Patrick Mercer
About Patrick Mercer
Patrick Mercer, 53, is President, Chief Executive Officer and Chief Operating Officer of IRIDEX; he was appointed CEO effective October 1, 2024, and has served as a director since November 2024; he holds a B.S. in Electrical and Computer Engineering from the University of Alabama . IRIDEX reported a 2024 net loss of $8.91 million and a three-year TSR value of $27.33 (value of $100 invested at 12/31/2021), underscoring turnaround and transaction-execution focus under the ongoing strategic review he reaffirmed upon appointment .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| IRIDEX | Chief Operating Officer; President; CEO | COO since Sep 2018; President since Oct 2024; CEO effective Oct 1, 2024 | Six years in operating leadership prior to CEO; continuity through leadership transition and strategic review |
| TrackNet | Chief Operating Officer | May 2017 – Sep 2018 | Operations leadership at a medical device-focused business |
| RODO Medical, Inc. | VP Manufacturing | May 2015 – May 2017 | Scaled manufacturing; medtech process expertise |
| Dfine, HemoSense, Revivant (acquired by Zoll Medical), Stryker | Various roles | Prior | Broadened medtech operations/commercial exposure; M&A integration exposure (Revivant→Zoll) |
External Roles
No external public-company directorships disclosed in the company’s director biography for Mr. Mercer .
Fixed Compensation
| Item | FY 2023 | FY 2024 | FY 2025 (set) |
|---|---|---|---|
| Base Salary ($) | 336,281 | 359,622 (reflects pro-rata annual $352,699) | 370,800 effective April 2025 |
| Target Bonus % of Base | 2023 STI paid $27,057; target not stated | 45% (2024 STI plan) | 65% (approved for 2025) |
| Actual Cash Bonus Paid ($) | 27,057 (paid in 2024 for 2023 STI) | 161,447 (quarterly payouts for 2024 STI) | N/A |
Performance Compensation
2024 Short-Term Incentive (STI)
| Metric | Weighting | Target framework | Actual attainment | Payout outcome |
|---|---|---|---|---|
| Sales Goals | 40% | Company-level quarterly objectives | 36.8% | 92% of target aggregate payout |
| Revenue Goals | 30% | Company-level quarterly objectives | 27.6% | 92% of target aggregate payout |
| Operational Goals | 30% | Company-level quarterly objectives | 27.6% | 92% of target aggregate payout |
| Total | 100% | 2024 STI (quarterly plan) | 92% | Mr. Mercer received $161,447 for FY24 (Q1–Q4) |
Equity Awards (granted and outstanding)
| Grant date | Type | Shares/Options (#) | Exercise Price | Expiration | Vesting details | |---|---:|---:|---:|---| | May 22, 2024 | RSU | 120,000 | N/A | N/A | 1/3 vests May 22, 2025; then annually for 3 years | | Nov 7, 2024 | RSU | 200,000 | N/A | N/A | 1/3 vests Oct 1, 2025; then annually for 3 years | | Oct 27, 2022 | RSU (unvested bal.) | 11,859 | N/A | N/A | 1/3 on Jun 30, 2023; and each one-year anniversary thereafter | | Oct 27, 2022 | Stock Options | 48,141 (exercisable); 24,077 (unexercisable) | $2.28 | Oct 27, 2029 | 1/3 on Jun 30, 2023; then annually | | Sep 19, 2023 | Stock Options | 38,330 (exercisable); 76,670 (unexercisable) | $2.13 | Sep 19, 2030 | 1/3 on Jun 30, 2024; then annually | | Other prior option grants | Stock Options | Multiple fully vested lots (e.g., 69,000 at $2.13 exp. 9/3/2027; 40,000 at $5.04 exp. 6/6/2029; 30,000 at $6.00 exp. 9/18/2028; 19,000 at $2.25 exp. 10/22/2026; 35,510 at $6.58 exp. 8/5/2028) | Various | Various | Fully vested/exercisable as of 12/28/2024 |
Notes:
- 2024 equity grants to Mr. Mercer carried an aggregate grant-date fair value of $582,800 (RSUs) .
- Executive equity vests primarily time-based; no PSU/TSR awards disclosed for 2024 .
Equity Ownership & Alignment
| Ownership detail (as of Apr 1, 2025 unless noted) | Amount |
|---|---|
| Total beneficial ownership | 381,361 shares (2.2% of outstanding) |
| Shares owned directly | 61,384 |
| Options exercisable within 60 days | 279,981 |
| RSUs vesting within 60 days | 39,996 |
| Hedging/derivatives policy | Company prohibits hedging, short sales, and trading in options on company stock |
| Pledging policy | Pledging company securities as collateral is prohibited |
| Ownership guidelines | Not disclosed for executives in proxy |
Additional context:
- Section 16(a) compliance noted a late Form 4 for Mr. Mercer (administrative timing on tax-withholding from 2023 RSU vest), with timely compliance otherwise .
