John E. Sagartz

About John E. Sagartz

Chief Strategy Officer and Director at Inotiv (NOTV). Joined via the acquisition of Seventh Wave Laboratories on July 2, 2018; currently age 59; holds a BS and DVM from Kansas State University and a Ph.D. from The Ohio State University; board-certified toxicologic pathologist (DACVP). Career spans toxicologic pathology at Searle/Monsanto (1996), leadership at Pharmacia post-merger, and founding/leading Seventh Wave until the 2018 sale to Inotiv; external roles include adjunct associate professor at St. Louis University College of Medicine and director at the National Association for Biomedical Research. Company TSR has been volatile; the pay-versus-performance table shows a $100 fixed investment value of $10.53 in FY2023 and $5.81 in FY2024 alongside net losses of $105.1m and $108.4m, respectively.

Past Roles

External Roles

Fixed Compensation

Notes:

• Employment agreement base salary set at $250,000 with annual auto-renewal; actual salary increased via annual compensation decisions.
• For FY2024, the Compensation Committee determined no cash bonuses for NEOs due to inability to set reliable performance metrics amidst market headwinds.

Performance Compensation

Grant timing policy: awards typically granted two days after earnings release/10-Q/10-K filings to avoid MNPI; Q2 FY2024 awards dated 8/10/2024 following 8/8/2024 disclosures (closing price change −0.6%).

Multi-Year Compensation Mix

Equity Ownership & Alignment

Vesting schedule highlights (supply overhang indicator):

• Options: 8,000 on 6/18/2025; 6,000 on 6/18/2026; 6,000 on 6/18/2027 (from 8/10/2024 grant at $1.61) .
• RSUs: 20,000 vest on 6/18/2026 (from FY2024 awards) .

Employment Terms

• Agreement: Auto-renewing one-year terms ending July 1; base salary specified at $250,000 with eligibility for company-wide incentive plans. Includes non-compete, non-solicit, and confidentiality covenants.
• Severance (non-CIC): If terminated without cause or resigns for good reason—12 months’ salary paid bi-weekly, up to 12 months COBRA reimbursement (ceases upon new coverage), and pro-rated annual bonus based on actual results; subject to release and restrictive covenants.
• Change-in-control plan: Tier II participant—cash severance equal to 2.0x base salary + target bonus, pro-rated bonus, 18 months benefits continuation, up to $50,000 outplacement, and accelerated vesting (performance awards at target) upon qualifying termination within 24 months of a CIC; double-trigger structure and 280G cutback mechanism.

Board Governance

• Director since 2018; serves as a management director (non-independent). Board explicitly determined he and the CEO are not independent; all committees are composed of independent non-employee directors.
• Committee roles: Not listed as a member of Audit, Compensation, or Nominating/Corporate Governance; those committees had independent membership in FY2024.
• Board leadership: Chairman and CEO roles separated (current Chair: R. Matthew Neff), supporting governance independence.
• Attendance: No director attended fewer than 75% of board/committee meetings in FY2024; all directors attended the 2024 annual meeting.
• Director compensation: Employed directors receive no additional board pay.

Director Compensation (Non-Employee Reference for Context)

• Cash retainers: Board $55k; Chair $50k; Audit Chair $20k; Comp Chair $15k; Nominating Chair $10k; committee member fees vary.
• Equity: FY2024 annual RSU grant of 27,500 per non-employee director, vesting Mar 31, 2025; value ≈$44,275.

Compensation Structure Analysis

• Mix and trends: FY2024 compensation leaned toward equity (RSUs/options) with no cash bonus due to lack of reliable metrics; FY2023 included a modest discretionary bonus ($37.5k) and RSUs, reflecting retention orientation over strict performance pay amid sector headwinds.
• Equity award characteristics: No option repricing permitted; option exercise prices at/above fair market value on grant; plan excludes excise tax gross-ups; double-trigger CIC vesting. These features align with shareholder-friendly practices but still provide meaningful CIC protection.
• Grant timing controls: Committee avoids granting near MNPI; FY2024 option grants followed earnings/10-Q with one full trading day elapsed.

Risk Indicators & Red Flags

• Insider trading policy: Prohibits pledging, hedging, short sales, and speculative derivatives; only same-day limit orders and approved 10b5-1 plans permitted.
• Section 16 compliance: In FY2024, multiple insiders (including Dr. Sagartz) filed one Form 4 late by 1–2 days for annual equity awards.
• Pay vs performance: Company TSR deteriorated in FY2024, and losses widened; absence of performance-tied bonuses may signal conservative pay-for-performance posture but reduces short-term alignment.

Compensation Committee & Advisors

• Committee composition: Independent directors; met 6 times in FY2024; oversees compensation philosophy, peer group, equity plans, HCM topics, and clawback/ownership policy adoption.
• Consultant: Meridian Compensation Partners LLC provides market assessments to inform executive pay decisions.

Equity Award Detail (Vesting Schedules)

FY2024 awards total 46,250 shares subject to awards (RSUs + options), aggregate grant-date fair value $70,394.

Say-on-Pay & Frequency

• Advisory vote: Shareholders asked to approve NEO compensation (triennial cadence); Board recommends frequency of every three years to emphasize long-term value creation.

Investment Implications

• Alignment: Significant personal stake (2.0% of shares in 2025) and meaningful unvested equity with scheduled vesting through 2027 support retention and long-term orientation; anti-pledging/hedging policy strengthens alignment.
• Near-term supply: Multiple vesting events (options/RSUs) in 2025–2027 could contribute to incremental tradable supply; monitor 10b5-1 plan usage and Form 4 filings around vest dates for selling pressure signals.
• Governance: Dual role as officer/director reduces independence; however, separation of Chair/CEO and committee independence mitigates oversight risk.
• CIC economics: Tier II 2x base+target bonus plus accelerated vesting could create change-of-control payout magnitude; double-trigger terms reduce windfalls without termination.
• Performance linkage: Absence of defined annual performance metrics in FY2024 (and discretionary approach in FY2023) weakens direct pay-for-performance signals; watch for reintroduction of objective metrics (revenue, EBITDA, TSR, ESG) as industry conditions normalize.