John Cuomo
About John Cuomo
John A. Cuomo, age 51, is VSE’s Chief Executive Officer and President and a Director (since 2019), serving as CEO since April 2019; he is not an independent director and the board’s chair is independent, with the CEO and Chair roles separated . He holds a B.S. in International Business (FAU), a J.D. (University of Miami), an MBA (University of Florida), and completed Harvard Business School’s AMP; his industry background spans >25 years in aerospace distribution and services . Under his leadership, 2024 adjusted EBITDA reached $136.29 million, net income was $15.324 million, and VSE’s value of a $100 investment (TSR proxy) rose to 260.93 vs 136.24 for the index peer group; Aviation segment revenue hit a record $786.3 million .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Boeing Distribution Services Inc. | Vice President & General Manager | Oct 2018–Mar 2019 | Led aircraft parts and consumables distribution at Boeing subsidiary; deepened aftermarket distribution expertise |
| KLX Aerospace Solutions | Group President & General Manager | Dec 2014–Oct 2018 | Ran commercial aerospace/defense distribution; aligned with growth in aviation aftermarket |
| B/E Aerospace | VP & GM; SVP Global Sales, Marketing & BD | 2000–2014 | P&L and global commercial leadership across multiple roles supporting aftermarket growth |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| FDH Aero (Audax Group portfolio company) | Board Director | Current | Global aerospace/defense supply chain solutions; no other public company boards |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 800,000 | 848,000 | 900,000 |
| Stock Awards ($) | 1,759,972 | 2,120,021 | 2,699,987 |
| Non-Equity Incentive (AIP) ($) | 935,965 | 1,458,560 | 1,197,000 |
| All Other Compensation ($) | 127,854 | 136,880 | 148,413 |
| Total Compensation ($) | 3,623,791 | 4,563,461 | 4,945,400 |
Additional 2024 components:
- 401(k) match: $13,413
- Deferred Supplemental Compensation (DSC) allocation: $135,000
2025 employment agreement amendment effective Jan 1, 2025 increased minimum base salary to $1,000,000, raised incentive targets, and added a special RSU grant; details in Employment Terms below .
Performance Compensation
Annual Incentive Plan (AIP) – 2024 Design and Outcome (CEO)
| Component | Weight | Target Definition | 2024 Outcome | Payout vs Target |
|---|---|---|---|---|
| VSE Revenue | 40% | Pre-set corporate revenue goals | Above Target | Included in 133% total |
| VSE Adjusted Operating Profit | 30% | Adjusted operating profit (aligned to adjusted EBITDA program) | Above Target | Included in 133% total |
| VSE Adjusted Free Cash Flow | 20% | Cash from ops – capex, adjusted for discrete items | Below Target (post adjustments for segment divestiture and USPS impact) | Included in 133% total |
| Individual Business Goals | 10% | Strategic execution (portfolio transformation, acquisitions, equity offerings) | Maximum | Included in 133% total |
| Total AIP Payout | — | Target $900,000; Threshold 50%, Max 200% | $1,197,000 | 133% |
Notes:
- Committee adjusted goals for divested Federal & Defense segment, Turbine Controls acquisition, and USPS FMIS disruption; PRSU and AIP metrics were flexed accordingly to maintain pay-for-performance alignment .
PRSUs – Performance-Based Equity (three-year cycles; annual one-third tranches)
| Grant Cycle | Metric | Target PRSUs | 2024 Performance Metric | 2024 Tranche Vesting | Earned Units |
|---|---|---|---|---|---|
| 2024–2026 | Adjusted EBITDA | 21,116 | Adjusted EBITDA $136.3m; goals adjusted for Turbine Controls and USPS | March 2025 | 13,865 (197% of 2024 tranche potential max 14,077) |
| 2023–2025 | Adjusted EBITDA | — | Adjusted EBITDA $136.3m; goals adjusted for Turbine Controls | March 2025 | 20,081 (200% of 2024 tranche) |
| 2022–2024 | Adjusted ROE | — | Adjusted ROE 8.9%; goals adjusted for Turbine Controls | March 2025 | 8,006 (100% of max for 2024 tranche) |
RSUs – Time-Based Equity
| Grant | Units | Vesting Schedule |
|---|---|---|
| 2024 Annual RSU | 14,077 | Ratably March 2025, 2026, 2027 |
| January 1, 2025 Special RSU (Cuomo Special Grant) | ~$1.5m fair value; units contingent on grant pricing | Two equal installments on Dec 31, 2026 and Dec 31, 2027 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of Mar 12, 2025) | 148,367 shares; under 1% of outstanding shares |
| Shares Outstanding (record date) | 20,669,280 |
| Unvested/Outstanding Awards (12/31/2024) | Earned PRSUs scheduled to vest: 13,865 (2024–2026) ; Unearned PRSUs remaining potential: 28,366 (max for 2025–2026 tranches) ; Unvested RSUs (2024 grant): 14,077 |
| Market Value Reference | Valuations in award table use $95.10 closing price at 12/31/2024 |
| Ownership Guidelines | 5x base salary for CEO; executives prohibited from hedging or pledging company stock |
| Clawback | Nasdaq-compliant clawback on incentive comp for restatements; applies to executive officers |
Employment Terms
| Term | Key Provisions |
|---|---|
| Agreement Term | Amended Dec 17, 2024; effective Jan 1, 2025; initial term Jan 1, 2025–Jan 1, 2028; auto-renew annually unless 150-day non-renewal notice |
| Minimum Base Salary | $1,000,000 (from $900,000 prior) |
| Target Incentive & LTI | Minimum AIP target ≥110% of salary; minimum LTI target ≥400% of salary |
| Special RSU Grant | Cuomo Special Grant ~$1.5m; vests Dec 31, 2026 and Dec 31, 2027; full vesting on qualifying termination or death/disability |
| Severance (No CIC) | 3x (salary + target bonus) cash; DSC account paid; Special RSU full vest; other equity generally per plan/terms |
| Severance (CIC Period) | 3x (salary + target bonus) cash; DSC paid; full vest for all time- and performance-based equity at target; CIC period runs from 6 months pre-CIC to 2 years post-CIC |
| Death/Disability | Lump sum equal to 2x base salary; Special RSU full vest |
| Non-Compete/Non-Solicit | Post-employment covenants reduced to 12 months in 2025 amendment |
| Excise Tax | “Best-net” cutback; no excise tax gross-ups |
| Clawback/Hedging/Pledging | Clawback policy; hedging/pledging prohibited |
Illustrative potential payments (as of 12/31/2024 assumptions):
- Termination without cause: Cash severance $3,600,000; DSC $1,565,417; equity per plan
- Termination during CIC: Cash severance $4,050,000; DSC $1,565,417; equity acceleration $7,618,249
- Death/Disability: Cash $1,800,000; DSC $1,565,417
Board Governance
- Board service: Director since 2019; not independent; other public company boards: none .
