Hong Zhida
About Hong Zhida
Chairman of the Board, Chief Executive Officer, President and Secretary of Addentax Group Corp. (ATXG); age 35; appointed to the Board on March 10, 2017 . Bachelor’s Degree in Electronic Information Science and Technology from Sun Yat-sen University (July 2013) . Recent “Pay vs. Performance” disclosure shows stable CEO total pay of $17,229 for FY2022–FY2024 while net loss widened from $(77,998) in FY2022 to $(1,319,657) in FY2023 and $(3,109,418) in FY2024, indicating no variable pay linked to performance outcomes .
Governance note: Hong serves dual roles as Chairman and CEO; the Board believes this structure is appropriate, with independent oversight through committees . Family relationship disclosed: Hong Zhida (executive officer) and Hong Zhiwang (director) are brothers .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| China Huiying Joint Supply Chain Group Co. Ltd. | Director | Jun 2014 – Present | Assisted chairman to plan development strategy |
| Guangzhou Haifeng Chamber of Commerce | Head of Membership Department | Sep 2013 – May 2014 | Led membership management for the institution |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| China Huiying Joint Supply Chain Group Co. Ltd. | Director | Jun 2014 – Present | Current non-ATXG role |
Fixed Compensation
| Metric (USD) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary | $17,229 | $17,229 | $17,229 |
| Target Bonus % | Not disclosed | Not disclosed | Not disclosed |
| Actual Bonus Paid | $0 | $0 | $0 |
| Stock Awards | $0 | $0 | $0 |
| Option Awards | $0 | $0 | $0 |
| Non-Equity Incentive Comp | $0 | $0 | $0 |
| All Other Compensation | $0 | $0 | $0 |
| Total | $17,229 | $17,229 | $17,229 |
Notes:
- No employment agreement exists between ATXG and Hong Zhida .
- No equity incentive awards were granted or outstanding to named officers to date .
Performance Compensation
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Annual cash incentive | N/A | N/A | N/A | $0 | N/A |
| RSUs/PSUs | N/A | N/A | N/A | $0 | N/A |
| Stock options/SARs | N/A | N/A | N/A | $0 | N/A |
Plan architecture (approved 2024) allows options/SARs vesting typically in five equal installments and accelerated vesting at Change in Control at Committee discretion, but no awards have been granted to date .
Equity Ownership & Alignment
| Metric | May 29, 2024 | March 9, 2025 |
|---|---|---|
| Beneficial ownership (shares) | 150,795 | 245,894 |
| Ownership (% of outstanding) | 2.50% (of 6,043,769 shares) | 4.07% (of 6,043,769 shares) |
| Vested vs unvested | All beneficially owned; no outstanding awards | All beneficially owned; no outstanding awards |
| Options (exercisable / unexercisable) | None | None |
| Hedging/Hedging policy | Company prohibits hedging/monetization transactions | Company prohibits hedging/monetization transactions |
| Pledging | No pledging disclosure in proxy materials | No pledging disclosure in proxy materials |
Stock ownership guidelines and compliance status: not disclosed .
Employment Terms
| Term | Disclosure |
|---|---|
| Employment Agreement | None for Hong Zhida |
| Start Date on Board | March 10, 2017 |
| Roles | Chairman, CEO, President, Secretary and Director |
| Severance | Not disclosed (no employment agreement) |
| Change-of-Control | 2024 Equity Incentive Plan provides accelerated vesting and potential cash-out or substitution at Committee discretion for outstanding awards (none granted) |
| Clawback | Company has adopted a clawback policy for erroneously awarded compensation; awards subject to clawback and anti-hedging/pledging policies |
| Non-compete / Non-solicit | Not disclosed |
Board Governance
- Board service history: Director since March 10, 2017; currently Chairman and CEO .
- Independence: Board has five directors; three are independent under Nasdaq rules (Li Weilin, Alex P. Hamilton, Xiao Jiangping) .
- Committees and roles:
- Audit: Chair Alex P. Hamilton (Audit Committee Financial Expert), members Li Weilin and Xiao Jiangping .
- Compensation: Chair Li Weilin, members Alex P. Hamilton and Xiao Jiangping .
- Nominating & Corporate Governance: Chair Xiao Jiangping, members Alex P. Hamilton and Li Weilin .
- Executive sessions: Independent directors held regular executive sessions in FY2023 .
- Board meetings and attendance:
- FY2023: Board held 8 meetings; all directors attended 100% .
- FY2024: Board held 1 meeting; all directors attended virtually .
- Dual-role implications: Board explicitly allows combined Chairman/CEO; cites balance via independent committees .
- Family relationships: Hong Zhida (executive officer) and director Hong Zhiwang are brothers .
Director Compensation (for context; Hong is an executive director)
Non-employee director annual cash retainer is $15,000, paid quarterly in advance; disclosed for independent directors (Hamilton, Xiao, Li) . The director compensation table covers non-employee directors; executive director compensation is reflected in the executive compensation table .
Related Party Transactions (Alignment and conflict checks)
| Item | FY 2023 | FY 2024 |
|---|---|---|
| Amount due from related party – Hong Zhida | — (not listed) | $2,154,759 (short-term, interest-free; to be repaid within one year) |
| Borrowings due to Hong Zhida | $901,110 (company owed Hong; net repayments in FY2023) | $0 (decrease due to repayment) |
Other related parties include Hongye Financial Consulting (Shenzhen) Co., Ltd. (controlled by CEO) and various subsidiaries’ legal representatives; balances were unsecured, non-interest bearing, repayable on demand .
Compliance and Filing Notes (trading signals)
- Section 16 filings: Late Form 3 initial ownership filings noted for several insiders including Hong Zhida (historic compliance oversight) .
- Hedging policy in place; clawback policy adopted (2023 8-K referenced in proxy) .
- Equity Incentive Plan approved by shareholders on June 28, 2024; 1,345,000 shares reserved; no grants to date .
Investment Implications
- Pay-for-performance alignment appears weak: CEO compensation is entirely fixed at a low level ($17,229) with no disclosed variable incentives or equity grants, while net losses widened in FY2024 versus prior years, signaling limited incentive linkage to performance outcomes .
- Ownership alignment improved: CEO’s beneficial ownership increased from 2.50% (150,795 shares) to 4.07% (245,894 shares) of outstanding shares as of proxy record dates, potentially strengthening long-term alignment; however, significant related-party receivable from the CEO ($2.15M) introduces governance/credit risk considerations .
- Retention risk: Absence of an employment agreement, severance terms, or structured equity awards suggests limited contractual retention hooks; though rising personal share ownership may serve as retention/commitment signal .
- Governance risks: Dual Chairman/CEO role and family relationship on the Board (brother as director) heighten independence concerns, partially mitigated by independent committee structures and 3/5 independent directors .
- Potential future incentives: The 2024 Equity Incentive Plan enables adoption of equity-based incentives with Change-in-Control protections; monitoring future grants and any accelerated vesting terms will be key for trading signals around corporate events .
Note: No Form 4 insider transaction data could be retrieved via available tools in this session; we searched ATXG filings and proxies but did not access Form 4 transaction records. Consider reviewing current Form 4s to assess vesting-related sales and insider selling pressure.