DEF 14A of Lantronix Inc
Filed Sep 30, 2024 · FY20240001140361-24-042340
What happens if a majority of the votes cast are not voted in favor of a director nominee?
What happens if a majority of the votes cast are not voted in favor of a director nominee? Pursuant to the procedures established by the Corporate Governance and Nominating Committee of the Board, each incumbent director has submitted to the Chair of the Corporate Governance and Nominating Committee in writing such director’s irrevocable resignation which will be effective upon (1) the failure of such director to receive the required vote at any annual or special meeting at which such director is nominated for re-election and (2) Board acceptance of the resignation. If a nominee fails to receive a majority of the votes cast in the director election, the Corporate Governance and Nominating Committee will make a recommendation to the Board whether to accept or reject the director’s resignation and whether any other action should be taken. If a director’s resignation is not accepted, that director will continue to serve until our next annual meeting of stockholders and until his successor is duly elected and qualified, or until his earlier resignation or removal. If the Board accepts the director’s resignation, it may, in its sole discretion, either fill the resulting vacancy or decrease the size of the Board to eliminate the vacancy.
Criteria for Director Nominees and Board Diversity
Criteria for Director Nominees and Board Diversity The Board believes that it should be composed of directors with diverse, complementary backgrounds and that directors should, at a minimum, exhibit proven leadership capabilities and experience at a high level of responsibility within their respective fields and have the ability to quickly grasp complex principles of business, finance and technology. Directors should possess the highest personal and professional ethics, integrity and values and should be committed to representing the long-term interests of our stockholders. When considering a candidate for director, the Corporate Governance and Nominating Committee takes into account a number of factors, including the following:
Criteria for Director Nominees and Board Diversity
| • | Independence from management; |
Criteria for Director Nominees and Board Diversity
| • | Depth of understanding of technology, manufacturing, sales and marketing, finance and/or other elements directly relevant to our business; |
Criteria for Director Nominees and Board Diversity
| • | Education and professional background; |
Criteria for Director Nominees and Board Diversity
| • | Judgment, skill, integrity and reputation; |
Criteria for Director Nominees and Board Diversity
| • | Existing commitments to other businesses as a director, executive or owner; |
Criteria for Director Nominees and Board Diversity
| • | Personal conflicts of interest, if any; and |
Criteria for Director Nominees and Board Diversity
| • | The size and composition of our existing Board. |
Criteria for Director Nominees and Board Diversity
In general, candidates who hold or who have held an established executive-level position in a technology company are preferred. The Board’s consideration of diversity as one of the criteria for director nominations is primarily focused on evaluating a nominee’s expected contribution to the diversity of skills, background, experiences and perspectives, given the then-existing composition of the Board as a whole. When seeking candidates for director, the Corporate Governance and Nominating Committee may solicit suggestions from incumbent directors, management, stockholders and others. Additionally, the Corporate Governance and Nominating Committee may use the services of a third-party search firm to assist in the identification and review of appropriate candidates. After conducting an initial evaluation of a prospective candidate, the Corporate Governance and Nominating Committee will interview that candidate if it believes the candidate might be suitable. The Corporate Governance and Nominating Committee may also ask the candidate to meet with other members of the Board and with management. If the Corporate Governance and Nominating Committee believes a candidate would be a valuable addition to the Board, it may recommend to the Board that candidate’s appointment or election. The Corporate Governance and Nominating Committee applies the same standards of review to all prospective candidates for director, regardless of who brings them to the Corporate Governance and Nominating Committee’s attention. The following is a summary of the diversity and demographic background of our directors (as self-identified):
Criteria for Director Nominees and Board Diversity
| Board Diversity Matrix (As of September 30, 2024) | | | | | | Total Number of Directors | 6 | | | | | Part I: Gender Identity | Female | Male | Non- Binary | Did Not Disclose Gender | | Directors | 1 | 5 | — | — | | Part II: Demographic Background | | | | | | African American or Black | — | — | — | — | | Alaskan Native or Native American | — | — | — | — | | Asian | — | 3 | — | — | | Hispanic or Latinx | — | — | — | — | | Native Hawaiian or Pacific Islander | — | — | — | — | | White | 1 | 2 | — | — | | Two or More Races or Ethnicities | — | — | — | — | | LGBTQ+ | — | | | | | Did Not Disclose Demographic Background | — | | | |
Compensation of Non-Employee Directors
Compensation of Non-Employee Directors Directors who are also employees of the Company are not paid any fees or remuneration for their service on the Board or on any Board committee. In fiscal 2024, we provided the annual compensation described below to directors who are not employees of the Company or any of our subsidiaries (“non-employee directors”). In fiscal 2024, Mr. Awsare, our Chief Executive Officer, was the only director who was also an employee of the Company. Cash Compensation Under our Non-Employee Director Compensation Policy, each non-employee director is entitled to receive the following cash compensation for board services, as applicable:
Compensation of Non-Employee Directors
| • | $50,000 annual retainer for service as a Board member; |
Compensation of Non-Employee Directors
| • | $35,000 additional annual retainer for service as Chairman of the Board; and |
Compensation of Non-Employee Directors
| • | $15,000 additional annual retainer for service as Chair of the Audit Committee, $10,000 additional annual retainer for service as Chair of the Compensation Committee and $10,000 additional annual retainer for service as Chair of the Corporate Governance and Nominating Committee. |
Compensation of Non-Employee Directors
Under the Non-Employee Director Compensation Policy, directors are not paid fees for service as members on any of our standing committees, apart from the Chair fees discussed above. Further, directors are not paid meeting fees, except that (1) each non-employee director will be paid a meeting fee of $1,000 for each Board meeting attended in person or by telephone in excess of 12 meetings during the fiscal year; and (2) each non-employee director will be paid a meeting fee of $1,000 for attending in person or by telephone each meeting of a standing committee of which he or she is a member in excess of 12 meetings per committee during the fiscal year. Equity Award Program Under our Non-Employee Director Compensation Policy, each of the non-employee directors elected at our annual meeting of stockholders each year will receive an award of restricted stock units (“RSUs”), with the number of RSUs for each grant to be determined by dividing $75,000 by the average of the closing prices of a share of our common stock for the last 30 trading days of the fiscal quarter preceding the fiscal quarter in which the grant is made, rounded to the nearest whole share. Each such RSU award will be scheduled to vest as to 50% of the award six months after the grant date and as to the other 50% of the award on the earlier of the first anniversary of the grant date and the day immediately preceding the next annual meeting of stockholders. If a non-employee director is appointed to the Board other than at the time of an annual meeting of stockholders, the director will receive an initial award of RSUs with a value as of the grant date of $75,000, applying the methodology described above and pro-rated based on the period of the director’s service on the Board during the one-year period following the last annual meeting. This initial award will be scheduled to vest in two installments on the same vesting dates as the annual awards granted to non-employee directors at the last annual meeting (with the RSUs subject to the award allocated proportionately between the two vesting dates based on the director’s period of service on the Board), or if the initial award is granted more than six months after the last annual meeting, the award will be scheduled to vest in one installment on the earlier of the first anniversary of the date of the last annual meeting and the day immediately preceding the next annual meeting. If a change in control of the Company occurs, all annual and initial grants of RSUs to non-employee directors that are then outstanding will vest in full upon (or immediately prior to) the closing of the transaction. The Board may change the terms of our director compensation program from time to time. Reimbursements Under the Non-Employee Director Compensation Policy, non-employee directors will be reimbursed for their reasonable out of pocket expenses, including travel expenses incurred to attend meetings up to a maximum of $2,000 per meeting requiring travel. Non-Employee Director Compensation Table The table below sets forth the compensation earned by our non-employee directors during fiscal 2024. The compensation paid to Mr. Awsare, who was employed by us and served on the Board during fiscal 2024, is presented below in the Summary Compensation Table and the related explanatory tables. Directors who are also officers or employees of the Company or its subsidiaries receive no additional compensation for their services as directors.
