Noel Watson
LEGALZOOM.COMAbout Noel Watson
Noel Watson, age 50, serves as LegalZoom’s Chief Operating Officer (since August 2024) and Chief Financial Officer (since November 2020). He previously was CFO at TrueCar (2019–2020) and held finance leadership roles at TripAdvisor (2006–2019), and holds a B.S. in accounting from Bryant University . In 2024, LegalZoom delivered revenue of $681.9M (+3% YoY), net income of $30.0M (4% margin), Adjusted EBITDA of $148.1M (22% margin), and free cash flow of $99.9M; management highlighted margin expansion and share repurchases of ~$165M (~10% share count reduction) . 2024 PSUs paid out at 102.4% of target based on Adjusted EBITDA, with rTSR at the 34th percentile (no TSR modifier impact) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| TripAdvisor, Inc. | Vice President – Finance; Chief Accounting Officer | 2006–2019 | Finance and accounting leadership across an online travel platform |
| TrueCar, Inc. | Chief Financial Officer | 2019–2020 | Oversaw corporate finance for an automotive pricing and information website |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Affirm Holdings, Inc. | Director | Since Sep 2022 | Current public company board service |
| Zynga Inc. | Director | Jul 2020–May 2022 | Former public company board service |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) – actual earned | $450,000 | $465,385 | $494,230 |
| Base Salary Rate ($) | — | — | $500,000 (6.38% increase effective Feb 26, 2024) |
| Target Bonus (% of earnings) | — | — | 75% (target $370,673) |
| Annual Bonus – actual paid ($) | $230,400 | $325,915 | $326,192 |
| All Other Compensation ($) | $12,200 | $13,200 | $13,077 |
- 401(k) plan match: Company matches 100% of first 4% of eligible compensation; executives participate on same basis as other employees; no defined benefit or nonqualified deferred comp plans .
Performance Compensation
Annual Cash Bonus Plan (FY2024)
| Metric | Weighting | Threshold | Target | Maximum | Actual | Payout % | Weighted Funding |
|---|---|---|---|---|---|---|---|
| Total Revenue | 50% | $662.1M | $719.7M | $777.3M | $681.9M | 73.5% | 36.8% |
| Adjusted EBITDA | 50% | $124.5M | $146.4M | $168.4M | $148.1M | 102.4% | 51.2% |
| Total Funding (pre-North Star adj.) | — | — | — | — | — | — | 88.0% |
- Individual performance multiplier: 100% for Watson, reflecting profitability improvements, control remediation, tech leadership transition, and expanded revenue/customer responsibilities .
- Resulting payout: Company performance portion $244,644; individual portion $81,548; total $326,192 (88% of target) .
PSUs
| Award | Grant Date | Metric(s) | Target (#) | Earned (#) | Vesting |
|---|---|---|---|---|---|
| 2024 PSUs (EBITDA + rTSR modifier) | Mar 20, 2024; Aug 19, 2024 | FY2024 Adjusted EBITDA; rTSR vs Nasdaq Composite | 206,881 + 86,206 | 211,846 + 88,274 (total 300,120) | 1/3 on certification; remainder in 8 equal quarterly installments starting May 15, 2025 |
| 2025 PSUs (stock price tranches) | Nov 15, 2024 | 5 stock price goals from $8.75 to $20.50 vs base $6.91 | 416,063 | First $8.75 goal achieved; shares earned to vest Nov 15, 2025 | In year 1, vest on Nov 15, 2025; in years 2–3, vest immediately upon certification |
- 2023 PSUs based on market share did not meet threshold (9.8% vs 10.50% threshold); no payout .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 1,988,032 shares; <1% of outstanding as of Apr 10, 2025 (181,184,393 shares outstanding) |
| Anti-Hedging/Pledging | Company policy prohibits hedging and pledging for directors and officers |
| Stock Ownership Guidelines | Director guidelines (5x retainer) apply to Eligible Directors; executive guidelines not disclosed in proxy |
| Outstanding Unvested RSUs (12/31/24) | Key positions include 416,063 (2025 RSUs) , 191,082 (Retention RSUs, July 2024) , 206,881 (Mar 2024) , 86,206 (Aug 2024) |
| Outstanding Unearned PSUs (12/31/24) | 2025 PSUs at maximum column shows 1,664,250 potential shares ; 2024 PSUs at target 206,881 and 86,206 pre-certification |
| Options (12/31/24) | Exercisable: 763,747 @ $9.82 (11/18/2030) ; others at $14.15, $28.00, $8.39 with unexercisable tranches |
