Garrett Gafke
MITEK SYSTEMSAbout Garrett Gafke
Garrett Gafke is Chief Operating Officer of Mitek Systems (appointed April 25, 2025), age 53, with a B.A. from Chaminade University . He is a recognized pioneer in digital identity and fraud, previously serving as President of Intellicheck (2021–2023) and Founder/CEO of IdentityMind (2011–2021, acquired by GB Group plc); he also led Paymate (2008–2011, acquired by Flexigroup) and has been an active investor/advisor/operator since 2023 . Company performance context: FY2024 revenue was $172.1 million, net income $3.3 million, and cash from operations $31.7 million . Management highlights in FY2025 include accelerated EBITDA growth and 99% LTM free cash flow conversion, with COO-led efficiency initiatives in vendor audits, contract renegotiations, and infrastructure consolidation to reinvest into the platform .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Intellicheck | President | 2021–2023 | Led identity/fraud solutions operations at a public company . |
| IdentityMind (acquired by GB Group plc) | Founder, President & CEO | 2011–2021 | Helped define the digital identity landscape; built SaaS platform adopted across risk/fraud markets . |
| Paymate (acquired by Flexigroup Ltd.) | President & CEO | 2008–2011 | Led global payments and risk platform through successful exit . |
External Roles
| Organization/Activity | Role | Years | Strategic Impact |
|---|---|---|---|
| Startups, private equity, and venture funds | Active investor, board advisor, operator | 2023–present | Advises and scales early-stage and growth companies in identity, fraud, and payments . |
Fixed Compensation
| Component | FY2025 Terms | Notes |
|---|---|---|
| Base Salary | $425,000 | Pro-rated for 2025 based on start date . |
| Target Annual Bonus | 75% of base salary (max 150%) | Company metrics and individual goals set by CEO; FY2025 plan caps payouts at 200% . |
| Sign-on Bonus | $187,500 (cash) | Clawback if terminated for cause or resigns without good reason within 18 months of start . |
Performance Compensation
Annual Cash Incentive (FY2025 design)
| Metric | Weighting | Target Basis | Payout Curve | Individual Modifier | Vesting |
|---|---|---|---|---|---|
| Revenue (company/segment) | 50% | Board-approved operating plan; split across primary/secondary areas (40%/10% option) for director-level+ | 0–200% of target | CEO/Board discretion ±10% of target for CEO’s direct reports | Cash paid post-year; prorated if applicable |
| Adjusted EBITDA | 50% | Excludes in-year acquisitions; metric change from op income in FY2024 | 0–200% of target | CEO/Board discretion ±10% of target for CEO’s direct reports | Cash paid post-year; prorated if applicable |
Shareholder feedback post-2024 say‑on‑pay (64% approval) drove FY2025 changes toward 50/50 revenue/adjusted EBITDA mix and greater at‑risk pay emphasis .
Equity Awards (Inducement Grants as of April 25, 2025)
| Award Type | Shares Granted | Grant Date | Vesting | Performance Criteria / Above-Target Provision |
|---|---|---|---|---|
| Performance RSUs (PSUs) | 360,576 at-target; up to an additional 360,576 for above-target | 04/25/2025 | Three annual tranches; each year up to 33% of total eligible to vest; forfeiture of unvested portion per period | Relative TSR vs Russell 2000; vesting schedule pro-rata: 75–100% yields partial at-target vest; 100–125% yields at-target + pro-rata above-target; ≥125% yields full at-target + full above-target for that year . |
| Restricted Stock Units (RSUs) | 120,192 | 04/25/2025 | 25% annually over 4 years; 100% acceleration on double-trigger CIC | Service-based; subject to continued employment or CIC terms . |
Automatic tax withholding sales: upon vesting, a broker automatically sells a “Specified Percentage” of shares (22% federal plus other required withholding) to satisfy taxes or shares are withheld by the Company .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Unvested equity awards | 360,576 PSUs at target plus potential 360,576 above-target; 120,192 RSUs, per inducement grants; vesting subject to employment and performance/CIC terms . |
| Hedging/pledging | Company policy prohibits hedging, short selling, derivatives, margin accounts, or pledging of company securities by executives/directors . |
| Tax-driven selling pressure | Shares are sold/withheld automatically at vest to cover withholding (Specified Percentage currently 22% federal plus other required withholding), creating predictable vest-date supply . |
| Director ownership guidelines | Director-only requirement of 5× annual cash retainer; executive ownership guidelines not disclosed . |
Employment Terms
| Term | Detail |
|---|---|
| Employment | At-will; reports to CEO; remote principal location with travel and office attendance as needed . |
| Severance (non‑CIC) | Lump sum: Basic Separation (accrued salary/expenses), plus 100% of annual base salary and target bonus; pro‑rated actual-year bonus; 12 months COBRA . |
| Severance (CIC window) | Lump sum: Basic Separation, plus 150% of base salary and target bonus; 18 months COBRA; RSUs accelerate 100%; PSUs vest at target; pro‑rated target bonus . |
| Equity treatment | Time-based RSUs fully accelerate on double-trigger CIC; PSUs vest at target on double-trigger CIC unless otherwise specified in award terms . |
| Clawback | Company Rule 10D‑1 Nasdaq-compliant clawback for current/former executive officers upon financial restatement (recovers erroneously awarded incentive comp) . |
| Non-solicit/confidentiality | Ongoing confidentiality, proprietary information, and non‑solicit obligations; conflict‑of‑interest restrictions . |
| Arbitration | JAMS employment arbitration in San Diego, CA; Company covers filing/hearing fees; judgment enforceable . |
| Indemnification & D&O | Standard officer indemnification agreement and D&O coverage . |
Performance & Track Record
- COO initiatives: Vendor audits, major contract renegotiations, and consolidation of legacy infrastructure to free resources for automation and platform investment; alignment of go‑to‑market resources with geographies/partners; tighter integration of identity and fraud platforms .
- FY2024 company context: Revenue $172.1 million, net income $3.3 million, cash from operations $31.7 million .
- FY2025 operating commentary: Accelerated EBITDA growth and 99% LTM free cash flow conversion; SaaS mix to 41% of TTM revenue; expanding Check Fraud Defender ACV to ~$13.1 million (+56% YoY), with visibility to ACV step-up .
Investment Implications
- Strong pay-for-performance alignment: 75% of inducement equity value is PSUs tied to relative TSR vs Russell 2000; RSUs provide time-based retention; CIC terms include double-trigger acceleration (RSUs 100%; PSUs at target), indicating balanced retention and transaction incentives .
- Predictable vest-date supply: Annual RSU vesting on April 25 and PSU annual tranches may trigger automatic tax-related share sales/withholding (currently 22% federal); monitor vesting events for near-term supply overhang .
- Retention risk mitigants: Competitive severance (1.0× base+target bonus non‑CIC; 1.5× base+target bonus CIC), pro‑rated bonus, COBRA coverage, and CIC equity acceleration; 18‑month sign‑on clawback period through October 25, 2026 reduces voluntary departure risk and aligns with early execution priorities .
- Execution signal: Early operational efficiency actions and integration focus under the COO point to margin expansion and cash conversion credibility; watch for PSU vesting outcomes versus Russell 2000 performance as a market‑validated scorecard of value creation .