Adam Elsesser
PenumbraAbout Adam Elsesser
Adam Elsesser co-founded Penumbra and has served as Chief Executive Officer and a director since June 2004, as Chairman since January 2015, and as President from January 2015 to August 2019 and again since May 2020 . He is 63 and holds a B.A. from Stanford University and a J.D. from UC Law San Francisco (formerly Hastings) . Under his tenure, 2024 revenue reached $1,194.6 million (up 12.9% year over year), with 2024 non-GAAP income from operations of $106.6 million, while 2024 net income was $14.0 million; Penumbra’s 2024 company TSR value (from a $100 base) was 144.57 and trailed the S&P Healthcare Equipment Index’s 2024 TSR value of 103.45 . The company’s executive compensation “company-selected measure” for 2024 is revenue, consistent with the 2024 PSU design .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| SMART Therapeutics, Inc. | Chief Executive Officer | 2000–2002 | Led neuro-intervention device company prior to its acquisition by Boston Scientific . |
| Boston Scientific Corporation (SMART Therapeutics unit) | President, SMART Therapeutics | 2002–2005 | Led post-acquisition integration and operations of SMART Therapeutics within Boston Scientific . |
| Shartsis Friese LLP | Partner (law firm) | Prior to medical device roles | Legal and transactional background relevant to scaling and governance . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No other public company directorships disclosed in the proxy . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| CEO Base Salary ($) | 600,000 | 600,000 | 628,846 (reflects November 2024 increase to $850,000) |
- In November 2024, the Compensation Committee increased Elsesser’s base salary to $850,000 based on performance; he received no cash bonus and no new equity grant in 2024 .
- Company philosophy: no annual cash bonuses for NEOs; CEO cash comp intentionally modest versus peers (below 10th percentile historically; about 30th percentile after the increase), emphasizing equity ownership culture for alignment .
Performance Compensation
Penumbra’s 2024 performance equity program applied to senior employees and all NEOs other than the CEO. Elsesser did not participate and received no performance-based cash or equity awards for 2024 .
| Program element | Detail |
|---|---|
| Plan scope | 2024 PSU Program covering senior employees and NEOs other than the CEO . |
| Performance metrics & weights | Revenue (75% weight) and non-GAAP income from operations (including non-GAAP operating margin) (25% weight) . |
| Payout scale (by metric) | Below plan: 50% of 2024 salary; At plan: 75%; Above plan: 100%; no payout below threshold . |
| 2024 results (for plan) | Revenue $1,194.6m; non-GAAP income from operations $106.6m; RSUs granted 2/14/2025 to participating NEOs (e.g., 780 to CFO, 780 to GC, 640 to CAO) based on weighted average achievement and individual performance; vesting over 4 installments starting 2/18/2025 . |
| CEO participation | Not eligible; no PSUs/bonuses awarded to CEO for 2024 . |
Additional 2024 equity actions for non-CEO NEOs:
- March 15, 2024 grants (approved 2/16/2024) tied to 2023 PSU achievement (RSUs; first tranche vesting at grant; remainder annual) .
- November 15, 2024 time-based RSUs for retention and performance (e.g., 2,570–4,290 units) .
Equity Ownership & Alignment
| Item | Amount/Detail |
|---|---|
| Total beneficial ownership (shares) | 1,214,382 (3.1% of common stock) . |
| Ownership breakdown | 27,752 directly; 837,582 held by Siegel/Elsesser Revocable Trust (co-trustee with spouse); 349,048 options exercisable within 60 days of 3/31/2025 . |
| Options outstanding (12/31/2024) | 450,000 options exercisable at $30.00; expiration 9/16/2025 . |
| Vested vs. unvested | No unvested RSUs shown for CEO as of 12/31/2024; outstanding options fully exercisable . |
| 2024 transactions | Exercised 5,000 options in 2024 (value realized $1,208,500) . |
| Pledging/hedging | Prohibited by policy; anti-hedging and anti-pledging rules apply to executives and directors . |
| Ownership guidelines | CEO must hold ≥3x base salary; compliant as of 12/31/2024 . |
Insider selling pressure indicators:
- 450,000 CEO options at $30 expiring on 9/16/2025 could create exercise/sale timing considerations ahead of expiry; CEO exercised 5,000 options in 2024 .
- Company policy bars hedging/pledging, limiting downside-protection trades that can signal negative sentiment .
