DEF 14A of Lattice Semiconductor Corp
Filed Mar 21, 2024 · FY20230001193125-24-073834
Biographical Information
Biographical Information Robin A. Abrams, age 72, has served as a director of the Company since 2011. Ms. Abrams served as the Interim Chief Executive Officer of Zilog, Inc. from August 2006 to January 2007 and the Chief Executive Officer of Firefly Communications, Inc. from 2004 to 2006. In addition to leading several start-ups, Ms. Abrams also served as President and Chief Executive Officer of Palm Computing, Inc. Prior to Palm, she was President and Chief Executive Officer of VeriFone, a leading global debit/credit card authorization solutions provider. Ms. Abrams also held several key executive positions at Apple, including president of Apple Americas and managing director of Apple Asia. Previously, Ms. Abrams held senior product marketing positions at Norwest Bank (Wells Fargo) and Unisys. Ms. Abrams served on the board of directors of Sierra Wireless from 2009 to 2022 and currently serves on the boards of directors of FactSet Research and HCL Technologies Ltd. Ms. Abrams brings to the Company extensive executive management experience obtained at Fortune 500 companies, including experience in advanced technology and managing operations in both Asia and the United States. Additionally, Ms. Abrams contributes valuable governance experience based on her service on a number of public company boards. James R. Anderson, age 51, has served as a director since joining the Company as President and Chief Executive Officer in September 2018. Prior to joining the Company, Mr. Anderson served as the Senior Vice President and General Manager of the Computing and Graphics Business Group at Advanced Micro Devices, Inc. (“AMD”). Prior to AMD, Mr. Anderson held a broad range of leadership positions spanning general management, engineering, sales, marketing, and corporate strategy at companies including Intel, Broadcom (formerly Avago Technologies), and LSI Corporation. Mr. Anderson has served on the board of directors of Entegris, Inc. since March 2023, and he currently serves on the Board of Directors of the Semiconductor Industry Association. Mr. Anderson previously served on the board of directors of Sierra Wireless from April 2020 to January 2023. Mr. Anderson earned an MBA and Master of Science in electrical engineering and computer science from the Massachusetts Institute of Technology, a Master of Science in electrical engineering from Purdue University, and a Bachelor of Electrical Engineering from the University of Minnesota. Mr. Anderson brings to the Company extensive executive management experience in advanced technology and deep operational knowledge of the Company as our President and Chief Executive Officer. Douglas Bettinger, age 56, has served as a director of the Company since December 2022. Mr. Bettinger is Executive Vice President and Chief Financial Officer at Lam Research Corporation, a manufacturer and provider of wafer fabrication equipment and services to the semiconductor industry. In this role, he oversees Lam’s finance, tax, treasury, and investor relations organizations. Prior to joining Lam in 2013, Mr. Bettinger was the Senior Vice President and Chief Financial Officer of Avago Technologies Ltd. (currently Broadcom Inc.) and held a variety of executive finance positions with Xilinx, Inc., 24/7 Customer, and Intel Corp. Mr. Bettinger also sits on the Board of Industry Leaders of SEMI, an industry association focused on the semiconductor industry’s design, manufacturing and supply chain. He holds a Bachelor’s degree in economics from the University of Wisconsin in Madison, and an MBA degree in finance from the University of Michigan. Mr. Bettinger brings to the Company more than 30 years of financial and operational experience in the semiconductor industry. Que Thanh Dallara, age 50, has served as a director of the Company since November 2023. Since May 2022, Ms. Dallara has been the Executive Vice President and Operating Unit President of the global Diabetes Operating Unit at Medtronic plc, a global leader in medical technology. Prior to joining Medtronic, from October 2018 to April 2022, Ms. Dallara was the President and Chief Executive Officer of Honeywell Connected Enterprise, Honeywell International, Inc.’s software business. From January 2017 to October 2019, Ms. Dallara was Senior Vice President and Chief Commercial Officer of Honeywell, leading its efforts in strategy, marketing, sales excellence, pricing, product innovation, including enterprise software, data analytics and IoT solutions. Prior to Honeywell, Ms. Dallara held various executive roles at TE Connectivity Ltd., Microsoft Corporation, McKinsey & Company, and Telstra Group Limited. Ms. Dallara earned an MBA from Institut Européen d’Administration des Affaires (INSEAD), a Bachelor of Science in applied mathematics, and a Bachelor of Commerce in finance from The University of New South Wales, Sydney, Australia. Ms. Dallara brings to the Company over 20 years of general management and enterprise transformation experience in multiple industries globally. John Forsyth, age 50, has served as a director of the Company since November 2023. Since January 2021, Mr. Forsyth has been the Chief Executive Officer, President, and a member of the board of directors at Cirrus Logic, Inc., a leading supplier of low-power, high-precision mixed-signal processing solutions for mobile and consumer applications. Prior to assuming the role of CEO, Mr. Forsyth was instrumental in driving Cirrus Logic’s product strategy as President, Chief Strategy Officer from June 2018 to January 2021, and Vice President of Marketing from August 2014 to June 2018. Mr. Forsyth also served as Vice President of Audio Products at Wolfson Microelectronics, which was acquired by Cirrus Logic in 2014. Prior to joining Wolfson in 2012, Mr. Forsyth led product development and strategy in several technology companies, including serving as chief technical officer of the Symbian Foundation and as vice president of strategy at Symbian Software. Mr. Forsyth earned his undergraduate degree from the University of Glasgow. Mr. Forsyth brings to the Company extensive management experience and knowledge of the semiconductor industry. Mark E. Jensen, age 73, has served as a director of the Company since June 2013. Mr. Jensen served as an executive of Deloitte & Touche LLP until his retirement in June 2012. He held a variety of positions, including U.S. Managing Partner-Audit and Enterprise Risk Services, Technology Industry and U.S. Managing Partner-Venture Capital Services Group. Prior to joining Deloitte & Touche LLP, Mr. Jensen was the Chief Financial Officer of Redleaf Group. Earlier in his career, Mr. Jensen was an executive at Arthur Andersen LLP and served as the Managing Partner of the firm’s Silicon Valley Office and leader of the firm’s Global Technology Industry Practice. Mr. Jensen currently serves on the board of directors of a private firm, Exabeam, Inc., a cybersecurity company offering security analytics. Mr. Jensen served on the board of directors of Unwired Planet, Inc. (formerly Openwave Systems Inc.) from 2012 until 2015, Control4 Corporation from 2015 to 2019 and ForeScout Technologies, Inc. from 2013 to 2020. Mr. Jensen brings to the Company business experience in a number of advanced technology industry segments and substantial financial expertise. Mr. Jensen has experience in executive management derived from his service as an executive officer, as the managing partner of a significant practice of a major accounting firm and service as a member of a public company board of directors.
Biographical Information
James P. Lederer, age 63, has served as a director of the Company since March 2018. Mr. Lederer is an executive with decades of experience leading a preeminent company in the semiconductor industry. He served as an Executive Vice President and Officer of Qualcomm Technologies, Inc., a leading wireless technology company, including the dual Chief Financial Officer & Chief Operating Officer roles for Qualcomm CDMA Technologies (QCT), its semiconductor division, from 2008 until his retirement in January 2014. Prior to that role, he served as Chief Financial Officer of the company’s largest segment and additionally held a variety of senior management positions at Qualcomm, Inc., including Senior Vice President, Finance and Business Operations. Prior to joining Qualcomm in 1997, Mr. Lederer held a number of management positions at Motorola, General Motors and Scott Aviation. Mr. Lederer currently serves on the board of directors of Entegris, Inc. He holds a B.S. degree in Business Administration and an M.B.A. from the State University of New York at Buffalo, where he also serves on the Dean’s Advisory Council for the School of Management. Mr. Lederer brings to the Company broad management experience from the global semiconductor, mobile and wireless technology industries, including corporate finance, strategic planning, corporate development and worldwide operations. D. Jeffrey Richardson, age 59, has served as a director since December 2014 and as our Board chair since May 2018. Mr. Richardson joined LSI Corporation in 2005 and most recently served as Executive Vice President and Chief Operating Officer until the company’s acquisition by Avago Technologies in May 2014. He earlier served as executive vice president of various LSI divisions, including the Semiconductor Solutions Group, Networking and Storage Products Group, Custom Solutions Group and Corporate Planning and Strategy. Before joining LSI, Mr. Richardson held various management positions at Intel Corporation, including Vice President and General Manager of Intel’s Server Platforms Group, and the company’s Enterprise Platforms and Services Division. Mr. Richardson’s career also includes serving in technical roles at Altera Corporation, Chips and Technologies, and Amdahl Corporation. Mr. Richardson has served on the board of directors of Ambarella Corporation since March 2014, Kulicke and Soffa Industries, Inc. since May 2020, and Graphcore, Ltd. since March 2021. Mr. Richardson also served on the board of directors of Volterra Corporation from 2011 to 2013. Mr. Richardson brings to the Company extensive management experience in the advanced technology company environment, including operations, marketing, engineering and strategic transactions. Elizabeth Schwarting, age 60, has served as a director of the Company since March 2023. Since October 2015, Ms. Schwarting has been the Principal Member of DBS Ventures, LLC. where she serves as a consultant for various audiences relating to the automotive market, including automotive technology (with a special emphasis on ADAS, Automated Driving, Domain Controllers, and Power Electronics for Hybrid and Electric Systems), regulatory trends and business development. From 2009 to 2015, Ms. Schwarting served as Vice President of the Electronic Controls business unit for Delphi Corporation (now Aptiv PLC), an automotive parts company. As a member of the Executive Committee, she led a global team responsible for the Automotive ADAS and Safety Electronics product lines, the Body Electronics and Security product lines as well Power Electronics (for Hybrid and Electric Vehicles). From 1999 to 2009, Ms. Schwarting held several leadership positions at Delphi, including Vice President, Safety Systems, Global Director, Sales and Marketing, and General Motors Global Customer Director. Prior to joining Delphi, Ms. Schwarting held the position of General Manager and Vice President, Strategic Accounts for Eastman Kodak Company within the Consumer Imaging Division. Ms. Schwarting currently serves on the board of directors of Ambarella Corporation. Ms. Schwarting brings to the Company extensive management experience and knowledge of the automotive industry, a key Company market segment, and governance experience from her service on another public company board.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
2023 Director Compensation Table
2023 Director Compensation Table The following table sets forth information concerning compensation of our non-employee directors for the fiscal year ended December 30, 2023.
