(4)
| | (3) | The aggregate value of perquisites and other personal benefits is less than $10,000 per non-employee director. |
| | (4) | Mr. Mayrhuber passed away on December 1, 2018. |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” EACH OF THE NOMINEES. Recommendation
| | | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” EACH OF THE NOMINEES.21
|
| | | |
15
COMPENSATION DISCUSSION AND ANALYSIS
Because our compensation methods and their results have remained essentially the same during the past several years, this Compensation Discussion & Analysis ("CD&A"), which is submitted by the Compensation Committee of the Company’s Board of Directors (the "Committee"), is again substantially similar to the prior year's CD&A. This CD&A should be read in conjunction with the compensation tables contained elsewhere in this proxy statement. References to our "named executive officers" in this CD&A are to the persons set forth in the compensation tables.
Our shareholders adopted an annual interval for "management say on pay" review. Accordingly, our shareholders last voted on the matter at our Annual Meeting in 2018 and approved, on an advisory basis, the compensation of our named executive officers. Our existing compensation policies and decisions are consonant with our compensation philosophy and objectives discussed below and align the interests of our named executive officers with the Company's short and long term goals.
TABLE OF CONTENTS COMPENSATION DISCUSSION AND ANALYSIS Because our compensation methods and their results have remained essentially the same during the past several years, this Compensation Discussion & Analysis (“CD&A”), which is submitted by the Compensation Committee of the Company’s Board of Directors (the “Committee”), is again substantially similar to the prior year’s CD&A. This CD&A should be read in conjunction with the compensation tables contained elsewhere in this proxy statement. References to our “named executive officers” in this CD&A are to the persons set forth in the compensation tables. Our shareholders again expressed support for the Company’s compensation approach last year with an approval rate of approximately 95% of votes cast on the matter at our Annual Meeting in 2021 and approved, on an advisory basis, the compensation of our named executive officers. Our shareholders previously adopted an annual interval for “management say on pay.” Our existing compensation policies and decisions are consonant with our compensation philosophy and objectives discussed below and align the interests of our named executive officers with the Company’s short- and long-term goals. Compensation Background Data
Substantial Growth
For nearlyover three decades, the Committee has applied the same deliberate and consistent principles which have succeeded in retaining and incentivizing our management over a long period of time. Accordingly, when setting compensation, the Committee considers the following key facts:
| | •▪ | HEICO achieved 23% compound annual growth in Total Shareholder Return(1) of 23% from 1990 through October 31, 20182021 |
▪ | HEICO achieved 18% compound annual net income growth from fiscal 1990 through fiscal 2021 |
▪ | HEICO achieved 15% compound annual sales growth from fiscal 1990 through fiscal 2021 |
▪ | HEICO achieved 20% compound annual cash flow from operations growth from fiscal 1990 through fiscal 2021 |
HEICO achieved 19% compound annual net income growth from fiscal 1990 through fiscal 2018
HEICO achieved 16% compound annual sales growth from fiscal 1990 through fiscal 2018
HEICO achieved 21% compound annual cash flow from operations growth from fiscal 1990 through fiscal 2018
The following four pages displayPage 4 helps frame the Committee’s decisions by displaying the net sales and net income growth for the past twenty-eightthirty-one years and the Total Shareholder Return which investors who held HEICO shares would have experienced over the past three years and the past twenty-eightthirty-one years (which includes the time since current management took office).
(1) Total Shareholder Return This strong performance is the change in share price, as adjusted for stock splits and stock dividends, and all cash dividends, assuming reinvestment of those dividends in our Company's shares.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Twenty-Eight Year Net Sales and Net Income Results (in thousands) | | | 1990 | | 1991 | | 1992 | | 1993 | | 1994 | | 1995 | Net Sales | |
| $26,239 |
| |
| $25,368 |
| |
| $19,852 |
| |
| $19,856 |
| |
| $19,212 |
| |
| $25,613 |
| Net Income | | 1,961 |
| | 2,363 |
| | 332 |
| | 728 |
| | 1,021 |
| | 1,437 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 1996 | | 1997 | | 1998 | | 1999 | | 2000 | | 2001 | Net Sales | |
| $34,565 |
| |
| $63,674 |
| |
| $95,351 |
| |
| $141,269 |
| |
| $202,909 |
| |
| $171,259 |
| Net Income | | 3,665 |
| | 7,019 |
| | 10,509 |
| | 16,337 |
| | 27,739 |
| | 15,833 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 2002 | | 2003 | | 2004 | | 2005 | | 2006 | | 2007 | Net Sales | |
| $172,112 |
| |
| $176,453 |
| |
| $215,744 |
| |
| $269,647 |
| |
| $392,190 |
| |
| $507,924 |
| Net Income | | 15,226 |
| | 12,222 |
| | 20,630 |
| | 22,812 |
| | 31,888 |
| | 39,005 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 2008 | | 2009 | | 2010 | | 2011 | | 2012 | | 2013 | Net Sales | |
| $582,347 |
| |
| $538,296 |
| |
| $617,020 |
| |
| $764,891 |
| |
| $897,347 |
| |
| $1,008,757 |
| Net Income | | 48,511 |
| | 44,626 |
| | 54,938 |
| | 72,820 |
| | 85,147 |
| | 102,396 |
|
| | | | | | | | | | | | | | | | | | | | | | | | 2014 | | 2015 | | 2016 | | 2017 | | 2018 | Net Sales | |
| $1,132,311 |
| |
| $1,188,648 |
| |
| $1,376,258 |
| |
| $1,524,813 |
| |
| $1,777,721 |
| Net Income | | 121,293 |
| | 133,364 |
| | 156,192 |
| | 185,985 |
| | 259,233 |
|
The following graph and table compare the Total Shareholder Return on $100 invested in HEICO Common Stock and HEICO Class A Common Stock with the Total Shareholder Return on $100 invested in an Aerospace Company Peer Group for the three-year period from October 31, 2015 through October 31, 2018. The Aerospace Company Peer Group is comprised of twenty of the twenty-two companies used in preparing the Company’s fiscal 2018 compensation benchmark analysis. Please note two companies were omitted from the table below as they were not listed companies for the full three-year duration presented. See within the "Determining Compensation Levels" section on page 23 for a list of the company names. The total returns include the reinvestment of cash dividends.
| | | | | | | | | | Cumulative Total Shareholder Return as of October 31, | | 2015 | | 2016 | | 2017 | | 2018 | HEICO Common Stock | $100.00 | | $134.31 | | $225.84 | | $326.76 | HEICO Class A Common Stock | 100.00 | | 137.82 | | 219.06 | | 300.42 | Aerospace Company Peer Group | 100.00 | | 107.26 | | 149.03 | | 154.50 |
The following graph and table compare the Total Shareholder Return on $100 invested in HEICO Common Stock and HEICO Class A Common Stock with the Total Shareholder Return on $100 investedfactor in the NYSE Composite Index and the Dow Jones U.S. Aerospace Index for the three-year period from October 31, 2015 through October 31, 2018. The NYSE Composite Index measures the performance of all common stocks listed on the NYSE. The Dow Jones U.S. Aerospace Index is comprised of large companies which make aircraft and defense equipment and systems, as well as providers of satellites and spacecraft used for both commercial and defense purposes. The total returns include the reinvestment of cash dividends.Committee’s decisions.
| | | | | | | | | | Cumulative Total Shareholder Return as of October 31, | | 2015 | | 2016 | | 2017 | | 2018 | HEICO Common Stock | $100.00 | | $134.31 | | $225.84 | | $326.76 | HEICO Class A Common Stock | 100.00 | | 137.82 | | 219.06 | | 300.42 | NYSE Composite Index | 100.00 | | 100.20 | | 117.97 | | 116.70 | Dow Jones U.S. Aerospace Index | 100.00 | | 106.29 | | 158.89 | | 190.92 |
The following graph and table compare the Total Shareholder Return on $100 invested in HEICO Common Stock since October 31, 1990 using the same indices shown on the three-year performance graph immediately above. October 31, 1990 was the end of the first fiscal year following the date the current executive management team assumed leadership of the Company. No Class A Common Stock was outstanding as of October 31, 1990. The total returns include the reinvestment of cash dividends.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cumulative Total Shareholder Return as of October 31, | | | 1990 | | 1991 | | 1992 | | 1993 | | 1994 | | 1995 | HEICO Common Stock | |
| $100.00 |
| |
| $141.49 |
| |
| $158.35 |
| |
| $173.88 |
| |
| $123.41 |
| |
| $263.25 |
| NYSE Composite Index | | 100.00 |
| | 130.31 |
| | 138.76 |
| | 156.09 |
| | 155.68 |
| | 186.32 |
| Dow Jones U.S. Aerospace Index | | 100.00 |
| | 130.67 |
| | 122.00 |
| | 158.36 |
| | 176.11 |
| | 252.00 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 1996 | | 1997 | | 1998 | | 1999 | | 2000 | | 2001 | HEICO Common Stock | |
| $430.02 |
| |
| $1,008.31 |
| |
| $1,448.99 |
| |
| $1,051.61 |
| |
| $809.50 |
| |
| $1,045.86 |
| NYSE Composite Index | | 225.37 |
| | 289.55 |
| | 326.98 |
| | 376.40 |
| | 400.81 |
| | 328.78 |
| Dow Jones U.S. Aerospace Index | | 341.65 |
| | 376.36 |
| | 378.66 |
| | 295.99 |
| | 418.32 |
| | 333.32 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 2002 | | 2003 | | 2004 | | 2005 | | 2006 | | 2007 | HEICO Common Stock | |
| $670.39 |
| |
| $1,067.42 |
| |
| $1,366.57 |
| |
| $1,674.40 |
| |
| $2,846.48 |
| |
| $4,208.54 |
| NYSE Composite Index | | 284.59 |
| | 339.15 |
| | 380.91 |
| | 423.05 |
| | 499.42 |
| | 586.87 |
| Dow Jones U.S. Aerospace Index | | 343.88 |
| | 393.19 |
| | 478.49 |
| | 579.77 |
| | 757.97 |
| | 1,000.84 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 2008 | | 2009 | | 2010 | | 2011 | | 2012 | | 2013 | HEICO Common Stock | |
| $2,872.01 |
| |
| $2,984.13 |
| |
| $4,722.20 |
| |
| $6,557.88 |
| |
| $5,900.20 |
| |
| $10,457.14 |
| NYSE Composite Index | | 344.96 |
| | 383.57 |
| | 427.61 |
| | 430.46 |
| | 467.91 |
| | 569.69 |
| Dow Jones U.S. Aerospace Index | | 602.66 |
| | 678.00 |
| | 926.75 |
| | 995.11 |
| | 1,070.15 |
| | 1,645.24 |
|
| | | | | | | | | | | | | | | | | | | | | | | | 2014 | | 2015 | | 2016 | | 2017 | | 2018 | HEICO Common Stock | |
| $11,416.51 |
| |
| $10,776.88 |
| |
| $14,652.37 |
| |
| $23,994.03 |
| |
| $33,876.95 |
| NYSE Composite Index | | 617.23 |
| | 595.37 |
| | 596.57 |
| | 702.38 |
| | 694.81 |
| Dow Jones U.S. Aerospace Index | | 1,687.41 |
| | 1,766.94 |
| | 1,878.10 |
| | 2,807.42 |
| | 3,373.52 |
|
What the Committee Believes
Compensation policies should be simple and clear for the Company, its shareholders and our executives
Complicated compensation methods designed to encourage or discourage specific actions are more likely to lead to unintended adverse consequences than they are to yield successful overall results
A fair and transparent compensation policy builds trust between the Company and its executives, which, in turn, fosters an ethical and honest business culture
▪ | Compensation policies should be simple and clear for the Company, its shareholders and our executives |
▪ | Complicated compensation methods designed to encourage or discourage specific actions are more likely to lead to unintended adverse consequences than they are to yield successful overall results |
▪ | A fair and transparent compensation policy builds trust between the Company and its executives, which, in turn, fosters an ethical and honest business culture |
Thus, the Committee focuses on the following three clear objectives
Compensate our executives fairly
Motivate our executives to honestly and ethically grow our Company’s profits, cash generation, revenues, and market capitalization over time, not just in the short term
Retain our executives while ensuring the ability to attract new ones as needed
▪ | Compensate our executives fairly |
▪ | Motivate our executives to honestly and ethically grow our Company’s profits, cash generation, revenues, and market capitalization over time, not just in the short term |
▪ | Retain our executives while ensuring our ability to attract new ones as needed |
Compensation Approach Details ▪ | Follow a “common sense” approach to compensating our executives |
Derived from the Committee members’ many years of actual business and practical experience in which they had to design compensation for their own employees22 | | | 2022 PROXY STATEMENT | | | | |
This approach and historical judgment have been very successful for HEICO, with the Company experiencing significant growth over a very long period and usually meeting its shorter term goals each year
Both long and short-term performance are important
TABLE OF CONTENTS The Committee applied the same judgment in 2018 as in prior years
▪ | Not based on theory or ornate concepts derived from academic study |
▪ | Derived from the Committee members’ many years of actual business and practical experience in which they had to design compensation for their own employees |
▪ | This approach and historical judgment have been very successful for HEICO, with the Company experiencing significant growth over a very long period and usually meeting its shorter-term goals each year |
▪ | Both long and short-term performance are important |
▪ | The Committee applied the same judgment in 2021 as in prior years |
HEICO’s success and the Committee members’ continuous interaction with the named executive officers are overriding factors in the Committee’s compensation philosophy. Over approximately 2831 years, the Board of Directors and Committee members have had the experience of workingworked with almost all the named executive officers and, during thisa period in which, the Company’s sales grew from just over $26 million in fiscal 1990 to a record of approximately $1.8$1.9 billion in fiscal 2018,2021, while our net income from continuing operations has growngrew from just below $2 million to a record of approximately $259$304 million in the same period. Further, our compound annual growth rate of growth in net sales and net income have equaled 16%15% and 19%18%, respectively, since 1990. During this time, our shareholders have benefited significantly, as a $100,000 investment in HEICO stock at the time current management took over operation of the business became worth approximately $33.9$60.0 million as of October 31, 2018.2021.
