Hanlin Gao
Fulgent GeneticsAbout Hanlin Gao
Hanlin (Harry) Gao, M.D., Ph.D., D.A.B.M.G., F.A.C.M.G., age 58 as of March 25, 2025, is Chief Scientific Officer and Laboratory Director at Fulgent Genetics; he has served as Lab Director since February 2012 and CSO since January 2016, and is a founder of the company’s genetic testing business . He holds an M.S. in Immunology and an M.D. from Chinese institutions (1990, 1993), a Ph.D. in Microbiology/Immunology/Medical Genetics from The Ohio State University (2001), and completed clinical molecular genetics and post-doc fellowships at Harvard Medical School (2004); he is board-certified in clinical molecular genetics and a Fellow of the American College of Medical Genetics and Genomics . Company performance context in 2024: total revenue declined 2% YoY to $283.5M while Core Revenue grew 7% to $281.2M; Core EBITDA was -$19.0M versus -$9.2M in 2023, though above the 2024 plan target used for incentives . Five-year total shareholder return (2019 base=100) was 35 at 2024 year-end, underscoring share-price pressure over Gao’s later tenure window .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| City of Hope | Laboratory Director, DNA Sequencing Core and Clinical Molecular Diagnostics | 2004–2013 | Led clinical molecular diagnostics and sequencing core operations, foundational to later CSO role at FLGT |
| Harvard Medical School | Clinical Molecular Genetics Training Fellowship & Post-doctoral Fellowship | Completed 2004 | Built core molecular genetics expertise applied to FLGT’s platform |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| American Board of Medical Genetics | Board-certified in clinical molecular genetics | Ongoing | Professional credential underpinning Lab Director oversight |
| American College of Medical Genetics and Genomics | Fellow (F.A.C.M.G.) | Ongoing | Professional leadership credential |
| College of American Pathologists (CAP) | Team leader for laboratory inspections | By 2021 (ongoing) | Reinforces quality and compliance expertise |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 510,292 | 513,000 | 513,000 |
| Target Bonus (% of salary) | 30% (NEOs other than CEO) | 30% (NEOs other than CEO) | 30% (NEOs other than CEO) |
| Actual Bonus Paid ($) | 109,816 | 201,481 | 173,599 |
| Stock Awards ($ grant-date fair value) | 3,115,000 | 769,500 | 1,282,500 |
| All Other Compensation ($) | 10,500 | 6,221 | 12,879 |
| Total Compensation ($) | 3,745,608 | 1,490,202 | 1,981,978 |
Notes:
- Base salaries were held flat in 2024; CEO $1,000,000; CFO $600,000; CSO (Gao) $513,000; President/COO $615,000 .
Performance Compensation
Annual Cash Incentive Plan (2024 outcomes)
- Structure: 50% Core Revenue, 50% Core EBITDA; payout scale threshold/target/maximum with caps; max total payout 162.5% of target; NEO target=30% of base salary; funding applies identically to NEOs .
- 2024 Results: total payout funded at 112.8% of target; NEOs (incl. Gao) earned 33.8% of base salary .