2023 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($) | Total ($) | | Richardson, D. Jeffrey | 130,000 | 189,967(2) | 319,967 | | Abrams, Robin A. | 85,000 | 189,967(3) | 274,967 | | Bettinger, Douglas | 70,000 | 258,285(4) | 328,285 | | Dallara, Que Thanh | 8,750 | 112,962(5) | 121,442 | | Forsyth, John | 8,333 | 112,962(6) | 121,025 | | Jensen, Mark E. | 90,000 | 189,967(7) | 279,967 | | Joshi, Anjali | 25,000 | —(8) | 25,000 | | Lederer, James P. | 95,000 | 189,967(9) | 284,967 | | Schwarting, Elizabeth | 51,458 | 219,882(10) | 271,340 | | Skillern, Raejeanne | 70,000 | 189,967(11) | 259,967 |
2023 Director Compensation Table
| (1) The chart below summarizes the gross cash amounts earned by non-employee directors for service during fiscal 2023 on the Board and its committees: |
2023 Director Compensation Table
| Name | Annual Board Service ($)† | Audit Committee ($) | Compensation Committee ($) | Nominating and Governance Committee ($) | Total ($) | | Richardson, D. Jeffrey | 115,000 | — | 10,000 | 5,000 | 130,000 | | Abrams, Robin A. | 60,000 | 10,000 | — | 15,000 | 85,000 | | Bettinger, Douglas | 60,000 | 10,000 | — | — | 70,000 | | Dallara, Que Thanh | 7,500 | — | — | 1,250 | 8,750 | | Forsyth, John | 7,500 | — | — | 833 | 8,333 | | Jensen, Mark E. | 60,000 | 30,000 | — | — | 90,000 | | Joshi, Anjali | 20,000 | — | 3,333 | 1,667 | 25,000 | | Lederer, James P. | 60,000 | 10,000 | 25,000 | — | 95,000 | | Schwarting, Elizabeth | 47,500 | — | — | 3,958 | 51,458 | | Skillern, Raejeanne | 60,000 | — | 10,000 | — | 70,000 |
2023 Director Compensation Table
| † Reflects pro-rata amounts for Board service and service on the respective committees during the year. |
2023 Director Compensation Table
| (2) The aggregate number of shares underlying unvested stock awards held by Mr. Richardson on December 30, 2023 was 2,246. |
2023 Director Compensation Table
| (3) The aggregate number of shares underlying unvested stock awards held by Ms. Abrams on December 30, 2023 was 2,246. |
2023 Director Compensation Table
| (4) The aggregate number of shares underlying unvested stock awards held by Mr. Bettinger on December 30, 2023 was 2,246. |
2023 Director Compensation Table
| (5) Ms. Dallara was appointed on November 10, 2023, with service as a director commencing November 14, 2023. The aggregate number of shares underlying unvested stock awards held by Ms. Dallara on December 30, 2023 was 1,621. |
2023 Director Compensation Table
| (6) Mr. Forsyth was appointed on November 10, 2023, with service as a director commencing November 14, 2023. The aggregate number of shares underlying unvested stock awards held by Mr. Forsyth on December 30, 2023 was 1,621. |
2023 Director Compensation Table
| (7) The aggregate number of shares underlying unvested stock awards held by Mr. Jensen on December 30, 2023 was 2,246. |
2023 Director Compensation Table
| (8) There were no aggregate number of shares underlying unvested stock awards held by Ms. Joshi on December 30, 2023. On March 10, 2023, Ms. Joshi notified the Company of her decision not to stand for reelection to the Board. |
2023 Director Compensation Table
| (9) The aggregate number of shares underlying unvested stock awards held by Mr. Lederer on December 30, 2023 was 2,246. |
2023 Director Compensation Table
| (10) Ms. Schwarting was appointed on March 10, 2023, with service as a director commencing March 14, 2023. The aggregate number of shares underlying unvested stock awards held by Ms. Schwarting on December 30, 2023 was 2,246. |
2023 Director Compensation Table
| (11) The aggregate number of shares underlying unvested stock awards held by Ms. Skillern on December 30, 2023 was 2,246. |
Narrative Discussion to 2023 Director Compensation Table
Narrative Discussion to 2023 Director Compensation Table The Company compensates its non-employee directors with cash retainers and equity grants. The cash retainers are comprised of annual retainers for service on the Board of Directors and its standing committees. In 2023, non-employee directors received a cash retainer of $60,000 per year for service on the Board of Directors, the Board Chair received an additional annual retainer of $55,000, and the chairs of the Audit Committee, Compensation Committee, and Nominating and Governance Committee received additional annual retainers of $20,000, $15,000, and $10,000, respectively. Committee members received additional annual retainers of $10,000 for the Audit and Compensation Committees, and $5,000 for the Nominating and Governance Committee. For non-employee directors that joined the Company during 2023, the annual retainer and fees were prorated based on their dates of service commencement. Director compensation is subject to review by the Compensation Committee annually. Directors received an RSU award following the annual meeting of stockholders for a number of shares of common stock determined by dividing $190,000 by the fair market value of a share of the common stock on the grant date (“Annual RSU Grant”), which vests and become payable with respect to 100% of the RSUs on the first anniversary of the grant date, provided that the director continues to serve as a director on such dates. If a non-employee director’s initial appointment to the Board is on a date other than the date of the Annual Meeting of Stockholders, on the 30th day following the date of that non-employee director’s appointment, he or she receives a prorated Annual RSU Grant equivalent to the Annual RSU Grant multiplied by a fraction with (i) the numerator equal to 12 minus the number of months completed since the Company’s last annual meeting of stockholders on the effective date of the non-employee director’s appointment, and (ii) the denominator equal to 12. In the event of a change in control, unvested RSUs and options held by our non-employee directors generally become vested and exercisable or payable in full effective immediately prior to the change in control. No non-employee director may be paid compensation for service as a non-employee director that, in the aggregate, exceeds $500,000 per fiscal year, increased to $750,000 for the fiscal year in which a non-employee director joins the Board of Directors as a non-employee director. Any equity awards or other compensation paid or provided to an individual for his or her services as an employee or consultant (other than as a non-employee director), will not count for purposes of these limits.
