DEF 14A of Synaptics Inc
Filed Sep 5, 2023 · FY20230001193125-23-228528
Compensation Framework
| Annual Cash Bonuses Based on Performance | Determined based on a rigorous performance measurement framework that measures the Company’s actual performance against multiple pre-established financial goals – which include revenue, non-GAAP gross margin, and non-GAAP operating profit goals – and each NEO’s contribution to that performance. | | Majority of Target Total Direct Compensation is “At Risk” | Approximately 75% of our Chief Executive Officer’s target total direct compensation and approximately 71% of our other NEOs’ target total direct compensation was tied directly to the performance of the Company and/or the Company’s stock price (as reflected in the pay mix charts below). | | Majority of Target Total Direct Compensation is in the Form of Long-Term Incentives | The most significant component of each NEO’s target total direct compensation opportunity is in the form of equity awards that each vest or are earned over a multi-year (three- or four-year) period. In Fiscal 2023, approximately 92% of our Chief Executive Officer’s, and approximately 85% of our other NEOs’, target total direct compensation was annual long-term incentive compensation in the form of equity awards. | | Majority of Target TDC Long-Term Incentives are Performance -Based | Approximately 76% of our Chief Executive Officer’s and all other NEOs’ annual long-term incentive compensation for Fiscal 2023 is subject to performance-based vesting requirements. |
CORPORATE GOVERNANCE HIGHLIGHTS
| Best Compensation and Governance Practices ● Independent compensation consultant ● Robust stock ownership guidelines for executive officers and non-employee directors ● Stock holding requirement for our directors and executive officers ● Anti-hedging policy ● Anti-pledging policy ● Compensation recovery (“clawback”) policy ● No “single trigger” change of control provisions ● No excise tax gross-ups ● No repricing of underwater stock options without stockholder approval |
CLASS 3 DIRECTOR NOMINEES
CLASS 3 DIRECTOR NOMINEES
CLASS 3 DIRECTOR NOMINEES
| Nelson C. Chan Chair of the Board and Independent Director Age: 62 Director Since 2007 Committees: Executive (Chair), Audit and Nominations | Nelson C. Chan has been the Chair of our Board since October 2018 and a director of the Company since February 2007. From December 2006 until August 2008, Mr. Chan served as the Chief Executive Officer of Magellan Corporation, a leader in the consumer, survey, GIS, and OEM GPS navigation and positioning markets. From 1992 through 2006, Mr. Chan served in various senior management positions with SanDisk Corporation, a global leader in flash memory cards, including as Executive Vice President and General Manager, Consumer Business. From 1983 to 1992, Mr. Chan held marketing and engineering positions at Chips and Technologies, Signetics, and Delco Electronics. Mr. Chan is a member of the board of directors, the Audit Committee, and the Nominating and Governance Committee of Deckers Outdoor Corporation, a NYSE-listed company, which is a footwear, apparel and accessories designer and distributor, and a member of the board of directors, the Audit Committee, and the Nominating and Governance Committee of Twist Bioscience, a Nasdaq-listed company, which manufactures synthetic DNA. Mr. Chan also currently serves on the Boards of Directors of several private companies. Previously, Mr. Chan was Chair of the board of directors, Chair of the Compensation Committee, member of the Audit Committee and member of the Nominating and Corporate Governance Committee of Adesto Technologies, a Nasdaq-listed company, from 2010 to June 2020, prior to its acquisition by Dialog Semiconductor plc, a member of the board of directors, Chair of the Compensation Committee and member of the Nominating and Corporate Governance committee of Socket Mobile, a Nasdaq-listed company, from 2016 to 2019, a member of the board of directors of Silicon Laboratories, Inc., a Nasdaq-listed company, from 2007 to 2010, a member of the board of directors, Chair of the Audit Committee and member of the Compensation Committee of Affymetrix, from 2010 to 2016, prior to its acquisition by Thermo Fisher, and a member of the board of directors and Chair of the board of directors from June 2013 to September 2016 of Outerwall, a Nasdaq-listed company, prior to its acquisition by Apollo Global Management, a private equity firm. Mr. Chan holds a Bachelor of Science degree in Electrical and Computer Engineering from the University of California at Santa Barbara and a Master’s degree in Business Administration from Santa Clara University. Specific Qualifications, Attributes, Skills and Experience: We believe that Mr. Chan’s experience as the former Chief Executive Officer of Magellan, his previous senior management positions with other leading companies, and his service as a director of multiple companies provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board. |
CLASS 3 DIRECTOR NOMINEES
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 12 |
CLASS 3 DIRECTOR NOMINEES
| Susan J. Hardman Independent Director Age: 62 Director Since 2020 Committees: Audit and Compensation | Susan J. Hardman has been a director of the Company since May 2020. In April 2015, Ms. Hardman retired from her full-time senior executive role. From 2010 to 2015, she was an advisory board member for Santa Clara University’s School of Electrical Engineering. From August 2013 to January 2015, Ms. Hardman served as senior vice president of the Specialty products group for Intersil Corporation (subsequently acquired by Renesas), a company that was a leading global provider of analog semiconductor solutions for the computing, consumer, industrial and communications markets. From September 2008 to July 2013, she served as senior vice president of Intersil’s Analog and Mixed Signal product group. Additionally, while employed by Intersil, Ms. Hardman held roles of vice president and general manager of the Automotive and Specialty products group and vice president of Corporate Marketing. She joined Intersil from Exar Corporation (subsequently acquired by MaxLinear Inc.), where she was vice president and general manager of Exar’s Interface products division. Prior to that, she served as vice president of Corporate Marketing and director of Product Marketing for Exar. From 1983 to 1999, Ms. Hardman held roles in marketing, product design, applications, and product testing with VLSI Technology and Motorola. Ms. Hardman holds a Bachelor of Science degree in Chemical Engineering from Purdue University and a Master’s of Business Administration degree from the University of Phoenix. Specific Qualifications, Attributes, Skills and Experience: We believe that Ms. Hardman’s previous senior management positions with other semiconductor companies, her extensive knowledge of the semiconductor industry, her engineering background, and her knowledge and experience in the consumer and automotive technology sectors, provide the requisite qualifications, skills, perspectives, and experiences that make her well qualified to serve on our Board. |
CLASS 3 DIRECTOR NOMINEES
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 13 |
CONTINUING DIRECTORS
CONTINUING DIRECTORS
CONTINUING DIRECTORS
| Jeffrey D. Buchanan Independent Director Age: 67 Director Since 2005 Committees: Audit (Chair), Nominations and Executive | Jeffrey D. Buchanan has been a director of the Company since September 2005. In August 2020, Mr. Buchanan retired from his full-time senior executive role and is presently an independent consultant in the technology industry. Mr. Buchanan was the Executive Vice President, Chief Financial Officer, and Treasurer of Smith & Wesson Brands, Inc. (formerly American Outdoor Brands Corporation), a Nasdaq-listed company that is a U.S.-based leader in firearm manufacturing and design, from January 2011 to August 2020. Mr. Buchanan also served as the Chief Administrative Officer of Smith & Wesson Brand, Inc. from May 2015 until August 2020, as Secretary of Smith & Wesson Brands, Inc. from January 2011 until April 2012, and as a member of the board of directors and as the Chair of the Audit Committee of Smith & Wesson Brands, Inc. from November 2004 until December 2010. He was Of Counsel to the law firm of Ballard Spahr LLP from May 2010 until December 2010. Mr. Buchanan served as a Senior Managing Director of CKS Securities, LLC, a registered broker-dealer, from August 2009 until May 2010 and as a Senior Managing Director of Alare Capital Securities, L.L.C., a registered broker-dealer, from November 2006 until July 2009. From 2005 to 2006, Mr. Buchanan was principal of Echo Advisors, Inc., a corporate consulting and advisory firm focusing on mergers, acquisitions, and strategic planning. Mr. Buchanan served in various positions for Three-Five Systems, Inc., a publicly traded electronic manufacturing services company, including as Executive Vice President, Chief Financial Officer, and Treasurer, from May 1996 until February 2005. Mr. Buchanan was a business attorney for the law firm of O’Connor, Cavanagh, Anderson, Killingsworth & Beshears from 1986 until 1996 and for the law firm of Davis Wright Tremaine LLP from 1984 until 1986. He was a senior staff person at Deloitte & Touche LLP from 1982 to 1984. Mr. Buchanan holds a Bachelor of Science degree in Accounting from Arizona State University, a Juris Doctor degree from the University of Arizona, and a Master of Laws degree in Tax from the University of Florida. Specific Qualifications, Attributes, Skills and Experience: We believe Mr. Buchanan’s legal, accounting, and investment banking background, his prior roles as the chief financial officer and treasurer of public companies, and his public company board service provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board. |
CONTINUING DIRECTORS
| Keith B. Geeslin Independent Director Age: 70 Director Since 1986 Committees: Compensation (Chair) and Executive | Keith B. Geeslin has been a director of the Company since 1986. Mr. Geeslin has been a General Partner of Francisco Partners, a firm specializing in structured investments in technology companies undergoing strategic, technological, and operational inflection points, since January 2004. From 2001 until October 2003, Mr. Geeslin served as Managing General Partner of the Sprout Group, a venture capital firm, with which he became associated in 1984. In addition, Mr. Geeslin served as a general or limited partner in a series of investment funds associated with the Sprout Group, a division of DLJ Capital Corporation, which is a subsidiary of Credit Suisse (USA), Inc. Mr. Geeslin is currently a member of the board of directors and Chair of the Compensation Committee of CommVault Systems, Inc., a public company that provides data management software. Mr. Geeslin holds a Bachelor of Science degree in Electrical Engineering, a Master’s of Science degree in Engineering and Economic Systems from Stanford University, and a Master of Arts degree in Philosophy, Politics, and Economics from Oxford University. Specific Qualifications, Attributes, Skills and Experience: We believe Mr. Geeslin’s long career at leading private equity and venture capital firms with a focus on investments in high-technology companies, his service on multiple boards of directors, and his engineering background provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board. |
CONTINUING DIRECTORS
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 14 |
CONTINUING DIRECTORS
| Michael E. Hurlston President, Chief Executive Officer and Director Age: 56 Director Since 2019 Committees: None | Michael E. Hurlston has been a director and the President and Chief Executive Officer of the Company since August 2019. Prior to joining the Company, Mr. Hurlston served as the Chief Executive Officer and a member of the board of directors of Finisar Corporation from January 2018 to August 2019. Prior to joining Finisar, he served as Senior Vice President and General Manager of the Mobile Connectivity Products/Wireless Communications and Connectivity Division and held senior leadership positions in sales, marketing and general management at Broadcom Limited and its predecessor corporation from November 2001 through October 2017. Prior to joining Broadcom in 2001, Mr. Hurlston held senior marketing and engineering positions at Oren Semiconductor, Inc., Avasem, Integrated Circuit Systems, Micro Power Systems, Exar and IC Works from 1991 until 2001. Mr. Hurlston is a member of the board of directors and the Audit Committee of Flextronics International, Ltd., a Nasdaq Global Select Market (“Nasdaq”)-listed company. From August 2016 to August 2020, Mr. Hurlston was a member of the board of directors and the Compensation, Audit and Nominating and Governance Committees of Ubiquiti Networks, Inc., an New York Stock Exchange (“NYSE”)-listed company. Mr. Hurlston serves on the Board of Executive Trustees of the UC Davis Foundation and on the Dean’s Executive Committee for the College of Engineering and the Dean’s Advisory Counsel for the Graduate School of Management at the University of California, Davis. Mr. Hurlston holds a Bachelor of Science and a Master of Science degree in Electrical Engineering and a Master’s degree in Business Administration from the University of California, Davis. Specific Qualifications, Attributes, Skills and Experience: We believe Mr. Hurlston’s position as Chief Executive Officer of the Company, and his successful career at major companies before joining our Company provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board. |
CONTINUING DIRECTORS
| Patricia Kummrow Independent Director Age: 53 Director Since 2021 Committees: Executive and Nominations (Chair) | Patricia Kummrow has been a director of the Company since July 2021. Ms. Kummrow has served as the Vice President, Network and Edge Group, and General Manager, Ethernet Division, at Intel Corporation (“Intel”) since March 2017. She served as the Vice President, Platform Engineering Group, at Intel from January 2016 to March 2017, and in other senior engineering leadership roles at Intel from 2005 to 2016. Earlier in her career, Ms. Kummrow served in engineering and engineering management roles at Hewlett-Packard. Ms. Kummrow holds a Bachelor of Science degree in Electrical Engineering with a minor in Mathematics from the University of Texas at El Paso, and Master’s of Science degree in the Management of Technology from Walden University. Specific Qualifications, Attributes, Skills and Experience: We believe that Ms. Kummrow’s senior management positions with other semiconductor companies, her extensive knowledge of the semiconductor industry, her engineering background, and her understanding of embedded hardware and software, provide the requisite qualifications, skills, perspectives, and experiences that make her well qualified to serve on our Board. |
CONTINUING DIRECTORS
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 15 |
CONTINUING DIRECTORS
| Vivie “YY” Lee Independent Director Age: 56 Director Since 2022 Committees: Audit and Compensation | Vivie “YY” Lee has been a director of the Company since January 2022. Beginning in October 2021, Ms. Lee retired from her full-time senior executive role and has acted as an independent consultant in the technology industry. Ms. Lee served as Chief Strategy Officer of Anaplan from 2018 until October 2021, leading performance planning across corporate functions and incubating strategic internal initiatives and market collaborations during the period through and following the company’s IPO. Previously, she was chief executive officer of FirstRain Inc., an enterprise SaaS data science company, from 2015 until its acquisition by Ignite Technologies in August 2017, and was the company’s chief operating officer, responsible for engineering, analytics and data science since 2005. Prior to FirstRain, Ms. Lee served as the general manager of Worldwide Services at Cadence Design Systems, a global advanced technology division of the company. She previously co-founded the software company Aqueduct Software, an automated enterprise application profiling and analysis solution, and led this company through bootstrapping, venture financing, commercial growth, and acquisition by NetManage in 2000. Ms. Lee began her career at Bell Labs and has held various product leadership roles at Synopsys and 8x8 (formerly Integrated Information Technology Inc.). Ms. Lee is a member of the boards of CommVault Systems, Inc., a public company that provides data management software applications, and Belden Inc., a public company designing, manufacturing and marketing networking, connectivity, and cable products and solutions for industrial automation, smart buildings, and broadcast markets. She holds a Bachelor of Science degree in Mathematics from Harvard University. Specific Qualifications, Attributes, Skills and Experience: We believe that Ms. Lee’s board experience, her previous senior management positions with other technology companies, her mathematics background, and her deep understanding of software and software applications, provide the requisite qualifications, skills, perspectives, and experiences that make her well qualified to serve on our Board. |
CONTINUING DIRECTORS
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 16 |
CONTINUING DIRECTORS
| James L. Whims Independent Director Age: 68 Director Since 2007 Committees: Compensation and Nominations | James L. Whims has been a director of the Company since October 2007. Mr. Whims has been a partner at Alsop-Louie Partners, a venture capital firm focused on identifying promising entrepreneurs, since February 2010. From 1996 to 2007, Mr. Whims was a Managing Director of Techfund Capital l, LP and Techfund Capital II, LP and since 2001, a Managing Director and Venture Partner at Techfund Capital Europe, which are venture capital firms concentrating on high-technology enterprises. Mr. Whims was Executive Vice President of Sony Computer Entertainment of America from 1994 to 1996, where he was responsible for the North American launch of the Playstation and was the winner of the Brandweek/Ad Week marketing executive of the year. From 1990 to 1994, Mr. Whims was Executive Vice President of Software Toolworks. Mr. Whims co-founded Worlds of Wonder, an American toy company that launched Teddy Ruxpin, Lazer Tag and the United States launch of Nintendo, where he was an executive from 1985 to 1988. Mr. Whims is currently a member of the board of directors and a member of the Audit Committee and Compensation Committee of the private company DigiLens Inc., a diffractive waveguide optical company, and a member of the board of directors and Compensation Committee at each of private companies Kuprion, Inc. a nano-copper materials company, and Phizzle, an engagement automation software company. Previously, Mr. Whims was a member of the board of directors of THQ, Inc., Portal Player, and 3DFX, all of which were Nasdaq-listed companies, and of Twitch TV, which was a private company. Mr. Whims holds a Bachelor of Science degree in Economics and Communications from Northwestern University and a Master of Business Administration degree in Finance and Marketing from the University of Arizona. Specific Qualifications, Attributes, Skills and Experience: We believe Mr. Whims’ prior senior executive positions with major companies, his experience as an investor in high-technology companies, his service as a director of multiple companies, and his expertise in e-communications and marketing provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board. |
CONTINUING DIRECTORS
Each director nominee will be elected at the Annual Meeting if such nominee receives a majority of the votes cast with respect to such nominee’s election (that is, the number of votes cast “FOR” the nominee must exceed the number of votes cast “AGAINST” the nominee). Proxies cannot be voted for a greater number of persons than the two director nominees named in Proposal 1. An incumbent candidate for director who does not receive the required votes for re-election is expected to tender their resignation to our Board. Our Board, or another duly authorized committee of our Board, will make a determination as to whether to accept or reject the tendered resignation generally within 90 days after certification of the election results of the stockholder vote. If applicable, we will publicly disclose the decision regarding any tendered resignation and the rationale behind the decision in a filing of a Current Report on Form 8-K with the Securities and Exchange Commission (the “SEC”). THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES.
