DEF 14A of InterDigital, Inc.
Filed Apr 23, 2024 · FY20230001193125-24-107018
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
2023 Director Compensation Table
2023 Director Compensation Table The following table sets forth the compensation paid to each person who served as a director of the company in 2023 for their service in 2023. Directors who also serve as employees of the company do not receive any additional compensation for their services as a director. For Mr. Chen’s 2023 compensation, see “Executive Compensation – Summary Compensation Table.”
2023 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) | | Derek K. Aberle | 87,393 | 187,500 | 274,893 | | Samir Armaly | 48,622 | 337,500 | 386,122 | | Joan H. Gillman | 92,833 | 187,500 | 280,333 | | S. Douglas Hutcheson | 149,167 | 187,500 | 336,667 | | John A. Kritzmacher | 103,333 | 187,500 | 290,833 | | Pierre-Yves Lesaicherre | 85,333 | 187,500 | 272,833 | | John D. Markley, Jr. | 90,833 | 187,500 | 278,333 | | Jean F. Rankin | 93,333 | 187,500 | 280,833 |
2023 Director Compensation Table
| (1) Amounts reported represent the aggregate annual Board, Chairman of the Board, committee chair and committee membership retainers earned by each non-employee director for their service in 2023, plus fees earned for attendance at additional meetings during the Board term, if any, as described above. |
2023 Director Compensation Table
| (2) Amounts shown reflect the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 for RSU awards granted pursuant to our compensation program for non-management directors in 2023. The assumptions used in valuing these RSU awards are incorporated by reference to Notes 2 and 13 to our audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2023. The following table sets forth the grant date fair value of each RSU award granted to our non-employee directors in 2023. |
2023 Director Compensation Table
| Name | Grant Date | Number of Restricted Stock Units (a) | Grant Date Fair Value of Stock Awards ($) | | Derek K. Aberle | 6/7/2023 | 2,162 | 187,500 | | Samir Armaly | 6/7/2023 | 2,162 | 187,500 | | | 6/7/2023 | 1,730 | 150,000 | | Joan H. Gillman | 6/7/2023 | 2,162 | 187,500 | | S. Douglas Hutcheson | 6/7/2023 | 2,162 | 187,500 | | John A. Kritzmacher | 6/7/2023 | 2,162 | 187,500 | | Pierre-Yves Lesaicherre | 6/7/2023 | 2,162 | 187,500 | | John D. Markley, Jr. | 6/7/2023 | 2,162 | 187,500 | | Jean F. Rankin | 6/7/2023 | 2,162 | 187,500 |
2023 Director Compensation Table
As of December 31, 2023, each person who served as a non-employee director of the company in 2023 had the following aggregate amounts of unvested RSU awards (excluding accrued dividend equivalents) outstanding. None of our non-employee directors had any options outstanding as of December 31, 2023. This table does not include RSUs that, as of December 31, 2023, had vested according to their vesting schedule, but had been deferred.
2023 Director Compensation Table
| Name | Outstanding Restricted Stock Units (#) | | Derek K. Aberle | 2,162 | | Samir Armaly | 3,892 | | Joan H. Gillman | 2,162 | | S. Douglas Hutcheson | 2,162 | | John A. Kritzmacher | 2,162 | | Pierre-Yves Lesaicherre | 2,162 | | John D. Markley, Jr. | 2,162 | | Jean F. Rankin | 2,162 |
Election of Directors
Election of Directors
(Proposal 1)
(Proposal 1)
Description
Description
Which directors are nominated for election?
Which directors are nominated for election? Mses. Joan H. Gillman and Jean F. Rankin, Messrs. Samir Armaly, Derek K. Aberle, Liren Chen, S. Douglas Hutcheson, John A. Kritzmacher and John D. Markley, Jr. and Dr. Pierre-Yves Lesaicherre are recommended by the Nominating and Corporate Governance Committee and nominated by the Board for election at the 2024 annual meeting, each to serve a one-year term until our annual meeting in 2025 and until his or her successor is elected and qualified. Set forth below is biographical information about the nine nominees and other information about their skills and qualifications that contribute to the effectiveness of the Board. All of the nominees’ current terms of office expire at the 2024 annual meeting.
What are their backgrounds?
What are their backgrounds? Derek Aberle, 54, has been a director of the company since September 2022. Mr. Aberle is Co-founder and Executive Vice Chairman of Virewirx, Inc. (formerly XCOM Labs), a company focused on developing and commercializing advanced wireless and XR technologies. Prior to that, from 2000 through 2018, Mr. Aberle served in various senior executive roles at Qualcomm, including as President of Qualcomm from 2014 through 2018. Beginning in 2008, Mr. Aberle served as a member of Qualcomm’s executive committee, as Executive Vice President and President of Qualcomm Technology Licensing from 2008 through 2011 and as Executive Vice President and Group President from 2011 through 2014 where, among other things, he led Qualcomm’s technology and IP licensing business, helping to significantly grow its global licensing business and negotiating deals with its largest licensees. Mr. Aberle also served as Chief Executive Officer and director of Prospector Capital Corp., a special purpose acquisition company, from its inception in 2020 through 2023. Prior to Qualcomm, Mr. Aberle was an attorney with the international law firms Pillsbury Winthrop and Heller Ehrman. Mr. Aberle also serves on the boards of directors of Virewirx, LeddarTech (LDTC) and EvoNexus. The Board has concluded that Mr. Aberle should serve as a director of the company because of his years of experience in patent licensing and his global business acumen and leadership. Samir Armaly, 51, is currently a director and advisor to various technology companies. Mr. Armaly served as President, IP of Adeia, Inc., a leading IP licensing business, from June 2020 to March 2022. From 2017 to 2020, he was a Strategic IP Advisor to the CEO and Board of Directors of TiVo Corporation. From 2001 to 2017, Mr. Armaly held various senior management positions and ran the video IP licensing business of Gemstar – TV Guide and its successor, Rovi Corporation. Previously, Mr. Armaly was an IP attorney in private practice representing media and technology companies. He graduated from the University of Missouri Columbia with a B.S. degree in Mechanical Engineering and received his J.D. degree from the University of California Berkeley. The Board has concluded that Mr. Armaly should serve as a director of the company because he is a recognized IP expert, having run one of the world’s largest patent licensing businesses, and has particular expertise in the media and technology markets. Lawrence (Liren) Chen, 53, has been a director of the company since April 2021, when he was also appointed as our President and Chief Executive Officer. Mr. Chen joined InterDigital from Qualcomm where he served since August 2019 as Senior Vice President, Global Head of IP, Legal Counsel. In that role, Mr. Chen was responsible for overseeing Qualcomm’s world-wide intellectual property portfolio (patent, copyright, trademark and open source) and led technology, business strategy, product management and global eco-system development for Qualcomm Technology Licensing. In the 23 years preceding that, Mr. Chen served in various IP and technology roles at Qualcomm, including as Senior Vice President of Engineering, Legal Counsel. He holds 28 granted patents in the U.S. and over 120 granted patents worldwide. Mr. Chen earned his bachelor’s degree in Automation from Tsinghua University, Beijing; his M.S.E.E. from the University of Maine; his M.B.A. from San Diego State University; and his J.D. degree from the University of San Diego. Joan H. Gillman, 60, has been a director of the company since April 2017. From 2006 to 2016, Ms. Gillman served as Executive Vice President of Time Warner Cable, Inc. (“Time Warner Cable”), as well as Chief Operating Officer of Time Warner Cable Media and President of Time Warner Cable Media, LLC. Ms. Gillman joined Time Warner Cable as Vice President of Interactive TV and Advanced Advertising in 2005. Prior to Time Warner Cable, among other roles, she served as the President of Static2358, the interactive TV, games and production subsidiary of OpenTV, and as Director, Business Development, of British Interactive Broadcasting, the digital and interactive TV joint venture between BSkyB, BT, HSBC and Matsushita. Ms. Gillman began her career working in public affairs, serving in various roles for a U.S. Senator, including as Legislative Director and State Director. From October 2016 to February 2021, Ms. Gillman was a member of the board of directors of Centrica plc, an international energy and services company based in the United Kingdom where she served on the safety, health, environment, security, remunerations and ethics and nominating committees. In addition, since November 2016, she has served on the board of directors of Airgain, Inc., a leading provider of embedded antenna technologies used to enable high performance wireless networking, and she is currently a member of such board’s audit committee, and chairs the nominating and corporate governance committee, as well as the board of directors of Cumulus Media, which she joined in June 2018 and where she is a member of the compensation and nominating committees. Since May 2018, she has also chaired the Jesuit Volunteer Corps and is the Foundation Manager and Trustee of the David T. Langrock Foundation. The Board has concluded that Ms. Gillman should serve as a director of the company because her more than 20 years of executive experience in the media and communications industries and her knowledge of content development and distribution as well as key areas like partnership, mergers and acquisitions and marketing make her a valuable resource and strengthen the company’s knowledge of the companies and industries shaping its existing and future markets. S. Douglas Hutcheson, 68, has been a director of the company since July 2014, and he assumed the role of Chairman of the Board in June 2015. From 2019 to 2024, Mr. Hutcheson served as the Executive Chairman of Kymeta Corporation, an electronically steerable terminal manufacturer and provider of services for global connectivity. He also served as the co-CEO of Kymeta from 2021 to 2024. Since 2015, Mr. Hutcheson has served as a senior advisor of Technology, Media and Telecom for Searchlight Capital, a global private investment firm. From March 2014 through May 2017, Mr. Hutcheson served as Chief Executive Officer and a director of Laser, Inc., a corporation created in connection with the acquisition of Leap Wireless International, Inc. (“Leap Wireless”), a wireless communications carrier, by AT&T in March 2014. Prior to March 2014, Mr. Hutcheson served as Chief Executive Officer of Leap Wireless and its operating subsidiary, Cricket Communications, for nine years, where he was responsible for developing and implementing strategy, all operations, and the oversight of all relationships and partnerships. Before serving as Chief Executive Officer, Mr. Hutcheson held other executive positions at Leap Wireless, including President and Chief Financial Officer. Prior to joining Leap Wireless, he was Vice President of Marketing in the wireless infrastructure division at Qualcomm for three years, where he led multiple teams. He previously served on the boards of directors of Leap Wireless from 2005 to 2014 and Pitney Bowes from 2012 to 2023. The Board has concluded that Mr. Hutcheson should serve as a director of the company because, with his significant operational and financial expertise as an experienced former chief executive officer of a wireless communications company and his broad business background, which includes strategic planning and product and business development and marketing, he brings valuable insight that is needed to evolve and execute the company’s strategy. He also qualifies as an audit committee financial expert.
What are their backgrounds?
