Michael McCarthy
QuantumScapeAbout Michael McCarthy
Michael McCarthy is Chief Legal Officer (since 2013) and Head of Corporate Development (since 2018) at QuantumScape. He is 59, with a B.A. in Mathematical Economics from Colgate University and a J.D. from Vanderbilt University Law School; prior roles include senior legal leadership at Infinera and Ciena . Tenure at QS: ~12 years as CLO and ~7 years overseeing corporate development as of April 2025 . Company incentive structures during his tenure have emphasized performance equity (PSUs) and technical/operational milestones tied to prototype delivery and business objectives; in 2024, 11 of 14 annual plan goals were achieved, yielding a 125% bonus payout in RSUs for eligible NEOs .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Infinera Corporation | Chief Legal Officer, General Counsel, Chief Administrative Officer | 2003–2013 | Led legal and administrative functions for an optical networking company, supporting growth and operational scaling . |
| Ciena Corporation | Senior Vice President and General Counsel | 1997–2003 | Oversaw legal strategy at a network strategy and technology company during industry expansion . |
| QuantumScape | Chief Legal Officer; Head of Corporate Development | CLO since 2013; Corp Dev since 2018 | Built legal and governance infrastructure; led corporate development through technology milestones and leadership transitions . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | No external public company directorships disclosed for McCarthy in the proxy . |
Fixed Compensation
| Year | Salary ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|
| 2022 | 404,820 | — | 2,579,832 |
| 2023 | 429,308 | — | 4,875,352 |
| 2024 | 483,885 | 11,091 | 3,977,804 |
Notes:
- All Other Compensation includes group term life insurance, cell-phone reimbursement and/or financial planning fringe benefits .
- QS provides broad-based benefits (health, dental, vision, disability, HSA, life) and a 401(k) plan without company match; no SERP or other retirement benefits .
Performance Compensation
Annual Bonus (2024)
| Metric | Target ($) | Actual Payout | Payout Form | RSUs Granted (#) | RSU Fair Value ($) |
|---|---|---|---|---|---|
| 2024 Bonus Plan (14 goals; corporate milestones) | 241,943 | 125% of target | Fully vested RSUs | 62,572 | 302,425 |
- The bonus plan achieved 11 of 14 goals (3 by June 30 and 8 by Dec 31, 2024), leading to a 125% payout; interim payout occurred Aug 2024, final payout Feb 2025 .
- Target bonus dollars equate to roughly 50% of 2024 base salary (241,943 target vs. 483,885 salary) .
Equity Awards (2024 Refresh)
| Award | Approval Date | Grant Date | Shares (#) | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|
| RSU (Annual Refresh) | 4/5/2024 | 4/5/2024 | 265,920 | 1,590,202 | Equal quarterly over 4 years starting Aug 15, 2024 (service-based) . |
| PSU (Annual Refresh) | 4/5/2024 | 4/5/2024 | 265,920 (target/max) | — | Tied to four 2024 PSU Milestones (each 25%); vest on quarterly date post-certification; deadline by May 2027 . 25% vested in Feb 2025 after one milestone achievement . |
EPA Program (2021 Extraordinary Performance Award Program—waived)
| Component | Business Milestones (illustrative list) | Status at 12/31/2024 | Action |
|---|---|---|---|
| EPA Options (2021) | 11 ambitious business milestones (A/B sample delivery validation; multi-GWh deliveries; $5B/$10B GAAP revenue TTM; cumulative 500/1,000 GWh; adjusted EBITDA ≥25% over 4 quarters; 10%/20% world mkt share excl. China) | One business milestone achieved; no stock price targets achieved; no shares vested | NEOs (other than New CEO) irrevocably waived and forfeited EPA options in Feb 2025 for no consideration . McCarthy EPA options: 419,956 . |
Equity Ownership & Alignment
Beneficial Ownership (as of March 31, 2025)
| Holder | Class A Shares (#) | % of Class A | All Common Shares (#) | % of Total Vote |
|---|---|---|---|---|
| Michael McCarthy | 750,476 | <1% (*) | 750,476 | <1% (*) |
- Beneficial ownership calculations include options exercisable and RSUs vesting within 60 days of 3/31/2025 per SEC rules .
- Stock Ownership Guidelines: executives must hold ≥3x base salary; five-year phase-in; retain 50% of net shares until compliant. Company reports all executives are either compliant or in phase-in .
- Hedging & pledging prohibited; no margin holding allowed (derivatives, collars, exchange funds, short sales, pledging banned) .