CONTINUING DIRECTORS
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 17 |
CONTINUING DIRECTORS
ADVISORY APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS Section 14A of the Exchange Act requires that we provide our stockholders an opportunity to vote to approve, on an advisory or non-binding basis, the compensation of our NEOs as disclosed in this Proxy Statement in accordance with the SEC’s rules. This proposal, commonly known as a “say on pay” proposal, gives our stockholders the opportunity to express their views on our NEOs’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific NEO, but rather the overall compensation of all of our NEOs and the philosophy, policies and practices described in this Proxy Statement. We are asking our stockholders to approve the compensation of our NEOs (as identified in the CD&A) as disclosed pursuant to the SEC’s executive compensation disclosure rules and set forth in this Proxy Statement (including in the CD&A, the compensation tables, and the narratives accompanying those tables).
OUR COMPENSATION OBJECTIVES
| • | To align executive compensation with the Company’s corporate strategies, business objectives and the creation of long-term value for our stockholders without encouraging unnecessary or excessive risk-taking; |
OUR COMPENSATION OBJECTIVES
| • | To provide an incentive to achieve key strategic and financial performance measures by linking short-term incentive award opportunities and a substantial portion of long-term incentive award opportunities to the achievement of corporate and operational performance objectives in these areas; |
OUR COMPENSATION OBJECTIVES
| • | To align the interests of our executive officers with those of our stockholders by linking our executive officers’ long-term incentive compensation opportunities to stockholder value creation and their cash incentives to our annual performance; and |
FISCAL 2023 COMPENSATION HIGHLIGHTS
| Annual Cash Bonuses are Based on Achievement of Quantifiable Performance Goals | Determined based on a rigorous performance measurement framework that measures the Company’s actual performance against multiple pre-established financial goals – which include revenue, non-GAAP gross margin, and non-GAAP operating profit goals – and each NEO’s contribution to that performance. See “Fiscal 2023 Named Executive Officer Compensation — Annual Performance-Based Cash Bonuses” on pages 57-59 for more information about how the financial goals are set and the Company’s actual performance for Fiscal 2023. | | Majority of Target Total Direct Compensation is “At Risk” | Approximately 75% of our Chief Executive Officer’s target total direct compensation (“TDC”)(1) and approximately 71% of our other NEOs’ target TDC was tied directly to the performance of the Company and/or the Company’s stock price, as shown in the pay mix charts on page 51. | | Majority of Target Total Direct Compensation is in the Form of Long-Term Incentives | The most significant component of each NEO’s target total direct compensation opportunity is in the form of performance stock unit (“PSU”) awards, market stock unit (“MSU”) awards, and restricted stock unit (“RSU”) awards that each vest or are earned over a multi-year (three- or four-year) period. In Fiscal 2023, approximately 92% of our Chief Executive Officer’s, and approximately 85% of our other NEOs’, target TDC was annual long-term incentive compensation in the form of equity awards. We believe equity compensation directly align the interests of our NEOs and our stockholders. | | Majority of Target TDC Long-Term Incentives are Performance-Based | Approximately 76% of our Chief Executive Officer’s and all other NEOs’ annual long-term incentive compensation for Fiscal 2023 is subject to performance-based vesting requirements. Vesting for the Fiscal 2023 annual equity awards with performance-based vesting requirements was contingent on our relative TSR performance compared to the TSR of each company in the Russell 2000 Index over a multi-year period in the case of the MSU awards and on our non-GAAP earnings per share (“EPS”) performance over a one-year performance period and a multi-year time-based vesting requirement in the case of the PSU awards. |
Why We Believe You Should Vote for Proposal 5
| • | Significant Focus on Performance-Based Vesting Equity Awards. Approximately two-thirds of the annual equity awards granted to our NEOs in Fiscal 2023 are subject to performance-based vesting requirements, with the vesting of the awards based on our TSR compared to the TSR of each of the other companies in the Russell 2000 Index (“Russell 2000 Index TSR”) and the Company’s non-GAAP EPS. The foregoing percentages are based on the grant date fair value of the awards granted in Fiscal 2023. |
Why We Believe You Should Vote for Proposal 5
| • | Limiting Cash Compensation Expense. Equity compensation limits the cash cost of our compensation programs and can preserve cash for other uses in growing our business or returning value to our stockholders. If the 2019 Incentive Plan Proposal is not approved, we may need to replace the lost compensation value with larger cash awards, which would increase our cash compensation expense. That cash might be better utilized if reinvested in our business or returned to our stockholders. |
Why We Believe You Should Vote for Proposal 5
| • | Responsible Share Request Size. We believe that we are asking for enough shares to be able to continue to grant equity awards under the Amended Version of the 2019 Incentive Plan for approximately two to two and a half years (as discussed in more detail below). We want our stockholders to have the ability to regularly validate their support of our approach to equity awards. |
Why We Believe You Should Vote for Proposal 5
| • | Responsible Plan Features. Our 2019 Incentive Plan (including the Amended Version) includes restrictive minimum vesting requirements, and a holding period requirement for awards granted to our CEO, executive officers, and board members. |
Why We Believe You Should Vote for Proposal 5
| • | We have 2,900 shares (0.0% of our issued and outstanding common stock) subject to outstanding stock options (all of which were granted under the 2010 Plan), representing one outstanding stock option grant expiring October 28, 2023 with an exercise price of $52.57 per share; |
Why We Believe You Should Vote for Proposal 5
| • | We have 1,528,246 shares available for future grants under the 2019 Incentive Plan. No new awards may be granted under the 2010 Plan, the DSP Plan, or the 2019 Inducement Plan; |
Why We Believe You Should Vote for Proposal 5
| • | The total number of shares of common stock subject to outstanding awards under the 2019 Incentive Plan, the 2010 Plan, the DSP Plan, and the 2019 Inducement Plan (2,746,236 shares in total), plus the total number of shares available for future awards under the 2019 Incentive Plan (1,528,246 shares in total), represents a current overhang percentage of 11.0% (in other words, the potential dilution of our stockholders represented by these plans when viewed against our shares of common stock currently issued and outstanding); |
Why We Believe You Should Vote for Proposal 5
| • | We are asking for an additional 900,000 shares of common stock available for awards under the 2019 Incentive Plan Proposal – this represents 2.3% of our issued and outstanding common stock as of August 21, 2023, which percentage reflects the simple dilution of our stockholders that would occur if the 2019 Incentive Plan Proposal is approved, and all such shares were delivered in respect of awards granted under the plan; and |
Why We Believe You Should Vote for Proposal 5
| Fiscal Year | Options Granted | Restricted Stock Awards/Units Granted (excluding Performance- Based) | Performance-Based Restricted Stock Awards/Units Earned | Total Shares Granted | Weighted Average Shares at End of Fiscal Year | Burn Rate | | 2023 | — | 808,153 | 583,772 | 1,391,925 | 39,600,000 | 3.51% | | 2022 | — | 641,690(2) | 411,906 | 1,053,596 | 39,000,000 | 2.70% | | 2021 | — | 803,721(1) | 410,110 | 1,213,831 | 34,800,000 | 3.49% | | Average Three-Year Burn Rate (Fiscal 2021-2023) | | | | | | 3.23% |
Responsible Plan Features
| • | General administrative authority for the 2019 Incentive Plan has been delegated to the Compensation Committee of the Board, consisting entirely of directors the Board has determined are independent; |
Responsible Plan Features
| • | Except for substitute awards granted in connection with a corporate transaction such as an acquisition, stock options and SARs under the 2019 Incentive Plan may not be granted with exercise or base prices lower than the fair market value of the underlying shares on the grant date; |
Responsible Plan Features
| • | Except for customary adjustments in connection with a corporate transaction (such as a stock split) or change of control, the 2019 Incentive Plan prohibits the repricing of stock options and SARs without stockholder approval, including the cancellation and replacement of any outstanding option or SAR with a new option, SAR, other award or cash and any amendment or modification that reduces the exercise price of an option or base price of a SAR; |
Responsible Plan Features
| • | The 2019 Incentive Plan prohibits the grant of dividend equivalents with respect to stock options and SARs and subjects all dividends and dividend equivalents paid with respect to other awards to the same vesting conditions as the underlying shares subject to the awards; |
Responsible Plan Features
| • | The 2019 Incentive Plan prohibits “liberal share recycling,” meaning that shares used to pay the exercise price or withholding taxes relating to an award under the 2019 Incentive Plan will not be recycled back into the 2019 Incentive Plan for future grants; |
Responsible Plan Features
| • | As noted above and as described in more detail below, the amendment and restatement of the 2019 Incentive Plan includes more restrictive minimum vesting requirements, and a holding period requirement for awards granted to our Chief Executive Officer; |
Responsible Plan Features
| • | The 2019 Incentive Plan does not contain an “evergreen” feature; |
Responsible Plan Features
| • | The 2019 Incentive Plan does not contain a liberal change of control definition, meaning that an acquisition of the Company would need to be consummated to constitute a change of control; and |
Share Limits
Share Limits An aggregate of 6,278,489 shares of common stock (1,230,000 shares approved by stockholders on October 29, 2019, 1,360,000 shares approved by stockholders on October 27, 2020, 2,000,000 shares approved by stockholders on October 26, 2021, 698,000 shares approved by stockholders on October 25, 2022, and 990,489 shares transferred from the Predecessor Plan after October 29, 2019 through August 21, 2023) may be issued pursuant to awards of options, SARs, restricted stock, RSUs, performance shares or performance units, dividend equivalents, or other awards granted under the 2019 Incentive Plan. If stockholders approve this 2019 Incentive Plan Proposal, this share limit will be increased to 7,178,489 shares (an increase in the share limit, before taking into account share transfers from the Predecessor Plan, from 5,288,000 shares to 6,188,000 shares, and including the 990,489 shares that have transferred from the Predecessor Plan as of August 21, 2023). In addition, if stockholders approve this 2019 Incentive Plan Proposal the plan’s limit on the number of shares of common stock that may be delivered pursuant to “incentive stock options” under the plan will be increased from 5,288,000 shares to 6,188,000 shares (with, for purposes of clarity, any such shares to also count against the aggregate share limit for the plan). If any award granted under the 2019 Incentive Plan expires unexercised, is canceled, forfeited, settled in cash or unearned (in whole or in part), shares of our common stock subject to such award will again be made available for future grants under the 2019 Incentive Plan.
Options
Options The Compensation Committee may, in its discretion, grant incentive stock options and nonqualified stock options to participants. Non-employee directors, officers, employees, and consultants of the Company and its subsidiaries may be granted nonqualified stock options, but only employees of the Company and its subsidiaries may be granted incentive stock options. The Compensation Committee determines the exercise price of options granted under the 2019 Incentive Plan. Subject to certain exceptions in connection with a corporate transaction such as an acquisition, the exercise price of an incentive or nonqualified stock option must be at least 100% of the fair market value of the common stock subject to the option on the date the option is granted. The Compensation Committee determines, in its sole discretion, the terms of each option. Options may not be exercisable for more than ten years from the date they are granted and may not provide for any dividends or dividend equivalents thereon. Acceptable consideration for the purchase of the common stock issued upon the exercise of an option is specified in the award agreement and may include cash, check, cash equivalents, shares of common stock, a reduction in the number of shares deliverable upon exercise, or such other forms of consideration that the Compensation Committee may accept.
