Robert Banks
About Robert Banks
Robert Banks, age 50, is President and Chief Executive Officer of Nephros, Inc. and a Class III director since 2023; he holds a B.A. in Mechanical Engineering from the University of Delaware and an M.B.A. from the University of Maryland University College . He was appointed CEO effective May 11, 2023 via an employment agreement and joined the Board as a Class III director at that time . Under “Pay Versus Performance,” Nephros reported positive net income of $74,000 in 2024, with company TSR of 24.92 in 2024 and 40.33 in 2023, and compensation actually paid to the CEO decreased in 2024 driven by equity fair value changes; management cited use of net income, sales, profitability, and cash flow from operations in executive bonus determinations . In announcing succession in May 2023, Nephros highlighted early achievement of cash-flow breakeven and approximately 40% year-over-year base revenue growth thus far in 2023 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Danfoss Power Solutions | Vice President, Global OEM & Strategic Accounts | Nov 2021 – May 2023 | Led global strategic accounts; commercial leadership in industrial technologies |
| ITT Goulds Pumps | Executive Director, Product Management | Oct 2018 – Nov 2021 | Responsible for sales/marketing of leading commercial pump portfolio |
| General Electric (GE) | Various commercial/engineering roles; 16+ years in GE Water & Process Technologies | ~1999 – 2018 | Deep operational and business development experience in water/process technologies |
External Roles
- No current public company board memberships or committee roles disclosed for Robert Banks beyond service as a director of Nephros .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 229,295 | 350,000 |
| Target Bonus (%) | 50% of annualized base salary | 50% of annualized base salary |
| Actual Bonus Paid ($) | 108,776 | 35,000 |
| All Other Compensation ($) | 6,879 (SIMPLE IRA match) | 10,500 (SIMPLE IRA match) |
| Total Compensation ($) | 694,972 | 410,172 |
Performance Compensation
| Incentive Type | Metric(s) | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Annual Cash Bonus | Net income, sales, profitability, cash flow from operations | Not disclosed | 50% of base salary | $35,000 (2024); $108,776 (2023) | N/A (cash) |
| Stock Options (05/05/2023 grant) | Time-based equity; retention and alignment | N/A | 357,165 shares at $1.44 strike, 10-year term | Grant date fair value $350,022 (2023) | 25% on 05/05/2024 (89,291 shares), remainder vests quarterly thereafter |
| Stock Options (05/14/2024 grant) | Time-based equity; retention and alignment | N/A | 10,406 shares at $2.14 strike, 10-year term | Grant date fair value $14,672 (2024) | 25% on first anniversary (05/14/2025), remainder vests quarterly thereafter |
Equity Ownership & Alignment
| As-of Date | Shares Beneficially Owned | % of Shares Outstanding | Notes |
|---|---|---|---|
| April 2, 2024 | 109,291 | 1.0% | Includes 89,291 shares issuable upon exercise of options within 60 days |
| April 22, 2025 | 251,183 | 2.3% | Includes 181,183 shares issuable upon exercise of options within 60 days |
| Outstanding Options Detail (12/31/2024) | Exercisable | Unexercisable | Strike | Expiration | Vesting Schedule |
|---|---|---|---|---|---|
| 05/05/2023 grant | 133,937 | 223,228 | $1.44 | 05/05/2033 | 25% at 1-year anniversary, then quarterly |
| 05/14/2024 grant | — | 10,406 | $2.14 | 05/14/2034 | 25% at 1-year anniversary, then quarterly |
- Hedging/pledging: Officers and directors are prohibited from pledging, short-selling, or engaging in hedging or derivative transactions on Company securities under the Insider Trading Policy .
- Director pay: Executive officers do not receive additional compensation for service as directors .