Compensation of Non-Employee Directors
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | Option Awards ($) | All Other Compensation ($) | Total ($) | | Philip G. Brace(3) | 48,904 | 90,786 | — | — | 139,690 | | Jason W. Cohenour(4) | 73,014 | 72,284 | — | — | 145,298 | | Paul F. Folino(5) | 53,003 | — | — | — | 53,003 | | Phu Hoang(6) | 56,747 | 72,284 | — | — | 129,031 | | Heidi Nguyen(7) | 17,705 | — | — | — | 17,705 | | Hoshi Printer | 65,312 | 72,284 | — | — | 137,596 | | Christa Steele(8) | 21,678 | 67,468 | — | — | 89,146 |
Compensation of Non-Employee Directors
| (1) The dollar value of stock and option awards shown represents the grant date fair value determined in accordance with FASB ASC Topic 718. For a discussion of the valuation assumptions used in the calculations, see Note 6 of Notes to Consolidated Financial Statements, included in Part IV, Item 15 of our Form 10-K, which was filed with the SEC on September 9, 2024. These values differ slightly from the values used to determine the number of RSUs subject to each award because the FASB ASC Topic 718 grant date fair values are determined taking into account the closing price of a share of our common stock on the date of grant while the values used to determine the number of RSUs subject to each award are determined using an average of the closing prices of our common stock over the last 30 trading days of the last complete fiscal quarter before the grant date. |
Compensation of Non-Employee Directors
| (2) In accordance with our Non-Employee Director Compensation Policy described above, following the Company’s 2023 Annual Meeting of Stockholders, Messrs. Brace, Cohenour, Hoang and Printer were each awarded 16,968 RSUs. |
Compensation of Non-Employee Directors
| (3) Mr. Brace was appointed to the Board effective August 8, 2023. Pursuant to our Non-Employee Director Compensation Policy, Mr. Brace was awarded 4,186 RSUs upon his appointment to the Board. |
Compensation of Non-Employee Directors
| (4) Mr. Cohenour is not standing for re-election at the Annual Meeting. |
Compensation of Non-Employee Directors
| (5) Mr. Folino resigned from the Board effective November 7, 2023. |
Compensation of Non-Employee Directors
| (6) Mr. Hoang is not standing for re-election at the Annual Meeting. |
Compensation of Non-Employee Directors
| (7) Dr. Nguyen resigned from the Board effective November 7, 2023. |
Compensation of Non-Employee Directors
| (8) Ms. Steele was appointed to the Board effective January 24, 2024. Pursuant to our Non-Employee Director Compensation Policy, Ms. Steele was awarded 10.332 RSUs upon her appointment to the Board. Ms. Steele is not standing for re-election at the Annual Meeting. |
Compensation of Non-Employee Directors
Outstanding Non-Employee Director Equity Awards at 2024 Fiscal Year End The following table shows the total number of RSUs outstanding, and total number of shares of our common stock subject to outstanding stock options, as of June 30, 2024 for each person who served as a non-employee director during fiscal 2024:
Compensation of Non-Employee Directors
| Name | RSUs Outstanding (#) | Option Awards Outstanding (#) | | Philip G. Brace | 8,484 | — | | Jason W. Cohenour | 8,484 | — | | Paul F. Folino | | — | | Phu Hoang | 8,484 | — | | Heidi Nguyen | — | — | | Hoshi Printer | 8,484 | — | | Christa Steele | 10,332 | — |
Compensation of Non-Employee Directors
Director Stock Ownership Requirements The Board encourages its members to acquire and hold stock in the Company to link the interests of the directors to the stockholders. The Board has adopted stock ownership guidelines for the non-employee directors of the Company. Under the guidelines, our non-employee directors are each expected to own shares of our common stock with a value equal to three times the annual cash retainer for such director. Progress toward the achievement of these ownership guidelines is based on shares purchased in the open market, or acquired through option exercises or vesting of RSUs. The value of the shareholdings is based on the greater of (1) the closing price of a share of our common stock as of the most recent fiscal year end, or (2) the acquisition value of the shares, determined based upon the purchase price for open market purchases and the fair market value of shares on the date of issuance in the case of shares issued upon the exercise of stock options or settlement of RSUs. The guidelines provide that non-employee directors are expected to establish the minimum ownership levels within five years of adoption of the guidelines or within five years of appointment as a new non-employee director of the Company. Neither the Board nor the Compensation Committee has established stock ownership guidelines for members of the Board who are employees of the Company. All of our current non-employee directors either satisfy the applicable level of share ownership under the guidelines or are within the five-year compliance period.
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Our Board currently consists of six directors: Saleel Awsare, Philip Brace, Jason Cohenour, Phu Hoang, Hoshi Printer and Christa Steele. Subsequent to our 2023 Annual Meeting of Stockholders, Mr. Awsare was appointed to serve as our President and Chief Executive Officer, and as a member of our Board, effective November 20, 2023. Mr. Awsare will be standing for election to the Board by our stockholders for the first time at the Annual Meeting. Pursuant to our Cooperation Agreement dated August 9, 2024 with 180 Degree Capital Corp., one of our stockholders, we have agreed to nominate Mr. Narbeh Derhacobian and Mr. Kevin Palatnik for election to the Board at the Annual Meeting and to ensure that two directors serving on the Board as of the date preceding the date of the Cooperation Agreement will not stand for re-election at the Annual Meeting. Members of the Corporate Governance and Nominating Committee and other members of the Board, including Mr. Awsare, interviewed Mr. Derhacobian and Mr. Palatnik and considered the criteria described above under the caption “Criteria for Director Nominees and Board Diversity” in evaluating the candidates as possible nominees for director prior to our entry into the Cooperation Agreement. The Corporate Governance and Nominating Committee had further discussions about the potential candidates at a committee meeting and then recommended the potential candidates to the Board as director nominees for election at the Annual Meeting in connection with our entry into the Cooperation Agreement. The Board, in turn, discussed and unanimously approved the Corporate Governance and Nominating Committee’s recommendation. Mr. Derhacobian and Mr. Palatnik are not currently directors of the Company and will stand for election to the Board for the first time at the Annual Meeting. Effective August 9, 2024, Jason Cohenour and Phu Hoang agreed that they would not stand for re-election at the Annual Meeting in order to ensure our compliance with the Cooperation Agreement. On September 24, 2024, Ms. Steele notified us of her decision not to stand for re-election at the Annual Meeting. Effective as of the date of the Annual Meeting, the size of the Board will be reduced to five directors. The Corporate Governance and Nominating Committee has recommended to the Board, and the Board has approved, the nomination of the following five nominees for election as directors at the Annual Meeting, each to serve a one-year term until the 2025 Annual Meeting of Stockholders and until the director’s successor has been duly elected and qualified, or until the director’s earlier resignation or removal: Saleel Awsare, Philip Brace, Narbeh Derhacobian, Kevin Palatnik and Hoshi Printer. Other than Mr. Derhacobian and Mr. Palatnik, each of the nominees presently serves as a director and has served continuously as a director since the date indicated in the nominee’s biography below. All nominees have consented to be named and have indicated their intent to serve if elected.
Information About the Director Nominees
Information About the Director Nominees The following table sets forth certain information, in each case as of September 30, 2024, concerning the nominees for director:
Information About the Director Nominees
| Name | Age | Director Since | Position With Lantronix | | Saleel Awsare | 59 | 2023 | President, Chief Executive Officer, and Director | | Philip Brace | 54 | 2023 | Director | | Narbeh Derhacobian | 61 | — | Director Nominee | | Kevin Palatnik | 66 | — | Director Nominee | | Hoshi Printer | 82 | 2010 | Director |
Information About the Director Nominees
The following is a description of the business experience, qualifications, skills and educational background of each of the director nominees, including each nominee’s relevant business experience:
Saleel Awsare
Saleel Awsare
President, Chief Executive Officer & Director
President, Chief Executive Officer & Director
Since 2023
Since 2023
Career Highlights
Career Highlights Mr. Awsare has served as a member of our Board and President and Chief Executive Officer since November 2023. Mr. Awsare served as Senior Vice President and General Manager of the Enterprise and Mobile Division of Synaptics Incorporated, a developer of human interface hardware and software, from September to November 2023. Prior to that, Mr. Awsare served as Senior Vice President and General Manager of the PC and Peripherals Unit of Synaptics from August 2020 to September 2023; Senior Vice President and General Manager of Synaptics’s IoT Division from April 2019 to July 2020; and Senior Vice President of Corporate Marketing & Investor Relations at Synaptics from October 2018 until April 2019. Prior to joining Synaptics as Corporate Vice President and General Manager of Audio & Imaging Products in August 2017, Mr. Awsare was President of Conexant Systems, LLC, a software developer and fabless semiconductor company, from March 2016 until Conexant’s acquisition by Synaptics in August 2017, and Conexant’s Senior Vice President & General Manager of Audio & Imaging from April 2012 to March 2016. Prior to joining Conexant, Mr. Awsare served as President of U.S. Operations and General Manager of Audio & Voice Solutions of Nuvoton Technology Corporation, a Taiwan-based semiconductor company, from December 2008 to March 2012.
Skills and Qualifications
Skills and Qualifications Mr. Awsare brings a comprehensive knowledge of the enterprise, mobile and IoT markets and a demonstrated record of driving growth and profitability while serving in various management roles in technology companies.
Skills and Qualifications
| Philip Brace | | | Independent Director | Current Board Committees | | Since 2023 | -Compensation Committee (Chair) -Corporate Governance & Nominating Committee |
Career Highlights
Career Highlights Mr. Brace has served as a member of our Board since 2023. Mr. Brace served as President and Chief Executive Officer of Sierra Wireless Inc., a manufacturer of high-performance cellular networking for mission critical applications, from July 2021 to January 2023. Prior to this, Mr. Brace served as an Executive Vice President of Veritas Technologies, an international multi-cloud data management company, from April 2019 to July 2021. He was President of Cloud Systems and Electronic Solutions at Seagate Technology, a provider of data storage technology and infrastructure solutions, from July 2015 to October 2017 and Executive Vice President - Electronics Solutions at Seagate from September 2014 to July 2015. Mr. Brace began his career at Intel Corporation and LSI Corporation, holding various engineering and management roles. Mr. Brace has served as a director of Inseego Corp. (Nasdaq: INSG), a designer and developer of cloud-managed wireless wide area network and intelligent edge solutions, since September 2023, and has additionally served as Executive Chairman at Inseego since February 2024. Mr. Brace is also a director of BlackBerry Limited (NYSE: BB), where he was appointed in February 2024 and serves on the Compensation, Nomination and Governance Committees.
Skills and Qualifications
Skills and Qualifications Mr. Brace’s 30 years of experience in the semiconductor, server, IoT and storage industries, filling multiple roles ranging across various disciplines, including software, hardware, engineering, marketing and sales, enables Mr. Brace to provide our Board with business, technical and strategic insight into the issues faced by our Company and our industry.
Narbeh Derhacobian
Narbeh Derhacobian
Director Nominee
Director Nominee Mr. Derhacobian has served as Chief Executive Officer and a director of GuRu Wireless, a developer of advanced multi-watt, over-the-air, wireless power transfer solutions, since April 2022. Previously, Mr. Derhacobian was President and Chief Executive Officer of Parabellum Acquisition Corp. (NYSE: PRBM) from February 2021 to December 2023. He was a co-founder of Adesto Technologies (Nasdaq: IOTS), a provider of application specific semiconductors and embedded systems for IoT edge deployments, and served as its President and Chief Executive Officer and as a director from January 2006 until its acquisition by Dialog Semiconductor PLC in July 2020. Mr. Derhacobian’s prior experience also includes senior management roles at Advanced Micro Devices, Inc. (Nasdaq: AMD), a multinational semiconductor company, from 1995 to 2000, where he served as engineering manager; Virage Logic Corporation (Nasdaq: VIRL), a provider of semiconductor intellectual property, from 2000 to 2004 where he served as director of engineering; Cswitch from 2004 to 2006 where he served as director of technology development; and Silicon Storage Technology, Inc. (Nasdaq: SSTI) from 1994 to 1995 where he served as senior engineer. Since January 2022, Mr. Derhacobian has served as a director of Kinara.ai, a venture backed company focused on high efficiency edge AI processors used in smart edge devices and gateways. Mr. Derhacobian brings many years of experience as a founder, director and chief executive officer in leading-edge technology companies, as well as extensive mergers and acquisitions experience with both public and private companies and significant operational experience in complex organizations serving Fortune 100 customers.
