Michael Tropeano

About Michael Tropeano

Michael Tropeano is 56 and serves as President of Rapiscan (Security division) since July 2025, having joined OSI Systems in 2016; he previously led Rapiscan Cargo & Vehicle Inspection globally and held senior roles at American Science and Engineering (AS&E) . He holds a Master’s in Mechanical Engineering from Rensselaer Polytechnic Institute and a Bachelor’s from Florida Institute of Technology . Company performance frameworks relevant to his role emphasize pay-for-performance via revenue CAGR and operating income (EBIT) CAGR; for FY2025, OSI achieved 7.49% compound revenue growth and 17.47% compound operating income growth against baseline metrics used in long-term incentives . OSI highlights record revenues, expanded operating margin, strong bookings/backlog, and strong TSR in FY2025, aligning executive incentives with multi-year financial outcomes .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

OSIS uses two core programs: (1) annual cash incentives tied to Adjusted ROE (AROE) for corporate NEOs, and (2) performance-based RSUs with 3-year metrics (Revenue CAGR: 20% weight; Operating Income CAGR: 80% weight) and annual “additional shares” earnouts. Tropeano-specific grants/metrics are not disclosed; tables below show company program.

• Annual Incentive (Corporate NEOs) | Metric | Target | Actual FY2025 | Payout Schedule | Payout Result | |---|---|---|---|---| | Adjusted ROE (AROE) | 24.35% | 25.31% | 0% if <18%; scales to 200% at ≥25.25% of base salary | 200% of base salary at 25.31% for participating corporate NEOs |

• Long-Term Performance RSUs (3-year program) | Metric | Weight | Threshold → Max Vesting % | FY2025 Performance | Vesting Outcome | |---|---|---|---|---| | Revenue CAGR | 20% | <2.0%→0%; 5.0%→100% | 7.49% (CAGR) | At/above max 3-year vesting for revenue metric | | Operating Income (EBIT) CAGR | 80% | <3.0%→0%; 7.0%→100% | 17.47% (CAGR) | At/above max 3-year vesting for EBIT metric |

• Annual Additional Shares Earnouts (per initial grant, % of grant) | Metric | Levels | FY2025 Performance | Additional Shares % |---|---|---|---| | Revenue CAGR | 5.5%→10%; 6.0%→20%; … 8.0%→60% | 7.49% | 50% of initial grant for revenue metric | | EBIT CAGR | 7.5%→10%; 8.0%→20%; … 10.0%→60% | 17.47% | 60% of initial grant for EBIT metric (max annual earnout) |

• Governance Safeguards

  • Robust clawback policy per SEC/Nasdaq standards; applies to current/former executive officers .
  • No hedging, pledging, or speculative transactions permitted; as of proxy date, no shares pledged by any NEO or director .
  • No single-trigger severance solely on change-in-control; no option repricing or below-FMV option grants .

Equity Ownership & Alignment

Employment Terms

Performance & Track Record

Company performance provides the context for Tropeano’s division-level execution and incentive alignment.

• Company Revenues, EBIT, EBITDA (Annual) | Metric | FY 2023 | FY 2024 | FY 2025 | |---|---|---|---| | Revenues ($) | 1,278,427,000 | 1,538,758,000 | 1,713,166,000 | | EBIT ($) | 142,845,000* | 195,452,000* | 216,352,000* | | EBITDA ($) | 181,358,000* | 237,661,000* | 259,932,000* |

Values marked with an asterisk were retrieved from S&P Global.

• TSR and Operating Income benchmarks (Pay vs Performance) | Metric | 2021 | 2022 | 2023 | 2024 | 2025 | |---|---|---|---|---|---| | TSR ($ of $100) | 136.17 | 114.47 | 157.86 | 184.24 | 301.26 | | Operating Income ($) | 115,371,000 | 121,749,000 | 135,279,000 | 189,061,000 | 217,524,000 |

• FY2025 Highlights: record revenues, record adjusted EPS, expanded operating margin, strong bookings/backlog, and two Security acquisitions supporting growth .

Compensation Committee Analysis

• Composition and activity: Audit (4 meetings), Compensation (2), Risk Management (4), Technology (3) in FY2025; committees comprised of independent directors .
• Independent consultant: Pearl Meyer engaged for executive compensation advisory; peer groups span aerospace/defense, communications equipment, electronic components, and healthcare equipment .
• Say-on-Pay: 64% approval in 2024; Board attributed lower support to a one-time CEO stay bonus; program continued with performance-based focus in FY2025 .

Risk Indicators & Red Flags

• Positive governance: robust clawback, prohibition of hedging/pledging, no single-trigger CIC severance, no option repricing; stock ownership guidelines at 5x salary .
• Related party matters: ECIL-Rapiscan JV ownership includes stakes by Ajay Mehra (4.5%) and Deepak Chopra (10.5%); earnings from JV have been immaterial to OSI’s results .
• Section 16 compliance: executives/directors generally compliant; none >10% ownership; isolated late Form 4s for directors (Ballhaus, Hawkins) noted by the Company .

Investment Implications

• Alignment: Tropeano operates under an enterprise-wide pay-for-performance framework that strongly weights EBIT growth and includes rigorous clawback/ownership policies—favorable for long-term value creation in Security screening markets .
• Retention risk: While Tropeano’s individual compensation terms are not disclosed, OSI’s use of multi-year performance RSUs and 5x salary ownership guidelines, plus prohibition on hedging/pledging, generally reduce turnover risk among senior operators .
• Execution watchpoints: Security division growth has been strong; monitoring divisional backlog conversion, margin sustainability, and any future 8-K compensatory disclosures for Tropeano would refine views on insider selling pressure and vesting overhangs .