Sean M. Gillen

About Sean M. Gillen

Sean M. Gillen is Senior Vice President and Chief Financial Officer of AAR CORP. (AIR), appointed effective January 7, 2019; he was 33 at appointment, having served as USG Corporation’s Vice President & Treasurer since 2017 and previously spent nine years in investment banking at Goldman Sachs, most recently as a Vice President in the Global Industrials Group . Under his tenure, AIR’s revenues and EBITDA have increased across FY 2022–FY 2025 (see table), and long-term incentive performance for the FY 2022 program delivered strong results, including 97th percentile relative TSR; by contrast, the FY 2019 program’s TSR ranked at the 18th percentile, underscoring variability through the cycle . Revenues and EBITDA values marked with an asterisk are from S&P Global.

Values retrieved from S&P Global.

Past Roles

External Roles

No external public-company directorships disclosed for Mr. Gillen in AIR’s recent proxy materials reviewed .

Fixed Compensation

All Other Compensation (FY 2025 breakdown):

Notes:

• Perquisites include club dues/expenses, financial planning, executive physicals, and travel-related benefits; the company values perquisites at incremental cost and notes limited personal use of corporate tickets without incremental cost .
• Annual base salary increases set by the Human Capital & Compensation Committee (e.g., FY 2025 +3%) .

Performance Compensation

Annual bonus metrics and outcomes:

FY 2025 Annual bonus targets (approved):

Long-term incentive (LTI) structure and grants:

• Program mix emphasizes performance-based equity; FY 2024 LTI: 60% performance-based RS (PSRs), 20% stock options, 20% time-based RS ; FY 2025 LTI maintains emphasis on at-risk equity and double-trigger protections .
• FY 2022 LTI payout (3-year period ended May 31, 2024): Adjusted income from continuing ops $306.5M (target $235.8M), ROIC 9.06% (target 7.50%), Relative TSR 97th percentile (target 50th percentile) .
• FY 2019 LTI payout (3-year period ended May 31, 2021): Cumulative income below target ($207.9M vs $254.9M), ROIC 6.53% (target 7%), Relative TSR 18th percentile (target 50th) .

CFO equity grants detail:

Equity Ownership & Alignment

Beneficial ownership trend:

Outstanding equity at FY 2024 year-end (CFO):

Unexercisable option vesting schedule (CFO):

Exercise/vesting activity in FY 2024:

Alignment policies:

• Anti‑hedging and anti‑pledging: short sales, market puts/calls, margining/hedging, and pledging/hypothecation are prohibited (except pledging/hypothecation in cashless option exercises) . Proxy tables explicitly note none of the shares listed are pledged .
• Stock ownership guidelines: directors and executive officers must own and retain a meaningful amount of company stock; options remain subject to retention requirements post‑vesting .

Employment Terms

Severance and change‑in‑control economics (CFO):

Equity vesting upon disability/death (illustrative values at FY 2025 year-end):

• Restricted stock vesting value on disability or death is based on shares multiplied by $61.41 closing price on May 31, 2025 .
• Continued vesting of options for one year following termination due to disability; value based on difference between exercise price and $61.41 .

Clawback policy:

• Adopted to comply with SEC Rule 10D‑1 and NYSE standards; requires reasonably prompt recovery of incentive‑based compensation from covered officers for the three preceding completed fiscal years if financial statements are restated for material non‑compliance; applies to compensation received after October 2, 2023; prior policy allowed recoupment where misconduct contributed to a restatement .

Non‑compete and deferred compensation (SKERP):

• SKERP forfeiture of company supplemental contributions if terminated for cause or if non‑compete violated during employment or the one‑year period thereafter; exceptions if CIC‑related benefits apply .

Non‑qualified deferred compensation (SKERP) participation:

Compensation committee and governance:

• Independent consultant Semler Brossy engaged; independence affirmed; provides market research, plan design, and peer group development .
• Executive compensation practices include double‑trigger CIC provisions, clawbacks, prohibition on option repricing, no tax gross‑ups, and annual say‑on‑pay votes .

Investment Implications

• Alignment and at‑risk pay: High equity weighting and explicit performance metrics (EPS, working capital turns; PSRs tied to adjusted income, ROIC, and relative TSR) align incentives with shareholder outcomes; anti‑hedging/anti‑pledging and stock ownership guidelines strengthen alignment .
• Retention vs. selling pressure: Upcoming vesting (Jul 31, 2025/2026) and unvested balances (13,295 RS; 29,505 PSRs at FY 2024 year‑end) suggest predictable vest‑related trading windows; FY 2024 option exercises (15,000) and RS vesting may lead to incremental supply but are within normal program cadence . Double‑trigger CIC terms (2× salary and bonus) and robust clawbacks reduce abrupt departure risk but can create event‑driven payout sensitivity .
• Performance trajectory: Recent LTI cycle outperformed (FY 2022 program: income and ROIC above targets; TSR 97th percentile), while the FY 2019 cycle underperformed (TSR 18th percentile), highlighting cyclical sensitivity; analysts should monitor FY 2025 annual bonus targets reset materially higher (EPS +28% vs prior target) for execution risk .
• Governance quality: Use of independent consultant, absence of tax gross‑ups and option repricing, and robust clawback policy are positive signals for compensation discipline and downside protection .