Warren Kanders
About Warren Kanders
Warren B. Kanders, 67, is Executive Chairman of Clarus and has served as a director since June 2002 and Executive Chairman since December 2002; he holds an A.B. in Economics from Brown University . He beneficially owns 7,073,821 shares (17.9% of outstanding), including 1,155,997 options currently exercisable or within 60 days; excludes 750,000 unexercisable options and 1,000,000 unvested performance-based restricted shares . Clarus identifies Adjusted EBITDA, TSR, and Net Income as the most important performance measures linking compensation to outcomes, and Kanders’ employment agreement ties his annual bonus to achieving an EBITDA target set in the Board-approved budget, with potential discretionary increases .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Armor Holdings, Inc. | Chairman; CEO | 1996–2007 (Chair); 2003–2007 (CEO) | Led NYSE-listed defense supplier; company sold to BAE Systems in 2007 . |
| Kanders & Company, Inc. | President | 1990–present | Private investment firm providing capital and consulting to public/private entities . |
| Clarus Corporation | Executive Chairman; Director | 2002–present | Long-tenured leader guiding strategy, M&A, portfolio reshaping (e.g., 2024 Precision Sport divestiture) . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Cadre Holdings, Inc. (NYSE: CDRE) | Chairman & CEO | 2012–present | Leads global safety equipment manufacturer; public since Nov 2021 IPO . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 550,000 | 601,923 | 604,616 |
| Target/Min Annual Bonus (% of base) | 100% of base if Company meets EBITDA target per budget (minimum entitlement) | 100% of base if EBITDA target met | 100% of base if EBITDA target met |
| Actual Bonus Paid ($) | — | — | 830,000 (includes $500,000 discretionary on 7/1/2024 and $330,000 discretionary for 2024 paid 3/5/2025) |
| All Other Compensation ($) | 77,288 | 76,368 | 75,796 (insurance programs) |
Notes:
- 2024 discretionary bonuses recognized for leadership post-divestiture and attainment of revenue, EBITDA, and net working capital targets; 2024 cash flow improved following Precision Sport divestiture .
Performance Compensation
Annual Bonus Structure and 2024 Outcomes
| Year/Date | Metric Basis | Target/Criteria | Actual/Payout | Rationale |
|---|---|---|---|---|
| 2024 (plan design) | EBITDA | Minimum cash bonus equal to 100% of base salary if Company achieves budgeted EBITDA; Committee/Board discretion to increase | N/A | Structure codified in Employment Agreement |
| 7/1/2024 | Discretionary cash | N/A | $500,000 | Leadership in repositioning after Precision Sport divestiture; shareholder outreach; upgrading management |
| 3/5/2025 (for 2024) | Discretionary annual cash | N/A | $330,000 | Contributions to achieving revenue, EBITDA, NWC targets and cash flow improvement post-divestiture |
Equity Awards – Restricted Stock (Performance-Based)
| Grant Date | Shares | Vesting Trigger | Forfeiture/Expiry | Status/Value Reference |
|---|---|---|---|---|
| 3/4/2022 | 500,000 | Vests if closing price ≥ $50.00 for 20 consecutive trading days on or before 3/4/2032 | Unvested shares forfeited at 10th anniversary if hurdles unmet | Reported fair value at 12/31/2024: $2,255,000 (500,000 × $4.51) |
| 3/14/2023 | 500,000 | 250,000 vest at ≥ $15.00 for 20 consecutive days; 250,000 vest at ≥ $18.00 for 20 consecutive days on or before 3/14/2033 | Unvested shares forfeited at 10th anniversary if hurdles unmet | Reported fair value at 12/31/2024: $2,255,000 (500,000 × $4.51) |
Equity Awards – Stock Options
| Grant Date | Options Outstanding | Exercise Price ($) | Vesting Schedule | Expiration | Status at 12/31/2024 |
|---|---|---|---|---|---|
| 3/9/2018 | 500,000 | 6.80 | 100,000 each year 2018–2022 (fully vested) | 3/9/2028 | Exercisable |
| 6/5/2019 | 150,000 | 13.21 | 50,000 each year 2020–2022 (fully vested) | 6/5/2029 | Exercisable |
| 12/2/2020 | 255,997 | 14.39 | 85,331 on 12/2/2021; 85,333 each on 12/2/2022 and 12/2/2023 (fully vested) | 12/2/2030 | Exercisable |
| 3/11/2024 | 500,000 | 6.75 | 250,000 on 3/11/2025; 250,000 on 3/11/2026 | 3/11/2034 | Unexercisable at 12/31/2024 |
Vesting acceleration: Upon qualifying termination (including CIC-related as described below), all stock options and restricted stock awards vest and become immediately exercisable/saleable .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 7,073,821 shares; 17.9% of 38,401,824 outstanding as of 4/14/2025 . |
| Components | Includes 1,155,997 options exercisable or exercisable within 60 days; plus various indirect holdings (Kanders GMP Holdings LLC, spouse, UTMA, JTWROS) . |
| Excluded from beneficial count | 750,000 options not exercisable within 60 days; 1,000,000 performance RSAs (2022/2023 grants) . |
| Vested vs. Unvested (12/31/2024) | Exercisable options: 906k+? Specifically 500,000 (2018), 150,000 (2019), 255,997 (2020); Unexercisable options: 500,000 (2024 grant); Unvested RSAs: 1,000,000 . |
| Hedging/Pledging | Insider trading policy prohibits short sales and derivatives; hedging/monetization transactions require Executive Chairman/designee approval . The plan document contemplates pledge/escrow mechanics for plan shares in specific award financing contexts; no explicit executive-wide “no-pledge” prohibition disclosed in the proxy text cited . |
| Ownership guidelines | No executive stock ownership guideline was referenced in the cited proxy sections; governance documents are available on company website . |
| Overhang/Dilution context | As of 12/31/2024: 3,131,747 options outstanding (Wtd Avg Exercise $10.18; 6.3 years remaining); 1,100,000 full-value awards outstanding; 38,362,162 shares outstanding . Proposal to add 7,500,000 shares to the plan and extend term by 10 years (to be voted 5/29/2025) . |
Employment Terms
- Agreement/Term: Employment Agreement dated March 14, 2023; term begins 1/1/2023 and ends on the fifth anniversary, subject to earlier termination .
