Jay O. Wright

About Jay O. Wright

Vice Chair of the Board, General Counsel, Executive Vice-President – Strategy, and Corporate Secretary of Castellum, Inc. (CTM). Age 55; director since June 11, 2019; non‑independent officer-director with deep finance, legal, M&A, and public company leadership experience; qualified as a “financial expert.” Education: J.D., University of Chicago Law School; B.S. in Business Administration, Georgetown University (summa cum laude); adjunct finance professor at Georgetown for 21 years . Company performance backdrop: revenues rose from ~$25.1m (FY21) to ~$45.2m (FY23) before modestly declining to ~$44.8m (FY24); EBITDA losses improved from ~$7.3m (FY23) to ~$5.0m (FY24). Values retrieved from S&P Global.*

Past Roles

External Roles

Fixed Compensation

Multi-year NEO disclosure (Jay Wright was an NEO in 2022–2023; not an NEO in 2024).

Notes:

• 2023: Company disclosed deferred amounts at year-end 2023: salary deferred $32,500 and bonus deferred $29,320 for Wright, later addressed alongside broader compensation restructuring efforts .

Performance Compensation

Structure and realized outcomes emphasize M&A-related metrics, listing milestones, and equity awards.

• Incentive architecture (legacy agreement dated April 1, 2020, extended to June 30, 2024):
  • Cash M&A bonus: lesser of 1% of TTM revenues of each acquired business or 4% of TTM EBITDA of each acquired business, payable only if accretive on revenue/share and EBITDA/share basis .
  • Equity kicker: 0.05 warrant per $1 of revenue acquired, 7-year term, exercise price tied to deal pricing or 30-day average price .
  • Listing/index milestones: $50,000 cash and 500,000 warrants upon NYSE American listing (achieved in 2023); eligible to earn $125,000 cash and 1,250,000 warrants upon joining the Russell indices .

Realized payouts and equity (selected items):

Vesting/exercisability and award design:

• As of 12/31/2023, Wright’s listed option/warrant grants were shown as exercisable (no unexercisable component disclosed for his grants in the Outstanding Equity Awards table) with exercise prices spanning $1.04–$4.00 and expirations 2028–2030 .

Equity Ownership & Alignment

As of March 21, 2025 (beneficial ownership date):

• Total beneficial ownership: 11,772,538 shares (13.51% of common outstanding 84,891,874) .
• Breakdown: 9,523,673 common shares; 2,248,865 warrants exercisable into common; all under his sole voting/dispositive power .
• Hedging and pledging: Prohibited for directors and officers under Insider Trading Policy (amended Nov 9, 2023) .
• Clawback: Dodd-Frank-compliant policy adopted Nov 9, 2023; 3-year look-back for incentive compensation on material restatement .
• Director pay: Employee directors (including Wright) receive no director compensation .

Selected outstanding awards detail (12/31/2023):

Policies and guidelines:

• Hedging/pledging prohibited (reduces misalignment/forced-sale risk) .
• Stock ownership guidelines for executives not disclosed in proxies; no pledging permitted .

Employment Terms

Legacy employment agreement (April 1, 2020; extended March 13, 2024 through June 30, 2024):

• Base salary: $30,000/month; to increase to $40,000/month upon Company annualized revenue run-rate ≥ $75m .
• Performance bonuses: M&A accretion-based cash; plus listing/index milestone bonuses; Board discretionary additional bonus possible .
• Equity: warrants per acquired revenue (0.05/$1), 7-year term, exercise price tied to deal metrics .
• Severance: if terminated without cause or resigns for good reason, 12 months of base salary (single trigger on termination, not CoC); standard confidentiality, non-compete, non-solicit, non‑disparagement .
• Deferrals: in 2Q23, Wright agreed to defer a portion of salary and full 2023 bonus; extension executed to allow committee’s comp redesign process .

Note: 2025 proxy does not disclose a new post‑June 2024 agreement for Wright; committee is aligning executive pay architecture (independent consultant engaged March 2024) .

