James S. Marcelli
About James S. Marcelli
James S. (Jim) Marcelli, age 77, serves as Lightwave Logic’s Chief Financial Officer, Chief Operating Officer, and Corporate Secretary, and is a director (Class III term expiring 2026); he previously served as the company’s President & CEO from 2008–2012 and became Corporate Secretary in March 2018 . He is an employee director (not independent) with responsibilities spanning treasury, budgeting, compliance, audit coordination, financial systems, and day-to-day operations; prior career includes leadership roles at NTI, LoCal Sales (founder), Teradyne, and Sanmina, and advisory/mentorship roles with NSF I‑Corps and University of Colorado boards . Company performance under the pay-versus-performance window shows the business remained in net losses 2021–2024 and only limited revenue in 2023; cumulative TSR outperformed the Solactive EPIC Core Photonic USD Index and the NASDAQ Composite in 2021–2023, while “Compensation Actually Paid” varied by year . Jim notified the Board on September 15, 2025 of his intent to retire as officer and director effective December 31, 2025, highlighting near-term transition/retention risk .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Lightwave Logic (LWLG) | President & CEO | 2008–2012 | Led early-stage company building; later transitioned to finance/operations leadership . |
| Lightwave Logic (LWLG) | Corporate Secretary | Since Mar 2018 | Governance, compliance, board process support . |
| Lightwave Logic (LWLG) | CFO & COO | Current | Oversees treasury, budgeting, financial systems and operations efficiency . |
| NTI (high-tech manufacturing) | President & CEO | Not disclosed | Growth and operating leadership experience . |
| LoCal Sales Inc. | Founder; President & CEO | Not disclosed | Entrepreneurial founding and operating experience . |
| Teradyne; Sanmina (co-founded) | Senior management roles | Not disclosed | Engineering, sales, marketing, operations and finance breadth . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| NSF Innovation Program (I‑Corps) | Mentor | Not disclosed | Startup/customer discovery mentorship . |
| University of Colorado, Colorado Springs Engineering School | Board/advisory service | Not disclosed | Academic/industry engagement and advisory . |
| Non-profits and business advisory boards | Member | Not disclosed | Broader network and governance exposure . |
Fixed Compensation
| Component | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Base Salary ($) | 271,800 | 350,000 (eff. Jan 18, 2022) | 367,500 (eff. Jan 1, 2023) | 385,875 (eff. Jan 1, 2024) |
| Target Cash Bonus ($) | Not disclosed | 140,000 (set Jan 18, 2022) | 147,000 | 192,938 |
| Target Non‑Cash Bonus ($) | — | — | — | 192,938 (equity-based) |
| Actual Cash Bonus Paid ($) | Not disclosed | Not disclosed | 58,984 (paid 2024) | 57,881 (paid 2025 for 2024) |
| Actual Non‑Cash Bonus | — | — | — | Option to purchase 32,336 shares @ $1.79 (fully vested 2/6/2025) |
Notes:
- 2024 and 2023 base salaries per executive compensation disclosure; 2024 target split into cash and non‑cash bonus amounts via June 18, 2024 amendment .
- Cash bonus determinations considered financial, strategic and operational goals, with only a small degree tied to stock performance/peers; specific weights/metrics were not disclosed .
Performance Compensation
Option and Equity Grants (selected, most relevant to selling pressure and vesting)
| Grant Date | Award Type | Shares/Units | Exercise Price | Vesting | Expiration |
|---|---|---|---|---|---|
| Apr 19, 2021 | Stock Option | 250,000 | $1.60 | Quarterly over 2 years (31,250/qtr from May 1, 2021) | 4/18/2031 |
| Jan 18, 2022 | Stock Option | 80,000 | $9.65 | 12 equal monthly installments (Jan–Dec 2022) | 1/17/2032 |
| Mar 16, 2023 | Stock Option | 160,000 | $5.22 | 40,003 vested on grant; remainder vests in 9 equal monthly installments starting Apr 1, 2023 | 3/15/2033 |
| Jun 18, 2024 | Stock Option | 120,000 | $5.00 | 60,000 vested on grant; remainder in 6 equal monthly installments starting Jul 1, 2024 | 6/17/2034 |
| Feb 6, 2025 | Stock Option (non‑cash bonus for 2024) | 32,336 | $1.79 | Fully vested on grant | 2/5/2035 |
Incentive design disclosure:
- Cash bonus decisions were based on Company financial, strategic and operational goals (with limited TSR benchmarking); specific performance metrics, weights, and targets for Mr. Marcelli were not itemized in the proxy .
- Equity plan and grant mechanics: options struck at fair market value on grant date; vest monthly or quarterly; issued under the 2016 Plan (until replaced by 2025 Plan) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 2,232,076 shares (includes options exercisable within 60 days) |
| % of Shares Outstanding | 1.79% (based on 124,604,522 shares outstanding at record date) |
| Options/Warrants Included (within 60 days) | 1,942,336 |
| Year-end FY2024 Outstanding Options (exercisable) | 1,150,000 @ $0.70 (exp 6/30/2025); 50,000 @ $0.67 (exp 8/9/2025); 100,000 @ $1.04 (exp 4/7/2029); 250,000 @ $1.60 (exp 4/18/2031); 80,000 @ $9.65 (exp 1/17/2032); 160,000 @ $5.22 (exp 3/15/2033); 120,000 @ $5.00 (exp 6/17/2034) . |
| Hedging/Pledging Policy | Short-sales and hedging prohibited; pledging or margining company stock requires advance approval from policy compliance officer . |
| Ownership Guidelines | Not disclosed in the proxy; no executive ownership multiple noted . |
| 2025 Exercise Activity (Company-level) | 1,350,000 options were cashlessly exercised YTD 2025; attribution to specific insiders not disclosed . |
Commentary: Large blocks of deeply in-the-money options approaching 2025 expirations (e.g., 1.2M+ at $0.67–$0.70) created mechanical exercise pressure and potential secondary selling/liquidity events during 2025; company filings confirm substantial option exercise activity but do not attribute to individuals .
Employment Terms
- Agreement structure and term: Original employment agreement effective Jan 1, 2014 (amended 2015, 2017, 2019, 2021, 2022, 2023, 2024); extended through Dec 31, 2025 on April 26, 2023 .
- Compensation amendments:
- Jan 18, 2022: base $350,000; target bonus $140,000; 80,000 options @ $9.65 (12 monthly vesting) .
- Mar 16, 2023: base $367,500; target bonus $147,000; 160,000 options @ $5.22 (front-loaded vest) .
- Jun 18, 2024: base $385,875; target cash bonus $192,938; target non‑cash bonus $192,938; 120,000 options @ $5.00 (60k immediate, 6 monthly) .
- Severance/termination economics:
- Death (with key‑man life insurance in place): Company pays compensation under the employment agreement to estate through the remaining term, or 12 months, whichever is longer .
- Non‑renewal by Company at term end: 9 months of compensation after termination .
- Termination without cause during term: compensation for the remainder of the term or 12 months, whichever is longer .
- Change-in-control:
- For non-employee directors, all options and restricted stock become fully vested/exercisable immediately prior to a change in control (single-trigger) .
- Executive treatment: Proxy notes executive options “shall remain exercisable as set forth in their stock option agreements” in a change-in-control; no explicit single/double-trigger acceleration for executives was detailed in the excerpted sections .
- Plan definition of change-in-control follows standard 50% beneficial ownership/merger/asset sale/board turnover tests; 409A constraints apply to payment timing .
- Clawback: Nasdaq-compliant compensation recovery policy adopted; applies to erroneously awarded compensation upon an accounting restatement .
- Non‑compete/non‑solicit, tax gross‑ups, deferred comp, pensions: Not disclosed in the cited sections; no tax gross-ups mentioned .
Board Governance
- Board service: Director since 2008; Class III term expires 2026; employee director; not independent .
- Roles/committees: Serves as CFO/COO/Secretary; not listed as a member of Audit, Compensation, or Nominating & Corporate Governance Committees (which are composed of independent directors) .
- Attendance: Board met 5 times in 2024; all directors attended >75% of Board and committee meetings; all attended the 2024 annual meeting .
- Board leadership: Non-executive Chair (Ronald A. Bucchi) designated as audit committee financial expert; independent committee composition noted .
