DEF 14A of Power Solutions International, Inc.
Filed Jun 14, 2024 · FY20230001193125-24-161667
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The Board has nominated the seven individuals listed below to stand for election to the Board for a one-year term ending at the annual meeting of stockholders in 2025 or until their successors, if any, are elected or appointed. The Company’s Certificate of Incorporation and Bylaws provide for the annual election of directors. Each director must receive the affirmative vote of a majority of the votes cast to be elected (i.e., the number of shares voted “FOR” a director nominee must exceed the number of votes cast “AGAINST” that nominee). Unless contrary instructions are given, the shares represented by your proxy will be voted “FOR” the election of all director nominees. If any nominee becomes unavailable for election as a result of an unexpected occurrence, your shares will be voted for the election of a substitute nominee proposed by the Company. Each person nominated for election has agreed to serve if elected. The Company’s management has no reason to believe that any nominee will be unable to serve. The following table and biographical summaries set forth, with respect to each nominee for director, his committee membership, his age, the year in which he first became a director of the Company, and whether or not Weichai America Corp. (“Weichai America”), a wholly owned subsidiary of Weichai Power Co., Ltd. (“Weichai Power”) (herein together referred to as “Weichai”) designated such director to serve on the Board pursuant to the Investor Rights Agreement, entered into by the Company and Weichai (as discussed in the “Related Person Transactions” section in this proxy statement).
ELECTION OF DIRECTORS
| Name | Position | Committee | Age | Director Since | Weichai Designee | | Jiwen Zhang | Chairman of the Board | Strategic (Chair) | 53 | 2023 | Yes | | Kui Jiang | Director | Compensation; Nominating (Chair) | 60 | 2024 | Yes | | Frank P. Simpkins | Director | Audit (Chair); Nominating; Strategic | 61 | 2017 | No | | Kenneth W. Landini | Director | Audit | 67 | 2001 | No | | Hong He | Director | Audit; Compensation (Chair) | 55 | 2019 | No | | Gengsheng Zhang | Director | Nominating; Strategic | 56 | 2022 | Yes | | Fuzhang Yu | Director | Compensation | 37 | 2023 | Yes |
ELECTION OF DIRECTORS
Below are the biographies for our director nominees, including information concerning their specific experiences, qualifications, attributes and skills that led the Board to conclude that the nominee should serve on the Board as of May 31, 2024:
DIRECTORS
DIRECTORS
DIRECTORS
| Jiwen Zhang | Age: 53 | Chairman of the Board PSI Committee: | | | | • Strategic (Chair) |
DIRECTORS
Biography: Mr. Jiwen Zhang has served as a Director of the Company and Chairman of the Board since March 29, 2023. Mr. Jiwen Zhang also serves as the Chair of the Strategic Committee. Mr. Jiwen Zhang has served as Chief Executive Officer (“CEO”) of Weichai America, which focuses on researching and developing a full line of off-road natural gas engines and engine components, since February 2023. Weichai America is a wholly owned subsidiary of Weichai Power, a publicly traded company on the Hong Kong Stock Exchange and the Shenzhen Stock Exchange. Mr. Jiwen Zhang has over twenty years of experience in the engine industry. From January 2013 to December 2022, Mr. Jiwen Zhang served as President of Kohler Power Systems, a multinational company located in Wisconsin, which specialized in diesel and gaseous generators, responsible for oversight of the global business operations. Prior to this, Mr. Jiwen Zhang served as Managing Director Commercial of Fiat Powertrain APAC from September 2010 to December 2012, Vice President of Volvo Penta Region Asia from May 2002 to August 2010, and Customer Service General Manager of a Caterpillar distributor Lei Shing Hong machinery from September 1994 to April 2002. Mr. Jiwen Zhang earned his Executive Master of Business Administration from University of Texas at Arlington and Bachelor’s degree of Mechanical & Electrical Engineering from University of Science and Technology of China. Mr. Jiwen Zhang serves on the Board as a Weichai designee. Mr. Jiwen Zhang brings to the Board extensive and effective leadership experience demonstrated through his executive and management roles at leading engine manufacturers.
