Steven Walker

About Steven Walker

Steven M. Walker, age 60, served as HEICO’s Chief Accounting Officer (principal accounting officer) and Assistant Treasurer since June 1, 2012, after joining the company in 2002 as Corporate Controller; he is a Certified Public Accountant and member of the American Institute of Certified Public Accountants. He retired from his executive roles effective February 14, 2025 and will remain an employee through March 31, 2025 to support transition; his retirement was not due to any disagreement with the company. Company performance during his recent tenure included strong multi-year gains: FY2024 total shareholder return on a $100 initial investment reached $234.29 for HEI common and $206.55 for HEI.A, with FY2024 Net Income of $514.11 million and EBITDA of $1,002.23 million, underscoring consistent value creation. HEICO identifies EBITDA, Net Income, and Cash Flow as the most important financial measures used to link executive pay to performance.

Past Roles

External Roles

Fixed Compensation

Multi-year cash compensation:

Notes:

• “All Other Compensation” for Walker principally reflects company contributions to the Savings and Investment Plan ($14,950/$16,000/$16,950 for FY22/FY23/FY24) and HEICO Leadership Compensation Plan matching contributions ($10,665/$11,187/$11,699) plus insurance benefits ($20,096/$17,552/$14,964).

Performance Compensation

Walker was not granted non-equity incentive plan awards under HEICO’s 2018 Plan in FY2024 and did not receive option grants in FY2024 (options were granted in prior years). Lead NEO bonus mechanics for 2024 targeted 10% YoY growth in Net Income, EBITDA, and Cash Flow with scaling around target and capped payouts, but Walker is not part of those payouts for FY2024.

Company performance metrics (targets vs actual, FY2024):

Equity award grant-date fair values (from SCT):

Equity Ownership & Alignment

Beneficial ownership and option status (as of Jan 17, 2025; within 60 days exercisable):

Outstanding equity awards (vesting 20% per year over 5 years; as of 10/31/2024):

Insider transactions and potential selling pressure:

• FY2024 options exercised: 10,485 Class A shares; value realized $1,243,805.
• Unvested option acceleration value upon Acceleration Event: $727,499 as of 10/31/2024.

Hedging and pledging:

• HEICO states no formal hedging policy, but none of the named executive officers have ever hedged their HEICO shares; no pledging disclosures identified for Walker.

Stock ownership guidelines:

• Historically, HEICO did not adopt ownership guidelines for NEOs; directors must purchase HEICO shares equal to ~58% of their annual board retainer. The Compensation Committee adopted share ownership guidelines referenced on page 31 for future proxy statements.

Employment Terms

• Employment agreements: HEICO states it does not have employment agreements with its named executive officers and does not provide “golden parachutes.”
• Retirement: Walker retired from Chief Accounting Officer and Assistant Treasurer roles effective Feb 14, 2025; remains employed through Mar 31, 2025 to support transition; no disagreements.
• Change-in-control and termination economics: Under the Leadership Compensation Plan (LCP), as of 10/31/2024 Walker’s change-in-control payment obligation was $0 and termination payment obligation was $1,737,117. Unexercisable options would immediately vest upon an Acceleration Event; the value of accelerated vesting for Walker was $727,499 at 10/31/2024.
• Clawback: Executive compensation clawback policy adopted in September 2023 for accounting restatements.
• Non-compete / non-solicit / garden leave: Not disclosed.

Compensation Structure Analysis

• Shift away from option grants: The Compensation Committee refrained from issuing stock options in FY2024 and will tie future option grants and LCP awards to company performance, responding to shareholder feedback on pay-for-performance rigor.
• Cash-heavy for Walker in FY2024: With no FY2024 option grant and no 2018 Plan award, Walker’s FY2024 compensation was predominantly fixed cash salary plus a discretionary cash bonus.
• Transparency on bonus metrics improved: Lead NEO bonus targets disclosed for Net Income, EBITDA, and Cash Flow with clear scaling; Walker’s bonus framework was not specifically detailed.

Director/Committee Governance Context (for policies affecting executives)

• Board independence and committees: Key Board committees (Finance/Audit, Compensation, Nominating, Stock Option) are fully independent; attendance in FY2024 was 100%.
• No employment agreements, no option repricing, and no “poison pill”; executive compensation aligned with long-term shareholder interests per stated policies.

Performance & Track Record

• Company TSR: Value of a $100 investment (Oct 31, 2020 baseline) by year-end: FY2024 $234.29 (HEI Common), $206.55 (HEI.A), vs Dow Jones U.S. Aerospace Index $211.88.
• Net Income and EBITDA: FY2024 Net Income $514.11mm and EBITDA $1,002.23mm; FY2023 Net Income $403.60mm and EBITDA $758.31mm. HEICO assesses EBITDA as a key performance measure linking pay and performance.
• Role in reporting: Walker signed the FY2024 10-K as Principal Accounting Officer, evidencing accountability for disclosure quality and controls.

Risk Indicators & Red Flags

• Hedging/Pledging: No hedging by NEOs; pledging not disclosed—no red flag identified.
• Tax gross-ups / option repricing: Not disclosed for Walker; company states it does not reprice options without shareholder approval.
• Related party transactions: None disclosed for Walker.
• Say-on-pay: Annual advisory vote conducted; committee engaged shareholders and implemented changes. Specific approval percentages not disclosed in the cited sections.

Equity Ownership & Alignment Details

Vested vs unvested options and expirations provide alignment with long-term performance, with staggered expirations from 2026 to 2033; unvested portions vest 20% annually over five years. Ownership levels are modest (<1%) but complemented by options and plan allocations; no hedging activity and no pledging disclosed.

Employment Contracts, Severance, and Change-of-Control Economics

• No employment contract; no golden parachute; standard plan-based termination/change-in-control treatment via LCP and equity plans.
• LCP obligations at 10/31/2024: COC $0; termination $1,737,117 for Walker.
• Option acceleration: Immediate vesting upon COC or specified corporate transactions; Walker’s unvested option acceleration value $727,499.

Investment Implications

• Alignment and dilution: Walker’s ownership is less than 1% with meaningful option exposure and plan allocations; absence of pledging and hedging reduces misalignment risk.
• Near-term selling pressure: FY2024 exercises ($1.24mm value) and upcoming expirations (2026/2028/2029/2031/2033) suggest periodic liquidity events rather than structural selling pressure; retirement in Feb 2025 further reduces forward insider sales risk.
• Pay-for-performance signal: Company-wide shift to performance-based options and LCP awards enhances alignment; Walker’s FY2024 package was largely cash and not under the 2018 Plan, but his retirement limits future exposure.
• Change-in-control economics: Walker’s modest COC exposure ($0 LCP COC; $727k option acceleration) implies limited windfall risk; termination LCP obligation of $1.74mm is the primary cash component.