DEF 14A of Solaredge Technologies, Inc.
Filed Apr 26, 2024 · FY20230001178913-24-001454
E-Delivery
| Compensation Risk | 53 | | Summary Compensation Table | 53 | | 2023 Grants of Plan-Based Awards | 55 | | Executive Compensation Table Narrative | 56 | | Outstanding Equity Awards at December 31, 2023 | 57 | | Option Exercises and Stock Vested Table | 59 | | Potential Payments and Acceleration of Equity upon Termination or Termination in Connection with a Change in Control | 59 | | Potential Payments as of December 31, 2023 | 60 | | 2023 CEO Pay Ratio | 61 | | 2023 Pay Versus Performance Disclosure | 62 | | Description of Certain Relationships of Information Presented in the Pay Versus Performance Table | 63 | | Company vs Peer Group TSR and Compensation Actually Paid | 63 | | Compensation Actually Paid vs Net Income | 64 | | Compensation Actually Paid vs Revenue | 65 | | Financial Performance Measures | 65 | | Transactions with Related Persons | 66 | | Review, Approval, or Ratification of Transactions with Related Persons | 66 | | Fiscal Year 2023 Transactions with Related Persons | 66 | | Report Of the Audit Committee | 67 | | The Meeting | 68 | | Voting Rights, Quorum and Required Vote | 68 | | Notice of Internet Availability of Proxy Materials | 69 | | Voting Your Shares | 69 | | Expenses of Solicitation | 70 | | Revocability of Proxies | 70 | | Delivery of Documents to Stockholders Sharing an Address | 71 | | DELINQUENT SECTION 16(a) REPORTS | 71 | | Stockholder Proposals for the 2025 Annual Meeting | 72 | | Directors’ Attendance At Annual Stockholder Meetings | 72 | | Other Business | 72 | | Where You Can Find More Information | 73 | | APPENDIX A | 74 |
Proposal No. 1 Election Of Directors
Proposal No. 1 Election Of Directors The Company’s Board of Directors is presently comprised of eight members, who are divided into three classes, designated as Class I, Class II and Class III. Class I directors consist of Betsy Atkins and Dirk Hoke; Class II directors consist of Dana Gross, Tal Payne and Marcel Gani; and Class III directors consist of Zvi Lando, Avery More, and Nadav Zafrir. Until the amendment to our Certificate of Incorporation to declassify the board and phase-in annual director elections which was implemented at the 2023 Annual Meeting, each class of directors was elected by the stockholders to serve for a three year term from the time of their election until the third annual meeting of stockholders following their election and until the successor was duly elected and qualified or, if earlier, until the director’s death, resignation, retirement, disqualification or removal. Following the 2023 Annual Meeting, the declassification of our Board of Directors is being phased in over a period of three years, as follows: (i) the current Class III directors are standing for re-election at this Annual Meeting to serve for a term of one year expiring at the next succeeding Annual Meeting of Stockholders, (ii) the Class III and Class I directors will stand for reelection or election, as applicable, at the 2025 annual meeting of stockholders, and (iii) all of our directors will stand for election or re-election, as applicable, at the 2026 Annual Meeting of Stockholders to serve for a term of one year expiring at the next succeeding Annual Meeting of Stockholders. Beginning with the 2026 Annual Meeting of Stockholders, the declassification of our Board of Directors will be complete, and all directors will be subject to annual election for one-year terms. If elected at the Annual Meeting, each of the nominees for election to Class III will serve for a one-year term until the 2025 Annual Meeting of Stockholders and until his or her successor is duly elected and qualified, or until such director’s earlier death, resignation, retirement, disqualification or removal. If any nominee is unable or unwilling to be a candidate for election by the time of the Annual Meeting (a contingency which the Board does not expect to occur), the stockholders may vote for a substitute nominee chosen by the present Board to fill the vacancy. Alternatively, the stockholders may vote for just the remaining nominees, leaving a vacancy that may be filled on a later date by the Board, or the Board may reduce the size of the Board of Directors. For each of the director nominees and continuing directors the following pages contain certain biographical information including a description of their professional background, primary qualifications, attributes and skills, as well as the Board committees the directors serve on.
Nominees for reelection, as Class III Directors
Nominees for reelection, as Class III Directors
Nominees for reelection, as Class III Directors
| Zvi Lando | Committees: None Other Current Public Boards: None | | Director Since: 2020 Age: 59 | Mr. Lando joined SolarEdge in 2009 as our Vice President, Global Sales. We announced the appointment of Mr. Lando as our Acting Chief Executive Officer in August 2019 and as a director of our Board of Directors and permanent CEO on February 9, 2020. Mr. Lando had previously spent 16 years at Applied Materials, a materials engineering company focused on semiconductor, flat panel display and solar photovoltaic industries, based in Santa Clara, California, where he held several positions, including process engineer for metal deposition and chemical vapor deposition systems, business manager for the Process Diagnostic and Control Group. His last position at Applied Materials was Vice President and General Manager of Baccini Cell Systems Division of the Solar Business Group, which he held from January 2008 to March 2009. Mr. Lando holds a B.S. in Chemical Engineering from the Technion, Israel’s Institute of Technology in Haifa, and is the author of several publications in the field of chemical deposition. Mr. Lando’s historical knowledge of our company and his experience at other technology companies provides a valuable perspective to our Board. | | Avery More | Committees: Compensation Committee (Chairperson), Technology Committee (Chairperson) Other Current Public Boards: None | | Director Since: 2006 Age: 69 | Mr. More has served as a member of our Board of Directors since 2006. Mr. More was the sole seed investor in the Company through his fund, ORR Partners, and participated in all successive rounds. Mr. More continues to invest in technology companies, with ORR Partners, Innoventions Capital and More Family Investments entities. Previously, Mr. More was the president and chief executive officer of CompuCom Systems Inc. from 1989 to 1993. Mr. More currently serves on the board of directors of several private companies, BuzzStream, AppDome, HolistiCyber Ltd., senseIP, and SageCyber. Mr. More’s historical knowledge of our company and his experience as a director of other technology companies provides a valuable perspective to our Board. |
Nominees for reelection, as Class III Directors
| Nadav Zafrir | Committees: Compensation Committee Member, Nominating and Corporate Governance Committee Member, Technology Committee Member Other Current Public Boards: None | | Director Since: 2019 Age: 54 | Mr. Zafrir joined our Board of Directors in 2019 and serves as the Chairperson. Bringing thirty years of experience in management, leadership, and technology innovation, Mr. Zafrir has been the co-founder and Managing Partner of Team8, a global venture group that builds and backs technology companies at the intersection of artificial intelligence, cybersecurity, data, fin-tech, enterprise software, and infrastructure since 2014. Prior to founding Team8, Nadav spent 20 years in the Israel Defense Forces. He served as Commander of Unit 8200, Israel’s elite military technology unit, where he established the Israel Defense Forces Cyber Command. He holds an LLB from the Interdisciplinary Center Herzliya (IDC) and an Executive MBA from the Kellogg - Recanati program of the Kellogg Graduate School of Business at Northwestern University in Chicago and the Recanati School of Business at Tel Aviv University. Mr. Zafrir’s technological expertise and former work experience with some of our senior management provides our board and the management team with helpful and valuable contribution insights into the business and technology development discussions which further strengthens our executive management. |
Nominees for reelection, as Class III Directors
The Board of Directors recommends a vote FOR the election of each of the three Class III director nominees.
