Keith J. Sullivan
NeuroneticsAbout Keith J. Sullivan
Keith J. Sullivan, age 66, is President & Chief Executive Officer of Neuronetics, Inc. (STIM) and has served as a member of the Board since July 2020. He holds a BBA from the College of William & Mary and served as Clinical Professor there from August 2017 to July 2020 . In 2024 his compensation was anchored by base salary of $728,000, target annual cash incentive of 100% of salary, and time- and performance-based equity awards; annual bonus metrics were revenue (70% weighting) and EBIT (30%), with revenue below threshold and adjusted EBIT achieving 77.5% of target, leading to a $169,260 cash payout . The Board maintains an independent Chair (Robert A. Cascella) and determined all directors other than Sullivan to be independent under Nasdaq standards, mitigating CEO/Board concentration risk .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ZELTIQ Aesthetics, Inc. | Chief Commercial Officer & President (North America) | Jan 2016–Apr 2017 | Led commercial operations until ZELTIQ’s acquisition by Allergan . |
| ZELTIQ Aesthetics, Inc. | SVP & Chief Commercial Officer | Nov 2014–Jan 2016 | Senior sales leadership in medical device commercialization . |
| ZELTIQ Aesthetics, Inc. | SVP Worldwide Sales & Marketing | Jul 2013–Oct 2014 | Built global sales and marketing capabilities . |
| College of William & Mary | Clinical Professor | Aug 2017–Jul 2020 | Academic role bridging industry and education . |
| Medicis; Reliant Technologies; Medtronic; Vision Quest Laser Center; Coherent Medical | Various leadership roles | Not disclosed | >30 years senior sales leadership across medical devices . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Cutera, Inc. | Director | Current | Public company board service . |
| Venus Concept | Director | Current | Public company board service . |
| Sientra, Inc. | Director | Prior | Prior public board service . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $700,000 | $728,000 |
| Target Bonus % of Salary | Amended from 75% to 100% on Nov 2, 2023 | 100% |
| Non-Equity Incentive Plan Compensation ($) | $660,800 | $169,260 |
| Stock Awards Fair Value ($) | $1,601,700 | $1,503,000 |
| Option Awards Fair Value ($) | — | — |
| All Other Compensation ($) | $28,485 | $30,350 |
| Total Compensation ($) | $2,990,985 | $2,430,610 |
Perquisites include commuting and T&E reimbursements with small tax gross-ups (e.g., $14,922 commuting and $15,427 travel in 2024; total gross-ups $4,278) .
Performance Compensation
| Metric | Weighting | Threshold | Target | Max | Actual | Payout |
|---|---|---|---|---|---|---|
| Revenue (FY2024) | 70% | $74.0M (50%) | $82.2M (100%) | $94.5M (200%) | Below threshold | 0% of revenue component |
| EBIT (FY2024, adjusted) | 30% | $(23.85)M (50%) | $(20.40)M (100%) | $(16.88)M (200%) | $(22.661)M (adjusted) | 77.5% of EBIT component |
| Overall Annual Cash Payout | — | — | Target 100% of salary | 200% cap | Derived by weighting | $169,260 |
2025 LTIs: 75% time-based RSUs vesting on the 1st, 2nd, and 3rd anniversaries; 25% PRSUs tied to cash balance growth (0–150% payout) for 2025–2027 .
Greenbrook acquisition PRSUs (granted Dec 10, 2024) vest Dec 31, 2025 with cash flow breakeven gates: 25% for Q2’25, 50% for Q3’25, 25% for Q4’25 .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial Ownership (shares; %) | 1,837,959 shares; 2.8% of outstanding |
| Composition detail | 937,959 common shares + 900,000 options; excludes 670,029 unvested RSUs and 800,000 unvested PRSUs |
| Options outstanding | 900,000 options at $1.98, expiring 07/13/2030 |
| RSU grants (recent) | 300,000 RSUs granted Feb 5, 2024 (1/3 vest annually over 3 years) |
| PRSUs outstanding (selected) | 100,000 PRSUs (stock price $30/$35 VWAP tranches); 500,000 PRSUs ($10/$15/$20/$25 VWAP tranches, 250,000 vested previously) |
| Ownership guidelines (Nov 2024) | CEO must hold lesser of 700,000 shares or shares equal to 3x salary within 5 years; hedging prohibited; limited trading window; pre-clearance required |
| Pledging/Hedging | Hedging/margin/short sales prohibited; pledging not specifically disclosed |
Employment Terms
| Term | Detail |
|---|---|
| Employment start date | Employment agreement dated July 14, 2020; CEO and Board member |
| Target bonus change | Increased from ≥75% to 100% of salary, effective Nov 2, 2023 |
| Severance (no CIC) | If terminated without cause or resigns for good reason: 12 months salary continuation, 12 months benefits continuation, prorated bonus |
| Change-in-control (CIC) | If termination in connection with CIC: 24 months salary and benefits continuation; bonus for year of termination at 150% of target; accelerated equity vesting |
| Definitions | Good reason includes material adverse role change, pay reduction, benefit eligibility failure, relocation >35 miles (unless commute reduced) ; CIC definitions include >50% voting control change, merger with <50% post-vote, sale of substantially all assets, similar events |
| Restrictive covenants | Non-compete, non-solicit, and invention assignment agreements |
| Equity acceleration | Committee may accelerate under 2018 Plan in CIC context |
| Grant timing policy | Regular annual grants around February; options priced at market close on grant date; no spring-loading/timing for MNPI |
Board Governance (Director Service, Committees, Dual-Role Implications)
- Board service: Director since July 2020; employee director receives no separate director compensation .
- Committee roles: Sullivan is not listed on Audit, Compensation, or Nominating/Governance committees; committees comprised solely of independent directors .
- Independence and leadership: Board determined all directors other than Sullivan are independent; Board has an independent Chair (Robert A. Cascella), separating Chair/CEO roles to reinforce oversight .
- Board activity and attendance: Board met 16 times in 2024; each director attended ≥75% of meetings; independent directors held regular executive sessions .
Director Compensation (Policy context)
- Non-employee directors: $55,000 annual cash retainer; Chair additional $60,000; committee chairs/members paid $20,000/$10,000 (Audit), $15,000/$7,500 (Compensation), $10,000/$5,000 (Nominating) .
- Annual director equity: 25,000 RSUs to eligible directors post-2024 AGM; Chair additional 6,250 RSUs; some directors defer settlement; Sullivan receives no director compensation .
Compensation Peer Group and Shareholder Feedback
- Independent consultant: Compensation Committee retains Alpine Rewards annually (since 2020) for benchmarking and design; Alpine provided no other services; peer comparisons inform pay decisions .
- Process: Base salaries and CEO comp reviewed by Compensation Committee/Board, considering revenue growth, utilization/sales of recurring sessions, expense management, cash position, and performance objectives .
- Say-on-Pay: First advisory vote in 2024 passed at 68.45%; Committee responded by adding PRSUs to equity grants (cash flow breakeven in 2025 and cash balance growth over 2025–2027) .
- Clawback policy: Adopted Dec 1, 2023; recoupment for accounting restatements due to material noncompliance .
Equity Awards and Vesting Detail (as of 12/31/2024)
| Grant | Type | Quantity | Key Terms |
|---|---|---|---|
| 7/14/2020 | Stock options | 900,000 | $1.98 strike; exp 07/13/2030 |
| 7/14/2020 | RSUs/PRSUs (composite) | 1,000,000 | 500k RSUs vest in 4 equal annual tranches; 500k PRSUs vest 125k each upon $10/$15/$20/$25 30-day VWAP; 250k vested at $10/$15 |
| 2/03/2021 | PRSUs | 100,000 | Two 50k tranches vest at $30 and $35 30-day VWAP |
| 2/09/2022 | RSUs | 94,657 | 1/3 vest annually over 3 years |
| 2/09/2023 | RSUs | 190,010 | 1/3 vest annually over 3 years |
| 2/05/2024 | RSUs | 300,000 | 1/3 vest annually over 3 years |
| 12/10/2024 | PRSUs | 450,000 | Vests 12/31/2025 subject to quarterly cash flow breakeven gates (25/50/25) |
Investment Implications
- Pay-for-performance alignment: The 2024 bonus structure paid zero on revenue and 77.5% on adjusted EBIT, producing a $169k payout versus a $728k target—evidence of downside sensitivity; addition of PRSUs tied to cash flow breakeven and cash balance growth strengthens alignment with liquidity and profitability objectives .
- Near-term vesting/selling pressure: Significant RSU tranches granted in Feb 2024 and prospective Feb 2025 time-based RSUs vest annually over three years, creating predictable vest events; pre-clearance/trading window limits and ownership guidelines may temper discretionary sales, but watch 1/3 RSU vest dates and PRSU outcomes on 12/31/2025 for potential supply .
- Retention/CIC economics: CIC terms provide 24 months salary/benefits continuation and a 150% target bonus plus accelerated vesting—robust protection that can raise takeover costs but reduce leadership flight risk through transition; non-compete/non-solicit provisions further support retention .
- Ownership alignment: Sullivan’s 2.8% beneficial stake and 900k options plus substantial unvested RSUs/PRSUs indicate material equity exposure; CEO ownership guideline of the lesser of 700,000 shares or 3x salary within five years increases alignment expectations; hedging prohibited .
- Governance safeguards: Independent Chair and fully independent key committees reduce dual-role concerns (CEO/Director), while say-on-pay at 68.45% signals investor scrutiny—continued emphasis on performance-based equity is positive for support .
- Red flags to monitor: Perk-related tax gross-ups, though small in dollar terms, are shareholder-unfriendly; ensure no option repricings or pledging (not disclosed) and track PRSU metric rigor over time .
Key data anchor points: 2024 CEO salary $728k; target bonus 100% of salary; annual bonus paid $169k; RSUs 300k granted Feb 2024; PRSUs 450k (Dec 2024) and additional PRSUs with stock-price VWAP targets outstanding; CEO ownership guideline implemented Nov 2024; CIC protection at 24 months salary/benefits with 150% target bonus **[1227636_0001140361-25-013279_ny20041641x2_def14a.htm:30]** **[1227636_0001140361-25-013279_ny20041641x2_def14a.htm:33]** **[1227636_0001140361-25-013279_ny20041641x2_def14a.htm:35]** **[1227636_0001140361-25-013279_ny20041641x2_def14a.htm:28]** **[1227636_0001140361-25-013279_ny20041641x2_def14a.htm:37]**.