DEF 14A of Applied Materials Inc /De
Filed Jan 28, 2026 · FY20250001193125-26-027307
Director Nominees
Director Nominees
Director Nominees
| Name and Occupation | Age | Director Since | Independent | Committees | | James R. Anderson Chief Executive Officer, Coherent Corp. | 53 | 2025 | | Strategy and Investment | | Rani Borkar President, Azure Hardware Systems and Infrastructure, Microsoft Corporation | 64 | 2020 | | Compensation Strategy and Investment | | Judy Bruner Executive Vice President, Administration and Chief Financial Officer, SanDisk Corporation (retired) | 67 | 2016 | | Audit (Chair) Governance | | Xun (Eric) Chen Executive Chairman, ParityBit Technologies, Inc. | 56 | 2015 | | Compensation Strategy and Investment | | Aart J. de Geus Executive Chair of the Board of Directors, Synopsys, Inc. | 71 | 2007 | | Strategy and Investment | | Gary E. Dickerson President and Chief Executive Officer, Applied Materials, Inc. | 68 | 2013 | | | | Thomas J. Iannotti Senior Vice President and General Manager, Enterprise Services, Hewlett-Packard Company (retired) | 69 | 2005 | | Compensation (Chair) | | Alexander A. Karsner Senior Strategist, X (parent company: Alphabet Inc.) | 58 | 2008 | | Compensation Governance | | Kevin P. March Senior Vice President, Chief Financial Officer, Texas Instruments, Incorporated (retired) | 68 | 2022 | | Audit Governance (Chair) | | Scott A. McGregor President and Chief Executive Officer, Broadcom Corporation (retired) | 69 | 2018 | | Strategy and Investment (Chair) Audit |
Director Nominees
| ii | APPLIED MATERIALS, INC. 2026 PROXY STATEMENT |
Board Practices and Composition
Board Practices and Composition Ensuring the Board is composed of directors who possess a wide variety of relevant skills, professional experience and backgrounds, bring diverse viewpoints and perspectives, and effectively represent the long-term interests of shareholders is a top priority of the Board and the Corporate Governance and Nominating Committee (the “Governance Committee”). Our Board composition reflects strong Board practices that support regular refreshment based on our board needs, evolving strategy and proactive succession planning.
Director Nominee Expertise
Director Nominee Expertise
Fiscal 2021 – Fiscal 2025 Total Shareholder Return vs. S&P 500 and Compensation Peers(1)
Fiscal 2021 – Fiscal 2025 Total Shareholder Return vs. S&P 500 and Compensation Peers(1)
Fiscal 2021 – Fiscal 2025 Total Shareholder Return vs. S&P 500 and Compensation Peers(1)
| (1) Reflects results from October 25, 2020 through October 26, 2025. Compensation peer group data reflects the average TSR for companies in Applied’s current compensation peer group approved by the HRCC in March 2025, as described on page 39. |
Key Compensation Actions
Key Compensation Actions Performance-Based Compensation Decisions. The Human Resources and Compensation Committee (“HRCC”) approved an aggressive set of performance goals for the executive officers for fiscal 2025, including challenging financial and operational targets, requiring Applied to continue growing its revenue and profitability while making capital investments to enable long-term success. Despite an ongoing challenging geopolitical environment, during fiscal 2025, Applied delivered record financial and strong operational results, meeting or exceeding many of its stretch objectives for the year, and made meaningful progress toward our long-term strategic goals that remain focused on enabling strong revenue and EPS growth. However, the Company did not meet all of its performance objectives and as a result, bonus payouts for the executive officers were, on average, slightly below target. As part of our multi-year incentive program, for the period of fiscal 2023 through fiscal 2025, the HRCC approved challenging goals for non-GAAP operating margin and relative total shareholder return. The results for this three-year performance period significantly exceeded target performance levels, resulting in above-target vesting of performance share unit (“PSU”) awards granted to our executive officers in fiscal 2023. No adjustments were made to the performance goals or to the Company’s results used to determine incentive payouts under either the annual incentive program or the multi-year incentive program. As previously disclosed, in December 2020, the HRCC approved long-term value creation awards for Mr. Dickerson and Prabu G. Raja, our President, Semiconductor Products Group. The vesting of these awards would require growth in Applied’s stock price to levels well above the Company’s all-time high up to that point. Because significant long-term value was created for shareholders, and the Company’s TSR exceeded the maximum hurdle, the awards fully vested at the end of fiscal 2025. As part of its annual review of the design and structure of the executive compensation program for the named executive officers (“NEOs”), the HRCC determined that beginning with the PSU awards for fiscal 2025, 50% of the
Primary Compensation Elements and Executive Compensation Highlights for Fiscal 2025
| Element of Pay | Structure | Highlights | | Base Salary (see page 40) | » Fixed cash compensation for performing expected day-to-day responsibilities » Reviewed annually and adjusted, as appropriate, based on scope of responsibility, performance, time in role, experience, and competitive market for executive talent | » No increase to the base salaries for NEOs for fiscal 2025, with the exception of a 15.4% increase for Mr. Deane, reflecting his promotion to Senior Vice President » Reflecting the HRCC’s belief that CEO compensation should be predominantly tied to long-term results, the committee has not increased the salary for our CEO since December 2018 | | Annual Incentive Bonus (see page 40) | » Variable cash compensation » Based on performance compared to pre-established financial, operational, strategic and individual performance objectives » Includes assessment of the Company’s progress toward sustainability goals » Financial and non-financial metrics provide a comprehensive assessment of executive performance » Performance metrics evaluated annually to maintain continued alignment with strategy and market practice » NEO annual incentives determined through a three-step performance assessment process: | » No increase in target bonus as a percentage of base salary from fiscal 2024 to fiscal 2025 for any of the NEOs, with the exception of a target increase (from 125% to 130% of base salary) for Mr. Deane, reflecting his promotion to Senior Vice President » The initial performance hurdle for fiscal 2025 was $6.25 of non-GAAP EPS, the achievement of which was required for minimum bonuses to be payable, representing solid financial performance and reflecting an uncertain macroeconomic and geopolitical environment at the start of the fiscal year. Actual non-GAAP EPS for fiscal 2025 was $9.42 » Because the initial performance hurdle was met, annual bonuses for the NEOs were based on (i) the Company’s results as compared to the objective and quantifiable business and strategic goals in the corporate scorecard and (ii) an assessment of individual performance results » Resulting payouts ranged from 88.1% to 97.5% of target for our NEOs • Corporate scorecard modifiers ranged from 0.881x to 0.975x (see corporate scorecard information on pages 42 and 43) • Individual performance modifiers were set at 1.0x for each of the NEOs (see individual performance factor details on pages 44 and 45) | | Long-Term Incentives (see page 47) | » Significant portion delivered through performance share units (PSUs), to establish rigorous long-term performance alignment » Balance of award delivered in restricted stock units (RSUs) to provide a strong tie to shareholder value and enhance retention » PSUs vest based 50% on achievement of 3-year non-GAAP economic profit goal (beginning with the FY25-FY27 performance period; previously 3-year non-GAAP operating margin) and 50% on 3-year TSR relative to the members of the S&P 500 Index » PSUs vest at end of 3-year performance period, based on achievement of performance goals; RSUs vest ratably over 3 years | » The target mix of long-term incentive awards consists of 75% PSUs and 25% RSUs for the CEO and 50% PSUs and 50% RSUs for the other NEOs » Economic profit – measured as the return on our invested capital in excess of the weighted average cost of capital – is a key measure of the management team’s ability to identify and execute profitable long-term investments » Relative TSR incentivizes management to outperform the market in any business environment |
Pay Mix
Pay Mix In fiscal 2025, a significant portion of our executives’ compensation consisted of variable compensation and long-term incentives. As illustrated below, 96% of CEO compensation for fiscal 2025 consisted of variable compensation elements, and 91% of CEO compensation was delivered in long-term incentive awards with multi-year vesting.
Pay Mix
| 1 | Represents total direct compensation for fiscal 2025, including the grant date fair value of annual long-term incentive awards. |
Summary of 2025 Total Direct Compensation
Summary of 2025 Total Direct Compensation The following table summarizes elements of annual total direct compensation for our NEOs for fiscal 2025, consisting of (1) base salary received during the year, (2) actual annual incentive bonus payout and (3) long-term incentive awards (the grant date fair value of stock awards). This table excludes amounts not considered by the HRCC to be annual total direct compensation, such as certain other amounts required by the SEC to be reported in the “All Other Compensation” column in the Summary Compensation Table (see page 55 of this Proxy Statement).
Summary of 2025 Total Direct Compensation
| Name and Principal Position | Salary ($) | Annual Incentive Bonus ($) | Annual Long-Term Incentive Award ($) | Total ($) | | Gary E. Dickerson President and Chief Executive Officer | 1,030,000 | 1,506,375 | 26,944,995 | 29,481,370 | | Brice Hill Senior Vice President, Chief Financial Officer and Global Information Services | 750,000 | 987,188 | 6,730,519 | 8,467,707 | | Prabu G. Raja President, Semiconductor Products Group | 800,000 | 1,053,000 | 7,584,138 | 9,437,138 | | Timothy M. Deane Senior Vice President, Applied Global Services | 734,616 | 859,219 | 4,771,545 | 6,365,380 | | Omkaram Nalamasu Senior Vice President, Chief Technology Officer | 665,000 | 758,100 | 4,570,802 | 5,993,902 |
Recent Progress
Recent Progress To better enable Applied to meet its long-term impact goals, we establish a set of interim objectives each fiscal year. As described in more detail on page 41, the Company’s level of achievement of these objectives is included in the annual corporate scorecard, which informs bonus payouts for our executive officers. Below are highlights from our most-recently published Impact Report, as well as other recent updates:
PROPOSAL 1 – Election of Directors
PROPOSAL 1 – Election of Directors
Nominees
Nominees Applied’s Board of Directors is elected each year at the Annual Meeting of Shareholders. Applied currently has ten directors. Upon the recommendation of the Governance Committee, the Board has nominated the ten individuals listed below for election at the Annual Meeting, each of whom currently serves as a director of Applied. These nominees bring a wide variety of relevant skills, professional experience and backgrounds, as well as diverse viewpoints and perspectives to represent the long-term interests of shareholders and to fulfill the leadership and oversight responsibilities of the Board. If any nominee listed below becomes unable to stand for election at the Annual Meeting, the persons named as proxies may vote for any person designated by the Board to replace the nominee. Alternatively, the proxies may vote for the remaining nominees and leave a vacancy that the Board may fill later, or the Board may reduce the authorized number of directors. As of the date of this Proxy Statement, the Board is not aware of any nominee who is unable or will decline to serve as a director. Each director elected at the Annual Meeting will serve until Applied’s 2027 Annual Meeting of Shareholders or until they are succeeded by another qualified director who has been elected, or, if earlier, until their death, resignation, or removal.
