Shahram Askarpour
About Shahram Askarpour
Shahram (Dr.) Askarpour, 67, is President & CEO of Innovative Solutions & Support (ISSC) and a director since January 2022. He joined ISSC in 2003 (VP Engineering), became President in 2012, and CEO/director in January 2022 . He holds a B.Eng. in Electrical Engineering (Middlesex University), a Postgraduate Certificate in Systems Engineering and a PhD in Automatic Control (Brunel University), has multiple aviation patents, and completed management/finance programs at Carnegie Mellon and Wharton . Under his tenure, ISSC grew FY revenue from $27.7M (2022) to $47.2M (2024) and net income from $5.5M (2022) to $7.0M (2024); however, the proxy’s pay-versus-performance TSR series shows the value of a $100 initial investment moved from $122.93 (2022) to $92.88 (2024) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Innovative Solutions & Support (ISSC) | VP Engineering; President; President & CEO | 2003–2012 (VP Eng), 2012–Jan 2022 (President), Jan 2022–present (CEO) | Drove product/engineering and leadership transition; appointed CEO and joined the Board in Jan 2022 . |
| Smiths Aerospace (division of Smiths Group plc) | Managerial/technical roles | Pre‑2003 | Aerospace industry expertise; contributor to patents and avionics know‑how . |
| Instrumentation Technology | Managerial/technical roles | Pre‑2003 | Avionics engineering leadership . |
| Marconi Avionics | Managerial/technical roles | Pre‑2003 | Avionics engineering leadership . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | No public company board roles or external directorships disclosed in the proxy/10‑K . |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of Salary) | Actual Annual Bonus ($) | Notes |
|---|---|---|---|---|
| 2024 | 500,000 | 100% | 500,000 | 2024 target and payout as approved; payments in Dec 2024 . |
| 2023 | 400,000 | 75% | 355,816 | 2023 target and payout approved; bonus paid Nov 2023 . |
| 2022 | 369,616 | — | 300,000 (bonus) | Summary Compensation shows a $300,000 bonus in 2022; target not disclosed . |
Performance Compensation
- 2024 Annual Incentive Plan metrics (CEO weighting 66% financial/33% qualitative); chosen metrics: Revenue and Adjusted Operating Income; qualitative focused on organic growth, M&A, autonomous flight initiatives, partnerships, and IR .
| Metric (FY2024) | Weight | Target | Maximum | Actual | Notes |
|---|---|---|---|---|---|
| Revenue ($) | 33% | 44,138,000 | 66,207,000 | 47,198,020 | Achieved FY revenue per proxy appendix . |
| Adjusted Operating Income ($) | 33% | 10,470,428 | 15,705,642 | 11,446,807 | Non‑GAAP; reconciliation in Appendix A . |
| Qualitative | 33% | — | — | 100% | Committee assessed CEO at 100% on qualitative goals . |
- Equity Awards
| Grant Date | Award Type | Shares/Options | Exercise Price ($) | Grant Date Fair Value ($) | Vesting Terms |
|---|---|---|---|---|---|
| 2/22/2024 | RSUs | 40,024 | — | 325,000 | 8.33% per calendar quarter from 9/30/24 (quarterly vesting cadence) . |
| 2/22/2024 | Options | 97,000 | 8.12 | 429,000 | 26% vested immediately; remainder 25% annually to be fully vested 4 years from grant . |
| 1/11/2023 | RSUs | 100,000 | — | 819,000 | 25% vested immediately; remaining 75% vests quarterly to full vest on 3rd anniversary . |
| 1/11/2023 | Options | 200,000 | 8.19 | 852,000 | 50% vested immediately at grant; remaining 50% vests quarterly to full vest on 1st anniversary . |
- Clawback, Hedging/Pledging, Ownership Guidelines:
- Awards subject to mandatory recoupment/clawback per Amended & Restated 2019 Plan and applicable laws/listing requirements .
- Hedging and pledging prohibited (no margin purchases, no pledging of securities) .
- Stock ownership guidelines: CEO minimum 3x base salary; compliance measured annually (as of Dec 31, 2024); until meeting threshold, must retain 50% of net shares from vesting/exercise .
Equity Ownership & Alignment
| Holder | Total Beneficial Ownership (shares) | % of Outstanding | Components/Notes |
|---|---|---|---|
| Shahram Askarpour | 526,717 | 3.0% | Includes (i) 267,458 common shares; (ii) 16,256 unvested RSUs vesting within 60 days; (iii) 200,000 NQSOs vested; (iv) 43,003 unvested NQSOs vesting within 60 days (as of Feb 20, 2025; total shares outstanding 17,545,314) . |
- Anti‑hedging/pledging policies in effect across employees and directors .
