Martin Kay
About Martin Kay
Martin Kay, 61, is President, Chief Executive Officer, and Director of Netcapital Inc. (NCPL). He has served as a Director since May 2022 and as CEO since January 3, 2023. Kay holds a BA in physics from Oxford University and an MBA from Stanford GSB; he was formerly a Managing Director at Accenture Strategy (Oct 2015–Dec 2022) and served on the board of managers of Netcapital Systems LLC (2017–2021) overseeing the company’s funding portal . Company performance during his tenure showed negative net income in FY2024 and FY2025 and deteriorating TSR on the SEC pay-versus-performance table, indicating execution and capital market headwinds .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Netcapital Systems LLC | Board of Managers | 2017–2021 | Oversight of the company’s funding portal operations |
| Netcapital Inc. | Director | May 2022–present | Board service concurrent with executive leadership |
| Netcapital Inc. | Chief Executive Officer | Jan 2023–present | Principal executive officer; certifications and governance oversight |
| Accenture Strategy | Managing Director | Oct 2015–Dec 2022 | C‑suite advisor and digital media entrepreneur experience |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Accenture Strategy | Managing Director | Oct 2015–Dec 2022 | Business/technology advisory experience leveraged in NCPL strategy |
Board Governance
- Board service history: Director since May 2022; elected at the 2025 Annual Meeting with 580,624 “For” and 1,422,538 “Withhold” votes, reflecting significant shareholder opposition to his board seat .
- Committee roles: NCPL maintains Audit (Chair: Steven Geary), Compensation (Chair: Avi Liss), and Nominating & Corporate Governance (Chair: Arnold Scott) committees; all committee members are independent under Nasdaq rules. Kay is not listed as a member of these committees .
- Independence: The Board’s independent directors are Liss, Scott, and Geary; as CEO, Kay is not independent .
- Board activity: The Board held no meetings and acted by written consent 19 times in FY2025; Audit Committee held four meetings; Compensation and Nominating committees acted by written consent once each .
Fixed Compensation
| Metric | FY 2024 | FY 2025 |
|---|---|---|
| Base Salary ($) | 300,000 | 300,777 |
| Bonus ($) | 40,000 | 75,000 |
| Total ($) | 340,000 | 375,777 |
Notes:
- Bonuses were discretionary, tied to completion of fiscal year-end, executing equity financing, and advancing the broker-dealer license process for a new subsidiary .
Performance Compensation
Equity Awards (options)
| Grant Date | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration | Vesting |
|---|---|---|---|---|---|
| Jan 1, 2023 | 8,334 | 5,952 | 100.10 | Jan 3, 2033 | Monthly over 48 months |
| Feb 1, 2022 | 232 | 54 | 735.00 | Feb 9, 2032 | Monthly over 48 months |
| Jun 8, 2025 (subject to stockholder approval) | 0 (not exercisable) | 100,000 | 2.68 | Jun 8, 2035 | Fully vested but contingent on plan amendments |
- The Board granted Kay 100,000 options at $2.68 in June 2025, fully vested with a four-year term, but explicitly not exercisable unless shareholders approved amendments to the 2023 Plan; aggregate grant-date fair value to Kay and the CFO was $822,900 (Black-Scholes) .
- Shareholders did not approve the equity plan amendments at the September 11, 2025 Annual Meeting, leaving the 100,000 options not exercisable .
Bonus Design and Metrics
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Discretionary bonus (strategic milestones: year-end completion, financing, broker-dealer licensing progress) | N/A | No formal formula | Achieved milestones (FY2025) | 75,000 (FY2025) | Cash (none) |
| Revenue-sharing bonus | N/A | 0.5% of gross revenue paid in cash annually, contingent on positive earnings after bonus is paid | Not disclosed | Not disclosed | Cash (none) |
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Total beneficial ownership (shares) | 64,822; comprised of options currently exercisable or exercisable within 60 days of Record Date |
| Ownership as % of shares outstanding | 2.09% (based on 3,040,380 shares) |
| Vested/exercisable options (as of Apr 30, 2025) | 8,334 (2023 grant) + 232 (2022 grant) = 8,566 |
| Unvested/unexercisable options (as of Apr 30, 2025) | 5,952 (2023 grant) + 54 (2022 grant) = 6,006 |
| Additional contingent options | 100,000 at $2.68, Jun 8, 2035 expiration; not exercisable due to failed plan amendments |
| Shares pledged as collateral | Not disclosed in proxy; no pledging disclosure found |
| Ownership guidelines | Director/Executive stock ownership guidelines not disclosed in proxy |
Employment Terms
- Agreement date and term: Employment agreement dated January 3, 2023; three-year term .