DIRECTORS
| Kui Jiang | Age: 60 | PSI Committees: | | | | • Compensation | | | | • Nominating (Chair) |
DIRECTORS
Biography: Mr. Jiang has served as a Director since May 23, 2024. Mr. Jiang also serves as the Chair of the Nominating and Governance Committee (“Nominating Committee”) and a member of Compensation Committee. Mr. Jiang previously served as a member of the Board of the Company from 2017 to 2020. Mr. Jiang has served as Senior President of Weichai Power Co., Ltd and the Chairman of the Board of Directors of Weichai America Corp since 2024. Mr. Jiang served as President of Shandong Heavy Industry Group Co., Ltd, a leading automobile and equipment manufacturing group, from 2009 to 2023. Prior to that, Mr. Jiang has held various leadership positions, including Executive Deputy General Manager and Vice Chairman of Weichai Group Holdings Limited; Vice President of Shantui Construction Machinery Co., Ltd.; Chairman of Strong Construction Machinery Co., Ltd.; Chief Engineer and Deputy General Manager of Shantui Import and Export Company; and Deputy General Manager of Shantui Engineering Machinery Co., Ltd. Mr. Jiang has served as a member of the Supervisory Board of KION GROUP AG, a global leader in industrial trucks, related services and supply chain solutions publicly-traded on the Frankfurt Stock Exchange; a member of the Board of Directors of Sinotruck, a truck manufacturer publicly-traded on the Hong Kong Stock Exchange; a member of the Board of Directors of Ballard Power Systems Inc., a company in fuel cell production publicly-traded on NASDAQ; a member of the Board of Hydraulics Drive Technology Beteiligungs GmbH, Chairman of Strong Construction Machinery Co., Ltd.; and a member of the Board of Directors of Weichai Power, a publicly traded company on the Hong Kong Stock Exchange and the Shenzhen Stock Exchange and a leading global designer and manufacturer of diesel engines. Mr. Jiang earned his Master of Business Administration from Wright State University and Bachelor’s degree of Engineering from the Automobile Engineering Department of Tsinghua University. Mr. Jiang serves on the Board as a Weichai designee. Mr. Jiang brings to the Board extensive managerial experience and leadership gained through his executive roles at leading engine manufacturers.
DIRECTORS
| Frank P. Simpkins | Age: 61 | PSI Committees: | | | | • Audit (Chair) | | | | • Nominating | | | | • Strategic |
DIRECTORS
Biography: Mr. Simpkins has served as a Director of the Company since July 13, 2017. Since January 19, 2021, he has been the Chair of the Audit Committee. Mr. Simpkins is also a member of the Nominating Committee and Strategic Committee. Mr. Simpkins has over 25 years of executive management and financial experience. From June 2016 to December 2016, he served as Chief Financial Officer of Emerson Network Power, part of Emerson Electric Co., a publicly-traded company on the New York Stock Exchange (the “NYSE”). From 2006 to 2015, Mr. Simpkins served as Vice President and Chief Financial Officer of Kennametal Inc., a publicly-traded company on the NYSE and a global leader in the design and manufacture of engineered components, advanced materials and cutting tools. Prior to that role, Mr. Simpkins held various positions within Kennametal since 1995. Prior to Kennametal, he worked as a Manager for PricewaterhouseCoopers from 1986 to 1995. Mr. Simpkins serves on the Board of Trustees at Seton Hill University, Greensburg and previously served on the Board of Trustees of Pennsylvania State University, New Kensington. Mr. Simpkins has served on the Advisory Board of Anovion, an advanced battery materials business in North America for synthetic graphite anode materials since September 2022. Mr. Simpkins has been a member of the Board of Directors of EXRO Technologies Inc., a publicly-traded clean energy company on the OTC Markets, since July 2023 and is also the Chair of the Audit Committee and a member of the Nominating Committee. Mr. Simpkins holds a Bachelor of Science degree in Accounting from Pennsylvania State University. Mr. Simpkins qualifies as an “Audit Committee Financial Expert” under applicable SEC regulations and has substantial public-company reporting experience gained from his roles as Chief Financial Officer during his career. Mr. Simpkins brings to the Board significant management experience, as well as his experience as a Chief Financial Officer.
DIRECTORS
| Kenneth W. Landini | Age: 67 | PSI Committee: | | | | • Audit |
DIRECTORS
Biography: Mr. Landini has served as a Director of the Company since 2001 and assisted in the development and growth of the business of the Company since 1985. Mr. Landini is a member of the Audit Committee. From August 7, 2017 to January 19, 2021, Mr. Landini was the Chair of the Compensation Committee. He also served as a member of the Nominating Committee from April 2017 to January 19, 2021. Mr. Landini previously served as the Vice President of Finance for the Company’s subsidiary, Power Great Lakes, Inc., from December 1985 to March 1988 and assisted the Company in establishing distributor relationships and expanding the territories into which the Company provides its power systems. Mr. Landini is a Partner and Co-founder of Landini, Reed & Dawson, P.C., a certified public accounting and consulting firm in southeastern Michigan, which was established in 1988. He holds a Bachelor of Arts degree from Albion College and is a licensed Certified Public Accountant in the state of Michigan. Mr. Landini qualifies as an “Audit Committee Financial Expert” under applicable SEC regulations and has substantial audit experience gained from his tenure as a partner at a certified public accounting and consulting firm. Mr. Landini brings to the Board an in-depth knowledge and understanding of the Company’s business and operations, having served as Vice President of Finance for one of the Company’s subsidiaries.
