Jeffrey M. Thompson
Red Cat HoldingsAbout Jeffrey M. Thompson
Jeffrey M. Thompson is President, Chief Executive Officer, and Director of Red Cat Holdings, Inc. (RCAT), age 60, serving as CEO since May 15, 2019; he holds a B.S. from the University of Massachusetts and previously founded Towerstream (Nasdaq:TWER) and EdgeNet/eFortress . Under SEC pay-versus-performance disclosures, the value of a $100 investment in RCAT was $50 in FY 2022, $22 in FY 2023, $38 in FY 2024, and $633 during the Transition Period ended December 31, 2024, indicating high stock-price sensitivity in the transition window . The Compensation Committee sets CEO goals and pay in executive session, guided by peer data from FW Cook and independent committee oversight .
Key performance data
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | $6,428,963* | $4,620,834* | $7,275,456* |
| EBITDA ($USD) | $(12,737,483)* | $(22,544,838)* | $(36,503,112)* |
| Note: Values retrieved from S&P Global.* |
Citations: Revenues and EBITDA via S&P Global; see note above.
Pay versus performance (PEO)
| Period | Value of $100 Investment (TSR) | PEO Compensation Actually Paid ($) |
|---|---|---|
| FY 2022 | $50 | $408,933 |
| FY 2023 | $22 | $826,352 |
| FY 2024 | $38 | $2,337,134 |
| Transition Period (8 months to 12/31/2024) | $633 | $9,353,479 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Towerstream Corporation (Nasdaq:TWER) | Founder; President, CEO, Director | Nov 2005–Feb 2016 | Built fixed-wireless alternative internet access business; public-company leadership |
| EdgeNet Inc. / eFortress | Founder; built/sold ISP | 1994–1999; sold to Citadel in 1997 | Created ISP sold to Citadel; continued as eFortress through 1999 |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Unusual Machines, Inc. (NYSE American: UMAC) | Co-Founder; Director | Since July 2019 | Ongoing board service; governance and industry exposure |
Fixed Compensation
| Component | Terms | FY 2024 Actual |
|---|---|---|
| Base Salary | $300,000; increased from $248,000 on Apr 29, 2022 | $300,000 |
| Target Bonus | Up to 200% of base; goals set by Compensation Committee | N/A (target %) |
| Annual Bonus Paid | Discretionary/performance-based | $155,600 (FY 2024); $100,000 (Transition Period) |
| Director Fees | None (CEO receives no director compensation) | $0 |
Performance Compensation
Annual Bonus Framework
| Metric/Provision | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|
| Incentive Criteria for maximum bonus eligibility | N/A | Market cap ≥ $500M AND share price ≥ $6.00 for 60 consecutive days on a national exchange | If achieved, CEO is entitled to receive maximum annual bonus and may elect stock payment at 30-day VWAP at payout date | Cash or common stock election at VWAP; determined annually |
Option Awards (Outstanding at 12/31/2024)
| Grant Date | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration | Vesting Schedule |
|---|---|---|---|---|---|
| 3/31/2021 | 25,316 | — | 3.95 | 3/31/2031 | Fully vested at grant |
| 5/15/2023 | — | 833,334 | 1.06 | 5/15/2033 | Vests in equal installments on May 15, 2025 and May 15, 2026 |
Equity Plan Context
| Plan | Outstanding Rights to be Issued | Weighted-Average Option Exercise Price | Shares Available for Future Grants |
|---|---|---|---|
| Equity compensation plans approved by security holders (as of 12/31/2024) | 6,786,335 (options + RSUs) | $1.45 (options only) | 9,580,000 |
Pay Versus Performance (Context and Valuation Methods)
- Equity awards under ASC 718; Black-Scholes used for options valuation .
- CAP recognizes changes in fair value during each fiscal year; higher stock price increases CAP .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 12,493,480 shares; 13.8% of total voting power (out of 90,514,996 shares outstanding as of 4/21/2025) |
| Components (footnote) | 12,648,163 common shares plus 25,317 options (footnote to beneficial ownership table) |
| Exercisable vs Unexercisable Options | 25,316 exercisable (3/31/2021 grant); 833,334 unexercisable (vest in 2025 and 2026) |
| Hedging/Pledging | Company policy prohibits hedging and pledging transactions in Company securities; short sales prohibited |
| Ownership Guidelines | Not disclosed |
| Clawback Policy | Restatement-triggered clawback for bonus and stock-based compensation |
Employment Terms
| Term | Provision |
|---|---|
| Employment Agreement Start | March 31, 2021; initial one-year term with auto-renew unless notice 3 months prior to expiration |
| Current Term | Extended effective May 16, 2023 through May 10, 2026; auto-renewal for successive one-year terms unless timely notice |
| Base Salary | $300,000 (effective Apr 29, 2022) |
| Bonus Eligibility | Up to 200% of base; goals set by Compensation Committee; maximum bonus if Incentive Criteria achieved |
| Stock-in-Lieu Elections | If Incentive Criteria achieved, may elect to receive salary and/or bonus in Company stock at 30-day VWAP |
| Severance (No Cause / Good Reason) | 24 months base salary; Company-paid health and welfare benefits for at least 12 months; immediate vesting of all equity awards |
| Change-in-Control | If termination occurs within 180 days after change in control, severance applies; equity awards vest immediately |
| Potential Payments (as of 12/31/2024) | Base salary $600,000; healthcare $15,418; equity acceleration $9,825,008; total $10,440,426 |
Board Governance
- Thompson is a director but not independent under Nasdaq rules due to his CEO role .
