DEF 14A of Azenta, Inc.
Filed Dec 17, 2024 · FY20240001140361-24-049734
RECORD DATE: December 9, 2024
| CEO PAY RATIO | 57 | | PAY VERSUS PERFORMANCE | 58 | | EQUITY COMPENSATION PLAN INFORMATION | 64 | | RELATED PARTY TRANSACTIONS | 64 | | PROPOSAL NO. 2 ADVISORY VOTE ON EXECUTIVE COMPENSATION | 65 | | AUDIT COMMITTEE REPORT | 66 | | INDEPENDENT AUDITOR FEES AND OTHER MATTERS | 68 | | PROPOSAL NO. 3 RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 69 | | GENERAL ANNUAL MEETING INFORMATION | 70 | | Record Date, Voting Rights and Outstanding Shares | 70 | | Electronic Distribution | 70 | | Solicitation | 70 | | Quorum and Required Vote | 70 | | Voting of Proxies | 71 | | Revocation of Proxies | 72 | | Proxy Materials Available via the Internet | 72 | | OTHER MATTERS | 73 | | Standards of Conduct | 73 | | Stockholder Proposals and Recommendations For Director | 73 | | Voting Results | 73 | | Householding of Proxy Materials | 73 | | Material Not Incorporated by Reference | 74 | | Annual Report on Form 10-K | 74 | | APPENDIX A – RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURES USED IN PROXY STATEMENT | A-1 |
Our Director Nominees
Our Director Nominees You are being asked to vote on the election of the following ten (10) nominees to our Board. All directors are elected annually by the affirmative vote of a plurality of votes cast. The chart below summarizes our director nominees’ personal information and expected committee memberships following the Annual Meeting. You can find detailed information about each director nominee’s background, skill sets and areas of expertise later in this proxy statement.
Our Director Nominees
| | | | | | Committee Memberships (effective upon election at Annual Meeting) | | | | | | Name and Principal Occupation | Age | Director Since | Independent | Other Public Boards | Audit | ESG | Human Resources & Compensation | Nominating & Corporate Governance | Value Creation | | John Marotta Chief Executive Officer of Azenta, Inc. | 45 | 2024 | | | | | | | √ | | Frank E. Casal, Chairperson Former Vice Chair, Audit, KPMG LLP | 70 | 2021 | √ | | Chair | | | √ | Non- Voting Observer | | William L. Cornog Former Head of KKR Capstone | 60 | 2024 | √ | 2 | | | | | Chair | | Robyn C. Davis Managing Director at AngelHealthcare Investors | 63 | 2013 | √ | 1 | | | Chair | √ | | | Dipal Doshi Chief Executive Officer of Entrada Therapeutics, Inc. | 49 | | √ | 1 | √ | √ | | | | | Quentin Koffey Founder, Managing Partner and Chief Investment Officer of Politan Capital Management | 47 | 2024 | √ | 1 | | | √ | | √ |
Our Director Nominees
| | | | | | Committee Memberships (effective upon election at Annual Meeting) | | | | | | Name and Principal Occupation | Age | Director Since | Independent | Other Public Boards | Audit | ESG | Human Resources & Compensation | Nominating & Corporate Governance | Value Creation | | Erica J. McLaughlin EVP, CFO and Head of Corporate Strategy at Cabot Corporation | 48 | 2020 | √ | | √ | Chair | | | | | Dr. Martin D. Madaus Senior Operating Executive at the Carlyle Group Inc. | 65 | 2024 | √ | 3 | | | | Chair | √ | | Alan J. Malus Former Corporate Executive Vice President of Thermo Fisher | 65 | 2024 | √ | 1 | | | √ | | √ | | Dr. Tina S. Nova Former President of Veracyte’s CLIA U.S. Business | 71 | 2023 | √ | 1 | | √ | √ | | |
Board of Directors
Board of Directors The Board of Directors has responsibility for establishing broad corporate policies and reviewing the Company’s overall performance, rather than day-to-day operations. The Board’s primary responsibility is to oversee management and, in so doing, to serve the Company’s and its stockholders’ best interests while also promoting corporate social responsibility. Management keeps the directors informed of the Company’s activities through regular written reports and presentations at Board and Committee meetings. The Board has adopted Corporate Governance Guidelines that are publicly available on our website at www.azenta.com. The Corporate Governance Guidelines call for, among other things, the maintenance of Board leadership that is separate from the Company’s executive leadership, whether that comes in the form of an independent chair or an independent lead director. The independent chair presides over the regularly held executive sessions of the Board, noted below, at which the chief executive officer is not present. Each director is required to stand for election annually. The Board has assessed each of the ten nominees for director against the SEC and the Nasdaq Stock Market standards for independence and determined that Messrs. Casal, Cornog, Doshi, Koffey, and Malus, Drs. Nova and Madaus, and Mses. Davis and McLaughlin, nine of the ten director nominees, meet the general definition of an independent director as defined by the Nasdaq Stock Market. The Board has further determined that all members of the Audit Committee (among others) meet the Nasdaq Stock Market’s stricter definition of independence required for members of an Audit Committee and determined that each member of the Audit Committee qualifies as an audit committee financial expert. The Board of Directors held fifteen meetings during the fiscal year ended September 30, 2024 and took action four times by written consent. Each current director attended at least 75% of the meetings of the Board of Directors and of committees of which he or she was a member held while he or she was a director during the last fiscal year. In connection with each of the Board’s four regularly scheduled meetings, all non-employee members of the Board met in executive session without the chief executive officer being present. The Board of Directors encourages stockholders to communicate with our senior management and directly with members of the Board of Directors on matters of concern related to our business and affairs. Stockholders who wish to communicate with members of the Board of Directors may do so by the following means:
Board of Directors
| • | By telephone: (732) 416-4975 |
Board of Directors
| • | By electronic mail: Directors@azenta.com |
Board of Directors
| • | By first class mail, overnight mail or courier: |
Board of Directors
Azenta Board of Directors Azenta, Inc. 200 Summit Drive, 6th Floor Burlington, MA 01803
Board of Directors
| • | By website: https://azenta.investorroom.com/shareholder-feedback |
Board of Directors
As a matter of policy, we encourage the directors to attend meetings of stockholders, in person, virtually or by telephone. All of the nominees for election as director, other than Messrs. Cornog, Doshi, Koffey, Malus, and Marotta, were directors at the time of the last annual stockholder meeting in January 2024 and attended that meeting. In accordance with our Corporate Governance Guidelines, members of the Board are encouraged to periodically attend formal continuing education programs for directors, with a recommended frequency of at least once every two years. We support and encourage Board members to take advantage of director education opportunities. There are many public company director educational programs available, and we believe that our Board members should keep current on the fast-changing areas of corporate governance and related regulations.
Information on Nominees
Information on Nominees Following is certain information with respect to the ten nominees, in each case setting forth the particular experience, qualifications, attributes and skills of each director nominee that led the Board to conclude that such person should serve as a director of Azenta.
