Kannan Sugantharaman
About Kannan Sugantharaman
Kannan Sugantharaman is Mastech Digital’s Chief Financial Officer and Chief Operations Officer, appointed effective April 14, 2025; he is 46 years old and holds an MBA from the University of Chicago Booth School of Business, is a Chartered Accountant (India), and has a B.Com. from the University of Madras . In Q3 2025, he highlighted a strong balance sheet with $32.7 million cash, zero bank debt, $20.8 million revolver availability, and DSO of 55 days; company gross margin reached a record 24.8% with all-time high average bill rate of $86.60, despite softer demand—signals of operational rigor under his finance/operations remit .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Omega Healthcare Management Services | Chief Financial Officer | Jul 2020 – Apr 2025 | Led finance functions (accounting, audit, treasury, corp finance/IR) and an enterprise efficiency program spanning sales, marketing, M&A, delivery, tech, HR, and finance . |
| Cognizant Technology Solutions | CFO, Global Delivery Operations | Dec 2019 – Jun 2020 | Finance leadership for global delivery; transition role preceding COO mandate . |
| Cognizant Technology Solutions | COO, Global Delivery Operations | Aug 2017 – Dec 2019 | Operational leadership driving scale and efficiency in global delivery . |
| KPMG; Sutherland Global Services | Various leadership roles | Not specified | Early career foundation in audit/finance and operational leadership roles . |
External Roles
No public company directorships or external board roles disclosed in the provided filings .
Fixed Compensation
| Component | Jurisdiction | Amount | Currency | Notes |
|---|---|---|---|---|
| Base salary | Aggregate (US + India) | 2.25 Crores | INR | Approx. $263,824 as of April 3, 2025 exchange rate . |
| Target annual bonus | Aggregate (US + India) | 1.00 Crore | INR | Approx. $117,255 as of April 3, 2025; targets set annually by Board . |
| Base salary | US entity | 75 Lakhs | INR | Paid in USD at prevailing FX per Schedule A . |
| Target annual bonus | US entity | 33 Lakhs | INR | Paid in USD at prevailing FX; targets set annually . |
| Fixed salary | India entity | 1.5 Crores | INR | Paid monthly per Schedule A . |
| Target annual bonus | India entity | 67 Lakhs | INR | Targets set annually by India board . |
Performance Compensation
Stock Options – Grant at Appointment
| Element | Details |
|---|---|
| Grant | Non-qualified options for 150,000 shares at exercise price equal to the NYSE American closing price on Grant Date (April 14, 2025); 10-year term . |
| Time-based vesting | 18,750 options each on 1st, 2nd, 3rd, and 4th anniversaries of Grant Date, subject to continuous employment; pro-rata vesting on termination without cause/for Good Reason outside CoC, per schedule . |
| Performance-based vesting (Market Cap) | 37,500 options vest when Quarterly Average Market Capitalization > $300,000,000; 18,750 when > $450,000,000; 18,750 when > $600,000,000; definitions for VWAP and calculation provided . |
| Change-of-Control (CoC) effects | If terminated without cause/for Good Reason within 12 months post-CoC: acceleration of all then-outstanding equity awards (subject to Stock Option Agreement terms) . If CoC occurs within 12 months after termination (outside CoC termination), cash settlement equal to ITM value of defined “Accelerated Options” at deal price less aggregate exercise price . |
| Exercise window (post-termination) | Vested options generally exercisable up to 3 months post-termination (1 year for death/disability/retirement), earlier of those or 10-year expiration; forfeiture on termination for Cause . |
Annual Cash Bonus Metrics
Targets are financial and operational, set annually by the Board; specific metrics, weightings, and payouts for 2025 were not determined prior to 60 days after the Effective Date and are not disclosed .
Equity Ownership & Alignment
- Beneficial ownership: A Section 16 Form 3 for Sugantharaman was not surfaced in the provided catalog; his equity exposure is primarily via the 150,000 option grant with four annual time-based tranches and three market capitalization performance tranches .
- Pledging/Hedging: Plan awards are generally not transferable and may not be sold, pledged, assigned or transferred, other than limited exceptions (e.g., by will); clawback applies to equity/incentive compensation .
- Ownership guidelines: No executive stock ownership guideline disclosures were found in the provided filings .
