DEF 14A of Semtech Corp
Filed Apr 28, 2023 · FY20230001193125-23-126898
ATTENDING THE 2023 ANNUAL MEETING OF STOCKHOLDERS
| | Page | | Executive Compensation | 65 | | Summary Compensation Table | 65 | | Grants of Plan-Based Awards in Fiscal Year 2023 | 67 | | Description of Fiscal Year 2023 Plan-Based Awards | 69 | | Outstanding Equity Awards at Fiscal Year-End 2023 | 70 | | Option Exercises and Stock Vested in Fiscal Year 2023 | 72 | | Nonqualified Deferred Compensation – Fiscal Year 2023 | 72 | | Potential Payments on Termination or Change in Control | 73 | | CEO Pay-Ratio Disclosure | 81 | | Pay versus Performance | 82 | | Securities Authorized for Issuance under Equity Compensation Plans | 86 | | Report of the Audit Committee | 87 | | Ratification of Appointment of Independent Registered Public Accounting Firm (Proposal Number 2) | 88 | | Advisory (Non-Binding) Vote on Executive Compensation (Proposal Number 3) | 90 | | Advisory (Non-Binding) Vote Regarding the Frequency of Future Advisory Votes on Executive Compensation (Proposal Number 4) | 91 | | Questions and Answers Regarding the Annual Meeting | 92 | | Other Matters | 97 | | Exhibit A-Reconciliations of non-GAAP Financial Measures | A-1 |
Director Nominees
Director Nominees
Director Nominees
| Name | Age | Director Since | Independent | Committee Membership | | Rockell N. Hankin | 76 | 1988 | Yes | Nominating and Governance Committee Chair | | Martin S.J. Burvill | 64 | 2020 | Yes | Compensation Committee | | Rodolpho C. Cardenuto | 63 | 2018 | Yes | Audit Committee | | Gregory M. Fischer | 59 | 2023 | Yes | Nominating and Governance Committee | | Saar Gillai | 56 | 2018 | Yes | Compensation Committee | | Ye Jane Li | 55 | 2016 | Yes | Compensation Committee | | Paula LuPriore | 65 | 2020 | Yes | Audit Committee | | Mohan R. Maheswaran | 59 | 2006 | No | – | | Sylvia Summers | 70 | 2013 | Yes | Audit Committee Nominating and Governance Committee | | Paul V. Walsh, Jr. | 58 | 2023 | Yes | Audit Committee Nominating and Governance Committee |
Fiscal Year 2023 Business Highlights
Fiscal Year 2023 Business Highlights
Fiscal Year 2023 Business Highlights
| Record Net Sales $757M Increased approximately $16 million, or 2%, from fiscal year 2022, with growth in Infrastructure and Industrial end markets. Includes 18 days of Sierra Wireless. | Record LoRa-Enabled Revenue $187M Grew 40% over fiscal year 2022, with cumulative LoRa connected end points of approximately 300M units. |
Fiscal Year 2023 Business Highlights
| Record Signal Integrity Product Group Revenue $304M Increased approximately $13 million, or 4.5%, from fiscal year 2022, driven by continued growth of PON-X. | Record Semtech Organic Non-GAAP Diluted EPS Up 8% Non-GAAP diluted earnings per share increased to $2.80 from $2.61 in fiscal year 2022.(1) |
Fiscal Year 2023 Business Highlights
| (1) See Exhibit A for a reconciliation of non-GAAP diluted earnings per share to the most directly comparable GAAP measures. |
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Our business operates under the direction of our Board, which currently consists of twelve directors. Our Board, upon the recommendation of the Nominating and Governance Committee, has nominated ten directors to be elected at the Annual Meeting, each to serve until the following annual meeting of stockholders and until his or her respective successor is elected and qualified. With the exception of Messrs. Fischer and Walsh, all of the nominees were elected to their present terms of office by the stockholders at our 2022 annual meeting of stockholders. With the exception of Messrs. Fischer and Walsh in connection with the Cooperation Agreement (defined and described below), there are no arrangements or understandings between any nominee and any other person for selection as a nominee. On March 17, 2023, we entered into a cooperation agreement (the “Cooperation Agreement”) with Lion Point Capital, LP and certain of its affiliates (“Lion Point”), pursuant to which, among other things, our Board agreed to appoint two new independent directors selected from a group of candidates provided by Lion Point in accordance with the terms of the Cooperation Agreement. Each of Messrs. Fischer and Walsh were appointed to the Board in accordance with the Cooperation Agreement. Accordingly, Messrs. Fischer and Walsh will be standing for election by our stockholders for the first time at the Annual Meeting. Further, under the terms of the Cooperation Agreement, the Board has commenced a search for two additional new independent directors, and will confer with Lion Point in good faith, and appoint those two new independent directors to the Board in accordance with the Cooperation Agreement. Mr. Bruce C. Edwards and Mr. James T. Lindstrom are not standing for re-election. Messrs. Edwards and Lindstrom will continue to serve as directors until the Annual Meeting. All of the nominees have consented to be named as nominees, and have indicated their intent to serve if elected. Unless a stockholder directs otherwise in its proxy it is intended that the proxies solicited by management will be voted for the election of the nominees listed in the following table. Proxies cannot be voted for a greater number of persons than the number of nominees named in this Proxy Statement. If any nominee is unable to serve, or for good cause will not serve, the named proxy holders will vote the shares for such other person, if any, as shall be designated by the Board or the Board may reduce the number of directors constituting the Board. Our Board currently has no knowledge or reason to believe that any of the nominees will be unable or unwilling to serve for good cause if elected. Our Board has a breadth of experience and reflects a diversity of perspectives and backgrounds.
Snapshot of Board Diversity(1)
Snapshot of Board Diversity(1)
Snapshot of Board Diversity(1)
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Snapshot of Board Diversity(1)
| (1) This above represents our Board diversity assuming election to the Board of the director nominees named in this Proxy Statement at the Annual Meeting. |
Snapshot of Board Diversity(1)
Our Board understands and appreciates the value and enrichment provided by a diverse board. As such, we actively seek diverse director candidates (see “Corporate Governance – Criteria and Diversity for Board Membership”).
Snapshot of Board Diversity(1)
| Board Diversity Matrix (as of April 28, 2023) | | | | | | Total Number of Directors | 12 | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 3 | 9 | — | — | | Part II: Demographic Background | | | | | | African American or Black | — | — | — | — | | Alaskan Native or American Indian | — | — | — | — | | Asian | 1 | 1 | — | — | | Hispanic or Latinx | — | 1 | — | — | | Native Hawaiian or Pacific Islander | — | — | — | — | | White | 2 | 6 | — | — | | Two or More Races or Ethnicities | — | 1 | — | — | | LGBTQ+ | — | — | — | — | | Did Not Disclose Demographic Background | — | — | — | — |
Snapshot of Board Diversity(1)
| ✓ | The Board recommends a vote FOR the election of each of the nominees listed below |
Rockell N. Hankin
Rockell N. Hankin Age 76 Director since 1988 Chairman of the Board since 2006 Nominating & Governance Committee Chair Private investor from January 2006 to date. Chief Executive Officer and Principal, Hankin & Co., a diversified business advisory and investment banking firm from June 1986 through December 2005. Chairman of the Board of the Kavli Foundation. Mr. Hankin has spoken on corporate governance issues including at the Duke Capital Markets Director’s Education Institute, UCLA’s Director Certification Program, the University of Maryland Directors’ Institute and various other corporate governance programs. Qualifications: Mr. Hankin’s qualifications to serve as a member of the Board include his 33 years of experience as Director of the Company which we believe provides our Board with specific expertise and insight into our business, his experience as a former chairman or a former director of other public and private companies and his advisory and corporate governance expertise.
Martin S.J. Burvill
Martin S.J. Burvill Age 64 Director since October 2020 Compensation Committee Held a variety of positions at Verizon Communications from 2006 through his retirement in 2019. From 2016 through 2019 Mr. Burvill was President, Business Markets, which provides fixed and mobile (4G/5G) networking, Internet of Things (IoT), security, and Cloud/IT services to U.S. Small and Medium Businesses (SMB’s) and state and local governments. From 2012 through 2016 he was Senior Vice President Global Operations of Verizon Enterprise. Prior to 2012 he was Vice President, Europe, and Vice President Global Solutions of Verizon Enterprise. Previously held executive positions at MCI Communications, Nexagent, Internap, Racal Telecom, British Telecom and S.I.T.A. Highly experienced in serving the needs of regulated and non-regulated industries, and national / local governments, Mr. Burvill has extensive leadership and transformation skills including: P&L ownership, sales, marketing, operations, product management, digital transformation, cloud-based services, cybersecurity, mergers and acquisitions, and a diverse set of other corporate functions. Mr. Burvill worked in numerous countries around the world, including the United States, and in Europe, Asia, and South America. He serves on multiple private and institutional boards, including Chairman of the Board of OKIN BPS, a leading business process outsourcer, since 2022; Independent Director of Nexar Inc., a leading vision / AI data services based provider of solutions for optimizing commercial and leisure based road transportation, since 2022; and the Dean’s Advisory Board and the Institute for International Economic Policy Executive Circle — both at the Elliot School of International Affairs at George Washington University. Qualifications: Mr. Burvill’s qualifications to serve as a member of the Board include his extensive expertise in general management, business transformation, network services, digital transformation, Cloud-based services, cybersecurity, and a diverse set of other corporate functions.
Rodolpho C. Cardenuto
Rodolpho C. Cardenuto Director since September 2018 Audit Committee President, Applications Group of Vonage, a global business cloud communications company, since December 2019. Senior Vice President, Sales of Magic Leap, a private company focused on augmented reality products, from January 2019 until November 2019. President of SAP Americas, Inc. Global Partner Operations organization from 2014 to December 2018. Joined SAP in 2008 as President of SAP Latin America and the Caribbean and also served as President of SAP Americas in 2013. Held executive positions at Hewlett-Packard Company from 2001 to 2007, and prior to 2001, executive positions at Vesper, Nextel, and Hewlett-Packard Brasil Ltda. Chairman of the Board of MIGNOW since February 2020, a private company specializing in SAP migration software. Qualifications: Mr. Cardenuto’s qualifications to serve as a member of the Board include his more than 25 years of extensive and high level experience in the technology industry as well as his experience with global operations.
Gregory M. Fischer
Gregory M. Fischer Age 59 Director since April 2023 Nominating & Governance Committee Most recently served as Senior Vice President and General Manager at Broadcom Inc., a public company and an American designer, developer, manufacturer, and global supplier of a wide range of semiconductor and infrastructure software products, from 2014 to May 2021, and as Vice President and General Manager of the Carrier Access Business from 2004 to 2014. Previously, Mr. Fischer served as Vice President and General Manager of the Video Products Business Unit at Conexant Systems, Inc., an American-based software developer and fabless semiconductor company, from 2002 to 2004, and as Director of Product Marketing and Business Development, from 1997 to 2002. Earlier in his career, Mr. Fischer served as Manager of Corporate Business Development at Rockwell International Corporation (n/k/a Rockwell Automation, Inc.), a major American manufacturing conglomerate involved in aircraft, the space industry, defense and commercial electronics, components in the automotive industry, printing presses, avionics and industrial products, from 1994 to 1997, and served in several design engineering and program management positions at Rockwell Collins Avionics Co. (before being purchased by Raytheon Technologies Corporation), an avionics technology company, from 1985 to 1994. Mr. Fischer has served as an independent advisor to Gerson Lehrman Group, Inc., a professional services firm, since December 2021, and AlphaSights Ltd., an information services company specializing in connecting clients with experts, since December 2021. Mr. Fischer has also served as President at Fischer Family Community Outreach, a foundation dedicated to feeding, clothing and housing indigent residents of San Diego County, since 2017. Qualifications: Mr. Fischer’s qualifications to serve as a member of the Board include 30 years of experience operating and scaling wireline and wireless semiconductor businesses through multiple economic and technology cycles. Mr. Fischer has also led M&A and post-merger strategies, focusing on product line integration and operating expense management to achieve profitable franchise growth. Mr. Fischer was appointed to the Board pursuant to the Cooperation Agreement.
Saar Gillai
Saar Gillai Director since September 2018 Compensation Committee Independent board director and CEO advisor to multiple start-ups since January 2020. Executive mentor at The Exco Group since October 2020. Chief Executive Officer and Director of Teridion, a Cloud-based networking company, from October 2017 to December 2019. Senior Vice President and General Manager of Hewlett Packard Enterprise’s Communications Solutions Business from October 2014 to October 2016. Senior Vice President, General Manager and Chief Operating Officer of HP Cloud from November 2012 to October 2014. Previously held executive positions at 3Com, Enfora, Tropos Networks, and Cisco Systems. Chairman of the Board of Liquid Instruments, a private company focused on next generation test equipment since March 2021. Director of Xilinx, a public company and the leading provider of All Programmable FPGAs, SoCs, MPSoCs and 3D ICs from May 2016 to February 2022 (acquired by AMD). Director of SpaceIQ, a private company and provider of smart IWMS/CAFM facility management software from July 2017 to August 2019 (acquired by WeWork). Qualifications: Mr. Gillai’s qualifications to serve as a member of the Board include his senior executive and board experience in both startups and public companies and his over 30 years of experience in the technology industry.
Ye Jane Li
Ye Jane Li Age 55 Director since 2016 Compensation Committee Strategic Advisor, Diversis Capital, LLC, a private equity firm that invests in middle-market companies, since 2013. Chief Operating Officer, Huawei Enterprise USA, Inc., a company that markets IT products and solutions to datacenters and enterprises from 2012 to 2015. Previously, General Manager at Huawei Symantec USA, Inc. from 2010 to 2012. Consultant in 2009 to The Gores Group, a private equity firm focusing on the technology sector. Executive Vice President and General Manager at Fujitsu Compound Semiconductor Inc. and its Joint Venture with Sumitomo Electric Industries, Ltd., Eudyna Devices Inc., from 2004 to 2009. Prior to 2004, held executive and management positions with NeoPhotonics Corporation, Novalux Inc. and Corning Incorporated. Director of PDF Solutions, Inc. since November 2021, a public company that provides comprehensive data solutions designed to empower organizations across the semiconductor ecosystem to improve the yield and quality of their products and operational efficiency for increased profitability. Director of CTS Corporation since May 2020, a public company and a leading designer and manufacturer of products that sense, connect and move. Director of Knowles Corporation since February 2018, a public company and leading supplier of advanced micro-acoustic, audio processing, and precision device solutions. Director of ServicePower since July 2017, a private company that provides mobile workforce management software solutions. Director of Women in Cable TV and Telecommunications from 1998 to 2001, a non-profit organization promoting women’s leadership in Cable TV and Telecommunications industries. Qualifications: Ms. Li’s qualifications to serve as a member of the Board include her senior executive level experience in a wide range of technology companies from telecommunication components and systems, to semiconductor to IT and datacenters representing a variety of market segments Semtech serves, as well as her experience as a director of private and public companies. Her background and experience also provides the Board with invaluable insights into Asian markets, which are important strategic markets for us.
