Raymond Kunkel
About Raymond Kunkel
Raymond “Ray” Kunkel, 59, is Chief Operating Officer of Charlotte’s Web Holdings (appointed October 15, 2023). He joined the company in December 2020 as Supply Chain Leader, bringing 30+ years of operations experience across manufacturing and global supply chains, including 21 years at Procter & Gamble and roles at Perrigo and Gartner; he holds a Mechanical Engineering degree from the University of Cincinnati . He is part of the company’s CODM leadership group (CEO, CFO, COO, CPO), which manages performance on pre-tax income/loss; in FY 2024, revenue was $49.7M with a pre-tax loss of $29.8M versus $63.2M revenue and $23.3M pre-tax loss in FY 2023, reflecting a challenging operating backdrop for pay-for-performance evaluation .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Charlotte’s Web Holdings | Chief Operating Officer | Oct 15, 2023 – Present | — |
| Charlotte’s Web Holdings | Supply Chain Leader | Dec 2020 – Oct 2023 | — |
| Gartner | Executive Supply Chain Leadership Partner | Jan 2018 – Dec 2019 | — |
| Procter & Gamble | Various supply chain/manufacturing roles | 21 years | — |
| Perrigo | Operations/supply chain roles | Not disclosed | — |
External Roles
No public company directorships or external board roles disclosed for Mr. Kunkel .
Fixed Compensation
| Year | Base Salary ($) | Target Bonus % | Actual Bonus ($) | All Other Comp ($) | Notes |
|---|---|---|---|---|---|
| 2024 | 300,000 | — | 55,114 | 12,788 (insurance $1,445; 401(k) match $11,343) | Non-equity incentive column shows none for 2024; bonus paid via “Bonus” column |
Performance Compensation
- The company uses a mix of annual performance-based cash/RSU bonuses and long-term equity (RSUs/options) under the LTIP; specific annual bonus metrics/weightings/targets are not disclosed; the Compensation Committee retains discretion .
| Incentive | Metric(s) | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| 2024 Annual Cash Bonus | Not disclosed | — | — | $55,114 | N/A |
| 2024 RSU Grant | Time-based RSUs (LTIP) | — | — | Grant-date fair value $21,620 | 102,954 RSUs vest 1/3 on 4/1/2025, 4/1/2026, 4/1/2027 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 361,638 shares; <1% of class |
| Components (per beneficial ownership footnote) | Includes 99,156 shares underlying presently exercisable options |
| Unvested RSUs | 102,954 unvested as of 12/31/2024; market value $9,266 (TSX close C$0.13/US$0.09; FX US$1=C$1.4389) |
| Options – Exercisable vs Unexercisable (as of 12/31/2024) | See “Stock Options Detail” below |
| Hedging | Prohibited under Insider Trading & Reporting Policy |
| Pledging | Proxy states none of such shares are pledged (for named individuals, unless otherwise indicated) |
| Ownership Guidelines | Designated officers (incl. COO) must hold 1x base salary; 5 years to comply from appointment |
| Time to Guideline Compliance | Appointed COO 10/15/2023; 5-year window applies (through 10/15/2028) per policy mechanics |
Stock Options Detail (granted under LTIP/Legacy plan; amounts as of 12/31/2024)
| Grant Date | Exercisable (#) | Unexercisable (#) | Exercise Price | Expiration | Vesting Schedule |
|---|---|---|---|---|---|
| 03/26/2021 | 4,961 | 1,571 | C$5.91 (approx US$4.70) | 03/26/2031 | 4 equal annual installments starting 03/26/2022 |
| 02/11/2022 | 35,000 | 17,500 | C$1.98 (approx US$1.56) | 02/11/2032 | 3 annual installments starting 02/11/2023 |
| 04/01/2023 | 20,062 | 40,124 | C$0.435 (approx US$0.32) | 04/01/2033 | 3 annual installments starting 04/01/2024 |
- As of 12/31/2024, TSX closing price was C$0.13 (US$0.09), implying all option strikes (C$0.435 to C$5.91) were out-of-the-money at year-end, reducing near-term exercise-driven selling pressure .
