John T. Treace
About John T. Treace
Founder and CEO of Treace Medical Concepts since 2014; age 53; BS in Finance from Seattle University; Board director since inception with 11 years of tenure . Under his leadership, 2024 revenue grew 12% year over year to $209.4M, while Adjusted EBITDA improved to a loss of ($11.0)M from ($24.4)M; Q4 2024 reached a record $11.1M Adjusted EBITDA, up 322% year over year . Pay-versus-performance shows cumulative TSR of an initial $100 investment declining to $39.91 in 2024 from $68.40 in 2023 (and $123.34 in 2022), reflecting share price volatility during his tenure . Governance update: he will assume the role of Chairman upon the retirement of James T. Treace, resulting in combined CEO/Chair roles with a Lead Independent Director as counterbalance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Treace Medical Concepts | Founder, CEO, Director | 2014–present | Built bunion-focused portfolio; scaled surgeon base and product innovation |
| Wright Medical Group | SVP U.S. Sales & Global Marketing | 2010–2013 | Led commercial strategy in extremities/biologics at a market-leading foot/ankle company |
| Wright Medical Group | VP Biologics & Extremities | 2003–2009 | Expanded product lines and segment presence |
| Wright Medical Group | Sr. Director Biologics Marketing | 2001–2003 | Drove biologics marketing |
| Wright Medical Group | Sr. Director Sales Administration | 2000–2001 | Supported sales operations |
| Xomed Surgical Products | Director of Marketing; Senior Product Manager | 1996–2000 | Advanced ENT marketing/product management |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ENTrigue Surgical | Board Director | 2010–2013 | Company acquired by Arthrocare; contributed to strategic exit |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 568,219 | 684,384 | 728,000 (approved in Feb 2024) |
| Target Bonus (%) | N/D | 100% of salary | 100% of salary |
| Actual Bonus Paid ($) | 457,000 | 393,000 | 89,880 |
Notes: N/D = Not disclosed explicitly for 2022 in proxies.
Performance Compensation
2024 Annual Cash Incentive Plan Results
| Metric | Weight | Target | Actual | Payout vs Target | Weighted Payout |
|---|---|---|---|---|---|
| Revenue Growth | 70% | 24.9% | 11.9% | Below threshold (0%) | 0% |
| Adjusted EBITDA (before bonus) ($000s) | 15% | 1,037 | (7,689) | Below threshold (0%) | 0% |
| Increase in Active Surgeon Count | 15% | 13.8% | 9.8% | 96.5% of target | 12.3% |
| Final Plan Payout | — | — | — | — | 12.3% |
Long-Term Equity Awards (CEO)
| Grant Date | Award Type | Shares Granted | Fair Value ($) | Vesting / Performance |
|---|---|---|---|---|
| 1/10/2024 | RSUs | 178,325 | 2,400,255 | 25% annually over 4 years, service-based |
| 1/10/2024 | PSUs | 178,325 | 3,368,559 | 3-year relative TSR vs S&P Health Care Equipment Select Index; 25th/50th/75th percentile → 50%/100%/200% funding; interim 1-year earned = 0% |
| 3/10/2023 | Options | 186,900 | N/A | 25% annually over 4 years; strike $24.07; expires 3/10/2033 |
| 3/10/2023 | RSUs | 82,475 | N/A | 25% annually over 4 years |
| 7/24/2023 | PSUs | 107,225 target | N/A | 2-year relative TSR; 25th/50th/75th/90th percentiles → 50%/100%/200%/250% |
2025 plan changes: Focused only on revenue (60%) and Adjusted EBITDA (before bonus) (40%); “active surgeon count” removed; NEO mix eliminates options (CEO remains 50% RSUs/50% PSUs) .
Equity Ownership & Alignment
| Ownership Detail | Amount |
|---|---|
| Beneficial Ownership (shares) | 11,994,325 |
| Ownership (% of outstanding) | 19.14% |
| Options (Exercisable/Unexercisable; Key Grants) | 120,284/120,282 @ $19.15 exp 3/8/2032; 10,442/10,442 @ $21.07 exp 3/8/2027 |
| Unvested RSUs (12/31/2024) | 178,325 |
| Unvested PSUs (targets at 12/31/2024) | 178,325 (2024 grant) + 107,225 (2023 grant) |
| Stock Ownership Guidelines | CEO 5x salary; compliance by 12/31/2030 or 5 years from appointment; all executives/directors within accumulation period and in compliance |
| Hedging/Pledging | Prohibited for directors/officers/employees (no pledging/margin accounts) |
Insider selling pressure: RSU vesting on annual anniversaries and option vesting schedules can create periodic liquidity windows; company prohibits hedging/pledging, reducing misalignment risk .
Employment Terms
| Provision | Outside Change-in-Control | Within 3 months before / 18 months after Change-in-Control |
|---|---|---|
| Salary Continuation | 12 months | 18 months |
| Target Bonus | Pro-rated target bonus (100%) | 150% of target bonus, lump sum |
| Equity Acceleration | Service-based awards accelerate per plan; performance awards generally not accelerated | Service-based awards accelerate; performance awards convert/settle per deal mechanics; values illustrative below |
| COBRA | 12 months | 18 months |
| Outplacement | Up to $10,000 | Up to $10,000 |
| Excise Tax Gross-Up | 100% gross-up for 280G/4999 excise, plus taxes on gross-up (shareholder-unfriendly) |
Illustrative CEO payouts (assuming 12/31/2024 termination): outside CoC total $1,500,578; within CoC total $6,283,317, including $2,184,000 cash severance, $4,037,450 stock-based rights, $51,867 COBRA, $10,000 outplacement .
Board Governance
- Board service: Class III Director; will become Chairman at 2025 Annual Meeting; Lead Independent Director (Richard W. Mott) to remain, providing independent leadership and executive session oversight .
- Independence: 7 of 9 directors independent; family relationship disclosed (CEO is nephew of outgoing Chairman) .
- Committees: CEO is not on committees; Audit and Compensation Committees fully independent; Nominating & Corporate Governance includes independent members .
- Attendance: Board met 8 times in 2024; all directors met ≥75% attendance; 8 of 9 attended the 2024 AGM .
- Director compensation: Employee directors receive no additional pay for board service .
Related Party Transactions and Policies
- Immediate family employment: CEO’s brother-in-law, Tori Dapas, served as VP, Sales Operations; 2024 total compensation ~$0.6M and RSU grants disclosed .
- Clawback policy: Effective October 2023; covers erroneously received incentive comp; recoupment without fault requirement .
- Insider trading policy: Strict hedging/pledging prohibitions .
Compensation Structure Analysis
- Mix shift: 2024 introduced PSUs for CEO (50% of grant) and NEOs; CEO eliminated options from annual grants (remains RSUs/PSUs 50/50), NEOs reduced options in 2024, eliminated for 2025 to improve durability across market conditions .
- Annual bonus metrics tightened for 2025: revenue and Adjusted EBITDA only; removed operational metric, increasing financial accountability .
- Benchmarking: Peer group adjusted for 2025; TMCI was at 49th percentile for revenue and 25th for market cap when setting 2024 peers; base pay targeted ~50th percentile and long-term incentives 50th–75th percentile .
- Say-on-pay support: 91.78% approval of 2023 program at 2024 AGM; indicates shareholder alignment with pay practices .
Performance & Track Record
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenue ($) | 141,838,000 | 187,118,000 | 209,357,000 |
| EBITDA ($) | (32,711,000)* | (46,576,000)* | (48,216,000)* |
Values retrieved from S&P Global.*
Additional highlights: Active surgeon base grew 10% to 3,135 in 2024; product portfolio expanded to address all bunion classes (Nanoplasty, Percuplasty, SpeedMTP) . Q4 2024 marked record quarterly Adjusted EBITDA of $11.1M .
Equity Ownership & Vesting Detail (Year-End 2024)
| Category | Detail |
|---|---|
| Options | 120,284/120,282 @ $19.15 (exp 3/8/2032); 10,442/10,442 @ $21.07 (exp 3/8/2027); 46,725/140,175 @ $24.07 (exp 3/10/2033) |
| RSUs | Unvested 178,325 (1/10/2024 grant) |
| PSUs | Unvested target 178,325 (2024 grant); prior PSU grant 107,225 (7/24/2023) |
| Annual RSU/Option Vesting | RSUs and options generally vest 25% annually over 4 years |
Director Compensation
| Component | Policy |
|---|---|
| Employee Director Pay | No additional compensation for CEO’s board service |
| Non-Employee Director Retainers | Board $45k; Chair $45k; Committee Chair $20k; Committee Member $10k; Lead Independent Director $50k (established Aug 2024) |
| Equity (Non-Employee Directors) | Annual RSUs & options (~$75k each in 2024), 50/50 mix; full acceleration upon change in control |
Say-on-Pay & Shareholder Feedback
- 2024 AGM: 91.78% support for 2023 executive compensation program; ongoing use of Compensia and peer benchmarking; program changes implemented for 2024–2025 to enhance performance linkage .
Expertise & Qualifications
- Credentials: Founder; extensive commercial leadership in foot & ankle; finance degree; prior board experience; deep product-market knowledge .
- Strategy and innovation: Portfolio expansion across bunion classes; investment in surgeon education and direct-to-patient outreach .
Compensation Committee Analysis
- Independence and consultants: Compensation Committee fully independent; advised by Compensia; no conflicts identified .
- 2024–2025 actions: Increased performance-based equity (PSUs), tightened annual bonus metrics, eliminated stock options for NEOs in 2025 to improve retention and durability .
Risk Indicators & Red Flags
- Excise tax gross-up on change-in-control benefits (shareholder-unfriendly) .
- Combined CEO/Chair role beginning 2025; mitigated by Lead Independent Director role and independent committees .
- Family relationships and related-party employment disclosed (potential governance optics) .
- Strong clawback and anti-hedging/pledging policies reduce misalignment risk .
- High founder ownership (19.14%) aligns incentives but concentrates influence .
Compensation & Incentives Summary (Multi-Year)
| Year | Salary ($) | Stock Awards ($) | Options ($) | Non-Equity Incentive ($) | Total ($) |
|---|---|---|---|---|---|
| 2022 | 568,219 | 648,706 | 1,931,854 | 457,000 | 3,617,249 |
| 2023 | 684,384 | 5,350,966 | 1,977,589 | 393,000 | 8,422,635 |
| 2024 | 723,410 | 5,768,814 | — | 89,880 | 6,597,160 |
Note: 2024 CEO annual grant mix was RSUs/PSUs 50/50; no options in 2024 annual grant .
Investment Implications
- Alignment is improving: 2024 introduced meaningful PSUs tied to relative TSR; 2025 further tightens annual metrics to revenue and Adjusted EBITDA only, likely increasing pay-for-performance sensitivity .
- Retention and overhang: Large unvested RSU/PSU balances and periodic vesting could create episodic sell pressure; anti-hedging/pledging policies mitigate risk; high founder ownership supports long-term alignment .
- Governance watch items: Combined CEO/Chair role and family ties raise independence optics; presence of Lead Independent Director and strong committee independence are mitigating factors; excise tax gross-up remains a shareholder-unfriendly feature .
- Performance trajectory: Revenue growth and Adjusted EBITDA trends are improving, with record Q4 profitability, but multi-year TSR has been volatile; compensation design now more directly linked to financial and market outcomes, which may reinforce execution discipline .