David Cote
About David Cote
David M. Cote is Executive Chairman of CompoSecure’s Board, appointed September 17, 2024, and previously served as Co‑Chief Investment Officer until his employment transferred to Resolute Holdings on February 28, 2025; he continues as Executive Chairman at CMPO . He is 72 and a seasoned operator, having led Honeywell as Chairman/CEO (2002–2017) and Executive Chairman (to April 2018), and currently serves as Executive Chairman of Vertiv (since February 2020) . CMPO’s 2024 annual bonus metrics for executives were net revenues (60%) and Adjusted EBITDA (40%), with Cote’s prorated 2024 bonus paid at 87% of target; his compensation emphasizes variable pay tied to financial performance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Honeywell International | Chairman & CEO; later Executive Chairman | Jul 2002–Mar 2017; Exec Chair to Apr 2018 | Led global industrial conglomerate; deep knowledge of global business environment |
| TRW | Chairman, President & CEO; President & CEO; President & COO | Aug 2001–Feb 2002; Feb 2001–Jul 2001; Nov 1999–Jan 2001 | Led aerospace/auto/IS company through senior leadership transitions |
| General Electric (GE Appliances) | SVP, President & CEO | Jun 1996–Nov 1999 | Operated a major consumer products business unit |
| GSAH I (SPAC predecessor to Vertiv) | CEO, President, Secretary & Chairman | Apr 2018–Feb 2020 | Led SPAC through combination with Vertiv |
External Roles
| Organization | Role | Years |
|---|---|---|
| Vertiv Holdings Co | Executive Chairman of the Board | Feb 2020–present |
| Federal Reserve Bank of New York | Director | Mar 2014–Mar 2018 |
| Juniper Industrial Holdings, Inc. | Director | Mar 2020–Jun 2021 |
Fixed Compensation
| Metric | 2024 Value |
|---|---|
| Annual base salary (offer letter) | $750,000 |
| Salary earned (prorated for 2024 start) | $155,770 |
| All other compensation | $0 |
Performance Compensation
Annual Cash Incentive (2024)
| Metric | Target | Actual Payout Basis | Actual Paid |
|---|---|---|---|
| Target bonus % | 125% of base salary | Company score set to 97% of target; committee discretion applied; Cote payout 87% of prorated target | $203,900 |
| Target bonus $ (prorated) | $234,375 (prorated for Oct 1 start) | 87% payout | $203,900 |
| Performance metrics | Net revenues 60%; Adjusted EBITDA 40% | Linear interpolation; cap 200% of target | See above |
Equity Awards and Vesting
| Award | Grant Details | Quantity/Terms | Vesting | Strike/Expiry |
|---|---|---|---|---|
| Sign‑on stock options | Grant date Oct 1, 2024; grant date fair value $6,000,000 | 837,037 options (Black‑Scholes based sizing) | 25% annually over 4 years on each Oct 1 anniversary | $13.82 strike; expires Oct 1, 2034 |
Equity Ownership & Alignment
| Metric | Amount | Notes |
|---|---|---|
| Beneficial ownership (Class A) | 22,394 shares; <1% | Shares owned by spouse; Cote disclaims beneficial ownership |
| Options outstanding (unexercisable at 12/31/24) | 837,037 | Grant 10/1/2024; strike $13.82; expiry 10/1/2034 |
| Stock ownership guidelines | CEO 6x salary; other NEOs 3x; non‑employee directors 5x retainer; 5‑year compliance window | |
| Hedging/pledging policy | Hedging prohibited; pledging/margin purchases require pre‑clearance |
• Insider trading policy prohibits hedging transactions and short sales; pledging or margin purchases require General Counsel pre‑clearance, limiting misalignment risks from hedging/pledging .
Employment Terms
| Term | Details |
|---|---|
| Start date & role | Employed Oct 1, 2024; Executive Chairman; Co‑Chief Investment Officer until transfer to Resolute 2/28/2025; remains Executive Chairman at CMPO |
| Compensation (offer letter) | Base salary $750,000; target annual bonus 125% of base; sign‑on options $6M (4‑year vest) |
| Acceleration/Severance | Options fully accelerate upon termination without Cause, resignation for Good Reason, death or disability; no severance provided in offer letter |
| Contract transfer | Offer letter amended and assumed by Resolute Holdings in connection with Spin‑Off |
| Confidentiality | Confidentiality covenant; non‑compete not disclosed |
Board Governance
| Attribute | Details |
|---|---|
| Board seat | Class III Director; term expires at 2027 annual meeting |
| Role duality | Separate CEO (Wilk) and Executive Chairman (Cote) roles; Board views separation as appropriate |
| Committee assignments | None; Executive Chairman is not a committee member |
| Independence | Board affirms a majority of directors are independent; Executive Chairman is not independent |
| Attendance | In 2024, no director attended <75% of meetings; Board held 11 meetings |
| Controlled company | Tungsten 2024 LLC and affiliates hold ~50.5% voting power; CMPO relies on certain Nasdaq controlled company exemptions |
• Family relationship disclosed: John D. Cote (Class I Director) is David Cote’s son; John Cote is not independent due to this relationship, and he chairs Nominating & Corporate Governance (as of April 3, 2025) .
