Scott Keeney
About Scott Keeney
Scott Keeney, age 60, is nLIGHT’s co-founder and has served as President & CEO since July 2000 and Chairman since February 2018. He holds a BA in Economics from the University of Washington and an MBA from Harvard Business School; prior roles include CEO of Aculight (1998–2000) and consultant at McKinsey (1993–1998) . Under his leadership, 2024 revenue was $198.5M with a GAAP net loss of $60.8M, and cumulative TSR since 2019 stood at 52 for 2024; total revenue by year was $270.1M (2021), $242.1M (2022), $209.9M (2023), and $198.5M (2024) . The compensation program emphasizes pay-for-performance with significant equity tied to TSR and financial targets, and 2024 annual cash incentives paid zero due to missed revenue and EBITDA thresholds .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Aculight Corporation | Chief Executive Officer | 1998–2000 | Led laser company later acquired by Lockheed Martin; operational and industry leadership experience |
| McKinsey & Company | Consultant | 1993–1998 | Strategy and operations expertise applied to technology businesses |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | No current external public company directorships disclosed in 2025 proxy |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $426,600 | $438,000 | $454,077 (paid) ; base rate increased to $460,000 effective April 2024 |
| Target Bonus (% of Salary) | — | 100% | 100% |
| Actual Cash Incentive ($) | $80,485 | $50,370 | $0 (thresholds not achieved) |
Performance Compensation
Annual Cash Incentive Structure (2024)
| Metric | Weight | Target | Actual | Payout | Vesting/Timing |
|---|---|---|---|---|---|
| Revenue ($M) | 25% | $232.1 | $198.5 | 0% (min 90% threshold unmet) | Annual plan; payout capped at 110% for revenue |
| Adjusted EBITDA ($M) | 75% | $7.2 | $(17.2) | 0% (min 25% threshold unmet) | Annual plan; payout curve to 200% at 175% achievement |
| Total | 100% | — | — | 0% | — |
Equity Awards (2024 and Special 2025)
| Grant Type | Grant Date | Shares (Target) | Key Performance Metric | Vesting Terms |
|---|---|---|---|---|
| Time-based RSUs (Annual) | 4/8/2024 | 150,000 | N/A | 1/3 vests 6/1/2025; then 1/12 quarterly for 8 quarters, subject to service |
| Performance RSUs (Annual) | 4/8/2024 | 150,000 | 3-year Relative TSR vs Russell 2000; 0–200% payout, capped at 100% if negative TSR | Cliff vest on 5/14/2027 of earned units, subject to service; earlier measurement if change in control |
| Performance RSUs (Prior cycles) | 2022; 2023 | 116,667 (2022 unearned units) ; 150,000 (2023 unearned units) | Relative TSR (program terms) | Vest on 8/14/2025 (2022) and 5/14/2026 (2023), subject to service |
| Special PRSUs (Price Hurdles) | 8/13/2025 | 1,200,000 | 60-day VWAP Stock Price Goals: $30, $35, $40 (each tranche ~1/3) | Earned units vest 50% on later of 1/3/2028 or certification and 50% on later of 1/3/2029 or certification; special change in control and termination protections per Amended Employment Agreement |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 1,538,163 shares; 3.1% of outstanding as of 4/14/2025 |
| Shares counted within 60 days | RSAs: 26,667; RSUs: 34,720; Options: 395,248 (exercisable) |
| Options Outstanding | 31,748 @ $1.10 exp. 7/1/2026; 99,706 @ $1.45 exp. 6/2/2027; 263,794 @ $1.45 exp. 6/2/2027 |
| 2024 Exercises/Vesting | 234,025 options exercised, $2,404,337 realized; 197,987 shares vested from stock awards, $2,444,379 value |
| Unvested Time-based RSUs (12/31/2024) | 26,667 (2021 grant; vests through 6/1/2025); 19,447 (2022 grant; quarterly); 62,504 (2023 grant; quarterly); 150,000 (2024 grant; starts 6/1/2025) |
| Unearned PRSUs (12/31/2024, target) | 116,667 (2022 cycle); 150,000 (2023 cycle); 150,000 (2024 cycle) |
| Ownership Guidelines | CEO must hold shares equal to 3x salary; executives met guidelines as of 12/31/2024 |
| Hedging/Pledging | Strictly prohibited by insider trading policy |
Employment Terms
| Term | Key Provision |
|---|---|
| Employment Agreement (initial) | March 2018; at-will |
| Severance (no change in control) | 12 months base salary + up to 12 months COBRA premiums (or cash equivalent); equity stays outstanding for up to 3 months or until change in control |
| Change-in-Control (double-trigger) | If terminated without cause or for good reason within 3 months before to 12 months after CIC: lump sum 18 months base salary + up to 18 months COBRA; 100% acceleration of unvested equity (performance awards deemed earned at greater of actual or 100% target unless award agreement provides otherwise) |
| Plan-level CIC treatment | If awards are not assumed/substituted, full vest; performance awards deemed earned at greater of target or actual immediately prior to CIC |
| Tax Gross-ups | None; 280G “best results” cutback applied |
| Clawback | Revised policy adopted Nov 2023 compliant with SEC/Nasdaq; mandatory recovery for restatements, last 3 completed fiscal years |
| Arbitration/Governing Law | Arbitration under proprietary agreements; governed by Washington law (as per 2025 Amended Employment Agreement) |
Board Governance
- Role: CEO and Chairman; company uses a Lead Independent Director (Bill Gossman) who presides over independent sessions and liaises with the Chair; lead independent director service generally limited to three years unless extended by the board .
