DEF 14A of Magnachip Semiconductor Corp, Apr 29, 2024

DEF 14A of Magnachip Semiconductor Corp

Filed Apr 29, 2024 · FY20230001193125-24-122526

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The members of our Board are elected to one-year terms, with each director to serve until such director’s successor is elected and qualified or until such director’s earlier resignation or removal. We have five authorized members on our Board. The number of directors may be changed by our Board from time to time by resolution of a majority of the authorized directors, or by amendment of our bylaws by the affirmative vote of 66-2/3% of the outstanding voting stock of the Company, voting together as a single class. At the Annual Meeting, five directors are to be elected to hold office for a one-year term and until their successors are elected and qualified. The nominees to the Board are Mr. Camillo Martino, Ms. Kyo-Hwa Chung, Mr. Young-Joon Kim, Dr. Ilbok Lee and Mr. Gilbert Nathan. Information regarding the nominees and each continuing director is set forth below. Each of the nominees listed in the Proxy Statement has agreed to serve as a director if elected. If for some unforeseen reason a nominee becomes unwilling or unable to serve, proxies will be voted for a substitute nominee selected by the Board. The following table sets forth certain information regarding our director nominees:

  2. ELECTION OF DIRECTORS

    | Name | Age | Position | | Camillo Martino | 62 | Director, Non-Executive Chairman of the Board, Chair of the Compensation Committee and Member of the Audit Committee and the Nominating and Corporate Governance Committee | | Kyo-Hwa (Liz) Chung | 51 | Director and Member of the Compensation Committee | | Young-Joon (YJ) Kim | 59 | Director, Member of the Risk Committee and Chief Executive Officer | | Ilbok Lee | 78 | Director, Chair of the Nominating and Corporate Governance Committee and the Risk Committee and Member of the Audit Committee | | Gilbert Nathan | 44 | Director, Chair of the Audit Committee and Member of the Nominating and Corporate Governance Committee |

  3. ELECTION OF DIRECTORS

    Camillo Martino, Director, Non-Executive Chairman of the Board, Chair of the Compensation Committee and Member of the Audit Committee and the Nominating and Corporate Governance Committee. Mr. Martino became our Non-Executive Chairman of the Board in June 2020 and director in August 2016. Mr. Martino currently also serves as a member of the board of directors for CXApp (formerly, KINS Technology Group) and Sensera Limited. Mr. Martino also serves as a member of the board of directors at multiple privately-held companies, including VVDN Technologies and Sakuu Corporation. Mr. Martino previously served as a director of Cypress Semiconductor from June 2017 through to April 2020 and was also the Chief Executive Officer of Silicon Image Inc. from January 2010 until the completion of its sale to Lattice Semiconductor Corporation in March 2015. From January 2008 to December 2009, Mr. Martino served as Chief Operating Officer of SAI Technology Inc., where he also served as a director from June 2006 to November 2010. From July 2005 to June 2007, Mr. Martino served as a director, the President and Chief Executive Officer of Cornice Inc. From August 2001 to July 2005, Mr. Martino served as the Executive Vice President and Chief Operating Officer at Zoran Corporation. Prior to that, Mr. Martino held multiple positions with National Semiconductor Corporation for a total of nearly 14 years, and in four different countries. Mr. Martino holds a Bachelor of Applied Science degree from the University of Melbourne and a Graduate Diploma from Monash University in Australia. Our Board has concluded that Mr. Martino should serve on the Board based upon his extensive experience advising technology companies. Kyo-Hwa (Liz) Chung, Director and Member of the Compensation Committee. Ms. Chung was appointed as our director in July 2020 and to the Compensation Committee of the Board on January 5, 2022. Ms. Chung currently serves as the Director of Legal for Netflix Services Korea, a position she has held since April 2021. In March 2022, she was appointed as an outside director of NCSoft Corporation, a Korean video game developer and publisher listed on the Korea Exchange. Prior to Netflix Services Korea, Ms. Chung served as the Head of Corporate, External and Legal Affairs for Microsoft Korea from November 2018 until March 2021. Ms. Chung was with the Korean law firm Kim & Chang, from April 2003 until November 2018, most recently as a partner focusing on the areas of international disputes, government investigations and crisis management. During September 2008 to March 2009, Ms. Chung was engaged with the international law firm Skadden, Arps, Slate, Meagher & Flom LLP, as a visiting attorney at its New York office. Ms. Chung served as a judge on the Seoul Administrative Court from 2001 to 2003 and the Seoul Central District Court from 1999 to 2001. Ms. Chung received an LLM degree from Harvard Law School in 2008 and a Bachelor of Law degree from Korea University in 1996. Ms. Chung is licensed to practice law in Korea and New York. Our Board has concluded that Ms. Chung should serve on the Board based upon her extensive experience advising technology companies. Young-Joon (YJ) Kim, Director, Member of the Risk Committee and Chief Executive Officer. Mr. YJ Kim became our Chief Executive Officer in May 2015 and has also served as a director on our Board since that time. In February 2023, Mr. Kim held the additional role of Acting Co-General Manager of our Power business to capitalize on the attractive growth opportunities in the Power sector. From February 2020 to February 2023, Mr. Kim assumed the additional role of General Manager of the Display business to capitalize on the attractive growth opportunities in OLED display and other relevant emerging markets. He also served as the acting General Manager of Foundry Services Group from January 2019 until the completion of the sale of the Foundry Services Group and the factory in Cheongju (“Fab 4”) on September 1, 2020. Mr. Kim joined our company in May 2013 and served as our Executive Vice President and General Manager, Display Solutions Division. He was promoted to Interim Chief Executive Officer in May 2014. Prior to joining our company, Mr. Kim held a variety of senior management roles at several global semiconductor firms. His past roles include marketing, engineering, product development and strategic planning, and his product expertise includes microprocessors, network processors, multi-core processors, FLASH, EPROM, analog, mixed-signal, sensors, 3G/4G/5G base stations, workstations and servers. Immediately before joining our company, Mr. Kim served as Vice President, Infrastructure Processor Division, and General Manager of the OCTEON Multi-Core Processor Group of Cavium, Inc., where he worked from 2006 to 2013. Prior to Cavium, Mr. Kim served as Core Team Lead and General Manager of the Tolapai Program at Intel Corporation from 2004 to 2006. In 1998, Mr. Kim co-founded API Networks, a joint venture between Samsung and Compaq, where he served as the head of product management, worldwide sales and business development for Alpha processors. Prior to API Networks, Mr. Kim served as Director of Marketing at Samsung Semiconductor, Inc. from 1996 to 1998. Mr. Kim began his career as a product engineer at Intel Corporation in 1988. Mr. Kim holds B.S. and M. Eng. degrees in Electrical Engineering from Cornell University. Our Board has concluded that Mr. YJ Kim is a valuable member of the Board based on his understanding of our company’s products and technology as our Chief Executive Officer and his deep knowledge of the semiconductor industry. Ilbok Lee, Director, Chair of the Nominating and Corporate Governance Committee and the Risk Committee and Member of the Audit Committee. Dr. Lee has been our director since August 2011. Dr. Lee was an advisor/consultant to the Configurable Mixed-signal Business Unit of Dialog Semiconductor, Inc., which acquired Silego Technology Inc., a semiconductor company from October 2017 to December 2018. Dr. Lee served as Executive Chairman of Silego from August 2016 to October 2017. Dr. Lee served as Silego’s Chairman of the Board from March 2015 to August 2016 and as Silego’s Chief Executive Officer from Silego’s inception in October 2001 until August 2016. From April 1999 to September 2001, Dr. Lee served as Senior Vice President and General Manager of the Timing Division at Cypress Semiconductor Corp., a public semiconductor company, and from May 1992 to March 1999 served as President and Chief Executive Officer of IC Works, Inc., a semiconductor company he co-founded that was acquired by Cypress in 2001. Dr. Lee co-founded Samsung Semiconductor, Inc. (U.S.A.) in July 1983 and served in various positions at the Company, including President and Chief Executive Officer, until May 1992. Prior to Samsung, Dr. Lee served in various technical and managerial positions at Intel and National Semiconductor. Dr. Lee served as a member of the board of directors for Sierra Monolithic, a privately held semiconductor company, from 2002 through 2009. Dr. Lee also served on the board of directors of two public companies: ESS Technology and V3 Semiconductor. Dr. Lee received a Ph.D. and M.S.E.E. from the University of Minnesota and a B.S.E.E. from Seoul National University. Our Board has concluded that Dr. Lee should serve on our Board based upon his extensive experience in the semiconductor industry.

  4. ELECTION OF DIRECTORS

    Gilbert Nathan, Director, Chair of the Audit Committee and Member of the Nominating and Corporate Governance Committee. Mr. Nathan is the Managing Member of Jackson Square Advisors LLC, a financial advisory and services firm. He serves on the Boards of Directors of Ready Capital Corporation and Alto Ingredients, Inc. Mr. Nathan is the plan administrator of Mission Coal and Mahwah Bergen Retail Group, Inc. and is the Chief Executive Officer of Keycon Power Holdings, LLC and Cloud Peak Energy, Inc. Mr. Nathan was formerly a Senior Analyst with Candlewood Investment Group and served as Principal at Restoration Capital Management. Mr. Nathan has a BS degree in Management, Major in Finance from the A. B. Freeman School of Business at Tulane University. Our Board has concluded that Mr. Nathan should serve on our Board based upon his extensive experience in finance.

