Orlando Zayas

About Orlando Zayas

Chief Executive Officer (CEO) of Katapult Holdings, Inc. since June 2021; previously CEO of Legacy Katapult since September 2017. He holds a B.B.A. from the University of Houston and an M.B.A. from the University of Texas . Age 62 as of the 2025 proxy; serves as a Class III director with term expiring at the 2027 annual meeting and is not independent; the Board Chair is independent (Brian Hirsch) . Under his tenure, Katapult’s 2024 net loss improved to $25.9M from $36.7M in 2023; however, cumulative TSR over the 2023–2024 measurement windows implies a significant drawdown (value of initial $100 investment to $28 in 2024 vs $45 in 2023) . Operationally, 2024 saw $127M of gross originations begin in the App Marketplace (including ~$77M through KPay), and >50% of 2024 gross originations originated in Katapult’s ecosystem .

Past Roles

External Roles

Fixed Compensation

Notes:

• 2023 STIP metrics: gross originations, revenue, and Adjusted EBITDA, equally weighted with 50% payout at 85% of target and 200% at 130% of target; Compensation Committee retained discretion . The same framework was used for 2024 .

Performance Compensation

• Annual cash incentives (STIP) | Component | Weight | Threshold | Target | Max | Payout Curve | Notes | |---|---:|---:|---:|---:|---|---| | Gross Originations | ~33% | 85% (50% payout) | 100% | 130% (200% payout) | Linear between points | 2023 design; same design for 2024 . | | Revenue | ~33% | 85% (50% payout) | 100% | 130% (200% payout) | Linear between points | 2023 restatement reduced revenue performance from 88.6% to 86.4% . | | Adjusted EBITDA | ~33% | 85% (50% payout) | 100% | 130% (200% payout) | Linear between points | 2023 restatement reduced achievement from 125.7% to 97.2%; drove clawback . |

• Equity awards and vesting (CEO grants and outstanding awards) | Award Type | Grant Date | Shares/Options | Terms (Strike/Value) | Vesting Schedule | |---|---|---:|---|---| | RSU | 5/6/2024 | 26,500 | 12/31/24 market value $179,140 (at $6.76/sh) | 1/3 on 3/15/2025, balance quarterly over 2 years, continued service required . | | RSU | 6/16/2023 | 21,200 | 12/29/23 market value $230,868 | 1/3 on 3/15/2024; remainder quarterly over next 2 years . | | RSU | 3/15/2022 | 26,621 (unvested at 12/31/23) | 12/29/23 market value $289,903 | 4-year schedule: 25% year 1, then quarterly over 3 years . | | RSU | 9/9/2021 | 4,592 (unvested at 12/31/23) | 12/29/23 market value $50,007 | 4-year schedule: 25% year 1, then quarterly over 3 years . | | Stock Options | 11/21/2017 | 35,299 | $13.50 strike; expire 11/20/2027 | Fully vested at business combination . | | Stock Options | 9/5/2019 | 112,467 | $4.75 strike; expire 9/4/2029 | Fully vested at business combination . | | Stock Options | 9/5/2019 | 22,173 | $4.75 strike; expire 9/4/2029 | Fully vested at business combination . |

• Yearly “Stock Awards” value in Summary Compensation Table (includes RSUs/PSUs, grant-date fair value, ASC 718) | Year | CEO Stock Awards (USD) | |---|---:| | 2023 | $463,644 | | 2024 | $410,220 |

Clawback/Recovery:

• SEC/Nasdaq-compliant Clawback Policy adopted Oct 2, 2023. Following a 2023 restatement, the Compensation Committee recovered the gross erroneously awarded STIP amounts; for Zayas, $68,758 was recovered in 2024. CFO PSUs earned were also reduced to 97.2% of target with 573 PSUs canceled/recovered. Policy prohibits hedging/pledging and imposes 10b5‑1 plan controls .

Equity Ownership & Alignment

• Beneficial ownership (CEO) | Date (Record) | Total Beneficial Ownership (Shares) | % of Outstanding | Components and Notes | |---|---:|---:|---| | Apr 10, 2024 | 262,900 | 6.1% | Includes 169,939 options; 5,642 RSUs vesting within 60 days; 20,468 earn‑out shares . | | Apr 10, 2025 | 282,935 | 6.0% | Includes 169,939 options; 6,932 RSUs vesting within 60 days; 20,468 earn‑out shares . | | Jun 12, 2025 (special meeting table) | 280,205 | 6.2% | Includes options; earn‑out shares; basis 4,536,960 shares outstanding . |

Alignment policies and signals:

• Ownership guidelines require CEO to hold equity equal to 5x base salary within 5 years (counting outright, trust, vested deferred units, and vested RSUs net of taxes) .
• Prohibitions on hedging, short sales, short-term trading, and pledging; as of the record dates, none of the directors or officers had pledged company securities .
• Near-term vesting supply: RSUs vesting within 60 days of the respective record dates were 5,642 (2024) and 6,932 (2025), a modest potential flow relative to float .

