DEF 14A of Cognex Corp, Mar 15, 2024

DEF 14A of Cognex Corp

Filed Mar 15, 2024 · FY20230001193125-24-068649

Open on EDGAR

  1. Board Meetings, Committees and Attendance

    | • | Reviews and makes recommendations to the Board regarding the compensation of our Directors. |

  2. Director Nominees

    Director Nominees When considering a potential candidate for membership on our Board of Directors, the Nominating, Governance and Sustainability Committee will consider any criteria it deems appropriate, including, among other things, the experience and qualifications of any particular candidate as well as such candidate’s past or anticipated contributions to our Board and its committees. At a minimum, each nominee is expected to have high personal and professional integrity and demonstrated ability and judgment to be effective, with the other Directors and management, in collectively serving the long-term interests of our shareholders. Each nominee is expected to be personable and support our “Work Hard, Play Hard, Move Fast” culture. Further, each nominee is expected to have direct and significant experience in one or more industries or markets in which our company does, or plans to do, business, and/or significant senior-level management experience in functions or roles which are helpful to our company. This includes finance, accounting, legal, human resources, engineering, manufacturing, and sales and marketing. In addition to the minimum qualifications set forth above, when considering potential candidates for our Board of Directors, the Nominating, Governance and Sustainability Committee seeks to ensure that the Board of Directors is comprised of a majority of independent Directors, that the committees of the Board are comprised entirely of independent Directors, and that at least one member of the Audit Committee qualifies as an “audit committee financial expert” under SEC rules. The Nominating, Governance and Sustainability Committee may also consider any other standards that it deems appropriate. The Nominating, Governance and Sustainability Committee considers the composition of our Board overall, with the goal of having a combination of backgrounds, skills and knowledge to help promote Cognex’s long-term strategy. In particular, the committee, when recommending director candidates to the full Board for nomination, may consider whether a director candidate, if elected, assists in achieving a mix of Board members that represents a diversity of background and experience. Board diversity, including with respect to ethnicity, age and gender, continues to be a priority of the Board. In 2017, our Board amended our corporate governance guidelines to require our Nominating, Governance and Sustainability Committee to include women and individuals from minority groups who meet the required qualifications on the initial list of director candidates from which new board nominees are chosen. In addition, any search firm retained by the Nominating, Governance and Sustainability Committee is required to abide by these guidelines. Since these requirements were added to our corporate governance guidelines, Dr. Parrotte (in 2018), Mr. Lawande (in 2021), Ms. Sennett (in 2021), Dr. Lee (in 2022), and Mr. Papadimitriou (in 2023) have been elected to the Board. The Nominating, Governance and Sustainability Committee believes that there will be opportunities over the next one-to-three years to continue to add strong, independent and diverse directors to the Board. In practice, the Nominating, Governance and Sustainability Committee generally will evaluate and consider all candidates recommended by our Directors, officers and shareholders. The Nominating, Governance and Sustainability Committee intends to consider shareholder recommendations for directors using the same criteria as potential nominees recommended by the members of the Nominating, Governance and Sustainability Committee or others. The Nominating, Governance and Sustainability Committee did not receive any shareholder nominations for director with respect to this Annual Meeting of Shareholders. Shareholders who wish to submit Director candidates for consideration as nominees for election at our 2025 Annual Meeting of Shareholders should send such recommendations to the Secretary of Cognex Corporation at our executive offices on or before November 15, 2024. These recommendations must include:

  3. Director Nominees

    | • | the name and address of record of the shareholder; |

  4. Director Nominees

    | • | a representation that the shareholder is a record holder of our common stock, or if the shareholder is not a record holder, evidence of ownership in accordance with Rule 14a-8(b)(2) of the Exchange Act; |

  5. Director Nominees

    | • | the name, age, business and residential address, educational background, current principal occupation or employment, and principal occupation or employment for the preceding ten full fiscal years of the proposed Director candidate; |

  6. Director Nominees

    | • | a description of the qualifications and background of the proposed Director candidate which addresses the minimum qualifications described above and any other criteria for Board membership approved by the Board from time to time; |

  7. Director Nominees

    | • | a description of all arrangements or understandings between the shareholder and the proposed Director candidate; and |

  8. Director Nominees

    | • | the consent of the proposed Director candidate to be named in the proxy statement, to serve as a Director if elected at such meeting, and to give our company the authority to carry out a detailed and thorough investigation of his/her educational, professional, financial and personal history. |

  9. Director Nominees

    Shareholders must also submit any other information regarding the proposed Director candidate that is required to be included in a proxy statement filed pursuant to SEC rules. See also the information under the heading “Shareholder Proposals.”

  10. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS Our Board of Directors currently consists of seven Directors and is divided into three classes, with one class being elected each year for a term of three years. We are proposing that Sachin Lawande and Marjorie T. Sennett be elected to serve terms expiring at the 2027 Annual Meeting of Shareholders and in each case until a successor is duly elected and qualified or until his or her earlier death, resignation or removal. Biographical information including the key attributes and skills the director nominees bring to our Board is set forth below. OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF SACHIN LAWANDE AND MARJORIE T. SENNETT. The persons named in the accompanying proxy will vote, unless a shareholder specifies otherwise, “FOR” the election of the nominees named above. Our Board of Directors anticipates that each nominee, if elected, will serve as a Director. If a nominee is unable to accept election, the persons named in the accompanying proxy will vote for such substitute as our Board of Directors may recommend. There are no family relationships between any incumbent Director or any Director nominee and any executive officer of Cognex or its subsidiaries.

  11. Information Regarding Directors and the Director Nominees

    Information Regarding Directors and the Director Nominees Set forth below is information furnished to us by the Director nominees and the incumbent Directors whose terms will continue after the meeting. The biographical description for each Director and Director nominee includes his or her age, all positions he or she holds with Cognex, his or her principal occupation and business experience over the past five years, and the names of other publicly held companies for which he or she currently serves as a director or has served during the past five years. It also includes the specific experience, qualifications, attributes and skills that led to our Board’s conclusion that the nominee should serve as a director of Cognex or, with respect to each Director who is not standing for election, that the Board would expect to consider if it were making a conclusion currently as to whether he or she should serve as a director. We believe that all of our Directors have a reputation for integrity, honesty and adherence to high ethical standards. Each has demonstrated business acumen and an ability to exercise sound judgment as well as a commitment of service to Cognex and, to the extent applicable, our Board. Our Board does not currently evaluate whether incumbent Directors who are not standing for election should serve as directors, as the terms for which they were previously elected continue beyond the meeting. Nominated for a term ending in 2027: Sachin Lawande, 56, has served as a Director since January 1, 2021. Mr. Lawande is the President and Chief Executive Officer of Visteon Corporation (VC), a leading global technology supplier of vehicle cockpit electronic products. Mr. Lawande has held this position since 2015. Previously, he worked for Harman International Industries, Inc. (HAR), which was an independent public company at the time, for 10 years, where he held a range of leadership positions including president of the company’s largest division with nearly $3 billion in annual sales. Since 2015, Mr. Lawande has served as a Director of Visteon Corporation, a publicly held company listed on Nasdaq. He was also on the board of DXC Technology Company (DXC) from 2015 until August 2020. Mr. Lawande holds a B.S. from Bombay University, and a Master’s Degree from Southern Illinois University at Edwardsville, in Electrical and Electronics Engineering. We believe Mr. Lawande’s qualifications for sitting on the Board of Directors include his executive leadership experience, including his service as chief executive officer of a large public company, perspective from his service on other public company boards, expertise in the automotive, technology and software industries, and international experience, including experience with manufacturing and engineering operations in India. Marjorie T. Sennett, 63, has served as a Director and member of the Audit Committee since November 3, 2021. Ms. Sennett currently serves as a member of the Board of Directors and Chair of the Audit Committee of The diaTribe Foundation, a private entity focused on improving the outcomes of people with diabetes. From 2014 to 2018, she was a Director and member of the Audit Committee at QuinStreet, Inc. (QNST), a performance marketing technology company. Named one of “20 Women in Finance You Should Add to Your Company’s Board” by Business Insider, Ms. Sennett previously served as a Managing Director of Farallon Capital Management, LLC where she invested in publicly traded securities for eight years. Before that, she was Chief Financial Officer at eGroups, Inc., where she co-led the sale of the company to then publicly held Yahoo! Inc., and at Amylin Pharmaceuticals, Inc., where she led the company’s initial public offering and multiple follow-on public offerings. Ms. Sennett holds a B.A. from Vanderbilt University and an M.B.A. from Stanford University. We believe Ms. Sennett’s qualifications for sitting on our Board of Directors include her public board experience, extensive knowledge of corporate finance and financial reporting, financial leadership for fast-growing companies in the biotechnology and technology sectors, and experience as an institutional investor. Serving a term ending in 2026: Angelos Papadimitriou, 57, has served as a Director since February 17, 2023. Mr. Papadimitriou currently serves as Chairman of the Board of Directors of Athena Ventures, an investment firm focusing on early-stage ventures. Mr. Papadimitriou is also the Executive Chairman of the Board of Director of Celli Group, a global leader in drink dispensing systems, headquartered in Italy. Mr. Papadimitriou has held this position since July 2023. From August 2020 to February 2021, Mr. Papadimitriou was the Co-Chief Executive Officer of Pirelli & C. S.p.A., a public company listed on the Milan Stock Exchange. Mr. Papadimitriou previously led Coesia S.p.A., a group of global industrial and packaging solutions companies as their Chief Executive Officer for ten years. Prior to that, Mr. Papadimitriou spent over fifteen years in the pharmaceutical industry, including as Senior Vice President for Italy and Southeast Europe at GlaxoSmithKline. Mr. Papadimitriou also serves as a board member of several private companies. Mr. Papadimitriou holds an M.B.A. from Harvard Business School and a B.A. in Computer Science and Business Economics from Brown University. We believe Mr. Papadimitriou’s qualifications for sitting on our Board of Directors include his executive leadership experience, including his service as chief executive officer of a large public company, perspective from his service on other company boards and expertise in the packaging machinery and industrial automation industries and European and international markets. Dianne M. Parrotte, M.D., M.P.H., 74, has served as a Director since 2018. Since 1995, Dr. Parrotte has been an independent consultant to corporations, law firms and insurance companies on human resource matters involving employee health and wellness. She was a trustee of the Shillman Foundation from March 2000 until her resignation in February 2018. From 1989 until 1995, Dr. Parrotte was chief in charge of occupational health at Bath Iron Works (later acquired by General Dynamics). From 1982 to 1988, she was the on-site Medical Director at Polaroid Corporation. Dr. Parrotte served as a Cognex Director from 1981, at the time of the company’s incorporation, to 1982. In addition to numerous certifications and licenses, Dr. Parrotte holds an M.P.H. from the Medical College of Wisconsin, an M.D. from the Boston University School of Medicine and a B.A. from Boston University. She is Board Certified in Occupational and Environmental Medicine as well as in Internal Medicine. She is a former Fellow of the American College of Occupational and Environmental Medicine. She also completed the Penn State Executive Program. During the past five years, Dr. Parrotte has not served as a member of the Board of Directors of another publicly held company or of a registered investment company. We believe Dr. Parrotte’s qualifications for sitting on our Board of Directors include her experience with a wide range of human resource and organizational matters related to large public companies, as well as her significant knowledge of the history and culture of Cognex. Serving a term ending in 2025:

  12. Information Regarding Directors and the Director Nominees

    John T.C. Lee, 61, has served as a Director since May 4, 2022. Dr. Lee is currently the President and Chief Executive Officer of MKS Instruments, Inc. (Nasdaq: MKSI), a global provider of instruments, systems, subsystems and process control solutions for advanced manufacturing processes. Dr. Lee has held this position since January 2020. He has also served on the MKS Board of Directors since January 2020. From October 2007 to January 2020, Dr. Lee held a series of progressive leadership roles at MKS, including Chief Operating Officer from 2016 to 2019. Prior to joining MKS, Dr. Lee served in various capacities in various technology industries, including semiconductor and solar as well as plasma processing research, at leading technology companies, including Applied Materials, Lucent Technologies and AT&T Bell Labs. He has served as a member of the Executive Committee of the Board of Directors of the Massachusetts High Technology Council since 2021, as their Vice Chair from 2021 to 2023 and as their Chair since 2023. Dr. Lee holds a B.S. from Princeton University and both an M.S.C.E.P. and a Ph.D. from the Massachusetts Institute of Technology, all in Chemical Engineering. We believe Dr. Lee’s qualifications for sitting on the Board of Directors include his executive leadership experience, including his service as chief executive officer of a large public company, perspective from his service on other public company boards, expertise in the semiconductor and technology industries, and international experience. Anthony Sun, 71, has served as a Director since 1982. Mr. Sun served as a managing general partner and Chief Executive Officer of Venrock Associates, a venture capital partnership, from 1997 until his retirement in 2010. He began his tenure at Venrock in 1979 and was a general partner from 1980 to 1997. Mr. Sun has also served as a member of the Boards of Directors of several private companies. During the past five years, Mr. Sun has not served as a member of the Board of Directors of another publicly held company or of a registered investment company. Mr. Sun holds a B.S. and M.S. in Engineering from the Massachusetts Institute of Technology and an M.B.A. from Harvard University. We believe Mr. Sun’s qualifications for sitting on our Board of Directors include his executive experience, his expertise in the high-technology industry, particularly having served as a member of the Board of Directors of more than a dozen public high-tech companies in the past, and the deep understanding of our company that he has acquired through service on our Board. Robert J. Willett, 56, has served as a Director and Chief Executive Officer of Cognex since 2011. Mr. Willett joined our company in 2008 as President of the Modular Vision Systems Division and was promoted to President and Chief Operating Officer in 2010. He came to Cognex from Danaher Corporation, where he served as Vice President of Business Development and Innovation for the Product Identification Business Group and as President of Videojet Technologies, a leader in coding and marking products. Prior to that, Mr. Willett served as Chief Executive Officer of Willett International Ltd., a coding and marking company that was sold to Danaher and merged with Videojet. Mr. Willett currently serves as a Director of Clean Harbors, Inc. (CLH), a publicly held company listed on the New York Stock Exchange. Mr. Willett holds a B.A. from Brown University, and an M.B.A. from Yale University. We believe Mr. Willett’s qualifications for sitting on our Board of Directors include his experience in the machine vision industry, his executive leadership experience and the knowledge of our company that he has acquired through his management roles.

  13. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The following table sets forth the compensation earned by or awarded to each Director who served on our Board of Directors in 2023, other than Mr. Willett. Details of Mr. Willett’s compensation is set forth under the heading “Executive Compensation—Summary Compensation Table.”

  14. Director Compensation Table—2023

    Director Compensation Table—2023

  15. Director Compensation Table—2023

    | Name | Fees Earned or Paid in Cash (1) ($) | Stock Awards (2)(3) ($) | Option Awards (4) ($) | All Other Compensation ($) | Total Compensation ($) | | Patrick A. Alias (5) | $— | $— | $— | $98,722(6) | $98,722 | | Theodor Krantz (7) | $30,000 | $— | $— | $— | $30,000 | | Sachin S. Lawande | $64,333 | $271,533 | $— | $— | $335,866 | | John T.C. Lee | $73,333 | $271,533 | $— | $— | $344,866 | | Dianne M. Parrotte | $72,000 | $271,533 | $— | $— | $343,533 | | Angelos Papadimitriou | $70,886 | $236,531 | $— | $— | $307,417 | | Marjorie T. Sennett | $68,333 | $271,533 | $— | $— | $339,866 | | Anthony Sun | $128,000(8) | $271,533 | $— | $— | $399,533 |

  16. Director Compensation Table—2023

    | (1) Fees are presented in the year earned. The payment of such amounts may occur in other years (i.e., 2024). |

  17. Director Compensation Table—2023

    | (2) In 2023, each Director, other than Mr. Willett, Mr. Papadimitriou, Mr. Alias and Mr. Krantz, was granted 5,826 RSUs. Mr. Papadimitriou was granted 5,075 RSUs upon his appointment to the Board in February 2023. All Director RSU awards began vesting in annual installments of 20%, 30% and 50% on February 21, 2024. All equity award agreements covering the unvested equity awards held by our non-employee Directors provide for such equity awards to vest immediately upon a “change of control” of Cognex, which is defined as a corporate transaction in which the holders of Cognex common stock before the transaction control less than 51% of the stock of Cognex or any successor corporation after the transaction. Amounts listed in this column represent the grant date fair value of RSUs. The methodology and assumptions used to calculate the grant date fair value are described in “Note 16, Stock-Based Compensation” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Cognex recognizes the grant date fair value as an expense for financial reporting purposes over the service-based vesting period. See also the information under the heading “Director Compensation—Elements of Director Compensation.” |

  18. Director Compensation Table—2023

    | (3) Each Director, other than Mr. Willett, had the following unvested RSUs outstanding on December 31, 2023: Mr. Alias, 4,934 shares; Mr. Krantz, 0 shares; Mr. Lawande, 10,760 shares; Dr. Lee 8,783 shares; Dr. Parrotte, 10,760 shares; Mr. Papadimitriou, 5,075 shares; Ms. Sennett, 9,513 shares; and Mr. Sun, 10,760 shares. Mr. Krantz forfeited 4,934 RSUs in connection with the completion of his term on the Board on May 3, 2023. No other Directors forfeited any RSUs in 2023. |

  19. Director Compensation Table—2023

    | (4) Each Director, other than Mr. Willett, had the following options outstanding on December 31, 2023: Mr. Alias, 129,231 shares; Mr. Krantz, 0 shares; Mr. Lawande, 0 shares; Dr. Lee 0 shares; Dr. Parrotte, 44,000 shares; Mr. Papadimitriou, 0 shares; Ms. Sennett, 0 shares; and Mr. Sun, 166,000 shares. 12,400 stock options held by Mr. Krantz were terminated in connection with the completion of his term on the Board on May 3, 2023. No other Directors forfeited any stock options in 2023. |

  20. Director Compensation Table—2023

    | (5) Mr. Alias completed his term on the Board on May 3, 2023 following the 2023 Annual Meeting of Shareholders. Mr. Alias remains an employee of the company in an advisory role. As such, the RSUs and options held by Mr. Alias remain eligible to continue vesting in accordance with their terms. |

  21. Director Compensation Table—2023

    | (6) Includes Mr. Alias’ salary of $94,087 and a $3,547 bonus under our annual bonus program, both of which were earned by Mr. Alias during 2023 in his capacity as a non-executive employee of Cognex, as well as life insurance premiums of $1,088. |

  22. Director Compensation Table—2023

    | (7) Mr. Krantz completed his term on the Board on May 3, 2023 following the 2023 Annual Meeting of Shareholders. |

  23. Director Compensation Table—2023

    | (8) Paid to Sun Management Associates, LLC, a California limited liability company, of which Mr. Sun is a member. |

  24. Elements of Director Compensation

    Elements of Director Compensation The Compensation/Stock Option Committee reviews our non-employee Director compensation on a regular basis. The Compensation/Stock Option Committee considers various factors in making a recommendation to the Board, including a competitive assessment of Director compensation with that of our peer group (as described under the heading “Compensation Discussion and Analysis”), market trends, the responsibilities of our non-employee Directors, the anticipated time commitment and amount of work, the responsibilities of the various committees of the Board, and our ability to attract and retain high caliber non-employee Directors to serve on the Board. The Compensation/Stock Option Committee also retained an independent compensation consultant, Pay Governance, to help benchmark and set non-employee Director compensation for 2023. We provide a significant portion of the total compensation of our non-employee Directors in the form of equity compensation to align their long-term interests with those of our shareholders. Each non-employee Director is paid an annual cash retainer for their service on their Board and is eligible for a grant of RSUs. We believe that this compensation model has enabled us to create an attractive and market competitive compensation package for Board candidates while reducing dilution and administrative costs to the company as compared to our prior program of granting only options to Directors. The following table sets forth the elements of cash compensation in 2023 for our non-employee Directors for their service on our Board of Directors and its committees. Mr. Willett, who is an executive officer of Cognex, receives no additional compensation for his service on the Board, and Mr. Alias, who is a non-executive employee of Cognex, received no additional cash compensation for his service on the Board.