Kevin Palatnik
Kevin Palatnik
Director Nominee
Director Nominee
EXECUTIVE COMPENSATION
| | Pay Component | Role | Performance Metric and Description | | | Short Term Incentive | Base Salary | Provides a competitive fixed annual income | Reviewed annually and adjusted based on competitive market practices and individual performance | Fixed | | | Annual Bonus Program | Variable cash component designed to encourage performance to annual objectives which support the long-term strategy | Metrics for fiscal 2024 include: • Organic Revenue Growth • Non-GAAP Earnings Per Share Growth Actual payout is capped at 50% of non-GAAP income, calculated before the foregoing payouts, and in all cases at 200% of target. | Variable / At-Risk | | Long Term Incentive | Performance- Based Restricted Stock Units (“PSUs”) | Aligns interest of executives with those of shareholders; provides retention value and motivates executives to build long-term shareholder value | A significant percentage of equity awards granted to named executive officers is performance-based. Metrics for PSUs vesting in fiscal 2024 include: • Revenue (or Revenue Growth) • Non-GAAP Earnings per Share (or Non-GAAP Earnings per Share Growth) • PSUs also have a multiplier based on TSR compared with the companies in the Russell Microcap Index Vesting is over 3 years. | | | | Time-based Restricted Stock Units (“RSUs”) and Stock Options | Provides retention value and motivates executives to build long-term shareholder value | Vesting is generally subject to the executive’s continued employment over a three-year period. | |
EXECUTIVE COMPENSATION
| ✔ | Long-Term Equity Incentives. All of our equity incentive awards have multi-year vesting and/or performance requirements. With the exception of new hire equity grants, a significant portion of our equity awards granted to our named executives are subject to performance-based vesting as well as continued employment, and our performance-based vesting equity awards include a relative total shareholder return measure over the entire three-year performance measurement period under the awards. |
EXECUTIVE COMPENSATION
| ✔ | Majority of CEO Annual Equity Award Subject to Performance-Based Vesting Requirements. Mr. Awsare joined the Company as our President and Chief Executive Officer in fiscal 2024. Mr. Awsare’s equity awards in fiscal 2024 consisted of (1) inducement awards that were granted on a one-time basis to help make Mr. Awsare whole for compensation he would be foregoing in accepting employment with the Company, and (2) an annual equity award. Mr. Awsare’s entire annual equity award for fiscal 2024 was subject to performance-based vesting requirements. |
EXECUTIVE COMPENSATION
| ✔ | No Single-Trigger Benefits. Our executives’ change in control arrangements have a double-trigger provision (benefits require both a change in control and termination of employment) rather than a single-trigger provision (under which benefits are triggered automatically by any change in control). |
EXECUTIVE COMPENSATION
| ✔ | No Re-Pricing of Stock Options. We prohibit re-pricing of “underwater” stock options (stock options where the exercise price is below the then-current market price of our stock) without stockholder approval. |
EXECUTIVE COMPENSATION
| ✔ | Anti-Hedging Policy. Our Stock Trading Guidelines prohibit our officers and directors from engaging in hedging transactions in relation to the Company’s stock or equity awards (including unvested equity awards) as collateral for any margin account or other form of credit arrangement. |
EXECUTIVE COMPENSATION
| ✔ | Independent Compensation Consultant. Our Compensation Committee retains an independent compensation consultant for independent advice and market data. |
EXECUTIVE COMPENSATION
| • | administering our equity incentive plans; |
EXECUTIVE COMPENSATION
| • | approving annual cash incentive program performance metrics as well as payouts thereunder; and |
EXECUTIVE COMPENSATION
Our Compensation Committee also analyzes the alignment of our overall executive compensation package with our compensation philosophy and objectives. How Compensation Decisions Are Made The Compensation Committee annually determines the compensation levels for our executive officers by considering several factors, including competitive market data, each executive officer’s roles and responsibilities, how the executive officer is performing those responsibilities and our financial performance. The Compensation Committee makes all decisions for the total direct compensation - that is, base salary, cash incentive awards under our incentive bonus plan, and stock-based awards - of our executive officers and other members of our senior management, including the named executive officers. At the request of the Compensation Committee, our Chief Executive Officer and other officers may attend meetings of the Compensation Committee or meetings of our Board at which executive compensation is discussed. The Compensation Committee considers the recommendations from our Chief Executive Officer with respect to executive compensation. While our Chief Executive Officer discusses his recommendations with the Compensation Committee, he does not participate in deliberation or determination with respect to his own compensation. The Compensation Committee may also engage independent compensation consultants to assist the Compensation Committee in its duties, including providing advice regarding industry trends and benchmarking information relating to the form and amount of compensation provided to executives by companies with which we compete for executive talent and other similarly situated companies. When considering a proposed compensation package for an executive officer, the Compensation Committee considers both the compensation package as a whole and each element of total compensation. For example, before determining officer compensation, the Compensation Committee reviews, for each executive, each element of compensation paid in the prior fiscal year, including base salary, incentive bonus, and the value of equity awards, information regarding equity awards made in prior periods, and competitive market data. The Compensation Committee uses this information to assess the overall effect and long-term implications of compensation decisions, rather than viewing individual decisions in isolation. 2023 Say-On-Pay Vote At our 2023 Annual Meeting of Stockholders, our stockholders approved, on a non-binding, advisory basis, the compensation paid to our named executive officers described in our 2023 proxy statement. Approximately 87.6% of the votes cast on the matter were voted in favor of this “say-on-pay” approval. The Board and the Compensation Committee considered the voting results and high level of stockholder support when establishing our executive compensation programs for fiscal 2024 and implemented an executive compensation program for fiscal 2024 that was substantially similar to the program in place for fiscal 2023. Independent Compensation Consultants The Compensation Committee has the authority to retain independent advisors to assist it in the compensation-setting process and receive funding to engage such advisors. The Chair of the Compensation Committee, in consultation with other Compensation Committee members, defines the scope of any advisor’s engagement and related responsibilities. The Compensation Committee engaged Compensation Strategies, Inc. (“Compensation Strategies”) for fiscal 2024 to assist in a review of the executive compensation practices at a peer group of companies. The compensation consultants from Compensation Strategies have no other direct or indirect business relationships with us. The Compensation Committee has assessed the independence of Compensation Strategies and concluded that its engagement of Compensation Strategies does not raise any conflict of interest with the Company or any of its directors or executive officers. Compensation Peer Group As noted above, the Compensation Committee selects a peer group of companies each year with input from its independent compensation consultant to help evaluate our executive compensation program. In May 2024, the Compensation Committee identified the following companies as the peer group for fiscal 2025:
EXECUTIVE COMPENSATION
In selecting the peer group for fiscal 2025, the Compensation Committee considered public companies with a thematic fit with the Company’s business and targeted a group of about 20 companies with the Company’s revenue at approximately the 50th percentile of the group. The peer group for fiscal 2025 is the same as the fiscal 2024 peer group except that PCTEL, Inc. was removed as it was acquired during fiscal 2024. Components of Executive Compensation Our Compensation Committee utilizes three main components for executive officer compensation: base salary, a cash incentive bonus, and long-term equity-based awards. Our compensation program is designed to balance our need to provide our executive officers with incentives to achieve our short- and long-term performance goals with the need to pay competitive base salaries. There is no pre-established policy for allocating between cash and non-cash or short-term and long-term compensation. In determining the allocation each year among base salary, annual cash incentive bonus, and long-term equity-based awards, the Compensation Committee considers our short-term and long-term business objectives, competitive trends within our industry, and each named executive officer’s current and prior compensation. An important guiding principle for our executive compensation program is our belief that it benefits our stockholders for executive management’s compensation to be tied to our short-term and long-term performance, so that a significant portion of each executive officer’s compensation is tied to the achievement of our goals and objectives. As a result, “at risk” compensation makes up a significant portion of our executives’ compensation. Base Salaries Base salaries for our executive officers are set with regard to a number of factors, including the executive’s title and responsibilities within the Company, the executive’s performance in recent periods, the executive’s potential for continued development within the organization, an assessment of the base salaries of similarly situated executives with the peer group companies noted above, and internal parity with other executives. The base salary levels for each executive officer, and any increases or decreases to those levels, are reviewed and approved each year by the Compensation Committee. During fiscal 2024, we entered into an employment agreement with Mr. Awsare, and offer letters with Mr. Hoff and Mr. Gurusamy, in connection with their joining the Company. The terms of each agreement were negotiated with the executive and provided for the annual base salary indicated in the table below. In May 2024, the Compensation Committee determined that the fiscal 2025 base salaries for Mr. Whitaker and Mr. Bass would each be increased over their fiscal 2024 levels. These increases were based on the Compensation Committee’s assessment of the factors noted above and, in Mr. Whitaker’s case in particular, took into account that his fiscal 2024 salary of $300,000 was significantly below the median of base salaries for chief financial officers with the peer group companies ($392,725) and determined that the increase was appropriate to more closely align his salary with market levels and to encourage his continued employment with the Company. Accordingly, these named executive officers’ base salaries for fiscal 2025 are as follows:
EXECUTIVE COMPENSATION
Annual Cash Incentive Program Our Compensation Committee believes that annual performance-based cash bonuses play an important role in providing incentives to our executive officers to achieve annual performance goals. To that end, we have established an annual cash bonus program (the “Bonus Program”) in order to align executives’ goals with our financial, strategic and tactical objectives for the current year. Selected employees, including all of our named executive officers, are eligible to participate in the Bonus Program. Each participant in the Bonus Program is assigned a target annual cash bonus, generally expressed as a percentage of the participant’s base salary, the payment of which is conditioned on the achievement of certain performance goals and objectives established by the Compensation Committee. Bonuses paid under the Bonus Program, if any, may be based upon achievement of performance goals for two independent semi-annual performance periods, corresponding with the first and second half of the fiscal year, respectively (each, a “Performance Period”). The Compensation Committee generally sets the corporate performance goals at “target” levels the Compensation Committee believes are challenging, but reasonable, for management to achieve, with reduced or increased bonus opportunities for performance below or above, as the case may be, the targeted level. The Compensation Committee may also establish a maximum aggregate amount of bonuses that all participants will be eligible to receive during a Performance Period based on our earnings for the fiscal year as it may determine. If the bonus pool for a Performance Period is insufficient to fully fund the bonuses earned during the Performance Period, each participant’s bonus is ratably reduced. At the end of each Performance Period, the Compensation Committee determines the level of Company achievement with respect to the specified goals. The Compensation Committee retains discretion to make appropriate adjustments to the performance goals for the effects of events that were not anticipated in establishing the performance goals, to exclude one-time or non-recurring expenses in calculating achievement of performance goals, and to make other adjustments to the bonuses that otherwise would be payable based on actual performance. Final bonus levels are then based on those determinations and generally paid to the executives in the quarter following the completion of a Performance Period. For fiscal 2024, the Compensation Committee determined that annual bonuses would be based on achievement of specified levels of growth in “organic revenue” (i.e. excluding revenue derived from any companies acquired after the adoption of the bonus program) relative to organic revenue for the prior fiscal year and non-GAAP earnings per share (“non-GAAP EPS”) for the fiscal year. The Compensation Committee believes revenue and non-GAAP EPS to be good indicators of our success, given the market in which we compete. In addition, they are metrics that management can calculate and communicate to employees throughout the applicable Performance Period. The goals were weighted 60% towards the revenue goal and 40% towards the non-GAAP EPS goal. If, at the end of the first two quarters of fiscal 2024, the Company was on pace to achieve at least the target level of revenue and non-GAAP EPS for the fiscal year shown in the table below, the Compensation Committee could approve a partial bonus payment of up to 50% of a participant’s target bonus amount for the year (with the final bonus to be awarded at the end of the fiscal year to be reduced by the amount of such partial payment). The revenue growth and non-GAAP EPS goals for fiscal 2024, which apply to all participants (including each of the named executive officers), and the payout percentages are set forth in the table below (with the percentage determined by linear interpolation for performance between the levels indicated in the table). For each metric, growth is relative to fiscal 2023 levels (with $0.22 being the non-GAAP EPS level for fiscal 2023).