| Metric | Threshold ($M) | Target ($M) | Maximum ($M) | Actual ($M) | Achievement | Weighted Payout |
|---|---|---|---|---|---|---|
| Core Revenue | 210.0 | 280.0 | 350.0 | 281.2 | 100.4% | 50.8% |
| Core EBITDA | -25.0 | -25.0 | -18.8 | -19.0 | 124.0% | 62.0% |
| Total | — | — | — | — | — | 112.8% |
Equity Awards (Gao)
| Grant Date | Award Type | Shares Granted | Vesting | Grant-Date Value ($) |
|---|---|---|---|---|
| 2/26/2024 | Time-based RSUs | 21,146 | 3-year; 1/3 at 12 months, then 1/12 quarterly over 24 months (service-based) | 513,000 |
| 2/26/2024 | Performance RSUs | 31,719 | Earned annually on Core Revenue/Core EBITDA (2024–2026); scaled 75%–162.5% | 769,500 |
| 2/23/2023 | Time-based RSUs | 12,156 | 3-year; 1/3 at 12 months, then 1/12 quarterly (service-based) | Included in 2023 total $769,500 |
| 2/23/2023 | Performance RSUs | 12,156 | Earned on 2023–2025 Core metrics; max 162.5% | Included in 2023 total $769,500 |
| 2/28/2022 | Special time-based RSUs | 32,000 | 4-year; 1/4 at 12 months, then 1/16 quarterly (service-based) | Included in 2022 total $3,115,000 |
| 2/28/2022 | Time-based RSUs | 9,000 | 3-year; 1/3 at 12 months, then 1/12 quarterly (service-based) | Included in 2022 total $3,115,000 |
| 2/28/2022 | Performance RSUs | 9,000 | Earned on 2022–2024 Core metrics; max 150% | Included in 2022 total $3,115,000 |
- 2024 PSU Earnouts Credited to Gao: 11,926 (from 2024 grant), 4,571 (from 2023 grant), 3,384 (from 2022 grant) based on 112.8% payout for 2024 .
- Option awards: none granted to NEOs in 2022–2024; Gao has no stock options outstanding .
Vesting cadence and potential selling pressure:
- Time-based RSUs: 1/3 on first anniversary of grant (e.g., 2/26/2025 for 2024 grant), then quarterly thereafter for 8 quarters; subject to continued service .
- Performance RSUs: earned annually against Core Revenue/Core EBITDA, with settlement after each fiscal year; 2024 payout at 112.8% for all PSU tranches in-cycle .
Equity Ownership & Alignment
| Item (as of March 20, 2025 unless noted) | Detail |
|---|---|
| Total Beneficial Ownership | 880,974 shares; 2.85% of outstanding (30,865,730 shares) |
| Components | 877,523 shares held directly; 3,451 RSUs vesting within 60 days |
| Shares Pledged | 858,241 shares pledged as security for a margin account (RED FLAG) |
| Unvested RSUs Outstanding (12/31/2024) | 80,222 shares; market value $1,481,700 at $18.47/share |
| Stock Vested in 2024 | 28,197 shares; value realized $637,716 |
| Insider Transaction (example) | 12/3/2024 sale of 1,373 shares (~$26,773) to satisfy tax withholding on vested RSUs (reported as such by media) |
Policy alignment and risks:
- Insider Trading Policy permits pledging/hedging with consent; company has allowed CEO prepaid forwards and pledges; Gao’s pledged shares heighten forced-sale risk in adverse markets .
- Executives are expected to retain a meaningful level of stock ownership; no fixed multiple disclosed .
Employment Terms
- Employment status: at-will .
- Severance: if terminated for any reason within one year after a change in control, one year of base salary; for Gao, $513,000 as of 12/31/2024; no severance absent change in control .
- Equity on change in control: under the 2016 Plan, options/SARs vest; other awards’ restrictions lapse and performance goals are deemed achieved at target, unless assumed/replaced in the transaction (single-trigger plan acceleration) .
- Clawback: policy adopted in 2022; amended in 2023 to implement mandatory recovery for restatements (covers excess incentive-based comp for current/former officers) .
- Hedging/Pledging: allowed with compliance officer consent (company has permitted such transactions); no foreclosures to date .
- Perquisites/Pension: participates in 401(k) with employer match (Gao $12,879 in 2024); no defined benefit plans .
- Tax gross-ups: not provided for NEOs; payments structured to comply with Sections 409A/280G; timing provisions for potential “parachute payments” noted (no excise tax gross-up) .
Compensation Structure Analysis
- Cash/equity mix: significant portion at risk through annual cash incentives and multi-year RSUs (time- and performance-based) .
- Shift in vehicles: NEO awards have used RSUs (no stock options granted to NEOs in 2022–2024), lowering risk relative to options and emphasizing retention .
