DEF 14A of Treace Medical Concepts, Inc.
Filed Apr 7, 2025 · FY20240000950170-25-051369
Nominees for Election to a Three-Year Term Expiring at the 2028 Annual Meeting of Stockholders
Nominees for Election to a Three-Year Term Expiring at the 2028 Annual Meeting of Stockholders
Nominees for Election to a Three-Year Term Expiring at the 2028 Annual Meeting of Stockholders
| | | Lawrence W. Hamilton Mr. Hamilton has served as a member of our Board since November 2020. Mr. Hamilton has served as an Executive Coach and Senior Adjunct Faculty with the Leadership Development Institute at Eckerd College since September 2008. From July 1993 to July 2006, Mr. Hamilton served in various roles at Tech Data Corporation, most recently as Senior Vice President, Human Resources and Chief Human Resources Officer. From 1991 to 1993, Mr. Hamilton served as Vice President of Human Resources and Administration at Linvatec. From 1985 to 1991, Mr. Hamilton served in a variety of human resource management positions at Bristol-Myers Squibb Company (NYSE: BMY). Mr. Hamilton has also previously served as a member of the board of directors of Wright Medical Group, Inc., which was acquired by Stryker Corporation (NYSE: SYK) in November 2020, and HomeBanc Mortgage (NYSE: HBMC). Mr. Hamilton holds a BA in Political Sciences from Fisk University, an MPA (Labor) Policy from the University of Alabama and an Ed.S. in Human Resources Development from George Washington University. Mr. Hamilton is a certified Senior Professional in Human Resources and holds the Certified Compensation Professional designation from the American Compensation Association and the Board Certified Coach credential from the Center For Credentialing and Education. Qualifications We believe that Mr. Hamilton is qualified to serve on our Board due to his experience in managing employees, establishing compensation policies and guidelines and serving in board committee roles. | | Age | Tenure | | | 67 | 4.5 Years | | | Committees • Audit • Compensation (Chair) | | |
Nominees for Election to a Three-Year Term Expiring at the 2028 Annual Meeting of Stockholders
| | | Deepti Jain Ms. Jain has served as a member of our Board since October 2021. From January 2019 to December 2020, Ms. Jain served as the President of IngenioRx, Inc., a subsidiary of Anthem, Inc. (NYSE: ANTM). From 2014 to 2018, Ms. Jain served as Senior Vice President and Chief Operating Officer of Anthem Pharmacy Solutions, a division of Anthem, Inc. Ms. Jain served as Chief Financial Officer and Senior Vice President of Finance of the Health Plan Division of Medco Health Solutions Inc. from 2010 to 2012. Ms. Jain served as a member of the board of directors, audit committee and compliance and reimbursement committee of Tactile Systems Technology, Inc. (NASDAQ: TCMD), a publicly traded medical device company, from January 2021 to May 2023. Ms. Jain holds a BA in Philosophy and Classical Music from Dayanand Anglo Vedic College, an MA in English Literature from Guru Nanak Dev University and an MBA from Zicklin School of Business at Baruch College. Qualifications We believe that Ms. Jain is qualified to serve on our Board due to her experience in launching fast-growing businesses, including as a chief financial officer and chief operating officer, her expertise in the healthcare industry, and her service on the boards of other publicly traded medical device companies. | | Age | Tenure | | | 57 | 3.5 Years | | | Committees • Audit • Nominating and Corporate Governance (Chair) | | |
Nominees for Election to a Three-Year Term Expiring at the 2028 Annual Meeting of Stockholders
| 8 | |
Class II Directors whose terms in office expire at the 2026 Annual Meeting of Stockholders
Class II Directors whose terms in office expire at the 2026 Annual Meeting of Stockholders
Class II Directors whose terms in office expire at the 2026 Annual Meeting of Stockholders
| | | Lance A. Berry Mr. Berry has served as a member of our Board since October 2022. Since December 2023, he has served as Executive Vice President and Chief Financial Officer of Artivion (NYSE: AORT), a cardiac and vascular surgery company focused on aortic disease. From December 2002 until its acquisition by Stryker Corporation (NYSE: SYK) in November 2020, Mr. Berry worked for Wright Medical Group, Inc., joining in 2002 as Corporate Controller and being promoted to various roles culminating in the roles of Senior Vice President and Chief Financial Officer from December 2009 to January 2019 and Executive Vice President, Chief Financial and Operations Officer from January 2019 to November 2020. Before joining Wright Medical, he was an accountant in the auditing division of Arthur Andersen, LLP, from 1995 to 2002. He served on the board of directors of Vapotherm (OTCQX: VAPO), a publicly traded developer and manufacturer of advanced respiratory technology, from January 2020 to September 2024. Mr. Berry is a Certified Public Accountant (inactive) and holds both a bachelor’s degree and a master’s degree in accounting from the University of Mississippi. Qualifications We believe that Mr. Berry is qualified to serve on our Board due to his extensive financial and managerial experience as a senior financial executive of a publicly traded medical device company, as well as his experience serving on the board of directors of other medical technology companies. | | Age | Tenure | | | 52 | 2.5 Years | | | Committees • Audit | | |
Class II Directors whose terms in office expire at the 2026 Annual Meeting of Stockholders
| | | Elizabeth "Betsy" S. Hanna Ms. Hanna has served as a member of our Board since October 2021. In March 2024, Ms. Hanna was appointed President of Cyted Health, Inc., a provider of genomic diagnostic tests for diseases of the esophagus. From March 2022 to September 2023, Ms. Hanna served as Executive Vice President and Chief Commercial Officer of Agendia, Inc., a provider of molecular diagnostic test solutions. She served as President and Chief Executive Officer and a board member of Clinical Genomics, Inc., a provider of cancer diagnostic solutions, from January 2019 to March 2022. From October 2018 until her promotion, she was Chief Commercial Officer of Clinical Genomics. From December 2014 to September 2018, she served as President and Chief Operating Officer of Origin, Inc., a clinical-stage biotech company. From 2006 to April 2014, Ms. Hanna held positions of increasing responsibility at Johnson & Johnson (NYSE: JNJ), including most recently as Vice President, Global Strategic Marketing – Acuvue Brand from October 2012 to April 2014. She also served as a member of the Global Management Board for J&J Vision Care from October 2012 to April 2014. Ms. Hanna holds a BS in Chemical Engineering from the University of Illinois and an MBA from Harvard Business School. Qualifications We believe that Ms. Hanna is qualified to serve on our Board due to her experience at developing company strategies, operational plans, leadership teams, and performance management systems to commercialize innovative medical therapies, including as a chief executive officer. | | Age | Tenure | | | 60 | 3.5 Years | | | Committees • Compensation • Nominating and Corporate Governance | | |
Class II Directors whose terms in office expire at the 2026 Annual Meeting of Stockholders
| 2025 PROXY STATEMENT | 9 |
Class II Directors whose terms in office expire at the 2026 Annual Meeting of Stockholders
| | | Jane E. Kiernan Ms. Kiernan has served as a member of our Board since October 2022. Ms. Kiernan has served as the Chief Executive Officer and a member of the board of directors of Surgimatix, Inc., a privately held medical device company, since February 2022, after having served as its Chief Business Officer from May 2020 until February 2022. In January 2018, Ms. Kiernan co-founded K2 Biotechnology Ventures, an organization engaged in developing and commercializing university and medical center innovations. From October 2010 to May 2017, Ms. Kiernan served as the Chief Executive Officer of Salter Labs Inc., a manufacturer of specialty respiratory and airway management medical devices. From 2000 to 2010, Ms. Kiernan held executive and general management positions with Baxter Healthcare Corporation (NYSE: BAX). Ms. Kiernan serves on the board of Pharmazz, a private biopharmaceutical company, and AVeta Medical, a private medical device company. She previously served on the board of directors of Axonics, Inc. (NASDAQ: AXNX), a publicly traded global leader in incontinence therapies acquired by Boston Scientific in 2024, Endologix, Inc. (OTC: ELGXQ), a publicly traded provider of minimally invasive treatments of aortic disorders; and American Medical Systems (NASDAQ: AMMD), a publicly traded life sciences company acquired by Endo Pharmaceuticals. Ms. Kiernan holds a BS in business from Southern Methodist University. Qualifications We believe that Ms. Kiernan is qualified to serve on our Board due to her experience as an executive, including as a chief executive officer, leading medical device companies, as well as her experience serving on the board of directors, and audit and compensation committees of other medical technology companies. | | Age | Tenure | | | 64 | 2.5 Years | | | Committees • Compensation | | |
Class III Directors whose terms in office expire at the 2027 Annual Meeting of Stockholders
Class III Directors whose terms in office expire at the 2027 Annual Meeting of Stockholders
Class III Directors whose terms in office expire at the 2027 Annual Meeting of Stockholders
| | | John K. Bakewell Mr. Bakewell has served as a member of our Board since November 2020. He is an experienced executive with more than 30 years of service across the medical device, diagnostics, specialty pharma and healthcare services sectors. He most recently held the position of Chief Financial Officer of Exact Sciences Corporation (NASDAQ: EXAS), a molecular diagnostics company. Mr. Bakewell also previously served as Chief Financial Officer at Lantheus Holdings, Inc. (NASDAQ: LNTH), a diagnostic medical imaging company, Interline Brands, Inc., RegionalCare Hospital Partners, Inc., Wright Medical Group, Inc., which was acquired by Stryker Corporation (NYSE: SYK) in November 2020, Cyberonics, Inc., now part of LivaNova PLC (NASDAQ:LIVN), Altra Energy Technologies, Inc. and ZEOS International, Ltd. Mr. Bakewell has served as a member of the board of directors of Xtant Medical Holdings, Inc. (NYSE MKT: XTNT), a medical device company, since February 2018. Mr. Bakewell also previously served as a member of the board of directors of Neuronetics, Inc. (NASDAQ: STIM), a medical technology company, from May 2020 until May 2024, Entellus Medical, Inc., now part of Stryker Corporation (NYSE: SYK), ev3 Inc., now part of Medtronic plc (NYSE: MDT) and Corindus Vascular Robotics, Inc., now a Siemens Healthineers company. Mr. Bakewell holds a BA in Accounting from the University of Northern Iowa and is a certified public accountant (current status inactive). Qualifications We believe that Mr. Bakewell is qualified to serve on our Board due to his extensive financial and managerial experience as a senior executive of several publicly traded medical technology companies, as well as his experience serving on the board of directors of other medical technology companies. | | Age | Tenure | | | 63 | 4.5 Years | | | Committees • Audit (Chair) • Nominating and Corporate Governance | | |
