Darren Dragovich
About Darren Dragovich
Darren Dragovich is Chief Legal and Compliance Officer and Corporate Secretary at CPI Card Group (PMTS), appointed in October 2024. He is 52 and previously served nearly 21 years at Western Union, including Deputy General Counsel (Nov 2021–Oct 2024) and Corporate Secretary (Feb 2023–Oct 2024); earlier he practiced at Hogan & Hartson LLP. He holds a BA in Economics and an MA in Organizational Behavior from Stanford University, and a JD from the University of Virginia . Under his tenure window, CPI reported FY2024 Net Sales of $480.6M (+8.1% YoY), Adjusted EBITDA of $91.9M (+2.7% YoY), and Net Income of $19.5M (−18.6% YoY, primarily due to debt refinancing costs); company TSR (value of $100 investment) was 161 for 2024 versus 103 in 2023 and 195 in 2022 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Western Union | Deputy General Counsel | Nov 2021 – Oct 2024 | Oversaw corporate governance, securities, and M&A; provided legal support across key functions . |
| Western Union | Corporate Secretary | Feb 2023 – Oct 2024 | Led board governance and disclosure processes . |
| Western Union | Various legal leadership roles | Jun 2003 – Oct 2024 | Progressively senior responsibilities across Americas business and corporate functions . |
| Hogan & Hartson LLP (Hogan Lovells) | Corporate transactional and securities attorney | Pre-2003 | Advised on corporate transactions and securities law . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Nonprofit boards (unspecified) | Director | Not disclosed | Governance and philanthropic engagement across Africa, India, Mexico (as disclosed) . |
Fixed Compensation
- Individual base salary, target bonus, and 2024–2025 actual payouts for Dragovich are not disclosed in the proxy. Officer compensation is set by the Board or authorized committee per the Fourth Amended and Restated Bylaws Section 5.10 .
- The company does not provide executive perquisites and maintains annual say‑on‑pay; 2024 say‑on‑pay approval was ~97.5% .
Performance Compensation
Short‑Term Incentive Plan (STIP) – design applicable to executive officers
| Metric | Weighting | Corporate vs Individual | Notes |
|---|---|---|---|
| Adjusted EBITDA | 70% | 100% corporate‑wide | Non‑GAAP definition applied for plan purposes . |
| Net Sales | 30% | 100% corporate‑wide | Consistent with “Total Net Sales” in financial statements . |
STIP design includes quarterly payouts capped at 100% of target with annual true‑up to align to seasonality and annual operating plan .
Long‑Term Incentive Plan (LTIP) – 2024 design and vesting mechanics
| Component | Weighting | Vesting / Performance | Key Performance Levers |
|---|---|---|---|
| RSUs | 67% of annual target | Ratable over 3 years: 33.4% year 1, 33.3% year 2, 33.3% year 3 | Stock price alignment and retention . |
| Performance Cash | 33% of annual target | Two‑year period (Jan 1, 2024–Dec 31, 2025); paid in 2026 contingent on performance and service | Relative TSR vs Russell 2000 (P50 target) and annual Cumulative Free Cash Flow goals . |
Note: PSUs are CEO‑specific (stock price hurdles $35/$50/$65 over 5 years) and do not apply to Dragovich .
