Eric S. Pachapa

About Eric S. Pachapa

Eric S. Pachapa, 52, is Vice President, Controller and Chief Accounting Officer of AAR CORP. (AIR), a role he has held since July 2016 after joining AAR in 2014; prior roles include Controller (2015–2016) and Senior Director of Accounting and Reporting (2014–2015). Earlier he worked at Glanbia plc (2011–2014) and Ernst & Young LLP (1996–2011) . Under the current leadership team, AAR delivered FY25 sales of $2,780.5M (+19.9% YoY), operating income of $185.2M (+43.3% YoY), and adjusted diluted EPS of $3.91 (vs. $3.33 in FY24); net income was $12.5M reflecting one‑offs (e.g., LGO divestiture loss, FCPA costs) . Company TSR since 6/1/2020 reached $214.91 vs. $315.46 for the peer group as of FY25 year‑end .

Past Roles

External Roles

• No public company directorships or external board roles disclosed for Pachapa in AAR’s FY25 10‑K executive officer section .

Fixed Compensation

Multi-year cash compensation and company-paid benefits:

Additional detail (FY25):

• Target bonus opportunity: 75% of base salary; threshold 38%, max 150% .
• FY25 “All other compensation” breakdown: Company 401(k) $20,840; Company SKERP (non‑qualified plan) $83,990; Perquisites $4,295 .

Performance Compensation

FY25 Short‑Term Incentive Plan (STIP)

STIP metric definitions and committee discretion summarized in CD&A (non‑GAAP alignment, limited exclusions) .

FY25 Long‑Term Incentive (LTI) Structure and Grants (grant date 7/22/2024)

• Mix: 60% performance‑based restricted stock (PRS), 20% stock options, 20% time‑based RS .
• Performance metrics for PRS over 6/1/2024–5/31/2027: Adjusted income from continuing ops (70%), Avg ROIC (20%), Relative TSR vs custom aviation peer set (10%); payout: 0%–200% of target; TSR thresholds 25th/55th/80th percentiles for threshold/target/max .

Vesting schedule (as of 5/31/2025; shares shown at target for PRS):

Equity Ownership & Alignment

• Beneficial ownership: 44,918 shares as of July 22, 2025 (includes unvested RS and options exercisable within 60 days per footnote) .
• Outstanding equity at FY25 year‑end:
  • Unvested RS (time‑based): 5,105 shares; market value $313,498 (@$61.41) .
  • Unvested PRS (at target): 12,885 shares; market/payout value $791,268 (@$61.41) .
  • Stock options by grant (exercisable/unexercisable; strike/expiry):
    • 7,674 / — @ $18.94 exp 7/13/2030
    • 1,620 / — @ $37.74 exp 7/12/2031
    • 7 / — @ $50.93 exp 3/25/2032
    • 1,905 / 1,905 @ $41.88 exp 7/18/2032
    • 1,061 / 2,124 @ $58.27 exp 7/24/2033
    • — / 3,440 @ $67.02 exp 7/22/2034
  • Unexercisable option vesting tranches (if outstanding at FY25 year‑end): 07/31/25: 4,112; 07/31/26: 2,209; 07/31/27: 1,148 .
• Ownership guidelines: Executive officers must hold meaningful stock; non‑compliant executives must retain at least 50% of net after‑tax shares; all NEOs in compliance as of FY25 year‑end .
• Anti‑hedging/anti‑pledging: Company prohibits short sales, hedging, and pledging of Company stock by officers .
• Clawback: NYSE 10D‑1 compliant recoupment policy covering incentive pay tied to financials/TSR for 3 prior fiscal years upon required restatement .
• Deferred compensation (SKERP): FY25 participant contributions $42,403; Company contributions $83,990; FY25 earnings $54,563; balance $605,271 at 5/31/2025 .

Employment Terms

• Severance (non‑CIC): If terminated by Company without Cause or by executive for Good Reason, 12 months continued salary, prior year earned bonus and pro‑rata current year bonus; payments cease upon breach of confidentiality or non‑compete (non‑compete in effect for the one‑year severance period) .
• Change‑in‑Control (double‑trigger for NEOs): Upon qualifying termination within 18 months post‑CIC, lump sum of 2x salary + 2x higher of last or prior year bonus; continued welfare benefits for 2 years; Company‑paid outplacement; legal fees reimbursement .
• Equity vesting on CIC/qualifying termination: For NEOs, restricted stock and options vest (performance at higher of target/actual) upon qualifying termination post‑CIC; indicative values for Pachapa as of 5/31/2025: RS $1,104,766; options $43,874 (valued at $61.41 less strike, if in‑the‑money) .

Investment Implications

• Pay alignment and retention: Pachapa’s pay mix is heavily at‑risk/equity‑based (PRS, options, RS) with multi‑year vesting tied to adjusted income, ROIC, and relative TSR, supporting retention and performance alignment; FY25 STIP paid at 102% on above‑target adjusted EPS and near‑target working capital turns .
• Upcoming vesting/supply: Material vesting tranches through July 2027 (notably 2,410 time‑based RS and 4,810 PRS‑target shares on 7/31/2025) could increase potential insider selling capacity around trading windows, though anti‑hedging/pledging limits remain and ownership guidelines encourage retention .
• Downside protection/retention risk: Double‑trigger CIC terms (2x cash; full equity vesting on qualifying termination) and one‑year non‑compete linked to severance reduce near‑term departure risk; clawback/anti‑hedging mitigate shareholder‑unfriendly behaviors .
• Company fundamentals context: FY25 showcased strong top‑line/operating momentum (sales +19.9%, operating income +43.3%) and record adjusted EPS ($3.91), supporting pay‑for‑performance narratives; however, TSR trailed peer group over the 2020–2025 window, a potential focal point for future LTI calibration .

Appendices

Multi‑Year Equity and Cash Detail (Supplemental)

Beneficial Ownership Snapshot (as of 7/22/2025)

Notes: “Stock units” column pertains to director deferrals; NEOs typically not in this column .

Sources: AAR CORP. FY2025 Proxy (DEF 14A) and FY2025 10‑K. All figures and statements are cited inline.