Eric Stang
About Eric Stang
Eric B. Stang, age 65, has been Ooma’s President, Chief Executive Officer, and Director since January 2009, and Chairman since December 2014, with an A.B. in Economics from Stanford and an M.B.A. from Harvard Business School . In fiscal 2025 Ooma delivered revenue of $256.9 million (+8% YoY) and adjusted EBITDA of $23.3 million (+17% YoY), while reporting a GAAP net loss of $6.9 million, metrics central to executive incentive payouts . Pay-versus-performance disclosures show Company TSR of 109.44 in FY2025 with total revenue of $256.85 million, contextualizing the alignment of compensation actually paid to performance measures used in incentives .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Reliant Technologies | President & CEO | 2006–2008 | Led privately held developer of medical technologies for aesthetic applications |
| Lexar Media | Chairman, President & CEO | — | Led publicly traded solid-state memory products company (now part of Micron) |
External Roles
| Organization | Role | Years | Committee roles / impact |
|---|---|---|---|
| Rambus Inc. | Director | Current | Chair, Compensation & Human Resources Committee; Member, Corporate Governance/Nominating Committee |
| InvenSense, Inc. | Director | 2014–2017 | Public company board experience in MEMS semiconductors |
| Solta Medical, Inc. | Director | 2008–2014 | Public company board experience in medical aesthetics |
Fixed Compensation
Multi-year compensation summary for Eric B. Stang:
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Salary ($) | 550,000 | 568,750 | 593,750 |
| Bonus ($, discretionary) | — | 28,750 | 25,250 |
| Stock Awards ($, grant-date fair value) | 3,004,200 | 3,287,500 | 2,162,500 |
| Non-Equity Incentive Plan Compensation ($) | 632,500 | 448,500 | 784,750 |
| All Other Compensation ($) | 15,934 | 16,806 | 18,598 |
| Total ($) | 4,968,334 | 4,350,306 | 3,584,848 |
Key fixed pay decisions in FY2025:
- Base salary increased to $600,000 effective May 1, 2024 (from $575,000), reflecting competitiveness vs. peer benchmarks .
- Target annual bonus set at $600,000 for FY2025 (from $575,000), effective May 1, 2024 .
Performance Compensation
Annual Cash Bonus Plan Performance (FY2025)
| Metric | Target | Actual | Achievement (%) | Payout multiplier |
|---|---|---|---|---|
| Annual Revenue ($) | $254.0 million | $256.9 million | 101.1% | 134% overall |
| Adjusted EBITDA ($) | $21.8 million | $23.3 million | 106.8% | 134% overall |
Plan design:
- Two corporate objectives: total revenue and adjusted EBITDA; payout scaled up to 200% of target; minimum thresholds at 97.6% of revenue target and 81.6% of adjusted EBITDA target .
- FY2025 multiplier calculated at ~134%, driving non-equity incentive payouts for named executives, including the CEO .
Equity Awards Granted (FY2025)
| Award type | Grant date | Shares/Units | Grant date fair value ($) | Vesting schedule |
|---|---|---|---|---|
| RSU | 3/15/2024 | 250,000 | 2,162,500 | 1/16th vests quarterly beginning 6/15/2024; quarterly vest thereafter; subject to CIC acceleration terms |
Program design and evolution:
- Compensation committee emphasized RSUs in FY2025 and did not grant options to manage burn rate and dilution, while maintaining potential future use of options .
- Equity awards vest quarterly over multi-year periods; CEO awards are subject to specified acceleration on termination without cause/good reason or during change-in-control periods .
Equity Ownership & Alignment
| As of | Common Stock | Options exercisable within 60 days | RSUs vesting within 60 days | Total beneficial ownership | Ownership % |
|---|---|---|---|---|---|
| April 10, 2025 | 1,293,717 | 302,188 | 44,375 | 1,640,280 | 5.9% |
Additional alignment and trading practices:
- Insider exercises/vesting FY2025: 190,000 options exercised ($743,993 realized) and 208,125 RSUs vested ($2,285,644 value), indicating ongoing supply from option conversions and scheduled RSU vesting that may create selling pressure windows .
- Stock ownership guidelines: CEO at 3× base salary, others at 1×; all executive officers met FY2025 ownership requirements, supporting alignment .
- Hedging/pledging prohibited by policy; margin accounts/pledging require approval, and none of the named executives have pledged Ooma shares .
- 10b5‑1 plans/pre-clearance required for directors/executives to trade outside blackout periods .
