David K. Traverse
About David K. Traverse
David K. Traverse (age 51) is Aware’s Chief Financial Officer (since June 2024), previously serving as Interim CEO (Jan–Feb 2025), Principal Financial Officer (Oct 2023–Jun 2024), and Corporate Controller (Apr 2020–Oct 2023). He holds a B.S. in Accounting from UMass Lowell, and earlier was VP & Corporate Controller at SeaChange International (Nov 2018–Apr 2020) and VP Finance & CFO at Artel Video Systems (Oct 2015–Oct 2018) . 2024 company performance metrics that informed incentive outcomes: revenue $17.4 million and operating cash used $3.2 million; cumulative TSR since Dec 31, 2021 was 14%, and 2024 net loss was $4.431 million . He signed a Form 8‑K as CFO on Sept 6, 2024 (signals role authority during leadership transition) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Aware, Inc. | Interim Chief Executive Officer | Jan 2025 – Feb 2025 | Oversaw transition between departing CEO (12/31/24) and new CEO appointment (2/3/25) . |
| Aware, Inc. | Chief Financial Officer | Jun 2024 – present | Leads finance post-controller-to-CFO transition amid cost discipline and restructuring of equity incentives . |
| Aware, Inc. | Principal Financial Officer | Oct 2023 – Jun 2024 | Assumed principal finance leadership before formal CFO appointment . |
| Aware, Inc. | Corporate Controller | Apr 2020 – Oct 2023 | Led controllership; prepared for finance leadership succession . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| SeaChange International | VP & Corporate Controller | Nov 2018 – Apr 2020 | Public company controllership experience; systems and reporting rigor . |
| Artel Video Systems | VP Finance & Chief Financial Officer | Oct 2015 – Oct 2018 | Led finance at networking/video systems company . |
| Public accounting firms | Certified Public Accountant | — | Built technical accounting foundation . |
Fixed Compensation
| Component | 2024 | Notes |
|---|---|---|
| Base salary | $223,780 | CFO role commenced mid‑2024. |
| All other compensation (total) | $9,963 | 401(k) match $9,525; life insurance $438 . |
Performance Compensation
2024 Executive Bonus Plan design and outcome (CFO)
- Target bonus opportunity: $73,333 .
- Weighting: 70% financial (50% revenue, 50% operating cash flow) and 30% individualized operational goals .
- Payout mechanics: 50% of target at 85% of financial goals; 100% at 100%; linear between; up to 50% upside above target if revenue goal ≥100% (to 110%); cap operational payout at 75% if revenue <85% .
- Actuals: 2024 revenue $17.4M (below 85% threshold) and operating cash used $3.2M (below target); financial component paid $0; individualized goals listed for Traverse but paid $0 .
| Metric | Plan weight (of total) | Target | Actual | Payout |
|---|---|---|---|---|
| Financial – Revenue | 35% (50% of 70%) | Budgeted revenue (not disclosed) | $17.4M (below 85% threshold) | $0 |
| Financial – Operating cash flow | 35% (50% of 70%) | Budgeted OCF (not disclosed) | $(3.2)M used (below target) | $0 |
| Operational – Individual goals | 30% | Max $22,000 for Traverse | Company revenue shortfall capped this element; Traverse paid $0 | $0 |
| Non‑equity incentive (NEIP) paid – 2024 | Amount |
|---|---|
| David K. Traverse | $0 |
Equity awards and vesting
| Award | Grant/Exchange date | Shares | Exercise price | Expiry | Vesting schedule | Notes |
|---|---|---|---|---|---|---|
| Option exchange (new options) | Feb 20, 2024 | 44,000 | $2.21 | Feb 20, 2034 | 50% on Feb 20, 2025; remainder in 24 equal monthly installments starting Mar 20, 2025 | No incremental fair value; part of shareholder‑approved exchange . |
| Stock option grant | Oct 31, 2024 | 100,000 | $2.05 | Oct 31, 2034 | 25% annually on each Oct 31 from 2025 to 2028 | Grant-date fair value $81,110 . |
| Unrestricted stock award | — | 18,000 unissued | — | — | 6,000 shares issue on each of Jun 1, 2025, 2026, 2027 if serving at those dates | Market value at 12/31/24: $35,100 . |
Upcoming vesting/issuance events that may create selling pressure:
- Feb 20, 2025: 22,000 options (50% of 44,000) became exercisable; remaining 22,000 vest monthly Mar 20, 2025–Feb 20, 2027 .
