DEF 14A of Onto Innovation Inc.
Filed Apr 5, 2024 · FY20230000950170-24-042066
PROXY STATEMENT
PROXY STATEMENT __________________________________________ The proxy detailed herein is solicited on behalf of the Board of Directors of Onto Innovation for use at the 2024 Annual Meeting of Stockholders to be held May 22, 2024 at 8:00 a.m. Pacific Time (the “Annual Meeting”), or at any adjournment or postponement thereof, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting will be held at the Company’s offices located at 1550 Buckeye Drive, Milpitas, CA 95035. Directions to the Annual Meeting may be found on our website (www.ontoinnovation.com) by clicking on “Company,” “Locations,” “California” and then accessing the interactive map. The Company’s telephone number is (978) 253-6200. On or about April 5, 2024, we will furnish a Notice of Internet Availability of Proxy Materials (“Notice”) to our stockholders containing instructions on how to access the proxy materials online at: https://www.ontoinnovation.com/ar-proxy Instructions on how to vote online and to request a printed copy of the proxy materials may be found in the Notice. If you receive a Notice by mail, you will not receive a paper copy of the proxy materials unless you request such materials by following the instructions contained in the Notice. Your vote is important, regardless of the extent of your holdings. Our principal executive offices are located at 16 Jonspin Road, Wilmington, Massachusetts 01887.
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ELECTION OF DIRECTORS Nominees The Company’s Amended and Restated Certificate of Incorporation (“Charter”) provides that directors shall be elected at each Annual Meeting of Stockholders, and that each director of the Company shall serve until the expiration of the term for which he or she is elected and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation, disqualification or removal. Based on the recommendation of the Nominating & Governance Committee, the eight director nominees approved by the Board for inclusion in this proxy statement and for election at the Annual Meeting are:
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| Leo Berlinghieri Stephen D. Kelley Susan D. Lynch David B. Miller Michael P. Plisinski Christopher A. Seams May Su Christine A. Tsingos |
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Each nominee is currently serving as a director of Onto Innovation. In making its recommendations, the Nominating & Governance Committee considered a number of factors, including its criteria for Board membership, which include the qualifications that must be possessed by a director candidate in order to be nominated for a position on our Board. Each nominee has indicated that he or she will serve if elected. Unless otherwise instructed, the proxy holders will vote the proxies received by them for the Company’s eight nominees. In the event that any nominee of the Company becomes unable or unavailable to serve as a director at the time of the Annual Meeting (which we do not anticipate) the proxy holders will vote the proxies for any substitute nominee who is designated by the current Board to fill the vacancy. Alternatively, the Board, in its discretion, may elect not to nominate a substitute and to reduce the size of the Board. We do not have any reason to believe that any of the nominees will be unable or will decline to serve as a director. Board Composition and Refreshment A priority of the Nominating & Governance Committee and the Board as a whole is making certain that the composition of the Board reflects the desired professional experience, skills, and backgrounds in order to present an array of viewpoints and perspectives, help develop and execute strategy for the future, and effectively represent the long-term interests of stockholders. Further, the Board recognizes the importance of Board refreshment in order to continue to achieve an appropriate balance of tenure, turnover, diversity, and skills on the Board. Pursuant to the Company’s Amended and Restated Bylaws (“Bylaws”), our directors are elected by the affirmative vote of the majority of the votes cast (provided, however, that if the number of nominees exceeds the number of directors to be elected, directors will be elected by a plurality voting standard). In order for a director in an uncontested election to be elected, the number of votes cast “for” his/her election must exceed the number of votes cast “against” his/her election (with “abstentions” and “broker non-votes” not counted as a vote cast either “for” or “against” that director’s election). If a nominee who is an incumbent director receives a greater number of “against” votes for election than “for” votes in an uncontested election and is not elected, our Corporate Governance Guidelines provide that such director must promptly tender a resignation to the Board. Our Nominating & Governance Committee would then make a recommendation to the Board on whether to accept or reject the tendered resignation, or whether other action should be taken. Within 90 days after the date of the certification of the election results, our Board will act on any such tendered resignation and publicly disclose (in a press release, a filing with the SEC, or other broadly disseminated means of communication) its decision regarding the tendered resignation and the rationale behind the decision.
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Information about the Nominees and Continuing Directors Our Board and its Nominating & Governance Committee believe that all of the director nominees are highly qualified, have demonstrated leadership skills, and have the requisite experience and judgment in areas that are relevant to our business. We believe that their ability to challenge and stimulate management and their dedication to the affairs of the Company collectively serve the interests of the Company and its stockholders. The Company is unaware of any arrangements or understandings between any director or nominee and any other person(s) pursuant to which any director or nominee was or is to be selected. The eight nominees for director are set forth below. All information is as of the record date.
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| Name | Principal Occupation | Board Tenure(1) | | Leo Berlinghieri | Former President and Chief Executive Officer of MKS Instruments, Inc. | 15.5 years | | Stephen D. Kelley | President and Chief Executive Officer of Advanced Energy Industries, Inc. | 1.2 years | | Susan D. Lynch | Former Senior Vice President and Chief Financial Officer of V2X, Inc. | <0.1 years | | David B. Miller | Former President of DuPont Electronics & Communications | 8.7 years | | Michael P. Plisinski | Chief Executive Officer of Onto Innovation Inc. | 8.4 years | | Christopher A. Seams | Former Chief Executive Officer of Deca Technologies Inc. | 8.7 years | | May Su | Former Chief Executive Officer of Kateeva, Inc. | 2.1 years | | Christine A. Tsingos | Former Executive Vice President and Chief Financial Officer of Bio-Rad Laboratories, Inc. | 9.9 years |
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(1) On October 25, 2019 (the “Merger Date”), Rudolph Technologies, Inc. merged with and into Nanometrics Incorporated, which was then renamed Onto Innovation Inc. (the “2019 Merger”). Unless otherwise indicated or context otherwise requires, as used herein “Nanometrics” refers to Nanometrics Incorporated and its subsidiaries prior to the Merger Date and “Rudolph” refers to Rudolph Technologies, Inc. and its subsidiaries prior to the Merger Date. Board tenure includes time served on the Rudolph Board of Directors or the Nanometrics Board of Directors, as applicable, prior to the Merger Date. There are no family relationships between any directors or executive officers of the Company. The Nominating & Governance Committee considered the professional experience, skills, and backgrounds of the nominees and recommended the nominees to the full Board.
