Rick Pauls
About Rick Pauls
DiaMedica’s President & CEO since January 2010 and director since April 2005; age 53. He holds a BA in Economics (University of Manitoba) and an MBA in Finance (University of North Dakota), with prior experience in venture capital and structured finance . Company pay-versus-performance disclosure shows cumulative TSR rising from a $100 baseline to $342 over 2022–2024, while net losses widened to $24.4 million in 2024, underscoring equity-sensitive pay outcomes amid development-stage losses .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CentreStone Ventures Inc. | Co-Founder & Managing Director | 2002–2010 | Life sciences venture investing, BD/M&A experience |
| Centara Corporation | Analyst | 2000–2002 | Early-stage venture analysis |
| General Motors Acceptance Corporation | Structured Finance Specialist | 1997–1999 | Asset-backed securitization/structured finance |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| LED Medical Diagnostics, Inc. | Independent Director | Prior service (date not specified) | Governance exposure in medtech diagnostics |
Fixed Compensation
Multi-year compensation (NEO summary table amounts; cash salary differs slightly from board-approved base levels):
| Metric | 2023 | 2024 |
|---|---|---|
| Base salary (approved levels) | $573,000 | $600,000 |
| Salary paid (Summary Comp Table) | $562,000 | $593,250 |
| All other compensation (401k + HSA) | $16,650 | $17,250 |
| Option awards (grant-date fair value) | $396,553 | $633,510 |
| Non-equity incentive plan (annual bonus paid) | $239,958 | $306,975 |
| Total compensation | $1,215,161 | $1,550,985 |
Notes:
- 2024 base salary increased 5% vs 2023; target bonus remained 50% of base .
- DiaMedica states no perquisites for executives; benefits are standard employee plans .
Performance Compensation
Annual STI (cash)
| Item | 2024 Value |
|---|---|
| Target bonus % of base | 50% |
| Target bonus $ | $300,000 |
| Payout | $306,975 (includes 20% discretionary upward adjustment of $60,000) |
| Weighting | 75% corporate; 25% individual |
| Corporate objectives | ReMEDy2 trial progress, manufacturing, capital raising; achieved 76.4% of target |
| Individual objectives (CEO) | Trial, manufacturing, org development, evidence development, partnering; achieved 100% of target |
Long-Term Incentives (stock options)
| Grant | Grant Date | Shares | Exercise Price | Fair Value | Vesting | Term |
|---|---|---|---|---|---|---|
| Annual CEO option | 06/01/2024 | 300,000 | $2.90 | $633,510 | 25% at 1-year; remaining 75% in 12 equal quarterly installments | 10 years per plan |
Award policy:
- Annual grants on June 1; new-hire grants effective 15th day of month post-approval; blackout around periodic filings; equity grant policy prohibits grants near MNPI windows .
Pay vs Performance Alignment
| Year | CEO Compensation Actually Paid | Value of Initial $100 TSR | Net Income (Loss, $mm) |
|---|---|---|---|
| 2022 | $534,244 | $41 | $(13.676) |
| 2023 | $1,424,344 | $74 | $(19.381) |
| 2024 | $2,441,991 | $342 | $(24.381) |
Say-on-pay: ~96% approval at prior AGM; advisory vote held annually .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 946,904 shares; 2.2% of class (42,855,660 outstanding as of 3/18/2025) |
| Components within 60 days | Stock options exercisable within 60 days: 878,313; DSUs: 1,749 |
| Options outstanding (key lines) | Exercisable tranches across multiple grants; unexercisable include 300,000 at $2.90 expiring 05/31/2034 |
| Anti-hedging/pledging | Company policy prohibits short sales, publicly traded options, hedging, and pledging of DiaMedica securities |
| Director pay | Not compensated separately as a director; compensation shown solely in NEO tables |
| Insider participation | CEO purchased 12,787 shares at $3.91 in June 2023 private placement (alignment signal) |
Outstanding equity awards detail (selected):
| Type | Exercisable (#) | Unexercisable (#) | Exercise Price | Expiration |
|---|---|---|---|---|
| Stock option | 142,188 | 32,813 | $5.00 | 07/27/2031 |
| Stock option | 110,625 | 66,375 | $2.45 | 05/31/2032 |
| Stock option | 67,875 | 113,125 | $2.73 | 05/31/2033 |
| Stock option | — | 300,000 | $2.90 | 05/31/2034 |
| DSUs | — | 1,749 | N/A | Settle post-termination |
Stock ownership guidelines: Board governance guidelines address stock ownership for directors; specific executive multiple not disclosed .