  5. 2023 Director Compensation

    2023 Director Compensation Each of our non-employee directors was eligible to earn a quarterly cash retainer, additional fees based on committee service and equity awards in 2023 pursuant to our Non-Employee Director Compensation Policy, which is described in further detail below. All such cash fees are paid quarterly in advance. A non-employee director who joins the Board after the beginning of a quarter receives a prorated cash retainer reflecting the actual period the non-employee director provided services on the Board and the applicable committee for such quarter and a non-employee director who joins the Board after the beginning of the Company’s annual director service period receives a pro-rated equity award reflecting the period the non-employee director provided services on the Board and the applicable committee during such annual service period. The below table depicts the Non-Employee Director Compensation Policy:

  6. 2023 Director Compensation

    | Compensation Elements: Non-Employee Director Compensation Policy | | | Cash | | | Quarterly Cash Retainer | $18,750 | | Quarterly Lead Director Cash Retainer* | $11,250 | | Quarterly Committee Chair Retainers | | | Chairperson | $18,750 | | Audit | $6,250 | | Compensation | $3,750 | | Nominating and Corporate Governance | $2,500 | | Risk | $2,500 | | Annual Committee Member Retainers | | | Audit | $3,750 | | Compensation | $2,500 | | Nominating and Corporate Governance | $1,250 | | Risk | $1,250 | | Equity | | | Initial Equity Grant | $165,000(1) | | Annual Equity Grant | $165,000(2) | | Committee Chair Grant (per committee) | $20,000(2) | | Committee Member Grant (per committee) | $10,000(2) |

  7. 2023 Director Compensation

    | * No Lead Director was appointed for 2023. |

  8. 2023 Director Compensation

    | (1) Initial Equity Awards: If a non-employee director’s initial appointment to the Board or a Board committee occurs other than at an Annual Meeting of Stockholders, such director will be granted pro-rated RSU awards having a dollar value equal to (x) the applicable dollar value amount for applicable Board or committee membership described above, multiplied by (y) the quotient obtained by dividing the number of days elapsed from the date of initial appointment to the date of the Company’s next Annual Meeting of Stockholders (or, if earlier, August 31 of such year), by 365, with such grants to vest in full on the date of the Company’s next Annual Meeting of Stockholders (or, if earlier, August 31 of such year). |

  9. 2023 Director Compensation

    | (2) Annual Equity Awards: Each non-employee director was eligible to receive a time-based restricted stock unit (“RSU”) award having a dollar value equal to $165,000. In addition, each non-employee director was eligible to receive an RSU award having a dollar value equal to $20,000 for such director’s service as the Chair of the Board’s Audit Committee, Compensation Committee, Nominating and Corporate Governance |

  10. 2023 Director Compensation

    | Committee or Risk Committee, as applicable; and an RSU award having a dollar value equal to $10,000 for such director’s service as a non-Chair member of the Board’s Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee or Risk Committee, as applicable. The number of shares subject to such RSU awards is calculated by dividing the applicable dollar value of the approved award by the volume-weighted average closing market price on the NYSE of one share of the Company’s Common stock over the trailing 30-day period ending on the last day immediately prior to the grant date. Each RSU award vests in full on the earlier of (x) the first anniversary of the date of grant, and (y) the meeting date of the Annual Meeting of Stockholders that occurs in the year following the year in which the RSU is granted, with such grants being made on the earlier of (A) the meeting date of the Company’s Annual Meeting of Stockholders for such year and (B) August 31 of such year. Vested RSUs settle as soon as administratively practicable following the date the non-employee director’s service terminates for any reason. |

  11. 2023 Director Compensation

    All non-employee director equity awards will be granted under the Company’s 2020 Equity and Incentive Compensation Plan, as amended. Non-employee directors are subject to our Stock Ownership Policy, as described under the heading “Stock Ownership Guidelines”. The following table sets forth the total compensation earned by our non-employee directors during the year ended December 31, 2023. Mr. YJ Kim, our Chief Executive Officer, does not earn any fees for his service on the Board.

  12. 2023 Director Compensation Table

    2023 Director Compensation Table

  13. 2023 Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | All Other Compensation ($) | Total ($) | | Liz Chung | 85,000 | 190,210 | — | 275,210 | | Ilbok Lee | 97,066 | 226,688 | — | 323,754 | | Camillo Martino | 185,000 | 222,816 | — | 407,816 | | Gilbert Nathan | 58,792 | 202,211 | — | 261,003 | | Melvin Keating | 78,750 | 211,941 | 128,750(4) | 419,441 | | Gary Tanner | 55,000 | 222,816 | 160,000(5) | 437,816 |

  14. 2023 Director Compensation Table

    | (1) Consists of the aggregate dollar amount of cash fees earned in 2023 for Board service and committee service as described in the table below. |

  15. 2023 Director Compensation Table

    | Name | Board Retainer ($) | Chair Service Fees ($) | Committee Service Fees ($) | Total ($) | | Liz Chung | 75,000 | — | 10,000 | 85,000 | | Ilbok Lee | 75,000 | 14,511 | 7,555 | 97,066 | | Camillo Martino | 75,000 | 90,000 | 20,000 | 185,000 | | Gilbert Nathan | 46,360 | 8,017 | 4,415 | 58,792 | | Melvin Keating | 56,250 | 18,750 | 3,750 | 78,750 | | Gary Tanner | 37,500 | 5,000 | 12,500 | 55,000 |

  16. 2023 Director Compensation Table

    | (2) The amounts reported represent the aggregate grant date fair value of the RSUs awarded to the directors, calculated in accordance with FASB ASC Topic 718. Such aggregate grant date fair values do not take into account any estimated forfeitures related to service vesting conditions. The amounts reported in this column reflect the accounting cost for these RSUs and do not correspond to the actual economic value that may be received by the directors upon vesting and/or settlement of the RSUs. |

  17. 2023 Director Compensation Table

    | (3) As of December 31, 2023, the number of outstanding stock options and RSU awards held by our non-employee directors who served during 2023 were as follows: |

  18. 2023 Director Compensation Table

    | Name | RSUs (#) | Stock Options (#) | | Liz Chung | 38,244 | — | | Ilbok Lee | 122,736 | 149,593 | | Camillo Martino | 116,715 | 49,737 | | Gilbert Nathan | 20,701 | — | | Melvin Keating | 34,351 | 49,737 | | Gary Tanner | — | 93,117 |

  19. 2023 Director Compensation Table

    As of December 31, 2023, the following number of RSUs included in the table above were vested but not yet settled under the terms of the applicable RSU agreements: Ms. Chung—19,705 RSUs; Mr. Keating—34,351 RSUs; Dr. Lee—100,002 RSUs; and Mr. Martino—94,998 RSUs. Stock options were last granted to our non-employee directors under our Non-Employee Director Compensation Policy in effect since 2017. Please see the section entitled “Security Ownership of Certain Beneficial Owners and Management” for additional information regarding all shares of Common Stock beneficially owned by our non-employee directors.

  20. 2023 Director Compensation Table

    | (4) The amount reported in this column represents the payment Mr. Keating received in connection with his resignation from the Company in the amount of $78,750 and the payment Mr. Keating received as his consulting fee in the amount of $50,000. |

  21. 2023 Director Compensation Table

    | (5) The amount reported in this column represents the payment Mr. Tanner received in connection with his services as a director in the amount of $110,000 and the payment Mr. Tanner received as his consulting fee in the amount of $50,000. |

  22. Key 2023 Compensation Decisions

    | • | Granted annual equity awards to our key executives using a combination of performance-based stock units (“PSUs”) (based on both relative total stockholder return (“TSR”) and financial performance |

  23. Key 2023 Compensation Decisions

    | goals) and RSUs, consistent with our practice in prior years. However, the maximum payout level for the TSR PSUs was reduced from 200% to 150%, which is earned for performance at or above the market 75th percentile. |

  24. Key 2023 Compensation Decisions

    | • | Increased the target grant value of CEO and CCO equity grants as compared to prior years in order to enhance our overall retention hold for them. |

  25. Key 2023 Compensation Decisions

    | • | Increased the target annual incentive as a percentage of base salary for our CFO from 50% to 75% of base salary, reflecting alignment with the market data and internal parity between our top executives. |

  26. Key 2023 Compensation Decisions

    | • | Long-term equity awards (the ultimate value of which depends on our stock price) continued to be the largest element of compensation, representing approximately 79% of our Chief Executive Officer’s target total direct compensation and approximately 59% of the average target total direct compensation of our other named executive officers; and |

  27. Key 2023 Compensation Decisions

    | • | The target annual (short-term) cash incentives payable to our named executive officers were tied to the pre-established performance goals and/or criteria under our short-term incentive program. |

