David Sperling
SMITH MICRO SOFTWAREAbout David Sperling
David P. Sperling is Vice President and Chief Technology Officer (CTO) at Smith Micro (SMSI). He joined the company in 1989, became Director of Software Engineering in 1992, and has served as CTO since 1999; he holds a B.S. in Computer Science and an M.B.A. from the University of California, Irvine, and is a named inventor on five company patents in Internet/connectivity technologies . As of April 23, 2025, he is 56 years old and continues to serve as a key executive officer . Company-level pay-for-performance context: recent executive incentives have tied outcomes to revenue and non-GAAP operating expense targets; company TSR values disclosed in “Pay vs Performance” were $19.73, $37.05, and $43.21 (value of $100 initial investment) for 2024, 2023, 2022, respectively, alongside net losses of $(48.7)mm, $(24.4)mm, and $(29.3)mm, respectively .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Smith Micro Software, Inc. | Software Engineer | 1989–1992 | Early product engineering contributor . |
| Smith Micro Software, Inc. | Director of Software Engineering | 1992–1999 | Led software engineering; scaled development processes . |
| Smith Micro Software, Inc. | Chief Technology Officer | 1999–Present | Technology strategy and product leadership; named inventor on five company patents . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | No public company directorships or external roles disclosed in recent proxies . |
Fixed Compensation
Policy-level changes (companywide for NEOs and other key executives; SMSI does not disclose CTO-specific base in recent proxies):
| Component | Design/Change | Effective Period | Notes |
|---|---|---|---|
| Base Salary | 10% reduction to base salaries for NEOs and other key executives | Since Mar 2023; continued through 2024 and “to date” | Cost-structure alignment; applies to “other key executives” in addition to NEOs . |
| Discretionary Cash Bonuses | Suspended | Beginning Q2 2023 and throughout 2024 and “to date” | Replaced with performance-based restricted stock awards, equal in value to target bonuses for applicable quarters . |
| Corporate Incentive Cash Bonus | Suspended | Q2–Q4 2023; all quarters of 2024 | Replaced with performance-based restricted stock; same metrics (revenue, non-GAAP opex) applied . |
Performance Compensation
Incentives for executives (including “other key executives”) have been tied to quarterly revenue and non-GAAP operating expense objectives; with cash bonuses suspended, equivalent-value restricted stock awards were granted with vesting conditioned on the same metrics . The plan weights revenue and non-GAAP operating expense equally for target bonuses .
| Quarter (Measurement) | Metric | Weighting | Target ($000s) | Actual ($000s) | Payout Mechanism/Vesting |
|---|---|---|---|---|---|
| Q4 2023 | Revenue | 50% | 14,248 | 8,593 | Performance-based restricted stock in lieu of cash; vesting per attainment . |
| Q4 2023 | Operating Expenses (non-GAAP) | 50% | 7,957 | 7,978 | Same as above . |
| Q1 2024 | Revenue | 50% | 5,704 | 5,798 | Same as above . |
| Q1 2024 | Operating Expenses (non-GAAP) | 50% | 8,150 | 8,088 | Same as above . |
| Q2 2024 | Revenue | 50% | 6,001 | 5,140 | Same as above . |
| Q2 2024 | Operating Expenses (non-GAAP) | 50% | 8,063 | 7,533 | Same as above . |
| Q3 2024 | Revenue | 50% | 7,642 | 4,648 | Same as above . |
| Q3 2024 | Operating Expenses (non-GAAP) | 50% | 9,067 | 6,815 | Same as above . |
Long-term equity mix and vesting design for executives in 2024 (general plan mechanics):
| Award Type | Structure | Performance Criteria | Vesting |
|---|---|---|---|
| Restricted Stock (annual LTI) | 50% time-based; 50% performance-based | 2024 annual revenue target and non-GAAP operating expense target; proportional attainment caps at performance portion | Time-based vests monthly over 4 years; performance-earned shares: 25% at determination date, balance monthly over next 36 months . |
| Restricted Stock (in lieu of cash bonuses) | Granted quarterly at target bonus value ÷ prior-day close | Quarterly revenue and non-GAAP opex targets | Vests based on quarterly metric attainment (mirrors cash plan) . |
Equity Ownership & Alignment
| Topic | Disclosure |
|---|---|
| Current Beneficial Ownership (Sperling) | Not itemized in 2024–2025 proxy ownership tables (Sperling is listed as a key executive but not as an NEO or director in those tables) . |
