Gerard A. Fasano
Leidos HoldingsAbout Gerard A. Fasano
Executive Vice President and Chief Growth Officer at Leidos (LDOS) since January 1, 2024; previously President, Defense Group through December 31, 2023 . In 2024, Leidos delivered record revenue ($16.7B, +8% YoY), expanded adjusted EBITDA margin to 12.9% (+210 bps), and achieved strong operating cash flow performance—core metrics embedded in NEO pay targets (Revenue, Adjusted EBITDA Margin %, Operating Cash Flow) and exceeded at 104%, 121%, and 127% of target, respectively . Over the 2022–2024 PSU cycle, Leidos’ total shareholder return (TSR) was 70.7% versus 30.5% for the peer median, driving a 121.36% PSU payout, with a negative TSR cap limiting payouts if absolute TSR is negative . Fasano’s 2023 Wash100 recognition underscores his external industry standing and influence on growth initiatives .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Leidos | President, Defense Group | 2022–2023 | Drove large program wins, on-contract growth, R&D-led technical differentiation; addressed execution challenges; founded Defense Inclusion Council; supported Ukraine logistics; extensive employee development and community engagement |
External Roles
- Not disclosed in the proxy filings; omit.
Fixed Compensation
| Component | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 606,154 | 626,154 | 675,291 |
| Bonus ($) | — | — | 5,000 (one-time enterprise target recognition) |
| Target Annual Cash Incentive ($) | — | — | 652,000 (set at start of year) |
| Note | — | — | 2024 salary set to $652,000 annually effective March; Committee salary table confirms 2024 base of $652,000 |
Observation: Target annual incentive equaled 100% of 2024 base salary (652,000 target vs 652,000 base) .
Performance Compensation
Annual Cash Incentive (STIP) – Design and Results
| Metric | Weight | Target Basis | Actual Achievement (Company) | Fasano 2024 Payout ($) |
|---|---|---|---|---|
| Adjusted EBITDA Margin (%) | 40% | Pre-set threshold requires ≥70% of target to fund | 121% of target achieved | 1,209,551 (186–198% range across NEOs; individual payout shown) |
| Operating Cash Flow | 30% | Company-level | 127% of target achieved | 1,209,551 |
| Revenue | 30% | Company-level | 104% of target achieved | 1,209,551 |
| Personal Goal Modifier | +/-20% | Values-driven behaviors | Not applied to NEOs in 2024 | 1,209,551 |
STIP construct: Enterprise-only for enterprise functions; sector presidents have 25% enterprise, 75% sector performance. Modifier evaluates integrity, inclusion, innovation, agility, collaboration, commitment .
Long-Term Incentive (LTIP) – 2024 Grants and Vesting
| Vehicle | Grant Date | Units/Options | Exercise Price | Vesting | Performance Metrics / Payout Scale |
|---|---|---|---|---|---|
| Stock Options | 3/8/2024 | 8,410 | $129.79 | 34%/33%/33% annual; 7-year term to 3/7/2031 | Stock price appreciation |
| PRSU | 3/8/2024 | 3,391 units | — | 34%/33%/33% annual vesting subject to 1-year adjusted EPS hurdle | EPS hurdle (year 1) |
| PSU (3-year) | 3/8/2024 | 5,652 target shares | — | Cliff at end of 3-year period; Committee may decrease shares | 50% Cumulative Adjusted EBITDA $, 50% Relative TSR; Threshold 50% payout at 80% EBITDA target or 30th percentile TSR; Target 100%; Max 200% at 120% EBITDA or 75th percentile TSR; Negative absolute TSR cap limits to 100% |
Performance Equity – Prior Cycle Outcome
| Cycle | Metrics | Outcome |
|---|---|---|
| 2022–2024 PSU cycle | 50% Relative TSR vs peer median; 50% 3-year adjusted revenue | Total payout score 121.36%; Company TSR 70.7% vs peer median 30.5% → TSR factor 140.22%; adjusted revenue $46.2B (reported $46.5B less acquired) |
Equity Ownership & Alignment
| Ownership Detail (as of 2/28/2025) | Value |
|---|---|
| Common Stock | 80,186 shares |
| Option Shares and RSUs (vestable/exercisable within 60 days) | 16,063 shares |
| Total Beneficially Owned | 96,249 shares; none pledged |
| % of Shares Outstanding | ~0.075% (96,249 ÷ 128,213,171) |
| Executive Stock Ownership Guidelines | 5x annual cash salary for NEOs; what counts includes shares owned, deferred stock units, 401(k) equivalents, and unvested PRSUs (post-hurdle); options/unearned PSUs do not count |
| Compliance Status | No exceptions granted to executive officers in 2024 |
| Hedging/Pledging | Prohibited; no margin accounts; preclearance required |
Outstanding Unvested/Unearned Awards (FY-end 2024)
| Award | Units | Market/Payout Value ($) |
|---|---|---|
| PRSU (various grants) | 2,780 (2023), 1,672 (2022), 954 (2021), 3,391 (2024) | $409,077 (2023), $246,035 (2022), $140,381 (2021), $498,986 (2024) |
| PSU (unearned) | 7,311 (2023), 5,806 (2022), 5,652 (2024) | $1,075,814 (2023), $854,353 (2022), $831,692 (2024) |
| Options (unexercisable) | 7,031 (3/3/2023, $96.95), 4,998 (3/4/2022, $105.08), 2,949 (3/5/2021, $89.08), 8,410 (3/8/2024, $129.79) | Option counts and strike prices as shown |
Related-party note: Fasano’s brother, Matthew, is a Leidos program manager (2024 comp ~$250,000); Audit & Finance Committee approved the relationship .
