Jerrell Shelton
About Jerrell Shelton
Jerrell W. Shelton (age 78) has served as Cryoport’s President and Chief Executive Officer since November 2012, a director since October 2012, and Chair since October 2015. He holds a B.S. in Business Administration (University of Tennessee) and an M.B.A. (Harvard). 2024 company results under his leadership included revenue of $228.4 million, net loss of $114.8 million, and Adjusted EBITDA of -$15.1 million; a $100 initial investment in Cryoport’s stock stood at $47.27 by year-end 2024 versus $137.15 for the S&P 1500 Life Sciences Tools & Services peer index .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cryoport, Inc. | Chair; President & CEO | Chair since 2015; CEO since 2012 | Led transition to services-led model and executed portfolio initiatives (e.g., IntegriCell, DHL/CRYOPDP deal) . |
| Solera Holdings, Inc. | Director and committee member | 2007–2011 | Governance and oversight at a scaled software/data company . |
| Wellness, Inc. | Chair & CEO | 2004–2006 | Operated integrated hospital/clinical environments . |
| IBM Research / WebFountain | Visiting Executive; Head of WebFountain | Prior to 2004 | Led advanced data initiatives within IBM Research . |
| NDC Holdings II, Inc. | Chair, President & CEO | 1998–1999 | Led information services portfolio company . |
| Continental Graphics Holdings | President & CEO | 1996–1998 | Managed information services operations . |
| Thomson Business Information Group | President & CEO | 1991–1996 | Led business information division strategy and execution . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Solera Holdings, Inc. | Director | 2007–2011 | Board and standing committees . |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of Salary) | Actual Bonus ($) | Total Comp ($) |
|---|---|---|---|---|
| 2024 | 921,169 | 100% | 441,128 | 1,874,870 |
| 2023 | 865,597 | 100% | — | 2,236,758 |
| 2022 | 791,562 | 100% | — | 2,486,134 |
Notes:
- 2024 base salary increased to $937,918 effective May 1, 2024; target bonus remained 100% of salary; payout realized at 47% of target given revenue near-target and negative Adjusted EBITDA .
Performance Compensation
Annual Incentive (2024)
| Metric | Weight | Target | Actual | Achievement | Payout vs Target |
|---|---|---|---|---|---|
| Revenue (Company) | 50% (CEO) | $230.0m | $228.4m | 99.3% | 94.2% |
| Adjusted EBITDA (Company) | 50% (CEO) | $(8.4)m | $(15.1)m | N/A | 0% |
| Total CEO Bonus Outcome | 100% | — | — | — | 47.0% of target |
- CEO incentive is solely formulaic on revenue and Adjusted EBITDA (no individual component), reinforcing pay-for-performance linkage .
Long-Term Incentives (2024 grants)
| Award Type | Grant Date | Quantity/Terms | Exercise/Price | Vesting | Grant Date Fair Value ($) |
|---|---|---|---|---|---|
| Stock Options (premium-priced) | 3/15/2024 | 33,524 | $16.70 | 1/48 monthly over 4 years; 7-year term | 286,376 |
| RSRs | 3/15/2024 | 14,901 | — | 25% annually over 4 years | 226,197 |
- Mix: ~56% options (exercise price set at 110% of grant-date close), ~44% RSRs; options align value to future stock appreciation .
- No option repricing; equity grants follow established cadence and are not timed around MNPI events .
Equity Ownership & Alignment
- Beneficial ownership: 3,005,827 shares (5.7% of common), inclusive of options and RSRs exercisable/vestable within 60 days (2,304,903 shares) .
- Unvested RSRs at 12/31/2024: 8,250; 13,546; 20,319; 14,901 (total 57,016) with aggregate disclosed market values $64,185; $105,388; $158,082; $115,930, respectively (based on $7.78 close) .
- Selected option tranches outstanding (12/31/2024):
- 219,892 @ $7.80 exp. 5/7/2025; 656,064 @ $5.00 exp. 8/20/2025; 179,007 @ $1.87 exp. 5/6/2026; 281,219 @ $3.44 exp. 5/23/2027; 278,440 @ $8.65 exp. 3/28/2028; 375,000 @ $12.79 exp. 4/1/2029; 375,000 @ $16.93 exp. 3/30/2030 .