Outstanding Equity at 12/31/2024
| Type | Grant Date | Status | Strike/Terms | Expiration | Unvested/Unearned (#) | Market/Value ($) |
|---|---|---|---|---|---|---|
| Stock Option | 6/5/2019 | Exercisable | $2.38 | 6/5/2029 | — | — |
| Stock Option (EPA) | 12/16/2021 | Unexercisable; forfeited Feb 2025 | $23.04 | 12/16/2031 | — | — |
| RSU | 3/3/2022 | Unvested | Service-based | — | 52,244 | 271,146 |
| RSU | 1/24/2023 | Unvested | Service-based | — | 94,985 | 492,972 |
| RSU (Refresh) | 4/6/2023 | Unvested | Service-based | — | 83,925 | 435,571 |
| RSU (Refresh) | 4/5/2024 | Unvested | Service-based | — | 232,680 | 1,207,609 |
| PSU | 1/24/2023 | Unearned | Milestone-based | — | 113,982 | 591,567 |
| PSU (Refresh) | 4/6/2023 | Unearned | Milestone-based | — | 25,177 | 130,669 |
| PSU (Refresh) | 4/5/2024 | Unearned | Milestone-based | — | 265,920 | 1,380,125 |
- RSUs vest quarterly over 4 years starting Aug 15, 2024 for refresh awards; PSUs vest 25% per milestone upon certification, with deadline May 2027; 25% of 2024 PSUs vested in Feb 2025 after one milestone achievement .
Trading Activity and Sell Pressure Indicators (2024)
| Activity | Shares (#) | Value ($) |
|---|---|---|
| Options exercised | 947,037 | 4,210,486 |
| RSUs/PSUs vested | 261,325 | 1,545,082 |
- The realized value on option exercises and vesting indicates substantial monetization in 2024; ongoing quarterly RSU vesting from 2023–2024 grants may add mechanical sell pressure absent retention requirements beyond ownership guidelines .
Employment Terms
Change-in-Control & Severance Program (CIC Agreements)
- Term: initial 3 years; auto-renew for 1-year periods unless notice 90 days prior; at-will employment; release required to receive benefits .
- Clawback Policy adopted Oct 2023; covers erroneously awarded incentive comp tied to restatements, fraud, or misconduct materially injurious to business reputation .
- No golden parachute tax gross-ups; payments optimized for best after-tax outcome (cap or full) but no reimbursement .
Potential Payments (Assuming Termination on Dec 31, 2024)
| Scenario | Salary Severance ($) | Bonus Severance ($) | Health Coverage ($) | Accelerated Vesting ($) |
|---|---|---|---|---|
| Termination without cause or resignation for good reason (outside CIC period) | 244,500 | 151,212 (committee discretion) | 19,246 | — |
| Double-trigger CIC (termination in CIC period) | 489,000 | 302,425 (100% target bonus) | 38,491 | 4,509,658 (based on $5.19/share) |
- Outside CIC: 6 months salary, up to 50% potential bonus at committee discretion, up to 6 months COBRA; no acceleration .
- CIC: lump-sum 12 months salary, 100% target bonus, up to 12 months COBRA, 100% acceleration .
- Accelerated vesting value calculated at $5.19 share price and unvested share counts per outstanding awards table .
Performance & Track Record
- 2024 Annual Plan achieved 11/14 operational goals, underpinning RSU-delivered bonus payout at 125% of target for McCarthy and other NEOs, indicating tangible technical/prototype progress across the year .
- EPA Program: one business milestone achieved but no stock price targets; no shares vested under the EPA as of year-end 2024; NEOs waived EPA options in Feb 2025, removing a large overhang of high-strike options .
Company financial trajectory (context):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | 0* | 0* | 0* |
| EBITDA ($USD) | (–) * | (–) * | (–) * |
Values retrieved from S&P Global.*
Compensation Structure Observations
- Equity-heavy, at-risk compensation: 2024 refresh awards for McCarthy were 50% PSUs and 50% RSUs, consistent with QS’s emphasis on milestone-based value creation and retention .
- Annual bonus delivered in equity: 2024 bonus paid entirely in fully vested RSUs, creating near-term liquidity and potential selling pressure; target dollars ~50% of salary; payout 125% for 2024 .
- Shift away from options: EPA stock options granted in 2021 were forfeited in 2025; QS generally does not grant new options; favors RSUs/PSUs—lower risk profile versus options for executives .
Risk Indicators & Governance
- Hedging/pledging prohibited; ownership guidelines require ≥3x salary for executives; committee monitors compliance or phase-in .
- Clawback policy compliant with exchange rules; covers restatements and misconduct .
- Double-trigger CIC only; no single-trigger; no tax gross-ups .
Investment Implications
- Alignment and retention: Quarterly RSU vesting across 2023–2024 grants plus milestone PSU design tie compensation to execution; double-trigger CIC and clawback strengthen governance. However, fully vested RSU bonus payouts and significant 2024 option exercises point to potential near-term selling pressure from mechanical vesting/liquidity needs .
- Incentive quality: PSU milestones are challenging and technical, with one achieved by year-end 2024; continued vesting requires sustained progress through May 2027—providing medium-term execution incentives .
- Overhang reduction: 2025 waiver of EPA options removes high-strike option overhang and potential misalignment, simplifying the incentive stack to RSUs/PSUs more tightly linked to milestones and stockholder outcomes .
- Severance economics: 1x salary and 1x target bonus with 100% acceleration in CIC scenarios create moderate retention costs and could influence negotiation dynamics in strategic transactions; outside CIC, limited cash severance and no acceleration reduce departure windfalls .