DEF 14A of Cohu Inc
Filed Apr 22, 2024 · FY20230001437749-24-012637
Summary Information Regarding Our Directors
Summary Information Regarding Our Directors You are being asked to vote on the election of three (3) Class 2 director nominees. The following table provides summary information about each nominee as well as the remaining directors that are not standing for election at the 2024 annual meeting. More detailed biographical information is contained in the “Proposal No. 1: Election of Directors” section below.
Summary Information Regarding Our Directors
| Name | Age | Since | Independent (1) | Class and When Term Expires | AC | CC | NGC | Other Current Public Boards | | Andrew M. Caggia | 75 | 2014 | Yes | 2 -- 2024 | M+ | | C | | | Yon Y. Jorden | 69 | 2021 | Yes | 2 -- 2024 | M+ | | M | Alignment Healthcare, Inc., Capstone Green Energy Corp. | | Luis A. Müller | 54 | 2014 | No | 2 -- 2024 | | | | Celestica Inc. | | Other Directors Not Standing for Election in 2024 | | | | | | | | | | William E. Bendush | 75 | 2011 | Yes | 1 -- 2026 | C+ | | M | | | Steven J. Bilodeau | 65 | 2009 | Yes | 3 -- 2025 | | C | M | | | James A. Donahue | 75 | 1999 | No | 3 -- 2025 | | | | | | Andreas W. Mattes | 62 | 2022 | Yes | 3 -- 2025 | | M | | ams-OSRAM AG | | Nina L. Richardson | 65 | 2019 | Yes | 1 -- 2026 | | M | | Resideo Technologies, Inc., Silicon Laboratories Inc. |
Summary Information Regarding Our Directors
| (1) Independence is determined annually by the board of directors in accordance with the company’s corporate governance guidelines and Nasdaq rules. |
Summary Information Regarding Our Directors
| AC - Audit Committee | C - Chair | | CC - Compensation Committee | M - Member | | NGC - Nominating and Governance Committee | + - Also qualifies as an audit committee financial expert (as determined based on SEC rules) |
Executive Compensation Highlights
| Pay for Performance - Our executive compensation program is designed to pay for performance with 100% of the annual Short-Term Incentive (“STI”) program tied to company financial, strategic and operational performance metrics, and 60% of the Long-Term Incentive (“LTI”) program tied to relative total stockholder return (“TSR”) performance. | | Balance of Annual and Long-Term Incentives - Our incentive compensation programs provide a balance of annual and long-term incentives. | | Different Performance Metrics for Annual and Long-Term Incentive Programs - Our annual and long-term incentive compensation programs use different performance metrics. | | Absolute and Relative Performance Metrics - Our annual and long-term incentive compensation programs for executive officers include the use of absolute and relative performance metrics. | | Three-Year Performance Period for Our Long-Term Incentive Program - Our current long-term incentive compensation program is designed to pay for performance over a period of three years. | | Capped Amounts - Amounts that can be earned under the annual and long-term incentive compensation programs are capped. | | Compensation Recoupment/Clawback Policy - We have a policy pursuant to which incentive compensation erroneously awarded to our executive officers is subject to recoupment under certain circumstances if our financial results are restated. This policy was updated in 2023 to be compliant with the requirements of Exchange Act Rule 10D-1 and the applicable Nasdaq listing standards. | | Stock Ownership Guidelines - We have stock ownership guidelines for each of our executive officers and certain other senior executives; each of our named executive officers has met their individual ownership level under the current program or has a period of time remaining under the guidelines to do so. | | Independent Compensation Advisor - The Compensation Committee benefits from its utilization of an independent compensation advisor, retained directly by the committee, that provides no other services to the Company. | | Say-on-Pay - We annually seek a non-binding advisory stockholder vote to approve our named executive officer compensation. | | Stockholder Engagement - We engage with stockholders regularly and stockholder advisory firms on an as needed basis to obtain feedback concerning our business. |
Executive Compensation Highlights
| What We Don’t Do | | “Single-Trigger” Change in Control Provisions - Our executive change in control policy does not have “single-trigger” provisions. | | Minimum Amounts - Amounts under the annual and long-term incentive compensation programs have no guaranteed minimum and can effectively be “zero” for any performance period for unsatisfactory results. | | Option Repricing Prohibited - Our stock incentive plans prohibit option repricing without stockholder approval. | | Hedging and Pledging Prohibited - We prohibit our employees, including our executive officers and directors, from hedging or pledging any Company securities. | | Defined Benefit Pension Plans - We do not currently offer, nor do we have plans to provide, defined benefit pension arrangements for our executive officers. | | Perquisites - We provide minimal perquisites and other personal benefits to our executive officers. | | Tax Reimbursements - We do not provide any tax reimbursement or “gross-up” payments on any severance or change in control payments (including for any Section 280G excise taxes), perquisites or other personal benefits, other than immaterial COBRA reimbursements, standard relocation benefits, and tax equalization agreements related to expatriate assignments. |
Sustainability Highlights
| • | Continued our excellent employee safety record, with a 2023 global recordable incident rate of 0.39, which is 67% lower than our industry benchmark. |
Board of Directors and Committees
| Initial Appointment | RSUs with a total value of $150,000, but the total value of such grant is prorated based on the period of time between appointment as director and the next scheduled director annual equity grant date | | Annual Grants | RSUs with a total value of $150,000 |
Board of Directors and Committees
The number of RSUs granted is calculated by dividing the grant total value by the fair market value of the stock as of the date of grant. For purposes of the 2005 Plan, our Board has deemed “fair market value” as the average closing price of a share of Cohu common stock for the twenty (20) trading days prior to and excluding the relevant grant or award date. Each RSU represents a contingent right to receive one share of Cohu common stock upon vesting. Assuming continued service on the Board, the RSUs granted to non-employee directors upon their initial appointment to the Board will vest over three years, and shares are issued in three equal annual installments beginning one year after the date of grant. The annual RSU awards vest over approximately one year, and shares are issued upon the earlier to occur of the one-year anniversary of the grant date or the next annual meeting of stockholders. RSUs may be accelerated upon a change in control, as defined in the 2005 Plan. On May 10, 2023, 4,347 RSUs were awarded to each of Mses. Jorden and Richardson and Messrs. Bendush, Bilodeau, Caggia, Donahue, and Mattes. Cohu will issue to each recipient, assuming continued service as a director, shares of Cohu common stock at the end of the required RSU vesting period. Medical Benefits Mr. Donahue, who is a retired executive officer of Cohu, and his spouse receive medical benefits consisting of reimbursement of health insurance premiums and other medical costs not covered by insurance. These benefits are no longer offered to any current Cohu employees. 2023 Director Compensation The following table provides information on compensation for Cohu’s non-employee directors for fiscal year 2023.
Board of Directors and Committees
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | All Other Compensation ($) (2) | Total ($) | | William E. Bendush | 90,721 | 148,841 | - | 239,562 | | Steven J. Bilodeau (3) | 101,500 | 148,841 | - | 250,341 | | Andrew M. Caggia (3) | 80,000 | 148,841 | - | 228,841 | | James A. Donahue | 110,000 | 148,841 | 34,120 | 292,961 | | Yon Y. Jorden | 73,269 | 148,841 | - | 222,110 | | Andreas W. Mattes | 67,500 | 148,841 | - | 216,341 | | Nina L. Richardson (3) | 67,500 | 148,841 | - | 216,341 |
Board of Directors and Committees
| (1) The amounts shown do not reflect the compensation actually received by the directors. Instead, the amounts above are the grant date fair value for stock awards issued in the form of RSUs granted in fiscal year 2023 calculated in accordance with FASB ASC Topic 718. The assumptions used to calculate the grant date fair value of the stock awards are set forth in Note 6, “Employee Benefit Plans”, included in Part IV, Item 15(a) of Cohu’s Annual Report on Form 10-K for the year ended December 30, 2023, filed with the SEC. The derived grant date fair value for the stock award is recognized, for financial statement purposes, over the number of days of service required for the award to vest in full. As of December 30, 2023, Mses. Jorden and Richardson had 5,692 and 4,347 unvested RSUs outstanding, respectively, and Messrs. Bendush, Bilodeau, Caggia, Donahue each had 4,347 unvested RSUs outstanding. Mr. Mattes had 6,156 unvested RSUs outstanding. | | (2) The amount shown for Mr. Donahue is for reimbursement of health insurance premiums and other medical costs for him and his spouse not covered by insurance. | | (3) During the year ended December 30, 2023, Messrs. Bilodeau and Caggia elected to defer their cash director fees. The deferred amounts are credited in the form of DSU awards and ultimately payable in shares of Cohu common stock, if the director ceases to be a director for any reason, upon the occurrence of a change in control of Cohu or at a future date selected at the time of deferral. As of December 30, 2023, Ms. Richardson and Messrs. Bilodeau and Caggia had 11,992, 29,629 and 39,926 DSUs, respectively. |
Executive Compensation and Other Information
| • | Awarded annual cash incentives at 95.7% of their target annual cash incentive opportunity; and |
Executive Compensation and Other Information
| • | Granted long-term incentive compensation in the form of time-based vesting restricted stock units (“RSUs”) vesting ratably over a four-year period and performance share units (“PSUs”) to be earned based on our total stockholder return (“TSR”) relative to a pre-selected comparator group for a three-year period from 2023 through 2025. |
Executive Compensation and Other Information
Since 2015, the PSU portion of the long-term incentive compensation program has been earned based solely on our TSR relative to a pre-selected comparator group of companies. Effective with the 2021 PSU grants, achievement is based on the Cohu TSR relative to the Russell 2000 Index as described in the “Long-Term Incentive Compensation” section that follows. The weighting of these PSUs in relation to time-based RSU grants has also evolved over the years and commencing with the long-term incentive grants made in March 2023, 60% of each NEO’s total annual equity grant value is awarded in PSUs and 40% awarded in RSUs. Since 2019, Our NEOs have historically earned from a low of 44% of their target PSU awards to a high of 142% of their target PSU awards. While the past five years indicate that the program effectively rewards our executive officers when we deliver superior performance and appropriately adjusts compensation downward in the case of less-than-superior performance, the Compensation Committee will continue to review the executive compensation program to ensure it reflects the appropriate balance between short-term financial performance and long-term stockholder return. For example, commencing with PSUs granted in March 2021 we eliminated the 25% minimum number of PSUs that were guaranteed to vest, regardless of performance. This formula is described in detail in the section entitled “Long-Term Incentive Compensation” below. 2023 Executive Compensation Policies and Practices We endeavor to maintain sound governance standards consistent with our executive compensation policies and practices. The Compensation Committee evaluates our executive compensation program on an ongoing basis to ensure that it is consistent with our short-term and long-term goals given the dynamic nature of our business and the market in which we compete for executive talent. The following policies and practices were in effect during 2023:
Executive Compensation and Other Information
| ● | Independent Compensation Committee Advisors. The Compensation Committee engaged its own compensation consultant to assist with its 2023 compensation and governance reviews. This consultant performed no other consulting or services for us. |
Executive Compensation and Other Information
| - | No Tax Reimbursements. We do not provide any tax or “gross-up” reimbursement payments on any severance or change in control payments, perquisites or other personal benefits other than immaterial COBRA reimbursements, standard relocation benefits and tax equalization agreements related to expatriate assignments. |
Executive Compensation and Other Information
| - | “Double-Trigger” Change-in-Control Arrangements. All change-in-control payments and benefits are based on a “double-trigger” arrangement (that is, they require both a change-in-control of Cohu plus a qualifying termination of employment before payments and benefits are paid), although the vesting of equity awards will accelerate in full if the awards are not assumed or replaced by an acquiring corporation. |
Executive Compensation and Other Information
| - | Performance-Based Incentives. We use performance-based short-term and long-term incentives and do not have common or overlapping metrics between these programs. |
Executive Compensation and Other Information
| - | Multi-Year Vesting Requirements. The equity awards granted to our executive officer’s vest or are earned over multi-year periods, consistent with current market practice and our retention objectives. |
Executive Compensation and Other Information
| • | Motivate these individuals to achieve our short-term and long-term corporate goals that enhance stockholder value; and |
Executive Compensation and Other Information
| - | Providing a short-term incentive compensation opportunity paid in cash that is based on challenging financial performance objectives for our executive officers; and |
Executive Compensation and Other Information
