ELSE Electro Sensors Inc

 

UNITED STATES SECURITIES
AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.____ )

 

Filed by the registrant ☒

Filed by a party other than the registrant ☐

Check the appropriate box:

 

	☐	Preliminary Proxy Statement
	☐	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
	☒	Definitive Proxy Statement
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	☐	Soliciting Material Under Section 240.14a-12

 

ELECTRO-SENSORS, INC.

(Name of Registrant as Specified in Its Charter)

N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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	☐	Fee paid previously with preliminary materials.
	☐	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11

 

 

 

ELECTRO-SENSORS, INC. 6111 Blue Circle Drive Minnetonka, Minnesota 55343

(952) 930-0100

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

April 23, 2025

 

To the Shareholders of Electro-Sensors, Inc.:

 

Notice is hereby given that the Annual Meeting of Shareholders of Electro-Sensors, Inc. will be held on Wednesday, April 23, 2025 at 2:00 p.m. Central Time. The Annual Meeting will be a virtual meeting of shareholders, which will be conducted via a live webcast. You will be able to participate in the virtual Annual Meeting, vote and submit your questions via the live webcast by visiting www.virtualshareholdermeeting.com/ELSE2025 for the following purposes:

 

1.

To elect five directors to serve until the next Annual Meeting of Shareholders;

 

2.

To set the number of directors at five;

 

3.

To ratify the appointment of Boulay PLLP as independent registered public accounting firm for the Company for the fiscal year ending December 31, 2025;

 

4.

To hold an advisory vote approving executive compensation (a “Say-on-Pay” vote);

 

5.

To hold an advisory vote on the frequency of future Say-on-Pay votes; and

 

6.

To take action upon any business as may properly come before the meeting or any adjournment or postponement thereof.

 

Accompanying this Notice of Annual Meeting is a Proxy Statement, Form of Proxy and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

 

The Board of Directors has fixed the close of business on February 27, 2025 as the record date for the determination of shareholders entitled to notice of and to vote at the Annual Meeting of Shareholders. All shareholders are cordially invited to attend the virtual Annual Meeting at www.virtualshareholdermeeting.com/ELSE2025.

 

To ensure that we achieve a quorum, however, whether or not you plan to attend the Annual Meeting webcast, the Board of Directors requests that you either (1) promptly complete, sign, date and return the enclosed proxy card solicited by the Board of Directors, or (2) vote electronically following the process described in this proxy statement or in other materials you receive. The proxy is revocable and will not be used if you attend the Annual Meeting and vote in person or otherwise provide notice of your revocation. If you have any questions regarding the completion of the enclosed proxy card, please call the Company at (952) 930-0100.

 

NOTICE: Please retain a copy of the 16 Digit Control Number that is printed on your proxy card as you will need it to enter the virtual Annual Meeting as a verified shareholder.

 

	BY ORDER OF THE BOARD OF DIRECTORS,
	David L. Klenk
	President

 

Minnetonka, Minnesota

 

Dated: March 19, 2025

 

 

 

ELECTRO-SENSORS, INC. 6111 Blue Circle Drive Minnetonka, Minnesota 55343 (952) 930-0100

PROXY STATEMENT

FOR

ANNUAL MEETING OF SHAREHOLDERS

April 23, 2025

 

GENERAL INFORMATION

 

This Proxy Statement is furnished by the Board of Directors (the “Board”) of Electro-Sensors, Inc., a Minnesota corporation (the “Company”or “Electro-Sensors”), to the shareholders of the Company in connection with a solicitation of proxies to be voted at the Annual Meeting of Shareholders (the “Annual Meeting”) to be held electronically at 2:00 p.m., Central Time, on Wednesday, April 23, 2025, at www.virtualshareholdermeeting.com/ELSE2025 and at any and all adjournments or postponements thereof. The Annual Meeting will be a completely virtual meeting of shareholders that will be conducted via live webcast. This Proxy Statement and the accompanying materials are first being mailed to shareholders on or about March 20, 2025.

 

Questions at the Annual Meeting

To facilitate effective communications at the Annual Meeting, the Company requests that any shareholders with questions for Company management, Company directors, or the Company’s independent registered public accounting firm submit those questions prior to the start of the meeting at https://www.electro-sensors.com/about/investor-info under Investor Contact - Email Gloria. The Company will endeavor to answer any questions submitted.

 

Proxy Process

 

If your shares are registered in the name of a bank or brokerage firm, you may be eligible to vote your shares electronically via the Internet or telephone. A large number of banks and brokerage firms participate in the Broadridge Investor Communication Services online program. This program provides eligible shareholders who receive notice and access materials or copies of the Annual Report and Proxy Statement the opportunity to vote via the Internet or telephone. If your bank or brokerage firm participates in this Broadridge program, your voting form will provide instructions. If your voting form does not refer to Internet or telephone information, please complete and return the paper proxy card in the postage paid envelope provided.

 

Any proxy delivered pursuant to this solicitation is revocable at the option of the person giving the proxy at any time before it is exercised. A proxy may be revoked, prior to its exercise, by executing and delivering a later-dated proxy via the Internet, via telephone or by mail, by delivering written notice of the revocation of the proxy to the Company’s President prior to the Annual Meeting, or by attending and voting at the Annual Meeting. Attendance at the Annual Meeting, in and of itself, will not constitute a revocation of a proxy. The shares represented by a proxy will be voted in accordance with the shareholder’s directions if the proxy is duly submitted and not validly revoked prior to the Annual Meeting. If no directions are specified on a duly submitted proxy, the shares will be voted in accordance with the recommendations of the Board, FOR approval of the number of directors to be set at five, FOR the election of the directors nominated by the Board, FOR the ratification of the Company’s selection of independent registered public accounting firm for the fiscal year ending December 31, 2025, FOR the non-binding resolution regarding executive compensation, for the option of “3 YEARS” as the preferred frequency of future Say-on-Pay votes, and in accordance with the discretion of the persons appointed as proxies on any other matters properly brought before the Annual Meeting and any and all adjournments or postponements thereof.

 

The expense of preparing, printing, and mailing this Proxy Statement and the proxies solicited hereby will be borne by the Company. The Company will request brokerage firms, banks, nominees, custodians, and fiduciaries to forward proxy materials to the beneficial owners of shares of common stock of the Company (“Common Stock”) as of the record date and reimburse these firms for the cost of forwarding the proxy materials in accordance with customary practice. In addition to the use of the Internet and mail, proxies may be solicited by officers, directors, and regular employees of the Company, without additional remuneration, in person or by telephone or facsimile transmission.

 

For a shareholder proposal to be considered for inclusion in our Proxy Statement for the 2026 Annual Meeting, the written proposal must be received at our principal executive offices by the close of business on November 20, 2025. The proposal must comply with SEC regulations regarding the inclusion of shareholder proposals in company-sponsored proxy materials.

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Proxy Statement, Form of Proxy, and Annual Report on Form 10-K are available at

http://www.idelivercommunications.com/proxy/else

 

 

OUTSTANDING SHARES & VOTING RIGHTS

 

The Company fixed the close of business on February 27, 2025 as the record date for determining shareholders entitled to notice of and to vote at the Annual Meeting. At February 27, 2025, the Company had outstanding 3,428,021 shares of Common Stock, the only outstanding class of capital stock of the Company. Each share of Common Stock outstanding on the record date entitles the holder thereof to one vote on each matter to be voted upon by shareholders at the Annual Meeting. Holders of Common Stock are not entitled to cumulative voting rights.

 

For the election of directors, each shareholder will be entitled to vote for five nominees and the five nominees with the greatest number of votes will be elected. With respect to the proposal to set the number of directors at five, ratification of our independent registered public accounting firm for the fiscal year ending December 31, 2025, the advisory Say-on-Pay vote, and any other matter that properly comes before the meeting, the affirmative vote of the holders of a majority of the shares of Common Stock represented in person or by proxy and entitled to vote on the proposal will be required for approval. With respect to the advisory vote on the frequency of future Say-on-Pay votes, the shareholders will be deemed to have selected the frequency option that receives the most votes. A properly executed proxy marked “ABSTAIN” with respect to any proposal will not be voted, although it will be counted for purposes of determining whether there is a quorum. Accordingly, an abstention will have the effect of a negative vote with respect to all proposals other than the advisory vote on the frequency of future Say-on-Pay votes, on which an abstention will have no effect.

 

A majority of the shares of Common Stock entitled to vote at the Annual Meeting, present in person or by proxy, constitutes a quorum that is required for the transaction of business at the Annual Meeting. Proxies relating to “street name” shares that are voted by brokers on some matters, but not on other matters as to which authority to vote is withheld from the broker (“broker non-votes”) absent voting instructions from the beneficial owner, will be treated as shares present for purposes of determining the presence or absence of a quorum but will not be deemed to be represented at the meeting for purposes of determining the approval of any matter submitted to the shareholders for which voting authority is withheld. Brokers are not permitted to cast votes on non-routine matters, or nondiscretionary matters, which include election of directors, approval of “say-on-pay” or “say-on-pay frequency” resolutions, therefore broker non-votes will have no impact on Proposals 1, 4, and 5. Conversely, Proposals 2 and 3 are considered routine matters and therefore are eligible for broker discretionary voting. The Inspector of Election appointed by the Board will determine the shares represented at the meeting and the validity of proxies and ballots and will count all votes and ballots.

 

CORPORATE GOVERNANCE

 

The business affairs of the Company are conducted under the direction of the Board in accordance with the Minnesota Business Corporation Act and our Articles of Incorporation and Bylaws. The Board of Directors currently has five members: David L. Klenk, Jeffrey D. Peterson, Joseph A. Marino, Scott A. Gabbard, and Michael C. Zipoy. Members of the Board are informed of our business through discussions with management, by reviewing materials provided to them and by participating in meetings of the Board and its committees, among other activities. The corporate governance practices that we follow are summarized below.

 

Board Leadership Structure and Risk Management

 

The Board believes that independent director Joseph A. Marino is best suited to serve as Chairman of the Board due to his extensive familiarity with the Company’s business and industry as well as his proven track record of leading dynamic and growing organizations. Additionally, the Board believes Mr. Marino is most capable of effectively identifying strategic priorities and leading the discussion and execution of strategy. The Board believes having an independent director as chairman provides for good governance and effectively balances the roles of internal and external directors. Mr. Marino and the Company’s other independent directors bring experience, oversight and expertise from outside the Company and industry, while Mr. David L. Klenk, as President, Chief Executive Officer and Chief Financial Officer, brings company-specific experience and expertise. The Board believes that Mr. Klenk’s participation on the Board in his role of Chief Executive Officer promotes strategy development and execution, and facilitates information flow between management and the Board, which are essential to effective governance.   

 

One key Board responsibility is to hold management accountable for the execution of strategy once it is developed. The Board believes that its independent directors work together effectively to serve this oversight function, with no individual director serving as a “lead” independent director.

 

The Board believes that oversight of the Company’s risk management efforts is another key responsibility that is shared by the entire Board.  The Board regularly reviews risk management information regarding the Company’s liquidity, operations, and cybersecurity.  Board members receive regular financial statements, which are discussed at quarterly meetings of the Board.  In addition, Mr. Klenk frequently has informal discussions with Board members regarding key business issues and risk management.

 

 

Independence

 

The Board of Directors has determined that Messrs. Gabbard, Marino, Peterson, and Zipoy are independent directors as defined by the listing standards of the Nasdaq Stock Market, because none of them are believed to have any relationships that, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. If Messrs. Gabbard, Marino, Peterson, and Zipoy are all elected at the Annual Meeting, they will constitute a majority of the Board of Directors. Mr. Klenk is precluded from being considered independent by Nasdaq rules since he currently serves as an executive officer of the Company.

 

The Board has determined that all members of the Company’s Audit Committee, Compensation Committee and Nominating Committee are independent under listing standards of the Nasdaq Stock Market.

 

Code of Ethics and Business Conduct

 

The Company has adopted the Electro-Sensors Code of Ethics and Business Conduct (the “Code of Conduct”), which applies to all of our directors, officers and employees. A copy of the Code of Conduct may be obtained upon written request to the Chief Executive Officer. If we make any substantive amendments to the Code of Conduct or grant any waiver, including any implicit waiver from a provision of the Code of Conduct to our directors or executive officers, we will disclose the nature of the amendments or waiver on our website.

 

Director Attendance at Annual Meeting

 

We expect all directors to attend the Annual Meeting of Shareholders. The 2024 Annual Meeting was held virtually and all five of the directors attended the Meeting.

 

Communications with the Board

 

Shareholders may communicate directly with the Board. All communications should be directed to the Chairman of our Audit Committee at the address below and should prominently indicate on the outside of the envelope that the communication is intended for the Board or for non-management directors. If no director is specified, the communication will be forwarded to the entire Board. Shareholder communications to the Board should be sent to:

 

Board of Directors

Attention: Chairman, Audit Committee

Electro-Sensors, Inc.

