Fred L. Hite
About Fred L. Hite
Fred L. Hite (age 57) is OrthoPediatrics’ Chief Operating Officer since June 2020, Chief Financial Officer since February 2015, and a director since August 2015. He previously served as CFO and Investor Relations Officer at Symmetry Medical (2004–2014) and spent 13 years in finance roles at General Electric; he holds a B.S. in Finance from Indiana University’s Kelley School of Business . Company performance during his tenure shows strong revenue growth with negative but improving EBITDA margins; the value of a $100 investment (TSR) declined to $56 by 2024 from $145 in 2021, reflecting industry and company-specific headwinds . Recent three-year fundamentals are below (S&P Global data).
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | $122,289,000 | $148,732,000 | $204,727,000 |
| EBITDA ($USD) | -$8,691,000* | -$8,381,000* | -$10,441,000* |
| EBITDA Margin (%) | -7.11%* | -5.63%* | -5.10%* |
Values retrieved from S&P Global.*
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| OrthoPediatrics | CFO | Feb 2015–present | Built and scaled public company finance; led capital markets and controls |
| OrthoPediatrics | COO | Jun 2020–present | Oversight of operations alongside CFO responsibilities |
| Symmetry Medical (NYSE-listed) | CFO & Investor Relations Officer | 2004–2014 | Public-company finance leadership; IR strategy |
| General Electric | Various financial roles | ~1991–2004 | Commercial, manufacturing, sourcing, services finance experience |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Indiana University (Kelley School) | B.S. Finance | — | Educational credential |
Fixed Compensation
| Item | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $450,000 | $501,000 (11.3% increase) |
| Target Bonus (% of Salary) | 75% | 75% |
| Actual Bonus Paid ($) | $328,219 (97.5% of target) | $367,082 (98% of target) |
Performance Compensation
Annual Bonus Plan Design (2024)
| Metric | Weighting | Target Structure | Payout Mechanics | 2024 Outcome |
|---|---|---|---|---|
| Sales Performance (Revenue) | 40% | Quarterly targets; threshold at 80% of budget | Overachievement multiplier >100%; no payout if <80% | Contributed to 98% total payout |
| Adjusted EBITDA | 25% | Quarterly targets; threshold at 80% of budget | Overachievement annualized into discretionary pool | Contributed to 98% total payout |
| Corporate Objectives | 25% | Pre-set annual objectives | — | Included in 98% payout |
| Individual Performance | 10% | Annual goals | — | Included in 98% payout |
| Total | 100% | — | — | 98% of target paid |
Equity Awards and Vesting
| Grant Type | Grant Date | Shares | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|
| Restricted Stock | 6/11/2024 | 57,018 | $1,699,136 | 100% vests 3/15/2027 (approx. 2y 9m) |
| Restricted Stock | 3/15/2023 | 30,000 | $1,244,700 | 100% vests 3 years from grant (3/15/2026) |
| Vested in 2024 | 3/2/2024 | 7,119 | $199,830 | — |
Design notes: Historically annual restricted stock vested 3 years from grant; 2024 awards under the new plan vest on 3/15/2027 .
Equity Ownership & Alignment
| Ownership Metric | Amount | Notes |
|---|---|---|
| Total beneficial ownership (common shares) | 207,989 | As of 3/28/2025 |
| Unvested restricted shares | 150,360 | Voting permitted; transfer restricted until vesting |
| Estimated vested/unrestricted | ~57,629 | Beneficial minus restricted (computed from ) |
| Ownership % of shares outstanding | ~0.84% | 207,989 / 24,831,427 shares outstanding (3/28/2025) |
| Options outstanding | None indicated | Equity plan shows no outstanding appreciation awards |
| Hedging/pledging | Prohibited | Insider Trading Policy prohibits hedging/pledging and short-term/speculative transactions |
| Stock ownership guidelines | Directors: $225,000 | Applies to non-employee directors; no executive ownership guideline disclosed |
Employment Terms
| Term | Provision |
|---|---|
| Agreement date | October 15, 2024; supersedes prior agreements |
| Term | Initial 3-year term; auto-renews for successive 1-year terms unless 30 days’ notice |
| Base salary | $501,000 per year |
| Bonus participation | Eligible under annual bonus plan |
| Benefits | Employee/fringe benefits; expense reimbursement |
| Clawback | Compensation subject to clawback policy and applicable rules |
| Non-compete/non-solicit | 30 months post-termination; applies to customers and employees, in geographies where company/NEO operated in prior 12 months |
| Severance (no-cause or good reason) | 30 months of base salary + 2.5× average bonus (prior 3 years), paid in 30 monthly installments; unpaid earned bonus; pro-rated performance bonus; up to 12 months company-subsidized healthcare |
| Change of control | Same severance if employment is terminated or title changes within 12 months post-CoC (modified double trigger) |
Board Governance
- Board service: Director since August 2015; term expiring at the 2025 annual meeting; nominated for re-election in 2025 .
