Steven Lubman
About Steven Lubman
Steven J. Lubman, age 70, is Vice President, Secretary, Treasurer, and a director of Surge Components, Inc. (SPRS), serving since the company’s inception in 1981; he founded the Challenge Electronics division in 1988 after sales roles at NIC Components (1980–1981) and Capar Components (1976–1980) . Company performance context during his ongoing tenure: FY2024 net sales were $31.2M and net income $0.83M; Q1 FY2025 net income was $0.06M, with TSR used in pay-versus-performance disclosures showing a $100 investment valued at $65.25 at FY2024 (FY2023: $74.24) . He is a non‑independent executive director; the company combines CEO and Chairman roles (Ira Levy), a governance structure the board deems most effective given company size .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| NIC Components (Nu Horizons/Arrow) | Sales Manager | 1980–1981 | Channel sales leadership for distributor of electronic components |
| Capar Components (Diplomat Electronics) | Inside/Outside Sales | 1976–1980 | OEM/distributor sales groundwork in capacitors/semiconductors |
| Surge Components | Vice President, Secretary; Director | 1981–present | Co-founder; built core supplier portfolio and sales operations |
| Challenge Electronics (Surge division) | Founder | 1988–present | Established audible components franchise and custom solutions capability |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | No other public-company directorships disclosed for Lubman; external roles not disclosed in filings . |
Fixed Compensation
Multi-year executive compensation for Steven J. Lubman:
| Metric | FY2023 | FY2024 (10-K) | FY2024 (DEF 14A 2025) |
|---|---|---|---|
| Salary ($) | 250,000 | 266,667 | 266,667 |
| Bonus ($) | 110,624 | 123,752 | 172,115 |
| Stock Awards ($) | — | — | — |
| Option Awards ($) | — | — | — |
| All Other Compensation ($) | 48,331 | 49,545 | 49,545 |
| Total ($) | 408,955 | 439,964 | 488,327 |
Notes: All-other compensation included medical insurance $28,216, auto $12,300, and life/personal insurance $9,029 for FY2024 .
Performance Compensation
Annual bonus design and recent outcomes:
| Element | Metric | Weighting | Target | Actual/Payout | Vesting/Timing |
|---|---|---|---|---|---|
| Annual Cash Bonus (paid in 2024 for 2023 performance) | Individual performance | 25% | Committee-set | Approx. 100% of target paid | Cash in 2024 |
| Revenue growth | 25% | Committee-set | Approx. 100% of target paid | — | |
| Division operating plan | 25% | Committee-set | Approx. 100% of target paid | — | |
| Company operating plan | 25% | Committee-set | Approx. 100% of target paid | — | |
| Equity Awards (granted in 2024 for 2023 performance) | Equity value vs. salary | Target 15% of base (Lubman) | Committee-set | 50% of target value (Lubman); 25% for Levy | Converted at $2.95/sh on Apr 10, 2024; 5,085 shares to Levy; Lubman count not disclosed |
Plan governance: the 2024 Equity Incentive Plan permits options, RSUs, performance awards, and provides a clawback/recoupment policy aligned with Dodd-Frank/SOX and allows accelerated vesting upon change-in-control if awards are not assumed .
Equity Ownership & Alignment
| Item | As of Date | Shares/Units | % Outstanding | Notes |
|---|---|---|---|---|
| Common shares beneficially owned (Lubman) | Feb 21, 2025 | 1,111,952 | 19.9% (out of 5,582,783) | Includes options exercisable within 60 days (50,000 @ $1.41; 40,000 @ $3.55) |
| Common shares beneficially owned (Lubman) | Aug 31, 2025 | 1,161,952 | 20.4% (out of 5,706,732) | Footnotes also reference options including series at $2.42 |
| Options outstanding (Lubman) | Nov 30, 2024 | 50,000 unexercisable / 50,000 exercisable @ $1.41; exp. 04/23/2025 | — | Time-based; nearing expiration |
| Options outstanding (Lubman) | Nov 30, 2024 | 40,000 unexercisable / 40,000 exercisable @ $3.55; exp. 03/15/2027 | — | Time-based |
| Subsequent insider option activity (officers/directors, group) | Apr 2025 | Options exercised into 109,290 shares (mix of cash/cashless) | — | Person-level breakdown not disclosed |
Policy alignment: Clawbacks apply to awards under the 2024 Plan; stock ownership guidelines/pledging policies for executives were not disclosed in the filings reviewed .
