Franco Poletti
LivaNovaAbout Franco Poletti
Franco Poletti, age 63, is President, Cardiopulmonary at LivaNova, confirmed in July 2024 after serving as interim head from August 2023; he joined legacy Sorin Group 30+ years ago, with core competencies in product development, positioning, launch, and sales execution; education: Istituto Tecnico Industriale G. Galilei (Mirandola, Italy) . 2024 performance context: company revenue grew 8.7% reported (9.3% cc; 10.7% organic), Cardiopulmonary revenue +13.1% reported (+14.1% cc), GAAP operating income $129.1M vs 2023 loss; 2022–2024 PSU outcomes: rTSR at 36th percentile (58% payout), ROIC 5.77% (78.5%), FCF 94% of $355M target (88.1%) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| LivaNova (legacy Sorin) | Global Product Manager | Jan 1991–Mar 2004 | Product development, positioning, launch; sales execution |
| LivaNova | VP, Sales, Europe & Japan | Jan 2008–Dec 2012 | Regional sales leadership, growth execution |
| LivaNova | VP, Sales, Europe | Jan 2013–Sep 2016 | Europe sales leadership |
| LivaNova | VP, Sales, Cardiopulmonary Europe | Feb 2018–Aug 2023 | Cardiopulmonary regional leadership |
| LivaNova | Interim President, Cardiopulmonary | Aug 2023–Jul 2024 | Transition leadership of BU |
| LivaNova | President, Cardiopulmonary | Jul 2024–present | BU leadership across portfolio |
| LivaNova | Managed Heart Valves | Jan 2013–Mar 2022 | Franchise management |
| LivaNova | Managed Cardiac Rhythm Management | Oct 2016–Jan 2018 | Franchise management |
| LivaNova | Managed Neuromodulation | Oct 2016–Mar 2022 | Franchise management |
External Roles
- None disclosed in the proxy .
Fixed Compensation
| Metric | 2024 |
|---|---|
| Base Salary ($) | $380,281 |
| All Other Compensation ($) | $326,184 |
Breakdown of 2024 “All Other Compensation”:
| Component | Amount ($) |
|---|---|
| Supplemental Health Insurance | $6,901 |
| Car Benefit/Lease | $11,309 |
| Retirement/Contribution Plan (incl. Italian TFR, supplementary pension) | $103,052 |
| Other: interim fixed allowance (CP GM ad interim) | $113,570 |
| Other: waiver on contract transition | $5,408 |
| Other: flexible benefit | $973 |
| Other: travel allowance | $8,115 |
| Other: cash in lieu of accrued vacation | $76,856 |
Performance Compensation
Short-Term Incentive Plan (STIP) – 2024
| Item | Details |
|---|---|
| Target Bonus % of Base | 65% |
| Target Bonus ($) | $323,404 |
| Non-Financial Goals (NFG) | Composite modifier across DTD clinical milestones; Epilepsy product/dev & commercial; Cardiopulmonary product software & capacity expansion; IT/cyber enhancements (±25% range) |
| Company Financial Performance Factor (FPF) | 50% Net Sales; 50% Adjusted Operating Income |
| Company Achievement (for NEOs) | FPF 139.4%; NFG Modifier 90% → BPF payout 125.4% of target |
| Poletti BU Weighting | 30% LivaNova FPF + 70% Cardiopulmonary BU FPF (BU: 50% revenue, 50% adjusted operating income), then NFG modifier |
| Poletti Financial Achievement | 149.8% → total STIP payout 132.0% of target |
| Actual Bonus Paid ($) | $426,894 (deducted for two interim variable allowance payouts €73,500 and €74,725) |
Long-Term Incentive Plan (LTIP) – 2024 Grants (Grant-date fair value)
| Instrument | Value ($) |
|---|---|
| RSUs | $250,000 |
| SARs | $250,000 |
| rTSR PSUs (3-year cliff) | $250,000 |
| FCF PSUs (3-year cliff) | $125,000 |
| ROIC PSUs (3-year cliff) | $125,000 |
| Total | $1,000,000 |
Grants detail (counts and terms)
| Grant Date | RSUs (#) | SARs (#) | SAR Exercise Price ($) | SAR Expiration | PSUs Target (#) |
|---|---|---|---|---|---|
| 3/30/2024 | 2,234 | 4,706 | 55.94 | 3/30/2034 | rTSR 2,234; FCF 2,234; ROIC 4,468 |
| 9/15/2024 | 2,575 | 5,885 | 48.53 | 9/15/2034 | rTSR 2,574; FCF 2,574; ROIC 5,150 |
PSU Vesting Outcomes (2012–2024 cycle measured in 2024)
| Metric | Target | Actual | Payout |
|---|---|---|---|
| Relative TSR (percentile) | — | 36th percentile | 58.0% |
| ROIC (three-year avg) | 6.31% | 5.77% | 78.5% |
