John Brottem
About John Brottem
John L. Brottem is General Counsel and Secretary of Outset Medical (OM), serving since May 2020. He holds a B.A. from Occidental College and a J.D. from UC Davis School of Law, and previously held senior legal roles at Omnicell, Brocade, Foundry Networks, and Cooley LLP . Age: 51 . Tenure: ~5.5 years (as of Nov-2025) . Company performance context: Revenues fell from $130.4M (2023) to $113.7M (2024) , Net Income remained negative (2024: $(127.98)M*) and EBITDA (2024: $(102.09)M*)—while GAAP gross margin improved to 33.9% in 2024 . TSR (per Pay vs Performance table) was 2.41 in 2024, 11.74 in 2023, 56.02 in 2022 .
Note: * Values retrieved from S&P Global.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Omnicell, Inc. | VP Legal & Deputy General Counsel; earlier Associate GC | 2011–2020 | Led legal operations for medication management technologies; scaled compliance for healthcare clients |
| Brocade Communications | Corporate Counsel | 2009–2011 | Supported networking solutions transactions and IP |
| Foundry Networks | Corporate Counsel | 2008–2009 | Handled corporate and commercial matters pre-acquisition |
| Cooley LLP | Associate (Corporate) | 2001–2008 | Advised tech clients on financings, M&A, and governance |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Occidental College; UC Davis School of Law | Alumni | — | Foundational legal training supporting complex regulated environments |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $415,208 | $415,800 |
| All Other Compensation ($) | $7,117 | $7,397 |
| Total ($) | $1,744,514 | $1,510,518 |
Notes:
- No guaranteed salary increases in 2024 due to cost-reduction initiatives; base salary flat vs 2023 .
- 401(k) match: 100% up to 2% of eligible compensation .
Performance Compensation
Annual cash bonus framework and outcomes.
| Metric | Weighting | Threshold (50%) | Target (100%) | Max (200%) | Actual Achievement | Payout | Weighted Payout |
|---|---|---|---|---|---|---|---|
| Revenue (2024) | 40% | $132.6M | $156.0M | $165.3M | $113.7M (Below threshold) | 0.0% | 0.0% |
| Gross Margin (non-GAAP 2024) | 20% | 27.2% | 32.0% | 33.9% | 35.6% (Above max) | 200% | 40.0% |
| Operating Income (non-GAAP 2024) | 20% | $(103.2)M | $(89.7)M | $(84.3)M | $(78.8)M (Above max) | 200% | 40.0% |
| Home Patients (YE 2024) | 20% | 85% of target | Target | 108.4% of target | Above max | 200% | 40.0% |
| Total Payout | — | — | — | — | — | — | 120.0% |
Bonus dollars:
| Metric | 2023 | 2024 |
|---|---|---|
| Target Bonus % | 50% | 50% |
| Actual Bonus ($) | $124,770 (60.1% payout) | $249,480 (120.0% payout) |
Equity awards structure and vesting:
- RSUs: 3-year vest; 1/3 at first anniversary, then quarterly over the next 2 years .
- PSUs: Home PSUs (operational metric) measured end-2026; 100% vests after certification; TSR PSUs over 3-year period with relative TSR; threshold adjusted in 2024 (≤25th percentile earns 0%; 25th percentile earns 50%) .
- Special retention PRSUs (Jan-2024): performance tied to stock price VWAP thresholds and non-GAAP operating income; later one-time late-2024 PSUs were forfeited as conditions not met by Dec 30, 2024 .
2024 award sizing (reverse split-adjusted):
| Award Type | Counts (John Brottem) |
|---|---|
| RSUs (Annual) | 6,400 |
| Home PSUs (Target) | 1,120 |
| TSR PSUs (Target) | 480 |
| PRSUs (Target) | 6,664 |
Equity Ownership & Alignment
Ownership and guidelines:
- Beneficial ownership: 6,030 shares (<1%); comprised of 3,506 shares held and 2,524 options exercisable within 60 days (post split) .
