DEF 14A of Red Violet, Inc.
Filed Apr 25, 2024 · FY20230001193125-24-114003
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS At the Meeting, we will be electing five directors. Each director will hold office until the 2025 Annual Meeting or until a successor is elected and qualified to serve on the Board. The Board has nominated the five individuals listed below (each a “Nominee,” and together the “Nominees”) based on the recommendation of the Board’s Corporate Governance and Nominating Committee. All of the Nominees are current directors and each nominee has consented to being named in this proxy statement and has agreed to serve as a director if elected. If any Nominee should become unavailable for election, the proxy may be voted for a substitute nominee selected by the persons named in the proxy or the Board may determine to reduce the size of the Board accordingly. The Board is not aware of any existing circumstances likely to render any Nominee unavailable. Under our amended and restated bylaws (“Bylaws”), Nominees are elected by a plurality of votes cast. In January 2024, Mr. Dubner identified William Livek as a director candidate and presented Mr. Livek to the Board’s Corporate Governance and Nominating Committee as a highly qualified director candidate. Upon the recommendation of the Board’s Corporate Governance and Nominating Committee, the Board appointed Mr. Livek to the Board in January 2024. The following table sets forth certain information concerning our directors nominees:
ELECTION OF DIRECTORS
| Name | Position | Director Since | | Derek Dubner | Chief Executive Officer and Chairman of the Board | 2017 | | Peter Benz | Director | 2018 | | William Livek | Director | 2024 | | Steven Rubin | Director | 2018 | | Lisa Stanton | Director | 2021 |
Biographical Information About Our Nominees
Biographical Information About Our Nominees Derek Dubner, 52, has served as the Chief Executive Officer and a director of the Company since its formation in August 2017 and continuing through the Spin-off (as defined below) from cogint on March 26, 2018. Mr. Dubner was appointed as Interim Chairman of our Board in September 2018 and as Chairman of our Board in April 2020. Mr. Dubner served as the Chief Executive Officer and a director of Fluent, Inc. (“Fluent”) from March 2016 until March 2018 when Fluent spun-off red violet (the “Spin-off”). Prior to serving as Fluent’s Chief Executive Officer, Mr. Dubner served as Co-Chief Executive Officer from March 2015 until March 2016, when he was appointed Fluent’s Chief Executive Officer. Mr. Dubner has served as the Chief Executive Officer of our subsidiary The Best One, Inc. (“TBO”), now known as IDI Holdings, LLC (“IDI Holdings”), a holding company engaged in the acquisition of operating businesses and the acquisition and development of technology assets across various industries, and its subsidiary, Interactive Data, LLC (“Interactive Data”), since October 2014. Prior to TBO, Mr. Dubner served as General Counsel of TransUnion Risk and Alternative Data Solutions, Inc. (“TRADS”) from December 2013 to June 2014. Mr. Dubner served as General Counsel and Secretary of TLO, LLC (“TLO”), an information solutions provider, from inception in 2009 to December 2013. Mr. Dubner has over 20 years of experience in the data and analytics industry. The Board believes Mr. Dubner’s experience as the Company’s Chief Executive Officer, along with his prior executive and managerial experience, provides valuable business, industry, and management advice to the Board. Peter Benz, 63, has served as a director of the Company since March 2018. Mr. Benz served as the Chief Executive Officer of Viking Asset Management, LLC, an asset and investment management company which he founded in 2001 until December 23, 2021. From March 2015 until April 1, 2020, Mr. Benz served as a director of Fluent. From December 2020 until May 2021, Mr. Benz served as a director of Marathon Digital Holdings, Inc., a digital asset technology company that mines cryptocurrency. From June 2016 until May 2018, Mr. Benz served as a director of Lilis Energy Inc., an onshore oil and natural gas exploration and production company. From January 2012 until its merger with Lilis Energy Inc. in June 2016, Mr. Benz served as a director of Brushy Resources, Inc. (formerly known as Starboard Resources, Inc.), an onshore oil and natural gas exploration and production company, and became its Chairman on November 24, 2015. Mr. Benz also served as a director of Usell.com, a technology-based online marketplace, from October 2014 until January 2018. Mr. Benz served as a director and Chairman of the Board of Optex Systems Holdings, Inc., a manufacturer of optical systems for the defense industry, from November 2014 until August 2017. The Board believes Mr. Benz’s knowledge and experience in developing companies and capital markets strengthens the Board’s collective qualifications, skills, and experience. William (Bill) Livek, 69, has served as Non-Executive Vice Chairman of comScore, Inc. (“Comscore”), a media measurement and analytics company, since January 2016. Mr. Livek had served as Comscore’s Chief Executive Officer from November 2019 to July 2022, as a Special Advisor to the CEO from June 2018 to November 2019, and its President from January 2016 to May 2018. He previously served as Vice Chairman and Chief