Continuing Directors
Continuing Directors
Continuing Directors
| Dirk Carsten Hoke | Committees: Nominating and Corporate Governance Committee Member Other Current Public Boards: Spire Global, Inc. | | Director Since: 2022 Age: 55 | Mr. Hoke has served as a member of our Board of Directors since 2022. Mr Hoke has a career that spans almost 30 years and five continents in various industries. Since 2022 Mr. Hoke has served as the Chief Executive Officer of Volocopter, a pioneer of the Urban Air Mobility (UAM), launching first commercial operation in 2024. Prior to this role, Mr. Hoke served from 2016 until 2021 as the Chief Executive Officer of Airbus Defence and Space, a provider of defense, space, and security systems and also served as a member of Airbus’ Global Executive Committee. Prior to that, he held various executive positions at Siemens, including General Manager for the Transrapid Propulsion and Power Supply Subdivision, President of Siemens Transportation Systems China, Chief Executive Officer of Siemens Africa, Chief Executive Officer Industrial Solutions, Chief Executive Officer Customer Services and Chief Executive Officer Large Drives. Mr. Hoke resides in Germany and serves on the Board of Advisors of Voyager Space and on the Board of Directors of Spire Global. He holds a degree in Mechanical Engineering from the Technical University of Brunswick, Germany and is an Alumni of the Young Global Leader Program of the World Economic Forum. Mr. Hoke brings valuable business experience to our Board through his years of experience as a chief executive officer with technology companies and experience as a director of other public companies. |
Continuing Directors
| Betsy Atkins | Committees: Nominating and Corporate Governance Committee (Chairperson), Technology Committee (Member), Compensation Committee (Member) Other Current Public Boards: Wynn Resorts Ltd., SL Green Realty Corp., and Enovix Corp. | | Director Since: 2021 Age: 70 | Ms. Atkins has served as a member of our Board of Directors since 2021. Ms. Atkins is a seasoned business-woman and serial entrepreneur with two decades of experience serving on some of the world’s most visible global public company boards. She served as the CEO of Baja Corporation, an independent venture capital firm focused on technology, renewable energy and life sciences, since 1994. She has previously served as CEO and Chairperson of SaaS company Clear Standards, Inc., an energy management and sustainability software company, a position she held between February and August 2009. She also served as CEO of Key Supercomputer, focused on seismic analytics, applying AI machine learning technology to pinpoint reserves using predictive and prescriptive analytics, between 2008 and 2010 and as CEO of NCI, Inc., a food manufacturer creating Nutraceutical and Functional Food products. In addition, Ms. Atkins is a highly acclaimed public company Board Director and author. For 20 years, she has worked behind the scenes at companies like Schneider, Lucent, Vonage, SunPower Corp, Paychex and Nasdaq Inc. Ms. Atkins started her business career as an entrepreneur co-founding several successful high tech, energy and consumer companies including Ascend Communications. Ms. Atkins is an effective operational leader, having served as CEO three times and she has a strong global and operational perspective encompassing the full range of experience from growth to restructuring and is a recognized ESG and Governance thought leader. Her corporate board experience covers industries including Technology, Energy Management, Solar, Industrial Automation, Manufacturing, Automotive, and Logistics. Ms. Atkins brings the knowledge of leveraging next gen digital technologies, is an innovative entrepreneur for tech enablement for the future of work for manufacturing 4.0 initiatives (i.e. applying industrial Internet of Things, or IIoT, for preventative maintenance in the Industrial, Automotive, and Aerospace sectors). Ms. Atkins has a global, broad perspective on energy from her role as Lead Director at SunPower Corporation, the renewable solar company, and Schneider Electric, SA, the energy efficiency infrastructure monitoring and industrial automation process control company, where she served from 2005 to 2012 and 2011 to 2019, respectively. She also served on the boards of Covetrus, Inc. and its predecessor, Vets First Choice, a pharmaceutical company, from February 2016 until September 2019, Cognizant Technology Solutions Corporation, an information technology services company, from April 2017 to October 2018 and HD Supply, Inc., an industrial distributor, from September 2013 to April 2018. Her areas of experience include Artificial Intelligence, Seismic Analytics, Internet of Things (IoT), using technology to digitize processes driving accuracy and productivity, Cyber Security, Mobile and SaaS. Ms. Atkins currently serves on the public boards of Wynn Resorts, Limited, and Enovix Corporation. Ms. Atkins also serves on the public board of SL Green Realty Corp but has informed SL Green Realty Corp that she will be resigning from her directorship effective from the date her successor is duly elected and qualified in SL Green Realty Corp’s 2024 annual meeting of stockholders. Ms. Atkins holds a degree in liberal arts from the University of Massachusetts, Magna Cum Laude. Ms. Atkins brings to the Board valuable business experience through her years of experience as a chief executive officer with technology and energy companies, her extensive experience in ESG, and her experience as a director of other public companies. |
Continuing Directors
| Marcel Gani | Committees: Audit Committee (Chairperson) Other Current Public Boards: None | | Director Since: 2015 Age: 71 | Mr. Gani has served as a member of our Board of Directors since 2015. Since 2009, Mr. Gani has served as an independent consultant to various start-up companies, and between November 2009 and June 2010 acted as chief executive officer for New Pax, a private company. From 2005 to 2009, Mr. Gani lectured at Santa Clara University, where he taught classes on accounting and finance. In 1997, Mr. Gani joined Juniper Networks, Inc. where he served as chief financial officer and executive vice president from December 1997 to December 2004, and as chief of staff from January 2005 to March 2006. Prior to joining Juniper, Mr. Gani served as Chief Financial Officer at various companies, including NVIDIA Corporation, Grand Junction Networks, Primary Access Corporation and Next Computers. Mr. Gani served as corporate controller at Cypress Semiconductor from 1991 to 1992. Prior to joining Cypress Semiconductor, Mr. Gani worked at Intel Corporation from 1978 to 1991. Mr. Gani holds a B.A. in Applied Mathematics from Ecole Polytechnique Federal and an M.B.A. from University of Michigan, Ann Arbor. Mr. Gani brings valuable financial and business experience to our Board through his years of experience as a chief financial officer with public companies and past experience as a director of other public companies. | | Tal Payne | Committees: Audit Committee Member Other Current Public Boards: None | | Director Since: 2015 Age: 52 | Ms. Payne has served as a member of our Board of Directors since 2015. Tal Payne brings over 15 years of financial management experience. She previously served as Chief Financial Officer at Check Point Software Technologies Ltd., a leading provider of cyber security solutions to governments and corporate enterprises globally from 2008 to 2023. During her tenure, Ms. Payne has held the position of Chief Financial and Operations Officer from 2015, overseeing the company’s global operations and finance, including investor relations, legal, treasury, purchasing and facilities. Ms. Payne served as Chief Financial Officer at Gilat Satellite Networks Ltd., where she held the role of Vice President of Finance for over five years. She began her career as a CPA in public accounting at Pricewaterhouse Coopers. Ms. Payne holds a B.A. in Economics and Accounting and an Executive M.B.A., both from Tel Aviv University. Ms. Payne served on the board of IronSource Ltd. between 2021 and until 2023, when Ironsource merged with Unity Software Inc. Ms. Payne brings valuable financial and business experience to our Board through her years of experience as a chief financial officer with publicly traded companies. |
Continuing Directors
| Dana Gross | Committees: Audit Committee Member Other Current Public Boards: Tower Semiconductors Ltd. and Playtika Holding Inc. | | Director Since: 2023 Age: 56 | Ms. Gross has served as a member of our Board of Directors since 2023. Ms. Gross brings over 25 years of strategic and financial expertise to the Board of Directors from technology companies ranging from fintech to AI. Ms. Gross is Head of Strategic Initiatives at Fiverr International Ltd., an online marketplace, since 2022. She previously served as Chief Operating Officer of Prospera Technologies, an AI Agtech company, between 2016 and 2021 and later as Chief Strategy Officer (CSO) at Prospera Technologies between 2021 and 2023. She has also previously held the role of Chief Financial Officer at eToro, a fintech company, and has served on the boards of such companies as M-Systems, AudioCodes, and Power Dsine. She was also a venture partner at one of Israel's leading venture capital fund, Viola Ventures. Ms. Gross has also held various executive management positions at M-Systems from 1992 to 2006, when it was ultimately acquired by SanDisk, and as CEO of Btendo, a start-up company that developed MEMS based PICO projection solutions, until it was acquired by ST Microelectronic in 2012. Ms. Gross holds a BSc in Industrial Engineering from Tel Aviv University and an MBA from San Jose University. Ms. Gross brings valuable financial, strategic and business experience to our Board through her years of experience in both executive financial and strategic roles at public companies. |
Nominating and Corporate Governance Committee
| • | Annually reviewing the compensation of directors for service on the board and its committees and recommend changes in compensation to the board, as appropriate; and |
Director Compensation
Director Compensation Each of our non-employee directors is eligible to receive compensation for their service on our Board of Directors consisting of annual cash retainers and equity awards. For 2023, our Compensation Committee received a report from its independent compensation consultant, which included recommendations for slight modifications to the compensation of our directors in order to align near the median of director compensation of our Peer Group as well as additional changes for the Chairman of our Board as described in last year’s proxy statement and in more detail below. The Compensation Committee considered the independent consultant’s recommendations and revised the non-employee directors’ compensation program as follows for 2023: for each Board member, the annual equity award was increased by $10,000 from $185,000 to $195,000 and the supplemental Board Chair cash retainer was increased by $245,000 from $85,000 to $330,000. In addition, an annual equity award for the Chairman of the Board was added in the amount of $230,000. The additional compensation provided to the Chairman of the Board was approved by the Board of Directors after review with the compensation consultant in light of the significantly increased scope and time commitment of the role. The compensation was initially approved by the Board of Directors at the end of 2022 when the Company was managing significant growth challenges and continues into 2024 as the Company navigates the volatile market in which it operates. This current arrangement is reviewed annually and, if and when the time commitment and scope of the role return to market normative levels, the compensation is expected to revert back closer to prior compensation levels. The table below reflects the cash compensation of our directors in effect in 2023, which was paid in quarterly or semi-annual installments. Directors serving as chairs of committees do not receive additional compensation for serving as general members of the committees they chair.
