Robert DeMartini
About Robert DeMartini
Robert T. DeMartini (age 63) has served as Purple Innovation’s CEO since March 1, 2022 (interim CEO from Dec 13, 2021 to Feb 28, 2022) and as a director; he holds a B.S. in Finance from San Diego State University and previously led New Balance and USA Cycling with earlier leadership roles at Procter & Gamble, Gillette and Tyson Foods . Under his tenure, 2024 net revenues declined 4.4% to $487.9M, but gross margin improved to 37.1% (from 33.7%); net loss narrowed to $97.9M; Adjusted EBITDA was -$20.8M, and no annual bonus paid given thresholds were missed . Cumulative shareholder return from a hypothetical $100 investment since 12/31/2019 equaled $8.96 in 2024 versus peer group $73.64, underscoring severe long-term underperformance; Net Income in 2024 was -$97.9M and Adjusted EBITDA -$20.8M . He beneficially owns 1,379,514 shares (1.3% of outstanding), including 500,000 options exercisable within 60 days, aligning incentives but also creating potential option-exercise windows .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Purple Innovation (PRPL) | Acting CEO; CEO; Director | Acting: Dec 13, 2021–Feb 28, 2022; CEO since Mar 1, 2022 | Executive leadership of turnaround and strategy execution (as disclosed) |
| USA Cycling, Inc. | President & CEO | 2019–2021 | National governing body leadership |
| New Balance Athletic Shoes (U.K.) Ltd. | President & CEO | 2018–2019 | Business unit leadership (private company) |
| New Balance Athletics, Inc. | President & CEO | 2007–2018 | Executive leadership of private consumer brand |
| Procter & Gamble / The Gillette Company / Tyson Foods | Various leadership roles | 1982–2007 | Consumer/CPG and operations leadership |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Welch’s Foods Inc. | Director; Compensation Committee; Nominating & Governance Committee | Current | Private company board service with committee roles |
| Q30 Innovations / Q30 Sports Canada | Director | Current | Private company board service |
| American Functional Fabrics of America | Director | Former | Public-private partnership (prior service) |
| American Apparel & Footwear Association | Director | Former | Trade association (prior service) |
| Aloha | Director | Former | Private company (prior service) |
Fixed Compensation
| Component | 2024 | Notes |
|---|---|---|
| Base Salary | $725,000 (effective Mar 19, 2024; prior $680,000) | Increased via January 26, 2024 amendment to employment agreement |
| Target Bonus % (STIP) | 100% of base salary | CEO STIP target; metrics equally weighted Net Revenue and Bonus Adjusted EBITDA |
| Actual 2024 STIP Payout | 0% | Neither threshold met; Bonus Adjusted EBITDA threshold required for any payout |
| Special Recognition Retention Bonus | $850,000 total; 10% paid Aug 1, 2024; 20% paid Feb 1, 2025; 70% due Aug 1, 2025 (continued employment required; clawback if certain separations before Jun 30, 2026) | Board-approved Jan 26, 2024; retention-focused cash |
| 2026 CEO VWAP Cash Award | Up to $5,000,000 based on VWAP from Mar 16–Jun 30, 2026; pays 0–100% on a sliding scale (10% at $2.50; 20% at $3.50; 40% at $4.50; 60% at $5.50; 80% at $6.50; 100% at $7.50); paid quarterly beginning after Jun 30, 2026, if employed | Added Jan 26, 2024 amendment |
Performance Compensation
2024 Annual Incentive (STIP)
| Metric | Weight | Threshold | Target | Stretch | Maximum | 2024 Actual | Payout |
|---|---|---|---|---|---|---|---|
| Net Revenue ($M) | 50% | $550.0 | $600.0 | $700.0 | $800.0 | $487.9 | 0% |
| Bonus Adjusted EBITDA ($M) | 50% | $5.1 | $8.5 | $24.6 | $43.5 | $(19.6) | 0% (threshold gating) |
Result: No STIP payout for CEO and NEOs for 2024 .