Performance & Track Record

Company financial backdrop (USD):

Values retrieved from S&P Global.*

Notable governance and risk disclosures relevant to track record:

• Prior association: Director/officer at Nutroganics, Inc. within two years of its October 2016 bankruptcy (disclosed under “legal proceedings”) .
• Insider alignment mechanisms: prohibition on hedging/pledging; clawback policy adopted .

Board Governance

• Roles: Director since 2019; Vice Chair of Board; also GC, EVP–Strategy, Secretary (non‑independent) .
• Independence: Board majority independent; Wright is not independent (employee-director) .
• Committees: Audit, Compensation (Compensation, Culture & People), and Nominating & Governance composed of independent directors; Wright not listed as a committee member .
• Leadership: Independent Chair (Bernard S. Champoux); no Lead Independent Director due to independent Chair model .
• Meetings/attendance: 11 Board meetings in FY2024 ; in FY2023, each director attended ≥75% of Board and committee meetings .
• Dual-role implications: Officer-director status can reduce independence; mitigated by independent Chair, independent committees, and explicit independence determinations per NYSE American standards .

Director compensation:

• Employee directors (including Wright) receive no Board fees/equity for director service; non‑employee director cash fees (some deferred) and equity/option structure disclosed; cash reduced effective July 1, 2024 .

Compensation Structure Analysis

• Pay mix and trends: For Wright as NEO, equity grant value dropped from $1.43m (2022) to $0.54m (2023), while base remained stable; realized cash incentives tied to discrete M&A transactions ($64.5k in 2022; $29.3k in 2023) . This indicates less reliance on large equity awards in 2023 while preserving M&A-linked incentives.
• Incentive metrics: Emphasis on acquisition accretion (revenue/share and EBITDA/share), plus market-listing/index milestones (warrants) can align with inorganic growth but risks overweighting deal volume unless accretion tests are robust .
• Governance improvements: Independent comp consultant engaged (March 2024); committee working to align executive pay to value creation with clearer performance metrics and equity design; CFO’s legacy agreement replaced with at‑will structure in May 2025, signaling transition to revised framework .

Risk Indicators & Red Flags

• Related-party/loans: Proxy lists related transactions (e.g., Kaunitz note; SSI earnout) but none implicate Wright specifically; indemnification agreements standard .
• Hedging/pledging: Prohibited—reduces alignment concerns .
• Clawback: In place—supports recourse if restatements occur .
• Legal proceedings: Prior director role at a company that later went bankrupt (Nutroganics) within two years—contextual governance risk disclosure .
• Equity capacity/dilution: 2025 proxy seeks to raise plan shares to 9,000,000 and adopts a 3,000,000‑share ESPP—expands equity pool for ongoing incentives, with potential dilution considerations .

Say-on-Pay & Shareholder Feedback

• No say‑on‑pay proposal disclosed for 2024/2025; 2024 shareholder votes included directors, auditor ratification, and stock plan share increase (passed) .

Employment & Contracts – Key Economics (Wright)

• Base: $30,000/month, with provision to $40,000/month upon $75m annualized revenue run-rate .
• Annual incentives: M&A accretion-based (cash and warrants) .
• Severance: 12 months base on termination without cause/for good reason; single-trigger termination, not CoC acceleration .
• Restrictive covenants: Confidentiality, non-compete, non‑solicitation, non‑disparagement .
• Agreement status: Extended through June 30, 2024; subsequent terms for Wright not disclosed in 2025 proxy .

Investment Implications

• Alignment and ownership: Wright’s substantial beneficial ownership (13.51%) and prohibitions on hedging/pledging strengthen alignment; large fully exercisable option/warrant inventory creates potential liquidity events upon exercise but mitigated by policy constraints .
• Incentive design: Legacy incentives heavily tied to accretive M&A and market milestones; this can support inorganic growth but may underweight organic operating metrics unless revised under the committee’s ongoing redesign (consultant engaged) .
• Governance: Officer-director dual role raises independence questions but is offset by an independent Chair and fully independent key committees; no say-on-pay history for recent years limits direct shareholder pay feedback .
• Dilution and capacity: Expanded equity plan (to 9,000,000 shares) and new ESPP increase incentive flexibility but add dilution risk—important for modeling per‑share value under continued equity-heavy compensation .

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*Values retrieved from S&P Global.