- Leadership structure: Independent Chair (Gen. Ralph E. Eberhart); no Lead Independent Director; separation of CEO and Chair roles .
- Committees: Audit, Compensation & Human Resources, Nominating & Corporate Governance committees are fully independent; CEO is not a member of board committees .
- Attendance: In 2024, 5 regular and 9 special board meetings; each director attended ≥75% of board and committee meetings; independent directors met in executive session .
- Say-on-Pay: 83% approval at 2024 annual meeting .
Performance & Track Record
- Strategic milestones (2024): Divested Federal & Defense segment; completed two equity offerings (~$325.8m net proceeds); expanded Aviation via acquisitions (Turbine Controls, Kellstrom), OEM-licensed manufacturing, and new EMEA distribution .
- Segment performance: Aviation revenue $786.3m (record) .
- Pay-versus-Performance (5-year view): Value of $100 investment rose to 260.93 vs 136.24 for peer index; 2024 net income $15.324m; adjusted EBITDA $136.29m .
Compensation Structure Analysis
- Mix shift upward in LTI: CEO’s RSU target increased to 120% of salary and PRSU target to 180% of salary for 2024; minimum LTI target rises to 400% in 2025 amendment, signaling stronger equity weighting and alignment with EBITDA-driven TSR .
- Metric adjustments: Committee adjusted AIP and PRSU targets for divestiture and major customer system disruption (USPS FMIS), preserving performance linkage while removing exogenous noise—a governance-sensitive practice to monitor .
- No options/repricing: Company does not grant stock options; no option repricing risk .
- Governance safeguards: Double-trigger CIC severance and equity acceleration; no CIC tax gross-ups; robust clawback; hedging/pledging ban .
Equity Ownership & Alignment Details
| Ownership Element | Data |
|---|---|
| CEO beneficial shares | 148,367 shares (as of 3/12/2025) |
| Upcoming vest dates | Annual RSU/PRSU vesting typically in March; Special RSU in Dec 2026 and Dec 2027 |
| Director/Exec ownership policies | 5x salary CEO guideline; directors must hold 5x retainer; directors in compliance; executives subject to insider trading, hedging, pledging policies |
Employment & Contracts
- Agreement features: Automatic renewal absent notice; confidentiality, non-compete, non-solicit, and non-disparagement covenants; severance conditioned on release of claims; “best-net” excise tax provision .
- DSC Plan: Non-qualified deferred supplemental compensation with vesting at 3 years (50%) and 5 years (100%); 2024 CEO allocation $135,000; aggregate DSC balance $1,565,417 as of 12/31/2024 .
- Other benefits: Standard employee plans; 401(k) match described; no defined-benefit pension .
Director Compensation (for context)
- Non-employee director retainer and equity program; CEO as employee director is compensated via executive program; non-employee director fees and annual equity grants detailed (no meeting fees; election to receive stock in lieu of cash) .
Risk Indicators & Red Flags
- Independence: CEO is a non-independent director, but board leadership is separated with independent chair—mitigates dual-role risk .
- Adjusted metrics: Committee’s mid-year adjustments to performance metrics require continued scrutiny to ensure rigor and avoid target softening beyond exogenous events .
- Severance magnitude: 3x salary+bonus multiples and full equity acceleration at CIC increase change-of-control costs; balanced by double-trigger structure and no gross-ups .
- Compliance: Clawback adopted; hedging/pledging prohibited; no options; related party transactions: none noted .
Compensation Peer Group & Shareholder Feedback
- Peer group refresh (2024 and 2025): Added aviation-focused peers; VSE positioned ~42nd percentile across revenue, market cap, EV, assets, 3-year TSR; peer group revised to reflect business transformation .
- Say-on-pay: 83% approval in 2024; committee maintained program structure with enhancements to equity weighting and EBITDA metrics .
Investment Implications
- Alignment signal: Elevated performance-based equity (PRSUs tied to adjusted EBITDA) and stricter ownership/clawback policies align CEO pay with shareholder value creation; strong 2024 TSR and EBITDA support constructive sentiment .
- Event-driven risk/reward: Large CIC severance and guaranteed vesting terms raise transaction costs in strategic scenarios; however, double-trigger provisions and lack of gross-ups are governance positives .
- Supply/demand for shares: Scheduled RSU/PRSU vestings (typically each March; special RSU Dec 2026/2027) may create periodic insider sale windows post-blackout; hedging/pledging bans limit leverage-related selling pressure .
- Program rigor: The committee’s documented adjustments for divestiture and USPS FMIS transition appear principled; continued monitoring of target calibration and payout factors is warranted to ensure sustained pay-for-performance integrity .