Thomas Monahan
About Thomas Monahan
Thomas L. Monahan III, age 58, became HSII’s CEO and a director on March 4, 2024 after a multi-year planned succession. He previously led CEB, served as President/CEO of DeVry University, and sits on TransUnion’s board as Audit Committee Chair. Under his tenure, HSII reported 2024 net revenue of $1,098.6 million (+7.0% YoY), Adjusted EBITDA of $111.2 million (10.1% margin), and Adjusted diluted EPS of $3.12, while GAAP operating income and EPS declined given restructuring and impairment charges; PSU outcomes for the 2022–2024 cycle vested at 192.3% driven by 95th percentile relative TSR and 11.4% three-year adjusted operating margin .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CEB Inc. | CEO (2005–2017); Chairman (2007–2017); Director (2001–2017) | 2001–2017 | Led transformation and growth of a subscription insights company; public company leadership experience |
| DeVry University | President & CEO (2020–present); Vice Chairman of the Board (2023–present) | 2020–present | Operational leadership in education; governance experience |
| ProKarma, Inc. | Executive Chairman | 2019–2022 | Oversaw technology services strategy and M&A execution |
| Norton Street Holdings | Founder, Managing Partner | 2017–present | Investment and advisory platform focused on leadership-driven value creation |
External Roles
| Organization | Role | Years | Governance/Committee Roles |
|---|---|---|---|
| TransUnion (NYSE: TRU) | Director | 2017–present | Audit Committee Chair (2020–present) |
| Convergys (NYSE: CVG) | Director | 2008–2018 | Former Nominating & Corporate Governance Committee Chair |
Fixed Compensation
| Component | 2024 Amount | Notes |
|---|---|---|
| Base Salary | $900,000 | Effective March 4, 2024; actual earned $746,429 due to partial year |
| Perquisites | Up to $1,080/year (or $3,150 if first time) for financial planning; executive physical exam; approved business club membership; standard employee benefits | Applies to NEOs broadly; no excessive perquisites |
Performance Compensation
Annual Incentive (MIP) – 2024
| Metric | Weight | Target | Actual | Payout vs Target | Vesting/Payment |
|---|---|---|---|---|---|
| Adjusted EBITDA | 30% | $121.4m | $143.6m (with $32.4m net upward adjustments) | 191.3% | Cash; paid March 2025 |
| Search Net Revenues | 20% | $780.0m | $818.4m | 149.2% | Cash |
| Non-Search Net Revenues | 20% | $294.4m | $280.2m | 75.9% | Cash |
| Qualitative Objectives | 30% | 100% | Achieved (CEO and Board-assessed) | 100.0% | Cash |
| Total | 100% | — | — | 132.4% | CEO payout $1,482,407 on $1,350,000 target (150% of base) |
Long-Term Incentives – 2024 Grants
| Award Type | Grant Date | Target Value | Units | Key Terms |
|---|---|---|---|---|
| RSUs (Annual) | 3/8/2024 | $1,000,000 | 30,184 RSUs | Time-based; vest in 3 equal annual tranches |
| PSUs (Annual) | 3/8/2024 | $1,000,000 | 30,184 target PSUs | 50% three-year Adjusted EBITDA margin goal; 50% three-year relative TSR vs HR/Employment Services peers; 0–200% vest in year 3 |
| PSUs (One-Time) | 3/8/2024 | $3,000,000 | 97,150 PSUs | Stock price hurdles; vest over 4 anniversaries (2025–2028) if 30-trading-day hurdles met (125%/$38.60; 150%/$46.32; 175%/$54.04; 200%/$61.76) |
Prior PSU Outcome (2012–2024 cycle concluding 12/31/2024)
| Metric | Target | Actual | Vesting |
|---|---|---|---|
| 3-year Adjusted Operating Margin | 8.0% target | 11.4% | 192.3% of target PSUs vested (95th percentile rTSR) |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (3/27/2025) | 35,257 shares; <1% of shares outstanding (company table flagged “*”) |
| Vested vs Unvested | 2024 RSUs outstanding/unvested: 30,184 ($891,334 mkt value at $29.53); one-time PSUs unearned: 97,150 ($2,868,840); 2023 PSUs unearned: 60,368 ($1,782,667) |
| Stock Ownership Guideline | CEO must own 5x base salary; must retain 50% of net after-tax vested shares until compliant |
| Compliance Status | CEO was 41% to target as of 12/31/2024 |
| Hedging/Pledging | Prohibited for officers/directors/employees; margin accounts and collateral pledging disallowed |
| Options | None outstanding as of 12/31/2024 |
Employment Terms
| Provision | Term |
|---|---|
| Employment Start Date | Appointed CEO and director March 4, 2024 |
| Severance Plan (no CIC) | CEO: 2.0x base + target bonus; non-compete/non-solicit 12 months; pro-rata RSU acceleration at termination without cause; company-paid health benefits up to 1 year |
| Change-in-Control (CIC) Plan | Double-trigger; CEO: 2.5x base + target bonus lump sum; prorated bonus; accelerated vesting (PSUs at greater of target or actual-to-date); up to 1 year benefits continuation; no excise tax gross-ups (cut-back or pay-your-own) |
| MIP Target | 150% of base for CEO |
| Clawbacks | Dodd-Frank-compliant no-fault restatement recovery; misconduct clawback covers incentive comp; no clawback events in 2024 |
| One-Time Equity Award | Stock price hurdle PSUs aligned to 4-year vesting cadence; objective stock-price hurdles |
Board Governance
- Role and Independence: Monahan is CEO and a director; not independent per Nasdaq and company standards . He is not a member of standing committees; attends by invitation only; independent directors meet in executive session for CEO compensation deliberations .