- Recent grants with remaining unexercisable portions include: 61,875/4,125 @ $58.94 (3/9/2028), 41,905/19,047 @ $29.69 (3/14/2029), 26,666/34,286 @ $23.78 (3/22/2030), 6,286/27,238 @ $16.70 (3/15/2031) .
- Hedging/pledging: Company policy prohibits hedging and pledging of company securities by directors and employees; CEO stock ownership guideline is 6x base salary, with compliance or time-to-comply noted for all NEOs as of the record date .
- Insider selling/vesting pressure:
- 3/26/2024 Form 4 disclosed shares sold to cover taxes upon RSR vesting per company policy .
- Multiple sales in Nov 2024 executed under a Rule 10b5-1 plan; weighted average prices $6.47–$6.93; 50,000-share blocks disclosed across 11/18–11/22/2024 .
- Additional 2025 sales reported in mid/late June pursuant to a 6/3/2025 trading plan . Aggregated tracking sources show sizable 2025 dispositions; use primary Forms 4 for precise counts .
- Ownership guidelines for directors (3x retainer) and enforcement mechanisms are in place; Shelton does not receive board retainers as an employee director .
Employment Terms
| Provision | Key Terms |
|---|---|
| Agreement term | Expires Feb 15, 2027; auto-renews annually unless notice; non-solicit 18 months post-termination . |
| Target bonus | 100% of base salary under the Bonus Plan . |
| Severance (non-CIC) | If terminated without cause or for good reason: 24 months base salary; all unvested equity awards become fully vested; salary paid per normal payroll cycles . |
| CIC terms | Company policy discloses no “single trigger” CIC payments; Shelton’s agreement provides broad vesting on qualifying termination irrespective of CIC; equity plans permit committee discretion on vesting upon CIC . |
| Retirement equity treatment | If he retires and remains on the Board, continued vesting; if he retires and does not remain, 18 months acceleration, estimated intrinsic value $1,163,790 at 12/31/2024 . |
| Estimated payouts (12/31/2024) | Cash severance $1,875,836; equity acceleration $1,547,006; total $3,422,842 (termination without cause/for good reason) . |
| Clawback | Nasdaq-compliant recoupment policy covering incentive compensation upon restatement . |
Board Governance
- Roles: Combined Chair/CEO structure; Board deems combined role appropriate given Shelton’s deep company and industry knowledge; independent Lead Director (Dr. Ramkumar Mandalam) appointed Feb 2025 following the passing of prior Lead Director .
- Independence: 5 of 6 directors are independent; Shelton is not independent; independent directors hold executive sessions without management .
- Committees: Shelton is not listed as serving on Audit, Compensation, Nominating & Governance, or Science & Technology committees; committees are independently chaired and met regularly in 2024 .
- Board attendance: The Board met five times in 2024; each director attended at least 75% of applicable meetings; Shelton attended the 2024 annual meeting .
Director Compensation (context for dual-role)
- Non-employee directors receive an annual $70,000 cash retainer plus chair/lead premiums and annual equity grants (options and RSRs at ~$162.5k each). Shelton, as CEO, does not receive board compensation .
Compensation Structure Analysis
- Mix and risk: In 2024, ~60.7% of CEO primary compensation was variable; long-term incentives are majority premium-priced options, aligning realized value with stock appreciation; no option repricing .
- Short-term rigor: CEO bonus is strictly formulaic (50% revenue/50% Adjusted EBITDA), excluding individual discretion; 2024 payout of 47% reflected near-target revenue but EBITDA shortfall, indicating downward sensitivity to profitability .
- Peer benchmarking and consultant: FW Cook engaged; 15-company peer group spans life sciences tools/services and adjacent sectors; committee reviews competitiveness but does not disclose a target percentile .
- Governance safeguards: Hedging/pledging prohibited; robust clawback; ownership guidelines (CEO 6x salary) .
