Richard Schwartz
About Richard Schwartz
Richard Schwartz (age 50) is Chief Executive Officer and a Class II director of Rush Street Interactive (RSI). He co‑founded RSI in 2012, served as President until August 2021, and has been CEO and a director since August 2021; he holds a B.A. from UC Berkeley and a J.D. from UC Hastings, and is an inventor on 50+ patents in gaming and user behavior . Under his tenure, GAAP revenue grew to $924.1 million in 2024 from $691.2 million in 2023 and $592.2 million in 2022, while cumulative TSR (value of $100 initial investment) improved to $83.15 in 2024 from $27.21 in 2023; RSIs PSUs for the 2022–2024 cycle paid out at 194.2% based on 79th percentile Relative TSR, indicating strong market performance alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Rush Street Interactive | Co‑founder; President | 2012–Aug 2021 | Built RSI’s interactive gaming business and scaled BetRivers brand |
| Rush Street Interactive | Chief Executive Officer | Aug 2021–Present | Led revenue and TSR improvements; instituted pay‑for‑performance PSU framework |
| WMS Industries | Head of Interactive Business | 2010 (launch) | Launched award‑winning UK online casino Jackpot Party |
| Telecom Italia Lab USA | Executive | Not disclosed | Corporate development and technology leadership |
| Silicon Valley law firm(s) | Intellectual Property Attorney | Not disclosed | Built patent portfolio; deep understanding of player psychology |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| None disclosed | — | — | — |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 537,500 | 613,800 | 623,800 |
| Target Annual Bonus (% of Base) | 110% (per amended letter) | 110% (letter remained operative) | 110% (amended 3/5/2024 letter) |
| Actual Annual Bonus Paid ($) | 724,580 | 872,583 | 983,529 |
Notes: Schwartz’s amended and restated offer letter (3/5/2024) sets base salary at $613,000 and target bonus at 110% of base, with actual payable intended between 80%–140% of base based on corporate and individual objectives . Corporate goals (Revenue and Adjusted EBITDA) exceeded maximum in 2024, driving 150% payout for the corporate component of the STIP; individual components were assessed via a scorecard .
Performance Compensation
Annual STIP Structure (FY 2024)
| Component | Metric | Weighting | Target | Actual | Payout Mechanics | Vesting/Payment Timing |
|---|---|---|---|---|---|---|
| Corporate Goals | GAAP Revenue | 33% of Corporate (Corporate = 67% of total) | Not disclosed | Exceeded maximum | 0%–150% scaling; interpolation between tiers | Paid in following year (2025) |
| Corporate Goals | Adjusted EBITDA | 67% of Corporate | Not disclosed | Exceeded maximum | 0%–150% scaling; interpolation between tiers | Paid in following year (2025) |
| Individual Goals | Qualitative/Quantitative | 33% of total | Not disclosed | Discretionary based on scorecard | Committee judgment | Paid in following year (2025) |
LTIP Awards Granted in 2024 (Mix: 50% PSUs, 30% RSUs, 20% Options)
| Award Type | Grant Date | Shares/Units | Grant‑Date Fair Value ($) | Key Terms |
|---|---|---|---|---|
| PSUs (Relative TSR vs peer group; 0%–200% payout; cap 100% if Company TSR negative) | 3/15/2024 | 507,650 target; 1,015,300 max | 4,599,309 | 3‑year performance period to 12/31/2026; 55th percentile = target; “direct competitors” counted twice in percentile calc |
| RSUs (time‑based) | 3/15/2024 | 304,590 | 1,769,668 | Vest ratably over 3 years |
| Stock Options (time‑based) | 3/15/2024 | 277,986 | 1,039,668 | Strike $5.79; 10‑yr term to 3/15/2034; vest in equal annual installments over 3 years |
Historical PSU outcome example: PSUs granted in 2022 for the 2022–2024 cycle paid out at 194.2% of target based on Company Relative TSR at the 79th percentile .
Equity Ownership & Alignment
Beneficial Ownership (as of 4/9/2025 record date)
| Class | Shares Beneficially Owned | % of Class | % of Total Voting Power |
|---|---|---|---|
| Class A Common | 3,158,002 | 3.3% | — |
| Class V Common (non‑economic; one vote per share) | 8,076,045 | 6.1% | 4.9% total voting power |
Outstanding Equity Awards (as of 12/31/2024)
| Instrument | Status | Quantity | Key Terms |
|---|---|---|---|
| Options | Exercisable | 32,051 @ $15.40; exp 4/9/2031 | 3‑yr vest schedule from 4/9/2021; 10‑yr term |
| Options | Exercisable/Unexercisable | 294,682 / 147,341 @ $3.99; exp 9/27/2032 | 3‑yr vest; 10‑yr term |
| Options | Exercisable/Unexercisable | 159,346 / 318,692 @ $3.28; exp 3/15/2033 | 3‑yr vest; 10‑yr term |
| Options | Unexercisable | 277,986 @ $5.79; exp 3/15/2034 | 3‑yr vest; 10‑yr term |
| RSUs | Unvested | 693,563 total across 9/27/2022, 3/15/2023, 3/15/2024 grants | Time‑based; vest in equal annual installments over 3 years |
| PSUs | Unearned (multiple cycles outstanding) | Target and maximum share counts disclosed across cycles | Relative TSR‑linked; 3‑year performance periods; payout 0%–200% (100% cap if Company TSR negative) |
Reference price for “in‑the‑money” context: $13.72 per share (NYSE close on 12/31/2024) .
Alignment Policies and Guidelines
- Stock ownership guidelines: CEO must hold ≥5× base salary; RSUs count, PSUs/options do not; all executive officers currently exceed guidelines .
- Clawback: SEC/NYSE‑compliant mandatory recovery of erroneously awarded incentive compensation for awards granted/received on or after 10/2/2023 if a restatement is required .