- Board committees are entirely independent:
- Audit Committee: Christopher Moe (Chair), Nicholas Liuzza, General Paul E. Funk II, Joseph Freedman; Moe is Audit Committee Financial Expert .
- Compensation Committee: Nicholas Liuzza (Chair), General Paul E. Funk II, Christopher Moe; CEO compensation set in executive session; FW Cook retained as independent consultant; no conflicts found .
- Nominating & Governance Committee: General Paul E. Funk II (Chair), Joseph Freedman, Christopher Moe .
- Board activity and attendance: Board held one meeting in the Transition Year Ended 2024; all directors attended at least 75% of meetings and applicable committees; 4 directors attended the 2024 Annual Meeting of Stockholders .
- Director compensation: Non-employee directors receive $125,000 annually ($50,000 cash, $75,000 equity); committee chairs receive $20,000 (Audit), $10,000 (Compensation), $10,000 (Nominating); Lead Director receives $25,000; tax gross-ups applied to certain director equity award taxes .
- Dual-role implications: As CEO and director, Thompson participates on the Board but does not sit on key committees, mitigating direct influence over his own pay; independence standards place compensation decisions with independent directors .
Director Compensation (for context)
- Thompson receives no additional compensation for director service; his compensation is reported solely as an employee/CEO .
Performance & Track Record
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | $6,428,963* | $4,620,834* | $7,275,456* |
| EBITDA ($USD) | $(12,737,483)* | $(22,544,838)* | $(36,503,112)* |
| Note: Values retrieved from S&P Global.* |
Citations: Revenues and EBITDA via S&P Global; see note above.
- CEO tenure since May 2019; prior founding/operator roles in telecom and ISP businesses suggest execution experience in scaling and public-company governance .
- TSR proxy measure demonstrates extreme sensitivity during the transition period, suggesting significant equity-linked compensation value variability .
Compensation Committee Analysis
- Committee members: Liuzza (Chair), Funk, Moe—all independent .
- Process: CEO compensation set in executive session based on annual performance evaluation, company goals, and competitive market data; FW Cook engaged as an independent advisor; no consultant conflicts .
- Frequency: One meeting and seven written consents during the Transition Year Ended 2024 .
Equity Award Detail (Thompson)
| Grant Date | Type | Quantity | Exercise Price ($) | Expiration | Vesting |
|---|---|---|---|---|---|
| 3/31/2021 | Stock Options | 25,316 (exercisable) | 3.95 | 3/31/2031 | Fully vested at grant |
| 5/15/2023 | Stock Options | 833,334 (unexercisable at 12/31/2024) | 1.06 | 5/15/2033 | Equal installments on 5/15/2025 and 5/15/2026 |
Risk Indicators & Red Flags
- Hedging and pledging prohibited for insiders; short sales prohibited .
- Director tax gross-ups for equity awards present governance optics concerns for board comp design .
- Large CEO ownership (13.8%) offers alignment but concentrates voting power, potentially influencing corporate control dynamics .
Investment Implications
- Alignment and retention: Thompson’s 13.8% stake and option schedules suggest strong long-term alignment; immediate vesting upon severance and change-in-control benefits could lower retention friction in strategic scenarios .
- Near-term supply/vesting: 2023 option grant vests in two equal tranches on 5/15/2025 and 5/15/2026, creating potential exercise/settlement events tied to share price and liquidity, a factor for trading around those dates .
- Pay-for-performance considerations: Maximum bonus contingent on market cap/share price thresholds (Incentive Criteria); bonus stock election at VWAP can align compensation with shareholder outcomes but amplifies dilution optics if heavily utilized .
- Governance quality: Independent committees and use of FW Cook mitigate dual-role risks; however, director tax gross-ups are shareholder-unfriendly and should be monitored for policy evolution .