Neil W. Peterson
MERIT MEDICAL SYSTEMSAbout Neil W. Peterson
Neil W. Peterson is Chief Operating Officer (COO) of Merit Medical Systems (MMSI) and has served in this role since April 2022. He is 59 years old and holds a B.S. in Electronic Engineering from Weber State University; his biography notes more than 30 years of service at Merit, including prior leadership as Vice President of Operations . His remit includes execution against Merit’s three‑year CGI Program targets: revenue of $1.357B with 6.0% constant‑currency organic growth, non‑GAAP operating margin improvement of 180 bps YoY, and free cash flow generation of >$185M (+67% YoY), alongside operating efficiency initiatives, acquisition integration (Cook Medical lead management and EGS EsophyX Z+), and sustainability oversight . Management reported record revenue and operating margin/free cash flow levels in 2024 that produced shareholder returns near the top of the peer group .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Merit Medical Systems, Inc. | Vice President, Operations; prior operations leadership roles | 30+ years at Merit (prior to appointment as COO in Apr 2022) | Drive operating efficiency, integrate acquisitions (Cook lead management, EGS EsophyX Z+), and execute sustainability initiatives under CGI Program |
External Roles
- No external directorships or external roles are disclosed in the executive officer biography for Peterson in the proxy statement .
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 526,308 | 629,423 | 630,000 |
| Performance Bonus Target (%) | — | 40% | 40% |
| Performance Bonus Paid ($) | 220,008 (paid at 91.67% of target) | 297,662 (paid at 118.12% of target) | 299,628 (paid at 118.90% of target) |
| All Other Compensation ($) | 50,309 | 81,391 | 83,062 |
| Total Reported Compensation ($) | 1,432,850 | 2,712,541 | 3,137,370 |
Performance Compensation
Equity Program Design and 2024 Awards
- Merit targets a performance‑heavy equity mix: NEO target equity 60% PSUs, 40% RSUs (three‑year PSU performance periods; RSUs time‑based) .
- 2024 grants to Peterson: PSUs target 10,979 shares (intended fair value $840,000) and RSUs 7,319 shares (grant date fair value $559,977) .
| 2024 Equity Awards | Metric / Terms | Target / Quantity | Value |
|---|---|---|---|
| PSUs (2024–2026 performance period) | Free Cash Flow (FCF) and relative TSR vs Russell 2000; three‑year performance period; vesting date is the second day of the calendar year following performance period | 10,979 Target PSU Shares | Intended fair value $840,000 |
| RSUs (time‑based) | Time‑vested, ratable over four years | 7,319 RSUs | Grant date fair value $559,977 |
PSU Performance Metrics and Payouts
- PSU design ties payouts to FCF targets and rTSR quartiles versus the Russell 2000; Compensation Committee determines multipliers at period end .
- 2022 PSU payout (three‑year period, issued in 2025): Maximum FCF achieved with 200% multiplier; 1st quartile rTSR at 125%; total payout 250%; Peterson received 11,533 shares issued in 2025 .
| 2022 PSU Outcome (issued in 2025) | Metric | Target / Achieved | Multiplier | Total Payout | Shares Issued |
|---|---|---|---|---|---|
| Free Cash Flow | Target $330M; Maximum $396M; Achieved $475M | Max achieved | 200% | 250% with rTSR | 11,533 |
| rTSR vs Russell 2000 | 1st Quartile achieved | Top quartile | 125% | 250% with FCF | 11,533 |
Annual Cash Incentive (Executive Bonus Plan)
- Design: pre‑established performance goals; for 2024, bonus modifiers capped at 110% via Gross Margin (51.05% target, 105% modifier) and Employee Engagement (50th percentile, 105% modifier) .
- Peterson’s target 40% of base; payouts: 2022 at 91.67% of target; 2023 at 118.12%; 2024 at 118.90% .
| Year | Base ($) | Target % | Attainment | Paid ($) |
|---|---|---|---|---|
| 2022 | 526,308 | — | 91.67% | 220,008 |
| 2023 | 629,423 | 40% | 118.12% | 297,662 |
| 2024 | 630,000 | 40% | 118.90% | 299,628 |
Vesting Schedules and Key Terms
- Options: 2023/2022/2021/2020 grants vest 25% annually over four years from grant date; other outstanding options vest 20% annually over five years .
- RSUs: vest ratably over four years of service .
- PSUs: three‑year performance period; vesting date is the second day of the calendar year following the period; pro‑rata eligibility after performance period upon death/disability/termination without cause/resignation for good reason (≥1 year post‑grant); in a Change in Control, target PSU shares are paid within 30 days (double‑trigger arrangements apply via employment agreements) .
