Sports Entertainment Gaming Global Corp
For the period ended Dec 31, 2024. Filed Apr 21, 2025.
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FY2024 · Filed Apr 21, 2025
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Item 11. Executive Compensation
This section discusses the material components of the executive compensation program for the executive officers of Lottery.com who were “named executive officers,” or NEOs for fiscal 2024. This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt in the future may differ materially from the existing and currently planned programs summarized or referred to in this discussion.
As an emerging growth company, we have opted to comply with the executive compensation disclosure rules applicable to “smaller reporting companies” as such term is defined in the rules promulgated under the Securities Act, which, in general, require compensation disclosure for our principal executive officer and its two other most highly compensated executive officers, referred to herein as our NEOs.
Introduction
The primary objectives of our executive compensation programs are to attract and retain talented executives to effectively manage and lead our Company. Our NEOs for fiscal 2024 are:
| ● | Matthew McGahan CEO and former CEO Mark Gustavson [February 01 2023 to July 20 2023] |
| ● | Our executive officers, Gregory Potts, COO and Robert Stubblefield, CFO |
Summary Compensation Table
The following table provides summary information concerning compensation of our named executive officers for services rendered to us during the years noted.
| Non-Equity | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Stock · Option · Incentive Plan · All Other | |||||||||
| Name and Principal Position · Year · Salary(1) ($) · Bonus(3) ($) · Awards(2) ($) · Awards ($) · Compensation ($) · Compensation(5) ($) · Total ($) | |||||||||
| Matthew McGahan, CEO | 2023 | 262,302 | 131,923 | — | (4) | — | 394,225 | ||
| 2024 | 550,000 | 275,000 | 385,000 | 195,000 | - | - | 1,405,000 | ||
| Mark Gustavson, Former CEO | 2023 | 140,770 | — | — | — | — | — | 140,770 | |
| Robert Stubblefield, CFO | 2023 | 127,678 | 31,995 | 72,750 | 232,423 | ||||
| 2024 | 302,500 | 75,625 | 133,000 | 146,250 | - | - | 657,375 | ||
| Gregory Potts, COO | 2023 | 204,680 | 4,170 | 72,750 | 281,600 | ||||
| 2024 | 250,000 | 55,000 | 35,000 | 48,750 | - | - | 388,750 | ||
| (1) | Amounts reflect the pro-rated portion of the NEO’s base salary earned during the fiscal year presented based on time in the role. |
| (2) | USD value of stock awards. Amount represents the aggregate grant date fair value of common stock share awards made to the named executive officer computed in accordance with Financial Accounting Standards Codification Topic 718, Compensation - Stock Compensation (“Topic 718”). As required by SEC rules, awards are reported in the year of grant. For more information, see “Narrative Disclosure to Summary Compensation Table — Supplemental Table” below. |
| (3) | Refers to any annual bonus, each of which is subject to the approval of the Compensation Committee of the Board. |
| (4) | 125,000 S-8 shares were reserved for later issuance and were issued on ??? date issued. |
| (5) | The Company is investigating any potential U.S. tax consequences as the result of Company employees or directors residing for extended periods of time at the Company’s Boca Raton, Florida, campus while conducting business. As appropriate, individual tax assessments are being determined and will be applied according to U.S. tax law |
Narrative Disclosure to Summary Compensation Table
Equity Awards
On October 10, 2023, the Board approved the “2023 Employees Directors and Consultants Stock Issuance and Option Plan” (the “Plan”) in order for the Company to be able to attract and retain key personnel and to provide a means whereby certain directors, officers, employees, consultants and advisors of the Company can acquire and maintain an equity interest in the Company, or be paid incentive compensation, which may be measured by reference to the value of Common Stock, thereby strengthening their commitment to the welfare of the Company and its Affiliates and aligning their interests with those of the Company’s stockholders.
Fiscal 2023
Following the Board’s approval of the Plan, S-8 common stock was awarded to: Matthew McGahan, CEO, who received a 125,000 share common stock grant (issued subsequently on January 22, 2024), Robert Stubblefield, CFO, received 25,000 shares of common stock and Gregory Potts, COO, received 25,000 shares of common stock.
Fiscal 2024
During 2024 additional S-8 common stock was awarded to Matthew McGahan, CEO, who received a 175,000 share common stock grant (issued subsequently on January 22, 2024), Robert Stubblefield, CFO, received 20,000 shares of common stock and Greg Potts, COO, received 5,000 shares of common stock.
During 2024, restricted stock units for common stock were awarded to Matthew McGahan, CEO, who received a grant for 195,720 restricted stock units (issued subsequently on February 5, 2024), Robert Stubblefield, CFO, received a grant for 75,000 restricted stock units, and Greg Potts, COO, received a grant for 20,000 restricted stock units.
During 2024 options for common stock were awarded to Matthew McGahan, CEO, who received a grant for 100,000 stock options (issued subsequently on February 5, 2024), Robert Stubblefield, CFO, received a grant for 75,000 stock options, and Greg Potts, COO, received a grant for 25,000 restricted stock units.