Employment Terms
| Provision | Outside CIC Period | During CIC Period |
|---|---|---|
| Cash severance (salary) | 12 months | 24 months |
| Target bonus | 100% of target + pro‑rata for year | 200% of target + pro‑rata for year |
| COBRA benefit | 12 months (lump sum) | 24 months (lump sum) |
| Equity acceleration | Vesting of awards scheduled to vest within 12 months post‑termination; options exercise extension up to 12 months | 100% acceleration; options exercise extension up to 2 years; full acceleration if successor refuses to assume awards |
| 280G treatment | “Better after‑tax” cut or full to maximize net to executive (no gross‑ups) | “Better after‑tax” cut or full to maximize net to executive (no gross‑ups) |
| Trigger definition | Termination without cause or resignation for good reason outside CIC window | Termination without cause or resignation for good reason during CIC window (3 months before to 12 months after CIC) |
Notes for other named executives:
- CFO and CLO (Hamamatsu, Yeh): 9 months salary + 9 months COBRA outside CIC; 12 months salary + 100% target bonus + 12 months COBRA + 100% equity acceleration during CIC .
- Gustke/Sabharwal: 100% unvested equity accelerates if terminated without cause or materially reduced duties within 12 months of CIC, subject to release/covenants .
Board Governance
- Stang is CEO and Chairman, and therefore not independent; Ooma maintains a Lead Non‑Management Director (William D. Pearce) to preside over executive sessions and liaise with independent directors, mitigating dual‑role concerns .
- Director independence: six of eight current directors deemed independent; Stang and Yeh not independent .
- Board committees: Stang is not listed as serving on audit/comp/nom‑gov committees; committee membership is comprised of independent directors .
- Board activity and attendance: the Board met five times in FY2025; each director attended at least 75% of Board and committee meetings during periods of service .
Compensation & Incentives Diagnostics
- Philosophy targets approximately the 50th percentile of peer comp for total on‑target direct compensation; significant “at risk” mix via annual incentives and multi‑year equity .
- Peer group spans telecom services and enterprise software with $200–$500M revenues; examples include 8x8, Bandwidth, Yext; updated for M&A and relevance .
- FY2025 Say‑on‑Pay: prior year approval exceeded 93%, and the committee continues to consider shareholder feedback .
- Consultant independence: Compensia served as independent advisor; no other services provided to Ooma .
- Design evolution: shift away from options in FY2025 to RSUs to manage burn rate and dilution, with explicit burn‑rate and overhang monitoring (3‑yr average net burn ~4.5%) .
Risk Indicators & Red Flags
- Dual role (CEO + Chairman): not independent, though mitigated by Lead Non‑Management Director structure and independent committee composition .
- Section 16(a) delinquency: late Form 4 filing noted for Stang’s grant of 250,000 RSUs in FY2025 (clerical error) .
- No related party transactions >$120,000 reported in FY2025, reducing conflict‑of‑interest risk .
- Clawback: Compensation Recovery Policy compliant with SEC/NYSE affects cash and equity incentives since Oct 2, 2023 .
- No tax gross‑ups; 280G handled via “better after‑tax” approach (cut or full) .
Performance Compensation Details
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Total Revenue | Not disclosed | $254.0m | $256.9m | Drives 134% overall multiplier | N/A (cash bonus) |
| Adjusted EBITDA | Not disclosed | $21.8m | $23.3m | Drives 134% overall multiplier | N/A (cash bonus) |
Equity vesting schedules linked to retention and CIC provisions:
- CEO RSUs (e.g., 250,000 units granted 3/15/2024) vest 1/16th quarterly starting 6/15/2024; acceleration applies upon qualified termination or during CIC window; successor non‑assumption triggers full acceleration .
Director Compensation (for governance context)
- Non‑employee directors receive cash retainers, committee fees, and annual RSUs ($150,000 value, one‑year vesting); employee directors (e.g., CEO) receive no additional director pay .
Equity Overhang and Burn Rate (dilution context)
- As of April 10, 2025: outstanding options 570,055 (WAEP $13.67), time‑based RSUs 2,601,634; shares available for future grant 2,319,818 under EIP .
- Three‑year average net burn rate ~4.5%; equity overhang ~17.7% .
Investment Implications
- Pay-for-performance alignment appears intact: revenue and adjusted EBITDA beat FY2025 targets yielded a 134% bonus multiplier; equity centered on RSUs enhances retention but can increase supply via quarterly vesting; option exercises and RSU vesting in FY2025 suggest periodic selling pressure windows around vest dates and 10b5‑1 plans .
- Dual CEO-Chairman structure raises governance independence concerns, partially mitigated by a robust Lead Independent Director role and independent committees; investors should monitor the balance between strategic control and independent oversight .
- CIC/severance economics for CEO are significant (up to 2× salary and 2× bonus plus 100% acceleration and extended option exercise), implying potential transaction costs and dilution risk in change-of-control scenarios; absence of tax gross‑ups and “better after‑tax” clauses moderates shareholder-unfriendly optics .
- Policy guardrails (clawbacks, hedging/pledging prohibitions, ownership guidelines) reduce misalignment risk; prior clerical late Form 4 filing should be monitored but does not indicate systemic control failure based on disclosures .
All citations:
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