Zachary Parker
DLH HoldingsAbout Zachary Parker
Zachary C. Parker, age 67, is President, Chief Executive Officer, and Director of DLH Holdings Corp. (DLHC). He has served as CEO since February 2010 and has been a director since 2010, bringing 25+ years of government services leadership experience across DoD and federal civilian markets . Under his tenure, FY2024 revenue was $395.9M (+5.3% YoY) and Adjusted EBITDA was $42.0M (flat YoY), with EBITDA up to $42.0M vs. $32.7M in FY2023; net income was $7.4M (vs. $1.5M in FY2023) . DLH’s pay-versus-performance table shows a TSR value of a $100 initial investment at $78.85 in FY2024 (vs. $94.11 FY2023; $101.32 FY2022), reflecting recent share underperformance despite operational gains .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| DLH Holdings Corp. | President & CEO; Director | CEO since 2010; Director since 2010 | Deep operating knowledge of DLH; industry expertise in federal services |
| Northrop Grumman | Senior/executive roles | ~19 years | Core DoD/federal market experience |
| GE Government Services (now part of Lockheed Martin) | Senior/executive roles | ~7 years | Government services operations leadership |
| VSE Corporation | Executive role | ~3 years | Federal services domain experience |
| VT Group | President; previously EVP, Business Development | ~2 years (incl. roles starting March, year not disclosed) | P&L leadership and growth execution |
External Roles
No current external public company directorships or committee roles were disclosed for Mr. Parker in the latest proxy. If any exist, they were not included in the filing .
Fixed Compensation
Multi-year summary (Summary Compensation Table – SCT):
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $675,000 | $725,000 |
| Bonus ($) | — | — |
| Non-Equity Incentive Plan Compensation ($) | $553,734 | $606,785 |
| Stock Awards ($) | $695,175 | $811,555 |
| All Other Compensation ($) | $35,414 | $22,659 |
| Total ($) | $1,959,323 | $2,165,999 |
Additional contract terms in effect:
- Base salary step-up under employment agreement: $675,000 year 1; at least $725,000 year 2; at least $750,000 year 3 .
- Annual target bonus: 100% of base; no payout <85% of target; cap 150% of base .
Performance Compensation
Annual cash incentive (FY2024) design and outcomes:
| Executive | Metric | Weight | Target | Actual | Achievement | Payout Method |
|---|---|---|---|---|---|---|
| Zachary C. Parker | Revenue | 20% | $422.0M | $395.94M | 93.8% | Weighted factor vs. target |
| EBITDA | 60% | $46.6M | $42.34M (adjusted) | 90.9% | Weighted factor vs. target | |
| Bookings | 20% | $75.0M | $69.58M | 92.8% | Weighted factor vs. target | |
| Overall Result | — | Target Bonus $725,000 | — | 83.7% | Actual cash bonus $606,555 |
Long-term equity incentives (structure and vesting):
- FY2024 grant (12/15/2023): 50% PRSUs / 50% time-based RSUs; CEO received 58,176 PRSUs and 58,176 time-based RSUs; time-based vests 9/30/2026; PRSUs measured over 3-year period ending 9/30/2026 on revenue growth (30% above FY2023 base, ex-acquisitions post-grant) and stock-price target ($25.65, 225% above baseline 30-day average), equally weighted; thresholds at 80%/100%/125% with 80%/100%/125% payout; pro-rata vesting on certain terminations; change-in-control vesting at target or actual if greater after one-year anniversary and qualifying termination .
- FY2025 grant (post-FY2024): 244,458 RSUs to CEO (50/50 PRSU/RSU), target value 250% of 2025 salary; PRSUs measured over 3-year period ending 9/30/2027 on revenue growth (30% above FY2024 excluding CMOP revenues) and stock-price target ($23.04, 225% above baseline 30-day average), equally weighted; time-based vests 9/30/2027 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 798,032 shares (5.5% of outstanding); includes 35,000 vested options; excludes unvested RSUs |
| Options | 35,000 options at $6.46, expiring 11/29/2027 |
| Unvested time-based RSUs | 55,282 (granted 1/27/2023; vest 9/30/2025) and 58,176 (granted 12/15/2023; vest 9/30/2026) |
| Outstanding PRSUs (unearned) | 55,283 (performance period ends 9/30/2025) and 58,176 (performance period ends 9/30/2026) |
| Upcoming grant (FY2025) | 244,458 RSUs (50% PRSUs, 50% time-based), performance period to 9/30/2027; TBRSUs vest 9/30/2027 |
| Anti-pledging/hedging | Company policy prohibits pledging and hedging by directors/officers/key employees |
Board stock ownership guidelines apply to non-employee directors (5x annual cash retainer within five years). Executive ownership guidelines were not disclosed in this filing .
Employment Terms
| Term | Key Provision |
|---|---|
| Agreement | Effective 10/1/2022; term through 9/30/2025; Board to nominate him during term |
| Base salary schedule | $675k (year 1), ≥$725k (year 2), ≥$750k (year 3) |
| Annual bonus | Target 100% of base; 0% if <85% of target; cap 150% of base |
| LTI target values | 200% (year 1 grant); 225% (year 2); 250% (year 3); split 50% PRSUs / 50% time-based RSUs with 3-year vest |
| Severance (no cause/good reason) | 24 months base salary; up to 18 months benefits; accrued but unpaid comp; accelerate time-based equity vesting |
| Death/Disability | Accrued comp; pro rata bonus; accelerate outstanding equity; disability includes 12 months base salary |
| Change in Control (within 180 days + qualifying termination) | 250% of base; up to 18 months benefits; accrued comp; accelerate vesting of all equity; 280G cutback to avoid excise tax |
| Clawback | Nasdaq-compliant recoupment for accounting restatements |
Board Governance (Director role, committees, dual-role implications)
- Board role: Director since 2010; CEO and Director dual-role exists, but Chairman is an independent director (Frederick G. Wasserman), mitigating CEO/Chair concentration concerns .
