Massimo Calafiore

About Massimo Calafiore

Orthofix President & Chief Executive Officer and Director; age 53; appointed January 8, 2024. Prior roles include CEO of LimaCorporate and senior commercial and product leadership at NuVasive; education: M.Sc. Mechanical Engineering (University of Catania) and MBA (NYU) . In 2024, Orthofix delivered net sales of $799.5M (+7.1% YoY) and non-GAAP adjusted EBITDA of $67.4M while GAAP net income was $(126.0)M ; the company’s multi-year TSR value (from the Pay vs Performance disclosure) was $37.81 for a $100 initial investment vs $150.42 for the peer group in 2024, indicating underperformance over that horizon .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

• Annual incentive (cash): Target bonus 110% of salary; 2024 payout $926,558 (weighted achievement 102.1%) .
• 2024 performance metrics and weighting (CEO): company-wide Net Sales 30%; Adjusted EBITDA 30%; Adjusted Free Cash Flow 25%; New Product Introductions 10%; Enterprise CR (community service) 5% .

• Long-term incentives (design for 2024 annual grant, excluding inducements): PSUs 50% (3-year relative TSR vs S&P Healthcare Equipment Select Industry Index), RSUs 25% (time-based, 3 annual tranches), Stock Options 25% (7-year term; service vesting plus price-appreciation) .
• PSU performance curve (3-year): <25th pct = 0%; 25th = 50%; 50th = 100%; 75th = 200%; capped at 100% if absolute TSR is negative .
• Performance stock options: vest on later of service schedule (1/3 at 1-year, then quarterly) and a stock-price hurdle: 30-day average ≥150% of grant price .

2024 equity awards to Calafiore (hire/annual):

Equity Ownership & Alignment

• Beneficial ownership (as of Apr 21, 2025): 30,094 shares directly; less than 1% of outstanding .
• Stock ownership guidelines: CEO 5x base salary; 5-year phase-in; company states all executives/directors are in compliance subject to phase-in timing .
• Hedging/pledging: prohibited for directors, executive officers, and insiders; no margin accounts or pledges permitted .

Outstanding equity at Dec 31, 2024:

Vesting cadence and potential selling pressure:

• RSUs: one-third on 1/8/2025, 1/8/2026, 1/8/2027 (staged delivery) .
• PSUs: cliff vesting on 1/7/2027 subject to relative TSR (0–200%, with 100% cap if absolute TSR negative) .
• Options: service tranches begin 1/8/2025, but exercisability also requires sustained 150% price hurdle of grant price; mitigates near-term selling pressure vs pure time-based vesting .

Employment Terms

• Start date: January 8, 2024 .
• Employment agreements: company discloses no employment agreements with executive officers (unless required by law) .
• Change-in-control (CIC) and severance agreement: CEO receives 1.5x (salary + target bonus) cash severance if terminated without cause or for good reason; 2.0x if during CIC window; pro-rata current-year bonus at 100%; 18 months COBRA reimbursement (CEO); time-based RSUs/options partially accelerate (full on death/disability or during CIC); PSUs treated at target or performance-to-date and may convert to time-based in CIC .
• Estimated payout values (12/31/2024 stock price $17.46):
  • Without cause/Good reason: Cash $2,598,750; equity $5,784,338; welfare $43,652; outplacement $18,750; total $8,445,490 .
  • CIC + qualifying termination: Cash $3,465,000; equity $13,688,549; welfare $43,652; outplacement $25,000; total $17,222,201 .
• Clawback: mandatory recoupment of excess incentive comp for 3 years prior to an accounting restatement (per Dodd-Frank and listing standards) .
• Covenants: agreements incorporate confidentiality, IP assignment, non-compete, and non-solicitation provisions; severance conditioned on release of claims .

Board Governance

• Director since 2024; not independent due to CEO role .
• Board leadership: independent Chair (Michael Finegan); CEO and Chair roles are separated .
• Committees: Calafiore is not shown as serving on standing committees; membership comprises independent directors .
• Meetings/attendance: Board met 10 times in 2024; all directors attended ≥75% of their meetings; average attendance 98% .
• Executive sessions: independent directors met in executive session at every regularly scheduled quarterly Board meeting in 2024 .
• Director compensation: employee directors receive no additional pay for Board service .

Director Compensation (Employee Director)

Compensation Peer Group (for benchmarking)

Accuray; Alphatec; AngioDynamics; Artivion; AtriCure; Avanos; Bioventus; CONMED; Enovis; Globus Medical; Haemonetics; Integer; Integra LifeSciences; LivaNova; Merit Medical; Nevro; NuVasive (merged with Globus in Sep 2023); ZimVie .

Say-on-Pay & Shareholder Feedback

• 2024 say-on-pay support: ~97% of votes cast in favor; at least 90% approval at each of the last nine annual meetings .

Performance & Track Record (under Calafiore’s tenure)

• 2024 results: net sales $799.5M (+7.1%); non-GAAP adjusted EBITDA $67.4M; GAAP net loss $(126.0)M .
• 1Q25: pro forma adjusted EBITDA margin expanded ~200 bps YoY; pro forma net sales +4.3% constant currency; guidance reaffirmed for adjusted EBITDA and positive FCF; strategy focused on channel optimization and profitable growth .
• 3Q25: seventh consecutive quarter of adjusted EBITDA margin expansion; positive FCF; commentary highlighting 7D FLASH navigation, distributor transitions, and U.S. Orthopedics launch traction .

Compensation Structure Analysis

• High at-risk mix: 92% of CEO’s annual total target direct compensation is performance-based/variable (salary, AIP, LTI mix) .
• Metrics balance growth and cash discipline: AIP uses Net Sales, Adjusted EBITDA, Adjusted FCF, innovation (NPI count), and CR objectives; 2024 payout 102.1% indicates balanced over/underperformance across metrics (FCF strong; sales/EBITDA slightly below target) .
• Strong performance conditioning on LTI: 50% PSUs with relative TSR and 25% perf options with a 150% price hurdle—together 75% performance-oriented; limits windfalls if stock declines (PSUs capped at 100% when absolute TSR negative) .
• Governance safeguards: no employment agreements; double-trigger CIC; no excise tax gross-ups; robust clawback; hedging/pledging prohibited .

Investment Implications

• Alignment: The AIP and LTI designs are meaningfully performance-levered (relative TSR PSUs; price-hurdled options; FCF in AIP), which ties pay to durable value creation and limits windfalls—positive for pay-performance alignment .
• Retention and supply overhang: Near-term equity delivery is staged (RSUs in 2025–2027); PSUs cliff in 2027; options require a sustained 150% price hurdle, tempering near-term selling pressure while providing longer-term retention hooks .
• Downside/CIC protection: CEO severance of 1.5x (2.0x in CIC) plus equity acceleration and COBRA is market-consistent; sizable CIC equity value underscores the company’s retention stance during strategic events; double-trigger mitigates shareholder dilution concerns .
• Governance quality: Separate Chair/CEO, high attendance, independent committees, strong say-on-pay support (97%), and no hedging/pledging are supportive of risk oversight and shareholder alignment .
• Execution watch items: While 2024 GAAP profitability was negative, management is driving adjusted EBITDA margin expansion and positive FCF, with commentary aligning incentives to profitable growth—investors should monitor sustained FCF conversion and TSR vs peer set into the 2027 PSU vest window .