RSU Vesting Schedule (2024 grant)
| RSUs Granted | Grant Date | Vesting Tranches | Tranche Sizes | Notes |
|---|---|---|---|---|
| 102,954 | 04/01/2024 | 1/3 annually: 04/01/2025, 04/01/2026, 04/01/2027 | 34,318 shares each tranche | Unvested market value at 12/31/24: $9,266 |
Employment Terms
| Term | Detail |
|---|---|
| Role/Start | COO effective October 15, 2023; joined Charlotte’s Web December 2020 |
| Contract | Individual employment agreement terms for Mr. Kunkel not disclosed; CEO agreement is described (for context) |
| Change-in-Control Severance Plan | Executive leadership team members (including NEOs) entitled to 9 months base salary if involuntarily terminated within 12 months post-CIC; CEO/CFO: 12 months; senior directors: 6 months; continued medical coverage during severance period, subject to conditions |
| Equity Treatment on CIC | Under LTIP, outstanding awards generally terminate at CIC unless continued/assumed or substituted; awards that terminate become fully vested and exercisable immediately prior to effective time, subject to plan terms |
| Clawback | Incentive compensation (including options/RSUs) subject to recoupment for willful misconduct/fraud causing a financial restatement; recovery equals excess incentive over restated basis (after-tax) |
| Hedging | Prohibited (short sales, puts/calls) |
| Ownership Guidelines | 1x salary within 5 years for designated officers; five-year clock from appointment |
| Retirement/Deferred Comp | No defined benefit or deferred compensation plan; 401(k) with Safe Harbor matching |
Compensation Structure Analysis
- Mix and linkage: For 2024, pay comprised base salary ($300k), cash bonus ($55k), and RSUs ($21.6k grant-date fair value). Bonus metrics/weightings were not disclosed, indicating Committee discretion amid industry volatility .
- Shift in vehicles: Company emphasizes RSUs and options under the LTIP for long-term alignment; LTIP prohibits repricing without shareholder approval and codifies limits for directors, supporting governance quality .
- Equity overhang/burn: LTIP burn fell to 1.94% in 2024 (vs. 7.41% in 2023), suggesting moderation in new equity issuance, which can influence dilution and alignment optics .
Risk Indicators & Red Flags
- Hedging/Pledging: Hedging is prohibited; proxy indicates no pledging of shares for named individuals unless noted (none indicated for Kunkel) .
- Options underwater at year-end: All option strikes above TSX year-end price (C$0.13), reducing near-term exercise incentives and potential selling pressure .
- Discretionary bonus despite losses: Company paid 2024 bonuses while reporting revenue decline and pre-tax losses, reflecting discretionary judgments by the Compensation Committee .
Performance Backdrop (context for pay-for-performance)
| Fiscal Year | Revenue ($000s) | Pre-tax Income/(Loss) ($000s) |
|---|---|---|
| 2023 | 63,155 | (23,267) |
| 2024 | 49,667 | (29,807) |
Expertise & Qualifications
- Mechanical Engineering degree, University of Cincinnati; 30+ years in manufacturing and global supply chains; leadership roles at P&G, Perrigo, Gartner; at Charlotte’s Web since 2020 .
Equity Ownership & Alignment Policies (detail)
- Common share ownership requirements: CEO 3x salary, CFO 2x, other designated officers (incl. COO) 1x salary; five years to comply from appointment .
- Insider trading policy: Prescribed trading windows; prohibits hedging (short sales, options) .
- Clawback: Applies to current/past COO among other executives upon certain restatements tied to misconduct .
Investment Implications
- Alignment and retention: Kunkel holds unvested RSUs with clear annual vest dates (April 1), creating predictable vest-driven supply windows; all options were underwater at 12/31/24, limiting exercise-driven selling, but RSU vests could introduce modest selling pressure around vest dates absent retention/sale restrictions .
- Pay-for-performance visibility: 2024 bonus paid despite revenue contraction and losses, with no disclosed performance weightings/targets; this discretion may weaken external pay-for-performance optics even as LTIP/ownership rules support longer-term alignment .
- Governance safeguards: Prohibitions on hedging, no pledging, LTIP anti-repricing constraints, and clawback policy mitigate risk and support alignment quality .
- Change-of-control economics: Eligibility for 9 months salary severance (double-trigger) plus potential equity acceleration if awards are not assumed provides moderate retention protection without excessive golden parachute risk (CEO/CFO receive higher multiples) .