Director Compensation
| Position | Annual Retainer Effective January 1, 2023 ($) | | Chairperson of the Board | 330,000 | | Board Member | 70,000 | | Audit Committee Chair | 32,500 | | Compensation Committee Chair | 22,500 | | Nominating and Corporate Governance Committee Chair | 15,000 | | Technology Committee Chair | 15,000 | | Audit Committee Non-Chair Member | 12,500 | | Compensation Committee Non-Chair Member | 10,000 | | Nominating and Corporate Governance Committee Non-Chair Member | 7,500 | | Technology Committee Non-Chair Member | 7,500 |
Director Compensation
The equity award program for our non-employee directors in 2023 consisted of (i) an equity award in the form of restricted stock units, granted upon the individual’s initial appointment to our Board of Directors, as applicable, with a grant date value of $150,000, and (ii) an annual equity award in the form of restricted stock units with a grant date value of $195,000, subject to proration for directors whose commencement of Board service is not on the date of the annual stockholder meeting. The initial restricted stock unit awards vest in equal annual installments over three years and the annual RSUs vest in full on the earlier of (i) the one-year anniversary of the grant date or (ii) the Company’s next regular Annual General Meeting of Stockholders, subject to continued board service through the applicable vesting date. Our directors are reimbursed for travel, food, lodging, and other expenses directly related to their activities as directors. Our directors are also entitled to the protection provided by the indemnification provisions in our by-laws. Our Board of Directors may revise the compensation arrangements for our directors from time to time. In addition, starting with equity awards made in 2023, directors are entitled to vesting acceleration upon death or disability. The following table sets forth the total cash and equity compensation paid to our non-employee directors for their service on our board of directors and committees of our board of directors during the year ended December 31, 2023. Mr. Lando is not eligible to receive any additional compensation for serving on our board of directors. His compensation for serving as the Company’s Chief Executive Officer is disclosed in the “Summary Compensation Table” below.
Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | | Nadav Zafrir | 425,000 | 543,813 (2) | 968,813 | | Marcel Gani | 102,500 | 194,830 (3) | 297,330 | | Betsy Atkins | 102,500 | 194,830 (3) | 297,330 | | Avery More | 114,792 | 194,830 (3) | 309,622 | | Tal Payne | 82,500 | 194,830 (3) | 277,330 | | Dirk Hoke | 77,500 | 194,830 (3) | 272,330 | | Dana Gross | 41,250 | 327,436 (4) | 368,686 |
Director Compensation
| (1) All equity awards are calculated in accordance with FASB ASC Topic 718. We provide information regarding the assumptions used to calculate the value of the equity-based awards in Note 2ad to the audited consolidated financial statements included in our Annual Report on Form 10-K filed on February 26, 2024. As of December 31, 2023, Messrs. Gani, More and Payne held 661 unvested restricted stock units, Mr. Zafrir held 1,441 unvested restricted stock units, Ms. Atkins held 863 unvested restricted stock units, Mr. Hoke held 989 unvested restricted stock units, and Ms. Gross held 1,788 unvested restricted stock units. |
Director Compensation
| (2) Includes Mr. Zafrir’s pro-rated additional annual equity award granted by the Board of Directors effective January 1, 2023, of 378 restricted stock units ($119,078), which vested on June 1, 2023, and his annual equity award granted on June 1, 2023, of 1,441 restricted stock units ($424,735), which will become fully vested on June 1, 2024. |
Director Compensation
| (3) $194,830 of the amount reported here represents the grant date fair value of 661 restricted stock units granted to each director on June 1, 2023. All such units will become fully vested on June 1, 2024. |
Director Compensation
| (4) Includes Ms. Gross’s initial equity award of 819 restricted stock units ($149,983) which vest in equal annual installments over three years, and pro-rated annual equity award granted upon appointment to the Board on July 5, 2023 of 969 restricted stock units ($177,453) which will become fully vested on June 1, 2024. |
Compensation Strategy
| • | promote stockholder interests by aligning compensation with our business objectives, including by introducing long term incentives with long term performance goals; |
Compensation Strategy
| • | provide competitive compensation that varies based on performance and drives employee performance and engagement; |
Compensation Governance Highlights
| • | robust clawback policy, covering both cash and equity compensation; |
Compensation Governance Highlights
| • | use of objective performance criteria in our incentive plans; |
Compensation Governance Highlights
| • | advice from independent compensation consultants retained by the Compensation Committee; |
Compensation Governance Highlights
| • | use of Performance Stock Units (PSUs) that are earned; based on the company’s 3-year total stockholder return (TSR) relative to the companies that comprise the S&P 500 Index. |
Compensation Governance Highlights
For 2023, given that the financial measures set in the bonus plan were achieved at just under 70% of target and the Company’s profitability did not grow year over year, no bonuses were paid to our NEOs or other executives. In 2023, approximately 88% of the CEO’s target total direct compensation (consisting of base salary, target annual incentive opportunity and target long-term equity incentive opportunity), and 79% of target total direct compensation, on average, for each of our other NEOs was “at-risk”, meaning that it was contingent upon the achievement of certain financial results as detailed herein or subject to time or performance-based vesting. For 2023 PSUs tied to 3-year relative total stockholder return represent 50% of our long-term incentive (“LTI”) and time vested RSUs represented the remaining 50% of our LTI.