Executive Summary
| § Cash Incentive Awards — Paid annual cash incentive awards to our Named Executive Officers that reflected achievement in the range of 88.3% to 95.2% of their target annual cash incentive award opportunity. |
Executive Summary
| § Long-Term Incentive Compensation Awards — Granted time-based RSU awards that may be settled for shares of our common stock with aggregate values of (i) $4,000,000 for our CEO; (ii) $2,500,000 for Mr. Desale in connection with his hiring; and (iii) between $1,100,000 and $1,250,000 for each of our other Named Executive Officers; granted performance-based RSU (“PRSU”) awards, which vest three years from the date of grant, with aggregate target values of (i) $4,000,000 for our CEO; and (ii) between $1,100,000 and $1,250,000 for each of our other Named Executive Officers, excluding Mr. Desale; and granted a new-hire PRSU award that vests annually in equal installments over a three-year period with a target value of $2,500,000 for Mr. Desale in connection with his hiring. |
Executive Summary
Aligning Pay and Performance Our executive compensation program is driven by our pay-for-performance philosophy. As a result, we structure a significant portion of our Named Executive Officers’ target total direct compensation with variable elements tied to our performance. In addition, we set challenging target and threshold performance goals under our variable compensation plans to ensure that compensation is earned based upon exceptional performance against pre-established financial, operational and strategic goals. The following chart illustrates that, in the case of our CEO, 92% of his target total direct compensation for fiscal 2023 and, in the case of our other Named Executive Officers, on average 90% of their target total direct compensation for fiscal 2023 was “at risk” variable compensation in the form of a target annual cash incentive opportunity, a time-based RSU award and a target PRSU award (totals in chart may not equal 100% due to rounding). Executive Compensation-Related Policies and Practices We endeavor to align our executive compensation policies and practices with our governance standards. The Compensation Committee evaluates our executive compensation program on a regular basis to ensure that it is consistent with our short-term and long-term goals given the dynamic nature of our business and the market in which we compete for executive talent. The following summarizes our executive compensation and related governance policies and practices that were in place in fiscal 2023:
Executive Summary
| Executive Compensation Recovery (“Clawback”) Policy | We maintain a clawback policy providing for the recovery of incentive compensation awarded or paid to our CEO and other executive officers in the event the Company is required to prepare an accounting restatement due to the Company’s material noncompliance with any financial reporting requirement under the securities laws. | | No Stock Option Repricing | Our equity incentive plans expressly prohibit the repricing of stock options without stockholder approval. | | Hedging and Pledging Prohibitions | Our insider trading policy prohibits short sales, trading in derivative securities, entering into hedging transactions, pledging our securities as collateral for loans and holding our securities in margin accounts. | | “Double-Trigger” Change in Control Arrangements | Our change in control compensation arrangements generally are “double-trigger” arrangements that require both a change in control of the Company plus a qualifying termination of employment before payments and benefits are paid. | | Limited Tax “Gross-Ups” | We do not provide any tax “gross-ups” that may arise due to the application of Sections 280G and 4999 of the Internal Revenue Code (the “Code”) to our executive officers. We do not provide any other tax “gross-ups” to our executive officers, other than in connection with standard relocation benefits. | | Succession Planning | We have an executive assessment process to ensure oversight of performance and maintain a consistent succession planning process. |
Compensation Philosophy
| § Alignment with long-term stockholder interests, including increasing our long-term stock price performance relative to our peers; |
Compensation Philosophy
| § Rewarding our senior executives for achieving near and long-term business goals, including increasing our revenue and profitability, and meeting the ESG priorities outlined in our management business objectives; and |
Compensation-Setting Process
| § the scope of each executive officer’s role and responsibilities compared to other similarly situated executives at the companies in our compensation peer group and/or selected broad-based compensation surveys; |
Compensation-Setting Process
| § the potential of each individual executive officer to contribute to our long-term financial, operational and strategic objectives; |
Compensation-Setting Process
| § the compensation practices of our compensation peer group and the companies in selected broad-based compensation surveys and the positioning of each executive officer’s compensation in a ranking of these companies’ compensation levels based on an analysis of competitive market data; and |
Compensation-Setting Process
| § an analysis of competitive market data for our executive officer positions and evaluation of how the compensation we pay our executive officers compares both to our performance and to how the companies in our compensation peer group and/or in selected broad-based compensation surveys compensate their executives; |
Compensation-Setting Process
| § a review of and research on the composition of various alternative compensation peer groups; |
Compensation-Setting Process
| § an analysis of competitive market data for the compensation of non-employee members of our Board of Directors; |
Compensation-Setting Process
| § an analysis of competitive market data for compensation plans, programs and policies; and |
Compensation-Setting Process
The terms of Semler Brossy’s engagement included reporting directly to the Compensation Committee chair. Semler Brossy also coordinated with our management for data collection and job matching for our executive officers. In fiscal 2023, Semler Brossy provided no other services to us. The Compensation Committee has evaluated its relationship with Semler Brossy to ensure that it believes that Semler Brossy is independent from management. This review process included a review of the services that Semler Brossy provided, the quality of those services and the fees associated with the services provided during fiscal 2023. Based on this review, as well as consideration of the factors affecting independence set forth in Exchange Act Rule 10C-1(b)(4), Rule 5605(d)(3)(D) of the Nasdaq Marketplace Rules and such other factors as were deemed relevant under the circumstances, the Compensation Committee has determined that no conflict of interest was raised as a result of the work performed by Semler Brossy. Competitive Positioning The Compensation Committee believes that peer group comparisons are useful guides to measure the competitiveness of our executive compensation program and related policies and practices. For purposes of assessing our executive compensation against the competitive market, the Compensation Committee reviews and considers the compensation levels and practices of a select group of peer companies. This compensation peer group consists of technology companies that are similar to us in terms of revenue, market capitalization and industry focus. The competitive data drawn from this compensation peer group is only one of several factors that the Compensation Committee considers in making its decisions with respect to the compensation of our executive officers. The compensation peer group that the Compensation Committee used to analyze the compensation of our executive officers and make its compensation decisions for fiscal 2023 was comprised of publicly traded technology companies who hire executive talent comparable to our executives. In August 2022, the Compensation Committee determined no modifications were needed to the compensation peer group approved by the Compensation Committee in July 2021, which consisted of the following companies, provided that Inphi Corporation was acquired in 2021 and is no longer listed below:
Compensation-Setting Process
In August 2023, the Compensation Committee decided to remove Ambarella Inc., Rambus Inc. and Xperi Corporation from the compensation peer group approved in August 2022, and to include Skyworks Solutions, Inc. and Teradyne Inc. to better align the compensation peer group from a size and valuation perspective for purposes of setting 2024 compensation. As part of its annual executive compensation review, the Compensation Committee used data gathered by Semler Brossy from the public filings of the companies in our compensation peer group, as well as data from special data cuts drawn from the Radford 2023 Global Technology Survey of companies that are similar to us in revenue, market capitalization and industry focus 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. This data permitted the Compensation Committee to evaluate the competitive market when formulating its recommendations for the total direct compensation package of our CEO and when determining the total direct compensation packages for our other executive officers, including base salary, target annual cash incentive awards and long-term incentive compensation. The Compensation Committee reviews our compensation peer group at least annually and makes adjustments to its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group.
Compensation Elements
The actual base salaries paid to our Named Executive Officers in fiscal 2023 are set forth in the “2023 Summary Compensation Table” below. Annual Cash-Based Corporate Incentive Compensation We use an annual cash-based corporate incentive program in which all of our non-sales employees (including our Named Executive Officers) are eligible to participate to achieve our annual business goals. Although Mr. Nelson is our Senior Vice President, Worldwide Sales, he participated in our annual cash bonus program rather than our sales incentive plan in fiscal 2023. In November 2022, the Compensation Committee approved the 2023 Corporate Incentive Plan to provide incentives for these employees to meet or exceed the principal business objectives set forth in our fiscal 2023 annual operating plan. Under the 2023 Corporate Incentive Plan, annual cash incentive award payments were to be funded based on our level of achievement of pre-established corporate performance goals and then subject to adjustment for individual performance as described below. Target Annual Cash Incentive Awards For purposes of the 2023 Corporate Incentive Plan, each Named Executive Officer’s target annual cash incentive award was to be based upon a specific percentage of his or her annual base salary. Each Named Executive Officer’s target annual cash incentive award (as a percentage of his or her base salary) for fiscal 2023 was (i) 120% of base salary for the CEO and (ii) 75% of base salary for each of our other Named Executive Officers, excluding Mr. Desale. The Compensation Committee recommended to the Board and the Board increased the fiscal 2023 target annual cash incentive for our CEO by 10 percentage points from the fiscal 2022 target to reflect current market practices. Corporate Performance Objectives Each Named Executive Officer was eligible to receive an annual cash incentive award payment under the 2023 Corporate Incentive Plan based upon his or her individual performance and the attainment of one or more corporate performance components that were established by the Compensation Committee, and which related to both financial and operational objectives. In November 2022, the Compensation Committee selected three equally weighted performance components for the 2023 Corporate Incentive Plan: (i) non-GAAP operating income, (ii) revenue, and (iii) management objectives. The Compensation Committee believed these components were appropriate because, in its view, they continued to be the best indicators of successful execution of our annual operating plan and provided a strong emphasis on growth while managing expenses and strengthening our customer and employee relationships, which it believed would most directly influence the creation of sustainable long-term stockholder value. For purposes of the 2023 Corporate Incentive Plan:
Compensation Elements
The Compensation Committee established threshold, target, and maximum achievement levels for each of the two financial performance components. To the extent that performance for either component was below the threshold performance level, there would be no payment with respect to that component. In addition, the potential payment for any such component was capped at the maximum performance level. Achievement levels and payment percentages for performance between the threshold and maximum performance levels were set forth in a matrix approved by the Compensation Committee. Payment for performance at points between those reflected in the matrix were to be calculated using straight-line interpolation. The resulting performance levels for the two financial performance components were as follows:
Non-GAAP Operating Income
| Attainment vs. Plan | Amount | Payout Percentage | | Threshold | $209.4 million | 0% | | Maximum | $444.9 million | 250% |
Revenue
| Attainment vs. Plan | Amount | Payout Percentage | | Threshold | $598.4 million | 0% | | Maximum | $972.4 million | 250% |
Revenue
The Compensation Committee also determined that the minimum threshold for either the non-GAAP operating income component or the revenue component must be attained for there to be any payout with respect to the management objectives component. The management objectives component was based on the achievement of objectives related to (i) delivering fiscal 2023 gross margin above a pre-established target, including through product cost savings, (ii) expanding serviceable addressable market through successful execution of new product platforms, including the Lattice Avant(TM) product platform, and the build-out of a new product pipeline, (iii) delivering new products on a fast cadence and delivering certain application specific solutions to customers, (iv) driving revenue growth above a specified level through the achievement of certain design wins goals, including from strategic customers, (v) achieving industry leading employee engagement and retention, (vi) implementing initiatives that strengthen the Company culture of being a learning organization, and (vii) demonstrating continued progress on Company Corporate Stewardship and ESG initiatives. These management objectives were chosen in order to drive the expansion of gross margin to achieve our target business model, meet execution commitments on our new product platform, deliver additional solution value to our customers, drive new product adoption in order to achieve future revenue targets, help enhance employee engagement and development, and further our Corporate Stewardship and ESG initiatives. Under the 2023 Corporate Incentive Plan, the maximum payout percentage for the non-GAAP operating income and revenue components was 250%, and the maximum payout percentage for the management objectives component was 100%, which is consistent with the 2022 Corporate Incentive Plan maximum payout percentages. Individual Performance In addition to our actual results as measured against the corporate performance objectives under the 2023 Corporate Incentive Plan, each Named Executive Officer’s, tentative annual cash incentive award payment was subject to a discretionary increase or decrease by up to 100% based on a general assessment of his or her individual contributions for the year. In the case of our CEO, this assessment was made by the independent members of our Board of Directors. In the case of each of our Named Executive Officers (other than our CEO), this assessment generally involved a review of his or her functional area for the year as well as consideration of his or her contributions to our overall financial and operational results. Annual Cash Incentive Award Payments In February 2024, the Compensation Committee determined the annual cash incentive award payments for our Named Executive Officers for fiscal 2023. First, the Compensation Committee reviewed our performance with respect to each of the corporate performance components and determined the extent to which each objective had been achieved for the year. Specifically, the Compensation Committee determined that our non-GAAP operating income for fiscal 2023 was approximately $293.6 million, our revenue for fiscal 2023 was approximately $737.2 million and, based on our achievement with respect to each of the pre-established management objectives for the year, our attainment level for the management objectives component was 71%. Based on these results, the Compensation Committee then determined the percentage achievement of each performance component and the corresponding weighted payment level, as follows:
Revenue
After the overall payment level for the corporate performance components under the 2023 Corporate Incentive Plan had been determined to be 88.3%, our CEO met with the Compensation Committee and provided his recommendations with respect to any further adjustments to the Named Executive Officers’ annual cash incentive award payments based on their individual performance. The Compensation Committee considered these recommendations, as well as the assessment of the individual contributions of our CEO by the independent members of our Board of Directors and its resulting recommendation for an individual performance adjustment for our CEO, and decided to make an adjustment in the final payment under the 2023 Corporate Incentive Plan to Mr. Elashmawi based on Mr. Elashmawi’s individual performance in 2023, which included successfully executing the Company’s first Developers Conference. The Compensation Committee made no other adjustments based on the other Named Executive Officers’ individual performance. The Compensation Committee recommended to the independent members of our Board of Directors the annual cash incentive award payment for our CEO set forth in the following table, which was subsequently approved by the independent members of our Board of Directors in February 2024. The annual cash incentive award payments to our Named Executive Officers were as follows:
Revenue
The annual cash incentive award payments made to our Named Executive Officers for fiscal 2023 are set forth in the “2023 Summary Compensation Table” below. Long-Term Incentive Compensation We use long-term incentive compensation in the form of equity awards to incent and reward our Named Executive Officers to help drive long-term corporate performance based on the value of our common stock and, thereby, to align their interests with those of our stockholders. In fiscal 2023, these equity awards were granted in the form of both PRSU awards and time-based RSU awards. We believe that an appropriate mix of PRSU awards and RSU awards allow us to compete effectively in a highly competitive market and provide an appropriate long-term incentive for our Named Executive Officers. Typically, we have granted equity awards to our executive officers as part of the Compensation Committee’s annual review of executive compensation. To date, the Compensation Committee has not applied a rigid formula in determining the size of these equity awards. Instead, the Compensation Committee determines the amount of each equity award after taking into consideration a competitive market analysis prepared by its compensation consultant, the recommendations of our CEO (except with respect to his own equity awards), the amount of equity compensation held by each executive officer (including the current economic value of his or her unvested equity and the ability of these unvested holdings to satisfy our retention objectives), as well as the other factors described in “Compensation-Setting Process – Setting Target Total Direct Compensation” above. In February 2023, after taking into consideration a competitive market analysis prepared by Semler Brossy and the recommendations of our CEO (except with respect to his own equity awards), as well as the factors described in the preceding paragraph, the Compensation Committee recommended the independent members of the Board of Directors grant equity awards to our CEO, and granted equity awards to our Named Executive Officers, excluding Mr. Desale, in the amounts set forth in the chart below. Such equity grants included (1) a PRSU award with performance criteria based on our relative total stockholder return (“TSR”) in comparison to an index, and (2) an RSU award with time-based vesting requirements. The independent members of our Board of Directors subsequently approved the grant of the equity awards to our CEO in February 2023. In September 2023, after a review of market and compensation peer group data, the Compensation Committee granted new-hire equity awards to Mr. Desale in the amounts set forth in the chart below as an incentive to join the Company and to offset forfeited awards from his previous employer. Such new-hire equity grants included (1) a PRSU award with performance criteria based on our relative TSR in comparison to an index, and (2) an RSU award with time-based vesting. The equity awards granted to our Named Executive Officers in fiscal 2023 were as follows:
Revenue
| Named Executive Officer | TSR Performance Restricted Stock Unit Award (target number of shares)(1) | TSR Performance Restricted Stock Unit Award (target value) | Restricted Stock Unit Award (number of shares)(1) | Restricted Stock Unit Award (target value) | Aggregate Target Value of Award | | Mr. Anderson | 49,997 | $4,000,000 | 49,997 | $4,000,000 | $8,000,000 | | Ms. Luther | 15,624 | $1,250,000 | 15,624 | $1,250,000 | $2,500,000 | | Mr. Desale(2) | 27,286 | $2,500,000 | 27,285 | $2,500,000 | $5,000,000 | | Mr. Elashmawi | 13,749 | $1,100,000 | 13,749 | $1,100,000 | $2,200,000 | | Mr. Nelson | 13,749 | $1,100,000 | 13,749 | $1,100,000 | $2,200,000 |
Revenue
| § If the relative TSR performance of our common stock does not achieve the threshold performance level, then none of the PRSUs will vest. |
Revenue
| § If the relative TSR performance of our common stock achieves at least the threshold performance level, then the PRSUs will vest based on the following performance matrix: |
Revenue
| Company Performance (Percentile Ranking) | Percentage of Performance Shares Vesting (as a Percentage of the Target Number of PRSUs) | | Less than 26th Percentile | 0% | | 26th Percentile | 50% | | 55th Percentile | 100% | | 75th Percentile | 200%/CEO 250% |
Revenue
| § If the relative TSR performance of our common stock is between the specified percentage ranges in the performance matrix, the Compensation Committee will determine the percentage of the target number of PRSUs through straight-line interpolation, with the result rounded to the nearest whole share. |
Revenue
New-Hire TSR-Based PRSU Award The new-hire TSR-Based PRSU award granted to Mr. Desale in 2023 vests annually over a three-year period with 1/3 of the units subject to the award vesting on the first anniversary of the date of grant and the remaining units vesting at the rate of 1/3 of the total number of units subject to the award on each anniversary thereafter, based upon the total TSR of the Company relative to the Index. The units granted will be tested for vesting on each anniversary from the date of grant and will vest according to the following terms:
Revenue
| § If the relative TSR performance of our common stock does not achieve the threshold performance level, then none of the PRSUs will vest. |
Revenue
| § If the relative TSR performance of our common stock achieves at least the threshold performance level, then the PRSUs will vest based on the following performance matrix: |
Revenue
| Company Performance (Percentile Ranking) | Percentage of Performance Shares Vesting (as a Percentage of the Target Number of PRSUs) | | Less than 26th Percentile | 0% | | 26th Percentile | 50% | | 55th Percentile | 100% | | 75th Percentile | 200% |
Revenue
| § If the relative TSR performance of our common stock is between the specified percentage ranges in the performance matrix, the Compensation Committee will determine the percentage of the target number of PRSUs through straight-line interpolation, with the result rounded to the nearest whole share. |
Revenue
RSU Awards The time-based RSU awards vest over a four-year period, with 25% of the units subject to the awards vesting on the first anniversary of the date of grant and the remaining units vesting at the rate of 6.25% of the total number of units subject to the awards as of the end of each three-month period thereafter, contingent upon each Named Executive Officer’s continued service with us through each applicable vesting date. Upon vesting, the RSU awards may be settled by issuing that number of shares of our common stock that equal the number of units that have vested.
Employment Agreements
Employment Agreements Each of our Named Executive Officers has entered into an employment agreement with the Company. The Compensation Committee regularly reviews our form of employment agreement to align with current market practices. We believe these agreements provide for the best interests of the Company, support the retention of our Named Executive Officers, and help achieve consistency among similar officers. Each of these employment agreements provides for “at will” employment (meaning that either we or the Named Executive Officer may terminate the employment relationship at any time without cause) and sets forth the then current compensation arrangements for the Named Executive Officer, including a base salary and participation in our employee benefit programs. In addition, these employment agreements provide that our Named Executive Officers will be eligible to receive certain severance payments and benefits in connection with certain involuntary terminations of employment, including in connection with a change in control of the Company. These post-employment compensation arrangements are discussed in “Post-Employment Compensation” below. For detailed descriptions of the employment agreements we maintained with our Named Executive Officers during fiscal 2023, see “Potential Payments upon Termination or Change in Control” below.