Director Compensation (context)
CMPO shifted non‑employee director equity from RSUs to options effective October 1, 2024 with $200,000 initial and annual option awards; Cote’s compensation is reported as an executive (NEO), not under non‑employee director compensation .
Compensation Structure Analysis
- High at‑risk pay: 2024 bonus tied to net revenues and Adjusted EBITDA with regimented interpolation and a 200% cap; Cote’s 2024 payout was 87% of prorated target, reflecting disciplined pay‑for‑performance .
- Equity mix: Cote received a large sign‑on option grant ($6M) vesting over four years, creating multi‑year retention and upside alignment, with acceleration for certain terminations; notably, CMPO’s 2025 LTIP for other executives moved to service‑based RSUs vesting in thirds at years 3/5/7 to strengthen retention and simplify design .
- Governance controls: Clawback policy adopted October 2, 2023 and expanded beyond mandatory officers to senior leadership, enhancing recoupment protections .
Compensation Committee Analysis
- Committee composition: As of year‑end 2024 and into 2025, the Compensation Committee includes independent directors (e.g., Mark R. James as Chair, Jane J. Thompson, Dr. Krishna Mikkilineni) alongside one non‑independent member (Thomas R. Knott, employed by CMPO/Resolute) .
- Independent advisors: FW Cook advised until September 2024; Semler Brossy was engaged thereafter and regularly attended meetings; the committee assessed advisor independence and found no conflicts .
- Peer groups: 2024 peer group covered fintech/payments adjacencies; in September 2024, an additional small asset manager peer group was adopted to support M&A priorities; Wilk’s salary was increased to $750,000 effective October 1, 2024 with peer input .
Equity Ownership & Beneficial Holders (context)
Tungsten 2024 LLC and affiliates, including Resolute Compo Holdings, owned ~50.5% of voting power on April 3, 2025, conferring controlled company status; total outstanding Class A shares were 102,317,852 on that date . Cote’s personal beneficial ownership is de minimis relative to outstanding shares (<1%) .
Related Party Transactions & Governance Agreements
- Governance Agreement and nomination rights: Certain directors designated by Resolute Compo Holdings; family relationship (John D. Cote) noted .
- Letter Agreement with Resolute: Board delegated authority to Resolute Holdings to approve/issue CMPO equity for M&A and equity awards (subject to Nasdaq/rules), heightening governance scrutiny on dilution control; Board proposes increasing authorized Class A shares from 250,000,000 to 1,000,000,000 to support corporate purposes including M&A and equity incentives .
Risk Indicators & Red Flags
- Controlled company governance exemptions in use; majority independent maintained per Governance Agreement but certain committees include non‑independent members (Compensation) .
- Family relationship on board (John D. Cote); independence explicitly curtailed for John D. Cote, mitigated by committee compositions and overall independence majority .
- Equity issuance delegation to Resolute and proposed substantial authorized share increase may signal potential dilution or governance complexity; Board rationale ties to M&A flexibility and compensation programs .
- Clawback in force; hedging prohibited; pledging/margin restricted—reduces alignment risks from derivatives/pledges .
- Section 16 compliance: No delinquent filings reported for Cote in 2024; two directors (Thompson, Galant) each filed one late Form 4 related to annual RSU grants .
Say‑on‑Pay & Shareholder Feedback
CMPO is an emerging growth company and smaller reporting company; advisory votes on executive compensation are not required and were not held, though the company will hold such votes when required .
Expertise & Qualifications
Cote’s background spans global industrial operations, capital allocation, M&A and public company leadership; he has served on major boards (Vertiv, FRBNY) and led large‑scale transformations at Honeywell, GE Appliances, and TRW, equipping him for strategic oversight at CMPO .
Investment Implications
- Alignment and retention: The $6M four‑year option grant and 87% payout of 2024 prorated bonus tie Cote to multi‑year value creation, with acceleration protections but no severance, indicating retention via equity rather than guaranteed cash .
- Governance considerations: Controlled company status, delegated equity issuance authority to Resolute, and family ties warrant monitoring for dilution and independence risks; however, separation of CEO and Executive Chairman roles and expanded clawback/ownership guidelines provide mitigating controls .
- Trading signals: Upcoming annual option vesting dates (Oct 1 each year through 2028) could create periodic Form 4 activity and potential supply overhang if options become in‑the‑money; hedging bans reduce downside‑hedged sales pressure .
- Pay‑for‑performance: Bonus metrics centered on net revenues and Adjusted EBITDA support operational discipline; monitoring future MIP/LTIP changes (shift to longer service‑based RSUs for broader executives) is key to understanding cash vs. equity mix and potential dilution .