- Dual-role implications: As a sitting CFO and director, Jim is not independent; governance mitigants include independent Chairs of core committees and a non-executive Board Chair .
Director Compensation (context; not applicable to employee directors)
In June 2024, the Board adopted a director compensation schedule for non-employee directors including cash retainers, RSAs with staged vesting, and 90,000 stock options for committee chairs; 2025 director compensation had not yet been determined at the time of the proxy . Jim, as an employee director, is compensated under his executive employment terms, not the non-employee director schedule .
Company Financial Context (Pay-for-Performance framing)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | —* | 40,502* | 95,605* |
| EBITDA ($) | (16,304,165)* | (20,779,702)* | (21,560,593)* |
| Net Income (Loss) ($) | (17,230,480)* | (21,038,032)* | (22,535,041)* |
Values with asterisks retrieved from S&P Global.
Additional context: The company disclosed it was pre‑revenue during 2020–2022 with limited revenue in 2023 and net losses across 2021–2024 .
Compensation Committee Analysis
- Independent composition with chair (Laila Partridge) and members (Craig Ciesla, Thomas M. Connelly, Jr.); 4 meetings in 2024 .
- Engaged Meridian Compensation Partners in late 2023 for executive/director benchmarking, with updated peer selection criteria anticipated for 2025 (industry/sector, market cap, revenue) .
- Committee objectives emphasize sustainable shareholder value; 2023–2024 cash bonuses considered financial, strategic, and operational goals with limited TSR benchmarking .
Risk Indicators & Red Flags
- Insider selling/pressure: Significant blocks of in‑the‑money options expiring in 2025 for Mr. Marcelli (1.2M+ at $0.67–$0.70) create mechanical exercise pressure; company-level 2025 filing shows 1,350,000 options were cashlessly exercised YTD, though filer identities were not disclosed .
- Equity overhang/usage: As of 12/31/2024, 9.9M options/warrants outstanding at a $3.07 weighted average exercise price; 3.48M shares remained available for future issuance under equity plans . The 2025 Equity Incentive Plan authorizes up to 6,000,000 shares; mix shift toward RSUs/PSUs in 2025 noted at the company level .
- Governance mitigants: Clawback adopted; hedging prohibited; pledging requires pre-approval .
- Transition risk: Announced retirement as CFO/COO and director effective December 31, 2025 .
Performance & Track Record
- TSR and Pay vs Performance: Company’s cumulative TSR outperformed both the Solactive EPIC Core Photonic USD Index and NASDAQ Composite across 2021–2023; 2022 PEO “Compensation Actually Paid” was lower vs 2020 despite higher TSR in 2022 .
- Operating results: Continued net losses through 2024, consistent with development-stage profile; limited revenue in 2023 .
- Capital markets: 2025 YTD filings show ATM share sales and institutional issuance, alongside option exercises, indicating active use of equity financing and potential dilution considerations .
Board Service History, Committees, Independence
- Director since 2008; Class III (term through 2026); employee director (not independent) .
- Not a member of Audit, Compensation, or Nominating & Corporate Governance committees (all independent) .
- Attendance: >75% of meetings; Board met 5 times in 2024; all directors attended the 2024 annual meeting .
- Dual-role implications: As CFO/COO and director, independence concerns are mitigated by non-executive Chair and fully independent committees; oversight and compensation decisions are handled by independent directors .
Investment Implications
- Alignment: High option-based exposure with substantial historical low‑strike grants implies upside alignment, but also introduces selling pressure around large maturity walls (notably 2025 expirations); 2025 filings confirm material company-level option exercise activity .
- Pay vs performance: Cash bonuses modest relative to targets and company’s pre‑commercial stage; equity grants used to balance retention and cash burn; clawback and anti‑hedging policies are positive governance features .
- Retention/transition: Announced end‑2025 retirement creates execution risk (finance/operations continuity) and potential incremental board refresh; near-term investor monitoring should focus on CFO succession, internal controls continuity, and 2025 plan equity usage .
- Governance: Dual role (CFO + director) reduces independence, but independent Chair/committees and attendance mitigate governance risk; no pledging or related-party red flags disclosed; CoC acceleration is explicit for directors, less explicit for executives in proxy excerpts .
Key Citations: