Joseph Harary
About Joseph Harary
Joseph M. Harary (age 64) is President and Chief Executive Officer of Research Frontiers (REFR) and a director since 1993; he joined REFR in 1992 as VP & General Counsel, became EVP & General Counsel in 1999, President & COO in 2002, and CEO in January 2009. He holds an A.B. in Economics (Summa Cum Laude, Columbia College, 1983) and a J.D. (Columbia Law School, 1986, Harlan Fiske Stone Scholar), with prior roles as an economist at the Federal Reserve Bank of New York and as a corporate attorney at New York City law firms . REFR’s compensation CD&A emphasizes aligning pay with long-term performance, while recent years show growing (but still modest) use of equity incentives for the CEO relative to cash pay .
Company performance (financial):
| Metric (USD) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues | 539,686* | 909,598* | 1,335,531* |
| EBITDA | (2,596,293)* | (2,005,954)* | (1,415,704)* |
| Net Income | (2,669,349)* | (1,908,364)* | (1,311,382)* |
| Values retrieved from S&P Global.* |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Research Frontiers | VP & General Counsel | 1992–1999 | Built licensing/IP framework; supported tech commercialization . |
| Research Frontiers | EVP & General Counsel | 1999–2002 | Expanded legal/transactional leadership during growth phase . |
| Research Frontiers | President & COO | 2002–2008 | Oversaw operations during commercialization efforts . |
| Research Frontiers | Treasurer & CFO | 2005–2010 | Led finance; deep familiarity with capital/controls . |
| Research Frontiers | Corporate Secretary | 2007–present | Governance continuity; disclosure and board support . |
| Research Frontiers | President & CEO | 2009–present | Strategic direction; licensing-led model execution . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Federal Reserve Bank of New York | Economist | Pre-1986 | Macroeconomic/analytical grounding relevant to capital markets . |
| NY law firms (various) | Corporate lawyer (tech, licensing, M&A, IP, securities) | Pre-1992 | Negotiation and IP licensing expertise foundational to REFR’s model . |
Fixed Compensation
Multi-year compensation summary (CEO):
| Year | Salary ($) | Bonus ($) | Stock/Option Awards ($) | Non-Equity Incentive Plan ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2022 | 600,000 | – | 78,600 | 15,000 | 46,154 | 739,754 |
| 2023 | 500,000 | – | 61,200 | 100,000 | 38,462 | 699,662 |
| 2024 | 625,000 | – | 63,600 | 35,093 | 43,269 | 766,962 |
Program design highlights:
- Philosophy: mix of base salary, performance-based annual cash, and long-term equity; increasing emphasis on incentives to align with shareholders .
- Peer benchmarking: Committee periodically reviews a peer group; no consultant used in 2024 . Updated peer list includes ARWR, AATC, AWRE, CREX, EMAN, ISSC, MLAB, MVIS, PRKR, APH (PCTEL), PRSO, PWFL, PURE, RIOT .
- ATDC mix vs peers: CEO’s long-term incentive share of pay materially below peers (2024: 8% vs 44% peer average; 2023: 9% vs 46%), indicating cash-heavy pay relative to peer norms .
Performance Compensation
Annual cash incentive (CEO):
| Year | Metric Category | Weighting | Target | Actual/Payout | Notes |
|---|---|---|---|---|---|
| 2024 | Revenue goals | Not disclosed | Not disclosed | Cash payout included in $35,093 NIP | Goals set by Board; exact weights/targets not disclosed . |
| 2024 | Other non-revenue objectives | Not disclosed | Not disclosed | Included in NIP payout | Discretionary based on objectives . |
| 2023 | Revenue goals | Not disclosed | Not disclosed | Cash payout in $100,000 NIP | Similar design . |
| 2023 | Other non-revenue objectives | Not disclosed | Not disclosed | Included in NIP payout | . |
Equity incentives (CEO) – recent grants and terms:
| Grant Date | Award Type | Options (#) | Exercise Price ($) | Expiration | Grant-Date Fair Value ($) |
|---|---|---|---|---|---|
| 12/31/2022 | Stock Options | 60,000 | 1.95 | 12/30/2032 | 78,600 |
| 12/31/2023 | Stock Options | 60,000 | 1.02 | 12/20/2033 | 61,200 |
| 12/31/2024 | Stock Options | 60,000 | 1.68 | 12/30/2034 | 63,600 |
Vesting/contingency note:
- As of 12/31/2024, all CEO options were vested and exercisable except 37,265 options from 2024 that were “not fully vested” and contingent on additional options becoming available under the 2019 Plan pursuant to shareholder approval (Item 3) .