Executive Officer of Rentrak Corporation (“Rentrak”), a media measurement and consumer targeting company, where he led the effort of building Rentrak into a $1 billion market capitalization company before merging Comscore into Rentrak in January 2016. Prior to Rentrak, Mr. Livek was founder and Chief Executive Officer of Symmetrical Capital; Senior Vice President, Strategic Alliances and International Expansion, of Experian Information Solutions, Inc., a provider of information, analytical and marketing services; and co-President of Experian’s subsidiary Experian Research Services. Mr. Livek also serves on the board of directors of Adstra, Civic Science, The Covenant House, and the Advertising Research Foundation (ARF). He holds a degree in Communications from Southern Illinois University. The Board believes Mr. Livek’s knowledge and experience in building platform-driven solutions to derive consumer insights brings valuable business leadership and strengthens the Board’s collective overall skills and experience. Steven Rubin, 63, has served as a director of the Company since March 2018 and served as a director of Fluent from October 2009 until March 2018. Mr. Rubin has served as the Executive Vice President of OPKO Health, Inc. since May 2007 and a director of OPKO since February 2007. Mr. Rubin currently serves on the board of directors of Cocrystal Pharma, Inc., a biotechnology company developing new treatments for viral diseases, Eloxx Pharmaceuticals, Inc., a clinical stage biopharmaceutical company, and ChromaDex Corp., a science-based, integrated nutraceutical company devoted to improving the way people age. Mr. Rubin previously served as a director of Neovasc, Inc., a company that develops and markets medical specialty vascular devices, prior to its acquisition by Shockwave Medical, Inc., Non-Invasive Monitoring Systems, Inc., a medical device company, VBI Vaccines, Inc., a biopharmaceutical company developing next generation vaccines, BioCardia, Inc., a clinical-stage regenerative medicine company developing novel therapeutics for cardiovascular diseases, Kidville, Inc., which operates large, upscale facilities, catering to newborns through five-year-old children, Sevion Therapeutics, Inc., prior to its merger with Eloxx Pharmaceuticals, Inc., Dreams, Inc., a vertically integrated sports licensing and products company, SciVac Therapeutics, Inc. prior to its merger with VBI Vaccines, Inc., Tiger X Medical, Inc. prior to its merger with BioCardia, Inc., Castle Brands, Inc., a developer and marketer of premium brand spirits and Fluent. Mr. Rubin also served as the Senior Vice President, General Counsel and Secretary of IVAX Corporation from August 2001 until September 2006. Mr. Rubin served as the Secretary of Ideation Acquisition Corp., a predecessor entity of Fluent, from June 2007 to October 2009. The Board believes Mr. Rubin’s legal experience, managerial experience, and the knowledge and insight he has attained through his service as a director and officer of several publicly-traded corporations provides valuable business leadership and management advice to the Board.
Biographical Information About Our Nominees
Lisa Stanton, 60, has served as a director of the Company since August 2021. Ms. Stanton currently serves on the Board of Directors of Washington Trust Bancorp, Inc., the parent company of The Washington Trust Company, the oldest community bank in the United States and largest state-chartered bank headquartered in Rhode Island. Ms. Stanton previously served on the Board of Directors of Trulioo, a global identity verification provider based in Vancouver, Canada, from January 2020 until July 2021. Additionally, she served as a member of the Venture Investments Board and as an advisor to the IT Resilience and Strategy Committee of the Board of Directors of Nationwide Building Society, a financial institution in London, England from September 2016 through December 2019. She has more than 25 years of financial services, technology and data security experience, most recently serving as General Manager, Enterprise Strategy for American Express from December 2018 through her retirement in April 2020. From 2014 through 2016, she served as Chief Executive Officer for InAuth, a digital security solutions provider to global financial institutions. Following the acquisition of InAuth by American Express in 2016, she continued serving as InAuth’s President through 2018. She was the founder of the U.S. division of Monitise, a mobile banking and payments platform for financial institutions, where she served as Chief Executive Officer from 2007 to 2009, General Manager of the London-based Monitise Group from 2009 to 2013 and President, Americas from 2013 to 2014. She also served as a Senior Vice President for Citizens Financial Group from 1996 to 2007 and First New Hampshire Bank from 1991 to 1996, holding leadership roles in real estate; venture capital; retail distribution; digital, mobile and online channels; and card and payments products. She began her career as a commercial real estate broker, attaining the designation of Certified Commercial Investment Member (CCIM). The Board believes Ms. Stanton’s knowledge and experience in financial services, technology, and security brings valuable business leadership and strengthens the Board’s collective overall skills, and experience.
