Sally Wallace
About Sally Wallace
Sally A. Wallace is Executive Vice President, Business Operations at Leonardo DRS, Inc., a role she has held since December 2016; she is 58 as of December 31, 2024 . She holds an MBA from the University of Chicago, an M.S. in Mechanical Engineering from the University of Connecticut, and a B.S. in Engineering Physics from Grove City College . Company performance in 2024 featured 14% revenue growth, a 23% increase in adjusted EBITDA, record $8.5B backlog, $4.1B bookings with 1.3x book-to-bill, and a 61% share price increase, underpinning pay-for-performance alignment in her incentives .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Leonardo DRS | President, C4ISR Group | 2014–2016 | Led portfolio across intelligence, surveillance and reconnaissance businesses |
| Leonardo DRS | VP, Business Operations, Maritime & Combat Support Systems | 2008–2014 | Drove operations standards and program execution in maritime and support systems |
| DRS Power & Control Technologies | VP & General Manager | 2004–2008 | Ran business unit P&L with focus on power/control technologies |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| None disclosed | — | — | — |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 456,681 | 474,205 | 486,950 |
| Stock Awards ($) | 777,480 | 689,924 | 600,324 |
| Non-Equity Incentive Plan Compensation ($) | 777,480 | 689,924 | 493,300 |
| Pension Value Change ($) | 684,300 | 937,754 | — |
| All Other Compensation ($) | 52,208 | 57,011 | 57,842 |
| Total ($) | 1,970,670 | 2,198,407 | 1,638,417 |
Performance Compensation
Annual Incentive (ICP) design and 2024 outcomes
| Component | Weighting | Target | Actual | Payout Factor | Notes |
|---|---|---|---|---|---|
| Adjusted EBITDA ($mm) | 30% | 388 | 400 | 115% | Non-GAAP; margin focus |
| Free Cash Flow ($mm) | 30% | 187 | 190 | 110% | Cash generation and capital allocation |
| Bookings ($mm) | 20% | 3,280 | 4,077 | 200% | Demand leading indicator |
| Revenue ($mm) | 20% | 2,968 | 3,234 | 190% | Top-line growth |
| Company Financial Achievement | 75% of award | — | — | 145.5% | Weighted sum |
| Individual Performance Achievement (Wallace) | 25% of award | — | — | 183% | Operations, supply chain, business excellence |
| Sally Wallace ICP Details (2024) | Value |
|---|---|
| Target Incentive (% of Base) | 65% |
| Target Incentive ($) | $318,500 |
| Financial Achievement ($) | $347,563 |
| Individual Achievement ($) | $145,714 |
| Calculated Award ($) | $493,277 |
| Earned Award ($) | $493,300 |
| Overall Achievement (%) | 155% |
Key 2024 achievements cited for Wallace included standardizing suppliers, new tools to improve supplier performance (enterprise supply chain dashboard, supplier quality DataMart, price agreements), and business excellence savings with an 11% increase over last year and program execution improvements through enhanced planning models and training modules .
Long-Term Incentive (ECP) design
| Metric | Weighting | Performance Period | Definition |
|---|---|---|---|
| Relative TSR | 40% | 2024–2026 | Percentile vs S&P Aerospace & Defense Select Index constituents; 60-day avg prices; dividends reinvested |
| 3-year Avg Adjusted Diluted EPS | 40% | 2024–2026 | Adjusted EPS excluding specified items; diluted share count |
| 3-year Avg ROIC | 20% | 2024–2026 | Avg NOPAT / Invested Capital with defined adjustments |
| 2024 Grants (ECP) | Grant Date | Target Units | Vesting |
|---|---|---|---|
| PRSUs | 4/16/2024 | 13,011 | Earned 0–200% based on metrics; cliff vest 4/1/2027 |
| RSUs | 4/16/2024 | 13,011 | Time-vested ratably over 3 years from vesting commencement; annual installments |
| 2022 PRSUs (earned on 3/15/2025) | Target | Total Performance Achievement | Actual Shares Earned |
|---|---|---|---|
| Sally Wallace | 28,369 | 164.42% | 46,645 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of 4/7/2025) | 59,653 shares; less than 1% of outstanding |
| Shares Outstanding (record date) | 266,087,957 |
| Unvested RSUs (12/31/2024) | 13,011 units; $420,385 market value at $32.31 |
| PRSUs (2024 grant; unearned at max shown) | 13,011 units; $840,771 market value at max |
| PRSUs (2023 grant; unearned at max shown) | 21,756 units; $1,405,873 market value at max |
| 2022 PRSUs (vested 3/15/2025) | 28,369 units at actual performance shown ; earned 46,645 on vest |
| Stock Ownership Guidelines | Other NEOs: 3x base salary; all NEOs satisfied as of 12/31/2024 |
| Hedging/Pledging | Prohibited for officers/directors under Insider Trading Policy |
| 2024 Vested Stock | 50,280 shares; $1,531,110 value realized |
No options were granted/ exercised by NEOs in 2024; Wallace’s outstanding awards are RSUs and PRSUs under the ECP .
