Joel Reiss
TransDigm GroupAbout Joel Reiss
TransDigm’s Co-Chief Operating Officer (appointed May 2023), age 54, with a 20+ year operating track record inside TDG spanning P&L leadership and operations across multiple subsidiaries . Company performance during FY 2024: net sales $7.94B (+21% YoY), EBITDA As Defined $4.17B (+23% YoY), and ~73% TSR (including a $35/share special dividend) — a backdrop for 100% performance-weighted equity compensation and above-target annual cash incentive payouts in 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| TransDigm Group (Corporate) | Co-Chief Operating Officer | Appointed May 2023 | Enterprise-wide operating leadership; private equity-like, value-driver execution . |
| TransDigm Group (Corporate) | Executive Vice President | Oct 2015–May 2023 | Corporate leadership across TDG operating units . |
| Hartwell Corporation (TDG subsidiary) | President | Jul 2012–Oct 2015 | Full P&L for engineered aircraft latches/structures . |
| Skurka Aerospace (TDG subsidiary) | President | Jul 2010–Jul 2012 | P&L for motion control/actuation components . |
| Adams Rite Aerospace (TDG subsidiary) | Director of Operations | Jul 2000–Jul 2010 | Factory operations, cost and throughput improvement . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No external directorships or public company board roles disclosed in the NEO biographies . |
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | 568,333 | 747,750 (base set at $772,000 effective Jan 1, 2024) |
| Target Bonus (% of Base) | 80% (prorated post-promotion) | 100% |
| Actual Annual Incentive Awarded ($) | 612,452 (includes 15% positive discretion) | 879,308 (no discretion) |
Performance Compensation
Annual Cash Incentive – 2024 plan mechanics and results
| Metric | Weight | Threshold | Target | Maximum | Actual FY 2024 | Payout Factor |
|---|---|---|---|---|---|---|
| Pro Forma EBITDA As Defined ($) | 50% | $3,662m | $4,076m | $4,490m | $4,266m | 113.9% composite payout (equally weighted) |
| Pro Forma EBITDA As Defined Margin (%) | 50% | 49.0% | 51.0% | 53.0% | 51.9% | 113.9% composite payout (equally weighted) |
Notes: No upward payout discretion used in 2024; plan capped at 130% .
Equity Awards – Grants and vesting design
| Grant | Grant Date | Type | Shares | Exercise Price | Vesting & Performance Conditions |
|---|---|---|---|---|---|
| Promotion Equity Grant (2024) | Nov 2, 2023 | Performance Options | 31,800 | $869.73 | Vests equally FY2024–FY2028; each year’s tranche vests 5% at minimum AOP and 20% at maximum AOP. FY2024 AOP achieved $554.77 so 20% vested for 2024 tranche . |
AOP thresholds for this grant (per diluted share): 2024: 5% at $418.59; 20% at $447.53 (actual $554.77); 2025: 5% at $460.45; 20% at $525.85; 2026: 5% at $506.50; 20% at $617.87; 2027: 5% at $557.15; 20% at $726.00; 2028: 5% at $612.86; 20% at $853.05 .
Additional context on option program:
- Full vesting requires 17.5% compound AOP growth; minimum vesting at 10% AOP growth; no discretionary amendments to AOP targets; carry-forward/back feature limited to $100/year to smooth exogenous shocks .
- Double-trigger CIC protection applies to options granted in FY 2024 and onward (accelerates only if no replacement award or if terminated without cause/for good reason within 2 years post-CIC) .
Outstanding equity awards (selected lines, 9/30/2024)
| Status | Shares | Exercise Price | Expiration | Vesting Notes |
|---|---|---|---|---|
| Exercisable | 21,300 | $226.34 | 11/6/2025 | — |
| Exercisable | 65,000 | $284.97 | 11/8/2027 | — |
| Exercisable | 43,000 | $476.81 | 4/25/2029 | — |
| Exercisable | 32,100 | $559.78 | 11/15/2029 | — |
| Unvested (performance) | 28,600 | $643.00 | 11/12/2031 | 12.5% at AOP ≥ $170.88; 50% at AOP ≥ $232.42 in 2025; and 12.5%/50% 2026 thresholds as disclosed |
| Unvested (performance) | 6,500 | $582.80 | 11/9/2032 | 12.5%/50% vesting tied to 2026–2027 AOP thresholds |
| Exercisable + Unvested (2024 grant) | 6,360 ex / 25,440 unvested | $869.73 | 11/2/2033 | Annual AOP thresholds 2025–2028 as above |
Option exercises (FY 2024)
| Name | Shares Acquired on Exercise | Value Realized ($) |
|---|---|---|
| Joel B. Reiss | 36,000 | 33,515,293 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of Jan 10, 2025) | 3,600 shares; 158,760 options currently exercisable/within 60 days; total 162,360; <1% of shares outstanding . |
| Pledging/Hedging | Company prohibits hedging, pledging, short sales, and derivatives by officers and directors; none of the disclosed executive holdings are pledged . |
| Ownership Guidelines | 3x salary for NEOs, with at least 50% in stock; NEOs cannot exercise options unless in compliance; all NEOs currently in compliance . |
| Dividend Equivalents (DEPs) | Cash DEPs paid on vested-but-unexercised options (non-director NEOs), preserving value on special dividends; Board/CEO receive strike reductions instead of DEPs . |
Employment Terms
| Term | Detail |