| - | Providing long-term incentive compensation opportunities in the form of a combination of RSU awards and PSU awards, that enable us to motivate and retain those executive officers with the leadership abilities necessary to create sustainable long-term value for our stockholders. |
Executive Compensation and Other Information
| • | A review of the relevant competitive market data, as described below. |
Executive Compensation and Other Information
The Compensation Committee does not weigh these factors in any predetermined manner, nor does it apply any formulas in developing its compensation recommendations. The members of the Compensation Committee consider all this information in light of their individual experience, knowledge of Cohu, knowledge of the competitive market, knowledge of each executive officer, and business judgment in making these recommendations. The Compensation Committee’s authority, duties, and responsibilities are described in its charter, which is reviewed annually and revised and updated as warranted. The charter is available at the Corporate Governance section of our website www.cohu.com. Role of Management On occasion, the Compensation Committee meets with our CEO and/or our other executive officers and our Vice President of Human Resources to obtain information and recommendations with respect to our executive compensation program, policies, and practices, as well as the compensation arrangements of our executive officers. In 2023, the Compensation Committee met with Dr. Müller, our CEO, who made recommendations to the Compensation Committee on the base salary, target annual cash incentive award opportunities, and long-term incentive compensation for our executive officers, including our NEOs (except with respect to his own compensation). In formulating these recommendations, our CEO used, among other things, competitive market data, an internal equity analysis and individual performance factors. The Compensation Committee considers, but is not bound by and does not always accept, these recommendations with respect to executive compensation. In recent years, the Compensation Committee has modified several of our CEO’s compensation proposals and regularly seeks input from its compensation consultant or data from other independent sources prior to making its decisions. In 2023, our CEO attended some of the Compensation Committee’s meetings, but the Compensation Committee also held executive sessions not attended by any members of management. The Compensation Committee held discussions and made its decisions with respect to our CEO’s compensation without him present. The Compensation Committee has the ultimate authority to make decisions with respect to the compensation of our executive officers, including our NEOs, but may, if it chooses, delegate any of its responsibilities to subcommittees. The Compensation Committee has authorized our CEO to make base salary adjustments and short-term cash incentive award decisions for all employees other than our NEOs or other executive officers. Role of Compensation Consultant The Compensation Committee has the authority to engage independent advisors to assist in carrying out its responsibilities. The Compensation Committee typically engages Compensia, a national compensation consulting firm, to advise and assist it on various aspects of executive and director compensation, including base salaries, annual and long-term incentive compensation. The Chair of the Compensation Committee reviews and approves all payments to Compensia. Beginning in 2021, the Compensation Committee’s practice is to have Compensia prepare a comprehensive executive compensation analysis annually and directors compensation analysis in alternating years. In 2023, Compensia completed and presented only the executive market analysis. Compensia reports directly to the Compensation Committee. The Compensation Committee may replace Compensia or hire additional advisors at any time. Compensia does not provide any other services to us and receives compensation only with respect to the services provided to the Compensation Committee. The Compensation Committee has considered the independence of Compensia in light of the rules of the SEC and the listing standards of Nasdaq. Based on these rules and standards, the Compensation Committee has concluded that the work performed by Compensia did not raise any conflict of interest. Competitive Positioning In arriving at its compensation decisions for our executive officers, including our NEOs, for 2023, the Compensation Committee considered competitive market data and an analysis prepared by Compensia. In making its decisions, the Compensation Committee evaluates this data and analysis as an important reference point but does not reach its conclusions on a formulaic basis. This analysis was based on a review of the compensation practices of a select group of peer companies which was approved by the Compensation Committee after reviewing data prepared by Compensia and input from management. In selecting companies for the compensation peer group, the Compensation Committee identified companies headquartered in the U.S. in the semiconductor capital equipment, electronic capital equipment and instrumentation sectors that were comparable to us on the basis of 0.5x – 2.5x revenue, 0.25 – 5.0x our market capitalization, and that had similar scope of operations, and which the Compensation Committee believed may compete with us for executive talent. On September 7, 2022, the Compensation Committee revised the compensation peer group due to the acquisition of CMC Materials and the divestiture of Brooks Automation’s semiconductor business to a privately held entity, and consequently these two companies no longer met the relevant peer financial profile. To increase the compensation peer group size, the Compensation Committee added two new members: Alpha and Omega Semiconductor, and National Instruments. For determining executive compensation levels in 2023 the compensation peer group consisted of the following 19 companies:
Executive Compensation and Other Information
| • | Short-term incentive compensation opportunities paid in cash; |
Executive Compensation and Other Information
| • | Long-term incentive compensation in the form of equity awards; |
Executive Compensation and Other Information
On February 6, 2024, the Compensation Committee, based on the recommendations of Dr. Müller, except with respect to his own base salary, and an analysis of competitive market salary data prepared by its compensation consultant as well as other business condition factors described above, determined that there would be no change to the base salaries for our executive officers, including our NEOs in 2024. The annual base salaries paid to our NEOs for 2023 are set forth in the “2023 Summary Compensation Table” below. Short-Term Incentive Plan Each year the Compensation Committee approves an annual short-term incentive plan for our executive officers, including our NEOs, to encourage and award their achievement of our financial and operational objectives as set forth in our annual operating plan. Under this short-term incentive plan, the Compensation Committee establishes an incentive formula that is applied to the actual level of achievement for each of the pre-selected performance measures. The incentive formula is based on the anticipated difficulty and relative importance of achieving the target level for each respective performance measure. Accordingly, the actual incentives paid, if any, for any given year will vary depending on our actual performance. To support our retention objectives, typically the short-term incentive plan provides that an executive officer must be an employee when the incentives for the year are paid. The short-term incentive plan provides that the Compensation Committee has the discretion to decrease, but not increase, any incentives paid under the plan, even if the applicable performance objectives have been achieved. Historically, incentives have been payable in cash unless an executive officer elects to defer all or part of his or her incentive into the Cohu, Inc. Deferred Compensation Plan. On February 2, 2023, the Compensation Committee adopted the short-term incentive plan for 2023 (the “2023 STI”). The 2023 STI was adopted pursuant to the Cohu 2005 Equity Incentive Plan (the “2005 Plan”). Target Short-Term Incentive Opportunities For purposes of the 2023 STI, our CEO made recommendations to the Compensation Committee with respect to target short-term incentive opportunities (expressed as a percentage of base salary) for each of our executive officers, including our NEOs (except with respect to his own target short-term incentive opportunity). The maximum payout level was 200% of the target award. The target short-term incentive opportunities approved by the Compensation Committee for our NEOs, and the range of the potential incentive as a percentage of base salary, were as follows and reflect increased target short-term incentive opportunities for Dr. Müller and Messrs. Jones and Bohrson as the Compensation Committee believed that these new levels better aligned to the competitive market data provided by Compensia:
Executive Compensation and Other Information
| Named Executive Officer | 2023 Target Short-Term Incentive Opportunity | Range of Possible 2023 Short-Term Incentive as Percentage of Base Salary | | Luis A. Müller | 110% | 0% - 220% | | Jeffrey D. Jones | 75% | 0% - 150% | | Christopher G. Bohrson | 75% | 0% - 150% | | Thomas D. Kampfer | 50% | 0% - 100% | | Ian P. Lawee | 55% | 0% - 110% |
Executive Compensation and Other Information
| 2023 STI Performance Measure Targets and Achievement Scale | | | | | | Threshold | Target | Maximum | | Performance to 4-Year Rolling Sales Growth | 0% | 5% | >10% | | Payout Level Earned | None | 100% | 200% | | Performance to Non-GAAP Pre-tax Income | <5% Pretax Income | 15% | >22.5% | | Payout Level Earned | None | 100% | 200% |
Executive Compensation and Other Information
Performance Measure Target Levels With respect to the target levels for sales, the Compensation Committee believed that, at the time, the target level for each performance measure was set, these target levels would be challenging and difficult, but achievable under normal business conditions with significant effort and skill, and strong execution. For 2023, the Compensation Committee expected that these target levels would be difficult to achieve because they would require delivery of results in uncertain market conditions (including the extended market downturn and inflationary pressures on costs), adroitly executing our business strategy, the development and acceptance by customers of new products, and successful entry into certain new markets in a highly competitive and volatile environment. Annual Short-Term Incentive Plan Decisions Following the end of 2023, the Compensation Committee compared our actual financial performance to the target performance levels established for the year and applied the incentive formula under the 2023 STI to our actual performance and determined to payout at a level of 95.7% for each of our NEOs. Based on these determinations, the annual cash incentives paid to our NEOs for 2023 were as follows:
Executive Compensation and Other Information
| Actual Achievement of 2023 STI Performance Measures | | | | | | | | Dr. Müller | Mr. Jones | Mr. Bohrson | Mr. Kampfer | Mr. Lawee | | 4-year Rolling Sales Growth (1) | 1.8% | 1.8% | 1.8% | 1.8% | 1.8% | | Goal Payout % (2) | 36.3% | 36.3% | 36.3% | 36.3% | 36.3% | | Non-GAAP Pre-tax Income (3) | 16.6% | 16.6% | 16.6% | 16.6% | 16.6% | | Goal Payout % (3) | 121.1% | 121.1% | 121.1% | 121.1% | 121.1% | | Actual Amount of Fiscal Year 2023 STI Cash Incentives | | | | | | | Non-Equity Incentive Award Payable | $752,378 | $326,445 | $304,921 | $193,715 | $176,256 | | % Targeted Award Amount | 95.7% | 95.7% | 95.7% | 95.7% | 95.7% |
Executive Compensation and Other Information
| (2) 4-year Rolling Sales Growth result is weighted at 30% of the total 2023 STI Target Award Amount |
Executive Compensation and Other Information
The annual cash incentives paid to our NEOs for 2023 are set forth in the “2023 Summary Compensation Table” below. Long-Term Incentive Compensation We provide long-term incentive compensation in the form of equity awards to our executive officers, including our NEOs. These awards are intended to align the interests of our executive officers with those of our stockholders by creating an incentive for them to maximize long-term stockholder value. They are also designed to encourage our executive officers to remain employed with us in a very competitive labor market. The Compensation Committee regularly monitors the environment in which we operate and revises our long-term incentive compensation arrangements as it determines to be necessary and appropriate to help meet our business objectives, including increasing long-term stockholder value. Generally, in determining the size of the equity awards granted to our executive officers, including our NEOs, the Compensation Committee takes into consideration the recommendations of our CEO (except with respect to his own equity awards), an analysis of competitive market data prepared by its compensation consultant (with particular reference to the median of the competitive market), the potential GAAP accounting expense associated with the proposed awards (as compared to the companies in the compensation peer group), and the other factors described above. The Compensation Committee also considers the dilutive effect of our long-term incentive compensation practices, and the overall impact that these equity awards, as well as awards to other employees, will have on stockholder value. Further, the Compensation Committee has the discretion to determine whether awards in any given year will be made in the form of RSU awards, PSU awards, other awards or a combination thereof. On March 14, 2023, consistent with the grant timing in prior years, the Compensation Committee, based on the factors described above, as well as considering market trends with alignment of individual responsibilities, contributions and performance, approved the grant of RSU awards and PSU awards to our executive officers, including our NEOs at the levels set forth in the table below. The Compensation Committee also determined that to strengthen the emphasis on performance-based compensation, of, the weighting of PSU awards would be increased to 60% of the total annual equity awards and the weighting of RSU awards would be reduced to 40% of the total annual equity awards.
