DEF 14A of Power Integrations Inc, Mar 31, 2025

DEF 14A of Power Integrations Inc

Filed Mar 31, 2025 · FY20240000833640-25-000093

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The Board is elected annually at the annual meeting of stockholders. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy shall serve for the remainder of the year, and until the director’s successor is duly elected and qualified. This includes vacancies created by an increase in the number of directors. As of March 31, 2025, the Board will have eight members, all of whose terms of office expire at the Annual Meeting. Proxies may not be voted for a greater number of persons than the number of nominees named. Each of the nominees listed below is currently a director of Power Integrations who was previously elected by the stockholders, other than Gregg Lowe, who was appointed by the Board on February 3, 2025 to serve as a director beginning on February 15, 2025. Mr. Lowe was recommended to the Board by the Nominating and Governance Committee following its review of a number of potential nominees. If elected at the Annual Meeting, each of these nominees would be elected and qualified to serve until the 2026 annual meeting of stockholders and until his or her successor is duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. It is Power Integrations’ policy to encourage directors and director nominees to attend the Annual Meeting. All of the Company’s then seven directors attended the 2024 annual meeting of stockholders. All elections shall be determined by a plurality of the votes cast. Unless marked otherwise we will vote executed proxies returned to us for the nominees named below. The eight nominees receiving the highest number of affirmative votes will be elected. If a nominee receives more “Withheld” votes than “For” votes, then notwithstanding the election of that nominee, if the Board determines that, based on the fact that the director received more “Withheld” votes than “For” votes, and the other facts it may deem relevant, the Board may decide to accept the nominee’s conditional resignation previously submitted as required under our Corporate Governance Guidelines. See “How many votes are needed to elect directors?” in “Questions and Answers about These Proxy Materials and Voting” above for a description of these guidelines. If any nominee becomes unavailable for election as a result of an unexpected occurrence, your shares may be voted for the election of a substitute nominee proposed by Power Integrations. Each person nominated for election has agreed to serve if elected. Power Integrations’ management has no reason to believe that any nominee will be unable to serve. This Proposal 1 is to elect the eight nominees as directors named herein. The biography of each of the nominees below contains information regarding such nominees as of March 17, 2025, including age, service as a director, business experience, director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes and skills of each director, including those that led to the Nominating and Governance Committee’s and the Board’s conclusion that each nominee should continue to serve as a director of Power Integrations. Wendy Arienzo, Ph.D., age 69, has served as a director of Power Integrations since April 2017. Dr. Arienzo has more than three decades of technical and managerial experience in technology industries, including the semiconductor and power-electronics industries. From September 2013 to December 2021, she served as vice president of operations at Fujifilm Dimatix, Inc., a subsidiary of Fujifilm Corporation and a leading supplier of piezoelectric industrial print heads. Previously, she was chief executive officer and a director of ArrayPower, a developer of software-defined inverter technology for solar-energy systems. Her prior experience includes a series of executive and technical roles at NXP Semiconductors (and its predecessor, Philips Semiconductor), IBM Corp. and AT&T Bell Laboratories, among others. Dr. Arienzo is also a director of Ichor Holdings, Ltd., a company that designs, engineers, and manufactures fluid delivery subsystems and components for semiconductor capital equipment. Dr. Arienzo has a B.S. and an M.S. in Materials Science Engineering from Brown University, and a Ph.D. in Materials Science Engineering from Stanford University. We believe Dr. Arienzo is qualified to serve as a director due to her extensive leadership experience in the semiconductor and power-electronics industries. Balu Balakrishnan, age 70, has served as president and chief executive officer and as a director of Power Integrations since January 2002 and as Chairman of the Board since May 2023. Mr. Balakrishnan served as president and chief operating officer from April 2001 to January 2002. From January 2000 to April 2001, he was vice president of engineering and strategic marketing. From September 1997 to January 2000, he was vice president of engineering and new business development. From September 1994 to September 1997, Mr. Balakrishnan served as vice president of engineering and marketing. Before joining Power Integrations in 1989, Mr. Balakrishnan was employed for 11 years by National Semiconductor Corporation, where his responsibilities included engineering and product-line management. Mr. Balakrishnan, who has more than 45 years of engineering, marketing and management experience in the semiconductor industry, is the chief inventor of several key Power Integrations products and technologies and has been issued more than 200 U.S. patents. He has received the Discover Award for Technological Innovation as well as a TechAmerica Innovator Award, both in recognition of the environmental benefits of EcoSmart technology. Mr. Balakrishnan has an M.S.E.E. from the University of California, Los Angeles, and a B.S.E.E. from UVCE College of Engineering, Bangalore University, India. He has also completed the Directors Certification Program at the University of California, Los Angeles. We believe Mr. Balakrishnan is qualified to serve as a director due to his extensive leadership experience and his experience in guiding our growth as our president and chief executive officer since 2002. On February 6, 2025, the Company announced Mr. Balakrishnan’s intent to retire from his position as chief executive officer of the Company and that the Board of Directors had retained an executive search firm to assist in identifying the next chief executive officer of the Company. Mr. Balakrishnan intends to serve as executive chairman of the Company’s Board for as long as is needed to ensure a smooth transition to his successor, and is expected to remain on the Board thereafter. Nicholas E. Brathwaite, age 66, has served as a director of Power Integrations since January 2000. A veteran of the semiconductor industry, Mr. Brathwaite served as a member of the board of directors of Tessera Technologies, Inc., a technology innovator that invests in, licenses and delivers innovative miniaturization technologies, from February 2008 until May 2011, Lighting Science Group Corporation, a provider of eco-friendly LED lighting products, from June 2012 to January 2014 and Inphi Corporation, a high speed analog semiconductor company from August 2013 to April 2021. Mr. Brathwaite currently serves on the board of directors of Northwestern Mutual, a financial services organization.

  2. ELECTION OF DIRECTORS

    Mr. Brathwaite is a founding managing partner of Celesta Capital, a deep technology investment firm with investments worldwide (including over ten semiconductor companies), which he joined in 2013 and is also a founding partner of Riverwood Capital, a growth equity, middle market technology investment firm with investments in Asia, Latin America and the United States (including five semiconductor companies), which he joined in January 2008. Mr. Brathwaite has been involved with semiconductor companies, hardware development (including power supplies) and electronic services (including manufacturing) since 1986. Mr. Brathwaite was the chief executive officer of Aptina Imaging Corporation, a fabless semiconductor company and a wholly owned subsidiary of Micron Technology, serving similar markets, customers and applications as those of Power Integrations, from April 2008 to July 2009, and was chairman of the company’s board of directors until Aptina was acquired by ON Semiconductor in August 2014. He served as the vice president of technology of Flextronics International Ltd., an electronics company, from 1995 to 2000, and as Flextronics’ chief technology officer from 2000 until 2007, where he played a leading role in the transformation of Flextronics from a small contract manufacturer to a global electronics manufacturing service provider, during which revenues grew from $150 million to $30 billion. At Flextronics he initiated, built and managed several businesses with revenues ranging from $30 million to $6 billion, including ODM services, power supplies and other component businesses. He joined Flextronics in 1995 when Flextronics acquired nChip, Inc., a multi-chip module company, where Mr. Brathwaite held the position of vice president and general manager of operations from 1992 to 1996. As a founding member of nChip, Inc., Mr. Brathwaite was responsible for all manufacturing and operational activities including wafer fabrication, wafer test and module assembly. Before joining nChip, Inc., Mr. Brathwaite spent six years with Intel Corporation, a microprocessor company, in various engineering management positions in technology development and manufacturing. Mr. Brathwaite has significant experience in mergers and acquisitions, having participated in more than 50 transactions ranging from $2 million to $10 billion; he was a member of Flextronics’s four-person acquisition committee and was responsible for leading due diligence and integration activities on several of these acquisitions. Mr. Brathwaite is familiar with many of Power Integrations’ customers, including important decision makers and decision-making processes, and is familiar with Asian and European markets, supply-chain and business processes. Mr. Brathwaite received a B.S. in Applied Chemistry from McMaster University, and an M.S. in Polymer Science & Engineering from University of Waterloo. Mr. Brathwaite has also completed the Wharton Executive Education Training Program on Corporate Governance. We believe Mr. Brathwaite is qualified to serve as a director due to his executive leadership and financial and investment experience, as well as his public company board experience. Anita Ganti, age 53, has served as director of Power Integrations since April 2020 and as Lead Director - Cybersecurity since January 2025. Mrs. Ganti is a seasoned leader in the technology industry, including extensive experience in the analog semiconductor industry. She has been a customer-facing executive fostering executive level engagements with customers such as Apple, Google, Microsoft, Facebook, FedEx, Walmart, Comcast, Telstra, Starbucks, Medtronic and Cisco. From 2015 to 2019 she served as senior vice president of the product engineering services organization of Wipro Limited, a leading global information technology, consulting and business process services company, where she was responsible for offerings and operations with annual revenues exceeding $600 million. Previously she was vice president of global technology at Flex Ltd. (formerly Flextronics), a global electronics manufacturing services company, from 2013 to 2015. From 2008 to 2013 Mrs. Ganti was employed by Texas Instruments, a global semiconductor design and manufacturing company, where she served as general manager of the company’s precision signal path division. Since 2008 she has undertaken business transformation and turnarounds, delivering results through change and growth, including acquisitions. Mrs. Ganti has led diverse teams across multiple geographical locations. She has not only built businesses from concept to market leadership but also built alliances with technology partners and customers. She mentors women taking on leadership roles in technology organizations and champions diversity and inclusion. Mrs. Ganti previously served on the board of directors of Exro Technologies, Inc. and currently serves on the board of directors of Silvaco, Inc. Mrs. Ganti has a bachelor’s degree in electrical engineering from Veermata Jijabai Technological Institute in India, an M.S.E.E. from Virginia Polytechnic Institute and State University, and an M.B.A. from the Wharton School, University of Pennsylvania. We believe Mrs. Ganti is qualified to serve as a director due to her extensive operating experience and executive leadership and her deep knowledge of the technology industry. Nancy Gioia, age 64, has served as a director of Power Integrations since January 2023. Ms. Gioia retired from Ford Motor Company in 2014 after more than 33 years of service including executive roles in product development, manufacturing, and strategy and planning. Among her roles at Ford, she served as director of global electrification, leading all aspects of the company’s electrified vehicle technologies and product portfolio. She currently serves on the board of Exro Technologies, Inc.; her past board roles include Brady Corporation, Lucid Group, Meggitt PLC and Exelon Corporation and as executive chair at Blue Current, Inc.. She also serves on the University of Michigan – Dearborn ESEE Dean’s Advisory Committee; her past university roles include Chair of the Industrial Advisory Committee at Stanford University. Ms. Gioia holds a bachelor’s degree in Electrical Engineering from the University of Michigan – Dearborn and a M.S. in Manufacturing Systems Engineering from Stanford University. We believe Ms. Gioia is qualified to serve as a director due to her decades of experience at a leading global automaker, her business expertise, and her extensive knowledge of the automotive industry. Balakrishnan S. Iyer, age 68, has served as a director of Power Integrations since February 2004 and as Lead Independent Director of the Board since May 2023. Mr. Iyer has served on public company boards since 2001. He served on the board of directors of Clarivate Plc, a global leader in providing trusted insights and analytics, until December 2022. Mr. Iyer also served on the board of directors of Skyworks Solutions until May 2020; Churchill Capital Corp, a special purpose acquisition company, until its merger with Clarivate Analytics in May 2019; IHS Markit, until April 2019; QLogic Corporation, until its acquisition by Cavium in August 2016; IHS Inc., until its merger with Markit Ltd. in July 2016; Life Technologies Corporation, prior to its acquisition by Thermo Fisher Scientific Inc. in 2014; Overture Systems, prior to the sale of the company to Yahoo; and Conexant Systems, Inc., a designer, developer and seller of semiconductor systems solutions for communications applications, prior to the company’s acquisition by Golden Gate Capital.

