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

To the Stockholders of Digirad Corporation:

You are cordially invited to attend ourthe 2018 annual meeting of stockholders (the "Annual Meeting") of Digirad Corporation (the "Company") on May 1, 2015.Friday, April 27, 2018. We will hold the meeting at 10:1:00 a.m.p.m. Eastern Daylight Time at our headquarters at 1048 Industrial Court, Suwanee, Georgia 30024.

In connection with the annual meeting,Annual Meeting, we have prepared a proxy statementProxy Statement setting out detailed information about the matters that will be covered at the meeting. We will mail our proxy statement,Proxy Statement, along with a proxy card, on or about March 27, 201522, 2018 to our stockholders of record as of the close of business on March 16, 2015.15, 2018. These materials and our Annual Report on Form 10-K for the year ended December 31, 20142017 are also available electronically at our corporate website at www.digirad.com.

Our Board of Directors has fixed the close of business on March 16, 201515, 2018 as the record date for the determination of stockholders entitled to notice of and to vote at our annual meetingAnnual Meeting and at any adjournment(s), postponement(s) or other delay(s) thereof. Voting on the matters to be considered at the annual meetingAnnual Meeting can be done (1) by signing and dating the enclosed proxy card and returning it in the enclosed postage-paid envelope or (2) in person by ballot at the annual meeting.Annual Meeting. Important information about attending the annual meetingAnnual Meeting in person is included in the proxy statement.

The matters that will be considered at the annual meetingAnnual Meeting are:

If you have any questions, or need assistance in voting your shares, please contact the firm assisting us in the solicitation of proxies:

Your vote is extremely important, regardless of how many or how few shares you own. The Board of Directors urges you to vote your shares to elect its nominees. Even ifWhether or not you plan to attend the annual meetingAnnual Meeting in person, please use the enclosed proxy card to ensure that your vote is counted. If you vote in person by ballot at the annual meeting,Annual Meeting, that vote will revoke any prior proxy that you have submitted. 

The Board of Directors of Digirad Corporation, a Delaware corporation (referred to in this Proxy Statement as “Digirad,” “the"Digirad," "the Company,” “we”“our”" "we", "our" or “us”"us"), is soliciting proxies from our stockholders in connection with our 2018 Annual Meeting of Stockholders to be held on May 1, 2015April 27, 2018 and at any adjournment(s), postponement(s) or other delay(s) thereof (the “Annual Meeting”"Annual Meeting"). We will hold the meeting at 10:1:00 a.m.p.m. Eastern Daylight Time at our headquarters at 1048 Industrial Court, Suwanee, Georgia 30024.

The accompanying proxy is solicited by the Board of Directors and is revocable by the stockholder at any time before it is voted. This Proxy Statement is being mailed to stockholders of the Company on or about March 27, 201522, 2018 and is accompanied by the Company’s Annual Report on Form 10-K (without exhibits) for the fiscal year ended December 31, 2014.2017 (the "Annual Report").

Who May Vote

Only holders of common stock, par value $0.0001 per share (“("common stock”stock"), outstanding as of the close of business on March 16, 201515, 2018 (the “Record Date”"Record Date") are entitled to receive notice of, and to vote at, the Annual Meeting. As of the Record Date, there were 19,240,945[ ] shares of common stock outstanding and entitled to vote at the Annual Meeting. Each share of common stock is entitled to one vote on all matters. No other class of securities will be entitled to vote at the Annual Meeting. There are no cumulative voting rights.

Voting Requirements

The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, constitute a quorum for the transaction of business at the Annual Meeting. Shares that reflect abstentions and broker non-votes, if any, count as present at the Annual Meeting for the purposes of determining a quorum. A broker non-vote occurs when a bank, broker or other nominee holding shares for a beneficial owner votes on one proposal but does not vote on another proposal because, with respect to such other proposal, the nominee does not have discretionary voting power and has not received instructions from the beneficial owner.

The vote requirement for each matter is as follows:

In the election of directors (Proposal 1), abstentions and broker non-votes, if any, will be disregarded and have no effect on the outcome of the vote. With respect to the ratification of the appointment of our independent registered public accounting firm (Proposal 2), and the advisory (non-binding) Stockholderstockholder approval of named executive officer compensation (Proposal 3), the approval and adoption of the Extended Protective Amendment (Proposal 4), and the approval of the 2018 Incentive Plan (Proposal 5), abstentions will have the same effect as voting against such proposals and broker non-votes, if any, will be disregarded and have no effect on the outcome of the vote. With respect to thevote on Proposal 3. The approval of Proposal 2 is a routine proposal on which a broker or other nominee is generally empowered to vote in the Protective Amendment (Proposal 4), abstentions andabsence of voting instructions from the beneficial owner, so broker non-votes if any, will have the same effect as voting against this proposal.are unlikely to result from Proposal 2.