Executive Compensation and Other Information
| Named Executive Officer | Number of Restricted Stock Units Granted | Number of Performance Stock Units Granted (1) | Total Face Value of Stock Units at Time of Grant (2) | | Luis A. Müller | 44,004 | 66,006 | $4,093,472 | | Jeffrey D. Jones | 14,521 | 21,782 | $1,350,835 | | Christopher G. Bohrson | 11,001 | 16,501 | $1,023,349 | | Thomas D. Kampfer | 6,600 | 9,900 | $613,965 | | Ian P. Lawee | 4,620 | 6,930 | $429,776 |
Executive Compensation and Other Information
| (1) PSUs granted at the target award level. |
Executive Compensation and Other Information
| (2) 20-day average closing price of COHU common stock preceding the grant date of March 14, 2023 was $37.21. The amounts shown above are the grant date target face value for stock awards issued in the form of RSUs and PSUs granted in 2023 as calculated based on the $37.21 average closing price. |
Executive Compensation and Other Information
Restricted Stock Unit Awards Consistent with our other employee equity awards, the RSU awards granted to our executive officers in 2023 vest at the rate of 25% of the shares of our common stock subject to the awards on each anniversary of the date of the grant. Performance Stock Unit Awards 2023 PSU Awards In 2023, the Compensation Committee evaluated its historical use of custom peer groups as the Comparator Group for the TSR in PSU awards and determined that using a broader-based index of companies would better reflect the performance of Cohu’s TSR. Therefore, the PSU awards granted to our executive officers in March 2023 will be earned based on our TSR as compared to the Russell 2000 Index (“RUT”) measured over a three-year performance period beginning on the first day of our fiscal year 2023, with earned shares vesting fully on the third anniversary of the date of grant. The performance period for the 2023 PSU Awards was set at three years to enhance the long-term focus of the program. The methodology on how shares of our common stock may be earned under the 2023 PSU Awards is as follows:
Executive Compensation and Other Information
| PSU Award Feature | Description | | Performance Period | Three fiscal years beginning on first day of 2023 | | Performance Measure | TSR performance relative to the Russell 2000 Index (“RUT”) | | Performance Scale | 2x spread between COHU and RUT measured and added or subtracted from target (100%) | | Performance Methodology | Net change in average closing price of COHU and RUT over the 20 trading-day period immediately preceding the beginning and end of the Performance Period. In the event that both COHU and RUT TSRs are less than zero, the number of shares earned will not exceed 100% of target. | | Range of PSUs Earnable | 0-200% of number of shares granted | | Vesting Period | 100% on third anniversary of the date of the grant |
Executive Compensation and Other Information
2021 PSU Award Results The 2021 PSU awards had a three-year performance period after which the number of shares of our common stock earned was determined based on calculating two times the spread between the percentage increase or decrease in the COHU and RUT measured and added or subtracted from the target of 100%. The spread was measured as the net change in average closing market prices of COHU and RUT over the 20 trading-day period immediately preceding both December 27, 2020 (the beginning of the Performance Period) and December 30, 2023 (the end of the Performance Period). Following the end of 2023, the Compensation Committee compared our actual performance with respect to the RUT and the TSR result for the years 2021 through 2023 which was calculated to be -6.2% and, therefore, the number of shares of our common stock earned under the 2021 PSU awards was 87.6% of the target number of shares granted to each executive officer. The number of shares of our common stock earned by our NEOs with respect to their 2021 PSU awards was:
Executive Compensation and Other Information
| Named Executive Officer | Performance Stock Unit Award (Target Number of Shares) | 2021-23 TSR Result (1) | Final Shares Earned | Final Shares Earned as a Percentage of Target Number of Shares (2) | | Luis A. Müller | 28,604 | -6.2% | 25,057 | 87.6% | | Jeffrey D. Jones | 9,382 | -6.2% | 8,218 | 87.6% | | Christopher G. Bohrson | 6,178 | -6.2% | 5,411 | 87.6% | | Thomas D. Kampfer | 4,576 | -6.2% | 4,008 | 87.6% | | Ian P. Lawee | 4,004 | -6.2% | 3,507 | 87.6% |
Executive Compensation and Other Information
In the future, we may provide perquisites or other personal benefits to our executive officers in limited circumstances, as described above. We do not expect that these perquisites or other personal benefits will be a significant aspect of our executive compensation program. All future practices with respect to perquisites or other personal benefits will be approved and subject to periodic review by the Compensation Committee. Employment Agreements We do not have employment agreements with our NEOs. The material terms of stock awards granted to our NEOs in 2023 and performance-based cash incentives earned by our NEOs for 2023 are described in more detail in “Long-Term Incentive Compensation” and “Short-Term Incentive Plan”, respectively, above. Post-Employment Compensation In 2020, the Compensation Committee undertook, in consultation with Compensia, a review of its executive post-employment agreements. The objective of this review was to independently assess best practices and develop standard agreements to be implemented as the Compensation Committee deemed appropriate among the Company’s executive officers. The Compensation Committee approved a form of executive severance agreement (the “Severance Agreement”) and form of change in control agreement (the “Change in Control Agreement”) for certain of the Company’s executive officers (an “Executive”) as described below (the “Executive Agreements”). The post-employment payments and benefits which our NEOs are eligible to receive under the Executive Agreements are described in more detail in “Potential Payments upon Termination or Change in Control” below. We believe providing these arrangements help us compete for and retain executive talent. After reviewing the practices of companies represented in the compensation peer group, we believe that these arrangements are generally comparable with the severance packages offered to executives by the companies in the compensation peer group. We believe that the “double trigger” arrangement under the Change in Control Agreement maximizes stockholder value because it prevents an unintended windfall to these executive officers in the event of a change in control of Cohu, while still providing them appropriate incentives to cooperate in negotiating a transaction involving a potential change in control of Cohu in which they believe they may lose their jobs. Other Compensation Policies Stock Ownership Policy We believe that stock ownership by our executive officers is important to link the risks and rewards inherent in stock ownership of these individuals and our stockholders. The Compensation Committee has adopted a stock ownership policy that requires our executive officers to own a minimum number of shares of our common stock. These mandatory ownership levels are intended to create a clear standard that ties a portion of these individuals’ net worth to the performance of our stock price. The policy provides that over the five-year period commencing with their appointment or employment as an executive officer or over a three-year period following an increase in their annual base salary or a new ownership level being approved, these individuals must accumulate and hold shares of our common stock having the following values:
Executive Compensation and Other Information
Under our stock ownership policy, our executive officers should not sell any shares of our common stock, other than to settle tax withholding obligations due to the vesting of shares, until the applicable ownership level has been met and, once met, subsequent sales, if any, should not reduce their ownership of our common stock below these minimum ownership levels unless approved by the Compensation Committee in advance. Vested “phantom” and deferred but unissued shares of our common stock are included as shares owned for purposes of our stock ownership policy. The Compensation Committee monitors compliance with these stock ownership levels on an annual basis using the average closing price of our common stock during the preceding fiscal year. As of December 31, 2023, each of our NEOs was compliant with the policy. Policy for Recovery of Erroneously Awarded Incentive Compensation On October 2, 2023 we adopted a revised Policy for Recovery of Erroneously Awarded Incentive Compensation (“clawback”) policy that complies with the requirements of Exchange Act Rule 10d-1 and the corresponding Nasdaq listing standards under which if the Company is required to prepare a Restatement (as defined in the policy), the Company will seek to recover and clawback from any Affected Officer (as defined in the policy) reasonably promptly the Erroneously Awarded Compensation (as defined in the policy) received by the Affected Officer. Equity Award Grant Policy We grant equity awards to our executive officers under our stockholder-approved 2005 Plan. Pursuant to this plan, all stock option grants must have a per share exercise price at least equal to the fair market value of our common stock on the grant date. Grants of equity awards to newly hired or appointed executive officers, including NEOs, will typically be made at a regularly scheduled meeting of the Compensation Committee held subsequent to the new hire or appointment date. Ongoing equity award grants to our executive officers, including our NEOs, will be approved on an annual basis at a meeting of the Compensation Committee or our Board of Directors, as applicable, which is typically held in the first quarter of each fiscal year. The Compensation Committee has not granted, nor does it intend in the future to grant, equity awards to our executive officers or any other individual in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, such as a significant positive or negative earnings announcement. Similarly, Cohu has not timed, nor does it intend in the future to time, the release of material nonpublic information based on equity award grant dates. In addition, because our equity awards typically vest or are earned over a multi-year period, the value to recipients of any immediate increase in the price of our common stock following an award will be minimal. Treatment of Equity Awards Upon Retirement In March 2023, after consultation with Compensia and external legal counsel, the Compensation Committee approved a policy providing for the continuation of vesting eligibility after retirement for certain equity awards granted to specific senior executives that satisfy the eligibility requirements of a Qualifying Retiring Employee. These requirements include being a minimum age for retirement, having completed a minimum number of years of service with Cohu, including tenure as a senior executive, and providing specific advance notice of the request to receive retirement benefits. This policy does not apply to any equity awards granted before March 2023. This policy applies to all our