Gogo Inc. revises executive chairman’s contract

Gogo Inc . (NASDAQ:GOGO), a key player in communication services with a market capitalization of $914.2 million, has entered into a revised employment agreement with Oakleigh Thorne, its Executive Chairman, as per a recent 8-K filing with the Securities and Exchange Commission. According to InvestingPro data, the company maintains strong fundamentals with a gross profit margin of 62.5% and is currently trading below its Fair Value, suggesting potential upside opportunity. The new agreement, effective since January 1, 2025, outlines changes to Thorne’s compensation and tenure.

The modified contract, referred to as the Second Amended and Restated Employment Agreement, supersedes the previous agreement dated March 4, 2018, and its subsequent amendments. Thorne’s new term commenced at the beginning of 2025 and is set to continue through an unspecified date later in the year, followed by a part-time commitment until December 31, 2025. This leadership transition comes as analysts tracked by InvestingPro project net income growth and continued profitability for the company this year, with target prices ranging from $10 to $13 per share.

During the initial full-time phase of his tenure, Thorne will earn a base salary of $700,000 annually, which will be reduced to $350,000 per annum when he transitions to part-time status. Additionally, he is eligible for an annual bonus for the fiscal year 2025, with a target equal to 100% of his base salary for both terms, contingent on the achievement of objectives established by the company’s Compensation Committee.

Moreover, the agreement stipulates a lump-sum payment of $1,400,000 to Thorne upon the completion of the first term, along with equity awards aligned with those granted in 2023. The company will also reimburse up to $15,000 for legal fees incurred during the negotiation of this agreement.

Upon the second term’s conclusion, provided Thorne signs a general release of claims, all his unvested time-based equity awards will fully vest, and performance-based awards will remain eligible for vesting as long as he remains on the board. Additionally, vested stock options will be exercisable until the earlier of their original term or March 31, 2026.

The agreement also includes provisions for termination scenarios. If Thorne’s employment ends without cause, due to death, disability, or resignation for good reason before the second term concludes, he will receive the first term lump-sum payment, a pro rata bonus, the second term equity treatment, and accrued benefits. Similar entitlements apply if such termination occurs within 24 months following a change in control, with an additional lump sum payment equivalent to eighteen months of his base salary and target bonus.

This revised employment agreement will be filed in detail with the company’s Quarterly Report on Form 10-Q for the quarter ending March 31, 2025. The information is based on a press release statement from Gogo Inc. For investors seeking deeper insights, InvestingPro offers comprehensive analysis of Gogo’s financial health (currently rated as FAIR), along with 8 additional exclusive ProTips and detailed valuation metrics in its Pro Research Report, part of its coverage of over 1,400 US stocks.

In other recent news, Gogo Inc. reported its fourth quarter 2024 financial results, revealing a mixed performance. The company experienced a significant earnings per share (EPS) miss, with a reported loss of $0.22 compared to an expected gain of $0.0567. However, Gogo’s revenue surpassed expectations, reaching $137.8 million against a forecasted $97.28 million, marking a 41% year-over-year increase. This growth was driven by a 47% rise in service revenue, highlighting the company’s strong market position in in-flight connectivity.

In another development, Gogo secured Federal Aviation Administration (FAA) approval for its Plane Simple® Ka-band tail mount terminal on Gulfstream GV and G550 aircraft. This certification enhances Gogo’s connectivity offerings, which are compatible with Viasat’s next-generation GX satellites. Additionally, Gogo is working on an aftermarket STC for Gulfstream G500 and G600 models, expected to complete later this year.

Analyst firms are keeping a close eye on Gogo’s strategic initiatives, including its recent acquisition of Satcom Direct, which is seen as a move to bolster growth prospects. The company has set its 2025 revenue guidance between $870 million and $910 million, reflecting its aggressive expansion strategy. These developments indicate Gogo’s commitment to enhancing its connectivity solutions and expanding its market share in the business aviation sector.

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