Director Compensation
Director Compensation Beginning on August 5, 2021, the Compensation Committee approved the Company’s Non-Employee Director Compensation Policy. Non-employee directors continued to receive annual cash compensation of $25,000, payable in quarterly installments, which was originally approved effective for the year ending December 31, 2020. Further, upon joining the Board, non-employee directors shall receive a grant of restricted stock units (“RSUs”) with an approximate value of $75,000, vesting in three equal annual installments commencing approximately on the first anniversary of the grant date. The Compensation Committee is empowered to grant additional equity awards to non-employee directors based upon individual contribution to the Company. Based on each individual director’s contributions to the Company, including service on the Board and its Committees, on November 30, 2023, the Compensation Committee awarded each of Mr. Benz and Mr. Rubin a grant of 10,800 RSUs (5,000 RSUs for serving on the Board, 4,000 RSUs for serving on the Audit Committee and 1,800 RSUs for serving as the Chair of the Audit Committee in the case of Mr. Benz and 1,800 RSUs for serving as the Chair of both the Compensation Committee and Corporate Governance and Nominating Committees for Mr. Rubin), Mr. Swayman received a grant of 9,000 RSUs (5,000 RSUs for serving on the Board and 4,000 RSUs for serving on the Audit Committee) and Ms. Stanton received a grant of 5,000 RSUs for serving on the Board. Each of the RSU Awards granted to the directors vest one-third annually on each of December 1, 2024, December 1, 2025 and December 1, 2026 (the “2023 Time-Based Vesting Requirement”). William Livek joined the Board effective January 5, 2025 and was granted 4,150 RSUs which vest pursuant to the 2023 Time-Based Vesting Requirement.
DIRECTOR COMPENSATION TABLE
DIRECTOR COMPENSATION TABLE The following table summarizes the compensation for each of the Company’s non-employee directors for the year ended December 31, 2023.
DIRECTOR COMPENSATION TABLE
| Name | Cash | Stock awards (1)(2) | Total | | Peter Benz (3) | $25,000 | $225,936 | $250,936 | | Steven Rubin (4) | $25,000 | $225,936 | $250,936 | | Lisa Stanton (5) | $25,000 | $104,600 | $129,600 | | Robert Swayman (6) | $25,000 | $188,280 | $213,280 |
DIRECTOR COMPENSATION TABLE
| (1) This column reflects the aggregate grant date fair value of stock awards granted in 2023 computed in accordance with FASB ASC Topic 718. In determining the grant date fair value for RSUs, the Company used the closing price of the Company’s common stock on the grant date. |
DIRECTOR COMPENSATION TABLE
| (2) As of December 31, 2023, each director held unvested RSUs as follows: Mr. Benz – 20,966, Mr. Rubin – 20,966, Ms. Stanton – 9,299 and Mr. Swayman – 17,466. |
DIRECTOR COMPENSATION TABLE
| (3) Mr. Benz was granted 10,800 RSUs on November 30, 2023 for his service as a director at a fair value of $20.92 per share. |
DIRECTOR COMPENSATION TABLE
| (4) Mr. Rubin was granted 10,800 RSUs on November 30, 2023 for his service as a director at a fair value of $20.92 per share. |
DIRECTOR COMPENSATION TABLE
| (5) Ms. Stanton was granted 5,000 RSUs on November 30, 2023 for his service as a director at a fair value of $20.92 per share. |
DIRECTOR COMPENSATION TABLE
| (6) Mr. Swayman was granted 9,000 RSUs on November 30, 2023 for his service as a director at a fair value of $20.92 per share. Mr. Swayman resigned from the Board effective April 23, 2024. |
Nominees for Director and Other Stockholder Proposals
Nominees for Director and Other Stockholder Proposals Stockholder proposals intended to be presented at the 2025 Annual Meeting must be received by our Corporate Secretary at 2650 North Military Trail, Suite 300, Boca Raton, Florida 33431 not later than December 26, 2024 to be considered for inclusion in our proxy materials, pursuant to Rule 14a-8 under the Exchange Act. The Corporate Governance and Nominating Committee will consider all qualified director candidates identified by various sources, including members of the Board, management and stockholders. Candidates for directors recommended by stockholders will be given the same consideration as those identified from other sources. The Corporate Governance and Nominating Committee is responsible for reviewing each candidate’s biographical information and assessing each candidate’s independence, skills, qualifications, and expertise based on a number of factors. While we do not have a formal policy on diversity, when considering the selection of director nominees, the Corporate Governance and Nominating Committee considers individuals with diverse backgrounds, viewpoints, accomplishments, cultural backgrounds, and professional expertise, among other factors. Only persons who are nominated in accordance with the procedures set forth in our Bylaws will be eligible for election as directors. Nominations of persons for election to the Board and other proposals presented to our stockholders may be made at a meeting of stockholders at which directors are to be elected only (i) by or at the direction of the Board or (ii) by any stockholder of the Company entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in our Bylaws. Such nominations and other proposals presented to our stockholders, other than those made by or at the direction of the Board, shall be made by timely notice in writing to the Corporate Secretary of the