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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
of the Securities Exchange Act of 1934
(Amendment No.  )
Filed by the Registrant ☒
Filed by a Party other than the Registrant  ☐
Check the appropriate box:
 ☐
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Preliminary Proxy Statement
 ☐
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒
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Definitive Proxy Statement
 ☐
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Definitive Additional Materials
 ☐
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Soliciting Material Pursuant to Section 14a-12§240.14a-12
TuSimple Holdings Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply)the appropriate box):
☒
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No fee required.
 ☐
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Fee paid previously with preliminary materials.
 ☐
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.0-11

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9191 Towne Centre Drive
Suite 600150
San Diego, California 92122
April 29, 2022October 30, 2023
To the Stockholders of TuSimple Holdings Inc.:
You are cordially invited to attend the Annual Meeting of Stockholders (the “Annual Meeting”) of TuSimple Holdings Inc., a Delaware corporation (the “Company”), that will be held on Thursday, June 9, 2022Wednesday, December 13, 2023 at 3:8:00 p.m.a.m. Pacific Time. The Annual Meeting will be a virtual meeting of stockholders, which will be conducted via a live audio webcast. You will be able to attend the Annual Meeting, submit your questions, and vote online during the meeting by visiting www.virtualshareholdermeeting.com/TSP2022.TSP2023. We believe a virtual meeting provides expanded access, improves communication, enables increased stockholder attendance and participation, and provides cost savings for our stockholders and the Company.
Details regarding virtual admission to the Annual Meeting and the business to be conducted are described in the accompanying proxy materials. We encourage you to read this information carefully. On or about October 30, 2023, we provided our proxy materials to our stockholders over the Internet at ir.tusimple.com. This reduces our environmental impact and our costs while ensuring our stockholders have timely access to this important information. We encourage you to read this information carefully.
At the Annual Meeting, you will be asked to:
a.
elect seven directors to our Board of Directors;
b.
ratify the appointment of UHY LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023;
c.
approve, on a non-binding advisory basis, the frequency of the non-binding advisory vote on executive compensation; and
d.
transact such other business as may properly come before the meeting or any postponements or adjournments thereof.
The accompanying Notice of the 2023 Annual Meeting of Stockholders describes these matters.
Your vote is important. Whether or not you plan to attend the Annual Meeting, we hope you will vote as soon as possible. You may vote over the Internet, by telephone, or by mailing a proxy card, if you have requested one. Voting over the Internet, by telephone, or by written proxy will ensure your representation at the Annual Meeting regardless of whether or not you attend virtually.in person. Please review the instructions on the Notice of Internet Availability of Proxy Materials. We urge you to read the accompanying materials regarding the matters to be voted on at the meeting and to submit your voting instructions using one of these voting options.
Thank you for your ongoing support of TuSimple.
 
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Very truly yours,
 
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Mo Chen
 
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Xiaodi Hou
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President, Chief Executive Officer and Chairman of theTuSimple's Board of Directors

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TuSimple Holdings Inc.
9191 Towne Centre Drive,
Suite 600150
San Diego, CA 92122
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on June 9, 2022December 13, 2023
Time and Date:
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Thursday, June 9, 2022Wednesday, December 13, 2023 at 3:8:00 p.m.a.m. Pacific Time.
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Place:
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The Annual Meeting will be completely virtual. You may attend the meeting, submit questions, and vote your shares electronically during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/TSP2022 .
Items of Business:
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(1)
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To elect five of our existing directors to serve as directors until the annual meeting of stockholders held in 2023 and until their successors are duly elected and qualified.TSP2023.
 
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(2)
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To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022.
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(3)
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To transact such other business as may properly come before the annual meeting or any adjournment thereof.
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These items of business are more fully described in the proxy statement accompanying this notice.
Adjournments and
Postponements:
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Any action on the items of business described above may be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting may be properly adjourned or postponed.
Record Date:
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You are entitled to vote if you were a stockholder of record as of the close of business on April 12, 2022.October 23, 2023
Voting:
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Voting:
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Your vote is important. Whether or not you plan to attend the Annual Meeting, we urge you to submit your vote via the Internet, telephone, or mail as soon as possible to ensure your shares are represented.
IfItems of Business:
​
Agenda Item
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Proposal
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Board’s Vote Recommendation
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PROPOSAL ONE
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To consider and vote upon the election of seven of our existing directors, named in this proxy statement, to serve as members of TuSimple’s Board of Directors until the annual meeting of stockholders to be held in 2024 and until their successors are duly elected and qualified.
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“FOR EACH COMPANY
NOMINEE”
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PROPOSAL TWO
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To consider and vote upon ratification of the appointment of UHY LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023.
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“FOR”
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PROPOSAL THREE
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To approve, on a non-binding advisory basis, the frequency of the non-binding advisory vote on executive compensation.
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“ONE YEAR”
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You are entitled to vote if you have any questions regarding this informationwere a stockholder of record as of the close of business on October 23, 2023. Your vote is important. Whether or the proxy materials, please visit our website at https://ir.tusimple.com or contact our investor relations department by telephone at (619) 916-3144 or by email at ir@plus.ai.
All stockholders are cordially invitednot you plan to attend the Annual Meeting, virtually.we urge you to submit your vote via the Internet, telephone, or mail as soon as possible to ensure your shares are represented.
These items of business are more fully described in the proxy statement accompanying this notice.
By order of the board of directors,

San Diego, California, October 30, 2023
 
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By order of the board of directors,Evan Dunn
 
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Xiaodi Hou
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President, Chief Executive Officer and Chairman of the BoardGeneral Counsel, Corporate Secretary
San Diego, California
April 29, 2022
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on June 9, 2022:December 13, 2023: A Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy statement and accompanying form of proxy card are being made available on or about April 29, 2022.October 30, 2023. This proxy statement and our annual report for the fiscal year ended December 31, 20212022 are available free of charge at www.proxyvote.com.

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TABLE OF CONTENTS
 
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Page
QUESTIONS AND ANSWERS ABOUT PROCEDURAL MATTERS
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12
PROPOSAL ONEONE: ELECTION OF DIRECTORS
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78
General
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8
Nominees at the Annual Meeting
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8
Information Regarding the Nominees
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8
PROPOSAL TWOTWO: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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11
General
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11
Principal Accounting Fees and Services
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11
Pre-Approval of Audit and Non-Audit Services
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11
AUDIT COMMITTEE REPORT
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12
PROPOSAL THREE: THE NON-BINDING ADVISORY VOTE ON THE FREQUENCY OF EXECUTIVE COMPENSATION VOTE
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13
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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1214
Directors and Executive Officers
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14
Voting Agreement
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14
Section 16(a) Beneficial Ownership Reporting Compliance
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14
Corporate Governance Profile
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15
Code of Conduct and Corporate Governance Guidelines
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15
Transactions in the Company’s Securities
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15
Corporate Responsibility and Diversity
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15
Our Board of Directors
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16
Stockholder Communications with the Board of Directors
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17
Board Committees
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18
Director Nominations Process
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19
Compensation Committee Interlocks and Insider Participation
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20
Director Compensation
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20
EXECUTIVE OFFICERS
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2021
EXECUTIVE COMPENSATION
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2129
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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27
EQUITY COMPENSATION PLAN INFORMATION
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2943
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
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30
AUDIT COMMITTEE REPORT
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3246
OTHER MATTERS
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3348
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TuSimple Holdings Inc.
9191 Towne Centre Drive, Suite 600150
San Diego, CA 92122
PROXY STATEMENT FOR 20222023 ANNUAL MEETING OF STOCKHOLDERS

