Zhilin Li

About Zhilin Li

Zhilin Li is Chairman, President, Chief Executive Officer, and interim Chief Financial Officer of China Pharma Holdings (CPHI). She has served as CEO since 2005 and a director since 2006, and previously founded and led Helpson (CPHI’s PRC operating subsidiary) as Chairman and CEO (1993–2005). She was formerly President of Haikou Bio-Engineering Institute and Vice President of the Sichuan Institute of Biology; she graduated from Sichuan University with a degree in biology . As context for performance alignment, FY24 revenue declined and EBITDA turned more negative versus FY23, and the company executed multiple reverse stock splits to address persistent low share price (see Performance & Track Record) .

Past Roles

External Roles

Fixed Compensation

Notes:

• The Summary Compensation Table shows no cash bonus and no stock/option awards for Ms. Li in 2022–2024 .
• A Helpson employment contract renewed effective January 1, 2025 provides a base salary of RMB 400,000 through December 31, 2029 (PRC subsidiary level) .

Performance Compensation

Key observations:

• No disclosed performance metrics tied to Ms. Li’s pay (e.g., revenue/EBITDA/TSR) and no variable cash payouts in 2022–2024 .
• Company equity plan permits options/RSUs/PSUs, with share pool expanded in 2023, 2024, 2025, but Ms. Li had no outstanding awards; as of the 2025 proxy, 48,200 restricted shares were outstanding company-wide and no options were outstanding .

Equity Ownership & Alignment

Additional alignment details:

• Vested vs. unvested shares: not disclosed for Ms. Li; no options outstanding; company-wide restricted shares outstanding but none reported for Ms. Li .
• Pledging/hedging: no pledging or hedging disclosures identified for Ms. Li .
• Ownership guidelines: no stock ownership guideline disclosures identified .

Context:

• Ownership % shifted materially across 2023–2025 due to capital actions and reverse stock splits; the company executed reverse splits (1:5 in Mar-2024; 1:10 in Apr-2025) and proposes authorization for up to 1:20 in 2025 ; specifically, 1:5 (Mar 6, 2024) and 1:10 (Apr 15, 2025) are disclosed . The 2025 proxy seeks authorization up to 1:20 in case of low-price compliance needs .

Employment Terms

• Current contract: Helpson renewed Ms. Li’s CEO agreement on January 1, 2025, expiring December 31, 2029; base salary RMB 400,000; pay may be adjusted based on performance .
• Severance/termination (PRC law): Severance equals average monthly compensation over prior 12 months times years of service, capped at 3x local average monthly salary; additional one month if no 30-day notice; no separate company-specific CIC or severance multiple disclosed .
• Clawback/gross-ups/non-compete: No clawback policy, tax gross-ups, or non-compete/solicit terms disclosed for Ms. Li .

Performance & Track Record

• Revenue fell ~35% YoY; EBITDA deteriorated into a larger loss, reflecting margin pressure and scale headwinds . EBITDA values marked with an asterisk lack embedded filing citations; Values retrieved from S&P Global.
• By category (10-K): CNS/Cardio revenue fell to $1.35M (from $1.62M), Anti-infection to $2.75M (from $3.57M), Digestive to $0.20M (from $1.09M), Other to $0.18M (from $0.73M) in FY24, highlighting broad-based declines .
• The company reported negative gross margins of -43.8% in FY24 (vs. -4.0% in FY23), citing idle costs, inventory impairments, and sales decline .
• Market/TSR context: Multiple low-price deficiency notices and reverse stock splits (1:5 on Mar 6, 2024; 1:10 on Apr 15, 2025) to address listing standards; 2025 proxy seeks up to 1:20 authorization amid ongoing low-price risk .

References for reverse split/low-price actions:

• 2023 proxy: deficiency letter, reverse split up to 1:10 approved .
• 2024 proxy: authorization between 1:10 and 1:20 .
• 2025 8-K/press release: 1-for-10 reverse split effective Apr 15, 2025 .
• 2024 10-Q/10-K: 1-for-5 reverse split effective Mar 6, 2024 .

Board Governance

• Roles: Ms. Li is Chairman and CEO (non-independent). One additional non-independent director (Heung Mei Tsui). Three independent directors (Bennett, Zhang, Dong) .
• Committees: Audit Committee (Bennett—Chair & “financial expert,” Zhang, Dong); Nominating & Compensation Committee (Zhang—Chair, Bennett, Dong) .
• Executive sessions and activity: Board met 4 times in FY24; Audit Committee met 5 times (1 executive session); Nominating & Compensation Committee met once (in executive session) .
• Independence and leadership: Board explicitly supports combined CEO/Chair role; no Lead Independent Director disclosed .
• Attendance: Ms. Li attended the prior annual meeting (FY23 year) .