John A. Kritzmacher, 63, has been a director of the company since June 2009. From 2013 to 2021, Mr. Kritzmacher served as Executive Vice President and Chief Financial Officer of John Wiley & Sons, Inc., a global provider of research communications and education services. From October 2012 through February 2013, Mr. Kritzmacher served as Senior Vice President Business Operations and Organizational Planning at WebMD Health Corp., a leading provider of health information services, where Mr. Kritzmacher was responsible for leading a major restructuring initiative. Previously, Mr. Kritzmacher served as Executive Vice President and Chief Financial Officer of Global Crossing Limited, a global provider of IP-based telecommunications solutions, from October 2008 to October 2011, when Global Crossing was acquired by Level 3 Communications, Inc. Prior to that, Mr. Kritzmacher rose through a variety of positions with increasing responsibility, including Senior Vice President and Corporate Controller, during his 10 years at Lucent Technologies Inc., a provider of telecommunications systems and services, to become Chief Financial Officer in 2006. After playing a leading role in the planning and execution of Lucent’s merger with Alcatel in 2006, Mr. Kritzmacher became Chief Operating Officer of the Services Business Group at Alcatel-Lucent until joining Global Crossing in 2008. Mr. Kritzmacher serves on the board of directors of Unisys and currently serves on the audit & finance and security & risk committees of such board. The Board has concluded that Mr. Kritzmacher should serve as a director of the company because he is a veteran of the telecommunications and high technology industries with extensive operational and leadership experience and financial expertise. As such, Mr. Kritzmacher contributes valuable advice and guidance, especially with respect to complex financial and accounting issues, and qualifies as an audit committee financial expert. Pierre-Yves Lesaicherre, 60, has been a director of the company since June 2021. Since June 2023, Dr. Lesaicherre has been acting as the CEO and executive director of Finwave Semiconductor, Inc. Before that, he was the President, Chief Executive Officer and Director of Nanometrics Incorporated from November 2017 to October 2019. From January 2012 to February 2017, Dr. Lesaicherre was the CEO of Lumileds, an integrated manufacturer of LED components and Automotive Lighting Lamps. Prior to that, he held senior executive positions at NXP Semiconductors, from 2006 to 2012. Before NXP, Dr. Lesaicherre was with Philips Semiconductors. Dr. Lesaicherre holds an MBA with a focus on international business and strategy from INSEAD and has MS and Ph.D. degrees in Material Science from the National Polytechnic Institute of Grenoble. The Board has concluded that Dr. Lesaicherre should serve as a director of the company because of his more than 20 years of experience working in high technology industries, including in France where we have substantial operations. John D. Markley, Jr., 58, has been a director of the company since November 2016. Since 2009, Mr. Markley has served as Managing Partner of Bear Creek Capital Management, an investment firm focused on the cloud computing, mobile and communications infrastructure sectors. In addition, since 2014, he has been a Managing Partner of New Amsterdam Growth Capital, an investor in communications, media and technology companies. From 1996 to 2009, he was a partner with Columbia Capital, a venture capital firm, where he served in a number of capacities including partner, venture partner and portfolio company executive. Prior to Columbia Capital, Mr. Markley served as a policy advisor at the Federal Communications Commission from 1994 to 1996, where he and his team were instrumental in developing and launching the commercial spectrum auction process. Mr. Markley has also been a director of Charter Communications, Inc., since 2009, currently serving as chair of its nominating and corporate governance committee and as a member of its audit committee. He previously served on the boards of directors of Millennial Media, Inc., from 2006 to 2014, and of BroadSoft, Inc., from 2002 until its acquisition by Cisco Systems, Inc. in February 2018. The Board has concluded that Mr. Markley should serve as a director of the company based on his private equity and operating experience and his extensive experience with communications, media and technology companies, which allow him to contribute guidance and advice relating to the development and execution of the company’s strategy and analysis of potential business opportunities. He also qualifies as an audit committee financial expert. Jean F. Rankin, 65, has been a director of the company since June 2010. Ms. Rankin served as Executive Vice President, General Counsel and Secretary at LSI Corporation, a leading provider of innovative silicon, systems and software technologies for the global storage and networking markets, from 2007 to May 2014, when LSI was acquired by Avago Technologies Limited. In this role, she served LSI and its board of directors as Corporate Secretary, in addition to managing the company’s legal, intellectual property licensing and stock administration organizations. Ms. Rankin joined LSI in 2007 as part of the merger with Agere Systems Inc., where she served as Executive Vice President, General Counsel and Secretary from 2000 to 2007. Prior to joining Agere in 2000, Ms. Rankin was responsible for corporate governance and corporate center legal support at Lucent, including mergers and acquisitions, securities laws, labor and employment, public relations, ERISA, investor relations and treasury. She also supervised legal support for Lucent’s microelectronics business. The Board has concluded that Ms. Rankin should serve as a director of the company because she has extensive experience and expertise in matters involving intellectual property licensing, the company’s core business, and her current and former roles as chief legal officer and corporate secretary at other publicly traded companies enable her to contribute legal expertise and advice as to best practices in corporate governance.
Executive Summary
| • | Emphasized Corporate Performance in Short Term Incentive Program (“STIP”). The 2023 STIP was designed such that baseline funding is based entirely on corporate performance, with individual performance then used as a bonus modifier. These changes were implemented in response to shareholder feedback. |
Executive Summary
| • | Paid STIP awards consistent with performance results. Our short-term incentives were paid according to the STIP’s formulaic funding, with no discretionary adjustment. Please see “2023 Executive Compensation in Detail – Short-Term Incentive Plan” below for details. |
Executive Summary
| • | Tied the majority of annual target compensation to long-term shareholder value creation. Approximately 88% of target annual CEO compensation and, on average, 79% of target annual compensation for our other NEOs, was performance-based delivered as a combination of goal-driven annual cash incentives and equity. |
Executive Summary
| • | Provided a majority of our executives’ long-term incentives in performance-based equity. Two-thirds of our CEO’s 2023 equity compensation was in the form of performance-based RSUs and performance-based options. The weighting of our 2023 performance-based equity awards for our other NEOs was increased to 50% in response to shareholder feedback. Please see “2023 Executive Compensation in Detail – Long-Term Compensation Program” below for details. |
Executive Summary
| • | Determined payout results for 2019 and 2021 Long-Term Performance Grants under the Long-Term Compensation Plan (“LTCP”). Achievement of the performance-based RSUs granted under the 2019 LTCP and the performance-based RSUs and options granted under the 2021 LTCP were earned and vested based each plan’s formulaic funding. |
What Guides Our Program
| • | attract talented leaders to serve as executives by setting total compensation levels and incentive program targets at competitive levels for comparable roles in the marketplace; |
What Guides Our Program
| • | retain our executives by providing a balanced mix of base salary and short and long-term incentive compensation; |
What Guides Our Program
| • | align the interests of executives and shareholders by rewarding our executives for increasing our stock price over the long term and maximizing shareholder value with a substantial portion of total compensation in the form of direct ownership in our company through long-term equity awards and meaningful ownership guidelines. |
What Guides Our Program
The Decision-Making Process Role of the Human Capital Committee. The Human Capital Committee oversees our executive compensation program and has final approval with respect to the composition, structure and amount of all executive officer compensation, subject to Board review. The Human Capital Committee is comprised of at least three independent members of the Board. Guided in the execution of its primary functions by the Board’s philosophy that the interests of key leadership should be aligned with the long-term interests of the company and its shareholders, the Human Capital Committee annually reviews and approves goals relevant to the performance-based incentive compensation of the Chief Executive Officer and other executive officers. The Human Capital Committee works very closely with management and the Human Capital Committee’s independent consultant to examine the effectiveness of the company’s executive compensation program throughout the year. Details of the Human Capital Committee’s authority and responsibilities are discussed above under “Board Structure and Committee Membership—Human Capital Committee” and are specified in the Human Capital Committee’s charter, which is available on our website at on the Investors section of our website at http://ir.interdigital.com under the heading “Governance—Committee Charters”. Role of Executives. As part of the annual performance and compensation review for executives other than the Chief Executive Officer, the Human Capital Committee considers the Chief Executive Officer’s assessment of the other executives’ departmental and individual performances, reviewing major individual accomplishments and any other recommendations of the Chief Executive Officer regarding their compensation. The Chief Executive Officer also reports to the Human Capital Committee on the company’s achievement of objectively measurable goals established under performance-based incentive programs, based upon data provided by management. Role and Independence of Advisors. The Human Capital Committee has authority to retain independent consultants and other experts to assist in carrying out its responsibilities. The Human Capital Committee selects the consultant, negotiates the fees paid and manages the engagement. For 2023 and previous years, the Human Capital Committee engaged Pearl Meyer, a national executive compensation consulting firm, to advise it and the rest of the Board on matters including, but not limited to, trends in executive compensation, compensation peer group composition, assessing total direct compensation of the executives as compared to the compensation peer group, and short and long-term incentive plan design and compensation of the company’s executive officers. Based on consideration of the factors as set forth in applicable SEC rules and listing standards of the Nasdaq Stock Market, the Human Capital Committee has determined that Pearl Meyer has no conflicts of interest in providing its services. In December 2023, the Human Capital Committee ended its engagement with Pearl Meyer and engaged FW Cook, a national compensation consulting firm, as its new compensation consultant. Similarly, as part of the engagement process with FW Cook, the Human Capital Committee determined that FW Cook has no conflicts of interest in providing its services. Factors Considered in Setting Compensation Amounts and Targets. In establishing compensation amounts and incentive program targets for executives, the Human Capital Committee seeks to provide compensation that is competitive in light of current market conditions and industry practices. Accordingly, the Human Capital Committee annually reviews market data that is comprised of proxy-disclosed data from peer companies and information from nationally recognized published surveys for high-technology companies, adjusted for size. Consistent with its review practices, in the fall of 2022, Pearl Meyer assisted the Human Capital Committee with its process of identifying peer group companies for 2023 compensation purposes. When choosing compensation peers, we not only look for companies with similar revenue in the communications equipment industry, but also companies for which licensing revenue is a significant component of their total revenue stream (approximately 20% to 100% of total revenue) and that have a relatively similar profit margin and market capitalization. We removed Inolavan Holdings, Inc. because it was acquired and taken private in 2021. No additional companies were added. The companies comprising the 2023 compensation peer group were as follows:
2023 Executive Compensation in Detail
Short-Term Incentive Plan The STIP annual incentive award is designed to provide a cash reward for the achievement of corporate goals and individual accomplishments during each fiscal year. Individual STIP payouts are determined based on performance against pre-determined strategic corporate goals and individual performance. In 2023, the Human Capital Committee increased the CEO’s target bonus from 100% to 105% of base salary to better align with trends in the market. No other changes were made to the target STIP levels. Bonuses are capped at 200% of target for each executive.
