Michael Hsing
MONOLITHIC POWER SYSTEMSAbout Michael Hsing
Founder and long‐tenured leader of Monolithic Power Systems (MPS). Age 65; director since 1997; Chairman, President, and Chief Executive Officer. Holds a B.S.E.E. from the University of Florida; inventor on numerous patents in bipolar mixed‑signal semiconductor manufacturing; built a track record of significant revenue growth and long‑term value creation since IPO, with cumulative TSR up ~1,200% over the past decade and record 2024 revenue of $2.207B .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Several analog IC companies | Senior Silicon Technology Developer | Prior to 1997 | Developed and patented power management technologies that set new industry standards |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Not disclosed | — | — | No other public company directorships disclosed in 2025 proxy |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 751,846 | 822,877 | 1,000,000 (approved base for 2024; salary paid was $980,569) |
| Target Bonus (% of Base) | 200% | 200% | 150% |
| Actual Annual Bonus Paid ($) | 6,048,000 | 1,508,805 | 5,729,299 (382% of target) |
Notes:
- 2024 short‐term incentive was 100% tied to non‑GAAP operating income with target $645.0M and actual $768.1M, yielding a 382% payout; maximum payout capped at 400% of target .
Performance Compensation
Short‑Term Incentive (Cash)
| Metric | Target | Actual | Payout | Vesting/Timing |
|---|---|---|---|---|
| Non‑GAAP Operating Income | $645.0M | $768.1M | 382% of target | Cash, annual |
Long‑Term Incentive (2024 PSUs granted Feb 6, 2024)
| Component | Hsing Target Shares | Hsing Max Shares | Earn‑out Schedule | Performance Period | Vesting |
|---|---|---|---|---|---|
| Revenue growth vs analog industry | 19,902 | 59,706 | 0% if <3%; 50% at 3%; 100% at 5%; 300% at ≥15% | 2024–2026 | Dec 31, 2026, subject to employment |
| Environmental Sustainability goals (three sub‑targets) | 19,902 (aggregate target reference) | 39,804 (aggregate max) | 100% for 25% Scope 1+2 GHG reduction vs 2022 baseline; 50% for ≥⅓ 2026 auto revenue from EV OEMs; 50% for 200% 2026 revenue growth in EV powertrain/48V products vs 2023 | 2024–2026 | Dec 31, 2026, subject to employment |
| Purchase price feature | — | — | $30/share due on vest; waived if stock is ≥$30 above grant-date price at period end | — | — |
Outstanding Equity Awards & Vesting Schedule (as of Dec 31, 2024)
| Grant Date | Award Type | Unearned/Unvested (#) | Key Conditions | Vesting Date(s) | Market/Payout Value ($) |
|---|---|---|---|---|---|
| Feb 2, 2021 | PSUs | 7,053 | Performance achieved; remaining 50% vests quarterly through Feb 2025 | Through Feb 2025 | 4,249,433 |
| Oct 25, 2022 | MSUs | 302,920 | Market/TSR conditions; vest if goals met at end of period | Oct 24, 2025 | 179,828,458 |
| Feb 7, 2023 | PSUs | 136,825 | Performance achieved at period end; immediate vesting | Dec 31, 2025 | 77,347,173 |
| Feb 6, 2024 | PSUs | 59,706 | Performance achieved at period end; immediate vesting | Dec 31, 2026 | 33,636,370 |
2024 vesting activity (realized): 169,919 shares vested with $115,929,400 value realized (reflects price appreciation and dividend equivalents) .
Equity Ownership & Alignment
- Beneficial ownership: 980,763 shares; 2.0% of outstanding . Breakdown: 834,898 direct; 133,040 in Michael Hsing 2004 Trust; 12,825 in ZH Family Trust .
- Stock ownership guidelines: CEO required at 5× base salary; all NEOs and directors met guidelines as of Dec 31, 2024 .
- Pledging/hedging: Prohibited for directors/officers; short sales, margin accounts, and pledging of MPS stock barred .
- Options: No outstanding option awards as of Dec 31, 2024 .
- Upcoming vesting (potential supply indicators): Large MSU tranche Oct 2025 and PSU tranches Dec 2025/Dec 2026, subject to performance/service .
