John Chang
COGENT COMMUNICATIONS HOLDINGSAbout John Chang
John Chang, age 53, is Cogent’s Chief Legal Officer (CLO). He joined Cogent in 2005, was appointed CLO in May 2019, and previously held legal roles at StarBand Communications and Teligent and practiced at O’Melveny & Myers LLP . Under his tenure as a senior executive, Cogent’s 5‑year total shareholder return (TSR) rose to 151.75 (from a $100 base, incl. dividends) through 12/31/2024, outpacing the Nasdaq Telecommunications Index (103.21) over the same period .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| O’Melveny & Myers LLP | Attorney (private practice) | Not disclosed | Big‑law corporate/legal experience |
| StarBand Communications, Inc. | Legal positions | Not disclosed | Telecom/satellite operator legal experience |
| Teligent, Inc. | Legal positions | Not disclosed | Telecom legal experience |
External Roles
- None disclosed in company filings cited .
Fixed Compensation
| Year | Base salary ($) | Target bonus % | Actual bonus ($) | Notes |
|---|---|---|---|---|
| 2024 | 287,053 | Not applicable (no annual cash plan for NEOs other than CEO/CRO) | 15,000 | Executives (ex‑CEO) received a 4% base increase in 2024 ; NEOs are generally not in an annual cash bonus plan |
| 2023 | 277,346 | Not applicable | — | — |
| 2022 | 266,678 | Not applicable | — | — |
Performance Compensation
2024 Long‑Term Incentive Grants (awarded Jan 3, 2024)
| Award type | Shares | Grant date fair value ($) | Vesting / performance conditions |
|---|---|---|---|
| Time‑based RS | 9,600 | 724,320 | Vests quarterly on Mar 1, Jun 1, Sep 1, Dec 1, 2027 |
| Performance‑based RS | 2,400 | 181,080 | Vests Dec 1, 2027, subject to customer satisfaction goals over Apr 1, 2024–Nov 1, 2027 |
| Supplemental retention RS | 30,000 | 2,263,500 | Single‑date vest on Jan 3, 2027 (continued employment) |
- Performance metrics in 2024 PSU grant: customer satisfaction (measured by programs such as Net Promoter Score) over the performance window; the Board previously referenced NPS benchmarking when certifying earlier PSU cycles (e.g., 2020 grants) .
- No stock options or SARs were granted to NEOs in 2024 .
2024 Summary Compensation Mix
| Component | 2024 amount ($) |
|---|---|
| Salary | 287,053 |
| Bonus | 15,000 |
| Stock awards | 3,168,900 |
| Total | 3,462,053 |
Equity Ownership & Alignment
| Metric | Detail |
|---|---|
| Beneficial ownership (2/28/2025) | 81,300 shares (<1%) |
| Unvested (2/28/2025) | 68,400 shares unvested |
| Vested (derived) | ~12,900 shares vested (= 81,300 − 68,400) |
| Ownership as % of shares outstanding | ~0.16% (= 81,300 / 49,380,408 outstanding at 3/13/2025) |
| Options (exercisable/unexercisable) | None disclosed; equity delivered as RS/PSU, not options |
| Pledging | No pledging disclosed for Chang; company policy prohibits non‑recourse pledging and margin accounts; pledging allowed only with Audit Committee approval on full‑recourse loans |
| Ownership guidelines | Company discloses ownership guidelines for CEO and directors; no executive officer guideline for Chang disclosed |
| Clawback | SEC/Nasdaq‑compliant clawback adopted Oct 2, 2023 for incentive comp paid in the 3 years preceding a restatement |
Employment Terms
| Topic | Provision |
|---|---|
| Employment start and current role | Joined 2005; CLO since May 2019 |
| Severance (without cause or good reason resignation) | 6 months’ base salary and 6 months’ benefits; continued equity vesting during the severance period |
| Change‑in‑control (single trigger) | Upon a change‑in‑control, time‑based and performance‑based RS accelerate to 100% vesting (subject to 3× annual compensation value cap); for change‑in‑control plus termination (double trigger), equity vests 100% and severance is paid as a lump sum |
