Rekor Systems, Inc. Announces Key Leadership Changes: Appointment of New CFO and Director Resignation

Key Developments Investors Need to Know

• Appointment of New Chief Financial Officer (CFO): Rekor Systems, Inc. has appointed Joseph Nalepa as its new CFO, effective November 17, 2025. The company entered into an employment agreement with Mr. Nalepa on March 24, 2026.
• Resignation of Director: Professor Sanjay Sarma resigned from the Board of Directors, effective March 25, 2026. The resignation was not due to any disagreement with the company on any matter relating to its operations, policies, or practices.
• Compensation and Incentives for New CFO: Mr. Nalepa will receive an annual base salary of \$260,000 and is eligible for a \$75,000 initial bonus if certain performance conditions are met by May 1, 2026, including timely filing of the company’s 2025 10-K and a satisfactory audit report.
• Employment Terms: Nalepa’s agreement runs through June 30, 2028, with automatic one-year renewals unless either party gives 30 days’ notice of non-renewal.
• Benefits and Protections: Mr. Nalepa will be eligible to participate in company benefit plans (401(k), medical, etc.), and will be covered by directors’ and officers’ liability insurance during his tenure and for three years thereafter.
• Compensation for CEO: The Amended and Restated Employment Agreement for Robert A. Berman (CEO) was also disclosed, providing an annual base salary of \$395,000 and a one-time fully vested grant of 1,000,000 shares of the company’s common stock, with the company covering the employer portion of FICA taxes on this grant.

Details of the CFO Appointment

Rekor Systems’ new CFO, Joseph Nalepa, brings financial leadership during a critical period for the company. Under his employment agreement:

• Base Salary: \$260,000 per year, payable in accordance with company payroll practices.
• Initial Bonus: \$75,000, payable in May 2026 if the company files its 2025 Annual Report on Form 10-K on time and receives a satisfactory report from its independent auditors.
• Discretionary Bonuses: Starting July 1, 2026, Nalepa will be considered for discretionary bonuses based on performance targets set by the Board.
• Term: Through June 30, 2028, with automatic one-year renewals unless terminated or notice of non-renewal is given by either party.
• Benefits: Eligibility for company benefit plans, subject to plan terms and Board policies.
• Expense Reimbursement: Reimbursement for reasonable business expenses, subject to approval and company policy.
• Liability Insurance: D&O insurance coverage at no less favorable terms than other officers/directors, for the term plus three years post-employment.

Director Resignation: No Adverse Circumstances

Professor Sanjay Sarma’s resignation from the Board is confirmed to be not the result of any disagreement with Rekor Systems regarding its operations, policies, or practices. While the departure of a director can sometimes be a red flag, the company made it clear that no such issues were present in this case.

CEO Employment Agreement: Significant Equity Grant

The company also amended and restated the employment agreement with its CEO, Robert A. Berman:

• Base Salary: \$395,000 annually.
• Stock Grant: One-time grant of 1,000,000 shares of Rekor’s common stock, fully vested on the date of grant. The company will pay its share of the FICA tax; the CEO is responsible for income taxes.
• Term: Through June 30, 2028, with automatic one-year renewals unless terminated or notice of non-renewal is given by either party.
• Benefits and D&O Insurance: Same as for the CFO, including participation in benefit plans and liability insurance coverage.
• Change of Control Provisions: Includes standard protections and separation terms if the CEO’s employment is terminated under certain conditions.

Potential Impact on Shareholders and Share Price Sensitivity

• Leadership Stability: The appointment of a new CFO with clearly defined incentives and employment terms, combined with an amended agreement for the CEO, signals the company’s focus on leadership continuity and alignment of management and shareholder interests.
• Significant Equity Grant to CEO: The one-time, fully vested grant of 1,000,000 shares to the CEO is substantial and may be viewed as aligning management’s interests with those of shareholders. However, it could also be seen as dilutive if additional shares are issued.
• Director Resignation: Although the company asserts that the director resignation was not due to disagreement, such moves can sometimes cause uncertainty among investors, particularly if not adequately explained. The company’s transparency on this point is positive.
• Performance-Based Bonuses: The structure of the new CFO’s bonus, tied to timely regulatory filings and satisfactory audits, is likely to incentivize strong financial controls and transparency, which is positive for investor confidence.

Conclusion

Rekor Systems, Inc. has made significant changes to its executive team, including the appointment of a new CFO and the resignation of a board member. The new employment agreements for both the CEO and CFO provide for long-term continuity, competitive compensation, and strong incentives for performance and compliance. The company’s disclosure of these changes is comprehensive, and shareholders should monitor the integration of the new CFO and the effect of these changes on company performance and strategic direction.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult with a financial advisor before making investment decisions. The information provided is based on company filings and is subject to change.

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