Sally Washlow
ORION ENERGY SYSTEMSAbout Sally Washlow
Sally A. Washlow (age 54) is CEO of Orion Energy Systems, Inc. (OESX) since April 14, 2025 and has served on the Board since August 2022; she previously chaired the Compensation Committee before becoming CEO . Her background includes CEO of Cedar Electronics (led the Cobra/Escort integration), President at Cobra Electronics, and senior roles advising executives at LHH’s International Center for Executive Options and running SW Consulting LLC . Under her early tenure, Orion reduced operating expenses by over $4M in FY’25, identified another $1.5M annual savings for FY’26, improved gross margin by 230 bps to 25.4%, and reorganized into Solutions and Partners business units; management outlined $100–$200M LED pipeline opportunities over five years and set an FY’26 revenue outlook of ~5% growth to ~$84M with intent to reach breakeven or positive adjusted EBITDA .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cedar Electronics (Nasdaq: COBR, formerly public) | Chief Executive Officer | 2015–2017 | Led integration of Cobra and Escort electronics, driving product/brand consolidation |
| Cobra Electronics Corporation | President (and various roles over 13 years) | 2013–2015 | Consumer electronics leadership; go-to-market strategy and operations |
| LHH (Lee Hecht Harrison) – ICEO | Practice Leader | Not disclosed | Advised C-suite executives (Fortune 10 to private) on transitions and strategy |
| SW Consulting LLC | Principal/Operator | 2017–Apr 2025 | Executive management support, strategy initiatives, board advisory to private and public companies |
External Roles
| Organization | Role | Years | Committee Roles / Notes |
|---|---|---|---|
| Data I/O Corporation (Nasdaq: DAIO) | Director | Since 2020 | Serves as Chair and member of Compensation and Corporate Governance & Nominating committees |
| Costar Technologies (OTC: CSTI) | Director | 2019–2023 | Video surveillance products company |
| Matot Industries | Advisory Board | 2020–2025 | Industrial products manufacturer |
| Consumer Technology Association | Member | Not disclosed | Industry engagement |
Fixed Compensation
| Component | Amount / Terms | Notes |
|---|---|---|
| CEO Base Salary | $382,500; reset to $425,000 if NEOs’ base salaries return to pre-reduction levels | Per Executive Employment & Severance Agreement dated Apr 14, 2025 |
| Target Annual Bonus | 100% of base (threshold 80%, max 200%) | Based on annual incentive plan performance |
| Special Stretch Bonus (FY’26) | $100,000 | Payable if FY’26 revenue reaches $100M |
| Cash Signing Bonus | $500,000 (approx. $300,000 required to directly purchase OESX shares); deferred up to one year (reviewed quarterly) | Deferred by mutual agreement on May 29, 2025 |
| Perquisites | Life insurance ($1M face), health/prescription reimbursement, COBRA reimbursement, LTD insurance, $1,000/month auto allowance + mileage, tax prep, annual executive physical, travel/lodging/meal reimbursement, legal fee reimbursement | As specified in Employment Agreement |
| Director Compensation (FY’25, pre-CEO) | Cash fees $63,375; Stock awards $30,000; All other compensation $20,000; Total $113,375 | Served as non-employee director through Apr 14, 2025 |
Performance Compensation
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Adjusted EBITDA (post-bonus) – FY’26 | 50% | Board-approved; numeric levels not disclosed | Not disclosed | Not disclosed | Annual FY’26 incentive program |
| Revenue with positive adjusted EBITDA – FY’26 | 50% | Board-approved; numeric levels not disclosed | Not disclosed | Not disclosed | Annual FY’26 incentive program |
| Stretch revenue (FY’26) | — | $100M | Not disclosed | $100,000 if achieved | Annual bonus add-on |
Equity awards (FY’26):
| Award Type | Shares | Vesting | Strike / Price Hurdles | Expiration / Terms |
|---|---|---|---|---|
| Restricted Stock | 200,000 | Pro rata annually over 3 years | — | FY’26 grants under 2016 Plan |
| Stock Options (Time-based) | 250,000 | Pro rata over 3 years from grant date (15th trading day after FY’25 results announcement) | Exercise price = average closing price over 10 trading days prior to grant | Expires 10 years; 1 year on death/disability; 90 days other terminations; subject to shareholder approval |
| Stock Options (Stock-price performance) | 250,000 | Performance tranches: one-third at $3.00; one-third at $4.00; one-third at $5.00 (5-day average) | Price hurdles as stated | Same expiration/approval conditions as above |
Program design context:
- FY’25 annual bonus structure (for NEOs) weighted Adjusted EBITDA 50%, Revenue 30%, EV/OMS revenue 20% with thresholds/targets/max; FY’25 bonuses were not paid due to not meeting thresholds .
- Committee emphasized pay-for-performance with ~67–75% of NEO compensation at risk in FY’25 and similar mix planned for FY’26 .
