Michael Walrath
YextAbout Michael Walrath
Michael Walrath (age 49) is Chief Executive Officer (since March 25, 2022), Chairman (since March 2011), and a director (since November 2009) of Yext. He previously founded and led Right Media until its 2007 acquisition by Yahoo!, and holds a B.A. in English from the University of Richmond . Under his tenure as CEO, Yext’s FY2025 revenue rose to $421.0M from $404.3M in FY2024 and Adjusted EBITDA improved to $67.0M from $54.6M, though GAAP net loss increased to $27.9M; company TSR (SEC “Pay vs. Performance”) shows an index value of $44 in 2025 (down from a $100 base in 2020), highlighting mixed shareholder returns despite operational efficiency efforts cited by the board .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Yext, Inc. | Chief Executive Officer | 2022–present | Board cited “significantly greater operational efficiency”; led FY2025 Hearsay acquisition |
| Yext, Inc. | Chairman of the Board | 2011–present | Dual role as CEO + Chair; uses Lead Independent Director structure |
| Yext, Inc. | Director | 2009–present | Long-tenured director shaping strategy and governance |
| Right Media | Founder & CEO | 2003–2007 | Built online ad platform; company acquired by Yahoo! in 2007 |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Lerer Hippeau Acquisition Corp. | Director | Mar 2021–Dec 2022 | Public company SPAC directorship |
| Various private software/media companies | Director | Ongoing | Portfolio of private board seats |
Fixed Compensation
- FY2025 cash salary: $0; one-time discretionary cash bonus of $500,000 awarded January 29, 2025 recognizing operational efficiency and prior absence of cash compensation .
- On March 12, 2025, the board set CEO cash comp to $550,000 base salary and a 100% of salary target annual cash incentive; also granted new RSUs/PSUs (details below) .
| Item | FY2025 | As revised on Mar 12, 2025 |
|---|---|---|
| Base salary | $0 | $550,000 |
| Target annual bonus | Not eligible under FY2025 plan | 100% of salary |
| One-time bonus | $500,000 on Jan 29, 2025 | — |
Performance Compensation
CEO Long-Term Equity Awards, Metrics, and Vesting
| Award | Grant date | Type/size (target) | Performance metric(s) | Vesting schedule | Max payout |
|---|---|---|---|---|---|
| CEO inducement PSUs | Mar 8, 2022 | 2,000,000 PSUs | Stock price tranches: $15/$17/$19/$21, 30-day average close | For each earned tranche, 1/16 vests quarterly on Mar 20, Jun 20, Sep 20, Dec 20, subject to service | 100% per tranche (by design) |
| CEO PSUs (TSR) | Jan 12, 2024 | 1,250,000 PSUs | Company TSR relative to S&P Software & Services Select Index; 2 performance periods: 12/19/2023–3/31/2025 and 12/19/2023–3/31/2026; thresholds: <40th pct=0%, 40th=50%, 60th=100%, 75th=200% (linear between) | PSUs earned per period vest on June 20 following each period, subject to service; change in control/death/disability uses shortened measurement and immediate vesting of earned shares | 200% of target |
| CEO RSUs | Mar 12, 2025 | 625,000 RSUs | Time-based | Eligible to vest 1/8 on Jun 20, 2025 and quarterly thereafter, subject to service | N/A |
| CEO PSUs (ARR/Rule of 40) | Mar 12, 2025 | 625,000 PSUs | Two performance periods FY2026/FY2027 measured on ARR growth and “Rule of 40” (ARR growth + Adjusted EBITDA Margin); 50% target per period | PSUs earned per period vest on March 20 following period, subject to service; change of control sets eligible number to greater of target or prorated performance; certain terminations accelerate 100% of RSUs and the greater of target/prorated PSUs | 250% of target |
Outstanding CEO Equity at FY2025 Year-End (Accounting Value)
| Instrument | Unvested units | Mark-to-market value at $6.58 (1/31/2025) |
|---|---|---|
| 2024 PSUs (TSR) | 1,250,000 | $8,225,000 |
| 2022 PSUs (stock price) | 2,000,000 | $13,160,000 |
FY2025 Executive Bonus Plan (CEO not eligible)
| Metric | Weight | Target | Actual | Achievement % | Payout % |
|---|---|---|---|---|---|
| Revenue ($M) | 67% | 402.0 | 421.0 | 96.51% | 43.59% |
| Adjusted EBITDA ($M) | 33% | 62.0 | 67.0 | 111.29% | 40.45% |
| Total payout | — | — | — | — | 84.04% (for NEOs; CEO excluded) |
Notes:
- FY2025 bonus plan metrics for NEOs were strictly financial (Revenue, Adjusted EBITDA) with formulaic modifiers; no CEO bonus eligibility under the plan; CEO received the separate one-time cash bonus .
