Leonard Ott
SOCKET MOBILEAbout Leonard Ott
Leonard L. Ott, 66, is Chief Information Officer at Socket Mobile and has held senior technical leadership roles since 2000; he joined the company in 1994 after consulting from 1993–1994 and holds a B.A. in Computer Science from UC Berkeley . His pay is structured with base salary, annual cash incentives tied to revenue and EBITDA vs board-approved plan, and long-term equity (options and restricted stock), aligning incentives to growth and profitability . Company performance used in pay-versus-performance shows a $100 TSR index evolving to $47.30 (2022), $28.43 (2023), and $32.60 (2024), while net income moved to $86,931 (2022), $(1,919,154) (2023), and $(2,242,350) (2024) . Employment terms currently provide six months’ severance, 6 months COBRA, extended option exercise (up to 24 months), pro-rata vesting of unvested RSAs upon certain separations, and 1% of change-of-control consideration if price per share ≥ $5, indicating retention and sale-alignment features .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Socket Mobile | Executive Vice President & Chief Information Officer | Aug 2024–Present | Oversees information security and CIO function; updates to governance note Audit Committee oversight of CIO updates . |
| Socket Mobile | Executive Vice President & Chief Technical Officer (incl. technical marketing) | Jan 2019–Aug 2024 | Led technical marketing and technology strategy at EVP level . |
| Socket Mobile | Vice President of Engineering & Chief Technical Officer | Oct 2013–Jan 2019 | Combined engineering leadership with CTO responsibilities . |
| Socket Mobile | Vice President & Chief Technical Officer | Oct 2000–Oct 2013 | Senior technical leadership through multiple product cycles . |
| Socket Mobile | Engineering Consultant; then Engineering roles | Nov 1993–Mar 1994 (consultant); Mar 1994–2000 (employee) | Early product development and engineering; progression to VP/CTO . |
External Roles
No external public company directorships or outside roles for Mr. Ott are disclosed in the latest proxy .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $219,750 | $232,500 | $246,000 (increased to $252,000 effective Jul 1, 2024) |
| Total Reported Compensation ($) | $323,242 | $280,500 | $329,706 |
Performance Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Annual Cash Incentive Metric(s) | Revenue and EBITDA vs Board-approved annual plan | Revenue and EBITDA vs plan | Revenue and EBITDA vs plan |
| Target Bonus ($) | $55,000 | $80,000 | $80,000 |
| Attainment (%) | 41.6% | 0% | 10% |
| Payout ($) | $22,892 | $0 (no non-equity incentive reported) | $8,000 |
| Weighting | Not disclosed | Not disclosed | Not disclosed |
| Vesting | Cash; N/A | Cash; N/A | Cash; N/A |
| Performance RSAs Granted | 20,000 (5/3/2022, performance-based) | — | — |
| Performance RSAs Vesting Terms | Vest upon attainment of specified performance goals | — | — |
Equity Ownership & Alignment
- Beneficial ownership: 170,885 shares (2.1% of outstanding) as of April 4, 2025; includes 35,801 options exercisable within 60 days .
- No pledging or hedging disclosures for Mr. Ott; company prohibits loans to officers/directors and maintains an insider trading policy .
- Stock ownership guidelines are not disclosed; executives receive annual refresher RSAs and options per plan .
Options – Outstanding (12/31/2024)
| Grant | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration |
|---|---|---|---|---|
| 2/15/2019 grant | 20,000 | — | 1.90 | 2/15/2029 |
| 6/25/2024 exchange grant | 8,619 | 60,331 | 1.12 | 6/25/2034 |
Options – 2024 Exchange Grants
| Grant Date | Options (#) | Exercise Price ($) | Grant-Date Fair Value ($) |
|---|---|---|---|
| 6/25/2024 (exchange) | 68,950 | 1.12 | $53,926 |
Restricted Stock – Unvested (12/31/2024)
| Grant Date | Unvested Shares (#) | Market Value ($) | Future Vesting Dates |
|---|---|---|---|
| 2/1/2021 | 7,200 | $9,576 (at $1.33) | Feb 1, 2025 |
| 2/1/2022 | 7,280 | $9,682 | Feb 1, 2025 & Feb 1, 2026 |
| 2/21/2023 | 18,977 | $25,239 | Feb 1, 2025–2027 |
| 3/15/2024 | 22,000 | $29,260 | Feb 1, 2025–2028 |
| Performance RSAs (5/3/2022) | 20,000 (unearned) | $26,600 | Vests upon meeting performance goals |
- Standard RSA vesting cadence: 15% after year 1, 20% after year 2, 25% after year 3, 40% after year 4 .
