Carey Smith
PARSONSAbout Carey Smith
Carey A. Smith, 61, is Chair, President and CEO of Parsons Corporation (PSN), serving as CEO since July 1, 2021 and Chair since January 18, 2022, with 39 years of industry experience across defense, intelligence, and infrastructure; she holds an M.S. in Electrical Engineering (Syracuse University) and a B.S. in Electrical Engineering (Ohio Northern University) . Under her leadership, FY2024 delivered record results: revenue $6.8B (+24% YoY), net income $235M (+46% YoY), adjusted EBITDA $605M (+30% YoY; 9.0% margin), operating cash flow $524M, and backlog of $8.9B with trailing 12-month book-to-bill of 1.0x . 2024 achievements included 15 $100M+ wins and integration of BCC Engineering ($230M) and BlackSignal Technologies ($200M) to expand transportation engineering and electronic warfare/cyber capabilities .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Parsons | Chair of the Board | 2022–present | Combined Chair/CEO for unified strategy; Lead Independent Director structure in place for balance . |
| Parsons | President & CEO | 2021–present | Led record revenue, EBITDA, net income, cash flow; advanced software/digital differentiation and M&A . |
| Parsons | President & COO | 2019–2021 | Enterprise operations leadership across segments . |
| Parsons | COO | 2018–2019 | Operational scale-up ahead of sustained growth . |
| Parsons | President, Federal Solutions | 2016–2018 | Expanded federal portfolio in cyber, space, EW, border security . |
| Honeywell | President, Defense & Space | 2011–2016 | Led multi-billion defense/space business; prior progressive roles . |
External Roles
| Organization | Role | Years | Committee Roles |
|---|---|---|---|
| Edison International | Director | Current | Compensation and Executive Personnel; Safety and Operations . |
Fixed Compensation
| Item | 2024 | Notes |
|---|---|---|
| Base Salary | $1,050,000 | 5.0% YoY increase vs 2023 . |
| Target Bonus (% of Salary) | 125% | CEO AIP target . |
| Target Bonus ($) | $1,312,500 | AIP line item . |
| Actual AIP Payout | $2,328,100 | Overall 2024 payout 177.38% of target . |
| 2024 “All Other Compensation” | $99,461 | ERP, ESOP, 401(k), insurance, executive physical, charity match . |
Performance Compensation
Annual Incentive Plan (AIP) – Structure and 2024 Outcomes
| Metric | Weight | Target | Actual | Achievement |
|---|---|---|---|---|
| Revenue | 25% | $5,900.0M | $6,750.6M | 172.1% |
| Adjusted EBITDA | 25% | $525.0M | $605.0M | 176.1% |
| Awards | 20% | $6,000.0M | $7,039.3M | 186.6% |
| Cash Flow | 20% | $380.0M | $523.6M | 200.0% |
| Strategic Goal | 10% | n/a | n/a | 130.0% (weighted 13.0%) |
| Total Payout | — | — | — | 177.38% |
- 2024 AIP design: 90% financial (as above) + 10% strategic; payout 0–200% with linear interpolation and 80% thresholds .
- 2025 change: remove strategic component; AIP will be 100% evenly weighted financial goals for CEO and NEOs .
Long-Term Incentives (LTI)
| Grant Year | Type | Target Value ($) | Units (#) | Vesting | Performance Metrics |
|---|---|---|---|---|---|
| 2024 | PSUs | 3,600,000 | 52,310 | 3-year cliff (2024–2026) | 50% cumulative adj. EBITDA, 50% cumulative revenue; rTSR modifier 75–125% vs custom peer set . |
| 2024 | RSUs | 2,400,000 | 34,873 | 3 equal installments on Mar 9, 2025/2026/2027 | Time-based retention . |
| 2022–2024 Cycle | PSUs | — | — | Vested Mar 2025 | Financial achievement 125% adjusted by rTSR 125% = 156.25% payout . |
| One-Time CEO Award (Dec 18, 2023) | 60% PSUs / 40% RSUs | $10,000,000 target | — | PSUs: 4-yr cliff (to Dec 17, 2027); RSUs: 4-yr ratable | rTSR schedule: 0% ≤35th pct; 100% at 65th pct; 150% ≥75th pct; retention/TSR alignment . |
Peer benchmark used for rTSR includes AECOM, Booz Allen Hamilton, CACI, Jacobs, Leidos, SAIC, Stantec, Tetra Tech, and WSP Global .