Paula LuPriore
Paula LuPriore Director since October 2020 Audit Committee CEO and Co-founder of Wujitech, Inc., a private Cloud-based company delivering bio-analytic software solutions since 2010. From 2002 through 2010 she served at Asyst Technologies, Inc., a public robotic automation, technology and manufacturing company for the semiconductor industry, most recently as Interim CEO, and previously as EVP and COO. Ms. LuPriore began her career as a software engineer at IBM and spent 23 years leading various organizations across product engineering, strategy, marketing, and technical sales. Her leadership roles included various Senior Executive roles such as VP of IBM’s Storage Networking Division where she led the product group targeting the Network Attached Storage (NAS) market. Director of Wujitech, Inc., a private company since 2011. In 2015, she served as an Independent Director of PCS Edventures Inc., a publicly traded technology company that designs and delivers education products and services for the science, technology, engineering, and mathematics (STEM) market. Her role on the Board included serving on the audit and compensation committees. Qualifications: Ms. LuPriore’s qualifications to serve as a member of the Board include her extensive experience as a Senior Executive in public global technology companies with a strong background in technology, product, strategy, and business operations. Her broad set of experience spans Information Technology Enterprise Software and Hardware, Semiconductor, and Networking markets, bringing expertise in Data Center, Cloud Computing, and Consulting Services across various industries in domestic and international markets.
Mohan R. Maheswaran
Mohan R. Maheswaran Age 59 Director since 2006 President and Chief Executive Officer of the Company since April 2006. He was Executive Vice President and General Manager of Intersil Corporation (“Intersil”), a company that designs and manufactures analog semiconductors, from June 2002 until March 2006, responsible for managing and overseeing the design, development, applications and marketing functions for Intersil’s Analog Signal Processing Business unit. From June 2001 to May 2002, he was Vice President of Marketing, Business Development and Corporate Strategy for Elantec Semiconductor, Inc., a company that designed and manufactured analog integrated circuits before its acquisition by Intersil in May 2002. He was previously employed by Elantec Semiconductor as Vice President of Business Development and Corporate Strategy from January 2001 to June 2001; by Allayer Communications, a communications integrated circuit startup acquired by Broadcom Corporation; and by IBM Microelectronics, Texas Instruments Incorporated, Hewlett-Packard Company and Nortel Communications. Qualifications: Mr. Maheswaran’s qualifications to serve as a member of the Board include his years of senior executive, management, and development experience at analog semiconductor companies. Mr. Maheswaran’s current position as our President and Chief Executive Officer also brings to the Board knowledge of the day-to-day operations of the Company, which provides invaluable insight to our Board as it reviews the Company’s strategic and financial plans.
Sylvia Summers
Sylvia Summers Director since 2013 Audit Committee Nominating and Governance Committee Prior to retirement, Chief Executive Officer, President and Director of Trident Microsystems, Inc., a company that delivers integrated circuits to the digital TV and set top box markets, from 2007 through 2011. Previously Executive Vice President and General Manager at Spansion Ltd. from 2003 to 2007 and Group Vice President at Cisco Systems, Inc. from 2001 to 2002. Director of Aristocrat Leisure Limited, a company listed on the Australian Stock Exchange and a leading provider of gaming solutions, since September 2016. Previously served as a director of public companies, including Headwaters, Inc. from 2013 to 2017, Alcatel-Lucent from 2015 to 2016, JNI Corporation from 2001 to 2003, Riverstone Networks Inc. from 2002 to 2006 and Gadzoox Networks, Inc. from 2001 to 2003 where she served on the audit and compensation committees. Qualifications: Ms. Summers’ qualifications to serve as a member of the Board include her senior executive level experience in technology-related industries and experience as a director of several public companies, which we believe provides our Board with valuable executive-level insights and board-level experience. Paul V. Walsh , Jr. Age 58 Director since 2023 Audit Committee Nominating and Governance Committee Prior to retirement, served as Chief Financial Officer, Senior Vice President and Treasurer, at Allegro MicroSystems, Inc., a publicly traded global semiconductor company that designs and manufactures advanced sensor and power management integrated circuits for the automotive and industrial end markets (“Allegro”), from 2014 to February 2022. Prior to joining Allegro, Mr. Walsh served as the Chief Financial Officer and Senior Vice President of Rocket Software, Inc., a global software development firm, from 2013 to 2014. From 2004 to 2013, Mr. Walsh served in several senior financial leadership roles at Silicon Laboratories Inc., a publicly traded global technology company that designs and manufacturers semiconductors, other silicon devices and software, including as: Chief Financial Officer and Senior Vice President, from 2011 to 2013; Chief Accounting Officer and Vice President of Finance, from 2006 to 2011; Interim Chief Financial Officer in 2006; Corporate Controller, from 2005 to 2006; and Director of Finance, Worldwide Operations, from 2004 to 2005. Earlier in his career, Mr. Walsh held several finance and operations positions at PerkinElmer, Inc., a publicly traded diagnostics, life science research, food, environmental and industrial testing services and technology provider, from 2003 to 2004, Teradyne, Inc., a publicly traded automatic test equipment designer and manufacturer, from 2000 to 2003, and Analog Devices, Inc., a publicly traded semiconductor company specializing in data conversion, signal processing and power management technology, from 1992 to 2000. Mr. Walsh began his career as a mechanical engineer at R.G. Vanderweil Engineers LLP, a mechanical and electrical engineering firm, from 1987 to 1990. Mr. Walsh currently serves as an adviser to the board of directors and audit committee of Anokiwave, Inc., a late-stage semiconductor company, since October 2022, and as an adjunct professor at Brown University in its School of Professional Studies’ Master’s in Technology Leadership (MTL) program, since April 2022. Mr. Walsh has served on the board of directors of Nitero, Inc., a venture-backed startup semiconductor company, from 2012 to 2015, Grande Communications Networks, LLC, a broadband communications provider of cable and internet services (“Grande”), from 2008 to 2010, including as chairman of Grande’s audit committee, and the Eanes Independent School District, from 2011 to 2013. Qualifications: Mr. Walsh’s qualifications to serve as a member of the Board include his extensive experience in the global semiconductor industry, across nearly 30 years as well as serving as Chief Financial Officer for two of those public companies, which we believe provides our Board with valuable executive-level insights and broad and diverse operational industry experience. Mr. Walsh was appointed to the Board pursuant to the Cooperation Agreement.
Risk Assessment of Compensation Programs
Risk Assessment of Compensation Programs In compliance with SEC disclosure requirements, we have evaluated our compensation policies and practices to determine if any of our programs create risks that are reasonably likely to have a material adverse effect on the Company. We have concluded that our compensation policies and practices do not create such risks. We evaluated our executive compensation program, as well as our broad-based compensation and benefits programs on a worldwide basis. We focused on looking at whether any program’s elements, criteria, purposes or objectives create undesired or unintended risk of a material nature. While all programs were evaluated, primary review and attention was placed on programs having potential for variable payouts where an individual participant or small groups of participants might have the ability to directly affect, control or impact payout results. We believe that all compensation programs are structured with a combination of appropriate controls, objective measurement variables, review authorities and/or payment methodologies that, in the aggregate, are designed and administered so that there is not any reasonable likelihood of material adverse risks to the Company arising from or caused by any of our compensation programs. In addition, “claw-back” rights and provisions in applicable executive compensation plans as discussed below in our “Compensation Discussion and Analysis” are additional safeguards that encourage executives to not take unnecessary or excessive risks. In particular, base salaries are fixed in amount and are, therefore, not susceptible to encouraging unnecessary or excessive risk taking. Although the performance-based, short-term annual cash incentives for our executives focus on achievement of short-term individual performance and business-related goals, which could encourage taking of short-term risks at the expense of long-term goals, this element of compensation is offset and balanced by the Company’s use of long-term, multi-year incentive programs that are designed to align our executives’ interests with those of the Company’s stockholders. Our Compensation Committee also retains discretion to reduce or eliminate short-term annual cash incentives for our executives. We believe that long-term, multi-year incentive programs do not encourage unnecessary or excessive risk taking because the ultimate value of these programs is tied to the value of the Company’s stock, awards with performance-based vesting components are balanced with awards that have a value based solely on our stock price with long-term vesting schedules and no performance-based vesting components, and the grant dates, vesting dates and any applicable performance measurement periods are staggered over multiple years to ensure that executives have a significant stake in the long-term performance of the Company’s stock.
Compensation Committee
| • | periodically reviewing the Company’s executive incentive programs and benefit plans; |
Compensation Committee
| • | carrying out all responsibilities and functions assigned to it by the documents governing the Company’s incentive programs and benefit plans; |
Compensation Committee
| • | making and approving equity awards; and |
Compensation Committee
| • | reviewing and making recommendations to the Board with respect to the compensation of our directors who are not also employed by the Company or one of our subsidiaries (“Non-Employee Directors”). |
Corporate Governance Materials
| • | Director Compensation Policy |
DIRECTOR COMPENSATION POLICY
DIRECTOR COMPENSATION POLICY Non-Employee Directors receive a cash retainer and equity-based compensation for their services on the Board, their committee service, and their role as Chair of the Board or any committee.
Equity Award Grants
Equity Award Grants The equity awards made to Non-Employee Directors in fiscal year 2023 were made from our 2017 Long-Term Equity Incentive Plan, as amended and restated April 21, 2022 (the “2017 Plan”). Non-Employee Directors receive equity awards on the following terms: Annual Stock Unit Awards. On each July 1, each Non-Employee Director then in office is automatically granted two awards of restricted stock units. The first award (the “Annual Non-Deferred RSU Award”) is for a number of restricted stock units determined by dividing $90,000 by the per-share closing price (in regular trading) of the Company’s common stock on the Nasdaq Stock Market on the grant date (or as of the last trading day preceding such date if the date of grant is not a trading day), rounded down to the nearest whole unit. Each Annual Non-Deferred RSU Award vests in full on the earlier of (1) the one-year anniversary of the date of grant and (2) the date immediately preceding the date of the annual meeting of the Company’s stockholders for the year following the year of grant of the award, subject to the Non-Employee Director’s continued service to the Company through such vesting date. To the extent then vested, restricted stock units subject to an Annual Non-Deferred RSU Award are paid in an equal number of shares of the Company’s common stock as soon as practicable following (and in all events within two and one-half months after) the earlier to occur of (1) the one-year anniversary of the date of grant, or (2) the Non-Employee Director’s separation from service on the Board. The second award of restricted stock units (the “Annual Deferred RSU Award”) is for a number of restricted stock units determined by dividing $90,000 by the per-share closing price (in regular trading) of the Company’s common stock on the Nasdaq Stock Market on the grant date (or as of the last trading day preceding such date if the date of the grant is not a trading day), rounded down to the nearest whole unit. Each Annual Deferred RSU Award vests in full on the earlier of (1) the one-year anniversary of the date of grant and (2) the date immediately preceding the date of the annual meeting of the Company’s stockholders for the year following the year of grant of the award, subject to the Non-Employee Director’s continued service to the Company through such vesting date. To the extent then vested, restricted stock units subject to an Annual Deferred RSU Award are paid in cash as soon as practicable following (and in all events within two and one-half months after) the Non-Employee Director’s separation from service on the Board, with the cash payment for each vested restricted stock unit based on the per-share closing price (in regular trading) of the Company’s common stock on the Nasdaq Stock Market on the payment date. Outstanding and unvested Annual Non-Deferred RSU Awards and Annual Deferred RSU Awards accelerate and vest (1) in full upon a change in control of the Company or should the Non-Employee Director’s service with the Company terminate due to the director’s death or disability, or (2) as to a pro-rata portion of the Annual Non-Deferred RSU Award or the Annual Deferred RSU Award, as applicable, should the Non-Employee Director’s service with the Company terminate due to any reason other than the director’s death or disability. In such circumstances, any pro-rata vesting is determined by multiplying (a) the total number of restricted stock units subject to the Annual Non-Deferred RSU Award or the Annual Deferred RSU Award, as applicable, by (b) a fraction (not greater than one), the numerator of which is the number of calendar days in the period beginning with the applicable grant date of the award through and including the date of the director’s termination of services, and the denominator of which is the number of calendar days in the period beginning with the applicable grant date of the award through and including the first July 1 that occurs after the applicable grant date of the award. Any restricted stock units subject to the Annual Non-Deferred RSU Award or the Annual Deferred RSU Award, as applicable, that are not vested on the date of the Non-Employee Director’s termination of service with the Company (after giving effect to any accelerated vesting as described above) will be forfeited upon the Non-Employee Director’s termination of service as a director for any reason. Non-Employee Directors are entitled to receive dividend equivalents with respect to outstanding and unpaid restricted stock units subject to Annual Non-Deferred RSU Awards and Annual Deferred RSU Awards. Dividend equivalents, if any, are paid in the form of a credit of additional restricted stock units that are subject to the same vesting, payment and other provisions as the underlying restricted stock units. Initial Equity Awards. Each Non-Employee Director who is initially elected or appointed to the Board (and who was not an employee of the Company or one of its subsidiaries immediately prior to joining the Board) receives an initial non-deferred restricted stock unit award (“Initial Non-Deferred RSU Award”) and an initial deferred restricted stock unit award (“Initial Deferred RSU Award”). However, if such a Non-Employee Director is initially elected or appointed to the Board on a July 1, the Non-Employee Director will not receive an Initial Non-Deferred RSU Award or an Initial Deferred RSU Award as the Non-Employee Director would be entitled to an Annual Non-Deferred RSU Award and an Annual Deferred RSU Award by virtue of being in office on such July 1. Initial Non-Deferred RSU Awards and Initial Deferred RSU Awards have the same terms and conditions as the Annual Non-Deferred RSU Awards and Annual Deferred RSU Awards, respectively, last granted by the Company prior to the date that the new Non-Employee Director is elected or appointed to the Board, except that the number of restricted stock units subject to each such initial award is determined by dividing the applicable dollar amount set forth above for the applicable annual award by the per-share closing price (in regular trading) of the Company’s common stock on the Nasdaq Stock Market on the grant date (or as of the last trading day preceding such date if the date of grant is not a trading day) of such initial award, multiplying that number of units by the Initial Fraction (as defined below), and rounding the number of units so produced down to the nearest whole unit. For clarity, the vesting dates of each such Initial Non-Deferred RSU Award and Initial Deferred RSU Award correspond with the vesting dates applicable to the Annual Non-Deferred RSU Awards and Annual Deferred RSU Awards last granted by the Company prior to the date that the new Non-Employee Director is elected or appointed to the Board. The Initial Fraction is the fraction (not greater than one) determined by dividing (1) the number of days in the period beginning with the date that the Non-Employee Director is elected or appointed to the Board through and including the June 30 that coincides with or next follows that date, by (2) the number of calendar days in the calendar year that includes such June 30 (either 365 or 366).
DIRECTOR COMPENSATION – FISCAL YEAR 2023
DIRECTOR COMPENSATION – FISCAL YEAR 2023 The following table presents information regarding the compensation of individuals who were Non-Employee Directors during fiscal year 2023 for their services during that year. The compensation paid to Mr. Maheswaran, who is our current Chief Executive Officer, is presented below under “Executive Compensation,” including in the Summary Compensation Table and the related explanatory tables. Mr. Maheswaran is our only employee director and does not receive any additional compensation for his services as a director.