Information on Nominees
| John P. Marotta | Age 45 | (Director since September 2024) President and Chief Executive Officer | | | Committees: Value Creation Other Current Public Boards: None Former Public Boards: Senseonics Holdings, Inc. (NYSEAMERICAN: SENS) Education: BS, Dayton University MBA, University of Denver | Career Highlights: Mr. Marotta joined Azenta Life Sciences in September 2024 as President and CEO. He has two decades of experience leading global companies in life sciences, medical devices, and diagnostics. Prior to joining the company, Mr. Marotta served as Executive in Residence of Patient Square Capital, a leading healthcare investment firm. Previously, he served as CEO and President of PHC Holdings Corp. (TSE: 6523) (formerly Panasonic Health Care), a diversified global life sciences, diagnostics, and medical device company focused on precision healthcare, growing global revenues, and leading its IPO from owners KKR Capital. He also held a variety of senior executive roles in leading life sciences companies, including Danaher (NYSE: DHR), Envista Holdings (NYSE: NVST), and Cardinal Health (NYSE: CAH). Key Expertise Provided to the Board: Mr. Marotta brings executive leadership experience as CEO of Azenta Life Sciences, as well as two decades of experience leading global companies in life sciences, medical devices, and diagnostics. Mr. Marotta has demonstrated consistent achievement in organic revenue growth, operational efficiencies, and significant value-creating transactions throughout his career. | | | Key Skills • Executive Leadership in Life Sciences/Healthcare • Global Business • Investment Management • Growth Strategies and Market Expansion • Operations Experience |
Information on Nominees
| Frank E. Casal | Age 70 | (Director since November 2021 and Chair since January 2024) Board Chair | | | Committees: Audit (Chair) Nominating and Governance Other Current Public Boards: None Former Public Boards: None Education: BS, Boston University | Career Highlights: Mr. Casal formerly served as Vice Chair of Audit of KPMG, where he spent over forty years of his career. Having led the Audit function consisting of approximately 9,000 professionals at KPMG, he has proven leadership and management experience, offering unique perspective to the Azenta Board’s ongoing efforts to manage talent and human capital. Key Expertise Provided to the Board: Mr. Casal brings best-in-class knowledge of financial reporting, accounting and audit to the Azenta Board, drawing on his experience providing supervisory responsibilities to large, global Fortune 500 companies. Mr. Casal has significant expertise in transforming businesses through mergers and acquisitions, financing transactions and other strategic priorities. | | | Key Skills • Global Business • Financial Management, Accounting and Audit • Risk and Investment Management • Financing transactions • M&A Integration Experience • Experience in highly regulated industries • Talent and Leadership Development |
Information on Nominees
| William L. Cornog | Age 65 | (Director since November 2024) | | | Committees: Value Creation (Chair) Other Current Public Boards: Brightview Holdings Inc. (NYSE: BV) LiveWire (NYSE: LVWR) Former Public Boards: None Education: BA, Stanford University MBA, Harvard University | Career Highlights: Mr. Cornog is the former head of KKR Capstone, the portfolio operations team of KKR & Co. In addition to leading Capstone, Mr. Cornog chaired KKR's portfolio management committees for the Americas, Europe, Asia, Infrastructure, Impact & Technology Growth and was a member of the Investment & Distribution and Valuation Committees. Key Expertise Provided to the Board: Mr. Cornog brings extensive experience in financial investment, advisory and monitoring, as well as global portfolio experience. | | | Key Skills • Investment Management • Growth Strategies and Market Expansion • Public Company Director Experience • M&A and Integration Experience • Fundamental Valuation and Corporate Management Analysis • Information Security Experience |
Information on Nominees
| Robyn C. Davis | Age 63 | (Director since June 2013) | | | Committees: Human Resources and Compensation (Chair) Nominating and Governance Other Current Public Boards: Psychemedics Corporation (NASDAQ: PMD) Former Public Boards: None Education: BA, Tufts University MBA, Harvard University Executive Master Professional Director Certification, American College of Corporate Directors | Career Highlights: Since 2000, Ms. Davis has served as Managing Director of AngelHealthcare Investors, a group comprised of Boston-based health and investment leaders. Ms. Davis manages the investment process and the portfolio of early-stage investments including medical devices, life sciences, information technology and professional services. She served on the boards of several portfolio companies and actively contributed to their fundraising, business model, and successful exit. Key Expertise Provided to the Board: Ms. Davis brings valuable investor-focused perspective to the Azenta Board and its ongoing efforts to maximize shareholder value. Ms. Davis also has strong financial acumen, particularly as it relates to operational matters and extensive experience supporting life sciences companies as they scale and grow, both organically and through mergers and acquisitions, having successfully exited certain portfolio companies and having sat on the Board of CRA Health when it was acquired by Volpara. | | | Key Skills • Executive Leadership in Life Sciences/Healthcare • Risk and Investment Management • Operations Experience • Growth Strategy and Market Expansion • M&A and Integration Experience • Talent and Leadership Development • Public Company Director Experience |
Information on Nominees
| Quentin G. Koffey | Age 46 | (Director since November 2024) | | | Committees: Human Resources and Compensation Value Creation Other Current Public Boards: Masimo Corporation (NASDAQ: MASI) Former Public Boards: None Education: BA, Yale University JD, Stanford University MBA, Stanford University | Career Highlights: Mr. Koffey is Founder, Managing Partner and CIO of Politan Capital Management. Prior to founding Politan in 2021, Mr. Koffey was a partner at Senator Investment Group LP from 2019 to 2021, a Portfolio Manager for Strategic Investments at The D.E. Shaw Group from 2017 to 2019 and a Portfolio Manager at Elliott Management Corporation from 2010 to 2017. Key Expertise Provided to the Board: Mr. Koffey brings his expertise as a professional investor as Founder, Managing Partner and CIO of Politan Capital Management, as well as his experience enhancing strategy, financial management and governance in the healthcare sector. | | | Key Skills • Risk and Investment Management • Strategy, Financial Management and Governance • Public Company Director and Board Committee Leadership Experience • Capital Allocation • Fundamental Valuation and Corporate Management Analysis |
Information on Nominees
| Martin Madaus | Age 65 | (Director since January 2024) | | | Committees: Nominating and Governance (Chair) Value Creation Other Current Public Boards: Repligen Corporation (NASDAQ: RGEN) Quanterix Corporation (NASDAQ: QTRX) Hologic, Inc. (NASDAQ: HOLX) Former Public Boards: Standard Biotools Inc. (NASDAQ: LAB) Covidien Ltd. (COV) (Acquired by Medtronic plc) Mettler-Toledo International Inc. (NYSE: MTD) Millipore Corporation (MIL) (Acquired by Merck KGaA) Education: PhD, Veterinary Medicine, Tieraerztliche Hochschule Hannover DVM, Veterinary Medicine, Ludwig-Maximilians Universität München | Career Highlights: Dr. Madaus currently serves as a Senior Operating Executive at the Carlyle Group Inc. (NASDAQ: CG), a global investment firm with $382 billion in assets under management. Dr. Madaus has notable experience in strategy, mergers and acquisitions, and commercial transformations, having served as Chairman, President and CEO of Millipore Corporation, where he led their sale to Merck KGaA (FWB:MRK) for $7.2 billion and also led the $4.2 billion leveraged buyout of Ortho Clinical Diagnostics. Dr. Madaus previously served as Chairman and CEO at Other-Clinical Diagnostics and, prior to that, served as President and CEO, N.A. of Roche Diagnostics Corp, a subsidiary of Roche Holdings AG (SWX: ROG). Key Expertise Provided to the Board: As an experienced public company CEO who has spent his career in diagnostics and life science tools, both as an executive and a board member, Dr. Madaus brings valuable operational insight and industry expertise to the Azenta Board and a proven track record of creating shareholder value in both public and private life science companies. | | | Key Skills • Executive Leadership in Life Sciences/Healthcare • Growth Strategies and Market Expansion • Investment Management • Global Business • Public Company Director Experience • M&A and Integration Experience |
Information on Nominees
| Alan J. Malus | Age 65 | (Director since November 2024) | | | Committees: Value Creation Other Current Public Boards: None Former Public Boards: PHC Holding Corp. (TSE: 6523 Education: Bachelor’s Degree, University of Michigan MBA, University of Pittsburgh | Career Highlights: Mr. Malus formerly served as Corporate Executive Vice President of Thermo Fisher. Prior, Mr. Malus served as President, Laboratory Products and Services at Thermo Fisher. He has held various leadership positions and senior executive positions in finance, marketing, commercial development, and operations since joining Thermo Fisher in 1998. Previously, Mr. Malus served as an independent director at PHC Holdings Corp., a global healthcare company, headquartered in Japan. Key Expertise Provided to the Board: Mr. Malus brings over 18 years of broad-reaching executive and operating experience in the life sciences and diagnostics industry. Mr. Malus also has global healthcare experience, with experience in enhancing growth strategies and market expansion. | | | Key Skills • Executive Leadership in Life Sciences/Healthcare • Global Business • Experience in Highly Regulated Industries • Growth Strategies and Market Expansion • Operations Experience |