Company. To be timely, a stockholder’s nomination for a director or other stockholder proposal must be delivered to the Corporate Secretary at the Company’s principal executive offices at 2650 North Military Trail, Suite 300, Boca Raton, Florida 33431 no later than the close of business on the ninetieth (90th) day, nor earlier than the close of business on the one hundred twentieth (120th) day, before the first anniversary of the preceding year’s annual meeting. The stockholder’s notice shall set forth as to each person whom the stockholder proposes to nominate for election as a director: (i) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or all information that is required in connection with a stockholder proposal, in each case pursuant to and in accordance with the Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder, and (ii) such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected. Pursuant to our Bylaw requirements and assuming that the 2025 Annual Meeting is held on May 30, 2025, any stockholder proposal to be considered at the 2025 Annual Meeting, including nominations of persons for election to our board of directors, must be properly submitted to us not earlier than January 30, 2025, nor later than March 1, 2025. Additionally, to comply with the SEC’s universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 31, 2025.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table summarizes the compensation earned by each of the named executive officers for the years ended December 31, 2023 and 2022.
SUMMARY COMPENSATION TABLE
| Name and principal position | Year | Salary | Bonus (1) | Stock awards (2) | All other compensation (3) | Total | | Derek Dubner (4)(5) | 2023 | $459,394 | $350,000 | $836,800 | $17,575 | $1,663,769 | | (Chief Executive Officer) | 2022 | $416,641 | $350,000 | $676,400 | $15,985 | $1,459,026 | | James Reilly (4)(5) | 2023 | $429,309 | $350,000 | $836,800 | $15,018 | $1,631,127 | | (President) | 2022 | $389,356 | $350,000 | $676,400 | $13,744 | $1,429,500 | | Daniel MacLachlan (4)(5) | 2023 | $429,309 | $350,000 | $836,800 | $15,018 | $1,631,127 | | (Chief Financial Officer) | 2022 | $389,356 | $350,000 | $676,400 | $13,744 | $1,429,500 |
SUMMARY COMPENSATION TABLE
| (1) This column represents a discretionary cash bonus to each executive in recognition of the executive’s contribution to the Company’s financial and operational success throughout the year. |
SUMMARY COMPENSATION TABLE
| (2) This column reflects the aggregate grant date fair value of stock awards granted in 2023 and 2022, respectively, computed in accordance with FASB ASC Topic 718. In determining the grant date fair value for RSUs, the Company used the closing price of the Company’s common stock on the grant date. |
SUMMARY COMPENSATION TABLE
| (3) Amounts in this column represent matching contributions made to the Company’s 401(k) plan. The named executive officers are eligible for matching contributions on the same basis as all eligible employees. |
SUMMARY COMPENSATION TABLE
| (4) On October 12, 2022, each of Messrs. Dubner, Reilly and MacLachlan were granted 40,000 RSUs at a grant date fair value of $16.91 per share, which vest one-third annually on each of November 1, 2023, November 1, 2024 and November 1, 2025 (the “2022 Time-Based Vesting Requirement”). |
SUMMARY COMPENSATION TABLE
| (5) On November 30, 2023, each of Messrs. Dubner, Reilly and MacLachlan were granted 40,000 RSUs at a grant date fair value of $20.92 per share, which vest pursuant to the 2023 Time-Based Vesting Requirement. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table sets forth certain information regarding equity-based awards held by the named executive officers as of December 31, 2023.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | Stock awards | | | Name | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested (1) | | Derek Dubner | 10,833(2) | $216,335 | | | 26,666(3) | $532,520 | | | 40,000(4) | $798,800 | | James Reilly | 10,833(2) | $216,335 | | | 26,666(3) | $532,520 | | | 40,000(4) | $798,800 | | Daniel MacLachlan | 10,833(2) | $216,335 | | | 26,666(3) | $532,520 | | | 40,000(4) | $798,800 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (1) Determined by multiplying the closing price of the Company’s common stock on December 29, 2023, $19.97, by the number of shares of common stock underlying the RSUs. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (2) On September 24, 2021, the Compensation Committee granted 32,500 RSUs to each of Messrs. Dubner, Reilly and MacLachlan, which vest in three equal annual installments on October 1, 2022, October 1, 2023 and October 1, 2024 (the “2021 Time-Based Vesting Requirement”). |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (3) On October 12, 2022, the Compensation Committee granted 40,000 RSUs to each of Messrs. Dubner, Reilly and MacLachlan, which vest one-third annually pursuant to the 2022 Time-Based Vesting Requirement. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (4) On November 29, 2023, the Compensation Committee granted 40,000 RSUs to each of Messrs. Dubner, Reilly and MacLachlan, which vest one-third annually pursuant to the 2023 Time-Based Vesting Requirement. |
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The Company is providing the following information that shows the difference in the value of compensation paid to our NEOs at different points in time as required by the rules of the SEC.