Post-Employment Compensation
Post-Employment Compensation The employment agreements of our Named Executive Officers contain certain protections in the event of their involuntary termination of employment under specified circumstances, including following a change in control of the Company. These arrangements provide reasonable compensation to the Named Executive Officer if he or she leaves our employ under certain circumstances to facilitate his or her transition to new employment. Further, in some instances we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing Named Executive Officer to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits. We also believe that these arrangements help maintain their continued focus and dedication to their assigned duties to maximize stockholder value if there is a potential transaction that could involve a change in control of the Company. In determining payment and benefit levels under the various circumstances triggering post-employment compensation provisions under the employment agreements of our Named Executive Officers, the Compensation Committee has drawn a distinction between (i) voluntary terminations of employment without good reason or terminations of employment for cause and (ii) terminations of employment without cause or voluntary terminations of employment for good reason. Payment in the latter circumstances has been deemed appropriate in light of the benefits described in the prior paragraphs, as well as the likelihood that the Named Executive Officer’s departure is due, at least in part, to circumstances not within his or her control. In contrast, we believe that payments are not appropriate in the event of a termination of employment for cause or a voluntary resignation without good reason because such events often reflect either performance challenges or an affirmative decision by the executive to end his or her relationship without fault by the Company. All payments and benefits that may be provided under a Named Executive Officer’s employment agreement in connection with a change in control of the Company are payable only if there is a subsequent loss of employment by the Named Executive Officer (a so-called “double-trigger” arrangement). In the case of the acceleration of vesting of outstanding equity awards, we use this double-trigger arrangement instead of a single-trigger arrangement (where the vesting acceleration would apply upon the change in control) to protect against the loss of retention value following a change in control of the Company and to avoid windfalls, both of which could occur if vesting of either equity or cash-based awards accelerated automatically as a result of the transaction. In the event of a change in control of the Company, to the extent Section 280G or 4999 of the Code is applicable to a Named Executive Officer, such individual is entitled to receive either payment of the full amounts to which he or she is entitled or payment of such lesser amount that does not trigger the excise tax imposed by Section 4999, whichever results in him or her receiving the greatest after-tax amount. We do not use excise tax payments (or “gross-ups”) relating to a change in control of the Company and have no such obligations in place with respect to any of our Named Executive Officers. We believe that having in place reasonable and competitive post-employment compensation arrangements in the event of a change in control of the Company is essential to attracting and retaining highly qualified executives. The Compensation Committee does not consider the specific amounts payable under the post-employment compensation arrangements when determining the annual compensation for our Named Executive Officers. We do believe, however, that these arrangements are necessary to offer compensation packages that are competitive. For a summary of the material terms and conditions of the post-employment compensation arrangements we maintained with our Named Executive Officers during fiscal 2023, as well as an estimate of the potential payments and benefits that they would have been eligible to receive if a hypothetical change in control or other trigger event had occurred on December 30, 2023, see “Potential Payments Upon Termination or Change in Control” below.
Summary Compensation and Equity Tables
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(2) | Total ($) | | James R. Anderson President and CEO | 2023 | 711,539 | — | 12,897,726 | — | 754,965 | 16,368 | 14,380,598 | | | 2022 | 664,500 | — | 9,665,998 | — | 1,307,682 | 15,243 | 11,653,423 | | | 2021 | 627,000 | — | 16,736,285 | — | 1,010,097 | 14,040 | 18,387,422 | | Sherri Luther SVP, CFO | 2023 | 428,563 | — | 3,547,117 | — | 284,130 | 17,688 | 4,277,498 | | | 2022 | 405,256 | — | 2,831,937 | — | 543,651 | 16,563 | 3,797,406 | | | 2021 | 388,039 | — | 4,543,035 | — | 406,335 | 15,429 | 5,352,837 | | Pravin Desale SVP, R&D(3) | 2023 | 115,385 | — | 5,889,421 | — | 81,508 | 5,313 | 6,091,626 | | | 2022 | — | — | — | — | — | — | — | | | 2021 | — | — | — | — | — | — | — | | Esam Elashmawi SVP, Chief Strategy and Marketing Officer | 2023 | 414,615 | — | 3,121,435 | — | 296,310 | 16,981 | 3,849,342 | | | 2022 | 395,133 | — | 2,265,518 | — | 530,043 | 15,856 | 3,206,550 | | | 2021 | 379,143 | — | 3,997,801 | — | 397,020 | 15,181 | 4,789,145 | | Mark Nelson SVP, Worldwide Sales | 2023 | 446,295 | — | 3,121,435 | — | 295,834 | 17,688 | 3,881,252 | | | 2022 | 427,212 | — | 2,265,518 | — | 622,581 | 16,563 | 3,331,874 | | | 2021 | 416,635 | — | 3,634,412 | — | 463,361 | 15,888 | 4,530,296 |
2023 Grants of Plan-Based Awards Table
2023 Grants of Plan-Based Awards Table
2023 Grants of Plan-Based Awards Table
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(1) | | | | Thresh- old ($) | Target ($) | Maxi- mum ($) | Thres- hold (#) | Target (#) | Maxi- mum (#) | | | | | James R. Anderson President & CEO | | — | 855,000 | 754,965 | — | — | — | — | — | | | | 2/17/2023 | — | — | — | — | — | — | 49,997 | — | 4,354,739 | | | 2/17/2023 | — | — | — | — | 49,997 | 124,993 | — | — | 8,542,987 | | Sherri Luther SVP, CFO | | — | 321,778 | 284,130 | — | — | — | — | — | | | | 2/17/2023 | — | — | — | — | — | — | 15,624 | — | 1,360,850 | | | 2/17/2023 | — | — | — | — | 15,624 | 31,248 | — | — | 2,186,266 | | Pravin Desale SVP, R&D | | — | 92,308 | 81,508 | — | — | — | — | — | | | | 9/11/2023 | — | — | — | — | — | — | 27,285 | — | 2,455,377 | | | 9/11/2023 | — | — | — | — | 27,286 | 54,572 | — | — | 3,434,043 | | Esam Elashmawi SVP, Chief Strategy and Marketing Officer | | — | 311,250 | 296,310 | — | — | — | — | — | | | | 2/17/2023 | — | — | — | — | — | — | 13,749 | — | 1,197,538 | | | 2/17/2023 | — | — | — | — | 13,749 | 27,498 | — | — | 1,923,898 | | Mark Nelson SVP, Worldwide Sales | | — | 335,032 | 295,834 | — | — | — | — | — | | | | 2/17/2023 | — | — | — | — | — | — | 13,749 | — | 1,197,538 | | | 2/17/2023 | — | — | — | — | 13,749 | 27,498 | — | — | 1,923,898 |
2023 Grants of Plan-Based Awards Table
| (1) Fair value as of the grant date was determined in accordance with ASC 718. The assumptions used to calculate the value of the awards are set forth in Note 11 in the Notes to Consolidated Financial Statements in our Annual Report. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table Amounts in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table for fiscal years 2021, 2022, and 2023 represent payments of awards under our Corporate Incentive Plan for each of those years. Each Named Executive Officer’s potential award was based on a specified percentage of his or her annual base salary and the potential award increases when and if a Named Executive Officer’s annual base salary increases. Payments under our Corporate Incentive Plan are made annually based on the achievement of the goals applicable to the year. Please see the section “Compensation Discussion and Analysis” above for more information about our Corporate Incentive Plan for fiscal 2023. Other elements of executive compensation include participation in a broad-based life and disability insurance program, broad-based medical benefits, and the ability to defer compensation pursuant to a broad-based 401(k) plan that provides matching contributions. The Company does not maintain a pension plan or any other defined benefit retirement plans. The Company provides certain supplemental life and disability insurance coverage to executive officers and certain other members of senior management. Because the Company negotiates these insurance arrangements on a bulk basis, such insurance coverage, whether issued on a group basis or individually underwritten, is obtained by the Company at rates that are likely to be better than those obtainable by individuals seeking comparable insurance coverage on their own. The premiums paid by the Company for such supplemental insurance are considered a taxable benefit to the employee. The principal equity components of our executive compensation are time-based RSUs and PRSUs. We believe that PRSUs align the appropriate incentives of our executives with the desired performance outcomes of the Company. We believe that time-based RSUs help us retain our executives by providing a means of retention and motivation for our executives and also align their interests with long-term stock price appreciation, while also ensuring that they receive some value from their equity awards since the RSUs will never be out of the money. These grants are intended to align the interests of our executives with those of our stockholders and we intend to continue our increased focus on this alignment. Since 2018, the Company has not issued stock options to our executives. Prior to 2018, a portion of our executive compensation consisted of stock options. All stock option grants have a per share exercise price equal to the fair market value of our stock on the date of grant and a seven-year term. The Company has not granted, nor does it intend in the future to grant, equity-based compensation awards (stock options, time-based RSUs and/or PRSUs) to executives in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our stock, such as a significant positive or negative earnings announcement. Similarly, the Company has not timed, nor does it intend in the future to time, the release of material nonpublic information based on equity award grant dates.