  3. ELECTION OF DIRECTORS

    Mr. Iyer retired from Conexant Systems in 2003 after serving for five years as senior vice president and chief financial officer. In that role, Mr. Iyer was responsible for all the financial functions for the company including operational finance, controllership, treasury, tax and investor relations as well as strategy and business development. He raised $1 billion for the company and completed more than a dozen acquisitions valued at over $2 billion. He also led the execution of the strategic restructuring of the company from an integrated semiconductor company with a full range of manufacturing operations to a family of pure-play fabless semiconductor companies. Earlier in his career, Mr. Iyer worked in Silicon Valley for 17 years in the semiconductor industry in finance roles at Advanced Micro Devices, Cypress Semiconductor and VLSI Technology (where he was senior vice president and chief financial officer), and in engineering roles at National Semiconductor Corporation. Mr. Iyer has significant experience in audit committee matters, as well as corporate governance, financing and acquisition matters. At IHS, he served as chairman of the audit committee since he joined its board of directors in 2003 until its merger with Markit in July 2016, helping oversee the company’s preparation to become a public company, including the recruiting of key finance team members, preparation of the registration statement and implementation of Sarbanes-Oxley Act Section 404. Mr. Iyer was previously chairman of the audit committee at QLogic and chairman of the audit and nominating committees at Life Technologies and Skyworks Solutions as well as the governance and nominating committee at Conexant Systems. He serves on the board of directors of the Forum for Corporate Directors, an organization focused on corporate governance and also on the advisory board of the NACD Pacific Southwest Chapter as well as the California State University Fullerton Center for Corporate Reporting and Governance. In December 2024, Mr. Iyer joined as chairman of the board to Cato Supply, an early-stage private company which is in the business of providing supply chain solutions in the healthcare space. As a board member, Mr. Iyer has overseen more than 100 acquisitions and divestitures valued at over $50 billion, and more than $10 billion in equity and debt financing. Mr. Iyer has a B.S. in Mechanical Engineering from the Indian Institute of Technology, an M.S. in Industrial Engineering from the University of California, Berkeley and an M.B.A. in Finance from the Wharton School, University of Pennsylvania. We believe Mr. Iyer is qualified to serve as a director due to his extensive experience overseeing a wide range of public companies, his business expertise in the semiconductor industry and his financial management expertise. Gregg Lowe, age 62, was appointed as a director of Power Integrations, effective February 15, 2025. Mr. Lowe was the president and chief executive officer of Wolfspeed, Inc., the leader in silicon carbide solutions for high power applications, from September 2017 until November 2024. Mr. Lowe previously served as president and chief executive officer of Freescale Semiconductor from June 2012 until its merger with NXP in 2015. Prior, Mr. Lowe served as senior vice president and manager of the analog business for Texas Instruments where he helped to direct the acquisition of National Semiconductor. During his 27 years at Texas Instruments, Mr. Lowe served in a succession of roles including various leadership positions across field sales, automotive sales, marketing and integrated circuits where he oversaw a global team with design centers and customers across the globe. Mr. Lowe currently serves on the boards of Silicon Laboratories, Inc., The Rock & Roll Hall of Fame Museum and North Carolina A&T University. Mr. Lowe has a bachelor of science degree in electrical engineering from Rose-Hulman Institute of Technology in Terre Haute, Indiana and is a graduate from the Stanford Executive Program at Stanford University. We believe Mr. Lowe is qualified to serve as a director due to his extensive executive experience and knowledge of the semiconductor sector, as well as his public company board experience. Ravi Vig, age 64, has served as a director of Power Integrations since April 2023. Mr. Vig served as president and chief executive officer and on the board of directors of Allegro MicroSystems, Inc., a global leader in power and sensing semiconductors, until his retirement in June 2022. During his 38-year career at Allegro and its parent company, Sanken North America, Mr. Vig served in a succession of roles including leadership of Allegro’s sensor business unit and its business-development organization before becoming chief executive officer of Allegro in 2017. In 2017 he brought in private equity investment into a previously privately held company, beginning the process of restructuring and corporate transformation. As president and chief executive officer, he transformed Allegro into a fabless, asset-lite, high-growth, innovation-focused company and market leader in power and sensing semiconductors. In 2020, he brought the company public and steered it onto a path of strong equity growth, accelerating revenue and greatly improving gross margins. During his leadership, Allegro was named to Inc. Magazine’s Best Led Companies list. Mr. Vig served as a member of the board of directors of Anokiwave, a privately held, fabless semiconductor company, and assisted them in a successful sale of the company in February 2024. Mr. Vig is also a member of the board of trustees for the Committee for Economic Development of the Conference Board as well as a Trustee and Finance committee member of Endicott College. Mr. Vig holds a B.S. in Electrical Engineering from Rutgers University, an M.S. in Electrical Engineering from Dartmouth College, an M.B.A. from Southern New Hampshire University, and a leadership certificate from Yale University’s Graduate School of Management. Mr. Vig holds more than 60 patents in semiconductor and sensor design, applications and packaging. We believe Mr. Vig is qualified to serve as a director due to his extensive strategic, technical and operational knowledge of the semiconductor sector and automotive and industrial markets and global customer engagement expertise.

  4. THE BOARD RECOMMENDS

    THE BOARD RECOMMENDS

  5. A VOTE IN FAVOR OF EACH NAMED NOMINEE

    A VOTE IN FAVOR OF EACH NAMED NOMINEE

  6. Board Skills Matrix

    Board Skills Matrix Our directors have a wide variety of relevant skills, professional experience and backgrounds, and collectively bring to our Board viewpoints and perspectives that strengthen its ability to represent the interests of all corporate stakeholders, such as shareholders, creditors, employees, customers and suppliers. The table below illustrates broad categories of skills and expertise that our director nominees offer that we believe contribute to the effective leadership and exercise of oversight responsibilities by the Board.

  7. Board Skills Matrix

    | Competencies | Wendy Arienzo | Balu Balakrishnan | Nicholas E. Brathwaite | Anita Ganti | Nancy Gioia | Balakrishnan S. Iyer | Gregg Lowe | Ravi Vig | | Semiconductor/electronics industry experience | X | X | X | X | | X | X | X | | Engineering training/experience | X | X | X | X | X | X | | X | | Public-company senior management experience | X | X | X | X | X | X | X | X | | Corporate finance/accounting expertise | | X | | | | X | X | X | | Human capital management | X | X | X | X | X | | X | X | | Supply chain/manufacturing experience | X | X | X | X | X | | X | X | | Sales/marketing experience | | X | X | X | | | X | X | | Enterprise risk management | | X | | X | X | X | | | | Automotive industry experience | | | X | X | X | | X | X | | Additional Information | | | | | | | | | | Age | 69 | 70 | 66 | 53 | 64 | 68 | 62 | 64 | | Gender | F | M | M | F | F | M | M | M | | Board member since | 2017 | 2002 | 2000 | 2020 | 2023 | 2004 | 2025 | 2023 |

  8. Independence of the Board

    Independence of the Board As required under the listing standards of The Nasdaq Stock Market LLC (“Nasdaq”), a majority of the members of our Board must qualify as “independent,” as affirmatively determined by the Board. The Board consults with Power Integrations’ counsel to ensure that the Board’s determinations are consistent with all relevant securities laws and other laws and regulations regarding the definition of “independent,” including those set forth in the applicable Nasdaq listing standards, as in effect from time to time. Consistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or her family members, and Power Integrations, its senior management and its independent registered public accounting firm, the Board has affirmatively determined that all of the directors, other than Mr. Balakrishnan, our president and chief executive officer, are independent directors within the meaning of the applicable Nasdaq listing standards. In making this determination, the Board found that none of the directors or nominees for director other than Mr. Balakrishnan had a material or other disqualifying relationship with Power Integrations. Mr. Balakrishnan, by virtue of being Power Integrations’ president and chief executive officer, is not an independent director.

  9. Information Regarding the Board and Its Committees

    Information Regarding the Board and Its Committees The Board has adopted the Corporate Governance Guidelines to help assure that the Board will have the necessary authority and practices in place to make decisions that are independent of Power Integrations’ management. The guidelines are also intended to align the interests of directors and management with Power Integrations’ stockholders. The Corporate Governance Guidelines set forth the practices the Board will follow with respect to, among other things, Board composition and selection, Board meetings, executive officer succession planning, Board committees, compensation, director stock ownership and director education and orientation. The Corporate Governance Guidelines are available on our website: www.power.com. The Board has an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. The following table provides membership information and meeting information for fiscal year 2024 for each of the Audit, Compensation and Nominating and Governance Committees:

  10. Information Regarding the Board and Its Committees

    | | | | Nominating and | | Name | Audit | Compensation | Governance | | Wendy Arienzo | | X† | X | | Nicholas E. Brathwaite | | X | X† | | Balakrishnan S. Iyer | X† | | X | | Anita Ganti | X | | | | Nancy Gioia | | X | | | Ravi Vig | X | | | | Total meetings in year 2024 | 5 | 6 | 4 |

  11. Information Regarding the Board and Its Committees

    | † Committee Chair. |

  12. Information Regarding the Board and Its Committees

    Below is a description of each committee of the Board. Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. The Board has determined that each member of each committee meets the applicable rules and regulations regarding “independence” and that each member is free of any relationship that would interfere with his or her individual exercise of independent judgment with regard to Power Integrations.