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The following reflects additional information regarding the background and qualifications of our director nominees, including the experience and skills that support the Board’s determination that each director nominee should serve on our Board. The director nominees for 2024 voluntarily self-identified with the following diversity characteristics: • Gender Self-Identification: 62.5% Male / 37.5% Female • Race/Ethnicity Identification: 87.5% White / 12.5% Asian LGBTQ+ Identification: None
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NOMINEES FOR DIRECTOR
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| Leo Berlinghieri |
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| | Director Since: | July 2008 | | | Age: | 70 | | | Independent Status: | Independent Director | | | Board Committee(s): | Audit, Nominating & Governance (Chairperson) | | | Other Public Company Boards: | MKS Instruments, Inc. (2005-2013) |
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From July 2005 to December 2013, Mr. Berlinghieri served as President & Chief Executive Officer of MKS Instruments, Inc., a critical subsystem and instrument provider to the semiconductor industry. From April 2004 to July 2005, Mr. Berlinghieri served as President and Chief Operating Officer and, from July 2003 to April 2004, as Vice President and Chief Operating Officer, at MKS Instruments. Mr. Berlinghieri served on the advisory board of Unipower, LLC from 2017 to 2019, as a director on the North America advisory board of Semiconductor Equipment and Materials International (SEMI) from 2005 to 2013, holding the role of chairperson in 2012 and 2013, and on the board of directors of the Massachusetts High Technology Council, Inc. from 2006 to 2013. Key Qualifications, Attributes, Skills and Experience Mr. Berlinghieri has over 34 years of experience in the semiconductor industry and extensive international, financial, and operations experience through his various roles with MKS Instruments, including Chief Executive Officer, Chief Operating Officer and Vice President of Global Sales and Service.
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| Stephen D. Kelley |
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| | Director Since: | January 2023 | | | Age: | 61 | | | Independent Status: | Independent Director | | | Board Committee(s): | Audit, Compensation | | | Other Public Company Boards: | Advanced Energy Industries, Inc. (since March 2021) Amkor Technology, Inc. (2013-2020) |
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Mr. Kelley has served as President & Chief Executive Officer of Advanced Energy Industries, Inc., which designs and manufactures power delivery systems for semiconductor wafer fabrication equipment and other applications, since March 2021. Previously, Mr. Kelley served as President and Chief Executive Officer of Amkor Technology, Inc., a leading semiconductor packaging and test company, from May 2013 to June 2020. Prior to joining Amkor, Mr. Kelley served as Senior Advisor to Advanced Technology Investment Company, the Abu Dhabi-sponsored investment company that owned GlobalFoundries Inc. at the time, from June through November 2012. Mr. Kelley served as Executive Vice President and Chief Operating Officer of Cree, Inc. from 2008 to 2011. Prior to joining Cree, Mr. Kelley held executive leadership roles at Texas Instruments Inc. and Philips Semiconductors. Mr. Kelley holds a B.S. in Chemical Engineering from the Massachusetts Institute of Technology and a J.D. from Santa Clara University. With over 30 years of leadership experience in the semiconductor industry, Mr. Kelley has a comprehensive understanding of our industry and extensive management experience. Mr. Kelley also possesses first-hand knowledge of our customer base and has in-depth experience in strategic planning, business development, technology, manufacturing, and operations relevant to our business.
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| Susan D. Lynch |
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| | Director Since: | March 2024 | | | Age: | 62 | | | Independent Status: | Independent Director | | | Board Committee(s): | Audit, M&A | | | Other Public Company Boards: | Allegro Microsystems, Inc. (since November 2021) |
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Ms. Lynch served as the Senior Vice President and Chief Financial Officer at V2X (formerly Vectrus, Inc.) from August 2019 to September 2023. From April 2016 to July 2019, Ms. Lynch was the Executive Vice President and Chief Financial Officer for Sungard Availability Services. Before joining Sungard AS, from 2007 to 2015, Ms. Lynch was the Executive Vice President and Chief Financial Officer for Hitachi Vantara (formerly Hitachi Data Systems). From 2005 to 2007, Ms. Lynch was Vice President and Chief Financial Officer of Raytheon Technical Services. Before joining Raytheon, Ms. Lynch held a number of roles of increasing financial responsibility with Honeywell International Inc. from 1984 to 2005. Ms. Lynch received her B.A. in accounting and business administration from MidAmerica Nazarene University. In 2023, Ms. Lynch was awarded the prestigious Greater Washington Technology Public Company CFO of the Year by the Northern Virginia Technology Council. Key Qualifications, Attributes, Skills and Experience Ms. Lynch has more than 25 years of financial experience through senior leadership roles in the technology, aerospace and defense, and industrial manufacturing industries make her well qualified to serve as a member of our Board.
