Tom Conrad

About Tom Conrad

Tom Conrad, 55, is Sonos’ Interim Chief Executive Officer and President (appointed January 13, 2025) and a director since March 2017. He holds a B.S.E. in computer science from the University of Michigan and is a seasoned product and technology leader across consumer software and audio streaming . During FY2024, Sonos delivered $1,518.1 million in revenue, Adjusted EBITDA of $107.9 million, and free cash flow of $135 million; NEO annual bonuses paid 0% and PSUs for the FY2024 tranche earned 0% based on below-threshold revenue and margin—evidence of pay-for-performance rigor heading into his tenure .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

Sonos’ executive incentive structure emphasizes revenue and margin with DEI modifiers; FY2024 outcomes paid at zero for NEOs.

• Annual bonus framework (FY2024): 45% revenue, 45% Adjusted EBITDA margin, 10% DEI; revenue and margin below threshold; DEI result waived → 0% payout .

PSUs (FY2024 performance tranches):

• FY2024 tranches (for FY2024, FY2023, FY2022 PSU grants) earned 0.0% based on revenue and Adj. EBITDA margin below threshold .

Tom-specific equity as Interim CEO: $2.65 million RSUs vesting monthly (time-based), no explicit performance conditions tied to this interim grant .

Equity Ownership & Alignment

Implications:

• Monthly vesting RSUs can create steady vest-driven liquidity windows (potential selling pressure) but are offset by stringent ownership guidelines and anti-hedging rules .

Employment Terms

Board Service and Governance

• Director since March 2017; previously chaired the Compensation, People and Diversity & Inclusion (CPD&I) Committee; upon Interim CEO appointment, he stepped down from the CPD&I Chair and membership and ceased serving on any board committee .
• Independence status: Non-independent director while serving as Interim CEO; six of seven directors otherwise independent; Chair and CEO roles remain separated (Chair: Julius Genachowski) .
• Director compensation policy: $55,000 cash retainer; additional retainers for chair/committee roles; ~ $200,000 annual RSU; change-in-control acceleration for director RSUs; deferral optionality used by Conrad .
• Say-on-pay support: >96% approval at 2024 annual meeting; Board recommends annual frequency .

Performance & Track Record Context

Compensation Structure Analysis

• Shift towards retention: Interim CEO package is 100% time-based RSUs with monthly vesting—appropriate for a transitional mandate but lower performance linkage than PSU-heavy structure used for permanent NEOs (50% RSU/50% PSU) .
• Pay-for-performance discipline intact: FY2024 NEO annual bonus and PSU tranches paid at 0%—clear downside alignment when financial thresholds are missed .
• Ownership alignment: Elevated ownership multiples (10x CEO) and 10b5-1, anti-hedging policy support alignment; director RSU deferrals increase long-term exposure .

Investment Implications

• Incentive alignment and downside risk-sharing are robust: zero FY2024 payouts on core incentives, anti-hedging, and rigorous ownership policy reduce misalignment risk during Conrad’s interim leadership .
• Watch monthly vest-driven supply and 10b5-1 plans: the $2.65m RSU grant vesting monthly could create periodic selling pressure; monitor Form 4s and plan adoptions alongside progress on app remediation and product execution .
• Governance quality mitigates dual-role risk: Chairman/CEO split maintained; Conrad is non-independent and off committees, addressing independence concerns; say-on-pay support (>96%) suggests low near-term governance contention .
• Execution pivot is key catalyst: Conrad’s product pedigree (Pandora, Snap, Quibi) aligns with near-term mandate to restore app reliability and customer experience; performance recovery should flow through FY2025–FY2026 PSU tranches for the broader team and margin trajectory .