Philipp Stratmann
Ocean Power TechnologiesAbout Philipp Stratmann
Philipp Stratmann is President, Chief Executive Officer, and a Director of Ocean Power Technologies (OPT) since June 18, 2021; age 45 as of November 2024, and he holds an Engineering Doctorate and Master of Engineering (Ship Science) from the University of Southampton, plus NACD CERT in cybersecurity oversight . Performance signals: OPT’s compensation “Pay vs Performance” shows negative net income across FY2022–FY2024 and a declining TSR proxy metric in FY2024, highlighting execution risk against ambitious bookings and revenue goals . Board independence is maintained via an independent Chairman (Terence Cryan); Stratmann is not independent due to his CEO role .
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Value of $100 Investment (TSR proxy) | $42 | $48 | $37 |
| Net Income ($USD) | $(18,874,649) | $(26,326,062) | $(27,482,219) |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ocean Power Technologies | VP – Global Business Development | 2019–2021 | Led corporate development; pipeline and M&A (e.g., 3Dent) |
| Velocys | VP, Biofuels; Business Development Director | 2015–2019 | Advanced biofuels commercialization and partnerships |
| InterMoor (Acteon) | General Manager, Global Development & West Africa | Not disclosed | Offshore moorings; project execution in West Africa |
| VT Shipbuilding / VT Group | Engineering/Defense roles | Not disclosed | Defense and engineering operations; CMMC leadership exposure |
| Ernst & Young; Shell | Various leadership/consulting roles | Not disclosed | Finance/operations exposure in energy and consulting |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| NACD | CERT Certificate in Cybersecurity Oversight | Not disclosed | Corporate governance credential |
| Public company boards | — | — | None disclosed |
Fixed Compensation
| Component | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $360,000 | $372,600 |
| Target Bonus (% of Base) | 75% | 75% |
| Actual Bonus Paid ($) | $167,400 | $179,803 |
| Stock Awards ($) | $319,493 | $289,042 |
| Option Awards ($) | $0 | $0 |
| All Other Compensation ($) | $21,175 | $17,444 |
Performance Compensation
Short-Term Incentive (STI) — FY 2024
| Metric | Target/Threshold | Weighting (Points) | Actual (Score) | Payout Impact |
|---|---|---|---|---|
| New Bookings – Buoys | $7.8M | 15 | Included in 82/100 total | Contributed to 64% payout |
| New Bookings – Vehicles | $6.0M | 15 | Included in 82/100 total | Contributed to 64% payout |
| New Bookings – Consulting | $1.3M | 5 | Included in 82/100 total | Contributed to 64% payout |
| Operational – Manufacturing | Internal targets | 30 | Included in 82/100 total | Contributed to 64% payout |
| Operational – Technology | Internal targets | 10 | Included in 82/100 total | Contributed to 64% payout |
| Operational – Cyber | Internal targets | 5 | Included in 82/100 total | Contributed to 64% payout |
| Safety – Proactive Measures | Internal targets | 5 | Included in 82/100 total | Contributed to 64% payout |
| Safety – TRIR | Internal targets | 5 | Included in 82/100 total | Contributed to 64% payout |
| Total | 100 points; threshold at 75% | 100 | 82 points | 64% of target bonus |
Short-Term Incentive (STI) — FY 2025 Framework
| Metric | Target/Threshold | Weighting (Points) | Payout Guidance |
|---|---|---|---|
| New Bookings | $18M = 100% points; none < $13.5M | 30 | Linearly interpolated; max 200% |
| Revenue | $12.5M = 100% points; none < $9.38M | 40 | As above |
| Adjusted Operating Income | $10M operating loss = 100% points; none if loss > $12.5M | 15 | As above |
| Safety – Proactive Measures | Internal targets | 5 | As above |
| Safety – TRIR | Internal targets | 10 | As above |
| Total | 100 points | 100 | Board discretion for NEOs |
Long-Term Incentive (LTI) Structure and Vesting
| Program Year | Instrument | Weighting | Performance Metrics | Key Dates |
|---|---|---|---|---|
| 2022–2023 | RSUs | 1/3 time; 1/3 absolute TSR; 1/3 relative TSR (Russell 3000 Microcap) | Stock price TSR absolute and relative | Over 3 years |
| 2024 | RSUs | 1/3 time; 1/3 ISO certifications; 1/3 cumulative contracted bookings; plus 10% annual “instant” RSU for positive TSR (cap 30%) | ISO certifications; bookings; TSR (10-day VWAP vs prior year) | 1/31/2025, 1/31/2026, 1/31/2027 assessments |
Equity Ownership & Alignment
| Ownership Item | As of Jun 28, 2024 | As of Mar 17, 2025 |
|---|---|---|
| Beneficial Ownership (Total Shares) | 149,218; includes 139,885 common + 9,333 options (exercisable ≤60 days) | 513,725; includes 504,392 common + 9,333 options (exercisable ≤60 days) |
| % of Shares Outstanding | <1% | <1% |
| RSUs vesting within 60 days | 21,000 (Nov 2024 snapshot) | Not separately disclosed in March 2025 special proxy |
| Options (Exercisable) | 9,333 @ $2.93, expires 1/14/2031 | 9,333 @ $2.93, expires 1/14/2031 |
| RSUs Outstanding (Unvested) | 84,000 (1/14/2022 grant); 339,707 (1/19/2023 grant); 1,171,887 (2/1/2024 grant) | Not broken out in March 2025 special proxy |
| Ownership Guidelines | CEO must hold 5x base salary within 5 years | Same |
| Hedging/Pledging | Prohibited for directors and officers | Prohibited |
Alignment notes:
- Large outstanding RSU stack with multi-year, performance-contingent vesting (ISO certifications, bookings, TSR) links equity to execution outcomes .
