Karl S. Dahlquist
About Karl S. Dahlquist
Karl S. Dahlquist, J.D., C.C.E.P. is AtriCure’s Chief Legal Officer, serving in this role since March 2019 after joining the company in August 2013 as Vice President, Legal & Regulatory Affairs and Chief Compliance Officer; he is 55 years old and holds B.S. and J.D. degrees from the University of Michigan . Under the current leadership team, AtriCure delivered 2024 revenue of $465.3 million (+16.5% YoY) with adjusted EBITDA of $31.1 million, while annual incentive payouts for 2024 were calibrated to 101.4% of target—anchored 70% on revenue growth and 30% on strategic “Pillar & People” objectives . Over 2024, the “value of $100 invested” TSR metric stood at $94.00 for ATRC versus $84.53 for its index peer set, providing context for relative market performance disclosure in the proxy’s pay-versus-performance framework . Prior to AtriCure, Dahlquist held senior legal, compliance, and quality roles at Medtronic (Senior Counsel, Spinal & Biologics), St. Jude Medical, GE Healthcare, and Johnson & Johnson .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| AtriCure | Chief Legal Officer | Mar 2019–present | Executive leadership of legal, compliance, and regulatory; named NEO . |
| AtriCure | VP, Legal & Regulatory Affairs; Chief Compliance Officer | Aug 2013–Mar 2019 | Built and led legal/compliance infrastructure during growth phase . |
| Medtronic | Senior Counsel, Spinal & Biologics | Not disclosed | Medical device litigation/regulatory expertise supporting large device franchise . |
| St. Jude Medical | Senior legal/compliance/quality roles | Not disclosed | Expanded compliance and quality leadership across device portfolio . |
| GE Healthcare | Senior legal/compliance/quality roles | Not disclosed | Global healthcare legal/compliance experience . |
| Johnson & Johnson | Senior legal/compliance/quality roles | Not disclosed | Multinational device compliance and operations exposure . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $417,570 | $430,097 |
| Target Annual Incentive (% of Salary) | 55% | 60% |
| Target Annual Incentive ($) | $230,784 | $259,317 |
| Actual Annual Incentive Paid ($) | $326,098 | $262,948 |
| Stock Awards ($) | $1,368,316 | $1,783,828 |
| All Other Compensation ($) | $18,723 | $14,061 |
| Total Compensation ($) | $2,130,707 | $2,490,934 |
Performance Compensation
2024 Annual Incentive Plan (company-wide metrics; applies to NEOs)
| Metric | Threshold | Target | Maximum | Actual | Weight | Component Payout (% of Target) | Plan Contribution (% of Target) |
|---|---|---|---|---|---|---|---|
| Worldwide Revenue Growth | 14.0% | 17.1% | 24.0% | 16.5% | 70% | 91.3% | 63.9% |
| Pillar & People Objectives | 4 goals | 6 goals | 10 goals | 7 goals | 30% | 125.0% | 37.5% |
| Total | — | — | — | — | 100% | — | 101.4% |
Notes: 2024 plan weighting increased emphasis on revenue (removal of the gross margin metric used in 2023) to reflect investor focus and international expansion; payout equaled 101.4% of target .
Long-Term Equity Structure and 2024 Grants (Dahlquist)
- Equity mix for NEOs (ex-CEO): 50% performance share awards (PSAs) and 50% time-based restricted stock (RSAs) .
- PSA metrics and weighting (2024 grant): 75% Revenue CAGR (performance condition) and 25% relative TSR vs NASDAQ Health Care Index (market condition); PSA payouts are measured over three years with TSR leg capped at target if ATRC TSR is negative .
- Vesting: RSAs vest in 1/3 annual installments over 3 years; PSAs vest at the end of the 3-year period subject to performance; 2022 PSAs vested at 96% attainment on 12/31/2024 .
| Award (Karl S. Dahlquist) | Grant Date | Target LTI Value ($) | Grant-Date Fair Value ($) | Shares Granted (#) | Vesting |
|---|---|---|---|---|---|
| PSAs | 3/1/2024 | $800,000 | $983,854 | 22,050 (target) | Cliff vest at 3 years, performance-based |
| RSAs | 3/1/2024 | $800,000 | $799,974 | 22,050 | 1/3 per year over 3 years |
Equity Ownership & Alignment
- Beneficial ownership (Karl S. Dahlquist): 67,729 shares as of March 27, 2025; <1% of shares outstanding .
- Ownership guidelines: Specified Officers must hold >1x annual base salary; all NEOs meet the guideline .
- Hedging/pledging: Prohibited by insider trading policy (includes margin accounts and hedging instruments) .
- Options: No options granted in 2024; NEO equity is primarily RSAs/PSAs; no unexercised options reported for Dahlquist at 12/31/2024 .
