DEF 14A of Zebra Technologies Corp

Filed Mar 29, 2024 · FY20230001558370-24-004333

Open on EDGAR

Virtual Meeting Website: www.virtualshareholdermeeting.com/ZBRA2024
| Executive Compensation | | | 63 | | Summary Compensation Table | 63 | Grants of Plan-Based Awards in 2023 | 64 | | Outstanding Equity Awards at 2023 Fiscal Year-End | 65 | Options and Stock Appreciation Rights Exercised and Stock Vested in 2023 | 69 | | Non-Qualified Deferred Compensation | 69 | Non-Qualified Deferred Compensation for 2023 | 71 | | Potential Payments upon Termination of Employment or Change in Control | 71 | CEO Pay Ratio | 79 | | Executive Pay Versus Company Performance | 80 | Equity Compensation Plan Information | 87 | | Compensation and Culture Committee Interlocks and Insider Participation | 87 | | | | Proposal 2 Advisory Vote to Approve Compensation of Named Executive Officers | | | 88 | | Report of the Audit Committee | | | 89 | | Fees of Independent Auditors | | | 90 | | Proposal 3 Ratification of Appointment of Independent Auditors | | | 91 | | Executive Officers | | | 92 | | Ownership of Our Common Stock | | | 95 | | Delinquent Section 16(a) Reports | | | 96 | | Stockholder Proposals and Other Business | | | 97 | | Questions and Answers About the Annual Meeting and These Proxy Materials | 97 | | |
Election of Directors
Election of Directors The Board of Directors consists of ten directors. Eight of our directors are independent under Nasdaq listing requirements; the other two directors serve as Zebra’s Executive Chair and our Chief Executive Officer. The Board believes that the current director nominees and continuing directors have the appropriate mix of knowledge, experience, skillsets, tenure and diversity to effectively oversee and constructively challenge the performance of management in the execution of Zebra’s strategy. For more information, see Election of Directors on page 29.
Election of Directors
| Name | Age | Director Since | Primary Occupation | Independent | Committee Memberships | Current Other Public Directorships | | Class I Directors – Term Expires 2024 | | | | | | | | Satish Dhanasekaran | 51 | 2023 | President and CEO, Keysight Technologies | ✓ | CCC | 0 | | Ross W. Manire | 72 | 2003 | Retired President and Chief Executive Officer, ExteNet Systems, Inc. | ✓ | AC (Chair), NGC | 1 | | Class II Directors – Term Expires 2025 | | | | | | | | Nelda J. Connors | 58 | 2022 | Founder, Chairwoman and CEO, Pine Grove Holdings, LLC | ✓ | AC | 3 | | Frank B. Modruson | 64 | 2014 | President of Modruson & Associates, LLC and Former CIO, Accenture | ✓ | AC, NGC | 0 | | Michael A. Smith | 69 | 1991 | Lead Independent Director, Zebra Technologies, Chairman and Chief Executive Officer, FireVision LLC | ✓ | CCC, NGC (Chair) | 0 | | Class III Directors – Term Expires 2026 | | | | | | | | William J. Burns | 56 | 2023 | Chief Executive Officer, Zebra Technologies | | None | 0 | | Linda M. Connly(1) | 58 | 2020 | Expert Partner, Bain & Company | ✓ | AC | 0 | | Anders Gustafsson | 63 | 2007 | Executive Chair of the Board, Zebra Technologies | | None | 2 | | Janice M. Roberts(1) | 68 | 2013 | Partner, Benhamou Global Ventures | ✓ | CCC | 1 | | NEW Director Nominee Class I | | | | | | | | Kenneth B. Miller | 53 | | Executive Vice President and Chief Financial Officer, Juniper Networks | ✓ | | 0 |
Election of Directors
AC = Audit Committee, CCC = Compensation and Culture Committee and NGC = Nominating and Governance Committee
Election of Directors
| (1) Effective after the 2024 Annual Meeting, Janice Roberts is expected to Chair the Compensation and Culture Committee and Linda Connly is expected to join the Nominating and Governance Committee. |
Election of Directors
| 10 | Zebra Technologies Corporation I 2024 Proxy Statement |
Compensation Program Highlights
| WHAT WE DO | WHAT WE DON’T DO | | ✓ A significant portion of executive pay is at-risk because it is based on performance and ultimately may not be earned and paid out | ✘ We expressly forbid option and stock appreciation rights repricing without stockholder approval | | ✓ We align compensation with stockholder interests by linking incentive compensation to Zebra’s overall performance | ✘ We expressly forbid exchanges of underwater options or stock appreciation rights for cash | | ✓ We review competitive compensation data and individual performance when determining each Section 16 Officer’s compensation | ✘ We do not provide significant perquisites | | ✓ We have robust Stock Ownership Guidelines for our Section 16 Officers and directors | ✘ We do not guarantee salary increases or non-performance-based bonuses | | ✓ We require Section 16 Officers and directors to retain 50% of vested equity awards or exercisable stock appreciation rights until Stock Ownership Guidelines are met | ✘ We do not offer excise tax gross-ups | | ✓ We consider, and attempt to mitigate, risk in our compensation program | ✘ Our Insider Trading Policy expressly prohibits hedging, pledging and short selling Zebra securities | | ✓ We use an independent compensation consultant | | | ✓ We have “double-trigger” accelerated vesting of equity awards, which requires both a change in control and an involuntary termination | | | ✓ We conduct an annual talent management review, including succession planning | | | ✓ We have a Clawback Policy and an Accounting Restatement Clawback Policy | |
Oversight of Risks Arising Out of Zebra’s Compensation Policies and Practices
Oversight of Risks Arising Out of Zebra’s Compensation Policies and Practices Risks arising out of Zebra’s compensation policies and practices may, depending on the actions or behavior encouraged, be categorized as strategic, operational, reporting, or legal and compliance risks. Management conducts an annual assessment of the risks arising out of Zebra’s compensation policies and practices. Management reviews each significant element of compensation for the purpose of determining whether that element—including any related performance goals and targets—encourages identifiable risk-taking behavior and whether any identified risks could have a material adverse effect on Zebra. As part of this review, management considers whether our compensation plans are designed to mitigate or cap risk, including features such as compensation caps under the Zebra Incentive Plan. In February 2023, management reviewed base salaries, the 2023 Zebra Incentive Plan and equity awards granted under the 2015 Long-Term Incentive Plan and 2018 Long-Term Incentive Plan. Based on this review, management prepared a report and discussed with the Compensation and Culture Committee its determination that our policies and practices are not reasonably likely to have a material adverse effect on Zebra.
Stockholder Engagement
| ● | Stockholders shared their views on best practices on executive compensation. Stockholders continue to be supportive of our compensation program’s structure and its alignment with our strategy, as well as Zebra’s decision in 2021 to eliminate the use of stock appreciation rights and to increase the mix of performance-vested restricted stock to 60% of equity awarded to Executive Officers in our long-term equity compensation program as further discussed in 2023 Long-Term Equity Incentive Awards on page 56. |
Climate & Resource Conservation
| o | Zebra also partners with the U.S. EPA SmartWay Transport Partnership to benchmark and drive best practices in transportation-related emissions. |
Biographical Information of Zebra’s Director Nominees and Continuing Directors
Biographical Information of Zebra’s Director Nominees and Continuing Directors The following biographical descriptions set forth certain background information about our director nominees and continuing directors, including specific professional experience and individual qualifications that led to the conclusion by our Board that such person should serve as a director of Zebra.
Nominees for Director
Nominees for Director
Nominees for Director
| Class I Director (Term Expires 2024) 2023 51 ● | | | SATISH DHANASEKARAN | | | Independent Class I Director (Term Expires 2024) Director since: 2023 Age: 51 Committees: ● Compensation and Culture | Professional Highlights Mr. Dhanasekaran currently serves as President and Chief Executive Officer of Keysight Technologies (NYSE: KEYS) since May 2022. Keysight is a leading technology company that delivers advanced design, validation, and test solutions. Since joining Agilent in 2006, Keysight’s predecessor company, he has held multiple leadership roles that have helped shape the company’s strategy. Previously, he served as Keysight’s Senior Vice President and Chief Operating Officer responsible for market and technology research as well as the development of new technologies and solutions. Before that, he led Keysight’s Communications Solutions Group, a multi-billion dollar global business that serves the communications ecosystem and aerospace defense industry. In that role, Mr. Dhanasekaran and his team established Keysight’s leadership in 5G and made significant contributions to accelerate technology adoptions in other critical areas, including 400G, quantum, and electromagnetic spectrum operations. Satish has also played an instrumental role in the integration of acquired businesses, which have accelerated Keysight’s transition to a software centric company. Mr. Dhanasekaran has a Master of Science in Electrical Engineering from Florida State University and a Bachelor of Engineering degree from Coimbatore Institute of Technology. Mr. Dhanasekaran is passionate about advancing technology adoption rapidly through active industry body participation. He sponsors Keysight’s participation on the United States Federal Communications Commission Technological Advisory Committee, is a member of the NextG Alliance, and participates in other industry standards bodies and consortiums. Director Qualifications Mr. Dhanasekaran has decades of experience in communications technology and electronic design and test industries and provides value to our Board by being a strategic thinker with an affinity for innovation. The Board benefits from his proven experience transforming organizations to “outside in” industry design through active participation in industry consortiums and engagement with in-house technology teams. In addition, Mr. Dhanasekaran has gained experience in leading and developing innovative culture and attracting and retaining technology talent, mergers and acquisitions, integration, as well as international business while serving as an executive and in other leadership roles. |
Nominees for Director
| 32 | Zebra Technologies Corporation I 2024 Proxy Statement |
Nominees for Director
| ROSS W. MANIRE | | | Independent Class I Director (Term Expires 2024) Director since: 2003 Age: 72 Committees: ● Audit (Chair) (Financial Expert) ● Nominating and Governance | Professional Highlights Mr. Manire founded ExteNet Systems, Inc., a wireless networking company, and served as its President and Chief Executive Officer from 2002 until 2018. He was President of the Enclosure Systems Division of Flextronics International, Ltd., an electronics contract manufacturer, from 2000 to 2002, and President and Chief Executive Officer of Chatham Technologies, Inc., an electronic packaging systems manufacturer that merged with Flextronics, in 2000. Prior to joining Chatham Technologies, Mr. Manire was Senior Vice President of the Carrier Systems Business Unit of 3Com Corporation, a provider of networking equipment and solutions. He served in various executive positions with U.S. Robotics from 1991 to 1997, including Chief Financial Officer, Senior Vice President of Operations, and Senior Vice President of the Network Systems Division prior to its 1997 merger with 3Com. From 1989 to 1991, Mr. Manire was a partner in Ridge Capital, a private investment company. He began his professional career at Ernst & Young, LLP, and served as a partner in the Entrepreneurial Services Group from 1985 to 1989. Mr. Manire is currently a member of the board of directors of The Andersons, Inc. (Nasdaq: ANDE), a diversified business with interests in agribusiness where he is a member of the Audit Committee and the Chair of the Compensation & Leadership Development Committee. Mr. Manire is also an operating partner at Columbia Capital, the Chairman of Vivacity LLC and is on the board of directors of Hellen Systems and Quicket Solutions, Inc. Director Qualifications Mr. Manire brings over 30 years of business management, finance and leadership to the Board. His extensive background and experience as an executive officer and as a public company board member provide him with a vast skill set including experience in mergers and acquisitions, international business, marketing and sales, technology and innovation, cybersecurity risk management, as well as corporate governance. Mr. Manire’s robust financial and accounting experience facilitates the Board’s oversight of Zebra’s accounting, internal control and auditing functions and activities. In addition, his outsourced manufacturing experience provides him with important expertise with respect to Zebra’s use of contract manufacturers. The Board benefits from Mr. Manire’s telecommunications industry experience and his appreciation for the challenges facing the Company’s operations due to his broad business, operational, accounting and financial knowledge and experience. |
Nominees for Director
| Zebra Technologies Corporation I 2024 Proxy Statement | 33 |
Nominees for Director