  28. Executive Compensation-Related Policies and Practices

    | | What We Do | | • Pay-for-Performance Philosophy | A significant portion of our named executive officers’ compensation is directly linked to corporate performance. We structure target total direct compensation with a significant long-term equity component in the form of RSUs and PSUs, thereby making a vast majority of each named executive officer’s target total direct compensation dependent upon our corporate performance, stock price and/or total shareholder return. | | • Performance-Based Equity Awards | Our CEO and our other named executive officers receive performance-based equity awards in the form of PSUs that vest based on the achievement of financial goals and relative TSR performance. | | • “Double Trigger” Change in Control Arrangements | With the exception of our PSU awards that vest at target level upon a change in control, our change in control compensation arrangements include a “double trigger” provision that requires both a change in control of the Company plus a qualifying termination of employment before payments and benefits are paid. It is our expectation that all future RSUs and PSUs will be structured with the same format. | | • Human Capital Management and Succession Planning | We provide opportunities for training and advancement to all employees as part of our human capital management program. Furthermore, we conduct succession planning and executive assessments for all key employees to ensure orderly succession plans are in place. | | • Independent Compensation Committee | The Compensation Committee consists solely of independent directors. | | • Compensation Recovery Policy | We have a policy providing for the recovery of certain cash incentive compensation and equity or equity-based awards from our CEO and other executive officers (including our other named executive officers). | | • Stock Ownership Guidelines | We maintain stock ownership guidelines for our CEO, our other executive officers (including our other named executive officers) and the non-employee members of our Board. | | • Equity Award Grant Policy | Equity awards are granted in accordance with our Equity Award Grant Policy. We do not have any program, practice or plan to time equity awards in coordination with the release of material non-public information. | | • Retain an Independent Compensation Advisor | The Compensation Committee has engaged its own independent compensation advisor to provide information, analysis and other advice on executive compensation independent of management. |

  29. Executive Compensation-Related Policies and Practices

    | | What We Do | | • Annual Executive Compensation Review | The Compensation Committee conducts an annual review of our compensation strategy, including a review of our compensation used for comparative purposes. | | • Balanced Time Horizon for Incentive Compensation | We have a balance of time horizons for our incentive awards, including an annual cash incentive plan, a three-year performance period for our TSR PSUs and a three-year vesting period for our RSUs and Financial PSUs. |

  30. Executive Compensation-Related Policies and Practices

    | | What We Don’t Do | | • No Special Retirement Plans | We do not currently offer pension arrangements or retirement plans to our executive officers other than statutory severance benefits required under the Employee Retirement Benefit Security Act of Korea. | | • No Stock Option Re-Pricing | Our equity compensation plan does not permit stock options or stock appreciation rights (“SARs”) to be repriced to a lower exercise or strike price without the approval of our stockholders. | | • No Excise Tax Payments on Future Post-Employment Compensation Arrangements | We do not provide any excise tax reimbursement payments (including “gross-ups”) with respect to payments or benefits contingent upon a change in control of the Company. The Company does, however, have the obligation to provide tax equalization to the CEO and the CCO with respect to such payments and benefits, as a part of their expatriate benefit package because they are subject to taxation in both the U.S. and Korea. | | • No Hedging or Pledging | We prohibit our employees, including our executive officers, and the non-employee members of our Board from pledging, engaging in short sales and certain derivative transactions relating to our securities. | | • No Special Welfare or Health Benefits | We do not provide our executive officers with any welfare or health benefit programs, other than participation on the same basis as our full-time employees in the employee programs that are standard in our industry sector. The Company does provide customary international health insurance to the CEO, the CCO and the Co-GM of Power Analog Solutions as a part of their expatriate benefit package. | | • No Dividends or Dividend Equivalents Payable on Unvested Equity Awards | We do not pay dividends or dividend equivalents on unvested equity awards. |

  31. Timing of Compensation Decisions

    Timing of Compensation Decisions Generally, at the end of each annual evaluation period, our CEO reviews the performance of the other executive officers and presents his conclusions and recommendations to the Compensation Committee. At that time and throughout the year, the Compensation Committee also evaluates the performance of our CEO, which is measured in substantial part against our consolidated financial performance. Equity awards are made in accordance with our Equity Award Grant Policy described below. We do not have any program, plan or practice to time equity award grants in coordination with the release of material non-public information.

  32. Role of the Compensation Committee in Compensation Decisions

    | • | Our executives are incentivized and rewarded for corporate growth, achievement of long-term corporate objectives and individual performance that meet or exceed our expectations without encouraging unnecessary risk-taking; and |

  33. Role of Compensation Consultant

    Role of Compensation Consultant The Compensation Committee engages an external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program and the decisions resulting from its annual executive compensation review. For 2023, the Compensation Committee retained Compensia, a national compensation consulting firm, to serve as its independent compensation consultant. This compensation consultant serves at the discretion of the Compensation Committee. During 2023, Compensia attended some of the meetings of the Compensation Committee (both with and without management present) during the period of its engagement and provided the following services:

  34. Role of Compensation Consultant

    | • | Consulting with the Compensation Committee Chair and other members between Compensation Committee meetings on compensation matters as needed; |

  35. Role of Compensation Consultant

    | • | Reviewing the Compensation Discussion and Analysis and assisting in the drafting of the Pay Versus Performance disclosure; |

  36. Role of Compensation Consultant

    | • | Reviewing and updating the compensation peer group used to assess executive compensation; |

  37. Role of Compensation Consultant

    | • | Providing market data for selected executive officer positions covering target total direct compensation levels and design to help the Compensation Committee determine how to competitively set compensation for the selected executive officer positions; |

  38. Role of Compensation Consultant

    | • | Updates on compensation trends and regulatory developments; and |

  39. Role of Compensation Consultant

    | • | Assistance with the design of the PSUs. |

  40. Role of Compensation Consultant

    In 2023, Compensia did not provide any services to us other than the consulting services to the Compensation Committee. The Compensation Committee regularly reviews the objectivity and independence of the advice provided by its compensation consultant on executive compensation. In 2023, the Compensation Committee considered the six specific independence factors adopted by the SEC and reflected in the NYSE listing standards and determined that the work performed by Compensia did not raise any conflicts of interest.

  41. Elements of Compensation

    | Element | Purpose | Description | | Annual base salary | Provides a fixed source of annual cash compensation for our named executive officers. | Based upon each individual’s skills, experience and performance as well as the criticality of the role. | | Short-term cash incentives | Incentivizes achievement of key annual financial, operational and strategic goals. | Variable cash compensation based on performance. | | Long-term equity incentives | Aligns the interests of our named executive officers with those of our stockholders by increasing stock ownership, incentivizing increases in stockholder value and strengthening retention. | Variable equity compensation delivered through three vehicles: — Service-based RSUs with a three-year vesting period; — Financial target-based PSUs that are earned based on the achievement of certain |

  42. Elements of Compensation

    | Element | Purpose | Description | | | | financial goals over a one-year performance period and that vest over three years; and — Relative total shareholder return PSUs (TSR PSUs) with a three-year performance period. | | Expatriate and other executive benefits | Allows us to remain competitive with peer and market practices and to retain key personnel on expatriate assignments by minimizing adverse financial impacts associated with such assignments. | Benefits include housing allowances, relocation and repatriation allowances, insurance premiums, reimbursement for the use of a car, home leave flights, tax equalization payments and tax advisory services. |

  43. Sources of Market Data

    Sources of Market Data For purposes of comparing our executive compensation against the competitive market, the Compensation Committee reviews and considers the compensation levels and practices of a group of comparable technology companies. The companies in this compensation peer group were selected on the basis of their similarity to us in size, industry focus and being based in the U.S. We focused on U.S.-based companies because our highest ranking executives are U.S. expatriates who have opportunities to work with U.S.-based technology companies. Compensia provided the Compensation Committee with an analysis of the prior compensation peers with a recommendation of three companies to exclude based on the companies being acquired or being outside the financial ranges noted below. Compensia also provided three potential additions based on the selection criteria noted below. The Compensation Committee reviewed the proposed changes to our compensation peer group and approved the final group to be used for this year’s analysis. The companies in this compensation peer group were selected on the basis of their similarity to us, based on the following criteria:

  44. Sources of Market Data

    | • | Industry — semiconductors; semiconductor equipment and electronic equipment & instruments; |

  45. Sources of Market Data

    | • | Company type — Public companies primarily headquartered in the U.S. and traded on a major U.S. stock exchange; |

  46. Sources of Market Data

    | • | Similar revenue size — 0.25x – 2.5x Magnachip’s revenue of $443 million ($111 million to $1.1 billion); |

  47. Sources of Market Data

    | • | Market capitalization — $50 million to $4 billion; |

  48. Sources of Market Data

    | • | Executive positions similar in breadth, complexity and/or scope of responsibility; and |

  49. Sources of Market Data

    | • | Competitors for executive talent. |

  50. Sources of Market Data

    The Compensation Committee approved the use of market data from the following group of peer companies, which was reviewed and approved in November 2022, for our 2023 executive compensation market assessment:

  51. Sources of Market Data

    | Alpha and Omega Semiconductor | Impinj | | Ambarella | MaxLinear | | Arlo Technologies | Photronics | | Axcelis Technologies | Rambus | | CEVA | SkyWater Technology | | Cohu | Veeco Instruments | | Credo Technology Grp. Hldg | Vishay Precision Group | | Ichor Holdings | |

  52. Sources of Market Data

    The Compensation Committee reviews and updates the peer group periodically to ensure that the peer group companies satisfy our selection criteria. As a result of the review of the 2022 peer group, the following updates were made to establish the 2023 peer group:

  53. Sources of Market Data

    | • | Diodes was removed due to revenue positioned above the selection criteria range; |

  54. Sources of Market Data

    | • | DSP Group and NeoPhotonics were removed due to being acquired; and |

  55. Sources of Market Data

    | • | Arlo Technologies, CEVA, Credo Technology Group Holding were added based on the inclusion criteria. |

  56. Sources of Market Data

    The Compensation Committee seeks to establish a total compensation package for our named executive officers that is competitive with the compensation for similarly situated executives in this compensation peer group, while also considering each executive’s experience and performance. Accordingly, the Compensation Committee used the market data from this peer group as a reference point in its 2023 executive compensation process.

