Sheila Cheston
About Sheila Cheston
Sheila Cheston (age 66) joined Digimarc’s Board in October 2024; she is an independent director serving as Chair of the Governance, Nominating & Sustainability Committee and a member of the Audit and Compensation & Talent Management Committees. She is the former Corporate Vice President and General Counsel of Northrop Grumman (retired December 2023 after 13 years) and previously held senior roles at BAE Systems and in U.S. government service (General Counsel and acting Undersecretary of the U.S. Air Force; Special Associate Counsel to the President). She holds degrees from Dartmouth College and Columbia Law School and is currently an adjunct professor at Columbia Law School .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Northrop Grumman Corporation | Corporate Vice President & General Counsel | 13 years; retired Dec 2023 | Oversaw law department, Corporate Secretary and Compliance; advised on global strategy, capital allocation, M&A; helped deliver long-term returns more than 3x the S&P Index |
| BAE Systems, Inc. | Executive Vice President; Board Director | Not disclosed | Led finance, strategy, and legal; senior corporate governance responsibilities |
| U.S. Air Force | General Counsel; Acting Undersecretary | Not disclosed | Senior legal and executive leadership in defense; government regulatory and policy expertise |
| The White House | Special Associate Counsel to the President | Not disclosed | Federal executive branch counsel; high-stakes regulatory and policy work |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Columbia Law School | Adjunct Professor | Current | Corporate governance scholarship; keeps current on governance best practices |
Board Governance
- Committee assignments: Audit (Member), Governance, Nominating & Sustainability (Chair), Compensation & Talent Management (Member) .
- Independence: Digimarc’s Board is majority independent; all directors except the CEO are independent under Nasdaq rules; all committee members (including Governance and Compensation) are independent .
- Attendance: In 2024 the Board held seven formal meetings; each current serving director attended over 75% of Board and applicable committee meetings; five of seven directors attended the 2024 Annual Meeting .
- Executive sessions: Independent directors meet in executive session chaired by the independent Board Chair (separate from management) .
- Risk oversight: Governance Committee (chaired by Cheston) oversees governance/compliance, hotline, ethics, related-party transactions and conflicts; Compensation Committee oversees talent/pay equity/succession; Audit Committee oversees financial reporting, cybersecurity, and AI governance .
- Board refresh & diversity: Material refresh with 71% serving ≤4 years and 57% ≤2 years; three directors add gender diversity (43%) and three add demographic diversity (43%) .
Fixed Compensation
- Program terms (directors):
- Annual cash retainer: $50,000
- Chair of Board: +$40,000
- Committee chair (Audit, Compensation, Governance): +$15,000
- Meeting fees: None (retainers cover all roles/meetings)
- Equity election: Directors may elect to receive 0%, 50%, or 100% of cash retainers in stock; since 2025 this includes Chair retainers
| 2024 Director Pay – Sheila Cheston | Amount ($) |
|---|---|
| Fees Earned or Paid in Cash | $12,500 |
| Stock Awards (Grant Date Fair Value) | $268,057 |
| Total | $280,557 |
Performance Compensation
- Directors receive time-based restricted stock; no performance-linked director awards. Initial restricted stock grant for new directors: ~$200,000; vests 1/3 on each of the first three anniversaries .
- Annual restricted stock grant for continuing directors: ~$100,000; restrictions lapse on the anniversary of grant or immediately prior to next annual meeting (≥50 weeks after prior annual meeting) .
| Restricted Stock Grants – Sheila Cheston (2024) | Shares | Grant Date Fair Value | Vesting / Restrictions |
|---|---|---|---|
| Initial grant (upon Board appointment) | 7,635 | Included in $268,057 total | Vests 1/3 annually over 3 years |
| Pro-rated annual grant | 2,604 | Included in $268,057 total | Restrictions lapse at anniversary or immediately prior to next annual meeting (≥50 weeks rule) |
- Clawbacks: Digimarc’s clawback applies to incentive compensation and covers both time-based and performance-based awards under the 2018 Plan; remediation can include reimbursement or cancellation for misconduct or restatements .
- Change-in-control mechanics: Under the 2018 Plan, service-vesting awards may accelerate in certain change-in-control or company transaction scenarios where awards are not assumed/replaced; otherwise double-trigger applies post-transaction .
Other Directorships & Interlocks
| Company | Role | Overlap/Interlocks |
|---|---|---|
| None disclosed in the proxy for Ms. Cheston | — | — |
Expertise & Qualifications
- Legal/governance and government affairs/public policy expertise; sustainability oversight; culture/diversity & inclusion contributions per Board skills matrix .
- Deep corporate legal and finance experience; recognized leadership/mentorship awards; current academic role supports governance currency .
Equity Ownership
| Metric | Value |
|---|---|
| Beneficially owned shares | 10,239 (as of March 12, 2025) |
| Ownership as % of outstanding | <1% (based on 21,548,263 shares) |
| Unvested restricted shares | 10,239 (as of Dec 31, 2024) |
| Stock options outstanding | None (for non-employee directors as of Dec 31, 2024) |
| Pledged or hedged shares | Company prohibits hedging/pledging; no pledges disclosed |
- Ownership guidelines: Non-employee directors must hold 6× the annual cash retainer; all directors exceeded the enhanced guidelines as of Dec 31, 2024 .
Governance Assessment
- Board effectiveness: Cheston chairs Governance, driving board evaluations, CEO succession oversight, stakeholder engagement, and oversight of related-party/conflict issues—key to investor confidence .
- Independence and alignment: Independent director with robust stock ownership requirements; ability to elect equity in lieu of cash further aligns incentives; no director perquisites; compensation capped at $500,000 per non-employee director .
- Risk oversight: Governance Committee remit includes hotline oversight, ethics, litigation risk; Audit Committee covers cybersecurity and AI governance; Compensation oversees talent/pay equity—comprehensive coverage of entity-level risks .
- Shareholder signals: 2024 Say‑on‑Pay passed with >92% approval, reflecting strong investor alignment of compensation practices; continuous outreach noted .
- RED FLAGS: None disclosed—no related-party transactions identified; pledging/hedging prohibited; attendance thresholds met; no director options outstanding .