DEF 14A of Kulicke & Soffa Industries Inc, Jan 22, 2024

DEF 14A of Kulicke & Soffa Industries Inc

Filed Jan 22, 2024 · FY20230000056978-24-000024

Open on EDGAR

  1. ITEM 1 — ELECTION OF DIRECTORS

    ITEM 1 — ELECTION OF DIRECTORS The board of directors has nominated Mr. David Jeffrey Richardson and Ms. Mui Sung Yeo for re-election at the annual meeting to serve until the 2028 annual meeting and until their successors have been duly elected and qualified. Shareholders have the right to cumulate votes in the election of directors (i.e. each shareholder may multiply the number of votes the shareholder is entitled to cast by the total number of directors to be elected and then may cast that number of votes for one candidate or distribute them among some or all candidates). By signing the proxy card, authority is given to the persons named as proxies to cumulate votes in their discretion. Shareholders, however, can withhold discretionary authority to cumulate votes on the proxy card or cumulate votes for any director by indicating so on the proxy card. If either Mr. Richardson or Ms. Yeo is unable to serve as director at the time of the election, the persons named as proxies in the proxy may vote the proxies for any other individual (or individuals, as applicable) as they may choose, unless the board of directors determines that no director should be elected at the annual meeting. The following table provides information concerning Mr. Richardson and Ms. Yeo, as well as the other directors of the Company and the executive officers of the Company. In addition to the information presented below regarding each director’s and director nominee’s specific experience, qualifications, attributes and skills that led the Company to conclude that he or she should serve as a director, we also believe that all of our directors, including Mr. Richardson and Ms. Yeo, have significant leadership experience derived from their professional experience and have a reputation for integrity and honesty and adhere to high ethical standards. The process undertaken by the Company’s Nominating and Governance Committee in recommending qualified director candidates is described below under the header “Nominating and Governance Committee” on page 54. Unless otherwise specified, the directors have held the positions indicated (including directorships) for at least five years. Each person below has an address of c/o the Company at 23A Serangoon North Avenue 5, #01-01, Singapore 554369.

  2. ITEM 1 — ELECTION OF DIRECTORS

    | Name, Age and Occupation | Director Since | Term Expires | | Directors Nominated for Re-Election | | | | David Jeffrey Richardson (59) | 2020 | 2028 | | Mr. Richardson was appointed to the board of directors on May 29, 2020. He has been a private investor and business development consultant since May 2014. Previously, Mr. Richardson served in various roles at LSI Corporation, an Avago Technologies Company, from June 2005 until May 2014 . Most recently, he served as Executive Vice President and Chief Operating Officer from 2011 until 2014. Mr. Richardson previously served as Executive Vice President and General Manager, Semiconductor Solutions Group; Executive Vice President and General Manager, Networking and Storage Products Group; Executive Vice President and General Manager, Custom Solutions Group; and Executive Vice President Corporate Planning and Strategy at LSI Corporation. From 1992 until 2005, Mr. Richardson was with Intel Corporation, where he held several positions, including Vice President and General Manager, Servers Platform Group. Mr. Richardson currently serves as Chairman of the board of directors of Lattice Semiconductor Corporation (NASDAQ: LSCC) and as a member of the board of directors of Ambarella Inc (NASDAQ: AMBA). He previously served on the board of directors of Volterra Semiconductor Corporation (NASDAQ: VLTR) from 2011 to 2013. Mr. Richardson holds a Bachelor of Science in Electrical Engineering from the University of Colorado, Boulder. | | |

  3. ITEM 1 — ELECTION OF DIRECTORS

    | Director Qualifications: | | | | In determining that Mr. Richardson is qualified to serve as a director of the Company, the board of directors considered his experience as Executive Vice President and Chief Operating Officer of LSI Corporation, as well as his senior leadership roles at LSI Corporation and other companies. The board of directors also considered Mr. Richardson’s experience on the boards of directors of other public semiconductor and technology companies. | | | | Mui Sung Yeo (65) | 2012 | 2028 | | Ms. Yeo was appointed to the board of directors on October 1, 2012. Ms. Yeo served as Managing Director of Omeyon Pte Ltd., a management consultancy service company, from March 2016 until her retirement in September 2023. From August 2014 to March 2016, Ms. Yeo served as Chief Campus Officer of MediaCorp Pte Ltd., Singapore’s national broadcaster and leading media company, and as its Chief Risk Officer and Chief Financial Officer from 2007 to 2014. Ms. Yeo also served as the Executive Chairman of Singapore Media Academy, a learning center for media excellence, from 2012 to 2016, as well as the Executive Chairman of MediaCorp Vizpro International, a live entertainment company partnering with international players on musical shows, concerts and exhibitions, from 2013 to 2015. Ms. Yeo served as Chief Financial Officer and Group Vice President at United Test & Assembly Center Ltd. from October 1999 to September 2007. She also held positions at F&N Coca Cola Pte Ltd, Baxter Healthcare Pte Ltd, Archive Singapore Pte Ltd and Texas Instruments. Ms. Yeo holds a Bachelor of Science in Business Administration, with a major in Accounting, from the University of San Francisco. | | | | Director Qualifications: | | | | In determining that Ms. Yeo is qualified to serve as a director of the Company, the board of directors considered her approximately 16 years of experience as a chief financial officer of large, publicly-traded technology and media businesses. Ms. Yeo also has approximately 21 years of experience in the semiconductor industry. The board also considered Ms. Yeo’s continuing education in corporate governance with Stanford Law School Directors’ College in 2014, compensation committees with the Harvard Business School in 2015, and corporate governance with the National Association of Corporate Directors (the “NACD”) Technology Symposium in 2018. | | |

  4. ITEM 1 — ELECTION OF DIRECTORS

    The election of directors requires a plurality of the votes cast “FOR” each nominee. This means that the two directors receiving the highest number of affirmative votes of the shares entitled to be voted in the election for directors will be elected as directors. You may vote for both of the director nominees, withhold authority to vote for both of the director nominees, or withhold authority to vote your shares with respect to any one or more of the director nominees. Votes to “WITHHOLD” and broker non-votes will have no effect on the election of the nominees.