Equity Ownership & Alignment
| Policy / Element | Detail | Implication |
|---|---|---|
| Stock ownership guidelines | 5x base salary for CEO; 2x base salary for other executive officers; 5x cash retainer for directors; 5‑year compliance window . | Promotes alignment; Dragovich’s compliance status not disclosed. |
| Hedging/Pledging | Insider Trading Policy prohibits hedging, short sales, publicly traded options, margin sales, pledges of collateral, and standing limit orders . | Eliminates hedging and pledging risk; lowers misalignment risk. |
| Beneficial ownership | Individual holdings for Dragovich not disclosed; executives and directors as a group (15 individuals) owned 317,295 shares (2.8% of outstanding as of Apr 4, 2025) . | Group ownership provides baseline alignment; individual skin‑in‑the‑game not disclosed for Dragovich. |
Employment Terms
| Provision | Terms | Notes |
|---|---|---|
| Executive Severance Guidelines | If terminated without cause or for good reason (not in CIC context): cash severance = 1x base salary + target annual bonus (CEO: 1.5x) . | Applies to officers without individual agreements. |
| Change‑in‑Control (CIC) | If terminated within 24 months following CIC: severance multiple increases to 1.5x (CEO: 2.0x) . | Company states it does not award single‑trigger cash severance; requires termination event (double trigger) . |
| Benefits continuation & outplacement | Company continues portion of medical/dental/vision cost during severance/COBRA; may provide up to six months of outplacement services . | Standard transition support. |
| Restrictive covenants | Program provides confidentiality, non‑compete, and non‑solicit protections for the Company . | Enforcement linked to severance eligibility; specific durations not disclosed for Dragovich (examples for other execs show up to 2 years) . |
| Clawback | Revised policy (Oct 9, 2023) requires recovery of incentive‑based compensation (incl. TSR/stock‑price‑based) over three fiscal years preceding a required restatement; recovery regardless of culpability; no indemnification . | Strengthens pay‑for‑performance integrity. |
| Corporate Secretary duties | By‑laws define responsibilities: minutes, notices, records custody, authentication, stock transfer books, etc. . | Confirms scope of Dragovich’s role. |
Performance & Track Record (Company context during tenure window)
| Metric ($USD Millions) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Total Net Sales | — | — | $480.6 (+8.1% YoY) |
| Adjusted EBITDA | — | — | $91.9 (+2.7% YoY) |
| Net Income | — | — | $19.5 (−18.6% YoY; debt refinancing costs) |
| TSR – Value of $100 Investment | 2022 | 2023 | 2024 |
|---|---|---|---|
| Company TSR Value | 195 | 103 | 161 |
Notes: FY2024 commentary highlights strong Prepaid Debit performance, growth in contactless card and personalization, higher operating cash generation, and strategic initiatives despite lower Net Income due to refinancing costs .
Board Governance
- Communications and stockholder proposals directed to the Board are addressed to Darren Dragovich in his Corporate Secretary capacity .
Related Party Transactions and Policies
- Audit Committee reviews and approves related party transactions >$120,000; independence and conflict considerations detailed .
- Registration rights for Tricor Funds remain in effect; S‑3 registered in 2021; Tricor holds significant stakes (26.8% and 15.8%) .
Risk Indicators & Red Flags
- Hedging/pledging prohibited, reducing alignment risk concerns .
- Strong clawback policy aligned to Rule 10D‑1, covering TSR/stock‑price metrics .
- Section 16(a) compliance: filings timely except one Tricor report; no officer delinquencies noted .
- Company states it does not reprice options without stockholder approval and avoids single‑trigger CIC severance .
Compensation Committee and Say‑on‑Pay
- Practices include performance‑based pay, independent consultant, pre‑set challenging targets, risk review; no perquisites, no SERPs, no excise tax gross‑ups .
- 2024 say‑on‑pay approval ~97.5% .
Investment Implications
- Alignment: Anti‑hedging/pledging and ownership guidelines (2x salary for executives with 5‑year compliance window) materially reduce misalignment risk; clawback policy strengthens pay integrity for TSR/FCF‑linked incentives .
- Retention: Executive Severance Guidelines provide competitive double‑trigger CIC protection (1.5x salary+bonus; benefits continuation and outplacement), supporting stability without excessive guarantees .
- Incentive design: STIP and LTIP tie pay to Adjusted EBITDA, Net Sales, Relative TSR vs Russell 2000, and Cumulative Free Cash Flow, which should align legal/compliance priorities with enterprise value drivers; PSUs are CEO‑only, limiting Dragovich’s exposure to stock‑price hurdles .
- Data gaps: Individual compensation, equity holdings, and vesting schedules for Dragovich are not disclosed; absence of Form 4 analysis limits near‑term insider selling pressure assessment. Monitor future proxies and Section 16 filings for ownership build and transactions .