Peng Han
DGLYAbout Peng Han
Peng Han is Chief Operating Officer of Digital Ally (since November 2021) and joined the company in February 2010 after engineering roles at Tellabs, WMS Gaming, and Ingenient Technologies; he holds an M.S. in Computer Science from Iowa State University . Company performance context: Digital Ally reported net losses of $(21.7) million in 2024 and $(25.5) million in 2023, per the Pay Versus Performance disclosure . In 2024–2025, the Compensation Committee emphasized cash conservation (voluntary salary reductions) and service-vesting equity awards; no cash bonuses were paid for 2023 or 2024 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Digital Ally | Chief Operating Officer | Nov 2021–present | Oversees operations; long-tenured product/software leader |
| Digital Ally | CTO; VP Engineering; Software Manager; Lead Software Engineer | 2010–2021 | Led development of software/hardware, real-time embedded systems, video tech |
| Ingenient Technologies | Senior Staff Engineer | 2005–2010 | Embedded multimedia systems engineering |
| WMS Gaming | Core Software Engineer | 2004–2005 | Gaming software development |
| Tellabs | Software Engineer | 2001–2003 | Telecom software/hardware solutions |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Ingenient Technologies | Senior Staff Engineer | 2005–2010 | Embedded multimedia systems |
| WMS Gaming | Core Software Engineer | 2004–2005 | Gaming software |
| Tellabs | Software Engineer | 2001–2003 | Telecom systems |
Fixed Compensation
| Year | Base Salary ($) | Bonus ($) | All Other Compensation ($) | Notes |
|---|---|---|---|---|
| 2024 | 112,885 | 0 | 5,706 | Officers voluntarily reduced base pay in 2024 to support cash flow |
| 2023 | 250,000 | 0 | 10,821 | No bonuses paid for 2023 |
- 2024 “All Other Compensation” includes: 401(k) match $4,885 and company-paid life/disability insurance $821; no company-paid healthcare/HSA disclosed for Han in 2024 .
- Committee set 2024 base salaries at $250,000 for Han but reduced actual paid as shown; same approach in 2023; both years had bonus eligibility but zero payout .
Performance Compensation
Annual Cash Bonus
| Plan Year | Target Opportunity | Metrics/Weighting | Target | Actual | Payout | Vesting/Timing |
|---|---|---|---|---|---|---|
| 2024 | Up to $125,000 | Performance-based; metrics not disclosed | Not disclosed | Not disclosed | $0 | Determined periodically in 2024; none awarded |
| 2023 | Up to $125,000 | Performance-based; metrics not disclosed | Not disclosed | Not disclosed | $0 | Determined periodically in 2023; none awarded |
Equity Awards (RSUs/Restricted Stock)
| Grant Date | Shares Granted | Grant-Date FV/Share | Grant-Date FV ($) | Vesting Schedule | Notes |
|---|---|---|---|---|---|
| Jan 31, 2024 | 8 | $4,260 | 31,950 | 2 vested immediately on Jan 31, 2024; 2 vest annually Jan 31, 2025–2028 (service-based) | As reflected in 2025 preliminary proxy |
| Jan 31, 2024 | 15,000 | — | — | 100% on Jan 31, 2025 or upon completion of the Kustom Entertainment transaction (whichever first) | As disclosed in 8-K; later proxy reflects split-adjusted counts/vesting |
| Jan 10, 2023 | 3 | $9,988 | — | 20% annually on Jan 10 from 2024–2028 (service-based) | Split-adjusted reflection of 100,000-share award from 8-K |
Vesting/realization activity:
- 2024 restricted stock vested: 2 shares for Han, value realized $10,670 based on vest dates/prices in January 2024 .
Equity Ownership & Alignment
| As-of Date | Beneficial Ownership (shares) | % of Outstanding | Breakdown | Vested vs Unvested | Options (exercisable/unexercisable) |
|---|---|---|---|---|---|
| Dec 31, 2024 | 8 unvested RSUs | — | 8 unvested restricted shares | 0 vested / 8 unvested | None outstanding at FYE 2024 per table |
| Nov 10, 2025 | 15 | <1% (“*”) | Includes (i) 9 restricted shares subject to forfeiture; and (ii) 1 share issuable upon exercise of vested options | Not fully broken out beyond 9 restricted | Footnote notes 1 share from vested options |
Additional alignment details:
- No disclosure of share pledging; beneficial ownership footnotes do not indicate any pledged shares .
- Equity plan context: options typically accelerate upon Change in Control per plan terms; RSU acceleration not explicitly disclosed in the excerpts .