Important Considerations and Important Management Characteristics
During this lengthy period of strong performance, the Board of Directors and the Committee have becomebecame well acquainted with each of the named executive officers and have observed the following characteristics about our management team, which strengthened our trust in them and serves to confirm our judgment of how they should be compensated.
Loyalty to the Company, including times when such loyalty harmed the executives’ short- term personal interests
▪ | Loyalty to the Company, including times when such loyalty harmed the executives’ short-term personal interests |
◦▪ | For example, during downturns, the executives favored continued substantial investment in research and product development, including during the Pandemic, which had the effect of reducing their own potential short-term compensation, so that the Company would experience better mediummedium- and long termlong-term growth |
| | ◦▪ | During weak economic times,the Pandemic, our executive officers requested that they not receivetheir salaries be reduced |
▪ | In prior downturns, which were all much milder than the Pandemic, our executive officers insisted on foregoing planned salary increases or bonuses |
Management has been careful to maintain conservative debt levels to ensure the Company’s ability to finance acquisitions and growth
Our executive officers have developed an ethical and honest culture based on serving our various stakeholders, which has become known among our Team Members as the "HEICO Family" culture
Executive officers should feel they are being rewarded and recognized properly for their efforts and for their contributions to our Company’s growth
▪ | Management has been careful to maintain conservative debt levels to ensure the Company’s ability to finance acquisitions and growth, and to sustain unimpeded operations during times of severe global distress, such as the Pandemic when numerous commercial airlines filed for bankruptcy, but HEICO maintained a strong balance sheet |
▪ | Our executive officers developed an ethical and honest culture based on serving our various stakeholders, which is known among our Team Members as the “HEICO Family” culture |
▪ | As an example, even during a very challenging business year, HEICO made its typical full contribution to all eligible Team Members’ 401(k) retirement plan accounts at a time when many other companies reduced or eliminated them |
▪ | Executive officers should feel they are being rewarded and recognized properly for their efforts and for their contributions to our Company’s growth |
Other Important Factors We Consider ▪ | Current management holds a significant financial stake in the Company |
▪ | Alternate personal business opportunities which our executives could easily pursue |
▪ | Amounts and types of compensation which other companies pay to their executives |
▪ | General economic conditions |
▪ | The complexity and risks of the executives’ current jobs |
▪ | Stability from management’s longevity, which benefits employee and customer retention and which secures the HEICO Family culture |
Current management holds a significant financial stake in the CompanyAlternate personal business opportunities which our executives could easily pursue
Amounts and types of compensation which other companies pay to their executives
TABLE OF CONTENTS General economic conditions
The complexity and risks of the executives’ current jobs
Stability from management’s longevity, which benefits employee and customer retention and which secures the HEICO Family culture
Compensation Elements
The Committee consistently breaks executive compensation into the following four primary categories: ▪ | Retirement-Related/Long-Term Compensation |
Base Salary
Bonus
Stock Options
Retirement-Related/Long-Term Compensation
Further, we believe it is appropriate to allow executives certain modest perquisites as discussed later in this CD&A. &A.
The Committee considers Base Salary, Cash Bonus (which is referred to as Non-Equity Incentive Compensation Plan in the Summary Compensation Table), Retirement-Related/Long-Term Compensation, Director Fees, Insurance Benefits and other perquisites to be cash-based compensation.
Determining Compensation Levels
Independent, third party consultants utilized
▪ | Independent, third party consultants utilized |
◦▪ | The consultants retained by the Committee are independent |
| | ◦▪ | They raise no conflict of interest concerns because they provide no other services to HEICO or its executives |
The Committee utilizes independent third partythird-party consultants to help us benchmark our compensation views against those of other companies. The consultants were selected based upon their historical use by the Committee and the Committee’s satisfaction with the consultants’ work product. Steven Hall & Partners provided our benchmark analysis of executive base salaries and bonuses paid to executives at other companies with some important characteristics similar to ours. The consultant'sconsultant’s benchmark was comprised of twenty-twofourteen manufacturing companies, each with at least one significant characteristic similar to one of HEICO’s, such as revenues, market capitalization, profits or industry. The aerospace companies used in the benchmark analysis were: AAR Corp., Aerojet Rocketdyne Holdings, Inc., Analogic Corp., Barnes Group, Inc., CAE, Inc., Comtech Telecommunications Corp., Cubic Corp., Curtiss-Wright Corporation, Ducommun, Inc., EnPro Industries, Inc., ESCO Technologies, Inc., Esterline Technologies Corp., FLIR Systems, Inc., Franklin Electric Co., Inc., Hexcel Corp., KLX, Inc., Moog, Inc., Teledyne Technologies, Inc., TransDigm Group, Inc., Triumph Group, Inc., ViaSat, Inc. and Woodward, Inc.
Fulcrum Consulting provided the Committee with advice regarding the HEICO Corporation Leadership Compensation Plan (which is further discussed below) and provided the Committee with general advice on benefits policies generally and conductsconducted actuarial studies for certain benefit plan contributions.
We do not believe that benchmark studies should be the only, or even the determinative, consideration, though they are helpful in providing partial fairness tests for both our Company and its executives and they help us evaluate whether our compensation methods are at least comparable to those of other companies
HEICO’s management focuses on our profitability, cash flow from operating activities as defined by generally accepted accounting principles ("Cash Flow") and market capitalization in the belief that these ultimately drive shareholder wealth, rather than by our revenues or number of employees relative to other firms
The Committee incentivizes profitability, Cash Flow and market capitalization growth
Benchmarking studies frequently relate to a company’s size in revenues or employment, instead of its profitability or profit margins
▪ | We do not believe that benchmark studies should be the only, or even the determinative, consideration, though they are helpful in providing partial fairness tests for both our Company and its executives and they help us evaluate whether our compensation methods are at least comparable to those of other companies |
▪ | HEICO’s Board of Directors and management focuses on our profitability, cash flow from operating activities as defined by generally accepted accounting principles (“Cash Flow”) and market capitalization in the belief that these ultimately drive shareholder wealth, rather than by our revenues or number of employees relative to other firms |
▪ | The Committee incentivizes profitability, Cash Flow and market capitalization growth |
▪ | Benchmarking studies frequently relate to a company’s size in revenues or employment, instead of its profitability or profit margins |
If we were to exclusively follow benchmark studies, we would pay our executives not for the Company’s income, but principally for its revenues and staff size. We believe that would be flawed because itsize, which would not incentivize our management to focus on the factors which we and they believe to be important, such as Cash Flow, net income, profits and margins, company culture, product line breadth and long-term focus. When we consider the benchmark data, we believe that our executive management team should be compensated in the higher percentile of companies reviewed because of the factors discussed above in this CD&A. The Committee continues to reserve the discretion on whether or not to utilize and interpret the benchmark data in our judgment.data. We also note that benchmark data can be flawed due to circumstances unique to other companies in a “peer group” and because there are no companies which exactly match the total mix of HEICO’s products, size and financial characteristics.
24 | | | 2022 PROXY STATEMENT | | | | |
TABLE OF CONTENTS
The Committee determines base salary by considering: ▪ | Growth in our sales, income and Cash Flow |
▪ | Our business’s complexity |
▪ | The benchmark analyses previously discussed |
▪ | The need to offer a fair and competitive base salary versus other income opportunities which executives might have |
▪ | We also consider the fact that there are other elements in compensation which the Company does not offer to our executives and the compensation elements we do offer which are discussed below (e.g., bonus and retirement/long-term compensation amounts) |
Growth in our sales, income and Cash Flow
Historical pay levels
Our business’s complexity
The benchmark analyses previously discussed
The need to offer a base salary competitive with other income generating opportunities which executives might have
We also take into account the fact that there are other elements in compensation which the Company does not offer to our executives and the compensation elements we do offer which are discussed below (e.g., bonus and retirement/long-term compensation amounts)
At each fiscal year’s outset, our executive officers present to the Board of Directors a financial goal or budget for the year. The Committee believes that Mr. Laurans Mendelson should receive a bonus equal to roughly 200% of his eligible compensation and that Messrs. Mendelson (Laurans, Eric(Eric and Victor) and Mr. Macau should receive bonusesa bonus equal to roughly 130%110% of their eligible compensation if the Company meets a budgeted, meaningful growth goal. In 2018,2021, the bonus required 18% net income growth.
Bonuses are paid for net income15% growth
18% net income growth over fiscal 2017 was required in the following financial metrics (collectively referred to as the “Financial Metrics”) for the named executive officerssix months ended October 31, 2021 as compared to receive their target bonus
A minimum of 6% net income growth over fiscal 2017 was required in fiscal 2018 for our named executive officers to receive any bonus whatsoever
Fiscal 2018 bonus was to have been reduced by 4.6% for every 1% that net income growth was less than 18%, but bonus was to have been increased by only 2.3% for every 1% net income growth was above 18%, subject to a limit representing roughly 190% of the named executive officer's eligible compensationsix months ended October 31, 2020:
In order for the named executive officers to earn any bonus in fiscal 2018, ▪ | Net income attributable to HEICOHEICO’s net income had to grow at nearly three times the United States’ Gross Domestic Product (GDP) 2017 growth rate Fiscal 2019’s bonus target requires 18% net income growth for the named executive officers to receive their targeted bonus payments
Fiscal 2019 net income must grow by at least 6% for the named executive officers to receive any bonus payment under the Company’s incentive compensation plan
Fiscal 2019 bonus will be reduced by 4.6% for every 1% that net income growth is less than 18%, but bonus will be increased by only 2.3% for every 1% net income growth is above 18%, subject to a limit representing roughly 190% of the named executive officer's eligible compensation
Prior years’ requirements were similarly rigorous
|
▪ | Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)* |
▪ | Cash flow from operating activities (“Operating Cash Flow”) |
The Committee feels bonuses should be scaled to provide for partial payment if the minimum threshold is met, but the full target is not met, so the Company'sCompany’s incentive compensation plans provide for this. We also believe that a larger bonus should only be paid if the full target is exceeded; the bonus arrangement provided for such a formula along with a cap on all bonus potential.
Our goal is to provide incentives to management to meet both short and long-term objectives, to be competitive with other income generating opportunities our executives might have and to treat them fairly at all times. We note that our executive officers have requested that they receive no bonuses in periods where financial performance failed to meet budgeted goals, even if we grew significantly during the relevant period.
Before setting targets, the Committee also reviews benchmarks and other data provided by our compensation consultants. The Committee also considers the fact that numerous other management-level employees at HEICO are offered bonus opportunities equal to 100% or more of their eligible compensation if their operations meet certain targets and the Committee likes the consistency of this approach.approach's consistency.
