Malcolm Cooke
About Malcolm Cooke
Malcolm G. Cooke, age 50, is Vice President and Chief Information Technology Officer at Telos (TLS). He joined Telos in 2008 and has served as CIO since July 2013; he holds a B.S. in Information Technology (AIU), an A.S. in Computer Science (ECPI), and multiple IT/security certifications (A+, Network+, Security+, MSS, MCP/MCSA/MCTS, VMTSP) . Company performance context for his incentives: 2024 revenue was $108.272M and TSR on a fixed $100 basis was $20.12 versus peer group $101.94; 2024 free cash flow was approximately -$39.7M (baseline for 2025 FCF PSUs) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Equitrac | IT support/management | Not disclosed | Corporate IT operations and support experience |
| RE/MAX | IT support/management | Not disclosed | Corporate IT operations and support experience |
| U.S. Navy | Service member | Not disclosed | Discipline and technical training; foundational operational experience |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ARC of Loudoun | Board of Directors | Since 2021 | Advocacy and support for people with disabilities; community engagement |
Fixed Compensation
| Component | 2024 Value | Notes |
|---|---|---|
| Base Salary (set) | $260,280 | Annual base rate established by Compensation Committee; remained flat vs prior years |
| Base Salary (paid) | $262,380 | Reported in Summary Compensation Table |
| Target Bonus (%) | ~23% of base | AIP target at roughly 23% of base (Company notes this is below 25th percentile of peers) |
| Actual AIP Paid (cash) | $29,568 | Paid for DMDC subcontract finalization and TSA PreCheck expansion achievements; revenue component paid $0 |
| Perquisites | $372 life/LTD premiums; $11,366 401(k) match; no listed perqs | All Other Compensation breakout |
Performance Compensation
2024 Annual Incentive Plan (AIP)
| Metric | Target | Actual/Status | Payout to Cooke | Payment/Vesting |
|---|---|---|---|---|
| 2024 Company Revenue | ≥$135M target; ≥$150M stretch | $108.272M, below threshold → no payout | $0 | N/A |
| DMDC Program Subcontract | Finalize subcontract post-GAO protest withdrawal | Achieved; GAO protest withdrawn 8/28/2024; subcontract finalized; criterion met 9/25/2024 | $10,000 | Paid upon achievement |
| TSA PreCheck Sites | Reach 125 operational enrollment sites in 2024 | Achieved 9/20/2024 | $20,000 | Paid upon achievement |
Total AIP award received (cash): $29,568 .
2024 Long-Term Incentive (LTI) Grants
— Emphasis on pay-for-performance with stringent PSUs; time-based RSUs for retention .
• LTI PSU Grant #1 – TSA PreCheck Expansion (vest prior to 1/1/2027 upon milestones)
| Performance Level | PSUs Vesting (Cooke) | Status |
|---|---|---|
| 250 sites | 2,232 | Not vested as of 12/31/2024 (contingent) |
| 350 sites | 3,348 | Not vested as of 12/31/2024 (contingent) |
| 500 sites | 4,464 | Not vested as of 12/31/2024 (contingent) |
| Total maximum | 10,044 | — |
Grant date FMV for Cooke’s PSU #1: $35,958 .
• LTI PSU Grant #2 – 2025 Free Cash Flow (amended to FCF-only; straight-line interpolation where applicable)
| FCF Threshold (2025) | PSUs Vesting (Cooke) | Notes |
|---|---|---|
| >$0 | 4,702 | Baseline set against 2024 FCF ≈ -$39.7M |
| ≥$2,000,000 | 9,403 | Interpolation applies between levels |
| ≥$6,000,000 | 14,105 | Interpolation applies between levels |
| ≥$12,000,000 | 18,806 | Maximum level |
Grant date FMV for PSU #2/stock-price-linked line item shows target/max of 14,177/70,919 units for Cooke with $319,845 FMV (Company’s Grants table) . PSU #2 was formally amended to remove revenue and retain FCF-only triggers .
