Richard J. Buchholz
About Richard J. Buchholz
Richard J. Buchholz, age 57, has served as Inspire Medical Systems’ Chief Financial Officer since May 2014 and is a Certified Public Accountant (inactive) with a B.B.A. from the University of Wisconsin–Eau Claire . Under his tenure, Inspire delivered strong company-level results in 2024: revenue of $802.8 million (+28% YoY), first full-year profitability with net income of $53.5 million, and diluted EPS of $1.75; cumulative TSR since the May 2018 IPO through FY2024 was 642.1%, though 2024 TSR was -8.9% . Governance structures supporting pay-for-performance include the Organization & Compensation Committee, an anti-hedging/anti-pledging policy, stock ownership guidelines, and a clawback policy .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Inspire Medical Systems, Inc. | Chief Financial Officer | 2014–Present | Led finance through rapid growth to first full-year profitability in 2024; supported revenue scale and margin improvement . |
| superDimension, Ltd. | CFO, Secretary & Treasurer | 2006–2013 | Financial leadership through acquisition by Covidien plc in 2012 . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | No external board roles disclosed for Buchholz . |
Fixed Compensation
Multi-year cash compensation and incentive outcomes:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 425,406 | 447,243 | 457,844 |
| Base Salary Change (%) | — | — | 2.5% |
| Target Bonus (% of Base) | 55% (company-wide NEO level) | 55% (company-wide NEO level) | 60% (company-wide NEO level) |
| MIP Eligible Earnings ($) | — | — | 457,844 |
| MIP Achievement (%) | — | — | 98.4% |
| Actual MIP Payout ($) | 204,620 | 205,382 | 270,311 |
| Discretionary Bonus ($) | 53,176 | 10,810 | — |
Notes:
- FY2024 NEO target incentive opportunity increased to 60% (CFO), with company-wide metrics weighted 65% financial and 35% strategic .
Performance Compensation
2024 Annual Management Incentive Program (Company-wide)
| Performance Metric | Weight | Threshold | Target | Above-Target | Actual | Weighted Achievement |
|---|---|---|---|---|---|---|
| Global Revenue ($mm) | 50% | 770.0 | 820.0 | 861.0 | 802.8 | 45.7% |
| Adjusted Operating Income ($mm) | 15% | 125.0 | 143.4 | 157.9 | 152.1 (adj) | 18.2% |
| Global Insurance Reimbursement Approvals (# US commercial) | 10% | 19,000 | 24,000 | 29,000 | 23,017 | 9.5% |
| Quality/Regulatory/Product Development (objectives achieved) | 15% | 2 of 4 | 3 of 4 | 4 of 4 | 3 of 4 (FDA Inspire V approval included) | 15.0% |
| Operations (days inventory on-hand implantable components) | 10% | 45 | 90 | 135 | 90 | 10.0% |
| Overall MIP Achievement | — | — | — | — | — | 98.4% |
Adjusted Operating Income definition: GAAP operating income excluding non-cash stock-based compensation; 2024 reported operating income was $36.1mm, adjusted to exclude $116.0mm stock-based compensation to reach $152.1mm .
Long-Term Incentives (LTI) Mix and Vesting
| Vehicle | 2024 Allocation | Vesting | Performance Metrics | Rationale |
|---|---|---|---|---|
| PSUs | 50% | 3-year cliff (2024–2026) | Cumulative Revenue 75%; Operating Income 25% | Emphasizes growth and profitable scaling . |
| Stock Options | 25% | 25% after 1 year; then 36 equal monthly installments (fully vest by 4 years) | Share price appreciation | Aligns with long-term value creation . |
| RSUs | 25% | 1/3 on each of the 1st, 2nd, 3rd anniversaries | Share price appreciation | Retention and alignment . |
PSU Results (2022–2024 cohort):
| Cohort | Metric | Target | Above-Target | Max | Actual | Payout (%) | Shares Vested (Buchholz) |
|---|---|---|---|---|---|---|---|
| 2022–2024 | Cumulative Revenue ($mm) | 1,500.0 | 1,650.0 | 1,800.0 | 1,835.5 | 200% | 6,152 |
2023 PSU cohort uses cumulative revenue and operating income over 2023–2025; values are reported at threshold as cumulative performance had not surpassed threshold as of 12/31/24 (Buchholz 1,519 shares at threshold) . 2024 PSU cohort uses the same metrics over 2024–2026; reported at threshold as of 12/31/24 (Buchholz 2,694 shares at threshold) .