Employment Terms
| Topic | Key Terms |
|---|---|
| Base salary setting | Committee set 2024 base at $250,000 for Han; officers voluntarily reduced actual cash salary paid to support cash flow . |
| Bonus eligibility | Eligible up to $125,000 for 2023 and 2024 based on performance; Committee to review periodically; no bonuses awarded . |
| Change-in-Control (CIC) completion payment | Upon completion of a CIC, if still employed at completion, lump-sum payment equal to three months of base salary (net of withholding) . |
| CIC severance (within 1 year post-CIC if terminated without Cause or resign for Good Reason) | Lump-sum severance equal to 12 months base salary (higher of rate at termination or at Good Reason event), plus 18 months company-paid health benefits, and full vesting of outstanding employee stock options with a 90-day post-termination exercise window . |
| “Cause” definition and cure | Detailed “Cause” definition; company must give written notice and 30-day cure period before termination for Cause . |
| Equity plan mechanics | Options granted at or above FMV; generally service-vest; options typically accelerate upon Change in Control per plan terms . |
Compensation Structure Analysis
- Cash conservation and at-risk pay: 2024 actual base salaries were voluntarily reduced, and no annual bonuses were paid for 2023–2024 despite eligibility—shifting realized pay toward equity and conserving cash during significant losses .
- Increased use of service-vesting RSUs: Awards in 2023–2024 were predominantly time-based RSUs with multi-year vesting through 2028, suggesting retention emphasis rather than performance-conditioned PSUs .
- Performance metric opacity: Bonus metrics/weightings were not disclosed; payouts were discretionary/performance-based but resulted in zero awards, limiting visibility into pay-for-performance rigor .
- Equity award modifications/consistency: The 8-K (Feb 2024) described a 15,000-share RSU vesting-in-full at Jan 31, 2025 or transaction completion, whereas the proxy reflects split-adjusted counts and staged vesting (2 immediate + 2 annually 2025–2028), indicating plan and/or adjustment alignment over time; investors should reconcile award mechanics across filings before modeling supply .
Risk Indicators & Red Flags
- Late Section 16 filing: The company disclosed that Han Peng had one untimely Form 4 in 2023 (administrative compliance flag) .
- CIC payment feature: A three-month base-salary lump-sum paid upon CIC completion (even if no termination) can be perceived as a shareholder-unfriendly “deal completion” bonus, though the absolute dollar amount at Han’s salary is modest .
- Limited ownership: Beneficial ownership <1% and small absolute holdings (15 shares as of Nov 10, 2025) suggests limited direct equity alignment; however, multi-year RSUs create some retention linkage .
Equity Ownership & Vesting Schedules (Detail)
| Award | Grant Date | Shares | Vesting |
|---|---|---|---|
| RSU (proxy reflection) | Jan 31, 2024 | 8 | 2 vested Jan 31, 2024; 2 each on Jan 31, 2025–2028, service-based |
| RSU (8-K disclosure) | Jan 31, 2024 | 15,000 | 100% on Jan 31, 2025 or upon completion of Kustom Entertainment transaction, whichever first |
| RSU (proxy reflection of 2023 grant) | Jan 10, 2023 | 3 | 20% annually on Jan 10, 2024–2028, service-based |
| RSU (8-K disclosure) | Jan 10, 2023 | 100,000 | 20,000 annually on Jan 10, 2024–2028, service-based |
Vesting realized in 2024:
- 2 shares vested for Han; value $10,670 on vesting dates in January 2024 .
Employment Contracts, Severance, and Change-of-Control Economics
| Provision | Economics | Trigger | Notes |
|---|---|---|---|
| CIC completion bonus | 3 months base salary (lump-sum) | CIC completed while employed | Paid net of withholdings |
| CIC severance | 12 months base salary (lump-sum) | Termination without Cause or resignation for Good Reason within 1 year post-CIC | Plus 18 months company-paid health benefits; options fully vest and exercisable for 90 days |
| Clawback / tax gross-ups | Not disclosed | — | — |
| Non-compete / non-solicit | Not disclosed | — | — |
Director/Committee Governance Touchpoints
- Compensation Committee oversees base pay, RSU grants, and bonus eligibility; 2024 policy favored RSUs to CEO/COO; no director equity grants in 2024 .
- Compensation philosophy emphasizes incentives for earnings/profitability using both objective and subjective criteria; however, specific metrics/targets were not disclosed .
Investment Implications
- Alignment: Han’s realized pay skews toward service-vesting RSUs with no cash bonuses in 2023–2024, aligning with liquidity preservation amid losses; however, small absolute ownership (<1%) limits direct shareholder alignment and offers modest downside co-investment .
- Retention risk: Multi-year vesting through 2028 (from 2023 and 2024 awards) supports retention; the CIC package (12 months base + benefits; option acceleration) is moderate for a micro-cap and unlikely to drive material shareholder costs in aggregate .
- Trading signals/supply: Scheduled annual RSU vests (per proxy) create predictable but very small potential supply; reconcile the 8-K’s one-year cliff vest versus proxy’s staged vesting before modeling near-term unlocks given split-adjusted share counts .
- Governance risk: A disclosed late Form 4 for Han is a minor process red flag; continued monitoring of Section 16 timeliness and any hedging/pledging disclosures is warranted .