Thomas E. Stiehle
HUNTINGTON INGALLS INDUSTRIESAbout Thomas E. Stiehle
Thomas E. “Tom” Stiehle is Executive Vice President and Chief Financial Officer (CFO) of HII, serving since February 2021, with responsibility for investor relations, treasury, internal audit, contracts, accounting/reporting, FP&A, rates/budgets, and M&A . He is 59 years old . Previously he was VP & CFO of Ingalls Shipbuilding (2012–2021) and earlier served as VP, Contracts & Pricing at Ingalls .
Company performance context during his tenure: HII delivered 2024 sales of $11.535B (up ~0.7% YoY from $11.454B), and reported EBITDAP of ~$941M in 2024; 2024 TSR for HII was -25.7% (company-level) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| HII – Ingalls Shipbuilding | Vice President & CFO | Oct 2012 – Feb 2021 | Drove business management and finance for Ingalls ahead of CFO role at corporate . |
| HII – Ingalls Shipbuilding | Vice President, Contracts & Pricing | Pre-2012 | Led contracting and pricing, underpinning bid discipline and margin protection . |
External Roles
- Not disclosed in filings reviewed.
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 571,154 | 575,000 | 589,597 |
| Target Annual Bonus (% of Salary) | n/a | n/a | 80% |
Notes:
- 2024 target bonus remained 80% of base salary for corporate NEOs (same plan design across corporate roles) .
- All NEOs received performance-based merit increases in base compensation for 2024 .
Performance Compensation
Annual Incentive Plan (AIP) – 2024 (Corporate NEOs: CEO, CFO, CLO)
- Formula: Final Bonus = Base Salary × Target% × Corporate Performance Factor (CPF) × Individual Performance Factor (IPF). CFO IPF for 2024 was 1.0 .
- Metrics/weights: 90% financial (Operating Margin (OM), Operating Cash Flow (OCF)); 10% strategic leadership (leadership, ESG, cybersecurity, compliance) .
- 2024 CPF outcome: 65 (i.e., 65% of target); OM scored above 100, OCF did not score; strategic leadership scored 186 (10% weight) .
| AIP Element (2024) | Weight | Target | Actual | Payout/Notes |
|---|---|---|---|---|
| Operating Margin (enterprise) | 90% (with OCF) | OM goal 6.61% for 100 | OM performance 662 bps | OM points 46 of 45% slice; OCF scored 0; total financial 46 |
| Operating Cash Flow (enterprise) | OCF $1,527M for 100 | n/a | 0 points; below threshold | |
| Strategic leadership (ESG, cyber, compliance, leadership) | 10% | 100 | 186 | 19 points (10%×186) |
| Corporate Performance Factor (CPF) | — | 100 | 65 | Used in CFO bonus formula |
| CFO IPF | — | — | 1.0 | Management assessment |
| CFO Actual AIP ($) | — | — | 307,970 | As paid for 2024 |
Long‑Term Incentives (LTI) – 2024 Grants
- Mix: 70% Restricted Performance Stock Rights (RPSRs), 30% Restricted Stock Rights (RSRs) .
- RPSR metrics/weights over 2024–2026: ROIC 40%; EBITDAP 40%; Relative EBITDAP Growth vs S&P A&D Select Index 20% (0–200% payout) .
- Vesting: RPSRs after the 3‑year performance period; RSRs vest ratably 1/3 on each of the 1st, 2nd, 3rd anniversary (grant date 2/26/2024) .