| Outstanding Equity Design | Executive grants comprise restricted stock with a 50/50 split between time and performance tranches; monthly vesting over 4 years; performance tranche tied to revenue and non-GAAP opex . |
| Change-of-Control (COC) | Company restricted stock awards under the Equity Plan provide for full vesting (acceleration) upon a “Change of Control” (single-trigger on equity) . |
| Hedging/Pledging | Company prohibits directors, officers, employees from engaging in hedging transactions absent written approval; no such approvals were granted. Pledging not expressly addressed in proxies . |
| Ownership Guidelines | Not disclosed in recent proxies . |
Employment Terms
| Term | Detail |
|---|---|
| Employment Start | Joined in 1989; CTO since 1999 . |
| Contract | Recent proxies disclose no employment agreements for NEOs other than a specific CEO agreement; employment for NEOs is at-will. No separate CTO contract disclosed . |
| Severance | No individual severance multiple disclosed for CTO; equity awards accelerate on Change of Control (see above) . |
| Non-Compete/Non-Solicit | Not disclosed in recent proxies . |
| Clawbacks | Not specifically disclosed beyond standard plan/insider trading policy disclosures . |
Performance & Track Record
| Indicator | Recent Disclosure |
|---|---|
| Company TSR (Value of $100) | 2024: $19.73; 2023: $37.05; 2022: $43.21 (company-reported “Pay vs Performance”) . |
| Net Income (Loss) | 2024: $(48,697)k; 2023: $(24,396)k; 2022: $(29,279)k . |
| Role-linked Achievements | CTO tenure since 1999; inventor on five patents supporting Internet/connectivity product areas . |
Governance, Compensation Committee, and Say-on-Pay Context
| Topic | Key Point |
|---|---|
| Compensation Committee | Independent directors; no external compensation consultants engaged in 2024; metrics emphasize revenue and non-GAAP operating expense; management input utilized . |
| Say-on-Pay 2024 | Votes: For 2,038,235; Against 1,305,541; Abstain 348,392; Broker non-votes 2,125,371 . |
Risk Indicators & Red Flags
- Equity acceleration: single-trigger vesting of restricted stock on Change of Control; while alignment for deal support, single-trigger equity can create retention risk post-transaction if not combined with stay-put arrangements .
- Cost actions: sustained 10% salary reduction and suspension of cash bonuses replaced by equity can introduce sell-pressure upon vesting, depending on insider liquidity needs (no Form 4 detail provided in proxies) .
- Hedging: prohibited (no approvals granted), reducing misalignment risk .
Compensation Structure Analysis
| Observed Shift | Implication |
|---|---|
| Shift from cash bonuses to performance-vested equity (Q3 2023 onward) | Converts near-term cash into equity with performance conditions; heightens alignment with revenue/opex outcomes; increases exposure to stock price volatility . |
| 10% salary cuts (since Mar 2023) | Cost discipline; raises retention risk if equity value underperforms and cash remains constrained . |
| LTI performance mix (50% perf/50% time) | Balanced retention and performance leverage; performance calibration tied to revenue and non-GAAP opex . |
Investment Implications
- Alignment: Sperling’s incentives are tied to revenue growth and non-GAAP opex control through performance-vested equity, with quarterly vesting in lieu of cash bonuses—clear line-of-sight metrics that can support operating discipline but also amplify dilution/sell-pressure at vesting if shares underperform .
- Retention risk: Extended salary reductions and no cash bonuses (since Q2 2023) indicate tight cash management; continued reliance on equity may pressure retention if vesting values remain low given company TSR and net losses .
- Change-of-control: Single-trigger equity acceleration promotes deal support but may reduce post-close retention absent separate stay packages; model for potential one-time equity unlock in M&A scenarios .
- Governance signal: 2024 say-on-pay passed but with notable opposition; committee did not use consultants and focused metrics on revenue/opex, suggesting straightforward but narrow performance focus amid turnaround dynamics .
Note: Recent proxies do not disclose Sperling’s personal share ownership, pledging status, or individual severance multiples; Form 4 activity should be monitored around vesting events and trading windows to assess insider selling pressure.