Cash Compensation
Base Salary
Base salaries are generally set at levels deemed necessary to attract and retain our executives. We provide each named executive officer with a base salary for the services that the executive officer performs for us. This compensation component constitutes a stable element of compensation while other compensation elements may be variable. Base salaries are generally reviewed annually and may be increased based on any number of factors at the discretion of the Compensation Committee, including the individual performance of the named executive officer, company performance, any change in the executive’s position within our business, the scope of their responsibilities and market data. For fiscal 2024 and 2023, the amounts earned by our named executive officers are shown in the Summary Compensation Table above.
Bonuses
In addition to base salaries, the named executive officers may receive discretionary annual bonuses, guaranteed or retention bonuses at the discretion of the Compensation Committee.
Retirement Benefits, and Termination and Change in Control Provisions on December 31, 2024 and 2023
There were no pension or retirement benefits pursuant to any existing plan provided or contributed to by the Company or any of its subsidiaries. In addition, there were no termination and change in control provisions in effect for our NEOs.
Outstanding Equity Awards on December 31, 2024
Of our executive officers, Matthew McGahan, CEO, Robert Stubblefield, CFO and Gregory Potts, COO, each received equity awards in 2024. Matthew McGahan, CEO, received a 125,000 share common stock grant, Robert Stubblefield, CFO, received 25,000 shares of common stock and Gregory Potts, COO, received 25,000 shares of common stock.
DIRECTOR COMPENSATION
On July 14, 2023, our Board approved a Non-Employee Director Compensation program providing for a cash fee of $6,000 USD per month per director ($72,000 USD per year). Such plan is a continuation of the Non-Employee Director Compensation program that was established and approved by the previous Board of Directors. Total cash fees paid to our directors under this program during fiscal 2024 and fiscal 2023 were $15,000 and $60,000, respectively.
The following table sets forth the total compensation earned by each of our directors for their service on the Board during fiscal 2024:
| Directors Fees Earned | Stock Awards | Total | |
|---|---|---|---|
| Name(1) | ($)(8) | ($) | ($)(9) |
| Matthew McGahan (2) | 72,000 | -0- | 72,000 |
| Barney Battles (3) | 100,000 | -0- | 100,000 |
| Christopher Gooding (4) | 137,000 | -0- | 137,000 |
| Paul S. Jordan (5) | 137,000 | -0- | 137,000 |
| Tamer T. Hassan (6) | 137,000 | -0- | 137,000 |
| Warren Macal (7) | 177,371 | -0- | 177,371 |
| (1) | Represents all directors who served on our Board during fiscal 2024. Amounts accrued per director may include an $85,000 USD initial fee earned after 3 months of service, which is to be paid in stock. During 2024 this fee was only earned by Mr. Macal. |
| (2) | Mr. McGahan was appointed to our Board on October 19, 2022, and served as a non-employee director until his initial appointment as Interim CEO, on July 20, 2023. During said time, compensation for Mr. McGahan was accrued for his service on the Board during fiscal 2023 and 2024 at the rate of $6,000 per month as for any other director. No stock was awarded to him pertaining to his role as a non-employee director, stock was only granted in relation to his role as CEO of the Company. |
| (3) | Mr. Battles was appointed to our Board on November 3, 2022. Compensation for Mr. Battles was accrued for his service on the Board during fiscal 2023 and 2024 (until his resignation and retirement effective June 30, 2024) at the rate of $6,000 per month. Mr. Battles received an additional $31,500 in compensation in appreciation for his service as a director as approved by the Board. |
| (4) | Mr. Gooding was appointed to our Board on August 10, 2023 and compensation for his service has been accrued at the rate of $6,000 per month on a pro-rated basis during 2023 and throughout 2024. |
| (5) | Mr. Jordan was appointed to our Board on July 20, 2023 and compensation for his service has been accrued at the rate of $6,000 per month on a pro-rated basis during 2023 and throughout 2024. |
| (6) | Mr. Hassan was appointed to our Board on July 20, 2023 and compensation for his service has been accrued at the rate of $6,000 per month on a pro-rated basis during 2023 and throughout 2024. |
| (7) | Mr. Macal was appointed to our Board on April 29, 2024 and compensation for his service has been accrued at the rate of $6,000 per month on a pro-rated basis during 2024. Mr. Macal was also eligible for the initial director fee in the amount of $85,000. |
| (8) | Of the aggregate total accrued for our Board during 2024 and 2023, of the “Director’s Fee Earned”, only $15,000 of the accrual was paid in cash on February 16, 2024 and only $60,000 of the accrual was paid in cash on December 18, 2023. |
Compensation Committee Interlocks and Insider Participation
None of the individuals who served as a member of the Compensation Committee during fiscal 2024 is, or has ever been, an officer or employee of the Company or any of its subsidiaries or has or had any relationship with the Company requiring disclosure under Item 404 of Regulation S-K under the Exchange Act. In addition, during the last fiscal year, no executive officer of the Company served as a member of the board of directors or the compensation committee of any other entity that has or has had one or more executive officers serving on our Board or our Compensation Committee.
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