DEF 14A of Microvision, Inc., Apr 29, 2024

DEF 14A of Microvision, Inc.

Filed Apr 29, 2024 · FY20230001493152-24-016952

Open on EDGAR

  1. PROPOSAL ONE—ELECTION OF DIRECTORS

    PROPOSAL ONE—ELECTION OF DIRECTORS Our Board of Directors is elected each year at the Annual Meeting of Shareholders. We currently have seven directors. Upon the recommendation of the Nominating & Governance Committee, the Board has nominated the eight individuals listed below for election at the Annual Meeting, six of whom currently serve as MicroVision directors. The remaining two nominees have not previously served as MicroVision directors. If these individuals are elected, the Board will have eight members immediately following the Annual Meeting and, accordingly, the Board has authorized the increase of its size to eight members effective immediately following the Annual Meeting. These nominees bring a wide variety of relevant skills, professional experience, and backgrounds, as well as diverse viewpoints and perspectives to represent the long-term interests of shareholders and to fulfill the leadership and oversight responsibilities of the Board. If any nominee listed below is unable to stand for election at the Annual Meeting, the persons named as proxies may vote any person designated by the Board to replace the nominee. Alternatively, the proxies may vote for the remaining nominees and leave a vacancy that the Board may fill later, or the Board may reduce the authorized number of directors. As of the date of this Proxy Statement, the Board is not aware that any nominee is or will be unable to stand for election. Proxies received from shareholders, unless directed otherwise, will be voted FOR the election of the nominees listed below. Each director elected at the Annual Meeting will serve until MicroVision’s 2025 Annual Meeting of Shareholders or until they are succeeded by another qualified director who has been elected, or, if earlier, until their death, resignation, or removal. THE BOARD RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE FOLLOWING DIRECTOR NOMINEES. Set forth below are the name, position held, age, and other relevant data pertaining to each of our director nominees. The principal occupation and recent employment history of each director nominee is described below, and the number of shares of common stock beneficially owned by each as of March 1, 2024 is set forth in the section of this Proxy Statement entitled, “Information About MicroVision Common Stock Ownership.”

  2. PROPOSAL ONE—ELECTION OF DIRECTORS

    | Simon Biddiscombe Independent Director | Director since 2018 Age 56 Board Committees: ● Compensation, Chair ● Audit Key Expertise: ● Executive Leadership ● Business Strategy ● Financial & accounting ● Technology & Innovation ● Public Board Service & Governance ● Transportation & Mobility Industries | | Mr. Biddiscombe serves as Chief Financial Officer of privately held Third Wave Automation, a provider of high-reach autonomous forklifts, since August 2022. He also served as Executive Partner at Thomas H. Lee Partners, a premier private equity firm investing in middle market growth companies, from May 2022 to October 2023. Mr. Biddiscombe was Chief Executive Officer and a board member at publicly traded MobileIron, Inc., a security software provider for the digital enterprise protecting corporate data across apps, networks, and clouds, from October 2017 until its sale to Ivanti, Inc. in December 2020. From May 2015 to October 2017, Mr. Biddiscombe served as MobileIron’s Chief Financial Officer. From September 2014 to April 2015, he was Chief Financial Officer at ServiceSource International, Inc., a publicly traded global outsourced go-to-market services provider. He previously served in several executive leadership roles including Chief Financial Officer and Chief Executive Officer at QLogic, Chief Financial Officer at Mindspeed Technologies, and Chief Financial Officer at Wyle Electronics. He began his career at PricewaterhouseCoopers LLP where he spent nine years, including the firm’s Silicon Valley technology accounting and audit practice. Mr. Biddiscombe holds a BA in business studies from the University of Glamorgan and is a Fellow of the Institute of Chartered Accountants in England and Wales. | |

  3. PROPOSAL ONE—ELECTION OF DIRECTORS

    | Robert P. Carlile Chair of the Board & Lead Independent Director | Director since 2017 Age 68 Board Committees: ● Compensation ● Nominating & Governance Key Expertise: ● Executive Leadership ● Business Strategy ● Financial & accounting ● Public Board Service & Governance | | Mr. Carlile became a director in March 2017 and was appointed as Chairman of the Board in June 2022. Mr. Carlile was a partner at KPMG LLP from 2002 to 2016, and a partner at Arthur Andersen LLP from 1987 to 2002. During his 39-year career in public accounting, Mr. Carlile served as the lead audit partner on numerous public company engagements operating across different industries including technology, retail, transportation, bio-science, and manufacturing. In addition to his experience as a lead audit partner, Mr. Carlile held a variety of operating leadership positions at KPMG and Arthur Andersen in the Pacific Northwest. Since 2019, Mr. Carlile has served on the Board of Directors of publicly traded Expeditors International where he is the Chairman of the Board. Mr. Carlile also serves on the Board of Directors of Virginia Mason Franciscan Health and is a past Chairman of the Northwest Chapter Board of the National Association of Corporate Directors (NACD). | | | Jeffrey A. Herbst Independent Director | Director since 2022 Age 59 Board Committees: ● Audit ● Strategic Key Expertise: ● Executive Leadership ● Business Strategy ● Financial & Accounting ● Technology & Innovation ● Public Board Service & Governance | | Mr. Herbst is Co-Founding Managing Partner of GFT Ventures, a venture capital firm focused on investing in early-stage technology companies primarily located in the U.S. and Israel. Prior to launching GFT Ventures in March 2021, Mr. Herbst served in various roles at NVIDIA Corporation from December 2001 to July 2021, most recently serving as Vice President of Business Development where he built an ecosystem of accelerated computing applications spanning the domains of AI, data science, autonomous machines, and graphics and visualization. Prior to that, he practiced as an attorney with Wilson Sonsini Goodrich & Rosati. Mr. Herbst holds a J.D. degree from Stanford University and a B.S. degree with honors in computer science from Brown University. | |