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| David B. Miller |
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| | Director Since: | July 2015 | | | Age: | 67 | | | Independent Status: | Independent Director | | | Board Committee(s): | Compensation, Nominating & Governance, M&A (Chairperson) | | | Other Public Company Boards: | Merrimac Industries, Inc. (2002-2008) |
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Mr. Miller served as Rudolph’s non-executive Chairperson from August 2018 through the Merger Date. From June 1981 to November 2015, Mr. Miller served in various positions, most recently as President, at DuPont Electronics & Communications, an electronic materials company. Mr. Miller previously served as the President of the University of Virginia School of Engineering & Applied Science Foundation from 2016 to 2018. Mr. Miller served on the board of directors of Semiconductor Equipment and Materials International (SEMI) from 2011 to 2015 and on the board of the North Carolina Chamber of Commerce from 2010 to 2015. He has also served on several electronics joint venture boards in the U.S. and Asia. Mr. Miller holds a B.S. in Electrical Engineering from the University of Virginia. Specific Qualifications, Attributes, Skills and Experience Mr. Miller has over 40 years of experience in the electronics industry. In his prior roles, including as President of DuPont Electronics & Communications, he had oversight of technology advancement, complex financial transactions, profit and loss responsibility and investor relations, and brings substantial management and market expertise to the Board. Mr. Miller also has substantial international experience, having served on several electronics joint venture boards in the U.S. and Asia as well as on the board of SEMI International.
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| Michael P. Plisinski |
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| | Director Since: | November 2015 | | | Age: | 54 | | | Independent Status: | Non-Independent Director | | | Board Committee(s): | None | | | Other Public Company Boards: | None |
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Mr. Plisinski has served as the Company’s Chief Executive Officer since the Merger Date and was previously Chief Executive Officer of Rudolph from November 2015 through the Merger Date. Prior to his appointment as Rudolph’s CEO, Mr. Plisinski served as Rudolph’s Executive Vice President and Chief Operating Officer from October 2014 to November 2015 and as Vice President and General Manager of its Data Analysis and Review Business Unit from February 2006 until October 2014. From February 2004 to February 2006, Mr. Plisinski served as Vice President of Engineering at August Technology, which was acquired by Rudolph. Mr. Plisinski joined August Technology in connection with its acquisition of Counterpoint Solutions, a supplier of optical review and automated metrology equipment, where he was the sole founder and President from June 1999 to July 2003. Mr. Plisinski has served on the board of directors of Cognizer.AI, a software company that specializes in deep-learning powered natural language intelligence, since August 2020, and on the board of directors of the Massachusetts High Technology Council, Inc. since May 2022. Mr. Plisinski has a B.S. in Computer Science from the University of Massachusetts and has completed the Advanced Management Program from Harvard Business School. Key Qualifications, Attributes, Skills and Experience Mr. Plisinski brings to our Board of Directors insights based on his leadership roles at the Company and his deep knowledge of our products, markets, customers, culture, and organization.
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| Christopher A. Seams |
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| | Director Since: | August 2015 | | | Age: | 61 | | | Independent Status: | Independent Director | | | Board Committee(s): | Nominating & Governance, M&A | | | Other Public Company Boards: | Xperi Inc. (since October 2013) |
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Mr. Seams served as Chief Executive Officer of Deca Technologies Inc., a wafer-level electronic interconnect solutions provider to the semiconductor industry, from June 2013 to August 2016. Prior to Deca Technologies, Mr. Seams served as Executive Vice President of Sales and Marketing at Cypress Semiconductor Corporation, a semiconductor design and manufacturing company, and held various technical and operational management positions in its manufacturing, development, and operations departments. Prior to joining Cypress in 1990, Mr. Seams worked in process development for Advanced Micro Devices, Inc. and Philips Research Laboratories. Mr. Seams holds a B.S. in Electrical Engineering from Texas A&M University and an M.S. in Electrical and Computer Engineering from the University of Texas at Austin. Mr. Seams also has a Professional Certificate in Advanced Computer Security from Stanford University and is a senior member of the Institute of Electrical and Electronics Engineers. Mr. Seams is a member of the American College of Corporate Directors (ACCD) as well as a member and Certified Director of the National Association of Corporate Directors (NACD).
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Mr. Seams has over 30 years of experience within the semiconductor industry. During that time he has gained substantial management, financial and international experience as a senior leader at multiple companies. He also brings to the Board technology and innovation experience gained through an array of technical and operational management positions in manufacturing, development, operations, and process development.
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| May Su |
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| | Director Since: | March 2022 | | | Age: | 66 | | | Independent Status: | Independent Director | | | Board Committee(s): | Compensation (Chairperson), Nominating & Governance | | | Other Public Company Boards: | Kateeva, Inc. (2020-2022) |
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Ms. Su served as Chief Executive Officer of Kateeva, Inc., a company that builds inkjet deposition equipment solutions, from March 2020 to October 2022. Prior to becoming Chief Executive Officer, Ms. Su served as Kateeva’s Chief Marketing Officer starting in January 2018 and added the role of Senior Vice President of Sales in May 2019. Before joining Kateeva, Ms. Su was an independent consultant from 2016 to 2018. From 2012 to 2016, Ms. Su served in an array of senior management roles, including Vice President, Strategic Marketing and Vice President Strategic OEM Sales, for Brooks Automation, Inc., a provider of automation, vacuum and instrumentation equipment for multiple markets, including semiconductor manufacturing. From 2009 to 2012, Ms. Su served as Vice President and General Manager for Crossing Automation Inc., a manufacturer of fabrication and tool automation products, which was acquired by Brooks Automation in 2012. Before her role at Crossing Automation, Ms. Su was President of U.S. & European Field Operations for Nova Measuring Instrument, Inc., a provider of metrology devices for advanced process control used in semiconductor manufacturing, and held other senior management roles with Aviza Technology, Inc., New-Wave Research, KLA-Tencor Corporation and Lam Research Corporation. Ms. Su holds a B.S. in Mechanical Engineering from Cornell University, an M.S. in Mechanical Engineering from University of California-Berkeley, and an M.B.A. from Santa Clara University, Leavey School of Business. Ms. Su also serves on the board of directors of Applied Engineering, Inc., a high-tech contract manufacturing company. Ms. Su has over 40 years of experience within the semiconductor capital equipment industry. During that time she has gained substantial management, international and financial experience in her role as Chief Executive Officer of Kateeva, Inc., as well as in other executive and general manager roles.
