DEF 14A of FingerMotion, Inc.
Filed Jan 17, 2024 · FY20230001520138-24-000027
Elements of the Compensation Program
| (b) motivating the short and long-term performance of these executives; and |
Stock Options
Stock Options Effective December 12, 2022, our Board adopted the 2023 Stock Incentive Plan (the “2023 Stock Incentive Plan”). The purpose of the 2023 Stock Incentive Plan is to enhance the long-term shareholder value by offering opportunities to our directors, executive officers, key employees and eligible consultants to acquire our shares of common stock in order to give these persons the opportunity to participate in our growth and success, and to encourage them to remain in the service of the Company. Previous grants will be taken into account when considering new grants and the 2023 Stock Incentive Plan currently provides for a maximum of 9,000,000 shares of common stock that may be issued pursuant to awards, which includes stock options, that may be granted under the 2023 Stock Incentive Plan. There are currently 6,233,900 options outstanding and no other awards issued under the 2023 Stock Incentive Plan.
Summary Compensation Table
Summary Compensation Table Our NEOs for fiscal years ended February 28, 2023 (“Fiscal 2023”) and February 28, 2022 (“Fiscal 2022”) consist of (i) Martin J. Shen, our current Chief Executive Officer, (ii) Yew Hon Lee, our current Chief Financial Officer, and (iii) Li Li, the Legal Representative and General Manager of our contractual controlled company, JiuGe Technology. We have no other executive officers. The following Summary Compensation Table sets forth the compensation earned by or paid to our NEOs for Fiscal 2023 and Fiscal 2022 are as follows:
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock awards ($) | Option awards ($)(3) | Non-equity incentive plan compensation ($) | Non-qualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | | Martin J. Shen (1) CEO | 2023 2022 | 180,000 180,000 | - - | - - | - 62,100 | - - | - - | - - | 180,000 242,100 | | Yew Hon Lee (2) CFO | 2023 2022 | 84,000 72,000 | - - | - - | - 59,670 | - - | - - | - - | 84,000 131,670 | | Li Li Legal Representative and General Manager of JiuGe Technology | 2023 2022 | 133,745 130,586 | - - | - - | - 113,400 | - - | - - | - - | 133,745 243,986 |
Summary Compensation Table
| (1) Mr. Shen was appointed as our CEO and CFO on December 1, 2018. Mr Shen resigned as our CFO effective December 10, 2020. |
Summary Compensation Table
| (2) Mr. Yew Hon Lee was appointed as our CFO on December 11, 2020. |
Summary Compensation Table
| (3) For Fiscal 2022, these amounts represent the aggregate grant date fair value of stock options which was estimated using the Black-Scholes option pricing model. The following assumptions were used to value the stock options granted on December 28, 2021: exercise price: $8.00; expected risk free interest rate: 1.06%; expected annual volatility: 15.27%; expected life in years: 5.0; expected annual dividend yield: $Nil; and Black-Scholes value: $235,170. At our annual meeting of stockholders held on February 17, 2023, the stockholders approved an amendment to the exercise price of the outstanding stock options from $8.00 to $3.84. |
Summary Compensation Table
During our most recently completed financial years, we did not pay any other executive compensation to our NEOs.
