Michael J. Koss
About Michael J. Koss
Michael J. Koss (age 71) is Chairman and Chief Executive Officer of Koss Corporation. He has held various positions since 1976, was elected President and COO in 1987, became CEO in 1991, Vice-Chairman in 1998, and Chairman in 2015. He has served as a director since 1985, bringing deep operational, strategic, and product development expertise to the Board . Performance context: the company’s Pay vs Performance table shows total shareholder return (TSR) on a $100 initial investment of 51.7 (FY2023), 64.0 (FY2024), and 73.4 (FY2025), with net income of $8.32M (FY2023) and losses of $(0.95)M (FY2024) and $(0.87)M (FY2025) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Koss Corporation | Various roles since joining | Since 1976 | Long-standing leadership in product development and operations |
| Koss Corporation | President & COO | 1987–1991 | Oversight of daily operations and product execution |
| Koss Corporation | Chief Executive Officer | 1991–present | Strategy and execution; driving new product development |
| Koss Corporation | Vice-Chairman | 1998 | Board leadership transition role |
| Koss Corporation | Chairman | 2015–present | Combined CEO/Chairman; board leadership and governance |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| STRATTEC Security Corporation | Director | Until FY2024 | External board experience; term concluded in FY2024 |
| Koss Foundation | Officer | Ongoing | Philanthropic leadership; holds 217,068 KOSS shares at foundation |
Fixed Compensation
| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
| Base Salary ($) | 325,000 | 325,000 | 325,000 | 325,000 |
| All Other Compensation ($) | 42,735 | 45,038 | 58,817 | 54,509 |
| Total ($) | 416,729 | 703,567 | 383,817 | 379,509 |
| Notes (perquisites detail) | 401(k) match, car, life, supplemental medical, disability; includes true-up in 2023 | 401(k) match, car, life, supplemental medical, disability | 401(k) match $7,563; car $1,716; life $16,071; supplemental medical $12,348; disability $8,146 | 401(k) match $7,688; car $1,531; life $23,132; supplemental medical $13,602; disability $8,146 |
Performance Compensation
| Year | Incentive Type | Metric(s) | Weighting | Target | Actual | Payout ($) | Vesting Terms |
|---|---|---|---|---|---|---|---|
| FY2023 | Non-Equity Incentive Plan | Company pre-tax earnings | Not disclosed | Not disclosed | Not disclosed | 333,529 | Cash (no equity vesting) |
| FY2024 | Non-Equity Incentive Plan | N/A (no payout for CEO) | — | — | — | — | — |
| FY2025 | Non-Equity Incentive Plan | N/A (no payout for CEO) | — | — | — | — | — |
The company states it ties senior executive pay to performance and has adopted clawback policies; it does not provide tax gross-ups .
Equity Ownership & Alignment
| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
| Beneficially Owned Shares | 4,233,410 | 4,153,410 | 4,018,410 | 3,858,410 |
| Ownership % of Outstanding | 44.53% | 43.65% | 42.48% | 40.80% |
| Options Exercisable within 60 days | 360,000 | 280,000 | 160,000 | 0 (none) |
Ownership breakdown (as of Aug 25, 2025):
- Voting Trust: 2,696,634 shares, Michael J. Koss as sole voting trustee with full voting and shared dispositive power; term indefinite .
- KESOT (employee stock ownership plan) allocation to his account: 157,801 shares .
- Koss Foundation: 217,068 shares; he is an officer .
- No options exercisable within 60 days as of the 2025 record date .
- Hedging transactions are prohibited under the Insider Trading and Tipping Policy; no pledging policy disclosure noted .
Equity plan capacity and overhang:
- 2023 Equity Incentive Plan authorized 2,000,000 shares; as of June 30, 2025, no awards had been granted under the 2023 Plan .
- Shares remaining available for future issuance: 3,167,219; legacy options outstanding to be issued upon exercise: 253,357 at $1.93 weighted average exercise price .
Vesting Schedules and Option Overhang/Selling Pressure
| Grant Date | Holder | Options Exercisable | Exercise Price | Vesting | Expiration | Status |
|---|---|---|---|---|---|---|
| 07/24/2019 | Michael J. Koss | 160,000 | $2.17 | 25% per year over 4 years | 07/24/2024 | Expired FY2024 |
| 07/22/2020 | Michael J. Koss | 160,000 (as of FY2025) | $1.90 | 25% per year over 4 years | 07/22/2025 | Expired unexercised |
- CEO currently has no exercisable options and no unvested equity from the 2023 Plan; near-term insider selling pressure from option exercises appears limited for the CEO. Note: The company disclosed late Form 4 filings for family insiders (John C. Koss, Jr. and Michael J. Koss, Jr.) related to June 2025 option exercises and same-day sales due to administrative oversight; no such delinquency was disclosed for Michael J. Koss (CEO) .
Employment Terms
- Employment agreements: The company has not entered into employment agreements, severance agreements, or change-in-control arrangements with any executive officers .
- Clawback policy: Company states clawbacks apply in certain circumstances (policy adopted; details not expanded in proxy) .