DIRECTORS
| Hong He | Age: 55 | PSI Committees: | | | | • Audit | | | | • Compensation (Chair) |
DIRECTORS
Biography: Mr. He has served as a Director of the Company since November 14, 2019. Mr. He is a member of the Audit Committee and the Chair of the Compensation Committee. Mr. He has served as Director, Financial Planning & Analysis for CytomX Therapeutics (“CytomX”), a NASDAQ-listed biotechnology company, since February 2021, and previously served as a Consultant to CytomX beginning in February 2020. Previously, Mr. He served as Director of Finance and Reporting for Blackthorn Therapeutics, a clinical-stage biotechnology company, from June 2019 to December 2019. Prior to that, Mr. He served as the Head of Finance at GenapSys, Inc. from 2018 until May 2019. From 2014 until 2018, Mr. He was the finance director of SciClone Pharmaceuticals, Inc., a NASDAQ-listed specialty pharmaceutical company with main operations in China. From January to June 2014, Mr. He served as Vice President of Finance and the Controller of Augmedix, Inc., a privately held technology-enabled medical documentation company. From October 2011 to December 2013, Mr. He was employed as Vice President of Finance at Baidu Leho.com, a private company backed by Baidu, a NASDAQ- listed company. From 2015 to 2020, Mr. He served as a member of the Board of Directors and Audit Committee Chairman of Fuling Global, Inc. a disposable serviceware and kitchenware manufacturer. Mr. He earned his Bachelor of Science degree in Accounting from Beijing University of Technology in July 1992 and his Masters of Business Administration degree from University of Chicago Booth School of Business in December 2006. Mr. He is a U.S. certified management accountant and a China certified public accountant. Mr. He qualifies as an “Audit Committee Financial Expert” under applicable SEC regulations and has substantial public company reporting experience gained from his roles as a financial officer and controller of public companies during his career. Mr. He brings to the Board substantial financial and managerial experience gained through leadership roles at public companies.
DIRECTORS
| Gengsheng Zhang | Age: 56 | PSI Committees: | | | | • Nominating | | | | • Strategic |
DIRECTORS
Biography: Mr. Gengsheng Zhang served as a Director of the Company since September 16, 2022. In addition, he serves as a member of the Nominating Committee and Strategic Committee. Mr. Gengsheng Zhang has served as Director of International Cooperation and Business Synergy Department for Shandong Heavy Industry Group Co., Ltd (“SHIG”), a leading automobile and equipment manufacturing group, since March 2022. Previously, he served as Deputy General Manager of Weichai Group, which owns six business segments of powertrain, intelligent logistics, automotive, construction machinery, luxury yacht, and finance & after-services, from August 2020 to March 2022. Prior to Weichai Group, he served as Assistant General Manager of Weichai Group (and later as Deputy General Manager) and Chairman and CEO of SHIG India Pvt Ltd., a subsidiary of SHIG, from December 2019 to August 2020. Prior to that, he served as Assistant General Manager of Weichai Group and General Manager of Shandong Weichai Import & Export Company, from May 2012 to December 2019. Prior to that, he served as Director of Weichai International Service Department from October 2005 to May 2012. Earlier in his career, Mr. Gengsheng Zhang was employed in various leadership and engineering roles at manufacturing organizations. Mr. Gengsheng Zhang earned a Bachelor of Engineering degree from Shandong Polytechnic University in 1990 and an Executive Master of Business Administration from China-Europe International Business School in 2014. Mr. Gengsheng Zhang serves on the Board as a Weichai designee. Mr. Gengsheng Zhang brings to the Board in-depth management experience in engine manufacturing and engineering.
DIRECTORS
| Fuzhang Yu | Age: 37 | PSI Committees: | | | | • Compensation |
DIRECTORS
Biography: Mr. Yu has served as a director of the Company since July 2023. In addition, Mr. Yu is a member of the Compensation Committee. Mr. Yu has served as Director of the Overseas Finance Department of Weichai Group since May 2023 and Vice Director from January 2023 to May 2023. Prior to that, Mr. Yu served as Chief Financial Official of Shaanxi Hande Axle Co., Ltd, a leading commercial vehicle axle manufacturer in China from February 2021 to January 2023. From February 2019 to February 2021, Mr. Yu served as Chief Financial Officer of Weichai Ballard Co., Ltd (“Weichai Ballard”), a joint venture of Weichai Power and Ballard Power Systems Inc. Prior to his role at Weichai Ballard, Mr. Yu served in various leadership roles in the Finance Department at Weichai Power from January 2009 to February 2019. Mr. Yu earned his Bachelor’s degree in Management from Beijing Forestry University, China in 2009. Mr. Yu is a China certified public accountant. Mr. Yu serves on the Board as a Weichai designee. Mr. Yu brings to the Board extensive accounting experience as well as management experience through his roles at engine manufacturers. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED IN THIS PROXY STATEMENT.