Equity Ownership & Alignment
Beneficial Ownership (as of March 18, 2025)
| Holder | Shares Beneficially Owned | Options Exercisable within 60 Days | Ownership % |
|---|---|---|---|
| Neil W. Peterson | 52,146 | 35,538 | <1% (*) |
Outstanding Equity Awards (as of December 31, 2024)
Option Awards:
| Grant Date | Exercisable | Unexercisable | Exercise Price ($) | Expiration |
|---|---|---|---|---|
| 04/25/2019 | 15,000 | — | 54.40 | 04/25/2026 |
| 08/19/2021 | 18,750 | 6,250 | 68.33 | 08/19/2028 |
| 02/28/2023 | 3,394 | 10,182 | 70.58 | 02/28/2030 |
Stock Awards:
| Grant Date | Unvested RSUs (#) | Market Value ($) | Unearned PSUs (#) | Market Value ($) |
|---|---|---|---|---|
| 02/28/2022 | 11,533 | 1,115,423 | — | — |
| 02/28/2023 | — | — | 17,002 | 1,644,433 |
| 03/04/2024 | 7,319 | 707,894 | 21,958 | 2,123,778 |
Alignment policies:
- Hedging, short‑term trading, short sales, and derivatives trading in Merit stock are prohibited for executive officers; trading windows are restricted and require pre‑clearance; Rule 10b5‑1 procedures enhanced; gifts during blackout periods restricted .
- Stock ownership guidelines apply numerically to CEO (≥5x salary) and directors (≥5x retainer); no numeric guideline disclosed for other NEOs; Governance Committee monitors compliance for CEO/directors .
- No disclosure of share pledging by Peterson; pledging policy is not explicitly referenced in the proxy excerpts .
Employment Terms
Change‑in‑Control (CIC) Framework and Amounts (double‑trigger)
- CIC provisions are double‑trigger (payment only if terminated without cause or resigns for good reason in connection with a CIC); designed to balance retention and acquirer economics .
- As of 12/31/2023, estimated CIC termination economics for Peterson: salary/bonus continuation $1,641,163; stock option vesting acceleration $254,654; stock award vesting acceleration $996,139; health coverage continuation $32,569; deferred compensation $536,401; total $3,460,926 .
| Component (as of 12/31/2023) | Amount ($) |
|---|---|
| Salary and Bonus Continuation | 1,641,163 |
| Stock Option Vesting Acceleration | 254,654 |
| Stock Award Vesting Acceleration | 996,139 |
| Health Plan Coverage Continuation | 32,569 |
| Deferred Compensation Plan | 536,401 |
| Total | 3,460,926 |
- Under PSU agreements, CIO event triggers payout of total target PSU shares within 30 days regardless of interim performance; vesting date mechanics as noted above .
Non‑CIC Termination (discretionary severance scenario)
- As of 12/31/2024, if terminated without cause/for good reason (outside CIC) and Company exercises discretion to pay one year salary plus 2024 bonus, Peterson’s estimated amounts: discretionary severance $630,000; stock award vesting acceleration $1,988,628 (pro‑rata PSUs per policy); deferred compensation $673,783; total $3,292,411 .
| Component (as of 12/31/2024) | Amount ($) |
|---|---|
| Discretionary Severance (one year salary) | 630,000 |
| Stock Option Vesting Acceleration | — |
| Stock Award Vesting Acceleration (pro‑rata PSUs) | 1,988,628 |
| Health Plan Coverage Continuation | — |
| Deferred Compensation Plan | 673,783 |
| Total | 3,292,411 |
Clawbacks and tax:
- Executive Incentive Compensation Clawback Policy adopted Oct 2, 2023 to recoup erroneously awarded incentive comp upon restatement; PSU agreements also include misconduct‑related clawback provisions tied to restatements .
- No 280G/4999 tax gross‑ups; excess parachute payments may be non‑deductible; Section 162(m) deductibility limits acknowledged and may be exceeded to maintain competitiveness .
Investment Implications
- Pay‑for‑performance alignment appears robust: significant PSU weighting (60% of target equity), with stringent three‑year goals anchored in FCF and rTSR; recent 2022 PSU payout at 250% reflects strong FCF and top‑quartile rTSR performance, signaling operational execution and shareholder alignment .
- Insider selling pressure watch‑points: sizable RSU/PSU schedules (e.g., RSUs from 2022 and 2024 and PSUs from 2023 and 2024 are outstanding), plus PSU issuance in February 2025 from 2022 performance; subject to pre‑clearance and trading windows, but potential supply overhang should be monitored around vesting events .
- Retention risk appears mitigated by double‑trigger CIC protection and meaningful severance estimates; however, absence of explicit numeric ownership guidelines for non‑CEO NEOs could dilute long‑term alignment compared to CEO/directors; governance controls (hedging bans, clawbacks, 10b5‑1 enhancements) are strong .
- Execution risk ties to CGI Program targets (top‑line growth, margin expansion, FCF) and integration of acquired portfolios; Peterson’s responsibilities are directly linked to these levers, making his operational delivery a critical factor for equity outcomes and incentive payouts .