  13. COMPENSATION OF DIRECTORS

    COMPENSATION OF DIRECTORS Cash Compensation. Pursuant to our cash compensation policy, each of our directors, with the exception of Mr. Balakrishnan, currently receives $11,250 per quarter to serve as a member of the Board, and the chairman of the Board, or Lead Independent Director when the chairman of the Board is an employee of our company, currently receives an additional $7,500 per quarter to serve in such capacity. Our non-employee directors do not receive per-meeting fees. In addition, the chairs of the Audit Committee, Compensation Committee and Nominating and Governance Committee, currently receive $5,000, $3,750 and $2,500 per quarter, respectively. Non-chair members of the Audit Committee, Compensation Committee and Nominating and Governance Committee currently receive $2,500, $2,000 and $1,250 per quarter, respectively, to serve on these committees. As discussed in Proposal 5 above, our Compensation Committee reviews director compensation periodically, and has not modified director compensation since May 2021. Aon, the Compensation Committee’s independent advisor, provided detailed information regarding competitive practices for annual cash and equity retainers for directors as part of the Compensation Committee’s review in 2024. Aon found our board compensation to be positioned below the 25th percentile for both cash and equity components, and recommended adjustments to re-align the program with the market median. As a result of this feedback, the Compensation Committee recommended changes to our cash compensation policy. Accordingly, beginning on July 1, 2025, each of our directors, with the exception of Mr. Balakrishnan, shall receive $15,000 per quarter to serve as a member of the Board, and the chairman of the Board, or Lead Independent Director when the chairman of the Board is an employee of our company, shall receive an additional $7,500 per quarter to serve in such capacity. Additionally, beginning on July 1, 2025, to position our compensation program relative to the market median, the chairs of the Audit Committee, Compensation Committee and Nominating and Governance Committee, shall receive $6,250, $5,000 and $2,500 per quarter, respectively. Non-chair members of the Audit Committee, Compensation Committee and Nominating and Governance Committee shall receive $2,500, $2,250 and $1,250 per quarter, respectively, to serve on these committees. Our Lead Director – Cybersecurity shall receive $1,875 per quarter. These changes to cash compensation combined with the changes to the director equity awards described below, if Proposal 5 is approved, would better position director compensation relative to the market median. Based on these changes and the current roles and responsibilities in effect, our director compensation for 2025 would range from $252,500 to $310,000. Non-employee directors are reimbursed for all reasonable travel and related expenses incurred in connection with attending Board and committee meetings. Equity Awards. Additionally, directors who are not employees of Power Integrations each receive equity compensation. Initial and annual equity incentive grants are made to non-employee directors primarily under the Power Integrations 2016 Incentive Award Plan (the “2016 Plan”) as follows (the “Directors Equity Compensation Program”):

  14. COMPENSATION OF DIRECTORS

    | ● | Subject to approval of the Amended 2016 Plan, on the first trading day of July in each year beginning in 2025 (the “Regular Grant Date”), each continuing eligible director will receive a grant of an equity award in the form RSUs under the 2016 Plan with an aggregate value of $200,000 (the “Equity Award”). Fiscal Year 2024 director grants were at the then approved aggregate value of $120,000 (the “Equity Award”). Each such Equity Award would vest in full effective immediately prior to the commencement of the Company’s first annual meeting of stockholders in the year following the year of the Regular Grant Date, provided that the recipient is still providing services to the Company as a director and provided further, that 100% of the shares subject to such Equity Award would be deemed fully vested upon the occurrence of a “Change of Control,” as such term is defined in the 2016 Plan; |

  15. COMPENSATION OF DIRECTORS

    | ● | A new eligible director generally would receive an Equity Award consisting of RSUs equal to the prorated portion of the Company’s annual Equity Awards based on the time between the date the new director is appointed to the Board and the first trading day of Nasdaq in the month of July following such director’s appointment; and |

  16. COMPENSATION OF DIRECTORS

    | ● | The Directors Equity Compensation Program will remain in effect at the discretion of the Board or the Compensation Committee. |

  17. COMPENSATION OF DIRECTORS

    Mr. Balakrishnan, our chief executive officer and president, was not compensated for his services as Chairman and member of the Board. The following table shows for the fiscal year ended December 31, 2024 certain information with respect to the compensation of all non-employee directors of Power Integrations:

  18. Director Compensation for Fiscal Year 2024

    Director Compensation for Fiscal Year 2024

  19. Director Compensation for Fiscal Year 2024

    | | Fees Earned or | Restricted Stock | | | Name | Paid in Cash(1) | Unit Awards(2)(3) | Total | | Wendy Arienzo | $65,000 | $119,936 | $184,936 | | Nicholas E. Brathwaite | $63,000 | $119,936 | $182,936 | | Anita Ganti | $55,000 | $119,936 | $174,936 | | Nancy Gioia | $53,000 | $119,936 | $172,936 | | Balakrishnan S. Iyer | $100,000 | $119,936 | $219,936 | | Ravi Vig | $55,000 | $119,936 | $174,936 |

  20. Director Compensation for Fiscal Year 2024

    | (1) This column represents annual director fees and committee fees earned in 2024. |

  21. Director Compensation for Fiscal Year 2024

    | (2) Represents the grant date fair value of RSU awards granted in fiscal year 2024, determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC 718”). The grant date fair value was calculated by multiplying the closing market price of our common stock on the grant date by the number of shares underlying the award, reduced by the discounted present value of dividends expected to be declared before the awards vest. |

  22. Director Compensation for Fiscal Year 2024

    | (3) As of December 31, 2024, each of the listed non-employee directors held 1,721 unvested restricted stock units. |

  23. Compensation Discussion and Analysis

    | 4. | To align the incentives of our executives with the interests of our stockholders by providing equity awards to executives so that each executive has a meaningful ownership interest in our company; and |

  24. Compensation Discussion and Analysis

    To achieve these objectives, the Compensation Committee implements and maintains compensation plans that tie a substantial portion of the executives’ overall compensation to our company’s financial performance and the price of our common stock. Overall, an executive’s total compensation is intended to create an executive compensation program that is set at levels competitive with the executive compensation paid by other comparable public technology companies. The Compensation Committee believed the metrics of the 2024 executive compensation plan (the “2024 Plan”) were directly tied to our core operating performance, were key factors in driving stockholder value, and were important business elements that Power Integrations’ executives could meaningfully influence. By focusing on these metrics, the Compensation Committee sought to align the financial interests of our executives with those of our stockholders. Role of Our Chief Executive Officer in Determining Compensation. Mr. Balakrishnan, Power Integrations’ president and chief executive officer, reviews with the Compensation Committee on a regular basis our compensation philosophy and programs, including with respect to the named executive officers (the executive officers appearing in our summary compensation table in this proxy), so that the Compensation Committee can make any changes necessary to keep the company’s compensation philosophy and programs aligned with the company’s business objectives. Mr. Balakrishnan makes recommendations to the Compensation Committee with respect to the compensation of the named executive officers. The Compensation Committee also utilizes an outside compensation consultant to stay abreast of developments in the competitive landscape for executive compensation. The Compensation Committee considers, but is not bound to and does not always accept, management’s and the outside consultant’s recommendations with respect to executive compensation. The Compensation Committee discusses Mr. Balakrishnan’s compensation with him, but deliberates and makes decisions with respect to Mr. Balakrishnan’s compensation without him present. Comparative Compensation Analysis and Role of Compensation Consultant. Power Integrations generally aligns both its cash and equity compensation to market comparables. In 2024, the Compensation Committee engaged an independent compensation consulting firm, Radford, part of the Rewards and Solutions practice at Aon plc (“Aon”), to assist in the analysis of compensation survey data. Aon attends Compensation Committee meetings from time to time and provides peer-group analysis, feedback and recommendations to the Compensation Committee. In addition to survey data, the Compensation Committee considers from time to time information reported in peer companies’ SEC filings for all elements of compensation, including salary, annual cash and equity incentive or bonus compensation, and equity compensation. In 2024, Aon performed a review of the performance metrics (revenue, non-GAAP operating income and strategic goals) used in connection with the establishment of the 2024 Plan, including the number of PSUs granted to each of the named executive officers, and the revenue target used in connection with the company’s grant of PRSUs. The Compensation Committee utilized Aon’s compensation survey performed in the fall of 2022 to complete the 2024 compensation review. The 2022 peer analysis considered peer companies to be U.S. based semiconductor companies with similar global scope and complexity, and businesses falling into specific categories of semiconductors and related services, such as integrated circuits, semiconductor solutions and computer communications and with revenues between 50% to 250% Power Integrations’ revenues and market capitalizations of 33% to 300% of Power Integrations’ market capitalization. The peer group that resulted from this screening method consisted of 17 companies and was large and diverse enough that the addition or elimination of any two companies did not alter the overall analysis materially. The full list of seventeen companies was as follows:

  25. Compensation Discussion and Analysis

    In 2024, the Compensation Committee considered a variety of general reference points, including the 25th, 50th and 75th percentiles when determining compensation for the named executive officers. In 2024, based on the 2022 Aon assessment and other relevant factors, the Compensation Committee determined it was appropriate that Mr. Balakrishnan’s and the named executive officers’ equity compensation and equity grants for 2024 be the same combination of RSUs, PSUs and PRSUs as was granted in 2023. The PRSU grants are intended to promote and retain stability within the executive team by setting multi-year performance targets. The Compensation Committee is not bound by award formulas and is free to exercise its discretion to adjust salaries, bonus awards and equity awards. Generally, in arriving at compensation levels the Compensation Committee also considers the pay history of each executive, the relative pay among executives, the performance of the company and the performance and experience of each executive. The Role of Stockholder Say-on-Pay Votes. Each year since 2011, we have provided our stockholders with the opportunity to cast an advisory vote on executive compensation, and at each of these annual meetings of stockholders our stockholders approved the disclosure of the executive compensation plans. In 2024, more than 80% of the votes cast at the annual meetings of stockholders were cast in favor of the disclosure of the compensation of our named executive officers. The Compensation Committee viewed this approval as a strong endorsement of our compensation policies and practices and continued to conduct itself in a manner consistent with past practice in establishing the following year’s base salaries and equity compensation. Although the stockholder vote is non-binding, the Compensation Committee will consider the outcome of future votes, including the vote which will take place at the Annual Meeting, when making future compensation decisions for named executive officers.

