Grant Russell
VuzixAbout Grant Russell
Grant Russell, age 72, is Vuzix’s co-founder, Chief Financial Officer and Executive Vice President (since 2000) and has served on Vuzix’s Board since April 2009. He holds a Bachelor of Commerce in Finance from the University of British Columbia and is both a U.S. CPA and Canadian CPA, with prior success as co-founder and President of Advanced Gravis Computer (NASDAQ/TSX-listed) and subsequent entrepreneurial roles (1997–2004) . Company performance context: Vuzix reported total shareholder return values of $108 (2024) and $57 (2023) on a $100 fixed investment, alongside net losses of $(73.5) million (2024) and $(50.1) million (2023); for 9M 2025, revenue was $4.0 million and net loss $(23.7) million, with compensation programs emphasizing revenue, gross margin, and EBITDA margin .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Advanced Gravis Computer (NASDAQ/TSX) | Co-founder, President | 1984–1996 | Grew to the world’s largest PC/Mac joystick maker; successful sale via public tender to a U.S. Fortune 100 company |
| Software firm & computer store/cyber café | Founder/Developer/Owner | 1997–2004 | Built and sold a successful software firm and a concept computer store/cyber café |
External Roles
No current public company directorships disclosed for Russell outside of Vuzix .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $457,875 | $386,872 |
| Cash Bonus ($) | $68,535 | $13,736 |
| Option Awards ($) | $0 | $306,923 (salary deferral program) |
| Stock Awards ($) | $0 | $0 |
| All Other Compensation ($) | $25,301 | $25,201 |
| Total ($) | $551,711 | $732,732 |
Key changes:
- 2024 cash salary partially deferred into options (reduced cash by $139,725 in exchange for options valued at $279,450; plus equity performance bonus options fair value $27,473) .
- 2023 compensation mostly cash with modest annual bonus; no option or stock awards .
Performance Compensation
| Component | Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual Incentive (Cash) – 2024 | Revenue/gross margin/EBITDA drivers (company indicates these are core measures) | Not disclosed | Not disclosed | Not disclosed | $13,736 | Cash (paid 2024) |
| Equity Performance Bonus (Options) – 2024 | Same plan target elements | Not disclosed | Not disclosed | Not disclosed | $27,473 FV; 27,751 options | Options; standard plan vesting |
| LTIP Exchange – 2025 RSUs/PSUs | RSUs: time-based; PSUs: revenue & EBITDA | Not disclosed | 3-year window | Ongoing | $465,750; 118,211 RSUs (grant, subject to shareholder approval) | RSUs: 50% vest at 3 years; 50% performance-based (may increase up to 125% of that portion) |
| Company-wide RSUs/PSUs – 2025 | PSUs tied to revenue & EBITDA targets | Not disclosed | Multi-year | Probability assessed | Expense recognized when probable | PSUs vest on revenue/EBITDA targets; executives received RSUs/PSUs on 6/17/2025 replacing cancelled LTIP options |
Notes:
- Company states incentives emphasize revenue, gross margin, and EBITDA margin alignment with stockholder value, reflected in “Pay vs. Performance” disclosure .
- 2025 executive RSUs/PSUs replaced cancelled LTIP options, with performance PSUs tied to revenue and EBITDA targets; bonus “stretch” tranches exist if targets are exceeded .
Equity Ownership & Alignment
| As-of Date | Total Beneficial Ownership (shares) | % of Outstanding | Direct/Indirect Shares | Options (near-term exercisable) | Policy on Pledging/Hedging |
|---|---|---|---|---|---|
| 4/17/2024 | 1,402,205 | 2.2% | 1,162,205 | 240,000 | Pledging and hedging prohibited for insiders |
| 4/21/2025 | 1,647,228 | 2.2% | 1,162,205 | 485,023 | Pledging and hedging prohibited for insiders; blackout periods enforced |
Outstanding Equity Awards at FY-end 2024 (select CFO items):
| Instrument | Exercisable | Un-exercisable/Unearned | Strike | Expiration |
|---|---|---|---|---|
| Options | 50,000 | — | $1.71 | 5/6/2030 |
| LTIP Options (tranche) | 125,000 | 1,625,000 | $19.00 | 3/17/2031 |
| Salary Deferral Options (2024) | 310,023 | — | $1.33 | 04/30/2034 (cliff vested 4/30/2025) |
Alignment and pressure signals:
- Large legacy LTIP options at $19.00 were deeply out-of-the-money and cancelled in 2025 with shareholder approval; replaced with RSUs/PSUs, reducing potential dilution and shifting to mixed time/performance vesting .