Class III Directors whose terms in office expire at the 2027 Annual Meeting of Stockholders
| 10 | |
Class III Directors whose terms in office expire at the 2027 Annual Meeting of Stockholders
| | | Richard W. Mott Mr. Mott has served as a member of our Board since March 2015. Mr. Mott has served as the Principal of Walkabout Consulting LLC, a management consulting and private equity firm, since January 2009. He served as the Chairman and Interim Chief Executive Officer of Endologix, LLC, a medical device company, from October 2020 through November 2021 and served as chairman of its board from 2021 to March 2025. From March 2010 until August 2021, Mr. Mott was a Director and Owner of VFD Technologies, a private equity firm that invests in high performance materials and medical device manufacturing businesses. From September 2002 to November 2007, Mr. Mott served as President and Chief Executive Officer of Kyphon Inc., a global medical device company, including through its acquisition by Medtronic plc (NYSE: MDT). From 1993 to 2002, Mr. Mott held various management positions at Wilson Greatbatch Technologies, Inc. and Bristol-Myers Squibb Company (NYSE: BMY). From May 2008 to December 2017, Mr. Mott served as chairman of the board of directors of Silk Road Medical, Inc. (NASDAQ: SILK), a medical device company. Mr. Mott currently serves on the board of various private companies, including the medical device companies CeQur Corporation and Arsenal Medical, Inc. He holds a BS in Ceramic Engineering from Alfred University and is a graduate of Harvard University’s Advanced Management Program. Qualifications We believe that Mr. Mott is qualified to serve on our Board due to his extensive experience leading medical device companies from the early stages of development to liquidity events. | | Age | Tenure | | | 66 | 10 Years | | | Committees • Lead Independent Director • Compensation | | |
Class III Directors whose terms in office expire at the 2027 Annual Meeting of Stockholders
| | | John T. Treace Mr. Treace founded Treace Medical Concepts in 2014 and has served as our Chief Executive Officer and a member of our Board since our inception. Before that, Mr. Treace served as Senior Vice President of U.S. Sales and Global Marketing from January 2010 to January 2013, as Vice President, Biologics and Extremities, from January 2003 to December 2009, as Senior Director of Biologics Marketing from July 2001 to June 2003, and as Senior Director of Sales Administration from November 2000 to June 2001 for Wright Medical Group, Inc., a medical device company, which was acquired by Stryker Corporation (NYSE: SYK) in November 2020. Before that, Mr. Treace held positions at Xomed Surgical Products, Inc., including as Director of Marketing from June 1998 to September 2000 and as Senior Product Manager from April 1996 to June 1998. From July 2010 to July 2013, Mr. Treace served on the board of directors of ENTrigue Surgical, which was acquired by Arthrocare Corporation. Mr. Treace holds a BS in Finance from Seattle University. Qualifications We believe Mr. Treace is qualified to serve on our Board due to his extensive knowledge as our Company’s founder and Chief Executive Officer, his prior commercial and general management experience with a market-leading, publicly traded foot and ankle medical device company and his prior experience as a board member for ENTrigue Surgical. | | Age | Tenure | | | 53 | 11 Years | | | • Founder | | |
Class III Directors whose terms in office expire at the 2027 Annual Meeting of Stockholders
| 2025 PROXY STATEMENT | 11 |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Non-employee Director Compensation Policy
Non-employee Director Compensation Policy In consultation with Compensia, our independent compensation consultant, and with reference to Compensia’s annual director compensation benchmarking review, our Board has adopted a non-employee director compensation policy which includes cash retainers for Board and committee service, an initial equity grant when the non-employee director first joins the Board (the "initial equity grant") and an annual equity grant awarded to non-employee directors (the "annual equity grant"). Cash Compensation. Effective January 17, 2024, all non-employee directors were entitled to receive the following cash compensation for their service: • $45,000 per year for services as a Board member; • $45,000 per year additionally for service as chairperson of the Board; • $20,000 per year additionally for service as chairperson of the Audit, Compensation or NCG Committee; • $10,000 per year additionally for service as an Audit, Compensation or NCG Committee member. Each annual cash retainer and additional annual fee is paid quarterly in arrears on a prorated basis. Between January 1, 2024 and January 17, 2024, the annual retainer was (1) $20,000 per year for the Audit Committee Chair; (2) $10,000 per year for Audit Committee members; (3) $15,000 for the Compensation Committee Chair; (4) $7,500 for Compensation Committee members; (5) $10,000 for the NCG Committee Chair; and (6) $5,000 for NCG Committee members. With the appointment of Mr. Mott to serve as lead independent director in August 2024, an annual retainer of $50,000 was established. Equity Compensation. Non-employee directors are entitled to receive all types of awards (except incentive stock options) under the 2021 Incentive Award Plan (the "2021 Plan") (or the applicable equity plan in place at the time of grant), including discretionary awards not covered under the non-employee director compensation policy. For 2024, the allocation of director equity awards between options and restricted stock units was 50%/50%. Accordingly, under the non-employee director compensation policy in effect during 2024, nondiscretionary, automatic grants of stock options and restricted stock units are made to our non-employee directors as follows: Initial option grant: Upon joining our Board, the director is granted an award of stock options with a "Black-Scholes" value of $150,000 (50% of the targeted $300,000 value for the initial equity grant), rounded up to the nearest multiple of five.
Non-employee Director Compensation Policy
| 2025 PROXY STATEMENT | 23 |
Non-employee Director Compensation Policy
Initial restricted stock unit grant: Upon joining our Board, the director is granted an award of restricted stock units with a target value of $150,000 (50% of targeted $300,000 value for the initial equity grant) with the number of restricted stock units to be determined based on the closing price of our common stock on the grant date, rounded up to the nearest whole number. • Annual option grant: On the date of each annual meeting of stockholders, beginning with the 2022 annual meeting, the director is granted an award of stock options. For 2024, the "Black-Scholes" value for the annual stock option grant was $75,000 (50% of the targeted $150,000 value for the annual equity grant), rounded up to the nearest multiple of five. • Annual restricted stock unit grant: On the date of each annual meeting of stockholders, beginning with the 2022 annual meeting, the director is granted an award of restricted stock units. For 2024, the target value for the annual restricted stock unit award was $75,000 (50% of the targeted $150,000 value for the annual equity grant) with the number of restricted stock units to be determined based on the closing price of our common stock on the grant date, rounded up to the nearest whole number. For purposes of the non-employee director compensation policy, the "Black Scholes" value means the fair value of an option determined using the Black-Scholes pricing model based on the fair market value of our common stock and the volatility, risk-free rate and life expectancy assumptions in our financial statements disclosing those assumptions. The term of each option described above is ten years from the date of grant, subject to earlier termination as provided in the 2021 Plan. The exercise price per share of each option is equal to 100% of the fair market value of one share of our common stock on the date of grant. Subject to the applicable provisions of the 2021 Plan, (1) the initial option grant will vest as to 1/36th of the underlying shares on each monthly anniversary of the grant date; (2) the initial restricted stock unit grant will vest as to one-third of the underlying shares on the first, second and third anniversaries of the grant date; (3) the annual option grant will vest as to 1/12th of the underlying shares on each monthly anniversary of the grant date, provided that the last installment will vest on the earlier of (a) the first anniversary of the grant date or (b) immediately before the next annual meeting of stockholders following the grant date; and (4) the annual restricted stock unit grant will vest on the earlier of (a) the first anniversary of the grant date or (b) immediately before the next annual meeting of stockholders following the grant date. In each case, vesting is subject to the non-employee director continuing to provide services on the applicable vesting date. Under the non-employee director compensation policy, all options and restricted stock units granted to members of our non-employee directors will fully vest if the Company experiences a merger or change in control, subject to the applicable non-employee director's continued service through the vesting date.
2024 Director Compensation
2024 Director Compensation The following table sets forth information for 2024 regarding the compensation awarded to, earned by or paid to our non-employee directors. Certain directors have elected to decline to receive certain types of director compensation and/or have elected to defer the release of vested restricted stock units until either a fixed future date or their ceasing to serve as a director or the occurrence of a change in control event. Directors who are also our employees receive no additional compensation for their service as directors. During 2024, John T. Treace, who is one of our directors, served as our Chief Executive Officer and, accordingly, did not receive any additional compensation for service as director. See "Executive Compensation—Summary Compensation Table" for additional information about the compensation for Mr. John T. Treace for his service as an employee.
