Preston Hopson
TETRA TECHAbout Preston Hopson
Preston Hopson is Senior Vice President, General Counsel, and Secretary of Tetra Tech, with 7 years in the role and 7 years at the company as of FYE 2024. His remit spans corporate governance, litigation oversight, M&A legal integration (including RPS Group), HR leadership, ethics/compliance, and DEIA sponsorship; he supported the 5-for-1 stock split and inaugural investor day, and drove HR process upgrades that contributed to industry-leading low voluntary turnover . Company performance in FY 2024 included revenue of $5,199 million (+15% YoY), operating income of $501 million (+40% YoY), EPS of $1.23 (+21% YoY), and authorized and funded backlog of $5,376 million (+12% YoY), forming the backdrop for NEO pay-for-performance alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Tetra Tech | SVP, General Counsel & Secretary | 7 years at FYE 2024 | Advised Board on governance and social responsibility; oversaw significant litigation resolution; supported stock split process and investor day; closed acquisitions and led legal/compliance/HR integration for RPS; led HR enhancements and compensation planning; strengthened ethics/compliance; executive sponsor for DEIA; initiatives contributing to low voluntary turnover |
Fixed Compensation
| Component | FY 2024 Value |
|---|---|
| Base Salary ($) | $550,000 |
| Target Bonus (% of base) | 85% |
| Corporate Performance Factor (CPF) | 1.4903 |
| Individual Performance Modifier | 1.200 |
| Actual AIP Award ($) | $836,058 |
Performance Compensation
Annual Incentive Plan (AIP) – Metrics, Targets, and Results (Corporate)
| Metric | Weight | FY 2024 Target ($000s) | FY 2024 Actual ($000s) | FY 2023 Actual ($000s) | Final CPF (0–2.0) |
|---|---|---|---|---|---|
| Revenue | 20% | 4,975,000 | 5,198,724 | 4,522,550 | 1.430 |
| Operating Income | 40% | 470,000 | 510,498 | 419,921 | 1.479 |
| Cash Flow | 20% | 300,000 | 358,724 | 405,321 | 1.605 |
| Backlog | 20% | 5,030,000 | 5,376,056 | 4,790,442 | 1.459 |
| Corporate CPF (weighted, with growth factor) | — | — | — | — | 1.4903 |
AIP payout curve: threshold 50%, target 100%, maximum 200% (straight-line interpolation), with a growth factor applied to validate target rigor; the weighting of revenue, operating income, cash flow, and backlog is 20%, 40%, 20%, and 20%, respectively .
Long-Term Incentives (LTI) – FY 2024 Grants (11/21/2023)
| Grant Date | Award Type | Shares/Units | Grant Date Fair Value ($) | Vesting |
|---|---|---|---|---|
| 11/21/2023 | PSUs (target) | 16,395 | 667,368 | 3-year cliff; vesting 0–200% based 50% on average annual EPS growth (≤2%→0%; ≥16%→200%) and 50% on relative TSR percentile (below 25th→0%; ≥75th→200%) |
| 11/21/2023 | RSUs | 10,930 | 359,204 | Time-based; 25% per year, starting 11/30/2024, then annually subject to continued employment |
Equity Ownership & Alignment
Beneficial Ownership and Outstanding Equity (as of FYE 2024 / reference dates)
| Item | Amount |
|---|---|
| Shares Beneficially Owned (#) | 63,931; <1% of 268,028,347 shares outstanding |
| RSUs Not Vested (# / $) | 25,715 / $1,193,176 (valued at $46.40 close on 9/27/2024) |
| PSUs Unearned (# / $) | 43,945 / $2,039,048 (valued at $46.40 close on 9/27/2024) |
| Shares Vested in FY 2024 (# / $) | 42,200 / $1,388,510 |
| Stock Options Outstanding | None |
Vesting schedules by grant:
- RSUs: 11/19/2020 (3,070 units), 11/23/2021 (4,110), 11/16/2022 (7,605), 11/21/2023 (10,930) – each vests 25% annually beginning one year post-grant .
- PSUs: 11/23/2021 (12,340 target units), 11/16/2022 (15,210), 11/21/2023 (16,395) – 3-year cliff vesting tied to EPS growth and relative TSR .
Alignment policies:
- Stock ownership guidelines: SVPs must hold shares equal to ≥2× base salary; executives must retain 75% of “gain shares” until in compliance; 5 years to attain; as of FYE 2024, all executives met guidelines (including phase-in where applicable) .
- Anti-hedging and anti-pledging: hedging, short sales, derivatives, and pledging/margin accounts are prohibited for employees and directors .
- Clawback: Dodd-Frank-compliant recoupment for compensation based on financial reporting measures upon an accounting restatement .
Employment Terms
CIC Severance Plan – Structure
- No individual employment agreements for NEOs; eligibility under the CIC Severance Plan with double-trigger vesting and cash severance upon qualifying termination (without cause or for good reason within 2 years post-CIC; without cause within 90 days pre-CIC) .
- Cash severance equals current base salary + target bonus multiplied by 1.0× for Mr. Hopson; plus pro rata target bonus for year of termination, any earned but unpaid prior-year bonus, and medical benefits payment equal to 102% of COBRA-equivalent for 12 months .
- Equity: full vesting of time-based awards (options, restricted stock, RSUs) and performance awards vest based on actual performance; no automatic vesting on change in control absent termination .
- No excise tax gross-up; payments reduced to avoid 4999 excise taxes unless better after-tax outcome with full payment .
- Restrictive covenants: confidentiality and non-solicitation of employees/clients/suppliers/licensees/business relations for 12 months (Hopson) contingent on release execution .
Potential Payments upon CIC Qualifying Termination (Mr. Hopson)
| Payment Type | Termination without Cause or with Good Reason in Connection with a CIC ($) |
|---|---|
| Severance Benefits (cash, lump sum) | 962,500 |
| Health Benefits | 6,720 |
| Accelerated Vesting of Unvested PSUs | 2,039,048 |
| Accelerated Vesting of Unvested RSUs | 1,193,176 |
| Total | 4,201,444 |
Notes: No accelerated vesting amount shown for stock options (none outstanding). Prorated bonus is described in plan terms but not presented as a separate number in this table; only unpaid base salary and plan-based items as applicable are paid in other termination contexts .
Performance Compensation – Detailed AIP Table for Hopson
| Metric | Weighting | Target | Actual | Payout/CPF Component | Individual Modifier | Final AIP Award ($) |
|---|---|---|---|---|---|---|
| Revenue | 20% | Corporate: $4,975,000 | Corporate: $5,198,724 | CPF component 1.430 | 1.200 | 836,058 |
| Operating Income | 40% | Corporate: $470,000 | Corporate: $510,498 | CPF component 1.479 | 1.200 | 836,058 |
| Cash Flow | 20% | Corporate: $300,000 | Corporate: $358,724 | CPF component 1.605 | 1.200 | 836,058 |
| Backlog | 20% | Corporate: $5,030,000 | Corporate: $5,376,056 | CPF component 1.459 | 1.200 | 836,058 |
| Overall | — | — | — | Corporate CPF 1.4903 | 1.200 | 836,058 |
Notes: Weightings and payout curve per AIP policy; growth-factor adjustment applied to compute final CPF from preliminary metric averages .
Investment Implications
- Pay-for-performance alignment appears robust: Hopson’s AIP payout and the corporate CPF reflect outperformance on revenue, operating income, cash flow, and backlog; LTI is majority performance-based via PSUs tied to EPS growth and relative TSR with rigorous 0–200% vesting ranges .
- Retention risk mitigants: double-trigger CIC protection (1.0× cash multiple for Hopson), accelerated vesting only upon qualifying termination (not purely on CIC), mandatory non-solicit covenants, and strict anti-hedging/anti-pledging; all executives met ownership guidelines, indicating disciplined skin-in-the-game and alignment .
- Near-term selling pressure: RSUs vest 25% annually across multiple grant vintages; FY 2024 saw 42,200 shares vest; continued annual vesting may create periodic liquidity events, though the 75% gain-share retention requirement until guideline compliance dampens disposal pressure .
- Execution signals: documented contributions to governance, HR modernization, M&A integration, and capital markets processes (stock split, investor day) support operational risk management and cultural durability, reinforcing organizational execution under improving financial trends .