DEF 14A of Magnachip Semiconductor Corp
Filed Apr 29, 2025 · FY20240001193125-25-103977
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 (Liz) 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:
ELECTION OF DIRECTORS
| Name | Age | Position | | Camillo Martino | 63 | 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 | 52 | Director and Member of the Compensation Committee | | Young-Joon (YJ) Kim | 60 | Director, Member of the Risk Committee and Chief Executive Officer | | Ilbok Lee | 79 | Director, Chair of the Nominating and Corporate Governance Committee and the Risk Committee and Member of the Audit Committee | | Gilbert Nathan | 45 | Director, Chair of the Audit Committee and Member of the Nominating and Corporate Governance Committee |
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). Mr. Martino also serves as a member of the board of directors at multiple privately-held companies, including VVDN Technologies, Sakuu and Ceremorphic. Mr. Martino previously served as a director of Cypress Semiconductor from June 2017 through to April 2020, a director of Sensera from 2018 to 2024, 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 assumed the additional role of Acting Co-General Manager of our Power business to capitalize on the attractive growth opportunities in the Power sector. In 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.
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.
2024 Director Compensation
2024 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 2024 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:
2024 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) |
2024 Director Compensation
| * No Lead Director was appointed for 2024. |
2024 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). |
2024 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 Committee or Risk Committee, as applicable; and an RSU award having a dollar value equal to $10,000 for such director’s service as a non-Chair member of the Board’s Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee or Risk Committee, as applicable. The number of shares subject to such RSU awards is calculated by dividing the applicable dollar value of the approved award by the volume-weighted average closing market price on the NYSE of one share of the Company’s Common stock over the trailing 30-day period ending on the last day immediately prior to the grant date. Each RSU award vests in full on the earlier of (x) the first anniversary of the date of grant, and (y) the meeting date of the Annual Meeting of Stockholders that occurs in the year following the year in which the RSU is granted, with such grants being made on the earlier of (A) the meeting date of the Company’s Annual Meeting of Stockholders for such year and (B) August 31 of such year. Vested RSUs settle as soon as administratively practicable following the date the non-employee director’s service terminates for any reason. |
2024 Director Compensation
All non-employee director equity awards will be granted under the Company’s 2020 Equity and Incentive Compensation Plan, as amended. Non-employee directors are subject to our Stock Ownership Policy, as described under the heading “Stock Ownership Guidelines”. The following table sets forth the total compensation earned by our non-employee directors during the year ended December 31, 2024. Mr. YJ Kim, our Chief Executive Officer, does not earn any fees for his service on the Board.
2024 Director Compensation Table
2024 Director Compensation Table
2024 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | All Other Compensation ($) | Total ($) | | Liz Chung | 85,000 | 170,785 | — | 255,785 | | Ilbok Lee | 110,000 | 209,821 | — | 319,821 | | Camillo Martino | 185,000 | 200,062 | — | 385,062 | | Gilbert Nathan | 105,000 | 190,303 | — | 295,303 |
2024 Director Compensation Table
| (1) Consists of the aggregate dollar amount of cash fees earned in 2024 for Board service and committee service as described in the table below. |
2024 Director Compensation Table
| Name | Board Retainer ($) | Chair Service Fees ($) | Committee Service Fees ($) | Total ($) | | Liz Chung | 75,000 | — | 10,000 | 85,000 | | Ilbok Lee | 75,000 | 20,000 | 15,000 | 110,000 | | Camillo Martino | 75,000 | 90,000 | 20,000 | 185,000 | | Gilbert Nathan | 75,000 | 25,000 | 5,000 | 105,000 |
2024 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. |
2024 Director Compensation Table
| (3) As of December 31, 2024, the number of outstanding stock options and RSU awards held by our non-employee directors who served during 2024 were as follows: |
2024 Director Compensation Table
| Name | RSUs (#) | Stock Options (#) | | Liz Chung | 65,042 | — | | Ilbok Lee | 165,909 | 119,593 | | Camillo Martino | 157,880 | 49,737 | | Gilbert Nathan | 59,858 | — |
2024 Director Compensation Table
As of December 31, 2024, 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—29,901 RSUs; Dr. Lee—122,736 RSUs; Mr. Martino—116,715 RSUs; and Mr. Nathan—20,701 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.