Outstanding and Unvested Equity (12/31/2024):
| Item | Count/Value |
|---|---|
| Unvested RSAs (#) | 22,050 |
| Unvested RSAs (Market Value at $30.56) | $673,848 |
| Unvested PSAs (#; 2023/2024 grants at target; 2022 reflected at 96% attainment) | 22,050 (2024 grant at target) |
| Unvested PSAs (Market Value at $30.56) | $673,848 |
Employment Terms
| Provision | Terms |
|---|---|
| Severance (non-CIC) | Executive Leadership Severance Policy provides 1.5x base salary, paid over 18 months, for eligible executive officers (ex-CEO) in certain involuntary terminations not involving a change in control . |
| Change-in-Control (CIC) | Dahlquist’s CIC agreement provides for six months of base salary plus target bonus for the severance period upon qualifying termination during a CIC period (as defined) . |
| Equity on CIC | Plan provides for full vesting of Options/SARs and Full-Value Awards and target-level vesting of performance awards upon a Change in Control unless awards are assumed or substituted; otherwise subject to award agreements . |
| Clawback | Company-wide recoupment policy applies to incentive compensation, including equity; awards subject to forfeiture/repayment under policy . |
| Hedging/Pledging | Prohibited for directors, officers, and employees . |
Estimated Potential Payments as of 12/31/2024 (Company Table):
| Item | Amount ($) |
|---|---|
| Payments under Employment/CIC Agreement | $481,281 |
| Aggregate Value of Unvested Equity Awards | $1,784,612 |
| Other | $0 |
Performance & Track Record
Company operating context during Dahlquist’s tenure as CLO:
| Metric | 2023 | 2024 |
|---|---|---|
| Revenue ($ millions) | $399.2 | $465.3 |
| Revenue Growth (%) | 20.8% | 16.5% |
| Adjusted EBITDA ($ millions) | $19.4 | $31.1 |
| “$100 Investment” TSR (Year-end) | $109.78 | $94.00 |
Say-on-Pay support (advisory):
- 2023 program voted in May 2024: 83.6% approval .
- 2024 program voted in May 2025: 84.6% approval .
Compensation Structure Analysis
- Pay-for-performance design: Annual bonuses (60–70% revenue-weighted over 2023–2024) and PSAs (75% revenue CAGR/25% relative TSR) directly tie pay to top-line growth and relative shareholder returns, with plan-level caps and TSR caps when negative—mitigating windfalls and aligning with investor priorities .
- Equity risk mix: Shifted away from options; awards are RSAs/PSAs with minimum one-year vesting, three-year performance periods, and explicit no-repricing policy—lowering risk of misaligned incentives and discouraging short-termism .
- Governance protections: Clawback policy, prohibition on hedging/pledging, absence of tax gross-ups and option repricing, and double-trigger CIC approach reflect stronger shareholder protections .
Risk Indicators & Red Flags
- No excise tax gross-ups on new agreements; options are not repriced; hedging/pledging prohibited; clawback in place .
- Minimal perquisites (none disclosed for Dahlquist; company notes broad-based programs only) .
- Section 16(a) compliance: Company reported general compliance; one late Form 4 was noted for a different executive; no issue cited for Dahlquist .
Equity Ownership & Alignment
| Category | Detail |
|---|---|
| Beneficial Ownership | 67,729 shares (<1% of class) as of Mar 27, 2025 |
| Ownership Guideline | >1x salary for Specified Officers; all NEOs meet guideline |
| Pledging/Hedging | Prohibited |
| Overhang/Unvested | Meaningful unvested PSAs/RSAs create retention hooks; 2022 PSAs vested at 96% |
Employment Terms
- Severance provides 1.5x base salary for non-CIC reductions and six months base plus target bonus in a CIC context (per individual agreement); equity may accelerate subject to plan/assumption mechanics; clawback applies broadly .
Investment Implications
- Alignment: Dahlquist’s incentive structure is tightly coupled to revenue growth and relative TSR via PSAs, with company-wide AIP emphasizing top-line expansion; hedging/pledging prohibitions and stock ownership guidelines reinforce alignment .
- Retention/overhang: Significant unvested RSAs/PSAs (e.g., 22,050 RSAs and 22,050 PSAs at 12/31/2024) and 3-year performance cycles create ongoing retention incentives and predictable vesting supply that may add incremental selling pressure around vest dates, subject to trading windows and policy constraints .
- CIC economics: Compared with typical 1x–2x market severance, Dahlquist’s CIC cash multiple (six months base plus target bonus) is moderate, with potential equity acceleration governed by plan assumption/substitution—limiting windfall risk while maintaining retention value .
- Governance quality: Clawback, no option repricing, no gross-ups, and double-trigger language, combined with consistent say-on-pay support (83.6% in 2024; 84.6% in 2025), signal pay practices likely acceptable to mainstream investors and proxy advisers .
Overall, compensation mechanics and policy guardrails, together with material unvested equity, suggest high alignment and manageable retention risk; monitoring upcoming PSA cycles and RSA vesting cadence can inform expectations for any discretionary insider sales subject to trading windows and policy constraints .