- Hedging: Officers and directors are prohibited from hedging/monetization transactions (e.g., collars, forward contracts) .
- SERP (Supplemental Executive Retirement Plan): Pays 2% of base salary multiplied by years of service, using the average base salary in the three years preceding retirement; lifetime benefit for executive, then spouse; liability recorded $2,226,454 (June 30, 2025) and $2,093,124 (June 30, 2024) .
- Perquisites for FY2025: 401(k) match $7,688; car-related $1,531; life insurance $23,132; supplemental medical $13,602; disability insurance $8,146 .
Performance & Track Record (Pay vs Performance reference)
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| PEO “Compensation Actually Paid” ($) | 820,892 | 424,797 | 572,037 |
| TSR – Value of initial $100 investment | 51.7 | 64.0 | 73.4 |
| Net Income (Loss) ($) | 8,319,212 | (950,911) | (874,831) |
Board Governance & Service
- Board leadership: Michael J. Koss serves as both Chairman and CEO; Board rationale cites alignment and streamlined process. Lead Independent Director: Thomas L. Doerr .
- Board independence: As of 2025, four non-executive directors were independent; following 2025 meeting and retirement of one director, the company expects 3 of 5 directors to be independent .
- Committees (all independent directors): Audit (Chair: William J. Sweasy; member Lillie added in FY2025), Compensation (Chair: Doerr), and Nominating (Chair: Doerr). CEO is not a member of these committees .
- Meeting attendance: 100% attendance by all directors at Board and committee meetings in FY2025 .
- Director compensation: CEO receives no additional board compensation; non-employee directors receive $17,000 annual retainer plus meeting fees and chair stipends; FY2025 cash fees paid to non-employee directors ranged $34,500–$41,000 .
Related-Party Transactions (Governance Risk)
- Headquarters lease: Company leases its Milwaukee facility from Koss Holdings, LLC—controlled by family trusts of beneficiaries of the former Chairman; lease extended to June 30, 2028 with a second extension to June 30, 2033; annual rent $380,000 through 2028, then $397,000 through 2033; company pays maintenance, insurance, taxes .
Say-on-Pay & Shareholder Feedback
- The proxy seeks annual advisory approval; the company highlights pay-for-performance design, clawbacks, and no tax gross-ups. Specific approval percentages were not disclosed in the 2024 or 2025 proxies .
Compensation Structure Analysis
- Mix and sensitivity: CEO total comp is predominantly fixed salary plus limited perquisites in FY2024–FY2025, with no non-equity incentive payouts in these two years, consistent with reported net losses; FY2023 included a sizable non-equity payout tied to pre-tax earnings .
- Equity usage: No equity awards have been granted under the 2023 Plan as of June 30, 2025; CEO’s legacy options from 2019 and 2020 have expired (2024 and 2025), reducing near-term equity overhang for the CEO personally .
- Peer benchmarking: Compensation Committee cites qualitative/quantitative reviews and peer company data; no outside compensation consultants are used; specific peer group composition and target pay percentiles are not disclosed .
Equity Ownership & Alignment (Additional Governance Notes)
- Significant insider alignment: Michael J. Koss beneficially owns ~41% of shares, including voting control over 2.7M shares via the Voting Trust, aligning economic outcomes but concentrating control .
- Hedging prohibited; no disclosures of stock pledging or formal executive stock ownership guidelines were found in the proxies .
Employment Terms (Severance/Change-of-Control)
- No employment contracts, severance, or change-of-control multipliers; no single/double trigger acceleration terms disclosed for executives .
Board Service History and Dual-Role Implications
- Service: Director since 1985; Chairman since 2015; CEO since 1991 .
- Committees: CEO is not on Audit/Compensation/Nominating (all independent); board uses a Lead Independent Director structure to mitigate combined CEO/Chairman governance concerns .
- Independence: Expected independent majority (3 of 5) post-2025 meeting; 100% meeting attendance supports active oversight .
Investment Implications
- Alignment vs. control: Very high insider ownership (~41%) and voting control through the family Voting Trust align CEO with shareholders but centralize control; monitor governance checks via the Lead Independent Director and independent committees .
- Low variable pay in loss years: Absence of CEO incentive payouts in FY2024–FY2025 indicates restraint and alignment with negative net income; however, limited use of performance-based equity may reduce at-risk incentives going forward .
- Limited near-term selling pressure: CEO had no exercisable options as of the 2025 record date; legacy options expired unexercised in 2024 and 2025. Family insiders (not the CEO) reported late filings surrounding June 2025 exercises/sales; monitor broader family transactions for liquidity signals .
- Retention and succession: No employment/severance protections reduce contractual retention risk, partly offset by a sizable lifetime SERP benefit; succession risk should be monitored amid family involvement and pending retirement of John C. Koss, Jr. no sooner than June 30, 2026 .
- Governance red flags to track: Related-party headquarters lease through 2033; combined CEO/Chairman structure (mitigated by independent committees and a Lead Independent Director); absence of disclosed stock pledging policy or ownership guidelines .