David DeStefano
About David DeStefano
David DeStefano, 62, is Vertex’s President, Chief Executive Officer (CEO), and Chairperson of the Board. He joined the Board in 2016 and was appointed Chairperson in 2020; he became CEO in November 2016. He previously served as Vertex’s Vice President, Chief Financial Officer (CFO), and Executive Vice President. He holds a BS in Finance from Lehigh University and is a member of NACD. Notably, he is an employee director and not independent under Nasdaq rules.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Vertex, Inc. | CEO; Chairperson of the Board; Director | CEO since Nov 2016; Director since 2016; Chair since 2020 | Combined Chair/CEO leadership; strategic and risk oversight via Board; prior CFO/EVP roles |
| Vertex, Inc. | Vice President, CFO, Executive Vice President | Prior to CEO appointment (dates not specified) | Financial leadership; executive council member for strategy/viability |
| The Mid-Atlantic Companies, Ltd. | Principal and Vice President | Prior to joining Vertex (dates not specified) | Finance and operations experience |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Satell Institute | Advisory Board for Corporate & Foundation | Current (dates not specified) | Community and corporate philanthropy advisory |
| The Joseph Fund (Camden, NJ) | Board of Trustees | Current (dates not specified) | Non-profit governance |
| National Association of Corporate Directors (NACD) | Member | Current | Director education and governance best practices |
Board Governance
- Role and independence: DeStefano is Chairperson and CEO; the Board reviews independence annually and determined six of seven directors are independent, excluding DeStefano. The Board currently combines Chair/CEO roles, with a lead independent director (Eric Andersen).
- Committees: DeStefano does not serve on standing committees. Audit Committee (Stamm, Gayton, Saunders; Chair: Stamm), Human Capital Committee (Saunders, Andersen, Thompson; Chair: Saunders), Nominating & Governance Committee (Gayton, Radcliffe, Andersen; Chair: Gayton) are fully independent.
- Attendance: Five Board meetings in FY2024; each director attended at least 75% of Board and committee meetings during their service period. Audit met 10 times; Human Capital met 6; Nominating & Governance met 6.
- Risk oversight: Board oversees strategy, cybersecurity, and enterprise risk; management provides regular reviews; cybersecurity briefings are part of continuing education.
- Controlled company: Vertex is a “controlled company” under Nasdaq due to Class B voting power concentrated under the Stockholders’ Agreement, but currently does not rely on controlled company governance exemptions.
- Policies: Anti-hedging/anti-pledging policy; Clawback Policy aligned with Rule 10D-1 adopted July 2023; stock ownership policy requires CEO to maintain 4× salary ownership (executive policy).
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $572,018 | $589,654 | $609,615 |
| All Other Compensation ($) | $44,415 | $47,660 | $49,687 |
| Director cash fees | Not applicable (employee director; non-employee director program only) |
Performance Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Target Bonus (% of Salary) | Not disclosed | Not disclosed | 100% |
| Actual Bonus ($) | $635,736 | $644,274 | $744,200 |
| RSUs Granted (shares) | 218,465 (grant date 2/24/2022; 25% per year for 4 years) | 304,186 (grant date 2/23/2023; 25% per year for 4 years) | 278,109 (grant date 2/22/2024; 25% per year for 4 years) |
| Stock Awards Fair Value ($) | $5,749,999 | $6,250,003 | $7,000,004 |
| 2024 Bonus Metrics | Weight | Threshold | Target | Max | Actual Achievement |
|---|---|---|---|---|---|
| Revenue ($mm) | 30% | 557.7 | 656.1 | 1,312.2 | 99.69% |
| Pre-Tax Net Income (adjusted) ($mm) | 30% | 68.1 | 80.1 | 160.2 | 120.13% |
| Adjusted Cash From Operations ($mm) | 30% | 43.2 | 51.0 | 102.0 | 119.41% |
| Non-Financial: E-invoicing | 5% | — | 100% | — | 100% |
| Non-Financial: Talent Quotient | 5% | — | — | — | 80% |
| Bonus Pool Funding | — | — | — | — | 122% of target approved Feb 2025 |
Notes:
- Threshold/Target/Max payouts interpolate at 25%/100%/200%; no payout if pre-tax NI <85% of budget; total bonus capped at 200% of target.
- The Human Capital Committee exercised discretion to exclude certain acquisition costs and one-off transactions when measuring financial metrics.
| Equity Awards Detail (Outstanding/Structure) | Grant Date | Type | Shares/Units | Exercise Price | Expiration | Vesting |
|---|---|---|---|---|---|---|
| Option | 10/31/2016 | Option | 428,396 (exercisable) | $2.50 | 10/31/2026 | — |
| Option | 12/27/2019 | Option | 186,591 (exercisable) | $3.73 | 12/20/2029 | — |
| Option | 03/01/2021 | Option | 99,599 exercisable; 33,200 unexercisable | $32.16 | 03/01/2031 | 25% per year over 4 years |
| RSU | 03/01/2021 | RSU | 28,568 unvested | — | — | 50% at 2nd anniversary; 25% at 3rd/4th |
| RSU | 02/24/2022 | RSU | 218,465 unvested | — | — | 25% per year over 4 years |
| RSU | 02/23/2023 | RSU | 304,186 unvested | — | — | 25% per year over 4 years |
| RSU | 02/22/2024 | RSU | 278,109 unvested | — | — | 25% per year over 4 years |
| 2024 Exercises/Vesting | Options Exercised (shares) | Value Realized ($) | RSUs Vested (shares) | Value Realized ($) |
|---|---|---|---|---|
| DeStefano | 1,174,993 | $51,636,508 | 239,196 | $6,163,074 |
Other Directorships & Interlocks
- No current public company directorships disclosed in DeStefano’s biography in the 2025 proxy; external roles are advisory/non-profit.