- Base Salary: $600,000, subject to annual review .
- Annual Bonus: Minimum cash bonus equal to 100% of base salary each year if the Company achieves the Board-approved annual EBITDA target; may be increased at the Compensation Committee’s discretion .
- Equity: 500,000 restricted shares granted 3/14/2023 with $15/$18 price hurdles; separate 500,000 restricted shares granted 3/4/2022 with $50 hurdle .
- Non-Compete/Confidentiality: Confidentiality obligations and non-compete in effect during employment and 18 months after expiration, or 3 years after termination .
- Severance/Change-in-Control (Economics and Triggers):
- If terminated without cause, for Good Reason, not renewed on substantially similar terms, or certain other qualifying terminations (including within two years following a change in control, other than for cause), lump-sum within 30 days: five times the sum of (i) highest annual base salary since 1/1/2020 plus (ii) annual bonus for such year; plus accrued bonus (subject to target achievement if applicable); plus five times the greatest annual full cost of maintaining his principal office (except in death/disability); continued COBRA-eligible health benefits; accelerated vesting of all options and restricted stock .
- CIC nuance: If post-CIC the acquirer requests consulting services, the lump sum is paid at consulting end; consulting fee equal to what he would otherwise receive under the agreement during that period .
- Change-in-control definition includes Board turnover, sale of substantially all assets/merger/tender offer, or a party acquiring 50%+ voting power .
Potential Payouts Table (as of 12/31/2024)
| Scenario (12/31/2024) | Cash Severance (Salary+Bonus) | Stock Options (Acceleration Value) | Restricted Stock (Acceleration Value) | Insurance/Health Benefits | Life Insurance | Office Expense Reimbursement | Total |
|---|---|---|---|---|---|---|---|
| Voluntary Termination | — | — | — | — | — | — | — |
| For Cause | — | — | — | — | — | — | — |
| Without Cause | 4,650,000 | 245,000 (at $4.51/sh) | 4,510,000 (1,000,000 sh × $4.51) | 111,479 | — | — | 9,516,479 |
| CIC and Termination (not for cause) | 4,650,000 | 245,000 | 4,510,000 | 111,479 | — | — (lump sum may be deferred during consulting) | 9,516,479 |
| Disability | 4,650,000 | 245,000 | 4,510,000 | 111,479 | — | — | 9,516,479 |
| Death | 4,650,000 | 245,000 | 4,510,000 | 111,479 | 2,134,000 | — | 11,650,479 |
Additional benefits upon qualifying termination include vesting of benefits under pension/savings/deferred comp plans; office lease assignment and Company payment of lease for five years; right to purchase fixed assets at depreciated book value (the “Additional Kanders Termination Benefits”) .
Board Governance (Service History, Roles, and Dual-Role Implications)
- Service history: Director since June 2002; Executive Chairman since December 2002 .
- Board structure: Seven members in 2024; will reduce to five post-2025 meeting; all directors attended ≥75% of Board and committee meetings in 2024; Lead Independent Director (Nicholas Sokolow) in place since 2016 .
- Committees (all independent members):
- Audit: Besca (Chair), Henning, House, Sokolow ; Audit Committee Report confirms oversight and independence .
- Compensation: House (Chair), Sokolow, Werner, Ottmann; authority to set goals, review performance, approve senior management pay, and retain advisors .
- Nominating/Corporate Governance: Sokolow (Chair), House, Werner .
- Employee-director pay: In 2024, Kanders (employee director) was compensated under his employment agreement; non-employee directors received cash retainers and option grants (including one-time 60,000-option grants in 2024) .
- Time commitment: “Devotes only as much of his time as is necessary” and serves with other entities, including not-for-profits .