Key 2024 Compensation Decisions
| • | Granted annual equity awards to our named executive officers using a combination of performance-based stock units (“PSUs”) and service-based restricted stock units (“RSUs”), with our CEO receiving 67% of his grants in PSUs and 33% in RSUs and our other named executive officers receiving 50% of their grants in PSUs and 50% in RSUs. The PSUs granted in 2024 were stock price PSUs that are earned based on the performance of the price of the Company’s Common Stock measured at the end of the three-year performance period ending on January 31, 2027, requiring the stock price to meet or exceed the stock price target set by the Compensation Committee (“Stock Price PSUs”). |
Key 2024 Compensation Decisions
| • | Certified that there was no cash bonus payout for 2024. |
Key 2024 Compensation Decisions
| • | Certified that the Company did not achieve at least the threshold level for the performance goals underlying the total shareholder return PSUs (“TSR PSUs”) granted in 2022, and, accordingly, such awards were forfeited in their entirety at the end of their three-year performance period. |
Key 2024 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 43% of our Chief Executive Officer’s target total direct compensation and approximately 28% of the average target total direct compensation of our other named executive officers; and |
Key 2024 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. |
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. | | • Stock Price Performance-Based Equity Awards | Our named executive officers receive performance-based equity awards in the form of Stock Price PSUs that vest based on achieving pre-determined stock price targets at the end of a three-year performance period. | | • “Double Trigger” Change in Control Arrangements | With the exception of our PSU awards that may vest 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. | | • 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. |
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 Stock Price PSUs and a three-year vesting period for our RSUs. |
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 and the CCO 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. |
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.
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 |
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 2024, 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 2024, 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:
Role of Compensation Consultant
| • | Consulting with the Compensation Committee Chair and other members between Compensation Committee meetings on compensation matters as needed; |
Role of Compensation Consultant
| • | Reviewing the Compensation Discussion and Analysis and assisting in the drafting of the Pay Versus Performance disclosure; |
Role of Compensation Consultant
| • | Reviewing and updating the compensation peer group used to assess executive compensation; |
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; and |
Role of Compensation Consultant
| • | Assistance with the design of the Stock Price PSUs. |
Role of Compensation Consultant
In 2024, 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 2024, 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.
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 two vehicles: — Service-based RSUs with a three-year vesting period; and — Stock Price PSUs to be earned based on the 30-calendar day volume-weighted average Company stock price (“VWAP”) at the end of the three-year performance period ending |
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:
Sources of Market Data
| • | Industry — semiconductors; semiconductor equipment and electronic equipment & instruments; |
Sources of Market Data
| • | Company type — Public companies primarily headquartered in the U.S. and traded on a major U.S. stock exchange; |
Sources of Market Data
| • | Similar revenue size — 0.4x – 2.5x Magnachip’s then-current revenue of $250 million ($100 million to $625 million); |
Sources of Market Data
| • | Market capitalization — 0.25x – 4.0x Magnachip’s then-current market cap of $336 million ($84 million to $1.3 billion); |
Sources of Market Data
| • | Executive positions similar in breadth, complexity and/or scope of responsibility; and |
Sources of Market Data
| • | Competitors for executive talent. |
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 2023 for our 2024 executive compensation market assessment:
Sources of Market Data
| ACM Research | indie Semiconductor | | Alpha and Omega Semiconductor | inTEST | | Amtech Systems | Napco Security Technologies | | CEVA | nLIGHT | | Cohu | Photronics | | FARO Technologies | SkyWater Technology | | Ichor Holdings | Veeco Instruments | | Impinj | Vishay Precision Group |
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 2023 peer group, the following updates were made to establish the 2024 peer group:
Sources of Market Data
| • | Ambarella, Axcelis Technologies, Credo Technology Group Holding, Diodes, MaxLinear, and Rambus were removed due to market cap positioned above the selection criteria range; and |
Sources of Market Data
| • | ACM Research, Amtech Systems, FARO Technologies, indie Semiconductor, inTEST, Napco Security Technologies, and nLIGHT were added based on the selection criteria. |
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 2024 executive compensation process.