  4. PROPOSAL ONE—ELECTION OF DIRECTORS

    | Peter Schabert Independent Director Nominee Mr. Schabert is currently a management consultant advising companies in the automotive supply industry. He previously served as President and Chief Executive Officer of Beijing Benz Automotive Co., Ltd, from August 2015 until his retirement in April 2017. Mr. Schabert spent 31 years at Daimler AG, serving in various leadership roles, including head of global powertrain production, and site manager of several Mercedes-Benz manufacturing sites serving in locations throughout Germany, China, and the U.S. Mr. Schabert holds a mechanical engineering degree from Technische Universität Braunschweig. | Nominated in April 2024 Age 69 Board Committees: None Key Expertise: ● Executive Leadership ● Business Strategy ● Transportation & Mobility Industries | | Jada Smith Independent Director Nominee Ms. Smith is Senior Vice President, Product Strategy & Delivery at Karma Automotive, a privately held ultra-luxury electric vehicle manufacturer, a role she has held since December 2023. Previously, Ms. Smith served in several roles at Aptiv PLC, a publicly traded global technology company serving the automotive industry. At Aptiv, Ms. Smith served as Senior Program Director, Ford, from February 2022 to November 2022, Global Engineering Director, Software Platform, from November 2020 to August 2022, Global Director of Program Management, Connection Systems, from June 2020 to November 2020, Director Program Management, NA Connection Systems, from September 2019 to June 2020, and Vice President Advanced Engineering from July 2017 to September 2019. Prior to Aptiv, Ms. Smith spent nearly 13 years in various engineering roles at Delphi Automotive PLC, a publicly traded high-technology company serving the automotive and transportation sectors. In 2017, Delphi completed the spin-off transaction that created Aptiv PLC. Since September 2019, Ms. Smith has served on the Board of Directors of the nonprofit Center for Automotive Research. Ms. Smith has a Master of Business Administration Degree from Indiana University Kokomo and a B.S. Degree in Electrical Engineering Technology from Purdue University. | Nominated in April 2024 Age 46 Board Committees: None Key Expertise: ● Business Strategy ● Technology & Innovation ● Transportation & Mobility Industries | | Mark B. Spitzer Independent Director Dr. Spitzer is a Fellow of the American Physical Society and a Senior member of the Institute of Electrical and Electronic Engineers. Beginning in 2012, Dr. Spitzer served as the Director of Operations for Project Glass at Google X (now X Development LLC), moving to the virtual reality team at Google in 2015 and retiring from Google in 2017. Prior to Google, Dr. Spitzer founded The MicroOptical Corporation (eventually renamed Myvu Corporation) in 1996, where he served as Chief Executive Officer. In the early 1990s, Dr. Spitzer served as Principal Scientist at Kopin Corporation. In 2014, Dr. Spitzer received the Special Recognition Award from the Society for Information Display for contributions to the development of active-matrix liquid-crystal microdisplays, microdisplay viewing optics, and wearable computer technology. He has 70 patents in the fields of photovoltaics, micro-displays, micro-electromechanical systems (MEMS), optics, augmented reality and virtual reality. Dr. Spitzer received a B.A. with distinction in physics at Boston University and a Ph.D. in physics at Brown University. | Director since 2020 Age 70 Board Committees: ● Nominating & Governance ● Strategic, Chair Key Expertise: ● Executive Leadership ● Business Strategy ● Technology & Innovation | | Sumit Sharma Chief Executive Officer & Director | Director since 2020 Age 50 Key Expertise: ● Executive Leadership ● Business Strategy ● Technology & Innovation ● Transportation & Mobility Industries | | Mr. Sharma has served as Chief Executive Officer of MicroVision, Inc. since February 2020, and served as Chief Operating Officer from June 2018 to February 2020, after serving as Vice President of Product Engineering and Operations since February 2017 and Vice President and Senior Director of Operations since September 2015. Prior to MicroVision, from April 2015 to September 2015, he was a Product Development and Operations consultant at BlueMadison Consulting. From November 2013 to March 2015, he was the Senior Director, Advanced Manufacturing Operations and Technology Development at Jawbone. From March 2011 to October 2013, he was the Head of Manufacturing Operations for project GLASS at Google. Mr. Sharma has extensive experience in optics, wearable technology, product development and qualification for automotive industry. Mr. Sharma also has deep experience in global operations and developing strategic partnerships. A patent holder, Mr. Sharma received his baccalaureate degree in engineering from New Jersey Institute of Technology. | |

  5. PROPOSAL ONE—ELECTION OF DIRECTORS

    | Brian V. Turner Independent Director | Director since 2006 Age 64 Board Committees: ● Audit, Chair ● Strategic Key Expertise: ● Executive Leadership ● Business Strategy ● Financial & Accounting ● Public Board Service & Governance | | Mr. Turner serves as Chairman of the Board of Directors and Audit Committee of Iron Horse Acquisitions Corp., a blank check company that consummated its initial public offering in December 2023. Mr. Turner also actively serves on the board of directors of several privately held companies. His extensive executive experience includes serving as Chief Financial Officer of Coinstar Inc., a provider of automated retail solutions, from 2003 to 2009. Prior to that, from 2001 to 2003, he served as Senior Vice President of Operations, Chief Financial Officer and Treasurer of RealNetworks, Inc., a digital media and technology company, and from 1999 to 2001, he was with BSquare Corp., a software company, serving as President and earlier as Chief Financial Officer. From 1995 to 1999, Mr. Turner was Chief Financial Officer and Vice President of Administration of Radisys Corp., an embedded software company. Mr. Turner’s experience also includes 13 years at PricewaterhouseCoopers LLP. Mr. Turner served on the board of directors of Cray Inc. until its sale to Hewlett Packard Enterprises in September 2019. Mr. Turner holds a Bachelor of Business Administration degree from the University of Washington. | |

  6. Director Compensation for 2023

    Director Compensation for 2023 The following table provides information concerning the compensation of our non-employee directors during the year ended December 31, 2023.