Compensation Committee
| • | making recommendations to the Board regarding director compensation; |
Director Compensation
Director Compensation For 2023, PSI directors generally received the following compensation for their services as members of the Board:
Director Compensation
| • | A cash retainer of $50,000 per year; |
Director Compensation
| • | An additional cash retainer of $25,000 per year to the Chairman of the Board and the Chair of the Audit Committee; |
Director Compensation
| • | An additional cash retainer of $10,000 per year to the Chair of the Compensation Committee; |
Director Compensation
| • | 5,000 shares of restricted stock per year; and |
Director Compensation
| • | Meeting fees of $1,500 per day for each Board and Board committee meeting. |
Director Compensation
The Company also reimburses directors for necessary and reasonable travel and other related expenses incurred in connection with the performance of their official duties and attendance at each meeting of the Board or any Board committee. The table below summarizes the compensation paid to each director for their service on the Board for the year ended December 31, 2023:
Director Compensation
| Name | Fees Earned or Paid in Cash | Stock Awards(1) | Total | | Fabrizio Mozzi(2) | $123,987 | — | $123,987 | | Jiwen Zhang | $51,605 | — | $51,605 | | Shaojun Sun(3) | $66,725 | — | $66,725 | | Frank P. Simpkins | $109,500 | $11,350 | $120,850 | | Kenneth W. Landini | $71,000 | $11,350 | $82,350 | | Hong He | $75,500 | $11,350 | $86,850 | | Gengsheng Zhang(4) | — | — | — | | Lei Lei(5) | $52,860 | — | $52,860 | | Fuzhang Yu(6) | — | — | — |
Director Compensation
| (1) Reflects the aggregate grant date fair value of restricted stock granted to Messrs. Simpkins, Landini and He on December 21, 2023, which will vest on July 10, 2024, and related to their 2023 Board service. The grant date fair value is computed in accordance with FASB ASC Topic 718. As of December 31, 2023. Messrs. Simpkins, Landini and He each had 5,000 outstanding shares of restricted stock. |
Director Compensation
| (2) On March 29, 2023, Mr. Mozzi resigned as Chairman and a member of the Board. |
Director Compensation
| (3) Effective March 29, 2023, Dr. Sun resigned from his position as Vice Chairman of the Board but continued to serve as a Board member until May 23, 2024. |
Director Compensation
| (4) Mr. Gengsheng Zhang was not paid for his 2023 Board and Committee services. |
Director Compensation
| (5) On July 25, 2023, Ms. Lei was not reelected as a non-employee director on the Board. The amount reported for Ms. Lei in the table reflects her prorated Board compensation for her services as a non-employee director for a portion of 2023. |
Director Compensation
| (6) Mr. Fuzhang Yu was appointed to the Board effective July 25, 2023 and continues to serve until the Company’s Annual Meeting or until his successor is duly elected and qualified. Mr. Fuzhang Yu was not paid for his 2023 Board and Committee services. |
Summary Compensation Table
Summary Compensation Table The table below summarizes the compensation paid for the services rendered to the Company, in all capacities, by its named executive officers for the years ended December 31, 2023 and 2022.
