Sean F. Scanlan
About Sean F. Scanlan
Sean F. Scanlan, Ph.D., is Chief Innovation Officer at Treace Medical Concepts, Inc. (TMCI); age 43, appointed CIO in January 2023 after progressive leadership roles in marketing and medical education since 2014 . He holds a BS in Engineering Science (Biomechanics) from the University of Florida and an MS and PhD in Mechanical Engineering (Biomechanical Engineering) from Stanford University . Company performance in 2024: revenue +12% YoY to $209.4M with Adjusted EBITDA improving to a loss of ($11.0)M; Q4 2024 Adjusted EBITDA reached $11.1M; active surgeon base rose 10% to 3,135 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Treace Medical Concepts, Inc. | Chief Innovation Officer | Jan 2023–present | Leads innovation agenda supporting bunion solutions strategy |
| Treace Medical Concepts, Inc. | SVP, Marketing | Sep 2021–Jan 2023 | Drove commercial/marketing execution |
| Treace Medical Concepts, Inc. | SVP, Marketing & Medical Education | Mar 2021–Sep 2021 | Led surgeon education and marketing initiatives |
| Treace Medical Concepts, Inc. | VP, Marketing & Medical Education | Jan 2018–Mar 2021 | Built marketing and education infrastructure |
| Treace Medical Concepts, Inc. | Marketing roles of increasing responsibility | Dec 2014–Jan 2018 | Early commercial build-out |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Smith & Nephew (NYSE: SNN) | Product Development Engineer, Advanced Surgical Devices | Jun 2011–Apr 2014 | Product development and early-stage tech assessment |
| Stanford University | Led interdisciplinary clinical research (orthopaedic surgery & engineering) | Jan 2006–May 2011 | Clinical/engineering research foundation |
| Moximed Inc. | Consultant | Oct 2009–May 2011 | Early-stage orthopaedics startup advisory |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 321,370 | 380,630 | 419,262 |
| Stock Awards ($) | 203,397 | 1,898,436 | 2,189,645 |
| Option Awards ($) | 607,841 | 549,683 | 437,956 |
| Non-Equity Incentive Plan Compensation ($) | 195,000 | 109,500 | 26,235 |
| All Other Compensation ($) | 10,574 | 11,629 | 12,337 |
| Total Compensation ($) | 1,338,182 | 2,949,878 | 3,085,435 |
| Annual Salary Level | Prior Salary | % Change |
|---|---|---|
| $425,000 (Feb 2024) | $390,000 | 9.0% |
| Target Bonus % | Target Bonus ($) | Actual Bonus ($) |
|---|---|---|
| 50% | 212,500 | 26,236 |
Performance Compensation
2024 Annual Cash Incentive Plan Results
| Metric | Weight | Threshold (50% payout) | Target (100% payout) | Maximum (150% payout) | Actual | Achievement | Weighted Payout |
|---|---|---|---|---|---|---|---|
| Revenue Growth | 70% | 12.4% | 24.9% | 37.4% | 11.9% | Below threshold | 0% |
| Adjusted EBITDA (before bonus) ($000s) | 15% | (7,380) | 1,037 | 9,453 | (7,689) | Below threshold | 0% |
| Increase in Active Surgeon Count | 15% | 2.5% | 13.8% | 25.2% | 9.8% | 96.5% | 12.3% |
| Final Payout | — | — | — | — | — | — | 12.3% |
2025 design change: “active surgeon count” removed; weights adjusted to Revenue 60% and Adjusted EBITDA 40% .
2024 Long-Term Equity Awards (Granted Jan 10, 2024 unless noted)
| Award Type | Shares/Options | Key Terms | Grant Date Fair Value ($) |
|---|---|---|---|
| Stock Options | 73,200 @ $13.46 strike | 4-year vest, 25% annually; 10-year term | 437,956 |
| RSUs | 65,025 | 4-year vest, 25% annually | 875,237 |
| PSUs (3-year TSR vs S&P Health Care Equipment Select Index) | 32,525 target | Performance period ends Dec 31, 2026; converts to time-based RSUs at deal close under CoC; vest Dec 31, 2026 | 614,397 |
| Retention RSUs (Aug 9, 2024) | 120,900 | 3-year vest, equal annual installments | 700,011 |
Vesting Schedules
- Standard RSUs/options: 25% annually over 4 years from grant date, subject to continuous service .
- 2023 PSUs: vest Jul 24, 2025 based on relative TSR; if CoC prior to vest, earned shares convert to time-based RSUs vesting Jul 24, 2025 .
- 2024 PSUs: 3-year performance period ending Dec 31, 2026; CoC conversion rules similar, vest Dec 31, 2026 .
- 2024 retention RSUs: three equal annual installments over 3 years from grant date .