|---|---|
| Agreement Term | Amended & restated employment agreement July 2023; term through Sept 30, 2028; no auto-renewal . |
| Severance (without cause / good reason / death or disability) | 1.25x base salary + 1.25x greater of prior-year bonus or target bonus, plus 18x monthly COBRA differential; paid over 12 months . |
| Change-in-Control | For pre-FY2024 grants, single-trigger acceleration; for FY2024+ grants, double-trigger (no replacement award or qualifying termination within 2 years post-CIC) . |
| CIC Intrinsic Values (9/30/2024) | $27.9M accelerated on CIC; $42.1M on CIC + qualifying termination (assumes $1,427.13 share price) . |
| Post-termination vesting | Continued vesting schedule by grant year if performance met, per disclosed table; general schedule disclosed (20/40/60/80/100% by years post-grant) . |
| Non-Compete / Non-Solicit | For NEOs other than CEO: 12 months for termination without cause/for good reason; 24 months for voluntary resignation without good reason or termination for cause; 2-year non-solicit . |
| Clawback | NYSE/SEC-compliant clawback effective Oct 2, 2023 for incentive-based comp tied to financial measures . |
Compensation Structure Analysis
- Cash vs equity mix: Equity dominates (performance-based options), with FY 2024 cash pay (salary + bonus) representing a minority of total comp; Reiss’s FY 2024 salary $747,750 and annual incentive $879,308; option grant fair value $12.04M .
- From discretion to formula: 2023 included +15% discretionary boost to Reiss’s bonus; in 2024, no positive discretion was applied to any NEO annual incentive .
- Shift to annual extension awards: Starting FY 2025, all NEOs shift to annual extension option awards (vesting in years 4–5) — enhances year-to-year consistency and retention runway .
- Retirement vesting modernization: Adopted modified “Rule of 70” (age + service) for continued vesting beginning FY 2025; NEO must have ≥10 years of service and ≥6 years in most senior role; improves transparency and reduces ad hoc discretion .
Related Party Transactions and Governance
- No related party transactions involving Reiss disclosed; Board oversees any such matters, with none deemed material for directors/NEOs in FY 2024 through the proxy date .
- Prohibitions on hedging/pledging/short sales for all directors and officers .
Performance & Track Record
| Company KPIs | FY 2023 | FY 2024 |
|---|---|---|
| Net Sales ($m) | 6,585 | 7,940 |
| EBITDA As Defined ($m) | 3,395 | 4,173 |
| EBITDA As Defined Margin (%) | 51.6% | 52.6% |
| Net Income from Cont. Ops ($m) | 1,299 | 1,715 |
| TSR / Share Price Change | +61% in FY 2023 | ~+73% in FY 2024 (incl. $35 special dividend) |
Compensation Peer Group (used for FY 2024 setting)
Ametek, Aptiv, Dover, Eaton, Emerson Electric, Fortive, General Dynamics, HEICO, Howmet Aerospace, Illinois Tool Works, Ingersoll Rand, L3Harris, Motorola Solutions, Northrop Grumman, Parker-Hannifin, RBC Bearings, Rockwell Automation, Roper Technologies, Teledyne Technologies, Textron .
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay support: 68.8% (highest since 2017); company expanded outreach, enhanced disclosures, eliminated use of positive discretion for annual incentives, and moved to double-trigger CIC for new grants .
- Ownership guidelines increased (CEO 6x, other NEOs 3x), with exercise restrictions until compliant .
Risk Indicators & Red Flags
- Insider liquidity: Reiss exercised 36,000 options in FY 2024, realizing $33.5M; while not inherently negative, continued sizable exercises can create intermittent selling pressure signals near windows .
- DEPs optics: Cash DEPs on vested options preserve management alignment on special dividends but can be controversial among some investors; Board/CEO receive strike reductions in lieu of cash DEPs .
- CIC optics improved: Adoption of double-trigger CIC for FY 2024+ awards reduces legacy single-trigger criticism .
- Pledging/hedging risk limited: Prohibited by policy; none pledged .
Investment Implications
- Strong pay-for-performance alignment: Reiss’s incentives are tightly tied to ADJ EBITDA/AOP and multi-year option vesting at rigorous AOP growth (10%–17.5% CAGR), aligning with TDG’s private equity-like value creation framework .
- Retention outlook: Meaningful unvested option runway through 2028, updated retirement vesting rules (Rule of 70 with 6 years in top role), and ownership-lock provisions mitigate near-term flight risk despite significant realized gains in 2024 .
- Trading signals: Track option exercise cadence and special dividend timing; large realized gains and DEPs can influence near-term supply but do not inherently weaken alignment given ongoing vesting hurdles and ownership requirements .
- Governance trajectory: Enhanced shareholder responsiveness (no 2024 discretion, double-trigger CIC, raised ownership guidelines) lowers structural risk around compensation controversy vs prior years .