Paul Travers
VuzixAbout Paul Travers
Paul Travers, age 63, is Vuzix’s co‑founder, Chairman, President, and Chief Executive Officer, serving since 1997; he holds an associate degree in engineering science (Canton ATC) and a B.S. in electrical and computer engineering (Clarkson University) . Under his leadership, Vuzix’s TSR and pay-versus-performance disclosures show a $100 initial investment valued at $108 in 2024 and $57 in 2023, reflecting market volatility; net losses were $73.5M in 2024 and $50.1M in 2023 . Company revenues declined from $13.16M in FY2021 to $5.75M in FY2024, while EBITDA remained negative; see table below (S&P Global note for EBITDA) .
| Metric | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| Revenue (USD) | $13,164,933 | $11,835,882 | $12,129,139 | $5,754,556 |
| EBITDA (USD) | ($37,954,522)* | ($39,891,009)* | ($45,685,507)* | ($39,819,648)* |
| Values retrieved from S&P Global.* |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| e‑Tek Labs, Inc. | Founder | Pre‑1997 | Early consumer electronics and display ventures; foundational experience preceding Vuzix |
| Forte Technologies Inc. | Founder | Pre‑1997 | Product development leadership; industry expertise leveraged to build Vuzix |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Not disclosed | — | — | No external public company directorships disclosed for Travers . |
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary (USD) | $575,000 | $575,000 | Contract provides $575,000; actual cash paid $376,761 (salary deferral program reduced cash; options in lieu) |
| Target Bonus % of Salary | CEO target 37.5% (2022 STI) | Not disclosed | Not disclosed |
| Cash Bonus Paid (USD) | $119,888 | $109,466 | $21,563 |
| Perquisites | Car allowance $750/month; health and group life insurance | Car allowance; health and group life insurance | Car allowance; health and group life insurance |
Notes:
- In May 2024, Travers reduced cash salary by $287,500 in exchange for stock options with fair value $575,000 (salary deferral program) .
- CEO pay ratio: 8.5:1 (2024); 6.3:1 (2023) .
Performance Compensation
Short‑Term Incentive (STI) Structure and 2022 Outcomes
| Metric | Weighting | Threshold | Target | Maximum | Actual | Payout as % of Target |
|---|---|---|---|---|---|---|
| Revenue | 50% | 75% of Target | Plan | 125% of Target | <75% of Target | 0% |
| Product Gross Margin % | 15% | 75% of Target | Plan | 125% of Target | 36% (83% of Target) | 77% (weight 8.7%) |
| Net EBITDA Loss | 15% | 125% of Target | Plan | 75% of Target | 87.5% of Target | 117% (weight 13.1%) |
| Tech Product Innovations (# targets) | 15% | One | Two | Three | Three | 100% (weight 15.0%) |
| Development & Succession | 5% | — | — | — | Completed | 100% (weight 5.0%) |
| Total | 100% | — | — | — | — | 41.83% of Target |
- In 2023 and 2024, formal STI continued; CEO received $109,466 (2023) and $21,563 (2024) in cash bonuses for meeting certain targets .
Equity Awards: Options and RSUs
| Award Type | Grant Date | Quantity | Strike/Fair Value | Vesting | Notes |
|---|---|---|---|---|---|
| Stock Options (salary deferral) | May 2024 | 580,808 + performance 43,561 options | Fair value $575,000 + $43,125 | Cliff vested 4/30/2025 | Options priced $1.33; salary-for-equity program |
| LTIP Options (2021) | 3/17/2021 | 3,010,000 unvested (plus 250,000 listed exercisable tranche) | $19.00 | Performance tranches (market cap, revenue, EBITDA) | Unvested 3,010,000 canceled upon RSU approval in 2025 |
| RSUs (new LTIP) | 1/2/2025 | 291,878 | Dollar value $1,150,000 | 50% time‑vest at 3 years; 50% performance‑vest within 3 years (up to 125% of performance tranche) | Effective upon shareholder approval; approved 6/17/2025 |
| PSU (new LTIP) | 6/17/2025 | Included in executive issuance (aggregate 297,027 RSUs and 297,027 PSUs to executives) | Fair values per 10‑Q | RSUs vest 1/3 annually (Dec 31); PSUs tied to revenue and EBITDA targets (probable as of 6/30/2025) | Award exchange accounted as modification; remaining FMV $1,871,276 amortized over ~30.5 months |
Repricing/Modification: Company sought shareholder approval for RSU grants concurrent with cancelation of prior LTIP options; deemed a “repricing” under Nasdaq rules (red flag, but cost‑saving vs prior plan) . Shareholders approved RSUs and cancelations on June 17, 2025 .