DIRECTOR COMPENSATION – FISCAL YEAR 2023
| NON-EMPLOYEE DIRECTOR COMPENSATION – FISCAL YEAR 2023 (1) | | | | | | Name | Fees Earned or Paid in Cash ($) | Stock Awards (1) ($) | All Other Compensation ($) | Total ($) | | Rockell N. Hankin, Chairman of the Board | 135,000 | 179,920 | – | 314,920 | | Martin S.J. Burvill | 65,000 | 179,920 | – | 244,920 | | Rodolpho C. Cardenuto | 65,000 | 179,920 | – | 244,920 | | Bruce C. Edwards | 80,000 | 179,920 | – | 259,920 | | Saar Gillai | 65,000 | 179,920 | – | 244,920 | | Ye Jane Li | 65,000 | 179,920 | – | 244,920 | | James T. Lindstrom | 85,000 | 179,920 | – | 264,920 | | Paula LuPriore | 65,000 | 179,920 | – | 244,920 | | Sylvia Summers | 70,000 | 179,920 | – | 249,920 |
DIRECTOR COMPENSATION – FISCAL YEAR 2023
| (1) The amounts and values noted do not necessarily correspond to any actual value that will be realized by a recipient. The stock award amounts reflected in the table, and the grant-date values discussed below in this footnote, are computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 based on assumptions set forth in Note 11 to the financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2023. The awards are valued as of the grant date disregarding any estimate of forfeitures related to service-based vesting conditions. None of our Non-Employee Directors forfeited any Company equity awards in fiscal year 2023. On July 1, 2022, each Non-Employee Director then in office was awarded as his or her Annual Deferred RSU Award 1,731 restricted stock units that settle in cash and as his or her Annual Non-Deferred RSU Award 1,731 restricted stock units that settle in shares. The fair value of each such restricted stock unit on the grant date was $51.97 and the fair value of the awards on the grant date were $89,960 for each Annual Deferred RSU Award and $89,960 for each Annual Non-Deferred RSU Award. |
DIRECTOR COMPENSATION – FISCAL YEAR 2023
The following table presents the number of outstanding and unexercised option awards and number of outstanding stock units held by each of our Non-Employee Directors as of January 29, 2023:
DIRECTOR COMPENSATION – FISCAL YEAR 2023
| | Number of Shares Subject to Outstanding Option Awards at Fiscal Year End | | | Number of Outstanding Restricted Stock Units- Cash Settled At Fiscal Year End | | | Number of Outstanding Restricted Stock Units-Share Settled At Fiscal Year End | | | | Name | Vested | Unvested | Total | Vested | Unvested | Total | Vested | Unvested | Total | | Chairman Hankin | – | – | – | 42,287 | 1,731 | 44,018 | 0 | 1,731 | 1,731 | | Mr. Burvill | – | – | – | 2,425 | 1,731 | 4,156 | 0 | 1,731 | 1,731 | | Mr. Cardenuto | – | – | – | 5,527 | 1,731 | 7,258 | 0 | 1,731 | 1,731 | | Mr. Edwards | – | – | – | 42,287 | 1,731 | 44,018 | 0 | 1,731 | 1,731 | | Mr. Gillai | – | – | – | 5,527 | 1,731 | 7,258 | 0 | 1,731 | 1,731 | | Ms. Li | – | – | – | 12,388 | 1,731 | 14,119 | 0 | 1,731 | 1,731 | | Mr. Lindstrom | – | – | – | 42,287 | 1,731 | 44,018 | 0 | 1,731 | 1,731 | | Ms. LuPriore | – | – | – | 2,425 | 1,731 | 4,156 | 0 | 1,731 | 1,731 | | Ms. Summers | – | – | – | 19,261 | 1,731 | 20,992 | 0 | 1,731 | 1,731 |
FISCAL YEAR 2023 CHIEF EXECUTIVE OFFICER COMPENSATION
FISCAL YEAR 2023 CHIEF EXECUTIVE OFFICER COMPENSATION In March 2019, our Compensation Committee approved a unique equity compensation program for our Chief Executive Officer in recognition of his exceptional contributions to our success as well as the critical role he plays in executing our strategic plan. As described in more detail in the “Fiscal Year 2020 CEO Equity Incentive Awards” section below, the program consists of a mix of time-vesting restricted stock units (“RSUs”) as well as shares that are eligible to vest based upon stock price appreciation (“Absolute Stock Price PSUs”) and our total shareholder return (“TSR”) relative to the SPDR S&P Semiconductor ETF index (“Relative TSR PSUs”). These awards were granted in March 2019 and represent Mr. Maheswaran’s long-term incentive opportunity for fiscal years 2020-2023. Accordingly, Mr. Maheswaran was not granted any new equity awards in fiscal year 2023. Mr. Maheswaran was eligible to earn an annual bonus under the CEO Bonus Plan for fiscal year 2023, which was determined based on three factors:
FISCAL YEAR 2023 NAMED EXECUTIVE OFFICER (OTHER THAN CEO) COMPENSATION
| Compensation Component | Summary of Key Terms | | Annual Bonus Plan | • 50% of the bonus was based on our achievement of non-GAAP operating income relative to plan • 50% of the bonus was determined based on an evaluation of each executive’s individual performance and contributions to strategic objectives that are critical for supporting long-term shareholder value creation | | Relative TSR PSUs | • Between 0% and 200% of the target number of units is eligible to vest based on our relative TSR performance during equally weighted 1-, 2-, and 3-year performance periods • Our TSR performance is measured as a percentile rank against a comparison group of companies included in the S&P Semiconductor Select Industry Index • Our TSR must rank at least 75th percentile for the maximum number of shares to vest | | Time Vesting RSUs | • Shares vest annually over a three-year vesting period measured from the date of grant of the awards |
FISCAL YEAR 2023 NAMED EXECUTIVE OFFICER (OTHER THAN CEO) COMPENSATION
For fiscal year 2023, our NEOs (other than our CEO) earned annual cash incentive payouts between 73.5% and 100% of their target incentive for the year (in the case of our CEO, 25.6% of his target incentive for the year) based on Company performance and their individual performance, as discussed below. In addition, there were three tranches of Relative TSR PSUs which had been granted in fiscal years 2021, 2022, and 2023 for which the performance period ended on January 29, 2023 (the last day of our fiscal year 2023). No portion of these awards vested for the performance periods ending in 2023, and these portions of the awards were forfeited in their entirety.
FISCAL YEAR 2023 NAMED EXECUTIVE OFFICER (OTHER THAN CEO) COMPENSATION
| Grant Year | Performance Period | Percent of Target RSUs Earned | | Fiscal Year 2021 | • Fiscal years 2021 – 2023 (3 years) | 0% | | Fiscal Year 2022 | • Fiscal years 2022 – 2023 (2 years) | 0% | | Fiscal Year 2023 | • Fiscal year 2023 (1 year) | 0% |
FISCAL YEAR 2023 NAMED EXECUTIVE OFFICER (OTHER THAN CEO) COMPENSATION
Our Chief Executive Officer did not hold any of the Relative TSR PSU awards noted above. As discussed in more detail below, Mr. Maheswaran held Relative TSR PSUs that were awarded in March 2019 and covered four different vesting periods (the one-, two-, three- and four-year periods beginning with fiscal year 2020). All of the Relative TSR PSUs subject to this award were forfeited without payment. Mr. Maheswaran also holds Absolute Stock Price PSUs granted in March 2019. No portion of the Absolute Stock Price PSUs vested in fiscal year 2023 and the portion of the award that remains outstanding will only vest if, during any period of 30 consecutive trading days that ends not later than March 5, 2024 and while Mr. Maheswaran is still employed by the Company, the average per-share closing price of the Company’s common stock equals or exceeds $95.00. Our Compensation Committee believes the outcomes of our incentive programs are consistent with a strong pay-for-performance culture, recognizing the target to below target earnings on our short-term incentive program and the award forfeitures under our long-term incentive program.
2022 NONBINDING ADVISORY VOTE RESULTS; STOCKHOLDER ENGAGEMENT
2022 NONBINDING ADVISORY VOTE RESULTS; STOCKHOLDER ENGAGEMENT The Company’s stockholders are provided with an opportunity to cast an annual non-binding advisory vote on the Company’s executive compensation program through a say-on-pay proposal. At the Company’s Annual Meeting of Stockholders held in June 2022, approximately 83% of the votes cast approved the executive compensation for our NEOs as described in our Proxy Statement for that Annual Meeting. After consideration of the positive result of the say-on-pay vote at the Company’s Annual Meeting of Stockholders held in June 2022 and feedback received from stockholders, the Compensation Committee determined that the Company’s executive compensation policies would be similar for fiscal year 2023 to those in effect for fiscal year 2022, and that certain changes to further align pay with performance would be made for fiscal year 2024. As described in more detail below, we modified our fiscal year 2024 Executive Bonus Plan and CEO Bonus Plan in order to emphasize pay-for-performance using objective performance measures and to provide consistency within the management team. Also as described in more detail below, our fiscal year 2024 equity award mix for certain executives included Relative TSR PSUs as well as Performance-Based Units under which vesting is based on our net revenue and non-GAAP operating income over a three year performance. As part of its annual process, the Compensation Committee will continue to reach out to and engage with the Company’s stockholders to seek their feedback or to review their voting guidelines and to consider the outcome of the Company’s say-on-pay proposals when making future compensation decisions for the NEOs.
Core Components of Compensation and Compensation Levels
Core Components of Compensation and Compensation Levels To achieve our executive compensation objectives, we have three primary components to our executive compensation program: (1) base salary; (2) annual cash incentive opportunities; and (3) long-term equity incentive awards. In setting specific base salary, target annual cash incentive and equity award levels for each NEO, the Compensation Committee considers our core executive compensation philosophy and considers and assesses, among other factors it may consider relevant, the following:
Core Components of Compensation and Compensation Levels
| • | The compensation levels at our Peer Group of companies (described below) for comparable positions; |
Core Components of Compensation and Compensation Levels
| • | For equity awards, the executive’s historical total compensation, including prior equity grants, tenure with the Company, the number and value of unvested shares and the timing of vesting of those awards, the expense to the Company for equity grants under applicable accounting standards, equity expense measured as a percentage of non-GAAP operating income, and the potential dilutive effect such grants may have on existing stockholders. |
Core Components of Compensation and Compensation Levels
| | Key Elements of Compensation | | | Element | Purpose | Characteristics | | Annual salary | To attract and retain qualified executives. | Provide a stable source of income and be competitive with the applicable market. | | Short-term annual cash incentives | To attract and retain qualified executives; to motivate and reward achievement of annual business and individual goals and objectives designed to increase stockholder value. | This element involves annual performance-based cash awards. The amount earned (if any) varies based on actual results achieved relative to pre-determined annual target goals and individual performance. | | Long-term equity incentives | To align interests of executives with stockholders; to reward performance over time based on stock price and other specified performance criteria; and to provide an additional retention incentive through multi-year vesting schedules. | Performance-based awards make up a significant component — the amount realized (i.e., the value ultimately received by the recipient) depends on the achievement of performance goals and/or is directly tied to our stock price; awards subject to time-based vesting requirements provide retention value. | | Other compensation and benefits | To provide competitive and customary benefits (e.g., health insurance, life insurance, 401(k) retirement, and deferred compensation plans). | Company sponsored/subsidized benefit plans as provided to the general employee population, as well as Company matching contributions to selected employee contributory plans. |
Distribution of Compensation
Since the fiscal year 2020 equity awards for Mr. Maheswaran were intended as his only long-term incentive opportunity for fiscal years 2020-2023, and Mr. Maheswaran was not granted any new equity awards in fiscal year 2023, one-quarter of the grant date fair value of the fiscal year 2020 equity awards for Maheswaran has been included in presenting the allocation of his fiscal year 2023 compensation in the chart above.
Pay-for-Performance Philosophy
| BEST PRACTICES | | We also believe that stockholder interests are further served by other executive compensation-related practices that we follow. These practices include: ✓ No Minimum Payouts. We do not have minimum payment levels under our Executive Bonus Plan, our CEO Bonus Plan or for our performance-based equity awards. ✓ Long-Term Equity Incentives. All of our equity incentive awards have multi-year vesting and/or performance requirements, with a significant portion of the target value of equity (or 85% of the target value of equity in the case of the last equity awards granted to our CEO) granted to our named executive officers having both time- and performance-vesting requirements. ✓ No Material Perks. We do not provide significant perquisites. ✓ No Tax Gross-Ups. We do not pay taxes on our executives’ behalf through “gross-up” payments (including excise tax gross-up payments in connection with a change in control transaction). ✓ Executive Change in Control Retention Plan Has No Single-Trigger Benefits. Our Executive Change in Control Retention Plan has a double-trigger provision (benefits require both a change in control and termination of employment) rather than a single-trigger provision (under which benefits would be triggered automatically by any change in control). ✓ No Re-Pricing of Stock Options. We prohibit re-pricing of “underwater” stock options (stock options where the exercise price is below the then-current market price of our stock) without stockholder approval. ✓ Executives Subject to Stock Ownership Guidelines. Our executive officers are subject to stock ownership guidelines, under which the executives are expected to acquire and maintain a specified level of equity ownership in the Company. The CEO’s targeted level of ownership is five times his annual base salary, while our other NEOs’ targeted level of ownership is two times their annual base salary. ✓ Equity Award Holding Period Requirements. Our stock ownership guidelines include equity award holding period requirements. If an executive officer’s level of ownership of Company common stock does not satisfy the targeted level under our stock ownership guidelines, the executive officer is expected to hold at least 50% of the net vested shares acquired upon the exercise, payment or vesting of any Company equity award granted to the executive officer after August 17, 2016. ✓ Clawback Policy. The Company maintains a “clawback” policy that allows our Board of Directors or the Compensation Committee to require reimbursement or cancellation of awards or payments made under our cash and equity incentive plans to the Company’s officers in certain circumstances where the amount of the award or payment was determined based on the achievement of financial results that were subsequently the subject of an accounting restatement due to material noncompliance with applicable securities laws. ✓ Anti-Hedging Policy. Our Stock Trading Guidelines prohibit our officers and directors from engaging in hedging transactions in relation to the Company’s stock or equity awards (including unvested equity awards) and from using the Company’s stock as collateral for any margin account or other form of credit arrangement. ✓ Anti-Pledging Policy. Our Stock Trading Guidelines prohibit our officers and directors from pledging any Company stock that they own. ✓ Stockholder Engagement. We seek annual stockholder feedback on our executive compensation program. ✓ Independent Compensation Consultant. Our Compensation Committee retains an independent compensation consultant for independent advice and market data. |
Role of Management, Consultants and Others in Determining Compensation
| • | Reviews peer group information and compensation recommendations and provides feedback regarding the potential impact of proposed compensation decisions (other than regarding himself). |
Role of Committee Advisors
| • | the research, development, and review of our compensation and CEO Bonus peer groups; |
Role of Committee Advisors
| • | the determination of payouts under our performance-based equity awards and CEO bonus plan; and |
Role of Peer Companies
Role of Peer Companies The Compensation Committee considers various factors and criteria when determining annual salary, target annual cash incentive levels and target annual long-term incentive award values for executives, including compensation practices at selected peer companies and industry survey data provided by our compensation consultant. The applicable group of peer companies is selected annually for use as the comparative pool by the Compensation Committee during the course of the fiscal year. The peer company information assists the Compensation Committee and the Company in identifying and understanding how our competitors and industry-comparable companies compensate their executives in applicable compensation elements, and in determining how the Company’s compensation packages compare to industry and market-competitive amounts. In addition to aiding us with compensation related actions and decisions, this peer company evaluation is also informative in relation to providing compensation information that supports potential recruitment and retention of executives by the Company. Because the peer companies do not universally report data for positions comparable to each of our NEOs, the Compensation Committee also reviewed market data from the Radford Global Technology survey. The Compensation Committee refers to the survey data generally and does not focus on any particular company within the survey (other than the peer companies noted below). In selecting our fiscal year 2023 peer group companies, the Compensation Committee focused on publicly-traded companies based in the U.S. that are similar to us in terms of industry, general size and business characteristics, and, like us, focus their business on analog and mixed-signal semiconductors and integrated circuits. Because of consolidation in the industry, there are fewer publicly-traded companies in the semiconductor industry based in the U.S. To increase the number of companies that could potentially be considered as peer companies, the Compensation Committee also considered publicly-traded companies based in the U.S. that are similar to us in terms of the other factors noted above, but are in an expanded industry profile that included manufacturers of equipment used to make semiconductors. Additionally, the Compensation Committee generally sought to limit the group of peer companies to those that have annual revenue between 33% and 300% of the Company’s annual revenue and market capitalization between 25% and 400% of the Company’s market capitalization at the time of the peer selection. The Compensation Committee selected the following companies as the peer group of companies for purposes of its fiscal year 2023 executive compensation determinations (collectively, the “Peer Group”):
Role of Peer Companies
| Ambarella, Inc. | Monolithic Power Systems, Inc. | | Azenta, Inc. (f/k/a Brooks Automation) | Power Integrations, Inc. | | Cirrus Logic, Inc. | Silicon Laboratories Inc. | | Diodes Incorporated | SunPower Corporation | | FormFactor, Inc. | Synaptics, Incorporated | | Lattice Semiconductor Corporation | Universal Display Corporation | | MACOM Technology Solutions Holdings, Inc. | Wolfspeed, Inc. (f/k/a Cree, Inc.) | | MaxLinear, Inc. | |
Role of Peer Companies
Based on the Committee’s review of the industry and the revenue and market capitalization criteria noted above, the Compensation Committee included Azenta, Inc., FormFactor, Inc., SunPower Corporation, and Universal Display in the Peer Group for fiscal year 2023. In addition, Inphi Corporation and Maxim Integrated Products, Inc. were removed from the Peer Group for fiscal year 2023 because they were acquired and ceased to be publicly-traded. Maxim Integrated Products, Inc. was removed from the Peer Group for fiscal year 2023 because its revenues and market capitalization were considered by the Committee to be no longer similar to Semtech.
