Sign in

You're signed outSign in or to get full access.

James F. Mulato

Executive Vice President and President of Astronics Test Systems, Inc. at ASTRONICS
Executive

About James F. Mulato

Executive Vice President, President of Astronics Test Systems (ATS). Named executive officer (NEO) responsible for the Test segment at Astronics Corporation (ATRO) . Company performance has improved on revenue and EBITDA since 2022, while total shareholder return (TSR) over multi-year horizons remains below the S&P 500 benchmark .

Recent company financial trajectory:

  • Revenues grew from $534.9M (FY22) to $795.4M (FY24); EBITDA moved from -$9.8M (FY22) to $49.1M (FY24)*. Values retrieved from S&P Global.
  • Company cumulative TSR vs S&P 500 Index was approximately (-52.67%), (-57.07%), (-63.15%), (-37.69)%, and (-42.92)% for 1-, 2-, 3-, 4-, and 5-year windows ending 12/31/2024, underscoring underperformance vs the broader market .
MetricFY 2022FY 2023FY 2024
Revenues ($)534,894,000*689,206,000*795,426,000*
EBITDA ($)-9,836,000*16,787,000*49,137,000*
Note: Values retrieved from S&P Global.

Fixed Compensation

Multi-year summary (reported compensation):

YearBase Salary ($)Bonus ($)All Other Comp ($)Total ($)
2022359,430 — 30,025 759,705
2023370,213 188,582 (paid as stock bonus 3/1/24) 30,704 809,965
2024388,723 451,156 (cash) 38,063 (incl. $14,356 auto allowance and $17,250 401k) 1,228,723

Context on annual bonus structure:

  • Discretionary, not tied to fixed target weights; factors include profitability, multi-year sales growth, individual performance, and market data. 2023 bonuses were paid in stock; 2024 bonuses were paid in cash .

Performance Compensation

Equity incentives (PSUs/RSUs and options) emphasize multi-year performance and retention.

  • Performance RSUs – metric and payout framework:

    • 2024 grant: Earn-out based on company average annual Adjusted EBITDA as % of average annual revenue for 1/1/2024–12/31/2026; 50% payout at <10%, 100% at 10%–<15%, 150% at ≥15%; target awarded 2/22/2024 .
    • 2023 grant: Metric as above for 1/1/2023–12/31/2025; payout range 75%–115% of target .
    • 2022 grant: Outcome achieved was 75% of target (period 1/1/2022–12/31/2024) .

  • Option awards:

    • Typical vesting 33 1/3% per year; 10-year term. Option award agreements include minimum post-exercise holding: at least two years from grant and one year after exercise .

Key 2024 grants to Mulato:

InstrumentGrant DateMetric/TermsThreshold (#)Target (#)Max (#)Grant-Date FV ($)
Performance RSUs2/22/2024Avg annual Adjusted EBITDA % revenue (2024–2026)9,27518,55027,825350,781
Stock Options——————
Notes: 2024 options were not granted to Mulato; option grants in late 2023 vested 33 1/3% per year .

Performance plan detail and results:

PSU CyclePerformance PeriodMetricPayout RangeResult (if applicable)
2022 PSU2022–2024Avg annual Adjusted EBITDA % revenue50%–150%Earned at 75%; vested 2/24/2025
2023 PSU2023–2025Avg annual Adjusted EBITDA % revenue75%–115%In-flight (vests 2/23/2026)
2024 PSU2024–2026Avg annual Adjusted EBITDA % revenue50%–150%In-flight (vests 2/22/2027)

Equity Ownership & Alignment

Beneficial ownership (as of 4/2/2025):

  • Mulato: 172,717 Common; 4,791 Class B; includes 129,330 Common and 3,564 Class B subject to options exercisable within 60 days; includes 100 Common and 32 Class B held by spouse; beneficial ownership <1% of each class .
  • NEO ownership guidelines: The company does not have executive stock ownership guidelines; NEOs as a class held 3.4% of Common and 23.7% of Class B as of 4/2/2025 .
  • Hedging/pledging: Hedging prohibited under Insider Trading Policy; no pledging disclosure for Mulato. A pledging footnote applies to a director (not Mulato) .