2023 Outstanding Equity Awards at Fiscal Year-End Table
2023 Outstanding Equity Awards at Fiscal Year-End Table
2023 Outstanding Equity Awards at Fiscal Year-End Table
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercis- able (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(**) | Equity Incentive Plan Awards: Number of Unearned 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 ($) | | James R. Anderson President & CEO | 174,363(1) | | | 8.24 | 9/4/2025 | | | | | | | | | | | | 5,687(2) | 392,346 | | | | | | | | | | 13,542(3) | 934,263 | | | | | | | | | | | | 54,736(4) | 3,776,237 | | | | | | | | | | 147,103(5) | 10,148,636 | | | | | | | | 29,892(6) | 2,062,249 | | | | | | | | | | | | 53,142(7) | 3,666,267 | | | | | | | | 49,997(8) | 3,449,293 | | | | | | | | | | | | 49,997(9) | 3,449,293 | | Sherri Luther SVP, CFO | | | | | | 1,820(2) | 125,562 | | | | | | | | | | 4,455(3) | 307,350 | | | | | | | | | | | | 14,254(4) | 983,383 | | | | | | | | | | 42,762(5) | 2,950,150 | | | | | | | | 9,964(6) | 687,416 | | | | | | | | | | | | 17,714(7) | 1,222,089 | | | | | | | | 15,624(8) | 1,077,900 | | | | | | | | | | | | 15,624(9) | 1,077,900 | | Pravin Desale SVP, R&D | | | | | | 27,285(10) | 1,882,392 | | | | | | | | | | | | 27,286(11) | 1,882,461 | | Esam Elashmawi SVP, Chief Strategy and Marketing Officer | | | | | | 1,820(2) | 125,562 | | | | | | | | | | 3,920(3) | 270,441 | | | | | | | | | | | | 12,543(4) | 865,342 | | | | | | | | | | 37,630(5) | 2,596,094 | | | | | | | | 7,971(6) | 549,919 | | | | | | | | | | | | 14,171(7) | 977,657 | | | | | | | | 13,749(8) | 948,544 | | | | | | | | | | | | 13,749(9) | 948,544 | | Mark Nelson SVP, Worldwide Sales | | | | | | 1,820(2) | 125,562 | | | | | | | | | | 3,564(3) | 245,880 | | | | | | | | | | | | 11,403(4) | 786,693 | | | | | | | | | | 34,210(5) | 2,360,148 | | | | | | | | 7,971(6) | 549,919 | | | | | | | | | | | | 14,171(7) | 977,657 | | | | | | | | 13,749(8) | 948,544 | | | | | | | | | | | | 13,749(9) | 948,544 |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| ** The market value of shares that have not vested was determined based on the fair market value of the Company’s common stock as of December 30, 2023, the last business day of fiscal 2023. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (1) These stock options were granted on September 4, 2018. The options vest at the rate of 33.33% of the total option shares as of one year from the grant date, and at the rate of 8.33% of the total option shares as of the end of each three-month period thereafter. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (2) These RSUs were granted on February 14, 2020. The RSUs vest at the rate of 25% of the total RSUs as of one year from the grant date, and at the rate of 6.25% of the total RSUs as of the end of each three-month period thereafter. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (3) These RSUs were granted on February 19, 2021. The RSUs vest at the rate of 25% of the total RSUs as of one year from the grant date, and at the rate of 6.25% of the total RSUs as of the end of each three-month period thereafter. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (4) These performance RSUs were granted on February 19, 2021 and vest upon achievement of the market conditions, and assume achievement at the target performance level. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (5) These performance RSUs were granted on February 19, 2021 and vest upon achievement of the performance conditions, and assume achievement at the target performance level. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (6) These RSUs were granted on February 18, 2022. The RSUs vest at the rate of 25% of the total RSUs as of one year from the grant date, and at the rate of 6.25% of the total RSUs as of the end of each three-month period thereafter. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (7) These performance RSUs were granted on February 18, 2022 and vest upon achievement of the market conditions, and assume achievement at the target performance level. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (8) These RSUs were granted on February 17, 2023. The RSUs vest at the rate of 25% of the total RSUs as of one year from the grant date, and at the rate of 6.25% of the total RSUs as of the end of each three-month period thereafter. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (9) These performance RSUs were granted on February 17, 2023 and vest upon achievement of the market conditions, and assume achievement at the target performance level. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (10) These RSUs were granted on September 11, 2023. The RSUs vest at the rate of 25% of the total RSUs as of one year from the grant date, and at the rate of 6.25% of the total RSUs as of the end of each three-month period thereafter. |
2023 Outstanding Equity Awards at Fiscal Year-End Table
| (11) These performance RSUs were granted on September 11, 2023 and vest upon achievement of the market conditions. |
2023 Option Exercises and Stock Vested Table
2023 Option Exercises and Stock Vested Table
2023 Option Exercises and Stock Vested Table
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | James R. Anderson President & CEO | 160,000 | 12,382,887 | 321,607 | 26,821,951 | | Sherri Luther, SVP, CFO | — | — | 100,380 | 8,181,442 | | Pravin Desale, SVP, R&D | — | — | — | — | | Esam Elashmawi, SVP, Chief Strategy and Marketing Officer | — | — | 86,722 | 7,236,050 | | Mark Nelson, SVP, Worldwide Sales | — | — | 97,450 | 7,914,357 |
2023 Option Exercises and Stock Vested Table
| (1) The value realized on vesting was determined based on the fair market value of the Company’s common stock on the date of vesting. |
Potential Payments upon Termination or Change-in-Control
Potential Payments upon Termination or Change-in-Control Employment Agreement with James R. Anderson In connection with his hiring, the Company entered into an employment agreement with Mr. Anderson effective September 4, 2018, which was amended in 2020. Under the terms of the agreement, in the event of an Involuntary Termination (which is defined as termination of his employment by the Company without Cause (as defined in the agreement) or by Mr. Anderson for Good Reason (as defined in the agreement)), Mr. Anderson will receive the following severance payments and benefits:
Potential Payments upon Termination or Change-in-Control
| § a lump sum payment equal to Mr. Anderson’s then base salary, plus an amount equal to the annual incentive payment that Mr. Anderson would have earned had his employment continued through the end of the fiscal year in which the Involuntary Termination occurs, with such amount to be estimated reasonably and in good faith by the Company’s finance group at the time of the Involuntary Termination based on the anticipated actual payout as of the end of the fiscal year based on the performance of the Company; |
Potential Payments upon Termination or Change-in-Control
| § if Mr. Anderson elects to continue health insurance coverage under COBRA, reimbursement of the monthly COBRA premium for him and his eligible covered dependents until the earliest of 12 months after the termination date, the date he commences receiving substantially equivalent coverage in connection with new employment or the date he is no longer entitled to continuation coverage under the Company’s group health plan; and |
Potential Payments upon Termination or Change-in-Control
| § acceleration of the vesting of Mr. Anderson’s equity awards with respect to an additional number of shares of Company common stock as if Mr. Anderson had continued service with the Company for an additional 12 months following the date of his Involuntary Termination, with any performance-based equity awards vesting by reason of a determination/testing date falling within the 12-month period following the date of the Involuntary Termination vesting at the target amount (i.e., at the 100% vesting level for the applicable determination/testing date). |
Potential Payments upon Termination or Change-in-Control
If the Involuntary Termination occurs in connection with a change in control (which includes an Involuntary Termination that occurs during the period beginning 90 days prior to the change in control and ending 24 months following the change in control), then Mr. Anderson will fully vest in all his outstanding equity awards and the amount of the lump sum cash severance payment described in the first bullet above will be increased to two times his then base salary, plus two times his then target bonus amount. In order to receive the severance payments and benefits described above, Mr. Anderson is required to timely sign and not revoke a separation agreement and release of claims and to continue to comply with the post-employment non-solicitation and non-disparagement covenants in the agreement. In the event any payments or benefits to be provided to Mr. Anderson (including any severance payments or benefits under the agreement) are subject to the excise tax imposed by Section 4999 of the Internal Revenue Code as a result of such payments or benefits being classified as “parachute payments” under Section 280G of the Internal Revenue Code, such payments and benefits will either be paid in full or reduced to a lesser that would result in no portion of such payments and benefits being subject to the excise tax, whichever would entitle Mr. Anderson to receive the greatest after-tax amount. In the event of a change in control:
Potential Payments upon Termination or Change-in-Control
| § Mr. Anderson’s equity awards that vest based on performance will vest based on the terms of such awards, provided that if no treatment has been set forth in such award then for purposes of determining performance under any relative TSR awards outstanding on or granted after the |
Potential Payments upon Termination or Change-in-Control
| effective date of the agreement, then (i) the ending average stock price will be determined as the price per share paid for the Company’s stock in the change in control and the peer group ending average stock price will be determined based on the average closing stock prices for the component members of the peer group for the 30-trading days ending prior to the date of the change in control, (ii) for purposes of any tranche where the determination period has not commenced as of the date of the public announcement of the proposed change in control, the Company stock price for the initial date of such determination period will be deemed to be the price of the Company’s stock as of the date of the original performance grant, and (iii) this calculation will be applied to any tranches of the relative TSR awards that were eligible to vest for measurement periods ending on or after the date of the change in control and those tranches will be converted to RSUs and will vest on the originally scheduled measurement dates, subject to Mr. Anderson remaining a service provider to the Company or its successor through such dates and such awards being afforded the same protection under the agreement as equity awards that vest solely based on service; and |
Potential Payments upon Termination or Change-in-Control