Equity Ownership & Alignment
Beneficial Ownership
| Item | Value |
|---|---|
| Total Beneficial Ownership (shares) | 86,378 |
| Ownership (% of outstanding) | <1% (asterisk denotes less than 1%) |
| Shares Outstanding (Record Date) | 29,759,651 |
| Options Exercisable or Exercisable within 60 Days | 51,224 |
| Family Holdings | 1,475 shares held by each of four children (total 5,900) |
| Shares Pledged as Collateral | None disclosed for Buchholz; pledging prohibited absent pre-approval (CEO pledged 39,390 shares per policy) |
Stock Ownership Guidelines: 1× base salary for executive officers other than CEO; compliance required within 5 years; as of 12/31/24, all executive officers subject to the policy had attained minimum ownership except Messrs. Ban, Weatherby, and Mmes. Mann and Kelly (Buchholz not among exceptions) .
Anti-Hedging/Anti-Pledging: Prohibits hedging, short sales, and transactions in publicly traded options; pledging or margin purchase prohibited absent pre-approval (Audit Committee for officers/directors) .
Clawback: Company has a Recovery of Erroneously Awarded Compensation Policy compliant with SEC/NYSE rules for clawback upon accounting restatement .
Outstanding Equity Awards (as of 12/31/24)
| Grant Type | Grant Date | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration | RSUs Unvested (# / $ MV) | PSUs Unearned (# / $ MV) |
|---|---|---|---|---|---|---|---|
| Options | 12/18/2018 | 7,159 | — | 42.15 | 12/18/2028 | — | — |
| Options | 12/16/2019 | 17,849 | — | 71.00 | 12/16/2029 | — | — |
| Options | 12/14/2020 | — | 17,300 | 194.82 | 12/14/2030 | — | — |
| Options | 02/11/2022 | — | 5,924 | 227.53 | 02/11/2032 | — | — |
| Options | 02/10/2023 | — | 5,450 | 263.16 | 02/10/2033 | — | — |
| Options | 02/09/2024 | — | 4,376 | 194.87 | 02/09/2034 | — | — |
| RSUs | 02/09/2024 | — | — | — | — | 2,694 / $499,414 | — |
| PSUs | 02/11/2022 | — | — | — | — | — | 6,152 / $1,140,458 (reported at actual 200% payout) |
| PSUs | 02/10/2023 | — | — | — | — | — | 1,519 / $281,592 (threshold) |
| PSUs | 02/09/2024 | — | — | — | — | — | 2,694 / $499,414 (threshold) |
Market value calculations use $185.38 closing price at 12/31/24 . Options granted 12/14/2020 ($194.82) and 02/09/2024 ($194.87) were out-of-the-money versus $185.38 at 12/31/24; earlier grants ($42.15 and $71.00) were in-the-money at that date .
Insider Selling Pressure: Buchholz had no option exercises or RSU vestings in 2024; only RSUs vested for Phillips and option exercises for Ban in 2024 .
Employment Terms
Key contractual and plan provisions for Buchholz (and other NEOs unless noted):
- At-will employment; non-compete and non-solicit apply for one year post-termination .
- Severance (no Change in Control): 9 months base salary, pro rata target bonus, and subsidized COBRA for 9 months (Weatherby: 6 months) .
- Change-in-Control (double trigger): 12 months base salary, target bonus, subsidized COBRA for 12 months; full acceleration of equity awards granted on or after the effective employment agreement date upon qualifying termination .
