Troy Rudd
AECOMAbout Troy Rudd
AECOM’s CEO since August 2020 (director since 2020), age 60; prior CFO (2015–2020) and senior finance/operator roles at AECOM after joining in 2009; earlier, Partner at KPMG (1998–2009). Education: B.Sc., University of British Columbia; M.S. Taxation, Golden Gate University . Under his leadership in FY2024, AECOM set records for net service revenue, margins, earnings, and cash flow; adjusted EBITDA grew 14%, adjusted EPS grew 22%, and segment adjusted operating margin reached 15.8% . Over FY2021–FY2024, $100 invested in AECOM increased to $253 (company TSR), versus $165 for the 2024 peer index; adjusted EPS rose to $4.52 and indexed EPS growth reached 216 (FY2020=100) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| AECOM | Chief Executive Officer & Director | 2020–Present | Led transformation to higher-margin professional services; record NSR, margins, earnings, FCF; capital returns to shareholders . |
| AECOM | Chief Financial Officer | 2015–2020 | Drove financial discipline; prepared basis for later margin/FCF expansion . |
| AECOM | COO, DCS Americas & CFO, DCS Global | 2014–2015 | Combined operations/finance leadership across key business line . |
| AECOM | SVP Corporate Finance & Treasurer | 2012–2015 | Strengthened capital structure/treasury . |
| AECOM | Various financial leadership roles | 2009–2012 | Corporate finance leadership . |
| KPMG LLP | Partner | 1998–2009 | Audit/leadership roles; public company/transaction expertise . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| AECOM | Director | 2020–Present | Executive director (not independent) . |
| SMU Lyle School of Engineering | Executive Board | 2023–Present | Industry/academia engagement . |
| Sustainable Markets Initiative | Member | 2023–Present | Sustainability leadership network . |
Fixed Compensation
| Year | Base salary ($) | Change YoY (%) | Perquisites/other ($) |
|---|---|---|---|
| 2024 | 1,326,000 | 4.0 | 244,277 (RSP match, exec physical, insurance/LTD, dividends on vested shares, membership dues) |
| 2023 | 1,254,387 | — | 204,612 |
| 2022 | 1,190,463 | — | 281,964 |
Notes:
- CEO did not receive separate director fees for board service .
Performance Compensation
Annual Cash Incentive (STI) – Design and Outcomes (FY2024)
| Metric | Weight | Threshold | Target | Maximum | Actual | Earned (weight pts) |
|---|---|---|---|---|---|---|
| Free Cash Flow (USD mm) | 30% | 500.0 | 625.0 | 750.0 | 708.4 | 50.0% of 30% |
| Adjusted EBITDA (USD mm) | 30% | 976.0 | 1,085.0 | 1,193.0 | 1,094.8 | 32.7% of 30% |
| Segment Adj. Op. Margin on NSR | 20% | 14.0% | 15.6% | 17.1% | 15.8% | 22.5% of 20% |
| KPI assessment (safety/people/ESG, etc.) | 20% | varies | varies | varies | CEO KPI score 170% | 34.0% of 20% |
| Total STI earned (as % of target) | — | — | — | — | — | 139.2% |
CEO Target/Actual
- Target bonus: 140% of salary = $1,856,400 .
- Actual FY2024 bonus paid: $2,584,299 .
CEO KPI highlights (FY2024)
- Record NSR, margins (15.8%), +14% adj. EBITDA, +22% adj. EPS; win rate ~50%; record pipeline; investments in Advisory/Program Mgmt; employee engagement 77% recommend; TRIR 0.07; ~$560mm returned to shareholders; net leverage ~0.8x; ~70% debt fixed/capped; no bond maturities until 2027 .
Long-Term Incentive (LTI) – Structure and Grants
| Component | Weight | Metrics | Grant date | Units/RSUs | Grant-date fair value ($) | Vesting |
|---|---|---|---|---|---|---|
| Performance Earning Program (PEP 2024) | 60% | 1/3 Relative TSR (vs peer group), 1/3 3-yr avg ROIC, 1/3 1/2/3-yr avg Adjusted EPS growth | 12/15/2023 | 61,769 target units | 6,487,392 | Cliff on 12/15/2026, 0–200% based on results; 66.7% financial (ROIC/EPS), 33.3% market (TSR) . |
| Time-based RSUs (RSU 2024) | 40% | Service-based | 12/15/2023 | 41,180 RSUs | 3,800,090 | Cliff on 12/15/2026 (service) . |
Outstanding and Earned-to-Date (as of 9/30/2024)
- Earned service-based and unearned PEP/RSU balances for CEO: RSU2024 41,180; RSU2023 36,812; RSU2022 30,940; PEP2024 12,052 earned service-based units and 111,486 unearned; PEP2023 24,541 earned and 67,487 unearned; PEP2022 64,835 earned (counts based on stated performance recognition methodology ).