2024 Director Compensation
| 24 | |
2024 Director Compensation
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | Option Awards ($)(4)(5) | Total ($) | | John K. Bakewell | 74,780 | 75,002 | 75,001 | 224,784 | | Lance A. Berry | 55,000 | 75,002 | 75,001 | 205,004 | | Lawrence W. Hamilton | 74,780 | 75,002 | 75,001 | 224,784 | | Elizabeth S. Hanna | 64,670 | 75,002 | 75,001 | 214,674 | | Deepti Jain | 74,560 | 75,002 | 75,001 | 224,564 | | Jane E. Kiernan | 54,890 | 75,002 | 75,001 | 204,894 | | Richard W. Mott | 75,723 | 75,002 | 75,001 | 225,727 | | James T. Treace(6) | 99,780 | — | — | 99,780 |
2024 Director Compensation
The amounts reported represent the aggregate dollar amount of all fees earned or paid in cash to each non-employee director for their service as a director during 2024, including annual retainers and fees for service in Board and Committee leadership and membership roles. Cash fees are paid quarterly in arrears. (2) Amounts shown represent the grant date fair value of restricted stock units granted during fiscal year 2024 as calculated in accordance with the Financial Accounting Standard Board's Accounting Standards Codification Topic 718, Compensation—Stock Compensation ("ASC Topic 718"). (3) The restricted stock units granted to the directors represent the annual grants of restricted stock units described in the narrative above and will vest on May 20, 2025, the date of the 2025 Annual Meeting, since it is earlier than May 21, 2025, which is the first anniversary of the grant date, subject to the respective director's continued service on the vesting date. (4) Amounts shown represent the grant date fair value of options granted during fiscal year 2024 as calculated in accordance with ASC Topic 718 and the assumptions outlined in Note 11 of our financial statements included in our 2024 Annual Report. (5) All options have an exercise price equal to the closing price of our common stock on the Nasdaq stock market on the grant date. The options granted to the directors represent the annual option grant described in the narrative above and vest as to 1/12th of the underlying shares on each monthly anniversary of the grant date, provided that the last installment will vest on May 20, 2025, the date of the 2025 Annual Meeting, since it is earlier than May 21, 2025, which is the first anniversary of the grant date, subject to the respective director's continued service on the vesting date. (6) Director James T. Treace has elected to decline the option and restricted stock unit grants that would be awarded under the non-employee director compensation policy. The table below shows the aggregate numbers of option awards (exercisable and unexercisable) and unvested stock awards held as of December 31, 2024 by each non-employee director as of December 31, 2024.
2024 Director Compensation
| Name | Options Outstanding at Fiscal Year End | Unvested Outstanding Stock Awards at Fiscal Year End | | John K. Bakewell | 191,607 | 15,091 | | Lance A. Berry | 59,004 | 16,035 | | Lawrence W. Hamilton | 191,607 | 15,091 | | Elizabeth S. Hanna | 82,540 | 15,486 | | Deepti Jain | 82,540 | 15,486 | | Jane E. Kiernan | 59,004 | 16,035 | | Richard W. Mott | 77,430 | 15,091 | | James T. Treace | — | — |
2024 Director Compensation
| 2025 PROXY STATEMENT | 25 |
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
2024 Performance and pay highlights
and patient-specific bunion surgeries. We have also right-sized our operations, thereby reducing expenses, and improved our Adjusted EBITDA loss by more than 50%. While we made significant progress toward our strategic plans, ultimately our short-term performance metrics fell short of our challenging goals, and our annual cash incentive for the CEO and other NEOs with respect to 2024 was determined to be 12.3% of target. In 2024, we increased the performance-based elements of our annual executive compensation program by replacing a portion of the stock options in our annual equity grant mix with performance stock units (with vesting aligned to our relative total stockholder return compared to other companies in our industry) for our CEO (with performance stock units comprising 50% of his annual grant mix) and NEOs (with performance stock units comprising 25% of their annual grant mix). These changes were made to more closely align the interests of our CEO and NEOs with stockholders and incentivize them to deliver on strategies and tactics expected to facilitate our long-term success. As our strategic business transformation accelerated during 2024, we also took steps to retain key executives responsible for leading our transformation, with long-term retention awards of restricted stock units granted to NEOs (other than our CEO) in August 2024. We recognize that retention awards should be used in limited circumstances. Our Compensation Committee believed these grants were necessary to maintain leadership continuity during this period of business transformation and took these awards into account when setting 2025 target annual equity values. In addition to reducing targeted annual equity values for 2025, we are continuing to evolve our policies and practices to improve the durability of our compensation program while continuing to closely tie our NEOs' interests with stockholders by (1) implementing new stock ownership guidelines, (2) eliminating stock options as a portion of the NEOs' annual equity grants, and (3) adjusting our 2025 annual incentive bonus plan to focus on only two financial goals in 2025: revenue growth and Adjusted EBITDA (before bonus).
Compensation Design
| Type of Compensation | Compensation Component | Terms/Matrix | Purpose | | Fixed, annual | Salary | Competitive amount that reflects the executive’s skill set, experience, role, and responsibilities | Compensate executives for day-to-day performance | | Performance-based, annual | Annual cash incentive award | Payouts vary based on performance against prescribed targets for: • Revenue (70%) • Adjusted EBITDA before bonus (15%) • Active Surgeon Count (15%) | Motivate NEOs to achieve short-term financial and strategic performance goals | | Variable, long-term | Restricted stock units ("RSUs") (50% of target grant) | RSUs vest 25% on each of the first four anniversaries of the grant date so long as the recipient remains employed by the Company | Motivate NEOs to remain with the Company and align their interests with those of our stockholders | | Performance-based, long-term | Performance stock units ("PSUs") • 50% of target grant for the CEO • 25% of target for the other NEOs | Payouts, if any, vary based on our three-year relative total shareholder return ("TSR") compared to the S&P Health Care Equipment Select Index | Motivate NEOs to achieve long-term performance goals and align their interests with those of our stockholders | | | Stock options (25% of target grant for NEOs other than the CEO) | Options vest 25% on each of the first four anniversaries of the grant date so long as the recipient remains employed by the Company on each applicable vesting date, and will remain exercisable for 10 years from the grant date | Motivate NEOs to pursue actions that will increase the stock price and stockholder return | | Variable, long-term | Retention restricted stock units for NEOs other than the CEO | RSUs vest 33% on each of the first three anniversaries of the grant date so long as the recipient remains employed by the Company | Special, non-recurring award to retain and motivate NEOs during a period of significant business transformation |
Compensation-Setting Process
Compensation-Setting Process Role of the Compensation Committee. The Compensation Committee is responsible for establishing and administering the annual incentive programs for the NEOs, overseeing and administering our equity incentive plans, and setting the compensation for the NEOs other than the CEO. The Compensation Committee recommends the compensation for our CEO to the independent members of our Board for their approval. Role of Outside Consultants. From time to time, the Compensation Committee may use outside compensation consultants to assist it in analyzing our compensation programs and in determining appropriate levels of compensation and benefits. The Compensation Committee first engaged Compensia, Inc., a compensation consulting firm, to provide advice on compensation before TMCI became a publicly traded company. Since that time, Compensia also has advised the Compensation Committee regarding the selection of a group of peer companies to use for compensation benchmarking purposes, and advised on cash and equity compensation levels and methods for our executives (as well as our directors and other employees) based on current market practices.
Compensation-Setting Process
Compensia reports directly to the Compensation Committee and does not provide any non-compensation-related services to TMCI. Compensia has affirmed its independence on executive compensation matters. The Compensation Committee has evaluated Compensia on each of the six independence factors established by the SEC, and based on this assessment, the Compensation Committee determined that the engagement of Compensia does not raise any conflict of interest or similar concerns. The Compensation Committee has evaluated the independence of its other outside advisors, including outside legal counsel, considering the same independence factors, and concluded that their work for the Compensation Committee does not raise any conflict of interest. Role of Management. In performing its responsibilities, the Compensation Committee consults with members of our management, including our CEO, our CFO and our Chief Human Resources Officer. Management assists the Compensation Committee by providing information on corporate and individual performance, market compensation data, and management’s perspective on compensation matters. The Compensation Committee solicits and reviews our CEO’s recommendations and viewpoints with respect to adjustments to total direct compensation opportunities, program structures, and other compensation-related matters for our NEOs, other than with respect to the CEO’s own compensation. Our CEO is not present during any deliberations or decision-making regarding his own compensation. Role of Market Data. The Compensation Committee considers compensation benchmarking data provided by Compensia and approves a compensation comparator group annually. Our comparator group includes direct competitors as well as a broader mix of medical device, medical equipment, and health care technology companies. TMCI was in the 49th percentile of the comparator group for revenue at the time we established the 2024 peer group and at the 25th percentile for market capitalization.
Compensation-Setting Process
For 2025, after considering advice and market data prepared by Compensia, the Compensation Committee decided to adjust the comparator group by removing three companies and adding two companies. The 2025 comparator group is shown below.
Compensation-Setting Process
* Added for 2025 Glaukos and Inspire Medical Systems were removed because their revenue and market capitalization are higher than our selection parameters permit, and NuVasive was removed because it was acquired. The Compensation Committee uses data drawn from our compensation peer group to evaluate the competitive market when determining the total direct compensation packages for our executive officers, including salary, target short-term annual cash incentive award opportunities and long-term incentive compensation opportunities. Setting Target Total Direct Compensation. The Compensation Committee conducts an annual review of the compensation arrangements of our NEOs, typically during the first quarter of each fiscal year. As part of this review, the Compensation Committee evaluates base salaries, annual cash incentive opportunities, long-term equity incentive opportunities and all performance criteria associated with such incentives. In developing its recommendations, the Compensation Committee
2024 Annual Cash Incentive Plan
2024 Annual Cash Incentive Plan Our NEOs each participate in the annual cash incentive plan that provides for cash compensation based on achievement of prescribed annual performance goals, as established by our Compensation Committee and confirmed by our Board. Target Opportunities. Each NEO’s annual bonus opportunity is stated as a percentage of salary. The target short-term annual cash incentive award opportunities for our executive officers, including our NEOs, were recommended to the Compensation Committee by our CEO (except with respect to his own target short-term annual cash incentive award opportunity), and
2024 Annual Cash Incentive Plan
| 2025 PROXY STATEMENT | 35 |
2024 Annual Cash Incentive Plan
approved by the Compensation Committee (or for the CEO, the Board). The determination of target short-term annual cash incentive award opportunities was based on the factors described in "Compensation-Setting Process" above and a review of an analysis of competitive market data drawn from the compensation peer group as approved for use in 2024. For 2024, the NEOs’ bonus opportunities (other than Mr. Guglielmino) were as follows:
2024 Annual Cash Incentive Plan
| Executive | 2024 Target Bonus (%) | 2024 Target Bonus ($) | | John T. Treace | 100% | 728,000 | | Mark L. Hair | 50% | 247,500 | | Scot M. Elder | 50% | 207,500 | | Sean F. Scanlan | 50% | 212,500 |
2024 Annual Cash Incentive Plan
Mr. Guglielmino did not participate in the 2024 cash incentive plan since he joined the Company in December 2024. Performance Metrics. Our 2024 annual cash incentive plan provided for compensation based upon achievement of performance goals for revenue growth, Adjusted EBITDA (before bonus), and active surgeon count.