Nominees
| | The Board recommends that you vote FOR each of the following director nominees |
Nominees
| | James R. Anderson Chief Executive Officer, Coherent Corp. Mr. Anderson brings over 25 years of experience in the technology and semiconductor industries and a strong track record in innovation-driven businesses. He has served as the Chief Executive Officer and a member of the Board of Directors of Coherent Corp., a global leader in photonics for the datacenter, communications and industrial markets, since June 2024. Previously, Mr. Anderson served as President and Chief Executive Officer of Lattice Semiconductor Corporation (“Lattice”), a developer of programmable logic semiconductor products and system solutions, from September 2018 to 2024. Prior to joining Lattice, he was Senior Vice President and General Manager of the Computing and Graphics Business Group at Advanced Micro Devices, Inc. (“AMD”). Earlier in his career, Mr. Anderson held various leadership roles across general management, engineering, sales, marketing, and corporate strategy at companies including Intel, Broadcom (formerly Avago Technologies), and LSI Corporation. Key skills and qualifications Industry and Technology; Strategy and Innovation; Service, Operations and Manufacturing: Mr. Anderson has deep experience and operational expertise across the semiconductor and technology industries, with a track record of driving growth, innovation, and strategic transformation. As Chief Executive Officer of Lattice, Mr. Anderson was responsible for driving Lattice’s corporate strategy, strengthening its product roadmap and achieving record operating profits and gross margins. Mr. Anderson’s relevant experience also includes his tenure at AMD, where he drove strategic and operational transformation to bring disruptive new products to the market and delivered revenue growth and profitability expansion. Executive Leadership; Global Business; Financial and Accounting; Risk Management: Mr. Anderson has held various executive and leadership positions where he drove transformative change and led companies through periods of expansion, including his roles as the CEO of Coherent, and prior to that, as President and CEO of Lattice. Mr. Anderson also served as Senior Vice President and General Manager of Networking Solutions Group at LSI, where he oversaw two product divisions and managed employees across multiple sites in the U.S., China, India and Europe. As a seasoned executive, Mr. Anderson has extensive experience in accounting, finance, and risk management. | | INDEPENDENT Age: 53 Director Since: 2025 Board Committees • Strategy and Investment Other Current Public Company Directorships • Coherent Corp. Former Public Company Directorships (within last five years) • Entegris,Inc. • Lattice Semiconductor Corporation • Sierra Wireless, Inc. (acquired by Semtech Corporation in January 2023) Other Directorships and Memberships • Board member of: Americas Executive Board for the MIT Sloan School of Management and U.S.- Japan Business Council | |
Nominees
| | Rani Borkar President, Azure Hardware Systems and Infrastructure, Microsoft Corporation Ms. Borkar brings to our Board extensive semiconductor industry experience in technology, strategy and innovation, and global business operations and services. Ms. Borkar has served as President, Azure Hardware Systems and Infrastructure (“Azure”), at Microsoft Corporation, a global technology provider, since October 2025. She also served in various leadership roles in the Azure and Cloud Capacity, Supply Chain and Provisioning businesses since joining Microsoft in 2017. Prior to Microsoft, Ms. Borkar was Vice President, OpenPOWER Development at IBM Corporation and worked at Intel Corporation for 27 years, most recently as Intel’s Corporate Vice President and General Manager, Product Development Group. Key skills and qualifications Industry and Technology: Ms. Borkar has gained over 30 years of experience in our industry and related technologies. This experience includes her current leadership role at Microsoft Azure and prior roles at IBM and Intel. Ms. Borkar also serves as a board member of the Global Semiconductor Alliance, a leading semiconductor and technology industry organization which strives to establish a profitable and sustainable semiconductor ecosystem. Strategy and Innovation; Executive Leadership; Growth and Emerging Technologies; Global Business: Each role in Ms. Borkar’s career has featured increased responsibility and accountability for strategic planning and oversight in a broad range of global, high-growth businesses. As the head of Azure Hardware Systems and Infrastructure, she leads organizations that architect, invent, and sustain the silicon, platforms, and systems that power Azure. She is responsible for the vision, strategy, and architecture of silicon development as well as global capacity deployment for Microsoft’s cloud data center infrastructure. Ms. Borkar’s other relevant experience includes her role as Corporate Vice President at Intel, leading Intel’s silicon product development strategy while managing a large and diverse global engineering organization. Service, Operations and Manufacturing: Under Ms. Borkar’s leadership in her current role, Microsoft’s engineers focus on developing technologies to drive end-to-end business value for Azure’s products and solutions. Her experience with and understanding of service management and service offerings for technology companies, manufacturing operations and other operational processes provide important insights to our Board. | | INDEPENDENT Age: 64 Director Since: 2020 Board Committees • Human Resources and Compensation • Strategy and Investment Other Current Public Company Directorships • None Former Public Company Directorships (within last five years) • None Other Directorships and Memberships • Board member, Global Semiconductor Alliance | |
Nominees
| | Judy Bruner Executive Vice President, Administration and Chief Financial Officer, SanDisk Corporation (retired) Ms. Bruner has deep financial, accounting and strategic planning expertise, as well as global operations and leadership experience, that provides valuable insights and contributions to our Board. Ms. Bruner is the former Executive Vice President, Administration and Chief Financial Officer of SanDisk Corporation, a supplier of flash storage products, a role she held from 2004 until its acquisition by Western Digital in 2016. Previously, she was Senior Vice President and Chief Financial Officer of Palm, Inc., a provider of handheld computing and communications solutions, from 1999 until 2004. Prior to Palm, Inc., Ms. Bruner held financial management positions at 3Com Corporation, Ridge Computers and Hewlett-Packard Company. Key skills and qualifications Executive Leadership; Financial and Accounting; Strategy and Innovation; Global Business: Ms. Bruner’s career has been distinguished by roles of increasing responsibility in and oversight of financial management. These roles included serving as Chief Financial Officer at SanDisk Corporation and Palm, Inc. Ms. Bruner’s experience also included setting corporate strategy and diversifying businesses into new product areas that are less cyclical and less capital intensive, while focusing on the core business. As CFO at SanDisk, Ms. Bruner was also responsible for information technology, legal, real estate and facilities. Industry and Technology: Ms. Bruner’s career has been centered in the technology sector, giving her particular insight into the challenges and opportunities of our sector and industry, as well as our end markets. Ms. Bruner’s extensive experience in the semiconductor industry at SanDisk provided an understanding of the capital intensity, business cycles, customers and engineering requirements of the semiconductor equipment business, which she brings to our Board. Risk Management; Cybersecurity: In Ms. Bruner’s role at SanDisk, she was responsible for the firm’s enterprise risk management and information technology, including cybersecurity. As a director, Ms. Bruner, together with the board committees she sits on, oversees enterprise risk management and cybersecurity at all the companies on which she currently serves as a board member, including at Rapid7, a security data and analytics solutions provider. She brings valuable insights from this experience to our Board to facilitate its oversight and considerations of these important topics. | | INDEPENDENT Age: 67 Director Since: 2016 Board Committees • Audit (Chair) • Corporate Governance and Nominating Other Current Public Company Directorships • Qorvo, Inc. • Rapid7, Inc. Former Public Company Directorships (within last five years) • Seagate Technology plc • Varian Medical Systems, Inc. | |
Nominees
| | Xun (Eric) Chen Executive Chairman, ParityBit Technologies, Inc. Dr. Chen has extensive experience establishing, working for and investing in companies in the technology sector and related industries, as well as being an advisor to technology entrepreneurs and investors. Since August 2023, Dr. Chen has been Executive Chairman of ParityBit Technologies, Inc. (“ParityBit”), a data technology company he co-founded. From 2018 to August 2023, Dr. Chen was a Managing Partner of SB Investment Advisers (“SBIA”), an investment adviser focused on investments in the technology sector. Prior to joining SBIA, Dr. Chen was the Chief Executive Officer and Co-Founder of ParityBit. He served as CEO of ParityBit since it was founded in 2015, except from 2016 until 2017, when ParityBit was a portfolio company of Team Curis Group, a group of integrated biotechnology and data technology companies and laboratories, during which time Dr. Chen served as CEO of Team Curis Group. From 2008 to 2015, Dr. Chen served as a managing director of Silver Lake, and prior to Silver Lake, he was a senior vice president and member of the executive committee of ASML Holding N.V. Dr. Chen joined ASML following its 2007 acquisition of Brion Technologies, Inc., a company he co-founded in 2002 and served as Chief Executive Officer. Prior to Brion Technologies, Dr. Chen was a senior vice president at J.P. Morgan. Key skills and qualifications Industry and Technology; Strategy and Innovation; Growth and Emerging Technologies: Dr. Chen’s career has focused on the technology sector, and he provides his expertise on our industry, technologies and end markets in the boardroom. Dr. Chen is currently Executive Chairman of ParityBit, a technology company focused on leveraging the power of Big Data, AI technologies, and privacy computing. His other relevant experiences include serving as a Managing Partner of SBIA, an investment adviser focused on investments in the technology sector, serving as a managing director at Silver Lake, a leading private investment firm focused on technology-enabled and related growth industries, and founding and serving as CEO of Brion Technologies, a firm working in computational lithography for integrated circuits in semiconductor manufacturing. Executive Leadership; Global Business: The Board values Dr. Chen’s perspective gained through his various leadership roles at firms with global operations. For example, Dr. Chen is currently the Executive Chairman, and prior to joining SBIA was the CEO and Co-Founder, of ParityBit. Dr. Chen grew ParityBit’s presence globally, including throughout the Asia Pacific Region. Prior to this, Dr. Chen worked at ASML Holding N.V., an industrial manufacturer for chipmakers in the semiconductor industry that is headquartered in The Netherlands and has over 60 locations globally. | | INDEPENDENT Age: 56 Director Since: 2015 Board Committees • Human Resources and Compensation • Strategy and Investment Other Current Public Company Directorships • None Former Public Company Directorships (within last five years) • None | |
Nominees
| | Aart J. de Geus Executive Chair of the Board of Directors, Synopsys, Inc. Dr. de Geus has extensive executive leadership experience and provides the Board his deep expertise in our industry, technology and corporate strategy. Dr. de Geus currently serves as Executive Chair of the Board of Directors of Synopsys, Inc., the leading provider of electronic design automation software, design IP and related services for semiconductor design companies. Since founding Synopsys in 1986, Dr. de Geus has held various positions at the company, including serving as Chief Executive Officer or co-Chief Executive Officer from 1994 to January 2024, Chairman of the Board from 1998 to January 2024, Senior Vice President of Engineering and Senior Vice President of Marketing. Prior to founding Synopsys, Dr. de Geus was employed by General Electric, where he was the Manager of the Advanced Computer-Aided Engineering Group. Key skills and qualifications Industry and Technology; Executive Leadership; Strategy and Innovation; Global Business; Risk Management: As the leading founder of Synopsys, Dr. de Geus has grown Synopsys for over three and a half decades and has held senior roles in engineering and marketing before becoming Chief Executive Officer and subsequently Executive Chair of the Board. He has been involved in all aspects of executive leadership at Synopsys, including determining corporate strategy, overseeing enterprise risk management, closing well over a hundred strategic acquisitions and transactions, and expanding the operations globally. Synopsys now has offices and development centers in North America, Europe, Armenia, Israel, India, Japan, Vietnam, South Korea and China. Growth and Emerging Technologies; Government Policy and Sustainability: Dr. de Geus has expanded Synopsys from a start-up synthesis company to a global high-tech leader in electronic design automation. He has long been considered one of the world’s leading experts on logic synthesis and simulation, frequently keynotes major conferences, is a member of the National Academy of Engineering and the recipient of numerous awards, including the IEEE Robert N. Noyce Medal, the Global Semiconductor Alliance Dr. Morris Chang Exemplary Leadership Award, and the Silicon Valley Leadership Group Lifetime Achievement Award. As a longtime CEO, Dr. de Geus has experience in government policy, such as the CHIPS Act and evolving international export controls, as well as driving sustainability initiatives in the context of regulatory requirements and stakeholder input. | | INDEPENDENT Age: 71 Director Since: 2007 Board Committees: • Strategy and Investment Other Current Public Company Directorships: • Synopsys, Inc. Former Public Company Directorships (within last five years): • None Other Directorships and Memberships • Executive Board Member and Past Chairman, Silicon Valley Leadership Group • Board Member, Global Semiconductor Alliance • Governing Council Member, Electronic System Design Alliance | |
Nominees
| | Gary E. Dickerson President and Chief Executive Officer, Applied Materials, Inc. Mr. Dickerson has been President of Applied Materials since 2012 and Chief Executive Officer and a member of the Board of Directors since 2013. Mr. Dickerson joined Applied following its acquisition in 2011 of Varian Semiconductor Equipment Associates, Inc., a supplier of semiconductor manufacturing equipment. Mr. Dickerson had served as Chief Executive Officer and a director of Varian since 2004. Prior to joining Varian in 2004, Mr. Dickerson served 18 years at KLA-Tencor Corporation, a supplier of process control and yield management solutions for the semiconductor and related industries, where he held a variety of roles, including President and Chief Operating Officer. Mr. Dickerson started his semiconductor career in manufacturing and engineering management at General Motors’ Delco Electronics Division and AT&T Technologies, Inc. Key skills and qualifications Industry and Technology; Executive Leadership; Strategy and Innovation; Global Business; Risk Management: Mr. Dickerson has over three decades of experience in executive-level positions at large multi-national companies in the semiconductor and technology industries, including nearly two decades as a chief executive officer at Varian and Applied. Mr. Dickerson’s knowledge of our industry, technologies and end markets provides important insight and leadership to the oversight, planning and execution of our business strategy and operations. At Applied, this has resulted in the company being the world’s leading semiconductor and display equipment company with over $28 billion in annual revenues and operations in 25 countries. Growth and Emerging Technologies; Service, Sales and Operations; Government Policy and Sustainability: Throughout Mr. Dickerson’s career, he has held roles responsible for identifying and developing emerging technologies and service offerings for the semiconductor industry. This includes his first roles in manufacturing and engineering management with General Motors’ Delco Electronics Division and AT&T Technologies, 18 years at KLA-Tencor, progressing from roles in product development and general management of products, sales and services business units to his appointment as President and Chief Operating Officer, and to his leadership and contributions as Chief Executive Officer at Varian and Applied. Mr. Dickerson has government policy experience in guiding Applied through the geopolitical and regulatory environment, as well as from his past service as a board of member of the U.S.-China Business Council. Mr. Dickerson’s experience in sustainability stems from his deep involvement in developing Applied’s sustainability roadmap and championing its sustainability initiatives. Mr. Dickerson draws on these experiences to provide leadership and insight in guiding our core semiconductor business, and as we develop new technologies and services to enable significant value creation for our customers and shareholders. | | EXECUTIVE DIRECTOR Age: 68 Director Since: 2013 Board Committees • None Other Current Public Company Directorships • None Former Public Company Directorships (within last five years) • None | |