Recent PEP cycle payout (FY2022 cycle, covering FY2022–FY2024)
| Metric | Threshold | Target | Max | Actual | Payout |
|---|---|---|---|---|---|
| ROIC | 13.5% | 15.0% | 16.5% | 18.6% | 200.0% |
| Relative TSR | 25th pct | 55th pct | 75th pct | 31st pct | 19.2% |
| Adjusted EPS Growth (1-yr) | 12.9% | 16.1% | 19.3% | 15.2% | 200.0% |
Special CEO Stock Option (performance-based, granted on appointment)
| Grant | Exercise price | Expiry | Vesting – service | Vesting – price hurdles (20-day VWAP) | Status |
|---|---|---|---|---|---|
| 8/15/2020 CEO option | $38.72 | 8/15/2027 | 20% per year over 5 years | +20% ($46.46), +40% ($54.21), +60% ($61.95), +80% ($69.70), +100% ($77.44) tranches | Hurdles through +80% vested by 8/15/2024; +100% achieved, to vest 8/15/2025 . |
Option activity and stock vesting (FY2024)
- Options exercised: 53,097 shares; realized value $3,062,375 .
- Stock awards vested: 101,310 shares; realized value $9,348,887 (includes PEP2021/RSU2021) .
Equity Ownership & Alignment
| Item | Disclosure |
|---|---|
| Beneficial ownership (1/6/2025) | 195,198 shares; <1% of class . |
| CEO ownership guideline | 6x salary; CEO actual ~23.5x (in compliance) . |
| Hedging/pledging | Hedging banned; buying on margin and pledging generally prohibited except limited cases with pre-approval and ability-to-repay demonstration . |
| Insider trading windows | Company policy governs; no timing of grants to undisclosed information; most equity in RSUs . |
| Upcoming vesting dates (selling pressure watch) | RSU2023: 12/15/2025; RSU2024: 12/15/2026; PEP2023: 12/15/2025; PEP2024: 12/15/2026 (subject to performance/continued employment); special option final tranche 8/15/2025 . |
Employment Terms
| Provision | Key terms |
|---|---|
| Employment/Severance framework | CEO letter (6/13/2020) makes him eligible for Senior Leadership Severance Plan with enhanced multiples; also eligible for CIC plan with CEO-specific enhancements . |
| Senior Leadership Severance Plan (non-CIC) | If terminated without cause (non-CIC): lump sum of 2x base salary for CEO (others 1x), prorated target bonus; additional equity service credit (12–24 months based on tenure); healthcare premium cash value for 24 months for CEO (others 12) . |
| Change-in-Control (CIC) Policy (Key Executives) | Single-trigger: equity acceleration only if awards not continued/substituted; earned PEPs convert to unvested RSUs continuing on time-based schedule . Double-trigger (90 days pre- to 24 months post-CIC termination): full acceleration of unvested equity (PEP at actual-to-date), cash severance of 2x (CEO) base + average 3-year bonus; pro rata bonus at target; continued health coverage for 2 years (CEO) . |
| Cash severance policy cap | New agreements cannot exceed 2.99x base + target bonus without shareholder approval (adopted Dec 2024) . |
| Clawback | NYSE Rule 10D-1 compliant policy adopted Nov 2023; recoup incentive comp upon restatement . |
| Non-solicit/confidentiality | Required in release for severance eligibility; restricts solicitation of employees/customers and mandates confidentiality . |
Estimated potential payments (as of 9/30/2024)
| Scenario | Severance cash ($) | Health benefits ($) | LTI acceleration ($) |
|---|---|---|---|
| Involuntary termination without cause (non-CIC) | 4,508,400 | 19,518 | 28,524,192 |
| Termination upon CIC (double-trigger) | 8,062,355 | 19,518 | 43,863,352 |
| Death/Disability | — | — | 43,863,352 |
| Retirement | — | — | 25,918,458 |
Board Governance (Director and Chair role)
- Board service: Director since 2020; effective upon re-election at the February 28, 2025 annual meeting, the Board combined Chair/CEO roles and elected Rudd as Chairman; Douglas W. Stotlar serves as Lead Independent Director .
- Independence/committees: As CEO, Rudd is not independent and does not serve on board committees; all standing committees (Audit, Compensation & Organization, Nominating & Governance) are fully independent and chaired by independent directors .
- Governance safeguards: Regular executive sessions at each scheduled board/committee meeting; independent committee chairs; strong governance practices (majority voting, proxy access, special meeting rights, term limits, and stock ownership guidelines) .
- Attendance: Each incumbent director attended 100% of Board and assigned committee meetings in FY2024 .
