H. Sanford Riley

About H. Sanford Riley

H. Sanford “Sandy” Riley, 74, is an independent director and Chair of the Board at CPI Card Group Inc. (PMTS), serving since May 2023; the Board approved an exception to the company’s mandatory retirement age to permit his continued service in 2025 . He is President & CEO of Richardson Financial Group Limited (since 2003) and brings extensive board-level expertise in risk management, corporate governance, and executive compensation, with a J.D. from Osgoode Hall Law School and a B.A. from Queen’s; he is a Member of the Order of Manitoba and the Order of Canada .

Past Roles

External Roles

Board Governance

• Role: Independent Chair of the Board; PMTS maintains separate Chair and CEO roles to enhance oversight; Riley presides over non‑employee executive sessions .
• Independence: Board affirmed Riley’s independence under Nasdaq/market rules .
• Mandatory retirement policy: Directors not eligible at age 74 unless the Board grants an exception; the Board approved an exception for Riley for 2025 .
• Board/committee composition and attendance: The Board met 10 times in 2024; each director attended at least 75% of Board and committee meetings held during their service .
• Committee assignments (2024): Riley is not listed as a member of Audit, Compensation, or Nominating; committee chairs were Sheinbaum (Audit), Peters (Compensation), Soranno Keating (Nominating) .

Fixed Compensation

• Program design (unchanged from 2023) combines cash retainers and stock‑settled RSUs vesting on the first anniversary; effective January 1, 2024 the annual cash retainer increased to $100,000, Chair of the Board fee increased to $50,000, annual equity award remained at $100,000; committee chair fee $15,000; member fee $7,500 .
• Riley’s 2024 compensation totals: Cash $150,000; Stock awards fair value $110,275; Total $260,275 .

Performance Compensation

• Non‑employee director equity consists of time‑based RSUs; no performance‑based RSUs/PSUs or options are disclosed for directors. RSUs vest one year from grant; directors could elect deferral to DSUs effective January 1, 2024 (settled in stock at separation) .

Other Directorships & Interlocks

• Tricor Funds designation: PMTS’s Director Nomination Agreement grants Tricor Funds the right to designate nominees while they hold ≥5% of outstanding shares; Tricor designated Riley (effective 2023), along with Peters (2016) and Oleson (2024) .
• Related-party repurchases: PMTS repurchased shares from Tricor in 2024 under pre‑agreed terms at 98% of VWAP of concurrent open‑market purchases; transactions were approved by the Audit Committee .

Expertise & Qualifications

• Board qualifications noted: leadership in risk management, corporate governance, and executive compensation; extensive public company board experience across financial services and consumer sectors .
• Education and honors: J.D. (Osgoode Hall), B.A. (Queen’s); Member of the Order of Manitoba and the Order of Canada .

Equity Ownership

Governance Assessment

• Strengths

  • Independent Chair structure; Riley presides over executive sessions, enhancing board oversight .
  • Board affirmed Riley’s independence; broad external board and CEO experience in financial services .
  • Director pay balanced between fixed cash and equity; RSUs and optional DSU deferral support alignment and retention .
  • Strong shareholder support for executive compensation: 2024 say‑on‑pay approved by approximately 97.5% ; 2025 say‑on‑pay also approved (For 8,135,971; Against 134,861; Abstain 97,688) .

• Potential Risks/Red Flags

  • Significant stockholder influence: Tricor’s nomination rights and committee participation rights at ≥10% ownership can present perceived conflicts; Riley was designated by Tricor .
  • PMTS risk disclosures note potential conflicts where boards include directors nominated by significant stockholders, and trading dynamic risks from concentrated ownership .
  • Mandatory retirement age exception for Riley (age 74) requires continued Board vigilance on refreshment and succession planning .
  • Related‑party repurchase arrangements with Tricor, while Audit Committee‑approved, warrant ongoing scrutiny for fair dealing .

Say‑on‑Pay & Shareholder Feedback

Director Attendance & Engagement

• Board meetings: 10 in 2024; each director attended at least 75% of Board and committee meetings during their service .
• Executive sessions: Non‑employee directors meet regularly without management; Riley presides .
• Annual meeting attendance: Directors strongly encouraged to attend; the directors and one nominee attended the 2024 annual meeting .

Committee Structure & Consultant Independence (Context for Oversight Quality)

• Compensation Committee uses Willis Towers Watson (WTW) as independent consultant; the Committee concluded no conflicts of interest .
• Compensation Committee Interlocks: None; no related‑party transactions among members .

Related Party Transactions (Policy & Oversight)

• Related party transaction policy requires Audit Committee review and approval, including consideration of independence impacts and conflict risks .
• Registration rights and director nomination agreements govern Tricor’s rights; PMTS filed a shelf in 2021 for Tricor holdings .

Director Compensation Mix and Vesting Details

Shareholder Voting Results (2025 Election of Directors)

Conclusion

Riley’s role as independent Chair, strong governance credentials, and alignment mechanisms (RSUs/DSUs; hedging/pledging prohibitions) support board effectiveness and investor confidence . Continued monitoring is warranted for significant stockholder influence through Tricor’s nomination/transaction arrangements and the retirement age exception, balanced against robust Audit Committee oversight policies and high recent say‑on‑pay support .