Outstanding Equity Awards Held by Named Executive Officers at Fiscal Year End
Outstanding Equity Awards Held by Named Executive Officers at Fiscal Year End The following table sets forth information as at February 28, 2023, relating to equity awards that have been granted to the NEOs:
Outstanding Equity Awards Held by Named Executive Officers at Fiscal Year End
| | Option awards | | | | | Stock awards | | | | | Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares of units of stock that have not vested ($) | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) | | Martin J. Shen | 92,000 | 138,000 | N/A | $3.84 | Dec. 28, 2026 | N/A | N/A | N/A | N/A | | Yew Hon Lee | 88,400 | 132,600 | N/A | $3.84 | Dec. 28, 2026 | N/A | N/A | N/A | N/A | | Li Li | 168,000 | 252,000 | N/A | $3.84 | Dec. 28, 2026 | N/A | N/A | N/A | N/A |
Director Compensation
Director Compensation Each of our directors receives regular cash compensation of $2,000 per month, for serving on the Board. The following table set forth information relating to the compensation paid to our non-executive directors for Fiscal 2023:
Director Compensation
| Name | Fees earned or paid in cash ($) | Stock awards ($) | Option awards ($) | Non-equity incentive plan compensation ($) | Nonqualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | | Yew Poh Leong | 24,000 | - | - | - | - | - | 24,000 | | Michael Chan | 24,000 | - | - | - | - | - | 24,000 | | Hsien Loong Wong | 24,000 | - | - | - | - | - | 24,000 | | Eng Ho Ng | 24,000 | - | - | - | - | - | 24,000 |
Director Compensation
As at February 28, 2023, our directors held stock options to acquire an aggregate of 298,500 shares of our common stock as follows: Yew Poh Leong – 78,500 stock options; Michael Chan – 78,500 stock options; Hsien Loong Wong – 78,500 stock options; and Eng Ho Ng – 63,000 stock options.
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance measures of the company. As a Smaller Reporting Company, as the term is defined in Rule 405 of the Securities Act of 1933, we are only required to provide two years of Pay Versus Performance information in our initial disclosure.
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return(5) | Net Income (loss)(6) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | | 2023 | $180,000 | $188,280 | $108,873 | $120,411 | $12.50 | $(7,539,142) | | 2022 | $242,100 | $192,420 | $187,828 | $118,600 | $25 | $(4,943,444) |
Pay Versus Performance
Notes:
Pay Versus Performance
| (1) The dollar amounts in column (b) represent total compensation paid to our principal executive officer (“PEO”), Martin J. Shen, CEO, and are taken directly from the summary compensation table included in the Company’s amended Form 10-K for the period ended February 28, 2023 that was filed with the SEC on August 31, 2023. |
Pay Versus Performance
| (2) The compensation amount actually paid to the PEO was calculated as follows: |
Pay Versus Performance
| Year (a) | Reported Summary Compensation Table Total for PEO (b) | Reported Value of Equity Awards (c) | Equity Award Adjustments (d) | Compensation Actually Paid to PEO (e) | | 2023 | $180,000 | - | 8,280 | $188,280 | | 2022 | $242,100 | (62,100) | 12,420 | $192,420 |
Pay Versus Performance
The reported value of equity awards in column (c) was taken directly from the summary compensation table included in the Company’s amended Form 10-K for the period ended February 28, 2023 that was filed with the SEC on August 31, 2023. Further, the equity award adjustments in column (d) were calculated as follows:
Pay Versus Performance
| Year | Year End Fair Value of Equity Awards (1) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards (2) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year (3) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year (4) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year (5) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation (6) | Total Equity Award Adjustments (for column d above) | | 2023 | - | - | - | 8,280 | - | - | $8,280 | | 2022 | - | - | 12,420 | - | - | - | $12,420 |
Pay Versus Performance
| (3) The dollar amounts in column (d) represent total compensation paid to Yew Hon Lee, CFO, and Li Li, Legal Representative and General Manager of JiuGe Technology, and are taken directly from the summary compensation table included in the Company’s amended Form 10-K for the period ended February 28, 2023, that was filed with the SEC on August 31, 2023. |
Pay Versus Performance
| (4) The average compensation amount actually paid to the non-PEO NEOs was calculated as follows: |
Pay Versus Performance
| Year (a) | Reported Summary Compensation Table Total for PEO (b) | Reported Value of Equity Awards (c) | Equity Award Adjustments (d) | Compensation Actually Paid to NEO (e) | | 2023 | $108,873 | - | 11,538 | $120,411 | | 2022 | $187,828 | (86,535) | 17,307 | $118,600 |
Pay Versus Performance
The reported value of equity awards in column (c) was taken directly from the summary compensation table included in the Company’s amended Form 10-K for the period ended February 28, 2023, that was filed with the SEC on August 31, 2023. Further, the equity award adjustments in column (d) were calculated as follows:
Pay Versus Performance
| Year | Year End Fair Value of Equity Awards (1) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards (2) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year (3) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year (4) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year (5) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation (6) | Total Equity Award Adjustments (for column d above) | | 2023 | - | - | - | 11,538 | - | - | $11,538 | | 2022 | - | - | 17,307 | - | - | - | $17,307 |
Pay Versus Performance
| (5) Cumulative total shareholder return is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the registrant’s share price at the end and the beginning of the measurement period, by the share price at the beginning of the measurement period. |
Pay Versus Performance
| (6) Net Income represents the amounts reported in the Company’s audited financial statements included in its Form 10-K for the period ended February 28, 2023, that was filed with the SEC on May 30, 2023. |
Relationship Between Total Shareholder Return and Compensation Actually Paid
Relationship Between Total Shareholder Return and Compensation Actually Paid Pursuant to the information provided in the pay versus performance table, an investor making a $100 investment in the company on February 28, 2021 would have experienced cumulative negative total shareholder return as of both February 28, 2022 and February 28, 2023. As a result of the negative total shareholder return, both the PEO and non-PEO NEOs were provided limited compensation actually paid during the two-year period presented in the table. For example, Mr. Shen’s compensation actually paid was only $188,280 and $192,420 for fiscal years 2023 and 2022, respectively, which is a very moderate compensation package as compared to other PEOs currently serving in similar roles at smaller publicly traded companies. Further, during 2023, Mr. Shen’s compensation actually paid decreased by approximately $4,000, or 2%, as compared to his compensation actually paid during fiscal year 2022. Similarly, the average compensation actually paid to non-PEO NEOs for 2023 and 2022 was only $120,411 and $118,600, respectively, which would also be considered a very moderate compensation package as compared to other non-PEO NEOs holding similar positions with smaller publicly traded companies.
Relationship Between Net Income and Compensation Actually Paid
Relationship Between Net Income and Compensation Actually Paid Pursuant to the information provided in the pay versus performance table, the Company recognized a net loss during each of the two years ended February 28, 2023. As a result of the recognized net loss, both the PEO and non-PEO NEOs were provided limited compensation actually paid during the two-year period presented in the table. For example, Mr. Shen’s compensation actually paid was only $188,280 and $192,420 for fiscal years 2023 and 2022, respectively, which is a very moderate compensation package relative to other PEOs currently serving in similar roles at smaller publicly traded companies. Further, during 2023, Mr. Shen’s compensation actually paid decreased by approximately $4,000, or 2%, as compared to his compensation actually paid during fiscal year 2022. Similarly, the average compensation actually paid to non-PEO NEOs for 2023 and 2022 was only $120,411 and $118,600, respectively, which would also be considered a very moderate compensation package as compared to other non-PEO NEOs holding similar positions with smaller publicly traded companies. Disclosure of the Company’s Policies and Practices Related to the Grant of Certain Equity Awards Close In Time to the Release of Material Nonpublic Information It is the Compensation Committee’s and the Board’s practice to not grant any awards under its 2023 Stock Incentive Plan when in possession of any material nonpublic information, and to wait until such material nonpublic information has been fully disclosed, widely disseminated to the public and at least two full business days has passed after such material nonpublic information has been disclosed. The Compensation Committee and the Board have not awarded any options to a NEO during the last completed fiscal year ended February 28, 2023.
THE ELECTION OF THE DIRECTOR NOMINEES SET FORTH ABOVE
THE ELECTION OF THE DIRECTOR NOMINEES SET FORTH ABOVE PROPOSAL NUMBER TWO: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS Centurion ZD CPA & Co. (“Centurion”) have been selected as the independent registered public accountants of the Company for the fiscal year ending February 29, 2024. Centurion was appointed as our independent registered public accountants on November 3, 2017 and audited the Company’s financial statements for the fiscal years ended February 28, 2023 and 2022. Representatives of Centurion will not be present at the Annual Meeting. In the event ratification by the stockholders of the appointment of Centurion as the Company’s independent registered public accountants is not obtained, the Board will reconsider such appointment.