David Hsu
About David Hsu
David Hsu, 62, is the Chief Executive Officer and Chairman of SolarMax Technology, Inc. and has served as a director since the company’s founding in February 2008. He is a founder of SolarMax and holds a bachelor’s degree in electrical engineering from Shanghai Jiao Tong University; prior to SolarMax he was a consultant to China Sunergy, a photovoltaic manufacturer . The board currently combines the CEO and Chairman roles under Hsu, with four of five board nominees deemed independent; risk oversight is conducted at the board and committee levels, and the audit committee met three times in 2024 while the compensation and nominating committees did not meet . His pay is anchored by a base salary with a revenue-based bonus (70% restricted stock, 30% cash), and his employment agreement includes substantial severance and change-of-control protections keyed to historical compensation and tenure since 2008 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| SolarMax Technology, Inc. | Chief Executive Officer; Director; Founder | 2008–present | Built U.S. solar EPC and distribution; founder leadership across automotive/energy networks |
| China Sunergy | Consultant | Before 2008 | Industry relationships and photovoltaic expertise leveraged into SolarMax founding |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Inland Empire Renewable Energy Regional Center, LLC | Owner (general partner of related-party EB-5 lending entities CEF/CEF II) | As of 2025 | Controls related-party lenders to SMXT subsidiaries; oversight of EB-5-funded loans to SMXT units |
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $716,431 | $737,924 |
| Cash Bonus ($) | $0 (waived) | $0 |
| Stock Bonus ($) | $0 | $0 |
| All Other Compensation ($) | $55,055 (PTO accrual) | $0 |
| 2025 Annualized Salary Rate ($) | — | $760,062 |
Performance Compensation
| Component | Structure / Metric | Target Schedule | Payout Mechanics | Vesting |
|---|---|---|---|---|
| Annual Bonus | Consolidated revenue | <$30M: $0; $30–50M: $250K; $50–100M: 0.55% rev; $100–200M: 0.60% rev; $200–300M: 0.75% rev; >$300M: 1.00% rev | 70% payable in restricted stock; 30% cash. Paid by earlier of 30 days after audited 10-K issuance or last business day of December of following year; RSU valued by average closing price window | Restricted stock component vests immediately on issuance |
| Equity Incentives | RSUs or stock options | Eligible not to exceed 1.5% of outstanding common stock prior to grant | As approved; options grant details below | As specified per award |
| Option Awards (Outstanding) | Shares Exercisable | Shares Unexercisable | Strike | Expiration | Notes |
|---|---|---|---|---|---|
| Hsu option (as of 12/31/2024) | 714,216 | 714,216 | $5.01 | 02/12/2034 | Remaining 50% became exercisable on Aug 12, 2025 |
Additional options context: As of 12/31/2024, Hsu held option grants totaling 1,428,432 shares (company-wide options outstanding 6,195,743) . On Sept 25, 2025, the Board extended expirations to Aug 28, 2028 for 1,620,879 options outstanding; example given for CFO’s options, while Hsu’s option shows a 2034 expiry in the awards table .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 4,746,514 shares (8.6% of 54,302,950 outstanding) |
| Direct Shares | 4,032,298 owned directly |
| Options Included in Beneficial Ownership | 714,216 shares issuable upon exercise within 60 days of Oct 6, 2025 |
| Total Option Grants (context) | 1,428,432 shares (company table, 12/31/2024) |
| Ownership Guidelines | Not disclosed in proxy/10-K; Insider Trading Policy exists |
| Pledging/Hedging | No pledging disclosure identified; Insider Trading Policy noted |
Employment Terms
| Term | Provision |
|---|---|
| Agreement Date / Term | Employment agreement dated Oct 7, 2016; five-year term from Jan 1, 2017, continuing year-to-year unless terminated with ≥90 days’ notice |
| Roles Guaranteed | Nominated as director; serves as Chairman upon election |
| Salary Escalation | Initial $600,000 with annual increases ≥3% |
| Annual Bonus | Revenue-based per schedule; 70% stock / 30% cash; immediate vest of stock; valuation methodology specified |
