Timothy R. Damadian
About Timothy R. Damadian
Timothy R. Damadian (age 60) is Chairman of the Board (since September 7, 2022), President and Chief Executive Officer (since February 11, 2016), and Treasurer (since August 3, 2022) of FONAR; he began his FONAR career in 1985 and rose to Vice President of Operations before leaving in 2001, returning as a consultant in 2010 before becoming CEO in 2016 . Under fiscal 2024, FONAR generated $102.9M in revenue (+4.3% YoY), operating income of $16.5M (+11.8% YoY), and net income of $14.1M, with HMCA operating income rising from $20.7M to $23.5M; management attributes gains to higher scan volumes and SG&A efficiency . He exercises majority voting control via Class C shares held as trustee and also serves as both CEO and Chairman; FONAR is a “controlled company” under NASDAQ rules, and the Board has no standing compensation committee (lead independent director is Ronald G. Lehman) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| FONAR Corporation | Installer/Operations roles; ultimately VP of Operations | 1985–2001 | Deepened domain expertise across installation and operations ahead of later leadership roles . |
| Health Management Corporation of America (HMCA) | President (FONAR subsidiary) | Appointed 1997; served to 2001 | Built MRI facility management capabilities that underpin HMCA’s current growth engine . |
| FONAR Corporation | Independent Consultant | 2010–2016 | Focused on MRI facility management; precursor to CEO appointment . |
| FONAR Corporation | CEO & President; Chairman; Treasurer | CEO/President since 2016; Chairman since 2022; Treasurer since 2022 | Leads strategy and operations; consolidated leadership and voting control . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Integrity Healthcare Management, Inc. | Founder/Operator | 2001–2007; sold to Health Diagnostics, LLC in 2007 | Grew and exited an imaging management platform (NY/FL); relevant to HMCA’s model . |
| Health Diagnostics Management, LLC | Manager | Not specified | Ongoing governance/oversight at HMCA-managed entity level . |
| Billing company (former owner) | Former owner; IT services agreement to billing company | IT services at $23,884/mo effective 6/1/2017; terminated 5/31/2023 | Prior related-party service arrangement now terminated . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $0 | $0 | $0 |
| Cash Bonus ($) | $305,800 | $152,900 | $372,885 |
| Stock Awards ($) | $0 | $0 | $0 |
| Total Compensation ($) | $305,800 | $152,900 | $372,885 |
Observations:
- No pension/deferred compensation plans beyond a 401(k), and no option/SAR grants outstanding for the CEO in FY2024 .
- Compensation decisions are case-by-case without standardized formulas; no separate compensation committee; CEO participates in compensation deliberations, a governance risk .
Performance Compensation
| Incentive Type | FY 2022 | FY 2023 | FY 2024 | Target/Weighting | Vesting |
|---|---|---|---|---|---|
| Discretionary Cash Bonus ($) | $305,800 | $152,900 | $372,885 | Not disclosed; case-by-case, “pay-for-performance” posture; CEO not subject to general plan | Cash (no vesting) |
| Equity Awards (shares) | 0 | 0 | 0 | N/A | N/A |
| Options/SARs (granted) | 0 | 0 | 0 | N/A | N/A |
Notes:
- No explicit performance metrics, weights, or targets are disclosed for the CEO; bonuses appear discretionary and determined by management/Board without a comp committee .
Equity Ownership & Alignment
| Security/Class | Holder Capacity | Shares Beneficially Owned | Percent of Class | As Of |
|---|---|---|---|---|
| Class C Common (25 votes per share) | Trustee (FONAR Class C Trust) | 382,447 | 99.98% | Mar 24, 2025 |
| Class A Non-Voting Preferred | Trustee (same trust) | 19,093 | 6.09% | Mar 24, 2025 |
| Common Stock | Personal | 79,032 | 1.24% | Mar 24, 2025 |
| Class A Non-Voting Preferred | Personal | 800 | 0.26% | Mar 24, 2025 |
Additional alignment factors:
- FONAR is a “controlled company” because Timothy R. Damadian, as trustee and individually, controls more than 50% of voting power; multi-class structure magnifies voting control .
- No outstanding options or RSUs; therefore, no vesting-driven selling pressure from equity awards; CEO had no options/SARs at FY2024 year-end .
- During the fiscal quarter ended June 30, 2024, no Rule 10b5-1 trading plans were adopted or terminated by directors or executive officers; no hedging/pledging disclosure was found in the proxy .
Employment Terms
- Employment agreement, term, auto-renewal: Not disclosed for the CEO in the proxy .
- Severance/change-of-control: Not disclosed; no golden parachute or multiplier terms described in the proxy .
- Non-compete / non-solicit / garden leave / post-termination consulting: Not disclosed for the CEO .
- Clawback policy: Company lists a Policy for the Recovery of Erroneously Awarded Compensation adopted pursuant to SEC Rule 10D-1 (Exhibit 97.1) .
- Pension/SERP/Deferred comp: Company maintains no pension or deferred compensation plans except a 401(k) .
Board Governance & Service (including dual-role implications)
- Roles: Chairman since Sept 7, 2022; CEO/President since Feb 11, 2016; Treasurer since Aug 3, 2022; receives no director compensation .
- Board structure: Controlled company; no standing compensation or nominating committee; Audit Committee only (all independent: Lehman, Turk, Maher) .
- Lead Independent Director: None formally designated; Ronald G. Lehman effectively functions as lead independent and chairs the Audit Committee .
- Independence: Majority of board is independent (Lehman, Turk, Maher) .
- Meetings: Board and Audit Committee each met four times in FY2024 .
Director Compensation (context)
| Director | Fees Earned/Paid in Cash ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|
| Claudette J.V. Chan | 20,000 | 38,880 | 58,880 |
| Ronald G. Lehman | 20,000 | 60,000 | 80,000 |
| Richard E. Turk | 20,000 | 15,000 | 35,000 |
| Jessica Maher | 20,000 | 15,000 | 35,000 |
Note: Timothy R. Damadian receives no compensation for serving on the Board .
Related Party Transactions (governance red flags)
| Counterparty/Relationship | Nature | FY2024 Amounts/Terms |
|---|---|---|
| CEO-owned imaging facilities in Florida | HMCA management agreements; fixed monthly fees $245,535–$411,589; renegotiable annually; ~11.6% of total revenues derived from these contracts in FY2024 | ~$11.9M HMCA net revenues FY2024 (also $11.9M FY2023; $11.6M FY2022) . |
| Magnetic Resonance Management, LLC (CEO-owned) | Equipment sale on 12/1/2023 note; selling price $567,857; 9% interest; due Dec 2028; Company recognized $576,857 gain; option (not obligation) to retake equipment at maturity in lieu of payment | $567,857 note; 9% interest; gain $576,857 . |
| Bensonhurst MRI Limited Partnership (CEO interest) | Service/maintenance agreements: $110,000 (Upright MRI) + $70,000 (High-Field) per annum; reimbursable salaries/marketing charged $190,362 in FY2024 | $180,000 annual service fees + $190,362 pass-throughs in FY2024 . |
| Billing company (former CEO ownership) | IT services $23,884/month from 6/1/2017; terminated 5/31/2023 | Terminated; no FY2024 run-rate . |
| Radian Healthcare Management, LLC (owned by CEO’s son-in-law) | Recruitment of 32 employees | ~ $200,000 fees in FY2024 . |
Performance & Track Record
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Total Revenues ($) | 98,645,101 | 102,884,089 |
| Operating Income ($) | 14,789,262 | 16,535,364 |
| Net Income ($) | 12,126,516 | 14,097,417 |
| HMCA Operating Income ($) | 20,664,388 | 23,493,376 |
Management commentary highlights HMCA scan volume growth, 4.3% revenue growth, and SG&A efficiency (–8.6% YoY), with 11.6% of total revenues from CEO-owned facility contracts in FY2024 .
Compensation Structure Analysis (alignment vs. risk)
- CEO compensation is heavily variable and cash-based, with base salary of $0 and discretionary bonuses (no disclosed metrics/targets/weights), and no equity awards or options in FY2022–FY2024; this minimizes dilution but weakens transparency of pay-for-performance linkages .
- Absence of a compensation committee and CEO participation in pay decisions is an investor governance concern, especially given controlled-company status and dual CEO/Chairman role .
- Clawback policy exists pursuant to SEC Rule 10D-1, but the proxy does not detail triggers beyond the standard policy listing .
Say‑on‑Pay & Shareholder Feedback
- Advisory vote on executive compensation is held annually; Board recommends “FOR”; results are non-binding and the Board will consider outcomes in future program evaluations (no historical percentages disclosed in the proxy) .
Risk Indicators & Red Flags
- Controlled company with multi-class voting and CEO/Chairman dual role; no compensation committee; lead independent role only informally designated .
- Significant related-party exposure: ~11.6% of total revenues tied to CEO-owned facilities in FY2024; additional related transactions include equipment sale on a note to a CEO-owned entity and affiliate service arrangements; requires ongoing audit scrutiny and board oversight .
- No disclosed CEO employment agreement, severance, or change-of-control terms; thus, economics under various transition scenarios are unknown to investors .
- No options/RSUs outstanding reduces vesting-related insider selling pressure; no Rule 10b5‑1 plans adopted/terminated in the June 2024 quarter .
Investment Implications
- Alignment and control: Zero base salary with discretionary bonuses and no equity grants minimizes dilution, but extensive voting control via Class C shares and absence of a comp committee concentrate power and reduce governance checks; investors should price a control/oversight discount .
- Execution: HMCA continues to drive revenue and profit growth (FY2024 revenue +4.3%, operating income +11.8%), supporting a cash-generative profile; however, related-party revenues (~11.6%) and affiliate transactions create potential perception and governance risks if not continuously vetted .
- Trading signals: Lack of equity awards and no 10b5‑1 plans suggests limited mechanical selling pressure from vesting; any shifts in related-party structures, committee formation (e.g., formal comp committee), or reductions in controlled status could serve as catalysts for governance re-rating .