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 2024, the Compensation Committee increased the annual base salary of our CFO by 12.9%, from $310,000 to $350,000, effective as of March 1, 2024, to better align our CFO’s compensation with the market. In light of the prevailing business environment, the annual base salaries of our other named executive officers remained the same without an increase in 2024. Furthermore, all of our named executive officers participated in a voluntary salary deferral program for the entirety of 2024, whereby they deferred the receipt of 10% of their base salary until January 2025. The 2024 base salary for each named executive officer is set forth below.
Elements of Compensation and Weighting
Effective as of April 2025, our CEO volunteered to reduce his annual base salary by 20% (the “CEO Salary Reduction”). The CEO Salary Reduction will remain in effect until such time as the “operating income” line on the consolidated financial statements of the Company is greater than zero for any two consecutive fiscal quarters. Upon achieving such result, our CEO’s annual base salary will return to the amount immediately prior to the reduction (the “CEO Original Base Salary”), effective as of the first day of the fiscal quarter immediately following such two consecutive fiscal quarters. Upon the occurrence of a change in control (regardless of whether accompanied by termination), our CEO’s annual base salary will immediately return to the CEO Original Base Salary. Furthermore, the CEO Original Base Salary will be used for the calculation of (a) any statutory severance or pension benefits that our CEO may be entitled to receive, (b) cash severance payments that he may be entitled to receive pursuant to his employment agreement and (c) the annual cash bonus, if any. Similarly, effective as of April 2025, our CFO volunteered to reduce her annual base salary by 10% (the “CFO Salary Reduction”). The CFO Salary Reduction will remain in effect until such time as the “operating income” line on the consolidated financial statements of the Company is greater than zero for any two consecutive fiscal quarters. Upon achieving such result, our CFO’s annual base salary will return to the amount immediately prior to the reduction (the “CFO Original Base Salary”), effective as of the first day of the fiscal quarter immediately following such two consecutive fiscal quarters. Upon the occurrence of a change in control (regardless of whether accompanied by termination), our CFO’s annual base salary will immediately return to the CFO Original Base Salary. Furthermore, the CFO Original Base Salary will be used for the calculation of (a) any statutory severance or pension benefits that our CFO may be entitled to receive, (b) cash severance payments that she may be entitled to receive pursuant to her employment agreement and (c) the annual cash bonus, if any. 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 2024, there were no changes in the target bonus amounts, as expressed as a percentage of base salary. 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 2024, 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 performance. Target bonus as a percentage of base salary, the target bonus amount and the actual amount of 2024 bonus award for each of our named executive officers are set forth below.
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% | $262,500 | $0 | | Theodore Kim | 75% | $262,500 | $0 |
Elements of Compensation and Weighting
| (1) Target bonus percentages of base salary remained the same as compared to the prior year, with the difference from last year resulting from (i) the expiration of Mr. YJ Kim’s voluntary election to reduce his base salary by 10% in 2023, whereupon his base salary reverted to the amount immediately prior to such reduction and (ii) the salary increase for Ms. Park that took effect in March 2024. |
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. The general terms of the equity awards contemplated by our 2024 executive compensation program are summarized in the table below.
Elements of Compensation and Weighting
| Service-Based RSUs | Stock Price PSUs | | • Vest over three years in three equal annual installments, subject to the executive’s continued employment through each applicable vesting date. | • Stock Price PSUs to be earned based on stock price performance at the end of the three-year performance period ending on January 31, 2027. • Stock price achievement prior to the end of the performance period does not count for achieving the goal (except in the case of a change in control; see the section below entitled “Potential Payments Upon Termination or Change in Control” for details). • Stock price performance is determined at the end of the performance period based on the trailing 30-calendar day VWAP: • $14.14 = 100% vesting. • $21.21 = 200% vesting. • $28.28 = 300% vesting. • Linear interpolation for stock prices between $14.14 and $28.28. |
Elements of Compensation and Weighting
The terms and conditions of the Stock Price PSUs were adopted based on discussions with certain significant shareholders, who expressed the desire for better alignment between our named executive officers and shareholders and believed that PSUs that vest based on achieving stock price targets were the best way to achieve that goal. The initial stock price target of $14.14 is significantly higher than the stock price at the time of grant and will require execution of our business strategy in order to be earned, with the other two stock price targets of $21.21 and $28.28 requiring 50% and 100% additional stock price appreciation). The stock price in all cases is measured based on the trailing 30-calendar day average at the end of the three year performance period, and achievement prior to that time is not recognized, so that the Stock Price PSUs have a full three-year performance period (absent a change in control). The below tables summarize the RSUs and Stock Price PSUs granted to each of the named executive officers in 2024. No other equity awards were granted to our named executive officers in 2024.
