Tu To
DAILY JOURNALAbout Tu To
Tu To (age 62) is Chief Financial Officer of Daily Journal Corporation, serving as principal financial officer and principal accounting officer since March 2022, after roles as Vice President (since September 2019) and Controller (since 1994); she began at the company in 1987 and passed the AICPA uniform exam in 1995 . Under the supervision and participation of the CEO and CFO, management concluded disclosure controls were not effective as of FY2024 due to material weaknesses and initiated a remediation program in fiscal 2025 following a third‑party assessment completed in July 2024 . Company performance in FY2024: consolidated revenues rose 3% to $69.9M, and net income increased to $78.1M, largely driven by realized and unrealized gains on marketable securities; total shareholder return (TSR) tracked by the company’s pay‑versus‑performance table rose to $152.98 (value of a $100 investment), versus $91.77 in 2023 and $80.03 in 2022 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Daily Journal Corporation | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 2022 – Present | Oversaw disclosure controls; co-led internal control evaluation and remediation planning begun in FY2025 after material weaknesses were identified in FY2024 |
| Daily Journal Corporation | Vice President | September 2019 – March 2022 | Senior finance and operations leadership across publishing and Journal Technologies |
| Daily Journal Corporation | Controller | 1994 – September 2019 | Long‑tenured financial management; institutional knowledge of segment reporting and incentive plan mechanics |
| Daily Journal Corporation | Accounting Department | 1987 – 1994 | Early career in accounting; passed AICPA uniform examination in 1995 |
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $210,000 | $215,000 |
| Annual Bonus ($) | $40,000 | $40,000 |
| Stock Awards ($ fair value) | — (none disclosed) | — (none disclosed) |
| Total Fixed Cash ($) | $250,000 | $255,000 |
Performance Compensation
| Item | FY 2023 | FY 2024 |
|---|---|---|
| Program | Management Incentive Plan (MIP) – share of pre‑tax earnings (excludes workers’ comp, supplemental comp, and realized/unrealized investment gains/losses) | Management Incentive Plan (same basis) |
| Metric weighting | Not disclosed | Not disclosed |
| Target | Not disclosed | Not disclosed |
| Actual Company Basis | Earnings before taxes (adjusted per plan) | Earnings before taxes (adjusted per plan) |
| Ms. To’s certificate percentage | 1.36% of Company pre‑tax earnings | 1.27% of Company pre‑tax earnings |
| Payout ($) | $193,060 | $166,290 |
| Vesting / payment terms | Certificates pay out annually for up to 10 years; payments continue while employed or retired at/after age 65 (non‑compete with Company), with beneficiaries receiving future payments upon death | Certificates pay out annually for up to 10 years; Ms. To’s certificates that expired in FY2023 and FY2024 were not replaced |
Equity Ownership & Alignment
| Measure | Detail |
|---|---|
| Beneficial ownership (shares) | None as of December 31, 2024 |
| Ownership % of outstanding | Not disclosed; table shows “None” for shares owned |
| Vested equity/RSUs | None disclosed for Ms. To; CEO held RSUs only |
| Options (exercisable/unexercisable) | None disclosed |
| Shares pledged | Not disclosed; Company policy specifically prohibits hedging, not pledging |
| Stock ownership guidelines | Not disclosed |
| Anti‑hedging policy | Prohibits all officers, employees, and directors from hedging Company stock or compensatory awards tied to stock performance |
Additional alignment context: the Company implemented a 2024 Equity Incentive Plan and granted equity to the CEO; Ms. To did not receive equity grants in FY2023–FY2024, remaining primarily cash/MIP‑paid .