- Board Leadership: Independent Chair (Adam Warby) since 2019; board separates Chair and CEO and reviews structure annually, enhancing independence and mitigating dual-role concerns .
- Committees: Audit & Finance, HRCC, and NGC staffed by independent directors; Monahan not listed as a member on any standing committee .
- Director Compensation: Employee directors receive no additional pay for board service; Monahan received only executive compensation .
Performance & Track Record
| Metric | 2024 | 2023 | Notes |
|---|---|---|---|
| Net Revenue ($m) | 1,098.6 | 1,026.9 | +7.0% YoY; strong growth in On-Demand Talent and Consulting |
| Operating Income ($m) | 7.5 | 75.4 | Margin 0.7% vs 7.3% in 2023; impacted by restructuring/impairments |
| Adjusted Operating Income ($m) | 74.4 | 82.6 | Margin 6.8% vs 8.0% |
| Diluted EPS ($) | 0.41 | 2.62 | GAAP decline; Adjusted diluted EPS $3.12 |
| Adjusted EBITDA ($m) | 111.2 | 125.6 | Margin 10.1% vs 12.2% |
Compensation Program Design and Governance
- Pay Mix and Metrics: At least 65% of total target executive compensation is variable; annual payout caps at 200% for MIP and PSUs; long-term mix is 50% RSUs/50% PSUs with three-year performance periods (Adj. EBITDA margin and rTSR) .
- Ownership Alignment: Rigorous CEO and NEO stock ownership guidelines with 50% net retention; no hedging or pledging permitted .
- Peer Group and Oversight: HRCC uses a 14-company peer group (Korn Ferry, Robert Half peers, etc.) and Semler Brossy as independent consultant; say-on-pay support ~95.2% in 2024 .
- Equity Grant Practices: Pre-set annual equity grant calendar; no timing around MNPI .
Director Compensation (for Monahan as employee director)
| Item | Amount | Notes |
|---|---|---|
| Additional Director Fees | $0 | Employee directors receive no incremental fees; see Executive Compensation section for pay |
Risk Indicators & Red Flags
- CFO Transition: CFO resigned August 16, 2024; new CFO appointed January 6, 2025; interim principal financial officer designated for Q3 2024 filing . Governance mitigants include continued audit oversight and internal controls.
- Related Party Transactions: None requiring approval since Jan 1, 2024 .
- No Hedging/Pledging; No Excise Tax Gross-Ups; Double-Trigger CIC; Robust clawbacks with no triggers in 2024 .
Equity Ownership & Vesting Detail
| Award Type | Units Outstanding/Unearned | Market/Payout Value Basis | Vesting Mechanics |
|---|---|---|---|
| RSUs (2024 Grant) | 30,184 | $29.53 close (12/31/2024) → $891,334 | 1/3 annually over 3 years |
| PSUs (2023 Grant) | 60,368 | $1,782,667 | Three-year cliff, performance-based |
| PSUs (2024 One-Time Hurdles) | 97,150 | $2,868,840 | Annual tranches 2025–2028 with stock-price hurdles |
Employment Contracts & Restrictive Covenants
- Non-compete/non-solicit: Generally 12 months for Executive NEOs under the Severance Plan; extended covenants through vesting period upon retirement per Retirement Policy .
- Retirement Policy: Eligibility thresholds defined; continued vesting rules for RSUs/PSUs depending on age/service; NEOs not eligible as of 12/31/2024 .
Say-on-Pay & Shareholder Feedback
| Item | Result |
|---|---|
| 2024 Say-on-Pay (on 2023 program) | ~95.2% approval; no changes made based on outreach |
Compensation Peer Group
| Companies (selected) |
|---|
| ASGN, ICF International, CBIZ, CRA International, Huron Consulting, Korn Ferry, Kelly Services, Kforce, FTI Consulting, Resources Connection, TrueBlue, Barrett Business Services, Douglas Elliman, Marcus & Millichap |
Investment Implications
- Alignment: Monahan’s package is heavily at-risk with hard stock-price hurdles and three-year PSU metrics; robust ownership guidelines and 50% net share retention reduce near-term sell pressure and improve alignment; no hedging/pledging permitted .
- Retention/Execution: One-time PSUs vest only upon multi-year stock-price hurdles, strengthening retention and incentivizing capital allocation and growth execution across diversified segments; severance/CIC terms are market-standard with double-trigger protection and no excise tax gross-ups .
- Performance Signal: 2024 headline growth was strong (+7% revenue), but GAAP profitability compressed; adjusted results and elevated variable pay tie outcomes to EBITDA margin and rTSR, which historically produced high PSU vesting (192.3%)—investors should watch for operating margin recovery to sustain incentive payouts .
- Governance: Independent Chair and committee-only independence reduce CEO/board dual-role risks; employee-director receives no additional fees; strong clawbacks mitigate risk of restatement-related overpayment .