Vern Kornelsen
About Vern D. Kornelsen
Vern D. Kornelsen, age 92, is a co-founder of Encision and has served as director since April 1998 after previously serving as CFO from 1991 to February 1997. He is a former Colorado CPA, designated an audit committee financial expert, and is General Partner of CMED Partners LLLP, a principal shareholder; he is also the controlling stockholder of Lifeloc Technologies, Inc., and has served as officer/director of Electronic Systems Technology, Inc.; he holds a B.S. in Business from the University of Kansas .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Encision Inc. (ECIA) | Chief Financial Officer | 1991–Feb 1997 | Finance leadership during early company build-out |
| Encision Inc. (ECIA) | Director | Apr 1998–present | Long-tenured governance presence; independent under NYSE rules |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| CMED Partners LLLP | General Partner | Not disclosed | Principal shareholder of Encision; ownership interlock |
| Lifeloc Technologies, Inc. | Controlling stockholder; officer/director | Not disclosed | Influence/control; public company governance exposure |
| Electronic Systems Technology, Inc. | Officer/director | Not disclosed | Public company governance exposure |
Board Governance
- Committee assignments: Compensation Committee (member), Nominating Committee (member), Audit Committee (member) .
- Audit Committee composition: Kornelsen and Patrick W. Pace, M.D.; both designated “audit committee financial experts” and independent under SEC rules .
- Compensation Committee composition: Kornelsen and Robert H. Fries; administers option plans and executive pay; one meeting in FY2025 .
- Nominating Committee composition: Fries, Kornelsen, Pace; one meeting in FY2025 .
- Independence: Board determined Kornelsen qualifies as independent under NYSE standards .
- Attendance and engagement: Each director attended at least 75% of board/committee meetings in FY2025; board met 1x in person and 3x telephonically; Audit met 4x; Compensation 1x; Nominating 1x; all directors attended 2024 annual meeting .
- Board leadership: No Chairman of the Board; three of four directors are independent; all board committees are fully independent .
Fixed Compensation
| Component | FY 2024 Amount | Notes |
|---|---|---|
| Quarterly retainer | $1,250 | Independent directors paid $1,250 per quarter |
| Annual retainers (cash) | $5,000 | Vern D. Kornelsen cash fees |
| Meeting fees | Not disclosed | No specific meeting fees disclosed |
| Committee membership/chair fees | Not disclosed | No separate committee or chair fees disclosed |
Performance Compensation
| Equity Component | FY 2024 Value ($) | Notes |
|---|---|---|
| Equity compensation (fair value) | $2,943 | Grant date fair value per ASC 718 |
| Equity compensation (alt. disclosure) | $6,742 | FY2024 value per prior proxy; variance vs 2025 proxy |
| Grant type | Options/RSUs at Board discretion | Discretionary grants; no performance metric framework disclosed |
Disclosure variance: FY2024 equity comp for Kornelsen appears as $2,943 in 2025 proxy vs $6,742 in 2024 proxy; company attributes valuation to ASC 718; rationale for variance not explained—monitor for consistency in future filings .
Performance Metric Framework (Directors)
| Metric | Definition | Weight/Threshold | Status |
|---|---|---|---|
| None disclosed | No stated performance metrics governing director equity or cash fees | N/A | Grants at discretion of Board; no metric-based plan disclosed |
Other Directorships & Interlocks
| Entity | Type | Relationship | Conflict Consideration |
|---|---|---|---|
| CMED Partners LLLP | Investment partnership | Kornelsen is General Partner; holder of 3,280,470 ECIA shares | Significant influence; potential conflict on committees (Compensation/Audit) despite NYSE independence |
| Lifeloc Technologies, Inc. | Public company | Kornelsen is controlling stockholder | Outside influence; monitor for related-party dealings (none disclosed at ECIA) |
| Electronic Systems Technology, Inc. | Public company | Officer/director | Outside roles; no ECIA transaction disclosed |
Expertise & Qualifications
- CPA background (former Colorado CPA); designated audit committee financial expert .
- Investment and finance expertise (general partner of two investment partnerships since 1990/1997) .
- Education: B.S., Business, University of Kansas .
- Governance: Long-tenured ECIA director; experience across private and public boards .
Equity Ownership
| Holder | Shares Beneficially Owned | % of Class | Vested Options (within 60 days) | Notes |
|---|---|---|---|---|
| Vern D. Kornelsen | 3,340,081 | 27.99% | 59,611 | Includes 3,280,470 shares held by CMED Partners LLLP (indirect beneficial ownership) |
| CMED Partners LLLP | 3,280,470 | 27.62% | — | Kornelsen is GP; interlock with board member |
Outstanding Director Options (FY-end 2024)
| Director | Exercisable Options (#) | Unexercisable Options (#) |
|---|---|---|
| Vern D. Kornelsen | 63,056 | 21,944 |
Trading, Pledging, Hedging Policy and Plans
- Insider trading policy prohibits derivative transactions by directors and officers; addresses risks of pledging and margin accounts; no disclosure of Kornelsen pledging or hedging .
- Rule 10b5-1 plans: None in effect for directors/officers during FY2025 .
Insider Compliance & Filings
| Person | Late Section 16 Filings (FY2025) |
|---|---|
| Vern D. Kornelsen | 2 late Forms 4 |
Governance Assessment
- Committee effectiveness: Kornelsen’s financial expertise strengthens Audit oversight; both Audit members are designated financial experts and independent. However, his dual role as General Partner of the largest shareholder (CMED) while serving on Compensation and Audit committees introduces perceived conflict risk despite formal independence—a key area to monitor in sensitive votes or related-party matters .
- Independence and engagement: Board classifies him independent; attendance exceeded 75% with regular audit engagement (four telephonic meetings with auditors), suggesting baseline engagement at age 92; succession planning for board refresh should be assessed given tenure and age .
- Pay and alignment: Director cash fees are modest ($1,250/quarter), with discretionary equity awards; absence of metric-based director pay reduces pay-for-performance alignment at the board level; a disclosure variance on FY2024 equity value warrants attention for reporting consistency .
- Related-party exposure: No ECIA transactions with CMED disclosed; related-party payments were made to Fries-controlled entity for consulting ($40,727 FY2025; $32,032 FY2024), which were disclosed; Kornelsen’s large ownership is alignment-positive but can create influence concentration; keep focus on committee decisions where shareholder interests may diverge .
- RED FLAGS:
- Concentrated ownership/committee roles: Major shareholder representative on Audit and Compensation committees—heightened conflict sensitivity even if compliant with independence rules .
- Section 16 compliance lapses: Two late Forms 4—minor but watch for recurrence .
- Disclosure inconsistency: FY2024 director equity comp for Kornelsen differs between 2024 and 2025 proxies ($6,742 vs $2,943) without explanatory reconciliation .