Employment Terms
- Agreement structure: Annual base, STI, LTI, benefits; includes confidentiality, non-compete, non-solicit, IP assignment .
- Severance (without cause): 12 months salary continuation (CEO), COBRA premium reimbursement during continuation, pro rata target bonus for year of termination, immediate acceleration of all or a portion of equity awards; subject to separation and release .
- Change-in-control (double trigger): If terminated without cause or resigns for good reason in connection with/within 12 months after change in control, 18 months salary continuation (CEO), COBRA premium reimbursement, pro rata target bonus, immediate acceleration of all or a portion of equity awards; subject to separation and release .
- Plan-level CIC (single-trigger discretion): 2019 Plan permits Board to accelerate options/RSUs upon change in control and/or provide substitution or cash-out .
- Definitions: “Good reason” includes material reduction in duties/compensation or relocation >50 miles; “Change in control” includes 50%+ ownership change, certain mergers, or sale of substantially all assets .
- Clawback: Mandatory recovery of incentive compensation tied to financial metrics upon restatements (adopted 2023; SEC/Nasdaq compliant) .
- Indemnification: Executives covered to fullest extent under BCBCA and Articles, subject to good faith and other conditions .
Board Governance
- Roles: CEO and director; former Chairman (Apr 2008–Jul 2014). Current leadership separation with independent Chairman James Parsons .
- Independence: CEO/director classified “Not Independent”; board majority independent .
- Committees: CEO not a member of standing Audit, Compensation, Nominating & Corporate Governance, or Scientific & Clinical Research committees .
- Attendance: Each director attended ≥75% of aggregate board and committee meetings in 2024 .
- Executive sessions: Independent directors met in executive/in-camera session five times in 2024 .
Committee composition snapshot:
| Committee | Chair | Members |
|---|---|---|
| Audit | James Parsons | Daniel O’Connor, Richard Pilnik, Charles Semba |
| Compensation | Michael Giuffre | Tanya Lewis, Richard Kuntz, Charles Semba |
| Nominating & Corp Gov | Richard Pilnik | Michael Giuffre, Tanya Lewis, Daniel O’Connor |
| Scientific & Clinical Research | Richard Kuntz | Michael Giuffre, Tanya Lewis, Charles Semba |
Compensation Structure Analysis
- Pay mix: Variable, at-risk pay emphasized (STI + options); CEO target STI 50% of base; LTI via time-vested options .
- Metric rigor: Corporate STI goals tied to clinical execution, manufacturing and financing; corporate achievement 76.4% suggests measurable thresholds; limited use of discretion increased CEO payout to 102.3% of target .
- Peer benchmarking: Compensation targeted at 50th percentile of peer group; Alpine Rewards engaged for independent analysis; peer group includes 18 development-stage biotechs (e.g., Athira, Immunic, Kezar, Soleno) .
- Governance protections: No hedging/pledging; no repricing without shareholder approval; clawback policy; no guaranteed bonuses .
Related Party Transactions (context for alignment/governance)
- Insider participation: CEO purchased $50,000 in June 2023 private placement (12,787 shares at $3.91) alongside directors and >5% holders .
- No perquisites for directors; director DSU/RSU elections allowed in lieu of cash retainers; CEO not paid separately as director .
Investment Implications
- Alignment: Significant at-risk pay via options and STI tied to clinical/mfg/financing milestones supports pay-for-performance; anti-hedging/pledging policy reduces misalignment risk .
- Vesting cadence: Annual CEO option grants vest 25% at the one-year anniversary (June 1 cycles) then quarterly over three years, creating periodic increases in exercisable supply; 2024 grant’s first tranche vesting on June 1, 2025 may be a calendar watchpoint for potential exercise activity .
- Retention/COC risk: Double-trigger protection at 18 months for CEO in change-in-control, plus plan-level discretionary acceleration, provides retention through strategic events but increases M&A expense considerations; severance at 12 months outside CIC is moderate for a small-cap biotech .
- Execution risk: ReMEDy2 site activation/enrollment headwinds and adaptive design could expand sample size to up to 728, implying timeline and funding risks; pay outcomes are sensitive to equity value (TSR) despite ongoing net losses .
- Shareholder sentiment: Strong say-on-pay support (~96%) suggests investor acceptance of compensation design amid development milestones .