DEF 14A of Nve Corp /New/
Filed Jun 17, 2024 · FY20240000724910-24-000003
PROPOSAL 1. ELECTION OF BOARD OF DIRECTORS
PROPOSAL 1. ELECTION OF BOARD OF DIRECTORS There are five director nominees, all of whom have been nominated by the Board. All directors are to be elected at the Annual Meeting to serve until the 2025 Annual Meeting of Shareholders. The Board has no reason to believe that any of the nominees will be unable to serve as a director. The individuals named as proxies intend to vote for the nominees listed in this proxy statement. If any nominee should be unable to serve as a director, the individuals named as proxies intend to vote for the election of such person or persons as the Board may recommend. Our director nominees’ skills, experience, and demographics are summarized below:
PROPOSAL 1. ELECTION OF BOARD OF DIRECTORS
| | | Board Skills, Experience, and Demographics (as of June 7, 2024) | | | | | | | | Terrence W. Glarner | Daniel A. Baker | Patricia M. Hollister | James W. Bracke | Kelly Wei | | Skills and Experience | | | | | | | | 1. | Experience as a director at other publicly-traded companies | • | • | | • | | | 2. | Senior executive experience at a publicly-traded company | | • | • | • | • | | 3. | Experience in electronics or semiconductor industries | • | • | • | • | • | | 4. | Experience in the medical device industry | • | • | | • | | | 5. | Experience with corporate development, mergers, and acquisitions | • | • | • | • | • | | 6. | Business-to-business sales management experience | | • | | • | | | 7. | Financial expert | • | • | • | • | • | | 8. | Cybersecurity experience | • | • | • | • | • | | 9. | Experience managing the effects and risks of climate change | • | • | • | • | • | | 10. | Experience managing human capital and enhancing diversity, equity, and inclusion | • | • | • | • | • | | 11. | Experience managing employee health and safety | • | • | • | • | • | | 12. | Experience aligning compensation with strategy and performance | • | • | • | • | • | | 13. | Experience with succession planning and execution | • | • | • | • | • | | 14. | Independent of Management | • | | • | • | • | | Background | | | | | | | | | NVE Board tenure | 25 years | 23 years | 20 years | Three years | One month | | | Age | 81 | 66 | 64 | 77 | 46 | | | Educational background | English; Law | Engineering; Business | Accounting | Microbiology | Engineering; biology and physiology | | | Demographic background | White | White | White | White | Asian | | | Gender identity | Male | Male | Female | Male | Female |
PROPOSAL 1. ELECTION OF BOARD OF DIRECTORS
We believe items 1, 2, 7, 8, 9, 10, 11, 13, and 14 are important for good corporate governance and our Board’s role in risk oversight. Items 8, 9, 10, and 11 relate to emerging risks for public companies. Item 3, experience in the electronics or semiconductor industries, is desirable because we market and sell to electronics industries and our sales strategy relies heavily on semiconductor-industry distribution channels. Item 4, experience in the medical device industry, is desirable because medical device sensors are an important market for us. Item 5, experience with corporate development, mergers, and acquisitions is desirable since such transactions could be part of our growth strategy. Item 6, business-to-business sales management experience, helps our Board review strategies to overcome inherent challenges small semiconductor companies face. Table of Contents In accordance with Nasdaq Rule 5606(a), each director’s voluntary self-identified characteristics are as follows:
PROPOSAL 1. ELECTION OF BOARD OF DIRECTORS
| Board Diversity Matrix (as of June 7, 2024) | | | | | | Total Number of Directors | 5 | | | | | | Female | Male | Non- Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 2 | 3 | - | - | | Part II: Demographic Background | | | | | | African American or Black | - | - | - | - | | Alaskan Native or Native American | - | - | - | - | | Asian | 1 | - | - | - | | Hispanic or Latinx | - | - | - | - | | Native Hawaiian or Pacific Islander | - | - | - | - | | White | 1 | 3 | - | - | | Two or More Races or Ethnicities | - | - | - | - | | LGBTQ+ | - | | | | | Did not Disclose Demographic Background | - | | | |
PROPOSAL 1. ELECTION OF BOARD OF DIRECTORS
