Michael Dippold
About Michael Dippold
Executive Vice President and Chief Financial Officer of Leonardo DRS (appointed January 1, 2017), responsible for finance, SEC reporting, tax/treasury and capital strategy; previously SVP Corporate Controller and earlier roles at DRS after four years at KPMG. Education: BS in Accounting, Pennsylvania State University (2003). Age: 44; CFO tenure: ~8+ years. Company performance under the current leadership cohort includes: 2023 revenue $2.8B (+5% YoY), Adjusted EBITDA margin 11.5%, FCF $159M (+115% YoY), 1.2x book-to-bill and record backlog ($8B), and ~57% share price increase in 2023; cumulative TSR since listing (11/29/2022 to 12/31/2024) implies $100 growing to $294 for DRS, outperforming the peer index ($157) . Dippold’s 2024 achievements cited by the company include tax planning that permanently reduced the effective tax rate (boosting EPS), meeting quarterly commitments, and leading capital allocation (dividends/buybacks, capex for a new SC facility) .
Sources: DRS website bio and USO profile (role/education/appointment) ; Age (44) from GlobalData ; Performance metrics from DRS DEF 14A and achievements .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Leonardo DRS | EVP & CFO | 2017–present | Led finance strategy, tax planning (permanent ETR reduction), met commitments, directed capital allocation (dividends, buybacks, SC capex) . |
| DRS Technologies | SVP, Corporate Controller | Dec 2015–Jan 2017 | Financial management, gov’t compliance, audit interface, M&A oversight . |
| DRS Technologies | VP, Assistant Controller | Dec 2010–Dec 2015 | Controller leadership; internal financial reporting and controls . |
| KPMG | Auditor (Defense clients incl. DRS) | ~2003–2007 | Supported DRS acquisitions (IDT, ESSI) and Sarbanes-Oxley implementation . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Advanced Acoustic Concepts LLC | Treasurer | 2016–present | Affiliated defense JV; role listed in external databases . |
Fixed Compensation
Multi-year summary compensation (as reported in the company’s Summary Compensation Table):
| Fiscal Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|
| 2024 | 526,747 | 943,375 | 632,600 | 58,554 | 2,161,276 |
| 2023 | 512,346 | 985,609 | 985,609 | 57,819 | 2,829,209 |
| 2022 | 493,901 | 1,351,936 | 1,351,936 | 52,885 | 2,867,822 |
Additional fixed pay context (2024):
- Base salary (as of March 2024): $530,000 (+3% YoY) .
- “All Other Compensation” detail (2024): 401(k) $19,269; Executive allowance $29,400; Vacation payout $9,885 .
Performance Compensation
Annual Incentive (ICP) – 2024 outcomes
- ICP design changes for 2024: metrics now Bookings 20%, Adjusted EBITDA 30%, Revenue 20%, Free Cash Flow 30%; minimum threshold payout raised to 50%; discretionary factor removed .
- Company Performance Factor: 145.5, weighted 75% of ICP; Individual goals weighted 25% .
| Name | Target Incentive (% base) | Target ($) | Financial Achievement ($) | Individual Achievement ($) | Earned Award ($) | Overall Achievement (%) |
|---|---|---|---|---|---|---|
| Michael Dippold | 75 | 397,500 | 433,772 | 198,750 | 632,600 | 159 |
Long-Term Incentive (ECP) – 2024 PRSUs and RSUs
PRSU design (2024 grants; performance period 2024–2026; vest Apr 1, 2027, subject to service/performance):
- Metrics/weights: relative TSR 40%, 3-year Average Adjusted Diluted EPS 40%, 3-year Average ROIC 20%; payout curve 50%/100%/200% for threshold/target/max; linear interpolation .
- 2024 change: replaced revenue growth metric with average adjusted diluted EPS; refined ROIC; rTSR comparator moved to S&P Aerospace & Defense Select Industry Index .
| Metric | Weight | Payout Curve | Vesting |
|---|---|---|---|
| Relative TSR | 40% | 50%/100%/200% of target (threshold/target/max) | Apr 1, 2027 (cliff) |
| Avg Adjusted Diluted EPS (3-yr) | 40% | Same as above | Apr 1, 2027 (cliff) |
| Avg ROIC (3-yr) | 20% | Same as above | Apr 1, 2027 (cliff) |
2024 grants (Plan-Based Awards):
| Grant Type | Grant Date | Target Shares | Grant-Date Fair Value ($) |
|---|---|---|---|
| PRSUs | 4/16/2024 | 20,446 | 503,582 |
| RSUs | 4/16/2024 | 20,446 | 439,793 |
Vesting mechanics and realized value:
- RSUs: vest in three equal annual installments starting on the grant date, subject to continued service .
