AUDDIA INC
For the period ended Dec 31, 2023. Filed Apr 1, 2024.
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FY2023 · Filed Apr 1, 2024
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Item 11. Executive Compensation
| Item 11. | Executive Compensation |
|---|
Executive Compensation Overview
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.
This section provides an overview of the compensation awarded to, earned by, or paid to each individual who served as our principal executive officer during our fiscal year 2023, and our next two most highly compensated executive officers in respect of their service to our company for fiscal year 2023. Our named executive officers, or the Named Executive Officers, for the year ended December 31, 2023, are:
| · | Jeffrey Thramann, our Executive Chairman; |
| · | Michael Lawless, our Chief Executive Officer; and |
| · | Peter Shoebridge, our Chief Technical Officer |
Summary Compensation Table Year Ended December 31, 2023
The following table contains information about the compensation paid to or earned by each of our Named Executive Officers during the two most recently completed fiscal years.
| Name and Principal Position · Year · Salary ($) · Bonus ($)(2) · Stock Awards ($)(3) · Option Awards ($)(3) · All Other Compensation ($) · Total ($) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Jeffrey Thramann | 2023 | 300,000 | (1) | -0- | -0- | -0- | -0- | 300,000 |
| Executive Chairman | 2022 | 300,000 | (1) | -0- | 425,513 | -0- | -0- | 725,513 |
| Michael Lawless | 2023 | 260,000 | -0- | -0- | -0- | -0- | 260,000 | |
| Chief Executive Officer | 2022 | 260,000 | -0- | -0- | 10,870 | -0- | 531,746 | |
| Peter Shoebridge | 2023 | 225,000 | -0- | -0- | -0- | -0- | 225,000 | |
| Chief Technology Officer | 2022 | 225,000 | -0- | -0- | 4,074 | -0- | 326,828 | |
| (1) | Beginning after the Company’s IPO, Dr. Thramann earns an annual salary of $300,000. |
| (2) | The “Bonus” column represents discretionary bonuses earned pursuant to our annual incentive bonus program. Each of Dr. Thramann, Mr. Lawless and Mr. Shoebridge is each eligible to receive a bonus based on the achievement of certain business goals set by our Board on an annual basis. The maximum bonus opportunity for each of Messrs. Thramann, Lawless and Shoebridge, expressed as a percentage of their base salary, is 50%. As of the filing date of this Annual Report, the Company has not approved or paid any annual cash bonuses for the 2023 year. |
| (3) | Represents the grant date fair value of RSU and stock option awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For information regarding assumptions underlying the valuation of equity awards, see Note 6 to our consolidated financial statements included in this Annual Report. |
Outstanding Equity Awards at December 31, 2023
The following table sets forth information regarding outstanding equity awards held by our Named Executive Officers as of December 31, 2023.
| Option Awards(1) · Stock Awards(1)(2) | |||||||
|---|---|---|---|---|---|---|---|
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units That Have Not Vested ($)(4)(3) |
| Dr. Jeffrey Thramann | 8/11/2021 (4) | – | – | – | – | 4,500 | 1,500 |
| 2/16/2022 (5) | – | – | – | – | 2,000 | 4,000 | |
| 12/9/2022 (6) | – | – | – | – | 5,320 | – | |
| Michael Lawless | 8/15/2019 (8) | 3,221 | – | 106.50 | 8/15/2029 | – | – |
| 8/11/2021 (9) | 4,500 | 1,500 | 69.75 | 8/11/2031 | – | – | |
| 9/8/2022 (10) | 8,490 | 2,830 | 30.25 | 9/8/2032 | – | – | |
| Peter Shoebridge | 8/15/2019 (7) | 1,097 | – | 106.50 | 8/15/2029 | – | – |
| 8/11/2021 (8) | 4,500 | 1,500 | 69.75 | 8/11/2031 | – | – | |
| 9/8/2022 (9) | 3,193 | 1,065 | 30.25 | 9/8/2032 | – | – | |
| (1) | Each equity award is subject to the terms of our 2021 or 2013 Equity Incentive Plan. |
| (2) | All RSUs are settled, and shares delivered on the vesting date. Accordingly, there are no vested RSUs that remain outstanding. |
| (3) | Based on the closing price of a share of the Company’s common stock on the Nasdaq Capital Market of $6.25 on December 29, 2023. |
| (4) | Represents RSU awards that vest 50% on February 16, 2022, 25% on February 16, 2023, and 25% on February 16, 2024. |
| (5) | Represents RSU awards that vest 33% on February 16, 2023, 33% on February 16, 2024, and 34% on February 16, 2025. |
| (6) | Represents RSU awards that vest 100% on February 16, 2023. |
| (7) | 2019 grant represents option awards that vest 50% on August 15, 2019, grant date. The remaining portion of the option vests equally over 48 months. |
| (8) | 2021 grant represents option awards that vest 50% on August 12, 2022, 25% on February 16, 2023, and 25% on February 16, 2024. |
| (9) | 2022 grant represents option awards that vest 50% on the September 8, 2022, grant date. The remaining portion of the option vests in two equal installments on February 16, 2023, and February 16, 2024. |
Employment Arrangement with Dr. Thramann
Commencing after our February 2021 IPO, Dr. Thramann earns an annual salary of $300,000 for his service as our Executive Chairman.
Employment Agreement with Mr. Lawless
On October 13, 2021, we entered into an employment agreement with Mr. Lawless, which supersedes and replaces a prior employment agreement dated February 6, 2012. The employment agreement provides for an initial annual base salary of $260,000 as well as an entitlement to an annual incentive bonus, upon certain conditions, in an amount determined by our board of directors. The target annual bonus for Mr. Lawless, expressed as a percentage of base salary, is 50%.
If the Company terminates Mr. Lawless’s employment without cause or Mr. Lawless terminates for good reason, he is entitled to receive nine months of base salary, (ii) up to nine months of paid health insurance under COBRA, and (iii) any earned but unpaid bonus for a prior completed fiscal year. In addition, in the event of a change of control and a subsequent termination of Mr. Lawless’ employment without cause, the Company will accelerate the vesting of all of unvested stock options as of the later of the effective date of the change in control and the last day of service.
Employment Agreement with Mr. Shoebridge
On October 13, 2021, we entered into an employment agreement with Mr. Shoebridge, which supersedes and replaces a prior employment agreement dated April 1, 2014. The employment agreement provides for an initial annual base salary of $225,000 as well as an entitlement to an annual incentive bonus, upon certain conditions, in an amount determined by our board of directors. The target annual bonus for Mr. Shoebridge, expressed as a percentage of base salary, is 50%.
If the Company terminates Mr. Shoebridge’s employment without cause or Mr. Shoebridge terminates for good reason, he is entitled to receive nine months of base salary, (ii) up to nine months of paid health insurance under COBRA, and (iii) any earned but unpaid bonus for a prior completed fiscal year. In addition, in the event of a change of control and a subsequent termination of Mr. Shoebridge’s employment without cause, the Company will accelerate the vesting of all of unvested stock options as of the later of the effective date of the change in control and the last day of service.
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