Executive Bonus Plan
Executive Bonus Plan Annual cash incentive awards are designed to motivate executive officers to achieve certain strategic, operational, and financial goals which can be evaluated on an annual basis. Annual cash incentive goal setting is done as part of the annual fiscal year business planning activity of the Company. Company business goals are established at the beginning of each fiscal year by an interactive process between the Board and management. The end result of this annual business planning process is the Company’s fiscal year Annual Business Plan (“ABP”). As part of the process used by the Compensation Committee in reviewing the fiscal year ABP, the Compensation Committee reviews the goals of each NEO with respect to their business unit or corporate function. The Compensation Committee also reviews the fiscal year ABP in light of available business intelligence, forecasts, and projections with the objective that, in the judgment of the Compensation Committee, superior performance would be required to achieve the key financial objectives established for the program. For the CEO, the Board weighs three factors: (1) non-GAAP Operating Income Performance, (2) net revenue growth (year-over-year), and (3) the evaluation of the CEO’s individual performance by the Board of Directors. The Compensation Committee believes that this approach results in having consistent financial performance targets apply for annual cash incentive purposes from the senior executive level to the middle management and functional professional employees serving the Company. Each executive has a target annual cash incentive potential that is set as a percentage of annual base salary. That target annual cash incentive is set by the Compensation Committee for each executive officer position after considering the factors noted above under “Core Components of Compensation and Compensation Levels” and the target annual cash incentive levels of comparable positions among our Peer Group. There is no specific weighting applied to any of these factors in setting the target annual cash incentive levels and the process ultimately relies on the subjective exercise of the Compensation Committee’s judgment. As noted above, the Compensation Committee sets what it believes to be aggressive annual business plan goals for the cash incentive plan. The approach of the Compensation Committee is to set business plan goals such that, in its judgment, achievement of those goals will result in the Company generally outperforming its peer group of companies. Because the Compensation Committee believes the goals established for the annual bonus plan are rigorous and will be achieved only if the Company performs at a high level, the Compensation Committee sets the target opportunity for the annual cash incentive plan above the median for comparable positions in our Peer Group to provide appropriate incentives for strong performance. Consistent with this approach, annual cash incentives for our NEOs generally paid out below targeted levels for fiscal year 2020, below targeted levels for fiscal year 2021, at or slightly below targeted levels for fiscal year 2022, and at or below targeted levels for fiscal year 2023. Also, as explained in more detail below, even if the Company achieved 100% of the target level of the key financial goal, the program only pays 80% for that portion of the target annual cash incentive. An NEO would receive 100% payout for the key financial goal portion of their target annual cash incentive upon achievement of 105% of plan. Executive Bonus Plan (excluding CEO) Our NEOs (other than our CEO) participate in an annual cash incentive program (referred to herein as the “Executive Bonus Plan”). The Executive Bonus Plan provides each executive with an opportunity to earn an annual cash incentive based on the Company’s performance in relation to certain pre-established annual financial goals as well as the executive’s individual performance. For fiscal year 2023, the target annual cash incentive potential (expressed as a percentage of base salary) for each of our NEOs (other than our CEO) was as follows:
Executive Bonus Plan
| Named Executive Officer | Target Annual Cash Incentive as Percentage of Base Salary | | Mr. Chukwu | 80% | | Mr. Ammann | 80% | | Mr. Beauchamp | 80% | | Mr. Silberstein | 80% | | Mr. Chang | 75% | | Mr. Fulton | 80% |
Executive Bonus Plan
These target incentives for fiscal year 2023 were the same as the fiscal year 2022 level for each NEO, except that the Compensation Committee, taking into consideration the compensation data for similar positions at the Peer Group companies, the Company’s executive compensation philosophy, and internal pay equity considerations, raised Mr. Fulton’s target incentive from 75% to 80% of his base salary. Under the Executive Bonus Plan, each executive’s target annual cash incentive for fiscal year 2023 was scored in two parts. Fifty percent (50%) of the target annual cash incentive potential was based on the Company’s attainment of a key financial goal for the fiscal year (the “Company Performance Portion”) as set by the Compensation Committee. The remaining fifty percent (50%) of the executive’s target annual cash incentive potential was based on the executive’s individual performance for the fiscal year (the “Individual Performance Portion”). The Compensation Committee believed that allocating 50% of the annual target incentive for the NEOs (other than the CEO) to the individual performance component provides it with the flexibility to incentivize and reward achievements that promote the long-term growth and success of the Company, and that the allocation between Company and individual performance creates an appropriate balance between achieving short-term (one year) financial objectives and longer term infrastructure and product expansion goals. The Compensation Committee retains broad discretion to adjust (up or down, including withholding entirely) part or all of a proposed annual cash incentive payment. Company Performance Portion of Fiscal Year 2023 Executive Bonus Plan (excluding CEO) As described above, the financial goals are established by the Compensation Committee for the applicable fiscal year. For fiscal year 2023, the key financial performance goal established by the Compensation Committee was non-GAAP operating income. The Compensation Committee believes non-GAAP operating income is currently the best measure of the Company’s core operating performance, as it reflects the essential results of ongoing base business functions and results without the impact (positive or negative) of extraordinary and non-operational matters. The Compensation Committee further believes that non-GAAP operating income, as the metric used for the fiscal year financial performance goal, focuses performance on the parallel objectives of increasing revenue and controlling operating expenses. The target set for fiscal year 2023 non-GAAP operating income was $272,259,000 which was approximately 34% higher than our non-GAAP operating income achieved for fiscal year 2022 as taken into account in determining fiscal year 2022 bonuses for the NEOs. In the judgment of the Compensation Committee in light of available business intelligence, forecasts and projections at the time it established this goal, superior performance would be required to achieve the goal. The Compensation Committee also established a scoring matrix to determine the percentage of the Company Performance Portion payable based on actual fiscal year 2023 non-GAAP operating income performance against the fiscal year 2023 goal of $272,259,000 as follows:
Executive Bonus Plan
| Non-GAAP Operating Income as a Percentage of the Target | Percentage of Company Performance Portion Payable | | Below 80% of the target | 0% | | 80% of the target | 50% | | 85% of the target | 60% | | 95% of the target | 70% | | 100% of the target | 80% | | 105% of the target | 100% | | 110% of the target | 110% | | 115% of the target | 120% | | 120% of the target | 125% | | 125% of the target | 130% | | 130% of the target | 135% | | 135% of the target | 140% | | 140% of the target | 145% | | 145% of the target or above | 150% |
Executive Bonus Plan
For fiscal year 2023, the non-GAAP operating income achieved was $210,655,000, resulting in no payout for the Company Performance Portion of the Executive Bonus Plan.(2) Individual Performance Portion of Fiscal Year 2023 Executive Bonus Plan (excluding CEO) For each executive’s Individual Performance Portion of the Executive Bonus Plan, the Compensation Committee receives and considers the CEO’s subjective managerial assessment of the executive. The CEO evaluates several key executive performance criteria in his overall evaluation of individual executive performance with no specific weight being applied to any one factor. Matters evaluated include:
Executive Bonus Plan
| (1) performance of the business or functional unit or department the executive is responsible for managing, |
Executive Bonus Plan
| (2) the executive’s contributions to achievement of the Company’s financial and operational goals and strategic objectives, |
Executive Bonus Plan
| (3) the ability of the executive to lead and develop key subordinates, and |
Executive Bonus Plan
| (4) related individualized and function-specific managerial observations and impressions of executive job performance. |
Executive Bonus Plan
Based on the individual performance assessment, an executive may receive from 0% to 200% of the target for the Individual Performance Portion as recommended by the CEO (for NEOs other than himself) and approved by the Compensation Committee. The Individual Performance Portion for each NEO reflects the Compensation Committee’s assessment of the performance of the department or business unit the executive is responsible for, the executive’s individual performance as assessed by the CEO, and the executive’s contributions to the Company’s overall operating performance.
Executive Bonus Plan
| (2) See Exhibit A for a reconciliation of non-GAAP operating income to the most directly comparable GAAP measure. |
Executive Bonus Plan
In assessing the Individual Performance Portion for the NEOs for fiscal year 2023, the Board and the Compensation Committee noted the significant contributions required of the entire executive team to close the Company’s acquisition of Sierra Wireless as well as the contributions of the entire executive team to the Company’s record net sales for the year, record non-GAAP gross margin of 65%, and non-GAAP EPS of $2.80 (up 7% over fiscal year 2022) in the face of global macroeconomic challenges.(3) The following additional NEO achievements in fiscal year 2023 were highlighted in the Individual Performance Portion determinations:
Executive Bonus Plan
| NAMED EXECUTIVE OFFICER | KEY ACCOMPLISHMENTS | | Mr. Chukwu | • Continued to upgrade the Finance organization as well as its processes and systems, enabling us to complete the acquisition of Sierra Wireless • Significant contributions to the Sierra Wireless diligence process and integration, and raising the funds necessary to support our acquisition of Sierra Wireless at a time when there were many uncertainties in the global economy • Drove the divestiture of our High-Reliability Discreet Diodes business • Significant contributions to capital management and tax strategy • His leadership of the Company’s financial performance helped the Company achieve record financial results | | Mr. Ammann | • Significant contributions in negotiating all aspects of the Sierra Wireless acquisition • Negotiated our new credit facility and convertible debt offering • Heavily involved, along with Human Resources, in human capital management and the integration of Sierra Wireless employees • Continued to build and mentor a strong legal team, responsible for every Company legal matter • Drove the legal process associated with the divestiture of our High-Reliability Discreet Diodes business | | Mr. Beauchamp | • Through Mr. Beauchamp’s leadership, the Company’s Signal Integrity Products Group delivered record revenue in fiscal year 2023 and made significant progress on certain critical customer programs • Continued to drive multiple key development programs including our CMOS Tri-Edge platform, our FiberEdge platform, our New Copper Edge platform, our New DSP platform, our 25GPON platform, our 5G Wireless platform, and our LiDar program for Mobileye | | Mr. Silberstein | • Significant contributions in the first half of the year to overcome numerous supply chain challenges to meet demand, and significant contributions in the second half of the year managing the supply chain to adjust to changing demand • Significant contributions to Sierra Wireless integration plans and, following closing of the acquisition, implementation of those plans • His organization executed at a very high level, and continued to improve its processes and systems |
Executive Bonus Plan
| (3) See Exhibit A for a reconciliation of each reconciliation of each of non-GAAP EPS and non-GAAP gross margin to the most directly comparable GAAP measures. |
Executive Bonus Plan
After consideration of the factors and accomplishments described above, the Committee approved the following incentive amounts for the NEOs under the Individual Performance Portion: Mr. Chukwu – $252,840 (147% of the target for the Individual Performance Portion); Mr. Ammann – $249,480 (154% of the target for the Individual Performance Portion); Mr. Beauchamp – $322,425 (200% of the target for the Individual Performance Portion); and Mr. Silberstein – $328,000 (200% of the target for the Individual Performance Portion). Total Fiscal Year 2023 Executive Bonus Plan Payments (excluding CEO) The combination of the Company Performance Portion and the Individual Performance Portion for each NEO resulted in the following annual cash incentive payments to the NEOs for fiscal year 2023 under the Executive Bonus Plan. Messrs. Chang and Fulton were not considered for, and did not earn, payments under the Executive Bonus Plan for fiscal year 2023 because they separated from employment during the fiscal year.
Executive Bonus Plan
| NAMED EXECUTIVE OFFICER | TARGET BONUS | ACHIEVED BONUS | | Mr. Chukwu | $344,000 | $252,840 | | Mr. Ammann | $324,000 | $249,480 | | Mr. Beauchamp (1) | $322,425 | $322,425 | | Mr. Silberstein | $328,000 | $328,000 |
Executive Bonus Plan
| (1) Mr. Beauchamp’s target bonus amount is converted from Canadian dollars (CAD) to U.S. dollars (USD) using a conversion rate of 1 CAD = 0.75122 USD which was the CAD to USD conversion rate as of January 29, 2023. |
Executive Bonus Plan
CEO Bonus Plan The Company maintains an annual cash incentive plan for our CEO (the “CEO Bonus Plan”). The CEO Bonus Plan was established in recognition of the unique role of the CEO and the desire to provide him an incentive to achieve additional goals that are not measured in the Executive Bonus Plan. Under the CEO Bonus Plan, the CEO has a target annual cash incentive potential expressed as a percentage of base salary, which the CEO is eligible to receive based on the achievement of certain financial goals and on the Board’s assessment of the CEO’s overall performance. The CEO Bonus Plan provides that, depending on performance, the CEO’s annual cash incentive payout in any year may range from 0% to 200% of the CEO’s target annual cash incentive potential. For fiscal year 2023, the target annual cash incentive for Mr. Maheswaran was 125% of his annual base salary (or $937,500). The CEO Bonus Plan contained three weighted factors for fiscal year 2023: (1) non-GAAP Operating Income Performance; (2) net revenue growth (year-over-year); and (3) the evaluation of the CEO’s individual performance by the Board. These factors and their weighting are described below.