Equity Ownership & Alignment
| Item (as of record date) | Amount | Notes |
|---|---|---|
| Total Beneficial Ownership | 3,799,263 shares; 5.0% of outstanding | |
| Components | 2,863,770 direct shares; 924,369 options exercisable within 60 days; 11,124 shares via Travers Family Trust LLC | |
| Options Detail (12/31/2024) | 50,000 @ $1.71 exp. 5/6/2030; 250,000 @ $19.00 exp. 3/17/2031 (LTIP tranche); 624,369 @ $1.33 exp. 4/30/2034 | Salary deferral options cliff vested 4/30/2025; LTIP unvested 3,010,000 canceled in 2025 |
| Pledging/Hedging | Prohibited for insiders; no margin accounts or pledging allowed | |
| Blackout Periods | Standard quarterly blackout from 15th day of third month to third trading day after earnings; event-specific blackouts possible | |
| Ownership Guidelines | Directors: 3x annual cash retainer; employee directors don’t receive board pay beyond officer comp; no executive ownership guideline disclosed . |
Employment Terms
| Provision | Details |
|---|---|
| Agreement | CEO employment agreement dated Aug 1, 2007; base salary increased to $575,000 effective Jan 1, 2021 . |
| Perquisites | Auto allowance $750/month; reimbursement of reasonable business expenses; benefits comparable to senior executives . |
| Severance (no CoC) | 2x annual base salary, paid over 24 months; plus medical benefits continuation (est. $21,958 for 24 months); bonus component noted (payable within 60 days) . |
| Change‑of‑Control (CoC) | 4x annual base salary, paid over 48 months; medical benefits continuation (est. $43,917 for 48 months); termination rights include termination within 1 year of CoC for any reason other than cause, or elective termination between 121 days and 2 years post‑CoC (liberal trigger) . |
| 280G Gross‑Up | Company will gross‑up severance if subject to Section 280G excise tax (shareholder‑unfriendly) . |
| Non‑Compete | 24 months post‑termination (except by CEO for good reason or by company without cause); 48 months if termination results in CoC payment . |
| Clawback | Enhanced clawback policy adopted (updated 2023) covering current/former Section 16 officers; recovery of cash/equity incentives for misconduct or restatements per SEC/Nasdaq rules . |
| Equity Plan Acceleration | Equity plan provides acceleration upon CoC, except for 3/17/2021 LTIP options unless administrator provides for continuation/substitution . |
Board Governance and Service
- Board Service: Director since November 1997; currently Chairman and CEO (combined roles) .
- Independence: Board determined Travers is not independent; majority of directors are independent; all standing committees are fully independent .
- Lead Independent Director: Role established in 2022; Edward Kay served until his passing in July 2025; lead independent duties include presiding over executive sessions and liaison functions .
- Attendance: In 2024, Board held 2 in‑person and 6 regular conference call meetings plus additional sessions; no director attended fewer than 75% of meetings/committee meetings .
- Committees: Audit (Kay chair until 2025; post‑July 2025, Alasdair MacKinnon elected and became Audit Chair), Compensation and Human Capital (Harned chair), Nominating and Governance (Whitten‑Doolin chair) .
- Director Compensation: Employee directors (Travers) receive no additional board compensation; non‑employee directors receive cash retainers and RSUs; stock ownership requirement 3x cash retainer .
Director/Say-on-Pay Voting (June 17, 2025)
| Proposal | Votes For | Votes Against | Abstained | Broker Non‑Votes |
|---|---|---|---|---|
| Election of Paul Travers | 28,286,936 | 1,260,306 | 588,286 | 16,432,259 |
| Ratification of Auditor | 43,667,778 | 1,690,887 | 1,209,104 | — |
| Say‑on‑Pay (Advisory) | 27,594,294 | 2,367,583 | 173,633 | 16,432,259 |
| Say‑on‑Pay Frequency | One Year: 25,562,942; Two Years: 3,021,570; Three Years: 866,610; Abstained: 684,388 | |||
| Authorized Shares Increase | 39,898,935 | 4,840,670 | 1,828,164 | — |
| RSU Grant & Option Cancelations | 25,004,419 | 4,865,828 | 265,263 | 16,432,259 |
Related Party and Risk Indicators
- Related Party Transactions: None since January 1, 2023 (excludes compensation and change‑in‑control arrangements) .
- Legal Proceedings: None for directors/executives requiring Item 401(f) disclosure in the past ten years .
- Hedging/Pledging: Prohibited; strengthens alignment and mitigates sell‑pressure risk .
- Repricing/Modification: 2025 RSU grant concurrent with cancelation of 2021 LTIP options constitutes a Nasdaq-defined “repricing” (red flag, but reduces potential future stock comp expense) .
Investment Implications
- Pay-for-performance alignment improved: Shift from 2021 all‑option LTIP (high hurdles, underwater strike $19) to 2025 RSUs/PSUs with measurable revenue/EBITDA metrics is more achievable and reduces prospective stock‑based comp expense (from potential $36.9M to ~$2.3M) and dilution (max shares from ~5.36M to ~0.59M) .
- Severance economics aggressive: 4x salary CoC with 280G excise tax gross‑up and liberal termination windows are shareholder‑unfriendly and could bias management behavior around strategic transactions .
- Insider selling pressure mitigants: Anti‑hedging/pledging, blackout periods, and clawback reduce risk of opportunistic trading; however, vesting cliffs (e.g., 4/30/2025 options) and future RSU time‑vest milestones can create episodic sell windows—monitor 10b5‑1 plans and Form 4s for Travers post‑vest dates .
- Dual‑role governance: CEO/Chairman structure persists; presence of a Lead Independent Director and fully independent committees offsets some concerns, but independence and succession oversight rely on committee rigor .
- Performance headwinds: Declining revenues and persistent negative EBITDA underscore execution risk; STI payouts have been modest, and CAP tracks TSR—upside in pay contingent on actual operational turnarounds .
Actionable checks: track RSU/PSU vesting triggers and performance attainment; monitor Form 4s for selling pressure; incorporate severance/gross‑up terms into M&A probability and governance risk assessments; revisit TSR vs CAP post‑2025 as revenue/EBITDA milestones update.
References:
- Background, board roles, independence, lead independent director, attendance .
- Beneficial ownership and breakdown .
- Compensation, salary deferral, bonuses, option grants .
- Outstanding equity awards and vesting .
- RSU grants, vesting, and shareholder approval .
- Clawback, hedging/pledging, blackout policy .
- Employment agreement, severance/CoC, non‑compete, 280G gross‑up .
- Director compensation program, guidelines .
- Legal proceedings and related party transactions .
- Pay vs performance tables (TSR, net loss) .