Information on Nominees
| Erica J. McLaughlin | Age 48 | (Director since April 2020) | | | Committees: Environmental, Social and Governance (Chair) Audit Other Current Public Boards: None Former Public Boards: None Education: BS, Boston College MBA, Boston College | Career Highlights: Ms. McLaughlin currently serves as Executive Vice President, CFO and Head of Corporate Strategy at Cabot Corporation (NYSE: CBT), a publicly traded manufacturer of specialty chemicals and performance materials. Ms. McLaughlin joined Cabot in 2002 and has held a variety of roles within the finance organization and Cabot’s global businesses, most recently as vice president of business operations for the Reinforcement Materials segment and general manager of the tire business. Prior to joining Cabot, Ms. McLaughlin worked for KPMG, LLP in their audit services division. Key Expertise Provided to the Board: Ms. McLaughlin brings international business experience and expertise in financial areas and strategy, with a strong background in accounting and audit. She also has significant experience in mergers, acquisitions and integrations, as well as industrial knowledge of life sciences, having served on Azenta’s Board during its transition from Brooks Automation. Further, her experience as the Inaugural Chairperson of Cabot’s Diversity and Inclusion Steering Committee and as Co-Chair of the Governance pillar at Cabot’s ESG executive management structure, gives her valuable perspective on ESG, DEI and other matters top-of-mind for Azenta’s leadership. | | | Key Skills • Global Business experience • Public company executive experience • Financial Management, Accounting and Audit • Growth Strategy and Market Expansion • ESG/ Sustainability • M&A and Integration Experience • Leadership and Talent development |
Information on Nominees
| Tina S. Nova | Age 71 | (Director since January 2023) | | | Committees: Environmental, Social and Governance Human Resources and Compensation Other Current Public Boards: Exagen, Inc. (NASDAQ: XGN) Former Public Boards: Veracyte Inc. (NASDAQ: VCYT) Arena Pharmaceuticals Inc. (ARNA) (Acquired by Pfizer, Inc.) Education: BS, The University of California, Irvine PhD, The University of California, Riverside Postdoctoral Research, New York University Medical Center | Career Highlights: Ms. Nova has extensive experience in the creation of start-up companies and the commercialization of products with a focus on molecular diagnostics. Ms. Nova spent 15 years as the co-founder, President and CEO of the publicly traded company, Genoptix Medical Laboratories, from inception to its acquisition by Novartis Pharmaceuticals in 2011. She has worked for, managed, raised capital and co-founded a number of early-stage innovative biotechnology companies in San Diego including Nanogen, Inc., Ligand Pharmaceuticals and Hybritech, Inc. Key Expertise Provided to the Board: Ms. Nova is an industry veteran in life sciences, with experience in building and leading successful life science businesses from conception through IPO, including public-company CEO experience. She has deep insights into commercial operations, sales and marketing efforts and brings significant experience in mergers, acquisitions and integration, having overseen the sale of several companies as both an executive and director. She also provides relevant life sciences executive leadership experience, having held Chief Executive roles at Decipher Biosciences, sold to Veracyte (NASDAQ: VCYT) in 2021, Molecular Stethoscope and Genoptix, which she co-founded and oversaw its $470 million sale to Novartis AG (NYSE: NVS) in 2011. | | | Key Skills • Executive Leadership in Life Sciences/Healthcare • Public company executive experience • Global Business experience • Operational Experience • Growth Strategy and Market Expansion • M&A and Integration Experience |
Information on Nominees
| Dipal Doshi | Age 49 | (Director Nominee) | | | Committees: Other Current Public Boards: Entrada Therapeutics (NASDAQ: TRDA) Former Public Boards: None Education: BA, Rutgers University MBA, University of Pennsylvania | Career Highlights: Mr. Doshi is the CEO of Entrada Therapeutics and a Member of its Board of Directors. He previously served as President and CEO from 2017 to 2023. Mr. Doshi has led critical functions in biotechnology and pharmaceutical companies, including roles focused on business development, corporate strategy, new product planning, commercial planning and finance. Prior to joining Entrada, Mr. Doshi was the Chief Business Officer at Amicus Therapeutics, a global biotechnology company focused on rare diseases. He has also held senior-level positions at a healthcare private equity fund and Catalent. Earlier in his career, Mr. Doshi worked in Merrill Lynch’s Investment Banking Group and held several roles at Eli Lilly and Company. Key Expertise Provided to the Board: Mr. Doshi brings significant experience in the biotechnology and pharmaceutical industries. His experience in strategy, operational and commercial growth, and perspective as a current public company CEO will be additive to the Board. | | | Key Skills • Executive Leadership in Life Sciences/Healthcare • Public Company Executive Experience • Growth Strategies and Market Expansion • Operations Experience |
Information on Nominees
The following table sets forth the total compensation paid or accrued during the fiscal year ended September 30, 2024 to each of our non-employee directors.
Director Compensation Table
Director Compensation Table
Fiscal Year 2024
| Name(1) | Fees Earned or Paid in cash | Stock Awards(2) | Total | | Frank E. Casal | $132,500 | $237,546 | $370,046 | | Edward Bousa | $48,750 | $162,517 | $211,267 | | Robyn C. Davis | $115,000(3) | $162,517 | $277,517 | | Didier Hirsch | $58,750 | $162,517 | $221,267 | | Erica J. McLaughlin | $112,500 | $162,517 | $275,017 | | Martin Madaus | $48,750 | $162,517 | $211,267 | | Joseph R. Martin(4) | $80,000 | | $80,000 | | Tina Nova | $100,000 | $162,517 | $262,517 | | Krishna G. Palepu(4) | $58,750 | | $58,750 | | Dorothy Puhy(4) | $45,000 | | $45,000 | | Michael Rosenblatt | $105,000 | $162,517 | $267,517 | | Ellen M. Zane(4) | $62,500 | | $62,500 |
Philosophy and Objectives
| • | Recognition that in our cyclical and volatile industries the ability to perform throughout business cycles is critical to our long-term success. |
Key Components of Compensation for Fiscal Year 2024
In allocating total direct compensation among these three components, we seek to provide competitive levels of fixed compensation (base pay and time-based RSUs) and, through annual and long-term variable incentives, provide opportunity for additional compensation where aggressive but achievable performance objectives are met. For fiscal 2024, our CEO’s and other named executive officers’ target pay mix emphasized variable at-risk pay opportunities as illustrated below: Note: CEO pay mix shown is for our former CEO, Dr. Schwartz. Our current CEO, Mr. Marotta, was employed for less than one month in fiscal 2024 and compensation on an annualized basis with a mix of 10% Base Salary, 11%Target Bonus, 20% Time-Based RSUs and 59% Performance Awards with a split of 70% Performance-Based and 30% Fixed. Named Executive Officers Average does not include our former or current CEO.
Determining Executive Compensation
| • | Executive compensation program development. | | • | PBVC and LTIP design, performance metrics and goals determination. | | • | Executive base salary adjustments. | | • | Incentive plan achievement awards and payouts. | | • | Pay program and policies that impact the executive team such as severance and change in control arrangements, stock ownership requirements and other pay governance items. |
Use of Consultants
| • | A review of the appropriateness of our peer group for executive compensation comparison purposes. |
Use of Consultants
| • | An evaluation of the design of our incentive plans (PBVC and LTIP). |
Use of Consultants
| • | An evaluation of the rigor of our short-term and long-term incentive metrics and goals and their corresponding potential impact on increasing stockholder value. |
Use of Consultants
| • | An analysis of our short- and long-term pay for performance alignment relative to our peer group. |
Peer Group
Peer Group In consultation with Pearl Meyer, the HRC Committee annually reviews our peer group to ensure it is appropriate to utilize for external compensation comparisons. Criteria used to select these companies include industry comparability, geography, revenue size and market capitalization, and product/service comparability.
Peer Group
| 1. | Industry Similarity | » | Publicly traded companies in the following life science industry groups: | | | | | | • | Health Care Equipment & Services (GICS: 3510) | | | | | • | Biotechnology & Life Sciences Tools and Services (GICS: 3520) | | 2. | Other Factors | » | Consideration of local life sciences companies, ISS peers, Glass Lewis peers, and “peers of peers” | | | 3. | Size Similarity | » | Revenue: $300M - $1.2B, approximating a 0.5x - 2.0x range around Azenta revenue | | | | | » | Market Capitalization: $1.0B - $9B approximating a 0.33x - 3.0x range around Azenta’s market capitalization | | | 4. | Business Profile Similarity | » | Companies with primary areas of focus in the development, manufacturing and distribution of Life Sciences products and services, with emphasis on genomic services and analytics, sample repository, and consumables and instruments | |
Peer Group
For fiscal year 2024, Azenta continued with substantially the same Life Sciences industry peer group as in fiscal year 2023.
Peer Group
| * Revenue trailing twelve months as of March 31, 2023. Market capitalization is trailing twelve months as of June 16, 2023 |
Peer Group
The following chart contains a list of the companies in our fiscal 2023 and 2024 peer groups. There was one change to the peer group in fiscal year 2024. Abiomed was acquired by Johnson and Johnson in December 2022 and was replaced in the fiscal year 2024 peer group with Myriad Genetics, Inc.
