahim, in 2017 with respect to
Mr. Sopp, and in 2021 with respect to Ms. Galindo and Mr. Bright.
Termination events that trigger payments and
benefits include a change in control, normal or early retirement, termination without cause or for good reason, voluntary
termination, disability, and death. Post-termination payments may include severance, accelerated vesting of restricted stock
and stock options, maximum payments under cash-based short-term and long-term incentive plans, nonqualified account balances,
and health benefits, among others. See “2024 Potential Payments Upon Termination or Change in Control” for more
detail on estimated potential payments and benefits under Ms. Galindo and Messrs. Bradie, Bright, Ibrahim, and
Sopp’s severance and change-in-control agreements. See “Severance and Change-in-Control Agreements” for a
description of: (a) the specific circumstances that would trigger payments and benefits, (b) the payment and benefit levels
under various circumstances, (c) any material conditions or obligations applicable to the receipt of payments or
benefits, and (d) any other material factors regarding the severance and change-in-control agreements.
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Executive
Compensation |
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Executive Compensation Tables |
2024 POTENTIAL PAYMENTS
UPON TERMINATION OR CHANGE IN CONTROL
| Executive |
|
Benefits(1)(2) |
|
Change
in
Control without
Termination
1/3/2025
($) |
|
Change
in Control
with Involuntary
Termination
1/3/2025
($) |
|
Retirement,
Disability,
or Death on
1/3/2025(6)
($) |
|
Involuntary
Not For Cause
or Voluntary for Good
Reason Termination on
1/3/2025
($) |
|
For
Cause or
Voluntary without
Good Reason on
1/3/2025
($) |
| (a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f) |
|
(g) |
| Stuart J.
B. Bradie |
|
Stock
Awards |
|
— |
|
5,200,374 |
|
5,200,374 |
|
— |
|
— |
| |
|
Stock
Options(3) |
|
— |
|
— |
|
— |
|
— |
|
— |
| |
|
Performance
Awards(4) |
|
— |
|
15,263,755 |
|
10,244,628 |
|
— |
|
— |
| |
|
Cash
Severance(5) |
|
— |
|
12,365,868 |
|
2,574,225 |
|
6,375,000 |
|
— |
| TOTAL |
|
|
|
— |
|
32,829,997 |
|
18,019,227 |
|
6,375,000 |
|
— |
| Mark W. Sopp |
|
Stock
Awards |
|
— |
|
1,178,666 |
|
1,178,666 |
|
— |
|
— |
| |
|
Stock
Options(3) |
|
— |
|
— |
|
— |
|
— |
|
— |
| |
|
Performance
Awards(4) |
|
— |
|
3,409,653 |
|
2,252,662 |
|
— |
|
— |
| |
|
Cash
Severance(5) |
|
— |
|
3,869,573 |
|
930,298 |
|
1,445,541 |
|
— |
| TOTAL |
|
|
|
— |
|
8,457,892 |
|
4,361,626 |
|
1,445,541 |
|
— |
| W. Byron Bright,
Jr. |
|
Stock
Awards |
|
— |
|
896,185 |
|
896,185 |
|
— |
|
— |
| |
|
Stock
Options(3) |
|
— |
|
— |
|
— |
|
— |
|
— |
| |
|
Performance
Awards(4) |
|
— |
|
2,651,102 |
|
1,794,099 |
|
— |
|
— |
| |
|
Cash
Severance(5) |
|
— |
|
3,745,574 |
|
893,532 |
|
1,388,412 |
|
— |
| TOTAL |
|
|
|
— |
|
7,292,861 |
|
3,583,816 |
|
1,388,412 |
|
— |
| J. Jay Ibrahim |
|
Stock
Awards |
|
— |
|
770,081 |
|
770,081 |
|
— |
|
— |
| |
|
Stock
Options(3) |
|
— |
|
— |
|
— |
|
— |
|
— |
| |
|
Performance
Awards(4) |
|
— |
|
2,227,336 |
|
1,471,125 |
|
— |
|
— |
| |
|
Cash
Severance(5) |
|
— |
|
3,647,014 |
|
936,661 |
|
1,322,297 |
|
— |
| TOTAL |
|
|
|
— |
|
6,644,431 |
|
3,177,867 |
|
1,322,297 |
|
— |
| Sonia Galindo |
|
Stock
Awards |
|
— |
|
736,917 |
|
736,917 |
|
— |
|
— |
| |
|
Stock
Options(3) |
|
— |
|
— |
|
— |
|
— |
|
— |
| |
|
Performance
Awards(4) |
|
— |
|
2,160,839 |
|
1,448,737 |
|
— |
|
— |
| |
|
Cash
Severance(5) |
|
— |
|
3,394,636 |
|
834,680 |
|
1,265,355 |
|
— |
| TOTAL |
|
|
|
— |
|
6,292,392 |
|
3,020,334 |
|
1,265,355 |
|
— |
| (1) |
The aggregate nonqualified
deferred compensation payable to each NEO upon termination is set forth in column (f) of the Nonqualified Deferred Compensation
Table and is not reflected in this table. |
| (2) |
This table includes amounts payable to the
NEOs assuming they remained employed through January 3, 2025, pursuant to the Performance Pay Plan, as reported in column
(e) of the Summary Compensation Table. If an NEO is terminated for “cause” (as defined under the applicable plan/program),
all such executive’s rights to payment would be automatically forfeited. This table does not include benefits that are
generally available to all salaried employees. |
| (3) |
No amounts are shown for stock options in
this table because there were no unvested stock options as of January 3, 2025. KBR last granted stock options in 2015. |
| (4) |
Assumes for purposes of a change in control
with an involuntary termination, retirement, disability, or death that payout for the Performance Awards will be at target.
Performance Awards are fully vested on a change-in-control termination but are prorated on retirement, disability,
or death. While the value of the 2022 Performance Awards is included in the Change in Control with Involuntary Termination
column based on target as required pursuant to applicable reporting rules, those awards actually paid out at 158.3% of target
with respect to the B2B portion and 117.8% with respect to the TSR portion. |
| (5) |
Cash severance includes welfare costs in
the case of a change in control with an involuntary termination. With respect to Mr. Bradie, welfare costs are estimated
using the highest cost medical plan option available to KBR employees. Cash severance in the case of retirement, disability,
or death is equal to the actual short-term incentive (“STI”) payout (prorated to the date of termination
if the date of termination occurs before the end of the performance period). Cash severance does not include amounts that
may be paid under the severance plan generally available to all employees because the NEOs are not eligible for that plan
while party to an individual severance agreement. |
| (6) |
Retirement is completely discretionary and
subject to the approval of our Compensation Committee except for Messrs. Bradie and Ibrahim. With respect to Messrs. Bradie
and Ibrahim, retirement means resignation from employment (other than for “good reason” (as defined under their
severance and change-in-control agreements)) on any date after reaching age 65 or, with the approval of our
Compensation Committee, on any date (x) after reaching age 55 (with at least eight (ten for Mr. Ibrahim) years of service)
or (y) after the sum of their age and years of service is 70 or greater. |
| |
|
|
90 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
| Executive
Compensation |
|
| |
|
| Executive Compensation Tables |
|
Severance and Change-in-Control
Agreements
Our Compensation Committee approved the Agreement—a
form of severance and change-in-control agreement—for each of the NEOs and certain other senior executive officers.
CIRCUMSTANCES THAT WOULD
TRIGGER PAYMENTS AND BENEFITS
The Agreement will terminate automatically on the
earlier of (i) the executive’s termination of employment with KBR or (ii) in the event of a change in control
during the term of the Agreement, two years following the change in control. The Agreement provides for (i) severance termination
benefits (prior to a change in control), (ii) double-trigger change-in-control termination benefits (on or after a change
in control), and (iii) death, disability, and retirement benefits.
Under the Agreement, “cause,” “good
reason,” and “change in control” are defined as described below.
“Cause” means any of the following:
(i) the executive’s gross negligence or willful misconduct in the performance of the duties and services required by
the Company; (ii) the executive’s conviction of, or plea other than not guilty to, a felony or a misdemeanor involving
moral turpitude; or (iii) a material violation of the Company’s Code of Business Conduct. Except for the definition
under Ms. Galindo’s Agreement, prior to a change in control, “cause” also means the executive’s failure to perform,
in a reasonably satisfactory manner, the duties and services required by the Company, provided that the Company gives the executive
at least 10 days’ written notice to cure the failure.
“Good Reason” means any of the
following: (i) a material diminution in the executive’s base salary, (ii) a material diminution in the executive’s
authority, duties, or responsibilities, including, with respect to Mr. Bradie, the failure to maintain him in the position
of CEO of the Company or nominate him to stand for re-election to the Board of Directors, and with respect to Ms. Galindo, the
failure to maintain her in a position that reports directly to the CEO of the Company’s ultimate parent company, or if there
is no CEO, the highest ranking executive officer, or (iii) unless agreed to by the executive, the relocation of the offices
at which the executive is principally employed to a location more than 50 miles away. However, prior to a change in control, “good
reason” means a 25% or more diminution in the executive’s base salary, unless a similar reduction is made to the base
salaries of all senior executive officers of the Company, and with respect to Mr. Bradie, it also means (ii) and (iii) of
the definition of “good reason” above, and with respect to Ms. Galindo, it also means (iii) of the definition
of “good reason” above.
“Change in Control” is generally
triggered upon any of the following: (i) a person acquires 20% or more of the voting power of the Company, (ii) the
majority of our Board of Directors changes, (iii) a merger or consolidation of the Company (unless the Company still controls
a majority of the voting stock), (iv) a complete liquidation or dissolution of the Company, or (v) a sale, disposition,
lease, or exchange of all or substantially all the Company’s assets.
Termination Due to Death
or Disability
If at any time during the term of an Agreement, the
NEO dies or becomes disabled, then KBR will provide the executive (or the executive’s estate) with the benefits described
below.
(a) The executive’s unearned bonus under the
annual cash incentive plan payable for the fiscal year in which the termination occurs, with such bonus amount determined at the
end of the performance period in accordance with the plan. Any such earned amount will be prorated to the executive’s date
of termination and paid in a lump sum on the normal payment date for such annual bonuses under the plan, but not later than the
March 15 following the end of the performance period.
(b) The executive’s unpaid bonus (if any) accrued
under the annual cash incentive plan for the fiscal year that ended on or immediately before the executive’s date of termination,
which shall be paid in a lump sum on the normal payment date for such bonuses, but not later than the March 15 following the end
of such prior performance period.
(c) The restrictions on all restricted stock and restricted
stock units held by the executive will lapse in full on the date of termination.
(d) All stock options and stock appreciation rights
(“SARs”) held by the executive will become fully vested and exercisable on the date of termination and may be exercised
until the earlier of the second anniversary of the date of termination (unless otherwise provided by our Compensation Committee,
in its discretion) and the remaining term of such option or SAR.
(e) All outstanding performance awards granted to
the executive will be prorated to the date of termination, and to the extent such awards become “earned” based on
actual performance results at the end of the performance period, will be paid to the executive in a lump sum on the normal payment
date for such awards under the plan, but not later than the March 15 following the end of the performance period.
