DEF 14A of Karat Packaging Inc.
Filed Apr 25, 2025 · FY20240001628280-25-019932
Director Nominees
Director Nominees Below are the names of and certain information regarding our director nominees:
Director Nominees
| Name | Age | Position | | Alan Yu | 55 | Chief Executive Officer and Chairman | | Jian Guo | 46 | Chief Financial Officer and Director | | Paul Y. Chen | 60 | Director | | Eric Chen | 56 | Director | | Eve Yen | 69 | Director |
Director Nominees
Alan Yu co-founded the Company and has served as our Chairman and Chief Executive Officer since the Company’s founding in 2000. Mr. Yu attended the University of California, Los Angeles. We believe that Mr. Yu is qualified to serve on our board of directors due to the vast industry knowledge, perspective and experience he brings as our co-founder, Chairman and Chief Executive Officer, as well as one of our two largest stockholders. Jian Guo joined the Company as our Chief Financial Officer in February 2022 and joined our board of directors in September 2023. Ms. Guo leads the Company's finance and accounting functions, including financial planning, budgeting, forecasting, financial reporting and compliance, risk management, and investor relations. Ms. Guo has previously served in the positions of SVP, Corporate Controller and Senior Director of Financial Reporting. Prior to her involvement in corporate accounting, Ms. Guo was an assurance senior manager at Ernst & Young, LLP. Ms. Guo holds an M.S. in Business Administration from Pennsylvania State University. Paul Y. Chen joined our board of directors in January 2019 and serves as our lead independent director. Mr. Chen is a practicing CPA and is the managing partner and CEO of Chen & Fan Accountancy Corporation, specializing in financial audits, advisory, and income tax compliance for U.S. business entities, many of which are affiliated with multi-national groups with core operations in the Pacific Rim. Mr. Chen has over 30 years of experience in public accounting, serving industries including distribution, property management, banking, manufacturing, biotech, and R&D services. Prior to joining Chen & Fan Accountancy Corporation in 1999, Mr. Chen worked as an auditor and tax manager at Deloitte. He is an active participant in a number of community organizations and currently serves on the board of a number of community Chambers of Commerce and nonprofit organizations throughout Southern California, including on the audit and finance committees of Genesis LA Economic Growth Corporation, a Community Development Financial Institution. Mr. Chen received his MBA from the University of Southern California and B.S. from the University of California, Los Angeles. We believe that Mr. Chen is qualified to serve as a member of our board of directors based on his significant experience in public company accounting. Eric Chen joined our board of directors in January 2019. Mr. Chen is the founder of the Law Offices of Eric K. Chen, which he founded in 1995. Mr. Chen’s professional experience centers on personal injury law, business litigation, and international corporate law. Mr. Chen assists U.S. and Chinese companies in finding joint ventures and mergers and acquisition partnerships. In addition, Mr. Chen has served as legal counsel for the California Acupuncture Medicine Association (CAMA), California Association of Acupuncture and Oriental Medicine (CAAOM), and Council of Acupuncture and Oriental Medicine Association (CAOMA). Mr. Chen is the co-founder and vice president of the Nevada Chinese Professionals and Business Association. Mr. Chen holds a J.D. from the Southwestern University School of Law. We believe that Mr. Chen is qualified to serve as a member of our board of directors based on his experience as a commercial litigator familiar with international transactions. Eve Yen joined our board of directors in January 2019. Ms. Yen is the founder of Diamond Wipes International, Inc., a manufacturer of wet wipes based in Chino, California, which she founded in 1994. Ms. Yen serves on the board of the 100 Mile Club®, a grass-roots non-profit organization dedicated to helping children and families to achieve a healthy lifestyle through physical activity nationwide. Ms. Yen also served on Asian Pacific Community Fund (APCF)’s board of directors, devoted to supporting small organizations and nurturing future leaders from minority communities. Ms. Yen holds an M.S. in Management Information Systems from New York Institute of Technology. We believe that Ms. Yen is qualified to serve as a member of our board of directors based on her perspective and experience as CEO and founder of a California-based manufacturing company. The vote required to elect our five directors, each for a term expiring at the next Annual Meeting or until their successors are duly elected and qualified, is a plurality of the votes cast at the Annual Meeting. The Board recommends that you vote "FOR" for the election of each of the director nominees.