Equity Ownership & Alignment
| Measure | Detail |
|---|---|
| Beneficial Ownership | 445,921 shares; <1% of outstanding; PSN outstanding shares 106,777,126 (as of Feb 14, 2025) . |
| ESOP Holdings | Includes 5,023 shares held via ESOP (shared voting/investment power) . |
| Awards Near-Term | PSUs scheduled to vest within 60 days included for CEO: 121,828 units (gross before tax withholding) . |
| Unvested RSUs (12/31/24) | 34,873 (2024), 50,159 and 31,626 (2023), 17,328 (2022); total RSU market values disclosed at $92.25 share price . |
| Unvested PSUs (12/31/24) | 52,310 (2024–26 target), 71,159 (2023–25 target), 100,317 (2023–27 rTSR target), 77,970 (2022–24 actual 157.81%) . |
| Ownership Guidelines | CEO 5x base salary; compliance evaluated on trailing 60-day average; as of 12/31/24 each continuing NEO in compliance or on-track by time-in-role . |
| Hedging/Pledging | Prohibited for employees and directors; sales require Rule 10b5-1 plans for directors and CEO/CFO direct reports . |
Note: RSUs vest Mar 9, 2025/2026/2027 and special RSUs from Dec 18, 2023 vest Dec 17, 2024/2025/2026/2027; PSUs from 2022–2024 paid in shares Mar 2025, and 2024–2026 PSUs cliff vest based on performance by Mar 2027 .
Employment Terms
| Topic | Key Terms |
|---|---|
| Employment Contracts | No employment contracts with NEOs; at-will employment . |
| Clawbacks | Dodd-Frank compliant clawback; additional policy allows recovery of cash/equity (including time-based) upon detrimental conduct or material restatement; 3-year lookback . |
| Severance Plan (non-CIC) | Corporate VP Severance Plan: 4.5x monthly base salary lump sum (~4.5 months), plus 4 months COBRA premiums; subject to separation/release with non-compete, non-solicit, confidentiality . |
| Change in Control (CIC) | Double-trigger: upon termination without cause or for good reason within 18 months post-CIC: pro rata bonus for year; 2x base salary; 2x greater of target bonus or avg prior two-year bonus; 2 years of estimated benefits (medical, life, supplemental disability) paid as cash; 280G cutback if beneficial . |
| Equity on CIC | RSUs accelerate on qualifying termination; PSUs vest at target on qualifying termination; detailed in plan/agreements . |
Selected CEO estimated payouts (assuming termination on Dec 31, 2024; $92.25 share price):
- Involuntary termination (no CIC): AIP $2,328,100; cash severance $393,750; benefits $10,737; no LTI acceleration .
- Involuntary termination in connection with CIC: AIP $2,328,100; cash severance $4,725,000; benefits $64,424; LTI acceleration $40,197,200 .
Performance & Track Record
- FY2024 records: revenue $6.8B (+24%), net income $235M (+46%), adjusted EBITDA $605M (+30%, 9.0% margin), operating cash flow $524M, awards $7.0B+, backlog $8.9B; book-to-bill 1.0x .
- Strategic M&A and wins: acquired BlackSignal ($200M) and BCC Engineering ($230M); 15 $100M+ contract wins; expanded INDOPACOM presence; major North America and Middle East infrastructure wins .
- Recognition: GovCon Company of the Year (2024); CEO GovCon Executive of the Year (2023) .