  26. Executive Compensation Components

    | b) | performance-based equity incentive awards (“PSUs”), |

  27. Executive Compensation Components

    | c) | long-term performance-based equity incentive awards (“PRSUs”) and |

  28. Executive Compensation Components

    | d) | long-term time-based equity incentive awards (“RSUs”). |

  29. Executive Compensation Components

    In addition, the named executive officers are eligible to participate in our health and welfare programs, employee stock purchase plan (subject to limitations), 401(k) plan and other benefit programs generally available to employees of the company. Base Salary. We pay a base salary to each of our named executive officers to provide an appropriate and competitive base level of current cash income. The Compensation Committee generally reviews base salaries annually, and adjusts them from time to time to realign salaries with perceived market levels after taking into account individual responsibilities, performance and experience. In 2024, the Compensation Committee granted salary increases of approximately 4% for the Company’s chief executive officer and 3% for the other named executive officers. The adjusted salary levels were consistent with peer company salary levels for analogous positions. Short-term Performance-based Equity Incentive Awards. The Compensation Committee believes that a substantial portion of the annual compensation for each executive officer should be in the form of variable (i.e., performance-based) equity incentive awards. These awards are intended to compensate executive officers for achieving annual financial goals at the corporate level. The Compensation Committee utilizes these awards to attract and retain qualified executives, align their interests with those of the Company’s stockholders, and provide appropriate executive and leadership incentives. In 2024, as in prior years, the Compensation Committee granted performance-based equity incentive awards in the form of PSUs. The aggregate value of PSUs awarded on the grant date to all of the named executive officers was approximately 3% higher than the PSUs awarded pursuant to the 2023 Plan. The PSUs are awarded at the beginning of the fiscal year in the amount of 200% of the number of shares that will ultimately vest if the one-year target performance criteria are met but not exceeded. The PSUs vest depending on the extent to which the Company meets or exceeds the minimum performance criteria discussed under “Mechanics of 2024 Performance-based Equity Incentive Awards” below; the amount of shares vesting can range from zero to 100% of the shares awarded. In 2024, the Compensation Committee utilized an Aon survey and 2022 peer group analysis directly comparing the value of individual 2022 target PSU awards with the short-term incentive compensation paid to executive officers in analogous positions at peer companies in verifying the Compensation Committee’s general reference point for the 2024 target value. The value of the PSU grants for each officer at target was generally between the 25th and 75th percentiles of the value of cash targets for each position in the Aon survey. Overall, the value of 2024 PSU target compensation was approximately 135% of the annual base salary for the company’s chief executive officer and approximately 60% to 78% of annual base salary for the company’s other named executive officers. These percentages are consistent with 2023. Mechanics of 2024 Performance-based Equity Incentive Awards For the 2024 Plan, the Compensation Committee determined that the number of shares subject to the PSUs that would ultimately vest, and therefore our officers would receive, would be determined based upon the company’s 2024 performance in three areas: net revenue, non-GAAP operating income and strategic goals. The Compensation Committee’s intent in the design of the 2024 Plan was to emphasize revenue growth and to focus management on operating profitability by tying vesting to non-GAAP operating income (as defined below) and create long-term value for our stockholders. The weighting of these components was as follows:

  30. Executive Compensation Components

    | (1) No PSUs would vest for a specific performance goal if Power Integrations’ 2024 actual net revenue or revenue growth rate, actual non-GAAP operating income and strategic goals, as applicable, did not exceed at least an established minimum amount as set forth in the 2024 Plan. |

  31. Executive Compensation Components

    | (2) Target represents the number of PSUs which would vest for a specific goal if Power Integrations’ 2024 actual net revenue or revenue growth, actual non-GAAP operating income and strategic goals, as applicable, met but did not exceed the established target amount as set forth in the 2024 Plan. |

  32. Executive Compensation Components

    “Non-GAAP operating income” means operating income for 2024 determined in accordance with the generally accepted accounting principles in the United States (“GAAP”) but excluding the following items: (i) stock-based compensation expenses recorded under Accounting Standard Codification 718-10; (ii) amortization of acquisition-related intangible assets and the fair-value write-up of acquired inventory, (iii) any other expenses related to mergers and acquisitions and (iv) any other adjustment made to arrive at the company’s non-GAAP financial information as presented in our SEC filings. The Compensation Committee excluded these items because the Compensation Committee reasoned that these items were not indicative of operating performance and did not relate to achieving Power Integrations’ compensation objectives. Revenue Component: The Company regards revenue growth as a key measure of its success and maintains a goal of growing revenues at a rate exceeding that of the analog semiconductor industry as reported by World Semiconductor Trade Statistics (“WSTS”). The Compensation Committee set the below revenue thresholds based on the prevailing macroeconomic and industry conditions, intending that the difficulty of attaining the thresholds would be consistent with that of prior years, i.e., that the target and maximum levels under the 2024 Plan represented challenging, aggressive goals. The PSUs vesting under the revenue component shall be calculated based on an Absolute Measure and Relative Measure, each as described below, with the higher of the two calculations resulting in the actual shares vested. Absolute Measure: The PSUs would not vest for the named executive officers with respect to the revenue component of the 2024 Plan if 2024 revenues failed to exceed $440 million. To the extent 2024 actual revenues exceeded $440 million, the number of shares subject to the PSUs vesting would have increased linearly from zero at $440 million, up to 100% of the target amount at $460 million, and linearly from that level up to a maximum of 200% of the target amount at $480 million. Relative Measure: The PSUs would not vest for the named executive officers with respect to the revenue component of the 2024 Plan if the Company’s revenue annual growth rate (“AGR”) for the year ended December 31, 2024, failed to exceed a minimum threshold set at four percentage points lower than the revenue AGR of the analog semiconductor industry (the “Index”), derived using historical and forecasted revenue data reported by World Semiconductor Trade Statistics (“WSTS”). To the extent the Company’s revenue AGR exceeded the minimum threshold of four percentage points below the Index, the number of PSU shares vesting would have increased linearly from zero at the minimum threshold, up to 100% of the target amount when the Company’s revenue AGR was equal to the Index, and linearly from that level up to a maximum of 200% of the target amount when the Company’s revenue AGR was equal to or greater than four percentage points higher than the Index. In the event that the Company’s revenue AGR is zero or negative, vesting is limited to no more than 100% of the target amount. In January 2025, under the revenue component, based on the Relative Measure achieved in 2024, the Compensation Committee determined that approximately 12% of the total target PSUs awarded would vest in 2025. Non-GAAP Operating Income Component: The PSUs would not vest for the named executive officers with respect to the non-GAAP operating income component of the 2024 Plan if 2024 non-GAAP operating income failed to exceed $55.1 million. To the extent actual non-GAAP operating income exceeded $55.1 million, the number of shares subject to the PSUs vesting would have increased linearly from zero at $55.1 million of non-GAAP operating income up to 100% of the target amount at $67.9 million, and linearly from that level up to a maximum of 200% of the target amount at $81.6 million. The non-GAAP operating income thresholds were derived from the revenue thresholds based on the Board-approved budget for 2024. The Compensation Committee believed that reaching these levels would have been unlikely without market-share gains and operational effectiveness. In January 2025, under the non-GAAP operating income component, based on the $54.0 million of non-GAAP operating income achieved in 2024, the Compensation Committee determined that none of the total target PSUs awarded would vest in 2025. Strategic Goals Component: The PSUs would not vest for the named executive officers with respect to the strategic-goals component of the 2024 Plan if the established goals were not achieved. Each of the strategic goals was assigned a percentage of 2% to 20% adding up to 40% of the target. The strategic-goals portion of the 2024 Plan consisted of six strategic goals, including goals related to product development, design wins impacting future revenue growth, targeted market penetration through flat rate of design wins, increased wafer and manufacturing capacity and manufacturing cost reductions. If all of the strategic goals met or exceeded the minimum established threshold, then the number of shares subject to PSU vesting for the strategic goals component would have increased linearly from zero at the minimum level up to 100% if the target strategic goals were met, and up to a maximum of 200% if the stretch strategic goals were met or exceeded. In January 2025, under the strategic goals component, based on the level of strategic goals achieved in 2024, the Compensation Committee determined that approximately 190% of the total target PSUs awarded would vest in 2025. Long-term Equity Incentive Awards. In 2024, the Compensation Committee approved grants of RSUs and PRSUs. The RSU awards typically have a four-year vesting period with one-fourth of the RSUs vesting on each anniversary of the grant-date over four years, in accordance with the Company’s standard vesting schedule for RSUs. The Company’s PRSU program provides for the issuance of PRSUs which will vest on the three-year period ending December 31, 2026, based on the Company’s performance measured against the PRSU program’s established performance targets. PRSUs are granted in an amount equal to twice the target number of shares to be issued if the maximum performance metrics are met. The actual number of shares the recipient receives is determined at the end of a three-year performance period based on results achieved versus the Company’s performance goals, and may range from zero to 200% of the target number. The actual vesting for PRSUs granted in fiscal 2024 shall be based on higher achievement under either the