  7. Director Compensation for 2023

    | Name | Fees Earned or Paid in Cash | Stock Awards (2)(3) | Option Awards(4) | Total | | Simon Biddiscombe | $90,000 | $141,386 | — | $231,386 | | Robert P. Carlile | $125,000 | $141,386 | — | $266,386 | | Judith M. Curran | $85,000 | $141,386 | — | $226,386 | | Jeffrey A. Herbst | $75,000 | $141,386 | — | $216,386 | | Seval Oz (1), former director | $18,750 | — | — | $18,750 | | Mark B. Spitzer | $75,000 | $141,386 | — | $216,386 | | Brian V. Turner | $95,000 | $141,386 | — | $236,386 |

  8. Director Compensation for 2023

    | (1) Ms. Oz departed from the Board in connection with our 2023 annual shareholder meeting on May 17, 2023. | | (2) The amounts reported reflect the aggregate grant date fair value, excluding the effect of estimated forfeitures, of awards granted in the year shown pursuant to our 2022 Equity Incentive Plan, determined in accordance with financial accounting rules (FASB ASC Topic 718), rather than an amount paid to or realized by the director. For a discussion of valuation assumptions for these awards, see Note 11 to our Notes to Financial Statements included in our annual report on Form 10-K for the most recently completed fiscal year. | | (3) As of December 31, 2023, each of our non-employee directors held an outstanding RSU award covering 22,878 shares of MicroVision common stock. Additionally, Mr. Spitzer, pursuant to a deferral election for tax planning purposes, deferred settlement of 22,878 RSUs granted in 2023. In accordance with Mr. Spitzer’s deferral election the vested shares to be issued in settlement of such RSUs will be delivered to him when he ceases to provide services to us or upon our change of control. | | (4) As of December 31, 2023, the number of outstanding shares underlying option awards for each of our non-employee directors was 30,000 for each of Mr. Biddiscombe, Mr. Carlile, Ms. Curran, and Mr. Spitzer, 7,500 for Ms. Oz, and 0 for Mr. Herbst and Mr. Turner. |

  9. Director Compensation for 2023

    All directors are reimbursed for reasonable travel and other out-of-pocket expenses incurred in attending meetings of the Board. We believe it is important to have a compensation policy for non-employee directors that enables us to attract and retain skilled board members with relevant expertise. Our Director Compensation Policy was revised May 2021 to provide a total annual compensation approach that is split between cash and equity based on dollar value. Under the policy, base cash compensation is $75,000 for each director. Board and committee chairs receive additional cash compensation that reflects additional responsibilities: Board chair, $50,000; audit committee chair, $20,000; compensation committee chair, $15,000; and nominating & governance committee chair, $10,000. Independent Directors are generally required to serve on two committees. Cash is paid in equal quarterly installments. Annual equity compensation for each director is in the form of an award of RSUs equal to $100,000 on the date of grant. The number of shares granted to non-employee directors is based on the average closing price of our common stock over the 20 trading days prior to the Annual Meeting of Shareholders. Equity vests in equal quarterly installments, with the final installment vesting the earlier of the one-year anniversary of the grant date or the day before the next Annual Meeting. New directors do not receive a separate initial fee or equity grant but receive cash and an equity grant on a pro rata basis depending on the director’s start date with us.

  10. Executive Summary

    Executive Summary Our Business and Strategy. MicroVision is a global developer and supplier of lidar hardware and software solutions focused primarily on automotive lidar and advanced driver-assistance systems (ADAS) markets where we can deliver safe mobility at the speed of life. We offer a suite of light detection and ranging, or lidar, sensors and perception and validation software to automotive OEMs, for ADAS and autonomous vehicle (AV) applications, as well as to complementary markets for non-automotive applications including industrial, robotics and smart infrastructure. Our long history of developing and commercializing the core components of our lidar hardware and related software, combined with the experience of the team acquired from Ibeo Automotive Systems GmbH (Ibeo) in January 2023 with automotive-grade qualification, gives us a compelling advantage as a development and commercial partner. For the automotive market, our integrated solution combines our MEMS-based dynamic-range lidar sensor and perception software, to be integrated on our custom ASIC, targeted for sale to premium automotive OEMs and Tier 1 automotive suppliers. Our ADAS solution is intended to leverage edge computing and custom ASICs to enable our hardware and perception software to be integrated into an OEM’s ADAS stack. In addition to our dynamic-range and long-range MAVIN sensor and perception software solution for the automotive market, our product suite includes our short-range flash-based MOVIA lidar sensor, for automotive and industrial applications, including smart infrastructure, robotics, and other commercial segments. Also, our validation software tool, the MOSAIK suite, is used by OEMs and other customers including Tier 1s for validating vehicle sensors for ADAS and AV applications. The tool includes software that automates the manual data classification or annotation process, significantly reducing the time and resources required by OEMs to validate their ADAS and AV systems. Our Financial Results. Revenue in 2023 was $7.3 million, which was significantly higher than 2022 revenue of $0.7 million; gross profit in 2023 was $4.5 million, which was also significantly higher than 2022 gross profit of $0.6 million. Although our development and productization efforts are now solely focused on our lidar sensors and related software solutions, our revenue in the past two fiscal years was largely derived from one customer, Microsoft Corporation, related to components that we developed for a high-definition display system. This arrangement generated royalty income, which will not continue in future periods. Throughout 2023, we invested heavily in our growth and strategic positioning to commercialize our products. In particular, in January 2023 we acquired certain strategic assets of Germany-based Ibeo, allowing us to expand our product portfolio, employee base, and automotive qualification expertise. With the acquisition, as well as other actions to promote our strategic goals, our R&D expenses grew to $56.7 million in 2023 from $30.4 million in 2022, and SG&A expenses grew to $36.7 million in 2023 from $24.0 million in 2022. We ended 2023 with a cash and investments balance of approximately $73.8 million, compared to $82.7 million at the end of 2022, which we believe evidences our fiscal discipline and a focus on maximizing cash resources. Our Pay-for-Performance Philosophy. With a focus on commercialization, and business development goals, including deep customer engagement with our products through RFI and RFQ processes and sample sales, we designed our compensation program across the entire company to emphasize performance and drive the team toward a common set of objectives. For our employees, we continued our milestone equity award program, which bases a portion of their compensation on the achievement of collective performance goals. Pursuant to this program our global engineering teams were motivated to collaboratively work toward quarterly development objectives in order to earn grants of restricted stock units, or RSUs. Once earned and granted, the milestone awards became subject to time-based vesting over approximately two years. We have a similar performance-based philosophy for the design of our executive compensation program. The leadership team, led by CEO Sumit Sharma, drove our efforts to advance our strategic objectives and make significant progress on ambitious product and business development goals. During 2023, we successfully integrated our global team, products and technologies, following the closing of the Ibeo acquisition in January 2023, participated in RFI and RFQ processes with leading automotive OEMs, expanded our direct sales pipeline and invested in our manufacturing capabilities to build out inventory to support direct sales and position ourselves to scale production capabilities. 2023 Compensation Highlights. A central compensation focus in 2023 was to continue to motivate our global leadership team and workforce to drive the company toward success, primarily in business development and supporting customer engagement, to enhance long-term value creation for MicroVision and increase the trading price of our stock over the long-term. Comparing our 2023 executive compensation to our peers (see “The Role of Peer Groups” below for more information on our peer group):