Employment Terms
| Scenario | Cash Severance ($) | Benefits PV ($) | Accelerated Equity ($) | Total ($) |
|---|---|---|---|---|
| Involuntary Termination without Cause (or for Good Reason) With Change in Control | 2,339,750 | 51,008 | 3,234,489 | 5,625,247 |
| Involuntary Termination without Cause | 1,053,500 | 30,605 | — | 1,084,105 |
| Disability or Death | 493,300 | — | 3,234,489 | 3,727,789 |
- Plan design: Double-trigger CIC benefits under the Executive Severance Plan (lump sum equals 2.5x base salary + ICP target, plus pro-rated current-year ICP; COBRA reimbursements up to 30 months), with non-CIC terminations paid over 18 months (base + pro-rated ICP + unpaid prior-year ICP) and COBRA up to 18 months; no excise tax gross-ups; benefits reduced if beneficial for after-tax proceeds .
- Covenants: Confidentiality (indefinite as long as information remains confidential) and non-solicit for 12 months post-termination; return of company property .
- Clawbacks: SEC/Nasdaq-compliant clawback policy adopted Oct 2, 2023 for 3-year look-back on incentive comp for current/former executives; ICP/ECP have restatement- and cause-related clawbacks .
- Pension: Defined-benefit plan PVAB $465,107; credited service 15.9 years; plan frozen as of Dec 31, 2011 .
Compensation Structure Notes and Peer Benchmarking
- Philosophy: Above-median pay for above-median performance; variable equity emphasis; balanced RSUs/PRSUs; no guaranteed increases; caps at 2x target .
- Consultant: Exequity; independence assessed and no conflicts in 2024 .
- 2024 Peer Group: AAR, AJRD, Barnes, BWXT, CACI, Crane, Curtiss-Wright, HEICO, Hexcel, HII, Mercury Systems, Moog, SAIC, TDY, V2X, Woodward; composition revised vs prior year .
- Say-on-Pay: ~98% approval in 2024, viewed as supportive of program .
Investment Implications
- Pay-for-performance alignment is strong: Wallace’s 2024 ICP paid at 155% driven by above-target bookings, revenue, EBITDA and FCF; individual operational execution rated 183%, consistent with supply chain and business excellence achievements .
- Vesting cadence indicates potential share delivery events: 2023 PRSUs cliff vest 4/1/2026; 2024 PRSUs 4/1/2027; RSUs vest annually over three years—monitor Form 4s for sale pressure around vest dates; 2024 stock vesting totaled 50,280 shares for Wallace .
- Alignment/retention: Stock ownership guidelines met (3x base), hedging/pledging prohibited, and clawbacks robust—mitigates misalignment risk . Severance economics under CIC (double-trigger, 2.5x multiple) are standard for aerospace-defense peers, lowering abrupt departure risk while limiting single-trigger windfalls .
- Performance backdrop: DRS delivered strong 2024 operational metrics and market performance (61% share price increase), supporting sustainability of equity-driven incentives; continue to track company-level metrics that drive PRSU outcomes (relative TSR vs S&P A&D Select Index, adjusted EPS, ROIC) as trading signals into 2026–2027 vest cycles .