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| Christine A. Tsingos |
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| | Director Since: | May 2014 | | | Age: | 65 | | | Independent Status: | Independent Director | | | Board Committee(s): | Audit (Chairperson), Compensation | | | Other Public Company Boards: | Envista Holdings Corporation (since September 2019) Varex Imaging Corporation (since February 2017) Telesis Bio Inc. (since May 2021) |
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Ms. Tsingos served as the Executive Vice President and Chief Financial Officer of Bio-Rad Laboratories, a manufacturer and distributor of life science research and clinical diagnostics products, from December 2002 through May 2019. Prior to Bio-Rad, Ms. Tsingos held executive positions at Autodesk, The Cooper Companies, and Attest Systems. Ms. Tsingos holds a B.A. in International Studies from The American University and an M.B.A. in International Business from The George Washington University. In 2010, Ms. Tsingos was awarded the prestigious Bay Area CFO of the Year. Key Qualifications, Attributes, Skills and Experience Ms. Tsingos has over 30 years of financial and operational experience with a series of companies, including 16 years of service as Chief Financial Officer of Bio-Rad Laboratories through which she also gained comprehensive international experience. Ms. Tsingos also has significant experience and knowledge of both the Company and the semiconductor industry derived from ten years of dedicated service on the boards of directors of Nanometrics and the Company.
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| The Board recommends voting “FOR” all of the nominees set forth above. |
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CORPORATE GOVERNANCE PRINCIPLES AND PRACTICES Onto Innovation is committed to sound and effective corporate governance practices. Having such practices is essential to running our business efficiently and maintaining our integrity in the marketplace. The major components of our corporate governance practices are described below. Board Leadership Structure The roles of Chief Executive Officer (“CEO”) and Chairperson of the Board at Onto Innovation are held by separate individuals. Our Board is led by Christopher A. Seams, who is an independent director and has served as Chairperson of the Board since the Merger Date. The Board’s primary responsibility is to oversee management of the Company. Company management is led by Michael P. Plisinski, who has served as our CEO and a director since the Merger Date. Our Board is currently comprised of one non-independent director, Mr. Plisinski, and eight independent directors, each of whom has been affirmatively determined by our Board to meet the criteria for independence established by the Securities and Exchange Commission (“SEC”) and the New York Stock Exchange (“NYSE”). Following our Annual Meeting, our Board will be composed of one non-independent director and seven independent directors. The independent directors meet periodically in executive session chaired by the Chairperson without the CEO or other management present. Furthermore, each director is encouraged to suggest items for the Board agenda in advance of any meeting and to raise at any Board meeting subjects that are not on the agenda for that meeting. The Board believes that, at the current time, the designation of an independent Chairperson of the Board facilitates the functioning of the Board, while leaving the CEO with the responsibility for setting the strategic direction for the Company and for the day-to-day leadership and performance of the Company. The independent Chairperson of the Board: • Presides at all meetings of the stockholders and the Board at which he or she is present; • Establishes the agenda for each Board and stockholder meeting; • Calls and prepares the agenda for and presides over executive sessions of the independent directors; • Acts as a liaison between the independent directors and the Company’s management; and • Performs such other powers and duties as may from time to time be assigned by the Board or as may be prescribed by the Company’s Bylaws. Board Meetings In 2023, each incumbent director attended 100% of the aggregate of the total number of Board meetings and the total number of meetings of Board committees on which such director served during the time such director served on the Board. Although the Company does not currently have a formal policy regarding the attendance of directors at the Annual Meeting of Stockholders, directors are encouraged to attend. All members of the Board who stood for reelection at the Company’s 2023 Annual Meeting of Stockholders attended the Annual Meeting. In 2023, the Board held a total of five Board meetings. On four occasions during 2023, the Board met in executive session in which only the independent Board members were present. The Board makes an annual determination as to the independence of each of our Board members under the current standards for “independence” established by the NYSE and the SEC. The Board has determined that the following nominees for election as directors to our Board are independent under the NYSE Listing Rules and SEC rules: Leo Berlinghieri, Stephen D. Kelley, Susan D. Lynch, David B. Miller, Christopher A. Seams, May Su, and Christine A. Tsingos. Michael P. Plisinski, due to his position as our CEO, is not considered to be independent. Ms. Rogge, who will not stand for re-election in 2024, was also determined by the Board to be independent under applicable NYSE and SEC rules. During 2023, none of the independent members of our Board was a party to any transactions, relationships, or arrangements that were considered by the Board to impair his or her independence.
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Oversight Of Risk One of the Board’s primary responsibilities is reviewing the Company’s strategic plans and objectives, including oversight of the principal risk exposures of the Company. In particular, the Board is responsible for monitoring and assessing strategic risk exposure, including determining the nature and level of risk appropriate for the Company. The Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board as a whole, as well as through the standing Board committees, which address risks inherent in their respective areas of oversight. The Audit Committee assists the Board in oversight and monitoring of the financial and legal risks facing the Company, management’s approach to addressing these risks and strategies for risk mitigation. On at least an annual basis, the Audit Committee reviews, and discusses with management, policies and systems pursuant to which management addresses risk, including risks associated with our audit, financial reporting, internal control, disclosure control, regulatory compliance, and investment policies. Our Audit Committee is also tasked with overseeing risks from cybersecurity threats. Members of the Audit Committee receive updates on cybersecurity matters on a quarterly basis from one or more representatives from the Company’s Cyber Security Council (“CSC”), which is composed of our business unit general managers, other members of senior management, our Vice President of IT, and our IT Security Manager, and provides executive level supervision of cybersecurity risks. These updates include a discussion of existing and new cybersecurity risks (if any), updates on how management is addressing and/or mitigating those risks, and the status of information security initiatives. Our Nominating & Governance Committee oversees risks related to governance issues, such as succession planning. It also monitors and oversees legal compliance and compliance with the Company’s Code of Business Conduct and Ethics, including the investigation and enforcement of the provisions of the Code of Business Conduct and Ethics. In addition, our Compensation Committee, at least annually, reviews our compensation program to ensure that it does not encourage excessive risk-taking. Each of our Committees regularly reviews with our Board any issues that arise in connection with risk matters within the scope of its responsibilities and, in accordance with our Corporate Governance Guidelines, our full Board regularly engages in discussions of risk management to assess major risks facing our Company and review options for the mitigation of such risks. As a result of the foregoing, we believe that our CEO, together with the Chairpersons of our Audit, Compensation and Nominating & Governance Committees and our full Board, provide effective oversight of Company risk.
