Kenneth Lai
About Kenneth Lai
Kenneth Lai, age 52, is Vice President of Asia Operations at Bel Fuse (BELFA), appointed effective January 1, 2023. He joined Bel through the TRP Connector acquisition in 2013 and previously led Bel’s TRP Changping and Bel Power Solutions Gongming manufacturing sites; he holds a B.Eng. in Engineering Physics (Hong Kong Polytechnic University) and completed a mini‑EMBA at HKUST, with lean operations expertise and a track record transforming China manufacturing operations . Under his tenure as an NEO (2024), Bel’s annual revenue was $534.8M while the company posted one of its most profitable years; the company’s cumulative TSR rose to 574.48 for 2024 (vs. 463.18 in 2023), highlighting strong shareholder returns even as reported revenue moderated year over year .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Bel Fuse – Bel Power Solutions (Gongming) | General Manager | 2014–2022 | Transformed the site into a world‑class manufacturing operation for power supplies; drove lean improvements and operational restructuring . |
| Bel Fuse – TRP (Changping) | General Manager | 2013–2014 | Led TRP operations post-acquisition; continuity of customer/operations integration . |
| TE Connectivity (TRP Connector division) | R&D Mgr → Ops Mgr → Ops Director → Deputy GM → GM | ~1999–2013 | Progressively led engineering and operations culminating in GM in 2010; deep experience in high‑volume Asia manufacturing . |
External Roles
- No public-company directorships or external board roles disclosed in company filings for Mr. Lai .
Fixed Compensation
| Element (2024) | Amount | Notes |
|---|---|---|
| Base Salary | $225,000 | 2024 base rate for Lai as NEO . |
| All Other Compensation (2024) | $361,443 | Includes: Transportation allowance $24,809; Employer 401(k) match $52,875; Dividends on restricted shares $4,138; Other $279,621 (primarily $278,126 tax equalization) . |
Performance Compensation
| Metric design (2024) | Weighting | Target | Actual/Calculated | Committee decision | Payout and form |
|---|---|---|---|---|---|
| Matrix of Adjusted Net Revenue growth and Adjusted EBITDA growth (company/business unit); individual modifier | Matrix (two metrics; no explicit % weights) | Threshold 25% of target; Target 100% of target | Calculated payout: 0% (formulaic) | Committee adjusted for plan design issues and strong year; applied 30% reduction to target and used individual performance modifier | Modified target $157,500; Final payout 60% = $94,500, paid $70,875 in cash and $23,625 in time‑based restricted stock (3-year ratable vest starting 3/15/2025) . |
Additional 2024 equity grant activity:
- Grants of Plan-Based Awards (3/15/2024): 1,370 shares of Class B RSAs; grant-date fair value $76,500 .
Stock awards vested during 2024:
| Name | Shares vested | Value realized |
|---|---|---|
| Kenneth Lai | 4,000 | $285,985 . |
Equity Ownership & Alignment
- Beneficial Ownership (as of April 1, 2025): 16,155 Class B shares; includes 11,699 restricted shares; less than 1% of Class B outstanding .
- Outstanding unvested RSAs (as of Dec 31, 2024): 11,870 shares; market value $978,919 (based on $82.47) .
- Options: None outstanding for NEOs as of Dec 31, 2024 .
- Hedging/Pledging: Hedging prohibited; pledging restricted (non‑margin only with pre‑approval). No pledges disclosed for Mr. Lai in the proxy .
- Ownership guidelines: No executive stock ownership guideline disclosure identified in the proxy; directors’ and insider trading policies disclosed .
Vesting schedule (unvested RSAs as of 12/31/2024)
| Vesting date | Shares |
|---|---|
| 03/15/2025 | 456 |
| 05/15/2025 | 1,500 |
| 11/15/2025 | 2,500 |
| 03/15/2026 | 456 |
| 05/15/2026 | 1,500 |
| 11/15/2026 | 2,500 |
| 03/15/2027 | 458 |
| 11/15/2027 | 2,500 |
Implication: Multiple mid‑March, mid‑May, and mid‑November vesting dates could create periodic supply/selling pressure if shares are sold upon vest; monitor Form 4s around these dates .
Employment Terms
- Appointment and Offer Letter: Appointed VP Asia Operations effective Jan 1, 2023; offer letter dated July 27, 2022 with base salary $225,000, additional allowances (auto, housing, medical, PRC tax remittances); RSAs covering 10,000 Class B shares to be awarded in Nov 2022; eligible for year‑end discretionary bonus per company plan .
