Steven Myhill-Jones

About Steven Myhill-Jones

Steven Myhill-Jones (age 49) is Chairman and Chief Executive Officer of Daily Journal Corporation. He has served as Chairman and CEO since October 2023, and previously as Chairman and Interim CEO starting March 2022 . A Canada-based technology entrepreneur, he founded Latitude Geographics in 1999 and led it until September 2018, evolving it from services into a software-centric business with international partners . Pay-versus-performance disclosure shows the value of a fixed $100 DJCO investment at $152.98 as of FY2024 (vs $91.77 in FY2023), alongside FY2024 net income of $78.1M (benefiting from investment gains) . DJCO consolidated revenues grew 3% year-over-year to $69.9M in FY2024 (from $67.7M), with ~76% from Journal Technologies .

Past Roles

External Roles

Fixed Compensation

Notes:

• In 2024, the Compensation Committee added an equity component under the newly approved Equity Incentive Plan; in 2023, compensation consisted of salary and bonus only .

Performance Compensation

• The proxy does not disclose specific performance metrics, weightings, or formulae for Mr. Myhill-Jones’ annual bonus; the Compensation Committee relies on judgment. The CEO was not granted Management Incentive Plan certificates (those are based on pre-tax earnings and remain for other participants) .
• 2024 Equity Awards: Granted 400 fully vested shares and 400 RSUs on July 25, 2024; RSUs vest 50% on each of the first two anniversaries (July 25, 2025 and July 25, 2026). Vesting accelerates if terminated without “Cause” or upon a change in control; RSUs settle in stock .

Pay-versus-performance context:

• FY2024: PEO “Compensation Actually Paid” $1,281,496; fixed $100 TSR metric value $152.98; net income $78.1M .
• FY2023: PEO “Compensation Actually Paid” $1,050,000; TSR $91.77; net income $21.5M .

Equity Ownership & Alignment

Upcoming unlocks and potential selling pressure:

• 200 RSUs scheduled to vest on 2025-07-25; remaining 200 on 2026-07-25 (absent acceleration). These could introduce modest selling liquidity around vest dates given the small grant size relative to float .

Employment Terms

Board Governance

• Board service history: Chairman and Interim CEO beginning March 2022; Chairman and CEO since October 2023 .
• Board structure: Two standing committees (Audit; Compensation), each composed entirely of independent directors (John B. Frank, Mary Conlin, and Rasool Rayani). Mr. Frank is the Audit Committee Financial Expert .
• Meetings FY2024: Board (10), Audit (1), Compensation (4); directors attended applicable meetings .
• Independence: Conlin, Frank, and Rayani are independent under Nasdaq and SEC rules; CEO is not independent .
• Dual-role implications: Board explicitly justifies combining Chair & CEO to provide “unambiguous executive authority,” while risk oversight remains with the full Board and committees .

Director Compensation (for context; employee-director treatment)

• Employee directors (including the CEO) do not receive director compensation .
• Non-employee program increased in FY2024: annual cash retainer $25,000 plus RSUs valued at ~$25,000, vesting over two years; RSUs settle in stock following 2025 shareholder approval (limited to 2,000 shares) .
• FY2025 shareholders approved stock settlement of up to 2,000 director RSUs (551,614 FOR; 2,252 AGAINST; 2,746 ABSTAIN; 772,700 broker non-votes) .

Say-on-Pay & Shareholder Voting

• 2023 Say-on-Pay: Approved (608,903 FOR; 1,296 AGAINST; 3,005 ABSTAIN) .
• SOP Frequency: Shareholders supported triennial votes (416,321 for three years) .
• 2024: Equity Incentive Plan approved (668,928 FOR; 2,707 AGAINST; 1,829 ABSTAIN; broker non-votes 446,162) .
• 2025 Annual Meeting: Directors elected; CEO received 472,060 FOR / 83,855 AGAINST; other vote outcomes as disclosed above .

Performance & Track Record

• Operating performance (FY2024 vs FY2023): Consolidated revenues increased 3% to $69.9M; Journal Technologies represented ~76% of revenues in both years . Net income rose to $78.1M (from $21.5M), primarily due to $96.1M net realized and unrealized gains on marketable securities (vs $17.4M prior year) .
• Stock and TSR context: Pay-versus-performance table shows the value of a $100 investment rose to $152.98 (FY2024) from $91.77 (FY2023) ; 10-K reports FY2024 quarterly trading ranges and last trade price $577.94 as of Dec 16, 2024 .
• Strategic initiatives: Emphasis on evolving Journal Technologies’ product capabilities (including AI features) and investing in next-gen development to address technical debt and improve competitiveness .

Risk Indicators & Red Flags

• Internal controls: Management concluded disclosure controls and procedures were not effective as of 9/30/2024 due to material weaknesses (segregation of duties; insufficient accounting resources). Remediation efforts began in FY2025 following a third-party assessment .
• Dual role: CEO also serves as Chairman; while the Board cites benefits, investors often flag combined roles as a governance risk absent a Lead Independent Director (not disclosed) .
• Concentration of investment portfolio: Substantial assets in a concentrated securities portfolio drive earnings volatility; portfolio long managed by Charles Munger (deceased Nov 28, 2023). Company expects to manage portfolio primarily to support Journal Technologies and does not anticipate initiating new unrelated equity investments .
• Management transition: CFO retirement announced (effective January 15, 2026) with separation terms; may introduce near-term finance function transition risk .

Compensation Structure Analysis

• Shift to equity: Introduction of equity in 2024 (400 shares + 400 RSUs; $370,912 grant-date value) increased long-term alignment vs. 2023 when no equity was granted .
• Cash mix variability: Bonus decreased from $560,000 (2023) to $400,000 (2024), while salary increased modestly to $500,000 .
• Performance linkage: CEO not in Management Incentive Plan; bonus appeared discretionary with no disclosed metric weighting. CFO’s non-equity incentive tied to % of pre-tax earnings excluding certain items; such specificity not extended to CEO .
• Repricing or award modifications: None disclosed .

Employment & Contracts

Equity and Vesting Schedule

Outstanding equity at FY2024 year-end: 400 RSUs, valued at $196,040 at 9/30/2024 close (DJCO $490.10) .

Board Committee Service and Dual-Role Implications

• Board/Committee roles: CEO is not on the Audit or Compensation Committees; those are comprised solely of independent directors Frank, Rayani, and Conlin; Frank serves as Audit Committee Financial Expert .
• Dual-role commentary: The Board endorses combined Chair/CEO for clear executive authority while emphasizing committee oversight and full Board risk management .

Investment Implications

• Alignment: 2024 equity awards and anti-hedging policy improve alignment, but current personal ownership is modest (~0.03% of shares outstanding), which may temper incentive alignment relative to larger equity stakes .
• Near-term flow catalysts: Two RSU vesting dates (July 2025/2026) are small relative to float; potential selling pressure around those dates likely limited .
• Governance risk: Combined Chair/CEO without disclosed Lead Independent Director and ongoing internal-control weaknesses are notable governance overhangs; remediation underway in FY2025 .
• Incentive design: Absence of disclosed performance metrics/weightings for CEO bonus and non-participation in the earnings-linked Management Incentive Plan reduce transparency of pay-for-performance linkage .
• Business execution: Moderate revenue growth with profitability heavily influenced by securities portfolio gains; strategic focus on Journal Technologies modernization and AI features is positive but entails execution and margin risks .
• Shareholder sentiment: High support on prior Say-on-Pay and approval of equity programs; 2025 director RSU stock settlement approved—indicates tolerance for equity-linked compensation when modestly dilutive .