(f) All the executive’s account balances in
all supplemental and nonqualified retirement plans of KBR and its affiliates will become fully vested on the date of termination.
| |
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Proxy Statement 91
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|
Table of Contents
|
Executive
Compensation |
| |
|
| |
Executive Compensation Tables |
Termination Due to Retirement
If at any time during the term of the Agreement, the
NEO retires, then KBR will provide the executive with the above death and disability benefits, except that the executive may only
exercise stock options and SARs until the earlier of the first anniversary of the date of termination (unless otherwise provided
by our Compensation Committee, in its discretion) and the remaining term of such options or SARs. Retirement is completely discretionary
and subject to the approval of our Compensation Committee except for Messrs. Bradie and Ibrahim. With respect to Messrs. Bradie
and Ibrahim, retirement means resignation from employment (other than for “good reason” (as defined under their Agreements))
on any date after reaching age 65 or, with the approval of our Compensation Committee, on any date (x) after reaching age 55 (with
at least eight (ten for Mr. Ibrahim) years of service) or (y) after the sum of their age and years of service is 70 or greater.
Voluntary Termination Without
Good Reason or Retirement
If at any time during the term of the Agreement, the
NEO voluntarily terminates employment for any reason other than a “good reason” or retirement, the executive will
not be entitled to any payments or benefits and the executive’s vested stock options and SARs must be exercised within 30 days
of the date of termination or, if earlier, before the applicable expiration date.
Termination For Cause
If at any time during the term of the Agreement, the
NEO’s employment is terminated by KBR for “cause,” the executive will not be entitled to any severance payments
or benefits.
Termination Without Cause
or By the Executive For Good Reason
If, prior to a change in control, the NEO’s
employment is terminated by KBR (except for “cause”), or if the NEO terminates employment for “good reason,”
KBR will provide the executive with the following benefits: (a) a lump-sum cash payment equal to the sum of: (i) one (two
with respect to Mr. Bradie) year’s base salary in effect at termination, plus (ii) (two times with respect to
Mr. Bradie) the executive’s annual target bonus opportunity; (b) all vested stock options and SARs may be exercised
within the one-year period following termination, but not later than the remaining term of the option or SARs; and (c) all unvested
stock options, SARs, restricted stock, restricted stock units, and performance awards will be forfeited, unless and to the extent
provided otherwise by our Compensation Committee, in its discretion, with respect to non-performance awards.
Termination Following a
Change in Control
If on the date of, or within two years after, a change
in control, KBR terminates the NEO’s employment without cause or the NEO terminates employment for “good reason,”
then KBR will provide the executive with the change-in-control termination benefits described below.
(a) a lump sum cash payment equal to the sum of: (i) two
times (three times with respect to Mr. Bradie) the executive’s base salary in effect at termination (or, if higher,
the executive’s base salary in effect immediately prior to the change in control), plus (ii) two times (three times
with respect to Mr. Bradie) the executive’s annual target bonus opportunity;
(b) the executive’s unearned bonus under the
annual cash incentive plan payable for the fiscal year in which the executive’s termination occurs, with such bonus amount
determined at the end of the performance period in accordance with the plan, and then such earned amount (if any) (x) prorated
to the executive’s date of termination and (y) paid to the executive in a lump sum on the normal payment date for such annual
bonuses, but not later than the March 15 following the end of the performance period;
(c) the executive’s unpaid bonus (if any) accrued
under the annual cash incentive plan for the fiscal year that ended on or immediately before the executive’s termination,
which will be paid to the executive in a lump sum on the normal payment date for such bonuses, but not later than 74 days
following the executive’s termination of employment;
(d) all the outstanding stock options, SARs, restricted
stock and restricted stock unit awards, and other equity-based awards granted by KBR to the executive that are not performance
awards will become fully vested and immediately exercisable or payable in full on the effective date of the release required under
the Agreement, provided such release is timely executed by the executive following termination of employment;
(e) all performance award units other than those that
are covered under the annual cash incentive plan will become fully vested and paid at target performance as soon as administratively
feasible following the termination of employment, but not later than March 15 of the year following such termination;
(f) all account balances in any supplemental and nonqualified
retirement plans will become fully vested; and
(g) welfare plan
costs equal to two times (three times with respect to Mr. Bradie) the total annual cost to the executive and KBR of the
medical, dental, life, and disability benefits provided to the executive and the executive’s eligible dependents by KBR
for the year of the executive’s termination.
DETERMINATION OF APPROPRIATE
PAYMENT AND BENEFIT LEVELS UNDER VARIOUS CIRCUMSTANCES
The Agreement was crafted based on an analysis of
practices in our Peer Group at the time and the market generally, presented by the Compensation Committee’s independent
compensation consultant at the time. The Compensation Committee regularly reviews the Agreement to ensure it remains consistent
with the median of our most current Peer Group.
|
92 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
| Executive
Compensation |
|
| |
|
| CEO Pay Ratio |
|
MATERIAL PRECONDITIONS TO
RECEIVING PAYMENTS OR BENEFITS
As a condition to receiving severance benefits upon
a termination by KBR (except for “cause”) or a resignation by the executive for “good reason” or retirement,
an executive must first execute a release and full settlement agreement. The Agreement also contains customary confidentiality,
non-competition, and non-solicitation covenants, as well as a mandatory arbitration provision. In addition, the Agreement contains
a clawback provision that allows KBR to recover any benefits paid under the Agreement if we determine within two years after the
executive’s termination of employment that the executive’s employment could have been terminated for cause.
No Employment Agreements
KBR has no employment agreements with its NEOs.
CEO Pay Ratio
Presented below is the ratio of the annualized total
compensation of Mr. Bradie, our CEO, to the annual total compensation of our median employee (excluding the CEO).
Pay Ratio Methodology and
Calculation
DETERMINATION OF EMPLOYEE
POPULATION
We determined that, as of January 3, 2025, our employee
population consisted of approximately 36,957 individuals working for KBR and its consolidated subsidiaries, with approximately
27,314 of these individuals located in the U.S. This population consisted of our full-time, part-time, external, and temporary
employees (we do not have seasonal workers) and excluded approximately 10,613 employees working in joint ventures that are not
consolidated subsidiaries of KBR and who are not otherwise our employees. This population also excluded approximately 589 external
individuals working for KBR, whose take home pay we do not control. As permitted by SEC rules, we excluded 100% of the employees
in the following non-U.S. jurisdictions: 11 employees in the Czech Republic, 7 employees in Malaysia, 3 employees in each of Norway
and Somalia, 2 employees in each of Italy and Latvia, and 1 employee in each of France, Hungary, Kazakhstan, Lithuania, Portugal,
Puerto Rico, and Russia. As a result, the total number of employees used to identify the median of the annual total compensation
of all our employees was approximately 36,922, of which approximately 16,703 were located in the U.S.
CONSISTENTLY APPLIED COMPENSATION
MEASURE
We used total cash compensation for 2024 (without
making any cost-of-living adjustment) as a consistently applied compensation measure to identify our median employee. Total cash
compensation is a relatively broad measure of pay. Short-term and long-term equity-based incentives were not considered since
such incentives are not broad-based and including them would not substantially affect the determination of our median employee.
We chose not to use earnings reported to the Internal Revenue Service on Form W-2 for employees in the U.S. because those amounts
would include equity-based compensation and W-2 earnings is not a measure that can be easily applied consistently to employees
outside the U.S. Compensation of employees who were on unpaid leave of absence was annualized.
DATA GATHERING
While SEC rules allow for statistical sampling or
“other reasonable methods,” we collected data for all employees. It would have been costly to create a subgroup that
was representative of the entire employee population given that the non-U.S. employees included in the calculation are based in
approximately 53 countries.
PAY RATIO CALCULATION
After we identified our median employee, we calculated
all the elements of such employee’s compensation for 2024 in accordance with the requirements of Item 402(c)(2)(x) of
Regulation S-K, resulting in annual total compensation of $75,263. The annual total compensation of our CEO was $12,556,945, as
reported in the “Total” column of our 2024 Summary Compensation Table included in this proxy statement.
Based on this information, for 2024 the ratio of the
annual total compensation of our CEO to the median of the annual total compensation of all employees was reasonably estimated
to be 167:1.
The SEC’s rules for identifying the median employee
and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies,
to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation
practices. The pay ratio reported by other companies may not be comparable to KBR’s pay ratio, as other companies have different
employee populations and compensation practices and may utilize different methodologies, exclusions, estimates, and assumptions
in their calculations.
| |
2025
Proxy Statement 93
|
| |
|
Table of Contents
|
Executive
Compensation |
| |
|
| |
Pay Versus Performance |
Pay Versus Performance
Pay Versus Performance Table
As required by Section 953(a) of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information
about the relationship between executive compensation and certain financial performance measures of the Company. For more information,
refer to the “Compensation Discussion and Analysis” section of this proxy statement.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Average
Summary |
|
Average |
|
Value
of initial fixed
$100 investment based on: |
|
|
|
|
Year
(a) |
|
Summary
Compensation
Table Total
for CEO(1)
($)(b) |
|
Compensation
Actually Paid
to CEO(2)
($)(c) |
|
Compensation
Table Total for
non-CEO
NEOs(3)
($)(d) |
|
Compensation
Actually Paid to
non-CEO
NEOs(4)
($)(e) |
|
Company
TSR(5)
($)(f) |
|
Peer
Group
Total
Shareholder
Return(6)
($)(g) |
|
Net
Income
(Loss)(7)
($)(h) |
|
Company-Selected
Performance
Measure: Adj.