| KENNETH B. MILLER | | | Independent Class I Director Age: 53 | Professional Highlights Mr. Miller has served as Executive Vice President and Chief Financial Officer of Juniper Networks (NYSE: JNPR) since 2016. Juniper is a global leader in AI Networking, Cloud, and Connected Security Solutions. Since joining Juniper in 1999, he has been instrumental in scaling the company’s accounting and finance teams from a ‘start-up’ model to supporting a multi-billion-dollar business. Throughout his career with Juniper, Mr. Miller has gained deep experience through multiple roles, including Accounting, Corporate Financial Planning and Analysis, Business Unit Finance and Go-to-Market Finance. Since taking the role of Chief Financial Officer, Mr. Miller has been integral in leading Juniper through a successful transformation, with a focus on returning the company to sustainable growth and driving software monetization. Mr. Miller is also a member of Juniper’s Executive Committee addressing Enterprise Risk Management and Cyber Security Risk. Mr. Miller led the integration of several strategic acquisitions, including Mist Systems, Apstra, and 128T, which helped solidify Juniper’s position as a network technology leader and introduce AI advancements in their product lines. Mr. Miller believes fostering a strong culture anchors successful acquisition integrations. Prior to his time at Juniper, Mr. Miller worked as an Audit Manager at Ernst & Young. Mr. Miller earned a bachelor’s degree in accounting from Santa Clara University and is a California CPA (inactive). He regularly speaks at the Santa Clara University School of Business, actively participates in CFO Roundtable leadership councils, and was nominated for Bay Area CFO of the Year in 2022. Director Qualifications Mr. Miller brings over 30 years of public company financial acumen to the Board. He also brings experience in international business, technology and innovation, mergers and acquisitions and associated integrations, strategic planning, corporate governance, enterprise risk management, and cybersecurity. Mr. Miller’s public company financial acumen, as well as his experience serving as an external auditor, will also bolster the Board’s oversight of Zebra’s accounting, internal control and auditing functions and activities. |
Nominees for Director
| 34 | Zebra Technologies Corporation I 2024 Proxy Statement |
Continuing Directors
Continuing Directors
Continuing Directors
| WILLIAM J. BURNS | | | Chief Executive Officer Class III Director (Term Expires 2026) Director since: 2023 Age: 56 Committees: ● None | Professional Highlights Mr. Burns was named Chief Executive Officer, Zebra Technologies, effective March 1, 2023. Bill has more than 30 years of experience in the technology sector and joined Zebra Technologies in 2015. In his prior role as Chief Product & Solutions Officer, he oversaw the strategy, investments, and development of Zebra’s expansive portfolio of products and solutions. During this time, Bill extended Zebra’s market share leadership across its core businesses while entering adjacent and expansion markets, delivered on the company’s Enterprise Asset Intelligence Vision, and strengthened Zebra’s strategic relationships with its customers and partners. Prior to joining Zebra, Bill served as Chief Executive Officer of Embrane, a Silicon Valley-based venture capital backed startup which was acquired by Cisco in April 2015. Prior to joining Embrane, Bill served as Chief Executive Officer of Spirent Communications, a global leader in test and measurement solutions publicly traded on the London Stock Exchange. He also held various executive and sales leadership roles at Tellabs, Inc. Bill has a Master of Business Administration from Temple University, a Bachelor of Science degree in Business Administration from Misericordia University, and an Associates Degree in Engineering from Pennsylvania State University. Director Qualifications Mr. Burns has decades of executive experience in Hardware and Software industries serving in various executive and leadership roles. In his prior role as Zebra’s Chief Products & Solutions Officer, Mr. Burns gained meaningful insight into Zebra’s portfolio of products and the markets we serve. In addition, Mr. Burns has extensive management experience in technology innovation, product development, disruptive innovation, new business models and business model extension, and addressing emerging technology trends. Mr. Burns also offers the Board a broad range of skills, including knowledge of public company corporate governance, corporate strategy and planning, international operations, manufacturing, sales and marketing, and mergers and acquisitions. |
Continuing Directors
| Zebra Technologies Corporation I 2024 Proxy Statement | 35 |
Continuing Directors
| LINDA M. CONNLY | | | Independent Class III Director (Term Expires 2026) Director since: 2020 Age: 58 Committees: ● Audit | Professional Highlights Ms. Connly has served since 2020 as an Expert Partner on sales and go-to-market transformation for Bain & Company’s Commercial Excellence practice, a management consultancy that provides advice to public, private and non-profit organizations. Ms. Connly previously served at Bain & Company as a Strategic Advisor on go-to-market transformations and specializing in high velocity sales models from 2018 to 2020. In addition, from 2018 to 2023, Ms. Connly served as Chief Executive Officer of The Connly Advisory Group LLC, a consulting practice she founded that provides services to diagnose sales issues and design go-to-market models. Prior to her current roles, she was Interim Executive Vice President of Rackspace, a managed cloud computing company, where she led transformation for a $1.8 billion managed services business from 2018 to 2019. Prior to that, she held numerous roles at EMC Corporation between 2000 and 2016 including serving as SVP, EMC lead for Global Go-To-Market Integration where she led the 2015 go-to-market integration for Dell Technology and EMC, one of the largest technology mergers in history to date. She continued to serve in leadership roles at Dell Technology after the merger, including SVP, Enterprise Customer Strategy & Advocacy from 2016 to 2017 and SVP, Global Center of Competency, Infrastructure Solutions Group from 2017 to 2018. Ms. Connly serves as a board member of PortCo/Presidio, a leading North American information technology solutions provider focused on digital infrastructure, business analytics, cloud, security and emerging solutions. Ms. Connly served as an advisor for Wasabi Technologies, a private company providing cloud storage solutions, and as a trustee at Saint Anselm College. In addition, in 2019, Ms. Connly served on the board of Carbonite (Nasdaq: CARB), a cloud-based backup and security SaaS provider, until its acquisition by OpenText that year. In 2014, Ms. Connly was presented the Boston Chamber of Commerce Pinnacle Award in the category of “Achievement in Management.” In addition, she was also named by VAR Business magazine as one of the “Top 50 Most Powerful Women in Technology” and by CRN (Computer Reseller News) magazine as one of the “Top 100 Unsung Heroes.” Director Qualifications Ms. Connly is an operating executive, director and consultant with over 25 years of broad cross-functional experience. The Board benefits from Ms. Connly’s deep expertise in revenue acceleration, sales resource optimization, mergers and acquisition integration, and go-to-market and high velocity sales channels. Ms. Connly also has valuable experience in technology and innovation, as well as experience in overseeing the development and implementation of strategic priorities and business transformation from hardware to software solutions. Ms. Connly’s service as a public board member has also provided her with proficiency in corporate governance. Ms. Connly’s extensive background and experience in the technology industry and go to market strategies will be valuable to Zebra as we expand into new markets and solutions. |
Continuing Directors
| 36 | Zebra Technologies Corporation I 2024 Proxy Statement |
Continuing Directors
| NELDA J. CONNORS | | | Independent Class II Director (Term Expires 2025) Director since: 2022 Age: 58 Committees: ● Audit (Financial Expert) | Professional Highlights Ms. Connors is the Founder, Chairwoman and Chief Executive Officer of Pine Grove Holdings, LLC, a woman and minority-owned privately held investment company that acquires lower middle market companies with a high engineering and service component. Prior to founding Pine Grove Holdings, LLC in 2011, Ms. Connors served as President and Chief Executive Officer of Atkore International Inc., formerly the Electrical and Metal Products division of Tyco International, before it became privately held in 2010. Before joining Tyco, she served as Vice President at Eaton Corporation, a global electrical and automotive supplier, where she held several positions in operations, continuous improvement, and general management. In addition, Ms. Connors has held a number of executive and management positions in diversified industrial and automotive end-markets. Ms. Connors currently serves on the boards of Baker Hughes (NYSE: BKR) where she serves on the Audit and Human Capital and Compensation Committees; Otis Worldwide (NYSE: OTIS) where she serves on the Audit and Compensation Committees; and Boston Scientific (NYSE: BSX) where she serves on the Risk and Executive Compensation & Human Resources Committees. However, Ms. Connors will not stand for re-election at either Baker Hughes’ or Boston Scientific’s 2024 annual meeting of stockholders, as reported separately by each company. Other recent public board positions include serving as a director of BorgWarner (NYSE: BWA) until 2022, Enersys (NYSE: ENS) until 2021, Echo Global Logistics (NASDAQ: ECHO) until 2020, and CNH Industrial (NYSE: CNHI) until 2020. Ms. Connors also currently serves as an independent advisor to Nissan North America, an advisor of Queen’s Gambit Growth Capital, and an advisor to Vibracoustic. Ms. Connors is also a director nominee at Carnival Corporation & PLC (NYSE: CCL). Ms. Connors has been recognized by Forbes 50 Over 50 for Investment; Savoy Magazine in its Power 300 Most Influential Black Corporate Directors; Black Enterprise Magazine as one of the Top 75 Powerful Women in Business; and one of Chicago United’s Business Leaders of Color. Director Qualifications Ms. Connors has over 25 years of valuable technical and operating experience in global manufacturing and diversified industrial companies with highly technical products and services. The Board and Audit Committee benefit from Ms. Connors’ executive leadership skills and experience in the areas of operations and financial management, sales and marketing, quality, mergers and acquisitions, engineering, risk management and business strategy. Ms. Connors’ financial acumen, including her proficiency in financial management and financial reporting processes, as well as experience serving as a member of the audit committee on other public companies’ boards, facilitates the Board’s oversight of Zebra’s accounting, internal control and auditing functions and activities. In addition, Ms. Connors’ service as a public board member and as an independent advisor provided her with expertise in corporate governance. |
Continuing Directors
| Zebra Technologies Corporation I 2024 Proxy Statement | 37 |
Continuing Directors
| ANDERS GUSTAFSSON | | | Executive Chair Class III Director (Term Expires 2026) Director since: 2007 Age: 63 Committees: ● None | Professional Highlights Mr. Gustafsson served as Zebra’s Chief Executive Officer and a director from 2007 to March 2023 when he transitioned to his current role as Executive Chair of the Board. Prior to joining Zebra, Mr. Gustafsson served as Chief Executive Officer of Spirent Communications plc, a publicly-traded telecommunications company, from 2004 until 2007. At Spirent, he redirected that Company’s growth strategy, divested non-core operations, integrated historic acquisitions and streamlined the organization to realize significant cost savings. From 2000 until 2004, he was Senior Executive Vice President, Global Business Operations, of Tellabs, Inc., a communications networking company. Mr. Gustafsson held other executive roles at Tellabs along with executive positions at Motorola, Inc. earlier in his career. Mr. Gustafsson serves on the board of directors of NetApp (NASDAQ: NTAP), a global, cloud-led, data-centric software company where he serves on the Compensation Committee, and International Paper Company (NYSE: IP), a leading global producer of renewable fiber-based packaging, pulp and paper products, where he is Chair of the Audit and Finance Committee and serves on the Executive Committee and the Public Policy and Environment Committee. Previously, Mr. Gustafsson was a member of the board of directors of Dycom Industries Inc. (NYSE: DY), a company that provides construction and specialty services to the telecommunication industry. He also serves as a trustee of the Shedd Aquarium and is a member of the Civic Committee of the Commercial Club of Chicago. Director Qualifications Mr. Gustafsson has extensive executive-level experience, bringing to the Board a broad range of skills, including knowledge of leadership of complex organizations, corporate strategy and planning, financial controls and accounting, corporate finance, international operations, manufacturing, sales and marketing and mergers and acquisitions. In addition, Mr. Gustafsson has gained meaningful experience in technology and innovation, including product development, disruptive innovation, new business models, cybersecurity, and technology trends. While serving as a director on public company boards, Mr. Gustafsson has gained proficiency in risk management and compliance oversight, corporate governance as well as environmental, sustainability and public policy. The Board benefits from Mr. Gustafsson’s deep knowledge of Zebra’s business and industry. |
