Michael Mancini
Energy RecoveryAbout Michael Mancini
Michael S. Mancini (age 44) became Chief Financial Officer of Energy Recovery on August 5, 2024, following CFO roles at Astranis and Aerion and earlier private equity/hedge fund investing; he holds a bachelor’s in finance and economics from Boston College . In 2024, ERII delivered record revenue of $144.9M, net income of $23.1M, healthy gross margin of 66.9%, and one- and three-year TSR of (28%) and 8%, respectively; Mancini’s AIP metrics were revenue attainment 74% and adjusted operating income attainment 104% (total 89% of target) . His compensation is built for pay-for-performance with a 60% target bonus, a leveraged sign-on stock option grant, and participation in double-trigger CIC and standard severance plans .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Astranis Space Technologies Corp. | Chief Financial Officer | 4 years | Instrumental in long-term strategy and execution to guide profitable growth |
| Aerion Supersonic | CFO & EVP Strategy | N/D | Built finance/accounting organization; crafted multibillion-dollar financing strategy; led partnerships with global aerospace firms |
| Private equity and hedge fund | Investor | N/D | Deployed capital in growth-stage and value-based strategies |
External Roles
- No public company directorships or external board roles disclosed .
Fixed Compensation
| Metric | 2024 |
|---|---|
| Annualized Base Salary ($) | $400,000 |
| Target Bonus (%) | 60% |
| Actual AIP Bonus Paid ($) | $86,681 (prorated for start date) |
| Salary Actually Paid ($) | $146,154 (Aug 5–Dec 31, 2024) |
| All Other Compensation ($) | $17,578 (Insurance $6,555; 401(k) match $10,350; Other $673) |
Performance Compensation
Annual Incentive Plan (AIP) — 2024
| Metric | Weight (%) | Target | Actual Achievement (%) | Payout Factor (%) | Payout ($) |
|---|---|---|---|---|---|
| Revenue | 50 | Board-established target (sliding scale) | 74 | Incorporated in total attainment | |
| Adjusted Operating Income | 50 | Board-established target (sliding scale) | 104 | Incorporated in total attainment | |
| Total | 100 | 89 | 89 | $86,681 |
Notes:
- Sliding scales for CEO financial MBOs were 0–150% based on revenue and adjusted operating income attainment; other NEOs, including CFO, had analogous two-metric structures for 2024 .
Equity Awards — 2024
| Grant Date | Type | Shares (#) | Grant Date Fair Value ($) | Exercise/Share Price ($) | Vesting | Expiration |
|---|---|---|---|---|---|---|
| Aug 5, 2024 | Stock Option | 229,322 | $1,499,995 | $16.03 (exercise price) | 25% at 1-year, then 1/36 monthly over 36 months | Aug 5, 2034 |
- Offer letter committed a sign-on stock option grant with $1.5M fair value, vesting 25% at one year and monthly thereafter; eligible for annual LTI grants (options/RSUs/PSUs) at Compensation Committee discretion .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of Apr 7, 2025) | 0 shares; less than 0.1% of class |
| Options — Exercisable vs Unexercisable | Exercisable: 0; Unexercisable: 229,322 |
| RSUs — Unvested | None |
| Stock Ownership Guidelines | Executives must hold shares equal to 2× base salary; five-year window from appointment; all covered executives are in compliance or on pace |
| Hedging/Pledging | Prohibited under Insider Trading Policy |
Vesting schedule watchpoints:
- First cliff vest for CFO option grant occurs one year post grant (Aug 5, 2025), with monthly vesting thereafter, a typical period of potential selling pressure if in-the-money and trading windows permit .
Employment Terms
| Term | Key Provisions |
|---|---|
| Employment Status | At-will; report to CEO; HQ San Leandro, CA |
| Start Date | August 5, 2024 |
| Base Salary | $400,000 |
| Annual Incentive Plan | Up to 60% of base salary; prorated in 2024 |
| Sign-on Equity | Stock option with $1,500,000 fair value; 25% at 1-year then monthly vesting; exercise price = NASDAQ close on grant date |
| Long-Term Incentives | Eligible annually for options, RSUs, PSUs at Committee discretion |
| Change-in-Control (CIC) Plan | Double trigger; 12 months base salary + 100% target bonus; immediate vesting of 100% unvested equity on qualifying termination; Company-paid COBRA up to 12 months; up to $10,000 outplacement; “better after-tax” provision; no excise tax gross-ups |
| Severance Plan | Qualifying termination: 6 months base salary; 25% vesting of unvested equity; Company-paid COBRA up to 6 months; option exercise window extended to 6 months |
| Clawback | Amended and restated July 2023 in compliance with Dodd-Frank; recovery of erroneously awarded compensation after restatement |
Potential Payments (Hypothetical as of Dec 31, 2024)
| Scenario | Lump-Sum Cash ($) | Equity Vesting ($) | COBRA ($) | Outplacement ($) |
|---|---|---|---|---|
| CIC Termination (Double Trigger) | $640,000 (12 months base + 100% target bonus) | — (option out-of-the-money at $14.70 vs $16.03 exercise) | $45,699 | $10,000 |
| Severance (Non-CIC Qualifying Termination) | $200,000 (6 months base) | — (same pricing dynamic) | $22,850 | — |
Investment Implications
- Pay-for-performance alignment: CFO’s 2024 bonus was tied solely to revenue and adjusted operating income (89% attainment), and his sign-on equity is a leveraged stock option, aligning upside to TSR and operating execution; ERII plans to introduce performance-based equity awards starting 2025, further tightening alignment .
- Retention risk and selling pressure: First option vest occurs Aug 5, 2025 with ongoing monthly vesting thereafter; monitor Form 4 activity around vest dates and trading windows, particularly if shares are above the $16.03 strike price .
- Governance and downside protection: Double-trigger CIC (no tax gross-ups), standard severance, rigorous clawback, and prohibition on hedging/pledging reduce misalignment and governance risk; executive ownership guidelines (2× salary, 5-year window) support longer-term alignment .
- Performance context: 2024 delivered record revenue and strong margins, but one-year TSR was negative; AIP outcomes emphasized revenue and adjusted operating income, consistent with ERII’s stated focus on operating efficiency and growth milestones across wastewater and CO2 businesses .
No related-party transactions or conflicts were disclosed for Mancini’s appointment; employment is at-will and compensation decisions are overseen by an independent Compensation Committee with an independent consultant (Compensia) and strong say-on-pay support (89.3% in 2024) .