- Ocho Investments, holding 5.2% of Digimarc (DMRC, Financial), urges shareholders to vote "WITHHOLD" on CEO Riley McCormack and Chair Kathleen Kool at the upcoming Annual Meeting on May 7, 2025.
- The call is based on a 60% stock price decline, stagnant revenue per share, and changes in executive compensation metrics that favor management over shareholders.
- Concerns include a controversial shift in incentive metrics and poor governance practices under current leadership.
Ocho Investments LLC, a key shareholder in Digimarc Corporation (DMRC), with a 5.2% ownership stake, has released a letter advocating for significant voting actions at Digimarc's Annual Meeting scheduled for May 7, 2025. The investor group is calling for shareholders to "WITHHOLD" their votes for CEO Riley McCormack and Chair Kathleen Kool, and to "VOTE NO" on the company’s say-on-pay proposal.
The letter from Ocho outlines several critical issues motivating this call to action. Under CEO McCormack's four-year leadership, Digimarc has experienced a 60% decline in stock price, stagnant revenue per share, declining net annual recurring revenue (ARR), and continued operating losses. These financial setbacks have raised serious concerns about the effectiveness of current management strategies.
Moreover, Ocho points to a controversial change in the executive compensation metric from total ARR to "Gross New ARR Growth" as a significant governance failure. This alteration came just before a major contract loss, allowing executives to receive a 96% bonus payout despite the company's poor performance, compared to a 25% payout under the previous scheme.
Chair Kathleen Kool is also under scrutiny for her role in overseeing these changes without providing adequate oversight or engaging with shareholders privately. Kool’s choice to receive her compensation entirely in cash, rather than stock, signals a potential misalignment with shareholder interests and confidence in the company’s future prospects.
Ocho Investments urges Digimarc shareholders to vote strategically to ensure an experienced leadership that aligns management compensation with shareholder value, and to restore effective governance practices that can better guide the company toward sustainable success.