• LTI PSU Grant #3 – Stock Price (TLS closing price maintained ≥50 consecutive days prior to 1/1/2027)
| Price Threshold | PSUs Vesting (Cooke) | Status |
|---|---|---|
| $6 | 9,475 | Not vested as of 12/31/2024 (contingent) |
| $8 | 9,475 | Not vested as of 12/31/2024 (contingent) |
| $10 | 14,213 | Not vested as of 12/31/2024 (contingent) |
| $12 | 18,950 | Not vested as of 12/31/2024 (contingent) |
| Total maximum | 52,113 | — |
• Time-Based RSU Grant (retention)
| Grant | RSUs | Vesting | Grant Date FMV |
|---|---|---|---|
| Time-based RSUs | 16,924 | 50% on 5/16/2025; 50% on 5/16/2026 | $60,588 |
Stock Vested in 2024
| Shares Vested (2024) | Value Realized |
|---|---|
| 49,342 | $181,085 |
Equity Ownership & Alignment
| Category | Shares/Units | Notes |
|---|---|---|
| Beneficial ownership (as of 3/17/2025) | 88,560 | 0.1% of outstanding shares |
| Vested shares | 59,313 | Direct vested holdings |
| Jointly held | 10,750 | With spouse |
| Shared Savings Plan | 10,035 | 401(k) company plan holdings |
| RSUs vesting within 60 days | 8,462 | Near-term vest from time-based grant |
| Unvested RSUs at 12/31/2024 | 16,924 | Scheduled time-based vesting |
| Unearned PSUs (performance) at 12/31/2024 | 16,409 | Contingent on performance; not determinable at year-end |
- Hedging policy prohibits hedging/monetization transactions for insiders; no pledging disclosures identified for Cooke .
- Stock ownership guideline compliance not disclosed; no executive retirement plans beyond broad-based benefits .
Employment Terms
- Employment agreement executed February 20, 2025 .
- Non-compete/confidentiality/non-solicit: 12 months post-termination (Cooke) .
- Severance (without cause/death/disability): 12 months salary continuation; immediate vesting of unvested stock options/RS; cash equivalents for medical/welfare benefits and employer 401(k) match for 12 months .
- Change-in-control (CIC): Lump-sum = 12 months salary + one times average bonus (current year and prior two years); immediate vesting of equity; 12 months cash equivalents for benefits and employer 401(k) match .
- Clawback: Adopted Nov 7, 2022; recoupment of incentive comp upon restatements within prior three fiscal years regardless of fault .
- Hedging prohibition in Insider Trading Policy .
Compensation Structure Analysis
- Strong pay-for-performance design: AIP tied to revenue, DMDC subcontract finalization, and TSA PreCheck site expansion; LTI PSUs tied to 2025 FCF, TSA PreCheck growth to 500 sites, and sustained stock price hurdles ($6/$8/$10/$12 for 50 consecutive days) .
- Cash/equity mix: Time-based RSUs for retention (two-year vest), majority of performance opportunity via PSUs; AIP paid in cash to limit dilution in 2024 .
- AIP target sizing: Cooke’s target AIP was ~23% of base, below peer 25th percentile; actual 2024 AIP paid $29,568 with $0 on revenue component .
- No options granted to NEOs in 2024; broader company option balance exists, but Cooke’s outstanding equity is primarily RSUs/PSUs .
Governance, Peer Benchmarking, and Say‑on‑Pay
- Compensation Committee independence and use of external consultants (Lockton replaced by Zayla in Sept 2024); peer group refreshed with size/industry comparables (e.g., Rapid7, Tenable, Qualys, Varonis, SecureWorks, PagerDuty, A10 Networks, PROS, Model N, Brightcove, Agilysys, Veritone, Mitek) .
- 2024 say‑on‑pay approval: 95.4% support; design changes emphasized stringent performance-based equity and cash generation alignment .
- Pay vs Performance: 2024 TLS TSR $20.12 vs peer $101.94; total revenue $108.272M; net income $(52.52)M, underscoring aggressive PSU hurdles .
Investment Implications
- Alignment and upside sensitivity: Cooke’s PSUs only vest upon material operational and financial outcomes (500 PreCheck sites, positive and higher 2025 FCF, and multi-month stock price thresholds). These conditions limit near‑term insider selling pressure and tie realized pay to shareholder value creation .
- Retention risk appears contained: Two-year RSU vesting, 12‑month non‑compete/non‑solicit, and CIC/change‑in‑responsibility economics provide continuity incentives; near‑term scheduled RSU vests are modest in size relative to float .
- Performance levers to monitor for trading signals: (i) TSA PreCheck site expansion cadence; (ii) 2025 FCF progression versus the -$39.7M 2024 baseline; (iii) sustained TLS price levels meeting 50‑day thresholds—each directly impacts PSU vesting and potential insider supply timing .
- Governance safeguards: Clawback policy, hedging prohibitions, and no golden parachute gross‑ups reduce shareholder‑unfriendly risk; CIC payouts are structured with moderate multiples for non‑CEO NEOs (Cooke: 12 months salary + one‑times average bonus) .