Ming Hsieh
Fulgent GeneticsAbout Ming Hsieh
Ming Hsieh (age 69) is Founder, Chief Executive Officer, and Chairperson of Fulgent Genetics (since 2016), after managing predecessor Fulgent Therapeutics LLC from 2011; he previously founded Cogent, Inc. (biometric ID), serving as CEO/President/Chair until its sale to 3M in 2010, and earlier founded AMAX Technology (1987–1990) . He holds BSEE (1983) and MSEE (1984) from USC, is a trustee at USC (since 2007) and Fudan University (since 2011), and is a member of the National Academy of Engineering and National Academy of Inventors . Company performance context: 2024 Core Revenue grew 7% YoY to $281.2M while total revenue fell 2% to $283.5M and Core EBITDA was -$19.0M; 5-year TSR (value of $100) was $35 vs $91 for the peer index, underscoring mixed operating progress and weak long-term equity returns .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Fulgent Therapeutics LLC (predecessor) | Manager | 2011–2016 | Built genetic testing platform; transitioned to public company structure . |
| Fulgent Genetics, Inc. | CEO; Chairperson; President (through May 2022) | 2016–present (President through 2022) | Led IPO (2016), portfolio expansion, post-COVID core pivot; dual CEO/Chair governance structure . |
| Cogent, Inc. | Co-founder, CEO/President/Chair | 1990–2010 | Grew biometric ID leader; sold to 3M in 2010 . |
| AMAX Technology | Founder; Vice President | 1987–1990 | Early tech operating leadership . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Fortinet, Inc. (public) | Director | Current | Network security company; Nasdaq-listed . |
| University of Southern California | Trustee | Since 2007 | Philanthropic/academic governance . |
| Fudan University | Trustee | Since 2011 | Academic governance (China) . |
Fixed Compensation
| Year | Base salary ($) | Target bonus (% of salary) | Actual annual cash incentive ($) |
|---|---|---|---|
| 2022 | 947,917 | 100% | 713,556 |
| 2023 | 1,000,000 | 100% | 1,309,167 |
| 2024 | 1,000,000 | 100% | 1,128,000 |
- Salary targeted at market median; no 2024 salary increase for NEOs (CEO $1.0M) .
- Company does not provide personal income tax gross-ups for NEOs .
Performance Compensation
Annual incentive plan design and 2024 outcome
| Metric | Weight | Threshold | Target | Max | 2024 Actual | Achievement | Payout contribution |
|---|---|---|---|---|---|---|---|
| Core Revenue | 50% | $210.0M | $280.0M | $350.0M | $281.2M | 100.4% | 50.8% |
| Core EBITDA | 50% | ($25.0M) | ($25.0M) | ($18.8M) | ($19.0M) | 124.0% | 62.0% |
| Total payout vs. target | — | — | — | Cap 162.5% | — | — | 112.8% of target |
- 2024 CEO incentive paid at 112.8% of salary based on Core Revenue and Core EBITDA; funding scale multiplies >target Core Revenue by 4x and Core EBITDA by 1x, capped at 162.5% .
- Annual targets set on Core Revenue and Core EBITDA (equal weights); payout for Core Revenue begins at 75% of plan; Core EBITDA must meet 100% of plan for payout .
Long-term equity program (RSUs)
| Grant date | Instrument | Shares | Key vesting/performance terms |
|---|---|---|---|
| 2/26/2024 | Time-based RSUs | 65,952 | 3-year vest: 1/3 at 12 months from 2/26/2024; then 1/12 quarterly over next 24 months (service-based) . |
| 2/26/2024 | Performance RSUs (target) | 98,928 | Earned annually over FY2024–FY2026 vs Core Revenue and Core EBITDA; scaling up to 162.5% of target; 2024 earned at 112.8% (37,197 shares) . |
| 2/23/2023 | Time-based RSUs | 47,393 | 3-year vest on standard 1/3 then quarterly schedule . |
| 2/23/2023 | Performance RSUs (target) | 47,393 | Earned over FY2023–FY2025 with 162.5% cap . |
| 8/01/2022 | Time-based RSUs | 30,000 | 3-year vest; 1/3 then quarterly . |
| 8/01/2022 | Performance RSUs (target) | 30,000 | Earned over FY2022–FY2024 with 150% cap . |
- No stock options were granted to NEOs in 2022–2024; CEO has no outstanding options .