Employment Terms
| Term | Current Provision |
|---|---|
| Agreement Expiration | Extended Aug 9, 2024; new expiration March 31, 2026 . |
| At-Will | Employment at will; termination can occur at any time . |
| Severance (Involuntary, not for cause / Good Reason) | Lump-sum equal to six months base salary; COBRA premiums up to 6 months; equipment purchase at book value; extended option exercise window up to 24 months; pro-rata vesting of unvested RSAs; long-tenured employees (>10 years) can exercise vested options to original expiration . |
| Change-of-Control Economics | Additional payment equal to 1% of total consideration if offer price ≥ $5/share, plus severance terms above . |
| Auto-Renewal Notice | If company fails to provide renew/non-renew notice ≥6 months prior to expiration, agreement expires six months following notice date . |
| Clawbacks / Tax Gross-ups | No tax gross-ups under 280G/409A; clawback policy not specified in proxy . |
| 1998 Bonus Pool | Up to 10% of acquirer consideration allocated among executives/employees at Board discretion (sale windfall) . |
Compensation Structure Analysis
- 2024 option exchange program reset underwater options at market ($1.12) with full 10-year term and new vesting; Ott exchanged 68,950 options, enhancing retention but introducing dilution; no incremental accounting expense under ASC 718 .
- Cash incentives paid only on achieved performance: Ott earned 10% of target ($8,000) in 2024, zero in 2023, and 41.6% in 2022 ($22,892), evidencing pay sensitivity to annual revenue/EBITDA outcomes .
- Long-term equity heavily time-based RSAs with multi-year vesting, plus performance RSAs (20,000 from 2022) contingent on goals, aligning with long-term share price and operating execution .
Risk Indicators & Red Flags
- Option repricing/exchange: Shareholder-approved 2024 program replaced underwater options, a potential governance concern but framed for retention; Ott participated (68,950 options at $1.12) .
- Related party financings: Convertible notes purchased by other insiders (CEO and directors), increasing insider influence on capital structure; not specific to Ott .
- No disclosures of pledging/hedging by Ott; Section 16 compliance affirmed for 2024 .
- No executive perquisites; no tax gross-ups; mitigates shareholder-unfriendly pay features .
Equity Ownership & Alignment (Snapshot)
| Holder | Shares Beneficially Owned | % Outstanding | Notes |
|---|---|---|---|
| Leonard L. Ott | 170,885 | 2.1% | Includes 35,801 options exercisable within 60 days . |
Expertise & Qualifications
- Education: B.A. in Computer Science, UC Berkeley .
- Tenure: Consultant in 1993–1994; employee since 1994; successive promotions to VP/CTO (2000), EVP/CTO (2019), and CIO (2024) .
- Functional depth: Technical marketing leadership, information security oversight to Audit Committee, and long-term product/engineering stewardship .
Say-on-Pay & Governance (Context)
- Compensation Committee: Independent directors (Parnell—Chair, Lazarev; Hartmann not seeking re-election) with charter authority and ability to retain independent consultants .
- Annual say-on-pay advisory vote recommended for approval by Board; compensation philosophy targets median–75th percentile vs similar-sized regional peers, with variable comp tied to revenue and EBITDA .
Investment Implications
- Retention and sale alignment: Six-month cash severance, extended option exercise, pro-rata RSA vesting, and a 1% change-of-control kicker at ≥$5/share plus a legacy 10% sale bonus pool create powerful stay/sale incentives; this can reduce near-term attrition risk and might bias executives toward strategic alternatives if valuation thresholds are met .
- Supply overhang risk: Significant unvested RSAs across 2021–2024 with scheduled vesting each Feb 1 from 2025–2028 could introduce periodic sell pressure; however, absence of Form 4s in our search and no recorded 2024 option exercises by Ott suggests limited recent selling activity from him based on available filings .
- Performance sensitivity: Cash bonuses paid only when revenue/EBITDA targets are met (10% in 2024; zero in 2023; 41.6% in 2022), indicating pay-for-performance discipline; continued losses in 2023–2024 and low TSR index values could constrain future payouts absent operational improvement .
- Governance trade-offs: The 2024 option exchange supports retention but is a classic red flag to some investors; the lack of tax gross-ups and perquisites offsets this by keeping pay structures lean and aligned .