2024 Annual Cash Incentive Plan
| Performance Metric | Weighting | Why this Metric was chosen | | Revenue Growth | | Key financial metric used by investors to evaluate the Company's growth and adoption of our products | | Adjusted EBITDA (before bonus) | | Key financial metric used by investors to measure the Company's path to profitability and ability to meet its debt service obligations | | Active Surgeon Count | | Key operational metric to support continued adoption of our products |
2024 Annual Cash Incentive Plan
For each performance metric, the Compensation Committee, after consultation with the management team, established threshold, target, and maximum goals, as shown below.
2024 Annual Cash Incentive Plan
| Metric | Weight | Threshold (50% payout) | Target (100% payout) | Maximum (150% payout) | | Revenue growth(1) | 70% | 12.4% | 24.9% | 37.4% | | Adjusted EBITDA (before bonus)(2) | 15% | ($7,380) | $1,037 | $9,453 | | Increase in active surgeon count(3) | 15% | 2.5% | 13.8% | 25.2% |
2024 Annual Cash Incentive Plan
(1) Revenue growth is based on the change in our revenue (as reported in our financial statements) year over year. (2) Adjusted EBITDA is a non-GAAP financial measure that the Company defines as net loss before depreciation and amortization expense, interest income, interest expense, taxes, share-based compensation expense, acquisition-related costs, restructuring costs, customer credit loss, litigation costs, and debt extinguishment loss. For purposes of the 2024 annual incentive plan, the Adjusted EBITDA metric also excludes the costs of bonus payments under this annual incentive plan. Active surgeons count is the number of surgeons that performed at least one procedure using one of our systems in the trailing 12-month period.
2024 Annual Cash Incentive Plan
| 36 | |
2024 Annual Cash Incentive Plan
2024 Performance Results and Payouts. Our Compensation Committee determined in early 2025 the performance results for purposes of the 2024 annual cash incentive plan as shown below.
2024 Annual Cash Incentive Plan
| Metric | Weight | Target (100% payout) ($ in thousands) | Results ($ in thousands) | Achievement (% of target) | Weighted payout | | Revenue growth | 70% | 24.9% | 11.9% | Below threshold | 0% | | Adjusted EBITDA (before bonus) | 15% | $1,037 | ($7,689) | Below threshold | 0% | | Increase in active surgeon count | 15% | 13.8% | 9.8% | 96.5% | 12.3% | | Final Payout | | | | | 12.3% |
2024 Annual Cash Incentive Plan
Based on the 12.3% payout earned, in early 2025 the Compensation Committee (and for our CEO, the Board) approved the following annual cash incentives for the NEOs in 2024:
2024 Annual Cash Incentive Plan
| Executive | 2024 Target Bonus | 2024 Actual Bonus | | John T. Treace | $728,000 | $89,880 | | Mark L. Hair | $247,500 | $30,557 | | Scot M. Elder | $207,500 | $25,618 | | Sean F. Scanlan | $212,500 | $26,236 |
2024 Annual Cash Incentive Plan
Mr. Guglielmino was not eligible for a bonus since he joined the Company in December 2024. Enhancements for 2025. For 2025, consistent with its increased emphasis on financial performance, the Compensation Committee eliminated the “active surgeon count” metric and adjusted the weighting of the revenue metric to 60% and the Adjusted EBITDA (before bonus) metric to 40%. Full details regarding the 2025 annual cash incentive plan will be provided in next year’s proxy statement.
Long-Term Equity Incentive Compensation
Long-Term Equity Incentive Compensation Annual Long-Term Incentive Awards. The Compensation Committee generally grants equity awards to the NEOs every year in the first fiscal quarter. Long-term incentive compensation opportunities in the form of equity awards are granted by the Compensation Committee (except for the CEO, which is granted by the Board). The amount and forms of such equity awards are determined by the Compensation Committee after considering the factors described in "Compensation-Setting Process" above and reviewing an analysis of competitive market data drawn from the compensation peer group as approved for use in 2024. As shown below, for 2024, our CEO was granted RSUs and PSUs in equal proportions. The NEOs other than the CEO received the target value of their equity grants in RSUs (50%), PSUs (25%), and options to purchase our common stock (25%).
Long-Term Equity Incentive Compensation
| Executive | Options (#) | RSUs (#) | PSUs (#) | Target Grant Value ($)(1) | | John T. Treace | — | 178,325 | 178,325 | $4,800,000 | | Mark L. Hair | 104,600 | 92,875 | 46,450 | $2,500,000 | | Scot M. Elder | 69,050 | 61,300 | 30,650 | $1,650,000 | | Sean F. Scanlan | 73,200 | 65,025 | 32,525 | $1,750,000 |
Long-Term Equity Incentive Compensation
Actual grant date fair value of awards may differ from the target grant value, based on fluctuations in our stock price between the time that the awards are considered and approved by the Compensation Committee and the date of grant. The grant date fair value of each RSUs was based on our closing stock price of $13.46 on the date of grant, January 10, 2024. Each option has an exercise price of $13.46, which was equal to our closing trading price on the date of the grant.
Long-Term Equity Incentive Compensation
| 2025 PROXY STATEMENT | 37 |
Long-Term Equity Incentive Compensation
Restricted Stock Units. 25% of the RSUs will vest on each of the first four anniversaries of the grant date subject to the recipient's continued service with the Company on the applicable vesting date. Stock Options. 25% of the shares subject to the Option will vest on each of the first four anniversaries of the grant date subject to the recipient's continued service with the Company on the applicable vesting date and will remain exercisable for 10 years from the grant date. Performance Stock Units. The PSUs vest, if at all, based on our relative total shareholder return performance as compared to the S&P Health Care Equipment Select Index over a three-year performance period, with interim earning opportunities after the first and second years of the performance period. The relative return factor for each performance period is calculated based on the following scale:
Long-Term Equity Incentive Compensation
| | TMCI 3-year relative TSR vs. Index | PSU Funding (% of Target) | | Max | 75th percentile | 200% | | Target | 50th percentile | 100% | | Threshold | 25th percentile | 50% |
Long-Term Equity Incentive Compensation
The number of PSUs that are deemed to be earned at the end of each one- and two-year performance periods is determined by taking one-third of the NEO’s target PSUs multiplied by the relative return factor for the relevant performance period measured as of the end of such interim performance periods, although such amount is capped at 100% of one-third of the NEO's target PSUs. The number of PSUs that vests at the end of the three-year performance period is determined by taking the total number of the NEO’s target PSUs multiplied by the relative return factor for the three-year performance period, and then subtracting any shares of our common stock earned in the one-year and two-year performance periods from the result. The total number of shares vested in the one-year and two-year periods is not retroactively adjusted if the three-year calculation, less shares earned in prior periods, is a negative number. Our relative TSR will be measured based on 30-trading-day average stock price immediately before the beginning of the performance period to the 30-trading-day average stock price at the end of the performance period, measured cumulatively over the given performance period beginning January 1, 2024. In the event that a change in control (as defined in the 2021 Plan) occurs before the end of the performance period and subject to the applicable NEO’s continued service immediately before the closing of such change in control, then the
Long-Term Equity Incentive Compensation
| 38 | |
Long-Term Equity Incentive Compensation
performance stock units will convert into time-based restricted stock units immediately before the change in control with the number of converted time-based RSUs equal to the greater of (1) the interim earned performance stock units or (2) the number of performance stock units that would have vested based on actual performance using the change in control price. The time-based restricted stock units granted in 2024 will then vest on December 31, 2026, subject to the NEO’s continued service through the vesting date. Regardless of our relative TSR performance, individual payouts (taking into account the performance multiplier and any increases in the stock price) cannot exceed 7.5 times the target value of the recipient’s grant. Since our relative TSR did not meet 25th percentile for the one-year performance period ending December 31, 2024, none of the target shares were deemed earned at the end of the one-year performance period. Long-Term Retention Awards. In August 2024, the Compensation Committee granted retention awards in the form of RSUs to all of the NEOs other than the CEO. These awards, which are intended to retain and motivate our talented senior management team through our business transformation that was underway, will vest in three equal installments over three years on the first, second and third anniversaries of the grant date (subject to the applicable NEO's continued service through the vesting date.) When making these grants, the Compensation Committee considered the Company’s minimal use of time-based equity prior to 2023 and the fact that outstanding stock option awards from prior years are unlikely to provide significant value due to a significant number of such options being underwater, which diminishes their usefulness as a tool for retention or motivation. The 2024 retention awards were granted in the target amounts shown below
Long-Term Equity Incentive Compensation
| Executive | 2024 Target Retention Award | No. of RSUs granted | | John T. Treace | N/A | — | | Mark L. Hair | $1,200,000 | 207,260 | | Scot M. Elder | $750,000 | 129,540 | | Sean F. Scanlan | $700,000 | 120,900 |
Long-Term Equity Incentive Compensation
Mr. Guglielmino was not an officer at the time the 2024 retention awards were made. In late October 2024, when seeking to recruit Mr. Guglielmino to join the Company as Chief Commercial Officer, the Compensation Committee set the target award value for Mr. Guglielmino's initial equity grant at 330,000 RSUs (with a target award value of $1,750,000). Additionally, to compensate Mr. Guglielmino for incentive pay that he would be foregoing with his former employer, the Compensation Committee approved offering him a signing bonus consisting of $100,000 in cash and a grant of 33,000 RSU (with a target award value of $175,000). The RSUs were granted on December 1, 2024 which coincided with Mr. Guglielmino's first day of employment. These RSUs vest over four years from the grant date in 25% annual installments on the first four anniversaries of the grant date, subject to Mr. Guglielmino's continued service through each such vesting date. Enhancements for 2025. We recognize that retention awards should only be used in limited circumstances. To minimize the need for retention grants in the future, we have evolved the structure of our 2025 long-term equity awards for NEOs (other than the CEO) to eliminate the use of stock options. Accordingly, in 2025, awards for all NEOs will consist of only RSUs and PSUs as follows:
Long-Term Equity Incentive Compensation
| Officer Role | RSUs (% of target grant) | PSUs (% of target grant) | | Chief Executive Officer | 50% | 50% | | Other NEOs | 75% | 25% |
Long-Term Equity Incentive Compensation
The Compensation Committee believes the elimination of stock options will improve the durability of our long-term incentive program across market and business conditions, while continuing to focus NEOs on our long-term success and align their interests with those of our stockholders. Previously Granted in-Cycle Long-Term Equity Awards. As previously disclosed in the proxy statement filed in 2023, in July 2023, we granted PSU awards to our senior management team, including the NEOs. The actual number of PSUs that vest, if
Long-Term Equity Incentive Compensation
| 2025 PROXY STATEMENT | 39 |
Long-Term Equity Incentive Compensation
any, will be determined in July 2025 based on the Company's TSR relative to the TSR of the S&P Health Care Equipment Select Index. Accordingly, the performance results of this award will be disclosed in next year’s proxy statement. Special Performance-Based Incentive for Chief Legal Officer. During 2024, Mr. Elder, our Chief Legal and Compliance Officer, assumed significant additional work in managing a complex and significant lawsuit, the outcome of which was critical to the execution of our future business objectives. Given Mr. Elder’s institutional knowledge of the matters involved and importance of retaining him, the Compensation Committee determined that a special incentive arrangement for Mr. Elder was necessary and appropriate to retain and compensate him for these additional responsibilities while directly aligning his incentives with the successful navigation of this litigation. Accordingly, the Compensation Committee approved (1) in September 2024, the grant to Mr. Elder restricted stock units for 200,000 shares with a target value of $1,200,000, which vest over three years from the grant date in equal annual installments on the first three anniversaries of the grant date, subject to Mr. Elder's continued service through each applicable vesting date, and (2) in November 2024, a special incentive arrangement for Mr. Elder that provided for cash payments of up to $500,000 and the grant of restricted stock units for up to 31,100 shares upon achievement of certain milestones in the lawsuit. In accordance with this arrangement, Mr. Elder was awarded a portion of these incentives upon filing of the lawsuit, which included a cash incentive payment of $125,000 and the grant of 15,550 shares of restricted stock units that vested on November 11, 2024. In the event of a change in control (as defined in the 2021 Plan) before vesting in full of the cash bonus and equity awards, the then-unvested restricted stock units will vest in full and the then-unpaid bonus will be paid in full as of immediately prior to the closing of such change in control, subject to Mr. Elder's continued employment through such date.
Compensation-Related Policies
*Excludes fees for Committee or Board leadership service. Shares of our common stock that count toward the minimum ownership requirement will include (1) common stock (including restricted common stock that vests solely based on the passage of time) that are not subject to transfer or other restrictions (other than vesting restrictions) held directly by the individual or immediate family members residing in the same household; held in a grantor trust for the benefit of the individual or immediate family members residing in the same household; or owned by a partnership, limited liability company, trust or other entity to the extent of the individual’s interest (or the interest of immediate family members residing in the same household) if the individual has or shares powers to vote or dispose of the shares; (2) common stock subject to outstanding restricted stock unit awards (including vested deferred stock units held under a deferred compensation plan) that vest solely based on the passage of time; and (3) common stock acquired under any employee stock purchase or 401(k) plan. Shares that count toward satisfaction of the minimum ownership requirement will not include (i) shares subject to outstanding and unexercised stock options, whether vested or unvested and whether exercisable or unexercisable; (ii) performance-based vesting restricted common stock or other performance-based incentive awards with respect to the extent applicable performance goals have not been achieved; and (ii) all other forms of derivative securities. The executive officers and directors are expected to achieve the applicable ownership level no later than December 31, 2030 or, if later, the fifth anniversary of their appointments to such roles. Compliance with the stock ownership guidelines will be measured as of the last trading day before December 31 of each year, beginning December 31, 2030. As of the record date for the Annual Meeting, all of our executive officers and directors were still within the five-year accumulation period under the stock ownership guidelines, and therefore in compliance with the stock ownership guidelines. Equity Award Timing Policies and Practices. Grants of options to purchase our common stock, including for our NEOs, are generally based upon a predetermined schedule each year as a part of the annual compensation process as described in the “Long-Term Equity Incentive Compensation” section above. If annual long-term incentive compensation is determined to be appropriate, our Board, the Compensation Committee or applicable designee approves any annual grants of options for continuing employees in the first fiscal quarter commensurate with the prescheduled Board and Committee meetings. The grant dates of these options are generally selected so as not to be within a short period of time, as described in the SEC’s Staff Accounting Bulletin 120 (“SAB 120”), prior to the release of material nonpublic information (“MNPI”) such as on Forms 8-K, 10-Q or 10-K. Grants of options may occur at other times during the year due to business needs, such as for a newly hired employees or officers or newly appointed Board members. The Board, Compensation Committee, or applicable designee does not anticipate the timing of disclosure of MNPI when determining the timing and terms of such awards, and we do not time the release of MNPI for the purpose of affecting the value of executive compensation. Generally, exercise prices are based on the closing price of the underlying common stock on the grant date, subject to the applicable rules for non-qualified stock options and incentive stock options under the 2021 Plan. Vesting dates for options typically follow a standard monthly cadence and are not timed to anticipate the release of MNPI. There were no grants of options to our NEOs within four business days before or one business day after the release of MNPI on Forms 8-K, 10-Q or 10-K in 2024. As such, no table of such option grants is presented under Item 402(x) of Regulation S-K.
Summary Compensation Table
Summary Compensation Table The following table sets forth total compensation paid to our NEOs for services performed in 2022, 2023 and 2024.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($) | Total ($) | | John T. Treace | 2024 | 723,410 | — | 5,768,814 | — | 89,880 | 15,056(3) | 6,597,160 | | Chief Executive Officer, | 2023 | 684,384 | — | 5,350,966 | 1,977,589 | 393,000 | 16,696 | 8,422,635 | | Director and Founder | 2022 | 568,219 | — | 648,706 | 1,931,854 | 457,000 | 11,470 | 3,617,249 | | Mark L. Hair | 2024 | 490,082 | — | 3,327,573 | 625,822 | 30,557 | 11,268(4) | 4,485,302 | | Chief Financial Officer | 2023 | 457,973 | — | 2,987,977 | 1,098,837 | 130,500 | 11,222 | 4,686,509 | | | 2022 | 404,109 | — | 228,843 | 680,527 | 213,500 | 10,991 | 1,537,970 | | Scot M. Elder | 2024 | 409,262 | — | 3,571,932(5) | 413,126 | 150,619(5) | 5,676(6) | 4,550,615 | | Chief Legal & Compliance | 2023 | 376,822 | — | 2,008,556 | 659,196 | 106,750 | 5,292 | 3,156,616 | | Officer, Corporate Secretary | 2022 | 309,466 | — | 200,718 | 616,659 | 190,000 | 5,015 | 1,321,857 | | Sean F. Scanlan | 2024 | 419,262 | — | 2,189,645 | 437,956 | 26,235 | 12,337(7) | 3,085,435 | | Chief Innovation Officer | 2023 | 380,630 | — | 1,898,436 | 549,683 | 109,500 | 11,629 | 2,949,878 | | | 2022 | 321,370 | — | 203,397 | 607,841 | 195,000 | 10,574 | 1,338,182 | | Gaetano M. Guglielmino (8) | 2024 | 37,268 | 100,000(9) | 3,092,760 | — | — | 70(10) | 3,230,098 | | Chief Commercial Officer | | | | | | | | |
Summary Compensation Table
(1) The amounts reported represent the aggregate grant-date fair value of the restricted stock units, performance-based restricted stock units or stock options awarded to the NEOs, calculated in accordance with ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 11 to our financial statements in our 2024 Annual Report. For purposes of our performance-based restricted stock units, which vest based on the attainment of certain relative total stockholder return metrics (as described in the section above entitled "Compensation Discussion and Analysis—Long Term Equity Incentive Compensation"), the grant date fair value included is based on the probable achievement of such metrics. (2) Annual cash incentive amounts for all NEOs in 2024 were paid in March 2025, under our annual cash incentive plan for 2024, as described in the section above entitled "Compensation Discussion and Analysis—2024 Annual Cash Incentive Plan." (3) The amount reported in 2024 for Mr. Treace includes $837 for life insurance premiums and $14,219 for the Company’s match of Mr. Treace's contributions to our 401(k) plan, which are available to the NEOs on the same basis as other full-time employees. (4) The amount reported in 2024 for Mr. Hair includes life insurance premiums of $837 and the Company’s match of his contributions to our 401(k) plan of $10,431, which are available to the NEOs on the same basis as other full-time employees. (5) As described in the section above entitled "Compensation Discussion and Analysis—Special Performance-Based Incentive for Chief Legal Officer," amounts include (1) the grant-date fair value of RSUs for 200,000 shares awarded in September 2024 and (2) upon achievement of the performance-based milestone of the filing of a significant lawsuit to protect our intellectual property and other rights, a cash incentive of $125,000 and the grant-date fair value of RSUs for 15,550 shares awarded in November 2024. (6) The amount reported in 2024 for Mr. Elder includes life insurance premiums of $837 and the Company’s match of his contributions to our 401(k) plan of $4,838, which are available to the NEOs on the same basis as other full-time employees. (7) The amount reported in 2024 for Mr. Scanlan includes life insurance premiums of $837 and the Company’s match of his contributions to our 401(k) plan of $11,500, which are available to the NEOs on the same basis as other full-time employees. (8) Mr. Guglielmino became our Chief Commercial Officer in December 2024. (9) Mr. Guglielmino received a one-time, cash signing bonus of $100,000 when he joined the Company. The amount reported in 2024 for Mr. Guglielmino includes life insurance premiums of $70.