Employment Terms
Change-in-control severance (Amended & Restated for Mercer in Oct 2024):
- Double-trigger: If terminated without Cause or he resigns for Good Reason within 12 months post-Change in Control (or at request of successor pre-CIC), Mercer receives:
- Cash severance lump sum = 150% of annual base salary + target bonus .
- Accelerated vesting = 100% of unvested equity (performance awards treated at target) .
- Benefits = up to 12 months of COBRA premium reimbursement .
- Definitions of Cause, Good Reason, and Change in Control follow customary formulations detailed in the proxy (e.g., material diminution, significant pay cuts, relocations >25 miles, etc.) .
Board Governance
- Board service: Director since November 2024; only non-independent director; Chairperson (Scott Shuda) is independent, providing separation of chair and CEO roles .
- Committee roles: Mercer is not listed as a member of Audit, Compensation, Nominating & Governance, or the newly created Strategy & Budget Committee; committees are fully independent (chairs: Audit—William Moore; Compensation—Beverly Huss; N&G—Scott Shuda; Strategy & Budget—Nick Chen) .
- Board activity: 14 board meetings in FY2024; all directors serving in 2024 attended ≥75% of board/committee meetings .
- Director pay: As an employee-director, Mercer does not receive additional board compensation; non-employee director retainers and equity are disclosed separately .
Performance & Track Record
- Strategic focus: Upon appointment, Mercer emphasized completing the strategic review and value-maximizing transactions; the Board stated leadership change could accelerate transaction progress, with ongoing discussions referenced publicly .
- Financial/TSR context: FY2024 net loss of $8.91 million; three-year TSR value $27.33 vs. $100 baseline, highlighting a challenging shareholder return backdrop entering 2025 .
Compensation Structure Analysis
- Mix shift toward equity: 2024 included substantial RSU grants ($582,800 fair value) reinforcing retention and alignment, with time-based vesting (lower performance risk vs. PSUs) .
- STI design: Quarterly 2024 STI with corporate metrics (sales/revenue/operational) paid at 92% of target; despite net losses, payout reflects operating milestone attainment—watch for ongoing calibration of targets vs. profitability .
- Equity plan capacity/dilution: Share reserve increase (proposed +1,000,000) and overhang metrics disclosed; equity remains central to compensation strategy in a competitive talent market .
- Clawbacks/ownership guidelines: Proxy does not explicitly disclose executive clawback policy or ownership multiples; however, strict prohibitions on hedging/pledging align with best practices .
Related Party and Capital Structure Developments (Governance Overhang)
- Novel Inspiration investment: Series B Preferred (600,000 shares at $10) and $4M initial convertible note (12% PIK in stock, price floor $0.21), with potential up to $10M additional “Growth Notes” subject to approvals; board nomination rights for two directors (Moore, Chen) and potential issuance up to 11,857,142 common shares post-approval (dilution risk) .
- Nasdaq 20% cap and charter amendments: Stockholder approvals sought in 2025 to exceed 19.99% issuance and increase authorized shares, indicating near-term governance and dilution decisions .
Investment Implications
- Alignment and retention: Mercer’s meaningful option position and staged RSU vesting (starting May and Oct 2025) support retention; anti-hedging/pledging policy strengthens alignment; expect routine sell-to-cover activity around vest dates but no pledging risk .
- Transaction optionality: Executive severance is double-trigger and includes 100% equity acceleration at target, suggesting incentives are aligned with consummating a value-maximizing change-in-control while protecting continuity risk; governance processes (independent chair; independent committees) mitigate dual-role concerns .
- Pay-for-performance watchlist: 2024 STI payout (92%) amid multi-year TSR underperformance and net losses suggests the need to monitor 2025 target rigor and any pivot toward profitability-linked KPIs or PSUs to reinforce external value creation .
- Capital/dilution overhang: Novel financing and potential share issuance (up to 70.6% on a maximum basis post-approvals) create significant capital structure and control dynamics that will influence strategic alternatives, board composition, and executive incentives .
Appendix: Quick Facts
- Appointment & roles: CEO/President effective Oct 1, 2024; COO since Sep 2018; Director since Nov 2024 .
- Education: B.S., University of Alabama (Electrical & Computer Engineering) .
- Beneficial ownership: 381,361 shares (2.2%) including options/RSUs within 60 days .
- 2024 pay highlights: Base $359,622; RSUs grant-date fair value $582,800; STI cash $161,447 .
- Policies: Prohibits hedging and pledging; insider trading policy in place; late Form 4 noted for administrative withholding timing in 2024 .