Richard Cotton

About Richard Cotton

Richard Cotton (Age 64) is an independent director of Spectral AI, Inc. (Nasdaq: MDAI) since June 2021, serving as Lead Independent Director and Chair of the Audit Committee; he is a Fellow of the Chartered Institute of Management Accountants and holds a BA (Hons) in Business Studies from Kingston University . His background spans CFO roles at FTSE 250 Dechra Pharmaceuticals plc and at Consort Medical plc, with deep experience in strategy, corporate finance/M&A, capital markets, operations, and governance .

Past Roles

External Roles

Board Governance

• Independence: The Board determined Cotton is an “independent director” under Nasdaq standards; he serves as Lead Independent Director at Spectral AI .
• Committee leadership and memberships:
  • Audit Committee: Chair (members: Cotton, Mellish, Snyder). Board deems all members independent and financially literate; Mellish is the SEC-designated financial expert .
  • Compensation Committee: Member (Chair: Mellish; members: Mellish, Cotton, Sadagopan) .
  • Nominating & Corporate Governance Committee: Member (Chair: DiMaio; members: DiMaio, Cotton) .
  • Executive Committee: Member (Chair: Spangenberg; members include Cotton) .
• Attendance and engagement: In 2024, the Board held 8 meetings; each director attended at least 75% of Board and applicable committee meetings; all directors attended the Annual Meeting. Audit (5), Compensation (2), Nominating (1), and Executive (13) committee meetings were held, indicating high committee workload (notably Executive) .
• Audit oversight: As Audit Chair, Cotton signed the Audit Committee Report recommending inclusion of audited 2024 financials in Form 10-K after reviewing independence, internal controls, and PCAOB AS 1301 matters with KPMG LLP .
• Insider trading controls: Pre-clearance and trading windows apply to directors; policy governs MNPI trading .

Fixed Compensation

Performance Compensation

• Equity plan governance: Awards are subject to a Clawback Policy; the plan prohibits option/SAR repricing without stockholder approval .

Other Directorships & Interlocks

Expertise & Qualifications

• Finance and governance: Former FTSE 250 CFO; extensive corporate finance, M&A, capital markets, and governance track record .
• Operations and commercialization: Experience across product development, supply chain, and commercial functions in international organizations .
• Professional credentials and education: Fellow of CIMA; BA (Hons) Business Studies, Kingston University .
• Board leadership: Lead Independent Director and Audit Chair at Spectral AI; SID and Audit Chair at AOTI .

Equity Ownership

Shareholder Support Signal (2025 Election)

Related-Party Transactions and Policies

• Related-person transactions: Other than the Spectral IP financing (with an affiliate of the largest stockholder) described in the proxy, no related-person transactions meeting SEC thresholds were reported; no Cotton-specific related transactions identified .
• Hedging/pledging: The company does not have policies that prevent employees or directors from engaging in hedging transactions in company stock (beyond MNPI prohibitions) — a governance red flag for investor alignment .
• Ownership/holding guidelines: Director stock ownership guidelines not disclosed in the proxy; equity plan subject to clawback .

Governance Assessment

• Strengths:

  • Independent Lead Director and Audit Chair roles indicate strong governance positioning and involvement in financial oversight; signed 2024 Audit Committee Report after robust PCAOB-standard discussions with KPMG .
  • Multi-committee service (Audit Chair; member of Compensation, Nominating, and Executive Committees) reflects high engagement; Board and committee attendance met ≥75%, and all directors attended the Annual Meeting .
  • Equity plan contains clawback provisions and no-repricing protections, supporting shareholder-friendly compensation governance .
  • 2025 election support showed no votes against and minimal abstentions for Cotton, a positive investor-sentiment signal .

• Alignment and risks:

  • Ownership is <1% of shares outstanding, though includes options exercisable within 60 days; this may limit economic alignment vs. larger-stake directors despite option exposure .
  • Company permits director hedging, which can weaken alignment incentives — a clear governance red flag relative to best practices that prohibit hedging/pledging .
  • Sector adjacency exists via Cotton’s SID/Audit Chair role at AOTI (wound therapy), near Spectral’s wound diagnostics domain; the proxy discloses no related-party transactions involving Cotton, reducing conflict concerns, but continued monitoring is warranted .

• Compensation structure:

  • Director pay blends cash retainers with option awards (no disclosed performance metrics for director equity), with higher equity grant value in 2024 vs. 2023 (see tables) .
  • Compensation decisions overseen by the independent Compensation Committee, where Cotton serves as a member (not chair) .

• Net view: Cotton’s deep finance/governance background, LID status, and active audit leadership are positives for board effectiveness. Primary governance watch-items are low direct ownership (<1%) and the company’s permissive hedging policy for directors, which can dilute pay-for-performance alignment .