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Board Committees The Board has four standing committees with separate chairpersons: the Audit, Compensation, Nominating & Governance, and M&A Committees. Each of the Board committees is composed solely of independent directors and has adopted a written charter that sets forth the specific responsibilities and qualifications for membership on the committee. The charters of these committees are available on our website at: https://investors.ontoinnovation.com/governance/governance-documents/ In 2023, the composition of and number of meetings held by the Company’s Board committees were as follows:
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| Committee Chairperson | Committee Members | Number of Meetings Held in 2023 | | Audit Committee | | | | Christine A. Tsingos | Leo Berlinghieri (1) | 9 | | | Stephen D. Kelley (2) | | | | Karen M. Rogge | | | | May Su (3) | | | Nominating & Governance Committee | | | | Leo Berlinghieri | David B. Miller | 4 | | | Christopher A. Seams | | | | May Su (1) | | | Compensation Committee | | | | May Su (5) | Leo Berlinghieri (3) | 5 | | | David B. Miller (4) | | | | Stephen D. Kelley (1) | | | | Christine A. Tsingos | | | M&A Committee | | | | David B. Miller | Karen M. Rogge | 5 | | | Christopher A. Seams | |
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(1) Committee member effective as of May 2023. (2) Committee member effective as of January 2023. (3) Committee member until May 2023. (4) Committee chairperson until May 2023, after which Mr. Miller continued serving as a committee member. Committee chairperson effective as of May 2023.
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| Audit Committee |
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The current members of the Audit Committee are Leo Berlinghieri, Stephen D. Kelley, Susan D. Lynch, Karen M. Rogge, and Christine A. Tsingos, who also serves as the chairperson of the committee. As previously disclosed, Ms. Rogge will be retiring from the Board and the Audit Committee as of the Annual Meeting. The Audit Committee assists the Board in fulfilling its responsibilities for general oversight of the integrity of our financial statements, our accounting policies and procedures and our compliance with legal and regulatory requirements. Among its functions, the Audit Committee is responsible for: • The appointment, compensation, performance evaluation, retention, and oversight of the Company’s independent registered public accounting firm; • The approval of services performed by the Company’s independent registered public accounting firm; • Reviewing the responsibilities, functions, and performance of the Company’s internal audit function; • Reviewing the scope and results of internal audits and ongoing assessments of the Company’s risk management processes and system of internal control; • Reviewing and approving in advance any related party transactions; and • Evaluating the Company’s system of internal control over financial reporting and disclosure controls and procedures. The report of our Audit Committee is found below under the caption “Audit Committee Report.” The Board has determined that each of the Audit Committee members meets the Audit Committee membership requirements set forth by the NYSE and the SEC, including that they be “independent” and financially literate. Furthermore, the Board has determined that Ms. Tsingos, Ms. Rogge, and Ms. Lynch each qualify as an “Audit Committee Financial Expert” as that term is defined under SEC rules and have “accounting or related financial management expertise” as contemplated by NYSE rules.
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| Compensation Committee |
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The current members of the Compensation Committee are Stephen D. Kelley, David B. Miller, Christine A. Tsingos, and May Su, who also serves as chairperson of the committee. The Compensation Committee is responsible for, among other things: • Reviewing and approving the compensation of the Company’s officers; • Reviewing and recommending to the Board for approval the compensation policy for the Company’s non-employee directors; and • Administering the Company’s equity compensation plans. With respect to the compensation of the Company’s CEO, the Compensation Committee reviews and approves the various elements of the CEO’s compensation. With respect to other officers, including each of our named executive officers (“NEOs”), the Compensation Committee reviews the compensation for such individuals presented to the Compensation Committee by the CEO and the reasons therefor and, in its discretion, may approve or modify the compensation packages for such individuals. The Compensation Committee has delegated to the Company’s CEO the authority, within certain parameters, to approve the grant of restricted stock units (“RSUs”) to employees and consultants who are not directors, executive officers, or officers reporting to the CEO. In accordance with its charter, the Compensation Committee may form, and delegate its authority to, subcommittees when appropriate. Further, the Compensation Committee has the authority to retain independent compensation consultants and to obtain advice from internal or external legal, accounting, and other advisors to assist in the evaluation of director, officer, or employee compensation or other matters within the scope of the Compensation Committee’s responsibilities and is directly responsible for the appointment, compensation, and oversight of such consultants and other outside advisors, including their fees and other retention terms. From time to time, the Compensation Committee engages the services of such independent compensation consultants to provide advice on compensation plans and
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issues related to the Company’s executive officer and non-executive officer employees. In 2023, the Compensation Committee engaged Compensia, Inc. (“Compensia”) to provide such assistance to the Compensation Committee. Each current member of our Compensation Committee is a “non-employee” director within the meaning of Rule 16b-3 under the Exchange Act. The Board has determined that each of the Compensation Committee members meets the Compensation Committee membership requirements set forth by the NYSE and the SEC, including that they be “independent.” For further discussion of the Compensation Committee and its processes and procedures, please refer to the “Compensation Program Objectives, Design, and Practices” section in the Compensation Discussion and Analysis below. The Compensation Committee Report is included under the caption “Compensation Committee Report on Executive Officer Compensation” in this proxy statement.