  25. Elements of Director Compensation

    | Type of Fee | Board of Directors | Compensation/Stock Option Committee (1) | Audit Committee (1) | Nominating, Governance and Sustainability Committee (1) | | Annual Cash Retainer | $50,000 | $8,000 | $10,000 | $5,000 | | Annual Chairman Retainer | $60,000 | $20,000 | $20,000 | $10,000 |

  26. Elements of Director Compensation

    | (1) Annual Committee Chairman retainers are inclusive of the respective Committee cash retainers. For example, the Chairman of the Audit Committee receives $20,000 in total for serving on the Audit Committee, not $30,000. |

  27. Elements of Director Compensation

    In 2023, each Director (other than Mr. Krantz, Mr. Alias and Mr. Willett) also received a grant of RSUs in consideration for serving on our Board. RSU grant amounts and vesting schedules are detailed in the “Director Compensation Table—2023” under the heading “Stock Awards.”

  28. Executive Summary

    Executive Summary We maintain a pay-for-performance compensation philosophy that favors variable compensation based on individual, company and stock performance over fixed compensation such as base salary. We target paying our named executive officers, including our CEO, a base salary positioned at only the 25th percentile of our peer group; we establish a potential annual bonus that is market competitive and linked to individual and company performance objectives; and we grant equity awards in a manner that aligns the interests of our named executive officers with those of our shareholders. Compensation is weighted towards equity awards so that our named executive officers adopt an ownership mentality and take a long-term view of the business. Total compensation for our named executive officers also includes other benefits that are available to Cognex employees generally. This includes Perseverance Awards (which reward employee longevity, commitment and loyalty), company-paid basic group term life insurance and basic accidental death and dismemberment insurance, an employer match of eligible compensation that employees invest in their 401(k) accounts, and tuition reimbursement. The Compensation/Stock Option Committee, which consists entirely of independent Directors, reviews and approves compensation for our named executive officers, using its judgment and experience in determining the mix of compensation. The committee views salary and bonuses as short-term compensation to reward our named executive officers for meeting annual individual and company performance objectives, and equity-based awards as a reward for increasing shareholder value and improving corporate performance over the long term. The Compensation/Stock Option Committee also believes that our equity award program is instrumental to our ability to recruit, retain and motivate our high caliber employees. The Compensation/Stock Option Committee is continually working to enhance our compensation programs to help ensure that our performance-based compensation philosophy and long-term perspective perseveres as our company grows. Specifically, in 2022, the Compensation/Stock Option Committee approved a performance-based equity award for our CEO based on relative total shareholder return, as well as stock ownership guidelines for all of our Directors and named executive officers. Further, in 2023, the committee introduced a compensation recovery policy to enable the recoupment of erroneously awarded incentive-based compensation paid to a named executive officer due to a restatement of previously issued financial statements. Determinations with respect to compensation for a fiscal year are generally made in the first quarter following our Board of Directors’ approval of Cognex’s annual budget for that year, which typically occurs at the end of the previous year.

  29. Say-on-Pay Feedback from Shareholders

    Say-on-Pay Feedback from Shareholders At our 2023 Annual Meeting of Shareholders, approximately 85% of the votes cast on the say-on-pay proposal were in favor of the approval of the compensation of our named executive officers, with approximately 15% of the votes cast against such proposal. The Compensation/Stock Option Committee believes that this shareholder vote endorses the compensation philosophy of our company, and the Compensation/Stock Option Committee did not make any significant changes to our executive compensation program for 2023 as a result of the say-on-pay vote by our shareholders. Based on the voting results at our 2023 Annual Meeting, and consistent with the recommendation of the Board of Directors, we will continue to conduct an advisory vote on the compensation of our named executive officers on an annual basis until the next advisory vote on the frequency of the say-on-pay vote, which we expect will occur at our 2029 Annual Meeting of Shareholders.

  30. Compensation Program Highlights

    Compensation Program Highlights Our executive compensation program is designed to be largely performance-based with base salary providing a steady income and the annual company bonus, RSU awards and stock option awards based upon individual, company and stock price performance. In its deliberations of compensation for our named executive officers, the Compensation/Stock Option Committee considers the following:

  31. Compensation Program Highlights

    | • | Objective competitive market data of peer companies provided by Pay Governance (“Competitive Analysis”); |

  32. Compensation Program Highlights

    | • | The recommendations of our Chief Executive Officer with respect to the salary increases, potential bonuses and equity award grants for those executive officers that report to him; |

  33. Compensation Program Highlights

    | • | Evaluated the appropriateness of our peer group (described below); |

  34. Compensation Program Highlights

    | • | Assessed our compensation practices and levels against those of our peer group; |

  35. Compensation Program Highlights

    | • | Analyzed our short- and long-term incentive plan designs; |

  36. Compensation Program Highlights

    | • | Updated the Compensation/Stock Option Committee on compensation trends and regulatory developments; and |

  37. Compensation Program Highlights

    | • | Participated in Compensation/Stock Option Committee discussions related to each of the above tasks. |

  38. Compensation Program Highlights

    Following its investigation and consideration of the above criteria, the Compensation/Stock Option Committee kept Mr. Willett’s annual base salary at $676,000 and increased Mr. Todgham’s annual base salary from $415,000 to $427,000, Ms. DiPalma’s annual base salary from $312,000 to $325,000, Mr. Gerst’s annual base salary from $340,000 to $355,000, and Mr. Kuechen’s annual base salary from $300,000 to $312,000. Annual Company Bonuses The Compensation/Stock Option Committee views annual company bonuses as a way to reward employees for meeting individual and company performance objectives. Cognex employees, including our named executive officers, are eligible to participate in the performance-based annual company bonus program except for those employees on a sales commission plan. The Compensation/Stock Option Committee approves the annual company bonus plan in conjunction with our Board of Directors’ approval of Cognex’s annual budget, which typically takes place at the end of the prior fiscal year. The annual company bonus plan is designed to be variable. In order for any employee to be eligible for an annual company bonus, Cognex must first achieve financial goals set forth in the annual budget related to budgeted consolidated operating income as a percentage of revenue (we refer to this metric as “operating margin”). Once the operating margin criterion is met, the amount each employee at director level and above, which includes our named executive officers, receives depends upon the achievement of individual performance goals, which are established annually. The Compensation/Stock Option Committee determined that operating margin is an appropriate metric for our bonus program because the committee believes employee performance is integral in achieving desired levels of company profitability. In 2023, the Board of Directors approved a one-time variance to the calculation of operating margin for bonus purposes to remove the impact of acquisition costs that exceeded the amount budgeted for the year, and Moritex’s revenue and operating expenses in the fourth quarter of 2023. The Board determined that this one-time variance is appropriate because the Moritex acquisition was not contemplated at the time the Board set the operating margin target for bonus purposes. In order for any annual cash bonus to be paid to an employee, a minimum level of operating margin for the company must be achieved. Once the minimum level has been achieved, each employee’s eligible bonus is calculated as follows:

  39. Compensation Program Highlights

    The Compensation/Stock Option Committee approves the target bonus for each employee at the vice president level and above, which includes our named executive officers, and the amount by which each individual can participate in any increase due to company performance in excess of the operating margin target. The target bonus amount is based upon a percentage of base salary with the percentage based upon the individual’s level of responsibility. Individual performance goals are established annually and generally relate to near-term strategic, financial and operational performance that supports the company’s business objectives. A weighting is assigned to each individual performance goal. In 2023:

  40. Compensation Program Highlights

    | • | The target bonus for Robert J. Willett, our President and Chief Executive Officer, was $1,075,000, with the opportunity to earn 0-350% of this amount based on company performance and the achievement of individual performance goals. |

  41. Compensation Program Highlights

    | • | The target bonus of Paul D. Todgham, our Senior Vice President and Chief Financial Officer, was $300,000, with the opportunity to earn 0-225% of this amount based on company performance and the achievement of individual performance goals. |

  42. Compensation Program Highlights

    | • | The target bonus of Carl W. Gerst III, our Executive Vice President, ID and Vision Products, was $300,000, with the opportunity to earn 0-250% of this amount based on company performance and the achievement of individual performance goals. |

  43. Compensation Program Highlights

    | • | The target bonus for Sheila M. DiPalma, our Executive Vice President of Employee Services and Chief Culture Officer, was $220,000, with the opportunity to earn 0-250% of this amount based on company performance and the achievement of individual performance goals. |

  44. Compensation Program Highlights

    | • | The target bonus for Joerg Kuechen, our Chief Technology Officer, was $210,000, with the opportunity to earn 0-250% of this amount based on company performance and the achievement of individual performance goals. |

  45. Compensation Program Highlights

    The Compensation/Stock Option Committee believes that the payment of an annual company bonus based upon the achievement of company and individual performance goals is an appropriate way to reward our named executive officers for meeting performance objectives while also achieving desired levels of company profitability. For 2023, the operating margin target, as calculated for bonus purposes, was consistent with our long-term financial objectives. The actual operating margin achieved for 2023 bonus purposes for our named executive officers was 16.6%, which was below the target of 24.5%, but above the minimum level of 15.9%. As a result, each employee at director level and above (which includes our named executive officers) was eligible to receive up to 8% of the pro-rata portion of his or her bonus target depending on the achievement of his or her individual performance goals. The annual bonuses for 2023 for our named executive officers are listed under the heading “Executive Compensation—Summary Compensation Table” and were paid in the first quarter of 2024. All other bonus-eligible employees were eligible to receive up to 25% of the pro-rata portion of his or her bonus target. Equity-Based Awards Cognex’s equity award program is intended to reward a significant portion of our eligible employees, which includes our named executive officers, for their efforts in building shareholder value and improving corporate performance over the long term. The Compensation/Stock Option Committee believes that granting stock options and RSUs is instrumental in our ability to recruit, retain and motivate our high caliber employees. The Compensation/Stock Option Committee approves the equity awards granted to our named executive officers on an individual basis. Our Chief Executive Officer has been delegated the authority to approve stock options and other equity-based awards to our non-executive employees not to exceed 80,000 shares to any one individual, in the aggregate, per calendar year. Each year, Cognex determines the equity-based awards to be granted to current employees in the form of annual grants by considering, among other factors, the impact of the awards on shareholder dilution. We have always been, and will continue to be, sensitive to shareholders’ concerns about the increase in the number of outstanding shares caused by new grants. In that regard, we have kept the number of underlying shares granted each year relatively flat between 2011 and 2019 (disregarding the impact of stock splits effected through the issuance of stock dividends), with decreases commencing in 2020 due primarily to the introduction of RSUs into our equity award program. In 2023, our equity-based awards consisted of only 1.39% of our average outstanding shares. We have also reduced share dilution by repurchasing Cognex stock on the open market during that period. As a result, the number of outstanding shares has decreased by about 2.38% from 2020 to 2023 (disregarding the impact of stock splits effected through the issuance of stock dividends). We intend to continue to actively manage our use of shares each year. Each of our named executive officers participated in our annual equity award grants, which were completed in the first quarter of 2023. Grant amounts are determined based on, among other factors, levels of responsibility and the desire to retain our most valuable employees. The annual grants were consistent with the vesting schedules and expiration dates of the majority of grants made to our other employees. Our policy is to grant equity-based awards on certain fixed dates. If any such date falls within a designated quiet period, then the grants will instead be made on the first Monday following the completion of the quiet period. If Nasdaq is closed on the appropriate Monday as described above, then the grants will instead be made on the next day that Nasdaq is open for trading. The Compensation/Stock Option Committee retains the discretion to grant equity-based awards at such other times as it may otherwise deem appropriate. The exercise price for all stock options granted equals the closing price of our common stock on Nasdaq on the date of grant. The Compensation/Stock Option Committee believes that the primary purpose of equity-based awards is to align employee interests with the interests of our shareholders, and to provide our employees, including our named executive officers, with incentives to increase shareholder value over time. Each of our named executive officers is eligible to receive an annual grant of (i) stock options that generally vest annually over a period of five years of continuous employment, and (ii) RSUs that vest annually over a period of three years of continuous employment. We believe that this equity compensation model has allowed us to recruit, retain and motivate our senior employees, while reducing dilution and administrative costs to the company as compared to our prior program of granting only options to executive officers. We also introduced performance-based RSUs (“PRSUs”) for Mr. Willett in 2022. One third of Mr. Willett’s 2023 annual equity grant (based on grant date fair value) was in the form of PRSUs. The vesting of Mr. Willett’s PRSUs is based on the percentile rank of the company’s total shareholder return (“TSR”) against the TSR of the companies within the S&P Composite 1500 Electronic Equipment, Instruments & Components index (or a comparable index if such index is materially changed or discontinued) (“PRSU Index TSR”) over a three-year measurement period. The number of PRSUs earned is calculated by multiplying (i) the Performance Multiplier for the measurement period based on the company’s TSR percentile, as set forth in the table below, by (ii) the target PRSU shares.

  46. Compensation Program Highlights

    If the company’s TSR ranks between a designated performance percentile, the performance multiplier will be determined using linear interpolation. If the company’s TSR is a negative percentage, regardless of the percentile achieved, the performance multiplier will be a maximum of 100%. The vesting of the PRSUs in all cases is subject to Mr. Willett’s continued service with the company. We believe that PRSUs further align the interests of Mr. Willett with building shareholder value and improving corporate performance over the long term. Change of Control Arrangements Change of control transactions typically represent events where our shareholders are realizing the value of their equity interests in our company. We believe it is appropriate for our named executive officers to share in this realization of shareholder value. All equity award agreements covering the unvested equity awards held by Mr. Todgham and the February 2019 and February 2020 option agreements covering option awards held by Ms. DiPalma provide for such equity awards to vest immediately upon a “change of control” of Cognex, which is defined as a corporate transaction in which the holders of Cognex common stock before the transaction control less than 51% of the stock of Cognex or any successor corporation after the transaction. In providing for the immediate vesting of these equity awards, the Compensation/Stock Option Committee noted that, given their roles with Cognex at the time of the grants, it was unlikely that Mr. Todgham’s or Ms. DiPalma’s employment with Cognex would be continued following a change of control transaction. Further, Mr. Willett’s February 2022 PRSU and 2023 PRSU agreements provide that the PRSUs will vest immediately upon a “change of control” of Cognex, with such number of vested PRSUs to be calculated based on the applicable performance multiplier determined by the percentile rank of the company’s TSR against the PRSU Index TSR over a measurement period concluding on the date immediately prior to such change of control. All stock option and RSU agreements covering unvested time-based RSU and option awards held by Mr. Willett, as well as the October 2020, February 2022 and February 2023 option agreements covering option awards held by Ms. DiPalma and Mr. Gerst, the February 2022 and February 2023 RSU agreements covering RSUs held by Ms. DiPalma and Mr. Gerst, the August 2022 and February 2023 option agreements covering option awards held by Mr. Kuechen, and the February 2023 RSU agreement covering RSUs held by Mr. Kuechen are subject to immediate vesting if there is both a “change of control” of Cognex and the respective executive officer’s employment is involuntarily terminated within twelve months following such transaction.

  47. COMPENSATION/STOCK OPTION COMMITTEE REPORT

    COMPENSATION/STOCK OPTION COMMITTEE REPORT The Compensation/Stock Option Committee administers the compensation program for Cognex’s executive officers. The Compensation/Stock Option Committee is composed of Directors who qualify as “independent” under the applicable listing standards of Nasdaq. The Compensation/Stock Option Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with management. Based on that review and discussion, the Compensation/Stock Option Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement. The foregoing report has been approved by all members of the Compensation/Stock Option Committee.

  48. COMPENSATION/STOCK OPTION COMMITTEE REPORT

    | COMPENSATION/STOCK OPTION COMMITTEE | | John T.C. Lee, Chairman | | Dianne M. Parrotte | | Anthony Sun |

  49. Summary Compensation Table—2023

    Summary Compensation Table—2023 The following table sets forth the total compensation awarded to, earned by or paid to our Chief Executive Officer and our other executive officers in fiscal years 2021, 2022 and 2023 (who we refer to collectively as the “named executive officers”).

  50. Summary Compensation Table—2023

    | Name and Principal Position | Year | Salary (1) ($) | Stock Awards (2) ($) | Option Awards (2) ($) | Non-Equity Incentive Plan Compensation (1) ($) | All Other Compensation ($) | Total Compensation ($) | | Robert J. Willett | 2023 | $676,000 | $2,065,040(3) | $4,133,598 | $73,833 | $11,443 | $6,959,914 | | President and | 2022 | $672,000 | $2,067,044(3) | $4,133,755 | $372,397 | $12,228 | $7,257,424 | | Chief Executive Officer | 2021 | $651,334 | $2,033,544 | $4,153,512 | $3,687,250 | $8,880 | $10,534,520 | | Paul D. Todgham | 2023 | $425,154 | $740,446 | $1,499,490 | $—(4) | $9,979 | $2,675,069 | | Senior Vice President and | 2022 | $410,385 | $743,220 | $1,500,282 | $97,006 | $11,465 | $2,762,358 | | Chief Financial Officer | 2021 | $384,135 | $745,489 | $749,919 | $487,927 | $9,250 | $2,376,720 | | Carl W. Gerst III | 2023 | $352,692 | $819,444 | $1,669,448 | $16,638 | $12,174 | $2,870,396 | | Executive Vice President | 2022 | $336,154 | $825,452 | $1,667,302 | $94,604 | $13,228 | $2,936,740 | | Vision and ID Products | 2021 | $316,211 | $— | $— | $419,973 | $25,966 | $762,150 | | Sheila M. DiPalma | 2023 | $323,000 | $493,615 | $999,671 | $15,367 | $7,529 | $1,839,182 | | Chief Culture Officer and | 2022 | $310,154 | $495,501 | $1,000,176 | $74,651 | $11,159 | $1,891,641 | | EVP Employee Services | 2021 | $301,154 | $— | $— | $410,438 | $10,659 | $722,251 | | Joerg Kuechen(5) | 2023 | $310,154 | $592,375 | $1,199,603 | $15,717 | $8,042 | $2,125,891 | | Chief Technology Officer | 2022 | $296,923 | $545,013 | $1,855,419 | $72,520 | $26,035(6) | $2,795,910 |

