Clay Whitson
About Clay Whitson
Clay Whitson, 67, is Chief Strategy Officer and a director of i3 Verticals (IIIV). He has served on IIIV’s board since January 2018, previously serving as CFO from January 2018 to September 2024; he has been on i3 Verticals, LLC’s board since May 2014. He holds a BA from Southern Methodist University and an MBA from the University of Virginia Darden School of Business . In FY2024, revenue from continuing operations increased 1.4% to $229.9 million, while Adjusted EBITDA from continuing operations was $58.3 million versus $59.4 million in FY2023; company TSR (fixed $100 basis) was $105.91 in FY2024, with peer-group TSR at $311.58 .
• Board service and independence: Whitson is a management (employee) director; IIIV’s Board determined independence for all non‑employee directors and lists those independent directors—Whitson is not listed, indicating he is not independent. The Board meets in regular executive sessions led by a Lead Independent Director given the combined CEO/Chairman structure (CEO Gregory Daily also serves as Chairman; Lead Independent Director is David Wilds) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| i3 Verticals, Inc. | Chief Strategy Officer | Sep 2024–present | Strategy following sale of Merchant Services; support organic/product M&A |
| i3 Verticals, Inc. | Chief Financial Officer | Jan 2018–Sep 2024 | Led finance through IPO-era growth; divested Merchant Services and delevered balance sheet |
| i3 Verticals, Inc. | Director | Jan 2018–present | Ongoing board oversight; management director |
| i3 Verticals, LLC | Board Member | May 2014–present | Governance for operating subsidiary |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Edo Interactive | Chief Financial Officer | Oct 2010–Apr 2014 | Scaled card‑linked services finance function |
| iPayment, Inc. (Nasdaq: IPMT) | CFO & Treasurer; Director | 2002–2010 (Director 2002–2006) | Public company finance leadership; payments sector expertise |
| The Corporate Executive Board (Nasdaq: EXBD) | CFO; Secretary; Treasurer | 1998–2002 | Public company finance; governance roles |
| PMT Services, Inc. (Nasdaq: PMTS) | CFO & Treasurer | 1996–1998 | Payments scaling; sale integration experience |
Fixed Compensation
| Metric | FY2022 | FY2023 | FY2024 |
|---|---|---|---|
| Salary ($) | 250,000 | 259,375 | 268,406 |
| Bonus ($) | 25,000 | 13,125 | — (none paid) |
| All Other Compensation ($) | 23,222 | 20,956 | 21,159 |
| Total ($) | 1,351,155 | 1,794,843 | 1,341,929 |
• Base salary setting: Effective Jan 1, 2024, his base salary was set at $270,375 (a 3% increase vs. 2023); CEO Daily’s salary remained flat .
• Director pay: Management directors (Daily and Whitson) receive no separate director compensation; board cash/equity retainer applies only to non‑employee directors .
Performance Compensation
Annual Cash Incentive (FY2024)
| Item | Detail |
|---|---|
| Target bonus (% of base) | 10% |
| Metrics considered (discretionary) | Adjusted EBITDA; Adjusted EBITDA Margin; Annualized Recurring Revenue; Stock price performance (absolute and vs. peers); no pre‑set weightings |
| Outcome | Company did not meet performance guidelines; Compensation Committee awarded no FY2024 bonuses to NEOs |
Long‑Term Equity Incentives (Options & PSUs)
| Award Type | Grant Date | Size | Exercise Price | Vesting | Notes |
|---|---|---|---|---|---|
| Stock Options | Feb 13, 2024 | 100,000 | $19.22 | 4 equal annual installments starting Feb 13, 2025 (service‑based) | Aligns with annual grant policy; time‑based vest |
| PSUs (performance) | FY2022 (plan) | 25,000 | n/a | Eligible to vest in 5 increments of 5,000 shares over 5 fiscal years based on pro forma adjusted diluted EPS targets; employment required on vest date | FY2024 PSU target adjusted to $1.08 after Merchant Services divestiture; actual was $0.46 → no FY2024 tranche vested; unearned tranches remain eligible in later years per award rules |
PSU Payout Detail (FY2024)
| Metric | Target | Actual | FY2024 Payout | Vesting Mechanics |
|---|---|---|---|---|
| Pro forma adjusted diluted EPS | $1.08 (adjusted for divestiture) | $0.46 | 0 of 5,000 tranche | Five annual 5,000‑share tranches over FY2023–FY2027; catch‑up allowed if later targets are achieved |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (Class A) | 629,492 shares |
| Beneficial ownership (Class B) | 298,862 shares |
| Combined voting power | 1.9% |
| Insider trading & hedging | Insider Trading Policy prohibits short‑term speculation (short sales, puts/calls); hedging/monetization (equity swaps, collars, exchange funds) prohibited for directors and Section 16 officers |
| Clawback policy | Adopted per Rule 10D‑1/Nasdaq; mandatory recovery of erroneously awarded incentive pay on restatement (Big R/Little r), no misconduct requirement |
| Ownership guidelines | Not disclosed in proxy; no pledging disclosure observed in cited materials |
Outstanding Awards at FY2024 Year‑End (select grants shown)
| Grant | Exercisable Options (#) | Unexercisable Options (#) | Exercise Price | Expiration | Unvested PSUs (#) |
|---|---|---|---|---|---|
| 6/20/2018 | 76,924 | — | $13.00 | 6/20/2028 | — |
| 2/19/2019 | 50,000 | — | $21.65 | 2/19/2029 | — |
| 2/13/2020 | 32,000 | — | $32.25 | 2/13/2030 | — |
| 2/11/2021 | 35,000 | — | $34.20 | 2/11/2031 | — |
| 2/11/2022 | 23,333 | 11,667 | $26.53 | 2/11/2032 | — |
| 2/13/2023 | 25,269 | 75,807 | $26.31 | 2/13/2033 | — |
| 2/13/2024 | — | 100,000 | $19.22 | 2/13/2034 | — |
| PSU (FY2022 grant) | — | — | — | — | 25,000 (unearned at FY2024) |
• Option/PSU acceleration value (illustrative): At $21.31 share price (9/30/2024), change‑in‑control acceleration values were $209,000 for options and $532,750 for PSUs (subject to award terms) .