- Dual-role implications: Executive Chairman role (non-independent) with significant ownership (17.9%) centralizes influence; mitigants include a Lead Independent Director and independent committees with defined oversight .
Performance & Track Record
Pay Versus Performance (Company-Reported)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| PEO Compensation Actually Paid ($) | (17,349,302) | 2,973,299 | 245,518 |
| Cumulative TSR ($100 initial) | 59.15 | 52.81 | 35.28 |
| Net Income ($000s) | (69,780) | (15,788) | (88,437) |
| Adjusted EBITDA ($000s) | 62,959 | 1,214 | 6,875 |
Notes: Discontinued operations (Precision Sport segment sold 2/29/2024) are excluded from 2023–2024 Net Income . Company designates Adjusted EBITDA as the most important financial performance measure for linking pay to performance . Kanders received discretionary bonuses in 2024 recognizing repositioning after the divestiture and attainment of revenue, EBITDA, and NWC targets .
Compensation Structure Analysis (Signals)
- Mix and trend: 2024 pay weighted to options rather than RSAs versus 2022–2023 which included large performance RSAs; 2024 option grant of 500,000 at $6.75 with time-based vesting suggests retention plus upside participation; performance-based RSAs (2022–2023) retain high stock-price hurdles ($15/$18/$50) aligning payouts with sustained price recovery .
- Discretionary payouts: Notable discretionary cash bonuses in 2024 and for 2024 performance (paid in 2025) despite plan-based EBITDA design; rationale tied to strategic repositioning and financial targets .
- Clawback: Company maintains a compensation recovery policy; details not elaborated in the cited sections .
- Dilution risk: Material plan overhang and proposal to add 7.5M shares; could be dilutive but intended to retain/attract talent per Board rationale .
Risk Indicators & Red Flags
- Severance/CIC Economics: 5x multiple on base+bonus plus 5x office costs and full equity acceleration; totals estimated at ~$9.5M for several termination scenarios (and ~$11.65M for death) as of 12/31/2024—above market norms; CIC payout timing may be deferred during consulting but remains substantial .
- Trigger design: Post-CIC termination payouts can be initiated by the executive or the company (other than for cause) within two years, with broad “Section 4(f) Termination” definitions—effectively generous triggers relative to double-trigger best practices .
- Time allocation: Disclosure that he devotes only as much time as necessary to Clarus and holds other leadership roles (e.g., Cadre) may raise bandwidth concerns; mitigated by independent directors and committees .
- Hedging/Pledging: Anti-hedging limits are in place; no explicit anti-pledging prohibition disclosed; plan language allows pledging in specific award financing contexts—monitor for any future pledging disclosures .
- Equity overhang: Significant outstanding awards and proposed share reserve expansion increase dilution sensitivity for equity holders .
Compensation Committee Analysis
- Composition/Independence: House (Chair), Sokolow, Werner, Ottmann; all independent per NASDAQ .
- Authority/Process: Reviews goals, evaluates senior management performance, sets compensation; considers relative shareholder return, peer incentives, prior awards; retains authority to hire compensation consultants; met 3 times in 2024 plus written consent and informal discussions .
Equity Award, Vesting, and Potential Selling Pressure Timeline
- Upcoming vest dates: 250,000 options vest 3/11/2025 and 250,000 on 3/11/2026 (strike $6.75); potential incremental liquidity windows near vesting dates .
- Price-based RSA triggers remain outstanding: 250,000 at $15, 250,000 at $18 by 3/14/2033; 500,000 at $50 by 3/4/2032; vesting would add substantial saleable stock upon sustained price achievement (20 consecutive trading days) .
- Full acceleration under qualifying termination/CIC adds event-driven supply risk, though subject to Rule 144 and company trading policies .
Director-Specific Notes (Governance Quality)
- Audit Committee Report provided; independent status affirmed; Audit Committee chaired by an “audit committee financial expert” (Besca) .
- Board meetings: Seven in 2024; all directors attended ≥75% .
- Employee vs non-employee director pay: Kanders compensated via employment agreement; non-employee directors received cash plus option grants (annual 20,000 options and one-time 60,000 in 2024; chair/lead independent fees) .
Investment Implications
- Alignment: Large personal stake (17.9%) and high-hurdle performance RSAs align upside with multi-year TSR recovery; upcoming option vesting creates defined catalysts for potential insider liquidity but only if shares are in-the-money .
- Governance risk premium: Severance/CIC constructs (5x multiple and full acceleration) and broad triggers warrant a higher governance risk overlay; potential M&A optionality exists but parachute size may influence negotiations .
- Execution: 2024 discretionary bonuses tied to repositioning and attainment of revenue/EBITDA/NWC targets post-divestiture signal board support; however, Pay Versus Performance shows modest 2024 Adjusted EBITDA and negative Net Income (continuing ops), underscoring execution risk into the turnaround .
- Dilution watch: Proposed 7.5M-share plan increase and sizable overhang suggest monitoring future equity issuance cadence and its impact on per-share economics .