Summary Compensation Table
| Name and Principal Position | Year | Salary | Bonus(1) | Option/ SAR Awards(2) | Nonequity Incentive Plan Compensation(3) | All other Compensation(4) | Total | | C. (Dino) Xykis | 2023 | $472,692 | $317,681 | $216,542 | $383,827 | $58,540 | $1,449,282 | | CEO and Chief Technical Officer | 2022 | $358,866 | $82,512 | $28,397 | $179,786 | $53,390 | $702,951 | | Xun (Kenneth) Li | 2023 | $368,308 | $72,273 | — | $209,935 | $10,314 | $660,830 | | CFO | 2022 | $117,693 | $33,776 | $42,382 | $46,685 | $1,938 | $242,474 | | Junhua Gu | 2023 | $201,846 | $43,312 | — | $79,477 | $8,071 | $332,706 | | Interim General Counsel | 2022 | $188,077 | $18,887 | — | $39,302 | $4,017 | $250,283 |
Summary Compensation Table
| (1) The amounts reported for each named executive officer in this column for 2023 include (i) for Mr. Xykis: (a) $21,250 for his semi-monthly bonus payments for his services as the Company’s Interim CEO as described under “Employment Agreements with Named Executive Officers” below, (b) $56,970 for the payment of the 2023 LTI Plan, which is described below under “Long Term Incentive Plan”, and (c) $239,461 for discretionary bonus awarded by the Board; (ii) for Mr. Li: (a) $37,800 for the 2023 LTI Plan payment, and (b) $34,473 for discretionary bonus awarded by the Board; and (iii) for Ms. Gu: (a) $20,400 for the 2023 LTI Plan payment, and (b) $22,912 for discretionary bonus awarded by the Board. |
Summary Compensation Table
| (2) The amount reported in the “Option/SAR Awards” column for 2023 reflects the grant date fair value of (i) an award of (x) 16,663 SARs granted to Mr. Xykis on April 25, 2023 and (y) 85,000 SARs granted to Mr. Xykis on April 25, 2023, each calculated in accordance with Financial Accounting Standards Board |
Summary Compensation Table
| (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. See Note 13, Stock-Based Compensation, to the consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2023, filed with the SEC on March 14, 2024, for the assumptions made in determining these values. |
Summary Compensation Table
| (3) The amounts reported for each named executive officer in this column for 2023 represent their 2023 Key Performance Indicator (“KPI”) Plan, amounts. A description of the Company’s 2023 KPI plan is described below under “2023 Key Performance Indicator Plan;” |
Summary Compensation Table
| (4) The reported amounts for 2023 in the “All Other Compensation” column include (i) for Mr. Xykis: (a) $2,286 for life insurance premiums, (b) $44,700 for automobile-related expenses (including an automobile and automobile lease allowances), (c) $1,654 for reimbursement of car insurance premiums and gross up of taxes related to the reimbursement, and (d) $9,900 for 401(k) matching contributions; (ii) for Mr. Li: (a) $414 for life insurance premiums, and (b) $9,900 for 401(k) matching contributions; and (iii) for Ms. Gu: (a) $270 for life insurance premiums, and (b) $7,801 for 401(k) matching contributions. |
Outstanding Equity Awards at 2023 Year-End
Outstanding Equity Awards at 2023 Year-End The table below shows outstanding equity awards as of December 31, 2023 held by each named executive officer. No stock awards remained outstanding for any named executive officers as of December 31, 2023.
Outstanding Equity Awards at 2023 Year-End
| | Option/SAR Awards | | | | | Name | Number of Securities Underlying Unexercised Options/SARs (#) Exercisable | Number of Securities Underlying Unexercised Options/SARs (#) Unexercisable | Option/SAR Exercise Price ($) | Option/SAR Expiration Date | | C. (Dino) Xykis | 1,500 | — | 11.25 | February 22, 2026 | | | 16,667(1) | 8,333(1) | 6.82 | March 12, 2031 | | | 228(2) | 114(2) | 6.50 | March 18, 2032 | | | 20,000(3) | — | 2.00 | July 15, 2032 | | | — | 16,663(4) | 2.99 | April 25, 2033 | | | — | 85,000(5) | 2.99 | April 25, 2033 | | Xun (Kenneth) Li | 7,500(6) | 22,500(6) | 2.00 | September 2, 2032 | | Junhua Gu | — | — | — | — |
Outstanding Equity Awards at 2023 Year-End
| (1) The amount reported represents Mr. Xykis’ outstanding SAR award under the Company’s 2012 Incentive Compensation Plan, as amended and restated (the “2012 Plan”), effective March 12, 2021, which has the following vesting schedule: 8,333 of the SAR shares vested and became exercisable on March 15, 2022, 8,333 of the SAR shares vested and became exercisable on March 15, 2023, and 8,334 of the SAR shares vested and became exercisable on March 15, 2024. |
Outstanding Equity Awards at 2023 Year-End
| (2) The amount reported represents Mr. Xykis’ outstanding SAR award under the 2012 Plan, effective March 18, 2022, which vested and became exercisable in three equal installments on March 18, 2022, March 18, 2023 and March 18, 2024. |
Outstanding Equity Awards at 2023 Year-End
| (3) The amount reported represents Mr. Xykis’ outstanding SAR award under the 2012 Plan, effective July 15, 2022, which vested and became exercisable on July 15, 2023. |
Outstanding Equity Awards at 2023 Year-End
| (4) The amount reported represents Mr. Xykis’ outstanding SAR award under the 2012 Plan, effective March 25, 2023, which vested and became exercisable on April 25, 2024. |
Outstanding Equity Awards at 2023 Year-End
| (5) The amount reported represents Mr. Xykis’ outstanding SAR award under the 2012 Plan, effective March 25, 2023, which vests in three equal installments on April 25, 2024, April 25, 2025 and April 25, 2026. |
Outstanding Equity Awards at 2023 Year-End
| (6) The amount reported represents Mr. Li’s outstanding SAR award under the 2012 Plan, effective September 2, 2022, which vests and becomes exercisable in four equal installments on September 2, 2023, September 2, 2024, September 2, 2025 and September 2, 2026. |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control As of December 31, 2023, the Company had employment agreements with Messrs. Xykis and Li that provided for payments upon termination without “cause.” Ms. Gu did not have any such agreement with the Company, however, pursuant to the 2023 KPI Plan, she would have been entitled to receive a prorated portion of her awards under the plan if terminated without cause. A summary of the payments that Messrs. Xykis’ and Li’s employment agreements provide for upon a termination without “cause” is summarized above under the heading, “Employment Agreements with Named Executive Officers.” Other than these arrangements and accelerated vesting of equity awards under the 2012 Plan, the Company currently does not have any compensatory plans or arrangements in place that provide for any payments or benefits upon the resignation, retirement or any other termination of any of the named executive officers, as the result of a change in control, or from a change in any named executive officer’s responsibilities following a change in control.