The Board of Directors’ Voting Recommendations

If you are a stockholder of record as of the Record Date, you may vote (1) by signing and dating the enclosed proxy card and returning it in the enclosed postage-paid envelope or (2) in person by ballot at the Annual Meeting. If you hold your shares of common stock in a brokerage account or by a bank or other nominee, you must follow the voting procedures provided by your broker, bank or other nominee, which instructions will be included with your proxy materials.

If You Plan to Attend the Annual Meeting

Attendance at the Annual Meeting will be limited to stockholders and the Company’s invited guests. Each stockholder may be asked to present valid picture identification, such as a driver’s license or passport. Stockholders holding shares of common stock in brokerage accounts or through a bank or other nominee may be required to show a brokerage statement or account statement reflecting stock ownership. Cameras, recording devices and other electronic devices will not be permitted at the Annual Meeting. You may contact Jeffry Keyes at (800) 947-6134 for directions to the Annual Meeting.

If you are a stockholder of record as of the Record Date, you may vote your shares of common stock in person by ballot at the Annual Meeting. If you hold your shares of common stock in a stock brokerage account or through a bank or other nominee, you will not be able to vote in person at the Annual Meeting unless you have previously requested and obtained a “legal proxy”"legal proxy" from your broker, bank or other nominee and present it at the Annual Meeting.

You may revoke your proxy by submitting a new proxy with a later date or by notifying our Corporate Secretary in writing at 1048 Industrial Court, Suwanee, Georgia 30024. If you attend the Annual Meeting in person and vote by ballot, any previously submitted proxy will be revoked.

We will solicit proxies and will bear the entire cost of our solicitation, including the preparation, assembly, printing and mailing of this Proxy Statement and any additional materials furnished to our stockholders. We have retained InvestorCom, Inc. (“InvestorCom”) to assist us in the solicitation of proxies, as described in “General-Cost"General-Cost of Solicitation”Solicitation" below. The initial solicitation of proxies by mail may be supplemented by telephone, fax, e-mail, internet and personal solicitation by our directors, officers or other regular employees. No additional compensation for soliciting proxies will be paid to our directors, officers or other regular employees for their proxy solicitation efforts. Fees paid to InvestorCom, Inc. are describedescribed in “General-Cost"General-Cost of Solicitation”Solicitation" below.

If you hold your shares of common stock in more than one account, you will receive a proxy card for each account. To ensure that all of your shares of shares of common stock are voted, please vote using a proxy card for each account that you own. It is important that you vote all of your shares of common stock.

If you have any questions, or need assistance in voting your shares, please contact the firm assisting us in the solicitation of proxies:

The current number of directors on our Board of Directors is six.seven. Under our bylaws, the number of directors on our Board of Directors will not be less than five, nor more than nine and is fixed, and may be increased or decreased by resolution of the Board.

In evaluating director nominees, the corporate governance committee of our Board of Directors considers the appropriate size of the Board of Directors, as well as the qualities and skills of individual candidates. Factors consideringconsidered include the following:

The corporate governance committee’s goal is to assemble a Board of Directors that brings the Company a diversity of perspectives and skills derived from the factors considered above. The corporate governance committee also considers candidates with relevant non-business experience and training.

Our Board of Directors believes that it is necessary for each of our directors to possess many qualities and skills. When searching for new candidates, the corporate governance committee considers the evolving needs of the Board of Directors and searches for candidates that fill any current or anticipated future gap. Our Board of Directors also believes that all directors must possess a considerable amount of business management (such as experience as a chief executive or chief financial officer) and educational experience. The corporate governance committee first considers a candidate’s management experience and then considers issues of judgment, background, stature, conflicts of interest, integrity, ethics and commitment to the goal of maximizing stockholder value when considering director candidates. The corporate governance committee also focuses on issues of diversity, such as diversity of gender, race and national origin, education, professional experience and differences in viewpoints and skills. The corporate governance committee does not have a formal policy with respect to diversity; however, our Board of Directors and the corporate governance committee believe that it is essential that the directors represent diverse viewpoints. In considering candidates for our Board of Directors, the corporate governance committee considers the entirety of each candidate’s credentials in the context of these standards. With respect to the nomination of continuing directors for re-election, the individual’s contributions to the Board of Directors are also considered.

Other than the foregoing background factors that are considered in selecting director candidates, there are no stated minimum qualifications for director nominees, although the corporate governance committee may also consider such other facts as it may deem are in the best interests of Digirad and our stockholders. The corporate governance committee does believe it appropriate for at least one, and preferably several, members of our Board of Directors to meet the criteria for an “audit"audit committee financial expert”expert" as defined by the rules of the Securities and Exchange Commission (the “SEC”"SEC"), and that a majority of the members of our Board of Directors meet the definition of an “independent director” under the listing standards of the NASDAQ Stock Market. At this time, the corporate governance committee also believes it appropriate for our Chief Executive Officer to serve as a member of our Board of Directors.

The corporate governance committee identifies nominees for director by first evaluating the current members of our Board of Directors willing to continue their service on the Board of Directors. Current members with qualifications and skills that are consistent with the corporate governance committee’s criteria for board service on the Board of Directors and who are willing to continue their service are considered for re-nomination, balancing the value of continuity of service by existing members of our Board of Directors with that of obtaining new perspectives. If any member of our Board of Directors does not wish to continue his or her service or if our Board of Directors decides not to re-nominate a member for re-election, the corporate governance committee identifies the desired skills and experience of a new nominee in light of the criteria above. The corporate governance committee generally polls our Board of Directors and members of management for their recommendations regarding potential new nominees. The corporate governance committee may also review the composition and qualification of the boards of directors of our competitors, and may seek input from our stockholders, industry experts or analysts. The corporate governance committee reviews the qualifications, experience and background of the candidates.

Our Board of Directors has adopteddoes not have a policy on term limit policy limiting non-employee directors to no more than 10 years of service on the Board of Directors.limits.

Our Board of Directors adopted a board committee rotation policy pursuant to which the corporate governance committee will consider our Board of Directors’ preference for rotating committee chairs and committee members at no longer than five year intervals, including the chairman of the Board of Directors.

The names of our executive officers, their ages, their positions with Digirad, and other biographical information as of March 16, 2015,15, 2018, are set forth below. There are no family relationships among any of our directors or executive officers.

The following table sets forth information as of March 16, 201515, 2018 regarding the beneficial ownership of our common stock by (i) each person we know to be the beneficial owner of 5% or more of our common stock, (ii) each of our current named executive officers, (iii) each of our directors, and (iv) all of our current executive officers and directors as a group. Information with respect to beneficial ownership has been furnished by each director, executive officer or 5% or more stockholder, as the case may be. The address for all executive officers and directors is c/o Digirad Corporation, 1048 Industrial Court, Suwanee, Georgia 30024.

Percentage of beneficial ownership is calculated based on 19,240,945[ ] shares of common stock outstanding as of March 16, 2015.15, 2018. Beneficial ownership is determined in accordance with the rules of the SEC, which generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and includes shares of our common stock issuable pursuant to the exercise of stock options, warrants or other securities that are immediately exercisable or convertible or exercisable or convertible within 60 days of March 16, 2015.15, 2018. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them.

Our Board of Directors currently consists of sixseven members. Each director elected at the Annual Meeting will serve until the next2019 annual meeting of Stockholdersstockholders and until his successor is duly elected and qualified.

Upon the recommendation of the corporate governance committee, our Board of Directors has nominated each of the following sixseven persons to be elected to serve until the next2019 annual meeting of Stockholdersstockholders and until his successor is duly elected and qualified. Each of the nominees (i) currently serves on our Board of Directors (ii) has consented to being named in this Proxy Statement and (iii) has agreed to serve as a director if elected. As of the date of this Proxy Statement, our Board of Directors is not aware of any nominee who is unable or will decline to serve as a director.

The sixseven nominees standing for election who receive the greatest number of votes cast at the 2015 annual meetingAnnual Meeting will be elected as Directors.

Set forth below are descriptions of the backgrounds of each nominee and their principal occupations for at least the past five years and their public-company directorships as of the Record Date. There are no family relationships among any of our directors or executive officers. All ages are as of March 16, 2015.15, 2018.

In addition to the information presented below regarding each nominee’s specific experience, qualifications, attributes and skills that led our Board of Directors to the conclusion that he should serve as a director, we also believe that all of our director nominees have a reputation for integrity, honesty and adherence to high ethical standards. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to Digirad and our Board of Directors.