Peer Group
| Fiscal 2023 Group | Fiscal 2024 Peer Group | | 10x Genomics, Inc | 10x Genomics, Inc | | Abiomed | Bio-Techne Corporation | | Bio-Techne Corporation | Certara, Inc. | | Certara, Inc. | Cryoport, Inc. | | Cryoport, Inc. | Guardant Health, Inc. | | Guardant Health, Inc. | Haemonetics Corporation | | Haemonetics Corporation | Maravai LifeSciences Holdings Inc. | | Maravai LifeSciences Holdings Inc. | Medpace Holdings, Inc.. | | Medpace Holdings, Inc.. | Myriad Genetics, Inc. | | Nadera, Inc. | Nadera, Inc. | | NeoGenomics, Inc. | NeoGenomics, Inc. | | Repligen Corporation | Repligen Corporation | | Sotera Health Company | Sotera Health Company | | Tandem Diabetes Care, Inc. | Tandem Diabetes Care, Inc. | | Twist Bioscience Corporation | Twist Bioscience Corporation |
FISCAL YEAR END BASE PAY
| (3) Mr. Joseph, Dr. Zhou and Mr. Wang received salary adjustments in recognition of their contributions and to maintain their market competitive positioning. Base salary adjustments were as of January 1, 2024. |
Annual Cash Incentive for Fiscal 2024 – Performance-Based Variable Compensation (PBVC)
Annual Cash Incentive for Fiscal 2024 – Performance-Based Variable Compensation (PBVC) Each year the HRC Committee, with management, reviews the Annual Operating Plan, or AOP, to determine the critical financial metrics and goals they believe will drive stockholder value when achieved. For fiscal 2024, the HRC Committee chose financial metrics that were once again consistent with our strategic focus. The HRC Committee chose to retain the Revenue (55% weight), and Adjusted EPS (35% weight) metrics for the PBVC as they continue to align with our strategy of accelerating profitable growth as a life sciences company. We also developed new goals for our Environmental, Social and Governance (ESG) scorecard (10% weight). In reviewing the metrics and goals, the HRC Committee was guided by the following:
Annual Cash Incentive for Fiscal 2024 – Performance-Based Variable Compensation (PBVC)
| • | Aligning the shorter-term financial objectives of our annual PBVC incentives and the longer-term strategic objectives of our LTIP |
Annual Cash Incentive for Fiscal 2024 – Performance-Based Variable Compensation (PBVC)
| • | Establishing financial goals that are aggressive but achievable, that show significant growth over prior years’ targets and results and that account for significant acquisitions and divestitures |
Annual Cash Incentive for Fiscal 2024 – Performance-Based Variable Compensation (PBVC)
| • | Maintaining a strong linkage between incentive plan metrics and our strategic plan and business model |
Annual Cash Incentive for Fiscal 2024 – Performance-Based Variable Compensation (PBVC)
| • | Defining appropriate ranges of financial long-term performance to equitably reward performance below and above our aggressive targets for our business during fiscal 2024 |
Annual Cash Incentive for Fiscal 2024 – Performance-Based Variable Compensation (PBVC)
The HRC Committee met over several sessions and engaged our compensation consultant to review our (and our peer group’s) historical achievement levels on the proposed metrics to ensure appropriate rigor in setting these goals. Based on its independent assessment, Pearl Meyer concluded that the fiscal 2024 incentive compensation performance goals were of appropriate rigor reflecting:
Annual Cash Incentive for Fiscal 2024 – Performance-Based Variable Compensation (PBVC)
| • | A goal-setting process incorporating marketplace best practices, including meaningful year-over-year growth from actual results, appropriately structured performance ranges with additional ESG goals and corresponding reasonable payout levels |
Annual Cash Incentive for Fiscal 2024 – Performance-Based Variable Compensation (PBVC)
| • | Alignment with investor expectations and performance ranges that are generally consistent with peer design with highly robust stretch goal targets |
Annual Cash Incentive for Fiscal 2024 – Performance-Based Variable Compensation (PBVC)
| • | PBVC goals based on meaningful organic growth for continuing business operations |
Annual Cash Incentive for Fiscal 2024 – Performance-Based Variable Compensation (PBVC)
| • | Historical payouts that have fluctuated demonstrating a history of sufficiently challenging goals |
Fiscal 2024 PBVC Financial Performance Goals
Fiscal 2024 PBVC Financial Performance Goals The goals for the fiscal 2024 PBVC were determined by referencing financial targets in our AOP, which anticipated profitable growth, and excluded consideration of any acquisition activity that occurred during the 2024 fiscal year. Annual Revenue
Fiscal 2024 PBVC Financial Performance Goals
| • | Aggressive revenue goal set exceeding fiscal 2023 actual results by 12% |
Fiscal 2024 PBVC Financial Performance Goals
| • | Goal achievement dependent upon: continued growth performance and execution across all businesses |
Fiscal 2024 PBVC Financial Performance Goals
| • | Weighted at 55% of Target |
Fiscal 2024 PBVC Financial Performance Goals
| • | Actual results fell below threshold resulting in 0% of target achievement for fiscal year 2024 |
Fiscal 2024 PBVC Financial Performance Goals
Adjusted EPS:
Fiscal 2024 PBVC Financial Performance Goals
| • | Aggressive Adjusted EPS goal set exceeding fiscal year 2023 actual results, measuring our performance in delivering profitable growth using a metric that is understood by our stockholders |
Fiscal 2024 PBVC Financial Performance Goals
| • | Weighted at 35% of Target |
Fiscal 2024 PBVC Financial Performance Goals
| • | Adjusted EPS exceeded target by 3% resulting in a weighted goal award achievement of 37.5% |
Fiscal 2024 PBVC Financial Performance Goals
ESG Scorecard:
Fiscal 2024 PBVC Financial Performance Goals
| • | The scorecard focused on the quality of employment and environmental responsibility, including production safety, ongoing emissions and environmental sustainability efforts, employee engagement, and inclusive culture |
Fiscal 2024 PBVC Financial Performance Goals
| • | Weighted at 10% of Target |
Fiscal 2024 PBVC Financial Performance Goals
| • | The HRC Committee determined that the Company fully achieved the scorecard goals |
Fiscal 2024 Corporate PBVC Results
| | TARGETS | | | | | ACHIEVEMENT | | | | | | | | | Year End Result | | | Corporate Metrics(1) | Metric Weighting | Threshold 25% | Target 100% | Max 200%(2) | Full Year Actual(1) | Award Percent | Weighted % of Target Award | | Annual Revenue | 55% | $668M | $742M | $816M | $656M | 0.0% | 0.0% | | Adjusted EPS | 35% | $0.27 | $0.34 | $0.41 | $0.35 | 107.1% | 37.5% | | ESG Scorecard | 10% | | | | 100.0% | 100.0% | 10.0% | | Corporate Financial Metrics | 100% | | | | | | 47.5% |
Fiscal 2024 Corporate PBVC Results
| (2) The maximum payout for Non-CEO NEOs is capped at 150% of target. |
Fiscal 2024 Corporate PBVC Results
| Name | Target Opportunity as % of FY Base Pay | Cash Payout | Payment as a % of Target | | John Marotta(1) | — | — | — | | Stephen S. Schwartz(2) | 110% | $407,659 | 47.5% | | Herman Cueto | 80% | $186,200 | 47.5% | | Lindon G. Robertson(3) | 100% | $201,923 | 100.0% | | Jason W. Joseph | 65% | $140,363 | 47.5% | | Ginger Zhou | 60% | $123,383 | 53.2% | | David Wang | 60% | $115,498 | 49.8% |
Fiscal 2024 Corporate PBVC Results
| (2) Dr. Schwartz terminated on September 9, 2024 but received his full FY24 PBVC payout as part of his transition agreement. |
Fiscal 2024 Corporate PBVC Results
| (3) Mr. Roberston retired on February 16, 2024 and received a pro-rated FY24 PBVC payout at target as part of his transition agreement. |
Long-Term Incentives
Long-Term Incentives We regularly review the design of our equity incentive plan to ensure it remains calibrated to our long-term strategic goals while providing the appropriate balance of challenge and motivation. The HRC Committee engaged Pearl Meyer to assist with the review and enlisted the support of the Company’s Human Resources department. The objectives and process of the review were as follows:
Long-Term Incentives
| • | Diligence exercise to assist the HRC Committee and management in defining the strongest incentive plan metrics that drive stockholder value; |
Long-Term Incentives
| • | Internal Review: Subjective analysis and discussion on current metrics linkage and alignment to specific strategic criteria |
Long-Term Incentives
| • | External Review: Benchmarking of our incentive plan metrics alignment to our compensation peer group and review of achievement results and payouts over several years; and |
Long-Term Incentives
| • | Determination of incentive metrics and design for upcoming LTIP awards, which in fiscal 2024 included consideration of the metrics used in the short term PBVC. |
Long-Term Incentives
