Form 4: Houlihan Lokey Co-Chairman Scott L. Beiser Receives Significant Equity Grants Under Incentive Plan

Houlihan Lokey's Co-Chairman, Scott L. Beiser, was granted 5,777 shares of Class B Common Stock on May 22, 2025, through the company's 2016 Incentive Award Plan, with vesting tied to time and performance metrics.

Summary

• Scott L. Beiser, Co-Chairman, Director, and 10% Owner of Houlihan Lokey, Inc. (HLI), was granted Class B Common Stock on May 22, 2025.
• He received 2,959 shares of Class B Common Stock under the 2016 Incentive Award Plan, which will vest in four equal annual installments following the grant date.
• Additionally, he was granted 2,818 performance shares of Class B Common Stock, also vesting in four equal annual installments, contingent on achieving specific revenue growth performance goals.
• A total of 5,777 shares of Class B Common Stock were deposited into the HL Voting Trust, where Mr. Beiser is a trustee with shared voting control and pecuniary interest.
• Class B Common Stock is convertible into Class A Common Stock on a one-for-one basis at the option of the holder and has no expiration date.
• Following these transactions, Mr. Beiser beneficially owns 808,413 shares indirectly through the HL Voting Trust.

Sentiment

Score: 7

Explanation: The document reports a routine, positive event of executive equity grants, aligning management incentives with shareholder value, which is generally viewed favorably. No negative or unexpected information is present.

Positives

• The equity grants align management incentives with shareholder interests through direct ownership in the company.
• The inclusion of performance-based vesting for 2,818 shares ties a portion of executive compensation directly to the achievement of revenue growth goals, promoting strong financial performance.
• The grants are part of the established 2016 Incentive Award Plan, indicating a structured and transparent approach to executive compensation.

Risks

• The 2,818 performance shares are subject to forfeiture if the specified revenue growth goals are not achieved by their respective vesting dates.

Future Outlook

The granted shares are scheduled to vest in four equal annual installments following the May 22, 2025 grant date, with a portion contingent on the achievement of future revenue growth performance goals.

Management Comments

• "On May 22, 2025, the Issuer granted 2,959 shares of Class B Common Stock to the reporting person pursuant to its 2016 Incentive Award Plan, which vest in four equal annual installments following the grant date."
• "On May 22, 2025, the Issuer granted 2,818 performance shares of Class B Common Stock to the reporting person pursuant to its 2016 Incentive Award Plan, which vest in four equal annual installments following the grant date if certain performance goals based upon revenue growth are achieved. If on vesting date such performance criteria are not achieved, the annual installment of shares will be forfeited."

Industry Context

This filing represents a routine executive compensation disclosure for a financial advisory firm. Equity grants, particularly those with performance-based vesting, are common practice across the financial services industry to align executive incentives with long-term company performance and shareholder value creation.

Comparison to Industry Standards

• Equity grants as part of executive compensation are standard practice in the financial services industry, including at major investment banks and advisory firms such as Goldman Sachs, Morgan Stanley, and Lazard.
• The use of performance-based vesting, tied to metrics like revenue growth, is an increasingly common and preferred method to ensure compensation is directly linked to tangible company achievements, mirroring best practices seen in other publicly traded financial institutions.
• The four-year vesting schedule is typical for long-term incentive plans designed to retain key executives and encourage sustained performance, consistent with industry norms.

Corporate Governance

Related Party Transactions

• The transfer of 5,777 shares of Class B Common Stock to the HL Voting Trust, where the reporting person, Scott L. Beiser, is a trustee with shared voting control and pecuniary interest, constitutes a related party transaction as it involves an entity controlled by a key executive.

Stakeholder Impact

• Shareholders: Potential positive impact due to increased alignment of executive incentives with company performance and long-term value creation.
• Employees: No direct impact mentioned, but a strong executive team with aligned incentives can contribute to overall company success, indirectly benefiting all employees.

Next Steps

• Vesting of 2,959 shares of Class B Common Stock in four equal annual installments following May 22, 2025.
• Vesting of 2,818 performance shares of Class B Common Stock in four equal annual installments following May 22, 2025, contingent on revenue growth performance goals.

Key Dates

Recommendation

Keywords

Houlihan Lokey, HLI, Scott L. Beiser, SEC Form 4, Beneficial Ownership, Stock Grant, Equity Compensation, Incentive Award Plan, Class B Common Stock, Performance Shares, Corporate Governance, Executive Compensation