Employment Terms
| Term | Detail |
|---|---|
| Start Date | Appointed CEO May 11, 2023 (agreement executed May 5, 2023) |
| Base Salary | $350,000 initial; auto-increases to $400,000 upon ≥$15M annual net revenue; $450,000 upon ≥$20M annual net revenue |
| Annual Bonus Target | 50% of annualized base salary; based on Company performance and Board-set objectives |
| Severance | If terminated without “cause” or resigns for “good reason”, up to 12 months of continued base salary and health benefits |
| Change of Control (CIC) | Upon a Change of Control (2015 Plan definition), all options awarded pursuant to Banks Employment Agreement vest and become immediately exercisable (single‑trigger acceleration) |
| Equity Plan Treatment | 2024 Equity Incentive Plan permits acceleration, assumption/substitution, cash settlement, or temporary early exercise in corporate transactions; clawback language tied to exchange rules and applicable law; plan allows repricing with consent (potential governance risk if used) |
Board Governance
- Role and independence: Banks is not independent due to service as an officer; he serves as a Class III director (term expiring 2026) .
- Board composition and committees (2024–2025): Audit Committee chaired by Oliver Spandow (financial expert); Compensation Committee composed of independent directors; Governance Committee composed of independent directors; Banks is not listed on Board committees .
- Board leadership: No named Chairman of the Board in 2024 .
- Meetings and attendance: Board held six meetings in 2024; all directors attended at least 75% of meetings and relevant committee meetings .
- Investor rights influence: Wexford Capital retains rights to nominate and remove directors; one Wexford director seat currently filled (Arthur Amron), the second is vacant, indicating significant shareholder influence .
Performance & Track Record
| Year | Company TSR (Index = $100) | Net Income (Loss) ($) |
|---|---|---|
| 2023 | 40.33 | (1,575,000) |
| 2024 | 24.92 | 74,000 |
- 2023 succession release noted early cash-flow breakeven and ~40% YoY base revenue growth year-to-date in 2023 .
- 2024 “Pay Versus Performance” analysis indicates reduced Compensation Actually Paid to the CEO due to decreased fair value of equity and lower bonus payouts, reflecting program sensitivity to performance and market conditions .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval: approximately 99% of votes cast favored executive compensation .
- 2023 say-on-pay approval: approximately 86% of votes cast favored executive compensation .
Related Party Transactions and Red Flags
- Wexford Capital LP beneficially owned ~34% in 2024–2025; director fees for Arthur Amron have been directed to Wexford; no related-party transactions disclosed involving Robert Banks .
- 2024 Equity Plan permits repricing of options with participant consent; while not disclosed as used, the capacity is a governance risk if exercised .
- Insider Trading Policy prohibits pledging/hedging/short sales, supporting alignment .
Compensation Structure Analysis
- Shift in mix: 2023 included a large option grant ($350,022 grant date fair value), while 2024 equity grants were modest ($14,672), and cash bonus declined ($35,000 vs $108,776), tightening pay-for-performance linkage amid lower equity fair value and metrics .
- Performance metrics: Bonuses reference net income, sales, profitability, and cash flow from operations; specific weightings and thresholds are not disclosed .
- CIC terms: Single-trigger option acceleration under Banks’ agreement may create overhang or retention trade-offs in change-of-control scenarios .
- Ownership alignment: Beneficial ownership increased to 2.3% by April 2025, including significant vested options, with prohibitions on pledging/hedging improving investor alignment .
Investment Implications
- Alignment and sensitivity: Banks’ compensation is anchored by a 50% target bonus and time-based options; “Compensation Actually Paid” fell in 2024 due to equity value declines and lower bonuses, indicating sensitivity to performance and market conditions .
- Potential insider supply: With 181,183 options exercisable within 60 days of April 22, 2025 and ongoing quarterly vesting on remaining grants, monitor insider selling pressure and Form 4 activity around vesting dates (May anniversary schedules) .
- Governance and control risk: Wexford nomination rights and ~34% ownership plus a non-independent CEO-director structure warrant monitoring of independence and minority shareholder protections; absence of a named Chair in 2024 places greater weight on committee oversight .
- Transaction scenario: Single-trigger acceleration of Banks’ options upon a Change of Control could increase deal costs or dilution; the 2024 Plan’s repricing authority is a latent red flag if utilized; confirm any actual use in future filings .
- Shareholder support: High say-on-pay approvals (99% in 2024; 86% in 2023) suggest current pay practices are acceptable to investors, but continued transparency on performance metrics and targets would improve alignment assessment .