Equity Ownership & Alignment
- Beneficial ownership as of March 31, 2025: 3,164,274 shares (2.5% of outstanding), including 2,034,769 via an LLC he controls and 64,987 via family trusts; total shares outstanding: 125,866,826 .
- 10b5-1 plan: Adopted Dec 12, 2024 to sell up to 1,200,000 shares subject to price limits through Dec 31, 2025; potential supply overhang; adoption disclosed in FY2025 filings .
- Hedging/pledging: Company policy prohibits hedging and pledging for named executive officers; implies no pledged shares .
- Director stock ownership guidelines apply to non-employee directors (5x annual cash retainer), not disclosed for executives .
| Ownership detail | Value |
|---|---|
| Beneficial shares | 3,164,274 (2.5%) |
| Structure | 2,034,769 via controlled LLC; 64,987 via family trusts |
| 10b5-1 plan (sell capacity) | Up to 1,200,000 shares; through 12/31/2025 |
| Hedging/Pledging | Prohibited |
Employment Terms
- Employment is at-will; CEO letter amendment dated Jan 12, 2024 provides off-cycle severance if terminated outside change-of-control (CoC) window: $250,000 paid over 6 months; a prorated $500,000 lump sum; up to 12 months COBRA reimbursement; subject to release and restrictive covenants .
- Company-wide CoC policy applies to NEOs but CEO treatment is distinct and tied to performance conditions for his PSUs; as of Jan 31, 2025, no CEO equity acceleration would occur given performance status .
| Scenario | Cash severance | Bonus severance | Health benefits | Equity acceleration |
|---|---|---|---|---|
| Termination outside CoC window (no cause) | $250,000 over 6 months | $500,000 prorated | Up to 12 months COBRA | None; table shows $0 equity acceleration as of 1/31/2025 |
| Change of control | — | — | — | Single-trigger vesting only if PSU stock price/TSR targets are satisfied; as of 1/31/2025 none would be satisfied |
Board Governance
- Dual role: CEO and Chairman; Board appoints a Lead Independent Director (Andrew Sheehan) who presides over independent sessions and acts as a liaison; majority of directors are independent .
- Committees (Audit; Compensation; Nominating/Governance) are fully independent; CEO is not a member of these committees .
- Meetings/attendance: Board met 10 times in FY2025; all directors met or exceeded 75% attendance thresholds .
Performance & Track Record
- FY2025 business highlights include the acquisition of Hearsay Social (Aug 2024), introduction of AI-powered Social/Review features, and increased Adjusted EBITDA amidst higher net loss; cash and equivalents of $123.1M at year-end .
Company performance (oldest → newest):
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Revenue ($M) | 401 | 404 | 421 |
| TSR index ($ from $100 base, SEC PVP) | 47 | 40 | 44 |
| Metric | FY2024 | FY2025 |
|---|---|---|
| Adjusted EBITDA ($M) | 54.6 | 67.0 |
Say‑on‑Pay & Peer Group
- Say‑on‑pay support: 93% approval at 2024 annual meeting; committee considered feedback and made no material program changes .
- Compensation peer group: Includes SaaS/application software peers (e.g., 8x8, Amplitude, Magnite, Zuora); committee evaluates total direct compensation against ~50th–75th percentile range, with judgment .