| 2024 LTI (granted 2/26/2024) | CFO Grant Detail |
|---|---|
| Total LTI Target ($) | 1,500,000 |
| Actual Grant Date Fair Value ($) | 1,499,604 |
| RPSR Target Shares (#) | 3,641 |
| RSR Shares (#) | 1,560 |
| RPSR Performance Metrics | ROIC 40%; EBITDAP 40%; Relative EBITDAP Growth 20% |
| RPSR Period/Vesting | 1/1/2024–12/31/2026; payout 0–200% post certification |
| RSR Vesting | 33 1/3% on each of 2/26/2025, 2/26/2026, 2/26/2027 |
Recent performance cycle: The 2022 RPSR (2022–2024) paid at 109% of target; shares were issued 2/24/2025 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (2/28/2025) | 23,935 shares (no listed share equivalents) |
| Shares outstanding (2/28/2025) | 39,235,568 |
| Ownership as % of outstanding | ~0.06% (23,935 / 39,235,568) |
| Unvested RSRs at 12/31/2024 | 1,587 shares; $299,966 (based on $188.97) |
| Unvested RPSRs at 12/31/2024 | 3,705 target shares; $700,114 (incl. DEUs) |
| 2024 Stock vested | 8,083 shares; $2,330,652 value realized |
| Stock ownership guideline | 3× base salary for executives reporting to CEO |
| Compliance status (as of 2/28/2025) | 237% of target (i.e., exceeds guideline) |
| Hedging/pledging | Prohibited for officers (no pledging; no hedging) |
| Options | None outstanding (company had no options outstanding in 2024) |
| Holding requirement | For pre‑2024 awards: hold ≥50% of shares for 3 years (1‑year post‑separation hold); eliminated for awards granted on/after Jan 1, 2024 |
Insider reporting note: The company disclosed delayed Form 4 filings on July 12, 2024 for each executive officer (acquisition of RSRs and dividend equivalents), and a late Form 5 for the CEO; no other Section 16(a) delinquencies were noted .
Employment Terms
| Term | Key provisions |
|---|---|
| Employment agreement | None (executives are at‑will) |
| Severance plan (officers) | 1.5× (base salary + target bonus) lump sum; 18 months employer-paid medical/dental; financial planning (up to $15k in year of termination and following year; CEO $30k); exec physical ($4k through year‑end); outplacement (≤15% of base) |
| Change‑in‑control agreements | None; no excise tax gross‑ups |
| Equity treatment (CIC + qualifying termination) | RSRs and RPSRs accelerate (double‑trigger) |
| Equity treatment (retirement/death/disability) | Pro‑rata or full acceleration depending on award: RPSRs prorated at target (retirement), full acceleration on death/disability; RSRs vest on death/disability; prorated vesting of RSRs scheduled within 12 months for retirement‑eligible |
| Clawback | SEC/NYSE-compliant policy; recovery of erroneously awarded incentive compensation for three completed fiscal years prior to a restatement; covers president, PFO, PAO, vice presidents and other policy-making officers |
| Perquisites | 2024 CFO: non‑qualified plan match $43,824; qualified plan match $13,800; health & welfare $15,993; exec physical $2,000; financial planning $790; personal liability $2,501; total $78,908 |
| Pension/SERP (present value at 12/31/2024) | OSERP $3,239,315; ERISA 2 $3,859,114; Retirement Plan “B” $1,735,717 |
| Nonqualified deferral (12/31/2024) | Savings Excess Plan: executive contributions $164,340; company contributions $43,824; aggregate balance $1,506,409 |
Compensation Structure Details
- Pay mix and philosophy: Heavy weighting to performance‑based, long‑term equity; no dividends on unvested RPSRs/RSRs; no hedging/pledging; no executive employment agreements or CIC agreements .
- Performance metrics evolution: For 2025, AIP adds an operational performance component (average of divisions) and removes certain D&I operational metrics at divisions due to legal/regulatory requirements .
Multi‑Year Compensation Summary (as reported)
| Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive ($) | Change in Pension Value ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2024 | 589,597 | 1,499,604 | 307,970 | 1,376,737 | 78,908 | 3,852,816 |
| 2023 | 575,000 | 1,499,944 | 851,000 | 1,823,692 | 65,757 | 4,815,393 |
| 2022 | 571,154 | 1,499,890 | 676,200 | 664,774 | 108,586 | 3,520,604 |
Governance, Peer Benchmarking, Say‑on‑Pay
- Compensation Committee members: Victoria D. Harker (Chair), Adm. Kirkland H. Donald, Frank R. Jimenez, Anastasia D. Kelly .
- Independent compensation consultant: Exequity; Committee affirmed independence and no conflicts .