GENERAL INFORMATION REGARDING SOLICITATION AND VOTING
As used in this proxy statement, the terms “TuSimple,” the “Company,” “we,” “us,” and “our” mean TuSimple Holdings Inc., a Delaware corporation, and its subsidiaries unless the context indicates otherwise.
This proxy statement is furnished in connection with solicitation of proxies by our board of directors for use at the 20222023 annual meeting of stockholders (the “Annual Meeting”) to be held at 3:8:00 p.m.a.m. Pacific Time on Thursday, June 9, 2022,Wednesday, December 13, 2023, and any postponements or adjournments thereof. The Annual Meeting will be a virtual meeting of stockholders, which will be conducted via a live audio webcast. We have adopted a virtual meeting format for our Annual Meeting because we believe a virtual meeting provides expanded access, improves communication, enables increased stockholder attendance and participation, and provides cost savings for our stockholders and the Company.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
You will be able to attend the Annual Meeting, submit your questions, and vote online during the meeting by visiting www.virtualshareholdermeeting.com/TSP2022TSP2023 and entering theyour 16-digit control number included in the Notice. Beginning on or about October 30, 2023, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) sent to you. Beginning on or about April 29, 2022, we mailed to our stockholders a Notice containing instructions on how to access our proxy materials. As usedIf you are a beneficial owner of shares registered in this proxy statement, the terms “TuSimple,”name of your broker, bank, or other agent, follow the “Company,” “we,” “us,”instructions from your broker or bank.
Pursuant to rules adopted by the U.S. Securities and “our” mean TuSimple Holdings Inc. and its subsidiaries unless the context indicates otherwise.
QUESTIONS AND ANSWERS ABOUT PROCEDURAL MATTERS
Q:
Why are you holding a virtual meeting, and how can stockholders attend?
A:
We have adopted a virtual meeting format for our Annual Meeting this year because we believe a virtual meeting provides expanded access, improves communication, enables increased stockholder attendance and participation and provides cost savings for our stockholders and the Company. To participate in our virtual Annual Meeting, including to vote, ask questions and to view the list of registered stockholders as of the record date during the meeting, visit www.virtualshareholdermeeting.com/TSP2022 with your 16-digit control number included in the Notice, or in the instructions that accompanied your proxy materials. If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, follow the instructions from your broker or bank.
Q:
What can I do if I need technical assistance during the Annual Meeting?
A:
If you encounter any difficulties accessing the Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting log-in page.
Q:
Why did I receive a notice regarding the availability of proxy materials on the internet?
A:
Pursuant to rules adopted by the Securities and Exchange Commission (the “SEC”Exchange Commission (“SEC”), we have elected to provide access to our proxy materials over the Internet. Accordingly, we have sent you the Notice because our board of directors is soliciting your proxy to vote at the Annual Meeting, including at any adjournments or postponements of the meeting. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the internet or to request a printed copy may be found in the Notice.
On or about April 29, 2022 the proxy materials via the Internet. Accordingly, we are being distributedsending the Notice to allour stockholders entitled to notice of record entitledand to vote at the Annual Meeting.Meeting and at any postponement or adjournment thereof. The Notice is being mailed to stockholders on or about October 30, 2023. Stockholders will have the ability to access the proxy materials at www.proxyvote.com or request to receive a printed set of the proxy materials by mail or an electronic set of materials by email. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice.
Q:
What proxy materials are available on the internet?
A:
The proxy statement and our annual report for the year ended December 31, 2021 (the “2021 Annual Report”) are available at www.ProxyVote.com.
Q:
What information is contained in this proxy statement?
A:
The information in this proxy statement relates to the proposals to be voted on at the Annual Meeting, the voting process, the compensation of our directors and certain of our executive officers, corporate governance, and certain other required information.
Q:
Who can vote at the Annual Meeting?
A:
Only stockholders of record at the close of business on the Record Date will be entitled to vote at the Annual Meeting. On this record date, there were 199,024,672 shares of the Company’s Class A Common Stock
Certain of our directors, officers, and employees may solicit proxies by telephone, personal contact, or other means of communication. They will not receive any additional compensation for these activities. In addition, brokers, banks, and other persons holding common stock on behalf of beneficial owners will be requested to solicit proxies or authorizations from beneficial owners. We will bear all costs incurred in connection with the preparation, assembly, and mailing of the proxy materials and the solicitation of proxies and, upon request, will reimburse brokers, banks, and other nominees, fiduciaries, and custodians for reasonable expenses incurred by them in forwarding proxy materials to beneficial owners of our common stock. No person is authorized to give any information or to make any representation not contained in this proxy statement, and, if given or made, you should not rely on that information or representation as having been authorized by us. The delivery of this proxy statement does not imply that the information herein has remained unchanged since the date of this proxy statement.
TuSimple Holdings Inc.
TuSimple is a global autonomous driving technology company headquartered in San Diego, California, with operations in the United States (“U.S.”) and the Asia-Pacific region (“APAC”). Founded in 2015, we are working to revolutionize the estimated $4 trillion global truck freight market by developing proprietary technologies that enable the scaled development and deployment of autonomous freight transportation. We believe that our full-stack L4 autonomous driving technology and our Autonomous Freight Network (“AFN”) will make global trucking safer, more efficient, and environmentally friendly.
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(QUESTIONS AND ANSWERS ABOUT PROCEDURAL MATTERS
What is the purpose of the Annual Meeting?
The purpose of the Annual Meeting is:
1.
To consider and vote upon the election of seven of our existing directors, named in this proxy statement, to serve as members of TuSimple’s Board of Directors until the annual meeting of stockholders to be held in 2024 and until their successors are duly elected and qualified (“Proposal One”);
2.
To consider and vote upon ratification of the appointment of UHY LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023 (“Proposal Two”); and
3.
To approve, on a non-binding advisory basis, the frequency of the non-binding advisory vote on executive compensation (“Proposal Three”).
The proposals set forth in this proxy statement constitute the only business that the Board intends to present at the Annual Meeting. The proxy does, however, confer discretionary authority upon the proxy holders named on the proxy card or their substitutes, to vote on any other business that may properly come before the Annual Meeting. If the Annual Meeting is postponed or adjourned, the proxy holders can vote your shares on the new meeting date as well, unless you have revoked your proxy.
What are the Board’s voting recommendations?
The Board recommends that you vote as follows:
​
Agenda Item
​​
Proposal
​​
Board’s Vote Recommendation
​
​
PROPOSAL ONE
​​
To consider and vote upon the election of seven of our existing directors, named in this proxy statement, to serve as members of TuSimple’s Board of Directors until the annual meeting of stockholders to be held in 2024 and until their successors are duly elected and qualified.
​​
“FOR EACH COMPANY NOMINEE”
​
​
PROPOSAL TWO
​​
To consider and vote upon ratification of the appointment of UHY LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023.
​​
“FOR”
​
​
PROPOSAL THREE
​​
To approve, on a non-binding advisory basis, the frequency of the non-binding advisory vote on executive compensation.
​​
“ONE YEAR”
​
What happens if additional matters are presented at the Annual Meeting?
If any other matters are properly presented for consideration at the Annual Meeting, including, among other things, consideration of a motion to adjourn the Annual Meeting to another time or place (including, without limitation, for the purpose of soliciting additional proxies), the persons named in the proxy card and acting thereunder will have discretion to vote on those matters in accordance with their best judgment. We do not currently anticipate that any other matters will be raised at the Annual Meeting.
What will constitute a quorum at the Annual Meeting?
A quorum is the minimum number of shares required to be present at the Annual Meeting for the meeting to be properly held under our amended and restated bylaws, or bylaws, and Delaware state law. The presence, virtually or by proxy, of a majority of the aggregate voting power of the issued and outstanding shares of stock entitled to vote at the meeting will constitute a quorum at the meeting.
Shares that are voted “FOR,” “AGAINST,” or “ABSTAIN” will be treated as being present at the Annual Meeting for purposes of establishing a quorum. Accordingly, if you are a stockholder of record as of the Record Date and have returned a valid proxy or attend the virtual Annual Meeting in by means of remote communication, your shares will be counted for the purpose of determining whether there is a quorum, even if you wish to abstain from voting on some or all matters at the Annual Meeting. Broker Non-Votes will also be counted as present for purposes of determining the presence of a quorum.
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Except as otherwise expressly provided by our amended and restated certificate of incorporation, or certificate of incorporation, or bylaws, the holders of shares of our Class A Common Stock and our Class B Common Stock will vote together as a single class on all matters submitted to a vote or for the consent of the stockholders of TuSimple. Each holder of Class A Common Stock will have the right to one vote per share while each holder of Class B Common Stock will have the right to ten votes per share. A proxy submitted by a stockholder may indicate that the shares represented by the proxy are not being voted (“abstain”) with respect to a particular matter.
Under the General Corporation Law of the State of Delaware and our bylaws, abstentions and Broker Non­Votes are counted as present and entitled to vote and are, therefore, included for purposes of determining whether a quorum is present at the Annual Meeting.
If the shares present by means of remote communication or by proxy at the Annual Meeting do not constitute a quorum, the Annual Meeting may be adjourned by the chairperson of the Annual Meeting to a date not more than 120 days after the Record Date without notice other than announcement at the Annual Meeting.
Who is entitled to vote at the Annual Meeting?
The close of business on October 23, 2023 has been fixed as the record date (the “Record Date”) for the determination of stockholders entitled to receive notice of and to vote at the Annual Meeting. Only stockholders of record as of the close of business on the Record Date are entitled to receive notice of, to attend, and to vote at the Annual Meeting. On the Record Date, our outstanding voting securities consisted of 205,890,683 shares of the Company’s class A common stock (“Class A Common Stock”) and 24,000,000 shares of the Company’sCompany's Class B Common Stock (“Class B Common Stock”) outstanding. The holders of our Class A Common Stock have the right to one vote for each share of Class A Common Stock they held as of the Record Date, and theDate. The holders of our Class B Common Stock have the right to ten votes for each share of Class B Common Stock they held as of the Record Date. The holders of our Class A Common Stock and Class B Common Stock are voting as a single class on all matters presented at the Annual Meeting.
Stockholders of RecordRecord. . If shares of our common stock are registered directly in your name with our transfer agent, American Stock Transfer and Trust Company, LLC, you are considered the stockholder of record with respect to those shares, and the Notice was provided to you directly by us. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote live at the Annual Meeting. Throughout this proxy statement, we refer to these registered stockholders as “stockholders of record.”
Street Name StockholdersStockholders. . If shares of our common stock are held on your behalf in a brokerage account or by a bank or other nominee, under applicable rules of the Nasdaq Stock Market LLC (the “Nasdaq”), you are considered to be the beneficial owner of shares that are held in “street name,” and the Notice was forwarded to you by your broker, bank, or other nominee, who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank, or other nominee as to how to vote your shares. Beneficial owners are also invited to attend the Annual Meeting.
Q:
How many shares must be present or represented to conduct business at the Annual Meeting?
A:
A quorum is the minimum number of shares required to be present at the Annual Meeting for the meeting to be properly held under our amended and restated bylaws, or bylaws, and Delaware state law. The presence, virtually or by proxy, of a majority of the aggregate voting power of the issued and outstanding shares of stock entitled to vote at the meeting will constitute a quorum at the meeting. Except as otherwise expressly provided by our amended and restated certificate of incorporation, or certificate of incorporation, or by law, the holders of shares of our Class A Common Stock and our Class B Common Stock will vote together as a single class on all matters submitted to a vote or for the consent of the stockholders of TuSimple. Each holder of Class A Common Stock will have the right to one vote per share while each holder of Class B Common Stock will have the right to ten votes per share. A proxy submitted by a stockholder may indicate that the shares represented by the proxy are not being voted (“withhold,” or “abstain”) with respect to a particular matter.
UnderHow do I vote?
If your shares are registered directly in your name with our transfer agent, American Stock Transfer and Trust Company, LLC, you are considered the General Corporation Lawstockholder of record with respect to those shares, and the Notice was sent directly to you by us. You may authorize your proxy in the following ways:
Via the Internet by following the instructions provided in the Notice;
If you request printed copies of the Stateproxy materials by mail, by filling out the proxy card included with the materials; or
By calling the toll-free number found on the proxy card or the Notice.
Shares held in your name as the stockholder of Delaware and our bylaws, abstentions and broker “non-votes” are counted as present and entitled torecord may be voted electronically through the virtual meeting portal during the Annual Meeting. You may vote and are, therefore, included for purposes of determining whether a quorum is presentelectronically at the Annual Meeting.
A broker non-vote occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respectMeeting by going to that item and has not received instructions from the beneficial owner.
Q:
How can I vote my shares by virtually attending the Annual Meeting?
A:
Shares held in your name as the stockholder of record may be voted electronically through the virtual meeting portal during the Annual Meeting. You may vote electronically at the Annual Meeting by going to www.virtualshareholdermeeting.com/TSP2022www.virtualshareholdermeeting.com/TSP2023 and using your unique control number that was included in the Notice that you received in the mail to log in. You will need your unique control number to authenticate into the Annual Meeting. Shares held beneficially in street name may be voted virtually at the Annual Meeting only if you obtain a legal proxy from the broker, trustee or other nominee that holds your shares giving you the right to vote the shares. Even if you plan to attend the Annual Meeting, we recommend that you also submit your proxy card, if you have requested one, or following the voting directions described below, so that your vote will be counted if you later decide not to attend the meeting.
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Q:
How can I vote my shares without attending the Annual Meeting?
A:
Stockholder of record — If you are a stockholder of record, there are three ways to vote without attending the Annual Meeting:
Via the Internet — You may vote by proxy via the Internet by following the instructions provided in the Notice or, if you requested printed copies of the proxy materials by mail, by following the instructions provided in the proxy card. You will be asked to provide the control number from the Notice. Your vote must be received by 11:59 p.m. Eastern Time on June 8, 2022 to be counted.
By Telephone — You may vote by proxy by telephone by following the instructions provided in the Notice or, if you requested printed copies of the proxy materials by mail, by calling the toll-free number found on the proxy card. You will be asked to provide the control number from your proxy card. Your vote must be received by 11:59 p,m, Eastern Time on June 8, 2022 to be counted.
By Mail — If you request printed copies of the proxy materials by mail, you will receive a proxy card, and you may vote by proxy by filling out the proxy card and returning it in the envelope provided.
Beneficial owners — If you are a beneficial owner holding shares through a bank, broker or other nominee, please refer to your Notice or other information forwarded by your bank or broker to see which voting options are available to you. You are also invited to attend the Annual Meeting.
Q:
What proposals will be voted on at the Annual Meeting?
A:
At the Annual Meeting, stockholders will be asked to vote:
(1)
To elect five of our existing directors to serve as directors until the annual meeting held in 2023 and until their successors are duly elected and qualified;
(2)
To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2022; and
(3)
To transact such other business as may properly come before the Annual Meeting or any adjournment thereof.
Q:
What is the voting requirement to approve each of the proposals?
A:
Proposal One — The election of directors requires a plurality of the votes properly cast in person or by proxy at the meeting. “Plurality” means that the individuals receiving the most “for” votes are elected as directors. As a result, any shares not voted “for” a particular nominee (whether as a result of withholding, abstention or a broker non-vote) will not be counted in such nominee’s favor.
Proposal Two — The affirmative vote of a majority of the voting power of votes cast is required to ratify the appointment of KPMG LLP as our independent registered public accounting firm. Abstentions and broker non-votes will have no effect on the outcome of this proposal.
Q:
How does the board of directors recommend that I vote?
A:
Our board of directors unanimously recommends that you vote your shares:
“FOR” each of the nominees for election as director listed in Proposal One; and
“FOR” the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2022.
Q:
What happens if I do not give specific voting instructions?
A:
Stockholder of record — If you are a stockholder of record and you:
indicate when voting on the Internet or by telephone that you wish to vote as recommended by our board of directors; or
sign and return a proxy card without giving specific voting instructions,
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thenlegal proxy from the broker, trustee, or other nominee that holds your shares giving you the right to vote the shares. Even if you plan to attend the Annual Meeting, we recommend that you also submit your proxy card, if you have requested one, or following the voting directions described below, so that your vote will be counted if you later decide not to attend the meeting.
What happens if I do not give specific voting instructions?
Stockholder of record – Proxies properly authorized via one of the methods discussed above will be voted in accordance with the instructions contained therein. If the proxy is authorized but voting directions are not made, the proxy will be voted “FOR” each of the seven director nominees, “FOR” the ratification of the appointment of UHY LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023, and “FOR” the approval of the frequency of the vote on executive compensation. With respect to any other matters properly presented for a vote at the Annual Meeting, the persons named as proxy holders will vote your shares in the manner recommended by the board on all matters presented in this proxy statement and asthat the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting.
discretion. If you are a stockholder of record and you do not return a proxy card and do not vote your shares, no votes will be cast on your behalf on any of the items of business at the Annual Meeting.
Beneficial owners —- If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions then, under applicable rules, the organization that holds your shares may generally vote on “routine” matters but cannot vote on “non-routine” matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that organization will inform the inspector of election that it does not have the authority to vote on thissuch matter with respect to your shares.
For this current Annual Meeting, this year’s ratification of the appointment of UHY LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023 (Proposal Two) is a routine matter and your broker may vote on this matter. The election of directors (Proposal One) and the non-binding advisory vote on the frequency of vote on executive compensation (Proposal Three) are not “routine” matters. For those matters, brokers, banks, or other nominees shall follow their clients’ instructions. If no instructions are received, brokers, banks, or other nominees are precluded from voting on these matters. This is generally referred to as a “broker non-vote.”non-vote” (the “Broker Non-Vote”).
Q:
How may my brokerage firm or other intermediary vote my shares if I fail to provide timely directions?
A:
Brokerage firms and other intermediaries holding shares of common stock in street name for customers are generally required
How many votes are needed for the proposals to pass?
The proposals to be voted on at the Annual Meeting have the following voting requirements:
Proposal One: Pursuant to our bylaws, in an uncontested election, the seven director nominees will be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker will have discretion to vote your shares on our sole routine matter—the proposal to ratify the appointment of KPMG LLP. Your broker will not have discretion to vote on the election of directors, which is considered a “non-routine” matter, absent direction from you.
Please note that brokers may not vote your shares on the election of directors. This means that the director candidates receiving the most “FOR” votes are elected. In elections where company directors inare running unopposed, a director elected by a plurality can win an election regardless of the absencenumber of your specific instructions“FOR” votes received or of whether the number of votes “AGAINST” exceed the number of votes “FOR.”
Proposals Two and Three: You may vote “FOR,” “AGAINST,” or “ABSTAIN” on Proposals Two and Three. To be approved, each proposal must receive the affirmative vote of a majority of the votes cast, by means of remote communication or by proxy, at the Annual Meeting.
Abstentions and Broker Non-Votes, if any, will not be counted as votes cast on Proposals One and Three and will have no effect on the result of these votes. Proposal Two is considered a “routine” matter and a broker, bank, or other nominee will be permitted to howexercise his or her discretion. Abstentions on Proposal Two will not be counted as votes cast and will have no effect on the results of this vote.
Can I change or revoke my vote after I have voted?
Subject to vote, so we encourage you to provide instructions toany rules your broker, regarding the voting oftrustee, or nominee may have, you may change or revoke your shares
Q:
What happens if additional matters are presented at the Annual Meeting?
A:
If any other matters are properly presented for consideration at the Annual Meeting, including, among other things, consideration of a motion to adjourn the Annual Meeting to another time or place (including, without limitation, for the purpose of soliciting additional proxies), the persons named in the proxy card and acting thereunder will have discretion to vote on those matters in accordance with their best judgment. We do not currently anticipate that any other matters will be raised at the Annual Meeting.
Q:
Can I change or revoke my vote?
A:
Subject to any rules your broker, trustee or nominee may have, you may change your proxy instructions at any time before your proxy is voted at the Annual Meeting.
proxy at any time prior to it being exercised. If you are a stockholder of record, you may change your vote by (i) filing with our Corporate Secretary prior to your shares being voted at the Annual Meeting, a written notice of revocation or a duly executed proxy card, in either case dated later than the prior proxy card relating to the same shares, or (ii) by attendingvoting electronically during the Annual Meeting and voting in personat www.virtualshareholdermeeting.com/TSP2023 when you enter your unique control number (although attendance at the Annual Meeting will not, by itself, revoke a proxy). A stockholder of record that has voted on the Internetinternet or by telephone may also change his or her vote by later making a timely and valid Internet or telephone vote.
If you are a beneficial owner of shares held in street name, you may change your vote (i) by submitting new voting instructions to your broker, trustee or other nominee or (ii) if you have obtained a legal proxy from the broker, trustee or other nominee that holds your shares giving you the right to vote the shares, by attending the Annual Meeting and voting in person.
Any written notice of revocation or subsequent proxy card must be received by our Secretary prior to the taking of the vote at the Annual Meeting. Such written notice of revocation or subsequent proxy card should be hand delivered to our Secretary or should be sent so as to be delivered to our principal executive offices, Attention: Secretary.
Q:
Who will bear the cost of soliciting votes for the Annual Meeting?
A:
We will bear all expenses of this solicitation, including the cost of preparing and mailing these proxy materials. We may reimburse brokerage firms, custodians, nominees, fiduciaries and other persons representing beneficial
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ownersIf you are a beneficial owner of common stockshares held in street name, please contact your broker, trustee, or other nominee for their reasonable expensesinstructions on how to change your vote.
Is my vote confidential?
Proxy instructions, ballots, and voting tabulations that identify individual stockholders are handled in forwarding solicitation material to such beneficial owners. Directors, officers and employees of TuSimple may also solicit proxies in person or by other means of communication. Such directors, officers and employeesa manner that protects your voting privacy. Your vote will not be additionally compensated but may be reimburseddisclosed either within TuSimple or to third parties, except as necessary to meet applicable legal requirements, to allow for reasonable out-of-pocket expenses in connection with suchthe tabulation of votes and certification of the vote, or to facilitate a successful proxy solicitation.
Where can I find the voting results of the Annual Meeting?
We may engageintend to announce preliminary voting results at the servicesAnnual Meeting and publish final results within four business days after the Annual Meeting.
How can I ask questions at the Annual Meeting?
Stockholders will have the opportunity to submit questions during the Annual Meeting by following the instructions on the virtual-only Annual Meeting platform. Following the presentation of all proposals at the Annual Meeting, we will answer as many stockholder-submitted questions as time permits. If we receive substantially similar questions, we will group the questions together and provide a professional proxy solicitation firmsingle response to aid in the solicitation of proxies from certain brokers, bank nominees and other institutional owners. Our costs for such services, if retained,avoid repetition. We will not answer any questions that are irrelevant to the purpose of the Annual Meeting or our business or that contain inappropriate or derogatory references which are not in good taste.
Who will serve as inspector of elections?
The inspector of elections will be significant.a representative from American Election Services.
Q:
Is my vote confidential?
A:
Proxy instructions, ballots, and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within TuSimple or to third parties, except as necessary to meet applicable legal requirements, to allow for the tabulation of votes and certification of the vote, or to facilitate a successful proxy solicitation.
Q:
Who will serve as inspector of elections?
A:
The inspector of elections will be a representative from American Election Services.
Q:
Where can I find the voting results of the Annual Meeting?
A:
We intend to announce preliminary voting results at the Annual Meeting and will publish final results in a current report on Form 8-K within four business days after the Annual Meeting.
Q:
What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?
A:
You may submit proposals, including director nominations, for consideration at future stockholder meetings.
What is the process to propose actions for consideration at next year's annual meeting of stockholders or to nominate individuals to serve as directors?
You may submit proposals, including director nominations, for consideration at future stockholder meetings. To be considered for inclusion in the Company’sCompany's proxy materials for the 20232024 Annual Meeting of stockholders,Stockholders, your proposal must be submitted in writing by December 30, 2022July 2, 2024 to TuSimple’sTuSimple's Corporate Secretary at 9191 Towne Centre Drive, Suite 600,150, San Diego, CA 92122 and comply with the requirements in our bylaws and all applicable requirements of Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Proposals to be presented at our 2023 annual meeting2024 Annual Meeting of stockholdersStockholders that are not intended for inclusion in the proxy statement must be submitted in accordance with the applicable advance notice provisions of our bylaws. Our bylaws provide that, if you wish to submit a proposal that is not intended for inclusion in next year’s proxy materials or a proposal to nominate a director, you must do sono earlier than 5:00 p.m. Pacific Time on August 15, 2024 and no later than March 11, 2023 and not earlier than February 9, 2023, provided, however, that if our 2023 annual meeting of stockholders is held before May 10, 2023 or after August 18, 2023, then your proposal must be received no earlier than the close of business5:00 p.m. Pacific Time on the 120th day prior to such meeting and not later than the close of business on the later of the 90th day prior to such meeting or the 10th day following the day on which notice or public announcement of the date of such meeting is first made. You are also advised to review our bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.September 14, 2024.
In addition to satisfying the foregoing requirements, under our bylaws, to comply with the SEC’s universal proxy rules, (once effective), stockholders who intend to solicit proxies in support of director nominees other than TuSimple’sour nominees must provide notice to us that sets forth the information required by Rule 14a-19 under the Exchange Act, no later than April 10, 2023.with such notice being postmarked or transmitted electronically to TuSimple's Corporate Secretary at 9191 Towne Centre Drive, Suite 150, San Diego, CA 92122. To the extent that any information required by Rule 14a-19 is not required under our Bylaws to be included with your notice, we must receive such additional information by October 14, 2024.
You also may recommend candidates to our board of directors for consideration by our nominatingNominating and corporate governance committeeCorporate Governance Committee by following the procedures set forth below in the section “Board of Directors and Corporate Governance — - Director Nominations ProcessProcess.”.
What does it mean if multiple members of my household are stockholders but we only received one Notice in the mail?
We have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, we deliver a single copy of the Notice and, if applicable, the proxy materials to multiple stockholders who share the same address unless we have received contrary instructions from one or more of the stockholders. This procedure reduces our printing and mailing costs, fees, and the impact on the environment. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written request, we will
Q:
How may I obtain a copy of the bylaw provisions regarding stockholder proposals and director nominations?
A:
A copy of the full text of the bylaw provisions discussed above may be obtained by writing to our Secretary. A copy of our bylaws is available as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 2021, available through the SEC’s website, sec.gov. All notices of proposals by stockholders, whether or not included in TuSimple’s proxy materials, should be sent to our principal executive offices, Attention: Secretary.
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Q:
What does it mean if multiple members of my household are stockholders but we only received one Notice in the mail?
A:
We have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, we
promptly deliver a single copy of the Notice and, if applicable, the proxy materials to multiple stockholders who share the same address unless we have received contrary instructions from one or more of the stockholders. This procedure reduces our printing costs, mailing costs, and fees, and the impact on the environment. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written request, we will deliver promptly a separate copy of the Notice and, if applicable, the proxy materials to any stockholder at a shared address to which we delivered a single copy of any of these documents. To receive a separate copy of the Notice and, if applicable, the proxy materials, stockholders should send their requests to our principal executive offices, Attention: Secretary. Stockholders who hold shares in street name (as described below) may contact their brokerage firm, bank, broker-dealer, or other similar organization to request information about householding.
Q:
What is the mailing address for TuSimple’s principal executive offices?
A:
Our principal executive offices are located at 9191 Towne Centre Drive, Suite 600, San Diego, CA 92122. The telephone number at that location is (619) 916-3144.
Any written requests for additional information, copies of the proxy materials to any stockholder at a shared address to which we delivered a single copy of any of these documents. To receive a separate copy of the Notice and, 2021if applicable, the proxy materials, stockholders should send their requests to TuSimple's Corporate Secretary at 9191 Towne Centre Drive, Suite 150, San Diego, CA 92122. Stockholders who hold shares in street name may contact their brokerage firm, bank, broker-dealer, or other similar organization to request information about householding.
What can I do if I need technical assistance during the Annual Report, notices of stockholder proposals, recommendations for candidates toMeeting?
If you encounter any difficulties accessing the Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting log-in page.
Who can help answer my questions?
If you have any questions regarding this information or the proxy materials, please visit our board of directors, communications towebsite at https://ir.tusimple.com or contact our board of directorsinvestor relations department by telephone at (619) 916-3144 or any other communications should be sent to the address above.by email at ir@tusimple.ai.
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PROXY SUMMARY
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting.
The Board recommends that you vote as follows:
​
Agenda Item
​​
Proposal
​​
Board’s Vote Recommendation
​
​
PROPOSAL ONE
​​
To consider and vote upon the election of seven of our existing directors, named in this proxy statement, to serve as members of TuSimple’s Board of Directors until the annual meeting of stockholders to be held in 2024 and until their successors are duly elected and qualified.
​​
“FOR EACH COMPANY NOMINEE”
​
​
PROPOSAL TWO
​​
To consider and vote upon ratification of the appointment of UHY LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023.
​​
“FOR”
​
​
PROPOSAL THREE
​​
To approve, on a non-binding advisory basis, the frequency of the non-binding advisory vote on executive compensation.
​​
“ONE YEAR”
​
How to Vote
Internet
www.virtualshareholdermeeting.com/TSP2023
Attend our annual meeting virtually by logging into the virtual annual meeting website and vote by following the instructions provided on the website.
Telephone
1-800-690-6903
Mail
Mark, sign, date, and promptly mail the enclosed proxy card in the postage-paid envelope.
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PROPOSAL ONE
ELECTION OF DIRECTORS
General
OurThe Company's board of directors (the “Board”) currently consists of eightseven directors. The term ofseven persons named below, each of whom currently serves on our eight directors expires atBoard, have been recommended by our Nominating and Corporate Governance Committee and nominated by our Board to serve on the Board until our 2024 Annual Meeting.Meeting of Stockholders and until their respective successors are elected and qualify.
Our board of directors has nominated fiveseven of the current directors: Xiaodi Hou, Brad Buss, Karen C. Francis, Michelle M. SterlingMo Chen, Cheng Lu, James Lu, Wendy Hayes, Michael Mosier, J. Tyler McGaughey, and Reed B. WernerZhen Tao for election at the Annual Meeting. If they are elected, they will serve on our boardThe ages of directors until our 2023 annual meeting of stockholders and until their respective successors have been elected and qualified. Thethe nominees for director atas of the Annual Meeting, their ages as of April 12, 2022, and their positions and offices held with the Company, and other biographical information are set forth below. Other biographical information
Based on its review of the relationships between the director nominees and the Company, the Board has determined that all of our directors, other than Cheng Lu, our Chief Executive Officer, and Mo Chen, who currently holds 58% of the total company’s voting power, are independent under applicable SEC and NASDAQ rules.
Under the our policies and procedures for director candidates, in general, while there are no specific minimum qualifications for nominees, any candidate for service on the Board should possess the highest personal and professional ethics and be committed to representing the long-term interests of our stockholders.
The Board has no reason to believe that any of the persons named below as a nominee for our Board will be unable, or will decline, to serve as a member of the Board if elected. If any nominee is unavailable for election or service, the Board may designate a substitute nominee and the persons designated as proxy holders on the proxy card will vote for the members of our board of directors is set forth below. Charles Chao, Mo Chen and Bonnie Yi Zhang will not be standing for reelection atsubstitute nominee recommended by the Annual Meeting. We would like to thank Mr. Chao, Mr. Chen and Ms. Zhang for their years of service to TuSimple.Board.
Our board of directorsBoard is not currently classified and will not be classified into three classes of directors and all of our directors will stand for reelection each year until the time after the Annual Meeting when the outstanding shares of our Class B Common Stock represent less than 40% of the total voting power of our common stock (the “Voting Threshold Date”). Following the Voting Threshold Date, our board of directorsBoard will be classified into three classes of directors, each of whom will hold office for a three-year term.
Each person nominated for election has agreedconsented to being named in this proxy statement and to serve if elected. Directors are elected by a plurality of the votes properly cast in person or by proxy at the meeting. This means that nominees receiving the highest number of “For”“FOR” votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the fiveseven nominees named below. However, if you are a street name stockholder, which means that your shares are held by a broker, bank, or other nominee, your shares will not be voted for the election of directors unless you have provided voting instructions to your nominee.
Nominees at the Annual Meeting
The table below provides information about the directors nominees at the annual meeting:
Name
​​
Age
​​
Position(s) with TuSimple
Dr. Xiaodi HouMo Chen
​​
3739
​​
President, Chief Executive Officer, Chief Technology
Officer and Chairman of the Board
Brad BussCheng Lu
​​
5840
​​
Chief Executive Officer and Director
Wendy Hayes
​​
53
​​
Director
Karen C. FrancisJames Lu
​​
5941
​​
Director
Michelle M. SterlingMichael Mosier
​​
5450
​​
Director
Reed B. WernerJ. Tyler McGaughey
​​
42
​​
Director
We believe that the director nominees reflect a board of directors that is comprised of directors who (i) are predominantly independent, (ii) are of high integrity, (iii) have broad, business-related knowledge and experience at the policy-making level in business, government, or technology, including their understanding of our industry and business in particular, (iv) have individual qualifications, relationships, and experience that would increase the overall effectiveness of our board of directors, (v) meet other requirements as may be required by applicable rules, such as financial literacy or financial expertise with respect to audit committee members, (vi) are committed to enhancing stockholder value, and (vii) have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. Specific experiences, qualifications, attributes or skills of nominees that contributed to our conclusion that the nominees should serve as directors are noted in their biographies.
Directors not Standing for Reelection
Name
​​
Age
​​
Position(s) with TuSimple
Charles Chao
​​
5644
​​
Director
Mo ChenZhen Tao
​​
38
​​
Director
Bonnie Yi Zhang
​​
4843
​​
Director
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Information Regarding the DirectorsNominees
Xiaodi Hou Mo Chenis our co-founder and has served as our Chief Technology Officer and a member of our board of directors since our inception in 2015. Mr. Hou was appointed President, Chief Executive Officer and Chairman of our board of directors on March 3, 2022.the Company's Board. Previously, Mr. Hou has more than ten years of research and development experience in computer vision and machine learning and is responsible for our new technology and advanced product development. Mr. Hou currently holds 23 patents in the field of autonomous vehicles. In the field of computer vision, Mr. Hou has developed leading theories in computational models for visual saliency. Prior to founding our Company, Mr. Hou served as co-founder and Chief Technology Officer at Cogtu, an image recognition technology company. Mr. Hou also serves as the reviewer of more than ten major computer vision journals and conferences. He holds a Ph.D. from the California Institute of Technology and a B.Eng in computer science from Shanghai Jiao Tong University. We believe that Mr. Hou is qualified to serve as a member of our board of directors because of his expertise in, and contributions to, our technologies.
Brad Buss has been a member of our board of directors since January 2021. From August 2014 until his retirement in February 2016, Mr. BussChen served as the Chief Financial Officer of SolarCity. Mr. Buss served as theCompany’s Executive Vice President of Finance and Administration and Chief Financial Officer of Cypress Semiconductor Corporation, a semiconductor design and manufacturing companyChairman from August 2005September 2020 to June 2014. Mr. Buss held prior financial leadership roles with Altera Corporation, Cisco Systems, Inc., Veba Electronics LLC and Wyle Electronics, Inc. In addition to serving on our board of directors, Mr. Buss currently serves on the boards of directors of Marvell Technology Group Ltd., AECOM and QuantumScape Corporation as well as one private company. Within the past five years, Mr. Buss served as a director of Advance Auto Parts, Inc., Tesla Motors Inc., CaféPress Inc and Cavium, Inc. Mr. Buss holds a Bachelor of Arts in economics from McMaster University and an Honors Business Administration degree, majoring in finance and accounting, from the University of Windsor. We believe that Mr. Buss is qualified to serve as a member of our board of directors because of his executive experience and his financial and accounting expertise with both public and private companies in diverse industries.
Karen C. Francis has been a member of our board of directors since February 2021. Since September 2021, Ms. Francis has served on the board of Quanergy Systems, Inc., as the chair of its nominating and corporate governance committee2022 and as a member of its compensation committee. Since September 2020, Ms. Francis hasthe Board from 2015 to June 2022. Mr. Chen served as the chair of the board and a member of the compensation committee at Vontier Corporation, a public company focused on mobility and transportation businesses. She has also served on the audit committee and as chair of the compensation committee for Vontier. In addition, Ms. Francis serves as Senior Advisor to TPG Capital. Previously, Ms. Francis served on the board and as audit committee chair for Reinvent Technology Partners Y from March 2021 to November 2021. Ms Francis also served on the board of directors of Telenav, Inc. from December 2016 to November 2019. Ms. Francis served as lead independent director, chair of the compensation committee and a member of the nominating and governance committee of Telenav, Inc. Prior to that, she served as a director of The Hanover Insurance Group, Inc. from May 2014 to May 2017 and AutoNation, Inc. from February 2016 to April 2018. Ms. Francis served asCompany’s Chief Executive Officer of AcademixDirect, Inc., a technology innovatorfrom our inception in education, and as its Executive Chairman from 20092015 to 2017. From 2004September 2020. Prior to 2007, Ms. Francis was Chairman and Chief Executive Officer of Publicis & Hal Riney. From 2001 to 2002, shefounding the Company, Mr. Chen served as Vice President of Ford Motor Company. From 1996 to 2000, Ms. Francis held several positions with General Motors, including serving as General Manager of the Oldsmobile Division. Ms. Francis holds an M.B.A. from Harvard Business Schoolfounder and a B.A. in economics from Dartmouth College. We believe that Ms. Francis is qualified to serve as a member of our board of directors because of her experience as a chief executive officer director, strategic advisor and investor with a deep knowledge of corporate governance and because of her strong track record of successfully building companies and businesses across multiple industries and sizes.
Michelle M. Sterling has been a member of our board of directors since October 2021. Since June 2019, Ms. Sterling has served as a member of the board of directors of Digital Turbine, Inc. and currently serves on its compensation and human capital management and governance committees. Since June 2020, Ms. Sterling has engaged in human resources consulting. From 1994 to 2020, Ms. Sterling served in various capacities at Qualcomm, Inc. (“Qualcomm”) and had been Executive Vice President of Human Resources at Qualcomm starting in 2015. Previously, she was SVP, Human Resources, at Qualcomm. Throughout her tenure with Qualcomm, Ms. Sterling supported Qualcomm’s strategies in complex transactions, including joint ventures and divestitures. Ms. Sterling had direct responsibility for all human resources functions for more than 33,000 Qualcomm employees worldwide and served as a member of Qualcomm’s executive committee. She formally served on the executive committee and board of directors of San Diego Regional Economic Development Corporation, the executiveDeep
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committee of the Corporate Directors Forum, and previously was a board member for Girl Scouts San Diego, chair of the board of directors of Serving Seniors, vice-chair of the board of directors and chair of the advisory council of Occupational Training Services, and chair of the corporate board of directors for the San Diego Workforce Partnership. Ms. Sterling holds a B.S. in Business Management from the University of Redlands. We believe Ms. Sterling is qualified to serve as a member of our board of directors because of her wide-ranging experience and deep expertise in navigating the changing global technology landscape and its implications on talent.
Reed B. Werner has been a member of our board of directors since April 2022 as the Security Director under The Committee on Foreign Investment in the United States National Security Agreement (the “NSA”) between the Company and certain entities of the U.S. Government. During his career, Mr. Werner has held various positions with the U.S. Government and the private sector. From December 2019 through January 2021, Mr. Werner served as the Deputy Assistant Secretary of Defense for South and Southeast Asia Security Affairs. From August 2018 through January 2019, Mr. Werner was Vice President for Strategic Finance and Global Public Policy at VIPKid, a global online English education platform. He joined VIPKid after a career with Goldman Sachs from 2009 through June 2018 in the firm’s investment banking division and executive office in New York and Hong Kong, where he advised on a range of financial transactions in the U.S., China, and Southeast Asia markets. Mr. Werner began his career in U.S. Government service with the Department of State, Department of Defense, and on the National Security Council staff at the White House. He holds a B.A. from the University of Pennsylvania and an M.B.A. from Columbia University. We believe Mr. Werner is qualified to serve as a member of our board of directors because of his extensive business and finance experience, including in Asia, and his experience in national and investment security issues.
Information Regarding the Directors not Standing for Reelection
Charles Chao has been a member of the Board since April 22, 2019. Mr. Chao currently serves as the Chairman of the board of the directors and as Chief Executive Officer of Sina Corporation. In his time at Sina Corporation, Mr. Chao also served as President from 2005 to 2013, Chief Financial Officer from 2001 to 2006, Co-Chief Operating Officer from 2004 to 2005, Executive Vice President from 2002 to 2003, and Vice President of Finance from 1999 to 2001. Prior to joining Sina Corporation, Mr. Chao served as an audit manager at PriceWaterhouseCoopers, LLP, an accounting firm. Prior to that, Mr. Chao was a news correspondent at Shanghai Media Group. Mr Chao is currently the Executive Chairman of the board of Sina Corporation’s subsidiary, Weibo Corporation, a leading social media company, a director of NetDragon Websoft Inc., a company providing technology for online gaming, and a director of Leju, an online-to-offline (O2O) real estate services provider in China. Mr. Chao holds a B.A. in Journalism from Fudan University in Shanghai and an M.A. in Journalism from University of Oklahoma. He earned his Master of Professional Accounting degree from University of Texas at Austin. We believe Mr. Chao’s executive and accounting experience are an excellent asset to the Board of Directors.
Mo Chen is our co-founder and served as our Executive Chairman from September 2020 through March 2022. Mr. Chen has served as a member of our board of directors since our inception in 2015. Mr. Chen served as our Chief Executive Officer from our inception in 2015 to September 2020. Prior to founding our Company, Mr. Chen served as founder and Chief Executive Officer at Deep Blue Brothers, an online gaming platform. Prior to that, he served as a founder of startups in the fields of traditional and online advertising and used car online marketplace.marketplaces. Mr. Chen is also a founder of Hydron Inc. He has more than 1312 years of entrepreneurship and management experience. Mr. Chen is a Canadian citizen. We believe that Mr. Chen is qualified toshould serve as a member of our board of directorsBoard because he is experienced in founding, leading, and managing technology companies.
Bonnie Yi Zhang Cheng Luhas beenserved as our Chief Executive Officer and as a director since November 2022 and served as the Company’s President from January 2019 to March 2022, as Chief Executive Officer from September 2020 to March 2022, and as a member of the Board from June 2020 to March 2022. Cheng Lu also served as the Company’s Chief Financial Officer from January 2019 to December 2020. Cheng Lu has more than 15 years of experience in operations, strategy, and corporate finance. Prior to joining the Company, from 2016 to 2019, Cheng Lu served as co-founder and chief operating officer of KCA Capital Partners, a growth equity investment fund. Prior to KCA Capital Partners, Cheng Lu was a private equity investor. Cheng Lu holds a B.S. in computer science and economics from the University of Virginia, and an M.B.A. from Harvard Business School. Cheng Lu is an American citizen. We believe that Cheng Lu should serve as a member of our boardBoard because of directorshis leadership experience with our company and his background in corporate finance and strategy.
Wendy Hayes has served as a director on our Board since December 2022. Ms. Hayes brings to TuSimple extensive financial and business oversight experience. Ms. Hayes has served as an independent director of SharkNinja Inc. since July 2023, Apollomics Inc. since March 2023, SciClone Pharmaceuticals (Holdings) Limited since March 2021, Gracell Biotechnologies Inc. since January 2021, iHuman Inc. since October of 2020, Burning Rock Biotech Limited since June 2020, and Tuanche Limited since November 2018. Between May 2013 and September 30, 2020.2018, Ms. Zhang currently servesHayes served as Chief Financial Officer of Sina Corporation.the inspections leader at the Public Company Accounting Oversight Board in the United States. Prior to joining Sina Corporation,that, Ms. Zhang served as Chief Financial Officer of Weibo Corporation, a subsidiary of Sina Corporation from 2014 to 2015. Before working at Weibo Corporation, Ms. Zhang was the Chief Financial Officer of AdChina Ltd., a company operating an integrated internet advertising platform in China, from 2011 to 2014. From 2007 to 2011, Ms. ZhangHayes was an audit partner ofat Deloitte Touche Tohmatsu based(China), having worked in Shanghai, withvarious Deloitte global offices. Ms. Hayes is a focus on serving Chinese companies listedcertified public accountant in the United States (California) and Chinese companies making initial public offerings in the United States. From 2005China. We believe that Ms. Hayes is qualified to 2007, sheserve as a member of our Board because of her extensive financial and accounting expertise and business oversight experience.
James Lu has served as a senior managerdirector on our Board since December 2022. James Lu is the founding partner of Joffre Capital, a global investment firm focused on consumer software, technology, and internet businesses, where he has served since June 2017. James Lu served as the director, chairman, and chief executive officer of Life Concepts Holdings Limited, an investment company, from October 2018 to June 2023. James Lu has served as the Chairperson of Grindr (NSYSE: GRND) since June 2020. James Lu also has served as a Director of Fusion Media Limited, an Internet publishing company, since February 2021, and a Director of Global Commerce Technology Limited, a software development company, since February 2022. James Lu previously served as the Vice President of content ecosystems at Baidu, Inc. from 2015 to 2017, and as the Global Head of Amazon Marketing Services (now Amazon Advertising) from 2011 to 2015. James Lu was a founding member and director of product management at Chegg, Inc., a textbook rental company, from 2007 to 2011. In 2006, James Lu founded Yoolin, a social network, and served as its Chief Executive Officer from 2006 to 2007. James Lu received his Bachelor of Science and Master of Science in Electrical Engineering and Computer Science from the University of Michigan. We believe that James Lu is qualified to serve as a member of our Board because of his business experience, technical knowledge, and experience in the technology industry.
Michael Mosier has served as a director on our Board since December 2022. He has vast experience in advanced technology as well as the federal government across national security-related roles, including at the U.S. Department of Treasury, U.S. Department of Justice, and White House National Office SEC Services groupSecurity Council. Mr. Mosier is a co-founder of DeloitteArktouros PLLC, a legal boutique dedicated to emergent technology, since January 2022. He is a partner at ex/ante, an early-stage venture fund investing in technology that advances democratic resilience and personal sovereignty, since March 2023. From August 2021 through March 2023, Mr. Mosier served as the General Counsel of Espresso Systems, a cryptography and distributed private computation company. Prior to that, Mr. Mosier served as the Acting Director, from April 2021 to August 2021, Deputy Director/Digital Innovation Officer, from February 2020 to March 2021, and Chief of Strategic Advancement, from April 2018 to June 2019, at the Financial Crimes Enforcement Network, U.S. Department of the Treasury. Mr. Mosier also served as the Counselor (Cybersecurity & Touche, LLP. While she was with that group, Ms. Zhang was primarily responsible for pre-issuance reviewsEmerging Technology) to the Deputy Secretary of securities offering documents and periodic reportsthe U.S. Department of Treasury, from March 2021 to be filed withApril 2021. Mr. Mosier served as the SEC and was primarily focused on foreign private issuers. Ms. Zhang graduated summa cumChief Technical Counsel at Chainalysis Inc., from June 2019 to February 2020. Mr. Mosier
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laude in 1997 with a B.A. in Business Administrationalso served as Associate Director of the Office of Foreign Assets Control, U.S. Department of the Treasury, from McDaniel College in Maryland. SheJune 2015 to April 2018. We believe that Mr. Mosier is a certified public accountant in the State of Maryland and isqualified to serve as a member of the American Institution of Certified Public Accountants. Ms. Zhang brings to our Board because of Directorshis extensive experience in financial accountingnational and reportinginvestment security issues.
J. Tyler McGaughey has served as wella director on our Board since March 2023. Beginning in March 2021, Mr. McGaughey has been a partner at a law firm in Washington, D.C., where he advises investment funds and companies on compliance with national security laws and regulations, with a particular focus on matters involving CFIUS. From October 2019 to January 2021, Mr. McGaughey served as significant executivethe Deputy Assistant Secretary for Investment Security at the U.S. Department of the Treasury, where he was responsible for managing CFIUS’s day-to-day operations. From November 2014 to October 2019, Mr. McGaughey served at the U.S. Attorney’s Office as an Assistant U.S. Attorney in the Eastern District of Virginia (Alexandria Division), where he prosecuted a wide range of criminal offenses in federal district court. During his final year at the U.S. Attorney’s Office, Mr. McGaughey was detailed to the White House Counsel’s Office, where he served as an Associate Counsel to the President. At the White House, Mr. McGaughey worked on congressional oversight and national security matters. Before finishing his law degree, from 2001 to 2006, Mr. McGaughey served as an infantry officer in the Marine Corps. Mr. McGaughey received his Bachelor’s in Arts from the University of Virginia and his Juris Doctor from Yale University. We believe that Mr. McGaughey is qualified to serve as a member of our Board because of his extensive government service and deep expertise in regulatory compliance.
Zhen Tao has served as a director on our Board since March 2023. Ms. Tao has served as a Senior Partner at Third Square Capital Management, an investment firm focused on global consumer-driven, long-term growth companies since April 2019. Prior to that, from February 2012 to March 2017, Ms. Tao worked as a managing director for Summitview Capital and, from October 2010 to January 2012, as a partner for Ariose Capital. Ms. Tao also serves as the South Pasadena City Treasurer where she oversees the city's investment portfolio and provides independent oversight for its finances. Ms. Tao received her Bachelor's Degree in Economics from the Wharton School of the University of Pennsylvania. We believe that Ms. Tao is qualified to serve as a member of our Board because of her extensive investment management, investment banking, and capital markets experience.
Key Skills
SKILLS
​​
Mo
Chen
​​
Wendy
Hayes
​​
Michael
Mosier
​​
James
Lu
​​
Zhen
Tao
​​
J. Tyler
McGaughey
​​
Cheng
Lu
Executive Leadership
​​
X
​​
X
​​
​​
X
​​
​​
​​
X
Financial Expertise
​​
​​
X
​​
​​
X
​​
X
​​
​​
X
Investment
​​
​​
X
​​
​​
X
​​
X
​​
​​
X
Technology
​​
X
​​
​​
X
​​
X
​​
​​
​​
X
Risk and Compliance
​​
​​
​​
X
​​
​​
​​
X
​​
Legal, Regulatory and Public Policy
​​
​​
X
​​
X
​​
​​
​​
X
​​
Environmental / Social/ Governance
​​
​​
​​
​​
​​
X
​​
X
​​
There are no family relationships among any of our directors or executive officers. See “Board of Directors and Corporate Governance” and “Board of Directors and Corporate Governance — Director Compensation” below for additional information regarding our board of directors.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
EACH OF THE FIVESEVEN DIRECTOR NOMINEES.
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PROPOSAL TWO
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
General
OurThe Company's audit committee of our Board (the “Audit Committee”), which is composed entirely of independent directors, has selected the firm of KPMGUHY LLP (“UHY”), independent registered public accountants, to audit our financial statements for the year ending December 31, 2022. KPMG LLP audited our financial statements and the financial statements of our predecessor TuSimple (Cayman) Limited since the year ended December 31, 2018.
Notwithstanding its selection and even if our stockholders ratify the selection, our audit committee, in its discretion, may appoint another independent registered public accounting firm at any time during the year if the audit committee believes that such a change would be in the best interests of TuSimple and its stockholders.2023.
At the Annual Meeting, the stockholders are being asked to ratify the appointment of KPMG LLPUHY as our independent registered public accounting firm for the year ending December 31, 2022.2023. Our audit committeeAudit Committee is submitting the selection of KPMG LLPUHY to our stockholders because we value our stockholders’stockholders' views on our independent registered public accounting firm and as a matter of good corporate governance. Representatives of KPMG LLPUHY will be present at the Annual Meeting, and they will have an opportunity to make statements and will be available to respond to appropriate questions from stockholders.
The affirmative voteratification of the holdersselection of UHY requires the affirmative vote of a majority of the voting power of the votes properly cast in person or by proxy at the meeting will be requiredAnnual Meeting and entitled to ratify the selection of KPMG LLPvote thereon.
Principal Accounting Fees and Services
The following table sets forth all fees incurred for professional audit services and other services rendered by the Company’s previous auditor, KPMG LLP, during the years ended December 31, 20202021 and 2021:2022 (in thousands):
(in thousands)
​​
2020
​​
2021
Audit Fees1
​​
$1,145
​​
$930
Audit-Related Fees2
​​
—
​​
—
Tax Fees3
​​
$68
​​
$93
All Other Fees4
​​
—
​​
—
Total Fees
​​
$1,213
​​
$1,023
 