Restricted Stock
Restricted Stock The Compensation Committee may, in its discretion, grant restricted stock to participants in the 2019 Incentive Plan. The Compensation Committee determines, in its sole discretion, the terms of each grant of restricted stock. Subject to the terms of the award, a recipient of restricted stock generally has the rights and privileges of a stockholder with respect to the restricted stock, including the right to vote the stock, on the grant date. Dividends, if any, paid by the Company with respect to awards of restricted stock prior to the time all restrictions and vesting conditions on the restricted stock have lapsed are withheld by the Compensation Committee and distributed to the participant in cash or shares of common stock upon, and subject to, the release of the restrictions applicable to the underlying shares of restricted stock.
RSUs
RSUs The Compensation Committee may, in its discretion, grant RSUs to participants. An RSU is the right to receive shares of our common stock (or to the extent provided in the award agreement, cash or a combination of cash and common stock) following achievement of all vesting conditions and the lapse of all restrictions. The Compensation Committee determines, in its sole discretion, the terms of each award of RSUs. Recipients of RSUs do not have the rights and privileges of a stockholder with respect to the common stock underlying such RSUs, including the right to vote the stock or receive dividends on the stock, until common stock in respect of the RSUs is actually issued to the recipient following satisfaction of all vesting conditions. If dividends are paid by the Company with respect to common stock underlying an award of RSUs prior to the time all vesting conditions on the RSU have been satisfied, an RSU award may provide that the recipient will be credited with dividend equivalents with respect to the RSUs. Any such dividend equivalents will be subject to the same vesting and payment terms that apply to the RSUs as to which the dividend equivalents were credited. RSUs may be settled in shares of our common stock, cash or a combination thereof in the discretion of the Compensation Committee.
Cash Incentive Awards, Performance Shares, and Performance Units
Cash Incentive Awards, Performance Shares, and Performance Units The Compensation Committee may, in its discretion, also grant performance shares, performance units or cash incentive awards to participants under the 2019 Incentive Plan. Each grant specifies the number or amount of performance shares or performance units, or the amount payable with respect to cash incentive awards, which number or amount may be subject to adjustment to reflect changes in compensation or other factors. These awards, when granted under the 2019 Incentive Plan, become payable to participants upon the
Cash Incentive Awards, Performance Shares, and Performance Units
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 27 |
Cash Incentive Awards, Performance Shares, and Performance Units
achievement of specified management objectives and upon such terms and conditions as the Compensation Committee determines at the time of grant. Each grant may specify, with respect to the management objectives, a minimum acceptable level of achievement and may set forth a formula for determining the number of performance shares or performance units, or the amount payable with respect to cash incentive awards, that will be earned if performance is at or above the minimum or threshold level or is at or above the target level but falls short of maximum achievement. If the Compensation Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, the manner in which it conducts its business, or other events or circumstances render the management objectives unsuitable or an adjustment thereto is appropriate, the Compensation Committee may in its discretion modify such management objectives or the acceptable levels of achievement, in whole or in part, as the Compensation Committee deems appropriate. Each grant specifies the time and manner of payment of cash incentive awards, performance shares or performance units that have been earned, and any grant may further specify that any such amount may be paid or settled in cash, shares of common stock, restricted stock, restricted stock units or any combination thereof. Any grant of performance shares may provide for the payment of dividend equivalents in cash or in additional shares of common stock, subject to deferral and payment on a contingent basis based on the participant’s earning of the performance shares with respect to which such dividend equivalents are paid. Each grant of performance shares, performance units or cash incentive awards is evidenced by an award agreement which specifies the applicable terms and conditions of such award, including any vesting and forfeiture provisions. The performance period with respect to a cash incentive award, performance share, or performance unit is a period of time determined by the Compensation Committee on the grant date. The performance period may be subject to earlier lapse or modification, including in the event of retirement, death or disability of the participant.
Change in Control
Change in Control A Change in Control is defined in the 2019 Incentive Plan as the occurrence of any of the following events:
Change in Control
| • | A change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act; |
Change in Control
| • | The following individuals no longer constitute a majority of the members of the Board: (1) the individuals who, as of October 29, 2019, constituted the Board (the “Current Directors”); (2) the individuals who thereafter were elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of a majority of all of the Current Directors then still in office (such directors becoming “Additional Directors” immediately following their election); and (3) the individuals who were elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of a majority of all of the Current Directors and Additional Directors then still in office; |
Change in Control
| • | A tender offer or exchange offer is made whereby the effect of such offer is to take over and control the Company, and such offer is consummated for the equity securities of the Company representing more than 50% of the combined voting power of the Company’ then outstanding voting securities; |
Change in Control
| • | Following approval by the stockholders of the Company, the Company closes a reorganization, merger, consolidation or recapitalization of the Company, a reverse stock split of outstanding voting securities, or consummation of any such transaction if stockholder approval is not obtained, other than any such transaction that would result in more than 50% of the total voting power represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the holders of outstanding voting securities of the Company immediately prior to the transaction, with the voting power of each such continuing holder relative to other such continuing holders not substantially altered in the transaction; |
Change in Control
| • | The consummation of a transaction approved by our stockholders of a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or a substantial portion of the Company’s assets to another person, which is not a wholly owned subsidiary of the Company; or |
Change in Control
| • | Any “person” (as that term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly of more than 50% of the total voting power represented by the Company’s then outstanding voting securities. |
Change in Control
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 28 |
Change in Control
In the event of a Change in Control and except as the Compensation Committee may otherwise provide as to a particular award: (i) unvested options and SARs will immediately vest, except to the extent that replacement awards (as such term is defined within the 2019 Incentive Plan) are provided; (ii) any restrictions, deferral of settlement and forfeiture conditions applicable to restricted stock, RSUs, or other awards that vest solely based on continued service (and not based on the achievement of management objectives) will lapse and be deemed fully vested, except to the extent that replacement awards are provided; (iii) with respect to cash incentive awards, performance shares, performance units, and other awards that are subject to the achievement of management objectives (other than with respect to awards described as “Market Stock Units”), the management objectives will be deemed satisfied at target, the applicable performance periods will be deemed completed, and if no replacement awards are provided, remaining restrictions, deferral of settlement and forfeiture conditions will lapse and the awards will be deemed fully vested; and (iv) with respect to RSUs with management objectives described as “Market Stock Units,” a prorated portion of such units will vest based on the actual performance of the management objectives through the date of the Change in Control, while the remainder of the Market Stock Units will vest in accordance with their regular vesting schedules if replacement awards are provided, or if not, the remaining restrictions, deferral of settlement and forfeiture conditions will lapse and the Market Stock Units will be deemed fully vested.
Incentive Stock Options
Incentive Stock Options A participant who is granted an incentive stock option will not have federal income tax liability upon the grant of an incentive stock option and will not recognize regular taxable income when the incentive stock option is exercised. However, the participant will recognize alternative minimum taxable income equal to the excess of the fair market value of the purchased shares at the time of exercise over the exercise price paid for those shares, if the participant is subject to the alternative minimum tax in the taxable year of the exercise. A participant generally will recognize income in the year in which the participant disposes of the shares purchased under such incentive stock option. If the participant makes a “qualifying disposition,” the participant will recognize a long-term capital gain equal to the excess of (i) the amount realized upon the sale or disposition over (ii) the exercise price paid for the shares and the Company cannot take an income tax deduction with respect to those shares. A qualifying disposition occurs when the participant’s sale or other disposition of the shares takes place (a) more than two (2) years after the grant date of the incentive stock option and (b) more than one (1) year after the date the option was exercised for the particular shares involved in the disposition. In contrast, a “disqualifying disposition” is any sale or other disposition of the shares made before both of these minimum holding periods are satisfied. Normally, when shares purchased under an incentive stock option are subject to a disqualifying disposition, the participant will recognize ordinary income at the time of the disposition in an amount equal to the excess of (x) the lesser of (1) the amount realized upon that disposition and (2) the excess of the fair market value of the shares on the exercise date over (y) the exercise price paid for those shares. the Company will be entitled to an income tax deduction equal to the amount of ordinary income that the participant recognizes in connection with the disposition, subject to any applicable limitations under Section 162(m) of the Internal Revenue Code (“Code”).
Incentive Stock Options
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 29 |
Nonqualified Stock Options
Nonqualified Stock Options A participant who is granted a nonqualified stock option will not have federal income tax liability upon the grant of the nonqualified stock option but will recognize ordinary income in the year in which the participant exercises the option in an amount equal to the excess of (i) the fair market value of the purchased shares on the exercise date over (ii) the exercise price paid for those shares. The Company will be entitled to an income tax deduction equal to the amount of ordinary income that the participant recognizes, subject to any applicable limitations under Section 162(m) of the Code. A participant will later also recognize a capital gain to the extent that the amount realized from the subsequent sale of the shares exceeds the participant’s basis in the shares.
Restricted Stock
Restricted Stock A participant who is granted an award of restricted stock will recognize taxable income when the substantial risk of forfeiture of the shares lapses, i.e., at the time of “vesting,” unless the participant makes an election to be taxed at the time of grant. Assuming such an election is not made, the taxable income will be equal to the fair market value of the shares of restricted stock when they vest over the amount, if any, paid for those shares and the Company will be entitled to an income tax deduction equal to the amount of ordinary income that the participant recognizes, subject to any applicable limitations under Section 162(m) of the Code. The participant may elect under Section 83(b) of the Code to include as ordinary income in the year of the award an amount equal to the fair market value of the shares on the transfer date, less the amount, if any, paid for those shares. If the participant makes a Section 83(b) election, the participant will not recognize any additional income when the shares vest. If a Section 83(b) election is made, any appreciation in the value of the shares of restricted stock after the award is granted is not taxed as compensation but instead is taxed as a capital gain when the restricted shares are later sold or transferred. If the participant makes a Section 83(b) election and the restricted stock is later forfeited, the participant is not entitled to a tax deduction or a refund of the tax already paid. The Section 83(b) election must be filed with the Internal Revenue Service within thirty (30) days after the shares are awarded to the participant.
Restricted Stock Units (RSUs)
Restricted Stock Units (RSUs) A participant who is granted a RSU generally will not recognize income when the RSU is granted or vested, but only when the RSU is settled. The participant will recognize ordinary income equal to the amount of the cash or the fair market value of the stock that the participant receives on settlement. The Company will be entitled to an income tax deduction equal to the amount of ordinary income that the participant recognizes, subject to any applicable limitations under Section 162(m) of the Code.
Cash Incentive Awards, Performance Shares and Performance Units
Cash Incentive Awards, Performance Shares and Performance Units Generally, no income is recognized upon the grant of cash incentive awards, performance shares or performance units. Upon payment or settlement of cash incentive awards, performance shares or performance units, the recipient is generally required to include as taxable ordinary income in the year of receipt an amount equal to the amount of cash received and the fair market value of any non-restricted shares of common stock received. The Company will be entitled to an income tax deduction equal to the amount of ordinary income that the participant recognizes, subject to any applicable limitations under Section 162(m) of the Code.
Aggregate Past Grants Under the 2019 Incentive Plan
Aggregate Past Grants Under the 2019 Incentive Plan As of August 21, 2023, awards covering 4,978,401 shares of our common stock had been granted under the 2019 Incentive Plan, all of which were granted as PSU, RSU or MSU awards. This number of shares includes shares subject to awards granted under the 2019 Incentive Plan that expired or terminated without having been exercised or issued and became available for new award grants under the 2019 Incentive Plan. In the following table, performance-based vesting awards that were outstanding at the time the performance period was complete have been adjusted to reflect the actual performance level (which was greater than the targeted level as to those performance periods). The following table shows information regarding the distribution of all awards granted under the 2019 Incentive Plan among the persons and groups identified below, stock units vesting prior to that date, and unvested stock unit holdings as of that date.
Aggregate Past Grants Under the 2019 Incentive Plan
| | Stock Units | | | | Name and Position | Number of Shares/Units Subject to Past Awards | Number of Shares/Units Vested as of August 21, 2023 | Number of Shares/Units Outstanding and Unvested as of August 21, 2023 | | Michael Hurlston | 533,089 | 371,164 | 268,040 | | President and Chief Executive Officer | | | | | Dean Butler | 127,856 | 52,572 | 84,210 | | Senior Vice President and Chief Financial Officer | | | | | Saleel Awsare | 111,858 | 97,173 | 44,623 | | Senior Vice President and General Manager, PC and Peripherals Division | | | | | John McFarland | 138,897 | 104,387 | 66,765 | | Senior Vice President, General Counsel and Secretary | | | | | Craig Stein(1) | 51,549 | 29,365 | 25,257 | | Senior Vice President and General Manager, Mobile and IoT Division | | | | | Total for All Current Executive Officers as a Group (5 persons): | 993,485 | 625,296 | 540,235 | | Nelson Chan | 10,042 | 9,502 | 540 | | Jeffrey Buchanan | 10,042 | 9,502 | 540 | | Keith Geeslin | 10,042 | 9,502 | 540 | | Susan Hardman | 7,612 | 7,072 | 540 | | Patricia Kummrow | 3,610 | 3,070 | 540 | | Vivie Lee | 2,730 | 2,190 | 540 | | James Whims | 10,042 | 9,502 | 540 | | Total for All Current Non-Executive Directors as a Group (7 persons): | 54,120 | 50,340 | 3,780 | | Each associate of any such directors, executive officers or nominees: | - | - | - | | Each other person who has received 5% or more of the options, warrants or rights: | - | - | - | | All employees, including all current officers who are not executive officers or directors, as a group: | 3,922,915 | 1,451,963 | 2,172,610 | | Total | 4,978,401 | 2,135,480 | 2,716,625 |
Aggregate Past Grants Under the 2019 Incentive Plan
| (1) On July 31, 2023, Mr. Stein voluntarily resigned from his position as our Senior Vice President and General Manager, Mobile and IoT Division, effective as of September 23, 2023. |
Aggregate Past Grants Under the 2019 Incentive Plan
Mr. Chan and Ms. Hardman are each nominees for re-election as a director at the Annual Meeting. As of August 21, 2023, no stock options have been granted under the 2019 Incentive Plan.