The HRC Committee presented the conclusions from the review to the full Board. In summary, the review reinforced our belief that our plan designs as well as metrics and goals were appropriately aligned with prevailing peer practices. The HRC Committee and the Board also concluded that the metrics and incentive plan designs were closely tied to our business strategy for both the short and long term and have served the stockholders well in delivering value. Each of our named executive officers received award grants of both time-based and performance-based RSUs in fiscal 2024. We used performance-based RSUs for the majority (75%) of our equity grants and measure performance at the end of each three-year LTIP period. Similar to our annual PBVC, the HRC Committee was consistent with prior years in the selection of metrics for the LTIP that are in support of our long-term strategy. The financial metrics for the fiscal 2022 and 2023 LTIPs are comprised of cumulative Adjusted EBITDA, cumulative Free Cash Flow, and three-year average ROIC, each equally weighted. The financial metrics for fiscal 2024 comprised of cumulative Adjusted EBITDA and cumulative Free Cash Flow, each equally weighted. ROIC was removed allowing stronger emphasis on the remaining two metrics. We have selected these metrics for the 2022, 2023 and 2024 LTIPs because they measure effective capital deployment in internal organic investments and acquisitions with accretive returns, specifically:
Long-Term Incentives
| • | Adjusted EBITDA is a key performance indicator that motivates, and rewards sustained growth in profit, and demands a longer-term management focus on business operations and profitability; |
Long-Term Incentives
| • | Free Cash Flow provides funding for growth initiatives, focused on new product development and acquisitions, and is a key indicator of overall company performance with a strong management line of sight; and |
Long-Term Incentives
| • | ROIC is a key financial metric, as it focuses executives on a forward looking, disciplined approach to capital investment in optimizing stockholder return. |
Grant Process
Grant Process The value of each year’s LTIP equity grant for the CEO and our other named executive officers is based on a variety of factors including market and peer group data as provided by Pearl Meyer, the ability of the executive to impact long-term stockholder value, the executive’s prior contributions and performance and the currently outstanding equity grants held by the executive. For our CEO, this translates into a projected equity value to target cash compensation ratio generally ranging from 3.0 to 4.0 and for our other executive officers, a range between 1.0 and 1.6 of total cash compensation. A combination of performance and time-based RSUs are used as part of our LTIP. Performance-based RSUs are intended to focus and align management leadership on increasing share value and profitable growth, while time-based RSUs help promote retention of key leadership talent. For fiscal 2024 grants approved in November 2023, the HRC Committee increased Dr. Schwartz’s grant value to recognize his critical role in the execution of the Company’s life sciences strategy and to position him more competitively within the life sciences peer market. Increases at that time to the remaining four named executives were made for similar reasons. In light of Dr. Schwartz’s retirement announcement, retention grants, of time-based RSUs were issued to key executives on August 9, 2024 to provide financial assurance, maintain investor confidence, and promote stability and continuity in the Company's operations. These retention awards provide for vesting over two years, 50% on the first anniversary of the grant date and 50% on the second anniversary of the grant date, with accelerated vesting in the event of a termination of employment without cause. These were one-time awards not representative of the Company’s executive compensation practices. The following table shows grant date values for the fiscal 2022, 2023 and 2024 LTIPs.
LTIP Grant Date Value
LTIP Grant Date Value
(In thousands)
| (1) Mr. Marotta received a pro-rated FY24 LTIP as part of his new hire package. |
(In thousands)
| (2) Mr. Cueto received a $500,000 RSU sign-on grant in addition to the FY24 LTIP of $1,250,000. |
(In thousands)
| (3) Retention grants of time-based RSUs were awarded to the executive officers in light of Dr. Schwartz’s retirement announcement. |
Equity Plan Analysis
Equity Plan Analysis The most recent Pearl Meyer executive pay analysis, completed in September 2024, noted that our dilution (total number of shares outstanding under the equity incentive plans as a percentage of the most recent fiscal year’s common shares outstanding) at 1.6% was below the 25th percentile of our 2024 compensation peer group. Our share burn rate, which is the sum of options and full-value shares granted divided by weighted average shares outstanding (where all options and full-value shares are counted equally) was an average of 0.8% over three years as shown in the chart below. These figures are below the 25th percentile of our peer group. We believe that this judicious use of equity awards affords the HRC Committee flexibility in providing incentives to executives to drive strategic initiatives.
Fiscal 2022-2024 LTIP, Fiscal Year 2023-2025 LTIP and Fiscal Year 2024-2026 LTIP
Fiscal 2022-2024 LTIP, Fiscal Year 2023-2025 LTIP and Fiscal Year 2024-2026 LTIP In fiscal year 2022, Free Cash Flow and ROIC continued to be used as metrics for the PSUs. Adjusted Operating Profit was replaced with Adjusted EBITDA as it was deemed an appropriate metric for assessing long-term profitable growth. The fiscal 2022-2024 three-year LTIP metrics approved in November 2021, are cumulative Adjusted EBITDA, cumulative Free Cash Flow, and a three-year average of our ROIC, all equally weighted. The Committee adopted the same metrics with updated goals the following year for fiscal 2023. In fiscal year 2024, Free Cash Flow and Adjusted EBITDA were again used as metrics for the PSU. However, ROIC was removed as a metric to heighten the focus on the remaining two metrics. Each quarter at their regularly scheduled meetings, the HRC Committee and full Board review the Company’s financial results to date and forecast for the remaining fiscal year period against the goals for each plan. Results and goals are disclosed at the end of each three-year plan.
2022-2024 LTIP Financial Achievement (Completed on September 30, 2024)
2022-2024 LTIP Financial Achievement (Completed on September 30, 2024) Measurement of the three-year period results was completed as of September 30, 2024, resulting in all three financial metrics falling below threshold and 0% of target earned.
2022-2024 LTIP Financial Achievement (Completed on September 30, 2024)
| Strategic Objective(1) | Weighting | Measurement Time Frame | Metrics | Threshold 25% of Award | Target 100% of Award | Maximum 200%of Award | Results | Weighted % of Target Earned | | ROIC(2) | 33.3% | 3 Years | 3–year–average ROIC | 7.0% | 9.5% | 13.0% | Below Threshold | 0% | | Free Cash Flow(3) | 33.3% | 3 Years | Cumulative Free Cash Flow | $160M | $192M | $220M | Below Threshold | 0% | | Adjusted EBITDA(4) | 33.3% | 3 Years | Adjusted EBITDA | $450M | $575M | $725M | Below Threshold | 0% | | Total | 100.0% | | | | | | | 0% |
2022-2024 LTIP Financial Achievement (Completed on September 30, 2024)
| (1) Goals exclude the impact of any acquisitions and divestitures over the three year measurement period. |
2022-2024 LTIP Financial Achievement (Completed on September 30, 2024)
| (2) ROIC: GAAP income minus interest (after tax) as a percentage of average net assets, excluding cash and net deferred taxes. Each year’s average ROIC is equally weighted: (Y1 + Y2 + Y3)/3. |
2022-2024 LTIP Financial Achievement (Completed on September 30, 2024)
| (3) Free Cash Flow: Cumulative operating cash flow less capital expenditures. |
2022-2024 LTIP Financial Achievement (Completed on September 30, 2024)
| (4) Adjusted EBITDA: Non-GAAP earnings before interest, taxes, depreciation, and amortization. Net Income that adds back interest expenses, taxes, and depreciation charges, plus other adjustments. |
LTIP FINANCIAL METRICS FISCAL 2023-2025
LTIP FINANCIAL METRICS FISCAL 2023-2025
LTIP FINANCIAL METRICS FISCAL 2023-2025
| Strategic Objective(1) | Weighting | Measurement Time Frame | Metrics | Threshold 25% of Award | Target 100% of Award | Maximum 200% of Award | | ROIC(2) | 33.3% | 3 Years | 3–year–average ROIC | * | * | * | | Free Cash Flow(3) | 33.3% | 3 Years | Cumulative Free Cash Flow | * | * | * | | Adjusted EBITDA(4) | 33.3% | 3 Years | Adjusted EBITDA | * | * | * |
LTIP FINANCIAL METRICS FISCAL 2023-2025
| (1) Goals exclude the impact of any acquisitions and divestitures over the three year measurement period. |
LTIP FINANCIAL METRICS FISCAL 2023-2025
| (2) ROIC: GAAP income minus interest (after tax) as a percentage of average net assets, excluding cash and net deferred taxes. Each year’s average ROIC is equally weighted: (Y1 + Y2 + Y3)/3. |
LTIP FINANCIAL METRICS FISCAL 2023-2025
| (3) Free Cash Flow: Cumulative operating cash flow less capital expenditures. |
LTIP FINANCIAL METRICS FISCAL 2023-2025
| (4) Adjusted EBITDA: Non-GAAP earnings before interest, taxes, depreciation, and amortization. Net Income that adds back interest expenses, taxes, and depreciation charges, plus other adjustments. |
LTIP FINANCIAL METRICS FISCAL 2023-2025
| * We do not publicly disclose our goals during the performance periods due to the proprietary and competitive sensitivity of the information. We believe these goals to be consistent with our philosophy of establishing aggressive but achievable targets, and after two years’ and one year’s results, respectively, participants are motivated to achieve the targets for the LTIP. |
LTIP FINANCIAL METRICS FISCAL 2024-2026
LTIP FINANCIAL METRICS FISCAL 2024-2026
LTIP FINANCIAL METRICS FISCAL 2024-2026
| Strategic Objective(1) | Weighting | Measurement Time Frame | Metrics | Threshold 25% of Award | Target 100% of Award | Maximum 200% of Award | | Free Cash Flow(2) | 50% | 3 Years | Cumulative Free Cash Flow | * | * | * | | Adjusted EBITDA(3) | 50% | 3 Years | Adjusted EBITDA | * | * | * |
LTIP FINANCIAL METRICS FISCAL 2024-2026
| (1) Goals exclude the impact of any acquisitions and divestitures over the three-year measurement period. |
LTIP FINANCIAL METRICS FISCAL 2024-2026
| (2) Free Cash Flow: Cumulative operating cash flow less capital expenditures. |
LTIP FINANCIAL METRICS FISCAL 2024-2026
| (3) Adjusted EBITDA: Non-GAAP earnings before interest, taxes, depreciation, and amortization. Net Income that adds back interest expenses, taxes, and depreciation charges, plus other adjustments. |
LTIP FINANCIAL METRICS FISCAL 2024-2026
| * We do not publicly disclose our goals during the performance periods due to the proprietary and competitive sensitivity of the information. We believe these goals to be consistent with our philosophy of establishing aggressive but achievable targets, and after two years’ and one year’s results, respectively, participants are motivated to achieve the targets for the LTIP. |
Program Enhancements for Fiscal Year 2025
| • | Introduced a simplified short-term Incentive Compensation Plan (ICP) for all executives, with 60% tied to the company's financial performance and 40% linked to the performance of strategic initiatives. Financial metrics include Core Revenue Growth, Adjusted EBITDA, and Free Cash Flow. This plan replaced the PBVC. |
Program Enhancements for Fiscal Year 2025
| • | Eliminated the Environmental, Social and Governance (ESG) Scorecard as a metric in the short-term incentive plan as part of the transition to the simplified ICP, recognizing that relevant ESG-related metrics could form a part of an individual’s strategic initiatives where appropriate. |
Program Enhancements for Fiscal Year 2025
| • | Changed the PSU performance measures to be 100% tied to Relative Total Shareholder Return (rTSR). |
Program Enhancements for Fiscal Year 2025
| • | Shifted the LTIP mix to 50% PSUs and 50% time-based RSUs to better align with peers and market practice. |
John P. Marotta (CEO)
John P. Marotta (CEO) Mr. Marotta entered into an employment agreement with the Company on September 9, 2024 which stipulates the terms and conditions of his employment with the Company and his specified annual base salary, and the target variable compensation award based on performance. The agreement provides severance of one year’s base salary and continued participation in benefit plans if his employment is terminated by us without “cause” or if he resigns for “good reason.” He is also eligible to receive up to an additional 12 months’ severance and benefits if he remains unemployed following the initial twelve months of payment. More information can be found under the section “Compensation Tables for Named Executive Officers - Post-Employment Benefits” below.
Change-In-Control and Non-Compete Agreements
Change-In-Control and Non-Compete Agreements We currently have provisions within our equity award agreements that provide for accelerated vesting at target in the event of a double-trigger change in control (termination of employment without “cause” or resignation for “good reason” within a year following, or six months prior to, a change-in-control). In September 2024, Mr. Marotta received an employment agreement that includes double-trigger change in control provisions to provide severance of two times his annual salary plus target bonus and benefits arrangements. The arrangement with Mr. Marotta includes:
Change-In-Control and Non-Compete Agreements
| • | Cash severance, payable bi-weekly, equal to two times the amount of his current base salary and annual target bonus |
Change-In-Control and Non-Compete Agreements
| • | Annual target bonus pro-rated for the number of days employed by the Company during the fiscal year |
Change-In-Control and Non-Compete Agreements
| • | A lump sum payment to cover the approximate cost of the Company’s portion of premiums for coverage under their welfare benefit plans for two years following termination |
Change-In-Control and Non-Compete Agreements
As described above, Mr. Lin’s employment agreement also provides for different payments and equity vesting in the case of termination of employment without “cause” or for “good reason” unrelated to a change of control and within one year following a change of control.
Tax Deductibility
Tax Deductibility Section 162(m) of the Internal Revenue Code of 1986, as amended by the Tax Cuts and Jobs Act, restricts deductibility for federal income tax purposes of annual individual compensation in excess of $1 million to our named executive officers, effective for tax years beginning after 2017, subject to a transition rule for written binding contracts which were in effect on November 2, 2017, and which were not modified in any material respect on or after such date. In the past, Section 162(m)’s deductibility limitation was subject to an exception for compensation that qualified as performance-based. Certain components of our compensation program were designed to permit us to qualify for the performance-based exception, although the Company reserved the right to pay compensation that did not qualify as “performance-based.” While the HRC Committee has considered the deductibility of compensation as a factor in making compensation decisions, it has retained the flexibility to provide compensation that is consistent with the Company’s goals for its executive compensation program, even if such compensation would not be fully tax-deductible. Section 280G and related sections of the Internal Revenue Code provide that executive officers and directors who hold significant stockholder interests and certain other service providers could be subject to significant additional taxes if they receive payments or benefits that exceed certain limits in connection with a change in control event, and that we could lose a deduction on the amounts subject to the additional tax. We have not provided any executive officer, including Mr. Marotta, with a commitment to gross up or reimburse other tax amounts that the executive might pay pursuant to Section 280G of the Internal Revenue Code. In January 2010, the Board voted that it would not make any gross-up or tax reimbursement commitments to any executives. Section 409A of the Internal Revenue Code also imposes additional significant taxes on an executive officer, director or service provider who receives “deferred compensation” that does not meet the requirements of Section 409A. To assist in the avoidance of additional tax under Section 409A, we intend to structure equity awards and other deferred compensation payments in a manner to comply with the applicable Section 409A requirements.
Summary Compensation Table
Summary Compensation Table The following table sets forth certain information concerning compensation of each named executive officer during the fiscal years indicated below:
Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary | Bonus | Stock Awards(1) | Non-Equity Incentive Plan Compensation(2) | All Other Compensation(3) | Total | | John Marotta | 2024 | $34,615 | | $604,196 | | | $638,811 | | President and Chief Executive Officer | 2023 | | | | | | | | | 2022 | | | | | | | | Stephen S. Schwartz | 2024 | $755,366 | | $4,900,004 | $407,659 | $61,390 | $6,124,419 | | Former President and Chief Executive Officer(5) | 2023 | $750,000 | | $4,500,037 | $289,575 | $14,850 | $5,554,462 | | | 2022 | $742,308 | | $3,500,031 | $412,314 | $13,725 | $4,668,377 | | Herman Cueto | 2024 | 490,000 | $500,000(4) | $2,375,108 | $186,200 | $14,700 | $3,566,008 | | Former Executive Vice President & Chief Financial Officer(6) | 2023 | | | | | | | | | 2022 | | | | | | | | Lindon G. Robertson | 2024 | $212,019 | | $0 | $201,923 | $13,176 | $427,118 | | Former Executive Vice President and Chief Financial Officer(7) | 2023 | $525,000 | | $1,500,032 | $184,275 | $14,850 | $2,224,157 | | | 2022 | $525,000 | $200,000(4) | $1,300,041 | $264,758 | $13,725 | $2,303,523 | | Jason W. Joseph | 2024 | $454,615 | | $1,800,060 | $140,363 | $13,105 | $2,408,144 | | Senior Vice President, General Counsel/Corporate Secretary | 2023 | $431,923 | | $900,043 | $98,543 | $13,661 | $1,444,170 | | | 2022 | $403,846 | $100,000(4) | $750,072 | $132,631 | $15,268 | $1,401,817 | | Ginger Zhou | 2024 | $386,539 | | $1,050,049 | $123,383 | $13,964 | $1,573,935 | | Senior Vice President & GM Multiomics | 2023 | $323,077 | | $450,051 | $70,875 | $5,015 | $849,019 | | | 2022 | $299,231 | | $200,103 | $69,804 | $6,734 | $575,872 | | David Wang | 2024 | $386,539 | | $1,050,049 | $115,498 | $17,239 | $1,569.324 | | Senior Vice President & GM Sample Management Solutions | 2023 | $265,885 | | $320,859 | $49,025 | $10,765 | $646,534 |
Summary Compensation Table
| (1) Awards consist of restricted stock unit (RSU) awards. In November 2023, the Company issued both time-based and performance-based RSUs under our Fiscal Year 2024 - 2026 Long-Term Incentive Plan to each of the named executive officers. The value of the awards is based on the fair value as of the grant date calculated in accordance with FASB ASC Topic 718. The grant date fair value of the performance-based RSUs assuming the maximum potential value is achieved is $906,294 for Mr. Marotta; $7,350,033 for Dr. Schwartz; $1,875,025 for Mr. Cueto; $1,800,046 for Mr. Joseph and $1,050,036 for Dr Zhou and Mr. Wang. In addition to the fiscal year 2024 award, Mr. Cueto received $500,000 in time-based RSUs as part of his new hire offer package. Messrs., Cueto, Joseph and Wang and Dr. Zhou each received a retention grant of time-based RSUs in light of Dr. Schwartz’s retirement announcement. |
Summary Compensation Table
| (2) Amounts consist of cash incentive compensation awards earned for services rendered in the relevant fiscal year under the Company’s Performance-Based Variable Compensation Plan. Mr. Robertson received a pro-rated target bonus as part of his separation agreement. |
Summary Compensation Table
| (3) Represents amounts paid or accrued by the Company in matching contributions under the Company’s qualified 401(k) plan on behalf of Dr. Zhou, and Messrs. Cueto ,Robertson, Joseph, and Wang and includes $15,525 paid or accrued by the Company in matching contributions under the Company’s qualified 401(k) plan on behalf of Dr. Schwartz and $45,865 in consulting fees paid to Dr. Schwartz after his transition to a consultant role on September 9, 2024. |
Summary Compensation Table
| (4) Represents special one-time cash payments to Mr. Robertson and Mr. Joseph, paid upon the successful completion of the sale of our semiconductor automation business to Thomas H Lee Partners, L.P., in recognition of their significant contributions to the sale, and a sign-on bonus paid to Mr. Cueto as part of his new hire offer package. |
Summary Compensation Table
| (5) On May 8, 2024, the Company announced that Dr. Schwartz was retiring as Chief Executive Officer but would continue in the position the earlier of the commencement of his successor or December 31, 2024. On September 9, 2024, his successor, Mr. Marotta, began employment and Dr. Schwartz transitioned to a consultant role as Advisor to the Company. Dr. Schwartz will continue in this role through November 30, 2025 to ensure a smooth transition for Mr. Marotta. |
Summary Compensation Table
| (6) Mr. Cueto was employed by the Company as Executive Vice President and Chief Financial Officer until November 27, 2024, and his employment was terminated not for “cause” on December 1, 2024. |
Summary Compensation Table
| (7) In September 2023, the Company announced that Mr. Robertson was retiring as our Chief Financial Officer but would remain as an advisor to ensure a smooth transition to our new Chief Financial Officer, Herman Cueto. In December 2023, the Company entered into a letter agreement with Mr. Robertson pursuant to which we agreed he would remain in the position of Advisor to the CEO through February 16, 2024, at which time his employment with us ceased. Mr. Robertson received $111,057 in connection with this advisory role in fiscal year 2024, which is included under Salary for that fiscal year. |
Grants of Plan-Based Awards Table
Grants of Plan-Based Awards Table
Outstanding Equity Awards at Fiscal Year End Table
Outstanding Equity Awards at Fiscal Year End Table
Stock Vested Table
Stock Vested Table
Nonqualified Deferred Compensation Table
Nonqualified Deferred Compensation Table
Pension Benefits
Pension Benefits We do not have any qualified or nonqualified defined benefit plans, other than certain plans for international employees. No named executive officer participates in any of those plans.
Post-Employment Benefits
| Name(1) | Event | Salary & Other Cash Payment | Health & Welfare Contribution | Vesting of Stock Awards | Total | | John Marotta | Termination Without Cause or for Good Reason | $900,000(2) | $19,492 | | $919,492 | | | Change of Control with Termination | $3,780,000(3) | $38,984 | $634,176(4) | $4,453,160 | | Jason W. Joseph | Termination Without Cause or for Good Reason | | | $525,865(5) | $525,865 | | | Change of Control with Termination | | | $2,526,582(4) | $2,526,582 | | Ginger Zhou | Termination Without Cause or for Good Reason | | | $306,771(5) | $306,771 | | | Change of Control with Termination | | | $1,334,183(4) | $1,334,183 | | David Wang | Termination Without Cause or for Good Reason | | | $306,771(5) | $306,771 | | | Change of Control with Termination | | | $1,178,545(4) | $1,178,545 |
CEO PAY RATIO
CEO PAY RATIO Under rules adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, the Company is required to disclose the median of the annual total compensation of our employees (excluding our principal executive officer), the annual total compensation of our Principal Executive Officer (PEO), and the ratio of these two amounts. Given that we had two PEOs in fiscal year 2024, the PEO total compensation used for this ratio is the combined compensation of the current and former PEO. The Company’s pay ratio may not be comparable to the pay ratios of other companies given varying workforce composition and pay practices, as well as the flexibility permitted in identifying the median employee. The Company determined that the 2024 annual total compensation of our median employee as of September 30, 2024 was $56,095 and Mr. Marotta’s and Dr. Schwartz’s combined annual total compensation for 2024 was $6,763,201, both of which were calculated in accordance with Item 402(c) of Regulation S-K. The ratio of these amounts was 120.6:1. The Company selected September 30, 2024, the last day of our most recently completed fiscal year, as the effective date used to identify the median employee. As of this date the Company employed approximately 3,200 employees globally. The Company did not elect to make any exclusions as permitted under the SEC’s de minimis rule. The Company used a Consistently Applied Compensation Measure to identify the median employee based on the sum of base pay/regular wages, overtime and target bonus. The Company elected to include bonus payments given the broad participation rates in this component of our compensation program across our employee base. Annualized salary rates for full-time employees and hourly pay rates and scheduled hours worked were used as reasonable estimates of salary/wages. As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K we are providing the following information about the relationship between executive Compensation Actually Paid (“CAP”) for our Chief Executive Officer, also referred to as our principal executive officer (“PEO”), and our other Named Executive Officers (“NEOs”) and certain financial performance metrics of the Company for the fiscal years listed below. The Human Resources and Compensation (HRC) Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the fiscal years shown. For further information on the Company’s pay for performance philosophy and how the Company aligns executive compensation with the Company’s performance, please refer to “Compensation Discussion and Analysis.”
