John Chen
About John Chen
John Chen, age 46, serves as Executive Chairman and Director of FGI Industries and has held this role since the company’s incorporation in 2021; prior roles include EVP of Corporate Development (2019–2021) at FGI Industries . He holds a BA from the University of Chicago and a JD from Georgetown University Law Center . Company performance in 2024 included 12.4% revenue growth to $131.8M and a net loss of $1.7M, with gross margin at 26.9% versus 27.4% in 2023, providing context for incentive outcomes during his tenure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| FGI Industries Ltd. | Executive Chairman & Director | 2021–present | Board leadership, agenda-setting, CEO guidance |
| FGI Industries (Foremost Groups Inc. predecessor unit) | EVP, Corporate Development | 2019–2021 | Corporate strategy, financial controls, capital allocation oversight |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Davis Selected Advisors | Equity Research Analyst | 2007–2018 | Public equities analysis and long-term investing expertise |
| Milbank, Tweed, Hadley & McCloy | Securities Lawyer | 2005–2007 | Legal and regulatory experience in securities law |
Fixed Compensation
| Metric (USD) | 2023 | 2024 |
|---|---|---|
| Base Salary | $200,000 | $207,692 |
| Cash Bonus (Actual) | $30,000 | $0 |
| Share Awards (Grant-date fair value) | $60,000 | $180,000 |
| Option Awards (Grant-date fair value) | $60,000 | $180,000 |
| All Other Compensation | $0 | $12,702 |
| Total Compensation | $350,000 | $580,394 |
Performance Compensation
Annual Management Incentive Bonus (MIB)
| Item | 2023 | 2024 |
|---|---|---|
| Performance Metrics | Adjusted Net Income; ROIC | Revenue; Adjusted Net Income |
| Weighting | 50% ANI; 50% ROIC | 70% Revenue; 30% ANI |
| Target Levels | Not disclosed | Not disclosed |
| Actual Performance | Below target; no vesting | Below threshold; no vesting |
| Payout | $0 | $0 |
2024 Equity Incentive Structure (Options and PSUs)
| Grant Date | Type | Shares/Options | Exercise Price | Grant-Date Fair Value | Performance Metrics | Vesting Schedule | Status/Payout |
|---|---|---|---|---|---|---|---|
| 3/22/2024 | Performance Stock Options | 120,000 | $1.50 | $180,000 | Revenue (30%), Adjusted Net Income (20%), ROIC (50%) | 1/3 at first anniversary; then monthly 1/36 over two years; subject to performance | 2024 performance below weighted average; no portion vested |
| 3/22/2024 | Performance RSUs | 120,000 (target) | N/A | $180,000 (total share awards year) | ROIC over three-year period | Three-year performance period; contingent vesting | Unvested at 12/31/2024 |
Note: Prior-year awards include performance/service-based grants; see “Outstanding Equity Awards” for details .
Equity Ownership & Alignment
Beneficial Ownership
| Metric | 2024 (Record date: Apr 24, 2024) | 2025 (Record date: Apr 24, 2025) |
|---|---|---|
| Shares Beneficially Owned | 17,834 | 26,750 |
| Options Exercisable Within 60 Days | 49,877 | 98,373 |
| Ownership % of Outstanding Shares | <1% | 1.3% |
Policies prohibit pledging, margin purchases, short sales, options, and hedging of company stock by directors/officers, supporting alignment (approved 10b5-1 plans excepted) .
Outstanding Equity Awards (as of Dec 31, 2024)
| Grant Date | Type | Exercisable Options | Unexercisable Options | Unearned Performance Options | Exercise Price | Unvested RSUs (Shares) | Market Value of Unvested RSUs (at $0.78) |
|---|---|---|---|---|---|---|---|
| 3/22/2024 | Performance Options | — | — | 120,000 | $1.50 | — | — |
| 3/22/2024 | Performance RSUs | — | — | — | — | 120,000 | $93,600 |
| 3/29/2023 | Performance RSUs | — | — | — | — | 28,916 | $22,554 |
| 5/13/2022 | Service Options | 28,262 | 20,187 | — | $2.26 | — | — |
| 3/30/2022 | Service Options | 21,427 | 1,948 | — | $3.07 | — | — |
| 1/24/2022 | Service RSUs | — | — | — | — | 8,917 | $6,955 |
Footnote: Market values use FGI closing price $0.78 on 12/31/2024; exercisable/unexercisable counts shown per grant; performance options/RSUs contingent on stated metrics .