  5. TO SERVE UNTIL THE 2028 ANNUAL MEETING OF SHAREHOLDERS

    | Name, Age and Occupation | Director Since | Term Expires | | Continuing Directors | | | | Fusen E. Chen (64) | 2016 | 2027 | | Dr. Chen joined K&S as President and Chief Executive Officer effective October 31, 2016. He was also elected to the board of directors effective October 3, 2016. From 2013 until his resignation to join the Company, Dr. Chen served as President and CEO of Mattson Technology, a manufacturer and supplier of semiconductor equipment. From 2009 to 2012, Dr. Chen served as Executive Vice President, Semiconductor System Products at Novellus Systems, a manufacturer of semiconductor equipment used in the fabrication of integrated circuits. From 2005 to 2009, he served as Executive Vice President and Chief Technology Officer at Novellus Systems. From 2004 to 2005, he served as Senior Vice President, Asia Pacific Operations at Novellus Systems. From 1994 to 2004, Dr. Chen held various management positions at Applied Materials, a supplier of equipment and services to enable the manufacture of semiconductor integrated circuits. Dr. Chen earned his Ph.D. degree in Materials Science and Engineering from the State University of New York and a B.S. degree in Materials Science and Engineering from Tsing Hua University (Hsinchu, Taiwan). | | | | Director Qualifications: | | | | In determining that Dr. Chen is qualified to serve as a director of the Company, the board of directors considered Dr. Chen’s record of achievement during his 30 year career in the semiconductor industry at all levels of management, culminating with his tenure as President and Chief Executive Officer of the Company. | | | | Denise M. Dignam (57) | 2023 | 2025 | | Ms. Dignam has served on the Board since August 22, 2023. She has served in various roles at The Chemours Company (NYSE:CC), one of the largest manufacturers of Titanium Dioxide in the world, since January 2015, including as President, Titanium Technologies and Chemical Solutions since April 2023, as President, Advanced Performance Materials from February 2021 to April 2023 and as Vice President of Global Operations, Fluoroproducts from December 2019 to April 2023. She also served as North American business leader for fluoropolymers and global business leader for Nafio and Krytox portfolios. With over 35 years in the chemical industry, her experience spans a wide range of roles from engineering, manufacturing, operations leadership, and supply chain to sales, marketing, technical service, and continuous improvement. Ms. Dignam currently serves on the board of directors of the National Mining Association. Previously, she served on the board of the US Chamber of Commerce and as executive sponsor of the Chemours Women’s Network. She received her Bachelor of Science in Chemical Engineering from Drexel University in Philadelphia, Pennsylvania. | | |

  6. Pay-for-Performance

    Pay-for-Performance Our compensation programs are based on the fundamental principle of pay-for-performance, where we deliver differentiated pay based on performance. Since fiscal 2018, the Company has used four metrics to align pay for performance: Net Income (“NI”), Operating Margin (“OM”), relative Total Shareholder Return (“rTSR”), and Organic Revenue Growth. For our cash-based Incentive Compensation Plan (the “ICP”) in fiscal 2023, the Committee measured performance using NI (with a fiscal 2023 target of $183.4 million versus the fiscal 2022 target of $318.6 million) and OM (with a fiscal 2023 target of 17.4% versus the fiscal 2022 target of 25.5%), weighted equally. Targets were set at the beginning of the fiscal year after reviewing industry performance data, macro industry economic factors relative to our annual operating plan, and projected market conditions. Based on these factors, targets may be set higher or lower than previous years' target or actual performance to reflect the cyclical nature of our business. When we achieve superior NI and OM results, maximum payouts can be earned. Specifically, achievements of NI of $357.6 million (195% of target) and OM of 33.8% (195% of target) would have earned a maximum 200% of target payout under the ICP. rTSR, which captures growth and shareholder value created over a three-year period, is used for performance-based equity awards (“PSUs”). The Committee believes that relative performance measures will mitigate macroeconomic effects (both positive and negative) on vesting, which are beyond the executives’ control. The Committee has adopted this program for three primary reasons: •First, the Committee seeks to align long-term incentive value for its executives with value created for shareholders, and the Committee believes that total shareholder return relative to an index of companies in the same industry as the Company provides a good measurement to provide this alignment. •Second, vesting is tied to performance relative to shareholder return achieved by an index of similar investments, rather than performance against an absolute metric established based on internal forecasts. •Third, both the Company’s total shareholder return and the total shareholder return of the companies in our comparator groups are transparent to shareholders and Company employees and make clear the Company’s link between pay and shareholder value creation. The comparator group we use is the GICS (45301020) Semiconductor Index (“GICS Index”). The GICS Index consists of companies in the same general industry classification system code as the Company. For actual performance measurement, those companies in the GICS Index traded on the “Pink Sheets LLC Exchange” are excluded from the computation as those companies have extremely low market capitalization and their share prices are extremely volatile, which can interfere with, and possibly mask, their actual TSR. The measurement comparator group consists of approximately 65 companies. In addition to rTSR, a portion of our PSUs are based on an Organic Revenue Growth metric, which measures annual growth averaged over a three-year performance period. Any merger and acquisition activity will be considered organic after four complete quarters in the baseline. In addition to organic growth, we also compare our growth against two named direct competitors, and allow for some level of payout (up to 50% of target) if we outperform one or both of our defined direct competitors when the organic growth metric is not achieved. Since fiscal 2018, 75% of PSUs granted are based on the rTSR metric, and 25% of PSUs granted are based on the Organic Revenue Growth metric.

  7. Total Shareholder Return

    | Performance Cycles | K&S Actual 3-Year TSR results | Percentile Ranking of K&S Actual 3-Year TSR results Relative to the GICS Index | Payout as a Percent of Target | | FY2019 through FY2021 | 154% | 73% | 146% | | FY2020 through FY2022 | 112% | 69% | 138% | | FY2021 through FY2023 | 134% | 83% | 166% |

  8. Performance-Based Cash and Equity Compensation

    Performance-Based Cash and Equity Compensation The Company’s compensation program has three core elements: base salary, annual performance-based cash incentive compensation under the ICP and equity incentives under the Company’s 2021 Omnibus Incentive Plan. Cash incentive compensation under the ICP is determined by performance against NI and OM targets. As noted above, the vesting of performance-based equity is tied to two metrics: rTSR as compared to the GICS Index and an organic revenue growth metric. In general, a significant portion (75% for the CEO and CFO and 50% for other executives) of the equity compensation awarded to our executives under the 2021 Omnibus Incentive Plan is performance-based. The percentages above were calculated using base salary, annual cash incentives, grant date fair value of equity awards, discretionary bonuses, and all other compensation as reported in the “Summary Compensation Table.”

  9. Key Compensation Practices

    | What We Do | What We Don’t Do | | Align target compensation to median levels with our Compensation Peer Group | No stock options and no repricing of underwater options | | Tie realized pay to performance by setting clear financial goals for the Company, business units, and individuals | No excise tax gross-ups on change in control provisions, as well as no excessive severance payouts | | A majority of the pay of our named executive officers is at risk and performance contingent. Base salaries of the Company’s named executive officers range from 28% to 36% of total targeted direct compensation in fiscal 2023 | No excessive perquisites | | Majority of equity grant for CEO and CFO is performance contingent, based on 3-year TSR relative to the GICS Index and organic revenue growth metric | No supplemental executive retirement plans that provide extra benefits to executive officers | | Have clawback provisions to mitigate risk | No compensation programs that encourage risk-taking that is likely to pose a material adverse impact on the Company | | Compensation Peer Group reviewed annually to ensure appropriate benchmarking of compensation | No loans, or purchases of Company securities on margin | | Share ownership guidelines (including mandatory holding requirements if necessary) for executive officers and directors | Executives and directors may not engage in hedging transactions with respect to Company equity, nor pledge or use as collateral Company equity to secure personal loans | | Double trigger change-in-control provisions for both cash and equity awards | |

  10. Compensation Consultant

    Compensation Consultant The Committee has the authority to engage independent advisors to assist it in carrying out its responsibilities. The Committee has engaged FW Cook since May of 2017 as its independent advisor after review and assessment of qualifications of consulting firms identified by Management based on technology sector expertise, international experience, and experience with advising compensation committees. Management had no role in the decision of selecting FW Cook as the Committee’s advisor, except for identifying various consulting firms for the Committee to review. Taking into consideration the applicable factors affecting the independence of such advisors that are required by SEC and Nasdaq rules, the Committee determined that the work of FW Cook and the individual compensation advisors employed by FW Cook who provided services to the Committee have not created any conflict of interest. In fiscal 2023, the Committee worked with FW Cook for peer group selection, executive compensation benchmarking, compensation risk assessment, and counsel on compensation trends and issues. The Committee also regularly consults FW Cook on individual employment and compensation issues. The Committee independently engaged with and approved all of the services provided by FW Cook.