- Insider trading policy prohibits pledging/hedging and enforces blackout periods, lowering forced-sale risk from collateralized positions .
Employment Terms
| Term | CFO (Grant Russell) |
|---|---|
| Employment Agreement Date | August 1, 2007 (still effective) |
| Base Salary | $465,750 effective 7/1/2023; previously $450,000 (2022) and $425,000 (2017) |
| Perquisites | Automobile reimbursement/lease in Rochester, NY; travel costs between Vancouver, BC and Rochester; optional housing allowance per IRS rates; health and group life insurance |
| Non-compete | 24 months post-termination; 48 months if CoC severance paid |
| Severance (no CoC) | 2x base salary ($931,500) payable in 24 monthly installments; continuation of medical benefits ($12,772 for 24 months); plus accrued amounts |
| Change-of-Control (CoC) | 4x base salary ($1,863,000) payable in 48 monthly installments; medical benefits ($25,544 for 48 months); plus accrued amounts |
| Triggers & Definitions | Cause/good reason/disability specified; CoC includes sale of assets/stock, merger conversions, removal of majority of Board by 75% vote, or acquisition of 100% of stock |
| Tax Gross-Up | Company will gross-up for IRS Section 280G excise taxes on excess parachute payments for CEO/CFO under existing agreements (red flag) |
Board Governance
- Board Service History: Director since April 2009; not independent (executive officer) .
- Committee Roles: Board committees (Audit; Compensation & Human Capital; Nominating & Governance) are composed of independent directors; CFO is not listed as a committee member, consistent with independence standards .
- Attendance: No director attended fewer than 75% of Board/committee meetings in 2024 (two in-person, eight call meetings total plus actions by consent) .
- Dual-role implications: CEO also serves as Chairman; Board mitigates with a Lead Independent Director (Edward Kay in 2024–2025) and fully independent committees. Note: Edward Kay passed on July 23, 2025; Alasdair MacKinnon joined the Board on August 5, 2025 and chairs the Audit Committee, indicating continued focus on independent oversight .
- Independence: Board determined Russell and Travers are non-independent; other directors meet NASDAQ and SEC independence criteria .
Director Compensation (Context; Russell is employee-director)
- Employee directors (CEO/CFO) receive no additional director compensation beyond executive pay .
- Non-employee directors: $60k cash retainer, chair fees (Lead Independent $15k; Audit $12k; others $10k), and RSUs with $100k FMV; stock ownership guideline: 3x cash retainer; annual director compensation limit $300k .
Compensation Structure Analysis
- Shift from options to RSUs/PSUs: 2025 plan cancels 5,089,500 options (including CFO’s 1,625,000 unvested LTIP options at $19) and grants up to 594,056 RSUs across executives/employees (118,211 to CFO), tying 50% to time and 50% to performance (revenue/EBITDA), improving pay-for-performance alignment and reducing stock-based comp expense by ~$34.6 million vs original LTIP, if fully vested scenarios are considered .
- 2024 salary deferral program: CFO converted $139,725 of cash salary into options (FMV $279,450), increasing equity mix amid liquidity preservation efforts .
- Clawback policy: Updated to comply with Dodd-Frank and NASDAQ; covers current/former Section 16 officers; includes recovery of incentive comp for restatements and fraud/misconduct (confidence signal) .
- Anti-hedging/pledging and blackout rules tightened in 2022–2023 (alignment signal) .