Nominees
| | Thomas J. Iannotti Senior Vice President and General Manager, Enterprise Services, Hewlett-Packard Company (retired) Mr. Iannotti serves as the Chairman of the Board of Applied. Mr. Iannotti has extensive leadership experience at global firms where he gained invaluable expertise in service management, offerings for technology companies, and operational processes. He served as Senior Vice President and General Manager, Enterprise Services, for Hewlett-Packard Company, a technology solutions provider to consumers, businesses, and institutions globally, from 2009 until his retirement in 2011. Prior to that role, Mr. Iannotti held various executive positions at Hewlett-Packard, including Senior Vice President and Managing Director, Enterprise Business Group, Americas. Mr. Iannotti also worked at Digital Equipment Corporation, a vendor of computer systems and software, and at Compaq Computer Corporation, a supplier of personal computing systems, following its acquisition of Digital Equipment Corporation. Key skills and qualifications Industry and Technology; Executive Leadership; Strategy and Innovation; Global Business: Mr. Iannotti had a distinguished three-decade career managing large, complex global businesses in the electronics and technology industries. He held numerous executive positions at Hewlett-Packard, with his final role as Senior Vice President and General Manager, Enterprise Services, responsible for driving profitable revenue growth and customer satisfaction across the globe. Mr. Iannotti also chaired the Americas Leadership Team responsible for managing cross-business group strategies and developing partnerships with key Hewlett-Packard stakeholders. His other relevant experience included working at Digital Equipment Corporation, a vendor of computer systems and software, and at Compaq Computer Corporation, a supplier of personal computing systems. Service, Operations and Manufacturing; Risk Management: While at Hewlett-Packard, Mr. Iannotti was integral in setting and executing operational and service strategies for the Enterprise Services group, which supported and provided services and products for all of the company’s offerings. Mr. Iannotti’s roles also involved oversight and management of risk, and he has served as the lead independent director of the board of directors of a large, public global services company. These experiences provide important input to our Board and are an integral part of successful planning and execution of our long-term vision, including the Board’s oversight of Applied’s enterprise risk management program. | | Chairman of the Board INDEPENDENT Age: 69 Director Since: 2005 Board Committees • Human Resources and Compensation (Chair) Other Current Public Company Directorships • Rigetti Computing, Inc. Former Public Company Directorships (within last five years) • Atento S.A. | |
Nominees
| | Alexander A. Karsner Senior Strategist, X (parent company: Alphabet Inc.) Mr. Karsner has extensive global executive leadership experience as well as deep expertise in technology innovation, private equity, public policy and regulation, corporate strategy and sustainability. He is currently a Senior Strategist at X (the Moonshot Factory), the innovation lab of Alphabet Inc., and Executive Chairman of Manifest Energy Inc., an energy technology development and investment firm he founded in 2009. Mr. Karsner is also Founder of Elemental, which innovates market-based solutions and technology for conservation and environment. Key skills and qualifications Executive Leadership; Global Business: Mr. Karsner has over 30 years of experience in executive leadership positions with numerous organizations with significant global operations, including his current role at X and public company board experience at ExxonMobil. Mr. Karsner was the Founder and Managing Director of Enercorp., a company involved in international project development, management and financing of energy infrastructure. Industry and Technology; Growth and Emerging Technologies; Strategy and Innovation: Mr. Karsner currently serves as Senior Strategist at X, which has catalyzed technologies for autonomous vehicles, drone delivery and industrial robotics. From 2016 to 2019, Mr. Karsner served as Managing Partner of Emerson Collective, an investment platform funding venture and private equity portfolios, as well as non-profit, philanthropic investments advancing education, immigration, health and the environment. As a private equity investor, venture partner and strategic advisor, Mr. Karsner’s portfolios have included some of the most innovative startups, such as Nest (AI), Tesla (mobility), Recurrent (solar), Codexis (biotech), Boom (aerospace) and Carbon (3-D printing). Government Policy and Sustainability: Mr. Karsner has extensive experience in government policy and relations, and offers our Board valuable insight into the regulatory environment. From 2006 to 2008, he served as Assistant Secretary for Energy Efficiency and Renewable Energy at the U.S. Department of Energy, responsible for multi-billion dollar federal applied science R&D programs and national labs. In this role, he helped assemble significant bipartisan coalitions to implement the Energy Policy Act and enact the Energy Independence and Security Act and the America Competes Act. Mr. Karsner was a U.S. Principal representative to the United Nations Framework Convention on Climate Change and a delegate to the bilateral U.S.-China and U.S.-India Track II dialogues on Climate Change, and is a member of the Council on Foreign Relations and the Trilateral Commission. Mr. Karsner also serves on the board of Conservation International and is a member of the boards of advisors of the Energy Futures Initiative, MIT Energy Initiative, MIT Media Lab, the Precourt Institute for Energy at Stanford University and the Polsky Center for Entrepreneurship at the University of Chicago. With these experiences, Mr. Karsner brings a valuable perspective to our Board’s oversight of sustainability, government relations and public policy engagement strategies. | | INDEPENDENT Age: 58 Director Since: 2008 Board Committees • Corporate Governance and Nominating • Human Resources and Compensation Other Current Public Company Directorships • Exxon Mobil Corporation Former Public Company Directorships (within last five years) • Broadscale Acquisition Corp. Other Directorships and Memberships • Board Member of Conservation International • Advisory Board Member of: Energy Futures Initiative; Precourt Institute for Energy, Stanford University; MIT Energy Initiative; MIT Media Lab; Polsky Center for Entrepreneurship, University of Chicago Booth School of Business | |
Nominees
| | Kevin P. March Senior Vice President, Chief Financial Officer of Texas Instruments, Incorporated (retired) Mr. March brings deep semiconductor industry experience, strong financial expertise, and executive leadership to our Board. Mr. March joined Texas Instruments Incorporated, a global semiconductor company, in 1984 and built a career of varying positions of increasing responsibility over his 33-year tenure at the company. He was appointed Controller in 2002 and was named Chief Financial Officer in 2003. Key skills and qualifications Industry and Technology; Strategy and Innovation; Service, Operations and Manufacturing; Global Business: Mr. March was a longtime executive of Texas Instruments, with extensive experience in the semiconductor industry. Mr. March held numerous roles in finance, operations and business management across corporate and business unit functions during his career at Texas Instruments. Mr. March’s leadership was instrumental in shaping Texas Instruments into a focused semiconductor company, including his role in the formation of the company’s global Analog Semiconductor segment, which became the world’s largest analog semiconductor business. Executive Leadership; Financial and Accounting; Risk Management: From 2003 to 2017, Mr. March served as Senior Vice President and Chief Financial Officer of Texas Instruments, where he led its finance organization and developed the company’s capital management strategy and was also responsible for executive management of the company’s global information technology services, procurement, logistics, facilities, and operations planning. In addition to being a member of the company’s management committee, Mr. March was a member of its strategic leadership team. At Texas Instruments, Mr. March led the company’s assessment and management of strategic, financial and operational risks, including facilitating the oversight of risk management processes by the company’s board of directors. Given the breadth and scope of its businesses and range of strategic, operational, financial and compliance risks, Mr. March’s experience at Texas Instruments positions him well to provide Applied with guidance across our risk landscape. | | INDEPENDENT Age: 68 Director Since: 2022 Board Committees: • Audit • Corporate Governance and Nominating (Chair) Other Current Public Company Directorships • None Former Public Company Directorships (within last five years) • None | |
Nominees
| | Scott A. McGregor President and Chief Executive Officer, Broadcom Corporation (retired) Mr. McGregor brings to our Board executive leadership and deep experience working in the semiconductor and technology industries over many decades. Mr. McGregor served as President and Chief Executive Officer and as a member of the board of directors of Broadcom Corporation, a world leader in wireless connectivity, broadband and networking infrastructure, from 2005 until the company was acquired by Avago Technologies Limited in 2016. Mr. McGregor joined Broadcom from Philips Semiconductors (now NXP Semiconductors), where he was President and Chief Executive Officer. He previously served in a range of senior management positions at Santa Cruz Operation Inc., Digital Equipment Corporation (now part of HP), Xerox Corporation’s Palo Alto Research Center (PARC) and Microsoft, where he was the architect and development team leader for Windows 1.0. Key skills and qualifications Industry and Technology; Executive Leadership; Global Business: Mr. McGregor was CEO of Philips Semiconductors (now NXP Semiconductors), headquartered in the Netherlands, where he oversaw one of the world’s largest semiconductor suppliers. Mr. McGregor was also President and CEO of Broadcom, where he was responsible for guiding the strategic direction of the company, business development and day-to-day operations. Growth and Emerging Technologies; Strategy and Innovation: Throughout his career, Mr. McGregor held strategic roles developing new technologies and growing businesses in new directions. Mr. McGregor started his career at Xerox PARC working on user interface design for the world’s first personal computers. He then joined Microsoft and led the team that created the first version of Microsoft Windows. After pivoting to the semiconductor industry, Mr. McGregor continued to lead through technological innovation at both Broadcom and Philips Semiconductors, expanding each company’s footprint and offerings. At Broadcom, Mr. McGregor led revenue growth from $2.4 billion to over $8 billion during his tenure as CEO. Financial and Accounting; Cybersecurity; Risk Management: As CEO of Broadcom and Philips Semiconductors for approximately 15 years, Mr. McGregor had oversight responsibility for financing activities, risk management and cybersecurity at large companies within the semiconductor industry. While serving as CEO of Broadcom, Mr. McGregor’s experience in cybersecurity included overseeing the development of networking semiconductors that are the foundation for a large part of the world’s cybersecurity hardware. As a result of these experiences, Mr. McGregor brings invaluable insights in these areas to our Board. | | INDEPENDENT Age: 69 Director Since: 2018 Board Committees: • Audit • Strategy and Investment (Chair) Other Current Public Company Directorships • Equifax, Inc. Former Public Company Directorships (within last five years) • Luminar Technologies, Inc. | |
Board Composition and Refreshment
| » | Commitment to representing the long-term interests of Applied’s shareholders. |
Board Leadership
| » | Providing direct guidance to the CEO, including advising on executing the Company’s long-term strategy |
Board Leadership
| » | Leading, along with the members of the HRCC and the other independent directors, the annual performance review of the CEO |
Equity Compensation
Equity Compensation Initial Grant. Upon initial appointment to the Board other than at an annual meeting of shareholders, a non-employee director receives a non-discretionary grant of restricted stock units with respect to a number of shares of Applied common stock with a fair market value on the date of grant equal to $240,000 (rounded down to the nearest whole share), pro-rated based on the period starting on the day of initial appointment and ending on the day of the next scheduled annual meeting of shareholders. Annual Grant. Each non-employee director elected at an annual meeting receives on that date a non-discretionary grant of restricted stock units with respect to a number of shares of Applied common stock with a fair market value on the date of grant equal to $240,000 (rounded down to the nearest whole share). A non-employee director who is initially appointed or elected to the Board on the day of an annual meeting of shareholders receives only an annual grant. Each of our non-employee directors who was re-elected at the 2025 Annual Meeting received a grant of 1,583 restricted stock units on that date. Vesting. Grants made to our non-employee directors vest in full on the earlier of March 1 of the year following the date of grant or the date of the next annual meeting, provided the non-employee director remains on the Board through the scheduled vesting date. Vesting of these grants is accelerated in full upon a non-employee director’s earlier termination of service on the Board due to disability or death, or upon a change of control of Applied if the director ceases to be a non-employee director (and does not become a member of the board of directors of any successor corporation or its parent). Non-employee directors may elect in advance to defer receipt of vested shares until their termination of service on the Board. Limit on Awards. Under our amended and restated Employee Stock Incentive Plan, grants of equity awards to any individual non-employee director may not exceed a fair market value totaling more than $400,000 in any fiscal year.
Director Compensation for Fiscal 2025
Director Compensation for Fiscal 2025
Director Compensation for Fiscal 2025
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | All Other Compensation ($)(3) | Total ($) | | James R. Anderson | 30,522 | 152,624 | | 183,146 | | Rani Borkar | 122,500 | 237,118 | — | 359,618 | | Judy Bruner | 165,357 | 237,118 | — | 402,475 | | Xun (Eric) Chen | 122,500 | 237,118 | — | 359,618 | | Aart J. de Geus | 110,000 | 237,118 | — | 347,118 | | Thomas J. Iannotti | 282,500 | 237,118 | 4,000 | 523,618 | | Alexander A. Karsner | 122,500 | 237,118 | — | 359,618 | | Kevin P. March | 144,643 | 237,118 | — | 381,761 | | Scott A. McGregor | 147,500 | 237,118 | — | 384,618 | | Yvonne McGill(4) | 118,681 | 237,118 | — | 355,799 |
Director Compensation for Fiscal 2025
| (1) Amounts shown do not reflect compensation actually received by the directors. Instead, these amounts represent the grant date fair value of stock awards granted in fiscal 2025 (consisting of 1,583 restricted stock units granted to each director, other than Mr. Anderson, on March 6, 2025, and 806 restricted stock units granted to Mr. Anderson on July 18, 2025 upon his initial appointment to the Board), as determined pursuant to FASB Accounting Standards Codification 718 (“ASC 718”). The assumptions used to calculate the value of stock awards are set forth in Note 11 of the Notes to Consolidated Financial Statements included in Applied’s Annual Report on Form 10-K for fiscal 2025 filed with the SEC on December 12, 2025. |
Director Compensation for Fiscal 2025
| (2) Each director, other than Mr. Anderson, had 1,583 restricted stock units outstanding at the end of fiscal 2025. Mr. Anderson had 806 restricted stock units outstanding at the end of fiscal 2025. In addition, Dr. Chen had 27,360 restricted stock units that had vested in previous years and for which settlement was deferred until the date of his termination of service from the Board. |
Director Compensation for Fiscal 2025
| (3) Amounts shown represent The Applied Materials Foundation’s and/or the Company’s matching contribution of the director’s donations/contributions to eligible non-profit organizations. |
Director Compensation for Fiscal 2025
| (4) Ms. McGill resigned from the Board in September 2025. |
Director Compensation for Fiscal 2025
Stock Ownership Information
Directors and Executive Officers
Directors and Executive Officers The following table shows the number of shares of our common stock beneficially owned as of December 31, 2025 by: (1) each director and director nominee, (2) each named executive officer and (3) the current directors and executive officers as a group. In general, “beneficial ownership” refers to shares that a director or executive officer had the power to vote or the power to dispose of, and shares that such individual had the right to acquire within 60 days after December 31, 2025.
