Thompson Lin
About Thompson Lin
Founder of Applied Optoelectronics (AAOI) in 1997, Thompson (Chih‑Hsiang) Lin, Ph.D., is 62 and has served as President and CEO since inception; he is also Chairman of the Board (since Jan 2014). He holds a B.S. in Nuclear Engineering (National Tsing Hua University) and M.S./Ph.D. in Electrical & Computer Engineering (University of Missouri–Columbia); academic roles included Research Associate Professor (1998–2000) and Senior Research Scientist (1994–1998) at the University of Houston . Recent performance disclosures show strong stockholder value creation in 2023–2024, with cash bonuses tied to Non‑GAAP EBITDA and new customer orders and long‑term equity 50% PSUs (relative TSR and stock price hurdles) and 50% RSUs .
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Company TSR ($, $100 initial) | 71.63 | 43.27 | 15.91 | 162.63 | 310.27 |
| Peer Group TSR ($) | 137.07 | 169.88 | 109.42 | 102.83 | 123.89 |
| Net Income ($000s) | (58,452) | (54,162) | (66,397) | (56,048) | (194,415) |
| Non‑GAAP EBITDA ($000s) | (3,212) | (8,413) | (18,501) | (364) | (30,216) |
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Applied Optoelectronics, Inc. | Founder; President & CEO; Chairman (since 2014; prior chair stints in 2000–2002 and 2008–2009) | 1997–present | Built vertically integrated optoelectronics supplier; long‑tenured founder‑CEO leadership . |
| University of Houston | Senior Research Scientist; Research Associate Professor | 1994–1998; 1998–2000 | Optoelectronics research experience underpinning technical depth . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| University of Missouri | Chancellor’s Advisory Group member | Since May 2015 | External advisory role . |
| University of Missouri College of Engineering | Industrial Advisory Board chair | Since Nov 2016 | Industry‑academic linkage . |
Fixed Compensation
| Item | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 583,851 | 596,747 | 693,251 |
| Base Salary set for year ($) | — | 563,795 | 631,450 |
| Target Annual Bonus (% of salary) | — | 91.67% | 100% |
| Actual Annual Cash Bonus ($) | 588,113 | 594,334 | 394,656 |
Notes: 2024 base salaries were adjusted to approximate 50th percentile peers; CEO base rose 12% to $631,450 effective Mar 1, 2024 . 2024 cash bonus targets reset higher vs 2023; payout reflected weighted goal attainment (62.5%) .
Performance Compensation
Annual Cash Incentive (2024)
| Metric | Weight | Target | 2024 Achievement | Payout Weight |
|---|---|---|---|---|
| Non‑GAAP EBITDA | 50% | Losses ≤ $2.0M; breakeven or profitability for max | Losses > $8.0M | 0% |
| New Customer Orders | 50% | Min order totals from two new customers (target); three for max | ≥ three new customers (max) | 62.5% aggregated |
| Aggregate payout as % of target | — | — | 62.5% | 62.5% |
| Bonus Opportunity (2024) | Target ($) | Achievement (%) | Actual Bonus ($) |
|---|---|---|---|
| CEO (Thompson Lin) | 631,450 | 62.5% | 394,656 |
Long‑Term Equity (2024 awards, granted Apr 29, 2024)
| Grant Date | Instrument | Shares/Targets | Vesting | Grant‑date Fair Value ($) |
|---|---|---|---|---|
| Apr 29, 2024 | Time‑vesting RSUs | 94,786 | Quarterly over 4 years commencing Jan 21, 2024 | 968,713 |
| Apr 29, 2024 | PSUs (target) | 94,786 (Thr 23,696; Max 189,573) | 3‑yr performance to Apr 29, 2027; 50% relative TSR vs 2024 Peer Group; 50% stock price hurdle | 1,554,016 |
PSU performance curves:
- Relative TSR: 25th/50th/75th percentiles ⇒ 25%/100%/200% payout; <25th ⇒ 0% .
- Stock price hurdles: Below $11.98 (0%), $13.87 (25%), $15.95 (100%), $20.70 (200%) by end of period .