- 2024 performance RSUs paid out at 112.8% of target across tranches; CEO earned 37,197 (2024 tranche), 17,820 (2023 tranche), 11,280 (2022 tranche) shares under the respective plans .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 8,774,523 shares (28.43% of outstanding) as of Mar 20, 2025 . |
| Breakdown | 7,895,115 shares held by The Ming Hsieh Trust (sole voting/dispositive power); 654,092 directly; 220,816 by Dynasty Trust (Hsieh grantor, investment committee); 2,000 in UTMA accounts; 2,500 RSUs vesting within 60 days . |
| Pledging/hedging | 2,550,000 shares pledged via pre-paid forward arrangements; 4,210,733 shares pledged as collateral for a credit facility; pledging/hedging permitted with compliance officer consent; no foreclosures to date . |
| Unvested equity | 233,722 unvested RSUs at 12/31/2024 (market value $4,316,845 at $18.47) . |
| Options | None outstanding for CEO . |
| Ownership guidelines | Company emphasizes meaningful ownership and requires retention of net shares from LTI for at least one year; no numeric multiple disclosed . |
Red flag: Significant pledging (including pre-paid forwards) introduces potential forced-selling/foreclosure risk and misalignment if collateral calls occur .
Employment Terms
- Employment is at-will; no fixed term disclosed .
- Severance: If termination occurs for any reason within one year after a change in control, CEO receives one year of base salary ($1,000,000 if as of 12/31/2024); no severance absent a change in control .
- Equity on change in control: Under the 2016 Plan, options/SARs vest automatically; other awards lapse restrictions and performance goals are deemed achieved at target; administrator may have awards assumed or cashed out—this is effectively single-trigger acceleration unless assumed .
- Clawback: Adopted Mar 2022 for serious misconduct; amended Oct 2023 to comply with SEC listing standards for mandatory recovery of erroneously awarded incentive-based compensation for restatements (3-year lookback) .
- Tax: Company does not provide personal income tax gross-ups; Section 409A compliant; 280G/excise-tax timing noted; no explicit 280G gross-up disclosed .
Board Governance
- Role: CEO is also Chairperson; Board currently has no Lead Independent Director; independent oversight via committees composed solely of independent directors (Audit, Compensation, Nominating) .
- Independence: Linda Marsh, Michael Nohaile, Ph.D., and Regina Groves are independent (Nasdaq) .
- Committees:
- Audit: Groves (Chair), Nohaile, Marsh; Groves is “audit committee financial expert” .
- Compensation: Marsh (Chair), Groves, Nohaile; independent consultant USI engaged; CEO does not set his own pay .
- Nominating & Governance: Nohaile (Chair), Groves, Marsh .
- Attendance: 5 Board meetings and 17 committee meetings in 2024; all directors attended 75%+ and attended 2024 annual meeting .
Director Service/Compensation Notes (as applicable to dual roles)
- Hsieh receives no additional compensation for service as a director (compensated as an employee/CEO) .
- Combined CEO/Chair without a Lead Independent Director may raise independence concerns; Board cites committee structure and exec sessions for oversight .
Related Party Transactions (conflicts/governance risk)
- Fulgent Pharma acquisition (11/7/2022): ~$100M consideration ($43.4M cash, ~$30.7M stock, plus adjustments); Fulgent Pharma was 100% owned by Hsieh and the Hsieh Family Dynasty Trust; holdback shares released half in Nov 2023 and remaining half in May 2024 per special committee determination .
- ANP Technologies: Hsieh is director and ~20% owner; Fulgent entered drug-related licensing/development and equipment purchases—$2.1M expense in 2024; $0.2M payable at 12/31/2024; also an employee service agreement (ANP), $0.1M revenue recognized in 2024 .
- Policy: Audit Committee must approve related party transactions ≥$120k; focuses on terms no less favorable than third-party .
Compensation Structure Analysis
- Cash vs equity mix: CEO 2024 total comp $6.13M with $4.0M stock awards and $1.128M cash incentive—equity-heavy and performance-tied; consistent with pay-for-performance philosophy .
- Shift in vehicles: 2022–2024 grants exclusively RSUs (time- and performance-based); no options to NEOs—lower risk vs options and stronger retention .
- Incentive metrics: Continued use of Core Revenue and Core EBITDA; 2024 targets were met/exceeded modestly (112.8% payout), while GAAP revenue declined 2% and Core EBITDA remained negative—watch calibration of Core EBITDA threshold equal to plan at negative level .