  33. Executive Compensation Components

    “Relative Measure” or the “Absolute Measure”. The Relative Measure is based on the Company’s compound annual growth rate (“CAGR”) of revenue as measured against the revenue CAGR of the analog semiconductor industry (“Relative Measure”), over the respective three-year performance period. The Absolute Measure is a performance goal related to the Company’s revenue growth over the respective three-year performance period as compared to defined internal revenue targets. Both described measures of multi-year targets for growth are intended to have difficulty in attaining. As with the PSUs, the PRSUs are awarded in the amount of 200% of the number of shares that will ultimately vest if the target revenue threshold is met but not exceeded, with the full amount vesting if the maximum is met or exceeded. The portion of PRSUs that will vest will be calculated as described above for the three-year period ending December 31, 2026 as compared to the established minimum, target and maximum thresholds, and will vest in early 2027 upon determination by the Compensation Committee of the achievement of the performance condition. In the event of any mergers, acquisitions or divestitures or any patent or other litigation settlements or judgements during the performance period, the minimum, target and maximum revenue thresholds shall be adjusted based on an approved plan presented to the Board. The 2024 PRSU awards would not vest in early 2027 if the Company’s actual revenue CAGR or net revenues for the three-year period ending December 31, 2026 does not exceed at least the established minimum threshold amount under either the Relative Measure or Absolute Measure, respectively. To the extent the revenue CAGR or net revenues for the three-year period ending December 31, 2026 exceeds the minimum threshold, the PRSU vesting would increase linearly from zero at the minimum threshold up to 100% of the target threshold, with the number of shares vesting increasing linearly above the target threshold, up to a maximum of 200% of the target amount of shares based on higher achievement under the Relative Measure or the Absolute Measure. At this point, based on current projections, the maximum vesting of PRSUs would be achieved. Determination of Amounts of RSUs and PRSUs The Compensation Committee approved a target PRSU grant of 50,300 units and a RSU grant of 50,300 units, to Mr. Balakrishnan. The aggregate target grant-date fair value of these grants was $6.9 million. The Compensation Committee considered the value of the PRSU grant as a percentage of the total long-term equity award. For the chief executive officer’s 2024 equity grants, the Compensation Committee awarded 50% in the form of target PRSUs and 50% in the form of RSUs. This percentage was deemed appropriate considering the difficulty of setting long-term performance criteria in an industry experiencing constant and disruptive change. The Compensation Committee approved a target PRSU grant of 9,500 units and a RSU grant of 28,500 units with an aggregate target grant-date fair value of approximately $2.6 million to Mr. Nayyar. For Mr. Barsan, the Compensation Committee approved a target PRSU grant of 5,700 units and a RSU grant of 17,100 units with an aggregate target grant-date fair value of approximately $1.5 million. For Mr. Gupta the Compensation Committee approved a target PRSU grant of 5,160 units and a RSU grant of 15,480 units with an aggregate target grant-date fair value of approximately $1.4 million. For Mr. Walker, the Compensation Committee approved a target PRSU grant of 3,900 units and a RSU grant of 11,700 units with an aggregate target grant-date fair value of approximately $1.1 million. The total value of the long-term incentive awards for the named executive officers was determined considering both the leadership and relative contribution of each executive to the performance of the company, and the long-term incentive pay of peer companies along with data from Aon. The Company does not grant stock options, stock appreciation rights, or similar instruments with option-like features and has no policies or practices to disclose pursuant to Item 402(x)(1) of Regulation S-K. Stock Ownership Guideline. In April 2013, the company established a CEO stock-ownership guideline, believing that ownership of the Company’s common stock is an effective means to reinforce alignment of the chief executive officer’s interests with those of the Company’s stockholders, and such guidelines were amended in April 2021. Our chief executive officer is required to own a number of shares of the Company’s common stock having a value equal to at least three times his current base salary. This stock ownership guideline provides for a three-year period to attain the target ownership level. As of March 17, 2025, Mr. Balakrishnan’s stock ownership exceeded the stock ownership guidelines. Employment Agreements. The named executive officers are employed at-will. Based on the Company’s desire to link executive compensation with performance, the executive-compensation program does not include employment agreements. Other Compensation. Our executive officers are party to benefits agreements and offer letters (“Employment Benefits Agreements”) that contain provisions regarding severance benefits in the event the executive is terminated without cause, resigns for good reason or is terminated within 18 months following a change of control or Mr. Balakrishnan ceasing to be our chief executive officer (a “Termination upon Change of Control”). In the event of a termination without cause or resignation for good reason these benefits include (i) a cash severance payment based upon the executive’s highest annual salary from the company in the preceding three years and 50% of the value of the executive’s annual performance-based equity incentive awards at the maximum applicable performance level (100% in the case of Mr. Balakrishnan), (ii) payment of a pro-rated portion, based on the number of days served in the performance period, of the executive’s targeted annual performance-based equity incentive awards at the maximum applicable performance level, (iii) the pro-rated portion of any PRSUs earned prior to termination at the performance level as determined by the Board or Compensation Committee on the date of determination, (iv) continued health coverage and (v) in the case of Mr. Balakrishnan, accelerated vesting of stock options and RSUs. If the executive incurs a Termination upon Change of Control, the benefits include (i) a cash severance payment based upon the executive’s highest annual salary from the company in the preceding three years and 50% of the value of the executive’s annual performance-based equity incentive awards at the maximum applicable performance level (200% in the case of Mr. Balakrishnan and up to 100% in the case of any senior executives), (ii) payment of a pro-rated portion of the executive’s targeted annual performance-based equity incentive awards at the maximum applicable performance level, (iii) 100% accelerated vesting of outstanding PSUs and PRSUs at the maximum applicable performance level, (iv) in the case of a change of control without termination, 25% accelerated vesting of stock options and RSUs, provided, however (a) Mr. Balakrishnan’s stock options and RSUs vest in full, and (b) 50% (or 100% if a senior executive) of all stock options and RSUs shall vest in full prior to Change of Control to the extent the acquiring company does not assume the company’s stock options and RSUs.

  34. Executive Compensation Components

    After a set age, if an executive officer retires following an extended amount of service to our company, the executive officer may also receive continued health plan coverage, a pro-rated portion of any PSUs and PRSUs earned prior to termination at the performance level as determined by the Board or Compensation Committee, and extended time to exercise stock options pursuant to the Employment Benefits Agreements. The Compensation Committee approved these Employment Benefits Agreements because it believes these severance provisions are necessary to retain our current executives and to attract future executives. The level of benefits under the Employment Benefits Agreements was established by the Compensation Committee to provide retention incentives in line with similar incentives at comparable companies. Certain of these severance benefits are coupled with non-competition and non-solicitation obligations intended to protect our proprietary data that might not be enforceable in the absence of additional consideration. The severance benefits are also intended to attract and retain executive officers by mitigating the risk of employment and compensation loss due to a change of control. A summary of the material terms of these Employment Benefits Agreements, together with a quantification of the benefits available under the benefits agreements, may be found in the section below entitled “Summary of Executive Compensation-Employment Contracts and Termination of Employment and Change of Control Agreements.” Perquisites and Generally Available Benefit Programs. We annually review the perquisites that named executive officers receive. Our named executive officers, like our other employees, are eligible to participate in our employee stock purchase plan. In addition, the named executive officers may participate in the various employee benefit plans that are generally available to all employees, including medical, vision and dental care plans; flexible spending accounts for healthcare; life, accidental death and dismemberment and disability insurance; and paid time off. We also maintain a 401(k) retirement savings plan for the benefit of all of our employees, including our named executive officers. In 2024, 2023 and 2022 Power Integrations contributed to the employee 401(k) plan; the plan provided a contribution match of 4% of salary up to a maximum of $13,800 in 2024, $13,200 in 2023, and $12,200 in 2022. The Company’s contribution is discretionary and the decision to contribute is made by the company each year based on business conditions. We do not provide specified retirement programs such as pension plans, or deferred compensation plans. We provide certain retirement benefits to the named executive officers, as described below under the heading “Retirement Benefits.” Compensation “Clawback”. In 2009, we implemented a compensation “clawback” mechanism with respect to compensation of our executive officers. The claw-back conditions the payment of any cash or equity bonuses to executive officers on an agreement to repay a portion of the bonuses in the event of a financial accounting restatement resulting from error or intentional misconduct by the officers. Specifically, any officer determined by the Board to have engaged in intentional misconduct resulting in material noncompliance by the company with any financial reporting requirements of federal securities laws, in turn resulting in the restatement of any financial statement filed in the twelve months prior to the bonus payout, will reimburse the company the difference between the amount of any bonus received and the amount the officer would have received had the amount of the bonus been calculated based on the restated financial statements. We adopted a new Incentive Compensation Recoupment Policy, effective as of October 2, 2023 to comply with Nasdaq listing standards, which requires the “clawback” of incentive compensation paid to current and former executive officers when that compensation is based upon achievement of financial results that later require a restatement whether or not resulting from error or intentional misconduct by such executive officers. A copy of the Incentive Compensation Recoupment Policy was filed as Exhibit 97 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and is incorporated by reference on our Form 10-K for the fiscal year ended December 31, 2024.

  35. Summary Compensation Table

    Summary Compensation Table The following table shows the compensation awarded to, or earned by, our chief executive officer, our chief financial officer and our three other most highly compensated executive officers serving in such capacity at December 31, 2024. We refer to these employees collectively as our “named executive officers.”

  36. Summary Compensation Table

    | | | | | | Change in | | | | | | | | | Retirement Value | | | | | | | | | and Nonqualified | | | | | | | | | Deferred | | | | | | | | Stock | Compensation | All Other | | | Name and Principal Position | Year | Salary | Bonus(1) | Awards(2) | Earnings(3) | Compensation(4) | Total | | Balu Balakrishnan | 2024 | $738,192 | $1,500 | $7,856,013 | — | $14,454 | $8,610,159 | | President and Chief | 2023 | $706,250 | $1,500 | $7,497,159 | — | $14,073 | $8,218,982 | | Executive Officer | 2022 | $690,961 | $1,000 | $6,310,294 | — | $13,074 | $7,015,329 | | Sandeep Nayyar | 2024 | $464,827 | — | $2,945,949 | — | $15,739 | $3,426,515 | | Chief Financial Officer | 2023 | $445,000 | — | $3,078,389 | $5,382 | $15,274 | $3,544,045 | | | 2022 | $427,443 | $1,000 | $1,733,492 | — | $22,159 | $2,184,094 | | Radu Barsan | 2024 | $418,192 | — | $1,857,278 | — | $14,454 | $2,289,924 | | Vice President, | 2023 | $411,250 | $1,000 | $2,121,483 | — | $13,521 | $2,547,254 | | Technology | 2022 | $397,981 | $1,000 | $1,410,900 | — | $17,516 | $1,827,397 | | Sunil Gupta (5) | 2024 | $399,327 | — | $1,703,531 | $5,367 | $15,739 | $2,123,964 | | Vice President, | 2023 | $380,000 | $250 | $1,790,980 | $2,083 | $14,510 | $2,187,823 | | Operations | | | | | | | | | Clifford J. Walker (5) | 2024 | $394,288 | — | $1,298,066 | $— | $15,289 | $1,707,643 | | Vice President, | | | | | | | | | Corporate Development | | | | | | | |

  37. Summary Compensation Table

    | (1) The bonus for Mr. Balakrishnan in 2024 and 2023 was awarded for work on individual patents that were assigned to Power Integrations. The bonus for Mr. Barsan and Mr. Gupta in 2023 includes a discretionary cash bonus. The bonus for 2022 includes a discretionary cash bonus for all named executive officers. |

  38. Summary Compensation Table

    | (2) The grant-date fair value for all stock awards has been calculated in accordance with ASC 718. Assumptions used in the calculation of these amounts are included in Note 7 to our audited consolidated financial statements for the fiscal year ended December 31, 2024, included in our Annual Report on Form 10-K. In the case of annual and long-term performance-based equity incentive awards granted in 2024, 2023, and 2022, all of which were subject to certain performance conditions, as further described in the “Compensation Discussion & Analysis” section with respect to the 2024 grants, the fair value at the grant date is based upon the probable outcome of the satisfaction of the performance conditions. The grant-date fair value was calculated by multiplying the closing stock price on the grant date by each award, reduced by the discounted present value of dividends expected to be declared before the awards vest. |

  39. Summary Compensation Table

    | a. | The amounts for 2024 are presented at target. Assuming the maximum level of performance conditions was achieved for performance-based awards, the grant-date fair value of the stock awards granted to Mr. Balakrishnan, Mr. Nayyar, Mr. Barsan, Mr. Gupta and Mr. Walker in 2024 is $12,304,723, $3,961,320, $2,556,209, $2,358,453 and $1,803,578, respectively. |