Directors and Executive Officers
| | Shares Beneficially Owned | | | Name | Number(1) | Percent(2) | | Directors, not including the CEO: | | | | James R. Anderson | 806(3) | * | | Rani Borkar | 9,199(4) | * | | Judy Bruner | 34,141(5) | * | | Xun (Eric) Chen | 45,229(6) | * | | Aart J. de Geus | 111,042(7) | * | | Thomas J. Iannotti | 50,568(7) | * | | Alexander A. Karsner | 16,108(7) | * | | Kevin P. March | 5,939(8) | * | | Scott A. McGregor | 23,836(7) | * | | Named Executive Officers: | | | | Gary E. Dickerson | 1,398,872 | * | | Brice Hill | 58,062 | * | | Prabu G. Raja | 406,740(9) | * | | Timothy M. Deane | 80,037(10) | * | | Omkaram Nalamasu | 122,402 | * | | Current Directors and Executive Officers, as a Group (15 persons) | 2,405,861(11) | * |
Directors and Executive Officers
| * Less than 1% |
Directors and Executive Officers
| (1) Except as subject to applicable community property laws and as specified in the footnotes below, the persons named in the table have sole voting and investment power with respect to all of their shares of common stock. |
Directors and Executive Officers
| (2) Percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of 792,705,219 shares of common stock outstanding as of December 31, 2025, plus the number of shares of common stock that such person or group had the right to acquire within 60 days after December 31, 2025. |
Directors and Executive Officers
| (3) Consists of 806 restricted stock units that are scheduled to vest within 60 days after December 31, 2025 and which, pursuant to Mr. Anderson’s election to defer, will be converted to shares of Applied common stock and paid to him on the date of his termination of service from the Applied Board. |
Directors and Executive Officers
| (4) Consists of 7,616 shares of common stock held in a family trust for which Ms. Borkar shares voting and investment power and 1,583 restricted stock units that are scheduled to vest within 60 days after December 31, 2025. |
Directors and Executive Officers
| (5) Consists of 32,558 shares of common stock held in a family trust for which Ms. Bruner shares voting and investment power and 1,583 restricted stock units that are scheduled to vest within 60 days after December 31, 2025. |
Directors and Executive Officers
| (6) Includes 27,647 restricted stock units that have vested and which, pursuant to Dr. Chen’s election to defer, will be converted to shares of Applied common stock and paid to him on the date of his termination of service from the Applied Board and 1,583 restricted stock units that are scheduled to vest within 60 days after December 31, 2025 and which, pursuant to Dr. Chen’s election to defer, will be converted to shares of Applied common stock and paid to him on the date of his termination of service from the Applied Board. |
Directors and Executive Officers
| (7) Includes 1,583 restricted stock units that are scheduled to vest within 60 days after December 31, 2025. |
Directors and Executive Officers
| (8) Consists of 4,356 shares of common stock held in a family trust for which Mr. March shares voting and investment power and 1,583 restricted stock units that are scheduled to vest within 60 days after December 31, 2025. |
Directors and Executive Officers
| (9) Includes 337,924 shares of common stock held in a living trust for which Dr. Raja shares voting and investment power. |
Directors and Executive Officers
| (10) Includes 4,903 restricted stock units that are scheduled to vest within 60 days after December 31, 2025. |
Directors and Executive Officers
| (11) Includes (a) 18,373 restricted stock units that are scheduled to vest within 60 days after December 31, 2025 and (b) 27,547 restricted stock units that have vested and which, pursuant to Dr. Chen’s election to defer, will be converted to shares of Applied common stock and paid to Dr. Chen on the date of his termination of service from the Applied Board. |
Fiscal 2021 – Fiscal 2025 Total Shareholder Return vs. S&P 500 and Compensation Peers(1)
Fiscal 2021 – Fiscal 2025 Total Shareholder Return vs. S&P 500 and Compensation Peers(1)
Fiscal 2021 – Fiscal 2025 Total Shareholder Return vs. S&P 500 and Compensation Peers(1)
| (1) Reflects results from October 25, 2020 through October 26, 2025. Compensation peer group data reflects the average TSR for companies in Applied’s current compensation peer group approved by the HRCC in March 2025, as described on page 39. |
Primary Compensation Elements and Executive Compensation Highlights for Fiscal 2025
| Element of Pay | Structure | Highlights | | Base Salary (see page 40) | » Fixed cash compensation for performing expected day-to-day responsibilities » Reviewed annually and adjusted, as appropriate, based on scope of responsibility, performance, time in role, experience, and competitive market for executive talent | » No increase to the base salaries for NEOs for fiscal 2025, with the exception of a 15.4% increase for Mr. Deane, reflecting his promotion to Senior Vice President » Reflecting the HRCC’s belief that CEO compensation should be predominantly tied to long-term results, the committee has not increased the salary for our CEO since December 2018 | | Annual Incentive Bonus (see page 40) | » Variable cash compensation » Based on performance compared to pre-established financial, operational, strategic and individual performance objectives » Includes assessment of the Company’s progress toward sustainability goals » Financial and non-financial metrics provide a comprehensive assessment of executive performance » Performance metrics evaluated annually to maintain continued alignment with strategy and market practice » NEO annual incentives determined through a three-step performance assessment process: | » No increase in target bonus as a percentage of base salary from fiscal 2024 to fiscal 2025 for any of the NEOs, with the exception of a target increase (from 125% to 130% of base salary) for Mr. Deane, reflecting his promotion to Senior Vice President » The initial performance hurdle for fiscal 2025 was $6.25 of non-GAAP EPS, the achievement of which was required for minimum bonuses to be payable, representing solid financial performance and reflecting an uncertain macroeconomic and geopolitical environment at the start of the fiscal year. Actual non-GAAP EPS for fiscal 2025 was $9.42 » Because the initial performance hurdle was met, annual bonuses for the NEOs were based on (i) the Company’s results as compared to the objective and quantifiable business and strategic goals in the corporate scorecard and (ii) an assessment of individual performance results » Resulting payouts ranged from 88.1% to 97.5% of target for our NEOs • Corporate scorecard modifiers ranged from 0.881x to 0.975x (see corporate scorecard information on pages 42 and 43) • Individual performance modifiers were set at 1.0x for each of the NEOs (see individual performance factor details on pages 44 and 45) | | Long-Term Incentives (see page 47) | » Significant portion delivered through performance share units (PSUs), to establish rigorous long-term performance alignment » Balance of award delivered in restricted stock units (RSUs) to provide a strong tie to shareholder value and enhance retention » PSUs vest based 50% on achievement of 3-year non-GAAP economic profit goal (beginning with the FY25-FY27 performance period; previously 3-year non-GAAP operating margin) and 50% on 3-year TSR relative to the members of the S&P 500 Index » PSUs vest at end of 3-year performance period, based on achievement of performance goals; RSUs vest ratably over 3 years | » The target mix of long-term incentive awards consists of 75% PSUs and 25% RSUs for the CEO and 50% PSUs and 50% RSUs for the other NEOs » Economic profit – measured as the return on our invested capital in excess of the weighted average cost of capital – is a key measure of the management team’s ability to identify and execute profitable long-term investments » Relative TSR incentivizes management to outperform the market in any business environment |
Pay Mix
Pay Mix In fiscal 2025, a significant portion of our executives’ compensation consisted of variable compensation and long-term incentives. As illustrated below, 96% of CEO compensation for fiscal 2025 consisted of variable compensation elements, and 91% of CEO compensation was delivered in long-term incentive awards with multi-year vesting.
Pay Mix
| 1 | Represents total direct compensation for fiscal 2025, including the grant date fair value of annual long-term incentive awards. |
Summary of 2025 Total Direct Compensation
Summary of 2025 Total Direct Compensation The following table summarizes elements of annual total direct compensation for our NEOs for fiscal 2025, consisting of (1) base salary received during the year, (2) actual annual incentive bonus payout and (3) long-term incentive awards (the grant date fair value of stock awards). This table excludes amounts not considered by the HRCC to be annual total direct compensation, such as certain other amounts required by the SEC to be reported in the “All Other Compensation” column in the Summary Compensation Table (see page 55 of this Proxy Statement).
Summary of 2025 Total Direct Compensation
| Name and Principal Position | Salary ($) | Annual Incentive Bonus ($) | Annual Long-Term Incentive Award ($) | Total ($) | | Gary E. Dickerson President and Chief Executive Officer | 1,030,000 | 1,506,375 | 26,944,995 | 29,481,370 | | Brice Hill Senior Vice President, Chief Financial Officer and Global Information Services | 750,000 | 987,188 | 6,730,519 | 8,467,707 | | Prabu G. Raja President, Semiconductor Products Group | 800,000 | 1,053,000 | 7,584,138 | 9,437,138 | | Timothy M. Deane Senior Vice President, Applied Global Services | 734,616 | 859,219 | 4,771,545 | 6,365,380 | | Omkaram Nalamasu Senior Vice President, Chief Technology Officer | 665,000 | 758,100 | 4,570,802 | 5,993,902 |
Overview of Compensation Program Philosophy and Governance Framework
| » | To motivate these individuals to achieve short-term and long-term goals that enhance shareholder value; and |
Overview of Compensation Program Philosophy and Governance Framework
| • | Setting challenging performance goals for executive officers and other key employees; |
Overview of Compensation Program Philosophy and Governance Framework
| • | Providing a high proportion of total target compensation in the form of long-term incentive awards to motivate executive officers and other key employees to increase long-term value in alignment with shareholders’ interests. |
Overview of Compensation Program Philosophy and Governance Framework
The HRCC uses these principles to set appropriate base salary levels and to design and determine annual incentive bonuses and long-term incentive awards. The HRCC also considers Applied’s business strategy and objectives, external factors such as the geopolitical and economic environment, competitive practices and trends, and corporate factors, including the overall cost of the compensation program. The HRCC further considers the results of the annual advisory “say-on-pay” vote and shareholder feedback. Reflecting positive shareholder feedback, the HRCC approved an executive compensation program structure for fiscal 2025 that was generally unchanged from the fiscal 2024 program, with the exception of the shift from non-GAAP operating margin to non-GAAP economic profit for the fiscal 2025 PSU awards. At our Annual Meeting in 2025, our “say-on-pay” proposal received substantial majority (91%) support, reflecting continuing strong support for our executive compensation program. Following the Annual Meeting and throughout the remainder of 2025, we continued our extensive shareholder outreach efforts and specifically solicited feedback on our executive compensation program. A broad group of Applied management team members participated in dialogue with shareholders through a series of virtual meetings and conference calls, with active independent director participation either directly on the calls or through oversight of the shareholder engagement program. During those discussions, we continued to receive broadly positive investor feedback on the compensation program structure and design.
Compensation Program Peer Group
Compensation Program Peer Group The HRCC regularly reviews the structure and amount of compensation paid by our peer group, which consists of high-technology companies whose businesses are comparable to ours and with whom we are likely to compete for executive talent, as a reference point for evaluating our compensation program. The HRCC generally screens for companies that meet the following criteria: (1) innovative technology companies with product manufacturing, (2) companies whose revenues and market capitalization were approximately one-fourth to five times that of Applied, (3) publicly-traded companies with global operations that disclose executive compensation pursuant to SEC rules, and (4) companies that represent: (i) industry competitors, (ii) competitors for key talent, (iii) customers or suppliers, and/or (iv) comparable alternatives for shareholder investment. Data gathered on executive compensation practices across the peer group include base salary levels, bonus payouts, target and actual cash compensation, long-term incentive award values and total compensation levels. The HRCC uses this information as a reference point in informing its decision making, rather than targeting a specific percentile of the peer data for our NEOs. The executive compensation data for the peer companies is gathered from the sources described in “Role of Compensation Consultant” below. In March 2024, the HRCC conducted a review of our peer group, using the screening criteria described above. Based on this assessment, the HRCC determined to remove Motorola Solutions, Inc. and Western Digital Corporation, given their differences in size, limited peer overlap, and limited competition for talent with Applied, and otherwise not to make any other changes to the fiscal 2024 peer group. Our resulting fiscal 2025 peer group, and our relative size compared to the peer companies at the time of the HRCC’s establishment of the peer group, are set forth below.
Compensation Program Peer Group
| Fiscal 2025 Peer Group | | | Advanced Micro Devices, Inc. | KLA Corporation | | Analog Devices, Inc. | Lam Research Corporation | | Broadcom Inc. | Micron Technology, Inc. | | Cisco Systems, Inc. | NVIDIA Corporation | | Corning Incorporated | NXP Semiconductors N.V. | | Intel Corporation | QUALCOMM Incorporated | | International Business Machines Corporation | Texas Instruments Incorporated |
Applied Materials Positioning Relative to Peers(1)
In March 2025, the HRCC conducted a review of the peer group, continuing to use the screening criteria described above. Based on this assessment, the HRCC determined to leave the fiscal 2025 peer group unchanged. Each of the companies in the resulting fiscal 2026 peer group met most or all of the four screening criteria.
Target Cash Compensation
Target Cash Compensation Base salaries and bonus opportunities are designed to attract, retain, motivate and reward highly-talented executives, to provide market-competitive cash compensation opportunities, and to align pay with performance. Applied continues to focus the weighting of cash compensation more heavily toward performance-based incentives. At the beginning of each fiscal year (or at the time of an executive officer’s hire or appointment, as applicable), the HRCC determines each NEO’s target total cash compensation (salary and target bonus).
Annual Incentive Bonus Opportunities
Annual Incentive Bonus Opportunities Bonus Plan Overview. In fiscal 2025, all of our NEOs participated in the Senior Executive Bonus Plan (the “Bonus Plan”). The Bonus Plan is a shareholder-approved bonus program designed to motivate and reward achievement of Applied’s business goals, in alignment with delivering shareholder value. The annual incentive bonus for each NEO under the Bonus Plan is directly linked to Applied’s achievement of financial and market performance, operational performance and strategic objectives, in addition to individual performance. Company and individual goals are structured to incentivize management to drive strong operating performance, invest in innovation to drive future growth and create shareholder value. Our Bonus Plan is performance-based and does not include any guaranteed minimum payment levels. Determining Target Bonus Amounts. Target bonus amounts for the NEOs are expressed as a percentage of base salary. The HRCC annually reviews and approves the target bonus amount for each NEO, taking into consideration Mr. Dickerson’s recommendations regarding changes to the annual target bonus amounts for each of the NEOs other than himself. In early fiscal 2025, the HRCC determined that the target bonus amount as a percentage of base salary for Mr. Deane be increased to 130%, to reflect his promotion to Senior Vice President, and that the target bonus amounts for each other NEO remain unchanged from fiscal 2024. Similarly, with input from its independent compensation consultant, the HRCC determined not to change Mr. Dickerson’s target bonus amount from fiscal 2024. Assessing Performance and Payout. The determination of fiscal 2025 performance and annual incentive bonuses for our NEOs consisted of three key steps, as illustrated and described in more detail below. Initial Performance Hurdle. For fiscal 2025, the HRCC again chose non-GAAP EPS as the initial performance hurdle measure under the Bonus Plan. EPS, an indicator of overall Company financial performance, is a measure of profits generated on a per-share basis that are available either to reinvest in the business or to distribute to shareholders, and has a strong link to share price. Non-GAAP EPS excludes certain items from EPS determined in accordance with GAAP (see Appendix A for a reconciliation of non-GAAP EPS). We do not exclude the impact of share-based compensation expenses from our non-GAAP EPS. If Applied did not achieve the initial performance hurdle (a threshold non-GAAP EPS for the fiscal year, set at $6.25 for fiscal 2025), no bonus would be payable. If this threshold was achieved, the maximum bonus that would be payable for each NEO would be the lowest of: (a) $5 million, (b) 3x the corporate bonus pool funding modifier multiplied by that NEO’s target bonus, and (c) 3x that NEO’s target bonus. The HRCC believed that the initial hurdle was set at an appropriate level given that any bonus payouts for the NEOs would ultimately be determined based on the HRCC’s assessments of achievement of objectives on the balanced corporate scorecard and of individual NEO performance. Applied exceeded the initial performance hurdle under the Bonus Plan by delivering non-GAAP EPS of $9.42 for fiscal 2025. Balanced Corporate Scorecard. If the initial performance hurdle is achieved, the HRCC then reviews the level of achievement of pre-defined objectives on the corporate scorecard and determines the appropriate scorecard result for the fiscal year. The scorecard is designed to measure achievement of financial and non-financial objectives that are considered by the HRCC to be key drivers of the Company’s near-term financial and operational success that will create shareholder value over the longer-term. The fiscal 2025 scorecard measured company performance in five broad categories: (1) Financial and Market Performance and Execution, (2) Products and Growth, (3) Services and Subscription, (4) Customers and Markets, and (5) People and Organization. These categories align with and support the Company’s strategy of strengthening our materials engineering capabilities to enable major technology inflections for our customers and positioning Applied for sustainable growth to support long-term value creation for our shareholders. Since fiscal 2021, the corporate scorecard has included sustainability objectives, with performance measured based on Applied’s successfully making annual progress required to meet our long-term culture of inclusion and sustainability goals.