  11. Executive Summary

    | ● | Base salaries for our executives were below the median. | | ● | Target total cash compensation, which included a 40% short-term incentive bonus target for Mr. Verma and Ms. Markham, was below the median for all three named executive officers and Mr. Sharma had no target bonus opportunity and was not paid a bonus for 2023. | | ● | No equity compensation was awarded during 2023 to our executives, other than Mr. Sharma pursuant to the terms of his employment agreement entered into in 2021. | | ● | The value of total compensation for all three named executive officers as reported in the Summary Compensation Table in this proxy statement was below the median of our 2022 peer group used by the Compensation Committee when they established 2023 compensation. |

  12. Executive Summary

    | ● | Base annual salary, which is subject to annual review by our Board was increased to $530,000 during 2023. This was the first increase to Mr. Sharma’s base salary since entering into his employment agreement in April 2021. Mr. Sharma’s increased base salary of $530,000 was below the median as compared to our 2022 peer group that was used as context in 2023. | | ● | No short-term incentive bonus opportunity until April 2024 and no bonus was paid for 2023. | | ● | To strongly align the interests of our CEO and our shareholders, pursuant to his employment agreement Mr. Sharma was entitled to a special equity award of 1.2 million shares in the aggregate, comprised of four annual grants of 300,000 shares, subject to his continued employment on each grant date. Mr. Sharma was granted this annual award in each of 2021, 2022, 2023, and 2024. | | ● | Although his employment agreement was scheduled to terminate in April 2024, the Board and Mr. Sharma agreed to extend the agreement, with no other modifications of terms, until a new agreement is effectuated. |

  13. Executive Compensation Philosophy and Elements

    | Base Salary | Base salaries for our executives are primarily based on the role, taking into account competitive market compensation paid by other companies in our peer group for comparable positions. Each named executive officer’s base salary is also determined by reviewing the other components of an executive’s compensation to ensure that the total compensation is in line with the Compensation Committee’s overall compensation philosophy, recognizing the opportunity for long-term equity and cash bonus. | | Annual Performance-Base Incentive Bonus | The Compensation Committee believes that a portion of each executive’s total cash compensation should be based on the company’s performance. The Compensation Committee believes that structuring a significant portion of each executive’s annual cash compensation as a short-term incentive bonus, and the contingent nature of that compensation, induces an executive to drive toward achievement of both the short- and long-term goals of the company. The amount of the bonus depends generally on the level of company performance, with a target set as a percentage of base salary. The Compensation Committee approves the target bonus percentages and the actual bonus awards for all executives, except the CEO. The amount of any bonus actually awarded to executives is determined solely in the discretion of the Compensation Committee, or by the Board in the case of our CEO, based on achievement of preestablished performance objectives. For 2023, Mr. Verma and Ms. Markham were eligible to earn a target cash incentive bonus of 40% of their base salary based upon achievement of preestablished performance objectives for 2022 and were also eligible for the same target bonus for performance in 2023. Mr. Sharma was not eligible for a short-term bonus opportunity in 2023 in light of his special 2021 equity award pursuant to his employment agreement and was paid no bonus in 2023. | | Long-Term Equity Incentive Awards | A key component of our executive compensation program, equity awards, both time-based and performance-based, are designed to attract and retain executive officers and to motivate them to enhance shareholder value by aligning the financial interests of executives with those of shareholders. |

  14. Executive Compensation Philosophy and Elements

    The Roles of our Board, Compensation Committee and Chief Executive Officer. Our Compensation Committee’s purpose is to discharge the Board of Director’s responsibilities relating to the compensation of our executive officers and the adoption of policies that govern our compensation and benefit programs, other than with respect to our CEO’s compensation. Our Compensation Committee reviews and recommends the CEO’s compensation, which is subject to the approval of the Board. The Board is able to make any adjustments that it may determine are appropriate with respect to our CEO’s compensation. The Compensation Committee determines all compensation for our other named executive officers. At the invitation of our Compensation Committee, our CEO provides input regarding the performance and appropriate compensation of the other named executive officers. The Compensation Committee gives considerable weight to the CEO’s assessment of the other named executive officers because of his direct knowledge of each executive’s role, performance and contributions. During 2023, our CEO attended part or all of each Compensation Committee meeting at the request of the Committee. However, the Compensation Committee ultimately discussed and determined each executive officer’s compensation without the executive officer present. The Role of the Compensation Consultant. Our Compensation Committee has selected and directly retains the services of Frederic W. Cook & Co., Inc. (“F.W. Cook”), an independent executive compensation consulting firm. F.W. Cook does not provide any other services to MicroVision and works with our management only on matters for which the Compensation Committee is responsible. The Compensation Committee has assessed the independence of F.W. Cook pursuant to SEC rules and concluded that no conflict of interest exists that would prevent F.W. Cook from serving as an independent consultant to the Compensation Committee. The Compensation Committee periodically seeks input from F.W. Cook on a range of external market factors, including evolving compensation trends, appropriate peer companies and market survey data. F.W. Cook also provides general observations on our compensation programs, but it does not determine or recommend the amount or form of compensation for our named executive officers. A representative of F.W. Cook attends Compensation Committee meetings from time to time, when requested by the Compensation Committee. The Role of Peer Groups. In 2022, the Compensation Committee, with input from F.W. Cook reviewed the composition of the peer group established by the Compensation Committee in 2021 and determined to remove the following larger cap or acquired companies from the peer group: Plug Power, Rapid 7, MaxLinear and Xperi and add generally smaller cap technology companies: Advent Technologies, CyberOptics Corporation, Luminar Technologies, and Velodyne Lidar. The 2022 peer group, was used by the Compensation Committee for the purpose of evaluating the compensation arrangement of our CEO in order to make a recommendation to our Board in their annual evaluation of the CEO’s compensation for 2023. The 18 companies in the 2022 peer group are publicly traded, U.S.-based technology companies.