In December 2017,Consistent with our prior practice, the Committee established minimum and maximum target bonus levels for four of the named executives for fiscal 2018.2021. Our netNet income targetattributable to HEICO, EBITDA and Operating Cash Flow targets (collectively referred to as the “Bonus Targets”) for fiscal 2018 was $219,462,300 which reflects an 18%the six months ended October 31, 2021 were $134,139,000, $234,423,000 and $233,729,000, respectively, a 15% increase over fiscal 2017 net income.these Financial Metrics for the six months ended October 31, 2020. Recognizing that any increase in net incomethese Financial Metrics deserves recognition, but that lower than targeted net incomeresults deserves less than the targeted bonus, the Committee allows for reduction ofreduces the bonus from target by 4.6%5.0% for every percent that net income wasthese Financial Metrics were below the target. Conversely, if net incomethese Financial Metrics were greater than targeted, the executives’ bonuses could be increased by 2.3%slightly less than half of the rate by which the bonuses decrease if these Financial Metrics were below the target, or 2.0%, for every percentage point increase in the actual net incomeFinancial Metrics above the targeted amount. Please see our “Grants of Plan-Based Awards” table below for our threshold, target and maximum rewards levels under the HEICO Corporation 2018 Incentive Compensation Plan (the "2018 Plan"“2018 Plan”).
Our actual net incomeFinancial Metrics in fiscal 2018the six months ended October 31, 2021 grew by approximately 39.4%21.5%, 12.4% and was $259,233,000 versus targeted net income of $219,462,300..1%, respectively, over the Bonus Targets and were $162,951,000, $263,393,000 and $233,972,000, respectively. Accordingly, since our actual net incomeFinancial Metrics exceeded the targeted amount,our Bonus Targets, the non-equity incentive compensation amounts set forth in the compensation tables below were paid to the named executive officers. The targets were not changed during the year. TABLE OF CONTENTS Additionally, during fiscal 2018,2021, the Committee approved a cash incentive award for HEICO'sHEICO’s Chairman of the Board and Chief Executive Officer, Laurans A. Mendelson. Under the aforementioned cash incentive award, Laurans A. Mendelson, receiveswhereby he would receive a fixed amount of $650,000$738,000 cash should our fiscal 2018 net2021 Net income attributable to HEICO for the six months ended October 31, 2021 increase over our fiscal 2017 net income. As previously mentioned, our2020 Net income attributable to HEICO for the six months ended October 31, 2020. Our actual netNet income in fiscal 2018attributable to HEICO for the six months ending October 31, 2021 grew by approximately 39.4% as compared40% over our Net income attributable to fiscal 2017, so thatHEICO for the full amount ofsix months ending October 31, 2020 and therefore the previously mentioned cash incentive award is included within Laurans A. Mendelson'sMendelson’s non-equity incentive plan compensation amount set forth in the compensation table below.
▪ | Stock options align the shareholders’ and option holders’ interests because the option holders do not receive any gain from their options unless the shareholders experience a gain because HEICO’s share price increases |
▪ | In order for the Common Stock options issued to the named executive officers in fiscal 2021 to achieve the value set forth in the Summary Compensation Table, HEICO’s Common Stock must rise by approximately $51.16, or 38%, from the grant date closing market price |
▪ | In order for the Class A Common Stock options issued to the named executive officer in fiscal 2021 to achieve the value set forth in the Summary Compensation Table, HEICO’s Class A Common Stock must rise by approximately $45.29, or 38%, from the grant date closing market price |
▪ | Stock options issued to the named executive officers in fiscal 2021 equal less than 1% of our shares outstanding if all of the options are eventually exercised |
▪ | Stock options are very important to some executives |
Stock options align the shareholders’ and option holders’ interests because the option holders do not receive any gain from their options unless the shareholders experience a gain resulting from HEICO’s share price increase
In order for the Common Stock options issued to the named executive officers in fiscal 2018 to achieve the value set forth in the Summary Compensation Table, HEICO’s Common Stock must rise by approximately $30.00, or 42%, from the grant date closing market price
In order for the Class A Common Stock options issued in fiscal 2018 to the named executive officer to achieve the value set forth in the Summary Compensation Table, HEICO’s Class A Common Stock must rise by approximately $22.82, or 40%, from the grant date closing market price
Stock options issued to the named executive officers in fiscal 2018 equal less than 1% of our shares outstanding if all of the options are eventually exercised
Stock options are very important to some executives
Both the Committee and the executives feel that it is critical to provide a linkage to stock performance
Stock options do not use the Company’s cash (except for tax payments when shares of the Company’s common stock are surrendered upon exercise in lieu of tax payments), thus allowing the Company to pay compensation while limiting cash usage
Since 1990, the combined value of our classes of common stock increased by approximately 33,777%, or 23% compounded per annum, through October 31, 2018, so that our executives who received stock options during that period gained wealth while our shareholders also gained wealth. We believe this dynamic provides consistent reward for the shareholders and management.
Retirement-Related/Long-Term Compensation
We believe our employees, including the named executive officers, should generate retirement funds to ensure that they are not focused on alternative business activities to supplement their incomes
We want HEICO to remain competitive with compensation offered by other employers
We wish to demonstrate good faith to our named executive officers by proactively offering them benefits which are typical in the industry or common among benchmark companies before they have to ask for them
This fosters an environment of mutual trust between the Board of Directors and our employees, including the named executive officers, and serves to enhance the HEICO Family culture
As has been the case in past years, federal tax laws limited the permitted benefits in 2018 to our named executive officers in our 401(k) Plan to a matching rate that was actually less than most of our other employees. Accordingly, our named executive officers were prevented from receiving the maximum percentage benefits available to many other employees under the 401(k) Plan
▪ | We believe our employees, including the named executive officers, should generate retirement funds to ensure that they are not focused on alternative business activities to supplement their incomes |
▪ | We want HEICO to remain competitive with compensation offered by other employers |
▪ | We wish to demonstrate good faith to our named executive officers by proactively offering them benefits which are typical in the industry or common among benchmark companies before they have to ask for them |
▪ | This fosters an environment of mutual trust between the Board of Directors and our employees, including the named executive officers, and serves to enhance the HEICO Family culture |
▪ | As has been the case in past years, federal tax laws limited the permitted benefits in 2021 to our named executive officers in our 401(k) Plan to a matching rate that was actually less than most of our other employees. Accordingly, our named executive officers were prevented from receiving the maximum percentage benefits available to many other employees under the 401(k) Plan |
Since 1985, HEICO has offered its 401(k) Plan to nearly all of our U.S. employees, including our executive officers. As of October 31, 2018,2021, approximately 5,1005,500 current and former employees participated in the 401(k) Plan. Under the 401(k) Plan, employees may elect to defer a portion of their cash compensation into an account within the 401(k) Plan. The amount each employee defers is then matched at a certain rate by HEICO in cash or HEICO stock. Based upon recommendation by management, the Committee approves the matching rate that each of our subsidiaries contributes and the full Board ratifies that rate.
In 2006, the Board approved the HEICO Corporation Leadership Compensation Plan (the “LCP”), which is a nonqualified deferred compensation plan that conforms to Section 409A of the Internal Revenue Code. The LCP is currently available to approximately 300350 HEICO employees (and to the Board members). It provides that the participating employees may contribute a portion of their compensation to the LCP and that HEICO will match salary contributions at a specified fraction of each employee’s salary contribution. The matching rate is established by the Committee and ratified by the Board of Directors. In addition, the Committee and Board of Directors retained discretion to contribute additional amounts to each participant’s account in the LCP. As was the case in the prior years, in fiscal 2018,2021, we made the contribution set forth in the compensation tables corresponding to the named executive officers in an effort to “catch up” for retirement benefits not paid to them prior to fiscal 2007. The recommendation from our compensation consultants utilized in part to determine benefit levels were based on the years of service to HEICO by the executives, their ages and their statistically estimated proximity to retirement.
Based upon the recommendation of the Committee’s compensation consultants, the contribution to the account of Laurans A. Mendelson was substantially larger than those paid to the other named executive officers as a result of his age and years of service.
Perquisites26 | | | 2022 PROXY STATEMENT | | | | |
TABLE OF CONTENTS Most of our named executive officers and certain other executives who utilize their automobiles, at least in part, for company business have been offered either automobiles or automobile allowances. This practice has been in place for approximately 2932 years. To the extent that they use their automobiles for non-company business, they receive a personal benefit which is reported as a taxable benefit. In addition, we pay for life insurance for some of our named executive officers consistent with past practices. The Committee benchmarking analyses and the Committee members’ own experience have led the Committee to conclude these types and amounts of perquisites to be appropriate and customary for executive officers with many other companies.
It is the Committee’s practice to have our Senior Executive Vice President and our Chief Executive Officer work with our compensation consultants to verify benchmarks on other companies’ practices and, where appropriate, provide updated suggestions for compensation methods. The Committee relied on the independent compensation consultants and management to finalize the benchmark indexes and to exchange information. The Committee then studies and analyzes such information and directs involved management to provide further information as needed, but the Committee retains all discretion over compensation of the Company’s named executive officers, as well as the hiring or termination of all consultants.
Other Compensation Issues
Although approximately 48%59% of the named executive officers'officers’ compensation was long-term (which consists of stock options, 401(k) Plan and LCP compensation), because the Committee believes it should apply its own judgment and sense of fairness in setting compensation levels, it does not use set formulas to allocate between long-term and currently paid out compensation. The Committee applies this philosophy to the breakdown between cash and non-cash compensation in order to maintain flexibility to incentivize and recognize management based upon ourtheir qualitative interactions with us and other shareholders. What We Evaluate in Setting Policies and Making Compensation Decisions ▪ | Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) |
▪ | Whether the company met both quantitative and qualitative goals |
▪ | Management’s ethical conduct and adherence to our HEICO Family culture |
▪ | Management’s adherence to corporate policies |
▪ | Our reputation with various stakeholders |
▪ | Difficulty in managing the business |
▪ | Our historical performance |
▪ | Whether failure to meet any goals was the result of completely external factors or management errors |
▪ | Economic and other external conditions |
▪ | Other considerations deemed important from time-to-time |
What we evaluate in setting policies and making compensation decisions
Cash Flow
Net Income
Operating Income
Revenues
Whether the company met both quantitative and qualitative goals
Management’s ethical conduct and adherence to our HEICO Family culture
Management’s adherence to corporate policies
Management’s efforts
Management’s work ethic
Our reputation with various stakeholders
Difficulty in managing the business
Our historical performance
TABLE OF CONTENTS Whether failure to meet any goals was the result of completely external factors or management errors
Economic conditions
Acquisitions
Other considerations deemed important from time-to-time
Given the Company’s consistently strong results in fiscal 2018 and the fact that we were able to observe the executives during that time and before that time, we believe that these items above were favorably impacted by the executives and this played a role in our compensation decisions.
Because we want to encourage all of our executive officers to work together as a team and to discourage them from considering their contribution individually, we do not exclusively consider each executive officer’s contribution to our performance or otherwise attempt to break out a value for it. We do not specifically analyze the relationship between compensation of our executive officers and other employees (which is sometimes referred to as "pay equity"“pay equity” analysis). We have "clawback"“clawback” policies which require repayment of compensation as is required by law or regulation. Given that we have not had to restate results of which prior compensation decisions were made, our policies do not extend beyond those contained in laws or other regulations regarding compensation adjustment or recovery. In the event that such a situation does arise, the Committee believes it has adequate remedies and will address it in accordance with applicable laws or regulations as it determines appropriate at that time. The Committee does not separately consider how much compensation amounts are realizable from prior compensation; however, those are factors which the Committee views in the total mix of information when setting compensation. The Committee does, however, consider the impact that our accounting policies have on our overall performance in both cash utilization and accounting terms.
While the Committee does take into consideration in the total mix of information the factconsiders that our named executive officers hold and have held significant amounts of our stock for decades, we do not require them to own a specific amount of our stock. Our policies direct that members of HEICO’s Board of Directors should purchase HEICO shares equivalent to approximately 64%63% of their annual Board of Directors retainer. Three of our named executive officers are members of our Board of Directors and all of them have followed that policy. The Committee views ownership of HEICO shares as a commitment to the Company and believes that it should be encouraged.
