Paul Kellenberger
About Paul Kellenberger
Paul Kellenberger, age 66, is Chairman and Chief Executive Officer of zSpace, Inc., roles he has held since December 2006. He previously served as CEO of Chancery Software (sold to Pearson), CEO of Promeo Technologies, SVP at Inacom (acquired by Compaq/HP), and VP/Director at Motorola. He holds a B.A. in Economics from the University of Western Ontario and an MBA from McMaster University . zSpace completed its IPO on December 6, 2024, giving the company a limited public trading history for TSR benchmarking; lock-ups and post-IPO equity programs drive near‑term supply dynamics rather than long-run TSR signals .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Chancery Software Ltd. | Chief Executive Officer | 2002–2006 | Led enterprise SIS provider; sale to Pearson PLC in 2006 . |
| Promeo Technologies | Chief Executive Officer | 2000–2002 | Led technology company operations . |
| Inacom Corporation (acquired by Compaq/HP) | Senior Vice President | 1997–1999 | Executive leadership at computer services firm during consolidation . |
| Motorola, Inc. | Vice President and Director | 1994–1997 | Telecom leadership experience . |
External Roles
No current outside public company directorships or committee roles for Kellenberger are disclosed .
Fixed Compensation
| Component | 2023 | 2024 | 2025 (effective) | Notes |
|---|---|---|---|---|
| Base Salary | $400,000 | $400,000 | $500,000 effective Mar 1, 2025 | 25% increase toward 50th percentile peer levels per Compensation Committee review . |
| All Other Compensation | $2,900 (401k match $2,000 + $900 phone) | $2,900 | n/a | Disclosed per SCT footnote . |
Performance Compensation
| Metric/Plan | Weighting | Targets/Payout Curve | Actual/Payout Status | Vesting/Timing |
|---|---|---|---|---|
| 2025 STI – Company Component (Revenue & EBITDA) | 67% total; split between Revenue and EBITDA | Payout: 0% at below-threshold; 85% at threshold; 100% at target; 115% at “high”; pro‑rata between levels | 2025 results pending | Paid after year-end, employment required unless otherwise determined . |
| 2025 STI – Individual Component | 33% | Based on Board assessment of individual objectives | 2025 results pending | Year-end determination . |
| 2024 Cash Bonus (paid for prior performance) | n/a | n/a | $162,311 paid in 2024 under prior plan for 2022 targets | Paid in 2024 . |
Notes:
- Executives’ target bonus opportunities in 2025 range from 33%–50% of base salary; Kellenberger’s specific target percentage was not separately disclosed .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 2,324,732 shares (9.9% of outstanding) . |
| Composition | Includes 2,303,642 shares issuable upon exercise of options exercisable within 60 days of Jul 17, 2025 . |
| Options – Key Grants | 433,760 options @ $0.53 exp. 04/13/2031 (fully vested); 1,864,990 @ $2.57 exp. 03/04/2034 (fully vested); multiple small legacy high‑strike grants fully vested . |
| Vested vs. Unvested | Disclosed options are fully vested (2017 Plan grants) . |
| Pledging/Hedging | IPO lock-up prohibited pledging, swaps and hedges during lock-up; ongoing permanent pledging prohibitions not specifically disclosed beyond lock-up and insider trading policy . |
| Ownership Guidelines | No executive stock ownership multiple/guideline disclosure identified in filings reviewed . |
| 10b5‑1 Trading Plans | Company policy permits compliant 10b5‑1 plans with cooling-off; no specific plan adoption by Kellenberger disclosed . |
Insider selling pressure and supply overhang:
- Executive and officer lock-ups permitted up to 50% sales from June 2, 2025, with remaining 50% through December 4, 2025, subject to underwriter consent; key controlling holders (GII affiliates bSpace/dSpace) are on 365‑day lock-ups expiring Dec 4, 2025 .
- zSpace registered ~8.7 million shares on Form S‑8 for equity plans, enabling resales after lock-up expirations (subject to Rule 144 for affiliates), increasing potential secondary supply .
Employment Terms
| Term | Detail |
|---|---|
| Role Start | CEO and director since December 2006; Chairman as disclosed . |
| Employment Agreement | Effective June 1, 2024 (the “Kellenberger Agreement”) . |
| Base & Equity Eligibility | Base $400,000 at signing; Board increased to $500,000 effective Mar 1, 2025; eligible for discretionary bonus and equity awards per Board . |
| Severance (No Cause / Good Reason) | 12 months base salary continuation; pro‑rated bonus for year of termination; up to 12 months COBRA premium reimbursement, subject to release . |
| Change‑of‑Control Treatment | 2024 Equity Plan provides that awards may be continued/assumed, substituted, cashed out, accelerated, or terminated at administrator discretion; absent award‑specific terms, no automatic acceleration . |
| Restrictive Covenants | Confidentiality, non‑disparagement, and IP assignment; non‑compete/non‑solicit not disclosed in agreement summary . |
| Clawback | Board‑adopted clawback permits recoupment of incentive compensation for restatement or significant misconduct causing harm . |
Board Governance (including Kellenberger’s board service)
- Positions: Chairman of the Board and CEO; director since December 2006 .