Continuing Directors
| 38 | Zebra Technologies Corporation I 2024 Proxy Statement |
Continuing Directors
| FRANK B. MODRUSON | | | Independent Class II Director (Term Expires 2025) Director since: 2014 Age: 64 Committees: ● Audit ● Nominating and Governance | Professional Highlights Mr. Modruson has served as President of Modruson & Associates, LLC, a management consulting firm, since 2015. Mr. Modruson served from 2003 to 2014 as the Chief Information Officer at Accenture, a global leader in strategy, consulting, digital, technology and operations. As CIO, he was responsible for the information technology strategy, applications and infrastructure supporting 281,000 employees. He also chaired Accenture’s Information Technology Steering Committee and was a member of the Accenture Operating Committee and Global Leadership Council. Prior to becoming CIO, Mr. Modruson held other roles at Accenture, including Partner, for 15 years. Mr. Modruson currently serves on the board of directors of Hy Cite Enterprises, LLC. He is also a volunteer firefighter and serves on the board of directors of the Lyric Opera of Chicago. Most recently, Mr. Modruson served on the board of directors of First Midwest Bancorp, Inc. (Nasdaq: FMBI) until the company was acquired in February 2022. Mr. Modruson also served on the boards of directors of Landauer Corporation (NYSE: LRD) and Forsythe Technology, Inc., both of which were acquired in 2017, as well as Taleris, a joint venture between Accenture and GE Aviation. In 2010, Mr. Modruson was elected to CIO Magazine’s CIO Hall of Fame. In addition, InfoWorld has named him to its list of Top 25 CTOs, and ComputerWorld has named him one of its Premier 100 CTOs. Director Qualifications Mr. Modruson’s technology, strategy and consulting background has provided him with proficiency in cybersecurity and risk-mitigation practices as well as expertise in technology and innovation. The Board benefits from Mr. Modruson’s extensive experience transforming information technology into an asset for Accenture. While serving as an executive, as a public company board member, and in other leadership roles, Mr. Modruson gained significant experience in mergers and acquisitions, business transformation, international business, risk management and corporate governance as well as operations. Mr. Modruson’s technology business transformation expertise will be indispensable as Zebra looks to expand and move into new markets. |
Continuing Directors
| Zebra Technologies Corporation I 2024 Proxy Statement | 39 |
Continuing Directors
| JANICE M. ROBERTS | | | Independent Class III Director (Term Expires 2026) Director since: 2013 Age: 68 Committees: ● Compensation and Culture | Professional Highlights Ms. Roberts is an experienced global technology executive and venture capitalist based in Silicon Valley, where her board experience spans public, private and nonprofit organizations. Ms. Roberts has served as a Partner/Advisory Partner at Benhamou Global Ventures (BGV) since 2014; an early stage global investor in companies that lead the digital transformation of enterprises. From 2000 to 2013, Ms. Roberts served as Managing Director of Mayfield Fund, investing in wireless, mobile, enterprise and consumer technology companies. Following the acquisition of BICC Data Networks Ltd, where she was Managing Director, from 1992 to 2000, Ms. Roberts was employed by 3Com Corporation (which was later acquired by Hewlett Packard), where she held various executive positions, including Senior Vice President of Global Marketing and Business Development, President of 3Com Ventures, and President of the Palm Computing Business Unit. Ms. Roberts currently serves on the boards of NETGEAR, Inc. (Nasdaq: NTGR), where she serves on the Audit, Compensation and Subscription Software Strategy Committees, Totango Inc., Uneeq Ltd., and MinervaCQ (Bourbaki Intelligent Systems Inc.). Until May 2022, she served as Lead Independent Director and Chair of the Compensation Committee at Zynga Inc. (Nasdaq: ZNGA). Other recent public board positions include serving as a director of RealNetworks, Inc. (Nasdaq: RNWK) for nearly 10 years, until 2020, and ARM Holdings Plc until its acquisition by the SoftBank Group in 2016. Ms. Roberts is also an advisor to the board of GBx Global.org, a technology community connecting British entrepreneurs to the San Francisco Bay Area after serving as Director and Co-Chair. She serves on the advisory boards of Illuminate Ventures and VividQ Ltd and as a member of the Board of Trustees of the Good Samaritan Hospital (HCA Healthcare) San Jose, CA. Ms. Roberts was a Board Director and President of the Ronald McDonald House at Stanford from 2011 to 2017. Director Qualifications Ms. Roberts has almost four decades of global technology operating and venture capital experience, including over 30 years in Silicon Valley. She has held executive roles in Europe and the US, including marketing, sales, business development, mergers, acquisitions and general management, all with global responsibilities. Ms. Roberts is entrepreneurial, product and customer-centric with expertise across multiple product areas and sectors including networking, communications and mobile solutions, software, services, semiconductors and applications, spanning enterprise, small business, service providers and consumer markets. She has a proven track record of success, leadership, execution and innovation in diverse organizations, environments, industries and cultures. Ms. Roberts currently balances a diverse board portfolio of technology growth companies with early stage investing in innovative new businesses. This is particularly relevant to Zebra as it continues to transition to more digital, software and service and intelligent automation business opportunities. Ms. Roberts also has considerable board governance experience and capabilities with public, private and non-profit organizations in North America, Europe and Asia, especially relating to compensation (developing significant new executive programs), and most recently leading special litigation work and diversity and inclusion initiatives. She has worked across all committees in her career, having served as chair of the compensation committee, lead independent director and on audit, compensation and strategy committees. |
Continuing Directors
| 40 | Zebra Technologies Corporation I 2024 Proxy Statement |
Continuing Directors
| MICHAEL A. SMITH | | | Lead Independent Director Independent Class II Director (Term Expires 2025) Director since: 1991 Age: 69 Committees: ● Audit (until April 22, 2022) ● Compensation and Culture ● Nominating and Governance (Chair) | Professional Highlights Mr. Smith served as Chairman of Zebra from 2007 to March of 2023 and is now serving as the Company’s Lead Independent Director. Since 2000, he has served as Chairman and Chief Executive Officer of FireVision LLC, a private investment company he founded. Previously, Mr. Smith served in various senior investment banking and mergers and acquisitions roles at NationsBanc Montgomery Securities and its successor entity, Banc of America Securities, LLC, BancAmerica Robertson Stephens, BA Partners, and its predecessor entity, Continental Partners Group, and Bear Stearns. Mr. Smith is a member of the Board of Directors of SRAM International Corp., a global designer, manufacturer and marketer of premium bicycle components. Mr. Smith is a Board Leadership Fellow of the National Association of Corporate Directors and is also NACD Directorship Certified™, which is a tangible assessment of a director’s understanding of knowledge essential to effective corporate governance along with a commitment to continuing education. Mr. Smith recently obtained his CERT certification from Carnegie Mellon’s Software Engineering Institute in Cybersecurity Oversight, thereby bolstering his knowledge of cyber oversight and governance. Director Qualifications The Board and the Committees on which Mr. Smith serves benefit from his decades of industry experience, his skills in financial services, including his proficiency in complex financial management, capital allocation and financial reporting processes, as well as his substantial knowledge of Zebra. Mr. Smith’s extensive background, including his experience as Chairman and Chief Executive Officer of FireVision LLC and service on other companies’ boards provided Mr. Smith with experience in overseeing the development and implementation of strategic priorities and business transformations, mergers and acquisitions, international business experience, cybersecurity risk management, as well as risk management and compliance oversight. Additionally, the Board, Nominating and Governance Committee and Compensation and Culture Committee benefit from Mr. Smith’s substantial corporate governance and executive compensation experience, including his recently obtained CERT certification from Carnegie Mellon’s Software Engineering Institute in Cybersecurity Oversight, experience overseeing development plans for CEO and senior management, CEO performance evaluations, and CEO succession, conducting board and committee effectiveness assessments, reviewing board and committee composition and leadership, leading board transformation and refreshment, achieving NACD Directorship Certification, and engaging with investors. |
Continuing Directors
| Zebra Technologies Corporation I 2024 Proxy Statement | 41 |
Director Compensation
Director Compensation Zebra’s director compensation program is designed to attract and retain highly qualified non-employee directors. The annual compensation for our non-employee directors consists of both cash to compensate directors for their services on the Board of Directors and its committees, and equity to align the interests of our directors with those of our stockholders. Decisions regarding our non-employee director compensation are approved by the full Board based on the recommendations of the Compensation and Culture Committee. In making such recommendation, the Compensation and Culture Committee takes into consideration market data and whether such recommendation aligns with the interests of our stockholders. The Compensation and Culture Committee annually reviews non-employee director compensation with WTW, our independent compensation consultant. In November 2022, the Compensation and Culture Committee reviewed market data on both non-employee director compensation and the financial performance of the peer group as well as general industry data and high-tech industry data for companies similar to Zebra. (For more information on the peer group, see Compensation Discussion and Analysis — Our Compensation Approach, beginning on page 61). In addition, the Compensation and Culture Committee reviewed data on the cash compensation awarded to the chairs and members of the Board’s standing committees. Using this data, the Compensation and Culture Committee determined that the 2023 total mix of compensation for the non-employee directors was generally aligned with the peer group and high-tech market medians. Therefore, the Compensation and Culture Committee recommended to the Board and the Board decided to keep our non-employee director compensation the same for 2023.
Elements of Director Compensation
Elements of Director Compensation Our non-employee director compensation for 2023 was awarded with a combination of cash and equity, as shown below.
Elements of Director Compensation
| Annual cash retainer | ● $90,000 for all non-employee directors | | Annual cash retainer for the Lead Independent Director | ● $190,000 | | Annual equity retainer | ● Target grant date fair value of $220,000 for all non-employee directors ● Awarded in the form of fully-vested common stock | | Annual cash retainer for committee chairs | ● $30,000 for the Compensation and Culture Committee chair ● $30,000 for the Audit Committee Chair ● $15,000 for the Nominating and Governance Committee chair | | Annual cash retainer for non-chair committee members | ● $15,000 for each Compensation and Culture Committee member ● $15,000 for each Audit Committee member ● $10,000 for each Nominating and Governance Committee member | | Additional meeting fees | ● $2,000 for each in-person Board meeting in excess of five in-person Board meetings per year ● $1,000 for each special Board meeting in excess of two special Board meetings per year ● $1,500 for the chair and $1,000 for other committee members for each in-person committee meeting in excess of five in-person committee meetings per year, with no additional fee for special committee meetings |
Elements of Director Compensation
Non-employee directors may participate in our non-qualified deferred compensation plan and our group medical and dental plans, and they are reimbursed for expenses incurred in attending Board and committee meetings. Mr. Gustafsson and Mr. Burns do not receive additional compensation for their service as directors.
Elements of Director Compensation
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Director Compensation
Director Compensation
2023 Non-Employee Director Compensation
2023 Non-Employee Director Compensation In May 2023, the Compensation and Culture Committee approved annual equity grants for each of the eight non-employee directors. These awards had a target value of $220,000 but were awarded in the form of 830 shares of fully-vested common stock for each non-employee director with an actual value of $220,182.40. The following table provides information regarding the compensation of our non-employee directors for 2023.