Award sizing (value at target): CEO $1.2M RSUs + $1.2M PSUs; 50% performance‑based mix . Prior 2021–2024 PSU cycle earned at 200%; shortage of share pool required settling the excess in cash per plan terms .
3‑Year “Pay vs Performance” context (PEO = CEO)
| Year | PEO SCT Total ($) | PEO “Compensation Actually Paid” ($) |
|---|---|---|
| 2022 | 2,157,067 | 456,994 |
| 2023 | 6,049,470 | 38,409,964 |
| 2024 | 3,695,421 | 33,286,022 |
Equity Ownership & Alignment
Beneficial Ownership (as of Apr 17, 2025)
| Holder | Shares Beneficially Owned | % Outstanding | Breakdown / Notes |
|---|---|---|---|
| Chih‑Hsiang (Thompson) Lin | 1,022,488 | 1.9% | Includes 996,059 common + 56,429 RSUs vesting within 60 days; excludes PSUs . |
- Insider policy prohibits hedging, short sales, derivative transactions, and pledging or margin accounts for executives and directors (reduces misalignment/forced‑sale risk) .
- Stock ownership guidelines: CEO 5x base salary; all executives and directors in compliance as of filing. Clarified in Feb 2025 that unexercised options and unvested PSUs do not count .
- 2024 supply/vesting: CEO had 377,613 shares vest (value realized $4,854,279) – a potential near‑term selling pressure indicator if shares are sold to cover taxes/liquidity, though Form 4s govern actual sales .
Outstanding Equity (12/31/2024)
| Grant Year | Unvested RSUs (#) | Market Value ($) | Unearned PSUs (#) | PSU Payout Value ($) |
|---|---|---|---|---|
| 2021 | 23,705 | 873,766 | — | — |
| 2021 (additional) | 11,344 | 418,140 | — | — |
| 2022 | 69,755 | 2,571,169 | 223,214 | 8,227,668 |
| 2023 | 200,178 | 7,378,1,561 | 355,871 | 13,117,405 |
| 2024 | 77,014 | 2,838,736 | 94,786 | 3,493,812 |
Note: Company states it currently does not grant stock options to employees; CEO reported no option exercises in 2024 .
Employment Terms
Agreement and Triggers
- Outside Change‑of‑Control (CoC): If terminated without Cause or resigns for Good Reason, CEO receives one year base salary + full target bonus, plus $15,000 (COBRA/other); paid over 12 months .
- Within CoC Period (double‑trigger): If terminated by Company without Cause or resigns for Good Reason, CEO receives lump sum one year base salary + full target bonus + $10,000 and accelerated vesting of equity (options exercisable longer); CEO’s CoC Period is one year after a CoC; CEO also has potential 280G excise‑tax gross‑up (not provided for other NEOs) .
- Equity acceleration: Time‑based RSUs fully accelerate upon death/disability and on qualifying CoC terminations; PSUs accelerate based on goal type and scenario (TSR at target upon death/disability; CoC greater of actual or target after period; stock‑price goal vests to extent earned, etc.) .
- Non‑compete: 12 months post‑separation; release and cooperation required for severance .
Potential Payments if Separation on 12/31/2024 (illustrative)
| Scenario | Salary+Bonus ($) | Other Cash ($) | Accelerated Equity ($) | Tax Gross‑Up ($) | Total ($) |
|---|---|---|---|---|---|
| Termination without Cause / Good Reason (outside CoC Period) | 1,262,900 | 15,000 | — | — | 1,277,900 |
| Termination without Cause / Good Reason (within CoC Period) | 1,262,900 | 10,000 | — | 254,580 | 1,527,480 |
| Death or Disability | — | — | 51,338,742 | — | 51,338,742 |
| Retirement | — | — | 36,184,330 | — | 36,184,330 |
| CoC – Awards Not Assumed | — | — | 50,264,702 | — | 50,264,702 |
CoC/trigger definitions and CoC Period parameters are detailed in the proxy; CEO’s CoC Period is one year after a CoC; other NEOs have six months pre‑CoC to one year post‑CoC .
Board Governance
- Dual role: CEO chairs the Board; the Board cites single chain of command and CEO’s deep company knowledge as rationale. Lead Independent Director (William H. Yeh) oversees executive sessions, agendas, schedules, liaison duties, and may call independent‑only meetings; CEO is the only non‑independent director .
