Dirkson Charles
About Dirkson Charles
Dirkson Charles, age 61, is President, Chief Executive Officer, Executive Co‑Chairman and Director of Loar, which he founded in 2012; he has held the same roles at Loar Holdings since its 2017 inception and joined the board at the IPO . He holds a BBA in public accounting and an MBA in finance from Pace University and is a New York CPA; prior roles include EVP at McKechnie Aerospace and EVP/CFO at K&F Industries, plus five years at Arthur Andersen . Under his leadership, 2025 year‑to‑date results showed strong operating momentum with net sales up 24.7% and Adjusted EBITDA up 31.3% Y/Y through Q3, and quarterly Adjusted EBITDA margins approaching 39% (Q3: 38.7%) . He also led strategic M&A including Applied Avionics (2024) and Beadlight (2025) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| McKechnie Aerospace | Executive Vice President | May 2007–Dec 2010 | Led financial operations for a multinational aerospace business |
| K&F Industries | EVP & Chief Financial Officer | Feb 1989–May 2007 | Led finance at a leading aviation components maker |
| Arthur Andersen & Co. | Audit professional (supervised engagements) | Five years (dates not specified) | SEC rules expertise; public company audit leadership |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Doncasters Group Limited | Chairman | Since Mar 2020 | Industrial/defense components; board leadership |
| Builders FirstSource, Inc. | Director | Since Jun 2022 | Public company director experience |
Board Governance & Committee Context (Loar)
- Class I director; nominated in 2025 to serve until the 2028 annual meeting .
- Dual role: CEO and Executive Co‑Chairman; board determined all other directors except Mr. Charles and Mr. Milgrim are independent; David Abrams serves as Lead Independent Director, overseeing executive sessions and CEO performance discussions .
- Committee structure: Audit (Chair: Taiwo Danmola; members: M. Chad Crow, Margaret McGetrick), Compensation (Chair: Raja Bobbili; members: David Abrams, Paul S. Levy), Nominating/Governance (Chair: Alison Bomberg; members: Anthony M. Carpenito, Paul S. Levy) .
- Board/committee meeting attendance: all directors attended ≥75% of board and committee meetings in FY2024; four executive sessions of non‑management directors were held, presided over by the Lead Independent Director .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base salary ($) | 950,000 | 950,000 |
| Director fees | N/A (employee; no additional director comp) | N/A (employee; no additional director comp) |
| All other compensation ($) | 9,900 (401k match) | 10,350 (401k match) |
Performance Compensation
- Annual cash bonus structure (per employment agreement):
- Metric: EBITDA vs budgeted “Target”; payout scale: <85% = 0%; 85% = 50% of Target Bonus; linear to 100% = 100%; 100–110% = linear to 150%; ≥110% = 150% of Target Bonus. Target Bonus = 100% of base salary for Mr. Charles. Paid within 30 days of completion of audited financials .
- 2024 outcomes for Mr. Charles:
- Non‑Equity Incentive Plan Compensation (bonus) = $1,146,641; indicates a payout above the 100% target given a $950,000 target bonus .
- Option awards (grant‑date fair value) = $1,233,507 under the 2024 Equity Incentive Plan .
Detailed incentive metrics table:
| Component | Metric | Target | Actual/Payout | Vesting/Timing |
|---|---|---|---|---|
| Annual cash bonus | EBITDA vs Target | Target Bonus = 100% of base salary | $1,146,641 paid for 2024 | Paid within 30 days post audit completion |
| Stock options (IPO grant) | Time‑based tranches (A–E) | 710,000 options total | Grant FV $1,233,507 (2024) | Tranche A–E schedule below |
Stock option vesting and terms (Mr. Charles):
| Tranche | Options | Vest Date | Exercise Price | Expiration |
|---|---|---|---|---|
| A | 142,000 | Apr 29, 2025 | $28.00 | Apr 24, 2034 |
| B | 142,000 | Apr 29, 2026 | $30.80 (1.10x IPO) | Apr 24, 2034 |
| C | 142,000 | Apr 29, 2027 | $33.88 (1.21x IPO) | Apr 24, 2034 |
| D | 142,000 | Apr 29, 2028 | $37.27 (1.33x IPO) | Apr 24, 2034 |
| E | 142,000 | Apr 29, 2029 | $40.99 (1.46x IPO) | Apr 24, 2034 |
- Options granted in five equal tranches; options are non‑transferable (with limited exceptions), generally expire the earlier of 10 years from grant or 90 days after termination (except for death/disability/cause) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 4,721,377 shares; 5.2% of outstanding as of Mar 28, 2025 [93,556,071 shares outstanding] |
| Ownership detail | Includes shares held by the Charles Family Trust 13 (Mr. Charles is trustee) and 142,000 shares issuable upon exercise of Tranche A options vesting Apr 29, 2025 (counted within 60 days of Apr 21, 2025) |
| Vested vs unvested | As of Dec 31, 2024, all 710,000 options were unexercisable; Tranche A became exercisable on Apr 29, 2025 |
| Hedging/pledging | Company policy prohibits short sales, hedging, use as collateral subject to margin calls, and pledging of company securities |
| Lock-up/overhang | Additional Lock‑up restrains Mr. Charles from selling IPO‑held shares until Sep 30, 2027, except for up to $30 million and other limited exceptions; a May 13, 2025 waiver allowed pro‑rata participation alongside other Principal Investors in a registered offering |
Employment Terms
- Employment agreement: Amended and restated at IPO; 2024 base salary $950,000; annual performance bonus opportunity per structure above .