2023 Non-Employee Director Compensation
| | Fees Earned or | Stock | All Other | | | Name | Paid in Cash ($)(1) | Awards ($)(2) | Compensation ($) | Total ($) | | Linda M. Connly | 106,000 | 220,182 | — | 326,182 | | Nelda J. Connors | 106,000 | 220,182 | — | 326,182 | | Chirantan Desai(3) | 52,500 | 220,182 | — | 272,682 | | Satish Dhanasekaran(3) | 27,250 | 220,182 | — | 247,432 | | Richard L. Keyser | 131,000 | 220,182 | — | 351,182 | | Ross W. Manire | 131,000 | 220,182 | — | 351,182 | | Frank B. Modruson | 116,000 | 220,182 | — | 336,182 | | Janice M. Roberts | 106,000 | 220,182 | — | 326,182 | | Michael A. Smith | 221,000 | 220,182 | — | 441,182 |
2023 Non-Employee Director Compensation
| (1) There was an administrative error that led to each of our Non-Employee Directors (other than Mr. Desai who was not a director at the time) being paid $1,000 in connection with an additional meeting fee in December 2023. The amounts in the Non-Employee Director Compensation table are inclusive of this administrative error. |
2023 Non-Employee Director Compensation
| (2) The amounts in the table represent the aggregate grant date fair value for these awards computed in accordance with Financial Accounting Standards Codification 718, Compensation — Stock Compensation. Please see Note 15, “Share-Based Compensation,” of Zebra’s consolidated financial statements included in Zebra’s Annual Report on Form 10-K for the year ended December 31, 2023, for a discussion of assumptions made in calculating the grant date fair value of these awards. |
2023 Non-Employee Director Compensation
| (3) On May 11, 2023, Chirantan “CJ” Desai stepped down from Zebra’s Board of Directors. That same day, Satish Dhanasekaran was appointed to Mr. Desai’s seat and served the remainder of Mr. Desai’s term in 2023. Mr. Desai and Mr. Dhanasekaran each received a prorated portion of the Fees for the period they served in 2023. Both Mr. Desai and Mr. Dhanasekaran received their entire equity grant for the 2023 period. Mr. Dhanasekaran deferred $26,250 of his compensation as non-qualified deferred compensation. |
2023 Non-Employee Director Compensation
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Executive Summary
| Overview of Our Executive Compensation Program | | | 49 | | Compensation and Governance Practices | 49 | Say-on-Pay | 50 | | Role of Our Compensation and Culture Committee | 50 | Role of the Independent Compensation Consultant | 51 | | Compensation Components | 51 | Pay-for-Performance and At-Risk Compensation | 52 | | CEO Transition | 52 | | | | Key Executive Compensation Decisions in 2023 | | | 53 | | 2023 Base Salaries | 53 | 2023 Annual Cash Incentive Awards | 53 | | 2023 Long-Term Equity Incentive Awards | 56 | | | | Restricted Stock that Vested in 2023 | | | 59 | | Performance-Vested Restricted Stock Granted in 2020 | 59 | Time-Vested Restricted Stock that Vested in 2023 | 59 | | Performance-Vested Restricted Stock with Performance Period ending December 31, 2023 | 60 | | | | Our Compensation Approach | | | 61 | | How We Establish the Peer Group | 61 | How 2023 Compensation for the Named Executive Officers Compares to the Peer Group | 62 | | Employee Benefits | | | 62 | | Our Executive Officer Employment Agreements | | | 62 |
2023 Compensation Highlights
| ● | Our 2023 Zebra Incentive Plan (“2023 ZIP”), which is our annual cash incentive plan, assessed performance against full year consolidated net sales, adjusted EBITDA and Enterprise Asset Intelligence (“EAI”) Index goals. No individual adjustments were applied in 2023, and financial performance resulted in payments of 18.1% of target for all Named Executive Officers. |
2023 Compensation Highlights
| ● | Performance-vested restricted stock for which the performance period concluded December 31, 2023 were earned at 33.3% of target as a result of net sales growth and adjusted EBITDA margin performance over the 3-year period. |
Compensation Governance Practices
| ● | Align a meaningful percentage of an executive’s compensation with Company performance and strategy, with a balance between short-term and long-term performance; |
Compensation Governance Practices
| ● | Align with long-term stockholder interests through risk and rewards of Zebra equity ownership and robust stock ownership guidelines. |
Compensation Governance Practices
| WHAT WE DO | WHAT WE DON’T DO | | ✓ A significant portion of executive pay is at-risk because it is based on performance and ultimately may not be earned and paid out | ✘ We expressly forbid option and stock appreciation rights repricing without stockholder approval | | ✓ We align compensation with stockholder interests by linking incentive compensation to Zebra’s overall performance | ✘ We expressly forbid exchanges of underwater options or stock appreciation rights for cash | | ✓ We review competitive compensation data and individual performance when determining each Section 16 Officer’s compensation | ✘ We do not provide significant perquisites | | ✓ We have robust Stock Ownership Guidelines for our Section 16 Officers and non-employee directors | ✘ We do not guarantee salary increases or non-performance-based bonuses | | ✓ We require Section 16 Officers and non-employee directors to retain at least 50% of vested equity awards or exercisable stock appreciation rights until Stock Ownership Guidelines are met | ✘ We do not offer excise tax gross-ups | | ✓ We consider, and attempt to mitigate, risk in our compensation program | ✘ Our Insider Trading Policy expressly prohibits hedging, pledging and short selling Zebra securities | | ✓ We use an independent compensation consultant | | | ✓ We have “double-trigger” accelerated vesting of equity awards, which requires both a change in control and an involuntary termination | | | ✓ We conduct an annual talent management review, including succession planning | | | ✓ We have a Clawback Policy and an Accounting Restatement Clawback Policy | |
Role of the Independent Compensation Consultant
Role of the Independent Compensation Consultant The Compensation and Culture Committee engaged WTW as its independent executive compensation consultant for 2023. In that capacity, WTW provided competitive peer group and executive compensation data, analysis and guidance to help the Compensation and Culture Committee:
Role of the Independent Compensation Consultant
| ● | establish a peer group; |
Role of the Independent Compensation Consultant
| ● | use benchmark compensation surveys; |
Role of the Independent Compensation Consultant
| ● | set Executive Officer and non-employee director compensation; |
Role of the Independent Compensation Consultant
| ● | develop the design of our executive compensation program; and |
Role of the Independent Compensation Consultant
| ● | review performance and determine payouts with respect to performance-based awards. |
Role of the Independent Compensation Consultant
The Compensation and Culture Committee annually assesses WTW’s independence pursuant to relevant Securities and Exchange Commission and Nasdaq rules. To that end, the Compensation and Culture Committee received a letter from WTW addressing WTW’s independence and concluded that no conflict of interest exists that would prevent WTW from providing independent advice.
Compensation Components
Compensation Components Our executive compensation program includes three components: base salary, annual incentive and long-term equity incentive. Each component serves a particular purpose, so each is considered independently, but the three components combined provide a holistic total executive compensation approach. The Compensation and Culture Committee does not follow a pre-established formula to allocate total compensation among the various pay components. For 2023, the Compensation and Culture Committee determined each Named Executive Officer’s compensation level by reviewing market data for each individual compensation component. Base salary, annual incentive, long-term equity incentive, and total compensation for our Named Executive Officers are compared to market data as further discussed in Our Compensation Approach on page 61. Actual compensation awarded varies based upon the attainment of financial and individual performance goals, as well as each Executive’s position, responsibilities and overall experience. For more information on individual performance goals, see Performance Management Process and Individual Adjustments on page 55. We align pay with performance, paying above target when Zebra surpasses target performance goals or an Executive’s individual performance exceeds expectations. The following table describes the purpose of each compensation component and how that component is related to our pay-for-performance approach and budget.
Compensation Components
| Compensation Component | Purpose | How Compensation Component is Aligned with our Pay-For-Performance Approach | | Base Salary | To attract and retain Executives by compensating them for the primary functions and responsibilities of the position. | Benchmark to peer group; an Executive’s individual performance and displayed skills and competencies are taken into consideration when determining base salary. | | Annual cash incentive awards | To attract, retain, motivate and reward Executives for achieving or surpassing key target performance goals at the Company, business unit and individual level. | Benchmark to peer group; financial and individual performance determines the actual amount of the Executive’s annual cash incentive award. | | Long-term equity awards | To attract, retain, motivate and reward top talent to increase stockholder value. | Benchmark to peer group; an Executive’s past performance and contribution to long-term strategy determine the amount of equity granted. |
Mr. Burns
| ● | Time-vested RSUs with a grant date fair value equal to $3,000,000 granted March 1, 2023; |
Mr. Burns
| ● | Performance Shares with a grant date fair value equal to $4,500,000 granted on May 4, 2023 consistent with other executive officer annual equity grant awards; and |
Mr. Burns
| ● | Promotional grant of Performance Shares with a grant date fair value equal to $2,500,000, granted on May 4, 2023 along with the annual equity grant awards. |
Mr. Burns
Upon transition from CEO to Executive Chair on March 1, Mr. Gustafsson’s base salary was reduced to $200,000 and he ceased participation in the 2023 Zebra Incentive Plan as of that date. Additionally, he received a one-time $9,000,000 equity award of time-vested RSUs that vest as of the 2024 Annual Meeting of Stockholders.
2023 Annual Cash Incentive Awards
2023 Annual Cash Incentive Awards
Target Awards
Target Awards The 2023 ZIP provides for an annual cash incentive award based on the achievement of pre-determined financial performance goals. All Named Executive Officers participated in the 2023 ZIP. For each Named Executive Officer, the Compensation and Culture Committee (or, in the case of Messrs. Gustafsson and Burns, the Board) establishes a target annual cash incentive award, which is set as a percentage of base salary. The Compensation and Culture Committee discussed each Executive’s performance with Mr. Burns and compared each Executive’s target annual incentive — both the percentage of base salary and the absolute dollar amount — to the market. The 2023 target annual and maximum incentive percentages for Named Executive Officers were established as follows:
Target Awards
| | 2022 Target Annual | 2022 Maximum Annual | 2023 Target Annual | 2023 Maximum Annual | | Named Executive Officer | Cash Incentive* | Cash Incentive* | Cash Incentive* | Cash Incentive* | | William Burns | 100% | 200% | 135% | 270% | | Anders Gustafsson | 135% | 270% | —% | —% | | Nathan Winters | 100% | 200% | 100% | 200% | | Cristen Kogl | 80% | 160% | 80% | 160% | | Jeffrey Schmitz | —% | —% | 80% | 160% | | Joseph White | —% | —% | 100% | 200% | | Joachim Heel | 100% | 200% | 100% | 200% |
Annual Cash Incentive Plan Performance Metrics
Annual Cash Incentive Plan Performance Metrics Our 2023 ZIP incentivizes and rewards for achievements against full-year financial goals.
Annual Cash Incentive Plan Performance Metrics
| Target ZIP Awards ($)X | Consolidated Net Sales (30%) | + | Adjusted EBITDA (50%) | + | EAI Index Performance (20%) | = | ACTUAL ZIP PAYOUT ($) |
Annual Cash Incentive Plan Performance Metrics
| Awards are subject to an overall maximum of 200% of target bonus |
Annual Cash Incentive Plan Performance Metrics
For the 2023 ZIP, the Compensation and Culture Committee selected the three financial performance metrics listed below. The performance goals for the 2023 ZIP were measured on an annual basis, generally consistent with prior years:
Annual Cash Incentive Plan Performance Metrics
| 1. | 2023 consolidated net sales |
Annual Cash Incentive Plan Performance Metrics
| 2. | 2023 “Adjusted EBITDA,” defined as earnings before interest income and expense, taxes, depreciation, amortization and other income/expense, adjusted to remove equity-based compensation expense, adjustments for purchase accounting and certain non-recurring charges |
Annual Cash Incentive Plan Performance Metrics
| 3. | 2023 “Enterprise Asset Intelligence (EAI) Index,” defined as a measure of Zebra’s sales of EAI offerings and is based on sales of specific EAI-related solutions |
Annual Cash Incentive Plan Performance Metrics
The consolidated net sales, Adjusted EBITDA and EAI Index metrics were selected to encourage Executives to focus on profitable sales growth for Zebra’s business. These metrics balance both short and long-term decisions, focusing our Executives on maintaining profitability in our core business while expanding into new markets, such as fixed industrial scanning, machine vision, intelligent automation and retail execution. The EAI Index was added in 2019 to encourage Executives to focus on Zebra’s long-term strategic goal of driving our EAI vision and securing our market position in EAI offerings and specific EAI related solutions.
Annual Cash Incentive Plan Performance Metrics
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Annual Cash Incentive Plan Performance Metrics
The Compensation and Culture Committee set the following threshold, target and maximum performance goals for each metric based on the 2023 business plan.
Annual Cash Incentive Plan Performance Metrics
| Performance Goal | Performance Threshold | Performance Target | Performance Maximum | | Net Sales | 92.5% | 100.0% | 105.0% or more | | Adjusted EBITDA | 80.0% | 100.0% | 112.5% or more | | EAI Index | 75.0% | 100.0% | 115.0% or more | | Associated payout | 50% | 100% | 200% |
2023 Financial Performance Results and Payout Percentage
2023 Financial Performance Results and Payout Percentage The table below shows Zebra’s performance for the three ZIP metrics and the corresponding funding for the Named Executive Officers. The Actual Performance Achievement excludes the financial impact of businesses acquired in 2023.
2023 Financial Performance Results and Payout Percentage
| | Performance | Performance | Performance | Actual | | | | Threshold | Target | Maximum | Performance | Payout | | Performance Goal | (50% of target payout) | (100% of target payout) | (200% of target payout) | Achievement | Percentage | | Net Sales | | | | $4,583.9 million, or 77.4% of target | 0% | | Adjusted EBITDA | | | | $824 million, or 60.5% of target | 0% | | EAI Index | | | | $487.6 million, or 95.2% of target | 90.5% |
2023 Financial Performance Results and Payout Percentage
The payouts on these individual metrics are converted to a ZIP payout percentage as follows:
2023 Financial Performance Results and Payout Percentage
| (Annual Net Sales Performance x 30%) | + | (Annual Adjusted EBITDA Performance x 50%) | + | (Annual EAI Index Performance x 20%) | = | ZIP PAYOUT (percentage of target) |
2023 Financial Performance Results and Payout Percentage
Applying this formula to Zebra’s actual performance results lead to a ZIP payout for 2023 of 18.1% of target for our Named Executive Officers, as shown below:
2023 Financial Performance Results and Payout Percentage
| (0% x 30%) | + | (0% x 50%) | + | (90.5% x 20%) | = | 18.1% |
Performance Management Process and Individual Adjustments
Performance Management Process and Individual Adjustments The actual amounts earned by the Named Executive Officers is based on payout percentage previously shown and can be modified by the Board (for Messrs. Gustafsson and Burns) or the Compensation and Culture Committee (for the other Named Executive Officers) due to performance against individual goals (“Individual Performance Adjustment”). An Individual Performance Adjustment may be applied to reduce annual incentive payouts if a Named Executive Officer fails to meet expectations, or increase annual incentive payouts if a Named Executive Officer exceeds expectations. When determining whether such Individual Performance Adjustment is warranted, the Compensation and Culture Committee (and the Board for Messrs. Gustafsson and Burns) looks to our annual performance management process and the results of our annual talent management review.
