Victor Mendelson

About Victor Mendelson

Victor H. Mendelson is Co-CEO (effective May 1, 2025), long-time Co-President (since 2009), Director (since 1996), and President & CEO of HEICO’s Electronic Technologies Group (ETG), which he founded in 1996; age 57; education: AB, Columbia University; JD, University of Miami School of Law . Under current leadership, HEICO delivered FY2024 net sales +30% to $3.858B, net income +27% to $514.1M, operating income +32%, with operating margin 21.4% . ETG’s Q1 FY2025 net sales grew 16% with operating margin 23.1% (27.2% before amortization), and backlog reached a record quarter-end level; management continues to guide to growth across segments . Since the early 1990s, $100,000 invested in HEICO became ~$99.2M by Oct 31, 2024 (~22% CAGR), framing long-term value creation during the Mendelson team’s tenure .

Past Roles

External Roles

Fixed Compensation

Multi-year compensation for Victor H. Mendelson (USD):

Breakdown of “All Other Compensation” (FY2024):

• Director fees: $265,000; Insurance: $65,320; HEICO 401(k) plan contribution: $16,950; HEICO Leadership Compensation Plan (LCP) contributions: $1,731,603; Company car: $6,271 .

Notes and structure changes:

• No NEO stock options were granted in FY2024; the Compensation Committee paused options in response to shareholder outreach, with intent to resume in FY2025 and tie to performance .
• Future LCP supplemental awards to be performance-vested; historically time-vested and generally vest over 4 years, paid at retirement .

Performance Compensation

FY2024 annual bonus metrics and outcomes (common across Lead NEOs including Victor):

Payout framework:

• Threshold 5% YoY growth; Target 10%; Max 37.5% over FY2023 baseline; bonuses scale −10% per 1% below target; +2% per 1% above target, capped at 300% of salary for Lead NEOs .
• Victor’s FY2024 non‑equity incentive earned: $2,860,801 .

Stock options:

• Policy: options align pay with shareholder value; paused in FY2024; future grants to be performance-based; no timing around MNPI .

Equity Ownership & Alignment

Beneficial ownership (as of Jan 17, 2025):

Ownership breakdown (selected components):

• Options exercisable within 60 days: 432,813 HEI .
• Trusts for immediate family: 568,140 HEI; 137,199 HEI.A .
• VHM Management Limited Partners: 172,515 HEI .
• Mendelson International Corporation: 191,440 HEI.A .
• HEICO Savings & Investment Plan (allocated): 93,062 HEI; 88,289 HEI.A .
• Victor H. Mendelson Revocable Investment Trust: 28,806 HEI; 8,465 HEI.A .
• Children: 4,762 HEI; 19,136 HEI.A .
• Keogh account: 921 HEI; 16,133 HEI.A .
• HEICO Leadership Compensation Plan (allocated): 4,072 HEI .

Option exercises (FY2024):

• Exercised 97,656 HEI options; value realized $23,456,991 .

Outstanding options (FY2024 year-end; vest 20%/yr over 5 years):

Policies and alignment:

• No executive ownership guidelines (long-standing significant holdings); directors must purchase stock equal to ~58% of annual retainer .
• Insider trading policy in place; no formal hedging policy, and NEOs have never hedged shares (statement of practice) .
• No disclosure of share pledging in the proxy; none indicated in ownership footnotes .

Employment Terms

Board Governance

• Director since 1996; non-independent (“inside” director) given executive status .
• Committee roles: Environmental, Safety & Health Committee member; committee met 4x in FY2024 .
• Board attendance: 100% for FY2024 meetings and committees .
• Board independence mix: 70% independent; committee leadership by independents; independent directors hold executive sessions with rotating presiding director .
• Director compensation policy: annual retainer $250,000; $15,000 per committee; $10,000 per committee chair; directors required to purchase stock equal to $145,000 (~58% of retainer) .
• Actual director fees for Victor (as employee-director): $265,000 in FY2024 (in “All Other Compensation”) .