Employment Terms
| Term | Key provisions |
|---|---|
| Employment term | Four-year initial term from Effective Date with automatic one-year renewals; at-will employment, terminable anytime . |
| Non-compete | 12 months post-termination; restricted geography: United States (US agreement) and India (India agreement) . |
| Non-solicit | 24 months post-termination for customers and employees . |
| Severance (no CoC) | If terminated without Cause or resigns for Good Reason: Accrued Obligations + six months of then-current monthly base salary paid over six months + pro-rated bonus based on actual achievement; unvested equity forfeited (subject to specific pro-rata vesting for time-based tranches in the Stock Option Agreement) . |
| Severance (within 12 months after CoC) | Accrued Obligations, Severance Payments (six months’ base), Pro-Rated Bonus, and acceleration of all then-outstanding equity awards (Effective Date Options subject to option agreement terms) . |
| Post-termination CoC within 12 months | Cash payment equal to ITM value of “Accelerated Options” at deal price less exercise price (as defined) . |
| Clawback | Company clawback policy effective Dec 1, 2023; applies to incentive-based compensation tied to financial reporting measures for prior three completed fiscal years . |
| Section 280G | Safe-harbor reduction to avoid excise tax if more favorable on an after-tax basis; waterfall reduction order specified . |
| Tax gross-up | US agreement includes a tax gross-up (“Gross-Up Amount”) to ensure net compensation aligns with India tax scenario if US taxes exceed India taxes on pay/bonus . |
| Dispute resolution | Jury trial waiver and Company option to compel arbitration (AAA) with prevailing-party fee-shifting (US agreement) . |
Performance & Track Record
- Operational efficiency program: Company expects ~$1.2 million per annum post-transition savings from finance/accounting migration to India; incurred ~$2.0 million transition and severance expenses in 2025, consistent with the initiative overseen under his COO remit .
- Q3 2025 operating markers: Record gross margin 24.8% and average bill rate $86.60, with cash of $32.7 million, no bank debt, and DSO of 55 days; segments faced demand softness, but management emphasized disciplined pricing and operational rigor .
Compensation Structure Analysis
- Equity-heavy with explicit market-cap performance thresholds: A significant portion (75,000 options) vests only upon achieving Quarterly Average Market Capitalization thresholds ($300m/$450m/$600m), aligning incentives to market value creation; four equal annual time-based tranches (75,000 options) balance retention .
- Severance construct: Compared to prior CFO’s legacy arrangement (two years’ salary plus 2x target bonus), Sugantharaman’s severance is materially leaner (six months’ base plus pro-rated bonus), reducing payout inflation risk; however, double-trigger equity acceleration under CoC remains shareholder-standard .
- Tax gross-up: Presence of an India/US tax gross-up on compensation/bonus is a shareholder-unfriendly feature and a governance red flag to monitor .
- Clawback robustness: Company-wide clawback compliant with Exchange Act Section 10D/NYSE American; applies to incentive compensation tied to financial reporting measures .
- Benchmarking: Company generally avoids formal compensation benchmarking; uses SIA data and occasional consultant input (Veritas, 2021), which may limit external pay inflation but reduces market calibration .
Equity Ownership & Alignment (Detailed)
| Item | Detail |
|---|---|
| Options outstanding | 150,000 non-qualified options (grant date April 14, 2025) . |
| Time-based vesting schedule | 18,750 each at years 1–4 from grant; pro-rata vesting on certain terminations without cause/for Good Reason outside CoC; forfeiture on termination for Cause . |
| Performance vesting thresholds | Quarterly Average Market Cap thresholds: $300m (37,500), $450m (18,750), $600m (18,750); forfeiture if employment ends before threshold achievement (with limited acceleration in CoC scenarios) . |
| Transfer/pledge restrictions | Awards generally not transferable or pledgeable; company-wide clawback applies to equity/incentives . |
| Ownership guidelines | Not disclosed in filings reviewed . |
Employment Terms (Detailed)
| Clause | US Agreement | India Agreement |
|---|---|---|
| Effective Date | Apr 14, 2025 | Apr 14, 2025 |
| Non-compete geography | United States | India |
| Non-compete duration | 12 months | 12 months |
| Non-solicit duration | 24 months | 24 months |
| Severance (no CoC) | 6 months base + pro-rated bonus | 6 months base + pro-rated bonus |
| Severance (within 12 months post-CoC) | 6 months base + pro-rated bonus + equity acceleration (subject to option terms) | 6 months base + pro-rated bonus |
| Post-termination CoC cash for options | ITM value settlement for “Accelerated Options” if CoC within 12 months after termination | Not specified in India agreement . |
| Tax gross-up | Present (“Gross-Up Amount”) | Not disclosed . |
| Dispute resolution | Jury waiver; AAA arbitration option; prevailing-party fees | Indian law; Chennai courts jurisdiction . |
Investment Implications
- Alignment and upside: The option package balances retention and market-cap-driven performance, providing leveraged upside if management can scale to $300m+ Quarterly Average Market Cap; time-based tranches vest annually, creating predictable potential exercise windows .
- Governance watchpoints: The compensation tax gross-up is a red flag; monitor any future gross-up utilization and potential investor feedback in say-on-pay; double-trigger acceleration under CoC is standard but can amplify deal payouts .
- Retention and change risk: Non-compete (12 months) and non-solicit (24 months) reduce post-departure risk; severance is modest (six months base + pro-rated bonus), suggesting limited guaranteed payouts, but a post-termination CoC “Accelerated Options” cash settlement could be material if thresholds were imminently achievable .
- Execution signals: Q3 2025 cash strength, record gross margins, and finance transition savings plan (~$1.2m annually) point to disciplined operations; sustained demand softness adds execution risk to hitting market-cap milestones, making the option structure a useful indicator for monitoring strategic progress .