| In/Out of the Money (12/31/24) | FMV used: $7.51; listed option strikes (e.g., $8.39, $9.82, $14.15, $28.00) were out-of-the-money at valuation date |
Upcoming Vesting & Potential Supply Overhang
| Award | Shares | Vesting Dates |
|---|---|---|
| 2024 PSUs (earned) | 300,120 | 8 equal quarterly installments starting May 15, 2025 |
| 2025 PSUs (Tranche 1) | 312,047 earned for Watson upon $8.75 goal (part of target) | Full vest Nov 15, 2025 |
| 2025 RSUs | 416,063 | Quarterly over 3 years beginning May 15, 2025 |
| Retention RSUs (July 2024) | 191,082 | 50% on July 9, 2025; 50% on July 9, 2026 |
| March/Aug 2024 RSUs | 206,881; 86,206 | Ongoing quarterly vesting per grant schedules |
Employment Terms
| Provision | Summary |
|---|---|
| Employment Agreement | Amended & restated effective prior to IPO; amended Mar 2022; at-will |
| Target Bonus | 75% of base salary (current) |
| Severance (outside CIC) | 12 months base salary; up to 12 months COBRA reimbursement; acceleration for certain pre-existing option grants and extension of exercise windows; specific equity acceleration terms apply to awards as described |
| Severance (within CIC, double trigger) | Lump sum: 12 months base salary + 100% of target bonus; up to 12 months COBRA; immediate acceleration of 100% of options and RSUs; PSU acceleration per terms |
| PSU/CIC Mechanics | 2025 PSUs performance period shortens at CIC; tranches deemed achieved if per-share consideration meets stock price goals, with immediate vesting of applicable shares |
| Clawback | Dodd-Frank compliant clawback policy applies to incentive-based compensation |
| Hedging/Pledging | Prohibited for officers under Insider Trading Policy |
Compensation Structure Analysis
- Shift to performance-based equity: Company removed options for NEOs in 2024 in favor of PSUs tied to EBITDA and rTSR, then 2025 PSUs tied solely to stock price; increases at-risk pay and investor alignment .
- Annual bonus metrics tied to revenue and Adjusted EBITDA (50/50), with an 88% payout; no discretionary North Star adjustment, reinforcing pay-for-performance discipline .
- Retention considerations: Mid-2024 retention RSUs and accelerated 2025 grants support leadership stability through the strategic pivot and CEO transition .
Say-on-Pay & Peer Group
- Say-on-pay support: 81% approval in 2024; investor engagement affirmed support for replacing options with PSUs and including TSR .
- Peer group: SaaS/data-platform peers used for pay and performance comparisons (e.g., Box, Wix, Squarespace, Five9, Smartsheet, etc.), with updates for 2025 (adds Udemy, GitLab, ZipRecruiter) .
Performance & Track Record
- Company outcomes in 2024: Margin expansion (Adjusted EBITDA margin +380 bps to 22%), net income margin +230 bps to 4%, cash from operations $135.6M, FCF $99.9M; no debt outstanding at YE 2024 .
- Noel Watson achievements cited in 2024 review: profitability improvement leadership, internal controls (no material weaknesses), technology org leadership transition, expanded revenue and customer accountability .
Investment Implications
- Alignment: Watson’s compensation is highly performance-weighted via PSUs linked to EBITDA (2024) and absolute stock price (2025), plus rigorous anti-hedging/pledging policy—strong alignment with shareholders .
- Near-term supply risk: Significant scheduled vesting in 2025–2026 (earned 2024 PSUs; 2025 PSUs tranche; RSUs), which could create selling pressure around vest dates absent 10b5-1 plans .
- Retention: Retention RSUs and accelerated 2025 LTIs reduce flight risk through the strategic transition; severance/CIC protections are standard, with double-trigger equity acceleration inside CIC (salary/bonus multiples are moderate vs CEO) .
- Execution: Dual COO/CFO responsibilities centralize operating and financial levers; cash generation and margin expansion in 2024 support credibility, but 2025 PSUs require sustained stock appreciation across defined thresholds, heightening focus on delivery against go-to-market/subscription optimization .
Notes: All values, dates, and terms cited directly from LegalZoom’s 2025 DEF 14A and related SEC filings; see citations in each section.