Richard S. Danforth
About Richard S. Danforth
Richard S. Danforth, age 65, has served as Chief Executive Officer since August 2016 and as a director since the 2024 annual meeting. He holds a B.S. in Industrial Technology (UMass Lowell) and a Master’s in Engineering Management (Western New England College), with extensive leadership roles across defense and aerospace enterprises . GNSS’s pay-versus-performance disclosure shows compensation actually paid to the PEO of $1.236M in FY2024 alongside company TSR value of $177.11 and a net loss of $31.73M; prior years show TSR values of $72.56 (FY2023) and $38.80 (FY2022) with net losses of $18.40M and $16.21M, respectively . Board leadership is separated (independent Chair), which mitigates dual-role concerns as Danforth is CEO and a director, not Chair .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| RsD Aero, Ltd. | Founder (strategic consulting) | 2014 | Consulting for Defense/Aerospace/Space/Transportation; emphasis on M&A and transatlantic trade |
| DRS Technologies | Group President, Integrated Defense Systems & Service | 2013–2014 | Senior leadership across defense systems |
| DRS Defense Solutions | CEO, President, Board Member | 2008–2012 | Business strategy, leadership, execution at scale |
| DRS Command Control & Communication | President | 2005–2008 | Program leadership in C3 domains |
| DRS Navy Electronics & Intelligence Systems | President | 2004–2005 | Operations and product leadership |
| DRS Electronics Systems Group | EVP | 2002–2004 | Senior executive oversight |
| Raytheon Aircraft Company | VP Operations; later SVP Commercial Aircraft Business | 1996–2000 | Led 370 staff in sales/marketing/customer service; operations leadership |
| Raytheon | Manufacturing, QA, Program Mgmt | 1982–1996 | Operational and program management foundation |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Not disclosed | — | — | No current outside public company board service disclosed in the proxy |
Fixed Compensation
Multi-year summary (fiscal years ended Sept 30):
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary | $428,685 | $437,091 |
| Cash Bonus | — | — |
| All Other Compensation | $14,806 | $14,454 |
| Total Reported Compensation | $667,491 | $1,044,150 |
Notes:
- Director pay is for non‑employee directors only; Danforth’s compensation is reported as CEO in the executive tables .
Performance Compensation
Annual Incentive Plan (FY2025 framework)
| Element | Detail |
|---|---|
| Target Bonus % | 75% of base salary (PEO) |
| Payout Levels | 50%, 100%, 200% of target, tied to performance goal achievement |
| Performance Metrics | Total product bookings, net revenues, operating income, operating cash flow (set off FY2024 metrics) |
| Actual FY2024 Bonus Paid | None reported (— in SCT) |
| Clawback | Nasdaq-compliant policy for restatements; recovery of erroneously received incentive-based compensation; committee discretion for permitted exceptions |
Equity Awards Granted (Grant-date fair value)
| Year | Type | Grant Date Fair Value |
|---|---|---|
| FY2023 | Stock options subject to performance conditions; disclosed aggregate fair value of $1,216,000 (max achievement representation) | |
| FY2024 | Time-vested stock options; aggregate grant-date fair value $592,605 |
Outstanding Equity Awards and Vesting
| Grant Date | Type | Exercisable | Unexercisable | Perf-based Unearned | Exercise Price | Expiration | Vesting Notes |
|---|---|---|---|---|---|---|---|
| 10/4/2019 | Stock option | 187,138 | — | — | $3.39 | 10/4/2026 | Fully vested |
| 10/8/2022 | Stock option (time-based) | 100,000 | 100,000 | — | $2.69 | 10/8/2029 | Vests 1/2 on each anniversary of 10/8/2022 |
| 10/8/2022 | Stock option (performance) | — | — | 400,000 | $2.69 | 10/8/2029 | Vests based on performance determined 9/30/2025 |
| 10/8/2022 | Stock option (performance) | — | — | 400,000 | $2.69 | 10/8/2029 | Vests based on performance determined 9/30/2026 |
| 8/19/2024 | Stock option (time-based) | 150,000 | 300,000 | — | $2.70 | 8/19/2031 | 1/3 vests on 9/30/2024, 9/30/2025, 9/30/2026 |
Pay versus Performance (PEO)
| Year | PEO Compensation Actually Paid | Company TSR Value ($100 initial) | Net Income (Loss) |
|---|---|---|---|
| FY2022 | $828,008 | $38.80 | $(16,212,000) |
| FY2023 | $553,491 | $72.56 | $(18,396,000) |
| FY2024 | $1,235,962 | $177.11 | $(31,730,000) |
Say‑on‑Pay support at the 2024 annual meeting was 94.3% .