Employment Terms
| Term | Detail |
|---|---|
| Employment agreement | None; at-will; no severance or change-in-control cash benefits . |
| Equity treatment on change in control | All unvested RSUs/options vest immediately upon a change in control, subject to continued service through the date (single-trigger equity acceleration) . |
| Clawback | Dodd-Frank compliant clawback for incentive-based comp tied to financial measures for the 3 completed fiscal years preceding a required restatement . |
| Tax gross-ups | None for parachute payments or deferred compensation . |
Board Governance and Director Service
- Role: Chairman of the Board and CEO; Board has combined Chair/CEO role since January 2015; Board believes combination enhances leadership and strategy execution; no lead independent director—Thomas Wilder serves as Presiding Director for independent sessions .
- Independence: Elsesser is not independent; majority of board and all committee members are independent .
- Committees: CEO is not listed as a member of Audit, Compensation, or NCG Committees; he chairs an Equity Award Committee authorized to grant equity to non-Section 16 officer employees under guidelines .
- Board tenure/service: Director since June 2004; current Class III term expires at 2027 annual meeting .
- Meetings/attendance: Board met six times in 2024; each director attended ≥75% of Board/committee meetings; independent director executive sessions occur as part of every regular quarterly meeting .
- Governance enhancements proposed: Board declassification (phased beginning 2026) and elimination of supermajority voting requirements—both recommended by the Board for stockholder approval in 2025 .
Director compensation:
- Employee directors (including Elsesser) receive no separate director pay; non-employee director retainers and RSUs disclosed separately .
Performance & Track Record
| Metric | 2023 | 2024 |
|---|---|---|
| Revenue ($000) | 1,058,522 | 1,194,615 |
| YoY revenue growth | — | 12.9% |
| Net income ($000) | 90,954 | 14,012 |
| Non-GAAP income from operations ($000) | — | 106,600 (used for 2024 PSU assessment) |
| TSR ($100 base) | 153.13 | 144.57 |
Execution and one-time items impacting comparability:
- 2024 non-GAAP adjustments included: $5.0m Immersive Healthcare wind-down costs; $76.9m long-lived asset impairment tied to Immersive Healthcare; $4.8m non-recurring litigation expense; $5.8m revenue reduction (Italy payback); $4.8m amortization from Sixense acquisition; the Compensation Committee also noted a $33.4m inventory impairment to cost of revenue in 2Q24 when assessing PSU outcomes .
Say‑on‑Pay & Shareholder Feedback
- Say-on-Pay approval at 2024 annual meeting for 2023 NEO compensation: ~93%; program retained for 2024 with similar structure; ongoing shareholder engagement led by senior management .
Compensation Peer Group (Benchmarking)
- 2024 peer group updated with additions (e.g., 10x Genomics, Bio-Techne, Inspire Medical Systems, Medpace, Shockwave Medical) and removals (e.g., Artivion, AtriCure, Inogen, Integer Holdings, Nevro, NuVasive, Tandem Diabetes Care, Varex Imaging; ABIOMED removed due to acquisition) .
- As of August 2023, Penumbra was ~35th percentile for revenue and ~95th percentile for market cap vs. 2024 peer group; Committee does not target specific percentiles for pay elements .
Related Party Transactions and Other Risks
- Related party: CEO’s son (Aidan Elsesser) is a non-executive employee; compensation exceeded $120,000 in 2024 and expected to exceed $120,000 in 2025; reviewed under Related Person Transaction Policy .
- Legal proceedings: None material involving directors/officers disclosed .
- Policies mitigate risk: anti-hedging/pledging, clawback, strong independence on committees, and structured comp review with independent consultant (Compensia) reaffirmed independent in Feb 2025 .
Investment Implications
- Alignment and incentives: CEO’s substantial equity stake (3.1%) and ownership guideline compliance support long-term alignment; absence of cash bonuses and modest salary (relative to peers) is shareholder-friendly, though CEO did not receive performance-linked equity in 2024, limiting explicit pay-for-performance signal at the CEO level .
- Potential trading pressure: 450,000 deep-in-the-money options expiring 9/16/2025 could drive exercise and potential sales into 2025; CEO exercised 5,000 options in 2024; monitor Form 4s for timing/magnitude of exercises and any 10b5-1 plans .
- Change-in-control economics: No cash severance; single-trigger equity acceleration could influence incentives around strategic transactions; board pursuing governance enhancements (declassification, remove supermajority) which may affect activism and M&A dynamics .
- Execution risk: 2024 impairments and non-GAAP adjustments around the Immersive Healthcare business highlight business-mix and execution risks; nevertheless, revenue grew 12.9% YoY and revenue is embedded as the key performance measure in NEO PSUs, focusing management on top-line plus operating profitability .
- Shareholder support: Strong Say-on-Pay (~93%) reduces near-term compensation controversy risk; continued engagement appears robust .