Aggregate Past Grants Under the 2019 Incentive Plan
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 32 |
Equity Compensation Plan Information
Equity Compensation Plan Information For additional information on our equity compensation plans, including information about shares of our common stock that may be issued on exercise of options and warrants under all of our equity compensation plans as of June 24, 2023, please refer to the “Equity Compensation Plan Information” section of this Proxy Statement.
Meetings Held in Fiscal 2023: 5
| • | Reviewing and recommending to the Board the compensation of our non-employee directors; and |
EQUITY COMPENSATION
EQUITY COMPENSATION Under our non-employee director compensation program in effect for Fiscal 2023, each non-employee director may receive their annual cash retainer in cash or vested shares of our common stock at the director’s election. For directors electing to receive shares of our common stock in lieu of a cash retainer, the number of shares issued is determined by taking the cash retainer amount otherwise due to such director and converting it to a number of shares using the closing price of our common stock on Nasdaq on the date the shares are to be delivered to that director. In addition, non-employee directors also receive an annual grant of RSUs with a total grant value of approximately $200,000 in connection with our annual meeting of stockholders. The total grant value for the award granted in Fiscal 2023 was converted to a number of RSUs using the average closing price of our common stock on Nasdaq for the month ended October 31, 2022, and differs from the accounting value which is based on the grant date fair value determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation — Stock Compensation. The annual grant of RSUs vests in four quarterly installments through the first anniversary of the grant date (or, for a non-employee director not standing for re-election, immediately prior to the Company’s next annual meeting of stockholders). Subject to our Board’s discretion, a non-employee director appointed to our Board at any time other than in connection with an annual meeting may receive a pro-rated grant of RSUs valued on the same basis as the latest annual non-employee director grants that vests on the same schedule as the grants made to non-employee directors at the most recent annual meeting.
DIRECTOR COMPENSATION LIMITS
DIRECTOR COMPENSATION LIMITS Per the terms of our 2019 Incentive Plan, our non-employee directors are not eligible to receive, individually, compensation exceeding an aggregate maximum value of $750,000 in any fiscal year, including both cash and equity awards. The value of equity awards is based on the grant date fair value of the awards, as such grant date fair value is determined for our financial reporting purposes.
DIRECTOR COMPENSATION TABLE — FISCAL 2023
DIRECTOR COMPENSATION TABLE — FISCAL 2023 The following table sets forth summary information regarding compensation for each of our non-employee directors for Fiscal 2023. The compensation paid to Mr. Hurlston is presented in our executive compensation disclosure below. Mr. Hurlston is not entitled to receive additional compensation for his service as a director.
DIRECTOR COMPENSATION TABLE — FISCAL 2023
| Name | Fees Earned or Paid in cash (1) ($) | Stock Awards(2) ($) | Total ($) | | (a) | (b) | (c) | (d) | | Nelson Chan | $145,000 | $194,598 | $339,598 | | Jeffrey Buchanan | $90,000 | $194,598 | $284,598 | | Keith Geeslin | $80,000 | $194,598 | $274,598 | | Susan Hardman | $79,000 | $194,598 | $273,598 | | Patricia Kummrow | $67,500 | $194,598 | $262,098 | | Vivie Lee | $74,000 | $194,598 | $268,598 | | James Whims | $77,000 | $194,598 | $271,598 |
DIRECTOR COMPENSATION TABLE — FISCAL 2023
| (1) The Board reconstituted the members of each of our Board committees, effective as of October 25, 2022. The amounts reported in column (b) of the table above reflect pro rata payments to certain directors based on the number of quarters each director served on the board or on the committee to which they were appointed prior to October 25, 2022, and on and after October 25, 2022. |
DIRECTOR COMPENSATION TABLE — FISCAL 2023
| (2) Each non-employee director was granted 2,161 RSUs on November 1, 2022. The amounts reported in column (c) of the table above reflect the aggregate grant date fair value of the RSUs granted to the non-employee directors during Fiscal 2023 computed in accordance with FASB ASC Topic 718 (determined as of the date of grant of the awards, as the date of grant is determined for accounting purposes and excluding the effect of estimated forfeitures). For information on the assumptions used in the grant date fair value computations, refer to Note 12 “— Share-Based Compensation” in the Notes to Consolidated Financial Statements in the Company’s 2023 Annual Report on Form 10-K filed with the SEC for the fiscal year ended June 24, 2023. The amounts included in the Director Compensation Table above may be different from the value that will be realized by the non-employee directors upon vesting and settlement of the RSUs. |
DIRECTOR COMPENSATION TABLE — FISCAL 2023
The aggregate number of unvested RSUs outstanding as of June 24, 2023, held by each of our non-employee directors then in office are as set forth below. None of our non-employee directors held any outstanding stock options as of that date.
DIRECTOR COMPENSATION TABLE — FISCAL 2023
| Director | Unvested Stock Awards | | Nelson Chan | 1,080 | | Jeffrey Buchanan | 1,080 | | Keith Geeslin | 1,080 | | Susan Hardman | 1,080 | | Patricia Kummrow | 1,080 | | Vivie Lee | 1,080 | | James Whims | 1,080 |
DIRECTOR COMPENSATION TABLE — FISCAL 2023
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 47 |
DIRECTOR COMPENSATION TABLE — FISCAL 2023
AUDIT AND NON-AUDIT FEES KPMG has served as the Company’s independent auditor since 2003. In August 2023, the Audit Committee re-appointed KPMG as our independent auditor for the year ending June 29, 2024. The Audit Committee of the Board has determined that KPMG is independent with regard to the Company within the meaning of the Exchange Act and the applicable published rules and regulations thereunder and by the Public Company Accounting Oversight Board (the “PCAOB”).
All other NEOs
Long-Term Incentive Compensation We view long-term incentive compensation in the form of equity awards as a critical element of our executive compensation program. We use these awards to incentivize and reward our NEOs for performance that leads to long-term success and stockholder value creation, and to promote retention of critical executive officers to remain with us in an environment where competition for talent is fierce. In Fiscal 2023, we used three equity award vehicles – MSU awards, PSU awards, and RSU awards – to provide long-term incentive compensation opportunities to our NEOs as part of our annual equity compensation program.
Fiscal 2023 Long-Term Incentive Compensation Mix and Metrics
Fiscal 2023 Long-Term Incentive Compensation Mix and Metrics
MSU Metrics (CEO and All Other NEOs)
| • | Relative TSR |
MSU Metrics (CEO and All Other NEOs)
| • | Compared to the peer companies in the Russell 2000 Index |
MSU Metrics (CEO and All Other NEOs)
| • | The one- and two-year payouts are subject to a cap of 300% (maximum number of shares earned overall is 300% of target) |
MSU Metrics (CEO and All Other NEOs)
| • | Payouts for the one- and two-year performance periods will be trued up at the end of the full three-year performance period based on overachievement during the cumulative three-year performance period, subject to an aggregate cap of 300% |
MSU Metrics (CEO and All Other NEOs)
| • | Payout for each performance period requires continued employment through the end of that period |
PSU Metrics (CEO and All Other NEOs)
PSU Metrics (CEO and All Other NEOs)
PSU Metrics (CEO and All Other NEOs)
| • | Non-GAAP EPS |
PSU Metrics (CEO and All Other NEOs)
| • | One-year performance period (Fiscal 2023) |
PSU Metrics (CEO and All Other NEOs)
| • | Earned shares vest over three years, with 1/3 vesting on the first anniversary of the award grant date, and the remainder vesting in equal quarterly tranches, subject to continued employment through the applicable vesting date |
PSU Metrics (CEO and All Other NEOs)
| • | Maximum number of shares earned overall is 200% of target |
PSU Metrics (CEO and All Other NEOs)
| • | Targets may be adjusted by the Compensation Committee for merger and acquisition activity |
RSU Metrics (CEO and All Other NEOs)
RSU Metrics (CEO and All Other NEOs)
RSU Metrics (CEO and All Other NEOs)
| • | Time-based and vest over three years, with 1/3 vesting on the first anniversary of the award grant date, and the remainder vesting in equal quarterly tranches, subject to continued employment through the applicable vesting date |
RSU Metrics (CEO and All Other NEOs)
| • | For new executive officers, initial RSU awards vest over four years, with 1/4 vesting on the first anniversary of the award grant date, and the remainder vesting in equal quarterly tranches, subject to continued employment through the applicable vesting date |
RSU Metrics (CEO and All Other NEOs)
| • | Beginning in fiscal year 2024, initial RSU awards will vest over three years, with 1/3 vesting on the first Anniversary of the award grant date, and the remainder vesting in equal quarterly tranches, subject to continued employment through the applicable vesting date |
RSU Metrics (CEO and All Other NEOs)
Stockholder Engagement and Fiscal 2022 Say-on-Pay Vote At our 2022 annual meeting of stockholders, approximately 98% of the votes cast on our Say-on-Pay proposal were voted in favor of the Fiscal 2022 compensation of our NEOs. During the lead-up to the 2022 annual meeting of stockholders, members of our senior management contacted many of our largest institutional stockholders representing approximately 70% of our outstanding shares of common stock to solicit feedback on such topics as our compensation practices, proxy statement disclosure, and corporate governance policies, and to understand any stockholder concerns. This feedback was discussed with our management and shared with our full Board and the Compensation Committee. Our Board recognizes that there is always room for improvement. We are dedicated to increased transparency in our Compensation Discussion and Analysis and continued proactive stockholder engagement in the future. The Compensation Committee will continue to consider our stockholders’ views when making future decisions regarding our pay practices, proxy statement disclosure, and corporate governance policies.
RSU Metrics (CEO and All Other NEOs)
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 53 |
RSU Metrics (CEO and All Other NEOs)
Fiscal 2023 Key Compensation Decisions
RSU Metrics (CEO and All Other NEOs)
| • | Annual Performance-Based Cash Bonus Plan Payments Reflected Fiscal 2023 Company Performance. Based upon our achievement of a funding score of 53.4% under our annual performance-based cash bonus plan for Fiscal 2023, our NEOs (other than our CEO) received bonus payments in amounts ranging from $159,694 to $174,994, with a bonus payment for our CEO in the amount of $503,295 (representing 50.1% - 54.9% of each of their Fiscal 2023 target annual cash bonus opportunities, as discussed under “Fiscal 2023 Bonus Decisions,” below). |
RSU Metrics (CEO and All Other NEOs)
| • | Named Executive Officer Equity Awards. As part of our annual equity compensation program, we granted a combination of MSU awards, PSU awards, and RSU awards to our NEOs on August 17, 2022, subject to our TSR performance over a multi-year period in the case of the MSU awards, our non-GAAP EPS performance over a one-year performance period and a multi-year time-based vesting requirement in the case of the PSU awards, and a time-based vesting requirement in the case of the RSU awards. |
HOW WE MAKE COMPENSATION DECISIONS
| Role of the Compensation Committee | Role of our CEO | Role of the Compensation Consultant | | • Discharges the responsibilities of our Board relating to the compensation of our executive officers. • Periodically reviews and makes recommendations to our Board regarding the compensation of the non-employee members of our Board. • Oversees our compensation and benefits policies generally. • Oversees and evaluates the compensation plans, policies, and practices applicable to our executive officers. • Reviews and approves the performance criteria and targets for our short-term and long-term incentive compensation programs. • Administers our equity compensation plans. • Evaluates the performance of our CEO for the fiscal year and determines our CEO’s compensation in light of our goals and objectives for that year. • Considers our CEO’s recommendations in evaluating the performance of our other executive officers for the fiscal year and determining the compensation of our other executive officers. | • Attends the meetings of the Compensation Committee to review and discuss the corporate and individual goals and objectives that he/she regards as important to our overall success and other related matters. • Assesses the performance of, and our goals and objectives for, our other executive officers. • Makes recommendations for each element of the compensation for our other executive officers based on his/her evaluation of their performance. | • Conducts an analysis of the competitive market and the compensation practices of the companies in the compensation peer group and determines our compensation positioning relative to the market and our compensation peer group. • Develops market-based guidelines for the structure of our executive compensation program and reviews the overall compensation packages of our executive officers. • Conducts a review of the overall compensation program for the non-employee members of our Board. • Reviews market practices in performance share plan design. • Provides the Compensation Committee with information regarding executive compensation trends generally, as well as industry specific compensation trends. • Answers questions that may be posed by the Compensation Committee regarding compensation issues. |
HOW WE MAKE COMPENSATION DECISIONS
Compensation Peer Group and Market Review In determining the compensation of our executive officers, the Compensation Committee considers data gathered from a self-constructed group of peer companies, and published survey data for technology companies. During January 2022, after consultation with Compensia, the Compensation Committee developed and approved a compensation peer group for use in its executive compensation decisions for Fiscal 2023 based on the following selection criteria: The companies included in the compensation peer group approved by the Compensation Committee for Fiscal 2023 were as follows:
HOW WE MAKE COMPENSATION DECISIONS
| Fiscal 2023 Compensation Peer Group(1) | | | | Ambarella, Inc. | Marvell Technology, Inc. | Semtech Corporation | | Cirrus Logic Inc. | MaxLinear, Inc. | Universal Display Corporation | | Diodes Incorporated | Monolithic Power Systems Inc. | Wolfspeed, Inc. | | Lattice Semiconductor Corporation | ON Semiconductor Corporation | Xilinx, Inc. | | Lumentum Holdings Inc. | Power Integrations, Inc. | | | MACOM Technology Solutions Holdings, Inc. | Qorvo, Inc | |
HOW WE MAKE COMPENSATION DECISIONS
(1) Monolithic Power Systems Inc., Universal Display Corporation and Xilinx, Inc. were each added to the compensation peer group for Fiscal 2023 based on the selection criteria above. (2) Xilinx, Inc. was originally included in the compensation peer group for Fiscal 2023, but has since been acquired by Advanced Micro Devices, Inc. The Compensation Committee used data gathered by Compensia from the public filings of the companies in our compensation peer group, as well as data from a custom peer data cut (only one peer company was not included) drawn from the Radford Global Technology Survey database for purposes of providing additional perspective in the case of executive positions where the compensation peer group offered a limited number of relevant data points. In reviewing survey data, the Compensation Committee does not focus on any particular company in the survey (other than the peer companies listed above). In general, the Compensation Committee uses the data provided by Compensia as background information for its compensation decisions and does not “benchmark” aggregate compensation at any particular level relative to the peer companies. Except as otherwise noted in this Compensation Discussion and Analysis, decisions by the Compensation Committee are qualitative and the result of the Compensation Committee’s business judgment, which is informed by the experience of the members of the Compensation Committee as well as input from our CEO and Compensia.