​​
2021
​​
2022
Audit Fees(1)
​​
$930
​​
$1,198
Audit-Related Fees(2)
​​
—
​​
—
Tax Fees(3)
​​
93
​​
119
All Other Fees(4)
​​
—
​​
—
Total Fees
​​
$1,023
​​
$1,317
(1)
Audit Fees: This category includes fees for professional services provided in connection with the audit of our financial statements, review of our quarterly financial statements, and audit services provided in connection with other regulatory filings. This category also includes fees for services incurred in connection with our initial public offering.
(2)
Audit-Related Fees: No such fees were incurred.
(3)
Tax Fees: This includes fees for transfer pricing services and consultation on tax matters.
(4)
All Other Fees: No such fees were incurred.
Change of Independent Registered Public Accounting Firm
As disclosed in our Current Report on Form 8-K, filed on May 11, 2023 with the SEC, on May 10, 2023, our Audit Committee approved the appointment of UHY as the Company’s new independent registered public accounting firm. During the Company’s two most recent fiscal years (fiscal years ended December 31, 2021 and December 31, 2022) and the subsequent interim period through May 10, 2023, neither the Company nor anyone on its behalf consulted UHY regarding any of the matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.
Pre-Approval of Audit and Non-Audit Services
Consistent with requirements of the SEC and the Public Company Accounting Oversight Board regarding auditor independence, our audit committeeAudit Committee is responsible for the appointment, compensation, and oversight of the work of our independent registered public accounting firm. In recognition of this responsibility, our audit committee,Audit Committee, or the chair, if such approval is needed between meetings of the audit committee, generally pre-approves all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services, and other services.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” RATIFICATION
RATIFICATION OF THE APPOINTMENT OF KPMGUHY LLP AS OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2022.2023.
1
Audit Fees: This category includes fees for professional services provided in connection with the audit of our financial statements, review of our quarterly financial statements, and audit services provided in connection with other regulatory filings. This category also includes fees for services incurred in connection with our initial public offering
2
Audit-Related Fees: No such fees were incurred.
3
Tax Fees: This includes fees for transfer pricing services and consultation on tax matters.
4
All Other Fees: No such fees were incurred.
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AUDIT COMMITTEE REPORT
The information contained in the following report of TuSimple’s audit committee is not considered to be “soliciting material,” “filed,” or “incorporated by reference” in any past or future filing by us under the Securities Exchange Act of 1934 or the Securities Act of 1933 unless and only to the extent that TuSimple specifically incorporates it by reference.
The audit committee is a committee of the board of directors comprised solely of independent directors as required by Nasdaq listing rules and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Board has determined that Wendy Hayes is an “audit committee financial expert,” as that term is defined under Item 407(d) of Regulation S-K.
The Audit Committee operates under a written charter approved by the Board, a copy of which is available on the Company's website. As more fully described in the charter, the primary purpose of the Audit Committee is to assist the Board in its oversight of the integrity of the Company's financial statements and effectiveness of internal controls over financial reporting and the performance, and qualification and independence of the Company's independent registered public accounting firm.
The Company's management prepares the Company's consolidated financial statements in accordance with accounting principles generally accepted in the United States of America and is responsible for the financial reporting process that generates these statements. Management is also responsible for establishing and maintaining adequate internal controls over financial reporting. The Audit Committee, on behalf of the Board, monitors and reviews these processes, acting in an oversight capacity relying on the information provided to it and on the representations made to it by the Company's management, its auditors, and other advisors.
The Audit Committee has reviewed and discussed with TuSimple’s management and UHY LLP the audited consolidated financial statements of TuSimple for the year ended December 31, 2022. The audit committee has also discussed with UHY LLP the matters required to be discussed by applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and the SEC.
The Audit Committee has received and reviewed the written disclosures and the letter from UHY LLP required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with UHY LLP its independence from us.
Based on the review and discussions referred to above, the Audit Committee recommended to the board of directors that the audited consolidated financial statements be included in TuSimple’s annual report on Form 10-K for the year ended December 31, 2022 for filing with the Securities and Exchange Commission.
Respectfully submitted by the members of the audit committee of the board of directors:
Wendy Hayes
James Lu
Zhen Tao
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PROPOSAL THREE

THE NON-BINDING ADVISORY VOTE ON THE FREQUENCY OF
EXECUTIVE COMPENSATION VOTE
The Dodd-Frank Act enables our stockholders to indicate, at least once every six years, how frequently we should seek a non-binding vote on the compensation of our named executive officers. By voting on this proposal, stockholders may indicate whether they would prefer a non-binding vote on named executive officer compensation once every one, two, or three years.
After careful consideration, our Board has determined that a non-binding vote on executive compensation that occurs annually is the most appropriate alternative for the Company, and therefore recommends that you vote for a one-year interval for non-binding votes on executive compensation.
In formulating its recommendation, our Board considered that since compensation decisions are made annually, an annual advisory vote on executive compensation will allow stockholders to provide more frequent and direct input on our compensation philosophy, policies, and practices. An annual approach provides regular input by stockholders, while allowing time to evaluate the effects of our compensation program on performance over a longer period. However, we understand that our stockholders may have different views as to what is the best approach for the Company, and we look forward to hearing from our stockholders on this proposal.
You may cast your vote on your preferred voting frequency by choosing the option of one year, two years, three years, or abstain from voting when you vote in response to the resolution set forth below:
“RESOLVED, that the option of once every one year, two years, or three years that receives the highest number of votes cast for this resolution will be determined to be the preferred frequency with which the Company is to hold a stockholder vote to approve the compensation of the named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables, and the other related disclosure.”
The option of one year, two years, or three years that receives the highest number of votes cast by stockholders will be the frequency for the advisory vote on executive compensation that has been selected by stockholders. However, this vote is advisory and is not binding on the Company, the Compensation Committee, or our Board. The Board may decide that it is in the best interests of our stockholders and the Company to hold an advisory vote on executive compensation more or less frequently than the option approved by our stockholders.
Vote Required
The approval of the frequency of future stockholder advisory votes on the compensation of the Company’s named executive officers will be considered the advisory vote of our stockholders. You may vote to hold such advisory votes every “ONE YEAR,” “TWO YEARS,” or “THREE YEARS,” or you may indicate that you wish to “ABSTAIN” from voting on this proposal. Abstentions and broker non-votes will have no effect on the outcome of this proposal.
THE BOARD RECOMMENDS THAT YOU VOTE “ONE YEAR” AS THE FREQUENCY
OF FUTURE STOCKHOLDER VOTES, ON A NON-BINDING ADVISORY BASIS,
ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding the Company’s current directors and executive officers. There is no family relationship between or among any of the current directors or executive officers, and the Company is not aware of any arrangement or understanding between any current director or executive officer and any other person pursuant to which he or she was elected to his or her current position, except as described under “Voting Agreement” below.
Name
​​
Age
​​
Position(s) with TuSimple
Mo Chen
​​
39
​​
Executive Chairman of the Board
Cheng Lu
​​
40
​​
Chief Executive Officer and Director
Eric Tapia
​​
46
​​
Chief Financial Officer
Wendy Hayes
​​
53
​​
Director
James Lu
​​
41
​​
Director
Michael Mosier
​​
50
​​
Director
Tyler McGaughey
​​
44
​​
Director
Zhen Tao
​​
43
​​
Director
For the background and business experience of our directors and director nominees, including Cheng Lu, our current CEO, see “Proposal One – Election of Directors – Information Regarding the Nominees.” Set forth below is a brief description of the background and business experience of our current chief financial officer:
Eric Tapia has served as our Chief Financial Officer since December 2022, our interim Chief Financial Officer from June 2022 until December 2022, and our Vice President, Global Controller from May 2021 until June 2022. Mr. Tapia brings more than 20 years of experience working in finance, controllership, audit, and interacting with public companies’ Boards and Audit Committees. Before TuSimple, Mr. Tapia was the VP Controller of W.W. Grainger, Inc. (NYSE: GWW), a supplier and distributor of maintenance, repair, and operating products. In this role, Mr. Tapia led large multi-country teams and was responsible for Grainger’s global controllership and tax operations, financial reporting (internal/managerial, SEC reporting, external audits), financial operations, and internal controls. Previously, Mr. Tapia served as Grainger’s Vice President, Internal Audit, and, before joining Grainger in 2010, Mr. Tapia was an audit partner with KPMG. Mr. Tapia is a Certified Public Accountant and holds an accounting degree from the University of Puerto Rico and an M.B.A. from Duke University’s Fuqua School of Business.
Voting Agreement
As previously disclosed, on November 9, 2022, the Company’s stockholders White Marble LLC and White Marble International Limited (collectively, the “Principal Parties”) (i) granted Mr. Chen, who is currently the Executive Chairman of the Board, an irrevocable proxy (the “Proxy”) pursuant to which Mr. Chen has the right to exercise, in his sole discretion, each shareholder’s rights to vote, consent, or waive any rights attaching to all equity securities of the Company beneficially owned by the Principal Parties, including with respect to election of directors, and (ii) entered into a voting agreement (the “Voting Agreement”) with Mr. Chen, pursuant to which the Principal Parties will vote, or cause to be voted, all equity securities of the Company beneficially owned by the Principal Parties as directed by Mr. Chen at any regular or special meeting of the Company’s stockholders or in connection with any written consent of the Company’s stockholders. The Proxy will remain in effect until the earlier to occur of (i) the two-year anniversary of the date of the Proxy and (ii) mutual agreement among Mr. Chen and the Principal Parties in writing to terminate the Proxy. The Voting Agreement will be terminated upon mutual agreement among Mr. Chen and the Principal Parties. Based on a joint Schedule 13D filed on November 15, 2022 by Mr. Chen, THC International Limited, Mo Star LLC, Brown Jade Holding Limited, and Gray Jade Holding Limited, no monetary consideration was given or received by any party in exchange for executing the Proxy or the Voting Agreement.
Section 16(a) Beneficial Ownership Reporting Compliance
Compliance with Section 16(a) of the Exchange Act requires the Company's executive officers and directors, and persons who own more than 10% of a registered class of its equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors, and greater than 10% stockholders are required by SEC rules to furnish the Company with copies of all Section 16(a) forms they file.
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Based solely on a review of the copies of such forms furnished to the Company, the Company believes that, during 2022, all Section 16(a) filing requirements applicable to its officers, directors, and greater than 10% stockholders were in compliance with Section 16(a).
CORPORATE GOVERNANCE
Our Board believes that our corporate governance structure aligns the Company’s interests with those of our stockholders. Notable features of our corporate governance structure that evidence our commitment to good corporate governance include the following, among others:
our Board is not staggered, with each of our directors subject to re-election annually;
of the seven persons who serve on our Board, five, or 71% of our directors, have been determined by us to be independent for purposes of the NASDAQ’s corporate governance listing standards and Rule 10A-3 under the Exchange Act;
we have a clawback provision in our equity compensation plan and equity award agreements;
we prohibit officers, directors, and employees from engaging in short sales and hedging of our securities;
we restrict the holding of our securities in margin accounts or otherwise pledging our securities as collateral by our officers, directors, and employees, with limited exceptions;
we do not use corporate funds for political or charitable donations; and
we are committed to diversity, with 30% of our Board being female and 71% of our Board consisting of underrepresented groups.
Code of Conduct and Corporate Governance Guidelines
Our board of directorsBoard has adopted a Code of Conduct (the “Code”and Corporate Governance Guidelines (collectively, the “Governance Documents”). The Code appliesBoth documents apply to all of our employees, officers, and directors, as well as all of our contractors, consultants, suppliers, and agents in connection with their work for us. Our Governance Documents address, among other things, legal compliance, conflicts of interest, corporate opportunities, protection and proper use of Company assets, confidential and proprietary information, integrity of records, and compliance with accounting principles. The full text of the CodeGovernance Documents has been posted on our website at www.tusimple.com under the Investor Relations section.website. We intend to disclose future amendments to, or waivers of, our Code,the Governance Documents, as and to the extent required by SEC regulations, at the same location on our website identified above or in public filings.
Board CompositionTransactions in the Company's Securities
Our boardBoard has adopted an Insider Trading Policy, which applies to all of our directors, currently consistsofficers, employees, and agents (such as consultants and independent contractors), as well as certain family members, economic dependents, and any other individuals or entities whose transactions in securities such individual influences, directs, or controls. Under this policy, such individuals are prohibited from transacting in publicly-traded options, such as puts and calls, and other derivative securities with respect to TuSimple's securities, and such prohibition extends to any hedging or similar transaction designed to decrease the risks associated with holding TuSimple securities. Stock options, restricted stock units, restricted stock, stock appreciation rights, and other securities issued pursuant to TuSimple's benefit plans or other compensatory arrangements with TuSimple are not subject to this prohibition. In addition, for the three years following the date of eight members. Our directors hold office until their successors have been elected and qualified or appointed, or the earlierclosing of their death, resignation, or removal.
Priorour initial public offering, individuals subject to the Voting Threshold Date, we will not have a classified board of directors, and all directors will be elected for annual terms.
At any time after the Voting Threshold Date, we will have a classified board of directors consisting of three classes of approximately equal size, each serving staggered three-year terms. Our directors will be assigned by the then-current board of directorsInsider Trading Policy may (i) pledge up to a class. Upon expiration of the term of a class of directors, directors for that class will be elected for three-year terms at the annual meeting of stockholders in the year in which that term expires. As a result, only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Each director’s term continues until the election and qualification of his or her successor, or his or her earlier death, resignation, or removal. So long as our board of directors is classified, only our board of directors may fill vacancies on our board. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third15% of the total number of directors. The classificationshares of our board may havecommon stock that such individuals beneficially own as collateral for loans and (ii) hold up to 15% of the effecttotal number of delaying or preventing changesshares of our common stock that such individuals own in margin accounts.
Corporate Responsibility and Diversity
We pride ourselves on the talent, passion, and dedication of our employees, who are united in our control or management.goal to revolutionize the global freight market.
Director Independence
Our Class A Common Stock is listed on the Nasdaq Global Select Market. Our board of directors has undertakenApart from culture and career development, we offer a review of the independence of each director. Based on information provided by each director concerning his or her background, employment,robust benefits package. This package includes vacation days, paid parental leave, 40l(k) matching contributions, performance bonuses, and affiliations, our board of directors has determined that all members of the board of directors, except Messrs. Chena premier health plan for employees and Hou are independent, as determined in accordance with the rules of the Nasdaq Global Select Market. In making such independence determination, our board of directors considered the relationships that each such non-employee director has with ustheir dependents. We also regularly survey and all other facts and circumstances that the board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. In considering the independence of the directors listed above, our board of directors considered the association of our directors with the holders of more than 5% of our capital stock. The composition and functioning of our board of directors and each of our committees complies with all applicable requirements of and the rules and regulations of the SEC. There are no family relationships among any of our directors or executive officers.
Board Oversight of Risk
One of the key functions of our board of directors is informed oversight of our risk management process. In particular, our board of directors is responsible for monitoring and assessing strategic risk exposure. Our executive officers are responsible for the day-to-day management of the material risks we face. Our board of directors administers its oversight function directly as a whole through various standing committees of our board of directors that address risks inherent in their respective areas of oversight. For example, our audit committee is responsible for overseeing the management of risks associatedhost roundtables with our financial reporting, accounting, auditing mattersemployees to better understand their needs and cybersecurity risks; our compensation committee oversees the management of risks associated with our compensation policies and programs; our nominating and corporate governance committee oversees the management of risks associated with director independence, conflicts of interest, composition and organization of our board of directors, and director succession planning; and our government security committee oversees the management of risks relating to security and compliance with the NSA.perspectives.
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Diversity
Diversity is one of our company core values and we believe in creating an inclusive Board. Our Board values having a board that reflects diverse perspectives, including those based on gender, ethnicity, skills, experience at policy-making levels in areas that are relevant to the Company's activities, and functional, geographic, or cultural backgrounds. The following Board Diversity Matrix presents our Board diversity statistics in accordance with Nasdaq Rule 5606, as self-disclosed by our directors. Our Board satisfies the minimum objectives of Nasdaq Rule 5605(f)(3) by having at least one director who identifies as female and at least one director who identifies as a member of an Underrepresented Minority (as defined by Nasdaq Rules). As we pursue future Board recruitment efforts, our Nominating and Corporate Governance Committee will continue to seek out candidates who can contribute to the diversity of views and perspectives of the Board.
Board Diversity Matrix (as of August 8, 2023)
Part I: Gender Identity
​​
Number of Directors
Female
​​
2
Male
​​
5
Non Binary
​​
0
Did Not Disclose Gender
​​
0
Part II: Demographic Background
​​
African American or Black
​​
0
Alaskan Native or Native American
​​
0
Asian
​​
5
Hispanic or Latinx
​​
0
Native Hawaiian or Pacific Islander
​​
0
White
​​
2
Two or More Races or Ethnicities
​​
0
Did Not Disclose Demographic Background
​​
0
Total Number of Directors
​​
7
OUR BOARD OF DIRECTORS
Board Leadership Structure
Pursuant toOur Board is responsible for monitoring and assessing strategic risk exposure. Our executive officers are responsible for the day-to-day management of the material risks we face. Our Board administers its oversight function directly as a whole through various standing committees of our Board that address risks inherent in their respective areas of oversight. For example, our Audit Committee is responsible for overseeing the management of risks associated with our financial reporting, accounting, auditing matters, and cybersecurity risks; our Compensation Committee oversees the management of risks associated with our compensation policies and programs; our Nominating and Corporate Governance Guidelines,committee oversees the management of risks associated with director independence, conflicts of interest, composition, and organization of our Board, and director succession planning; and our Government Security Committee oversees the management of risks related to security and compliance with the Company's National Security Agreement (the “NSA”).
Our Board oversees our business and monitors the performance of the Company’s management. The Board does not involve itself in day-to-day operations. The directors keep themselves informed by discussing matters with the Chief Executive Officer, other key executives, and our external advisors, such as legal counsel, outside auditors, investment bankers, and other consultants, by reviewing the reports and other materials provided by management and by participating in Board and committee meetings.
Our Board currently consists of seven members. Our directors hold office until their successors have been elected and qualified or appointed, or the earlier of their death, resignation, or removal.
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Meetings of the Board of Directors and Annual Meetings of Stockholders
The full board of directors may separate or combinemet fifteen times during the rolesyear ended December 31, 2022. No director attended fewer than 75% of the chairmantotal number of meetings of the Board or of any committees of the Board of which he or she was a member during the year ended December 31, 2022. The Company encourages its directors to attend the Annual Meeting of Stockholders. All of the directors then serving on the Board attended the Company’s 2022 annual meeting of stockholders.
Director Independence
Our Board has assessed the independence of each director, as defined in the listing standards of Nasdaq Listing Rules and applicable laws. Based on information provided by each director concerning his or her background, employment, and affiliations, our Board has determined that all members of our Board, except Messrs. Mo Chen and Cheng Lu, are independent. In making such independence determination, our Board considered the relationships that each such non-employee director has with us and all other facts and circumstances that the board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. In considering the independence of the directors listed above, our Board considered the association of our directors with the holders of more than 5% of our capital stock. The composition and functioning of our Board and each of our committees comply with all applicable requirements of and the rules and regulations of the SEC. There are no family relationships among any of our directors or executive officers.
As disclosed in our Current Report on Form 8-K, filed on November 16, 2022 with the SEC, we are a “controlled company” under the Nasdaq Listing Rules due to the fact that Mr. Chen beneficially owns more than 50% of the Company's voting power. As of October 2023, Mr. Chen beneficially owns approximately 58% of the voting power of the outstanding common stock. Under these Nasdaq Listing Rules, a company of which more than 50% of the voting power in the election of directors is held by an individual, group, or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements that (i) a majority of the board of directors consist of independent directors and chief executive officer when and if it deems it advisable and in our best interests and in the best interests of our stockholders to do so. These roles are currently combined and held by Mr. Hou.
In addition, pursuant to our Corporate Governance Guidelines, when the chairman of our board of directors is not an independent director,(ii) the board of directors will appoint a Lead Independent Director to facilitate communication between management, the independent directorshave compensation and the chairman of our board, as well as to participate in setting agendas for meetings and presiding at executive sessions of the board of directors. Since April 23, 2022, Brad Buss has served as our Lead Independent Director.
Our Corporate Governance Guidelines are posted on the Corporate Governance — Governance Documents portion of our website at http://ir.tusimple.com.
Board Committees
Our board of directors has established an audit committee, a compensation committee, a nominating and corporate governance committees composed entirely of independent directors.
These exemptions do not modify the independence requirements for our Audit Committee and we are compliant with Nasdaq Listing Rules, as well as SEC rules, for our Audit Committee and our Nominating and Corporate Governance Committee. Currently, our Compensation Committee is not composed entirely of independent directors, as permitted under the exemption stated above. We maintain the option to fully utilize these exemptions as a “controlled company.” In the event that we cease to be a “controlled company” and our shares continue to be listed on Nasdaq, we will be required to comply with these provisions within the applicable transition periods.
Stockholder Communications with the Board of Directors
Stockholders and other interested parties wishing to communicate with our Board or with an individual member of our Board may do so by writing to the Board or to a particular director by mail to our principal executive offices, Attention: Corporate Secretary. The envelope should indicate that it contains a stockholder communication.
Our Corporate Secretary will review each communication and will forward the communication, as expeditiously as reasonably practicable, to the addressees if: (1) the communication complies with the requirements of any applicable policy adopted by the Board relating to the subject matter of the communication; and (2) the communication falls within the scope of matters generally considered by the Board. To the extent the subject matter of a communication relates to matters that have been delegated by the Board to a committee or to an executive officer of the Company, then our Corporate Secretary may forward the communication to the executive officer or chair of the committee to which the matter has been delegated. The acceptance and forwarding of communications to the members of the Board or an executive officer does not imply or create any fiduciary duty of the Board members or executive officer to the person submitting the communications.
Information may be submitted confidentially and anonymously, although the Company may be obligated by law to disclose the information or identity of the person providing the information in connection with government or private legal actions and in other circumstances. The Company's policy is not to take any adverse action, and not to tolerate any retaliation, against any person for asking questions or making good faith reports of possible violations of law, our policies, or our Governance Documents.
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Board Committees
Our Board has established an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, and a government security committee.Government Security Committee (the “GSC”). Our board of directorsBoard may establish other committees to facilitate the management of our business. Our board of directors and its committees set schedules for meeting throughout the year and can also hold special meetings and act by written consent from time to time, as appropriate. Our board of directorsBoard has delegated various responsibilities and authority to its committees as generally described below. The committees will regularly report on their activities and actions to the full boardBoard of directors. Each member ofCharters for each regular committee of our board of directors, except for Mr. Hou who sits on our government security committee only, qualifies as an independent director in accordance with the listing standards of the Nasdaq Global Select Market. Each committee of our board of directors other than the government security committee has a written charter approved by our board of directors. Copies of each charter have beenBoard are posted on our websitewebsite.
The Audit Committee must have at www.tusimple.com underleast three directors; the Investor Relations section.Compensation Committee, the GSC, and the Nominating and Governance Committee must each have at least two directors. Members serve on these standing committees until their resignation or until otherwise determined by our board of directors.Board. The following table provides membership information foris a summary of our committee structure and members on each of such board committeeour standing committees as of April 29, 2022:October 2023:
NameBoard Member
​​
Audit
​​
Compensation
​​
Nominating and
Corporate
Governance
​​
Government
Security
Brad Buss
​​
X*Mo Chen (Chair)
​​
 
​​
X
​​
Karen C. Francis
​​
X
​​
X
​​
 
​​
 
Michelle Sterling
​​
​​
X*
​​
​​
X
Charles ChaoCheng Lu
​​
 
​​
 
​​
X*
​​
 
Xiaodi HouJames Lu
​​
X
​​
Chair
​​
Chair
​​
Wendy Hayes
​​
Chair
​​
​​
X
​​
X
Michael Mosier
​​
 
​​
 
​​
 
​​
X
Reed B. WernerJ. Tyler McGaughey
​​
​​
​​
​​
Chair and Security Director
Zhen Tao
​​
X
​​
 
