Form 4: Houlihan Lokey CEO Scott Adelson Receives Significant Equity Grants Under Incentive Plan

Houlihan Lokey, Inc. (HLI) CEO and Director Scott Joseph Adelson was granted 12,682 shares of Class B Common Stock, including performance-based awards, as part of the company's 2016 Incentive Award Plan.

Summary

• Scott Joseph Adelson, CEO and Director of Houlihan Lokey, Inc. (HLI), reported new equity grants on May 22, 2025.
• He was granted 9,864 shares of Class B Common Stock, which will vest in four equal annual installments following the grant date.
• Additionally, he received 2,818 performance shares of Class B Common Stock, also vesting in four equal annual installments, contingent upon the achievement of specific revenue growth performance goals.
• If the performance criteria are not met on a vesting date, the corresponding annual installment of performance shares will be forfeited.
• All granted Class B Common Stock is convertible into Class A Common Stock on a one-for-one basis at the holder's option or automatically upon certain conversion dates.
• Following these transactions, Scott J. Adelson beneficially owns 878,921 shares of Class B Common Stock indirectly through the HL Voting Trust, into which the newly granted shares were deposited.

Sentiment

Score: 7

Explanation: The sentiment is positive as it reflects standard executive compensation practices designed to align management incentives with shareholder interests, particularly through performance-based awards. It does not indicate any negative operational or financial news.

Positives

• The equity grants align the CEO's interests with those of shareholders, as a significant portion of his compensation is tied to the company's stock performance and revenue growth.
• The performance-based vesting for 2,818 shares incentivizes the CEO to achieve specific revenue growth targets, potentially benefiting the company's financial performance.

Risks

• The performance shares are subject to forfeiture if the specified revenue growth goals are not achieved, introducing a risk to the CEO's potential compensation.
• The value of the granted shares is subject to market fluctuations of Houlihan Lokey's stock price.

Future Outlook

The granted shares will vest in four equal annual installments following the May 22, 2025 grant date, with performance shares contingent on future revenue growth achievements. This indicates a long-term incentive structure for the CEO.

Industry Context

The granting of equity awards to senior executives is a common practice in the financial services industry, particularly for investment banks like Houlihan Lokey, to incentivize long-term performance and align management interests with shareholder value creation.

Stakeholder Impact

• Shareholders: The equity grants, especially the performance-based ones, aim to align the CEO's incentives with shareholder value creation through revenue growth.
• Employees: No direct impact on general employees is indicated, but executive compensation practices can influence overall company culture and compensation philosophy.

Next Steps

• Vesting of the 9,864 time-based Class B Common Stock shares in four equal annual installments.
• Vesting of the 2,818 performance-based Class B Common Stock shares in four equal annual installments, subject to revenue growth performance goals.

Key Dates

Keywords

Houlihan Lokey, HLI, Scott Adelson, SEC Form 4, Insider Transaction, Stock Grant, Executive Compensation, Class B Common Stock, Performance Shares, Incentive Award Plan, Corporate Governance