Board-service history for Ms. Li:

• Director since 2006; executive leadership since 2005 .

Director Compensation (for context on dual roles)

• Independent director annual retainers: Bennett $16,000; Zhang/Dong RMB 40,000 (~$5.6K) in FY24–FY25 engagement renewals; Bennett also entitled to warrants (5,000/year) though unissued or unexercised as of filings .
• Ms. Li’s board service is included in her executive compensation line; no separate director fee for her .

Related Party Transactions (governance red flags)

• Loans from Ms. Li to the company: RMB 4,770,000 (~$738,379) at 4.35%, extended annually, due July 9, 2025; interest expense ~$27K in FY24; borrowings from related parties totalling ~$1.145M owed to Ms. Li at Dec 31, 2024; compensation payable to Ms. Li recorded at ~$1.56M at Dec 31, 2024 .
• In 2023, a prior director loan (Ms. Tsui) was transferred to Ms. Li; the company settled by issuing 13,757,063 shares to Ms. Li on Sept 29, 2023 .

Compensation Structure Analysis

• Cash-heavy, low “at-risk” mix: Across 2022–2024 there were no cash bonuses, no equity awards, and no disclosed performance metrics; compensation is dominated by base salary and fixed allowances .
• Upward shift in guaranteed cash: Base salary rose from $225,600 (2022–2023) to $300,000 in 2024, while revenue and profitability declined, weakening pay-for-performance optics .
• Equity plan expansion vs. usage: Share pool expanded significantly (e.g., Amendment No.3 to 569,600 shares in 2025), but no grants to Ms. Li; company-wide 48,200 restricted shares outstanding and no options outstanding as of 2025 proxy .
• No evidence of repricing or modification of awards; no tax gross-ups disclosed; no clawback policy disclosure .

Say-on-Pay & Shareholder Feedback

• 2024 proxy included advisory “say-on-pay” and “say-when-on-pay” proposals; outcomes not disclosed in the proxy itself; an 8-K subsequently reported vote results for the meeting (not excerpted here) .

Equity Ownership & Selling Pressure Indicators

• No outstanding options or vesting schedules for Ms. Li; therefore, limited mechanical selling pressure from option exercises/vesting .
• Section 16 compliance noted (no systemic filing issues in FY24); 2023 noted a delayed Form 4 for Ms. Li regarding the settlement issuance; no pattern of insider selling disclosed in proxies .
• Significant beneficial ownership persists (6.03% as of Nov 3, 2025), aligning incentives but with substantially lower percentage post reverse splits and dilutive events .

Investment Implications

• Pay-for-performance misalignment: Fixed pay increased in FY24 despite materially lower revenue and worsening EBITDA, and absent disclosed performance metrics or variable pay; investors may press for introducing objective financial/TSR hurdles and meaningful at-risk equity for the CEO .
• Retention vs. dilution trade-off: Ms. Li remains a 6% holder, supporting alignment, yet the board is expanding the long-term incentive share pool materially; absent transparent grant practices and performance conditions, the expansion raises dilution risk without guaranteed alignment benefits .
• Governance risk: Combined CEO/Chair role without a Lead Independent Director and reliance on PRC-law severance only concentrates governance risk in a challenged operating/market context; nonetheless, committees are fully independent and active .
• Liquidity/going-concern and capital structure: Related-party financing from Ms. Li underscores support but also dependency; FY24 negative gross margins and low-price compliance actions (reverse splits) indicate elevated operational and listing risks; corporate actions may continue to affect TSR .
• Trading signals: Absence of insider selling and no outstanding CEO equity awards imply limited near-term forced selling; however, future equity issuance under the enlarged plan could become an overhang if not accompanied by rigorous performance conditions and transparent grant disclosure .

Appendix: Company Financial Performance (for alignment context)

*Values retrieved from S&P Global.

Citations:

• Executive biography, age, tenure and roles:
• Compensation tables and plan usage:
• Ownership tables and share counts:
• Committee composition, governance structure, and board activity:
• Related-party loans and settlements:
• Reverse split actions/authorizations and low-price compliance:
• Performance context (revenues, margins):