Mark E. Schwarz
About Mark E. Schwarz
Mark E. Schwarz (age 64) is Executive Chairman and principal executive officer (interim) of Wilhelmina International, Inc. (WHLM). He has served as a director and Chairman of the Board since 2004, Executive Chairman since 2012, and previously served as CEO (2007–2012) . He founded and has controlled Newcastle Partners, L.P. since 1993, serving as Chairman, CEO and Portfolio Manager of its general partner, Newcastle Capital Management, L.P. . During his tenure, WHLM has maintained positive net income in recent years and modest revenue growth, while TSR has fluctuated (see Pay vs Performance below) .
Company performance (GAAP/non‑GAAP):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 17,780,000 | 17,212,000 | 17,610,000 |
| EBITDA ($) | 2,612,000 | 830,000 | 870,000 |
| Net Income ($) | 3,529,000 | 433,000 | 614,000 |
| “Value of $100” TSR ($) | 75.48 | 87.85 | 75.70 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Wilhelmina International, Inc. | Chief Executive Officer | 2007–2012 | Led operations during restructuring period; transitioned to Executive Chairman thereafter . |
| Wilhelmina International, Inc. | Executive Chairman; principal executive officer (interim) | 2012–present | Oversees strategy, capital allocation, M&A; currently acting PEO pending CEO appointment . |
| Wilhelmina International, Inc. | Director and Chairman of the Board | 2004–present | Long-tenured board leadership; majority-aligned governance through significant beneficial ownership . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Newcastle Partners / Newcastle Capital Management | Indirect controller; Chairman/CEO/Portfolio Manager of NCM | 1993–present | Investment control vehicle; primary WHLM shareholder via Newcastle LP . |
| Hallmark Financial Services, Inc. | Chairman of the Board | Present | Cross-company board leadership; information flow relevance (WHLM director James Dvorak is SVP–Investments at Hallmark) . |
| Rave Restaurant Group, Inc. | Chairman of the Board | Present | External chair role; signals network breadth and capital allocation experience . |
Fixed Compensation
Executive Chairman pay has been intentionally modest and predominantly fixed cash.
| Executive | Year | Base Salary ($) | Bonus ($) | Total ($) |
|---|---|---|---|---|
| Mark E. Schwarz (Executive Chairman/PEO) | 2022 | 150,000 | — | 150,000 |
| Mark E. Schwarz (Executive Chairman/PEO) | 2023 | 150,000 | — | 150,000 |
| Mark E. Schwarz (Executive Chairman/PEO) | 2024 | 150,000 | — | 150,000 |
Notes:
- Company states it has “no plans or arrangements” for NEO severance or change-in-control payments, except as described for CFO (see Employment Terms) .
Performance Compensation
No annual incentive plan is disclosed for Mr. Schwarz; PEO compensation is flat salary without a bonus for 2022–2024 . The only formal incentive detail disclosed in the period is for the CFO.
| Metric | Weighting | Target | Actual/Payout | Vesting/Timing | Source |
|---|---|---|---|---|---|
| CFO (G. Pahwa) Annual Bonus | Not disclosed (board discretion) | 30% of base salary (pro-rated for 2024) | Not disclosed (paid after audit; must be employed on payment date) | Annual; board may adjust for unusual/one-time factors |
Equity awards: No RSUs/PSUs/options outstanding for Mr. Schwarz or CFO at 12/31/2024; the company reported no outstanding NEO options and no equity plan in effect as of YE 2024 .
Pay versus performance context:
| Year | PEO SCT Total ($) | Compensation Actually Paid to PEO ($) | TSR “$100” | Net Income ($000s) |
|---|---|---|---|---|
| 2021 | 123,750 | 123,750 | 112.00 | 4,518 |
| 2022 | 150,000 | 150,000 | 75.48 | 3,529 |
| 2023 | 150,000 | 150,000 | 87.85 | 433 |
| 2024 | 150,000 | 150,000 | 75.70 | 614 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 2,430,725 shares beneficially owned through Newcastle LP structure (Mr. Schwarz as trustee/indirect controller) . |
| Ownership % of outstanding | 49.4% (based on 4,919,844 shares outstanding at 4/22/2025) . |
| Vested vs. unvested equity | No outstanding stock options or unvested awards for Mr. Schwarz at 12/31/2024 . |
| Options (exercisable/unexercisable) | None for Mr. Schwarz (and none for CFO) as of 12/31/2024 . |
| Shares pledged or hedged | Company discloses directors and current executive officers have not pledged any beneficially owned shares . |
| Ownership guidelines | Not disclosed. |
Related-party alignment and costs:
- WHLM leases headquarters space and services from Newcastle Capital Management (Mr. Schwarz’s firm) at $2,500/month; paid $30,000 in 2024 and $30,000 in 2023 .
Share count and liquidity context:
- Voluntary delisting from Nasdaq (12/27/2024 last day) and move to OTCQX on 2/12/2025 .
- Board approved a repurchase of 237,500 shares at $3.75 on 2/28/2025 ($890,625), funded with cash; 185,306 shares remain authorized under the older program .