Board of Directors
Board of Directors The business and affairs of our company are managed by or under the direction of the Board. The Board is currently composed of five members. Mr. Yu, our Chief Executive Officer, is also the Chairman of our board of directors. Our board of directors determined that, at the present time, having our Chief Executive Officer also serve as the Chairman of our board of directors provides us with optimally effective leadership and is in our best interests and those of our stockholders. Mr. Yu co-founded the Company, and our board of directors believes that Mr. Yu’s years of management experience in our industry as well as his extensive understanding of our business, operations, and strategy make him well qualified to serve as chairman of our board. In January 2019, our board of directors appointed Paul Y. Chen to serve as our lead independent director. As lead independent director, Paul Y. Chen presides over periodic meetings of our independent directors, serves as a liaison between the chairman of our board of directors and the independent directors and performs such additional duties as our board of directors may otherwise determine and delegate. The Board held four meetings and took four actions by unanimous written consent during the year ended December 31, 2024. In 2024, each person serving as a director attended at least 75% of the total number of meetings of our Board and any Board committee on which he or she served. Our directors are expected to attend our Annual Meeting of Stockholders. Any director who is unable to attend our Annual Meeting is expected to notify the Chairman of the Board in advance of the Annual Meeting. All directors attended our 2024 Annual Meeting of Stockholders.
Executive and Director Compensation
Executive and Director Compensation
Summary Compensation Table
Summary Compensation Table The following table provides the compensation paid to our named executive officers for the years ended December 31, 2024, and December 31, 2023.
Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary ($) | Stock Awards ($) (1) | All Other Compensation ($) (4) | Total ($) | | Alan Yu | 2024 | 293,077 (2) | 705,120 | 37,500 | 1,035,697 | | Chief Executive Officer | 2023 | 270,000 | — | 30,000 | 300,000 | | Jian Guo | 2024 | 350,000 | 705,120 | 37,500 | 1,092,620 | | Chief Financial Officer | 2023 | 350,000 | — | 7,500 | 357,500 | | Daniel Quire | 2024 | 250,000 | 705,120 | — | 955,120 | | Chief Revenue Officer | 2023 | 217,123 (3) | — | — | 217,123 |
Summary Compensation Table
(1) This represents the fair value on the grant date of the stock awards granted to our named executive officers in the applicable year. (2) Mr. Yu entered into an amendment to his employment agreement on March 12, 2024. The salary for Mr. Yu for 2024 was prorated based on his amendment’s effective date of March 12, 2024. (3) Mr. Quire began his service as our Chief Revenue Officer on October 5, 2023. The salary for Mr. Quire for 2023 was prorated based on the effective date of his promotion on October 5, 2023. (4) Represents compensation of $7,500 per board meeting attended paid to each board member.
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table sets forth the outstanding equity awards held by our named executive officers as of December 31, 2024.
Outstanding Equity Awards at Fiscal Year End
| | Option Awards | | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable (#) (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) (2) | Market Value of Shares or Units of Stock That Have Not Vested ($) (3) | | Alan Yu | 3/12/2024 | - | - | - | - | 16,000 | 484,160 | | Jian Guo | 3/12/2024 | - | - | - | - | 16,000 | 484,160 | | | 2/1/2022 | 22,333 | 16,667 | 16.53 | 1/31/2032 | - | - | | Daniel Quire | 3/12/2024 | - | - | - | - | 16,000 | 484,160 | | | 10/8/2021 | 50,000 | - | 18.86 | 10/7/2031 | - | - |
Outstanding Equity Awards at Fiscal Year End
(1) Subject to each named executive officer’s continued employment, each stock option grant was scheduled to become vested and exercisable over a three-year period, with one-third of each option grant becoming vested and exercisable on each of the first three anniversaries of the grant date of the option. All unexercised options expire ten years from the date of grant. (2) Subject to each named executive officer's continued employment, each restricted stock unit award was scheduled to become vested over a period between two and three years. (3) The market value of stock awards is computed by multiplying the applicable number of shares of stock that have not yet vested as of December 31, 2024, by $30.26, the closing market price of the Company's common stock on such date.
Non-Employee Director Compensation
Non-Employee Director Compensation The following table summarizes the compensation paid to our non-employee directors for the year ended December 31, 2024.
Non-Employee Director Compensation
| Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | All Other Compensation ($) | Total ($) | | Paul Y. Chen | 37,500 | 56,440 | — | 93,940 | | Eric Chen | 30,000 | 56,440 | — | 86,440 | | Eve Yen | 37,500 | 56,440 | — | 93,940 |
Non-Employee Director Compensation
(1) Represents compensation of $7,500 per board meeting attended paid to each board member. (2) Each non-employee director was granted 2,000 restricted stock unit awards on May 7, 2024 that shall vest in two equal installments on May 7, 2025 and May 7, 2026.