- Executive stock ownership guideline: 1x annual base salary; 5-year accumulation (effective Feb 2, 2023). All covered executives are within accumulation period and thus in compliance .
- Anti-hedging/anti-pledging: Executives prohibited from hedging or pledging company stock .
Vesting and outstanding awards (12/31/2024):
| Category | Detail |
|---|---|
| Options | 1,387 exercisable; 93 unexercisable; strike $750.15; 25% cliff then monthly vest (3/15/2021 grant) |
| RSUs | 861 (2023 grant); 6,400 (2024 grant); applicable vesting schedules as above |
| PSUs | 605 (2023 Home PSUs earned; 50% vested Jan-2025; 50% vests end-2025); 240 (2024 TSR PSUs target shown separately) |
Insider selling pressure:
- Recent Form 4 data could not be retrieved due to data access authorization; analysis relies on proxy-reported beneficial ownership and vesting schedules .
Employment Terms
Change-in-control (CIC) & severance:
- Non-CIC: 9 months base salary + 9 months COBRA (CEO: 12/12 months) .
- CIC: 12 months base salary (CEO: 18 months) + 12 months COBRA (CEO: 18) + 100% of target bonus + accelerated vesting of 100% of unvested equity (PSUs at target unless award terms specify otherwise) .
Estimated payments (as of 12/29/2023):
| Scenario | Base Salary ($) | Target Bonus ($) | COBRA ($) | Equity Acceleration ($) | Total ($) |
|---|---|---|---|---|---|
| Non-CIC | 311,850 | — | 32,521 | — | 344,371 |
| CIC | 415,800 | 207,900 | 43,361 | 354,339 | 1,021,400 |
Other terms:
- Clawback policy (Dodd-Frank §954 compliant) for incentive comp upon restatement .
- Indemnification agreements and D&O insurance in place .
Performance & Track Record
Company highlights under current executive team:
- Installed base: ~6,000 consoles (+10% in 2024) .
- Recurring revenue (consumables/services): $83.9M in 2024 (+21% YoY) .
- GAAP gross margin: 33.9% (non-GAAP 35.6%), up from 22.2% (23.6% non-GAAP) in 2023 .
- Operating expense reductions: ~$80M annual run-rate; 2025 cash burn projection cut by 50% .
- Balance sheet actions: $172.2M financing in Jan-2025; debt reduced from $200M to $100M .
- FDA compliance progress: 2024 follow-up inspection with no Form 483; 2023 warning letter issues resolved by Feb-2025 .
Revenue and profitability context:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | $115.375M | $130.376M | $113.689M |
| Net Income ($) | $(162.956)M* | $(172.797)M* | $(127.976)M* |
| EBITDA ($) | $(155.850)M* | $(161.428)M* | $(102.092)M* |
Note: * Values retrieved from S&P Global.
TSR (Outset Pay vs Performance):
| Year | TSR (Value of $100) |
|---|---|
| 2022 | 56.02 |
| 2023 | 11.74 |
| 2024 | 2.41 |
Board Governance and Say-on-Pay
- 2024 say-on-pay approval: ~50.4% (down from ~93% in 2023), prompting stockholder outreach and changes to PSU design (longer measurement periods; stricter TSR thresholds) .
- Compensation peer group updated in 2024 (AtriCure, Axonics, CareDx, Glaukos, Inari, PROCEPT BioRobotics, etc.) .
- Committees: Compensation (Chair Dale Jones), Audit (Chair Patrick Hackett), NCG (Chair Karen Drexler) .
Related Party Transactions
- Jan–Mar 2025 private placement in which directors and management participated; John Brottem not listed among participants; largest investor FMR LLC .
Risk Indicators & Red Flags
- 2023 FDA Warning Letter resolved; TabloCart prefilt clearance in May 2024; inspections closed with no further action (Sept-2024) .