- 2024 vested stock value realized: 109,584 shares; $3,500,050 for Dippold .
- The company states it does not currently grant stock options; none of the NEOs received/exercised options in 2024 .
Equity Ownership & Alignment
Ownership, policy, and outstanding awards:
| Item | Detail |
|---|---|
| Beneficial ownership (Apr 7, 2025) | 78,230 shares; <1% of outstanding (266,087,957) |
| Stock ownership guidelines | CEO 5x base; Other NEOs 3x base; 5-year compliance window; all NEOs satisfied as of 12/31/2024 |
| Hedging/pledging | Prohibited for executives and directors |
Outstanding equity awards (as of Dec 31, 2024):
| Grant Date | Unvested RSUs (#) | MV of RSUs ($) | Unearned PRSUs (#) | MV of PRSUs ($) |
|---|---|---|---|---|
| 5/8/2024 | 20,446 | 660,610 (at $32.31) | 20,446 (at max) | 1,321,221 |
| 4/18/2023 | 20,720 | 669,463 | 31,080 (at max) | 2,008,390 |
| 11/29/2022 | 13,509 | 436,476 | 40,527 | 2,152,960 |
Vesting schedule and potential selling pressure:
- Annual RSU tranches (from 2023/2024 grants) create recurring vest dates; PRSU cliffs: April 1, 2026 (2023 cycle) and April 1, 2027 (2024 cycle at max presentation), which can cluster liquidity events around these dates .
- Company prohibits hedging/pledging, which reduces misalignment risk .
Employment Terms
- Contract: No individual employment agreement for Dippold (only CEO has one); NEOs are covered by Severance Plan and award agreements .
- Restrictive covenants (for severance eligibility): confidentiality (duration tied to confidentiality of info), non-solicitation (12 months post-termination), return of company property; same covenants in RSU/PRSU agreements .
- Change-in-control/severance economics (as of 12/31/2024; uses $32.31 share price):
- Involuntary termination without cause (or for good reason) with Change in Control: Cash severance $2,716,250; Benefits PV $87,655; Accelerated LTI $4,740,782; Total $7,544,687 .
- Involuntary termination without cause: Cash severance $1,192,500; Benefits PV $52,593; Total $1,245,093 .
- Disability/Death: ICP component $632,600; Accelerated LTI $4,740,782; Total $5,373,382 .
- Governance provisions: double-trigger for CIC (no single-trigger), no excise tax gross-ups; clawback policy compliant with SEC/Nasdaq .
Performance & Track Record
- 2023 operating highlights: revenue ~$2.8B (+5%), bookings $3.5B (1.2x), backlog near $8B (+82%), Adjusted EBITDA margin 11.5%, FCF $159M (+115%), share price +~57% in 2023 .
- Pay vs Performance (company-level): cumulative TSR from listing to 12/31/2024 rose to $294 vs peer index $157; Net Income and Adjusted EBITDA trajectories disclosed in PVP table .
- CFO contributions (2024): tax planning to permanently lower ETR (EPS accretion), execution against quarterly commitments, capital allocation (dividends, buybacks, growth capex) .
Compensation Structure Analysis
- Mix shift and risk: Heavy equity-based pay (RSUs/PRSUs) with multi-year metrics and cliff vesting increases alignment but can reduce retention risk once large PRSU tranches vest (notably 2026/2027) .
- Metric rigor: 2024 improvements increased emphasis on profitability (EPS) and external performance (rTSR versus S&P Aerospace & Defense Select Industry Index), and refined ROIC, suggesting tighter linkage to shareholder returns .
- Annual plan alignment: 2024 ICP emphasizes growth and cash conversion (Revenue 20%, Bookings 20%, FCF 30%) and profitability (Adj. EBITDA 30%); overall payout at 159% of target for Dippold reflects strong performance (CPF 145.5) .