For purposes of Mr. Anderson’s employment agreement, “Cause” means (i) Mr. Anderson’s material breach of the agreement that is not corrected within a 30-day correction period that begins upon delivery to Mr. Anderson of a written demand from the Company that describes the basis for the Company’s belief that Mr. Anderson has materially breached the agreement; (ii) any refusal to comply with the reasonable and lawful instructions of the board of directors; (iii) any willful act of fraud or dishonesty that causes material damage to the Company; (iv) any willful violation of the Company’s insider trading policy; (v) any willful violation of the Company’s conflict of interest policies; (vi) any willful unauthorized use or disclosure of trade secrets or other confidential information; or (vii) Mr. Anderson’s conviction of a felony. For purposes of Mr. Anderson’s employment agreement, “Good Reason” means the occurrence of any of the following, without Mr. Anderson’s express written consent: (i) a material diminution of Mr. Anderson’s duties, responsibilities, or authority; (ii) a material diminution of Mr. Anderson’s base salary or target bonus amount that also is applied to substantially all other executive officers of the Company on the approval of the board of directors if Mr. Anderson’s reduction is substantially proportionate to, or no greater than (on a percentage basis), the reduction applied to substantially all other executive officers; (iii) the Company’s material breach of the agreement; (iv) a requirement imposed by the Company or any successor to the Company that Mr. Anderson report to a corporate officer or employee rather than to the board of directors or any successor board of directors; (v) the Company requiring Mr. Anderson to relocate his primary place of employment to a facility or location that is more than 30 miles from his principal place of employment as of the effective date of the agreement; or (vi) the Company’s failure to have any successor promptly agree in writing to assume the Company’s obligations hereunder, except where the agreement is assumed by the successor by operation of law; provided, however, that Mr. Anderson will only have Good Reason if (i) he notifies the board of directors in writing of the existence of the condition which he believes constitutes Good Reason within 90 days of the initial existence of such condition (which notice specifically identifies such condition), (ii) the Company fails to remedy such condition within 30 days after the date on which the board of directors receives such notice, and (iii) his resignation is effective within 30 days after the expiration of such 30-day remedial period. Employment Agreements with Other Named Executive Officers The following paragraphs describe the terms of the employment agreements between the Company and each of Ms. Luther, Mr. Desale, Mr. Elashmawi and Mr. Nelson that provide for payment of benefits to our Named Executive Officers at, following, or in connection with, any termination of such Named Executive Officer’s employment with the Company. The Company entered into employment agreements with Ms. Luther in January 2019, with Mr. Desale in September 2023, Mr. Elashmawi in September 2018 and Mr. Nelson in January 2019, in connection with hiring each of them or their continuing employment. Each of these agreements was amended in 2020, except for Mr. Desale who entered into the form of agreement that was amended in 2020. Under the terms of each of these employment agreements, in the event of an Involuntary Termination (which is defined as termination of the applicable Named Executive Officer’s employment by the Company without Cause (as defined in the agreement) or by the Named Executive Officer for Good Reason (as defined in the agreement)), the Named Executive Officer will receive the following severance payments and benefits:
Potential Payments upon Termination or Change-in-Control
| § a lump sum payment equal to the Named Executive Officer’s then base salary, plus the Named Executive Officer’s then target bonus amount (adjusted pro rata on a monthly basis depending upon the month in which the Involuntary Termination occurs and for the amount estimated by the Company’s finance group to be the anticipated bonus plan payment percentage based on the performance of the Company anticipated for the applicable fiscal year); and |
Potential Payments upon Termination or Change-in-Control
| § if the Named Executive Officer elects to continue health insurance coverage under COBRA, reimbursement of the monthly COBRA premium for the Named Executive Officer and his or her eligible covered dependents until the earliest of 12 months after the termination date, the date he or she commences receiving substantially equivalent coverage in connection with new employment or the date he or she is no longer entitled to continuation coverage under the Company’s group health plan. |
Potential Payments upon Termination or Change-in-Control
If the Involuntary Termination occurs in connection with a change in control (which includes an Involuntary Termination that occurs during the period beginning immediately prior to the change in control and ending 24 months following the change in control), then the Named Executive Officer will fully vest in all his or her outstanding equity awards that vest solely based on continued service (including any equity awards after giving effect to the treatment of equity awards in the event of a change in control described below), and the amount of the lump sum cash severance payment described in the first bullet above will be increased to his or her base salary, plus 100% of his or her then target bonus amount (without any pro rationing or other adjustment). In order to receive the severance payments and benefits described above, the Named Executive Officer is required to timely sign and not revoke a separation agreement and release of claims and to continue to comply with the post-employment non-solicitation and non-disparagement covenants in the agreement. In the event the severance payments or benefits under the agreement, and any other payments or benefits, to be provided to the Named Executive Officer are subject to the excise tax imposed by Section 4999 of the Internal Revenue Code as a result of such payments or benefits being classified as “parachute payments” under Section 280G of the Internal Revenue Code, such payments and benefits will either be paid in full or reduced to a lesser that would result in no portion of such payments and benefits being subject to the excise tax, whichever would entitle the Named Executive Officer to receive the greatest after-tax amount. In the event of a change in control, the Named Executive Officer’s equity awards that vest based on performance will vest based on the terms of such awards, provided that if no treatment has been set forth in such award then for purposes of determining performance under any relative TSR awards outstanding on or granted after the effective date of the agreement, then (i) the ending average stock price will be determined as the price per share paid for the Company’s stock in the change in control and the peer group ending average stock price will be determined based on the average closing stock prices for the component members of the peer group for the 30-trading days ending prior to the date of the change in control, (ii) for purposes of any tranche where the determination period has not commenced as of the date of the public announcement of the proposed change in control, the Company stock price for the initial date of such determination period will be deemed to be the price of the Company’s stock as of the date of the original performance grant, and (iii) this calculation will be applied to any tranches of the relative TSR awards that were eligible to vest for measurement periods ending on or after the date of the change in control and those tranches will be converted to restricted stock units and will vest on the originally scheduled measurement dates, subject to the Named Executive Officer remaining a service provider to the Company or its successor through such dates and such awards being afforded the same protection under the agreement as equity awards that vest solely based on service. For purposes of the employment agreements with Ms. Luther, Mr. Desale, Mr. Elashmawi and Mr. Nelson, “Cause” means (i) the applicable Named Executive Officer’s material breach of the agreement that is not corrected within a 30-day correction period that begins upon delivery to the Named Executive Officer of a written demand from the Company that describes the basis for the Company’s belief that the Named Executive Officer has materially breached the agreement; (ii) any refusal to comply with the reasonable and lawful instructions of the board of directors; (iii) any willful act of fraud or dishonesty that causes material damage to the Company; (iv) any willful violation of the Company’s insider trading policy; (v) any willful violation of the Company’s conflict of interest policies; (vi) any willful unauthorized use or disclosure of trade secrets or other confidential information; or (vii) the Named Executive Officer’s conviction of a felony. For purposes of the employment agreements with Ms. Luther, Mr. Desale, Mr. Elashmawi and Mr. Nelson, “Good Reason” means the occurrence of any of the following, without the applicable Named Executive Officer’s express written consent: (i) a material diminution of the Named Executive Officer’s duties or responsibilities; (ii) a material diminution of the Named Executive Officer’s base salary or target bonus amount that also is applied to substantially all other executive officers of the Company on the approval of the board of directors if the Named Executive Officer’s reduction is substantially proportionate to, or no greater than (on a percentage basis), the reduction applied to substantially all other executive officers; (iii) the Company’s material breach of the agreement; or (iv) the Company requiring the Named Executive Officer to relocate his or her primary place of employment to a facility or location that is more than 30 miles from his or her principal place of employment as of the effective date of the agreement; provided, however, that the Named Executive Officer will only have Good Reason if (i) he or she notifies the board of directors in writing of the existence of the condition which he or she believes constitutes Good Reason within 90 days of the initial existence of such condition (which notice specifically identifies such condition), (ii) the Company fails to remedy such condition within 30 days after the date on which the board of directors receives such notice, and (iii) his or her resignation is effective within 30 days after the expiration of such 30-day remedial period. Equity Award Agreements The award agreements governing the relative TSR PRSU awards granted to our Named Executive Officers each provide that in the event of a change in control that occurs before the end of the performance period, then (i) the performance period will be shortened so that it ends on the date of the change in control, with the ending stock price for purposes of determining the Company’s TSR equal to the price per share paid for the Company’s stock in the change in control and the ending stock price for purposes of determining the TSR of each member of the peer group equal to the average closing stock prices for such company’s stock for the 30-calendar days on the date of the change in control, and (ii) the number of PRSUs that become eligible to vest based on the relative TSR for such adjusted performance period will vest on the last day of the originally scheduled performance period, subject to the applicable Named Executive Officer remaining a service provider to the Company or its successor. The award agreements governing the Revenue Growth PRSUs granted to our Named Executive Officers each provide that in the event of a change in control that occurs before the end of the performance period, then the number of PRSUs that become eligible to vest will be equal to the target number of PRSUs, and such PRSUs will vest on the originally scheduled measurement dates, subject to the applicable Named Executive Officer remaining a service provider to the Company or its successor. The following table provides information regarding the amounts that would have been owed to our Named Executive Officers who were employed by the Company at fiscal year-end if (i) their employment with the Company had been terminated or (ii) a change in control occurred, in each case as of the last day of our fiscal year ended December 30, 2023.