- Compensation elements: Base salary $300,000; option grants to purchase 1,429 fully vested shares and 14,286 shares vesting monthly over four years, subject to the 2023 Plan; discretionary bonuses; revenue-sharing bonus equal to 0.005 times gross revenue paid in cash annually, contingent on positive earnings after bonus is paid .
- Termination and restrictive covenants: Terminable upon death, by Kay, by company due to disability, for “cause,” or by Kay for “good reason”; includes six-month non-compete, confidentiality, and conduct covenants .
- Perquisites: Not a material component; no reimbursements for personal expenses; 2024 NEOs did not receive non-business allowances or reimbursements .
- Clawback, severance multiples, change-of-control economics: Not disclosed in the proxy; plan charters and insider trading policy are referenced, but clawback/severance terms are not specified .
Performance & Track Record
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Value of $100 initial investment (TSR) | 15.11 | 1.47 | 0.29 |
| Net Income ($) | 2,954,972 | (4,986,317) | (27,969,279) |
Additional context: The FY2025 10-K includes an auditor “going concern” emphasis citing negative working capital, operating losses, and negative operating cash flow .
Say‑on‑Pay & Shareholder Feedback
- 2025 Say-on-Pay vote failed: For 897,829; Against 1,427,858; Abstain 5,789; Broker non-votes 693,540 .
- 2025 Equity Plan Amendments failed: For 538,325; Against 1,459,190; Abstain 5,647; Broker non-votes 693,540 .
- Auditor ratification failed for FY2026 .
- Director elections: Kay was re-elected by plurality; vote details above .
Compensation Committee Analysis
- Committee composition and independence: Compensation Committee chaired by Avi Liss, with members Arnold Scott and Steven Geary; all independent .
- Activity: Committee acted by written consent once in FY2025; discretionary bonuses were awarded for strategic progress (financing, licensing) .
- Consultant usage/conflicts: Not disclosed in the proxy .
Related‑Party Transactions and Governance Risks
- Multiple related-party interactions with affiliates tied to CFO and subsidiaries; director stock issuances to settle payables; affiliate investments and write-offs documented in FY2025 proxy .
- Insider trading policy and indemnification framework disclosed; clawback specifics not detailed in proxy .
Investment Implications
- Pay-for-performance alignment: Cash compensation is modest; incentives rely on options and discretionary bonuses tied to strategic milestones rather than formal financial targets, which may weaken direct alignment with TSR or profitability. The 2025 equity plan amendments failed, leaving a large non-exercisable grant (100,000 options at $2.68), reducing near-term selling pressure but potentially impairing retention if equity incentives are uncertain .
- Ownership alignment: Kay’s reported beneficial ownership is primarily through options (64,822 exercisable within 60 days), equating to 2.09% of outstanding shares; pledged shares and ownership guidelines are not disclosed, limiting visibility into alignment and risk controls .
- Governance signal: The failed say-on-pay, auditor ratification, and equity plan votes, plus high “withhold” votes against Kay’s directorship, point to shareholder dissatisfaction and governance risk that could constrain strategic flexibility or increase cost of capital .
- Execution risk: Material operating losses, going-concern emphasis, and reliance on financing transactions underscore elevated execution and liquidity risk; compensation design emphasizing discretionary milestones may not fully mitigate these pressures .
Overall, compensation and ownership show moderate alignment but weak formal performance linkage; governance outcomes and financial trajectory elevate risk. Monitoring future proxy reforms (clear metrics, clawback adoption), equity plan approvals, and operating progress is critical for trading signals and retention assessment .