Pay Versus Performance
Pay Versus Performance In August 2022, the SEC released the final version of its pay versus performance disclosure rules as mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act, and other official guidance issued thereunder, and which became effective starting with fiscal year ended December 31, 2022. The final rules were codified under Item 402(v) of Regulation S-K (along with other official guidance issued, “PvP disclosure rules”) and require the Company to provide the following tabular and narrative disclosures. In accordance with the PvP disclosure rules, the below sets forth the following for the previous three years (i) the total compensation set forth in the Summary Compensation Table (“SCT”) for the individuals serving as the Company’s principal executive officer (“PEO”) and the non-PEO named executive officers (“NEOs”); (ii) the total and average “compensation actually paid” (“CAP”) by the Company to the PEO and the non-PEO NEOs as a group, respectively; (iii) the Company’s cumulative total shareholder return (“Cumulative TSR”); and (iv) the Company’s Net Income.
2023 Pay versus Performance Table
2023 Pay versus Performance Table
2023 Pay versus Performance Table
| Year(a)(1) | SCT Total for PEO (Xykis)(b) | Compensation Actually Paid to PEO (Xykis)(c)(2) | SCT Total for PEO (Arnett)(b) | Compensation Actually Paid to PEO (Arnett)(c)(2) | SCT Total for PEO (Miller)(b) | Compensation Actually Paid to PEO (Miller)(c)(2) | Average SCT Total for Non- PEO NEOs(d)(3) | Average Compensation Actually Paid to Non- PEO NEOs(e)(2) | Value of Initial Fixed $100 Investment Based on: Total Shareholder Return(f)(4) | Net Income (g) (thousands) | | | 2023 | $1,449,282 | $1,343,079 | — | — | — | — | $496,768 | $487,073 | $62 | | 26,306 | | 2022 | $702,951 | $724,577 | $695,192 | $486,409 | — | — | $295,907 | $305,572 | $91 | | 11,270 | | 2021 | — | — | $766,353 | $600,397 | $495,149 | $495,149 | $627,496 | $592,272 | $91 | ($ | 48,472) |
2023 Pay versus Performance Table
| (1) Mr. C. (Dino) Xykis served as Interim PEO during part of 2022 and as a non-PEO NEO during 2021. Mr. Lance M. Arnett served as PEO during part of 2021 and part of 2022. Mr. John P. Miller served as PEO during part of 2021. For 2022, Messrs. Xun (Kenneth) Li, Matthew Thomas, and Ms. Junhua Gu, served as non-PEO NEOs. For 2021, Messrs. Xykis and Kenneth J. Winemaster served as non-PEO NEOs. |
2023 Pay versus Performance Table
| (2) Represents CAP for the PEOs and the average CAP for the non-PEO NEOs as a group, computed in accordance with the PvP disclosure rules. The dollar amounts do not reflect the amounts of compensation ultimately earned or realized by the PEOs or non-PEO NEOs during the covered years. |
2023 Pay versus Performance Table
| (3) Amounts reflected in this column represent the average “Total” compensation from the SCT for the non-PEO NEOs as a group. |
2023 Pay versus Performance Table
| (4) Amounts reflected in these columns represent the Company’s Cumulative TSR for each measurement period from December 31, 2020 through December 31, 2023. Dividends are assumed to be reinvested. The resulting amounts assume that $100 was invested on December 31, 2020 in the Company’s Common Stock. |
2023 Pay versus Performance Table
CAP is determined by taking the “Total” column amount from the SCT for each covered fiscal year and adjusting as follows for the PEOs (Xykis for 2023; Xykis and Arnett for 2022; Arnett and Miller for 2021) and non-PEO NEOs (Li and Gu for 2023; Li, Thomas and Gu for 2022; Xykis and Winemaster for 2021):
2023 Pay versus Performance Table
| Adjustments to Determine CAP for PEO (Xykis) | | | | | | Covered Fiscal Year | 2023 | | 2022 | | | SCT Total for PEO (Xykis) | | 1,449,282 | | 702,951 | | Pension Adjustments(i) | | | | | | Subtract “Change in Actuarial Present Value” reported in the SCT for the covered fiscal year | | — | | — | | Add pension value attributable to covered fiscal year’s “service cost” | | — | | — | | Add pension value attributable to the entire “prior service cost” of benefits granted (or credit for benefits reduced) in a plan amendment made in the covered fiscal year attributable to prior service periods | | — | | — | | Equity Adjustments(ii) | | | | | | Subtract fair value (as of grant date) reported in the “Option/SAR Awards” column in the SCT for the covered fiscal year | ($ | 216,542) | ($ | 28,397) |
2023 Pay versus Performance Table