Summary Compensation Table
| 2025 PROXY STATEMENT | 43 |
Grants of Plan-Based Awards for 2024
Grants of Plan-Based Awards for 2024 The following table sets forth information regarding grants of plan-based awards to our NEOs during 2024.
Grants of Plan-Based Awards for 2024
| | | Estimated future payouts under non- equity incentive plan awards(1) | | | Estimated future payouts under equity incentive plan awards(2) | | | | | | | | Name | Grant date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All other stock awards: Number of shares of stock or units (#)(3) | All other option awards: Number of securities underlying options (#) | Exercise or base price of option awards ($/Sh) | Grant date fair value of stock and options awards ($)(4) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | | John T. | — | 364,000 | 728,000 | 1,092,000 | — | — | — | — | — | — | — | | Treace | 1/10/2024 | — | — | — | 89,163 | 178,325 | 356,650 | — | — | — | 3,368,559 | | | 1/10/2024 | — | — | — | — | — | — | 178,325 | — | — | 2,400,255 | | Mark L. Hair | — | 123,750 | 247,500 | 371,250 | — | — | — | — | — | — | — | | | 1/10/2024 | — | — | — | 23,225 | 46,450 | 92,900 | — | — | — | 877,441 | | | 1/10/2024 | — | — | — | — | — | — | 92,875 | — | — | 1,250,098 | | | 1/10/2024 | — | — | — | — | — | — | — | 104,600 | 13.46 | 625,822 | | | 8/9/2024 | — | — | — | — | — | — | 207,260 | — | — | 1,200,035 | | Scot M. Elder | — | 103,750 | 207,500 | 311,250 | — | — | — | — | — | — | — | | | 1/10/2024 | — | — | — | 15,325 | 30,650 | 61,300 | — | — | — | 578,979 | | | 1/10/2024 | — | — | — | — | — | — | 61,300 | — | — | 825,098 | | | 1/10/2024 | — | — | — | — | — | — | — | 69,050 | 13.46 | 413,126 | | | 8/9/2024 | — | — | — | — | — | — | 129,540 | — | — | 750,037 | | | 9/30/2024 | — | — | — | — | — | — | 200,000 | — | — | 1,160,000 | | | 11/11/2024 | 125,000(5) | 500,000(5) | N/A | 15,550(6) | 31,100(6) | N/A | — | — | — | 257,819 | | Sean F. | — | 106,250 | 212,500 | 318,750 | — | — | — | — | — | — | — | | Scanlan | 1/10/2024 | — | — | — | 16,263 | 32,525 | 65,050 | — | — | — | 614,397 | | | 1/10/2024 | — | — | — | — | — | — | 65,025 | — | — | 875,237 | | | 1/10/2024 | — | — | — | — | — | — | — | 73,200 | 13.46 | 437,956 | | | 8/9/2024 | — | — | — | — | — | — | 120,900 | — | — | 700,011 | | Gaetano M. | 12/1/2024 | — | — | — | — | — | — | 330,000 | — | — | 2,811,600 | | Guglielmino | 12/1/2024 | — | — | — | — | — | — | 33,000 | — | — | 281,160 |
Grants of Plan-Based Awards for 2024
(1) These columns set forth the potential threshold, target and maximum annual cash bonus awards for each NEO under our 2024 cash incentive program based on each NEO’s annual salary and target bonus percentage for 2024. The threshold amounts assume achievement of the minimum threshold for each of the three performance metrics (revenue growth, Adjusted EBITDA (before bonus), and increase in active surgeon count), resulting in 50% payout. The target amounts assume achievement at the target level for each of the three performance goals, resulting in 100% payout. The maximum amounts assume achievement at 110% of the target level for each of the three performance goals, resulting in 150% payout. The actual cash incentive award earned for 2024 by each NEO is set forth in the “Non-Equity Incentive Plan Compensation” column of the 2024 Summary Compensation Table above. These awards are described in further detail above in the section entitled "Compensation Discussion and Analysis—2024 Annual Cash Incentive Plan." This column also includes the cash incentive granted to Mr. Elder in November 2024 tied to certain milestones related to the complex and significant lawsuit he is managing. See the section above entitled "Compensation Discussion and Analysis—Special Performance-Based Incentive for Chief Legal Officer" and Notes 5 and 6 below for more information. The columns set forth the potential threshold, target and maximum number of shares underlying the PSUs granted as of January 10, 2024 that may vest based on the Company's TSR relative to the S&P Healthcare Equipment Select Industry Index over a three-year performance period. The threshold amounts assume that our relative TSR is at the 25th percentile, resulting in the NEO being granted 50% of the target number of shares underlying the PSU. The target amounts assume that our relative TSR is at the 50th percentile, resulting in the NEO being granted the target number of shares underlying the PSU. The maximum amounts assume that our relative TSR is at the 75th percentile, resulting in the NEO being granted 200% of the target number of shares underlying the PSU. This column also includes the PSUs granted to Mr. Elder in November 2024 tied to certain milestones related to the complex and significant lawsuit that he is managing. See the section above entitled "Compensation
Grants of Plan-Based Awards for 2024
| 44 | |
Grants of Plan-Based Awards for 2024
Discussion and Analysis—Special Performance-Based Incentive for Chief Legal Officer" and Notes 5 and 6 below for more information. The column sets forth the number of RSUs granted to our NEOs in 2024. The RSUs granted on January 10, 2024 vest over four years from the grant date in 25% annual installments on the first four anniversaries of the grant date, subject to the applicable NEO’s continued service through each applicable vesting date. The RSUs granted in August 9, 2024 vest over three years from the grant date in equal annual installments on the first three anniversaries of the grant date, subject to the applicable NEO’s continued service through each such vesting date. This column also includes the initial commencement of employment RSUs and signing bonus RSUs, each of which were granted to Mr. Guglielmino on December 1, 2024 in connection with the commencement of his employment and which vest over four years from the grant date in 25% annual installments on the first four anniversaries of the grant date, subject to Mr. Guglielmino’s continued service through each vesting date. See the section above entitled "Compensation Discussion and Analysis—Long-Term Equity Incentive Compensation" for more information. (4) This column sets forth the grant-date fair value of the stock options, PSUs and RSUs awarded to the NEOs in 2024, calculated in accordance with ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 11 to our financial statements in our 2024 Annual Report. For purposes of our performance-based restricted stock units, which vest based on the attainment of certain relative total stockholder return metrics (as further described above), the grant date fair value included is based on the probable achievement of such metrics. (5) On November 11, 2024, the Compensation Committee approved a special incentive arrangement with Mr. Elder that provided for cash payments of up to $500,000 upon achievement of certain milestones related to a complex and significant lawsuit that he is managing. Based on achievement of the first milestone (the filing of the lawsuit), Mr. Elder was awarded a cash incentive payment of $125,000. The amounts reported show the amount already paid as the threshold and the full $500,000 cash incentive as the target amount. Under the special incentive arrangement with Mr. Elder, the Compensation Committee approved the grant of restricted stock units for up to 31,100 shares upon achievement of certain milestones related to the complex and significant lawsuit. Based on achievement of the first milestone, Mr. Elder was granted 15,550 RSUs, which vested on the date of the Compensation Committee's approval. The amounts reported show the number of RSUs that have already vested as the threshold amount and the full 31,100 RSUs as the target amount.
Grants of Plan-Based Awards for 2024
| 2025 PROXY STATEMENT | 45 |
Outstanding Equity Awards at 2024 Fiscal Year-End
Outstanding Equity Awards at 2024 Fiscal Year-End The following table sets forth information regarding outstanding stock options and stock awards held by our NEOs as of December 31, 2024. The market value of the awards is determined by multiplying the number of unvested shares or units by $7.44, the closing price of the Company’s common stock on Nasdaq on December 31, 2024, the last trading day of 2024. For those awards that are subject to performance-based conditions as described in the footnotes below, the number of shares reflects performance assuming achievement at target unless otherwise noted. The equity awards below are subject to certain vesting acceleration provisions as provided in the applicable equity award agreements or an individual agreement with the applicable NEO, as discussed in the sections entitled “Executive Compensation Arrangements” and the “Potential Payments Upon Termination or Change in Control."
