Eric N. Smit
EGAINAbout Eric N. Smit
Eric N. Smit, age 63, has served as eGain’s Chief Financial Officer since August 2002 after prior finance and operations roles at eGain (1998–2002), WhoWhere? Inc. (1996–1998), and Velocity Incorporated (1993–1996). He holds a Bachelor of Commerce in Accounting from Rhodes University, South Africa . Company performance under recent periods shows revenue declining from $98.0M in FY2023 to $88.4M in FY2025*, with EBITDA rising in FY2024 and moderating in FY2025*, while TSR (value of a fixed $100 investment) improved to $64 in FY2025 from $55 in FY2024 * .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| eGain | Director of Finance | Jun 1998–Jun 1999 | Not disclosed |
| eGain | VP, Finance & Administration | Jun 1999–Apr 2001 | Not disclosed |
| eGain | VP, Operations | Apr 2001–Jul 2002 | Not disclosed |
| eGain | Chief Financial Officer | Aug 2002–Present | Not disclosed |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| WhoWhere? Inc. | Director of Finance | Dec 1996–May 1998 | Not disclosed |
| Velocity Incorporated | VP Operations & CFO | Apr 1993–Nov 1996 | Not disclosed |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Base Salary ($) | 320,000 | 320,000 | 320,000 | 320,000 |
| Target Bonus ($) | Not disclosed | Not disclosed | Not disclosed | 78,000 (derived: severance table shows 50% of target = $39,000) |
| Actual Bonus Paid ($) | 90,000 | 110,500 | 97,500 | 78,000 |
| All Other Comp ($) | 4,460 | 4,793 | 4,800 | 4,800 |
| Total Compensation ($) | 999,474 | 779,984 | 606,633 | 523,222 |
Notes:
- Base salary unchanged FY2024→FY2025; 2025 base salary confirmed as of June 30, 2025 .
- Target bonus percentage for FY2025 implied at ~24.4% of salary (78,000 ÷ 320,000) based on disclosed severance components .
Performance Compensation
- Plan structure: Non-equity incentive plan tied to financial metrics (new ARR bookings, revenues, operating income, cash flow, cash balances, DSO) and operational metrics (customer satisfaction/retention, efficiencies, product delivery/quality). For FY2025, 50% of the non-equity incentive plan target for each executive was tied to Company performance; commission plan targets included total revenue, SaaS revenue, SaaS ARR, and professional services invoiced .
- Clawback: Adopted October 2, 2023; recoupment of excess incentive compensation linked to financial reporting metrics for the prior three fiscal years per Nasdaq Rule 10D-1 .
| Metric Category | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Company performance (financial/operational) | 50% of non-equity incentive target (FY2025) | Not disclosed | Not disclosed | Cash incentive paid $78,000 (FY2025) | N/A |
| Commission plan (revenue/SaaS metrics) | Not disclosed | Total revenue, SaaS revenue, SaaS ARR, professional services invoiced | Not disclosed | Included in incentive outcomes | N/A |
Equity Ownership & Alignment
| Date | Beneficial Ownership (Shares) | Ownership (%) | Options Exercisable within 60 Days | Shares Pledged |
|---|---|---|---|---|
| Oct 21, 2024 | 317,187 | 1.1% (of 28,521,870) | 188,000 | Not disclosed; insider policy prohibits margin accounts and pledged securities |
| Oct 13, 2025 | 358,187 | 1.3% (of 27,019,335) | 229,000 | Not disclosed; hedging/derivatives prohibited |
Stock ownership guidelines: Not disclosed.
Outstanding Equity Awards (as of June 30, 2025)
| Grant Date | Type | Exercisable | Unexercisable | Exercise Price ($) | Expiration | Vesting Schedule |
|---|---|---|---|---|---|---|
| 9/19/2017 | Stock Option | 58,000 | — | 2.50 | 9/19/2027 | Equal monthly over 4 years; subject to CIC acceleration |
| 9/1/2021 | Stock Option | 150,000 | 10,000 | 11.36 | 9/1/2031 | Equal monthly over 4 years; subject to CIC acceleration |
| 12/9/2024 | Stock Option | — | 26,000 | 5.71 | 12/9/2034 | Vests on Nov 15, 2025 (single-date) |
Vesting context (FY2024 year-end): RSUs were outstanding as of June 30, 2024 (Smit: 1,461 RSUs; market value $9,219) but by FY2025 year-end executives held only stock options .