NEOs including our CEO. We believe providing these potential retirement benefits will help us compete for and retain executive talent as well as facilitate orderly transitions for retiring executives. No Hedging or Pledging Cohu’s Insider Trading Policy prohibits all officers, directors, and other employees with access to sensitive Company information from engaging in any form of hedging transaction (derivatives, equity swaps, forwards, etc.) in Cohu’s stock, including, among other things, short sales and transactions involving publicly traded options. In addition, such officers, directors, and employees are prohibited from holding Cohu stock in margin accounts and from pledging Cohu stock as collateral for loans. We believe that these policies further align the interests of our officers and directors with those of our stockholders. Tax and Accounting Considerations In designing our executive compensation program, the Compensation Committee takes into consideration the tax and accounting effects that each element of compensation will or may have on Cohu and our executive officers. The Compensation Committee seeks to keep the compensation expense associated with our executive compensation program as a whole within reasonable levels. When determining how to apportion between differing elements of compensation, the Compensation Committee’s goal is to meet our business objectives while maintaining cost neutrality. For example, if the Compensation Committee increases benefits under one compensation plan or arrangement resulting in higher compensation expense, it may seek to decrease benefits under another plan or arrangement to avoid compensation expense that is above the desired level. Deductibility of Executive Compensation Under Section 162(m), compensation paid to each of our NEOs and other “covered employees” that exceeds $1 million per taxable year is generally non-deductible. The Compensation Committee reserves the discretion, in its judgment, to approve compensation payments that may not be deductible as a result of the deduction limit of Section 162(m) when it believes that such payments are appropriate to attract and retain executive talent and are in the best interests of Cohu and our stockholders. Taxation of Nonqualified Deferred Compensation Section 409A of the Code requires that amounts that qualify as “nonqualified deferred compensation” satisfy requirements with respect to the timing of deferral elections, timing of payments, and certain other matters. Generally, the Compensation Committee intends to administer our executive compensation program and design individual compensation elements, as well as the compensation plans and arrangements for our employees generally, so that they are either exempt from, or satisfy the requirements of, Section 409A, which primarily results in negative tax consequences to our executive officers rather than Cohu. From time to time, we may be required to amend some of our compensation plans and arrangements to ensure that they are either exempt from, or compliant with, Section 409A. We are not obligated under any compensation plan or arrangement to prevent or minimize any negative tax consequences that may affect our executive officers, nor are we required to pay any “gross-up” should any such consequences arise. Taxation of “Parachute” Payments Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of Cohu that exceeds certain prescribed limits, and that Cohu (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We are not obligated to provide any NEO with a “gross- up” or other reimbursement payment for any tax liability that he or she may owe as a result of the application of Sections 280G or 4999 in the event of a change in control of Cohu. Accounting for Stock-Based Compensation
Executive Compensation and Other Information
The Compensation Committee takes accounting implications into consideration in designing compensation plans and arrangements for our executive officers and other employees. Chief among these is Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation, (“ASC Topic 718”), the standard which governs the accounting treatment of stock-based compensation awards. ASC Topic 718 requires us to measure and recognize in our financial statements all share-based payment awards to employees, directors and consultants, including stock option grants, restricted stock unit awards, and performance stock unit awards to our executive officers, under the fair value method. Our estimate of share-based compensation expense requires a number of complex and subjective assumptions including our stock price volatility, employee exercise patterns (expected life of the options), forfeitures and related tax effects. The assumptions used in calculating the fair value of share-based payment awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. Share-based compensation expense related to restricted stock unit awards (RSUs) is calculated based on the market price of our common stock on the date of grant, reduced by the present value of dividends expected to be paid on our common stock prior to vesting of the restricted stock unit. The estimated fair value of performance stock unit awards (PSUs) is determined on the grant date using the Monte Carlo simulation valuation model. The Monte Carlo simulation model incorporates assumptions for the risk-free interest rate, Cohu and the selected peer group stock price volatility, the correlation between Cohu and the selected index, and dividend yields. ASC Topic 718 also requires us to recognize the compensation cost of our share-based payment awards in our income statement over the period that an employee, including our executive officers, is required to render service in exchange for the award (which, generally, will correspond to the award’s vesting schedule). We record a provision for equity-based performance units outstanding based on our current assessment of achievement of the performance goals and recognize actual forfeitures as they occur. Compensation Committee Report The Committee has reviewed and discussed with management the Compensation Discussion and Analysis for 2023. Based on such review and discussions, the Committee recommended to the Board, and the Board has approved, that the Compensation Discussion and Analysis be included in Cohu’s proxy statement for its 2024 Annual Meeting of Stockholders. This report is submitted by the Compensation Committee. Steven J. Bilodeau (Chair) Andreas W. Mattes Nina L. Richardson
2023 Summary Compensation Table
2023 Summary Compensation Table The following table shows compensation information for fiscal year 2023 for our NEOs.
2023 Summary Compensation Table
| Named Executive Officer | Year | Salary ($) | Stock Awards ($) (1) | Non-Equity Incentive Plan Comp. ($) (2) | All Other Comp. ($) (3) | Total ($) | | Luis A. Müller | 2023 | 708,846 | 5,051,219 | 752,378 | 24,164 | 6,536,607 | | President & | 2022 | 667,307 | 3,321,901 | 1,303,528 | 22,550 | 5,315,286 | | Chief Executive Officer | 2021 | 619,231 | 2,891,579 | 1,049,282 | 22,324 | 4,582,416 | | Jeffrey D. Jones | 2023 | 452,231 | 1,666,891 | 326,445 | 21,043 | 2,466,610 | | Sr. Vice President, Finance & | 2022 | 432,846 | 1,074,088 | 590,740 | 19,381 | 2,117,055 | | Chief Financial Officer | 2021 | 404,232 | 948,426 | 481,830 | 19,000 | 1,853,488 | | Christopher G. Bohrson | 2023 | 418,846 | 1,262,779 | 304,921 | 20,962 | 2,007,508 | | Sr. Vice President, | 2022 | 382,077 | 708,669 | 520,446 | 19,240 | 1,630,432 | | Chief Customer Officer | 2021 | 362,923 | 624,534 | 430,122 | 18,919 | 1,436,498 | | Thomas D. Kampfer | 2023 | 400,846 | 757,614 | 193,715 | 20,908 | 1,373,083 | | Sr. Vice President, Corp. Development, | 2022 | 374,462 | 525,929 | 364,988 | 19,221 | 1,284,600 | | General Counsel & Secretary | 2021 | 351,154 | 462,588 | 297,996 | 18,786 | 1,130,524 | | Ian P. Lawee (4) | 2023 | 333,923 | 530,330 | 176,256 | 20,719 | 1,061,228 | | Sr. Vice President & General Manager, | 2022 | 319,539 | 465,056 | 348,380 | 19,086 | 1,152,061 | | Semiconductor Test Group | 2021 | 308,333 | 404,765 | 288,091 | 18,991 | 1,020,180 |
2023 Summary Compensation Table
| (1) Amounts shown do not reflect compensation actually received by the NEOs. Instead, the amounts shown above are the grant date fair value for stock awards issued in the form of RSUs and PSUs granted in fiscal years 2023, 2022, and 2021, calculated in accordance with FASB Topic ASC 718 without regard to estimated forfeitures. The assumptions used to calculate the grant date fair value of the stock awards are set forth in Note 6, “Employee Benefit Plans”, included in Part IV, Item 15(a) of Cohu’s Annual Report on Form 10-K for the year ended December 30, 2023, filed with the SEC. The derived grant date fair value for the stock award is recognized, for financial statement purposes, over the number of days of service required for the award to vest in full. No stock options were granted to the NEOs during the three-year period ended December 30, 2023. Assuming the highest level of performance conditions are achieved, the grant date fair values for performance-based stock awards made in 2023 would be $6,827,661, $2,253,130, $1,706,863, $1,024,056 and $716,839 for Dr. Müller and Messrs. Jones, Bohrson, Kampfer and Lawee, respectively. Using the same assumptions, for 2022 they would be $3,643,835, $1,178,181, $777,348, $576,899 and $510,126 and in 2021 they would be $3,283,167, $1,076,866, $709,111, $525,233 and $459,579 for Dr. Müller and Messrs. Jones, Bohrson, Kampfer and Lawee, respectively. |
2023 Summary Compensation Table
| (2) Amounts consist of performance-based cash incentives received by the NEO earned for services rendered in 2023, 2022, and 2021. Such amounts were paid under the 2005 Plan in February or March of the following fiscal year. |
2023 Summary Compensation Table
| (3) The amounts shown in this column reflect the following for each NEO: |
2023 Summary Compensation Table
| ■ | For U.S. based NEOs, includes amounts of Cohu’s matching contributions in 2023 under the Cohu 401(k) Plan (which is more fully described elsewhere herein under the heading “Retirement Benefits Under the 401(k) Plan, Executive Perquisites and Generally Available Benefits”). |
2023 Summary Compensation Table
| ■ | The value attributable to life insurance benefits provided by Cohu (such amount is taxable to the recipient). |
2023 Summary Compensation Table
| ■ | Monthly automobile expense allowance paid by Cohu (such amount is taxable to the recipient). |
2023 Summary Compensation Table
| ■ | Except as noted above, the amount attributable to each such perquisite or benefit for each NEO does not exceed the greater of $25,000 or 10% of the total amount of perquisites and personal benefits received by such NEO. |
2023 Summary Compensation Table
| (4) Ian Lawee served as a NEO for a portion of 2023. |
2023 Pay Versus Performance
2023 Pay Versus Performance We are providing the following required information about the relationship between executive compensation actually paid and certain financial performance of Cohu as required by Item 402(v) of Regulation S-K. Further details regarding Cohu’s variable pay-for-performance philosophy and how Cohu aligns executive compensation with company performance, refer to “Executive Compensation and Other Information” above in the CD&A.