  11. Total Direct Compensation

    Total Direct Compensation The targeted TDC amount for each named executive officer (other than the CEO) is established by the Committee based on a number of individual factors, including performance, level of responsibility within the Company, experience, potential to contribute to the Company’s future success in the executive’s current role or in an expanded role, and pay levels for similar positions, with the objective that the TDC targets are, on average, consistent with median TDC levels as reflected in peer data and industry surveys. The Committee adopted an approach proposed by FW Cook to establish market benchmarks for our executives. Step one was to determine the U.S. Market Compensation by benchmarking against the Compensation Peer Group (described below) for primarily our CEO, CFO, and EVP, Products & Solutions and survey data regarding the semiconductor industry from the Radford Global Compensation Database, size-adjusted for the Company's corporate (or relevant business unit) revenue scope for the remainder of the executive team. Step two was to determine the relationship of Asia-Pacific relative to U.S. compensation levels, by establishing an Asia-Pacific peer group (described below) to determine the discount to be applied to the U.S. data. Separate discounts were established for annual cash compensation and long-term incentive compensation in order to account for differences in market levels among each element of compensation. We intend to refresh the Asia-Pacific peer group every three years. Step three was to compare internal compensation to the adjusted market levels. The Committee believes this methodology provides a consistent, empirical basis for benchmarking our Singapore based executives and aids its decision making in executive compensation matters. As benchmarked using the methodology described above, named executive officers’ TDC generally fell within +/-15% of the market median based on the 2023 analysis and the Committee only considered exceeding +15% of the market median in extraordinary circumstances. No named executive officer had TDC in excess of the 75th percentile.

  12. Peer Group Companies and Comparison Data

    Peer Group Companies and Comparison Data Each year, the Committee analyzes whether it is using the most appropriate compensation peer group and market data, based on a number of factors, including the size of the Company in terms of revenues, market capitalization, similarity of industry, and the availability of such data. Although the Company is Asia-based and is predominantly staffed with executives who have been based in Asia for many years, our peer and survey companies are principally U.S.-based. This is because most non-U.S.-listed companies are not required to disclose the same level of compensation data as is required of U.S. public companies. Therefore, the Committee considers benchmarking against peer companies in the U.S. to be a necessary point of reference, subject to appropriate adjustments to reflect differences between Asia and U.S. executive compensation practices, as described above, in determining whether the total targeted compensation opportunity offered by the Company is competitive in the marketplace for its executives. As a result, the Compensation Peer Group consists of U.S. public companies. In consultation with FW Cook, the Committee selected the following peer group of 17 technology companies (collectively, the “Compensation Peer Group”) to be used for fiscal 2023 compensation benchmarking:

  13. Peer Group Companies and Comparison Data

    | Advanced Energy Industries, Inc. | Monolithic Power Systems, Inc. | | Axcelis Technologies, Inc. | OSI Systems, Inc. | | Cabot Microelectronics | Power Integrations | | Cirrus Logic Inc. | SMART Global Holdings | | Cohu, Inc. | Semtech Corporation | | Diodes Incorporated | Silicon Laboratories, Inc. | | Entegris | Synaptics Incorporated | | FormFactor Inc. | Ultra Clean Holdings, Inc. | | MKS Instruments, Inc. | |

  14. Peer Group Companies and Comparison Data

    The Compensation Peer Group was selected primarily because the companies were U.S.-based technology companies in the same or similar industries as K&S that were similar to us in complexity and size (measured by revenue and market capitalization), and because the Committee concluded that the Compensation Peer Group companies were representative of likely competitors with the Company for executive talent. In addition, the peer group was compared to the peer groups independently established and utilized by certain of our institutional shareholders and their advisors. The Compensation Peer Group resulting from our fiscal 2023 review was altered from the fiscal 2022 review by the removal of four companies: Azenta (formerly known as Brooks Automation, Inc.) due to poor business fit following the divestiture of its semiconductor business, and MACOM Technology Solutions, Veeco Instruments, Inc., and Wolfspeed, Inc. (formerly known as Cree, Inc.) due to their falling below the 25th percentile of revenue respectively. The Company’s trailing twelve months revenues were at the 57th percentile of the Compensation Peer Group at the time it was approved. Given the variability in our revenues from year-to-year, we also assessed our relative positioning on a two-year average basis, where our revenues were at the 60th percentile of the Compensation Peer Group at the time it was approved. The Committee’s analysis with respect to executive compensation decisions is supplemented by broader U.S. technology industry data. In fiscal 2023, the Committee considered the Radford Global Technology Survey with data scaled to our revenue size. The Committee does not select or have any influence over the companies that participated in these surveys and is not aware of the identities of any of the component companies that are included in the surveys. As described above, we also established an Asia-Pacific peer group to analyze the pay differences between the U.S. and Asia-Pacific. The screening process for the development of the Asia-Pacific peer group was similar to the process for the Compensation Peer Group. Preference was also given to companies listed on the Singapore and Hong Kong exchanges (over those in China, Taiwan, Korea, and Japan) due to greater comparability and pay disclosure practices. This review is conducted triennially. Based on the criteria described above, the following list of 21 companies are our Asia-Pacific Peer Group:

  15. Peer Group Companies and Comparison Data

    | ASM Pacific Technology Limited | Ninestar Corporation | | Chipbond Technology Corporation | Novatek Microelectronics Corporation | | ChipMOS Technologies Inc. | Pax Global Technology Ltd. | | Chroma ATE Inc. | Powertech Technology Inc. | | Digital China Holdings Ltd. | Realtek Semiconductor Corporation | | FIT Hong Teng, Ltd | Truly Semiconductors Ltd. | | Shanghai Fudan Microelectronics Group Co., Ltd. | Venture Corporation Ltd. | | GCL-Poly Energy Holdings Limited | VTech Holdings Limited | | HI-P International Limited | Yangtze Optical Fibre and Cable Joint Stock Limited Company | | Hua Hong Semiconductor Limited | Yestar International Holdings Company Limited | | JCET Group Co., Ltd. | |