6111 Blue Circle Drive

Minnetonka, Minnesota 55343-9108

 

Committees and Meetings of the Board of Directors

 

Information about the Board and its Committees are set forth below.

 

Board Meetings

 

The Board met five times during 2024. Each Board member attended all of the meetings of the Board and committees on which he served.

 

Director Compensation

 

The compensation of directors who are not Company employees is set forth below under “Director Compensation.”

 

 

Audit Committee

 

Messrs. Marino, Gabbard (Chair), and Zipoy currently serve as members of the Audit Committee. This Committee met twice during 2024. The Audit Committee is responsible for selecting the Company’s independent registered public accounting firm, and for assisting the Board in its oversight of corporate accounting and internal controls, reporting practices of the Company and the quality and integrity of the financial reports of the Company. In addition to regularly scheduled Audit Committee meetings, the Audit Committee Chair meets quarterly with the Company’s independent accounting firm to discuss their processes surrounding the Company’s quarterly and full year results. The Audit Committee Charter specifies the Committee’s composition and responsibilities. For more information concerning the Audit Committee, see the Report of the Audit Committee on page 19 and the Audit Committee Charter posted on our corporate website under “Investor Information - Corporate Governance.” Given his significant experience serving as a chief financial officer of companies, the Board has determined that Mr. Gabbard is an “audit committee financial expert” as defined by Item 407(d)(5)(ii) of SEC Regulation S-K.

 

Compensation Committee

 

Messrs. Marino, Gabbard (Chair), and Zipoy currently serve as members of the Compensation Committee. The Compensation Committee acts pursuant to a charter and met twice during 2024. For more information concerning the Compensation Committee, see the Compensation Committee Charter posted on our corporate website under “Investor Information - Corporate Governance.” The Compensation Committee is responsible for making recommendations to the Board concerning compensation of the Company’s employees, officers, and directors, and is authorized to determine the compensation of the Company’s executive officers. The Compensation Committee is authorized to administer the various incentive plans of the Company and has all powers of the attendant thereto, including the power to grant stock compensation.

 

The Company’s insider trading policy strongly discourages employees (including officers) and the Company’s Board members from engaging in hedging, margin purchases, short sales, and buying or selling puts or calls with respect to the Company’s securities. In addition, the policy requires that Company stock purchased in the open market must be held for a minimum of six months. The Company’s Policy Statement on Confidential Information and Securities Trading by Electro-Sensors, Inc. Personnel is included as Exhibit 19.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

 

Nominating Committee

 

Messrs. Marino, Peterson, and Zipoy (Chair) currently serve as members of the Nominating Committee. The Nominating Committee met once during 2024. The Nominating Committee is responsible for evaluating and nominating or recommending candidates for the Company’s Board of Directors. A copy of the Nominating Committee Charter, which has been adopted by the Company’s Board, is posted on our corporate website under “Investor Information - Corporate Governance.”

 

Business Development Committee

 

Messrs. Marino, Gabbard, and Klenk serve as members of the Business Development Committee. The Business Development Committee meets regularly during the year and reports to the Board. The Business Development Committee is authorized to explore and pursue business development and other strategic alternatives for Electro-Sensors.

 

The members of the committee were selected for their background and expertise in strategy formulation and execution, as well as their deep understanding of the Electro-Sensors business, business development opportunities, and potential strategic alternatives. The members of the committee have been active throughout the year in addition to their other service to Electro-Sensors, its Board and Board committees.

 

 

Nominating Policy

 

The Nominating Committee will consider candidates for nomination as a director recommended by shareholders. The Nominating Committee believes that director candidates should have certain minimum qualifications.

 

In evaluating director nominees who meet the Company’s minimum qualifications, the Nominating Committee and any search firm, it may retain, considers the following factors and qualifications, among others:

 

●

the appropriate size of the Company’s Board of Directors;

●

the needs of the Board for the particular talents and experience of its directors;

●

the knowledge, skills and experience of nominees, including experience in technology, business, finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board;

●

familiarity with domestic and international business matters;

●

legal and regulatory requirements;

●

experience with accounting rules and practices;

●

understanding of basic financial statements;

●

appreciation of the relationship of the Company’s business to the changing needs of society; and

●

the desire to balance the considerable benefit of continuity with the periodic injection of the fresh perspective provided by new members.

 

The Nominating Committee will consider the attributes of the candidates and the needs of the Board and will review all candidates in the same manner. The Nominating Committee seeks to nominate candidates with a diverse range of knowledge, experience, skills, expertise, and other qualities that will contribute to the overall effectiveness of the Board.

 

A shareholder who wishes to recommend one or more directors must provide a written recommendation to the Company at the address below by November 20, 2025. Notice of a recommendation must include the name and address of the shareholder and number of shares the shareholder owns. The shareholder should include the nominee’s name, age, business address, residence address, current principal occupation, five-year employment history with employer names and a description of the employer’s business, the number of shares beneficially owned by the nominee, whether the nominee can read and understand basic financial statements, and other Board memberships, if any.

 

Electro-Sensors, Inc.

Attn: Chair, Nominating Committee

6111 Blue Circle Drive

Minnetonka, MN 55343-9108

 

The recommendation must be accompanied by a written consent of the nominee to stand for election at the Annual Meeting if nominated by the Nominating Committee and to serve if elected by the shareholders. The Company may require any nominee to furnish additional information that may be needed to determine the eligibility of the nominee and whether the nominee has the attributes the Board believes are important in its composition.

 

 

Special Committee

 

Due to the focus on the business development and strategic alternatives process being led by the special committee, the Nominating Committee believes that retaining the current composition of the Board through the pendency of this process is in the best interests of Electro-Sensors and its shareholders. The Nominating Committee believes that the current Board has a diversity of talent and experience to draw upon, is able to staff the special committee and other committees of the Board and is able to engage in Board and committee service, all while maintaining efficient function and communication among members. The Nominating Committee also believes that active recruitment of new Board members during a strategic alternative process would be more difficult and be less likely to result in qualified and interested candidates due to the unique challenges presented by an ongoing business development and strategic alternatives process.

 

 

ELECTION OF DIRECTORS

Proposals #1 and #2

 

The Bylaws of the Company provide that at each Annual Meeting, the shareholders will determine the number of directors, which must be at least one. The Nominating Committee and the Board recommend that the number of directors be currently set at five and that five directors be elected at the Annual Meeting to serve until the 2026 Annual Meeting or until their successors are duly elected and qualified. Under applicable Minnesota law and the Bylaws of the Company, approval of the proposal to set the number of directors at five requires the affirmative vote of the holders of a majority of the voting power of the shares present in person or by proxy at the Annual Meeting with authority to vote on this matter.