2023 Executive Compensation in Detail
| NEO | 2022 Target STIP Level (% of Base Salary) | 2023 Target STIP Level (% of Base Salary) | | Liren Chen | 100% | 105% | | Richard J. Brezski | 75% | 75% | | Eeva K. Hakoranta | 75% | 75% | | Rajesh Pankaj | 75% | 75% | | Joshua D. Schmidt | NA | 60% | | Eric Cohen(1) | 75% | 75% |
2023 Executive Compensation in Detail
| (1) Mr. Cohen was not eligible to receive 2023 STIP because he was no longer employed at the time of payout. |
2023 Executive Compensation in Detail
| Performance Measure (relative weight) | Description | Goal/Objectives | Determination of Payout Level | | Total Revenue (60%) | Achieve specified amount of recognized revenue as reported in our financial statements* *excludes revenue recognized related to Samsung arbitration | Target is estimated recognized revenue as reported in 2023 financial statements Threshold = $360M Target = $460M | Minimum threshold set, below which would yield 0% achievement; threshold achievement yields 50% of target Each $1 million above threshold equals 0.5% achievement up to target; each $1 million achievement above target equals 1% achievement above target | | Innovation (30%) | Patent filings | Patent filings – meet or exceed specified number of first patent filings Target = 640 first patent filings | Achievement based on % of target filings | | Evolution (10%) | Execute Human Capital initiatives | Execute Human Capital initiatives with focus on Diversity, Equity and Inclusion | Bonus element pays out if specific, pre-defined strategic accomplishments were achieved |
2023 Executive Compensation in Detail
| Corporate Strategic Performance Goals: Outcomes | | | | | | | Goal (Target metric weight) | Threshold Payout | Target Payout | Maximum Payout* | Achievement | Component Payout | | Total Revenue (1) (60%) *excludes revenue recognized related to Samsung arbitration | $360M 30% | $460M 60% | | Total Revenue of $471M Each $1M above $460M is 1% achievement (achieved 111% of target) | 67% | | Innovation (30%) | 0% | 30% | | Patent filings (achieved 191% of target) | 57% | | Evolution (10%) | 0% | 10% | | Developed and launch Human Capital Initiatives (100% achievement) | 10% | | | | | | | 134% | | Overall Corporate Achievement | 30%(2) | 100% | Capped at 200% | 134% | |
2023 Executive Compensation in Detail
| (1) Although no individual goal achievement is capped, the overall STIP payout is capped at 200%. |
2023 Executive Compensation in Detail
| NEO | 2023 Base Salary ($) | Target as percentage of base salary | Target bonus ($) | Corporate Achievement | Personal Performance | Overall achievement as % of target | Actual Bonus ($) | | Liren Chen | 710,000 | 105% | 745,500 | 134% | 100% | 134% | 998,970 | | Richard J. Brezski | 440,000 | 75% | 330,000 | 134% | 100% | 134% | 442,200 | | Eeva K. Hakoranta(1) | 455,000 | 75% | 341,000 | 134% | 100% | 134% | 457,000 | | Rajesh Pankaj | 490,000 | 75% | 367,500 | 134% | 100% | 134% | 492,450 | | Joshua D. Schmidt | 400,000 | 60% | 240,000 | 134% | 100% | 134% | 321,600 |
2023 Executive Compensation in Detail
| Equity Vehicle | What it Does | Vesting Requirements | | Performance-based RSUs | Aligns NEO and shareholder interests by tying value to both business results and future stock price. | Achievement of specified performance goals is required for vesting. For performance that falls below threshold achievement, no equity vests; vesting is generally capped at 200% of target. Performance-based options’ exercise term is 10 years. | | Performance-based stock options | Rewards for stock price appreciation and achievement of underlying goals. | | | Time-based RSUs | Focuses our executives on long-term share ownership and sustained value. | Three-year ratable vesting of shares. |
2023 Executive Compensation in Detail
2023 LTCP Grant The Human Capital Committee determines annually the participation level and components of each executive officer’s LTCP award, considering market data and internal pay equity between the company’s NEOs and other executives to motivate and incentivize performance across the senior management team and encourage collaboration and shared responsibility for executing the company’s strategic plan. In response to shareholder feedback, for 2023, the mix between time-based RSUs and performance-based RSUs for the company’s NEOs and other executives, other than the CEO, was adjusted to 50% performance-based RSUs and 50% time-based RSUs. The Human Capital Committee approved LTCP awards granted on March 31, 2023, comprised of the following equity vehicles:
2023 Executive Compensation in Detail
| NEO | 2023 LTCP Grant: Equity Mix | | | | | Performance-Based RSUs | Performance Based Stock Options | Time-Based RSUs | | Liren Chen | 33% | 34% | 33% | | Richard J. Brezski | 50% | 0% | 50% | | Eeva K. Hakoranta | 50% | 0% | 50% | | Rajesh Pankaj | 50% | 0% | 50% | | Joshua D. Schmidt | 50% | 0% | 50% | | Eric Cohen | 50% | 0% | 50% |
2023 Executive Compensation in Detail
| | Performance-Based RSUs ($) (1) | Performance-Based Stock Options ($) (2) | Time-Based RSUs ($) (1) | Total Value ($) | | Liren Chen | 1,500,000 | 1,500,000 | 1,500,000 | 4,500,000 | | Richard J. Brezski | 750,000 | — | 750,000 | 1,500,000 | | Eeva K. Hakoranta | 750,000 | — | 750,000 | 1,500,000 | | Rajesh Pankaj | 750,000 | — | 750,000 | 1,500,000 | | Joshua D. Schmidt | 500,000 | — | 500,000 | 1,000,000 | | Eric Cohen | 550,000 | — | 550,000 | 1,100,000 |
2023 Executive Compensation in Detail
| (1) Award amounts for performance-based and time-based RSUs were determined based on the closing price of InterDigital’s common stock on the date of grant. |
2023 Executive Compensation in Detail
| | Threshold | Target | Maximum | | Revenue Platform | $400M | $500M | $600M | | Pro forma EBITDA ($150 million threshold) | | | |
2023 Executive Compensation in Detail
2021 LTCP Grant: The 2021 LTCP performance-based awards are earned based upon the achievement of pro forma EBITDA and Consumer Electronics Revenue Platform goals. Sixty percent of the target performance awards were eligible to vest at the end of a three-year performance period (January 1, 2021, through December 31, 2023) based on specified threshold, target, and maximum levels of pro forma EBITDA measured quarterly during years two and three of the performance period, on a trailing four quarter basis. The highest consecutive four quarters determines goal achievement. If the threshold level of achievement is not met, there is no payout. The pro forma EBITDA goal associated with the 2021 LTCP was as follows:
2023 Executive Compensation in Detail
The Chief Executive Officer reported to the Human Capital Committee that the four-quarter period with the highest pro forma EBITDA during the measurement period was Q2 2022 through Q1 2023, in which period pro forma EBITDA was $371.3 million. The Human Capital Committee determined that the company’s goal achievement exceeded the superior performance goal and, as a result, 200% of the performance-based equity allocated to the pro forma EBITDA goal vested in March 2024. Pro forma EBITDA is a non-GAAP financial measure. See Appendix A for an explanation of how this metric is used and a detailed reconciliation to the most directly comparable GAAP measure. The remaining portion of the Performance Awards granted under the 2021 LTCP cycle may vest based on the performance metric of Consumer Electronics Revenue Platform. We structured 40% of the 2021 LTCP as a set of milestones towards achieving our five-year goal for our Consumer Electronics Revenue Platform (such awards, “Milestone Awards”). For each of the four milestones that is achieved, 25% of the executives’ target Milestone Awards will vest. The Milestone Awards may vest at any time during the five-year performance period (January 1, 2021, through December 31, 2025), to the extent that one or more of the milestones are achieved. The Human Capital Committee determined that the second of these milestones was achieved in the third quarter of 2023, resulting in the vesting of 25% of target Milestone Awards in December 2023. CEO New Hire Awards: The Human Capital Committee approved the award of performance-based RSUs and performance-based options (“New Hire Awards”) as part of Mr. Chen’s New Hire equity awards in 2021. The actual number of New Hire Awards that may vest is determined by the achievement of one of more of diversified revenue platform goals. The diversified revenue platform goals measure achievement of specified amounts of revenue platform using forecasted revenue for a twelve month look-forward period. Similar to the 2021 LTCP Milestone Awards, the New Hire Awards may vest at any time through December 31, 2025. The Human Capital Committee determined that the fifth Milestone was achieved in the third quarter of 2023 which drove a 60% payout of Mr. Chen’s New Hire Awards. One additional milestone remains eligible to vest. Total payout on the New Hire Awards cannot exceed 300% of target.
Other Practices, Policies and Guidelines
We follow FASB ASC Topic 718 for our share-based compensation awards. FASB ASC Topic 718 requires companies to measure the compensation expense for all share-based compensation awards made to employees and directors, including stock options and RSUs, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though our NEOs may never realize any value from their awards. FASB ASC Topic 718 also requires companies to recognize the compensation cost of their share-based compensation awards in their income statements over the period that an executive officer is required to render services in exchange for the option or other award.