Committees: Compensation, Strategic AdvisoryNone

Mr. Eberwein has over 23 years of Wall Street experience and is the Founder and CEO of Lone Star Value Management, LLC an("LSVM"), a U.S. registered investment firm.firm managing several affiliated funds and/or accounts. Prior to founding Lone Star ValueLSVM in January 2013, Mr. Eberwein was a Portfolio Manager at Soros Fund Management from January 2009 to December 2011 and Viking Global Investors from March 2005 to September 2008. Mr. Eberwein is Chairman of the Board of threefive public companies: Digirad Corporation, Crossroads Systems, Inc., a data storage company, and ATRM Holdings, Inc., a modular building company, Hudson Global, Inc., a global recruitment company, Ameri Holdings, Inc., an IT services company. In addition, Mr. Eberwein also serves on the Board of Hudson Global,Novation Companies, Inc., a global recruitment company where he chairs the Corporate Governance and Nominating Committee.specialty finance company. Mr. Eberwein served on the Board of Crossroad Systems, Inc. from April 2013 until May 2016, The Goldfield Corporation from May 2012 until May 2013, On Track Innovations Ltd. from December 2012 until March 2014, and NTS, Inc. from December 2012 until its sale to a private equity firm was completed in June 2014, and On Track Innovations Ltd. from December 2012 until March 2014. Mr. Eberwein served on the Board of Hope for New York, a 501(c)3 organization dedicated to serving the poor in New York City from 2011 until 2014 where he was Treasurer and on the Executive Committee. Mr. Eberwein earned an MBAM.B.A. from The Wharton School, University of Pennsylvania and a BBAB.B.A. with High Honors from The University of Texas at Austin.

Mr. Eberwein brings significant experience in investing, financial management and general financial acumen to our Board of Directors. Throughout his career, Mr. Eberwein has been part of and overseen numerous business transactions, as well as helped

Mr. Molchan’s full biographical information is provided above under the heading “CORPORATE"CORPORATE GOVERNANCE AND ETHICS - Executive Officers.”"

Committees: Audit, Compensation, Corporate Governance, Strategic Advisory (Chairman)

Mr. Climaco an attorney by training, is the Chief Executive Officer of CNS Pharmaceuticals, Inc., a consultantcompany developing treatments for brain and central nervous system cancers. From June 2015 to July 2017, Mr. Climaco served as the Executive Vice President of Perma-Fix Medical, a variety of healthcare companies. He is currently a board member at Digirad, a post he has held since December 2012. He also is a board membermajority-owned Polish subsidiary of Perma-Fix Environmental Services, Inc. (PESI), an environmental solutions business,where he also served as a postdirector from October 2013 to July 2017. At Perma-Fix Medical, he has held since October 2013.managed the development of a method to produce Technetium-99. Mr. Climaco currently serves on the board of directors of Moleculin Biotech, Inc., a preclinical and clinical-stage pharmaceutical company focused on the development of anti-cancer drug candidates; and Birner Dental Management Services, Inc., a management company for dental practices in Colorado, New Mexico and Arizona. Mr. Climaco was appointed to our Board of Directors in December 2012. Previously, he was a board member of PDI, Inc. (PDII), an outsourced salescommercial services company for pharmaceutical, biotechnology and marketing company,healthcare companies, a post he held from December 2013 to October 2014. From April 2012 to April 2013, he was a board member of InfuSystem Holdings, Inc. (INFU), a medical device and services company.supplier of oncology infusion services.

From 2003 to 2012, he was the President and Chief Executive Officer, as well as member of the board of directors, of Axial Biotech, Inc., a venture-backed molecular diagnostics company specializing in spine disorders, which he co-founded in 2003.

Under Mr. Climaco’s leadership, and through partnerships he created with companies including Medtronic, Johnson & Johnson and Smith & Nephew, Axial successfully developed and commercialized ScoliScore, the first molecular prognostic test in the orthopaedic industry.

Prior to founding Axial Biotech, Mr. Climaco practiced law for 6 years with Fabian & Clendenin in Salt Lake City from 1997 to 2003. Mr. Climaco holds a Bachelor of ArtsB.A. in Philosophy, cum laude, from Middlebury College and a Juris Doctorate from the University of California, Hastings College of Law.

