Frank Stokes
About Frank Stokes
Frank Stokes, age 55, has served as Chief Financial Officer of Castle Biosciences (CSTL) since December 2017; he previously was CFO of Hammock Pharmaceuticals and a life sciences investment banker at SVB Leerink, Robert W. Baird, and Wachovia, and holds a BS, JD, and MBA from the University of North Carolina at Chapel Hill . In 2024, Castle delivered revenue of $332.1 million (+51% YoY); the company’s pay-versus-performance table shows a cumulative TSR value of $77.54 on a $100 investment since 12/31/2019, providing a backdrop to compensation alignment and value creation during Stokes’ tenure on the team . Say‑on‑pay support improved to ~97% in 2024 following program changes (addition of PSUs, stock ownership guidelines, clawback), indicating shareholder alignment with incentive structure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Hammock Pharmaceuticals | Chief Financial Officer | 2017 | Specialty pharma CFO experience; operational finance leadership |
| SVB Leerink (Leerink Swann) | Managing Director, Life Sciences IB | 2011–2016 | Led financings and M&A in tools/diagnostics; sector expertise |
| Robert W. Baird & Co.; Wachovia Securities | Managing Director | Prior to 2011 | Led life sciences/tools/diagnostics investment banking initiatives |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Exagen Inc. (NASDAQ:XGN) | Director; Audit Committee Chair | Current | Public company board and audit leadership experience |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 488,800 | 500,042 |
| Target Bonus (% of Salary) | 50% (prior) | 55% |
| Actual Cash Bonus Paid ($) | 316,742 (non-equity incentive) | 338,388 (non‑equity) + 13,751 (discretionary) = 352,140 total |
Perquisites and other compensation items for 2024 included $27,434 travel and parking for commuting, $22,479 lodging, $3,600 vehicle lease, and $20,700 401(k) match (plus a $350 holiday gift) .
Performance Compensation
| 2024 Annual Bonus Plan | Weight | Target | Actual | Payout Factor |
|---|---|---|---|---|
| Revenue ($) | 75% | 305.0M | 332.1M | 108.8% of component |
| Long‑term initiatives (validation, e‑ordering, SCC reimbursement) | 25% | Specified internal targets | Achieved; 20% weight credited | 20.0% (threshold to target scale) |
| Individual (Stokes) | 20% of total bonus | 100% | 125% | 125% (personal multiplier) |
Total corporate factor was 128.8%; Stokes’ overall payout was 128.0% of target given the 80% corporate/20% individual mix; actual cash bonus earned was $338,388 (plus $13,751 discretionary for personal over‑target performance) .
Equity Awards and Vesting
| Award Type | Grant Date | Shares/Units | Key Terms | Grant‑Date Fair Value ($) |
|---|---|---|---|---|
| Time‑based RSUs | 3/4/2024 | 48,744 | Vests in 4 equal annual installments | 1,034,835 |
| PSUs | 3/4/2024 | 16,248 | Three‑year performance period; vest on (i) revenue goal (50%), (ii) launch of a new commercial test (25%), (iii) achieving positive EBITDA by end of 2026 (25%) | 344,945 |
| 2022 PSUs (achieved) | 8/2024 (certification) | N/A (plan) | Cumulative revenue goal met with $379.8M across 2023 and H1 2024; 50% vested Aug‑2024; remaining 50% vests Aug‑8‑2025 (service‑based) | N/A |
Castle has not granted stock options to NEOs since 2021; current equity mix emphasizes RSUs and PSUs aligned to multi‑year financial and strategic goals .
Equity Ownership & Alignment
| Ownership Detail (as of 3/21/2025, or 12/31/2024 where noted) | Value |
|---|---|
| Total Beneficial Ownership (shares) | 208,635; <1% of outstanding |
| Direct/Common Shares | 43,328 |
| Stock Options Exercisable or RSUs settleable within 60 days | 165,307 (options) |
| Outstanding Time‑based RSUs (not vested, 12/31/2024) | 6,170 (12/10/2021 grant); 29,233 (12/9/2022); 9,744 (12/23/2022); 48,744 (3/4/2024) |
| Outstanding PSUs (not earned, 12/31/2024) | 16,248 (3/4/2024 PSU tranche) |
| Stock Ownership Guidelines | Officers 1x base salary; compliant as of 3/21/2025 |
| Hedging/Pledging | Prohibited by policy (no pledging allowed) |
Option Grants On File (select)
| Vesting Commencement | Exercisable | Unexercisable | Exercise Price ($) | Expiration |
|---|---|---|---|---|
| 12/4/2017 | 25,137 | — | 2.39 | 05/09/2028 |
| 3/13/2019 | 18,712 | — | 3.38 | 03/12/2029 |
| 12/13/2019 | 55,000 | — | 29.50 | 12/12/2029 |
| 12/10/2020 | 31,000 | — | 59.16 | 12/09/2030 |
| 12/10/2021 | 31,912 | 10,638 | 40.52 | 12/09/2031 |
Standard option vesting: 25% after one year, then monthly over 36 months .