Summary Compensation Table
Summary Compensation Table The following table contains information concerning compensation awarded to, earned by or paid to our NEOs in the last three years (unless the NEO was not an executive officer of the company during such year). Our NEOs consist of: (i) Liren Chen, our President and CEO; (ii) Richard J. Brezski, our CFO and Treasurer; (iii) Eeva K. Hakoranta, our Chief Licensing Officer; (iv) Rajesh Pankaj, our Chief Technology Officer; (v) Joshua D. Schmidt, our Chief Legal Officer and Corporate Secretary and (vi) Eric Cohen, former Chief Strategy and Growth Officer who ceased to be an executive officer of the company effective July 31, 2023. Additional information regarding the items reflected in each column follows the table.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3)(4) | Option Awards ($)(5) | Non-Equity Incentive Plan Compensation ($)(6) | All Other Compensation ($)(7) | Total ($) | | Liren Chen (8) | 2023 | 706,000 | | 2,250,000 | 750,000 | 998,970 | 68,190 | 4,773,160 | | President and Chief | 2022 | 690,000 | 500,000 | 1,650,025 | 550,000 | 1,380,000 | 54,762 | 4,824,787 | | Executive Officer | 2021 | 504,231 | 1,000,000 | 5,219,984 | — | 948,750 | 3,151,873 | 10,824,836 | | Richard J. Brezski | 2023 | 433,221 | | 1,125,000 | — | 442,200 | 34,604 | 2,035,025 | | Chief Financial Officer | 2022 | 402,500 | | 880,019 | — | 603,750 | 27,117 | 1,913,386 | | and Treasurer | 2021 | 402,500 | | 660,000 | — | 384,891 | 26,121 | 1,473,512 | | Eeva K. Hakoranta (8) | 2023 | 447,385 | | 1,125,000 | — | 457,000 | 1,535 | 2,038,535 | | Chief Licensing Officer | 2022 | 423,852 | | 880,019 | — | 594,564 | 1,535 | 1,864,255 | | | 2021 | 397,025 | | 510,022 | — | 401,525 | 998 | 1,339,547 | | Rajesh Pankaj | 2023 | 490,000 | 466,667 | 1,125,000 | — | 492,450 | 31,055 | 2,605,172 | | Chief Technology Officer | 2022 | 233,692 | 233,333 | 3,660,037 | — | 735,000 | 69,292 | 4,931,354 | | Joshua D. Schmidt | 2023 | 390,961 | | 750,000 | — | 321,600 | 11,177 | 1,473,738 | | Chief Legal Officer and Corporate Secretary | | | | | | | | | | Eric Cohen | 2023 | 307,577 | | 825,000 | — | — | 479,659 | 1,612,236 | | Former Chief Strategy and | 2022 | 408,408 | | 880,019 | — | 612,612 | 30,088 | 1,931,127 | | Growth Officer | 2021 | 401,982 | | 660,006 | — | 390,540 | 28,538 | 1,481,066 |
Summary Compensation Table
| (1) Base salary increases, as applicable, for 2023, 2022, and 2021, became effective on March 1, 2023, March 1, 2022, and April 1, 2021. Amounts reported reflect the value of base salary earned by each NEO during such years. |
Summary Compensation Table
| (2) In connection with his hiring as CEO in April 2021, Mr. Chen received a sign-on cash bonus, the final third was paid in 2022 and in connection with his hiring as CTO in 2022, Mr. Pankaj received the final portions of his sign-on cash bonus in January and July 2023. |
Summary Compensation Table
| (3) Amounts reported reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for time-based RSU awards granted during the designated fiscal year. The assumptions used in valuing these awards are incorporated by reference to Notes 2 and 13 to our audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2023. Under generally accepted accounting principles, compensation expense with respect to stock awards granted to our employees is generally equal to the grant date fair value of the awards and is recognized over the vesting periods applicable to the awards. |
Summary Compensation Table
| (4) Amounts reported also reflect the value at the grant date of performance-based RSUs granted in such years based upon the probable outcome of the performance conditions for such awards, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. The assumptions used in valuing these awards are incorporated by reference to Notes 2 and 13 to our audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2023. |
Summary Compensation Table
On March 31, 2023, the company granted performance-based RSU awards to its NEOs. As of that date, consistent with the estimates determined as of the respective grant dates under FASB ASC Topic 718, the probable outcome of the performance conditions for these grants was estimated at 50% achievement and as a result, the grant date fair value was 50% of target grant value. The following table sets forth the grant date fair value of the performance-based RSUs granted to the NEOs in 2023 assuming that the highest level of performance conditions will be achieved and the grants vest at their maximum level of 200% of target:
Summary Compensation Table
| NEO | Maximum Value Performance-Based RSU Awards 2023 LTCP ($) | | Liren Chen | 3,000,000 | | Richard J. Brezski | 1,500,000 | | Eeva K. Hakoranta | 1,500,000 | | Rajesh Pankaj | 1,500,000 | | Joshua D. Schmidt | 1,000,000 | | Eric Cohen | 1,100,000 |
Summary Compensation Table
| (5) Amounts reported reflect the value recognized for financial reporting purposes in accordance with FASB ASC Topic 718. During 2023, the company granted performance-based options to Mr. Chen, as part of the 2023 LTCP. As of the grant date, consistent with the estimates determined as of the respective grant dates under FASB ASC Topic 718, the probable outcome of the performance conditions for these grants was estimated at 50% achievement, and therefore the grant date fair value was 50% of the target grant value. |
Summary Compensation Table
Assuming that the highest level of performance conditions will be achieved and the grant vests at its maximum level of 200% of target, the grant date fair value of the performance-based stock options granted to Mr. Chen in 2023 would be $3,000,000. The weighted-average assumptions underlying this valuation under the Black-Scholes option pricing model are as follows: expected term of 7.48 years; volatility of 32.80%; a risk-free interest rate of 3.55%; and a dividend yield of 1.92%.
Summary Compensation Table
| (6) Amounts reported include the value of payouts earned under the company’s 2023 STIP. |
Summary Compensation Table
| (7) The following table details each component of the “All Other Compensation” column in the Summary Compensation Table for fiscal year 2023: |
Summary Compensation Table
| NEO | 401(k) Plan Matching Contributions ($)(a) | Supplemental LTD ($)(b) | Deferred Compensation Plan Matching Contributions ($)(c) | Relocation Expense ($)(d) | Severance ($)(e) | PTO Payout ($)(f) | Value Realized on Pro-Rata vesting of RSUs ($) | Total ($) | | Liren Chen | 9,900 | 5,599 | 52,691 | | | | | 68,190 | | Richard J. Brezski | 9,900 | 3,495 | 21,209 | | | | | 34,604 | | Eeva K. Hakoranta | | 1,535 | | | | | | 1,535 | | Rajesh Pankaj | | 6,327 | | 24,728 | | | | 31,055 | | Joshua D. Schmidt | 9,900 | 1,277 | | | | | | 11,177 | | Eric Cohen | 6,848 | 4,590 | | | 111,563 | 54,122 | 302,537 | 479,659 |
Summary Compensation Table
| (a) Amounts represent company matching contributions to all employees, including the NEOs, on 50% of the first 6% of the employee’s eligible salary and annual bonus contributed to the 401(k) Plan, up to the maximum amount permitted by the Internal Revenue Service. |
Summary Compensation Table
| (b) Amounts represent premium amounts paid by the company for supplemental executive long-term disability insurance for the benefit of such NEO. |
Summary Compensation Table
| (c) Amounts represent company matching contributions made pursuant to the company’s nonqualified deferred compensation plan for NEO contributions. For more information, see “Nonqualified Deferred Compensation.” |
Summary Compensation Table
| (d) Amount represents a taxable reimbursement to compensate Mr. Pankaj for expenses related to his relocation from California to Conshohocken, Pennsylvania. Amount includes $6,334 in additional payment for tax assistance, eligible to all InterDigital employees who receive relocation benefits. |
Summary Compensation Table
| (e) Amount represents Severance payments pursuant to the InterDigital Executive Severance and Change in Control Policy. For more information, see “Potential Payments upon Termination or Change in Control.” |
Summary Compensation Table
| (f) Amount represents paid time off accrued but not taken, which, pursuant to company policy applicable to all U.S. employees upon employment termination, was paid to Mr. Cohen. |
Summary Compensation Table
| (8) Ms. Hakoranta receives her salary and other cash compensation in euros. 2023 amounts were converted to USD using an exchange rate of 1.1056. |
Grants of Plan-Based Awards in 2023
Grants of Plan-Based Awards in 2023 The following table summarizes the grants of (i) cash awards under the STIP and (ii) options (OPT), time-based RSU awards (TRSU) and performance-based RSU awards (PSU), each made to the NEOs during the year ended December 31, 2023. Each of these types of awards is discussed in “Compensation Discussion and Analysis” above.
Grants of Plan-Based Awards in 2023
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2)(3) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(4)(5) | | Name | Type of Award | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | Liren Chen | STIP | | 0 | 745,500 | 1,491,000 | | | | | | | | | OPT | 3/31/2023 | | | | 31,340 | 62,680 | 125,360 | | 72.90 | 750,000 | | | TRSU | 3/31/2023 | | | | | | | 20,371 | | 1,485,046 | | | PSU | 3/31/2023 | | | | 10,186 | 20,371 | 40,742 | | | 742,522 | | Richard J. Brezski | STIP | | 0 | 330,000 | 660,000 | | | | | | | | | TRSU | 3/31/2023 | | | | | | | 10,289 | | 750,068 | | | PSU | 3/31/2023 | | | | 5,145 | 10,289 | 20,578 | | | 375,000 | | Eeva K. Hakoranta(6) | STIP | | 0 | 341,250 | 682,500 | | | | | | | | | TRSU | 3/31/2023 | | | | | | | 10,289 | | 750,068 | | | PSU | 3/31/2023 | | | | 5,145 | 10,289 | 20,578 | | | 375,000 | | Rajesh Pankaj | STIP | | 0 | 367,500 | 735,000 | | | | | | | | | TRSU | 3/31/2023 | | | | | | | 10,289 | | 750,068 | | | PSU | 3/31/2023 | | | | 5,145 | 10,289 | 20,578 | | | 375,000 | | Joshua D. Schmidt | STIP | | 0 | 240,000 | 480,000 | | | | | | | | | TRSU | 3/31/2023 | | | | | | | 6,859 | | 500,021 | | | PSU | 3/31/2023 | | | | 3,430 | 6,859 | 13,718 | | | 250,000 | | Eric Cohen | STIP | | 0 | 318,750 | 637,500 | | | | | | | | | TRSU | 3/31/2023 | | | | | | | 7,545 | | 550,030 | | | PSU | 3/31/2023 | | | | 3,773 | 7,545 | 15,090 | | | 275,015 |
Grants of Plan-Based Awards in 2023
| (1) Amounts reported represent the potential threshold, target and maximum STIP payouts depending on the level of performance achieved under the STIP for fiscal 2023. Such amounts ranged from 0% (if threshold not met for revenue goal) to 200% of the target payout, representing the maximum payout possible under the STIP. For all NEOs, the actual amount earned for fiscal 2023, which is reported in the Summary Compensation Table above, was based on the company’s achievement of the 2023 strategic corporate goals established by the Human Capital Committee and individual performance of the NEO during 2023. |
Grants of Plan-Based Awards in 2023
| (2) Amounts reported represent the potential threshold, target and maximum number of PSUs the NEO could earn, measured as of the grant date, pursuant to his or her PSU award for the 2023 LTCP. 100% |
Grants of Plan-Based Awards in 2023
| achievement of the performance goal associated with the award results in a 100% payout of the associated target amounts. Goal achievement for performance that falls between the amounts established for threshold, target and maximum achievement is calculated using straight-line interpolation between the target achievement level and the actual achievement level, with a threshold payout of 50% of target and a maximum payout of 200% of target. |
Grants of Plan-Based Awards in 2023
| (3) Amounts reported represent the potential threshold, target and maximum number of performance-based stock options the NEO could earn, measured as of the grant date. 100% achievement of the performance goal associated with the award results in a 100% vesting of the associated target number of options. Goal achievement for performance that falls between the amounts established for threshold, target and maximum achievement is calculated using straight-line interpolation between the target achievement level and the actual achievement level, with a threshold vesting of 50% of target and a maximum vesting of 200% of target. |
Grants of Plan-Based Awards in 2023
| (4) Grant date fair value of RSU awards is determined in accordance with FASB ASC Topic 718. The TRSU awards granted in 2023 are scheduled to vest ratably over a three year period. Amounts reported for PSUs are based upon the probable outcome of the performance conditions, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. As of the date of grant, the probable outcome of the performance conditions for the PSUs granted pursuant to the 2023 LTCP was estimated at an expected achievement of 50%, and, as a result, their grant date fair value was 50% of the target grant value. See footnote 4 to the Summary Compensation Table above for the grant date fair value of the PSUs granted to the NEOs in 2023 assuming that the highest level of performance conditions will be achieved and the grants vest at their maximum level of 200% of target. |
Grants of Plan-Based Awards in 2023
| (5) Grant date fair value of option awards is determined in accordance with FASB ASC Topic 718. Amounts reported reflect the value at the grant date of the performance-based stock options granted in 2023 based upon the probable outcome of the performance conditions for such awards, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. As of the date of grant, the probable outcome of the performance conditions for these performance-based options was estimated at an expected achievement of 50%, and, as a result, their grant date fair value was 50% of the target grant value. See footnote 5 to the Summary Compensation Table above for the grant date fair value of the performance-based stock options granted to Mr. Chen in 2023 assuming that the highest level of performance conditions will be achieved and the grants vest at their maximum level of 200% of target. |
Grants of Plan-Based Awards in 2023
| (6) Ms. Hakoranta receives her salary and other cash compensation in euros. Amounts were converted to USD using an exchange rate of 1.1056. |
Outstanding Equity Awards at 2023 Fiscal Year End
Outstanding Equity Awards at 2023 Fiscal Year End The following table sets forth information concerning outstanding option and stock awards of the NEOs as of December 31, 2023.
