Richard Russell
LM FUNDING AMERICAAbout Richard Russell
Richard “Rick” Russell is Chief Financial Officer of LM Funding America (LMFA), age 64, serving since November 2017. He holds a B.S. in Accounting and an M.Tax from the University of Alabama, a B.A. in International Studies from the University of South Florida, and an MBA from the University of Tampa . His public-company background spans finance, internal audit, reporting, and controllership roles at Mission Health Communities, Cott Corporation, Quality Distribution (NASDAQ: QLTY), and Danka (NASDAQ/LSE: DANKY) . LMFA’s pay-versus-performance table shows weak multi-year shareholder returns ($100 initial investment value: $16.47 in 2022, $18.41 in 2023, $7.37 in 2024) and persistent losses, underscoring the importance of rigorous pay alignment and cost discipline .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mission Health Communities | Chief Financial Officer | 2013–2016 | Led finance for multi-site healthcare operator; public-company readiness and controls experience . |
| Cott Corporation | Senior Director of Finance; Senior Director of Internal Auditing; Assistant Corporate Controller | 2007–2013 | Led finance and audit functions at a large public beverage company; strengthened internal controls and reporting . |
| Quality Distribution (QLTY) | Director of Financial Reporting & Internal Controls | Prior to 2007 | SEC reporting and internal controls for a previously listed company . |
| Danka (DANKY) | Director of Reporting | 2001–2004 | Financial reporting for a dual-listed office imaging company . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| SeaStar Medical Holding Corporation (NASDAQ: ICU) | Director | 2021–2024 | Board service at a medical technology company . |
| Generation Income Properties (NASDAQ: GIPR) | Part-time CFO | Dec 2019–Feb 2022 | Public REIT finance leadership . |
| Trident Brands (OTC: TDNT) | Director | Appointed Mar 1, 2020 | Consumer products board role . |
| Hillsborough County Internal Audit Committee | Chairman; Member | 2016–Apr 2021; reappointed Oct 2021–Apr 2024 | Public-sector audit oversight . |
Fixed Compensation
| Component | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 500,000 | 550,000 | 550,000 |
| All Other Compensation ($) | 32,559 | 48,467 | 53,238 |
| Notes | Initial base salary per 2021 restated agreement was $500,000 . | — | — |
Performance Compensation
| Component | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Annual Bonus ($) | — | — | 275,000 |
| Stock Awards ($) | — | 488,345 | — |
| Option Awards ($) | — | 356,503 | — |
| Comment | Company did not disclose specific annual incentive metrics, weightings, or payout formulas for NEOs; only outcomes/award values are disclosed . | 2023 equity mix increased at-risk pay . | Cash bonus resumed; no equity awards in 2024 . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 1,123,379 shares (6.93% of outstanding) . |
| Direct Common Shares | 108,334 . |
| Options (exercisable within 60 days) | 166,667 shares underlying options . |
| Other Derivatives | 843,833 shares issuable upon exercise of warrants held by BRRR, LLC, an entity over which Bruce Rodgers and Richard Russell each have beneficial ownership . |
| Pledged Shares | No pledging disclosure identified; company has anti-hedging/monetization prohibitions in insider trading policy . |
| Ownership Guidelines | Not disclosed. |
| Hedging Policy | Explicitly prohibits hedging/monetization transactions for directors, officers, and employees . |
Outstanding Equity Awards (as of Dec 31, 2024)
| Grant/Instrument | Exercisable | Unexercisable | Exercise Price ($) | Expiration |
|---|---|---|---|---|
| Stock Options | 83,333 | 83,333 | 4.51 | 4/20/2033 |
| Stock Options | 83 | — | 3,750.00 | 11/29/2027 |
| Stock Options | 250 | — | 300.00 | 5/29/2028 |
| Note | Footnotes confirm 166,667 options in aggregate (exercisable within 60 days), consistent with the 83,333/83,333 lot . |
2022 Option Cancellations: On Nov 18, 2022, Russell voluntarily canceled 1,800,000 options at $5.95 to free up pool capacity for broader equity grants; no consideration received . This reduced potential overhang and improved plan flexibility.
Employment Terms
- Restated Employment Agreement (Oct 2021): Initial base salary $500,000; grant of 25,279 common shares (paid Feb 2022, net of taxes); non-compete and confidentiality provisions .
- Amendment (Nov 16, 2022): Eliminated change-of-control bonus provisions; severance if terminated without cause or for good reason equals 2x salary plus the average bonus for prior three years, paid over 24 months, plus up to 24 months COBRA reimbursements; Section 409A compliance clarified .
