Larry Heaton
About Larry Heaton
Larry Heaton, 68, has served as Zomedica’s Chief Executive Officer since November 1, 2021 (President starting October 1, 2021) and is a member of the Board of Directors. He holds a B.A. from Eastern Illinois University and has 35+ years of medtech/biotech operating experience, including multiple prior CEO roles and 12 U.S. patents assigned to employers. Zomedica’s pay-versus-performance disclosures show Company TSR of 133.48 in 2021, 70.87 in 2022, and 86.96 in 2023 (indexed to $100), alongside net losses in each year, providing context for incentive alignment during his tenure . The Board maintains separate Chair/CEO roles (Chair: Jeffrey Rowe), mitigating dual-role concentration risk while Heaton serves as CEO and director .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Flowonix, Inc. | President, CEO, Director | 2016–2020 | Led commercialization of implantable drug-delivery systems for pain/spasticity . |
| Cardiox Corporation | President, CEO, Director | 2010–2015 | Built drug-device combination diagnostics; first employee; commercial pathway . |
| ViOptix Inc. | President, CEO, Chairman | 2007–2009 | Led tissue oximetry platform development/commercialization . |
| Curon Medical, Inc. (public) | President, CEO, Director | 2003–2006 | GI disorder treatment products; public company leadership . |
| Response Genetics, Inc. | CEO, Director | 2000–2002 | Applied genomics services; early-stage growth and BD . |
| United States Surgical Corp. | President & COO | 1998–2000 | Large-cap surgical devices; operations and commercialization leadership . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed (current public company boards) | — | — | Proxy indicates no other reporting-issuer directorships for Heaton . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base salary ($) | 438,462 | 458,735 |
| Target bonus (% of base) | 50% (employment agreement) | 50% (employment agreement) |
| Actual bonus paid ($) | 212,934 | 189,200 |
| Option awards (grant-date FV, $) | – | – |
| All other comp ($) | — | — |
| Total ($) | 651,396 | 647,985 |
Notes:
- Employment agreement amended effective April 1, 2024 increased annual salary to $466,400 and maintains target annual discretionary bonus at 50% of base; term auto-renews beyond December 31, 2024 unless 30-day notice is given .
- In the say-on-pay section, the Compensation Committee stated it did not adjust base salary for NEOs in 2024 except modest market/merit adjustments for the COO and GC; context provided for retention and underwater options (see Performance Compensation and Say-on-Pay) .
Performance Compensation
Incentive design and outcomes (annual bonus):
- Annual discretionary bonus: target 50% of base; metrics are “achievements approved by the Board” (specific weights/thresholds not disclosed) .
- Actual payouts: $212,934 (2023) and $189,200 (2024) .
Long-term incentives (stock options) – grants, vesting, and terms:
| Grant | Number of Options | Exercise Price ($) | Vesting | Expiration |
|---|---|---|---|---|
| 10/1/2021 CEO hire grant | 10,000,000 | 0.58 | 25% annually beginning 10/1/2022 | 10/1/2031 |
| 10/4/2022 grant | 6,000,000 | 0.22 | 25% annually beginning 10/4/2023 | 10/4/2032 |
Outstanding and exercisability at FY-end 2024:
- 10,000,000 exercisable / 2,500,000 unexercisable at $0.58; 4,000,000 exercisable / 2,000,000 unexercisable at $0.22 .
Policies:
- Clawback policy applies to incentive compensation in event of restatement (Compensation Committee administers recovery) .
- Anti-hedging policy prohibits hedging/monetization (e.g., collars, forwards) by officers/directors/employees and their related parties .
Pay-versus-performance context:
| Metric | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Shareholder Return (indexed to $100) | 133.48 | 70.87 | 86.96 |
| Net income ($, nearest thousand) | (18,384,000) | (17,015,000) | (34,529,000) |
Compensation Committee actions and investor feedback:
- Say-on-pay: 75.3% For in 2023; 46.0% For in 2024 (51.3% Against, 2.6% Abstain) .