​​
 
​​
X*
Bonnie Yi Zhang
​​
​​
X
​​
​​
 
*
Committee Chair.
Each of our board committees is described below.
Audit Committee
The members of our audit committee are Mr. Buss, Ms. Francis and Mr. Werner, each of whom can read and understand fundamental financial statements. Each of member of our audit committeeAudit Committee is independent under the rules and regulations of the SEC and the listing standards of the Nasdaq Global Select Market applicable to audit committee members. The current members of our Audit Committee are: Ms. Wendy Hayes, serving as the Audit Committee's chair, Mr. Buss is the chair of the audit committee.James Lu, and Ms. Zhen Tao. Our board of directorsBoard has determined that each member of our audit committeeMs. Hayes is qualified as an audit committee financial expert within the meaning of SEC regulations and meetmeets the financial sophistication requirements of the Nasdaq Global Select Market. Our audit committeeAudit Committee met fivefourteen times in 2021.2022.
Our audit committee assistsThe primary responsibilities of our board of directorsAudit Committee are: (i) assisting our Board with its oversight of the following: the integrity of our financial statements; our compliance withstatements, legal and regulatory requirements;compliance, and risk management, as they related to financial statements or accounting matters, and the qualifications, independence,implementation, adequacy, and
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performance of the independent registered public accounting firm; the design and implementation effectiveness of our internal audit function; and risk assessment and risk management. Among other things, our audit committee is responsible for(ii) reviewing and discussing with our management the adequacy and effectiveness of our disclosure controls and procedures. The audit committee also discussesprocedures; (iii) discussing with our management and independent registered public accounting firm the annual audit plan and scope of audit activities, scope, and timing of the annual audit of our financial statements, and the results of the audit, quarterly reviews of our financial statements, and, as appropriate, initiates inquiries into certain aspects of our financial affairs. Our audit committee is responsible foraffairs; (iv) establishing and overseeing procedures for the receipt, retention, and treatment of any complaints regarding accounting, internal accounting controls, or auditing matters, as well as for the confidential and anonymous submissions by our employees of concerns regarding questionable accounting or auditing matters. In addition, our audit committee has direct responsibility formatters; (v) managing the appointment, compensation, retention,performance, independence, and oversightscope, among others, of the work of our independent registered public accounting firm and for overseeing cybersecurity risks and compliance. Our audit committee hascompliance; (vi) sole authority to approvefor approving the hiring and discharging of our independent registered public accounting firm, all audit engagement terms and fees, and all permissible non-audit engagements with the independent auditor. Our audit committee reviewsauditor; and oversees(vii) reviewing and overseeing all related person transactions in accordance with our policies and procedures.
Compensation Committee
The membersOur Compensation Committee operates under a formal written charter and has the sole authority and responsibility to review and approve the compensation package of our compensation committee are Ms. Sterling, Ms. Francisnamed executive officers. Our Compensation Committee also considers the design and Ms. Zhang. Ms. Sterling is the chaireffectiveness of the compensation committee. Each member ofprogram for our other executives and approves the final compensation committee is independent under the rulespackage, employment agreements, and regulations of the SEC and the listing standards of the Nasdaq Global Select Market applicable to compensation committee members. Our compensation committee assistsincentive grants for our board of directors in discharging certain of our responsibilities with respect to compensating our executive officers, and the administration and review of our incentive plans for employees and other service providers, including our equity incentive plans, and certain other matters related to our compensation programs. Our compensation committee met five times in 2021.
Compensation Committee Processes and Procedures
Our compensation committee intends to meet at least three times each year and may otherwise meet at such times and places as the committee determines. The agenda for each meeting is usually developed by the chair of our compensation committee, in consultation with our chief executive officer. Our compensation committee intends to meet regularly in executive sessions. From time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the compensation committee to make presentations, provide financial or other background information or advice or otherwise participate in compensation committee meetings. In particular, our compensation committee consults with our chief executive officer pursuant to the charter of our compensation committee in connection with reviewing, recommending or determining our executive compensation policies. Nevertheless, our chief executive officer may not be present during our compensation committee’s executive sessions or during voting or deliberations of the compensation committee regarding such individual’s compensation. The charter of our compensation committee grants the committee full access to all of TuSimple’s books, records, facilities and personnel. In addition, our compensation committee has the authority, in its sole discretion, to retain or obtain the advice of compensation consultants, legal counsel, or other advisors of its choosing, and TuSimple must provide for appropriate funding, as determined by our compensation committee, for payment of reasonable fees to any such advisor retained by the committee. The compensation committee has direct responsibility for the appointment, compensation and oversight of the work of any such advisors engaged for the purpose of advising the committee. Under the charter of our compensation committee, the compensation committee may select, or receive advice from, a compensation consultant, legal counsel or other advisor to the compensation committee, other than in-house legal counsel and certain other types of advisors, only after taking into consideration six factors, prescribed by the SEC and the Nasdaq Global Stock Market, that bear upon the advisor’s independence; however, there is no requirement that any advisor be independent.executives.
During the year ended December 31, 2021,2022, our compensation committeeCompensation Committee engaged the services of Compensia,Frederic W. Cook & Co., Inc. (“Compensia”) and FW Cook (“Cook”), which are eacha national compensation consulting firms,firm, to advise our compensation committee regarding the amount and types of compensation provided to our executive officers and non-employee
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directors. Neither Compensia nor Cook provides any services to us other than the services provided to our compensation committee. Our compensation committeeCompensation Committee has assessed the independence of Compensia andFW Cook pursuant to SEC and Nasdaq Global Stock Market rules and concluded that no conflict of interest exists that would prevent Compensia orFW Cook from independently representing our compensation committee.
The current members of our Compensation Committee are: Mr. James Lu, serving as the Compensation Committee's chair, and Mr. Chen. Our Compensation Committee met eight times in 2022.
14
The primary responsibilities of our Compensation Committee are: (i) assisting our Board with matters relating to global compensation philosophy and policies, plans and benefit programs, and making related recommendations to the Board, including by considering “say-on-pay” votes of our stockholders, compensation of our executive officers, and administration and review of our incentive plans for employees and other service providers, including our equity incentive plans; (ii) assisting in the review of the Company’s compensation discussion and analysis (“CD&A”) required by Item 402(b) of Regulation S-K; and (iii) recommending to the Board whether to include such CD&A in the Company’s proxy statement and Annual Report on Form 10-K.

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Nominating and Corporate Governance Committee
The members of our nominatingNominating and corporate governance committeeCorporate Governance Committee are Mr. ChaoJames Lu, serving as the Nominating and Mr. Buss. Mr. Chao is theCorporate Governance Committee chair, and Ms. Hayes. The primary responsibilities of the nominatingour Nominating and corporate governance committee. Our nominating and corporate governance committee assistsCorporate Governance Committee are assisting our board of directorsBoard with its oversight of and identification ofon matters related to: identifying individuals qualified to become members of our board of directors,Board, consistent with criteria approved by our board of directors,Board, selecting and selects, or recommends that our board of directors selects,recommending director nominees develops and recommends to our board of directorsBoard, developing and recommending to our Board a set of corporate governance guidelines, and overseesoverseeing the evaluation of our board of directors.Board members. Our nominatingNominating and corporate governance committeeCorporate Governance Committee met two timesonce in 2021.2022.
Government Security Committee
In April 2022, our board of directors established a government security committee. Currently, Mr. Werner, our Security Director, Mr. Hou and Ms. Sterling are theThe members of the governmentour Government Security Committee are: Mr. McGaughey, serving as our Government Security Committee chair and security committee.director, Ms. Hayes, and Mr. WernerMosier. The primary responsibility of our Government Security Committee is the chair of the government security committee. Pursuant to the NSA, a security officer appointed by us and a representative from a third-party monitor, if appointed in the future by CFIUS, are non-voting, ex officio members of the government security committee. Our security committee assistsassist our board of directorsBoard by providing oversight of our implementation and adherence to the terms of the NSA, including protection of certain of our intellectual property.NSA. Our Government Security Committee met four times in 2022.
Director Nominations Process
Our board of directors will evaluateNominating and Corporate Governance Committee has adopted policies and procedures for director candidates that, together with our bylaws, describes in detail the process we use to fill vacancies and add new members to the Board.
Our Board evaluates the candidates for membership on our boardBoard of directors, including candidates nominated or recommended by stockholders, based on criteria established by our board of directorsBoard and as set forth in the Policiesour policies and Proceduresprocedures for Director Candidates of our board of directors. As part of this process, our board of directors, with oversight of our nominating and corporate governance committee, will oversee a periodic evaluation of the performance of our board of directors as a whole and of individual directors and of the qualifications and performance of directors eligible for reelection at the annual meeting of stockholders. Specifically, in its evaluation of director candidates, including directors eligible for reelection, our board of directorscandidates. Our Board seeks to achieve a balance of knowledge, experience, and capability on the board of directors and considers the following: the current size and composition of our board of directorsBoard and the needs of our board of directorsBoard and its respective committees; the diversity and related range of expertise and perspective of our board of directorsBoard in areas relevant to our business; such issues as character, judgment, diversity, age, independence, expertise, experience, length of service, other commitments and the like; and such other factors as the nominatingNominating and corporate governance committeeCorporate Governance Committee may consider appropriate.
While the nominating and corporate governance committee has not established specific minimum qualifications for director candidates, it believes that candidates and nominees should reflect a board of directors that is comprised of directors who (i) are predominantly independent, (ii) are of high integrity, (iii) have broad, business related knowledge and experience at the policy-making level in business, government, or technology, including their understanding of our industry and business in particular, (iv) have individual qualifications, relationships, and experience that would increase the overall effectiveness of our board of directors, (v) meet other requirements as may be required by applicable rules, such as financial literacy or financial expertise with respect to audit committee members, (vi) are committed to enhancing stockholder value, and (vii) have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. In evaluating the candidates, the nominatingNominating and corporate governance committeeCorporate Governance Committee does not assign any particular weighting or priority to various factors. With regard to candidates who are properly recommended by stockholders or by other means, the board of directors will review the qualifications of any such candidate, which review may, in the nominating and corporate governance committee’s discretion, include interviewing references for the candidate, performing background checks, direct interviews with the candidate, or other actions that such committee deems necessary or proper.
The nominating and corporate governance committee will apply these same principles when evaluating candidates to our board of directors who may be elected initially by the full board of directors to fill vacancies or add additional directors prior to the annual meeting of stockholders at which directors are elected. After completing its review and evaluation of director candidates, the nominatingNominating and corporate governance committeeCorporate Governance Committee selects, or recommends to the full board of directorsBoard for selection, the director nominees.
Candidates Recommended by Stockholders
It is the policy of our board of directorsBoard to consider stockholder recommendations for board candidates. Stockholder recommendations for candidates to our board of directorsBoard must be received by December 31st of the year
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in which the recommended candidates will be considered for nomination, must be directed in writing to TuSimple Holdings Inc. 9191 Towne Centre Drive, Suite 600,150, San Diego, CA 92122, Attention: Corporate Secretary, and must include the candidate’scandidate's name, home, and business contact information, detailed biographical data and qualifications, information regarding any relationships between the candidate and TuSimple within the last three years, and evidence of the
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recommending person’sperson's ownership of TuSimple stock. Such recommendations must also include a statement from the recommending stockholder in support of the candidate, particularly within the context of the criteria for membership on our board of directors,Board, including issues of character, judgment, diversity, age, independence, expertise, experience, length of service, other commitments and the like, personal references, and an indication of the candidate’scandidate's willingness to serve. The nominatingNominating and corporate governance committeeCorporate Governance Committee may request additional information regarding recommended candidates.
Stockholder nominations to the board of directors must meet the requirements set forth in our bylaws. Under these requirements, nominations for election to our board of directors may be made at a meeting of stockholders by any stockholder entitled to vote in the election of directors who provides timely written notice to our Secretary. This notice must contain specified information concerning the nominee and concerning the stockholder proposing the nomination. In order to be timely, a stockholder’s notice must be delivered to or mailed and received by our Secretary at our principal executive offices within the time period specified in our bylaws.
Corporate Responsibility and Diversity

Employee Well-Being
We pride ourselves on the talent, passion, and dedication of our employees, who are united in our goal to revolutionize the global freight market.
We have built a values-based culture that emphasizes values such as striving for excellence, transparency, and support for each other. Our employees have access to development opportunities, a wide range of training, different career paths, and, most importantly, challenging and purposeful work. Our culture is also built on diversity, inclusion, camaraderie, and celebration. We organize regular cultural events, teambuilding activities and public recognition forums to strengthen our diversity and invest in strong relationships.
Apart from culture and career development, we offer a robust benefits package. This package includes vacation days, paid parental leave, 401(k), performance bonuses, and a premier health plan for employees and their dependents. We also regularly survey and host roundtables with our employees to better understand their needs and perspectives, and, as a result of these discussions, we have added benefits including conference funds, fitness stipends, teambuilding budgets, and pet insurance.
Diversity
Diversity is one of our company core values, and we believe in creating an inclusive and equitable environment that represents a broad spectrum of backgrounds and cultures.
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Our Board of Directors values having a Board that reflects diverse perspectives, including those based on gender, ethnicity, skills, experience at policy-making levels in areas that are relevant to the Company’s activities, and functional, geographic, or cultural backgrounds. The following Board Diversity Matrix presents our Board diversity statistics in accordance with Nasdaq Rule 5606, as self-disclosed by our directors. Our Board satisfies the minimum objectives of Nasdaq Rule 5605(f)(3) by having at least one director who identifies as female and at least one director who identifies as a member of an Underrepresented Minority (as defined by Nasdaq Rules). As we pursue future Board recruitment efforts, our Nominating and Corporate Governance Committee will continue to seek out candidates who can contribute to the diversity of views and perspectives of the Board.
Board Diversity Matrix (as of April 29, 2022)
Total Number of Directors
​​
8
 
​​
Female
​​
Male
​​
Non-
Binary
​​
Did Not
Disclose
Gender
Part I: Gender Identity
Directors
​​
3
​​
5
​​
—
​​
—
Part II: Demographic Background
African American or Black
​​
—
​​
—
​​
—
​​
—
Alaskan Native or Native American
​​
—
​​
—
​​
—
​​
—
Asian
​​
1
​​
3
​​
—
​​
—
Hispanic or Latinx
​​
—
​​
—
​​
—
​​
—
Native Hawaiian or Pacific Islander
​​
—
​​
—
​​
—
​​
—
White
​​
2
​​
1
​​
—
​​
—
Two or More Races or Ethnicities
​​
—
​​
—
​​
—
​​
—
LGBTQ+
​​
—
​​
—
​​
—
​​
—
Did Not Disclose Demographic Background
​​
—
​​
1
​​
—
​​
—
Compensation Committee Interlocks and Insider Participation
None of our executive officers serves, or served in prior years, as a member of the board of directors or compensation committee of any other entity that has or has had one or more executive officers serving as a member of our board of directors or our compensation committee.
Transactions in the Company’s Securities
Our board of directors has adopted an Insider Trading Policy, which applies to all of our directors, officers, employees and agents (such as consultants and independent contractors), as well as certain family members, economic dependents, and any other individuals or entities whose transactions in securities such individual influences, directs or controls. Under this policy, such individuals are prohibited from transacting in publicly-traded options, such as puts and calls, and other derivative securities with respect to TuSimple’s securities, and such prohibition extends to any hedging or similar transaction designed to decrease the risks associated with holding TuSimple securities. Stock options, restricted stock units, restricted stock, stock appreciation rights and other securities issued pursuant to TuSimple’s benefit plans or other compensatory arrangements with TuSimple are not subject to this prohibition. In addition, for the three years following the date of the closing of our initial public offering, individuals subject to the Insider Trading Policy may (i) pledge up to 15% of the total number of shares of our common stock that such individuals beneficially own as collateral for loans and (ii) hold up to 15% of the total number of shares of our common stock that such individuals own in margin accounts.
Meetings of the Board of Directors
The full board of directors met 8 times during the year ended December 31, 2021. No director attended fewer than 75% of the total number of meetings of the board or of any committees of the board of which he or she was a member during the year ended December 31, 2021.
It is our policy that directors are invited and encouraged to attend our annual meetings of stockholders.
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Director CompensationDIRECTOR COMPENSATION
The following table sets forth information about the compensation of each person who served as a director during the 2021 fiscal year, other than a director who also served as a named executive officer.
Name
​​
Fees Earned or
Paid in
Cash
($)
​​
Stock
Awards
($)(1)(2)
​​
Option
Awards
($)(1)(3)
​​
Total
($)
Brad Buss
​​
80,000
​​
699,656
​​
643,965
​​
1,423,621
Charles Chao
​​
—
​​
—
​​
—
​​
—
Karen C. Francis
​​
80,000
​​
1,343,621
​​
—
​​
1,423,621
Michelle Sterling
​​
14,076
​​
230,134
​​
—
​​
244,210
Bonnie Yi Zhang
​​
75,000
​​
608,564
​​
—
​​
683,564
Mo Chen
​​
—
​​
—
​​
—
​​
—
(1)
The amounts in this column represent the aggregate grant date fair value of stock awards or option awards granted to the non-employee director in the applicable fiscal year computed in accordance with FASB ASC Topic 718. See Note 9 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of the assumptions made by TuSimple in determining the grant-date fair value of TuSimple’s equity awards. Subject to the director’s continuing service, the service-based requirement for the restricted stock units will be satisfied in full over a one-year period. Upon a transaction constituting a “Change in Control” as defined in the 2021 Plan, the service-based requirement applicable to outstanding equity awards granted pursuant hereto shall be deemed satisfied in full upon the effective date of such transaction.
(2)
In the case of Michelle Sterling, the aggregate grant date fair value of stock awards includes an RSU award that was granted during 2021 upon her becoming a consultant. However, all of such unvested RSUs were canceled and replaced with a new RSU award once Ms. Sterling was appointed as a non-employee director in 2021. As of December 31, 2021, certain of our non-employee directors held outstanding RSUs under which the following number of shares of our Class A Common Stock are issuable: Mr. Buss – 7,767; Ms. Francis – 7,767; Ms. Sterling – 3,708; and Ms. Zhang – 8,626.
(3)
As of December 31, 2021, Mr. Buss, held outstanding an option to purchase 60,000 shares of our Class A Common Stock. Ms. Francis exercised all 60,000 of her options to purchase shares of our Class A Common Stock and did not hold any outstanding options as of December 31, 2021.
Prior to the completion of our initial public offering in April 2021, we did not have a formal non-employee director compensation program, and our non-employee directors did not receive cash, equity, or other compensation for their service on our board of directors. Messrs. Hou and Lu, who served as executive officers during fiscal year 2021, and Mr. Chen, who served as an executive officer during fiscal year 2020, did not and do not receive any additional compensation for their service as a member of our board of directors.
Following the completion of our initial public offering in 2021, our board of directors adopted a compensation policy for its non-employee directors, which was amended in April 2022 in connection with the establishment of our government security committee and is described below (as amended, the “Non-Employee Director Compensation Policy”).
Cash Compensation
The Non-Employee Director Compensation Policy provides for annual cash retainers for all non-employee directors in connection with their service on our board of directorsBoard and committees. Each non-employee director is paid an annual cash retainer for $50,000 per year for general service on our board of directorsBoard as well as the following additional annual cash retainers for their board committee service:
 
