Form 4: Telos Corporation Executive Awarded Performance-Based Restricted Stock Units

Malcolm G. Cooke, VP and Chief Information Technology Officer of Telos Corporation, has been granted 152,149 performance-based Restricted Stock Units (RSUs) as part of his compensation.

Summary

• Malcolm G. Cooke, Telos Corporation's VP, Chief Info Tech Officer, reported a transaction involving company securities.
• On June 11, 2025, Mr. Cooke was granted 152,149 performance-based Restricted Stock Units (RSUs).
• Each RSU represents a contingent right to receive one share of Telos common stock.
• The vesting of these RSUs is contingent upon Telos's common stock achieving a certain Total Shareholder Return (TSR) relative to specified peer companies.
• The performance period for these RSUs spans from June 1, 2025, through May 31, 2028.
• Following this transaction, Mr. Cooke directly holds 85,432.091 shares of Common Stock and indirectly holds 10,035.26 shares in a 401(k) plan.
• He also directly holds 152,149 performance-based RSUs.

Sentiment

Score: 7

Explanation: The document reports a routine executive compensation grant, specifically performance-based RSUs, which is generally viewed positively as it aligns executive incentives with shareholder interests. There are no negative financial implications or unexpected events reported.

Positives

• The grant of performance-based RSUs aligns the executive's interests directly with shareholder returns, as vesting is tied to Total Shareholder Return (TSR) relative to peers.
• This type of compensation structure incentivizes long-term performance and strategic decision-making aimed at increasing shareholder value.

Risks

• The actual number of shares received from the performance-based RSUs is contingent on Telos's Total Shareholder Return (TSR) performance relative to its peers, meaning the executive may receive fewer or no shares if performance targets are not met.
• The value of the RSUs, once vested, is subject to the future market price of Telos common stock.

Future Outlook

The performance-based RSUs granted to the executive are tied to Telos Corporation's Total Shareholder Return (TSR) relative to its peers over a performance period extending from June 1, 2025, to May 31, 2028, indicating a focus on future stock performance and shareholder value creation.

Management Comments

• The grant of performance-based RSUs to Malcolm G. Cooke, VP, Chief Info Tech Officer, reflects the company's compensation strategy to incentivize executive performance tied to shareholder returns.

Industry Context

The grant of performance-based Restricted Stock Units (RSUs) is a common practice in the technology and cybersecurity industries for executive compensation. This method aligns executive incentives with long-term company performance and shareholder value creation, a standard approach adopted by many publicly traded companies to attract and retain top talent.

Comparison to Industry Standards

• The use of performance-based RSUs, particularly those tied to Total Shareholder Return (TSR) relative to peers, is considered a best practice in executive compensation across various industries, including technology and cybersecurity.
• Companies like Palo Alto Networks (PANW), CrowdStrike (CRWD), and Zscaler (ZS) frequently utilize similar equity-based incentives with performance hurdles to motivate their leadership teams.
• This structure is generally viewed favorably by institutional investors and proxy advisory firms as it directly links executive payouts to the company's stock performance against its competitors, promoting accountability and long-term value creation.

Stakeholder Impact

• Shareholders: The performance-based nature of the RSU grant aligns the executive's financial incentives with the company's stock performance relative to its peers, potentially benefiting shareholders through increased long-term value.
• Employees: While not directly impacted by this specific filing, executive compensation practices can influence overall company culture and employee morale.

Next Steps

• The performance-based RSUs will vest based on Telos Corporation's Total Shareholder Return (TSR) relative to its peers during the period from June 1, 2025, to May 31, 2028.

Key Dates

Keywords

Telos Corp, TLS, Form 4, Insider Transaction, Executive Compensation, Restricted Stock Units, RSU, Performance-Based Compensation, Corporate Governance, Malcolm G. Cooke