CJ Prober
NETGEARAbout CJ Prober
- Chief Executive Officer and director of NETGEAR since January 2024; age 53; education: Bachelor of Commerce (University of Manitoba) and Bachelor of Laws (McGill University). Also serves on the board of Life360, Inc.
- 2024 performance context disclosed in proxy: Value of initial $100 investment (Company TSR) at $114 in 2024 vs $59 in 2023; peer group TSR value $301 in 2024. GAAP Net Income of $12 million and Non-GAAP Operating Loss of $(42) million for 2024. Compensation Actually Paid to the PEO (CJ Prober) was $33.05 million in 2024 (driven largely by equity valuation changes).
- Board leadership remains separated: independent, non-executive Chairman (Thomas Waechter) through the 2025 annual meeting; Prober has no board committee roles. Separation enhances board independence and mitigates CEO/Chair concentration risk.
- Stockholder sentiment on pay: say-on-pay approval at ~71% in 2024 vs ~97% average support from 2011–2023; board attributes 2024 dip to CEO transition effects and commits to continued engagement.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Life360, Inc. | President | Jan 2022 – Jul 2023 | Led consumer software operations; joined via Life360’s acquisition of Tile; remains a director at Life360. |
| Tile, Inc. | Chief Executive Officer; Executive Chairman (prior) | CEO: Sep 2018 – Jan 2022; Exec Chair: Feb 2018 – Sep 2018 | Led software/consumer electronics business through acquisition by Life360. |
| GoPro, Inc. | Chief Operating Officer; SVP, Software & Services | COO: Jan 2017 – Feb 2018; SVP: Jun 2014 – Dec 2016 | Drove software/services and operations for consumer electronics. |
| Electronic Arts Inc. | Executive leadership roles | Prior to 2014 | Senior leadership in interactive software. |
| McKinsey & Company | Consultant | Earlier career | Strategy/operations advisory. |
| Wilson Sonsini Goodrich & Rosati | Corporate attorney | Earlier career | Corporate legal experience. |
External Roles
| Organization | Role | Committee Roles | Notes |
|---|---|---|---|
| Life360, Inc. | Director | — | Current public company directorship. |
Board Service at NETGEAR
- Director since 2024; no board committee assignments. Board comprised of a majority of independent directors; all committees (Audit, Compensation and Talent, Cybersecurity, Nominating and Corporate Governance) are fully independent; 11 board meetings in 2024; all directors attended ≥95% of board/committee meetings; board led by an independent Chairman (Waechter) through the 2025 meeting.
Fixed Compensation
| Component | Detail | Period/Effective Date |
|---|---|---|
| Base Salary | $750,000 | Effective Jan 31, 2024 (start of employment) |
| Target Bonus | 120% of base salary | 2024 target; CEO guaranteed no less than pro‑rated target for 2024 under offer letter |
| Actual 2024 Bonus Paid | $826,230 | 2024 Summary Compensation Table |
Performance Compensation
Annual Bonus (2024 design and payout mechanics)
| Item | Design / Outcome |
|---|---|
| Plan Structure | 2024 plan split into 1H and 2H performance periods due to CEO transition; 1H plan ultimately eliminated. |
| CEO 2024 Minimum | CEO eligible for 2024 payout no less than pro‑rated target under employment agreement. |
| 2H 2024 Payouts (Others) | Participating NEOs received 36%–49% of 2H target; (CEO’s Bonus booked under “Bonus” not NEIP). |
Long-Term Equity Grants and Vesting
| Award Type | Grant Date | Shares/Target | Grant Date Fair Value | Vesting / Performance | Notes |
|---|---|---|---|---|---|
| RSUs (annual + sign‑on) | Feb 27, 2024 | 455,820 | $6,791,718 | Vests over 4 years in equal annual installments (service-based). | Determined using trailing 20‑day avg price as of Jan 30, 2024. |
| PSUs (sign‑on; Relative TSR) | Feb 27, 2024 | Target 455,820 (0%–150% payout range) | $9,440,032 | Three annual tranches tied to Relative TSR vs Nasdaq Telecommunications Index, with cumulative 3‑year “true‑up.” First tranche (start date–Dec 31, 2024) certified at 150% (87th percentile) in Jan 2025. TSR calculated on 20‑day avg price method. | |
| CEO Equity Mix | 50% RSUs / 50% PSUs | — | — | Emphasis on performance-based pay for CEO. | — |
PSU Metric Calibration (CEO sign‑on)
| Performance Level | Relative TSR Rank vs Nasdaq Telecommunications Index | Earned PSUs |
|---|---|---|
| Maximum | ≥75th percentile | 150% |
| Target | 50th percentile | 100% |
| Threshold | 25th percentile | 50% |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (3/31/2025) | 165,897 shares; less than 1% of outstanding (28,781,771 shares). No equity awards exercisable within 60 days reported for CEO. |
| Ownership Guidelines (Officers) | CEO required to hold 6x base salary; 5 years to comply; as of 12/31/2024 all currently serving NEOs were in compliance or on track. |
| Hedging/Pledging | Prohibited for directors and employees, including NEOs. |
Employment Terms
| Term | Summary |
|---|---|
| Employment Agreement | Offer letter (Jan 2024) with $750,000 base; 120% target bonus; eligibility for equity; up to $25,000 legal fee reimbursement. |