- Vertex is a controlled company via the Stockholders’ Agreement with Westphal family affiliates; director designation rights apply to certain holders, but Vertex states it does not rely on governance exemptions at present.
Expertise & Qualifications
- Finance and corporate leadership background (former CFO and EVP) with deep company knowledge; BS in Finance (Lehigh University); NACD member.
- Board leadership experience as Chairperson with risk oversight responsibilities (including cybersecurity).
Equity Ownership
| Ownership Detail | Amount |
|---|---|
| Class A Shares Beneficially Owned | 1,743,150 (2.1% of Class A outstanding) |
| Options Exercisable within 60 days | 747,786 shares |
| Indirect Ownership | 204,032 shares held in trust for his children |
| Class B Ownership | None |
| Anti-hedging/pledging | Prohibited for directors/officers/employees |
| Stock Ownership Guidelines | CEO minimum ownership 4× salary (executives); company also maintains guidelines for directors |
Governance Assessment
- Independence and structure: DeStefano is not independent; he serves as both Chair and CEO. The lead independent director structure and fully independent key committees mitigate some concentration of power, but combined roles remain a governance sensitivity for some investors.
- Pay-for-performance alignment: 2024 bonus tied to revenue, adjusted pre-tax NI, and adjusted cash from operations with clear thresholds and caps; strong say-on-pay support (~99% at 2024 meeting) indicates shareholder approval of compensation design.
- Clawback and trading policies: Robust clawback policy adopted in 2023 under Rule 10D-1 and strict anti-hedging/anti-pledging reinforce alignment and risk control.
- Severance/COC features: Severance on termination without cause/good reason equals 24 months’ base salary continuation for CEO plus health coverage reimbursement; no enhanced benefits solely for change-in-control—retirement triggers full option vesting and pro-rata RSU vesting (CEO was retirement-eligible at year-end 2024).
- Attendance and engagement: Board met five times in 2024; directors met minimum 75% attendance; committees were active (10/6/6 meetings), supporting oversight.
- Related parties and conflicts: No related-party transactions in 2024; the Stockholders’ Agreement centralizes director nomination and voting among controlling holders, but the company states it is not relying on controlled company exemptions currently.
RED FLAGS and Investor Signals:
- Combined Chair/CEO and non-independence at the top may be viewed as a governance risk; mitigated by a lead independent director and independent committees.
- Controlled company status can limit minority shareholder influence on board composition; monitor any future reliance on exemptions.
- Positive signals: strong say-on-pay (99%), no 2024 related-party transactions, anti-hedging/pledging prohibitions, and a formal clawback policy.
Employment & Contracts (CEO)
| Term/Provision | Details |
|---|---|
| Employment Agreement Term | Initial term expired in 2023; auto-renews for successive two-year periods unless 60 days’ prior notice of non-renewal |
| Severance (without cause/good reason) | Base salary continuation for 24 months; health coverage reimbursement up to 30 months; additional lump sum if not eligible for new employer coverage by month 15; 30 days’ pay in lieu of notice |
| Non-compete/Non-solicit | Non-compete and non-solicit for 24 months post-termination; confidentiality and invention assignment obligations |
| Change-in-Control | No additional/enhanced benefits solely due to change-in-control; director RSAs accelerate immediately prior to change-in-control (applies to non-employee directors) |
| Clawback | Policy for Recovery of Erroneously Awarded Compensation adopted July 2023 under Rule 10D-1 |
| Potential Payments (as of 12/31/2024) | Amount ($) |
|---|---|
| Termination Without Cause or Good Reason – Cash (incl. 30 days’ notice pay) | $1,270,833 |
| Termination Without Cause or Good Reason – COBRA Reimbursement | $55,166 |
| Retirement – Equity Acceleration | $38,569,863 (CEO retirement-eligible) |
Director Compensation (Non-Employee Program context)
| Element | Amount |
|---|---|
| Annual Cash Retainer | $42,000 |
| Equity Grant (at annual meeting) | $200,000 grant-date fair value (restricted stock; vests by next annual meeting/1 year) |
| Lead Independent Director Fee | $20,000 |
| Audit Chair/Member Fees | $20,000 / $10,000 |
| Human Capital Chair/Member Fees | $15,000 / $7,500 |
| Nominating & Governance Chair/Member Fees | $12,000 / $6,000 |
Note: DeStefano is an employee director and is not listed among non-employee director compensation recipients.
Say-on-Pay & Shareholder Feedback
- Say-on-Pay 2024 approval: Approximately 99% in favor. Frequency: Every three years as adopted following shareholder preference.
Related Party Transactions & Conflicts
- Policy requires Audit Committee review and approval; transactions must be arm’s-length; 2024 disclosed none (aside from Stockholders’ Agreement terms and no offering costs for selling stockholders).
- Stockholders’ Agreement governs transfers of Class B, director designation, voting, ROFO/ROFR, registration rights, standstill; confirms “controlled company” status.
Notes on Independence Status
- The user’s designation of DeStefano as an “independent director” is not accurate per Vertex’s 2025 proxy. He is an employee director (CEO) and not independent under SEC/Nasdaq definitions.