John Saunders
About John Saunders
John Saunders (53) is co-founder, Chairman (since 1998), and Chief Executive Officer of Where Food Comes From, Inc. (WFCF). He is a Yale University graduate with expertise in technology and the livestock industry and previously served as a partner/consultant at Pathfinder Consulting Services. Under his leadership, WFCF reported 2024 revenue of $25.746M and net income of $2.120M, versus 2023 revenue of $25.135M and net income of $2.152M. WFCF’s pay-versus-performance table shows a “$100 TSR” value of $19.26 (2022), $15.71 (2023), and $13.18 (2024). Saunders and his spouse (President/COO Leann Saunders) are WFCF’s largest shareholders.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pathfinder Consulting Services, Inc. | Partner and Consultant | Pre-1998 | Technology and livestock industry consulting foundation prior to founding WFCF; informs tech-enabled verification strategy. |
| Where Food Comes From, Inc. | Founder; CEO; Chairman | 1998–present | Built one of the largest independent third-party verification providers serving ~17,500 stakeholders; scaled diversified verification portfolio and professional services. |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| None disclosed for John Saunders | — | — | No external public-company directorships or committee roles disclosed. |
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | 416,745 | 416,745 |
| Annual/Discretionary Cash Bonus ($) | 100,000 | 100,000 |
| Other Compensation ($) | 13,200 (401k match, phone, service awards) | 14,460 (401k match, phone, service awards) |
| Stock Awards/Options Granted | None | None |
Notes:
- The Compensation Committee awarded discretionary “special performance” bonuses based on qualitative factors (revenue growth, expense management, retention in a tight labor market, and M&A/partnership progress); no disclosed target bonus % or formulaic weighting.
Performance Compensation
| Incentive Type | Metric(s) | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| Discretionary Annual Bonus (Cash) | Qualitative assessment: consistent revenue growth, expense control, retention, M&A/partnerships | Not disclosed | Not disclosed | Committee discretion | $100,000 (2023, 2024) | Cash (annual) |
| Long-Term Equity (Options/Awards) | — | — | — | No LTE grants to CEO in 2024; Saunders consistently foregoes equity to avoid dilution | $0 LTE grant value | — |
Outstanding option awards (John Saunders):
| Grant Date | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration |
|---|---|---|---|---|
| 12/19/2018 | 1,250 | 0 | 7.20 | 12/19/2028 |
| 09/30/2019 | 250 | 0 | 6.84 | 09/30/2029 |
| 09/30/2020 | 250 | 0 | 7.20 | 09/30/2030 |
- Footnote: Unvested options at WFCF generally vest in three annual installments beginning one year after grant and have a 10-year life; for Saunders the listed awards are fully exercisable.
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | John and Leann Saunders jointly own 1,744,626 shares (32.5% of outstanding) as joint tenants; includes 3,500 currently exercisable options across both. Outstanding shares: 5,233,142 (as of 2/13/2025). |
| John Saunders Options (exercisable) | 1,750 shares (see table above). |
| Vested vs. Unvested | Options shown are fully exercisable; no unvested stock awards disclosed. |
| Shares Pledged as Collateral | None disclosed; insider trading policy discourages pledging/margin and derivatives. |
| Ownership Guidelines | Executive ownership guidelines not disclosed. |
| Hedging/Pledging Policy | Company discourages use of company securities as loan collateral and derivatives; trading windows/blackouts and pre-approvals apply. |
| Section 16 Compliance | All required insider filings timely in 2024. |
Employment Terms
| Term | Detail |
|---|---|
| Employment Agreement | One-year agreement entered January 2016; auto-renews annually unless either party gives 60-day non-renewal notice. |
| Initial Base in Agreement | $90,000, subject to performance review (current salary per SCT is $416,745). |
| Change-in-Control (CIC) | Lump-sum payment equal to 200% of current salary payable on the date of sale/merger/disposition (single-trigger cash). |
| Equity Treatment on CIC | Under equity plans, if awards are not assumed/substituted, unvested options/SARs fully vest and restricted stock fully vests (Administrator may also provide acceleration; 2026 Plan includes similar provisions). |
| Non-Compete/Confidentiality | Customary non-disclosure and non-compete clauses in agreement. |
| Clawback | 2026 Plan includes clawback language for performance-based awards per Company policies/restatements. |
| Perquisites | CEO receives cell phone and access to a company car (limited perks). |
| Tax Gross-Ups | None disclosed. |
Board Governance
- Board service history and roles:
- Chairman of the Board since 1998; CEO since 1998; current nominee and director. Not a member of Audit, Compensation, or Nominating committees (independent directors staff these).