- 2024 PSU forfeiture due to unmet late-2024 conditions (shows discipline in performance awards) .
- Low 2024 say-on-pay support indicates investor scrutiny of pay-performance alignment .
- Anti-pledging and clawback policies mitigate alignment risks .
Equity Ownership & Alignment (Detail Table)
| Aspect | Status |
|---|---|
| Beneficial ownership | 6,030 shares; <1% |
| Vested vs unvested | Vested options (exercisable within 60 days): 2,524; Unvested RSUs: 6,400 (2024 grant), 861 (2023 grant); Earned Home PSUs: 605 (50% vested Jan-2025; 50% end-2025) |
| Pledging/Hedging | Prohibited |
| Ownership guideline | 1x salary; within 5-year accumulation period; in compliance |
Investment Implications
- Pay-for-performance tightening: 2025 bonus framework reduced to two goals (Revenue and non-GAAP operating income, each 50%) and stricter PSU design should better align payouts with shareholder value creation .
- Retention risk moderate: CIC terms provide 12 months salary + target bonus and full acceleration, supporting continuity; 2024 PRSUs/PSU forfeiture evidences discipline, but smaller personal ownership (<1%) may limit direct alignment magnitude .
- Selling pressure: Without recent Form 4 data, near-term sale risk cannot be quantified; outstanding earned PSUs vesting through end-2025 suggests scheduled share releases that could add supply .
- Governance signal: 2024 low say-on-pay and FDA compliance remediation history warrant monitoring of subsequent program changes and execution against profitability and growth targets .
References:
- Executive biography, age, tenure: **[1484612_0000950170-25-030045_om-20241231.htm:39]** **[1484612_0000950170-25-030045_om-20241231.htm:40]**
- Compensation tables and bonus outcomes: **[1484612_0000950170-24-043692_om-20240410.htm:55]** **[1484612_0000950170-24-043692_om-20240410.htm:49]** **[1484612_0000950170-25-053260_om-20250411.htm:67]** **[1484612_0000950170-25-053260_om-20250411.htm:58]** **[1484612_0000950170-25-053260_om-20250411.htm:55]** **[1484612_0000950170-25-053260_om-20250411.htm:56]**
- Equity awards and vesting: **[1484612_0000950170-25-053260_om-20250411.htm:69]** **[1484612_0000950170-25-053260_om-20250411.htm:65]**
- Ownership guidelines & anti-pledging: **[1484612_0000950170-25-053260_om-20250411.htm:34]** **[1484612_0000950170-24-043692_om-20240410.htm:31]**
- Beneficial ownership: **[1484612_0000950170-25-053260_om-20250411.htm:103]** **[1484612_0000950170-25-053260_om-20250411.htm:104]**
- Company performance and highlights: **[1484612_0000950170-25-053260_om-20250411.htm:40]** **[1484612_0000950170-24-043692_om-20240410.htm:83]**
- Revenue and net income (S&P Global) and revenues citations: **[1484612_0000950170-23-002648_om-20221231.htm:133]** **[1484612_0000950170-24-018093_om-20231231.htm:137]** **[1484612_0000950170-25-030045_om-20241231.htm:140]**
- Pay vs Performance TSR: **[1484612_0000950170-25-053260_om-20250411.htm:74]**
- CIC terms and estimates: **[1484612_0000950170-24-043692_om-20240410.htm:63]** **[1484612_0000950170-24-043692_om-20240410.htm:65]**
- Say-on-pay and peer group: **[1484612_0000950170-25-053260_om-20250411.htm:32]** **[1484612_0000950170-24-043692_om-20240410.htm:40]** **[1484612_0000950170-25-053260_om-20250411.htm:54]**
- FDA compliance: **[1484612_0000950170-25-030045_om-20241231.htm:23]**
- Related party transactions: **[1484612_0000950170-25-053260_om-20250411.htm:35]**