- Independence: Board comprises eight directors; six independent; Scott Keeney is not independent .
- Committees: Audit (Link, Carlisle, Moore), Compensation (Gossman chair; Carano; Link), Nominating & Governance (Moore chair; Locke; Carlisle), Info & Technology Security (Nichols chair; Carano; Gossman). Keeney not a member of these committees .
- Meetings/Attendance: Seven board meetings in 2024; all directors met at least 75% attendance; independent executive sessions occur at least twice per year .
- Director pay and ownership: Non-employee director retainers and $80k annual RSU grants; director ownership guideline equals 3x annual cash retainer; compliance achieved or within window .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay: Approximately 97% approval of 2023 NEO compensation at the 2024 annual meeting, indicating strong support for pay practices .
- 2025 Annual Meeting: Advisory vote on NEO compensation included on agenda; board recommends “FOR” .
Compensation Structure Analysis
- Mix: ~90% of CEO 2024 target total direct compensation was equity and variable cash; 10% base salary, with half of equity time-based and half performance-based, reinforcing retention and TSR alignment .
- Metrics: Annual cash plan tied to revenue (25%) and adjusted EBITDA (75%); zero payout in 2024 due to underperformance (Revenue $198.5M vs $232.1M target; Adjusted EBITDA -$17.2M vs $7.2M target) .
- Long-term equity: PRSUs use multi-year relative TSR with a cap if TSR is negative; 2025 introduced special, one-time price-hurdle PRSUs requiring sustained 60-day VWAP thresholds ($30/$35/$40) for vesting, aiming to drive stock price growth and retention .
- Governance safeguards: Double-trigger CIC; no tax gross-ups; clawback policy; hedging/pledging prohibitions .
Risk Indicators & Red Flags
- Dual role (CEO + Chairman): Potential independence concern; mitigated by Lead Independent Director and regular executive sessions .
- Performance shortfall: 2024 negative adjusted EBITDA and missed revenue/EBITDA thresholds increased variable pay risk; no annual cash incentives paid .
- Special PRSUs (2025): Large grant size (1.2M target units) creates meaningful equity overhang but is performance-contingent; vesting depends on sustained price goals and service, with special CIC/termination protections that can accelerate service-vested awards and preserve performance-vesting eligibility under certain conditions .
- Insider selling pressure: 2024 option exercises (234,025 shares, $2.40M value) and substantial scheduled RSU vesting may necessitate tax-related sales; hedging and pledging prohibited .
Equity Ownership & Vesting Schedule (Detail)
| Category | Amount | Market Reference |
|---|---|---|
| Unvested Time-based RSUs (12/31/2024) | 26,667; 19,447; 62,504; 150,000 by grant cohorts | Market values disclosed using $10.49/share for 12/31/2024: $279,737; $203,999; $655,667; $1,573,500 respectively |
| Unearned PRSUs (targets at 12/31/2024) | 116,667 (2022); 150,000 (2023); 150,000 (2024) | Market values using $10.49/share: $1,223,837; $1,573,500; $1,573,500 respectively |
| Upcoming PRSU vest dates | 8/14/2025 (2022); 5/14/2026 (2023); 5/14/2027 (2024) | Subject to performance certification and service |
Employment & Change-in-Control Economics (Estimated at 12/31/2024)
| Scenario | Cash Salary | Health Benefits | Equity Acceleration | Total |
|---|---|---|---|---|
| No CIC – termination without cause | $460,000 | $19,059 | Equity remains outstanding for up to 3 months (eligibility for later CIC treatment) | $479,059 |
| CIC – termination without cause/for good reason | $690,000 | — | Stock awards: $7,083,740 (based on unvested/target counts and $10.49/share) | $7,802,329 |
Investment Implications
- Alignment and incentives: The 2025 special PRSUs create clear trading catalysts around sustained 60-day VWAP thresholds ($30/$35/$40). Monitor price trajectory, index-relative performance, and potential CIC scenarios that can trigger measurement/vesting mechanics .
- Retention risk vs. overhang: Large performance equity increases retention and goal alignment but adds dilution risk; however, vesting is strictly performance/service-contingent and policy frameworks (double-trigger CIC, clawback, no gross-ups) are shareholder-friendly .
- Near-term selling pressure: Scheduled RSU vesting and prior option exercises suggest periodic liquidity events for tax withholding; insider policy mitigates hedging/pledging risks .
- Governance: CEO-Chair dual role warrants continued focus on independent oversight; the Lead Independent Director and strong committee structure mitigate, and say-on-pay support (97%) indicates investor acceptance of the pay design despite 2024 underperformance .