Andy Heyward
About Andy Heyward
Andy Heyward (age 76) is Chairman and Chief Executive Officer of Kartoon Studios (TOON), roles he has held since 2013; he previously co-founded DIC Animation City (later DIC Entertainment) and A Squared Entertainment, with a long track record of producing 5,000+ half-hour episodes of children’s programming and industry recognition (UCLA BA in Philosophy; Producers Guild member) . Under his leadership, TOON’s 2024 revenue was $32.6M vs $44.1M in 2023, while cumulative TSR in the Pay vs Performance disclosure shows an initial $100 investment declining to $44 (2022), $13 (2023), and $6 (2024), underscoring investor return pressure amid operating losses and ongoing turnaround efforts . He also serves on the Board of Cedars Sinai Medical Center and has received multiple industry awards .
- Dual-role governance note (CEO + Chair): TOON combines the Chair and CEO roles, citing small company effectiveness; the Board has independent directors on all key committees. No director attended fewer than 75% of Board/committee meetings in 2024 (Board met 6x) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| DIC Animation City / DIC Entertainment | Co-founder; CEO; later acquired by Capital Cities/ABC/Disney; repurchased with Bain; took public on AIM | 1983–2008 | Built a major children’s content library; scaled production; executed sale and IPO |
| A Squared Entertainment | Co-President, Co-founder | 2009– | Co-created IP and production pipeline; strategic foundation for later Kartoon content |
| Disney oversight of DIC | Operated DIC while under Disney ownership | 1995–2000 | Operational stewardship within a major studio ecosystem |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Cedars Sinai Medical Center | Board of Directors | n/d | Community and governance leadership |
| Producers Guild of America; National Academy of Television Arts; Paley Center | Member | n/d | Industry connectivity, best-practice engagement |
| UCLA College of Humanities | 2011 Commencement speaker | 2011 | Reputation/brand equity; alumni recognition |
Board Governance
- Board roles: Chairman and CEO (not independent). Committees are fully independent; Heyward is not listed as a member of Audit, Compensation, Nominating, or Investment Committees .
- Committee structure/membership (2024): Audit (Davis, Sicignano—Chair, Segall), Compensation (Segall—Chair, Loesch), Nominating (Segall—Chair; Davis; Turner-Graham), Investment (Davis; Sicignano). Vice Chair: Thomopoulos .
- Leadership structure: Board maintains combined CEO/Chair, citing company size and effectiveness; independent oversight via committees .
- Attendance: Board met 6 times in 2024; no director <75% attendance .
Fixed Compensation
| Component | 2023 | 2024 | Notes |
|---|---|---|---|
| Base salary ($) | 440,000 | 440,000 | Five-year employment agreement dated Dec 7, 2020 |
| Annual/Discretionary bonus ($) | 220,000 | 220,000 | Discretionary; also eligible for quarterly discretionary bonus up to $55,000 if Board-set criteria met |
| Creative producer fees ($) | 375,000 (implied by quarterly $100k starting 2/27/23; paid $416,984 all other comp total) | 400,000 (paid) | $100,000 per quarter for WOW services (added 2/27/23) |
| Executive producer fee ($/episode) | — | $12,500 per half-hour episode (up to 52/year) | None earned in 2024 |
| Other comp ($) | 816,984 (includes producer fees) | 415,384 (mainly producer fees) |
Performance Compensation
| Instrument | Metric/Trigger | Target/Terms | Actual/Vesting Status | Payout/Value |
|---|---|---|---|---|
| 500,000 Stock Options | Time-based; fully vested at grant | Strike $13.90; exp. 12/07/2030 | Fully vested; exercisable | Option overhang; no 2024 grant |
| 1,500,000 RSUs (12/7/2020 grant; amended 6/23/2021) | Mixed: time-based + performance (stock price/market cap; operating milestones) | 375,000 time-based; 1,125,000 performance-based: vests at stock price ≥$3.00 / $3.50 / $3.75 for 20 consecutive trading days or market cap ≥$903M / $1,053.5M / $1,128.75M; operating milestones alternative on anniversaries | 281,250 RSUs vested on 4/7/2022 upon completion of WOW and Ameba transactions; as of 12/7/2025, none of the stock price/market cap or further operating conditions were satisfied; 843,750 remain unvested | 843,750 unvested RSUs; market/OPS hurdles currently unmet |
Notes:
- Change in control: For these RSUs, upon a change in control the Compensation Committee determines vesting based on per-share deal value; plan-level COC allows the Committee to assume/substitute/accelerate/cancel awards at its discretion .