  51. Summary Compensation Table—2023

    | (1) Salary and bonus amounts are presented in the year earned. The payment of such amounts may have occurred in other years (i.e., 2024). |

  52. Summary Compensation Table—2023

    | (2) Amounts listed in this column represent the grant date fair value of option awards and RSUs, as applicable. The methodology and assumptions used to calculate the grant date fair value are described in “Note 16, Stock-Based Compensation” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Cognex recognizes the grant date fair value of options and RSUs as an expense for financial reporting purposes over the service-based vesting period. The grant date fair value of PRSUs is calculated using a Monte Carlo simulation model to estimate the probability of satisfying the service and market conditions stipulated in the award grant. No equity award grants to a named executive officer were forfeited in 2021, 2022 or 2023. |

  53. Summary Compensation Table—2023

    | (3) The amount reported in the table for each of 2022 and 2023 is the grant date fair value of Mr. Willett’s PRSU awards, assuming probable achievement. The grant date fair value of Mr. Willett’s PRSU awards, assuming the highest level of performance condition achievement, is $3,196,823 for 2022 and $3,259,851 for 2023. |

  54. Summary Compensation Table—2023

    | (4) Upon the mutual agreement of Cognex and Mr. Todgham, Mr. Todgham resigned from the company as Chief Financial Officer effective March 15, 2024. In connection with his departure from the company, Mr. Todgham did not receive a 2023 bonus, but received a $300,000 retention bonus if he remained employed with the company through the planned resignation date of March 15, 2024, and continued health insurance for 18 months (or if earlier, until the date when he commences other employment). |

  55. Summary Compensation Table—2023

    | (5) Mr. Kuechen was appointed Chief Technology Officer, an executive officer role at Cognex, in June 2022. |

  56. Summary Compensation Table—2023

    | (6) Includes a one-time cash payment of $15,000 for travel, lodging and entertainment for Mr. Kuechen’s 20-year Perseverance Award, which all Cognex employees are eligible to receive. |

  57. Grants of Plan-Based Awards Table—2023

    Grants of Plan-Based Awards Table—2023 The following table sets forth information regarding non-equity incentive plans and equity award grants to our named executive officers in fiscal year 2023.

  58. Grants of Plan-Based Awards Table—2023

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards (3) ($) | | Name | Grant Date | Thres- hold ($) | Target ($) | Maximum ($) | Thres- hold (#) | Target (#) | Maximum (#) | | | | | | Robert J. Willett | — | $0 | $1,075,000 | $3,762,500 | — | — | — | — | — | — | — | | | 2/21/2023 | — | — | — | 23,017 | 46,033 | 69,050 | — | — | — | $2,065,040 | | | 2/21/2023 | — | — | — | — | — | — | — | 233,484 | $47.21 | $4,133,598 | | Paul D. Todgham | — | $0 | $300,000 | $675,000 | — | — | — | — | — | — | — | | | 2/21/2023 | — | — | — | — | — | — | 15,887 | — | — | $740,446 | | | 2/21/2023 | — | — | — | — | — | — | — | 84,698 | $47.21 | $1,499,490 | | Carl W. Gerst III | — | $0 | $300,000 | $750,000 | — | — | — | — | — | — | — | | | 2/21/2023 | — | — | — | — | — | — | 17,582 | — | — | $819,444 | | | 2/21/2023 | — | — | — | — | — | — | — | 94,298 | $47.21 | $1,669,448 | | Sheila M. DiPalma | — | $0 | $220,000 | $550,000 | — | — | — | — | — | — | — | | | 2/21/2023 | — | — | — | — | — | — | 10,591 | — | — | $493,615 | | | 2/21/2023 | — | — | — | — | — | — | — | 56,466 | $47.21 | $999,671 | | Joerg Kuechen | — | $0 | $210,000 | $525,000 | — | — | — | — | — | — | — | | | 2/21/2023 | — | — | — | — | — | — | 12,710 | — | — | $592,375 | | | 2/21/2023 | — | — | — | — | — | — | — | 67,759 | $47.21 | $1,199,603 |

  59. Grants of Plan-Based Awards Table—2023

    | (1) The amounts shown in the threshold, target and maximum columns reflect the minimum, target and maximum amounts, respectively, that are payable under Cognex’s annual company bonus program as described under the heading “Compensation Discussion and Analysis.” The actual payout with respect to 2023 for each named executive officer is shown in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation.” |

  60. Grants of Plan-Based Awards Table—2023

    | (2) The amounts shown in the threshold, target and maximum columns reflect the minimum, target and maximum vesting amounts, respectively, of the PRSUs as described under the heading “Compensation Discussion and Analysis.” |

  61. Grants of Plan-Based Awards Table—2023

    | (3) Amounts listed in this column represent the grant date fair value of option awards, RSUs and PRSUs, as applicable. The methodology and assumptions used to calculate the grant date fair value are described in “Note 16, Stock-Based Compensation” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Cognex recognizes the grant date fair value of options and RSUs as an expense for financial reporting purposes over the service-based vesting period. The grant date fair value of PRSUs is calculated using a Monte Carlo simulation model to estimate the probability of satisfying the service and market conditions stipulated in the award grant. |

  62. Discussion of Summary Compensation and Grants of Plan-Based Awards Tables

    Discussion of Summary Compensation and Grants of Plan-Based Awards Tables Compensation to our named executive officers consists primarily of salary, bonus and equity-based awards as well as other benefits which are also available to Cognex employees generally. These benefits include company-paid basic group term life insurance, basic accidental death and dismemberment insurance, an employer match of eligible compensation that employees invest in their 401(k) accounts, tuition reimbursement, and benefits consistent with our “Work Hard, Play Hard, Move Fast” culture such as Perseverance Awards, which reward employee longevity, commitment, and loyalty. Cognex’s executive compensation policies, pursuant to which the compensation set forth in the Summary Compensation Table and Grants of Plan-Based Awards Table was paid or awarded, are described under the heading “Compensation Discussion and Analysis.” During 2023, we kept Mr. Willett’s annual base salary at $676,000 and increased Mr. Todgham’s annual base salary from $415,000 to $427,000, Ms. DiPalma’s annual base salary from $312,000 to $325,000, Mr. Gerst’s annual base salary from $340,000 to $355,000, and Mr. Kuechen’s annual base salary from $300,000 to $312,000. Cognex provides each named executive officer with the opportunity to earn a cash bonus pursuant to a performance-based annual company bonus program that is based first on the achievement of the consolidated financial goal set forth in Cognex’s annual budget related to operating income as a percentage of revenue (we refer to this metric as “operating margin”), and then on the achievement of individual performance goals, which are also established annually. The Compensation/Stock Option Committee approves the target bonus for each named executive officer. For 2023, the target bonus for Mr. Willett was $1,075,000, with the opportunity to earn 0-350% of this amount; the target bonus for Mr. Todgham was $280,000, with the opportunity to earn 0-225% of this amount; the target bonus for Ms. DiPalma was $215,000, with the opportunity to earn 0-250% of this amount; the target bonus for Mr. Gerst was $280,000, with the opportunity to earn 0-250% of this amount; and the target bonus for Mr. Kuechen was $200,000, with the opportunity to earn 0-225% of this amount. Cognex’s actual consolidated operating margin for 2023 bonus purposes was 16.6%, which was below the target percentage as determined by the Board of 24.5%, but above the minimum. As a result, each of our named executive officers was eligible to receive up to 8% of the pro-rata portion of his or her bonus target depending on the achievement of his or her individual performance goals. During 2023, each of our named executive officers participated in our annual equity award grants, which were completed in the first quarter of 2023. Grant amounts are determined based on, among other factors, levels of responsibility and the desire to retain our most valuable employees. The annual grants were consistent with the vesting schedules and expiration dates of the majority of grants made to our other employees. A total of 2,344,182 options and RSUs (including the PRSUs awarded to Mr. Willett (at target)) were granted to Cognex employees in fiscal year 2023.

  63. Option Exercises and Stock Vested Table—2023

    Option Exercises and Stock Vested Table—2023 The following table sets forth the amounts realized in fiscal year 2023 by our named executive officers as a result of option exercises or vesting of RSUs.

  64. Option Exercises and Stock Vested Table—2023

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise (1) ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting (2) ($) | | Robert J. Willett | — | $— | 6,782 | $375,112 | | Paul D. Todgham | — | $— | 16,481 | $802,896 | | Carl W. Gerst III | — | $— | 2,586 | $121,077 | | Sheila M. DiPalma | — | $— | 1,553 | $72,711 | | Joerg Kuechen | — | $— | 3,311 | $168,766 |

  65. Option Exercises and Stock Vested Table—2023

    | (1) The value realized on exercise represents the difference between the exercise price of the stock option and the trading price of our common stock on Nasdaq upon exercise of the stock option, multiplied by the number of shares underlying the option exercised. None of the named executive officers exercised stock options in 2023. |

  66. Option Exercises and Stock Vested Table—2023

    | (2) The value realized on vesting represents the closing market price of our common stock on Nasdaq on the vesting date of the RSUs, multiplied by the number of shares vesting. |

  67. Outstanding Equity Awards at Fiscal Year-End—2023

    Outstanding Equity Awards at Fiscal Year-End—2023 The following table sets forth the number of RSUs and options to purchase shares of our common stock held by our named executive officers on December 31, 2023.