- Metrics and rigor: annual incentives and PSUs tied to Core Revenue and Core EBITDA with explicit threshold/target/max and capped upside; 2024 payout at 112.8% reflects above-plan Core EBITDA and slightly above-target Core Revenue despite negative EBITDA in absolute terms .
- Say-on-pay and engagement: company states stockholders have approved compensation annually; 2024 outreach covered investors representing 37% of shares, formally engaging with 51% of top-15 investors .
Compensation benchmarking peer group (diagnostics/biotech focus): 23andMe, Biodesix, CareDx, Castle Biosciences, GeneDx, Guardant Health, Myriad Genetics, NeoGenomics, Opko, Pacific Biosciences, Veracyte .
Performance Compensation – Detailed Metric Table (2024)
| Metric | Weight | Target | Actual | Payout Scale | Payout Contribution |
|---|---|---|---|---|---|
| Core Revenue | 50% | $280.0M | $281.2M | 4x above-target scaling; 50% max from revenue leg | 50.8% |
| Core EBITDA | 50% | -$25.0M | -$19.0M | 1x above-target scaling; 62.5% max from EBITDA leg | 62.0% |
| Total | 100% | — | — | Capped at 162.5% | 112.8% |
Equity Awards & Vesting – Key Dates (Gao)
| Grant | Vesting Start | Initial Cliff | Thereafter |
|---|---|---|---|
| Time-based RSUs (2/26/2024) | 2/26/2024 | 1/3 on 2/26/2025 | 1/12 at end of each 3-month period over next 24 months (service-based) |
| PSUs (2/26/2024) | 2/26/2024 | Earned post-year based on Core metrics | Annual earnouts 2024–2026; scaled 75%–162.5% |
| Prior RSUs (2/23/2023) | 2/23/2023 | 1/3 on 2/23/2024 | 1/12 quarterly thereafter (service-based) |
| Special RSUs (2/28/2022) | 3/1/2022 | 1/4 on 3/1/2023 | 1/16 quarterly thereafter (service-based) |
Related Party / Other Considerations
- As part of the acquisition and related arrangements between Fulgent Genetics and Fulgent Pharma (entities historically related), RSUs held by Gao and other executives in Fulgent Pharma were assumed into FLGT RSUs, reflecting intertwined equity histories (see company 2022 10-K) .
- No defined benefit pension; limited perquisites (e.g., 401(k) match), which limits fixed cost burden .
Investment Implications
- Alignment vs. risk: Gao’s sizable beneficial stake (2.85%) signals skin-in-the-game, but the pledge of 858,241 shares is a material red flag—introducing margin-call/forced-sale risk and potential incremental selling pressure around equity market stress or vesting-related tax events .
- Incentive design: Tying annual/PSU payouts to Core Revenue and Core EBITDA creates line-of-sight to the diagnostics business, but positive payouts amid negative absolute Core EBITDA (112.8% in 2024) may invite scrutiny in downturns; investors should assess whether targets are sufficiently demanding through the cycle .
- Retention: Gao has substantial unvested RSUs (80,222 as of 12/31/2024) plus ongoing PSU cycles, suggesting low near-term retention risk and predictable vesting-related withholding sales cadence each quarter post-anniversary dates .
- Change-in-control economics: Modest severance (1x salary) but plan-level equity acceleration at target on a change in control provides upside; structure is effectively single-trigger for equity at the plan level, with termination-based salary severance within one year post-CoC .
- Governance watch items: Company permits hedging/pledging (with consent) and the CEO has significant pledged/prepaid-forward positions; continue monitoring insider Form 4s and any policy evolution, say-on-pay results, and compensation peer adjustments for pay inflation risk .
Monitor: quarterly vesting dates for withholding-related sales; any changes to pledging arrangements; Core Revenue/Core EBITDA trends vs targets; and 8-K Item 5.02 filings for any changes to severance/comp structures .