We believe that Mr. Climaco has a demonstrated record of consistently applying his extensive experience and sound business judgment to both rescue and create shareholderstockholder value across a range of industries. Mr. Climaco has advised management teams on M&A opportunities, restructurings, asset divestments, equity financings and strategic partnerships, all qualities that we believe are valuable to the Board of Directors. We believe that Mr. Climaco brings to our Board of Directors significant executive experience relevant to a healthcare services company, including raising capital, engineering strategic alliances, building executive teams and managing complex business operations and legal strategies.

Committees: Corporate Governance, Strategic Advisory

Mr. Gillman is the headExecutive Managing Director of the IDWR Multi-Family Office, a multi-family investment firm, a position he has held since 2013.  The IDWR employs a team of analysts with expertise in finding publicly traded companies that require operational enhancement and an improvement in corporate capital allocation. From 2001 to 2013, Mr. Gillman was a portfolio manager of certain family office investment portfolios at Nadel and Gussman, LLC. Prior to his employment at Nadel and Gussman, Mr. Gillman worked in the investment industry and as a strategic management consultant at McKinsey & Company.  

Mr. Gillman’s mandate is Constructive Value Creation. His team has had many years of experience working together to invest family-office capital into publicly traded companies. Often these investments have come alongside changes in the board of directors of these companies. His organization evolved from experience in the 1990’s designing operational turnarounds of U.S. and international companies while at McKinsey & Company. Mr. Gillman’s clients at McKinsey benefited from specific measures taken to improve working-capital turnover and to grow those operating units that had the highest return on invested capital while shrinking those operating units that had negative returns on invested capital. His enhancements to Boards of Directors generally are endorsed by multiple proxy advisory services.

Mr. Gillman was appointed to our Board of Directors in 2012.  In addition, Mr. Gillman currently serves on the boardboards of directors of two publicly-traded companies: PMFG,Novation Companies, Inc., a provider of highly engineered systems,specialty finance company, a post he has held since January 2016, Solitron Devices, Inc., a solid-state semiconductor components company, a post he has held since July 2014; and On Track Innovations, Inc.,2016, Hill International, a pioneer in near field communications,construction consulting service company, a post he has held since December 2012.September 2016, and Points International, an online travel company, a post he has held since May 2017. Mr. Gillman previously served as a director of a number of public companies:Hooper Holmes, InfuSystems Holdings, Inc., On Track Innovations Ltd, MRV Communications, Inc., Aetrium, Inc. from January 2013 to March 2013; InfuSystems Holdings from April 2012 to March 2013; MRV Communications from October 2009 to October 2012;, CompuMed, Inc., the Stephan Company, PFMG, Inc., Littlefield Corporation from May 2008 to February 2013;Corp., and CompuMed, Inc. from February 2008 to March 2011.Datawatch Corporation.

We believe that Mr. Gillman brings significant experience as a successful portfolio manager to our Board of Directors, and in particular, experience implementing difficult corporate turnarounds, including M&A experience and divestiture experience. These experiences allowsallow him to offer unique insight into our operations for the purpose of guiding the Company to the right short-term and long-term strategic decisions designed to maximize shareholderstockholder value.

Committees: Audit (Chairman), Corporate Governance

John W. Sayward currently servesis a career health care and pharmaceutical executive. Most recently, he served as the acting Chief Executive Officer for Hera Therapeutics Inc., a position he has held since Januarythrough June 2015. Prior to this, Mr. Sayward served as the Chief Operating Officer and Chief Financial Officer of Hera Therapeutics Inc. since September 2014. Previously, he was Partner at Nippon Heart Hospital, LLC from September 2005 to January 2007, which was formed to build and manage cardiovascular care hospitals in Japan. From 2002 to 2005, Mr. Sayward was the Executive Vice President and CFO of LMA North America Inc., a medical device business focused on patient airway management. From 1996 to 2001, Mr. Sayward served as the Executive Vice President of Finance and CFO and Treasurer at SICOR Inc., and was elected to their Board of Directors in 1998. Previous to the above, he served in various management positions with Baxter Healthcare. He received a B.A. in History from Northwestern University in 1973 and a Master of Management from the Kellogg School of Management at Northwestern University in 1975.

We believe that Mr. Sayward’s past experiences in the health care industry, both in medical devices and pharmaceuticals, makes him well qualified to serve on our Board of Directors. Further, Mr. Sayward’s depth and breadth of positions and experiences also makes him well qualified to serve as a financial expert and audit committee chairman.

The following is the report of the audit committee with respect to Digirad’s audited financial statements for the year ended December 31, 2014.2017.

