Michael Szabados
NETSCOUT SYSTEMSAbout Michael Szabados
Michael Szabados (age 73) is Vice Chairman of the Board and a Senior Advisor at NetScout. He joined the Board in February 2019 (Class III; next election 2026) and is classified as non-independent due to his ongoing employment; he served as Chief Operating Officer from April 2007 until May 31, 2025. He holds a BSEE from UC Irvine and an MBA from Santa Clara University .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| NetScout Systems, Inc. | Chief Operating Officer | Apr 2007 – May 31, 2025 | Led scale-up and $2.3B Danaher Communications acquisition (2015) |
| NetScout Systems, Inc. | Vice Chairman of the Board | Feb 2019 – present | Board leadership; non-independent |
| UB Networks; SynOptics/Bay Networks; MIPS | Senior leadership roles | Pre-1997 | Industry and product leadership |
| Intel; Apple | Engineering/product management | Early career | Technical foundation |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| — | — | — | No other public company directorships disclosed |
Board Governance
| Attribute | Status | Evidence |
|---|---|---|
| Independence | Non-Independent (Senior Advisor; former COO) | |
| Committee assignments | None | |
| Board attendance | Each director ≥75% of Board/committee meetings in FY25; Board average 96% | |
| Lead Independent Director | John R. Egan | |
| Executive sessions | Regular sessions of independent directors led by Lead Independent Director |
Fixed Compensation
Summary Compensation (FY2025):
| Component | Amount ($) | Source |
|---|---|---|
| Salary | 423,500 | |
| Stock Awards (grant-date fair value) | 696,360 | |
| Non-Equity Incentive Plan Compensation | 256,301 | |
| All Other Compensation | 28,655 | |
| Total | 1,404,816 |
Notes:
- FY25 base salary and target bonus maintained at FY24 levels; target bonus $316,812 .
- As part of transition, he remains on existing base compensation through June 30, 2026; no FY26 annual bonus eligibility .
Performance Compensation
FY2025 Bonus Plan metrics and outcomes:
| Metric | Target Range | Actual FY25 | Outcome |
|---|---|---|---|
| Non-GAAP Revenue | $800M – $830M | $822.7M | Met |
| Non-GAAP Diluted EPS | $2.10 – $2.30 | $2.22 | Met |
| Non-GAAP Cybersecurity Revenue Growth (YoY) | 10% – 15% | 7% | Missed |
Bonus determination (NEOs):
- Formula result would have been 134.4% of target; Compensation Committee/Board applied negative discretion to 80.9% of target due to cybersecurity growth miss .
Szabados FY2025 bonus:
| Item | Amount | Source |
|---|---|---|
| Target Bonus | 316,812 | |
| Actual Payout (% of target) | 80.9% | |
| Actual Bonus Paid | 256,301 |
Outstanding equity awards (as of March 31, 2025):
| Grant Date | Unvested RSUs (#) | Market Value ($) | Unvested PSUs/Units (#) | PSU Value ($) |
|---|---|---|---|---|
| 6/6/2024 | 25,200 | 529,452 | 16,800 (target) | 352,968 |
| 6/15/2023 | 18,900 | 397,089 | 336 | 7,059 |
| 10/26/2022 | 15,750 | 330,908 | 360 | 7,564 |
| 6/4/2021 | 7,875 | 165,454 | — | — |
Vesting mechanics:
- RSUs vest in four equal annual installments; PSUs vest subject to multi-year performance and Compensation Committee certification .
Transition & change-in-control specifics:
- Under Transition Agreement (effective May 31, 2025): continues vesting in pre-5/31/25 RSUs through June 30, 2026; PSUs eligible subject to performance and certification; ineligible for FY26 annual bonus; as Board member he will not receive non-employee director compensation until full-time employment ends and prior RSUs fully vest .
- Hypothetical severance table (agreements in effect on 3/31/25; since terminated in May 2025): termination without cause post-CoC within one year → salary/other cash $740,312; equity vesting value $672,672; death/disability equity vesting value $1,601,418 .
Other Directorships & Interlocks
| Company | Role | Committee Roles | Interlocks/Notes |
|---|---|---|---|
| — | — | — | No other public company boards; no disclosed interlocks with competitors/suppliers/customers |
Expertise & Qualifications
- Industry/operator: decades in enterprise networking; sales/go-to-market; risk management and governance .
- Education: BSEE (UC Irvine); MBA (Santa Clara University) .
- Board skills: cybersecurity & data privacy oversight; international markets; leadership; service assurance & cybersecurity industry .
Equity Ownership
| Holder | Shares Beneficially Owned | % of Class | As-of Date | Source |
|---|---|---|---|---|
| Michael Szabados | 42,939 | <1% | Record Date (July 14, 2025) | |
| Post-Form 4 (ownership after trade) | 40,494 | <1% | Nov 12, 2025 |
Policies & alignment:
- Stock ownership guidelines: non-employee directors 5x annual board retainer; executive officers have role-based multiples; compliance monitored by Compensation Committee; as of March 31, 2025, each officer and non-employee director met guidelines or was within compliance period .
- Hedging/pledging prohibited under Insider Trading Policy; short sales and margin purchases prohibited .
Recent insider transactions (Form 4):
| Transaction Date | Type | Shares | Price ($) | Post-Transaction Ownership | Citation |
|---|---|---|---|---|---|
| Oct 26, 2025 | M (exempt; RSU vest) | 7,875 | 0.00 | 46,814 | |
| Nov 12, 2025 | S (sale) | 4,000 | 28.35 | 40,494 |
Fixed vs. Director Compensation
- NetScout compensates only independent directors; neither CEO (Singhal) nor Szabados (Senior Advisor; former COO) receive director fees or director equity while employed .
- Independent director cash retainers (FY25): Board chair retainer $95,000, member $60,000; committee chairs/members: Audit $30,000/$15,000; Compensation $20,000/$10,000; Nominating & Governance $12,000/$6,000; Finance $12,000/$6,000 .
- Independent director equity: annual RSU grant ~7,000 units ($136,710 grant-date FV) with 1-year vest contingent on ≥75% attendance; no performance-based equity for directors .
Governance Assessment
- Independence & potential conflicts: Szabados is non-independent and concurrently serves as a full-time Senior Advisor while sitting on the Board; he is excluded from director compensation during employment, but his RSUs automatically vest upon a change in control—creating potential misalignment around transaction incentives (RED FLAG: CoC acceleration while serving on Board) .
- Committee roles: None—mitigates direct influence over audit/compensation governance decisions; all committees comprised solely of independent directors (positive) .
- Attendance & engagement: Company reports high attendance (each director ≥75%; Board average 96%)—supports effective oversight .
- Pay-for-performance integrity: FY25 bonuses reduced via negative discretion to 80.9% despite above-threshold revenue/EPS—signals discipline; no tax gross-ups; robust clawback and anti-hedging/pledging policies (positive) .
- Ownership alignment: Modest personal stake (<1%); adherence to stock ownership guidelines is monitored; policy prohibits hedging/pledging (mixed: stake size modest; policy framework strong) .
Overall: Board committee independence and conservative pay governance offset the conflict risk of an inside director remaining employed while on the Board. Change-in-control RSU acceleration and advisory employment overlap should be monitored for transaction-related incentives and independence optics .