Walter Michalec
About Walter Michalec
Walter Michalec is Chief Financial Officer, Secretary and Treasurer of Pioneer Power Solutions (PPSI), appointed interim CFO on April 15, 2020 and named CFO effective May 16, 2021. He holds a B.S. in Accounting with a minor in Criminal Justice from Kean University (2011), and previously worked as a public accountant at Mendonca & Partners CPA, LLC before progressing through finance roles at PPSI (senior accountant → operations controller → corporate controller) . Company performance during his tenure shows sharp improvement in 2024 with net income of $31.855M alongside cumulative TSR value of $72.96 on an initial $100 investment by year-end 2024, following $90.53 in 2023 and $35.73 in 2022 . His role includes principal accounting and principal financial officer responsibilities, as reflected in his SOX certifications on recent 10-Qs .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pioneer Power Solutions | Senior Accountant | May 2012–Feb 2016 | Built internal financial reporting foundation (role progression) |
| Pioneer Power Solutions | Operations Controller | Mar 2016–Aug 2019 | Operational finance leadership |
| Pioneer Power Solutions | Corporate Controller | Aug 2019–Apr 2020 | Elevated to corporate controller; pathway to CFO |
| Pioneer Power Solutions | Interim CFO | Apr 15, 2020–May 16, 2021 | Maintained continuity after prior CFO resignation |
| Pioneer Power Solutions | CFO, Secretary, Treasurer (also PFO & PAO) | May 16, 2021–Present | Executive finance leadership |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mendonca & Partners Certified Public Accountants, LLC | Public Accountant | Prior to May 2012 | Public accounting experience supporting technical finance capability |
Fixed Compensation
| Component | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|
| Base Salary ($) | $220,000 | $300,000 | $325,000 | $350,000 |
| Bonus Paid ($) | $31,000 | $164,000 | — | — |
| Stock Awards ($, grant-date fair value) | — | $296,000 | — | — |
Notes:
- Salary schedule was set by a first amendment on Dec 26, 2023 extending the employment term to Dec 31, 2026 and adjusting annual base salaries for 2024–2026 .
- The proxy’s Summary Compensation Table shows 2024 CFO total compensation of $760,000 (salary $300,000; bonus $164,000; stock awards $296,000) and 2023 total of $251,000 .
Performance Compensation
Annual Cash Bonus
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Not disclosed | — | Not disclosed | Company awarded $31,000 (2023), $164,000 (2024) | Cash | Immediate |
No specific quantitative bonus performance metrics (revenue, EBITDA, TSR) are disclosed for CFO bonuses in the proxy .
RSU Awards (Time-Based)
| Grant/Agreement | Shares | Vesting Schedule | Conversion | Notes |
|---|---|---|---|---|
| RSU Award under 2021 Plan (effective Apr 25, 2022) | 375,000 | Three equal installments on May 1 of 2022, 2023, 2024 | Vested RSUs converted into common shares (conversion per plan) | Company paid $481,220 in income/payroll tax on vesting; reimbursed via payroll withholding and share surrender; future withholding may be satisfied by share withholding under amended plan |
Option Awards
| Grant Date | Securities Underlying Options | Exercisable | Strike ($) | Expiration | Vesting |
|---|---|---|---|---|---|
| 5/13/2021 | 43,000 | 43,000 | 1.81 (adjusted after special cash dividend) | 5/13/2031 | Vests on first anniversary of grant date (executive officer) |
- There were no unvested stock option awards held by named executive officers as of Dec 31, 2024 .
- CFO exercised options to purchase 25,000 shares during 2024 (aggregate exercise price $66,030) .