Employment Terms
| Topic | Mark E. Schwarz (Executive Chairman) | Source |
|---|---|---|
| Employment agreement | Not disclosed in proxy/10-K; role described with responsibilities for strategy, capital allocation, acquisitions . | |
| Severance / Change-in-control | Company states “no plans or arrangements” providing for payment to any NEO upon resignation, retirement, termination, or change in control, except the CFO’s letter . | |
| Clawback policy | WHLM has a Policy Related to Recovery of Erroneously Awarded Compensation (clawback) on file as Exhibit 97.1 (2024 10-K) . |
CFO reference (for context only): At-will; $300,000 base; 30% target bonus; 60 days base salary if terminated without cause after 1st anniversary; one-year non-compete; confidentiality and non-solicit .
Board Governance (Service History, Committees, Dual-Role Implications)
- Roles: Mr. Schwarz serves as Executive Chairman, functioning as Board chair and an executive officer; currently principal executive officer on an interim basis. The future CEO is not expected to be a director. The company does not have a Lead Independent Director .
- Independence: The Board determined all incumbent directors except Mr. Schwarz are independent under Nasdaq standards .
- Committees:
- Audit Committee: Mark E. Pape (Chair), James A. Dvorak, Aimee J. Nelson; Mr. Pape is the “audit committee financial expert” .
- Compensation Committee: Mark E. Pape (Chair), Aimee J. Nelson, James A. Dvorak .
- Nominating Committee: Formed recently; Pape and Dvorak initially appointed .
- Attendance: Board met four times in 2024; each director attended at least 75% of board/committee meetings .
- Dual-role implications: Concentration of authority (Executive Chairman + PEO, no Lead Independent Director) and large beneficial ownership can reduce perceived independence; the Board asserts this structure enhances focus on shareholder value due to Mr. Schwarz’s significant ownership .
Director compensation (for non‑employee directors, context):
- Standard cash retainer $28,000; committee chair +$2,500; members +$1,000; directors elected to take cash in 2024 .
Performance & Track Record
- Financial execution: Revenues of $17.61m (2024) vs $17.21m (2023); net income $0.614m (2024) vs $0.433m (2023) .
- Profitability and cash: EBITDA $0.87m (2024); cash $8.5m at YE 2024 (vs $6.1m YE 2023), supported by $2.6m cash from operations .
- TSR context: “$100” TSR metric declined to $75.70 in 2024 from $87.85 in 2023, after $75.48 in 2022 .
- Strategic actions: Delisted from Nasdaq to OTCQX (liquidity/coverage trade-off) and completed a negotiated block repurchase in Feb-2025 .
Risk Indicators & Red Flags
- Related-party transactions: HQ services agreement with Newcastle Capital Management ($2,500/month; $30,000 in 2024) .
- Concentrated control: 49.4% beneficial ownership via Newcastle LP as of 4/22/2025 .
- Legal proceedings: Long-running putative class actions (Shanklin and Pressley) continue; company believes claims are without merit and has not accrued losses; adverse outcomes are reasonably possible but not estimable .
- Insider reporting: Company disclosed certain late Section 16 filings for other entities; no issue flagged for Mr. Schwarz .
- Pledging/hedging: Company states directors and current executive officers have not pledged shares; insider trading policy prohibits trading on material non-public information .
Compensation Structure Analysis (Alignment & Pressure)
- Mix and risk: PEO compensation is entirely fixed cash at $150,000 with no equity or cash bonus 2022–2024; this avoids sales pressure from vesting schedules and eliminates equity overhang but provides limited pay-for-performance leverage at the top .
- Equity program status: No active equity compensation plans as of YE 2024; all outstanding options under prior plans were forfeited in 2024 .
- Incentives below CEO: CFO has variable pay potential (30% of base) with financial/personal/strategic goals and board discretion, but specific metrics/weights are not disclosed; pro‑ration applies for 2024 .
- Clawback: Company maintains a clawback policy, which supports governance alignment around financial restatement risk .
Other Directorships & Interlocks
- Chairs: Hallmark Financial Services (Chairman); Rave Restaurant Group (Chairman) .
- Interlocks/flow: WHLM director James A. Dvorak is SVP–Investments at Hallmark, where Mr. Schwarz is Chairman—potential for information flow across roles .
Investment Implications
- Alignment: Extremely high insider ownership (~49.4%) meaningfully aligns Mr. Schwarz with long-term equity value and reduces sell pressure (no equity grants, no vesting flow); it also centralizes control and may dampen governance independence (no Lead Independent Director) .
- Governance/related party: Modest related-party cost ($30k/year) and disclosed clawback mitigate some concerns; however, dual-role leadership and concentrated control remain governance overhangs to monitor, especially after the move to OTCQX which may reduce external scrutiny/liquidity .
- Execution and cash: Stable revenues and positive net income with positive operating cash generation support continued buybacks (e.g., $890,625 repurchase in Feb-2025) and capital allocation flexibility under Chairman-led strategy .
- Litigation: Ongoing class actions present tail risk, though no accrual has been recorded; watch for case developments and any settlement indications that could affect cash or brand .
Overall, Mr. Schwarz’s compensation is low, simple, and not performance-levered; the principal alignment comes from substantial ownership. For trading, limited vesting events and absence of option overhang reduce near-term insider selling catalysts. For governance-sensitive investors, the dual role/no lead independent director and concentrated control warrant a higher governance risk premium, partially offset by transparent related-party disclosures and a standing clawback policy .