| Initial Equity | RSUs: $4.0m (annual) + $2.5m (sign‑on); PSUs (sign‑on): $6.5m target value. |
| At‑Will Employment | Employment at‑will under applicable law. |
| Clawbacks | Legacy discretionary clawback for restatements; non‑discretionary Dodd‑Frank/Nasdaq clawback adopted Oct 2023. |
| Change‑in‑Control (CIC) Equity | Awards not auto‑vest; treatment determined by plan/admin; if not assumed, vest per plan. Performance awards deemed at 100% target if period not ended (with timing based on assumption and service/termination conditions). |
| Severance (Outside CIC) | CEO: lump sum equal to 12 months base salary plus target bonus; 12 months health continuation; equity acceleration for CEO: time‑based awards that would vest in 18 months; sign‑on PSUs vest if performance period ended and achieved. |
| Severance (During CIC Period) | CEO: 2x (12 months base + target bonus), 24 months health continuation; full acceleration of unvested equity with PSUs at greater of actual or 100% target (sign‑on PSUs based on actual). Double‑trigger; no excise tax gross‑ups (better‑of cutback). |
| Hypothetical Separation Values (12/31/2024 stock $27.87) | Death/Disability equity acceleration value: $31,759,258; Without Cause/Good Reason (outside CIC): $1,650,000 cash + $47,921 benefits + $12,703,676 equity = $14,401,596. |
Governance, Committees, and Director Pay (for context)
- Board/Committees: Audit (11 meetings), Compensation & Talent (5), Nominating & Corporate Governance (5), Cybersecurity (4) in 2024; all independent membership.
- Director Pay: Non-employee directors receive $50,000 annual cash retainer plus committee/leadership retainers; annual RSU grants (~$200,000), vesting at next annual meeting; director ownership guideline = 5x cash retainer ($250,000). (Employee directors like the CEO are not in the non‑employee director pay table.)
Compensation Structure Analysis
- Strong performance linkage and shift to relative TSR PSUs: CEO equity mix 50% PSUs, 50% RSUs; PSUs tied to Relative TSR with annual tranches and cumulative true‑up; method discourages short‑termism and aligns with stockholders but can introduce market factor sensitivity.
- 2024 short‑term incentives re‑aligned: 1H plan eliminated; 2H plan paid 36%–49% for participating NEOs; CEO guaranteed at least pro‑rated target for 2024 under offer letter (recruiting/transition rationale).
- Shift from options: 2024 grants emphasized RSUs/PSUs; no stock options awarded to CEO in 2024, aligning with broader market shift to RSU/PSU structures.
- Pay mix: Company highlights that ~79% of target total direct comp for 2024 NEOs (ex‑Lo) is variable (annual + long‑term).
Related Party Transactions and Policies
- No related party transactions disclosed for 2024.
- Related party transaction policy overseen by Audit Committee; code of ethics and whistleblower policy in place.
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay approval ~71% in 2024 (down from historical ~97% average since 2011); board cites unusual CEO transition circumstances; CTC will continue engagement and enhance transparency around severance decisions.
Expertise & Qualifications
- Over 20 years of technology executive and board experience across consumer software, services, and hardware; legal and consulting background; degrees in commerce and law.
Equity Ownership & Potential Selling Pressure
- Large 2024 sign‑on awards (RSUs and PSUs) with multi‑year vesting; first PSU tranche certified at 150% for 2024 period; future vesting events (annual RSU installments and 2025/2026 PSU tranches) could introduce episodic selling pressure absent 10b5‑1 plan disclosures. Hedging and pledging are prohibited; CEO subject to 6x salary ownership guideline.
Investment Implications
- Alignment and upside leverage: Heavy PSU weighting tied to Relative TSR plus 150% payout on the first tranche signal strong pay-for-performance alignment if relative execution continues; cumulative “true-up” magnifies long‑term incentive to outperform peers.
- Near‑term cash and recruiting optics: Guaranteed 2024 pro‑rated target bonus and sizable sign‑on equity were used to secure CEO recruitment during a transformation, partially explaining 2024 say‑on‑pay softness; investor relations risk remains until support normalizes.
- Retention and severance economics: Double‑trigger CIC with 2x cash and full equity acceleration (with PSUs at greater of actual/target for non‑sign‑on) provides retention in strategic scenarios but adds potential deal‑related dilution; absence of tax gross‑ups is shareholder‑friendly.
- Governance mitigants: Independent, non‑executive chair structure, robust clawbacks (legacy and Dodd‑Frank), and strict anti‑hedging/pledging policies reduce governance and alignment risks.
- Execution watch‑items: 2024 TSR lagged peer index value ($114 vs $301) and Non‑GAAP operating loss indicates ongoing turnaround; board states revenue/margin beats vs guidance and business improvements under new strategy—continuation of operational outperformance vs guidance and relative TSR will be key to justify PSU realizations and rebuild say‑on‑pay support.