Outstanding Equity Awards at 2023 Fiscal Year End
| | | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (2) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(6) | | Liren Chen | 4/15/21 | 11,060 | | 39,709 | 73.15 | 4/15/31 | | | | | | | 4/15/21 (new hire) | 211,141 | | 90,488 | 73.15 | 4/15/31 | | | | | | | 4/15/21 | | | | | | 25,115 | 2,725,979 | | | | | 4/15/21(7) | | | | | | | | 6,826 | 740,840 | | | 4/15/21 (8) | | | | | | | | 9,826 | 1,066,558 | | | 3/15/2022 | | | 27,120 | 62.19 | 3/15/32 | | | | | | | 3/15/2022 | | | | | | 12,252 | 1,329,861 | | | | | 3/15/2022(9) | | | | | | | | 9,189 | 997,396 | | | 3/31/2023 | | | 31,340 | 72.90 | 3/31/33 | | | | | | | 3/31/2023 | | | | | | 20,661 | 2,242,580 | | | | | 3/31/2023 (10) | | | | | | | | 10,330 | 1,121,250 | | Richard J. Brezski | 3/15/19(11) | | | | | | | | 864 | 93,819 | | | 3/31/20(12) | | | | | | | | 2,176 | 236,191 | | | 3/31/21 | | | | | | 3,679 | 399,328 | | | | | 3/31/21(7) | | | | | | | | 2,775 | 301,036 | | | 3/15/2022 | | | | | | 7,352 | 798,007 | | | | | 3/15/2022 (9) | | | | | | | | 3,675 | 398,947 | | | 3/31/2023 | | | | | | 10,435 | 1,132,644 | | | | | 3/31/2023 (10) | | | | | | | | 5,218 | 566,322 | | Eeva K. Hakoranta | | | | | | | | | | | | | 8/17/20(12) | | | | | | | | 654 | 70,985 | | | 3/31/21 | | | | | | 3,010 | 326,671 | | | | | 3/31/21(7) | | | | | | | | 2,270 | 246,277 | | | 3/15/22 | | | | | | 7,352 | 798,007 | | | | | 3/15/22(9) | | | | | | | | 3,675 | 398,947 | | | 3/31/2023 | | | | | | 10,435 | 1,132,644 | | | | | 3/31/2023 (10) | | | | | | | | 5,218 | 566,322 | | Rajesh Pankaj | 8/15/22 | | | | | | 8,882 | 964,002 | | | | | 8/15/22(9) | | | | | | | | 4,440 | 481,945 | | | 8/15/22 (new hire) | | | | | | 29,603 | 3,213,153 | | | | | 8/15/22 (new hire) (9) | | | | | | | | 5,551 | 602,459 | | | 3/31/2023 | | | | | | 10,435 | 1,132,644 | | | | | 3/31/2023 (10) | | | | | | | | 5,218 | 566,322 |
Outstanding Equity Awards at 2023 Fiscal Year End
| | | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (2) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(6) | | Joshua D. Schmidt | 3/15/19(11) | | | | | | | | 56 | 6,104 | | | 3/31/20(12) | | | | | | | | 127 | 13,825 | | | 3/31/2021 | | | | | | 1,687 | 183,151 | | | | | 3/31/21(7) | | | | | | | | 1,149 | 124,658 | | | 3/15/2022 | | | | | | 4,345 | 471,632 | | | | | 3/15/2022 (9) | | | | | | | | 2,172 | 235,759 | | | 3/31/2023 | | | | | | 6,956 | 755,059 | | | | | 3/31/2023 (10) | | | | | | | | 3,478 | 377,53051 | | Eric Cohen (13) | 3/31/21(7) | | | | | | | | 1,730 | 187,774 |
Outstanding Equity Awards at 2023 Fiscal Year End
| (1) Amounts reported represent awards of performance-based options as part of Mr. Chen’s new hire compensation package and annual LTCP grant which vested upon the achievement of specified pre-approved milestones or goals. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (2) Includes (a) threshold number of performance-based options granted for the 2021 LTCP, a portion of which are eligible to vest on March 15, 2024, subject to the achievement of pre-approved goals established by the Human Capital Committee, which determined achievement to be 120% of target; (b) number of performance-based options granted for the 2021 LTCP which are eligible to vest upon the achievement of the next specified pre-approved milestones, on the 15th of the month following certification by the Human Capital Committee that the milestone goal was achieved, prior to December 31, 2025 (c) number of performance-based new hire options that are eligible to vest upon achievement of the next specified pre-approved milestone on the 15th of the month following certification by the Human Capital Committee that the milestone goal was achieved, (d) threshold number of performance-based options granted for the 2022 LTCP, a portion of which are eligible to vest on March 15, 2025 or 2027, subject to the achievement of pre-approved goals established by the Human Capital Committee and (d) threshold number of performance-based options granted for the 2023 LTCP, a portion of which are eligible to vest on March 15, 2026, subject to achievement of pre-approved goals established by the Human Capital Committee. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (3) All awards granted are time-based RSUs granted under the LTCP or as part of Mr. Chen or Mr. Pankaj’s new hire compensation packages and include outstanding dividend equivalents. All time-based RSUs vest ratably, one third each year on the anniversary of grant date. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (4) Values reported were determined by multiplying the number of unvested time-based RSUs by $108.54, the closing price of our common stock on December 31, 2023. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (5) Numbers reported represent the number of performance-based RSUs that would vest upon achievement of threshold performance achievements or achievement of next specified pre-approved milestone pursuant to awards of performance-based RSUs made under the LTCP or as part of Mr. Chen or Mr. Pankaj’s new hire compensation packages and include dividend equivalents. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (6) Values reported were and determined by multiplying the reported number of unvested performance-based RSUs by $108.54, the closing price of our common stock on December 31, 2023. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (7) Threshold number of performance-based RSUs granted for the 2021 LTCP, which are eligible to vest on March 15, 2024, subject to the achievement of pre-approved goals established by the Human Capital Committee; goal achievement determined to be 120% of target. Also includes number of performance-based RSUs which are eligible to vest upon the achievement of the next specified pre-approved milestone, on the 15th of the month following certification by the Human Capital Committee that the milestone goal was achieved, prior to December 31, 2025. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (8) Number of new hire performance-based RSUs that are eligible to vest upon achievement of the next specified pre-approved milestone on the 15th of the month following certification by the Human Capital Committee that the milestone goal was achieved. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (9) Number of performance-based RSUs granted for the 2022 LTCP eligible to vest at threshold. Eligible to vest on March 15, 2025 or 2027, subject to the achievement of pre-approved goals established by the Human Capital Committee measured as of December 31, 2024 or 2026. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (10) Number of performance-based RSUs granted for the 2023 LTCP eligible to vest at threshold. Eligible to vest on March 15, 2026, subject to the achievement of pre-approved goals established by the Human Capital Committee measured as of December 31, 2025. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (11) Performance-based RSUs granted for the 2019 LTCP that remain eligible to vest. A portion of the award vested on March 15, 2022, based on the achievement of pre-approved goals established by the Human Capital Committee; the remaining unvested portion remained eligible to vest on March 15, 2024, subject to the achievement of the performance goals measured as of December 31, 2023; the Human Capital Committee determined that the goal achievement was below threshold, therefore any outstanding performance-based RSUs were forfeited. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (12) Performance-based RSUs granted for the 2020 LTCP eligible to vest upon the achievement of specified pre-approved milestones, on the 15th of the month following certification by the Human Capital Committee that the milestone goal was achieved, prior to December 31, 2024. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (13) Mr. Cohen forfeited his unvested RSUs in connection with his separation pursuant to the terms of the Award Agreements. Pursuant to the terms of the Award Agreements, he remained eligible to receive a pro-rata vesting of performance-based RSUs that were eligible to vest based on performance through the end of the year of separation. Mr. Cohen remained eligible to vest in a pro-rata portion of his 2021 LTCP performance-based RSUs. |
Option Exercises and Stock Vested in 2023
Option Exercises and Stock Vested in 2023 The following table sets forth information, on an aggregated basis, concerning stock options exercised and stock awards vested during 2023 for the NEOs.
Option Exercises and Stock Vested in 2023
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#)(1) | Value Realized on Exercise ($)(2) | Number of Shares Acquired on Vesting (#)(3) | Value Realized on Vesting ($)(4) | | Liren Chen | — | — | 50,003 | 4,599,601 | | Richard J. Brezski | 12,518 | 234,209 | 37,813 | 2,966,170 | | Eeva K. Hakoranta | — | — | 16,816 | 1,324,007 | | Rajesh Pankaj | — | — | 18,741 | 1,599,147 | | Joshua D. Schmidt | — | — | 5,624 | 469,641 | | Eric Cohen | — | — | 39,401 | 3,097,133 |
Option Exercises and Stock Vested in 2023
| (1) Amounts reported represent the total number of shares underlying exercised options, before deductions for tax withholdings and exercise price. |
Option Exercises and Stock Vested in 2023
| (2) Amounts reported represent the number of options exercised multiplied by the applicable market price less the number of options exercised times the option exercise price. |
Option Exercises and Stock Vested in 2023
| (3) Includes dividend equivalents accrued and paid out in additional shares of common stock upon the vesting of the underlying awards. |
Option Exercises and Stock Vested in 2023
| (4) Amounts reported represent the number of shares vested multiplied by the closing price of our common stock on the vesting date. |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation In 2013, the company introduced a nonqualified deferred compensation plan to complement the 401(k) Plan. The IRS imposes limits on the amounts that an employee may contribute annually to a 401(k) Plan account. The deferred compensation plan provides the company’s directors and designated select group of highly compensated employees, including the NEOs, with an opportunity to set aside additional compensation for their retirement. Pursuant to the terms of the deferred compensation plan, each eligible employee may elect to defer base salary and STIP payouts, and non-employee members of the Board may elect to defer Board fees, in each case, on a pre-tax basis and up to a maximum amount selected annually by the Human Capital Committee. An employee participant or director may allocate deferrals to one or more deemed investments under the deferred compensation plan. The amount of earnings (or losses) that accrue to a participant’s account attributable to deferrals depends on the performance of investment alternatives selected by the participant. The deemed investment options are currently similar to those available under the 401(k) Plan. However, a participant’s election of investment alternatives as measuring devices for determining the value of a participant’s account does not represent actual ownership of, or any ownership rights in or to, the investments to which the investment alternatives refer, nor is the company in any way bound or directed to make actual investments corresponding to such deemed investments. The company will not make any matching or discretionary contributions to the accounts of directors. However, the company may, but is not required to, make matching or discretionary contributions in cash to the accounts of employee participants. Any such company contributions are subject to a vesting schedule as determined by the Human Capital Committee. The specific terms for each plan year, including eligible compensation, minimum and maximum deferral amounts (by percentage of compensation) and matching terms, are determined on an annual basis by the Human Capital Committee. Employee participant and director account payment obligations are payable in cash on a date or dates selected by the employee participant or director or upon certain specified events such as termination of employment, death or disability, subject to change in certain specified circumstances. An employee participant or director may elect to defer to a single lump-sum payment of his or her account, or may elect payments over time. For the 2023 plan year, eligible employees could elect to defer from 1% to 40% of their base salary and from 1% to 100% of their STIP. Matching contributions are determined on a combined plan basis taking into account deferred amounts under both the 401(k) Plan and the deferred compensation plan. Deferral elections had to be made by December 31, 2022. For 2023, a participant’s combined match for the 401(k) and deferred compensation plan was 50% of the combined deferrals up to 6% of the participant’s eligible deferrals, and matching contributions under the deferred compensation plan were deemed to be notionally invested in investment alternatives elected by the NEO that are similar to those available to participants in the 401(k) Plan. Matching contributions are made once annually after the end of the year. Matching contributions vest ratably based on years of service of the participant over three years in one-third increments, with the first vesting occurring after one year of service. The following table sets forth the relevant NEO information regarding the deferred compensation plan for 2023.
Nonqualified Deferred Compensation
| Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(4) | | Liren Chen | 1,306,631 | 52,694 | 987,397 | — | 6,108,162 | | Richard J. Brezski | 41,630 | 21,209 | 95,266 | — | 639,394 | | Eeva K. Hakoranta | — | — | — | — | — | | Rajesh Pankaj | — | — | — | — | — | | Joshua D. Schmidt | — | — | — | — | — | | Eric Cohen | 183,910 | 0 | 88,929 | — | 569,411 |
Nonqualified Deferred Compensation
| (1) Contributions include deferred 2023 salary amounts and deferred 2022 STIP amounts (corresponding to the portion of the 2022 STIP amount paid in 2023). The payouts of the 2023 STIP were not made until 2024. As a result, any deferrals of the 2023 STIP are not reflected in this column. For Messrs. Chen, Brezski and Cohen, $282,554, $43,322, and $30,758, respectively, was included in the “Salary” column of the Summary Compensation Table. |
Nonqualified Deferred Compensation
| (2) For the 2023 plan year, the company matched deferrals up to 50% of the first 6% of the participant’s base salary and annual bonus, determined on a combined plan basis taking into account amounts deferred under both the 401(k) Plan and the deferred compensation plan during the 2023 calendar year. The amounts disclosed in this column reflect matching contributions (made by the company in 2024) for 2023 NEO deferral contributions. Amounts are included in the “All Other Compensation” column of the Summary Compensation Table for fiscal year 2023. |
Nonqualified Deferred Compensation
| (3) The company does not pay guaranteed, above-market or preferential earnings on deferred compensation. Therefore, the amounts in this column are not included in the Summary Compensation Table. Balances include earnings (losses) credited to the NEO’s account from notional investment alternatives elected by the NEO from alternatives that are similar to those available to participants in the 401(k) Plan. |
Nonqualified Deferred Compensation
| (4) Aggregate balance consists of employee contributions made in 2013 through 2023, company matching contributions for 2013 through 2023 and notional investment earnings through 2023. |
Nonqualified Deferred Compensation
Set forth below are the amounts reported in the aggregate balance that were previously reported in the “Salary,” “Non-Equity Incentive Plan Compensation” and “All Other Compensation” columns of the Summary Compensation Table for fiscal years 2013 through 2022, in the aggregate:
Nonqualified Deferred Compensation
| Name | Salary ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | | Liren Chen | 477,692 | 916,880 | 3,004,237 | | Richard J. Brezski | 342,482 | 19,500 | 104,388 | | Eeva K. Hakoranta | — | — | — | | Rajesh Pankaj | — | — | — | | Joshua D. Schmidt | — | — | — | | Eric Cohen | 86,130 | 161,560 | 56,479 |
Nonqualified Deferred Compensation
The deferred compensation plan was implemented in 2013. Therefore, there are no amounts included that were reported as compensation to any NEO prior to 2013.
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control
InterDigital, Inc. Executive Severance and Change in Control Policy
| (6) See “Aggregate Balance at Last FYE” column in “Nonqualified Deferred Compensation Table” for amounts payable for all NEOs. If an NEO’s employment terminates with the company for any reason, the NEO would receive a distribution of deferred amounts under the deferred compensation plan, including the vested portion of any company matching or discretionary contributions, in accordance with the NEO’s applicable distribution elections. However, in the event of a termination due to death, the NEO would receive the balance of deferred compensation account in a lump sum as soon as administratively practicable. In the event the NEO is involuntarily terminated by the company for Cause, the NEO would receive the balance of the deferred compensation account in a lump sum within 90 days of the date of termination. In the event of a Change in Control, as defined by the deferred compensation plan, the NEO would receive a distribution of the account balance in a lump sum as soon as administratively practicable, but in no event later than 30 days from the effective date of the Change in Control. |
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control The following table reflects the potential payments and benefits that would be provided to each NEO upon: (i) Resignation or Retirement; (ii) resignation by Mr. Chen or Ms. Hakoranta for Good Reason unrelated to a Change in Control; (iii) termination due to disability or death; (iv) termination without Cause; (vi) termination by the company without Cause or by Mr. Chen within two years of a Change in Control or by an NEO for Good Reason within one year of a change in control of the company; and (vii) Change in Control of the company without a termination. The amounts shown assume that the termination (or the Change in Control in the case of (vii)) was effective as of December 31, 2023, and the price per share used to calculate the value of the company’s stock awards was $108.54, the per share closing market price of our common stock on December 31, 2023. The amounts reflected are estimates of the amounts that would have been paid to the NEOs upon their termination pursuant to existing terms in place at December 31, 2023. In addition, note that the tables below do not take into account the cutback provision described above under “Termination Scenarios — Taxes.” As a result, the actual amounts paid could be lower than what is presented. The actual amounts to be paid can be determined only at the time the events described above actually occur.
