Michael T. Lavin
CONSUMER PORTFOLIO SERVICESAbout Michael T. Lavin
Michael T. Lavin, 53, is President (since Dec 2022) and Chief Operating Officer (since Feb 2019) of Consumer Portfolio Services (CPS), having previously served as Chief Legal Officer (since Mar 2014) and in multiple legal leadership roles since joining CPS in November 2001; earlier, he was an associate at a large law firm and a spin‑off start‑up firm . Under his tenure in senior operating roles, CPS’s pay-versus-performance disclosure shows 2024 diluted EPS of $0.79 and net income of $19.2 million, with cumulative TSR since 2019 translating to $322.26 on a $100 base versus $187.92 for the peer index, illustrating strong multi‑year shareholder returns despite recent earnings compression . Say‑on‑pay support was 92% in 2024, indicating broad shareholder endorsement of the compensation framework .
Past Roles
| Organization | Role | Years | Strategic Impact / Notes |
|---|---|---|---|
| Consumer Portfolio Services (CPS) | President | Dec 2022 – Present | Leads enterprise operations and strategy alongside COO remit |
| Consumer Portfolio Services (CPS) | Chief Operating Officer | Feb 2019 – Present | Oversees operations; integral to execution during securitization and originations cycles |
| Consumer Portfolio Services (CPS) | Chief Legal Officer | Mar 2014 – Present | Legal, governance, and transactional leadership |
| Consumer Portfolio Services (CPS) | EVP; SVP–GC; SVP & Corporate Counsel; VP–Legal | 2001 – 2019 | Progressive leadership since joining CPS in Nov 2001 |
External Roles
| Organization | Role | Years | Strategic Impact / Notes |
|---|---|---|---|
| Large law firm (unnamed) | Associate | Pre-2001 | Corporate/legal training prior to CPS |
| Spin‑off start‑up law firm (unnamed) | Associate | Pre-2001 | Early‑stage environment experience |
Fixed Compensation
| Year | Base Salary ($) | Max Bonus Potential (% of Base) | Actual Bonus Paid ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|---|
| 2024 | 470,000 | 160% (President) | 443,680 | 47,158 (incl. $26,423 vacation cash‑out, $16,077 car allowance, $2,316 gym) | 960,838 |
| 2023 | 452,000 | 170% (President) | 582,063 | 342 | 1,034,405 |
| 2022 | 411,000 | — | 575,000 | 351 | 1,434,551 |
Notes:
- CPS paid no equity awards to NEOs in 2023 or 2024; long‑term incentives are delivered via stock options when granted .
Performance Compensation
- CPS uses an Executive Management Bonus Plan (annual cash). For the President (Mr. Lavin), the plan is primarily factor‑based with defined weightings; payouts are capped at a multiple of base salary .
| Year | Metric/Factor | Weight | Max Payout Basis | Outcome | Actual Payout |
|---|---|---|---|---|---|
| 2024 | Skills and performance | 40% | Max 160% of base for President | Creditable % 94.4% of base; Committee approved $444k (rounded) | $443,680 |
| 2024 | One individual objective | 16% | Same as above | Included in overall 94.4% result | Included in $443,680 |
| 2024 | Department evaluation | 48% | Same as above | Included in overall 94.4% result | Included in $443,680 |
| 2024 | Company performance | 32% | Same as above | Included in overall 94.4% result | Included in $443,680 |
| 2024 | Discretionary allocation | 24% | Same as above | Included in overall 94.4% result | Included in $443,680 |
| 2023 | Skills and performance | 51% | Max 170% of base for President | Creditable % 128.78% of base; Committee approved $582k (rounded) | $582,063 |
| 2023 | One individual objective | 17% | Same as above | Included in 128.78% | Included in $582,063 |
| 2023 | Department evaluation | 59.5% | Same as above | Included in 128.78% | Included in $582,063 |
| 2023 | Discretionary allocation | 42.5% | Same as above | Included in 128.78% | Included in $582,063 |
Notes:
- CEO metrics include detailed securitization, originations, expense, financing and share price targets; President uses weighted subjective/department/company/discretionary factors rather than fixed financial KPIs .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (Record Date Oct 23, 2025) | 852,254 shares; 3.8% of outstanding |
| Options exercisable within 60 days (Oct 23, 2025) | 397,500 shares |
| Pledged shares | Company permits pledging; CEO has significant pledge; footnote notes 1,818 shares pledged by an executive officer (not identified). No specific pledge disclosure for Mr. Lavin . |
| Insider policy | Prohibits short sales and hedging (e.g., puts); pledging allowed per policy |
| 2024 option exercises (realized) | 90,000 shares; $382,500 value realized |
Outstanding options at FY-end 2024 (Mr. Lavin)
| Grant/Strike | Exercisable | Unexercisable | Expiration |
|---|---|---|---|
| $3.48 | 90,000 | — | 05/09/2025 |
| $3.53 | 90,000 | — | 08/08/2026 |
| $2.47 | 150,000 | — | 06/01/2027 |
| $4.95 | 67,500 | 22,500 (becomes exercisable 08/03/2025) | 08/03/2028 |
| $10.25 | 45,000 | 45,000 (half vests 06/24/2025; balance 06/24/2026) | 06/24/2029 |
Vesting/event dynamics and selling pressure signals
- Near‑term expirations created exercise pressure in 2025 (e.g., $3.48 options expiring May 2025) and continuing into 2026 ($3.53) .