- Response: engaged Compensia, peer benchmarking placed Zomedica revenue and market cap at ~23rd and 41st percentiles of peers; cash comp below 25th percentile; no 2023 annual equity awards and outstanding options were underwater; 2024 adjustments targeted other NEOs (COO/GC options; modest base increases for GC/COO), aiming at retention; ongoing focus on aligning pay with performance .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership (Heaton) | 10,500,000 shares (1.07% of 979,949,668 outstanding) including options exercisable within 60 days (9,500,000) . |
| Vested vs unvested (options) | At 12/31/2024: 14,000,000 exercisable; 4,500,000 unexercisable (two grants; see table above) . |
| Pledging/Hedging | Anti-hedging policy prohibits hedges; no pledging disclosure noted in proxy . |
| Ownership guidelines | Not disclosed in proxy. |
| Equity plan capacity | As of 12/31/2024: 89,051,943 options outstanding (WAEP $0.24); 8,943,023 shares remaining available; 10% “evergreen” provision . |
| 2024 SAR Plan | Cash-settled SARs up to 10% of outstanding shares, FMV strike, up to 10-year term; standard vesting; directors received 2024 SARs (CEO SAR awards not shown) . |
Employment Terms
| Term | Provision |
|---|---|
| Agreement dates | Effective 10/1/2021; amended 4/1/2024 . |
| Base salary | $466,400 effective 4/1/2024 (see SCT actuals above) . |
| Target bonus | 50% of base, discretionary, Board-approved achievements . |
| Term and renewal | Term through 12/31/2024 with automatic 1-year renewals unless either party gives 30 days’ notice . |
| Severance | If terminated without cause or resigns for good reason: 0.5x current annual salary paid over 6 months; earned but unpaid bonus; up to 6 months medical/dental premium reimbursement (COBRA-like) . |
| Non-compete / Non-solicit | Applies during employment and for 1 year post-termination . |
| Equity and benefits | Eligible for stock options under Amended & Restated Stock Option Plan; standard employee benefits and business expense reimbursement . |
| Change of control | No specific CoC multiple or acceleration terms disclosed in proxy (option plan/agreements may govern; not detailed here) . |
| Clawback | Company-wide clawback policy applies to incentive compensation . |
Board Governance and Director Service
- Role: CEO and Director; not independent (executive officer). Zomedica separates Chair (Jeffrey Rowe) and CEO roles .
- Committee roles: All Board committees are fully independent; Heaton is not listed as a member of Audit, Compensation, or Nominating & Corporate Governance committees .
- Board independence and activity: Majority independent; Board met 6 times in 2024; committee attendance data provided for independent directors; governance disclosure pursuant to Canadian Form 58-101F1 appended to proxy .
- Director compensation: Outside directors receive $50,000 annual retainer (Chair +$10,000; committee chairs +$5,000); 2024 non-employee directors also received SAR awards; as an employee-director, Heaton does not receive director fees .
Performance & Track Record
- Tenure milestones: Appointed President 10/1/2021; became CEO 11/1/2021 .
- Company TSR (indexed): 133.48 (2021), 70.87 (2022), 86.96 (2023); net losses each year, providing headwind context for equity-based pay realizable value .
- Background highlights: Prior CEO roles across medtech/diagnostics; commercialization/business development focus; multiple patents assigned to employers .
Compensation Committee Analysis and Shareholder Feedback
- Committee composition: Independent directors; met 3 times in 2024 .
- Consultant: Compensia engaged in 2024 for benchmarking; Company revenue/market cap at ~23rd/41st percentile of peers; cash comp below 25th percentile; underwater options noted; targeted retention actions primarily for non-PEO NEOs .
- Say-on-Pay: Support fell from 75.3% (2023) to 46.0% (2024); Committee cites continued focus on financial performance alignment and investor feedback .
Related Party Transactions and Risk Indicators
- Related-party transactions: None beyond compensation arrangements disclosed .
- Hedging/Pledging: Hedging prohibited; no pledging disclosure in proxy .
- Clawback: Adopted and applicable to executives .
- Delinquencies/Legal: No penalties/sanctions, corporate or individual bankruptcies reported for directors in past 10 years .
Investment Implications
- Alignment: Heaton’s incentive mix is predominantly equity via large option grants (0.58 and 0.22 strikes) with multi-year vesting, aligning outcomes to share price; anti-hedging policy and no pledging disclosure support alignment. However, options being underwater has constrained realizable pay, increasing retention pressure and potentially encouraging re-engagement with equity design (e.g., SARs for directors in 2024) .
- Retention/Severance: Modest severance (0.5x salary + benefits) and 1-year non-compete/non-solicit reduce downside risk to shareholders while offering limited retention economics versus market peers; absence of disclosed CoC multipliers or automatic acceleration reduces change-in-control overhang .
- Governance: CEO/director dual role without Chair title and fully independent committees mitigate independence concerns; majority independent board persists despite CEO as director .
- Shareholder signaling: Sharp drop in 2024 say-on-pay support (46%) is a caution flag; Compensation Committee’s consultant-led review and targeted adjustments for other NEOs suggest responsiveness, but investors may continue to scrutinize metric rigor, discretion, and underwater equity strategy .
- Trading signals: Beneficial ownership at ~1.07% (includes options exercisable within 60 days) indicates meaningful exposure; absence of disclosed pledging and hedging ban reduce misalignment risk. For short-term trading cues, monitoring future Form 4 activity and any equity plan changes will be critical (not covered in this proxy) .