Executive Bonus Plan
| • | Non-GAAP Operating Income Performance – 45% of the CEO’s annual cash incentive was based on the Company’s attainment of non-GAAP operating income of $272,000,000, which was approximately 34% higher than our non-GAAP operating income achieved for fiscal year 2022 as taken into account in determining the fiscal year 2022 bonus for the CEO. This portion of the CEO Bonus Plan used the same non-GAAP operating income target as under the Company Performance Portion of the Executive Bonus Plan as discussed above. Attainment of this portion of the CEO Bonus Plan is calculated by reference to the following chart indicating the level of Company performance and the corresponding percentage of attainment. |
Executive Bonus Plan
| Non-GAAP Operating Income as a Percentage of the Target | Percentage of Attainment | | Below 73% of the target | 0% | | 73% of the target | 50% | | 85% of the target | 60% | | 95% of the target | 70% | | 100% of the target | 80% | | 105% of the target | 100% | | 110% of the target | 110% | | 115% of the target | 120% | | 120% of the target | 125% | | 125% of the target | 130% | | 130% of the target | 135% | | 135% of the target | 140% | | 140% of the target | 145% | | 145% of the target | 150% | | 150% of the target or better | 200% |
Executive Bonus Plan
| • | Net Revenue Growth – 35% of the CEO’s annual cash incentive was based on net revenue growth goals. Attainment of this portion of the CEO Bonus Plan is calculated using the following formula (with the provision that the resulting percentage cannot be greater than 200% or less than 0%): |
Executive Bonus Plan
| Attainment Percentage | = | 100% multiplied by | (Fiscal year 2023 net revenue minus fiscal year 2022 net revenue) (Net revenue from the 2023 Annual Business Plan minus fiscal year 2022 net revenue) |
Executive Bonus Plan
| • | Board of Directors CEO Performance Evaluation – 20% of the CEO’s annual cash incentive is based on the assessment by the Board (excluding the CEO) of the CEO’s overall performance and leadership. |
Executive Bonus Plan
Evaluation of the CEO’s individual performance by the Board involves, by its nature, subjective judgments made in good faith and takes into consideration such things as strategy development and execution, stockholder relations, and value creation along with other factors. As noted above for the Executive Bonus Plan, the Compensation Committee retains broad discretion (up or down, including withholding entirely) part or all of a proposed annual cash incentive payment to the CEO. Fiscal Year 2023 CEO Bonus Plan Targets and Results Our actual performance against the goals established for fiscal year 2023 under the CEO Bonus Plan are discussed below. Non GAAP Operating Income Performance – The non-GAAP operating income goal for the CEO Bonus Plan is the same as that set forth for the Executive Bonus Plan described above under “Executive Bonus Plan – Company Performance Portion of Fiscal Year 2023 Executive Bonus Plan (excluding CEO).” For fiscal year 2023, the non-GAAP operating income goal was set at $272,259,000 as a part of the ABP process. This goal was approximately 34% higher than our non-GAAP operating income achieved for fiscal year 2022 and taken into account under our fiscal year 2022 CEO Bonus Plan. At the time the fiscal year 2023 non-GAAP operating income goal was set, the Compensation Committee’s judgment was that this goal would be difficult to achieve. For fiscal year 2023, the non-GAAP operating income achieved was $210,655,000, resulting in 77.37% achievement of the goal and approximately a 54% payout for this portion of the CEO Bonus Plan.(4) Net Revenue Growth (Year-over-Year) – The net revenue goal established by the Board in the Company’s fiscal year 2023 ABP was $841,177,000, which reflected revenue growth of approximately 14% above actual fiscal year 2022 net revenue. The Compensation Committee believed that, in the general economic environment at the time the net revenue growth goal was being established, with the global business forecasts available to us, achieving that specified level of net revenue would be challenging. The net revenue taken into account under the CEO Bonus Plan for fiscal year 2023 was $741,532,000, resulting in a less than a 1% payout for this portion of the CEO Bonus Plan. Board of Directors CEO Individual Performance Evaluation – In addition to considering financial results, the Board also evaluated the CEO’s individual performance for fiscal year 2023. Following this review, the Compensation Committee determined that the payout of the individual performance component of the CEO Bonus Plan would be approximately 92% of the target opportunity. This payout reflected the Committee’s assessment of key non-financial accomplishments during the year, including successful completion of our acquisition of Sierra Wireless and continued progress toward long-term strategic objectives despite a global downturn in the second half of fiscal year 2023. Based on the scoring of the individual component of the CEO Bonus Plan described above, Mr. Maheswaran’s annual bonus for fiscal year 2023 would be equal to $400,000, or 42.7% of target for the year. However, the Compensation Committee, taking into consideration input from our Board and the fact that the CEO Bonus Plan achieved a bonus accrual at a lower threshold performance level than under the Executive Bonus Plan, determined to exercise negative discretion and reduced the total CEO bonus to $240,000, or 25.6% of target. This decision reflected the Compensation Committee’s assessment of the different performance thresholds under the CEO and Executive Bonus Plans and the challenges presented by the global slowdown in semiconductor demand, particularly in China, and the impact this would have on the Company’s business operations going into fiscal year 2024.
Equity Incentive Awards
Equity Incentive Awards The Compensation Committee believes that equity incentive awards serve to align the interests of executives with those of the Company’s stockholders, complement annual cash incentives by motivating executives to create and sustain value in the Company, and encourage our executives to avoid taking excessive risks that might have a significant short term or prolonged negative impact on our stock price. The following discussion of equity awards generally applies to the equity awards granted in fiscal year 2023 to our Named Executive Officers other than our CEO. Our CEO did not receive any new equity awards in fiscal year 2023. The equity award vehicles used in fiscal year 2023 for the Named Executive Officers who received new awards were:
Equity Incentive Awards
| • | time-based restricted stock unit awards that vest in three equal annual installments (“Time-Based Units”); and |
Equity Incentive Awards
| • | restricted stock units that vest based on our TSR percentile rank against a comparison group of companies over 1-, 2- and 3-year performance periods (“Performance-Based Units”). |
Equity Incentive Awards
In granting equity awards, the Compensation Committee considers the factors noted above under “Core Components of Compensation and Compensation Levels” and the value of such awards in comparison to
Equity Incentive Awards
| (4) See Exhibit A for a reconciliation of non-GAAP operating income to the most directly comparable GAAP measure. |
Equity Incentive Awards
awards to comparable executives within our Peer Group. There is no specific weighting applied to any of these factors and the process ultimately relies on the Compensation Committee’s judgment. After consideration of these factors, the Compensation Committee determined that our Named Executive Officers who received new awards in fiscal year 2023 would receive Time-Based RSUs and Performance-Based RSUs with the grant date fair value of the awards approximately balanced between the two types of awards. Our equity incentive awards are subject to multi-year vesting. The Time-Based Units and Performance-Based Units awarded to our Named Executive Officers in fiscal year 2023 vest over three years. This multi-year element serves as a significant “holding period” in terms of requiring the executive to retain the underlying equity interest until some future date following the grant date of the award. The Compensation Committee believes that the inclusion of this vesting period component further aligns the long-term interests of the executive with the long-term interests of the Company’s stockholders and functions as a retention incentive for the executive. Restricted Stock Unit Awards Our restricted stock unit awards represent a contingent right to receive one share of our common stock or, in the Compensation Committee’s discretion, the payment of cash for each unit in an amount equal to the fair market value of our common stock. The Compensation Committee believes that grants of restricted stock units are particularly useful to motivate executives to avoid undue risk and to align their interests with those of our stockholders, since our grants of restricted stock unit awards have intrinsic economic value which correlates directly to our stock price. Thus, the value of a restricted stock unit award can go up or down depending on the changes to our stock price over time. While restricted stock unit awards will always have some intrinsic value as long as our stock remains marketable, we believe our executives are motivated to seek to increase the intrinsic value through Company performance that is reflected in favorable and sustainable increases in our stock price. We also believe that actions or business decisions carrying risks that might reduce our stock price are discouraged by the correlation between the intrinsic value of these awards and the growth of our stock price. In addition, the Time-Based Units serve as a retention incentive over the multi-year vesting period. Time-Based Units granted to our NEOs in fiscal year 2023 vest annually over three years from the date of grant, subject to the executive’s continued employment with the Company. Performance-Based Restricted Stock Units The Performance-Based Units granted to the NEOs in fiscal year 2023 are eligible to vest based on the Company’s TSR relative to a comparison group of companies included in the S&P Semiconductor Select Industry Index (the “Index”). The Compensation Committee believed that relative TSR would be an effective measure for evaluating our performance over a sustained time horizon while adjusting for broader market conditions in a volatile industry sector. The availability of an index comprised of a group of comparable semiconductor companies provides a strong benchmark for comparison of our relative TSR performance, and the use of relative TSR as a performance metric supplements the financial metrics we use to evaluate performance under our bonus plan. The Index was selected for purposes of this relative measure because of its focus on the semiconductor industry. A target number of Performance-Based Units is covered by each award, with one-third of the target number of units allocated to each of the three performance periods covered by the award (with the first period consisting of our 2023 fiscal year, the second period consisting of our 2023 and 2024 fiscal years, and the third period consisting of our 2023, 2024 and 2025 fiscal years). Between 0% and 200% of the target number of units allocated to each of those periods is eligible to vest based on our relative TSR performance through the end of that period determined as follows:
Equity Incentive Awards
| TSR Percentile Rank | Award Multiplier | | 75th or greater | 200% | | 50th | 100% | | 25th | 50% | | Less than 25th | 0% |
Equity Incentive Awards
The TSR Percentile Rank for a performance period is the percentile ranking of our TSR for that performance period as compared to the TSRs achieved by the companies comprising the Comparison Group for that performance period. The “Comparison Group” means each of the companies included in the Index as of the first day of the performance period that remains a publicly traded company through the last day of the performance period, with any company included in the Index as of the first day of the performance period that does not remain a publicly traded company through the last day of the performance period as a result of such company’s bankruptcy, insolvency or liquidation included but its TSR for that performance period is deemed to be -100%. For these purposes, TSR for both the Company and the Comparison Group companies is calculated based on the average closing prices over the 30-trading-day period preceding the performance period and the 30-trading day period ending with the last day of the performance period and assuming in each case that all dividends issued over the performance period are reinvested as of the payment date. The Award Multiplier for a performance period determined based on the TSR Percentile Rank for that performance period is applied to the target number of shares allocated to the applicable performance period. If the TSR Percentile Rank falls between two levels in the table above, the Award Multiplier will be determined using straight line interpolation between those levels. In addition, if the Company’s TSR for a particular performance period is negative, the Award Multiplier for that performance period is capped at 100%. Fiscal Year 2023 Annual Equity Incentive Awards For fiscal year 2023, the Compensation Committee granted our NEOs (with the exception of the CEO, who did not receive new equity awards in fiscal year 2023) annual Time-Based Units and Performance-Based Units covering the number of shares of our common stock set forth in the following table (with PSUs shown at the target number of units). As noted above, the Compensation Committee believed that this mix of awards was consistent with our performance-based philosophy as a substantial portion of each NEO’s total annual equity awards was performance-based.
Equity Incentive Awards
| Executive | Time-Based Units | Performance-Based Units (Target) | | Mr. Chukwu | 17,572 | 14,377 | | Mr. Ammann | 13,578 | 12,780 | | Mr. Beauchamp | 15,974 | 14,377 | | Mr. Silberstein | 15,974 | 13,578 | | Mr. Chang | 11,981 | 11,182 | | Mr. Fulton | 15,974 | 13,578 |
Equity Incentive Awards
Vesting of Fiscal Year 2023, 2022 and 2021 Performance-Based Awards As noted above, the first performance period for the fiscal year 2023 Performance-Based Units awarded to our NEOs consisted of our 2023 fiscal year, the second performance period for the fiscal year 2022 Performance-Based Units awarded to our NEOs consisted of our 2022 and 2023 fiscal years, and the third performance period for the fiscal year 2021 Performance-Based Units awarded to our NEOs consisted of our 2021, 2022 and 2023 fiscal years. Our Performance-Based Units granted in fiscal year 2022 are similar to our Performance-Based Units granted in fiscal year 2023. Our Performance-Based Units granted in fiscal year 2021 are also similar to our Performance-Based Units granted in fiscal year 2023, except that performance-based vesting for the Performance-Based Units granted in fiscal year 2021 is measured using the chart below based on the Company’s TSR for the applicable performance period relative to the TSR of the SPDR S&P Semiconductor ETF for that performance period. A target number of Performance-Based Units is covered by each award, with one-third of the target number of units allocated to each of the three performance periods covered by the award. Between 0% and 200% of the target number of units allocated to each of those periods is eligible to vest based on our relative TSR performance through the end of that period determined as follows:
Equity Incentive Awards
| Relative TSR Percentage | Award Multiplier | | +50% or greater | 200% | | +25% | 150% | | 0% | 100% | | -30% | 25% | | Less than -30% | 0% |
Equity Incentive Awards
The Relative TSR Percentage for a performance period is equal to our TSR for that period minus the TSR of the SPDR S&P Semiconductor ETF for that performance period. The Award Multiplier is applied to the target number of shares allocated to the applicable performance period. If the Relative TSR Percentage falls between two levels in the table above, the Award Multiplier will be determined using straight line interpolation between those levels. In addition, if the Company’s TSR for a particular performance period is negative, the Award Multiplier for that performance period is capped at 100%. All of the Performance-Based Units allocated to performance periods ending in fiscal year 2023 were forfeited in their entirety. Our TSR Percentile Rank (or Relative TSR Percentage as to the Performance-Based Units granted in fiscal year 2021) and Award Multiplier for the applicable performance periods are shown in the table below.