Compensation Objectives and Guiding Principles
| • | Pay for Financial Performance: Under our annual cash incentive plan, for the year 2023, the Compensation Committee determined a set of financial parameters related to revenues, gross margins and profitability of the Company. The plan stated that if these overall parameters are not met at a level of at least 70% of target and profitability does not grow year over year, the executives are not entitled to any compensation under the plan. These parameters serve as the CEO’s measurable targets for his MBO entitlement. As discussed earlier, given that these parameters were not met, no cash compensation was awarded to executives in 2023. Additionally, the Relative TSR PSU tranche that was granted in early 2022 and had a two-year performance period ending on December 31, 2023 was not earned. |
Compensation Objectives and Guiding Principles
| • | Alignment of Interests: We seek to align the interests of our senior executives with those of our stockholders through a heavy emphasis on equity-based awards and stock ownership guidelines. In 2023, 50% of the equity-based awards were granted in the form of PSUs tied to total stockholder return measured based on the performance of the Company’s stock price versus the companies that constitute the S&P 500 index and 50% were granted in the form of time-based RSUs which vest only if the executive remains employed by the Company over a four-year period. |
Elements of Compensation
| (1) Actual LTI composition was slightly varied (+/-1%) due to a gap between the stock price and the fair market value at market close on the grant date. |
Compensation Peer Group
Compensation Peer Group In order to attract, retain, and motivate the best management talent, we believe that we must provide a target compensation opportunity that is competitive relative to our peers. Therefore, the Compensation Committee considers practices of specific companies that we identified as our peers for executive compensation in 2023 (the “2023 Peer Group”), as well as survey data. Prior to the start of each new year, the Compensation Committee reviews the peer group with the assistance of Frederic W. Cook & Co., Inc. (“FW Cook”), an independent consultant retained by the Compensation Committee, and makes changes, as appropriate, with an aim that it continues to appropriately reflect the Company’s size, industry, and scope of operations when considering the appropriate compensation for our executives. In Summer 2022, FW Cook reviewed our peer group and recommended removing Cree, Inc. due to a large divestiture, and Xilinx due to its acquisition. Our 2023 Peer Group was used to inform 2023 compensation decision and was comprised of the following companies: 2023 Peer Group:
Compensation Peer Group
| • ANSYS, Inc. | • Enphase Energy, Inc. | • MKS Instruments Inc. | | • Arista Networks, Inc. | • Entegris, Inc. | • Monolithic Power Systems, Inc. | | • Cadence Design Systems, Inc. | • First Solar, Inc. | • Silicon Laboratories Inc. | | • Cognex Corp | • Generac Holdings Inc. | • Skyworks Solutions, Inc. | | • Curtiss-Wright Corporation | • HEICO Corp | • Teradyne, Inc. | | | • IDEX Corp | |
Compensation Peer Group
During late summer 2023, FW Cook performed a review of the 2023 Peer Group and recommended removing two peers that fell below 0.3x of our trailing four quarter revenue at the time (Cognex and Silicon Laboratories), leaving only 14 continuing peers. A comprehensive search for additional peers was performed which focused primarily on broad industry, revenue, and market capitalization relevance, with an aim toward increasing the number of peers and bringing our revenue and market capitalization closer to the peer median at the time. As a result, we added eleven new peers, which are marked with asterisks below, and used the following 25 company peer group to inform the 2024 compensation program. Our trailing four quarter revenue at the time the peer group was reviewed was $3.7 billion, which was positioned at the 49th percentile of the new group. Our market capitalization on August 31, 2023 was $9.2 billion, which was positioned in the 38th percentile of the new group. 2024 Peer Group:
Compensation Peer Group
| • Amkor Technology, Inc.* | • Entegris, Inc. | • Monolithic Power Systems, Inc. | | • ANSYS, Inc. | • First Solar, Inc. | • PTC, Inc.* | | • Arista Networks, Inc. | • Generac Holdings, Inc. | • Qorvo, Inc.* | | • Cadence Design Systems, Inc. | • HEICO Corp | • Sensata Technologies Holding plc* | | • Ciena Corporation* | • IDEX Corp | • Skyworks Solutions, Inc. | | • Coherent Corp* | • ITT, Inc.* | • Teradyne, Inc. | | • Curtiss-Wright Corp | • Juniper Networks, Inc.* | • Vertiv Holdings Co* | | • Diodes Incorporated* | • Lincoln Electric Holdings, Inc.* | | | • Enphase Energy, Inc. | • MKS Instruments, Inc. | |
Compensation Peer Group
*New peer for 2024 Peer Group, added in late Summer 2023
Role of Compensation Consultants
Role of Compensation Consultants With respect to decisions for 2023 target compensation of the NEOs, competitive review of senior executive and non-employee director compensation programs and peer group review for 2023, the Compensation Committee retained FW Cook to review market trends and advise the Compensation Committee, including review of Company-wide burn rate and other aggregate LTI grant practices. FW Cook is the sole compensation consultant for the Compensation Committee and did not provide additional services outside of advising on the amount and form of executive and director compensation. Our Compensation Committee has concluded that no conflicts of interest exist with respect to FW Cook’s provision of services after considering the following six factors: (i) the provision of other services to us by FW Cook; (ii) the amount of fees FW Cook received from us as a percentage of its total revenue; (iii) the policies and procedures of FW Cook that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the FW Cook consultants with a member of the Compensation Committee; (v) any of our stock owned by the FW Cook consultants; and (vi) any business or personal relationship of the FW Cook consultants or FW Cook with any of our executive officers. The Compensation Committee is directly responsible for the appointment, compensation, and oversight of FW Cook. FW Cook reported directly to the Compensation Committee, although the Compensation Committee instructed FW Cook to work with management to compile information and to gain an understanding of the Company and any Company-related issues for consideration by the Compensation Committee, including market trends.
Annual Cash Incentive Compensation
Annual Cash Incentive Compensation For 2023, each NEO was eligible to receive an annual incentive compensation payment based on achievement of pre-established performance goals. For all of the NEOs, any earnouts under the annual cash incentive compensation program are contingent upon the Company achieving a minimum level of performance with respect to certain pre-established financial parameters. If the weighted average achievement for the financial measures is not at least 70% of target and profitability is not improved year over year, no annual cash incentive compensation is awarded to the NEOs. For 2023, given that the financial parameters were not met by at least 70% of the target and profitability did not improve year over year, no cash compensation was awarded. As such, the Company did not review the individual goals of the CEO or the other executives as no pay out was contemplated.
Annual Cash Incentive Compensation
| | Goal Type | Percentage of Total | 2023 Achievement vs. Goals (Corporate Performance) | 2023 Goal Achievement | | Financials | Revenue for the Solar business | 20% | $2.8 billion vs. $4.2 billion goal | 13.4% | | | Gross Margin for the Solar business | 15% | 29.2% gross margin in solar business vs. 32.5% goal | 13.5% | | | Operating Profitability for the Solar business | 12% | $364.5 million in net income vs. $875 million goal | 5.0% | | | Non- solar business | 6% | Targets relating to revenues and loss of non-solar businesses (e-Mobility and storage) | 5.1% | | Other Corporate Goals | Strategy | 14% | Goals which included the development of new inverter technologies, initiation and execution of long-term manufacturing strategy and execution of strategic plans regarding our non-solar businesses. | 12.2% | | | Scalability & Infrastructure | 10% | Goals which included maintaining a higher employee retention rate. | 8.0% | | | Operations | 10% | Goals included increasing manufacturing capacity in Mexico, ramp of manufacturing in Sella 2 and certain cost reduction and quality related initiatives | 8.0% | | | ESG | 3% | Reduction of over 6% GHG emissions per $1 revenues | 3.0% | | | Board Discretion | 10% | Not applicable | NA | | | Total | 100% | | NA (1) |
Annual Cash Incentive Compensation
| (1) No payment was made in 2023, given that the financial parameters were not met by at least 70% of the target and profitability did not improve year over year. As such, the Company did not review the individual goals of the CEO or the other executives as no pay out was contemplated. |
Annual Cash Incentive Compensation
In addition to the corporate performance goals detailed above, which were weighted 50% for each NEO other than the CEO, who is weighted 100% based on the corporate performance goals, each NEO had additional individual pre-determined performance goals relating to their respective specific areas of responsibility and contribution to the Company, which comprised the remaining 50% of their 2023 bonus determination. These individual performance goals related to each executive’s responsibilities and contributions toward the success and growth of the Company for the forthcoming year. Given that the financial parameters were not met, the individual targets of each NEO were not evaluated. *Any bonus payment for the CEO or other NEOs was contingent upon the Company meeting at least 70% of its Financial Goals and year over year growth of net income.