Performance Management Process and Individual Adjustments
No adjustments for individual performance were made for the 2023 Annual Incentive Payouts. Based on the performance and payout calculations shown above, the Named Executive Officers received the following annual cash incentive payments for 2023:
2023 ANNUAL CASH INCENTIVE AWARDS FOR THE NAMED EXECUTIVE OFFICERS
2023 ANNUAL CASH INCENTIVE AWARDS FOR THE NAMED EXECUTIVE OFFICERS
2023 ANNUAL CASH INCENTIVE AWARDS FOR THE NAMED EXECUTIVE OFFICERS
| | Actual Award As a Percent | Actual | | Named Executive Officer | of Eligible Compensation | Award | | William Burns(1) | 18.1% | $224,372 | | Anders Gustafsson(2) | 18.1% | $47,397 | | Nathan Winters | 18.1% | $112,255 | | Cristen Kogl | 18.1% | $86,334 | | Jeffrey Schmitz | 18.1% | $76,261 | | Joseph White(3) | 18.1% | $94,763 | | Joachim Heel | 18.1% | $102,892 |
2023 ANNUAL CASH INCENTIVE AWARDS FOR THE NAMED EXECUTIVE OFFICERS
| (1) Eligible compensation includes the portion of the year Mr. Burns served as Chief Products and Solutions Officer and Chief Executive Officer. |
2023 ANNUAL CASH INCENTIVE AWARDS FOR THE NAMED EXECUTIVE OFFICERS
| (2) Eligible compensation includes the portion of the year Mr. Gustafsson served as Chief Executive Officer. |
2023 ANNUAL CASH INCENTIVE AWARDS FOR THE NAMED EXECUTIVE OFFICERS
| (3) Eligible compensation includes the portion of the year Mr. White served as Chief Products and Solutions Officer and SVP and GM of Enterprise Mobile Computing. |
2023 Long-Term Equity Incentive Awards
2023 Long-Term Equity Incentive Awards
Form of Awards
| 1. | time-vested restricted stock units, which vest ratably over three years (with the exception of Mr. Gustafsson’s one time equity award, which cliff vests as of the 2024 Annual Meeting); and |
Form of Awards
| 2. | performance-vested restricted stock units, which are earned (or not) based on results of three financial measures during and over a three-year performance period and cliff vests three years after grant. |
2023 Long-Term Equity Incentive Awards
2023 Long-Term Equity Incentive Awards Each year the Compensation and Culture Committee reviews the allocation of awards among the equity vehicles to ensure alignment with Zebra’s stockholders and to reflect current compensation practices.
2023 Long-Term Equity Incentive Awards
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Target Awards
Target Awards For the Named Executive Officers other than the Chief Executive Officer, each year the Compensation and Culture Committee sets long-term equity awards with a target value at the grant date. In March 2023, the Compensation and Culture Committee utilized market data information for Executive Officers. Except for the time-vested RSUs granted to Messrs. Gustafsson, Burns, and White, the 2023 long-term incentive awards to the Named Executive Officers were granted effective May 4, 2023. When calculating the number of shares of performance-vested restricted stock and time-vested restricted stock, the actual number of shares was set by dividing the value of the equity award grant by the closing price of our common stock on the day prior to the grant date, without any adjustment for the restricted nature of the shares. The following table shows target grant date fair value of long-term equity awarded to each Named Executive Officer in 2023, and how that award was divided among the two types of equity.
Target Awards
| | Total Value of the | Target Shares of Performance- | Shares of Time-Vested | | Named Executive Officer | Equity Award Grant | Vested Restricted Stock | Restricted Stock | | William Burns | $10,000,000 | 27,081 | 9,992 | | Anders Gustafsson | $9,000,000 | -- | 29,976 | | Nathan Winters | $3,750,000 | 8,705 | 5,803 | | Cristen Kogl | $2,250,000 | 5,223 | 3,482 | | Jeffrey Schmitz | $2,000,000 | 4,643 | 3,095 | | Joseph White | $2,000,000 | 4,643 | 2,665 | | Joachim Heel | $2,500,000 | 5,803 | 3,869 |
Performance-Vested Restricted Stock
Performance-Vested Restricted Stock The performance-vested restricted stock granted in 2023 will vest on May 4, 2026. These equity awards have a three-year performance period ending on December 31, 2025, and a payout based on three performance metrics:
Performance-Vested Restricted Stock
| ● | compound average growth (“CAGR”) in net sales (weighted 50%), |
Performance-Vested Restricted Stock
| ● | adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) margin (weighted 30%), and |
Performance-Vested Restricted Stock
| ● | Free Cash Flow (“FCF”) Conversion (weighted 20%). |
Performance-Vested Restricted Stock
We believe these three metrics to be meaningful drivers of the value we create for stockholders. The net sales CAGR metric incentivizes and rewards Executive Officers for growth of Zebra’s revenue consistently over a three-year period. The adjusted EBITDA margin percentage performance goal encourages Executive Officers to focus on long-term profitable sales growth for Zebra’s business while meeting or exceeding a target adjusted EBITDA margin percentage that we believe will create value for our stockholders. This differs from the adjusted EBITDA metric used in the ZIP, which is focused on absolute adjusted EBITDA generated, while this metric is focused on our adjusted EBITDA margin percentage, which looks at how profitable we are in generating EBITDA relative to revenue. The FCF Conversion encourages executives to drive financial discipline and focus on working capital. For each of these metrics, the Compensation and Culture Committee set three annual goals (for 2023, 2024 and 2025) and a cumulative three-year goal. The Executive Officers may earn shares based on Zebra’s results for each of the three years in the performance period, or based on Zebra’s results as of the end of the performance period, whichever is greater. We believe this approach focuses on the fundamentals our Executive Officers control to drive stockholder value and promotes management’s focus on sustained year-over-year performance while also maintaining a longer-term focus on Company growth and performance. In addition, the combination of time horizons promotes Executive Officer retention and engagement. In the event of an unanticipated business or economic downturn, the annual banking component, as discussed in the below chart, provides Executive Officers with the ability to maintain recognition for years of strong performance and helps sustain employee engagement throughout the aggregate performance period if performance achievements are not consistent.
Performance-Vested Restricted Stock
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HOW PERFORMANCE-VESTED RESTRICTED STOCK ACCRUES
HOW PERFORMANCE-VESTED RESTRICTED STOCK ACCRUES
HOW PERFORMANCE-VESTED RESTRICTED STOCK ACCRUES
| Three annual performance targets | OR | Cumulative three-year performance target* | | 16.7% of the target number of shares will be “banked” each year if Zebra achieves the applicable annual performance target for net sales CAGR, for a possible total of 50% | | 50% of the target number of shares will vest if Zebra achieves the performance target for the 3-year cumulative net sales CAGR over 2022 net sales ● 25% target shares vest for threshold performance (50% target shares for net sales CAGR multiplied by 50% threshold performance) ● 100% target shares vest for maximum performance or better (50% target shares for net sales CAGR multiplied by 200% maximum performance) ● No shares vest for performance below threshold | | 10% of the target number of shares will be “banked” each year if Zebra achieves the applicable annual adjusted EBITDA margin performance target, for a possible total of 30% | | 30% of the target number of shares will vest if Zebra achieves the 2023-2025 adjusted EBITDA margin performance target ● 15% target shares vest for threshold performance (30% target shares for adjusted EBITDA margin multiplied by 50% threshold performance) ● 60% target shares vest for maximum performance or better (30% target shares for adjusted EBITDA margin multiplied by 200% maximum performance) ● No shares vest for performance below threshold | | 6.7% of the target number of shares will be “banked” each year if Zebra achieves the applicable annual adjusted FCF Conversion performance target, for a possible total of 20% | | 20% of the target number of shares will vest if Zebra achieves the 2024-2025 FCF Conversion performance target ● 10% target shares vest for threshold performance (20% target shares for adjusted EBITDA margin multiplied by 50% threshold performance) ● 40% target shares vest for maximum performance or better (20% target shares for adjusted EBITDA margin multiplied by 200% maximum performance) ● No shares vest for performance below threshold | | *Performance between the stated performance levels will be interpolated on a straight-line basis. | | |
HOW PERFORMANCE-VESTED RESTRICTED STOCK ACCRUES
The performance targets for 2023, 2024 and 2025 were set based upon management’s net sales CAGR and adjusted EBITDA margin forecasts when preparing the 2023 annual plan. The number of shares of performance-vested restricted stock that could vest for each of the Named Executive Officers is shown below.
RANGE OF POTENTIAL VESTING OF 2023 PERFORMANCE-VESTED RESTRICTED STOCK AT GRANT
RANGE OF POTENTIAL VESTING OF 2023 PERFORMANCE-VESTED RESTRICTED STOCK AT GRANT
RANGE OF POTENTIAL VESTING OF 2023 PERFORMANCE-VESTED RESTRICTED STOCK AT GRANT
| | Failure to Meet Any | Attain Threshold | Attain All | Attain Maximum | | | Performance Target | Free Cash Flow | Performance | Performance | | Named Executive Officers | | Conversion only | Targets | Targets | | William Burns | 0 | 2,708 | 27,081 | 54,162 | | Anders Gustafsson | 0 | — | — | — | | Nathan Winters | 0 | 871 | 8,705 | 17,410 | | Cristen Kogl | 0 | 522 | 5,223 | 10,446 | | Jeffrey Schmitz | 0 | 464 | 4,643 | 9,286 | | Joseph White | 0 | 464 | 4,643 | 9,286 | | Joachim Heel | 0 | 580 | 5,803 | 11,606 |
RANGE OF POTENTIAL VESTING OF 2023 PERFORMANCE-VESTED RESTRICTED STOCK AT GRANT
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Time-Vested Restricted Stock
Time-Vested Restricted Stock To provide a significant long-term perspective and retention incentive, the Compensation and Culture Committee determined that the time-vested restricted stock granted in 2023 to all of the Named Executive Officers will vest one-third on each of the first three anniversaries of the grant date.
Restricted Stock that Vested in 2023
Restricted Stock that Vested in 2023
Performance-Vested Restricted Stock Granted in 2020
Performance-Vested Restricted Stock Granted in 2020 On April 30, 2020, Zebra granted the Named Executive Officers performance-vested restricted stock with a three-year performance period ending December 31, 2022. The 2020 performance-vested restricted stock vested on April 30, 2023 and was earned at 108% of target, reflecting actual performance exceeding the target performance goal for net sales but failing to meet the adjusted EBITDA target. This reflects our strong performance at the outset of the three-year performance period with slowing sales towards the end of the period. From the April 30, 2020 grant date until the vesting date on April 30, 2023, the stock price rose from $244.97 per share to $288.03 per share. The threshold performance targets and actual performance targets are set forth below:
Performance-Vested Restricted Stock Granted in 2020
| | Threshold | Target | Maximum | Actual | | 2020 to 2022 Net Sales 3‑Year Compound Annual Growth Rate (CAGR) | 3.5% | 5.0% | 6.5% | 8.8% | | 2022 adjusted EBITDA margin | 21.5% | 23.0% | 24.0% | 21.4% |
Performance-Vested Restricted Stock Granted in 2020
Set forth below is the number of shares of performance-vested restricted stock that vested for each Named Executive Officer, including the value of the shares on the vesting date.
