Randall Lipps
OMNICELLAbout Randall Lipps
Randall A. Lipps, age 67, is Founder, Chairman of the Board (since 1992), and President & CEO (since October 2002) of Omnicell (OMCL). He holds a B.S. in economics and a B.B.A. from Southern Methodist University . Omnicell measures CEO pay-for-performance against revenue, SaaS/Expert Services revenue, non-GAAP EBITDA, and relative TSR; in 2024, non-GAAP EBITDA was used in incentives and the Company’s 2024 TSR placed ~80th percentile versus the S&P 1000 Healthcare Index, earning ~176% of PSUs at target . Pay-versus-performance disclosure shows 2024 net income of $12.5M and non-GAAP EBITDA of $135.8M, with CEO compensation actually paid tracking stock performance over time .
OMCL historical fundamentals:
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Revenues ($USD) | $892.2M* | $1,132.0M* | $1,295.9M* | $1,147.1M* | $1,112.2M* |
| EBITDA ($USD) | $90.0M* | $145.1M* | $87.8M* | $49.3M* | $62.8M* |
*Values retrieved from S&P Global.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Omnicell, Inc. | Founder, Director | 1992–present | Built the company and led strategy and product innovation across automation, software and services . |
| Omnicell, Inc. | President & CEO | Oct 2002–present | Nearly two decades+ of execution; board highlights his extensive industry and company knowledge . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Invuity, Inc. | Director | 2013–2018 | Medical device board experience . |
| American Nurses Foundation | Board of Trustees | Ongoing | Engagement with nursing and care delivery stakeholders . |
Fixed Compensation
| Component | 2024 Detail |
|---|---|
| Base Salary | $822,482 paid; 2024 annualized base salary set at $833,428 . |
| Target Bonus % | 125% of base (target $1,041,784), consistent with CEO employment agreement minimums . |
| Actual Bonus Paid (2024) | $1,289,241 under the Executive Bonus Plan . |
| Perquisites | Annual allowance and event-related expenses; 2024 total $53,642, including limited tax gross-up for event-related expenses (~$2,627) . |
Summary Compensation (CEO):
- 2024 total: $8,174,639 (salary $822,482; stock awards $6,009,274; non-equity incentive $1,289,241; other $53,642) .
- At-risk pay: ~89% of CEO target pay at-risk/variable in 2024 .
Performance Compensation
Annual Cash Bonus Design (2024):
- Weighting: Non-GAAP EBITDA 40%; Total Revenue 40%; SaaS & Expert Services Revenue 20% .
- Quarterly structure: Q1–Q3 capped at 20% each of annual target; Q4 pays remainder, adjusted by Executive Goals (typically four goals at 25% weight each) .
| Metric | Weight | Target vs Actual (FY 2024) | Payout Impact |
|---|---|---|---|
| Non-GAAP EBITDA | 40% | Target $127.0M vs Actual $135.8M | 106.9% achievement contributed to ~125% annual bonus funding . |
| Total Revenue | 40% | Target $1,136.0M vs Actual $1,112.2M | 97.9% achievement . |
| SaaS & Expert Services Revenue | 20% | Target $232.5M vs Actual $243.5M | 104.7% achievement . |
Quarterly bonus realization (CEO):
- Q1: 100% ($218,992); Q2: 100% ($187,638); Q3: 100% ($223,603); Q4: 166% ($659,008). Total earned: $1,289,241 (125% of $1,028,103 incentive target) .
Long-term Equity (granted Feb 27, 2024):
- RSUs: 107,251 units (time-based) .
- PSUs: 107,251 target units; earned ~176% (188,794 units) based on ~80th percentile TSR vs S&P 1000 Healthcare; vesting: 25% on certification (Mar 8, 2025), remainder in equal quarterly tranches over three years (May 15/Aug 15/Nov 15/Feb 15) .
PSU framework:
- Below 35th percentile TSR: 0%; 35th–<50th: 50–99%; 50th–<90th: 100–199%; ≥90th: 200% .
Equity Ownership & Alignment
| Category | Detail |
|---|---|
| Beneficial Ownership | 936,019 shares (1.98% of outstanding) as of Mar 15, 2025 . |
| Breakdown | Direct 82,250; The Lipps Revocable Trust 355,861 (pledged as collateral for personal line of credit); children’s trusts 8,051; options exercisable within 60 days 489,857 . |
| Unvested Awards (12/31/24) | RSUs: 107,251; PSUs: 214,502 maximum unearned shares reported for table purposes; earned PSUs ~188,794 with continued service vesting over three years . |
| Vesting cadence | RSUs: 25% at ~1-year then equal quarterly over 3 years; PSUs: 25% at certification then equal quarterly over 3 years . |
| 2024 Stock Vested | 41,923 shares vested; $1,680,286 realized value; no option exercises in 2024 . |
| Ownership Guidelines | CEO required ≥6x annual base salary; NEOs complied or within phase-in as of May 2024 . |
| Hedging/Pledging | Hedging and short sales prohibited; shares pledged by trust (governance red flag due to collateral risk) . |
Employment Terms
CEO Employment Agreement (entered Mar 4, 2025; term through Dec 31, 2027):
- Compensation minimums: base ≥$833,000; annual target bonus ≥125% of base; annual LTI grant date fair value ≥$6,375,000 .