  57. Elements of Compensation and Weighting

    Elements of Compensation and Weighting The Compensation Committee does not apply a formula or assign relative weight in apportioning compensation among the various elements used. Instead, it makes a subjective determination after considering all information collectively for each element of compensation. Annual Base Salary The Compensation Committee seeks to set the base salaries of our named executive officers at competitive levels as compared to similarly situated executives in our select peer group, but also takes into account the named executive officer’s experience, skill set and the value of that skill set and performance. The Compensation Committee makes a subjective decision regarding any changes in base salary based on these factors and the data from our select peer group. The Compensation Committee does not systematically assign weights to any of the factors it considers, and may, in its discretion, ignore any factors or deem any one factor to have greater importance for a particular executive officer. In light of the business circumstances, base salaries of our named executive officers remained the same without an increase in 2023; furthermore, our CEO voluntarily reduced his 2023 base salary by 10%, and other named executive officers participated in a salary deferral program from November 2022 to October 2023, through which they deferred receipt of 10% of their base salary. The 2023 base salary for each named executive officer is set forth below.

  58. Elements of Compensation and Weighting

    Short-Term Cash Incentives We have been providing short-term cash incentive opportunities to encourage our named executive officers to achieve certain short-term corporate performance goals. The employment agreement that each of our named executive officers has entered into includes a target bonus amount, which is expressed as a percentage of base salary. In 2023, the Compensation Committee increased the target annual incentive as a percentage of base salary for our CFO from 50% to 75% of base salary, to better align our CFO’s compensation with the market as well as align compensation internally among executives of the same level. The Compensation Committee typically makes annual determinations regarding short-term cash incentive compensation based on various performance-related factors, including our annual operating plan, which is generally adopted in the December preceding each fiscal year. The Compensation Committee also considers for each year the cash bonus payout percentage earned by our non-executive employees pursuant to the terms of the collective bargaining agreement entered into by our Korean operating subsidiary, Magnachip Semiconductor, Ltd. (“MSK”), which agreement provides that the annual cash bonus budget for all non-executive employees shall be 10% of MSK’s operating income for each applicable year. The Compensation Committee’s annual determination regarding short-term cash incentive compensation for our executives, including our named executives officers, is conducted generally with a view toward applying a payout percentage (applicable to the target bonus amount) to our executives that is similar to, or commensurate with, that determined under the applicable collective bargaining agreement. For 2023, the Compensation Committee determined that the payout percentage of short-term cash incentive compensation for our executives would be 0%, as the Company did not meet the threshold financial target. Target bonus as a percentage of base salary, the target bonus amount and the actual amount of 2023 bonus award for each of our named executive officers are set forth below.

  59. Elements of Compensation and Weighting

    | Named Executive Officer | Target Bonus (% of Base Salary) | Target Bonus Amount | Actual Amount | | Young-Joon Kim | 100% | $560,100 | $0 | | Shin Young Park | 75% | $232,500 | $0 | | Theodore Kim | 75% | $262,500 | $0 | | Woung Moo Lee | 60% | $163,159(1) | $0 | | Chan Ho Park | 50% | $168,300 | $0 |

  60. Elements of Compensation and Weighting

    | (1) Target bonus amount remained the same as in the prior year, with the difference in prior disclosure relating to fluctuation in exchange rates. |

  61. Elements of Compensation and Weighting

    Long-Term Equity Incentives Equity awards are not tied to base salary or cash incentive amounts and constitute lesser or greater proportions of total compensation for each executive depending on market practices and the Compensation Committee’s determination of target grant values. The Compensation Committee, relying on the professional and market experience of our Compensation Committee members, as well as information provided by our compensation consultant, generally seeks to set equity awards at competitive levels based on both U.S. and Korean market practices and taking into account our equity plan share pool and projected dilution of our shares outstanding. The Compensation Committee does not target a specific percentile within our peer group with respect to equity-based compensation. Consistent with the Compensation Committee’s desire to provide compensation that is largely “at risk” while still competitive with our peers with whom we compete for talent, our equity compensation program for our named executive officers includes PSUs each year along with RSUs. The Compensation Committee believes that the inclusion of PSUs in our executive compensation program is consistent with, explicitly linked to, and supports our strategic objective of enhancing stockholder value. In 2022, consistent with aligning our named executive officers’ interests with sustained value creation, the Compensation Committee determined that it was appropriate to switch from one-year vesting to three year vesting with respect to our annual Financial PSU awards. This switch would have caused a “lag” in the realizable value of the Financial PSUs that could be recognized by the grantees in the first two years the 2022 award was to be outstanding. To avoid that lag, the Compensation Committee determined that each 2022 Financial PSU award should include a special grant of “make-whole” Financial PSUs, with a shorter one-year vesting period (“Make-Whole Financial PSUs”), in addition to the Financial PSUs vesting over a three year period. As a result, in 2022 each grantee was granted Make-Whole Financial PSUs as part of each Financial PSU award, with the number of the Make-Whole Financial PSUs equal to two thirds (2/3) of the total number of Financial PSUs that were originally intended for that grantee. In addition, in 2023 each grantee was granted Make-Whole Financial PSUs as part of each Financial PSU award, with the number of the Make-Whole Financial PSUs equal to one third (1/3) of the total number of Financial PSUs that were originally intended for that grantee, as further described below. In order for any PSUs to be earned and vest, the performance must meet or exceed a threshold level of performance during the applicable performance period, and the level of achievement of the applicable performance milestones will be determined by the Compensation Committee within 60 days following the end of the applicable performance period. In the event a named executive officer is terminated without cause or resigns for good reason in each case not in connection with a “change in control” prior to the settlement of the award, the named executive officer will remain eligible to vest in a pro-rata portion of the award on the Certification Date, based on the number of full months the executive officer provided continuous service through the applicable performance period (the “Continued Service Condition”). The general terms of the equity awards contemplated by our 2023 executive compensation program are summarized in the table below.

  62. Elements of Compensation and Weighting

    | Service-Based RSUs | Financial PSUs | TSR PSUs | | • Vest over three years in three equal annual installments, subject to the executive’s continued employment through each applicable vesting date. | • Annual grants with one-year performance period. Vesting is based on (i) the achievement of financial goals that measure our performance against our business strategy, with specific performance goals established by the Compensation Committee annually, and (ii) satisfaction of the Continued Service Condition through each applicable date in the following vesting schedule: 1/3 of Vestable Units on the Certification Date; 1/3 of Vestable Units on December 31, 2024; and 1/3 of Vestable Units on December 31, 2025(1). | • Annual grants with three-year performance period. • Performance is measured within 60 days of the end of the three-year performance period. • Vesting is based on three-year TSR of the Company relative to other entities in the S&P Semiconductor Index, determined by the percentile rank of the Company’s TSR relative to the TSR of each other entity in such index, subject to the satisfaction of the Continued Service Condition. |

  63. Elements of Compensation and Weighting

    | Service-Based RSUs | Financial PSUs | TSR PSUs | | | • For 2023, performance goals are based on revenue (1/3 weighting), gross profit margin (1/3 weighting) and Adjusted EBITDA (1/3 weighting).(2) | |

  64. Elements of Compensation and Weighting

    | (1) As described above, Make-Whole Financial PSUs have a one-year vesting period, with the entire amount vesting on the Certification Date, provided that the other conditions of vesting have been met. As a result, including the Make-Whole Financial PSUs, 50% of the 2023 Financial PSUs were eligible to vest on the Certification Date. |

  65. Elements of Compensation and Weighting

    In 2023, the Compensation Committee increased the target grant value of our CEO’s and CCO’s equity grants as compared to prior years in order to address the limited retention value of their existing unvested equity awards relative to their fully vested equity awards. The below tables summarize the RSUs, Financial PSUs, and TSR PSUs granted to each of the named executive officers of the Company in 2023.