Performance-Vested Restricted Stock Granted in 2020
| | Target Number | Grant Date Fair | Number of | Value of Shares on | | Named Executive Officers | of Shares Granted in 2020 | Value of Award | Shares Vested | Date of Vesting | | William Burns | 2,531 | $620,019 | 2,733 | $787,186 | | Anders Gustafsson | 13,063 | $3,200,043 | 14,108 | $4,063,527 | | Nathan Winters | 375 | $91,864 | 405 | $116,652 | | Cristen Kogl | 1,592 | $389,992 | 1,719 | $495,124 | | Jeffrey Schmitz | 1,021 | $250,114 | 1,103 | $317,697 | | Joseph White | 818 | $200,385 | 883 | $254,330 | | Joachim Heel | 2,042 | $500,229 | 2,205 | $635,106 |
Time-Vested Restricted Stock that Vested in 2023
Time-Vested Restricted Stock that Vested in 2023
Time-Vested Restricted Stock that Vested in 2023
| ● | On April 30, 2020, Zebra granted the Named Executive Officers time-vested restricted stock with annual vesting in one-third increments on each anniversary of the grant date in 2021, 2022 and 2023. During the three-year period from April 30, 2020 until April 30, 2023, Zebra’s stock price rose from $244.97 per share to $288.03 per share. |
Time-Vested Restricted Stock that Vested in 2023
| ● | On November 5, 2020, Zebra granted Mr. Winters time-vested restricted stock in connection with his appointment to Acting Chief Financial Officer with annual vesting in one-third increments on each anniversary of the grant date in 2021, 2022 and 2023. During the three-year period from November 5, 2020 until November 5, 2023, Zebra’s stock price fell from $329.18 per share to $214.30 per share. |
Time-Vested Restricted Stock that Vested in 2023
| ● | On December 16, 2020, Zebra granted Ms. Kogl and Mr. Schmitz time-vested restricted stock in connection with the assumption of additional functional responsibilities, with annual vesting in one-third increments on each anniversary of the grant date in 2021, 2022 and 2023. During the three-year period from December 16, 2020 until December 16, 2023, Zebra’s stock price fell from $383.45 per share to $270.18 per share. |
Time-Vested Restricted Stock that Vested in 2023
| ● | On February 16, 2021, Zebra granted Mr. Winters time-vested restricted stock in connection with his appointment as Chief Financial Officer, with annual vesting in one-third increments on each anniversary of the grant date in 2022, 2023 and 2024. During the two-year period from February 16, 2021 until February 16, 2023, Zebra’s stock price fell from $477.74 per share to $333.44 per share. |
Time-Vested Restricted Stock that Vested in 2023
| ● | On May 6, 2021, Zebra granted the Named Executive Officers time-vested restricted stock with annual vesting in one-third increments on each anniversary grant date in 2022, 2023, 2024. During the two-year period from May 6, 2021 until May 6, 2023, Zebra’s stock price fell from $482.42 per share to $273.80 per share. |
Time-Vested Restricted Stock that Vested in 2023
| Zebra Technologies Corporation I 2024 Proxy Statement | 59 |
Time-Vested Restricted Stock that Vested in 2023
| ● | On May 5, 2022, Zebra granted the Named Executive Officers time-vested restricted stock with annual vesting in one-third increments on each anniversary grant date in 2023, 2024, 2025. During the one-year period from May 5, 2022 until May 5, 2023, Zebra’s stock price fell from $367.87 per share to $273.80 per share. |
Time-Vested Restricted Stock that Vested in 2023
The table below shows the number of shares of time-vested restricted stock earned by each Named Executive Officer in 2023, and the value of those shares on the vesting date.
Time-Vested Restricted Stock that Vested in 2023
| | Grant Date Fair | Number of Shares | Value of Shares on | | Named Executive Officers | Value of Award | Vested | Date of Vesting | | William Burns | $913,448 | 2,567 | $714,855 | | Anders Gustafsson | $4,264,762 | 12,475 | $3,472,215 | | Nathan Winters | $620,808 | 1,616 | $461,020 | | Cristen Kogl | $675,244 | 1,880 | $521,641 | | Jeffrey Schmitz | $481,283 | 1,332 | $368,957 | | Joseph White | $600,400 | 1,622 | $444,839 | | Joachim Heel | $675,905 | 1,921 | $535,660 |
Performance-Vested Restricted Stock with Performance Period ending December 31, 2023
Performance-Vested Restricted Stock with Performance Period ending December 31, 2023 On May 6, 2021, Zebra granted the Named Executive Officers performance-vested restricted stock with a three-year performance period ending December 31, 2023. The 2021 performance-vested restricted stock will vest on May 6, 2024 and shall earn at 33% of target based on (1) the banking of shares as a result of actual performance in 2021 exceeding the annual target in 2021, (2) no banking of shares for 2022 and 2023 due to actual performance not exceeding target in each year, and (3) the banking exceeding the number of shares earned based on the cumulative three year goals. The threshold performance targets and actual performance targets are set forth below:
Performance-Vested Restricted Stock with Performance Period ending December 31, 2023
| | Threshold | Target | Maximum | Actual | | 2021 to 2023 Net Sales 3‑Year Compound Annual Growth Rate (CAGR) | 5.5% | 7.0% | 8.5% | 1.0% | | 2023 adjusted EBITDA margin | 20.5% | 22.0% | 23.0% | 18.0% |
Performance-Vested Restricted Stock with Performance Period ending December 31, 2023
Set forth below is the number of shares of performance-vested restricted stock that vested in 2024 for each Named Executive Officer from their 2021 award.
Performance-Vested Restricted Stock with Performance Period ending December 31, 2023
| | Target Number | | | | | | of Shares Granted | Grant Date Fair | Number of | Percentage | | Named Executive Officers | in 2021 | Value of Award | Shares Vested | Payout | | William Burns | 2,861 | $1,380,204 | 952 | 33.3% | | Anders Gustafsson | 11,505 | $5,550,242 | 3,831 | 33.3% | | Nathan Winters | 1,928 | $930,106 | 642 | 33.3% | | Cristen Kogl | 1,990 | $960,016 | 662 | 33.3% | | Jeffrey Schmitz | 1,431 | $690,343 | 476 | 33.3% | | Joseph White | 933 | $450,098 | 310 | 33.3% | | Joachim Heel(1) | 2,177 | $1,050,228 | 621 | 33.3% |
Performance-Vested Restricted Stock with Performance Period ending December 31, 2023
| (1) Mr. Heel received a pro rata vested portion of this 2021 performance award due to his departure prior to year end in 2023. |
Performance-Vested Restricted Stock with Performance Period ending December 31, 2023
| 60 | Zebra Technologies Corporation I 2024 Proxy Statement |
How We Establish the Peer Group
How We Establish the Peer Group In July 2022, the Compensation and Culture Committee asked WTW to review Zebra’s peer group and to make recommendations regarding changes. In response, WTW compiled financial and business characteristics (as further described below) of publicly traded companies WTW viewed as comparable to Zebra, including all of the companies in the peer group used for 2022 executive compensation. In compiling the recommended peer group, WTW first determined the universe of potential peers using the following criteria:
How We Establish the Peer Group
| ● | Industry Classification Research — review of all U.S.-based publicly-listed companies within the Global Industry Classification Standards (“GICS”) for the Technology Hardware and Equipment, Software and Services, Semiconductors and Semiconductor Equipment and Healthcare Equipment and Services; |
How We Establish the Peer Group
| ● | Peers-of-Peers Analysis — review of companies that identify Zebra as a peer and a review of companies that are disclosed as peers to companies in Zebra’s peer group; and |
How We Establish the Peer Group
| ● | Zebra’s 2022 ISS and Glass Lewis Peer Groups — review of proxy advisors’ 2022 Zebra peer groups for overall reasonableness and relevance. |
How We Establish the Peer Group
The Compensation and Culture Committee then reviewed the following company-specific information provided by WTW for the proposed peer group:
How We Establish the Peer Group
| ● | business model, industry, cost structures and levels of complexity; |
How We Establish the Peer Group
| ● | size of the organization, including in terms of revenue (all 18 companies had 2022 revenue between 50% and 200% of Zebra’s 2022 revenue of $5.7 billion), and whether the companies were currently in the S&P 500; |
How We Establish the Peer Group
| ● | whether the proposed peer group member competes with Zebra for talent; |
How We Establish the Peer Group
| ● | stockholder profile (i.e., whether the proposed peer group member is considered a reasonable investment alternative and attracts stockholders with similar risk/return expectations); |
How We Establish the Peer Group
| ● | market capitalization; and |
How We Establish the Peer Group
| ● | whether the proposed peer group member creates products or solutions of a technical nature. |
How We Establish the Peer Group
For 2023, WTW recommended removing two companies and adding two companies to the peer group used in 2022. The Compensation and Culture Committee reviewed the proposal and agreed to remove two companies (Avaya Holdings Corporation and Diebold Nixdorf, Inc.) and include the proposed additions (Teradyne, Inc. and Akamai Technologies, Inc.). Based on these changes, the Compensation and Culture Committee approved the companies shown below as the peer group for purposes of evaluating and determining 2023 executive compensation. Zebra’s revenue was at the 46th percentile of the revised peer group; Zebra’s market capitalization was at 53rd percentile.
How We Establish the Peer Group
| Zebra’s Peer Group for 2023 Compensation Purposes | | | | Agilent Technologies, Inc. | CommScope Holding Company Inc. | NCR Corporation | | Akamai Technologies, Inc. | Insight Enterprises Inc. | NetApp, Inc. | | Analog Devices, Inc. | Juniper Networks, Inc. | Rockwell Automation, Inc. | | Autodesk, Inc. | Keysight Technologies, Inc. | ServiceNow, Inc. | | Ciena Corporation | KLA Corporation | Teradyne, Inc. | | Citrix Systems, Inc. | Motorola Solutions, Inc. | Trimble Inc. |
How We Establish the Peer Group
| Zebra Technologies Corporation I 2024 Proxy Statement | 61 |
How 2023 Compensation for the Named Executive Officers Compares to the Peer Group
How 2023 Compensation for the Named Executive Officers Compares to the Peer Group For 2023 compensation purposes, WTW presented the Compensation and Culture Committee with data regarding compensation for executive officer positions, including our Named Executive Officers’ positions. WTW compiled this information from 2021 compensation data from our 2022 peer group, a general industry survey (conducted by WTW for other purposes) of over 400 companies, a high-technology industry survey (conducted by Radford for other purposes) of over 100 high-technology companies with annual revenues between $2.86 billion and $11.4 billion. WTW compiled compensation data for base salaries, target annual cash incentive awards, target long-term equity awards and total target direct compensation for individual executive officer positions. Using this data, the Compensation and Culture Committee confirmed that the 2023 compensation packages for the Named Executive Officers are at an appropriate level in comparison to the market and based on each Named Executive Officer’s performance.
