John Dillon
About John Dillon
John M. Dillon (age 75) is CEO of TransAct Technologies (TACT) since April 2023 and a director since 2011. He holds a B.S. in engineering/operations research from the U.S. Naval Academy and an MBA from Golden Gate University; earlier he served five years as a naval officer in the nuclear submarine service . During his tenure, FY2024 revenue fell versus FY2023 and EBITDA turned negative, and TSR since 12/31/2021 declined to $39.52 on a $100 basis by 12/31/2024, informing pay-for-performance outcomes (low annual bonus payout and PSU forfeiture) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Aerospike | CEO; then Chairman | CEO 2015–2022; Chair 2022–2024 | Led a high‑performance database company serving banking, AdTech, anti‑fraud and AI/ML applications . |
| Engine Yard | CEO | 2009–2014 | Led a cloud platform for automating/developing Ruby on Rails and PHP apps . |
| Navis | CEO | 2002–2008 | Ran enterprise software for marine container terminals/distribution centers . |
| Salesforce.com | CEO | Prior to 2002 | Executive leadership in enterprise software; long‑tenured software CEO experience . |
| Hyperion Solutions | President & CEO | Prior to 2002 | Enterprise software leadership . |
| EDS; Oracle | Systems Engineer; Sales management | Early career | Technical and go‑to‑market foundations . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Intacct Corporation | Director | n/a | Former director . |
| Centerpointe Community Bank | Director | n/a | Former director . |
| BMC Software, Inc. | Director | 2012–2013 | Former public company board . |
| Epicor Software Corporation | Director | 2009–2011 | Former public company board . |
| Plumtree Software, Inc. | Director | 1997–2005 | Former public company board . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 415,385 | 613,846 |
| Target Bonus % | n/a | 33% of base (CEO and CFO targets; Dillon’s target explicitly 33%) |
| Target Bonus ($) | n/a | 206,000 (2024 target set in 8‑K) |
| Option Awards ($ grant‑date fair value) | 370,000 | 237,405 |
| Stock Awards (RSU/PSU $) | 415,248 | 553,960 |
| Actual Annual Bonus Paid ($) | 181,500 | 34,299 |
Notes: In September 2024, TACT executed a new CEO employment agreement setting base salary at $618,000 with annual bonus opportunity and ongoing long‑term equity eligibility .
Performance Compensation
Annual Incentive (2024)
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout factor | Weighted payout |
|---|---|---|---|---|---|---|---|
| Strategic objectives | 50% | — | — | — | — | 33.3% | 16.7% |
| FST revenue | 37.5% | $16.5m | $22.0m | $27.5m | $16.101m | 0% | 0% |
| Adjusted EBITDA | 12.5% | $0 | $1.0m | $3.0m | $(1.521)m | 0% | 0% |
| Total payout | — | — | — | — | — | — | 16.7% |
PSUs (2024 grant)
| Metric | Weight | Threshold (50%) | Target (100%) | Max (150%) | Actual | Payout |
|---|---|---|---|---|---|---|
| FST revenue | 75% | $16.5m | $22.0m | $26.4m | $16.101m | 0% |
| Adjusted EBITDA | 25% | $0 | $1.0m | $2.4m | $(1.521)m | 0% |
| PSU result | — | — | — | — | — | Forfeited (threshold not met) |
PSUs (2023 grant) paid out at 115.6% based on 90.6% of FST revenue target (81.2% factor) and 136.5% of adjusted EBITDA target (150% factor), vesting in three equal installments on 3/1/2024, 3/1/2025, and 3/1/2026 .
Equity Ownership & Alignment
- Beneficial ownership: 137,037 shares (1.35% of outstanding as of 4/2/2025); includes 49,650 options currently exercisable .
- Outstanding/Unvested Awards at 12/31/2024 (selected):
- RSUs: 36,150 (granted 8/3/2023); 23,300 (granted 2/29/2024); plus smaller prior RSUs (1,100; 2,500; 4,800) — RSUs generally vest 25% annually .
- Options: 59,500 unexercisable @ $6.80 exp. 2/29/2034; 59,325 unexercisable and 19,775 exercisable @ $7.69 exp. 8/3/2033; additional older lots as disclosed .
- Hedging/pledging: Company policy prohibits hedging and pledging of Company stock; short sales and margining are also prohibited .
- Ownership guidelines: CEO must hold 2× base salary in stock within three years; Dillon has until April 4, 2026 to comply .
Insider trading activity (Form 4 highlights)
- RSU tax withholding: On March 1 and March 4, 2025, Dillon relinquished 309 and 257 shares, respectively, upon RSU conversions for tax withholding .
- 10b5‑1: An August 4, 2025 Form 4 indicates trading pursuant to a 10b5‑1 plan (checkbox marked); see SEC filing index and IR archive .
Employment Terms
| Term | Summary |
|---|---|
| Agreement date/term | CEO Employment Agreement effective Sept 4, 2024; 1‑year term with automatic 1‑year renewals unless 90‑days’ notice . |
| Base salary | $618,000; annual bonus targeted as % of base; eligible for annual long‑term equity under 2014 Plan . |
| Severance (no CIC) | If terminated without Cause or resigns for Good Reason: 12 months base; prior‑year earned bonus (if unpaid); pro‑rated target bonus for year of termination, paid over 12 months; 12 months after‑tax COBRA reimbursement; release required . |
| Change‑in‑Control (double trigger) | If terminated without Cause or resigns for Good Reason within 6 months before or 12 months after a CIC: 24 months base; prior‑year earned bonus (if unpaid); 2× target annual bonus over 24 months; up to 18 months after‑tax COBRA reimbursement; release required . |
| Equity on CIC | Plan provides acceleration immediately prior to certain CIC events; performance‑based awards vest at target if performance period incomplete . |
| Death/Disability | Pro‑rated annual bonus for service portion in year of termination (release requirement for disability) . |
| Restrictive covenants | Non‑compete and non‑solicit for 1 year post‑termination; confidentiality and IP assignment; non‑disparagement . |
Board Governance and Director Service
- Board/role: Director since 2011; CEO since April 2023. Upon becoming CEO, Dillon stepped down from all Board committees; he is the only non‑independent director; Board Chair is independent (Chair role separated in 2022) .
- Independence and structure: All committees are fully independent; Dillon is not independent under Nasdaq rules due to executive role .
- Committee leadership refresh: Audit chair transitioned to Emanuel Hilario; Compensation chair to Randall Friedman; Nominating & Governance chair to Audrey Dunning .
- Attendance: Each director attended 100% of Board and committee meetings in 2024 .
- Director pay: As CEO, Dillon receives no additional director compensation .
Company Performance Context (during Dillon’s CEO tenure)
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Revenue ($000s) | 72,631 | 43,384 |
| EBITDA ($000s) | 7,647 | (2,678) |
| TSR value of $100 (since 12/31/2021) | $67.44 (as of 12/29/2023) | $39.52 (as of 12/31/2024) |
Say‑on‑Pay and shareholder feedback: At the 2024 Annual Meeting, ~90.5% of votes cast supported NEO pay; second consecutive year >90% support . The company maintains clawback policies (legal/compliance violations and restatement‑based) and stock ownership guidelines .
Compensation Structure Analysis (signals)
- Mix and at‑risk pay: Significant equity component (RSUs/PSUs/options). 2024 PSUs forfeited (thresholds missed), indicating high sensitivity to FST revenue and adjusted EBITDA; annual bonus paid at 16.7% of target due to partial strategic objective achievement .
- Metric rigor: 2024 bonus and PSU metrics emphasized FST revenue and adjusted EBITDA; both fell short (revenue $16.101m vs $16.5m threshold; adjusted EBITDA negative), suppressing payouts .
- Governance protections: Prohibitions on hedging/pledging, dual clawback policies, and CEO ownership guideline (2× salary by April 2026) promote alignment .
- CIC economics: Double‑trigger severance at 2× salary plus 2× target bonus and up to 18 months COBRA is meaningful but without excise tax gross‑ups; equity acceleration governed by plan (performance awards at target if open) .
Director Compensation (as a Director)
- Dillon receives no cash/RSU director retainers due to executive status; non‑employee director program equals $40,000 cash retainer (quarterly) plus ~$45,000 in RSUs annually; Chair receives additional $25,000 .
Risk Indicators & Red Flags
- 2024 operating performance: Revenue decline and negative EBITDA; PSUs forfeited and minimal AIP payout .
- Equity overhang/vesting cadence: Substantial unvested RSUs and unexercisable options scheduled to vest over 2025–2027 may create periodic liquidity around vesting/tax events (evidenced by March 2025 tax‑withholding Form 4s) .
- Alignment mitigants: No hedging/pledging allowed; stock ownership guideline in force; clawbacks adopted .
Investment Implications
- Pay-for-performance is functioning: With revenue and EBITDA shortfalls in 2024, Dillon’s PSU grant was forfeited and cash bonus paid at just 16.7% of target—evidence of downside risk in incentive design and alignment with shareholder outcomes .
- Retention balanced with discipline: The new CEO agreement secures Dillon with standard 1‑year auto‑renewal and robust double‑trigger CIC terms, but no tax gross‑ups and compliance‑heavy covenants/clawbacks reduce governance risk .
- Trading/overhang watch: Expect episodic Form 4s around vesting/tax events; a 10b5‑1 plan was indicated in August 2025, which can smooth selling cadence but may still create technical pressure around scheduled sales .
- Operating inflection needed: To re‑activate equity upside and higher cash pay outcomes, FST revenue and adjusted EBITDA must rebound; investors should monitor quarterly FST revenue trajectory and cost discipline given 2024’s negative EBITDA .