Mercury Systems Sets Shareholder Vote on Directors, Pay, and New Incentive Plan

TL;DR

**MRCY's board is pushing for continuity and a new incentive plan; vote FOR to back their strategic vision, or AGAINST if you want a shake-up.**

AI Summary

Mercury Systems, Inc. (MRCY) is holding its 2025 Annual Meeting of Shareholders on October 22, 2025, to address four key proposals. Shareholders will vote on the election of three Class I directors (William L. Ballhaus, Lisa S. Disbrow, Howard L. Lance) for three-year terms and one Class II director (Jean Bua) for a one-year term. An advisory 'say-on-pay' vote on fiscal 2025 executive compensation is also on the agenda, alongside the approval of the new 2025 Long Term Incentive Plan. Finally, shareholders will ratify the appointment of KPMG LLP as the independent registered public accounting firm for fiscal 2026. The Board of Directors unanimously recommends a 'FOR' vote on all four proposals. The company emphasizes its commitment to strong corporate governance, with 89% independent directors and a focus on ESG initiatives including talent management, cybersecurity, and environmental stewardship.

Why It Matters

This DEF 14A filing outlines critical governance decisions for Mercury Systems, directly impacting leadership stability and executive incentives. The election of four directors, including CEO William L. Ballhaus, will shape the company's strategic direction in the competitive aerospace and defense sector. Approval of the 2025 Long Term Incentive Plan is crucial for attracting and retaining top talent, which is vital for Mercury's innovation and execution against competitors like Lockheed Martin. The 'say-on-pay' vote provides investors a direct voice on executive compensation, influencing accountability and alignment with shareholder interests.

Risk Assessment

Risk Level: medium — The filing highlights 'effects of shareholder activism' and 'litigation, including the dispute arising with the former CEO over his resignation' as risks, indicating potential internal dissent or legal challenges that could impact governance and operations. While the board recommends 'FOR' on all proposals, the mention of these specific risks suggests a non-zero chance of shareholder opposition or ongoing internal friction.

Analyst Insight

Investors should carefully review the backgrounds of the nominated directors and the details of the 2025 Long Term Incentive Plan. Voting 'FOR' all proposals aligns with the Board's recommended strategy, while a 'NO' vote, particularly on executive compensation or the incentive plan, could signal dissatisfaction with current governance or performance.

Financial Highlights

debt To Equity

X.X

revenue

$X

operating Margin

X%

total Assets

$X

total Debt

$X

net Income

$X

eps

$X

gross Margin

X%

cash Position

$X

revenue Growth

+X%

Executive Compensation

Key Numbers

• October 22, 2025 — Date of 2025 Annual Meeting of Shareholders (Meeting will be held at 10:00 a.m. Eastern Time)
• August 25, 2025 — Record date for voting eligibility (Shareholders of record on this date can vote)
• 4 — Number of directors up for election (Three Class I directors for three-year terms, one Class II director for a one-year term)
• 2025 — Fiscal year for executive compensation advisory vote (Shareholders will vote on 'say-on-pay' for fiscal 2025)
• 2025 — Year of Long Term Incentive Plan proposed for approval (New plan to be approved by shareholders)
• 2026 — Fiscal year for independent auditor ratification (KPMG LLP proposed for fiscal 2026)
• 9 — Size of the Board of Directors (Current number of directors on Mercury's board)
• 89% — Percentage of independent directors (8 out of 9 directors are independent)
• 60,020,680 — Shares of common stock outstanding (As of the August 25, 2025 record date, for quorum determination)
• 12 — Number of Board Meetings held during Fiscal 2025 (Indicates active board oversight)

Key Players & Entities

• William L. Ballhaus (person) — Chairman of the Board, President, and Chief Executive Officer of Mercury Systems, Inc. and Class I Director nominee
• Jean Bua (person) — Class II Director nominee, joined the Board in January 2025, former CFO of Netscout Systems
• Lisa S. Disbrow (person) — Class I Director nominee, Under Secretary of the U.S. Air Force (Retired)
• Howard L. Lance (person) — Class I Director nominee, former President and CEO of Maxar Technologies and Harris Corporation
• KPMG LLP (company) — Independent registered public accounting firm for fiscal 2026
• David E. Farnsworth (person) — Executive Vice President and Chief Financial Officer of Mercury Systems, Inc.
• Stuart H. Kupinsky (person) — Executive Vice President, Chief Legal Officer, and Corporate Secretary of Mercury Systems, Inc.
• Steven V. Ratner (person) — Executive Vice President and Chief Human Resources Officer of Mercury Systems, Inc.
• Charles R. Wells, IV (person) — Former Executive Vice President and Chief Operating Officer of Mercury Systems, Inc., resigned April 4, 2025
• National Security Agency (NSA) (regulator) — Former employer of Debora A. Plunkett, providing cybersecurity expertise to the Board