- Severance: Offer letter does not provide severance; the company’s standard severance plan does not cover Mr. Lai; thus, generally no severance benefits .
- Retirement/Deferred: Participates in Supplemental Executive Retirement Plan (SERP); present value $305,616 as of 12/31/2024. Not eligible for SERP benefits upon normal termination or retirement as of that date; would receive a life annuity of $5,867/month only if terminated on or following a change in control .
- Far East Retirement Plan (Hong Kong MPF framework): Company match equated to 10% of Lai’s annual cash earnings in 2024 .
- Clawback: Company-wide clawback policy compliant with SEC rules; applicable to incentive‑based compensation .
- Hedging/Pledging: Hedging prohibited; pledging restricted with pre‑approval and non‑margin debt only .
Performance & Track Record
Annual revenue and EBITDA trend
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenue ($) | 654,233,000 | 639,813,000 | 534,792,000 |
| EBITDA ($) | 84,788,000* | 106,626,000* | 96,531,000* |
| Values with asterisk retrieved from S&P Global. |
Recent quarterly momentum (Revenue and EBITDA)
| Metric | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue ($) | 140,010,000 | 128,090,000 | 133,205,000 | 123,638,000 | 149,859,000 | 152,238,000 | 168,299,000 | 178,980,000 |
| EBITDA ($) | 23,385,000* | 21,357,000* | 26,454,000* | 15,926,000* | 32,793,999* | 28,569,000* | 32,460,000* | 37,234,000* |
| Values with asterisk retrieved from S&P Global. |
Selected achievements and execution factors
- 2024 was one of Bel’s most profitable years; record-high gross margin; completion of the largest acquisition in company history (Enercon), and substantial stock appreciation; Lai’s 2024 payout reflected contributions to restructuring product lines and manufacturing sites in China .
- Pay-versus-performance table shows cumulative TSR of 574.48 for 2024 vs. 463.18 in 2023, indicating strong shareholder returns through 2024 .
Compensation Committee Analysis and Governance
- Independent compensation consultant: Meridian engaged in 2024; program redesigned (originally adopted in 2023) to better align with performance and market; NEO total target direct compensation calibrated within a reasonable range of the 25th percentile vs. peer group .
- 2025 program changes: Measures to be assigned annually; for 2025 include target net revenue (dollars) and non‑GAAP Adjusted EBITDA margin (% of net sales); mix continues cash + restricted stock, and committee expects annual PSUs with 3‑year vesting tied to total stock return or other metrics .
- Say‑on‑Pay (2024): Passed with 1,353,089 For; 13,966 Against; 1,338 Abstentions (broker non‑votes 295,371) .
Compensation Peer Group (for 2024 pay setting)
Peer group used included Allient (Allied Motion), CTS, FARO Technologies, Kimball Electronics, NETGEAR, Photronics, Powell Industries, Veeco Instruments, Vishay Precision Group, and others across comparable electronics/industrial tech segments; NEOs’ target total direct pay around the 25th percentile of peers .
Related-Party and Risk Indicators
- 2024 incentive outcomes relied on a discretionary override after formulaic results produced 0% for several NEOs; while justified by achievements (margins, TSR, Enercon), discretionary adjustments can be a governance red flag if persistent .
- Tax equalization benefit of $278,126 for Lai in 2024 is notable; reflects cross‑border assignment complexity but adds to non‑performance pay .
- No new related‑party transactions reported in 2024; Audit Committee oversees and pre‑approves any such transactions .
Investment Implications
- Alignment and retention: Lai has substantial unvested equity (11,870 shares at 12/31/24) with multi‑year vesting through Nov 2027, supporting retention; lack of severance coverage increases reliance on ongoing equity and career incentives for retention .
- Execution leverage: His remit over Asia operations and demonstrated restructuring/lean credentials are tied directly to margin sustainability and manufacturing flexibility—a key driver given Bel’s 2024 record gross margins and ongoing Enercon integration .
- Watch‑items for trading/supply: Time-based RSAs vest in concentrated March/May/November windows; monitor Form 4s and liquidity around 3/15, 5/15, and 11/15 each year through 2027 for potential selling pressure .
- Pay program outlook: Introduction of PSUs and EBITDA margin metrics in 2025 should strengthen pay-for-performance line-of-sight; continued reliance on discretionary adjustments would merit scrutiny if repeated .