EPS(8)
($)(i) |
| 2024 |
|
12,556,945 |
|
13,432,658 |
|
3,147,439 |
|
3,317,203 |
|
204.78 |
|
201.70 |
|
381,000,000 |
|
3.34 |
| 2023 |
|
12,659,920 |
|
15,968,454 |
|
3,017,505 |
|
3,602,870 |
|
190.41 |
|
175.48 |
|
(261,000,000) |
|
2.91 |
| 2022 |
|
12,617,035 |
|
16,957,757 |
|
2,943,662 |
|
3,716,852 |
|
179.76 |
|
143.37 |
|
192,000,000 |
|
2.71 |
| 2021 |
|
12,024,347 |
|
22,501,119 |
|
2,595,828 |
|
3,781,778 |
|
160.59 |
|
131.72 |
|
35,000,000 |
|
2.43 |
| 2020 |
|
9,864,381 |
|
9,222,322 |
|
2,218,991 |
|
2,138,848 |
|
103.16 |
|
103.03 |
|
(42,000,000) |
|
1.74 |
| (1) |
The amounts in this column
are the amounts of total compensation reported for Mr. Bradie for each corresponding year in the “Total”
column of the Summary Compensation Table on page 81. |
| (2) |
The amounts in this column represent the
amount of “Compensation Actually Paid” to Mr. Bradie, as computed in accordance with Item 402(v) of
Regulation S-K. The amounts do not reflect the actual amount of compensation earned by or paid to Mr. Bradie during
the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments
were made to Mr. Bradie’s total compensation for each year to determine the “Compensation Actually Paid”: |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Year |
|
Reported
Summary
Compensation table
total for CEO
($) |
|
Reported
value of
equity awards(a)
($) |
|
Equity
award
adjustments(b)
($) |
|
Reported
change
in the actuarial
present value of
pension benefits(c)
($) |
|
Pension
benefit
adjustments
($) |
|
Compensation
Actually Paid
to CEO
($) |
| 2024 |
|
12,556,945 |
|
(4,819,548) |
|
5,695,261 |
|
— |
|
— |
|
13,432,658 |
| 2023 |
|
12,659,920 |
|
(4,630,378) |
|
7,938,912 |
|
— |
|
— |
|
15,968,454 |
| 2022 |
|
12,617,035 |
|
(4,641,028) |
|
8,981,750 |
|
— |
|
— |
|
16,957,757 |
| 2021 |
|
12,024,347 |
|
(4,256,264) |
|
14,733,036 |
|
— |
|
— |
|
22,501,119 |
| 2020 |
|
9,864,381 |
|
(3,614,585) |
|
2,972,526 |
|
— |
|
— |
|
9,222,322 |
| (a) |
This column reflects the
grant date fair value of equity awards, which are the amounts reported in the “Stock Awards” column in the Summary
Compensation Table for the applicable year. |
| (b) |
The equity award adjustments for each applicable
year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any
equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount
of change as of the end of the applicable fiscal year (from the end of the prior fiscal year) in fair value of any awards
granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that
are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior
years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal
year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting
conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year;
and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior
to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of
total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ
from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
| |
|
|
94 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
| Executive
Compensation |
|
| |
|
| Pay Versus Performance |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Year |
|
Year-end
fair
value of equity
awards granted
in year
($) |
|
Year
over year
change in fair
value of
outstanding and
unvested equity
awards
($) |
|
Fair
value as of
vesting date of
equity awards
granted and
vested in the year
($) |
|
Year
over year
change in fair
value of equity
awards granted
in prior years
that vested
in the year
($) |
|
Fair
value at
the end of the
prior year of
equity awards
that failed to
meet vesting
conditions
in the year
($) |
|
Value
of dividends
or other earnings
paid on stock or
option awards
not otherwise
reflected in fair
value or total
compensation
($) |
|
Total
equity
award
adjustments
($) |
| 2024 |
|
5,592,210 |
|
(143,980) |
|
— |
|
221,880 |
|
— |
|
25,151 |
|
5,695,261 |
| 2023 |
|
5,608,767 |
|
2,118,155 |
|
— |
|
163,948 |
|
— |
|
48,042 |
|
7,938,912 |
| 2022 |
|
5,553,263 |
|
3,224,991 |
|
— |
|
131,229 |
|
— |
|
72,267 |
|
8,981,750 |
| 2021 |
|
8,574,868 |
|
6,082,602 |
|
— |
|
7,120 |
|
— |
|
68,446 |
|
14,733,036 |
| 2020 |
|
4,852,517 |
|
(1,404,632) |
|
— |
|
(551,461) |
|
— |
|
76,102 |
|
2,972,526 |
| (c) |
Mr. Bradie does not
participate in any KBR-sponsored defined benefit or actuarial pension plans. |
| (3) |
The amounts in this column
represent the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Bradie) in the “Total”
column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Bradie)
included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2024, Messrs. Bright,
Ibrahim, and Sopp and Ms. Galindo; (ii) for 2022 and 2023, Messrs. Bright, Ibrahim, and Sopp
and Ms. Myles; (iii) for 2021, Messrs. Bright, Ibrahim, Kelly, and Sopp and Ms. Akerson; and (iv) for
2020, Messrs. Bright, Ibrahim, and Sopp and Ms. Akerson. |
| (4) |
The amounts in this column represent the
average amount of “Compensation Actually Paid” to the NEOs as a group (excluding Mr. Bradie), as computed
in accordance with Item 402(v) of Regulation S-K. The amounts do not reflect the actual average amount of compensation
earned by or paid to the NEOs as a group (excluding Mr. Bradie) during the applicable year. In accordance with the requirements
of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs
as a group (excluding Mr. Bradie) for each year to determine the “Compensation Actually Paid,” using the
same methodology described above in Note 2: |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Year |
|
Average
reported
Summary
Compensation
Table total for
non-CEO named
executive officers
($) |
|
Average
reported
value of equity
awards(a)
($) |
|
Average
equity
award
adjustments(b)
($) |
|
Average
reported
change in the
actuarial
present value of
pension benefits(c)
($) |
|
Average
pension
benefit adjustments
($) |
|
Average
Compensation
Actually Paid to
non-CEO named
executive officers
($) |
| 2024 |
|
3,147,439 |
|
(850,524) |
|
1,020,288 |
|
— |
|
— |
|
3,317,203 |
| 2023 |
|
3,017,505 |
|
(750,463) |
|
1,335,828 |
|
— |
|
— |
|
3,602,870 |
| 2022 |
|
2,943,662 |
|
(762,467) |
|
1,535,657 |
|
— |
|
— |
|
3,716,852 |
| 2021 |
|
2,595,828 |
|
(721,882) |
|
1,907,832 |
|
— |
|
— |
|
3,781,778 |
| 2020 |
|
2,218,991 |
|
(628,951) |
|
548,808 |
|
— |
|
— |
|
2,138,848 |
| (a) |
This column reflects the
average grant date fair value of equity awards, which are the amounts reported in the “Stock Awards” column in
the Summary Compensation Table for the applicable year, for the NEOs as a group (excluding Mr. Bradie). |
| (b) |
The amounts deducted or added in calculating
the total average equity award adjustments are as follows: |
| |
|
| |
2025
Proxy Statement 95
|
| |
|
Table of Contents
|
Executive
Compensation |
| |
|
| |
Pay Versus Performance |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Year |
|
Average
year-end fair
value of equity
awards
granted in
year
($) |
|
Year
over year
average change
in fair value of
outstanding and
unvested equity
awards
($) |
|
Average
fair
value as of
vesting date
of equity awards
granted and
vested in the year
($) |
|
Year
over year
average change
in fair value of
equity awards
granted in prior
years that vested
in the year
($) |
|
Average
fair value
at the end of the
prior year of equity
awards that failed
to meet vesting
conditions in the year
($) |
|
Average
value of
dividends or
other earnings
paid on stock or
option awards
not otherwise
reflected in fair
value or total
compensation
($) |
|
Total
average
equity award
adjustments
($) |
| 2024 |
|
986,895 |
|
(25,383) |
|
— |
|
49,196 |
|
— |
|
9,580 |
|
1,020,288 |
| 2023 |
|
909,059 |
|
362,354 |
|
— |
|
56,203 |
|
— |
|
8,212 |
|
1,335,828 |
| 2022 |
|
912,352 |
|
605,404 |
|
— |
|
7,066 |
|
— |
|
10,835 |
|
1,535,657 |
| 2021 |
|
1,239,559 |
|
802,342 |
|
— |
|
2,557 |
|
(147,871) |
|
11,245 |
|
1,907,832 |
| 2020 |
|
844,368 |
|
(213,742) |
|
— |
|
(93,908) |
|
— |
|
12,090 |
|
548,808 |
| (c) |
Our NEOs do not participate
in any KBR-sponsored defined benefit or actuarial pension plans. |
| (5) |
Cumulative total shareholder
return (“TSR”) is the cumulative TSR on shares of our common stock assuming an investment of $100 on December
31, 2019, and reinvestment of all dividends. |
| (6) |
The peer group used for this purpose is
the Peer Group used by the Company for benchmarking purposes as discussed in the “Compensation Discussion
and Analysis” section of this proxy statement. Peer group TSR was calculated on a market capitalization weighted
basis according to the respective issuers’ stock market capitalization at the beginning of each period for which
a return is indicated. TSR for both the Company and the peer group is based on an initial $100 investment, measured on
a cumulative basis from the market close on December 31, 2019, through and including January 3, 2025. TSR calculations
reflect reinvestment of dividends.
The 2024 Peer Group is composed of the
following companies: BAE Systems plc, Booz Allen Hamilton Holding Corporation, CACI International Inc., Conduent
Incorporated, Dover Corporation, Flowserve Corporation, Fluor Corporation, Gartner, Inc., Hubbell Incorporated, Huntington
Ingalls Industries, Inc., Jacobs Solutions Inc., L3Harris Technologies, Inc., Leidos Holdings, Inc., Parsons Corporation,
Science Applications International Corporation, Teradata Corporation, Tetra Tech, Inc., Textron Inc., and The Timken Company.
ManTech International Corporation, which was a constituent of our 2023 Peer Group, was taken private and ceased being
publicly traded in September 2022, and it therefore was excluded in determining our peer group TSR for 2023 (and the prior
years presented). As a result, the 2024 Peer Group and 2023 Peer Group were the same for the purpose of determining our
peer group TSR.
|
| (7) |
The amounts reported represent the amount
of GAAP net income (loss) reflected in the Company’s audited financial statements for the applicable fiscal year. |
| (8) |
Adjusted EPS or adjusted earnings per share
is a non-GAAP financial measure. See the section titled “Non-GAAP Financial Information” at
the end of this proxy statement for further information, including reconciliation of adjusted EPS to the most directly comparable
GAAP measure. |
| |
|
|
96 2025
Proxy Statement
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www.kbr.com |
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|
Table of Contents
| Executive
Compensation |
|
| |
|
| Pay Versus Performance |
|
Pay Versus Performance Relationship
Disclosures
We believe that, in a highly competitive market for
executive talent, our compensation programs encourage and promote our compensation objectives with a strong emphasis on pay for
performance and that they serve our stakeholders’ interests well.
The following charts illustrate the relationship between
the “Compensation Actually Paid” and the financial performance measures set forth in the Pay Versus Performance table
on page 94: TSR, peer group TSR, net income (loss) and adjusted EPS.
The Company identified adjusted EPS as the Company-Selected
Measure, the most important performance measure used by the Company to link compensation actually paid to the Company’s
NEOs to Company performance for the most recently completed fiscal year. The Company selected adjusted EPS because strong EPS
generally increases the value of our stock, among other benefits, which we believe helps to align the interests of our NEOs and
our stockholders. Adjusted EPS is the most heavily weighted performance measure under our 2024 STI plan, with Company performance
on this measure driving 45% of the plan funding for the 2024 STI plan, as described in greater detail in our Compensation Discussion
and Analysis.
Compensation actually paid
versus total shareholder return
Compensation actually paid
versus net income (loss)
| |
2025
Proxy Statement 97
|
| |
|
Table of Contents
|
Executive
Compensation |
| |
|
| |
Pay Versus Performance |
Compensation actually paid
versus adjusted EPS
Important Financial Performance
Measures
For 2024, the most important financial performance
measures (including the Company-Selected Measure) that we used to link executive compensation actually paid to the NEOs to our
performance, which are the performance metrics the Committee chose for our short-term and long-term incentive plans and are described
in more detail in the “ Compensation Discussion and Analysis” section of this proxy statement, are as follows,
listed on an unranked basis:
| |
● |
Adjusted EPS |
| |
● |
Adjusted OCF |
| |
● |
Relative TSR |
| |
● |
Book-to-bill |
| |
● |
Sustainability |
Adjusted EPS and adjusted OCF are non-GAAP financial
measures. See the section titled “Non-GAAP Financial Information” at the end of this proxy statement for further
information, including reconciliations of adjusted EPS and adjusted OCF to the most directly comparable GAAP measures.
|
98 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
| Executive
Compensation |
|
| |
|
| Security Ownership of Certain
Beneficial Owners and Management |
|
Security Ownership of Certain
Beneficial Owners and Management
The table below sets forth certain information regarding
the beneficial ownership of KBR’s common stock by persons known by KBR to beneficially own more than five percent of its
outstanding common stock and is based on the most recent Statement on Schedule 13G or 13D or amendment thereto filed by each such
person with the SEC, except as otherwise known to KBR. The table also sets forth the beneficial ownership of KBR’s common
stock by each of our NEOs and directors and one new director nominee and by all our directors, the new director nominee, and executive
officers as a group as of March 1, 2025. To our knowledge, except as otherwise noted in the footnotes to this table or as provided
by applicable community property laws, each individual has sole voting and investment power with respect to the shares of common
stock listed in the second column below as beneficially owned by the individual.
| |
|
Shares
of KBR Common Stock Beneficially Owned |
| Name
and Address of Beneficial Owner(1) |
|
Number
of Shares(2) |
|
Percentage
of Class(3) |
FMR LLC(4)
245 Summer Street, Boston, Massachusetts 02210 |
|
13,853,395 |
|
10.460% |
The Vanguard
Group(5)
100 Vanguard Boulevard, Malvern, Pennsylvania 19355 |
|
13,044,986 |
|
9.850% |
BlackRock, Inc.(6)
50 Hudson Yards, New York City, New York 10001 |
|
12,290,860 |
|
9.281% |
| Stuart J. B.
