Lynn Zhao
SOCKET MOBILEAbout Lynn Zhao
Lynn Zhao is Socket Mobile’s Vice President of Finance & Administration, Chief Financial Officer, Secretary, and a management Director since 2019; age 56 as of April 4, 2025, with prior roles including Controller and general accounting manager dating back to 2000 . She holds an MBA from San Jose State University and a BS in Chemistry from Xiamen University . Zhao certifies SEC filings as Principal Financial Officer and is the signatory on earnings-related 8-Ks and press releases, evidencing control over financial reporting and investor communications . Pay-for-performance ties are based on revenue and adjusted EBITDA versus the annual plan; recent payout factors were 10% in 2024, 0% in 2023, and 41.6% in 2022 . Company TSR and profitability during 2022–2024 are shown below; revenues fell in 2023–2024 while EBITDA turned negative, illustrating execution headwinds amidst cost control initiatives .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Socket Mobile | VP Finance & Administration; CFO; Secretary; Director | 2019–present | Principal financial officer; board member; oversight of disclosure controls and risk management |
| Socket Mobile | Vice President & Controller | Sep 2017–May 2019 | Executive leadership team; strengthened financial operations |
| Socket Mobile | Controller | Jan 2015–Sep 2017 | Led accounting; improved reporting processes |
| Socket Mobile | General Accounting Manager | Dec 2000–Jan 2015 | Long-tenured finance leadership and institutional knowledge |
External Roles
- No external public company directorships or roles disclosed for Zhao .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $218,750 | $232,500 | $246,000 (raised to $252,000 effective 7/1/2024) |
| Target Bonus ($) | $48,000 | $80,000 | $80,000 |
| Actual Bonus Paid ($) | $19,978 | $0 | $8,000 |
- Variable incentive payouts are driven by revenue attainment and EBITDA versus annual plan; payout percentages were 41.6% (2022), 0% (2023), and 10% (2024) .
Performance Compensation
| Year | Metric | Weighting | Target | Actual | Payout | Vesting/Timing |
|---|---|---|---|---|---|---|
| 2024 | Revenue and adjusted EBITDA vs annual plan | Not disclosed | Company plan | Not disclosed | 10% of target | Annual cash bonus |
| 2023 | Revenue and adjusted EBITDA vs annual plan | Not disclosed | Company plan | Not disclosed | 0% of target | Annual cash bonus |
| 2022 | Revenue and adjusted EBITDA vs annual plan | Not disclosed | Company plan | Not disclosed | 41.6% of target | Annual cash bonus |
Performance-based equity:
| Award Type | Grant Date | Shares | Vesting | Notes |
|---|---|---|---|---|
| Performance RSAs | 5/3/2022 | 20,000 | Vests upon attainment of specified performance goals | Equity incentive plan awards; market value referenced at $1.33 as of 12/31/2024 |
Equity Awards (Grants and Outstanding)
| Award | Grant Date | Shares/Options | Exercise Price | Grant-Date Fair Value | Expiration | Vesting Schedule |
|---|---|---|---|---|---|---|
| Restricted Stock (time-based) | 2/1/2024 | 22,000 | $0.99 base price | $21,780 | N/A | 15%/20%/25%/40% over 4 years; future vesting dates 2/1/2025–2028 |
| Restricted Stock (time-based) | 3/15/2024 | 22,000 (unvested) | N/A | Market value $29,260 at $1.33 on 12/31/2024 | N/A | 4-year ratable; future vesting dates 2/1/2025–2028 |
| Stock Options (replacement/exchange) | 6/25/2024 | 49,260 | $1.12 | $38,526 | 6/25/2034 | 48 months to fully vest |
| Stock Options (legacy) | 2/15/2019 | 18,000 (exercisable) | $1.90 | N/A | 2/15/2029 | N/A |
Options status at 12/31/2024:
| Exercisable | Unexercisable | Exercise Price | Expiration |
|---|---|---|---|
| 18,000 | — | $1.90 | 2/15/2029 |
| 6,158 | 43,102 | $1.12 | 6/25/2034 |
Option activity:
| Year | Shares Acquired on Exercise | Value Realized |
|---|---|---|
| 2024 | 8,000 | $640 |
Equity Ownership & Alignment
| Holder | Beneficial Ownership (Shares) | % of Outstanding | Components/Footnotes |
|---|---|---|---|
| Lynn Zhao | 200,472 | 2.5% | Includes 29,289 options exercisable within 60 days and 17,123 shares issuable upon conversion of convertible notes ; base shares outstanding 7,952,988 as of 4/4/2025 |
- Unvested RSAs at 12/31/2024: 7,200 (2/1/2021), 7,280 (2/1/2022), 18,977 (2/21/2023), 22,000 (3/15/2024); plus 20,000 performance RSAs unearned .