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| Nominating & Governance Committee |
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The current members of the Nominating & Governance Committee are David B. Miller, Christopher A. Seams, May Su, and Leo Berlinghieri, who also serves as chairperson of the committee. The responsibilities of the Nominating & Governance Committee include: • Identifying prospective director nominees and recommending to the Board director nominees for the next Annual Meeting of Stockholders and replacements of a director in the event of a vacancy on the Board; • Recommending to the Board the appointment of directors to Board committees; • Developing and recommending to the Board, and monitoring compliance with, the corporate governance guidelines applicable to the Company; • Managing the CEO selection process; • Overseeing evaluation of Company management; and • Conducting an annual review of management succession planning. The Nominating & Governance Committee also oversees the annual evaluation of the Board, the committees of the Board and the individual directors. Among other topics, the evaluation in general assesses: • For both the Board and the committees: o Their structure and composition; o The format and content of meetings; and o The effectiveness of the Board and the committees, as applicable. • For each individual director: o Their performance and approach to their directorship; o Their understanding of their role as a director; o Their understanding of critical aspects of the Company’s business, products and strategy; and o Their skills, experience and ongoing training. The goal of the evaluation is to identify and address any performance issues at the Board, committee or individual level, should they exist, identify potential gaps in the boardroom and to assure the maintenance of an appropriate mix of director skills and qualifications. Upon completion of the evaluation, the Nominating & Governance Committee provides feedback to the Board, the committees and the individual directors regarding the results of the evaluation and raises any issues that have been identified which may need to be addressed. In 2023, the Nominating & Governance Committee engaged Spencer Stuart, an executive search and leadership consulting firm, to assist with the Board evaluation. The Nominating & Governance Committee utilizes a variety of methods for identifying and evaluating potential candidates for joining the Board. For 2023, the Nominating & Governance Committee engaged ON Partners, an
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executive search and leadership consulting firm, to assist with this process. The Nominating & Governance Committee’s general policy is to assess the appropriate size and needs of the Board and whether any vacancies are expected due to retirement or otherwise. In addition, candidates for director are typically reviewed in the context of the current composition of the Board, the operating requirements of the Company, the current needs of the Board, and the long-term interests of stockholders, with the goal of maintaining a balance of knowledge, experience and capability. In the event those vacancies are anticipated, or otherwise arise, the Nominating & Governance Committee will consider recommending various potential candidates to fill such vacancies. Candidates may also come to the attention of the Nominating & Governance Committee through its current members, stockholders or other persons. The Board has determined that each of the Nominating & Governance Committee members meets the Nominating & Governance Committee membership requirements, including the independence requirements of the NYSE and the SEC.
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| M&A Committee |
PROXY STATEMENT
The current members of the M&A Committee are Susan D. Lynch, Karen M. Rogge, Christopher A. Seams, and David B. Miller, who also serves as chairperson of the committee. As previously disclosed, Ms. Rogge will be retiring from the Board and the M&A Committee as of the Annual Meeting. The Board established the M&A Committee as a standing committee in May 2022 to assist the Board in evaluating potential acquisitions, investments, mergers, divestitures, and similar strategic transactions and to oversee management’s execution of such strategic transactions. The M&A Committee’s responsibilities include: • Reviewing and assessing strategic transactions identified by management, including the valuation, strategic rationale and integration strategy for any proposed transaction; • Approving non-binding term sheets, letters of intent, indications of interest, and other similar documents for strategic transactions; • Overseeing the diligence processes for strategic transactions; and • Providing guidance to management as to the desired methodology and processes for identification, development, and presentation of strategic opportunities.
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| Other Committees |
PROXY STATEMENT
Our Board may from time to time establish other special or standing committees to facilitate the oversight of management of the Company or to discharge specific duties delegated to the committee by the full Board.
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Compensation Committee Interlocks And Insider Participation During fiscal year 2023, Leo Berlinghieri, Stephen D. Kelley, David B. Miller, May Su, and Christine A. Tsingos were each a member of the Compensation Committee. Mr. Berlinghieri ceased serving on the committee as of May 2023. No member of our Compensation Committee was at any time during fiscal year 2023, or formerly, an officer or employee of Onto Innovation or any subsidiary of Onto Innovation. No member of our Compensation Committee had any relationship with the Company during fiscal year 2023 requiring disclosure under Item 404 of Regulation S-K under the Exchange Act. During fiscal year 2023, none of our executive officers served as a member of the Board of Directors or Compensation Committee (or other committee serving an equivalent function) of any entity that had one or more executive officers serving as a member of our Board of Directors or Compensation Committee. Board Membership Criteria And Nominee Identification The Nominating & Governance Committee of the Board determines the required selection criteria and qualifications of director nominees based upon the needs of the Company at the time nominees are considered. While the Nominating & Governance Committee has no specific minimum qualifications for director candidates, persons considered for nomination to the Board must demonstrate the following qualifications to be recommended by the Nominating & Governance Committee for election: • The candidate must exhibit proven leadership capabilities, high integrity, and experience with a high level of responsibilities within his or her chosen field; • The candidate must possess the ability to apply good business judgment and be of sound mind and high moral character; • The candidate must have no personal or financial interest that would conflict or appear to conflict with the interests of the Company; • The candidate must be in a position to properly exercise his or her duties of loyalty and care and be willing and able to commit the necessary time for Board and committee service; and • The candidate must have the ability to grasp complex principles of business, finance, international transactions and semiconductor inspection, metrology, lithography, and related software technologies. The Nominating & Governance Committee retains the right to modify these qualifications from time to time. In selecting director nominees, the Nominating & Governance Committee considers, among other factors: • The competencies and skills that the candidate possesses and the candidate’s areas of qualification and expertise that would enhance the composition of the Board and further its ability to offer advice and guidance to management; • How the candidate would contribute to the Board’s overall balance of expertise, perspectives, backgrounds, and experiences in substantive matters pertaining to the Company’s business; and • The candidate’s demonstrated excellence in his or her field and commitment to rigorously representing the long-term interests of the Company’s stockholders. When current Board members are considered for nomination for reelection, the Nominating & Governance Committee also takes into consideration their prior contributions to and performance on the Board and their record of attendance. The Nominating & Governance Committee considers the above criteria for nominees identified by the Nominating & Governance Committee itself, by stockholders, or through other sources. The Nominating & Governance Committee uses the same criteria for evaluating all nominees, regardless of the original source of nomination. The Nominating & Governance Committee may use the services of a third-party search firm to assist in the identification or evaluation of Board member candidates.
