Steven F. DeGennaro
Marcus & MillichapAbout Steven F. DeGennaro
Steven F. DeGennaro (age 61) is Executive Vice President and Chief Financial Officer at Marcus & Millichap, Inc., serving since August 2020. He holds a B.B.A. in Accounting from the University of San Diego and began his career at KPMG; prior CFO roles include InTouch Health and Xirrus, with additional CFO experience at Calix Networks and Xircom . In 2024, MMI delivered $696 million of revenue (+8% YoY) amid industry headwinds, with a net loss of $12 million and ~$49.6 billion transaction volume; management emphasized cost control and strategic investments while maintaining $394 million in cash and no debt . Incentive design ties pay to pre-tax net income and strategic objectives, and beginning with 2025 adds PSUs linked to three-year revenue and Adjusted EBITDA goals, aligning compensation with value creation and TSR objectives .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| InTouch Health Inc. | Chief Financial Officer | Mar 2018 – Jul 2020 | Venture-backed telehealth CFO; scaled finance through strategic transition |
| Xirrus, Inc. | Chief Financial Officer | Jan 2004 – Nov 2017 | Led finance for wireless networking products; long-tenured growth execution |
| Calix Networks, Inc. | Chief Financial Officer | Not disclosed | Telecom hardware finance leadership |
| Xircom, Inc. | Chief Financial Officer | Not disclosed | Networking products finance leadership |
| KPMG | Audit/Accounting | Not disclosed | Foundational audit, controls, and accounting rigor |
External Roles
- No public company directorships or external board roles disclosed for DeGennaro .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 400,000 | 400,000 | 400,000 |
- Perquisites (2024): Auto benefit $5,821; 401(k) match $4,000 .
- Base salary levels were reviewed in Feb 2024 and maintained as market competitive .
Performance Compensation
2024 Annual Incentive Structure and Outcomes
| Component | Weighting | Target | Actual | Payout | Vesting/Payment |
|---|---|---|---|---|---|
| Financial: Pre-tax Net Income | 40% | $30M pre-tax net income (50% above plan) | Pre-tax net loss of $13M | 0% of component | Cash award paid after year-end |
| Individual/Strategic Goals | 60% | CFO-specific operational, IR, strategic priorities | Met/largely achieved most goals | Contributed to overall 64% of target | Cash award paid after year-end |
| Annual Incentive Award (2024) | Target ($) | Actual ($) | Actual (% of Target) |
|---|---|---|---|
| Steven F. DeGennaro | 807,500 | 515,185 | 64% |
Key CFO strategic objectives included financial services operational improvements, investor relations oversight, and execution against firmwide strategic priorities with the CEO .
Long-Term Incentives
2024 Time-Based RSUs (granted subject to stockholder approval of plan amendment):
- RSUs granted: 10,701; Grant date: May 2, 2024; Grant-date fair value: $348,425 .
- Vesting: Five equal annual installments; first vest on March 10, 2025, contingent on continued service (standard exceptions for CoC/death/disability) .
2025 Program Changes (effective for FY25 LTI mix):
- 50% PSUs and 50% time-based RSUs; PSU metrics: one-third revenue, two-thirds Adjusted EBITDA over FY2025–FY2027; payout 0–200% of target; PSUs vest on third anniversary post-certification; RSUs vest in four annual installments .
- Rationale: Stockholder engagement post-2024 say-on-pay led to adding performance-based equity to strengthen pay-for-performance alignment .
Recent Equity Vests (realized value, 2024)
| Metric | FY 2024 |
|---|---|
| Shares acquired on vesting (#) | 14,354 |
| Value realized on vesting ($) | 500,987 |
Equity Ownership & Alignment
Beneficial Ownership (as of March 12, 2025)
| Holder | Shares Beneficially Owned | % Outstanding |
|---|---|---|
| Steven F. DeGennaro | 28,750 | <1% |
- Stock ownership guidelines: Other NEOs must hold ≥3x base salary; all NEOs met requirements as of end-2024. Executives must retain net shares until guidelines met; anti-hedging and anti-pledging policies in place .
- No pledging disclosed for DeGennaro; company prohibits pledging by executive officers .
Outstanding Unvested Equity Awards (as of Dec 31, 2024)
| Grant | Unvested RSUs (#) | Market Value ($) | Vesting Schedule |
|---|---|---|---|
| 2/10/2022 grant (footnote 4) | 26,564 | 1,016,339 | 5 annual tranches; 20% per year starting 3/10/2023; service required |
| 2/9/2023 grant (footnote 5) | 10,008 | 382,906 | 5 annual tranches; 20% per year starting 3/10/2024; service required |
| 8/4/2020 grant (footnote 7) | 1,500 | 57,390 | 5 annual tranches; 20% per year starting 8/10/2021; service required |
| 8/3/2021 grant (footnote 8) | 3,000 | 114,780 | 5 annual tranches; 20% per year starting 8/10/2022; service required |
| 2/8/2024 grant (footnote 11) | 10,701 | 409,420 | 5 annual tranches; 20% per year starting 3/10/2025; service required |
Notes: Market values based on $38.26 closing price on 12/31/2024; vesting accelerates in specified change-in-control and death/disability scenarios per plan/policy .