Bradie(7) |
|
732,281 |
|
* |
| W. Byron Bright,
Jr.(7) |
|
73,489 |
|
* |
| Sonia Galindo(7) |
|
17,471 |
|
* |
| J. Jay Ibrahim(7) |
|
103,709 |
|
* |
| Mark W. Sopp(7) |
|
167,224 |
|
* |
| Joseph Dominguez(7) |
|
2,579 |
|
* |
| Lynn A. Dugle(7)(8) |
|
20,080 |
|
* |
| Nchacha E. Etta(7) |
|
2,625 |
|
* |
| General Lester
L. Lyles, USAF (Ret.)(7)(8) |
|
63,653 |
|
* |
| Sir John A. Manzoni
KCB(7) |
|
9,723 |
|
* |
| Lt. General Wendy
M. Masiello, USAF (Ret.)(7) |
|
41,879 |
|
* |
| Jack B. Moore(7) |
|
42,335 |
|
* |
| Ann D. Pickard(7) |
|
51,102 |
|
* |
| Carlos A. Sabater(7) |
|
13,381 |
|
* |
| Lewis F. Von
Thaer(9) |
|
0 |
|
* |
| ALL DIRECTORS
AND EXECUTIVE OFFICERS AS A GROUP (18 PERSONS)(7)(8)(9) |
|
1,472,176 |
|
1.112% |
| |
|
| |
2025
Proxy Statement 99
|
| |
|
Table of Contents
|
Executive
Compensation |
| |
|
| |
Security Ownership of Certain
Beneficial Owners and Management |
| * |
Less than one percent
(1%). |
| (1) |
The address of each of the NEOs and directors
and one new director nominee is c/o KBR, Inc., 601 Jefferson Street, Suite 3400, Houston, Texas 77002. |
| (2) |
Beneficial ownership means the sole or shared
power to vote, or to direct the voting of, shares of KBR common stock, or investment power with respect to KBR common stock,
or any combination of the foregoing. Each director and new director nominee and executive officer beneficially own less than
1% of the outstanding shares of KBR common stock. |
| (3) |
Percentage of class amounts are based on
132,435,609 shares of KBR’s common stock outstanding as of January 3, 2025. Percentages of class ownership presented
herein may differ from amounts reported in the applicable Schedule 13G or 13G/A filed with the SEC by the relevant principal
shareholder because the number of shares of KBR’s common stock outstanding as of January 3, 2025, known by such principal
shareholders may differ from the number disclosed in KBR’s Annual Report on Form 10-K for the fiscal year ended
January 3, 2025. |
| (4) |
Based solely on an amendment to Schedule
13G filed February 12, 2025, FMR LLC is deemed to be the beneficial owner of 13,853,395 shares as a result of being a parent
holding company or control person in accordance with §240.13d-1(b)(1)(ii)(G). |
| (5) |
Based solely on an amendment to Schedule
13G filed February 13, 2024, The Vanguard Group is deemed to be the beneficial owner of 13,044,986 shares as a result of being
an investment adviser in accordance with §240.13d-1(b)(1)(ii)(E). |
| (6) |
Based solely on an amendment to Schedule
13G filed January 24, 2024, BlackRock, Inc. is deemed to be the beneficial owner of 12,290,860 shares as a result of being
a parent holding company or control person in accordance with §240.13d-1(b)(1)(ii)(G). |
| (7) |
Does not
include the following unvested restricted stock units as to which the holder has no voting power and no investment power, but
which convert to common stock on a 1-to-1 ratio upon vesting, which for some restricted stock units requires
that certain performance measures be met: Mr. Bradie, 101,814; Mr. Bright, 16,687; Ms. Galindo, 14,058; Mr. Ibrahim, 15,812;
Mr. Sopp, 22,711; and all executive officers and directors as a group, 225,568 . |
| (8) |
Includes restricted stock units held in the
nonqualified elective deferral plan for non-executive directors in the following amounts: 14,617 held by Ms. Dugle
and 38,455 held by General Lyles. |
| (9) |
All directors and executive officers as a
group refers to the current ten directors (Ms. Dugle, Lt. General Masiello, Ms. Pickard, General Lyles, Sir John Manzoni KCB,
and Messrs. Bradie, Dominguez, Etta, Moore, and Sabater), the new director nominee (Mr. Von Thaer), and the current seven
executive officers, other than Mr. Bradie (Ms. Galindo, Ms. Myles, Ms. Vasquez, and Messrs. Bright, Conlon, Ibrahim, and Sopp). |
| |
|
|
100 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
Audit Committee Report
KBR’s Audit Committee operates under a written
charter adopted by the Board that outlines the responsibilities of, and practices followed by, the Committee. A copy of the Charter
is available on KBR’s website at kbr.com/en/who-we-are/our-company/corporate-governance. We review and reassess the charter
annually and recommend any changes to the Board of Directors for approval. We met 10 times in 2024, and this report summarizes
the Committee’s activities during those meetings.
KBR’s management is responsible for preparing
KBR’s financial statements, and the principal independent accountants are responsible for auditing those financial statements.
The Audit Committee’s role is to provide oversight of management and to appoint, compensate, retain, and oversee the work
of the principal independent accountants.
Primary Responsibilities and 2024
Actions
The Audit Committee assists the Board in overseeing
the accounting and financial reporting process and integrity of the Company’s financial statements; the Company’s
compliance with legal and regulatory requirements; and the performance of the internal audit function, internal accounting controls,
disclosure controls and procedures, and internal control over financial reporting. In 2024, in fulfilling these responsibilities,
among other things, we:
| |
● |
Met with senior members of the Company’s
financial management team at each meeting; |
| |
● |
Held separate private sessions, during regularly scheduled meetings,
with each of the Company’s Chief Financial Officer, Chief Accounting Officer, General Counsel, and Head of Internal
Audit, providing an opportunity for candid discussions regarding financial management, legal, accounting, auditing, and internal
controls matters; |
| |
● |
Reviewed and discussed with management the Company’s earnings
releases and the financial results for each quarterly period and for the fiscal year as set out in the Company’s Forms
10-Q and Form 10-K prior to filing with the SEC, with particular attention to quality financial statements and internal audit; |
| |
● |
Received periodic reports on management’s process to assess
the adequacy of the Company’s system of internal control over financial reporting, the framework used to make the assessment,
and management’s conclusions on the effectiveness of the Company’s internal control over financial reporting; |
| |
● |
Reviewed and discussed with senior management significant risks
and exposures identified by management and the Company’s processes related to risk assessment and management, including
the Company’s enterprise risk management process; |
| |
● |
Reviewed and discussed with senior management, including the Head
of Internal Audit, prior period adjustments and significant changes in estimates of costs to complete certain projects, the
evaluation of the Company’s internal controls over financial reporting, and the quality of the Company’s financial
reporting; |
| |
● |
Met with the General Counsel and Chief Compliance Officer to receive
status reports on compliance matters and to discuss the effectiveness of the Company’s compliance program; |
| |
● |
Reviewed and discussed with senior management the transition of
the Chief Accounting Officer; |
| |
● |
Reviewed and discussed with senior management updates on integration
and synergies associated with acquisitions, SOX compliance, and accounting techniques taking into account Generally Accepted
Accounting Principles and Cost Accounting Standards where appropriate for efficiencies; |
| |
● |
Reviewed and discussed with senior management critical accounting
policies and estimates including contract revenue, purchase price allocation, goodwill impairment testing, deferred taxes,
pensions, and legal and other contingent matters; and |
| |
● |
Reviewed the Company’s internal audit plan, received individual
audit reports, discussed with management measures implemented in response to internal audits, and reviewed the performance
of the Company’s internal audit function. |
| |
2025
Proxy Statement 101
|
| |
|
Table of Contents
|
Audit Committee
Report |
| |
|
| |
Primary Responsibilities and 2024 Actions |
Oversight
of Independent Auditors
In addition to the
responsibilities described on the previous page, the Audit Committee oversees the audits of the Company’s financial
statements and the independence, qualifications, and performance of the independent auditors. In fulfilling our oversight
role for the year ended January 3, 2025, we reviewed and discussed with KPMG LLP, the Company’s independent
auditors and principal independent accountants, as well as with senior members of the Company’s financial management
team, the overall audit scope and plan, the results of the external audit, and evaluations by KPMG LLP of the
Company’s internal controls over financial reporting, the quality of the Company’s financial reporting, the
effectiveness of the Company’s disclosure controls and procedures, and critical audit matters. KPMG LLP also
reported to us on significant accounting judgments and estimates made by management in preparing the financial statements, as
well as their analysis and assessment of significant risks. We also discussed with KPMG LLP the matters required to be
communicated pursuant to the standards promulgated by the Public Company Accounting Oversight Board and the SEC.
We discussed with KPMG LLP their assessment
of their independence, including with respect to the tax services provided by them, and received the written communications required
by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications
with us concerning independence.
2024 Audited
Financial Statements
Based on our review of
the audited financial statements, discussions with management and with KPMG LLP, and our review of
KPMG LLP’s written communications, we recommended to the Board of Directors that the audited financial statements
be included in KBR’s Annual Report on Form 10-K for the fiscal year ended January 3, 2025, for filing with the SEC. Our
recommendation considers our review of that firm’s qualifications as independent accountants for the Company. Our
review also included matters required to be considered under SEC rules on auditor independence, including the nature and
extent of non-audit services. In our judgment, the nature and extent of non-audit services performed by KPMG LLP during
the year did not impair the firm’s independence.
After discussions with management, considering
KPMG LLP’s historical and recent performance of KBR’s audit, the capabilities and performance of the audit team,
and KPMG LLP’s independence, the Committee concluded that it would be in the best interests of KBR and its stockholders
to retain KPMG LLP to serve as the independent registered public accounting firm to audit the consolidated financial statements
for KBR for 2025 and recommends that such appointment be ratified by stockholders at the 2025 annual meeting.