Potential Payments upon Termination or Change-in-Control
| Name | Basis of Payment | Cash Severance ($) | Continuation of Insurance Benefit ($) | Vesting of Equity Awards ($)(1) | Total ($) | | James R. Anderson, President & CEO | Involuntary Termination Not in Connection With a Change in Control | 1,595,000 | 32,493 | 10,277,920(2) | 11,905,413 | | | Involuntary Termination in Connection With a Change in Control | 3,190,000 | 32,493 | 26,217,748(2) | 29,440,242 | | Sherri Luther, SVP, CFO | Involuntary Termination Not in Connection With a Change in Control | 761,600 | 32,493 | —(2) | 794,093 | | | Involuntary Termination in Connection With a Change in Control | 761,600 | 32,493 | 7,929,439(2) | 8,723,532 | | Pravin Desale, SVP, R&D | Involuntary Termination Not in Connection With a Change in Control | 700,000 | 32,493 | —(2) | 732,493 | | | Involuntary Termination in Connection With a Change in Control | 700,000 | 32,493 | 3,540,566(2) | 4,273,060 | | Esam Elashmawi, SVP, Chief Strategy and Marketing Officer | Involuntary Termination Not in Connection With a Change in Control | 735,000 | — | —(2) | 735,000 | | | Involuntary Termination in Connection With a Change in Control | 735,000 | — | 6,848,279(2) | 7,583,279 |
Potential Payments upon Termination or Change-in-Control
| Name | Basis of Payment | Cash Severance ($) | Continuation of Insurance Benefit ($) | Vesting of Equity Awards ($)(1) | Total ($) | | Mark Nelson, SVP, Worldwide Sales | Involuntary Termination Not in Connection With a Change in Control | 791,175 | 28,480 | —(2) | 819,655 | | | Involuntary Termination in Connection With a Change in Control | 791,175 | 28,480 | 6,529,329(2) | 7,348,983 |
Potential Payments upon Termination or Change-in-Control
| (1) The value of each Named Executive Officer’s equity award vesting acceleration benefit in connection with a qualifying termination of the Named Executive Officer’s employment or the Named Executive Officer’s performance-based awards becoming subject only to time-based vesting upon a change in control, as applicable, is calculated as the number of shares covered by the portions of the Named Executive Officer’s equity awards that are subject to such acceleration or that are eligible to vest following such change in control, as applicable, multiplied by the closing price of our common stock on December 29, 2023 (the last trading day in fiscal 2023), which was $68.99 per share. |
Potential Payments upon Termination or Change-in-Control
| (2) Represents the value of the accelerated vesting of certain of each Named Executive Officer’s outstanding equity awards upon a qualifying termination of the Named Executive Officer’s employment as described above under the sections titled “Potential Payments upon Termination or Change-in-Control – Employment Agreement with James R. Anderson” and “Potential Payments upon Termination or Change-in-Control – Employment Agreement with Other Named Executive Officers”. |
Potential Payments upon Termination or Change-in-Control
| (3) Represents value of certain of each Named Executive Officer’s outstanding performance-based equity awards becoming subject only to time-based vesting upon a change in control as described above under the sections titled “Potential Payments upon Termination or Change-in-Control – Employment Agreement with James R. Anderson”, “Potential Payments upon Termination or Change-in-Control – Employment Agreement with Other Named Executive Officers”, and “Potential Payments upon Termination or Change-in-Control – Equity Award Agreements”. |
CHIEF EXECUTIVE OFFICER PAY RATIO
CHIEF EXECUTIVE OFFICER PAY RATIO As required by the Dodd-Frank Act, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. James R. Anderson, our CEO.
CHIEF EXECUTIVE OFFICER PAY RATIO
| ◾ | We believe that there have not been any changes to our employee population or employee compensation arrangements that would result in a significant change to our pay ratio disclosure. Therefore, we used the same median employee to calculate the CEO pay ratio in fiscal 2023 that we had used to calculate the CEO pay ratio in fiscal 2022. |
CHIEF EXECUTIVE OFFICER PAY RATIO
| ◾ | We identified and calculated the elements of the annual total compensation of the median employee for fiscal 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $94,653. |
CHIEF EXECUTIVE OFFICER PAY RATIO
| ◾ | We used the amount reported in the Total column of our 2023 Summary Compensation Table included in this Proxy Statement for the annual total compensation of our CEO. |
CHIEF EXECUTIVE OFFICER PAY RATIO
For fiscal 2023, our last completed fiscal year:
CHIEF EXECUTIVE OFFICER PAY RATIO
| ◾ | The median of the annual total compensation of all employees of our company (other than our CEO), was $94,653. |
CHIEF EXECUTIVE OFFICER PAY RATIO
| ◾ | The annualized annual total compensation of our CEO was $14,380,598. |
PAY VERSUS PERFORMANCE DISCLOSURE
PAY VERSUS PERFORMANCE DISCLOSURE In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and other named executive Officers (“Non-PEO NEOs”) and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.
PAY VERSUS PERFORMANCE DISCLOSURE
| Year | Summary Compensation Table Total for James R. Anderson (1) ($) | Compensation Actually Paid to James R. Anderson (1)(2)(3) ($) | Average Summary Compensation Table Total for Non-PEO NEOs (1) ($) | Average Compensation Actually Paid to Non-PEO NEOs (1)(2)(3) ($) | Value of Initial Fixed $100 Investment based on: (4) | | Net Income ($ Millions) | TSR Percentile Rank Relative to the Russell 3000 Index (5) | | | | | | | TSR ($) | Peer Group TSR ($) | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | 14,379,579 | 22,039,109 | 4,523,440 | 5,492,714 | 358.76 | 237.57 | 259.1 | 43 rd percentile | | 2022 | 11,653,423 | 8,548,319 | 3,395,414 | (392,017) | 337.39 | 142.26 | 178.9 | 59 th percentile | | 2021 | 18,387,422 | 70,640,501 | 4,764,499 | 15,839,660 | 400.73 | 218.45 | 95.9 | 89 th percentile | | 2020 | 7,226,551 | 49,899,940 | 2,356,257 | 15,086,398 | 238.27 | 152.93 | 47.4 | 93 rd percentile |
PAY VERSUS PERFORMANCE DISCLOSURE
| (1) James R. Anderson was our PEO for each year presented. The individuals comprising the Non-PEO NEOs for each year presented are listed below. |
PAY VERSUS PERFORMANCE DISCLOSURE
| 2020 | 2021 | 2022 | 2023 | | Sherri Luther | Sherri Luther | Sherri Luther | Sherri Luther | | Esam Elashmawi | Esam Elashmawi | Esam Elashmawi | Esam Elashmawi | | Stephen Douglass | Stephen Douglass | Stephen Douglass | Pravin Desale | | Mark Nelson | Mark Nelson | Mark Nelson | Mark Nelson |
PAY VERSUS PERFORMANCE DISCLOSURE
| (2) The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. |
PAY VERSUS PERFORMANCE DISCLOSURE
| (3) Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards column are the totals from the Stock Awards column set forth in the Sum ma ry Compensation Table. |
PAY VERSUS PERFORMANCE DISCLOSURE
| Year | Summary Compensation Table Total for James R. Anderson ($) | Exclusion of Stock Awards for James R. Anderson ($) | Inclusion of Equity Values for James R. Anderson ($) | Compensation Actually Paid to James R. Anderson ($) | | 2023 | 14,379,579 | (12,897,726) | 20,557,256 | 22,039,109 |
PAY VERSUS PERFORMANCE DISCLOSURE
| Year | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Exclusion of Stock Awards for Non-PEO NEOs ($) | Average Inclusion of Equity Values for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2023 | 4,523,440 | (3,919,852) | 4,889,126 | 5,492,714 |
PAY VERSUS PERFORMANCE DISCLOSURE
The amounts in the Inclusion of Equity Values in the tables above are derived f rom the amounts set forth in the following tables:
PAY VERSUS PERFORMANCE DISCLOSURE
| Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for James R. Anderson ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for James R. Anderson ($) | Vesting- Date Fair Value of Equity Awards Granted During Year that Vested During Year for James R. Anderson ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for James R. Anderson ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for James R. Anderson ($) | Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for James R. Anderson ($) | Total - Inclusion of Equity Values for James R. Anderson ($) | | 2023 | 8,765,606 | 5,840,624 | — | 5,951,026 | — | — | 20,557,256 |
PAY VERSUS PERFORMANCE DISCLOSURE
| Year | Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) | Average Vesting- Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) | Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($) | Average Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Non-PEO NEOs ($) | Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | | 2023 | 2,553,868 | 1,118,747 | — | 1,216,511 | — | — | 4,889,126 |
PAY VERSUS PERFORMANCE DISCLOSURE
| (4) The Peer Group TSR set forth in this table utilizes the Philadelphia Semiconductor Index (“PHLX Semiconductor Index”), which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2023. The comparison assumes $100 was invested for the period starting December 28, 2019, through the end of the listed year in the Company and in the PHLX Semiconductor, respectively. Historical stock performance is not necessarily indicative of future stock performance. |
PAY VERSUS PERFORMANCE DISCLOSURE
| (5) We determined TSR Percentile Rank relative to the Russell 3000 Index to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2023. We present one-year percentile ranks in this table. This performance measure may not have been the most important financial performance measure for years 2022, 2021, and 2020 and we may determine a different financial performance measure to be the most important financial performance measure in future years. |
PAY VERSUS PERFORMANCE DISCLOSURE
NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”) and Peer Group TSR The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and the Company’s cumulative TSR for the fiscal years indicated, and the PHLX Semiconductor Index TSR over the same period. NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our net income during the four most recently completed fiscal years. NEO Compensation Actually Paid and Company -Selected Measure The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our TSR Percentile Rank Relative to the Russell 3000 Index during the four most recently completed fiscal years. Tabular List of Most Important Financial Performance Measures
PAY VERSUS PERFORMANCE DISCLOSURE
| TSR relative to the Russell 3000 Index Non-GAAP Operating Income Revenue |