Haitham Khouri
About Haitham Khouri
Haitham Khouri (age 44) is Chief Executive Officer of Perimeter Solutions (PRM) since March 8, 2023, and a director since June 2021; he previously served as Vice Chairman from December 2021 to March 2023 . He holds a BA in Economics from Cornell and an MBA with Distinction from Harvard Business School . Under his leadership through 2024, PRM net sales rose 74% to $561.0 million and Adjusted EBITDA increased 190% to $280.3 million, while GAAP net loss was $5.9 million; SEC-defined cumulative TSR for a $100 initial investment measured 106.50 in 2024 versus 38.33 in 2023, 76.17 in 2022 and 115.75 in 2021 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| JP Morgan | Analyst | 2002 | Early career finance experience |
| Deutsche Bank | Investment Banking Analyst | 2003–2005 | Transaction and capital markets training |
| Oak Hill Capital Partners | Private Equity Associate | 2005–2007 | Buyout investing exposure |
| Hound Partners | Senior Analyst | 2009–2018 | Public markets investing; long-term, fundamental orientation |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Perimeter Solutions, Inc. | Director | 2021–present | Not independent under NYSE rules |
| EverArc Founders, LLC | Owner/Operator; 25% interest | 2019–present | Party to Founder Advisory Agreement providing advisory services/fees to PRM |
Fixed Compensation
| Year | Base Salary ($) | Target Annual Incentive (% of Salary) |
|---|---|---|
| 2024 | 615,000 | 100% |
| 2023 | 524,992 | 100% |
Notes: Khouri is not paid director fees due to affiliation with the EverArc Founder Entity; CEOs/directors affiliated with the founder entity do not receive board compensation .
Performance Compensation
Annual Cash Incentive Structure and 2024 Outcomes
| Component | Weight | Target Basis | 2024 Target | 2024 Actual | Payout vs Target |
|---|---|---|---|---|---|
| Adjusted EBITDA (Consolidated) | 75% | Company consolidated EBITDA | $197.1mm target | $280.3mm actual | 107% payout for Khouri |
| Individual Performance | 25% | CEO-specific annual objectives | 25% target | Achieved above target | 34% payout for Khouri |
| Total Annual Cash Incentive | — | Sum of above | $615,000 target | $862,071 paid | $862,071 payout |
Equity Awards and Vesting Mechanics
| Grant Date | Type | Options (#) | Exercise Price ($) | Expiration | Vesting Basis |
|---|---|---|---|---|---|
| 2/14/2024 | Performance-based options (two tranches) | 500,000; 400,000 | 5.23 | 2/14/2034 | Performance-based AOP targets; mix of 5-Year Option and Annual Extension |
| 3/8/2023 | Performance-based 5-Year Option | 2,000,000 total eligibility; 800,000 exercisable; 1,200,000 unearned at YE 2024 | 8.26 | 3/8/2033 | AOP performance tranches across 5 years |
Key vesting terms:
- AOP targets: minimum and maximum compounded annual growth reset to 10% and 20% (from 13.5%/23.5%) in May 2023 amendments; cumulative vesting replaces prior look-back/look-forward; equity sweep allows vesting if stock price exceeds 2x exercise price over sustained period within years 3–5 .
- 2024 performance met the 10% growth rate AOP threshold; 3,190,000 options vested across NEOs (program-level disclosure) .
Equity Ownership & Alignment
| Holder | Beneficial Ownership (shares) | % of Outstanding | Composition |
|---|---|---|---|
| Haitham Khouri | 2,375,218 | 1.6% | Includes 1,225,385 in Khouri Spousal Dynasty Trust (trustee) and 900,000 options exercisable within 60 days of 3/31/2025 |
Alignment policies:
- Share retention guidelines require CEO to hold a minimum personal investment of $2.2 million; value may include ITM value of options over strike, but at least half must be owned shares .
- Anti-hedging/anti-pledging policy applies to all directors and officers, with the company stating all are in compliance; short sales and derivatives are prohibited .
Insider selling pressure considerations:
- Multi-year performance-based option program creates annual vesting cycles tied to AOP; equity sweep could accelerate vesting if price thresholds are met, potentially increasing overhang and sellable inventory in years 4–5 .
- No exercises reported by NEOs in 2024, implying realized liquidity from awards was zero in that year .