- Options: Not currently used; reduces leverage to upside but also limits risk of repricing controversies .
Compensation Peer Group and Say-on-Pay
- Peer group (2024): aerospace/defense names including BWXT, HII, HEICO, Hexcel, Teledyne, CACI, Woodward, Mercury Systems, MOOG, Barnes, Crane, V2X, Curtiss-Wright, SAIC, AAR, etc. (revised in 2023 with Exequity) .
- Say-on-Pay: ~98% approval at 2024 annual meeting; committee retained program with continued refinements .
Equity Ownership & Management Stock
| Holder | Shares | % |
|---|---|---|
| Michael Dippold (as of Apr 7, 2025) | 78,230 | <1% |
Policy alignment and safeguards:
- Ownership guideline for NEOs: 3x base salary; NEOs in compliance as of 12/31/2024 .
- Hedging and pledging prohibited; mitigates misalignment and forced liquidation risk .
Employment & Contracts – Additional Details
- Benefits under severance subject to release and restrictive covenants; long-term disability benefit equals 66 2/3% of monthly base (cap $15,000) while eligible .
- CEO-specific non-compete noted in proxy; for NEOs, non-compete not separately enumerated beyond plan covenants .
Expertise & Qualifications
- Education: BS Accounting, Penn State (2003) .
- Technical: Public company finance, treasury, SEC reporting; M&A, integrations; defense industry accounting and compliance (SOX) .
- Age: 44 .
Performance Compensation – Detailed Award Tables
2024 Grants of Plan-Based Awards (Dippold):
| Grant Date | PRSU Target (#) | PRSU Max (#) | RSU (#) | PRSU Grant-Date FV ($) | RSU Grant-Date FV ($) |
|---|---|---|---|---|---|
| 4/16/2024 | 20,446 | 40,892 | 20,446 | 503,582 | 439,793 |
Outstanding Awards at FY-end 2024 (Dippold):
| Grant Date | Unvested RSUs (#) | RSU MV ($) | Unearned PRSUs (#) | PRSU MV ($) | Notes |
|---|---|---|---|---|---|
| 5/8/2024 | 20,446 | 660,610 | 20,446 | 1,321,221 | PRSUs at max; vest 4/1/2027 |
| 4/18/2023 | 20,720 | 669,463 | 31,080 | 2,008,390 | PRSUs at max; vest 4/1/2026 |
| 11/29/2022 | 13,509 | 436,476 | 40,527 | 2,152,960 | Prior-cycle awards |
2024 Stock Vested:
| Name | Shares Vested (#) | Value Realized ($) |
|---|---|---|
| Michael Dippold | 109,584 | 3,500,050 |
Employment Terms – Potential Payments at Termination (as of 12/31/2024)
| Scenario | Cash Severance ($) | Benefits PV ($) | Accelerated LTI ($) | Total ($) |
|---|---|---|---|---|
| Involuntary w/ CIC (double-trigger) | 2,716,250 | 87,655 | 4,740,782 | 7,544,687 |
| Involuntary without cause (no CIC) | 1,192,500 | 52,593 | — | 1,245,093 |
| Death/Disability | 632,600 (ICP) | — | 4,740,782 | 5,373,382 |
Investment Implications
- Alignment and retention: High equity mix with PRSUs tied to rTSR/EPS/ROIC and sizable unearned shares (2023/2024 cycles) support alignment but create concentrated vesting events (April 2026/2027) that may precede liquidity and insider selling windows; monitoring Form 4s around those dates is prudent .
- Governance quality: Strong safeguards (clawback, no hedging/pledging, double-trigger CIC, no excise tax gross-ups) reduce red flags and support pay-for-performance integrity .
- Performance linkage: 2024 ICP and PRSU design emphasize growth, profitability, cash generation and market-relative returns; 2024 bonus paid at 159% reflects strong execution (CPF 145.5) .
- Ownership: Beneficial stake is modest (<1%), offset by meaningful unvested/uneared equity and compliance with 3x salary ownership guideline—overall positive but not a large outright stake .
- Track record: Demonstrated value creation (strong 2023 operating metrics and multi-year TSR vs peer index) with CFO-led tax and capital allocation initiatives; continued delivery vs guidance will be key to sustaining payout levels and mitigating execution risk .