Employment Terms
- Compensation oversight: The Compensation Committee develops strategy, reviews executive compensation, and administers plans; it engaged HR Enterprises, LLC as independent consultant . The CEO can provide input on other executives but is not present for his own compensation decisions .
- Annual bonus program (MIB): Structure and metrics disclosed; target levels and individual contractual severance/change-of-control terms for John Chen are not disclosed .
Board Governance
- Role and independence: John Chen is Executive Chairman and a director; he is not classified as independent under Nasdaq rules, whereas three other directors are independent . FGI separates Executive Chairman and CEO roles, with the Executive Chairman setting board agendas and guiding the CEO .
- Committees and attendance: Chen is not a member of Audit, Compensation, or Nominating & Governance committees; committee chairs are independent (Audit: Heysse; Compensation: Weir; Nominating: Apte). Each director attended at least 75% of board/committee meetings in 2024 .
- Controlled company context: Foremost holds ~71% of voting power; FGI is a “controlled company” but does not currently rely on governance exemptions .
Performance & Track Record
- Company performance under tenure: 2024 revenue rose 12.4% to $131.8M; gross margin 26.9%; operating loss and net loss reflect investment and market conditions . These outcomes contributed to zero MIB payouts and non-vesting of 2024 performance options for executives, including Chen .
- Corporate actions and leadership transitions: Shareholders authorized a reverse split range (1-for-2 to 1-for-15) to support Nasdaq bid price compliance; mechanics and fractional handling disclosed . CFO transition announced for mid-2025, with resignation for personal reasons and appointment of successor; disclosure states no disagreements on company practices .
Director Service and Compensation (board service lens)
- Board service: Executive Chairman since 2021 .
- Committee roles: None; board leadership and governance oversight occur through independent committees .
- Director compensation: Non-employee director cash/equity retainers disclosed; not applicable to Chen as an employee director .
Compensation Structure Analysis
- Cash vs equity mix: 2024 compensation shifted toward equity ($180k PSUs and $180k options) with no cash bonus, versus 2023’s smaller equity and a $30k bonus .
- Pay-for-performance alignment: MIB payouts were $0 in both 2023 and 2024 due to performance below targets/thresholds; 2024 performance options did not vest, indicating discipline in incentive outcomes .
- Performance metric focus: 2024 options weighted 50% ROIC, 30% revenue, 20% adjusted net income; PSUs vest on ROIC over three years, emphasizing capital efficiency .
- Option strike vs market: 2024 option strike of $1.50 versus $0.78 year-end price indicates awards were underwater at 12/31/2024, limiting near-term exercise/selling pressure .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited under insider trading policy, reducing misalignment and leverage risks .
- Related-party environment: Foremost’s control and shared services/sourcing arrangements are disclosed; independent committees oversee governance, but concentration of control is a structural risk .
- Leadership turnover: CFO change disclosed as personal; still a retention/transition watchpoint near reporting cycles .
- Listing/bid price risks: Reverse split authorization signals focus on minimum bid compliance and potential market liquidity impacts .
Equity Ownership & Alignment Summary
- Skin-in-the-game: Chen’s beneficial ownership rose to 1.3% in 2025 from <1% in 2024, with 98,373 options exercisable within 60 days, indicating moderate alignment and exposure to equity upside .
- Unvested/contingent equity: Significant performance-based RSUs and options outstanding, heavily tied to ROIC and multi-year vesting .
- Ownership guidelines: Not disclosed; however, prohibitions on hedging and pledging reinforce alignment .
Investment Implications
- Incentive discipline: Zero MIB payouts and non-vesting of 2024 performance options suggest strong pay-for-performance alignment; ROIC-centric equity further ties outcomes to value creation .
- Selling pressure: Underwater options (strike $1.50 vs $0.78 at year-end) and multi-year performance vesting reduce near-term insider selling risk; hedging/pledging prohibitions limit misalignment .
- Governance balance: While Chen is a non-independent Executive Chairman, board structure separates leadership, and independent committees chair audit/comp/nomination functions; controlled-company dynamics remain a structural consideration .
- Trading catalysts/risks: Reverse split authorization to address bid-price compliance and upcoming CFO transition may contribute to near-term volatility; disclosures mitigate some governance risk (no disagreements) but warrant monitoring . Operationally, 2024 revenue growth amid margin pressures frames execution focus for incentive hurdles in 2025 .