​​
Chair
​​
Member
Audit Committee
​​
$25,000
​​
$15,000
Compensation Committee
​​
$20,000
​​
$10,000
Government Security Committee
​​
$32,500
​​
$22,500
Nominating and Corporate Governance Committee
​​
$10,000
​​
$5,000
The Lead Independent Director is paid an additional annual cash retainer of $20,000.
Committee
​​
Chair
​​
Member
Audit Committee
​​
$25,000
​​
$15,000
Compensation Committee
​​
$20,000
​​
$10,000
Nominating and Corporate Governance Committee
​​
$10,000
​​
$5,000
Government Security Committee
​​
$32,500
​​
$22,500
In lieu of the Equity Award described below and in accordance with the NSA and the Non-Employee Director Compensation Policy, Mr. Werner,the directors who servesserve as the Security Director under the NSA and the chair of the government security committee,GSC will receive a cash payment equal to $250,000, pro-rated to reflect the number of days that the Security Director will serve on our board of directorsBoard until our June 9, 2022next annual shareholderstockholder meeting.
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Annual cash retainers are paid quarterly in arrears. We reimburse reasonable expenses incurred by our non-employee directors in connection with attendance at boardBoard or committeeCommittee meetings.
Equity Compensation
The compensation committeeCompensation Committee will approve a grant to each non-employee director an annual award of restricted stock units valued at $250,000 (the “Equity Award”). The Equity Award will be granted on or as soon as reasonably practicable after the date of the non-employee director’s appointment or election, and thereafter on or as soon as reasonably practicable after the date of each of our annual stockholder meetings provided that such director continues to serve on our board of directorsBoard after such meeting. Subject to the non-employee director’s continuous service, the Equity Award will vest in full over a one-year period and will vest on the earlier of the first day of the month that follows the one-year anniversary of such date of grant or on the date of the next regular annual meeting of the Company’s stockholders held following such date of grant, grant; provided that the non-employee director remains in continuous service through such vesting date. In addition, an Equity Award granted between annual stockholder meetings to a newly-appointed director will be pro-rated to reflect the portion of the year that the director will serve on our board of directors.Board. The Equity Award will vest in full if we are subject to a change in control prior to the termination of the non-employee directors’ continuous service.
Our non-employee directors, except our security director, are subject to minimum stock ownership guidelines set at five times the regular annual cash retainer. Ownership levels are expected to be achieved within five years of the guidelineour guidelines being applicable.
Stockholder Communications with The Commission on Foreign Investment in the Board of Directors
Stockholders wishing to communicate with the board of directors or with an individual memberUnited States (the “CFIUS”) has determined that our security director cannot be compensated in equity of the board of directors may do so by writing to the board or to the particularCompany. For this reason, our security director care of the Secretary by mailis not subject to our principal executive offices, Attention: Corporate Secretary. The envelope should indicate that it contains a stockholder communication. All such stockholder communications will be forwarded to the director or directors to whom the communications are addressed.
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EXECUTIVE OFFICERS
The following table provides information concerning our executive officers as of April 29, 2022:
Name
​​
Age
​​
Position(s)
Xiaodi Hou
​​
37
​​
Co-Founder, President, Chief Executive Officer, Chief Technology Officer and Chairman of the Board
Patrick Dillon
​​
40
​​
Chief Financial Officer
James Mullen
​​
53
​​
Chief Administrative and Legal Officer
Eric Tapia
​​
45
​​
Vice President, Global Controller
Xiaodi Hou, See biographical information set forth above under “Proposal One — Election of Directors — Information Regarding the Nominees.”
Patrick Dillon has served as our Chief Financial Officer since December 2020. Mr. Dillon has more than 13 years of experience working in finance, investment banking and public accounting. Prior to joining us, from August 2011 to December 2020, Mr. Dillon was a member of the investment banking division of Morgan Stanley, co-leading its coverage of vehicle technology companies. During his tenure at Morgan Stanley working in both the New York and Chicago offices, Mr. Dillon advised clients on capital raising, mergers and acquisitions and other strategic transactions. Prior to his work at Morgan Stanley, Mr. Dillon was a member of Deloitte’s tax consulting practice in Chicago from 2005 to 2009. Mr. Dillon holds a Bachelor of Business Administration and M.S. in accountancy from the University of Notre Dame Mendoza College of Business and an M.B.A. from the University of Chicago Booth School of Business.
James Mullen has served as our Chief Administrative and Legal Officer since September 2020. Mr. Mullen has more than 15 years of executive leadership experience in the trucking industry. Mr. Mullen is also a member of the Board of Directors for the American Trucking Associations, the largest and most comprehensive national trade association for the trucking industry. Prior to joining us, from October 2019 to September 2020, Mr. Mullen was the acting administrator of the Federal Motor Carrier Safety Administration (“FMCSA”) where he was responsible for regulating over 500,000 motor carriers and over 3.5 million commercial drivers and was responsible for the agency’s $700 million budget and 53 field offices. From June 2018 to October 2019, Mr. Mullen was the chief counsel of the FMCSA rendering legal services and policy direction for the FMCSA. From December 2016 to June 2018, Mr. Mullen was a professional consultant providing services and advice to large motor carriers and trade associations. From June 2006 to December 2016, Mr. Mullen was an executive at Werner Enterprises, Inc., a publicly-traded transportation and logistics company, serving as Executive Vice President and General Counsel from May 2010 to December 2016 and as Vice President and General Counsel of Litigation from June 2006 to May 2010. From 1993 to 2006, Mr. Mullen was in the private practice of law. Mr. Mullen holds a J.D. from the University of Nebraska College of Law and a B.A. in economics from the University of Nebraska.
Eric Tapia has served as our Vice President, Global Controller since May 2021. Mr. Tapia brings more than 20 years of experience working in finance, controllership, audit, and interacting with public companies’ Boards and Audit Committees. Before TuSimple, Mr. Tapia was the VP Controller and Section 16 officer of W.W. Grainger, Inc., a $12 billion Fortune 200 company (NYSE: GWW) and supplier and distributor of maintenance, repair, and operating products. In this role, Mr. Tapia led large multi-country teams and was responsible for Grainger’s global controllership and tax operations, financial reporting (internal/managerial, SEC reporting, external audits), financial operations, and internal controls. Previously, Mr. Tapia served as GWW’s Vice President, Internal Audit, and before joining Grainger in 2010, Mr. Tapia was an audit partner with Big-4 firm KPMG. Mr. Tapia is a Certified Public Accountant and holds an accounting degree from the University of Puerto Rico and an M.B.A. from Duke University’s Fuqua School of Business.minimum stock ownership guidelines.
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EXECUTIVE COMPENSATION
2021 Summary Compensation TableCOMPENSATION DISCUSSION AND ANALYSIS
The following table showspurpose of this compensation discussion and analysis (the “CD&A”) is to provide information regardingabout the material elements of compensation ofthat is paid or awarded to, or earned by, our named executive officers (the “NEOs”).
Named Executive Officers
Our NEOs for services performed during the years ended Decemberlast completed fiscal year were as follows:
Cheng Lu, our Chief Executive Officer (“CEO”);
Eric Tapia, our Chief Financial Officer (“CFO”);
Xiaodi Hou, our former CEO and Chief Technology Officer;
Ersin Yumer, our former interim CEO and President;
Patrick Dillon, our former CFO; and
James Mullen, our former Chief Administrative and Legal Officer (“CALO”).
On March 3, 2022, the Company announced the resignation of Cheng Lu as President, CEO, and as a member of the Company's Board of Directors, each effective as of March 3, 2022. After that date, Cheng Lu served as a consultant to the Company until November 10, 2022, when the Board re-appointed Cheng Lu as the Company's CEO. On June 15, 2022, Mr. Dillon notified the Company of his decision to resign his employment as the CFO of the Company, effective July 7, 2022. On August 31, 20202022, Mr. Mullen notified the Company of his intent to resign from his employment as the CALO of the Company, effective September 30, 2022. On October 30, 2022, Mr. Hou was terminated from his employment as the CEO and DecemberChief Technology Officer of the Company by our Board. Following his termination of employment, Mr. Hou remained as a Board member until March 9, 2023. Mr. Yumer served as EVP, Operations until he was appointed as interim CEO and President on October 31, 2021.2022. On November 10, 2022, the Company’s Board removed Mr. Yumer as interim CEO and President of the Company. On November 15, 2022, Mr. Yumer notified the Company of his decision to resign his employment with the Company, effective November 25, 2022.
Name and Principal Position
​​
Year
​​
Salary
($)1
​​
Bonus
($)
​​
Stock
Awards
($)2
​​
Option
Awards
($)
​​
Non-Equity
Incentive Plan
Compensation
($)3
​​
All Other
Compensation
($)
​​
Total
($)
Xiaodi Hou4
Chief Executive Officer, Chief Technology Officer and Chairman of the Board
​​
2021
​​
325,000
​​
—
​​
14,110,000
​​
9,160,467
​​
187,000
​​
551,4245
​​
24,333,891
​
2020
​​
280,000
​​
6206
​​
—
​​
—
​​
45,000
​​
73,9687
​​
399,588
Cheng Lu8
Former President and Chief Executive Officer
​​
2021
​​
450,000
​​
—
​​
—
​​
65,998,500
​​
305,000
​​
15,2379
​​
66,768,737
​
2020
​​
387,500
​​
—
​​
8,241,413
​​
7,785,78310
​​
60,000
​​
1,076,25911
​​
17,550,955
Patrick Dillon
Chief Financial Officer
​​
2021
​​
350,000
​​
150,00012
​​
705,500
​​
458,023
​​
200,000
​​
34,04613
​​
1,897,569
​
2020
​​
9,42314
​​
50,00015
​​
494,485
​​
1,528,703
​​
—
​​
—
​​
2,082,611
James Mullen
Chief Administrative and Legal Officer
​​
2021
​​
350,000
​​
—
​​
8,818,750
​​
—
​​
179,000
​​
16,05316
​​
9,363,803
​
2020
​​
75,00017
​​
35,00018
​​
329,657
​​
1,020,045
​​
20,000
​​
—
​​
1,479,702
Compensation Philosophy and Objectives
Our compensation and benefits programs are designed to attract and retain talented, qualified executives to manage and lead the Company, to motivate them to pursue corporate objectives, to align the interests of our executives with those of our stockholders and to maximize the long-term growth of the Company. We believe that our compensation program allows us to meet the following objectives:
Compensate NEOs comparing to market standards. We believe that competitive pay, together with our significant growth opportunities and employee-centered corporate culture, allow us to attract and retain top-quality executives. To ensure the competitiveness of our compensation levels within the comparable markets for executive talent, we conduct periodic independent consulting studies to evaluate our executive compensation program in comparison to pertinent market data and specified peer companies.
1.
Provide compensation that is fair to the NEOs and the Company. We believe that it is important for NEOs to be fairly compensated, at levels reflective of their talents and experience, and the scope of their job responsibilities. We also believe that it is important that each NEO perceives that their compensation is fair and equitable relative to their peers and others in the organization. This perceived equity promotes executive retention and satisfaction and is consistent with our beliefs and values.
Create a high-performance culture. We believe that NEOs should strive to achieve and exceed performance expectations and drive the growth and success of the business. We also believe that superior performance warrants superior rewards. Our merit-based salary increases and the CEO's performance-based equity awards are designed to promote this high-performance culture and motivate our executives to achieve at their highest potential.
The amounts in this column represent the total base salaries earned in fiscal years 2020 and 2021.
2.
Represents the aggregate grant date fair value of equity compensation awards granted to the named executive officer, computed in accordance with FASB ASC Topic 718. See Note 9 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of the assumptions made by us in determining the grant date fair value of our equity awards.
3.
Represents cash annual bonus amounts earned by our named executive officers.
4.
Mr. Hou has served as our Chief Technology Officer and a member of our board of directors since our inception in 2015. Mr. Hou was appointed, and now serves as our President, Chief Executive Officer and Chairman of the Board as of March 3, 2022.
5.
Represents (1) $16,053 paid for life insurance premiums paid by us on behalf of Mr. Hou; and (2) $535,371 paid for legal, trust, and tax-planning related service fees paid by us on behalf of Mr. Hou.
6.
Amount reflects a patent bonus paid to Mr. Hou.
7.
Represents: (1) $36,606 paid by us on behalf of Mr. Hou for outside legal advisory services; (2) $11,010 paid by us on behalf of Mr. Hou for certain estate planning services; (3) $8,500 paid by us on behalf of Mr. Hou for outside tax planning-related services; and (4) $17,852 for life insurance premiums paid by us on behalf of Mr. Hou.
8.
Mr. Lu became our President in January 2019 and Chief Executive Officer in September 2020. He resigned as President and Chief Executive Officer, effective as of March 3, 2022, and continues to provide services to us in a consulting role.
9.
Represents insurance premiums paid by the Company.
10.
The amount reflected in this column comprises $6,718,182 for the fair value of the grant of options to purchase 2,125,000 shares of Class A Common Stock with an exercise price of $0.46 per share to Mr. Lu on March 4, 2020 and $1,067,681 as incremental additional value resulting from modification of this option when the Company forgave the principal amount and accrued interest on a partial-recourse promissory note Mr. Lu issued to the Company in connection with exercising the options. The loan forgiveness was effective in December 2020.
11.
Represents (1) $15,312 for life insurance premiums paid by us on behalf of Mr. Lu, (2) $988,947 of income related to Company’s forgiveness in December 2020 of principal and accrued interest with respect to a partial-recourse promissory note issued by Mr. Lu to the Company in connection with his exercise of an option to purchase 2,125,000 shares of Class A Common Stock in March 2020, and (3) $72,000 of travel and relocation benefits.
12.
Represents a $150,000 one-time cash bonus, contingent upon our successful completion of our initial public offering on or before the end of the 2021 calendar year.
13.
Represents (1) $19,046 in life insurance premiums paid by us on behalf of Mr. Dillon, and (2) $15,000 paid to Mr. Dillon for relocation expenses.
14.
Mr. Dillon’s employment with us commenced in December 2020, and his annual base salary was initially set at $350,000.
15.
Represents a one-time sign-on bonus paid to Mr. Dillon at the time of his hire.
16.
Represents life insurance premiums paid by us on behalf of Mr. Mullen.
17.
Mr. Mullen’s employment with us commenced in September 2020, and his annual base salary was initially set at $325,000.
18.
Represents a one-time sign-on bonus paid to Mr. Mullen at the time of his hire.
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Narrative ExplanationDetermination of Executive Compensation
The targeted compensation range and amount of each element of our compensation program is determined by our Compensation Committee at the time of initial hire, promotion, or employment agreement renewal, taking into consideration our results of operations, long- and short-term goals, the competitive market for the NEOs, and general economic factors. We then review compensation on an annual basis as described below. We seek to combine the components of our executive compensation program to achieve a total compensation level appropriate for our size and corporate performance. We then determine the amount of each element of compensation based on our compensation objectives.
Role of Compensation ArrangementsCommittee
The Compensation Committee is responsible for establishing and overseeing our executive compensation programs and we expect that the Compensation Committee will annually review and determine the compensation to be provided to our NEOs, including with Our Namedrespect to our CEO.
Consistent with our compensation philosophy, in setting executive compensation, the Compensation Committee will consider a number of factors, including the recommendations of our CEO (other than with respect to the CEO’s own compensation) and our human resources team, current and past total compensation, competitive market data and analysis provided by the Compensation Committee’s independent compensation consultant, Company performance and each executive’s impact on performance, each executive’s relative scope of responsibility and potential, each executive’s individual performance and demonstrated leadership, and internal equity pay considerations.
Role of Compensation Consultant
The Compensation Committee has the authority to retain a compensation consultant or obtain advice from external legal, accounting, or other advisors to assist in the evaluation of executive compensation. The Compensation Committee retained FW Cook as its outside compensation consultant from 2021 until present. During 2022, FW Cook provided updated peer group comparative data (as discussed below) and assisted the Compensation Committee with setting the Company’s discretionary performance-based cash and equity compensation plans.
The Compensation Committee reviewed the independence of FW Cook as required by SEC rules and Nasdaq rules regarding compensation consultants and has concluded that the work of FW Cook for the Compensation Committee does not raise any conflict of interest. All work performed by the compensation consultant is subject to review and approval of the Compensation Committee.
Role of the Executive Officers
During 2022, Cheng Lu and Mr. Hou, while serving as CEO, participated in the meetings of the Compensation Committee at which compensation actions involving our NEOs (other than Cheng Lu or Mr. Hou) were discussed. Cheng Lu and Mr. Hou assisted the Compensation Committee by making recommendations and answering questions by the Compensation Committee regarding executive performance and objectives relating to the NEOs other than themselves.
The Compensation Committee considers the guidance and recommendations of its advisors and the executive officers, but is solely responsible for making the final decisions on compensation for the NEOs.
2022 Peer Group and Competitive Pay
To ensure that our executive compensation program is competitive, the Compensation Committee has, in prior years, reviewed an analysis of executive compensation at peer group companies assembled by FW Cook. The Compensation Committee uses data from the peer group as a point of reference for compensation, but not as the determinative factor. The purpose of the comparison data is not to supplant the analysis of internal pay equity, wealth accumulation, and the individual performance of the executive officers that the Compensation Committee considers when making compensation decisions. The Compensation Committee has full discretion in determining the nature and extent of the use of comparative compensation data, including to elect not to use the data at all.
The peer group used for 2022 pay decisions for Messrs. Dillon and Mullen, our former CFO and former CALO, respectively, was developed in October 2021 (“Early 2022 Peers”). The Early 2022 Peers consisted of high
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technology companies with market capitalization between $4.1 and $17.3 billion, which was approximately 0.5x-to-2.1x our market capitalization at the time of the analysis. Our market capitalization was at the 45th percentile at the time the Early 2022 Peers were chosen. The Early 2022 Peers consisted of the following companies:
​
Alteryx
​​
Coupa Software
​​
Manhattan Associates
​
​
Anaplan
​​
Dynatrace
​​
Medallia
​
​
Appian
​​
Elastic N.V.
​​
MongoDB
​
​
Aspen Technology
​​
Fastly
​​
Nuance Communications
​
​
Avalara
​​
Five9
​​
PTC
​
​
Bill.com
​​
Lyft
​​
Virgin Galactic
​
In March 2021, weAugust 2022, the Compensation Committee, with assistance of FW Cook, conducted its annual review of our peer group and made revisions to recognize TuSimple’s then-current market capitalization (“2022 Peer Group”). The 2022 Peer Group targeted high technology companies with market capitalization between $700 million and $6 billion (approximately 1/3x-to-3x our market capitalization at the time of the analysis) and that had annual revenue less than approximately $500 million. Our market capitalization was at the 53rd percentile at the time the 2022 Peer Group was chosen.
The revised 2022 Peer Group consisted of the following companies:
​
A10 Networks
​​
E2open Parent
​​
PROS Holding
​
​
BTRS
​​
InterDigital
​​
PubMatic
​
​
C3.ai
​​
Model N
​​
Sumo Logic
​
​
Cardlytics
​​
Momentive Global
​​
Telos
​
​
Cerence
​​
PagerDuty
​​
Vertex
​
​
Domo
​​
Ping Identity
​​
Zuora
​
Compensation Structure
Overview
The primary elements of our NEO’s compensation and the main objectives of each are:
Base Salary. Base salary attracts and retains talented executives in a competitive market, recognizes individual roles and level of responsibilities, and provides stable income;
Annual Bonus. Annual discretionary bonuses promote and reinforce short-term performance objectives and reward executives for their contributions toward achieving individual and Company objectives;
Equity Based Long-Term Incentive Compensation. Equity compensation, provided in the form of restricted stock units (“RSUs”), aligns executives’ interests with our stockholders’ interests, emphasizes long-term financial and operational performance, and helps retain executive talent; and
Miscellaneous Compensation. Our NEOs are eligible to participate in our health and welfare programs and our 401(k) match contribution plan. We have also entered into confirmatory employment agreements with eachcertain of Messrs. Hou, Lu, Dillon,our NEOs, which include severance benefits and Mullen, each of which supersedes their initial offer letters. Our employment agreements set forth each such namedmaintain a change in control and severance plan. Such arrangements aid in attracting and retaining executive officer’s annual base salarytalent and where applicable, target bonus opportunity. In the case of Mr. Dillon, the employment agreement provides for payment ofhelp executives to remain focused and dedicated during potential transition periods due to a cash bonus upon our initial public offering. We have also granted equity awards to our named executive officers during their employment (see also below under “— Outstanding Equity Awards at 2021 Year-End”).change in control.
Cash Compensation
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Base Salary
The annual base salary of each named executive officer, and such officer’s incentive bonus opportunity, areNEO is expected to be reviewed from time to time and may be adjusted by our board of directors or compensation committeeCompensation Committee based on a variety of quantitative and qualitative factors, including each executive’s job responsibilities, experience, performance, and competitive market levels, as well as the recommendations of our Chief Executive OfficerCEO (except with respect to his own salary). No named executive officerNEO is entitled to any automatic base salary increases as part of their employment arrangements.
In 2021, Mr. Hou was provided a market adjustment to his salary, which increased from $300,000 to $350,000. There were no other changes to the named executive officers’setting 2022 base salaries, the Compensation Committee took into account the changes in 2021. leadership and promotions made throughout the year. Our NEOs’ base salary for 2022 and as compared to 2021 is reflected in the table below:
Name
​​
2022 Base Salary
($)
​​
2021 Base Salary
($)
​​
Special Considerations
Cheng Lu(1)
​​
450,000
​​
450,000
​​
—
Xiaodi Hou
​​
500,000(2)
​​
350,000
​​
Promoted to CEO
Eric Tapia
​​
360,000(3)
​​
265,000(4)
​​
Promoted to CFO
Ersin Yumer
​​
426,000
​​
426,000(5)
​​
Served as Interim CEO
Patrick Dillon
​​
450,000(6)
​​
350,000
​​
—
James Mullen
​​
450,000(6)
​​
350,000
​​
—
1.
Cheng Lu's salary remained the same when he was rehired in December 2022.
2.
In March 2022, Mr. Hou began serving as the Company's CEO in addition to his role as the Company's Chief Technology Officer.
3.
This corresponds to Mr. Tapia’s base salary in effect as of 2022 fiscal year end for Mr. Tapia's position as the Company's CFO. Mr. Tapia served in multiple positions in 2022, with different base salaries. From January 1, 2022 to July 6, 2022, Mr. Tapia served as the Vice President, Global Controller of the Company, with an annual base salary in the amount of $325,000. From July 7, 2022 to November 30, 2022, Mr. Tapia served as the interim CFO of the Company, with an annual base salary in the amount of $360,000. From December 1, 2022 to December 31, 2022, Mr. Tapia served as the Company's CFO, with the same annual base salary as when he served as the Company's interim CFO.
4.
This reflects the base salary for Mr. Tapia’s role as Vice President, Global Controller of the Company.
5.
This figure represents Mr. Yumer's base salary in effect in 2021 and 2022, which reflects his role as the Company’s Executive Vice President for Operations.
6.
This amount represents Mr. Dillon and Mr. Mullen's new salary rates which were effective in April 2022. This salary increase took into consideration the need to stabilize and retain the executive team following the leadership transition.
Annual Incentive Compensation
Each of our namedNEOs is eligible for an annual incentive bonus. The purpose of this annual bonus is to align our executives’ short-term compensation opportunity with the Company’s business objectives and performance expectations. The annual bonus opportunity helps further our compensation objective of aligning a portion of executive pay with achievement of the Company’s short-term goals, which are designed to help the Company achieve its long-term strategic goals and create long-term value for our stockholders. In the beginning of 2022, our Compensation Committee recommended the Board to approve an executive bonus plan for 2022 that would fund based on the achievement of annual corporate performance goals with actual payouts determined based on an assessment of individual performance at year end. However, due to the changes in the composition of our Board and of our executive officers, in January 2023, the Compensation Committee determined, after careful consideration, including by reviewing materials prepared by the Company’s independent compensation consultants, that the terms of the proposed 2022 bonuses for some of the Company's current executive officers were just, equitable, and fair as to the Company and that it was also eligiblein the best interests of the Company and the stockholders of the Company to receive aapprove the 2022 bonuses.
In 2022, the Compensation Committee adjusted target cash bonus opportunities to better align with our peer group:
Name
​​
2022 Target Payout
(as a % of Salary)
​​
2021 Target Payout
(as a % of Salary)
Cheng Lu
​​
100%(1)
​​
75%
Xiaodi Hou
​​
75%
​​
50%
Eric Tapia
​​
29%
​​
20%
Ersin Yumer
​​
45%
​​
35%
Patrick Dillon
​​
75%
​​
60%
James Mullen
​​
75%
​​
60%
1.
As discussed below, Cheng Lu's 2022 bonus was guaranteed under his Letter Agreement dated December 2022.
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For actual incentive awardbonuses paid out in 2021, withfiscal year 2022, please see the “Bonus” column in the “Summary Compensation Table” below, which were determined in the Compensation Committee’s discretion.
In the beginning of 2022, our Compensation Committee recommended that the Board approve an executive bonus payouts earnedplan for 2022 that would fund based on overallthe achievement of annual corporate performance goals with actual payouts determined based on an assessment of individual performance at year end. Under the 2022 bonus plan, a pool would be funded between 0% and 150% of target based on the Compensation Committee’s assessment of the following corporate goals: (1) technology goals, including continued scaling of our 2021 strategicdriver-out scope and more expanded operational design domain, and (2) commercial operational goals, including the expansion of the Company’s autonomous freight network. The Compensation Committee would have the discretion to adjust the bonus pool for qualitative factors such as well as each individual’s performance. The table below showsdegree of success, timing of achievement, and developments and achievements not contemplated at the 2021 base salarytime the performance goals were established.
In February 2023, the Compensation Committee at that time determined that, due to the changes in the composition of our Board and target annualCompensation Committee, and of our executive officers, there was insufficient information to score bonuses under the original terms of the 2022 bonus plan. After careful consideration, the Compensation Committee approved discretionary bonuses of $97,200 for Mr. Tapia to recognize his individual contributions during 2022.
Special Cash Bonus
In April 2022, and in consultation with our Compensation Committee, the Board approved a one-time special cash bonus opportunityof $500,000 for each named executive officer:Messrs. Dillon and Mullen, subject to such executive’s continuous employment through April 11, 2023 (the “Special Cash Bonus”). The Board awarded the one-time bonus in recognition of the need to retain and stabilize the senior leadership team following Cheng Lu’s resignation as President and CEO in March 2022.
Name
​​
2021 Salary
​​
2021 Target
Bonus (as %
of Base
Salary)
​​
2021 Target
Bonus as a
Dollar
Amount
Xiaodi Hou
​​
$350,000
​​
50%
​​
$175,000
Cheng Lu
​​
$450,000
​​
75%
​​
$337,500
Patrick Dillon
​​
$350,000
​​
60%
​​
$210,000
James Mullen
​​
$350,000
​​
60%
​​
$210,000
In June 2022, Mr. Dillon notified the Company of his decision to resign his employment and the Company entered into a letter agreement with Mr. Dillon whereby Mr. Dillon agreed to provide advisory services to the Company following his termination, and, as consideration for such ongoing services, the Company agreed to waive its rights to require the repayment of the Special Cash Bonus. In connection with Mr. Mullen's separation in September 2022, the Company also waived its right to repayment of the Special Cash Bonus in consideration of Mr. Mullen's release of claims against the Company.
Furthermore, Cheng Lu received a guaranteed annual bonus for the fiscal year ending December 31, 2022, which Cheng Lu was eligible for under the letter agreement dated December 14, 2022, by and between the Company and Cheng Lu.
Equity Compensation
We offer equity andbelieve equity-based awards tofor our named executive officers as theNEOs are a critical long-term incentive component of our compensation program. In 2021, we grantedThe Compensation Committee’s objective is to grant equity that is competitive and reflects the performance, contribution, and criticality of each individual. Our Compensation Committee exercises its judgment and discretion, in consultation with our named executive officers equity-basedCEO and FW Cook, to determine the size and types of equity awards inthat it approves, the formrole and responsibility of restricted stock unitsthe NEO, competitive factors, the vested and stock options under our 2021 Plan. Stock options align executives’ realizable compensation withunvested value of the creation of stockholder valueequity awards held by the NEO, and serve as an effective long-term incentive vehicle to retain talent and incentivize performance. Executives only realize value from options if our stock price increases following the grant date. Restricted stock units support retention and provide alignment with stockholders’ interests during the vesting term.NEO’s total compensation. Generally, our equity-based awards vest over four years, subject to the employee’s continued employment with us on each vesting date.date; however, we may grant, and have granted, awards with different vesting schedules from time to time, including awards that vest upon achievement of performance-based milestones.
Compensation Changes in Fiscal 2022
Time-Vested RSUs. In April 2022, and in consultation withwe granted our compensation committee, the Board has approved the following compensation arrangement changes for Mr. Dillon and Mr. Mullen: (i) an increase to such executive’s base salary from $350,000 to $450,000, (ii) an increase to such executive’s annual target bonus opportunities from 50% to 75% of each of their base salaries, (iii) a $500,000 cash bonus, subject to such executive’s continuous employment through April 11, 2023, and (iv) a $4,000,000 equity grant for each such executiveNEOs equity-based awards primarily in the form of atime-vested restricted stock unit, subjectunits (“RSUs”), which support retention and provide long-term alignment with our stockholders’ interests. The Compensation Committee determined RSU grant amounts based on an assessment of each individual's performance and contributions to the following vesting schedule: 12.5% of RSUs shall vest when the grantee completes six months of continuous service after the Vesting Commencement Date; and 12.5% of RSUs shall vest when the grantee completes each six months of continuous service thereafter, and (v) an amendment to the terms of the Change in Control and Severance Agreements entered into with such executives (as further described below), which provides that in the event of an involuntary termination outside of a Change in Control Period (as defined in the Change in Control and Severance Agreements), the total number of vested shares subject to each of such executive’s then-outstanding equity awards subject to time-based vesting shall be determined by adding twelve (12) months to executive’s actual periodCompany.
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2022 Performance-Based RSUs. On November 10, 2022, the Compensation Committee granted Cheng Lu performance-based RSUs, which are subject to both market and service-based vesting requirements. The market-based vesting component will be satisfied if the Company’s average closing price over a 60-day trailing period exceeds certain thresholds at any time on or before November 10, 2026, as follows:
Stock Price Hurdle
​​
% Increase Over Grant
Date Stock Price
​​
PSUs Eligible to Vest
$10.00
​​
+270%
​​
33%
$15.00
​​
+456%
​​
33%
$20.00
​​
+641%
​​
33%
The service-based vesting requirements will vest in four equal annual installments beginning on November 10, 2023, subject to Cheng Lu’s continuous service with the Company through each vesting date. In 2022, we did not grant any performance-based or market-based equity awards to our other NEOs.
As described below, equity awards granted to our NEOs are subject to accelerated vesting under certain circumstances.
Severance and Change in Control Arrangements
We have entered into offer letters or employment-related agreements with certain of our NEOs, which provide for, among other things, severance benefits and payments to be paid upon certain qualifying terminations of employment, including in connection with a “change in control” of the Company, as summarized below. We believe that these types of arrangements are necessary to attract and retain executive talent and are a customary component of executive compensation. In particular, such arrangements can mitigate a potential disincentive for our NEOs when they are evaluating a potential acquisition of the Company and can encourage retention through the conclusion of the transaction. The payments and benefits under such arrangements are designed to be competitive with market practices. A description of these arrangements, as well as information on the estimated payments and benefits that our NEOs would have been eligible to receive as of December 31, 2022, are set forth in the separation date. section titled, “Potential Payments Upon Termination or Change in Control” below.
Employee Benefits and Perquisites
Our NEOs are eligible to participate in our health and welfare plans to the same extent as are other full-time employees generally. We also pay life insurance premiums on behalf of our NEOs and we do reimburse our NEOs for their necessary and reasonable business and travel expenses incurred in connection with their services to us. Cheng Lu also received a monthly housing allowance pursuant to his Letter Agreement dated December 14, 2022, as further described below. Other than these items, we generally do not provide our NEOs with perquisites or other personal benefits.
Our NEOs are also eligible to participant in the 401(k) plan we maintain for our employees generally. The 401(k) plan is intended to qualify under Section 401(k) of the Internal Revenue Code. Employees may elect to reduce their current compensation by up to the statutorily prescribed annual limits and to have the amount of such reduction contributed to their 401(k) plans. During 2022, the Company offered matching contributions up to 100% of up to 5% of the base salary of all employees, including our NEOs.
Pension Benefits and Nonqualified Deferred Compensation
Our NEOs did not participate in, or otherwise receive any benefits under, any pension or retirement plan or non-qualified deferred compensation plan sponsored by us during the fiscal years ended December 31, 2020, December 31, 2021, and December 31, 2022.
Other Policies and Considerations
Insider Trading Compliance Policy. Under our Insider Trading Compliance Policy, we prohibit our employees, including our executive officers and Board members, from hedging the risk associated with ownership of shares of our common stock and other securities, as well as from pledging any of our securities as collateral for a loan, with limited exceptions.
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Corporate Governance Guidelines. Under our Corporate Governance Guidelines, all non-employee directors and executive officers of the Company are subject to our stock ownership guidelines, which require the Company’s Executive Officers to own shares and share equivalents with the value of five times (5x) their annual base salary and Non-Employee Directors to own shares and share equivalents with the value of five times (5x) their cash retainer for Board service. Ownership levels are expected to be achieved within five years of this Corporate Governance Guidelines being applicable.
“Golden Parachute” Payments. Sections 280G and 4999 of the Internal Revenue Code provide that certain executive officers and other service providers who are highly compensated or hold significant equity interests may be subject to an excise tax if they receive payments or benefits in connection with a change in control of the Company that exceeds certain prescribed limits, and that we, or a successor, may forfeit a tax deduction on the amounts subject to this additional tax. While the Compensation Committee may take the potential forfeiture of such tax deduction into account when making compensation decisions, it will award compensation that it determines to be consistent with the goals of our executive compensation program even if such compensation is not deductible by us. We currently do not provide any tax gross-ups to cover excise taxes under Section 4999 in connection with a change in control, other than for Cheng Lu, as described below.
Section 162(m). To maintain flexibility and the ability to pay competitive compensation, we do not require all compensation to be deductible. Section 162(m) of the Internal Revenue Code generally limits to $1.0 million the amount of remuneration that the Company may deduct in any calendar year for certain executive officers. To maintain the flexibility to provide compensation programs for our NEOs that will best incentivize them to achieve our key business objectives and create sustainable long-term stockholder value, the Compensation Committee reserves the right to pay compensation that may not be deductible to the Company.
Accounting for Share-Based Compensation. We follow Financial Accounting Standard Board Accounting Standards Codification Topic 718 (“ASC Topic 718”) for our share-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all share-based payment awards made to employees and directors, including stock options and RSUs, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though our NEOs may never realize any value from their awards.
Policy Regarding Recoupment of Certain Compensation. In 2022, the SEC adopted final rules implementing the incentive-based compensation recovery provisions of the Dodd-Frank Act. The Company intends to adopt a new recoupment policy to comply with the new requirements, which must be adopted, pursuant to the Nasdaq listing standards, by December 1, 2023.
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COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has reviewed and discussed the foregoing Compensation Discussion and Analysis with management and based on that review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
​​
The Compensation Committee
​​
​​
/s/ James Lu
​​
James Lu, Chair
​​
​​
/s/ Mo Chen
​​
Mo Chen
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EXECUTIVE COMPENSATION TABLES
2022 Summary Compensation Table
The following table shows information regarding the compensation of our NEOs for services performed during the years ended December 31, 2020, December 31, 2021, and December 31, 2022.
Name and Principal Position
​​
Year
​​
Salary
($)
​​
Bonus
($)(1)
​​
Stock
Awards
($)(2)
​​
Option
Awards
($)(3)
​​
All Other
Compensation
($)
​​
Total
($)
Cheng Lu
Chief Executive Officer(4)
​​
2022
​​
197,115(5)
​​
400,000(6)
​​
9,076,250(7)
​​
—
​​
451,382(8)
​​
10,124,747
​
2021
​​
450,000
​​
305,000
​​
—
​​
65,998,500
​​
15,237
​​
66,768,737
​
2020
​​
387,500
​​
60,000
​​
8,241,413
​​
7,785,783
​​
1,076,259(9)
​​
17,550,955
Xiaodi Hou
Former Chief Technology Officer and Chief Executive Officer(10)
​​
2022
​​
439,038
​​
—
​​
—
​​
—
​​
—
​​
439,038
​
2021
​​
325,000
​​
187,000
​​
14,110,000
​​
9,160,467
​​
551,424(11)
​​
24,333,891
​
2020
​​
280,000
​​
620
​​
45,000
​​
—
​​
73,968
​​
399,588
Ersin Yumer
Former Interim Chief Executive Officer(12)
​​
2022
​​
415,301
​​
—
​​
616,829
​​
—
​​
365,335(13)
​​
1,397,465
Eric Tapia
Chief Financial Officer(14)
​​
2022
​​
332,713
​​
97,200
​​
1,310,849
​​
—
​​
57,220(15)
​​
1,797,982
Patrick Dillon
Former Chief Financial Officer(16)
​​
2022
​​
247,821
​​
—
​​
3,477,476
​​
—
​​
512,391(17)
​​
4,237,688
​
2021
​​
350,000
​​
350,000
​​
705,500
​​
458,023
​​
34,046
​​
1,897,569
​
2020
​​
9,423
​​
50,000
​​
494,485
​​
1,528,703
​​
—
​​
2,082,611
James Mullen
Former Chief Administrative and Legal Officer(18)
​​
2022
​​
347,011
​​
—
​​
3,477,476
​​
—
​​
613,771(19)
​​
4,438,258
​
2021
​​
350,000
​​
179,000
​​
8,818,750
​​
—
​​
16,053
​​
9,363,803
​
2020
​​
75,000
​​
55,000
​​
329,657
​​
1,020,045
​​
—
​​
1,479,702
1.
This amount indicates the discretionary bonus granted to certain NEOs by the Company’s Compensation Committee. In our 2022 Proxy Statement, we reported bonus amounts earned in respect of fiscal year 2021 in the “Non-Equity Incentive Plan Compensation” column that were awarded to NEOs in the Compensation Committee’s discretion, which are more appropriately reported in the “Bonus” column. The bonus amounts earned in fiscal year 2021 reported in the “Summary Compensation Table” above have been revised to reflect this correction by moving such amounts from the “Non-Equity Incentive Plan Compensation” column to the “Bonus” column. No changes were made to the aggregate bonus amount NEOs earned for fiscal year 2021.
2.
The amounts in the stock awards column represent the grant date fair value of stock awards in respect of Class A Common Stock granted in accordance with Financial Accounting Standards Board (“FASB”) Topic 718. For information regarding the assumptions used in determining the fair value of an award, please refer to Note 10 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on September 7, 2023 (the “2022 Form 10-K”).
3.
The amounts in the option awards column represent the grant date fair value of option awards in respect of Class A Common Stock granted in fiscal year 2022 in accordance with FASB Topic 718. For information regarding the assumptions used in determining the fair value of an award, please refer to Note 10. Stock-Based Compensation of the 2022 Form 10-K.
4.
In 2022, Cheng Lu served as the Company’s CEO from January 1, 2022 to March 3, 2022, and again from and after November 10, 2022.
5.
This amount consists of the sum of: (i) $147,115, which Cheng Lu received as salary during the time that he served as the Company’s CEO from January 1, 2022 to March 3, 2022, and from November 10, 2022 to December 31, 2022; and (ii) $50,000 paid as salary earned through March 3, 2022 and all Cheng Lu's accrued but unused vacation time or paid time off under the transition and separation agreement dated March 2, 2022 by and between the Company and Cheng Lu.
6.
This amount refers to the guaranteed bonus for the fiscal year ending December 31, 2022, which Cheng Lu was eligible for under the letter agreement dated December 14, 2022, by and between the Company and Cheng Lu.
7.
Cheng Lu’s award with both market and service-based vesting requirements is calculated by multiplying the number of shares subject to the award by the estimated fair value using a Monte Carlo valuation method pursuant to FASB ASC Topic 718. In December, 2022, Cheng Lu’s outstanding options were canceled and exchanged for a new grant of restricted stock units, 50% of which vest solely on continued service with the Company and 50% which vest based on achieving certain stock price hurdles. Each of the options had an exercise price in excess of the fair market value of the Company’s Class A Common Stock as of the date of the cancellation and exchange. The exchanged award was valued in accordance with FASB ASC Topic 718, and there was no incremental fair value that resulted from this option for restricted stock unit exchange. For a description of the exchange, please see “Employment and Change in Control Severance Agreements –Employment and Change in Control Severance Agreement with Cheng Lu” below.
8.
This amount includes: (i) the payment of health insurance premiums under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) in the amount of $1,382 paid in accordance to the transition and separation agreement dated March 2, 2022 by and between
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the Company and Cheng Lu; and (ii) $450,000, which was paid under the letter agreement dated December 14, 2022 by and between the Company and Cheng Lu, and consists of the consulting fees that would have otherwise become payable to Cheng Lu under the consulting agreement dated March 3, 2022 by and between Cheng Lu and the Company had Cheng Lu provided consulting services thereunder through the term of the consulting agreement.
9.
This amount represents: (i) $15,312 for life insurance premiums paid by us on behalf of Cheng. Lu, (ii) $988,947 of income related to Company's forgiveness in December 2020 of principal and accrued interest with respect to a partial-recourse promissory note issued by Cheng Lu to the Company in connection with his exercise of an option to purchase 2,125,000 shares of Class A Common Stock in March 2020, and (iii) $72,000 of travel and relocation benefits.
10.
In 2022, Mr. Hou served as the Company’s Chief Technology Officer from January 1, 2022 to March 3, 2022 and as the Company’s CEO and Chief Technology Officer from March 4, 2022 to October 30, 2022. The amounts listed represent the total amount earned for both positions.
11.
This amount represents (i) $16,053 paid for life insurance premiums paid by us on behalf of Mr. Hou and (ii) $535,371 paid for legal, trust, and tax planning related service fees paid by us on behalf of Mr. Hou.
12.
In 2022, Mr. Yumer served as the Company’s Executive Vice-President, Operations from January 1, 2022 to October 30, 2022, and as the Company’s interim CEO from October 31, 2022 to November 10, 2022. The amounts listed represent the total amount earned for both positions.
13.
This amount includes: (i) the payment of a relocation bonus in the amount of $7,153; (ii) the severance payment in the amount of $340,800 under the letter agreement dated November 15, 2022 by and between the Company and Mr. Yumer; (iii) health insurance premiums under COBRA in the amount of $1,110 also under the letter agreement dated November 15, 2022, (iv) the Company's matching 401(k) contributions in the amount of $7,822; and (v) $8,450 as miscellaneous payments.
14.
In 2022, Mr. Tapia served as the Company’s Executive Vice-President, Global Controller from January 1, 2022 to July 6, 2022, as the Company’s interim CFO from July 7, 2022, to December 14, 2022, and as the Company’s CFO from and after December 15, 2022. The amounts listed represent the total amount earned for all positions.
15.
This amount includes reimbursement received by Mr. Tapia for relocation purposes in the amount of $41,969 and the Company's matching 401(k) contributions in the amount of $15,250.
16.
In 2022, Mr. Dillon served as the Company’s CFO from January 1, 2022 until July 7, 2022. The amounts listed represent the total amount earned for this term.
17.
This amount consists of: (i) $500,000 as a retention bonus that Mr. Dillion received under the retention bonus letter between Mr. Dillon and the Company dated April 11, 2022, which the Company waived its rights to repayment under the letter dated June 15, 2022 from the Company to Mr. Dillon; and (ii) the Company's matching 401(k) contributions in the amount of $12,391.
18.
In 2022, Mr. Mullen served as the Company’s CALO from January 1, 2022 until September 30, 2022. The amounts listed represent the total amount earned for this term.
19.
This amount includes: (i) $500,000 as a retention bonus that Mr. Mullen received under the retention bonus letter between Mr. Mullen and the Company dated April 11, 2022, which the Company waived its rights to repayment, (ii) the payment of health insurance premiums under COBRA in the amount of $3,329, (iii) the amount of $95,192 paid as severance, all under the letter agreement dated September 2022 between Mr. Mullen and the Company, and (iv) the Company's matching 401(k) contributions in the amount of $15,250.
Grants of Plan-Based Awards in 2022
The following table sets forth each grant of plan-based awards to our NEOs during 2022:
 