  16. Cash Incentive Plan

    Cash Incentive Plan

  17. Overview

    Overview The Company’s cash incentive program, the Incentive Compensation Plan (“ICP”), is designed to align executive pay with financial performance. The CEO and all other ICP participants were eligible to receive an annual payment under the ICP based on fiscal 2023 financial results. The targets and funding scales for fiscal 2023 were set based on the Company’s achievement against our annual operating plan. The Committee rigorously reviews our annual operating plan and takes into account all relevant factors including market conditions and industry outlook as part of overall target setting. The Committee believes that the higher the executive’s level of responsibility and influence within the Company, the greater the percentage of the executive’s total target cash compensation that should be performance-based. These target percentages are generally set by the Committee based on its assessment of market median target incentive percentages within the Compensation Peer Group and industry surveys for each named executive officer’s role and may change based on market trends. Based on the market data assessment, the target annual cash incentive percentages for our named executive officers remained the same as the prior fiscal year, other than for Dr. Chen whose annual cash incentive target increased by 5% in fiscal 2023. For fiscal 2023, the target annual cash incentive percentages were as follows:

  18. Overview

    | Executive | Target Annual Cash Incentive as a % of Base Salary | | Dr. Fusen Chen | 120% | | Mr. Lester Wong | 75% | | Mr. Chan Pin Chong | 70% | | Mr. Robert Chylak | 55% | | Mr. Nelson Wong | 70% |

  19. Fiscal 2023 Performance Goals

    Fiscal 2023 Performance Goals Under the fiscal 2023 ICP for our named executive officers, the annual incentive pool was established based on actual Net Income (“NI”) and Operating Margin (“OM”) performance against targets. NI and OM were selected as performance metrics because the Committee believes that these metrics are closely correlated with shareholder value creation. Targets are set based on projected overall market conditions, among other factors, and may be higher or lower than previous years’ targets or actual performance. The funding of the incentive pools based on Company Net Income and Operating Margin performance used the following funding scales, which are relatively wide to reflect the cyclical nature of our business:

  20. Long-Term Equity Incentive Compensation

    Long-Term Equity Incentive Compensation

  21. Overview

    Overview The Committee believes that our equity incentive program appropriately aligns management’s interests with shareholders’ long-term interests because the value of the awards is tied to stock price appreciation and, in the case of performance-based stock awards, to relative market performance and organic revenue growth, which correlates to long-term shareholder value creation. Named executive officers typically receive annual equity incentive grants under the 2021 Omnibus Incentive Plan in the first quarter of the fiscal year. Equity awards are either time-based restricted stock unit awards (“RSUs”), which are subject to service-vesting conditions and are efficient for attraction and retention, or PSUs, which are subject to both service-vesting and performance-vesting conditions. Neither the RSUs nor the PSUs include any dividend equivalent rights under the 2021 Omnibus Incentive Plan. The Committee believes that awards to the CEO and the CFO should be more heavily weighted toward performance-based awards than for other executives. The allocation of performance-based to time-based equity awards generally is as follows:

  22. Statement of Practices

    Statement of Practices The Company has adopted a Statement of Practices for equity grants, which defines the primary terms and conditions for the administration of equity awards granted to employees and officers under the Company’s equity incentive plans. It includes the following: 1.Eligibility for awards is limited to those individuals employed by the Company or its direct or indirect subsidiaries. 2.Subject to Paragraph 4 below, awards are only made annually. Annual awards (other than with respect to the CEO) are made by the Committee based on recommendations made by the Company’s management which are reviewed by the Committee. 3.Annual awards are approved and priced at the Committee meeting that takes place in the first quarter of the Company’s fiscal year, generally held in October, although sometimes grants have been made at other times, for instance, to provide the Committee with additional time to review management recommendations. 4.Inducement grants to newly hired executives and officers require specific pre-approval by the Committee. The Committee has delegated authority to the CEO to approve inducement equity awards for newly hired employees (not officers), and promotion and/or retention grants to key employees that are consistent with market data. The value of equity awards granted to each participant (other than the CEO) is determined based on the CEO’s evaluation of the executive’s level of responsibility and influence over the Company’s results, performance, potential to contribute to our future success and award values for executives in the peer companies based on our benchmarking exercise, as approved by the Committee. Any award to the CEO is based on the Committee’s evaluation of the same factors and its recommendation to the full board of directors for approval. The extent of existing non-vested equity awards or stock ownership is not generally considered in granting equity awards, except that we sometimes grant an initial round of equity awards to newly recruited executives. Initial equity awards are intended to induce executives to join us, to replace equity compensation that may have been forfeited at the executives’ prior place of employment, and to better align the executives’ interests with the shareholders’ interests from the start of employment.

  23. Fiscal Year 2023 Equity Awards

    Fiscal Year 2023 Equity Awards On October 14, 2022, the Committee granted RSUs and PSUs respectively to the CEO, the other named executive officers, and certain eligible employees for fiscal 2023. The named executive officers grants are based on compensation benchmarking against each of our named executive officers’ roles and based on market practice. The amounts of PSUs and RSUs awarded to the Company’s named executive officers were as follows:

  24. Fiscal Year 2023 Equity Awards

    | | Performance-Based Stock | Time-Based Stock | | | (PSUs) | (RSUs) | | Dr. Fusen Chen | 96,000 | 32,000 | | Mr. Lester Wong | 17,807 | 5,935 | | Mr. Chan Pin Chong | 8,740 | 8,739 | | Mr. Robert Chylak | 7,104 | 7,104 | | Mr. Nelson Wong | 8,319 | 8,319 |

  25. Time Based Restricted Stock Units (“RSUs”)

    Time Based Restricted Stock Units (“RSUs”) RSUs granted in fiscal 2023 vest in equal annual installments on each of the first three anniversaries of the grant date, provided the recipient remains continuously employed through each vesting date.

  26. Performance Based Performance Stock Units Based on Relative Total Shareholder Return (“rTSR PSUs”)

    Performance Based Performance Stock Units Based on Relative Total Shareholder Return (“rTSR PSUs”) For fiscal 2023, 75% of PSUs awarded will be subject to achieving rTSR performance goals. The vesting of rTSR PSUs granted in fiscal 2023 is tied to total shareholder return relative to the companies comprising the GICS Index, measured over a three-year performance period. The three-year performance period for the rTSR PSUs granted in fiscal 2023 will end in October 2025 and between 0% and 200% of the PSUs will be earned and vest based on the following scale:

  27. Relative Total Shareholder Return

    Relative Total Shareholder Return The payout scale above shows rTSR PSU vesting percentages at percentile performance points from the 25th or less percentile to the 99th percentile. Actual vesting of rTSR PSUs will be expressed as a full percentage point ranging from 0% to 200% with interpolation between the points in the above graph. We believe that this scale is generally consistent with the majority of TSR based plans in our industry. It provides below market pay opportunity for below market performance, but we have to outperform the market in order for the executives to earn more than median compensation, continuing to link pay to performance. We cap the payout of the rTSR PSUs at target when absolute TSR is negative, even if actual performance would suggest a higher payout, to ensure that our executives do not receive above-target payouts unless they have created value for shareholders.