- Equity Acceleration: The amended summary does not state continued acceleration of unvested awards for Russell; only Duran’s agreement expressly includes accelerated vesting on certain terminations (for contrast) .
Performance & Track Record
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Pay vs Performance and TSR (company-level):
Metric FY 2022 FY 2023 FY 2024 Value of Initial $100 Investment (TSR) ($) 16.47 18.41 7.37 Net (Loss) Income ($000s) (29,240) (15,944) (7,655) -
Operations commentary (Q1 2025): Russell highlighted bitcoin mining revenue of ~$2.3M (+25% q/q), power sales of ~$150k in Q1 and ~$120k in April to offset mining costs, and improved mining margin to 38.5% vs 31.2% in Q4 2024; net loss of $5.4M driven largely by $1.8M non-cash BTC mark, with reversal potential tied to BTC price recovery .
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Revenues (S&P Global consensus history)
Metric FY 2022 FY 2023 FY 2024 Revenues ($) 161,618* 144,514* 123,444* Values retrieved from S&P Global.*
Compensation Structure Analysis
- Mix shift: 2023 emphasized equity (stock and options totaling ~$845k), with no cash bonus; 2024 flipped to cash (50% bonus-to-salary) and no equity awards .
- Option cancellations (2022): Proactively reduced outsized legacy option grants to support broader employee equity participation; not a repricing (no consideration to executives) .
- Clawback and governance: 2021 Omnibus Plan documents authorize clawbacks/recoupment; anti-hedging policy prohibits derivatives/monetization transactions—both are alignment-positive controls .
- Performance metrics transparency: The company does not disclose annual incentive metric weightings/targets for NEOs, limiting external assessment of pay-for-performance rigor .
Risk Indicators & Red Flags
- Economic severance terms: 2x base salary plus average bonus (prior three years) over 24 months, plus COBRA up to 24 months—substantial but typical for CFOs; change-of-control bonuses were eliminated (positive governance) .
- Derivative overhang via related entity: Russell shares beneficial ownership of 843,833 warrants through BRRR, LLC with CEO Bruce Rodgers; could add selling pressure if exercised, though detailed terms are not disclosed here .
- Disclosure gaps: No explicit pledging policy disclosure beyond anti-hedging; no ownership guidelines disclosed; limited disclosure on incentive metrics .
Equity Ownership & Vesting Detail (Russell)
| Category | Shares/Units | Notes |
|---|---|---|
| Direct common | 108,334 | Per beneficial ownership footnote . |
| Options exercisable (≤60 days) | 166,667 | $4.51 strike; 2033 expiry; plus very small legacy grants at high strikes . |
| Warrants via BRRR, LLC | 843,833 | Shared beneficial ownership with CEO . |
| Total beneficial ownership | 1,123,379 (6.93%) | On 15,198,388 shares outstanding . |
Employment Terms (Condensed)
- Effective date/tenure: CFO since Nov 2017 .
- Base pay: Initially $500,000 (2021 agreement), rising to $550,000 by 2023–2024 .
- 2021 grant: 25,279 common shares (delivered Feb 2022; shares withheld for taxes) .
- Severance: 2x salary + average bonus (3 years) over 24 months + up to 24 months COBRA reimbursement; change-of-control bonus deleted in 2022 amendment .
- Restrictive covenants: Non-compete and confidentiality provisions included .
Investment Implications
- Alignment: Russell’s sizable beneficial stake (6.93%), option position (166.7k), and anti-hedging restrictions support alignment; removal of change-of-control bonuses is a governance positive .
- Cash vs equity mix: 2023 skewed to equity (higher at-risk pay during a volatile crypto cycle), while 2024 reintroduced a meaningful cash bonus despite ongoing losses, raising questions on payout calibration absent disclosed performance metrics .
- Overhang and selling pressure: The BRRR, LLC warrants represent a potential future source of share supply if exercised; monitor related exercises and any Form 4 activity for trading signals .
- Retention risk: Severance economics (2x salary + average bonus) and COBRA support retention, while prior large option cancellations reduce personal leverage to stock price; future equity grant cadence will be key for continued retention and incentive alignment .
Block-quoted sources:
- Executive biography and roles .
- Compensation tables and awards .
- Employment agreements and amendments .
- Equity ownership and awards .
- Governance: clawbacks and anti-hedging .
- Pay-versus-performance and TSR .
- Operations updates (Q1 2025) .