Gary Atkinson
About Gary Atkinson
- Current roles: Chief Executive Officer (since May 2012), Secretary (since January 2008), and director (appointed August 11, 2021 per 2024 proxy; 2025 proxy lists “Director Since 2022”) .
- Education and credentials: BA Economics (University of Rochester); JD and MBA (Case Western Reserve University); licensed attorney in Florida and Georgia .
- Age: 43 (as disclosed in 2024–2025 proxies) .
- Company TSR and earnings context: Value of a hypothetical $100 investment fell to $8.74 in 2024 (down ~91% YoY) with net loss of $(23.257) million; prior nine-month 2023 TSR value $63.52 and net loss $(6.398) million .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Algorhythm Holdings (RIME) | CEO | May 2012–present | Led company through Nasdaq compliance actions and capital structure changes (reverse splits, equity plan amendments) to maintain listing and fund operations . |
| Algorhythm Holdings (RIME) | Interim CEO | Nov 2009–May 2012 | Executive continuity during leadership transition . |
| Algorhythm Holdings (RIME) | General Counsel | Jan 2008–Nov 2009 | Established legal and governance foundations; continues as Secretary . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | No external public company directorships or committee roles disclosed in 2024–2025 proxies . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | 9M 2023 | FY 2024 |
|---|---|---|---|---|
| Base Salary ($) | 156,075 | 212,673 | 165,385 | 215,000 |
| Cash Bonus ($) | — | 30,000 | — | 32,250 |
| Stock Awards ($) | — | 58,586 | — | — (director stock award shown below) |
| All Other Comp ($) | 5,339 | 6,192 | 4,142 | 6,285 |
| Total ($) | 161,414 | 307,451 | 169,527 | 253,535 |
Notes:
- 2024 proxy shows a director stock award of $10,000 to Atkinson during 2024, while 2024 proxy previously stated employee directors had agreed not to receive board compensation; disclosure appears inconsistent across years .
Performance Compensation
- Annual incentive plan design: Executive bonus plan provides for cash bonuses, stock options and stock grants based on EBITDA and the ratio of EBITDA to net sales; also includes a one-time option grant for successful Nasdaq listing .
- Clawback: Company adopted a clawback policy compliant with SEC/Nasdaq Rule 10D-1 to recoup erroneously awarded “incentive-based compensation” from current/former Section 16 officers upon restatement .
| Element | Metric/Trigger | Target/Weight | Actual/Payout | Vesting/Timing |
|---|---|---|---|---|
| Annual bonus | EBITDA and EBITDA/net sales ratio | Not disclosed | 2024 bonus $32,250 to CEO | Annual cash bonus; terms per plan |
| Equity (LTIs) | Options/stock grants per plan; listing milestone | Not disclosed | CEO equity grants varied by year; 2023 stock awards $58,586 | Award terms per 2022 Plan; 10-year option terms typical; specific tranches per plan |
Equity Ownership & Alignment
| As of | Total Beneficial Ownership (Shares) | % Outstanding | Notes |
|---|---|---|---|
| Nov 15, 2024 | 45,854 | <1% | Includes 20,001 options exercisable within 60 days . |
| Sep 29, 2025 (Record Date) | 160 | <1% | Includes 101 options exercisable within 60 days; reflects reverse split impacts . |
- Outstanding options (12/31/2024): CEO had legacy grants with post-split counts and high split-adjusted exercise prices, e.g., 8 @ $1,440 exp. 3/31/2026; 17 @ $2,820 exp. 5/3/2027; 67 @ $800 exp. 5/24/2032; 8 @ $1,730 exp. 8/16/2032 .
- Ownership guidelines/pledging: No ownership guideline or stock pledging by Atkinson is disclosed in the proxies; security ownership tables provide positions but no pledging notations .
Employment Terms
- Contract: Employment agreement dated April 22, 2022; three-year term with auto-renewal for 1-year periods unless notice is given .
- Base salary: $215,000 with automatic increase to $225,000 on first anniversary; annual bonus eligibility; equity plan participation .
- Severance: If terminated without “Cause” or by executive for “Good Reason,” lump sum equal to 2x (base salary + annual bonus) for year of termination; also death/disability benefits; severance conditioned on release .
- Change-in-control: If terminated for Good Reason or without Cause within 12 months of a Change in Control, lump sum equal to 2x (base salary + annual bonus) .
- Non-compete/non-solicit: Not disclosed in proxies .
Board Governance
- Board service: Director since Aug 2021 (2024 proxy) / listed as 2022 in 2025 proxy; age 43 .
- Board leadership: Disclosures conflict—Board leadership section states there is no Chairman and CEO is Gary Atkinson; yet the 2025 proxy cover letter/signature block label him “Chief Executive Officer and Chairman of the Board,” and 2025 closing carries the same title .
- Independence: 2025 board of seven includes four independent directors; audit, compensation, and nominating committees are entirely independent .
- Committee roles: Atkinson chairs the Executive Committee; is not on audit/comp/nom committees .
- Attendance: Directors attended >75% of board and committee meetings; the board met 12 times in FY 2024 .
- Lead Independent Director: Not disclosed .