  15. Executive Compensation Philosophy and Elements

    *Added to the 2022 peer group to replace the following companies from our 2021 peer group: Plug Power, Rapid 7, MaxLinear and Xperi. (1) After establishing our 2022 Peer Group, in February 2023, Velodyne Lidar merged with Ouster, Inc. (2) After establishing our 2022 Peer Group, in November 2022, Nordson Corporation acquired CyberOptics Corporation. We consider competitive market data regarding compensation as context for compensation decisions, but we do not rely solely on market data. Management and the Compensation Committee incorporate flexibility into our compensation programs and the assessment process so that we are able to respond to and adjust for the evolving business environment and the value delivered by our named executive officers. In addition to competitive data, we may take into account a variety of other factors, such as general market conditions, internal equity, an individual’s level of responsibilities, as well as an individual’s recent or future expected contributions. Consideration of Say-on-Pay Vote Results. We provide our shareholders with the opportunity to cast an annual advisory vote on executive compensation. At our 2023 annual meeting of shareholders, which took place last May, our shareholders approved the compensation of our named executive officers as disclosed in our 2023 proxy statement with approximately 93% of the votes cast in favor of the proposal. To enhance engagement with our large base of retail shareholders, management may hold virtual meetings or “fireside chats” with groups of shareholders at various times throughout the year. The Compensation Committee will continue to consider the results of the annual say-on-pay vote and specific shareholder input in determining 2024 and future compensation programs for our executive officers.

  16. Summary Compensation Table

    Summary Compensation Table The following table provides information regarding the compensation paid to, or earned by, each of our named executive officers during the last three fiscal years.

  17. Summary Compensation Table

    | Name and Principal Positions | Fiscal Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Sumit Sharma (5) | 2023 | 462,917 | — | 4,245,000 | — | — | 18,812 | 4,726,729 | | Chief Executive Officer | 2022 | 300,000 | — | 8,571,000 | — | — | 9,000 | 8,880,000 | | | 2021 | 294,622 | 300 | 4,245,000 | — | — | 8,700 | 4,548,622 | | Anubhav Verma | 2023 | 400,000 | — | — | — | — | — | 400,000 | | Chief Financial Officer | 2022 | 400,000 | 160,000 | 3,090,000 | — | — | — | 3,650,000 | | | 2021 | 46,513 | 75,000 | 1,510,563 | — | — | — | 1,632,076 | | Drew G. Markham | 2023 | 372,000 | — | — | — | — | 9,900 | 381,900 | | General Counsel, VP People Operations | 2022 | 372,000 | 148,800 | 1,854,000 | — | — | 9,150 | 2,383,950 | | | 2021 | 151,042 | 59,000 | 927,600 | — | — | 4,188 | 1,141,830 |

  18. Summary Compensation Table

    | (1) Discretionary bonuses paid in 2023 to Mr. Verma and Ms. Markham, were approved by the Compensation Committee on May 15, 2023, and attributed to the achievement of certain strategic objectives during fiscal year 2022. As further described in the Compensation Discussion and Analysis, Mr. Verma and Ms. Markham are each eligible to earn a performance-based bonus target of 40% of their base salaries based upon performance in 2023. The Compensation Committee has not yet made bonus determinations for such bonuses and the Compensation Committee has not yet set the date of such determinations. |

  19. Summary Compensation Table

    | (2) The amounts reported reflect the aggregate grant date fair value, excluding the effect of estimated forfeitures, of awards granted or modified in the year shown pursuant to our 2020 Incentive Plan or 2022 Equity Incentive Plan, determined in accordance with financial accounting rules (FASB ASC Topic 718), rather than an amount paid to or realized by the executive officer. For a discussion of valuation assumptions for these awards, see Note 11 to our Notes to Financial Statements included in our annual report on Form 10-K for the most recently completed fiscal year. For PRSUs granted in 2022, the grant date fair value reported assumes maximum level of achievement. |

  20. Summary Compensation Table

    | (3) No short-term incentive bonus opportunities related to preestablished performance objectives were articulated relating to 2023 performance. |

  21. Summary Compensation Table

    | (4) With respect to Mr. Sharma for 2023, $8,912 of the amount included in this column reflects tax preparation services for Mr. Sharma’s Germany tax filings for 2022. During 2023, we did not pay any tax equalization payments to Mr. Sharma. We may in the future pay a tax equalization payment to Mr. Sharma with respect to his 2023 tax year once his U.S. and Germany tax returns for 2023 are finalized. Please see “2023 Compensation—Our Chief Executive Officer—Tax Equalization” for additional information. The remaining amounts included in this column generally consist of matching contributions under MicroVision’s 401(k) plan of 50% of the first 6% of eligible pay contributed to the 401(k) plan and which benefit is available to all of the company’s employees. |

  22. Summary Compensation Table

    | (5) From January 1, 2023 through March 31, 2023, Mr. Sharma’s salary was $300,000. Effective as of April 1, 2023, Mr. Sharma’s salary was increased to $530,000. |

  23. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table provides information regarding the amount of equity awards granted to our named executive officers during the fiscal year ended December 31, 2023. Only Mr. Sharma was granted an equity award in 2023.