Employment Terms
| Provision | Key Terms |
|---|---|
| Role & base salary | VP, Secretary, Treasurer; base increased to $275,000 (Apr 2024) |
| Term | Agreement continues until terminated by either party |
| Bonus eligibility | Discretionary annual bonus by Board/Compensation Committee |
| Non-compete / Non-solicit | 1 year post-termination; confidentiality and IP assignment customary |
| Severance (without cause or for Good Reason; or CoC + resignation within 12 months) | Cash severance equal to 36 months of average base+bonus for prior 3 calendar years, payable over 52 weeks; accelerate vesting of unvested equity; reimburse expenses; subject to general release |
| Limitation | If terminated without cause due to inability to pay debts, cash severance and annual bonus payments are not owed |
| Change-in-control (equity plan) | If awards not assumed/substituted, full vesting, restrictions lapse, and 15-day exercise window for options/SARs; performance goals deemed at target |
Board Governance
- Service history: Director since 1981; re-elected at the 2024 meeting; part of a six-person board .
- Committee roles: Audit, Compensation, and Nominating/Governance committees are composed of independent directors (Chariton, Plafker, Jacobs, Peter Levy); Lubman, as an executive, is not listed as a committee member .
- Independence: Lubman is not independent; board determined four directors are independent under Nasdaq/Rule 10A-3 .
- Attendance: Board held five meetings in FY2024; all directors attended ≥75% and the Nov 26, 2024 annual meeting .
- Dual-role implications: CEO (Ira Levy) also serves as Chairman; the board has historically combined roles citing size/efficiency .
Say-on-Pay and Shareholder Votes (Nov 26, 2024):
- Equity Plan approval: For 2,561,439; Against 617,936; Abstain 27,314 .
- Say-on-Pay advisory: For 2,864,112; Against 37,345; Abstain 305,232 .
- Director elections passed; auditor ratification passed .
Director Compensation (non-employee reference)
- Non-employee directors received $3,000/month (or $4,000/month for chairing >2 committees); FY2024 fees: Jacobs $48,000; others $36,000 .
- As an employee director, Lubman’s compensation is captured in executive totals above .
Related Party Transactions and Red Flags
- Headquarters lease: Surge and Challenge lease from Great American Realty of Jefryn Blvd., LLC owned 50/50 by CEO Ira Levy and Steven Lubman; annual rent approx. $282,900 in FY2024; lease through Sept 2030; review/approval governed by Audit Committee .
- Rights Plan extension proposal (2025): Board sought stockholder ratification to extend/amend rights plan (trigger raised to 9.99% until Oct 7, 2028); potential takeover defense considerations .
Performance & Track Record
| Metric | FY2023 | FY2024 | Context |
|---|---|---|---|
| Net Sales ($) | 36,276,542 | 31,211,139 | Lower orders as customers consumed excess inventory |
| Gross Profit ($) | 9,928,688 | 8,903,694 | Margin % improved to 28.5% (from 27.4%) |
| Net Income ($) | 972,110 | 825,677 | Other income increased via Treasury investments |
| Q1 FY2025 Net Income ($) | (72,001) | 57,356 | Sales +2.5% YoY; investment income up |
| Pay vs Performance TSR: $100 basis | $74.24 (FY2023) | $65.25 (FY2024) | Company TSR trajectory in disclosures |
Compensation Structure Analysis
- Mix trends: Equity awards historically fully vested stock or options; 2024 equity awards for 2023 performance sized at 50% of Lubman’s equity target (target was 15% of base) — lower absolute equity vs cash bonus suggests near-term cash weighting .
- Targets vs outcomes: Bonus framework uses four 25% metrics; payouts for 2023 performance in 2024 were approximately 100% of target; 2025 proxy updates equity conversion outcomes indicating more conservative equity sizing vs target for 2023 cycle .
- Clawbacks and repricing: 2024 Plan includes clawback; shareholder approval required for option/SAR repricing, a positive governance feature .
- Option expirations: Material option tranche at $1.41 expiring April 23, 2025 may drive exercise decisions; subsequent April 2025 exercises across officers/directors totaled 109,290 shares, indicating activity around expirations .
Employment Contracts, Severance & CoC Economics
- Severance multiple: 36 months of average base+bonus (3×) for terminations without cause or for Good Reason; equity acceleration; double-trigger CoC acknowledged via resignation within 12 months .
- Restrictive covenants: 1-year non-compete/non-solicit; confidentiality/IP provisions .
- Limitation: No cash severance/bonus if termination without cause due to inability to pay debts .
Investment Implications
- Alignment: Lubman’s substantial ownership (≈20%+) aligns interests with shareholders; equity plan clawbacks and no-repricing without shareholder approval support pay governance .
- Selling pressure risk: Approaching option expirations (April 2025) and disclosed April 2025 exercises by officers/directors create potential for incremental float or hedging, though person-level disposition data is not disclosed; monitor Forms 4 for follow-up .
- Governance: Executive director status and related-party headquarters lease warrant continued scrutiny; however, independent committees oversee related transactions, and say-on-pay passed by wide margin in 2024 .
- Execution risk: Supplier concentration (Lelon Electronics ~28–31% of purchases) and tariff/supply-chain dynamics remain key operational risks; bonus metrics include operating plan adherence to mitigate focus on execution .