OC Kim
About OC Kim
OC Kim is President, CEO, and a Director of Franklin Wireless (since 2003), age 60, with a B.A. from Sogang University and ~30 years in telecom sales, marketing, and operations . During his tenure, consolidated net sales fell 33% in FY2024 to $30.8M from $45.9M in FY2023 amid demand shifts, while TSR recovered in FY2025 versus FY2024; the company posted net losses in FY2023–FY2025 . A 2023 jury verdict found Kim liable for Section 16(b) short‑swing profits; a June 2024 settlement required Kim to pay the Company $1.0M and the Company to pay $0.55M in plaintiff attorneys’ fees, with reciprocal releases .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Franklin Wireless / Franklin Telecommunications (post-merger) | President, CEO, Director | 2003–present | Led product launches in 5G/4G hotspots/routers; maintained carrier relationships; oversaw JV formation with MeiG |
| Accetio Inc. | Founder, CEO, President | Pre‑2003 | Developed wireless modules; merged with Franklin Telecommunications to form Franklin Wireless |
| Kolon California / Kolon Data Communications | General Manager | Prior years | Introduced first‑gen CDMA phones in Korea via QPE JV work with Qualcomm/Sony |
| Lucky Goldstar (LG) Electronics | Early career | Prior years | Sales/operations foundation in consumer electronics and telecom |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | No other public-company directorships disclosed for Kim in last five years . |
Fixed Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Base Salary ($) | $300,000 | $300,000 | $300,000 |
| Car Allowance ($/mo) | $700 | $700 | $700 |
| Summary Compensation Table Total ($) | $675,000 | $800,000 | $2,821,068 |
Notes:
- Employment agreement sets salary at $300,000 annually; company may modify compensation at its discretion .
- FY2025 SCT total includes the option repurchase transaction (non‑cash net applied to Kim’s receivable) and accrued bonuses (see Performance Compensation) .
Performance Compensation
| Element | Metric/Target | Weighting | Actual FY Outcome | Payout ($) | Vesting/Timing |
|---|---|---|---|---|---|
| Quarterly Incentive Bonus (Employment Amendment) | $125,000 per quarter for remaining 4‑year term (from 11/10/2022) | Discretionary Board plan; targets not disclosed | Accrued $375,000 (FY2023); $500,000 (FY2024); $500,000 (FY2025) | Paid $25,001 in Dec 2024; otherwise accrued (unpaid as of 6/30/2025) | Quarterly; accruals persist until paid |
| Special JV Bonus | $1,250,000 for securing MeiG JV (Board resolution 4/5/2024) | Strategic transaction; no disclosed metric weighting | Earned 9/23/2024; accrued 1/16/2025 | $1,250,000 accrued; unpaid as of 6/30/2025 | Deferred under Forbearance Agreement (1‑year period from 9/23/2024) |
| Pay vs. Performance (PEO) | SEC Item 402(v) | — | PEO “Compensation Actually Paid”: $300k (FY2023), $300k (FY2024), $1,071,068 (FY2025 incl. option repurchase); TSR and Net Income as below | N/A | N/A |
| Pay vs. Performance (PEO) | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Compensation Actually Paid to PEO ($) | $300,000 | $300,000 | $1,071,068 (incl. $746,067 option repurchase value) |
| TSR – Value of $100 Investment | $17.67 | $14.51 | $31.86 |
| Net Income (Loss) ($) | $(2,863,021) | $(3,964,016) | $(243,101) |
Compensation structure observations:
- Bonuses are discretionary, set quarterly by the Board; specific financial/ESG/TSR metric weightings are not disclosed, indicating limited transparency in pay‑for‑performance alignment .
- The $1.25M JV bonus is tied to a transaction milestone rather than ongoing financial performance metrics .
Equity Ownership & Alignment
| Item | As of Sept 30, 2024 | As of Sept 30, 2025 |
|---|---|---|
| Shares Beneficially Owned (#) | 1,096,695 | 1,096,695 |
| Ownership (%) | 9.3% | 9.3% |
| Shares Outstanding (#) | 11,784,280 (as of 9/30/2024) | — |
| Options Outstanding | 200,000 exercisable; 33,029 unexercisable; $3.38 strike; expire 12/27/2026 | Not listed among outstanding awards at FY2025 year‑end |
| Option Repurchase | — | Company repurchased fully‑vested options to purchase 200,000 shares for $746,066.67 (closing 5/15/2025); $408,663 withheld for taxes; $337,404 applied to Kim’s receivable |
Policies and alignment signals:
- Insider Trading Policy prohibits hedging, short sales, and derivatives; restricts margin/pledging without advance approval, with trading blackout windows and pre‑clearance requirements .
- Mandatory Dodd‑Frank/NYSE/Nasdaq clawback (recoupment) policy adopted; applies to incentive‑based compensation upon restatement; no indemnification for clawback losses .