GOVERNANCE AND PAY POLICIES AND PRACTICES
| What We Do | What We Don’t Do | | Maintain an independent compensation committee | No executive retirement plans | | Engage an independent compensation consultant to support the Compensation Committee | No excessive perquisites | | Conduct an annual executive compensation review | No tax reimbursements on perquisites | | Use a “pay-for-performance” compensation philosophy | No hedging or pledging of our equity securities | | Use multiple financial metrics under our annual bonus plan | No guaranteed bonuses | | Use performance-based MSUs and PSUs in our long-term incentive compensation program | No special health or welfare benefit programs for our executive officers | | Maintain stock ownership guidelines for our NEOs and a mandatory holding period for our CEO | No post-employment excise tax “gross-up” payment or other reimbursement |
COMPENSATION PHILOSOPHY AND OBJECTIVES
| ◾ | Align executive compensation with the Company’s corporate strategies, business objectives, and the creation of long-term value for our stockholders without encouraging unnecessary or excessive risk-taking; |
COMPENSATION PHILOSOPHY AND OBJECTIVES
| ◾ | Provide an incentive to achieve key strategic and financial performance measures by linking short-term incentive award opportunities and a substantial portion of long-term incentive award opportunities to the achievement of corporate and operational performance objectives in these areas; |
COMPENSATION PHILOSOPHY AND OBJECTIVES
| ◾ | Align the interests of our executive officers with those of our stockholders by linking our executive officers’ long-term incentive compensation opportunities to stockholder value and their cash incentives to our annual performance; and |
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION Our executive compensation program has five principal elements: Base Salary We use base salaries to compensate our executive officers for performing their day-to-day duties and responsibilities. In determining base salary, the Compensation Committee exercises its judgment and primarily considers each individual’s performance, experience level, role and responsibilities during the year, the competitive market for the position as reflected by peer group and relevant survey data, and the recommendations of our CEO (except with respect to his own base salary). Consistent with our compensation philosophy, the Compensation Committee sets base salaries that are at or below the market median to reinforce our desire that our annual performance-based cash bonuses and long-term incentive compensation represent the majority of our executive officers’ target total direct compensation each year. For purposes of ascertaining the competitive market, the Compensation Committee reviews compensation data compiled from our compensation peer group as well as from a custom peer data cut drawn from the Radford Global Technology Survey database.
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
Annual Performance-Based Cash Bonuses We use annual performance-based cash bonuses to motivate our NEOs to achieve our annual financial objectives as set forth in our annual operating plan, while making progress towards and supporting our longer-term strategic and growth goals. For Fiscal 2023, the design of our annual performance-based cash bonus plan (the “Fiscal 2023 Cash Bonus Plan”) linked the funding of the annual bonus pool entirely to the achievement of objective financial performance measures as selected by our Board and reflected in our annual operating plan. The annual target cash bonus pool is established by the Compensation Committee based on the aggregate target annual cash bonus opportunities for all of our employees, including our executive officers. At the beginning of each fiscal year, our Board approves our annual operating plan, which forms the basis for the corporate performance measures for our annual performance-based cash bonuses. Further, the Compensation Committee reviews and sets the framework for the annual performance-based cash bonuses for the fiscal year, including confirming the plan participants, establishing a target annual cash bonus opportunity for each participating executive officer, and selecting the corporate performance measures and related target levels for the fiscal year. The earned cash incentive amount is paid after the end of the fiscal year. Target Annual Cash Bonus Opportunities As in prior years, the Compensation Committee determined that the target annual cash bonus opportunities for each of our executive officers for Fiscal 2023 should be based on a percentage of such executive officer’s base salary. In setting these target annual cash bonus opportunities, the Compensation Committee exercised its judgment and primarily considered our overall financial and operational results for the prior fiscal year, each individual’s performance, experience level, role and responsibilities during the year, the competitive market for the position as reflected by peer group and relevant survey data, and the recommendations of our CEO (except with respect to his own target annual cash bonus opportunity). For Fiscal 2023, the Compensation Committee determined not to adjust the target annual cash bonus opportunities of any of our NEOs. Mr. Hurlston’s Fiscal 2023 target annual cash bonus opportunity was 130% of his annual base salary, and each of our other NEOs had a Fiscal 2023 target annual cash bonus opportunity of 75% of their annual base salaries. The following formula was used to calculate the actual annual cash bonus payments for participants in the Fiscal 2023 Cash Bonus Plan: Corporate Performance Metrics For purposes of the Fiscal 2023 Cash Bonus Plan, the Compensation Committee used multiple objective financial performance metrics as reflected in our annual operating plan rather than a single financial metric. For Fiscal 2023, the Compensation Committee selected three equally weighted corporate financial metrics as the performance measures for the Fiscal 2023 Cash Bonus Plan – revenue, non-GAAP gross margin percentage, and non-GAAP operating profit. The Compensation Committee believed these performance metrics were appropriate because, in its view, they represent key elements necessary to drive the successful execution of our Fiscal 2023 annual operating plan. In addition, they provided a strong emphasis on growth while managing expenses, which the Compensation Committee believed would most directly influence the creation of sustainable long-term stockholder value. Our Board set our annual operating plan at the start of Fiscal 2023. Consistent with past practices, the financial performance metrics were set at the close of the prior fiscal year which incorporated any known risks/opportunities and customer engagements which management forecasted for the Company. Our Board viewed the Fiscal 2023 Cash Bonus Plan financial performance metrics as realistic and difficult to achieve at the time they were set. For purposes of the Fiscal 2023 Cash Bonus Plan:
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
The actual achievement level for each corporate performance metric was determined based on the percentage by which we exceeded or failed to achieve the target achievement level for that metric. The actual achievement levels were equally weighted to calculate an aggregate weighted achievement score for our corporate performance for purposes of the Fiscal 2023 Cash Bonus Plan. There was a threshold level of achievement for each performance metric, below which the weighed achievement score for that metric was 0%. Funding of the bonus pool was capped at a maximum weighted achievement score of 200%. After the end of Fiscal 2023, the Compensation Committee evaluated our performance with respect to the corporate performance metrics. The Fiscal 2023 Cash Bonus Plan opportunities for our NEOs with corporate responsibilities (including Messrs. Hurlston, Butler, and McFarland) were based entirely on the performance of the foregoing metrics at the corporate level. In the case of a NEO with business unit responsibilities (including Messrs. Awsare and Stein), 50% of the NEO’s annual performance-based cash bonus opportunity was based on our corporate performance and the remaining 50% was based on revenue, non-GAAP gross margin percentage, and non-GAAP operating profit calculated at the business unit level. Fiscal 2023 Bonus Decisions Our revenue was $1,355 million, our non-GAAP gross margin percentage was 60.1%, and our non-GAAP operating profit was $419 million. Based on these results, in July 2023, the Compensation Committee determined that we had achieved 0% of the target performance level for revenue, 150% of the target performance level for non-GAAP gross margin percentage, and 10% of the target performance level for non-GAAP operating profit. Applying the weighting factor for each corporate performance metric, this resulted in an aggregate weighted achievement score of 53.4% at the corporate level. The aggregate weighted achievement score resulted in an annual cash bonus payment percentage of 53.4%, as set forth in the following table:
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
| Named Executive Officer | Actual Fiscal 2023 Base Salary | Target Annual Cash Bonus Opportunity | Target Annual Cash Bonus Opportunity (as a percentage of base salary) | Actual Cash Bonus Payment | Actual Cash Bonus Payment (as a percentage of base salary) | Actual Cash Bonus Payment (as a percentage of the Fiscal 2023 target annual cash bonus opportunity) | | Mr. Hurlston | $725,000 | $942,500 | 130% | $503,295 | 69.4% | 53.4% | | Mr. Butler | $435,000 | $326,250 | 75% | $174,218 | 40.1% | 53.4% | | Mr. Awsare(1) | $425,000 | $318,750 | 75% | $174,994 | 41.2% | 54.9% | | Mr. McFarland | $410,000 | $307,500 | 75% | $164,205 | 40.1% | 53.4% | | Mr. Stein(2) | $425,000 | $318,750 | 75% | $159,694 | 37.6% | 50.1% |
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
| (1) As our Senior Vice President and General Manager, PC and Peripherals Division, Mr. Awsare’s annual performance-based cash bonus payment was based 50% on the cash bonus payment percentage at the corporate level (53.4%) and 50% on the cash bonus payment percentage as determined for his business unit based on the same three performance metrics used at the corporate level (56.0%) resulting in an actual cash bonus payment percentage of 54.9%. We are not presenting the target achievement levels for Mr. Awsare’s performance metrics at the business unit level because we do not publicly disclose financial performance for that business unit and believe that such disclosure would result in competitive harm to the Company. |
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
| (2) As our Senior Vice President and General Manager, Mobile and IoT Division, Mr. Stein’s annual performance-based cash bonus payment was based 50% on the cash bonus payment percentage at the corporate level (53.4%) and 50% on the cash bonus payment percentage as determined for his business unit based on the same three performance metrics used at the corporate level (47.0%) resulting in an actual cash bonus payment percentage of 50.1%. We are not presenting the target achievement levels for Mr. Stein’s performance metrics at the business unit level because we do not publicly disclose financial performance for that business unit and believe that such disclosure would result in competitive harm to the Company. |
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
Long-Term Incentive Compensation We use long-term incentive compensation in the form of equity awards to incentivize our executive officers for long-term corporate performance based on the potential for increases in the value of our common stock and thereby, further align their interests with the interests of our stockholders. In July 2022, the Compensation Committee determined that the annual equity awards for our NEOs would consist of a combination of MSU awards, PSU awards, and RSU awards. The actual grant date fair values of the awards granted to our NEOs as reflected in the Fiscal 2023 Summary Compensation Table varies from the target mix due to the accounting valuation methodology for MSU awards. The size of these equity awards was determined by the Compensation Committee based on its assessment of our financial results for Fiscal 2022, its evaluation of each executive officer’s performance or expected contributions, as applicable, an assessment of the equity award practices of the companies in our compensation peer group, and an assessment of the outstanding equity awards then-held by each executive officer. In making its award decisions, the Compensation Committee exercised its judgment to set the size of each award at a level it considered appropriate to create a meaningful opportunity for reward predicated on the creation of long-term stockholder value and, in the case of PSUs, the achievement of financial goals we believed would contribute to the long-term success of the Company. The annual equity awards granted to our NEOs in Fiscal 2023 were as follows:
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
| Named Executive Officer | MSU Award (target number of shares) | PSU Award (target number of shares) | RSU Award (number of shares) | Aggregate Grant Date Fair Value | | Mr. Hurlston | 31,465 | 31,465 | 31,475 | $18,339,934 | | Mr. Butler | 9,701 | 9,701 | 9,704 | $5,654,284 | | Mr. Awsare | 7,079 | 7,079 | 7,081 | $4,125,975 | | Mr. McFarland | 6,293 | 6,293 | 6,295 | $3,667,873 | | Mr. Stein | 7,079 | 7,079 | 7,081 | $4,125,975 |
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
| MSU Award Feature | Description | | Payout Range | Three-year program with payout range of 0% to 300% of target shares | | Performance Measure | Based on our TSR performance relative to the peer companies in the Russell 2000 Index TSR | | Performance Scaling | Six and two thirds-to-one ratio for above and a four-to-one ratio for below target performance, with no payout if our TSR is equal to or below the 25th percentile of the TSR of each company in the Russell 2000 Index for each performance period, and a cumulative payout of 300% of target shares if our TSR is equal to or above the 80th percentile of the TSR of each company in the Russell 2000 Index for the one-, two-, and three-year performance periods. Performance payouts between the 25th and 50th percentiles will be determined on a linear basis and payouts between the 50th and 80th percentiles will be determined on a linear basis with performance at the 50th percentile equal to 100% of target. | | Payout Frequency | One-third of target shares eligible for payout after each of years one, two, and three | | Payouts in Years One & Two | Capped at 300% of target shares allocated to the performance period | | Payout in Year Three | The payouts for the one- and two-year performance periods are trued up based on final achievement in the three-year performance period: • Based on shares actually earned using the performance scaling ratios for the three-year performance period, subject to a cap of 300% of target shares if our TSR is equal to or above the 80th percentile of the TSR of each company in the Russell 2000 Index • If performance for full three-year performance period results in a payout that is less than the combined payout for the one-year and two-year performance periods, we do not clawback shares delivered in earlier performance periods |
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
| MSU Grant | Tranche Ending Fiscal 2023 | Payout (Percentage of Target) | | Fiscal 2020 | Third Performance Period | 200% | | Fiscal 2020 (CEO) | Third Performance Period | 100% | | Fiscal 2021 | Second Performance Period | 200% | | Fiscal 2022 | First Performance Period | 200% |
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
As of the record date, the following chart represents MSU awards earned and vested (or expected to vest) in fiscal year 2024 by our CEO for MSUs granted in Fiscal 2020 and for all of our NEOs for MSUs granted in Fiscal 2021, 2022 and 2023. PSU Awards PSU awards are earned over a one-year performance period based on the achievement of a pre-established non-GAAP EPS target. For fiscal 2023 “non-GAAP EPS” was calculated as GAAP EPS, excluding acquisition and transaction/integration-related costs, amortization of prepaid development costs, share-based compensation, vendor settlement accrual, and amortization of debt issuance costs. See Appendix A for the full definition of Non-GAAP EPS and a reconciliation of Non-GAAP EPS to GAAP EPS. The potential payout ranges from 0% to 200% of the target number of shares subject to the PSU award and is determined on a linear basis with a maximum payout of 200% of the target number of shares. Earned PSUs vest in three equal tranches over three one-year service periods with the final service period ending approximately three years from the grant date, subject to the NEO’s continued employment with us through each relevant vesting date. For Fiscal 2023, our non-GAAP EPS target was $12.47, while our actual non-GAAP EPS was $8.12, which resulted in a payout percentage of 0.458%. Because the payout percentage is less than 1.0%, in July 2023 the Compensation Committee approved a payment of cash in lieu of shares of common stock after the end of the performance period and the acceleration of the service-based vesting periods that would have applied if the PSUs were paid in shares, as follows:
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
| Named Executive Officer | PSU Award (target number of shares) | PSU Award (earned number of shares) | Total Cash Paid In Lieu of Shares on the Vesting Date | | Mr. Hurlston | 31,465 | 144 | $12,874 | | Mr. Butler | 9,701 | 44 | $3,934 | | Mr. Awsare | 7,079 | 32 | $2,861 | | Mr. McFarland | 6,293 | 28 | $2,503 | | Mr. Stein | 7,079 | 32 | $2,861 |
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
The following chart represents the PSU awards granted in Fiscal 2021, Fiscal 2022, and Fiscal 2023 and the corresponding shares earned as a percentage of target. RSU Awards Each RSU award generally vests over three years, with one-third of the total number of shares of our common stock subject to the award vesting on the first anniversary of the grant date and the remainder vesting in equal quarterly tranches until fully vested, subject to the NEO’s continued employment with us through each relevant vesting date. Prior to April 2023, RSU awards granted to newly-hired executive officers vested over four years, with one-quarter of the total number of shares of our common stock subject to the award vesting on the first anniversary of the executive officer’s employment start date, and the remainder vesting in equal quarterly tranches until fully vested, subject to the executive officer’s continued employment with us through each relevant vesting date. Now, RSU awards granted to newly-hired executive officers vest over three years, with one-third of the total number of shares of our common stock subject to the award vesting on the first anniversary of the executive officer’s employment start date, and the remainder vesting in equal quarterly tranches until fully vested, subject to the executive officer’s continued employment with us through each relevant vesting date. Health, Welfare, and Retirement Benefits Our executive officers are eligible to participate in the same standard health and welfare benefit plans, and on the same terms and conditions, as all other regular full-time employees. These benefits include medical, dental, vision, life and disability insurance benefits, and participation in our employee stock purchase plan. We maintain a tax-qualified Section 401(k) retirement savings plan for all employees who satisfy certain eligibility requirements, including requirements relating to age and length of service. Under this plan, participants may elect to make pre-tax contributions of up to 50% of their current compensation, not to exceed the applicable statutory income tax limitation. In Fiscal 2023, we made matching contributions of up to 25% of the contributions made by participants in the plan during the fiscal year, including our NEOs, up to the maximum set by the Internal Revenue Service for any calendar year, which for the 2023 calendar year is $5,625 per participant. We intend for the plan to qualify under Section 401(a) of the Code, so that contributions by employees to the plan, and income earned on plan contributions, are not taxable to employees until withdrawn from the plan. Perquisites and Other Personal Benefits We do not view perquisites or other personal benefits as a significant element of our executive compensation program. Accordingly, we do not provide perquisites or other personal benefits to our executive officers except as generally made available to our employees or in situations where we believe it is appropriate to assist an individual in the performance of the executive officer’s duties, to make the executive officer more efficient and effective, and for recruitment, motivation, or retention purposes. During Fiscal 2023, none of our NEOs received perquisites or other personal benefits that were, in the aggregate, $10,000 or more for each individual.
SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTS
SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTS We believe that severance and change of control arrangements are important parts of the overall compensation program for our executive officers. Severance arrangements provide a stable work environment and are used primarily to attract, motivate, and retain individuals with the requisite experience and ability to drive our success. The provision of enhanced severance payments and benefits for an involuntary termination of the executive officer’s employment in connection with a change of control of the Company helps to secure the continued employment and dedication of our executive officers, to reduce any concern that they might have regarding their own continued employment prior to or following a change of control, and to promote continuity of management during a corporate transaction. We do not provide for tax gross-up payments for any excise taxes imposed pursuant to Sections 280G and 4999 of the Code.
SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTS
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 62 |
SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTS
Severance Policy for Principal Executive Officers We maintain the Severance Policy for Principal Executive Officers (the “Severance Policy”), which applies to those executive officers who have been designated by our Board as a “Covered Executive” under such policy. All of our NEOs are covered by the Severance Policy. Under the Severance Policy, we will pay certain specified amounts to a designated executive officer following a termination of employment by us without “good cause” or by the executive officer for “good reason” (as such terms are defined in the policy), for a period of 12 months in the case of our CEO and six months in the case of our other designated executive officers, contingent upon the executive officer executing and not revoking a general release of all claims in favor of the Company. Change of Control Severance Policy for Principal Executive Officers We also maintain the Change of Control Severance Policy for Principal Executive Officers (the “Change of Control Severance Policy”), which applies to those executive officers who have been designated by our Board as an “Executive” under such policy. All of our NEOs are covered by the Change of Control Severance Policy. Under the Change of Control Severance Policy, we will pay certain specified amounts and provide certain specified benefits (including accelerated vesting of all outstanding and unvested equity awards granted by the Company on or after June 28, 2019 (excluding MSU awards)) to a designated executive officer following a termination of employment by us without “good cause” or by the executive officer for “good reason,” in each case within three months prior to, or 18 months following, a “change of control” (as such terms are defined in the policy), for a period of 18 months, contingent upon the executive officer executing and not revoking a general release of all claims in favor of the Company. For a summary of the material terms and conditions of the arrangements under the Severance Policy and the Change of Control Severance Policy, as well as an estimate of the potential payments and benefits payable to our NEOs, see “Potential Payments upon Termination or Change of Control” below. Outstanding Equity Awards For a discussion of the treatment of outstanding equity awards held by our NEOs in the event of a change of control of the Company or certain involuntary terminations of an NEO’s employment with us, see “Potential Payments upon Termination or Change of Control – Equity Awards” below.
OTHER COMPENSATION POLICIES
OTHER COMPENSATION POLICIES Equity Grant Policy The Compensation Committee approves annual equity awards to our executive officers at a regularly scheduled meeting in the first half of each year. However, the Compensation Committee may also approve grants of equity awards at other times of the year such as in connection with the hiring of a new executive officer or in such other circumstances as the Compensation Committee may determine appropriate. Stock Ownership Guidelines We maintain stock ownership guidelines for our executive officers to promote the alignment of the long-term interests of the members of our Board and senior executive officers with our stockholders.
Measurement
| • | Ownership includes shares owned outright, vested in-the-money stock options, and unvested RSUs (unvested PSUs and MSUs do not count), however, none of our executive officers hold any stock options |
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023 The following table sets forth summary information regarding compensation for each of our NEOs for all services rendered to us in all capacities in Fiscal 2021, 2022 and 2023.
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
| Name and Principal Positions | Fiscal Year | Salary | Bonus | Stock Awards | Non-Equity | All Other | Total | | | | ($)(1) | ($) | ($)(2) | Incentive Plan | Compensation | ($) | | | | | | | Compensation | ($)(4) | | | | | | | | ($)(3) | | | | (a) | (b) | (c) | (d) | (e) | (g) | (i) | (j) | | Michael Hurlston | 2023 | $725,000 | - | $18,339,934 | $503,295 | $9,405 | $19,577,634 | | President and Chief Executive | 2022 | $700,000 | - | $11,997,489 | $1,456,000 | $7,447 | $14,160,936 | | Officer | 2021 | $700,000 | - | $9,723,998 | $1,274,000 | $6,657 | $11,704,655 | | Dean Butler | 2023 | $435,000 | - | $5,654,284 | $174,218 | $6,311 | $6,269,813 | | Senior Vice President and Chief | 2022 | $400,000 | - | $4,093,109 | $480,000 | $5,388 | $4,978,497 | | Financial Officer | 2021 | $400,000 | - | $2,463,362 | $420,000 | $5,361 | $3,288,723 | | Saleel Awsare | 2023 | $425,000 | - | $4,125,975 | $174,994 | $8,571 | $4,734,540 | | Senior Vice President and | 2022 | $377,500 | - | $2,963,893 | $453,000 | $8,239 | $3,802,632 | | General Manager, PC & Peripherals Division | 2021 | $350,000 | $512,164(5) | $2,171,449 | $350,438 | $7,108 | $3,391,159 | | John McFarland | 2023 | $410,000 | - | $3,667,873 | $164,205 | $9,242 | $4,251,320 | | Senior Vice President, | 2022 | $390,000 | - | $2,681,434 | $468,000 | $8,172 | $3,547,606 | | General Counsel and Secretary | 2021 | $390,000 | $586,661(5) | $2,203,811 | $409,500 | $3,366 | $3,593,338 | | Craig Stein | 2023 | $425,000 | - | $4,125,975 | $159,694 | $9,961 | $4,720,630 | | Senior Vice President and | 2022 | $377,500 | $100,000(6) | $2,963,893 | $453,000 | $7,465 | $3,901,858 | | General Manager, Mobile & IoT Division | - | - | - | - | - | - | - |
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 66 |
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
| (1) All base salaries reported represent actual base salaries paid for the twelve-month periods ended June 24, 2023, June 25, 2022, and June 26, 2021. |
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
| (2) The amounts reported in column (e) of the table above for each year reflect the aggregate grant date fair value of PSUs, MSUs and RSUs awarded in the applicable year as computed in accordance with FASB ASC Topic 718 (determined as of the date of grant of the awards, as the date of grant is determined for accounting purposes and excluding the effect of estimated forfeitures). For information on the assumptions used in the grant date fair value computations, refer to Note 12 “— Share-Based Compensation” in the Notes to Consolidated Financial Statements in the Company’s 2023 Annual Report on Form 10-K filed with the SEC for the fiscal year ended June 24, 2023 (or, for awards granted prior to Fiscal 2023, the corresponding note in the Company’s Annual Report on Form 10-K for the applicable fiscal year). The amounts included in the Summary Compensation Table above, and in the tables below in this footnote, may not be indicative of the realized value of the awards if they vest. |
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
As discussed in the CD&A, in Fiscal 2021, 2022, and 2023, the Company granted annual long-term incentive awards of PSUs and MSUs to our NEOs, the vesting of which is subject, in part, to the Company’s performance. As required by applicable SEC rules, the grant date fair value of the PSUs and MSUs awarded in these years was determined based on the probable outcome (determined as of the date of grant of the awards, as the date of grant is determined for accounting purposes) of the performance-based conditions applicable to the awards. For these purposes, as of the date of grant of the awards, we determined that the “target” level of performance for the PSU awards was the probable outcome of the applicable performance-based conditions. Accordingly, for these PSU awards, the grant date fair value is included for the NEOs in the “Stock Awards” column for the year in which the award was granted based on the “target” number of shares subject to the awards. For the MSU awards, the grant date fair value was included for the NEOs in the “Stock Awards” column for the year in which the award was granted based on a Monte Carlo simulation pricing model (which probability weights multiple potential outcomes) as of the date of grant of the awards. Under the terms of the PSU and MSU awards, between 0% and 200% of the target number of shares subject to the awards can be earned and vest based on performance and the other vesting conditions applicable to the awards. The following tables present the grant date fair value (determined as described above as of the date of grant of the awards) of the PSUs and MSUs awarded to the NEOs in Fiscal 2021, 2022, and 2023 under two sets of assumptions: (a) assuming performance would be achieved at the level which we originally judged to be the probable outcome as described above (or in the case of MSUs, based on the Monte Carlo simulation pricing model), and (b) assuming that the highest level of performance for each such award would be achieved.
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
| | Aggregate Grant Date Fair Value of Annual PSU Awards | | | | | | | | Fiscal Year 2021 | | Fiscal Year 2022 | | Fiscal Year 2023 | | | | Based on | | Based on | | Based on | | | | Probable | Based on | Probable | Based on | Probable | Based on | | | Outcome as of | Maximum | Outcome as of | Maximum | Outcome as of | Maximum | | Name | the Date of Grant | Performance | the Date of Grant | Performance | the Date of Grant | Performance | | Michael Hurlston | $2,603,548 | $5,207,096 | $3,141,770 | $6,283,540 | $4,345,946 | $8,691,892 | | Dean Butler | $659,552 | $1,319,104 | $1,071,859 | $2,143,718 | $1,339,902 | $2,679,804 | | Saleel Awsare | $581,398 | $1,162,796 | $776,133 | $1,552,266 | $977,751 | $1,955,503 | | John McFarland | $590,063 | $1,180,126 | $702,160 | $1,404,320 | $869,189 | $1,738,378 | | Craig Stein | - | - | $776,133 | $1,552,266 | $977,751 | $1,955,503 |
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
| | Aggregate Grant Date Fair Value of Annual MSU Awards | | | | | | | | Fiscal Year 2021 | | Fiscal Year 2022 | | Fiscal Year 2023 | | | | Based on Monte | | Based on Monte | | Based on Monte | | | | Carlo Simulation | | Carlo Simulation | | Carlo Simulation | | | | Pricing Model as | Based on | Pricing Model as | Based on | Pricing Model as | Based on | | | of the Date of | Maximum | of the Date of | Maximum | of the Date of | Maximum | | Name | Grant | Performance | Grant | Performance | Grant | Performance | | Michael Hurlston | $4,516,902 | $5,207,096 | $5,712,942 | $6,283,520 | $9,646,661 | $13,037,837 | | Dean Butler | $1,144,258 | $1,319,104 | $1,949,056 | $2,143,718 | $2,974,066 | $4,019,706 | | Saleel Awsare | $1,008,653 | $1,162,796 | $1,411,292 | $1,552,266 | $2,170,195 | $2,933,254 | | John McFarland | $1,023,685 | $1,180,126 | $1,276,779 | $1,404,320 | $1,929,218 | $2,607,567 | | Craig Stein | - | - | $1,411,292 | $1,552,266 | $2,170,195 | $2,933,254 |
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
| (3) The amounts reported in column (g) of the table above constitute amounts earned under our annual performance-based cash bonus plan during the applicable fiscal year, which amounts are generally paid early in the next fiscal year. |
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
| (4) The following table identifies the items reported in the “All Other Compensation” column of the table for each NEO in Fiscal 2023: |
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
| Executive Officers | Company Contributions to 401(k) | Group Term Life | Total Benefits | | Michael Hurlston | $5,438 | $3,967 | $9,405 | | Dean Butler | $5,388 | $923 | $6,311 | | Saleel Awsare | $4,604 | $3,967 | $8,571 | | John McFarland | $5,275 | $3,967 | $9,242 | | Craig Stein | $5,994 | $3,967 | $9,961 |
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
| (5) Reflects retention bonuses paid to Messrs. Awsare and McFarland in Fiscal 2021. |
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
| (6) In connection with his acceptance of our offer to join the Company, Mr. Stein received a signing bonus of $100,000 on the first anniversary of his employment start date. |
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 67 |
SUMMARY COMPENSATION TABLE — FISCAL YEARS 2021, 2022 AND 2023
Employment Agreements
GRANTS OF PLAN-BASED AWARDS — FISCAL 2023
GRANTS OF PLAN-BASED AWARDS — FISCAL 2023 The following table sets forth summary information regarding the plan-based awards granted to our NEOs during Fiscal 2023.