Deferred Compensation
| Plan | Executive Contributions (2024) | Earnings (2024) | Balance (12/31/2024) |
|---|---|---|---|
| NQDC Plan (rabbi trust; company-funded via variable life) | 250,000 | 90,541 | 886,472 |
- DeGennaro elected to defer $250,000 of his cash incentive; plan offers tax-planning flexibility with diversified measurement funds and installment payout elections post-termination/retirement .
Employment Terms
| Item | Key Terms |
|---|---|
| Employment Agreement | Effective Aug 4, 2020; at-will; current base salary $400,000; eligible for annual non-equity incentive per plan . |
| Severance (without cause or resign for good reason) | Cash severance equal to 6 months base salary plus 50% of last annual cash incentive, subject to release and post-termination obligations . |
| Change-in-Control Policy (double trigger; within 12 months post-CoC) | Cash severance: 12 months base salary plus target annual incentive (lesser of current/prior year target); RSU acceleration; COBRA premium reimbursement up to 12 months; up to $25,000 outplacement . |
| Death/Disability Policy | RSU acceleration upon death or disability after ≥1 year of service; disability also includes up to 12 months COBRA reimbursement . |
| Clawback | Dodd-Frank compliant compensation recovery policy covering erroneously awarded incentive compensation and improper conduct; applies to Section 16 officers . |
| Hedging/Pledging | Strict prohibition on hedging/derivatives, short sales, margin purchases, and pledging of company stock . |
| Non-compete/Non-solicit/Confidentiality | Covered in agreement (durations/scope not disclosed) . |
| Tax Gross-ups | No gross-ups under CoC policy (280G/4999) . |
Compensation Structure vs Performance Metrics
- Annual incentive explicitly tied to pre-tax net income (financial rigor increased by setting target 50% above plan), paired with individualized strategic goals to drive retention, recruiting, IR, and operational initiatives amid market dislocation .
- 2024 outcomes: financial component paid 0% given pre-tax net loss; strategic performance yielded overall 64% payout for DeGennaro ($515,185 vs $807,500 target) .
- LTI shift (2025): adds PSUs with three-year revenue and Adjusted EBITDA metrics to strengthen pay-for-performance and long-term value alignment; payout range 0–200% .
Compensation Peer Group (Benchmarking)
- Peer group used by FW Cook (13 business services companies): B. Riley Financial; Brown & Brown; Crawford & Company; Douglas Elliman*; Houlihan Lokey; Moelis & Company; Newmark Group*; Oppenheimer Holdings; Piper Sandler; PJT Partners; Ryan Specialty Group; SelectQuote; Walker & Dunlop; large diversified CRE services firms excluded due to scale .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay support: ~71% of votes cast vs ~93% in 2023; subsequent outreach to ~52% of shares outstanding led to adoption of PSUs in FY25 LTI to address investor feedback on performance-based equity .
Vesting Schedules and Insider Selling Pressure
- Upcoming vesting cadence for DeGennaro’s awards: annual on March 10 for 2022/2023/2024 grants; annual on August 10 for 2020/2021 grants; time-based RSUs can create periodic selling pressure around vest dates as shares settle and taxes are withheld .
- 2024 vest activity: 14,354 shares vested ($500,987 value realized), indicating material settlement events during the year .
Equity Ownership Guidelines & Alignment
- Executives must reach guideline ownership (CFO: ≥3x salary) within five years; all NEOs met requirements at end-2024, reinforcing alignment. Strict anti-hedging/pledging policies reduce misalignment risk; no pledging disclosed for DeGennaro .
Track Record, Execution, and Risk Indicators
- CFO responsibilities include certifications under SOX 302/906 attesting to controls and fair presentation of financials, supporting governance quality and control reliability .
- 2024 firm performance reflected resilient revenue growth (+8%) amid lower transaction activity and industry headwinds; pre-tax net loss eliminated financial bonus component, demonstrating pay-for-performance discipline .
- Red flags mitigated: no hedging/pledging; no tax gross-ups; compensation recovery policy in place. 2024 say-on-pay dip addressed with program changes. One-time off-cycle CEO grant in Aug 2023 clarified as unique; not applicable to CFO .
Investment Implications
- Compensation alignment improved materially with FY25 PSUs tied to three-year revenue and Adjusted EBITDA, increasing sensitivity of equity compensation to fundamental performance—a positive for shareholders seeking tighter pay-for-performance .
- CFO’s incentives emphasize operational effectiveness and IR execution during market dislocation; 2024’s zero financial payout and reduced annual incentive targets show discipline and downside pay sensitivity when profitability is pressured .
- Equity overhang/settlement cadence: multiple RSU tranches vest annually (March/August), with meaningful outstanding units; monitor vest dates for potential supply and insider Form 4 activity-driven trading signals .
- Retention risk appears moderated by severance protections, CoC double-trigger terms, and ownership guideline compliance; clawback, anti-hedging/pledging, and say-on-pay engagement reduce governance risk and signaling asymmetry .