Potential Payments upon Termination or Change in Control
| | Voluntary Termination / Retirement | Resignation for Good Reason | Termination w/o Cause | Death or Disability | Change in Control (w/o Termination) | Change in Control (termination or resignation for Good Reason) | | Lawrence Chen | | | | | | | | Severance | — | 1,420,000(1) | 1,420,000(1) | — | — | 1,775,000(2) | | STIP | — | — | — | — | — | 745,500(3) | | Life, Health & Other Benefits | — | 22,546(4) | 22,546 | $750,000/ 20,000(5) | — | 30,061(6) | | New Hire Equity | — | 2,074,091(7) | 2,074,091 | 2,074,091 | — | 2,074,091 | | LTCP | — | 4,906,781(8) | 4,906,781 | 4,906,781 | — | 16,374,709(9) | | Deferred Compensation Plan | 6,108,162(10) | 6,108,162 | 6,108,162 | 6,108,162 | 6,108,162 | | | Richard Brezski | | | | | | | | Severance | — | — | 660,000(11) | — | — | 880,000(12) | | STIP | — | — | — | — | — | 330,000(3) | | Life, Health & Other Benefits | — | — | 25,191(13) | 660,000/ 20,000(5) | — | 50,382(6) | | LTCP | — | — | 1,793,497(14) | 1,793,497 | — | 5,558,827(15) | | Deferred Compensation Plan | 639,394(10) | 639,394 | 639,394 | 639,394 | 639,394 | | | Eeva K. Hakoranta | | | | | | | | Severance | — | 682,500 | 682,500 | | — | 910,000 | | STIP | — | 341,250(16) | 341,250(16) | | — | 341,250(3) | | Life, Health & Other Benefits | — | 4,545(17) | 4,545 | 9,350(18) | — | 9,090(19) | | LTCP | — | 961,294(14) | 961,294 | 961,294 | | 2,921,695(15) | | Deferred Compensation Plan | — | — | — | — | — | — | | Rajesh Pankaj | | | | | | | | Severance | — | — | 735,000(11) | | — | 980,000(12) | | STIP | — | — | — | — | — | 367,500(3) | | Life, Health & Other Benefits | — | — | 25,114(13) | 735,000/ 20,000(5) | — | 50,229(6) | | LTCP | — | — | 1,949,235(14) | 1,949,235 | | 8,273,729(15) | | Deferred Compensation Plan | — | — | — | — | — | — | | Joshuah D. Schmidt | | | | | | | | Severance | — | — | 600,000(12) | | — | 800,000(12) | | STIP | — | — | | | — | 240,000(3) | | Life, Health & Other Benefits | — | — | 8,361(13) | 600,000 / 20,000(5) | — | 16,723(6) | | LTCP | — | — | 791,284(14) | 791,284 | — | 2,936,956(15) |
Potential Payments upon Termination or Change in Control
| (1) The amount represents a cash severance payment equal to 200% of the sum of Mr. Chen’s base salary in the case of resignation for Good Reason or termination without Cause, per the Terms of the Chen Offer Letter. |
Potential Payments upon Termination or Change in Control
| (2) The amount represents a cash severance payment equal to two and one-half times the sum of Mr. Chen’s base salary in case of termination within twenty-four months of a Change in Control per the terms of the Chen Offer Letter. |
Potential Payments upon Termination or Change in Control
| (3) The amount represents the NEO’s STIP paid out at target for resignation for Good Reason or termination without Cause within 12 months of a Change in Control (or in the case of Mr. Chen, 24 months). |
Potential Payments upon Termination or Change in Control
| (4) The amount represents the value of health coverage pursuant to COBRA for a period of 18 months after termination on terms and conditions comparable to those most recently provided to Mr. Chen as of December 31, 2023, pursuant to the Executive Severance Policy. |
Potential Payments upon Termination or Change in Control
| (5) The amount represents the payment prescribed under our basic term life insurance program calculated as follows: 1.5 times base salary, up to a maximum of $750,000 and the monthly benefit that would become payable to Mr. Chen under our executive long term disability plan in the event of his termination due to disability on December 31, 2023, calculated as follows: 60% of his monthly earnings (i.e., pre-tax base salary and annual bonus), up to $10,000, and a supplemental monthly payment of up to $10,000. Monthly benefits would be payable until the earlier of (a) the date he ceases to be totally disabled or (b) his 65th birthday. |
Potential Payments upon Termination or Change in Control
| (6) The amount represents the value of health coverage pursuant to COBRA for a period of 24 months after termination on terms and conditions comparable to those most recently provided to the NEO as of December 31, 2023, pursuant to the Executive Severance Policy. |
Potential Payments upon Termination or Change in Control
| (7) The amount represents a full vesting of Mr. Chen’s time-based new hire equity awards, pro-rata vesting of his new hire performance-based RSU and new hire options per the terms of the Chen Offer Letter and award agreements. All RSU amounts include accrued dividend equivalents, which are paid out in the form of additional shares of common stock at the time, and only to the extent, that the awards vest. |
Potential Payments upon Termination or Change in Control
| (8) The amount represents pro-rata vesting of Mr. Chen’s 2021, 2022 and 2023 LTCP Awards (time-based RSUs, performance-based RSUs and performance-based options). Performance-based awards represented at actual performance achievement as of December 31, 2023. |
Potential Payments upon Termination or Change in Control
| (9) The amount represents the vesting of Mr. Chen’s 2021, 2022 and 2023 LTCP Awards upon resignation for Good Reason or termination without Cause within 24 months of a Change in Control. Performance-based awards represented at actual performance achievement as of December 31, 2023. |
Potential Payments upon Termination or Change in Control
| (10) This amount represents the balance, at December 31, 2023, of the NEOs deferred compensation plan account (including matching contributions), which is payable (a) upon retirement, disability or his voluntary termination of employment with the company for any reason pursuant to the NEO’s deferral elections, (b) upon death, in a lump sum as soon as administratively practicable following his death, (c) upon an involuntary termination by the company, in a lump sum within 90 days of the date of termination and (d) upon a Change in control, in a lump sum as soon as administratively practicable, but in no event later than 30 days from the effective date of the Change in control. |
Potential Payments upon Termination or Change in Control
| (11) The amount represents cash payments under our Executive Severance Policy equal to 1.5 times an NEO’s base salary. |
Potential Payments upon Termination or Change in Control
| (12) The amount represents cash payments under our Executive Severance Policy equal to two times an NEO’s base salary. |
Potential Payments upon Termination or Change in Control
| (13) The amount represents the value of health coverage pursuant to COBRA for a period of 12 months after termination on terms and conditions comparable to those most recently provided to NEO as of December 31, 2023 pursuant to the Executive Severance Policy. |
Potential Payments upon Termination or Change in Control
| (14) This amount represents the value, at December 31, 2023, of the NEO’s outstanding performance-based RSUs granted for the 2019 and 2021 LTCP cycles and time-based and performance-based RSUs granted for the 2021, 2022 and 2023 LTCP cycles that would vest upon termination due to disability, death or termination by the company without Cause. Pursuant to the terms of the awards, the NEO would forfeit eligibility to receive any payout of performance-based RSUs granted for the 2020, 2022 and 2023 LTCP since a termination on December 31, 2023, would not be in the final year of the applicable performance periods. For time-based RSU awards, the amounts were prorated based on the portion of the vesting period that would have transpired prior to cessation of employment. For the performance-based RSU award granted for the 2019 and 2021 LTCP (the performance period for which ended December 31, 2023), the amount reflects the actual payout of 0% of target for 2019 LTCP and 120% of target for the 2021 LTCP (based on |
Potential Payments upon Termination or Change in Control
| actual performance over the performance period) prorated based on the portion of the vesting period that would have transpired prior to cessation of employment. All RSU amounts include accrued dividend equivalents, which are paid out in the form of additional shares of common stock at the time, and only to the extent, that the awards vest. |
Potential Payments upon Termination or Change in Control
| (15) This amount represents the value, at December 31, 2023, of the NEO’s unvested time-based RSUs and performance-based RSUs awards granted for the 2019, 2020, 2021, 2022 and 2023 LTCPs that would vest upon termination (by us without Cause or by the NEO for Good Reason) within one year following a Change in Control. All performance-based RSU awards would be paid out at target. All RSU amounts include accrued dividend equivalents, which are paid out in the form of additional shares of common stock at the time, and only to the extent, that the awards vest. |
Potential Payments upon Termination or Change in Control
| (16) This amount represents the pro-rata STIP payment that would be paid out upon resignation for Good Reason or termination without cause, pursuant to the terms of Ms. Hakoranta’s employment agreement. |
Potential Payments upon Termination or Change in Control
| (17) This amount represents the annual cost of business travel insurance, health insurance and statutory group insurances which would be paid for 12 months upon termination without Cause or for 24 months upon termination without Cause or resignation for Good Reason within 12 months after a Change in Control. |
Potential Payments upon Termination or Change in Control
| (18) This amount represents the statutory group life insurance benefit for which employees in Finland are entitled. |
Pay Versus Performance
Pay Versus Performance In accordance with rules adopted by the SEC, we provide the following disclosure regarding executive “Compensation Actually Paid” or “CAP” (as calculated in accordance with SEC rules) and certain Company performance for the fiscal years listed below. You should refer to our Compensation Discussion & Analysis (“CD&A”) in this proxy statement for a complete description of how executive compensation relates to Company performance and how the Human Capital Committee makes its decisions.
Pay Versus Performance
| | | | | | | | Year-end value of $100 invested on 12/31/2019 in: | | | | | | Year | Summary Compensation Table Total for Liren Chen (1) $ | Summary Compensation Table Total for William Merritt (2) $ | Compensation Actually Paid to Liren Chen (1)(3)(4)(5) $ | Compensation Actually Paid to William Merritt (2)(3)(4)(5) $ | Average Summary Compensation Table Total for Non-CEO NEOs (6) $ | Average Compensation Actually Paid to Non-CEO NEOs (3)(4)(5)(6) $ | IDCC $ | NASDAQ Telecommuni- cations Total Shareholder Return $ | Net Income (in millions) $ | Adjusted EBITDA (7) (in millions) $ | Revenue (in millions) $ | | 2023 | 4,773,160 | 0 | 20,846,309 | 0 | 1,951,371 | 4,854,811 | 217.89 | 107.36 | 214.1 | 309.4 | 549.6 | | 2022 | 4,824,787 | 0 | 8,473,818 | 0 | 2,660,110 | 3,432,926 | 97.42 | 95.61 | 93.7 | 254.5 | 457.8 | | 2021 | 10,824,838 | 1,570,440 | 19,400,708 | -711,223 | 1,426,410 | 2,407,305 | 137.70 | 127.87 | 55.3 | 208.0 | 425.4 | | 2020 | 0 | 2,642,504 | 0 | 3,740,057 | 1,218,153 | 1,067,958 | 114.28 | 122.04 | 44.8 | 155.3 | 359.0 |
Pay Versus Performance
| (1) Liren Chen became CEO of the Company on April 5, 2021. |
Pay Versus Performance
| (2) William Merritt served as CEO until his retirement on April 5, 2021. |
Pay Versus Performance
| (3) Deductions from, and additions to, total compensation in the Summary Compensation Table by year to calculate Compensation Actually Paid include: |
Pay Versus Performance
| | 2023 | | 2022 | | | | Liren Chen | Average Non-CEO NEOs | Liren Chen | Average Non-CEO NEOs | | Total Compensation from Summary Compensation Table | $4,773,160 | $1,951,371 | $4,824,787 | $2,660,110 | | Adjustments for Pension | | | | | | Adjustment Summary Compensation Table Pension | $— | $— | $— | $— | | Amount added for current year service cost | $— | $— | $— | $— | | Amount added for prior service cost impacting current year | $— | $— | $— | $— | | Total Adjustments for Pension | $— | $— | $— | $— | | Adjustments for Equity Awards | | | | | | Adjustment for grant date values in the Summary Compensation Table | $(3,000,000) | $(1,389,000) | $(2,200,025) | $(1,575,024) | | Year-end fair value of unvested awards granted in the current year | $3,746,424 | $1,132,367 | $5,249,160 | $1,866,893 | | Year-over-year difference of year-end fair values for unvested awards granted in prior years | $9,099,191 | $2,496,989 | $783,791 | $532,141 | | Fair values at vest date for awards granted and vested in current year | $— | $21,016 | $— | | | Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | $6,227,534 | $642,967 | $(183,895) | $(51,194) | | Forfeitures during current year equal to prior year-end fair value | $— | $— | $— | $— | | Dividends or dividend equivalents not otherwise included in total compensation | $— | $— | $— | $— | | Total Adjustments for Equity Awards | $16,073,149 | $2,903,440 | $3,649,031 | $772,816 | | Compensation Actually Paid (as calculated) | $20,846,309 | $4,854,811 | $8,473,818 | $3,432,926 |