Employment Terms
| Provision | Terms |
|---|---|
| Employment agreement | Annual base salary $270,375; eligible for annual performance bonus up to 50% of salary (Board‑set criteria) |
| Severance (without Cause / for Good Reason) | 12 months base salary; pro‑rated annual bonus (subject to achievement); 12 months benefits; illustrative total $416,776 at 9/30/2024 |
| Change of control | If terminated within six months of a change in control: lump sum = one year base salary + prior year (or highest of last 3 years) bonus + one year benefits; illustrative termination following change‑in‑control total $1,158,526 (includes equity acceleration per plan) |
| Death/disability | Lump sum equal to 50% of annual base salary; equity acceleration per award terms |
| Equity treatment (CIC/termination) | Options: single‑trigger vesting at CIC with cash/stock cancellation value less exercise price; RSUs/PSUs: double‑trigger vesting if not assumed or if terminated without cause/for good reason within 1 year post‑CIC; death/disability accelerates unvested equity |
Board Governance (Director Service)
• Committees: Audit, Compensation, and Nominating & Corporate Governance committees exist; membership lists do not include Whitson (as a management director) .
• Board attendance: The Board met 14 times in FY2024; each director attended at least 75% of Board/committee meetings .
• Leadership structure: Combined CEO/Chairman model with Lead Independent Director presiding over executive sessions to maintain independent oversight .
• Director compensation: Management directors (Daily, Whitson) receive no board retainers; non‑employee directors receive $40,000 cash plus option grants and chair/lead premiums .
Company Performance Context (FY2024 highlights)
• Revenue from continuing operations grew 1.4% to $229.9 million; Adjusted EBITDA from continuing operations was $58.3 million (vs. $59.4 million in FY2023) .
• Strategic actions: Sold Merchant Services Business for ~$438 million, used proceeds to pay down the 2023 senior credit facility; acquired inLumon to augment Public Sector permitting/licensing .
Say‑on‑Pay & Peer Group
• Say‑on‑Pay: At the Feb 22, 2024 annual meeting, ~97% of votes cast supported NEO compensation .
• Peer group and consultants: FW Cook serves as independent compensation consultant; no peer group study was conducted for FY2024, though past years included peer analysis .
Compensation Structure Analysis
• Mix shift: FY2024 emphasized time‑based options over RSUs/PSUs (except promotional RSUs elsewhere); CEO did not receive equity due to ownership concentration; Whitson received options but no cash bonus due to underperformance versus discretionary goals .
• Clawback/hedging controls: Robust recoupment and anti‑hedging policies reduce excessive risk‑taking and misalignment risk .
Risk Indicators & Red Flags
• Combined CEO/Chairman mitigated by Lead Independent Director and regular executive sessions .
• No tax gross‑ups; no defined benefit pension; anti‑hedging and clawback in place .
• PSU targets were adjusted (per award provisions) post‑divestiture; FY2024 PSU tranche did not vest given performance shortfall .
Performance Compensation — Detailed Tables
Annual Bonus Program (FY2024)
| Metric | Weighting | Target | Actual | Payout |
|---|---|---|---|---|
| Adjusted EBITDA | Discretionary (no fixed weighting) | Not formulaic | Below guidelines | $0 |
| Adjusted EBITDA Margin | Discretionary | Not formulaic | Below guidelines | $0 |
| Annualized Recurring Revenue (ARR) | Discretionary | Not formulaic | Below guidelines | $0 |
| Stock price performance (absolute & vs peers) | Discretionary | Not formulaic | Below guidelines | $0 |
PSU Framework
| Element | FY2023 | FY2024 | FY2025–FY2027 |
|---|---|---|---|
| Annual tranche size (shares) | 5,000 | 5,000 | 5,000 per year |
| Performance metric | Pro forma adjusted diluted EPS | Pro forma adjusted diluted EPS (target adjusted for divestiture) | Pro forma adjusted diluted EPS |
| Target | Set at grant; increasing annually | Adjusted to $1.08 | Increasing annually |
| Actual | See company disclosures | $0.46 | TBD |
| FY tranche vesting | Per achievement | 0 vested | Catch‑up allowed in later years |
Investment Implications
• Alignment: Significant insider ownership (1.9% combined voting power) and long‑dated option/PSU structures align incentives with multi‑year value creation; clawback and anti‑hedging policies are shareholder‑friendly .
• Near‑term selling pressure: No FY2024 bonus paid; options vest annually beginning Feb 13, 2025; PSU vesting is contingent on improved pro forma EPS—limited forced selling signals near term unless options vest in the money; FY2024 PSU tranche did not vest .
• Retention/CoC economics: One‑year salary, bonus, and benefits under CIC termination plus equity acceleration could incentivize stability through strategic transitions; non‑CIC severance is moderate (12 months + pro‑rated bonus) .
• Governance checks: Combined CEO/Chairman increases concentration risk, but Lead Independent Director, independent committees, high Say‑on‑Pay support (~97%), and no tax gross‑ups mitigate governance concerns .