- Severance (Company without cause / Good Reason / Disability): 24 months base salary continuation; pro‑rata performance bonus; up to 18 months COBRA premiums; subject to release and restrictive covenants .
- Restrictive covenants: 24‑month non‑compete and non‑solicit; perpetual confidentiality .
- Change‑in‑control economics: Under the equity plan, all outstanding stock options become immediately exercisable upon a change in control; plan also provides equitable adjustments for capital changes (e.g., splits, dividends) .
- Clawback: Performance‑based compensation recovery policy adopted Apr 16, 2024 (Rule 10D‑1/NYSE compliant) covering incentive compensation tied to financial reporting measures; SOX 304 reimbursement obligations also apply for misconduct‑related restatements .
- Hedging/pledging policy: Prohibited (see above) .
- EGC/Say‑on‑Pay: As an Emerging Growth Company, Loar is currently exempt from say‑on‑pay and CEO pay ratio disclosures .
Performance & Track Record (selected)
| Period | Net Sales | Net Income | Adjusted EBITDA | Notes |
|---|---|---|---|---|
| Q1 2025 | $114.7m | $15.3m | $43.1m | Record quarter; Adjusted EBITDA margin 37.6% |
| Q2 2025 | $123.1m | $16.7m | $47.1m | Adj. EBITDA margin 38.3%; Beadlight acquisition announced |
| Q3 2025 | $126.8m | $27.6m | $49.1m | Adj. EBITDA margin 38.7% |
| 9M 2025 | $364.5m | $59.6m | $139.4m | Net sales +24.7% Y/Y; Adj. EBITDA margin 38.2% |
- 2025 outlook raised multiple times; latest guide (Nov 12, 2025): net sales $487–$495m; Adjusted EBITDA $185–$188m; Adjusted EPS $0.93–$0.98; effective tax rate ~15% .
- Balance sheet as of Sep 30, 2025: cash $99.0m; long‑term debt $279.4m; total assets $1.53bn .
Related Party and Governance Considerations
- Registration Rights & Voting Agreements: Mr. Charles is a party to a registration rights agreement (with additional lock‑up provisions) and a voting agreement with Abrams Capital, GPV Loar LLC, and Brett Milgrim that coordinates votes for certain director designees (terminates upon earlier of 10 years or specified ownership thresholds) .
- Former insider lending: Mr. Charles was President/sole member of Fall Leaf LLC, formerly a lender under Loar’s credit agreement; all such insider loans were sold at par to Blackstone Credit on Jan 31, 2024; detailed principal/interest flows disclosed .
- Director compensation context: Non‑employee directors receive a $100,000 annual cash retainer and had a one‑time stock purchase/matching program at IPO; Mr. Charles received no additional pay for board service .
Compensation Structure Analysis
- Pay mix and risk alignment: 2024 introduced sizable stock option grants (710,000 options across performance‑priced tranches), increasing long‑term, at‑risk equity exposure; options carry rising strike prices (1.10x–1.46x IPO price across years 2–5), requiring multi‑year value creation to realize gains .
- Annual bonus rigor: Single financial metric (EBITDA) with a 50%–150% payout curve around budget; 2024 cash bonus exceeded the 100% target, consistent with record operational performance .
- Protections and shareholder friendliness: Mandatory clawback, strict no‑hedge/no‑pledge policy, and a long dated additional lock‑up (to Sep 30, 2027) moderate near‑term insider selling pressure; equity plan provides change‑in‑control acceleration (single‑trigger option exercisability) .
Investment Implications
- Alignment: Significant beneficial ownership (5.2%) including trust holdings, multi‑year option tranches with above‑IPO strike ladders, and prohibitions on hedging/pledging support alignment with long‑term shareholders, while the extended additional lock‑up reduces near‑term supply overhang (subject to limited waivers) .
- Performance‑linked pay: EBITDA‑based cash bonus (target = 100% of salary) and strong 2025 operating execution (net sales +24.7% YTD; Adjusted EBITDA +31.3% YTD) indicate pay‑for‑performance linkage; the option design concentrates value creation incentives in 2026–2029 .
- Retention and transition risk: Robust severance (24 months base + pro‑rata bonus) and 24‑month non‑compete/non‑solicit reduce voluntary departure risk; change‑in‑control option acceleration is a consideration for event‑driven scenarios .
- Governance checks on dual role: CEO/Executive Co‑Chairman structure is mitigated by a Lead Independent Director, fully independent key committees, and regular executive sessions, which helps address independence concerns .