Michael Blend
About Michael Blend
Michael Blend is Chairman and Chief Executive Officer of System1 (SST), serving as CEO since February 2021 and Chairman since September 2013; age 57; JD from The University of Chicago and BA in Mathematics from Duke University . He co-founded System1 and previously served as President/COO of Leaf Group following its acquisition of his data company Hotkeys (2006); prior roles include VP Corporate Development at Jawbone (2001–2003) and at Wedding Channel (1999–2001) . Notable board roles include Wellful and the Stephenson Global Pancreatic Cancer Research Institute; prior boards include Dynata and Data Axle; he served as Chairman of Stuff Media until its sale to iHeart Media in 2018 and was EY National Entrepreneur of the Year for Media, Entertainment & Communications in 2018 (with co-founder Charles Ursini) . Performance-linked equity for 2024 consists of stock appreciation rights (SARs) tied to adjusted EBITDA thresholds; as of March 31, 2025 the company reached Tranche 1 ($50m TTM Adjusted EBITDA), pending certification within 30 days of filing the Q1 2025 Form 10-Q .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Leaf Group Ltd. | President/COO | 2006 (joined via Hotkeys acquisition) | Scaled operations post-acquisition of data company Hotkeys |
| Hotkeys (data company) | Founder/Executive | Through 2006 | Built data assets acquired by Leaf Group |
| Jawbone | VP Corporate Development | 2001–2003 | Led corporate development initiatives |
| Wedding Channel (acquired by The Knot) | VP Corporate Development | 1999–2001 | Corporate development and M&A strategy |
| Stuff Media | Chairman of the Board | 2016–2018 | Led through sale to iHeart Media in 2018 |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Wellful | Director | Not disclosed | Current public/private company board service |
| Stephenson Global Pancreatic Cancer Research Institute | Director | Not disclosed | Non-profit/academic board service |
| Dynata | Director (prior) | Not disclosed | Prior directorship in digital marketing/technology |
| Data Axle | Director (prior) | Not disclosed | Prior directorship in data/marketing tech |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (%) | Actual Bonus Paid ($) | All Other Compensation ($) |
|---|---|---|---|---|
| 2022 | — | Not disclosed | — | 27,167 |
| 2023 | — | Not disclosed | — | 36,507 |
| 2024 | — | Not disclosed | — | 32,812 |
Notes:
- The proxy indicates Michael Blend did not have a base salary or annual cash bonus in 2022–2024; “All Other Compensation” reflects company-paid health and welfare benefits .
Performance Compensation
| Year | Equity Type | Grant Date | Number of Shares/Units | Fair Value ($) | Key Performance Metric(s) | Vesting / Expiration |
|---|---|---|---|---|---|---|
| 2022 | RSUs and fully vested Class A (backstop-related) | 2022 | Not disclosed (aggregate equity awards) | 8,488,436 | Equity grants tied to business combination/backstop; RSU vesting per award terms (not detailed for Blend) | Standard RSU provisions; details not explicitly provided for Blend |
| 2024 | Stock Appreciation Rights (SARs) | 7/1/2024 | 2,500,000 total, four tranches of 625,000 each | 2,355,541 total (market/payout value of unearned SARs) | Adjusted EBITDA TTM thresholds per tranche; vest in 25% increments at targets | Tranche I/II/III expire on 4th/5th/6th anniversaries of grant; all SARs expire on 7th anniversary |
Detailed SAR Performance Conditions and Status:
| Metric (Adjusted EBITDA) | Weighting | Original Targets | Amended Targets (Pending Shareholder Approval) | Actual (as of 3/31/2025) | Payout Mechanism | Certification/Vesting Timing |
|---|---|---|---|---|---|---|
| Tranche I | 25% | $50m | $50m | Achieved $50m TTM; certification window within 30 days post Q1’25 10-Q filing | SAR vesting; exercisable for appreciation over strike price | First date after grant when admin certifies goal; within 30 days after relevant SEC filing |
| Tranche II | 25% | $60m | $55m | Not disclosed | SAR vesting | As above |
| Tranche III | 25% | $70m | $60m | Not disclosed | SAR vesting | As above |
| Tranche IV | 25% | $80m | $65m | Not disclosed | SAR vesting | As above |
Additional SARs Plan Mechanics:
- Weighted average strike of Eligible SARs for Blend: $1.44; company stock closed at $0.44 on May 16, 2025 (underwater prior to proposed repricing) .
- Repricing proposal rationale: restore incentive/retention value for underwater SARs; alternatives considered included exchange offers, issuing additional equity awards, or waiting for market recovery .
- Change-in-control: if awards are not assumed/continued, they fully vest and become exercisable; in-the-money awards are cancelled for consideration payable at transaction close .
- Clawback: Awards subject to Company’s Policy for Recovery of Erroneously Awarded Compensation and any applicable clawback policy .
Equity Ownership & Alignment
| As-of Date | Direct Class A Shares | Beneficial Ownership % | Voting Power % | Derivatives / Rights | Notes |
|---|---|---|---|---|---|
| Apr 15, 2025 | 35,000 | <1% | <1% | 35,000 Public Warrants at $11.50 strike ; 2,500,000 SARs outstanding | Excludes shares held by OpenMail2 and The Blend Family Foundation |
| Apr 15, 2024 (proxy reference) | 725,000 Class A shares | Not disclosed | Not disclosed | 35,000 Public Warrants at $11.50 strike | Excludes OpenMail2 and Blend Family Foundation holdings |
Related Entities and Indirect Interests:
- OpenMail2: jointly controlled by Michael Blend, Charles Ursini, and Tridivesh Kidambi; holds Class A and Class B units exchangeable into Class A; their joint control may imply shared voting/dispositive power over OpenMail2-held shares .
- The Blend Family Foundation: holds 1,045,077 Class A shares and 251,379 Class B units exchangeable into Class A; directors include Michael Blend (with others) .
Pledging/Hedging:
- No pledging or hedging disclosures identified for Michael Blend in the ownership sections reviewed; insider trading policy exists at the company level and is filed with the FY2024 10-K .
Employment Terms
| Item | Disclosure for Michael Blend |
|---|---|
| Employment agreement | Not party to an employment agreement in 2024 |
| Severance provisions | Not disclosed for Blend; CFO severance disclosed separately, not applicable to Blend |
| Change-of-control (equity) | SARs fully vest/exercisable if not assumed/continued in a change-in-control; in-the-money awards cancelled for transaction consideration |
| Clawback | SARs subject to Company’s compensation recovery policy |
| Non-compete / Non-solicit | Not disclosed |
| Stock ownership guidelines | Not disclosed for executives |
| Deferred compensation / pensions | Not disclosed |
Board Governance
- Board service: Chairman and CEO; Director since 2013; term expires 2026 .
- Committee roles: Blend is not listed as a member of Audit, Compensation, or Nominating committees; independent directors chair Audit (Frank R. Martire Jr.), Compensation (Moujan Kazerani), and Nominating (Caroline Horn) .
- Committee activity: Audit held 10 meetings in 2024; Compensation held 4; Nominating held 5 .
- Non-employee director compensation program: Annual RSU grants of $180,000 plus committee role RSU grants (Audit Chair $50k; Audit member $20k; Compensation Chair $20k; Compensation member $10k; Nominating Chair $15k; Nominating member $10k) with quarterly vesting; applies to eligible non-employee directors; Blend, as CEO/Chair, is not an eligible non-employee director .
Multi-Year Compensation Summary (Named Executive Officer: Michael Blend)
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2022 | — | — | 8,488,436 | — | 27,167 | 8,515,603 |
| 2023 | — | — | — | — | 36,507 | 36,507 |
| 2024 | — | — | 2,355,541 | — | 32,812 | 2,388,353 |
Outstanding Equity Awards (as of Dec 31, 2024)
| Award Type | Grant Date | Tranche | Units | Market/Payout Value ($) |
|---|---|---|---|---|
| SARs | 7/1/2024 | Tranche 1 | 625,000 | 492,474 |
| SARs | 7/1/2024 | Tranche 2 | 625,000 | 595,755 |
| SARs | 7/1/2024 | Tranche 3 | 625,000 | 623,162 |
| SARs | 7/1/2024 | Tranche 4 | 625,000 | 644,150 |
| Total | — | — | 2,500,000 | 2,355,541 |
Strike/Exercise Context:
- Eligible SARs weighted average strike: $1.44; Company stock closing price on May 16, 2025: $0.44; Board recommended repricing subject to shareholder approval to restore incentive value .
Director Compensation (Program Overview; context for governance)
| Component | Amount (Grant-Date Fair Value) | Vesting |
|---|---|---|
| Annual RSUs (non-employee directors) | $180,000 | 25% quarterly; balance by next annual meeting or 1-year anniversary |
| Audit Committee Chair RSUs | $50,000 | As above |
| Audit Committee Member RSUs | $20,000 | As above |
| Compensation Committee Chair RSUs | $20,000 | As above |
| Compensation Committee Member RSUs | $10,000 | As above |
| Nominating Chair RSUs | $15,000 | As above |
| Nominating Member RSUs | $10,000 | As above |
Equity Ownership & Derivatives Detail (Entities)
| Entity | Holdings | Notes |
|---|---|---|
| OpenMail2 | Class A and Class B units exchangeable into Class A; example holdings cited for various insiders; jointly controlled by Blend/Ursini/Kidambi | |
| Blend Family Foundation | 1,045,077 Class A shares and 251,379 Class B units exchangeable into Class A; directors include Michael Blend (with others) |
Key Policies and Risk Provisions
- Insider Trading Policy: Adopted and filed as Exhibit 19.1 to FY2024 10-K; governs trustees, officers, employees, designed to promote compliance with laws and NYSE standards .
- Clawback: SARs subject to compensation recovery policy; awards generally non-transferable, with limited exceptions .
- Repricing Governance: Plan administrator may not reprice SARs or cancel/exchange into lower strike awards without stockholder approval; accounting treatment follows ASC 718 for incremental cost .
Investment Implications
- Pay mix and alignment: Blend’s 2024 compensation was entirely equity-based via SARs ($2.36m fair value) with no base salary or cash bonus disclosed, directly linking executive compensation to adjusted EBITDA performance thresholds .
- Retention and incentive risk: With SARs significantly underwater (weighted average strike $1.44 vs. stock at $0.44 on May 16, 2025), the Board proposed a shareholder-approved repricing and lowered EBITDA thresholds to restore retention/incentive value; initial $50m TTM threshold achieved suggests near-term vesting of Tranche I upon certification .
- Ownership alignment: Direct beneficial ownership is small (35,000 Class A shares; <1%), though related entities (Blend Family Foundation; OpenMail2) hold additional shares/units; the presence of SARs and warrants provides derivative exposure but may heighten selling pressure upon vesting/exercise if liquidity is needed .
- Governance checks on dual role: Blend is both CEO and Chairman; independent directors chair all key committees (Audit, Compensation, Nominating) with active meeting cadence, providing oversight that can mitigate independence concerns associated with combined roles .
- Change-in-control economics and clawbacks: SARs fully vest if not assumed in a change-in-control, enabling payout of in-the-money value at transaction close; awards are subject to a clawback policy, which addresses compensation recovery risks .