2023 Pay Versus Performance Table
2023 Pay Versus Performance Table
Compensation Actually Paid (“CAP”)
Compensation Actually Paid (“CAP”)
Compensation Actually Paid (“CAP”)
| Year | Summary Compensation Table Total for CEO (1) | Compensation Actually Paid to CEO (2) | Average Summary Compensation Table Total for Other NEOs (3) | Average Compensation Actually Paid to Other NEOs (4) | Total Share- holder Return (5) | Peer Group Total Share- holder Return (6) | Net Income (7) | Non-GAAP Pre- | | | ($) | ($) | ($) | ($) | ($) | ($) | ($M) | tax Income (8) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | 6,536,607 | 3,579,668 | 1,727,107 | 1,468,472 | 159.14 | 191.07 | 28.2 | 16.6% | | 2022 | 5,315,286 | 5,406,262 | 1,546,037 | 1,547,883 | 144.12 | 137.78 | 96.8 | 21.8% | | 2021 | 4,582,416 | 959,803 | 1,360,173 | 597,988 | 170.92 | 183.27 | 167.3 | 19.5% | | 2020 | 3,315,895 | 12,097,614 | 1,093,312 | 3,117,583 | 174.25 | 128.00 | (13.8) | 9.4% |
Compensation Actually Paid (“CAP”)
| (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Dr. Müller, our Chief Executive Officer (“CEO”) for each corresponding year in the “Total” column of the Summary Compensation Table in each applicable year. | | (2) The dollar amounts reported in column (c) are the amount of “compensation actually paid” to Dr. Müller as defined by Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Dr. Müller during the applicable year. The adjustments made to Dr. Müller’s total compensation for each year to determine the CAP are detailed in the CEO Summary Compensation Table Total to CAP Reconciliation table below. | | (3) The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s NEOs as a group (excluding Dr. Müller, our CEO) in the “Total” column of the Summary Compensation Table in each applicable year. The NEOs included for purposes of calculating the average amounts and “compensation actually paid” in 2023, 2022 and 2021 are as follows: Mr. Jeffrey Jones, Mr. Christopher Bohrson, Mr. Thomas Kampfer and Mr. Ian Lawee. The NEOs included for purpose of calculating the average amounts and “compensation actually paid” in 2020 are as follows: Mr. Jeffrey Jones, Mr. Christopher Bohrson, Mr. Thomas Kampfer and Mr. Pascal Ronde. | | (4) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Dr. Müller), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Dr. Müller) during the applicable year. The adjustments made to the NEO’s total compensation for each year to determine the CAP are detailed in the Average Other NEO Summary Compensation Table Total to CAP Reconciliation table below. | | (5) Cumulative TSR is calculated assuming a $100 investment in Cohu’s common stock, on December 29, 2019. | | (6) Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the custom Peer Group Index as reported in the Comparative Stock Performance Graph in Cohu’s 2023 Annual Report on Form 10-K and is made up of Advanced Energy Industries, Inc., Alpha & Omega Semiconductor Limited, Axcelis Technologies, Inc., Badger Meter, Inc., Cirrus Logic, Inc., FormFactor, Inc., Harmonic Inc., Ichor Holdings Ltd., Kulicke and Soffa Industries, Inc., MACOM Technology Solutions Holdings, Inc., MaxLinear, Inc., Novanta, Inc., Onto Innovation, OSI Systems, Inc., Photronics, Inc., Smart Global Holdings, Inc., Ultra Clean Holdings, Inc. and Veeco Instruments, Inc. The only change from the custom peer group used in 2022 was the removal of National Instruments Corporation, due to it being acquired by Emerson Electric Co, and therefore the data reported in the 2023 CAP table has been recalculated removing National Instruments Corporation’s shareholder return values. As reported in the 2022 CAP table, the Peer Group Total Shareholder Return rate for 2020, 2021 and 2022 when the Peer Group included National Instruments Corporation was 130.92, 171.53 and 124.23 respectively. | | (7) The dollar amounts reported represent the amount of net income reflected in Cohu’s audited financial statements for the applicable year. | | (8) While we believe that the Relative Total Stockholder Return (“RTSR”) Percentile used in Cohu’s annual Long-Term Incentive (“LTI”) plan as described in the CD&A is the most important financial measure used to link compensation actually paid to our NEOs, this RTSR is calculated over a three-year period and therefore cannot be used in this table. As Cohu uses other financial and non-financial performance measures for the purpose of evaluating performance for compensation programs, Cohu determined that the non-GAAP pre-tax income as a percentage of sales performance used in the annual Short-Term Incentive (“STI”) plan as described in the CD&A represents the most important performance measure (that is not otherwise required to be disclosed in the table) used to link compensation actually paid to our NEOs, for the most recently completed fiscal year, to company performance. |
Compensation Actually Paid (“CAP”)
To calculate the CAP, the following amounts were deducted from and added to the Summary Compensation Table (“SCT”) total compensation.
CEO SCT Total to CAP Reconciliation
| (3) Neither the CEO nor any other NEO has Pension Benefits. |
Relationship of Financial Performance Measures to Compensation Actually Paid
Relationship of Financial Performance Measures to Compensation Actually Paid These financial performance measures are not all reflected in the Pay versus Performance table above and as Cohu generally seeks to incentivize long-term performance, we do not specifically align performance measures with compensation actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. As the table and subsequent charts show, the required equity adjustments to determine CAP results in yearly swings in CAP levels that are heavily influenced by timing of past equity awards and stock price fluctuations rather than actual company or executive performance in any given year. We are providing the following required descriptions of the relationships between information presented in the Pay versus Performance table. We selected our Comparative Stock Performance Graph custom Peer Group Index for the Cumulative TSR metric as it is comprised from companies within our industry and we believe reflects an appropriate comparison group for executive compensation. As discussed above, due to one of the Peer Group companies being acquired in 2023, we are illustrating both the historical Peer Group Index Cumulative TSR and the current Peer Group Index Cumulative TSR. Cohu’s Cumulative TSR (calculated assuming a $100 investment in Cohu’s common stock, on December 29, 2019) has outperformed our current peer group for two of the four years being compared. There does not appear to be a direct correlation between the performance of Cumulative TSR to CAP as discussed above. Cohu does not use GAAP Net Income in determining compensation paid to any of our CEO and other NEOs. This data is reported to comply with the requirements of Item 402(v) of Regulation S-K. Cohu uses its results in non-GAAP pretax income to determine 70% of the compensation earned under the STI plan as Short-Term Incentive Plan section of the CD&A. We selected this metric as we feel it has the most direct impact on compensation levels earned by our CEO and other NEOs. Cohu’s non-GAAP pretax income performance exceeded the target level of 15% in three of the four years presented below. While there is a general directional relationship of CAP to the performance of non-GAAP pretax income, the amplitude of CAP does not appear to have a direct correlation to the level of non-GAAP pretax income for the reasons discussed above.
2023 CEO Pay Ratio
2023 CEO Pay Ratio As required by Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Dr. Luis Müller, our CEO. For 2023, our last completed fiscal year:
2023 CEO Pay Ratio
| ● | The median of the annual total compensation of all employees of our company (other than our CEO), was $26,748; and |
2023 CEO Pay Ratio
| ● | The annual total compensation of our CEO, as reported in the Summary Compensation Table presented elsewhere in this Proxy Statement, was $6,536,607. |
2023 CEO Pay Ratio
| Based on this information, for 2023 the ratio of the annual total compensation of Dr. Müller, our CEO, to the median of the annual total compensation of all our employees was 244 to 1. |
2023 CEO Pay Ratio
We believe that this pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below. 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. As such, 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. To identify the median compensated employee in 2022, we determined that, as of November 1, 2022, our employee population consisted of approximately 3,140 individuals globally, with 20% of these individuals located in the Americas (primarily in the U.S.), 13% located in Europe (primarily in Germany and Switzerland), and 67% located in Asia (primarily in Malaysia and the Philippines). For the purposes of establishing the median total compensation of all employees in 2023, we determined that the balance of the global workforce remained substantially similar to 2022 and therefore, as allowed under applicable SEC rules, for 2023 we used the same median compensated employee as we had identified in 2022. We selected November 1, 2022, which is within the last three months of 2022, as the date upon which we would identify the “median employee” to allow sufficient time to identify the median employee given the global scope of our operations. We excluded equity compensation as a factor in identifying the median employee as less than 10% of our employee population receives equity grants as part of their compensation. Additionally, we used forecasted 2022 compensation (actual compensation paid January through October 2022 plus estimated compensation for November through December 2022) based on salary or wages, overtime pay, monthly allowances, statutory bonuses, and incentive pay received. Due to the geographical distribution of our employee populations, we also excluded social program contributions and other benefits as these vary greatly from country to country. Using this methodology, we determined that the “median employee” was a full-time, salaried employee located in Malaysia. The median employee’s actual annual total compensation for the 12-month period ending December 31, 2023, was $26,748. This amount includes all wages, overtime pay, statutory and variable incentive payments, allowances and localized personal benefits converted to U.S. Dollars. The 2023 compensation for the median employee was higher than in 2022 when evaluated in local currency although the calculation for the CEO pay ratio analysis shows a lower compensation level in U.S. Dollars.
