William W. Smith, Jr.

About William W. Smith, Jr.

William W. Smith, Jr. is Chairman, President, and Chief Executive Officer of Smith Micro Software, Inc., a role he has held since co-founding the company in 1982; he is 77 years old and holds a BA in Business Administration from Grove City College . Prior roles include technical and sales leadership at Rockwell International (1975–1984), Xerox Data Systems (1972–1975), and RCA Computer Systems (1969–1972), giving him >50 years of telecom and software operating experience . Under his leadership, SMSI reported FY 2023 revenue of $40.9M amid restructuring following loss of a Tier-1 U.S. carrier contract; gross profit was $30.3M and GAAP net loss was $24.4M . In 2025 year-to-date (nine months), revenue was $13.4M versus $15.6M in 2024 YTD, with non-GAAP net loss improving to $8.2M from $11.8M, and Q3 2025 quarterly revenue of $4.3M versus $4.6M in Q3 2024 . Pay-versus-performance disclosures show the value of a hypothetical $100 investor position at $43.21 (2022), $37.05 (2023), and $19.73 (2024), evidencing shareholder returns pressure over the period .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

• Equity compensation replaced cash bonuses (discretionary and corporate incentive plan) in Q3–Q4 2023 and all quarters of 2024; vesting of these restricted shares aligns to quarterly revenue and non-GAAP operating expense targets .
• Annual long-term grants vest 50% time-based monthly; 50% tied to 2024 annual revenue and non-GAAP opex targets; performance-earned shares vest 25% upon determination and ratably over 36 months thereafter .

Equity Ownership & Alignment

• Beneficial ownership (CEO interests) and breakdown:

• Outstanding equity awards (unvested restricted stock; vest monthly unless noted):

• Hedging and pledging: Company policy prohibits hedging by directors/officers without prior approval; no such approvals disclosed . The warrant instrument permits pledging of the warrant or underlying shares in bona fide margin/secured loans; no disclosure that the CEO has pledged these securities .

• Insider selling pressure indicators:

  • Regular monthly tax-withholding via share surrender (issuer acquisition/cancellation) is disclosed and included in 2023 Q4 issuer purchases; Mr. Smith had monthly withholding transactions reported in Oct/Nov 2024 (filed Oct 22 and Dec 18, 2024), indicating ongoing vesting-related share surrenders rather than open-market selling .

Employment Terms

• Change of control: Restricted stock awards automatically become fully vested upon a “Change of Control” under the Equity Plan (single-trigger acceleration) .
• Legacy retirement benefit: A June 2005 agreement grants Mr. Smith a lifetime payment of $6,000 annually, increasing 5% per year, commencing upon retirement/resignation; the company may discharge its obligation by purchasing a single premium annuity (~$65,000 estimated cost) .
• Clawback: SMSI maintains a Nasdaq/Exchange Act 10D-1 compliant clawback policy enabling recovery of erroneously awarded incentive-based compensation after an accounting restatement; no indemnification for clawed back amounts .

Board Governance

• Board roles: Mr. Smith serves as combined Chairman and CEO; Board determined all directors other than Mr. Smith are independent per Nasdaq/SEC rules; the Board does not have a Lead Independent Director .
• Committees and roles:
  • Audit Committee: Campbell (Chair), Gulko, Keddy, Szabo; oversight includes cybersecurity risk; all members independent .
  • Compensation Committee: Campbell, Elfman, Gulko; administers executive pay and Equity Plan; all members independent .
  • Governance & Nominating Committee: Arno, Campbell, Elfman; all independent .
  • M&A Committee: Arno, Elfman, Sharma, Szabo; all independent .
• Board activity: 11 meetings in 2024; each director attended at least 75% of aggregate Board/committee meetings; independent directors meet in executive session without the CEO .

Director Compensation (Board Service)

• Non-employee directors receive $7,500 quarterly fees, subject to a temporary 10% reduction since March 2023; each received a 3,125-share restricted stock grant at $6.24/share on Jan 16, 2024, vesting over 12 months; Mr. Smith receives no separate director compensation .
• 2024 director totals per director: $27,000 cash + $19,500 stock = $46,500 .

Performance & Track Record

• CEO alignment and financing support: On Nov 5, 2025, SMSI announced two financings totaling ~$2.65M, including a committed $1.5M investment by Mr. Smith (private placement shares and warrants at $0.6708) aimed at working capital and general corporate purposes .

Related Party Transactions

• Oct 1, 2024 Private Placement: Smith Living Trust (co-trustees: Mr. Smith and spouse) purchased 2,575,107 unregistered shares at $1.165 and received warrants for 2,575,107 shares at $1.04, exercisable 6 months post-issuance, expiring five years; stockholder approval for issuance beyond 19.99% (Nasdaq 5635(b)) obtained Dec 10, 2024 .
• Oct 1, 2024 Registered Direct Offering: Institutional investors, including a director-managed entity, purchased 3,321,881 registered shares at $1.165 and received concurrent private warrants; aspects amended in Jan 2025 for early exercisability; proceeds ~$3.9M .

Risk Indicators & Red Flags

• Going concern and liquidity: 10-K discloses substantial doubt about ability to continue as a going concern absent additional capital or operational improvements; outlines potential actions (cost cuts, credit lines, asset sales/IP licensing) .
• Nasdaq listing risk: Company previously received minimum bid price deficiency notice (Dec 2023) and warns of possible delisting if requirements not met; reverse split executed April 10, 2024 (1-for-8) to address compliance .
• Customer concentration: FY 2023 revenues concentrated among three customers (41%, 35%, 13%); loss of a Tier-1 family safety contract (effective June 30, 2023) materially impacted revenue trajectory .

Compensation Structure Analysis

• Mix shifts: Management and Board implemented 10% base salary cuts since March 2023 and suspended cash bonuses from Q2 2023 onward, replacing with performance-tied restricted stock—moving pay toward equity and at-risk structures amid liquidity constraints .
• Performance rigor: Quarterly targets emphasize revenue and non-GAAP operating expense discipline with explicit attainment frameworks; annual LTI includes dual metrics (revenue and opex) limiting windfalls .
• Change-of-control terms: Single-trigger acceleration of restricted stock upon CoC; shareholder-alignment benefits but can be generous for executives in an acquisition scenario .
• Clawback readiness: SEC/Nasdaq-compliant recoupment policy enhances governance and pay-for-performance integrity .

Investment Implications

• Alignment and dilution: Smith’s large beneficial stake (~26–28%) and recent $1.5M investment support alignment; however, Trust-held warrants (2.575M shares) and broader warrant structures create potential future dilution (subject to Exchange Cap approvals), which the Board has been actively managing via special meetings (Oct 16, 2025 vote approved exercising beyond 20% thresholds) .
• Execution risks: Restructuring and cost controls are visible in improved non-GAAP losses and rising gross margins; yet sustained revenue growth hinges on carrier deployments and subscriber growth, a key watch item given prior contract loss and customer concentration .
• Governance profile: Combined Chair/CEO without a lead independent director elevates independence scrutiny; offset partially by active independent committees, executive sessions, and audit oversight including cybersecurity .
• Liquidity pathway: Financing flexibility, including CEO participation and Board-approved equity plan expansions (additional shares authorized for Equity Plan and ESPP), provide near-term capital runway but increase share overhang considerations until operations inflect .