Thomas A. Bell
Leidos HoldingsAbout Thomas A. Bell
Thomas A. Bell, 64, is Chief Executive Officer and a director of Leidos (LDOS), serving since May 2023 and sitting on the Technology & Information Security (TIS) Committee . Under his leadership, FY2024 revenue rose 8% to $16.7B, adjusted EBITDA margin expanded 210 bps to 12.9%, operating cash flow increased 19%, backlog grew 18% to $43.6B (book-to-bill 1.4x), and $906M was returned to shareholders; non‑GAAP EPS rose 40% . The stock reached an all-time high of $202.90 and TSR significantly outperformed peers in 2024, while S&P upgraded Leidos’ rating to BBB, reflecting improved financial positioning and strategic execution . Leidos’ 2024 incentive outcomes reflect operational outperformance: annual cash metrics exceeded targets (Revenue 104%, Adjusted EBITDA margin 121%, Operating cash flow 127%) and short‑term incentive payouts were ~186–198% of target for NEOs .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Rolls‑Royce plc / Rolls‑Royce North America | President, Defense; Chairman & CEO, RR North America | Since Feb 2018 (prior to Leidos) | Led global defense business (~10,000 employees) and U.S. operations; major contract wins across aerospace/naval customers . |
| The Boeing Company | SVP, Global Sales & Marketing, Defense, Space & Security; other senior roles | 2015 (SVP role) and earlier multi‑decade tenure | Directed global sales/marketing; deep experience in strategy, customer acquisition, and large U.S. government stakeholder management . |
| Rolls‑Royce (prior stint) | President, Defense Aerospace; President, Customer Business, North America | Joined mid‑2012 (prior to Boeing 2015) | Ran defense aerospace and North America customer business . |
| Martin Marietta (pre‑Lockheed merger) | Early aerospace roles | — | Began career in human space flight; foundation for A&D leadership . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Public company boards | — | — | No current public company directorships disclosed . |
| Industry/policy engagement | Speaker/participant (e.g., Reagan National Defense Forum; associations) | 2024 | Elevated legislative engagement; part of broader investor/industry outreach noted by LDOS . |
Fixed Compensation
| Component | FY2024 | Notes |
|---|---|---|
| Base Salary ($) | 1,306,539 | Summary Compensation Table (SCT) . |
| Annual Cash Incentive Target ($) | 1,980,000 (2025 grant framework) | Plan‑based awards set threshold/target/max for 2025 cash incentive . |
| Annual Cash Incentive Paid ($) | 3,696,660 | FY2024 payout (≈186–198% range for NEOs overall) . |
Performance Compensation
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Short‑Term Incentive (FY2024 design and outcomes)
- Metrics and weights: Adjusted EBITDA margin (40%), Operating cash flow (30%), Revenue (30%); payout contingent on a 70% EBITDA margin threshold; +/-20% personal goals modifier (no modifier used for NEOs in 2024) .
- Outcomes vs targets: Revenue 104%, Adjusted EBITDA margin 121%, Operating cash flow 127% (compensation metrics), supporting elevated payouts .
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Long‑Term Incentive (FY2024 grants and structure)
- Metric mix: 50% Cumulative Adjusted EBITDA dollars; 50% Relative TSR; negative TSR cap limits payout to 100% if absolute TSR is negative .
- 2022–2024 PSU cycle: Approved payout score 121.36% (relative TSR and revenue, pre‑2024 metric shift) .