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Consideration Of Director Nominees The Nominating & Governance Committee has a formal policy with regard to consideration of director candidates recommended by the Company’s stockholders, which is contained within the Company’s Director Candidate Policy, which may be found on our website at: https://investors.ontoinnovation.com/governance/governance-documents/ In accordance with this policy, the Nominating & Governance Committee will consider recommendations and nominations for director candidates from stockholders holding no less than 1% of the Company’s securities for at least 12 months prior to the date of the submission of the recommendation or nomination. Stockholders wishing to recommend persons for consideration by the Nominating & Governance Committee as nominees for election to the Company’s Board can do so by writing to the Office of the General Counsel of the Company at its principal executive offices giving: • The candidate’s name, age, business address and residence address; • The candidate’s detailed biographical data and qualifications including principal occupation and employment history; • The class and number of shares of the Company which are beneficially owned by the candidate; • The candidate’s written consent to being named as a nominee and to serving as a director, if elected; • Information regarding any relationship between the candidate and the Company in the last three years; • Any other information relating to the candidate that is required by law to be disclosed in solicitations of proxies for election of directors; • The name and address of the recommending or nominating stockholder; • The class and number of shares of the Company which are beneficially owned by the recommending or nominating stockholder; and • A description of all arrangements or understandings between such stockholder and each nominee and any other person or persons (naming such person or persons) relating to the nomination. Stockholders also have the right to directly nominate director candidates, without any action or recommendation on the part of the Nominating & Governance Committee or the Board, by following the procedures set forth in Section 2.5 of the Company’s Bylaws. Corporate Governance Guidelines Our Board has adopted Corporate Governance Guidelines, which, along with the Company’s Charter and Bylaws and the Board committee charters, provide the framework for the governance of Onto Innovation. The Board follows the procedures and standards in the Corporate Governance Guidelines to fulfill its responsibilities and discharge its governance duties. A copy of the Corporate Governance Guidelines is available on our website at:
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Codes Of Ethics We have adopted a Code of Business Conduct and Ethics (applicable to all directors, officers, employees, consultants, and contractors) and a Financial Information Integrity Policy (applicable to our senior financial officers, including our CEO and Chief Financial Officer (“CFO”) and Controller) that each set forth principles of ethical and legally compliant conduct and establish procedures for reporting any violations. Copies of the Code of Business Conduct and Ethics and the Financial Information Integrity Policy may be found on our website at: https://investors.ontoinnovation.com/governance/governance-documents/ or may be requested (without charge) by writing to: Onto Innovation Inc. Attention: Investor Relations 16 Jonspin Road Wilmington, Massachusetts 01887 The Company will post on its website any amendment or waiver of a provision of our Code of Business Conduct and Ethics as may be required, and within the time period specified, by applicable SEC rules. Corporate Social Responsibility An important part of advancing the semiconductor industry through our innovation is being a socially responsible company. Our Company’s core values of Passion, Integrity, Collaboration, and Results underpin our commitments to sustainable growth and to making a positive contribution to people and the planet. We strive to achieve responsible and sustainable business practices and continuous improvement in our own operations, in our partnerships with our customers, across our supply chain, and in our engagements with our other stakeholders. Our Company invests in environmental, social, and governance (“ESG”) initiatives across our business and integrates ESG principles into our day-to-day operations. Business and Governance. Our Company has established a cross-functional ESG executive leadership team that is responsible for proposing goals, developing and executing strategy, and embedding ESG into our operations management. This ESG leadership team provides regular updates to the Board and engages them to discuss ESG strategy, gain alignment on goals, and report on progress. Our Board is actively engaged in the Company’s ESG oversight and has the primary responsibility for our ESG priorities. Board committees provide further guidance and oversight on relevant ESG topics including the Compensation Committee on human capital management, the Audit Committee on information security and the Nominating & Governance Committee on ethics compliance. Workplace. As described in the “Social Programs” section in our 2022 ESG Report, our Company strives to provide a work environment that fosters inclusion and diversity, ensures every voice is heard, and enables employees to achieve their full potential. Our Company aims to maintain a collaborative, supportive, and opportunity-rich culture that enhances innovation and employee engagement. We strive to protect the health and safety of our personnel throughout our entire operation, including our offices, manufacturing sites, research and development (“R&D”) centers, and our field team working at customer sites. Community. Our Company believes that positively involving our employees and giving back to our community is central to our culture and an expression of our core values. In 2021, the Company initiated RISE (Reimagining Initiatives for Society and the Environment) Teams, which have direct oversight from the ESG leadership team. These teams are formed at each location globally in order to promote environmental sustainability, community engagements, local charitable giving including employee volunteer hours and employee donations. Our RISE Teams’ philanthropy and volunteerism programs provide financial and human services to improve the quality of life in the communities in which we operate. We are committed to creating positive impacts in communities around the world by contributing to local, national, and international organizations that support community needs such as hunger, food and water security, disadvantaged children and senior citizens, health improvement, and environmental protection.
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Sustainable Operations. We believe that incorporating environmental sustainability into business leads to better products, more efficient operations, and added value for our customers. As the world tackles climate change and other critical environmental issues, we seek to do our part by responsibly managing our impact with global goals for renewable energy use, carbon footprint per person, water conservation, beneficial use, and landfill hazardous waste reduction and elimination. We carefully monitor and manage our environmental impact across our business and work to implement cost-effective best practices, focusing our efforts where we believe we can have the biggest long-term impact. Our Company looks at impacts from procurement to manufacturing, during R&D and product design, and throughout a product’s lifecycle. We carefully manage our environmental impact, set goals, and report progress annually through our annual ESG report, which is carefully reviewed and verified by our internal audit function. Products and Customers. Our Company demands excellence in our quality and environmental performance, as demonstrated through our product and process qualification commitments, which resulted in our ISO 9001 Quality Management certification. We continuously strive to develop innovative products and solutions that help our customers improve their product yields and reduce the amount of scrapped materials. We seek to achieve this through our monitoring processes and by alerting customers via our software products before specification limits are reached, thereby helping customers avoid product test failures. In addition, our equipment meets or exceeds safety requirements and incorporates higher throughput to reduce the energy required to process customer products on a per unit basis, benefiting our customers and the environment. Our Company also strives to extend the life of our products and solutions to enable our customers to realize greater value from our products with a potentially lower environmental impact. Responsible Supply Chain. Our Company understands the importance of an ethical, responsible, resilient, and diverse supply chain, and we engage with our suppliers to address a wide range of issues including human rights, humane treatment, freely chosen employment, labor, anti-corruption, supplier diversity, environmental impact, and responsible mineral sourcing. We are a strong proponent of supply-chain-related industry standards and endeavor to uphold the guidelines published by the Responsible Business Alliance (“RBA”). Since joining in 2021, the Company has been an affiliate member of the RBA, the world’s largest industry coalition dedicated to corporate responsibility in global supply chains. Beginning in 2022, our direct suppliers are expected to adhere to our Global Supplier Code of Conduct, which incorporates the RBA code of conduct and covers topics such as ethics, integrity, transparency, anti-corruption, conflict minerals, human trafficking, environmental sustainability, and social responsibility. Acknowledgment of and consent to adhere to our Global Supplier Code of Conduct is a mandatory requirement of our new supplier onboarding process. For more information about our ESG efforts, please refer to our Annual ESG Report available in the Company section of our website at https://ontoinnovation.com/company/environmental-social-governance. Our ESG Report shall not be deemed “filed” with the SEC for purposes of federal securities law, and it shall not be incorporated by reference into any of the Company’s current, past or future SEC filings unless specifically noted in such filing. The information contained on our website is not part of this document and the ESG report shall not be deemed soliciting material.
Related Person Transactions Policy
| Name | Fees Earned or Paid in Cash | Stock Awards (1) | All Other Compensation | Total | | Leo Berlinghieri | $90,000 | $187,902 | — | $277,902 | | Stephen D. Kelley (2) | $87,500 | $228,992 | — | $316,492 | | David B. Miller | $87,500 | $187,902 | — | $275,402 | | Karen M. Rogge | $82,500 | $187,902 | — | $270,402 | | Christopher A. Seams | $127,500 | $187,902 | — | $315,402 | | May Su | $95,000 | $187,902 | — | $282,902 | | Christine A. Tsingos | $102,500 | $187,902 | — | $290,402 |
CONCLUSION
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | | Michael P. Plisinski | 2023 | $692,718 | — | $4,327,136 | $624,741 | $1,433 | $5,646,028 | | Chief Executive Officer | 2022 | $634,751 | — | $3,977,905 | $697,044 | $3,601 | $5,313,301 | | | 2021 | $639,353 | — | $3,487,747 | $995,529 | $11,681 | $5,134,310 | | Mark R. Slicer (4) | 2023 | $461,942 | — | $834,971 | $237,287 | $10,590 | $1,544,790 | | Chief Financial Officer | 2022 | $275,192 | $150,000 | $1,000,038 | $240,334 | $5,652 | $1,671,216 | | Yoon Ah E. Oh (5) | 2023 | $370,067 | — | $1,073,669 | $191,900 | $10,590 | $1,646,226 | | Vice President, General Counsel, and Corporate Secretary | 2022 | $359,288 | — | $568,303 | $206,287 | $9,490 | $1,143,368 | | | 2021 | $60,577 | $250,000 | $600,008 | $54,610 | $115 | $965,310 | | Srinivas Vedula (6) | 2023 | $310,195 | — | $500,972 | $163,696 | $9,996 | $984,859 | | Senior Vice President, Customer Success | | | | | | | | | Ramil Yaldaei (6) | 2023 | $310,961 | — | $475,049 | $159,982 | $10,019 | $956,011 | | Chief Operating Officer | | | | | | | |
CONCLUSION
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year (1) | Summary Compensation Table Total For CEO | Compensation Actually Paid to CEO (5) | Average Summary Compensation Table Total For NEOs | Average Compensation Actually Paid to NEOs (5)(2) | Total Shareholder Return (3) | Peer Group Total Shareholder Return (3) | Net Income (in thousands) (4) | Total Revenue (in thousands)(4) | | 2023 | $5,646,028 | $21,220,183 | $1,282,972 | $2,783,035 | $318.23 | $165.64 | $121,159 | $815,868 | | 2022 | $5,313,301 | $2,086,925 | $1,129,974 | $711,974 | $86.27 | $42.98 | $223,334 | $1,005,183 | | 2021 | $5,134,310 | $13,985,674 | $1,069,940 | $2,149,621 | $176.97 | $125.09 | $142,349 | $788,899 | | 2020 | $3,763,688 | $4,453,187 | $934,489 | $1,463,581 | $30.11 | $56.09 | $31,025 | $556,496 |