Matthew Horwath
About Matthew Horwath
Matthew Horwath is Senior Vice President and Chief Financial Officer at FARO, appointed January 16, 2024; he joined FARO in May 2017, served as VP of Finance from July 2021 to January 2024, and previously led financial reporting, technical accounting and tax. He is 41, a licensed CPA in Florida, and holds a Master of Accountancy (University of North Florida) and BBA in Accounting (University of Central Florida) . Company performance in 2024 under the current leadership team showed Adjusted EBITDA of $39.6M (+$36.9M YoY), non-GAAP gross margin +800 bps, EBITDA margin +1,100 bps, $31M cash from operations, and capital returns including $10M buybacks at $16.99 average and $3M of convertible debt repurchases at ~88% of par, exiting with $98.7M cash and $72.3M debt (net cash $16.4M) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| FARO Technologies | SVP & CFO | Appointed Jan 16, 2024 | Responsible for finance leadership; eligible for Executive Severance Plan . |
| FARO Technologies | VP Finance | Jul 2021 – Jan 2024 | Led financial reporting, technical accounting, tax . |
| FARO Technologies | Finance leadership | May 2017 – Jul 2021 | Joined FARO; progressed through finance roles . |
| Ernst & Young LLP | Public accounting | Not disclosed | Audit and accounting experience . |
| Winn-Dixie Stores, Inc. | Corporate accounting | Not disclosed | Corporate accounting roles . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | No public company directorships or external board roles disclosed for Horwath . |
Fixed Compensation
| Component | 2024 | Notes |
|---|---|---|
| Base Salary | $385,000 target; $376,864 paid | Base reset upon CFO appointment; positioned 25th–50th percentile of market . |
| Target Bonus (% of Salary) | 65% | STIP target; based on year-end salary . |
| Actual STIP Paid | $182,683 | Company multiplier 73% applied to target; payout based on 2024 performance . |
| Other Cash Bonus | $60,000 | One-time bonus shown in 2024 compensation . |
Performance Compensation
2024 Short-Term Incentive Plan (STIP)
| STIP Metric | Threshold ($M) | Target ($M) | Maximum ($M) | Actual ($M) | Weight | Payout Multiplier |
|---|---|---|---|---|---|---|
| Revenue | 350.0 | 370.0 | 400.0 | 342.4 | 33.3% | 0% |
| Management Free Cash Flow | 21.0 | 34.0 | 50.5 | 35.3 | 33.3% | 108% |
| Pre-STIP Adjusted EBITDA | 29.0 | 42.0 | 61.5 | 44.1 | 33.3% | 111% |
| Company Multiplier | — | — | Cap 200% | — | — | 73% |
| Executive Target and Payout | Value |
|---|---|
| Horwath Target Award (65% of Salary) | $250,250 |
| 2024 Payout Multiplier | 73% |
| Horwath STIP Paid | $182,683 |
2024 Long-Term Incentive Plan (LTIP) Design and PRSU Metric
| Metric | Weighting | Target Definition | Payout Curve |
|---|---|---|---|
| Time-based RSUs (TRSUs) | 40% | 3-year ratable vesting; retention | N/A |
| Performance RSUs (PRSUs) | 60% | 3-year Relative TSR vs Russell 2000 (2024 grants) | 25th pct = 25%; 55th pct = 100%; 80th pct = 200% if TSR positive; capped at 100% if TSR negative . |
2024 Equity Grants (Horwath)
| Grant Date | TRSUs (#) | PRSUs (#) | Vesting |
|---|---|---|---|
| Mar 1, 2024 | 14,382 | 21,573 | TRSUs vest 1/3 annually starting Mar 1, 2025 ; PRSUs cliff vest Mar 1, 2027, subject to Relative TSR . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 10,977 shares; <1% of outstanding (19,225,837 shares as of Mar 21, 2025) . |
| Stock Ownership Guidelines | CEO 6× salary; other executive officers 3× salary; phase-in over 5 years; as of Dec 31, 2024 executives were in compliance or within phase-in . |
| Hedging/Pledging | Prohibited; no shares pledged by directors or executive officers . |
| Options | None outstanding for executive officers . |
Outstanding Awards at 12/31/2024 (Horwath)
| Type | Units (#) | Market Value ($) |
|---|---|---|
| TRSUs (2019–2024 grants in aggregate instances) | 655 | $16,611 |
| TRSUs | 2,830 | $71,769 |
| TRSUs | 5,264 | $133,495 |
| TRSUs | 14,382 | $364,728 |
| PRSUs | 655 | $16,611 |
| PRSUs | 1,415 | $35,884 |
| PRSUs | 21,573 | $547,091 |
Notes: Market value based on $25.36 closing price on Dec 31, 2024 . TRSU vesting schedules begin Mar 14, 2023; Mar 1, 2024; Dec 1, 2024; Mar 1, 2025 respectively . PRSUs vest Mar 14, 2025; Mar 1, 2026; Mar 1, 2027 subject to performance .
