Fred P. Lampropoulos
MERIT MEDICAL SYSTEMSAbout Fred P. Lampropoulos
Founder of Merit Medical Systems; Chair of the Board, President and CEO since 1987. Age 75; director since July 1987; prolific inventor with 300+ patents/applications and multiple industry awards . Merit delivered FY2024 record revenue of $1.357B, operating cash flow of $221M, and 5-year TSR of ~210% (Dec 2019–Dec 2024); non-GAAP EPS rose 21.3% to $3.46 and operating margin improved 180 bps YoY, reflecting strong execution under his leadership . In 2025, Merit disclosed CEO succession: Lampropoulos resigned as President/CEO effective Oct 3, 2025 and transitioned to Executive Chairman through Jan 3, 2026; he continues as Chairman thereafter, with related leadership-transition risks noted by the company .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Merit Medical Systems | Founder; Chair, President & CEO | 1987–2025 (CEO); Chair ongoing | Founder-led growth, portfolio expansion, inventor with 300+ patents; drove record FY2024 results and acquisitions |
| Utah Medical Products | Chair & President | 1983–1987 | Pre-Merit medtech leadership experience |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Multiple community/advisory boards | Board/advisory service | Various | Community and industry engagement; recognition includes Salt Lake “Giant in our City” (2019) and Utah Governor’s Medal for Science & Technology (2003, 2018) |
Fixed Compensation
| Metric | FY 2024 | FY 2025 (approved) |
|---|---|---|
| Base Salary ($) | $1,890,000 | $1,890,000 |
| Target Bonus (% of base) | 60% | — |
| Actual Performance Bonus Paid ($) | $1,348,326 (118.90% attainment) | — |
Performance Compensation
Annual Performance Bonus (Executive Bonus Plan – FY 2024)
| Metric | Weight | Target | Actual Result | Attainment contribution |
|---|---|---|---|---|
| Sales | 40% | $1,325M | $1,357M | 44.76% |
| Operating Margin (Non-GAAP) | 40% | 18.90% | 18.98% | 41.69% |
| EPS (Non-GAAP) | 20% | $3.35 | $3.46 | 21.64% |
| CGI Modifier (Gross Margin + Engagement) | 100% cap | 105% + 105% | Total modifier 110% (capped) | 110% |
| Total Attainment | — | — | — | 118.90% |
Notes: Modifier goals were 51.05% Non-GAAP gross margin and employee engagement ≥50th percentile of Gallup benchmark; modifier capped at 110% .
Long-Term Equity – PSUs and RSUs
| Element | Grant/Period | Target/Terms | Vesting/Performance | Outcome/Payout |
|---|---|---|---|---|
| PSUs (2024 grant) | 3-year 2024–2026 | Target shares: 16,402; intended fair value $1,254,900; metrics: Free Cash Flow and rTSR vs Russell 2000; PSU mix is 60% of target LTI | FCF multipliers: 50% at $320M (Threshold), 100% at $400M (Target), 200% at $480M (Max); rTSR multipliers: 75% at ≤25th pct, 100% at 50th pct, 125% at ≥75th pct | In progress (2024–2026) |
| PSU Cash Incentive (CEO feature) | 3-year 2024–2026 | Target cash $1,565,100; same FCF/rTSR multipliers as PSUs | Vests at period end per PSU rules; paid if performance ≥Threshold | In progress |
| PSUs (2022 grant, settled 2025) | 3-year 2022–2024 | Target shares: 12,302 | Achieved FCF Max ($475M; 200%) and rTSR 1st quartile (125%); total payout 250% | Shares issued: 30,755; CEO PSU cash incentive paid: $2,500,000 |
| RSUs (2024 grant) | Granted 3/4/2024 | 24,572 RSUs; intended fair value $1,880,000 | Time-based vest in 4 equal annual installments; shares issued only upon vest | In progress |
Equity Ownership & Alignment
| Item | Amount/Detail |
|---|---|
| Beneficial ownership (shares) | 1,533,981; 2.6% of outstanding common stock |
| Shares outstanding (Record Date) | 59,067,132 (as of Mar 18, 2025) |
| Options exercisable within 60 days | 381,144 shares |
| Shares in 401(k) plan | 97,798 shares |
| Unvested RSUs (12/31/2024) | 24,572 units |
| Unearned PSUs outstanding (12/31/2024) | 32,804 units |
| Stock ownership guideline | CEO must hold ≥5x base salary; compliance confirmed Dec 2024 |
| Hedging/derivatives policy | Prohibits short sales, puts/calls, hedging, and gifts during blackout; pre-clearance required; enhancements under review |
Outstanding Option Detail (selected grants):
- 3/1/2019: 159,151 exercisable; $55.73 strike; expires 3/1/2026
- 2/26/2020: 100,334 exercisable; $37.71 strike; expires 2/26/2027
- 3/19/2021: 43,563 exercisable; 14,520 unexercisable; $56.25; expires 3/19/2028
- 2/28/2022: 24,284 exercisable; 24,282 unexercisable; $65.03; expires 2/28/2029
- 2/28/2023: 13,576 exercisable; 40,726 unexercisable; $70.58; expires 2/28/2030
No specific disclosure of share pledging; hedging/derivatives are prohibited by policy .