- Peer group (2024 analysis): Booz Allen, BWX, Curtiss‑Wright, Dover, Howmet, Jacobs, KBR, L3Harris, Leidos, Moog, Oshkosh, Parker Hannifin, Spirit AeroSystems, Teledyne, Textron, TransDigm; moving to 2025 peer set adds Cognizant, General Dynamics, Northrop Grumman; removes BWX, Curtiss‑Wright, Moog .
- Target positioning: Aggregate pay around 50th percentile; long‑term equity generally in 3rd–4th quartile vs peers .
- Say‑on‑pay support: 96% “FOR” at 2024 meeting (five‑year history 96‑97%) .
Performance & Track Record (selected indicators)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Sales and Service Revenues ($MM) | — | — | — | 11,454 | 11,535 |
| EBITDAP ($MM) | 796 | 972 | 1,060 | 1,211 | 941 |
| HII 1‑Year TSR (%) | — | — | — | — | -25.7 |
Qualitative execution context: 2024 operations achieved key ship and segment milestones but faced macro headwinds (labor availability, supply chain, inflation) primarily on pre‑COVID contracts; backlog reached ~$48.7B . As CFO, Stiehle also updated 2025 free cash flow guidance to $500–$600M on Q2’25 call (midpoint raised ~$150M due to tax law changes), while reiterating segment revenue/margin ranges and capital allocation priorities .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited for officers (mitigates alignment risk) .
- Clawback: Robust Dodd‑Frank policy adopted (enhances accountability) .
- Related‑party: No Stiehle‑specific related‑party transactions disclosed; company disclosed certain routine third‑party plan service relationships and a CEO family member employment (not related to CFO) .
- Section 16: Company disclosed delayed Form 4 and a CEO Form 5; no CFO‑specific exception called out beyond group disclosure .
Equity Vesting & Potential Selling Pressure
- RSRs: 2024 grant (1,560 shares) vests ratably on 2/26/2025, 2/26/2026, 2/26/2027; 2023 and 2022 RSRs continue ratable vesting on prior anniversaries .
- RPSRs: 2024–2026 cycle cliff‑vests post‑performance certification; 2022 cycle paid at 109% on 2/24/2025, creating a realized event in Q1’25 .
- Holding requirement: For pre‑2024 awards, 50% of net shares are subject to a three‑year hold and one‑year post‑separation hold; the holding requirement was eliminated for awards granted on/after 1/1/2024, modestly increasing future liquidity upon vest .
Compensation Committee Analysis Highlights
- No employment agreements or CIC agreements; no executive tax gross‑ups (shareholder‑friendly) .
- External benchmarking with Exequity; move to add large prime peers for 2025 to better reflect revenue scale (peer set adjustment) .
- Risk assessment found no undue risk from programs; caps and multi‑year performance mitigate windfalls .
About the AIP and LTI Performance Metrics
- AIP metrics (Corporate): Enterprise OM (segment operating income margin) and OCF (cash from operations before capex and certain items) + strategic leadership score .
- LTI metrics: ROIC (Adjusted FCF/Average Invested Capital), EBITDAP, and Relative EBITDAP growth vs S&P A&D Select Index .
Investment Implications
- Alignment: High equity weighting, rigorous clawback, strict hedging/pledging ban, and stock‑ownership compliance at 237% of target all point to robust alignment and lower governance risk for the CFO role .
- Retention/pressure: Removal of holding requirement for new (2024+) awards slightly increases liquidity at vest, but retirement eligibility means pro‑rata treatment rather than forfeiture in many separation cases, lowering retention “cliff” risk; overall vesting cadence is balanced (annual RSR tranches, triennial RPSR cliffs) .
- Pay for performance: 2024 corporate CPF at 65% (driven by OCF shortfall) demonstrates downside sensitivity; 2022–2024 RPSR paid at 109% indicates modest long‑term performance achievement, not excessive payouts .
- Execution watch‑items: Macro headwinds (labor/supply/inflation) and legacy pre‑COVID contracts pressured 2024 EBITDAP and TSR; management (incl. CFO) is emphasizing throughput, contract quality, and cash conversion, with 2025 FCF guided up to $500–$600M (tax tailwinds included) . Near‑term equity vestings (late‑Feb each year) can create episodic selling liquidity, but pre‑2024 holding policies and guideline compliance temper signal risk .