EXECUTIVE COMPENSATION
| Organic Revenue Growth for the FY24 Performance Period (60%)* | Non-GAAP EPS for the FY24 Performance Period (40%) | Payout Percentage (% of Target Bonus) | | 1% or less | Less than or equal to $0.22 | 0% | | 3% | $0.23 | 75% | | 5% | $0.24 | 100% | | 8% | $0.25 | 125% | | 10% | $0.26 | 150% | | 12% | $0.27 | 175% | | 15% or more | $0.28 or more | 200% |
EXECUTIVE COMPENSATION
| * If the Company’s total revenue for fiscal 2024 (including revenue derived from any companies acquired after the bonus program was adopted) was $164 million or more, the payout percentage for the revenue growth metric would be 200%. |
EXECUTIVE COMPENSATION
Bonuses under the Bonus Program for fiscal 2024 were capped at 200% of target, and the total bonus pool for all bonuses awarded for fiscal 2024 was limited to 50% of the Company’s non-GAAP income for the fiscal year (defined as our earnings before interest, taxes, depreciation, amortization, and share-based compensation, excluding the impact of non-recurring charges or gains, consistent with the approach used for reporting “Non-GAAP Net Income” in our quarterly earnings releases), and calculated before taking the bonuses into account. To the extent the total payout under the Bonus Program exceeded this bonus pool, the bonuses awarded under the program may be capped at the bonus pool amount. The Compensation Committee established the following target and maximum bonus amounts set forth below for the named executive officers under the Bonus Program. The target bonuses for Mr. Awsare and Mr. Hoff were negotiated in connection with their joining the Company as described above.
EXECUTIVE COMPENSATION
| Name | Fiscal 2024 Base Salary | Target Bonus | | Incentive Mix | | Maximum Payout | | | | | % of Salary | Dollars | Revenue Growth | Non- GAAP EPS | % of Salary | Dollars | | Saleel Awsare* | $500,000 | 100% | $500,000 | 60% | 40% | 200% | $1,000,000 | | Jeremy R. Whitaker | $300,000 | 65% | $195,000 | 60% | 40% | 130% | $390,000 | | Kurt Hoff* | $335,000 | 50% | $167,500 | 60% | 40% | 100% | $335,000 | | Eric Bass | $275,000 | 50% | $137,500 | 60% | 40% | 100% | $275,000 | | Roger Holliday | $280,500 | 50% | $140,250 | 60% | 40% | 100% | $280,500 |
EXECUTIVE COMPENSATION
| * Pursuant to their employment agreements, the fiscal 2024 bonuses from Mr. Awsare and Mr. Hoff would be pro-rated based on their respective periods of employment with the Company during the fiscal year. As Mr. Gurusamy joined the Company in May 2024, he did not participate in the Bonus Program for fiscal 2024. |
EXECUTIVE COMPENSATION
In August 2024, the Compensation Committee determined that the Company’s organic revenue for fiscal 2024 had increased by 22% over the fiscal 2023 level, and that the Company’s non-GAAP EPS for fiscal 2024 was $0.40. The Compensation Committee also determined that the bonus pool accrued for the 2024 Bonus Program was sufficient to pay bonuses under the program at 70% of the target level. Accordingly, although the Company’s revenue growth and non-GAAP EPS for fiscal 2024 achieved the maximum performance level, the Compensation Committee determined that each of the named executive officers would receive a payout at 70% of their target bonus levels. Equity Awards We believe that providing a significant portion of our executive officers’ total compensation opportunity in equity awards aligns the incentives of our executives with the interests of our stockholders and with our long-term success. By compensating our executives with our equity, executives receive a stake in our financial future and the values realized in the long term depend on the executives’ ability to drive our financial performance. Equity incentive awards are also a useful vehicle for attracting and retaining executive talent in a competitive market. In determining the equity awards to be granted to our executives, the Compensation Committee takes into account the executive’s equity ownership in the Company and the terms of the executive’s then-outstanding awards. Our Compensation Committee administers our equity incentive plans and establishes the terms for all awards granted thereunder, including grant guidelines, vesting schedules, and other provisions. Our annual equity awards to our executives include RSUs that vest based on our achievement of specific performance goals as well as the executive’s continued service with the Company (“PSUs”). From time to time, we may also grant stock options and RSUs that vest based on continued employment over a multi-year period. We consider options (like PSUs) to be performance-based because they have value only if our stock price increases after the date of grant. RSUs may be granted because, while they have a value based on our stock price, they also provide retention incentives even if our stock price does not increase. The Compensation Committee annually evaluates its equity compensation program to determine whether to issue either PSUs, RSUs, stock options, a combination thereof, or other types of equity awards. Vesting of our PSUs is generally subject to our achievement of pre-established growth rates in our total revenue and non-GAAP EPS for the applicable performance period. Although these metrics are similar to the metrics used for our Bonus Program, we have based vesting of PSUs awarded over the past three fiscal years on three-year growth in total revenue (whereas the Bonus Program utilizes one-year organic revenue) and three-year growth in non-GAAP EPS (as opposed to the one-year target values used in the Bonus Program). In addition, we have also included relative total shareholder return (“TSR”) as a metric for vesting of our PSUs awarded in certain fiscal years (including PSUs that we recently awarded to our executives for fiscal 2025), which is not a metric used in our Bonus Program. As noted above, the Compensation Committee believes revenue and non-GAAP EPS to be good indicators of our success, given the market in which we compete. In addition, they are metrics that management can calculate and communicate to employees. Using growth in total revenue as a performance measure in our PSUs aligns with our strategy of growth through acquisitions, and balances with the use of organic revenue (which incentivizes management to grow our existing business) as a performance measure under our Bonus Program. We use non-GAAP EPS because we believe the adjustments we make to our EPS for purposes of our incentive programs provide a more accurate picture of the value of our company than EPS computed in accordance with GAAP. In particular, we believe it is appropriate to exclude non-cash accounting charges for amortization of goodwill from EPS as we believe our value, and the value of the companies in our industry we acquire, is not in the tangible property we own, but rather in the design and development of products which we then have other people build for us. As such, we believe deducting a non-cash expense from earnings would under-represent our core profitability. Grant of Fiscal 2024 PSU Awards. In June 2023, the Compensation Committee approved an award of PSUs to each of the named executive officers then employed with us, with the target number of PSUs subject to these awards as follows: Mr. Whitaker – 130,150 PSUs, Mr. Bass – 84,880 PSUs, and Mr. Holliday – 84,880 PSUs. The target number of PSUs subject to each award was determined by dividing a dollar amount determined by the Compensation Committee (Mr. Whitaker - $575,000, Mr. Bass - $375,000, and Mr. Holliday - $375,000) by the average closing price of our common stock over the last 30 trading days before July 1, 2023 (the last 30 trading days of the last full fiscal quarter prior to the quarter in which the grant was made). The vesting of each award is subject to the Company’s performance over each of fiscal 2024, fiscal 2025 and fiscal 2026 (as well as the executive’s continued employment with the Company), with one-third of the target number of PSUs for the award allocated to fiscal 2024, two-thirds of the target number of PSUs for the award allocated to fiscal 2025, and 100% of the target number of PSUs for the award allocated to fiscal 2026 (and with the number of PSUs vested for fiscal 2025 and fiscal 2026 to be reduced by any PSUs that vested for a prior fiscal year). The percentage of the target number of PSUs that vest for each performance period is determined 60% based on the Company’s revenue compound annual growth rate (“Revenue CAGR”) for the applicable period and 40% based on the Company’s non-GAAP EPS compound annual growth rate (“Non-GAAP EPS CAGR”) for the performance period (with the Company’s revenue and non-GAAP EPS for fiscal 2023 used in each case as the base year). In no event will an award vest more than 200% of the target number of PSUs subject to the award (with interim limits such that no more than 40% of the total target number of PSUs subject to award may vest for fiscal 2024 and no more than 90% of the total target number of PSUs subject to the award may vest for fiscal 2024 and fiscal 2025 in the aggregate). When it approved these grants in June 2023, the Compensation Committee provided that the vesting percentage for the PSUs allocated to each performance period would be determined in accordance with the following table (with the percentage determined by linear interpolation for performance between the levels indicated in the table):
EXECUTIVE COMPENSATION
In addition, the Compensation Committee determined that the vesting percentage for the portion of the award allocated to fiscal 2026 would also be subject to a multiplier based on the Company’s TSR for the entire three-year period covered by the award (consisting of fiscal 2024, fiscal 2025 and fiscal 2026) relative to the TSRs for the companies in the Russell Microcap Index for that period (the “TSR Multiplier”). If the Company’s relative TSR for the three-year period was at the 25th percentile or lower, the TSR Multiplier would be 66 2/3%, and if the Company’s relative TSR for the three-year period was at the 75th percentile or higher, the TSR Multiplier would be 133 1/3%. If the Company’s relative TSR for the three-year period was between the 25th percentile and the 75th percentile, the TSR Multiplier would be determined by linear interpolation for performance between 66 2/3% and 133 1/3%. However, in no event will an award vest more than 200% of the target number of PSUs subject to the award. In August 2024, the Compensation Committee determined that the Company’s Revenue CAGR for fiscal 2024 was 22%, and the Company’s Non-GAAP EPS CAGR for fiscal 2024 was 82% (in each case determined as described above under the terms of the fiscal 2024 awards). Accordingly, each of these named executive officers’ awards for fiscal 2024 vested as to 40% of the total target number of PSUs subject to the award for the fiscal 2024 performance period. Vesting of Fiscal 2023 PSU Awards During Fiscal 2024. In July 2022, the Compensation Committee approved an award of PSUs to each of the named executive officers then employed with the Company, with the target number of PSUs subject to these awards as follows: Mr. Whitaker - 109,489 PSUs and Mr. Holliday – 72,993 PSUs. The target number of PSUs subject to each award was determined by dividing a dollar amount determined by the Compensation Committee (Mr. Whitaker - $600,000 and Mr. Holliday - $400,000) by the average closing price of our common stock over the last 30 trading days before July 1, 2022. The vesting of each award is subject to the Company’s performance over each of fiscal 2023, fiscal 2024 and fiscal 2025 (as well as the executive’s continued employment with the Company), with one-third of the target number of PSUs for the award allocated to fiscal 2023, two-thirds of the target number of PSUs for the award allocated to fiscal 2024, and 100% of the target number of PSUs for the award allocated to fiscal 2025 (and with the number of PSUs vested for fiscal 2024 and fiscal 2025 to be reduced by any PSUs that vested for a prior fiscal year). As with the PSUs granted to the named executive officers for fiscal 2024 described above, the percentage of the target number of PSUs that vest for each performance period is determined 60% based on the Company’s Revenue CAGR for the applicable period and 40% based on the Company’s Non-GAAP EPS CAGR for that period (with the Company’s revenue and non-GAAP EPS for fiscal 2022 used in each case as the base year), using the same performance targets and vesting percentages specified in the table above and with the vesting of the portion of the award allocated to fiscal 2025 subject to a TSR Multiplier as described above. In no event will an award vest more than 200% of the target number of PSUs subject to the award (with interim limits such that no more than 40% of the total target number of PSUs subject to award may vest for fiscal 2023 and no more than 90% of the total target number of PSUs subject to the award may vest for fiscal 2023 and fiscal 2024 in the aggregate). In August 2024, the Compensation Committee determined that the Company’s Revenue CAGR for fiscal 2024 was 11%, and the Company’s Non-GAAP EPS CAGR for fiscal 2024 was 10% (in each case determined as described above under the terms of the fiscal 2023 awards). Accordingly, each of these named executive officers’ awards for fiscal 2023 vested for the fiscal 2024 performance period as to 37% of the total target number of PSUs subject to the award. Vesting of Fiscal 2022 PSU Awards During Fiscal 2023. In July 2021, the Compensation Committee approved an award of PSUs to each of the named executive officers then employed with the Company, with the target number of PSUs subject to these awards as follows: Mr. Whitaker - 50,459 PSUs and Mr. Holliday - 36,698 PSUs. The target number of PSUs subject to each award was determined by dividing a dollar amount determined by the Compensation Committee (Mr. Whitaker - $275,000 and Mr. Holliday - $200,000) by the average closing price of our common stock over the last 30 trading days before July 1, 2021. The vesting of each award is subject to the Company’s performance over each of fiscal 2022, fiscal 2023 and fiscal 2024 (as well as the executive’s continued employment with the Company), with one-third of the target number of PSUs for the award allocated to fiscal 2022, two-thirds of the target number of PSUs for the award allocated to fiscal 2023, and 100% of the target number of PSUs for the award allocated to fiscal 2024 (and with the number of PSUs vested for fiscal 2023 and fiscal 2024 to be reduced by any PSUs that vested for a prior fiscal year). As with the PSUs granted to the named executive officers for fiscal 2024 described above, the percentage of the target number of PSUs that vest for each performance period is determined 60% based on the Company’s Revenue CAGR for the applicable period and 40% based on the Company’s Non-GAAP EPS CAGR for that period (with the Company’s revenue and non-GAAP EPS for fiscal 2021 used in each case as the base year), using the same performance targets and vesting percentages specified in the table above. In no event will an award vest more than 150% of the target number of PSUs subject to the award (with interim limits such that no more than 40% of the total target number of PSUs subject to award may vest for fiscal 2022 and no more than 90% of the total target number of PSUs subject to the award may vest for fiscal 2022 and fiscal 2023 in the aggregate). In August 2024, the Compensation Committee determined that the Company’s Revenue CAGR for fiscal 2024 was 31%, and the Company’s Non-GAAP EPS CAGR for fiscal 2024 was 28% (in each case determined as described above under the terms of the fiscal 2022 awards). Accordingly, each of these named executive officers’ awards for fiscal 2022 vested as to a number of PSUs that, when aggregated with the number of PSUs that previously vested based on fiscal 2022 and fiscal 2023 performance, would result in the award being vested as to 150% of the total target number of PSUs subject to the award. New-Hire Grants to Mr. Awsare. During fiscal 2024, the Compensation Committee approved an award of 470,255 RSUs and two awards of PSUs (with an aggregate target number of 459,058 shares subject to the awards) to Mr. Awsare as an inducement to him to commence employment with the Company, provide long-term retention incentives, and further align his interests with those of our stockholders. As discussed below, the RSUs were awarded as a one-time inducement grant to help make Mr. Awsare whole for compensation he would be foregoing in accepting employment with the Company. Mr. Awsare’s annual equity award from the Company for fiscal 2024 was entirely in the form of PSUs.