- Proposal to increase 2019 Plan share reserve by 1,675,000 shares (~5% of SO) to restore capacity; underlying value ~$1.7085M at $1.02/share as of 4/18/2025 .
Compensation structure vs peers (signal check):
| Year | Base as % of ATDC | Long-Term Incentive as % of ATDC | Total Cash as % of ATDC | Peer Avg LTI % |
|---|---|---|---|---|
| 2023 | 71% | 9% | 91% | 46% |
| 2024 | 81% | 8% | 92% | 44% |
Interpretation: Pay is heavily cash-oriented with comparatively low equity-at-risk vs peer norms, dampening alignment/leverage to multi-year TSR outcomes .
Equity Ownership & Alignment
Beneficial ownership and alignment:
| Holder | Shares Beneficially Owned | Options/Warrants Exercisable | % of Class | Pledging/Hedging |
|---|---|---|---|---|
| Joseph M. Harary | 788,550 | 290,000 | 2.32% | All of Mr. Harary’s shares are pledged as collateral to a third party (red flag) . |
Option overhang and status (CEO):
| Grant (Exercisable) | Exercise Price ($) | Grant Date | Expiration |
|---|---|---|---|
| 55,000 | 2.785 | 12/31/2020 | 12/30/2030 |
| 55,000 | 1.72 | 12/31/2021 | 12/30/2031 |
| 60,000 | 1.95 | 12/31/2022 | 12/30/2032 |
| 60,000 | 1.02 | 12/31/2023 | 12/20/2033 |
| 60,000 (37,265 contingent unvested) | 1.68 | 12/31/2024 | 12/30/2034 |
Other alignment policies:
- Stock ownership guidelines: not disclosed.
- Clawback policy: not disclosed in proxy sections reviewed.
- Hedging policy: not disclosed; pledging is explicitly disclosed (all shares pledged) .
Employment Terms
| Term/Provision | Detail |
|---|---|
| Contract and term | Original CEO agreement effective 1/1/2009; amended 9/26/2019 to extend through 12/31/2024; auto-renews for successive 1-year terms unless 90 days’ notice . |
| Base salary | $625,000 in 2024 and 2025 per agreement . |
| Annual bonus | Discretionary/metrics set by Board; revenue-based and other objectives . |
| Non-compete / Non-solicit | Two years post-termination . |
| Equity vesting on separation | Unvested CEO equity vests if terminated by Company in breach or CEO resigns for good reason; acceleration typically also on death/disability per award terms . |
| Severance – death | Six months of base salary (e.g., $312,500 on 12/31/2024 scenario) . |
| Severance – disability | Six months of base salary (formula-adjusted for disability pay) ($312,500 illustrated) . |
| Severance – without cause | Base salary for 1–3 years depending on termination date (e.g., $625,000 in table for 12/31/2024 scenario) . |
| Resignation for good reason | Same as above (e.g., $625,000 illustrated) . |
| Change-of-control | Single-trigger: base salary for the longer of three years or remaining contract term (e.g., $1,875,000 illustrated) . |
| Benefits/other | Four weeks paid vacation; other fringe benefits consistent with employees . |
Potential payments (illustrative at 12/31/2024):
| Scenario | Cash Payment |
|---|---|
| Death | $312,500 |
| Disability | $312,500 (see formula note) |
| Termination without cause / not renewed | $625,000 (timing-dependent) |
| Resignation for good reason | $625,000 |
| Change in control | $1,875,000 |
Board Governance and Service
- Service history: Director since 1993; currently Class I director (term to 2027 per 2024 proxy; continues in office in 2025) .