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| | | | | | | Non-Equity | | | | | | | | Stock | Option/SAR | Incentive Plan | All Other | | | Name and | | Salary | Bonus | Awards | Awards | Compensation | Compensation | Total | | Principal Position | Year | ($) | ($) | ($)(1) | ($)(1)(2) | ($)(3) | ($)(4) | ($) | | William Burns | 2023 | 946,205 | — | 10,000,537 | — | 224,372 | 88,782 | 11,259,895 | | Chief Executive Officer | 2022 | 667,197 | — | 3,000,000 | — | 508,038 | 56,935 | 4,232,170 | | | 2021 | 557,659 | — | 2,300,661 | — | 1,071,008 | 82,806 | 4,012,134 | | Anders Gustafsson | 2023 | 361,537 | — | 9,000,294 | — | 47,397 | 96,574 | 9,505,801 | | Executive Chair of the Board | 2022 | 1,200,000 | — | 12,000,000 | — | 1,255,500 | 203,243 | 14,658,743 | | Former Chief Executive Officer | 2021 | 1,200,000 | — | 9,250,404 | — | 2,912,760 | 226,452 | 13,589,616 | | Nathan Winters | 2023 | 620,192 | — | 3,750,318 | — | 112,255 | 30,122 | 4,512,887 | | Chief Financial Officer | 2022 | 600,000 | — | 2,500,000 | — | 457,548 | 29,390 | 3,586,938 | | | 2021 | 537,760 | — | 1,550,212 | — | 771,996 | 16,458 | 2,876,426 | | Cristen Kogl | 2023 | 596,226 | — | 2,250,243 | — | 86,334 | 59,337 | 2,992,140 | | Chief Legal Officer, | 2022 | 580,381 | — | 2,000,000 | — | 355,919 | 70,738 | 3,007,038 | | General Counsel & Corporate Secretary | 2021 | 531,048 | — | 1,600,187 | — | 767,302 | 32,436 | 2,930,973 | | Jeffrey Schmitz | 2023 | 526,662 | — | 2,000,273 | — | 76,261 | 43,823 | 2,647,019 | | Chief People Officer | | | | | | | | | | Joseph White | 2023 | 544,345 | — | 2,000,382 | — | 94,763 | 29,596 | 2,669,086 | | Chief Product and Solutions Officer | | | | | | | | | | Joachim Heel | 2023 | 568,462 | — | 2,500,212 | — | 102,892 | 73,330 | 3,244,896 | | Former Chief Revenue Officer | 2022 | 600,000 | — | 2,250,000 | — | 459,010 | 111,428 | 3,420,438 | | | 2021 | 548,061 | — | 1,750,702 | — | 840,208 | 88,263 | 3,227,234 |
Summary Compensation Table
| (1) The amounts reflect the aggregate grant date fair value, computed in accordance with Financial Accounting Standards Codification Topic 718, Compensation — Stock Compensation, of restricted stock and stock appreciation rights. The amounts included in this column include the grant date fair value of time-vested restricted stock and stock appreciation rights, as well as performance-vested restricted stock, which is calculated based on the probable satisfaction of the performance conditions for such awards. If the highest level of performance is achieved for the performance-vested restricted stock granted in 2023, the grant date fair value of such stock awards would be as follows: Mr. Burns — $14,000,877; Mr. Winters — $4,500,485; Ms. Kogl — $2,700,291; Mr. Schmitz - $2,400,431; Mr. White - $2,400,431; and Mr. Heel — $3,000,151. Please see Note 15, “Share-Based Compensation,” of Zebra’s consolidated financial statements included in Zebra’s Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of assumptions made in calculating the aggregate grant date fair value of these awards. |
Summary Compensation Table
| (2) Zebra stopped awarding stock appreciation rights to our Named Executive Officers after 2020. |
Summary Compensation Table
| (3) The amounts in this column reflect the annual incentive compensation earned under the 2023 Zebra Incentive Plan. |
Summary Compensation Table
| (4) All other compensation for 2023 consists of 401(k) matching contributions (Mr. Burns — $13,200; Mr. Gustafsson — $13,200; Mr. Winters — $13,200; Ms. Kogl — $13,200; Mr. Schmitz – $13,200; Mr. White – $13,200; and Mr. Heel — $13,200); life insurance premiums (Mr. Burns — $1,080; Mr. Gustafsson — $450; Mr. Winters — $1,003; Ms. Kogl — $964; Mr. Schmitz – $852; Mr. White – $882 and Mr. Heel — $913); Zebra paid executive long-term disability insurance premiums (Mr. Burns — $24,736; Mr. Gustafsson — $34,645; Mr. Winters — $8,748; Ms. Kogl — $13,075; Mr. Schmitz – $13,061; Mr. White – $10,348; and Mr. Heel — $17,007); a tax reimbursement in connection with income recognized for long-term disability premiums paid by Zebra (Mr. Burns — $25,798; Mr. Gustafsson — $27,554; Mr. Winters — $6,957; Mr. White – $10,399; Ms. Kogl — $5,413; Mr. Schmitz – $5,166 and Mr. Heel — $16,723); executive health screenings paid for by Zebra (Mr. Burns — $11,600; Mr. Gustafsson — $11,328; Ms. Kogl — $11,871; Mr. Schmitz – $7,772; and Mr. Heel — $8,634); a tax reimbursement in connection with the executive health screenings paid by Zebra (Mr. Burns – $12,368; Mr. Gustafsson – $9,010; Ms. Kogl — $9,441; Mr. Schmitz – $3,221; and Mr. Heel — $8,490); reimbursement for identify theft protection paid by Zebra (Mr. Gustafsson — $215; Mr. Winters — $119; Ms. Kogl — $215; Mr. Schmitz – $215 and Mr. Heel — $207); a tax reimbursement for identity theft protection paid by Zebra (Mr. Gustafsson — $171; Mr. Winters — $95; Ms. Kogl - $171; Mr. Schmitz - $89; and Mr. Heel — $203); a reimbursement (expenses and gross up tax) for top earners sales trip paid by Zebra (Mr. Heel — $7,952). |
Summary Compensation Table
| Zebra Technologies Corporation I 2024 Proxy Statement | 63 |
Grants of Plan-Based Awards in 2023
Grants of Plan-Based Awards in 2023
Grants of Plan-Based Awards in 2023
| | | Estimated Future Payouts | | | Estimated Future Payouts | | | All Other | All Other | Exercise | Grant | | | | Under Non-Equity Incentive | | | Under Equity Incentive | | | Stock | Options | or | Date Fair | | | | Plan Awards(1) | | | Plan Awards(2) | | | Awards: | Awards, | Base | Value of | | | | | | | | | | Number | Number of | Price | Stock | | | | | | | | | | of | Securities | of | and | | | | | | | | | | Shares of | Underlying | Option | Option | | | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | Stock | Options | Awards | Awards | | Name | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#)(3) | (#)(4) | ($/Sh)(4) | ($)(5) | | William Burns | | 638,689 | 1,277,377 | 2,554,754 | | | | | | | | | | 3/1/2023 | | | | | | | 9,992 | | | 3,000,098 | | | 5/4/2023 | | | | 8,705 | 17,409 | 34,818 | | | | 4,500,227 | | | 5/4/2023 | | | | 4,836 | 9,672 | 19,344 | | | | 2,500,212 | | Anders Gustafsson | | 130,932 | 261,863 | 523,726 | | | | | | | | | | 3/1/2023 | | | | | | | 29,976 | | | 9,000,294 | | Nathan Winters | | 310,096 | 620,192 | 1,240,384 | | | | | | | | | | 5/4/2023 | | | | | | | 5,803 | | | 1,500,076 | | | 5/4/2023 | | | | 4,353 | 8,705 | 17,410 | | | | 2,250,243 | | Cristen Kogl | | 238,491 | 476,981 | 953,962 | | | | | | | | | | 5/4/2023 | | | | | | | 3,482 | | | 900,097 | | | 5/4/2023 | | | | 2,612 | 5,223 | 10,446 | | | | 1,350,146 | | Jeffrey Schmitz | | 210,665 | 421,329 | 842,658 | | | | | | | | | | 5/4/2023 | | | | | | | 3,095 | | | 800,058 | | | 5/4/2023 | | | | 2,322 | 4,643 | 9,286 | | | | 1,200,216 | | Joseph White | | 261,776 | 523,551 | 1,047,102 | | | | | | | | | | 3/1/2023 | | | | | | | 2,665 | | | 800,166 | | | 5/4/2023 | | | | 2,322 | 4,643 | 9,286 | | | | 1,200,216 | | Joachim Heel | | 284,231 | 568,462 | 1,136,924 | | | | | | | | | | 5/4/2023 | | | | | | | 3,869 | | | 1,000,137 | | | 5/4/2023 | | | | 2,902 | 5,803 | 11,606 | | | | 1,500,076 |
Grants of Plan-Based Awards in 2023
| (1) These amounts represent the threshold, target and maximum potential earnings under the 2023 Zebra Incentive Plan. The actual amounts earned in respect of 2023 are reported in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. Please see 2023 Annual Cash Incentive Awards starting on page 53 for further discussion of the 2023 Zebra Incentive Plan. |
Grants of Plan-Based Awards in 2023
| (2) These amounts represent the threshold, target and maximum number of shares of performance-vested restricted stock granted under Zebra’s 2018 Long-Term Incentive Plan on May 4, 2023. These awards are scheduled to vest on May 4, 2026 (having a three-year performance period ending on December 31, 2025). Please see 2023 Long-Term Equity Incentive Awards starting on page 56 for further discussion of Zebra’s long-term equity incentive plan and the Potential Payments upon Termination of Employment or Change in Control starting on page 71 for further discussion of vesting terms upon certain termination events. |
Grants of Plan-Based Awards in 2023
| (3) Represents shares of time-vested restricted stock granted under Zebra’s 2018 Long-Term Incentive Plan on May 4, 2023. These awards vest one-third on each of the first three anniversaries of the grant date. Please see 2023 Long-Term Equity Incentive Awards starting on page 56 for further discussion of Zebra’s long-term equity incentive plan and the Potential Payments upon Termination of Employment or Change in Control starting on page 71 for further discussion of vesting terms upon certain termination events. |
Grants of Plan-Based Awards in 2023
| (4) Zebra stopped awarding stock appreciation rights to our Named Executive Officers after 2020. |
Grants of Plan-Based Awards in 2023
| (5) The amounts included in this column were determined in accordance with Financial Accounting Standards Codification Topic 718, Compensation — Stock Compensation and, in the case of performance-vested restricted stock, are calculated based on the probable satisfaction of the performance conditions. Please see Note 15, “Share-Based Compensation,” of Zebra’s consolidated financial statements included in Zebra’s Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of assumptions made in calculating the aggregate grant date fair value of these awards. |
Grants of Plan-Based Awards in 2023
| 64 | Zebra Technologies Corporation I 2024 Proxy Statement |
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End
| | Option/SAR Awards | | | | | Stock Awards | | | | | | | | | | | | | | Equity | | | | | | | | | | Equity | Incentive | | | | | Equity | | | | | Incentive | Plan Awards: | | | | | Incentive | | | Number | | Plan | Market or | | | | | Plan | | | of | Market | Awards: | Payout | | | Number of | Number of | Awards: | | | Shares | Value of | Number of | Value | | | Securities | Securities | Number of | | | or Units | Shares | Unearned | of Unearned | | | Underlying | Underlying | Securities | | | of Stock | or Units | Shares, | Shares, Units | | | Unexercised | Unexercised | Underlying | | | That | of Stock | Units or | or Other | | | Options/ | Options/ | Unexercised | Option | | Have | That | Other Rights | Rights That | | | SARs | SARs | Unearned | Exercise | Option | Not | Have Not | That Have | Have Not | | | (#) | (#) | Options | Price | Expiration | Vested | Vested | Not Vested | Vested | | Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($)(1) | (#) | ($)(1) | | William Burns(2) | | | | | | | | | | | 5/11/2017 | 7,709 | | | 98.87 | 5/11/2024 | | | | | | 5/10/2018 | 5,463 | | | 149.57 | 5/10/2025 | | | | | | 5/02/2019 | 4,364 | | | 205.12 | 5/2/2026 | | | | | | 4/30/2020 | 2,925 | 976 | | 244.97 | 4/30/2027 | | | | | | 5/06/2021(3) | | | | | | 636 | 173,838 | | | | 5/06/2021(4) | | | | | | | | 952 | 260,210 | | 5/05/2022(3) | | | | | | 2,176 | 594,766 | | | | 5/5/2022(5) | | | | | | | | 4,894 | 1,337,677 | | 3/01/2023(3) | | | | | | 9,992 | 2,731,113 | | | | 5/04/2023(6) | | | | | | | | 9,672 | 2,643,648 | | 5/04/2023(6) | | | | | | | | 17,409 | 4,758,402 | | Anders Gustafsson(7) | | | | | | | | | | | 5/12/2016 | 42,256 | | | 51.42 | 5/12/2026 | | | | | | 5/11/2017 | 33,514 | | | 98.87 | 5/11/2024 | | | | | | 5/10/2018 | 25,214 | | | 149.57 | 5/10/2025 | | | | | | 5/02/2019 | 23,379 | | | 205.12 | 5/2/2026 | | | | | | 4/30/2020 | 15,100 | 5,034 | | 244.97 | 4/30/2027 | | | | | | 5/06/2021(3) | | | | | | 2,453 | 670,478 | | | | 5/06/2021(4) | | | | | | | | 3,831 | 1,047,127 | | 5/05/2022(3) | | | | | | 8,523 | 2,329,592 | | | | 5/05/2022(5) | | | | | | | | 19,573 | 5,349,888 | | 3/01/2023(8) | | | | | | 28,762 | 7,861,517 | | |
Outstanding Equity Awards at 2023 Fiscal Year-End
| Zebra Technologies Corporation I 2024 Proxy Statement | 65 |