Directors’ biographical information is as follows: Terrence W. Glarner has been a director since 1999 and Chairman of the Board since January 2001. Since 1993, Mr. Glarner has been President of West Concord Ventures, Inc., a venture capital company. He has served as a director of several other publicly traded companies in the past. He was also a director of Bremer Financial Corp., a privately held company, until retiring in 2018. Mr. Glarner has a B.A. in English from the University of St. Thomas, a J.D. from the University of Minnesota School of Law, and is a Chartered Financial Analyst. Mr. Glarner’s extensive experience as a director of publicly traded companies, his experience as a director of semiconductor industry companies, his financial expertise, and his legal training qualify him to serve as Chairman of the Board. Daniel A. Baker has been a director and NVE’s President and CEO since 2001. Dr. Baker has more than 45 years of executive and engineering experience. From 1993 until joining NVE, he was President and CEO of Printware, Inc., which manufactures and markets high-speed imaging systems. Prior to being named President and CEO, he was Printware’s Vice President of Sales, Marketing, and Product Development. He was a Printware director from 1993 to 2000. Printware was publicly traded beginning with its initial public stock offering in 1996 through Dr. Baker’s tenure. He also served as Director of Electronic Development for Minntech Corporation (now Cantel Medical Corp., a STERIS company) and Director of Engineering for Percom Data Corporation. Dr. Baker holds Ph.D. in Biomedical Engineering and MBA degrees from the University of Minnesota, and a B.S. in Biomedical Engineering from Case Western Reserve University. Dr. Baker’s more than 35 years of experience as an executive in publicly-traded technology companies, his experience managing product development and sales organizations, his understanding of our business gained through his role as our President and CEO, and his educational background in engineering and business qualify him to serve as a director. Patricia M. Hollister has been a director since 2004. She was Director of Finance for TEL FSI, Inc. (now TEL Manufacturing and Engineering of America, Inc., or “TMEA”) until retiring in 2016. TMEA designs, manufactures, markets, and supports equipment used in the fabrication of microelectronics. Ms. Hollister served as chief financial officer of FSI International Inc. (“FSI”) from 1998 until it was acquired by TEL in 2012. FSI was publicly traded until it was acquired. Prior to joining FSI in 1995, Ms. Hollister was employed by KPMG LLP, where she served for more than 12 years on various audit and consulting engagements, most recently as a Senior Manager. Ms. Hollister holds a B.S. in Accounting from St. Cloud State University. Her experience in the semiconductor industry, her experience as an executive officer of a publicly traded company, her experience with audits of publicly traded companies, and her educational background in accounting qualify her to serve as a director and Audit Committee chair. Table of Contents James W. Bracke has been a director since 2021. Dr. Bracke has been President of Boulder Creek Consulting, LLC, a business and technology consulting firm, since 2004. He was Vice President of Oral Health at EPIEN Medical Inc., a privately-held medical device company, from April 2014 to September 2018. Dr. Bracke was President and CEO of Lifecore Biomedical, Inc., a publicly-held medical device manufacturer, from 1983 to 2004. He has been a director of Autoscope Technologies Corporation (formerly Image Sensing Systems, Inc.) since 2009. Autoscope is a publicly-held corporation dedicated to helping improve safety and efficiency for cities and highways by developing and delivering above-ground detection technology, applications, and solutions. Dr. Bracke is a member of Autoscope’s Audit Committee, Nominating and Corporate Governance Committee, and Compensation Committee. He was Chairman of the Image Sensing Systems Board from September 2011 until June 2016. Dr. Bracke received a Ph.D. in Microbiology from the University of Iowa College of Medicine. Dr. Bracke’s management, technical, medical device, and public company experience and his medical education qualify him to serve as a director. Kelly Wei, age 46, has been a director since May 13, 2024, when she was elected by our Board to fill Richard W. Kramp’s unexpired term following Mr. Kramp’s death. Dr. Wei is Vice President of Corporate Strategy at Medtronic plc. She has held various scientific, engineering, management, and senior management positions at Medtronic since 2007. Dr. Wei started her career as a senior research scientist in cardiac rhythm and disease management at Boston Scientific Corporation in 2004. She has been a member of the Board of Trustees of the Williams Syndrome Association since 2021, and a member of the Board of Directors of Abova, Inc. since February 2024. Abova is a privately-held oral and overall health, technology and science-driven company. She is also a certified executive coach. Dr. Wei has a Ph.D. in Electrical Engineering and an M.S. in Computer Engineering from Rensselaer Polytechnic Institute, an M.S. in Integrative Biology and Physiology from the University of Minnesota Medical School, and a B.S. in Electrical Engineering from Huazhong University of Science and Technology. Dr. Wei’s management, technical, and medical device experience, and her engineering and medical education qualify her to serve as a director. The Board unanimously recommends a vote FOR each of the director-nominees.