FAQ

Risk Factors

• Supply Chain Disruptions and Component Shortages [high — operational]: The company faces risks from shortages in or delays in receiving components, supply chain delays or volatility for critical components, and the impact of supply chain disruption on program execution. This can lead to production delays or unanticipated expenses.
• Government Funding and Procurement Rules [high — regulatory]: Continued funding of defense programs, including timing and amounts, is a key risk. Changes in U.S. federal government shutdown or extended continuing resolution, and changes in federal export control or procurement rules and regulations, including tariffs, can impact operations.
• Manufacturing Execution and Quality Issues [medium — operational]: Risks include production delays or unanticipated expenses due to quality issues or manufacturing execution issues, adherence to required manufacturing standards, capacity underutilization, increases in scrap or inventory write-offs, and failure to achieve or maintain manufacturing quality certifications like AS9100.
• Interest Rate and Hedging Changes [medium — financial]: Increases in interest rates and changes to interest rate swaps or other cash flow hedging arrangements can impact financial performance. The company also faces risks related to changes to generally accepted accounting principles.
• Litigation and Shareholder Activism [medium — legal]: The company is subject to litigation, including a dispute with the former CEO. Effects of shareholder activism can also pose a risk to the company's operations and strategic direction.
• Integration of Acquired Businesses [medium — operational]: Challenges in integrating acquired businesses and achieving anticipated synergies, or inability to fully realize expected benefits from acquisitions and operational efficiency initiatives, present operational and financial risks.
• Cybersecurity and Data Security [high — operational]: Changes to industrial security and cyber-security regulations and requirements, and impacts from any cyber or insider threat events, pose significant operational and reputational risks.
• Market Conditions and Competition [medium — market]: General economic and business conditions, unforeseen weakness in the Company's markets, geopolitical unrest, regional conflicts, and competition can affect the company's performance. Changes in technology and methods of marketing also present risks.

Industry Context

Mercury Systems operates in the aerospace and defense sector, providing mission-critical processing solutions for edge computing. The industry is characterized by long product cycles, significant R&D investment, and reliance on government contracts. Key trends include increasing demand for advanced processing capabilities at the edge, cybersecurity enhancements, and the integration of AI and machine learning into defense systems.

Regulatory Implications

The company's operations are heavily influenced by U.S. government defense spending and procurement regulations. Changes in funding levels, export controls, and cybersecurity mandates can significantly impact revenue and operational requirements. Compliance with AS9100 and DFARS standards is critical for maintaining business relationships.

What Investors Should Do

1. Vote FOR the election of the three Class I directors (William L. Ballhaus, Lisa S. Disbrow, Howard L. Lance) and one Class II director (Jean Bua) to ensure board continuity and expertise.
2. Vote FOR the advisory 'say-on-pay' proposal to express shareholder sentiment on executive compensation for fiscal year 2025.
3. Vote FOR the approval of the 2025 Long Term Incentive Plan to support executive and employee motivation and alignment with long-term company performance.
4. Vote FOR the ratification of KPMG LLP as the independent registered public accounting firm for fiscal year 2026 to maintain auditor independence and financial reporting integrity.
5. Review the company's risk factors, particularly those related to supply chain, government funding, and cybersecurity, to assess potential impacts on future performance.

Key Dates

• 2025-10-22: 2025 Annual Meeting of Shareholders — Shareholders will vote on director elections, executive compensation, the 2025 Long Term Incentive Plan, and ratification of the independent auditor.
• 2025-08-25: Record Date for Voting Eligibility — Establishes the list of shareholders entitled to vote at the annual meeting.
• 2025-09-10: Filing Date of Proxy Statement — Indicates the date the proxy materials were made public, providing shareholders with information for their voting decisions.
• 2025-06-27: Fiscal Year End — Marks the end of the fiscal year for which financial information and executive compensation are being reported.

Glossary

DEF 14A

A Schedule 14A filing, also known as a Proxy Statement, is a document filed with the SEC by a company when soliciting proxies from shareholders for an annual or special meeting. (This document contains the information shareholders need to make informed voting decisions at the company's annual meeting.)

Say-on-Pay Vote

An advisory shareholder vote on the compensation of the company's named executive officers. (Allows shareholders to express their opinion on the company's executive compensation practices.)

Class I Director

Directors elected for a specific term, typically three years, with staggered elections to ensure continuity on the board. (Shareholders are voting to elect Class I directors for three-year terms.)

Class II Director

Directors elected for a specific term, typically three years, with staggered elections. In this case, one Class II director is up for a one-year term. (Shareholders are voting to elect one Class II director for a one-year term.)

Independent Registered Public Accounting Firm

An external audit firm that is independent of the company and is responsible for auditing the company's financial statements. (Shareholders are asked to ratify the appointment of KPMG LLP as the independent auditor for fiscal year 2026.)

Long Term Incentive Plan

A compensation plan designed to incentivize employees to achieve long-term company goals, often through stock options or other equity awards. (Shareholders are voting to approve the company's new 2025 Long Term Incentive Plan.)