EXECUTIVE COMPENSATION
The number of shares subject to these awards was determined by dividing a dollar amount specified in Mr. Awsare’s employment agreement ($2,100,000 for the RSUs, $2,050,000 for the target number of PSUs) by the average of the closing prices for a share of the Company’s common stock over the thirty consecutive trading days prior to Mr. Awsare’s start date with the Company. The RSU award vests as to one-third of the RSUs on each of November 1, 2024, November 1, 2025 and November 1, 2026. The vesting of one of the PSU awards (with a target number of 235,127 shares) will be determined using the same performance metrics and goals as the PSU awards granted to the named executive officers for fiscal 2024 as described above (including the TSR Multiplier, which is determined based on our relative TSR over the entire three-year performance period covered by the award), except that 16% of the target number of PSUs for the award are allocated to fiscal 2024, 42% of the target number of PSUs for the award allocated to fiscal 2025, and 100% of the target number of PSUs for the award allocated to fiscal 2026. In addition, no more than 20% of the target number of PSUs for the award may vest for fiscal 2024. Based on the performance results noted above, the Compensation Committee determined in August 2024 that 20% of the PSUs subject to the award vested for the fiscal 2024 performance period. The vesting of Mr. Awsare’s other PSU award (with a target number of 223,931 shares) will be determined solely based on the Company’s TSR for the three-year period commencing on Mr. Awsare’s start date with the Company relative to the TSRs for the companies in the Russell Microcap Index for that three-year period, with the award vesting as 50% of the target number of PSUs if the Company’s relative TSR for the three-year period is at the 50th percentile and 200% if the Company’s relative TSR for the three-year period is at the 75th percentile or higher (the “Relative TSR PSU Award”). If the Company’s relative TSR for the three-year period is between the 50th percentile and the 75th percentile, the vesting percentage will be determined by linear interpolation between the 50% and 200% levels, and no portion of the award will vest if the Company’s relative TSR for that period is below the 50th percentile. For all three awards, vesting is also contingent on Mr. Awsare’s continued employment with the Company through the applicable vesting date. In approving an award for Mr. Awsare (and the other named executive officers hired during fiscal year 2024 as described below) that vests based solely on our TSR performance, the Compensation Committee believed that this structure would help further align the interests of our executives with those of our stockholders. In determining the value of the inducement grant of time-based RSUs to Mr. Awsare, the Compensation Committee took into account the value of unvested equity awards granted to Mr. Awsare by his prior employer (which was approximately $5,500,000) that Mr. Awsare would forfeit in commencing employment with the Company. Similarly, the Compensation Committee approved a sign-on bonus for Mr. Awsare as noted below under “Description of Employment Agreements—Cash Compensation.” These arrangements were negotiated with Mr. Awsare and intended to help make Mr. Awsare whole for compensation he would be foregoing in accepting employment with the Company. New-Hire Grants to Other Executives. During fiscal 2024, the Compensation Committee approved an award of 62,404 RSUs and a Relative TSR PSU Award with a target number of 43,204 shares to Mr. Hoff, and an award of 95,691 RSUs and a Relative TSR PSU Award with a target number of 66,248 shares to Mr. Gurusamy. Each of these awards was granted as an inducement to the executive to commence employment with the Company, provide long-term retention incentives, and further align his interests with those of our stockholders. The number of shares subject to these awards was determined by dividing a dollar amount specified in the executive’s offer letter (for each executive, $325,000 for the RSUs and $225,000 for the target number of PSUs) by the average of the closing prices for a share of the Company’s common stock over the thirty consecutive trading days prior to the executive’s start date with the Company. Each RSU award vests over a three-year period, with one-third of the RSUs subject to the award vesting after one year and the remaining RSUs subject to the award vesting ratably over a period of eight quarters thereafter. The Relative TSR PSU Awards are subject to the same vesting terms described above for Mr. Awsare’s Relative TSR PSU Award, except that the three-year performance period to determine vesting of the executive’s award begins with that executive’s start date with the Company. In each case, vesting is also contingent on the executive’s continued employment with the Company through the applicable vesting date. Delegation to CEO of Certain Grant Authority. The Compensation Committee has delegated authority to our Chief Executive Officer to grant options and/or RSUs to selected newly-hired employees, other than executive officers and employees directly reporting to the Chief Executive Officer, within certain parameters established by the Compensation Committee. Management reports these new-hire award grants to the Compensation Committee. Grant of Fiscal 2025 Equity Awards. In July 2024, the Compensation Committee made several changes to our equity award program in approving the fiscal 2025 awards for our named executive officers. Specifically, the award for Mr. Awsare consists one-third of PSUs that vest based on growth in the Company’s revenue and non-GAAP EPS during each of fiscal 2025, fiscal 2026 and fiscal 2027 (with vesting to occur each year only if a threshold level of growth for both metrics is achieved), one-third of PSUs that vest based solely on the Company’s TSR for the three-year period consisting of fiscal 2025, fiscal 2026 and fiscal 2027 relative to the TSRs for the companies in the Russell Microcap Index, and one-third of RSUs that vest in installments over a three-year period, subject to the executive’s continued employment. For the other named executive officers (other than Mr. Holliday), their fiscal 2025 awards consist 25% of each of the two PSU grants described above and 50% of RSUs, with vesting of each award on the same terms as the grants to Mr. Awsare. The number of RSUs and the target number of PSUs for these awards was determined based on the dollar values approved by the Compensation Committee (allocated for each executive as noted above) and converted into shares using the same methodology as described above for the fiscal 2024 grants. In approving these changes, the Compensation Committee believed they would help align our program more closely with the interests of our stockholders and be a more prudent use of our equity. Benefits All of our executive officers are eligible to participate in our benefits programs offered to our employees generally, which include medical, dental and vision plans, our 2013 Employee Stock Purchase Plan, a 401(k) plan, tuition reimbursement, life insurance and short and long-term disability coverage. In designing our employee benefits program, we seek to provide an overall level of benefits that is competitive with that offered by similarly situated companies in the markets in which we operate based upon our general understanding of industry practices. The Company makes matching contributions under the 401(k) plan to each plan participant, including our executive officers, in an amount equal to 25% of the first 6% of salary deferred by the participant.
EXECUTIVE COMPENSATION