  28. Performance Based Performance Stock Units Based on Organic Revenue Growth (“Growth PSUs”)

    Performance Based Performance Stock Units Based on Organic Revenue Growth (“Growth PSUs”) For fiscal 2023, 25% of PSUs awarded will be subject to achieving an organic revenue growth target of 5% averaged over three fiscal years. Final vesting of performance share awards will be interpolated and expressed as a full percentage from 0% to 200% based on the table below:

  29. Performance Based Performance Stock Units Based on Organic Revenue Growth (“Growth PSUs”)

    | Average Organic Revenue Growth over 3-year Performance Cycle | Payout | | >= 10% | 200% | | 5% | 100% | | 0% | 25% | | <0% | 0% |

  30. Performance Based Performance Stock Units Based on Organic Revenue Growth (“Growth PSUs”)

    To ensure our executives remain focused on outperforming two defined direct competitors even when going through an industry downturn, participants will be eligible to earn 1/12 of target vesting for outperformance versus each of our named direct competitors during any year, up to a maximum of 6/12 (or 50%) of target if we outperform both direct competitors in all three years. Actual payout will be based on the greater of the achievements for absolute organic growth or relative growth compared to direct competitors. Note that for relative growth, the maximum potential payout is limited to 50% of target to maintain the primary focus on absolute performance.

  31. Vesting of Performance-Based Equity Awards

    Vesting of Performance-Based Equity Awards For the most recent completed three-year performance period, (October 4, 2020 through September 30, 2023) related to PSUs granted in fiscal 2021, for each of the metrics discussed above: •Company performance for rTSR resulted in a cumulative TSR of 134%. This performance ranked 10 out of 54 peer companies (83rd percentile), resulting in a payout equal to 166% of target. •Company performance for organic growth was 3-year average organic revenue growth of 31%, resulting in a payout equal to 200% of target.

  32. Compensation and Risk

    | Risk Mitigating Factors | Comments | | Cash Incentive Award Cap | Avoids potential windfall circumstances; limits excessive risk-taking behavior | | Multiple Performance Factors across the Cash and Equity Programs | Avoids risk of focusing on only one aspect of performance by incentivizing a balanced perspective on performance | | Annual Review of Targets and Opportunity | Ensures compensation is properly aligned with current market median levels | | Clawback Feature including formal Clawback Policy | Mitigates risk of inappropriate behavior | | Range of Award Payouts | Avoids risk of “all or nothing” mentality | | Share Ownership Guidelines | Discourages focus on short-term results without regard for longer term consequences | | Multi-year Vesting Schedule | Focuses executive officers on the long-term interests of the Company and shareholders | | No Severance if Termination is for “Cause” | Discourages potential for inappropriate behavior | | Anti-Pledging and Hedging Policies | Avoids risk of using Company stock as collateral for loans or insulating against stock price declines |

  33. Three-Year Compensation - Singapore Dollars

    | Name | Fiscal | Salary | Bonus | Stock Awards | Non-Equity Incentive Plan Compensation | All Other Compensation | Total | | | Year | (SG $) | (SG $) | (SG $) | (SG $) | (SG $) | (SG $) | | Lester Wong | 2023 | 601,766 | — | 1,475,504 | 161,051 | 88,627 | 2,326,948 | | | 2022 | 568,890 | — | 1,187,853 | 582,120 | 14,341 | 2,353,204 | | | 2021 | 522,900 | — | 1,041,510 | 740,880 | 81,455 | 2,386,745 | | Chan Pin Chong | 2023 | 598,204 | — | 1,035,839 | 150,107 | 17,084 | 1,801,234 | | | 2022 | 563,607 | — | 868,628 | 570,397 | 17,881 | 2,020,513 | | | 2021 | 536,769 | — | 798,140 | 706,206 | 17,340 | 2,058,455 | | Nelson Wong | 2023 | 577,095 | — | 985,990 | 143,985 | 46,774 | 1,753,844 | | | 2022 | 548,721 | — | 868,628 | 560,287 | 47,761 | 2,025,397 | | | 2021 | 509,678 | — | 702,370 | 668,233 | 45,180 | 1,925,461 |

  34. SUMMARY COMPENSATION TABLE FOR FISCAL 2023

    SUMMARY COMPENSATION TABLE FOR FISCAL 2023 For a discussion of the Management Development & Compensation Committee’s objectives, discretion and criteria for setting compensation, see “Compensation Discussion & Analysis” of this proxy statement.

  35. SUMMARY COMPENSATION TABLE FOR FISCAL 2023

    | Name and Principal Position | Fiscal Year | Salary ($)(1) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Fusen Chen | 2023 | 881,250 | 5,576,880 | 381,240 | 37,847 | 6,877,217 | | President and CEO | 2022 | 813,750 | 4,131,665 | 1,242,724 | 33,764 | 6,221,903 | | | 2021 | 768,750 | 3,837,192 | 1,716,000 | 29,754 | 6,351,696 | | Lester Wong | 2023 | 444,436 | 1,034,425 | 118,945 | 65,455 | 1,663,261 | | Executive Vice President, Chief Financial Officer | 2022 | 413,468 | 881,066 | 415,298 | 61,706 | 1,771,538 | | | 2021 | 389,729 | 766,098 | 552,195 | 60,710 | 1,768,732 | | Chan Pin Chong | 2023 | 441,805 | 726,191 | 110,862 | 12,617 | 1,291,475 | | Executive Vice President & GM, K&S Products & Solutions | 2022 | 409,628 | 644,287 | 379,806 | 12,996 | 1,446,717 | | | 2021 | 400,066 | 587,084 | 526,352 | 12,924 | 1,526,426 | | Robert Chylak | 2023 | 375,626 | 590,289 | 73,893 | 18,229 | 1,058,037 | | Senior Vice President & CTO, Central Engineering | 2022 | 352,052 | 511,649 | 258,461 | 14,562 | 1,136,724 | | Nelson Wong | 2023 | 426,215 | 691,244 | 106,340 | 34,545 | 1,258,344 | | Senior Vice President, Global Sales & Supply Chain | 2022 | 398,809 | 644,287 | 373,074 | 34,712 | 1,450,882 | | | 2021 | 379,875 | 516,639 | 498,049 | 33,674 | 1,428,237 |