CORPORATE GOVERNANCE
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($)(1) | All Other Compensation ($) | Total ($) | | Terrence W. Glarner | 11,000 | - | 23,442 | - | 34,442 | | Patricia M. Hollister | 10,500 | - | 23,442 | - | 33,942 | | Richard W. Kramp(2) | 10,000 | - | 23,442 | - | 33,442 | | James W. Bracke | 10,000 | - | 23,442 | - | 33,442 | | Kelly Wei(3) | - | | - | - | - |
COMPENSATION DISCUSSION AND ANALYSIS
| What We Do | What We Don’t Do | | CEO compensation is aligned with performance. Our CEO compensation is linked to growth and profitability, which we expect to drive shareholder value. Our CEO has significant exposure to our stock price. Although he is not required to do so, our CEO has significant holdings of company stock. As of March 31, 2024, Dr. Baker held company stock with a market value of 13 times his fiscal 2024 salary. | We don’t overpay. Our Compensation Committee believes our NEO pay is similar or less than most comparable public companies. We don’t unduly dilute our shareholders. We have a low stock option burn rate and overhang. Option awards to our CEO have been modest and we have not awarded options to our other NEOs. We don’t have executive perks. Our NEOs have not received any significant benefits or perquisites other than those offered to all employees. Our NEOs receive no pension benefits, nonqualified deferred compensation, or other post-employment potential payments. We don’t provide “golden parachutes.” Like all our employees, our NEOs are employees at will and don’t have change of control or severance agreements. |
COMPENSATION DISCUSSION AND ANALYSIS
| • | Salary to provide a base of compensation. | | • | Bonuses under extraordinary circumstances. | | • | Stock options to provide a longer-term performance incentive and further align the interest of our CEO with those of shareholders. | | • | Performance-based compensation, which is at-risk compensation to reward growth and profitability. | | • | Fringe benefits (designated “other compensation”), which are not excessive, and our NEOs participate in these benefits under the same terms as all other employees. |
EXECUTIVE COMPENSATION
| Name and Principal Position | Fiscal Year Ended March 31, | Salary ($) | Bonus ($) | Option Awards ($)(1)(2) | Non-equity Incentive Plan Compensation($)(3) | All Other Compensation ($)(4) | Total ($) | | Daniel A. Baker | 2024 | 419,600 | - | 50,175 | 93,467 | 14,743 | 577,985 | | President and CEO | 2023 | 400,000 | - | 26,082 | 616,108 | 13,290 | 1,055,480 | | | 2022 | 380,651 | - | 32,067 | 271,562 | 13,307 | 697,587 | | Peter G. Eames | 2024 | 227,900 | - | - | 56,080 | 11,472 | 295,452 | | Vice President, Advanced Technology | 2023 | 215,000 | 20,000 | - | 43,000 | 11,743 | 289,743 | | | 2022 | 201,755 | - | - | - | 10,883 | 212,638 | | Daniel Nelson(5) | 2024 | 90,000 | - | - | 5,000 | (7) | 95,000 | | Principal Financial Officer | 2023 | 36,308 | - | - | - | (7) | 36,308 | | Joseph R. Schmitz(6) | 2024 | 37,189 | - | - | - | (7) | 37,189 | | Former Chief Financial Officer | 2023 | 196,344 | - | - | - | 10,416 | 206,760 | | | 2022 | 33,750 | - | - | - | (7) | 33,750 |
EXECUTIVE COMPENSATION
| | Year Ended March 31, | | | | Adjustments to Determine “Compensation Actually Paid” for CEO | 2024 | 2023 | 2022 | | Deduction for amounts reported under the “Option Awards” columns in the Summary Compensation Table | ($50,175) | ($26,082) | ($32,067) | | Increase for Fair Value of Awards granted during fiscal year that remained unvested as of fiscal year end | 74,600 | 55,975 | 5,500 | | Increase/deduction for change in Fair Value from prior fiscal year-end to vesting date of Awards granted prior to year that vested during the fiscal year | 17,500 | (3,575) | 4,975 | | Total Adjustments | $41,925 | $26,318 | ($21,592) |