Employment Terms
| Term | Details |
|---|---|
| Employment Agreement | CEO agreement dated March 8, 2023; indefinite term; initial base $525,000 (subsequently $615,000 in 2024) and 100% target bonus |
| Severance (No Cause/Good Reason/Disability) | 1.25x salary + 1.0x target bonus + 15x monthly COBRA rate differential; paid over 15 months, subject to release |
| Non-Compete/Non-Solicit | Applies during employment and for at least 15 months post-termination |
| Potential Payments (as of 12/31/2024) | Termination without cause: Cash severance $1,630,821; insurance $29,971; no equity acceleration; Change-in-control: same cash/insurance plus $15,924,000 accelerated vesting |
| CoC Option Treatment | Unvested options eligible to vest based on greater of average vesting of prior two years or vesting determined by CoC transaction price; percentage applies to current and remaining performance years |
| Clawback | 2023 Executive Officer Clawback Policy covering incentive-based comp tied to financial reporting measures (including stock price, TSR, AOP) in case of restatement |
Board Governance
- Role and independence: Khouri is CEO and a director but not independent under NYSE rules; PRM separates CEO and Co-Chairmen roles for oversight .
- Committee service: Khouri chairs the Executive Committee; he is not on Audit, Compensation, or Nominating committees (all independent membership) .
- Executive Committee scope: oversight of capital allocation, M&A, strategy, guidance, IR, officer succession, and business reviews; met 24 times in 2024 .
- Board attendance: All incumbents attended at least 75% of board and committee meetings; only Khouri attended the 2024 shareholder meeting in person due to venue requirements in Luxembourg .
- Director compensation: Founders (Howley, Thorndike, Khouri) do not receive board fees due to affiliation with the founder entity; independent directors receive cash retainers and annual performance-based options .
Director Compensation (Khouri-specific)
- Not paid director fees; compensation is solely via executive role and equity/programs in his capacity as CEO .
Compensation Peer Group and Shareholder Feedback
- Peer group: 17 industrial/chemical companies used for benchmarking (e.g., ASPN, ECVT, IOSP, SXT, ZWS, MP, EPAC) .
- Positioning: Cash compensation generally below market median; total direct compensation above market reflecting risk premium from performance-based options .
- Say-on-Pay: 2024 advisory approval ~91% (excluding abstentions and broker non-votes) .
Performance & Track Record
- Segment performance: Fire Safety Adjusted EBITDA increased to $240.1mm (+$163.9mm YoY), Specialty Products Adjusted EBITDA to $40.2mm (+$19.6mm YoY), driven by net sales growth and operating leverage .
- Strategic execution: Acquisition of IMS for ~$33mm on Dec 24, 2024 to build aftermarket IP-based electronics components platform with “private-equity like returns” target .
- Operational response: Demonstrated rapid deployment capability during Los Angeles wildfires with bases and MRBs; underscores distributed manufacturing and readiness .
Related Party Transactions and Alignment Considerations
- Founder Advisory Agreement: PRM assumed EverArc’s advisory agreement with EverArc Founders, LLC (owned/operated by Thorndike 33%, Howley 33%, Khouri 25%, Raj 7%, Britt Cool 2%); services include strategic and capital allocation advice .
- 2024 advisory fees: Fixed annual advisory amount of 2,357,061 shares (~$30.3mm value based on 2024 average price); no variable amount paid in 2024 .
- Termination economics: In Sale/liquidation scenarios, fixed and variable amounts due for remaining term paid in cash, with Payment Price increasing 15% annually for remaining years; Payment immediately due on termination .
Implications: Dual role as CEO/director and 25% owner of the founder entity receiving equity-based advisory fees presents potential governance and alignment complexities despite clear disclosure and committee independence .
Compensation Structure Analysis
- Equity-heavy, performance-based: Emphasis on long-dated, AOP-linked options aligns with long-term value creation; annual cash incentives tied 75% to Adjusted EBITDA and 25% to individual performance .
- Target adjustments: 2023 amendments lowered AOP growth thresholds (13.5%→10% minimum; 23.5%→20% maximum) and added cumulative vesting and equity sweep; improves line-of-sight but could ease vesting conditions vs prior framework .
- Governance practices: No re-pricing/backdating; no change-in-control tax gross-ups; robust anti-hedging/pledging; independent comp consultant (FW Cook) engaged; equity grants on predetermined schedule .
