David Moon
Energy RecoveryAbout David Moon
David W. Moon, age 63, is President & CEO of Energy Recovery (appointed January 16, 2024; interim CEO from October 23, 2023) and has served on the Board since July 2023; he holds a B.S. in Civil Engineering and an MBA from Texas A&M University . Under Moon’s leadership, ERII delivered record 2024 revenue of $144.9M (+13% YoY), 66.9% gross margin, and $23.1M net income; one-year TSR was -28% and three-year TSR +8% . In 2025, Moon reiterated guidance and announced share repurchase authorizations totaling $105M over 10 months, targeting over 10% of shares outstanding, signaling confidence and potential support for the stock . The Board is led by an independent Chair, and Moon does not sit on Board committees, reducing dual‑role governance risk .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Carrier Commercial Refrigeration (Carrier Global) | President | 2020–2021 | Led a leading supplier of high‑efficiency CO2 turnkey refrigeration systems across EMEA/Asia, supporting ERII’s CO2 strategy . |
| Heatcraft Worldwide Refrigeration (Lennox International) | President & COO | 2006–2017 | Ran the global OEM leader in commercial refrigeration; deep operational and commercial refrigeration expertise . |
| Lennox International | Various management roles (US, Singapore, Australia) | 1998–2006 | Built multi‑geography operating leadership prior to Heatcraft COO role . |
| Allied Signal; Case Corporation; Tenneco Oil | Management roles (US, Hong Kong, Taiwan, Germany) | Not disclosed | Broad industrial experience across geographies, underpinning execution capabilities . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ares Management / CoolSys Inc. | Advisor on CoolSys acquisition; joined CoolSys Board post‑deal | Not disclosed | Exposure to U.S. commercial refrigeration/HVAC market leader; deal and board experience . |
| American Woodmark Corporation | Director | 2015–2020 | Public company board experience (manufacturing/consumer) . |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (%) | Actual Bonus Paid ($) | All Other Compensation ($) |
|---|---|---|---|---|
| 2024 | 568,385 | 100 | 338,542 | 238,725 (incl. $225,258 relocation/travel) |
| 2023 | 84,615 (interim CEO from Oct 23) | — | — | 618 |
Performance Compensation
2024 Annual Incentive Plan (AIP) – CEO Metrics and Outcomes
| Metric | Weight (%) | Target | Achievement (%) | Notes |
|---|---|---|---|---|
| Revenue | 35 | Company‑set (undisclosed) | 74 | Sliding scale from <90% to ≥110% achievement . |
| Adjusted Operating Income | 35 | Company‑set (undisclosed) | 104 | Non‑GAAP definition per proxy . |
| CO2 Market Penetration | 30 | Company‑set (undisclosed) | 0 | Reflects early stage commercialization. |
| Overall | 100 | — | 62 | AIP payout: $338,542 in 2025 . |
Executive pay mix: Up to 84% of CEO total direct compensation “at risk” (annual incentive + equity), reinforcing pay‑for‑performance .
2024 Equity Awards and Vesting
| Award Type | Grant Date | Shares/Options (#) | Grant‑Date Fair Value ($) | Strike Price ($) | Vesting Schedule | Expiration |
|---|---|---|---|---|---|---|
| Stock Options | 1/25/2024 | 194,785 | 1,299,995 | 16.16 | 25% at 1st anniversary; remainder monthly over 36 months | 1/25/2034 |
| RSUs | 1/25/2024 | 80,445 | 1,299,991 | — | 25% annually over 4 years | — |
Equity Ownership & Alignment
| Item | Amount | Detail |
|---|---|---|
| Shares owned directly/indirectly | 51,853 | Includes 32,750 held jointly with spouse . |
| Exercisable or vested within 60 days (as of 4/7/2025) | 56,812 | Beneficial ownership calculation per SEC rules . |
| Total beneficial ownership | 108,665 (0.2% of 54,756,113 shares) | Percentage based on record date share count . |
| Unvested RSUs | 80,445; $1,182,542 MV at $14.70 | Market value uses 12/31/2024 close . |
| Unexercisable options | 194,785 @ $16.16 | Out‑of‑the‑money at $14.70 on 12/31/2024 . |
| Ownership guidelines | CEO must hold 5× base salary; new execs have 5 years to comply; covered execs on pace/compliant . | |
| Hedging/pledging | Prohibited by Insider Trading Policy . |
Employment Terms
- At‑will employment; no guaranteed bonuses or annual equity awards .
- Clawback: Dodd‑Frank compliant plan amended July 2023; mandatory recovery upon restatement .