- Leadership structure: Roles of Chairman and CEO separated historically; no new Chair appointed after founder’s death (2016). Committees chaired by independent directors (Audit and Compensation: Darryl Daigle; Nominating & Corporate Governance: Alexander Kaganowicz) .
- Independence: Board majority independent; Harary is not independent as an employee director .
- Committee roles: Harary is not listed as a member of Audit, Compensation, or Nominating & Corporate Governance (each comprised of independent directors) .
- Attendance: In 2024, no incumbent director attended less than 75% of Board and committee meetings; Board met 8x, Compensation 10x, Audit 4x, Nominating 4x .
- Director compensation: Management director (Harary) is not separately compensated as a director; non-employee directors received $40,000 cash and options for 45,000 shares in 2024 .
Dual-role implications: CEO is also a director but not Chairman; independence concerns are mitigated by majority-independent board and independent committee chairs, though absence of a designated Chair/Lead Independent Director is noted in governance disclosure .
Related-Party and Ecosystem Considerations
- Gauzy Ltd. (licensee): Its CEO/Chairman, Eyal Peso, joined REFR’s Board in 2023. Gauzy and its subsidiary Vision Systems accounted for 13% (2024) and 18% (2023) of fee income; receivables from them were 9% (2024) and 8% (2023) of royalty receivables before reserves; 2023 receivables paid in January 2024 .
- Equity plan: Proposal to add 1,675,000 shares to 2019 Plan (~5% of SO) to maintain equity incentive capacity .
Compensation Committee Analysis
- Committee composition: Independent directors only; chaired by Darryl Daigle .
- Consultant use: None in 2024; peer data periodically refreshed (original study by Connell & Partners in 2011) .
- Risk review: Committee determined policies not reasonably likely to create material adverse risk; one business unit reduces structural risk concentration .
Director Compensation (for context)
- Non-management director pay in 2024: $40,000 cash + options for 45,000 shares (est. $47,700 FV) each .
- Management director (Harary): no separate director pay; compensation shown in executive tables .
Risk Indicators & Red Flags
- Pledging: All of Harary’s owned shares are pledged as collateral (could force selling under margin events) .
- Single-trigger CIC cash: Base salary for ≥3 years upon change-of-control without termination requirement (shareholder-unfriendly vs double-trigger norms) .
- Dilution supply: Plan share increase of 1,675,000 (~5% of SO) expands potential equity issuance; 37,265 CEO options contingent on share availability .
- Related-party concentration: Material fee income and receivables tied to Gauzy/Vision Systems; Gauzy CEO on REFR board .
Say-on-Pay & Frequency
- 2025 proxy asks shareholders to approve NEO compensation (advisory) and recommends triennial say-on-pay frequency going forward .
Investment Implications
- Alignment and overhang: Cash-heavy pay with low LTI share vs peers limits leverage to TSR but reduces dilution; however, all CEO owned shares are pledged, introducing potential selling pressure in adverse markets .
- Incentive capacity and dilution: Proposed 1,675,000-share increase (~5% of SO) restores plan capacity, enabling future option/stock grants (supporting retention) but adds dilution risk; it also cures contingent unvested CEO options from 2024 .
- Protection economics: Single-trigger CIC cash equal to ≥3 years of salary can be costly in M&A and misaligned with best-practice double-trigger standards, potentially affecting deal dynamics and governance optics .
- Counterparty reliance: Royalties and receivables linked to Gauzy/Vision Systems underscore customer concentration and related-party oversight needs; board independence and committee structure partially mitigate, but monitoring is warranted .
- Execution track record: Revenues have grown off a small base with improving EBITDA losses, but sustained value creation rests on licensee adoption velocity and royalty scale-up—pay program’s growing incentive emphasis should be calibrated to measurable operating milestones and TSR to strengthen alignment .