The Company has an executive physical program, under which Mr. Awsare and Mr. Whitaker were eligible to be reimbursed during fiscal 2024 up to $2,500 for the costs of an annual executive physical examination. With the exception of this annual executive physical program, it is our policy to not extend significant perquisites to executives that are not broadly available to our other employees. The Company may provide additional benefits to newly-hired executive officers as an inducement to their joining the Company. During fiscal 2024, the Company provided sign-on bonuses to Mr. Awsare, Mr. Hoff and Mr. Gurusamy in their new employment agreements with the Company as noted below under “Description of Employment Agreements – Cash Compensation.” Mr. Awsare’s employment agreement also provides that he may be reimbursed for certain relocation expenses. However, no such expenses were reimbursed during fiscal 2024. Severance Arrangements The Company has entered into arrangements with its executive officers to provide severance benefits upon certain terminations of their employment with the Company, including retention agreements entered into with each of Messrs. Whitaker, Holliday and Bass in July 2023 and new severance agreements entered into with each of Mr. Awsare, Mr. Hoff and Mr. Gurusamy during fiscal 2024. These agreements are described in more detail below under “Severance and Change in Control Arrangements with Named Executive Officers.” Clawback Policy In accordance with SEC and Nasdaq requirements, the Board has adopted an executive compensation recovery policy regarding the adjustment or recovery of certain incentive awards or payments made to current or former executive officers in the event that we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws. In general, the policy provides that, unless an exception applies, we will seek to recover compensation that is awarded to an executive officer based on the Company’s attainment of a financial metric during the three-year period prior to the fiscal year in which the restatement occurs, to the extent such compensation exceeds the amount that would have been awarded based on the restated financial results. Tax Considerations Section 162(m) of the Internal Revenue Code generally prohibits a publicly-held company from deducting compensation paid to a current or former named executive officer that exceeds $1 million during the tax year. Certain awards granted before November 2, 2017 that were based upon attaining pre-established performance measures that were set by the Compensation Committee under a plan approved by our stockholders, as well as amounts payable to former executives pursuant to a written binding contract that was in effect on November 2, 2017, may qualify for an exception to the $1 million deductibility limit. The Compensation Committee notes this deductibility limitation as one of the factors in its consideration of compensation matters. However, the Compensation Committee generally has the flexibility to take any compensation-related actions that it determines are in the Company’s and its stockholders’ best interest, including designing and awarding compensation for our executive officers that is not fully deductible for tax purposes. Risk Management Considerations Our Compensation Committee structures our executive compensation programs so as to appropriately reward executives for operating performance and growth without undue risk-taking and oversees, among other things, the assessment and management of risks related to the Company’s compensation plans and policies. The Compensation Committee has evaluated our compensation policies and programs and believes that our compensation policies and practices provide appropriate incentives and controls and are not reasonably likely to have a material adverse effect on the Company. Executive Stock Ownership Requirements The Board grants equity-based awards to members of senior management, and encourages members of senior management to acquire and hold stock in the Company, to further align the interests of the executives with the stockholders. However, neither the Board nor the Compensation Committee has established formal stock ownership guidelines for the executive officers of the Company.
Fiscal 2024 Summary Compensation Table
Fiscal 2024 Summary Compensation Table The following table sets forth, for the fiscal years indicated, the compensation paid to our named executive officers:
Fiscal 2024 Summary Compensation Table
| Name and Principal Position(s) | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2)(3) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(1) | All Other Compensation ($)(4) | Total ($) | | Saleel Awsare(5) Chief Executive Officer | 2024 | 298,077 | 90,666 | 5,488,377 | — | 204,167 | 5,006 | 6,086,293 | | Jeremy R. Whitaker(6) Former Chief Financial Officer | 2024 | 299,135 | — | 534,651 | — | 136,500 | 2,929 | 973,215 | | | 2023 | 255,000 | — | 566,130 | — | — | 2,784 | 823,914 | | Kurt Hoff(7) VP of Worldwide Sales | 2024 | 103,077 | 66,666 | 477,685 | — | 37,906 | 1,853 | 687,187 | | Mathi Gurusamy(8) Chief Strategy Officer | 2024 | 38,077 | 25,000 | 792,839 | — | — | 381 | 856,297 | | Eric Bass(9) VP of Engineering | 2024 | 274,519 | — | 348,680 | — | 96,250 | 4,118 | 723,567 | | | 2023 | 100,962 | — | 720,369 | 230,269 | — | 1,442 | 1,053,042 | | Roger Holliday(10) Former VP of Worldwide Sales | 2024 | 280,010 | — | 348,680 | — | 98,175 | 4,050 | 730,915 | | | 2023 | 251,923 | — | 377,422 | — | — | 4,879 | 634,224 |
Fiscal 2024 Summary Compensation Table
| (1) The amounts reported in the “Bonus” column represent the installments of the named executive officer’s sign-on bonus that vested during fiscal 2024. The amounts reported in the “Non-Equity Incentive Plan Compensation” column represent the named executive officer’s annual bonus for the applicable fiscal year. As noted above, the annual bonuses for Messrs. Awsare and Hoff for fiscal 2024 were pro-rated as they joined the Company during the fiscal year. |
Fiscal 2024 Summary Compensation Table
| (2) The dollar value of stock and option awards shown represents the grant date fair value determined in accordance with FASB ASC Topic 718. For a discussion of the valuation assumptions used in the calculations, see Note 6 of Notes to Consolidated Financial Statements, included in Part IV, Item 15 of our Form 10-K, which was filed with the SEC on September 9, 2024 (or, for awards granted prior to fiscal 2024, the corresponding note in the Form 10-K for that fiscal year). The material terms of these awards are described in the “Equity Awards” section of this proxy statement above. |
Fiscal 2024 Summary Compensation Table
| (3) A portion of the amounts reported in the “Stock Awards” column for each named executive officer for each fiscal year reflects the grant-date fair value of performance stock units granted to the executives during that fiscal year assuming the target level of performance conditions was achieved. These amounts were based on the probable outcome (as of the grant date) of the performance-based conditions applicable to the awards, as determined under generally accepted accounting principles. The following table presents the aggregate grant-date fair value of these performance-based awards granted in fiscal 2024 and 2023 included in the “Stock Awards” column for those years and the aggregate grant-date fair value of these awards assuming that the highest level of performance conditions was achieved. |
Fiscal 2024 Summary Compensation Table
| Name | Aggregate Grant Date Fair Value of Performance Awards (Fiscal 2024) | | Aggregate Grant Date Fair Value of Performance Awards (Fiscal 2023) | | | | Based on Probable Outcome as of the Grant Date ($) | Based on Maximum Performance ($) | Based on Probable Outcome as of the Grant Date ($) | Based on Maximum Performance ($) | | Saleel Awsare | 3,024,238 | 6,846,907 | — | — | | Jeremy R. Whitaker | 534,654 | 1,324,927 | 566,130 | 1,132,260 | | Kurt Hoff | 232,438 | 464,875 | — | — | | Mathi Gurusamy | 427,300 | 854,599 | — | — | | Eric Bass | 348,680 | 864,078 | 426,997 | 853,994 | | Roger Holliday | 348,680 | 864,078 | 377,422 | 754,844 |
Fiscal 2024 Summary Compensation Table
| (4) The amounts reported for fiscal 2024 in this column for each of the named executive officers represent matching contributions under the Company’s 401(k) plan. |
Fiscal 2024 Summary Compensation Table
| (5) Mr. Awsare commenced employment with us on November 20, 2023. |
Fiscal 2024 Summary Compensation Table
| (6) Mr. Whitaker served as our Interim Chief Executive Officer from June 30, 2023 through November 19, 2023. He resigned as our Chief Financial Officer effective September 13, 2024. |
Fiscal 2024 Summary Compensation Table
| (7) Mr. Hoff commenced employment with us on March 4, 2024. |
Fiscal 2024 Summary Compensation Table
| (8) Mr. Gurusamy commenced employment with us on May 13, 2024. |
Fiscal 2024 Summary Compensation Table
| (9) Mr. Bass commenced employment with us on January 30, 2023. |
Fiscal 2024 Summary Compensation Table
| (10) Mr. Holliday stepped down from his position as Vice President, Worldwide Sales, effective February 29, 2024, and continued his employment with the Company thereafter in a non-officer role. His employment with the Company terminated on September 30, 2024. |
Outstanding Equity Awards at 2024 Fiscal Year End
Outstanding Equity Awards at 2024 Fiscal Year End The following table provides information concerning outstanding equity awards held by our named executive officers as of June 30, 2024.