  68. Outstanding Equity Awards at Fiscal Year-End—2023

    | | Option Awards | | | | Stock Awards | | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of RSUs That Have Not Vested (#) | Market Value of Shares Underlying Restricted Stock Units That Have Not Vested (1) ($) | Equity Incentive Plan Awards: Number of Unearned Restricted Stock Units That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Restricted Stock Units That Have Not Vested (2) ($) | Footnote | | Robert J. Willett | 180,000 | — | $38.39 | 2/21/2027 | — | $— | — | $— | — | | | 90,000 | — | $56.44 | 2/20/2028 | — | $— | — | $— | — | | | 144,000 | 36,000 | $51.49 | 2/19/2029 | — | $— | — | $— | 3 | | | 108,000 | 72,000 | $50.94 | 2/18/2030 | — | $— | — | $— | 4 | | | 49,409 | 74,112 | $90.50 | 2/16/2031 | — | $— | — | $— | 5 | | | 37,051 | 148,203 | $64.43 | 2/22/2032 | — | $— | — | $— | 6 | | | — | 233,484 | $47.21 | 2/21/3033 | — | $— | — | $— | 7 | | | — | — | $— | — | 11,304 | $471,829 | — | $— | 8 | | | — | — | $— | — | — | $— | 33,078 | $1,380,676 | 9 | | | — | — | $— | — | — | $— | 46,033 | $1,921,417 | 10 | | Paul D. Todgham | 23,100 | 46,900 | $57.70 | 4/29/2030 | — | $— | — | $— | 11 | | | 8,922 | 13,380 | $90.50 | 2/16/2031 | — | $— | — | $— | 5 | | | 13,447 | 53,788 | $64.43 | 2/22/2032 | — | $— | — | $— | 6 | | | | 84,698 | $47.21 | 2/21/2033 | — | $— | — | $— | 7 | | | — | — | $— | — | 4,144 | $172,971 | — | $— | 8 | | | — | — | $— | — | 9,312 | $388,683 | — | $— | 12 | | | — | — | $— | — | 15,887 | $663,123 | — | $— | 13 | | Carl W. Gerst III | 20,000 | — | $56.44 | 2/20/2028 | — | $— | — | $— | — | | | 40,000 | 20,000 | $51.49 | 2/19/2029 | — | $— | — | $— | 3 | | | 40,000 | 40,000 | $50.94 | 2/18/2030 | — | $— | — | $— | 4 | | | 60,000 | 90,000 | $65.90 | 10/30/2030 | — | $— | — | $— | 14 | | | 14,944 | 59,776 | $64.43 | 2/22/2032 | — | $— | — | $— | 6 | | | — | 94,298 | $47.21 | 2/21/3033 | — | $— | — | $— | 7 | | | — | — | $— | — | 10,343 | $431,717 | — | $— | 12 | | | — | — | $— | — | 17,582 | $733,873 | — | $— | 13 | | Sheila M. DiPalma | 12,500 | — | $38.39 | 2/21/2027 | — | $— | — | $— | — | | | 64,000 | — | $62.48 | 11/1/2027 | — | $— | — | $— | — | | | 48,000 | 16,000 | $51.49 | 2/19/2029 | — | $— | — | $— | 3 | | | 48,000 | 32,000 | $50.94 | 2/18/2030 | — | $— | — | $— | 4 | | | 48,000 | 52,000 | $65.90 | 10/30/2030 | — | $— | — | $— | 15 | | | 8,965 | 35,858 | $64.43 | 2/22/2032 | — | $— | — | $— | 6 | | | — | 56,466 | $47.21 | 2/21/3033 | — | $— | — | $— | 7 | | | — | — | $— | — | 6,208 | $259,122 | — | $— | 12 | | | — | — | $— | — | 10,591 | $442,068 | — | $— | 13 |

  69. Outstanding Equity Awards at Fiscal Year-End—2023

    | | Option Awards | | | | Stock Awards | | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of RSUs That Have Not Vested (#) | Market Value of Shares Underlying Restricted Stock Units That Have Not Vested (1) ($) | Equity Incentive Plan Awards: Number of Unearned Restricted Stock Units That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Restricted Stock Units That Have Not Vested (2) ($) | Footnote | | Joerg Kuechen | 12,500 | — | $38.39 | 2/21/2027 | — | $— | — | $— | — | | | 30,000 | — | $56.44 | 2/20/2028 | — | $— | — | $— | — | | | 30,000 | 15,000 | $51.49 | 2/19/2029 | — | $— | — | $— | 3 | | | 48,000 | 32,000 | $50.94 | 2/18/2030 | — | $— | — | $— | 4 | | | 11,795 | 17,691 | $90.50 | 2/16/2031 | — | $— | — | $— | 5 | | | 9,906 | 39,624 | $64.43 | 2/22/2032 | — | $— | — | $— | 6 | | | — | 39,894 | $47.95 | 8/4/2032 | — | $— | — | $— | 16 | | | — | 67,759 | $47.21 | 2/21/3033 | — | $— | — | $— | 7 | | | — | — | $— | — | 2,698 | $112,615 | — | $— | 8 | | | — | — | $— | — | 6,767 | $282,455 | — | $— | 12 | | | — | — | $— | — | 12,710 | $530,515 | — | $— | 13 |

  70. Outstanding Equity Awards at Fiscal Year-End—2023

    | (1) Market value of RSUs in this column are determined by multiplying the number of RSUs that have not vested by $41.74, the closing price of Cognex’s common stock on December 29, 2023, the last trading day of the year. |

  71. Outstanding Equity Awards at Fiscal Year-End—2023

    | (2) Market value of PRSUs in this column are determined by multiplying the target number of PRSUs by $41.74, the closing price of Cognex’s common stock on December 29, 2023, the last trading day of the year. |

  72. Outstanding Equity Awards at Fiscal Year-End—2023

    | (3) Options become exercisable in five equal annual installments beginning on February 19, 2020. |

  73. Outstanding Equity Awards at Fiscal Year-End—2023

    | (4) Options become exercisable in five equal annual installments beginning on February 18, 2021. |

  74. Outstanding Equity Awards at Fiscal Year-End—2023

    | (5) Options become exercisable in five approximately equal annual installments beginning on February 16, 2022. |

  75. Outstanding Equity Awards at Fiscal Year-End—2023

    | (6) Options become exercisable in approximately five equal annual installments beginning on February 22, 2023. |

  76. Outstanding Equity Awards at Fiscal Year-End—2023

    | (7) Options vest in five approximately equal annual installments beginning on February 21, 2024. |

  77. Outstanding Equity Awards at Fiscal Year-End—2023

    | (8) RSUs vest in annual installments of approximately 20%, 30%, and 50% beginning on February 16, 2022. |

  78. Outstanding Equity Awards at Fiscal Year-End—2023

    | (9) PRSUs vest on February 22, 2025 based on the percentile rank of the company’s TSR against the PRSU Index TSR over a three-year measurement period. The number of PRSUs earned for the measurement period is calculated as follows: if the company’s TSR is below the 25th percentile of the PRSU Index TSR, none of the PRSUs will vest; if the company’s TSR is at the 25th percentile of the PRSU Index TSR, 50% of the target PRSU shares will vest; if the company’s TSR is at the 55th percentile of the PRSU Index TSR, 100% of the target PRSU shares will vest; if the company’s TSR is at or above the 75th percentile of the PRSU Index TSR, 150% of the target PRSU shares will vest; and if the company’s TSR ranks between a designated performance percentile, the performance multiplier will be determined using linear interpolation. If the company’s TSR is a negative percentage, regardless of the percentile achieved, the performance |

  79. Outstanding Equity Awards at Fiscal Year-End—2023

    | multiplier will be a maximum of 100%. The vesting of the PRSUs in all cases is subject to Mr. Willett’s continued service with the company. |

  80. Outstanding Equity Awards at Fiscal Year-End—2023

    | (10) PRSUs vest on February 21, 2026 based on the percentile rank of the company’s TSR against the PRSU Index TSR over a three-year measurement period. The number of PRSUs earned for the measurement period is calculated as follows: if the company’s TSR is below the 25th percentile of the PRSU Index TSR, none of the PRSUs will vest; if the company’s TSR is at the 25th percentile of the PRSU Index TSR, 50% of the target PRSU shares will vest; if the company’s TSR is at the 55th percentile of the PRSU Index TSR, 100% of the target PRSU shares will vest; if the company’s TSR is at or above the 75th percentile of the PRSU Index TSR, 150% of the target PRSU shares will vest; and if the company’s TSR ranks between a designated performance percentile, the performance multiplier will be determined using linear interpolation. If the company’s TSR is a negative percentage, regardless of the percentile achieved, the performance multiplier will be a maximum of 100%. The vesting of the PRSUs in all cases is subject to Mr. Willett’s continued service with the company. |

  81. Outstanding Equity Awards at Fiscal Year-End—2023

    | (11) Options become exercisable in three approximately equal annual installments beginning on April 29, 2023. |