 

The Nominating Committee recommended and the Board selected the persons named below for election to the Board. All nominees are currently directors of the Company. If, prior to the Annual Meeting, the Board determines that any of these nominees would be unable to serve as a director after the Annual Meeting by reason of death, incapacity or other unexpected occurrence, the proxies will be voted for such substitute nominee as the Board selects. The Board has no reason to believe that any of the following nominees will be unable to serve. The Bylaws of the Company provide that directors will be elected by a plurality of the votes cast by holders of shares present in person or by proxy and entitled to vote on the election of directors at a meeting at which a quorum is present.

 

The following table sets forth the principal occupations (for at least the last five years) and directorships of the nominees:

 

Name	Principal Occupation and Directorships	Age	Director Since
David L. Klenk	President, CEO, and CFO of the Company since 2013	60	2013
Joseph A. Marino	President and CEO of Cardia, Inc. (a medical equipment manufacturer) since 1998	73	1994
Scott A. Gabbard	Retired, Finance executive from 2000 through 2021. CFO and COO of Magenic Technologies, Inc. (a software consulting organization) from April 2006 to August 2021	58	2013
Jeffrey D. Peterson	Private investor since 1998. Previously employed by John G. Kinnard and Company, a regional brokerage firm	68	2011
Michael C. Zipoy	Retired, Investment executive from 1978-2018; Feltl and Company investment executive (brokerage and investment banking firm) from 2005 through 2018	77	2012

 

The Board believes the following key characteristics are important in the selecting of these five nominees:

 

Mr. Marino’s executive leadership experience in building both private and public companies, including strategy formulation, execution, and investor relations;

 

Mr. Zipoy’s investment experience in small and micro-cap companies and his participation in public and private equity financing;

 

Mr. Peterson’s significant experience in the investment industry and personal connections with many regional businesses;

 

Mr. Gabbard’s extensive management experience, expertise, and background on strategic, operational, accounting and financial matters for both public and private companies; and

 

Mr. Klenk’s years of leadership experience with emerging technology companies, his high levels of customer and employee focus, and his demonstrated ability to lead companies through significant growth cycles.

 

 

Vote Required for Approval of Proposal 1

 

The affirmative vote of the holders of a majority of the shares of Common Stock represented at the Annual Meeting in person or by proxy and entitled to vote is required for approval of this proposal.

 

Vote Required for Approval of Proposal 2

 

Directors will be elected by a plurality of the votes cast by holders of Common Stock represented at the Annual Meeting in person or by proxy and entitled to vote on this proposal.

 

The Board of Directors recommends that shareholders vote FOR setting the number of directors at five and FOR the election of each director nominee listed above.

 

 

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth information, as of February 27, 2025, regarding the beneficial ownership of the outstanding shares of Common Stock by persons known by the Company to beneficially own more than 5% of the outstanding shares of Common Stock, by directors and director nominees, by the only executive officer named in the Summary Compensation Table, and by the Company’s current directors and executive officer as a group. If an individual’s address is not provided, the individual’s address is 6111 Blue Circle Drive Minnetonka MN 55343.

 

		Common Stock
Name and Address		Number of Shares		Percent
of Beneficial Owner		Beneficially Owned(1)		of Class
Jeffrey D. Peterson 15708 Woodknoll Lane Minnetonka, MN 55345		366,892 (2)		10.7%
Patricia N. Peterson 6005 Erin Terrace Edina, MN 55439		364,768 (3)		10.6%
Lynne E. Peterson 10254 Nottingham Trail Eden Prairie, MN 55347		350,893 (4)		10.2%
John E. Peterson 815 Buttonbush Lane Naples, FL 34108		350,893 (3)		10.2%
Paul R. Peterson 227 Cedar Drive West Hudson, WI 54016		350,893 (3)		10.2%
Caldwell Sutter Capital, Inc. Joseph F. Helmer 30 Liberty Ship Way #3225 Sausalito, CA 94965		249,025 (5)		7.3%
David L. Klenk		70,373 (6)		2.0%
Scott A. Gabbard		13,500 (7)		0.4%
Joseph A. Marino		16,000 (8)		0.5%
Michael C. Zipoy		26,000 (9)		0.8%
Officers and Directors as a Group (5 persons)		492,765		14.0%

 

 

(1)

Except as otherwise indicated, each person named has the sole power to vote and sole power to direct the disposition of all shares listed as beneficially owned by him or her. Beneficial ownership information is based on information furnished by the specified persons and is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934 (the “Exchange Act”), as required for purposes of this Proxy Statement. Accordingly, it includes shares of Common Stock that are issuable upon the exercise of stock options exercisable within 60 days of February 27, 2025 as noted below.

(2)

Based on a Schedule 13D filed with the SEC on February 14, 2024. Includes 10,000 shares issuable upon the exercise of stock options exercisable within 60 days of February 27, 2025, 3,500 vested restricted stock units, and 46 shares held by the Electro-Sensors, Inc. Employee Stock Ownership Plan (“ESOP”) for the account of Mr. Peterson.

(3)

Based on a Schedule 13D filed with the SEC on February 14, 2024.

(4)

Based on a Schedule 13D/A filed with the SEC on February 21, 2024.

(5)

Based on a Schedule 13G/A filed with the SEC on February 11, 2025. Includes shares owned by Caldwell Sutter Capital, Inc. and Joseph F. Helmer. Mr. Helmer has sole voting power of 26,592 shares, the reporting parties have shared voting power of zero shares, Mr. Helmer has sole dispositive power of 16,928 shares, and the reporting parties have shared dispositive power of 232,097 shares.

(6)

Includes 60,000 shares issuable upon the exercise of stock options exercisable within 60 days of February 27, 2025, 7,000 vested restricted stock units, and 3,373 shares held by the Electro-Sensors, Inc. Employee Stock Ownership Plan (“ESOP”) for the account of Mr. Klenk.

(7)

Represents 10,000 shares issuable upon the exercise of stock options exercisable within 60 days of February 27, 2025 and 3,500 vested restricted stock units.

(8)

Includes 10,000 shares issuable upon the exercise of stock options exercisable within 60 days of February 27, 2025 and 3,500 vested restricted stock units.

(9)

Includes 10,000 shares issuable upon the exercise of stock options exercisable within 60 days of February 27, 2025, 3,500 vested restricted stock units and 10,000 shares held by the Barbara J. Zipoy and Michael C. Zipoy Revocable Trust of which Mr. Zipoy is a Trustee.