- Independent advisor: Compensia engaged as independent compensation consultant; committee held seven meetings in FY2025 .
Compensation Structure Analysis
- Mix shift: CEO historically focused on at-risk equity (no salary through FY2025); March 2025 added cash salary and target bonus plus a mix of time-based RSUs and new PSUs tied to ARR growth and Rule of 40—broadening incentives beyond stock price/TSR and strengthening retention .
- Discretionary cash: One-time $500,000 bonus in January 2025 recognizes efficiency gains and makes up for lack of prior cash pay; can be viewed as off-cycle and discretionary .
- Governance features: No hedging/pledging; Dodd-Frank compliant clawback; no excise tax gross-ups; majority independent board and fully independent committees .
Risk Indicators & Red Flags
- Dual role (CEO/Chair): Mitigated by Lead Independent Director and independent committees, but remains a governance consideration for independence/oversight .
- Insider selling pressure: Active 10b5‑1 plan to sell up to 1.2M shares through 12/31/2025 introduces potential supply; monitor executions against price triggers .
- Event risk: On August 18, 2025, Walrath submitted a non-binding proposal to acquire Yext at $9.00/share; independent Special Committee formed—event-driven path and potential conflicts given management-led bid .
- Pay-for-performance alignment: 2024 TSR PSUs (relative measure) and 2022 stock-price PSU hurdles align with shareholder returns; new 2025 PSUs add operating metrics (ARR/Rule of 40) to mitigate pure price volatility risk .
Employment & Contracts (Key Terms)
- At-will employment with letter amendment defining severance outside CoC window (cash/benefits) and restrictive covenants; CEO CoC equity acceleration depends on meeting stock price/TSR conditions (no unconditional acceleration) .
- Company-wide CoC policy provides robust double-trigger equity vesting for NEOs other than CEO; CEO’s awards are performance-conditioned for acceleration .
Performance Compensation (Plan Design Detail)
| Component | Metric | Weight | Target | Payout mechanics |
|---|---|---|---|---|
| Annual cash (NEOs in FY2025) | Revenue | 67% | $402.0M | ±1.0% payout per 0.1% over/under target; floor at 90% revenue; overall cap 150% |
| Adjusted EBITDA | 33% | $62.0M | ±0.2% payout per 0.1% over/under target; weighted average under 50% yields no payout | |
| CEO PSUs (2024) | Relative TSR | — | Index percentiles | 0–200% payout by rank vs S&P Software & Services Select; two periods |
| CEO PSUs (2025) | ARR growth + Rule of 40 | — | FY2026 & FY2027 | 0–250% payout across two periods; vest next March 20 |
Director Service, Roles, and Independence
- Board service history: Director since 2009; Chairman since 2011; currently a Class II director nominee (term to 2028 if elected) .
- Committee roles: CEO/Chair is not on Audit, Compensation, or Nominating/Governance (fully independent) .
- Lead Independent Director: Andrew Sheehan; independent director majority; committee charters annually reviewed; self-evaluations conducted .
Investment Implications
- Alignment and retention: A 2.5% ownership stake plus large, performance-vested PSU overhang tightly links outcomes to shareholder value; the March 2025 addition of salary/RSUs improves retention but marginally increases fixed cost .
- Potential overhang: A 10b5‑1 plan to sell up to 1.2M shares through 2025 can add supply; track plan executions and vesting calendars for timing/size of sales .
- Event-driven catalyst: The August 2025 CEO-led $9/share take-private proposal (Special Committee in process) introduces path-dependent outcomes (bidding war, superior offers, no deal), creating volatility and potential upside/downside skew near milestones .
- Governance risk with mitigants: Combined CEO/Chair role persists, but majority independent board, Lead Independent Director, independent committees, clawback, and hedging/pledging prohibitions reduce governance and compensation risk .
Sources: Yext 2025 DEF 14A, FY2025 10-K, and relevant 8-Ks as cited throughout.