Paul Talmo
About Paul Talmo
Paul Talmo (age 58) is Chief Technology Officer at TELA Bio, appointed in August 2023 after serving in roles of increasing responsibility since 2017, including Chief Strategic Officer (April 2020–August 2023). He has 25+ years in medical devices and implantable materials, notably 16 years at LifeCell where he helped introduce biologic materials into urogynecology and hernia markets and developed early breast reconstruction techniques; he holds a B.A. in Business Administration from the University of New Hampshire . Company performance context: 2024 revenue was $69.3M (+19% YoY) while cumulative TSR for an initial fixed $100 investment was 26.26 in 2024 (57.57 in 2023); net income was $(37.8)M in 2024 ($(46.7)M in 2023) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| TELA Bio | Chief Technology Officer | Aug 2023–present | Leads technology strategy/commercialization across soft-tissue matrices (e.g., hernia/urogynecology) . |
| TELA Bio | Chief Strategic Officer | Apr 2020–Aug 2023 | Drove strategic initiatives during commercialization and portfolio expansion . |
| LifeCell Corporation | Senior roles in regenerative medicine | 16 years (dates not disclosed) | Introduced biologic materials to urogynecology and hernia markets; co-developed implant-based breast reconstruction protocols in early 2000s . |
External Roles
None disclosed in the 2025 proxy for Talmo (no public company directorships or committee roles listed) .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $392,667 | $406,729 |
| Base Salary Rate (at Jan 1, 2024; adjusted Mar 1, 2024) | $395,200; increased to $409,035 (+~3.5%) | $395,200 → $409,035 (+~3.5%) |
| Target Bonus % of Base | 50% | 50% |
| Actual Bonus Paid ($) | $200,000 | $170,825 |
| Actual Bonus as % of Target | Not disclosed for 2023 | 84% of target |
| Stock Awards Grant-Date Fair Value ($) | $176,400 | $118,069 |
| Option Awards Grant-Date Fair Value ($) | $190,170 | $117,991 |
| Other Compensation ($) | $3,000 (401k match) | $3,000 (401k match) |
Performance Compensation
Annual Incentive (Cash)
| Item | Target | Actual | Payout | Notes |
|---|---|---|---|---|
| Annual Cash Bonus | 50% of base salary | $170,825 | 84% of target | Corporate/individual goals included revenue and sales targets, cost control, manufacturing capabilities, education programs, and capital/liquidity communications (weightings not disclosed) . |
Equity Incentives – RSUs and Options (Structure)
- Options typically vest 25% at first anniversary, then monthly over 36 months; options granted before Nov 7, 2019 fully accelerate on change in control, subject to service .
- RSUs generally vest in 4 equal annual installments from grant date; double‑trigger acceleration if terminated without cause or for good reason within 12 months post change in control per employment terms .
- 2023 PSUs vest on achievement of annual revenue and gross margin goals, subject to service through the earlier of Dec 31, 2026 or change in control; PSUs vest at target upon a change in control transaction .
Outstanding Equity Awards (as of 12/31/2024) – Paul Talmo
| Grant Date | Instrument | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration | Unvested RSUs (#) | Market Value of Unvested RSUs ($) | Unearned PSUs (#) | PSUs Market/Payout Value ($) |
|---|---|---|---|---|---|---|---|---|---|
| 2/24/2017 | Option | 24,300 | — | 5.93 | 2/24/2027 | — | — | — | — |
| 2/28/2018 | Option | 9,801 | — | 5.93 | 2/28/2028 | — | — | — | — |
| 11/7/2019 | Option | 70,879 | — | 13.00 | 11/7/2029 | — | — | — | — |
| 2/24/2021 | Option/RSU | 20,604 | 896 | 16.99 | 2/24/2031 | 2,950 | $8,909 | — | — |
| 3/31/2021 | RSU | — | — | — | — | 627 | $1,894 | — | — |
| 2/23/2022 | Option/RSU | 14,804 | 6,096 | 11.75 | 2/23/2032 | 6,100 | $18,422 | — | — |
| 2/23/2023 | Option/RSU | 12,100 | 14,300 | 10.50 | 2/23/2033 | 12,600 | $38,052 | — | — |
| 3/2/2023 | RSU (PSU framework established) | — | — | — | — | — | — | 23,554 | $71,133 (at $3.02/share) |
| 2/23/2024 | Option/RSU | — | 24,400 | 7.07 | 2/23/2034 | 16,700 | $50,434 | — | — |
Equity Ownership & Alignment
| Category | Detail |
|---|---|
| Total Beneficial Ownership | 227,510 shares (61,370 common; 204 warrants; 165,936 options exercisable within 60 days of April 1, 2025) . |
| Ownership % of Outstanding | ~0.6% (227,510 / 39,551,098 shares outstanding on Apr 1, 2025) . |
| Vested vs Unvested | Options exercisable within 60 days: 165,936; additional unexercisable options and unvested RSUs/PSUs as per table above . |
| Pledging/Hedging | Prohibited (no margin accounts, hedges, short sales, pledging) . |
| Stock Ownership Guidelines | Not disclosed for executives in the proxy . |
| Insider Participation in Offering | Purchased 22,222 shares for $49,999.50 in Oct 2024 public offering, indicating incremental alignment . |
Employment Terms
| Provision | Talmo Terms |
|---|---|
| Target Bonus | 50% of base salary . |
| Severance (no Change-in-Control) | 9 months base salary continuation and 9 months of health/dental/vision upon termination without “cause” or for “good reason,” subject to release and covenants (similar to CFO terms; shorter than CEO) . |
| Severance (within 12 months of Change-in-Control) | 12 months salary continuation; 12 months benefits; payment equal to 100% of then-current target bonus paid over 12 months; equity acceleration mirroring CEO structure (time-based vesting acceleration; see PSU note) . |
| Equity Acceleration | RSUs subject to double trigger acceleration upon qualifying termination post CoC; options granted pre‑Nov 7, 2019 fully accelerate on CoC; PSUs vest at target upon a change in control transaction per PSU terms . |
| Definitions | “Cause,” “Good Reason,” and “Change of Control” defined in employment agreements . |
| Clawback | Company-wide clawback policy compliant with Dodd-Frank/SEC/Nasdaq applicable to current/former executive officers (3-year lookback upon restatement) . |
| Deferred Comp/Pension | No defined benefit pension or nonqualified deferred compensation plans; standard 401(k) with employer match up to $3,000/year . |
Performance Compensation
Annual Plan Design and Outcomes (2024)
| Metric | Weighting | Target | Actual | Payout | Vesting/Timing |
|---|---|---|---|---|---|
| Corporate and Individual Goals (Revenue/Sales, Cost Control, Manufacturing, Education Programs, Capital/Liquidity Communication) | Not disclosed | 50% of base salary | Met at 84% of target | $170,825 paid Mar 2025 | Annual cash bonus . |
PSU Framework (Granted 2023)
| Metric | Target | Measurement Window | Vesting Mechanics | CIC Treatment |
|---|---|---|---|---|
| Annual Revenue and Gross Margin Goals | Threshold/Target not numerically disclosed | Through Dec 31, 2026 | Vests upon achieving performance goals; service through earlier of Dec 31, 2026 or CoC | PSUs vest at target at CoC . |
Compensation Structure Analysis
- Mix of pay remains balanced: base salary increases were modest (~3.5%), with continued emphasis on at‑risk incentives (annual cash bonus and multi‑year equity), consistent with pay-for-performance .
- Introduction/continuation of PSUs tied to revenue and gross margin enhances alignment with top-line growth and profitability; PSUs have explicit CoC vest-at-target provision, increasing certainty in transaction scenarios .
- No hedging/pledging and presence of clawback policy support investor-friendly alignment and risk mitigation .
Risk Indicators & Red Flags
- Company-level losses (net income $(37.8)M in 2024, $(46.7)M in 2023) could pressure future bonus outcomes and equity values if not offset by growth and margin improvements .
- PSUs vesting at target on CoC may increase deal-related payout certainty; double-trigger RSU acceleration reduces retention risk post-transaction but could elevate dilution/perceived windfall concerns .
- No evidence of option repricing, tax gross-ups, or related-party arrangements involving Talmo; public offering participation was at market terms .
Equity Ownership & Alignment (Detail)
| Component | Shares |
|---|---|
| Common shares owned | 61,370 |
| Warrants (exercisable within 60 days) | 204 |
| Options (exercisable within 60 days) | 165,936 |
| Total beneficial ownership | 227,510 |
| Shares outstanding (denominator) | 39,551,098 |
| Ownership % | ~0.6% (calculated from above) |
Investment Implications
- Alignment: Talmo’s compensation includes significant equity with standard vesting plus PSUs tied to revenue and margin; prohibitions on hedging/pledging and personal share purchases in Oct 2024 support alignment and reduce adverse signaling risk .
- Retention: Double-trigger RSU acceleration and 12-month CoC severance terms lower separation friction in a sale; outside CoC, nine-month severance provides moderate protection, suggesting balanced retention incentives .
- Performance sensitivity: Annual bonus tied to operational metrics paid at 84% of target for 2024 amid 19% revenue growth but negative net income, indicating incentives respond to growth while profitability headwinds persist; PSUs concentrate incentives on revenue/gross margin through 2026 .
- Trading signals: With 165,936 options currently exercisable and ongoing RSU/option vesting, monitor Form 4 filings for potential selling cadence; however, hedging/pledging bans reduce leverage-driven selling pressure .