  24. Grants of Plan-Based Awards

    | | | | Equity Grants at Target(1) | | | Name | Grant Date | Date of Compensation Committee Action to Grant Award | All Other Stock Awards # of Shares of Stock or Units (#)(1) | Grant Date Fair Value of Stock Awards ($)(2) | | Sumit Sharma | 04/10/2023 | 05/06/2021 | 300,000 | $4,245,000 | | Anubhav Verma | — | — | — | — | | Drew G. Markham | — | — | — | — |

  25. Grants of Plan-Based Awards

    | (1) The number of shares reported in this column represent RSUs granted under our 2022 Equity Incentive Plan, pursuant to Mr. Sharma’s employment agreement and which is described in more detail in the Compensation Discussion & Analysis. |

  26. Grants of Plan-Based Awards

    | (2) The dollar amounts reported in this column reflect the aggregate grant date fair value, excluding the effect of estimated forfeitures, of the awards granted in the most recently completed fiscal year pursuant to our 2022 Equity Incentive Plan, determined in accordance with financial accounting rules (FASB ASC Topic 718) rather than an amount paid to or realized by the executive officer. For a discussion of valuation assumptions for these awards, see Note 11 to our Notes to Financial Statements included in our annual report on Form 10-K for the most recently completed fiscal year. As described in Note 11, the grant date fair value of the 300,000 RSUs to Mr. Sharma is based on the closing price of our common stock on May 6, 2021, the date of grant of the full equity award for accounting purposes. |

  27. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The following table provides information regarding the holdings of stock options and RSUs by each of our named executive officers as of the end of our most recently completed fiscal year. The market value of RSUs is based on the closing price of MicroVision common stock on the Nasdaq Stock Market on December 29, 2023, which was $2.66.

  28. Outstanding Equity Awards at Fiscal Year End

    | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock that Have Not Vested ($) | | Sumit Sharma | 10,000 | | 3.16 | 10/7/2025 | | | | | 25,000 | | 1.89 | 6/1/2026 | | | | | 65,000 | | 1.67 | 2/8/2027 | | | | | 90,348 | | 0.73 | 5/22/2029 | | | | | | | | | 2,800,000(1) | $7,448,000 | | Anubhav Verma | — | — | — | — | 50,296(2) | $133,787 | | | | | | | 2,000,000(1) | $5,320,000 | | Drew G. Markham | — | — | — | — | 20,000(3) | $53,200 | | | | | | | 1,200,000(1) | $3,192,000 |

  29. Outstanding Equity Awards at Fiscal Year End

    | (1) The following percentages of PRSUs will become eligible to vest if the closing price of our common stock reaches or exceeds the stated price thresholds for at least 20 consecutive trading days during the performance period through December 31, 2025: 10% at $12.00, 30% at $18.00, 30% at $24.00, and 30% at $36.00. If the performance goals are met, the portion of the PRSUs deemed earned will become subject to time-based vesting in equal quarterly installments over two years starting from the date on which the goal is achieved. | | (2) The RSUs are scheduled to vest over four years, with 10% vesting on March 16, 2022, 30% on November 16, 2022, 30% on November 16, 2023, 20% on November 16, 2024, and the final 10% on November 16, 2025, with each such vesting event subject to continued employment with MicroVision on the respective vesting date. | | (3) The RSUs are scheduled to vest over three years, with 5,000 units vesting on February 10, 2022, 15,000 units vesting on August 10, 2022, and 20,000 units vesting on each of August 10, 2023 and August 10, 2024, with each such vesting event subject to continued employment with MicroVision on the respective vesting date. |

  30. Option Exercises and Stock Vested

    Option Exercises and Stock Vested The following table provides information regarding options exercised and restricted stock unit awards vested for our named executive officers during the fiscal year ended December 31, 2023.

  31. Option Exercises and Stock Vested

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (3) | Number of Shares Acquired on Vesting (#) (1) | Value Realized on Vesting ($) (2) | | Sumit Sharma | — | — | 300,000 | $729,000 | | Anubhav Verma | — | — | 50,296 | $116,687 | | Drew G. Markham | — | — | 20,000 | $55,200 |

  32. Option Exercises and Stock Vested

    | (1) Of the amounts shown in this column, MicroVision sold the following number of shares to cover tax withholding obligations: 75,511 shares for Mr. Sharma, 11,841 shares for Mr. Verma, and 4,785 shares for Ms. Markham. | | (2) Value realized equals the fair market value of MicroVision common stock on the vesting date, multiplied by the number of shares that vested. | | (3) Value realized on exercise is the number of shares for which the options were exercised, multiplied by the difference between the closing price of MicroVision common stock on the exercise date and the applicable exercise price per share of the options. |

  33. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control The following table reflects the amount of compensation that would have been payable to each of our named executive officers in the event of the termination of such executive’s employment under certain circumstances, assuming that (1) the triggering event took place on December 29, 2023, and (2) the price per share of our common stock was $2.66, which was the closing market price on December 29, 2023.

  34. Potential Payments upon Termination or Change in Control

    | Name | Benefit | Termination Not in Connection with a Change in Control | Termination In Connection with a Change in Control | Death($) | Disability($) | | Sumit Sharma | Salary Severance (1) | $530,000 | $530,000 | — | — | | | Equity award grant (2) | — | $798,000 | — | — | | | Health care coverage (3) | $7,412 | $7,475 | $7,412 | $7,412 | | Anubhav Verma | Salary Severance (4) | — | $400,000 | — | — | | | Bonus Severance (4) | — | $160,000 | — | — | | | Equity award vesting acceleration (5) | — | $133,787 | — | — | | | Health care coverage (6) | — | $7, 475 | — | — | | Drew G. Markham | Salary Severance (4) | — | $372,000 | — | — | | | Bonus Severance (4) | — | $148,800 | — | — | | | Equity award vesting acceleration (5) | — | $53,200 | — | — | | | Health care coverage (6) | — | $7, 475 | — | — |

  35. Potential Payments upon Termination or Change in Control

    | (1) If the company terminates Mr. Sharma’s employment other than for “cause” or if Mr. Sharma terminates employment for “good reason” prior to the end of the term set forth in his employment agreement with the company, he will be eligible to receive continued payment of his base salary for a period of 12 months. If a change of control occurs and the company terminates Mr. Sharma’s employment other than for “cause” during the term and within two years following such change of control, then, in lieu of the severance payment described in the previous sentence, Mr. Sharma would be entitled to receive a lump sum payment equal to one year of base salary at the rate in effect at the date of termination or, if higher, on the date of the change of control. |