Pay vs. Performance Table
Pay vs. Performance Table
Pay vs. Performance Table
| Year | Summary Compensation Table Total for PEO ($) (1) | Compensation Actually Paid to PEO ($) (2) | Average Summary Compensation Table Total for Non-PEO NEOs ($) (1) | Average Compensation Actually Paid to Non- PEO NEOs ($) (2) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return ($) (3) | Net Income ($) | | 2023 | 1,663,769 | 1,411,205 | 1,631,127 | 1,378,563 | $50.31 | 13,529,000 | | 2022 | 1,459,026 | (992,191) | 1,429,500 | (1,021,717) | $58.00 | 616,000 |
Pay vs. Performance Table
| (1) Reflects the total compensation of our current CEO, Derek Dubner (“PEO”). Our non-PEO NEOs include James Reilly, our President and Daniel MacLachlan, our CFO, for each of the years ended December 31, 2023 and 2022 (the “Covered Years”). Amounts shown in these columns are as calculated in the Summary Compensation Table for each of the years shown. |
Pay vs. Performance Table
| (2) For each Covered Year, in determining both the compensation actually paid for our PEO and the compensation actually paid for our Non-CEO NEOs for purposes of this Pay Versus Performance table, we deducted from or added back to the total amount of compensation reported in these columns for such Covered Year the following amounts: |
Pay vs. Performance Table
| Item and Value Added (Deducted) For PEO: | 2023 | 2022 | | Summary Compensation Table Total for PEO | $1,663,769 | $1,459,026 | | Deduction for Summary Compensation Table “Stock Awards” column value | (836,800) | (676,400) | | Increase for year-end fair value of outstanding equity awards granted in Covered Year | 798,800 | 920,800 | | Decrease for change in fair value of outstanding equity awards granted in prior years | (114,372) | (527,872) | | Decrease for change in fair value of prior-year equity awards vested in Covered Year | (100,192) | (2,167,745) | | Compensation actually paid to PEO | $1,411,205 | $(992,191) |
Pay vs. Performance Table
| Item and Value Added (Deducted) Average for Non-PEO NEOs: | 2023 | 2022 | | Average Summary Compensation Table Total for Non-CEO NEOs | $1,631,127 | $1,429,500 | | Deduction for Summary Compensation Table “Stock Awards” column value | (836,800) | (676,400) | | Increase for year-end fair value of outstanding equity awards granted in Covered Year | 798,800 | 920,800 | | Decrease for change in fair value of outstanding equity awards granted in prior years | (114,372) | (527,872) | | Decrease for change in fair value of prior-year equity awards vested in Covered Year | (100,192) | (2,167,745) | | Average compensation actually paid to Non-CEO NEOs | $1,378,563 | $(1,021,717) |
Pay vs. Performance Table
| (3) For each Covered Year, our total shareholder return (“TSR”) was calculated based on the percentage change in our cumulative TSR on our common stock, measured as the quotient of (a) the difference between the closing market prices of our common stock at the end versus the beginning of the last trading day before the earliest fiscal year in this Pay Versus Performance table through the last trading date of each Covered Year (the “Measurement Period”), divided by (b) the closing market price of our common stock on the last trading day before the earliest fiscal year in this Pay Versus Performance table. Each of these percentage changes was then applied to a deemed fixed investment of $100 at the beginning of the Measurement Period to produce the Covered Year-end cumulative values of such investment as of the end of 2023 and 2022, as applicable. |
Pay vs. Performance Table
The following charts provide, across the Covered Years, descriptions of the relationships between (1) the compensation actually paid for the PEO and the compensation actually paid for our Non-PEO NEOs (in each case as set forth in the Pay Versus Performance table above) and (2) the total shareholder return and net income set forth in the Pay Versus Performance table above.