  66. Elements of Compensation and Weighting

    | | | | RSUs | | | Name | Grant Date | FV of Grant Date | RSUs Granted (#) | Aggregate fair value of grant date ($) | | Young-Joon Kim | 02/16/2023 | $10.27 | 151,126 | 1,552,064 | | Shin Young Park | 02/16/2023 | $10.27 | 37,523 | 385,361 | | Theodore Kim | 02/16/2023 | $10.27 | 79,268 | 814,082 | | Woung Moo Lee | 03/23/2023 | $9.19 | 29,250 | 268,808 | | Chan Ho Park | 03/23/2023 | $9.19 | 12,500 | 114,875 |

  67. Elements of Compensation and Weighting

    | | | FV of Grant Date ($) (at Target) | Financial PSUs | | | | | | | Threshold | Target | Maximum | | Name | Grant Date | | Shares (#) | Shares (#) | Shares (#) | | Young-Joon Kim | 02/16/2023 | 1,747,502 | 85,079 | 170,156 | 255,235 | | Shin Young Park | 02/16/2023 | 359,666 | 17,511 | 35,021 | 52,532 | | Theodore Kim | 02/16/2023 | 417,486 | 20,326 | 40,651 | 60,977 | | Woung Moo Lee | 03/23/2023 | 137,850 | 7,500 | 15,000 | 22,500 | | Chan Ho Park | 03/23/2023 | 107,220 | 5,834 | 11,667 | 17,501 |

  68. Elements of Compensation and Weighting

    | | | FV of Grant Date ($) (at Target) | TSR PSUs | | | | | | | Threshold | Target | Maximum | | Name | Grant Date | | Shares (#) | Shares (#) | Shares (#) | | Young-Joon Kim | 02/16/2023 | 586,335 | 28,546 | 57,092 | 85,638 | | Shin Young Park | 02/16/2023 | 115,609 | 5,629 | 11,257 | 16,886 | | Theodore Kim | 02/16/2023 | 125,243 | 6,098 | 12,195 | 18,293 | | Woung Moo Lee | 03/23/2023 | 41,355 | 2,250 | 4,500 | 6,750 | | Chan Ho Park | 03/23/2023 | 34,463 | 1,875 | 3,750 | 5,625 |

  69. Elements of Compensation and Weighting

    Vesting of the Financial PSUs granted in 2023 was based on the actual level of achievement for three corporate financial performance metrics—revenue, gross profit margin and Adjusted EBITDA. Achievement at or above the maximum level of achievement for each performance goal would result in a maximum payout of 150% of the portion of the named executive officer’s target level award attributable to that performance goal, while achievement below the threshold level of achievement for each performance goal would result in no payout for the portion of the named executive officer’s target level award attributable to that performance goal. In February 2024, the Compensation Committee determined that the 2023 Financial PSUs were to be forfeited, as the Company did not achieve the threshold level of achievement for any of the three performance goals. As a result, Financial PSUs granted in 2023 covering the following number of shares of our Common Stock were forfeited by our named executive officers: Mr. YJ Kim—170,156, 42,539 of which are Make-Whole PSUs; Ms. SY Park—35,021, 8,755 of which are Make-Whole PSUs; Mr. T. Kim—40,651, 10,163 of which are Make-Whole PSUs; Mr. WM Lee—15,000, 3,750 of which are Make-Whole PSUs; and Mr. CH Park—11,667, 2,917 of which are Make-Whole PSUs. The applicable goals and weighting, and the level of achievement for the Financial PSUs granted in 2023 are as follows:

  70. Elements of Compensation and Weighting

    | Performance Metrics | Goal Weighting | Threshold | Target | Maximum | 2023 Achievement | | Vesting Ratio by Category | Weighed Vesting Ratio | | Revenue (in millions) | 33.33% | $332.8 | $339.5 | $358.7 | | 195.7 | 0.0% | 0.0% | | Gross Profit Margin (as % of revenue) | 33.33% | 27.9% | 29.4% | 31.6% | | 26.5% | 0.0% | 0.0% | | Adjusted EBITDA (in millions) | 33.33% | $12.0 | $13.0 | $14.6 | -$ | 24.2 | 0.0% | 0.0% |

  71. Equity Award Grant Policy

    Equity Award Grant Policy The Company has adopted an Equity Award Grant Policy. The policy provides that equity awards made in connection with the hiring of a new employee or the promotion of an existing employee will generally be made on a bi-monthly basis, and that, unless the Board, the Compensation Committee, or its delegate determines otherwise, will be effective on the earlier of the 1st or the 15th day of the month during which such grant is approved, or the month immediately following the date on which such grant is approved, as appropriate. In addition, new hire grants will generally become effective at least fourteen days after the date on which an employee’s employment begins. Annual and other equity awards to continuing employees, if made, will generally be made at a meeting of the Board or the Compensation Committee, or its delegate established in advance, and will generally become effective on the earlier of the 1st or the 15th day of the month during which such grant is approved, or of the month immediately following the date on which such grant is approved, as appropriate. Equity awards denominated in a number of shares will be priced in accordance with the terms of the Company’s 2020 Equity and Incentive Compensation Plan. If a grant of restricted stock or RSUs is denominated in dollars, the number of shares of restricted stock or RSUs subject to such grant will be calculated by dividing the dollar value of the approved award by the volume-weighted average closing market price on the NYSE (or such other market on which the Company’s stock is then principally listed) of one share of the Company’s stock over the trailing 30-day period ending on the last day immediately prior to the grant date.

  72. Summary Compensation Table

    Summary Compensation Table The following table sets forth certain information concerning the compensation earned during the years ended December 31, 2023, 2022 and 2021, of our named executive officers:

  73. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Option Awards($) | Stock Awards ($)(3) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non- qualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($) | Total ($) | | Young-Joon Kim Chief Executive Officer | 2023 | 502,819 | 1,011 | — | 3,885,901 | — | 35,335 | 1,486,477(5) | 5,911,543 | | | 2022 | 560,420 | 605,538 | — | 4,211,480 | — | 100,280 | 1,565,327 | 7,043,045 | | | 2021 | 557,136 | 1,576,245 | — | 2,335,967 | — | 68,656 | 1,034,781 | 5,572,785 | | Shin Young Park(6) | 2023 | 284,497 | 1,011 | — | 860,636 | — | 23,313 | 58,541(7) | 1,227,998 | | Chief Financial Officer | 2022 | 312,048 | 330,274 | — | 673,400 | — | 51,264 | 41,548 | 1,408,534 | | | 2021 | — | — | — | — | — | — | — | — | | Theodore Kim | 2023 | 349,118 | 1,011 | — | 1,356,811 | — | 22,238 | 532,438(8) | 2,261,616 | | Chief Compliance Officer, General Counsel and Secretary | 2022 | 350,259 | 528,439 | — | 1,122,940 | — | 72,468 | 644,107 | 2,718,213 | | | 2021 | 329,846 | 801,724 | — | 875,709 | — | 40,016 | 443,141 | 2,490,436 | | Woung Moo Lee | 2023 | 271,931 | 1,011 | — | 448,013 | — | 22,661 | 50,270(9) | 793,886 | | General Manager of Mixed-Signal Solutions | 2022 | 275,633 | 178,248 | — | 527,363 | — | 25,691 | 47,783 | 1,054,718 | | | 2021 | 306,158 | 127,203 | — | 471,760 | — | 25,827 | 47,360 | 978,308 | | Chan Ho Park | 2023 | 335,751 | 1,011 | — | 256,557 | — | 26,473 | 172,320(10) | 792,112 | | Co-General Manager of Power Analog Solutions | 2022 | 336,808 | 132,110 | — | 448,939 | — | 35,470 | 168,030 | 1,121,357 | | | 2021 | 329,846 | 118,306 | — | 202,186 | — | 29,353 | 165,052 | 844,743 |

  74. Summary Compensation Table

    Note: A monthly average exchange rate was used to convert amounts in the above table that were originally paid in Korean won.

  75. Summary Compensation Table

    | (1) The base salary amounts for Mr. YJ Kim, Ms. SY Park, Mr. T. Kim and Mr. CH Park in this table differ from the contractual base salary amounts described in the section above subtitled “Compensation Discussion and Analysis—Annual Base Salary” due to fluctuation in the exchange rate between U.S. dollars and Korean won during the year. The decrease in base salary amounts between 2022 and 2023 is a result of fluctuation in the exchange rate between 2022 and 2023. In addition to the fluctuation in the exchange rate that has been observed, Mr. YJ Kim received less as his base salary in 2023 as per his voluntary salary reduction of 10% of his 2023 base salary. |

  76. Summary Compensation Table

    | (2) Amounts reflected represent a one-time payment of KRW 1,300,000 made on July 14, 2023, in accordance with the 2023 Collective Bargaining Agreement with each of our named executive officer. Such amount was converted to USD based on the average exchange rate for July 2023, which of USD 1: KRW 1,286.30. |

  77. Summary Compensation Table

    | (3) The amount reported represents the aggregate grant date fair value of RSUs and PSUs granted to our named executive officers in 2023, 2022 and 2021, determined in accordance with FASB ASC 718. Such grant date fair value does not take into account any estimated forfeitures. The amount reported in this column reflects the accounting cost for these RSUs and PSUs and does not correspond to the actual economic value that may be received by the applicable NEO upon the vesting/settlement of the RSUs or any sale of the underlying shares of Common Stock. The Financial PSUs and the TSR PSUs are reported here at the target performance level based on the probable outcome of such performance conditions. When calculated at the maximum performance level, the amount of the PSUs in 2023 would be $3,500,755 for Mr. YJ Kim, $712,913 for Ms. SY Park, $814,093 for Mr. T. Kim, $268,808 for Mr. WM Lee and $212,523 for Mr. CH Park. Payout percentages for the 2021 TSR PSUs and the 2023 Financial PSUs were determined by the Compensation Committee on February 23, 2024, and as a result of actual performance over the performance period, these awards were forfeited. See the section subtitled “Compensation Discussion and Analysis—Long-Term Equity Incentives” for further information. |