| Benefits | $2.0M life insurance; medical/dental; long-term disability with monthly benefits ≥$25,000 |
| Severance (Disability/Death) | Highest compensation (salary + bonus) over prior 3 calendar years × full years of employment since Feb 2008; annual installments each equal to one year’s total compensation |
| Termination Not for Cause / Good Cause / CIC | Lump sum equal to two times highest annual compensation for prior 3 years × full years employed; applies to termination within 18 months of a change of control (double-trigger condition) |
| Clawback Policy | Recovery of incentive-based compensation upon required accounting restatement; applies to compensation received on/after Oct 2, 2023 while Nasdaq-listed; 3-fiscal-year lookback; administered by Compensation and Audit Committees |
| Deferred Compensation & Cash Payment | Deferred comp totaled $1,815,892 (salary/bonus 2019–2024) plus $675,000 cash owed for restricted stock-to-options exchange; total $2,490,892 to be paid in 12 equal monthly installments commencing June 30, 2025, without interest . Balance owed at 12/31/2024: $1,712,770 deferred comp and $675,000 cash exchange; initial payment timing extended to June 30, 2025 |
Board Governance
- Board leadership: Hsu serves as CEO and Chairman; board asserts structure is in the company’s best interests; four of five nominees deemed independent, which the board believes provides sufficient oversight .
- Committees and independence: Audit Committee (Chair Dr. Wen-Ching Yang; members Wei Yuan Chen, Simon Yuan) with two “financial experts” identified; Compensation Committee (Chair Wei Yuan Chen; members Lei Zhang, Ph.D.; Jinxi Li); Nominating & Corporate Governance Committee (Chair Dr. Yang; member Wei Yuan Chen). Hsu is not listed as a member of these committees .
- Activity: In 2024, board met telephonically seven times; audit committee met three times; compensation and nominating committees did not meet .
- Annual meeting (Nov 10, 2025): Hsu re-elected director with 21,262,444 votes for, 1,084,781 against, 782,761 abstained; other directors elected; auditor ratification passed. No separate say-on-pay item disclosed in the 8-K .
Director Compensation
| Director Compensation (2024) | Cash ($) | Stock Awards ($) | Total ($) |
|---|---|---|---|
| Non-employee directors (listed) | $0 | $0 | $0 |
Related Party Transactions
- EB-5 loans via related parties: Clean Energy Funding (CEF) and CEF II loaned $45.0M and $10.5M respectively to SMXT U.S. subsidiaries at 3% interest; general partner (Inland Empire) is owned by David Hsu and Ching Liu (former EVP/director, 5% stockholder). Loans secured by accounts and inventory; maturities tied to EB-5 investors’ immigration approvals; significant portions extended; as of Mar 15, 2025, approvals covered $41.5M; $9.0M pending .
Compensation Structure Analysis
- Shift/mix: Hsu’s compensation is primarily fixed cash salary with revenue-indexed bonus that vests immediately in stock for the equity component, reducing long-term retention lock-up from RSUs; he waived bonuses in 2022–2023 amid incentive suspensions .
- Equity mechanics: Large legacy option grant at $5.01 with full vesting by Aug 12, 2025 and long-dated expiry shown; board extended many option expirations to Aug 28, 2028 for other holders, which can alter future supply dynamics; Hsu’s beneficial ownership counts 714,216 options within 60 days of Oct 6, 2025 despite a total grant of 1,428,432 .
- Guaranteed and at-risk pay: Revenue-based bonus introduces performance linkage but the immediate vest of stock awards reduces traditional long-term at-risk characteristics .
Vesting Schedules and Insider Selling Pressure
- Options: Hsu’s option award vested 50% earlier and remaining 50% on Aug 12, 2025; strike $5.01; expiration 02/12/2034 per awards table. Vesting may create windows for exercise and potential sales depending on trading windows and liquidity .
- Deferred payment cadence: Company scheduled twelve equal monthly payments starting June 30, 2025 to satisfy $2,490,892 owed to Hsu (deferred comp + cash exchange), which can influence insider liquidity without requiring open-market sales .
