Michael Praeger
About Michael Praeger
Michael Praeger, age 57, is the cofounder (April 2000) of AvidXchange and has served as Chief Executive Officer and Chairman of the Board since October 2021; he previously served as President until January 2023. He holds a BSBA in Finance from Georgetown University and has 28+ years managing technology and web services companies, including co-founding PlanetResume.com and InfoLink Partners prior to AvidXchange . Under his leadership in 2024, AvidXchange delivered 15.3% revenue growth, expanded GAAP gross margin by 450 bps to 66.8% (non-GAAP gross margin 73.6%), achieved GAAP EPS of $0.04 versus a $(0.23) loss in 2023, and grew net cash from operations to $71.9M, enabling repayment of $63M debt and execution of $50M of a $100M buyback authorization . Pay-versus-performance disclosures show 2024 cumulative TSR of 41.46 vs 132.59 for the peer index, with net income of $8.1M and revenue of $438.9M .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| PlanetResume.com | Co-Founder and Executive | Not disclosed | Merged with CareerShop.com in November 1999, demonstrating execution in online recruiting tech . |
| InfoLink Partners | Co-Founder and CEO | Not disclosed | Built software automating municipal tax billing/collection and corporate escheat recovery services . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| AvidXchange, Inc. (pre-IPO subsidiary) | Director | Since 2000 | Long-term stewardship of operating subsidiary; continuity to public parent . |
| Other public/private boards | — | — | No additional external public company board roles disclosed . |
Fixed Compensation
| Component | FY 2024 | Notes |
|---|---|---|
| Base Salary | $525,000 | Up 5.0% YoY . |
| Target Bonus % of Salary | 100% | CEO target unchanged YoY . |
| Actual Bonus Paid | $231,525 | 44.1% of target based on plan outcomes . |
| Other Compensation | $13,764 | Includes 401(k) match and minor benefits; eligible for up to $5,000/yr financial/tax planning reimbursement per employment agreement . |
CEO Multi-Year Compensation Summary
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary | $497,692 | $500,000 | $520,192 |
| Stock Awards (Grant-date fair value) | $4,200,000 | $4,312,827 | $4,836,108 |
| Option Awards (Grant-date fair value) | $1,799,481 | $1,849,122 | $2,099,998 |
| Non-Equity Incentive (Cash bonus) | $648,543 | $611,800 | $231,525 |
| All Other Compensation | $17,840 | $12,516 | $13,764 |
| Total | $7,163,557 | $7,286,265 | $7,701,587 |
Performance Compensation
| Metric | Weighting | Target | Actual | Payout % | Vesting/Timing |
|---|---|---|---|---|---|
| Revenue ($000s) | 55% | $456,884.0 | $438,940.0 | 0% | Annual AIP; cash-paid after certification . |
| Adjusted EBITDA ($000s) | 45% | $95,817.0 | $95,219.7 | 98.1% | Annual AIP; cash-paid after certification . |
| Weighted AIP Payout | 100% | — | — | 44.1% | Determined Q1 following performance year . |
| Equity Incentive Type | Grant Date | Size | Key Terms |
|---|---|---|---|
| RSUs | 3/6/2024 | 391,905 units | Service-based; vests 25% on Feb 15, 2025, then quarterly (May 15, Aug 15, Nov 15) over 3 years; eligible for accelerated vesting per employment agreement . |
| Stock Options | 3/6/2024 | 346,935 options @ $12.34 strike | Same vest schedule as RSUs; 10-year term; acceleration provisions per employment agreement . |
| Realized Activity in FY 2024 | Amount | Value |
|---|---|---|
| Options Exercised (shares) | 75,884 | $609,949 |
| Stock Vested (shares) | 416,252 | $4,734,706 |
Adjusted EBITDA definition and reconciliations to GAAP provided in Appendix A of the proxy .
Equity Ownership & Alignment
| Category | Shares/Units | Notes |
|---|---|---|
| Total Beneficial Ownership | 16,157,177 (7.8% of 206,238,144 outstanding) | Significant insider alignment. |
| Direct (individual) | 9,719,576 | Held by Mr. Praeger individually . |
| Joint (with spouse) | 660,627 | Joint tenants with right of survivorship . |
| Family/Trusts | 4,017,164 (GRATs, charitable trust, spouse) | Green and Gold 2014 GRAT (1,888,652), 2015 GRAT (1,328,276), MP Charitable Trust (213,468), spouse (586,768) . |
| Options exercisable within 60 days | 1,672,717 | Included in beneficial ownership . |
| RSUs vesting within 60 days | 87,093 | Included in beneficial ownership . |
| Outstanding Unvested RSUs (as of 12/31/2024) | 391,905 (2024 grant) | Market value at $10.34 closing price = $4,052,298 . |
| Outstanding Options Unexercisable (select awards) | 346,935 (2024 grant) | 10-year expiration 2/15/2034; $12.34 strike . |
- Ownership guidelines: CEO must hold 5x annual base salary; five-year phase-in starting December 2023; 100% post-tax retention until met if not compliant at year 5 .
- Hedging and pledging: Prohibited under insider trading policy (limited pledging exceptions require Compliance Officer pre-approval and financial capacity to repay without resort to pledged shares) .