Long-Term Incentives (LTIP) – 2024 design and CEO grants
| Award Type | Grant Date | Units/$ | Vesting | Performance Conditions |
|---|---|---|---|---|
| RSUs (time-based) | Jun 20, 2024 | 169,585 RSUs (CEO) | 1/3 each Mar 31, 2025, 2026, 2027 | Time-based vesting only; no votes/dividends pre-delivery |
| Performance-Based Long-Term Cash | 2024 cycle | $314,983 (CEO target allocation) | Cliff at Mar 31, 2027 (based on 60-day VWAP) | Payout 0–200% depending on stock price: <$2.50=0%; $2.50=10%; $3.45=25%; $3.97=50%; $4.56=75%; $5.25=100%; $6.56=150%; $8.20=200% |
| Prior-cycle PSUs (equity) | Jun 20, 2023 | 314,943 target PSUs (CEO outstanding at 12/31/24) | Cliff on Mar 15, 2026 | 60-day VWAP price hurdles; 0–100% earned |
Notes:
- 2024 LTIP mix shifted to 20% RSUs / 80% performance cash to manage burn rate at a low share price; PSUs remain for certain awards (e.g., inducement grants for other NEOs) .
- 2024 CEO RSU grant fair value: $214,654; no stock options granted in 2024 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 1,379,514 shares (1.3% of outstanding) |
| Breakdown | 879,514 Class A shares plus 500,000 options exercisable within 60 days |
| Vested vs Unvested (selected) | Options exercisable: 111,470 (3/24/2027 exp., $6.82), 93,530 (5/25/2027, $6.82), 128,333 vested of a larger grant; 166,667 options unexercisable at 12/31/24 |
| Unvested RSUs (CEO) | 166,667 (2022 grant), 113,057 (2023 grant), 241,157 (2024 grant); market values at 12/31/24 were shown using $0.79 stock price for calculation (e.g., $131,667; $86,315; $190,514 respectively) |
| Unvested PSUs (CEO) | 314,943 (2023 grant), market value $248,805 at 12/31/24 reference price $0.79 |
| Ownership Guidelines | CEO: 5x base salary; must hold until compliant; all NEOs progressing toward compliance as of 12/31/24 (valued on 20-day VWAP) |
| Hedging/Pledging | Short sales and pledging prohibited; hedging discouraged and requires pre-clearance |
Vesting/calendar overhang (potential selling pressure windows):
- RSUs: Mar 31, 2025/2026/2027 vest dates for 2024 grant; earlier grants include Mar 25, 2025 tranche from 2022 grant .
- PSUs/Performance Cash: 2023 PSUs measure and cliff-vest Mar 15, 2026; 2024 Performance Cash measures on Mar 31, 2027 with 0–200% payout scale .
Employment Terms
- Employment agreement (amended and restated Mar 19, 2022) with Jan 26, 2024 amendment: base salary $725,000; annual bonus target 100% of base; initial 2022 equity of 500,000 RSUs and 500,000 options vesting over three years; ongoing LTIP value targeted at $1.5M per year starting 2023; expense reimbursement customary .
- Severance (non–change-in-control): 12 months base salary in installments; prior-year earned bonus (if any); pro-rata vesting of time-vested equity through termination date; 12 months COBRA (release required) .
- Severance (change-in-control period = 6 months before to 12 months after): 18 months base salary; prior-year earned bonus (if any); full acceleration of time-based equity; 18 months COBRA (release required) .
- Retirement treatment: 12 months continued vesting on RSUs; pro-rata vesting on PSUs, subject to performance .
- Clawback: Policy compliant with Nasdaq 5608; recoupment for restatements and specified misconduct .
- Non-compete / non-solicit, confidentiality, IP assignment included (durations not disclosed) .
Board Governance
- Roles: DeMartini serves as CEO and director; Board Chair is Adam Gray; Lead Independent Director is Gary DiCamillo, preserving separation of Chair/CEO roles and mitigating dual-role concentration risk .
- Committees: CEO is not on standing committees; Audit (Chair: Pate; members: DiCamillo, Darling); Human Capital & Compensation (Chair: Hollingsworth; members: Darling, Pate, Serow); Nomination & Governance (Chair: DiCamillo; members: Serow, Hollingsworth) .
- Independence: Board deems listed non-employee directors independent; CEO not independent .
- Attendance: Board held 12 meetings in 2024; each current director attended at least 87.5% of Board/committee meetings; all eight current directors attended the 2024 annual and special meetings .