- Clawback updated; no perquisite inflation for CEO noted; no personal income tax gross-ups .
Multi-Year CEO Compensation (Summary Compensation Table)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 947,917 | 1,000,000 | 1,000,000 |
| Non-equity incentive ($) | 713,556 | 1,309,167 | 1,128,000 |
| Stock awards ($) | 3,572,400 | 3,000,000 | 4,000,000 |
| Total ($) | 5,233,873 | 5,309,167 | 6,128,000 |
Company Performance Snapshot (context for pay-for-performance)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Total Revenue ($M) | 421.7 | 992.6 | 619.0 | 289.2 | 283.5 |
| Value of $100 investment (TSR) | 404 | 780 | 231 | 191 | 35 |
| Peer index $100 (TSR) | 126 | 125 | 111 | 115 | 91 |
| Core Revenue ($M) | — | — | 181.5 | 262.1 | 281.2 |
| Core EBITDA ($M) | — | — | (8.5) | (9.2) | (19.0) |
Compensation Peer Group and Benchmarking
- Peer group (11 companies): 23andMe, Biodesix, CareDx, Castle Biosciences, GeneDx, Guardant Health, Myriad Genetics, NeoGenomics, OPKO Health, Pacific Biosciences, Veracyte; selected for size/industry comparability (0.25x–2.5x rev/mkt cap), with stability across years .
- Base salary targeted at 50th percentile of market; USI provides independent benchmarking; CEO not involved in setting his own pay .
Say-on-Pay & Shareholder Engagement
- Say-on-pay sought annually; stockholders have approved the program each year; Compensation Committee considers vote results in program decisions .
- 2024 engagement outreach covered investors representing 37% of share capital; formal engagement with 51% of top 15 investors .
Risk Indicators & Red Flags
- Significant pledging including 2.55M shares via pre-paid forwards and 4.21M shares as collateral (heightened forced-sale risk) .
- Related-party exposure: acquisition of entity owned by CEO and his trust (Fulgent Pharma), and ongoing ANP transactions (CEO ~20% owner) .
- Combined CEO/Chair and no Lead Independent Director (independence/oversight concern) .
- Single-trigger equity acceleration in change in control under 2016 Plan (potential for windfalls without termination) .
Expertise & Qualifications
- Deep operating and founding experience across diagnostics and biometrics; engineering background (USC MSEE) .
- Public company board experience (Fortinet); elected to National Academy of Engineering and National Academy of Inventors .
Equity Vesting and Near-term Supply
| Award | Vesting cadence | Implication |
|---|---|---|
| 2024 time-based RSUs (65,952) | 1/3 on 2/26/2025; 1/12 quarterly thereafter through 2/26/2027 | Steady quarterly supply into market (subject to 10b5-1/plans). |
| 2024 performance RSUs (98,928 target) | Earned annually (2024 tranche earned at 112.8% = 37,197 shares) with vest/settle after fiscal year | Performance-driven share issuance; payout tied to Core metrics. |
| Unvested RSUs | 233,722 unvested at 12/31/2024 | Potential future dilution/supply as they vest. |
Employment & Contracts
- At-will employment; severance limited to 1x base salary upon termination within one year post-CIC; $1.0M estimated if terminated 12/31/2024; $0 absent CIC .
- Plan-level CIC equity terms (single-trigger unless assumed); clawback policy in effect; insider trading policy requires preclearance and consent for 10b5-1/hedging/pledging .
Investment Implications
- Alignment and retention: Large founder ownership (28.4%) aligns incentives, but extensive pledging (including pre-paid forwards) introduces overhang/forced-sale risk and potential misalignment in adverse markets; monitor any amendments or additional pledges closely .
- Pay-for-performance calibration: Incentive design is clear and formulaic (Core Revenue/Core EBITDA, 50/50, capped at 162.5%); however, payouts occurred with negative Core EBITDA and declining GAAP revenue, suggesting calibration scrutiny if profitability targets are set at negative levels .
- Governance risk: Combined CEO/Chair without a Lead Independent Director, single-trigger equity acceleration, and related-party transactions elevate governance risk and could pressure valuation multiples if investor confidence weakens .
- Execution track record: Post-COVID pivot shows Core Revenue growth and continued investment in Fulgent Pharma pipeline, but sustained negative Core EBITDA and materially underperforming 5-year TSR vs peer index underscore execution and capital allocation risk; watch progress on profitability and Pharma milestones .