Record Date

A specific date set by the company to determine which shareholders are eligible to receive notice of and vote at a shareholders' meeting. (Shareholders of record on August 25, 2025, are eligible to vote at the 2025 Annual Meeting.)

Quorum

The minimum number of shareholders or shares required to be present at a meeting for business to be legally transacted. (The number of shares outstanding as of the record date is relevant for determining if a quorum is met.)

Year-Over-Year Comparison

This filing pertains to the 2025 Annual Meeting, with proxy materials available for the fiscal year ended June 27, 2025. Specific comparative financial metrics (revenue, margins, net income) from the previous fiscal year's 10-K are not detailed within this proxy statement itself. However, the proxy highlights the election of directors, executive compensation for fiscal 2025, a new incentive plan, and auditor ratification for fiscal 2026, indicating ongoing governance and compensation practices.

Filing Documents

• mrcy-20250910.htm (DEF 14A) — 1457KB
• mrcy-20250910_g1.jpg (GRAPHIC) — 547KB
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• mrcy-20250910_g9.jpg (GRAPHIC) — 135KB
• 0001049521-25-000029.txt ( ) — 16945KB
• mrcy-20250910.xsd (EX-101.SCH) — 2KB
• mrcy-20250910_def.xml (EX-101.DEF) — 3KB
• mrcy-20250910_lab.xml (EX-101.LAB) — 3KB
• mrcy-20250910_pre.xml (EX-101.PRE) — 2KB
• mrcy-20250910_htm.xml (XML) — 254KB

From the Filing

mrcy-20250910 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant Filed by a Party other than the Registrant Check the appropriate box: Preliminary Proxy Statement Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) Definitive Proxy Statement Definitive Additional Materials Soliciting Material Pursuant to 240.14a-12 Mercury Systems, Inc. (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check all boxes that apply): No fee required Fee paid previously with preliminary materials Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 Notice of 2025 Annual Meeting of Shareholders Dear Shareholders: The Board of Directors of Mercury Systems, Inc. invites you to attend the 2025 Annual Meeting of Shareholders. The Annual Meeting will be held on October 22, 2025, at 10:00 a.m. Eastern Time at the Company's headquarters at 50 Minuteman Road, Andover, Massachusetts 01810. The meeting is being held for the following purposes: To elect three Class I directors nominated by the Board of Directors, each to serve for a three-year term, and in each case until their successors are duly elected and qualified, and to elect one Class II director nominated by the Board of Directors, to serve for a one-year term, until her successor is duly elected and qualified. To hold an advisory vote on the fiscal 2025 compensation of our named executive officers (the "say-on-pay" vote). To hold a vote to approve our 2025 Long Term Incentive Plan. To ratify the appointment of KPMG LLP as our independent registered public accounting firm for fiscal 2026. To consider and act upon any other business that may properly come before the meeting or any adjournment or postponement of the meeting. The first proposal relates solely to the election of three Class I directors and one Class II director and does not include any other matters relating to the election of directors, including, without limitation, the election of directors nominated by any Mercury shareholder. The Board of Directors has fixed the close of business on August 25, 2025 as the record date for the meeting. All shareholders of record on that date are entitled to notice of and to vote at the meeting. Your vote is important. Please vote by internet, telephone, or mail as soon as possible to ensure your vote is recorded promptly. Please also note that, if you wish to attend the meeting, you must request an admission ticket in advance by contacting us at annualmeeting@mrcy.com. To attend the meeting, please note the security procedures included on page 1 of the proxy statement. Important Notice Regarding the Availability of Proxy Materials for the 2025 Annual Meeting of Shareholders to be held on October 22, 2025: The proxy statement and annual report to shareholders for our fiscal year ended June 27, 2025 are available at www.envisionreports.com/MRCY. By Order of the Board of Directors Chairman of the Board, President, and Chief Executive Officer Andover, Massachusetts September 10, 2025 i EXECUTIVE SUMMARY This executive summary is an overview of information that you will find elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. Proposals and Board Recommendations No. Proposal Summary Board's Voting Recommendations 1 Election of Three Class I Directors and One Class II Director FOR each nominee 2 Advisory Vote on Fiscal 2025 Executive Compensation ("Say-on-Pay") FOR 3 Approval of 2025 Long Term Incentive Plan FOR 4 Ratification of Appointment of Our Independent Registered Public Accounting Firm for Fiscal 2026 FOR Cautionary Note on Forward-Looking Statements: This proxy statement contains certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including those relating to our focus on enhanced execution of our strategic plan. You can identify these statements by the words "may," "will," "could," "should," "would," "plans," "expects," "anticipates," "continue," "estimate," "project," "intend," "likely," "forecast," "probable," "potential," and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but are not limited to, continued funding of defense programs, the timing and amounts of such funding, general economic and business conditions, including unforeseen weakness in the Company's markets, effects of any U.S. federal government shutdown or extended continuing resoluti

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