- Short-term trading restrictions and explicit ban on hedging/pledging improve alignment and reduce leverage-induced selling pressure risk .
Employment Terms
| Term | Details |
|---|---|
| Start Date; Role | Effective June 18, 2021; CEO & Director reporting to the Board |
| Contract Term | One-year initial term; automatic one-year renewals unless 90-day notice |
| Base Salary | $372,600 for FY2025 |
| Target Bonus | 75% of base; discretionary, performance-based |
| LTI Eligibility | Equity awards under 2015 Omnibus Incentive Plan |
| Severance (No Cause / Good Reason) | 12 months of base salary after first year; 6 months if within first year |
| Change-of-Control Economics | Double trigger: if terminated without cause or resigns for Good Reason within 90 days post-CoC, 12 months base; equity becomes fully vested per employment agreement; the 2015 Plan also accelerates if awards not assumed, with specific treatment of performance awards (target or actual depending on elapsed period) |
| Non-Compete / Non-Solicit | 1-year global non-compete in wave energy; 1-year non-solicit of employees and customers |
| Clawback | SEC/NYSE-compliant compensation clawback policy adopted in 2023; applies to incentive-based compensation over 3 years pre-restatement |
| Trading Restrictions | Insider Trading Policy with preclearance, blackout periods, and prohibition on short sales and speculative derivatives |
| Relocation/Perquisites | One-time temporary housing and relocation assistance up to $50,000 each (no tax gross-up) at hiring |
Board Governance and Director Service
- Board Service: Director since 2021; CEO/Director dual role with independent Chair (Terence J. Cryan) .
- Independence: Board determined all directors are independent except Stratmann (CEO) .
- Attendance: Board held 13 meetings in FY2024; each director attended 100% of Board and committee meetings .
- Committee Memberships: Member of Quality, Health & Safety Committee (4 meetings) and Environmental & Sustainability Committee (4 meetings) .
- Board Leadership: Independent Chairman model maintained; periodic review of leadership structure .
- Stock Ownership Guidelines: CEO 5x base salary over 5 years; directors 1x annual cash retainer achieved over 5 years .
Compensation Structure Analysis
- Shift to RSUs: OPT moved from stock options to RSUs for NEOs starting FY2023, increasing certainty of value and potential dilution if performance targets are met .
- Pay for Performance: STI and LTI frameworks rely on bookings, revenue, operating income, ISO certifications, and TSR, with capped awards and committee certification of performance .
- Clawback & No Repricing: Strong governance features including clawback and prohibition of option/SAR repricing without shareholder approval .
- Say-on-Pay Votes: 63% (2023), 70% (2022), 78% (2021), indicating mixed investor support trending lower in 2023 .
- Peer/Benchmarking: Committee targets around 50th percentile for executive compensation using market data; independent consultant (NFP) used for director pay review .
Related Policies and Red Flags
- Going Concern: Auditor report included going-concern explanatory paragraph; sustained losses and cash outflows elevate retention and financing risk .
- Share Authorization Increases: Board-led special meetings in 2024 and 2025 to increase authorized shares to support capital raises and incentives, signaling dilution risk and reliance on equity financing .
- Activist/Proxy Dynamics: Disputes with activist shareholders noted, raising governance complexity .
- Hedging/Pledging: Explicit prohibition reduces risk of forced sales; no tax gross-ups disclosed for golden parachutes/perks .
Investment Implications
- Incentive alignment is increasingly bookings- and certification-driven (2024 LTI redesign), giving direct line-of-sight to commercialization milestones; however, negative net income and going-concern commentary heighten execution risk and potential for below-target payouts .
- Large unvested RSU overhang (≈1.6M units across 2022–2024 grants for the CEO) plus recent expansions of authorized shares signal dilution overhang; monitor vesting triggers (ISO certifications, cumulative bookings, TSR) for timing of supply into the float .
- Change-of-control economics: Double-trigger severance of 12 months base and equity acceleration (either via employment agreement or plan-level acceleration if not assumed) imply heightened payout sensitivity in strategic transactions; hedging is prohibited, but watch for selling pressure at vest dates .
- Governance mitigants: Independent chair, 100% attendance, clawback, no repricing; yet say-on-pay support dipped to 63% in 2023, suggesting investor scrutiny on pay-for-performance amid losses .
Sources: Proxy statements (DEF 14A: 2024-11-18, 2025-03-24, 2024-07-15) and Form 8-K (employment agreement).