The purpose of the audit committee is to assist the Board of Directors in its general oversight of Digirad’s financial reporting, internal controls and audit functions. The audit committee does not itself prepare financial statements or perform audits, and its members are not auditors or certifiers of the Company’s financial statements. In fulfilling its oversight responsibility of appointing and reviewing the services performed by the Company’s independent registered public accounting firm, the audit committee carefully reviews the policies and procedures for the engagement of the independent registered public accounting firm, including the scope of the audit, audit fees, auditor independence matters and the extent to which the independent registered public accounting firm may be retained to perform non-audit related services.

The Company maintains an auditor independence policy that bans its auditors from performing non-financial consulting services, such as information technology consulting and internal audit services. This policy mandates that the audit committee approve the audit and non-audit services and related budget in advance, and that the audit committee be provided with quarterly reporting on actual spending. This policy also mandates that the Company may not enter into auditor engagements for non-audit services without the audit committee’s express approval. The audit committee charter describes in greater detail the full responsibilities of the audit committee and is available on our website at www.digirad.com. The audit committee is comprised solely of independent directors as defined by Rule 5605(a)(2) of the NASDAQ listing standards.

The audit committee met on fivefour occasions in 2014.2017. The audit committee met privately in executive session with Ernst & YoungBDO USA, LLP (“EY”("BDO") as part of each regular meeting and held private meetings with the Chief Financial Officer and other officers of Digirad throughout the year.

In accordance with the audit committee charter and the requirements of law, the audit committee pre-approves all services to be provided by Digirad’s independent auditors, EY.BDO. Pre-approval is required for audit services, audit-related services, tax services and other services.

The audit committee has reviewed and discussed the audited financial statements for the year ended December 31, 20142017 with the Company’s management and EY,BDO, the Company’s independent registered public accounting firm. The audit committee has also discussed with EYBDO the matters required to be discussed by Auditing Standard No. 16, “Communications1301, "Communications with Audit Committees”Committees" issued by the Public Company Accounting Oversight Board (“PCAOB”("PCAOB"). The audit committee also has received and reviewed the written disclosures and the letter from EYBDO required by applicable requirements of the PCAOB regarding EY’sBDO’s communications with the audit committee concerning independence, and has discussed with EYBDO its independence from the Company.

Based on the reviews and discussions referred to above, the audit committee recommended to the Board of Directors that the financial statements referred to above be included in the Annual Report.Report for filing with the SEC.

The audit committee of our Board of Directors is responsible for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm. The audit committee is considering Ernst & YoungBDO USA, LLP ("BDO") to serve as the Company’sCompany's independent registered public accounting firm. Ernst & Young LLPBDO has audited our financial statements since the fiscal year ended December 31, 1996.2015. While it is not required to do so, the audit committee is submitting to shareholdersstockholders for ratification the selection of Ernst & Young LLPBDO as the Company’s independent registered public accounting firm for the year ending December 31, 2015.2018. Notwithstanding ratification of the selection of Ernst & Young LLPBDO to serve as the Company’s independent registered public accounting firm, the audit committee will be under no obligation to select Ernst & Young LLPBDO as the Company’s independent registered public accounting firm.

Representatives of Ernst & Young LLPBDO will be present atattend the Annual Meeting, will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

In connection with the audit of the 20142017 financial statements, we entered into an engagement agreement with Ernst & Young LLPBDO which sets forth the terms by which Ernst & Young LLPBDO has performed audit and related professional services for us.

The following table setstables set forth the aggregate accounting fees paid by us to BDO for the past two fiscal years ended December 31, 20142017 and 2013. 2016.

The below fees were paid to the firm Ernst & Young LLP; noLLP ("Ernst & Young"), the Company's previous independent registered public accounting firm, for the fiscal years ended December 31, 2017 and 2016.

The audit committee is granted the authority and responsibility under its charter to pre-approve all audit and non-audit services provided to the Company by its independent registered public accounting firm, including specific approval of internal control and tax-related services. In exercising this responsibility, the audit committee considers whether the provision of each professional accounting service is compatible with maintaining the audit firm’s independence.

Pre-approvals are detailed as to the category or professional service and when appropriate are subject to budgetary limits. Company management and the independent registered public accounting firm periodically report to the audit committee regarding the scope and fees for professional services provided under the pre-approval.

With respect to the professional services rendered, the audit committee had determined that the rendering of all non-audit services by Ernst & Young LLP wasour independent registered public accounting firm were compatible with maintaining the auditor’s independence and had pre-approved all such services.