  36. SUMMARY COMPENSATION TABLE FOR FISCAL 2023

    (1) Compensation for Messrs. Lester Wong, Chong, and Nelson Wong for fiscal years 2023, 2022, and 2021 as applicable, has been converted from Singapore dollars into U.S. dollars using the average conversion rate during each such year of 1.3540, 1.3759, and 1.3147. For a comparison of the amounts actually paid to Messrs. Lester Wong, Chong, and Nelson Wong in Singapore dollars and the amounts reflected in the above table in U.S. dollars, see the tables provided in the “Compensation Discussion & Analysis” under the heading “Foreign Currency Considerations". (2) The amounts included in the “Stock Awards” column represent the full grant date fair value of the grants in fiscal 2023, 2022, and 2021 related to performance-based share awards, calculated in accordance with ASC No. 718, and RSUs. For the PSUs, the amounts reported were valued using the Monte Carlo valuation method and the closing market price of our common stock on the date of the grant assuming payout at target performance of 100%. For fiscal 2023, these values were as follows: Dr. Chen, $4,376,880; Mr. Lester Wong, $811,863; Mr. Chong, $398,478; Mr. Chylak, $323,889; and Mr. Nelson Wong, $379,281. Assuming maximum performance of 200%, the full grant date fair value of PSUs awarded in fiscal 2023 would have been: Dr. Chen, $8,753,760; Mr. Lester Wong, $1,623,726; Mr. Chong, $796,957; Mr. Chylak, $647,778; and Mr. Nelson Wong, $758,563. For fiscal 2022, these values were as follows: Dr. Chen, $3,131,675; Mr. Lester Wong, $667,833; Mr. Chong, $329,063; Mr. Chylak, $261,320; and Mr. Nelson Wong, $329,063. Assuming maximum performance of 200%, the full grant date fair value of PSUs awarded in fiscal 2022 would have been: Dr. Chen, $6,263,351; Mr. Lester Wong, $1,335,667; Mr. Chong, $658,126; Mr. Chylak, $522,640; and Mr. Nelson Wong, $658,126. For fiscal 2021, these values were as follows: Dr. Chen, $2,962,205; Mr. Lester Wong, $591,416; Mr. Chong, $311,270; and Mr. Nelson Wong, $273,922. Assuming maximum performance of 200%, the full grant date fair value of PSUs awarded in fiscal 2021 would have been: Dr. Chen, $5,924,410; Mr. Lester Wong, $1,182,832; Mr. Chong, $622,539; and Mr. Nelson Wong, $547,845. See the “Grants of Plan-Based Awards Fiscal 2023” table for additional information regarding the full grant date fair value for the fiscal 2023 awards. (3) The amounts in this column for Dr. Chen, Mr. Lester Wong, Mr. Chong, Mr. Chylak, and Mr. Nelson Wong reflect the U.S. dollar value earned under the ICP Plan. (4) The Company provides expatriate, relocation and transition benefits and medical benefits when appropriate. In fiscal 2023, Dr. Chen received other compensation of $37,847, consisting of $32,489 of medical coverage, and employer contributions to the Singapore Central Provident Fund of $5,358. In fiscal 2023, Mr. Lester Wong received other compensation of $65,455, consisting of $54,677 of medical coverage, and $10,778 of employer contributions to the Singapore Central Provident Fund. In fiscal 2023, Mr. Chong received other compensation of $12,617, consisting of employer contributions to the Singapore Central Provident Fund of $12,617. In fiscal 2023, Mr. Chylak received other compensation of $18,229, consisting of an employer matching contribution to the 401(k) plan of $18,229. In fiscal 2023, Mr. Nelson Wong received other compensation of $34,545, consisting of employer contributions to the Singapore Central Provident Fund of $7,957, and a transportation allowance of $26,588.

  37. GRANTS OF PLAN-BASED AWARDS DURING FISCAL 2023

    GRANTS OF PLAN-BASED AWARDS DURING FISCAL 2023 The following table shows all plan-based awards granted to the named executive officers during fiscal 2023. For a discussion of the Company’s plan-based awards and the Committee’s objectives, discretion and criteria for granting awards, see “Compensation Discussion & Analysis” of this proxy statement. The stock awards identified in the table are also reported in the “Outstanding Equity Awards at 2023 Fiscal Year-End” table, which follows this table.

  38. GRANTS OF PLAN-BASED AWARDS DURING FISCAL 2023

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Fusen Chen | | 270,000 | 1,080,000 | 2,160,000 | | | | | | | | 10/14/2022 | | | | | 72,000 | 144,000 | — | 3,476,880 | | | 10/14/2022 | | | | | 24,000 | 48,000 | — | 900,000 | | | 10/14/2022 | | | | | | | 32,000 | 1,200,000 | | Lester Wong | | 84,239 | 336,954 | 673,908 | | | | | | | | 10/14/2022 | | | | | 13,355 | 26,710 | — | 644,913 | | | 10/14/2022 | | | | | 4,452 | 8,904 | — | 166,950 | | | 10/14/2022 | | | | | | | 5,935 | 222,563 | | Chan Pin Chong | | 78,514 | 314,055 | 628,110 | | | | | | | | 10/14/2022 | | | | | 6,555 | 13,110 | — | 316,541 | | | 10/14/2022 | | | | | 2,185 | 4,370 | — | 81,938 | | | 10/14/2022 | | | | | | | 8,739 | 327,713 | | Robert Chylak | | 51,649 | 206,594 | 413,188 | | | | | | | | 10/14/2022 | | | | | 5,328 | 10,656 | — | 257,289 | | | 10/14/2022 | | | | | 1,776 | 3,552 | — | 66,600 | | | 10/14/2022 | | | | | | | 7,104 | 266,400 | | Nelson Wong | | 75,312 | 301,247 | 602,494 | | | | | | | | 10/14/2022 | | | | | 6,239 | 12,478 | — | 301,281 | | | 10/14/2022 | | | | | 2,080 | 4,160 | — | 78,000 | | | 10/14/2022 | | | | | | | 8,319 | 311,963 |

  39. GRANTS OF PLAN-BASED AWARDS DURING FISCAL 2023

    (1)Awards under the ICP Plan are paid at the end of the fiscal year based on performance metrics for the full fiscal year, as described above in “Compensation Discussion & Analysis.” The actual payments under these awards are reported above in the “Summary Compensation Table” in the column entitled “Non-Equity Incentive Plan Compensation.”

  40. OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END

    OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END The following table shows all outstanding equity awards held by the named executive officers at September 30, 2023, the last day of fiscal 2023. The amounts reported under the “Stock Awards” column are included in the “Summary Compensation Table” under “Stock Awards” to the extent included in the amount of compensation cost recognized by the Company in fiscal 2023 for financial statement reporting purposes, as calculated in accordance with ASC No. 718, Compensation, Stock Compensation. The stock awards reported in the “Grants of Plan-Based Awards Fiscal 2023” table above are also reported in this table. None of the named executive officers hold any outstanding stock options.

  41. OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END

    | | Stock Awards | | | | | | Name | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($) (2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($) (2) | Grant Date | | Fusen Chen | | | 72,000 | 3,501,360 | 10/14/2022 | | | | | 24,000 | 1,167,120 | 10/14/2022 | | | 32,000 | 1,556,160 | | | 10/14/2022 | | | | | 45,731 | 2,223,899 | 10/15/2021 | | | | | 15,244 | 741,316 | 10/15/2021 | | | 13,550 | 658,937 | | | 10/15/2021 | | | | | 82,444 | 4,009,252 | 10/07/2020 | | | | | 27,481 | 1,336,401 | 10/07/2020 | | | 12,214 | 539,967 | | | 10/07/2020 | | Lester Wong | | | 13,355 | 649,454 | 10/14/2022 | | | | | 4,452 | 216,501 | 10/14/2022 | | | 5,935 | 288,619 | | | 10/14/2022 | | | | | 9,752 | 474,240 | 10/15/2021 | | | | | 3,251 | 158,096 | 10/15/2021 | | | 2,890 | 140,541 | | | 10/15/2021 | | | | | 16,460 | 800,450 | 10/07/2020 | | | | | 5,487 | 266,833 | 10/07/2020 | | | 2,439 | 118,609 | | | 10/07/2020 | | Chan Pin Chong | | | 6,555 | 318,770 | 10/14/2022 | | | | | 2,185 | 106,257 | 10/14/2022 | | | 8,739 | 424,978 | | | 10/14/2022 | | | | | 4,805 | 233,667 | 10/15/2021 | | | | | 1,602 | 77,905 | 10/15/2021 | | | 4,272 | 207,747 | | | 10/15/2021 | | | | | 8,663 | 421,282 | 10/07/2020 | | | | | 2,888 | 140,443 | 10/07/2020 | | | 3,850 | 187,226 | | | 10/07/2020 | | Robert Chylak | | | 5,328 | 259,101 | 10/14/2022 | | | | | 1,776 | 86,367 | 10/14/2022 | | | 7,104 | 345,468 | | | 10/14/2022 | | | | | 3,816 | 185,572 | 10/15/2021 | | | | | 1,272 | 61,857 | 10/15/2021 |