Respectfully submitted,
The Audit Committee of Directors
Carlos A. Sabater, Chair
Nchacha E. Etta
Sir John A. Manzoni KCB
March 12, 2025
Approved Principal
Accountant Fees and Services
The following table presents
the pre-approved fees for audit services rendered by KPMG for the audit of our annual financial statements for the 2024 and
2023 fiscal years ended January 3, 2025, and December 29, 2023, respectively, and fees billed or expected to be billed for
audit-related, tax and all other services rendered by KPMG during those periods.
| Thousands of dollars | |
| 2024 | | |
| 2023 |
| Audit fees(1) | |
$ | 5,881 | | |
$ | 5,786 |
| Audit-related fees | |
| – | | |
| – |
| Tax fees(2) | |
| 295 | | |
| 244 |
| All other fees | |
| 102 | | |
| 30 |
| TOTAL | |
$ | 6,278 | | |
$ | 6,060 |
| (1) |
Audit fees represent
the pre-approved aggregate fees for professional services rendered by KPMG for the integrated audit of our annual
financial statements for the 2024 and 2023 fiscal years ended January 3, 2025, and December 29, 2023,
respectively. Audit fees also include the audits of many of our subsidiaries regarding compliance with statutory requirements
in foreign countries and review of registration statements. |
| (2) |
Tax fees consist of the aggregate fees for professional services
rendered by KPMG for federal, state, and international tax compliance and advisory services. The amount presented for 2023
has been updated to reflect actual fees paid in 2023. |
|
102 2025
Proxy Statement
|
www.kbr.com |
| |
|
Table of Contents
| Audit
Committee Report |
|
| |
|
| Proposal No. 3 |
|
PRE-APPROVAL POLICY
The Audit Committee has established a written pre-approval
policy requiring the Audit Committee to approve all services to be provided by KPMG and all audit services provided by other independent
accountants. The policy provides that all audit, audit-related, and tax services to be provided by KPMG must be described in a
written plan submitted to the Audit Committee annually for pre-approval. In addition, pre-approval by either the Audit Committee,
its Chair, or another Audit Committee member designee is required for (a) any fees for audit, audit-related, or tax services to
be provided by KPMG that will exceed $150,000 and were not submitted for annual pre-approval and (b) fees for all other types
of services that will exceed $50,000. Pre-approval by the Audit Committee is required for any fees for audit, audit-related, tax
or other services that will exceed $250,000.
The policy also provides that all audit services
to be provided by independent public accountants other than KPMG must be described in writing and presented to the Audit Committee
by our Chief Accounting Officer annually for pre-approval. Any audit services not included in the annual pre-approved plan must
be approved in the same manner as unplanned audit, audit-related, and tax services to be provided by KPMG.
As permitted by the SEC, to ensure prompt handling
of unexpected matters, our policy allows the Audit Committee to delegate pre-approval authority to the Chair or another designated
member of the Audit Committee. Any pre-approval decision not made by the entire Audit Committee will be reported to the Audit
Committee at the next regularly scheduled meeting following such decision. All services provided by KPMG have been pre-approved
in accordance with these procedures.
| PROPOSAL
NO. 3 |
Ratify
the Appointment of Independent Registered Public Accounting Firm |
 |
The Audit Committee of the Board of Directors
recommends that you vote FOR ratification
of the appointment of KPMG LLP as our independent registered public accounting firm to audit the consolidated financial
statements for KBR as of and for the year ending January 2, 2026. All proxies will be so voted unless a stockholder specifies
otherwise. |
KPMG LLP has audited
the financial statements of KBR and its predecessor since 2005. A resolution will be presented at the Annual Meeting of
Stockholders to ratify the appointment by the Audit Committee of the Board of Directors of KPMG as independent registered
public accounting firm to audit the consolidated financial statements of KBR as of and for the fiscal year ending January
2, 2026. KPMG LLP has advised that neither the firm nor any member of the firm has any direct financial interest or any
material indirect interest in KBR. Also, during at least the past three years, neither the firm nor any member of the firm
has had any connection with KBR in the capacity of promoter, underwriter, voting trustee, director, officer or
employee.
Representatives of KPMG LLP are expected to
be present at the Annual Meeting of Stockholders, will have the opportunity to make a statement, and will be available to respond
to appropriate questions from stockholders.
As a matter of good corporate governance, the Audit
Committee submits the selection of the independent registered public accounting firm to our stockholders for ratification. The
proposal to ratify the appointment of KPMG LLP will be approved if it receives the affirmative vote of a majority of the
shares of common stock present at the Annual Meeting of Stockholders. If our stockholders do not ratify the appointment of KPMG LLP,
the Audit Committee may reconsider its selection of KPMG LLP as our independent registered public accounting firm for the
fiscal year ending January 2, 2026, but the Audit Committee may also elect to retain KPMG LLP. Even if the selection of KPMG LLP
is ratified, the Audit Committee in its discretion may appoint a different independent registered public accounting firm at any
time during the year if the Audit Committee determines that such change would be appropriate.
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Proxy Statement 103
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Table of Contents
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Audit Committee
Report |
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Proposal No. 4 |
| PROPOSAL
NO. 4 |
Approval of the
Adoption of the Amended and Restated Certificate of Incorporation to,
Among Other Things, Limit the Liability of Certain Officers
of the Company as Permitted by Recent Amendments to Delaware Law |
|
The Board of Directors recommends that you vote
FOR the approval of the adoption of the Amended and Restated Certificate
of Incorporation to, among other things, limit the liability of certain officers of the Company as permitted by recent amendments
to Delaware law. |
Currently,
Article Seventh of our Amended and Restated Certificate of Incorporation (the “Charter”) limits the monetary
liability of directors for certain fiduciary duty breaches as allowed under Section 102(b)(7) of the Delaware General
Corporation Law (the “DGCL”) Prior to 2022, the DGCL did not allow for similar limitation of personal liability
of officers for monetary damages. Effective August 1, 2022, Section 102(b)(7) of the DGCL was amended to permit Delaware
corporations to extend the exculpation provision under Section 102(b)(7) to cover certain senior officers, in addition to
directors. For both directors and officers, the liability limitation does not apply to breaches of the duty of loyalty, acts
or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in
which the director or officer derived an improper personal benefit. In addition, for officers, amended Section 102(b)(7) only
permits exculpation for direct claims brought by stockholders (as opposed to derivative claims made by stockholders on behalf
of the company).
In light of this update, we are proposing to amend
our Certificate of Incorporation to extend the exculpation provision in Article Seventh to cover certain senior officers to the
extent permitted under amended Section 102(b)(7) of the DGCL. As a result, both directors and officers would be protected from
monetary liability for fiduciary duty breaches to the extent allowed under the DGCL. The description of the proposed amendment
and the applicable provisions of the DGCL contained herein are summaries and are qualified in their entirety by the text of the
proposed amendment, substantially the form of Appendix B and the full text of the applicable provisions of the DGCL.
Text of the Proposed Amendment (with new text
underlined):
SEVENTH: No director or officer of the Corporation shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach
of fiduciary duty as a director or officer of the Corporation; provided, however, that this Article SEVENTH shall
not eliminate or limit the liability of such a director or officer (i) for any breach of such director’s or officer’s
duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) with respect to directors, under Section 174 of the DGCL, as the same exists or
as such provision may hereafter be amended, supplemented or replaced, (iv) for any transaction from which such director or
officer derived an improper personal benefit, or (v) with respect to officers, in any action by or in the right of the
Corporation. If the DGCL is amended after the filing of this Certificate of Incorporation to authorize corporate action further
eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent
permitted by such law, as so amended. Any repeal or modification of this Article SEVENTH, to the fullest extent permitted by applicable
law, shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the Corporation existing at the time of such repeal or modification. For the purposes of this Article SEVENTH, “officer”
shall have the meaning provided in Section 102(b)(7) of the DGCL.
The Board believes it is
important for officers to be provided with the liability limitation protections afforded under the DGCL in order to attract
and retain key executive talent. Many companies have already updated their governing documents to align with amended Section
102(b)(7) under the DGCL and we expect more companies to similarly update their governing documents this year, so our ability
to attract and retain highly qualified officer candidates may be adversely impacted if we do not also do so. Additionally,
the nature of the role of directors and officers often requires them to make decisions on crucial matters. Frequently,
directors and officers must make decisions in response to time-sensitive opportunities and challenges, which can create
substantial risk of investigations, claims, actions, suits or proceedings seeking to impose liability on the basis of
hindsight, especially in the current litigious environment and regardless of merit. In the absence of such protection,
qualified officers might be deterred from serving due to exposure to personal liability and the risk that substantial expense
will be incurred in defending lawsuits, regardless of merit. In its consideration of the proposed amendment, the Board took
into account the narrow class and type of claims for which such officers would be exculpated from liability pursuant to
amended Section 102(b)(7), the limited number of KBR officers that would be impacted and the benefits the Board believes
would accrue to KBR by providing exculpation in accordance with DGCL Section 102(b)(7). For the reasons stated above, on
February 20, 2025 our Board unanimously determined that the proposed amendment to the Charter is advisable and in the best
interests of KBR and its stockholders, and has authorized and approved the proposed amendment and directed that it be
considered at the Annual Meeting and recommended to KBR’s stockholders to vote FOR the approval of the amendments to
the Charter.
If Proposal 4 is approved by our stockholders,
the changes to the Charter described in this Proposal 4 would become effective upon the filing of the amended Charter with the
Delaware Secretary of State, in substantially the form of Appendix A, which we intend to do promptly following the Annual Meeting.
In accordance with the DGCL, however, the Board reserves the right to abandon or delay the filing of the Charter even if it is
approved by our stockholders. If Proposal 4 is not approved by our stockholders, Article Seventh of our Charter will remain
unchanged and in effect.
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Table of Contents
General Information About KBR’s
Annual Meeting
If your question is not addressed in this section
or elsewhere in this proxy statement, please contact KBR’s Investor Relations Department at (713) 753-5082 or (866) 380-7721.
Our principal executive office is located at 601 Jefferson Street, Suite 3400, Houston, Texas 77002, and our website address is
kbr.com. Information contained on our website, including information referred to in this proxy statement, is not to be considered
as part of the proxy solicitation material and is not incorporated into this proxy statement.
How does a virtual Annual Meeting
work?
The Annual Meeting will be completely virtual via
live webcast. There will be no physical meeting location. All stockholders as of the record date, or their duly appointed proxies,
may attend the Annual Meeting online at virtualshareholdermeeting.com/KBR2025.
Our virtual stockholder meeting format uses technology
designed to increase stockholder access, minimize health risks, reduce our environmental impact, and provide our stockholders
rights and opportunities to participate similar to those they would have at an in-person annual meeting. Holding the meeting virtually
also saves KBR and our stockholders time and money.
Stockholders will be able to hear all portions
of the official Annual Meeting as conducted by the Board, submit appropriate written questions and comments, and vote online during
the open poll portion of the Annual Meeting. We welcome your suggestions on how we can make our virtual Annual Meeting more effective
and efficient.
How to Access
the Annual Meeting as it Happens
If you are a stockholder of record and you want
to attend online and participate in the Annual Meeting, you will need the company number and the control number on your Notice
of Internet Availability or proxy card to log in. If you are a beneficial stockholder and you want to attend the meeting online,
you should log into your brokerage firm’s website and select the stockholder communications mailbox to link through to the
Annual Meeting. You also should receive written instructions from your broker, bank, or other nominee.
Online check-in will begin at 9:45 a.m. CDT. Please
allow time for online check-in procedures. If you encounter difficulties accessing the virtual meeting or during the course of
the Annual Meeting, please call the phone number that will be made available on the virtual meeting registration page 15
minutes prior to the start time of the meeting for live technical support.
If you do not comply with these procedures, you
will not be able to participate in the Annual Meeting as it happens, but you may view a webcast replay once the meeting has concluded.
Although the live webcast is available only to stockholders, we will post a webcast replay, the final report of the inspector
of election, and the answers to all stockholder questions asked in connection with the Annual Meeting on our website, kbr.com,
for at least one year.
How we will
Handle Stockholder Questions
Any stockholder may submit a maximum of two appropriate
questions online in advance of or during the Annual Meeting. We will answer as many appropriate stockholder-submitted questions
as time permits during the meeting, with each question and response not to exceed two minutes in combined duration. All questions
and discussions must be in compliance with the Rules of Conduct and Procedures of the Annual Meeting, which will be made available
to all stockholders prior to and during the Annual Meeting. The Chair and Corporate Secretary shall have sole discretion to determine
whether any question is appropriate and may interrupt or stop any inappropriate questions or otherwise take appropriate action
to ensure proper and orderly conduct at the Annual Meeting. During the Annual Meeting, proponents of the stockholder proposals
included in this proxy statement, if any, will have a dedicated call-in line so they can present their proposals. There will be
dedicated time to ask questions relating to a specific proposal following the presentation of each proposal.