- Independence: Hite is a management director (not listed as independent); Board separates CEO and Chair; Lead Independent Director in place .
- Committees: Audit, Compensation, and Corporate Governance Committees are composed of independent directors; Hite is not a member of these committees .
- Attendance: Board held seven meetings in 2024; no director attended fewer than 75% of combined Board/committee meetings .
- Director compensation: Executive officers (including Hite) do not receive additional compensation for board service .
Director Service History and Dual-Role Implications
- Board service (years): Director since 2015; re-nominated in 2025 .
- Committee roles: None; committees limited to independent directors .
- Independence issues: As CFO/COO and director, Hite is not independent; Board mitigates with separate Chair and Lead Independent Director, and independent committee composition .
- Meeting attendance: No below-75% attendance in 2024 .
Performance & Track Record
| Measure | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Value of $100 investment (TSR) | $100 | $145 | $96 | $79 | $56 |
| Net (loss) income ($000s) | $(32,944) | $(16,260) | $1,258 | $(20,974) | $(37,822) |
| Adjusted EBITDA ($000s) | $(5,871) | $(182) | $227 | $5,040 | $8,519 |
Highlights:
- Pay-for-performance structure emphasized revenue, Adjusted EBITDA, corporate, and individual goals; 2024 payout at 98% of target .
- Revenue scaled materially through 2024 (see fundamentals table); EBITDA margins remain negative but improved vs 2022 (S&P Global data; see first table).
- Say-on-Pay support was ~99% in 2024 for FY2023 compensation, indicating shareholder alignment with program design .
Compensation Structure Analysis
- Cash vs. equity mix: Significant long-term equity grants (restricted stock) dominate variable pay; 2024 stock award value $1.70M vs. $0.37M bonus .
- Shift to RSUs/restricted stock: Company historically grants restricted stock; no option repricing; no appreciation awards outstanding as of April 2024 .
- Guaranteed vs. at-risk pay: Base salary increased to market median (50th percentile minimum) while bonuses and equity remain performance/market-value linked .
- Performance metrics stringency: Quarterly thresholds at 80% of budget for both Sales and Adjusted EBITDA; overachievement creates discretionary pool for EBITDA .
- Clawbacks and risk controls: Clawback policy (Rule 10D-1 compliant), anti-hedging/anti-pledging, no tax gross-ups, limited perquisites .
Related Party Transactions and Governance Considerations
- Squadron relationships: Payments to Structure Medical (owned by Squadron) were $1.0M in 2024 and $1.1M in 2023; perpetual license arrangement with Vilex LLC; mortgage with Tawani Enterprises (balance $0.6M at 12/31/2024) .
- Board nominations: Squadron designates certain directors per 2017 Stockholders’ Agreement, shaping board composition .
- Audit oversight: Independent Audit Committee and annual auditor appointment endorsed; audit fees $1.545M (2024) vs $1.251M (2023) .
Vesting Schedules and Insider Selling Pressure
- Upcoming vest releases: 30,000 shares vest 3/15/2026; 57,018 shares vest 3/15/2027 .
- 2024 vesting: 7,119 shares vested on 3/2/2024 ($199,830 value) .
- Trading constraints: Company prohibits hedging/pledging and imposes blackout periods; any potential selling pressure around vest dates is moderated by policy and individual decisions .
Compensation Committee Analysis
- Members: Chair Terry Schlotterback; members Dr. George Dyer and Jimmy McDonald; all independent, non-employee directors .
- Consultant: NFP Compensation Consulting engaged for market data and philosophy; base salaries targeted at ≥50th percentile per NFP data; no conflicts noted .
- Meetings: Three in 2024; annual charter review and risk assessment of compensation policies .
Equity Plan and Governance Features (2024 Plan)
- Share reserve: 1,629,000; minimum 1-year vesting; CEO post-vesting 1-year holding on awards; no liberal recycling; change-in-control vesting at 100% of target for performance awards; no evergreen .
Investment Implications
- Alignment: Hite’s package ties variable pay to revenue and Adjusted EBITDA with multi-year equity vesting and robust clawback/anti-hedging rules, supporting alignment with long-term value .
- Retention risk: Strong severance economics (30 months salary + 2.5× bonus) and 30-month non-compete reduce near-term attrition risk; upcoming vest schedules (2026/2027) create retention hooks .
- Governance: Dual role (COO/CFO + director) is mitigated by board leadership separation, Lead Independent Director, and independent committees; related-party ties via Squadron warrant continued monitoring .
- Trading signals: Anti-hedging/pledging and blackout policies limit aggressive insider selling; watch vesting windows (March 2026/2027) and any Form 4 activity for incremental signals .
Note on fundamentals: EBITDA and EBITDA Margin values marked with * are retrieved from S&P Global.