Scott Simplot

About Scott R. Simplot

Scott R. Simplot, 78, has served on SemiLEDs’ Board since March 2005. He is Chairman and a long‑tenured director of the privately held J. R. Simplot Company (Chairman since May 2001; Director since August 1970), and holds a BS in business from the University of Idaho and an MBA from the University of Pennsylvania. The Board cites his extensive leadership experience at a large private company and multiple director roles across industries as core credentials. Notably, Mr. Simplot controls a majority of SemiLEDs’ voting power via affiliates and a voting agreement and is therefore not deemed independent.

Past Roles

External Roles

Board Governance

• Independence status: Not independent; “Mr. Simplot controls a majority of the voting power” and thus is not deemed independent under Nasdaq/SEC standards.
• Controlled Company: LEDS is a “Controlled Company” under Nasdaq, relying on exemptions (no requirement for a majority‑independent Board, and compensation and nominating committees need not be fully independent). Control is through Simplot Taiwan Inc. and affiliates via a Voting Agreement with the CEO.
• Board leadership: CEO also serves as Chairman; no Lead Independent Director.
• Executive sessions: Independent directors met in executive session at the end of every Board meeting in FY2024.
• Attendance: Board held 5 meetings in FY2024; all directors (except Dr. Yu who joined July 3, 2024) attended at least 75% of aggregate Board/committee meetings—implying Mr. Simplot met the 75% policy threshold.

Committee assignments and meeting cadence (FY2024):

• Audit Committee independence and expertise: Audit members (Hsieh, Gough, Yu) are independent and each qualifies as an “audit committee financial expert.”

Fixed Compensation (Director)

Performance Compensation (Director)

No performance metrics (e.g., revenue growth, TSR) are tied to director pay; awards are time‑based.

Other Directorships & Interlocks

• Public company directorships: None disclosed for Mr. Simplot; roles listed are primarily private or non‑profit entities.
• Interlocks/conflicts: Controlling shareholder affiliation via J. R. Simplot Company and Simplot Taiwan Inc.; related‑party financing and a Voting Agreement coordinating votes with the CEO’s trust.

Expertise & Qualifications

• Education: BS in business (University of Idaho); MBA (University of Pennsylvania).
• Board‑cited qualifications: Extensive leadership and board experience at a large private company and across varied industries; provides strategic and operating insight.
• Governance policy strengths: Company prohibits hedging and recommends against pledging/margining company securities for directors and employees.

Equity Ownership

Recent insider transactions (Form 4 extracts):

Notes:

• Policy prohibits hedging and recommends against pledging/margining company stock by directors.
• Ownership table date and base: 8,222,403 shares outstanding as of July 2, 2025.

Related‑Party Transactions and Potential Conflicts

• Secured loans from CEO and J. R. Simplot Company/Simplot Taiwan Inc.: Original 8% loans (2019) repeatedly extended; amended to allow repayment via common stock; multiple share issuances in 2024–2025 to repay principal/interest. As of July 2, 2025, loan balances total $800k and are secured by a second‑priority lien on LEDS HQ.
• Convertible notes (2019) to J. R. Simplot Company and CEO: Extended multiple times; conversion price lowered (from $3.00 to $2.046, then to $1.31); fully converted on Jan 5, 2024 into 1,228,128 shares. $0 principal outstanding as of July 2, 2025.
• Voting Agreement (June 3, 2024): Between Simplot affiliates and CEO’s trust; aggregates ~57% of voting power to vote in concert on specified matters—cementing control.

Governance Assessment

Strengths

• Deep operating and governance experience from leading a large enterprise; broad network of directorships across entities.
• Director waived compensation; reduces potential for misalignment in cash/stock retainers.
• Hedging prohibited and pledging discouraged under Insider Trading Policy—alignment positive.
• Independent directors held executive sessions each Board meeting in FY2024; Audit Committee comprised solely of independent “financial experts.”

Risk indicators / RED FLAGS

• Controlled Company status; Mr. Simplot is not independent yet chairs Compensation and Nominating & Corporate Governance committees—permitted by Nasdaq exemptions but weakens independent oversight of pay and nominations.
• Concentrated control (approx. 57% voting power) via affiliates and Voting Agreement with CEO’s trust, limiting minority shareholder influence.
• Extensive related‑party financing: repeated loan extensions, amendments to permit stock repayment, and lowered note conversion prices culminating in share issuances; these capital transactions with controlling holders can raise concerns about preferential terms and dilution.
• No Lead Independent Director while CEO is also Chair; power concentration at top.

Implications for investors

• Expect board and compensation decisions to reflect the priorities of the controlling shareholder group; activism or minority‑led governance changes face structural headwinds.
• Monitor future related‑party financings, equity issuances to insiders, and committee decisions where independent oversight is structurally limited.

Appendix: Additional Reference Data

Director compensation (FY2024)

Principal stockholders (as of July 2, 2025)

Corporate governance structure and policies

• No Lead Independent Director; combined CEO/Chair model.
• Insider Trading Policy: prohibits hedging; recommends against pledging/margining.
• Director nomination and evaluation led by N&CG Committee (chaired by Mr. Simplot under Controlled Company exemption).