- Severance (prior to 2027 annual equity grant):
- 3x base + target bonus; pro rata target bonus for year of termination; 18 months COBRA; accelerated vesting of then-unvested awards granted during agreement term (PSUs earned based on actual performance post period); up to 1 year outplacement; subject to release and non-compete/non-solicit/non-recruit covenants .
- Severance (after 2027 annual equity grant):
- 1.5x base + target bonus; pro rata target bonus; 18 months COBRA; accelerated vesting of awards granted during agreement term; up to 1 year outplacement; subject to covenants .
- Change-in-Control (six months pre- to 24 months post-CIC):
- Greater of above or 2x base + target bonus; pro rata target bonus; equity acceleration (PSUs earned at greater of target or performance to date); 24x initial monthly COBRA premium; up to $15,000 legal fees; up to 1 year outplacement; subject to covenants .
- Retirement/End-of-term provisions:
- Continued vesting of time-based RSUs and earned PSUs if termination is ≥9 months after grant; PSUs vest based on actual performance .
- Interaction with other plans: CEO agreement benefits are in lieu of Executive Severance Plan/change-in-control letters .
Executive Severance Plan (company-wide EVPs+):
- No CIC: lump sum 1.0x base + target bonus (1.5x for CEO); COBRA (12 months; 18 months for CEO); prorated quarter bonus; up to 1 year outplacement .
- CIC double-trigger: lump sum 1.5x base + target bonus (2.0x for CEO); COBRA cash equivalent (18x monthly; 24x for CEO); quarter target bonus; up to 1 year outplacement; up to $15,000 legal fee reimbursement; restrictive covenants apply .
- Excise tax: “cut-back” to avoid golden parachute excise taxes if beneficial .
Equity Plan & CIC mechanics:
- If awards are not assumed in a corporate transaction, they accelerate in full; performance awards deemed earned at 100% target .
Board Governance
- Roles: Combined CEO & Chairman; Lead Independent Director (Joanne B. Bauer) appointed to balance governance (agenda setting, independent sessions, crisis leadership) .
- Independence: All directors independent except Mr. Lipps (employee-director) .
- Board service: Director since 1992; Class II; current term expires 2027; no committee memberships .
- Meetings: Board met 5 times in 2024; all directors attended ≥75% of Board and committee meetings .
- Director compensation: CEO does not receive director fees/equity grants for board service .
Director & Shareholder Engagement
- Say‑on‑Pay: 93.0% approval in 2024; five‑year average 93.9% .
- Compensation consultant: Exequity LLP engaged; peer group refined annually; pay levels targeted ~50th–75th percentile vs peers .
Compensation benchmarking peer group (2024 selection includes, among others): ACI Worldwide, Agiliti, Blackbaud, CONMED, Evolent Health, Globus Medical, GoodRx, Haemonetics, HealthEquity, ICU Medical, Integer Holdings, Integra LifeSciences, Masimo, ModivCare, MultiPlan, Nutanix, Pegasystems, R1 RCM, Teladoc Health, Veradigm .
Compensation Structure Analysis
- Mix and risk: ~89% of CEO target pay at-risk/variable (cash tied to performance; PSUs tied to relative TSR; RSUs variable with stock price) .
- Performance metrics: 2024 bonus metrics aligned to profitable growth (non-GAAP EBITDA, total revenue, SaaS & Expert Services) with quarterly and annual targets .
- Equity design: 50/50 RSUs/PSUs in 2024; PSUs based on relative TSR; multi-year vesting supports retention .
- Governance practices: No option repricing/exchanges without shareholder approval; minimum vesting rules; clawback policy; prohibition on hedging/derivatives .
Related Party Transactions
- Policy requires Audit Committee approval; no related‑person transactions >$120,000 disclosed for insiders other than specified director consulting agreements (not involving CEO) .
Employment & Retention Risk Indicators
- Pledging: 355,861 shares in The Lipps Revocable Trust pledged as collateral to a personal line of credit (potential forced-sale risk under stress) .
- Combined Chair/CEO: Balanced by Lead Independent Director with robust responsibilities .
- CFO transition: CFO stepping down in 2025; transition and separation agreement in place (non-cause separation; severance per plan) .
Equity Plan Utilization
- Burn rate: 2.8% in 2024; full dilution 13.1% as of 12/31/2024 .
- 2009 Plan amended in 2025 to add 1,750,000 shares; share-counting rules and anti-repricing safeguards maintained .
Investment Implications
- Alignment: High proportion of variable/at-risk pay and relative TSR PSUs aligns CEO incentives with shareholder returns; 2024 PSU over‑earn underscores sensitivity to stock performance .
- Near-term supply: Material PSU and RSU tranches vest quarterly over the next three years, alongside pledged shares at the trust, which may contribute to periodic selling pressure or collateral risk in adverse scenarios .
- Governance: Combined Chair/CEO remains a structural governance risk; mitigated by a strong Lead Independent Director framework and majority independent board .
- Retention: CEO contract protections (multi‑trigger severance, retirement vesting continuation) reduce leadership turnover risk; however, CFO transition in 2025 warrants monitoring on execution and control continuity .
Key trading signals: quarterly vesting cadence for large earned PSUs, existence of pledged shares, and executive transitions could influence insider activity and float dynamics. Compensation is meaningfully geared to non-GAAP EBITDA and TSR, providing line-of-sight into incentive-driven behaviors.
Note on fundamentals table: Values retrieved from S&P Global.