Tables: Key Quantitative Snapshots
2024 Company Performance Metrics
| Metric | 2024 Result |
|---|---|
| Net Sales ($mm) | 561.0 |
| Adjusted EBITDA ($mm) | 280.3 |
| Net Income (Loss) ($mm) | (5.9) |
| SEC-defined cumulative TSR (initial $100 investment) | 106.50 |
2024 Annual Incentive Targets and Results (Company/platform)
| Metric | Threshold | Target | Maximum | Actual |
|---|---|---|---|---|
| Adjusted EBITDA Consolidated ($mm) | 98.6 | 197.1 | 295.7 | 280.3 |
| Adjusted EBITDA Fire Safety ($mm) | 92.1 | 184.1 | 276.2 | 255.9 (budget adjusted +8%) |
| Adjusted EBITDA Specialty Products ($mm) | 18.7 | 37.3 | 56.0 | 47.8 |
Khouri 2024 Compensation (Summary Compensation Table)
| Component | 2024 ($) |
|---|---|
| Salary | 615,000 |
| Option Awards (grant-date fair value) | 2,580,000 |
| Non-Equity Incentive Plan (Annual Cash Incentive) | 862,071 |
| All Other Compensation | 46,956 |
| Total | 4,104,027 |
Khouri 2024 Grants of Plan-Based Awards
| Grant Date | Options (#) | Exercise Price ($) | Fair Value ($) |
|---|---|---|---|
| 2/14/2024 | 500,000 | 5.23 | 1,400,000 |
| 2/14/2024 | 400,000 | 5.23 | 1,180,000 |
Khouri Outstanding Equity (12/31/2024)
| Grant Date | Exercisable (#) | Unearned (#) | Exercise Price ($) | Expiration |
|---|---|---|---|---|
| 2/14/2024 (Annual Extension) | — | 400,000 | 5.23 | 2/14/2034 |
| 2/14/2024 (5-Year Option) | 100,000 | 400,000 | 5.23 | 2/14/2034 |
| 3/8/2023 (5-Year Option) | 800,000 | 1,200,000 | 8.26 | 3/8/2033 |
Potential Payments if Terminated (as of 12/31/2024)
| Scenario | Cash Severance ($) | Insurance Benefits ($) | Accelerated Vesting ($) | Total ($) |
|---|---|---|---|---|
| Without Cause / Good Reason | 1,630,821 | 29,971 | — | 1,660,792 |
| Death/Disability | 1,630,821 | 29,971 | — | 1,660,792 |
| Without Cause/Good Reason in CoC | 1,630,821 | 29,971 | 15,924,000 | 17,584,792 |
| Change in Control | 1,630,821 | 29,971 | 15,924,000 | 17,584,792 |
Risk Indicators & Red Flags
- Founder Advisory Agreement economics and 25% founder entity interest (Khouri) create potential conflicts due to ongoing fixed-share issuance and contingent variable fees; termination mechanics escalate obligations in Sale/liquidation scenarios .
- Option program amendments reduced AOP vesting hurdles (13.5%→10% min) and added equity sweep; while justified for stability, investors should monitor for easier vesting contributing to dilution/overhang .
- No hedging/pledging permitted; company states compliance, mitigating alignment risk from collateralization/derivatives .
- Material weaknesses in internal controls reported for 2022 were remediated by 2023 (audit firm transition to KPMG in 2024), reducing reporting risk .
Investment Implications
- Alignment: Khouri’s compensation is highly performance-based, with heavy equity tied to AOP and EBITDA outcomes; share retention requires meaningful personal exposure, and anti-hedging/pledging policies strengthen alignment .
- Upside drivers: Strong 2024 EBITDA growth and segment performance support future option vesting and potential equity sweep triggers; acquisition (IMS) adds a runway for cash returns consistent with capital allocation framework .
- Governance watchpoints: Dual role (CEO/director) plus economic participation in the founder entity fee structure is a governance complexity; continue tracking committee independence, say-on-pay outcomes, and any changes to founder advisory terms .
- Trading signals: Annual AOP-based vesting cycles and potential equity sweep could create periodic insider exercise/selling windows; monitor 10b5-1 filings and Form 4 activity around fiscal year-end performance determinations and price thresholds .