2024 Stock Vesting Activity
| Shares Vested | Value Realized |
|---|---|
| 5,745 | $136,599 |
Employment Terms
| Provision | Terms |
|---|---|
| Severance Plan Eligibility | Participant in FARO Key Executive Change in Control and Severance Plan . |
| CIC Termination (Double Trigger) | Cash: $635,250; Health benefits: $32,429; Equity acceleration: $1,186,189; Total: $1,853,868 (assumes PRSUs at target; value at $25.36) . |
| Non-CIC Termination (without cause or for good reason) | Cash: $385,000 (base); Health benefits: $32,429; Total: $417,429 . |
| CIC without Termination | Equity acceleration: $1,186,189 . |
| Death Benefit | $750,000 (3× salary capped per Life Insurance Plan) . |
| Disability Benefit | $180,000 (one year of disability benefits) . |
| Triggers and Vesting | No single-trigger equity acceleration; PRSUs earned based on actual achievement through CIC with pro-rata vesting and full vesting upon qualifying termination within 12 months after CIC . |
| Clawback | Compensation Recovery Policy effective Dec 1, 2023; recovery of incentive-based comp upon accounting restatement per SEC/Nasdaq rules . |
| Insider Trading Policy | Prohibits hedging, short sales, margin, pledging; none pledged by executives . |
Compensation Structure Notes and Governance
- CFO compensation aligned to market: base reset to $385,000 with target bonus 65% and $800,000 target RSU grant split 60% PRSU/40% TRSU upon promotion .
- Pay-for-performance emphasis: 2024 equity mix 60% PRSUs with Relative TSR vs Russell 2000; STIP metrics tied to Revenue, Pre-STIP Adjusted EBITDA, and Management Free Cash Flow; payout capped at 200% .
- Say-on-Pay support: 93% approval in 2024; program maintained with minor refinements .
- Independent TDCC/consultant: Compensia engaged; peer group benchmarking across tech/industrial comparables .
Risk Indicators & Related Parties
- Related party transactions: None exceeding $120,000 in 2024; policy mandates Audit Committee review/approval for such transactions .
- Section 16 compliance: Directors/executives timely filed for 2024; one late Form 4 for a director, not Horwath .
- No repricing of underwater options; no options outstanding for executives .
Investment Implications
- Alignment: Heavy PRSU weighting tied to Relative TSR means Horwath’s realized equity value is directly linked to FARO’s stock performance vs Russell 2000; negative absolute TSR caps PRSU payouts at 100%, curbing windfall risk .
- Retention and selling pressure: Multi-year TRSU/PRSU vesting (key dates Mar 2025/2026/2027) supports retention; 2024 vesting was modest (5,745 shares with tax withholding), limiting near-term selling pressure . Upcoming TRSU tranches begin Mar 1, 2025 and Dec 1 annually thereafter; monitoring Form 4s around these dates is prudent .
- Change-of-control economics: Double-trigger design and meaningful equity acceleration ($1.19M intrinsic value at $25.36) create balanced retention and potential dilution considerations in a transaction; no single-trigger accelerations reduce deal-risk optics .
- Governance quality: Strong say-on-pay support, clawback adoption, prohibition on hedging/pledging, and absence of related party transactions indicate low governance red flags and better alignment with shareholder interests .