​​
 
​​
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards
​​
Estimated Future Payouts
Under Equity Incentive
Plan Awards(1)
​​
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)
​​
Grant
Date Fair
Value of
Stock and
Option
Awards
($)(2)
Name
​​
Grant Date
​​
Threshold
($)
​​
Target
($)
​​
Maximum
($)
​​
Threshold
(#)
​​
Target
(#)
​​
Maximum
(#)
​
Cheng Lu
​​
12/14/2022
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
​​
3,425,000(3)
​​
6,062,250
​
12/14/2022
​​
—
​​
—
​​
—
​​
N/A
​​
N/A
​​
3,425,000
​​
—
​​
3,014,000
Xiaodi Hou
​​
N/A
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
Ersin Yumer
​​
4/15/2022
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
​​
500(4)
​​
5,595
​
7/21/2022
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
​​
88,074(4)
​​
611,234
Eric Tapia
​​
7/21/2022
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
​​
121,713(5)
​​
1,310,849
Patrick Dillon
​​
4/1/2022
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
​​
291,490(6)
​​
3,477,476
James Mullen
​​
4/1/2022
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
​​
291,490(6)
​​
3,477,476
1.
On December 14, 2022, Cheng Lu received a grant of restricted stock units in respect of Class A Common Stock that are subject to both market and service-based vesting requirements. The market-based vesting requirements will be satisfied if the Company’s average closing price over a 60-day trailing period exceeds certain thresholds at any time on or before November 10, 2026, as follows: (a) 33% of the units of stock will vest if such average closing price equals or exceeds $10, (b) 33% of the units of stock will vest if such average closing price equals or exceeds $15.00, and (c) 33% of the units of stock will vest if such average closing price equals or exceeds $20.00. The service-based vesting requirements will vest in four equal annual installments beginning on November 10, 2023; provided that Cheng Lu remains in continuous service on each such vesting date. Cheng Lu’s performance award is calculated by multiplying the number of shares subject to the award by the estimated fair value using a Monte Carlo valuation method pursuant to FASB ASC Topic 718.
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2.
The amount in this column represents the grant date fair value of stock awards granted in fiscal year 2022 in accordance with FASB Topic 718. For information regarding the assumptions used in determining the fair value of an award, please refer to Note 10. Stock-Based Compensation of the 2022 Form 10-K. Please see footnote 7 to the “2022 Summary Compensation Table” regarding Cheng Lu’s option for restricted stock unit exchange in December 2022.
3.
Reflects service-based restricted stock units (“RSUs”) in respect of Class A Common Stock granted to Cheng Lu that vest in four equal annual installments, provided that the Cheng Lu remains in continuous service with the Company on each such vesting date.
4.
Reflects service-based RSUs in respect of Class A Common Stock that are fully vested on the grant date.
5.
Reflects service-based RSUs in respect of Class A Common Stock that are 25% cliff-vested after year one, and vested 12.5% semi-annually thereafter, provided the NEO remains in continuous service with the Company on each such vesting date.
6.
Reflects service-based RSUs in respect of Class A Common Stock that are vested 12.5% semi-annually, provided the NEO remains in continuous service with the Company on each such vesting date.
Outstanding Equity Awards at 2022 Fiscal Year End
The following table provides information regarding outstanding equity awards held by our NEOs as of December 31, 2022:
​​
​​
Option Awards
​​
Stock Awards
Name
​​
Date of
Grant
​​
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
​​
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
​​
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
​​
Option
Exercise
Price
($)
​​
Option
Expiration
Date
​​
Number of
Shares or
Units of
Stock
That Have
Not Vested
(#)
​​
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1)
​​
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
(#)
​​
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value of
Unearned
Shares
or Units
of Stock
That
Have
Not Vested
($)(1)
Cheng Lu
​​
12/14/20
​​
—
​​
—
​​
—
​​
—
​​
—
​​
3,425,000(2)
​​
5,617,000
​​
—
​​
—
​
12/14/20
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
​​
3,425,000(3)
​​
—
Xiaodi Hou
​​
6/29/202
​​
—
​​
—
​​
—
​​
—
​​
—
​​
125,000(4)
​​
205,000
​​
—
​​
—
​
7/20/202
​​
100,000(5)
​​
300,000(5)
​​
—
​​
47.79
​​
6/9/2023(6)
​​
—
​​
—
​​
—
​​
—
Ersin Yumer
​​
N/A
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
Eric Tapia
​​
7/21/202
​​
—
​​
—
​​
—
​​
—
​​
—
​​
121,713(7)
​​
199,609
​​
—
​​
—
​
6/29/202
​​
—
​​
—
​​
—
​​
—
​​
—
​​
24,750(8)
​​
40,590
​​
—
​​
—
Patrick Dillon
​​
12/24/20
​​
109,375(9)
​​
—
​​
—
​​
4.20
​​
10/17/20
​​
—
​​
—
​​
—
​​
—
​
12/24/20
​​
21,875(9)
​​
—
​​
—
​​
8.11
​​
10/17/20
​​
—
​​
—
​​
—
​​
—
​
12/24/20
​​
21,875(9)
​​
—
​​
—
​​
14.00
​​
10/17/20
​​
—
​​
—
​​
—
​​
—
​
7/20/202
​​
5,000(10)
​​
—
​​
—
​​
47.79
​​
10/17/20
​​
—
​​
—
​​
—
​​
—
James Mullen
​​
12/24/20
​​
112,500(11)
​​
—
​​
—
​​
4.20
​​
9/30/202
​​
—
​​
—
​​
—
​​
—
​
12/24/20
​​
37,500(11)
​​
—
​​
—
​​
8.11
​​
9/30/202
​​
—
​​
—
​​
—
​​
—
​
12/24/20
​​
37,500(11)
​​
—
​​
—
​​
14.00
​​
9/30/202
​​
—
​​
—
​​
—
​​
—
1.
Determined with reference to $1.64, the closing price of a share of our Class A Common Stock on the last trading day before December 31, 2022. Each equity award is in respect of Class A Common Stock.
2.
These RSUs are subject to a service-based vesting requirement, which will vest in four equal annual installments beginning on November 10, 2023, provided that Cheng Lu remains in continuous service on each such vesting date.
3.
These RSUs are subject to both market and service-based vesting requirements. The market-based vesting requirements will be satisfied if the Company’s average closing price over a 60-day trailing period exceeds certain thresholds at any time on or before November 10, 2026, as follows: (a) 33% of the units of stock will vest if such average closing price equals or exceeds $10, (b) 33% of the units of stock will vest if such average closing price equals or exceeds $15.00, and (c) 33% of the units of stock will vest if such average closing price equals or exceeds $20.00. The service-based vesting requirements will vest in four equal annual installments beginning on November 10, 2023, provided that Cheng Lu remains in continuous service on each such vesting date.
4.
These RSUs are subject to a service-based vesting requirement, which vest as follows: (a) 25% of the RSUs vested on June 1, 2022, and (b) 12.5% of the RSUs vested every six months thereafter, provided that Mr. Hou remains in continuous service on each such vesting date. As of December 31, 2022, Mr. Hou had 125,000 outstanding RSUs, which were cancelled immediately upon Mr. Hou’s resignation from the Company’s Board on March 9, 2023.
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5.
These options are subject to a service-based vesting requirement, which vest as follows: (a) 25% of the options vested on July 20, 2022, and (b) 12.5% of the options vest every six months thereafter; provided that Mr. Hou remains in continuous service on each such vesting date. As of December 31, 2022, Mr. Hou had 400,000 outstanding options, 250,000 of which were unvested and cancelled immediately as of his resignation from the Company’s Board on March 9, 2023, and 150,000 of which were vested as of his resignation date were unexercised and expired on June 9, 2023.
6.
Mr. Hou’s options were initially set to expire on July 19, 2031. However, due to Mr. Hou’s resignation from the Board on March 9, 2023, Mr. Hou had three months after his termination to exercise any vested options and such options were unexercised and expired on June 9, 2023.
7.
These RSUs are subject to a service-based vesting requirement, which will be satisfied over a four-year period, having 25% vesting on July 7, 2023, and 12.5% of those RSUs vesting each six months thereafter, subject to Mr. Tapia’s continuous service with the Company.
8.
These RSUs are subject to a service-based vesting requirement, which will be satisfied over a four-year period, with 25% of the RSUs vesting on each anniversary of May 1, 2021, subject to Mr. Tapia’s continuous service with the Company on each such date.
9.
These options are subject to a service-based vesting requirement, which will be satisfied over a four-year period, having 25% vesting on December 15, 2021, and 6.25% of those options vesting each three months thereafter, subject to Mr. Dillon’s continuous service with the Company. As of October 17, 2022, which was the end of the transition period associated with Mr. Dillon's separation from the Company, all of the outstanding unvested options were cancelled immediately and the expiration date of the outstanding vested options was extended to October 17, 2024.
10.
These options are subject to a service-based vesting requirement, which will be satisfied over a four-year period, having 25% vesting on July 20, 2022, and 12.5% of those options vesting each six months thereafter, subject to Mr. Dillon’s continuous service with the Company. As of October 17, 2022, which was the end of the transition period associated with Mr. Dillon's separation from the Company, all of the outstanding unvested options were cancelled immediately and the expiration date of the outstanding vested options was extended to October 17, 2024.
11.
These options are subject to a service-based vesting requirement, which will be satisfied over a four-year period, with 25% vesting on December 15, 2021, and 6.25% of those options vesting every three months thereafter, subject to Mr. Mullen’s continuous service with the Company. Upon Mr. Mullen's separation from the Company on September 30, 2022, the Company accelerated the vesting for periods between October 1, 2022 and September 30, 2023, and extended the expiration date of the vested options to September 30, 2024.
Option Exercises and Stock Vested During Fiscal Year 2022
 
​​
Option Awards
​​
Stock Awards
Name
​​
Number of Shares
Acquired on
Exercise
(#)
​​
Value Realized on
Exercise
($)
​​
Number of Shares
Acquired on
Vesting
(#)
​​
Value Realized on
Vesting
($)
Cheng Lu
​​
—
​​
—
​​
175,000
​​
2,318,750
Xiaodi Hou
​​
—
​​
—
​​
75,000
​​
455,500
Ersin Yumer
​​
—
​​
—
​​
58,552(1)
​​
335,668
Eric Tapia
​​
—
​​
—
​​
8,250
​​
85,553
Patrick Dillon
​​
—
​​
—
​​
50,186(2)
​​
389,401
James Mullen
​​
—
​​
—
​​
168,497(3)
​​
1,571,658
1.
This number includes 17,025 shares vested but not distributed as of December 31, 2022 due to Rule 144 restrictions.
2.
This number includes 40,186 shares that were accelerated on October 17, 2022, pursuant to the separation agreement dated June 15, 2022 between the Company and Mr. Dillon.
3.
This number includes 114,122 shares that were accelerated on September 30, 2022, pursuant to the separation agreement dated September 22, 2022 between the Company and Mr. Mullen.
Pension; Nonqualified Deferred Compensation
The Company does not maintain a non-qualified deferred compensation plan for the benefit of the NEOs and none of the NEOs participate in a defined benefit pension plan maintained by the Company.
Employment and Change in Control Severance Agreements
Employment and Change in Control Severance Agreement with Cheng Lu
Cheng Lu served as the Company’s CEO in early 2022, departed from the Company for a short period, and re-joined the Company again as CEO at the end of 2022. On December 14, 2022, the Company and Cheng Lu entered into a letter agreement (the “Letter Agreement”) and a severance and change in control agreement (the “Severance and CIC Agreement”). The Letter Agreement provides that Cheng Lu will receive an annual base salary of $450,000, a target annual bonus opportunity of 80% of his annual base salary, which is guaranteed to be at least equal to $400,000 for the fiscal year ending December 31, 2022, and a monthly housing allowance of $9,000. The Letter Agreement further provides for an award of 6,850,000 restricted stock units, 50% of which will be restricted stock
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units granted subject solely to service-based vesting requirements and will vest over four years, with 25% of them vesting on each of the first four anniversaries of November 10, 2022 (the “Service-Based Requirement”) and 50% of which will be granted in the form of restricted stock units subject to both service-based and market-based vesting requirements that will be eligible to vest based upon the attainment of both the Service-Based Requirement and certain stock price hurdles, as described above under “Equity Compensation,” in either case, subject to continued employment. The award of RSUs was made in exchange for the cancellation and forfeiture of each of Cheng Lu’s 1,850,000 outstanding time-vested stock options, and took into account the 1,150,000 performance-based options that were forfeited when Cheng Lu resigned as CEO in March 2022. The Letter Agreement also provides for a cash payment of $150,000, which represents the balance of the consulting fees that Cheng Lu would have received under his consulting agreement, had that agreement continued in accordance with its terms.
The Severance and CIC Agreement provides for the following severance entitlements upon a termination of employment by the Company without cause or by Cheng Lu for good reason, in either case, other than within six months prior to or within twelve months following a change in control: (i) twelve months of base salary continuation; (ii) subsidized COBRA coverage for up to eighteen months; (iii) a lump-sum cash amount equal to $15,000,000 payable within thirty days of such termination of employment by the Company without cause or by Cheng Lu for good reason; provided, that such termination occurs prior to the third anniversary of the effective date of the Letter Agreement; and (iv) an additional eighteen months vesting of then-outstanding equity awards, with performance-based vesting, all performance goals and other vesting criteria willto be deemed satisfied in accordance with the terms set forth inof the applicable award agreement evidencingand the stock price hurdles applicable equity award.
We have entered into both a confirmatory employment agreement and a Change of Control and Severance Agreement with Xiaodi Hou, each of which remains in force in Mr. Hou’s capacity as our current Chief Executive Officer. Mr. Hou’s Change of Control and Severance Agreement is subject to the same terms as our named executive officers, as described under the “his initial market-based restricted stock units deemed achieved. The Severance and ChangeCIC Agreement further provides for the following severance entitlements upon a termination of employment by the Company without cause or by Cheng Lu for good reason, in Control Benefits” section below. Pursuanteither case, within six months prior to Mr. Hou’s employment agreement, he is entitledor within twelve months following a change in control: (i) a lump-sum cash payment equal to a base salary of $350,000 and an annual target bonus opportunity of up to 50%two times the sum of his base salary. In April 2022,salary and atannual target bonus; (ii) subsidized COBRA coverage for up to eighteen months; and (iii) accelerated vesting of each then-outstanding equity award, with performance goals or other vesting criteria deemed satisfied. The foregoing benefits and entitlements are subject to Cheng Lu’s execution and nonrevocation of a release of claims in favor of the recommendationCompany. The Severance and CIC Agreement further provides that, upon the occurrence of our compensation committee,a change in control, Cheng Lu will receive: (i) a lump-sum cash payment equal to the Board has approvedgreater of $15,000,000 or 0.60% of the following compensation arrangement changes for Mr. Hou: (i) an increase tototal equity value of the Company calculated based on the aggregate consideration received in connection with such executive’s base salary from $350,000 to $500,000,change in control; and (ii) accelerated vesting of each then-outstanding equity award, with performance goals or other vesting criteria deemed satisfied. The Severance and CIC Agreement also provides Cheng Lu with an increaseindemnity for any excise tax imposed pursuant to such executive’s annual target bonus opportunities from 50% to 75%Section 4999 of his base salary.the Internal Revenue Code.
Severance and Change in Control BenefitsAgreements with Messrs. Hou, Dillon, and Mullen
On March 22, 2021, we entered into Change in Control and Severance Agreements (the “Severance“CIC and Severance Agreements”) with each of Messrs. Hou, Lu, Dillon, and Mullen. As described above, theThe CIC and Severance Agreements for Mr. Dillon and Mr. Mullen were subsequently amended in April 2022 (the “Amended Severance Agreements”).2022. The Severance AgreementsCIC and the Amended Severance Agreements provide for certain benefitsthat if an officerexecutive is subject to a termination without cause or resigns for certain good reasons (an involuntary termination), which are described below.
Other than respect to the Amended Severance Agreements described above for Mr. Dillon and Mr. Mullen, the Severance Agreements and Amended Severance Agreements entered into with each of our named executive officers, provide that if an officer is subject to a termination without cause or resigns for certain good reasons (an involuntary termination),reason, such individual will be eligible to receive, for the 12-month period following such involuntary termination (except as noted below) continued payment of base salary, continued payment of the employer’s portion of insurance premiums under COBRA, and vesting acceleration of all outstanding equity awards (unless our board of directors provides otherwise at the time an award is granted) as if the individual had provided continuous service for a period of six (6) months following termination (and the opportunity to vest into certain performance awards during the specified period following such involuntary termination).
Pursuant to the Severance AgreementsCIC and the Amended Severance Agreements, if an involuntary termination occurs during the period beginning three months prior to, and ending on the date that is twelve (12) months after oura change in control of the Company, each of our named executive officersNEOs is eligible to receive, for the 18-montheighteen month period following such involuntary termination, continued payment of base salary, continued payment of the employer’s portion of insurance premiums under COBRA, and a prorated bonus (at 100% of target). Further, all of the executive’s then-unvested time-based equity awards shallwill become vested (unless our board of directorsBoard provides otherwise at the time an award is granted). In the case of equity awards with performance-based vesting, all performance goals and other vesting criteria will be determined in accordance with the terms set forth in the award agreement evidencing the applicable equity award.
As described above, pursuant to a recommendation made by our compensation committee, the Board has approved an amendment to the terms of the Change in Control and Severance Agreements entered into with Mr. Dillon and Mr. Mullen, which providesMullen’s CIC and Severance Agreements provide that, in the event of an involuntary termination outside of a Change in Control Period (as defined in the Change in ControlCIC and Severance Agreements), the total number of vested shares subject to each of such executive’s then-outstanding equity awards subject to time-based vesting shallwill be determined by adding twelve (12) months to executive’s actual period of employment as of the separation
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date. In the case of equity awards with performance-based vesting, all performance goals and other vesting criteria will be deemed satisfied in accordance with the terms set forth in the award agreement evidencing the applicable equity award.
All such payments and benefits are contingent on the officer’sNEO’s execution and non-revocation of a general release of claims against us and satisfaction of other typical conditions.the Company.
Employee Benefits and Perquisites
Our named executive officers are eligibleAdditionally, Mr. Tapia is entitled to participate in our healththe 2023 Severance and welfare plansCIC Plan, as discussed in the section titled “Potential Payments upon Termination or Change in Control - 2023 Senior Management Severance and Change in Control Plan” below.
Potential Payments upon Termination or Change in Control
The following table quantifies the eligible payments that each NEO would have been entitled to receive upon various termination of employment scenarios, assuming the termination occurred on December 31, 2022 (other than those NEOs that actually separated from the Company prior to the same extentend of the fiscal year and became entitled to severance under the terms of their applicable severance agreements as are other full-time employees generally. We also pay life insurance premiums on behalfdescribed under “Named Executive Officer Departures” below) or upon the occurrence of our named executive officers. We have also reimbursed named executive officers for certain legal, tax,a change in control and estate planning advisory services relatedwithout a termination of employment in connection with the change in control.
Named
Executive
Officer
​​
Termination Scenario
​​
Cash
Severance
($)
​​
Value of
Accelerated
Stock Awards
($)
​​
COBRA
($)(1)
​​
Total
($)
Cheng Lu(2)
​​
Termination without Cause or resignation for Good Reason outside of a Change in Control period
​​
15,450,000(3)
​​
2,808,500(4)
​​
25,770
​​
18,284,270
​
Termination without Cause or resignation for Good Reason within a Change in Control period (including any single-trigger acceleration or benefits)
​​
16,700,000(5)
​​
11,234,000(6)
​​
25,770
​​
27,959,770
Eric Tapia(7)
​​
Termination without Cause or resignation for Good Reason outside of a Change in Control period
​​
—
​​
—
​​
—
​​
—
​
Termination without Cause or resignation for Good Reason within a Change in Control period
​​
—
​​
—
​​
—
​​
—
1.
Represents continued coverage under COBRA for a period of eighteen months. Please see “Employment and Change in Control Severance Agreements - Employment and Change in Control Severance Agreement with Cheng Lu” for additional details regarding Cheng Lu’s potential payments upon termination or change in control.
2.
Includes the value of the RSUs awards held by Cheng Lu that would become vested under the applicable circumstances. The value of RSUs shown is determined by multiplying $1.64, the closing price of a share of Company common stock on the last trading day before December 31, 2022 and the number of shares of RSUs that would become vested under the applicable termination event.
3.
This amount represents, under the severance and change in control agreement dated December 14, 2022 by and between the Company and Cheng Lu, the sum of (i) base salary for a period of twelve months; and (ii) a lump-sum cash amount equal to $15,000,000 (which assumes that $15,000,000 is greater than 0.60% of the total equity value of the Company in connection with the change in control). Cheng Lu would have received the $15,000,000 upon the occurrence of the change in control and irrespective of whether or not he would have incurred a qualifying termination as of the date of the change in control.
4.
Represents (i) accelerated vesting of time-based awards for an additional eighteen months and (ii) deemed achievement of the applicable stock price hurdles related to Cheng Lu’s market-based RSU award, including accelerated vesting of the time-based portion of such award for an additional eighteen months.
5.
Represents the amount equal to the sum of two times Cheng Lu’s base salary plus annual target bonus opportunity and a lump-sum cash amount equal to $15,000,000.
6.
Represents the accelerated vesting of all outstanding equity awards upon the occurrence of a change in control with market-based conditions deemed satisfied.
7.
Mr. Tapia was not eligible for any severance or acceleration benefits as a result of any termination of his employment with the Company as of December 31, 2022. Mr. Tapia is eligible to participate in the Senior Management Severance and Change in Control Plan, as of May 30, 2023, as further described and quantified below.
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their ownershipNamed Executive Officer Departures
Separation Agreement with Cheng Lu. As described above, in 2022, Cheng Lu served as the Company’s CEO from January 1, 2022 to March 3, 2022 and again from November 10, 2022, to present. In connection with his brief departure from the Company on March 3, 2022, the Company and Cheng Lu entered into a separation agreement, providing for the following: (i) a lump sum of company securities$50,000, (ii) payment of the monthly employer portion of the COBRA premium until the earlier of the end of the eighteen month period following March 3, 2022, the expiration of his coverage under COBRA, or the date when he becomes eligible for substantially equivalent health insurance in connection with new employment, (iii) continued vesting of outstanding options for the twelve-month period following March 3, 2022, subject to his continuous service with the Company, and also reimbursed certain travelif he remains in continuous service through such date then all shares subject to time-based options accelerate, vest, and relocation expenses. Other than these items, we generally do not provide our named executive officers with perquisites or other personal benefits. However, we do reimburse our named executive officers for their necessarybecome exercisable, (iv) his “milestone option” of 1,150,000 options to purchase shares of common stock was forfeited, (v) acceleration of all unvested restricted stock units, and reasonable business and travel expenses(vi) reimbursement of legal fees incurred in connection with theirthe separation agreement up to $10,000. The forgoing separation payments were subject to Cheng Lu’s execution for a general release of claims in favor of the Company.
Additionally, in connection with his departure, Cheng Lu and the Company entered into a consulting agreement dated March 3, 2022, whereby Cheng Lu would provide ongoing advisory services to us.the CEO for the one-year period following March 3, 2022. Pursuant to the consulting agreement, Cheng Lu was entitled to an annualized payment of $450,000 during the one-year term.
Our named executive officers are also eligible to participant in the 401(k) plan we maintain for our employees generally. The 401(k) plan is intended to qualify under Section 401(k)For a description of the Internal Revenue Service Code, so that contributionscurrent terms of Cheng Lu’s employment with the Company, please see “Employment Agreements – Employment Agreement With Cheng Lu” above.
Termination of Xiaodi Hou. Mr. Hou’s employment with the Company was terminated effective as of October 30, 2022. Mr. Hou did not receive any severance or termination related payments in connection with his separation.
Separation Agreement with Ersin Yumer. Effective November 25, 2022, the Company’s Board removed Mr. Yumer as interim CEO and President of the Company. In connection with Mr. Yumer’s removal, the Company entered into a separation agreement on November 15, 2022, providing for the following: (i) a lump sum payment of $340,800, which represents 80% of Mr. Yumer’s annual base salary, (ii) subsidized COBRA coverage for up to eighteen months, and (iii) an additional six months vesting of outstanding equity awards with performance goals and other vesting criteria deemed satisfied in accordance with the 401(k) plan,terms of the applicable award agreement. The forgoing separation payments were subject to Mr. Yumer’s execution of a general release of claims in favor of the Company.
Separation Agreement with Patrick Dillon. Effective July 7, 2022, Mr. Dillon resigned from his position as CFO of the Company. In connection with his separation, the Company and Mr. Dillon entered into a separation agreement dated June 15, 2022, providing for the following: (i) transition advisory services until October 17, 2022, (ii) continued vesting of RSUs and options through the transition period, (iii) extension of the exercisability period of options until the earlier of the two-year anniversary of the last date of the transition period and the investment earnings thereon,date on which any Company outstanding options are not taxableterminated in connection with certain corporate transactions, (iv) the Company waived its rights to require the employees until withdrawn. Employees may elect to reduce their current compensation by up to the statutorily prescribed annual limits and to haverepayment of a retention bonus in the amount of such reduction contributed$500,000 previously granted to their 401(k) plans. We did not make during 2020 or 2021 any matching contributions or other company contributionsMr. Dillon pursuant to or on behalfa retention bonus letter dated April 11, 2022, and (v) reimbursement for up to $10,000 of any employee, including our named executive officers.legal fees incurred in connection with his separation agreement. The forgoing separation payments were subject to Mr. Dillon’s execution of a general release of claims in favor of the Company.
Pension BenefitsSeparation Agreement with James Mullen. Effective September 30, 2022, Mr. Mullen resigned from his position as CALO of the Company. In connection with his separation, the Company and Nonqualified Deferred Compensation
Our named executive officers did not participate in, or otherwise receive any benefits under, any pension or retirement plan or non-qualified deferred compensation plan sponsored by us duringMr. Mullen entered into a separation agreement dated August 31, 2022, providing for the fiscal years ended December 31, 2020following: (i) continuation of base salary for twelve months and December 31, 2021.
Equity Compensation
We offer equityup to twelve months of subsidized COBRA coverage, (ii) continued vesting of RSUs and equity-based awards to our named executive officers asoptions for twelve months, (iii) extension of the long-term incentive componentexercisability period of our compensation program. We typically grant equity-based awards to new hires upon their commencing employment with us. Stock options allow employees to purchase sharesuntil the earlier of our Class A Common Stock at a price per share at least equal to the fair market value of our Class A Common Stock onSeptember 30, 2024 and the date on which any Company outstanding options are terminated in connection with certain corporate transactions, and (iv) the Company waived its rights to require the repayment of grant and may or may not be intendeda retention bonus in the amount of $500,000 previously granted to qualify as “incentive stock options” for U.S. federal income tax purposes. Restricted stock units allow employeesMr. Mullen pursuant to receive shares of our Class A Common Stock upon satisfaction of specified vesting criteria. Generally, our equity-based awards vest over four years,a retention bonus letter dated April 11, 2022. The forgoing separation payments were subject to Mr. Mullen’s execution of a general release of claims in favor of the employee’s continued employment with us on each vesting date; however, we may grant, and have granted, awards with different vesting schedules from time to time, including awards that vest upon achievement of performance-based milestones.
As described above under “Severance and Change in Control BenefitsCompany.,” equity awards granted to our named executive officers are subject to accelerated vesting under certain circumstances
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Outstanding Equity Awards at 2021 Year-End2023 Senior Management Severance and Change in Control Plan
On May 30, 2023, the Compensation Committee adopted the TuSimple Holdings Inc. Senior Management Severance and Change in Control Plan (the “2023 Severance and CIC Plan”). Mr. Tapia is a participant in the 2023 Severance and CIC Plan.
The following table2023 Severance and CIC Plan provides information regarding outstandingthat where a participant’s employment is terminated outside of the context of a “change in control,” either by the Company without “cause” or by the participant for “good reason” (each as defined in the 2023 Severance and CIC Plan), the participant will be entitled to receive: (i) a lump-sum cash payment equal to one-half of the sum of the participant’s base salary and target annual bonus; (ii) accelerated vesting of equity awards heldthat would have vested within one year of termination; and (iii) a lump-sum cash payment equal to twelve times the cost incurred by our named executive officersthe Company in the month immediately prior to the termination of employment for providing group health, dental, and vision benefits to the participant and the participant’s eligible dependents.
In the event that a participant’s employment is terminated within six months prior to, or within twelve months following, a change in control, either by the Company without cause or by the participant for good reason, the participant will be entitled to receive: (i) a lump-sum cash payment equal to the sum of the participant’s base salary and target annual bonus; (ii) accelerated vesting of each then-outstanding equity award, with the deemed attainment of the applicable performance metrics; and (iii) a lump-sum cash payment equal to twelve times the cost incurred by the Company in the month immediately prior to the termination of employment for providing group health, dental, and vision benefits to the participant and the participant’s eligible dependents.
The provision of payments and benefits described above is conditioned upon the participant’s execution of a release of claims. The 2023 Severance and CIC Plan provides that if a participant receives any amount, whether under the plan or otherwise, that is subject to the excise tax imposed pursuant to Section 4999 of the Internal Revenue Code, the amount of the payments to be made to the participant will be reduced to the extent necessary to avoid imposition of the excise tax, but only if the net amount of the reduced payments exceeds the net amount that the participant would receive following imposition of the excise tax and all income and related taxes.
Assuming the 2023 Severance and CIC Plan were in effect as of December 31, 2021.
Except2022, Mr. Tapia would have received the amounts as otherwise noted below, options to purchase sharesfollows: If his termination was without Cause or resignation for Good Reason outside of our Class A Common Stock are exercisable at any time, with unvested shares acquired subject to repurchase by us at the lower of the then-fair market value or the exercise price per share, in each case following termination of the individual’s continuous service with us.
The vesting schedule applicable to each outstanding award is described in the footnotes to the table below.
As described above under “Severance anda Change in Control Benefits,”period, Mr. Tapia would have received a total of $317,180, which includes $300,000 as cash severance (representing .5x the sum of his base salary and target annual bonus) and $17,180 as COBRA coverage (representing continued payment for 12 months). In addition, Mr. Tapia would receive each-then outstanding equity awards granted to our named executive officers are subject toaward that would have vested based on continued employment through the first anniversary, which, assuming the 2023 Severance and CIC Plan were in effect as of December 31, 2022, would represent $63,400 as value of accelerated vesting under certain circumstances.stock awards.
 