Employment Terms
| Scenario (as of 2025 proxy) | Severance & Pro-rata Bonus ($) | RSUs ($) | Options ($) | PSUs ($) | Benefits & Perqs ($) | Total ($) |
|---|---|---|---|---|---|---|
| Retirement | 1,217,284 | 2,832,109 | 880,468 | 2,751,871 | — | 7,681,732 |
| Involuntary Termination (Without Cause/Good Reason) | 1,869,284 | 2,832,109 | 880,468 | 2,751,871 | 47,169 | 8,380,901 |
| Change in Control | 2,608,000 | 2,832,109 | 880,468 | 4,418,613 | 64,504 | 10,803,694 |
| Death | 1,217,284 | 2,832,109 | 880,468 | 2,998,267 | — | 7,928,128 |
| Disability | 1,217,284 | 2,832,109 | 880,468 | 2,751,871 | — | 7,681,732 |
- Change-in-control structure: No single-trigger severance or accelerated vesting; no excise tax gross-ups .
- Clawbacks: Recovery for material restatements; also for fraud/misconduct or failure to manage/monitor conduct and risk; Exchange Act Section 10D-compliant recoupment adopted Oct 26, 2023 .
- Equity grant practices: Options priced at prior-day close; grants scheduled post financial releases; quarterly off-cycle grants permitted; no award timing around MNPI .
Company Performance Context (for pay-for-performance linkage)
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Revenue ($) | 15,438,000,000* | 16,662,000,000* |
| EBITDA ($) | 1,633,000,000* | 2,105,000,000* |
Values retrieved from S&P Global.*
Additional reported outcomes: Revenue $16.7B in 2024 (+8% YoY) and adjusted EBITDA margin 12.9% (+210 bps), operating cash flow up 19%, book-to-bill 1.4, backlog +18% to $43.6B .
Investment Implications
- Strong incentive alignment: Fasano’s pay heavily tied to enterprise financial outcomes (EBITDA margin, OCF, Revenue) and to multi-year PSU metrics (relative TSR, cumulative adjusted EBITDA), with negative TSR cap protecting against outsized payouts in down markets .
- Low pledging/hedging risk: No shares pledged; strict prohibitions on hedging, pledging, and margin accounts; preclearance required—reducing misalignment/derivative risk .
- Retention and change-in-control economics: CIC exposure concentrates in equity acceleration (PSUs and RSUs) with no single-trigger and no tax gross-ups; severance appears modest relative to peers, mitigating parachute overhang while preserving retention .
- Execution track record: Demonstrated growth office impact (record large-deal wins, KPI improvements, engagement initiatives) and enterprise performance exceeding compensation targets—supportive for continued value creation under NorthStar 2030 strategy .
- Governance support: Robust say-on-pay (96% approval) and independent compensation oversight suggest investor confidence in pay design and performance linkage .
Overall: Compensation design and policies point to high pay-for-performance rigor and low misalignment risk; retention economics are balanced; performance delivery in 2024 is strong across revenue, margin, cash flow, and TSR-linked long-term measures—constructive signals for investors tracking management execution and insider-driven trading pressure.