  40. Summary Compensation Table

    | b. | The amounts for 2023 are presented at target. Assuming the maximum level of performance conditions was achieved for performance-based awards, the grant-date fair value of the stock awards granted to Mr. Balakrishnan, Mr. Nayyar, Mr. Barsan and Mr. Gupta in 2023 is $11,755,296, $4,112,345, $2,896,047 and $2,451,509, respectively. |

  41. Summary Compensation Table

    | c. | The amounts for 2022 are presented at target. Assuming the maximum level of performance conditions was achieved for performance-based awards, the grant-date fair value of the stock awards granted to Mr. Balakrishnan, Mr. Nayyar and Mr. Barsan in 2022 is $9,959,096, $2,410,215 and $1,976,384, respectively. |

  42. Summary Compensation Table

    | (3) Includes an estimate of the aggregate change in the actuarial present value of each named executive officer’s accumulated benefit under the named executive officer’s retirement plan. |

  43. Summary Compensation Table

    | a. | The table excludes the negative aggregate change in the actuarial present value in 2022 to Mr. Nayyar’s accumulated benefits under the named executive officers’ retirement plan in the amount of ($10,844). |

  44. Summary Compensation Table

    | (4) Includes 401(k) plan contribution match and life insurance premiums as well as vacation cash-out which all employees have the option to participate in after one full year of service. |

  45. Summary Compensation Table

    | (5) Mr. Gupta was not a named executive officer in 2022 and Mr. Walker was not a named executive officer in 2023 or 2022. |

  46. Grants of Plan-Based Awards in 2024

    Grants of Plan-Based Awards in 2024 The following table shows for the fiscal year ended December 31, 2024, certain information regarding grants of plan-based awards to the named executive officers:

  47. Grants of Plan-Based Awards in 2024

    | | | | | | All Other | | | | | | | | Stock | | | | | Estimated Future Payouts Under | | | Awards: | | | | | Equity Performance-based Incentive | | | Number of | Grant Date Fair | | | | Plan Awards and Long-term | | | Shares of | Value of Stock | | Name | Grant Date | Performance-based Incentive Awards(1) | | | Stock or Units | Awards(5) | | | | Threshold | Target | Maximum | | | | Balu Balakrishnan | 4/1/2024(2) | 0 | 14,300 | 28,600 | | $1,002,214 | | | 4/1/2024(3) | 0 | 50,300 | 100,600 | | $3,446,496 | | | 4/1/2024(4) | | | | 50,300 | $3,407,303 | | Sandeep Nayyar | 4/1/2024(2) | 0 | 5,200 | 10,400 | | $364,441 | | | 4/1/2024(3) | 0 | 9,500 | 19,000 | | $650,929 | | | 4/1/2024(4) | | | | 28,500 | $1,930,579 | | Radu Barsan | 4/1/2024(2) | 0 | 4,400 | 8,800 | | $308,373 | | | 4/1/2024(3) | 0 | 5,700 | 11,400 | | $390,557 | | | 4/1/2024(4) | | | | 17,100 | $1,158,348 | | Sunil Gupta | 4/1/2024(2) | 0 | 4,300 | 8,600 | | $301,365 | | | 4/1/2024(3) | 0 | 5,160 | 10,320 | | $353,557 | | | 4/1/2024(4) | | | | 15,480 | $1,048,609 | | Clifford J. Walker | 4/1/2024(2) | 0 | 3,400 | 6,800 | | $238,289 | | | 4/1/2024(3) | 0 | 3,900 | 7,800 | | $267,223 | | | 4/1/2024(4) | | | | 11,700 | $792,554 |

  48. Grants of Plan-Based Awards in 2024

    | (1) These columns set forth the threshold, target and maximum amounts of PSUs for each named executive officer for the year ended December 31, 2024 under the 2024 Plan. The actual grant date fair values of the awards earned for the year ended December 31, 2024, for each named executive officer are set forth in the “Summary Compensation Table” above. As such, the amounts set forth in these columns do not represent additional compensation earned by the named executive officers for the year ended December 31, 2024. For a description of the 2024 Plan, see “Compensation Discussion and Analysis.” |

  49. Grants of Plan-Based Awards in 2024

    | (2) Reflects PSUs granted pursuant to the 2024 Plan, which were granted under the 2016 Incentive Award Plan. No PSUs were to vest if Power Integrations’ 2024 actual revenue or revenue AGR relative to the analog semiconductor industry, actual non-GAAP operating income and strategic goals did not exceed at least established minimum amounts as set forth in the 2024 Plan; target represents the number of performance stock units which would have vested if the metrics in the 2024 Plan were met at target; and maximum represents the maximum awards which would have vested if the metrics in the 2024 Plan were met at or above the maximum amounts, which maximum number of performance is 200% of the target number. Payouts were to increase linearly from the minimum to target and target to maximum, based on performance. The Compensation Committee determined that Power Integrations satisfied the relative measure of the revenue component at approximately 12% of the target level and the strategic goals component under the 2024 Plan at approximately 190% of the target level. Accordingly, approximately 80% of the target PSUs vested and the underlying shares were issued in February 2025. |

  50. Grants of Plan-Based Awards in 2024

    | (3) Reflects PRSUs granted. No PRSUs are to vest if Power Integrations’ revenue CAGR for the three-year period ending December 31, 2026, or its 2026 net revenues, do not exceed at least the minimum amounts specified in the relative and absolute performance measures respectively. Target represents the number of PRSUs which would vest if Power Integrations’ performance equals the target threshold specified by either measure; maximum represents the awards which would vest if Power Integrations’ performance equals or exceeds the established maximum amounts relative to that respective measure. |

  51. Grants of Plan-Based Awards in 2024

    | (4) Restrictions on the RSU awards lapse at the rate of 25% per year, with the first annual vest on February 1, 2025. |

  52. Grants of Plan-Based Awards in 2024

    | (5) Represents the grant-date fair value of stock awards as determined in accordance with ASC 718. In the case of time-based RSUs, the grant-date fair value was calculated by multiplying the closing price of our common stock on the grant date by the number of shares underlying the award reduced by the discounted present value of dividends expected to be declared before the awards vest. In the case of performance-based equity incentive awards, the grant-date fair value is presented at target, which represented the probable outcome of the satisfaction of the performance conditions at the date of grant. |

  53. Grants of Plan-Based Awards in 2024

    The amount of salary and grant-date fair value of performance-based equity incentive awards in proportion to total compensation in 2024 varied by executive but was consistent with the Compensation Committee’s objectives with respect to executive compensation. See “Compensation Discussion and Analysis” above for a discussion of our 2024 annual and long-term performance stock units and other elements of compensation.

  54. Outstanding Equity Awards at 2024 Fiscal Year-End

    Outstanding Equity Awards at 2024 Fiscal Year-End The following table shows for the fiscal year ended December 31, 2024, certain information regarding outstanding equity awards at fiscal year-end for the named executive officers. None of our named executive officers held any stock options at December 31, 2024.

  55. Outstanding Equity Awards at December 31, 2024

    Outstanding Equity Awards at December 31, 2024

  56. Outstanding Equity Awards at December 31, 2024

    | | Stock Awards | | | | | | | | Equity Incentive | Equity Incentive | | | | | Plan Awards: | Plan Awards: | | | | | Number of | Market Value of | | | Number of | Market Value of | Unearned Shares, | Unearned Shares, | | | Shares or Units | Shares or Units | Units or Other | Units or Other | | | of Stock That | of Stock That | Rights That Have | Rights That Have | | Name | Have Not Vested | Have Not Vested (9) | Not Vested | Not Vested (9) | | Balu Balakrishnan | 18,750(1) | $1,156,875 | 40,400(6) | $2,492,680 | | | 7,500(2) | $462,750 | 50,300(7) | $3,103,510 | | | 17,000(3) | $1,048,900 | 11,375(8) | $701,838 | | | 30,300(4) | $1,869,510 | | | | | 50,300(5) | $3,103,510 | | | | Sandeep Nayyar | 3,750(1) | $231,375 | 8,500(6) | $524,450 | | | 3,000(2) | $185,100 | 9,500(7) | $586,150 | | | 6,750(3) | $416,475 | 4,136(8) | $255,191 | | | 19,125(4) | $1,180,013 | | | | | 28,500(5) | $1,758,450 | | | | Radu Barsan | 3,250(1) | $200,525 | 5,600(6) | $345,520 | | | 2,475(2) | $152,708 | 5,700(7) | $351,690 | | | 5,400(3) | $333,180 | 3,500(8) | $215,950 | | | 12,600(4) | $777,420 | | | | | 17,100(5) | $1,055,070 | | | | Sunil Gupta | 1,575(2) | $97,178 | 4,700(6) | $289,990 | | | 4,200(3) | $259,140 | 5,160(7) | $318,372 | | | 10,575(4) | $652,478 | 3,420(8) | $211,014 | | | 15,480(5) | $955,116 | | | | Clifford J. Walker | 3,000(1) | $185,100 | 3,100(6) | $191,270 | | | 1,575(2) | $97,178 | 3,900(7) | $240,630 | | | 3,600(3) | $222,120 | 2,704(8) | $166,837 | | | 6,975(4) | $430,358 | | | | | 11,700(5) | $721,890 | | |

  57. Outstanding Equity Awards at December 31, 2024

    | (1) Represents RSU awards which vest at the rate of 12.5% per year with the initial vest date of April 1, 2018. |

  58. Outstanding Equity Awards at December 31, 2024

    | (2) Represents RSU awards granted on February 1, 2021 which vest at the rate of 25% per year with full vesting on the fourth anniversary of the date of grant. |

  59. Outstanding Equity Awards at December 31, 2024

    | (3) Represents RSU awards granted on February 2, 2022 which vest at the rate of 25% per year with full vesting on the fourth anniversary of the date of grant. |

  60. Outstanding Equity Awards at December 31, 2024

    | (4) Represents RSU awards granted on February 9, 2023 which vest at the rate of 25% per year with full vesting on the fourth anniversary of the date of grant. |

  61. Outstanding Equity Awards at December 31, 2024

    | (5) Represents RSU awards granted on April 1, 2024 which vest at the rate of 25% per year with the initial vest date of February 1, 2025. |

  62. Outstanding Equity Awards at December 31, 2024

    | (6) Represents the target number of PRSUs granted in 2023 which could vest if the performance vesting criteria with respect to such PRSUs were met but not exceeded at the target level and if the participant remained in continuous service as an employee, director or consultant through the employment vesting date indicated in the participant’s grant notice. PRSUs will not be deemed to be vested based upon the attainment of performance conditions unless and until Power Integrations’ Compensation Committee makes such determination. Vesting occurs in connection with filing of the Company’s Form 10-K in 2026 based on Company performance measured against an established net revenue target for the three-year period ending December 31, 2025. |