​​
 
​​
Option Awards
​​
Stock Awards
Name
​​
Vesting
Commencement
Date
​​
Securities
Underlying
Unearned,
Unexercised
Options (#)
​​
Number of
Securities
Underlying
Unexercised
Options
(#) Vested
​​
Number of
Securities
Underlying
Unexercised
Options (#)
Unvested
​​
Option
Exercise
Price ($)
​​
Option
Expiration
Date
​​
Number
of Shares
or Units of
Stock
That Have
Not Vested
(#)
​​
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($)1
Xiaodi Hou
​​
6/1/2021
​​
—
​​
—
​​
—
​​
—
​​
—
​​
200,000
​​
$7,170,0002
​
7/20/2021
​​
400,000
​​
—
​​
400,000
​​
$47.79
​​
7/19/2031
​​
—
​​
—
Cheng Lu
​​
6/30/2019
​​
—
​​
—
​​
—
​​
—
​​
—
​​
175,000
​​
$6,273,7502
​
12/31/2020
​​
350,000
​​
150,000
​​
350,000
​​
$4.20
​​
12/24/2030
​​
—
​​
—3
​
12/31/2020
​​
70,000
​​
30,000
​​
70,000
​​
$8.11
​​
12/24/2030
​​
—
​​
—3
​
12/31/2020
​​
70,000
​​
30,000
​​
70,000
​​
$14.00
​​
12/24/2030
​​
—
​​
—3
​
12/31/2020
​​
920,000
​​
230,000
​​
920,000
​​
$14.14
​​
3/4/2031
​​
—
​​
—4
​
3/4/2021
​​
1,150,000
​​
—
​​
1,150,000
​​
$14.14
​​
3/4/2031
​​
—
​​
—5
Patrick Dillon
​​
12/15/2020
​​
—
​​
—
​​
—
​​
—
​​
—
​​
45,000
​​
$1,613,2506
​
12/15/2020
​​
187,500
​​
62,500
​​
187,500
​​
$4.20
​​
12/24/2030
​​
—
​​
—7
​
12/15/2020
​​
37,500
​​
12,500
​​
37,500
​​
$8.11
​​
12/24/2030
​​
—
​​
—7
​
12/15/2020
​​
37,500
​​
12,500
​​
37,500
​​
$14.00
​​
12/24/2030
​​
—
​​
—7
​
6/1/2021
​​
—
​​
—
​​
—
​​
—
​​
—
​​
10,000
​​
$358,500 8
​
7/20/2021
​​
—
​​
—
​​
20,000
​​
$47.79
​​
7/19/2031
​​
—
​​
—9
James Mullen
​​
9/15/2020
​​
—
​​
—
​​
—
​​
—
​​
—
​​
27,500
​​
$985,8756
​
9/29/2020
​​
103,125
​​
46,875
​​
103,125
​​
$4.20
​​
12/24/2030
​​
—
​​
—9
​
9/29/2020
​​
34,375
​​
15,625
​​
34,375
​​
$8.11
​​
12/24/2030
​​
—
​​
—9
​
9/29/2020
​​
34,375
​​
15,625
​​
34,375
​​
$14.00
​​
12/24/2030
​​
—
​​
—9
​
3/1/2021
​​
—
​​
—
​​
—
​​
—
​​
—
​​
125,000
​​
$4,481,2508
If his termination was without Cause or resignation for Good Reason within a Change in Control period, Mr. Tapia would have received a total of $617,180, which includes $600,000 as cash severance (representing 1x the sum of his base salary and target annual bonus) and $17,180 as COBRA coverage (which represents payment for 12 months). In addition, Mr. Tapia would receive each then-outstanding and unvested equity award that would vest and become exercisable, which, assuming the 2023 Severance and CIC Plan were in effect as of December 31, 2022, would represent $240,200 as value of accelerated stock awards.
1.
Market value is based on $35.85 per share, which was the closing price of our Class A Common Stock on the last trading day of our 2021 fiscal year, December 31, 2021.
2.
Represents an award of restricted stock units granted, whereby the time-based vesting requirement shall be satisfied in connection with continuous service over three years, with 30% of the time-based vesting requirement becoming satisfied upon completion of one-year of service and 8.75% of the time-based vesting requirement becoming satisfied upon the completion of each quarter of service thereafter.
3.
The Time-Based Requirement will be satisfied in installments as to 30% of the Shares subject to this Option when the Optionee completes 12 months of continuous Service and as to 8.75% of the Shares subject to this Option for each quarter of continuous Service.
4.
The Time-Based Requirement will be satisfied in twenty (20) equal installments as to 5% of the Shares subject to this Option when the Optionee completes each quarter of continuous Service measured from the Vesting Commencement Date.
5.
The Performance-Based Requirement will be satisfied with respect to all Shares subject to this option when the Company has satisfied each of the Performance Milestones before the Expiration Date. For the avoidance of doubt, each of the Performance Milestones can be satisfied at different times and in different orders. For purposes of this option, the Performance Milestones are as follows: (i) The Company's average market capitalization during any consecutive 180-day period is no less than US$25,000,000,000; (ii) The average number of L4 autonomous semi-trucks operated by the Company (whether owned by the Company or its customers) in any 90-day period (calculated by daily trucks actively engaged in freight transportation) is no less than 1,500; and (iii) The Company's revenues from its Autonomous Freight Network for any 12-month period exceed US$200,000,000.
6.
Represents an award of restricted stock units granted, whereby the time-based vesting requirement shall be satisfied in connection continuous service over four years, with 25% of the time-based vesting requirement becoming satisfied upon completion of one-year of service and 6.25% of the time-based vesting requirement becoming satisfied upon the completion of each quarter of service thereafter.
2536

TABLE OF CONTENTS

Director Compensation
The following table sets forth information about the compensation of each person who served as a director during the 2022 fiscal year, other than a director who also served as a NEO.
Name
​​
Fees Earned
or Paid in
Cash
($)
​​
Stock
Awards
($)(1)(2)
​​
Option
Awards
($)
​​
Non-Equity
Incentive
Plan
Compensation
($)
​​
All Other
Compensation
($)
​​
Total
($)
Mo Chen(3)
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
Wendy Hayes(4)
​​
4,409
​​
250,000(5)
​​
—
​​
—
​​
—
​​
254,409
Michael Mosier(6)
​​
14,946
​​
—
​​
—
​​
—
​​
—
​​
14,946
James Lu(7)
​​
5,685
​​
250,000(8)
​​
—
​​
—
​​
—
​​
255,685
Brad Buss(9)
​​
82,147
​​
188,307
​​
—
​​
—
​​
—
​​
270,454
Charles Chao(10)
​​
—
​​
—
​​
—
​​
—
​​
—
​​
—
Karen C. Francis(11)
​​
64,402
​​
188,307
​​
—
​​
—
​​
—
​​
252,709
Michelle Sterling(12)
​​
73,554
​​
188,307
​​
—
​​
—
​​
—
​​
261,861
Reed Werner(13)
​​
193,294
​​
—
​​
—
​​
—
​​
—
​​
193,294
Bonnie Yi Zhang(14)
​​
18,750
​​
—
​​
—
​​
—
​​
—
​​
18,750
7.1.
The first 25%amount in this column represents the grant date fair value of stock awards granted in fiscal year 2022 in accordance with FASB Topic 718. For information regarding the assumptions used in determining the fair value of an award, please refer to Note Note 10. Stock-Based Compensation of the 2022 Form 10-K. Subject to the director’s continuing service, the service-based requirement for the restricted stock units will be satisfied in full over a one-year period. Upon a transaction constituting a “Change in Control” as defined in the 2021 Plan, the service-based requirement applicable to outstanding equity awards granted pursuant hereto will be deemed satisfied in full upon the effective date of such transaction.
2.
As of December 31, 2022, certain of our non-employee directors held outstanding RSUs under which the following number of shares of our Class A Common Stock are issuable as follows: (i) Ms. Hayes held 156,250 outstanding RSUs; and (ii) Mr. James Lu held 156,250 outstanding RSUs.
3.
Mr. Chen served as the Board’s chair from January 1, 2022 to March 3, 2022 and from November 10, 2022 to December 31, 2022; and as a Board member from March 4, 2022 to November 9, 2022.
4.
Ms. Hayes has served as a Board member since December 15, 2022.
5.
The RSUs are subject to this award will vest whena service-based vesting requirement, which shall be satisfied on the participant completes 12 monthsearlier of (i) December 15, 2023 or (ii) on the date of the issuer's next annual meeting of stockholders, subject to Ms. Hayes' continuous service an additional 12.5% ofwith the RSUs subject to this award will vestissuer on a semi-annual period thereafter, provided that you remain in continuous service as an employee, consultant or outside director (“Service”) through each such vesting date.
6.
Mr. Mosier has served as a Board member since December 15, 2022 and, in 2022, served as the Company’s security director under the Company’s National Security Agreement (the “NSA”) with the Committee on Foreign Investments in the United States (“CFIUS”). Due to CFIUS’ request, our security directors are compensated in cash, not in stock.
7.
James Lu has served as a Board member since December 13, 2022.
8.
The RSUs are subject to a service-based vesting requirement, which shall be satisfied on the earlier of (i) December 15, 2023 or (ii) on the date of the issuer's next annual meeting of stockholders, subject to James Lu's continuous service with the issuer on such vesting date.
9.
In 2022, Mr. Buss served as a Board member from January 1, 2022 until November 10, 2022.
10.
In 2022, Mr. Chao served as a Board member from January 1, 2022 until June 9, 2022.
11.
In 2022, Ms. Francis served as a Board member from January 1, 2022 until November 10, 2022.
12.
In 2022, Ms. Sterling served as a Board member from January 1, 2022 until November 10, 2022.
13.
In 2022, Mr. Werner served as a Board member from April 23, 2022 until November 10, 2022 and, during this time, Mr. Werner served as the Company's security director under the NSA. Due to CFIUS’ request, our security directors are compensated in cash, not in stock.
14.
In 2022, Ms. Zhang served as a Board member from January 1, 2022 until June 9, 2022.
Cash Compensation
The Non-Employee Director Compensation Policy provides for annual cash retainers for all non-employee directors in connection with their service on our Board and committees. Each non-employee director is paid an annual cash retainer for $50,000 per year for general service on our Board as well as the following additional annual cash retainers for their board committee service:
Committee
​​
Chair
​​
Member
Audit Committee
​​
$25,000
​​
$15,000
Compensation Committee
​​
$20,000
​​
$10,000
Nominating and Corporate Governance Committee
​​
$10,000
​​
$5,000
Government Security Committee
​​
$32,500
​​
$22,500
37

TABLE OF CONTENTS

In lieu of the Equity Award described below and in accordance with the NSA and the Non-Employee Director Compensation Policy, the directors who served as the Security Director under the NSA and the chair of the government security committee will receive a cash payment equal to $250,000, pro-rated to reflect the number of days that the Security Director will serve on our Board until our next annual stockholder meeting.
Annual cash retainers are paid quarterly in arrears. We reimburse reasonable expenses incurred by our non-employee directors in connection with attendance at Board or Committee meetings.
Equity Compensation
The Compensation Committee will approve a grant to each non-employee director an annual award of restricted stock units valued at $250,000 (the “Equity Award”). The Equity Award will be granted on or as soon as reasonably practicable after the date of the non-employee director’s appointment or election, and thereafter on or as soon as reasonably practicable after the date of each of our annual stockholder meetings provided that such director continues to serve on our Board after such meeting. Subject to the non-employee director’s continuous service, the Equity Award will vest in full over a one-year period and will vest on the earlier of the first day of the month that follows the one-year anniversary of such date of grant or on the date of the next regular annual meeting of the Company’s stockholders held following such date of grant; provided that the non-employee director remains in continuous service through such vesting date. In addition, an Equity Award granted between annual stockholder meetings to a newly-appointed director will be pro-rated to reflect the portion of the year that the director will serve on our Board. The Equity Award will vest in full if we are subject to a change in control prior to the termination of the non-employee directors’ continuous service.
Our non-employee directors, except our security director, are subject to minimum stock ownership guidelines set at five times the regular annual cash retainer. Ownership levels are expected to be achieved within five years of our guidelines being applicable. CFIUS has determined that our security director cannot be compensated in equity of the Company. For this reason, our security director is not subject to our minimum stock ownership guidelines.
38

TABLE OF CONTENTS

Pay Versus Performance
The following table reports the compensation of our Principle Executive Officer (“PEO” or “CEO”) and the average compensation of the other non-PEO NEOs as reported in the Summary Compensation Table for the past two fiscal years, as well as Compensation Actually Paid (“CAP”) as calculated under new SEC Pay-Versus-Performance (“PVP”) disclosure requirements, and certain performance measures required by the rules.
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
Value of
Initial
Fixed
$100
Investment
Based
On:
​​
 
​​
 
Year
​​
Summary
Compensation
Table
Total for
Cheng Lu
(in
millions)
($)
​​
Summary
Compensation
Table
Total for
Xiaodi Hou
(in
millions)
($)
​​
Summary
Compensation
Table
Total for
Ersin Yumer
(in
millions)
($)
​​
Compensation
Actually
Paid to
Cheng Lu
(in
millions)
($)
​​
Compensation
Actually
Paid to
Xiaodi Hou
(in
millions)
($)
​​
Compensation
Actually
Paid to
Ersin Yumer
(in
millions)
($)
​​
Average
Summary
Compensation
Table
Total
for
Non-
PEO
Named
Executive
Officers
(in
millions)
($)
​​
Average
Compensation
Actually
Paid
to
Non-
PEO
Named
Executive
Officers
(in
millions)
($)
​​
Total
Share
holder
Return
($)
​​
Peer
Group
Total
Share
holder
Return
($)
​​
Net
Income
(in
millions)
($)
​​
Stock
Price
(in
millions)
($)(6)
2022
​​
10.10
​​
0.40
​​
1.40
​​
(56.30)
​​
(9.20)
​​
(3.80)
​​
3.50
​​
(5.50)
​​
4.10
​​
87.66
​​
(472.00)
​​
1.64
2021
​​
66.80
​​
—
​​
—
​​
54.20
​​
—
​​
—
​​
11.90
​​
4.80
​​
89.63
​​
122.08
​​
(733.00)
​​
35.85
1.
Cheng Lu served as the PEO in 2021 and in 2022 from January 1st to March 3rd and again from November 10th to present. Mr. Hou served as PEO in 2022 from March 4th to October 30th. Mr. Yumer served as PEO in 2022 from October 31st through November 9th.
2.
The non-PEO NEOs in the 2021 reporting year are Xiaodi Hou, Patrick Dillon, and James Mullen. The non-PEO NEOs in the 2022 reporting year are Eric Tapia, Patrick Dillon, and James Mullen.
3.
Fiscal year 2021 reflects cumulative total shareholder return from April 15, 2021, the date of our initial public offering, through December 31, 2021.
4.
CAP is calculated by taking the Summary Compensation Table total compensation: a) 8.less
the stock award and stock option grant values; b) plus the year over year change in the fair value of stock and option awards that are unvested as of the end of the year, or vested or were forfeited during the year. The dollar amounts presented as CAP do not reflect the actual amount of compensation earned by or paid to the Company’s PEO and non-PEO NEOs during the applicable fiscal year.The Company has not paid dividends historically and does not sponsor any pension arrangements; thus no adjustments are made for these items. CAP is summarized in the following table:
 
​​
Cheng Lu (PEO)(i)(ii)
Fiscal Year
​​
2021
​​
2022
SCT Total Compensation
​​
$66,768,737
​​
$10,124,747
- Stock and Option Award Values Reported in SCT for the Covered Year
​​
65,998,500
​​
9,076,250
+ Fair Value of Outstanding Unvested Stock and Option Awards Granted in Covered Year
​​
47,073,713
​​
8,409,633
+ Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years
​​
(2,678,694)
​​
—
+ Fair Value of Stock and Option Awards Granted in Covered Year that Vested in Covered Year
​​
7,578,560
​​
—
+ Change in Fair Value of Stock and Option Awards from Prior Years that Vested in Covered Year
​​
1,431,363
​​
(13,479,920)
(+/-) Based Upon Incremental Fair Value of Awards Modified During Covered Year(iii)
​​
—
​​
—
- Fair Value of Stock and Option Awards Forfeited during the Covered Year
​​
—
​​
(52,301,474)
Compensation Actually Paid
​​
$54,175,180
​​
$(56,323,263)
Represents an award​​
Xiaodi Hou
(PEO)(i)(ii)
Fiscal Year
​​
2022
SCT Total Compensation
​​
$439,038
- Stock and Option Award Values Reported in SCT for the Covered Year
​​
—
+ Fair Value of Outstanding Unvested Stock and Option Awards Granted in Covered Year
​​
—
+ Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years
​​
(6,626,252)
+ Fair Value of Stock and Option Awards Granted in Covered Year that Vested
​​
—
+ Change in Fair Value of Stock and Option Awards from Prior Years that Vested in Covered Year
​​
(2,991,417)
- Fair Value of Stock and Option Awards Forfeited during the Covered Year
​​
—
Compensation Actually Paid
​​
$(9,178,630)
39

TABLE OF CONTENTS

​​
Ersin Yumer
(PEO)(i)(ii)
Fiscal Year
​​
2022
SCT Total Compensation
​​
$1,397,465
- Stock and Option Award Values Reported in SCT for the Covered Year
​​
616,829
+ Fair Value of Outstanding Unvested Stock and Option Awards Granted in Covered Year
​​
—
+ Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years
​​
—
+ Fair Value of Stock and Option Awards Granted in Covered Year that Vested
​​
5,595
+ Change in Fair Value of Stock and Option Awards from Prior Years that Vested in Covered Year
​​
(1,751,092)
- Fair Value of Stock and Option Awards Forfeited during the Covered Year
​​
(2,815,695)
Compensation Actually Paid
​​
$(3,780,556)
 
​​
Average Non-PEO NEOs(i)(ii)
Fiscal Year
​​
2021
​​
2022
SCT Total
​​
$11,865,088
​​
$3,491,309
- Stock and Option Award Values Reported in SCT for the Covered Year
​​
11,084,247
​​
2,755,267
+ Fair Value of Outstanding Unvested Stock and Option Awards Granted in Covered Year
​​
5,099,926
​​
66,536
+ Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years
​​
(675,891)
​​
(282,233)
+ Fair Value of Stock and Option Awards Granted in Covered Year that Vested
​​
—
​​
276,914
+ Change in Fair Value of Stock and Option Awards from Prior Years that Vested in Covered Year
​​
(374,570)
​​
(2,537,121)
- Fair Value of Stock and Option Awards Forfeited during the Covered Year
​​
—
​​
(3,797,511)
Compensation Actually Paid
​​
$4,830,306
​​
$(5,537,372)
i.
The fair value of performance share units used to calculate CAP was determined using a Monte Carlo simulation valuation model, in accordance with FASB ASC Topic 718.
ii.
The fair value of option awards used to calculate CAP was determined using the Black-Scholes option pricing model, in accordance with FASB ASC Topic 718.
iii.
In December 2022, Cheng Lu’s outstanding options were canceled and exchanged for a new grant of restricted stock units, granted, whereby50% of which vest solely on continued service with the time-based vesting requirement shall be satisfied in connection continuous service over four years, with 25%Company and 50% which vest based on achieving certain stock price hurdles. Each of the time-based vesting requirement becoming satisfied upon completion of one-year of service and 6.25%options had an exercise price in excess of the time-based vesting requirement becoming satisfied uponfair market value of the completionCompany’s Class A Common Stock as of each quarterthe date of service thereafter.the cancellation and exchange. The exchanged award was valued in accordance with FASB ASC Topic 718, and there was no incremental fair value that resulted from this option for restricted stock unit exchange.
9.5.
25%The peer group index is comprised of the options shall vestS&P 500 Information Technology Index, which is the industry line peer group reported in our 2022 Form 10-K and becomes exercisable when the grantee completes 12 months of continuous service as an employee or consultant (“Service”) after the Vesting Commencement Date. 12.5% of the options shall vest when the grantee completes each six months of continuous service thereafter.this Proxy Statement.
10.6.
First 25%We selected stock price as our company-selected measure because in fiscal year 2022, Cheng Lu was granted a market-based equity award that is earned based on achieving certain stock price hurdles, as further described in the Compensation Discussion and Analysis. Other than Cheng Lu’s market-based equity award, we do not use any financial performance measures (that is not otherwise required to be disclosed in the table) to link CAP to the NEOs to company performance. The stock price reported represents the closing price of a share of our Class A Common Stock as reported on NASDAQ on the last trading day of the RSUs subject to this award will vest when you complete 12 months of continuous service from the vesting commencement date, an additional 25% of the RSUs subject to this award will vest after 24 months from the vesting commencement date, an additional 25% of the RSUs subject to this award will vest 36 months from the vesting commencement date and the remaining 25% of the RSUs subject to this award will vest 48 months from the vesting commencement date period, provided that you remain in continuous service as an employee, consultant or outside director ("Service") through each such date.applicable fiscal year.
Most Important Metrics Used for Linking Pay and Performance
The Company's compensation decisions are made each year by taking into account a number of factors. Target pay levels are primarily set based on individual performance, scope of responsibility, and an annual assessment of pay competitiveness within the market. As discussed above, Cheng Lu was granted a market-based equity award in fiscal year 2022 that is earned based on achieving certain stock price hurdles. Other than Cheng Lu's award, no additional financial performance measures were used by the Company to link CAP to our NEOs in fiscal year 2022 to our performance. Accordingly, the Company has not listed any financial performance measures used by the Company to link CAP to the Company’s non-PEO NEOs, and the Company’s list of most important financial performance measures used by the Company to link CAP to the Company’s CEO, Cheng Lu, for the most recently completed fiscal year is as follows:
11.
Represents an award of restricted stock units granted, whereby the time-based vesting requirement shall be satisfied in connection with continuous service over a four-year period with 25% of the RSUs vesting upon completion of one-year of service and 12.5% of the RSUs vesting every six-months thereafter, provided that the grantee remains in continuous service on each such vesting date​​
Most Important Performance Measures
​​
Stock Price
2640

TABLE OF CONTENTS

Relationship between CAP and TSR
The graph below reflects the relationship between the current and former PEOs and average non-PEO NEO CAP, the Company’s cumulative indexed TSR and S&P Information Technology Index:


Relationship between CAP and Stock Price
The graph below reflects the relationship between the current and former PEOs and average non-PEO NEO CAP and the Company’s closing stock price of our Class A Common Stock on the last trading day for the applicable reporting year.


