Shai Lustgarten
About Shai Lustgarten
Shai Lustgarten is Chief Executive Officer and Chairman of OMNIQ Corp, appointed CEO in April 2017 and previously served as interim CFO from December 2018 to September 4, 2019; he holds a B.S. in Business Management & Computer Science from the University of Maryland . Age disclosures show 51 (2025 proxy) and 52 (2024 proxy), reflecting timing of filings . Under his leadership, 2024 operating loss decreased 74% YoY to $6.9M despite a 9% revenue decline, while TSR declined sharply over 2022–2023 per “pay vs performance” disclosures .
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($MM) | — | $81.19 | $73.57 |
| Loss from Operations ($MM) | — | $26.2 | $6.9 |
| Gross Profit ($MM) | — | $15.7 | $15.4 |
| TSR – Value of $100 Investment | $70.70 | $14.87 | — |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Teamtronics, Inc. | Chief Executive Officer | 2016–2017 | Led rugged computers/electronics in oil & gas |
| Micronet Limited Inc. (TASE) | Chief Executive Officer | 2014–2017 | Mobile computing platforms for fleet/workforce solutions |
| Micronet Enertec Technologies (NASDAQ) | EVP Biz Dev & Head, Aerospace & Defense | 2013–2014 | Growth initiatives in aerospace/defense technology |
| TAT Technologies | VP Sales, Marketing & CMO | 2009–2013 | Commercial/defense electronic systems supplier |
| T.C.E. Aviation Ltd. | Chief Executive Officer | Prior period | Leadership in aviation services (Belgium) |
| Embassy of Israel (Washington, DC) | Assistant to Military Attaché | 1993–1997 | Defense liaison/operations support |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| OMNIQ Corp | Interim CFO | Dec 2018–Sep 4, 2019 | Dual financial leadership during transition |
Fixed Compensation
| Component | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $600,000 | $637,000 |
| Cash Bonus ($) | $120,000 | $25,000 |
| All Other Compensation ($) | $28,000 | $28,000 |
| Total ($) | $748,000 | $690,000 |
Performance Compensation
| Item | Details |
|---|---|
| Bonus plan design | Future bonuses tied to role-related performance criteria; program may be formalized as company grows |
| Equity program | OMNIQ maintains equity incentive plans (2018/2020/2023/2025) permitting stock options and restricted stock; new 2025 plan authorizes 1,500,000 shares |
Outstanding equity awards (as of reporting dates):
| Award | Exercisable | Unexercisable | Exercise Price | Expiration |
|---|---|---|---|---|
| Stock Option | 230,000 | 0 | $4.84 | 09/30/2030 |
| Stock Option | 140,000 | 0 | $5.65 | 03/01/2027 |
| Stock Option | 50,000 | 0 | $0.07 | 06/17/2030 |
Notes:
- Change-in-control acceleration: 50% of unvested equity vests upon a “Change in Control” unless otherwise provided in award agreements .
Equity Ownership & Alignment
| Holder | Shares Beneficially Owned | % Outstanding | Composition |
|---|---|---|---|
| Shai Lustgarten (Chairman & CEO) – 2024 | 1,460,155 | 10.6% | Includes 370,000 options; and (i) 1,056,822 shares and (ii) 33,333 warrants via Walefar Investments Ltd. (beneficially owned by Lustgarten) |
| Shai Lustgarten (Chairman & CEO) – 2025 | 1,506,822 | 12.99% | Includes 370,000 options; and (i) 1,056,822 shares and (ii) 33,333 warrants via Walefar Investments Ltd. |
Policy and alignment indicators:
- Anti-hedging/pledging: Company has not established an anti-hedging policy; executives/directors may hold shares in margin accounts or pledge as collateral (alignment risk) .
- Insider trading policy: Trading windows, pre-clearance, 10b5-1 permitted; excludes cash exercise of options .
- Ownership guidelines: Not disclosed in proxies .
Potential insider supply:
- All listed options for Lustgarten are fully vested and exercisable as of 2024–2025 (no unexercisable balance shown), implying potential sale capacity if exercised .