Say-on-Pay & Shareholder Feedback (2025)
| Proposal | Votes For | Votes Against | Abstained | Broker Non-Votes |
|---|---|---|---|---|
| Advisory vote on executive compensation | 27,594,294 | 2,367,583 | 173,633 | 16,432,259 |
| Frequency of advisory votes (preferred) | One year: 25,562,942 | Two years: 3,021,570 | Three years: 866,610 | Abstained: 684,388 |
Additional approvals (2025): Increased authorized shares to 200,000,000; approved RSU grants and concurrent option cancellation for LTIP exchange .
Related Party Transactions and Legal
- Related party transactions: None since Jan 1, 2023 (outside compensation arrangements) .
- Legal proceedings: None material currently .
Track Record, Value Creation, and Execution Risk
- Financial trajectory: Net losses persisted (2023: $(50.1)M; 2024: $(73.5)M; 9M 2025: $(23.7)M), with 9M 2025 revenue at $4.0M vs $4.5M in 9M 2024; gross loss widened in 2025 and unapplied manufacturing overhead remains elevated (indicative of ramp inefficiency) .
- Liquidity actions: Equity financing via ATM ($20.36M net since May 2024) and Quanta strategic investment ($10M common, $10M preferred, two closings in 2025 tied to waveguide milestones), alleviating going concern doubt per management .
- Strategic milestones: Waveguide capacity/yield targets achieved enabling preferred closings; OEM/licensing focus highlighted in MD&A .
Risk Indicators & Red Flags
- 280G tax gross-up for golden parachutes (shareholder-unfriendly) .
- Option “repricing” characterization for LTIP exchange (requires and obtained shareholder approval) .
- Ongoing net losses and previously disclosed going concern considerations (mitigated by capital raises and cost actions) .
- CEO also Chairman; mitigations include Lead Independent Director and independent committees .
Equity Plan & Upcoming Vesting Pressure
- As of 12/31/2024: CFO had 485,023 near-term exercisable options and 1,625,000 unearned LTIP options at $19; the unearned LTIP options were surrendered June 2025, replaced with RSUs/PSUs (reduces potential future selling pressure from option exercises at lower strikes but introduces RSU vesting events within three years) .
- 2025 RSU grant (118,211): 50% time-based vest at 3 years; 50% performance-based over three years (possible increase up to 125% of that performance portion), aligning with revenue/EBITDA outcomes .
Board Committee Composition (2024–2025)
| Committee | 2024 Members | 2025 Members | Chair |
|---|---|---|---|
| Audit | Kay, Harned, Green | Kay, Harned, Whitten-Doolin (early 2025); MacKinnon appointed Aug 2025 and chairs Audit | Kay (then MacKinnon) |
| Compensation & Human Capital | Green (Chair), Kay, Harned (2024); Harned (Chair), Kay, Whitten-Doolin (2025) | As shown | Green (2024); Harned (2025) |
| Nominating & Governance | Harned (Chair), Arvani, Rajgopal (2024); Harned, Whitten-Doolin (Chair), Kay (2025) | As shown | Harned (2024); Whitten-Doolin (2025) |
Investment Implications
- Alignment improving: Replacement of out-of-the-money LTIP options with RSUs/PSUs tied to revenue/EBITDA enhances pay-for-performance and reduces future stock comp expense and dilution; anti-hedging/pledging and clawbacks further align executives with shareholders .
- Retention vs cost: CFO’s severance and CoC multiples (2x/4x salary) and medical continuation are meaningful; presence of 280G gross-up is a governance negative that could draw investor scrutiny in M&A scenarios .
- Near-term selling pressure: RSU time-based vesting in three years and performance PSUs introduce scheduled equity vest points; cancellation of low-strike options reduces immediate exercise pressure, but ATM usage and authorized share increase add supply overhang considerations .
- Execution risk: Continued net losses, manufacturing overhead absorption, and reliance on capital markets underscore execution and cash discipline risk; however, milestone-triggered Quanta funding and OEM/licensing focus are positive strategic signals .
Data sources: 2025 DEF 14A (April 28, 2025), 2024 DEF 14A (April 29, 2024), Form 8-K vote results (June 20, 2025), 8-K director changes (August 6, 2025), Q3 2025 Form 10-Q (November 13, 2025).