Director Compensation
- 2025 policy (non-employee directors): $25,000 cash retainer; $25,000 annual restricted stock; $25,000 annual option grant; $5,000 per committee; initial option $25,000 value; expenses reimbursed .
- 2024 policy (non-employee directors): $15,000 annual cash; $5,000 annual stock; 1,000 annual options; per-meeting fees; initial 667 options; Atkinson and Melo agreed not to receive board pay per 2024 proxy .
- 2024 reported director comp: Atkinson shown with $10,000 in stock awards for board service in 2024 per 2025 proxy, creating inconsistency with prior policy disclosure .
Compensation Structure Analysis
- At-risk vs guaranteed: CEO base salary is modest (near $215k–$225k), with variable bonus and equity components tied to EBITDA metrics; pay-for-performance exists but absolute incentive levels have been small relative to market medians .
- Metric design: Heavy reliance on EBITDA and EBITDA/net sales ratio; no explicit revenue growth, TSR, or multi-year relative performance metrics disclosed; provides flexibility but risks misalignment if top-line and TSR deteriorate while EBITDA targets are reset .
- Clawback: Adoption of Nasdaq-compliant clawback is a positive governance signal .
- Equity plan dilution: Share authorization rose materially—authorized common stock increased to 800,000,000 (Dec 2024) and 2022 Plan “evergreen” moved from 5% to 15% of fully diluted shares in 2024, with a further 2025 proposal to lift plan capacity to 5,000,000 shares; these actions elevate dilution risk to holders .
Risk Indicators & Red Flags
- Nasdaq compliance and reverse splits: Company used a 200-for-1 reverse split (Feb 10, 2025) to regain/maintain compliance; the board also sought authority for additional reverse split flexibility—signals listing risk and potential share price fragility .
- Highly dilutive financings: December 2024 offering with large warrant overhang requiring shareholder approval and reset provisions; August 2025 Streeterville pre-paid financing with potential significant share issuance at discounted pricing—both likely to pressure stock and dilute insiders’ and public holders’ stakes .
- Related party transactions: 2023 share sale to Stingray Group and Regalia Ventures (director-affiliated), followed by 2024–2025 negotiated repurchases; potential governance sensitivities around board-connected counterparties .
- Performance trend: Severe TSR decline and increased net losses in 2024; raises alignment and retention questions if incentive targets were eased or payouts discretionary (not disclosed) .
Equity Ownership Snapshot (Insider Alignment)
| Holder | Shares/Notes | Date |
|---|---|---|
| Gary Atkinson | 45,854 shares (<1%); includes 20,001 options exercisable within 60 days | Nov 15, 2024 |
| Gary Atkinson | 160 shares (<1%); includes 101 options exercisable within 60 days | Sep 29, 2025 |
| Options detail (CEO) | Post-split holdings such as 8 @ $1,440 (exp 3/31/2026); 17 @ $2,820 (exp 5/3/2027); 67 @ $800 (exp 5/24/2032); 8 @ $1,730 (exp 8/16/2032) | As of 12/31/2024 |
Employment & Contracts
| Term | Provision |
|---|---|
| Agreement | 3-year term from Apr 22, 2022; auto-renew 1-year terms . |
| Base | $215,000 with automatic increase to $225,000 on first anniversary . |
| Bonus/Equity | Annual bonus eligibility; equity participation per 2022 Plan . |
| Severance | 2x (base+bonus) lump sum upon termination without Cause or for Good Reason; also death/disability benefits; release required . |
| Change-in-Control | 2x (base+bonus) upon Good Reason/without Cause within 12 months of CoC . |
Board Service History, Committees, and Dual-Role Implications
- Board tenure: Director appointment stated as August 2021 in 2024 proxy; 2025 proxy lists director since 2022 .
- Committee roles: Chairs Executive Committee; not on audit, compensation or nominating committees, which are fully independent .
- Independence and leadership: Four of seven directors independent; leadership narrative says there is no Chairman, but filings twice sign Atkinson as “CEO and Chairman of the Board,” indicating ambiguity. No Lead Independent Director identified—potential concentration of power risk given the CEO’s prominence .
Investment Implications
- Alignment: Modest cash pay with EBITDA-based incentives and a compliance-grade clawback is positive; however, absence of robust multi-year/relative metrics and severe TSR deterioration question pay-for-performance outcomes despite small absolute bonus levels .
- Dilution/overhang risk: Large authorized share increases, higher equity plan “evergreen,” warrant resets (Dec 2024), and pre-paid financing (Aug 2025) imply sustained dilution and potential selling pressure as financings monetize—watch for additional equity plan usage and Streeterville conversions .
- Listing risk: Reliance on reverse splits and recent Nasdaq deficiency history keeps compliance risk on the table; any further bid-price weakness could force additional corporate actions .
- Governance watch items: Dual-role ambiguity (CEO vs Chairman), absence of disclosed Lead Independent Director, and related-party deal history call for heightened scrutiny of independent oversight and capital allocation decisions .
Overall, for traders and PMs, insider alignment appears limited by small absolute ownership and significant future issuance risk; catalysts will hinge on financing terms, dilution pace, and any operational inflection that can stabilize losses and support share price above compliance thresholds .