Annual Incentive Bonus Opportunities
| Scorecard Category | Weighting for CEO | Link to Company Strategy and Performance | | Financial and Market Performance and Execution | 50% | Incentivizes achievement of financial, market share and TSR goals and focuses on delivering sustainable performance that increases shareholder value Aligns with increased efficiency in operational process and quality and safety performance | | Products and Growth | 25% | Reinforces strategy of developing new and differentiated products and positioning Applied and its products for future revenue, profitability and market share growth | | Services and Subscription | 10% | Increases focus on continued profitable growth of the services business with an increasingly large portion being converted to subscriptions | | Customers and Markets | 10% | Promotes focus on enhancing customer trust by improving growth, efficiency and quality of performance at key accounts and applications | | People and Organization | 5% | Drives progress toward achieving long-term sustainability objectives and operationalizing a culture of inclusion within Applied |
Annual Incentive Bonus Opportunities
NEO Objectives and Weightings. Each NEO was assigned individualized weightings for scorecard objectives to reflect the relative impact and contributions of that NEO and their business or organizational unit to Applied’s overall performance with respect to a particular objective. The corporate scorecard objectives and weightings for each NEO are set forth in the table below. Goal Setting and Measurement. At the beginning of the fiscal year, the HRCC reviewed objectives and individual weightings proposed by management. After considering the objectives in the context of Applied’s business plan, long-term strategy, market conditions and other relevant factors, the HRCC approved the corporate scorecard and weightings for each NEO. Performance objectives were set with a score of 1.0 indicating performance that met very high expectations and with scores over 1.0 indicating extraordinary achievement. Scorecard objectives are intended to be very challenging, to incentivize our NEOs to achieve performance levels that are higher than our externally communicated financial targets. Consequently, delivering results below the 1.0 level can still represent very meaningful progress toward our long-term strategic goals. At the end of the fiscal year, scores were calculated based on actual performance against objectives and were presented to the HRCC to review, adjust and approve. The following table shows the fiscal 2025 corporate scorecard objectives, their relative weightings for each of the NEOs, the achievements based on performance against rigorous objectives and the resulting scores, as approved by the HRCC (see Appendix A for non-GAAP reconciliations). In most cases, the objectives shown in the table are representations of underlying goals – generally consisting of a multi-year performance target and/or multiple strategic objectives that management uses to evaluate the level and quality of business performance. The score assigned to each objective reflects the accomplishments achieved during the year compared to pre-established objectives and, in certain instances, the extent to which those accomplishments position Applied to achieve its pre-established long-term objectives. The HRCC approved an aggressive set of scorecard targets for the executive officers for fiscal 2025, including financial targets that required continued sustained strong performance in an uncertain external environment, equally challenging operational targets, and a focus on continued progress toward positioning the Company to achieve its long-term objectives. During fiscal 2025, Applied delivered record financial and strong operational performance and made meaningful progress toward our long-term strategic goals focused on enabling continued revenue and EPS growth. However, given the challenging nature of the targets, the Company did not fully meet some of the goals. The corporate scorecard also includes sustainability objectives to demonstrate Applied’s commitment to driving sustainability throughout our business and to provide a discrete incentive for management to execute on our sustainability strategy. While the Company’s sustainability goals are long-term in nature, the HRCC believes that it is important to annually review, measure and assess progress toward those goals. As a result, the HRCC included sustainability objectives in the annual incentive program, rather than in long-term incentive awards.
Annual Incentive Bonus Opportunities
| Objectives | Weightings | | | | Achievements | | | | | | | | | | | Financial and Market Performance and Execution | 50% | 50% | 50% | 50% | | | | Grow wafer fabrication equipment market share (measured by VLSI Research) | 10% | 10% | 10% | 10% | Estimating wafer fabrication equipment market share below target for calendar year 2025, primarily due to increased trade restrictions and an unfavorable market mix | 0.0 | | Achieve targeted talent productivity milestones, including demonstrated improvement in employee hiring, development, engagement, and productivity metrics | 5% | 5% | 5% | 5% | Met fiscal 2025 milestones for talent productivity initiatives | 1.0 | | Achieve non-GAAP gross margin targets (gross margin reported externally) and deliver key milestones for gross margin improvement initiatives | 10% | 10% | 10% | 10% | Delivered 48.8% non-GAAP gross margin, representing the highest level in 25 years, with price improvements and a richer mix of advanced systems more than offsetting cost increases | 1.5 | | Achieve non-GAAP operating margin and cash flow margin goals (operating margin, operating cash flow and free cash flow reported externally) | 10% | 10% | 10% | 10% | Achieved 30.2% non-GAAP operating margin, 28% operating cash flow margin and 20% free cash flow margin, all slightly above target for the year | 1.0 |
Annual Incentive Bonus Opportunities
| Objectives | Weightings | | | | Achievements | | | | | | | | | | | Meet operational, days inventory outstanding, quality and employee health and safety performance targets | 7.5% | 7.5% | 7.5% | 7.5% | Met some but not all key operational, cost, quality, and health and safety metrics | 0.75 | | Achieve TSR ranking target relative to select peers | 5% | 5% | 5% | 5% | Performed below target relative to peers during the fiscal year | 0.0 | | Achieve non-GAAP Economic Profit goal | 2.5% | 2.5% | 2.5% | 2.5% | Delivered non-GAAP economic profit of $4.2 billion in line with target for the year, calculated as net operating profit after tax minus the expected return on invested capital | 1.0 | | Products and Growth | 25% | 25% | 12.5% | 40% | | | | Deliver key milestones that demonstrate progress toward targeted fiscal 2028 performance for semiconductor and Integrated Materials Solutions (IMS) businesses | 20% | 20% | 10% | 10% | Met or exceeded fiscal 2025 strategic objectives, positioning Semiconductor Systems segment toward meeting or exceeding fiscal 2028 revenue, market share and profitability targets | 1.5 | | Deliver key milestones that demonstrate progress towards targeted fiscal 2028 performance for Display business | 2.5% | 2.5% | 2.5% | 5% | Met or exceeded fiscal 2025 strategic objectives, positioning Display segment toward meeting or exceeding fiscal 2028 revenue and profitability targets | 1.5 | | Deliver key milestones that demonstrate progress toward targeted fiscal 2028 performance for new and adjacent market growth | 2.5% | 2.5% | — | 25% | Achieved fiscal 2025 strategic objectives, positioning Applied toward meeting fiscal 2028 revenue and profitability targets in new and adjacent growth areas | 1.0 | | Services and Subscription | 10% | 10% | 22.5% | 5% | | | | Achieve key milestones that demonstrate progress toward targeted fiscal 2028 performance for Service business | 10% | 10% | 22.5% | 5% | Made significant progress to position Applied Global Services segment toward meeting fiscal 2028 revenue and profitability targets but fell short of ambitious fiscal 2025 strategic objectives, partly due to increased trade restrictions | 0.69 | | Customers and Markets | 10% | 10% | 10% | — | | | | Win prioritized target engagements at leading customers and accounts | 2.5% | 2.5% | 2.5% | — | Significantly exceeded development and production tool of record goals, as well as application growth goals for systems and services | 1.50 | | Enhance customer trust by achieving targeted product safety, on-time delivery and installation performance | 7.5% | 7.5% | 7.5% | — | Met product safety and quality performance targets but were below the fiscal 2025 customer escalation closure target | 0.83 | | People and Organization | 5% | 5% | 5% | 5% | | | | Demonstrate progress toward achieving a culture where all employees can realize their full potential | 2.5% | 2.5% | 2.5% | 2.5% | Made targeted progress toward meeting fiscal 2028 engagement and effectiveness objective | 1.0 | | Demonstrate progress toward achieving long-term sustainability goals aligned with our Net Zero 2040 Playbook | 2.5% | 2.5% | 2.5% | 2.5% | Made significant progress and met key milestones toward delivering on Company’s Net Zero 2040 Playbook, including execution of new virtual power purchase agreement and customer adoption of eco-advantaged products | 1.5 | | Scores are based on achievement of goals tied to objective and quantifiable metrics aligned with Company strategy | | | | | | |
Annual Incentive Bonus Opportunities
Individual Performance Factor. Each NEO’s individual performance factor (“IPF”) reflects an assessment of their individual performance and contributions. The IPF is only applied if the initial performance hurdle and at least some of the corporate scorecard objectives are achieved. The IPF modifies the initial bonus amount as determined based on achievement of corporate scorecard objectives. IPF modifiers can range from 0 to 1.5. In determining the IPF for each NEO other than Mr. Dickerson, the HRCC considered Mr. Dickerson’s recommendation, which included his assessment of the achievement of strategic, financial, operational and organizational performance goals specific to the business or organizational unit for which the NEO was responsible, as well as the NEO’s leadership skills and current and expected contributions to the business. In determining the fiscal 2025 IPF for each NEO, the HRCC took into consideration: (i) financial performance, which exceeded threshold performance on non-GAAP EPS, (ii) results on the corporate scorecard and associated goals, (iii) the leadership team’s ability to guide Applied through external challenges including the continued uncertain macroeconomic and geopolitical environment, and (iv) each executive’s capable leadership of their respective business unit or function, and in Mr. Dickerson’s case, of Applied overall. Based on this review, the HRCC determined that an IPF at target would be appropriate for fiscal 2025. In consideration of the individual accomplishments noted below, the strong results delivered by Applied overall, and the effective collaboration of the executive leadership team, the HRCC assigned an IPF of 1.0 for each NEO. The following table shows the highlights of each NEO’s performance in fiscal 2025 that the HRCC considered in determining their respective IPFs. See Appendix A for non-GAAP reconciliations.
Annual Incentive Bonus Opportunities
| Named Executive Officer | Fiscal 2025 Individual Performance Highlights | | Gary E. Dickerson | » Led Applied to its sixth consecutive year of record performance, with revenue and EPS growing at annualized rates of approximately 12% and 20% respectively during this period | | | » Guided multi-year improvements to our operations, supply chain and quality, enabling Applied to deliver our highest gross margin in 25 years | | | » Strengthened critical long-term partnerships and made strategic investments, including the EPIC Center, that enable future growth | | | » Drove the development and execution of strategy that positions Applied’s core businesses to deliver on its long-term goals, while incubating new technology and business that create significant incremental market opportunities for the Company | | | » Created new “velocity and productivity” vision and strategy to accelerate innovation and drive operational and organizational efficiencies | | Brice Hill | » Delivered annual revenue of $28.4 billion, non-GAAP EPS of $9.42 and non-GAAP gross margin of 48.8% | | | » Led 120 basis point increase in gross margin through programs focused on pricing improvement | | | » Led efficient portfolio and budget management, funding investment in inflection programs and growth initiatives in key areas, with increase in R&D investment above overall expense growth | | | » Successfully managed external investor relationships and communications while increasing quarterly dividend by 15% and returning 110% of free cash flow to shareholders | | | » Capably oversaw several key enablement functions, including Global Information Services | | Prabu G. Raja | » Delivered record Semiconductor Systems revenue of $20.8 billion, representing the sixth consecutive year of growth, and grew gross margin and operating margin, despite headwinds from increased trade restrictions and an unfavorable market mix | | | » Maintained or strengthened the Company’s market position in key inflections including leading edge foundry-logic, DRAM, advanced packaging, ICAPS, Gate-All-Around transistors, Backside Power Distribution, 4F-squared and 3D-DRAM | | | » Strengthened our product portfolio with key product and application wins that position Applied in areas of the market that will grow fastest as AI is deployed on a large scale | | | » Led the Semiconductor Products Group to deliver operational excellence with improvements in quality and strong results in on time delivery and inventory management |
Annual Incentive Bonus Opportunities
| Named Executive Officer | Fiscal 2025 Individual Performance Highlights | | Timothy M. Deane | » Delivered record Applied Global Services revenue of $6.4 billion and improved gross margin, despite lower customer fab utilization and ICAPS demand | | | » Increased year-end backlog to approximately 7.1 billion, with new or extended relationships with top customers | | | » More than two-thirds of FY25 revenue was generated from long-term subscription agreements, which maintain desired average contract length of 2.9 years | | | » Delivered operational and innovation milestones, maintained strong safety metrics and reduced total operational cost as a percent of revenue | | Omkaram Nalamasu | » Identified disruptive opportunities and made progress on development of potential future growth platforms and initiatives | | | » Continued to identify external sources of investment to support and accelerate the Company’s innovation pipeline | | | » Led the Applied Ventures group in both investing for returns and incubating promising businesses in new and adjacent markets |
Annual Incentive Bonus Opportunities
Actual Bonus Payouts. The illustration below shows the results for each of the three key steps in determining the NEOs’ fiscal 2025 annual incentive bonuses under the Bonus Plan. Reflecting our record financial performance and significant individual contributions by the NEOs, bonus payouts for our NEOs were, on average, approximately 95.1% of target bonus amounts.
Fiscal 2025 Annual Incentive Calculation
Fiscal 2025 Annual Incentive Calculation
Fiscal 2025 Annual Incentive Calculation
| | Performance Measures | | Fiscal 2025 Achievement | | Initial Performance Hurdle | Fiscal 2025 non-GAAP EPS of $6.25 | | Achieved non-GAAP EPS of $9.42 | | Corporate Scorecard | Assessment of performance against predefined financial, operational and strategic corporate goals: » Financial and Market Performance and Execution » Products and Growth » Services and Subscription » Customers and Markets » People and Organization | | Strong performance on core objectives that – in some cases – fell short of exceptionally challenging goals set for the year Scorecard results achieved in a range from 0.881 to 0.975 based on varying weighting of objectives | | Individual Performance Modifier | NEO performance against personal objectives and individual contribution to business performance | | IPF achieved at a level of 1.0 | | | | Average NEO bonus, as multiple of target: 0.951 | |
Fiscal 2025 Annual Incentive Calculation
The following table shows for each NEO: (1) the bonus-eligible base salary, (2) the target bonus expressed as a percentage of base salary, (3) the target bonus expressed as a dollar amount and (4) the actual fiscal 2025 bonus amount approved by the HRCC and paid to the NEO.
Fiscal 2025 Annual Incentive Calculation
| Named Executive Officer | (1) Base Salary ($) | (2) Target Bonus as a Percentage of Base Salary (%) | (3) Target Bonus ($) | (4) Actual Bonus ($) | | Gary E. Dickerson | 1,030,000 | 150% | 1,545,000 | 1,506,375 | | Brice Hill | 750,000 | 135% | 1,012,500 | 987,188 | | Prabu G. Raja | 800,000 | 135% | 1,080,000 | 1,053,000 | | Timothy M. Deane | 750,000 | 130% | 975,000 | 859,219 | | Omkaram Nalamasu | 665,000 | 120% | 798,000 | 758,100 |
Fiscal 2025 Annual Incentive Calculation
Rigor in Annual Bonus Program. Our process of establishing challenging financial, operational and strategic objectives under the annual bonus program has resulted in judicious payouts during a period of significant growth for the Company. The chart below shows the actual annual bonus awards to our CEO as a percentage of his target bonus opportunity and our non-GAAP EPS achievements over the last five fiscal years.
CEO Actual Annual Bonus vs. Earnings Per Share
CEO Actual Annual Bonus vs. Earnings Per Share Non-GAAP EPS is a performance target under the Bonus Plan. See Appendix A for non-GAAP reconciliations.