2023 Grants of Plan-Based Awards
2023 Grants of Plan-Based Awards The following table shows all plan-based awards granted to our NEOs during fiscal year 2023, which ended on December 30, 2023. The stock awards identified in the table below are also reported in the “Outstanding Equity Awards on December 30, 2023” table included herein. Cohu did not grant any stock options to NEOs under the 2005 Plan in fiscal year 2023.
2023 Grants of Plan-Based Awards
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number | Grant Date Fair Value of | | Named Executive Officer | Award Type | Grant Date | Thres- hold ($) | Target ($) | Maxi- mum ($) | Thres- hold (#) | Target (#) | Maxi- mum (#) | of Shares of Stock or Units (#) (3) | Stock and Option Awards ($) (4) | | Luis A. Müller | Cash Incentives | - | 0 | 786,500 | 1,573,000 | - | - | - | - | - | | | Time-based RSUs | 03/14/2023 | - | - | - | - | - | - | 44,004 | 1,637,389 | | | Performance-based RSUs | 03/14/2023 | - | - | - | 0 | 66,006 | 132,012 | - | 3,413,830 | | Jeffrey D. Jones | Cash Incentives | - | 0 | 341,250 | 682,500 | - | - | - | - | - | | | Time-based RSUs | 03/14/2023 | - | - | - | - | - | - | 14,521 | 540,326 | | | Performance-based RSUs | 03/14/2023 | - | - | - | 0 | 21,782 | 43,564 | - | 1,126,565 | | Christopher G. Bohrson | Cash Incentives | - | 0 | 318,750 | 637,500 | - | - | - | - | - | | | Time-based RSUs | 03/14/2023 | - | - | - | - | - | - | 11,001 | 409,347 | | | Performance-based RSUs | 03/14/2023 | - | - | - | 0 | 16,501 | 33,002 | - | 853,432 | | Thomas D. Kampfer | Cash Incentives | - | 0 | 202,500 | 405,000 | - | - | - | - | - | | | Time-based RSUs | 03/14/2023 | - | - | - | - | - | - | 6,600 | 245,586 | | | Performance-based RSUs | 03/14/2023 | - | - | - | 0 | 9,900 | 19,800 | - | 512,028 | | Ian P. Lawee | Cash Incentives | - | 0 | 184,250 | 368,500 | - | - | - | - | - | | | Time-based RSUs | 03/14/2023 | - | - | - | - | - | - | 4,620 | 171,910 | | | Performance-based RSUs | 03/14/2023 | - | - | - | 0 | 6,930 | 13,860 | - | 358,420 |
2023 Grants of Plan-Based Awards
| (1) Amounts shown are estimated possible payouts for fiscal year 2023 under the executive cash incentive plan. These amounts are based on the individual’s 2023 base salary amounts, and position. The maximum amount shown is 200% of the target amount for each of the NEOs. Actual cash incentives received by the NEOs for 2023 are reported in the Summary Compensation Table under the column entitled “Non-Equity Incentive Plan Compensation.” Amounts earned by our NEOs for performance in 2023 are based on the attainment of performance goals for both Cohu and the individual NEO, as described in more detail in “Annual Cash Incentives” in the CD&A above. |
2023 Grants of Plan-Based Awards
| (2) The PSU awards granted to our NEOs in 2023 are subject to certain adjustments resulting from the performance of our total stockholder return (“TSR”) relative to a pre-selected comparator group over the three-year period following the date of grant. The PSU awards granted in 2023 may be earned and vest 100% on the third anniversary of the date of grant. |
2023 Grants of Plan-Based Awards
| (3) The amounts reflect the number of RSUs awarded to each NEO under the 2005 Plan. The RSU awards granted to our NEOs in 2023 vest at the rate of 25% of the shares of our common stock subject to the awards per year. |
2023 Grants of Plan-Based Awards
| (4) The amounts shown are the grant date fair value for stock awards granted in 2023. The assumptions used to calculate the grant date fair value of the awards are set forth in Note 6, “Employee Benefit Plans”, included in Part IV, Item 15(a) of Cohu’s Annual Report on Form 10-K for the year ended December 30, 2023, filed with the SEC. |
Outstanding Equity Awards on December 30, 2023 Table
Outstanding Equity Awards on December 30, 2023 Table The following table shows all outstanding equity awards held by our NEOs at the end of 2023, which ended on December 30, 2023.
Outstanding Equity Awards on December 30, 2023 Table
| | OPTION AWARDS | | | STOCK AWARDS | | | | | | Named Executive Officer | Number of Securities Underlying Unexercised Options Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | Award 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 ($) (2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (4) | | Luis A. Müller | - | - | - | 3/17/2020 | 20,176 (1) | 714,029 | - | - | | | | | | 3/15/2021 | 14,302 (1) | 506,148 | 28,604 | 1,012,296 | | | | | | 3/14/2022 | 41,133 (1) | 1,455,697 | 54,844 | 1,940,929 | | | | | | 3/14/2023 | 44,004 (1) | 1,557,302 | 66,006 | 2,335,952 | | Jeffrey D. Jones | - | - | - | 3/17/2020 | 6,662 (1) | 235,768 | - | - | | | | | | 3/15/2021 | 4,690 (1) | 165,979 | 9,382 | 332,029 | | | | | | 3/14/2022 | 13,299 (1) | 470,652 | 17,733 | 627,571 | | | | | | 3/14/2023 | 14,521 (1) | 513,898 | 21,782 | 770,865 | | Christopher G. Bohrson | - | - | - | 3/17/2020 | 4,222 (1) | 149,417 | - | - | | | | | | 3/15/2021 | 3,088 (1) | 109,284 | 6,178 | 218,639 | | | | | | 3/14/2022 | 8,775 (1) | 310,547 | 11,700 | 414,063 | | | | | | 3/14/2023 | 11,001 (1) | 389,325 | 16,501 | 583,970 | | Thomas D. Kampfer | - | - | - | 3/17/2020 | 3,003 (1) | 106,276 | - | - | | | | | | 3/15/2021 | 2,288 (1) | 80,972 | 4,576 | 161,945 | | | | | | 3/14/2022 | 6,512 (1) | 230,460 | 8,683 | 307,291 | | | | | | 3/14/2023 | 6,600 (1) | 233,574 | 9,900 | 350,361 | | Ian P. Lawee | - | - | - | 3/17/2020 | 2,815 (1) | 99,623 | - | - | | | | | | 3/15/2021 | 2,002 (1) | 70,851 | 4,004 | 141,702 | | | | | | 3/14/2022 | 5,758 (1) | 203,776 | 7,678 | 271,724 | | | | | | 3/14/2023 | 4,620 (1) | 163,502 | 6,930 | 245,253 |
Outstanding Equity Awards on December 30, 2023 Table
| (1) RSUs vest and shares are issued in four equal annual installments beginning one year after the date of grant. |
Outstanding Equity Awards on December 30, 2023 Table
| (2) Based on a closing market price of Cohu’s common stock of $35.39 per share as reported on the Nasdaq Global Select Market on December 30, 2023. |
Outstanding Equity Awards on December 30, 2023 Table
| (3) Reflects PSUs granted under the 2021, 2022 and 2023 PSU program at the target award level. PSUs granted in 2021, 2022 and 2023 may be earned and vest 100% on the third anniversary of their grant. |
Outstanding Equity Awards on December 30, 2023 Table
| (4) Based on a closing price of Cohu’s common stock of $35.39 as reported on the Nasdaq Global Select Market on December 30, 2023. RSUs vest and shares are issued in four equal annual installments beginning one year after the date of grant. |
2023 Option Exercise and Stock Vested Table
2023 Option Exercise and Stock Vested Table The following table shows the value realized upon all stock awards vested and the value realized upon vesting by our NEOs during 2023. No stock options were exercised by our NEOs nor are any stock options outstanding in 2023.
2023 Option Exercise and Stock Vested Table
| | Stock Awards | | | Named Executive Officer | Number of Shares Acquired on Vesting (#) (1) | Value Realized on Vesting ($) (2) | | Luis A. Müller | 170,152 | 6,328,916 | | Jeffrey D. Jones | 56,773 | 2,111,733 | | Christopher G. Bohrson | 36,338 | 1,351,606 | | Thomas D. Kampfer | 26,460 | 984,179 | | Ian P. Lawee | 21,689 | 806,685 |
2023 Option Exercise and Stock Vested Table
| (1) Number of shares acquired on vesting is before reduction for shares withheld to cover tax withholding. Cohu withheld the following number of shares for tax withholding: Dr. Müller, 87,122 shares; Mr. Jones, 28,151 shares; Mr. Bohrson, 18,019 shares, Mr. Kampfer, 13,122 shares; and Mr. Lawee, 9,621 shares. |
2023 Option Exercise and Stock Vested Table
| (2) The value realized equals the number of units that vested multiplied by the per-share closing price of Cohu’s common stock on the vesting date. Amounts presented are gross amounts before required tax withholding. |
2023 Nonqualified Deferred Compensation
2023 Nonqualified Deferred Compensation The Deferred Compensation Plan, as summarized in the Compensation Discussion and Analysis above, permits eligible participants to defer compensation from salary and cash incentives. The Deferred Compensation Plan limits the amount of participant deferrals to 25% of salary and 100% of cash incentives. Cohu may make matching contributions as summarized in the Compensation Discussion and Analysis. Participant and employer contributions, distributions and deemed investment earnings and losses are accumulated in individual deferral investment accounts as established by the Deferred Compensation Plan. The deemed investment gains or losses credited to a participant’s account are based on investment elections made by the participant from prescribed mutual fund investment options. Participants may elect to receive payment of their deferral account in ten or 15 annual installments upon retirement and in lump sum or five, ten or 15 annual installments upon disability, death, termination or change in control of Cohu, as defined in the Deferred Compensation Plan. As of December 30, 2023, none of our NEOs have any amounts deferred under the Deferred Compensation Plan.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The Compensation Committee previously undertook, in consultation with Compensia, a review of its executive agreements. The objective of this review was to independently assess best practices and develop standard agreements to be implemented as the Compensation Committee deemed appropriate among the Company’s executive officers. The Compensation Committee approved a form of executive severance agreement (the “Severance Agreement”) and form of change in control agreement (the “Change in Control Agreement”) for certain of the Company’s executive officers (each, an “Executive”), as described below. The Company first entered into the Severance Agreements and Change in Control Agreements on September 8, 2020. The Severance Agreement provides that if an Executive’s employment is terminated by the Company without Cause, or additionally only in the case of Dr. Müller, if he voluntarily resigns for Good Reason, then, subject to the Executive’s continued compliance with the obligations set forth in the Executive’s Confidentiality and Inventions Agreement and the Executive’s signing and not revoking a separation agreement and release of claims in favor of Cohu, the Executive would be entitled to: (1) any expense reimbursements, wages and other benefits due to Executive under any Company-provided plans, policies and arrangements (the “Accrued Amounts”); (2) a lump sum payment equal to a multiplier (as summarized below) multiplied by the Executive’s annual base salary; and (3) reimbursement for the Executive’s COBRA continuation premiums for the Premium Payment Period (as summarized below). If an Executive’s employment with the Company terminates (A) voluntarily by the Executive (other than for Good Reason in the case of Dr. Müller), (B) for Cause by the Company, or (C) due to Executive’s death or disability, the Executive would not be entitled to receive any severance payments, but in the event of death their estate would be eligible for a pro-rata incentive bonus for the year in which the termination date occurs. The Change in Control Agreement provides that if an Executive’s employment is terminated by the Company without Cause or the Executive voluntarily resigns for Good Reason, in either case beginning 60 days preceding the date of an event constituting a Change in Control and ending on the second anniversary of the date of the event constituting such Change in Control, then, subject to the Executive’s continued compliance with the obligations set forth in the Executive’s Confidentiality and Inventions Agreement and the Executive’s signing and not revoking a separation agreement and release of claims in favor of Cohu, the Executive would be entitled to: (1) the Accrued Amounts; (2) a lump sum payment equal to a multiplier (as summarized below) multiplied by the Executive’s annual base salary; (3) a lump sum payment equal to a multiplier (as summarized below) multiplied by the Executive’s target bonus amount in the year of termination; (4) a lump sum payment equal to the pro-rated portion of Executive’s target bonus amount for the fiscal year in which the termination date occurs; (5) reimbursement for the Executive’s COBRA continuation premiums for the Premium Payment Period (as summarized below); and (6) all of Executive’s then unvested awards relating to the Company’s common stock or equivalent equity awards as assumed, continued or substituted for by an Acquiror, whether stock options, shares of restricted stock, restricted stock units, performance share units, or otherwise, outstanding as of the Termination Date would become vested in full. If an Executive’s employment with the Company terminates (A) voluntarily by the Executive, other than for Good Reason, (B) for Cause by the Company, or (C) due to Executive’s death or disability, the Executive would not be entitled to receive any severance payments, but in the event of death their estate would be eligible for a pro- rata incentive bonus for the year in which the termination date occurs. The Agreements had a three-year Initial Term and were automatically extended for a two-year period starting on September 8, 2023, as neither party had delivered written notice to the other party within six months prior to the completion of the then effective Term that the Agreement would not be extended.