- Stock ownership guidelines for CEO at 3x salary; compliance status not explicitly disclosed; retention requirement applies until met .
- Principal holders for context: Klear Kite/Christopher Harborne ~13.1%; Estate of G.S.M. Hedrick ~5.1%; WealthTrust Axiom 6.6%; Central Square ~5.0% (as of Feb 20, 2025) .
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement | Amended and restated Apr 14, 2022; initial term to Apr 13, 2024 with annual auto‑renewals unless non‑renewal notice at least 30 days prior; base salary $400,000 (subsequent actual salary paid in 2024 was $500,000) . |
| Non‑compete/Non‑solicit | 12 months post‑termination (both non‑compete and non‑solicit), plus standard confidentiality/assignment/non‑disparagement . |
| Severance (No Change‑in‑Control) | If terminated without Cause or resigns for Good Reason: 12 months base salary plus 12 months COBRA premiums for CEO and dependents . |
| Change‑in‑Control (Double Trigger) | If within 6 months before to 2 years after a Change of Control, terminated without Cause or for Good Reason: cash equal to 2x (base salary + maximum annual cash bonus/incentive opportunity), immediate vesting of all unvested equity, option exercise period extended to earlier of 2 years or option expiration, and 18 months of employer‑paid health & disability coverage; Company’s Nonrenewal Notice treated as termination without Cause at term end . |
| Good Reason (summary) | Material reduction in title/duties/authority or aggregate compensation; relocation >25 miles; successor fails to assume/replicate materially similar terms post‑CoC; material Company breach; notice and 30‑day cure required plus termination within 30 days post‑cure . |
Performance & Track Record
- Financial performance (fiscal years end September 30)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenue ($) | 27,740,695 | 34,808,513 | 47,198,020 |
| Net Income ($) | 5,523,778 | 6,027,755 | 6,998,380 |
| Gross Margin (%) | 60.1% | 61.3% | 55.0% |
Citations: Revenue, Net Income, and Gross Margin per 10‑K tables/MD&A .
- Pay‑versus‑Performance TSR (Value of initial fixed $100 investment):
| Year | TSR Value ($) |
|---|---|
| 2022 | 122.93 |
| 2023 | 108.26 |
| 2024 | 92.88 |
Source: 2025 DEF 14A Pay Versus Performance table .
- Strategic execution notes:
- Honeywell product lines acquired/licensed in June 2023, July 2024, and Sept 27, 2024 to expand inertial/communications/navigation and military display/flight control assets; contributed to higher services revenue and backlog growth .
- Backlog rose from $13.45M (FY2023 end) to $89.23M (FY2024 end), with ~$74.3M acquired backlog; ~65% expected within 12 months post‑FY2024 .
Board Governance
- Board/roles: Dr. Askarpour is CEO and a director; the Board Chair is independent (Glen R. Bressner). All directors other than Dr. Askarpour, and all committee members, are independent per Nasdaq rules .
- Committees:
- Audit: Carolin (Chair), Belland, Bressner, Devine; all financially literate; several audit committee financial experts .
- Compensation: Belland (Chair), Carolin; independent; engaged FW Cook as independent consultant in 2023/2024 .
- Nominating & Corporate Governance: Dean (Chair), Bressner; independent .
- Investment: Carolin (Chair), Belland .
- Meetings/attendance: FY2024—Board met seven times; committees met: Audit (5), Compensation (2), Nominating & Governance (1); all directors attended ≥75% of meetings .
- Rights Plan: The Board adopted a shareholder rights plan in response to foreign accumulation of shares given DOD/ITAR/EAR constraints; intended to protect facility clearances and ensure fair treatment in potential control situations .
- Dual‑role assessment: CEO is not Board Chair; independent Chair and fully independent key committees mitigate CEO/director dual‑role concerns .
Compensation Committee Analysis
- Committee members and independence: Stephen L. Belland (Chair), Roger A. Carolin; no interlocks/insider participation; independent under Nasdaq rules .
- Consultant: Frederic W. Cook & Co., Inc. (FW Cook) engaged in 2023 and 2024 for market data and best practices; committee determined independence/no conflicts .
