Michael DePasquale
BIO KEY INTERNATIONALAbout Michael DePasquale
Michael W. DePasquale, age 70, is Chairman and Chief Executive Officer of BIO-key International, Inc. (BKYI); he has served as CEO and Director since January 3, 2003 and as Chairman since January 29, 2014. He previously served as Co-CEO from July 2005 to August 2006, holds a B.S. from the New Jersey Institute of Technology, and brings prior executive roles at McGraw-Hill and Digital Equipment Corporation; he also serves as Vice Chairman of the International Biometrics and Identification Industry Association . In 2024, BKYI generated $6.93M in revenue and a net loss of $(4.30)M, improving from 2023’s $7.75M and $(8.52)M, respectively; over 2022–2024, the “value of $100” TSR metric declined from 26.43 (2022) to 7.53 (2023) to 4.29 (2024) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| BIO-key International, Inc. | Chief Executive Officer and Director | 2003–present | Long-tenured leadership in biometrics/software; board chair since 2014 . |
| BIO-key International, Inc. | Chairman of the Board | 2014–present | Combined Chair/CEO; fosters management–board communication per board rationale . |
| BIO-key International, Inc. | Co-Chief Executive Officer | 2005–2006 | Shared executive leadership during transition period . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| International Biometrics and Identification Industry Association | Vice Chairman, Board of Directors | Not disclosed | Industry leadership and domain expertise in biometrics . |
| McGraw-Hill | Executive management positions | Not disclosed | Prior operating experience in software/professional services . |
| Digital Equipment Corporation | Executive management positions | Not disclosed | Prior operating experience in technology sector . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 295,833 | 271,250 | 285,000 |
| All Other Compensation ($) | 997 | 1,027 | 491 |
| Total Compensation ($) | 372,080 | 291,527 | 309,491 |
Notes:
- Employment agreement (auto-renewing annually) states base salary has been $275,000 since 2018, subject to compensation committee adjustments (actual paid each year shown above) .
Performance Compensation
- Annual cash bonus framework: Historically tied to revenue milestones; none of the revenue milestones were achieved in 2022 or 2023, and Summary Compensation Table shows no bonus paid to the CEO in 2022–2024 .
| Year | Performance metric | Weighting | Target | Actual | Payout ($) | Vesting/Timing |
|---|---|---|---|---|---|---|
| 2022 | Revenue milestones | Not disclosed | Not disclosed | Not achieved | 0 | Annual cash cycle |
| 2023 | Revenue milestones | Not disclosed | Not disclosed | Not achieved | 0 | Annual cash cycle |
| 2024 | Revenue/strategic metrics | Not disclosed | Not disclosed | Not disclosed | 0 (no bonus in SCT) | Annual cash cycle |
Equity awards (RSUs) – grants and vesting:
- Awards under 2023 Plan: Michael W. DePasquale granted 24,000 RSUs; additional 1,945 RSUs outstanding with separate vesting .
- Plan-level change-in-control treatment: 2015 Plan provides single-trigger full acceleration; 2023 Plan permits committee to accelerate on a change in control .