Elements of Compensation and Weighting
| | | | RSUs | | | Name | Grant Date | FV of Grant Date | RSUs Granted (#) | Aggregate Fair Value on Grant Date ($) | | Young-Joon Kim | 06/01/2024 | $5.03 | 133,000 | 668,990 | | Shin Young Park | 06/01/2024 | $5.03 | 75,000 | 377,250 | | Theodore Kim | 06/01/2024 | $5.03 | 75,000 | 377,250 |
Elements of Compensation and Weighting
| | | FV of Grant Date ($) (100% Vesting case) | Stock Price PSUs | | | | Name | Grant Date | | 100% Vesting of Shares (#) | 200% Vesting of Shares (#) | 300% Vesting of Shares (#) | | Young-Joon Kim | 06/01/2024 | 1,343,010 | 267,000 | 534,000 | 801,000 | | Shin Young Park | 06/01/2024 | 377,250 | 75,000 | 150,000 | 225,000 | | Theodore Kim | 06/01/2024 | 377,250 | 75,000 | 150,000 | 225,000 |
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.
Equity Grant Timing
Equity Grant Timing During 2024, our Board and Compensation Committee did not take into account any material nonpublic information when determining the timing and terms of equity incentive awards, and we did not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. During 2024, we did not grant stock options to any of our named executive officers during any period beginning four business days before and ending one business day after the filing or furnishing of a Form 10-K, 10-Q or 8-K that discloses material nonpublic information.
Summary Compensation Table
Summary Compensation Table The following table sets forth certain information concerning the compensation earned during the years ended December 31, 2024, 2023 and 2022, of our named executive officers:
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 | 2024 | 561,700 | — | — | 2,012,000 | — | 92,913 | 407,682(5) | 3,074,295 | | | 2023 | 502,819 | 1,011 | — | 3,885,901 | — | 35,335 | 1,486,477 | 5,911,543 | | Shin Young Park | 2024 | 344,202 | — | — | 754,500 | — | 59,426 | 20,628(6) | 1,178,756 | | Chief Financial Officer | 2023 | 284,497 | 1,011 | — | 860,636 | — | 23,313 | 58,541 | 1,227,998 | | Theodore Kim | 2024 | 351,000 | — | — | 754,500 | — | 56,994 | 198,726(7) | 1,361,220 | | Chief Compliance Officer, General Counsel and Secretary | 2023 | 349,118 | 1,011 | — | 1,356,811 | — | 22,238 | 532,438 | 2,261,616 |
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.