Equity Incentive Awards
| Year of Grant | Measurement Period | % of Target Award Tied to Period | Semtech TSR | Index TSR | Relative TSR Percentage / TSR Rank (as applicable) | Award Multiplier (% of Target Units Vesting) | | Fiscal Year 2021 | 3 years Ending FYE23 | 33 1/3% | -42.65% | 67.76% | -110.40% | 0.00% | | Fiscal Year 2022 | 2 years Ending FYE23 | 33 1/3% | -59.86% | — | 34 out of 34 | 0.00% | | Fiscal Year 2023 | 1 year Ending FYE23 | 33 1/3% | -63.22% | — | 38 out of 39 | 0.00% |
Equity Incentive Awards
The remaining one-third of the target number of Performance-Based Units granted in fiscal year 2022 remain outstanding and eligible to vest based on our relative TSR performance during the three-year performance period consisting of our fiscal years 2022-2024. The remaining two-thirds of the target number of Performance-Based Units granted in fiscal year 2023 remain outstanding and eligible to vest based on our relative TSR performance during two- and three-year performance periods consisting of our fiscal years 2023-2024 and our fiscal years 2023-2025, respectively. Fiscal Year 2020 CEO Equity Incentive Awards and Absolute Stock Price PSUs In March 2019, our Compensation Committee approved a unique equity compensation program for our Chief Executive Officer in recognition of his exceptional contributions to our success as well as the critical role he plays in executing our strategic plan. As described in more detail below, the program was heavily weighted to performance-based equity. The Compensation Committee intended that the award represented Mr. Maheswaran’s entire long-term equity incentive award opportunity for fiscal years 2020-2023 and, in fact, Mr. Maheswaran was not granted any other equity awards in fiscal years 2020-2023. The March 2019 award granted to Mr. Maheswaran consisted of the following three distinct components:
Equity Incentive Awards
| • | RSUs that vested annually over a four-year vesting period measured from the date of grant of the awards. |
Equity Incentive Awards
| • | Performance-Based Units that followed the design of the Performance-Based Units awarded to our NEOs in fiscal year 2020, except that the vesting period of the award was extended from three years to four years (“Relative TSR PSUs”). These Performance-Based Units were eligible to vest based on the Company’s TSR relative to the TSR of the SPDR S&P Semiconductor ETF (NYSE:XSD), applying the same vesting schedule and methodology as applied to the Performance-Based Units granted to our NEOs in fiscal year 2020, except that the award consisted of four performance periods (with one-quarter of the target number of units covered by the award allocated to each of the four periods, and with the first period consisting of our 2020 fiscal year, the second period consisting of our 2020 and 2021 fiscal years, the third period consisting of our 2020, 2021 and 2022 fiscal years, and the fourth period consisting of our 2020, 2021, 2022, and 2023 fiscal years). Between 0% and 200% of the target number of units allocated to each of those periods was eligible to vest based on our relative TSR performance through the end of that period. |
Equity Incentive Awards
| • | The other type of Performance-Based Unit awarded to Mr. Maheswaran in fiscal year 2020 was subject to the attainment of pre-established absolute stock price levels (“Absolute Stock Price PSUs”). Specifically, this award was eligible to vest during the period commencing March 5, 2019 and ending March 5, 2024 (the “Performance Period”) as follows: 30% of the restricted stock units covered by the award would vest if, during any period of 30 consecutive trading days that commences and ends during the Performance Period, the average per-share closing price of the Company’s common stock equals or exceeds $71.00; and the award will vest in full if, during any period of 30 consecutive trading days that commences and ends during the Performance Period, the average per-share closing price of the Company’s common stock equals or exceeds $95.00. If a change in control of the Company occurs during the Performance Period: 30% of the award would vest if the $71.00 vesting level under the awards was not previously attained and the Company’s stockholders become entitled to receive per-share consideration in the transaction having a value equal to or greater than $71.00; the awards will vest in full if the Company’s stockholders become entitled to receive per-share consideration in the transaction having a value equal to or greater than $95.00; and there will be proportionate vesting (between 30% and 100% of the unvested portion of the award) if the Company’s stockholders become entitled to receive per-share consideration in the transaction having a value between $71.00 and $95.00. |
Equity Incentive Awards
All four tranches of the Relative TSR PSUs awarded to Mr. Maheswaran in March 2019 (corresponding to the fiscal year 2020 measurement period, the fiscal years 2020 and 2021 measurement period, the fiscal years 2020, 2021 and 2022 measurement period, and the fiscal years 2020, 2021, 2022 and 2023 measurement period) have been forfeited because the threshold level of relative TSR performance required in order for any portion of these tranches to vest was not achieved. The Absolute Stock Price PSUs corresponding to the $71.00 vesting level (30% of the total Absolute Stock Price PSUs awarded) vested on January 8, 2021 based on the average closing prices of the Company’s common stock for the period of 30 consecutive trading days ending on that date ($71.0013). The Absolute Stock Price PSUs corresponding to the $95.00 vesting level have not vested and remain outstanding. We awarded Absolute Stock Price PSUs to certain of our executive officers (other than Mr. Maheswaran) in fiscal year 2022. These awards are similar to the Absolute Stock Price PSUs awarded to Mr. Maheswaran in fiscal year 2020, as discussed above, except that the Absolute Stock Price PSUs awarded to our other executive officers in fiscal year 2022 do not have vesting goals tied to achievement of a $71.00 stock value. The Absolute Stock Price PSUs awarded in fiscal year 2022 are entirely performance-based and vest if, during any period of 30 consecutive trading days that commences and ends during a performance period ending March 5, 2024, the average per-share closing price of the Company’s common stock equals or exceeds $95.00. If a change in control of the Company occurs during the performance period, the Absolute Stock Price PSUs will vest in full if the Company’s stockholders become entitled to receive per-share consideration in the transaction having a value equal to or greater than $95.00, and there will be proportionate vesting (between 0% and 100%) if the Company’s stockholders become entitled to receive per-share consideration in the transaction having a value between $71.00 and $95.00. No portion of these Absolute Stock Price PSUs has vested. Fiscal Year 2024 Equity Awards As mentioned above, our equity awards for our NEOs in fiscal year 2024 consist of three types of awards: Time-Based Units, Relative TSR PSUs, and Performance-Based Units that include vesting requirements based on financial measures. The terms of the Time-Based Units awarded to our NEOs in fiscal year 2024 are similar to those awarded to our NEOs in fiscal year 2023, with vesting generally scheduled to occur annually over three years from the date of grant. The Performance-Based Units granted to our NEOs in fiscal year 2024 include Performance-Based Units that are similar to the Performance-Based Units granted to our NEOs in fiscal year 2023, under which vesting is based on our TSR relative to a comparison group of companies over 1-, 2- and 3-year performance periods each starting with the year of grant, except that the comparison group of companies used for purposes of the fiscal year 2024 awards is based on the companies included in the Russell 3000 index (“Fiscal 2024 Relative TSR PSUs”). The Performance-Based Units granted to our NEOs in fiscal year 2024 also include Performance-Based Units under which vesting is based on our net revenue and non-GAAP operating income over a three year performance period (“Fiscal 2024 Financial Measure PSUs”). One-third of the “target” number of Fiscal 2024 Financial Measure PSUs subject to each award is allocated to each of fiscal years 2024, 2025 and 2026. Of the Performance-Based Units allocated to each fiscal year, the vesting of half is based on our net revenue performance for that fiscal year and vesting of the other half is based on our non-GAAP operating income for that fiscal year. Between 0% and 200% of the Performance-Based Units allocated to a particular financial measure for a fiscal year may become eligible to vest based on actual performance. In March 2023, the Compensation Committee granted our NEOs (other than, as discussed below, Mr. Maheswaran, and other than Messrs. Chang and Fulton who were not employed with us at the time of grant) the following number of Time-Based Units, Fiscal 2024 Relative TSR PSUs (shown at the targeted level of vesting), and Fiscal 2024 Financial Measure PSUs (shown at the targeted level of vesting) for fiscal year 2024:
Equity Incentive Awards
| Executive | Time-Based Units | Fiscal 2024 Relative TSR PSUs (Target) | Fiscal 2024 Financial Measure PSUs (Target) | | Mr. Maheswaran | – | – | – | | Mr. Chukwu | 32,770 | 13,406 | 13,406 | | Mr. Ammann | 27,308 | 11,171 | 11,171 | | Mr. Beauchamp | 27,308 | 11,171 | 11,171 | | Mr. Silberstein | 36,411 | 14,895 | 14,895 |
Equity Incentive Awards
Mr. Maheswaran did not receive regular annual equity awards in March 2023 in light of his retirement announcement, but received a Time-Based RSU award scheduled to vest over a transition period, all as discussed in more detail below.
Other Compensation
Other Compensation Perquisites and Benefits During fiscal year 2023, we did not provide any significant perquisites to our NEOs. The Company provides our NEOs with certain benefits on the same terms made available to our other employees generally, including participation in our 401(k) retirement plan, health care plans, life insurance plans, and other welfare benefit programs. The Company also reimburses each NEO for the cost of an annual physical exam. The Compensation Committee believes that this benefit helps protect the health of the executive team at a relatively small cost to the Company. In addition to the standard benefits offered to all of our employees generally, our U.S.-based executives and other employees who are specifically approved by the Compensation Committee are eligible to participate in our Executive Nonqualified Excess Plan, as amended and restated (our “Deferred Compensation Plan”), which allows our executives to elect to defer annual salary and/or annual cash incentive income. The Deferred Compensation Plan is unfunded and unsecured; however, the Company maintains life insurance policies on the lives of certain current and former participants in the plan, the benefit and accrued value of which is intended to cover a majority of the plan’s accrued liability. For fiscal year 2023, the Company matched, on a dollar-for-dollar basis, up to the first 10% of employee base salary contributions for our CEO, our Chief Financial Officer and our Chief Legal Officer, up to the first 8% for participants at the Vice President level, and up to the first 5% for all other participants. The Compensation Committee believes that providing the NEOs with this deferred compensation opportunity is a cost-effective way to permit the executives to receive the tax benefits associated with delaying income tax on the compensation deferred, even though the related deduction for the Company is also deferred. For more information on our Deferred Compensation Plan, please see “Nonqualified Deferred Compensation Plan-Fiscal Year 2023” in this Proxy Statement. Severance; CEO Offer Letter The Compensation Committee evaluates the level of severance benefits, if any, to be provided to an NEO on a case-by-case basis. Mr. Maheswaran was our only NEO covered by an agreement with the Company that provided for severance benefits outside the context of a change in control transaction. In November 2019, the Company entered into an amended and restated offer letter with Mr. Maheswaran (the “Offer Letter”). The Compensation Committee determined that continuing to provide Mr. Maheswaran with certain severance and other protections under the Offer Letter was appropriate in light of his position within the Company, his overall compensation package and the post-employment restrictions he would be subject to after he no longer works for the Company. The Offer Letter has now been replaced by Mr. Maheswaran’s Transition and Retirement Agreement, described below. The Offer Letter provided for a five-year term commencing November 20, 2019, which would automatically be extended for additional one-year periods thereafter unless either party gave written notice at least 90 days in advance that the term will not be extended. Under the Offer Letter, Mr. Maheswaran would continue to serve as the Company’s President and Chief Executive Officer, would be nominated for re-election to the Board in connection with any expiration of his term in office as a member of the Board (unless such nomination is prohibited by law or an applicable listing standard), would receive an annual base salary of not less than $620,000 (subject to annual review by the Compensation Committee, but the Compensation Committee could not decrease such annual base salary rate), would receive Company equity awards in the discretion of the Compensation Committee, and would participate in the Company’s Chief Executive Officer Bonus Plan with an annual target bonus of not less than 125% of his base salary. Mr. Maheswaran was also entitled to participate in the Company’s benefit plans made generally available to the Company’s salaried employees and to participate in the Deferred Compensation Plan, with the Company matching the first 10% of his contributions to that plan. Pursuant to the terms of the Offer Letter, in the event Mr. Maheswaran’s employment with us terminated for reasons other than death, disability or “cause,” or if he terminated his employment for “good reason” within 90 days of an event giving rise to good reason, he would be entitled to 12 months of his annual salary, up to 12 months continued welfare benefits (medical, dental, life and long-term disability insurance), and, except as otherwise provided in the applicable award agreement, 12 months accelerated vesting of any outstanding and unvested equity awards that are subject only to time-based vesting requirements as of the severance date. The terms “cause” and “good reason” are defined in the Offer Letter. These severance benefits would be contingent on Mr. Maheswaran’s execution of a release agreement which, among other things, releases the Company from liability relating to his employment and the termination of his employment, and Mr. Maheswaran’s agreement and compliance with a one-year post-termination non-competition covenant (which restricts Mr. Maheswaran from being employed by one of the members of the Company’s Peer Group if such company cannot reasonably satisfy the Company that it will preclude and prevent disclosure of the Company’s confidential information). Mr. Maheswaran’s Retirement On March 16, 2023, Mr. Maheswaran announced that he intends to retire as the Company’s President and Chief Executive Officer. In connection with his retirement, the Company entered into a Transition and Retirement Agreement with Mr. Maheswaran on March 14, 2023 (the “Transition and Retirement Agreement”). Pursuant to the Transition and Retirement Agreement, Mr. Maheswaran has agreed to provide transition support to the Company for a period of 18 months. Mr. Maheswaran will continue to serve as the Company’s Chief Executive Officer until the earlier of September 14, 2024 or a date determined by the Board. At such time, Mr. Maheswaran’s retirement as an officer and employee of the Company will be effective and he will also retire as a member of the Board. Following his retirement and through September 14, 2024, Mr. Maheswaran will continue to provide transition support to the Company as a consultant. Mr. Maheswaran will continue to be paid his base salary (at the current rate of $750,000 annually) through his retirement date and, pursuant to the Transition and Retirement Agreement, Mr. Maheswaran will be eligible to receive a target annual bonus for fiscal year 2024 ($937,500), pro-rated for the portion of fiscal year 2024 that he serves as the Company’s Chief Executive Officer. No cash compensation is payable for the period of time Mr. Maheswaran provides consulting services under the Transition and Retirement Agreement. The Transition and Retirement Agreement also includes a general release of any claims by Mr. Maheswaran.
Change in Control Benefits
Change in Control Benefits Equity Plan Change in Control Benefits Under the terms of our stockholder approved equity incentive plans, if there is a change in control of the Company and the successor entity does not assume the obligation for the stock options or other equity-based awards, or the awards do not otherwise remain outstanding after the transaction, then the unvested stock options and other equity based awards (other than Performance-Based Units, described below) generally will become fully vested as a result of the transaction. If the successor entity does assume the obligation for stock options or other equity-based awards in the change in control transaction, then in the event of a loss of employment within 12 months following a “change in control,” due to termination of employment by the Company without “cause” or a “constructive termination” of the participant (as those terms are defined in the applicable plan), certain then unvested stock options and other equity based awards, but not including Performance-Based Units granted under the Company’s 2008 Long-Term Equity Incentive Plan (the “2008 Plan”), its 2013 Long-Term Equity Incentive Plan (the “2013 Plan”) and its 2017 Long-Term Equity Incentive Plan (the “2017 Plan”), will become fully vested. As to our Performance-Based Units awarded in fiscal years 2020 through 2023, in the event of a change in control in which the Company’s stock ceases to be publicly-traded, the number of units subject to any portion of the award as to which the performance period did not end before the closing of the change in control will become “fixed” based on the Company’s TSR relative to the TSR of the Index (or the Comparison Group, as applicable) for a shortened performance period ending with the change in control. In such circumstances, a prorated portion (based on the portion of the performance period elapsed before the transaction) of the number of units that become fixed on the change in control will accelerate and be paid upon the closing of the transaction. The balance of the units will remain subject to the time-based vesting condition applicable to the awards through the end of the original applicable performance periods (unless the awards were to be terminated in connection with the transaction and not assumed by an acquiring company, in which case these units would also vest on the closing of the transaction). If the executive’s employment terminates in circumstances on or after a change in control that entitle the executive to severance benefits under the Semtech Corporation Executive Change in Control Retention Plan described below or the executive’s offer letter, the time-based vesting conditions applicable to the award would no longer apply and the remaining units subject to the award (after giving effect to the performance measurement on the change in control) would accelerate and become payable on the separation. The Absolute Stock Price PSUs will terminate in the event of a change in control in which the Company’s stock ceases to be publicly-traded to the extent the awards do not vest, as described above, based on the per-share consideration that the Company’s stockholders become entitled to receive in the transaction. Deferred Compensation Plan Our Deferred Compensation Plan provides for vesting of account balances attributable to Company matching contributions on involuntary termination of employment within 18 months of a change in control. Executive Change in Control Retention Plan The Compensation Committee believes that providing severance protections to our executive officers should a change in control occur is in the best interests of the Company and our stockholders in order to provide additional retention incentives to the selected executive officers and to encourage them to remain employed with the Company during an important time when their prospects for continued employment following a change in control transaction are often uncertain. Accordingly, we maintain the Semtech Corporation Executive Change in Control Retention Plan (the “CIC Plan”). Mr. Maheswaran’s Offer Letter includes severance protections, discussed above. Accordingly, he does not participate in the CIC Plan. Mr. Beauchamp has an individual letter agreement and also does not participate in the CIC Plan. The CIC Plan provides for certain severance benefits if the participant’s employment with the Company terminates in certain circumstances in connection with a “change in control” (as defined in the CIC Plan). If the CIC Plan participant’s employment is terminated by the Company other than for “cause” (as defined in the CIC Plan) or by the participant for “good reason” (as such terms are defined in the CIC Plan), in either case during a “change in control window,” the participant will be entitled to receive certain severance benefits. For these purposes, a “change in control window” is defined as the period (1) beginning on the earlier of (a) 90 days prior to a change in control or (b) the execution of a definitive agreement to effect a transaction that, if consummated in accordance with the proposed terms, would constitute a change in control (provided that the transaction with the party to the definitive agreement is actually consummated within one year following the execution of such definitive agreement and such transaction actually constitutes a change in control), and (2) ending on the second anniversary of such change in control. A more detailed description and discussion of the CIC Plan is found below in this Proxy Statement in the report on Executive Compensation, under the heading “Potential Payments on Termination or Change in Control.” The CIC Plan does not provide for automatic accelerated vesting of equity awards upon a change in control transaction. The CIC Plan does not include a tax “gross-up” provision. Instead, if any payment or benefit received by a participant in the CIC Plan in connection with a change in control of the Company would have been subject to any excise taxes imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Excise Tax”), such payments and benefits will either be reduced (but not below zero) as necessary to avoid the participant incurring any such Excise Tax or be paid in full (with the participant paying any Excise Tax due), whichever places the participant in the best after-tax position (taking into account federal, state and local income taxes and the Excise Tax). A more detailed description of the CIC Plan is found below in this Proxy Statement in the report on Executive Compensation, under the heading “Potential Payments on Termination or Change in Control.” CEO Change in Control Arrangements
Change in Control Benefits
As noted above, Mr. Maheswaran does not participate in the CIC Plan. Severance protections for Mr. Maheswaran were provided in his Offer Letter. Mr. Maheswaran’s Offer Letter provided that he would be entitled to certain enhanced severance benefits if, within a “change in control window” (which is defined the same as described for the CIC Plan above), his employment with us was terminated for reasons other than death, disability or “cause,” or if he had terminated his employment for “good reason” within 90 days of an event giving rise to good reason. In the event the employment of Mr. Maheswaran was terminated under such circumstances, he would have been entitled to cash severance benefits equal to two times his annual salary, two times his target annual cash incentive, a prorated annual cash incentive for the fiscal year of the termination, up to 24 months continued welfare benefits (medical, dental, life and long-term disability insurance), accelerated vesting of his unvested Deferred Compensation Plan balance, and except as otherwise provided in the applicable award agreement, full accelerated vesting of any outstanding and unvested equity awards that are subject only to time-based vesting requirements as of the severance date. As noted above, Mr. Maheswaran’s Transition and Retirement Agreement provides that he will not be entitled to any severance under his Offer Letter or under any Company severance plan or policy. These severance benefits are contingent on Mr. Maheswaran’s execution of a release agreement which, among other things, releases the Company from liability relating to his employment and the termination of his employment. In addition, Mr. Maheswaran’s Offer Letter provides that, except as provided in the applicable award agreement, upon a change in control of the Company, all outstanding and unvested performance vesting equity awards shall be deemed to meet the target level of performance for any open performance period, and will remain subject to any time-based vesting requirements (subject to accelerated vesting upon certain terminations of employment as provided above). We believe it is appropriate to provide these protections for Mr. Maheswaran for the same reasons we provide benefits under the CIC Plan to the other NEOs as described above. As described above, Mr. Maheswaran’s Offer Letter also provides severance protections should his employment be terminated in certain circumstances outside of a change in control window. Mr. Maheswaran is not entitled to a tax gross-up for any Excise Tax. Instead, Mr. Maheswaran’s payments and benefits payable in connection with a change in control will either be reduced, but not below zero, as necessary to avoid Mr. Maheswaran incurring any such Excise Tax or be paid in full, with Mr. Maheswaran paying any Excise Tax due, whichever places Mr. Maheswaran in the better after-tax position. For more information on our severance and change in control arrangements with the NEOs, including a more detailed description of Mr. Maheswaran’s Offer Letter, please see “Potential Payments on Termination or Change in Control” below in this Proxy Statement. Separation Agreements with Messrs. Chang and Fulton We terminated Mr. Chang’s employment, and Mr. Fulton’s employment, effective as of September 8, 2022. In connection with their respective terminations from employment, we negotiated and entered into a Separation and General Release Agreement with each of Messrs. Chang and Fulton (the “Change Separation Agreement” and the “Fulton Separation Agreement”, respectively). The Separation and General Release Agreements are described in the “Potential Payments on Termination or Change in Control” section below.