Pay Versus Performance
| | 2021 | | | 2020 | | | | Liren Chen | William Merritt | Average Non-CEO NEOs | William Merritt | Average Non-CEO NEOs | | Total Compensation from Summary Compensation Table | $10,824,838 | $1,570,440 | $1,426,410 | $2,642,504 | $1,218,153 | | Adjustments for Pension | | | | | | | Adjustment Summary Compensation Table Pension | $— | $— | $— | $— | $— | | Amount added for current year service cost | $— | $— | $— | $— | $— | | Amount added for prior service cost impacting current year | $— | $— | $— | $— | $— | | Total Adjustments for Pension | $— | $— | $— | $— | $— | | Adjustments for Equity Awards | | | | | | | Adjustment for grant date values in the Summary Compensation Table | $(5,219,984) | $— | $(637,515) | $(1,083,348) | $(397,237) | | Year-end fair value of unvested awards granted in the current year | $7,850,314 | $— | $907,588 | $2,102,469 | $558,750 | | Year-over-year difference of year-end fair values for unvested awards granted in prior years | $— | $(1,601,770) | $623,362 | $611,174 | $(569,990) | | Fair values at vest date for awards granted and vested in current year | $5,945,540 | $— | $— | $681,993 | $475,054 | | Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | $— | $(679,893) | $87,459 | $(1,214,735) | $(216,773) | | Forfeitures during current year equal to prior year-end fair value | $— | $— | $— | $— | $— | | Dividends or dividend equivalents not otherwise included in total compensation | $— | $— | $— | $— | $— | | Total Adjustments for Equity Awards | $8,575,870 | $(2,281,663) | $980,895 | $1,097,553 | $(150,195) | | Compensation Actually Paid (as calculated) | $19,400,708 | $(711,223) | $2,407,305 | $3,740,057 | $1,067,958 |
Pay Versus Performance
| (4) The following summarizes the valuation assumptions used for stock option awards included as part of Compensation Actually Paid: |
Pay Versus Performance
| • | Expected life of each stock option is based on the “simplified method” using an average of the remaining vest and remaining term, as of the vest/FYE date. |
Pay Versus Performance
| • | Strike price is based on each grant date closing price and asset price is based on each vest/FYE closing price. |
Pay Versus Performance
| • | Risk free rate is based on the Treasury Constant Maturity rate closest to the remaining expected life as of the vest/FYE date. |
Pay Versus Performance
| • | Historical volatility is based on daily price history for each expected life (years) prior to each vest/FYE date. Closing prices provided by S&P Capital IQ are adjusted for dividends and splits. |
Pay Versus Performance
| • | Represents annual dividend yield on each vest/FYE date. |
Pay Versus Performance
| (5) Assumptions used in the valuation of equity awards for purposes of calculating Compensation Actually Paid were materially the same as at grant date, except for adjusting for expected performance of performance-based RSUs at each measurement date. |
Pay Versus Performance
| (6) Non-CEO NEOs reflect the average Summary Compensation Table total compensation and average Compensation Actually Paid for the following executives by year: |
Pay Versus Performance
2023: Richard Brezski; Eric Cohen, Eeva Hakoranta; Rajesh Pankaj; Joshua Schmidt 2022: Richard Brezski; Eric Cohen; Eeva Hakoranta; Rajesh Pankaj 2021: Richard Brezski; Eric Cohen; Eeva Hakoranta; Henry Tirri 2020: Richard Brezski; Richard Gulino; Kai Öistämö
Pay Versus Performance
| (7) Adjusted EBITDA is a non-GAAP financial measure. See Appendix A for an explanation of this metric and a detailed reconciliation to the most directly comparable GAAP measure. |
Descriptions of the Information Presented in the Pay Versus Performance Table
Descriptions of the Information Presented in the Pay Versus Performance Table The illustrations below compare CAP (as calculated in accordance with the SEC rules) and the following measures:
Descriptions of the Information Presented in the Pay Versus Performance Table
| • | the Company’s cumulative TSR and the NASDAQ Telecommunications Index’s cumulative TSR; |
Descriptions of the Information Presented in the Pay Versus Performance Table
| • | the Company’s Net Income; |
Descriptions of the Information Presented in the Pay Versus Performance Table
| • | the Company’s Adjusted EBITDA; and |
Descriptions of the Information Presented in the Pay Versus Performance Table
| • | the Company’s Revenue. |
Chief Executive Officer Pay Ratio
Chief Executive Officer Pay Ratio We believe our executive compensation program must be consistent and internally equitable to motivate our employees to perform. The Human Capital Committee monitors the relationship between the pay of our executive officers and the pay of our non-executive employees. The Human Capital Committee reviewed a comparison of our Chief Executive Officer’s annual total compensation in fiscal year 2023 to that of the median of all other employees for that same period. Our Chief Executive Officer’s total 2023 compensation, as set forth in the Summary Compensation Table above, was $4,773,160. A new median employee was identified in 2023. The median employee’s total 2023 compensation was approximately $170,724, making our Chief Executive Officer’s pay in 2023 approximately 28 times the pay of our median employee. The pay ratio described above is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. The median employee was identified in by determining the compensation for each employee using the following consistently applied compensation measures:
Chief Executive Officer Pay Ratio
| • | Annual Salary for fiscal year; |
Chief Executive Officer Pay Ratio
| • | Annual incentive bonus target (i.e., STIP award); and |
Chief Executive Officer Pay Ratio
| • | Grant date fair value of equity awards (or long-term cash compensation award) granted during fiscal year. |
Chief Executive Officer Pay Ratio
Our calculation includes all employees in the United States, Belgium, Canada, China, Finland, France and United Kingdon, as of December 31, 2023. We applied U.S. exchange rates to the compensation elements paid in non-U.S. dollars.
How many shares of the company’s common stock do the directors, director nominees, executive officers and certain significant shareholders own?
How many shares of the company’s common stock do the directors, director nominees, executive officers and certain significant shareholders own? The following table sets forth information regarding the beneficial ownership of the 25,602,295 shares of our common stock outstanding as of March 31, 2024, except as otherwise indicated below, by each person who is known to us, based upon filings with the SEC, to beneficially own more than 5% of our common stock, as well as by each director, each director nominee, each NEO and all directors and executive officers as of the date of this proxy statement as a group. Except as otherwise indicated below and subject to the interests of spouses of the named beneficial owners, each named beneficial owner has sole voting and sole investment power with respect to the stock listed. None of the shares reported are currently pledged as security for any outstanding loan or indebtedness. If a shareholder holds options or other securities that are exercisable or otherwise convertible into our common stock within 60 days of March 31, 2024, pursuant to SEC rules, we treat the common stock underlying those securities as beneficially owned by that shareholder, and as outstanding shares when we calculate that shareholder’s percentage ownership of our common stock. However, pursuant to SEC rules, we do not consider that common stock to be outstanding when we calculate the percentage ownership of any other shareholder. The table below excludes dividends and dividend equivalent units that will be payable on April 24, 2024.
How many shares of the company’s common stock do the directors, director nominees, executive officers and certain significant shareholders own?
| | Common Stock | | | Name | Shares | Percent of Class | | Directors and Director Nominees: | | | | Derek Aberle | 5,729 | * | | Samir Armaly | 3,892 | * | | Joan H. Gillman(1) | 2,341 | * | | S. Douglas Hutcheson(1) | 8,398 | * | | John A. Kritzmacher | 19,584 | * | | Pierre-Yves Lesaicherre | 4,103 | * | | John D. Markley, Jr. | 6,777 | * | | Jean F. Rankin | 27,478 | * | | Named Executive Officers: | | | | Richard J. Brezski(2) | 90,431 | * | | Liren Chen(3) | 404,390 | 1.6% | | Eric Cohen(4) | 12,521 | * | | Eeva K. Hakoranta | 11,439 | * | | Rajesh Pankaj | 8,766 | * | | Josh Schmidt | 9,219 | * | | All directors, director nominees and executive officers as a group (13 persons)(5) | 602,547 | 2.3% | | Greater Than 5% Shareholders: | | | | BlackRock, Inc.(6) | 4,390,364 | 17.2% | | 50 Hudson Yards New York, New York 10001 | | | | The Vanguard Group(7) | 3,217,502 | 12.6% | | 100 Vanguard Boulevard Malvern, Pennsylvania 19355 | | |
How many shares of the company’s common stock do the directors, director nominees, executive officers and certain significant shareholders own?
| * Represents less than 1% of our outstanding common stock. |
How many shares of the company’s common stock do the directors, director nominees, executive officers and certain significant shareholders own?
| (1) Does not include shares of common stock that have vested but have been deferred or dividend equivalents that have accrued on vested but deferred shares. |
How many shares of the company’s common stock do the directors, director nominees, executive officers and certain significant shareholders own?
| (2) Includes 1,969 shares of common stock beneficially owned by Mr. Brezski through participation in the 401(k) Plan, as of the most recently published account statement provided by the plan administrator. |
How many shares of the company’s common stock do the directors, director nominees, executive officers and certain significant shareholders own?
| (3) Includes 290,559 shares of common stock that Mr. Chen has the right to acquire through the exercise of stock options. |
How many shares of the company’s common stock do the directors, director nominees, executive officers and certain significant shareholders own?
| (4) Mr. Cohen was not an executive officer of the company as of March 31, 2024, but is an NEO for purposes of this proxy statement. |
How many shares of the company’s common stock do the directors, director nominees, executive officers and certain significant shareholders own?
| (5) Includes: 290,559 shares of common stock that all directors, director nominees and executive officers as a group have the right to acquire through the exercise of stock options and 1,969 shares of common stock beneficially owned by all directors, director nominees and executive officers as a group through participation in the 401(k) Plan. |
How many shares of the company’s common stock do the directors, director nominees, executive officers and certain significant shareholders own?
| (6) As of December 31, 2023, based on information contained in the Schedule 13G/A filed on January 22, 2024 by BlackRock, Inc. With respect to the shares beneficially owned, BlackRock, Inc. reported that it has sole voting power with respect to 4,358,711 shares and sole dispositive power with respect to 4,390,364 shares. |
How many shares of the company’s common stock do the directors, director nominees, executive officers and certain significant shareholders own?
| (7) As of December 31, 2023, based on information contained in the Schedule 13G/A filed on February 13, 2024 by The Vanguard Group. With respect to the shares beneficially owned, the Vanguard Group reported that it has shared voting power with respect to 48,864 shares, sole dispositive power with respect to 3,139,952 shares and shared dispositive power with respect to 77,550 shares. |
Indemnification of Directors and Officers; Director Indemnity Agreements
Indemnification of Directors and Officers; Director Indemnity Agreements We have Indemnification Agreements with certain of our directors and officers. Each Indemnification Agreement provides, among other things, that the company will, to the extent permitted by applicable law, indemnify each indemnitee if, by reason of such indemnitee’s status as a director or officer of the company, such indemnitee was, is or is threatened to be made a party to any proceeding, whether of a civil, criminal, arbitrational, administrative or investigative nature, against all expenses related thereto, including judgments, fines, penalties, excise taxes, interest and amounts paid in settlement and incurred by such indemnitee in connection with such proceeding, including attorneys’ fees). In addition, each of the Indemnification Agreements provides for the advancement of expenses incurred by the indemnitee in connection with any proceeding covered by the agreement, subject to certain exceptions. None of the Indemnification Agreements precludes any other rights to indemnification or advancement of expenses to which the indemnitee may be entitled, including but not limited to, any rights arising under our governing documents, any agreement, board action or applicable law.