Long-Term Incentives
Long-Term Incentives Overview. Applied’s long-term incentive compensation program is intended to help (1) focus participants on achieving our business objectives, (2) attract, retain, motivate and reward key talent, and (3) align our executives’ interests with shareholders’ interests to maximize long-term shareholder value. Timing of Awards. The HRCC grants long-term incentive awards to our NEOs under our shareholder-approved Employee Stock Incentive Plan (the “Stock Plan”). The HRCC has not granted, nor does it intend to grant, equity awards in anticipation of the release of material, nonpublic information. Similarly, Applied has not timed, nor does it intend to time, the release of material, nonpublic information based on equity award grant dates.
Fiscal 2025 Equity Awards
Fiscal 2025 Equity Awards The HRCC believes that a meaningful portion of our NEOs’ target compensation should be in the form of long-term incentives. These awards are intended to reward performance over a multi-year period, align the interests of executives with those of shareholders, instill an ownership culture, enhance the personal stake of executive officers in the growth and success of the Company and provide an incentive for continued service at the Company. Given our shareholders’ ongoing strong support of our incentive programs, we continued our approach of making performance-based equity awards a substantial portion of the overall value of equity awards granted to our NEOs. Consistent with prior long-term awards, the fiscal 2025 long-term incentive awards for NEOs consist of two forms of equity vehicles: performance share units and restricted stock units. The target vehicle mix of the awards for the fiscal 2025 grant remained unchanged from the previous year’s grants and consisted of 75% PSUs and 25% RSUs for the CEO and 50% PSUs and 50% RSUs for the other NEOs.
Fiscal 2025 Equity Awards
| CEO LTI Vehicle Mix | All Other NEO LTI Vehicle Mix | | | |
Fiscal 2025 Equity Awards
For fiscal 2025, in December 2024, the HRCC approved the target award values, which were converted to the corresponding number of PSUs and RSUs, listed in the below table for our NEOs.
Fiscal 2025 Equity Awards
| Named Executive Officer | Target Value of Awards(1) ($) | Equivalent Target Number of PSUs(2) | Equivalent Number of RSUs(2) | | Gary E. Dickerson | 26,500,000 | 117,548 | 39,183 | | Brice Hill | 6,700,000 | 19,814 | 19,814 | | Prabu G. Raja | 7,550,000 | 22,327 | 22,327 | | Timothy M. Deane | 4,750,000 | 14,047 | 14,047 | | Omkaram Nalamasu | 4,550,000 | 13,456 | 13,456 |
Fiscal 2025 Equity Awards
| (1) Reflects target values of awards on the date of grant. These target values differ from the amounts shown in the “Stock Awards” column of the Summary Compensation Table, which represent grant date fair values determined pursuant to Accounting Standards Codification 718. |
Fiscal 2025 Equity Awards
| (2) Number of units calculated by dividing allocated portion of target value of awards by $169.08, the closing price of Applied stock on December 12, 2024, the grant date. |
Fiscal 2025 Equity Awards
Size of Fiscal 2025 Equity Awards. In determining the target award values, the HRCC considered each NEO’s award as a component of their total direct compensation. Target fiscal 2025 long-term equity awards were determined in light of each NEO’s scope of responsibility, performance, impact on results, expected future contributions to our business, compensation levels relative to other Applied officers as well as to executives in comparable positions at our peer companies, the need to attract and retain talent and business conditions. The fiscal 2025 target award values were set to provide sufficient performance-based equity incentives to align compensation with the long-term interests of our shareholders, compensate the NEOs in line with market norms for their respective roles and provide them with appropriate incentive to achieve Applied’s performance goals over a multi-year period. Performance Share Units. The PSU awards are designed to align NEO compensation – and therefore NEO decision making – with achievement of our strategic goals over the long term. The fiscal 2025 PSUs, granted in December 2024, are eligible to vest three years from the grant date based 50% on achievement of a cumulative non-GAAP economic profit goal for fiscal 2025 through fiscal 2027 and 50% on TSR relative to the S&P 500 over the performance period of the first day of fiscal 2025 through the last day of fiscal 2027. The HRCC selected the members of the S&P 500 Index as the peer set for the relative TSR metric because enough differences exist between Applied and other companies in the technology and/or semiconductor space to make identifying a comparable industry-specific peer group impractical and because the HRCC believes the S&P 500 represents an appropriate proxy for the investment alternatives available to the Company’s shareholders. The number of PSUs that will vest, if any, will be based on the achievement of threshold, target or maximum levels for each metric, as set forth below.
Fiscal 2025 Equity Awards
| | Percentage of Shares Eligible to Vest Based on | | | Achievement Level | Relative TSR Result | Economic Profit Result | | Threshold | 0% | 50% | | Target | 100% | 100% | | Maximum | 200% | 200% |
Fiscal 2025 Equity Awards
Consistent with prior performance periods, a TSR payout factor will be determined by calculating the Company’s TSR percentile rank within the S&P 500, with threshold, target and maximum levels based on Applied’s TSR ranking at the 25th, 50th and 75th percentile, respectively, of the S&P 500. The TSR calculation uses a 60- trading day trailing average stock price at the beginning and end of the performance period for measurement purposes. This approach minimizes the impact of a single beginning and ending point stock price for each performance cycle. If the threshold level is not achieved for a metric, then no shares corresponding to that metric will vest. If achievement falls between threshold and target or target and maximum levels, the portion of the award that would vest will be determined based on straight-line interpolation. In setting goals for the PSUs, the HRCC considered a number of factors, including, Applied’s historical results and relative performance, analyst expectations, then-current and expected macro-economic conditions, internal modeling of potential outcomes and competitor practices. The HRCC established goals that are aligned with Applied’s financial and strategic objectives and will require exceptional results to achieve the maximum level. Restricted Stock Units. The RSU awards are scheduled to vest ratably over three years, providing a link to shareholder value creation and maintaining retention value. Retirement Provisions. The fiscal 2025 PSU and RSU awards are subject to retirement provisions which, in the event of a qualifying retirement based on age and years of service, provide for the potential of a partial payout of the PSU awards based on actual performance at the conclusion of the three-year performance period and partial accelerated vesting of RSU awards. The retirement vesting provisions are designed to maintain engagement and focus, as well as to provide a retention incentive, for our executive officers when they approach potential retirement decisions. Starting with the fiscal 2026 PSU and RSU awards, the HRCC determined to increase the age at which executive officers become eligible for a qualifying retirement from 60 to 65, to better reflect that people are, on average, living and working longer and to avoid providing an unintended incentive for executive officers to leave Applied prior to the end of their careers.
Performance and Payout for Fiscal 2023 Performance Share Unit Awards
Performance and Payout for Fiscal 2023 Performance Share Unit Awards The PSUs granted to our NEOs in fiscal 2023 were eligible to vest after the conclusion of a three-year performance period, based on achievement of an average non-GAAP operating margin goal for fiscal 2023 through fiscal 2025 established by the HRCC in December 2022, and relative TSR percentile rank within the S&P 500 for fiscal 2023 through fiscal 2025, with equal weighting given to each metric. The number of PSUs that could vest was based on the achievement of threshold, target or maximum levels of each metric, and straight-line interpolation for achievement that fell between the levels. The threshold, target and maximum levels and actual results achieved for each metric, as well as the resulting payout factors for the fiscal 2023 PSUs, are shown below.
Performance and Payout for Fiscal 2023 Performance Share Unit Awards
| | Three-Year Performance Period | | | | | | Metric | Threshold | Target | Max | Result | Payout Factor | | Non-GAAP Operating Margin (1) | 27.0% | 29.0% | 32.0% | 29.5% | 116.67% | | Relative TSR | 25th %ile | 50th %ile | 75th %ile | 84th %ile | 200% | | Total | | | | | 158.33% |
Performance and Payout for Fiscal 2023 Performance Share Unit Awards
| (1) See Appendix A for a reconciliation of non-GAAP operating margin. |
Performance and Payout for Fiscal 2023 Performance Share Unit Awards
The actual number of fiscal 2023 PSUs earned for each NEO is shown below.
Performance and Payout for Fiscal 2023 Performance Share Unit Awards
| Named Executive Officer | Target Number of PSUs | Earned Number of PSUs | | Gary E. Dickerson | 140,578 | 222,582 | | Brice Hill | 22,859 | 36,193 | | Prabu G. Raja | 27,430 | 43,431 | | Timothy M. Deane | 12,801 | 20,268 | | Omkaram Nalamasu | 16,687 | 26,421 |
Performance and Payout for Value Creation Awards
Performance and Payout for Value Creation Awards In December 2020, after a number of months of careful deliberation on award design, the HRCC approved long-term value creation awards for Mr. Dickerson and Dr. Raja (the “Value Creation Awards”). These awards were designed to be entirely performance-based, to have a longer vesting requirement than the annual long-term incentive awards, and to only deliver value to the recipients if Applied’s stock price significantly exceeded the Company’s all-time high stock price up to that point. The awards provided an incremental incentive to deliver significant total shareholder return over a performance period from the start of fiscal 2021 through the end of fiscal 2025 (“Performance Period”) and required continued employment through the Performance Period. For purposes of the Value Creation Awards, the TSR hurdle and level of achievement were defined as Applied’s average closing stock price for any consecutive 20 trading days during the Performance Period (“Measurement Period”), plus dividends paid through the Measurement Period. The number of units that could vest was based on the achievement of TSR corresponding to each payout modifier, and straight-line interpolation for achievement that fell between the levels. The TSR hurdles, as approved by the HRCC on the grant date, are shown below.
Performance and Payout for Value Creation Awards
| Payout Modifier | TSR Hurdle | TSR % Increase(1) | | 50% | $104.40 | 36% | | 100% | $119.40 | 55% | | 150% | $129.40 | 68% | | 200% | $144.40 | 88% |
Performance and Payout for Value Creation Awards
| (1) Compared to $76.94, the 20-trading day average closing price as of December 3, 2020. |
Performance and Payout for Value Creation Awards
The maximum hurdle was met as of November 16, 2021, with an average 20-day closing price of $144.36, dividends paid of $0.92, and TSR achievement of $145.28. The Company’s TSR has remained above the maximum hurdle since November 20, 2023. Based on achievement of the maximum TSR hurdle, the HRCC approved the maximum 200% payout modifier. The actual number of Value Creation Award units earned by each of Mr. Dickerson and Dr. Raja is shown below.
Performance and Payout for Value Creation Awards
| Named Executive Officer | Target Number of Value Creation Award Units | Earned Number of Value Creation Award Units | | Gary E. Dickerson | 116,145 | 232,290 | | Prabu G. Raja | 33,769 | 67,538 |
Role of Compensation Consultant
Role of Compensation Consultant The HRCC has the authority to engage independent advisors to assist it in carrying out its responsibilities. For fiscal 2025, the HRCC engaged Semler Brossy Consulting Group (“Semler Brossy”) as its independent executive compensation consultant. Semler Brossy, who reports directly to the HRCC and not to management, is independent from Applied, has not provided any services to Applied other than to the HRCC and receives compensation from Applied only for services provided to the HRCC. The HRCC assessed the independence of Semler Brossy pursuant to SEC rules and concluded that the work of Semler Brossy for the HRCC has not raised any conflict of interest. Semler Brossy reviews and advises on all principal aspects of the executive compensation program. Its main responsibilities are as follows:
Role of Compensation Consultant
| » | Advise on alignment of pay and performance; |
Role of Compensation Consultant
| » | Review and advise on executive total compensation, including base salaries, short- and long-term incentives, and associated performance metrics and goals; |
Role of Compensation Consultant
| » | Advise on trends in executive compensation; |
Role of Compensation Consultant
| » | Provide recommendations regarding the composition of our peer group; |
Role of Compensation Consultant
| » | Analyze market compensation practices based on peer group proxy statements, compensation survey data and other publicly available data; and |
Role of Compensation Consultant
| » | Perform any special projects requested by the HRCC. |
Role of Compensation Consultant
The HRCC typically asks Semler Brossy to attend the HRCC’s meetings, including executive sessions at which management is not present. Semler Brossy communicates regularly with the HRCC Chair outside of committee meetings and also meets with management to gather information and review proposals.
Non-Qualified Deferred Compensation Plan
Non-Qualified Deferred Compensation Plan Our 2016 Deferred Compensation Plan (the “DCP”) allows our NEOs and other eligible employees to voluntarily defer on a pre-tax basis a portion of their eligible earnings. We do not provide matching or other employer contributions to any participants under the DCP. Deferrals made prior to 2016 under the DCP are credited with deemed interest and are subject to the distribution rules in place prior to the DCP amendment in 2015. Beginning in 2016, participants are permitted to notionally invest new deferrals in certain investment options available under the DCP. Additionally, for deferrals with respect to services rendered after 2015, the DCP allows in-service distributions, and distributions in the event of a qualifying separation from service, an elected future date, a qualified disability, or a change in control. See “Nonqualified Deferred Compensation” below for more information about the DCP.
Summary Compensation Table for Fiscal 2025, 2024 and 2023
Summary Compensation Table for Fiscal 2025, 2024 and 2023 The following table shows compensation information for fiscal 2025, 2024 and 2023 for our NEOs.
