Source: Tencent Technology Compiled by Jinlu

On June 26, according to foreign media reports, Wednesday local time in the US (early Thursday morning Beijing time)$NVIDIA (NVDA.US)$The 2024 Annual General Meeting of Shareholders will be held, at which time investors will vote on important matters such as executive remuneration and the re-election of board members. However, analysts expect that Nvidia is unlikely to release significant news at this conference, but it may take the opportunity to demonstrate the advantages of its artificial intelligence technology.

How much will Wong In-hoon's salary increase in FY2025?

Investors will vote on compensation plans for company executives, including Wong In-hoon and Chief Financial Officer Colette Kress (Colette Kress), in Nvidia's annual “right to speak” vote. As Nvidia's valuation soars in the age of artificial intelligence, this non-binding vote may become an important weather vane for measuring the value of the company's leadership.

Nvidia's executive compensation structure is closely linked to performance. Among them, CEO Hwang In-hoon's salary comes from stock rewards. As a result, along with the rapid increase in the company's stock price, Hwang In-hoon's salary also soared.

According to the financial report released by Nvidia, Hwang In-hoon's total salary for the 2024 fiscal year reached 34.2 million US dollars, an increase of nearly 60% compared to the 2023 fiscal year. Recently, Hwang In-hoon also submitted documents to the US Securities and Exchange Commission (SEC), which records show that he sold shares worth approximately $95 million.

However, the shares sold this time account for only a small portion of the shares held by Huang Renxun. His personal account, partnership, and trust company held a total of 866.7 million Nvidia shares.

Among Nvidia executives, Hwang In-hoon's salary was at the top of the list, followed by Ajay Puri (Ajay Puri), the company's executive vice president of global business operations, and Cress, the chief financial officer. Their total compensation exceeds $13 million.

It's worth mentioning that just a few weeks before Nvidia's shareholders' vote, Tesla shareholders approved CEO Elon Musk's nearly $56 billion compensation package.

Re-election of 12 board members

Shareholders will also vote to decide whether to re-elect the 12 current directors, including Huang Renxun, to the company's board of directors.

Current directors Mark Perry (Mark Perry) and Michael McCaffery (Michael McCaffery) have served as directors of the company since 2005 and 2015, respectively, but they have decided not to seek re-election, which will reduce the number of board members to 12.

Additionally, investors will also vote on whether to continue to appoint PricewaterhouseCoopers as the company's independent certified public accounting firm in fiscal year 2025. Since 2004, PwC has been providing an annual audit service for Nvidia's financial statements.

Analysts don't expect any big news to be released

Although Nvidia may not be announcing any major news at this annual conference, the event certainly provided an excellent platform for Hwang In-hoon and other company leaders to highlight chipmakers' earnings and demonstrate long-term growth prospects in the AI wave.

Angelo Zino (Angelo Zino), a stock analyst at independent investment research firm CFRA, stated that he “does not expect this shareholders' meeting to bring about a major announcement or have a significant impact on stock prices.” He added that Nvidia “may have some high-level comments on artificial intelligence and its existing products, but investors shouldn't expect too much new content.”

Don Montanaro (Don Montanaro), president of Firstrade, an online brokerage firm serving retail investors, observed an increase in stock trading activity prior to the conference. Montanaro said, “Our clients are generally optimistic about Nvidia, and most of them choose to maintain or increase their holdings. Most of these customers are die-hard fans of Nvidia, and more specifically, strong supporters of artificial intelligence theory.”

Nvidia faces major challenges in the future

Currently, cloud computing giants and large enterprises are snapping up Nvidia chips to meet the growth and efficiency opportunities brought about by artificial intelligence technology. Almost every company is experimenting with artificial intelligence to explore its potential and applications. However, although current artificial intelligence experiments are viewed as “imperative,” it is unclear whether these large-scale investments will bring corresponding benefits in the future.

There are already signs that artificial intelligence is not working as expected for many companies. McDonald's, for example, recently cancelled its AI-driven “Drive-Thru” program and re-hired human employees. Similarly, BenLabs, a venture capital firm backed by Bill Gates, failed after trying to transform into an artificial intelligence software as a service company and had to lay off its CEO.

According to the second annual artificial intelligence research report published by software company Lucidworks, only 63% of the companies surveyed plan to increase spending on artificial intelligence projects this year, which is a significant drop compared to 93% last year. Lucidworks said the change stems from many companies that have yet to see a return on large-scale AI investments. Furthermore, concerns about costs, accuracy based on big language models, and data security have all risen significantly compared to last year.

That doesn't mean artificial intelligence is a building block in the air. In fact, many companies continue to invest in new technology, even if they don't increase spending beyond pilot projects. Ultimately, as technology continues to advance, artificial intelligence may bring more benefits. However, given that Nvidia's share price is almost entirely based on its growth expectations, the slowing investment could pose a significant risk to Nvidia.

Furthermore, Nvidia does not directly produce chips, but instead focuses on chip design, and its production process is outsourced to TSMC. However, TSMC's leading position in cutting-edge chip manufacturing is not stable. Although TSMC surpassed Intel about 10 years ago, Intel is making ambitious plans to reclaim its leading position in process technology by next year.

Meanwhile, Nvidia's parallel processing GPU technology is the cornerstone of its success. However, Intel is no slouch, launching an artificial intelligence accelerator chip called Gaudi and plans to integrate it into the new Falcon Shores artificial intelligence chip platform, which is expected to be launched by the end of next year. Additionally, Intel's new foundry will be opened to third parties, possibly producing artificial intelligence accelerators designed by other cloud computing giants. For example, Microsoft announced in February this year that it will become an Intel OEM customer.

Even if another company takes the lead in chip manufacturing from TSMC, Nvidia has a unique strategy to maintain customer loyalty to its chips. This is the CUDA software platform, which has been developed by Nvidia since 2006 and is now the preferred tool for developers to program graphics chips for parallel processing. However, CUDA is a closed system, and with Nvidia's high chip prices, the tech community is eager to see an open source and neutral platform compatible with the development of various types of chips. In this regard, Intel and Nvidia's competitor AMD are both actively developing their own open source artificial intelligence programming software.

At 00:00 on June 27, Beijing time, Nvidia's 2024 Annual General Meeting of Shareholders will be held. Friends are welcome to make an appointment to watch.

edit/lambor