Employment Terms

• Employment agreement: Second Amended & Restated Employment Agreement effective May 4, 2021, continuing as CEO of Katapult .
• Severance (non‑CIC termination): 12 months base salary; pro‑rated annual bonus; company‑paid COBRA for 12 months; accelerated vesting of time‑based equity that would have vested during the 12‑month severance period; extended option exercise to earliest of 18 months post‑termination, a change in control, or option expiry; subject to release of claims .
• Change‑in‑Control (double‑trigger): If terminated without cause or for good reason within 3 months before or 12 months after a CIC, lump sum 2x base salary + 2x target bonus; 18 months COBRA; acceleration of long‑term incentives to extent not assumed; extended option exercise as above . Company emphasizes no single‑trigger vesting on equity awards .
• Good Reason / Cause: Standard protections including material adverse role changes, salary reductions, relocation, or company breaches; Cause includes indictable offenses, fraud/gross misconduct, policy breaches, and willful fiduciary breaches, with cure periods where applicable .
• Key‑man risk: Credit agreement defines a “Key Man Trigger Event” upon failure of Orlando Zayas to be CEO, signaling lender sensitivity to leadership continuity .

Board Governance

• Role and independence: CEO and director (Class III); not independent. Board Chair is independent (Brian Hirsch); five of six directors are independent .
• Committees: Zayas serves on no board committees; Audit chaired by Don Gayhardt; Compensation chaired by Jane J. Thompson; Nominating & Corporate Governance chaired by Joyce Phillips (until her term end at the 2025 meeting) .
• Attendance and structure: Board held 21 meetings in 2024; all directors attended ≥75% of meetings; regular executive sessions of independents; separate CEO and Chair roles .
• Director pay: Zayas receives no additional compensation for board service .

Performance & Track Record

• Operating highlights (2024): ~$127M of gross originations began in the App Marketplace; ~$77M through KPay; >50% of 2024 originations started in Katapult’s ecosystem .
• Financial progress: Net loss improved from $36.7M (2023) to $25.9M (2024) . Pay‑versus‑performance table indicates substantial negative TSR over 2023–2024 measurement windows (fixed $100 to $45 in 2023, to $28 in 2024), underscoring shareholder return headwinds despite operational progress .
• Governance/compliance: 2023 restatement prompted clawbacks of executive incentive pay; material weaknesses in internal control identified in prior years were remediated as of December 31, 2024 (with 2025 proxy noting remediation) .

Capital Structure and Refinancing Overhang (governance implications)

• June 2025 refinancing added $110M revolving facility and ~$32.7M PIK term loan; warrants for 486,264 shares at $0.01 issued to Blue Owl affiliates; term loan convertible at the greater of $2.00 or a 50% discount to 20‑day VWAP (discount reduces above $10), with potential to reach ~80% of fully diluted equity post‑conversion. Blue Owl and affiliates could own ~83% on full exercise/convert; Blue Owl also obtained a board observer right. Failure to secure stockholder approval would have risked default and potential foreclosure . These lender rights and potential dilution create strategic and governance complexity during Zayas’ tenure .

Investment Implications

• Pay‑for‑performance alignment: CEO pay features a high at‑risk mix (100% target bonus; multi‑year RSUs) with STIP tied to originations, revenue, and Adjusted EBITDA; robust clawback and hedging/pledging prohibitions strengthen alignment. However, negative TSR and 2023 restatement (with subsequent clawbacks) temper perceived alignment quality, and Blue Owl’s potential control via conversion adds overhang .
• Retention risk: The loan’s “Key Man Trigger Event” tied to Zayas’ role indicates lender reliance on his leadership. His beneficial ownership (6.0–6.2%) and ownership guidelines (5x salary) further lock in alignment, while near‑term RSU vesting supply appears modest relative to float (5.6k–6.9k shares within 60 days of record dates) .
• Governance structure: Separation of CEO/Chair mitigates dual‑role concerns; independent committees and regular executive sessions support oversight, though Blue Owl’s board observer and potential ownership concentration are governance watch items during any strategic process .
• Trading signals: Upcoming RSU vesting is small; larger technical pressure could arise from any warrant exercises or term loan conversions under the refinancing terms rather than insider selling. Monitoring upcoming 8‑Ks and proxy updates around any conversion/exercise activity and changes to executive equity grants is prudent .