| RSU tranche | Shares | Vesting schedule |
|---|---|---|
| 2023 Plan grant | 24,000 | Vests in three equal annual installments commencing July 31, 2025 . |
| Prior RSUs | 1,945 | Vests in two equal annual installments commencing August 29, 2025 . |
Stock options (legacy):
| Option grant | Exercisable (#) | Exercise price ($) | Expiration | In/Out of the money vs $1.71 (12/31/24) |
|---|---|---|---|---|
| Legacy option 1 | 232 | 282.24 | 03/23/2025 | Deep out-of-the-money at $1.71 reference price . |
| Legacy option 2 | 232 | 169.92 | 03/21/2026 | Deep out-of-the-money at $1.71 reference price . |
Pay-versus-performance context:
| Measure | 2022 | 2023 | 2024 |
|---|---|---|---|
| Compensation Actually Paid to PEO ($) | 254,494 | 261,326 | 277,097 |
| Value of $100 (TSR proxy) ($) | 26.43 | 7.53 | 4.29 |
| Net Loss ($) | 11,909,903 | 8,521,837 | 4,300,692 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 62,918 shares (includes components below) . |
| Components | 232 options; 9,167 warrants; 28,120 restricted stock, of which 17,297 unvested . |
| Shares outstanding reference | 6,848,775 shares outstanding as of June 20, 2025 (for overall cap-table context) . |
| Company equity overhang | Current dilution 3.6%; potential dilution under amended plan 15.0% (company-wide) . |
| Hedging/pledging | Hedging prohibited; no margin accounts; pledging prohibited while in possession of MNPI (partial restriction) . |
| Ownership guidelines | No specific executive ownership multiple disclosed; plan permits imposing ownership-related restrictions/guidelines . |
Employment Terms
| Term | Key provision |
|---|---|
| Employment agreement | Effective March 25, 2010; auto-renews annually unless terminated/modified . |
| Base salary reference | $275,000 since 2018 per agreement, subject to committee adjustment (actual paid may vary) . |
| Annual bonus | Discretionary, based on corporate/strategic goals set by compensation committee . |
| Non-compete/non-solicit | 1-year post-employment non-compete and standard confidentiality/work-for-hire provisions . |
| Severance (without cause) | Greater of nine months of then-current base salary or the months remaining in the term . |
| Change-in-control (employment) | If not offered continued employment at close or terminated without cause within five years post-CIC: accrued pay/benefits, prorated current-year bonus, plus 2x then-current base salary . |
| Equity on CIC (plans) | 2015 Plan: immediate vesting of all options/termination of restrictions (single-trigger) . 2023 Plan: board/committee may accelerate vesting on CIC; 40% beneficial ownership threshold included in CIC definition . |
| Clawback | Awards subject to company clawback policy; no recovery required for 2023 restatement (no incentive comp subject to recovery) . |
Board Governance
- Roles: DePasquale serves as combined Chairman and CEO; the board has determined this structure is in the best interests of stockholders and there is no Lead Independent Director .
- Independence: Majority independent directors (Michel, Alia, Williams) per Nasdaq standards .
- Committees: Audit (Chair: Williams; members: Michel, Alia; 4 meetings in 2024); Compensation (Chair: Williams; member: Michel; 1 meeting in 2024); Nominating & Corporate Governance (Chair: Alia; member: Williams; 1 meeting in 2024) .
- Attendance: Board held seven meetings in 2024; each director attended at least 75% of board and committee meetings .
- Director compensation: DePasquale and Kelvin Wong receive no additional compensation for board service. Non-employee directors were paid $3,000 per regular board meeting and $1,000 per committee meeting in 2024 (mix of stock and cash), with example 2024 director totals shown (Michel $13,002; Alia $12,002; Williams $13,002) .
Director Voting and Say‑on‑Pay
| Item | 2024 | 2025 |
|---|---|---|
| Michael DePasquale – director election votes (For/Withheld/Broker non‑votes) | 368,965 / 98,549 / 667,346 | 1,000,092 / 300,305 / 2,713,111 |
| Say‑on‑Pay (For/Against/Abstentions/Broker non‑votes) | 302,123 / 101,061 / 64,330 / 667,346 | 975,360 / 317,871 / 7,166 / 2,713,111 |
Performance & Track Record
| Measure | 2023 | 2024 |
|---|---|---|
| Revenue ($) | 7,754,905 | 6,929,571 |
| Net Loss ($) | (8,521,837) | (4,300,692) |
| Gross Profit ($) | 1,431,319 | 5,640,186 |
- Mix shift and margin: 2024 gross profit improved due to reduced hardware reserves, growth in higher‑margin license sales, and lower service/hardware revenue mix; exit of Swivel Secure distribution reduced third‑party license fees and support costs .
- Operating discipline: SG&A decreased 9% in 2024; R&D increased 5% to support new products .
- Restatement and controls: 2023 interim periods were restated for revenue/accounts receivable and inventory reserve errors; management cited remediation actions in 2024 (EMEA invoice/revenue oversight, added inventory analysis) .