Summary Compensation Table for Fiscal 2025, 2024 and 2023
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3) | All Other Compensation ($) | Total ($) | | Gary E. Dickerson President and Chief Executive Officer | 2025 2024 2023 | 1,030,000 1,030,000 1,030,000 | — — — | 26,944,995 24,861,142 23,951,048 | 1,506,375 1,754,734 1,631,520 | — — — | 167,982 153,336 241,976(4) | 29,649,352 27,799,212 26,854,544 | | Brice Hill Senior Vice President, Chief Financial Officer and Global Information Services | 2025 2024 2023 | 750,000 744,616 708,846 | — — — | 6,730,519 5,851,542 5,530,849 | 987,188 1,149,947 1,019,304 | — — — | 37,614 63,641 324,136(5) | 8,505,321 7,809,746 7,583,135 | | Prabu G. Raja President, Semiconductor Products Group | 2025 2024 2023 | 800,000 792,308 740,000 | — — — | 7,584,138 6,968,612 6,636,826 | 1,053,000 1,229,580 1,091,475 | 6,268 8,265 12,409 | 19,993 19,303 18,073(6) | 9,463,399 9,018,068 8,498,783 | | Timothy M. Deane Senior Vice President, Applied Global Services | 2025 2024 2023 | 734,616 642,308 574,947 | — — — | 4,771,545 3,776,822 3,097,266 | 859,219 956,313 733,590 | — — — | 20,421 18,855 17,761(7) | 6,385,801 5,394,298 4,423,564 | | Omkaram Nalamasu Senior Vice President, Chief Technology Officer | 2025 2024 2023 | 665,000 659,616 625,385 | — — — | 4,570,802 4,255,476 4,037,503 | 758,100 866,608 742,203 | 1,654 2,944 5,200 | 20,265 14,440 3,718(8) | 6,015,821 5,799,084 5,414,009 |
Summary Compensation Table for Fiscal 2025, 2024 and 2023
| (1) Amounts shown do not reflect compensation actually received by the executive officer. Instead, the amounts reported represent the aggregate grant date fair value of target stock awards granted in the respective fiscal years, as determined pursuant to ASC 718 (but excluding the effect of estimated forfeitures for performance-based awards). For fiscal 2025, the grant date fair value of the maximum number of stock awards that may be earned by each NEO was as follows: Mr. Dickerson: $47,397,759; Mr. Hill: $10,178,056; Dr. Raja: $11,468,915; Dr. Nalamasu: $6,912,079; and Mr. Deane: $7,215,643. See “Fiscal 2025 Equity Awards” on page 47 for more information regarding the stock awards. The assumptions used to calculate the value of awards are set forth in Note 11 of the Notes to Consolidated Financial Statements included in Applied’s Annual Report on Form 10-K for fiscal 2025 filed with the SEC on December 12, 2025. |
Summary Compensation Table for Fiscal 2025, 2024 and 2023
| (2) Amounts consist of payouts earned under the Senior Executive Bonus Plan for services rendered in the respective fiscal years. |
Summary Compensation Table for Fiscal 2025, 2024 and 2023
| (3) Amounts consist of the annual earnings on each officer’s principal balance under the 2016 Deferred Compensation Plan that are deemed to be above-market or preferential earnings pursuant to SEC rules. |
Summary Compensation Table for Fiscal 2025, 2024 and 2023
| (4) Amount consists of: (a) Applied’s matching contribution of $15,750 under the tax-qualified 401(k) Plan, (b) Applied’s payment on behalf of Mr. Dickerson of $1,587 in term life insurance premiums, (c) Applied’s matching contribution of $2,500 to an eligible non-profit organization pursuant to a program under the Applied Materials, Inc. Political Action Committee, (d) a payment of $500 as reimbursement for certain eligible wellbeing related expenses under the Company’s benefits program, which benefit is available to all of the Company’s eligible U.S. employees, (e) a payment of $150 as reimbursement for home office expenses, (f) $129,198 for equipment and monitoring and maintenance services for a residential security system, and (g) $18,297 for personal security services for Mr. Dickerson. |
Summary Compensation Table for Fiscal 2025, 2024 and 2023
| (5) Amount consists of: (a) Applied’s matching contribution of $15,343 under the tax-qualified 401(k) Plan, (b) Applied’s payment on behalf of Mr. Hill of $1,575 in term life insurance premiums, (c) a payment of $500 as reimbursement for certain eligible wellbeing related expenses under the Company’s benefits program, which benefit is available to all of the Company’s eligible U.S. employees, and (d) payments totaling $20,196 for benefits to Mr. Hill to cover expenses incurred in connection with his relocation. |
Summary Compensation Table for Fiscal 2025, 2024 and 2023
| (6) Amount consists of: (a) Applied’s matching contribution of $15,906 under the tax-qualified 401(k) Plan, (b) Applied’s payment on behalf of Dr. Raja of $1,587 in term life insurance premiums, and (c) Applied’s matching contribution of $2,500 to an eligible non-profit organization pursuant to a program under the Applied Materials, Inc. Political Action Committee. |
Summary Compensation Table for Fiscal 2025, 2024 and 2023
| (7) Amount consists of: (a) Applied’s matching contribution of $16,063 under the tax-qualified 401(k) Plan, (b) Applied’s payment on behalf of Mr. Deane of $1,358 in term life insurance premiums, (c) Applied’s matching contribution of $2,500 to an eligible non-profit organization pursuant to a program under the Applied Materials, Inc. Political Action Committee, and (d) a payment of $500 as reimbursement for certain eligible wellbeing related expenses under the Company’s benefits program, which benefit is available to all of the Company’s eligible U.S. employees. |
Summary Compensation Table for Fiscal 2025, 2024 and 2023
| (8) Amount consists of: (a) Applied’s matching contribution of $15,995 under the tax-qualified 401(k) Plan, (b) Applied’s payment on behalf of Dr. Nalamasu of $1,395 in term life insurance premiums, (c) Applied’s matching contribution of $2,500 to an eligible non-profit organization pursuant to a program under the Applied Materials, Inc. Political Action Committee, and (d) a payment of $375 under Applied’s Patent Incentive Award Program. |
Grants of Plan-Based Awards for Fiscal 2025
Grants of Plan-Based Awards for Fiscal 2025 The following table shows all plan-based awards granted to the NEOs during fiscal 2025.
Grants of Plan-Based Awards for Fiscal 2025
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(3) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Gary E. Dickerson | 12/12/2024 12/12/2024 — | — — 0 | — — 1,545,000 | — — 4,635,000 | 29,387 — — | 117,548 — — | 235,096 — — | — 39,183 — | 20,452,764 6,492,231 — | | Brice Hill | 12/12/2024 12/12/2024 — | — — 0 | — — 1,012,500 | — — 3,037,500 | 4,954 — — | 19,814 — — | 39,628 — — | — 19,814 — | 3,447,537 3,282,982 — | | Prabu G. Raja | 12/12/2024 12/12/2024 — | — — 0 | — — 1,080,000 | — — 3,240,000 | 5,582 — — | 22,327 — — | 44,654 — — | — 22,327 — | 3,884,777 3,699,361 — | | Timothy M. Deane | 12/12/2024 12/12/2024 — | — — 0 | — — 975,000 | — — 2,925,000 | 3,512 — — | 14,047 — — | 28,094 — — | — 14,047 — | 2,444,098 2,327,447 — | | Omkaram Nalamasu | 12/12/2024 12/12/2024 — | — — 0 | — — 798,000 | — — 2,394,000 | 3,364 — — | 13,456 — — | 26,912 — — | — 13,456 — | 2,341,277 2,229,525 — |
Grants of Plan-Based Awards for Fiscal 2025
| (1) Amounts shown were estimated possible payouts for fiscal 2025 under the Senior Executive Bonus Plan (additional information on the annual bonus plan can be found on page 40 under “Annual Incentive Bonus Opportunities.”). These amounts were based on the individual NEO’s fiscal 2025 base salary and target bonus as a percentage of base salary. The maximum amount shown is calculated as three times the target amount for the NEO. Actual bonuses received by the NEOs for fiscal 2025 under the Senior Executive Bonus Plan are reported in the Summary Compensation Table under the column titled “Non-Equity Incentive Plan Compensation.” |
Grants of Plan-Based Awards for Fiscal 2025
| (2) Additional information on the equity awards can be found under “Fiscal 2025 Equity Awards” on page 47. |
Grants of Plan-Based Awards for Fiscal 2025
| (3) Amounts shown do not reflect compensation actually received by the NEOs. Instead, the amounts represent the aggregate grant date fair value of the awards as determined pursuant to ASC 718 (but excluding the effect of estimated forfeitures for performance-based awards). The assumptions used to calculate the awards’ value are set forth in Note 11 of the Notes to Consolidated Financial Statements included in Applied’s Annual Report on Form 10-K for fiscal 2025 filed with the SEC on December 12, 2025. |
Outstanding Equity Awards at Fiscal 2025 Year-End
Outstanding Equity Awards at Fiscal 2025 Year-End The following table shows all outstanding equity awards held by the NEOs at the end of fiscal 2025.
Outstanding Equity Awards at Fiscal 2025 Year-End
| | Stock Awards(1) | | | | | | 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 ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | Gary E. Dickerson | 12/12/2024 12/7/2023 12/12/2022 12/12/2024 12/7/2023 12/12/2022 | 39,183 25,272 15,620 — — —(3) (4) (5) | 8,963,111 5,780,970 3,573,075 — — — | — — — 117,548 113,721 140,578(6) (7) (8) | — — — 26,889,105 26,013,679 32,157,218 | | Brice Hill | 12/12/2024 12/7/2023 12/12/2022 12/12/2024 12/7/2023 12/12/2022 | 19,814 12,356 7,620 — — —(3) (4) (5) | 4,532,453 2,826,435 1,743,075 — — — | — — — 19,814 18,533 22,859(6) (7) (9) | — — — 4,532,453 4,239,424 5,228,996 | | Prabu G. Raja | 12/12/2024 12/7/2023 12/12/2022 12/12/2024 12/7/2023 12/12/2022 | 22,327 14,715 9,144 — — —(3) (4) (5) | 5,107,301 3,366,056 2,091,690 — — — | — — — 22,327 22,071 27,430(6) (7) (10) | — — — 5,107,301 5,048,741 6,274,613 | | Timothy M. Deane | 12/12/2024 12/7/2023 12/12/2022 9/8/2022 12/16/2021 12/2/2021 12/12/2024 12/7/2023 12/12/2022 | 14,047 7,975 4,267 5,332 3,409 1,494 — — —(3) (4) (5) (11) (12) (12) | 3,213,251 1,824,281 976,076 1,219,695 779,809 341,753 — — — | — — — — — — 14,047 11,962 12,801(6) (7) (13) | — — — — — — 3,213,251 2,736,308 2,928,229 | | Omkaram Nalamasu | 12/12/2024 12/7/2023 12/12/2022 12/12/2024 12/7/2023 12/12/2022 | 13,456 8,986 5,563 — — —(3) (4) (5) | 3,078,060 2,055,548 1,272,536 — — — | — — — 13,456 13,478 16,687(6) (7) (14) | — — — 3,078,060 3,083,093 3,817,151 |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (1) Stock awards consist of restricted stock units (“RSUs”) and performance share units (“PSUs”), all of which will be converted into Applied common stock on a one-to-one basis upon vesting. All future vesting of shares is subject to the NEO’s continued employment with Applied through each applicable vesting date, except that award agreements for RSUs and PSUs granted to certain of our NEOs provide for modified vesting treatment in the case of certain events such as a qualifying retirement, death, or double-trigger termination following a change in control. See “Long-Term Incentives” on page 47 for more information regarding these awards. |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (2) Market value was determined by multiplying the number of such shares by the closing price of Applied common stock of $228.75 on October 24, 2025, the last trading day of fiscal 2025, as reported on the Nasdaq Global Select Market. |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (3) One-third of the RSUs vested on December 19, 2025 and one-third are scheduled to vest on each of December 19, 2026 and December 19, 2027. |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (4) Half of the RSUs vested on December 19, 2025 and half are scheduled to vest on December 19, 2026. |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (5) The RSUs vested in full on December 19, 2025. |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (6) The PSUs are scheduled to vest on December 19, 2027, depending on the achievement of specified performance goals. The number of PSUs shown is the target amount, and the actual number of PSUs that may vest ranges from 0% to 200% of the target amount, depending on the achievement of specified performance goals. |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (7) The PSUs are scheduled to vest on December 19, 2026, depending on the achievement of specified performance goals. The number of PSUs shown is the target amount, and the actual number of PSUs that may vest ranges from 0% to 200% of the target amount, depending on the achievement of specified performance goals. |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (8) The PSUs vested on December 19, 2025. The number of PSUs shown is the target amount. On December 11, 2025, an additional 82,004 shares became eligible to vest due to achievement of performance goals related to the grant. These additional shares also vested on December 19, 2025. |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (9) The PSUs vested on December 19, 2025. The number of PSUs shown is the target amount. On December 11, 2025, an additional 13,334 shares became eligible to vest due to achievement of performance goals related to the grant. These additional shares also vested on December 19, 2025. |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (10) The PSUs vested on December 19, 2025. The number of PSUs shown is the target amount. On December 11, 2025, an additional 16,001 shares became eligible to vest due to achievement of performance goals related to the grant. These additional shares also vested on December 19, 2025. |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (11) All of the RSUs are scheduled to vest on October 1, 2026. |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (12) All of the RSUs are scheduled to vest on January 1, 2026. |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (13) The PSUs vested on December 19, 2025. The number of PSUs shown is the target amount. On December 11, 2025, an additional 7,467 shares became eligible to vest due to achievement of performance goals related to the grant. These additional shares also vested on December 19, 2025. |
Outstanding Equity Awards at Fiscal 2025 Year-End
| (14) The PSUs vested on December 19, 2025. The number of PSUs shown is the target amount. On December 11, 2025, an additional 9,734 shares became eligible to vest due to achievement of performance goals related to the grant. These additional shares also vested on December 19, 2025. |
Option Exercises and Stock Vested for Fiscal 2025
Option Exercises and Stock Vested for Fiscal 2025 The following table shows all stock awards that vested and the value realized upon vesting for each NEO during fiscal 2025.
Option Exercises and Stock Vested for Fiscal 2025
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(2) | | Gary E. Dickerson | 396,862 | 79,704,841 | | Brice Hill | 37,563 | 5,689,143 | | Prabu G. Raja | 116,623 | 23,373,600 | | Timothy M. Deane | 17,590 | 3,027,136 | | Omkaram Nalamasu | 32,665 | 5,273,438 |
Option Exercises and Stock Vested for Fiscal 2025
| (1) Of the amounts shown in this column, Applied withheld the following number of shares to cover tax withholding obligations: 196,111 shares for Mr. Dickerson; 17,595 shares for Mr. Hill; 56,281 shares for Dr. Raja; 7,868 shares for Mr. Deane; and 15,508 shares for Dr. Nalamasu. |
Option Exercises and Stock Vested for Fiscal 2025
| (2) Value realized equals the closing price of Applied common stock on the vesting date, multiplied by the number of shares that were acquired on vesting. |
Non-Qualified Deferred Compensation
Non-Qualified Deferred Compensation Applied’s 2016 Deferred Compensation Plan (the “DCP”) is a non-qualified deferred compensation plan that allows eligible employees, including executive officers, to voluntarily defer receipt of up to 40% of their base salaries and all or a portion of their eligible sales incentive and annual bonus payments, if any. Applied does not make any matching or other employer contributions to the DCP for our executive officers or other DCP participants. Beginning in 2016, deferrals under the DCP are credited with deemed investment returns, gains or losses, based upon notional investment options available under the DCP, with the rate of return equal to one or more of the notional investment options elected by a DCP participant. The notional investment options available to DCP participants include certain mutual funds and pre-constructed portfolios. Deferrals made prior to 2015 are retained as separate “rollover” accounts under the DCP. These deferrals continue to be credited with deemed interest in the sum of (a) the yield-to-maturity of five-year U.S. Treasury notes, plus (b) 1.50%. For account balances with respect to services rendered after 2015, the DCP allows in-service and future date distributions, and distributions in the event of a qualifying separation from service, a qualified disability or a change in control. Deferred amounts in the rollover accounts, plus deemed interest or earnings thereon, are generally payable on the date selected by the participants or specified prior to October 2015. A change in control would trigger the distribution of all deferred balances in the rollover accounts. Distributions are payable from the general assets of Applied or from the assets of a grantor trust (known as a rabbi trust) established by Applied for distributions made from accounts consisting of deferrals made after October 2015 and as of December 31, 2019, and their associated earnings.
