Frank Quesada
About Frank Quesada
Founding member of MSP Recovery and Chief Legal Officer since inception; Class III director since 2022; age 45 . Quesada oversees in‑house and outside counsel, designs legal strategy, and led multiple appellate victories that set Medicare Secondary Payer precedent, including MSP Recovery v. ACE American (11th Cir. 2020), MSPA Claims v. Kingsway Amigo (11th Cir. 2020), MSP Recovery v. Allstate (11th Cir. 2016), and MSPA Claims v. Tenet Florida (11th Cir. 2019) . Company performance metrics disclosed highlight the scale of recoveries pipeline rather than TSR/financial KPIs: as of March 31, 2025, MSP Recovery is entitled to recovery rights associated with ~$1,592B Billed Amount, ~$380B Paid Amount, and ~$87.8B Paid Value of Potentially Recoverable Claims .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| MSP Recovery Law Firm | Partner | — | Led federal appellate strategies establishing MSP Act precedent, improving recoveries across Medicare entities |
| Quesada’s prior law firm | Managing attorney | — | Managed attorneys and significant hospitality caseload |
| Elected office (municipal) | Public official | — | Policy experience leveraged for stakeholder engagement and business development |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| USA Water Polo, Inc. | Board of Directors | — | Governance experience and external network |
Board Governance
- Board service history: Class III director since 2022; member of the Nominating & Corporate Governance Committee; not classified as independent .
- Committee roles: Member, Nominating & Corporate Governance; Audit and Compensation Committees are fully independent; 71% of the Board is independent .
- Attendance: Board held 12 meetings and acted by written consent 15 times in 2024; all directors attended at least 75% of Board and applicable committee meetings .
- Leadership structure: CEO serves as Chair; Board has not designated a Lead Independent Director; executive sessions without management are part of governance practices .
- Liquidity stress signal: Cash portion of Director compensation due June 30, 2025 ($80,750) remained unpaid pending liquidity .
Dual‑role implications:
- Quesada is a non‑independent executive serving on Nominating & Corporate Governance, which can raise independence optics; however, Audit and Compensation Committees are fully independent, partially mitigating governance concerns .
Fixed Compensation
| Component | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $600,000 | $600,000 |
| Target Bonus (% of Salary) | Up to 100% (eligible) | Up to 100% (eligible) |
| Actual Cash Bonus Paid ($) | $0 | $0 |
| Stock Awards ($) | $0 | $0 |
| Option Awards ($) | $0 | $0 |
| Non‑Equity Incentive ($) | $0 | $0 |
| All Other Compensation ($) | $11,873 (benefit plan premiums, life insurance via Law Firm) | $5,055 (benefit plan premiums, life insurance via Law Firm) |
Notes:
- No equity awards were granted to named executive officers in 2024; no outstanding executive equity awards at FY‑end 2024 .
- Insider Trading Policy enforces blackout windows, pre‑clearance, and prohibits hedging, short sales, and margin accounts ; Corporate governance guidelines include prohibitions on hedging, pledging, or short sales .
Performance Compensation
| Metric | Weighting | Target | Actual (2023) | Actual (2024) | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual Cash Bonus (CEO/Executives eligible) | Not disclosed | Not disclosed | $0 | $0 | $0 | N/A |
| Equity Incentives (RSUs/PSUs/Options) | N/A | N/A | None granted | None granted | N/A | N/A |
The Incentive Plan exists, but no executive equity grants were issued in 2024; performance metric definitions, weightings, and payout curves are not disclosed in the proxy .
Equity Ownership & Alignment
| Ownership Metric | Jun 13, 2025 | Jul 9, 2025 |
|---|---|---|
| Class A Common Stock (shares) | 1,454,077 | 1,454,077 |
| Class A Ownership (%) | 22.85% | 19.87% |
| Class V Common Stock (shares) | 1,442,225 | 1,442,225 |
| Class V Ownership (%) | 43.40% | 43.40% |
| Direct holdings detail | 11,212 Class A shares and 640 Class A shares underlying New Warrants held directly | 11,212 Class A shares and 640 Class A shares underlying New Warrants held directly |
| Indirect holdings | Shares via Quesada Group Holdings LLC and Series MRCS | Shares via Quesada Group Holdings LLC and Series MRCS |
Additional alignment/risks:
- Anti‑pledging/hedging policies in effect (Company‑wide) .