Severance Plan (non‑CIC)
| Benefit | Terms |
|---|---|
| Cash | 6 months base salary |
| Equity | Immediate vesting of 25% of unvested equity; option post‑termination exercise window extended to 6 months . |
| COBRA | Company‑paid up to 6 months (or until re‑employment eligibility) . |
Potential payments (hypothetical as of 12/31/2024):
| Item | Amount ($) |
|---|---|
| Lump‑Sum Cash (6 months base) | 285,000 |
| Equity vesting (25% of unvested) | 295,636 |
| COBRA | — |
Change‑in‑Control (CIC) Severance Plan (double trigger; within 18 months of CIC)
| Benefit | Terms |
|---|---|
| Cash | 12 months base salary + 100% of target annual bonus . |
| Equity | Immediate 100% vesting of unvested awards (performance vesting deemed at target) if not assumed; otherwise accelerates upon qualifying termination post‑CIC . |
| COBRA | Company‑paid up to 12 months (or until re‑employment eligibility) . |
| Outplacement | Up to $10,000 . |
| Auto‑renewal | Plan auto‑extends annually unless notice given (extended through 12/31/2025) . |
Potential payments (hypothetical as of 12/31/2024):
| Item | Amount ($) |
|---|---|
| Lump‑Sum Cash (12 months base + 100% target bonus) | 1,140,000 |
| Equity vesting (100% unvested) | 1,182,542 |
| COBRA | — |
| Outplacement | 10,000 |
Board Governance
- Board service: Director since July 2023; currently CEO and director; not on any Board committees .
- Committee independence: All Board committees are 100% independent; Board Chair is independent; 5 of 6 directors are independent .
- Attendance: In 2024, no director attended fewer than 88% of Board/committee meetings; independent directors meet in executive session at each regular meeting .
- Director compensation: As an employee, Moon receives no separate director cash/equity retainers .
- Governance safeguards: Prohibition on hedging/pledging; robust ownership guidelines; stringent clawback .
Performance Context and Track Record
- 2024 performance: Record revenue $144.9M (+13% YoY), gross margin 66.9%, net income $23.1M; operating cash flow $20.5M; one‑year TSR -28%, three‑year TSR +8% .
- Strategy under Moon: Reinforced desalination resilience and CO2 commercialization; reiterated 2025 guidance; restarted wastewater guidance; announced $105M aggregate share repurchase authorizations in 10 months, aiming to retire over 10% of shares .
- Pay‑versus‑performance: CEO CAP vs TSR shown in proxy; CAP $3.152M in 2024; Company TSR value of $150.15 on $100 base as of 2024 year end .
- Say‑on‑Pay: Strong shareholder support (89.3% “for” at 2024 meeting) .
Compensation Peer Group and Oversight
- Peer group used for 2024 decisions includes ACM Research, Aehr Test Systems, Ballard Power, Ambarella, Aspen Aerogels, Helios Technologies, Impinj, Middlesex Water, nLIGHT, Omega Flex, PROCEPT BioRobotics, Stem, TransMedics, etc.; median revenue ~$179M and median market cap ~$1.13B at assessment .
- Independent consultant (Compensia) supports design/benchmarking; no conflicts noted; annual risk assessment performed .
Equity Ownership & Director Compensation Guidelines
- Executive and director stock ownership guidelines: CEO 5× salary; non‑employee directors 5× annual cash retainer; new appointees have 5 years to comply; all covered persons compliant or on pace .
- Director annual compensation (for reference; not applicable to Moon): Cash retainer $50,000 and equity retainer $150,000; additional fees for Chair/committee roles; RSUs vest by 2025 annual meeting .
Employment & Contract Provisions
- CIC definitions (Cause, Good Reason, Change in Control) specified; no excise tax gross‑ups; “better after‑tax” reduction provision; Section 409A compliance .
- Severance Plan eligibility criteria and “Qualifying Termination” defined; non‑qualifying reasons detailed .
Investment Implications
- Pay-for-performance intact: 62% AIP achievement reflected CO2 commercialization miss, offset by AOI beat; payout aligned with outcomes, moderating cash vs base .
- Vesting overhang and selling pressure: RSUs vest 25% annually; predictable vesting windows may create periodic Form 4 supply; options struck at $16.16 were out-of-the-money at $14.70 on 12/31/2024, tempering near‑term exercise/selling pressure .
- Alignment safeguards: Strict prohibition on hedging/pledging and strong ownership guidelines reduce misalignment/pledging‑related risk .
- Retention economics: CIC (1× salary + 100% target bonus + full acceleration) and base severance (6 months + 25% acceleration) are market‑typical; adequate to retain talent without excessive costs .
- Governance quality: Independent Chair; CEO not on committees; executive sessions each meeting; strong Say‑on‑Pay support (89.3%); lowers governance and activism risk .
- Trading signals: $105M repurchase authorizations within ten months to retire >10% of shares enhances per‑share metrics and can offset equity grant dilution, supporting price during insider vesting cycles .