Equity Ownership & Alignment
| Holder | Shares Beneficially Owned | % of Class | Near-term Issuable (within 60 days) |
|---|---|---|---|
| Richard S. Danforth | 731,830 | 1.6% | 537,138 (options/RSUs exercisable/settling within 60 days) |
| Shares Outstanding (base) | 44,929,634 | — | — |
Additional alignment considerations:
- The company has not adopted a hedging policy restricting hedging transactions for directors or employees, which is a misalignment risk indicator for some governance frameworks .
- No stock ownership guidelines for executives are disclosed; pledging policies are not disclosed .
Employment Terms
| Provision | Details |
|---|---|
| Role | Employment agreement as CEO |
| Severance (non‑CO) | 12 months’ salary and health benefits; pro‑rata annual cash bonus for the fiscal year of termination (as if employed through year‑end); vesting of stock options subject to performance-based vesting criteria |
| Change‑of‑Control | Upon specified termination event in connection with a change of control: lump sum of 2x (base salary + then‑target annual cash bonus), pro‑rata annual bonus, and COBRA coverage cost for 18 months; all stock options vest on termination |
| Company CIC Plan (general) | Separate CIC Severance Benefit Plan provides 24 months’ base salary, target bonus, 24 months’ health benefits, and accelerated vesting for participating executives upon qualifying termination (3 months before/12 months after a CoC) |
| Clawback | Mandatory compensation recovery policy per Nasdaq (restatement-triggered) |
Board Governance (Danforth as Director)
- Board composition: seven directors; six independent; Danforth is CEO and a director; independent Chair is Richard H. Osgood III .
- Committee memberships: Compensation Committee (Culhane—Chair, Dodd, Osgood); Nominating & Corporate Governance (Osgood—Chair, Schmeiser, Fugate). Danforth is not listed on committees .
- Attendance: all directors attended at least 75% of Board and applicable committee meetings in FY2024 .
- Director compensation policy: non‑employee directors receive $30,000 annual cash retainer and annual 30,000 RSUs; no additional committee fees; FY2024 director compensation table disclosed (not applicable to Danforth as employee director) .
Performance & Company Financials
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues (USD) | $54,035,000 | $46,663,000 | $24,008,000 |
| EBITDA (USD) | $187,000* | $(8,428,000)* | $(27,737,000)* |
- Values retrieved from S&P Global.
Risk Indicators & Red Flags
- Hedging policy: No formal policy restricting hedging for directors or employees; potential alignment concern .
- Losses and declining revenue in FY2024 vs prior years underscore execution risk .
- Activist engagement: Cooperation Agreement with Nicoya Capital; Board expanded and new director appointed; indicates shareholder pressure and governance changes .
- Related party transactions: None exceeding thresholds in FY2024; no current proposals .
Compensation Committee Analysis
- Composition: Independent directors; Culhane (Chair), Dodd, Osgood .
- Responsibilities: Set/approve performance goals for executives (including CEO), recommend CEO compensation, administer equity plan, review director compensation; authority to retain advisors .
- Director compensation cap: Plan limits non‑employee director compensation value to $500,000 per calendar year, with extraordinary exceptions requiring recusal by recipient .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑Pay 2024 approval: 94.3% support; company asserts alignment with long‑term stockholder interests .
Investment Implications
- Alignment: CEO’s target bonus is explicitly tied to bookings, revenue, operating income, and cash flow, with capped payout levels, suggesting clearer pay‑for‑performance mechanics in FY2025; clawback policy adds downside protection for investors .
- Selling pressure: Multiple option tranches vesting in equal installments through 2026 and two large performance‑based grants maturing on 9/30/2025 and 9/30/2026 create potential supply overhang if exercised; 537,138 shares issuable within 60 days reflects near‑term dilutive potential .
- Retention/CIC economics: CEO severance (12 months) and double‑trigger CIC (2x salary+target bonus plus full option vesting) are moderate‑to‑robust; could influence incentives around strategic alternatives and reduce departure risk during change‑of‑control scenarios .
- Governance: Independent Chair and non‑committee status for CEO mitigate dual‑role independence issues; activist cooperation and board refresh are positives for oversight quality .
- Execution risk: FY2024 revenue contraction and negative EBITDA alongside improved TSR highlight a mismatch between operating results and market performance; FY2025 incentive metrics rooted in cash flow and operating income may pressure near‑term decisions toward profitability and bookings quality .