Equity Ownership & Alignment Table
| Ownership Detail | Amount | As-of Date |
|---|---|---|
| Direct shares | 4,032,298 | Record date Oct 6, 2025 |
| Options (counted in beneficial ownership) | 714,216 | Within 60 days of Oct 6, 2025 |
| Total beneficial | 4,746,514 (8.6% of 54,302,950) | Oct 6, 2025 |
| Total option grants (context) | 1,428,432 | 12/31/2024 |
| Pledging | None disclosed | — |
| Ownership guidelines | Not disclosed; Insider Trading Policy in place | — |
Employment Terms (Severance and CIC Economics)
| Provision | Detail |
|---|---|
| Disability/Death | Highest compensation (salary+bonus) over past 3 years × full years of employment since Feb 2008; paid in annual installments equal to one year’s compensation each |
| Termination not for cause / Good cause / CIC | Lump sum equal to two times highest annual compensation for prior 3 years × full years employed; applies if termination occurs within 18 months of a change of control (double-trigger) |
| Benefits continuation | Life, medical/dental, long-term disability ≥$25,000/month per agreement |
| Auto-renewal | Year-to-year extensions after initial five-year term; ≥90 days’ notice required before expiration to terminate |
Board Service History and Roles
- Service history: Director since organization in Feb 2008; Chairman designated upon election as director per employment agreement .
- Independence: Hsu is an inside director (CEO/Chairman); board asserts overall independence through four of five nominees; committee membership excludes Hsu, and CEO is barred from being present when his compensation is deliberated .
- Committees: Audit (Chair Dr. Yang; financial experts identified), Compensation (Chair Wei Yuan Chen), Nominating (Chair Dr. Yang) .
- Meeting cadence: Board met seven times; audit met three times; compensation and nominating committees did not meet in 2024 .
Performance & Track Record
- China segment retrenchment: No China revenue since 2021; 2024 impairment of $7.5M for China goodwill; receivable of RMB 49.5M ($6.8M) from SPIC outstanding with increased bad debt reserve after initial arbitration meetings; management expects collection in 2025 but notes uncertainty .
- Obligations to management: Risk factor highlights need for significant funds to pay obligations including deferred compensation to Hsu ($1.712M deferred comp + $675k cash exchange outstanding at 12/31/2024, with payments deferred to June 30, 2025 start) .
Say-on-Pay & Shareholder Feedback
- 2025 Annual Meeting results: Elections and auditor ratification disclosed; no advisory vote on executive compensation disclosed in the 8-K .
Compensation Committee Analysis
- Composition: Independent directors (Chair Wei Yuan Chen; members Lei Zhang, Ph.D.; Jinxi Li). CEO not present during deliberations of his pay. Committee empowered to administer clawback policy and select independent advisors .
Investment Implications
- Pay-for-performance alignment is revenue-centric with immediate vesting of the equity component, reducing long-term retention lock-up; options at $5.01 with full vesting by Aug 12, 2025 and long-dated expiry may create exercisability windows and potential supply overhang depending on liquidity and blackout windows .
- Governance risk stems from CEO/Chairman dual role and limited compensation/nominating committee activity in 2024, although a majority of board nominees are independent and committees exclude Hsu; investors should weigh the oversight framework accordingly .
- Related-party financing via EB-5 entities controlled by Hsu introduces conflict-of-interest optics and refinancing/maturity uncertainty tied to immigration approvals; this can affect cash flows and capital allocation discretion at critical times .
- Retention/liquidity: Company owes Hsu substantial deferred compensation and cash exchange payments scheduled across 12 months starting June 30, 2025, offering non-market liquidity but also signaling near-term cash commitments that could constrain operating flexibility .
- Ownership alignment is high: Hsu beneficially owns 8.6% of outstanding shares, but beneficial count includes only 714,216 options within 60 days despite a 1,428,432 total grant; lack of pledging disclosures reduces one common red flag, though no ownership guideline disclosure is provided .