Mark B. Davis
About Mark B. Davis
Senior Vice President, Chief Financial Officer and Secretary of Tile Shop Holdings, Inc. since April 1, 2024; previously Vice President, Investor Relations and Chief Accounting Officer (2019–Mar 2024) and Controller (2014–2019). Age 44 as of April 8, 2025; B.S. in accounting and management, University of Minnesota – Twin Cities; CPA earned at KPMG LLP . Company performance context: Adjusted EBITDA declined from $49.6M (2022) to $38.8M (2023) and $22.6M (2024), and GAAP net income fell from $15.7M (2022) to $10.1M (2023) and $2.3M (2024), which drove zero cash incentive payouts and forfeiture of performance equity tranches for executives .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Tile Shop Holdings, Inc. | Controller; VP, Investor Relations & Chief Accounting Officer; SVP, CFO & Secretary | 2014–2019; 2019–Mar 2024; Apr 2024–present | Progression through controllership, public-company reporting, investor relations; appointed CFO Apr 1, 2024 |
| Target Corporation | Financial reporting and accounting management positions | ~5 years | Large-scale public reporting and accounting experience |
| KPMG LLP | Audit roles (CPA earned) | ~8 years | Public auditing and controls; CPA credential |
External Roles
None disclosed (no public company directorships or external board roles noted for Davis) .
Fixed Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 (set) |
|---|---|---|---|
| Base Salary ($) | 226,600 | 283,350 (earned; promoted mid-year to $300,000) | 309,000 (effective Jan 1, 2025) |
| Target Cash Bonus (% of Salary) | 40% (2023 plan) | 50% (after CFO appointment) | 50% (2025 plan) |
| Non-Equity Incentive Paid ($) | 0 (threshold not met) | 0 (threshold not met) | N/A (in-cycle) |
Performance Compensation
Annual Cash Incentive – design and outcomes
| Year | Metric | Target | Threshold / Payout Curve | Actual | Payout |
|---|---|---|---|---|---|
| 2024 | “Further” Adjusted EBITDA (Adjusted EBITDA adjusted for bonus expense changes) | 50% of year‑end base salary for CFO | 95% → 50%; 100% → 100%; up to 115% → 175% (CFO target increased to 50%) | Fell below minimum threshold | $0 |
| 2025 | “Further” Adjusted EBITDA | 50% of year‑end base salary | 95% → partial; up to 115% → 175% | In-cycle | TBD |
Long-Term Equity Incentives – performance conditions and vesting
| Grant Year | Vehicle | Metric & Tranches | Targets | Status/Outcome |
|---|---|---|---|---|
| 2024 (Mar) | Performance RS (15,125 sh) | 30%/30%/40% over 2024/2025/2026 | Adjusted ROCE 12%/14%/15% | 2024 target not met; 30% forfeited in Feb 2025 |
| 2024 (May; $50k award) | Performance RS (4,928 sh) | 30% (May 13, 2025)/30%/40% | Same ROCE targets (12%/14%/15%) | 2024 component expected to be forfeited May 13, 2025 |
| 2023 | Performance RS (18,519 sh) | 30%/30%/40% over 2023/2024/2025 | Adjusted ROCE 15%/20%/20% | 2023 & 2024 targets not met; 30% (each tranche) forfeited in Feb 2024 & Feb 2025 |
| 2022 | Performance RS (15,411 sh) | 30%/30%/40% over 2022/2023/2024 | ROCE 18%/20%/21% | 2022 & 2023 targets not met; those tranches forfeited in 2023/2024; 2024 tranche forfeited in Feb 2025 |
Long-Term Equity Incentives – time-based awards
| Grant Year | Vehicle | Vesting |
|---|---|---|
| 2025 | Time-based RS (9,028 sh) | 3 equal annual installments starting Mar 2026 |
| 2024 (Mar) | Time-based RS (7,562 sh) | 3 equal annual installments starting Mar 2025 |
| 2024 (May) | Time-based RS (2,464 sh) | 3 equal annual installments starting May 2025 |
| 2023 | Time-based RS (9,260 sh) | 3 equal annual installments starting Mar 2024 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 134,989 shares as of Apr 8, 2025 (includes 60,596 unvested RS and 5,400 options) |
| Ownership as % of SO | ~0.30% of 44,729,924 shares outstanding (SO) |
| Options | 5,400 exercisable @ $8.50, expiring Nov 6, 2027 |
| Unvested RS | 60,596 shares unvested RS as of Dec 31, 2024 |
| Hedging/Pledging | Company policy prohibits short sales and company-derivative securities, and prohibits margin/pledging without prior CFO approval . No pledging is disclosed in ownership footnotes for Davis . |