  78. Summary Compensation Table

    | (4) Consists of statutory severance accrued for each of the years ended December 31, 2023, 2022 and 2021, as applicable. See the section below subtitled “Pension Benefits for the Fiscal Year Ended December 31, 2023” for a description of the statutory severance benefit. |

  79. Summary Compensation Table

    | (5) Consists of the following personal benefits paid to Mr. YJ Kim for 2023: (a) $209,013 for Mr. YJ Kim’s housing lease; (b) $8,110 for reimbursement of tuition expenses for Mr. YJ Kim’s child; (c) $82,351 for health insurance premiums; (d) $6,231 for accident insurance and business travel insurance premiums; (e) $26,860 for annual cash special allowance (the amount reported in this table differs from the $27,000 contractual annual cash special allowance due to fluctuation in the exchange rate between U.S. dollars and Korean won during the year); (f) $12,599 for car and driver expense (including personal use of a car service provided by the Company); (g) $25,919 for tax consulting expense; (h) $21,063 for living expense; (i) $1,534 for annual health examination for spouse; (j) $839 for fitness allowance; (k) $38,004 for meal allowance, welfare points and similar benefits; (l) -$28,210 of reimbursement (payable by Mr. YJ Kim) of the difference between the actual U.S. tax Mr. YJ Kim paid and the applicable hypothetical tax calculated for fiscal year 2023; and (m) $1,082,164 for reimbursement of Korean tax for fiscal year 2022. |

  80. Summary Compensation Table

    | (6) Ms. Park became a named executive officer effective January 1, 2022. |

  81. Summary Compensation Table

    | (7) Consists of the following personal benefits paid to Ms. SY Park for 2023: (a) $48,840 for health insurance premiums; (b) $4,240 for personal use of a car service provided by the Company; (c) $1,150 for annual health examination for spouse; (d) $833 for fitness allowance; (e) $1,000 for meal allowance; and (f) $2,478 for medical expense support, welfare points and similar benefits. |

  82. Summary Compensation Table

    | (8) Consists of the following personal benefits paid to Mr. T. Kim for 2023: (a) $76,299 for housing lease; (b) $29,092 for home leave flights; (c) $58,363 for health insurance premiums; (d) $1,680 for accident insurance and business travel insurance premiums; (e) $7,950 for reimbursement of tuition expense for Mr. T. Kim’s child; (f) $4,544 for personal use of a car service provided by the Company; (g) $12,573 for tax consulting expense; (h) $5,612 for living expense; (i) $757 for fitness allowance; (j) $8,660 for meal allowance, welfare points and similar benefits; (k) -$78,260 of reimbursement (payable by Mr. T. Kim) of the difference between the actual U.S. tax Mr. T. Kim paid and the applicable hypothetical tax calculated for fiscal year 2023; and (l) $405,168 for reimbursement of Korean tax for the fiscal year 2022. |

  83. Summary Compensation Table

    | (9) Consists of the following personal benefits paid to Mr. WM Lee for 2023: (a) $39,451 for health insurance premiums; (b) $4,054 for personal use of a car service provided by the Company; (c) $1,825 for private pension; (d) $1,150 for annual health examination for spouse; (e) $834 for fitness allowance; and (f) $2,956 for meal allowance, welfare points and similar benefits. |

  84. Summary Compensation Table

    | (10) Consists of the following personal benefits paid to Mr. CH Park for 2023: (a) $78,953 for health insurance premiums; (b) $3,242 for personal use of a car service provided by the Company; (c) $79,798 for as part of an allowance to be used for airfare, housing and related expenses (the amount reported in this table differs from the $80,000 contractual special bonus due to fluctuation in the exchange rate between U.S. dollars and Korean won during the year); (d) $4,361 for tax consulting expense; (e) $1,150 for annual health examination for spouse; (f) $827 for fitness allowance; and (g) $3,989 for meal allowance, family allowance, welfare points and similar benefits. |

  85. Grants of Plan-Based Awards Table for Fiscal Year 2023

    Grants of Plan-Based Awards Table for Fiscal Year 2023 The following table sets forth information regarding grants of plan-based awards made to our named executive officers during 2023. The vesting schedule applicable to each award is set forth in the “Outstanding Equity Awards as of Fiscal Year End 2023” table. See the section subtitled “Compensation Discussion and Analysis—Long-Term Equity Incentives” for further information regarding grants made to our named executive officers during 2023.

  86. Grants of Plan-Based Awards Table for Fiscal Year 2023

    | | | Estimated Future Payouts Under Equity Incentive Plan Awards (#) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(1) | Grant Date Fair Value of Stock and Option Awards ($)(4) | | Name | Grant Date | Threshold | Target | Maximum | | | | Young-Joon Kim | 02/16/2023(1) | — | — | — | 151,126 | 1,552,064 | | | 02/16/2023(2) | 85,079 | 170,156 | 255,235 | — | 1,747,502 | | | 02/16/2023(3) | 28,546 | 57,092 | 85,638 | — | 586,335 | | Shin Young Park | 02/16/2023(1) | — | — | — | 37,523 | 385,361 | | | 02/16/2023(2) | 17,511 | 35,021 | 52,532 | — | 359,666 | | | 02/16/2023(3) | 5,629 | 11,257 | 16,886 | — | 115,609 | | Theodore Kim | 02/16/2023(1) | — | — | — | 79,268 | 814,082 | | | 02/16/2023(2) | 20,326 | 40,651 | 60,977 | — | 417,486 | | | 02/16/2023(3) | 6,098 | 12,195 | 18,293 | — | 125,243 | | Woung Moo Lee | 03/23/2023(1) | — | — | — | 29,250 | 268,808 | | | 03/23/2023(2) | 7,500 | 15,000 | 22,500 | — | 137,850 | | | 03/23/2023(3) | 2,250 | 4,500 | 6,750 | — | 41,355 | | Chan Ho Park | 03/23/2023(1) | — | — | — | 12,500 | 114,875 | | | 03/23/2023(2) | 5,834 | 11,667 | 17,501 | — | 107,220 | | | 03/23/2023(3) | 1,875 | 3,750 | 5,625 | — | 34,463 |

  87. Grants of Plan-Based Awards Table for Fiscal Year 2023

    | (1) Represents the RSUs granted during fiscal year 2023 to our named executive officers. Further information on the RSU awards can be found in the “Compensation Discussion & Analysis” section above. |

  88. Grants of Plan-Based Awards Table for Fiscal Year 2023

    | (2) Represents the Financial PSUs granted during fiscal year 2023 to our named executive officers. The Compensation Committee is required to certify the actual amount earned for each performance goal for the performance period, within 60 days following the end of the performance period. Upon such determination, the portion of the award structured as Make-Whole Financial PSUs vests, and the remainder of the 2023 Financial PSU award corresponding to the payout percentage vests, subject to the satisfaction of the Continued Service Condition. Further information on the Financial PSUs, including the portion structured as Make-Whole Financial PSUs can be found in the “Compensation Discussion & Analysis” section above. |

  89. Grants of Plan-Based Awards Table for Fiscal Year 2023

    | (3) Represents the TSR PSUs granted during fiscal year 2023 to our named executive officers. The Compensation Committee is required to certify the actual amount earned for each performance goal, within 60 days following the end of the performance period. Upon such determination, the applicable portion of the units corresponding to the payout percentage vests, subject to the satisfaction of the Continued Service Condition. Further information on the Financial PSUs can be found in the “Compensation Discussion & Analysis” section above. |

  90. Grants of Plan-Based Awards Table for Fiscal Year 2023

    | (4) Represents the grant date fair value of each equity-based award as determined in accordance with FASB ASC 718. For the performance-based equity awards, the amounts are reported at the target performance level based on the probable outcome of the applicable performance conditions. |

  91. Outstanding Equity Awards at Fiscal Year End 2023

    Outstanding Equity Awards at Fiscal Year End 2023 The following table sets forth all outstanding equity awards held by our named executive officers as of December 31, 2023. Please see the section below entitled “Potential Payments Upon Termination or Change in Control” for information regarding the impact of certain employment termination scenarios on outstanding equity awards.

  92. Outstanding Equity Awards at Fiscal Year End 2023

    | | Option Awards | | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price($) | Option Expiration Date | | Young-Joon Kim | 6/9/2015 | 90,610 | — | 7.64 | 6/9/2025 | | | 3/11/2016 | 45,305 | — | 5.53 | 3/11/2026 | | Shin Young Park | 8/11/2015 | 1,000 | — | 8.45 | 8/11/2025 | | | 3/11/2016 | 1,500 | — | 5.53 | 3/11/2026 | | Theodore Kim | 6/9/2015 | 51,740 | — | 7.64 | 6/9/2025 | | | 3/11/2016 | 25,870 | — | 5.53 | 3/11/2026 | | Woung Moo Lee | 6/9/2015 | 43,940 | — | 7.64 | 6/9/2025 | | | 3/11/2016 | 25,870 | — | 5.53 | 3/11/2026 | | Chan Ho Park | — | — | — | — | — |

  93. Outstanding Equity Awards at Fiscal Year End 2023

    | | | Stock Awards | | | | | Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | | Young-Joon Kim | 02/19/2021 | — | — | 26,126(4) | 195,945 | | | 02/28/2022 | 14,334(5) | 107,505 | 39,400 | 295,500 | | | 02/16/2023 | 100,751(6) | 755,633 | 227,248(4) | 1,704,360 | | Shin Young Park | 02/19/2021 | — | — | 2,013(4) | 15,098 | | | 02/28/2022 | 5,000(5) | 37,500 | 4,500 | 33,750 | | | 02/16/2023 | 25,016(6) | 187,620 | 46,278(4) | 347,085 | | Theodore Kim | 02/19/2021 | — | — | 6,541(4) | 49,058 | | | 02/28/2022 | 8,334(5) | 62,505 | 7,500 | 56,250 | | | 02/16/2023 | 52,846(6) | 396,345 | 52,846(4) | 396,345 | | Woung Moo Lee | 02/19/2021 | — | — | 3,524(4) | 26,430 | | | 02/28/2022 | 3,916(5) | 29,370 | 3,524 | 26,430 | | | 03/23/2023 | 19,500(6) | 146,250 | 19,500(4) | 146,250 | | Chan Ho Park | 02/19/2021 | — | — | 1,510(4) | 11,325 | | | 02/28/2022 | 3,334(5) | 25,005 | 3,000 | 22,500 | | | 03/23/2023 | 8,334(6) | 62,505 | 15,417(4) | 115,628 |

  94. Outstanding Equity Awards at Fiscal Year End 2023

    | (1) Represents the market value of RSUs based on our closing per share price of $7.50 on December 29, 2023, the last trading day of 2023. |

  95. Outstanding Equity Awards at Fiscal Year End 2023

    | (2) Represents unvested TSR PSUs granted on February 19, 2021, February 28, 2022 and February 16, 2023 for Mr. YJ Kim, Ms. SY Park and Mr. T. Kim and granted on February 19, 2021, February 28, 2022 and March 23, 2023 for Mr. WM Lee and Mr. CH Park at target performance level. The TSR PSUs vest based on achievement of the TSR performance goal over the 2021-2023 performance period (for the 2021 grants), 2022-2024 performance period (for the 2022 grants) and 2023-2025 performance period (for the 2023 grants), subject to the completion of the Continued Service Condition. |

  96. Outstanding Equity Awards at Fiscal Year End 2023

    | (3) Represents the market value of TSR PSUs at target performance level based on our closing per share price of $7.50 on December 29, 2023, the last trading day of 2023. |

  97. Outstanding Equity Awards at Fiscal Year End 2023

    | (4) Payout percentages for TSR PSUs granted on February 19, 2021 for Mr. YJ Kim, Ms. SY Park, Mr. T. Kim, Mr. WM Lee and Mr. CH Park, and Financial PSUs granted on February 16, 2023 for Mr. YJ Kim, Ms. SY Park and Mr. T. Kim and March 23, 2023 for Mr. WM Lee and Mr. CH Park were determined on February 23, 2024, as it was determined that the actual performance over the performance period failed to meet the vesting conditions, these awards were forfeited. See “Compensation Discussion and Analysis—Long-term Equity Incentives” for additional details. |

  98. Outstanding Equity Awards at Fiscal Year End 2023

    | (5) RSUs vest over three years in three equal annual installments, subject to executive’s continued employment through each applicable vesting date. Represents the third installment, scheduled to vest on December 31, 2024. |

  99. Outstanding Equity Awards at Fiscal Year End 2023

    | (6) RSUs vest over three years in three equal annual installments, subject to executive’s continued employment through each applicable vesting date. Represents the second and third installments, scheduled to vest on December 31, 2024 and December 31, 2025, respectively. |

  100. Option Exercises and Stock Vested

    Option Exercises and Stock Vested The following table shows information regarding the vesting of stock awards held by our named executive officers in 2023. None of our named executive officers exercised stock options during 2023.

  101. Option Exercises and Stock Vested

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#)(1)(5) | Value Realized on Vesting ($)(4)(5) | | Young-Joon Kim | 74,457 | 558,428 | | Shin Young Park | 23,078(2) | 179,384 | | Theodore Kim | 42,024 | 315,180 | | Woung Moo Lee | 17,582 | 131,865 | | Chan Ho Park | 14,178(3) | 120,135 |

  102. Option Exercises and Stock Vested

    | (1) Represents the sum of RSUs that vested on December 31, 2023. Payout percentages for the 2021 TSR PSUs and the 2023 Financial PSUs were determined by the Compensation Committee on February 23, 2024, as it was determined that the actual performance over the performance period failed to meet the vesting conditions, these awards were forfeited. |

  103. Option Exercises and Stock Vested

    | (2) Includes RSUs that vested on March 12, 2023. |

  104. Option Exercises and Stock Vested

    | (3) Includes RSUs that vested on June 1, 2023. |

  105. Option Exercises and Stock Vested

    | (4) Represents the sum of the value of vested RSUs as of the vesting date, based on our closing per share price on the vesting date. |

  106. Option Exercises and Stock Vested

    | (5) The share numbers and values set forth in these two columns do not take into account the shares that were withheld from the named executive officers to pay applicable withholding taxes. The below table shows the number of shares, with their values calculated as of the vesting date, that were withheld by the Company in order to pay applicable withholding taxes on behalf of our named executive officers: |

  107. Option Exercises and Stock Vested

    | | Stock Awards | | | Name | Number of Shares Withheld (#) | Value of Shares Withheld ($) | | Young-Joon Kim | 26,062 | 195,465 | | Shin Young Park | 11,093 | 86,072 | | Theodore Kim | 14,710 | 110,325 | | Woung Moo Lee | 8,471 | 63,533 | | Chan Ho Park | 2,965 | 25,124 |

  108. Pension Benefits for the Fiscal Year Ended December 31, 2023

    Pension Benefits for the Fiscal Year Ended December 31, 2023 In addition to the severance benefits described above, pursuant to the Employee Retirement Benefit Security Act of Korea, certain executive officers residing in Korea with one or more years of service are entitled to severance benefits upon the termination of their employment for any reason. The base statutory severance accrues at the rate of approximately one month of base salary per year of service and is calculated on a monthly basis based upon the executive’s salary for the prior three-month period. Accordingly, if the named executive officer’s employment with the Company terminated on the last day of our fiscal year ended December 31, 2023, they would have been entitled to the statutory severance payments described below. The accumulated amounts under the statutory severance scheme are paid in a lump sum upon the executive’s separation. Assuming no change in the applicable law, each of these executives will continue to accrue additional statutory severance benefits at the rate described above until his or her service with us terminates.

  109. Pension Benefits for the Fiscal Year Ended December 31, 2023

    | Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($)(1) | Payments During the Last Fiscal Year($) | | Young Joon Kim | Statutory Severance | 11 | 508,704 | — | | Shin Young Park | Statutory Severance | 5 | 131,978 | — | | Theodore Kim | Statutory Severance | 11 | 305,466 | — | | Woung Moo Lee | Statutory Severance | 11 | 233,193 | — | | Chan Ho Park | Statutory Severance | 4 | 102,802 | — |

  110. Pension Benefits for the Fiscal Year Ended December 31, 2023

    | (1) The value reported in this column represents the accumulated amount of the benefit for each executive based on the formula described above of one month of base salary per year of credited service. |

  111. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation We do not maintain any nonqualified deferred compensation plans for our named executive officers.

  112. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control Our named executive officers are each party to an employment agreement that provides for post-employment or change in control benefits. The terms “cause”, “good reason”, “disability” and “change in control” used below have the meanings given to them in the applicable CEO Agreement or Other Executive Agreement (each as defined below).

  113. Young-Joon Kim

    | (1) Represents cash severance payments payable pursuant to the CEO Agreement (including a pro rata bonus based on actual performance). See “Potential Payments Upon Termination or Change in Control” for additional information. |

  114. Young-Joon Kim

    | (2) Represents continuation of benefits and perquisites pursuant to the CEO Agreement and our expatriate benefit policy. See “Potential Payments Upon Termination or Change in Control” and “—Compensation Discussion and Analysis—Perquisites and Other Benefits” for additional information. Calculated assuming benefits for the applicable period will have the same dollar value as corresponding 2023 benefits. |

  115. Shin Young Park

    | (1) Represents cash severance payments payable pursuant to the Executive Service Agreement. See “Potential Payments Upon Termination or Change in Control” for additional information. |

  116. Theodore Kim

    | (1) Represents cash severance payments payable pursuant to the applicable Other Executive Agreement. See “Potential Payments Upon Termination or Change in Control” for additional information. |

  117. Woung Moo Lee

    | (1) Represents cash severance payments payable pursuant to the applicable Other Executive Agreement. See “Potential Payments Upon Termination or Change in Control” for additional information. |

  118. Chan Ho Park

    | (1) Represents cash severance payments payable pursuant to the Executive Service Agreement. See “Potential Payments Upon Termination or Change in Control” for additional information. |

  119. CEO Pay Ratio

    CEO Pay Ratio For the 2023 fiscal year, the ratio of the annual total compensation of Mr. YJ Kim, our Chief Executive Officer (“CEO Compensation”), to the median of the annual total compensation of all of our employees other than our Chief Executive Officer (“Median Annual Compensation”) was 69.65 to 1. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions summarized below. In this summary, we refer to the employee who received such Median Annual Compensation as the “Median Employee.” For purposes of this disclosure, the date used to identify the Median Employee was December 31, 2023 (the “Determination Date”). CEO Compensation for purposes of this disclosure represents the total compensation reported for Mr. YJ Kim under “Summary Compensation Table”, which was $5,911,543 for the 2023 fiscal year. For purposes of this disclosure, Median Annual Compensation was $84,873, and was calculated by totaling for our Median Employee all applicable elements of compensation for the 2023 fiscal year in accordance with Item 402(c)(2)(x) of Regulation S-K. To identify the Median Employee, we first determined our employee population as of the Determination Date. We had 891 employees, representing all full-time, part-time, seasonal and temporary employees of Magnachip and its consolidated subsidiaries as of the Determination Date, but excluding Mr. YJ Kim, and, as permitted by applicable SEC rules, excluding (i) any independent contractors or “leased” workers and (ii) all of our employees located in China (27), Taiwan (4), Japan (2) and Germany (1). We then measured compensation for the period beginning on January 1, 2023 and ending on December 31, 2023 for these employees. This compensation measurement was calculated by totaling, for each employee, total cash compensation paid (including salary, wages, tips, cash bonuses and other cash compensation paid in 2023) as shown in our payroll and human resources records for 2023. A portion of our employee workforce (full-time and part-time) worked for less than the full fiscal year due to commencing employment after the beginning of the fiscal year. In determining the Median Employee, we annualized the compensation for such individuals.