  82. Outstanding Equity Awards at Fiscal Year-End—2023

    | (12) RSUs vest in annual installments of approximately 20%, 30%, and 50% beginning on February 22, 2023. |

  83. Outstanding Equity Awards at Fiscal Year-End—2023

    | (13) RSUs vest in annual installments of approximately 20%, 30%, and 50% beginning on February 21, 2024. |

  84. Outstanding Equity Awards at Fiscal Year-End—2023

    | (14) 100,000 options become exercisable in five equal annual installments beginning on October 30, 2021, and the remaining 50,000 options become exercisable in one installment on October 30, 2025. |

  85. Outstanding Equity Awards at Fiscal Year-End—2023

    | (15) 80,000 options become exercisable in five equal annual installments beginning on October 30, 2021, and the remaining 20,000 options become exercisable in one installment on October 30, 2025. |

  86. Outstanding Equity Awards at Fiscal Year-End—2023

    | (16) Options become exercisable in two equal annual installments beginning on August 4, 2026. |

  87. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL All equity award agreements covering the unvested equity awards held by Mr. Todgham and the February 2019 and February 2020 option agreements covering option awards held by Ms. DiPalma provide for such equity awards to vest immediately upon a “change of control” of Cognex, which is defined as a corporate transaction in which the holders of Cognex common stock before the transaction control less than 51% of the stock of Cognex or any successor corporation after the transaction. In providing for the immediate vesting of these equity awards, the Compensation/Stock Option Committee noted that, given their roles with Cognex at the time of the grants, it was unlikely that Mr. Todgham’s or Ms. DiPalma’s employment with Cognex would be continued following a change of control transaction. Further, Mr. Willett’s February 2022 PRSU and 2023 PRSU agreements provide that the PRSUs will vest immediately upon a “change of control” of Cognex, with such number of vested PRSUs to be calculated based on the applicable performance multiplier determined by the percentile rank of the company’s TSR against the PRSU Index TSR over a measurement period concluding on the date immediately prior to such change of control. All stock option and RSU agreements covering unvested time-based RSU and option awards held by Mr. Willett, as well as the October 2020, February 2022 and February 2023 option agreements covering option awards held by Ms. DiPalma and Mr. Gerst, the February 2022 and February 2023 RSU agreements covering RSUs held by Ms. DiPalma and Mr. Gerst, the August 2022 and February 2023 option agreements covering option awards held by Mr. Kuechen, and the February 2023 RSU agreement covering RSUs held by Mr. Kuechen, provide for any unvested portion of such equity awards held by each respective executive officer to become fully vested if the following two conditions are met: 1) there is a “change of control” of Cognex (as defined above) and 2) one’s employment is involuntarily terminated within twelve months following such transaction. One’s employment will be considered to be involuntarily terminated if Cognex terminates one’s employment without “cause” or the executive resigns his or her employment for “good reason.” “Cause” means the willful and continued failure to perform substantially his or her duties with Cognex (other than any failure resulting from incapacity due to physical or mental illness), or his or her willful engagement in illegal conduct or gross misconduct which is materially injurious to Cognex. “Good reason” means a material diminution in his or her duties or responsibilities (excluding for this purpose any diminution related solely to Cognex ceasing to be a public reporting company), or the requirement to be based at any office or location that is more than 50 miles from his or her current office. For all executive officer grants other than CEO PRSU grants under the Cognex Corporation 2023 Stock Option and Incentive Plan, the Compensation/Stock Option Committee plans to provide for any unvested portion of such equity awards to become fully vested if the following two conditions are met: 1) there is a “change of control” of Cognex (as defined above) and 2) such executive officer’s employment is involuntarily terminated within twelve months following such transaction. The following table indicates the amount of unvested options and restricted stock units held by each named executive officer that would become fully vested assuming a change of control of Cognex occurred on December 31, 2023, and, with respect to the options and time-based RSUs granted to Mr. Willett, the options granted to Ms. DiPalma and Mr. Gerst in October 2020, February 2022 and February 2023, the RSUs granted to Ms. DiPalma and Mr. Gerst in February 2022 and February 2023, the options granted to Mr. Kuechen in August 2022 and February 2023, and the RSUs granted to Mr. Kuechen in February 2023, the termination of the executive’s employment occurred in the circumstances described above on December 31, 2023 following a change of control. These amounts are estimates only and do not necessarily reflect the actual number of shares that would vest or their value, which would only be known at the time that the individual becomes entitled to the accelerated vesting of his or her options and RSUs.

  88. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    | Name | Number of Restricted Stock Units That Would Have Accelerated Vesting (1)(2) (#) | Value of Restricted Stock Units That Would Have Accelerated Vesting (3)(4) ($) | Number of Option Shares That Would Have Accelerated Vesting (#) | Value of Option Shares That Would Have Accelerated Vesting (5) ($) | | Robert J. Willett | 11,304 | $471,829 | 563,799 | $— | | Paul D. Todgham | 29,343 | $1,224,777 | 198,766 | $— | | Carl W. Gerst III | 27,925 | $1,165,590 | 244,074 | $— | | Sheila M. DiPalma | 16,799 | $701,190 | 192,324 | $— | | Joerg Kuechen | 12,710 | $530,515 | 107,653 | $— |

  89. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    | (1) PRSUs shown in this column reflect the target number of PRSUs multiplied by the performance multiplier applicable to the percentile rank of the company’s TSR against the PRSU Index TSR as of December 29, 2023, the last business day of the year. |

  90. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    | (2) RSUs shown in this column reflect the number of unvested RSUs held by the named executive officer on December 29, 2023, the last business day of the year. |

  91. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    | (3) Amount shown in this column is based on multiplying (i) with respect to all RSUs granted to Mr. Todgham, the number of RSUs that would have accelerated vesting assuming a change of control of Cognex occurred on December 29, 2023, the last business day of the year, or (ii) with respect to the time-based RSUs granted to Mr. Willett, the RSUs granted to Mr. Gerst and Ms. DiPalma in February 2022 and February 2023 and the RSUs granted to Mr. Kuechen ain February 2023, the number of RSUs that would have accelerated vesting assuming a change of control of Cognex occurred within the twelve months prior to December 29, 2023, the last business day of the year, and the executive’s employment was involuntarily terminated on December 29, 2023, the last business day of the year (as described above), by $41.74, the closing price of our common stock on Nasdaq on December 29, 2023, the last trading day of the year. |

  92. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    | (4) Amount shown in this column with respect to the PRSUs granted to Mr. Willett, is based on multiplying (i) the target number of PRSUs multiplied by the performance multiplier applicable to the percentile rank of the company’s TSR against the PRSU Index TSR as of December 29, 2023, the last business day of the year, by (ii) $41.74, the closing price of our common stock on Nasdaq on December 29, 2023, the last business day prior to such change of control. |

  93. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    | (5) Amounts shown in this column are based on multiplying (i) with respect to all the option awards granted to Mr. Todgham and the option awards granted to Ms. DiPalma in February 2019 and February 2020, the number of option shares that would have accelerated vesting assuming a change of control of Cognex occurred on December 29, 2023, the last business day of the year, or (ii) with respect to all the option awards granted to |

  94. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    | Mr. Willett, the option awards granted to Mr. Gerst in October 2020, February 2022 and February 2023, the option awards granted to Ms. DiPalma in October 2020, February 2022 and February 2023 and the option awards granted to Mr. Kuechen in August 2022 and February 2023, the number of options that would have accelerated vesting assuming a change of control of Cognex occurred within the twelve months prior to December 29, 2023 and the executive’s employment was involuntarily terminated on December 29, 2023, the last business day of the year (as described above), by the positive difference, if any, between $41.74, the closing price of our common stock on Nasdaq on December 29, 2023, the last trading day of the year, and the exercise prices for such option shares. As of December 29, 2023, all unvested options held by the named executive officers had an exercise price in excess of $41.74. |

  95. CEO PAY RATIO

    CEO PAY RATIO As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Robert J. Willett, our President and Chief Executive Officer. For 2023, our last completed fiscal year:

  96. CEO PAY RATIO

    | • | The median of the annual total compensation of all employees of our company (other than our Chief Executive Officer) was $80,925; and |

  97. CEO PAY RATIO

    | • | The annual total compensation of our Chief Executive Officer, as reported in the Summary Compensation Table included elsewhere in this proxy statement, was $6,959,914. |

  98. CEO PAY RATIO

    Based on this information, for 2023, the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all employees was approximately 86 to 1. We believe our CEO Pay Ratio for 2023 demonstrates our pay-for-performance philosophy. Our compensation program consists of both fixed and variable components and is designed to motivate all employees to produce superior short- and long-term corporate performance. The ratio of our CEO’s salary to the salary of our median employee was approximately 9 to 1, which is significantly lower than the total compensation ratio above, because the fixed portion of our CEO’s compensation is positioned near the 25th percentile of the company’s peer group. Given our CEO’s level of responsibility, experience and potential, the Compensation/Stock Option Committee awards him a mix of compensation with a higher variable component (i.e., annual bonus and stock option awards) that is based upon individual, company and stock price performance. As a result, a substantial percentage of our CEO’s total compensation is at risk every year, providing him with greater incentive to increase shareholder value and improve corporate performance over the long term. To identify the “median employee”, we took the following steps:

  99. CEO PAY RATIO

    | • | We selected October 2, 2023, which is within the last three months of 2023, as the date upon which we would identify the median employee to allow sufficient time to identify the median employee given the global scope of our operations. |