  63. Outstanding Equity Awards at December 31, 2024

    | (7) Represents the target number of PRSUs granted in 2024 which could vest if the performance vesting criteria with respect to such PRSUs were met but not exceeded at the target level and if the participant remained in continuous service as an employee, director or consultant through the employment vesting date indicated in the participant’s grant notice. PRSUs will not be deemed to be vested based upon the attainment of performance conditions unless and until Power Integrations’ Compensation Committee makes such determination. Vesting occurs in connection with filing of the Company’s Form 10-K in 2027 based on Company performance measured against established revenue targets for the three-year period ending December 31, 2026. |

  64. Outstanding Equity Awards at December 31, 2024

    | (8) Represents the number of PSUs earned under the 2024 Plan. Vesting occurred upon filing of the Company’s 2024 Form 10-K based on Company performance measured against an established net revenue, non-GAAP operating income and strategic goals targets for fiscal year 2024. These PSUs vested at approximately 80% of target based on achievement of the revenue and strategic goals component, as discussed in “Compensation Discussion and Analysis” above. |

  65. Outstanding Equity Awards at December 31, 2024

    | (9) Value calculated by multiplying the number of shares underlying the award by $61.70, the closing price of our common stock on December 31, 2024, which was the last trading day of 2024. |

  66. Option Exercises, Stock Vested and Stock Forfeited in Fiscal 2024

    Option Exercises, Stock Vested and Stock Forfeited in Fiscal 2024 The following table presents for the fiscal year ended December 31, 2024, certain information concerning the aggregate number of shares for which stock awards were vested during fiscal 2024 for each of the named executive officers. None of our named executive officers held any stock options during fiscal 2024.

  67. Option Exercises, Stock Vested and Stock Forfeited in Fiscal 2024

    | | Stock Awards | | | | Number of Shares | Value Realized on | | Name | Acquired on Vesting(1) | Vesting(2) | | Balu Balakrishnan | 62,884 | $4,744,867 | | Sandeep Nayyar | 23,462 | $1,801,059 | | Radu Barsan | 18,811 | $1,438,555 | | Sunil Gupta | 14,472 | $1,081,597 | | Clifford J. Walker | 12,741 | $967,738 |

  68. Option Exercises, Stock Vested and Stock Forfeited in Fiscal 2024

    | (1) Consists of shares acquired upon vesting of RSUs, PSUs and PRSUs. |

  69. Option Exercises, Stock Vested and Stock Forfeited in Fiscal 2024

    | (2) Represents the aggregate market price of the common stock on the date of vesting. |

  70. Option Exercises, Stock Vested and Stock Forfeited in Fiscal 2024

    The following table presents for the fiscal year ended December 31, 2024, certain information concerning the aggregate number of shares for which stock awards were forfeited during fiscal 2024 for each of the named executive officers.

  71. Option Exercises, Stock Vested and Stock Forfeited in Fiscal 2024

    | | Stock Awards | | | | Number of Shares | Value Forfeited | | Name | Forfeited in Fiscal Year(1) | on Cancellation(2) | | Balu Balakrishnan | 85,225 | $5,258,383 | | Sandeep Nayyar | 15,264 | $941,789 | | Radu Barsan | 12,500 | $771,250 | | Sunil Gupta | 10,780 | $665,126 | | Clifford J. Walker | 8,896 | $548,883 |

  72. Option Exercises, Stock Vested and Stock Forfeited in Fiscal 2024

    | (1) Consists of shares forfeited due to performance conditions not met for PRSUs granted in 2022 and PSUs granted in 2024. |

  73. Option Exercises, Stock Vested and Stock Forfeited in Fiscal 2024

    | (2) Represents the aggregate market price of the common stock on the date of forfeiture. |

  74. Potential Payments upon Retirement or Change of Control

    Potential Payments upon Retirement or Change of Control The following table provides information concerning the estimated payments and benefits that would be provided in each of the circumstances described above. Payments and benefits are estimated assuming that the triggering event took place on December 31, 2024, and the price per share of Power Integrations’ common stock is $61.70, the closing price on the Nasdaq Global Select Market on December 31, 2024, the last trading day of 2024. There can be no assurance that a triggering event would produce the same or similar results as those estimated below if such event occurs on any other date or at any other price, or if any other assumption used to estimate potential payments and benefits is not correct. Due to the number of factors that affect the nature and amount of any potential payments or benefits, any actual payments and benefits may be different. The information presented below assumes no adjustment of the payment of benefits to help avoid excise tax under Section 409A of the Internal Revenue Code of 1986, as amended.

  75. Potential Payments upon Retirement or Change of Control

    | | | Potential Payments Upon Involuntary | | | | | | | Termination Other Than for Cause or | | | | | | | Voluntary Termination for Good | | Continuation of Service Without Termination | | | | | Reason | | After Change of Control | | | | | Not within 18 | Within 18 | | | | | | months of a | months of a | Acquiring Company | Acquiring Company | | | Retirement | Change of | Change of | Assumes | Does Not Assume | | Name/Type of Benefit | Benefits | Control (1) | Control (2) | RSUs/PRSUs(3) | RSUs/PRSUs(4) | | Balu Balakrishnan | | | | | | | Cash Severance-Base Salary | $— | $740,000 | $1,480,000 | $— | $— | | Severance-Equity Bonus (5) | 701,838 | 1,764,620 | 3,529,240 | 1,764,620 | 1,764,620 | | RSU Vesting Acceleration (6) | — | 3,820,773 | 7,641,545 | 7,641,545 | 7,641,545 | | PRSU Vesting Acceleration (7) | 2,069,007 | 2,069,007 | 15,387,980 | 15,387,980 | 15,387,980 | | Continued Coverage of Employee Benefits (8) | — | 29,195 | 58,390 | — | — | | Total Termination Benefits: (9) | $2,770,845 | $8,423,595 | $28,097,155 | $24,794,145 | $24,794,145 | | Sandeep Nayyar | | | | | | | Cash Severance-Base Salary | $— | $232,500 | $465,000 | $— | $— | | Severance-Equity Bonus (5) | 255,191 | 320,840 | 641,680 | 641,680 | 641,680 | | RSU Vesting Acceleration (6) | — | — | 3,771,413 | 942,853 | 3,771,413 | | PRSU Vesting Acceleration (7) | 390,767 | 390,767 | 2,776,500 | 2,776,500 | 2,776,500 | | Continued Coverage of Employee Benefits (8) | — | 26,488 | 52,976 | — | — | | Total Termination Benefits: (9) | $645,958 | $970,595 | $7,707,569 | $4,361,033 | $7,189,593 | | Radu Barsan | | | | | | | Cash Severance-Base Salary | $— | $207,500 | $415,000 | $— | $— | | Severance-Equity Bonus (5) | 215,950 | 271,480 | 542,960 | 542,960 | 542,960 | | RSU Vesting Acceleration (6) | — | — | 2,518,903 | 629,726 | 2,518,903 | | PRSU Vesting Acceleration (7) | 234,460 | 234,460 | 1,838,660 | 1,838,660 | 1,838,660 | | Continued Coverage of Employee Benefits (8) | — | 10,363 | 20,726 | — | — | | Total Termination Benefits: (9) | $450,410 | $723,803 | $5,336,249 | $3,011,346 | $4,900,523 | | Sunil Gupta | | | | | | | Cash Severance-Base Salary | $— | $200,000 | $400,000 | $— | $— | | Severance-Equity Bonus (5) | — | 265,310 | 530,620 | 530,620 | 530,620 | | RSU Vesting Acceleration (6) | — | — | 1,963,911 | 490,978 | 1,963,911 | | PRSU Vesting Acceleration (7) | — | 212,248 | 1,562,244 | 1,562,244 | 1,562,244 | | Continued Coverage of Employee Benefits (8) | — | 26,488 | 52,976 | — | — | | Total Termination Benefits: (9) | $— | $704,046 | $4,509,751 | $2,583,842 | $4,056,775 | | Clifford J. Walker | | | | | | | Cash Severance-Base Salary | $— | $197,500 | $395,000 | $— | $— | | Severance-Equity Bonus (5) | 166,837 | 209,780 | 419,560 | 419,560 | 419,560 | | RSU Vesting Acceleration (6) | — | — | 1,656,645 | 414,161 | 1,656,645 | | PRSU Vesting Acceleration (7) | 160,420 | 160,420 | 1,159,960 | 1,159,960 | 1,159,960 | | Continued Coverage of Employee Benefits (8) | — | 9,864 | 19,728 | — | — | | Total Termination Benefits: (9) | $327,257 | $577,564 | $3,650,893 | $1,993,681 | $3,236,165 |

  76. Potential Payments upon Retirement or Change of Control

    | (1) Reflects benefits in the event of involuntary termination other than for cause or voluntary termination for good reason: with respect to Mr. Balakrishnan twelve months salary plus his annual performance-based equity incentive awards at the maximum applicable performance level (measured as of the termination date), plus 50% acceleration of all his then-unvested RSUs plus twelve months medical and dental coverage; and with respect to all other named executive officers, six months of salary plus 50% of the executive officer’s annual performance-based equity incentive awards at the maximum applicable performance level (whether consisting of cash or PSUs, measured as of the termination date) plus six months of medical and dental coverage. |

  77. Potential Payments upon Retirement or Change of Control

    | (2) For termination within 18 months of a change of control (which, for these purposes for executive officers other than Mr. Balakrishnan, includes Mr. Balakrishnan ceasing to be our chief executive officer) other than for cause or voluntary termination for good reason: with respect to Mr. Balakrishnan twenty-four months’ salary plus 200% of his annual |

  78. Potential Payments upon Retirement or Change of Control

    | performance-based equity incentive awards at the maximum applicable performance level (measured as of the termination date), 100% acceleration of all his then-unvested RSUs and PRSUs at maximum performance level and two years medical and dental coverage; for all others, six months’ salary plus 50% of the executive officer’s annual performance-based equity incentive awards at the maximum applicable performance level (whether consisting of cash or stock awards, measured as of the termination date), 100% of unvested RSUs would vest upon a change of control for senior executives and 50% of unvested RSUs would vest upon change of control for new executives and 12 months medical and dental coverage for senior executives and six months medical and dental coverage for new executives. If executive is a senior executive, payment up to an additional six months’ salary and 50% of the executive officer’s annual performance-based equity incentive awards at the maximum applicable performance level (measured as of the termination date) will be paid in ratable monthly installments until the executive secures new employment. The amounts set forth in the table assume that the senior executives will not secure new employment. |

  79. Potential Payments upon Retirement or Change of Control

    | (3) Reflects benefits in the event of a change of control in which the acquiring company assumes outstanding RSUs. With respect to Mr. Balakrishnan 100% of all his then-unvested RSUs would vest; for all others, 25% of the unvested RSUs would vest. |