Employment Terms
| Provision | Baseline Severance (non-CIC) | Change-in-Control (CIC) Severance | Notes |
|---|---|---|---|
| Salary Continuation | 12 months base salary | 18 months base salary | Termination without cause, death, disability, or resignation for good reason . |
| Bonus | — | Pro rata target bonus (100% of target) | Payable when bonuses are paid to other officers . |
| COBRA | 12 months reimbursement | 18 months reimbursement | Subject to release execution . |
| Equity Acceleration (pre-8/26/2021 options) | Full acceleration | Full acceleration | Applies to service-vested pre-agreement options . |
| Equity Acceleration (other service-vest awards) | 12 months acceleration | Full acceleration | Applies to all other service-based options/RSUs . |
| Good Reason | Title/authority diminution, salary reduction (proportional), relocation >50 miles (specific exceptions), failure of successor to assume agreement | Same | — |
Estimated Payments if Termination Occurred on 12/31/2024
| Scenario | Salary | Bonus | Accelerated Equity | COBRA/Other | Total |
|---|---|---|---|---|---|
| Disability | $525,000 | $0 | $5,015,573 | $30,117 | $5,570,691 |
| Death | $525,000 | $0 | $5,015,573 | $30,117 | $5,570,691 |
| Involuntary (non-CIC) | $525,000 | $0 | $5,015,573 | $30,117 | $5,570,691 |
| Involuntary (CIC) | $787,500 | $525,000 | $9,432,260 | $45,176 | $10,789,936 |
- Clawback policy: Adopted per Nasdaq Rule 10D for erroneously awarded incentive compensation on restatement; applies to Section 16 officers; includes both “Big R” and “little r” restatements, without fault requirement .
2025 Transaction Updates (Event-driven incentives and award treatment)
- TPG & Corpay completed acquisition for $10.00/share; AvidXchange is now private; transaction announced May 6, 2025, approved Sept 16, 2025, closed Oct 15, 2025 .
- Treatment of awards at closing: Vested options cashed out for intrinsic value; unvested options/RSUs converted to Post-Closing Cash Awards with original vesting terms; underwater options canceled .
- Praeger rollover: Michael Praeger and affiliates entered an amended and restated rollover agreement contributing certain Company shares in exchange for Topco units prior to Effective Time (amount of rollover shares unchanged) .
- Retention bonuses (three-year vest, cash or Topco units): $1,104,000 (Praeger), $462,000 (Wilhite), $378,000 (Drees), $282,000 (Gibson), $190,500 (Stahl) .
Board Governance
- Dual role: Praeger serves as combined Chairman and CEO; lead independent director (Asif Ramji) presides over executive sessions and acts as liaison; the Board believes this structure balances deep company expertise with independent oversight .
- Independence: Praeger is not independent under Nasdaq standards; remaining eight directors are independent .
- Committees: Audit (Chair: Hausman), Human Capital & Compensation (Chair: McGuire), Nominating & Corporate Governance (Chair: Mackintosh), Risk Management (Chair: Drummond); all comprised of independent directors .
- Board activity and attendance: Seven meetings in FY 2024; all directors met at least 75% attendance thresholds; all nine directors attended the 2024 annual meeting .
- Director compensation: Employee directors (including Praeger) receive no director pay; non-employee director retainers and RSU program detailed; chair retainer not paid to CEO .
Related-Party Transactions and Policies
- Investor Rights Agreement (July 2021) includes Praeger and affiliates, providing registration rights (demand/S-3/takedowns) .
- Mastercard strategic alliance: ~$9.33M paid to AvidXchange in 2024; Mastercard affiliate is a >5% holder .
- Insider trading policy: Prohibits hedging, short sales, and options transactions; pledging generally prohibited except limited pre-approved cases .
- Section 16 compliance: All timely in 2024 except one late Form 4 by an executive (not Praeger) .
Compensation Peer Group (Benchmarking)
| Peer Companies (selected) | — |
|---|---|
| Alkami Technology, Appfolio, Appian, BigCommerce, BILL Holdings, BlackLine, EverCommerce, Fastly, Flywire, Marqeta, MeridianLink, nCino, Olo, Open Lending, Payoneer Global, Paymentus, Phreesia, Q2 Holdings, Repay Holdings, EngageSmart (acquired), Model N (acquired), Everbridge (acquired) . |
Equity Plan Overhang and Dilution Monitoring
| Plan | Outstanding Awards | Weighted Avg Option Exercise Price | Shares Available (future issuance) |
|---|---|---|---|
| Shareholder-approved plans (2021 LTIP, ESPP, prior plans) | 17,494,751 (incl. 10,098,649 RSUs) | $9.02 (options only) | 33,910,856 (incl. 26,149,571 2021 Plan; 7,761,285 ESPP) |
Investment Implications
- Pay-for-performance alignment: 2024 AIP payout at 44.1% reflects strict financial targets (missed revenue threshold, near-target EBITDA), and multi-year equity grants heavily in RSUs with options for CEO only; lowers cash risk and ties realized value to sustained performance .
- Insider ownership and potential selling pressure: Praeger’s 7.8% stake and ongoing vesting create alignment; realized 2024 vest/exercise activity was moderate relative to ownership (416k vested, ~76k exercised), and post-transaction awards converted to time-based cash awards, moderating forced selling risk near term .
- CIC economics and retention: Robust CIC benefits ($10.79M estimated as of 12/31/2024) and a new $1.104M three-year retention bonus post-acquisition support leadership continuity; the rollover into Topco units further aligns with private-owner value creation, though combined CEO/Chairman role maintains governance concentration risk mitigated by a lead independent director and fully independent committees .
- Performance track record: 2024 operational improvements (gross margin expansion, return to GAAP profitability, strong operating cash flow) are favorable; TSR lagged the peer index over 2024 per pay-versus-performance disclosure, highlighting execution gains not fully reflected in public market valuation prior to take-private .
- Red flags to monitor: Limited pledging exceptions under policy (case-by-case), related-party revenue from Mastercard, and combined CEO/Chairman structure; however, board independence, clawback adoption, and ownership guidelines mitigate governance risk factors .