Outstanding Equity Awards at 2024 Fiscal Year-End
| | Option Awards | | | | | Stock Awards | | | | | Name | Vesting Commencement Date(1) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or units of stock that have not vested | Market Value of shares or units of stock that have not vested | Equity Incentive Plan Awards: Number of Shares or units of stock that have not vested | Equity Incentive Plan Awards: Market Value of shares or units of stock that have not vested ($) | | John T. | 03/08/2022 | 120,284 | 120,282 | $19.15 | 3/8/2032 | 16,937 | $126,011 | — | — | | Treace | 03/08/2022 | 10,442 | 10,442 | $21.07 | 3/8/2027 | — | — | — | — | | | 03/10/2023 | 46,725 | 140,175 | $24.07 | 3/10/2033 | 61,856 | $460,209 | — | — | | | 07/24/2023(2) | — | — | — | — | — | — | 107,225 | $797,754 | | | 01/10/2024(3) | — | — | — | — | 178,325 | $1,326,738 | 178,325 | $1,326,738 | | Mark L. Hair | 9/21/2020 | 320,999 | — | $5.84 | 9/21/2030 | — | — | — | — | | | 10/20/2020 | 214,000 | — | $5.84 | 10/20/2030 | — | — | — | — | | | 2/02/2021 | 8,025 | 2,675 | $7.03 | 2/2/2031 | — | — | — | — | | | 4/22/2021 | 70,219 | 23,406 | $17.00 | 4/22/2031 | — | — | — | — | | | 3/8/2022 | 46,050 | 46,050 | $19.15 | 3/8/2032 | 5,974 | $44,447 | — | — | | | 3/10/2023 | 25,963 | 77,887 | $24.07 | 3/10/2033 | 34,368 | $255,698 | — | — | | | 7/24/2023(2) | — | — | — | — | — | — | 60,050 | $446,772 | | | 1/10/2024(3) | — | 104,600 | $13.46 | 1/10/2034 | 92,875 | $690,990 | 46,450 | $345,588 | | | 8/9/2024(4) | — | — | — | — | 207,260 | $1,542,014 | — | — | | Scot M. | 10/25/2021 | 75,000 | 25,000 | $22.13 | 10/25/2031 | 2,500 | $18,600 | — | — | | Elder | 3/8/2022 | 11,050 | 11,050 | $19.15 | 3/8/2032 | 1,437 | $10,691 | — | — | | | 10/1/2022 | 23,500 | 23,500 | $22.07 | 10/1/2032 | 3,300 | $24,552 | — | — | | | 3/10/2023 | 15,575 | 46,725 | $24.07 | 3/10/2033 | 20,625 | $153,450 | — | — | | | 7/24/2023(2) | — | — | — | — | — | — | 42,900 | $319,176 | | | 1/10/2024(3) | — | 69,050 | $13.46 | 1/10/2034 | 61,300 | $456,072 | 30,650 | $228,036 | | | 8/9/2024(4) | — | — | — | — | 129,540 | $963,778 | — | — | | | 9/30/2024(4) | — | — | — | — | 200,000 | $1,488,000 | — | — | | | 11/11/2024(5) | — | — | — | — | — | — | 15,550 | $115,692 | | Sean F. | 7/28/2015 | 33,437 | — | $0.72 | 7/28/2025 | — | — | — | — | | Scanlan | 1/26/2016 | 53,500 | — | $0.72 | 1/26/2026 | — | — | — | — | | | 1/30/2017 | 66,875 | — | $1.05 | 1/30/2027 | — | — | — | — | | | 1/23/2018 | 124,148 | — | $1.05 | 1/23/2028 | — | — | — | — | | | 1/22/2019 | 33,819 | — | $1.57 | 1/22/2029 | — | — | — | — | | | 4/23/2019 | 46,992 | — | $1.57 | 4/23/2029 | — | — | — | — | | | 1/21/2020 | 42,131 | — | $4.02 | 1/21/2030 | — | — | — | — | | | 2/2/2021 | 22,068 | 7,356 | $7.03 | 2/2/2031 | — | — | — | — | | | 4/22/2021 | 50,157 | 16,718 | $17.00 | 4/22/2031 | — | — | — | — | | | 3/8/2022 | 50,650 | 25,324 | $19.15 | 3/8/2032 | 3,287 | $24,455 | — | — | | | 10/24/2022 | 11,500 | 11,500 | $22.79 | 10/24/2032 | 1,700 | $12,648 | — | — | | | 3/10/2023 | 12,988 | 38,962 | $24.07 | 3/10/2033 | 17,193 | $127,916 | — | — | | | 7/24/2023(2) | — | — | — | — | — | — | 42,900 | $319,176 | | | 1/10/2024(3) | — | 73,200 | $13.46 | 1/10/2034 | 65,025 | $483,786 | 32,525 | $241,986 | | | 8/9/2024(4) | — | — | — | — | 120,900 | $899,496 | — | — | | Gaetano M. | 12/1/2024 | — | — | — | — | 330,000 | $2,455,200 | — | — | | Guglielmino | 12/1/2024 | — | — | — | — | 33,000 | $245,520 | — | — |
Outstanding Equity Awards at 2024 Fiscal Year-End
| 46 | |
Outstanding Equity Awards at 2024 Fiscal Year-End
Unless otherwise noted, the options, restricted stock and RSUs vest over four years from the grant date in 25% annual installments on the first four anniversaries of the grant date, subject to the applicable NEO’s continued service through the applicable vesting date. (2) These PSUs vest on July 24, 2025, the second anniversary of the grant date, subject to the applicable NEO’s continued service through such vesting date. The number of shares earned (if any) will depend based on the Company's TSR ranking relative to the TSR of the S&P Health Care Equipment Select Index as described in the Compensation Discussion and Analysis section above under the heading "Long-Term Equity Incentive Compensation - Previously Granted in-Cycle Long-Term Equity Awards." The individual PSU award agreements provide that in the event of a change in control before July 24, 2025, the Company's relative TSR performance and earned shares will be determined based on the final transaction price at deal closing. Those earned shares will then convert to time-based RSUs vesting on July 24, 2025, subject to continued service through the vesting date. (3) The Options and RSUs vest in accordance with footnote 1 above. The PSUs vest on December 31, 2026, the end of the three-year performance period, subject to the applicable NEO’s continued service through such vesting date. The number of shares earned (if any) will depend based on the Company's TSR ranking relative to the TSR of the S&P Health Care Equipment Select Index as described in the Compensation Discussion and Analysis section above under the heading "Long-Term Equity Incentive Compensation - Previously Granted in-Cycle Long-Term Equity Awards." The individual PSU award agreements provide that in the event of a change-in-control before December 31, 2026, the Company's relative TSR performance and earned shares will be determined based on the final transaction price at deal closing. Those earned shares then convert to time-based RSUs vesting on December 31, 2026, subject to continued service through such vesting date. (4) These RSUs vest over three years from the grant date in equal annual installments on the first three anniversaries of the grant date, subject to the applicable NEO’s continued service through each applicable vesting date. (5) These RSUs were granted under the special incentive arrangement and will vest upon achievement of certain performance milestone related to a complex and significant lawsuit.
Options Exercised and Stock Vested
Options Exercised and Stock Vested The following table sets forth information regarding options exercised, and the number of shares of common stock acquired upon the vesting of RSUs, in each case, by our NEOs during 2024.
Options Exercised and Stock Vested
| | Option awards | | Stock awards | | | Name | Number of shares acquired on exercise (#) | Value realized on exercise ($)(1) | Number of shares acquired on vesting (#) | Value realized on vesting ($)(2) | | John T. Treace | — | — | 29,088 | 375,534 | | Mark L. Hair | — | — | 14,445 | 186,111 | | Scot M. Elder | — | — | 27,294 | 247,139 | | Sean F. Scanlan | 33,750 | 167,495 | 8,226 | 99,260 | | Gaetano M. Guglielmino | — | — | — | — |
Options Exercised and Stock Vested
(1) Based upon the closing price of a share of our common stock on the date of exercise less the exercise price of the associated stock option multiplied by the number of shares of our common stock exercised. Based upon the closing price of a share of our common stock on the date of vesting multiplied by the number of shares of our common stock that vested.
Options Exercised and Stock Vested
| 2025 PROXY STATEMENT | 47 |
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control As described above, we have entered into change in control severance agreements with each of our NEOs, and several of our individual award agreements provide for certain treatment upon a change in control as described above. The table below describes the payments that may be made to our NEOs upon certain types of termination events, assuming the termination event occurred on December 31, 2024, the last trading day of 2024 (except as otherwise noted). The table below also discusses certain potential payments on a change in control (assuming in such change in control all outstanding awards are assumed, substituted or continued by the successor entity). Potential payments associated with the PSUs are described in footnote 2 of the following table. Our NEOs are not entitled to any payments and benefits if their employment is terminated for cause or they resign without good reason, retire, or are terminated due to death or disability. Except for the cash and performance equity award to Mr. Elder made in November 2024, we do not have any agreements or other arrangements with our NEOs that provide for payments and benefits solely upon a change in control of the Company without an accompanying termination of employment.
