Michael Carlson
STEMAbout Michael Carlson
Michael Carlson, 61, is an experienced industrial-digital operator who has served at STEM since September 2022, initially as Chief Operating Officer and, effective March 6, 2025, as President, Managed Services . He holds a B.S. in Accounting and Business Management from Union College and an MBA in Finance and Marketing from Pepperdine University . Prior roles include Vice President at Koch Engineered Solutions (KES), President of Digital Grid North America at Siemens Industries, and General Manager of Global Software Solutions at GE, with emphasis on grid software and industrial digital transformation . Company pay-versus-performance disclosures show cumulative TSR for a $100 initial investment declining from 47.13 (2022) to 20.45 (2023) to 3.18 (2024), alongside net losses of $124.1m (2022), $140.4m (2023), and $854.0m (2024) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Koch Engineered Solutions | Consultant, then Vice President | Apr 2020–Aug 2020 (consultant); Aug 2020–Sep 2022 (VP) | Helped scale EPC and digital solutions; operational leadership in industrial services |
| Siemens Industries, Inc. | President, Digital Grid North America | Jul 2014–Mar 2019 | Led digital grid services platform; commercialization of grid software and services |
| General Electric | General Manager, Global Software Solutions | Jul 2010–Jun 2014 | Built global software offerings for industrial customers; enterprise software execution |
External Roles
- No public-company board roles or external directorships for Carlson are disclosed in the DEF 14A materials reviewed .
Fixed Compensation
| Component | 2024 Value | Notes |
|---|---|---|
| Base Salary | $418,269 | Compensation Committee increased annual base salary from $400,000 to $425,000 in Feb 2024 |
| Target Bonus % | 75% of salary | Set in Feb 2024 for NEOs (including Carlson) |
| Actual Bonus Paid | $0 | No AIP payout; threshold not achieved for any 2024 metric |
Performance Compensation
2024 Annual Incentive Plan (AIP)
| Metric | Weighting | Target | Actual | Payout | Vesting/Payment Timing |
|---|---|---|---|---|---|
| Adjusted EBITDA | Not disclosed | Not disclosed | Below threshold | $0 | Annual cash incentive (none earned for 2024) |
| Contracted Annual Recurring Revenue (CARR) | Not disclosed | Not disclosed | Below threshold | $0 | Annual cash incentive (none earned for 2024) |
| Revenue | Not disclosed | Not disclosed | Below threshold | $0 | Annual cash incentive (none earned for 2024) |
| Operating Cash Flow | Not disclosed | Not disclosed | Below threshold | $0 | Annual cash incentive (none earned for 2024) |
2024 Long-Term Incentive (LTI) Awards
| Grant Date | Instrument | Quantity | Exercise Price | Vesting Terms | Grant Value / Market Value |
|---|---|---|---|---|---|
| Feb 15, 2024 | Stock Options | 109,344 | $3.37 | 3 equal annual installments starting 1-year from grant | N/A (options; accounting value in SCT $282,108) |
| May 28, 2024 | RSUs | 212,500 | N/A | 33%, 33%, 34% beginning Mar 7, 2025 | Market value at 12/31/24: $127,500 (at $0.60/share) |
| Nov 1, 2024 | RSUs (retention) | 275,000 | N/A | Vests 100% on Nov 7, 2025 | Market value at 12/31/24: $165,000 (at $0.60/share) |
| Feb 15, 2023 | Stock Options | 68,331 (unexercisable); 33,655 exercisable | $10.25 | 3 equal annual installments starting 1-year from grant | N/A |
| Sep 26, 2022 | Stock Options | 16,664 exercisable; 16,664 unexercisable | $12.83 | 4 equal annual installments starting 1-year from grant | N/A |
| Sep 26, 2022 | RSUs | 12,178 (unvested at 12/31/24) | N/A | 4 equal annual installments starting 1-year from grant | Market value at 12/31/24: $7,307 |
| Feb 15, 2023 | RSUs | 52,895 (unvested at 12/31/24) | N/A | 3 equal annual installments starting 1-year from grant | Market value at 12/31/24: $31,737 |
- 2024 LTI mix shifted to 75% RSUs / 25% options for officers to manage burn rate and enhance retention; Carlson was the only NEO serving a full year to receive this mix, with significantly reduced grant values vs. 2023 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 344,344 shares; includes 120,422 options; less than 1% of outstanding (166,172,052 shares) as of Mar 31, 2025 |
| Options – Exercisable | 33,655 (2/15/2023); 16,664 (9/26/2022) |
| Options – Unexercisable | 68,331 (2/15/2023); 16,664 (9/26/2022); 109,344 (2/15/2024) |
| RSUs – Unvested (counts at 12/31/24) | 12,178 (9/26/2022); 52,895 (2/15/2023); 212,500 (5/28/2024); 275,000 (11/1/2024) |
| In-the-Money Status (12/31/24) | Options have exercise prices of $12.83, $10.25, and $3.37 vs. $0.60 closing price used in the table, implying out-of-the-money at that date |
| Ownership Guidelines | Executives must hold 2x base salary in STEM stock; retain 50% of net shares from exercises/vests until compliant; all NEOs and board members were in compliance as of Mar 31, 2025 |
| Hedging/Pledging | Hedging prohibited; pledging discouraged; no pledges by directors or executive officers as of Dec 31, 2024 |
Employment Terms
| Provision | Outside Change-in-Control (CIC) | During CIC Period |
|---|---|---|
| CIC Period Definition | — | Starts 3 months before CIC and ends 12 months after CIC |
| Cash Severance | 9 months base salary | 1x (base salary + target bonus) |
| Bonus Payment | Prior-year earned but unpaid; pro rata bonus for year of termination based on actual performance | Same as outside CIC |
| COBRA | Up to 9 months | Up to 12 months |
| Equity Treatment | Accelerated vesting of certain outstanding equity awards for Carlson (outside CIC) | Plan-level CIC treatments (assumption/substitution, acceleration, or cash-out at Board discretion) under 2021 and 2024 plans |
| Trigger Type | Termination without Cause or resignation for Good Reason (double trigger outside CIC for certain equity) | Termination without Cause or resignation for Good Reason within CIC period (double trigger) |
| Agreement Form | Standard Executive Employment Agreement (entered in 2022) | |
| Clawback | Policy adopted Oct 2023 per NYSE Listing Standard 303A.14 (Rule 10D‑1) to recover excess incentive comp upon restatements (prior 3 fiscal years) | |
| Perquisites / Deferred Comp | Limited perquisites; no defined benefit pension or nonqualified deferred compensation plans |
Investment Implications
- Pay-for-performance discipline: No AIP payout in 2024 reflects strict thresholding on adjusted EBITDA, CARR, revenue, and operating cash flow, aligning cash incentives with operational delivery amid a difficult year .
- Retention focus and near-term vest catalysts: RSU-heavy LTI mix and a special November 2024 RSU grant vesting in full on Nov 7, 2025 signal retention emphasis; vest events beginning Mar 7, 2025 and Nov 7, 2025 could create supply, partially mitigated by the 50% net-share retention rule until ownership guidelines are met .
- Alignment and risk: Double-trigger CIC, moderate cash severance (9 months) and prohibition on hedging/pledging support alignment; options currently out-of-the-money at the 12/31/24 reference price further reduce near-term monetization incentives, placing emphasis on turnaround execution .
- Execution backdrop: Corporate performance trends (TSR collapse and deep 2024 net loss) underscore elevated execution risk; Carlson’s repositioning to President, Managed Services suggests a focus on scaling recurring-service economics consistent with AIP metric mix (CARR, cash flow) .