Outstanding equity at FY-end 2024 (selected items):

  • Unearned PSUs (target): 12,550 (2022–2024 cycle), 11,500 (2023–2025), 18,550 (2024–2026); 2022–2024 RSUs vested 2/24/2025 .
  • FY2024 vesting: 8,048 shares acquired on vesting (value $152,107 on 3/1/2024 at $18.90/sh) .
  • Option portfolio across multiple strikes/expirations; most grants vest ratably over 3–5 years with 10-year expirations .

Insider trading and potential selling pressure (2025):

  • 9/5/2025: Sold 1,000 Common at $38.21 and 129 Class B at $37.73 .
  • 9/9/2025: Transferred 11,055 Common to former spouse pursuant to divorce settlement; also reflects losing reportable interest in certain shares previously attributed to spouse .
  • 9/30/2025: Acquired 1,280 Common via ESPP subscription (A code) .
  • 10/22/2025: Exercised expiring options for 4,300 Common and 1,387 Class B at $27.72 .

Employment Terms

  • No Employment Termination Benefits Agreement (no company-specific change-of-control severance) for Mulato .
  • Not a participant in the company’s SERP or SERP II pension programs .
  • Company-wide policies:
    • Clawback adopted 12/1/2023 under SEC/Nasdaq rules (applies to current and certain former Section 16 officers) .
    • Insider Trading Policy prohibits hedging and short-term derivative transactions in company securities .
    • LTIP permits, at Board discretion, certain actions upon a change in control (e.g., assumption, substitution, acceleration), but Mulato lacks an individual parachute agreement .

Compensation Structure Details

Year-over-year mix and trends:

  • 2023 bonus paid in stock; 2024 bonus returned to cash, materially increasing cash compensation vs 2023 .
  • Long-term incentive emphasis on performance-based RSUs using multi-year Adjusted EBITDA margin-to-revenue as the central metric (with calibrated payout ranges), complementing time-vested options for retention .

2024 Grants and vesting mechanics:

  • 2024 PSUs: three-year performance cycle (2024–2026) with vest in early 2027; RSU settlement subject to a minimum six-month holding period .
  • Options: typical 33 1/3% annual vesting; post-exercise holding requirements embedded in award agreements .

Governance and shareholder alignment safeguards:

  • Say-on-Pay: ~91% approval at 5/23/2023 meeting; Compensation Committee maintained approach into 2025 .
  • 2017 LTIP amendment: Board seeks 650,000 additional shares for LTIP, implying potential dilution of ~7.39% including outstanding awards; plan prohibits repricing without shareholder approval and enforces minimum vesting schedules .

Investment Implications

  • Pay-for-performance linkage is strengthening: Mulato’s PSUs hinge on multi-year Adjusted EBITDA as a percentage of revenue with defined payout bands (50%–150%), and the 2022 cycle paid at 75%—indicating discipline in the structure and outcomes .
  • Retention dynamics: Significant unearned PSUs across 2023–2026 cycles and option ladders support retention; six-month post-settlement holding on RSUs and option holding provisions add alignment .
  • Limited parachute exposure: Mulato lacks a bespoke change-of-control severance agreement and is not in SERP/SERP II, reducing “golden parachute” risk and enhancing shareholder alignment in transactions .
  • Insider activity watchlist: 2025 included modest open-market sales, a divorce-related share transfer (non-sale), ESPP participation, and option exercises of expiring grants—overall not indicative of systematic de-risking, but monitor upcoming vest windows (2026–2027) for supply overhang .
  • Dilution considerations: The requested LTIP share increase and overall potential dilution (~7.39%) merit tracking; sustained equity issuance rates and burn (1.59% average over 2022–2024) should be weighed against performance progress .
  • Performance risk: Company TSR has lagged the S&P 500 across 1–5 year windows; despite revenue and EBITDA recovery, equity awards may be sensitive to future margin execution and potential changes to targets or payout curves .

References:

  • Executive status, compensation framework, clawback, insider policy, grants, vesting: .
  • Summary Compensation Table (2022–2024) and perquisites: .
  • Ownership details: .
  • LTIP amendment, dilution, plan safeguards: .
  • TSR and pay-versus-performance: .
  • Employment terms (no individual COC benefits; no SERP/SERP II): .
  • Form 4 transactions (2025): SEC and company investor links cited above.

Footnotes:

  • Values retrieved from S&P Global.