| Stock Ownership Guidelines | CFOs required to hold ≥1.5× salary; compliance required by Feb 28, 2026 or 5 years from initial appointment (for Davis, by Feb 28, 2029); must retain ≥50% of net shares until compliance . |
Employment Terms
| Provision | Key Terms |
|---|---|
| Offer Letter Amendment (Mar 18, 2024) | Title updated to SVP, CFO & Secretary; base salary set at $300,000; cash incentive target increased to 50%; additional $50,000 equity award following Q1 2024 results . |
| Severance | If terminated without “severance cause” or resigns for “good reason”: 6 months of base salary plus 6× Company contribution to monthly health premiums (subject to release) . |
| Change-of-Control (COC) | Under Omnibus Plans, Compensation Committee may accelerate awards; for Davis, full option vesting if not offered employment, or if terminated without cause/constructively terminated within 1 year post-COC (double-trigger) . |
| Clawback | Compensation Recovery Policy (Feb 2023) compliant with SEC/Nasdaq: recovers erroneously awarded incentive-based comp upon required restatement (covers stock price/TSR, revenues, net income, EBITDA, ROCE) for prior 3 completed fiscal years . |
| Non-Compete/Non-Solicit | 1 year post-employment non-compete and non-solicit commitments . |
| Perquisites/Deferred Comp/Pension | No material perquisites; no nonqualified deferred compensation; no defined benefit pension . |
Compensation Structure Analysis
- Equity-heavy and at-risk pay design: large portion in performance RS tied to ROCE; multiple ROCE targets missed (2022–2024), resulting in repeated forfeitures and zero cash incentive payouts, aligning pay outcomes with underperformance .
- Cash vs equity mix: 2024 stock awards increased post-promotion ($200,247) vs 2023 ($135,006), while non-equity payout remained zero, indicating more equity-linked comp as CFO despite performance headwinds .
- No tax gross-ups or repricing disclosed; clawback policy in place; insider trading policy restricts pledging/margin, improving alignment .
Multi-Year Compensation Summary (Davis)
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Salary ($) | 226,600 | 283,350 |
| Stock Awards ($) | 135,006 | 200,247 |
| Non-Equity Incentive ($) | 0 | 0 |
| All Other ($) | 5,665 | 7,084 |
| Total ($) | 367,271 | 490,681 |
Performance & Track Record
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Net Income ($000) | 15,703 | 10,071 | 2,321 |
| Adjusted EBITDA ($000) | 49,583 | 38,779 | 22,614 |
| Company TSR (Indexed $100 since 2019) | 282.25 | 474.28 | 446.57 |
Notes: Adjusted EBITDA is defined as GAAP net income plus interest, taxes, depreciation & amortization, and stock-based compensation .
Related Party Transactions and Governance
- No related party transactions involving Davis disclosed; Audit Committee pre-approves and reviews related person transactions >$50,000 with robust procedures .
- Say-on-pay support was strong (99% approval at 2024 Annual Meeting), indicating shareholder acceptance of pay programs even amid performance volatility .
Special Corporate Actions Affecting Alignment and Liquidity
- The Board is executing a reverse/forward split to “go dark” (delist/deregister); executive officers/directors hold ~36.9% of outstanding shares and intend to vote “FOR” the proposal . Post-deregistration, Section 16 reporting and Nasdaq listing end, reducing transparency and liquidity; options remain unaffected by the split .
Investment Implications
- Pay-for-performance is functioning: repeated misses on ROCE and EBITDA targets led to forfeiture of performance shares and zero annual bonuses, compressing realized pay and aligning downside risk with shareholders .
- Retention risk moderate: base pay and time-based RS provide stability, but ongoing forfeitures and “going dark” (lower liquidity, reduced equity currency) could weaken long-term incentive value for executives .
- Alignment: CFO beneficially owns ~0.30% of SO with unvested RS and options; strict hedging/pledging restrictions, stock ownership guidelines, and clawback policy bolster governance alignment .
- Trading signals: Delisting/deregistration reduce transparency (no Section 16), impede monitoring of insider activity, and may widen bid-ask spreads; investors should weigh cost savings (~$2.4M annually) against informational and liquidity risks .