Aaron J. Berutti
About Aaron J. Berutti
Aaron J. Berutti is Senior Vice President, Sales at Treace Medical Concepts (TMCI), serving since August 2021; he is 46 years old and leads commercial execution across the bunion-focused sales organization . He holds a BE in Mechanical Engineering (Vanderbilt) and MS/MBA (Indiana University Kelley), with prior senior roles at Orthofix, Cartiva, and Wright Medical (Stryker) . Company performance under his tenure includes 2024 revenue of $209.4M (+12% YoY) and a significant improvement in Adjusted EBITDA to a loss of ($11.0)M from ($24.4)M, with the most profitable quarter ever in Q4 2024 at $11.1M Adjusted EBITDA; however, 2024 annual cash incentive metrics paid at 12.3% of target and 2024 one-year PSU tranche earned 0% due to sub-threshold relative TSR versus the S&P Health Care Equipment Select Index .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Orthofix Medical Inc. | VP Sales & Marketing, Extremities – U.S. & Canada | 2018–2021 | Led extremities commercial strategy across U.S. & Canada |
| Cartiva, Inc. | VP Business Development | 2018 | Built partnerships and BD for foot/ankle implants |
| Wright Medical Group (now Stryker) | VP Sales, Lower Extremity & Biologics; various roles | 2003–2017 | Scaled lower extremity sales; contributed to biologics portfolio |
External Roles
No public-company directorships or external board roles disclosed for Berutti .
Fixed Compensation
| Metric | 2022 | 2023 |
|---|---|---|
| Base Salary ($) | 333,644 | 365,233 |
| Target Bonus % of Salary | 50% (offer letter) | 50% (annual plan) |
| Actual Annual Cash Incentive ($) | 173,000 | 104,000 |
| All Other Compensation ($) | 12,771 (life insurance, 401k match) | 14,990 (life insurance, 401k match) |
Notes:
- 2023 bonuses under the annual cash incentive plan paid at 56.1% of target across NEOs (applies to Berutti as 2023 NEO) .
Performance Compensation
Annual Cash Incentive Plan Design (2023 actuals; 2024 framework for context)
| Year | Metric | Weight | Target | Actual | Payout Driver | Vesting/Payment |
|---|---|---|---|---|---|---|
| 2023 | Revenue | 70% | Not disclosed | Not disclosed | Overall payout 56.1% of target for NEOs | Cash, paid Mar 2024 |
| 2023 | Adjusted EBITDA | 15% | Not disclosed | Not disclosed | Included in 56.1% overall | Cash |
| 2023 | Active Surgeon Count | 15% | Not disclosed | Not disclosed | Included in 56.1% overall | Cash |
| 2024 | Revenue Growth | 70% | 24.9% | 11.9% (below threshold) | 0% for metric | Cash (plan payout 12.3% overall) |
| 2024 | Adjusted EBITDA (before bonus) | 15% | $1,037K | ($7,689)K | 0% for metric | Cash |
| 2024 | Active Surgeon Count | 15% | +13.8% | +9.8% (96.5% of target) | 12.3% overall payout | Cash |
2025 plan changes: Eliminated “active surgeon count”; weights: Revenue 60%; Adjusted EBITDA 40% .
Long-Term Equity Awards and Vesting
| Award Type | Grant Date | Quantity | Terms |
|---|---|---|---|
| Stock Options | 8/3/2021 | 150,000 | 25% per year over 4 years; 10-year term; exercise price $29.26 |
| Stock Options | 3/8/2022 | 92,100 (23,025 exercisable; 69,075 unexercisable at FY23) | 25% per year; exercise price $19.15 |
| Stock Options | 3/10/2023 | 67,500 (unexercisable at FY23) | 25% per year; exercise price $24.07 |
| RSUs | 3/8/2022 | 8,962 | 25% per year over 4 years |
| RSUs | 3/10/2023 | 29,800 | 25% per year over 4 years |
| PSUs (Relative TSR) | 7/24/2023 | 42,900 target | Earned July 24, 2025 based on 2-yr TSR vs S&P Health Care Equipment Select Index; 0–250% payout |
| PSU Program (2024) | 1/10/2024 (framework) | NEO program added PSUs (CEO 50%, other NEOs 25%) | 3-year relative TSR vs S&P Health Care Equipment Select Index; one-year 2024 tranche earned 0% (<25th percentile) |
Change-in-control treatment: PSUs convert to time-based RSUs at least equal to interim-earned or COC-price performance; remaining RSUs vest by Dec 31, 2026 subject to service . Options/RSUs generally accelerate per CIC agreements (time-based awards; performance awards handled per plan language) .
Equity Ownership & Alignment
| As-of Date | Total Beneficial Ownership (shares) | % of Outstanding | Direct/Indirect | Options Exercisable ≤60 days | RSUs Vesting ≤60 days |
|---|---|---|---|---|---|
| Mar 25, 2024 | 142,005 | <1% | 4,080 direct | 137,925 | N/A (not listed in ≤60 day bucket for him) |
Outstanding awards at FY 2023 year-end indicate RSUs valued at $12.75/share (market close 12/29/2023), and option strikes ($29.26, $19.15, $24.07) above that price—implying options were underwater at FY-end (reducing near-term exercise/selling pressure) . Anti-hedging/anti-pledging policy prohibits hedging and pledging of Company stock; holding in margin accounts is prohibited—supporting alignment and lowering leverage risk . Stock ownership guidelines adopted Feb 19, 2025: executive officers to hold ≥1x salary, with compliance expected by Dec 31, 2030 or within five years of appointment; as of the record date, all executives were in their accumulation period and in compliance .
Employment Terms
- Offer letter (Aug 2021): Base salary $300,000; target annual bonus 50% of salary; initial 150,000 option grant (25% per year over 4 years); relocation support including lodging, travel and tax gross-up for relocation-related reimbursements (now fully provided) .
- Change-in-Control (CIC) severance (entered Apr/Aug 2021): Double-trigger window (3 months before to 18 months after CIC). If terminated without cause or resign for good reason in the CIC period: 12 months base salary; 100% of target annual bonus; 18 months COBRA reimbursement; accelerated vesting of outstanding unvested time-based equity (performance awards handled per plan); plus 280G excise tax gross-up with additional tax gross-up for taxes on the gross-up—shareholder-unfriendly feature increasing CIC costs . Outside CIC: 12 months base salary; pro-rated target bonus for service period; 12 months COBRA; up to $10,000 outplacement support .
- Clawback policy: Effective Oct 2, 2023; recovers erroneously awarded incentive-based compensation for 3 fiscal years preceding a required restatement—no negligence/fault requirement .
- Non-compete/non-solicit: Eligibility for severance requires attestation that confidentiality, nonsolicitation, and noncompetition agreement is effective and enforceable .
Compensation Structure Analysis
- Mix shift and PSU adoption: TMCI migrated toward performance equity (PSUs) tied to relative TSR, increasing at-risk pay alignment; CEO at 50% PSU; other NEOs at 25% in 2024 . In 2025, stock options eliminated from annual grants for non-CEO NEOs to improve program durability across market conditions .
- Annual incentives tightened: 2025 plan focuses solely on revenue (60%) and Adjusted EBITDA (40%), removing operational count metrics—heightening linkage to financial outcomes .
- Peer benchmarking: Compensation peer group balanced across medtech/equipment; TMCI revenue ~49th percentile, market cap ~25th percentile at 2024 setting—mitigating pay inflation risk from oversized peers .
Say-on-Pay & Shareholder Feedback
- 2024 Annual Meeting: 91.78% approval of 2023 executive compensation program; Compensation Committee continued program evolution without fundamental changes in 2024 .
- 2025: Advisory vote to continue; Company notes ongoing investor engagement .
Investment Implications
- Alignment positives: Anti-hedging/anti-pledging policies and new ownership guidelines (1x salary for executive officers) enhance alignment; Berutti’s beneficial ownership includes significant in-the-money potential if execution improves, though options were underwater at FY23—limiting near-term selling pressure .
- Performance-contingent upside: PSU structures tied to relative TSR directly monetize long-term shareholder value creation; 2024 one-year tranche earned 0%, signaling a need for sustained market outperformance for vesting—reducing windfall risk and encouraging durable execution .
- Retention and CIC risks: Robust CIC benefits (salary, bonus, COBRA, vesting), combined with a 280G excise tax gross-up, represent a cost overhang in potential M&A scenarios and are a governance red flag for pay design; however, clawback implementation and tighter financial metrics in annual plans partially offset pay-risk concerns .
- Near-term incentive pressure: 2024 cash incentive payout of 12.3% indicates shortfall vs targets, potentially sharpening focus on revenue growth and EBITDA improvement in 2025; removal of operational metrics (surgeon count) should heighten financial accountability within the sales function .
Key callouts: 280G tax gross-up in CIC agreements (red flag); options underwater at FY23 (lower immediate selling pressure); enhanced clawback/ownership policies (alignment); PSU framework (TSR discipline) **[1630627_0000950170-24-040228_tmci_def_14a_2024_for_fi.htm:47]** **[1630627_0000950170-24-040228_tmci_def_14a_2024_for_fi.htm:45]** **[1630627_0000950170-25-051369_tmci-20250404.htm:53]** **[1630627_0000950170-25-051369_tmci-20250404.htm:54]** **[1630627_0000950170-25-051369_tmci-20250404.htm:50]**.
Sources
- Executive biography and age, tenure:
- Company performance (2024):
- Annual incentive metrics/results:
- PSU design and one-year 2024 result:
- Equity awards and vesting specifics:
- Beneficial ownership:
- Offer letter; relocation benefits and tax gross-up:
- CIC severance terms and 280G gross-up:
- Clawback and insider trading policies:
- Stock ownership guidelines:
- Compensation peer group and percentile context:
- Say-on-Pay result: