Paul Hickey

About Paul Hickey

Paul F. Hickey, age 59, has served as RSLS President, Chief Executive Officer, and a director since August 15, 2022. He previously led Altimate Medical Holdings (2020–2022) and Vertebral Technologies (2018–2020), and earlier held senior roles at EnteroMedics (now ReShape Lifesciences) and Zimmer Biomet; he holds a Bachelor’s from the University of Michigan and a Master’s from Washington University in St. Louis . Under his leadership, RSLS emphasized “disciplined, metrics-driven” operations with a targeted cost reduction plan, and secured FDA approval for Lap-Band 2.0 in December 2023, while pursuing product portfolio expansion; the company also noted going-concern and capital-raising risks in 2023–2024 disclosures .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

• Short-term (Annual Incentive)
  • Plan design: “Management Incentive Plan” with annually set corporate objectives; mix of objective/subjective factors; target opportunity for CEO at 50% of base salary .
  • Weighting/metrics: not disclosed; committee may re-weight during year .
• Long-term (Equity)
  • CEO new-hire equity: Option to purchase shares equal to 4% of fully diluted common stock (exercise price at grant date market close; 10-year term; vesting 25% at one-year anniversary, then monthly over 36 months) .
  • “Top-up” equity: Additional option/award contemplated after first post-start financing to maintain 4% fully diluted ownership .
  • Accelerated vesting: If terminated without cause or resigns for good reason, 100% of unvested options vest; post-termination exercise window up to 5 years (not beyond original term) . Upon change in control, 100% of unvested options vest; if later terminated without cause/for good reason post-CIC, separation benefits also apply .

Equity Ownership & Alignment

Vesting and potential supply dynamics:

• Time-based option vesting (25% at year 1, monthly thereafter) and 100% acceleration upon qualifying termination/CIC can concentrate exercisable supply around milestones; no Form 4 trading history was disclosed in provided documents .

Employment Terms

Board Governance

• Board service: Director since August 15, 2022; employee-director (not independent) .
• Committees: CEO not listed as a member of Audit, Compensation, or Nominating & Governance committees; all committees comprised solely of independent directors .
• Board leadership: Executive Chair (Dan Gladney) and Lead Independent Director (Gary Blackford) roles in place to balance governance with a CEO who is also a director .
• Independence: Board determined all directors other than Hickey are independent under Nasdaq rules .
• Attendance: Board held 10 meetings in 2022; each director attended at least 75% of Board/committee meetings .
• Director fees: Employee-directors (including Hickey) receive no additional compensation for Board service .

Performance & Track Record

• Strategic initiatives under Hickey: pivot to “disciplined, metrics-driven” operations; 2024 cost reduction plan targeted ~55.4% OpEx reduction vs 2023 (excluding one-time costs); emphasis on scalable marketing and Lap-Band procedure growth .
• Product/regulatory milestones: FDA approval of Lap-Band 2.0 in Dec 2023; first surgeries in early 2024; progress on Obalon relaunch via OEM partnership; ongoing DBSN device R&D .
• Capital markets and listing actions: reverse split authorization (2024) and continued reverse split flexibility (2025 special proxy); use of warrants/ELOC for financing; Nasdaq bid-price compliance risk .

Compensation Structure Analysis

• Mix and leverage: CEO target cash bonus at 50% of salary; primary LTI in stock options equal to 4% fully diluted shares with standard 4-year vest schedule .
• Pay-for-performance link: Annual plan ties payout to annually approved corporate objectives; specific financial/operational metrics and weightings not disclosed; committee retains re-weighting discretion .
• Equity risk/reward: Time-based options plus “top-up” design concentrate equity exposure; strong acceleration provisions (including CIC) increase downside protection for the executive .
• Guaranteed/discretionary elements: 2022 included a one-time $25,000 sign-on; no guaranteed annual bonuses for CEO disclosed beyond standard plan participation .

Risk Indicators & Red Flags

• Alignment: Beneficial ownership reported at less than 1% in late 2023 and early 2025, suggesting limited personal capital at risk absent execution of large option grants .
• Pledging/hedging: Policy prohibits pledging and margin accounts, and restricts hedging, which supports alignment and reduces counterparty risk .
• Company-level financial risk: 10-K disclosed going-concern uncertainty, material weaknesses in internal control, and reliance on capital markets; reverse split and high warrant activity increase dilution risk; Nasdaq listing compliance pressures persisted in 2023–2024 .

Equity Ownership & Director Compensation (Director-specific)

• Non-employee director fees/roles (context): Executive Chair total cash $125,000 (inclusive of $35,000 Board retainer); other non-employee director retainers/fees disclosed for 2022; employee-director (Hickey) not paid director fees .

Employment & Contracts (Severance and CoC Economics)

Investment Implications

• Alignment and retention: Low disclosed beneficial ownership (<1%) reduces near-term ownership alignment but is offset by sizable, time-based option exposure (4% FD initial grant with acceleration protections), which can be retention-supportive yet cushions downside risk (less performance-contingent than PSUs) .
• Governance: CEO also serves as director, but not as Chair; presence of an Executive Chair and a Lead Independent Director, plus independent committees, mitigates dual-role concerns .
• Liquidity and dilution risk: Company-level risks (going-concern, internal control weaknesses, reverse splits, warrants/ELOC issuances) suggest heightened dilution/volatility potential; this context may influence the realized value and retention effectiveness of equity awards .
• Execution levers to monitor: Actual grant size/timing and vesting of CEO’s option/top-up awards, any future disclosures of performance metrics and bonus outcomes, and evidence of product/operational traction (Lap-Band 2.0 adoption, portfolio relaunch milestones) given capital constraints .