CEO PAY RATIO
| | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | | Fiscal Year | SCT Total for Former PEO(1) | CAP total for Former PEO(2) | SCT Total for PEO(3) | CAP total for PEO(4) | Average SCT Total for Non- PEO NEOs(5) | Average CAP to Non-PEO NEOs(6) | Azenta TSR(7) | Company Peer Group(8) | GAAP Net Income (in millions)(9) | Revenue (in millions)(10) | | 2024 | $6,124,419 | $1,732,864 | $638,811 | $668,792 | $1,908,906 | $1,745,367 | $105 | $132 | -$164.2 | $656.0 | | 2023 | $5,554,462 | $5,753,017 | | | $1,587,464 | $1,664,874 | $109 | $109 | -$12.9 | $665.0 | | 2022 | $4,668,377 | -$8,289,063 | | | $2,357,741 | -$184,501 | $93 | $110 | -$11.3 | $552.0 | | 2021* | $5,290,656 | $21,015,659 | | | $1,897,530 | $6,261,160 | $222 | $143 | $111.9 | $1,178 |
CEO PAY RATIO
| * Financials for fiscal year 2021 are based on a combined Life Sciences and Semi-conductor equipment company and are pre-separation of the businesses and the closing of the sale of the semiconductor automation business on February 1, 2022. |
CEO PAY RATIO
| (1) Amounts shown are the amounts of total compensation reported for Dr. Schwartz, our former CEO, for each corresponding fiscal year in the Total column of the Summary Compensation Table (SCT). |
CEO PAY RATIO
| (2) Amounts represent the amount of CAP to Dr. Schwartz, as calculated in accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Dr. Schwartz’s total compensation for each fiscal year to determine the CAP: |
CEO PAY RATIO
| Fiscal Year | Reported SCT Total for Former PEO | Reported Value of Equity Awards Granted in the Year(a) | Equity Awards Adjustments(b) | Compensation Actual Paid to Former PEO | | 2024 | $6,124,419 | $4,900,004 | $508,449 | $1,732,864 | | 2023 | $5,554,462 | $4,500,037 | $4,698,592 | $5,753,017 | | 2022 | $4,668,377 | $3,500,031 | -$9,457,409 | -$8,289,063 | | 2021 | $5,290,656 | $3,000,067 | $18,725,070 | $21,015,659 |
CEO PAY RATIO
| (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” column of the SCT for the corresponding fiscal year. |
CEO PAY RATIO
| (b) The equity award adjustments are calculated in accordance with the SEC rules as shown in the table below. |
CEO PAY RATIO
| Fiscal Year | Year-End Fair Value of Outstanding and Unvested Equity Awards Granted in the Year | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Total Equity Award Adjustments | | 2024 | $724,856 | -$165,793 | -$50,614 | $508,449 | | 2023 | $3,791,453 | $473,115 | $434,024 | $4,698,592 | | 2022 | $1,311,173 | -$5,025,180 | -$5,743,403 | -$9,457,409 | | 2021 | $7,845,742 | $7,286,596 | $3,592,733 | $18,725,070 |
CEO PAY RATIO
| (3) Amounts shown are the amounts of total compensation reported for Mr. Marotta, our CEO, for each corresponding fiscal year in the Total column of the Summary Compensation Table (SCT). |
CEO PAY RATIO
| (4) Amounts represent the amount of CAP to Mr. Marotta, as calculated in accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Marotta’s total compensation for each fiscal year to determine the CAP: |
CEO PAY RATIO
| Fiscal Year | Reported SCT Total for PEO | Reported Value of Equity Awards Granted in the Year(a) | Equity Awards Adjustments(b) | Compensation Actual Paid to PEO | | 2024 | $638,811 | $604,196 | $634,176 | $668,792 |
CEO PAY RATIO
| (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” column of the SCT for the corresponding fiscal year. |
CEO PAY RATIO
| (b) The equity award adjustments are calculated in accordance with the SEC rules as shown in the table below. |
CEO PAY RATIO
| Fiscal Year | Year-End Fair Value of Outstanding and Unvested Equity Awards Granted in the Year | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Total Equity Award Adjustments | | 2024 | $634,176 | $0 | $0 | $634,176 |
CEO PAY RATIO
| (5) Amounts reported in this column represent the average of the amounts reported in for the Company’s NEOs, excluding Dr. Schwartz and Mr. Marotta. Messrs. Cueto, Joseph, Robertson and Wang and Dr. Zhou are the Non-PEO NEOs in fiscal year 2024. Messrs. Robertson, Joseph and Vacha and Dr. Gray are the Non-PEO NEOs in fiscal year 2023. Messrs. Robertson and Joseph, Dr. McManus and Ms. Sriram are the Non-PEO NEOs in fiscal year 2022. Messrs. Robertson, Jarzynka and Vacha, and Dr. Liao are the Non-PEO NEOs in fiscal year 2021. |
CEO PAY RATIO
| (6) The amounts reported in this column represent the average amount of CAP to the Non-PEO NEOs (excluding Dr. Schwartz and Mr. Marotta), as computed in accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the average total compensation for each fiscal year to determine the CAP: |
CEO PAY RATIO
| Fiscal Year | Average Reported SCT Total for Non- PEO NEOs | Average Reported Value of Equity Awards Granted in the Year(a) | Average Equity Award Adjustments(b) | Average Compensation Actual Paid to Non-PEO NEOs | | 2024 | $1,908,906 | $1,255,053 | $1,091,514 | $1,745,367 | | 2023 | $1,587,464 | $1,012,541 | $1,089,951 | $1,664,874 | | 2022 | $2,357,741 | $1,483,811 | -$1,058,430 | -$184,501 | | 2021 | $1,897,530 | $900,027 | $5,263,658 | $6,261,160 |
CEO PAY RATIO
| (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” column of the SCT for the corresponding fiscal year. Mr. Robertson is included in the averages for fiscal year 2024 and he did not receive an equity award in fiscal year 2024. |
CEO PAY RATIO
| (b) The equity award adjustments are calculated in accordance with the SEC rules as shown in the table below. Mr. Robertson is included in the averages for fiscal year 2024 and he did not receive an equity award in fiscal year 2024 and he did not own any unvested equity awards at the end of fiscal year 2024. |
CEO PAY RATIO
| Fiscal Year | Average Year- End Fair Value of Outstanding and Unvested Equity Awards Granted in the Year | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Total Average Equity Award Adjustments | | 2024 | $1,109,741 | -$11,502 | -$6,725 | $1,091,514 | | 2023 | $853,105 | $119,954 | $116,893 | $1,089,951 |
CEO PAY RATIO
| Fiscal Year | Average Year- End Fair Value of Outstanding and Unvested Equity Awards Granted in the Year | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Total Average Equity Award Adjustments | | 2022 | $687,646 | -$785,402 | -$960,674 | -$1,058,430 | | 2021 | $1,877,406 | $2,382,731 | $1,003,520 | $5,263,658 |
CEO PAY RATIO
| (7) Cumulative TSR is calculated by dividing the sum of the cumulative difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
CEO PAY RATIO
| (8) The peer group for TSR is the S&P 1500 Life Sciences Tools & Services Industry Index, as used in the Company’s performance graph under Item 201 of Regulation S-K included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024. The comparison assumes $100 was invested for the period starting September 30, 2020, through the end of the listed fiscal year for the Company and the peer group. For fiscal year 2024, we have decided to use the S&P 1500 Life Sciences Tools & Services Industry Index in our performance graph under Item 201 of Regulation S-K as opposed to that of the peer group used for the fiscal year ended September 30, 2023 to align our “Comparative Stock Performance” disclosures with that of the same line-of-business index to which we compare our executive performance in this table. Azenta’s peer group used in the Company’s performance graph under Item 201 of Regulation S-K included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023 consisted of the following companies: Angiodynamics Inc, Caredx Inc, Certara Inc, Haemonetics Corp, Icu Medical Inc, Integra Lifesciences Holdings Corp, Maravai Lifesciences Holdings Inc, Medpace Holdings Inc, Neogenomics Inc, Orasure Technologies Inc, Repligen Corp, Sotera Health Co, and Varex Imaging Corp. The value of the initial $100 invested based on this peer group would have been $85 for 2024 in comparison to $132 for the S&P 1500 Life Sciences Tools & Services Industry Index. |
CEO PAY RATIO
| (9) The amount shown is the net income reflected in the Company’s consolidated audited financial statements for the applicable fiscal year. |
CEO PAY RATIO
| (10) Revenue from continued operations for the applicable fiscal year. Revenue for 2021 is based on a combined Life Sciences and Semi-conductor equipment company and are pre-separation of the businesses and the closing of the sale of the semiconductor automation business on February 1, 2022. |
Compensation Actually Paid (CAP) and Cumulative Total Shareholder Return (TSR)
Compensation Actually Paid (CAP) and Cumulative Total Shareholder Return (TSR) Below is a table that compares the CAP for the former PEO, PEO and Non-PEO NEOs for the past four fiscal years (FY2021, FY2022, FY2023 and FY2024) against the cumulative four year TSR performance for Azenta from October 1, 2020 – September 30, 2024, for Azenta’s financial peer group, the S&P 1500 Life Sciences Tools & Services Industry Index, and the peer group used for the fiscal year ended September 30, 2023.
Compensation Actually Paid (CAP) and GAAP Net Income
Compensation Actually Paid (CAP) and GAAP Net Income Below is a table that compares the CAP for the former PEO, PEO and Non-PEO NEOs for the past four fiscal years (FY2021, FY2022, FY2023 and FY2024) against GAAP Net Income performance for the related fiscal year.
Compensation Actually Paid (CAP) and GAAP Net Income
| * Net Income for 2021 is based on a combined Life Sciences and Semi-conductor equipment company and are pre-separation of the businesses and the closing of the sale of the semiconductor automation business on February 1, 2022. |
Compensation Actually Paid (CAP) and Revenue
Compensation Actually Paid (CAP) and Revenue Below is a table that compares the CAP for the former PEO, PEO and Non-PEO NEOs for the past four fiscal years (FY2021, FY2022, FY2023 and FY2024) against Annual Revenue performance for the related fiscal year.
Compensation Actually Paid (CAP) and Revenue
| * Revenue for 2021 is based on a combined Life Sciences and Semi-conductor equipment company and are pre-separation of the businesses and the closing of the sale of the semiconductor automation business on February 1, 2022. |
Compensation Actually Paid (CAP) and Revenue
EQUITY COMPENSATION PLAN INFORMATION
Proposal No. 1: Election of Directors for a One-Year Term
Proposal No. 1: Election of Directors for a One-Year Term For the election of directors, you may either vote “for” a director or “withhold” your vote for such director. An affirmative vote of a plurality of votes properly cast, virtually at the Annual Meeting or by proxy, is required for the election of each of the nominees. Votes that are withheld will not be included in the vote tally for the election of the directors. Broker non-votes will have no effect on the voting outcome with respect to the election of directors.