Related Party Transactions
- October 31, 2023 public offering participation: DePasquale purchased 9,167 common shares and a warrant to purchase 9,167 shares for $28,875 total .
- Standstill with principal stockholder (Kelvin Wong) limits accumulation/solicitation/board representation; Kelvin is Co‑Chairman and an executive officer .
Compensation Committee and Policies
- Compensation committee comprised of independent directors; oversees philosophy, pay levels, and equity plan administration, operating under a written charter .
- Hedging/pledging policy prohibits hedging and margin; no pledging while in possession of MNPI .
- Clawback policy on file (10‑K exhibit); plan documents include forfeiture/recoupment for “Cause”/“Adverse Action” .
- Equity plan governance protections include no option re‑pricing without stockholder approval; no tax gross‑ups; non‑employee director compensation limits .
Equity Ownership & Vesting Overhang (Detail)
| Beneficial ownership breakdown | Count |
|---|---|
| Total beneficial ownership (CEO) | 62,918 |
| Options exercisable | 232 |
| Warrants | 9,167 |
| Restricted stock (total) | 28,120; 17,297 unvested |
| Reference market price (12/31/24) | $1.71 per share (used for RSU fair value table) |
| Company outstanding shares (6/20/25) | 6,848,775 |
Employment Contracts, Severance, and Change‑of‑Control Economics
- Term: Auto‑renewing one‑year terms unless terminated or modified .
- Severance (without cause): Salary continuation for greater of nine months or remaining term months .
- Change‑in‑control: If no continued employment offer or termination without cause within five years post‑CIC, CEO receives accrued pay/benefits, prorated current‑year bonus, plus 2× then‑current base salary; equity treatment per plans (2015: immediate acceleration; 2023: committee discretion to accelerate) .
Board Service History and Dual‑Role Implications
- Board service: Director since 2003; Chairman since 2014; elected by stockholders most recently on August 8, 2025 with 1,000,092 For and 300,305 Withheld votes .
- Committee roles: CEO/Chairman does not serve on Audit, Compensation, or Nominating committees; committees are composed of independent directors (Audit: Williams (Chair), Michel, Alia; Compensation: Williams (Chair), Michel; Nominating: Alia (Chair), Williams) .
- Independence/leadership: Combined Chair/CEO structure with no Lead Independent Director; board asserts benefits from CEO’s company/industry knowledge; governance trade‑off for independence highlighted .
- Attendance: Board met seven times in 2024; all directors met 75% attendance threshold .
Investment Implications
- Pay-for-performance: No annual cash bonuses paid in 2022–2024; “Compensation Actually Paid” moved modestly while TSR proxy declined over 2022–2024, and net losses narrowed—indicating limited realized upside tied to stock performance to date .
- Retention and selling pressure: 24,000 CEO RSUs begin vesting July 31, 2025, with a separate 1,945‑share tranche vesting from August 29, 2025; combined with company-wide equity overhang (current 3.6%, potential 15.0% under the amended plan), this creates periodic vesting supply that may weigh on trading liquidity around vest dates .
- CIC protection profile: 2× base salary cash severance plus prorated bonus (employment agreement) is moderate; equity acceleration is single‑trigger under the 2015 plan but discretionary (board/committee) under the 2023 plan—mitigating windfalls in certain scenarios .
- Governance risk: Combined Chair/CEO with no Lead Independent Director and a prior 2023 restatement (with remediation steps) are governance watch‑items for control and oversight; however, independent committee structures and clawback/hedging policies are mitigating factors .
- Alignment: CEO’s equity includes largely out‑of‑the‑money legacy options (strikes $169.92–$282.24 vs $1.71 at 12/31/24) and time‑vesting RSUs; near‑term alignment rests more on service‑based RSU vesting than option upside, which may dilute pay-for-performance sensitivity absent performance‑conditioned equity .
Overall: The CEO’s package is predominantly salary plus time‑vested equity with no cash bonus paid in recent years; upcoming RSU vesting is the key incentive/retention lever and potential trading overhang, while CIC terms are moderate and governance structure warrants monitoring .