8-K/A: RumbleOn Announces Executive Leadership Changes, Including New CEO and COO

RumbleOn, Inc. announces the departure of Michael Kennedy as CEO and the appointment of Michael Quartieri as the new CEO, along with Cameron Tkach as EVP and COO, effective January 13, 2025.

Summary

• RumbleOn, Inc. has announced significant changes to its executive leadership team.
• Michael Kennedy is no longer the CEO or a member of the board, effective January 13, 2025.
• Michael Quartieri has been appointed as the new CEO, effective January 13, 2025, with an annual base salary of $525,000 and eligibility for a performance-based bonus.
• Cameron Tkach has been appointed as Executive Vice President (EVP) and Chief Operating Officer (COO), effective January 13, 2025, with an annual base salary of $425,000.
• Mr. Kennedy will receive a severance package including continued base salary payments for 12 months ($525,000) and continued COBRA payments for 12 months.
• Mr. Quartieri's employment agreement includes a one-time grant of 400,000 time-based restricted stock units (RSUs) and a potential grant of 450,000 performance units (PSUs) subject to shareholder approval and stock performance thresholds.
• Mr. Tkach's agreement includes a one-time cash bonus of $25,000 and eligibility for an annual performance-based bonus and equity grants.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While there are leadership changes, the company has quickly filled the positions. The financial impact is limited to severance and new compensation packages.

Positives

• The company has quickly appointed a new CEO and COO, ensuring leadership continuity.
• The new CEO's compensation package includes performance-based incentives, aligning his interests with shareholder value.
• The new COO's agreement includes a signing bonus and potential for equity grants, incentivizing his performance.
• The separation agreement with the former CEO includes standard non-compete and confidentiality clauses, protecting the company's interests.

Negatives

• The departure of the previous CEO may create uncertainty in the short term.
• The new CEO's performance-based units are subject to shareholder approval for increasing the share reserve under the Plan.
• The company will incur costs associated with the severance package for the departing CEO.

Risks

• The new CEO's ability to successfully lead the company and execute its strategic plan is uncertain.
• Failure to achieve the stock performance thresholds for the CEO's performance units could impact his motivation and retention.
• Integration of the new COO and his ability to effectively manage operations could pose a challenge.
• There is a risk that the departing CEO could join a competitor, despite the non-compete agreement.

Future Outlook

The company is positioning itself for future growth with the appointment of a new CEO and COO, and the success of this transition will depend on their ability to execute the company's strategic plan and achieve performance targets.

Industry Context

Executive leadership changes are common in the corporate world, and the appointment of a new CEO and COO can signal a shift in strategy or a renewed focus on growth and profitability. The powersports industry is competitive, and strong leadership is essential for success.

Comparison to Industry Standards

• Executive compensation packages in the powersports industry typically include a base salary, performance-based bonuses, and equity grants.
• The base salaries for the new CEO and COO appear to be competitive with industry standards for similar roles.
• Performance-based incentives are common to align executive interests with shareholder value.
• Comparable companies such as Polaris, BRP, and Yamaha also utilize similar compensation structures for their executive teams.

Management Changes

Stakeholder Impact

• Shareholders may experience short-term uncertainty due to the leadership transition.
• Employees may be impacted by changes in management and potential shifts in strategy.
• Customers and suppliers may experience minimal impact, as the company aims for a seamless transition.

Next Steps

• Shareholder approval is required to increase the share reserve under the 2017 Stock Incentive Plan.
• The company will need to integrate the new CEO and COO into their roles and ensure a smooth transition.
• The company will need to monitor the performance of the new executives and adjust compensation as needed.

Key Dates