The named executive officers who also serve on the Company’s Board of Directors receive compensation for their services as Directors commensurate with the independent directors. We believe that this policy, which has been in place for approximately 2932 years, is appropriate given the risks and efforts attendant with service on the Board of Directors.
Management and the Board of Directors, including the Compensation Committee, consider and discuss the risks inherent in our business, as well as the design of our compensation plans, policies and programs that are intended to further our business objectives. Given the nature of our business, and the material risks we face, we believe that our compensation plans, policies and programs are not reasonably likely to give rise to risk that would have a material adverse effect on our business history.business. We also believe that the mix and design of the elements of our executive compensation do not encourage management to assume excessive risks. Our compensation programs and decisions include qualitative factors which restrain excessive risk taking by management.
HEICO does not have any formal practices or policies regarding the ability of its employees, officers and directors to engage in hedging transactions relating to HEICO stock.
The following report of the Compensation Committee does not constitute soliciting materials and should not be deemed filed or incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent we specifically incorporate the report by reference in any such filing.
Compensation Committee Report
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis required by item 402(b) of Regulation S-K. Based on our review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Proxy Statement and be incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2018. 2021.
Respectfully submitted by the Compensation Committee of the Company’s Board of Directors: Mark H. Hildebrandt (Chairman), Julie Neitzel and Dr. Alan Schriesheim.
28 | | | 2022 PROXY STATEMENT | | | | |
TABLE OF CONTENTS EXECUTIVE COMPENSATION Summary Compensation Table The following table provides the compensation earned by our Chief Executive Officer, Chief Financial Officer and each of the three other most highly compensated executive officers of the Company or its subsidiaries (collectively, the “Named Executive Officers”) during fiscal 2018, 20172021, 2020 and 2016.2019. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Fiscal Year | | Salary (1) | | Bonus | | Option Awards (2) | | Non-Equity Incentive Plan Compensation (3) | | Non-qualified Deferred Compensation Earnings (4) | | All Other Compensation (5) | | Total | | | | | | | | | | | | | | | | | | Laurans A. Mendelson | | 2018 | |
| $1,006,534 |
| |
| $— |
| |
| $— |
| |
| $3,996,236 |
| |
| $— |
| |
| $1,751,221 |
| |
| $6,753,991 |
| Chairman of the Board and | | 2017 | | 1,000,000 |
| | — |
| | — |
| | 2,616,277 |
| | — |
| | 1,675,943 |
| | 5,292,220 |
| Chief Executive Officer | | 2016 | | 1,000,000 |
| | — |
| | — |
| | 2,332,862 |
| | — |
| | 1,615,993 |
| | 4,948,855 |
| | | | | | | | | | | | | | | | | | Carlos L. Macau, Jr. | | 2018 | | 672,902 |
| | — |
| | 1,435,145 |
| | 1,355,792 |
| | — |
| | 681,678 |
| | 4,145,517 |
| Executive Vice President - | | 2017 | | 640,532 |
| | — |
| | 1,419,685 |
| | 929,607 |
| | — |
| | 552,765 |
| | 3,542,589 |
| Chief Financial Officer | | 2016 | | 609,937 |
| | — |
| | 467,585 |
| | 837,171 |
| | — |
| | 502,066 |
| | 2,416,759 |
| | | | | | | | | | | | | | | | | | Eric A. Mendelson | | 2018 | | 956,164 |
| | — |
| | 3,750,580 |
| | 1,926,621 |
| | — |
| | 1,157,897 |
| | 7,791,262 |
| Co-President, HEICO Corporation; | | 2017 | | 826,542 |
| | — |
| | 4,172,660 |
| | 1,182,086 |
| | — |
| | 876,955 |
| | 7,058,243 |
| President and Chief Executive | | 2016 | | 775,595 |
| | — |
| | 1,180,895 |
| | 1,064,546 |
| | — |
| | 823,828 |
| | 3,844,864 |
| Officer of the HEICO Flight | | | | |
| | |
| | |
| | |
| | |
| | |
| | |
| Support Group | | | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | | | | | | | | | | | | | | | | | Victor H. Mendelson | | 2018 | | 956,164 |
| | — |
| | 3,750,580 |
| | 1,926,621 |
| | — |
| | 1,159,116 |
| | 7,792,481 |
| Co-President, HEICO Corporation; | | 2017 | | 826,542 |
| | — |
| | 4,172,660 |
| | 1,182,086 |
| | — |
| | 876,982 |
| | 7,058,270 |
| President and Chief Executive | | 2016 | | 775,595 |
| | — |
| | 1,180,895 |
| | 1,064,546 |
| | — |
| | 825,338 |
| | 3,846,374 |
| Officer of the HEICO Electronic | | | | |
| | |
| | |
| | |
| | |
| | |
| | |
| Technologies Group | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Steven M. Walker (6) | | 2018 | | 301,189 |
| | 320,000 |
| | 162,147 |
| | — |
| | — |
| | 38,811 |
| | 822,147 |
| Chief Accounting Officer | | 2017 | | 272,000 |
| | 265,000 |
| | 162,896 |
| | — |
| | — |
| | 37,045 |
| | 736,941 |
| | | 2016 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
___________________
| Laurans A. Mendelson
Chairman of the Board and Chief Executive Officer | | | 2021 | | | $1,145,753 | | | $— | | | $— | | | $5,091,913 | | | $— | | | $2,793,865 | | | $9,031,531 | | | 2020 | | | 1,079,344 | | | — | | | — | | | — | | | — | | | 1,862,421 | | | 2,941,765 | | | 2019 | | | 1,071,526 | | | — | | | 3,387,970 | | | 3,926,470 | | | — | | | 1,818,538 | | | 10,204,504 | | | Carlos L. Macau, Jr.
Executive Vice President - Chief Financial Officer | | | 2021 | | | 708,458 | | | — | | | 2,264,500 | | | 916,838 | | | — | | | 784,836 | | | 4,674,632 | | | 2020 | | | 667,395 | | | — | | | — | | | — | | | — | | | 579,201 | | | 1,246,596 | | | 2019 | | | 708,789 | | | — | | | — | | | 1,295,741 | | | — | | | 679,527 | | | 2,684,057 | | | Eric A. Mendelson
Co-President, HEICO Corporation; President and Chief Executive Officer of the HEICO Flight Support Group | | | 2021 | | | 1,006,353 | | | — | | | 6,395,000 | | | 1,302,355 | | | — | | | 1,327,401 | | | 10,031,109 | | | 2020 | | | 948,024 | | | — | | | — | | | — | | | — | | | 816,623 | | | 1,764,647 | | | 2019 | | | 1,006,805 | | | — | | | — | | | 1,840,542 | | | — | | | 1,158,987 | | | 4,006,334 | | | Victor H. Mendelson
Co-President, HEICO Corporation; President and Chief Executive Officer of the HEICO Electronic Technologies Group | | | 2021 | | | 1,006,353 | | | — | | | 6,395,000 | | | 1,302,355 | | | — | | | 1,018,620 | | | 9,722,328 | | | 2020 | | | 948,024 | | | — | | | — | | | — | | | — | | | 717,655 | | | 1,665,679 | | | 2019 | | | 1,006,805 | | | — | | | — | | | 1,840,542 | | | — | | | 1,159,556 | | | 4,006,903 | | | Steven M. Walker
Chief Accounting Officer | | | 2021 | | | 321,670 | | | 275,000 | | | — | | | — | | | — | | | 44,023 | | | 640,693 | | | 2020 | | | 303,026 | | | 60,000 | | | 199,741 | | | — | | | — | | | 42,156 | | | 604,923 | | | 2019 | | | 321,780 | | | 320,000 | | | — | | | — | | | — | | | 40,804 | | | 682,584 | |
(1)
| | (1) | To help reduce the impact from the Pandemic, the Named Executive Officers’ Salaries reflect a 20% pay reduction from May 1, 2020 to January 31, 2021. Salary includes amounts deferred by the Named Executive Officer pursuant to the HEICO Corporation Leadership Compensation Plan, a non-qualified deferred compensation plan available to numerous eligible employees, officers and directors. For more information on this plan, see “Non-qualified Deferred Compensation,” which follows below within this Executive Compensation section. |
| | (2)
| Amounts stated represent the value of option awards granted to the Named Executive Officer based on the grant date fair value of these awards in fiscal 2018, 2017 and 2016, and are the amounts we will likely recognize as compensation expense over each award’s vesting period, which will likely differ from the actual value that may be realized by the Named Executive Officer. The fair values of the option awards were computed in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The assumptions used to value these awards are set forth in Note 9,11, Share-Based Compensation, of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended October 31, 2018.2021. |
| | (3)
| Represents amounts earned by achievement of performance goals during a specified performance period and consists of payments made under the HEICO Corporation 20122018 Incentive Compensation Plan (which was replaced in fiscal 2018 by the 2018 Plan) and the 2018 Plan(the “2018 Plan”) as described within “Grants of Plan-Based Awards,” which follows below within this Executive Compensation Section. |
| | (4)
| There were no above-market or preferential earnings on deferred compensation. |
| | (5)
| Amounts principally represent Company contributions to the HEICO Corporation Leadership Compensation Plan, which generally vest over a four-year period and are generally paid at retirement. See the following table titled “All Other Compensation” for an itemized disclosure of this compensation. |
| | | 29 | (6) | Mr. Walker became a named executive officer for fiscal 2017 and as a result we are permitted to omit compensation information for Mr. Walker for fiscal 2016. | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | All Other Compensation | Name | | Fiscal Year | | Director Fees | | Insurance Benefits (1) | | Company Contributions to HEICO Savings and Investment Plan (a defined contribution retirement plan) (2) | | Company Contributions to HEICO Corporation Leadership Compensation Plan (a deferred compensation plan) (3) | | Use of Company Car (4) | | Perquisites and Other Personal Benefits (5) | | Total | | | | | | | | | | | | | | | | | | Laurans A. Mendelson | | 2018 | |
| $213,612 |
| |
| $22,416 |
| |
| $13,650 |
| |
| $1,496,184 |
| |
| $5,359 |
| |
| $— |
| |
| $1,751,221 |
| | | 2017 | | 194,169 |
| | 21,517 |
| | 13,400 |
| | 1,440,000 |
| | 6,857 |
| | — |
| | 1,675,943 |
| | | 2016 | | 191,234 |
| | 20,368 |
| | 13,250 |
| | 1,382,000 |
| | 9,141 |
| | — |
| | 1,615,993 |
| | | | | | | | | | | | | | | | | | Carlos L. Macau, Jr. | | 2018 | | — |
| | 38,090 |
| | 13,650 |
| | 627,475 |
| | 2,463 |
| | — |
| | 681,678 |
| | | 2017 | | — |
| | 36,592 |
| | 13,400 |
| | 499,211 |
| | 3,562 |
| | — |
| | 552,765 |
| | | 2016 | | — |
| | 34,498 |
| | 13,250 |
| | 451,360 |
| | 2,958 |
| | — |
| | 502,066 |
| | | | | | | | | | | | | | | | | | Eric A. Mendelson | | 2018 | | 203,173 |
| | 43,149 |
| | 13,650 |
| | 891,659 |
| | 6,266 |
| | — |
| | 1,157,897 |
| | | 2017 | | 192,884 |
| | 40,623 |
| | 13,400 |
| | 622,287 |
| | 7,761 |
| | — |
| | 876,955 |
| | | 2016 | | 190,534 |
| | 38,438 |
| | 13,250 |
| | 573,948 |
| | 7,658 |
| | — |
| | 823,828 |
| | | | | | | | | | | | | | | | | | Victor H. Mendelson | | 2018 | | 204,373 |
| | 45,115 |
| | 13,650 |
| | 891,659 |
| | 4,319 |
| | — |
| | 1,159,116 |
| | | 2017 | | 192,884 |
| | 43,677 |
| | 13,400 |