Equity Compensation
Equity Compensation Beginning in 2022, the Compensation Committee changed the mix of equity compensation granted to its executives in order to more closely tie executive compensation to performance. As part of this change, starting in January 2022, the Compensation Committee removed options from the Company’s long-term incentive program. Therefore, for all NEOs, the award type mix is comprised of PSUs and RSUs, each weighted 50%. The Company believes that this ratio supports a performance based compensation program that aligns the NEOs’ interests with the interests of stockholders, and provides a balance between maximizing stockholder value (given that PSUs are tied to the TSR performance ranking of the Company, relative to the TSR of the companies that comprise the S&P 500 index) and retention (given that RSUs only become payable based upon continued service over time). The RSUs vest quarterly over 4 years. The 2023 PSUs vest based on a three-year performance period (2023-2025). The possible level of payout is as follows:
Equity Compensation
| TSR Performance Relationship | Threshold | Target | Maximum | | | | | | | SolarEdge TSR Percentile Rank(1) | 25th | Median | 75th | | Shares Earned as a percent of Target | 25% | 100% | 150% |
Equity Compensation
| (1) Linear interpolation applies between performance levels; no earnout below 25th percentile TSR performance. |
Equity Compensation
The PSUs granted in 2023 are based entirely on a single three-year performance period. When first implementing the new PSU program in 2022, however, 25% of the PSUs granted in 2022 were subject to a two-year performance period, which ended on December 31, 2023. Following the end of 2023, the Compensation Committee determined (based on a third-party report) that the Company’s TSR for the period measured from January 1, 2022 to December 31, 2023 of negative 62.44% resulted in a positioning of 481 out of the S&P 500 companies and translated to no earnout for this tranche.
Employment Agreements
Employment Agreements During 2023, we were party to employment agreements with Messrs. Lando, Faier, Bechor, Galin, Adest and Ms. Prishkolnik. Each of these standardized employment agreements provides for employment of the NEO on an “at will” basis and provides for a base salary, vacation, sick leave, payments to a pension and severance fund, as well as to an Israeli recreational fund and recuperation pay, in accordance with Israeli law. All executive management employment agreements provide for double-trigger equity vesting following a change of control event. See the sections below entitled “Executive Compensation Table Narrative-Employment Agreements” and “Potential Payments and Acceleration of Equity upon Termination or Termination in Connection with a Change in Control” for more information. On July 14, 2023, and December 1, 2023, each of Messrs. Galin and Adest ceased to be executive officers, respectively.
Compensation Risk
| • | The balance between annual and long-term compensation, including the fact that a significant portion of compensation is delivered in the form of equity incentives that vest over several years; |
Compensation Risk
| • | PSUs are measured against the Company’s TSR relative to the TSR of companies on the S&P 500 index, and are subject to a three-year vesting period; |
Compensation Risk
| • | The use of multiple financial metrics for performance-based annual cash incentive awards and the use of individual goals under our annual cash incentive program; |
Compensation Risk
| • | The compensation committee’s ability to modify annual cash incentives to reflect the quality of earnings, individual performance, and other factors that it believes should influence compensation; |
Summary Compensation Table
Summary Compensation Table The following table summarizes the compensation of our NEOs for the year ended December 31, 2023, the year ended December 31, 2022, and the year ended December 31, 2021.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Option Awards ($)(2) | Stock Awards ($)(2)(3) | Non-Equity Incentive Plan Compensation ($)(1)(4) | All Other Compensation ($)(1)(5) | Total ($) | | Zvi Lando - | 2023 | 816,851 | — | 6,558,293 | — | 125,306 (6) | 7,500,450 | | Chief Executive Officer | 2022 | 850,952 | - | 5,499,905 | 942,958 | 131,090 | 7,424,905 | | | 2021 | 888,765 | 1,130,335 | 4,299,750 | 905,566 | 136,920 | 7,361,336 | | Ronen Faier - | 2023 | 503,614 | — | 2,219,298 | — | 79,410 (7) | 2,802,322 | | Chief Financial Officer | 2022 | 524,062 | - | 2,000,177 | 405,204 | 82,649 | 3,012,092 | | | 2021 | 547,350 | 410,970 | 1,584,859 | 334,724 | 85,862 | 2,963,765 | | Uri Bechor - | 2023 | 480,931 | — | 2,219,298 | — | 74,766 (8) | 2,774,995 | | Chief Operating Officer | 2022 | 498,118 | - | 2,000,177 | 392,423 | 78,708 | 2,969,426 | | | 2021 | 520,252 | 410,970 | 1,584,859 | 306,141 | 84,280 | 2,906,502 |
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Option Awards ($)(2) | Stock Awards ($)(2)(3) | Non-Equity Incentive Plan Compensation ($)(1)(4) | All Other Compensation ($)(1)(5) | Total ($) | | Rachel Prishkolnik - | 2023 | 423,683 | - | 1,513,030 | - | 64,874 (9) | 2,001,587 | | VP General Counsel and Corporate Secretary | 2022 | 441,040 | - | 1,499,846 | 278,356 | 68,199 | 2,287,441 | | | 2021 | 460,639 | 308,227 | 1,188,486 | 277,073 | 71,082 | 2,305,507 | | Yoav Galin - | 2023 | 421,794 | - | 1,513,030 | - | 67,935(10) | 2,002,759 | | Former VP Research and Development | 2022 | 441,040 | - | 1,499,846 | 263,711 | 70,460 | 2,275,057 | | | 2021 | 460,639 | 308,227 | 1,188,486 | 251,263 | 73,419 | 2,282,034 | | Meir Adest - | 2023 | 284,853 | - | 1,159,896 | - | 49,752(11) | 1,494,501 | | Former Chief Product Officer | | | | | | | |
Summary Compensation Table
| (1) We paid the amounts reported for each NEO in New Israeli Shekels. We have translated amounts paid in New Israeli Shekels into U.S. dollars at the foreign exchange rate published by the Bank of Israel as of the date of payment. | | (2) The amounts in this column represent the aggregate grant date fair value of the equity-based awards granted to our NEOs, computed in accordance with FASB ASC Topic 718. We provide information regarding the assumptions used to calculate the value of the equity-based awards in Note 2ad to the audited consolidated financial statements included in our Annual Report on Form 10-K filed on February 26, 2024. There can be no assurance that these awards will vest or will be exercised (in which case no value will be realized by the individual), or that the value upon vesting or exercise will approximate the aggregate grant date fair value. | | (3) The amounts for the PSUs were calculated based on the probable outcome of the performance conditions as of the grant date, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718. For these amounts, see the Grants of Plan-Based Awards table later in this proxy statement. | | (4) Represents the cash bonuses earned pursuant to our annual cash incentive program. For more information, see the discussion in the CD&A under the caption Annual Cash Incentive Compensation. | | (5) Includes mainly the contribution by the Company to severance funds, pension funds and Israeli recreational funds