| Adjusted FCF (three-year total) | $355M | $333.8M | 88.1% |
2024 Vested Shares
| Name | Shares Vested (#) | Value Realized ($) |
|---|---|---|
| Franco Poletti | 1,967 | $105,741 |
Summary Compensation (2024)
| Component | Amount ($) |
|---|---|
| Salary | $380,281 |
| Stock Awards | $835,501 |
| Option/SAR Awards | $249,988 |
| Non-Equity Incentive (STIP) | $426,894 |
| All Other Compensation | $326,184 |
| Total | $2,218,848 |
Equity Ownership & Alignment
Beneficial Ownership (as of Apr 14, 2025)
| Item | Amount |
|---|---|
| Shares Owned | 8,152 |
| Shares Acquirable within 60 days | 0 |
| % of Class | <1% |
Outstanding Awards (as of Mar 31, 2025; target counts)
| Instrument | Count |
|---|---|
| SARs | 27,418 |
| RSUs | 12,255 |
| PSUs (target) | 21,661 |
Selected Outstanding SARs and Options (status, price, maturity)
| Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration |
|---|---|---|---|
| 711 | 2,130 | 42.71 | 3/30/2033 |
| — | 4,706 | 55.94 | 3/30/2034 |
| 829 | 829 | 82.04 | 3/30/2032 |
| 1,516 | 505 | 73.25 | 3/30/2031 |
| 3,357 | — | 43.57 | 3/30/2030 |
| 1,674 | — | 97.25 | 3/30/2029 |
| 2,036 | — | 88.38 | 3/15/2028 |
| 2,910 | — | 56.17 | 5/5/2027 |
| 2,140 | — | 57.60 | 3/11/2026 |
Ownership Guidelines and Policies
- Executive stock ownership guideline: 3× base salary for executive officers (5× for CEO); retain 100% of net shares until guideline achieved .
- Hedging and pledging prohibited for employees and directors (and their family members) .
Employment Terms
| Term | Details |
|---|---|
| Contract Type | Fixed-term (Italy), ending July 31, 2026 |
| Severance – Termination without Cause/Good Reason | Base salary paid to contract end ($787,780) + benefits ($137,030) |
| Change-in-Control (Separation) | Base salary to contract end ($787,780) + benefits ($137,030) + accelerated vesting value of 7,295 RSUs and 9,617 PSUs (at target) at $46.31/share + in-the-money SARs (711 SARs at $42.71); double-trigger applies to awards post Feb 15, 2023 |
| Disability | Base salary to contract end ($787,780) + benefits ($137,030) + accelerated vesting for RSUs granted ≥ Mar 30, 2023 (6,751) and PSUs (9,617) at $46.31 + in-the-money SARs (711 @ $42.71) |
| Death | Basic term life insurance (Italy) + accelerated vesting for RSUs granted ≥ Mar 30, 2023 (6,751) and PSUs (9,617) at $46.31 + in-the-money SARs (711 @ $42.71) |
| Clawbacks | Company Compensation Recoupment Policy and Incentive Compensation Clawback Policy; malus/claw-back provisions apply to awards under incentive plans |
| Repricing | Prohibited without shareholder approval |
| Tax Gross-ups | Company does not pay excise tax gross-ups |
| Hedging/Pledging | Prohibited by Insider Trading Policy |
Investment Implications
- Pay-for-performance alignment is credible: 2024 STIP payout 132% for Poletti was formula-driven with BU weighting and a company NFG modifier (90%); PSUs vest on three-year metrics (rTSR, ROIC, FCF), and 2022–2024 outcomes show balanced payouts, with TSR below median (36th percentile, 58% payout) limiting windfalls and indicating market-relative discipline .
- Retention risk appears mitigated by meaningful unvested equity over multi-year cliffs (RSUs/PSUs/SARs) and a fixed-term contract through July 2026; change-in-control economics use double-trigger acceleration and primarily reflect base-to-term continue-pay plus accelerated but capped-in-value equity—reducing single-trigger risk .
- Insider selling pressure: 2024 vesting was modest (1,967 shares; ~$106k value) and ownership remains low (<1% of class), but hedging/pledging prohibitions and stock ownership guidelines (3× salary for executives) support alignment; monitor future vesting events and any Form 4 sales around vest dates .
- Governance and risk controls (clawbacks, no repricing, no tax gross-ups, strict insider policy) are robust; 2024 say-on-pay at 95% suggests shareholder support for the compensation framework used across NEOs including Poletti .