| | 622,287 |
| | 4,734 |
| | — |
| | 876,982 |
| | | 2016 | | 191,734 |
| | 41,658 |
| | 13,250 |
| | 573,948 |
| | 4,748 |
| | — |
| | 825,338 |
| | | | | | | | | | | | | | | | | | Steven M. Walker | | 2018 | | — |
| | 16,135 |
| | 13,650 |
| | 9,026 |
| | — |
| | — |
| | 38,811 |
| | | 2017 | | — |
| | 15,505 |
| | 13,380 |
| | 8,160 |
| | — |
| | — |
| | 37,045 |
| | | 2016 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
TABLE OF CONTENTS ___________________
| Laurans A. Mendelson | | | 2021 | | | $212,649 | | | $28,062 | | | $14,400 | | | $2,534,207 | | | $4,547 | | | $— | | | $2,793,865 | | | 2020 | | | 199,000 | | | 26,423 | | | 14,150 | | | 1,618,511 | | | 4,337 | | | — | | | 1,862,421 | | | 2019 | | | 218,850 | | | 24,053 | | | 13,900 | | | 1,557,099 | | | 4,636 | | | — | | | 1,818,538 | | | Carlos L. Macau, Jr. | | | 2021 | | | — | | | 47,370 | | | 14,400 | | | 716,151 | | | 6,915 | | | — | | | 784,836 | | | 2020 | | | — | | | 44,654 | | | 14,150 | | | 513,102 | | | 7,295 | | | — | | | 579,201 | | | 2019 | | | — | | | 40,773 | | | 13,900 | | | 621,174 | | | 3,680 | | | — | | | 679,527 | | | Eric A. Mendelson | | | 2021 | | | 207,709 | | | 49,479 | | | 14,400 | | | 1,041,045 | | | 14,768 | | | — | | | 1,327,401 | | | 2020 | | | 191,920 | | | 48,070 | | | 14,150 | | | 554,555 | | | 7,928 | | | — | | | 816,623 | | | 2019 | | | 210,050 | | | 45,928 | | | 13,900 | | | 882,350 | | | 6,759 | | | — | | | 1,158,987 | | | Victor H. Mendelson | | | 2021 | | | 208,669 | | | 54,149 | | | 14,400 | | | 736,952 | | | 4,450 | | | — | | | 1,018,620 | | | 2020 | | | 193,120 | | | 51,526 | | | 14,150 | | | 454,555 | | | 4,304 | | | — | | | 717,655 | | | 2019 | | | 211,250 | | | 47,734 | | | 13,900 | | | 882,350 | | | 4,322 | | | — | | | 1,159,556 | | | Steven M. Walker | | | 2021 | | | — | | | 20,019 | | | 14,400 | | | 9,604 | | | — | | | — | | | 44,023 | | | 2020 | | | — | | | 18,879 | | | 14,150 | | | 9,127 | | | — | | | — | | | 42,156 | | | 2019 | | | — | | | 17,256 | | | 13,900 | | | 9,648 | | | — | | | — | | | 40,804 | |
| | (1)
| Annual life and medical insurance premiums paid by the Company. |
| | (2)
| Participation in the HEICO Savings and Investment Plan is available to substantially all U.S. employees of the Company. |
| | (3)
| For more information on the HEICO Corporation Leadership Compensation Plan, see “Non-qualified Deferred Compensation,” which follows below within this Executive Compensation section. |
| | (4)
| Personal use of Company’s vehicle provided to the Named Executive Officer. The Company reports the personal use of such vehicles as part of each Named Executive Officer’s compensation. |
| | (5)
| Our Named Executive Officers personally use the Company’s aircraft, facilities, and from time to time, use tickets for entertainment and other events for personal purposes, and receive occasional secretarial support with respect to personal matters. These perquisites and other personal benefits in aggregate, however, do not exceed $10,000 for any of our Named Executive Officers. |
In March 2018, our CEO, Laurans A. Mendelson, our Co-Presidents, Eric A. Mendelson and Victor H. Mendelson and our CFO, Carlos L. Macau, Jr. (in each case, the “Lessee”) each entered into a Time-Sharing Agreement with the Company which provides that each of them can lease, for personal or non-business purposes, an aircraft that is possessed and operated by or for the Company. Under these Agreements,agreements, each Lessee prepays the Company twice the aggregate incremental cost of each flight. The aggregate incremental cost, which is determined by applicable Federal Aviation Regulations consists of: fuel, oil, lubricants and other additives; travel expenses of the crew, including food, lodging and ground transportation; in-flight food and beverage expenses; hangar and tie-down costs away from the aircraft’s base of operations; insurance obtained for the specific flight; flight planning and weather contract services; passenger ground transportation; landing fees, airport taxes and similar assessments; and customs, foreign permit and similar fees directly related to the flight. The Company retains sole discretion to determine what flights may be scheduled by each Lessee and, under the Agreement,agreement, the Company’s prior planned use of the aircraft takes precedence over each Lessee’s non-business or personal business use. The arrangement helps to offset the cost of the aircraft when it is not being used by the Company. As there is no incremental cost to the Company for the use of the aircraft by the Lessees, no amount has been included in the Summary Compensation Table with respect to such usage. Occasionally, a spouse or other guest may accompany one of these executives when they are using corporate aircraft for business travel. As there is no incremental cost to the Company for the spouse or other guest accompanying the executive on a flight, no amount has been included in the Summary Compensation Table with respect to that usage.
30 | | | 2022 PROXY STATEMENT | | | | |
TABLE OF CONTENTS Grants of Plan-Based Awards
The 2018 Plan was approved by our Board of Directors and shareholders in fiscal 2018. The 2018 Plan authorizes the Compensation Committee of the Board of Directors to select participants, designate performance periods, authorize performance awards that may be earned by achievement of performance goals during the performance periods, and set the other terms of performance awards. The following table summarizes certain information with respect to grants of awards to the Named Executive Officers of the Company under the 2018 Plan for fiscal 2018. 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Grant Date | | Share Class (1) | | Payouts Under Non-Equity Incentive Plan Awards for Performance at Specified Levels (2) | | All Other Option Awards: Number of Securities Underlying Options (4) | | Exercise Price of Option Awards (5) | | Grant Date Closing Market Price | | Grant Date Fair Value of Option Awards (6) | Name | | | | Threshold | | Target | | Maximum | | Earned (3) | | | | | | | | | | | | | | | | | | | | | | | | | | Laurans A. Mendelson | | — | | — | |
| $1,270,500 |
| |
| $2,359,500 |
| |
| $3,448,500 |
| |
| $3,346,236 |
| | — |
| |
| $— |
| |
| $— |
| |
| $— |
| | | | | | | | | | | | | 650,000 |
| | | | | | | | | | | | | | | | | | | Total |
| | 3,996,236 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Carlos L. Macau, Jr. | | 3/16/2018 | | CA | | 514,767 |
| | 955,996 |
| | 1,397,226 |
| | 1,355,792 |
| | 62,500 |
| | 56.24 |
| | 56.24 |
| | 1,435,145 |
| | | | | | | | | | | | | | | | | | | | | | Eric A. Mendelson | | 3/16/2018 | | C | | 731,500 |
| | 1,358,500 |
| | 1,985,500 |
| | 1,926,621 |
| | 125,000 |
| | 70.66 |
| | 70.66 |
| | 3,750,580 |
| | | | | | | | | | | | | | | | | | | | | | Victor H. Mendelson | | 3/16/2018 | | C | | 731,500 |
| | 1,358,500 |
| | 1,985,500 |
| | 1,926,621 |
| | 125,000 |
| | 70.66 |
| | 70.66 |
| | 3,750,580 |
| | | | | | | | | | | | | | | | | | | | | | Steven M. Walker | | 6/11/2018 | | CA | | — |
| | — |
| | — |
| | — |
| | 7,500 |
| | 62.68 |
| | 62.68 |
| | 162,147 |
|
___________________
| Laurans A. Mendelson | | | — | | | — | | | $2,131,800 | | | $3,876,000 | | | $5,814,000 | | | $4,353,913 | | | — | | | $— | | | $— | | | $— | | | | | | | | | | | | | | | | | | | | | 738,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 5,091,913 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Carlos L. Macau, Jr. | | | 9/24/2021 | | | CA | | | 448,910 | | | 816,200 | | | 1,224,300 | | | 916,838 | | | 50,000 | | | 120.32 | | | 120.32 | | | 2,264,500 | | | Eric A. Mendelson | | | 9/24/2021 | | | C | | | 637,670 | | | 1,159,400 | | | 1,739,100 | | | 1,302,355 | | | 125,000 | | | 134.70 | | | 134.70 | | | 6,395,000 | | | Victor H. Mendelson | | | 9/24/2021 | | | C | | | 637,670 | | | 1,159,400 | | | 1,739,100 | | | 1,302,355 | | | 125,000 | | | 134.70 | | | 134.70 | | | 6,395,000 | | | Steven M. Walker | | | — | | | — | | | — | | | — | | | — | | | 275,000 | | | — | | | — | | | — | | | — | |
| | (1)
| “C” denotes HEICO Common Stock and “CA”CA” denotes HEICO Class A Common Stock and “C” denotes HEICO Common Stock. |
| | (2)
| These values represent the threshold, target, and maximum payouts under the 2018 Plan. The actual earned bonus awards under the 2018 Plan were paid at 141.8% of the targeted levels and in accordance with the 2018 Plan because the Company exceeded its targeted net income. Please refer to the “Bonus” section of the Compensation Discussion and Analysis contained herein for further information about the 2018 Plan. |
| | (3)
| As previously mentioned, on page 25, Laurans A. Mendelson also received a $650,000$738,000 cash incentive award under the 2018 Plan as a result of HEICO'sHEICO’s net income growth in fiscal 2018the six months ended October 21, 2021 as compared to fiscal 2017.the six months ended October 31, 2020. |
| | (4)
| The right of the holder to exercise the options vests at the rate of 20% per year over a period of five years from the grant date. All share information has been adjusted retrospectively to reflect the 5-for-4 stock split effected in June 2018. |
| | (5)
| The fiscal 20182021 option awards were granted under the 2018 Plan which defines the exercise price as the closing sale price on the date of grant. |
| | (6)
| Represents the grant date fair value of option awards granted to the Named Executive Officer in fiscal 2018.2021. See Note (2) to the Summary Compensation Table above for additional information on how the fair values were computed. |
TABLE OF CONTENTS Outstanding Equity Awards at Fiscal 20182021 Year-End The following table summarizes information regarding equity-based awards held by our Named Executive Officers as of October 31, 2018.2021. Information has been adjusted as necessary for all stock splits. All unexercisable options are subject to a vesting schedule that provides for vesting at the rate of 20% per year over the first five years following the option grant date. | | | | | | | | | | | | | | | | | | | | Share Class (1) | | Option Grant Date | | Number of Securities Underlying Unexercised Options | | Option Exercise Price | | Option Expiration Date | Name | | | | Exercisable | | Unexercisable | | | | | | | | | | | | | | | | Laurans A. Mendelson | | — | | — | | — |
| | — |
| | — |
| | — | | | | | | | | | | | | | | Carlos L. Macau, Jr. | | CA | | 6/1/2012 | | 122,070 |
| | — |
| |
| $12.80 |
| | 6/1/2022 | | | CA | | 6/18/2012 | | 30,518 |
| | — |
| |
| $12.81 |
| | 6/18/2022 | | | CA | | 6/10/2013 | | 61,036 |
| | — |
| |
| $15.45 |
| | 6/10/2023 | | | CA | | 6/8/2015 | | 29,297 |
| | 19,532 |
| |
| $24.91 |
| | 6/8/2025 | | | CA | | 12/14/2015 | | 19,531 |
| | 29,298 |
| |
| $22.20 |
| | 12/14/2025 | | | CA | | 3/17/2017 | | 19,531 |