- Board leadership: Board explicitly supports combined Chair/CEO structure with independent oversight via majority‑independent board, executive sessions, and fully independent Audit, Compensation, and Nominating & Governance committees .
- Committees: Audit (Pande, Chair; Prince; Morris), Compensation (Swift, Chair; Pande; Prince), NCG (Prince, Chair; Swift; Morris) — all independent; the CEO is not on board committees .
- Independence status: Kellenberger is non‑independent; the company qualifies as a Nasdaq “controlled company” due to dSpace/bSpace/Fiza holdings but is not currently relying on controlled‑company governance exemptions .
- Board meetings/attendance: Board met 6 times in FY 2024; all incumbent directors attended ≥75% of board and committee meetings .
- Director compensation (context): Beginning 2025, non‑employee directors receive $30,000 cash retainer plus $150,000 in RSUs vesting quarterly; employee directors (e.g., CEO) are compensated as executives .
Compensation Structure Analysis
- Mix and direction: In 2024, Kellenberger received $3.56M total comp driven by a significant option award ($2.99M grant-date value), plus $400k base and a $162k cash bonus paid in 2024 for prior‑period plan achievement; this reflects a shift to equity‑heavy pay around the IPO after no equity award in 2023 .
- Cash comp trend: Base salary increased 25% to $500k effective March 1, 2025, aligning nearer to 50th percentile peers per Compensation Committee review supported by an independent consultant (Aon) .
- Performance linkage: 2025 STI plan introduces explicit top‑line (Revenue) and profitability (EBITDA) metrics with structured payout curves (0%, 85%, 100%, 115%) for 67% of the bonus, with 33% tied to individual goals, improving pay‑for‑performance line‑of‑sight .
- Equity vehicles and vesting: Outstanding options are fully vested (primarily 2017 Plan). The 2024 Plan’s change‑in‑control treatment is discretionary (no automatic acceleration absent award terms), limiting windfalls and aligning with market practice .
Compensation & Ownership Detail (Multi‑Year)
| Year | Base Salary | Option Awards (Grant-Date FV) | Cash Bonus/Non‑Equity Incentive | Other | Total |
|---|---|---|---|---|---|
| 2023 | $400,000 | — | — | $2,900 | $402,900 |
| 2024 | $400,000 | $2,994,351 | $162,311 (paid in 2024 under prior plan) | $2,900 | $3,559,562 |
Ownership (as of Jul 17, 2025):
- Beneficial ownership: 2,324,732 shares (9.9% of outstanding) .
- Includes: 2,303,642 options exercisable within 60 days .
Key outstanding options (as of Dec 31, 2024):
- 433,760 @ $0.53 exp. 04/13/2031 (vested) .
- 1,864,990 @ $2.57 exp. 03/04/2034 (vested) .
- Multiple legacy grants at high strikes (e.g., $330, $600, $720 split‑adjusted) fully vested .
Related Party & Ownership Concentration (context)
- Major holders: dSpace Investments Ltd (49.3%), bSpace Investments Ltd (23%–23.4%), Fiza Investments Ltd (5.0%), Kuwait Investment Authority (7.1%) .
- Controlled company status arises from collective majority vote control of dSpace, bSpace, and Fiza; not currently relying on Nasdaq controlled‑company exemptions .
- Historical related‑party financing includes KIA note conversion to equity pre‑IPO (no direct Kellenberger related‑party transactions disclosed) .
Risk Indicators & Trading Signals (supply/dilution dynamics)
- Post‑IPO supply: Officers could sell up to 50% of their holdings beginning June 2, 2025, with the remainder eligible December 4, 2025, subject to underwriter consent; controlling holders’ 365‑day lock‑up also expires December 4, 2025 .
- Plan shares registered: ~8.7 million shares registered on Form S‑8 may enter the float post lock‑ups (subject to Rule 144 for affiliates), increasing potential supply pressure .
- Additional overhang: 2025 ELOC up to $30M and an April 2025 secured convertible note can create dilution and overhang if utilized/converted, though not tied to Kellenberger individually .
Investment Implications
- Alignment and incentives: Kellenberger’s significant option holdings (fully vested, long expiries) and 2025 STI plan tied to Revenue/EBITDA support performance alignment; the 2024 equity grant scale concentrated total pay in equity during the IPO year .
- Retention/transition risk: Severance economics are moderate (12 months base + pro‑rated bonus + COBRA), with discretionary CoC treatment under the 2024 Plan—neither excessively retentive nor prone to windfall acceleration .
- Governance posture: Dual Chair/CEO role introduces concentration risk, partially mitigated by fully independent key committees and independent board majority; company is a “controlled company” but not using exemptions currently—credible but monitor .
- Trading/setup: Executive/affiliate lock‑up expirations (June and December 2025) plus S‑8 registered plan shares and potential ELOC/convert dilution create identifiable supply events and technical pressure windows; underwriter consent/release is a variable .
Overall: Compensation moved toward market with a 2025 salary reset and more explicit STI metrics; equity remains the dominant lever. Supply/dilution calendars are the primary near‑term trading signal, while governance structures and independent committees offset dual‑role concerns to a degree .