Michael Watson

About Michael Watson

Michael Watson is Executive Vice President and Head of Axos Securities, appointed as an executive officer in 2025 (joined Axos in 2021), age 49; he holds FINRA Series 7, 8, and 63 licenses and has 25+ years in financial services scaling custody, clearing and wealth platforms . He previously held leadership roles at TD Ameritrade Institutional and LPL Financial; he earned an MBA from Cornell’s SC Johnson College of Business and a BBA from UMass Amherst . During his tenure at Axos, company-level performance has been strong: FY25 ROE was 17.30%, net income >$430M, and 5-year CAGRs of net income 18.8% and revenue 16.7%; 5-year total shareholder return (TSR) was 344% versus NYSE 193% and XABQ 180% .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

• Design and metrics:
  • Elements: short-term cash bonus and long-term RSUs; Compensation Committee uses company, peer, and individual performance; awards for non-CEO executives are made semi-annually (cash and share-based) . RSUs for executives other than CEO generally vest one-third annually over three years; 95% of plan awards must have at least one-year minimum vesting .
  • For non-CEO NEOs (and by design for EVPs), bonuses are typically targeted between 200% and 300% of base salary across cash and stock compensation; fixed compensation is positioned lower relative to peers, with greater variable performance-based mix .
• Vesting and settlement:
  • Upon RSU vesting and settlement, ordinary income is recognized equal to fair market value of shares or cash delivered at settlement .
• Clawback/hedging:
  • Company prohibits short sales, options/derivatives, and pledging of company securities by insiders without written consent; pledging is prohibited under the Insider Trading Policy .

Equity Ownership & Alignment

• Ownership guidelines: Executives must hold Company stock at minimum multiples of salary within five years; for Executive Vice Presidents (Watson’s level), 3x base salary; CEO 8x, CFO 5x .
• Hedging/pledging: Insider Trading Policy prohibits margin purchases, short sales, options/derivatives, and pledging of Company securities (i.e., alignment-friendly; reduces leverage/forced-sale risks) .
• Beneficial ownership: Company’s Security Ownership table lists directors and Named Executive Officers; Watson is not listed (not a director/NEO), so individual share count isn’t disclosed in the proxy .

Note: The Bank’s employee mortgage Loan Program indicates acceptable collateral “may include Company stock,” while the Insider Trading Policy states pledging Company securities is prohibited; investors should monitor policy application consistency here .

Employment Terms

• Contract status: Executive officers are generally at-will; the proxy details specific agreements for CEO/CFO and certain others; no individual employment agreement terms for Watson are disclosed -.
• Change-in-control (CIC) equity treatment: Company equity plan uses double-trigger mechanics—if awards are not assumed on a corporate transaction or the executive is terminated without cause within specified windows (30 days before, on, or within 180 days after CIC), unvested RSUs generally accelerate; otherwise awards continue under acquirer if assumed .
• Severance: CEO/CFO severance schedules are disclosed; severance terms for Watson (EVP, Head of Axos Securities) are not disclosed in the proxy -.

Performance & Track Record (Axos Securities context)

Watson oversees Axos Securities (clearing, custody, Axos Advisor Services, retail trading), a segment generating both interest and fee income and sourcing low-cost deposits for the bank . FY25 segment pre-tax income was $32.9M (down from $40.1M in FY24) as non-interest income declined 7.7% YoY on lower cash sorting rates, while net interest income rose 8.5% YoY; non-interest expense modestly declined .

Compensation Committee and Governance Touchpoints

• Compensation structure emphasizes pay-for-performance; long-term equity awards are a significant portion of executive pay; no tax gross-ups; no special executive perquisites; no single-trigger CIC cash; equity re-pricing not permitted without stockholder approval .
• Stockholder engagement: Company actively engaged investors; say-on-pay is annual; feedback highlights insider ownership value and alignment with TSR .

Investment Implications

• Alignment and retention: Strong alignment via 3x-salary stock ownership guideline for EVPs and 3-year RSU vesting cadence; explicit bans on hedging/pledging reduce misalignment/forced-sale risk, supporting retention incentives and long-term focus .
• Execution risk: Securities segment pre-tax income declined YoY as fee revenues (cash sorting economics) normalized; however, net interest income grew with higher securities lending/margin activity—Watson’s strategic execution likely focuses on restoring fee momentum while scaling interest-driven revenues and platform growth .
• Trading/supply signals: RSUs vest over multi-year schedules, creating periodic settlement windows; while pledging is prohibited under policy, investors should monitor any insider activity disclosures and the noted collateral language in the employee Loan Program for consistency and potential sale pressure over time .
• Data gaps: Watson is not a Named Executive Officer; accordingly, his base salary, bonus actuals, grant sizes, severance multiples, and personal ownership are not disclosed—investors should seek 8-Ks (Item 5.02) or future proxies if he becomes an NEO to quantify compensation elasticity and ownership depth .