and a recuperation allowance. | | (6) Including a $68,044 contribution by the Company to Mr. Lando’s severance fund and $57,262 in aggregate Company contributions to pension and Israeli Recreational funds and recuperation allowance. | | (7) Including a $41,951 contribution by the Company to Mr. Faier’s severance fund and $37,459 in aggregate Company contributions to pension and Israeli Recreational funds and recuperation allowance. | | (8) Including a $40,062 contribution by the Company to Mr. Bechor’s severance fund and $34,704 in aggregate Company contributions to pension and Israeli Recreational funds and recuperation allowance. | | (9) Including a $35,293 contribution by the Company to Ms. Prishkolink’s severance fund and $29,581 in aggregate Company contributions to pension and Israeli Recreational funds and recuperation allowance. | | (10) Including a $35,135 contribution by the Company to Mr. Galin’s severance fund and $32,800 in aggregate Company contributions to pension and Israeli Recreational funds and recuperation allowance. | | (11) Including a $23,728 contribution by the Company to Mr. Adest’s severance fund and $26,024 in aggregate Company contributions to pension and Israeli Recreational funds and recuperation allowance. |
2023 Grants of Plan-Based Awards
2023 Grants of Plan-Based Awards
2023 Grants of Plan-Based Awards
| Name | Equity Award Grant Date | Estimated Future Payouts under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number of Shares of Stock or Units | Grant Date Fair Value of Stock Awards ($)(3) | | | | Threshold ($) | Target ($)(1) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Zvi Lando | | | $1,096,014 | | | | | | | | | 01-04-23 | | | | | | | 11,386 | $3,308,316 | | | 02-08-23 | | | | 2,586 | 10,343 | 15,515 | | $3,249,977 | | Ronen Faier | | | $432,464 | | | | | | | | | 01-04-23 | | | | | | | 3,853 | $1,119,528 | | | 02-08-23 | | | | 875 | 3,500 | 5,250 | | $1,099,770 | | Uri Bechor | | | $412,986 | | | | | | | | | 01-04-23 | | | | | | | 3,853 | $1,119,528 | | | 02-08-23 | | | | 875 | 3,500 | 5,250 | | $1,099,770 | | Rachel Prishkolnik | | | $303,188 | | | | | | | | | 01-04-23 | | | | | | | 2,627 | $763,301 | | | 02-08-23 | | | | 597 | 2,386 | 3,579 | | $749,729 | | Yoav Galin | | | $301,863 | | | | | | | | | 01-04-23 | | | | | | | 2,627 | $763,301 | | | 02-08-23 | | | | 597 | 2,386 | 3,579 | | $749,729 | | Meir Adest | | | $257,005 | | | | | | | | | 01-04-23 | | | | | | | 2,014 | $585,188 | | | 02-08-23 | | | | 457 | 1,829 | 2,744 | | $574,708 |
2023 Grants of Plan-Based Awards
| (1) The Non-Equity Incentive Plan does not include any thresholds or a maximum cap for the Non-Equity Incentive Awards; provided, however, that the Named Executive Officers are not be entitled to any payment if the Financial Goals under the plan are not achieved at 70% of target and profitability did not improve year over year. For 2023, given that the financial parameters were not met by at least 70% of the target and profitability did not improve year over year, no cash compensation was awarded. |
2023 Grants of Plan-Based Awards
| (2) These amounts reflect the PSUs granted to the NEOs in 2023, which will be eligible to vest between 0 and 150% of the number of shares shown in the “Target” sub-column based on the Company’s total stockholder return (“TSR”) performance relative to the TSR performance of the companies in the S&P500 index, as of the valuation date. The amounts in the “Threshold” sub-column refer to the minimum amount of shares that will vest for a certain level of performance under the plan. The amounts in the “Target” sub-column refers to the amount of shares that will vest if the specified performance target is reached. The amounts in the “Maximum” sub-column refer to the possible maximum amount of shares that will vest under the award. |
2023 Grants of Plan-Based Awards
| (3) The amounts in this column represent the aggregate grant date fair value of the equity-based awards granted to our NEOs, computed in accordance with FASB ASC Topic 718. We provide information regarding the assumptions used to calculate the value of the equity-based awards in Note 2ad to the audited consolidated financial statements included in our Annual Report on Form 10-K filed on February 26, 2024. There can be no assurance that these awards will vest (in which case no value will be realized by the individual), or that the value upon vesting will approximate the aggregate grant date fair value. |
Outstanding Equity Awards at December 31, 2023
Outstanding Equity Awards at December 31, 2023 The following table provides information regarding outstanding equity awards held by each of our NEOs as of December 31, 2023, including the applicable vesting dates.
Outstanding Equity Awards at December 31, 2023
| | Option Awards | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock that have not Vested | Market Value of Shares or Units of Stock that have not Vested ($)* | Equity Incentive Plan Awards: Number of Unearned Units that have not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Units that have not Vested ($)* | | Zvi Lando | 2,922 | - | $38.05 | 02-Jan-28 | - | - | - | - | | | 27,665 | - | $36.15 | 02-Jan-29 | - | - | - | - | | | 19,011 | 1,189(1) | $101.81 | 02-Jan-30 | - | - | - | - | | | 6,700 | 2,094(2) | $311.35 | 05-Jan-31 | - | - | - | - | | | - | - | - | - | 1,216 (3) | $113,818 | - | - | | | - | - | - | - | 2,760 (4) | $258,336 | - | - | | | - | - | - | - | 1,669 (5) | $156,218 | - | - | | | - | - | - | - | 5,477 (6) | $512,647 | - | - | | | - | - | - | - | - | - | - | - | | | - | - | - | - | - | - | 4,720 (7) | $441,792 | | | - | - | - | - | 9,252 (8) | $865,987 | - | - | | | - | - | - | - | - | - | 10,343 (9) | $968,105 | | Ronen Faier | 5,119 | - | $14.85 | 14-Feb-27 | - | - | - | - | | | 7,396 | - | $38.05 | 02-Jan-28 | - | - | - | - | | | 27,665 | - | $36.15 | 02-Jan-29 | - | - | - | - | | | 7,667 | 480 (1) | $101.81 | 02-Jan-30 | - | - | - | - | | | 2,436 | 762 (2) | $311.35 | 05-Jan-31 | - | - | - | - | | | - | - | - | - | 491 (3) | $45,958 | | | | | - | - | - | - | 1,205 (4) | $112,788 | - | - | | | - | - | - | - | 405 (5) | $37,908 | - | - | | | - | - | - | - | 1,992 (6) | $186,451 | - | - | | | - | - | - | - | - | - | 1,717 (7) | $160,711 | | | - | - | - | - | 3,131 (8) | $293,062 | - | - | | | | | | | - | - | 3,500 (9) | $327,600 | | Uri Bechor | 3,815 | 382 (1) | $101.81 | 02-Jan-30 | - | - | - | - | | | 2,436 | 762 (2) | $311.35 | 05-Jan-31 | - | - | - | - | | | - | - | - | - | 391 (3) | $36,598 | - | - | | | - | - | - | - | 1,205 (4) | $112,788 | - | - | | | - | - | - | - | 405 (5) | $37,908 | - | - | | | - | - | - | - | 1,992 (6) | $186,451 | - | - | | | - | - | - | - | - | - | 1,717 (7) | $160,711 | | | - | - | - | - | 3,131 (8) | $293,062 | - | - | | | | | | | - | - | 3,500 (9) | $327,600 | | Rachel Prishkolnik | 1,376 | - | $36.15 | 02-Jan-2029 | - | - | - | - | | | 1,907 | 382 (1) | $101.81 | 02-Jan-2030 | - | - | - | - | | | 1,827 | 571 (2) | $311.35 | 05-Jan-2031 | - | - | - | - | | | - | - | - | - | 391 (3) | $36,598 | - | - | | | - | - | - | - | 904 (4) | $84,614 | - | - | | | - | - | - | - | 304 (5) | $28,454 | - | - | | | - | - | - | - | 1,494 (6) | $139,838 | - | - | | | - | - | - | - | - | - | 1,287 (7) | $120,463 | | | - | - | - | - | 2,135 (8) | $199,836 | - | - | | | - | - | - | - | - | - | 2,386 (9) | $223,330 |