| Other termination (death, disability, retirement) | Full acceleration of unvested time‑based and performance‑based RS |
| Restrictive covenants | Employment agreements prohibit competing and disclosure of confidential information; durations not specified in filings cited |
| Clawback / Hedging / Pledging | Clawback policy in place; hedging and derivative transactions are prohibited; pledging only under strict, pre‑approved full‑recourse conditions |
Upcoming Vesting and Potential Selling Pressure
| Year | Scheduled vesting (time‑based) | Scheduled vesting (performance‑based) | Notable single‑date events |
|---|---|---|---|
| 2025 | 9,600 shares vest quarterly (2,400 each on Mar 1, Jun 1, Sep 1, Dec 1) | 2,400 shares on Dec 1, 2025 (prior PSU cycle) | — |
| 2026 | 9,600 shares vest quarterly (2,400 each on Mar 1, Jun 1, Sep 1, Dec 1) | 2,400 shares on Dec 1, 2026 (prior PSU cycle) | — |
| 2027 | 9,600 shares vest quarterly (2,400 each on Mar 1, Jun 1, Sep 1, Dec 1) | 2,400 shares on Dec 1, 2027 (2024 PSU cycle) | 30,000 retention RS vests Jan 3, 2027 |
Implication: A large 2027 vesting cohort (notably the 30,000‑share retention grant) creates a visible point of potential insider selling pressure as shares deliver, subject to personal liquidity needs and trading windows .
Compensation Structure Analysis
- Equity‑heavy, long‑dated vesting: Chang’s pay is predominantly equity with 3+ year vesting, aligning with long‑term value creation; no 2024 options were granted to NEOs, reflecting a shift toward RS/PSUs with less leverage and lower risk than options .
- Customer‑centric performance conditioning: PSUs for NEOs (other than CEO) are tied to customer satisfaction goals across multi‑year windows, reinforcing service quality as a driver of retention and revenue durability .
- Limited cash incentive exposure: NEOs (excluding CEO/CRO) are not in a recurring annual cash bonus plan; Chang received a modest $15,000 bonus in 2024, reducing annual pay volatility and immediate cash‑driven incentives .
- Governance features: Robust clawback, hedging prohibitions, and controlled pledging are in place; Say‑on‑Pay approval was ~96% in 2024, signaling shareholder support for the overall program .
Performance & Track Record
- Company TSR: 5‑year cumulative TSR of 151.75 through 12/31/2024; comparative TSR for S&P 500 (197.02) and Nasdaq Telecom Index (103.21) provide broader context .
- Strategic execution backdrop: Management highlights 2024 integration progress of the Sprint long‑haul network and data center conversion program with accelerated synergy capture (~$217 million annual cost savings), contributing to the focus on EBITDA and free cash flow in incentive design .
Investment Implications
- Retention risk and 2027 “cliff”: The 30,000‑share single‑date vest on Jan 3, 2027, combined with additional 2027 vesting tranches, concentrates a significant deliverable equity event that may elevate retention risk pre‑2027 and selling pressure post‑vesting .
- Alignment with durability metrics: PSUs tied to customer satisfaction support long‑term service quality and churn mitigation; this is complementary to Cogent’s broader pivot to cash flow metrics at the CEO level, though Chang’s PSUs remain customer‑centric .
- Change‑of‑control dynamics: Single‑trigger acceleration for NEOs (full vesting at CoC, capped at 3× annual comp) can compress retention incentives during M&A processes; however, double‑trigger provisions secure severance and equity for post‑deal departures .
- Governance risk mitigants: Strong clawback and anti‑hedging policies, plus limited cash incentives, reduce misalignment risk; high Say‑on‑Pay support (~96%) suggests investor acceptance of the program’s design .