 

TRANSACTIONS WITH RELATED PERSONS,

PROMOTERS AND CERTAIN CONTROL PERSONS

 

The Company was not a party to any transactions with related persons, promoters or control persons during the last two fiscal years and is not currently contemplating any such transactions.

 

 

EXECUTIVE COMPENSATION

 

Compensation Summary

 

The following table summarizes information concerning the compensation awarded or paid to, or earned by, the Company’s Named Executive Officer during 2024 and 2023.

 

Summary Compensation Table

Name and principal position	Year	Salary ($)	Bonus ($)	Option Awards ($)		Non-equity incentive plan compensation ($)		All other compensation ($)(3)	Total ($)
David L. Klenk, President, CEO, CFO	2024 2023	258,154 249,692	20,000 (1) 10,000 (2)	0 37,216		0 0		38,762 39,264	316,916 336,172

(1)

Discretionary payment made under the 2024 Management Incentive Bonus Plan.

(2)

Discretionary payment made under the 2023 Management Incentive Bonus Plan.

(3)

Amounts reflect allocations to individual’s account of Company contributions to the ESOP, 401(k) Plan, and standard employee benefit plans. The Company matches 100% of the first 3% of employee 401(k) Plan contributions and 50% of the next 2% of employee contributions. Standard employee benefits paid on behalf of Mr. Klenk were $28,036 and 401(k) contributions were $10,726.

 

Compensation of Executive Officer

 

Mr. Klenk does not have a written employment agreement with the Company. As of January 1, 2025, his annual salary is $271,000 per year, and he is eligible to receive a bonus as determined by either the Board of Directors or the Compensation Committee. See “2025 Management Incentive Bonus Plan” and “2024 Management Incentive Bonus Plan” information below.

 

Outstanding Equity Awards as of December 31, 2024

 

The following table sets forth certain information concerning outstanding option equity awards outstanding to the Named Executive Officer at December 31, 2024. There were no outstanding share awards and therefore, these columns are omitted from the table.

 

Outstanding Equity Awards at Fiscal Year-End
Option Awards
Name		Number of securities underlying unexercised options (#) exercisable		Number of securities underlying unexercised options (#) unexercisable	Option Exercise Price ($)	Option Expiration Date
Mr. Klenk		50,000		None	3.41	2/8/2026
Mr. Klenk		10,000		15,000	4.25	8/27/2033

 

Stock Awards
Name		Number of shares or units of stock that have not vested		Market value of shares or units of stock that have not vested ($)
Mr. Klenk		28,000		$144,704

 

 

2024 Management Incentive Bonus Plan

 

On January 25, 2024, the Compensation Committee approved the 2024 Management Incentive Plan (the “2024 Plan”) for the Company’s President, Chief Executive Officer, and Chief Financial Officer David L. Klenk. The 2024 Plan had both annual financial performance and strategic goals. The financial performance goals were primarily based on the achievement of specified revenue levels, with additional amounts available for exceeding certain levels. The strategic goals were primarily related to initiatives related to strategic business development. The Company allocated 40% of the potential bonus to financial performance, 50% to strategic initiatives, and 10% was discretionary. If the Company achieved the specified goals, the incentive cash payment to Mr. Klenk would have been approximately 19% of his base salary. Furthermore, the Committee retained discretion under the 2024 Plan to make incentive plan cash payments in amounts higher or lower than would otherwise be required under the 2024 Plan. Although the Company did not achieve specified revenue levels, Mr. Klenk worked extensively on business development. The Compensation Committee approved a discretionary $20,000 bonus to Mr. Klenk under the 2024 Plan.

 

2025 Management Incentive Bonus Plan

 

On January 9, 2025, the Compensation Committee approved the 2025 Management Incentive Plan (the “2025 Plan”) for Mr. Klenk. The 2025 Plan has both annual financial performance and strategic goals. The financial performance goals are primarily based on the achievement of specified revenue levels, with additional amounts available for exceeding certain levels. The strategic goals are primarily related to initiatives related to strategic business development. The 2025 Plan allocates 40% of the potential bonus to financial performance, 50% to strategic initiatives, and 10% is discretionary. If the Company achieves the specified goals, the incentive cash payment to Mr. Klenk will equal approximately 18% of his base salary. Furthermore, the Committee retains discretion under the 2025 Plan to make incentive plan cash payments in amounts higher or lower than would otherwise be required under the 2025 Plan.

 

Policies and Practices Related to the Grant of Equity Awards Close in Time to the Release of Material Nonpublic Information

 

We do not grant new awards of stock options, stock appreciation rights, or similar option-like instruments within four business days before or one business day after the release of a Form 10-Q, 10-K, or 8-K that discloses material nonpublic information. If we grant new awards of such options, the Board will evaluate the appropriate steps to take in relation to the foregoing.

 

Pay Versus Performance

 

Year	Summary Compensation Table Total for PEO ($)	Compensation actually paid to PEO ($)	Average Summary compensation table total for non-PEO named executive officers ($)	Compensation actually paid to non-PEO named officers ($)	Value of Fixed $100 Investment Based on Total Shareholder Return	Net Income ($)
2024	316,916	316,916	Not applicable	Not applicable	107.44	446,000
2023	336,172	336,172	Not applicable	Not applicable	79.00	275,000
2022	327,306	327,306	Not applicable	Not applicable	93.97	100,000

 

The Company’s principal executive officer, David L. Klenk, currently also serves as the Company’s chief financial officer. There are no other Named Executive Officers of the Company. The compensation actually paid to Mr. Klenk in 2024 and 2023 is the same as the amount appearing in the Summary Compensation Table. There were no defined benefit plans or actuarial pension plans covering the principal executive officer in 2024, 2023, or 2022. Mr. Klenk was granted options to purchase 25,000 shares in 2023 with 20% vesting upon the date of the grant and 20% vesting annually thereafter. Mr. Klenk was also granted 35,000 restricted stock units in 2023 which vest 20% on the first anniversary of the grant and 20% annually thereafter. There were no equity awards granted to Mr. Klenk in 2024 and 2022. Mr. Klenk had 5,000 stock options vest each year in 2023 and 2024, and had 7,000 restricted stock units vest during 2024. There were no equity awards from prior years that first vested in either 2023 or 2022.

 

12

 

 

Analysis of the Information Presented in the Pay Versus Performance Table

 

We seek to incentivize long-term performance, and therefore do not specifically align our performance measures with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table.

