Tracey Heaton
About Tracey Heaton
Tracey Heaton, 55, is Chief Legal Officer and Corporate Secretary of Heidrick & Struggles (HSII), appointed November 15, 2021, after senior legal leadership roles at Visa, NYSE Euronext, United Technologies, Milbank and Dechert . In 2024 HSII delivered $1,098.6m in net revenue (+7% YoY) and Adjusted EBITDA of $111.2m (10.1% margin), with Adjusted Diluted EPS of $3.12; 2022–2024 PSUs vested at 192.3% on three-year metrics including an R-TSR at the 95th percentile versus HR/Employment Services peers, linking pay to firm performance . HSII emphasizes pay-for-performance with robust clawbacks, double-trigger CIC vesting, and strict hedging/pledging prohibitions, supporting alignment and retention .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Visa Inc. | SVP & Chief Corporate Counsel | Feb 2015–Jul 2020 | Led M&A, securities/public reporting, ESG, treasury/finance, and executive comp; advised board/C-suite; managed >20 legal professionals |
| NYSE Euronext Inc. | EVP & Deputy General Counsel | Not disclosed | Senior legal leadership; market infrastructure expertise |
| United Technologies Corporation | Associate General Counsel | Not disclosed | Corporate legal; industrials domain expertise |
| Milbank (NY/HK) | Corporate Associate | Not disclosed | Cross-border corporate transactions |
| Dechert | Corporate Associate | Not disclosed | Corporate advisory and transactions |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $400,000 | $425,000 | $450,000 (5.9% increase; effective Jan 1, 2024) |
| MIP Target (% of Salary) | Not disclosed for 2022 | Not disclosed for 2023 | 75% |
| Actual MIP Payout ($) | $470,400 | $378,994 | $446,850 |
| All Other Compensation ($) | $18,300 | $19,800 | $20,700 |
- Perquisites: executive physical, financial planning reimbursement (up to $1,080/year; $3,150 if first-time), approved business club membership .
- No excise tax gross-ups; strong clawback (Dodd-Frank restatement and separate misconduct policy) .
Performance Compensation
2024 Annual Incentive (MIP) Structure and Results
| Metric | Weight | Target | Actual | Payout Contribution |
|---|---|---|---|---|
| Adjusted EBITDA | 30% | $121.4m | $143.6m (191.3% of target; includes permitted adjustments) | 57.4% |
| Search Net Revenues | 20% | $780.0m | $818.4m (149.2% of target) | 29.8% |
| Non-Search Net Revenues | 20% | $294.4m | $280.2m (75.9% of target) | 15.2% |
| Qualitative Objectives | 30% | 100% | Achieved 100% (confidential objectives) | 30.0% |
| Total Payout (% of Target) | 100% | — | — | 132.4% |
- Heaton’s individual accomplishments: effective business partnership across units, sustainability strategy/reporting balance, team development visibility, maturation of ERM process .
2024 Long-Term Incentive (LTI) Grant Details
| Award Type | Grant Date | Units | Grant Price | Vesting | Performance Metrics |
|---|---|---|---|---|---|
| RSUs | Mar 8, 2024 | 6,037 | $33.13 | 1/3 on each anniversary (service-based) | N/A |
| PSUs (Target) | Mar 8, 2024 | 6,036 | $44.18 FV (Monte Carlo for R-TSR) | Cliff at year 3 | 50% 3-yr Adjusted EBITDA Margin (targets not disclosed); 50% 3-yr R-TSR vs HR/Employment Services peer set |
- 2022 PSU outcome (performance period ended Dec 31, 2024): Heaton target 4,577 PSUs; 8,802 vested (192.3% of target), reflecting 11.4% 3-yr Adjusted Operating Margin (with disclosed adjustments) and 95th percentile R-TSR . Form 4 recorded 8,802 common shares acquired on 03/09/2025, followed by 956 shares withheld to satisfy taxes on 06/22/2025 .
Equity Ownership & Alignment
Beneficial Ownership
| As-of Date | Shares Beneficially Owned |
|---|---|
| Mar 27, 2025 (Proxy) | 12,205 |
| Mar 9, 2025 (post PSU vest) | 25,886 (after 8,802 PSU conversion) |
| Jun 22, 2025 (after tax withholding) | 24,930 |
- Additional Form 4: 389 shares withheld upon RSU vesting on 12/21/2024 .