Say‑on‑Pay, Peer Group, and Shareholder Feedback

• Say‑on‑Pay approval ~66% at 2024 Annual Meeting; committee enhanced disclosure and tied future options and LCP supplemental awards to performance; refrained from FY2024 NEO option grants .
• Benchmarking advisors: FW Cook (comp levels/peers), JLM Actuarial (LCP/benefits); independent, no conflicts .
• Peer set for benchmarking includes: AMETEK, CAE, Crane, Curtiss‑Wright, Dover, Hexcel, Howmet, Moog, RBC Bearings, Teledyne, Textron, TransDigm, Woodward .

Performance & Track Record

• FY2024 consolidated performance: net sales $3.858B (+30%), net income $514.1M (+27%), operating income $824.5M (+32%), operating margin 21.4% .
• ETG (Victor’s group) Q1 FY2025: net sales +16% to $330.3M; operating income +38% to $76.5M; operating margin 23.1% (27.2% pre-amort.); backlog at record .
• Strategic M&A leadership: ETG completed 55 acquisitions under Victor; ETG operates 59 facilities across 8 countries and 19 U.S. states with ~5,400 team members .

Compensation Structure Analysis

• Mix shift in FY2024: zero option grants vs. $9.1M in FY2023; larger cash and deferred (LCP) components—de‑risks compensation and reduces direct equity beta yet maintains long-term alignment via large ownership and options outstanding .
• Bonus metrics based on Net Income, EBITDA, and Cash Flow, each set at +10% YoY target, with structured up/down slider and 300% salary cap—supports pay-for-performance and cash generation focus .
• Future design changes: performance-vested options and performance-vested LCP supplements enhance alignment; no repricing; clawback adopted .
• Director fees paid to employee-directors ($265k for Victor) create incremental cash comp; board requires equity purchase, supporting alignment .

Risk Indicators & Red Flags

• Hedging: company has no formal anti-hedging policy, but discloses that NEOs have never hedged; continued absence of a formal prohibition could be seen as a governance gap vs. many peers .
• Pledging: no pledging disclosure for Victor; absence of an explicit anti‑pledging policy not addressed in proxy .
• Related-party/Family control: significant Mendelson Reporting Group ownership; high insider ownership aligns but also concentrates control—monitor for related‑party transactions; Finance/Audit Committee oversees conflicts .
• Say‑on‑Pay at 66% (2024) indicates investor concerns; committee initiated changes, but continued scrutiny likely .

Equity Ownership & Alignment (Detail)

Board Service and Dual-Role Implications

• Role: Executive (Co‑CEO/Co‑President) and Director; not independent under NYSE rules .
• Committees: Environmental, Safety & Health member; other “key” committees (Audit, Compensation, Nominating, Stock Option) are fully independent .
• Governance mitigants: 70% independent board; independent committees; executive sessions with rotating lead independent; annual director elections .
• Combined CEO/Chair dynamic: HEICO endorses combined Chair/CEO (Chair role historically with Laurans Mendelson; Laurans becomes Executive Chairman as of May 1, 2025 while Victor and Eric become Co‑CEOs), citing efficiency and performance history; independent oversight maintained via committee structure .

Investment Implications

• Alignment: Very high insider ownership and robust long-term value creation; FY2024 pay tilted to cash/LCP due to option pause, with commitments to performance-vested equity/LCP going forward—constructive for alignment .
• Retention: Large vested/unvested option positions and sizable LCP balances that vest/accelerate under certain events reduce flight risk; absence of employment agreements means no guaranteed cash severance multiples, but LCP/CIC provisions are material .
• Trading signals: FY2024 exercise of 97,656 options (realized ~$23.46M) is notable; not necessarily bearish (could be diversification/tax), but worth monitoring for further Form 4 activity into resumed performance‑based equity grants .
• Governance watch‑items: Lack of formal anti‑hedging and explicit anti‑pledging policies (despite stated practice) and only 66% Say‑on‑Pay suggest ongoing shareholder focus; committee’s announced structural changes should be tracked in upcoming cycles .
• Execution: ETG’s record backlog and double‑digit growth/margins under Victor’s leadership, plus active M&A engine (55 ETG deals), support durable earnings/cash flow compounding—favorable for incentive achievement and TSR continuity if sustained .