GRANTS OF PLAN-BASED AWARDS — FISCAL 2023
| | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | Name | Type of Award | Grant Date | Approval Date (1) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Options Awards; Number of Securities Underlying Options (#) | Exercise of Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(3) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (I) | (m) | (n) | | Michael Hurlston | Bonus | - | - | - | $942,500 | $1,885,000 | - | - | - | - | - | - | - | | | MSU | 08/17/22 | 07/25/22 | - | - | - | - | 31,465 | 94,395 | - | - | - | $9,646,661 | | | PSU | 08/17/22 | 07/25/22 | - | - | - | - | 31,465 | 62,930 | - | - | - | $4,345,946 | | | RSU | 08/17/22 | 07/25/22 | - | - | - | - | - | - | 31,475 | - | - | $4,347,327 | | Dean Butler | Bonus | - | - | - | $326,250 | $652,500 | - | - | - | - | - | - | - | | | MSU | 08/17/22 | 07/25/22 | - | - | - | - | 9,701 | 29,103 | - | - | - | $2,974,066 | | | PSU | 08/17/22 | 07/25/22 | - | - | - | - | 9,701 | 19,402 | - | - | - | $1,339,902 | | | RSU | 08/17/22 | 07/25/22 | - | - | - | - | - | - | 9,704 | - | - | $1,340,316 | | Saleel Awsare | Bonus | - | - | - | $318,750 | $637,500 | - | - | - | - | - | - | - | | | MSU | 08/17/22 | 07/25/22 | - | - | - | - | 7,079 | 21,237 | - | - | - | $2,170,195 | | | PSU | 08/17/22 | 07/25/22 | - | - | - | - | 7,079 | 14,158 | - | - | - | $977,751 | | | RSU | 08/17/22 | 07/25/22 | - | - | - | - | - | - | 7,081 | - | - | $978,028 | | John McFarland | Bonus | - | - | - | $307,500 | $615,000 | - | - | - | - | - | - | - | | | MSU | 08/17/22 | 07/25/22 | - | - | - | - | 6,293 | 18,879 | - | - | - | $1,929,218 | | | PSU | 08/17/22 | 07/25/22 | - | - | - | - | 6,293 | 12,586 | - | - | - | $869,189 | | | RSU | 08/17/22 | 07/25/22 | - | - | - | - | - | - | 6,295 | - | - | $869,465 | | Craig Stein | Bonus | - | - | - | $318,750 | $637,500 | - | - | - | - | - | - | - | | | MSU | 08/17/22 | 07/25/22 | - | - | - | - | 7,079 | 21,237 | - | - | - | $2,170,195 | | | PSU | 08/17/22 | 07/25/22 | - | - | - | - | 7,079 | 14,158 | - | - | - | $977,751 | | | RSU | 08/17/22 | 07/25/22 | - | - | - | - | - | - | 7,081 | - | - | $978,028 |
GRANTS OF PLAN-BASED AWARDS — FISCAL 2023
| (1) The “Approval Date” refers to the date on which the Compensation Committee or the Board approved the award. See “Compensation Discussion and Analysis – Equity Award Grant Policy.” |
GRANTS OF PLAN-BASED AWARDS — FISCAL 2023
| (2) Our Fiscal 2023 annual cash bonus plan had no payout at the threshold achievement level and the payout at the maximum achievement level was capped at 200% of the applicable target annual cash bonus opportunity. The reported amounts reflect the applicable threshold, target and maximum annual cash bonus opportunities for our NEOs under our Fiscal 2023 annual performance-based cash bonus plan. All such awards have been paid, and the actual amounts paid are set forth under “Non-Equity Incentive Plan Compensation” in the Fiscal 2023 Summary Compensation Table. Our Fiscal 2023 annual cash bonus plan is discussed under “Compensation Discussion and Analysis — Annual Performance-Based Cash Bonuses.” |
GRANTS OF PLAN-BASED AWARDS — FISCAL 2023
| (3) These amounts present the aggregate grant date fair value of the equity awards computed in accordance with FASB ASC Topic 718 (determined as of the date of grant of the awards, as the date of grant is determined for accounting purposes). For information on the assumptions used in the grant date fair value computations, refer to Note 12 “— Share-Based Compensation” in the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended June 24, 2023. Also see footnote (2) to the Summary Compensation Table above. |
GRANTS OF PLAN-BASED AWARDS — FISCAL 2023
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 69 |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END The following table sets forth summary information regarding the outstanding equity awards held by each of our NEOs as of June 24, 2023, including the vesting dates for the portions of these awards that had not vested as of that date.
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| | | Stock Awards | | | | | Name | Grant 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 ($) (1) | | (a) | (b) | (c) | (d) | (e) | (f) | | Michael Hurlston | 08/19/19(2) | 14,943 | $1,212,774 | - | - | | | 08/19/19(3) | - | - | 193,731 | $15,723,208 | | | 09/24/19(4) | 32,810 | $2,662,860 | - | - | | | 09/24/19(5) | - | - | 38,746 | $3,144,625 | | | 08/17/20(6) | 10,214 | $828,968 | - | - | | | 08/17/20(7) | - | - | 20,432 | $1,658,261 | | | 08/17/20(8) | 14,251 | $1,156,611 | - | - | | | 08/17/21(9) | 7,810 | $633,860 | - | - | | | 08/17/21(10) | - | - | 24,972 | $2,026,728 | | | 08/17/21(11) | 15,608 | $1,266,745 | - | - | | | 08/17/22(12) | 31,475 | $2,554,511 | - | - | | | 08/17/22(13) | - | - | 31,465 | $2,553,699 | | | 08/17/22(14) | 144 | $11,687 | - | - | | Dean Butler | 10/31/19(15) | 5,129 | $416,270 | - | - | | | 08/17/20(6) | 2,587 | $209,961 | - | - | | | 08/17/20(7) | - | - | 5,176 | $420,084 | | | 08/17/20(8) | 3,610 | $292,988 | - | - | | | 08/17/21(9) | 2,665 | $216,291 | - | - | | | 08/17/21(10) | - | - | 8,520 | $691,483 | | | 08/17/21(11) | 5,322 | $431,934 | - | - | | | 08/17/22(12) | 9,704 | $787,577 | - | - | | | 08/17/22(13) | - | - | 9,701 | $787,333 | | | 08/17/22(14) | 44 | $3,571 | - | - | | Saleel Awsare | 08/17/20(6) | 2,281 | $185,126 | - | - | | | 08/17/20(7) | - | - | 4,562 | $370,252 | | | 08/17/20(8) | 3,181 | $258,170 | - | - | | | 08/17/21(9) | 1,930 | $156,639 | - | - | | | 08/17/21(10) | - | - | 6,168 | $500,595 | | | 08/17/21(11) | 3,854 | $312,791 | - | - | | | 08/17/22(12) | 7,081 | $574,694 | - | - | | | 08/17/22(13) | - | - | 7,079 | $574,532 | | | 08/17/22(14) | 32 | $2,597 | - | - | | John McFarland | 08/17/20(6) | 2,315 | $187,885 | - | - | | | 08/17/20(7) | - | - | 4,630 | $375,771 | | | 08/17/20(8) | 3,229 | $262,066 | - | - | | | 08/17/21(9) | 1,746 | $141,705 | - | - | | | 08/17/21(10) | - | - | 5,580 | $452,873 | | | 08/17/21(11) | 3,488 | $283,086 | - | - | | | 08/17/22(12) | 6,295 | $510,902 | - | - | | | 08/17/22(13) | - | - | 6,293 | $510,740 | | | 08/17/22(14) | 28 | $2,272 | - | - | | Craig Stein | 09/17/20(16) | 4,928 | $399,956 | - | - | | | 09/17/20(17) | 3,055 | $247,944 | - | - | | | 08/17/21(9) | 1,930 | $156,639 | - | - | | | 08/17/21(10) | - | - | 6,168 | $500,595 | | | 08/17/21(11) | 3,854 | $312,791 | - | - | | | 08/17/22(12) | 7,081 | $574,694 | - | - | | | 08/17/22(13) | - | - | 7,079 | $574,532 | | | 08/17/22(14) | 32 | $2,597 | - | - |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (1) The dollar amounts shown in columns (d) and (f) are determined by multiplying the number of shares or units reported in columns (c) and (e), respectively, by $81.16 per share (the Company’s closing stock price on Nasdaq on June 23, 2023, the last trading day of Fiscal 2023). |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (2) This unvested portion of the RSU award vested on August 19, 2023. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (3) This is the unvested portion of the performance-based MSUs granted to Mr. Hurlston in August 2019, which vested on August 19, 2023. The number of performance-based MSUs that may be earned will vary based on over- or under-performance of our TSR compared to that of the SPSISC Index |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 71 |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| TSR over a one-, a two-, a three-, and a four-year performance period (as determined on August 19, 2020, August 19, 2021, August 19, 2022, and August 19, 2023). Payouts are scaled such that below-target performance will result in a reduction in the number of shares of our common stock earned using a two-to-one ratio. Above-target performance will result in a payout of 100% of the target number of shares for the one-, two-, and three-year performance periods with any additional payout deferred until delivery of shares based on our performance over the four-year performance period, where Mr. Hurlston will receive the number of shares of our common stock earned using a two-to-one ratio for the four-year performance period less any shares that were delivered for the one-, two-, and three-year performance periods (subject to a cap of 200% of the target number of shares subject to the MSU awards if our TSR is 50 percentage points or more above the SPSISC Index TSR). If the shares determined for the four-year performance period less any shares that were delivered for the one-, two-, and three-year performance periods is negative, no claw-back applies. The number of shares reported in the table above reflects the maximum number of shares subject to the award that were allocated to each of the performance periods that were still in progress as of June 24, 2023. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (4) This unvested portion of the RSU award will vest in one remaining installment on September 24, 2023. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (5) This is the unvested portion of the performance-based MSUs granted to Mr. Hurlston in September 2019, which vests in one remaining installment on September 24, 2023. The number of performance-based MSUs that may be earned will vary based on over- or under-performance of our TSR compared to that of the SPSISC Index TSR over a one-, a two-, a three-, and a four-year performance period (as determined on August 18, 2021, August 18, 2022, and August 18, 2023). Payouts are scaled such that below-target performance will result in a reduction in the number of shares of our common stock earned using a two-to-one ratio. Above-target performance will result in a payout of 100% of the target number of shares for the one-, two-, and three-year performance periods with any additional payout deferred until delivery of shares based on our performance over the four-year performance period, where Mr. Hurlston will receive the number of shares of our common stock earned using a two-to-one ratio for the four-year performance period less any shares that were delivered for the one-, two-, and three-year performance periods (subject to a cap of 200% of the target number of shares subject to the MSU awards if our TSR is 50 percentage points or more above the SPSISC Index TSR). If the shares determined for the four-year performance period less any shares that were delivered for the one-, two-, and three-year performance periods is negative, no claw-back applies. The number of shares reported in the table above reflects the maximum number of shares subject to the award that were allocated to each of the performance periods that were still in progress as of June 24, 2023. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (6) This unvested portion of the RSU award vested on August 17, 2023. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (7) This is the unvested portion of the performance-based MSUs granted to our NEOs, which vested on August 17, 2023. The number of performance-based MSUs that may be earned will vary based on over- or under-performance of our TSR relative to the TSR of each company in the Russell 2000 Index over a one-, a two-, and a three-year performance period, with each such period beginning on July 1 of the fiscal year in which the award was granted and ending on June 30 at the end of the applicable period. The vesting of any earned MSUs is subject to the NEO’s continued employment through the end of the applicable performance period. No payout will occur if our TSR performance falls below the 25th percentile of the TSR of each company in the Russell 2000 Index, and a 200% payout will occur if our TSR performance exceeds the 75th percentile of the TSR of each company in the Russell 2000 Index. Performance payouts between the 25th and 75th percentiles will be determined on a linear basis with performance at the 50th percentile equal to 100% of target. The one- and the two-year performance periods payout up to 200% of the target number of shares, and the payout for the three-year performance period will be calculated based on the total target quantity for the entire grant multiplied by the payout factor, based on performance for the three-year performance period, less shares issued for the one- and two-year performance periods. If the shares determined for the three-year performance period less any shares that were delivered for the one- and two-year performance periods is negative, no claw-back applies. The number of shares reported in the table above reflects the maximum number of shares subject to the award that were allocated to each of the performance periods that were still in progress as of June 24, 2023. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (8) This is the unvested portion of the performance-based PSUs granted to the NEOs on August 17, 2020, which vested on August 17, 2023. The shares of common stock represent a 139.5% payout of the target quantity based on design win revenue (33%), non-GAAP gross margin (33%), and non-GAAP operating expense (33%) during the one-year performance period ended on June 26, 2021. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (9) This unvested portion of the RSU award vested in part on August 17, 2023, and the remainder will vest on August 17, 2024. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (10) This is the unvested portion of the performance-based MSUs granted to our NEOs on August 17, 2021, which vested in part on August 17, 2023, and the remainder of which will vest on August 17, 2024. The number of performance-based MSUs that may be earned will vary based on over- or under-performance of our TSR relative to the TSR of each company in the Russell 2000 Index over a one-, a two-, and a three-year performance period, with each such period beginning on July 1 of the fiscal year in which the award was granted and ending on June 30 at the end of the applicable period. The vesting of any earned MSUs is subject to the NEO’s continued employment through the end of the applicable performance period. No payout will occur if our TSR performance falls below the 25th percentile of the TSR of each company in the Russell 2000 Index, and a 200% payout will occur if our TSR performance exceeds the 75th percentile of the TSR of each company in the Russell 2000 Index. Performance payouts between the 25th and 75th percentiles will be determined on a linear basis with performance at the 50th percentile equal to 100% of target. The one- and the two-year performance periods payout up to 200% of the target number of shares, and the payout for the three-year performance period will be calculated based on the total target quantity for the entire grant multiplied by the payout factor, based on performance for the three-year performance period, less shares issued for the one- and two-year performance periods. If the shares determined for the three-year performance period less any shares that were delivered for the one- and two-year performance periods is negative, no claw-back applies. The number of shares reported in the table above reflects the maximum number of shares subject to the award that were allocated to each of the performance periods that were still in progress as of June 24, 2023. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (11) This is the unvested portion of the performance-based PSUs granted to the NEOs on August 17, 2021, which vested in part on August 17, 2023, and the remainder of which will vest on August 17, 2024. The shares of common stock represent a 200% payout of the target quantity based on non-GAAP EPS during the two-year performance period ended on June 24, 2023. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (12) This unvested portion of the RSU award vested in part on August 17, 2023, and the remainder will vest in two installments on August 17, 2024, and August 17, 2025. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (13) This is the unvested portion of the performance-based MSUs granted to our NEOs on August 17, 2022, which vested in part on August 17, 2023, and the remainder of which will vest in two installments on August 17, 2024, and August 17, 2025. The number of performance-based MSUs that may be earned will vary based on over- or under-performance of our TSR relative to the TSR of each company in the Russell 2000 Index over a one-, a two-, and a three-year performance period, with each such period beginning on July 1 of the fiscal year in which the award was granted and ending on June 30 at the end of the applicable period. The vesting of any earned MSUs is subject to the NEO’s continued employment through the end of the applicable performance period. No payout will occur if our TSR performance falls at or below the 25th percentile of the TSR of each company in the Russell 2000 Index, and a 300% payout will occur if our TSR performance equals or exceeds the 80th percentile of the TSR of |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 72 |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| each company in the Russell 2000 Index. Performance payouts between the 25th and 80th percentiles will be determined on a linear basis with performance at the 50th percentile equal to 100% of target. The one- and the two-year performance periods payout up to 300% of the target number of shares, and the payout for the three-year performance period will be calculated based on the total target quantity for the entire grant multiplied by the payout factor, based on performance for the three-year performance period, less shares issued for the one- and two-year performance periods. If the shares determined for the three-year performance period less any shares that were delivered for the one- and two-year performance periods is negative, no claw-back applies. The number of shares reported in the table above reflects the target number of shares subject to the award that were allocated to each of the performance periods that were still in progress as of June 24, 2023. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (14) This is the unvested portion of the performance-based PSUs granted to the NEOs on August 17, 2022. The shares of common stock represent a 0.458% payout of the target quantity based on non-GAAP EPS during the one-year performance period ended on June 24, 2023. In July 2023, the Compensation Committee approved a payment of cash in lieu of shares of common stock at a price of $89.40 per share (the Company’s closing stock price on Nasdaq on July 24, 2023, the day of the Compensation Committee’s approval) and the acceleration of the service-based vesting periods that would have applied if the PSUs were paid in shares. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (15) This unvested portion of the RSU award will vest in one remaining installment on October 21, 2023. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (16) This unvested portion of the RSU award will vest in two remaining installments on September 17, 2023, and September 17, 2024. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| (17) This is the unvested portion of the performance-based PSUs granted to Mr. Stein in September 2020, which vested on August 17, 2023. The shares of common stock represent a 139.5% payout of the target quantity based on design win revenue (33%), non-GAAP gross margin (33%), and non-GAAP operating expense (33%) during the one-year performance period ended on June 27, 2020. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 73 |
OPTION EXERCISES AND STOCK VESTED — FISCAL 2023
OPTION EXERCISES AND STOCK VESTED — FISCAL 2023 The following table summarizes the vesting of stock awards during Fiscal 2023 that were previously granted to our NEOs.
