x

Posted 05 June, 2023

Electromed, Inc. appointed James L. Cunniff as new CEO

NYSE:ELMD appointed new Chief Executive Officer James L. Cunniff in a 8-K filed on 05 June, 2023.


  On June 5, 2023, Electromed, Inc. (the "Company") announced the appointment of James L. Cunniff to serve as its next Chief Executive Officer and President, beginning July 1, 2023.  

Don't how to trade CEO change? Read Reasons for CEO Turnover and Effect on Stock Performance.
Overview of Electromed, Inc.
Health Care/Life Sciences • Medical Equipment/Supplies
Electromed, Inc. engages in the development, manufacture, marketing, and sale of medical equipment. The firm's products include SmartVest SQL System and SmartVest Connect. It focuses on building market awareness, and acceptance of its products and services with physicians, clinicians, patients, and third-party payers. The company was founded by Robert D. Hansen and Craig N. Hansen in 1992 and is headquartered in New Prague, MN.
Market Cap
$135M
View Company Details
Relevant filing section
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. 


On June 5, 2023, Electromed, Inc. (the "Company") announced the appointment of James L. Cunniff to serve as its next Chief Executive Officer and President, beginning July 1, 2023. The Company's board of directors (the "Board") has also approved an increase in its size to nine members and appointed Mr. Cunniff to serve as an additional director effective as of the same date. Mr. Cunniff will not serve on any committees.

Mr. Cunniff, age 58, most recently served as President and Chief Executive Officer of Provista Inc., from 2017 to May 2022. Previously, he served as President and Chief Executive Officer at Denver Solutions, LLC (d/b/a Leiters Health) from 2015 to 2017 and as Senior Vice President, Americas, at Acelity L.P. Inc., from 2012 to 2014. Mr. Cunniff holds a bachelor's degree in Advertising and Business from the University of Illinois Urbana-Champaign and has completed the Advanced Management Program at Harvard Business School.

On May 22, 2023, the Company entered into an employment agreement with Mr. Cunniff, to become effective as of July 1, 2023, pursuant to which he will receive an initial annual base salary of $500,000. He will be eligible to participate in the Company's annual officer bonus plan, beginning with the fiscal year ending June 30, 2024, with a target payout equal to 50% of annual base salary. He also will be eligible to participate in the Company's annual equity incentive grants and will receive an initial grants of (a) 175,000 performance-based restricted stock units and (b) options to purchase 175,000 shares of common stock, each in the form of inducement awards on terms substantially similar to the Company's 2017 Omnibus Incentive Plan and effective as soon as practicable on or after his first day of employment. The option is expected to vest with respect to 25% of the shares on the first anniversary of the date of grant and then quarterly over the remaining three years in twelve equal increments. The performance-based restricted stock units will be eligible to vest and settle into shares of common stock on a 1-for-1 basis with respect to one-half of the shares upon achieving a total shareholder return of 50% and the remaining shares upon a total shareholder return of 100%, in each case within four years of the date of grant. On the same date, the Company entered into a letter agreement with Mr. Cunniff pursuant to which he will be entitled to relocation assistance of up to $30,000. He will be eligible to participate in the other compensation and benefits programs generally available to Company employees.

If his employment is terminated by us for any reason other than for "cause" (as defined in his employment agreement) or is terminated by him for "good reason" (as defined in his employment agreement), and such termination occurs before a change in control (as defined in his employment agreement), then he will be eligible to (A) receive an amount equal to (i) one times his annualized base salary as of the termination date, payable in installments over 12 months, plus (ii) an amount equal to a prorated portion of his target annual bonus based on the Company's performance for the fiscal year in which the termination date occurs, payable in a lump sum, and (B) have us continue to pay the Company portion of COBRA premiums for up to 12 months.

If any such termination occurs within twelve months after a change of control, then he would instead be eligible to (A) receive an amount equal to (i) receive an amount equal to (i) one times his annualized base salary as of the termination date, plus (ii) an amount equal to 100% of his target annual bonus that was based on his individual performance for the fiscal year in which the termination date occurs, payable in a lump sum, (B) have us continue to pay the Company portion of COBRA premiums for up to 12 months.

All of the foregoing severance benefits remain contingent on Mr. Cunniff signing and not revoking a release of claims and his remaining in strict compliance with the terms of his employment agreement, any supplemental non-competition, non-solicitation, and confidentiality agreement with the Company, and any other written agreement between him and the Company.

The foregoing description of the material terms of the Employment Agreement and the letter agreement are qualified by the full text thereof, which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K, respectively, and incorporated by reference into this Item 5.02.

To facilitate a return to a Board size of eight members, current director Lee A. Jones will not stand for election and is expected to serve the remainder of her term as a member of the Board, which is scheduled to expire at the Company's next annual meeting of shareholders expected to be held in November 2023.