The compensation committee consists of Messrs. Climaco,Angelis, Cunnion and Eberwein.Sayward. Each member of the compensation committee is a “non-employee director”"non-employee director" within the meaning of Rule 16b-3 under the Securities and Exchange Act, of 1934, an “outside director”"outside director" within the meaning of Section 162(m) of the Internal Revenue Code, and satisfies the independence requirements imposed by the NASDAQ GlobalStock Market.

The compensation committee is responsible for discharging the responsibilities of the Board of Directors with respect to the compensation of our executive officers. The compensation committee recommends overall compensation of our executive officers to the Board of Directors. The Board of Directors approves all compensation of our executive officers. The compensation committee also periodically reviews director compensation.

The charter of the compensation committee permits the compensation committee to engage outside consultants and to consult with our human resources department when appropriate to assist in carrying out its responsibilities.

Our executive compensation consists of the following elements:

Based on the factors discussed above, 20142017 base salaries were as follows:

Mr. Molchan’s 20142017 base salary was set at $300,000,$415,200, which represented no changea $69,200 increase from July 2013. Inhis last adjustment in January 2015, as part of2016. Mr. Molchan’s accomplishments as President and Chief Executive officer of Digirad, theMolchan's compensation committee determined to increase Mr. Molchan’s base salary to $321,000.was not adjusted for 2018.

Mr. Keyes’ 20142017 base salary was set at $235,000,$331,740, which represented noa $55,290 increase from 2013. Inhis last adjustment in January 2015, as part of2016. Mr. Keyes’ accomplishments as Chief Financial Officer of Digirad, theKeyes' compensation committee determined to increase Mr. Keyes’ base salary to $251,450.was not adjusted for 2018.

Mr. Lott’s 20142017 base salary was set at $235,000,$260,000, which represented noa $10,000 increase from 2013.his last adjustment in January 2016. Mr. Lott's compensation was not adjusted for 2018.

For each of Messrs. Molchan and Keyes, and Lott, the 2014 executive incentive bonus plan2017 Executive Incentive Plan (the "2017 Plan") was based 75% on achievement of a 20142017 consolidated EBITDA target. For Mr. Lott, the 2017 Plan was based on achievement of a 2017 consolidated EBITDA target and 25%a 2017 EBITDA target associated with the Diagnostic Imaging and Medical Device Sales & Services business units of the Company. For Mr. Shirley, the 2017 Plan was based on the achievement of personal management objectives, as determined bya 2017 consolidated EBITDA target and a 2017 EBITDA target associated with the Board, which include certain targets related toDiagnostic Services business unit of the Company's strategic objectives.Company. For Mr. Debeauvernet, the 2017 Plan was based on achievement of a 2017 consolidated EBITDA target and a 2017 EBITDA target associated with the Mobile Healthcare business unit of the Company. In order to be eligible for a minimum of 50%25% of the target bonus payout under the Executive Incentive2017 Plan, the executives must achieve the minimum thresholdsthreshold objectives of 95%90% of a consolidated revenue objective, 95% of atarget for consolidated EBITDA objective, and 90%(calculated before impact of a consolidated free cash flow objective neededbonuses), subject to be achieved. For eachother provisions of Messrs. Molchan, Keyes and Lott, the maximum bonus that could be earned is 150%2017 Plan. Each executive may earn up to 175% of their respective target bonus based on achievement of a consolidatedtheir respective EBITDA measure,targets, with EBITDA and associated cash bonus paid on a linear basis between 95%90% and 121.25% of consolidatedtheir respective EBITDA and 122% of consolidated EBITDA.

The eligible target bonus amounts under the 2017 Plan and the bonuses paid under the 2014 executive incentiveactual bonus planpayouts were as follows.

In establishing and reviewing our overall compensation program, the Compensation Committeecompensation committee considers whether the program and its various elements encourage or motivate our executives or other employees to take excessive risks. We believe that our

WeWhen granted, we have elected to award non-qualified stock options instead of incentive stock options to all our employees, directors and consultants to allow the corporation to take advantage of the more favorable tax advantages associated with non-qualified stock options.

The following table shows for the fiscal year ended December 31, 2014,2017, certain information regarding option exercises and stock vested during the last fiscal year with respect to the named executive officers:

None of our named executive officers participates in or has account balances in qualified or non-qualified defined benefit plans sponsored by us.

None of our named executive officers participates in or has account balances in non-qualified defined contribution plans or other deferred compensation plans maintained by us.