  42. OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END

    | | 3,392 | 164,953 | | | 10/15/2021 | | | | | 5,545 | 269,653 | 10/07/2020 | | | | | 1,848 | 89,868 | 10/07/2020 | | | 2,464 | 119,824 | | | 10/07/2020 | | Nelson Wong | | | 6,239 | 303,403 | 10/14/2022 | | | | | 2,080 | 101,150 | 10/14/2022 | | | 8,319 | 404,553 | | | 10/14/2022 | | | | | 4,805 | 233,667 | 10/15/2021 | | | | | 1,602 | 77,905 | 10/15/2021 | | | 4,272 | 207,747 | | | 10/15/2021 | | | | | 7,624 | 370,755 | 10/07/2020 | | | | | 2,541 | 123,569 | 10/07/2020 | | | 3,388 | 164,758 | | | 10/07/2020 |

  43. OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END

    (1)Number of shares represents common shares underlying time-based RSU awards. Time-based RSUs vest in 1/3 increments on each of the first three anniversaries of the grant date. (2)Market value for unvested shares in these columns is calculated as number of unvested shares multiplied by the closing stock price at the end of September 29, 2023 of $48.63. (3)Number of shares represents common shares underlying PSU awards, assuming all are earned at target performance levels at the end of the applicable performance periods. PSUs cliff vest at the end of the three-year performance period following the grant date to the extent performance goals are achieved.

  44. OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2023

    OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2023 The following table reports all the vesting of stock awards of the named executive officers in fiscal 2023. No named executive officer held or exercised stock options in fiscal 2023.

  45. OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2023

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (1) | | Fusen Chen | 201,890 | 8,431,420 | | Lester Wong | 39,090 | 1,631,806 | | Chan Pin Chong | 28,051 | 1,159,546 | | Robert Chylak | 12,139 | 518,573 | | Nelson Wong | 24,499 | 1,013,499 |

  46. OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2023

    (1) The value realized on vesting is determined by multiplying the number of vested restricted stock units and performance share units by the closing price of our common stock on the vesting date.

  47. POTENTIAL PAYMENTS UPON TERMINATION

    POTENTIAL PAYMENTS UPON TERMINATION

  48. CEO Pay Ratio

    CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K, we are reporting the ratio of our median employee’s annual total compensation to the annual total compensation of our principal executive officer. To determine our median employee for fiscal 2023, we identified our total employee population as of September 30, 2023, the last day of our fiscal 2023 year, which included all global full-time, part-time, and temporary employees that were employed on that date. As of September 30, 2023, we had approximately 2,877 full time employees and 148 temporary workers worldwide. We annualized the compensation for regular employees hired during the year. The Company used “target total cash” as the consistently applied compensation measure across our global employee population. In accordance with SEC rules, we used the median employee identified from last year's calculation, then determined the employee’s annual total compensation using the Summary Compensation Table methodology and compared it to the total compensation of our CEO, as detailed in the Summary Compensation Table for fiscal 2023. Foreign exchange rate on September 29, 2023 was used to translate compensation to U.S. dollar equivalent. The Company’s median employee earned $43,180. Based on the total fiscal 2023 compensation reported for Dr. Chen of $6,877,217, our ratio of CEO to median employee pay was 159 to 1.

  49. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE The following table shows the total compensation for our named executive officers ("NEOs") for the past three fiscal years as set forth in the Summary Compensation Table, the “compensation actually paid” to our principal executive officer ("PEO") (being Dr. Fusen Chen, Chief Executive Officer of the Company since 2016) and on an average basis, our other NEOs (in each case, as determined under the SEC rules), our TSR, our peer group TSR (S&P 600 Semiconductor Materials & Equipment Index), our net income, and Relative Total Shareholder Return (rTSR). This information is being provided for the purposes of compliance with the pay versus performance disclosure requirement, based on rules adopted by the SEC under the Dodd-Frank Act.

  50. PAY VERSUS PERFORMANCE

    | Fiscal Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO | Average Summary Compensation Table Total for non-PEO NEOs | Average Compensation Actually Paid to non-PEO NEOs | Total Shareholder Return | Peer Group Total Shareholder Return | Net Income ($M) | Relative TSR Percentile | | (a) | (b)1 | (c) 2 | (d)3 | (e)2 | (f)4 | (g)4 | (h)5 | (i)6 | | 2023 | $6,877,217 | $10,185,047 | $1,317,779 | $1,778,426 | $231.47 | $240.05 | $57.00 | 65th Percentile | | 2022 | $6,221,903 | $(5,007,404) | $1,451,465 | $168,428 | $180.65 | $145.24 | $433.55 | 47th Percentile | | 2021 | $6,351,696 | $35,208,977 | $1,447,828 | $4,703,718 | $271.25 | $182.64 | $367.16 | 95th Percentile |

  51. PAY VERSUS PERFORMANCE

    1 The dollar amounts reported in column (b) are the amounts of total compensation reported for PEO (Dr. Chen) for each corresponding year in the “Total” column of the Summary Compensation Table. 2 The dollar amounts reported in column (c) and (e) represent the amount of “compensation actually paid” (otherwise known as CAP), as computed in accordance with the applicable SEC rules. “Compensation actually paid” does not necessarily represent cash and/or equity value transferred to the applicable NEO without restriction, but rather is a value calculated under applicable SEC rules. We do not have a defined benefit plan so no adjustment for pension benefits is included in the table below. Similarly, no adjustment is made for dividends as dividends are factored into the fair value of the award. The following table details these adjustments:

  52. PAY VERSUS PERFORMANCE

    | Fiscal Year | | SCT | Grant Date Value of New Awards | Year End Value of New Awards | Change in Value of Prior Awards | Change in Value of Vested Awards | Prior Year End Value of Failed to Vest Awards | Total Fair Value Adjustments | CAP | | | | (a) | (b) | (i) | (ii) | (iii) | (iv) | (c) | (d) | | 2023 | PEO | $6,877,217 | $5,576,880 | $6,180,977 | $2,045,776 | $657,957 | $0 | $8,884,710 | $10,185,047 | | | NEOs | $1,317,779 | $760,537 | $868,236 | $271,086 | $81,863 | $0 | $1,221,184 | $1,778,426 | | 2022 | PEO | $6,221,903 | $4,131,665 | $3,801,363 | $(8,943,599) | $(1,955,407) | $0 | $(7,097,642) | $(5,007,404) | | | NEOs | $1,451,465 | $670,322 | $594,563 | $(1,090,746) | $(116,532) | $0 | $(612,715) | $168,428 | | 2021 | PEO | $6,351,696 | $3,837,192 | $13,161,605 | $18,908,278 | $624,591 | $0 | $32,694,473 | $35,208,977 | | | NEOs | $1,447,828 | $555,521 | $1,791,823 | $1,897,768 | $121,819 | $0 | $3,811,410 | $4,703,718 |

