HEICO’s compounding formula
- Less is more: HEICO targets a maximum share of 30% in its categories to limit price competition. Its portfolio now includes 19,500 parts which typically sell at a 30% discount to competition.
- Impeccable execution: HEICO has sold over 80 million parts. Every one has been faultless: zero service bulletins, zero airworthiness directives, and zero in-flight shutdowns.
- Incentives: Employees own over 2% of HEICO, driven by a 401(k) plan that gifts equity at 5% a year. Over 400 employees have over $1 million of HEICO stock, and on average, employees own more in stock than they make in annual compensation.
- Stakeholder alignment: “I get paid $1 million a year in salary, but if the stock goes up $1, my family makes $7 million. If it goes up $10, we make $70 million. Which do you think I care about more, my salary or the stock?” –Laurans Mendelson, HEICO’s CEO