- Insider Trading Policy in place; no pledging or hedging disclosures noted in proxy .
Employment Terms
| Term | Detail |
|---|---|
| Employment Agreement | Extended Aug 9, 2024; expires March 31, 2028 |
| At-will status | Yes; termination may occur at any time |
| Severance (involuntary without cause/good reason) | Lump-sum equal to six months base salary; estimated $126,000 for Zhao |
| COBRA | Company covers up to 6 months of premiums post-termination |
| Extended option exercise | Up to 24 months post-termination (or until expiration), with longer rights for 10+ years of service |
| RSU treatment on termination | Pro rata vesting based on quarters worked during vesting year; remainder forfeited |
| Change-of-control | Involuntary termination payment + 1% of deal consideration if offer price ≥ $5.00 per share (applies to Mills, Ott, Holmes, Zhao) ; all options vest and become fully exercisable upon change-of-control |
| Bonus pool (acquisition) | Up to 10% of consideration allocated to executives/employees at board discretion |
| Clawbacks/Gross-ups | No tax gross-ups provided; clawback policy not disclosed |
Board Governance
- Zhao is a management Director (non-independent) since 2019; board majority and all committees (Audit, Compensation, Nominating) are independent, with the Chairman (Charlie Bass) independent, mitigating dual-role concerns .
- Board meetings: five in 2024; each director attended ≥75% of board/committee meetings; independent directors met without management at all board meetings .
Director Compensation (for context)
- Non-employee director compensation only; Zhao, as an employee director, is compensated via executive pay, not the director fee table .
Say-on-Pay & Shareholder Feedback
| Item | Result |
|---|---|
| 2025 Say-on-Pay approval | 91.3% of votes cast approved |
| Auditor ratification | 94.3% approval |
| Compensation Committee | All members independent; interlocks/insider participation: none |
Performance & Track Record
Company outcomes across Zhao’s senior tenure:
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Revenues ($USD) | $15,700,036 | $23,199,061 | $21,237,768 | $17,033,593 | $18,762,520 |
| EBITDA ($USD) | $629,757* | $3,412,967* | $276,068* | $(2,205,817)* | $(1,373,780)* |
Values retrieved from S&P Global.*
Pay vs Performance and TSR:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Value of $100 Investment (TSR) | $47.30 | $28.43 | $32.60 |
| Net Income (Loss) ($USD) | $86,931 | $(1,919,154) | $(2,242,350) |
Compensation Structure Analysis
- Shift toward equity refresh and option exchange program in 2024: 49,260 replacement options at lower exercise price ($1.12), restoring retention value; shareholder-approved, but nonetheless a repricing-style modification that can be viewed as a governance caution .
- Cash vs equity mix: FY2024 pay includes salary ($246k), RSAs ($21,780), options ($38,526), and bonus ($8k), with at-risk pay tied to financial metrics and multi-year vesting .
- Performance metrics: revenue and adjusted EBITDA against annual plan remain the core drivers of variable pay .
Related Party Transactions and Potential Conflicts
- Convertible notes financings in 2023 and 2024 involved directors (Bass, Parnell) and CEO Mills; beneficial ownership footnote indicates Zhao has 17,123 shares issuable upon conversion of notes, suggesting some participation in note holdings; no adverse findings disclosed .
Risk Indicators & Red Flags
- Option exchange (repricing-like) in 2024 across executives/directors—approved and structured to avoid incremental comp expense; still a retention-mechanism red flag to monitor .
- Dual role (CFO + Director) — mitigated by independent Chairman and fully independent committees; Zhao is not independent and not on committees .
- No tax gross-ups; loans prohibited; insider trading policy in place; no hedging/pledging disclosure in proxy .
Investment Implications
- Alignment: Zhao holds 2.5% ownership, unvested RSAs and long-dated options with 4-year vesting, plus pro rata RSU vesting and extended option exercise rights; incentives are leveraged to medium-term stock performance and retention .
- Near-term selling pressure: Minimal recent option exercise (8,000 shares, $640 value), but 2024 option exchange reduced strike to $1.12, creating potential future in-the-money optionality if fundamentals improve .
- Pay-for-performance: Bonus payouts have tightened alongside weaker operating results (0% in 2023, 10% in 2024), suggesting Compensation Committee discipline tied to revenue/EBITDA delivery .
- Governance: CFO-director dual role is buffered by independent chair and committees; 2025 say-on-pay at 91.3% indicates shareholder acceptance of the program despite option exchange optics .
- Change-of-control economics: 1% of deal consideration if ≥$5/share and full option acceleration could be meaningful in a strategic transaction; severance is moderate (six months), reducing overhang risk .