 

Compensation Actually Paid and Cumulative TSR

 

The following graph shows the relationship of “compensation actually paid” to our principal executive officer in 2024, 2023 and 2022 to the cumulative TSR of Electro-Sensors assuming an initial investment of $100.

 

 

Compensation Actually Paid and Net Income

 

The following graph shows the relationship of “compensation actually paid” to our principal executive officer in 2024, 2023, and 2022 to Electro-Sensors net income.

 

 

 

DIRECTOR COMPENSATION

 

Compensation Summary

 

The following table summarizes information concerning the compensation awarded or paid to, or earned by, the Company’s non-employee directors during 2024. Directors who are not employees of the Company received $4,000 per Board meeting. The Chairman of the Board of Directors received $24,000 per year. The Audit Committee Chair, Compensation Committee Chair, and Nominating Committee Chair each received $12,000 per year. Each other Audit Committee member, Compensation Committee member, and Nominating Committee member received $6,000 per year for their service on each committee. Non-employee members of the Business Development Committee each received $12,000 per year.

 

Directors may receive additional amounts for special committee or other Board work as determined by the Board.

 

Director Compensation Table

 

Director Name	Fees earned or paid in cash ($)	Option Awards ($)(1)	Total ($)
Joseph A. Marino	74,000	0	74,000
Scott A. Gabbard	56,000	36,572	92,572
Jeffrey D. Peterson	26,000	0	26,000
Michael C. Zipoy	44,000	0	44,000

 

(1)

At December 31, 2024, Messrs. Gabbard, Marino, Peterson, and Zipoy each had 25,000 shares in stock option grants outstanding. Mr. Gabbard was granted options to purchase 25,000 shares in 2024. Messrs. Marino, Peterson, and Zipoy were granted options to purchase 25,000 shares in 2023. The grants vested 20% upon the date of grant and will fully vest in four years. The option values shown are the grant date fair value computed in accordance with FASB ASC Topic 718.

 

The stock option grants were made at the discretion of the Board of Directors.

 

 

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Proposal #3

 

The Company’s Board retained Boulay PLLP as its principal independent registered public accounting firm for the year ended December 31, 2024 and has selected Boulay PLLP to serve as the Company’s independent registered public accounting firm for the year ending December 31, 2025. The Board desires that the selection of this independent registered public accounting firm be submitted to the shareholders for ratification, which ratification requires the affirmative vote of the holders of a majority of the shares of Common Stock represented at the Annual Meeting in person or by proxy and entitled to vote. If the selection is not ratified, the Board of Directors will reconsider its decision.

 

The Company expects a representative of Boulay PLLP to be present at the Annual Meeting. Any shareholder with a question for Boulay PLLP should follow the procedure set forth above under the section “Questions at the Annual Meeting.”

 

Vote Required for Approval

 

The affirmative vote of the holders of a majority of the shares of Common Stock represented at the Annual Meeting in person or by proxy and entitled to vote is required for approval of this proposal.

 

The Board of Directors recommends that shareholders vote FOR the ratification of Boulay PLLP to serve as the Company’s independent registered public accounting firm for the year ending December 31, 2025.

 

DISCLOSURE OF FEES PAID TO INDEPENDENT AUDITORS

 

The following fees were paid to Boulay PLLP in 2024 and 2023:

 

		2024				2023
Audit Fees		$	107,000			$	100,000
Audit-Related fees		$	0			$	0
Tax Fees		$	14,135			$	6,000
All Other Fees		$	0			$	0
Total		$	121,135			$	106,000

 

Audit Fees were for professional services rendered for the audit of the Company’s financial statements and review of the interim financial statements included in quarterly reports and services in connection with statutory and regulatory filings or engagements.

 

Audit-Related Fees consist of the review of, and discussion with, management regarding the treatment of certain accounting matters.

 

Tax Fees were for professional services rendered for preparation of the Company’s annual tax return, quarterly estimates, and state returns. Tax examination consulting is also included.

 

All Other Fees represent fees for any professional services not included in the first three categories listed above.

 

Under its Charter, the Audit Committee is required to pre-approve all audit services, as well as all non-audit services performed by the Company’s independent registered public accounting firm to ensure that the provision of these non-audit services does not impair the auditor’s independence. Unless a particular service has received general pre-approval by the Audit Committee in accordance with the Audit Committee’s pre-approval policy, each service provided must be specifically pre-approved. Any proposed services exceeding pre-approved costs levels will require specific pre-approval by the Audit Committee.

 

 

As part of the Company’s annual engagement agreement with its independent registered public accounting firm, the Audit Committee pre-approves the following:

 

●

Audit services to be provided by the independent auditor: statutory and financial audits for the Company and audit services associated with SEC registration statements, periodic reports and other documents filed with the SEC, production of other documents issued by the independent registered public accounting firm in connection with securities offerings (e.g., comfort letters, consents), and assistance in responding to SEC comment letters.

●

Consulting services provided by the independent registered public accounting firm related to the accounting or disclosure treatment of transactions or events and the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies.

●

Specific non-audit services, primarily tax services. The Audit Committee does not believe that performance of these tax services impairs the auditor’s independence. The Audit Committee has given the independent registered public accounting firm pre-approval for U.S. federal, state, and local tax planning and advice, U.S. federal, state, and local tax compliance, international tax planning and advice, international tax compliance, and tax planning and advice related to merger and acquisition activities. The Company’s independent registered public accounting firm must inform the Audit Committee whenever it provides pre-approved service. The aggregate amount of fees for these pre-approved tax services may not exceed $15,000 without additional explicit approval by the Audit Committee.

 

The term of any pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different term. The Audit Committee retains the right to periodically revise the above list of pre-approved services.

 

 

ADVISORY VOTE ON EXECUTIVE COMPENSATION

Proposal #4

 

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and Section 14A of the Exchange Act require that we provide our shareholders the opportunity to vote on a nonbinding, advisory resolution regarding the compensation of our Named Executive Officers as disclosed in this Proxy Statement in accordance with the compensation disclosure rules of the SEC (commonly referred to as “Say-on-Pay”).

 

The Board of Directors believes that our executive compensation rewards performance, supports our business strategies, and discourages excessive risk taking. We believe that our executive compensation package is adequate, competitive with the market, and consistent with our objectives and goals.

 

The vote on this resolution is not intended to address any specific element of compensation. Instead, the vote relates to the overall compensation of our Named Executive Officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC.