- Oct 31 each year 2025–2028: 25,000 options vest annually from 100,000 grant .
- Jun 1, 2025/2026/2027: 6,000 shares each year from unrestricted award issuance schedule .
Equity Ownership & Alignment
- Anti‑hedging: Policy forbids officers, directors, and employees from short‑term or speculative trading, including derivatives and hedging transactions in Aware securities .
- Pledging/ownership guidelines: No explicit pledging prohibition or executive stock ownership guidelines disclosed in proxies reviewed .
Beneficial ownership (multi‑year)
| As-of date | Shares outstanding (company) | Traverse outstanding shares | Right to acquire (60 days) | Total beneficial | % owned |
|---|---|---|---|---|---|
| Nov 8, 2023 | 20,990,819 | 16,847 | 70,833 | 87,680 | — |
| Apr 12, 2024 | 21,084,964 | 25,458 | — | 25,458 | <1% (*) |
| Apr 15, 2025 | 21,097,074 | 43,254 | 33,500 | 76,754 | <1% (*) |
(*) Company indicates “less than one percent” .
Outstanding equity at 12/31/2024
| Instrument | Exercisable | Unexercisable | Exercise price | Expiry |
|---|---|---|---|---|
| Stock options (exchange) | — | 44,000 | $2.21 | Feb 20, 2034 |
| Stock options (10/31/24 grant) | — | 100,000 | $2.05 | Oct 31, 2034 |
| Unrestricted stock award (to be issued) | — | 18,000 | — | — |
| Market value of unissued stock at 12/31/24 | — | $35,100 | — | — |
| Note | Unrestricted stock issues 6,000 on Jun 1 of 2025, 2026, 2027 if serving . |
Employment Terms
| Scenario | Cash severance | Equity acceleration | COBRA subsidy | Conditions | Change‑in‑control (trigger) |
|---|---|---|---|---|---|
| Termination without Cause / resignation for Good Reason | 12 months base salary (lump sum equivalent per formula) | Time‑based awards accelerate by 12 months of additional service | Up to 12 months (company pays difference to employee contribution level) | New 1‑year non‑compete and non‑solicit; release of claims | Not applicable |
| Within 18 months after Change of Control and terminated without Cause or for Good Reason | 1.5x base salary (lump sum) | Immediate acceleration of all time‑based stock options and time‑based stock awards | Up to 18 months (difference to employee contribution level) | Same as above | Double‑trigger (CoC + qualifying termination) |
Other benefits/policies:
- No defined benefit pension/SERP; no non‑qualified deferred comp plans .
- Related‑party transactions: none in 2024 and through proxy date in 2025; none in 2023 and through proxy date in 2024 .
Investment Implications
- Pay-for-performance alignment: Traverse received no 2024 bonus (financial or operational) as revenue ($17.4M) fell below the 85% threshold and operating cash flow missed targets—consistent with a disciplined plan design that scales to performance .
- Near‑term selling pressure windows: Material vesting/issuance milestones begin in 2025 (Feb 20 initial 22k exchange options; monthly vest thereafter; Oct 31 annual 25k tranches; June 1 annual 6k share issuances), creating periodic liquidity for potential selling/covering taxes .
- Alignment and risk controls: Traverse’s direct economic stake is sub‑1%, but option exposure is meaningful post‑exchange and 2024 grant; anti‑hedging policy reduces misalignment/derivative hedging risk; no pledging prohibition or ownership guidelines disclosed—monitor for any future adoption .
- Retention and change‑of‑control economics: Severance is moderate (1x salary; 1.5x on CoC double‑trigger) with time‑based equity acceleration; one‑year non‑compete and COBRA support mitigate abrupt transitions while not overpaying for failure .
- Execution backdrop: 2024 TSR improved to +14% cumulative since 12/31/21, but the company posted a $4.431M net loss and negative operating cash flow, underscoring ongoing execution risk and importance of revenue growth and cash discipline in 2025+ .