  100. CEO PAY RATIO

    | • | We determined that, as of October 2, 2023, our employee population consisted of approximately 2,626 employees, working for Cognex and its consolidated subsidiaries, with approximately 42% of these individuals located in the Americas, 30% in Asia and 29% in Europe. This population consisted of our full-time, part-time and temporary employees. We do not have seasonal employees, and we excluded independent contractors. |

  101. CEO PAY RATIO

    | • | To identify the median employee from our employee population, we used a consistently applied compensation measure consisting of annual base salary, annual bonus target and target annual sales commissions for 2023 for all full-time, part-time and temporary employees employed by Cognex and its consolidated subsidiaries at the start of business on October 2, 2023. We believe these pay elements are appropriate because it was impractical to gather actual data from multiple payroll systems utilized to pay our worldwide workforce, and the actual achievement of the variable portion of compensation can vary widely from year to year. |

  102. CEO PAY RATIO

    | • | No adjustments were made for cost-of-living differences. |

  103. CEO PAY RATIO

    | • | We converted amounts paid to employees in foreign currencies to U.S. dollars using foreign exchange rates as published in the Wall Street Journal. |

  104. CEO PAY RATIO

    | • | All employees except for our CEO were ranked from lowest to highest with the median determined from this list. |

  105. CEO PAY RATIO

    As permitted by Item 402(u) of Regulation S-K, we did not include the approximately 461 new employees that joined Cognex as a result of our acquisition of Moritex Corporation on October 18, 2023 in our identification of our median employee. These new employees were excluded because they joined Cognex after our median employee measurement date described above. We plan to include these employees in our 2024 CEO Pay Ratio determination. Once we identified our median employee, we determined that employee’s annual total compensation in the same manner that we calculate the total compensation of our CEO and other named executive officers for purposes of the Summary Compensation Table included elsewhere in this proxy statement. This annual total compensation amount for our median employee was then compared to the amount reported in the “Total Compensation” column for our CEO in the 2023 Summary Compensation Table to determine the CEO Pay Ratio for 2023.

  106. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between total compensation actually paid to Robert J. Willett, our President and Chief Executive Officer, and our named executive officers (as calculated in accordance with Item 402(v) of Regulation S-K) and certain financial performance measures.

  107. PAY VERSUS PERFORMANCE

    | Year | Summary compensation table total for CEO (1) | Compensation actually paid to CEO (1)(2)(3) | Average summary compensation table total for non-CEO named executive officers (NEOs) (4) | Average compensation actually paid for non-CEO NEOs (3)(4)(5) | Value of initial fixed $100 investment based on: | | | | | | | | | | Total shareholder return (TSR) (6) | Peer group TSR (6) | Net Income | Operating Margin (7) | | 2023 | $6,959,914 | $3,092,562 | $2,377,635 | $1,313,623 | $79.95 | $129.10 | $113,234,000 | 15.6% | | 2022 | $7,257,424 | $(3,658,243) | $2,596,662 | $(2,512,158) | $89.67 | $100.58 | $215,525,000 | 24.4% | | 2021 | $10,534,520 | $9,476,831 | $1,019,293 | $1,022,790 | $147.25 | $165.34 | $279,881,000 | 30.4% | | 2020 | $3,507,561 | $10,822,671 | $3,217,496 | $6,041,660 | $151.56 | $139.59 | $176,186,000 | 21.0% |

  108. PAY VERSUS PERFORMANCE

    | (1) Our CEO in all of 2020, 2021, 2022 and 2023 was Robert J. Willett. |

  109. PAY VERSUS PERFORMANCE

    | (2) Mr. Willett’s compensation “actually paid” as presented above is calculated by deducting and adding the following amounts, in each case in accordance with Item 402(v)(2)(C) of Regulation S-K: |

  110. PAY VERSUS PERFORMANCE

    | CEO Compensation “Actually Paid” | 2023 | 2022 | 2021 | 2020 | | Summary Compensation Table total for the covered fiscal year | $6,959,914 | $7,257,424 | $10,534,520 | $3,507,561 | | Less, Grant date fair value of awards reported in the Summary Compensation Table for the covered fiscal year | $6,198,638 | $6,200,799 | $6,187,056 | $3,322,440 | | Plus, Year-end fair value of awards granted for the covered fiscal year that were outstanding and unvested as of the end of the covered fiscal year | $4,188,941 | $3,294,711 | $4,781,517 | $7,043,400 | | Plus, Change in fair value of awards granted in prior years that were outstanding and unvested as of the end of the covered fiscal year (from prior fiscal year-end to covered fiscal year-end) | $(2,154,769) | $(6,805,316) | $(363,960) | $4,023,900 | | Plus, Change in fair value of awards granted in prior years that vested in the covered fiscal year (from prior fiscal year-end to vesting date) | $297,114 | $(1,204,263) | $711,810 | $(429,750) | | Total Adjustments | $(3,867,352) | $(10,915,667) | $(1,057,689) | $7,315,110 |

  111. PAY VERSUS PERFORMANCE

    | (3) In 2020, 2021, 2022 and 2023, neither our CEO nor any non-CEO NEO had any awards that vested in the same year that they were granted, any awards granted in prior years that failed to meet the applicable vesting conditions, or any dividends or other earnings paid on equity awards in the covered fiscal year prior to vesting that are not reflected in total compensation for the applicable year, and therefore, no adjustments for those items were included in calculating compensation “actually paid.” Further, in 2020, 2021, 2022 and 2023, neither our CEO nor any non-CEO NEO received any benefit under any defined benefit and actuarial plans and therefore, no adjustments for those items were included in calculating compensation “actually paid.” |

  112. PAY VERSUS PERFORMANCE

    | (4) Our non-CEO NEOs for each of the fiscal years presented above were: |

  113. PAY VERSUS PERFORMANCE

    | • | 2023: Paul D. Todgham, Carl W. Gerst III, Sheila M. DiPalma and Joerg Kuechen |

  114. PAY VERSUS PERFORMANCE

    | • | 2022: Paul D. Todgham, Carl W. Gerst III, Sheila M. DiPalma and Joerg Kuechen |

  115. PAY VERSUS PERFORMANCE

    | • | 2021: Robert J. Shillman, Paul D. Todgham, Carl W. Gerst III and Sheila M. DiPalma |

  116. PAY VERSUS PERFORMANCE

    | • | 2020: Robert J. Shillman, Paul D. Todgham, Carl W. Gerst III, Sheila M. DiPalma and Laura A. MacDonald |

  117. PAY VERSUS PERFORMANCE

    | (5) Average non-CEO NEO compensation “actually paid” as presented above is calculated by deducting and adding the following amounts, in each case in accordance with Item 402(v)(2)(C) of Regulation S-K: |

  118. PAY VERSUS PERFORMANCE

    | Average Non-CEO Compensation “Actually Paid” | 2023 | 2022 | 2021 | 2020 | | Summary Compensation Table total for the covered fiscal year | $2,377,635 | $2,596,662 | $1,019,293 | $3,217,496 | | Less, Grant date fair value of awards reported in the Summary Compensation Table for the covered fiscal year | $2,003,523 | $2,158,091 | $373,852 | $2,682,912 | | Plus, Year-end fair value of awards granted for the covered fiscal year that were outstanding and unvested as of the end of the covered fiscal year | $1,564,037 | $1,382,138 | $297,237 | $4,517,875 | | Plus, Change in fair value of awards granted in prior years that were outstanding and unvested as of the end of the covered fiscal year (from prior fiscal year-end to covered fiscal year-end) | $(662,444) | $(3,519,480) | $(183,252) | $1,098,685 | | Plus, Change in fair value of awards granted in prior years that vested in the covered fiscal year (from prior fiscal year-end to vesting date) | $37,918 | $(813,386) | $263,363 | $(109,485) | | Total Adjustments | $(1,064,012) | $(5,108,820) | $3,497 | $2,824,163 |

  119. PAY VERSUS PERFORMANCE

    | (6) Total shareholder return (“TSR”) of Cognex and the peer group are calculated by assuming that an investment of $100 was made in each of our common stock and in the Nasdaq Lab Apparatus & Analytical, Optical, Measuring & Controlling Instrument (SIC 3820-3829 US Companies) Index (“Peer Index”) starting from the market close on December 31, 2019, which is the last trading day before our fiscal year 2020, through and including the end of each fiscal year shown. Total shareholder return includes reinvestment of dividends into shares of common stock of the applicable company. Data for the Peer Index was provided to Cognex by Research Data Group, Inc. |

  120. PAY VERSUS PERFORMANCE

    | (7) Operating margin is defined as our operating income as a percentage of revenue. While we consider numerous financial and non-financial performance measures for the purpose of evaluating and determining executive compensation, we consider operating margin, which is a primary factor used to determine annual cash incentive compensation for our NEOs, to be the most important performance measure used to link compensation “actually paid” to the NEOs to company performance. |

  121. Analysis of the Information Presented in the Pay Versus Performance Table

    Analysis of the Information Presented in the Pay Versus Performance Table In October 2020, Mr. Gerst and Ms. DiPalma each received a one-time special stock option grant in consideration of their respective promotions to Executive Vice President on October 30, 2020. Because of these special grants, neither Mr. Gerst nor Ms. DiPalma was eligible to receive an annual equity award in 2021. The decrease in average compensation to our non-CEO NEOs between 2020 and 2021 was impacted by (i) the special stock option grant to Mr. Gerst and Ms. DiPalma in 2020, and (ii) Mr. Gerst and Ms. DiPalma being ineligible to receive an annual equity award in 2021. Further information regarding our executive compensation program is provided above under the heading “Compensation Discussion and Analysis.”