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SmileDirect At Risk of Losing Top Executives as Key Board Member Bolts
Oral care firm has now lost $1.1 billion since going public as ex-U.S. Senator abruptly resigns from Board of Directors.
March 3, 2022
With shares down 88% since coming public less than three years ago, SmileDirect (SDC), a direct-to-consumer oral care company, may also be on the cusp of losing top executives. In its 2022 10-K, SmileDirect revealed that six days prior— and without explanation— the company generously awarded lucrative retention payouts to two of its top brass:
“...the Compensation Committee of the Board approved the inclusion of Steven Katzman and Susan Greenspon Rammelt in the Company’s 2022 retention program, pursuant to which each executive will receive a retention payment in an amount equal to 50% of their respective salary.”
In addition to being a relative of the CEO, Katzman is SmileDirect’s COO and Rammelt is the Chief Legal Officer. Interestingly, both have a higher salary than CEO David Katzman who received a $501.7k salary in 2020.
Steven Katzman’s retention bonus amounts to $289.5k and Rammelt’s $346.7k. Both have promised to return the retention payment should they leave the company.
The prior year’s Proxy Statement shows SmileDirect’s top three executives were awarded compensation totaling more than $22.2 million between 2019-20. SmileDirect has reported a net loss of $1.15 billion in the past three years.
Two days after incentivizing Katzman and Rammalt to stay on, SmileDirect disclosed Bill Frist, former U.S. Senate Majority leader, resigned from the company’s Board without notice. It’s a lucrative position to willingly leave so suddenly. Frist received $150,000 cash in 2020 and was set to receive an annual $150,000 stock grant beginning in 2021. This is in addition to the $850,000 stock grant he received following SmileDirect’s IPO.
Related: HSIC, ALGN, XRAY
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