Equity Ownership & Alignment
| Item | Value | Status / Notes |
|---|---|---|
| Beneficial Ownership (as of Record Date: Jun 10, 2025) | 23,328 shares; includes 1,000 shares held by spouse; <1% of outstanding | Footnote indicates 9,174 restricted shares vesting within 60 days |
| Executive Stock Ownership Guideline | 112,154 shares required | Executives have up to 5 years from appointment/promotion to comply; Sally has time remaining |
| Director Ownership Guideline (while independent) | 25,000 shares required | Directors may count restricted shares; Sally held 48,071 restricted shares as of Mar 31, 2025; ceased to be independent on Apr 14, 2025 |
| Hedging / Pledging Policy | Strict prohibition on hedging, derivatives, and pledging by officers/directors | Policy details summarized in proxy |
| Unvested Equity (hypothetical CoC scenario at Mar 31, 2025) | 40,427 unvested RS/PS; $29,107 cash-out value; $13,333 restricted cash value | Illustrative acceleration values shown in proxy |
Employment Terms
| Term | Detail |
|---|---|
| Role & Start | CEO effective April 14, 2025; previously Director since August 2022 |
| Contract | Executive Employment & Severance Agreement (Apr 14, 2025) |
| Severance (No Change-in-Control) | 1.5x Salary + average bonus; pro-rata bonus for year of termination; COBRA at active rate; vesting acceleration of equity that would vest within 2 years; release required; non-compete/confidentiality applies |
| Severance (Post Change-in-Control) | 2.0x Salary + average bonus; double-trigger; no excise tax gross-up; 280G cutback/“valley” provision; guarantees of at least prior-year target bonus opportunity and comparable benefits |
| Equity Acceleration (CoC) | Unvested RS/PS vest automatically at target level under 2016 Plan; options may be accelerated/cashed out at committee discretion |
| Clawback | Nasdaq-compliant “no-fault” clawback covering Big R and little r restatements; narrow exceptions; no indemnification |
Board Governance
- Board service: Director since August 2022; CEO since April 2025; no longer independent after appointment; previously Compensation Committee Chair prior to becoming CEO .
- Committees: Standing committees are Audit & Finance (Chair: Richstone), Compensation (Chair: Wishart-Smith), Nominating & Corporate Governance (Chair: Otten); all committee members are independent directors .
- Board leadership: Roles of CEO and Board Chair are separated; Otten is independent Board Chair; structure chosen to allow CEO focus and leverage chair’s stewardship .
- Board activity: Met 18 times in FY’25; all directors met at least 75% attendance requirements; independence determinations disclosed .
Director Compensation (FY’25)
| Component | Amount |
|---|---|
| Fees earned and paid in cash | $63,375 |
| Stock awards (grant date fair value) | $30,000 |
| All other compensation (restricted cash) | $20,000 |
| Total | $113,375 |
| Restricted shares held (as of Mar 31, 2025) | 48,071 |
| Independent status change | Became CEO Apr 14, 2025; no longer independent |
Performance & Track Record
- FY’25 performance: Total revenue $79.7M vs $90.6M prior year; gross profit percentage improved to 25.4% from 23.1%; operating expenses declined to $30.8M from $31.7M; net loss $(11.8M), $(0.36)/share; working capital $8.7M at year-end .
- Strategic actions: Company-wide operating expense reduction >$4M in FY’25 with additional $1.5M targeted for FY’26; reorganization into Solutions and Partners business units to unify offering and improve efficiency; expanded LED pipeline with $100–$200M opportunities over five years .
- Outlook: FY’26 revenue outlook of ~5% growth to $84M; intent to deliver breakeven or positive adjusted EBITDA for FY’26 .
Compensation Committee Analysis
- Committee composition: Wishart-Smith (Chair), Richstone, Otten, Shapiro; all independent .
- Consultant usage: No external compensation consultant used for FY’25 or FY’26 to contain costs; internal benchmarking to LSI Industries and Acuity Inc. peer practices; periodic reconsideration if circumstances change .
- Say-on-Pay: 93% approval at 2024 annual meeting; considered in FY’25–FY’26 decisions .
- Risk assessment: Tiered bonus design (threshold/target/max), caps (CEO 200%/others 150%), stock price performance option hurdles ($3/$4/$5), ownership guidelines, anti-hedging/pledging and clawback policies used to mitigate compensation-related risk .
Equity Plan / Shareholder Actions
- FY’26 CEO special stock option grant of 500,000 shares is subject to shareholder approval; half time-vested, half price-hurdle vested; grant timing tied to the 15th trading day after FY’25 results .
- Reverse stock split proposal (1-for-2 to 1-for-100) to address Nasdaq minimum bid price deficiency; additional 180-day compliance period granted to September 15, 2025; Board cites benefits/risks and maintains discretion not to effect split if not in shareholders’ best interests .
Investment Implications
- Alignment: CEO option hurdles at $3/$4/$5 and 3-year vesting create tangible alignment with shareholder value creation; clawback and strict anti-hedging/pledging further strengthen governance signals .
- Ownership: Executive ownership guideline (112,154 shares) vs current beneficial ownership (23,328) indicates a measured path to required “skin-in-the-game” over five years; watch for open-market purchases when signing bonus timing is later finalized .
- Vesting/Supply: Near-term vesting of 9,174 restricted shares within 60 days of Record Date is small; broader multi-year RS and option vesting cadence may modestly influence insider selling pressure around annual vest dates, subject to trading windows and policies .
- Governance/Dual-role: Separation of CEO and independent Chair mitigates concentration risk; prior role as Compensation Chair moved to independent director before CEO appointment, reducing independence concerns in pay-setting .
- Event-driven: Shareholder vote on CEO option grant and potential reverse stock split are catalysts; positive execution on FY’26 adjusted EBITDA/breakeven and pipeline conversion are key trading levers .