  36. Potential Payments upon Termination or Change in Control

    | (2) If, during Mr. Sharma’s employment, MicroVision experiences a change of control, the ungranted portion of the Annual CEO RSUs will be granted as a single fully vested award to Mr. Sharma sufficiently in advance of the closing of the change of control such that he can participate in the transaction as a shareholder with respect to the shares of stock underlying such award. |

  37. Potential Payments upon Termination or Change in Control

    | (3) If the company terminates Mr. Sharma’s employment other than for “cause” or if Mr. Sharma terminates employment for “good reason” prior to the end of the term set forth in his employment agreement with the company, he will receive reimbursement for the company’s portion of group medical, dental and vision insurance premiums for up to 12 months following such termination. If a change of control occurs and the company terminates Mr. Sharma’s employment other than for “cause” during the term and within two years following such change of control, then, in lieu of the severance benefits described in the previous sentence, the company will pay the full cost of Mr. Sharma’s continued participation in the company’s group health and dental plans for up to one year. If Mr. Sharma’s employment is terminated due to his death, or if he becomes disabled during his employment through any illness, injury, accident or condition of either a physical or psychological nature and, as a result, is unable to perform substantially all of his duties and responsibilities hereunder, with or without reasonable accommodation as required by law, for a period of more than one hundred twenty (120) days during any period of three hundred and sixty-five (365) consecutive calendar days, then MicroVision will make provision for contribution of the employer-portion of premiums under COBRA for a period of up to 12 months for Mr. Sharma and his dependents, as applicable. |

  38. Potential Payments upon Termination or Change in Control

    | (4) If the named executive officer’s employment is terminated on or during the two-year period following a change of control, for any reason other than by the company for cause or by the named executive officer for good reason, the company will pay the named executive officer an amount equal to one year of base salary at the rate in effect at the date of termination or, if higher, on the date of the change of control, plus a payment equal to the target bonus for which the named executive officer is eligible. |

  39. Potential Payments upon Termination or Change in Control

    | (5) If the named executive officer’s employment is terminated on or during the two-year period following a change of control, for any reason other than by the company for cause or by the named executive officer for good reason, all options held by the named executive officer which are not exercisable, and which have not been exercised and have not expired or been surrendered or cancelled, will become initially exercisable upon termination and will otherwise be and remain exercisable in accordance with their terms, and all other equity-based compensation awards granted to the participant, including, restricted stock and restricted stock units, will become vested and become free of restrictions. |

  40. Potential Payments upon Termination or Change in Control

    | (6) If the named executive officer’s employment is terminated on or during the two-year period following a change of control, for any reason other than by the company for cause or by the named executive officer for good reason, the company will pay the full cost of the named executive officer’s continued participation in the company’s group health and dental plans for up to one year. |

  41. Potential Payments upon Termination or Change in Control

    Effective April 8, 2021, Mr. Sharma and the company entered into an employment agreement that provides for payments to Mr. Sharma upon certain terminations of employment, including in respect of a change of control. The employment agreement with Mr. Sharma provides that if the company terminates his employment other than for “cause” or if Mr. Sharma terminates employment for “good reason” (each as defined in the agreement) prior to the end of the term, in addition to receiving earned but unpaid pay and unreimbursed business expenses, he will be eligible to receive continued payment of his base salary for a period of 12 months and reimbursement for the company’s portion of group medical, dental and vision insurance premiums for up to 12 months following such termination, subject to possible early termination if Mr. Sharma and his dependents are no longer entitled to such coverage under COBRA or company plans. If a change of control occurs and the company terminates Mr. Sharma’s employment other than for “cause” during the term and within two years following such change of control, then, in lieu of the severance payments described above, Mr. Sharma would be entitled to receive a lump sum payment equal to one year of base salary at the rate in effect at the date of termination or, if higher, on the date of the change of control. In addition, the company will pay the full cost of Mr. Sharma’s continued participation in the company’s group health and dental plans for one year or, if less, for so long as he remains entitled to continue such participation under applicable law. Mr. Sharma is not entitled to receive any tax gross-up payment for any “golden parachute” excise tax, as described in Section 280G and Section 4999 of the Code, incurred in respect of payments or benefits payable under Mr. Sharma’s employment agreement or otherwise. If any payments or benefits would be subject to such excise tax under Section 280G and Section 4999 of the Code, they will be reduced if and to the extent the reduction is more favorable to Mr. Sharma on an after-tax basis. The severance benefits provided for in Mr. Sharma’s employment agreement are conditioned on Mr. Sharma delivering an effective release of claims in favor of the company within the timeframe specified in the agreement. Mr. Verma and Ms. Markham are employed at will and do not have employment agreements. Under the 2013 and 2020 Incentive Plans, 100% of each of Mr. Sharma’s options that have not been exercised will become fully vested and immediately exercisable upon a change of control of the company that does not result in an assumption, substitution or payoff of the award by the acquiring company. Mr. Verma and Ms. Markham do not hold any options. In addition, 100% of each named executive officer’s restricted stock units will become fully vested upon a change of control of the company if they are not assumed. The 2022 PRSUs granted to each of the named executive officers’ are not entitled to any vesting in connection with a change of control unless the specific stock price targets are achieved.

  42. CEO Pay Ratio

    CEO Pay Ratio The following is a reasonable estimate, prepared under applicable SEC rules, of the ratio of the annual total compensation of Sumit Sharma, our Chief Executive Officer, compared to the median of the annual total compensation of our other employees. We determined our median employee based on base salary (annualized in the case of full- and part-time employees who joined the company during 2023), bonus, including one-time cash payments and the grant date fair value of equity awards paid or granted during fiscal year 2023 of each of our employees (excluding Mr. Sharma) as of December 31, 2023. All amounts paid in foreign currencies were converted to U.S. dollars based on the annual exchange rate average for 2023. The annual total compensation of our median employee (other than Mr. Sharma) for 2023 including base salary, bonus and equity grant was $108,854. Mr. Sharma’s total compensation for 2023, including base salary, bonus and equity grant as reported in the Summary Compensation Table was $4,726,729. Based on the foregoing, our estimate of the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all other employees was 43.4 to 1. Given the different methods that other public companies may use to determine an estimated pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies.