Equity Ownership & Alignment (Detail)
| Item | Detail |
|---|---|
| Beneficial ownership | 3,005,827 shares; 5.7% of common . |
| Included derivative rights | Footnote notes inclusion of options and RSRs exercisable/vestable within 60 days (2,304,903 shares) . |
| Unvested RSRs (12/31/24) | 57,016 shares; disclosed value components total $443,585 at $7.78 close . |
| Options landscape | Large bank of legacy options at low strikes (e.g., $1.87–$8.65) plus more recent higher-strike grants; significant in-the-money leverage potential if shares recover . |
| Pledging/Hedging | Prohibited by policy . |
| Guidelines | CEO 6x salary; NEOs compliant or within allowed timeframe . |
Performance & Track Record
- 2024 execution: Revenue $228.4m; Services mix rose to 67% from ~62% in 2023; record 701 clinical trials and 19 commercial cell & gene therapies supported; cost reduction initiatives for $22m annualized savings; Q4 2024 gross margin improved to 45.8% .
- Strategic moves: Launched IntegriCell cryopreservation platform; introduced HV3 shipping system; signed strategic agreement with DHL including CRYOPDP divestiture to strengthen EMEA/APAC logistics and focus on core markets .
- Shareholder alignment: 2024 say-on-pay approval ~98% (for 2023 pay), indicating investor support for compensation framework despite 2024 market challenges .
- Pay vs Performance perspective: Company TSR declined over 2021–2024; compensation actually paid tracked TSR downward given equity-heavy design; 2024 “compensation actually paid” to CEO was $962,516 vs SCT total $1,874,870 reflecting mark-to-market effects .
Say‑on‑Pay & Shareholder Feedback
- Say-on-pay 2024: ~98% approval for prior year NEO compensation .
- Frequency: Board recommends annual say-on-pay; Proposal 4 seeks “one year” .
- Engagement: Company engaged holders representing ~65% of outstanding shares in 2024; feedback informed governance (e.g., overboarding policy) .
Compensation Committee & Peer Group
- Committee: Independent members; uses FW Cook as independent advisor; annual review of design and competitiveness .
- Peer group (examples): Repligen, Azenta, BioLife Solutions, Medpace, Lantheus, Veracyte, SPS Commerce, Manhattan Associates, Pegasystems, others (15 total) .
Related Party Transactions
- No transactions >$120,000 involving executives/directors since Jan 1, 2024, other than disclosed Blackstone Series C Preferred arrangements and board nomination rights (Mr. Jagannath as Blackstone nominee) .
Board Service History and Dual‑Role Implications
- Service: Director since Oct 2012; Chair since Oct 2015; CEO since Nov 2012 .
- Committees: Not listed as a member of Audit, Compensation, Nominating & Governance, or Science & Technology committees .
- Independence: Not independent; Board composition ensures 5 of 6 directors are independent; Lead Independent Director presides over executive sessions to mitigate combined Chair/CEO concentration .
Insider Trading Activity Highlights (selling pressure and vesting-driven sales)
- 3/26/2024: Form 4 indicates automatic sale to cover taxes on RSR vesting, per issuer policy .
- 11/18–11/22/2024: Multiple sales under Rule 10b5-1; weighted average sale prices $6.47–$6.93 noted across transactions .
- 6/2025: Additional sales under a trading plan adopted 6/3/2025; see broker-cited Form 4 summary for plan indication (verify with primary filings) .
Investment Implications
- Pay-for-performance is functioning: CEO bonus was cut to 47% of target given EBITDA underperformance, and equity-heavy LTI (with premium-priced options) makes realized pay sensitive to TSR, aligning incentives but potentially limiting retention if stock remains depressed .
- Retention risk vs. protection: Shelton’s agreement provides robust severance (24 months salary) and full equity acceleration on a qualifying termination even absent a change in control—supportive for retention/transition but a potential governance overhang versus market-standard double-trigger paradigms; however, the company discloses no single-trigger CIC payments and maintains clawback and anti-hedging/pledging policies .
- Selling pressure: Regular 10b5-1 plan sales and tax-withholding dispositions create episodic technical supply; monitor cadence of vesting, option expirations, and trading plan updates, particularly around multi‑day blocks at low single-digit prices in late 2024 and mid‑2025 .
- Alignment and governance: Significant beneficial stake (5.7%), stringent ownership/hedging rules, and independent committee oversight (with Lead Independent Director) partially offset Chair/CEO concentration concerns; say‑on‑pay support (98%) signals current investor acceptance of design .
- Performance levers to watch: Execution on DHL/CRYOPDP partnership, services growth, margin trajectory (Adjusted EBITDA inflection), and equity plan usage will be central to value creation under Shelton’s stewardship .