KeyTronic (KTCC) sets FY2026 incentive goals; CEO awarded 89,927 RSUs

KeyTronic Corporation disclosed its 2026 incentive compensation framework and multi-year awards.

Rhea-AI Filing Summary

KeyTronic Corporation disclosed its 2026 incentive compensation framework and multi-year awards. The Board set three profit performance levels for fiscal 2026 (entry, expected and overachievement), with a company minimum profit threshold required before any payments are made and a bonus pool equal to 35% of profit above the overachievement level. Payments are percentages of base salary and will be interpolated between performance levels; recipients must be active employees when payments are made.

The company granted restricted stock units under the 2024 Incentive Plan: 89,927 RSUs to CEO Brett R. Larsen (three-year vesting, ~40% time-based and ~60% performance-based tied to annual EBITDA) and 44,964 RSUs each to Anthony Voorhees and Philip Hochberg (three-year vesting, 50/50 time- and performance-based). Non-employee directors received 14,388 RSUs vesting after one year. For the 2026–2028 long-term plan, targets combine sales growth versus industry and return on invested capital; cash target payouts if expected performance is met are $400,000 for the CEO, and $190,000 for each of the two named executives, with directors eligible for $35,000. Actual payments may range from $0 to 150% above target.

Positive

• Performance-linked design tying FY2026 payments to company profit levels and long-term awards to sales growth versus industry and return on invested capital
• Significant performance vesting in RSU grants (major portions subject to annual EBITDA thresholds) aligns pay with outcomes
• Clear target payouts for 2026–2028 (CEO $400,000; each named executive $190,000; directors $35,000) provide transparency on potential cash obligations

Negative

• Large CEO RSU grant of 89,927 RSUs, which may be material to share count and dilution
• Potential cash exposure because long-term awards may pay up to 150% of target, creating meaningful downside for cash flow if performance triggers high payouts

Insights

Compensation Committee Analyst

TL;DR: Board set performance-linked pay and significant RSU grants, mixing time- and performance-vesting to align executives with EBITDA and ROIC goals.

The disclosure outlines a conventional incentive structure combining annual profit-based payouts for FY2026 and a three-year performance cycle for 2026–2028 tied to sales growth versus industry and return on invested capital. The FY2026 ICP uses three performance tiers and a 35% bonus pool for overachievement, which encourages upside participation. The RSU grants are sizeable—particularly the 89,927 RSUs to the CEO—with multi-year vesting and material portions subject to EBITDA hurdles, creating direct linkage between executive equity realizations and operating performance. The long-term cash targets are explicit, with capped upside to 150% of target, preserving payoff symmetry while creating measurable goals for investors to track.

Corporate Governance Specialist

TL;DR: The plan emphasizes performance-based compensation but also creates clear dilution and payout exposure that investors should quantify.

The mix of time- and performance-based RSUs and defined multi-year cash targets demonstrates governance attention to tying pay to measurable metrics (EBITDA, sales growth, ROIC). The CEO award size (89,927 RSUs) and director grants are concrete, and the 150% upside cap on long-term cash awards gives a bounded but meaningful potential cash obligation. While structured to align incentives, these awards represent potential share-count and cash commitments that will affect capitalization and compensation expense when vested or paid; investors should monitor share count changes and any disclosures quantifying dilution or expense when reported.

8-K Event Classification

2 items: 5.02, 9.01

2 items

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers Governance

Key personnel changes including departures, elections, or appointments of directors and executive officers.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, or exhibit attachments filed with this report.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What performance measures determine FY2026 incentive payments for KeyTronic (KTCC)?

FY2026 payments are based on three company profit goal levels (entry, expected, overachievement) with a required minimum profit threshold before any payments and a 35% bonus pool for profits above overachievement.

How many RSUs did KeyTronic grant to the CEO and executives?

The CEO, Brett R. Larsen, received 89,927 RSUs; Anthony G. Voorhees and Philip S. Hochberg each received 44,964 RSUs.

How do the RSU awards vest?

RSUs vest in equal annual installments over three years. For the CEO ~40% are time-based and ~60% performance-based tied to annual EBITDA; the two other named executives have 50% time-based and 50% performance-based vesting tied to annual EBITDA thresholds.

What are the target long-term cash awards for 2026–2028?

If expected targets are achieved, the CEO would receive $400,000, each of the two named executives $190,000, and each non-employee director $35,000 for the three-year period.

Can participants receive more than target payouts under the long-term plan?

Yes. Actual cash payments may range from $0 to 150% above target depending on company performance versus targets.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Accepted by SEC EDGAR 08/25/2025 - 05:05 PM Learn about SEC filing dates

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported) August 21, 2025

Key Tronic Corporation

(Exact name of registrant as specified in its charter)

Washington						0-11559			91-0849125
(State or other jurisdiction of incorporation)						(Commission File Number)			(IRS Employer Identification No.)
4424 North Sullivan Road			Spokane Valley,			Washington			99216
(Address of principal executive offices)									(Zip Code)

Registrant's telephone number, including area code (509) 928-8000

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provision (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol			Name of each exchange on which registered
Common Stock, no par value			KTCC			NASDAQ Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company			☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐

ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

Incentive Compensation Plan Performance Goals and Target Payments

On August 21, 2025, the Board of Directors (“Board”) of Key Tronic Corporation (“Company”), upon the recommendation of its Compensation Committee, established the performance goals and target payment percentages for each participant in the incentive compensation plan (“ICP”) for the Company’s fiscal year 2026.

A minimum Company profit goal must be achieved in order for any payments to be made to participants in the ICP. Payments under the ICP for fiscal year 2026 will be based on three profit goal performance levels established by the Board: entry level, expected value level and overachievement level. If overachievement level is exceeded, the participants will participate in a bonus pool equal to 35% of the profit goal performance achieved in excess of overachievement level. Payments under the ICP will be a percentage of the participant’s base salary paid during fiscal year 2026.

The following executive officers of the Company are among the participants in the ICP: Brett R. Larsen, President and CEO; Anthony G. Voorhees, Executive Vice President of Administration, CFO and Treasurer; and Philip S. Hochberg, Executive Vice President of Customer Relations and Integration. Under the ICP, the potential payment percentages established by the Board for fiscal year 2026 for Mr. Larsen range from 10% of base salary paid during fiscal year 2026 if entry level performance is achieved to 150% if overachievement level performance is achieved. The potential payment percentages established by the Board for fiscal year 2026 for both Mr. Voorhees and Mr. Hochberg range from 7% if entry level performance is achieved to 105% if overachievement level performance is achieved. Payment percentages will be interpolated for actual performance levels achieved between entry level and expected value level and between expected value level and overachievement level.

Payments under the ICP will be made as soon as administratively possible after the end of fiscal year 2026. A participant must be an active employee of the Company at the time payments are made under the ICP in order to receive a payment.

Incentive Plan Awards

On August 21, 2025, the Compensation Committee of the Board granted restricted stock unit (“RSU”) awards under the Company’s 2024 Incentive Plan (the “Plan”), to (1) Mr. Larsen in the amount of 89,927 RSUs, vesting in equal annual installments over three years with approximately 40% of such RSUs subject to time-based vesting and approximately 60% of such RSUs subject to performance-based vesting only to the extent the Company’s annual EBITDA in such year meets or exceeds a threshold amount, and (2) each of Mr. Voorhees and Mr. Hochberg in the amount of 44,964 RSUs, vesting in equal annual installments over three years with 50% of such RSUs subject to time-based vesting and 50% of such RSUs subject to performance-based vesting only to the extent the Company’s annual EBITDA in such year meets or exceeds a threshold amount. The Board, upon the recommendation of its Compensation Committee, also granted awards under the Plan to each non-employee director in the amount of 14,388 RSUs. The non-employee director RSUs will vest on the first anniversary of the grant date of the awards.

Fiscal Years 2026-2028 Long-Term Incentive Plan Performance Measures and Awards

On August 21, 2025, the Board, upon recommendation of its Compensation Committee, established long term incentive plan performance measures for the three fiscal year period 2026 through 2028. The Board also approved target awards for the three year period for each of the Company’s officers and non-employee directors. The fiscal 2026-2028 performance measures are based on a combination of sales growth targets compared to the industry and return on invested capital targets. No cash awards will be made to participants if actual Company performance does not exceed the minimum target performance measures. The payments after the end of fiscal year 2028 to the following executive officers for the three year performance period, if expected target performance measures are achieved, are as follows: Mr. Larsen - $400,000, Mr. Voorhees - $190,000 and Mr. Hochberg - $190,000. The payment after the end of fiscal year 2028 to each non-employee director of the Company for said three year period, if expected target performance measures are achieved, is $35,000. Actual cash payments to participants may range from $0 to 150% above target depending on the extent to which Company performance is less than or exceeds the expected target performance measures.

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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d)Exhibits

Exhibit Number						Description
104						Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

KEY TRONIC CORPORATION (Registrant)

Date: August 25, 2025

By:

/s/ Anthony G. Voorhees

Anthony G. Voorhees, Executive Vice President of Administration, CFO and Treasurer

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