How to Vote
During the Virtual Annual Meeting
If you attend the meeting, you may vote virtually
online. You will see instructions for voting when you log in. If you do not attend the meeting, your shares can be voted only
if you voted online or by telephone in advance of the meeting or if you returned a properly executed proxy.
Who is entitled to vote at the
Annual Meeting?
Holders of record at the close of business on March
17, 2025, the record date for the meeting, will be entitled to vote at the Annual Meeting. On the record date, KBR had 129,735,164 shares of common stock outstanding. Each outstanding share of common stock is entitled to one vote on each matter submitted to
the stockholders for a vote at the meeting. Fractional shares will not be voted. A complete list of stockholders entitled to vote
will be kept at our offices at the address specified above for ten days prior to the meeting.
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Table of Contents
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General Information About
KBR’s Annual Meeting |
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What constitutes a quorum? |
What constitutes a quorum?
To conduct business at the meeting, a quorum consisting
of a majority of the shares of KBR common stock issued and outstanding and entitled to vote must be in attendance or represented
by proxy. Abstentions and broker non-votes (described below) will be counted for purposes of determining whether a quorum is present
at the meeting. If a quorum is not present, the Chair of the Board or a majority of stockholders present in person (including
virtually) or represented by proxy and entitled to vote have the power to adjourn the Annual Meeting, without notice other than
an announcement at the Annual Meeting, until a quorum is present.
Am I a stockholder of record or
a street name stockholder?
If your shares are registered directly in your
name with Equiniti Trust Company, LLC, our transfer agent, you are considered the stockholder
of record of those shares. As the stockholder of record, you have the right to grant your voting proxy directly or
to vote online during the virtual Annual Meeting.
If your shares are held in a brokerage account
or through a bank, broker, or other nominee, you are considered a street name stockholder, meaning you are the beneficial
owner of shares held in “street name.” The stockholder of record for your shares is your broker, bank, or other
nominee. As the beneficial owner, you have the right to direct your bank, broker, or other nominee how to vote, and you also are
invited to attend the Annual Meeting. Your broker, bank, or other nominee will give you instructions for how to do both of those
things.
Who is soliciting my proxy to vote
my shares?
The accompanying proxy is solicited by the Board
of Directors of KBR, Inc. By executing and returning the enclosed proxy or by following the online or telephone voting instructions,
you authorize the individuals named in the proxy to represent you and vote your shares on the matters described in the Notice
of Annual Meeting of Stockholders. Your proxy will be effective for the May 14, 2025, meeting and at any adjournment or postponement
of that meeting.
How do I give my proxy if I am
a stockholder of record?
There are three ways to submit your proxy in advance
of the Annual Meeting:
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over the Internet, |
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by telephone, or |
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by mail. |
Votes submitted over the Internet or by telephone
must be received by 11:59 p.m., Eastern Daylight Time, on Tuesday, May 13, 2025.
If you give your proxy, your shares will be voted
as you specify. If you do not give instructions for a particular matter, the shares represented by your proxy will be voted in
accordance with the recommendations of the Board of Directors.
If you prefer to vote during the meeting, please
see “How does a virtual Annual Meeting work?” Even if you intend to participate in the virtual Annual Meeting, we
encourage you to grant a proxy in advance to ensure your shares are counted even if your plans change.
Can I change my vote?
You can revoke your proxy at
any time before it is voted by:
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giving notice of the revocation in writing to KBR’s Corporate Secretary at 601 Jefferson Street, Suite 3400, Houston, Texas 77002; |
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submitting another valid proxy by mail, telephone, or over the Internet that is later dated and, if mailed, is properly signed; or |
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voting in person (including virtually) at the Annual Meeting. |
How do I give voting instructions
if my shares are held in “street name” (by my broker)?
Your broker will provide you with information about
how to submit your voting instructions. Please return your instructions promptly. Your broker cannot vote your shares held in
street name without instructions from you, except with regard to the ratification of auditors. If you do not give voting instructions
for the proposals regarding the Board of Directors or executive compensation, your shares will not be voted. This is known as
a broker non-vote. Broker non-votes will not be counted or affect the outcome of any proposal except for Proposal
4. Because under Delaware law Proposal 4 requires an affirmative vote of a majority of the outstanding shares, with respect to
Proposal 4 only, broker non-votes will count as voting “against” Proposal 4.
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| General Information About
KBR’s Annual Meeting |
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| What are the voting requirements for each proposal? |
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What are the voting requirements
for each proposal?
This is an uncontested election for the Board of
Directors, meaning the number of nominees equals the number of Board seats available. In an uncontested election, the number of
votes cast “for” a nominee must exceed the number of votes cast “against” the nominee.
For each matter other than the election of directors
and Proposal 4, including the ratification of independent public accountants, the proposal will be adopted if it garners the affirmative
vote of a majority of the shares of KBR’s common stock represented in person (including virtually) or by proxy at the meeting
and entitled to vote on the matter. With respect to Proposal 4 only, the proposal will be adopted if it garners the affirmative
vote of a majority of the outstanding shares of KBR’s common stock. There are no cumulative voting rights.
What happens if an incumbent director
does not get re-elected?
In accordance with Article III, Section 3
of our Bylaws, any director nominee who is not re-elected must tender his or her resignation to the Board of Directors and all
committees of the Board after the certification of the stockholder vote. The Nominating and Corporate Governance Committee would
then assess whether it is appropriate for such individual to continue to serve as a director and would make its recommendation
to the Board of Directors. The Board of Directors will act on a tendered resignation and publicly disclose its decision and rationale
within 120 days following the certification of the stockholder vote.
What happens if a new director
nominee does not get elected?
If a new director nominee is not elected, then
that seat on the board will remain vacant. In accordance with Article III, Section 4 of our Bylaws, any newly created
directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from
death, resignation, removal, disqualification, or other cause shall be filled by the affirmative vote of a majority of the directors
in office immediately following the Annual Meeting. The director elected by the Board of Directors will hold office until the
next annual meeting of stockholders and until such director’s successor is duly elected and qualified, or until such director’s
death, resignation, or removal.
What happens if I abstain my vote
on any proposal?
Abstentions are counted as “present”
in determining whether the quorum requirement is satisfied. Abstentions from voting will not be counted in determining the outcome
of the election of directors. However, with respect to each other matter, abstentions will be included in the voting tally and
will have the same effect as a vote against the proposal.
Who is responsible for counting
the votes?
Votes cast by proxy or in person (including virtually)
at the Annual Meeting will be counted by the individuals appointed by us to act as election inspectors for the meeting. The election
inspectors and the people who tabulate the proxies, ballots, and voting tabulations that identify stockholders are independent
and are not employees of KBR.
Will any other issues be raised
at the meeting?
As of the date of this proxy statement, we know
of no business that will be presented at the 2025 Annual Meeting of Stockholders other than the matters described in this proxy
statement. If any other matters should properly come before the Annual Meeting of Stockholders for action by stockholders, proxies
will be voted on those matters in accordance with the judgment of the person or persons voting the proxies.
Why didn’t I receive a paper
copy of the proxy materials?
To expedite delivery, reduce our costs, and decrease
the environmental impact of our Annual Meeting, we used “Notice and Access,” which relies on an SEC rule that permits
us to provide proxy materials electronically. By March 31, 2025, we sent a Notice of Internet Availability of Proxy Materials
to many of our stockholders containing instructions on how to access and review our proxy materials online. If you received such
a Notice, you will not receive a printed copy of the proxy materials in the mail. The Notice also explains how to submit your
proxy to ensure your shares are voted as you wish. If you received a Notice and would like to receive a printed copy of our proxy
materials, you may request those documents by calling 1-800-579-1639, submitting a request at proxyvote.com, or sending an e-mail
to sendmaterial@proxyvote.com.
Stockholders who do not receive a Notice will continue
to receive either a paper or an emailed electronic copy of our proxy statement and Annual Report, which will be sent on or about
April 4, 2025.
We encourage you to help us reduce printing and
mailing costs by signing up for electronic delivery of KBR stockholder communications. With electronic delivery, you will receive
documents such as the Annual Report and the proxy statement as soon as they are available. Electronic delivery also can help reduce
the number of bulky documents in your files and eliminate duplicate mailings. To sign up for electronic delivery, please follow
the instructions on your proxy card to vote by Internet at proxyvote.com and, when prompted, indicate that you agree to receive
or access stockholder communications electronically in future years.
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General Information About
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Why did I receive only one copy of the proxy materials when there are two stockholders in my home? |
Why did I receive only one copy
of the proxy materials when there are two stockholders in my home?
We are sending only one copy of KBR’s annual
meeting materials to stockholders who share the same address and last name unless one of those stockholders has notified us that
they want to continue receiving multiple copies. This practice, known as “householding,” is designed to reduce duplicate
mailings and save significant printing and postage costs.
If you received a single mailing this year and
you would like to have additional copies of the Annual Report or proxy statement mailed to you, or you would like to revoke your
consent to the householding of documents for the future, please call 1-866-540-7095. You will begin to receive individual copies
within 30 days after your request.
Unfortunately, householding
for stockholders who hold their shares in street name is limited to accounts within the same bank or brokerage firm. For
example, if you and your spouse share the same last name and address, and you each have an account containing KBR stock at
two different brokerage firms, your household will receive two copies of the Notice or meeting materials — one from
each brokerage firm. To reduce the number of duplicate sets of documents your household receives, you may wish to enroll some
or all of your accounts in our electronic delivery program. See “Why didn’t I receive a paper copy of the proxy
materials?”
What if I want to introduce a proposal
or nominate a director at the 2025 meeting?
For stockholder proposals or
director nominations to have been properly submitted for presentation at our upcoming annual meeting, we must have received
notice of the proposal or nomination within the time periods set forth under Article II, Section 9 of our Bylaws. Any such
proposals and nominations must comply with Article II, Section 9 of our Bylaws. We will disregard any proposal or
nomination that does not comply with these requirements. Even if you comply with these requirements, KBR is not obligated to
include the proposed business or nominee in our proxy solicitation materials unless required to do so under applicable law,
SEC rules and regulations, or pursuant to our Bylaws.
What if I want to introduce a proposal
or nominate a director at the 2026 meeting?
If you wish to present a
proposal to be considered for inclusion in our proxy materials pursuant to Rule 14a-8 for our Annual Meeting of Stockholders
to be held in 2026, you must submit the proposal in writing to our Corporate Secretary at our corporate offices before
December 1, 2025. Proposals submitted for inclusion in our proxy materials must comply with Rule 14a-8 under the Securities
Exchange Act. If you wish to present a proposal for other business to be considered at the Annual Meeting of Stockholders to
be held in 2026, but not for inclusion in the proxy materials, you must provide written notice to our Corporate Secretary at
our corporate offices and such notice must be received between January 14, 2026, and February 13, 2026. The proposal must
comply with the requirements set forth in our Bylaws.
You also may nominate candidates at our 2026 Annual
Meeting of Stockholders in the manner provided in Article II, Section 9 of our Bylaws and in compliance with the universal
proxy rules. Such nominations must be received between January 14, 2026, and February 13, 2026, and must comply with the requirements
set forth in our Bylaws. The Bylaws also provide that a stockholder entitled to vote for the election of directors may nominate
candidates for election to the Board pursuant to the proxy access procedures in our Bylaws. Any such nomination for the 2026 annual
meeting must be made pursuant to written notice to our Corporate Secretary at our corporate offices and must be received between
December 15, 2025, and January 14, 2026.