Equity Ownership & Alignment
| Beneficial Ownership (Record Date) | Shares | % of Outstanding |
|---|---|---|
| Sean F. Scanlan | 579,948 | <1% (based on 62,385,101 shares outstanding) |
| 2024 Option Exercises | Shares Exercised | Value Realized ($) | 2024 RSU Vesting | Shares Vested | Value Realized ($) |
|---|---|---|---|---|---|
| Scanlan | 33,750 | 167,495 | RSUs | 8,226 | 99,260 |
- Outstanding/unvested positions include multiple prior-year options and RSUs with grants from 2015–2024; examples at 12/31/2024: unexercised options (e.g., 50,650 exercisable/25,324 unexercisable at $19.15 from 3/8/2022) and unvested RSUs (e.g., 17,193 and 3,287 units from 2023–2022 grants) . 2023 PSU award shows 42,900 shares at target for Scanlan; performance determination in July 2025 .
- Stock ownership guidelines adopted Feb 19, 2025: other executive officers must hold stock equal to 1x salary by the earlier of Dec 31, 2030 or 5 years from appointment; RSUs count, options do not; all executives are within accumulation period as of record date .
- Anti-hedging/anti-pledging: hedging prohibited; pledging/margin accounts prohibited for directors and executives .
- Section 16 filings: company supports compliance; all insiders compliant for FY2024 (one late Form 4 for a different officer) .
Employment Terms
| Provision | Terms |
|---|---|
| Change-in-Control Severance (double-trigger; termination within 3 months before or 18 months after CoC) | 12 months salary; 100% target bonus; 18 months COBRA reimbursement; accelerated vesting of unvested time-based equity; up to $10,000 outplacement |
| Non-CoC Involuntary Termination (without cause/good reason) | 12 months salary; pro-rated 100% target bonus; 12 months COBRA; up to $10,000 outplacement |
| Conditions | Release of claims; attestation that confidentiality, non-solicit, and non-compete agreements are in effect |
| 280G/4999 Excise Tax | Company provides full tax gross-up for excise tax and associated taxes—a shareholder-unfriendly feature |
| Illustrative Potential Payments (as of 12/31/2024) | Cash Severance | Equity Vesting Value | Welfare Benefits | Outplacement | Total |
|---|---|---|---|---|---|
| Termination w/o Cause or Good Reason (non-CoC) | $637,500 | — | $18,107 | $10,000 | $665,607 |
| CoC + Termination (double trigger) | $637,500 | $2,112,494 | $27,161 | $10,000 | $2,787,155 |
Compensation Committee Analysis and Governance
- Compensation Committee: Chair Lawrence W. Hamilton; members Elizabeth S. Hanna, Jane E. Kiernan, Richard W. Mott; independent; 5 meetings in 2024; 100% attendance .
- Consultant: Compensia, independent; no conflicts .
- Peer group benchmarking: medical device/equipment peers; TMCI ~49th percentile revenue, ~25th percentile market cap vs 2024 peers .
- Say-on-Pay support: 91.78% approval in 2024 for 2023 program .
- Compensation mix in 2024: salary; annual bonus (Revenue 70%, Adjusted EBITDA 15%, Active Surgeon Count 15%); RSUs (50% of target grant for NEOs ex-CEO); PSUs (25%); options (25%); retention RSUs (special) .
- 2025 structural shift: eliminate options for NEOs (ex-CEO); NEOs receive 75% RSUs / 25% PSUs; CEO 50%/50% .
Company Performance (context for pay-for-performance)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 141,838,000* | 187,118,000* | 209,357,000* |
| EBITDA ($) | (32,711,000)* | (46,576,000)* | (48,216,000)* |
| Net Income ($) | (42,815,000)* | (49,527,000)* | (55,743,000)* |
| Diluted EPS (Continuing Ops) | (0.7746)* | (0.8139)* | (0.9000)* |
Values retrieved from S&P Global.*
Investment Implications
- Pay-for-performance discipline: 2024 bonus payout at 12.3% (driven only by surgeon count metric) indicates the plan reduced cash awards when revenue/EBITDA targets missed, aligning short-term incentives to measurable outcomes .
- Equity alignment and retention: Material unvested RSUs/PSUs with 3–4 year vesting and TSR-linked PSUs support long-term alignment; 2024 retention RSUs signal targeted retention needs amid business transformation .
- Governance red flags: Presence of a full 280G excise tax gross-up is shareholder-unfriendly; anti-hedging/anti-pledging and clawback policies mitigate risk but gross-up increases potential parachute costs in transactions .
- Incentive design shift (2025): Removal of options for NEOs and heavier RSU mix improves retention and downside protection but may reduce leverage to upside stock performance; increased weighting to Revenue/Adjusted EBITDA should tighten pay-profit linkage .
- Ownership: Beneficial ownership <1% suggests limited personal exposure relative to total shares, but ongoing vesting and prior option exercises indicate continuous equity participation; adherence to new ownership guidelines expected by 2030 .