  120. Pay Versus Performance

    Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Act and Item 402(v) of Regulation S-K, we are providing information about the relationship between executive “Compensation Actually Paid” to our principal executive officer (“PEO”) and our other named executive officers (“NEOs”), as calculated in accordance with Item 402(v) of Regulation S-K, and certain financial performance measures. For a discussion of our compensation philosophy, how our Compensation Committee assessed “pay-for-performance,” and how our executive compensation program is designed to link executive compensation with the achievement of our financial and strategic objectives, as well as stockholder value creation each year, see the section titled “Compensation Discussion and Analysis” on page 22.

  121. Pay Versus Performance Table

    Pay Versus Performance Table

  122. Pay Versus Performance Table

    | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year (1) | Summary Compensation Table Total for PEO | Compensation Actually Paid for PEO(2)(3) | Average Summary Compensation Table Total for Non- PEO NEOs | Average Compensation Actually Paid for Non-PEO NEOs(4)(5) | Total Shareholder Return(6) | Peer Group Total Shareholder Return(7) | Net Income(8) | Gross Profit Margin(9) | | 2023 | $5,911,543 | $3,073,819 | $1,268,903 | $812,131 | $65 | $226 | $(36,622,000) | 22.4% | | 2022 | $7,043,045 | $2,131,915 | $1,575,706 | $778,297 | $81 | $137 | $(8,036,000) | 30.0% | | 2021 | $5,572,785 | $6,004,697 | $1,260,484 | $1,379,361 | $181 | $213 | $56,708,000 | 32.4% | | 2020 | $2,951,667 | $2,943,599 | $746,414 | $780,349 | $116 | $151 | $344,965,000 | 25.3% |

  123. Pay Versus Performance Table

    | (1) Young-Joon Kim served as the Company’s PEO for the entirety of 2020, 2021, 2022 and 2023. The Company’s other NEOs for the applicable years were as follows: |

  124. Pay Versus Performance Table

    – 2023: Theodore Kim, Woung Moo Lee, Chan Ho Park, Shin Young Park – 2022: Theodore Kim, Woung Moo Lee, Chan Ho Park, Shin Young Park – 2021: Theodore Kim, Woung Moo Lee, Chan Ho Park, Young Soo Woo – 2020: Jonathan Kim, Theodore Kim, Woung Moo Lee, Chan Ho Park, Young Soo Woo Jonathan Kim, Chan Ho Park and Young Soo Woo each served partial years in 2020. Jonathan Kim resigned on March 27 2020, Chan Ho Park’s date of hire was June 1, 2020, and Young Soo Woo’s date of hire was May 25, 2020.

  125. Pay Versus Performance Table

    | (2) The amounts reported represent the “Compensation Actually Paid” to our PEO, computed in accordance with Item 402(v) of Regulation S-K, but do not reflect the actual amount of compensation earned by or paid to our PEO in the applicable year. The valuation assumptions used to calculate fair values were updated for the applicable fiscal year, and the assumptions for the applicable fiscal year are set forth in the notes to the financial statements in our annual on Form 10-K for the applicable fiscal year. |

  126. Pay Versus Performance Table

    | (3) In accordance with Item 402(v) of Regulation S-K, the table below describes the adjustments that were made to the 2023 amounts reported for our PEO in the “Total” column of the Summary Compensation Table to calculate the “Compensation Actually Paid”. No dividends or other earnings were paid on stock or option awards in the covered fiscal year. |

  127. Pay Versus Performance Table

    | | PEO | | | | | 2023 | | | Summary Compensation Table—Total Compensation | $5,911,543 | | — | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year | $3,885,901 | | + | Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | $960,593 | | + | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | $(172,083) | | + | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year | $377,813 | | + | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $(45,515) | | — | Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $72,630 | | = | Compensation Actually Paid | $3,073,819 |

  128. Pay Versus Performance Table

    Equity Award Valuations : Equity values are computed in accordance with FASB ASC 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant.

  129. Pay Versus Performance Table

    | (4) The amounts reported represent the average “Compensation Actually Paid” to the NEOs other than our PEO as a group, computed in accordance with Item 402(v) of Regulation S-K. The amounts do not reflect the actual average amount of compensation earned by or paid to such NEOs as a group in the applicable year. The valuation assumptions used to calculate fair values were updated for the applicable fiscal year and the assumptions for the applicable fiscal year are set forth in the notes to the financial statements in our annual on Form 10-K for the applicable fiscal year. |

  130. Pay Versus Performance Table

    | (5) In accordance with Item 402(v) of Regulation S-K, the table below describes the adjustments that were made were made to the 2023 average of the amounts reported in the “Total” column of the Summary Compensation Table for the NEOs as a group (excluding our PEO) to calculate the “Compensation Actually Paid”. No dividends or other earnings were paid on stock or option awards in the covered fiscal year. For information on the calculation of “compensation actually paid” for 2020, 2021 and 2022, please see the “pay versus performance” disclosure in our 2023 definitive proxy statement which was filed with the SEC on April 17, 2023. |

  131. Pay Versus Performance Table

    | | NEO Average | | | | | 2023 | | | Summary Compensation Table—Total Compensation | $1,268,903 | | — | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year | $730,504 | | + | Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | $226,633 | | + | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | $(26,768) | | + | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year | $99,084 | | + | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $(15,773) | | — | Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $9,444 | | = | Compensation Actually Paid | $812,131 |

  132. Pay Versus Performance Table

    Equity Award Valuations : Equity values are computed in accordance with FASB ASC 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant.

  133. Pay Versus Performance Table

    | (6) Cumulative total shareholder return (“TSR”) is calculated by dividing the sum of the cumulative amount of dividends for the performance period, assuming dividend reinvestment, and the difference between our company’s share price at the end and the beginning of the performance period by our company’s share price at the beginning of the performance period. No dividends were paid on stock or option awards in 2023, 2022, 2021, or 2020. |

  134. Pay Versus Performance Table

    | (7) The TSR Peer Group consists of the Philadelphia Semiconductor Index, an independently prepared index composed of the 30 largest U.S. companies primarily involved in the design, distribution, manufacture, and sale of semiconductors. |

  135. Pay Versus Performance Table

    | (8) Among various factors that can affect the Company’s net income year-over-year, a substantial portion of non-cash translation gain or loss recorded in the Company’s net income is associated with the intercompany long-term loans, which is denominated in U.S. dollars, to the Company’s Korean subsidiary (using Korean Won as its functional currency) by the Dutch Subsidiary. As of December 31, 2023, 2022, 2021 and 2020, the outstanding intercompany long-term loan balance including accrued interest was $285.1 million, $311.0 million, $344.4 million and $378.9 million, respectively. Due to the foreign currency fluctuations year-over-year, it can be difficult to detect underlying trends in net income as a result of the Company’s business and results of operations. |

  136. Pay Versus Performance Table

    In addition, certain non-recurring events that were not expected to represent the Company’s ongoing operating income or expense had an impact on net income. For the year ended December 31, 2021, total net income of $56.7 million included net gain of $35.5 million that represented $70.2 million income from the recognition of a reverse termination fee, net of professional service fees and expenses of $34.7 million incurred in connection with the previously contemplated merger. For the year ended December 31, 2020, total net income of $345.0 million included income from discontinued operations, net of tax, of $287.9 million, primarily attributable to the recognition of $287.1 million as gain on sale of the Company’s Foundry Service Group business and its fabrication facility located in Cheongju known as “Fab 4”. It also included income tax benefits of $46.2 million, mainly attributable to the recognition of differences between GAAP and cash tax expense of $43.9 million.

  137. Pay Versus Performance Table

    | (9) As noted in the section titled “Compensation Discussion and Analysis,” for 2023, the Compensation Committee determined that gross profit as a percentage of revenue (“Gross Profit Margin”) continues to be viewed as a core driver of the Company’s performance and stockholder value creation and, accordingly, was utilized as a component in the 2023 long term incentive program. |