Any proposed nominee is required to furnish other
information as KBR may reasonably require to determine whether the proposed nominee is eligible to serve as a director. At any
meeting of stockholders, the presiding officer may disregard the purported nomination of any person not made in compliance with
these procedures.
How much will this proxy solicitation
cost?
The cost of soliciting proxies will be paid by
KBR. We retained Innisfree M&A Incorporated, a firm that is independent of KBR, to aid in this solicitation. For these services,
we will pay Innisfree M&A Incorporated a retainer fee of $25,000 and reimburse all out-of-pocket expenses. Some executive
officers and other employees of KBR also may solicit proxies personally, by telephone, mail, email, or other means of communication,
if deemed appropriate, but will not receive additional compensation for these efforts. KBR will, upon request, reimburse banks,
brokers or other persons holding stock in their names or in the names of their nominees for their reasonable expenses in forwarding
proxy materials to beneficial owners of KBR common stock.
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Additional Information Available
KBR files an Annual Report on Form 10-K
with the U.S. Securities and Exchange Commission. Stockholders may obtain a copy of the Annual Report (without exhibits), without
charge, by writing to KBR’s Investor Relations Department at 601 Jefferson Street, Houston, Texas 77002. We make our
Annual Report available to stockholders at the same time and by the same methods as we distribute our proxy statement. The Annual
Report is not to be considered as a part of the proxy solicitation material or as having been incorporated by reference.
Forward Looking
Statements
This proxy statement, including our letter to stockholders,
contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some examples
include statements regarding our plans, objectives, goals, strategies, future events, future financial performance, targets and
backlog information, sustainability-related initiatives, targets and goals (including our climate-related targets) and other information
that is not historical. When used in this proxy statement, the words “believe,” “may,” “estimate,”
“continue,” “anticipate,” “intend,” “plan,” “expect” and similar expressions
are intended to identify forward-looking statements. Such statements are based upon our current expectations and various assumptions,
which are made in good faith, and we believe there is a reasonable basis for them. However, because forward-looking statements
relate to the future, they are subject to inherent risks, uncertainties and other factors that are difficult to predict and which
could cause actual results to differ materially from the forward-looking statements contained in this proxy statement.
Additional information about potential risk factors
that could affect our business and financial results is included in our most recently filed Form 10-K, any subsequent Forms 10-Q
and 8-K, and any other U.S. Securities and Exchange Commission Filings. We caution you not to place undue reliance on the forward-looking
statements included in this proxy statement, which speak only as of the date hereof. We disclaim any intent or obligation, except
as required by law, to revise or update this information to reflect new information or future events or circumstances. We also
disclaim any duty to comment on or correct information that may be contained in reports published by investment analysts or others.
Across the globe, KBR celebrated its 10th annual
Zero Harm Day with exciting and meaningful activities that brought our teams together. The NSA Bahrain team was proud to unite
in our shared commitment to safety – because we believe that achieving zero harm is possible.
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Additional Information Available |
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Non-GAAP Financial Information |
Non-GAAP Financial Information
Adjusted EBITDA is defined as Net income (loss)
attributable to KBR, plus Interest expense; Accretion of Convertible Notes debt discounts; Other non-operating expense (income);
Provision for income taxes; Depreciation and amortization; and certain discrete items as identified by management to be non-recurring
in nature.
Diluted EPS reflects our diluted net income (loss)
attributable to KBR divided by the weighted average number of common shares outstanding during the period in addition to common
shares that would have been outstanding if potential common shares with a dilutive effect had been issued. Adjusted EPS excludes
certain amounts included in diluted EPS.
Adjusted operating cash flows exclude certain amounts
included in the cash flows provided by operating activities calculated in accordance with Generally Accepted Accounting Principles
(“GAAP”). The most directly comparable financial measure calculated in accordance with GAAP is cash flows provided
by operating activities.
| ($
in millions, except per share data) | |
Fiscal
Year 2024 | | |
Fiscal
Year 2023 | | |
Fiscal
Year 2022 |
| Net
Income (Loss) Attributable to KBR | |
$ | 375 | | |
$ | (265) | | |
$ | 190 |
| Adjustments: | |
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| Interest expense | |
| 144 | | |
| 115 | | |
| 87 |
| Accretion of Convertible Notes debt discounts | |
| — | | |
| 282 | | |
| — |
| Other non-operating expense (income) | |
| 7 | | |
| 5 | | |
| (12) |
| Provision for income taxes | |
| 130 | | |
| 95 | | |
| 92 |
| Depreciation and amortization | |
| 156 | | |
| 141 | | |
| 137 |
| Acquisition, integration and restructuring | |
| 23 | | |
| 10 | | |
| 7 |
| Ichthys commercial dispute cost and resolution | |
| 11 | | |
| 1 | | |
| 143 |
| Legacy legal fees and settlements | |
| 24 | | |
| 155 | | |
| 15 |
| (Benefits) provisions related to exit
from Russian commercial projects | |
| — | | |
| (4) | | |
| 25 |
| Loss on derivative bifurcation | |
| — | | |
| 104 | | |
| — |
| Loss on debt extinguishment | |
| — | | |
| 70 | | |
| — |
| Loss on settlement of warrants | |
| — | | |
| 38 | | |
| — |
| Appreciation in fair value of investments | |
| — | | |
| — | | |
| (16) |
| Adjusted
EBITDA | |
$ | 870 | | |
$ | 747 | | |
$ | 668 |
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| Non-GAAP Financial Information |
|
| ($
in millions, except per share data) | |
Fiscal
Year 2024 | | |
Fiscal
Year 2023 | | |
Fiscal
Year 2022 |
| Diluted
EPS | |
$ | 2.79 | | |
$ | (1.96) | | |
$ | 1.26 |
| Adjustments: | |
| | | |
| | | |
| |
| Amortization related to acquisitions | |
| 0.20 | | |
| 0.17 | | |
| 0.19 |
| Ichthys commercial dispute cost and resolution | |
| 0.09 | | |
| 0.01 | | |
| 1.02 |
| Acquisition, integration and restructuring | |
| 0.13 | | |
| 0.06 | | |
| 0.04 |
| Impact of convert accounting and diluted
EPS share count* | |
| — | | |
| 0.01 | | |
| 0.07 |
| Legacy legal fees and settlements | |
| 0.13 | | |
| 1.03 | | |
| 0.08 |
| (Benefits) provisions related to exit
from Russian commercial projects | |
| — | | |
| (0.03) | | |
| 0.14 |
| Charges associated with Convertible Notes | |
| — | | |
| 3.62 | | |
| — |
| Appreciation of fair value of investments | |
| — | | |
| — | | |
| (0.09) |
| Adjusted
EPS | |
$ | 3.34 | | |
$ | 2.91 | | |
$ | 2.71 |
| Diluted weighted average common shares outstanding | |
| 134 | | |
| 135 | | |
| 156 |
| Adjusted weighted average common shares outstanding | |
| 134 | | |
| 136 | | |
| 142 |
| Cash
Flows Provided by Operating Activities | |
$ | 462 | | |
$ | 331 | | |
$ | 396 |
| Adjustments: | |
| | | |
| | | |
| |
| Add: Legacy legal settlement (after tax) | |
| — | | |
| 132 | | |
| — |
| Adjust: CARES Act temporary tax repayment
(relief) | |
| — | | |
| — | | |
| 28 |
| Adjusted
Operating Cash Flows | |
$ | 462 | | |
$ | 463 | | |
$ | 424 |
| * |
For fiscal 2023, adjusted share count includes
anti-dilutive shares for warrants excluded from Diluted EPS share count. |
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Appendix A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
KBR, INC.
Under Sections 242 and 245 of the General Corporation Law
of the State of Delaware KBR, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
| 1 |
The current name of the Corporation is KBR, Inc.,
and the name under which the Corporation was originally incorporated was KBR, Inc. The original Certificate of Incorporation
of the Corporation was filed with the Secretary of State of the State of Delaware on March 21, 2006, and subsequently amended
and restated on October 27, 2006 and, November 13, 2006 and June 5, 2012 (the “20062012
Amended and Restated Certificate of Incorporation”). |
| 2 |
This Amended and
Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), which
restates, integrates and further amends the 20062012 Amended and Restated Certificate of
Incorporation, has been duly adopted in accordance with the provisions of Sections 242 and 245 of the DGCL. |
| 3 |
The 20062012 Amended
and Restated Certificate of Incorporation is hereby superseded by this Amended and Restated Certificate of Incorporation, which shall
henceforth be the Certificate of Incorporation of the Corporation. |
| 4 |
The text of the 20062012
Amended and Restated Certificate of Incorporation is hereby amended and restated to read in its entirety as follows (hereinafter,
this Amended and Restated Certificate of Incorporation, as it may be further amended or restated from time to time, is referred to
as this “Certificate of Incorporation”): |
| |
FIRST: The name of the Corporation is KBR, Inc. (hereinafter,
the “Corporation”). |
| |
SECOND: The address of the registered office of the
Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New Castle, Zip
Code 19801, and the name of the registered agent of the Corporation at such address is The Corporation Trust Company. |
| |
THIRD: The purpose of the Corporation is to engage in
any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the
“DGCL”). |
| |
FOURTH: The aggregate number of shares of capital stock
that the Corporation shall have authority to issue is 350,000,000, of which 300,000,000 shares are classified as common stock, par
value $0.001 per share (“Common Stock”), and 50,000,000 shares are classified as preferred stock, par value $0.001
per share (“Preferred Stock”). |
The Corporation may issue shares of any class or series of
its capital stock from time to time for such consideration and for such corporate purposes as the Board of Directors of the Corporation
(the “Board of Directors”) may from time to time determine. The following is a statement of the powers, preferences
and rights, and the qualifications, limitations or restrictions thereof, of the Preferred Stock and the Common Stock:
Division A. Preferred Stock
The shares of Preferred Stock may be divided into and issued
in one or more series, the relative rights, powers and preferences of which series may vary in any and all respects. The Board of Directors
is expressly vested with the authority to fix, by resolution or resolutions adopted prior to and providing for the issuance of any shares
of each particular series of Preferred Stock and incorporate in a certificate of designations filed with the Secretary of State of the
State of Delaware, the designations, powers, preferences and rights, and the qualifications, limitations and restrictions thereof, of
the shares of each series of Preferred Stock, to the extent not provided for in this Certificate of Incorporation, and with the authority
to increase or decrease the number of shares within each such series; provided, however, that the Board of Directors may not decrease
the number of shares within a series of Preferred Stock below the number of shares within such series that is then outstanding nor increase
the number of shares of such series above the total number of authorized shares of Preferred Stock. The authority of the Board of Directors
with respect to fixing the designations, powers, preferences and rights, and the qualifications, limitations and restrictions thereof,
of each such series of Preferred Stock shall include, but not be limited to, determination of the following:
| 1 |
the
distinctive designation and number of shares of that series; |
| 2 |
the
rate of dividends (or the method of calculation thereof) payable with respect to shares of that series (if any), the dates, terms
and other conditions upon which such dividends shall be payable, and the relative rights of priority of such dividends to dividends
payable on any other class or series of capital stock of the Corporation; |
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the nature of the dividend payable (if any) with respect to shares of that series as cumulative, noncumulative
or partially cumulative, and if cumulative or partially cumulative, from which date or dates and under what circumstances; |
| 4 |
whether shares of that series shall be subject to redemption, and, if made subject to redemption,
the times, prices, rates, adjustments and other terms and conditions of such redemption (including the manner of selecting
shares of that series for redemption if fewer than all shares of such series are to be redeemed); |
| 5 |
the rights of the holders of shares of that series in the event of voluntary or involuntary liquidation,
dissolution or winding up of the Corporation (which rights may be different if such action is voluntary than if it is involuntary),
including the relative rights of priority in such event as to the rights of the holders of any other class or series of capital
stock of the Corporation; |
| 6 |
the terms, amounts and other conditions of any sinking or similar purchase or other fund provided
for the purchase or redemption of shares of that series; |
| 7 |
whether shares of that series shall be convertible into or exchangeable for shares of capital
stock or other securities of the Corporation or of any other corporation or entity, and, if provision be made for conversion
or exchange, the times, prices, rates, adjustments, and other terms and conditions of such conversion or exchange; |
| 8 |
the extent, if any, to which the holders of shares of that series shall be entitled (in addition
to any voting rights provided by law) to vote as a class or otherwise with respect to the election of directors or otherwise; |
| 9 |
the restrictions and conditions, if any, upon the issue or reissue of any additional Preferred
Stock ranking on a parity with or prior to shares of that series as to dividends or upon liquidation, dissolution or winding
up; |
| 10 |
any other repurchase obligations of the Corporation, subject to any limitations of applicable
law; and |
| 11 |
any other designations, powers, preferences or rights, or qualifications, limitations or restrictions
thereof, of shares of that series. |
Any of the designations, powers, preferences or rights, or
qualifications, limitations or restrictions thereof, of any series of Preferred Stock may be dependent on facts ascertainable outside
this Certificate of Incorporation, or outside the resolution or resolutions providing for the issue of such series of Preferred Stock
adopted by the Board of Directors pursuant to authority expressly vested in it by this Certificate of Incorporation; provided that the
manner in which such facts shall operate upon the voting powers, designations, preferences or rights, or qualifications, limitations
or restrictions of such series of stock is clearly and expressly set forth in this Certificate of Incorporation or in the resolution
or resolutions providing for the issue of such stock adopted by the Board of Directors. The term “facts”, as used herein,
includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the
Corporation. Except as applicable law or this Certificate of Incorporation (including any certificate of designations) otherwise may
require, the terms of any series of Preferred Stock may be amended without consent of the holders of any other series of Preferred Stock.
