Michael Zagorsek
About Michael Zagorsek
Michael Zagorsek, age 50, is Chief Operating Officer of SoundHound AI, Inc. and has served in senior leadership since at least 2020, with a formal COO employment agreement executed June 2, 2022 . He holds a B.Com (Carleton University, 1997), an MA in International Management/Marketing (University of Bradford, 1998), and a certificate from Rennes School of Business (1996) . Company performance context: SoundHound reported 2024 revenue of $84,693 thousand and a net loss of $350,681 thousand, and highlighted pay-versus-performance tracking against total shareholder return and a peer group, with revenue, adjusted EBITDA, and annual recurring revenue as the primary performance measures for executive pay linkage .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Leap Motion | VP Product Marketing | 2012–2014 | Led product marketing for novel human-computer interaction platform |
| Apple | Director of Web Production | 2007–2010 | Directed worldwide interactive marketing/web production for major product launches and retail/online channels |
| Ogilvy (OgilvyOne) | Management Supervisor (IBM) | 2005–2007 | Led global interactive marketing teams for IBM |
| Arnold Worldwide | Management Supervisor (Volkswagen) | 2003–2005 | Managed worldwide interactive marketing for VW |
| Publicis Sapient (Sapient) | Manager (Strategy Consulting) | 1999–2002 | Strategy consulting across digital programs |
External Roles
No public-company directorships or external board roles are disclosed in SoundHound’s proxy or 10-K .
Fixed Compensation
Multi-year cash compensation details:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 308,958 | 350,000 | 385,000 (annualized base reached $434,000 as of 12/31/24) |
| Target Bonus ($) | 52,500 | 210,000 | 250,250 |
| Bonus Earned ($) | — (not disclosed) | 100,501 | 187,687 |
| Bonus Actually Paid ($) | — | 54,181 (25% discretionary reduction) | 125,125 (50% discretionary reduction) |
Notes:
- Base salaries were market-adjusted effective August 1, 2024; Zagorsek’s annualized base rose to $434,000 as of year-end 2024 .
- The Compensation Committee exercised discretion to reduce cash bonus payouts (25% of earned for FY23; 50% of target for FY24) based on overall financial situation .
Performance Compensation
Annual incentive design (company-wide plan for NEOs):
| Metric | Weighting | FY 2024 Achievement | Payout Decision |
|---|---|---|---|
| Revenue | 25% | 100% achieved (specific targets undisclosed) | Committee reduced payouts to 50% of target for all NEOs |
| Adjusted EBITDA (Year-End) | 25% | 0% achieved | As above |
| Annual Recurring Revenue | 25% | 100% achieved | As above |
| Individual Performance | 25% | 100% achieved | As above |
Long-term performance equity:
- 200,000 PSUs granted in 2022 with four equal 25% tranches contingent on: trailing-12-month GAAP revenue ≥ $100M; trailing-12-month cash-flow positive; 90-day average stock price ≥ $15; and ≥ $20 .
- Company disclosed PSUs as “not currently expected to be achieved” for reporting purposes as of 12/31/2024, but they remain outstanding with the above hurdles .
Equity Ownership & Alignment
Current and outstanding equity, vesting, and option profile:
- Beneficial ownership: 1,280,753 Class A shares as of March 27, 2025; includes 722,311 shares issuable upon exercise of options exercisable within 60 days and 86,112 shares issuable upon RSU vesting within 60 days; <1% ownership of Class A .
- Outstanding unvested stock awards (12/31/2024):
- Unvested RS/RSU tranches: 106,250 (8/4/2022); 50,000 (9/7/2022); 194,444 (8/3/2023); 666,667 (8/1/2024) with respective market values (based on $19.84 closing price at 12/31/24): $2,108,000; $992,000; $3,857,769; $13,226,673 .
- Unearned PSUs: 200,000; market/payout value $3,968,000 at $19.84 reference .
- 2024 equity grants: 750,000 service-vesting restricted stock granted 8/1/2024; vesting 1/36 monthly beginning 9/1/2024 (aggregate grant-date fair value $3,495,000) .
- Prior employment equity (granted 2022): 300,000 RSUs (4-year quarterly from 5/1/2022) and 225,000 RSUs (3-year monthly from 8/1/2022) .
- Options profile (selected tranches):
- 138,905 @ $2.18; expiring 9/6/2027
- 138,907 @ $2.90; expiring 8/15/2029
- 444,499 @ $3.67; expiring 10/27/2030
- Hedging/pledging: Company policy prohibits hedging strategies and pledging/margin accounts for executives/directors .
- Insider transactions (selling pressure context):
- 12/18/2024: Form 4 reflects option exercises and sale (e.g., sale of 138,906 shares at $22.50), with attorney-in-fact signature recorded; typical around vest/exercise events .
- 09/22/2025: Form 4 shows sale of 69,837 shares solely to satisfy tax-withholding obligations on RSU vesting from 2022–2025 grants; post-transaction direct beneficial holdings of 1,860,790 shares .
Employment Terms
- Agreement date: June 2, 2022 (COO Employment Agreement) .