- Say‑on‑Pay cadence and outcomes: Triennial say‑on‑pay; at 2023 annual meeting, >98% approval; next vote planned for 2026 .
Director Service and Compensation (Askarpour as director)
- Askarpour serves as a management director; non‑employee director cash/RSU retainers do not apply to him. Non‑employee director program was increased effective Jan 1, 2024 (annual cash $45k; RSU target $75k later increased to $80k on Feb 26, 2025; committee retainers adjusted) .
Risk Indicators & Red Flags
- Hedging/pledging prohibited; ownership/retention policy in place for Section 16 officers and directors .
- Strong independence profile (independent Chair; all committees independent). Prior audit committee composition adjusted in Jan 2024 when a director no longer met heightened audit independence due to a consulting payment; promptly remediated and notified Nasdaq .
- Rights Plan adopted to mitigate national security/regulatory risks tied to foreign ownership—relevant to DOD/CFIUS/ITAR/EAR exposure .
- Section 16 compliance: company reports timely filings for FY2024 by executives (a note indicates one director’s late Form 4; none noted for Dr. Askarpour) .
Equity Ownership Detail (Vested vs Unvested snapshot at FYE 2024)
| Security (as of FY2024 year‑end) | Status | Quantity | Terms/Notes |
|---|---|---|---|
| Options (201k @ $8.19 exp. 1/11/2033) | Exercisable | 201,000 | 50% immediate/then quarterly vesting per 1/11/2023 grant; exercisable status shown . |
| Options (25k @ $8.12 exp. 2/22/2034) | Exercisable | 25,000 | 26% immediate vest on grant date (2/22/2024) . |
| Options (72,014 @ $8.12 exp. 2/22/2034) | Unexercisable | 72,014 | Remaining portion vests 25% annually to year 4 . |
| RSUs (37,500) | Unvested | 37,500 | 25% on 1st anniversary; then quarterly to year 4 . |
| RSUs (40,024) | Unvested | 40,024 | 8.33% at 9/30/24, then 8.33% at each quarter‑end . |
Note: Beneficial ownership table (as of Feb 20, 2025) provides the consolidated share/option breakdown and percentage; see prior section .
Say‑on‑Pay & Shareholder Feedback
- Last say‑on‑pay: >98% approval (2023); next vote planned for 2026; committee considered the outcome supportive of current approach .
Employment & Contracts (Retention risk, transitions)
- CEO employment auto‑renews annually; non‑compete/solicit 12 months; severance economics include a single‑trigger for nonrenewal (treated as without Cause) and double‑trigger CoC protection with 2x cash and full equity vest .
- Definitions and cure periods for Good Reason detailed; COBRA coverage durations specified (12 months standard; 18 months on CoC) .
Investment Implications
- Pay‑for‑performance alignment: 2024 annual bonus tied 66% to objective financials (Revenue/Adjusted Op Inc) and 33% to qualitative milestones; payouts tracked actuals (revenue/adj OI met targets; qualitative at 100%) with a $500k bonus and substantial performance‑conditioned equity, supporting alignment .
- Ownership/skin‑in‑the‑game: CEO beneficially owns ~3.0% of shares; anti‑pledging/hedging and a 3x‑salary ownership guideline with retention bolster alignment, though explicit compliance status not disclosed .
- Retention/CoC: Double‑trigger CoC benefits (2x salary + max bonus; full equity acceleration; extended option exercise; benefits) are competitive but not excessive; 12‑month non‑compete/solicit and standard 12‑month severance absent CoC reduce transition risk .
- Execution and growth: Revenues and net income increased in FY2022–FY2024, supported by strategic Honeywell asset/licensing transactions and rising services/backlog; however, TSR (per proxy methodology) declined from 2022 to 2024, indicating market skepticism or timing effects despite earnings growth—monitor integration progress and margin trajectory as services mix rises .
- Governance quality: Independent Chair, fully independent key committees, robust clawback and anti‑pledging policies, and prompt remediation of an audit committee independence issue support governance; the Rights Plan reflects national security regulatory realities and may constrain change‑of‑control optionality but also protects DOD‑related franchises .
Notes on data sources and scope:
- All compensation, governance, and ownership information is from ISSC’s 2025 DEF 14A and 2024/2023 10‑K filings as cited. No additional Form 4 transaction analysis was retrieved here; the proxy reports timely Section 16 filings by executives in FY2024 (one late director Form 4 noted), and no pledging/hedging is permitted by policy .