- Plan-level acceleration (death/disability/retirement): death or disability accelerates unvested options/RSUs in full and prorates PSUs at target after 12 months of performance period; qualifying retirement accelerates options, allows RSUs to continue vesting, and prorates PSUs based on actual performance (Herbert and Ban eligible as of 12/31/24) .
Scenario valuations (as of 12/31/24):
| Scenario | Cash ($) | Equity Acceleration ($) | Other ($) | Total ($) |
|---|---|---|---|---|
| Death | — | 3,202,069 | — | 3,202,069 |
| Disability | — | 3,202,069 | — | 3,202,069 |
| Retirement | — | — | — | — |
| Termination without Cause (no CIC) | 618,089 | — | 24,517 | 642,606 |
| CIC (no termination) | — | 2,702,655 | — | 2,702,655 |
| Termination without Cause in connection with CIC | 732,550 | 3,202,069 | 32,689 | 3,967,308 |
Tax features:
- No excise tax gross-ups; use of Section 280G cutback to maximize after-tax payouts .
Compensation Structure Analysis
- Cash vs Equity Mix: LTI equity comprises PSUs (50%), options (25%), RSUs (25%), increasing at-risk pay and tying outcomes to growth and profitability over multi-year horizons .
- Target Market Positioning: Committee references peer group and targets around the 50th percentile, with actual pay varying by performance and role scope .
- Year-over-Year Changes: Buchholz’s base salary rose 2.5% in 2024 with NEO target bonus increased to 60% from 55%, reflecting role scope and market alignment; no discretionary bonus in 2024 (vs. $10,810 in 2023) .
- Pay-for-Performance Execution: 2024 MIP paid at 98.4% on revenue, adjusted operating income, reimbursement approvals, and operational/regulatory goals, producing a CFO payout of $270,311 .
Peer group (2024 benchmarking): Includes medtech and health equipment comparators such as Nevro, Penumbra, Glaukos, Masimo, Insulet, Integra LifeSciences, Merit Medical Systems, Lantheus, Globus, Atricure, Axonics, STAAR Surgical, and others; selection reflects revenue, market cap, and business profile criteria .
Say-on-Pay: 97% approval at the 2024 annual meeting, signaling broad shareholder support for executive compensation design and outcomes .
Equity Award Vesting Schedules and Selling Pressure
- Options: 25% after one year, then monthly over 36 months (fully vested by four years); fully accelerate on qualifying double-trigger CIC termination .
- RSUs: One-third annually over three years; fully accelerate on qualifying double-trigger CIC termination .
- PSUs: Three-year performance periods, payout range 0–200% of target based on cumulative revenue and operating income; double-trigger CIC mechanics ensure vesting at target upon qualifying termination if awards are assumed, or at greater of actual/target if not assumed .
- 2024 Insider Selling Indicators: Buchholz reported no option exercises or RSU vestings in 2024; mitigated near-term selling pressure from personal transactions .
Investment Implications
- Alignment: High at-risk mix (PSUs tied to multi-year cumulative revenue/operating income) and ownership guidelines (CFO at 1× salary minimum; in compliance) align incentives to durable growth and profitability .
- Retention: Double-trigger CIC severance and plan-level death/disability/retirement accelerations provide retention and downside protection; no excise tax gross-ups and clawback policy improve governance posture .
- Trading Signals: Absence of 2024 personal exercises/vests and no disclosed pledging by Buchholz reduce near-term selling overhang; several option grants are currently out-of-the-money vs. 12/31/24 price, while older grants remain meaningfully in-the-money, potentially influencing future exercise behavior if shares appreciate .
- Execution Risk: Company-wide 2024 TSR (-8.9%) contrasts with strong operating progress and long-term TSR since IPO (+642%), placing emphasis on sustaining revenue growth, margin expansion, and meeting PSU performance hurdles to realize compensation value and shareholder returns .