OPTION EXERCISES AND STOCK VESTED — FISCAL 2023
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | (a) | (b) | (c) | | Michael Hurlston | 270,296 | $31,419,144 | | Dean Butler | 72,845 | $7,888,217 | | Saleel Awsare | 49,832 | $5,507,116 | | John McFarland | 46,052 | $5,122,054 | | Craig Stein | 16,704 | $2,104,233 |
OPTION EXERCISES AND STOCK VESTED — FISCAL 2023
| (1) The dollar amounts shown in column (c) above are determined by multiplying the number of shares or units, as applicable, that vested by the Company’s closing stock price per share on the vesting date. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL The following section describes the payments and benefits that would be provided to certain NEOs in connection with a termination of their employment with the Company and/or a change of control of the Company as of June 24, 2023.
Pay Versus Performance
Pay Versus Performance The following table summarizes information regarding the compensation for our principal executive officer (“ PEO ”) and other NEOs, excluding the CEO (the “ Non-PEO NEOs ”), including CAP, as well as certain financial performance metrics during Fiscal 2023, 2022 and 2021.
Pay Versus Performance
| | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Fiscal Year | Summary Compensation Table Total for PEO (1)(2) | Compensation Actually Paid to PEO (3) | Average Summary Compensation Table Total for Non-PEO NEOs (2)(4) | Average Compensation Actually Paid to Non-PEO NEOs (5) | Total Shareholder Return (6) | Peer Group Total Shareholder Return (7) | Net Income (in millions) | Non-GAAP Earnings Per Share (8) | | 2023 | $19,577,634 | ($65,368,395) | $4,994,076 | ($2,111,995) | $144.26 | $132.90 | $73.60 | $8.12 | | 2022 | $14,160,936 | ($56,484,103) | $4,057,648 | $2,094,078 | $228.90 | $124.24 | $257.50 | $13.54 | | 2021 | $11,704,655 | $140,626,141 | $3,595,333 | $16,493,865 | $262.32 | $164.25 | $79.60 | $8.26 |
Pay Versus Performance
| (1) Mr. Hurlston served as our PEO in each of Fiscal 2023, 2022, and 2021. |
Pay Versus Performance
| (2) The amounts in these columns correspond with total compensation for our NEOs as reported in our Summary Compensation Table above for the covered fiscal years. |
Pay Versus Performance
| (3) The amounts in this column represent CAP, calculated in accordance with Item 402(v) of Regulation S-K during the listed fiscal years, as set forth below. As noted above, CAP does not represent how the Company or Compensation Committee values compensation paid to or received by our PEO. |
Pay Versus Performance
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 79 |
Pay Versus Performance
| Reconciliation of Summary Compensation Table Total Compensation for CEO to Compensation Actually Paid | | | | | | | | | | | | Equity Award Adjustments | | | | | | | | Deduct: | Add: | Add/(Deduct): | Add/(Deduct): | | | | Fiscal Year | Summary Compensation Table Total for PEO (1)(2) | Value of Equity Awards Reported in Summary Compensation Table (a) | Year End Fair Value of Awards Granted During the Year which were Unvested at Year End (b) | Year Over Year Change in Fair Value of Outstanding and Unvested Awards (b) | Change in Fair Value of Awards Granted in Prior Years which Vested During the Year (c) | Total Equity Award Adjustments | Compensation Actually Paid to PEO | | 2023 | $19,577,634 | ($18,339,934) | $11,701,680 | ($38,181,102) | ($40,126,673) | ($66,606,095) | ($65,368,395) | | 2022 | $14,160,936 | ($11,997,489) | $19,705,417 | ($45,635,266) | ($32,717,701) | ($58,647,550) | ($56,484,103) | | 2021 | $11,704,655 | ($9,723,998) | $36,248,750 | ($13,803,718) | $116,200,452 | $138,645,484 | $140,626,141 |
Pay Versus Performance
| (a) The amounts in this column correspond with the full grant date fair value, calculated in accordance with FASB ASC Topic 718, of “Stock Awards” as reported in our Summary Compensation Table above for the covered fiscal years. |
Pay Versus Performance
| (b) The equity award adjustments were calculated in accordance with the SEC methodology for determining CAP for each year shown. For PSU awards, the amounts in these columns were determined by reference to the closing price of our common stock on the applicable fiscal year end date. For MSU awards where the performance period was not yet complete as of the applicable fiscal year end date, the amounts in these columns were determined by reference to the fair values of the awards, as calculated by a Monte Carlo simulation model as of the applicable fiscal year end date. |
Pay Versus Performance
| (c) The equity award adjustments were calculated in accordance with the SEC methodology for determining CAP for each year shown. For MSU awards where the performance period was complete during the applicable fiscal year, the amounts in this column were determined by reference to the grant date fair value of the awards, as calculated by a Monte Carlo simulation model as of the applicable fiscal year end date relative to the closing price of our common stock on the applicable vesting dates. |
Pay Versus Performance
| (4) The individuals comprising the Non-PEO NEOs for each covered fiscal year are listed below: |
Pay Versus Performance
| 2021 | 2022 | 2023 | | Dean Butler | Dean Butler | Dean Butler | | Saleel Awsare | Saleel Awsare | Saleel Awsare | | John McFarland | John McFarland | John McFarland | | Philip Kumin | Craig Stein | Craig Stein |
Pay Versus Performance
| (5) The amounts in this column represent the average CAP of our Non-PEO NEOs, calculated in accordance with Item 402(v) of Regulation S-K during the listed fiscal years, as set forth below. As noted above, CAP does not represent how the Company or Compensation Committee values compensation paid to or received by our NEOs. |
Pay Versus Performance
| Reconciliation of Summary Compensation Table Total Compensation for Non-PEO NEOs to Compensation Actually Paid | | | | | | | | | | | | Equity Award Adjustments | | | | | | | | Deduct: | Add: | Add/(Deduct): | Add/(Deduct): | | | | Fiscal Year | Summary Compensation Table Total for Non-PEO NEOs 1)(2) | Value of Equity Awards Reported in Summary Compensation Table (a) | Year End Fair Value of Awards Granted During the Year which were Unvested at Year End (b) | Year Over Year Change in Fair Value of Outstanding and Unvested Awards (b) | Change in Fair Value of Awards Granted in Prior Years which Vested During the Year (c) | Total Equity Award Adjustments | Compensation Actually Paid to Non-PEO NEOs | | 2023 | $4,994,076 | ($4,393,527) | $2,289,509 | ($1,944,152) | ($3,057,901) | ($2,712,544) | ($2,111,995) | | 2022 | $4,057,648 | ($3,175,582) | $5,215,729 | ($1,749,317) | ($2,254,400) | $1,212,012 | $2,094,078 | | 2021 | $3,595,333 | ($2,098,558) | $7,822,967 | ($100,419) | $7,274,542 | $14,997,090 | $16,493,865 |
Pay Versus Performance
| (a) The amounts in this column correspond with the full grant date fair value, calculated in accordance with FASB ASC Topic 718, of “Stock Awards” as reported in our Summary Compensation Table above for the covered fiscal years. |
Pay Versus Performance
| (b) The equity award adjustments were calculated in accordance with the SEC methodology for determining CAP for each year shown. For PSU awards, the amounts in these columns were determined by reference to the closing price of our common stock on the applicable fiscal year end date. For MSU awards where the performance period was not yet complete as of the applicable fiscal year end date, the amounts in these columns were determined by reference to the fair values of the awards, as calculated by a Monte Carlo simulation model as of the applicable fiscal year end date. |
Pay Versus Performance
| (c) The equity award adjustments were calculated in accordance with the SEC methodology for determining CAP for each year shown. For MSU awards where the performance period was complete during the applicable fiscal year, the amounts in this column were determined by reference to the grant date fair value of the awards, as calculated by a Monte Carlo simulation model as of the applicable fiscal year end date relative to the closing price of our common stock on the applicable vesting dates. |
Pay Versus Performance
| (6) TSR for each of Fiscal 2023, 2022 and 2021 is cumulative, reflecting the value of a fixed $100 investment beginning with the market close on June 26, 2020, the last trading day before the first day of Fiscal 2021, through and including the end of the respective covered fiscal years. |
Pay Versus Performance
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 80 |
Pay Versus Performance
| (7) The Russell 2000 Index is the industry peer group we use for purposes of Item 201(e) of Regulation S-K. The separate peer group referenced by the Compensation Committee for purposes of determining executive compensation is discussed above in the CD&A. |
Pay Versus Performance
| (8) Our Company-Selected Measure, as required by Item 402(v) of Regulation S-K, is Non-GAAP EPS, which, in our assessment, represents the most important financial performance measure linking Fiscal 2023 NEO CAP to company performance. See Appendix A for a definition of Non-GAAP EPS and a reconciliation of Non-GAAP EPS to GAAP EPS. |
Analysis of the Information Presented in the Pay versus Performance Table
Analysis of the Information Presented in the Pay versus Performance Table As described in more detail in the CD&A, the Company’s executive compensation program reflects a variable pay-for-performance philosophy. While the Company utilizes several performance measures to align executive compensation with Company performance, all of those measures are not presented in the Pay versus Performance table. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with CAP (as computed in accordance with Item 402(v) of Regulation S-K) for a particular fiscal year. In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table. The following graphs illustrate how CAP for our NEOs aligns with the Company’s financial performance measures as detailed in the Pay Versus Performance table above for each of Fiscal 2021, 2022 and 2023, as well as between the TSRs of the Company and the Russell 2000 Index, reflecting the value of a fixed $100 investment beginning with the market close on June 26, 2020, the last trading day before the first day of Fiscal 2021, through and including the end of the respective covered fiscal years.
Analysis of the Information Presented in the Pay versus Performance Table
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 81 |
Compensation Actually Paid and TSR
Compensation Actually Paid and TSR
Compensation Actually Paid and Net Income
Compensation Actually Paid and Net Income
Compensation Actually Paid and Net Income
| SYNAPTICS INCORPORATED | PROXY STATEMENT | 82 |
Compensation Actually Paid and
Compensation Actually Paid and