Director Compensation (Context for dual-role)
- Non-employee retainers (cash-only): Chair $225,000; Lead Independent Director $195,000; other directors $175,000; committee chair premiums: Audit $15,000; HCCC $15,000; N&G $10,000; special committee monthly fees ($20,000 chair; $15,000 members) .
Performance & Track Record
| Metric | 2023 | 2024 | Notes |
|---|---|---|---|
| Net Revenues ($M) | $510.5 | $487.9 | -4.4% YoY; wholesale exits and demand softness; Purple showroom net revenues +5.8% |
| Gross Margin % | 33.7% | 37.1% | +340 bps on operational improvements; partially offset by restructuring charges |
| Net Loss ($M) | $(120.8) | $(97.9) | Improvement YoY |
| Adjusted EBITDA ($M) | $(54.7) | $(20.8) | Defined; reconciled; Bonus Adjusted EBITDA used for STIP was $(19.6) |
| TSR (Value of $100 since 12/31/2019) | $11.83 (2023) | $8.96 (2024) | Versus peer group $73.64 (2024) |
Notable governance/compensation signals:
- Say-on-pay support “over 98%” in 2024 meeting, indicating investor tolerance for design changes amidst turnaround .
- 2024 STIP paid 0% companywide for NEOs, reinforcing pay-for-performance discipline; 2024 LTIP shifted to performance cash to preserve equity pool at low share price .
Compensation Structure Analysis
- Year-over-year changes: CEO base increased to $725k; 2024 special recognition bonus ($850k) and a separate 2026 stock-price-tied cash opportunity (up to $5M) add guaranteed/near-guaranteed cash components contingent on service and stock price, partly offsetting no 2024 STIP .
- At-risk mix: STIP metrics (Net Revenue, Bonus Adjusted EBITDA) and LTIP price hurdles support alignment; however, multi-year stock underperformance (TSR) suggests realizable value depends on significant recovery .
- Policy hygiene: Clawback in place; no excise tax gross-ups; option/SAR repricing prohibited without shareholder approval; hedging discouraged and pledging/short sales prohibited .
Compensation Peer Group (Benchmarking)
- 2025 peer group refreshed to 16 companies with median revenues ~$617.8M and median market cap ~$331.0M (e.g., Bassett Furniture, Canada Goose, Culp, FIGS, Haverty, Kirkland’s, etc.), aiming for closer size/industry fit; philosophy targets market-median with potential above-50th percentile for strong performance .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval: over 98% of votes cast supported the program; annual advisory vote cadence maintained .
Risk Indicators & Red Flags
- Leadership churn: Chief Legal Officer and Chief Marketing Officer departed in March 2025, elevating broader team retention risk despite retention bonuses; CEO remains .
- High concentration shareholder/board influence: Coliseum beneficially owns ~49.6% (including warrants) with its designee as Board Chair, relevant for governance dynamics; CEO is not Chair .
Investment Implications
- Alignment and retention: CEO holds 1.38M beneficial shares (incl. 500k near-term exercisable options) and faces multi-year price hurdles on significant LTIP components; 2024 zero STIP payout and anti-hedge/pledge policy reinforce alignment, but new retention-heavy cash features (special bonus, 2026 VWAP award) partly de-risk compensation and may dilute pay-for-performance optics if stock remains depressed .
- Execution vs payout gates: With 2024 Bonus Adjusted EBITDA and revenue missing even thresholds, forward cash and equity realizability hinges on sustained margin and demand recovery; vesting cliffs in 2026–2027 and RSU tranches in 2025–2027 create potential supply overhang windows if performance improves and windows open .
- Governance structure: Separation of Chair and CEO and strong committee independence are positives; say-on-pay >98% indicates current investor support despite TSR underperformance .
- Risk-reward: Operational metrics improved in 2024 (gross margin, narrower losses), but TSR remains severely impaired; incentive design is stock-price centric—creating a potentially significant upside payoff for management on recovery, which may also serve as a trading signal around price thresholds/dates disclosed in the LTIP .
All information above is drawn directly from PRPL’s 2025 DEF 14A (filed Apr 18, 2025) and its embedded 2024 performance and compensation disclosures. Citations provided inline.