- Pledging red flag: MSP Principals (Ruiz and Quesada) pledged 80,000 shares to secure the Claims Proceeds Investment Agreement (CPIA); a dispute exists about pledge amounts; CPIA Warrant not monetized as of report date .
- VRM related interests: MSP Principals’ affiliated trusts jointly hold ~1.14% of VRM (Quesada 30% of that investment), with beneficial ownership disclaimed; VRM Warrants could dilute public holders; MSP Principal Proxy may cap VRM voting at 49% and maintain MSP Principals’ voting control at 51% for one year, renewable under conditions .
Employment Terms
| Term | Detail |
|---|---|
| Role | Chief Legal Officer |
| Base Salary | Not less than $0.6 million; subject to annual review (no decrease) |
| Target Bonus | Eligible up to 100% of base salary; subject to Board approval and performance objectives |
| Equity Participation | Eligible for awards under Omnibus Incentive Plan at Board discretion |
| Benefits | Pension, medical, disability, life insurance; business expense reimbursement |
| Non‑Compete/Non‑Solicit | In effect for the term of employment agreement |
| Severance (Termination w/o Cause or for Good Reason) | Accrued compensation, pro‑rata bonus (based on full‑year actual results), and six months’ base salary |
| Change‑of‑Control | Not disclosed |
Director Compensation
| Item | 2024 Structure | Quesada (2024) |
|---|---|---|
| Annual Director Retainer | $237,000 per year; 30% cash / 70% equity (non‑employee directors) | No director compensation paid (executive director) |
| Committee Fees | Audit Chair $35,000; Audit member $25,000; Compensation Chair $25,000; Compensation member $19,000 (cash) | N/A |
| Unpaid Board Cash (Liquidity Note) | Remaining cash portion due June 30, 2025 ($80,750) unpaid as of proxy date | Board‑level context |
Related Party Transactions and Controls
- Promissory Note to MSP Principals (Ruiz and Quesada): $112.8M (4% PIK interest) to fund merger costs/operations; $5.0M annual interest expense in 2024 and 2023; $36.5M advanced to the Law Firm for operating expenses .
- Law Firm arrangements: Advances, promissory note ($4.95M, no interest), reimbursements, and employee transfers to Law Firm effective Apr 26, 2025 (38 employees; ~$395k/month now offsetting advances) .
- VRM MTA/Warrants: 19,361,939 total VRM Warrants issued to date; stockholder approval sought to exceed 20% issuance threshold; detailed dilution scenarios provided .
- Working Capital Credit Facility collateral: Additional collateral and personal guarantees by MSP Principals; Company paid certain related costs .
- Anti‑related party governance: Related Person Transaction Policy; Audit Committee oversight and approval .
Compensation Committee Analysis
- Committee members: Chair Michael Arrigo; member Beatriz Assapimonwait; fully independent .
- Independent compensation consultant: Pearl Meyer engaged since Dec 2022; evaluated as independent; scope includes proxy disclosure support and Committee advisory services .
- Controlled company caveat: Charter allows non‑independent members if the Company is a “controlled company,” though current Compensation Committee is independent and corporate governance highlights state 100% independent Audit/Compensation Committees .
Risk Indicators & Red Flags
- Pledging of shares by MSP Principals to secure CPIA (pledge dispute outstanding) .
- Significant related party financing and operational entanglements (Law Firm advances/loan, employee transfers) .
- Potential dilution from VRM Warrants and altered voting dynamics via MSP Principal Proxy; ownership/vote caps introduce complexity for minority holders .
- Liquidity constraints evidenced by unpaid Board cash retainer portion (June 30, 2025) .
Investment Implications
- Pay‑for‑performance alignment appears limited near‑term: fixed cash salary with bonus eligibility but no bonus or equity grants paid in 2023–2024; strong legal execution track record but compensation lacks explicit, disclosed performance metrics/curves, reducing contingent pay sensitivity .
- Alignment via ownership is high (Class A: ~19.9–22.9%; Class V: ~43.4%), but pledging under CPIA and extensive related‑party structures add governance risk and potential selling/pledge pressure in stress scenarios .
- Trading/dilution signals: VRM warrant exercises could materially expand float and dilute economics; MSP Principal Proxy sustains insider voting control, which may affect governance outcomes and market perception .
- Committee independence (Audit/Compensation) is a positive; dual executive/director role on Nominating & Corporate Governance may raise independence optics for board refresh decisions .