 

The vote on this proposal is an advisory vote and is not binding on the Company. Although the vote is non-binding, the Board of Directors and the Compensation Committee intend to carefully consider the results of the voting on this proposal when making future decisions regarding executive compensation. To the extent there is any significant vote against the compensation of our Named Executive Officers in this Proposal #4, the Compensation Committee will evaluate what actions may be necessary to address our shareholders’ concerns.

 

Vote Required for Approval

 

The affirmative vote of the holders of a majority of the shares of Common Stock represented at the Annual Meeting in person or by proxy and entitled to vote is required for approval of this proposal.

 

The Board of Directors recommends that shareholders vote FOR the non-binding resolution regarding the compensation of our Named Executive Officers, as disclosed in this Proxy Statement.

 

 

ADVISORY VOTE ON THE FREQUENCY OF HOLDING THE SAY-ON-PAY VOTE

Proposal #5

 

In addition to the Say-on-Pay vote set forth in Proposal #4, the Dodd-Frank Act and Section 14A of the Exchange Act require that shareholders have the opportunity, at least once every six years, to vote on how often they believe Say-on-Pay votes should be held in the future. Shareholders may indicate whether they prefer that a Say-on-Pay vote be held every year, every two years or every three years, or they may abstain from this vote.

 

After careful consideration of the various arguments supporting each frequency level, the Board of Directors has determined that an advisory vote on executive compensation every three years is the best approach for the Company. Our executive compensation program is intended to incentivize and reward performance over a multi-year period, and a three-year cycle is consistent with these time horizons. A three-year cycle is an appropriate frequency to provide the Board of Directors and the Compensation Committee sufficient time to consider shareholder input and implement any appropriate changes to our executive compensation strategies. Shareholders who have concerns about executive compensation during the interval between Say-on-Pay votes are welcome to bring their concerns to the attention of the Board.

 

The vote on this proposal is an advisory vote and is not binding on the Company. The outcome of this vote will not require the Board to take any action regarding the frequency of future Say-on-Pay votes. However, the Board will take into consideration the outcome of the vote when considering the frequency of future Say-on-Pay votes.

 

The proxy card provides shareholders with four choices (every 1 YEAR, 2 YEARS, 3 YEARS, or ABSTAIN).

 

Vote Required for Approval

 

The frequency option that receives the most votes from the holders of the shares of Common Stock represented at the Annual Meeting in person or proxy and entitled to vote will be approved.

 

The Board of Directors recommends that shareholders vote for the option of “3 YEARS” as the preferred frequency of future Say-on-Pay votes.

 

 

REPORT OF THE AUDIT COMMITTEE

 

The Audit Committee of the Board of Directors is comprised of three directors who are independent of the Company and management as required by the Nasdaq corporate governance listing standards and by SEC rules. The Audit Committee operates under a written charter adopted by the Board of Directors.

 

The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management is responsible for the Company’s financial statements and the financial reporting process, including implementing and maintaining effective internal control over financial reporting and for the assessment of, and reporting on, the effectiveness of internal control over financial reporting. The independent auditors are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States.

 

The Audit Committee has reviewed and discussed with management and the independent auditors the Company’s audited financial statements for the year ended December 31, 2024, and discussed with management the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, including a discussion of the reasonableness of significant judgments and the clarity of disclosures in the financial statements. The Audit Committee also reviewed and discussed with management and the independent auditors the disclosures made in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s 2024 Annual Report to Shareholders and its Annual Report on Form 10-K for the year ended December 31, 2024.

 

The Audit Committee has discussed with the independent auditors the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. In addition, the Audit Committee has discussed with the independent auditors the auditor’s independence from the Company and its management. The Audit Committee has received the written disclosures and the letter provided by the independent auditors to the Audit Committee as required by applicable requirements of the PCAOB regarding the independent auditor’s communications with the Audit Committee concerning independence, and has considered the compatibility of non-audit services with the auditor’s independence.

 

The Audit Committee discussed with the Company’s independent auditors the overall scope and plans for their integrated audit. The Audit Committee meets with the independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls and the overall quality of the Company’s financial reporting.

 

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited financial statements for the year ended December 31, 2024 be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for filing with the SEC.

 

Audit Committee

Scott A. Gabbard, Chair

Joseph A. Marino 

Michael C. Zipoy

 

 

OTHER MATTERS

 

The Board of Directors knows of no other matters to be brought before the Annual Meeting. However, if any other matters are properly brought before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote in accordance with their judgment on these matters.

 

HOUSEHOLDING

 

The SEC has adopted rules that permit companies and intermediaries (such as brokers, banks, trustees and other nominees) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for companies.

 

A number of banks, brokers, trustees and other nominees with account holders who are our shareholders may be householding our proxy materials. A single Notice of Annual Meeting of Shareholders, Proxy Statement and Annual Report to Shareholders will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from one or more of the affected shareholders. Once you have received notice from your bank, broker, trust or other nominee that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If you share an address with another shareholder and receive only one set of proxy materials but would like to request a separate copy of these materials, please contact the Company at Electro-Sensors, Inc. Attn: Investor Relations 6111 Blue Circle Dr Minnetonka MN 55343 or call 952-930-0100 and an additional copy of proxy materials will be promptly delivered to you. If you receive multiple copies of the proxy materials and would prefer to receive a single copy in the future, contact your bank, broker, or other nominee and request householding.

 

SHAREHOLDER PROPOSALS

 

For a shareholder proposal to be considered for inclusion in the Proxy Statement for the 2026 Annual Meeting, the written proposal must be received no later than November 20, 2025 at the Company’s principal executive offices, 6111 Blue Circle Drive, Minnetonka, Minnesota 55343, directed to the attention of the Chairman of the Audit Committee, or the Chairman of the Nominating Committee if the proposal relates to the nomination of a director, in order to be considered by the Board of Directors for inclusion in next year’s Annual Meeting proxy materials under the SEC’s proxy rules.

 

Also, if a shareholder proposal intended to be presented at the next Annual Meeting but not included in the Company’s proxy statement and proxy is received by the Company after February 3, 2026 then management named in the Company’s proxy form for the next Annual Meeting will have discretionary authority to vote shares represented by such proxies on the shareholder proposal, if presented at the meeting, without including information about the proposal in the Company’s proxy material.

 

Any shareholder who intends to solicit proxies in support of director nominees other than the Company’s nominees in accordance with Rule 14a-19 of the Exchange Act must provide the required notice of intent to solicit proxies at the Company’s principal executive offices, 6111 Blue Circle Drive, Minnetonka, Minnesota 55343, directed to the attention of the Nominating Committee, no later than 60 calendar days prior to the first anniversary of the date of the 2025 Annual Meeting (no later than February 23, 2026 for the 2026 Annual Meeting).