Summary Compensation Table
| (1) The discrepancy between the amounts in the above table and the contractually agreed amounts for each named executive officer is attributable to fluctuations in the exchange rate. In addition, Ms. Park received an increase in her base salary that took effect on March 1, 2024. While Mr. YJ Kim’s base salary was not increased in 2024, he had volunteered to reduce temporarily his base salary by 10% in 2023. The temporary reduction expired at the end of 2023, and thus his base salary returned to the amount immediately prior to such reduction. |
Summary Compensation Table
| (2) No annual cash bonus was granted to any of our named executive officers in 2024. |
Summary Compensation Table
| (3) The amount reported represents the aggregate grant date fair value of RSUs and Stock Price PSUs granted to our named executive officers in 2024, 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 Stock Price PSUs and does not correspond to the actual economic value that may be received by the applicable NEO upon the vesting/settlement of the awards or any sale of the underlying shares of Common Stock. The Stock Price PSUs are reported based on the performance level associated with a 100% vesting. When calculated at the maximum performance level (at the performance level associated with a 300% vesting in the case of Stock Price PSUs), the amount of the Stock Price PSUs in 2024 would be $4,029,030 for Mr. YJ Kim, $1,131,750 for Ms. Park and $1,131,750 for Mr. T. Kim. Vesting percentage for the 2022 TSR PSUs was determined by the Compensation Committee on March 1, 2025, and as a result of actual performance over the performance period, these awards were forfeited in their entirety. See the section subtitled “Compensation Discussion and Analysis—Long-Term Equity Incentives” for further information. |
Summary Compensation Table
| (4) Consists of statutory severance accrued for the years ended December 31, 2024. See the section below subtitled “Pension Benefits for the Fiscal Year Ended December 31, 2024” for a description of the statutory severance benefit. |
Summary Compensation Table
| (5) Consists of the following personal benefits paid to Mr. YJ Kim for 2024: (a) $172,635 for Mr. YJ Kim’s housing lease; (b) $8,268 for reimbursement of tuition expenses for Mr. YJ Kim’s child; (c) $88,055 for health insurance premiums; (d) $8,089 for accident insurance and business travel insurance premiums; (e) $26,766 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) $14,745 for car and driver expense (including personal use of a car service provided by the Company); (g) $30,784 for tax consulting expense; (h) $23,797 for living expense; (i) $2,350 for meal allowance, welfare points and similar benefits; (j) -$88,491 of reimbursement (payable |
Summary Compensation Table
| by Mr. YJ Kim to the Company) of the difference between the actual U.S. tax Mr. YJ Kim paid (taking into account the use of foreign tax credit carryover) and the applicable hypothetical tax calculated for fiscal year 2024; and (k) $120,684 for reimbursement of Korean taxes paid in fiscal year 2023. |
Summary Compensation Table
| (6) Consists of the following personal benefits paid to Ms. Park for 2024: (a) $10,377 for health insurance premiums; (b) $2,844 for personal use of a car service provided by the Company; (c) $1,046 for annual health examination for spouse; (d) $804 for fitness allowance; (e) $1,239 for meal allowance; and (f) $4,318 for medical expense support, welfare points and similar benefits. |
Summary Compensation Table
| (7) Consists of the following personal benefits paid to Mr. T. Kim for 2024: (a) $78,568 for housing lease; (b) $18,209 for home leave flights; (c) $64,572 for health insurance premiums; (d) $2,025 for accident insurance and business travel insurance premiums; (e) $8,328 for reimbursement of tuition expense for Mr. T. Kim’s child; (f) $4,252 for car expense (including personal use of a car service provided by the Company); (g) $19,192 for tax consulting expense; (h) $10,060 for living expense; (i) $3,531 for meal allowance, welfare points and similar benefits; (j) -$54,660 of reimbursement (payable by Mr. T. Kim to the Company) of the difference between the actual U.S. tax Mr. T. Kim paid (taking into account the use of foreign tax credit carryover) and the applicable hypothetical tax calculated for fiscal year 2024; and (k) $44,649 for reimbursement of Korean taxes paid in fiscal year 2023. |
Grants of Plan-Based Awards Table for Fiscal Year 2024
Grants of Plan-Based Awards Table for Fiscal Year 2024 The following table sets forth information regarding grants of plan-based awards made to our named executive officers during 2024. The vesting schedule applicable to each award is set forth in the “Outstanding Equity Awards as of Fiscal Year End 2024” table. See the section subtitled “Compensation Discussion and Analysis—Long-Term Equity Incentives” for further information regarding grants made to our named executive officers during 2024.
