James Sottile
About James Sottile
- Executive Vice President, Chief Legal Officer and Corporate Secretary of Light & Wonder; employment agreement dated August 2, 2021 (effective September 1, 2021). Announced retirement effective December 31, 2025, with a one‑year consulting arrangement thereafter .
- 2024 pay mix remains performance‑linked: base salary $717,500, target bonus 75% of salary, and equity awards split evenly between time‑vesting RSUs and performance RSUs tied to relative TSR and Consolidated AEBITDA .
- Company performance metrics driving pay outcomes: 2024 LWICP achieved ~98.4% of target on a consolidated basis; Committee applied negative discretion for certain employees, resulting in Sottile’s payout at 91.3% of target (paid in vested shares) .
- Long‑term performance RSUs: 2022–2024 cycle vested at 100% for TSR (71st percentile vs S&P 400) and 91.3% for AEBITDA; 2021–2023 cycle vested at 100% for TSR (92nd percentile) and 93% for AEBITDA .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $700,000 | $717,500 (2.5% increase) |
| Target Bonus (% of Salary) | 75% | 75% |
| Threshold/Target/Max Bonus Opportunity (% of Salary) | 19% / 75% / 150% | 19% / 75% / 150% |
| Actual Bonus Paid ($) | $599,025 (114.1% of target; paid in vested shares) | $488,147 (91.3% of target; paid in vested shares) |
Performance Compensation
Annual Incentive Plan (LWICP) – Targets and Outcomes
| Metric (Consolidated) | 2023 Target ($mm) | 2023 Actual ($mm) | 2023 Payout % | 2024 Target ($mm) | 2024 Actual ($mm) | 2024 Payout % |
|---|---|---|---|---|---|---|
| LWICP Revenue | $2,800 | $2,902 | 107.3% | $3,225 | $3,188 | 94.4% |
| LWICP AEBITDA | $985 | $1,070 (Committee adjusted −$48mm for LWICP) | 120.9% | $1,193 | $1,208 (Committee adjusted −$36mm for LWICP) | 102.4% |
| Consolidated Weighted Payout | — | — | 114.1% | — | — | 98.4% |
Notes: Sottile’s final 2024 payout was 91.3% of target due to Committee discretion applied to certain employees .
Equity Awards Granted
| Grant Year | Time‑Vesting RSUs (#) | TSR RSUs (#) | AEBITDA RSUs (#) | Vesting Schedule |
|---|---|---|---|---|
| 2024 | 6,137 | 3,069 | 3,069 | Time RSUs vest in three annual tranches starting 3/20/2025; performance RSUs vest 3/20/2027 if conditions met by 12/31/2026 |
| 2023 | 10,710 | 5,355 | 5,355 | Time RSUs vest in three annual tranches starting 3/20/2024; performance RSUs vest 3/20/2026 if conditions met by 12/31/2025 |
Performance RSU Results
| Cycle | Metric | Threshold | Target | Actual | Payout |
|---|---|---|---|---|---|
| 2022–2024 | Relative TSR vs S&P 400 | 30th percentile | 55th percentile | 71st percentile | 100% |
| 2022–2024 | RSU AEBITDA ($mm) | $964 | $1,303 | $1,244 | 91.3% |
| 2021–2023 | Relative TSR vs S&P 400 | 30th percentile | 55th percentile | 92nd percentile | 100% |
| 2021–2023 | RSU AEBITDA ($mm) | $843 | $1,124 | $1,083 | 93% |
Equity Ownership & Alignment
| Item | 2023 | 2024 | 2025 |
|---|---|---|---|
| Beneficial Ownership (shares) | 73,868 (as of 4/11/2024; <1%) | — | 127,406 (as of 4/11/2025; <1%) |
| Stock Ownership Guideline | ≥ 1× base salary / prior 200‑day avg price | ≥ 1× base salary; requirement: 7,296 shares | — |
| Ownership vs Guideline | Requirement 9,531 shares; Ownership 95,111 shares/units (compliant) | Requirement 7,296; Ownership 97,372 (compliant) | — |
| Options – Exercisable | 5,006 @ $30.33 exp. 9/3/2028 | — | — |
| Options – Exercisable | 5,006 @ $30.33 exp. 9/3/2028 | — | — |
| Options – Exercisable | 15,127 @ $22.69 exp. 3/20/2029 | — | — |
| Options – Exercisable | 15,127 @ $22.69 exp. 3/20/2029 | — | — |
| 2024 RSU Vesting (shares; total) | — | 44,245 vested; value $4,413,585 | — |
Governance alignment:
- Clawback policy exceeding NASDAQ/Dodd‑Frank; recovery upon restatement due to fraud/gross misconduct .
- No hedging or pledging permitted; restrictions include short sales, options, margin accounts and pledging as collateral .
- Say‑on‑pay approval ~98% at 2024 meeting, indicating strong shareholder support .
Employment Terms
| Term | Details |
|---|---|
| Employment Agreement | Dated Aug 2, 2021 (effective Sep 1, 2021); amended June 20, 2025 to extend through 12/31/2025 and apply retirement equity vesting policy . |
| Retirement & Consulting | Retires 12/31/2025; consults 1/1/2026–12/31/2026 at $11,959 per month (20% of 2025 base salary) . |
| Severance (Qualifying Termination) | Pro‑rata bonus for year of termination; cash severance equal to base salary + “Severance Bonus Amount” (highest of prior two bonuses, capped at current target), generally paid over 12 months; COBRA premiums up to 12 months . |
| Change‑in‑Control Plan (double‑trigger) | If terminated without cause/for good reason within 18 months post‑CIC: pro‑rata bonus; lump‑sum cash severance equal to 1.5×(base salary + Severance Bonus Amount); COBRA premiums up to severance period; accelerated vesting of all equity awards with performance determined by Committee; “best net” excise tax cutback applies . |
| Equity on Death/Disability | Unvested stock options/RSUs generally vest upon death or “disability” per standard award agreements . |
| Non‑compete/Non‑solicit | Restrictive covenants include confidentiality and competition restrictions; for Sottile, non‑compete period is 12 months post‑termination (Wilson/Lane 24 months) . |
Performance Compensation Structure Details
| Element | Design |
|---|---|
| LWICP metrics & payout curve | Two metrics (Revenue, Consolidated AEBITDA); payout requires ≥85% of target; scale 25% at threshold, 100% at target, up to 200% at 130% of target . |
| Weighting (company‑wide execs) | Each metric 50% weight; payouts determined on consolidated basis for Sottile . |
| Equity mix | 50% time‑vest RSUs; 25% TSR RSUs (relative to S&P 400); 25% AEBITDA RSUs; TSR/AEBITDA RSUs pay out 50–100% of target only (no >100% payout) . |
Investment Implications
- Pay‑for‑performance discipline: LWICP thresholds, dual metrics, and performance‑conditioned RSUs (TSR and AEBITDA) create strong alignment; high say‑on‑pay support underscores governance credibility .
- Vesting cadence and share supply: Large RSU tranches vest each March (time‑vest) and in March 2027 (performance 2024 grants), potentially adding periodic share supply; 2024 vesting for Sottile was 44,245 shares valued ~$4.41M .
- Retention risk contained: Announced retirement with defined consulting terms and named successor (Deputy GC Susan Dawson) reduces transition risk and preserves continuity in legal leadership .
- CIC protections and clawbacks: Double‑trigger CIC plan and robust clawback/anti‑hedging policies mitigate agency risk; accelerated vesting on CIC can be dilution‑sensitive but performance determination remains at Committee discretion .
- Earnings‑linked incentives: Committee adjustments to AEBITDA for LWICP reflect discipline on capitalized labor/incentive costs; 2024 consolidated payout ~98.4% but individual discretion reduced certain payouts (Sottile at 91.3%), signaling cost control .