Board Governance
- Board structure: 11 directors; 9 independent; all three standing committees (Audit & Risk; Compensation & Management Development; Corporate Governance & Responsibility) are 100% independent .
- Leadership: Smith serves as Chair/CEO; Steven F. Leer is Lead Independent Director overseeing executive sessions and board information flow .
- Classification: Smith is a Class I director; term expires at the 2026 annual meeting .
- Attendance: In 2024, all incumbent directors attended ≥90% of board/committee meetings; 8 board meetings held .
- Anti-hedging/pledging and director 10b5-1 plan requirement reinforce governance discipline .
Compensation Governance, Peer Group, and Say-on-Pay
- Compensation principles: majority at-risk; balanced short/long-term; capped maxima; no repricing of underwater options; no CIC tax gross-ups; double-trigger equity vesting .
- Independent consultant: Semler Brossy; peer and survey data used as reference (no rigid percentile targeting) .
- Peer group (2024): AECOM, Booz Allen Hamilton, CACI, Jacobs, KBR, Kratos, Leidos, Mercury Systems, SAIC, Stantec, Teledyne, Tetra Tech, WSP Global; 2025 change: remove Mercury Systems; add V2X .
- Say-on-Pay: 2024 approval >98% .
Risk Indicators & Red Flags
- Section 16(a) reporting delinquencies noted for 2023 due to RSU tax withholdings (administrative timing), which were previously fully reported at grant .
- Anti-hedging and anti-pledging policies in force; Rule 10b5-1 plan requirement before sales by directors/CEO-CFO reports .
- Related party/ESOP: ESOP owns 49.7% of shares; annual contributions determined by board (≥8% of ESOP participants’ cash compensation in 2024); independent ESOP trustee oversight .
Director Service/Compensation (for dual-role context)
- As an employee director (Chair/CEO), Smith does not receive separate non-employee director compensation; non-employee directors have stock ownership guidelines of 5x annual cash retainer and are barred from hedging/pledging .
- Dual-role implications mitigated by Lead Independent Director structure and fully independent committees .
Investment Implications
- Pay-for-performance alignment is strong: 60% of LTI in PSUs tied to multi-year EBITDA/revenue plus rTSR; 2022–2024 PSUs paid at 156.25%, consistent with record financials .
- Retention is reinforced via multi-year vesting (3-year RSUs; 3-year PSUs; 4-year special grant) and ownership guidelines (CEO 5x salary), reducing near-term turnover risk .
- Insider selling pressure may be episodic around vesting/payout dates (Mar 9 annually; Mar 2025 PSU payout; Dec 17 annually for special RSUs); sales are governed by mandatory 10b5-1 plans and anti-hedge/pledge restrictions .
- Change-in-control economics are moderate-to-high (2x salary + 2x bonus, benefits, and equity acceleration at target on double-trigger), implying meaningful protection but standard governance (no single-trigger; no gross-ups) .
- Governance quality is solid (9/11 independent directors, independent committees, lead independent director, high attendance, 98% say-on-pay), which should support investor confidence in oversight despite combined Chair/CEO structure .
Appendices
Selected 2024 CEO Compensation Line Items
| Component | Amount |
|---|---|
| Salary (paid) | $1,028,846 |
| Stock Awards (grant-date fair value) | $7,532,264 |
| Non-Equity Incentive (AIP) | $2,328,100 |
| All Other Compensation | $99,461 |
| Total | $11,013,860 |
2024 AIP Metric Definitions (per Proxy)
- Revenue (GAAP less consolidated NCI), Adjusted EBITDA (NOI + D&A), Awards (backlog additions), Cash Flow (GAAP CFO adjusted for certain non-recurring items) .
Compensation Peer Group (2024; changes for 2025 noted)
AECOM; Booz Allen Hamilton; CACI; Jacobs; KBR; Kratos; Leidos; Mercury Systems (removed for 2025); SAIC; Stantec; Teledyne; Tetra Tech; WSP Global; 2025 addition: V2X .