Employment Terms
- Offer/role: CFO since December 2017; offer letter November 2017; initial option grant to purchase 133,137 shares in May 2018 .
- Clawback: SEC/Nasdaq‑compliant clawback adopted in 2023; applies to Section 16 officers .
- Stock ownership guidelines: Officers 1x salary; compliance achieved .
- Hedging/pledging: Prohibited .
Severance and Change‑in‑Control (CIC) Economics (Plan Terms)
| Scenario | Cash Salary | Cash Bonus | COBRA | Equity |
|---|---|---|---|---|
| Non‑CIC “covered termination” (without cause/for good reason) | 12 months salary | 100% of target bonus for the year of termination | 12 months | 12 months acceleration of time‑based equity; PSUs prorated by time and earned based on actual performance at period end |
| CIC covered termination (3 months before to 12 months after CIC) | 12 months salary (lump sum) | Prior‑year target bonus (lump sum) | 12 months | Immediate vesting of unvested time‑based awards; PSUs vest at 100% target |
| CIC where awards not assumed/continued | N/A | N/A | N/A | Unvested equity vests at CIC close (single‑trigger if not assumed) |
Note: The November 9, 2023 8‑K announcing the Severance Plan described CFO CIC bonus as the prior‑year earned bonus, if any; the 2025 proxy states prior‑year target bonus; both documents reference the same plan; see definitive plan when filed for controlling terms .
Quantified Potential Payments (Hypothetical; if event occurred on 12/31/2024)
| Scenario | Salary ($) | Bonus ($) | Vacation ($) | COBRA ($) | Stock and RSU Acceleration ($) | PSU Acceleration ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| CIC covered termination | 500,042 | 321,630 | 245,689 | 22,187 | 2,242,518 | 692,687 | 4,024,753 |
| Non‑CIC covered termination | 500,042 | 275,023 | 245,689 | 22,238 | 553,947 | 102,448 | 1,699,387 |
Assumptions use $26.65 stock price as of 12/31/2024; PSU treatment per notes .
Compensation Committee, Peer Group, and Say‑on‑Pay
- Committee/Advisor: Independent Compensation Committee (Harrison, Cole, Goldberg, Cotton) with Aon as independent advisor; committee reviews peer data, designs program, and oversees risk .
- Peer Group: 2024 peer set of 17 life sciences/tools/diagnostics companies, selected on revenue ($150M–$1.02B at selection) and market cap ($200M–$1.7B) criteria; no fixed percentile target is used .
- Governance Practices: Double‑trigger CIC vesting; clawback; ownership guidelines; prohibition of hedging/pledging; no post‑employment tax gross‑ups; limited perquisites; and no guaranteed bonuses .
- Say‑on‑Pay: ~97% approval in 2024 following program changes and investor outreach addressing overlapping metrics and transparency .
Related‑Party, Compliance, and Risk Indicators
- AltheaDx acquisition consideration: Stokes (as a prior AltheaDx holder) received initial consideration valued at ~$67,388 at the 2022 closing; no further earn‑out was paid; contingent consideration ended at $0 by 12/31/2024 .
- Section 16 compliance: One Form 4 for Frank Stokes was filed late on Aug 13, 2024 due to an administrative error .
- No hedging/pledging allowed; no option repricings; no special executive health/welfare benefits; no post‑employment tax gross‑ups .
Investment Implications
- Strong pay‑for‑performance alignment: CFO compensation mix includes material equity with 2024 PSUs tied to multi‑year revenue, a new test launch, and achieving positive EBITDA by end‑2026; this emphasizes execution on growth and profitability and reduces overlap with annual metrics .
- Retention risk appears moderate: Severance is 1x salary + target bonus outside CIC and acceleration of 12 months of time‑based equity; CIC benefits are 1x salary and prior‑year target bonus with full equity acceleration (double‑trigger), supporting continuity through strategic events .
- Potential selling pressure from vesting: Stokes has multiple unvested RSU tranches (e.g., 48,744 time‑based RSUs from 3/4/2024 and earlier tranches), plus 16,248 2024 PSUs subject to performance; as these vest, shares may come to market, though hedging/pledging is prohibited and ownership guidelines are met, supporting alignment .
- Governance and shareholder signals are constructive: 2024 say‑on‑pay passed with ~97% support after program refinements, indicating investor acceptance of incentive design and improved alignment .