We entered into an employment agreement with Mr. Molchan on May 1, 2007, as amended on August 7, 2010. In connection with the determinationPursuant to change the Company’s business strategy, our Board of Directors appointed Matthew G. Molchan, who has served as President, Digirad Imaging Solutions, Inc. since January 2012 to serve as President of Digirad Corporation, effective February 27, 2013, and subsequently, to Chief Executive Officer on July 1, 2013. Pursuant that employment agreement, Mr. Molchan would receive six months of severance at his then current salary, and any accrued but unpaid performance bonus.

If Mr. Molchan would have been terminated without cause at December 31, 20142017 or if Mr. Molchan would have resigned for good reason, Mr. Molchan would have been entitled to receive (i) severance payments of $150,000$207,600 and (ii) a prorated amount of any earned performance bonus payable at the time of his termination date.

On March 4, 2013, we entered into an executive employment agreement with Mr. Keyes pursuant to which he would receive six months of severance at his current salary at the time of the termination, six months of COBRA coverage and full acceleration of his outstanding equity instruments in the event that he is terminated, he no longer reports to the Company’s Chief Executive Officer or he is required to move more than 50 miles from Poway, California.

Assuming thethat Mr. Keyes’ employment agreement was effective December 31, 20142017 and he was terminated without cause or he left for good reason on that date, he would have been entitled to receive (i) severance payments of $117,500,$165,870, (ii) no COBRA payments based on his current healthcare selections and (iii) accelerated stock option and restricted stock unit vesting withresulting in a net gain of $88,016, which reflects the excess of the fair market value of $214,307.the underlying shares over the exercise price of all unvested options and the fair market value of the shares underlying unvested restricted stock units as of December 31, 2017.

On December 31, 2010, the Company entered into a severance agreement with Virgil J. Lott. In the event his employment with the Company is terminated without cause (as defined below), he would receive a severance payment in amount equal to six months of his base salary.

Assuming that Mr. Lott’s employment was terminated without cause as of December 31, 2014,2017, he would have been entitled to receive severance payments of $117,500.$130,000.

Under our executive employment agreements “Cause”"Cause" generally includes the occurrence of any of the following events: (1) willful misconduct or gross negligence in the performance of duties under the agreement; willful failure or refusal to perform in the usual manner at the usual time those duties which regularly and routinely performs in connection with the business of the Company or such other duties reasonably related to the capacity in which such executive is employed hereunder which may be assigned to such executive by the Board of Directors, if such failure or refusal has not been substantially cured to the satisfaction of the Board of Directors within thirty (30) days after written notice of such failure or refusal has been given by the Company to such executive; performance of any material action when specifically and reasonably instructed not to do so by the Board of Directors; engaging or in any manner participating in any activity which is directly competitive with or intentionally injurious to the Company; commission of any fraud, or use or appropriation for his personal use or benefit of any funds, properties or opportunities of the Company not authorized by the Board of Directors to be so used or appropriated; conviction of any felony involving moral turpitude; or willful or grossly negligent violation of the Ethics Code.  

The equity agreements of our named executive officers provide that, in case of a change of control of Digirad, all equity instruments then outstanding but neither assumed nor replaced by the successor entity shall vest immediately upon the change of control event. Further, if an executive’s employment is terminated without cause within twelve (12) months of the change of control, all equity instruments then outstanding, either assumed or replaced, shall become fully vested at the time of termination. With respect to Mr. Keyes’s employment agreement, should Mr. Keyes be terminated without cause or leave for good reason, all of Mr. Keyes’s then outstanding equity instruments will immediately vest. As of December 31, 2014,2017, the value of the equity instruments of our named executive officers that would accelerate upon (i) termination without cause within twelve (12) months of a change of control in which stock options and restricted stock units are assumed or replaced by the successor entity, (ii) a change of control in which the outstanding stock options and restricted stock units are neither assumed or replaced by the successor entity, or (iii) in the case of Mr. Keyes, termination without cause or left for good reason would be as follows based on the difference between the closing price on the last trading day of the year of $4.36$2.58 per share and the exercise price of the respective options:options, and with regard to restricted stock units, based solely on the closing price on the last trading day of the year of $2.58:

Non-employee members of our Board of Directors are paid an annual cash retainer for their service, with additional compensation for being the chairperson of the Board, serving on a committee of the Board of Directors and chairing a committee of the Board of Directors. Payments are made quarterly, in advance.

The compensation paid to the members of the Board of Directors is indicated in the chart below: