Ara Mahdessian
About Ara Mahdessian
Co-founder, CEO, and Chairperson of ServiceTitan (TTAN) since June 2007; age 39; B.S. in Management Science & Engineering from Stanford University . Under his tenure, ServiceTitan completed its IPO in Dec-2024, operates with a dual-class share structure concentrating voting power with the co-founders . Recent fundamentals show strong top-line growth with ongoing losses: revenue rose from $467.7M in FY2023 to $771.9M in FY2025, while EBITDA remained negative over the period (see Performance & Track Record table below; values from S&P Global)*.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ServiceTitan, Inc. | Co-Founder, CEO, Chairperson | 2007–present | Led product and go-to-market buildout for trades software; oversaw IPO and multi-class governance structure . |
External Roles
No other public-company directorships or external executive roles are listed for Mahdessian in the proxy .
Fixed Compensation
| Component | FY2025 | Notes |
|---|---|---|
| Base Salary (paid) | $461,796 | Co-Founders’ annual salary increased to $460,000 in Oct-2024 . |
| Target Annual Bonus % of Salary | 80% | Applies to CEO and President; program based on financial metrics with threshold/target/stretch . |
| Actual Annual Bonus Paid | $439,929 | Payout reflected 120% achievement of corporate goals for FY2025 . |
| Perquisites | $726,419 | Predominantly company-provided personal security ($725,219) and $1,200 technology allowance . |
| Clawback Policy | Adopted Dec-2024 | Covers incentive comp received during the 3 completed fiscal years prior to any required restatement, consistent with SEC/Nasdaq rules . |
Performance Compensation
CEO Stock/Option Awards and Structures
| Instrument | Grant/Terms | Size/Value | Vesting/Performance |
|---|---|---|---|
| Co‑Founder PSUs (Class B) | Approved Oct 21, 2024 | $131,781,064 stock awards recognized for FY2025 (grant-date fair value per ASC 718) ; Company estimated total grant-date fair value for the combined Co‑Founder PSU awards at $263.6M (Monte Carlo) . | Four tranches vest on or after 180 days post-IPO upon stock price hurdles: $140 (144,788 sh), $240 (1,032,252 sh), $340 (1,032,252 sh), $440 (1,032,252 sh); forfeiture if hurdles not met by Oct 21, 2034; employment condition (CEO/co‑CEO/President) applies . |
| Co‑Founder PSUs – accounting tail | As of Jul 31, 2025 | — | Unrecognized comp expense $222.0M with ~4.3 years remaining derived service period; expense accelerates if price hurdles achieved earlier . |
| Options (Class B) | Legacy option awards | 340,676 options subject to service plus performance condition . | Performance condition met at IPO; service vests over 4 years from IPO date (25% at 1‑year, then monthly); expires 10 years from issuance; strike $12.72 . |
| Options (Class B) | Additional legacy holdings | 681,353 options listed as exercisable; strike $12.72; exp. 12/8/2030 . | Time-based; see outstanding awards table . |
| Repricing/Modification | — | — | A separate option (170,338 sh) tied to a $234.83 six‑month VWAP hurdle was canceled when Co‑Founder PSUs were granted . |
Annual Bonus Design
- Plan uses financial performance metrics with threshold/target/stretch; FY2025 corporate goals certified at 120% resulting in CEO bonus payout of $439,929 .
Equity Ownership & Alignment
| Item | Disclosure |
|---|---|
| Beneficial Ownership | 7,166,048 Class B shares (49.7% of Class B); plus 1,022,029 Class B options exercisable within 60 days; total voting power ~32.4% given 10:1 votes per Class B share . |
| Unvested/Unearned Equity | 3,241,544 unearned PSUs (Class B) tied to stock price hurdles (see above); additional 96,393 unearned units shown in table . |
| Hedging/Pledging | Company policy prohibits hedging and pledging; no pledging disclosed for Mahdessian; (contrast: co‑founder Kuzoyan disclosed 1.7M pledged shares) . |
| Overhang/Expense Tail | Unrecognized PSU expense $222.0M, ~4.3‑year remaining derived service period; expense can accelerate if price hurdles are met . |
Employment Terms
| Term | Base Protection | Change-in-Control (Double Trigger) |
|---|---|---|
| Cash Severance | 12 months’ base salary; prorated target bonus; up to 12 months COBRA (termination by company without Cause, death/disability, or resignation for Good Reason) . | Lump-sum 12 months’ base salary; 100% of target bonus; up to 12 months COBRA; full vesting acceleration of time- and performance-based awards at target or actual (as applicable) unless award agreements provide otherwise . |
| Co‑Founder PSUs CIC Treatment | — | Vest based on highest per‑share deal consideration using linear interpolation between hurdles; any unvested PSUs after determination are forfeited; six‑month “good‑leaver” tail for specified separations or agreed transitions . |
| Non‑Compete/Non‑Solicit | Not disclosed in proxy . |
Board Governance
- Roles: CEO and Chairperson of the Board (Class I director; nominee in 2025) .
- Leadership/Independence: Combined Chair/CEO with a Lead Independent Director (Tim Cabral) overseeing executive sessions, agendas, and liaison duties; board has 9 members with all but the two co‑founders deemed independent under Nasdaq rules .
- Attendance: Board met 6 times in FY2025; each director attended ≥75% of meetings and committee meetings during service, apart from William Hsu; committee memberships comprise independent directors .
- Dual‑role implications: Dual‑class capital structure concentrates voting power with the co‑founders, limiting broader shareholder influence on governance and director elections .
Related Party Transactions and Governance Red Flags
- Family Employment: Sister (Areni Mahdessian) employed as Director, Product Management; FY2025 cash compensation $310,469; granted 2,222 RSUs; company states compensation aligns with peers for role/experience .
- Hedging/Pledging: Policy prohibits hedging and pledging for all insiders (mitigates alignment risk); co‑founder Kuzoyan disclosed pledged shares; none disclosed for Mahdessian .
- Legal Proceedings: Company disclosed no material pending legal matters as of Jul 31, 2025 .
Performance & Track Record
| Metric ($USD) | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Revenues | $467,734,000 | $614,341,000 | $771,878,000 |
| EBITDA | $(171,203,000) | $(106,585,000) | $(161,252,000) |
| Net Income (IS) | $(269,523,000) | $(195,145,000) | $(239,094,000) |
| Values retrieved from S&P Global*. | |||
| Commentary: Revenue grew ~65% from FY2023 to FY2025, while EBITDA and net income remained negative; management emphasizes platform scale benefits and growing GTV/usage (e.g., platform revenue +27% y/y for six months ended Jul 31, 2025), but stock‑based compensation (including Co‑Founder PSUs) materially impacts reported profitability . |
Director Compensation (as Director)
- Employee directors (including Mahdessian) receive no additional cash/equity for board service under the Director Compensation Program .
Compensation Structure Analysis
- Pay-for-performance: CEO’s 2025 variable pay includes a material at-risk PSU grant tied to four stock price hurdles ($140/$240/$340/$440) and ongoing employment, aligning upside with multi‑year TSR outcomes; vesting begins 180+ days post‑IPO .
- Cash vs equity mix: FY2025 total compensation heavily skewed to equity ($131.8M stock awards vs. $461.8k salary and $439.9k bonus), emphasizing long-term equity alignment; clawback policy applies to incentive compensation .
- Modifications/Repricing: Prior price‑hurdle option canceled when PSUs were granted—reduces reliance on the canceled strike‑based award but preserves performance linkage via price hurdles .
- Retention: Option and PSU service conditions (and PSU good‑leaver tail) are designed to support retention across multi‑year horizons .
Say‑on‑Pay & Peer Group
- FY2025 proxy does not present historical Say‑on‑Pay results (first year post‑IPO); compensation committee retained Compensia to advise on program design and peer group methodology .
Investment Implications
- Alignment: Significant PSU awards with explicit, escalating stock‑price hurdles create strong alignment with long‑term TSR and may mitigate concerns over large aggregate grant value; anti‑hedging/pledging policy and absence of CEO pledging support alignment .
- Retention vs. Overhang: Large unrecognized co‑founder PSU expense ($222.0M) and multi‑year derived service period (~4.3 years) indicate a durable retention mechanism but also imply ongoing stock‑based comp headwinds and potential dilution if hurdles are met .
- Governance risk: Combined CEO/Chair role and dual‑class voting concentrate control with co‑founders, which can constrain minority shareholder influence; presence of a lead independent director partially mitigates this .
- Execution: Revenue growth remains robust, yet sustained GAAP losses and negative EBITDA require continued operating leverage; investors should monitor progression of gross margins, operating expense discipline, and the cadence of PSU tranche achievements relative to fundamentals .
Footnote: *Values retrieved from S&P Global.