Grants of Plan-Based Awards Table for Fiscal Year 2024
| | | Estimated Future Payouts Under Equity Incentive Plan Awards (#) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(1) | Grant Date Fair Value of Stock Awards ($)(3) | | Name | Grant Date | 100% Vesting | 200% Vesting | 300% Vesting | | | | Young-Joon Kim | 06/01/2024(1) | — | — | — | 133,000 | 668,990 | | | 06/01/2024(2) | 267,000 | 534,000 | 801,000 | — | 1,343,010 | | Shin Young Park | 06/01/2024(1) | — | — | — | 75,000 | 377,250 | | | 06/01/2024(2) | 75,000 | 150,000 | 225,000 | — | 377,250 | | Theodore Kim | 06/01/2024(1) | — | — | — | 75,000 | 377,250 | | | 06/01/2024(2) | 75,000 | 150,000 | 225,000 | — | 377,250 |
Grants of Plan-Based Awards Table for Fiscal Year 2024
| (1) Represents the RSUs granted during fiscal year 2024 to our named executive officers. Further information on the RSU awards can be found in the “Compensation Discussion & Analysis” section above. |
Grants of Plan-Based Awards Table for Fiscal Year 2024
| (2) Represents the Stock Price PSUs granted during fiscal year 2024 to our named executive officers. Vesting of the Stock Price PSUs granted with a three-year performance period ending January 31, 2027 will be based on the Company’s stock price performance as measured by the trailing 30-calendar day VWAP ending on and including January 31, 2027, subject to the satisfaction of the number of full months the executive officer provided continuous service through the applicable performance period (“Continued Service Condition”), with a vesting percentage ranging from 100% to 300%, with straight-line interpolation between $14.14 and $28.28, based on stock price achievement: 100% vesting for $14.14, 200% vesting for $21.21, and 300% vesting for $28.28. |
Grants of Plan-Based Awards Table for Fiscal Year 2024
| (3) Represents the grant date fair value of each equity-based award as determined in accordance with FASB ASC 718. For the performance-based equity awards, the amounts are reported at the target performance level based on the probable outcome of the applicable performance conditions. |
Outstanding Equity Awards at Fiscal Year End 2024
Outstanding Equity Awards at Fiscal Year End 2024 The following table sets forth all outstanding equity awards held by our named executive officers as of December 31, 2024. Please see the section below entitled “Potential Payments Upon Termination or Change in Control” for information regarding the impact of certain employment termination scenarios on outstanding equity awards.
Outstanding Equity Awards at Fiscal Year End 2024
| | Option Awards | | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | 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 |
Outstanding Equity Awards at Fiscal Year End 2024
| | | 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 | 02/28/2022 | — | — | 39,400(4) | 158,388 | | | 02/16/2023 | 50,376(5) | 202,512 | 57,092 | 229,510 | | | 06/01/2024 | 88,667(6) | 356,441 | 267,000(4) | 1,073,340 | | Shin Young Park | 02/28/2022 | — | — | 4,500(4) | 18,090 | | | 02/16/2023 | 12,508(5) | 50,282 | 11,257 | 45,253 | | | 06/01/2024 | 50,000(6) | 201,000 | 75,000(4) | 301,500 | | Theodore Kim | 02/28/2022 | — | — | 7,500(4) | 30,150 | | | 02/16/2023 | 26,423(5) | 106,220 | 12,195 | 49,024 | | | 06/01/2024 | 50,000(6) | 201,000 | 75,000(4) | 301,500 |
Outstanding Equity Awards at Fiscal Year End 2024
| (1) Represents the market value of RSUs based on our closing per share price of $4.02 on December 31, 2024, the last trading day of 2024. |
Outstanding Equity Awards at Fiscal Year End 2024
| (2) Represents unvested TSR PSUs granted on February 28, 2022 and February 16, 2023 and unvested Stock Price PSUs granted on June 1, 2024 for Mr. YJ Kim, Ms. Park and Mr. T. Kim at target performance level (i.e., at the performance level associated with a 100% vesting in the case of Stock Price PSUs). The TSR PSUs vest based on achievement of the TSR performance goal over the 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. The Stock Price PSUs vest based on achievement of the Company’s stock price performance as measured by the trailing 30-calendar day VWAP ending on and including January 31, 2027, subject to the completion of the Continued Service Condition, with a vesting percentage ranging from 100% to 300%, with straight-line interpolation between $14.14 and $28.28, based on stock price achievement: 100% vesting for $14.14, 200% vesting for $21.21, and 300% vesting for $28.28. |
Outstanding Equity Awards at Fiscal Year End 2024
| (3) Represents the market value of TSR PSUs and Stock Price PSUs at target performance level (i.e., at the performance level associated with a 100% vesting in the case of Stock Price PSUs) based on our closing per share price of $4.02 on December 31, 2024, the last trading day of 2024. |
Outstanding Equity Awards at Fiscal Year End 2024
| (4) On March 1, 2025, the Compensation Committee determined the vesting percentage of the 2022 TSR PSUs to be 0%, as the threshold performance metric for the performance period was not achieved. Accordingly, this award was forfeited in its entirety. See “Compensation Discussion and Analysis—Long-term Equity Incentives” for additional details. |
Outstanding Equity Awards at Fiscal Year End 2024
| (5) RSUs vest over three years in three equal annual installments, subject to executive’s continued employment through each applicable vesting date. Represents the third installment, scheduled to vest on December 31, 2025. |
Outstanding Equity Awards at Fiscal Year End 2024
| (6) RSUs vest over three years in three equal annual installments, subject to executive’s continued employment through each applicable vesting date. Represents the second and third installments, scheduled to vest on December 31, 2025 and December 31, 2026, respectively. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table shows information regarding the vesting of stock awards held by our named executive officers in 2024. None of our named executive officers exercised stock options during 2024.