41

TABLE OF CONTENTS

Relationship between CAP and Net Income (GAAP)
The graph below reflects the relationship between the current and former PEOs and average non-PEO NEO CAP and the Company’s GAAP Net Income for the applicable reporting year.

42

TABLE OF CONTENTS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides certain information as of December 31, 2022 with respect to our existing equity compensation plans.
Plan Category
​​
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants, and
Rights
(#)
​​
Weighted
Average
Exercise Price of
Outstanding
Options,
Warrants, and
Rights(2)
($)
​​
Number of
Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation
Plans(3)
(#)
Equity compensation plans approved by stockholders(1)
​​
20,602,012
​​
15.16
​​
18,041,005
Equity compensation plans not approved by stockholders
​​
—
​​
—
​​
—
Total
​​
20,602,012
​​
15.16
​​
18,041,005
1.
All of our equity compensation plans have been approved by stockholders. This information is with respect to the 2017 Share Plan, the 2021 Equity Incentive Plan, and the 2021 Employee Stock Purchase Plan. The 2021 Equity Incentive Plan is the successor to and continuation of the 2017 Share Plan. As of the effective date of our initial public offering, no additional awards were to be granted under the 2017 Share Plan, but all stock awards granted under the 2017 Share Plan remain subject to their existing terms.
2.
The weighted average exercise price does not take into account outstanding RSUs or share value awards, neither of which have exercise prices.
3.
Included in this amount are: 16,277,422 shares available for future issuance under our 2021 Equity Incentive Plan and 1,763,583 shares available for future issuance under our 2021 Employee Stock Purchase Plan. No shares are available for issuance under our 2017 Share Plan.
Securities Ownership of Certain Beneficial Owners and Management
The table below sets forth certain information with respect to the beneficial ownership of our Class A Common Stock as of April 12, 2022,October 20, 2023, for:
each of our named executive officers;
each of our directors;
all of our executive officers and directors as a group; and
each stockholder known by us to be the beneficial owner of more than 5% of our outstanding Class A Common Stock or Class A Common Stock.
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she, or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days and shares of Class A Common Stock underlying restricted stock units that may be settled within 60 days of April 12, 2022.October 20, 2023.
The percentage ownership columns in the table is based on 199,024,672205,890,683 shares of our Class A Common Stock outstanding and 24,000,000 shares of our Class B Common Stock outstanding as of April 12, 2022.October 20, 2023. The holders of our Class A Common Stock have the right to one vote for each share of Class A Common Stock, they held as of the Record Date, and the holders of our Class B Common Stock have the right to ten votes for each share of Class B Common Stock they held as of the Record DateStock.
We have determined beneficial ownership in accordance with the rules and regulations of the SEC. Except as indicated in the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all Class A Common Stock or Class B Common Stock that they beneficially own, subject to applicable community property laws.
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Unless otherwise indicated, the business address of each beneficial owner listed in the table below is 9191 Towne Centre Drive, Suite 600,150, San Diego, CA 92122.
Name of Beneficial Owner
​​
Number of Shares
of Class A Common
Stock
​​
%
​​
Number of Shares
of Class B Common
Stock
​​
%
​​
% of Total
Voting Power
Named Executive Officers and Directors:
​​
 
​​
 
​​
 
​​
 
​​
 
Xiaodi Hou(1)
​​
13,367,314
​​
6.4%
​​
12,000,000
​​
50%
​​
30.4%
Patrick Dillon(2)
​​
142,878
​​
*
​​
—
​​
—
​​
*
James Mullen(3)
​​
148,739
​​
*
​​
—
​​
—
​​
*
Brad Buss(4)
​​
262,243
​​
*
​​
—
​​
—
​​
*
Mo Chen(5)
​​
6,367,314
​​
3.0%
​​
12,000,000
​​
50%
​​
28.8%
Karen Francis(6)
​​
142,502
​​
*
​​
—
​​
—
​​
*
Michelle M. Sterling(7)
​​
3,750
​​
*
​​
—
​​
—
​​
*
Charles Chao(8)
​​
24,676,708
​​
12.4%
​​
—
​​
—
​​
5.6%
Bonnie Yi Zhang(9)
​​
—
​​
—
​​
—
​​
—
​​
—
Reed B. Werner
​​
—
​​
—
​​
—
​​
—
​​
—
Cheng Lu(10)
​​
3,884,578
​​
1.9%
​​
—
​​
—
​​
*
All Executive Officers and Directors as a Group (11 persons)(11)
​​
45,169,698
​​
20.2%
​​
24,000,000
​​
100%
​​
65.0%
5% Stockholders:
​​
 
​​
 
​​
 
​​
 
​​
 
Sun Dream Inc.(12)
​​
24,676,708
​​
12.4%
​​
—
​​
—
​​
5.6%
TRATON SE(13)
​​
15,782,220
​​
7.9%
​​
—
​​
—
​​
3.6%
Name of Beneficial Owner
​​
Number of Shares
of Class A Common
Stock
​​
%
​​
Number of Shares
of Class B Common
Stock
​​
%
​​
% of Total
Voting Power
Named Executive Officers and Directors:
​​
 
​​
 
​​
 
​​
 
​​
 
Cheng Lu, CEO(1)
​​
3,475,828
​​
1.7%
​​
—
​​
—
​​
*
Eric Tapia, CFO(2)
​​
114,265
​​
*
​​
—
​​
—
​​
*
Xiaodi Hou, former CEO(3)
​​
13,442,314
​​
6.5%
​​
12,000,000
​​
50%
​​
30.0%
Ersin Yumer, former CEO(4)
​​
39,248
​​
*
​​
—
​​
—
​​
*
Patrick Dillon, former CFO(5)
​​
195,219
​​
*
​​
—
​​
—
​​
*
James Mullen, former CALO(6)
​​
295,947
​​
*
​​
—
​​
—
​​
*
Mo Chen, Executive Chairman(7)
​​
19,734,628
​​
9.6%
​​
24,000,000
​​
100%
​​
58.3%
Wendy Hayes(8)
​​
156,250
​​
—
​​
—
​​
—
​​
—
James Lu(9)
​​
156,250
​​
—
​​
—
​​
—
​​
—
Michael Mosier
​​
—
​​
—
​​
—
​​
—
​​
—
Tyler McGaughey
​​
 
​​
—
​​
—
​​
—
​​
—
Zhen Tao(10)
​​
156,250
​​
—
​​
—
​​
—
​​
—
All Executive Officers and Directors as a Group (8 persons)(11)
​​
24,323,885
​​
11.8%
​​
24,000,000
​​
100%
​​
59.3%
5% Stockholders:
​​
 
​​
 
​​
 
​​
 
​​
 
Sun Dream Inc.(12)
​​
24,676,708
​​
12.0%
​​
—
​​
—
​​
5.5%
TRATON SE(13)
​​
15,782,220
​​
7.7%
​​
—
​​
—
​​
3.6%
The Vanguard Group(14)
​​
12,816,129
​​
6.3%
​​
—
​​
—
​​
2.9%
BlackRock, Inc.(15)
​​
11,646,102
​​
5.7%
​​
—
​​
—
​​
2.6%
*
Less than 1 percent.
(1)1.
Consists of: (i) 1,719,578 shares of Class A Common Stock held by Cheng Lu, (ii) 900,000 shares of Class A Common Stock held by Hickory Wood Grove LLC, a limited liability company incorporated in Delaware and beneficially owned by the Lu Family Descendants Trust, and (iii) 856,250 RSUs which will vest within 60 days of October 20, 2023.
2.
Consists of: (i) 46,116 shares of Class A Common Stock held by Mr. Tapia, (ii) 46,274 vested RSUs held by Mr. Tapia, and (iii) 21,875 RSUs by held Mr. Tapia which will vest within 60 days of October 20, 2023.
3.
Consists of: (i) 75,000 shares of Class A Common Stock held by Mr. Hou, (ii) 13,367,314 shares of Class A Common Stock held by White Marble LLC, a limited liability company organized in Delaware and beneficially owned by Mr. Hou, (ii)(iii) 12,000,000 shares of Class B Common Stock held by White Marble International Limited, a company incorporated in Samoa and beneficially owned by Mr. Hou (iii) 400,000 sharesHou. The registered address of White Marble International Limited is Sertus Chambers, P.O. Box 603, Apia, Samoa. The Class A Common Stock underlying stock optionsbeneficially owned does not include the shares issuable upon conversion of the Class B Common Stock.
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that are exercisable within 60 days of the Record Date and (iv) 200,000 shares of Class A Common Stock underlying restricted stock units that will be vested within 60 days of the Record Date. The registered address of White Marble International Limited is Sertus Chambers, P.O. Box 603, Apia, Samoa. The Class A Common Stock beneficially owned does not include the shares issuable upon conversion of the Class B Common Stock.
(2)4.
Consists of (i) 12,253 shares of Class A Common Stock, (ii) 21,250 shares of Class A Common Stock underlying restricted stock units that will be vested within 60 days of the Record Date and (iii) 109,375 shares of Class A Common Stock underlying stock options that are exercisable within 60 days of the Record Date.
(3)
Consists of 8,739 shares of Class A Common Stock, (ii) 46,250 shares of Class A Common Stock underlying restricted stock units that will be vested within 60 days of the Record Date and (iii) 93,750 shares of Class A Common Stock underlying stock options that are exercisable within 60 days of the Record Date.
(4)
Consists of (i) 42,68039,248 shares of Class A Common Stock held by Mr. Buss, (ii) 141,441Yumer. Mr. Yumer left the Company in November 2022.
5.
Consists of: (i) 17,049 shares of Class A Common Stock held byreported in Form 4 dated June 17, 2022, which was filed on behalf of Mr. Dillon, (ii) distribution of 1,621 vested RSUs in September 2022 and 18,424 vested RSUs in October 2022 for which the 2011 Buss Family Trust,vesting was accelerated according to the separation agreement between the Company and Mr. Dillon, and (iii) 141,442158,125 shares of options vested but unexercised as of October 20, 2023, the exercise period of which options was extended to October 17, 2024, according to the separation agreement between the Company and Mr. Dillon. Mr. Dillon left the Company in July 2022, after which the Company no longer has access to track his stock activities.
6.
Consists of: (i) 43,432 shares of Class A Common Stock held byreported in Form 4 dated September 19, 2022, which was filed on behalf of Mr. Mullen, (ii) distribution of 65,015 vested RSUs for which the Buss Family Heritage Trust, (iv) 60,000 shares underlying a stock optionvesting was accelerated according to purchasethe separation agreement between the Company and Mr. Mullen, and (iii) 187,500 shares of Class A Common Stock exercisable within 60 daysoptions vested but unexercised as of October 20, 2023, the Record Dateexercise period of which options was extended to September 30, 2024 according to the separation agreement between the Company and (v) 17,680 shares of Class A Common Stock underlying restrictedMr. Dillon. Mr. Mullen left the Company in September 2022, after which the Company no longer has access to track his stock units that will be vested within 60 days of the Record Date. The registered address of the 2011 Buss Family Trust and the Buss Family Heritage Trust is c/o Brad Buss, 9191 Towne Centre Drive, Suite 600, San Diego, CA 92122.activities.
(5)7.
Consists ofof: (i) 12,000,000 shares of Class B common stockCommon Stock held by Gray Jade Holding Limited, a company incorporated in British Virgin Islands and beneficiallywholly owned by Mo Chen LLC, a limited liability company organized in Delaware, which is wholly owned by The Chen Family Trust having Mr. Chen as its trustee, (ii) 75,000 shares of Class A common stockCommon Stock held by THC International Limited, a company incorporated in British Virgin Islands and beneficially owned by Mr. Mo Chen, and(iii) 6,292,314 shares of Class A common stockCommon Stock held by Brown Jade Holding Limited, a company incorporated in British Virgin Islands and beneficially owned by Mr. Chen.Chen, (iv) 13,367,314 shares of Class A Common Stock held by White Marble LLC, and (v) 12,000,000 shares of Class B Common Stock held by White Marble International Limited. The registered address of Gray Jade Holdings Limited is Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands. The registered address of THC International Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. The registered address of Brown Jade Holding Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. As described above in the section captioned “Voting Agreement,” by virtue of the Proxy and the Voting Agreement,
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Mr. Chen has shared voting power over 13,367,314 shares of Class A Common Stock held by White Marble LLC and 12,000,000 shares of Class B Common Stock held by White Marble International Limited. The Class A Common Stock beneficially owned does not include the shares issuable upon conversion of the shares of the Class B Common Stock.
8.
156.250 RSUs by held Mrs. Hayes which will vest within 60 days of October 20, 2023.
9.
156.250 RSUs by held Mr. James Lu which will vest within 60 days of October 20, 2023.
10.
156.250 RSUs by held Mrs. Tao which will vest within 60 days of October 20, 2023.
11.
Consists of: (i) 36,027,425 shares of Class A Common Stock, (ii) 1,346,875 RSUs that vest within 60 days of October 20, 2023, and (ii) 24,000,000 shares of Class B Common Stock.
(6)
Consists of (i) 84,822 shares of Class A Common Stock held by Ms. Francis, (ii) 20,000 shares of Class A Common Stock held by the Karen C. Francis Second Restated Revocable Trust dated 1.30.2012, (iii) 20,000 shares of Class A Common Stock held by the Richard C. DeGolia Trust dated 8.27.2004, and (iv) 17,680 shares of Class A Common Stock underlying restricted stock units that will be vested within 60 days of the Record Date. The registered address of the Karen C. Francis Second Restated Revocable Trust dated 1.30.2012 is c/o Karen Francis, 9191 Towne Centre Drive, Suite 600, San Diego, CA 92122. The registered address of the Richard C. DeGolia Trust dated 8.27.2004 is c/o Karen Francis, 9191 Towne Centre Drive, Suite 600, San Diego, CA 92122.
(7)
Consists of (i) 1,250 shares of Class A Common Stock held by Ms. Sterling and (ii) 2,500 shares of Class A Common Stock underlying restricted units that will be vested within 60 days of the Record Date.
(8)
Consists of 24,676,708 shares of Class A Common Stock held by Sun Dream Inc. Sun Dream Inc is ultimately controlled by Mr. Charles Chao.
(9)
Ms. Zhang does not beneficially own any shares of Class A Common Stock or Class B Common Stock.
(10)
Consists of (i) 1,719,578 shares of Class A Common Stock held by Mr. Lu, (ii) 900,000 shares of Class A Common Stock held by Hickory Wood Grove LLC, a limited liability company incorporated in Delaware and beneficially owned by the Lu Family Descendants Trust, (iii) 440,000 shares of Class A Common Stock underlying stock options exercisable within 60 days of the Record Date and (iv) 825,000 shares of Class A Common Stock underlying restricted stock units that will vest within 60 days of the Record Date. The registered address of Hickory Wood Grove LLC is 20 Montchanin Road, Greenville, DE 19807.
(11)
Consists of (i) 44,742,963 shares of Class A Common Stock, (ii) 24,000,000 shares of Class B Common Stock, (iii) 163,610 shares of Class A Common Stock underlying restricted stock units that will be vested within 60 days of the Record Date, and (iv) 263,125 shares of Class A Common Stock underlying stock options exercisable within 60 days of the Record Date. Does not include shares beneficially owned by Mr. Lu.
(12)12.
Based solely on the Schedule 13G filed by the stockholder with the SEC on February 14, 2022, consists of 24,676,708 shares of Class A Common Stock held by Sun Dream Inc. Sun Dream IncInc. has sole voting and dispositive power with respect to 24,676,708 shares. Sun Dream Inc. is ultimately controlled by Mr. Charles Chao. The registered address of Sun Dream Inc is P. O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1—1205KY1-1205, Cayman Islands.
(13)13.
Based solely on the Schedule 13G filed by the stockholder with the SEC on February 14, 2022,July 1, 2021, consists of 15,782,220 shares of Class A Common Stock. TRATON SE has shared voting and dispositive power with respect to 15,782,220 shares. Immediately following the consummation of the transactions contemplated by that certain Agreement and Plan of Merger dated November 7, 2020, by and among Navistar International Corporation, TRATON SE, and Dusk Inc., a Delaware corporation and wholly owned subsidiary of TRATON SE, on July 1, 2021, each of (i) TRATON SE, (ii) Volkswagen Aktiengesellschaft, (iii) TRATON International S.A., (iv) Navistar International Corporation, (v) Navistar, Inc., (vi) International of Mexico Holding Corporation (IMHC), and (vii) International Truck and Engine Corporation Cayman Islands Holding Company may have been deemed to share beneficial ownership in some or all of such securities.
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EQUITY COMPENSATION PLAN INFORMATION
The following table provides certain information as of December 31, 2021 with respect to our existing equity compensation plans.
Plan Category
​​
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants and
Rights
​​
Weighted
Average
Exercise
Price of
Outstanding
Options,
Warrants and
Rights(2)
​​
Number of
Securities
Remaining
Available
for Future
Issuance
Under Equity
Compensation
Plans(3)
Equity compensation plans approved by stockholders(1)
​​
13,965,738
​​
$12.91
​​
15,429,401
Equity compensation plans not approved by stockholders
​​
—
​​
—
​​
—
Total
​​
13,965,738
​​
$12.91
​​
15,429,401
(1)14.
Included in this amount are noBased solely on the Schedule 13G filed by the stockholder with the SEC on February 9, 2023, The Vanguard Group has shared voting power with respect to 76,904 shares, available for future issuance under our 2017 Share Plan, 13,415,987sole dispositive power with respect to 12,648,885 shares available for future issuance under our 2021 Equity Incentive Plan, and 2,013,414 shares available for future issuance under our 2021 Employee Stock Purchase Plan.shared dispositive power with respect to 167,244 shares. The business address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.
(2)15.
The weighted average exercise price does not take into account outstanding RSUs or share value awards, neither of which have exercise prices.
(3)
All of our equity compensation plans have been approvedBased solely on the Schedule 13G filed by stockholders. This information isthe stockholder with the SEC on February 3, 2023, BlackRock, Inc. has sole voting power with respect to the 2017 Share Plan (the “2017 Plan”), the 2021 Equity Incentive Plan (the “2021 Plan”)11,393,298 shares and the 2021 Employee Stock Purchase Plan (the “2021 ESPP”).sole dispositive power with respect to 11,646,102 shares. The 2021 Planbusiness address of BlackRock, Inc. is the successor to and continuation of the 2017 Plan. As of the effective date of our initial public offering, no additional awards were to be granted under the 2017 Plan, but all stock awards granted under the 2017 Plan remain subject to their existing terms.55 East 52nd Street, New York, NY 10055.
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Policies and Procedures for Related Party Transactions
We have adopted a written related party transaction policy. TheThis policy provides that our executive officers, directors, holders of more than 5% of any class of our voting securities, and any member of the immediate family of and any entity affiliated with any of the foregoing persons, will not be permitted to enter into a related-partyrelated party transaction with us without the prior consent of our audit committee,Audit Committee, or other independent members of our board of directorsBoard in the event it is inappropriate for our audit committeeAudit Committee to review such transaction due to a conflict of interest. Any request for us to enter into a transaction with an executive officer, director, principal stockholder, or any of their immediate family members or affiliates, in which the amount involved exceeds $120,000, must first be presented to our audit committeeAudit Committee for review, consideration, and approval. In approving or rejecting the proposed transactions, our audit committeeAudit Committee will take into account all of the relevant facts and circumstances available.
Although we did not have a written policy for the review and approval of transactions with related persons before our initial public offering in April 2021, our board of directors historically reviewed and approved any transaction where a director or officer had a financial interest. Prior to approving such a transaction, the material facts as to a director’s or officer’s relationship or interest in the agreement or transaction were disclosed to our board of directors. Our board of directors took this information into account when evaluating the transaction and in determining whether such transaction was fair to us and in the best interest of all our stockholders.
Certain Related Party Transactions
In addition to the compensation arrangements with directors and named executive officers described elsewhere in this proxy statement,report, the following is a description of each transaction since January 1, 20212022 and each currently proposed transaction in which:
we have been or are to be a participant;
the amount involved exceeded or exceeds $120,000; and
any of our directors, executive officers, or holders of more than 5% of our share capital, or any immediate family member of, or person sharing the household with, any of these individuals, had or will have a direct or indirect material interest.
Sale of Series E Redeemable Convertible Preferred Stock
In December 2020 and January 2021, we sold an aggregate of 25,695,018 shares of Series E redeemable convertible preferred stock at a purchase price of $14.1401 per share to accredited investors for an aggregate purchase price of $363.3 million. Each share of Series E redeemable convertible preferred stock converted automatically into one share of Class A Common Stock immediately prior to the completion of our initial public offering.
The following table summarizes purchases of our Series E redeemable convertible preferred stock by our directors and holders of more than 5% of our share capital.
 
​​
Series E Redeemable
Convertible Preferred Shares
Purchaser
​​
Number
of Shares
​​
Aggregate
Gross
Consideration
($)
Trust affiliated with Brad Buss(1)
​​
282,883
​​
$4,000,000
Trust affiliated with Karen C. Francis(2)
​​
40,000
​​
$565,604
Total
​​
322,883
​​
$4,565,604
(1)
A trust affiliated with Brad Buss, our director, purchased shares of our Series E redeemable convertible preferred stock.
(2)
Trusts affiliated with Karen C. Francis, our director, purchased shares of our Series E redeemable convertible preferred stock.
Amended and Restated Stockholders’Stockholders' Agreement
We entered into a stockholders agreement with our stockholders, including entities with which certain of our directors are affiliated.stockholders. These stockholders are entitled to rights with respect to the registration of their shares following our initial public offering under the Securities Act.
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Indemnification Agreements
Our amended and restated certificate of incorporation contains provisions limiting the liability of directors and provides that we will indemnify each of our directors to the fullest extent permitted under Delaware law. Our amended and restated certificate of incorporation also provides our board of directorsBoard with discretion to indemnify our officers and employees when determined appropriate by our board of directors.Board.
We have entered into indemnification agreements with each of our directors and executive officers and certain other key employees. The indemnification agreements provide that we will indemnify each of our directors, executive officers, and such other key employees against any and all expenses incurred by that director, executive officer, or other key employee because of his or her status as one of our directors, executive officers, or other key employees, to the fullest extent permitted by Delaware law and our amended and restated certificate of incorporation. In addition, the indemnification agreements provide that, to the fullest extent permitted by Delaware law, we will advance all expenses incurred by our directors, executive officers, and other key employees in connection with a legal proceeding involving his or her status as a director, executive officer, or key employee.
Concurrent Private Placement
Classic Elite Limited and entities affiliated with Perry Creek Capital Partners agreed to purchase up to $35.0 million of shares of our Class A Common Stock in a private placement at a price per share equal to our initial public offering price. Based on the initial public offering price of $40.00 per share, this equaled 874,999 shares. We received the full proceeds and did not pay any underwriting discounts or commissions with respect to the shares that were sold in the private placement. The shares purchased in the private placement were subject to a lock-up agreement with the underwriters for a period of up to 121 days after the date of our initial public offering. This transaction was contingent upon, and closed concurrently with, the closing of our initial public offering.
Other Transactions
In connection with our initial public offering, we entered into exchange agreements with our co-founders Mo Chen and Xiaodi Hou, pursuant to which 24,000,000 shares of our Class A Common Stock held by such co-founders, or entities controlled by our founders, were automatically exchanged for an equivalent number of shares of Class B Common Stock immediately prior to the completion of our initial public offering.
Joint Development Agreement
In July 2020, the Company entered into a Joint Development Agreement (“JDA”) with Navistar, Inc. (“Navistar”), which is now a subsidiary of TRATON SE, under which the parties willagreed to work collaboratively to develop a purpose-built L4 autonomous semi-truck. Under the JDA, the parties grantgranted each other rights to their
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background intellectual property to permit them to conduct research and development activities. Pursuant to the JDA, we agreeagreed to reimburse Navistar up to $10.0 million for research and development expenses incurred. PaymentOn December 5, 2022, the Company and Navistar jointly announced an end to the co-development and the JDA.
Internal Investigation / Related Party Transaction
As previously disclosed, based on information obtained in connection with an ongoing internal investigation by our Audit Committee, during 2021, Company employees spent paid hours working on matters for Hydron Inc. (“Hydron”) and such paid hours had an estimated value of reimbursements is deferred to alignless than $300,000. We also believe that, during 2022, in connection with our evaluation of Hydron as a potential OEM partner, we shared confidential information with Hydron and its partners before entering into relevant non-disclosure and other cooperation agreements. After the achievement of certain milestones and reimbursements due are recorded within accrued expenses in our consolidated balance sheets. All reimbursements are expected to be paid within 12 monthsinformation was disclosed, we entered into a non-disclosure agreement with Hydron that covered the information. Mr. Chen, one of our incurringco-founders and current Executive Chairperson, is a founder, director, and chief executive officer of Hydron and he has an equity interest in us of greater than 10%. This related party transaction and the obligation. Upon successful completionevaluation of the development activities under the JDA, the parties will enter into good faith negotiations forHydron as a production license agreement. Products developed will be jointly commercializedpotential OEM partner was not presented to, or approved by, the parties.Audit Committee as required by Company policies.
AsOur internal review regarding the information shared is ongoing and, based upon the facts from the review to date, we believe that the information shared was not source code, was not the confidential information of December 31, 2021, expenses incurred by Navistar for reimbursement under the JDAour partners or suppliers and was consistent with information we normally share with our vendors. We are $10.0 million of which we paid approximately $2.8 million in 2021.not currently partnering with, or party to any agreement with Hydron.
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AUDIT COMMITTEE REPORT
The information contained in the following report of TuSimple’s audit committee is not considered to be “soliciting material,” “filed” or incorporated by reference in any past or future filing by us under the Securities Exchange Act of 1934 or the Securities Act of 1933 unless and only to the extent that TuSimple specifically incorporates it by reference.
The audit committee has reviewed and discussed with TuSimple’s management and KPMG LLP the audited consolidated financial statements of TuSimple for the year ended December 31, 2021. The audit committee has also discussed with KPMG LLP the matters required to be discussed by applicable requirements of the Public Company Accounting Oversight Board regarding communications between our independent registered public accounting firm and audit committee.
The audit committee has received and reviewed the written disclosures and the letter from KPMG LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with KPMG LLP its independence from us.
Based on the review and discussions referred to above, the audit committee recommended to the board of directors that the audited consolidated financial statements be included in TuSimple’s annual report on Form 10-K for the year ended December 31, 2021 for filing with the Securities and Exchange Commission.
Submitted by the audit committee of the board of directors
Karen C. Francis
Brad Buss
Bonnie Yi Zhang
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OTHER MATTERS
We know of no other matters to be submitted at the Annual Meeting. If any other matters properly come before the Annual Meeting, it is the intention of the persons named in the proxy card to vote the shares they represent as TuSimple may recommend.
It is important that your shares be represented at the Annual Meeting, regardless of the number of shares that you hold. You are, therefore, urged to vote at your earliest convenience on the Internet or by telephone as instructed, or by executing and returning a proxy card, if you have requested one, in the envelope provided.
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TUSIMPLE HOLDINGS INC.

Annual Meeting of Stockholders December 13, 2023 8:00 a.m. Pacific Time

This proxy is solicited by the Board of Directors
The stockholder(s) hereby appoint(s) Cheng Lu and Eric Tapia, or any of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of TuSimple Holdings Inc. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 8:00 a.m., Pacific Time, on December 13, 2023, and any adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO SUCH DIRECTION IS MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
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