Employment Terms
| Term | Detail |
|---|---|
| Employment start date in current role | March 2022 (CFO) |
| Contract term | No employment contract |
| Severance | None (no special payments upon termination) |
| Change‑of‑control | None (no payments or benefits; CEO’s RSUs accelerate, not applicable to Ms. To) |
| Non‑compete / non‑solicit | Not disclosed |
| Garden leave / consulting | Not disclosed |
| Clawback policy | Company has a Policy Regarding Erroneously Awarded Compensation (Exhibit 97) |
| 10b5‑1 trading | Company has not adopted a Rule 10b5‑1 plan; no directors or executive officers adopted or terminated Rule 10b5‑1 or non‑Rule 10b5‑1 arrangements in Q4 2024 |
| Insider family relationships | The Company employs the CFO’s sister (Assistant Controller) and brother (IT Director); aggregate compensation was $412,000 in FY2024 ($406,000 FY2023) |
Company Performance Context During Tenure
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Consolidated Revenues ($000) | — | $67,709 | $69,931 |
| Net Income ($000) | ($75,624) | $21,452 | $78,113 |
| Value of $100 Investment (TSR) | $80.03 | $91.77 | $152.98 |
Controls and procedures: Management (including CEO and CFO) reported material weaknesses in internal control over financial reporting in FY2024; a third‑party assessment in July 2024 led to a remediation program commencing in FY2025 .
Compensation Committee and Governance
- Compensation committee members: John B. Frank, Rasool Rayani, Mary Conlin; the committee determines CEO and CFO compensation, operates under a written charter attached to the 2021 proxy, and does not use compensation consultants .
- Meetings in FY2024: Compensation committee held four meetings; all directors attended their applicable meetings .
- Director compensation program revised in FY2024 to include $25,000 cash retainer and RSUs valued at ~$25,000 per year; subject to shareholder approval to settle RSUs in stock; RSUs accelerate upon change in control .
Compensation Structure Analysis
- Shift in pay mix: Ms. To’s compensation remained cash‑centric (salary, bonus, MIP); no equity grants were disclosed for FY2023–FY2024, while the CEO began receiving equity under the new plan .
- At‑risk pay linkage: MIP payouts are formulaically linked to Company pre‑tax earnings (adjusted), aligning payouts with profitability, though Ms. To’s certificate percentage declined and expired certificates were not replaced, reducing forward payout potential .
- Program changes ahead: Management paused new MIP grants in FY2023 due to dilution concerns and intends to propose a replacement plan in FY2025, creating uncertainty about future incentive design and retention impact for legacy participants .
Risk Indicators & Red Flags
- Internal controls: Material weaknesses in internal control over financial reporting (segregation of duties and insufficient accounting resources) represent execution and reporting risk; remediation efforts are underway .
- Related party transactions: Employment of CFO’s siblings in accounting and IT is noteworthy for governance diligence; compensation disclosed and modest in scale relative to Company size .
- Hedging: Anti‑hedging policy reduces misalignment risk by prohibiting economic hedging by officers .
- Trading arrangements: No 10b5‑1 plans were adopted or terminated in Q4 2024 by the Company or its insiders, implying any future insider trades could be outside pre‑arranged plans .
Investment Implications
- Alignment: Ms. To’s pay is tied to Company profitability via the MIP, supporting pay‑for‑performance; however, lack of equity exposure (no RSUs/options) and zero reported share ownership reduces direct stock‑price alignment and likely lowers insider selling pressure risk from vesting events .
- Retention risk: With Ms. To’s MIP certificate percentage declining and expired certificates not replaced, and with the program paused pending a new design in FY2025, there is compensation uncertainty that could affect retention and motivation until a successor plan is implemented .
- Change‑of‑control economics: No employment contract, severance, or special change‑of‑control payments for the CFO limit transaction costs and reduce golden parachute risk; only CEO equity accelerates on change in control .
- Execution risk: Material weaknesses in internal control under management oversight pose near‑term reporting risk; progress on remediation in FY2025 will be an important watch item for investors assessing financial rigor and audit outcomes .
- Governance monitoring: Related‑party employment and a compensation committee operating without external consultants warrant continued attention to ensure objective pay decisions and robust oversight .