Description of Employment Arrangements
Description of Employment Arrangements All of our NEOs are employed on an at-will basis and none of our NEOs are employed under the terms of an employment agreement for a fixed term. We do, however, issue written offer letters from time to time to prospective executives that set forth their initial terms of compensation and other material terms including, in the case of Mr. Maheswaran, post-termination severance obligations, in the case of Mr. Beauchamp, acceleration of certain equity awards upon a change in control of the Company, and we provide certain severance protections under the CIC Plan, as described above under “Other Compensation – Severance.”
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
| SUMMARY COMPENSATION TABLE – FISCAL YEARS 2021-2023 | | | | | | | | | | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards (1) ($) | Option Awards (1) ($) | Non-Equity Incentive Plan Compensation (2) ($) | All Other Compensation (3) ($) | Total ($) | | Mohan R. Maheswaran (4) | 2023 | 741,654 | – | – | – | 240,000 | 82,565 | 1,064,219 | | President and Chief Executive Officer | 2022 | 676,423 | – | – | – | 915,272 | 75,483 | 1,667,178 | | | 2021 | 647,000 | – | – | – | 799,378 | 73,575 | 1,519,953 | | Emeka N. Chukwu | 2023 | 430,000 | – | 2,070,702 | – | 252,840 | 50,520 | 2,804,062 | | Executive Vice President and Chief Financial Officer | 2022 | 427,616 | – | 2,284,527 | – | 337,980 | 50,531 | 3,100,654 | | | 2021 | 410,000 | – | 1,487,363 | – | 269,124 | 50,088 | 2,216,575 | | Charles B. Ammann (5) | 2023 | 405,000 | – | 1,712,846 | – | 249,480 | 50,413 | 2,417,739 | | Executive Vice President, Chief Legal Officer and Secretary | | | | | | | | | | Gary M. Beauchamp (6) | 2023 | 403,095 | – | 1,970,668 | – | 322,425 | 30,996 | 2,727,184 | | Executive Vice President and General Manager, Signal Integrity Products Group | 2022 | 417,550 | – | 1,877,010 | – | 334,195 | 25,699 | 2,654,454 | | | 2021 | 397,203 | – | 1,205,972 | – | 304,489 | 33,474 | 1,941,138 | | Asaf Silberstein | 2023 | 410,000 | – | 1,916,714 | – | 328,000 | 43,344 | 2,698,058 | | Executive Vice President and Chief Operating Officer | 2022 | 408,808 | – | 1,705,408 | – | 327,180 | 42,141 | 2,483,537 | | | 2021 | 400,001 | – | 1,125,584 | – | 265,760 | 41,263 | 1,832,608 | | Chris Chang (5)(7) | 2023 | 237,981 | – | 1,504,990 | – | – | 696,025 | 2,438,996 | | Senior Vice President, Corporate Marketing and Sales, Asia Pacific | | | | | | | | | | Alistair W. Fulton (7) | 2023 | 254,635 | – | 1,916,714 | – | – | 792,754 | 2,964,103 | | Senior VP and General Manager, Wireless and Sensing Products Group | 2022 | 380,827 | – | 1,877,010 | – | 288,028 | 39,944 | 2,585,809 |
Grants of Plan-Based Awards in Fiscal Year 2023
Grants of Plan-Based Awards in Fiscal Year 2023 The following table presents information regarding the equity and non-equity incentive awards granted to the NEOs during fiscal year 2023. The material terms of each award are described below under “Description of Fiscal Year 2023 Plan-Based Awards.”
GRANTS OF PLAN-BASED AWARDS – FISCAL YEAR 2023 (1)
GRANTS OF PLAN-BASED AWARDS – FISCAL YEAR 2023 (1)
GRANTS OF PLAN-BASED AWARDS – FISCAL YEAR 2023 (1)
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (2) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (3) | | | All Other Stock Awards: Number of Shares of Stock or Units (4) (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards (5) ($) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Mr. Maheswaran | | | | | | | | | | | | | Annual Incentive | N/A | 257,813 | 937,500 | 1,875,000 | – | – | – | – | – | – | – | | RSU | N/A | – | – | – | – | – | – | – | – | – | – | | PSU | N/A | – | – | – | – | – | – | – | – | – | – | | Mr. Chukwu | | | | | | | | | | | | | Annual Incentive | N/A | 86,000 | 344,000 | 602,000 | – | – | – | – | – | – | – | | RSU | 3/8/2022 | – | – | – | – | – | – | 17,572 | – | – | 1,100,007 | | PSU | 3/8/2022 | – | – | – | – | 14,377 | 28,754 | – | – | – | 970,695 | | Mr. Ammann | | | | | | | | | | | | | Annual Incentive | N/A | 81,000 | 324,000 | 567,000 | – | – | – | – | – | – | – | | RSU | 3/8/2022 | – | – | – | – | – | – | 13,578 | – | – | 849,983 | | PSU | 3/8/2022 | – | – | – | – | 12,780 | 25,560 | – | – | – | 862,863 | | Mr. Beauchamp | | | | | | | | | | | | | Annual Incentive | N/A | 78,923 | 315,693 | 552,462 | – | – | – | – | – | – | – | | RSU | 3/8/2022 | – | – | – | – | – | – | 15,974 | – | – | 999,972 | | PSU | 3/8/2022 | – | – | – | – | 14,377 | 28,754 | – | – | – | 970,695 | | Mr. Silberstein | | | | | | | | | | | | | Annual Incentive | N/A | 82,000 | 328,000 | 574,000 | – | – | – | – | – | – | – | | RSU | 3/8/2022 | – | – | – | – | – | – | 15,974 | – | – | 999,972 | | PSU | 3/8/2022 | – | – | – | – | 13,578 | 27,156 | – | – | – | 916,741 | | Mr. Chang | | | | | | | | | | | | | Annual Incentive | N/A | 72,188 | 288,750 | 505,313 | – | – | – | – | – | – | – | | RSU | 3/8/2022 | – | – | – | – | – | – | 11,981 | – | – | 750,011 | | PSU | 3/8/2022 | – | – | – | – | 11,182 | 22,364 | – | – | – | 754,971 | | Mr. Fulton | | | | | | | | | | | | | Annual Incentive | N/A | 72,188 | 288,750 | 505,313 | – | – | – | – | – | – | – | | RSU | 3/8/2022 | – | – | – | – | – | – | 15,974 | – | – | 999,972 | | PSU | 3/8/2022 | – | – | – | – | 13,578 | 27,156 | – | – | – | 916,741 |
GRANTS OF PLAN-BASED AWARDS – FISCAL YEAR 2023 (1)
| Legend | | | | | RSU | Time-Based Units | PSU | Performance-Based Units (other than APSUs) |
GRANTS OF PLAN-BASED AWARDS – FISCAL YEAR 2023 (1)
| (1) All equity awards were made pursuant to the 2017 Plan. |
GRANTS OF PLAN-BASED AWARDS – FISCAL YEAR 2023 (1)
| (2) The Non-Equity Incentive Plan Award granted to Mr. Maheswaran was granted pursuant to the terms of our CEO bonus plan. All Non-Equity Incentive Plan awards made to our other NEOs were granted pursuant to the terms of our Executive Bonus Plan. All Non-Equity Incentive Plan Awards were paid to our executives in fiscal year 2024 for their performance in fiscal year 2023. There is no guaranteed minimum bonus under the applicable plan. For each NEO, the “Threshold” represents the amount which would be paid assuming no amount is attributed to their individual performance and each factor attributed to Company performance is paid at the lowest level at which any payout may be made; the “Target” represents the executive’s base salary multiplied by the target award percentage established for the executive; and the “Maximum” represents the maximum amount payable pursuant to the applicable plan assuming the maximum amount is attributed to the executive’s individual performance and each factor attributed to Company performance is paid at the maximum level. As Mr. Beauchamp is headquartered in Canada, the amounts reflected are for the U.S. Dollar equivalents at the exchange rate between the Canadian Dollar and the U.S. Dollar as of January 29, 2023, which was 0.75122 U.S. Dollars to one Canadian Dollar. |
GRANTS OF PLAN-BASED AWARDS – FISCAL YEAR 2023 (1)
| (3) These columns represent awards of Performance-Based Units. There is no guaranteed minimum payout for these awards. |
GRANTS OF PLAN-BASED AWARDS – FISCAL YEAR 2023 (1)
| (4) The awards reflected in this column represent Time-Based Units. |
GRANTS OF PLAN-BASED AWARDS – FISCAL YEAR 2023 (1)
| (5) The valuation of equity awards is computed in accordance with FASB ASC Topic 718 and based on assumptions set forth in Note 11 to the financial statements filed with the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2023. The awards are valued as of the date of grant, disregarding any estimate of forfeitures related to service-based vesting conditions. The Performance-Based Units included in this table that vest are settled 100% in shares. Also see footnote (1) to the Summary Compensation Table above. |
Outstanding Equity Awards at Fiscal Year-End 2023
Outstanding Equity Awards at Fiscal Year-End 2023 The following table presents information regarding the outstanding equity awards held by each NEO as of January 29, 2023:
Outstanding Equity Awards at Fiscal Year-End 2023
| OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2023 (split-adjusted) | | | | | | | | | | | | Option Awards | | | | | Stock Awards | | | | | Name (Grant Date – Award Type) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price (Per Share) ($) | 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 (1)($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested (2) ($) | | MR. MAHESWARAN | | | | | | | | | | | 3/5/2019 – APSU (3) | – | – | – | – | | – | – | 224,000 | 7,425,600 | | 3/5/2019 – RSU (5) | – | – | – | – | | 17,500 | 580,125 | – | | | TOTAL | | | | | | 17,500 | 580,125 | 224,000 | 7,425,600 | | MR. CHUKWU | | | | | | | | | | | 3/8/2022 – PSU (4) | – | – | – | – | | – | – | 9,585 | 317,743 | | 3/8/2022 – RSU (5) | – | – | – | – | | 17,572 | 582,512 | – | – | | 3/9/2021 – APSU (6) | – | – | – | – | | – | – | 7,042 | 233,442 | | 3/9/2021 – PSU (4) | – | – | – | – | | – | – | 4,460 | 147,849 | | 3/9/2021 – RSU (5) | – | – | – | – | | 8,920 | 295,698 | – | – | | 3/3/2020 – RSU (5) | – | – | – | – | | 6,852 | 227,144 | – | – | | TOTAL | | | | | | 33,344 | 1,105,354 | 21,087 | 699,034 | | MR. AMMANN | | | | | | | | | | | 3/8/2022 – PSU (4) | – | – | – | – | | – | – | 8,520 | 282,438 | | 3/8/2022 – RSU (5) | – | – | – | – | | 13,578 | 450,111 | – | – | | 3/9/2021 – APSU (6) | – | – | – | – | | – | – | 4,225 | 140,059 | | 3/9/2021 – PSU (4) | – | – | – | – | | – | – | 2,348 | 77,836 | | 3/9/2021 – RSU (5) | – | – | – | – | | 4,695 | 155,639 | – | – | | 3/3/2020 – RSU (5) | – | – | – | – | | 4,445 | 147,352 | – | – | | TOTAL | | | | | | 22,718 | 753,102 | 15,093 | 500,333 | | MR. BEAUCHAMP | | | | | | | | | | | 3/8/2022 – PSU (4) | – | – | – | – | | – | – | 9,585 | 317,743 | | 3/8/2022 – RSU (5) | – | – | – | – | | 15,974 | 529,538 | – | – | | 3/9/2021 – APSU (6) | – | – | – | – | | – | – | 7,042 | 233,442 | | 3/9/2021 – PSU (4) | – | – | – | – | | – | – | 3,521 | 116,721 | | 3/9/2021 – RSU (5) | – | – | – | – | | 7,042 | 233.442 | – | – | | 3/3/2020 – RSU (5) | – | – | – | – | | 5,556 | 184,181 | – | – | | TOTAL | | | | | | 28,572 | 947,162 | 20,148 | 667,906 | | MR. SILBERSTEIN | | | | | | | | | | | 3/8/2022 – PSU (4) | – | – | – | – | | – | – | 9,052 | 300,074 | | 3/8/2022 – RSU (5) | – | – | – | – | | 15,974 | 529,538 | – | – | | 3/9/2021 – APSU (6) | – | – | – | – | | – | – | 5,634 | 186,767 | | 3/9/2021 – PSU (4) | – | – | – | – | | – | – | 3,287 | 108,964 | | 3/9/2021 – RSU (5) | – | – | – | – | | 6,573 | 217,895 | – | – | | 3/3/2020 – RSU (5) | – | – | – | – | | 5,186 | 171,916 | – | – | | TOTAL | | | | | | 27,733 | 919,349 | 17,973 | 595,805 | | MR. CHANG | | | | | | | | | | | | – | – | – | – | | – | – | – | – | | TOTAL | | | | | | – | – | – | – | | MR. FULTON | | | | | | | | | | | | – | – | – | – | | – | – | – | – | | TOTAL | | | | | | – | – | – | – |
Outstanding Equity Awards at Fiscal Year-End 2023
| Legend | | | | | NQSO | Stock Options | PSU | Performance-Based Units (other than APSUs) | | RSU | Time-Based Units | APSU | Absolute Stock Price Performance-Based Units |
Outstanding Equity Awards at Fiscal Year-End 2023
| (1) The dollar amounts shown in this column are determined by multiplying the number of shares or units reported in the “Number of Shares or Units of Stock That Have Not Vested” column by $33.15 (the closing price of the Company’s common stock on January 27, 2023, the last trading day of fiscal year 2023). |
Outstanding Equity Awards at Fiscal Year-End 2023
| (2) The dollar amounts shown in this column are determined by multiplying the number of shares or units reported in the “Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested” column by $33.15 (the closing price of the Company’s common stock on January 27, 2023, the last trading day of fiscal year 2023). |
Outstanding Equity Awards at Fiscal Year-End 2023
| (3) Represents the APSUs that remained outstanding and are eligible to vest if, during any consecutive 30-day trading period that commences and ends during the period commencing March 5, 2019 and ending March 5, 2024, the average per-share closing price of the Company’s common stock equals or exceeds $95.00. |
Outstanding Equity Awards at Fiscal Year-End 2023
| (4) The PSUs granted in fiscal year 2022 vest based on our percentile ranking against a comparison group of companies based on the companies included in the S&P Semiconductor Select Industry Index at the start of the applicable performance period, when we are ranked against those companies based on TSR performance for the applicable performance period. TSR will be measured for each of the three measurement periods applicable to the award: the Company’s fiscal year 2022, fiscal years 2022 and 2023, and fiscal years 2022, 2023 and 2024. The first measurement period resulted in the vesting of 58.82% of the target number of units in the first vesting tranche, one-third of the target number of units originally granted pursuant to the award as of the last day of fiscal year 2022. The second measurement period resulted in the vesting of 0.00% of the target number of units in the second vesting tranche, one-third of the target number of units originally granted pursuant to the award, as of the last day of fiscal year 2023. The amount reported in the table above represents the target number of PSUs that are eligible to vest for the third measurement period under the awards (consisting of fiscal years 2022, 2023, and 2024, respectively; covering one-third of the target number of units originally granted pursuant to the award). |