- Committee structure:
- Audit: Adam Larson (Chair), Graeme P. Rein, Tom Heinen (all independent).
- Compensation: Adam Larson, Peter C. Lapaseotes (independent).
- Nominating & Corporate Governance: Peter C. Lapaseotes, Adam Larson (independent).
- Independence and structure:
- Combined Chair/CEO role; Company cites small-business benefits; independent directors can call special meetings; all other directors (except Mr. and Mrs. Saunders) are independent under Nasdaq rules.
- Meeting attendance:
- In 2024 the Board held one formal and one telephonic meeting; all incumbent directors attended at least 75% of Board/committee meetings (committee meeting counts provided for 2023).
- Director compensation framework (for non-employee directors):
- $8,000 per in-person meeting; $3,000 per telephonic meeting >15 minutes; 500-share stock grant on 11/21/2024 (fully vested).
Dual-role implications:
- Governance risk from combined Chair/CEO and significant insider ownership is partially mitigated by fully independent committees and regular independent executive sessions; however, investors may prefer a separate Chair or Lead Independent Director (no LID disclosed).
Performance & Track Record
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Revenue ($M) | 25.135 | 25.746 |
| Net Income ($M) | 2.152 | 2.120 |
| TSR Proxy Measure | 2022 | 2023 | 2024 |
|---|---|---|---|
| Value of Initial Fixed $100 Investment (TSR) | 19.26 | 15.71 | 13.18 |
Selected qualitative results:
- Verification & certification revenue increased ~5.9% in 2024; product revenue declined with smaller beef cow herd and free USDA tags; professional services softened (project-based).
Related Party Transactions (Governance Red Flags)
- Headquarters lease: WFCF leases ~15,700 sq. ft. for ~$47,034/month from a company in which the CEO and President jointly own 24.3%; lease renewal options exercised/likely.
Compensation Structure Analysis
- Mix and trends:
- Cash-heavy pay for Saunders (salary plus discretionary bonus); no 2024 equity grants; Saunders has consistently declined equity awards to avoid dilution, which limits dilution but reduces explicit long-term, performance-conditioned equity incentives.
- Metrics and rigor:
- Annual bonuses are discretionary (no disclosed formulaic weighting); factors include growth, expense control, retention, and strategic moves.
- Equity plan safeguards:
- 2026 Plan forbids repricing without stockholder approval; sets ISO/SAR pricing floors at FMV; includes clawback; director award caps.
Compensation Peer Group / Say-on-Pay
- Peer benchmarking: Committee uses independent third-party data and a peer group based on services, revenue, and market cap; specific peers not disclosed.
- Say-on-Pay: No historical say-on-pay results disclosed in the 2025 proxy (smaller reporting company context).
Expertise & Qualifications
- Education: Yale University.
- Domain expertise: Technology and livestock industry; >25 years’ leadership in ag, livestock, and food industries.
- Largest shareholder perspective: Significant insider ownership aligns incentives with long-term value creation.
Investment Implications
- Alignment and dilution: Saunders’ and spouse’s ~32.5% joint ownership strongly aligns management with shareholders; their practice of foregoing equity awards reduces dilution but results in fewer performance-conditioned equity levers in pay design.
- Selling pressure/pledging risk: No pledging disclosed; insider policy discourages pledging and derivatives and requires pre-approval and trading windows—reducing forced-selling/hedging risk signals.
- Retention/CIC economics: Single-trigger CIC cash payout of 2x current salary and potential equity acceleration if awards are not assumed provide retention but could be viewed as generous in a sale; no tax gross-ups disclosed.
- Governance quality: Fully independent committees and attendance thresholds support oversight, but combined Chair/CEO role and related-party HQ lease are notable governance considerations for some investors.
- Performance context: Revenue grew modestly in 2024 while net income was stable; the proxy’s TSR measure declined across 2022–2024, a caution for momentum investors, though the business shows resilience in core verification services.