- Director compensation: CEO does not receive additional pay for board service .
- Say-on-Pay and shareholder sentiment (2025 meeting): Advisory approval of executive compensation: For 106,936,948; Against 6,427,193; Abstain 290,612 (≈94% support of votes cast for/against) . A shareholder proposal to ratify severance compensation failed (For 6,754,918; Against 106,421,857; Abstain 477,978) .
Director Compensation (for reference; Rudd not eligible as employee-director)
- Non-employee director cash retainer $100,000; additional retainers for Board Chair ($150,000), Audit Chair ($25,000), Compensation Chair ($25,000), other chair roles ($20,000), committee membership stipends, and meeting fees when counts exceed thresholds; annual equity grant ~$167,500 ($190,000 for Chair) in RSUs; directors may defer via EDCP .
Compensation Structure Analysis (alignment, signals)
- Mix shift and rigor: CEO’s 2024 LTI grant value increased to $9.5mm (+23.4% YoY), with 60% performance-based PEP tied to ROIC, adjusted EPS growth, and relative TSR, and 40% time-based RSUs; targets described as rigorous and aligned to long-term plan/guidance .
- Pay vs performance: Strong linkage evidenced by elevated “compensation actually paid” alongside outperformance on adjusted EPS and TSR vs market indices over FY2021–FY2024 .
- Options emphasis: New LTI is primarily RSUs and PSUs; CEO’s option exposure is a one-time 2020 performance option with price hurdles, now nearly fully achieved (final tranche vesting in Aug 2025) .
- Cash severance discipline: New policy caps cash severance >2.99x without shareholder vote; CEO-specific severance multiples remain 2x salary (non-CIC) and 2x base+average bonus (CIC), with health benefits and equity acceleration provisions .
Equity Ownership & Outstanding Awards (detail)
| Item | Count/Value |
|---|---|
| Beneficial ownership (1/6/2025) | 195,198 shares . |
| Outstanding CEO equity (9/30/2024) | RSU2024: 41,180; RSU2023: 36,812; RSU2022: 30,940; PEP2024: 12,052 earned service-based units; PEP2024 unearned: 111,486; PEP2023: 24,541 earned; PEP2023 unearned: 67,487; PEP2022: 64,835 earned . |
| Options outstanding (9/30/2024) | 53,097 unexercisable; exercise price $38.72; expiry 8/15/2027 . |
| FY2024 realizations | Options exercised: 53,097 ($3,062,375 realized); Stock vested: 101,310 ($9,348,887) . |
Say‑on‑Pay & Peer Benchmarking
- Peer group (unchanged in 2024): AtkinsRéalis, Booz Allen, EMCOR, Fluor, Jacobs Solutions, KBR, Leidos, MasTec, Parsons, Quanta Services, Stantec, Tetra Tech, WSP Global .
- Targeting: Committee does not target a specific percentile; considers market, performance, role scope, retention .
- 2025 Say‑on‑Pay vote passed (see counts above) .
Related Party Transactions, Policies, and Red Flags
- Related party policy: Audit Committee review required for transactions >$120,000; certain items pre-approved; example: Randstad (CEO of Randstad sits on AECOM Board) received ~$127,542 for temporary staffing services in FY2024 .
- Clawback: Restatement-based recovery for incentive compensation .
- Hedging/pledging: Prohibited/broadly restricted as noted (reduces misalignment risk) .
- Equity award timing: No grant timing around MNPI; RSUs predominant .
Expertise & Qualifications
- Finance/operator breadth (KPMG partner; AECOM CFO; DCS operations leader; CEO); international and M&A; educational grounding in taxation .
- Board/industry networks via SMU Engineering Board and Sustainable Markets Initiative .
Investment Implications
- Alignment: High equity ownership (23.5x salary vs 6x guideline) and heavy performance-based equity (PEP 60%) align incentives with long-term value creation; strong FY2024 execution (margin expansion, FCF, adj. EPS growth) underpins compensation outcomes .
- Trading signals: Watch upcoming vesting dates (Dec 15, 2025 & 2026) and the final performance-option vest (Aug 15, 2025) as potential liquidity events; however, hedging/pledging prohibitions and high ownership multiple reduce forced-selling risk .
- Retention/CIC economics: Non-CIC severance (2x salary) and CIC (2x base+avg bonus plus accelerated equity) are competitive yet capped by a 2.99x cash policy; expect stability through potential corporate events, though equity acceleration is sizable under CIC .
- Governance: Combining CEO/Chair concentrates power; mitigated by a Lead Independent Director and fully independent committees; shareholder support for pay program remains strong (≈94% support), while a severance ratification proposal failed, signaling investor scrutiny of separation economics .