Thomas Shaw
About Thomas J. Shaw
Founder of Retractable Technologies, Inc. (RVP), serving as Chairman of the Board, President, Chief Executive Officer, and Director since inception; Age 74, with educational background in both engineering and accounting and the primary inventor of RVP’s safety syringe technology, including patented friction ring designs . RVP’s pay-versus-performance disclosure shows significant swings in shareholder returns and earnings over 2020–2024, while executive pay is not linked to financial performance measures; Mr. Shaw’s majority ownership often determines shareholder vote outcomes .
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| TSR Index (Value of $100) | 716.00 | 462.00 | 109.33 | 74.00 | 46.67 |
| Net Income ($) | 24,223,013 | 56,064,241 | 5,078,557 | (7,011,036) | (11,886,524) |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Retractable Technologies, Inc. | Founder; Chairman; President; CEO; Director | Since inception | Primary inventor; leads product design; deep strategic knowledge of RVP and competitive environment |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Public company directorships | None disclosed | — | “No Directors hold Directorships in other reporting companies.” |
Fixed Compensation
| Year | Base Salary ($) | Bonus ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|
| 2022 | 1,068,654 | — | 9,150 | 1,077,804 |
| 2023 | 1,139,550 | — | 9,900 | 1,149,450 |
| 2024 | 1,178,295 | — | 10,350 | 1,188,645 |
- Employment Agreement sets annual salary minimum ($416,400) with CPI-based increases and annual review; in 2021 salary increased to $1,000,000 based on consultant input, with CPI escalations to $1,212,465 in 2025 .
- 401(k) plan with company matching contributions; named executive officers received $27,840 (2022), $35,548 (2023), $44,328 (2024) in matches .
- Pay ratio: CEO compensation $1,188,645 vs median employee $46,868 (1:25.35) for 2024 .
Performance Compensation
Executive compensation is not tied to specific financial performance measures; bonuses are discretionary and infrequent, and option grants have been sporadic, not on a predetermined schedule .
| Incentive Type | Metric | Weighting | Target | Actual | Payout | Vesting/Status |
|---|---|---|---|---|---|---|
| Cash Bonus (2021) | Discretionary | N/A | N/A | $300,000 | Paid in 2021 | N/A |
| Stock Options (2021) | 1,000,000 options @ $13.00 | N/A | N/A | FV $10.21/option (Black-Scholes) | N/A | Award terminated Dec 2022; vesting terms not disclosed |
Additional disclosures:
- Company adopted and later revised clawback policy (Mar 16, 2021; Nov 7, 2023) to recoup incentive compensation upon certain financial restatements; however, compensation is not currently based on attainment of financial measures .
- Policy to avoid “spring-loading” and to time material information releases to ensure fairness for equity awards, though awards are rare and based on historical performance .
Equity Ownership & Alignment
| Ownership Detail | Amount | Notes |
|---|---|---|
| Beneficial ownership | 15,949,849 shares (53.3%) | Majority owner; most determinative in shareholder votes |
| Voting control | 15,449,849 shares (51.6%) | Includes control via Voting Agreement |
| Investment power | 15,618,249 shares (52.2%) | Includes trust investment power |
| Voting Agreement controlled shares | 331,600 | August 2010 Family Trust; votes by Mr. Shaw until sold |
| Trustee investment power | 500,000 | Trust for benefit of a family member |
| Options (current) | None outstanding under 2021 Plan | Prior mega-grant terminated Dec 2022 |
| Hedging policy | Prohibits short sales, puts/calls, and hedging transactions for employees and directors | Alignment-positive policy |
Related party economics:
- Technology Licensing Agreement (1995) grants Mr. Shaw 5% of gross sales (and 50% of sublicensing royalties for unknown customers); royalties paid to Mr. Shaw: $3,506,716 in 2024; $3,191,276 in 2023 .
Employment Terms
| Event | Salary Through Date | Benefits | Expense Reimbursement | Undiscounted Salary for 24 Months | 90 Days’ Salary | Value of Payments |
|---|---|---|---|---|---|---|
| Death | Yes | Yes | Yes | — | — | — |
| Disability | Yes | Yes | Yes | $2,424,931 | — | $2,424,931 |
| Termination With Cause | Yes | — | Yes | — | — | — |
| Termination Without Cause | Yes | Yes | Yes | $2,424,931 | — | $2,424,931 |
| Resignation (Other Than After CoC) | Yes | Yes | Yes | — | $299,785 | $299,785 |
| Resignation (After CoC) | Yes | Yes | Yes | $2,424,931 | — | $2,424,931 |
Key contract terms:
- Agreement dated Jan 1, 2008; initial 3-year term; auto-renews for successive two-year periods; terminable on 30 days’ notice or death .