- Insider trading: Prohibits hedging/monetization, short sales, and trading in publicly traded options on RSI without prior CLO approval .
- Program guardrails: No option repricing; no annual tax gross‑ups; no excise tax gross‑ups on change‑in‑control; limited perquisites .
No pledging of shares was disclosed in the proxy’s ownership section for Mr. Schwartz .
Employment Terms
| Term | Provision |
|---|---|
| Employment Agreement | Amended & restated offer letter dated 3/5/2024 |
| Base Salary | $613,000 (letter); Summary Comp shows $623,800 paid in 2024 |
| Target Bonus | 110% of base; intended payout range 80%–140% of base |
| LTIP Grant Value | Annual equity awards targeted at ~8.3× base salary; mix includes time‑based and performance‑based awards |
| Restrictive Covenants | Confidentiality; non‑disparagement; non‑compete and non‑solicit for 18 months post‑employment |
| Severance (no CoC) | Cash severance = 1× (salary + target bonus); prorated bonus based on actual performance; 12 months COBRA; partial acceleration of time‑based equity vesting (next 12 months); PSUs prorated by service and payout by actual performance at end of period |
| Severance (within 24 months post‑CoC; double trigger) | Lump sum = 2.5× (salary + greater of target bonus or average actual bonus over prior two years); prorated bonus based on actual; 12 months COBRA; accelerate all time‑based equity; PSUs assumed/replaced or vest at greater of target or actual performance through CoC date |
| Death/Disability | Full vesting of time‑based awards; PSUs vest at target; CFO receives prorated bonus at target |
Estimated change‑in‑control severance and equity values (as of 12/31/2024, assuming target PSU payout): total $58.8 million (cash $3.96 million; stock incentives $54.81 million; benefits $26,151) .
Board Governance
- Board service: Class II director since Aug 2021; nominated for re‑election in 2025; term would run to 2028 if elected .
- Committees: Schwartz is not listed as a member of the Audit, Compensation, or Nominating & Corporate Governance committees .
- Leadership structure: Combined roles are separated (CEO Schwartz; Executive Chairman/Chair Neil Bluhm); Niccolo de Masi serves as Lead Independent Director .
- Controlled company: RSI qualifies as a controlled company under NYSE rules; board not majority independent; Compensation and NCG Committees include non‑independent directors (Comp Chair: Neil Bluhm) .
- Attendance: All directors attended more than 75% of board and committee meetings during 2024 .
- Director pay: Employee directors (Schwartz) receive no director compensation; non‑founder independent directors received annual RSU retainers and ad hoc committee fees as applicable .
Compensation Structure Analysis
- Equity‑heavy pay mix: Approximately 84% of average NEO compensation in 2024 was equity‑based, reinforcing long‑term alignment .
- Shift toward PSUs: 50% of 2024 LTIP value in PSUs tied to Relative TSR; payout capped at 100% if Company TSR is negative, mitigating windfalls in down markets .
- STIP rigor: Corporate goals (Revenue and Adjusted EBITDA) exceeded maximum, paying at 150% for the corporate component; targets require meaningful YoY growth with scaled tiers and interpolation .
- Peer group usage: Relative TSR peer group counts “direct competitors” twice, emphasizing competition‑aligned outcomes; committee reviews compensation versus gaming/tech/entertainment peers but does not benchmark to a fixed percentile .
Equity Ownership & Alignment Details
| Item | Detail |
|---|---|
| Ownership Guidelines | CEO ≥5× salary; in compliance |
| Beneficial Ownership Structure | Includes personal and trust holdings (Richard T. Schwartz Trust; Lori R. Schwartz 2025 Gift Trust; spouse‑administered trust) |
| Vested vs Unvested | Significant unvested RSUs across 2022–2024 grants; multiple PSU cycles outstanding |
| Options | Multiple tranches in‑the‑money at $13.72 reference price with strikes $3.28–$5.79 and one tranche at $15.40 |
Performance & Track Record
- Achievements: 2024 GAAP revenue of $924.1 million; net income of $7.2 million; cumulative TSR recovery to $83.15 for 2024; PSUs (2022 cycle) paid at 194.2% (79th percentile Relative TSR) .
- Metrics linkage: STIP weighted to revenue and Adjusted EBITDA; PSUs tie pay outcomes to shareholder returns versus peers .
- Recognition: 50+ patents; noted expertise in player psychology and gaming innovation .
Employment & Contracts: Risk/Retention
- Retention levers: High equity mix; RSUs vest over 3 years; PSUs require multi‑year TSR performance; non‑compete/non‑solicit for 18 months post‑employment .
- Change‑in‑control economics: 2.5× cash multiple; full acceleration of time‑based equity and favorable PSU treatment under non‑assumption; double‑trigger design .
- Clawback and trading policies reduce misalignment and speculative trading behaviors .
Investment Implications
- Alignment: Strong pay‑for‑performance design via Relative TSR PSUs and scaled STIP metrics; ownership guidelines and clawback enhance accountability .
- Retention risk: 18‑month non‑compete/non‑solicit plus substantial unvested equity reduce near‑term flight risk; however, large PSU realizations can create event‑driven settlement/vesting windows to monitor for liquidity impacts .
- Governance considerations: Controlled company status and non‑independent committee compositions (Comp chaired by Executive Chairman) warrant ongoing oversight of pay decisions; presence of Lead Independent Director mitigates some concerns .
- Change‑in‑control: Double‑trigger severance and equity acceleration could be meaningful in strategic scenarios; investors should factor potential dilution/settlement dynamics into deal models .
Sources: 2025 DEF 14A; 8‑K Item 5.02 dated 1/17/2025. All figures and statements cited above reference RSI’s filings.