Stephen J. Bagley
About Stephen J. Bagley
Stephen J. Bagley, CPA, has served as Chief Financial Officer of Sono‑Tek (SOTK) since June 2005. He holds a B.S. from SUNY Oneonta and an MBA from Marist College and was licensed as a CPA in 1990 . As CFO, he regularly attends Board meetings to facilitate risk oversight and information flow between management and the Board . Company pay‑versus‑performance disclosures show net income of $1,273,414 in FY2025, $1,441,463 in FY2024, and $635,905 in FY2023; the company reported zero cumulative TSR for FY2025 and FY2024 under its methodology, and 4.85 for FY2023 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Sono‑Tek Corporation | Chief Financial Officer | 2005–present | Regular Board meeting attendee providing risk and financial oversight linkage between management and the Board |
| Various private companies (up to $45M revenue) | Controller, CFO, VP Finance | 1992–2005 | Senior finance leadership across multiple companies |
| Public accounting firms | Auditor/Staff roles | 1987–1991 | Foundation in accounting and audit |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| OTCQX US Advisory Council | Member | 2019–2020 | Advisory capacity to OTCQX |
| New Paltz Central School District | Board of Education President; Chair, Audit & Finance Committee | Past | Community leadership roles (dates not specified) |
Fixed Compensation
| Metric (USD) | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Base Salary (paid) | $174,800 | $176,500 | $185,000 |
| Annual Bonus (paid) | $18,500 | $44,000 | $37,400 |
| All Other Compensation (401k company contribution) | $5,799 | $6,600 | $7,200 |
| Total Compensation | $206,599 | $234,600 | $254,600 |
| Base Salary Rate (disclosed) | — | $175,000 until Jan 2024, then $185,000 | $185,000 |
Notes:
- Bonuses are based on achievement of operating objectives; specific metrics/weights not disclosed .
Performance Compensation
| Component | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Option Awards (grant date fair value) | $7,500 | $7,500 | $25,000 |
| Stock Awards (RSUs/PSUs) | $0 | $0 | $0 |
Program design and metrics:
- Annual cash bonus: Based on “achievement of certain operating objectives” (no public disclosure of metrics, targets, or weighting) .
- Equity vehicle and vesting: Options generally not exercisable for 1 year from grant, with remaining vesting in cumulative installments over a 3‑year period; strike price at or above fair market value on grant date .
Equity Ownership & Alignment
| Item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Beneficial Ownership (shares) | 60,694 (incl. 6,162 options currently exercisable) | 63,511 (incl. 11,479 options currently exercisable) | 55,323 (incl. 15,177 options currently exercisable) |
| Ownership % of shares outstanding | <1% | <1% | <1% |
Outstanding options (as of FY2025 year‑end) – Stephen J. Bagley:
| Exercisable | Unexercisable | Exercise Price | Expiration |
|---|---|---|---|
| 2,750 | — | $4.45 | 01/15/2031 |
| 9,804 | — | $6.26 | 02/17/2032 |
| 1,575 | 394 | $5.96 | 11/17/2032 |
| 1,048 | 1,281 | $5.00 | 11/16/2033 |
| — | 9,653 | $4.12 | 08/22/2034 |
Policy alignment:
- Insider Trading Policy prohibits trading on MNPI and bans hedging/monetization transactions (e.g., puts, calls, shorts). Pledging was not specifically disclosed .
- Clawback Policy (Rule 10D‑1 compliant) permits recoupment of performance‑based pay following a financial restatement and for fraud or intentional/gross misconduct contributing to a restatement .
Employment Terms
Change‑in‑Control (CIC) protections:
- Pre‑amendment (disclosed in 2024–2025 proxy): Double‑trigger CIC severance equal to two years of annual base, commissions and bonus paid for the previous calendar year; estimated payout if triggered based on prior year: Bagley $471,000 (FY2025 proxy) and $394,000 (FY2024 proxy) .
- Amended on Nov 5, 2025 (8‑K): Company terminated prior agreements and entered new Executive Agreements for CEO, Executive Chairman, CFO, and COO. New double‑trigger CIC severance equals (i) two years of base salary in effect at CIC plus (ii) all bonus/commission compensation paid for the previous two calendar years (or shorter employment period) immediately preceding the CIC; also includes an expanded “Resignation for Good Reason,” and a post‑CIC “window” resignation right between the 1‑year anniversary of CIC and six months thereafter (if continuously employed through that anniversary) .
- Equity awards: 2023 Stock Incentive Plan provides for automatic full vesting and release from forfeiture immediately prior to a Change in Control or, if not assumed/replaced, upon certain Corporate Transactions (single‑trigger for equity, separate from cash severance) .
Non‑CIC severance:
- Separate severance agreement provides two weeks of compensation for each full year of service if terminated other than for cause .
Other terms:
- At‑will employment; New York governing law; Section 409A safeguards included in Executive Agreements .
Related party transactions:
- None disclosed with related persons .
Performance & Track Record
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Net Income (USD) | $635,905 | $1,441,463 | $1,273,414 |
| Cumulative TSR (Initial $100 Investment) | 4.85 | 0.00 (no change per company method) | 0.00 (decline per company method) |
Other disclosures:
- As CFO, Bagley regularly attends Board meetings, supporting risk oversight .
- He signed multiple SEC filings on behalf of the company, including the 2025 annual meeting 8‑K .
Compensation Structure Analysis
- Mix shift toward equity in FY2025: Option award grant‑date fair value rose to $25,000 in FY2025 from $7,500 in FY2024 and FY2023, while cash bonus decreased year‑over‑year (from $44,000 in FY2024 to $37,400 in FY2025) .
- No RSUs/PSUs disclosed; equity incentives are options with at‑market strike prices and standard 1‑year cliff and 3‑year cumulative vesting .
- CIC cash protections increased on Nov 5, 2025: payout basis expanded from prior‑year bonus/commissions to the previous two years, and added a resignation “window,” enhancing executive protection and potentially increasing CIC payouts .
- Equity plan includes single‑trigger acceleration on Change in Control (awards fully vest absent assumption/replacement), which can increase equity realization at transaction close .
Say‑on‑Pay & Shareholder Feedback
| Proposal (Aug 21, 2025) | For | Against | Abstain | Broker Non‑Votes |
|---|---|---|---|---|
| Advisory vote on executive compensation | 6,793,102 | 201,778 | 240,689 | 5,153,415 |
| Frequency of Say‑on‑Pay (recommendation) | — | — | — | — |
| One‑Year: 3,451,908; Two‑Year: 202,721; Three‑Year: 3,452,160 |
Investment Implications
- Alignment and retention: Long CFO tenure (since 2005) and expanded CIC protections (two‑year salary plus prior two years’ variable pay, with Good Reason enhancements) reduce retention risk in strategic scenarios but raise potential CIC cash outlays .
- Equity leverage vs. ownership: Beneficial ownership remains <1%, though option holdings are meaningful with standard vesting; equity plan’s single‑trigger acceleration on CIC increases equity realizable value upon a transaction .
- Pay‑for‑performance: Annual bonuses are tied to operating objectives but lack public metric disclosure. The company’s disclosed net income rose materially from FY2023 to FY2024 and moderated in FY2025; TSR (company methodology) was flat/down in FY2024–FY2025, indicating mixed shareholder return alignment in recent periods .
- Governance safeguards: Clawback policy (Rule 10D‑1 compliant) and hedging prohibitions enhance incentive integrity; no related party transactions disclosed .