Xun (Kenneth) Li
About Xun (Kenneth) Li
Xun (Kenneth) Li, age 55, is Chief Financial Officer of Power Solutions International (PSI) and an executive officer since 2022. He holds an MBA (with high distinction) and MS in Accounting from the University of Michigan, an MS in Mechanical Engineering from the University of Oklahoma, and a BS in Mechanical Engineering from Shanghai JiaoTong University; he is a CPA in Illinois . Prior roles include CFO of ND Paper (2020–Aug 2022), finance leadership at Caterpillar (2008–2020, most recently CFO of the global mining machine group), and finance roles at Ford (2003–2008) . Company performance tied to his incentives: 2024 net income was $69.3 million and KPI metrics achieved ~153% of target; 2023 net income was $26.3 million and KPI metrics achieved ~120% of target .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ND Paper | Chief Financial Officer | 2020–Aug 2022 | Led finance, accounting, tax, audit, treasury, risk management, internal audit, and strategic planning; strategic advisor to CEO . |
| Caterpillar Inc. | Finance leadership; CFO, Global Mining Machine Product Group | 2008–2020 (CFO 2013–2020) | Oversaw finance for global mining machinery, driving financial controls and product-group execution . |
| Ford Motor Company | Finance leadership roles | 2003–2008 | Progressive finance responsibilities in automotive operations . |
External Roles
Not disclosed in company filings for Li .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $368,308 | $385,851 |
| Target KPI Bonus (% of base) | 50% (per employment agreement) | 50% (per employment agreement) |
| Target LTI (% of base) | 60% (per employment agreement) | 60% (per employment agreement) |
| Actual Discretionary/Other Bonus ($) | $72,273 (includes LTI payment and discretionary component) | $38,585 (LTI guaranteed tranche) |
| All Other Compensation ($) | $10,314 | $14,574 |
| Total Compensation ($) | $660,830 | $703,176 |
Performance Compensation
| Component | Metric | Weighting | Target | Actual | Payout/Outcome | Vesting |
|---|---|---|---|---|---|---|
| Annual KPI (2023) | Revenue (millions) | 40% | $510 | $459 | 0% earned on revenue | Cash, paid after year end |
| Net Income (millions) | 60% | $13 | $26 | 200% earned on NI; total ~120% achievement | Cash, paid after year end | |
| Annual KPI (2024) | Revenue (millions) | 40% | $500 | $476 | 82% earned on revenue (33% toward total) | Cash, paid after year end |
| Net Income (millions) | 60% | $28 | $69 | 200% earned on NI (120% toward total); total ~153% achievement | Cash, paid after year end | |
| LTI Plan (2023–2025) | Net Income (3-yr) | 50% perf; 50% guaranteed | 3-year NI vs Board targets | Outcome determined at 2025 end | Payout range 50–150% of Target Incentive (TI) | Guaranteed 1/3 each 12/31/2023, 12/31/2024, 12/31/2025; perf portion after audit approval |
| LTI Cash Paid (YTD) | Guaranteed stay portion | — | — | 2023: $37,800; 2024: $38,585 | Paid to Li (part of Bonus line) | Per schedule |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (May 30, 2025) | 14,292 shares underlying currently exercisable SARs; less than 1% of shares outstanding (23,008,511) . |
| Outstanding SARs (as of Dec 31, 2024) | 15,000 exercisable; 15,000 unexercisable; strike $2.00; expiry Sept 2, 2032; vests in 4 equal annual installments on 9/2/2023–2026 . |
| Vested vs unvested | 15,000 SARs vested; 15,000 SARs unvested at YE 2024 . |
| Hedging/pledging policy | Company prohibits short sales, options/derivatives, hedging (e.g., collars), margin purchases, and pledging of Company stock by covered persons –. |
| Stock ownership guidelines | Not disclosed for executives; hedging/pledging restrictions in place . |
Employment Terms
| Term | Detail |
|---|---|
| Employment agreement | Effective Aug 29, 2022 . |
| Base salary floor | No less than $360,000 . |
| Sign-on bonus | $20,000; repay if voluntary resignation within 1 year . |
| KPI eligibility | Target 50% of base; proration applicable . |
| LTI eligibility | Target 60% of base; 2023–2025 plan with 50% guaranteed and 50% performance-based –. |
| Equity award | 30,000 SARs, strike set at grant; vests in four equal annual installments (Grant 9/2/2022) . |
| Severance (without cause) | Base salary continuation: 6 months if employment <48 months; 12 months if ≥48 months; prorated KPI/LTI for year of termination; forfeiture for cause . |
| Restrictive covenants | 1-year non-compete and non-solicit; indefinite confidentiality/IP assignment . |
| Award change-in-control | Company Plan: double-trigger—if terminated without cause/for good reason within 24 months post-CIC, performance awards vest based on achieved/prorated results; out-of-the-money options/SARs can be cancelled; cash-out permitted if in-the-money –. |
| Clawback | Nasdaq Rule 5608-compliant clawback adopted; recoupment of excess incentive compensation upon restatement; effective Dec 26, 2025 –. |
Performance & Track Record
- Financial outcomes aligned with KPI metrics: 2024 net income $69.3 million vs target $28 million (maxed NI metric), driving ~153% KPI achievement; 2023 NI $26.3 million, ~120% KPI achievement despite below-threshold revenue .
- Pay vs Performance disclosure indicates cumulative TSR value of initial $100 investment measured at $992 (2024), $68 (2023), $100 (2022), with net income progression aligning with higher compensation actually paid to PEO and non-PEO NEOs .
- Company strategy and risk factors emphasize going-concern considerations and leverage, relevant to incentive calibration and cash preservation –.
Compensation Structure Analysis
- Year-over-year mix: Total compensation increased modestly (2024 +6%) with larger non-equity KPI payout reflecting above-target performance; LTI guaranteed “stay” cash continues, reducing pure performance sensitivity (50% of TI guaranteed) –.
- Shift in equity: SARs grant in 2022 with low strike ($2.00) and multi-year vesting promotes retention; 15,000 SARs already vested by YE 2024, with remaining vesting through 2026 .
- Governance safeguards: Prohibitions on hedging/pledging and adoption of SEC/Nasdaq clawback policy (effective in 2025) improve alignment and downside recourse –.
Say-on-Pay & Shareholder Feedback
- Advisory vote on NEO compensation scheduled at annual meetings; specific approval percentages not disclosed in reviewed filings .
Investment Implications
- Alignment: KPI heavily weighted to net income (60%) with demonstrated overachievement, tying Li’s cash incentives to profitability; SARs vesting schedule and low strike price create continued alignment with equity value .
- Retention risk: LTI includes a 50% guaranteed “stay” component that stabilizes retention but dilutes pay-for-performance purity; multi-year SAR vesting through 2026 further anchors retention – .
- Governance signals: Strong insider trading restrictions (no hedging/pledging), formal clawback adoption, and double-trigger CIC vesting terms reduce agency risks; however, company leverage and going-concern language can pressure compensation liquidity and strategic flexibility – –.
- Trading signals: With 15,000 SARs vested and exercisable at $2.00 strike, equity-incentive realizations may occur in open windows; no pledging permitted; monitor future Form 4s for selling pressure and 10b5-1 plan usage .