FY2024 Grants to Mr. Bell (details and vesting)
| Instrument | Grant Date | Quantity/Terms | Vesting | Value/Strike |
|---|---|---|---|---|
| Stock Options | 03/08/2024 | 38,407 options | 34%/33%/33% annually; 7‑year term | $129.79 strike; grant date value $1,340,020 . |
| PRSUs (performance‑hurdle RSUs) | 03/08/2024 | 15,487 units | EPS hurdle year 1; then 34%/33%/33% annually | Grant date value $2,010,058 . |
| PSUs (3‑yr performance shares) | 03/08/2024 | 25,811 target (12,906 threshold; 51,622 max) | Cliff after 3 years, Committee discretion to reduce | Grant date value $4,069,851 . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 29,507 shares total (11,183 common; 18,324 options/RSUs within 60 days); group ownership (directors & officers) ~0.69%; no individual >1% . |
| Shares Outstanding (base for % calc) | 128,213,171 shares outstanding (Feb 28, 2025) . |
| Pledging/Hedging | Prohibited: no holding in margin accounts, no pledging or hedging (collars, swaps, etc.); preclearance required . |
| Ownership Guidelines | CEO 6x base salary; must hold all after‑tax shares from equity programs until met; no exceptions granted in 2024 . |
| Unvested/Outstanding Awards (selected) | As of FY2024 year‑end: PRSU 11,215 (2023 grant); PSU target 28,320 (2023); PRSU 15,487 (2024); PSU target 25,811 (2024); unexercised options include 28,434 (79.45 strike, exp. 2030) and 38,407 (129.79 strike, exp. 2031) . |
Note: LDOS states “No shares have been pledged” across directors and officers (as of Feb 28, 2025) .
Employment Terms
- Agreement & Severance Multiples (Bell)
- Without CIC: 1.0x (base salary + target bonus) cash severance; pro‑rated bonus based on actual performance; select equity vests pro‑rata; benefits/outplacement .
- With CIC (double‑trigger; termination within 3 months pre‑CIC or 24 months post‑CIC): up to 2.5x (base salary + target bonus) cash; pro‑rated bonus at target; accelerated equity vesting; additional benefits; subject to release, confidentiality, 24‑month non‑compete and non‑solicit .
- No excise tax gross‑ups; no single‑trigger vesting .
- Illustrative Termination Values (as of Jan 3, 2025; includes severance, pro‑rated bonus, equity and benefits)
Scenario Total ($) Components ($) Involuntary Termination/Good Reason (no CIC) 16,307,224 Severance+Bonus 6,996,660; RSUs 1,562,417; Options 812,288; PSUs 6,912,406; Benefits 23,453 . Termination in connection with CIC (double‑trigger) 30,594,067 Severance+Bonus 11,946,660; RSUs 3,971,976; Options 2,591,727; PSUs 11,885,751; Benefits 197,953 . Death 22,146,114 Pro‑rated bonus 3,696,660; RSUs 3,971,976; Options 2,591,727; PSUs 11,885,751 . Disability 17,172,769 Pro‑rated bonus 3,696,660; RSUs 3,971,976; Options 2,591,727; PSUs 6,912,406 . - Clawbacks | Broad recoupment policy (cash and equity) for restatements, misconduct, or failure to manage risk; NYSE/Exchange Act 10D-compliant policy adopted Oct 26, 2023 .
- Deferred Compensation & Retirement | NEOs may defer portions of salary/cash/equity; no defined benefit/SERP maintained by LDOS .
Board Governance (including Bell’s directorship)
- Role & Independence: Bell is CEO and a non‑independent director; sits on TIS Committee . Board is led by an Independent Chair (Robert S. Shapard) with robust duties and executive sessions at every meeting; committees chaired by independents .
- Attendance & Activity: 9 full Board meetings in FY2024; no director <75% attendance; 100% attended 2024 annual meeting .
- Independence Safeguards: Separate Chair/CEO since 2023; majority independent Board; annual evaluations; proxy access; no supermajority provisions .
Director Service & Compensation (dual-role implications)
- Committee Memberships: Bell serves on TIS (not chair); all key committees (Audit & Finance, HRC, CGE) are independent-only .
- Dual‑Role Considerations: Governance mitigants include an Independent Chair, executive sessions without management, and independent committee leadership, addressing typical CEO/Director independence concerns .
- Director Pay: Employee directors receive no extra pay for Board service; Bell’s compensation reported in executive tables .
Compensation Structure Analysis
- Mix & Philosophy: Predominantly variable, equity-based pay with rigorous, pre‑set financial goals; at CEO level, fixed base is a small share of total .
- 2024 Program Shifts: Short‑term moved to EBITDA margin/OCF/Revenue with a threshold and behavioral modifier; long‑term shifted from revenue to cumulative adjusted EBITDA dollars (50%) plus relative TSR (50%) with negative TSR cap—tilting emphasis to high‑quality, profitable backlog over volume .
