Steven Shum
About Steven Shum
Steven M. Shum is Chief Executive Officer (since October 10, 2019) and a director (since October 11, 2017). Age: 53. He previously served as Interim CEO and CFO of Eastside Distilling (Nasdaq: ESDI) and held multiple executive roles at XZERES Corp. He earned B.S. degrees in Finance and General Management from Portland State University (1992) and currently sits on the boards of Expion360 (Nasdaq: XPON) and CalEthos (OTC: GEDC) . Pay-versus-performance shows weak shareholder returns during 2022–2024 (value of $100 investment fell to $10 in 2024) and persistent net losses, framing a challenging backdrop for incentive alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Eastside Distilling (Nasdaq: ESDI) | Interim CEO; CFO | Interim CEO May–Oct 2019; CFO Oct 2015–Aug 2019 | Public-company finance and turnaround exposure |
| XZERES Corp | COO; CFO/PAO/Secretary; CEO/President | COO Sep 2014–Apr 2015; CFO/PAO/Secretary Apr 2010–Sep 2014; CEO/President Oct 2008–Aug 2010 | Multi-function P&L, operations, and governance at a public company |
| Revere Data (now part of FactSet) | Co-founder; EVP | ~4 years (not dated) | Built product development; data and analytics domain expertise |
| D.N.B. Capital Management | Investment research analyst/PM | ~6 years (not dated) | Buy-side perspective; performance and capital allocation lens |
External Roles
| Organization | Role | Details |
|---|---|---|
| Expion360 (Nasdaq: XPON) | Director | Current public board service |
| CalEthos (OTC: GEDC) | Director | Current public board service |
| Core Fund Management, LP / Core Fund, LP | Managing Principal / Fund Manager | Investment management experience |
Fixed Compensation
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2024 | 260,000 | - | - | - | - | 260,000 |
| 2023 | 201,875 | - | - | 30,800 | - | 232,675 |
| Notes: As of December 31, 2024, Mr. Shum deferred $69,540 of salary . |
Performance Compensation
- Incentive design and metrics: The employment agreement provides a one-time $75,000 bonus upon successful Nasdaq uplisting; other bonuses are at the Board’s discretion; no recurring annual performance metrics (e.g., revenue/EBITDA/TSR targets) are disclosed .
- Equity vesting: CEO option grants vest on time-based schedules, typically in equal quarterly installments over 36 months; the initial 2019 grant vested monthly over 3 years .
Pay versus performance (SEC “PVP”) summary:
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| PEO SCT Total ($) | 502,001 | 232,675 | 260,000 |
| Compensation Actually Paid (PEO) ($) | 53,054 | 202,076 | 256,230 |
| Value of $100 Investment (TSR) ($) | 12 | 16 | 10 |
| Net Income ($) | (10,892,511) | (8,034,612) | (9,053,676) |
Equity Ownership & Alignment
Beneficial ownership (as of January 24, 2025):
| Holder | Shares Beneficially Owned | % of Common Stock |
|---|---|---|
| Steven Shum | 21,761 (includes 15,339 options exercisable or exercisable within 60 days) | 0.31% |
Outstanding equity awards (as of December 31, 2024; post-split):
| Name | Options Exercisable (#) | Options Unexercisable (#) | Exercise Price Range ($) | Expiration Dates |
|---|---|---|---|---|
| Steven Shum | 1,272 | 146 | 88.32–1,936.68 | 12/05/30–05/17/33 |
Additional alignment considerations:
- Stock ownership guidelines and pledging: No explicit CEO stock ownership guideline or pledging disclosure identified in the proxy; beneficial ownership section does not mention pledging for Mr. Shum .
- Potential selling pressure: Options vest on a time-based schedule (36 months), creating periodic new vesting that could be sold when in-the-money; no “MNPI-based” equity awards were disclosed .
Employment Terms
| Term | Detail |
|---|---|
| Role and appointment | CEO since Oct 10, 2019; director since Oct 11, 2017 |
| Employment agreement | At-will; dated Oct 16, 2019 |
| Base salary | $260,000; temporarily reduced to $105,000 effective Aug 16, 2023; reverted Jan 1, 2024 |
| Bonus | $75,000 upon successful Nasdaq uplisting; other bonuses at Board discretion |
| Initial equity | 53 shares and a 3-year option to purchase 845 shares at $1,958.40 (post-split), monthly vesting over 3 years |
| Severance (termination without cause or constructive termination) | 12 months’ base salary; 6 months COBRA reimbursement; continued equity vesting for 6 months |
| Potential payments (as of 12/31/24) | $260,000 cash plus 146 unvested options remaining on a 36-month schedule (12 months left) |
| Clawback / restrictive covenants | Not specifically disclosed in the cited sections |
Board Governance
- Board/committees and independence: The Board has a majority of independent directors; Shum is not independent due to his CEO role . Audit (Szot—Chair, Messina, Ryan), Compensation (Ryan—Chair, Davis, Szot), and Nominating/Governance (Davis—Chair, Szot, Ryan) committees are fully independent under Nasdaq and SEC rules .
- Leadership structure and attendance: No policy requiring separation of CEO and Chair roles; each director attended 100% of Board meetings in 2023 and 2024 .
- Director pay: Shum received no additional compensation for Board service .
Additional Context and Corporate Actions
- Reverse stock split: The company effected a 1-for-12 reverse split effective March 18, 2025, primarily to address Nasdaq’s $1 minimum bid price compliance; all option/warrant terms and plan reserves were proportionately adjusted .
Investment Implications
- Pay-for-performance alignment: 2024 CEO pay comprised fixed salary with no annual bonus or stock awards; options are time-based, not explicitly tied to operating or TSR metrics—reducing direct performance linkage .
- Liquidity/retention signals: CEO salary deferral ($69,540 at 12/31/24) and director fee deferrals elsewhere in the proxy indicate cash conservation; retention risk mitigated by modest severance (12 months) and continued vesting for 6 months .
- Ownership alignment: CEO beneficial ownership is 0.31% (incl. options within 60 days), a relatively low direct stake that may temper economic alignment; no pledging disclosure found .
- Overhang/flow: Ongoing 36‑month option vesting schedules create periodic potential selling supply when options are in-the-money, though actual monetization depends on market price and individual decisions .
- Governance quality: Majority independent board and fully independent key committees provide checks on a non‑independent CEO/director; 100% attendance supports active oversight .
- Market/valuation pressure: The 1:12 reverse split to address Nasdaq bid-price compliance and poor TSR/net losses underscore external pressure; such actions can be near-term technical catalysts but also flag ongoing execution/financing risk .
Disclosure of equity awards based on material nonpublic information: None **[1417926_0001641172-25-006726_form10-k.htm:174]**.
Appendix: Option and Pay-Versus-Performance Tables
- See “Performance Compensation,” “Equity Ownership & Alignment,” and “Fixed Compensation” sections above for full quantitative details with citations.