Potential Payments Upon Termination or Change in Control
| | Severance Agreement | | Change in Control Agreement | | | Named Executive Officer | Multiplier | COBRA Premium Payment Period | Multiplier | COBRA Premium Payment Period | | Luis A. Müller President & CEO | 150% | 18 months | 200% | 24 months | | Jeffrey D. Jones Sr. Vice President, Finance & Chief Financial Officer | 100% | 12 months | 150% | 18 months | | Christopher G. Bohrson Sr. Vice President, Chief Customer Officer | 100% | 12 months | 150% | 18 months | | Thomas D. Kampfer Sr. Vice President Corporate Development, General Counsel & Secretary | 100% | 12 months | 150% | 18 months | | Ian P. Lawee Sr. Vice President & General Manager, Semiconductor Test Group | 100% | 12 months | 150% | 18 months |
Potential Payments Upon Termination or Change in Control
Qualifying Termination in Connection with a Change of Control For this purpose, a change in control of Cohu means the occurrence of any of the following, in one or a series of related transactions:
Potential Payments Upon Termination or Change in Control
| (i) Any one person, or more than one person acting as a group (“Person”) acquires ownership of Cohu’s securities that, together with the stock held by such Person, constitutes more than 50% of the total voting power of Cohu’s then outstanding stock; |
Potential Payments Upon Termination or Change in Control
| (ii) A change in the effective control of Cohu which occurs on the date that a majority of members of the Board is replaced during any 12-month period (six-month period in the case of Dr. Müller) by members of the Board whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or |
Potential Payments Upon Termination or Change in Control
| (iii) | The closing of any transaction involving a change in ownership of a substantial portion of Cohu’s assets which occurs on the date that any Person acquires (or has acquired during any 12 month period ending on the date of the most recent acquisition by such Person or Persons) assets from Cohu that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of Cohu immediately prior to such acquisition or acquisitions. |
Potential Payments Upon Termination or Change in Control
The term “change in control” shall not include a consolidation, merger, or other reorganization if upon consummation of such transaction all of the outstanding voting stock of Cohu is owned, directly or indirectly, by a holding company, and the holders of Cohu’s common stock immediately prior to the transaction have substantially the same proportionate ownership and voting control of such holding company after such transaction. A transaction will not be deemed a change in control unless the transaction qualifies as a change in control event for the purposes of Section 409A of the Internal Revenue Code. Additionally, the 2005 Plan provides that in the event of a change in control of Cohu, as defined in the 2005 Plan, should the acquiring corporation not assume or substitute for the outstanding equity awards of Cohu, the exercisability and vesting of all such equity awards will be accelerated, effective as of a date prior to the change in control. In the event of the occurrence of both a change in control and the subsequent termination of employment (as applicable), as of December 30, 2023, the amounts payable to our NEOs would have been as follows:
Potential Payments Upon Termination or Change in Control
| Named Executive Officer | Total ($) | Severance ($) (1) | Annual Bonus ($) (1) | Medical Benefits ($) (2) | RSUs/PSUs ($) (3) | | Luis A. Müller | 13,392,662 | 3,003,000 | 786,500 | 80,810 | 9,522,352 | | Jeffrey D. Jones | 4,712,995 | 1,194,375 | 341,250 | 60,608 | 3,116,762 | | Christopher G. Bohrson | 3,651,608 | 1,115,625 | 318,750 | 41,987 | 2,175,246 | | Thomas D. Kampfer | 2,637,085 | 911,250 | 202,500 | 52,456 | 1,470,879 | | Ian P. Lawee | 2,220,163 | 778,875 | 184,250 | 60,608 | 1,196,430 |
Potential Payments Upon Termination or Change in Control
| (1) Reflects the cash severance benefits payable in the event of a qualifying termination under the Change in Control Agreements for Dr. Müller and Messrs. Jones, Bohrson and Kampfer, and Lawee. These amounts are based on the individual’s 2023 base salary. |
Potential Payments Upon Termination or Change in Control
| (2) Reflects reimbursement for continued health care benefits pursuant to COBRA, 24 months for Dr. Müller, and 18 months for Messrs. Jones, Bohrson, Kampfer and Lawee. |
Potential Payments Upon Termination or Change in Control
| (3) The 2005 Plan provides that in the event of a change in control of Cohu, as defined in the 2005 Plan, should the acquiring corporation not assume or substitute for the outstanding equity awards of Cohu, the exercisability and vesting of all such equity awards will be accelerated, effective as of a date prior to the change in control. Amounts presented above for RSUs and PSUs have been calculated based on the total unvested RSUs and PSUs and the closing price of Cohu’s common stock of $35.39 per share on December 30, 2023, prior to the payment of associated taxes, held by Dr. Müller and Messrs. Jones, Bohrson, Kampfer and Lawee as of December 30, 2023. |
Potential Payments Upon Termination or Change in Control
Estimated Payments Upon a Qualifying Termination Not in Connection with a Change of Control In the event of termination of employment not in connection with a change of control in the case for Dr. Müller and Messrs. Jones, Bohrson, Kampfer and Lawee by Cohu without cause, or by Dr. Müller for Good Reason as of December 30, 2023, the amounts payable to each NEO would have been as follows:
Potential Payments Upon Termination or Change in Control
| Named Executive Officer | Total ($) | Severance ($) (1) | Medical Benefits ($) (2) | | Luis A. Müller | 1,133,108 | 1,072,500 | 60,608 | | Jeffrey D. Jones | 495,405 | 455,000 | 40,405 | | Christopher G. Bohrson | 452,991 | 425,000 | 27,991 | | Thomas D. Kampfer | 439,971 | 405,000 | 34,971 | | Ian P. Lawee | 375,405 | 335,000 | 40,405 |
Potential Payments Upon Termination or Change in Control
| (1) Reflects the cash severance benefits payable in the event of a qualifying termination under Dr. Müller’s and Messrs. Jones’, Bohrson’s, Kampfer’s and Lawee’s respective Severance Agreement. These amounts are based on the individual’s 2023 base salary. |
Potential Payments Upon Termination or Change in Control
| (2) Reflects reimbursement for continued health care benefits pursuant to COBRA,18 months for Dr. Müller, and 12 months for Messrs. Jones, Bohrson, Kampfer and Lawee. |
Potential Payments Upon Termination or Change in Control
Other than as described above, and in the “Employment Agreements” and “Post-Employment Compensation” sections of the Compensation Discussion and Analysis, there are no other benefits or payments that would be paid to our NEOs upon resignation, severance, retirement, termination or a change in control of Cohu.