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement (9/7/2021) | Salary $300,000; semi‑monthly; $700/month car allowance; bonuses via discretionary performance incentive program; at‑will employment; arbitration; Board may modify compensation/benefits |
| Amendment (11/10/2022) | Severance: $3,000,000 if Kim voluntarily terminates or upon “change in circumstances”; $1,500,000 if terminated for cause; immediate vesting of unvested options in either case; 2‑year non‑disparagement, non‑solicit, confidentiality post‑termination; $125,000 quarterly incentive bonus for remaining 4‑year term |
| Term Extensions (9/11/2024) | Employment Agreement extended through October 1, 2027 |
| Change‑of‑Control Agreement (10/1/2020; extended 9/11/2024) | Single‑trigger lump‑sum payment of $5,000,000 to Kim upon change‑of‑control; extended through October 1, 2027 |
| Forbearance Agreement (9/23/2024) | Kim defers collection of $1,250,000 JV bonus for 1 year; Company defers collection of Kim’s $1,000,000 settlement receivable; on 1/16/2025, bonus accrued and receivable recognized; $337,404 net from option repurchase applied to reduce receivable; $662,596 balance owed as of 6/30/2025 |
| Section 16(b) Litigation Settlement (6/12/2024) | Kim to pay Company $1,000,000; Company to pay $550,000 plaintiff attorneys; mutual releases; appeal dismissed |
Board Governance
- Roles: Kim serves as President/CEO and Director; not Chair. Board Chair changed from Gary Nelson (FY2024) to Johnathan Chee (FY2025) .
- Committees (FY2025): Audit (Chair: Heidy Chow; members: Greenstein, Kristina Kim); Compensation (Chair: Chee; Kristina Kim); Nominating (Chair: Chee; Chow). Kim does not serve on Board committees .
- Independence: Audit Committee meets Nasdaq independence criteria; Chow designated “financial expert” .
- Meetings/Attendance: Board met 4 times in FY2024 and FY2025; all directors attended all meetings .
- Director Compensation: Employee directors receive no director pay/equity; non‑employee directors received $20,000 retainer in FY2024; FY2025 director cash varied with bonuses; Chairman retainer raised to $30,000 effective FY2026 .
Director Compensation (Kim as Director)
- Employee directors do not receive cash or equity for board service; Kim’s compensation is solely under executive arrangements .
Compensation Structure Analysis
- Shift in equity: Company repurchased Kim’s fully‑vested options (200,000 shares) in May 2025, reducing potential future exercise/ownership dilution; proceeds largely offset Kim’s receivable, not paid in cash to Kim, aligning with balance sheet clean‑up but also signaling liquidity preference over performance‑vested equity .
- Increase in guaranteed payouts: Presence of $5M single‑trigger CoC payout and $3M voluntary termination severance increases guaranteed outcomes irrespective of performance, potentially weakening pay‑for‑performance alignment .
- Discretionary bonuses despite losses: Quarterly bonuses and a $1.25M transaction bonus accrued through periods of net losses and declining sales, highlighting discretionary pay disconnected from disclosed financial targets .
Related Party Transactions / Red Flags
- Section 16(b) short‑swing profits verdict against Kim; subsequent settlement with payments and releases .
- Forbearance Agreement linking deferral of Company collection from Kim with deferral of Kim’s bonus; netting of option repurchase proceeds against Kim’s receivable, leaving $662,596 outstanding as of 6/30/2025 .
- Option repurchase with insider (Kim), at stated value and tax withholding; absence of cash paid directly to Kim per proxy enhances optics but indicates insider liquidity management .
Say‑on‑Pay & Peer Group
- Peer group: CD&A references informal benchmarking and case‑by‑case negotiation; no formal peer group or target percentile disclosed .
- Say‑on‑Pay: Approval percentages not disclosed in reviewed documents.
Expertise & Qualifications
- Education: B.A., Sogang University (Korea) .
- Technical/industry: Wireless telecom devices, module development, carrier relationships; strategic transaction execution (MeiG JV) .
Performance & Track Record
- Financial performance: Net sales decreased to $30.8M (FY2024) from $45.9M (FY2023); gross margin compressed; net losses persisted FY2023–FY2025 .
- TSR: $100 investment value improved to $31.86 by FY2025 from $14.51 in FY2024; FY2023 $17.67 .
- Litigation: Section 16(b) verdict and settlement as noted .
Equity/Options Vesting Details
| Grant Feature | Terms |
|---|---|
| Option vesting cadence | 33.3% on each of 1st, 2nd, 3rd anniversaries; 5‑year term |
| Example award (pre‑repurchase) | 200,000 options at $3.38, expiring 12/27/2026; outstanding as of 6/30/2024 |
| Repurchase | Fully‑vested portion (200,000 shares) repurchased on 5/15/2025 for $746,066.67 |
Investment Implications
- Alignment: Large single‑trigger CoC payout ($5M) and substantial severance ($3M) create management protection and potential agency risk in strategic transactions; discretionary quarterly and transaction bonuses with limited metric disclosure weaken pay‑performance linkage .
- Insider dynamics: Option repurchase and receivable netting reduce overhang from options and clean up balances but highlight insider cash/settlement mechanics post‑litigation; continued unpaid accrued bonuses may represent latent selling pressure if monetized .
- Governance: Dual role (CEO + Director) with independent Chair and independent committees mitigates some governance concerns; however, prior Section 16(b) violation and related settlements are notable red flags for trading practices and governance oversight .
- Trading signals: Policy restrictions on hedging/pledging reduce alignment risks; lack of disclosed 10b5‑1 plans in the latest quarter suggests limited pre‑programmed sales; monitor future disclosures for bonus payments and any changes in ownership/pledging approvals .