| | 78,125 |
| |
| $38.37 |
| | 3/17/2027 | | | CA | | 3/16/2018 | | — |
| | 62,500 |
| |
| $56.24 |
| | 3/16/2028 | | | | | | | | | | | | | | Eric A. Mendelson | | C | | 9/13/2010 | | 381,470 |
| | — |
| |
| $10.98 |
| | 9/13/2020 | | | C | | 9/12/2011 | | 305,176 |
| | — |
| |
| $15.94 |
| | 9/12/2021 | | | C | | 6/10/2013 | | 122,070 |
| | — |
| |
| $21.41 |
| | 6/10/2023 | | | C | | 6/8/2015 | | 58,593 |
| | 39,063 |
| |
| $29.67 |
| | 6/8/2025 | | | C | | 12/14/2015 | | 39,062 |
| | 58,594 |
| |
| $24.95 |
| | 12/14/2025 | | | C | | 3/17/2017 | | 39,062 |
| | 156,251 |
| |
| $44.96 |
| | 3/17/2027 | | | C | | 3/16/2018 | | — |
| | 125,000 |
| |
| $70.66 |
| | 3/16/2028 | | | CA | | 6/10/2013 | | 122,070 |
| | — |
| |
| $15.45 |
| | 6/10/2023 | | | | | | | | | | | | | | Victor H. Mendelson | | C | | 9/13/2010 | | 381,470 |
| | — |
| |
| $10.98 |
| | 9/13/2020 | | | C | | 9/12/2011 | | 305,176 |
| | — |
| |
| $15.94 |
| | 9/12/2021 | | | C | | 6/10/2013 | | 122,070 |
| | — |
| |
| $21.41 |
| | 6/10/2023 | | | C | | 6/8/2015 | | 58,593 |
| | 39,063 |
| |
| $29.67 |
| | 6/8/2025 | | | C | | 12/14/2015 | | 39,062 |
| | 58,594 |
| |
| $24.95 |
| | 12/14/2025 | | | C | | 3/17/2017 | | 39,062 |
| | 156,251 |
| |
| $44.96 |
| | 3/17/2027 | | | C | | 3/16/2018 | | — |
| | 125,000 |
| |
| $70.66 |
| | 3/16/2028 | | | CA | | 6/10/2013 | | 122,070 |
| | — |
| |
| $15.45 |
| | 6/10/2023 | | | | | | | | | | | | | | Steven M. Walker | | CA | | 3/28/2011 | | 6,575 |
| | — |
| |
| $11.26 |
| | 3/28/2021 | | | CA | | 9/14/2012 | | 12,208 |
| | — |
| |
| $12.63 |
| | 9/14/2022 | | | CA | | 9/23/2013 | | 12,208 |
| | — |
| |
| $20.89 |
| | 9/23/2023 | | | CA | | 6/8/2015 | | 5,859 |
| | 3,907 |
| |
| $24.91 |
| | 6/8/2025 | | | CA | | 12/12/2016 | | 2,343 |
| | 9,376 |
| |
| $34.74 |
| | 12/12/2026 | | | CA | | 6/11/2018 | | — |
| | 7,500 |
| |
| $62.68 |
| | 6/11/2028 |
__________________
| Laurans A. Mendelson | | | C | | | 3/15/2019 | | | 40,000 | | | 60,000 | | | $91.13 | | | 3/15/2029 | | | Carlos L. Macau, Jr. | | | CA | | | 6/10/2013 | | | 61,036 | | | — | | | $15.45 | | | 6/10/2023 | | | CA | | | 6/8/2015 | | | 48,829 | | | — | | | $24.91 | | | 6/8/2025 | | | CA | | | 12/14/2015 | | | 48,829 | | | — | | | $22.20 | | | 12/14/2025 | | | CA | | | 3/17/2017 | | | 78,124 | | | 19,532 | | | $38.37 | | | 3/17/2027 | | | CA | | | 3/16/2018 | | | 37,500 | | | 25,000 | | | $56.24 | | | 3/16/2028 | | | CA | | | 9/24/2021 | | | — | | | 50,000 | | | $120.32 | | | 9/24/2031 | | | Eric A. Mendelson | | | C | | | 6/10/2013 | | | 122,070 | | | — | | | $21.41 | | | 6/10/2023 | | | C | | | 6/8/2015 | | | 97,656 | | | — | | | $29.67 | | | 6/8/2025 | | | C | | | 12/14/2015 | | | 97,656 | | | — | | | $24.95 | | | 12/14/2025 | | | C | | | 3/17/2017 | | | 156,250 | | | 39,063 | | | $44.96 | | | 3/17/2027 | | | C | | | 3/16/2018 | | | 75,000 | | | 50,000 | | | $70.66 | | | 3/16/2028 | | | C | | | 9/24/2021 | | | — | | | 125,000 | | | $134.70 | | | 9/24/2031 | | | CA | | | 6/10/2013 | | | 122,070 | | | — | | | $15.45 | | | 6/10/2023 | | | Victor H. Mendelson | | | C | | | 6/10/2013 | | | 122,070 | | | — | | | $21.41 | | | 6/10/2023 | | | C | | | 6/8/2015 | | | 97,656 | | | — | | | $29.67 | | | 6/8/2025 | | | C | | | 12/14/2015 | | | 97,656 | | | — | | | $24.95 | | | 12/14/2025 | | | C | | | 3/17/2017 | | | 156,250 | | | 39,063 | | | $44.96 | | | 3/17/2027 | | | C | | | 3/16/2018 | | | 75,000 | | | 50,000 | | | $70.66 | | | 3/16/2028 | | | C | | | 9/24/2021 | | | — | | | 125,000 | | | $134.70 | | | 9/24/2031 | | | CA | | | 6/10/2013 | | | 122,070 | | | — | | | $15.45 | | | 6/10/2023 | | | Steven M. Walker | | | CA | | | 9/23/2013 | | | 12,208 | | | — | | | $20.89 | | | 9/23/2023 | | | CA | | | 6/8/2015 | | | 9,766 | | | — | | | $24.91 | | | 6/8/2025 | | | CA | | | 12/12/2016 | | | 9,375 | | | 2,344 | | | $34.74 | | | 12/12/2026 | | | CA | | | 6/11/2018 | | | 4,500 | | | 3,000 | | | $62.68 | | | 6/11/2028 | | | CA | | | 12/13/2019 | | | 1,300 | | | 5,200 | | | $97.00 | | | 12/13/2029 | |
| | (1)
| “C” denotes HEICO Common Stock and “CA” denotes HEICO Class A Common Stock. |
32 | | | 2022 PROXY STATEMENT | | | | |
TABLE OF CONTENTS Option Exercises During Last Fiscal Year The following table provides information concerning stock options exercised duringDuring fiscal 2018 by our2021, none of the Named Executive Officers. Information has been adjusted as necessary for allOfficers exercised stock dividends and stock splits.options. | | | | | | | | | | | | | | | Option Awards | Name | | Share Class (1) | | Number of Shares Acquired on Exercise | | Value Realized on Exercise (2) | | | | | | | | Laurans A. Mendelson | | — | | — |
| |
| $— |
| | | | | | | | Carlos L. Macau, Jr. | | — | | — |
| | — |
| | | | | | | | Eric A. Mendelson | | C | | 476,838 |
| | 30,409,987 |
| | | | | | | | Victor H. Mendelson | | C | | 476,838 |
| | 30,409,987 |
| | | | | | | | Steven M. Walker | | — | | — |
| | — |
|
__________________
| | (1) | “C” denotes HEICO Common Stock. |
| | (2) | Value realized is equal to the fair market value of the Company’s common stock on the exercise date, less the exercise price, multiplied by the number of shares acquired. |
Non-qualified Deferred Compensation The HEICO Corporation Leadership Compensation Plan (“LCP”) was established in fiscal 2006 and is a non-qualified deferred compensation plan that conforms to Section 409A of the Internal Revenue Code. The LCP provides our eligible employees, officers, and directors the opportunity to voluntarily defer base salary, bonus payments, commissions, long-term incentive awards and directorsdirector fees, as applicable, on a pre-tax basis. We match 50% of the first 6% of base salary deferred by each participant. While we have no obligation to do so, the LCP also provides us the opportunity to make discretionary contributions to a participant’s account. The discretionary contributions generally vest over a four-year period and are generally paid at retirement.
We also sponsor another non-qualified deferred compensation plan (“DCP”), which was available to directors, officers and certain other employees, who elected to defer a portion of their compensation through December 31, 2004. Amounts deferred were immediately vested and invested in individually-directed investment accounts. Earnings on such investment accounts, which are maintained by a trustee, accrue to the benefit of the individual, and are included in the column titled “Aggregate Earnings in Last Fiscal Year” in the table below. We make no contributions to this plan.
| | | | | | | | | | | | | | | | | | | | | | | | Name | | Plan | | Executive Contributions in Last Fiscal Year | | Registrant Contributions in Last Fiscal Year (1) | | Aggregate Earnings in Last Fiscal Year (2) | | Aggregate Withdrawals/ Distributions | | Aggregate Balance at Last Fiscal Year End (3) | | | | | | | | | | | | | | Laurans A. Mendelson | | LCP | |
| $60,367 |
| |
| $1,496,184 |
| |
| $45,099 |
| |
| ($157,242 | ) | |
| $21,706,969 |
| | | DCP | | — |
| | — |
| | 47,577 |
| | — |
| | 4,544,593 |
| | | Total | | 60,367 |
| | 1,496,184 |
| | 92,676 |
| | (157,242 | ) | | 26,251,562 |
| | | | | | | | | | | | | | Carlos L. Macau, Jr. | | LCP | | 379,305 |
| | 627,475 |
| | 40,136 |
| | (233,234 | ) | | 4,645,008 |
| | | | | | | | | | | | | | Eric A. Mendelson | | LCP | | 172,002 |
| | 891,659 |
| | 62,543 |
| | — |
| | 9,578,462 |
| | | | | | | | | | | | | | Victor H. Mendelson | | LCP | | 171,914 |
| | 891,659 |
| | (59,221 | ) | | — |
| | 8,450,050 |
| | | | | | | | | | | | | | Steven M. Walker | | LCP | | 62,088 |
| | 9,026 |
| | 35,522 |
| | (61,690 | ) | | 1,159,697 |
|
__________________
| Laurans A. Mendelson | | | $68,414 | | | $2,534,207 | | | $12,078,958 | | | $— | | | $46,410,181 | | | Carlos L. Macau, Jr. | | | 225,670 | | | 716,151 | | | 2,550,256 | | | (711,193) | | | 10,079,230 | | | Eric A. Mendelson | | | 164,315 | | | 1,041,045 | | | 5,549,122 | | | — | | | 18,487,350 | | | Victor H. Mendelson | | | 164,315 | | | 736,952 | | | 3,806,033 | | | — | | | 16,587,258 | | | Steven M. Walker | | | 65,512 | | | 9,604 | | | 138,848 | | | (65,973) | | | 1,389,639 | |
| | (1)
| Includes discretionary contributions of $1,466,000, $607,296, $862,986$2,500,000, $695,000, $1,011,000 and $862,986$706,907 to Laurans A. Mendelson, Carlos L. Macau, Jr., Eric A. Mendelson and Victor H. Mendelson, respectively. Amounts also include matching contributions of $30,184, $20,179, $28,673, $28,673,$34,207, $21,151, $30,045, $30,045, and $9,026,$9,604, to Laurans A. Mendelson, Carlos L. Macau, Jr., Eric A. Mendelson, Victor H. Mendelson, and Steven M. Walker, respectively. The aggregate of these contributions is also reported in the column titled “Company Contributions to HEICO Corporation Leadership Compensation Plan” in the “All Other Compensation” table which supplements the “Summary Compensation Table.” |
| | (2)
| These amounts are not “above-market” or “preferential earnings” and therefore are not reported in the “Summary Compensation Table.” The earnings in the LCP for each executive officer reflect investment returns that were generated from self-directed investments by the executive officers of all amounts in the plan held for those executive officers, including contributions by both the Company and the executive officers in the last fiscal year and prior years. All earnings in the DCP for each executive officer reflect investment returns on self-directed investments of compensation deferred into the DCP by each executive officer in prior years. We have never contributed to the DCP and no further deferrals may be made by executive officers to the DCP. |
| | (3)
| Of these aggregate balances, which reflect any aggregate withdrawals/distributions, the following amounts were reported as compensation to the Named Executive Officers in the Summary Compensation Tables in our previous proxy statements beginning with the fiscal 2007 proxy statement: Laurans A. Mendelson $11,762,539;$16,623,919; Carlos L. Macau, Jr. $2,724,175;$4,528,220; Eric A. Mendelson $5,339,009;$8,189,347; Victor H. Mendelson $4,836,758$7,578,100 and Steven M. Walker $61,860.$214,334. |
TABLE OF CONTENTS Potential Payments Upon Termination or Change in Control As of October 31, 2018,2021, the Company had the following lump sum payment obligations, under the LCP and DCP as described above, to its Named Executive Officers upon a change in control or termination: Laurans A. Mendelson $26,251,562;$46,410,181; Carlos L. Macau, Jr. $3,753,329;$8,868,240; Eric A. Mendelson $8,463,186$18,487,350 and Victor H. Mendelson $7,305,090.$15,326,279. As of October 31, 2018,2021, the Company'sCompany’s payment obligation under the LCP to Steven M. Walker upon a change in control was $0 and upon termination was $1,159,697. $1,389,639.
