Microvast Holdings, Inc. (NASDAQ:MVST), a leader in the design, development, and manufacturing of next-generation battery technologies, has announced several significant changes in its executive team and compensation arrangements. The company's stock has shown remarkable momentum, delivering a 228% return over the past six months, despite trading at $1.18 per share.
According to InvestingPro analysis, the company currently appears overvalued based on its Fair Value assessment, with 12 additional ProTips available for subscribers seeking deeper insights. On December 1, 2024, the company's Chief Accounting Officer, Lu Gao, notified Microvast of her intention to resign for personal reasons, effective January 31, 2025, or an earlier date if agreed upon. The company stated that her resignation did not stem from any disagreement regarding company operations, policies, or practices.
In a move to align executive compensation with additional responsibilities, Microvast's Compensation Committee, along with an independent consultant, recommended adjustments to the base salaries, bonuses, and equity awards for key executives. These recommendations were approved by the Board of Directors on December 5, 2024.
The company's Chairman and Chief Executive Officer, Yang Wu, had his base salary increased from $550,000 to $564,480. Isida Tushe, President, General Counsel, and Corporate Secretary, saw her salary rise from $200,000 to $450,000, and Chief Operating Officer Dr. Shengxian Wu's salary was raised from $250,000 to $400,000.
These compensation adjustments come as Microvast reports revenue growth of 39% over the last twelve months, reaching $371 million, though the company faces challenges with an EBITDA of -$21.8 million. Both Tushe and Dr. Wu also received one-time cash bonuses of $125,000 and $93,750, respectively, payable by March 15, 2025, or earlier when annual bonuses are distributed.
Furthermore, Yang Wu was granted 500,000 restricted stock units (RSUs) that were fully vested upon the grant. Tushe and Dr. Wu were each awarded stock options to purchase 1,000,000 shares of common stock at $1.29 per share. These stock options are set to vest in equal installments over three years, starting November 8, 2025, contingent on continued employment.
In case of employment termination, unvested RSUs or stock options will be forfeited unless the termination is not for Cause, as defined in their agreements. Vested stock options will remain exercisable for 90 days post-termination or until the expiration date, whichever comes first.
These executive compensation enhancements come as Microvast continues to advance its position in the electrical machinery and equipment sector, with a focus on innovative battery solutions. Looking ahead, analysts tracked by InvestingPro expect the company to achieve profitability this year, with an EPS forecast of $0.01.
The company maintains a current ratio of 1.3, though it faces challenges with cash management. Discover comprehensive analysis and 14 additional key metrics in the Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Microvast Holdings, Inc. reported a historic Q3 2024, achieving significant growth in both profitability and revenue. The company noted a net profit of $13.2 million and adjusted EBITDA of $29 million. Revenue saw a substantial 27% year-over-year increase to $101.4 million, propelled by an impressive 212% sales growth in the EMEA region. The gross margin also improved significantly to 33.2%, up from 22.3% in the same quarter the previous year.
These recent developments also highlight a strategic cost control measure by Microvast, which resulted in a 38% reduction in operating expenses to $27.5 million. The company's financial stability was further underscored by a net cash inflow of $26.8 million for the nine months. Looking ahead, Microvast projects a Q4 2024 revenue between $90 million and $95 million, aiming for full-year growth of 15% to 18%.
Despite facing challenges due to global policy uncertainties, Microvast continues to emphasize its commitment to profitability and operational efficiencies. The company's product innovation remains strong, with over 775 patents and recent launches such as the ME6 LFP ESS containers and Silicon Enhanced Cell technologies.
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