Employment Terms
| Term | Provision |
|---|---|
| Agreement | Employment agreement dated Feb 2020; 4-year term with automatic one-year renewals |
| Base Salary | $560,000 per agreement; eligible for equity awards and milestone bonuses under company plans |
| Severance (agreement-specific) | If CEO resigns for “good reason” or is terminated without cause, entitled to greater of unpaid base salary or one year’s base salary |
| Termination (general proxy language) | Lump sum equal to greater of unpaid annual salary through end of term or two years of annual salary, plus COBRA reimbursement (note inconsistency vs agreement-specific term) |
| Change-in-control equity | 50% acceleration of unvested equity; committee may further accelerate/options cash-out on change-in-control |
| Non-compete/solicit | Not specified in filed proxy sections |
| Clawback | Not specified; Code of Ethics adopted |
Board Governance
- Board leadership: Lustgarten serves as both CEO and Chairman; dual role raises independence concerns, especially with a reduced board size .
- Board composition: 2024 board had five members (three independent: Shalem, Elhanani, Teicher); by 2025, board consists of two members (Lustgarten and Elhanani; Elhanani independent) .
- Committees:
- 2024: Audit (Shalem chair), Compensation (Elhanani chair; Shalem member), Corporate Governance/Nominating (Shalem chair; Teicher member) .
- 2025: All committees (Audit, Compensation, Corporate Governance/Nominating) comprised solely of independent director Elhanani (chair), highlighting concentration risk .
- Attendance: Board met eight times in 2022; members attended 100% of meetings . Board met eight times in 2025 with 100% attendance .
- Shareholder voting (2025 Annual Meeting): Directors elected (Lustgarten: 4,298,918 for / 591,581 withheld; Elhanani: 4,304,218 for / 586,281 withheld); 2025 Equity Plan approved (4,217,122 for / 647,439 against / 25,938 abstain) .
Director Compensation
| Director | FY 2023 Cash Fees ($000) | FY 2023 Options FV ($000) | FY 2024 Cash Fees ($000) |
|---|---|---|---|
| Yaron Shalem | 24 | 46 | 24 |
| Mina Teicher | — | — | 24 |
| Guy Elhanani | 24 | 51 | 24 |
Note: Shai Lustgarten’s compensation reported under executive section, not director fees .
Related Party Transactions and Risk Indicators
- Related party: Consulting agreement paying $30,000/month to principal stockholder Carlos J. Nissensohn (father of former CFO/director Neev Nissenson), with milestone bonuses; auto-renewal (Feb 2020) .
- Internal control: Management disclosed material weakness in segregation of duties; remediation ongoing; minimal perceived misstatement risk but acknowledged limitations .
- Anti-hedging absence and pledging permitted may weaken alignment .
- Say-on-pay: Advisory vote proposed in 2024 proxy; frequency recommendation “three years”; results not provided in excerpts .
Compensation Structure Analysis
- Cash vs equity mix: 2024 total comp decreased to $690k from $748k in 2023, with minimal equity grant activity disclosed in NEO table for 2023–2024; equity awards remain via option overhang rather than fresh RSUs/PSUs .
- Performance linkage: Bonuses discretionary and to be linked to operational metrics in future; currently limited disclosure of specific targets/weights .
- Equity plan evolution: Adoption of 2023 and 2025 Equity Incentive Plans expands capacity; includes standard ISOs/NQSOs, restricted stock, and 50% CIC acceleration (repricing prohibited without shareholder approval) .
Equity Ownership & Trading Signals
| Item | Indicator |
|---|---|
| Ownership concentration | CEO beneficial ownership ~13% (2025), up from ~11% (2024), plus options/warrants via Walefar; strong skin-in-the-game but with pledging risk |
| Option overhang | Vested options (420k+ incl. $0.07 strike lot) create potential supply on price strength |
| Governance | CEO-Chair model with single independent director holding all committee roles post-2025 increases governance and key-man risk |
Investment Implications
- Alignment: High CEO ownership and vested options suggest material alignment, but permissive hedging/pledging and related-party consulting dilute governance quality .
- Pay-for-performance: 2024 cash comp fell as operations improved materially; future bonus plans to tie to operational metrics would strengthen alignment if formalized .
- Retention/transition risk: Employment terms vary between one-year and two-year salary severance in disclosures; 50% CIC equity acceleration adds potential change-of-control costs .
- Governance overhang: Board reduced to two members with CEO-Chair dual role and one independent director across all committees increases oversight risk; monitor addition of independent directors and formal anti-hedging policy .
- Trading signals: Vested deep-in-the-money option tranche ($0.07 strike) raises potential insider selling supply on rallies; watch 10b5-1 filings/Forms 4 for execution activity .