  53. PAY VERSUS PERFORMANCE

    (a) The dollar amounts reported in the Summary Compensation Table for the applicable year. (b) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year. (i-iv) The recalculated value of equity awards for each applicable year includes the addition of the following: (i) Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year; (ii) Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years from the end of the prior Fiscal Year to the end of the current Fiscal Year; (iii) Change in Fair Value as of Vesting Date (compared to prior Fiscal Year End) of Option Awards and Stock Awards Granted in the Current Year and Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year; (iv) Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year. (c) “Total Fair Value Adjustments” is equal to the sum of items (i-iv) and represents the cumulative change in Fair Value across all outstanding, vested, and cancelled awards during the fiscal year. (d) “Compensation Actually Paid” does not necessarily represent cash and/or equity value transferred to the applicable NEO without restriction, but rather is a value calculated under applicable SEC rules and is equal to (a) – (b) + (c) 3 The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs included for purposes of calculating the average amounts in each applicable year are as follows:

  54. PAY VERSUS PERFORMANCE

    | 2023 | Lester Alfred Wong, Chan Pin Chong, Nelson Wong, and Robert Chylak | | 2022 | Lester Alfred Wong, Chan Pin Chong, Nelson Wong, and Robert Chylak | | 2021 | Lester Alfred Wong, Chan Pin Chong, Nelson Wong, and Stephen Ray Drake |

  55. PAY VERSUS PERFORMANCE

    4 TSR determined in Column (f) is based on the value of an initial fixed investment of $100 in our Company's stock (NASDAQ: KLIC) as of October 2, 2020. TSR determined in Column (g) is based on the value of an initial fixed investment of $100 in the S&P 600 Semiconductor Materials & Equipment Index as of October 2, 2020. 5 The dollar amounts in Column (h) reflects our Company’s GAAP Net Income for each fiscal year (in millions). 6 We have selected Relative Total Shareholder Return (rTSR) as our Company Selected Measure, which is the most important financial measure that links company performance with Compensation Actually Paid. The calculations within this column represent the 1-year Relative TSR percentile of our Company as compared against the same peer group as defined in the most recent fiscal year relative TSR PSU agreement.

  56. Relationship Between Compensation Actually Paid and Financial Performance Measures

    Relationship Between Compensation Actually Paid and Financial Performance Measures The graphs below illustrate the relationship between compensation actually paid to our PEO and the average of the compensation actually paid to our remaining NEOs, with (i) our cumulative TSR and peer group TSR, (ii) our net income, and (iii) our relative TSR percentile, in each case, for the fiscal years 2021 through 2023. TSR amounts reported in the graph assume an initial fixed investment of $100, and that all dividends, if any, were reinvested. The following chart illustrates a comparison of our Company's cumulative TSR, the peer group TSR and CAP. CAP values are aligned with the stock price performance of our Company and reflect the Company's use of equity incentives that are directly related to stock price performance. The following chart illustrates a comparison of our Company's Net Income and CAP: The following chart illustrates a comparison of our Company's relative TSR Percentile across each fiscal year relative to CAP:

  57. DIRECTOR COMPENSATION FOR FISCAL 2023

    DIRECTOR COMPENSATION FOR FISCAL 2023 The following table presents all compensation paid to the Company’s directors in fiscal 2023. Dr. Chen was not paid any additional compensation for serving as a director.

  58. DIRECTOR COMPENSATION FOR FISCAL 2023

    | Name | Fees Earned or Paid in Cash | Stock Awards (1)(2) | Total | | Peter T. Kong | $155,000 | $163,457 | $318,457 | | Denise Dignam (3) | $— | $19,286 | $19,286 | | Chin Hu Lim | $68,100 | $163,457 | $231,557 | | Gregory F. Milzcik | $82,500 | $163,457 | $245,957 | | Jon A. Olson | $95,000 | $163,457 | $258,457 | | David Jeffrey Richardson | $87,500 | $163,457 | $250,957 | | Mui Sung Yeo | $82,170 | $163,457 | $245,627 |

  59. DIRECTOR COMPENSATION FOR FISCAL 2023

    (1)As of the end of fiscal 2023, Mr. Olson has 894 shares outstanding shares from the new director grant granted in March 2021 that will fully vest in March of 2024. Mr. Kong, Ms. Dignam, Mr. Lim, Mr. Milzcik, Mr. Richardson, and Ms. Yeo, had no outstanding equity awards as of the end of the fiscal year. (2)The amounts included in the “Stock Awards” column represent the full grant date fair value of compensation cost recognized by the Company related to stock awards for fiscal 2023. (3)Ms. Dignam joined our board of directors in August 2023. Effective June, 2023 we eliminated the $120,000 grant of common shares to each non-employee director upon initial election to the board of directors as it is no longer prevalent practice. Instead, we provide a pro-rated grant to cover the period from the date of appointment until the date when the next quarterly grant is anticipated to be made. Normal quarterly grants are made thereafter. Accordingly, and in light of her appointment as a new director to the Company on August 22, 2023, Ms. Dignam received a pro-rated initial grant of $19,286 worth of common shares, immediately vested upon grant. We align director compensation to our Compensation Peer Group median. In fiscal 2023, the annual board retainer for directors was $65,000 and chairman of the board of directors receives an additional cash annual retainer of $70,000. The Chairs of the Audit Committee, Management Development and Compensation Committee, and Nominating and Governance Committee each received additional annual cash retainers of $25,000, $20,000 and $10,000, respectively. Other members of the Audit Committee, Management Development and Compensation Committee, and Nominating and Governance Committee received additional annual cash retainers of $12,500, $10,000, and $5,000 respectively. Board and committee members did not receive any fees for board or committee meetings held during fiscal 2023. Effective July 2023, the annual equity grants received by directors increased from $158,000 to $180,000. The equity grants are paid in four equal installments on the first business day of each fiscal quarter. To build alignment with executives, we use the same Compensation Peer Group as used for executive compensation benchmarking for director compensation, focusing on total compensation alignment with peer median levels. We review director compensation on an annual basis to ensure continued proper alignment with the market. Each current non-employee director has met the fiscal 2023 stock ownership guideline. For fiscal 2023, the Company applied the following stock ownership guidelines to non-employee directors: •Each non-employee director should beneficially own common shares of the Company with an aggregate market value of at least $195,000, to be attained within five years of election (the aggregate market value requirement will be equivalent to three times the annual cash board retainer); •Prior to reaching the stock ownership requirement, each non-employee director will be required to retain at least 50% of his or her stock awards; •Shares that count toward satisfaction of the stock ownership guideline include shares owned directly by the director, shares owned jointly by the director and his or her spouse, shares held by the director’s immediate family, and shares held in trust for the benefit of the director or a member of the director’s immediate family. Options or other rights to acquire stock do not count toward satisfaction of the guideline; and •Exceptions may be made by the Nominating and Governance Committee of the board of directors in the cases of financial hardship. No exceptions were sought in fiscal 2023.