Outstanding Equity Awards at 2024 Fiscal Year End
| | Option Awards | | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Grant Date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | Saleel Awsare | — | — | — | — | — | 11/20/2023 | 470,255(2) | 1,669,405 | — | — | | | — | — | — | — | — | 11/20/2023 | 47,025(3) | 166,940 | 423,229(4) | 1,502,463 | | | — | — | — | — | — | 11/20/2023 | — | — | 223,931(5) | 794,955 | | Jeremy R. Whitaker | 8/29/2017 | 29,720 | — | 2.16 | 8/29/2024 | 7/27/2021 | 30,276(6) | 107,480 | — | — | | | — | — | — | — | — | 7/5/2022 | 40,876(7) | 145,109 | 68,813(8) | 244,286 | | | — | — | — | — | — | 7/3/2023 | 52,060(9) | 184,813 | 208,240(10) | 739,252 | | Kurt Hoff | — | — | — | — | — | 3/5/2024 | 62,404(11) | 221,534 | — | — | | | — | — | — | — | — | 3/5/2024 | — | — | 43,204(5) | 153,374 | | Mathi Gurusamy | — | — | — | — | — | 6/1/2024 | 95,691(12) | 339,703 | — | — | | | — | — | — | — | — | 6/1/2024 | — | — | 66,248(5) | 235,180 | | Eric Bass | 2/1/2023 | 33,333 | 66,667(13) | 4.95 | 2/1/2030 | 2/1/2023 | 40,746(14) | 144,652 | — | — | | | — | — | — | — | — | 2/1/2023 | 32,184(7) | 114,253 | 54,023(8) | 191,782 | | | — | — | — | — | — | 7/3/2023 | 33,952(9) | 120,530 | 135,808(10) | 482,118 | | Roger Holliday | 2/4/2020 | 100,000 | — | 3.79 | 2/4/2027 | 7/27/2021 | 22,019(6) | 78,167 | — | — | | | — | — | — | — | — | 7/5/2022 | 27,251(7) | 96,740 | 45,742(8) | 162,384 | | | — | — | — | — | — | 7/3/2023 | 33,952(9) | 120,530 | 135,808(10) | 482,118 |
Outstanding Equity Awards at 2024 Fiscal Year End
| (1) In accordance with applicable SEC regulations, the market value of the shares in each of these columns has been determined based on the closing price of our common stock on June 28, 2024, the last trading day of fiscal 2023, which was $3.55. |
Outstanding Equity Awards at 2024 Fiscal Year End
| (2) These RSUs will vest as to one-third of the RSUs on each of November 1, 2024, November 1, 2025 and November 1, 2026. |
Outstanding Equity Awards at 2024 Fiscal Year End
| (3) This item represents the portion of an inducement award of PSUs granted to the executive during fiscal 2024 that was eligible to vest based on the Company’s performance during fiscal 2024 and reflects the number of PSUs subject to such portion the Compensation Committee determined were eligible to vest based on such performance. These PSUs vested on August 26, 2024. |
Outstanding Equity Awards at 2024 Fiscal Year End
| (4) This item represents the portion of an inducement award of PSUs granted to the executive during fiscal 2024 that will be eligible to vest based on the Company’s performance during fiscal 2025 and fiscal 2026. As the maximum performance level for the award was achieved in fiscal 2024, in accordance with SEC requirements, the number of PSUs reported in the table reflects 180% of the total target number of shares subject to the award (i.e. the number of PSUs that would be eligible to vest for fiscal 2025 and fiscal 2026 if the maximum performance levels were achieved). |
Outstanding Equity Awards at 2024 Fiscal Year End
| (5) This item represents an inducement award of PSUs granted to the executive during fiscal 2024 that will be eligible to vest based on the Company’s relative TSR over a three-year period commencing on the executive’s start date with the Company (i.e. November 20, 2023 for Mr. Awsare, March 4, 2024 for Mr. Hoff, and May 13, 2024 for Mr. Gurusamy). The number of PSUs reported in the table reflects the total target number of shares subject to the award. |
Outstanding Equity Awards at 2024 Fiscal Year End
| (6) This item represents the portion of an award of PSUs granted to the executive during fiscal 2022 that was eligible to vest based on the Company’s performance during fiscal 2024 and reflects the number of PSUs subject to such portion the Compensation Committee determined were eligible to vest based on such performance. These PSUs vested on August 26, 2024. |
Outstanding Equity Awards at 2024 Fiscal Year End
| (7) This item represents the portion of an award of PSUs granted to the executive during fiscal 2023 that was eligible to vest based on the Company’s performance during fiscal 2024 and reflects the number of PSUs subject to such portion the Compensation Committee determined were eligible to vest based on such performance. These PSUs vested on August 26, 2024. |
Outstanding Equity Awards at 2024 Fiscal Year End
| (8) This item represents the portion of an award of PSUs granted to the executive during fiscal 2023 that will be eligible to vest based on the Company’s performance during fiscal 2025. As the threshold performance level for the award was achieved in fiscal 2024, in accordance with SEC requirements, the number of PSUs reported in the table reflects 63% of the total target number of shares subject to the award (i.e. the number of PSUs that would be eligible to vest for fiscal 2025 if the target performance level was achieved). |
Outstanding Equity Awards at 2024 Fiscal Year End
| (9) This item represents the portion of an award of PSUs granted to the executive during fiscal 2024 that was eligible to vest based on the Company’s performance during fiscal 2024 and reflects the number of PSUs subject to such portion the Compensation Committee determined were eligible to vest based on such performance. These PSUs vested on August 26, 2024. |
Outstanding Equity Awards at 2024 Fiscal Year End
| (10) This item represents the portion of an award of PSUs granted to the executive during fiscal 2024 that will be eligible to vest based on the Company’s performance during fiscal 2025 and fiscal 2026. As the maximum performance level for the award was achieved in fiscal 2024, in accordance with SEC requirements, the number of PSUs reported in the table reflects 160% of the total target number of shares subject to the award (i.e. the number of PSUs that would be eligible to vest for fiscal 2025 and fiscal 2026 if the maximum performance levels were achieved). |
Outstanding Equity Awards at 2024 Fiscal Year End
| (11) These RSUs will vest according to the following schedule: one-third of the RSUs vest on March 1, 2025, with the remaining RSUs vesting ratably over the period of eight quarters thereafter, such that 100% of the RSUs will be fully vested as of March 1, 2027. |
Outstanding Equity Awards at 2024 Fiscal Year End
| (12) These RSUs will vest according to the following schedule: one-third of the RSUs vest on June 1, 2025, with the remaining RSUs vesting ratably over the period of eight quarters thereafter, such that 100% of the RSUs will be fully vested as of June 1, 2027. |
Outstanding Equity Awards at 2024 Fiscal Year End
| (13) This option will vest according to the following schedule: 25% of the shares subject to the option vested on February 1, 2024, with the remaining shares subject to the option vesting ratably at the beginning of each of the 36 months thereafter, such that 100% of the shares subject to the option will be vested as of February 1, 2027. |
Outstanding Equity Awards at 2024 Fiscal Year End
| (14) The 59,267 RSUs subject to this grant vest according to the following schedule: 25% of the RSUs vested on March 1, 2024, with the remaining RSUs vesting ratably at the beginning of each of the 12 quarters thereafter, such that 100% of the RSUs will be fully vested as of March 1, 2027. |
Pay Versus Performance
Pay Versus Performance The following summarizes the relationship between the total compensation paid to our Chief Executive Officer (“CEO”) and our other named executive officers and our financial performance for the fiscal years shown in the table (in this discussion, our CEO is also referred to as our principal executive officer or “PEO”, and our named executive officers other than our CEO are referred to as our “Non-PEO NEOs”):
Pay Versus Performance
| Fiscal Year | Summary Compensation Table Total for CEO #1 ($)(1)(2) | Compensation Actually Paid to CEO #1 ($)(3) | Summary Compensation Table Total for CEO #2 ($)(1)(2) | Compensation Actually Paid to CEO #2 ($)(3) | Summary Compensation Table Total CEO #3 ($)(3) | Compensation Actually Paid to CEO #3 ($)(3) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(1)(2) | Average Compensation Actually Paid to Non-PEO NEOs ($)(3) | Value of Initial Fixed $100 Investment Based On LTRX TSR ($)(4) | LTRX Net Income ($ Millions)(5) | | (a) | (b) | (c) | (b) | (c) | (b) | (c) | (d) | (e) | (f) | (g) | | 2024 | N/A | N/A | 973,215 | 584,664 | 6,086,293 | 4,071,910 | 749,491 | 576,850 | 68.80 | (4.200) | | 2023 | 1,348,502 | 446,463 | 823,914 | 760,771 | N/A | N/A | 843,633 | 737,446 | 81.59 | (8.980) | | 2022 | 1,173,445 | 2,106,704 | N/A | N/A | N/A | N/A | 587,962 | 894,949 | 104.26 | (5.362) |
Pay Versus Performance
| (1) Mr. Pickle (“CEO #1”) was our CEO for fiscal year 2022 and for fiscal year 2023 through his resignation on June 29, 2023. Mr. Whitaker (“CEO #2”) served as Interim CEO for the remainder of fiscal year 2023 and during fiscal year 2024 through November 19, 2023. Mr. Awsare (“CEO #3”) served as our CEO for the remainder of fiscal year 2024. For fiscal year 2022, our Non-PEO NEOs were Mr. Whitaker, Mr. Holliday and Fathi Hakam, our former Vice President of Engineering. For fiscal year 2023, our Non-PEO NEOs were Mr. Holliday and Mr. Bass. For fiscal year 2024, our Non-PEO NEOs were Messrs. Hoff, Gurusamy, Bass and Holliday. |
Pay Versus Performance