Non-Qualified Deferred Compensation for Fiscal 2025
Non-Qualified Deferred Compensation for Fiscal 2025
Non-Qualified Deferred Compensation for Fiscal 2025
| Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($)(2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($)(3) | | Gary E. Dickerson | — | — | — | — | — | | Brice Hill | 107,113 | — | 164,310 | — | 1,230,751 | | Prabu G. Raja | 1,426,943 | — | 1,310,907 | — | 14,275,291 | | Timothy M. Deane | 478,157 | — | 456,867 | 70,354 | 3,618,101 | | Omkaram Nalamasu | 1,102,558 | — | 1,662,167 | 233,417 | 11,664,282 |
Non-Qualified Deferred Compensation for Fiscal 2025
| (1) Amounts in this column are included in the Salary and/or Non-Equity Incentive Plan Compensation columns of the Summary Compensation Table for fiscal 2025. |
Non-Qualified Deferred Compensation for Fiscal 2025
| (2) Drs. Raja and Nalamasu received above-market or preferential earnings of $6,268 and $1,654, respectively, on the deferrals in their rollover accounts, which amounts were included in the Summary Compensation Table under “Change in Pension Value and Nonqualified Deferred Compensation Earnings.” Messrs. Hill and Deane did not have deferral balances in their rollover accounts and therefore, did not receive above-market or preferential earnings. |
Non-Qualified Deferred Compensation for Fiscal 2025
| (3) Amounts in this column represent balances as of October 26, 2025 and include compensation reported in the Summary Compensation Table for fiscal 2025 and in the Summary Compensation Tables for prior years’ proxy statements, except for (i) the earnings on contributions that were not at above-market or preferential rates, and (ii) contributions made when the individual was not a NEO. |
Potential Payments Upon Termination or Change of Control
Potential Payments Upon Termination or Change of Control Applied does not currently have change of control agreements or arrangements with any of its NEOs. Potential Payments Upon Termination. Under Mr. Dickerson’s employment agreement described above, he would have been entitled to receive $2,832,500 (275% of his annual base salary at the end of fiscal 2025) had Applied terminated his employment without cause on October 24, 2025, the last business day of fiscal 2025. No other NEO was party to an employment agreement in effect on October 24, 2025 or otherwise entitled to receive severance payments. Qualified Retirement – Employee Stock Incentive Plan. PSU and RSU awards granted to certain of our NEOs are subject to retirement provisions which provide for partial accelerated vesting of RSU awards and a partial payout of PSU awards based on actual performance at the conclusion of the three-year performance period, in the event of a qualifying retirement. In order to qualify, an executive is required to have reached age 60 and have completed at least five years of service with Applied, at the time of his or her retirement. As of the end of fiscal 2025, each of Mr. Dickerson, Dr. Raja, Mr. Deane and Dr. Nalamasu have outstanding awards that would have met the conditions for a qualifying retirement under these provisions. The following table shows the amounts attributable to a partial accelerated vesting of RSU awards and partial payout of PSU awards if the NEOs had incurred a qualifying retirement on October 24, 2025, the last business day of fiscal 2025.
Potential Payments Upon Termination or Change of Control
| Named Executive Officer | Value of Partial RSU Vesting Acceleration and Partial PSU Payout ($)(1) | | Gary E. Dickerson | 72,036,120 | | Brice Hill | — | | Prabu G. Raja | 19,816,384 | | Timothy M. Deane | 10,861,050 | | Omkaram Nalamasu | 12,032,479 |
Potential Payments Upon Termination or Change of Control
| (1) Amount based on the number of RSUs for which vesting would have been accelerated and target number of PSUs which would have remained eligible to vest, multiplied by $228.75, the closing price of Applied common stock on October 24, 2025. |
Potential Payments Upon Termination or Change of Control
Starting with the fiscal 2026 PSU and RSU awards, the HRCC determined to increase the age at which executive officers become eligible for a qualifying retirement from 60 to 65. Change of Control – Employee Stock Incentive Plan. Our Stock Plan provides that the vesting of equity awards granted under the plan to employees, including the NEOs, will be accelerated in full upon a change of control of Applied if the successor corporation (or its parent or subsidiary) does not assume or provide a substitute for the outstanding awards. Separately, equity awards will be accelerated in full if the award holder is terminated without cause or resigns employment with Applied for good reason, in each case, within 12 months following a change of control of Applied and as defined under the Stock Plan or the applicable award agreement. This double-trigger accelerated vesting does not apply if the applicable award agreement specifically states that it will not apply or if the participant’s employment is terminated due to his or her death or disability, resignation without good reason or termination for cause. The following table shows the amounts attributable to the accelerated vesting of equity awards under the Stock Plan following a change of control in which the awards are not assumed or substituted, or within 12 months following a change of control in which the NEO is terminated without cause or resigns for good reason, in each case assuming the change of control and termination or resignation occurred on October 24, 2025, the last business day of fiscal 2025.
Potential Payments Upon Termination or Change of Control
| Named Executive Officer | Value of Vesting Acceleration ($)(1) | | Gary E. Dickerson | 103,377,158 | | Brice Hill | 23,102,835 | | Prabu G. Raja | 26,995,703 | | Timothy M. Deane | 17,232,653 | | Omkaram Nalamasu | 16,384,448 |
Potential Payments Upon Termination or Change of Control
| (1) Amount based on the number of RSUs and target number of PSUs for which vesting would have been accelerated, multiplied by $228.75, the closing price of Applied common stock on October 24, 2025. |
CEO Pay Ratio
CEO Pay Ratio In accordance with SEC rules, we are providing the ratio of the annual total compensation of our CEO, to the median of the annual total compensation of our employees (other than the CEO). The fiscal 2025 annual total compensation of our CEO, Mr. Dickerson, was $29,649,352, the fiscal 2025 annual total compensation of our median compensated employee (other than the CEO) was $89,744, and the ratio of these amounts was approximately 330 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our human resources system of record and the methodology described below. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. As permitted under the SEC rules, we are using the same median employee as was identified for purposes of our fiscal 2024 CEO pay ratio, as we believe the changes in our employee population and compensation arrangements have not significantly impacted our pay ratio disclosure. For purposes of identifying our median compensated employee for fiscal 2024, we used our global employee population as of October 27, 2024, the last day of fiscal 2024, identified based on our human resources system of record. We used total direct compensation as our consistently applied compensation measure for such population. In this context, total direct compensation means the sum of the applicable annualized base salary determined as of October 27, 2024, the annual incentive earned for service in fiscal 2024, and the approved value of the annual equity awards granted during fiscal 2024, not including off-cycle grants in the case of new hires, promotions, or similar circumstances. Given the Company’s global population, we used the foreign currency exchange rates in effect at the end of fiscal 2024 for the salary and the annual incentive. We then calculated the annual fiscal 2025 total compensation for our previously-identified median compensated employee using the same methodology used for our CEO as set forth in the Summary Compensation Table of this proxy statement.
Pay Versus Performance
Pay Versus Performance The following disclosure sets forth information concerning the compensation for our principal executive officer (“PEO”) and the average compensation for our other NEOs (“Non-PEO NEOs”), as reported in the Summary Compensation Table and with certain adjustments to reflect the “compensation actually paid” for such individuals, and certain financial performance measures, for our five most recently completed fiscal years. This disclosure has been prepared in accordance with Item 402(v) of the Exchange Act.
Pay versus Performance Table
Pay versus Performance Table
Pay versus Performance Table
| | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Fiscal Year (a) | Summary Compensation Table Total for PEO (1) (b) | Compensation Actually Paid to PEO (1)(2)(3) (c) | Average Summary Compensation Table Total for Non-PEO NEOs (1) (d) | Average Compensation Actually Paid to Non-PEO NEOs (1)(2)(4) (e) | Total Shareholder Return (5) (f) | Peer Group Total Shareholder Return (5) (g) | GAAP Net Income (millions) (h) | Non-GAAP Economic Profit (millions) (6) (i) | | 2025 | $29,649,352 | $86,971,543 | $7,592,586 | $16,250,055 | $392.09 | $313.53 | $6,998 | $4,243 | | 2024 | $27,799,212 | $86,080,922 | $7,005,299 | $15,831,603 | $316.48 | $232.14 | $7,177 | $4,263 | | 2023 | $26,854,544 | $71,918,135 | $6,479,873 | $12,381,202 | $221.11 | $142.27 | $6,856 | $4,277 | | 2022 | $20,399,972 | ($22,058,266) | $5,955,804 | $1,637,143 | $149.67 | $105.92 | $6,525 | $4,866 | | 2021 | $35,265,559 | $144,856,918 | $6,677,994 | $14,985,454 | $226.06 | $148.13 | $5,888 | $4,249 |
Pay versus Performance Table
| (1) Mr. Dickerson was our PEO for each year presented. The Non-PEO NEOs were: (i) for fiscal 2025, 2024 and 2023, Drs. Raja and Nalamasu and Messrs. Hill and Deane, (ii) for fiscal 2022, Drs. Raja and Nalamasu, Messrs. Hill and Deane, Robert J. Halliday, and Ali Salehpour, and (iii) for fiscal 2021, Drs. Raja and Nalamasu, Messrs. Halliday and Salehpour, and Daniel J. Durn. |
Pay versus Performance Table
| (2) The dollar amounts reported represent the amount of “compensation actually paid,” as calculated in accordance with SEC rules. The dollar amounts do not reflect the amounts of compensation actually earned, realized or received by our NEOs during the applicable fiscal year. In accordance with SEC rules, certain adjustments were made to the Summary Compensation Table total compensation to determine the amount of “compensation actually paid,” as shown in notes 3 and 4 to this table. |
Pay versus Performance Table
| (3) The following table shows the amounts deducted from and added to the Summary Compensation Table (“SCT”) total compensation to calculate “compensation actually paid” for Mr. Dickerson. |
Pay versus Performance Table
| Fiscal Year | SCT Total ($) | Subtract: Amounts Reported as Stock Awards in SCT ($) | Add: Year-End Fair Value of Equity Awards Granted in the Year and Unvested at Year End ($) | Add: Fair Value As of the Vesting Date of Equity Awards Granted and Vested in the Year ($) | Add: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years and Unvested at Year End ($) | Add: Change As of the Vesting Date (From End of Prior Fiscal Year) in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Subtract: Fair Value as of Prior Year-End of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions in the Year ($) | Add: Value of Dividends or other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value ($) | Compensation Actually Paid ($) | | 2025 | 29,649,352 | 26,944,995 | 54,315,267 | — | 23,868,740 | 6,083,180 | — | — | 86,971,543 | | 2024 | 27,799,212 | 24,861,142 | 38,274,775 | — | 36,063,347 | 8,804,730 | — | — | 86,080,922 | | 2023 | 26,854,544 | 23,951,048 | 34,382,124 | — | 29,015,408 | 5,617,107 | — | — | 71,918,135 | | 2022 | 20,399,972 | 17,783,334 | 11,152,105 | — | (40,108,077) | 4,281,068 | — | — | (22,058,266) | | 2021 | 35,265,559 | 31,710,469 | 67,242,440 | — | 67,802,579 | 6,256,810 | — | — | 144,856,918 |
Pay versus Performance Table
| (4) The following table shows the amounts deducted from and added to the average SCT total compensation to calculate the average “compensation actually paid” for our Non-PEO NEOs. |
Pay versus Performance Table
| Fiscal Year | SCT Total ($) | Subtract: Amounts Reported as Stock Awards in SCT ($) | Add: Year-End Fair Value of Equity Awards Granted in the Year and Unvested at Year End ($) | Add: Fair Value As of the Vesting Date of Equity Awards Granted and Vested in the Year ($) | Add: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years and Unvested at Year End ($) | Add: Change As of the Vesting Date (From End of Prior Fiscal Year) in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Subtract: Fair Value as of Prior Year-End of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions in the Year ($) | Add: Value of Dividends or other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value ($) | Compensation Actually Paid ($) | | 2025 | 7,592,586 | 5,914,251 | 10,676,546 | — | 4,049,391 | (154,216) | — | — | 16,250,055 | | 2024 | 7,005,299 | 5,213,113 | 7,590,982 | — | 4,862,165 | 1,586,270 | — | — | 15,831,603 | | 2023 | 6,479,873 | 4,825,611 | 6,605,428 | — | 3,400,246 | 721,266 | — | — | 12,381,202 | | 2022 | 5,955,804 | 4,139,424 | 2,811,599 | — | (3,525,315) | 534,479 | — | — | 1,637,143 | | 2021 | 6,677,994 | 5,370,836 | 6,775,456 | — | 7,971,327 | 1,370,968 | 2,439,455 | — | 14,985,454 |
Pay versus Performance Table
| (5) Total Shareholder Return for the Company and the Peer Group is based on an initial fixed investment of $100 beginning with the market close on October 23, 2020, the last trading day before fiscal 2021, and is calculated in accordance with SEC rules. The Peer Group TSR set forth in this table reflects the TSR for the PHLX Semiconductor Index, which we also use in the performance graph required by Item 201(e) of Regulation S-K under the Exchange Act, and included in our Annual Report on Form 10-K for the fiscal year ended October 26, 2025. |
Pay versus Performance Table
| (6) Non-GAAP Economic Profit is the financial measure that was determined to be the most important financial performance measure linking “compensation actually paid” for our NEOs to company performance for fiscal 2025 and therefore was selected as the fiscal 2025 “Company-Selected Measure” as defined in Item 402(v) of Regulation S-K under the Exchange Act. See Appendix A for a reconciliation of non-GAAP Economic Profit. This reflects the Committee’s decision to use non-GAAP Economic Profit as the financial measure for the fiscal 2025 PSUs and as one of the objectives on the fiscal 2025 bonus scorecard. |
Relationship Between “Compensation Actually Paid” and Performance Measures
Relationship Between “Compensation Actually Paid” and Performance Measures The following graphs show the relationships over our five most recently completed fiscal years of the “compensation actually paid” for our PEO and Non-PEO NEOs, as compared to our TSR, GAAP Net Income, and non-GAAP Economic Profit, as well as the relationship between our TSR and the Peer Group TSR.