The relative powers, preferences and rights of each series
of Preferred Stock in relation to the powers, preferences and rights of each other series of Preferred Stock shall, in each case, be
as fixed from time to time by the Board of Directors in the resolution or resolutions adopted pursuant to the authority granted in this
Division A of this Article FOURTH, and the consent, by class or series vote or otherwise, of holders of Preferred Stock of such of the
series of Preferred Stock as are from time to time outstanding shall not be required for the issuance by the Board of Directors of any
other series of Preferred Stock, whether or not the powers, preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in such resolution or resolutions adopted with respect to any series of Preferred
Stock that the consent of holders of at least a majority (or such greater proportion as shall be therein fixed) of the outstanding shares
of such series voting thereon shall be required for the issuance of shares of any or all other series of Preferred Stock.
Shares of any series of Preferred Stock shall have no voting
rights except as required by law or as provided by the relative powers, preferences and rights of such series set forth in this Certificate
of Incorporation (including any certificate of designations).
Division B. Common Stock
| 1 |
Dividends. Subject to the
powers, preferences and rights of any series of Preferred Stock, dividends may be declared and paid on the Common Stock, as the Board
of Directors shall from time to time determine, out of any assets of the Corporation that are by law available for such dividends. |
| 2 |
Distribution of Assets. Subject to the powers,
preferences and rights of any series of Preferred Stock, in the event of any liquidation, dissolution or winding up of the Corporation,
the holders of the Common Stock shall be entitled to receive, pro rata, all of the assets of the Corporation available for distribution
to its stockholders. The Board of Directors, by vote of a majority of the members thereof, may distribute in kind to the holders
of the Common Stock such remaining assets of the Corporation, or may sell, transfer or otherwise dispose of all or any of the remaining
property and assets of the Corporation to any other entity or other purchaser and receive payment therefor wholly or partly in cash
or property, and/or in securities of any such entity, and/or in obligations of such entity or other purchaser, and may sell all or
any part of the consideration received therefor and distribute the same or the proceeds thereof to the holders of the Common Stock. |
| 3 |
Voting Rights. Subject to the voting rights expressly
conferred upon the Preferred Stock, the holders of the Common Stock shall exclusively possess full voting power for the election
of directors and for all other purposes; provided, however, holders of Common Stock, as such, shall not be entitled to vote
on any amendment to this Certificate of Incorporation (including any certificate of designations relating to any series |
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of Preferred Stock) that relates solely to the terms of one or more
outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with
the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation (including any
certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL. |
Division C. Other Provisions
Applicable to the Corporation’s Capital Stock
| 1 |
Votes Per Share. Any holder
of Common Stock having the right to vote at any meeting of the stockholders shall be entitled to one vote for each share of Common
Stock held of record by him, provided that no holder of Common Stock shall be entitled to cumulate his votes for the election
of one or more directors or for any other purpose. |
| 2 |
Changes in Number of Authorized Shares. Subject
to the rights of the holders of any series of Preferred Stock pursuant to the terms of this Certificate of Incorporation (including
any certificate of designations relating to any series of Preferred Stock) or any resolution or resolutions providing for the issuance
of such series of stock adopted by the Board of Directors, the number of authorized shares of any class of capital stock of the Corporation
may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders
of a majority of the stock of the Corporation entitled to vote generally in the election of directors irrespective of the provisions
of Section 242(b)(2) of the DGCL (or any successor provision thereto). |
| |
FIFTH: (a) Directors. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the authority and powers
conferred on the Board of Directors by the DGCL or by the other provisions of this Certificate of Incorporation, the Board of Directors
is authorized and empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation,
subject to the provisions of the DGCL, this Certificate of Incorporation and the Bylaws of the Corporation; provided, however,
that no Bylaws hereafter adopted, or any amendments thereto, shall invalidate any prior act of the Board of Directors that would
have been valid if such Bylaws or amendment had not been adopted. |
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(b) Number, Election and Terms of Directors.
The number of directors which shall constitute the whole Board of Directors shall be fixed from time to time by a majority of the
directors then in office, subject to an increase in the number of directors by reason of any provisions contained in or established
pursuant to Article FOURTH, but in any event shall not be less than one nor more than 15. |
| |
Prior to the 2014 annual meeting of stockholders,
the board of directors, other than those who may be elected by the holders of any series of Preferred Stock, shall be classified
and shall be divided into three classes: Class I, Class II and Class III. Such classes shall be as nearly equal in number of directors
as possible. Class II directors were elected at the 2011 annual meeting of stockholders for a term expiring at the 2014 Annual Meeting.
Class I directors were elected at the 2010 annual meeting of stockholders for a term expiring at the 2013 annual meeting. Class III
directors were elected at the 2009 annual meeting of stockholders for a term expiring at the 2012 annual meeting. Commencing with
the 2012 annual meeting, successors to the class of directors whose term expires at such annual meeting shall be elected in accordance
with this section (b) of Article FIFTH for a term expiring at the next succeeding annual meeting of stockholders and the election
and qualification of their respective successors, if any. Commencing with the 2014 annual meeting of stockholders, the classification
of directors shall cease, and all directors shall be elected for a term expiring at the next succeeding annual meeting of stockholders
and the election or qualification of their respective successors, if any. |
| |
Election of directors need not be by written ballot
unless the Bylaws of the Corporation so provide. |
| |
(c) Vacancies and Newly Created Directorships.
Except as this Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock)
or any Board of Directors’ resolution providing for the establishment of any series of Preferred Stock may provide otherwise,
newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting
from death, resignation, removal, disqualification or other cause may only be filled by the affirmative vote of a majority of the
remaining directors then in office, even though less than a quorum of the Board of Directors. Any director elected in accordance
with the preceding sentence shall hold office for the remainder of the full term of the class of directors in which the new directorship
was created or the vacancy occurred and until that director’s successor shall have been elected and qualified or until his
earlier death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the
term of any incumbent director. |
| |
SIXTH: Action by Written Consent; Special Meetings.
No action required to be taken or that may be taken at any annual or special meeting of the stockholders of the Corporation may be
taken without a meeting, and the power of the stockholders of the Corporation to consent in writing to the taking of any action by
written consent without a meeting is specifically denied. Except as otherwise provided by the DGCL, by this Certificate of Incorporation
or by any provisions established pursuant to Article FOURTH hereof with respect to the rights of holders of one or more outstanding
series of Preferred Stock, special meetings of the stockholders of the Corporation may be called at any time only by (i) the Chairman
of the Board of Directors, (ii) the President and Chief Executive Officer of the Corporation, or (iii) the Board of Directors pursuant
to a resolution approved by the affirmative vote of at least a majority of the members of the Board of Directors, and no such special
meeting may be called by any other person or persons. |
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SEVENTH: No director or officer
of the Corporation shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach
of fiduciary duty as a director or officer of the Corporation; provided, however, that this Article SEVENTH
shall not eliminate or limit the liability of such a director or officer (i) for any breach of such director’s
or officer’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of law, (iii) with respect to directors,
under Section 174 of the DGCL, as the same exists or as such provision may hereafter be amended, supplemented or replaced,
or (iv) for any transaction from which such director or officer derived an improper personal benefit, or
(v) with respect to officers, in any action by or in the right of the Corporation. If the DGCL is amended after the
filing of this Certificate of Incorporation to |
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authorize corporate action further
eliminating or limiting the personal liability of directors or officers, then the liability of a director or
officer of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the
fullest extent permitted by such law, as so amended. Any repeal or modification of this Article SEVENTH, to the fullest extent permitted
by applicable law, shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director
or officer of the Corporation existing at the time of such repeal or modification. For purposes of this Article SEVENTH, “officer”
shall have the meaning provided in Section 102(b)(7) of the DGCL. |
| |
EIGHTH: The Board of Directors is expressly empowered
to adopt, amend or repeal the Bylaws of the Corporation, and any adoption, amendment or repeal of the Bylaws of the Corporation by
the Board of Directors shall require the affirmative vote of a majority of all directors then in office at any regular or special
meeting of the Board of Directors called for that purpose. |
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NINTH: The Corporation expressly elects not to be governed
by Section 203 of the DGCL until immediately after such time that no person (as defined in Section 203) is the beneficial owner
(as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of, stock representing
in the aggregate, at least a majority of the voting power of Corporation’s then outstanding voting stock (as defined in Section
203). From such time forward, the Corporation shall be governed by Section 203 of the DGCL, and will continue to be governed by such
Section even if after such date a person (as defined in Section 203) becomes the beneficial owner of stock representing a majority
(or more) of the Corporation’s outstanding voting stock (as defined in Section 203). The Corporation shall make a public announcement
following the time it becomes subject to Section 203 of the DGCL pursuant to the provision of this Article NINTH; provided, however,
that the failure to make such public announcement shall have no effect on the fact that the Corporation has become subject to Section
203 of the DGCL. |
IN WITNESS WHEREOF, the Corporation has caused this Amended
and Restated Certificate of Incorporation to be signed by its duly authorized officer, this 5th
day of June, 2012[●], 2025.
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KBR, INC.
By: /s/ Jeffrey B. King
Name: Jeffrey B. KingSonia Galindo
Title: Executive Vice President, Public LawGeneral Counsel & Corporate Secretary |
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