- Independence/committee structure: Compensation Committee consists entirely of independent, non-employee directors and deliberates outside CEO presence; Audit Committee is fully independent .
- Committee memberships: Mr. Parker is not listed as serving on Audit/Comp/Nominating committees, which are comprised of independent directors .
- Attendance: All then-current directors attended the March 14, 2024 annual meeting .
Performance & Track Record
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenue ($M) | — | 375.9 | 395.9 |
| EBITDA ($M) | — | 32.7 | 42.0 |
| TSR – $100 initial value ($) | 101.32 | 94.11 | 78.85 |
| Net Income ($M) | 23.3 | 1.5 | 7.4 |
Additional operating context:
- Backlog: $690.3M at 9/30/2024 ($155.1M funded) .
- VA CMOP recompete risk: procurements set aside for SDVOSB primes; DLH continues to operate 7 CMOP sites as prime under sole-source IDIQ while competitions proceed; DLH may pursue subcontract roles on wins by partners .
Compensation Structure Analysis
- Mix and rigor: CEO annual bonus tied 80% to financials (60% EBITDA, 20% revenue) and 20% to bookings; FY2024 paid at 83.7% of target reflecting under-target financial achievement, indicating downward sensitivity to performance .
- Shift toward RSUs/PRSUs: LTI utilizes 50% PRSUs/50% time-based RSUs with three-year vesting; PRSUs tied to multi-year revenue growth (exclusions to avoid acquisition inflation) and a stock price hurdle requiring a 225% increase vs. baseline, creating high at-risk orientation .
- Consultant/peer oversight: Korn Ferry engaged for market benchmarking; the company targets market-median practices; committee independence affirmed .
- Governance protections: Clawback policy; anti-hedging/anti-pledging; independent committee processes .
Vesting Schedules and Insider Selling Pressure
- Time-based RSUs scheduled to vest on 9/30/2025 (55,282 shares) and 9/30/2026 (58,176 shares), with an additional FY2025 grant vesting 9/30/2027; potential supply overhang exists around these dates, though company policy prohibits hedging/pledging and committee oversight governs transactions .
- PRSUs vest only upon achieving multi-year revenue and stock-price targets through 9/30/2025, 9/30/2026, and 9/30/2027 performance periods, limiting realizable value absent strong execution and share performance .
Related Party/Red Flags Check
- Related party: Chairman’s son is a non-executive employee; compensation approved under related-party oversight process; no Parker-specific related party transactions disclosed .
- Anti-hedging/pledging: Policy bans both, reducing misalignment risk .
- Repricing/modifications: No option repricing or award modifications disclosed in the period .
- Legal proceedings: No material legal proceedings disclosed .
Equity Ownership & Alignment (detail table)
| Ownership/awards | Count/terms |
|---|---|
| Beneficial shares (% out) | 798,032 (5.5%) |
| Vested options | 35,000 @ $6.46; exp. 11/29/2027 |
| Unvested RSUs (time-based) | 55,282 (vest 9/30/2025); 58,176 (vest 9/30/2026) |
| PRSUs (performance) | 55,283 (period to 9/30/2025); 58,176 (period to 9/30/2026) |
| FY2025 RSUs/PRSUs | 244,458 total (50/50); time-based vest 9/30/2027; PRSUs to 9/30/2027 |
Say-on-Pay & Shareholder Feedback
Say-on-pay approval percentages were not disclosed in the cited sections of the 2025 proxy. If needed, we can retrieve historical vote outcomes upon request .
Compensation Peer Group (Benchmarking)
The Compensation Committee leveraged Korn Ferry for 2024 compensation decisions and aims for market-median levels; specific peer group composition was not disclosed in the cited sections .
Expertise & Qualifications
- Domain: Extensive government services experience (DoD, HHS/VA/DHA) and growth/BD leadership from prior roles .
- Board qualification: As CEO/Director, provides deep operational/strategic insight; committees composed of independent directors bring financial expertise (e.g., Audit Chair) .
Investment Implications
- Alignment: 5.5% beneficial ownership, multi-year PRSU hurdles (revenue + steep stock-price targets), and anti-pledging/hedging policies point to strong pay-performance alignment and reduced misalignment risk .
- Retention/overhang: Layered RSU vest dates (2025/2026/2027) provide retention; potential share supply around vesting dates should be monitored for trading impact .
- Payout sensitivity: FY2024 bonus paid at 83.7% versus target amid under-target revenue/EBITDA/bookings—indicating downside responsiveness and potential upside torque on execution .
- Execution risks: CMOP recompete set-aside shifts could pressure revenue mix; however, DLH maintains backlog and may participate via subcontracting; monitoring contract outcomes and bookings cadence is key for equity realization of PRSUs .
- Share performance target: PRSUs require stock-price averages of $25.65 (FY2024 grant to 2026) and $23.04 (FY2025 grant to 2027), establishing explicit market-based hurdles that could influence strategic emphasis and investor expectations .