 

FORM 10-K

 

A copy of the Company’s Annual Report to the Securities and Exchange Commission on Form 10-K for the fiscal year ended December 31, 2024 has been provided with this Proxy Statement. The Company will furnish to any shareholder, upon written request, any exhibit described in the list accompanying the Form 10-K upon the payment, in advance, of reasonable fees related to the Company’s furnishing such exhibit(s). Any such request should include a representation that the shareholder was the beneficial owner of shares of Electro-Sensors Common Stock on February 27, 2025, the record date for the 2025 Annual Meeting, and should be directed to Mr. David Klenk, Chief Executive Officer, at the Company’s principal address.

 

The foregoing Notice of Annual Meeting and Proxy Statement are sent by order of the Board of Directors.

 

David L. Klenk

President

March 19, 2025

 

 

ELECTRO-SENSORS, INC. 6111 BLUE CIRCLE DRIVE MINNETONKA, MN 55343-9108	VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
	During The Meeting - Go to www.virtualshareholdermeeting.com/ELSE2025 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
	VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
	VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

 

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
		KEEP THIS PORTION FOR YOUR RECORDS
		DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

For All

Withhold All

For All Except

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

The Board of Directors recommends you vote FOR the following:

☐

☐

☐

1.     To elect five directors to serve until the next annual meeting of shareholders:

Nominees

01)   Scott A. Gabbard

02)  David L. Klenk

03)  Joseph A. Marino

04)  Jeffrey D. Peterson

05)  Michael C. Zipoy

The Board of Directors recommends you vote FOR proposals 2, 3, and 4.

For

Against

Abstain

2.     To set the number of directors at five.

☐

☐

☐

3.     To ratify the appointment of Boulay PLLP as Independent Registered Public Accounting Firm for the fiscal year ending December 31, 2025.

☐

☐

☐

4.     Advisory vote on executive compensation (a say-on-pay).

☐

☐

☐

The Board of Directors recommends you vote 3 YEARS on the following proposal:

1 year

2 years

3 years

Abstain

5.

Advisory vote on the frequency of say-on-say.

☐

☐

☐

☐

NOTE:   To transact such other business as may properly come before the meeting or any adjournment.

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

Date

0000659621_1     R1.0.0.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Proxy Statement, Form of Proxy and Annual Report on Form 10-K are available at www.proxyvote.com

 

ELECTRO-SENSORS, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PROXY FOR ANNUAL MEETING April 23, 2025       The undersigned hereby appoints DAVID L. KLENK, with full power of substitution, as his or her Proxy to represent and vote, as designated below, all shares of the Common Stock of Electro-Sensors, Inc. registered in the name of the undersigned at the Annual Meeting of Shareholders of the Company to be held at 2:00 p.m. Central time, on April 23, 2025 at www.virtualshareholdermeeting.com/ELSE2025, and at any adjournment thereof. The undersigned hereby revokes all proxies previously granted with respect to this meeting.      THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN FOR A PARTICULAR PROPOSAL, WILL BE VOTED FOR SUCH PROPOSAL AND FOR THE ELECTION OF EACH DIRECTOR.                       Continued and to be signed on reverse side

 

 

0000659621_2    R1.0.0.2

 

v3.25.1

Cover	12 Months Ended
	Dec. 31, 2024
Cover [Abstract]
Document Type	DEF 14A
Entity Registrant Name	ELECTRO SENSORS, INC.
Entity Central Index Key	0000351789
Amendment Flag	false

v3.25.1

Pay vs Performance Disclosure - USD ($)	12 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure [Line Items]
Pay vs Performance Disclosure, Table	Pay Versus Performance   Year Summary Compensation Table Total for PEO ($) Compensation actually paid to PEO ($) Average Summary compensation table total for non-PEO named executive officers ($) Compensation actually paid to non-PEO named officers ($) Value of Fixed $100 Investment Based on Total Shareholder Return Net Income ($) 2024 316,916 316,916 Not applicable Not applicable 107.44 446,000 2023 336,172 336,172 Not applicable Not applicable 79.00 275,000 2022 327,306 327,306 Not applicable Not applicable 93.97 100,000   The Company’s principal executive officer, David L. Klenk, currently also serves as the Company’s chief financial officer. There are no other Named Executive Officers of the Company. The compensation actually paid to Mr. Klenk in 2024 and 2023 is the same as the amount appearing in the Summary Compensation Table. There were no defined benefit plans or actuarial pension plans covering the principal executive officer in 2024, 2023, or 2022. Mr. Klenk was granted options to purchase 25,000 shares in 2023 with 20% vesting upon the date of the grant and 20% vesting annually thereafter. Mr. Klenk was also granted 35,000 restricted stock units in 2023 which vest 20% on the first anniversary of the grant and 20% annually thereafter. There were no equity awards granted to Mr. Klenk in 2024 and 2022. Mr. Klenk had 5,000 stock options vest each year in 2023 and 2024, and had 7,000 restricted stock units vest during 2024. There were no equity awards from prior years that first vested in either 2023 or 2022.   Analysis of the Information Presented in the Pay Versus Performance Table   We seek to incentivize long-term performance, and therefore do not specifically align our performance measures with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table.
PEO Total Compensation Amount	$ 316,916	$ 336,172	$ 327,306
PEO Actually Paid Compensation Amount	$ 316,916	336,172	327,306
Compensation Actually Paid vs. Total Shareholder Return	Compensation Actually Paid and Cumulative TSR   The following graph shows the relationship of “compensation actually paid” to our principal executive officer in 2024, 2023 and 2022 to the cumulative TSR of Electro-Sensors assuming an initial investment of $100.
Compensation Actually Paid vs. Net Income	Compensation Actually Paid and Net Income   The following graph shows the relationship of “compensation actually paid” to our principal executive officer in 2024, 2023, and 2022 to Electro-Sensors net income.
Total Shareholder Return Amount	$ 107.44	79.00	93.97
Net Income (Loss) Attributable to Parent	$ 446,000	$ 275,000	$ 100,000
PEO Name	David L. Klenk	David L. Klenk	David L. Klenk
Additional 402(v) Disclosure [Text Block]	We seek to incentivize long-term performance, and therefore do not specifically align our performance measures with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table.

v3.25.1

Insider Trading Policies and Procedures	12 Months Ended
	Dec. 31, 2024
Insider Trading Policies and Procedures [Line Items]
Insider Trading Policies and Procedures Adopted [Flag]	true

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