Outstanding Equity Awards at December 31, 2023
| | Option Awards | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested | Market Value of Shares or Units of Stock that have not Vested ($)* | Equity Incentive Plan Awards: Number of Unearned Units that have not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Units that have not Vested ($)* | | Yoav Galin | 2,499 | - | $5.01 | 29-Oct-24 | - | - | - | - | | | 8,400 | - | $25.09 | 19-Aug-25 | - | - | - | - | | | 17,784 | - | $17.14 | 23-Aug-26 | - | - | - | - | | | 40,948 | - | $14.85 | 14-Feb-27 | - | - | - | - | | | 19,721 | - | $38.05 | 02-Jan-28 | - | - | - | - | | | 22,007 | - | $36.15 | 02-Jan-29 | - | - | - | - | | | 6,102 | 382 (1) | $101.81 | 02-Jan-30 | - | - | - | - | | | 1,827 | 571 (2) | $311.35 | 05-Jan-31 | - | - | - | - | | | - | - | - | - | 391 (3) | $36,598 | - | - | | | - | - | - | - | 904 (4) | $84,614 | - | - | | | - | - | - | - | 304 (5) | $28,454 | - | - | | | - | - | - | - | 1,494 (6) | $139,838 | - | - | | | - | - | - | - | - | - | 1,287 (7) | $120,463 | | | - | - | - | - | 2,135 (8) | $199,836 | - | - | | | - | - | | | - | - | 2,386 (9) | $223,330 | | Meir Adest | 743 | 248 (1) | $101.81 | 02-Jan-30 | - | - | - | - | | | 1,401 | 438 (2) | $311.35 | 05-Jan-31 | - | - | - | - | | | - | - | - | - | 254 (3) | $23,774 | - | - | | | - | - | - | - | 693 (4) | $64,865 | - | - | | | - | - | - | - | 233 (5) | $21,809 | - | - | | | - | - | - | - | 1,145 (6) | $107,172 | - | - | | | - | - | - | - | - | - | 987 (7) | $92,383 | | | - | - | - | - | 1,637 (8) | $153,223 | - | - | | | - | - | - | - | - | - | 1,829 (9) | $171,194 |
Outstanding Equity Awards at December 31, 2023
| * The market value of shares or units of stock that have not vested is based on the number of shares or units of stock that have not vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2023 ($93.60). | | (1) The shares subject to the stock option vest over a four-year period commencing February 28, 2020 with 1/16 of the shares vesting quarterly thereafter. | | (2) The shares subject to the stock option vest over a four-year period commencing February 28, 2021 with 1/16 of the shares vesting quarterly thereafter. | | (3) The shares subject to the RSU vest over a four-year period commencing on February 28, 2020, with 1/16 of the shares vesting quarterly thereafter. | | (4) The shares subject to the RSU vest over a four-year period commencing on February 28, 2021, with 1/16 of the shares vesting quarterly thereafter. | | (5) The shares subject to the RSU vest over a four-year period commencing on February 28, 2021, with 25% of the shares vesting after 12 months and 1/12 of the shares vesting quarterly thereafter | | (6) The shares subject to the RSU vest over a four-year period commencing on February 28, 2022, with 1/16 of the shares vesting quarterly thereafter. | | (7) The PSU award is based on TSR Performance and is eligible to vest upon completion of the performance period that ends on December 31, 2024. | | (8) The shares subject to the RSU vest over a four-year period commencing on February 28, 2023, with 1/16 of the shares vesting quarterly thereafter. | | (9) The PSU award is based on TSR Performance and subject to a three-year vesting period that ends on December 31, 2025. |
Option Exercises and Stock Vested Table
Option Exercises and Stock Vested Table The following table provides information regarding option exercises and stock vested during the year ended December 31, 2023, for each NEO.
Option Exercises and Stock Vested Table
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise | Value Realized upon Exercise ($)(1) | Number of Shares Acquired on Vesting | Value Realized on Vesting ($)(2) | | Zvi Lando | | | 13,924 | $2,990,340 | | Ronen Faier | | | 5,805 | $1,307,967 | | Uri Bechor | | | 7,180 | $1,505,006 | | Rachel Prishkolnik | | | 4,437 | $1,004,935 | | Yoav Galin | | | 4,437 | $1,004,935 | | Meir Adest | 1,439 | $356,991 | 3,156 | $711,702 |
Option Exercises and Stock Vested Table
| (1) The value realized on exercise is calculated as the difference between (A) either (i) the actual sales price of the shares underlying the options exercised if the shares were immediately sold upon exercise or (ii) the closing price of the shares underlying options exercised if the shares were not immediately sold after exercise and (B) the applicable exercise price of the options. |
Option Exercises and Stock Vested Table
| (2) The value realized on vesting is calculated by multiplying (A) the closing price of a common share on the vesting date and (B) the number of shares acquired on vesting before withholding taxes. |
Potential Payments and Acceleration of Equity upon Termination or Termination in Connection with a Change in Control
Potential Payments and Acceleration of Equity upon Termination or Termination in Connection with a Change in Control Severance Pursuant to the terms of the employment agreements with the NEOs, as well as in accordance with Israeli law, upon a termination of the NEO’s employment, each NEO is entitled to the payments we have made on behalf of each NEO to the Manager’s Insurance Policy. Equity Acceleration Pursuant to the terms of their respective employment agreements, if within twelve months following the occurrence of a “change in control” an NEO is terminated without “cause” or if an NEO terminates his or her employment due to “justifiable reasons” (each such term as defined in the NEOs employment agreements), the NEO will be entitled to full acceleration of any unvested shares of restricted stock or stock options held by him at the time of such termination. Furthermore, in the event of a “Transaction” (as defined in our 2007 Global Incentive Plan (the “2007 Plan”), all outstanding equity held by each NEO will accelerate to the extent such awards are not assumed or substituted by a successor corporation in connection with such transaction. Under our PSU Award Agreement, in the event that a Change in Control occurs prior to the completion of the Performance Period, the PSUs shall be converted into time-based restricted stock units based on performance through the date of the Change in Control that will vest in full on the last day of the respective performance period, as applicable and subject to Continuous Service through each such date. In the event of a termination by the Company without Cause within 12 months following the date of the Change in Control, any unvested time-based restricted stock units will accelerate on the date of such termination.
Potential Payments as of December 31, 2023
Potential Payments as of December 31, 2023 The following tables show the value of the potential payments and benefits our named executive officers as of December 31, 2023 would receive in various scenarios involving a termination of their employment or a change in control or other qualifying corporate transaction, assuming a December 31, 2023, triggering date and, where applicable, using a price per share for our common stock of $93.60 (the closing price of a share of our common stock as of the last trading day of the year ended December 31, 2023).