| (2) See the Summary Compensation Table above for detail on the Summary Compensation Table total compensation for our CEO for each fiscal year covered in the table. The average compensation for the Non-PEO NEOs for fiscal year 2024 was calculated from the Summary Compensation Table above. The average compensation for the Non-PEO NEOs for fiscal years 2022 and 2023 was calculated from the Summary Compensation Table as disclosed in the Company’s Proxy Statement filed with the SEC in calendar year 2022 and 2023, respectively. |
Pay Versus Performance
| (3) For purposes of this table, the compensation actually paid (also referred to as “CAP”) to each of our named executive officers (including, for purposes of this table, former named executive officers who are included in the Non-PEO NEO group for the applicable year) means the named executive officer’s total compensation as reflected in the Summary Compensation Table for the applicable fiscal year and adjusted for the following with respect to each named executive officer: |
Pay Versus Performance
| • | Less the amounts reported in the “Stock Awards” and “Option Awards” columns of the Summary Compensation Table for the applicable fiscal year, |
Pay Versus Performance
| • | Plus the fiscal year-end value of Lantronix option and stock awards granted in the covered fiscal year which were outstanding and unvested at the end of the covered fiscal year, |
Pay Versus Performance
| • | Plus/(less) the change in value as of the end of the covered fiscal year as compared to the value at the end of the prior fiscal year for Lantronix option and stock awards which were granted in prior fiscal years and were outstanding and unvested at the end of the covered fiscal year, |
Pay Versus Performance
| • | Plus the vesting date value of Lantronix option and stock awards which were granted and vested during the same covered fiscal year, |
Pay Versus Performance
| • | Plus/(less) the change in value as of the vesting date as compared to the value at the end of the prior fiscal year for Lantronix option and stock awards which were granted in prior fiscal years and vested in the covered fiscal year, |
Pay Versus Performance
| • | Less, as to any Lantronix option and stock awards which were granted in prior fiscal years and were forfeited during the covered fiscal year, the value of such awards as of the end of the prior fiscal year, |
Pay Versus Performance
| • | Plus the dollar value of any dividends or other earnings paid during the covered fiscal year on Lantronix outstanding and unvested stock awards (no dividends or dividend equivalents are credited with respect to Lantronix options and, for other Lantronix awards, the crediting of dividend equivalents has been taken into account in determining the applicable fiscal year-end or vesting date value of the award), |
Pay Versus Performance
| • | Plus, as to a Lantronix option or stock award that was materially modified during the covered fiscal year, the amount by which the value of the award as of the date of the modification exceeds the value of the original award on the modification date (none of the Lantronix option or stock awards held by the named executive officers were materially modified during the fiscal years covered by the table. |
Pay Versus Performance
In making each of these adjustments, the “value” of an option or stock award is the fair value of the award on the applicable date determined in accordance with FASB ASC Topic 718 using the valuation assumptions we then used to calculate the fair value of our equity awards. For more information on the valuation of our equity awards, please see the notes to our financial statements that appear in our Annual Report on Form 10-K each fiscal year and the footnotes to the Summary Compensation Table that appears in our annual Proxy Statement. The table above reflects the CAP (determined as noted above) for each CEO and, for our Non-PEO NEOs, the average of the CAPs determined for the Non-PEO NEOs for each of the fiscal years shown in the table. The following table provides a reconciliation of the Summary Compensation Table Total to Compensation Actually Paid for our CEO #1.
Pay Versus Performance
| Reconciliation of Summary Compensation Table Total to Compensation Actually Paid for CEO #1 | Fiscal Year 2024 ($) | Fiscal Year 2023 ($) | Fiscal Year 2022 ($) | | Summary Compensation Table Total | N/A | 1,348,502 | 1,173,445 | | Grant Date Fair Value of Option and Stock Awards Granted in Fiscal Year | N/A | (943,552) | (389,460) | | Fair Value at Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Fiscal Year | N/A | 0 | 488,902 | | Change in Fair Value of Outstanding and Unvested Option and Stock Awards Granted in Prior Fiscal Years | N/A | 0 | 35,591 | | Fair Value at Vesting of Option and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | N/A | 0 | 0 | | Change in Fair Value as of Vesting Date of Option and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | N/A | 464,354 | 798,226 | | Fair Value as of Prior Fiscal Year-End of Option and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | N/A | (422,841) | 0 | | Compensation Actually Paid | N/A | 446,463 | 2,106,704 |
Pay Versus Performance
The following table provides a reconciliation of the Summary Compensation Table Total to Compensation Actually Paid for our CEO #2.
Pay Versus Performance
| Reconciliation of Summary Compensation Table Total to Compensation Actually Paid for CEO #2 | Fiscal Year 2024 ($) | Fiscal Year 2023 ($) | Fiscal Year 2022 ($) | | Summary Compensation Table Total | 973,215 | 823,914 | N/A | | Grant Date Fair Value of Option and Stock Awards Granted in Fiscal Year | (534,651) | (566,130) | N/A | | Fair Value at Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Fiscal Year | 434,921 | 527,422 | N/A | | Change in Fair Value of Outstanding and Unvested Option and Stock Awards Granted in Prior Fiscal Years | (91,466) | (62,759) | N/A | | Fair Value at Vesting of Option and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | 0 | 0 | N/A | | Change in Fair Value as of Vesting Date of Option and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | (197,355) | 38,324 | N/A | | Fair Value as of Prior Fiscal Year-End of Option and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | 0 | 0 | N/A | | Compensation Actually Paid | 584,664 | 760,771 | N/A |
Pay Versus Performance
The following table provides a reconciliation of the Summary Compensation Table Total to Compensation Actually Paid for our CEO #3.
Pay Versus Performance
| Reconciliation of Summary Compensation Table Total to Compensation Actually Paid for CEO #3 | Fiscal Year 2024 ($) | Fiscal Year 2023 ($) | Fiscal Year 2022 ($) | | Summary Compensation Table Total | 6,086,293 | N/A | N/A | | Grant Date Fair Value of Option and Stock Awards Granted in Fiscal Year | (5,488,377) | N/A | N/A | | Fair Value at Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Fiscal Year | 3,473,993 | N/A | N/A | | Change in Fair Value of Outstanding and Unvested Option and Stock Awards Granted in Prior Fiscal Years | 0 | N/A | N/A | | Fair Value at Vesting of Option and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | 0 | N/A | N/A | | Change in Fair Value as of Vesting Date of Option and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | 0 | N/A | N/A | | Fair Value as of Prior Fiscal Year-End of Option and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | 0 | N/A | N/A | | Compensation Actually Paid | 4,071,910 | N/A | N/A |
Pay Versus Performance
The following table provides a reconciliation of the average of the Summary Compensation Table Total for the Non-PEO NEOs for a fiscal year to the average of the Compensation Actually Paid for the Non-PEO NEOs for that fiscal year.
Pay Versus Performance
| Reconciliation of Average Summary Compensation Table Total to Average Compensation Actually Paid for Non-PEO NEOs | Fiscal Year 2024 ($) | Fiscal Year 2023 ($) | Fiscal Year 2022 ($) | | Summary Compensation Table Total | 749,491 | 843,633 | 587,962 | | Grant Date Fair Value of Option and Stock Awards Granted in Fiscal Year | (491,971) | (664,030) | (206,425) | | Fair Value at Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Fiscal Year | 425,140 | 627,287 | 259,130 | | Change in Fair Value of Outstanding and Unvested Option and Stock Awards Granted in Prior Fiscal Years | (48,850) | (38,865) | 53,743 | | Fair Value at Vesting of Option and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | 0 | 0 | 0 | | Change in Fair Value as of Vesting Date of Option and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | (56,961) | (30,579) | 200,539 | | Fair Value as of Prior Fiscal Year-End of Option and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | 0 | 0 | 0 | | Compensation Actually Paid | 576,850 | 737,446 | 894,949 |
Pay Versus Performance
| (4) LTRX TSR represents cumulative total stockholder return on a fixed investment of $100 in the Company’s common stock for the period beginning on the last trading day of fiscal year 2021 through the end of the applicable fiscal year, and is calculated assuming the reinvestment of dividends. The following chart illustrates the CAP for our CEO and the average CAP for our Non-PEO NEOs for each of the last three fiscal years against the Company’s total stockholder return (calculated as described above) over that period of time. |
Pay Versus Performance
| (5) This column shows the Company’s net income for each fiscal year covered by the table. The following chart illustrates the CAP for our CEO and the average CAP for our Non-PEO NEOs for each of the last three fiscal years against the Company’s net income for each of those years. |