In-the-Money Option Value (illustrative, using $6.25 close on 6/30/2025 per CIC table)
| Grant | Shares | Strike ($) | ITM per Share ($) | Approx. ITM Value ($) |
|---|---|---|---|---|
| 2017 Option | 58,000 | 2.50 | 3.75 (6.25–2.50) | 217,500 (58,000×3.75) |
| 2021 Option (exercisable) | 150,000 | 11.36 | 0.00 (OTM at $6.25) | 0 |
| 2024 Option (unexercisable) | 26,000 | 5.71 | 0.54 (6.25–5.71) | 14,040 (26,000×0.54) |
Note: Illustrative values use disclosed $6.25 closing price on 6/30/2025 from CIC modeling ; actual realizable values depend on market price at exercise.
Employment Terms
| Term | Provision |
|---|---|
| Change-in-control (CIC) & Severance | Double-trigger: if terminated without cause or resigns for good reason within 12 months post-CIC, lump sum equal to 6 months base salary + 50% of target bonus; 6 months accelerated vesting of equity; COBRA reimbursement up to 6 months; 280G cutback for excise tax mitigation . |
| Severance eligibility | Named executive officers are not entitled to severance absent a CIC (no regular severance program) . |
| Hypothetical CIC payout (as of 6/30/2025 at $6.25/share) | Salary $160,000; Non-equity incentive plan compensation $39,000; Equity incentive plan compensation $20,056; All other compensation $8,226; Total $227,282 |
| Contract term | Standard form agreement initially two years; auto-renews for one-year periods unless 60-day non-renewal notice; term extends one year from CIC . |
| Clawback policy | Adopted Oct 2, 2023; recoupment of excess incentive compensation tied to financial reporting measures for the prior three years . |
| Insider trading policy | Pre-clearance required; earnings blackout starting 10th day of fiscal quarter-end month until one full trading day after earnings release; approved 10b5-1 plans permitted; prohibition on short sales, options/derivatives, hedging, margin accounts and pledged securities . |
| Deferred compensation/Pension | No non-qualified deferred comp; no defined benefit pension; 401(k) match equal to 50% up to 6% of compensation (FY2025) . |
Company Performance (Context for Pay-for-Performance)
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Revenues ($) | 98,011,000 * | 92,803,000 * | 88,431,000 * |
| EBITDA ($) | 1,879,000* | 6,358,000* | 4,773,000* |
| Net Income ($000s) | 2,109 | 7,780 | 32,254 |
| TSR – $100 initial investment (value) | 65 | 55 | 64 |
Values marked with an asterisk were retrieved from S&P Global.
Compensation Structure Analysis
- Mix and trend: Base salary flat at $320,000 FY2024→FY2025; total compensation declined 13.7% YoY (606,633→523,222) with lower option grant expense and lower cash incentives . Stock awards were minimal ($3,570 in FY2025 vs $6,028 in FY2024), reflecting an options-heavy equity mix .
- Pay-for-performance: FY2025 cash bonus paid $78,000 alongside improved net income ($32.3M) and TSR recovery vs FY2024; plan design ties 50% of incentive target to company performance metrics (ARR, revenue, operating income, etc.) .
- Equity design: Options vest monthly over four years (2017/2021 grants) and single-date vest for the 12/9/2024 grant (11/15/2025), creating potential selling windows subject to blackout and pre-clearance .
Risk Indicators & Red Flags
- Hedging/pledging: Company policy prohibits hedging/derivatives; margin accounts and pledged securities are identified as prohibited transactions in the insider policy .
- Tax gross-ups: No 280G or 4999 excise tax gross-ups; CIC agreement includes a cutback provision for optimal after-tax outcome .
- Clawback: Robust NASDAQ Rule 10D-1-compliant clawback adopted Oct 2, 2023 .
Equity Ownership & Alignment Details
| Aspect | Detail |
|---|---|
| Beneficial stake | 358,187 shares (1.3%) as of Oct 13, 2025; includes 229,000 options exercisable within 60 days . |
| Ownership change | Increased from 317,187 (1.1%) as of Oct 21, 2024, with 188,000 options exercisable . |
| Stock ownership guidelines | Not disclosed. |
| Trading discipline | Mandatory pre-clearance and blackout windows; approved 10b5-1 plans permitted . |
Investment Implications
- Alignment: Smit’s equity is primarily in stock options with meaningful in-the-money exposure to the $2.50 strike grant and modest exposure to the $5.71 grant; anti-hedging and anti-pledging policies support alignment and reduce leverage risks .
- Retention and CIC economics: CIC severance is modest (0.5× salary + 0.5× target bonus, 6 months vest acceleration), indicating moderate retention support without outsized parachute risk; no tax gross-ups .
- Near-term selling pressure: The 12/9/2024 option grant vests on Nov 15, 2025, creating a potential liquidity window, though actual sales remain subject to trading blackouts, pre-clearance, and any 10b5-1 plans .
- Pay-performance context: FY2025 bonus aligned with improved net income and TSR recovery; total compensation declined YoY amid lower option values, consistent with a restrained pay philosophy tied to performance .