Rati Sahi Levesque
TheRealRealAbout Rati Sahi Levesque
Rati Sahi Levesque, 44, is President and Chief Executive Officer of The RealReal (CEO since Oct 28, 2024; first employee at the company). She holds a B.S. in Business Management Economics from UC Santa Cruz and previously served as COO (2019–2024), President (since 2021), and Co‑Interim CEO (Jun 2022–Feb 2023) . Under her leadership team, the company achieved its first-ever positive full-year Adjusted EBITDA ($9M) and Free Cash Flow ($1M) in 2024, and 1‑year TSR rose ~443% in 2024; over three years TSR remained down ~5% amid multi‑year turnaround dynamics .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| The RealReal | Chief Executive Officer; Director | Oct 2024–present | Leads next phase of growth; follows successful 2024 inflection to positive Adj. EBITDA/FCF |
| The RealReal | President | Feb 2021–present | Executive leadership across operations and growth priorities |
| The RealReal | Chief Operating Officer | Apr 2019–Oct 2024 | Scaled operations; co-led interim CEO period during 2022 transition |
| The RealReal | Co‑Interim CEO | Jun 2022–Feb 2023 | Leadership continuity during CEO transition |
| The RealReal | Chief Merchant | May 2012–Mar 2019 | Built consignor/buyer merchandising capabilities |
| The RealReal | Director of Merchandise | May 2011–May 2012 | Early merchandise leadership (first employee) |
| Anica Boutique | Owner | Jun 2005–May 2011 | Retail operator (brick & mortar + online) |
External Roles
- No other public company directorships disclosed in the company’s proxy biography .
Fixed Compensation
| Item | 2024 detail |
|---|---|
| Base salary | $700,000 effective Oct 2024 (was $525,000 from Feb 2024); 2024 salary paid: $540,385 |
| Target annual bonus | 75% of base through Oct 2024; increased to 100% upon CEO promotion in Oct 2024 |
| Actual 2024 bonus paid | $647,167 (prorated for promotion/salary changes) |
| One‑time cash bonus | $300,000 promotion bonus (repayment if separation within 1–2 years per terms) |
Performance Compensation
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Annual bonus plan (2024) | Metric | Weighting | Threshold | Target | Stretch | Max | Result | Payout | |---|---:|---:|---:|---:|---:|---:|---:| | Adjusted EBITDA ($mm) | 100% | -10 | 0 | 10 | 15 | 9.3 | 147% |
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2024 equity awards (granted in two tranches: annual and promotion) | Award type | Grant date | Units (#) | Grant date fair value ($) | Vesting | |---|---|---:|---:|---| | RSU (annual) | Mar 4, 2024 | 450,000 | 1,440,000 | 12 equal quarterly installments over 3 years | | PSU (annual, FCF metric) | Mar 4, 2024 | 300,000 target | 960,000 | Performance on FY26 free cash flow; service through 3 years; 50–200% payout scale | | RSU (promotion) | Oct 29, 2024 | 1,250,000 | 3,800,000 | 12 equal quarterly installments over 3 years | | PSU (promotion, FCF metric) | Oct 29, 2024 | 1,250,000 target | 3,800,000 | Same FY26 free cash flow metric; service vest on 3rd anniversary; 50–200% payout |
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PSU performance design details (2024 grants; applies to CEO) | Metric | Definition | Threshold | Target | Stretch | Maximum | |---|---|---:|---:|---:|---:| | Free Cash Flow (unlevered) | Net cash from ops + interest paid – capex (GAAP/consistent non‑GAAP, per Committee) | 50% of target units | 100% | 150% | 200% |
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Prior PSU programs
- 2023 PSUs (stock price hurdles): $5.00, $7.50, $10.00 tranches; CEO vested 50k at $5 (Dec 17, 2024) and 50k at $7.50 (Feb 20, 2025) after service and performance satisfied .
- 2022 PSUs (GMV and Adj. EBITDA by year; 3‑year service) – 2024 tranche earned 0% (below threshold) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 1,001,775 shares; <1% of outstanding |
| Components near term | 210,527 options exercisable within 60 days; 188,692 RSUs vesting within 60 days (as of Apr 14, 2025) |
| Options status | All options fully vested by Dec 31, 2024 (no unvested options value in CIC table) |
| Unvested equity (illustrative) | RSUs from 3/4/24 (337,500 unvested units at 12/31/24; $3.69M), RSUs from 10/29/24 (1,250,000; $13.66M) plus earlier smaller RSUs; PSUs 2024 grants (1.55M target across annual + promotion) |
| Ownership guidelines | CEO: 5x base salary; executives have 5 years to comply (initial or from Nov 2021) |
| Hedging/pledging | Prohibited for officers/directors; pledging only with Board approval; insider trading policy in place |
| Equity grant timing | No options granted since 2019; no timing around MNPI to influence grant values |
Employment Terms
| Provision | Key terms |
|---|---|
| Employment/Promotion terms | CEO promotion offer (Oct 28, 2024): $700k base, 100% target bonus (prorated 2024); $300k promotion bonus with 1–2 year repayment conditions; 1.25M RSUs + 1.25M PSUs (FCF metric) |
| Severance/CIC (CEO) | Double‑trigger CIC: 1.5x (base + target bonus) + prorated target bonus + 18 months COBRA subsidy; full acceleration of RSUs; PSUs vest at target |
| Severance (non‑CIC) | 1.5x (base + target bonus) + prorated target bonus + 18 months COBRA subsidy; no equity acceleration |
| Agreement mechanics | Standard severance & CIC agreements (3‑year term; auto‑renew; confidentiality, non‑compete, non‑solicit) |
| Clawback | Nasdaq/Rule 10D‑1 compliant policy adopted July 2023 (restatement‑based recovery; no fault required) |
| Tax gross‑ups | None on severance or perquisites |
Board Governance
- Role and independence: CEO and director since Oct 2024; all other directors are independent; independent Board Chair (Karen Katz) since Feb 2024; independent committees .
- Committees: No committee assignments as CEO director .
- Declassification: Board pursuing phased declassification (stockholder vote in 2025 to begin phasing; complete by 2028, subject to approval) .
Director Compensation
- Employee directors (including CEO) receive no additional pay for board service .
Insider Transactions, Vesting Schedules, and Selling Pressure
- Recent Form 4 activity:
- Dec 2, 2024: exercised 44,905 options at $1.74; 12,937 shares withheld/forfeited (Form 4) .
- Nov 20, 2024: Form 4 filed (short-swing Section 16(b) annotation; details in filing) .
- Mar 14, 2024: Form 4 filed (insider change reported) .
- Aug 20, 2025: disposition of 101,830 shares at $7.64 (reported) .
- Aug 22, 2025: automatic sale(s) to satisfy tax withholding on vesting (Form 4) .
- Interpretation: 2024 activity primarily option exercise and tax/withholding-related share dispositions (limited open‑market selling pressure). 2025 includes one reported disposition and separate withholding sales; given sizable scheduled RSU/PSU vesting cadence (quarterly RSUs; 2026 PSU performance test), periodic tax‑related selling is likely, but hedging/pledging is prohibited and equity acceleration generally requires double‑trigger CIC .
Performance & Track Record
| Metric | 2024 highlight |
|---|---|
| Adjusted EBITDA | +$9M; up $64M YoY |
| Free Cash Flow | +$1M; up $104M YoY |
| 1‑year TSR (2024) | +443% (vs +22% Russell 3000) |
| 3‑year TSR | -5% cumulative (vs +49% Russell 3000) |
| Governance/say‑on‑pay | 88% support in 2024; continued stockholder engagement on PSU usage and pay design |
Notable leadership transitions in 2024: new CFO (Mar 2024); Rati promoted to CEO (Oct 2024); Board Chair appointed (Feb 2024). Debt exchanges in Feb 2024 and Feb 2025 reduced indebtedness and rebalanced maturities .
Compensation Structure Analysis
- Mix and at‑risk pay: For the CEO, 92% of 2024 total target compensation was incentive‑based, with a significant PSU component tied to free cash flow (long-term) and annual cash tied 100% to Adjusted EBITDA (short-term) .
- Equity design shifts: Continued use of PSUs (initiated 2022), moving focus from stock price hurdles (2023 cohort) to free cash flow (2024+), aligning with cash discipline and profitability .
- Governance: Double‑trigger acceleration; no tax gross‑ups; robust clawback; no hedging/pledging; no option grants since 2019 (limits repricing risk) .
Related Party and Compliance Notes
- Related party: Investors’ Rights Agreement includes entities affiliated with GreyLion Partners and Rati’s mother, Rita Sahi; Audit Committee oversees related-party transactions policy .
- Section 16 compliance: One late Form 4 (de minimis family purchase) attributed to administrative oversight .
Compensation Committee, Peer Group, and Consultants
- Compensation Committee: Independent (Chair: Caretha Coleman; members: Chip Baird, Niki Leondakis) .
- Consultants: FW Cook (since Aug 2024; no conflicts); Compensia previously (no conflicts) .
- Peer group: Internet/direct‑to‑consumer and consumer discretionary comparables; used for benchmarking base/bonus/LTI values .
Investment Implications
- Alignment: High at‑risk pay, FCF‑linked PSUs, and 100% EBITDA‑based annual bonuses signal strong alignment with profitability and cash goals; 2024 inflection to positive Adj. EBITDA/FCF supports credibility of metrics .
- Supply/overhang: Meaningful unvested equity (notably 1.25M + 1.25M RSU/PSU promotion grants) implies recurring vest‑related tax sales; however, no hedging/pledging and double‑trigger acceleration reduce governance risk; watch 2026 FCF PSU outcome for upside/downside to realized pay .
- Retention and transition risk: Enhanced CEO severance/CIC protections (1.5x) and sizable multi‑year PSUs support retention through the turnaround; leadership transitions largely completed in 2024–2025 .
- Governance posture: Independent Chair, declassification roadmap, strong clawback and prohibitions on hedging/pledging are positives; say‑on‑pay support (88%) indicates shareholder acceptance of pay design amid improving results .