Pay Versus Performance (Company-Level Alignment Indicators)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (Loss) ($) | (5,419,000) | (1,898,000) | 31,855,000 |
| Value of Initial Fixed $100 Investment (TSR) | $35.73 | $90.53 | $72.96 |
Equity Ownership & Alignment
| Ownership Detail | 2024 (Record date: Oct 15, 2024) | 2025 (Record date: Sept 19, 2025) |
|---|---|---|
| Shares Beneficially Owned | 313,740 | 318,000 |
| % of Shares Outstanding | 2.9% (10,917,038 outstanding) | 2.9% (11,095,266 outstanding) |
| Unvested Stock Awards (Units) | 125,000 units at 12/31/2023 | 50,000 units at 12/31/2024 |
| Equity Incentive Plan Awards (Unvested) | 125,000 units ($848,750) | 50,000 units ($296,000) |
| Options Exercisable/Unexercisable | 55,000/— at 12/31/2023 | 43,000/— at 12/31/2024 |
| Shares Pledged as Collateral | Not disclosed (no pledging referenced) |
Tax withholding share surrenders (reduces outstanding shares, not open-market sales):
- 72,719 shares surrendered and cancelled on Sept 20, 2023 to reimburse taxes on RSU vesting .
- 57,541 shares surrendered on June 7, 2024 (fair value $223,259) .
- 4,740 shares surrendered on Oct 22, 2024 (fair value $29,151) .
- 25,000 shares surrendered on May 2, 2025 (fair value $148,000) .
Employment Terms
| Item | Detail |
|---|---|
| CFO Appointment | Interim CFO effective Apr 15, 2020; CFO title effective May 16, 2021; also PFO, PAO, Treasurer, Secretary |
| Employment Agreement | Executed Apr 25, 2022; 3-year term from Jan 1, 2022 to Dec 31, 2024 |
| Amendment | Dec 26, 2023: extended termination date to Dec 31, 2026 and reset base salaries (2024: $300k; 2025: $325k; 2026: $350k) |
| Severance | If terminated without cause, severance equals base salary for remainder of the employment period |
| Change-of-Control | No separate change-of-control or severance agreements beyond the employment terms; unexercised options expire after a specified time upon termination |
| Clawback | Clawback Policy adopted Nov 9, 2023 (Exhibit 97.1 to Annual Report) |
| Compensation Committee | Established Jan 18, 2022; no compensation consultants retained for 2023; committee administers 2021 LTIP |
| Equity Plan Mechanics | 2021 Plan permits withholding of shares to satisfy tax obligations (amended Sept 20, 2023) |
Company Financial Performance Context
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 25,878,000 | 11,116,000 | 22,879,000 |
| EBITDA ($) | -5,344,000* | -6,314,000* | -4,403,000* |
| Net Income - (IS) ($) | -5,419,000* | -1,898,000* | 31,855,000 |
Values retrieved from S&P Global. Asterisks indicate tool values without document citations.
Investment Implications
- Compensation alignment: CFO’s pay mix shifted toward equity in 2024 (stock awards $296k with RSU vesting) while bonuses rose to $164k; however, no disclosed performance metrics for the annual bonus suggest a more discretionary structure than formulaic pay-for-performance .
- Retention risk: Extended employment term through 2026, salary step-ups, and severance equal to remaining base salary if terminated without cause reduce near-term turnover risk .
- Insider selling pressure: Share surrenders for tax withholding in 2023–2025 were cancellations by the company, not market sales, limiting near-term selling pressure; 25,000 options were exercised in 2024, but no sale disclosure accompanies that exercise .
- Alignment and skin-in-the-game: Beneficial ownership at ~2.9% (318,000 shares; 11,095,266 outstanding) suggests meaningful alignment for a micro-cap issuer, with no pledging disclosed; unvested equity dropped to 50,000 units by year-end 2024 .
- Governance and downside protection: No standalone change-of-control arrangements and a 2023 clawback policy mitigate compensation risk, while the 2021 Plan’s withholding mechanics standardize tax handling of equity .
- Performance backdrop: Net income surged in 2024 while TSR retraced from 2023 levels, informing the context around equity award realizations and future bonus decisions .