- Change-of-control (CoC) resignation rights include salary through date, 24 months salary, expense reimbursement, and benefits; CoC definitions include 30% voting power acquisition or board turnover majority without prior endorsement; change in ownership defined at >50% .
- Non-compete and non-solicit: one year post-termination, except if termination without cause or CoC; payments are capped to $1 less than 280G parachute thresholds; timing rules for payouts detailed (e.g., six months plus one day for certain triggers) .
- Perquisites: phone, office space, reimbursement for reasonable travel/entertainment, professional dues, and business-related seminars .
Board Governance & Directorship
- Board service: Founder; Chairman; President; CEO; Class 2 Director since inception .
- Dual-role implications: Combined CEO/Chair structure; no Lead Independent Director due to board size; majority independent directors; CEO/Chair role justified by founder/inventor expertise and competitive context .
- Independence and committees: Independent directors are Laterza, Mack, Bigby, and Findley ; all Audit and Compensation & Benefits Committee members are independent; Shaw is not on these committees .
- Committees: Audit (Laterza—financial expert; Bigby; Findley) met 4x in 2024 ; Compensation & Benefits (Laterza; Mack; Bigby; Findley) met 2x; no consultants engaged in 2024 ; Nominating (Laterza; Mack; Findley; Bigby) met 1x .
- Attendance: Board met 4x in 2024; no director below 75% attendance; all directors attended 2024 annual meeting .
- Director pay structure (independent directors): $2,000 per quarter; audit members +$250 per quarter; audit chair +$500 per quarter; 2024 fees ranged $8,000–$10,000 per director .
Compensation Governance & Shareholder Feedback
- Compensation approach emphasizes base salary; bonuses discretionary when cash reserves allow; last executive bonuses in 2021; option grants are rare and historically based .
- Say-on-pay: majorities in favor in 2013, 2016, 2019, 2022; frequency votes favored every 3 years; Board recommends triennial frequency .
- 2021 consultant (Longnecker & Associates) recommended increases and “mega grants” for CEO, CFO, and GC; CEO received $300k bonus, $1mm salary, and 1,000,000 options (later terminated in Dec 2022) .
Related Party Transactions
- Technology Licensing Agreement (1995): Mr. Shaw entitled to 5% royalty on gross sales of licensed products; for sublicenses with unknown customers to RVP, 50% of royalties received by RVP are paid to Mr. Shaw; royalties paid were $3,506,716 (2024) and $3,191,276 (2023) .
Risk Indicators & Red Flags
- Majority ownership and voting control (53.3% beneficial ownership; 51.6% voting control) can concentrate governance power and often determine outcomes (e.g., say-on-pay), raising independence considerations .
- Combined CEO/Chair with no Lead Independent Director, though committees are independent; governance balance relies on committee effectiveness .
- Compensation not linked to financial performance metrics; reliance on salary with discretionary bonuses can reduce pay-for-performance alignment .
- Significant related-party royalty economics to CEO on gross sales (5%); potential conflicts if sale growth disproportionately benefits CEO outside equity framework .
- 2021 mega option grant later terminated (underwater); currently no options outstanding; limited equity-based incentive alignment at present .
Investment Implications
- Alignment: Mr. Shaw’s 53.3% beneficial stake aligns him with long-term equity value, but compensation is primarily fixed salary and royalty streams; absence of performance-linked metrics reduces direct pay-for-performance alignment .
- Governance: CEO/Chair dual role and lack of Lead Independent Director place more weight on committee independence and board oversight; majority independent board and committees mitigate but do not eliminate concentration risk .
- Incentives and selling pressure: No current options outstanding and no recent equity awards; minimal forced selling risks from vesting; hedging prohibited; royalty cash flows to CEO create a non-equity incentive that could conflict with shareholder preferences in certain scenarios .
- Retention/CoC economics: 24-month salary severance under several termination scenarios and robust CoC definitions support retention but create meaningful cash obligations under change events; non-compete/solicit provisions apply except under termination without cause or CoC .
- Performance context: TSR collapsed from 716 to 46.67 over 2020–2024 alongside net income swings; with pay not tied to performance measures, investors should focus on capital allocation, litigation/competitive environment management, and product execution to assess forward value creation under current incentives .