Paul DiPerna
About Paul DiPerna
Paul DiPerna (age 66) is Modular Medical’s President, Chief Financial Officer, Treasurer, and Chairman of the Board; he previously served as CEO (2017–Aug 2021). He founded Quasuras (2015), Fuel Source Partners, and Tandem Diabetes Care (2003), holds ~70 medical device and microfluidic patents, and earned a Master’s in Engineering Management (Northeastern) and a B.S. in Mechanical Engineering (UMass). The company’s Pay vs Performance disclosure shows negative TSR for FY2024 ($100 investment value 9.09) versus FY2023 (18.73), alongside net losses; CAP for non-PEO NEOs (including DiPerna) rose to $466,267 in FY2024 from $125,426 in FY2023 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Modular Medical (post-Quasuras acquisition) | Chairman, CFO, President, Treasurer; CEO until Aug 2021; Secretary until Oct 2021 | 2017–present | Led insulin pump product development; governance continuity as long-tenured chair |
| Quasuras, Inc. | Founder, CEO, Chairman | 2015–2017 | Early-stage insulin pump; technology transferred to Modular Medical |
| Fuel Source Partners, LLC | Founder | Prior to 2015 | Incubated early-stage medical device products and talent pipeline |
| Private co. (Curos Cap) | Co-inventor | 2012–2015 | Product acquired by 3M; FDA clearances achieved |
| Tandem Diabetes Care | Founder; Director, CEO, CTO | 2003–prior | Designed concept and developed initial insulin pump |
| Baxter Healthcare | Executive/management | Prior to 2003 | Drove diabetes industry M&A attempts; developed sector expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | No current public company directorships disclosed beyond Modular Medical |
Fixed Compensation
| Metric | FY2021 | FY2022 | FY2023 | FY2024 |
|---|---|---|---|---|
| Base Salary ($) | 200,000 | 370,833 (incl. $70,833 deferred salary paid) | 300,000 | 300,000 |
| Target Bonus ($) | 300,000 (Board discretion; payable in stock/options/cash) | 300,000 (same terms) | 300,000 (same terms) | 300,000 (same terms) |
| Actual Bonus Paid ($) | 50,000 (paid Apr 30, 2021 and quarterly thereafter) | — (not disclosed) | — (not disclosed) | — (not disclosed) |
- Bonus mechanics include tax reimbursement if paid in shares or options (tax gross-up) .
Performance Compensation
| Metric | FY2021 | FY2022 | FY2023 | FY2024 |
|---|---|---|---|---|
| Option Awards ($) (grant-date fair value) | 25,000 | — | 189,413 | 182,792 |
| Stock Awards ($) | — | — | — | — |
- No disclosed performance metric weightings (e.g., revenue, EBITDA, TSR) for DiPerna’s incentives; option grants predominantly time-based .
- Pay vs Performance (company-level): FY2024 TSR $100 value 9.09; FY2023 18.73; FY2024 net loss $17,470,489 .
Key Outstanding Options (as of March 31, 2023; select grants)
| Grant Date | Shares | Exercise Price ($) | Expiration | Vesting |
|---|---|---|---|---|
| 11/25/2019 | 2,222 exercisable; 27,778 unexercisable | 6.75 | 11/25/2029 | Vests monthly over 3 years from 1/1/2020 |
| 4/14/2022 | 45,000 | 4.24 | 4/14/2032 | Not detailed; referenced in CoC scenario |
| Multiple monthly grants (2018–2020) | Various small blocks (fully vested) | 6.75–9.48; 1.98 | 2028–2030 | Fully vested at grant for most (2019–2020); standard 10-year term |
- Standard option term is 10 years; options lapse 90 days post-service cessation unless exercised .
Equity Ownership & Alignment
| Ownership Detail (Record Date FY2025) | Amount | Notes |
|---|---|---|
| Beneficially owned shares (excl. awards/warrants) | 2,553,586 | 7.22% of 40,665,220 shares outstanding |
| Shares issuable on exercise of awards/warrants (≤60 days) | 410,107 | Exercisable within 60 days |
| Paul DiPerna Irrevocable Trust | 2,000,000 | DiPerna as trustee |
| Adult daughters (Kelsie & Alaria; voting by DiPerna) | 333,334 | DiPerna holds sole voting power |
| Paul DiPerna Trust | 207,906 | DiPerna as trustee |
| Direct personal holdings | 12,346 | — |
| Ownership Comparison | FY2023 | FY2025 |
|---|---|---|
| Beneficially owned shares (excl. awards/warrants) | 2,553,586 | 2,553,586 |
| Exercisable awards/warrants (≤60 days) | 186,682 | 410,107 |
| % of Class | 24.56% (out of 10,925,723 shares outstanding at FY2023 record date) | 7.22% (out of 40,665,220) |
- Hedging/Pledging: Officers and directors are prohibited from short sales; no pledging disclosure found .
- Ownership guidelines: No executive stock ownership guideline disclosed for DiPerna .
Employment Terms
| Term | Provision |
|---|---|
| Agreement dates | Employment agreement effective Aug 1, 2018; amended May 12, 2020 and July 1, 2020 |
| Role | President; also CFO, Treasurer; Chairman of the Board |
| Initial term & renewal | Initial two-year term; auto-renews for one-year terms unless 90-day notice pre-term end |
| Base compensation | $300,000 annually; historically $200,000 cash + $100,000 deferred until $5,000,000 financing threshold; deferrals ceased and paid May 2021 |
| Annual bonus | $300,000, at Board discretion; payable in stock/options/cash; company reimburses all taxes if paid in stock/options (tax gross-up) |
| Severance (no cause/good reason) | Lump sum equal to base compensation ($300,000 at the time) |
| Change-of-control (cash) | Lump sum equal to then annual base compensation within 60 days, contingent on CoC and removal from CEO/Chair role (event + termination) |
| Change-of-control (equity) | Immediate acceleration of all unvested stock options and other unvested securities prior to CoC (single-trigger for equity) |
| Illustrative CoC (3/31/2023) | $300,000 cash; 45,000-option acceleration; intrinsic value per share was zero at $1.45 closing price vs $4.24 strike |
| Clawback | Not disclosed |
| Non-compete/Non-solicit/Garden leave | Not disclosed |
Board Governance
- Board service: Chairman since 2017; remained Chairman past initial Share Agreement period; also serves as President, CFO, and Treasurer (dual roles concentrated in one individual) .