- As of Oct 23, 2025, exercisable options reconcile to 397,500 after the May 2025 expiry and mid‑2025 vestings .
Employment Terms
| Term | Status / Economics |
|---|---|
| Employment | At‑will; no employment contract |
| Severance | None (no severance or termination payments outside change‑of‑control equity treatment) |
| Change‑of‑control (CoC) equity | Stock options may accelerate upon CoC under plan terms. Mandatory acceleration in certain CoC scenarios; double‑trigger applies to some merger/board‑change/25% ownership cases (Qualifying Termination within 1 year or no equivalent award). Committee discretion may apply in other cases . |
| Potential value on acceleration (NEO‑specific) | As of 12/31/2024: $160,425 (Lavin); 12/31/2023: $457,650; 12/31/2022: $861,450 (based on year‑end prices) |
| Other benefits | No pension/SERP; executives participate in 401(k); standard benefits; no deferred comp programs; limited perquisites |
Additional Governance and Pay Design Context
- Compensation program components: base salary, annual cash bonus, and long‑term equity via stock options; no RSUs/PSUs historically favored by CPS (options align value creation with share price appreciation and at lower accounting cost) .
- No equity grants to NEOs in 2023 and 2024; the 2025 Equity Incentive Plan introduces broader award types and clarifies minimum vesting and CoC provisions (acceleration may, but does not automatically, occur in CoC subject to conditions) .
- Compensation Committee: independent directors (Wood—chair, Grounds, Roberts); no outside compensation consultant engaged to date .
- Say‑on‑pay: 92% approval in 2024 .
Company Performance Snapshot (for context)
| Year | Net Income ($) | Diluted EPS ($) | TSR Value of $100 (CPS) | TSR Value of $100 (Peer) |
|---|---|---|---|---|
| 2024 | 19,203,000 | 0.79 | 322.26 | 187.92 |
| 2023 | 45,343,000 | 1.80 | 105.88 | 197.35 |
| 2022 | 85,983,000 | 3.23 | 262.61 | 160.79 |
| 2021 | 47,524,000 | 1.84 | 351.63 | 143.81 |
| 2020 | 21,677,000 | 0.90 | 125.82 | 115.05 |
Investment Implications
- Pay-for-performance alignment: Lavin’s incentive structure is largely factor‑based (skills, departmental and company performance, and discretionary overlay) with a capped multiple of base salary. While this provides management flexibility, it lacks explicit financial KPI targets for the President, which can dilute line‑of‑sight to shareholder metrics compared to the CEO’s explicit objectives .
- Equity alignment and overhang: Lavin holds substantial options with multi‑year expirations; the absence of NEO equity grants in 2023–2024 moderates incremental dilution but may reduce forward‑looking equity‑based retention unless 2025 plan usage increases. Near‑term expirations (2025–2026) create timing/monetization pressure but also align incentives around sustained share price strength .
- Retention risk: At‑will employment with no severance heightens turnover risk in adverse scenarios; however, CoC provisions provide option acceleration protections conditional on transaction structure and termination conditions (i.e., qualified double trigger), partially mitigating change‑of‑control attrition risk .
- Governance flags: CPS allows pledging (hedging prohibited). A large CEO pledge is disclosed; no Lavin‑specific pledge is identified. Continued monitoring of pledging and any Form 4 activity is warranted for potential selling pressure signals .
- Shareholder sentiment: Strong 2024 say‑on‑pay (92%) supports current design, but investors may scrutinize the heavy subjective weighting for non‑PEO NEOs and the multi‑year pause in equity grants versus retention objectives as the 2025 plan is implemented .