The unexercisable (unvested) options held by the Named Executive Officers as detailed in “Outstanding Equity Awards at Fiscal 20182021 Year-End” would become immediately vested and exercisable upon (i) a change in control of the Company, (ii) the liquidation or dissolution of the Company, or (iii) any reorganization, merger, consolidation or other form of corporate transaction in which the Company does not survive or the shares are exchanged for or converted into cash or securities issued by another entity, or an affiliate of such successor or acquiring entity, unless the successor or acquiring entity, or an affiliate thereof, assumes the option or substitutes an equivalent option or right pursuant to Section 10(c) of the Company'sCompany’s 2018 Incentive Compensation Plan, (each, an
"Acceleration Event" “Acceleration Event”). As of October 31, 2018,2021, the value of this acceleration to the Named Executive Officers upon an Acceleration Event was: EricLaurans A. Mendelson $13,285,393, Victor H. Mendelson $13,285,393,$2,895,600, Carlos L. Macau, Jr. $4,979,456$3,709,339, Eric A. Mendelson $7,711,469, Victor H. Mendelson $7,711,469 and Steven M. Walker $492,249.$551,299. The value of the accelerated vesting of the unexercisable options was calculated by aggregating the difference between the closing price of the applicable share class as of October 31, 20182021 and the exercise price of such unexercisable option multiplied by the number of options for the applicable share class.
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the total annual compensation of our employees and the total annual compensation of our Chairman of the Board and Chief Executive Officer, Laurans A. Mendelson. As of August 31, 2018,2021, our employee population, excluding Mr. Mendelson, consisted of approximately 5,2735,497 individuals, of which approximately 3,9324,392 or 75%80% were located in the United States (“U.S.”). This population consisted of both domestic and foreign full time, part time and temporary employees.
To identify our median employee, we used a consistently applied compensation measure of total gross wages from January 1, 20182021 to August 31, 2018.2021. Total gross wages reflects a wide variety of pay items, including base wages, time-related bonuses (such as overtime, shift premiums, holiday bonuses), vacation pay, performance bonuses, stock option exercises and other benefits and allowances. We did not make cost of living adjustments when computing our employees' total gross wages. Additionally, we converted the gross wages paid to non-U.S. employees in local currency to U.S. dollars using the applicable average exchange rate for the period of January 1, 20182021 to August 31, 2018. 2021.
To calculate the annual total compensation of our median employee, we identified and calculated the elements of such employee’s fiscal 20182021 compensation in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. Based on the aforementioned methodology, we determined that the fiscal 20182021 median total annual compensation of our median employee was $58,276.$63,320. As reported in the Summary Compensation Table, the fiscal 20182021 annual total compensation for Mr. Mendelson was $6,753,991,$9,031,531, resulting in a pay ratio of 116:143:1. Our pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
34 | | | 2022 PROXY STATEMENT | | | | |
TABLE OF CONTENTS ADVISORY VOTE ON EXECUTIVE COMPENSATION
(Proposal No. 2) Pursuant toUnder the Dodd-Frank Wall Street Reform and Consumer Protection Act, theHEICO’s shareholders of HEICO may cast an advisory and non-binding vote at the Annual Meeting in relation to the compensation of our Named Executive Officers as disclosed in this proxy statement in accordance with Section 14A of the Exchange Act. The Company's practice, which wasAs approved by itsour shareholders at the 2017 Annual Meeting, is towe conduct this non-binding vote on an annual basis.
This proposal is set forth in the following resolution: RESOLVED, that theHEICO Corporation’s shareholders of HEICO Corporation approve, on an advisory basis, the compensation of itsCompany’s named executive officers,officers’ compensation, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables, and any related material disclosed in this proxy statement. As described more fully in the Compensation Discussion and Analysis, the Compensation Committee believes that our compensation policies, which set forthprovide clear and simple objectives, will yield the best results. Our objectives are: | | 1.
| Compensate our executives fairly; |
| | 2.
| Motivate our executives to honestly and ethically grow our Company’s profits, cash generation, revenues, and market capitalization over time, not just in the short term; and |
| | 3.
| Retain our executives and have the ability to attract new ones as needed. |
Our executive compensation program’s success is evidenced by the Company’s strong growth and financial performance for over 2831 years, commencing in 1990 when the current management team took over the Company’s operations. Our sales from continuing operations have grown from just over $26 million in fiscal 1990 to a record of approximately $1.8$1.9 billion in fiscal 2018,2021, representing a compound annual growth rate of approximately 16%15%. During the same period, we improved our net income from just below $2 million to a record of approximately $259$304 million, representing a compound annual growth rate of approximately 19%18%. We also note that, during this time, our shareholders have benefited significantly, with a $100,000 investment in HEICO at the time current management took over operation of the business becoming worth approximately $33.9$60.0 million as of October 31, 2018, representing a2021, which is an approximately 23% compound annual growth raterate. Further, our executive officers have acted in good faith and insisted, without any external requests, on significant salary reductions during much of approximately 23%.the Pandemic until the business outlook improved. Our executive compensation program is structured to align the interests of our executive officers (some of whom are significant Company shareholders) with those of our other shareholders and to fairly reward them for creating shareholder value and for achieving our business objectives. The Compensation Discussion and Analysis set forth on pages 1622 - 2928 of this Proxy Statement explain our successful compensation philosophy in great detail. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"“FOR” APPROVAL OF THE COMPENSATION FOR OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT IN ACCORDANCE WITH SECURITIES AND EXCHANGE COMMISSION RULES.
TABLE OF CONTENTS FINANCE/AUDIT COMMITTEE REPORT The following report of the Finance/Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent we specifically incorporate the report by reference in any such filing. FINANCE/AUDIT COMMITTEE REPORT
The Finance/Audit Committee (the “Audit Committee”) of the Board of Directors is composed entirely of five non-employee and independent directors. The Board of Directors has determined that each member of the Audit Committee is “financially literate” and “independent” in accordance with the New York Stock Exchange’s listing standards and that Mr. Schwitter is an “audit committee financial expert,” as defined by the Securities and Exchange Commission.Commission (the “Commission”). The purpose of the Audit CommitteeCommittee’s purpose is to assist the Board of Directors in fulfilling its responsibility for the oversight ofoverseeing the quality and integrity of the Company’s accounting, auditing, internal control and financial reporting practices of the Company and such other duties as directed by the Board of Directors. The Audit Committee’s full responsibilities of the Audit Committee are set forth in its formal written charter, which is available on HEICO’s website at www.heico.com. Management is responsible for the Company’s financial reporting process, including establishing and maintaining its internal control over financial reporting, and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The Company’s independent registered public accounting firm, Deloitte & Touche LLP, is responsible for performing an audit in accordance with standards of the Public Company Accounting Oversight Board (the “PCAOB”) and for expressing an opinion as to whether those financial statements are, in all material respects, presented fairly in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP is also responsible for expressing an opinion on the effectiveness of the Company’s internal control over financial reporting based on its audit. The Audit Committee is responsible for monitoring and reviewing these processes, acting in an oversight capacity relying on the information provided to it and on the representations made by management and the independent registered public accounting firm. The internal auditors are responsible to the Audit Committee and the Board for testing the financial accounting and reporting control systems and such other matters as the Audit Committee and Board determine. As part of fulfilling its responsibilities, the Audit Committee reviewed and discussed with management the Company’s audited financial statements as of and for the year ended October 31, 20182021 and discussed with Deloitte & Touche LLP the matters required to be discussed by the applicable requirements of the PCAOB Auditing Standard No. 1301, "Communications with Audit Committees," as issued byand the PCAOB.Commission. The Audit Committee received the written disclosures and the letter from Deloitte & Touche LLP required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence. The Audit Committee discussed and considered the independence of Deloitte & Touche LLP with representatives of Deloitte & Touche LLP, reviewing as necessary all relationships and services which might bear on the objectivity of Deloitte & Touche LLP. Deloitte & Touche LLP was provided with full access to the Audit Committee to meet privately and was encouraged to discuss any matter it desired with the Audit Committee or the full Board of Directors. Based upon the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the year ended October 31, 2018,2021, for filing with the Securities and Exchange Commission. Respectfully Submitted by the Finance/Audit Committee of the Company’s Board of Directors: Frank J. Schwitter (Chairman), Adolfo Henriques, Mark H. Hildebrandt, Julie Neitzel and Dr. Alan Schriesheim. 36 | | | 2022 PROXY STATEMENT | | | | |
TABLE OF CONTENTS RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal No. 3) The Finance/Audit Committee has selected the firm of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending October 31, 2019.2022. Deloitte & Touche LLP has served as our independent registered public accounting firm since 1990. Shareholder ratification of this selection is not required by our By-laws or otherwise. However, the Finance/Audit Committee and full Board of Directors are requesting that shareholders ratify this appointment as a means of soliciting shareholders’ opinions and as a matter of good corporate governance. If the shareholders do not ratify the selection, the Finance/Audit Committee will reconsider whether or not to retain Deloitte & Touche LLP. Even if the selection is ratified, the Finance/Audit Committee, at its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines such change would be in the best interests of the Company and its shareholders. One or more representatives of Deloitte & Touche LLP are expected to be present at the Annual Meeting on March 15, 2019.18, 2022. The representatives will have the opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions from shareholders. ��
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING OCTOBER 31, 2019.2022. Principal Accounting Firm Fees The following table presents the aggregate fees billed to the Company by Deloitte & Touche LLP during the fiscal years ended October 31, 20182021 and 2017:2020: | | | | | | | | | | | | 2018 | | 2017 | Audit fees (1) | |
| $3,125,431 |
| |
| $2,788,000 |
| Audit-related fees (2) | | 20,766 |
| | — |
| Tax fees (3) | | 213,300 |
| | 48,521 |
| All other fees | | — |
| | — |
| Total fees | |
| $3,359,497 |
| |
| $2,836,521 |
|
_________________
| Audit fees(1) | | | $3,192,000 | | | $3,106,971 | | | Audit-related fees | | | — | | | — | | | Tax fees(2) | | | 154,081 | | | 174,775 | | | All other fees | | | — | | | — | | | | | | $3,346,081 | | | $3,281,746 | |
| | (1)
| Audit fees consist of fees billed for services rendered for the annual audit of our consolidated financial statements, the audit of the effectiveness of our internal control over financial reporting, the review of our condensed consolidated financial statements included in our quarterly reports on Form 10-Q, and services that are normally provided in connection with statutory and regulatory filings or engagements. |
| | (2) | Audit-related fees consist of fees billed for due diligence services performed during fiscal 2018. |
| | (3) | Tax fees consist of fees billed for tax advisory services principally pertaining to certain transfer pricing analyses. |
Pre-approval of Services Provided by the Independent Registered Public Accounting Firm The Finance/Audit Committee has adopted a policy to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. The Finance/Audit Committee will consider annually and, if appropriate, approve the scope of the audit services to be performed during the fiscal year as outlined in an engagement letter proposed by the independent registered public accounting firm. For permissible non-audit services, management will submit to the Finance/Audit Committee, at least annually, a list of services and a corresponding budget estimate that it recommends the Finance/Audit Committee engage the independent registered public accounting firm to provide. To facilitate the prompt handling of certain unexpected matters, the Finance/Audit Committee delegates to its Chairman the authority to approve in advance all audit and non-audit services below $10,000 to be provided by the independent registered public accounting firm if presented to the full Finance/Audit Committee at the next regularly scheduled meeting. The independent registered public accounting firm and management will routinely inform the Finance/Audit Committee as to the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval policy and the fees incurred for the services performed to date. All services provided by Deloitte & Touche LLP for fiscal 20182021 and 20172020 were pre-approved by the Finance/Audit Committee. TABLE OF CONTENTS CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Finance/Audit Committee advises the Board of Directors regarding potential transactions between the Company and any of its directors or officers, and reviews them under a standard that the terms of any such transaction should be no less favorable to the Company than would be obtained from an unrelated party. The Finance/Audit Committee and the Board of Directors have not adopted specific procedures for such reviews and consider each transaction in light of the specific facts and circumstances presented. Certain subsidiaries of Lufthansa, for which Mr. Mayrhuber, a director ofEric A. Mendelson’s son, David Mendelson, is employed by the Company and former Chairmanreceived total compensation of approximately $190,000 during fiscal 2021. During fiscal 2021, David Mendelson served as the Company's Director of Strategic Development. Eric A. Mendelson is a director and executive officer of the Supervisory Board of Deutsche Lufthansa AG (who passed away in December 2018), are customers of certain subsidiaries of HEICO. Purchases made by such subsidiaries of Lufthansa represented in excess of 2%, but less than 5% of HEICO’s consolidated net sales of approximately $1.8 billion for the fiscal year ended October 31, 2018. We expect this customer relationship to continue in the current fiscal year. We believe that the terms of transactions with Lufthansa are no less favorable to us than would have been obtained from an unrelated party and that Mr. Mayrhuber was not afforded any special benefits during fiscal 2018 as a result of our transactions with Lufthansa.Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of reports of ownership, reports of changes of ownership and written representations under Section 16(a) of the Securities Exchange Act of 1934, which were furnished to the Company during or with respect to fiscal 2018 by persons who were, at any time during fiscal 2018, directors or executive officers of the Company or beneficial owners of more than 10% of the outstanding shares of Common Stock or Class A Common Stock, no such person failed to file on a timely basis any report required by such section during fiscal 2018 with the following exception. On February 13, 2018, a delinquent Form 4 was filed for Dr. Alan Schriesheim to report one transaction.
