Tracy Daw
FunkoAbout Tracy Daw
Chief Legal Officer and Secretary of Funko, Inc. since March 2022; previously Senior Vice President and General Counsel of FAH, LLC since July 2016. Age 59; J.D. (University of Michigan Law School) and B.S. in Industrial and Labor Relations (Cornell University). Company performance context during his current tenure: 2024 cumulative TSR value 78.03 vs peer group 153.74, Net Sales $1,049.9 million and Net Income $(15.1) million, with semiannual bonus metrics anchored to Adjusted EBITDA, Net Sales and DTC Revenue; overall 2024 bonus payout was 56% of target .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| INRIX, Inc. | General Counsel | 2012–2016 | Led global legal affairs; focus on corporate and IP matters |
| RealNetworks, Inc. | Senior VP, Chief Legal Officer & Corporate Secretary | 2000–2012 | Managed global legal affairs and corporate development |
| Sidley Austin LLP | Attorney; Partner | 1990–2000 | Complex corporate legal practice; leadership as partner |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| None disclosed in company filings for Mr. Daw | — | — | — |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | 440,385 | 450,000 | 450,000 |
| Annualized Base Salary ($) | — | 450,000 | 465,000 |
| Target Bonus (%) | — | 75% | 75% |
| Maximum Bonus (%) | — | 150% | 150% |
| Actual Bonus Paid ($) | 166,465 | 168,750 | 195,794 |
Perquisites and benefits (2024): 401(k) match $13,800; group term life premiums $912 .
Performance Compensation
2024 Executive Incentive Plan (company-wide metrics; no individual component)
H1 2024
| Metric | Weighting | Threshold | Target | Maximum | Actual | Payout (% of Target) |
|---|---|---|---|---|---|---|
| Adjusted EBITDA ($MM) | 50% | 29 | 34 | 44 | 38 | 133% |
| Net Sales ($MM) | 25% | 413 | 486 | 632 | 463 | 83% |
| DTC Revenue ($MM) | 25% | 101 | 119 | 155 | 110 | 73% |
| Total Weighted Attainment | — | — | — | — | — | 106% |
H2 2024
| Metric | Weighting | Threshold | Target | Maximum | Actual | Payout (% of Target) |
|---|---|---|---|---|---|---|
| Adjusted EBITDA ($MM) | 50% | 60 | 70 | 91 | 57 | 0% |
| Net Sales ($MM) | 25% | 551 | 648 | 842 | 586 | 70% |
| DTC Revenue ($MM) | 25% | 146 | 172 | 224 | 150 | 57% |
| Total Weighted Attainment | — | — | — | — | — | 32% |
Overall 2024 payout: 56% of target for all NEOs; Mr. Daw’s cash incentive earned: $195,794 . Bonus curve: 0% below 85% of target; linear to 200% at ≥130% of target .
2024 Equity Grants (annual LTIs)
| Grant Type | Grant Date | Shares/Units | Exercise Price | Vesting | Grant Date FV ($) |
|---|---|---|---|---|---|
| Stock Options | 3/13/2024 | 125,900 | $6.37 | 25% at 1-year; then monthly over 36 months | 574,217 |
| RSUs | 3/13/2024 | 50,400 | — | 4 equal annual installments | 321,048 |
| RSUs (1-year) | 3/13/2024 | 15,000 | — | Vests in full on 1st anniversary | 95,550 |
Equity Ownership & Alignment
Beneficial ownership summary (as disclosed)
| Item | Amount |
|---|---|
| Class A common stock owned directly | 27,826 shares |
| FAH, LLC common units | 73,485 units |
| Vested options (exercisable) | 306,114 shares |
| Options vesting within 60 days | 7,250 shares |
Outstanding equity awards at FY-end (selected details for Mr. Daw)
| Grant Date | Instrument | Exercisable (#) | Unexercisable (#) | Exercise Price | Expiration | Unvested RSUs (#) | Unearned PSUs/Units (#) |
|---|---|---|---|---|---|---|---|
| 11/1/2017 | Options | 73,000 | — | 12.00 | 11/1/2027 | — | — |
| 6/27/2018 | Options | 72,890 | — | 11.71 | 6/27/2028 | — | — |
| 3/4/2019 | Options | 49,700 | — | 19.89 | 3/4/2029 | — | — |
| 4/29/2020 | Options | 14,650 | — | 4.01 | 4/29/2030 | — | — |
| 4/21/2021 | Options/RSUs | 28,691 | 2,609 | 19.91 | 4/21/2031 | 2,989 | — |
| 3/8/2022 | Options/RSUs/PSUs | 14,918 | 6,782 | 17.09 | 3/8/2032 | 8,686 | 8,685 |
| 3/6/2023 | Options/RSUs/PSUs | 11,550 | 14,850 | 9.77 | 3/6/2033 | 15,821 | 10,547 |
| 3/13/2024 | Options/RSUs | — | 125,900 | 6.37 | 3/13/2034 | 50,400 | — |
| 3/13/2024 | RSUs (1-year) | — | — | — | 12/31/2099 (placeholder) | 15,000 | — |
Ownership policies: Executives must hold a minimum value in shares equal to 1x annual base salary (5x for CEO; 5x annual retainer for non-employee directors); as of Dec 31, 2024 all executives and directors were either in compliance or on track. Hedging and pledging of Company stock are prohibited by policy .
Employment Terms
| Term | Detail |
|---|---|
| Agreement | Amended and restated employment agreement effective Nov 1, 2022 (entered Apr 19, 2023) |
| Role | Chief Legal Officer and Secretary |
| Initial Term | 3 years, with two automatic one-year extensions absent notice of non-extension |
| Base Salary | $450,000 (annual base) |
| Annual Bonus | Target 75% of base; subject to company and individual performance goals |
| Severance (No Cause/Good Reason) | 12 months base salary continuation; up to 12 months COBRA premium reimbursement; “Equity Acceleration” (time-based equity vesting that would occur in 12 months accelerates; performance equity per award terms) |
| Change in Control | If termination within 12 months post–change in control, time-based equity awards accelerate and vest in full |
| Death/Disability | Eligible for “Equity Acceleration” |
| Restrictive Covenants | 12-month non-compete; 24-month non-solicit; perpetual confidentiality; mutual non-disparagement |
| 280G/4999 Cutback | Payments reduced if it increases after-tax value vs paying excise tax |
| Clawback | Company maintains 2021 discretionary clawback and 2023 SEC/Nasdaq-compliant recovery policy for erroneously awarded incentive compensation |
| Insider Policy | Anti-hedging and anti-pledging; trading policy in place |
Compensation Structure Analysis
- Mix shifted toward time-based RSUs and options in 2024 for NEOs; Compensation Committee chose not to grant PSUs in 2024 due to leadership transition and forecasting uncertainty, emphasizing retention while keeping stock price alignment via options; annual equity mix targeted roughly 50% RSUs / 50% options for NEOs other than CEO and interim CEO .
- 2024 bonuses paid at 56% of target, reflecting below-threshold H2 Adjusted EBITDA and sub-target Net Sales/DTC performance; no discretionary increases, supporting pay-for-performance discipline .
- Discretionary bonus paid to Mr. Daw in 2022 of $7,500 for contributions related to TCG investment (context for compensation judgments) .
Say-on-Pay & Peer Group
- 2024 AGM say-on-pay on 2023 NEO compensation received over 99% approval, indicating strong shareholder support .
- Compensation benchmarking peer group includes consumer brands and adjacent companies (e.g., iRobot, Johnson Outdoors, Helen of Troy, Revolve Group, JAKKS Pacific, YETI Holdings, GoPro, Movado, SpinMaster, WWE, MSG Networks, Scholastic, Universal Electronics, Duluth Holdings, Stitch Fix) .
Risk Indicators & Governance Context
- Internal control material weaknesses disclosed for fiscal 2022 and 2023 (adverse opinions on ICFR), with remediation oversight by the Audit Committee; PwC engaged as auditor in 2024 .
- CEO transition 8-K dated July 7, 2025: Williams stepped down; Lunsford appointed Interim CEO; filed by Mr. Daw as CLO/Secretary, illustrating his ongoing governance role in leadership changes .
- Policies prohibit hedging/pledging; clawbacks in place; stock ownership guidelines enforced—mitigates misalignment and trading risk .
Investment Implications
- Alignment: Daw’s comp structure couples annual cash tied to Adj. EBITDA/Net Sales/DTC and substantial equity with standard vesting (options: 25% cliff then monthly; RSUs: annual tranches), aligning incentives with both near-term operating performance and long-term stock appreciation .
- Retention and selling pressure: Upcoming vesting milestones from 3/13/2024 grants (25% option vesting at 3/13/2025 and monthly thereafter; 50,400 RSUs vesting annually; 15,000 RSUs vesting in full at 3/13/2025) may create periodic liquidity windows; anti-hedging/pledging policy limits riskier practices .
- Change-of-control economics: Single/double-trigger mechanics via Equity Acceleration and full acceleration of time-based equity if terminated within 12 months post–change in control increase retention through strategic events while limiting excise tax exposure via 280G cutback .
- Execution risk: Prior ICFR weaknesses and leadership transitions heighten governance/execution risk; however, pay practices show restraint (no tax gross-ups, no option repricing without shareholder approval) and strong say-on-pay support, suggesting compensation governance credibility .