Employment Terms
| Provision | Terms |
|---|---|
| Employment agreement | Dated Mar 10, 2008; amended Dec 16, 2008 |
| Termination without cause / good reason | 12 months of base salary + target annual bonus + COBRA premiums; equity acceleration equal to shares that would vest over the next 12 months |
| Change in control with termination (double trigger) | 12 months of base salary + target bonus + COBRA; 100% acceleration of unvested equity; PSUs vest pro‑rata based on performance to the change‑in‑control date; MSUs vest if deal price exceeds targets and relative TSR deemed satisfied |
| Estimated CIC payout (illustrative as of 12/31/24) | $246,983,289 total (incl. $2,500,000 cash and $244,455,633 equity acceleration) |
| Restrictive covenants | Confidentiality during/after employment; 1‑year non‑solicitation post‑termination |
| Clawback | Mandatory recoupment for restatements covering cash/equity tied to financial reporting measures (incl. stock price/TSR) per Exchange Act 10D/NASDAQ |
| Hedging/margin/pledging | Prohibited as noted above |
| Tax gross‑ups | None adopted since 2008 for officers |
Board Governance
- Board service history: Director since 1997; currently combined CEO/Chairman with Lead Independent Director structure (Lead: Herbert Chang), reviewed annually; Board cites balanced oversight with independent committees and sessions .
- Independence: Six of seven directors deemed independent; Hsing is not independent .
- Committees: Audit (Lee chair until Mar 3, 2025; Wynne chair from Mar 3, 2025), Compensation (Elmiger chair), NCG (Martinez chair) .
- Attendance: Board met four times in 2024; all directors attended ≥75% of meetings .
- Declassification plan: Phased move to one‑year terms by 2030, with transitional 3‑year elections in 2025–2027, 2‑year for Class III in 2028, 1‑year for Class I in 2029 .
- Director compensation: CEO receives no additional director fees; non‑employee director program detailed separately .
Compensation Committee Analysis
- Members/Chair: Eugen Elmiger (Chair), Herbert Chang, Jeff Zhou .
- Consultant: Radford; independence assessed; provided peer group and program design advice .
- Peer group updates (2024): Removed >$100B market cap semis (AMD, Applied Materials, NVIDIA); added Diodes, Marvell, Microchip, Entegris .
- Program changes from shareholder feedback: Reduced STIP target from 200% to 150%; introduced ESG metrics and 3‑year revenue vs analog industry in PSUs; in Feb 2025, added TSR percentile linkage vs PHLX Semiconductor Index with 75th percentile for max payout .
- Say‑on‑pay: 97% approval in 2024 vs 57% in 2023 and 72% in 2022 .
- Risk management: Compensation programs reviewed with no material adverse risk identified .
Performance & Track Record (Financial Context)
| Metric | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| Revenues ($) | 1,207,798,000 | 1,794,148,000 | 1,821,072,000 | 2,207,100,000 |
| EBITDA ($) | 291,116,000* | 563,899,000* | 521,904,000* | 575,788,000* |
Values retrieved from S&P Global.
- No document citation provided by SPGI; presented for context only.
Investment Implications
- Pay‑for‑performance alignment is strong: 100% of 2024 equity is performance‑based (revenue vs analog peers and ESG) with rigorous earn‑out scales; STIP fully financial, capped at 400% .
- Retention risk appears moderate: Double‑trigger CIC terms with one year of cash and full equity acceleration create some takeover‑related value for the CEO but routine terminations yield only 12‑month cash and partial vesting; robust clawback and anti‑hedging/pledging policies support alignment .
- Trading/supply signal: Large MSU/PSU vesting events due in Oct 2025/Dec 2025/Dec 2026 could increase share delivery; 2024 realized vesting value was substantial ($115.9M), but actual selling requires Form 4 monitoring; no pledging permitted, reducing forced‑sale risks .
- Governance watchpoints: Combined CEO/Chair with Lead Independent Director; board is declassifying, enhancing annual accountability; say‑on‑pay improved significantly to 97% in 2024 after program changes .
- Strategic execution: Record 2024 revenue and multi‑year TSR outperformance underscore value creation; PSU metrics tied to industry‑relative growth and EV sustainability suggest continued focus on high‑growth, energy‑efficient end markets .
Overall: Hsing’s large beneficial stake (2.0%) and strict anti‑pledging/hedging, plus performance‑weighted incentives, suggest high alignment. Upcoming vesting tranches warrant monitoring for insider activity, but governance improvements (declassification, shareholder engagement) reduce structural risk .