Four Tree Island Issues Open Letter to WLFC Board
Four Tree Island Advisory, one of the largest stockholders of Willis Lease Finance (WLFC), issued an open letter to the independent members of WLFC's board of directors, which read in part, "It has been nearly three months since Four Tree Island Advisory delivered a private letter to the independent members of the WLFC Board noting our significant concerns with a series of compensation and related-party decisions benefiting Executive Chairman Charles Willis that appear inconsistent with the Board's duties of care and loyalty and with widely accepted governance norms...While the independent directors initially indicated on January 13th that they would revert on the serious concerns raised in our communications 'at the appropriate time,' and further indicated on February 12th that they would like to have a call post-Q4 earnings, the independent members of the Board have still not engaged with us despite our repeated efforts. Unfortunately, it appears that the Board only responds when publicly confronted. While we attempted to address our concerns numerous times privately, it was not until we issued an open letter on January 6, 2026 that we saw any constructive changes to the Company's behavior, including: Initiating a strategic alternatives process for the Sustainable Aviation Fuel project, and Making greater efforts to improve stockholder communication around earnings calls, including a Q4 earnings presentation that incorporated a helpful slide deck and adjusted EBITDA metrics that better framed WLFC's 2025 earnings growth. To date, it remains far from clear that anything meaningful has been, or will be, done to address what we view as an egregious excess compensation and perquisite culture that has long permeated WLFC. As such, we felt compelled to bring it into greater public focus given the considerable interest and concern from investors and other stakeholders that our first open letter generated. In our view, the Company's chief steward has for years operated in a manner that reflects a troubling disregard for fiduciary and corporate governance responsibilities, and an overarching focus on personal benefit. If the Executive Chairman remains primarily focused on extracting value for himself, then the responsibility for reining in this behavior necessarily falls to the independent members of the Board. From our perspective, it is not at all apparent that the independent directors have fully recognized or exercised their fiduciary duties in this regard. We remain a top 10 stockholder of the Company and have continued to add to our position since our first public letter issued earlier this year. We continue to have strong conviction in the material upside potential of WLFC shares, but we are equally convinced that the stock will continue to suffer a meaningful valuation discount so long as the current compensation and perquisite framework persists. This is a defining element of poor corporate governance and a key impediment to unlocking greater institutional interest in WLFC. Importantly, we believe this is easily addressable. In our view, a rational reset would redirect resources from outsized executive pay and perquisites toward materially enhanced dividends that benefit all stockholders, rather than primarily the executive members of the Willis family."