Potential Payments Upon Termination or Change in Control
| Audit Matters |
Proposal No. 1: Election of Directors
Proposal No. 1: Election of Directors Cohu’s Amended and Restated Certificate of Incorporation divides the directors into three classes whose terms expire at successive annual meetings over a period of three years. One class of directors is elected for a term of three years at each annual meeting with the remaining directors continuing in office. At the meeting, three (3) Class 2 directors are standing for re-election for a term expiring in 2027. The shares represented by proxies in the accompanying form will be voted by the proxy holders in accordance with the instructions given by the voting stockholders. If no specific instructions are given, however, the shares will be voted for the election of the three (3) nominees named below. Should any nominee decline or become unable to accept nomination or election, which is not anticipated, the proxies will be voted for such substitute nominee as may be designated by a majority of the Board of Directors. Each of the three (3) director nominees currently serve as a member of the Board, and there is no family relationship between the nominees, other directors or any of Cohu’s officers. The following biographies describe the skills, qualities, attributes, and experience of the nominees that led our Board to determine that it is appropriate to nominate these directors. Biographies for each of our other continuing directors are also included below. Required Vote Nominees that receive a majority of the votes cast for such nominee’s election (meaning the number of shares voted “For” a nominee must exceed the number of shares voted “Against” such nominee) will be elected as Directors under Proposal No. 1. Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal. Abstentions and broker non-votes will have no effect on the election of directors. Recommendation of the Board
Proposal No. 1: Election of Directors
| The Board of Directors unanimously recommends a vote √ “FOR” the nominees named below. |
Proposal No. 1: Election of Directors
Directors Whose Term Expires in 2027 (if elected) - Class 2
Proposal No. 1: Election of Directors
| Andrew M. Caggia Director since 2014 Age 75 Board Committees: Audit Committee Nominating and Governance (Chair) | Business Experience and Other Directorships Mr. Caggia is the retired Senior Vice President and Chief Financial Officer of SMSC, where he worked from 2000 until his retirement in 2006. Mr. Caggia also served as a director of SMSC from 2001 until its purchase by Microchip Technology Incorporated in 2012. Prior to SMSC, Mr. Caggia was Senior Vice President and Chief Financial Officer of General Semiconductor, Inc. from 1997 to 2000. Experience Qualifications and Attributes We believe Mr. Caggia’s qualifications to sit on our Board include his extensive executive experience in the semiconductor industry and his experience with financial accounting matters for complex global organizations as well as his knowledge of business strategy. Mr. Caggia qualifies as an “audit committee financial expert” under SEC guidelines. Given these qualifications, the Board has determined that it is in the best interests of the Company and its stockholders for Mr. Caggia to continue serving on the Board. |
Proposal No. 1: Election of Directors
| Yon Y. Jorden Director since 2021 Age 69 Board Committees: Audit Committee Nominating and Governance Other Current Public Company Boards: Alignment Healthcare, Inc., Capstone Green Energy Corp. | Business Experience and Other Directorships Ms. Jorden is the retired Executive Vice President and Chief Financial Officer of AdvancePCS, a position she held from 2002 to 2004. Prior to that she served as chief financial officer of three other publicly traded companies: Informix, Oxford Health Plans and WellPoint, Inc. She currently serves as a director of Capstone Green Energy, a position she has held since April 2017; as a director of Alignment Healthcare, Inc., a position she has held since January 2022, and as a director for the not-for-profit Methodist Health System, a position she has held since 2008. She previously served as a director at Maxwell Technologies (2008 to 2017), BioScrip (2014 to 2015), Magnetek, Inc. (2004 to 2013) and U.S. Oncology (2008 to 2010). Experience Qualifications and Attributes We believe Ms. Jorden’s qualifications to sit on our Board include her extensive board and financial executive experience across several industries and her experience with financial accounting matters for complex global organizations. Ms. Jorden qualifies as an “audit committee financial expert” under SEC guidelines. She has vast experience serving on 7 different public company boards, including time serving as chairperson of the Board as well as the audit, compensation and nominating and governance committees. Ms. Jorden is also a board leadership fellow of the National Association of Corporate Directors, demonstrating her commitment and leadership as a board member. |
Proposal No. 1: Election of Directors
| Luis A. Müller Director since 2014 Age 54 Other Current Public Company Boards: Celestica Inc. | Business Experience and Other Directorships Dr. Müller has been the President and Chief Executive Officer of Cohu since December 28, 2014. He also currently serves as a director of Celestica Inc., a position he has held since August 2021. His previous roles at Cohu include serving as President of Cohu’s Semiconductor Equipment Group (“SEG”) from 2011 to 2014; Managing Director of Rasco GmbH from 2009 to 2011; Vice President of Delta Design’s High Speed Handling Group from 2008 to 2009; and Director of Engineering at Delta Design from 2005 to 2008. Prior to joining Cohu, Dr. Müller spent nine years at Teradyne Inc., where he held management positions in engineering and business development. Experience Qualifications and Attributes We believe Dr. Müller’s qualifications to sit on our Board include his extensive executive, including CEO, experience in the semiconductor equipment industry, broad knowledge of business development and strategy, semiconductor technologies, corporate governance and international operations. |
Proposal No. 1: Election of Directors
Information Concerning Other Continuing Directors Not Standing for Election in 2024 Directors Whose Term Expires in 2025 - Class 3
Proposal No. 1: Election of Directors
| Steven J. Bilodeau Director since 2009 Age 65 Board Committees: Compensation Committee (Chair) Nominating and Governance | Business Experience and Other Directorships Mr. Bilodeau is the retired President and Chief Executive Officer of Standard Microsystems Corporation (“SMSC”), a semiconductor manufacturer, where he served from 1999 until 2008. Mr. Bilodeau served as a director of Maxwell Technologies, Inc., from May 2016 and was appointed Chairperson in May 2017 until its sale to Tesla, Inc. in May 2019. Mr. Bilodeau also served as a director of SMSC from 1999 until 2012, including as SMSC’s Chairperson of the Board from 2000 until 2012. Mr. Bilodeau also previously served as a director of NuHorizons Electronic Corp. (2009 to 2011), Conexant Systems, Inc. (2004 to 2011) and Gennum Corporation (2008 to 2012). Experience Qualifications and Attributes We believe Mr. Bilodeau’s qualifications to sit on our Board include his extensive board and executive, including CEO, experience in the high technology and semiconductor industries and his knowledge of international operations, business strategy and corporate governance. Mr. Bilodeau was first appointed Lead Independent Director of the Board in May 2018. |
Proposal No. 1: Election of Directors
| James A. Donahue Director since 1999 (non-executive Director since 2015) Age 75 | Business Experience and Other Directorships Mr. Donahue has been the non-executive Chairperson of Cohu since December 24, 2015. Prior to this he served as Executive Chairperson of Cohu from December 28, 2014 to December 24, 2015, and as Chairperson of the Board from 2010 until 2014. Mr. Donahue was President and Chief Executive Officer of Cohu from 2000 to 2014, and President and Chief Operating Officer of Cohu from 1999 to 2000. He also served concurrently as President of Delta Design, Inc., a wholly owned subsidiary of Cohu from 1983 to 2010. Mr. Donahue also previously served as a director of SMSC from 2003 until 2012. Experience Qualifications and Attributes We believe Mr. Donahue’s qualifications to sit on our Board include his extensive board and executive, including CEO, experience in the semiconductor equipment industry and broad knowledge of business development and strategy, corporate governance and operations. |
Proposal No. 1: Election of Directors
| Andreas W. Mattes Director since 2022 Age 63 Board Committees: Compensation Committee Other Current Public Company Boards: ams-OSRAM AG | Business Experience and Other Directorships Mr. Mattes is the retired Chief Executive Officer, President and board member of Coherent, Inc., a position he held from April 2020 to July 2022. From June 2019 until joining Coherent, he was a Senior Advisor to McKinsey & Company. From 2013 to 2017, he was the Chief Executive Officer and board member of Diebold Nixdorf Incorporated, and also served as its President from 2013 to 2016. Prior to that, Mr. Mattes was Senior Vice President, Global Strategic Partnerships at Violin Memory in 2013. He has also held various senior management positions with Hewlett-Packard Co. From 2008 to 2011, he was the Senior Vice President and General Manager of Hewlett Packard’s Enterprise Services for the Americas, and from 2006 to 2008, he was Hewlett Packard’s Chief Sales Officer for the Enterprise Business. Mr. Mattes spent the first 20 years of his career, from 1985 to 2005, at Siemens, holding a variety of senior leadership positions. Mr. Mattes has over 20 years of public board experience on three continents and he currently also serves on the board of ams-OSRAM AG, a position he has held since June 2023. He previously served on the board of Velodyne Lidar, Inc. until its merger with Ouster in February 2023 (2022-2023). Experience Qualifications and Attributes We believe Mr. Mattes’ qualifications to sit on our Board include his substantial technology industry experience, experience as Chief Executive Officer and board member of publicly traded companies, and extensive experience in managing large global businesses, sales organizations and mergers and acquisitions. |
Proposal No. 1: Election of Directors
Directors Whose Term Expires in 2026 - Class 1
Proposal No. 1: Election of Directors
| William E. Bendush Director since 2011 Age 75 Board Committees: Audit Committee (Chair) Nominating and Governance | Business Experience and Other Directorships Mr. Bendush is the retired Senior Vice President and Chief Financial Officer of Applied Micro Circuits Corporation (“AMCC”), a communications semiconductor company, and during his tenure an S&P 500 constituent company, where he served from 1999 to 2003. Mr. Bendush was a director of Microsemi Corp. from 2003 until the company was acquired in 2018, and also previously served as a director at Conexant Systems, Inc. (2008 to 2011) and Smartflex Systems, Inc. (1993 to 1999). Experience Qualifications and Attributes We believe Mr. Bendush’s qualifications to sit on our Board include his extensive board and executive experience in the semiconductor industry and his experience with financial accounting matters for complex global organizations as well as his knowledge of business strategy. He has been a member of four public company audit committees and chaired three, and also served as Chair of Microsemi’s compensation and nominating and governance committees during portions of his tenure there. Mr. Bendush qualifies as an “audit committee financial expert” under SEC guidelines. |
Proposal No. 1: Election of Directors
| Nina L. Richardson Director since 2019 Age 65 Board Committees: Compensation Committee Other Current Public Company Boards: Resideo Technologies Inc., Silicon Laboratories Inc. | Business Experience and Other Directorships Ms. Richardson served as chief operating officer of GoPro, Inc. from February 2013 to February 2015. Prior to that, she held several executive positions of increasing responsibility at Flex Ltd., a global electronics and manufacturing service provider, leading electronics manufacturing operations with over 1000 employees in multiple geographies. Currently, she serves as managing director of Three Rivers Energy, Inc., a company she co-founded in 2004, and she has been an independent consultant since March 2015. Ms. Richardson also currently serves as a director of Silicon Laboratories Inc., a position she has held since January 2016; and as a director of Resideo Technologies, Inc., a position she has held since October 2018. She previously served as a director at Eargo, Inc. (2020 to 2022), Zayo Group Holdings, Inc. (2015 to 2018), Callidus Software, Inc. (2017 to 2018) and Silicon Graphics International Corp. (“SGI”) (2016). Experience Qualifications and Attributes We believe Ms. Richardson’s qualifications to sit on our Board include her extensive board and executive experience in engineering, manufacturing, sales, supply chain management and global operations. She has held executive positions in a variety of industry sectors including consumer electronics, technology, and manufacturing. Ms. Richardson offers a uniquely broad perspective in that she has been a member of six public company compensation committees and is presently Chair of one public company nominating and governance committee. |