Option Exercises and Stock Vested
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#)(1)(3) | Value Realized on Vesting ($)(2)(3) | | Young-Joon Kim | 109,042 | 438,349 | | Shin Young Park | 42,508 | 170,882 | | Theodore Kim | 59,757 | 240,223 |
Option Exercises and Stock Vested
| (1) Represents the sum of RSUs that vested on December 31, 2024. |
Option Exercises and Stock Vested
| (2) 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. |
Option Exercises and Stock Vested
| (3) 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: |
Option Exercises and Stock Vested
| | Stock Awards | | | Name | Number of Shares Withheld (#) | Value of Shares Withheld ($) | | Young-Joon Kim | 38,166 | 153,427 | | Shin Young Park | 20,787 | 83,564 | | Theodore Kim | 20,916 | 84,082 |
Pension Benefits for the Fiscal Year Ended December 31, 2024
Pension Benefits for the Fiscal Year Ended December 31, 2024 In addition to the severance benefits described above, pursuant to the Employee Retirement Benefit Security Act of Korea, certain executive officers residing in Korea with one or more years of service are entitled to severance benefits upon the termination of their employment for any reason. The base statutory severance accrues at the rate of approximately one month of base salary per year of service and is calculated on a monthly basis based upon the executive’s salary for the prior three-month period. Accordingly, if the named executive officer’s employment with the Company terminated on the last day of our fiscal year ended December 31, 2024, they would have been entitled to the statutory severance payments described below. The accumulated amounts under the statutory severance scheme are paid in a lump sum upon the executive’s separation. Assuming no change in the applicable law, each of these executives will continue to accrue additional statutory severance benefits at the rate described above until his or her service with us terminates.
Pension Benefits for the Fiscal Year Ended December 31, 2024
| Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($)(1) | Payments During the Last Fiscal Year ($) | | Young Joon Kim | Statutory Severance | 12 | 534,279 | — | | Shin Young Park | Statutory Severance | 6 | 171,702 | — | | Theodore Kim | Statutory Severance | 12 | 321,941 | — |
Pension Benefits for the Fiscal Year Ended December 31, 2024
| (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. |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation We do not maintain any nonqualified deferred compensation plans for our named executive officers.
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).
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. |
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 2024 benefits. |
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. |
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. |
CEO Pay Ratio
CEO Pay Ratio For the 2024 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 38.03 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, 2024 (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 $3,074,295 for the 2024 fiscal year. For purposes of this disclosure, Median Annual Compensation was $80,837, and was calculated by totaling for our Median Employee all applicable elements of compensation for the 2024 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 881 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 (45), Taiwan (4), Japan (2) and Germany (1). We then measured compensation for the period beginning on January 1, 2024 and ending on December 31, 2024 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 2024) as shown in our payroll and human resources records for 2024. 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.
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 20.
Pay Versus Performance
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) | | 2024 | $3,074,295 | $1,263,203 | $1,269,988 | $692,260 | $35 | $269 | $(54,308,000) | 22.4% | | 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% |
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. |
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. |