Stephen Farrell
STAAR SURGICALAbout Stephen Farrell
Stephen C. Farrell is Chief Executive Officer of STAAR Surgical (effective February 26, 2025) and has served on the Board since 2016; he was Lead Independent Director from January 2023 to February 2025. He holds a B.A. from Harvard University and an M.B.A. from the University of Virginia Darden School of Business, and is a former CPA . Company baselines into his tenure: 2024 revenue was $313.9M (down 3% YoY), net loss was $(20.2)M, and TSR (per proxy methodology) was 70.39; Adjusted EBITDA per share was $0.47 .
Company performance context (oldest → newest):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenue ($) | $284,391,000 | $322,415,000 | $313,901,000 |
| Net Income ($) | $39,665,000 | $21,347,000 | $(20,208,000) |
| TSR (index, proxy definition) | 141.17 | 90.76 | 70.39 |
| Adjusted EBITDA per share | — | — | $0.47 |
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Convey Health Solutions | Chief Executive Officer & Director | 2011–Feb 2024 | Led a tech-enabled healthcare BPO; sold to TPG in 2022 |
| Stream Global Services | EVP & Chief Financial Officer | 2008–2009 | PE-owned BPO finance leadership |
| PolyMedica (NASDAQ: PLMD) | CFO, COO, President | 1999–2007 | Operator/finance leader; company later sold to Medco Health |
| Questcor Pharmaceuticals (NASDAQ: QCOR) | Director | 2007–2014 | Audit chair experience; acquired by Mallinckrodt in 2014 |
| PricewaterhouseCoopers | Senior Manager | 1994–1999 | Accounting/audit foundation; former CPA |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Lineage Cell Therapeutics (NYSE: LCTX) | Director | 2012–2020 | Public biotech board service |
| Allowances under CEO agreement | Outside boards | Up to two for‑profit boards with approval | Requires Board pre-approval; no conflicts allowed |
Fixed Compensation
| Element | Amount/Term | Notes |
|---|---|---|
| Base Salary | $725,000 | Per Employment Agreement (effective 2/26/2025) |
| Target Annual Bonus | 100% of base salary | Payable only if financial and individual objectives are achieved |
| Relocation/Travel Reimbursement | Up to $250,000 (2025) | Travel, temporary lodging and moving expenses |
| Director Fees | $0 as CEO | No director compensation while serving as CEO |
Governance controls: clawback policy (NASDAQ Rule 10D‑1 compliant), updated insider trading policy (hedging prohibited; pledging/margin accounts require pre-clearance), and CEO stock ownership guideline of 3x base salary; management reports all directors/executives are in compliance .
Performance Compensation
| Instrument/Plan | Metric(s) | Weight/Target | Vesting/Range | Status/Notes |
|---|---|---|---|---|
| 2025 Annual Cash Bonus (AIP) | Revenue; SG&A cost control; Gross Margin; Strategic (U.S., China, R&D) | 75% financial; 25% strategic | Annual; Board/Committee discretion per plan | Program design adopted for 2025 |
| Sign‑on RSUs | Time-based | 200,000 shares | 1/3 each on 1st, 2nd, 3rd anniversary of 2/26/2025 | Granted at appointment |
| Sign‑on PSUs (target) | Multi‑year revenue performance (up to 5 tranches) | Target 200,000 shares | 0%–200% of target; performance period through 12/31/2027; continued service required | Granted at appointment |
| 2025 LTI mix (broader execs) | PSUs; RSUs | 50% / 50% | Options eliminated in 2025 program | Pay-for-performance shift |
| 2024 NEO outcomes (context) | Revenue; Adj. EBITDA/share | Plan thresholds not met | Bonus pool 0%; 2024 PSUs forfeited | Demonstrates discipline |
Equity Ownership & Alignment
As of April 22, 2025:
| Holder | Common Owned | Options Exercisable by 6/21/2025 | RSUs Vesting by 6/21/2025 | Total Beneficial | % |
|---|---|---|---|---|---|
| Stephen C. Farrell | 32,912 | 43,335 | 2,244 | 78,491 | <1% |
- Ownership guidelines: CEO must hold ≥3x salary; all executives and directors are in compliance per Board report .
- Hedging prohibited; pledging/margin requires pre‑clearance; no pledging disclosed for Farrell in the proxy .
- For updated holdings or transactions after the record date, the company notes changes are reflected in directors’ and officers’ Forms 3/4 on EDGAR in M&A proxy-related disclosures .
Employment Terms
| Scenario | Cash Severance | COBRA | Bonus Treatment | Equity Treatment | Other |
|---|---|---|---|---|---|
| Termination without Cause / Resign for Good Reason (no CIC) | 18 months base (paid monthly) | Up to 18 months reimbursement | None specified (standard AIP rules) | No automatic acceleration specified outside CIC; time/performance vest per award agreements | Release required; arbitration; CA law |
| Change in Control + Qualifying Termination (double-trigger) | 24 months base (paid over 24 months) | 24 months | Prior year actual bonus + current year target bonus | Full acceleration of all awards; PSUs at greater of target or actual performance | “Best‑net” 280G cutback (pay full or cut to maximize after‑tax) with ordered reduction waterfall |
| Good Reason definition (high level) | Material pay/benefit reduction, material diminution of duties, or HQ relocation ≥50 miles; notice/cure required | — | — | — | — |
| Post‑employment covenants | 12‑month employee non‑solicit; confidentiality; IP assignment; no non‑compete specified | — | — | — | — |
Board Governance
- Role/tenure: Director since 2016; Lead Independent Director Jan 2023–Feb 2025; appointed CEO Feb 26, 2025 .
- Independence: Not independent as CEO; Board separated Chair and CEO in Feb 2025; Dr. Elizabeth Yeu serves as independent Board Chair .
- Committees: Farrell stepped down from all committees upon becoming CEO; previously served on the Audit Committee and the Nominating & Governance Committee during 2024 .
- Board attendance: In 2024, each director attended >75% of board/committee meetings; the Board held 11 meetings .
Compensation Program Governance, Peer Group, and Say‑on‑Pay
- Clawback policy adopted under Rule 10D‑1; insider trading policy updated (hedging prohibited) .
- Stock ownership guidelines strengthened; CEO 3x salary requirement; in compliance .
- Compensation consultant: Semler Brossy engaged in 2024; prior consultant Aon; no conflicts found .
- Benchmarking: 2024 peer group of 17 U.S. medtech companies; total comp targeted between 50th–75th percentile with role-based variation .
- Say‑on‑pay: 83% support at 2024 annual meeting; 2025 program changes increased PSU weighting and introduced multi‑year revenue PSUs; 2024 bonus and PSUs paid 0% .
Performance Compensation Detail (Design Summary)
| Metric/Plan | Weighting | Target/Mechanics | Payout/Forfeiture |
|---|---|---|---|
| 2025 AIP financials (Revenue, SG&A, Gross Margin) | 75% | Annual goals | Determined by results vs targets |
| 2025 AIP strategic (U.S., China, R&D) | 25% | Annual objectives | Determined by results vs objectives |
| 2025 LTI mix (execs) | 50% PSUs / 50% RSUs | PSUs: multi‑year revenue through 2027; RSUs: time-based | Per plan; options eliminated |
| CEO 2025 sign‑on RSUs | — | 200,000 shares; 1/3 vest on each of 2/26/2026, 2/26/2027, 2/26/2028 | Forfeitable if service ends |
| CEO 2025 sign‑on PSUs | — | Target 200,000; 0–200% in up to 5 tranches based on revenue through 12/31/2027 | Subject to continued service; CIC terms apply |
Investment Implications
- Pay-for-performance alignment has tightened materially: 2024 pool funded at 0% and 2024 PSUs forfeited; 2025 program shifts to 50% PSUs with multi‑year revenue goals and removes options, signaling stronger alignment and lower risk of short‑term windfalls .
- CEO incentives focus on multi‑year revenue execution through 2027 (200k target PSUs; 0–200% payout) plus sizable time‑based RSUs (200k) vesting 2026–2028, aligning him to sustained topline growth and retention; vesting cadence creates defined equity events across three fiscal years .
- Double‑trigger CIC economics are robust (24 months base + two bonus amounts, full equity acceleration with PSUs at greater of target/actual), which is protective for retention during M&A processes but may be viewed as generous by governance-sensitive investors; 280G “best‑net” cutback mitigates excise tax inefficiency .
- Governance structure (separate independent Chair; CEO off committees; clawback; hedging ban; ownership guidelines) reduces dual‑role and alignment concerns; CEO is not independent, but the Board’s structure addresses oversight .
- Ownership: Farrell’s disclosed beneficial ownership was 78,491 shares/rights (<1%) as of 4/22/2025; combined with sign‑on awards, alignment to equity value creation is meaningful; monitor Form 4s for any sell‑to‑cover or discretionary sales as vesting begins in 2026 .
Note: Values and disclosures are derived from STAAR’s 2025 DEF 14A and February 26, 2025 Form 8‑K filings; see citations. For post‑record date changes in ownership or transactions, refer to current Forms 4 on the SEC website .