Outstanding Equity Awards at Fiscal Year-End 2023
| The PSUs granted in fiscal year 2023 vest based on our TSR relative to the TSR of the SPDR S&P Semiconductor ETF (NYSE:XSD), which tracks the S&P Semiconductor Select Industry Index. TSR will be measured for each of the three measurement periods applicable to the award: the Company’s fiscal year 2023, fiscal years 2023 and 2024, and fiscal years 2023, 2024 and 2025. The first measurement period resulted in the vesting of 0.00% of the target number of units in the first vesting tranche, one-third of the target number of units originally granted pursuant to the award as of the last day of fiscal year 2023. The amount reported in the table above represents the target number of PSUs that are eligible to vest for the second and third measurement periods under the awards (consisting of fiscal years 2023 and 2024, and fiscal years 2023, 2024, and 2025, respectively; each covering one-third of the target number of units originally granted pursuant to the award). |
Outstanding Equity Awards at Fiscal Year-End 2023
| (5) The Time-Based Units have a time-based vesting schedule and vest in approximately equal annual installments over three or four years as set forth in the following table: |
Outstanding Equity Awards at Fiscal Year-End 2023
| Grant Date | 1st Vesting Date | 2nd Vesting Date | 3rd Vesting Date | 4th Vesting Date | | 3/8/2022 | 3/8/2023 | 3/8/2024 | 3/8/2025 | – | | 3/9/2021 | 3/9/2022 | 3/9/2023 | 3/9/2024 | – | | 3/3/2020 | 3/3/2021 | 3/3/2022 | 3/3/2023 | – | | 3/5/2019 | 3/5/2020 | 3/5/2021 | 3/5/2022 | 3/5/2023 |
Outstanding Equity Awards at Fiscal Year-End 2023
| (6) Represents the APSUs that remained outstanding and are eligible to vest if, during any consecutive 30-day trading period that commences and ends during the period commencing March 9, 2021 and ending March 5, 2024, the average per-share closing price of the Company’s common stock equals or exceeds $95.00. |
Option Exercises and Stock Vested in Fiscal Year 2023
Option Exercises and Stock Vested in Fiscal Year 2023 The following table identifies option awards that were exercised by our NEOs during fiscal year 2023 and other stock awards that vested during fiscal year 2023 that were previously granted to our NEOs:
Option Exercises and Stock Vested in Fiscal Year 2023
| OPTION EXERCISES AND STOCK VESTED IN FISCAL YEAR 2023 | | | | | | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise (1) ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting (1) ($) | | Mr. Maheswaran | – | – | 17,500 | 1,131,725 | | Mr. Chukwu | 7,500 | 393,966 | 16,312 | 1,072,114 | | Mr. Ammann | – | – | 10,125 | 667,079 | | Mr. Beauchamp | – | – | 12,744 | 838,312 | | Mr. Chang | 5,000 | 179,056 | 15,144 | 985,941 | | Mr. Fulton | – | – | 17,031 | 1,111,221 | | Mr. Silberstein | – | – | 13,138 | 862,847 |
Option Exercises and Stock Vested in Fiscal Year 2023
| (1) The dollar amounts shown in the table above for option awards are determined by multiplying (i) the number of shares of our common stock to which the exercise of the option related, by (ii) the difference between the per-share closing price of our common stock on the date of exercise and the exercise price of the options. The dollar amounts shown in the table above for stock awards are determined by multiplying the number of shares or units, as applicable, that vested by the per-share closing price of our common stock on the vesting date. |
Nonqualified Deferred Compensation – Fiscal Year 2023
Nonqualified Deferred Compensation – Fiscal Year 2023 Our NEOs may elect to receive some of their compensation on a deferred basis under the Deferred Compensation Plan. A participant may elect to defer up to 80% of his or her base salary and certain performance-based compensation. Under the Company’s current matching program under the Deferred Compensation Plan, the Company matches, on a dollar-for-dollar basis, up to the first 10% of employee base salary contributions for our CEO, our Chief Financial Officer and our Chief Legal Officer, up to the first 8% for participants at the Vice President level, and up to the first 5% for all other participants. Participants are always 100% vested in their deferrals and the earnings thereon. Matching contributions made by the Company vest 25% on December 31st of the calendar year during which the contribution is made. Thereafter, vesting continues 25% on December 31st for each of the following three calendar years. Amounts in participant accounts may generally be deferred until a specified date, death, disability, a change in control, or termination of employment. At the participant’s election, deferrals will generally be paid in a lump sum or in annual installments over a period of up to 20 years. Withdrawals may be made for unforeseeable emergencies and some amounts (generally pre-2005 deferrals) may be withdrawn subject to a penalty. Earnings on the account of each executive are credited to such executive based on the performance of investment vehicles chosen by the executive from a selection offered to all plan participants by the plan’s administrator. Executives may elect to change the investment vehicles applicable to their accounts at any time. The earnings associated with the Deferred Compensation Plan are related to plan participant elections made in relation to the available mutual fund investment choices as provided through the Deferred Compensation Plan. Prior to fiscal year 2019, we granted certain RSU awards to our NEOs that provided for payment of any vested units subject to the award to be deferred and not made until six months after the executive’s employment with the Company terminates (referred to as “Ownership Stock Units” or “OSUs”). The following table presents information regarding the contributions to and earnings on our NEOs’ deferred compensation balances during fiscal year 2023, and the total deferred amounts for the NEOs at the end of fiscal year 2023:
Nonqualified Deferred Compensation – Fiscal Year 2023
| NONQUALIFIED DEFERRED COMPENSATION – FISCAL YEAR 2023 | | | | | | | Name | Executive Contributions in Last FY (1) ($) | Registrant Contributions in Last FY (2) ($) | Aggregate Earnings in Last FY (3) ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE (4) ($) | | Mr. Maheswaran | 74,166 | 74,165 | (627,415) | – | 6,251,346 | | Mr. Chukwu | 43,000 | 43,000 | (383,458) | (108,621) | 3,016,049 | | Mr. Ammann | 40,500 | 40,500 | (398,975) | – | 1,704,999 | | Mr. Beauchamp (5) | – | – | (364,140) | – | 348,075 | | Mr. Silberstein | 59,923 | 33,431 | (708,670) | (54,355) | 2,353,178 | | Mr. Chang | 19,039 | 19,038 | (18,901) | – | 283,926 | | Mr. Fulton | 54,266 | 20,371 | (3,191) | (7,034) | 256,188 |
Nonqualified Deferred Compensation – Fiscal Year 2023
| (1) These amounts consist of base salary deferred under the Deferred Compensation Plan in fiscal year 2023. All of these amounts have been included in the “Base Salary” column of the “Summary Compensation Table – Fiscal Years 2021-2023” above. |
Nonqualified Deferred Compensation – Fiscal Year 2023
| (2) All of the amounts reported as “Registrant Contributions in the Last Fiscal Year” reflect Company matching contributions that are also included in the “All Other Compensation” column of the “Summary Compensation Table – Fiscal Years 2021-2023” above. |
Nonqualified Deferred Compensation – Fiscal Year 2023
| (3) These amounts consist of earnings credited under the Deferred Compensation Plan for fiscal year 2023 with respect to deferrals made under that plan and the appreciation in value during fiscal year 2023 (after the date of vesting of the units) of OSUs. No portion of these earnings on deferred compensation is considered to be at above-market rates under SEC rules; thus no such earnings are included as compensation in the “Summary Compensation Table – Fiscal Years 2021-2023” above. |
Nonqualified Deferred Compensation – Fiscal Year 2023
| (4) These amounts consist of the NEO’s fiscal year-end balance under the Deferred Compensation Plan as well as the fiscal year-end value of the executive’s vested OSUs (the payment of which is delayed until six months after the executive’s employment with the Company terminates). Deferred Compensation Plan balances include unvested amounts attributable to the Company’s contributions and earnings thereon. All amounts within the “Aggregate Balance at Last Fiscal Year End” column for each NEO were included in Summary Compensation Tables for previous years, to the extent the executive was named in such tables and the amounts were so required to be reported in such tables and with the value of OSUs included in the year of grant of those units based on the grant date fair value of the award. |
Nonqualified Deferred Compensation – Fiscal Year 2023
| The Deferred Compensation Plan balance for each of the NEOs at the end of fiscal year 2023 was as follows: Mr. Maheswaran, $5,631,441; Mr. Chukwu, $2,644,769; Mr. Ammann, $1,405,820; Mr. Beauchamp, $0; Mr. Silberstein, $1,799,573; Mr. Chang, $283,926; and Mr. Fulton, $256,188. The value of vested OSUs held by each of the NEOs at the end of fiscal year 2023 was as follows: Mr. Maheswaran, $619,905; Mr. Chukwu, $371,280; Mr. Ammann, $299,179; Mr. Beauchamp, $348,075; Mr. Silberstein, $553,605; Mr. Chang, $0; and Mr. Fulton, $0. These values are based on a value of column by $33.15 (the closing price of the Company’s common stock on January 27, 2023, the last trading day of fiscal year 2023). |
Nonqualified Deferred Compensation – Fiscal Year 2023
| (5) Mr. Beauchamp does not participate in the Deferred Compensation Plan because he is a Canadian resident. |
Potential Payments On Termination or Change in Control
Potential Payments On Termination or Change in Control
VERSUS PERFORMANCE
| Fiscal Year | Summary Compensation Table Total for CEO ($)(1)(2) | Compensation Actually Paid to CEO ($)(3) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(1)(2) | Average Compensation Actually Paid to Non-PEO NEOs ($)(3) | Value of Initial Fixed $100 Investment Based On: | | Semtech Net Income ($ Thousands) (5) | Semtech Non-GAAP Operating Income ($ Thousands) (6) | | | | | | | Semtech TSR ($)(4) | Philadelphia Semiconductor Index TSR ($)(4) | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | 1,064,219 | (11,233,662) | 2,675,024 | 1,017 | 63.12 | 153.08 | 61,372 | 210,665 | | 2022 | 1,667,178 | (1,985,990) | 2,706,114 | 1,735,115 | 129.15 | 171.69 | 125,645 | 202,792 | | 2021 | 1,519,953 | 11,763,074 | 1,574,886 | 2,455,948 | 135.09 | 135.05 | 59,867 | 139,535 |
VERSUS PERFORMANCE
| (3) For purposes of this table, the compensation actually paid (also referred to as “CAP”) to each of our NEOs (including, for purposes of this table, former named executive officers who are included in the Non-PEO NEO group for the applicable year) means the NEO’s total compensation as reflected in the Summary Compensation Table for the applicable fiscal year and adjusted for the following with respect to each NEO: |
VERSUS PERFORMANCE
| Reconciliation of Summary Compensation Table Total to Compensation Actually Paid for CEO | Fiscal Year 2023 ($) | Fiscal Year 2022 ($) | Fiscal Year 2021 ($) | | Summary Compensation Table Total | 1,064,219 | 1,667,178 | 1,519,953 | | Grant Date Fair Value of Option and Stock Awards Granted in Fiscal Year | 0 | 0 | 0 | | Fair Value at Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Fiscal Year | 0 | 0 | 0 | | Change in Fair Value of Outstanding and Unvested Option and Stock Awards Granted in Prior Fiscal Years | (12,068,402) | (3,107,724) | 9,589,294 | | Fair Value at Vesting of Option and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $0 | 0 | 0 | | Change in Fair Value as of Vesting Date of Option and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | (229,479) | (545,444) | 653,827 | | Fair Value as of Prior Fiscal Year-End of Option and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | 0 | 0 | 0 | | Compensation Actually Paid | (11,233,662) | (1,985,990) | 11,763,074 |
VERSUS PERFORMANCE
| Reconciliation of Average Summary Compensation Table Total to Average Compensation Actually Paid for Non-PEO NEOs | Fiscal Year 2023 ($) | Fiscal Year 2022 ($) | Fiscal Year 2021 ($) | | Summary Compensation Table Total | 2,675,024 | 2,706,114 | 1,574,886 | | Grant Date Fair Value of Option and Stock Awards Granted in Fiscal Year | (1,848,772) | (1,935,989) | (1,089,084) | | Fair Value at Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Fiscal Year | 390,964 | 1,442,149 | 1,871,239 | | Change in Fair Value of Outstanding and Unvested Option and Stock Awards Granted in Prior Fiscal Years | (565,624) | (290,549) | 220,836 | | Fair Value at Vesting of Option and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | 0 | 149,845 | 132,876 | | Change in Fair Value as of Vesting Date of Option and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | (207,517) | (336,455) | (254,805) | | Fair Value as of Prior Fiscal Year-End of Option and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | (443,058) | 0 | $0 | | Compensation Actually Paid | 1,017 | 1,735,115 | 2,455,948 |