- Year‑over‑Year Pay: Bell’s SCT total rose from $9.19M (2023) to $12.46M (2024) as performance and equity grants increased; 2024 CAP (pay‑versus‑performance) for Bell calculated at $20.47M, reflecting stock appreciation impacts on multi‑year equity .
- Say‑on‑Pay Support: 96% approval at 2024 meeting; 3‑yr average 96%—low shareholder dissent risk on pay .
Say‑on‑Pay & Peer Benchmarking
- Shareholder Feedback: Extensive outreach (engaged with holders of ~56M shares; 84% of top‑20) and program changes responsive to investor input .
- Peer Positioning: Target total direct compensation set around market median; peer list includes AECOM, Booz Allen, CACI, Jacobs, KBR, L3Harris, Northrop, SAIC, Textron, etc. .
Performance & Track Record
- FY2024 Highlights: Revenue $16.7B (+8%); adjusted EBITDA margin 12.9% (+210 bps); book‑to‑bill 1.4x; backlog $43.6B (+18%); operating cash flow +19%; returned $906M to shareholders; non‑GAAP EPS +40% .
- TSR & Stock: All‑time high $202.90; TSR significantly exceeded peers since start of 2024; S&P rating upgraded to BBB .
Risk Indicators & Red Flags (disclosed)
- Hedging/Pledging: Prohibited; no pledged shares disclosed .
- Repricing/Gross‑ups/Single‑Trigger: Not permitted; no single‑trigger CIC vesting; no excise tax gross‑ups .
- Related Parties: None involving Bell disclosed; policy administered through Audit & Finance Committee .
Equity Vesting & Potential Selling Pressure
- Scheduled Vesting: Annual vesting for PRSUs (after EPS hurdle) and options (34/33/33%); PSUs cliff after 3 years; 2024 grants dated March 8 suggest recurring March vesting events—watch for March liquidity windows subject to trading windows .
- Insider Trading Controls: Preclearance required; hedging/pledging barred—reduces forced‑sale/pressure risk from collateral or derivative hedges .
- Beneficial Ownership: Bell’s directly held/common plus near‑term exercisable/vesting holdings are modest vs. shares outstanding, but significant unvested equity creates retention alignment; no pledges reported .
Employment Terms (CIC/Severance Economics) – Quick View
| Term | Without CIC | With CIC (Double‑Trigger) |
|---|---|---|
| Cash Multiple | 1.0x (base + target bonus) | Up to 2.5x (base + target bonus) |
| Bonus Basis | Pro‑rated, actual performance | Pro‑rated, target |
| Equity | Pro‑rata vesting (select awards) | Accelerated vesting |
| Covenants | Release; confidentiality; non‑disparagement; non‑compete/non‑solicit (24 months) | Same; within CIC protection period |
| Illustrative Total (Jan 3, 2025) | $16.31M | $30.59M |
| Citations: . |
Investment Implications
- Alignment and incentives: Pay mix is heavily performance‑based (EBITDA, cash, TSR), with a negative TSR cap and a shift to cumulative EBITDA in LTI—signal: management prioritizes profitable growth and high‑quality backlog; 2024 overachievement drove outsized cash incentive payout (Bell: $3.70M), a positive indicator for execution momentum .
- Retention and overhang: Large multi‑year unvested equity and robust double‑trigger CIC protections suggest low near‑term flight risk; watch cyclical vesting windows (March), but hedging/pledging bans dampen forced‑sale dynamics; no pledges disclosed .
- Governance risk: CEO also a director, but mitigated by independent Chair, independent committees, and frequent executive sessions; say‑on‑pay support is strong (96%)—low governance friction expected .
- Performance/TSR beta: Outperformance (revenues, margin, OCF, backlog) and rating upgrade underpin improved equity compensation valuations (CAP up), but negative TSR cap prevents windfalls in down markets—aligns realized pay with shareholder returns .
References:
- Governance, director roles, board structure, independence, engagement: .
- Compensation design, weights, thresholds, payouts, grants, vesting: .
- Ownership, pledging/hedging policy, guidelines: .
- Severance/CIC terms and values: .
- Company performance and TSR/stock highlights: .
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- Peer group and benchmarking: .