- Committee structure (all independent): Audit (Chair Richard Black), Compensation (Chair Min‑Chu Chen), Nominating & Corporate Governance (Chair William Yeh). CEO/Lin is not on any Board committee .
- Meetings/attendance: Board met five times in 2024; all directors attended at least 75% of Board/committee meetings .
Director Service and Roles for Thompson Lin
- Director since 1997; standing for re‑election as a Class III director (term to 2028 if elected) .
- Chairman of the Board (since Jan 2014; prior chair tenures 2000–2002 and 2008–2009). No committee memberships due to management role; independence: not independent under Nasdaq/SEC rules .
Governance implications:
- Combined CEO/Chair concentrates authority; mitigated by independent committees and a strong Lead Independent Director conducting executive sessions without management .
Compensation Peer Group and Policy
- 2024 peer group refreshed with Aon; includes A10 Networks, Semtech, SkyWater Technology, NETGEAR, Photronics, Ribbon, etc.; criteria based on industry, market cap ~$150M–$1.2B, revenue $150M–$900M, headcount 1.1k–6.75k. Aon determined independent; no consultant conflicts .
- Base salary positioning around 50th percentile in 2024 (after increases); significant portion of CEO pay “at risk,” with 50% of LTI performance‑based .
Say‑on‑Pay & Shareholder Feedback
- 2024 Say‑on‑Pay support: 90.17% approval; Compensation Committee viewed this as strong alignment endorsement .
Risk Indicators & Red Flags
- 280G Excise‑tax gross‑up applies to CEO upon CoC double‑trigger termination (shareholder‑unfriendly feature not extended to other NEOs) .
- Large CoC/death/disability equity acceleration values indicate substantial equity overhang and potential change‑in‑control cost (e.g., $50.3M–$51.3M) .
- Hedge/pledge prohibitions reduce alignment risks from derivatives and collateralized holdings .
- 2021–2024 PSU cash settlement portion due to share pool shortfall signals share reserve pressure (administrative/overhang consideration) .
Investment Implications
- Pay‑for‑performance architecture is robust: annual bonuses tied 50% to Non‑GAAP EBITDA and 50% to customer capture; LTI 50% PSUs with rigorous relative TSR and absolute stock price hurdles, supporting alignment with long‑term value creation .
- Retention is strong: sizable unvested RSUs/PSUs and quarterly RSU vesting cadence; however, the 2024 vesting volume (377,613 shares for CEO) implies periodic supply that can create selling pressure around vest dates absent trading restrictions .
- Governance trade‑off: combined CEO/Chair role concentrates authority but is offset by independent committees and an empowered Lead Independent Director; high say‑on‑pay support (90%+) suggests investors currently accept the structure .
- Change‑in‑control economics are meaningful (and include a CEO gross‑up), which may factor into M&A scenarios and shareholder assessments of transaction costs .
Key data items for traders and PMs:
- 2024 bonus payout at 62.5% of target on EBITDA + new orders mix; EBITDA miss, order intake maxed **[1158114_0001104659-25-040212_tm252340-6_def14a.htm:34]**.
- 2024 CEO equity: ~94.8k RSUs + 94.8k PSUs at target; PSUs measured to 4/29/2027 with absolute stock price gates up to $20.70 (200% payout) and relative TSR curve (75th percentile = 200%) **[1158114_0001104659-25-040212_tm252340-6_def14a.htm:43]** **[1158114_0001104659-25-040212_tm252340-6_def14a.htm:35]**.
- Beneficial ownership: CEO ~1.9% (1,022,488 shares incl. near‑term vesting RSUs) **[1158114_0001104659-25-040212_tm252340-6_def14a.htm:76]** **[1158114_0001104659-25-040212_tm252340-6_def14a.htm:77]**.
- Hedge/pledge prohibited; ownership guideline: CEO 5x base salary; compliant **[1158114_0001104659-25-040212_tm252340-6_def14a.htm:37]** **[1158114_0001104659-25-040212_tm252340-6_def14a.htm:38]**.