Multi‑Year CEO Compensation (Summary Compensation Table)
| Metric | 2023 | 2024 |
|---|---|---|
| Salary ($) | 440,000 | 440,000 |
| Bonus ($) | 220,000 | 220,000 |
| Stock awards ($) | – | – |
| Option awards ($) | – | – |
| All other comp ($) | 816,984 | 415,384 |
| Total ($) | 1,476,984 | 1,075,384 |
Pay vs Performance (context)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| CEO Compensation Actually Paid ($) | (5,369,928) | (1,861,069) | 698,509 |
| Value of $100 Investment – TSR | 44 | 13 | 6 |
| Net loss (000s) | (45,595) | (77,103) | (20,941) |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 2,563,884 shares (5.29% of outstanding) |
| Ownership breakdown | 1,519,375 direct; 99,073 via A Squared Holdings LLC; 257,813 via AH Gadget IDF LLC; 123 via Heyward Living Trust; 187,500 shares issuable from vested RSUs; 500,000 shares issuable from vested options |
| Outstanding awards (12/31/2024) | Options: 500,000 @ $13.90 exp. 12/7/2030 (fully vested). RSUs: 843,750 unearned, subject to stock price/market cap vesting |
| Hedging/pledging | Prohibited: no hedging, short sales, transactions in publicly traded options; no holding in margin accounts or pledging as collateral |
| 10b5‑1 plans | Allowed with strict cooling‑off (Directors/Officers: ≥90 days and post‑earnings window) and pre‑clearance; limits on overlapping plans/single‑trade plans |
| Equity plan capacity/overhang | Equity overhang at Record Date was 17.2% pre‑proposed share increase to 2020 Plan |
Employment Terms
| Term | Key provisions |
|---|---|
| Agreement | Amended & restated CEO Employment Agreement (Dec 7, 2020), amended multiple times (Feb 22, 2021; Jun 23, 2021; Nov 22, 2021; Aug 25, 2022; Feb 27, 2023) |
| Term & pay | Five-year term; base salary $440,000; initial grant 500,000 options (fully vested at grant) and 1,500,000 RSUs (time + performance) |
| Producer fees | $12,500 per half-hour episode (up to 52 per year; increased to 104 after WOW closing but later reduced back to 52 on 2/27/2023); creative producer fee $100,000 per quarter for WOW (from 2/27/2023) |
| Bonus eligibility | Quarterly discretionary bonus up to $55,000 if Board criteria met |
| Music royalties | Assignment of music composer royalties rights in certain cases (amendment 8/25/2022) |
| Death/disability | Payment of unpaid quarterly bonus and pro‑rated quarter bonus (death); similar plus limited salary continuation for disability (subject to release) |
| Change in control | Plan-level discretion to assume/substitute/accelerate/cancel awards (2015/2020 Plans); RSU COC vesting based on deal value per share |
| Clawback | Executive incentive compensation clawback adopted 12/1/2023 (three full fiscal years prior to restatement; no misconduct required) |
| Retirement/benefits | No defined benefit pension/SERP; executives may participate in 401(k) with company match |
Related Party Transactions (governance watchpoints)
- Licensing to Andy Heyward Animation Art (AHAA): standard merchandise license for Secret Millionaires Club and Stan Lee’s Mighty 7 IP; no royalties earned by Heyward in 2023–2024 .
- YFE shareholder loan (related party via then-director Dr. Stefan Piëch at YFE): $1.5M loan in 2022; interest at 5%; outstanding principal $1.35M as of 3/26/2025; payments disclosed .
Risk Indicators & Red Flags
- Discretionary cash bonuses ($220k in 2023 and 2024) amid negative TSR and net losses; reliance on “all other comp” (producer fees) as a large pay component .
- Significant unvested RSUs tied to high stock price/market cap hurdles (843,750 unearned), potentially limiting near-term vesting-based selling but also signaling retentive, outperformance‑linked value that could create supply if thresholds are met .
- Combined CEO/Chair concentration mitigated by independent committees; no lead independent director disclosed; robust attendance and committee independence noted .
- Material weakness persisted in IT general controls at year-end 2024; ongoing remediation required .
- Ongoing securities litigation (class action) continues post-appeal; outcomes uncertain .
- Strict insider trading, hedging, and pledging prohibitions reduce alignment risk from leverage/derivatives .
Director Service Snapshot (as a Director)
| Item | Detail |
|---|---|
| Years on TOON board | Director (Chair) since Dec 2013 |
| Independence | Not independent (executive) |
| Committee roles | None listed; Board Chair; vice chair is another director |
| Attendance | Board met 6 times in 2024; no director below 75% attendance |
Equity Awards Outstanding (Andy Heyward) – As of 12/31/2024
| Award | Amount | Terms/Status |
|---|---|---|
| Stock options (exercisable) | 500,000 | Exercise $13.90; exp. 12/07/2030; fully vested at grant |
| RSUs (unearned/performance) | 843,750 | Subject to stock price/market cap and/or operating criteria; see Performance Compensation |
Beneficial Ownership
| Holder | Shares Beneficially Owned | % of Class | Notes |
|---|---|---|---|
| Andy Heyward | 2,563,884 | 5.29% | Includes direct, indirect entities, vested RSUs (187,500) and options (500,000) |
Compliance & Policy Environment (trading pressure assessment)
- Hedging and pledging are prohibited; trading by directors/officers requires pre‑clearance and is limited to quarterly windows; Rule 10b5‑1 plans permitted with ≥90‑day cooling‑off and restrictions (limits opportunistic sales) .
- Company prohibits short sales and publicly traded options on TOON by insiders; reduces downside-hedged selling risk .
Investment Implications
- Pay-for-performance alignment is mixed: while a large block of CEO RSUs require ambitious stock price/market cap triggers (aligning upside), recurring discretionary cash bonuses and sizable producer fees have constituted meaningful realized pay during loss years, which can pressure say-on-pay support if it were on the ballot and may dilute perceived alignment without clearer formulaic targets .
- Retention risk is moderate: unvested 843,750 RSUs function as retentive equity with demanding hurdles; absence of rich cash severance multiples in disclosures (death/disability only) suggests limited guaranteed exit economics, increasing reliance on equity for value realization .
- Trading signals: strict hedging/pledging and pre-clearance policies reduce near-term forced sale risk; any future vesting of price‑trigger RSUs could create incremental supply if thresholds are reached, but near‑term vesting appears unlikely given historical TSR trajectory and current levels .
- Governance/oversight: combined CEO/Chair role raises concentration concerns, albeit offset by independent committees and attendance; remaining IT control weakness and active litigation are overhangs to multiple expansion until resolved .
- Dilution watch: 2024–2025 capital raises with warrant packages, equity plan share increases, and equity overhang (17.2%) imply ongoing dilution risk; monitor approvals and exercises relative to cash runway and project ROI .