Potential Payments as of December 31, 2023
| Zvi Lando | Termination upon Death of Employee ($) | Termination for Cause ($) | Resignation by the Employee or Termination without Cause by the Company ($) | Termination w/o Cause within 12 months of Change in Control ($) | | Equity Grants Vesting (1) | - | - | - | $3,316,903 | | Total | - | - | - | $3,316,903 |
Potential Payments as of December 31, 2023
| (1) The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2023, and, in the case of RSUs and PSUs, the number of units that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2023. |
Potential Payments as of December 31, 2023
| Ronen Faier | Termination upon Death of Employee ($) | Termination for Cause ($) | Resignation by the Employee or Termination without Cause by the Company ($) | Termination w/o Cause within 12 months of Change in Control ($) | | Equity Grants Vesting (1) | - | - | - | $1,164,478 | | Total | - | - | - | $1,164,478 |
Potential Payments as of December 31, 2023
| (1) The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2023, and, in the case of RSUs and PSUs, the number of units that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2023. |
Potential Payments as of December 31, 2023
| Uri Bechor | Termination upon Death of Employee ($) | Termination for Cause ($) | Resignation by the Employee or Termination without Cause by the Company ($) | Termination w/o Cause within 12 months of Change in Control ($) | | Equity Grants Vesting (1) | - | - | - | $1,155,118 | | Total | - | - | - | $1,155,118 |
Potential Payments as of December 31, 2023
| (1) The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2023, and, in the case of RSUs and PSUs, the number of units that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2023. |
Potential Payments as of December 31, 2023
| Rachel Prishkolnik | Termination upon Death of Employee ($) | Termination for Cause ($) | Resignation by the Employee or Termination without Cause by the Company ($) | Termination w/o Cause within 12 months of Change in Control ($) | | Equity Grants Vesting (1) | - | - | - | $833,134 | | Total | - | - | - | $833,134 |
Potential Payments as of December 31, 2023
| (1) The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2023, and, in the case of RSUs and PSUs, the number of units that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2023. |
Potential Payments as of December 31, 2023
| Yoav Galin | Termination upon Death of Employee ($) | Termination for Cause ($) | Resignation by the Employee or Termination without Cause by the Company ($) | Termination w/o Cause within 12 months of Change in Control ($) | | Equity Grants Vesting (1) | - | - | - | $833,134 | | Total | - | - | - | $833,134 |
Potential Payments as of December 31, 2023
| (1) The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2023, and, in the case of RSUs and PSUs, the number of units that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2023. |
Potential Payments as of December 31, 2023
| Meir Adest | Termination upon Death of Employee ($) | Termination for Cause ($) | Resignation by the Employee or Termination without Cause by the Company ($) | Termination w/o Cause within 12 months of Change in Control ($) | | Equity Grants Vesting (1) | - | - | - | $698,630 | | Total | - | - | - | $698,630 |
Potential Payments as of December 31, 2023
| (1) The value realized is based on the difference between the exercise price of the stock options and the closing price of our common stock on the last trading day of the year ended December 31, 2023, and, in the case of RSUs and PSUs, the number of units that would have vested multiplied by the closing price of our common stock on the last trading day of the year ended December 31, 2023. |
2023 CEO Pay Ratio
2023 CEO Pay Ratio Under the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to disclose the annual total compensation of our median employee, the annual total compensation of our CEO, Mr. Zvi Lando, and the ratio of these two amounts. The 2023 annual total compensation of the median compensated of all our employees who were employed as of December 31, 2023, other than Mr. Lando, was $74,340. Mr. Lando’s 2023 annual total compensation was $7,500,450 and the ratio of these two amounts was 100.9 to 1. Our pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below. To identify the “median employee,” we utilized the 2023 base salary earned during the year and target annual cash incentive for the 2023 performance year, which we annualized for any permanent employee who did not work for the entire year. Earnings of our employees outside the U.S. were converted to U.S. dollars using annual average currency exchange rates. Using the measure described above, we identified a “median employee” who is a full-time employee located in Israel and calculated the median employee’s annual total compensation for our pay ratio in accordance with applicable SEC rules for calculating Summary Compensation Table compensation. SolarEdge is a global company, with operations worldwide and with its executive officers and a majority of its employees located in Israel, the country in which our headquarters office is located. Because the SEC rules for identifying our median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio for our Company, as other companies have headquarters offices in different countries, have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their pay ratios.
2023 Pay Versus Performance Disclosure
2023 Pay Versus Performance Disclosure 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 and certain financial performance of the Company. For further information concerning the Company’s pay for performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Executive Compensation – Compensation Discussion and Analysis.”
2023 Pay Versus Performance Disclosure
| Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($) (3) | Average Compensation Actually Paid to Non-PEO NEOs ($) (2) | Value of Initial Fixed $100 Investment Based On: | | Net Income (in $ '000) | Revenue (in $ '000) (5) | | | | | | | Total Stockholder Return(4) | Peer Group Total Stockholder Return(4) | | | | 2023 | 7,500,450 | (2,219,853) | 2,215,233 | (607,303) | 98.43 | 172.82 | 34,329 | 2,976,528 | | 2022 | 7,424,905 | 8,059,218 | 2,636,004 | 2,906,092 | 297.90 | 236.28 | 93,779 | 3,110,279 | | 2021 | 7,361,336 | 4,432,838 | 2,614,452 | 1,155,059 | 295.06 | 249.34 | 169,170 | 1,963,865 | | 2020 | 4,079,710 | 22,873,251 | 1,726,006 | 12,553,361 | 335.60 | 332.88 | 140,322 | 1,459,271 |
2023 Pay Versus Performance Disclosure
| (1) The amounts reported for Mr. Lando (our Chief Executive Officer) for each corresponding year are the amounts reported in the “Total” column of the Summary Compensation Table. Refer to the Executive Compensation Tables – Summary Compensation Table. |
2023 Pay Versus Performance Disclosure
| (2) SEC rules require certain adjustments be made to the “Summary Compensation Table” totals to determine “compensation actually paid” as reported in the “Pay Versus Performance” table above. The following table details the applicable adjustments that were made to determine “compensation actually paid” (all amounts are averages for the named executive officers other than the CEO). The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. |
2023 Pay Versus Performance Disclosure
| Compensation Actually Paid in 2023 | Compensation Actually Paid to PEO | Average Compensation Actually Paid to non-PEO NEOs | | Summary Compensation Table Total | 7,500,450 | 2,215,233 | | Less, value of Stock Awards reported in Summary Compensation Table | (6,558,293) | (1,724,910) | | Plus, year-end fair value of outstanding and unvested equity awards granted in the year | 1,834,092 | 482,414 | | Plus (less), year over year change in fair value of outstanding and unvested equity awards granted in prior years | (3,474,041) | (1,072,755) | | Plus, fair value as of vesting date of equity awards granted and vested in the year | 374,703 | 98,442 | | Plus (less), change in fair value from last day of prior year to vesting date of equity awards granted in prior years that vested in the year | (1,896,764) | (605,727) | | Compensation Actually Paid | (2,219,853) | (607,303) |
2023 Pay Versus Performance Disclosure
| (3) The dollar amounts represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding Mr. Lando) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs included for these purposes are as follows: in 2023, Ronen Faier, Uri Bechor, Rachel Prishkolnik, Yoav Galin and Meir Adest and in 2022, 2021 and 2020, Ronen Faier, Uri Bechor, Rachel Prishkolnik and Yoav Galin. |
2023 Pay Versus Performance Disclosure
| (4) TSR is determined based on the value of an initial fixed investment of $100 on December 31, 2019. The peer group TSR represents TSR of the Invesco Solar ETF index. |
2023 Pay Versus Performance Disclosure
| (5) Represents total annual revenue. |
Description of Certain Relationships of Information Presented in the Pay Versus Performance Table
Description of Certain Relationships of Information Presented in the Pay Versus Performance Table As described in more detail in the Compensation Discussion & Analysis, the Company’s executive compensation program promotes stockholder interests by aligning compensation with our business objectives, including by introducing long term incentives with long term performance goals. While the Company utilizes several performance measures to align executive compensation with Company performance, all of those Company measures are not presented in the Pay Versus Performance Table. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with “compensation actually paid.” In accordance with SEC rules, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table.
Company vs Peer Group TSR and Compensation Actually Paid
Company vs Peer Group TSR and Compensation Actually Paid
Compensation Actually Paid vs Net Income
Compensation Actually Paid vs Net Income
Compensation Actually Paid vs Revenue
Compensation Actually Paid vs Revenue