  80. Potential Payments upon Retirement or Change of Control

    | (4) Reflects benefits in the event of a change of control in which the acquiring company did not assume outstanding RSUs. With respect to Mr. Balakrishnan 100% of all his then-unvested RSUs would vest and for all others, 50% of the unvested RSUs would vest for a new executive and 100% for a senior executive. |

  81. Potential Payments upon Retirement or Change of Control

    | (5) In mid-2009, Power Integrations began utilizing annual PSUs in lieu of cash for Power Integrations’ annual performance-based compensation for executive officers. The applicable PSU agreements relating to the annual performance-based compensation as entered into with each of Power Integrations’ executive officers provide that PSUs will be treated in the same manner as cash for the payments of the target bonus in connection with Retirement, a Termination Upon Change in Control or Termination of Employment (as defined in the Executive Officer Benefits Agreements). The PSUs deemed vested will be paid in shares of Power Integrations’ common stock equal to the number of PSUs deemed vested, and the market value is determined using $61.70 per share, the closing price per share on the Nasdaq Global Select Market at December 31, 2024, the last trading day of 2024. |

  82. Potential Payments upon Retirement or Change of Control

    | (6) Reflects the aggregate market value of unvested RSU awards for which vesting would accelerate in such event. The aggregate market value is computed by multiplying (i) $61.70, the closing price per share on the Nasdaq Global Select Market on December 31, 2024, the last trading day of 2024, by (ii) the number of unvested awards that would be subject to accelerated vesting in such event at December 31, 2024. |

  83. Potential Payments upon Retirement or Change of Control

    | (7) Reflects the aggregate market value of unvested PRSU awards for which vesting would accelerate in such event. The aggregate market value is computed by multiplying (i) $61.70, the closing price per share on the Nasdaq Global Select Market on December 31, 2024, the last trading day of 2024, by (ii) the number of unvested awards that would be subject to accelerated vesting in such event at December 31, 2024. |

  84. Potential Payments upon Retirement or Change of Control

    | (8) For retirement, upon completion of service and age requirements, health coverage is paid until the age of 65. For severance, reflects the cost of health coverage (COBRA) to maintain the benefits currently provided, calculated based upon the rates at December 31, 2024. |

  85. Potential Payments upon Retirement or Change of Control

    | (9) The total termination benefits received by the Officer for termination within 18 months of a change of control may be lower than what is stated in this table in light of a provision in the Officers’ respective Executive Officers Benefits Agreement which states that if any of the payments and benefits provided under such agreements (the “Payments”) in connection with a change of control would result in a “parachute payment” under Section 280G of the Internal Revenue Code, the amount of such Payments will be either (i) the full amount of the Payments or (ii) a reduced amount which would result in no portion of the Payments being subject to excise tax (as defined in the respective agreements), whichever amount provides the greatest amount of benefit to the Officer. |

  86. Potential Payments upon Retirement or Change of Control

    The table above describes potential payments to our Officers in the event of retirement or a change of control as of December 31, 2024. The table includes the acceleration of outstanding performance stock units in connection with a change of control.

  87. Pay Ratio

    Pay Ratio The annual total compensation of the median employee and the annual total compensation of our chief executive officer were calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. Using the methodology described below, our CEO’s annual total compensation in 2024 as reported in the Summary Compensation Table included in this proxy statement was $8,610,159 and our median employee’s annual total compensation in 2024 was $106,031. As a result, our 2024 CEO to median employee pay ratio was approximately 81:1. Consistent with SEC rules, the 2024 CEO to median employee pay ratio was calculated using the median employee identified in 2023. We chose December 1, 2023 as the date for establishing the employee population used in identifying the median employee and used fiscal 2023 as the measurement period. We identified the median employee using a consistently applied compensation measure which includes annual base salary or wages, target annual performance-based equity awards based on their grant date fair values, target commissions and target long-term equity awards based on their grant date fair values. Permanent employees who joined in 2023 and permanent employees who were on leave during 2023 were assumed to have worked for the entire year. All U.S. and non-U.S. employees employed as of December 1, 2023 were captured. No cost-of-living adjustments were made. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our human resources system of record and the methodology described above. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

  88. PAY VERSUS PERFORMANCE DISCLOSURE

    PAY VERSUS PERFORMANCE DISCLOSURE The Compensation Actually Paid, (“CAP”) disclosed below for our Principal Executive Officer (“PEO”) and Non-PEO named executive officers “Non-PEO NEOs”, which represents the average amounts of all named executive officers excluding our PEO, was calculated in accordance with the requirements of Item 402(v) of Regulation S-K. The CAP figures presented in the table below incorporate total executive compensation as reported in the Summary Compensation Table adjusted for changes in the fair value of equity awards and pension benefits. Accordingly, CAP does not equate to the amount that is actually paid to any executive in a given year and is merely a measurement determined by the SEC in an effort to identify the relationship between executive compensation and a Company’s financial performance. The following table sets forth the CAP to our PEO and average of our Non-PEO NEOs, serving in such capacity, along with certain measures of Company performance in each of the fiscal years ended on December 31 as listed below:

  89. PAY VERSUS PERFORMANCE DISCLOSURE

    | | Summary | | Average Summary | Average | Value of Initial Fixed | | | | | | Compensation | Compensation | Compensation | Compensation | $100 Investment Based on | | | | | | Table | Actually Paid | Table Total for | Actually Paid | Total Shareholder | Peer Group | | | | | Total | to the | Non-PEO | to Non-PEO | Return | Total Shareholder | (in thousands) | | | Year | for PEO | PEO (1) (2) | NEOs | NEOs (1) (3) | (TSR) - POWI | Return (4) | Net Income | Net Revenues | | 2024 | $8,610,159 | $8,846,860 | $2,387,012 | $1,966,748 | $130.27 | $287.31 | $32,234 | $418,973 | | 2023 | $8,218,982 | $6,836,603 | $2,503,959 | $2,415,342 | $171.35 | $238.72 | $55,735 | $444,538 | | 2022 | $7,015,329 | $(13,137,041) | $1,737,581 | $(725,064) | $148.28 | $142.94 | $170,851 | $651,138 | | 2021 | $6,564,685 | $16,724,842 | $1,784,763 | $3,351,766 | $190.35 | $219.51 | $164,413 | $703,277 | | 2020 | $5,733,115 | $23,622,794 | $1,514,513 | $4,824,198 | $166.78 | $153.66 | $71,176 | $488,318 |

  90. PAY VERSUS PERFORMANCE DISCLOSURE

    | (1) See supplemental disclosures below for adjustments made to arrive at CAP for PEO and Non-PEO NEOs. |

  91. PAY VERSUS PERFORMANCE DISCLOSURE

    | (2) For fiscal years 2024, 2023, 2022, 2021 and 2020, Balu Balakrishnan served as our President and Chief Executive officer. |

  92. PAY VERSUS PERFORMANCE DISCLOSURE

    | (3) For fiscal year 2024, Non-PEO NEOs were Sandeep Nayyar, Radu Barsan, Sunil Gupta and Clifford J. Walker. For fiscal year 2023, Non-PEO NEOs were Sandeep Nayyar, Radu Barsan, Sunil Gupta and Yang Chiah Yee. For fiscal years 2022 and 2021, Non-PEO NEOs were Sandeep Nayyar, Radu Barsan, Mike Matthews and Yang Chiah Yee. For fiscal year 2020, Non-PEO NEOs were Sandeep Nayyar, Radu Barsan, Mike Matthews and Ben Sutherland. |

  93. PAY VERSUS PERFORMANCE DISCLOSURE

    | (4) Peer Group TSR is based on Philadelphia Stock Exchange Semiconductor Sector Index (SOX) (the “Industry Index”). SOX is a market cap weighted index of 30 US-listed semiconductor companies. |

  94. PAY VERSUS PERFORMANCE DISCLOSURE

    The following graph shows the relationship between CAP and TSR for both the Company and Industry Index, as represented by the Philadelphia Stock Exchange Semiconductor Sector Index. TSR shows the cumulative total return on an investment of $100 in cash on December 31, 2019, through December 31, 2024, in our common stock and the Industry Index, assuming that all dividends were reinvested. The return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. The following graph shows the relationship between CAP and Net Income: The following graph shows the relationship between CAP and Net Revenues: The following are the Company’s three most important performance measures for determining NEO compensation for 2024:

  95. PAY VERSUS PERFORMANCE DISCLOSURE

    | 2024 Performance Measures | | Net Revenues | | Non-GAAP Operating Income | | Relative Revenue (1) |

  96. PAY VERSUS PERFORMANCE DISCLOSURE

    | (1) Relative Revenue refers to the Company’s Revenue CAGRs as compared to the Revenue CAGR of the analog semiconductor industry over similar periods. See section “Mechanics of 2024 Performance-based Equity Incentive Awards” above for further details. |

  97. Pay versus Performance Supplemental Disclosures

    Pay versus Performance Supplemental Disclosures As demonstrated graphically above, the compensation of our named executive officers is structured in a way that closely aligns compensation with overall company performance and further serves to align executive and stockholders’ interests. As described in the “Executive Compensation Components” section above, a significant portion of executive compensation is given in the form of RSUs, PSUs and PRSUs. That section also describes the performance conditions upon which PSUs and PRSUs are valued and thresholds which ultimately determine the number of shares that would vest. For purposes of calculating CAP, the fair value of stock awards is driven by changes in the Company’s stock price and in the case of performance-based awards, changes in the expected achievement of the performance targets. The fair value of our equity awards is determined in accordance with the provisions of ASC 718-10, Stock Compensation. Time-vested restricted stock unit grant date fair values are calculated using the stock price as of date of grant. Adjustments have been made using the stock price as of year end and as of each date of vest to reflect the change in fair value. Performance-based restricted stock unit grant date fair values are calculated using the stock price as of date of grant assuming target performance. Adjustments have been made using the stock price and performance expectations as of year end and as of the date of vest to reflect the change in fair value. The below table presents the reconciliation between amounts reported in the Summary Compensation Table and CAP for our PEO and average for Non-PEO NEOs for the year ended December 31, 2024.

  98. Pay versus Performance Supplemental Disclosures

    | | PEO | Non-PEO NEOs | | Summary compensation table total | $8,610,159 | $2,387,012 | | Exclusion of stock awards | (7,856,013) | (1,951,206) | | Fair value of unvested current year awards at fiscal year end | 10,012,408 | 2,083,334 | | Change in value of prior year awards vesting during the year | (418,538) | (104,137) | | Change in value of unvested equity from prior years | (1,501,156) | (448,255) | | Compensation actually paid | $8,846,860 | $1,966,748 |