W. Nicholas Howley

About W. Nicholas Howley

W. Nicholas Howley, age 73, has served as Co‑Chairman of the Board of Perimeter Solutions, Inc. (PRM) since November 2021 and as a director since 2021. He co‑founded TransDigm Group Inc. in 1993, served as its CEO and Chairman from 2003–2018, and is currently Chairman of TransDigm’s board. He holds a B.S. in Mechanical Engineering from Drexel University and an M.B.A. from Harvard Business School .

Past Roles

External Roles

Board Governance

• Independence status: Not independent under NYSE and company standards; Board determined that all nominees except Messrs. Howley, Khouri, and Thorndike are independent .
• Committee assignments: Executive Committee member (not Chair). The Executive Committee oversees capital allocation, M&A, overall strategy, public guidance/IR, and succession; it met 24 times in 2024 .
• Board attendance: In 2024, the Board held six meetings; each incumbent director attended at least 75% of aggregate Board and assigned committee meetings .
• Board leadership: CEO and Co‑Chairman roles are separated; Co‑Chairmen provide strategic guidance and set Board agendas .

Fixed Compensation

PRM states that Messrs. Howley, Thorndike, and Khouri do not receive compensation for Board service due to their affiliation and control of the entity providing advisory services (EverArc Founder Entity) .

Performance Compensation

Founder Advisory Agreement (Related‑party; paid to EverArc Founders, LLC, in which Howley holds 33%):

• Fixed Annual Advisory Amount: 2,357,061 PRM shares per year through Dec 31, 2027; for 2024, value ≈ $30.3M based on $12.85 average share price; elected ~78% in stock (1,837,304 shares) and ~$6.7M in cash, settled Feb 18, 2025 .
• Variable Annual Advisory Amount: 18% of increase in “Payment Price” per share × 157,137,410 shares (calculation base), once the average price hurdle is achieved; no variable amount for 2024 since the 2024 average price ($12.85) was below the prior highest average price ($13.63) .
• Ownership splits of EverArc Founder Entity: Thorndike 33%, Howley 33%, Khouri 25%, Raj 7%, Britt Cool 2% .
• Termination on sale/liquidation: Company must pay in cash the remaining fixed and variable amounts for the year of termination and each remaining year, with Payment Price escalating 15% annually for future years; amounts due immediately upon termination .

Key implications:

• Alignment and conflicts: The fixed component is not performance‑based; the variable component is tied to share price appreciation. Howley is a 33% beneficiary via EverArc Founder Entity while serving as Co‑Chairman and on the Executive Committee overseeing capital allocation, M&A, strategy, and guidance . This structure creates potential perceived conflicts around capital allocation and communications policies. RED FLAG.

Other Directorships & Interlocks

Concentration of TransDigm alumni on PRM’s Board may be positive for operating discipline but increases network interlocks, with potential for groupthink perceptions. No specific related‑party transactions disclosed with TransDigm –.

Expertise & Qualifications

• Industrial/aerospace operating expertise; extensive M&A and integration experience; long‑tenured public company leadership .
• Technical and business education: B.S. Mechanical Engineering (Drexel), M.B.A. (Harvard) .
• Governance experience across multiple boards (public and non‑profit) .

Equity Ownership

Governance Assessment

Strengths

• Deep operating and capital allocation expertise; proven track record at TransDigm .
• Clear separation of CEO and Co‑Chair roles; robust committee structure; independent committees oversee audit, compensation, and nominating; executive sessions managed via committee processes –.
• Board engagement appears high: at least 75% attendance; Executive Committee met 24 times in 2024 .
• Shareholder support for pay: Say‑on‑Pay approval ~91% in 2024, indicating broad investor acceptance of program design at that time .

Risks and RED FLAGS

• Related‑party compensation: Howley (33% beneficiary) participates in a large, multi‑year founder advisory arrangement featuring a fixed share‑based grant through 2027 and potentially significant variable payments through 2031. The arrangement blends equity issuance and cash, with material fair‑value volatility and sizable termination obligations (including 15% annual escalator for future‑year Payment Price). This creates optics of conflicted incentives given his governance role over capital allocation and communications via the Executive Committee .
• Independence: Not independent; does not serve on key gatekeeper committees (Audit/Comp/Nominating), which mitigates but does not eliminate conflict concerns .
• Compensation mix for directors: Howley receives no standard director pay, but founder advisory payouts are substantial versus typical director compensation regimes, potentially overshadowing traditional alignment mechanisms .

Monitoring checklist for investors

• Track founder advisory fair‑value changes and cash/equity settlement mix disclosed in quarterly filings (can affect optics, dilution, and expense) .
• Watch any amendments to the Founder Advisory Agreement or changes to Executive Committee authority –.
• Review annual proxy for continued independence determinations and any related‑party disclosures; monitor say‑on‑pay outcomes for shifts in investor sentiment .
• Confirm continued compliance with anti‑hedging/pledging policies and any disclosures on share pledges (none indicated) .