- Leadership structure: Company has no formal chair/CEO policy; positions separated since Aug 2021; committees comprise independent directors .
- Committees (FY2024–2025):
- Audit: Steven Felsher (Chair), Philip Sheibley, Carmen Volkart; 4 meetings in FY2024 .
- Compensation: Duane DeSisto (Chair), Carmen Volkart; engaged independent consultant SDHRC; recommended salary increases (DiPerna to $360,000, Schmid to $300,000) effective Apr 1, 2024; committee held no meetings in FY2024 .
- Nominating & Governance: Philip Sheibley (Chair), Steven Felsher; 1 meeting in FY2024; oversight of ESG and board evaluations .
- Board meetings: Two in FY2024; each director attended ≥75% of meetings/committee meetings while serving .
Director Compensation (for non-employee directors)
| Component | Amount | Notes |
|---|---|---|
| Annual Board retainer | $25,000 | Paid quarterly in cash, stock, or options per director election |
| Committee chair fee | $5,000 | Annual retainer |
| Annual service equity award | $100,000 | Paid quarterly in stock or options; minimum $10.00 per-share valuation in Director Plan |
| Initial appointment equity | Granted under 2017 Plan; 3-year vesting | Non-employee directors only |
- Example: Upon appointment (July 2023), Director Duane DeSisto received RSU for 250,000 shares; 187,499 unvested as of 3/31/2024 .
- DiPerna’s compensation is disclosed in executive section; he is not included in the non-employee director compensation table .
Compensation Committee Analysis
- Independence: Compensation Committee members satisfy Nasdaq independence requirements .
- Consultant: SDHRC engaged; provided industry data; recommended salary increases for DiPerna and Schmid (implemented Apr 1, 2024) .
- Pay philosophy: Committee charter emphasizes risk/reward balance and market competitiveness; CEO recommends compensation for other executives, subject to committee approval; CEO’s pay determined without his participation .
Say-on-Pay & Shareholder Feedback
- Advisory votes conducted; frequency recommendation discussion in FY2023 proxy (proposed triennial); specific approval percentages not disclosed in provided excerpts .
Risk Indicators & Red Flags
- Tax gross-up: Employment agreement reimburses all tax obligations if bonus is paid in stock/options (shareholder-unfriendly) .
- Single-trigger acceleration: All unvested equity accelerates upon CoC regardless of termination (potential misalignment) .
- Role concentration: Chair + President + CFO + Treasurer held by one person; mitigated by independent committees but raises governance independence concerns .
- Hedging: Short sales prohibited for officers/directors; pledging policy not disclosed .
- Related party incentives: Royalty agreement entitling DiPerna to product-based fees up to $10,000,000 (alignment to commercialization but potential conflict if terms are not arm’s-length) .
Equity Ownership & Alignment – Additional Observations
- Significant beneficial ownership (7.22% in FY2025), including trusts and voting control over family-held shares, suggests strong alignment; exercisable awards increased by FY2025, potentially increasing flexibility for liquidity if market conditions allow .
- In-the-money value: As of 3/31/2023, the 45,000 option was out-of-the-money (intrinsic value zero) at $1.45 vs $4.24 strike; many legacy grants carry higher strikes (6.75–9.48), implying limited immediate economic value absent price appreciation .
Employment & Contracts – Retention Risk
- Auto-renewing agreement with modest severance (1× base compensation) on no-cause/good-reason termination enhances retention but limits cash exit costs; CoC cash value is limited (1× base) although equity fully accelerates, which may reduce lock-in at transaction close .
- Non-compete/non-solicit terms not disclosed; absence of disclosed restrictive covenants can elevate transition risk for a founder/inventor profile .
Performance & Track Record
- Foundational industry impact (Tandem pump concept; Curos Cap acquired by 3M; multiple FDA clearances) demonstrates product development execution; company-level TSR and net loss trends reflect development-stage risk profile rather than mature profitability .
Investment Implications
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Alignment: 7.22% beneficial ownership, trustee control over significant trusts, and voting power over family-held shares align DiPerna with equity value creation; however, single-trigger equity acceleration at CoC and tax gross-up on equity bonuses are governance negatives that can dilute pay-for-performance rigor .
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Retention/Liquidity: Many options are already fully vested with high strikes; near-term insider selling pressure may be limited by strike levels rather than vesting constraints. If share price appreciates above legacy strike prices, exercisable overhang (410,107 within 60 days) could become an overhang to monitor .
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Governance: Role concentration (Chair + CFO + President + Treasurer) raises independence concerns; mitigated by independent committees and external comp consultant engagement. Continued disclosure of committee activities and say-on-pay outcomes will be key signals .
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Change-of-Control Economics: Cash payout is modest (1× base), but full acceleration of unvested equity can be material at higher share prices, potentially influencing transaction dynamics and creating event-linked supply if options become in-the-money .
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Monitor: Any updates to salary (Board authorized increase to $360,000 effective Apr 1, 2024) in forthcoming compensation tables; new equity awards or changes to CoC/bonus tax provisions; Form 4 activity for selling/exercise; and any pledging/hedging policy enhancements .