- Target bonus: 60% of annual base salary; cap 150% of base; annual bonus based on company performance objectives .
- Severance: If terminated without Cause or resigned for Good Reason, 3 months base salary continuation and 3 months COBRA premiums .
- Change-in-control (double-trigger within 3 months pre/post or 12 months post CoC): 12 months base salary and 12 months COBRA; acceleration for time-based options and RSUs; PSUs may be accelerated in negotiation of CoC transaction .
- Potential payments table (as of 12/31/2024):
- Without Cause/Good Reason: $108,500 base continuation; $282,100 accrued bonus; total $390,600 .
- Change-in-Control: $434,000 base continuation; $282,100 accrued bonus; $24,152,442 acceleration of unvested stock units; $7,250 health benefits; total $24,875,792 .
- Clawback: Executive Compensation Clawback Policy adopted November 2, 2023; mandatory recovery of erroneously awarded incentive-based compensation in event of restatement; 2023 recovery analysis concluded no clawback triggered .
Equity Grants & Vesting Schedules (Detail)
| Award Type | Grant Date | Shares | Vesting Schedule | Notes |
|---|---|---|---|---|
| RSUs | 05/01/2022 (commencement) | 300,000 | 4-year, equal quarterly installments from 5/1/2022 | Under 2022 Incentive Award Plan |
| RSUs | 08/01/2022 (commencement) | 225,000 | 3-year, equal monthly installments from 8/1/2022 | Under 2022 Plan |
| PSUs | 07/20/2022 (effective upon S-8) | 200,000 | 4-year performance period; 25% tranches for REV≥$100M TTM, cash-flow positive TTM, 90-day price ≥$15, ≥$20 | Under 2022 Plan |
| Restricted Stock (service-vesting) | 08/01/2024 | 750,000 | 1/36 monthly from 9/1/2024 | Grant-date FV $3,495,000 |
Multi-Year Compensation Summary (SEC-reported)
| Component ($) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary | 308,958 | 350,000 | 385,000 |
| Stock Awards | 4,302,250 | 773,500 | 3,495,000 |
| Non-Equity Incentive (Cash) | — | 54,181 | 125,125 |
| Bonus | 52,500 | — | — |
| Total | 4,663,708 | 1,177,681 | 4,005,125 |
Performance & Track Record
- FY 2024 results context: SoundHound reported revenue of $84,693 thousand and net loss of $350,681 thousand; company noted non-cash mark-to-market increases in contingent liabilities tied to year-end stock price impacting net loss by ~$223 million .
- Strategic initiatives: SoundHound closed acquisitions of SYNQ3 (Jan 2024) and Amelia (Aug 2024) to expand restaurant voice ordering and enterprise AI capabilities, with integration and synergy execution cited as ongoing risks/opportunities .
Compensation Structure Analysis
- Mix and trend: Equity dominates overall pay; 2024 stock grants ($3.495M) substantially exceed cash salary ($385k) for Zagorsek, reflecting retention-focused, at-risk compensation .
- Shift to service-based restricted stock awards in 2024 alongside prior RSUs and PSUs indicates emphasis on time-based retention with long vesting (36 months) and performance-linked upside via PSUs .
- Discretionary bonus adjustments despite metric attainment (Revenue, ARR) underscore cash conservation and governance alignment with financial condition .
Risk Indicators & Red Flags
- Insider selling pressure: Regular monthly vesting may create ongoing tax-withholding sales, as evidenced by Form 4 transactions on 12/18/2024 and 09/22/2025; these were disclosed as administrative/tax-related rather than discretionary, but still represent supply overhang dynamics .
- Pledging/hedging: Prohibited, reducing alignment risks tied to collateralization or downside hedging .
- Change-in-control economics: Substantial acceleration value ($24.15M) could influence retention and decision-making around strategic transactions .
Employment Terms (Restrictive Covenants)
Non-compete, non-solicit, or garden leave provisions are not specifically disclosed in the proxy; confidentiality and inventions assignment agreements are standard .
Say-on-Pay & Governance
- 2024 say-on-pay: Company cited strong shareholder support for NEO pay program .
- Compensation Committee: Independent directors (Larry Marcus, Chair; Dr. Eric Ball) with use of independent consultant Compensia and a formal clawback policy adopted in 2023 .
Investment Implications
- Alignment: High unvested equity (RS/RSUs/PSUs) with long-duration vesting and performance hurdles aligns COO incentives with revenue growth, cash-flow improvement, and stock price appreciation .
- Retention risk: Significant unvested equity plus relatively moderate severance (without CoC) suggests strong natural retention; however, monthly vesting patterns imply recurring tax-withholding sales that can modestly increase trading supply near vest dates .
- Transaction sensitivity: Large CoC acceleration and defined cash components could be viewed as deal-friendly for executives; investors should monitor M&A discourse and integration performance post-SYNQ3/Amelia .
- Pay-for-performance linkages: Revenue, Adjusted EBITDA, and ARR drive annual cash incentives; proxy-documented discretionary cuts reflect discipline under financial constraints, which may support governance confidence but reduce near-term cash realizations for management .