SHAREHOLDER PROPOSALS AND NOMINATIONS Any shareholder who wishes to present a proposal for action at our next Annual Meeting of shareholders tentatively scheduled for March 20, 2020,17, 2023, or to nominate a director candidate for our Board of Directors, must submit such proposal or nomination in writing to our Corporate Secretary at HEICO Corporation, 3000 Taft Street, Hollywood, Florida 33021. The proposal or nomination should comply with the time period and information requirements as set forth in our By-laws relating to shareholder business or shareholder nominations, respectively. To be eligible to present a proposal or nomination at the 20202023 Annual Meeting, such proposal or nomination must be properly submitted to us as set forth in our By-laws and not earlier than December 21, 201917, 2022 nor later than January 21, 2020.16, 2023. These requirements are seperateseparate from the SEC'sSEC’s requirements that a stockholder must meet in order to
have a proposal included in our proxy statement. Shareholders interested in submitting a proposal for inclusion in the Proxy Statement for the 20202023 Annual Meeting of Shareholders may do so by following the procedures prescribed in SEC Rule 14a-8. To be eligible for inclusion, shareholder proposals must be received by our Corporate Secretary at the herein above address no later than October 14, 2019.12, 2022.
COMMUNICATION WITH THE BOARD OF DIRECTORS Any HEICO shareholder or other interested party who wishes to communicate with our Board of Directors, a committee of the Board, the non-management directors as a group, the presiding director or any individual member of the Board, may send correspondence to our Corporate Secretary at HEICO Corporation, 3000 Taft Street, Hollywood, Florida 33021. Our Corporate Secretary will compile and submit on a periodic basis all shareholder and other interested parties’ correspondence to the entire Board of Directors, or, if and as designated in the communication, to a committee of the Board, the non-management directors as a group, the presiding director or an individual Board member.
38 | | | 2022 PROXY STATEMENT | | | | |
TABLE OF CONTENTS DELINQUENT SECTION 16(a) REPORTS Based solely upon a review of reports of ownership, reports of changes of ownership and written representations under Section 16(a) of the Securities Exchange Act of 1934, which were furnished to the Company during or with respect to fiscal 2021 by persons who were, at any time during fiscal 2021, directors or executive officers of the Company or beneficial owners of more than 10% of the outstanding shares of Common Stock or Class A Common Stock, no such person failed to file on a timely basis any report required by such section during fiscal 2021 with the following exception. On January 6, 2022, a Form 4 was filed for Dr. Alan Schriesheim that included one delinquent gift transaction. SHAREHOLDERS SHARING THE SAME ADDRESS We have adopted a procedure called “householding” in accordance with rules approved by the Securities and Exchange Commission. Under this procedure, a single copy of the Annual Report andNotice of Internet Availability of Proxy Materials or proxy statementmaterials will be sent to any household at which two or more shareholders reside if they appear to be members of the same family, unless one of the shareholders at that address notifies us that they wish to receive individual copies. Shareholders who participate in householding will continue to receive separate proxy cards. Householding will not affect dividend mailings in any way. This procedure reduces our printing costs and mailing fees. Certain of our shareholders whose shares are held in street name and who have consented to householding will receive only one Notice or set of proxy materials per household. If a single copy of the Annual Report and proxy statement was delivered to an address that you share with another shareholder and you wishwould like to receive a separate copyNotice or set of proxy materials in the 2018 Annual Report or this proxy statement,future, or if you do not wish to participate in householding and prefer to receive separate copies of future materials, or if you are sharing an address with another shareholder and areyour household is currently receiving multiple copies of annual reports or proxy statementsthe same items and you would like to request delivery ofreceive only a single copy of annual reports or proxy statements,at your address in the future, please call us at (954) 987-4000 or write to our Corporate Secretary at HEICO Corporation, 3000 Taft Street, Hollywood, Florida 33021. If you would like to receive a copy of our 2021 Annual Report on Form 10-K or this Proxy Statement, please call us at (954) 987-4000 or write to our Corporate Secretary at HEICO Corporation, 3000 Taft Street, Hollywood, Florida 33021, and we will send a copy to you without charge. Please note, however, that if you wish to receive a paper proxy card or other proxy materials for the purpose of the Annual Meeting, you should follow the instructions included in the Notice of Internet Availability of Proxy Materials. GENERAL AND OTHER MATTERS Neither HEICO nor the members of its Board of Directors intend to bring before the Annual Meeting any matters other than those referred to in the accompanying Notice of Annual Meeting of Shareholders. They have no present knowledge that any other matters will be presented to be acted on pursuant to your proxy. However, if any other matters properly come before the Annual Meeting, the persons whose names appear in the enclosed form of proxy will have the discretionary authority to vote the proxy in accordance with their judgment. TABLE OF CONTENTS ANNEX A - Non-GAAP Financial Measure | Net income attributable to HEICO | | | $86,062 | | | $62,327 | | | Plus: Depreciation and amortization | | | 24,203 | | | 23,343 | | | Plus: Net income attributable to noncontrolling interests | | | 7,294 | | | 5,253 | | | Plus: Interest expense | | | 1,037 | | | 2,515 | | | Plus: Income tax expense | | | 20,900 | | | 19,400 | | | EBITDA | | | $ 139,496 | | | $ 112,838 | |
| Net income attributable to HEICO | | | $ 304,220 | | | $ 313,984 | | | Plus: Depreciation and amortization | | | 93,019 | | | 88,561 | | | Plus: Net income attributable to noncontrolling interests | | | 25,538 | | | 21,871 | | | Plus: Interest expense | | | 7,285 | | | 13,159 | | | Plus: Income tax expense | | | 57,300 | | | 29,000 | | | EBITDA | | | $ 487,362 | | | $ 466,575 | |
| Net income attributable to HEICO | | | $ 162,951 | | | $ 116,643 | | | Plus: Depreciation and amortization | | | 47,100 | | | 45,285 | | | Plus: Net income attributable to noncontrolling interests | | | 14,088 | | | 8,501 | | | Plus: Interest expense | | | 2,754 | | | 5,117 | | | Plus: Income tax expense | | | 36,500 | | | 28,300 | | | EBITDA | | | $ 263,393 | | | $ 203,846 | |
Non-GAAP Financial Measure To provide additional information about the Company's results, HEICO has discussed in this FORM DEF-14A its EBITDA (calculated as net income attributable to HEICO adjusted for depreciation and amortization expense, net income attributable to noncontrolling interests, interest expense and income tax expense) which is not prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). This non-GAAP measure is included to supplement the Company’s financial information presented in accordance with GAAP and because the Company uses such measure to monitor and evaluate the performance of its business and believes the presentation of this measure enhances an investor's ability to analyze trends in the Company’s business and to evaluate the Company’s performance relative to other companies in its industry. However, this non-GAAP measure has limitations and should not be considered in isolation or as a substitute for analysis of the Company's financial results as reported under GAAP.
This non-GAAP measure is not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, this non-GAAP measure is not based on any comprehensive set of accounting rules or principles. This measure should only be used to evaluate the Company's results of operations in conjunction with its corresponding GAAP measure. Pursuant to the requirements of Regulation G of the Securities and Exchange Act of 1934, the Company has provided a reconciliation of this non-GAAP measure above. | | | A-1 | | BY ORDER OF THE BOARD OF DIRECTORS, | | | | Laurans A. Mendelson | | Chairman of the Board and | | Chief Executive Officer |
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HEICO CORPORATION
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MARCH 15, 201918, 2022
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned shareholder of HEICO CORPORATION hereby appoints Laurans A. Mendelson and Thomas S. Irwin, or either of them, the true and lawful attorney or attorneys and proxy or proxies of the undersigned with full power of substitution and revocation to each of them, to vote all the shares of stock which the undersigned would be entitled to vote, if there personally present, at the Annual Meeting of Shareholders of HEICO CORPORATION called to be held at the Conrad Miami,Hotel AKA Brickell, 1395 Brickell Avenue, Miami, Florida 33131 at 10:00 a.m. Eastern Daylight Time on March 15, 201918, 2022 (notice of such meeting has been received), and at any adjournments thereof, with all powers which the undersigned would possess if personally present. Without limiting the generality of the foregoing, said attorneys and proxies are authorized to vote as indicated below.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MARCH 15, 2019 18, 2022
The accompanying Proxy Statement and the 20182021 Annual Report on Form 10-K are available at:
https://www.heico.com
If you plan to attend the Annual Meeting, you can obtain directions to the Conrad MiamiHotel AKA Brickell from the hotel’s website at http:https://conradhotels3.hilton.com/en/hotels/florida/conrad-miami-MIACICI/about/directions.html www.stayaka.com/hotel-aka-brickell
The Board of Directors of HEICO CORPORATION unanimously recommends a vote “FOR” each of the nominees for director, "FOR"“FOR” the advisory vote on executive compensation, and “FOR” the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending October 31, 2019. 2022. | | 1.
| ELECTION OF HEICO’S BOARD OF DIRECTORS FOR THE ENSUING YEAR |
| | | | | | 01 - Thomas M. Culligan | | | 02 - Adolfo Henriques | | | 03 - Mark H. Hildebrandt | 04 - Eric A. Mendelson | | | 05 - Laurans A. Mendelson | | | 06 - Victor H. Mendelson | 07 - Julie Neitzel | | | 08 - Dr. Alan Schriesheim | | | 09 - Frank J. Schwitter |
| ☐ | | | | | | o | Mark here to vote
FOR all nominees | o | | ☐ | | | Mark here to WITHHOLD
vote from all nominees | o | | ☐ | | | For All EXCEPT - To withhold authority to vote for any
| | FOR all nominees
| | vote from all nominees | | nominee(s), write the name(s) of such nominee(s) below. | | | | | | | | | | | | | | | | |
| | 2.
| ADVISORY APPROVAL OF THE COMPANY'SCOMPANY’S EXECUTIVE COMPENSATION |
| ☐ FOR | | | ☐ AGAINST | | | o | FOR | o | AGAINST | o | ☐ABSTAIN |
| | 3.
| RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING OCTOBER 31, 20192022 |
| ☐ FOR | | | ☐ AGAINST | | | o | FOR | o | AGAINST | o | ☐ABSTAIN |
(Continued and to be dated and signed on the reverse side)
TABLE OF CONTENTS | | 4.
| In their discretion, upon such other matters which may properly come before the meeting or any adjournments |
THIS PROXY WILL BE VOTED AS DIRECTED, BUT WHERE NO DIRECTION IS GIVEN, IT WILL BE VOTED “FOR” THE ELECTION OF ALL DIRECTOR NOMINEES AND "FOR"“FOR” PROPOSALS 2 AND 3. PLEASE SIGN, DATE AND MAIL THIS PROXY PROMPTLY IN THE ENVELOPE PROVIDED SO THAT YOUR SHARES CAN BE VOTED AT THE MEETING. Dated:, 2022 Signature Signature, if held jointly Note: Please sign exactly as your name or names appear hereon. If signing as executor, trustee, administrator, attorney or guardian, etc., please print your full title. | | | | Dated:________________________, 2019 | | | | Signature________________________________________ | | | | Signature, if held jointly_____________________________ | | | | Note: Please sign exactly as your name or names appear hereon. If signing as executor, trustee, administrator, attorney or guardian, etc., please print your full title. |
|