Potential Payments upon Termination or Change in Control
| Triggering Event | Cash Severance Payment(1) | Value of Stock Based Rights(2) | Value of Welfare Benefits(3) | Fees and Expenses of Outplacement Firm(4) | Total(5) | | John T. Treace | | | | | | | Termination without Cause or with Good Reason | $1,456,000 | — | $34,578 | $10,000 | $1,500,578 | | Termination without Cause or with Good Reason within 3 months prior to or 18 months after a Change in Control | $2,184,000 | $4,037,450 | $51,867 | $10,000 | $6,283,317 | | Change in Control | — | — | — | — | — | | Mark L. Hair | | | | | | | Termination without Cause or with Good Reason | $742,500 | — | $34,578 | $10,000 | $787,078 | | Termination without cause or with Good Reason within 3 months prior to or 18 months after a Change in Control | $742,500 | $3,326,611 | $51,867 | $10,000 | $4,130,978 | | Change in Control | — | — | — | — | — | | Scot M. Elder | | | | | | | Termination without Cause or with Good Reason | $622,500 | — | $32,736 | $10,000 | $665,236 | | Termination without Cause or with Good Reason within 3 months prior to or 18 months after a Change in Control | $622,500 | $3,778,047 | $49,104 | $10,000 | $4,459,651 | | Change in Control | $375,000(6) | $115,692(6) | — | — | $490,692 | | Sean F. Scanlan | | | | | | | Termination without cause or with Good Reason | $637,500 | — | $18,107 | $10,000 | $665,607 | | Termination without cause or with Good Reason within 3 months prior to or 18 months after a Change in Control | $637,500 | $2,112,494 | $27,161 | $10,000 | $2,787,155 | | Change in Control | — | — | — | — | — | | Gaetano M. Guglielmino | | | | | | | Termination without Cause or with Good Reason | $330,000(7) | — | $16,967 | $10,000 | $356,967 | | Termination without Cause or with Good Reason within 3 months prior to or 18 months after a Change in Control | $440,000(7) | $2,700,720 | $33,933 | $10,000 | $3,184,653 | | Change in Control | — | — | — | — | — |
Potential Payments upon Termination or Change in Control
(1) The cash severance payments reflect (i) amounts equal to the NEO's salary for the applicable period required under the change in control severance agreement as described above and (ii) annual cash incentive plan payments required under the change in control severance agreement as described above. The amounts are not discounted to take into account that the salary-related severance amounts are paid over time based on the Company's standard bi-weekly payroll schedule. The amounts set forth in this column reflect the value of unvested RSUs, PSUs and stock options held by the NEOs, assuming that a change in control and the NEO's termination of employment without cause or for good reason (as those terms are defined in the change in control severance agreement) occurred on December 31, 2024, the last trading day of
Potential Payments upon Termination or Change in Control
| 2025 PROXY STATEMENT | 49 |
Potential Payments upon Termination or Change in Control
2024. The value of stock-based rights is calculated using our closing stock price of $7.44 on December 31, 2024. Our PSU award agreements provide that in the event of a change in control before the end of the applicable performance period, the Company's relative TSR performance and earned shares will be determined based on the final transaction price at deal closing, and those shares then convert to time-based RSUs, vesting on the expiration date of the original performance period, but subject to accelerated vesting if the NEO's employment is terminated without cause or with good reason. The amounts reported assume that the final transaction price at deal closing in the change in control has resulted in the Company's relative TSR performance being at the 50th percentile such that the NEO has earned the target number of shares subject to the PSUs and that the vesting of earned PSUs accelerated upon the qualifying termination event as of December 31, 2024. The amounts set forth in this column also reflect the value of unvested stock options granted to Messrs. Hair and Scanlan with an exercise price below $7.44; no other NEO has options with an exercise price below $7.44. The value of welfare benefit amounts in this column reflects payment of the NEO's applicable premiums for continued benefit coverage under COBRA for the period of time required under the applicable change in control severance agreement. The calculations reflect the monthly COBRA premiums based on each NEO's benefit elections as of December 2024. (4) Under our change in control severance agreements, the NEOs receive outplacement support, with a value of up to $10,000, upon any involuntary termination of service without cause, death or disability or by the NEO with good reason. (5) Upon a change in control (or a qualifying termination in connection with such change in control), each NEO is also eligible to receive a lump sum payment equal to 100% of any excise tax imposed by Section 4999 of the Code (as a result of a payment being classified as a parachute payment under Section 280G of the Code), plus an amount equal to the federal and state income tax, FICA, and Medicare taxes (based upon the NEO’s projected marginal income tax rates) on such lump sum payment. No amount has been included in the table above for this value given the value of such excise taxes cannot be estimated at this time. (6) Under Mr. Elder’s special incentive arrangement approved in November 2024, in the event of a change in control prior to the vesting in full of the cash bonus and equity awards, then the vesting of the restricted stock units and the then-unpaid bonus will be paid in full as of immediately prior to the closing of such change in control, subject to Mr. Elder’s continued employment through such date. The above reflects the unpaid portion of the cash bonus as of December 31, 2024 and full acceleration of the unvested restricted stock units as of December 31, 2024. (7) The cash severance amounts for Mr. Guglielmino do not include any payments related to his annual target bonus upon an assumed termination of service as of December 31, 2024, since he did not participate in our 2024 annual bonus plan. In future years, cash severance amounts will include payments related to his annual target bonus.
Pay Ratio Disclosure
Pay Ratio Disclosure We are required to disclose in our proxy statement the annual total compensation of the median-compensated employee of, generally, all of our employees (excluding our CEO), the annual total compensation of our Chief Executive Officer, and the ratio of the CEO's compensation to the median employee's compensation. The ratio presented below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Exchange Act. We selected the median employee in 2024 based on an analysis of full-time and part-time workers employed by the Company as of December 31, 2024. The 2024 annual total compensation as determined under Item 402 of Regulation S-K for our CEO was $6,597,160. The 2024 annual total compensation as determined under Item 402 of Regulation S-K for our median employee was $193,007. The ratio of our CEO's annual total compensation to our median employee’s total compensation for fiscal year 2024 was 34 to 1.
Pay Ratio Disclosure
| 50 | |
Pay Versus Performance
Pay Versus Performance The following table and graphs provide information required under the SEC's "pay versus performance" rules over the last three years as required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K. The graphs below show the relationship of "compensation actually paid" to our principal executive officer ("PEO") and other NEOs (who are also referred to as "Non-PEO NEOs") in 2022, 2023 and 2024.
Pay Versus Performance
| | | | | | Value of Initial Fixed $100 Investment based on:(4) | | | | | Year | Summary Compensation Table Total for PEO(1) ($) | Compensation Actually Paid to PEO(1)(2)(3) ($) | Average Summary Compensation Table Total for Non-PEO NEOs(1) | Average Compensation Actually Paid to Non-PEO NEOs(1)(2)(3) | TSR ($) | Peer Group TSR ($) | Net Income ($ Millions) | Revenue ($ Millions)(5) | | 2024 | 6,597,160 | 1,136,797 | 3,837,863 | 2,058,881 | 39.91 | 76.22 | (56) | 209.4 | | 2023 | 8,422,635 | 2,838,120 | 3,974,434 | (236,975) | 68.40 | 72.30 | (50) | 187.1 | | 2022 | 3,617,249 | 4,320,166 | 1,483,378 | 3,117,740 | 123.34 | 76.64 | (43) | 141.8 |
Pay Versus Performance
(1) John T. Treace was our PEO for each year presented. In 2022 and 2023 our NEOs were Mark L. Hair and Aaron J. Berutti. In 2024 our NEOs were Mark L. Hair, Scot M. Elder, Sean F. Scanlan and Gaetano M. Guglielmino. (2) The amounts shown in the Compensation Actually Paid column have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. (3) Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with ASC Topic 718.
Pay Versus Performance
| PEO | 2022 | 2023 | 2024 | | Summary Compensation-Table Total Compensation | $3,617,249 | $8,422,635 | $6,597,160 | | Less: Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year | $2,580,560 | $7,328,555 | $5,768,814 | | Plus: Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | $3,283,477 | $3,172,507 | $2,651,058 | | Plus: Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | — | $(1,479,819) | $(2,400,037) | | Plus: Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year | — | — | — | | Plus: Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | — | $51,352 | $57,430 | | Less: Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | — | — | — | | Equals: Compensation Actually Paid | $4,320,166 | $2,838,120 | $1,136,797 |
Pay Versus Performance
| Non-PEO NEOs | 2022 | 2023 | 2024 | | Summary Compensation-Table Total Compensation | $1,483,378 | $3,974,434 | $3,837,863 | | Less: Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year | $909,370 | $3,432,474 | $3,414,704 | | Plus: Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | $1,227,966 | $1,487,387 | $2,651,551 | | Plus: Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | $998,374 | $(1,634,619) | $(806,059) | | Plus: Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year | — | — | $32,228 | | Plus: Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $317,392 | $(631,703) | $(241,998) | | Less: Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | — | — | — | | Equals: Compensation Actually Paid | $3,117,740 | $(236,975) | $2,058,881 |
Pay Versus Performance
(4) The Peer Group TSR set forth in this table utilizes the peer companies used for compensation benchmarking purposes, which are summarized in the Compensation Discussion and Analysis section above. The comparison assumes $100 was invested for the period starting December 31, 2021, through the end of the listed year in the Company and in the compensation benchmarking peers, respectively. Historical stock performance is not necessarily indicative of future stock performance. We determined Revenue to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and other NEOs in 2024.
Pay Versus Performance
| 2025 PROXY STATEMENT | 51 |
Relationship Between Compensation Actually Paid and Performance Measures
Relationship Between Compensation Actually Paid and Performance Measures "Compensation actually paid" calculated per SEC Item 402(v) of Regulation S-K ("CAP") reflects cash compensation actually paid as well as changes to the fair values of equity awards during the years shown in the table based on year-end or vesting date stock prices, and various accounting valuation assumptions. Due to how CAP is calculated, the CAP as reported for each year does not reflect the actual amounts earned by our NEOs from their equity awards. CAP generally fluctuates annually due to the change in our stock price from year to year as well as varying levels of actual achievement of performance goals. Because CAP does not reflect the actual amount earned by our NEOs on their equity compensation, we do not use this measure for understanding how NEO pay aligns with our Company performance. For a discussion of how our Compensation Committee assessed "pay-for-performance" and how our executive compensation program is designed to link executive compensation with the achievement of our financial and strategic objectives as well as stockholder value creation each year, see the Compensation Discussion and Analysis section above. The following chart sets forth the relationship between CAP to our PEO, the average of CAP to our Non-PEO NEOs, and the cumulative TSR over the three most recently completed fiscal years for the Company and the Peer Group TSR.
Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income
Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between CAP to our PEO, the average of CAP to our Non-PEO NEOs, and our net income during the three most recently completed fiscal years.
Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income
| 52 | |
Relationship Between PEO and Other NEO Compensation Actually Paid and Revenue
Relationship Between PEO and Other NEO Compensation Actually Paid and Revenue The following chart sets forth the relationship between CAP to our PEO, the average of CAP to our Non-PEO NEOs, and our Revenue during the three most recent fiscal years.