Form 4: AAR Corp. VP-CAO & Controller Reports Stock Awards, Option Exercise, and Sales
Insider Transaction Report
AAR Corp.'s VP-CAO & Controller, Eric Pachapa, reported the acquisition of restricted and performance stock, the exercise of stock options, and subsequent sales of common stock on July 23, 2025, as part of a pre-arranged plan.
Summary
- Eric Pachapa, VP-CAO & Controller of AAR CORP, reported multiple transactions on July 23, 2025.
- Acquired 1,135 shares of common stock as a restricted stock award at $0.
- Acquired 3,400 shares of common stock as a performance restricted stock award at $0.
- Exercised options to acquire 3,837 shares of common stock at an exercise price of $18.94.
- Sold 3,837 shares of common stock at a weighted average price of $78.1213, with prices ranging from $77.09 to $78.66.
- Sold an additional 1,911 shares of common stock at a weighted average price of $78.6978, with prices ranging from $78.32 to $79.05.
- Beneficial ownership after these transactions is 31,163.32 shares of common stock.
- Acquired 3,130 new stock options with an exercise price of $79.45, vesting in 1/3 annual installments starting July 31, 2026, and expiring July 23, 2035.
- The transactions were made pursuant to a Rule 10b5-1(c) plan.
Sentiment
Score: 6
Explanation: The filing reflects a mix of positive equity awards (restricted stock, performance stock, new options) and sales of shares, which is typical for executive compensation and liquidity. The sales are offset by new awards and the exercise of options, indicating ongoing participation in the company's equity. The transactions being under a 10b5-1 plan also reduces any negative sentiment associated with sales.
Positives
- Eric Pachapa received awards of 1,135 shares of restricted stock and 3,400 shares of performance restricted stock, indicating ongoing equity compensation.
- Acquired 3,130 new stock options, demonstrating continued long-term incentive alignment with company performance.
Negatives
- Eric Pachapa sold a total of 5,748 shares of common stock (3,837 + 1,911 shares) at weighted average prices of $78.1213 and $78.6978, which reduces direct ownership.
Future Outlook
The filing indicates future vesting schedules for newly awarded stock options, with installments beginning on July 31, 2026, and continuing through July 31, 2028, and an expiration date of July 23, 2035, for these options. This suggests a long-term incentive structure for the reporting person.
Industry Context
This Form 4 filing details routine insider transactions related to executive compensation, including stock awards, option exercises, and sales. Such transactions are common across industries as part of executive compensation plans and do not inherently reflect broader industry trends, but rather specific company compensation practices.
Related Party Transactions
- The reported transactions are by a corporate officer (Eric Pachapa, VP-CAO & Controller) with the issuer (AAR CORP), which constitutes a related party transaction.
- The awards of restricted stock and performance restricted stock are part of the company's compensation plan for executives.
Stakeholder Impact
- Shareholders: The sales by a key executive could be perceived negatively, but the concurrent awards and the 10b5-1 plan context mitigate concerns. The executive's continued equity holdings and new option grants align interests with shareholders.
- Employees: No direct impact on general employees is indicated.
Next Steps
- Future vesting of 3,130 stock options in 1/3 annual installments beginning July 31, 2026, July 31, 2027, and July 31, 2028.
- Expiration of the newly awarded stock options on July 23, 2035.
Key Dates
| Date | Description |
|---|---|
| 07/13/2020 | Grant date for 50,020 stock options, which vested in 33 1/3% increments on July 31, 2021, July 31, 2022, and July 31, 2023. |
| 07/31/2021 | First vesting date for stock options granted on July 13, 2020. |
| 07/31/2022 | Second vesting date for stock options granted on July 13, 2020. |
| 01/12/2023 | Date of the Power of Attorney document authorizing Katherine Kwiat to sign SEC filings on behalf of Eric Pachapa. |
| 07/31/2023 | Third and final vesting date for stock options granted on July 13, 2020. |
| 07/23/2025 | Date of all reported stock acquisitions (restricted stock, performance stock, option exercise) and sales of common stock. |
| 07/25/2025 | Date the Form 4 was signed and filed. |
| 07/31/2026 | First vesting date for the newly awarded 3,130 stock options. |
| 07/31/2027 | Second vesting date for the newly awarded 3,130 stock options. |
| 07/31/2028 | Third and final vesting date for the newly awarded 3,130 stock options. |
| 07/13/2030 | Expiration date for stock options granted on July 13, 2020. |
| 07/23/2035 | Expiration date for the newly awarded 3,130 stock options. |
Recommendation
holdThe filing details routine insider transactions, including stock awards, option exercises, and sales, all conducted under a pre-arranged 10b5-1 plan. This indicates a standard compensation and liquidity event for an executive rather than a signal of significant change in company outlook. The executive continues to hold a substantial number of shares and has received new option grants, maintaining alignment with shareholder interests. Therefore, this specific filing does not provide a basis for a 'buy' or 'sell' recommendation, suggesting a 'hold' position is appropriate based solely on this information.
Keywords
AAR CORP, AIR, SEC Form 4, Insider Trading, Stock Options, Restricted Stock, Performance Stock, Executive Compensation, Stock Sales, Beneficial Ownership, Rule 10b5-1
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