  43. Pay Versus Performance

    Pay Versus Performance As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and our financial performance for each of the last four completed fiscal years. In determining the “compensation actually paid” to our named executive officers (our “NEOs”), we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table in each such previous year, as the valuation methods for this disclosure under Item 402(v) differ from those required in reporting the compensation information in the Summary Compensation Table. For our NEOs other than our principal executive officer (our “PEO”), compensation is reported as an average.

  44. Pay Versus Performance

    | | | | | | | | Value of Initial Fixed $100 Investment Based On: | | | Company Selected Measure | | Year (1) | Summary Compensation Total for PEO S. Sharma | Compensation Actually Paid to PEO S. Sharma (2) | Summary Compensation Total for PEO P. Mulligan | Compensation Actually Paid to PEO P. Mulligan | Average Summary Compensation Table Total for Non-PEOs | Average Compensation Actually Paid to Non-PEOs (2) | MVIS Total Stockholder Return (3) | Peer Group Total Stockholder Return (3) | Net Loss (in thousands) (4) | Stock Price (5) | | (a) | (b) | (c) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $4,726,729 | $796,329 | $— | $— | $390,950 | $168,392 | $369.44 | $146.11 | $(82,842) | $2.66 | | 2022 | $8,880,000 | $3,202,400 | $— | $— | $3,016,975 | $1,326,728 | $326.39 | $124.04 | $(53,091) | $2.35 | | 2021 | $4,548,622 | $6,102,497 | $— | $— | $1,339,349 | $1,474,410 | $695.83 | $154.19 | $(43,200) | $5.21 | | 2020 | $241,565 | $1,414,065 | $69,679 | $69,679 | $342,741 | $1,353,899 | $747.22 | $122.56 | $(13,634) | $5.38 |

  45. Pay Versus Performance

    | (1) The PEO and Non-PEOs for the applicable years were as follows: in 2023 and 2022, Mr. Sharma served as PEO and Mr. Verma and Ms. Markham each served as a Non-PEO for the entire year; in 2021, Mr. Sharma served as PEO for the entire year and Mr. Verma, Ms. Markham, Mr. Stephen Holt and Mr. David Westgor each served as a Non-PEO for a portion of the year; for 2020, Mr. Sharma and Mr. Mulligan each served as PEO for a portion of the year, and Mr. Holt and Mr. Westgor each served as a Non-PEO for the entire year. | | (2) The Summary Compensation Table totals reported for the PEO and the average of the Non-PEOs for each year were subject to the following adjustments per Item 402(v)(2)(iii) of Regulation S-K to calculate “compensation actually paid”: the summary compensation table totals were decreased for amounts reported under the “Option Awards” and “Stock Awards” columns and increased/decreased for the inclusion of Rule 402(v) equity values, which reflect the aggregate of the following components, as applicable (i) the fair value as of the end of the listed fiscal year of unvested equity awards granted in that year; (ii) the change in fair value during the listed fiscal year of equity awards granted in prior years that remained outstanding and unvested at the end of the listed fiscal year; and (iii) the change in fair value during the listed fiscal year through the vesting date of equity awards granted in prior years that vested during the listed fiscal year, less the fair value at the end of the prior year of awards granted prior to the listed fiscal year that failed to meet applicable vesting conditions during the listed fiscal year. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of the grant. |

  46. Pay Versus Performance

    | Description of Adjustment | 2023 | 2022 | 2021 | 2020 | | Summary Compensation Table Total Compensation for PEO S. Sharma | $4,726,729 | $8,880,000 | $4,548,622 | $241,565 | | Subtract grant date fair value of option awards and stock awards granted in the applicable fiscal year | $(4,245,000) | $(8,571,000) | $(4,245,000) | $- | | Adjust for year-end fair value of equity awards granted in the applicable fiscal year that are outstanding and unvested as of the applicable fiscal year end | $- | 1,786,400 | - | - | | Adjust for change in fair value at year-end of equity awards granted in prior years that are outstanding and unvested as of the applicable fiscal year | $(414,400) | $- | $(9,250) | $1,165,000 | | Adjust for vesting date fair value of equity awards granted and vested in applicable fiscal year | $729,000 | 1,149,000 | 4,200,000 | $- | | Adjust for change in fair value of equity awards granted in prior years that vested in the applicable fiscal year | $- | $(42,000) | $1,608,125 | $7,500 | | Compensation Actually Paid to PEO S. Sharma | $796,329 | $3,202,400 | $6,102,497 | $1,414,065 | | Summary Compensation Table Total Compensation for Non-PEOs | $390,950 | $3,016,975 | $1,339,349 | $342,741 | | Subtract grant date fair value of option awards and stock awards granted in the applicable fiscal year | - | $(2,472,000) | $(1,097,114) | $- | | Add year-end fair value of equity awards granted in the applicable fiscal year that are outstanding and unvested as of the applicable fiscal year-end | $- | $1,020,800 | $285,137 | $- | | Adjust for year-over-year change in fair value of equity awards granted in prior years that are outstanding and unvested as of the applicable fiscal year | $(225,904) | $(186,987) | $(1,850) | $1,004,491 | | Adjust for change in fair value of equity awards granted in prior years that vested in the applicable fiscal year | $3,346 | $(52,060) | $975,788 | $6,667 | | Subtract prior year-end fair value of equity award granted in prior years that failed to vest in the applicable fiscal year | $- | $- | $(26,900) | $- | | Compensation Actually Paid to Non-PEOs | $168,392 | $1,326,728 | $1,474,410 | $1,353,899 |

  47. Pay Versus Performance

    | (3) An investment of $100 is assumed to have been made in our common stock as of December 31, 2019. We have selected the Dow Jones U.S. Electronic & Electrical Equipment Index (DJUSEE) as our peer group. An investment of $100 is assumed to have been made in the DJUSEE as of December 31, 2019. |

  48. Pay Versus Performance

    | (4) The dollar amounts reported represent the amount of the net loss reflected in our audited financial statements of the applicable fiscal year. | | (5) The stock prices reported here are the closing prices on the last trading day of the relevant fiscal year. Stock price was chosen from the following three most important financial performance measures used to link compensation actually paid to our PEO and other NEOs in 2023 to company performance: |