Luis Zavala
Polar PowerAbout Luis Zavala
Luis Zavala (age 56) is Polar Power’s Chief Financial Officer, serving since April 2018 after prior roles as Acting CFO (Mar 2016–Mar 2018) and VP Finance (Aug 2009–Apr 2018). He holds a BA in Business Administration from California State University Northridge and an MBA from Keller Graduate School of Management, Long Beach . Company performance during his tenure has been challenged: revenues declined and EBITDA remained negative over FY 2022–2024 (see table), which constrains bonus attainment under Polar’s pay-for-performance framework.*
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | $16,056,000* | $15,293,000* | $13,970,000* |
| EBITDA ($USD) | $(5,026,000)* | $(5,603,000)* | $(4,208,000)* |
*Values retrieved from S&P Global.
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Polar Power, Inc. | Chief Financial Officer | Apr 2018–present | Finance leadership through downcycle; SOX certifications |
| Polar Power, Inc. | Acting CFO | Mar 2016–Mar 2018 | Transitional finance oversight |
| Polar Power, Inc. | Vice President Finance | Aug 2009–Apr 2018 | Built finance function; supported public company processes |
| Sky Limited Enterprises | President | Jun 2006–Aug 2009 | General contracting leadership |
| Legacy Long Distance International | Director of Finance | Mar 2001–May 2006 | Telecom finance operations |
Fixed Compensation
Polar’s program combines base salary with annual cash incentives tied to company performance and long-term equity (options) .
| Component | 2023 | 2024 |
|---|---|---|
| Base Salary ($000) | $175 | $178 |
| Target Bonus (% of base) | Up to 100% | Up to 100% |
| Actual Bonus Paid ($) | Not disclosed | Not disclosed |
- Current base salary (effective November 1, 2024): $200,000 .
Performance Compensation
Annual bonus potential up to 100% of base salary, driven by five performance elements with defined minimum/target/max payout bands. 2024 actuals fell short across most elements, which would have reduced or eliminated payouts if thresholds were not met; the proxy did not disclose actual bonus awards .
| Metric | Minimum Payout (% of base) | Target (% of base) | Max (% of base) | 2024 Actual | Payout (2024) | Vesting |
|---|---|---|---|---|---|---|
| Revenue | 20% | 25% | 30% | $13.9m | Not disclosed | N/A |
| Gross Margin (% of revenue) | 5% | 10% | 15% | 9.4% | Not disclosed | N/A |
| EBITDA (% of revenue) | 5% | 10% | 15% | (26.6%) | Not disclosed | N/A |
| Customer Concentration (% of sales) | 8% | 15% | 23% | 48% | Not disclosed | N/A |
| International Sales (% of sales) | 7% | 12% | 17% | 13% | Not disclosed | N/A |
| Total potential | 50% | 75% | 100% | — | — | — |
- No equity grants to NEOs in 2024; long-term incentives are stock options under the 2016 Plan; 2026 Plan proposed for future awards .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 12,592 shares (includes options) |
| Ownership as % of outstanding | Less than 1% |
| Options outstanding | 4,286 shares, strike $5.09, expires 4/2/2028; vested 4/2/2019 |
| RSUs/PSUs | None disclosed for Zavala |
| Vested vs unvested | Options shown are exercisable; no unvested awards disclosed |
| Hedging/Pledging | Prohibited for executives and employees (alignment policy) |
| Ownership guidelines | Not disclosed |
Insider trading activity (Form 4 references):
- Aug 22, 2022: Award of 10,770 adjusted shares (grant) .
- Apr 2, 2018: Grant of 90,000 pre-split options/shares (grant) .
Employment Terms
| Provision | Terms |
|---|---|
| Employment agreement | Executive Employment Agreement dated July 8, 2016 (at-will) |
| Severance (without cause / good reason / disability) | Lump sum equal to 50% of then-current base salary; health coverage for 6 months |
| Change-in-control economics | If terminated without cause or resigns for good reason within 3 months before or 12 months after a change in control: 50% base salary + 6 months health coverage (double-trigger window) |
| Equity acceleration | All executive officers’ unvested equity grants accelerate upon any change in control |
| Clawback | CEO/CFO may be legally required to reimburse incentive/equity compensation upon a misconduct-driven restatement |
| Non-compete / Non-solicit / Garden leave | Not disclosed |
Performance & Track Record
- 2024 operational results missed bonus plan thresholds: revenue $13.9m vs minimum $30m, gross margin 9.4% vs minimum 31%, EBITDA margin (26.6%) vs minimum 5%, customer concentration 48%, international sales 13% .
- Auditor cited substantial doubt about going concern in the 2025 10-K, highlighting balance-sheet/ liquidity pressure affecting management incentives and retention risk .
- SOX certifications signed by Zavala as CFO across 2024–2025 filings (leadership accountability) .
Compensation Committee Analysis
- Compensation Committee members: Michael G. Field (Chair) and Keith Albrecht; both independent and non-employee directors .
- Committee held one meeting in 2024; oversees pay philosophy (cash incentives + long-vesting options, no repricing), prohibits hedging/pledging, and provides for equity acceleration on change in control .
- 2026 Equity Incentive Plan proposes flexible awards (options, RSUs, PSUs, SARs), 750,000 shares reserve, with change-in-control discretion to accelerate/assume/cash-out awards .
Investment Implications
- Pay-for-performance design is robust, but 2024 underperformance and going-concern risk imply low/zero cash bonus outcomes and reliance on long-term equity; retention risk for the CFO is moderated by modest severance (0.5x salary) yet heightened by weak fundamentals .
- Alignment: Ownership <1% with fully vested, out-of-the-money options (strike $5.09) limits near-term intrinsic value; hedging/pledging bans and change-in-control equity acceleration preserve alignment but could create sale-contingent payout optics .
- Trading signals: Absence of recent insider sales, last insider activity was awards (2018, 2022), reducing near-term selling pressure, but liquidity posture and customer concentration warrant caution .