- August 15, 2025 Form 4 shows 5,387 PSUs granted with future vesting tied to stock-price hurdles (vesting scheduled for Mar 8, 2027 and Mar 8, 2028); post-transaction beneficial ownership reported at 30,317 shares .
Outstanding Equity Awards at FY 2024 Year-End (Market value at $29.53 close)
| Award Type | Count | Market Value |
|---|---|---|
| RSUs (unvested) | 6,037 | $178,273 |
| PSUs (unearned at target) | 12,072 | $356,486 |
- Stock ownership guidelines: NEOs must hold 2x base salary; executives must retain 50% of net shares from vesting until compliant; all NEOs (other than CEO status noted) on track as of Dec 31, 2024 .
- Hedging and pledging: prohibited for executives; no pledging permitted (RED FLAG mitigated) .
- Options: none outstanding; HSII has not issued options since 2008 .
Employment Terms
Severance & CIC Economics (Heaton)
| Component | Involuntary Termination (Without Cause) | Death/Long-Term Disability | Termination Following Change-in-Control (Double Trigger) |
|---|---|---|---|
| Base Salary ($) | 600,000 | — | 800,000 |
| Management Bonus ($) | 450,000 | — | 600,000 |
| Prorated Bonus ($) | — | — | 300,000 |
| Discretionary Severance Bonus ($) | 300,000 | — | — |
| Continued Health Coverage ($) | 35,254 | — | 25,777 |
| Vesting of RSUs/PSUs ($) | 86,707 | 309,992 | 224,646 |
| Total ($) | 1,471,961 | 309,992 | 1,950,423 |
- Change-in-Control vesting: double-trigger acceleration; equity awards require both CIC and qualifying termination .
- Restrictive covenants: employment agreements include non-compete and non-solicit generally for 12 months post certain terminations; Severance Plan updated in 2022 to align durations and allow partial acceleration of prorated RSUs upon termination without cause .
- Clawbacks: Dodd-Frank restatement recovery (no-fault) and separate misconduct clawback covering incentive awards, with defined lookback periods and HRCC discretion (as applicable) .
Performance & Track Record
| Corporate KPI | 2023 | 2024 |
|---|---|---|
| Net Revenue ($m) | 1,026.9 | 1,098.6 |
| Operating Income ($m) | 75.4 | 7.5 |
| Adjusted Operating Income ($m) | 82.6 | 74.4 |
| Adjusted EBITDA ($m) | 125.6 | 111.2 |
| Adjusted EBITDA Margin (%) | 12.2% | 10.1% |
| Adjusted Diluted EPS ($) | 2.91 | 3.12 |
- Say-on-pay support: 95.2% approval in 2024, indicating shareholder alignment with pay design .
- MIP metrics emphasize diversified growth (Search and Non-Search revenues) and profitability (Adjusted EBITDA), with qualitative objectives reinforcing culture and talent priorities .
Compensation Peer Group (Benchmarking)
ASGN, Barrett Business Services, CBIZ, CRA International, Douglas Elliman, FTI Consulting, Huron Consulting, ICF International, Kelly Services, Kforce, Korn Ferry, Marcus & Millichap, Resources Connection, TrueBlue; reviewed annually with Semler Brossy .
Insider Transactions & Selling Pressure
- Form 4s reflect share acquisitions from PSU vesting (A) and tax withholding (F) on RSU/PSU vest dates; no open-market sales reported in these filings, suggesting low discretionary selling pressure during 2024–2025 events .
Investment Implications
- Alignment: Heaton’s pay mix (salary plus MIP/PSUs/RSUs) tightly links payout to firm-level profitability (Adjusted EBITDA/Margin) and market-relative TSR, with double-trigger CIC, strong clawbacks, and ownership retention requirements—positively aligned with shareholder interests .
- Retention Risk: Service-vesting RSUs (three-year) and performance-vesting PSUs (three-year) alongside 12-month non-compete/non-solicit and severance protections suggest moderate retention strength; insider filings show primarily tax-related share withholding rather than opportunistic sales .
- Trading Signals: 2022–2024 PSU vesting at 192.3% indicates strong relative performance; upcoming PSU earning depends on sustaining Adjusted EBITDA Margin targets and R-TSR vs peers. Hedging/pledging bans and ownership guidelines reduce misalignment risk .
- Governance: High say-on-pay support and independent HRCC with external consultant oversight limit pay inflation risk; comprehensive clawbacks mitigate downside from restatements/misconduct .