Employment Terms
| Provision | Key Terms |
|---|---|
| CEO Employment Agreement (Amended & Restated) | Effective June 8, 2023; term through Dec 31, 2025; increases base salary; Good Reason right if base/bonus not maintained above thresholds; Board-approved after consultant review |
| Base Salary (2024/2025) | $1,890,000 per year |
| Annual Bonus Plan (post-CoC) | Must be ≥ average of prior 3 fiscal years post-CoC |
| Non-CoC termination (CEO) | Accrued obligations + 2x base salary + 24 months welfare benefits; automatic vesting of options and satisfaction of service-based vesting for equity awards outstanding >1 year; plus certain other benefits |
| Change-in-control (CIC) severance | Double-trigger: payment if terminated without Cause or resigns for Good Reason in connection with CoC; CIC severance generally equals 2x base + average annual bonus, with timing subject to 409A; benefits continuation and outplacement; other benefits paid per plans |
| PSU acceleration on CIC (NEOs) | Target PSU shares paid within 30 days of CIC; CEO also receives Target Cash Incentive (for PSU cash component) |
| Clawback | Executive Incentive Compensation Clawback Policy adopted Oct 2, 2023; applies to incentive comp during 3 prior fiscal years upon restatement; PSU and bonus agreements include clawback features |
| Deferred Compensation | Non-qualified plan; executives may defer up to 100% of salary and bonus; no company match to date |
| Tax gross-ups | No 280G/4999 tax gross-ups; excess parachute payments may be non-deductible |
Board Governance
- Roles: Combined Chair and CEO roles (until Oct 3, 2025), justified by founder experience; Lampropoulos is not independent; majority of Board is independent; Lead Independent Director (F. Ann Millner) with robust duties and quarterly executive sessions .
- Committees: Audit, Compensation & Talent Development, Governance & Sustainability, Finance & Operating; Lampropoulos is not listed as a member of Board committees .
- Meetings: Board met 10 times in 2024; all directors attended ≥75% of Board/committee meetings; independent directors held 5 executive sessions .
- Director compensation: Non-employee director retainers and RSUs disclosed; CEO-director is excluded from director comp table; director equity grant of 2,431 RSUs in 2024 vesting in one year . Post-Jan 3, 2026, Lampropoulos will receive non-employee director compensation; a consulting agreement is being negotiated .
Performance & Track Record
| Metric/Initiative | Detail |
|---|---|
| Financial performance (FY2024) | Revenue $1.357B; Operating cash flow $221M; Non-GAAP EPS $3.46; 5-year TSR ~210%; operating margin up 180 bps YoY |
| Strategic actions | Acquired EsophyX Z+ device/assets from EGS for $105M (closed Jul 1, 2024; integration substantially completed Dec 2024); acquired Cook Medical lead management portfolio for ~$210M (closed Nov 1, 2024); Wrapsody CIE PMA received Dec 20, 2024, US commercialization began Jan 2025 |
| Programs | Launched three-year Continued Growth Initiatives (CGI) Program with revenue, operating margin, and FCF targets; on track after Year 1 |
| Shareholder sentiment | Say-on-pay support ~96% at 2024 AGM; Board committed to annual say-on-pay |
Compensation Committee Analysis
- Composition: Lonny J. Carpenter (Chair), Stephen C. Evans, Laura S. Kaiser, F. Ann Millner; all independent; 5 meetings in 2024 .
- Consultant: Pearl Meyer retained since 2019; reviewed peer group and program changes; 2024 peer group includes CONMED, Teleflex, Masimo, Integer, etc.; compensation decisions consider peer data without fixed benchmarking .
- Program evolution: Shift from options to a 60% PSUs / 40% RSUs long-term mix beginning in 2024; reinforces pay-for-performance and retention alignment .
Related Person Transactions (Governance considerations)
- Joseph C. Wright (former President; brother-in-law of Lampropoulos): received total 2024 cash/equity compensation of $3,724,475; resigned effective Jan 3, 2025; separation agreement documented payments and benefits; Audit Committee oversight of related transactions .
- Sales to SSM Health (CEO-director Laura Kaiser’s employer) totaled ~$3.9M; no personal interest for Ms. Kaiser .
Equity Ownership & Alignment – Detailed Awards (12/31/2024 snapshot)
| Award Type | Status/Terms |
|---|---|
| Options | Various grants with strikes $37.71–$70.58; expirations 2026–2030; exercisable and unexercisable amounts detailed above |
| RSUs | 24,572 granted in 2024; vest 25% annually over 4 years |
| PSUs | 2024 grant target 16,402 shares; 2022 grant paid out 250% (30,755 shares) plus $2,500,000 cash |
Employment & Transition Risk
- CEO transition: Effective Oct 3, 2025, Lampropoulos transitioned from CEO to Executive Chairman; new CEO Martha G. Aronson appointed and added to Board; transition may create operational and stock price volatility and relationship risks; no key-man insurance maintained .
- Post-employment: Through Jan 3, 2026, he receives prior agreement salary/bonus/benefits; thereafter, compensated as non-employee director; potential consulting arrangement under negotiation .
Investment Implications
- Alignment and upside: Strong pay-for-performance architecture (60% PSUs; annual bonus tied to sales/margin/EPS with CGI modifier) and stringent clawback/anti-hedging policies are shareholder-friendly; CEO meets 5x salary ownership guideline, and beneficial ownership of 2.6% aligns incentives .
- Supply/vesting dynamics: Ongoing RSU vesting and sizable option overhang through 2030 could intermittently add share supply; PSU outcomes leverage FCF and rTSR, creating potential payout sensitivity to multi-year execution and market relative performance .
- Governance watchpoints: Dual Chair/CEO structure mitigated by a strong Lead Independent Director; related-party employment (Wright) was disclosed and resolved; continued monitoring of succession execution is warranted given noted transition risks and absence of key-man insurance .
- M&A/cash generation levers: Demonstrated ability to integrate acquisitions (EGS, Cook) and deliver FCF supports PSU targets; continued CGI-driven margin expansion and product approvals (Wrapsody CIE) are positive catalysts for long-term incentive realization .