| Adjustments to Determine CAP for PEO (Xykis) | | | | | Covered Fiscal Year | 2023 | | 2022 | | Add fair value (as of end of year) of equity awards granted during the covered fiscal year that remain unvested as of year end | | 136,228 | $46,780 | | Add fair value (as of vesting date) of equity awards granted during the covered fiscal year that vest during the covered year | | — | $154 | | Add/Subtract the change in fair value from the prior year-end to the covered fiscal year-end for equity awards granted in prior fiscal years that remain outstanding and unvested at the end of the covered fiscal year | ($ | 6,032) | $2,949 | | Add/Subtract the change in fair value from the prior year-end to vesting date for equity awards granted in prior fiscal years that vested during the covered fiscal year | ($ | 19,857) | $140 | | Subtract fair value (as of end of prior year) for equity awards granted in prior fiscal years that were forfeited during the covered fiscal year | | — | — | | Add incremental fair value (as of modification date) of equity awards modified during the covered fiscal year | | — | — | | Add dividends or other earnings paid on equity awards during the covered fiscal year prior to vesting date of award that are not otherwise included in the total compensation for the covered fiscal year | | — | — | | TOTAL ADJUSTMENTS | ($ | 106,203) | $21,626 | | CAP | | 1,343,079 | $724,577 |
2023 Pay versus Performance Table
| Adjustments to Determine CAP for PEO (Arnett) | | | | | | Covered Fiscal Year | 2022 | | 2021 | | | SCT Total for PEO (Arnett) | | 695,192 | | 766,353 | | Pension Adjustments(i) | | | | | | Subtract “Change in Actuarial Present Value” reported in the SCT for the covered fiscal year | | — | | — | | Add pension value attributable to covered fiscal year’s “service cost” | | — | | — | | Add pension value attributable to the entire “prior service cost” of benefits granted (or credit for benefits reduced) in a plan amendment made in the covered fiscal year attributable to prior service periods | | — | | — | | Equity Adjustments(ii) | | | | | | Subtract fair value (as of grant date) reported in the “Option/SAR Awards” column in the SCT for the covered fiscal year | ($ | 2,677) | ($ | 307,508) | | Add fair value (as of end of year) of equity awards granted during the covered fiscal year that remain unvested as of year end | | 2,606 | | 131,125 | | Add fair value (as of vesting date) of equity awards granted during the covered fiscal year that vest during the covered year | | 668 | | — | | Add/Subtract the change in fair value from the prior year-end to the covered fiscal year-end for equity awards granted in prior fiscal years that remain outstanding and unvested at the end of the covered fiscal year | | 6,283 | ($ | 1,995) | | Add/Subtract the change in fair value from the prior year-end to vesting date for equity awards granted in prior fiscal years that vested during the covered fiscal year | | 3,437 | | 12,442 | | Subtract fair value (as of end of prior year) for equity awards granted in prior fiscal years that were forfeited during the covered fiscal year | ($ | 219,100) | | — | | Add incremental fair value (as of modification date) of equity awards modified during the covered fiscal year | | — | | — |
2023 Pay versus Performance Table
| Adjustments to Determine CAP for PEO (Arnett) | | | | | | Covered Fiscal Year | 2022 | | 2021 | | | Add dividends or other earnings paid on equity awards during the covered fiscal year prior to vesting date of award that are not otherwise included in the total compensation for the covered fiscal year | | — | | — | | TOTAL ADJUSTMENTS | ($ | 208,783) | ($ | 165,956) | | CAP | | 486,409 | | 600,397 |
2023 Pay versus Performance Table
| Adjustments to Determine CAP for PEO (Miller) | | | Covered Fiscal Year | 2021 | | SCT Total for PEO (Miller) | $495,149 | | Pension Adjustments(i) | | | Subtract “Change in Actuarial Present Value” reported in the SCT for the covered fiscal year | — | | Add pension value attributable to covered fiscal year’s “service cost” | — | | Add pension value attributable to the entire “prior service cost” of benefits granted (or credit for benefits reduced) in a plan amendment made in the covered fiscal year attributable to prior service periods | — | | Equity Adjustments(ii) | | | Subtract fair value (as of grant date) reported in the “Option/SAR Awards” column in the SCT for the covered fiscal year | — | | Add fair value (as of end of year) of equity awards granted during the covered fiscal year that remain unvested as of year end | — | | Add fair value (as of vesting date) of equity awards granted during the covered fiscal year that vest during the covered year | — | | Add/Subtract the change in fair value from the prior year-end to the covered fiscal year-end for equity awards granted in prior fiscal years that remain outstanding and unvested at the end of the covered fiscal year | — | | Add/Subtract the change in fair value from the prior year-end to vesting date for equity awards granted in prior fiscal years that vested during the covered fiscal year | — | | Subtract fair value (as of end of prior year) for equity awards granted in prior fiscal years that were forfeited during the covered fiscal year | | | Add incremental fair value (as of modification date) of equity awards modified during the covered fiscal year | — | | Add dividends or other earnings paid on equity awards during the covered fiscal year prior to vesting date of award that are not otherwise included in the total compensation for the covered fiscal year | — | | TOTAL ADJUSTMENTS | — | | CAP | $495,149 |
2023 Pay versus Performance Table
| Adjustments to Determine CAP for Non-PEO NEOs | | | | | Covered Fiscal Year | 2023 | 2022 | 2021 | | Average SCT Total for Non-PEO NEOs | $496,768 | $295,907 | $627,496 | | Pension Adjustments(i) | | | | | Subtract “Change in Actuarial Present Value” reported in the SCT for the covered fiscal year | — | — | — | | Add pension value attributable to covered fiscal year’s “service cost” | — | — | — |
2023 Pay versus Performance Table
| Adjustments to Determine CAP for Non-PEO NEOs | | | | | | | | Covered Fiscal Year | 2023 | | 2022 | | 2021 | | | Add pension value attributable to the entire “prior service cost” of benefits granted (or credit for benefits reduced) in a plan amendment made in the covered fiscal year attributable to prior service periods | | — | | — | | — | | Equity Adjustments(ii) | | | | | | | | Subtract fair value (as of grant date) reported in the “Option/SAR Awards” column in the SCT for the covered fiscal year | | — | ($ | 15,069) | ($ | 54,810) | | Add fair value (as of end of year) of equity awards granted during the covered fiscal year that remain unvested as of year end | | — | | 24,734 | ($ | 19,586) | | Add fair value (as of vesting date) of equity awards granted during the covered fiscal year that vest during the covered year | | — | | — | | — | | Add/Subtract the change in fair value from the prior year-end to the covered fiscal year-end for equity awards granted in prior fiscal years that remain outstanding and unvested at the end of the covered fiscal year | ($ | 9662) | | | | — | | Add/Subtract the change in fair value from the prior year-end to vesting date for equity awards granted in prior fiscal years that vested during the covered fiscal year | ($ | 33) | | — | | — | | Subtract fair value (as of end of prior year) for equity awards granted in prior fiscal years that were forfeited during the covered fiscal year | | — | | — | | — | | Add incremental fair value (as of modification date) of equity awards modified during the covered fiscal year | | — | | — | | — | | Add dividends or other earnings paid on equity awards during the covered fiscal year prior to vesting date of award that are not otherwise included in the total compensation for the covered fiscal year | | — | | — | | — | | TOTAL ADJUSTMENTS | ($ | 9,695) | | 9,665 | ($ | 35,224) | | CAP | | 487,073 | | 305,572 | | 592,272 |
2023 Pay versus Performance Table
| (i) We do not sponsor or maintain any defined benefit pension plans and therefore no adjustments were made related to pension value. |
2023 Pay versus Performance Table
| (ii) The fair value or incremental fair value of all incentive equity awards is determined in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation,” generally using the same assumptions used in determining the grant date fair value of the Company’s equity awards reflected in the “Summary Compensation Table”; provided, in order to properly value the SAR awards using the Black-Scholes model the Company uses for such grant date fair value, the Company made appropriate adjustments to the grant date assumptions to reflect changes in the historical and implied stock price volatility, expected life (including adjustments for the time that lapsed between grant date and valuation date), dividend yield and risk-free interest rates as of each measurement date. |
2023 Pay versus Performance Table
All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference.