R. Rimmy Malhotra
About R. Rimmy Malhotra
Independent director of Genasys Inc. (GNSS), age 49, appointed to the Board on January 15, 2025 via a cooperation agreement with Nicoya; determined independent under Nasdaq listing standards. He is a finance-focused board member with extensive public markets and audit committee experience; holds an MBA in Finance (Wharton), an MA in International Relations (UPenn, Lauder Fellow), and undergraduate degrees in Computer Science and Economics (Johns Hopkins). He serves on GNSS’s Audit Committee, bringing “financial matters expert” qualifications from multiple public company boards .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Nicoya Fund LP | Managing Member & Portfolio Manager | 2013–present | Private investment partnership leadership; activist engagement and value investing orientation . |
| Gratio Values Fund (’40 Act mutual fund) | Portfolio Manager | 2008–2013 | Public fund portfolio oversight . |
| New York-based hedge fund | Investment Analyst | Prior to 2008 | Buy-side research and analysis . |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Optex Systems Holdings (NASDAQ:OPXS) | Director | Since Nov 2019 | Chair, Nominating & Corporate Governance; member, Audit and Compensation Committees . |
| HireQuest (Nasdaq:HQI) | Director | Since Apr 2016 | Vice-Chairman; Lead Independent Director; member, Audit and Compensation Committees . |
| Scott’s Liquid Gold-Inc. (OTCBB:SLGD) | Director | Jan 2021–Aug 2024 | Lead Independent Director; Chair, Audit Committee (until merger with Horizon Kinetics) . |
| FRMO (OTC:FRMO) | Director | Since Oct 2024 | Chair, Audit Committee . |
Board Governance
- Appointment and independence: Added as part of a Cooperation Agreement with Nicoya; Board increased to seven and appointed Malhotra effective January 15, 2025. The Board has affirmatively determined Malhotra is independent under Nasdaq standards .
- Committee assignments: Audit Committee member; GNSS Audit Committee comprised of Culhane (Chair), Dodd, Malhotra, and Schmeiser; all members independent and financially literate .
- Attendance and engagement baseline: The Board held five meetings in FY2024, all directors serving then attended at least 75% of Board and committee meetings; independent directors met at least twice in executive session during calendar 2024 .
- Meeting participation: GNSS encourages directors to attend the Annual Meeting; all nominees who were members at the time attended the 2024 Annual Meeting virtually .
- Governance policies: Clawback policy adopted to comply with Nasdaq rules (restatement-triggered recovery of incentive comp); committee charters established; hotline and whistleblower procedures; all standing committees are independent .
- Hedging policy: GNSS has not adopted any practice or policy restricting hedging or offsetting transactions in company stock for directors or employees, which is atypical and may be viewed as a governance gap .
Fixed Compensation
| Component | Amount/Terms | Notes |
|---|---|---|
| Annual cash retainer | $30,000 | Paid in equal quarterly installments; prorated for partial year service . |
| Annual equity | 30,000 RSUs | Granted on date of annual meeting; subject to plan limits; prorated for partial year service . |
| Committee/meeting fees | None | No additional amounts payable for committee participation; no meeting fees . |
| Director compensation cap | $500,000 (cash + grant date fair value) per calendar year | Under 2025 Equity Incentive Plan; exceptions only in extraordinary circumstances and conflicted directors cannot participate in awarding such exceptions . |
Malhotra initial GNSS grant (from beneficial ownership footnote):
| Grant Type | Shares | Timing/Notes |
|---|---|---|
| RSUs | 5,000 | Issuable upon settlement within 60 days of January 27, 2025 . |
Performance Compensation
| Pay Element | Performance Linkage | Vesting/Settlement Details |
|---|---|---|
| Non-employee director equity (RSUs) | None | RSUs and dividend equivalents accrue and are paid only upon vesting; dividend equivalents are not paid before vesting . |
| Options/SARs for directors | Not typical under GNSS director program | 2025 Plan permits options/SARs but director comp is primarily RSUs; any repricing requires stockholder approval . |
GNSS executive incentive plan (for context, not applicable to director pay): FY2025 bonus payouts at 50%, 100%, and 200% of target based on total product bookings, net revenues, operating income, and operating cash flow; CEO target bonus 75% of base, CFO 50% .
Other Directorships & Interlocks
- No disclosed related party transactions in FY2024 involving Malhotra or Nicoya entities; GNSS reports none above $120,000 or 1% of average total assets .
- Cooperation Agreement with Nicoya: Activist settlement increased Board size to seven and appointed Malhotra; Nicoya agreed to standstill and voting commitments for the term of the agreement (details in GNSS Form 8-K referenced by the proxy) .
Expertise & Qualifications
- Financial expertise: Described as qualified on financial matters; multi-company audit committee leadership (FRMO Audit Chair; prior SLGD Audit Chair) .
- Education: MBA (Wharton), MA (UPenn, Lauder Fellow), BS (Computer Science & Economics, Johns Hopkins) .
- Capital markets and governance: Service across multiple public boards with governance and compensation committee roles, indicating deep familiarity with pay, controls, and board oversight .
Equity Ownership
| Holder | Shares Beneficially Owned | % of Class | Ownership Breakdown |
|---|---|---|---|
| R. Rimmy Malhotra | 1,732,813 | 3.9% | 99,018 shares held directly; 5,000 RSUs issuable within 60 days of Jan 27, 2025; 1,628,795 shares held indirectly via Nicoya Capital LLC, Nicoya Fund LLC, and Nicoya Genasys-SPV LLC (Malhotra is managing member of Nicoya Capital LLC) . |
Additional context:
- GNSS shares outstanding at Jan 21, 2025: 44,929,634 .
- Pledging/hedging: No disclosure of pledged shares; company has not adopted any hedging policy for directors/employees .
Governance Assessment
- Strengths:
- Independent director with audit committee seat; Board affirms independence; Audit Committee composed entirely of independent directors .
- High skin-in-the-game with 3.9% beneficial ownership, including significant indirect holdings through Nicoya entities; initial RSU grant aligns director incentives with shareholders .
- Robust clawback framework (Nasdaq-compliant) and committee charters; independent executive sessions held .
- Risks/RED FLAGS:
- Appointment via Cooperation Agreement with activist Nicoya could introduce perceived influence or conflicts; monitoring of standstill compliance and Board dynamics advisable .
- No corporate hedging policy for directors/employees; absence of restrictions may allow hedging that weakens alignment, a governance gap relative to peers .
- Limited current-year attendance data specific to Malhotra given January 2025 appointment; future proxies should be reviewed for attendance and engagement .
- Compensation alignment:
- Director pay mix skews toward equity (annual RSUs) with modest cash retainer; no committee fees, minimizing role-based pay inflation .
- Director compensation capped at $500k/year under the 2025 Plan, reducing excessive equity risk .
- Shareholder sentiment:
- 2024 say-on-pay support was strong (94.3%), reflecting broader investor confidence in GNSS’s compensation governance, though focused on executives .
Overall signal: Malhotra’s independence, audit oversight experience, and substantial ownership are positives for board effectiveness and investor alignment; the activist appointment and lack of hedging policy merit ongoing monitoring for conflicts and alignment .