Thomas Mills
KRATOS DEFENSE & SECURITY SOLUTIONSAbout Thomas Mills
Thomas Mills is President of Kratos’ C5ISR Systems Division, which includes Gichner Systems Group, and has held this role since August 2013; he is 65 years old, began his career at KPMG, and holds a bachelor’s degree in Accounting from West Chester University . Prior to Kratos’ acquisition of Gichner in May 2010, Mills was Gichner’s President & CEO (2004–2010), then led Gichner within Kratos before taking the C5ISR presidency in 2013 . Company-level performance metrics used to link executive pay include Adjusted EBITDA, revenue, and free cash flow, with cumulative TSR tracked versus a peer group; Kratos’ Adjusted EBITDA grew 36.7% as of FY2024 versus the 2019 baseline and 10.8% year-over-year in 2024 . The pay-versus-performance table shows FY2024 cumulative TSR of $146 (value of initial $100) and Adjusted EBITDA of $105.69 million, providing the broader context for incentive alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Gichner Systems Group, Inc. | President & CEO | 2004–2010 | Led the company through to Kratos’ acquisition; positioned ruggedized systems business for integration . |
| Kratos (Gichner business group) | Head of Gichner within Kratos | 2010–2013 | Managed integration and operations post-acquisition ahead of elevation to division presidency . |
| Kratos C5ISR Systems Division | President | 2013–present | Leads C5ISR and Gichner; accountable for execution across shelters and mission systems . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| West Chester University Foundation (alma mater) | Board member | Not disclosed | Philanthropic and alumni engagement; exact duties and dates not disclosed . |
Company Performance Snapshot (context for incentive alignment)
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Company TSR (Value of $100) | $152 | $108 | $57 | $113 | $146 |
| Peer Group TSR (Value of $100) | $107 | $93 | $108 | $122 | $159 |
| Net Income (Loss) ($) | $79,600,000 | $(2,000,000) | $(36,900,000) | $(8,900,000) | $16,359,000 |
| Adjusted EBITDA ($) | $78,500,000 | $82,900,000 | $70,700,000 | $95,440,000 | $105,690,000 |
| Adjusted EBITDA Growth vs 2019 baseline | n/a | n/a | 23.4% (as of 2023) | 23.4% (as of 2023) | 36.7% (as of 2024); 10.8% YoY |
Fixed Compensation
- Mills’ individual base salary, target bonus %, and bonus paid are not disclosed in the proxy; he is not listed among the named executive officers (NEOs) for whom detailed compensation is provided .
- In 2024, after years of freezes, the Compensation Committee increased base salaries for three division presidents to reflect division performance and expanded responsibilities; as a division president, Mills likely fell within this cohort, though specific amounts are not disclosed .
Performance Compensation
| Component | Metric | Weighting | Target | Actual | Payout Mechanics | Vesting |
|---|---|---|---|---|---|---|
| Long-term equity (Performance RSUs) | Adjusted EBITDA Growth | 50% of RSU grants at target | 33.3% of award vests for each 10% increase in Adjusted EBITDA over a 5-year performance period | Company achieved 10.8% Adjusted EBITDA growth in 2024 vs 2023 | Vests in annual tranches when performance thresholds are met within the 5-year window | Performance-based; potential annual vesting within five-year period . |
| Long-term equity (Time-based RSUs) | Time in role | 50% of RSU grants at target | n/a | n/a | n/a | Ratable over five equal annual installments from grant date . |
| Annual cash bonus | Financial and non-financial objectives | Not disclosed for Mills | Committee-approved objectives (revenue, EBITDA, operating cash flow emphasis in 2024 design) | Not disclosed for Mills | Paid based on achievement of objectives; amounts reported only for NEOs | Annual payout; not applicable to vesting . |
Kratos identifies Adjusted EBITDA, revenue, and free cash flow as the most important measures linking pay to performance for NEOs; design principles apply broadly, though Mills-specific targets/payouts are not disclosed .
Equity Ownership & Alignment
- Anti-hedging and anti-pledging: Directors and executive officers, including division presidents, are prohibited from hedging or pledging company stock, reducing alignment risk from collateralized shares .
- Clawback: Incentive Compensation Recoupment Policy applies to executive officers and was updated in 2023 to meet SEC Rule 10D-1/Nasdaq requirements .
- Beneficial ownership: The proxy’s beneficial ownership tables cover NEOs and directors; Mills’ individual share ownership is not disclosed there .
- Rule 10b5-1 plans (potential selling pressure):
| Detail | Aug 16, 2023 Plan | May 31, 2024 Plan |
|---|---|---|
| Action | Adopted | Adopted |
| Expiration | Mar 29, 2024 | Feb 28, 2025 |
| Rule 10b5-1? | Yes | Yes |
| Aggregate Max Shares | 16,091 | 32,099 |
Note: The number of shares actually sold depends on plan conditions; these adoptions can indicate planned selling that may contribute to near-term supply .
Employment Terms
- No employment or change-in-control agreement for Mills is disclosed; the proxy details agreements for other executives (e.g., DeMarco, Fendley, Carrai) but not Mills .
- Company-wide practices: new equity awards require double-trigger conditions for accelerated vesting upon change-in-control (e.g., a change-in-control plus stock price threshold), and excise tax gross-ups are eliminated in new or amended agreements .
Investment Implications
- Alignment: Mills’ incentives are dominated by five-year RSUs—half performance-based on Adjusted EBITDA growth and half time-based—driving multi-year execution focus aligned with Kratos’ shareholder value creation and internal investment strategy .
- Retention: After prolonged salary freezes, base pay increases for division presidents in 2024 suggest targeted retention moves for key operators; absence of a disclosed employment agreement for Mills limits visibility into severance/CIC economics and protection .
- Trading signals: Mills’ 10b5-1 plans authorize up to 48,190 shares cumulatively across 2023–2024 plans, potentially adding episodic selling pressure through early 2025; however, plans provide a lawful framework and are subject to predefined conditions .
- Governance risk mitigants: Anti-hedging/anti-pledging and updated clawback policies reduce misalignment and recovery risks in the event of restatements; double-trigger provisions on new equity awards tamp down on single-trigger acceleration risk .
- Execution context: Company-level TSR and Adjusted EBITDA trends are supportive (FY2024 TSR value $146; Adjusted EBITDA $105.69M; 36.7% growth vs 2019 baseline), reinforcing the efficacy of EBITDA-linked equity structures; division-level performance specifics for C5ISR are not disclosed, constraining granular attribution to Mills .