Outstanding Equity Awards at 2023 Fiscal Year-End
| | Option/SAR Awards | | | | | Stock Awards | | | | | | | | | | | | | | Equity | | | | | | | | | | Equity | Incentive | | | | | Equity | | | | | Incentive | Plan Awards: | | | | | Incentive | | | Number | | Plan | Market or | | | | | Plan | | | of | Market | Awards: | Payout | | | Number of | Number of | Awards: | | | Shares | Value of | Number of | Value | | | Securities | Securities | Number of | | | or Units | Shares | Unearned | of Unearned | | | Underlying | Underlying | Securities | | | of Stock | or Units | Shares, | Shares, Units | | | Unexercised | Unexercised | Underlying | | | That | of Stock | Units or | or Other | | | Options/ | Options/ | Unexercised | Option | | Have | That | Other Rights | Rights That | | | SARs | SARs | Unearned | Exercise | Option | Not | Have Not | That Have | Have Not | | | (#) | (#) | Options | Price | Expiration | Vested | Vested | Not Vested | Vested | | Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($)(1) | (#) | ($)(1) | | Nathan Winters(9) | | | | | | | | | | | 5/10/2018 | 552 | | | 149.57 | 5/10/2025 | | | | | | 5/02/2019 | 315 | | | 205.12 | 5/2/2026 | | | | | | 4/30/2020 | 433 | 145 | | 244.97 | 4/30/2027 | | | | | | 2/16/2021(3) | | | | | | 433 | 118,352 | | | | 5/6/2021(4) | | | | | | | | 642 | 175,478 | | 5/05/2022(3) | | | | | | 1,813 | 495,547 | | | | 5/05/2022(5) | | | | | | | | 4,078 | 1,114,640 | | 5/04/2023(3) | | | | | | 5,803 | 1,586,134 | | | | 5/04/2023(6) | | | | | | | | 8,705 | 2,379,338 | | Cristen Kogl(10) | | | | | | | | | | | 5/11/2017 | 930 | | | 98.87 | 5/11/2024 | | | | | | 8/09/2017 | 719 | | | 103.84 | 8/9/2024 | | | | | | 5/10/2018 | 862 | | | 149.57 | 5/10/2025 | | | | | | 9/01/2018 | 732 | | | 171.74 | 9/1/2025 | | | | | | 5/02/2019 | 2,260 | | | 205.12 | 5/2/2026 | | | | | | 4/30/2020 | 1,840 | 614 | | 244.97 | 4/30/2027 | | | | | | 5/06/2021(3) | | | | | | 425 | 116,165 | | | | 5/6/2021(4) | | | | | | | | 662 | 180,944 | | 5/05/2022(3) | | | | | | 1,420 | 388,129 | | | | 5/05/2022(5) | | | | | | | | 3,263 | 891,876 | | 5/04/2023(3) | | | | | | 3,435 | 938,889 | | | | 5/04/2023(6) | | | | | | | | 5,223 | 1,427,603 |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 66 | Zebra Technologies Corporation I 2024 Proxy Statement |
Outstanding Equity Awards at 2023 Fiscal Year-End
| | Option/SAR Awards | | | | | Stock Awards | | | | | | | | | | | | | | Equity | | | | | | | | | | Equity | Incentive | | | | | Equity | | | | | Incentive | Plan Awards: | | | | | Incentive | | | Number | | Plan | Market or | | | | | Plan | | | of | Market | Awards: | Payout | | | Number of | Number of | Awards: | | | Shares | Value of | Number of | Value | | | Securities | Securities | Number of | | | or Units | Shares | Unearned | of Unearned | | | Underlying | Underlying | Securities | | | of Stock | or Units | Shares, | Shares, Units | | | Unexercised | Unexercised | Underlying | | | That | of Stock | Units or | or Other | | | Options/ | Options/ | Unexercised | Option | | Have | That | Other Rights | Rights That | | | SARs | SARs | Unearned | Exercise | Option | Not | Have Not | That Have | Have Not | | | (#) | (#) | Options | Price | Expiration | Vested | Vested | Not Vested | Vested | | Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($)(1) | (#) | ($)(1) | | Jeffrey Schmitz(11) | | | | | | | | | | | 5/10/2018 | 563 | | | 149.57 | 5/10/2025 | | | | | | 5/02/2019 | 874 | | | 205.12 | 5/2/2026 | | | | | | 4/30/2020 | 786 | 394 | | 244.97 | 4/30/2027 | | | | | | 5/06/2021(3) | | | | | | 305 | 83,366 | | | | 5/06/2021(4) | | | | | | | | 476 | 130,105 | | 5/05/2022(3) | | | | | | 1,065 | 291,096 | | | | 5/05/2022(5) | | | | | | | | 2,447 | 668,839 | | 5/04/2023(3) | | | | | | 3,053 | 834,476 | | | | 5/04/2023(6) | | | | | | | | 4,643 | 1,269,071 | | Joseph White(12) | | | | | | | | | | | 5/11/2017 | 922 | | | 98.87 | 5/11/2024 | | | | | | 5/10/2018 | 841 | | | 149.57 | 5/10/2025 | | | | | | 5/02/2019 | 935 | | | 205.12 | 5/2/2026 | | | | | | 4/30/2020 | 945 | 315 | | 244.97 | 4/30/2027 | | | | | | 5/6/2021(3) | | | | | | 208 | 56,853 | | | | 5/6/2021(4) | | | | | | | | 310 | 84,732 | | 5/5/2022(3) | | | | | | 544 | 148,692 | | | | 5/5/2022(5) | | | | | | | | 1,224 | 334,556 | | 3/1/2023(3) | | | | | | 2,665 | 728,424 | | | | 5/4/2023(6) | | | | | | | | 4,643 | 1,269,071 |
Outstanding Equity Awards at 2023 Fiscal Year-End
| Zebra Technologies Corporation I 2024 Proxy Statement | 67 |
Outstanding Equity Awards at 2023 Fiscal Year-End
| | Option/SAR Awards | | | | | Stock Awards | | | | | | | | | | | | | | Equity | | | | | | | | | | Equity | Incentive | | | | | Equity | | | | | Incentive | Plan Awards: | | | | | Incentive | | | Number | | Plan | Market or | | | | | Plan | | | of | Market | Awards: | Payout | | | Number of | Number of | Awards: | | | Shares | Value of | Number of | Value | | | Securities | Securities | Number of | | | or Units | Shares | Unearned | of Unearned | | | Underlying | Underlying | Securities | | | of Stock | or Units | Shares, | Shares, Units | | | Unexercised | Unexercised | Underlying | | | That | of Stock | Units or | or Other | | | Options/ | Options/ | Unexercised | Option | | Have | That | Other Rights | Rights That | | | SARs | SARs | Unearned | Exercise | Option | Not | Have Not | That Have | Have Not | | | (#) | (#) | Options | Price | Expiration | Vested | Vested | Not Vested | Vested | | Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($)(1) | (#) | ($)(1) | | Joachim Heel | | | | | | | | | | | 9/15/2014 | 8,572 | | | 73.50 | 9/15/2024 | | | | | | 5/15/2015 | 4,526 | | | 108.20 | 12/1/2024 | | | | | | 5/12/2016 | 8,854 | | | 51.42 | 12/1/2024 | | | | | | 5/11/2017 | 6,033 | | | 98.87 | 5/11/2024 | | | | | | 5/10/2018 | 4,203 | | | 149.57 | 12/1/2024 | | | | | | 5/02/2019 | 3,273 | | | 205.12 | 12/1/2024 | | | | | | 4/30/2020 | 2,820 | | | 244.97 | 12/1/2024 | | | | | | 5/6/2021(3) | | | | | | 462 | 126,278 | | | | 5/6/2021(4) | | | | | | | | 1,833 | 501,014 | | 5/5/2022(3) | | | | | | 778 | 212,651 | | | | 5/5/2022(5) | | | | | | | | 1,925 | 526,160 | | 5/4/2023(3) | | | | | | 1,231 | 336,469 | | | | 5/4/2023(6) | | | | | | | | 1,117 | 305,310 |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (1) The market value is based on the $273.33 closing price of our common stock on The Nasdaq Stock Market on December 29, 2023. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (2) Mr. Burns’ stock appreciation rights granted on April 30, 2020 will vest with respect to 976 rights on April 30, 2024. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (3) These restricted stock awards vest pro rata over three years after the grant date. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (4) Represents the number of restricted shares that would vest on May 6, 2024, based upon achievement of a threshold performance CAGR of 2023 net sales over 2020 net sales and a threshold performance of 2023 adjusted EBITDA margin. The maximum number of restricted shares that may vest based upon the achievement of a maximum target level of 2023 net sales CAGR and a maximum target level of 2023 adjusted EBITDA margin is as follows: Mr. Gustafsson — 23,010 shares; Mr. Winters — 3,856 shares; Mr. Burns — 5,722 shares; Mr. Heel — 4,354 shares; and Ms. Kogl — 3,980 shares. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (5) Represents the number of restricted shares that would vest on May 5, 2025, based upon achievement of threshold performance CAGR of 2024 net sales over 2021 net sales and threshold performance target of 2024 adjusted EBITDA margin. The maximum number of restricted shares that may vest based upon the achievement of a maximum target level of 2024 net sales CAGR and a maximum target level of 2024 adjusted EBITDA margin is as follows: Mr. Gustafsson — 39,146 shares; Mr. Winters — 8,156 shares; Mr. Burns — 9,788 shares; Mr. Heel — 7,340 shares; and Ms. Kogl — 6,526 shares. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (6) Represents the number of restricted shares that would vest on May 4, 2026, based upon achievement of threshold performance CAGR of 2025 net sales over 2022 net sales, threshold performance of 2025 adjusted EBITDA margin and threshold performance of Free Cash Flow Conversion. The maximum number of restricted shares that may vest based upon the achievement of a maximum target level of 2024 net sales CAGR and a maximum target level of 2024 adjusted EBITDA margin is as follows: Mr. Burns — 54,162 shares , Mr. Winters — 17,410 shares; Ms. Kogl — 10,446 shares; Mr. Schmitz — 9,286 shares; Mr. White — 9,286 shares; and Mr. Heel — 11,606 shares. See “Grants of Plan-Based Awards in 2023” table and footnote 2 to that table for a more detailed description of these awards. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (7) Mr. Gustafsson’s stock appreciation rights granted on April 30, 2020 will vest with respect to 5,034 rights on April 30, 2024. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (8) This restricted stock award vests fully on the one-year anniversary of its grant date. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (9) Mr. Winters’ stock appreciation rights granted on April 30, 2020 will vest with respect to 145 rights on April 30, 2024. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (10) Ms. Kogl’s stock appreciation rights granted on April 30, 2020 will vest with respect to 614 rights on April 30, 2024. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (11) Mr. Schmitz’s stock appreciation rights granted on April 30, 2020 will vest with respect to 394 rights on April 30, 2024. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (12) Mr. White’s stock appreciation rights granted on April 30, 2020 will vest with respect to 315 rights on April 30, 2024. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 68 | Zebra Technologies Corporation I 2024 Proxy Statement |
Options and Stock Appreciation Rights Exercised and Stock Vested in 2023
Options and Stock Appreciation Rights Exercised and Stock Vested in 2023 The table below sets forth information with respect to stock options and stock appreciation rights exercised by the Named Executive Officers during 2023 and awards of time-vested and performance-vested restricted stock that vested in 2023.
Options and Stock Appreciation Rights Exercised and Stock Vested in 2023
| | Options/SARS Awards | | Stock Awards | | | | Number of Shares | Value Realized | Number of Shares | Value Realized | | | Acquired on | on Exercise | Acquired on Vesting | on Vesting | | Name | Exercise (#) | ($)(1) | (#) | ($)(2) | | William Burns | — | — | 5,300 | 1,502,041 | | Anders Gustafsson | — | — | 26,583 | 7,535,742 | | Nathan Winters | — | — | 2,021 | 577,672 | | Cristen Kogl | — | — | 3,599 | 1,016,765 | | Jeffrey Schmitz | — | — | 2,454 | 692,265 | | Joseph White | — | — | 2,505 | 699,169 | | Joachim Heel | — | — | 4,158 | 1,180,204 |
Options and Stock Appreciation Rights Exercised and Stock Vested in 2023
| (1) Value calculated as the difference between the market price of the underlying securities on the date of exercise and the exercise or base price of the exercised stock options or stock appreciation rights. |
Options and Stock Appreciation Rights Exercised and Stock Vested in 2023
| (2) Value calculated as the sum of the value of performance-vested restricted stock and time-vested restricted stock that vested in 2023. See “Restricted Stock that Vested in 2023” section for a more detailed description of these awards. |
Non-Qualified Deferred Compensation
Non-Qualified Deferred Compensation Pursuant to Zebra’s non-qualified deferred compensation plan, a Named Executive Officer may defer, on a pre-tax basis, up to 50% of his or her base salary and annual incentive award. Deferred compensation balances are credited with gains or losses that mirror the performance of benchmark investment funds selected by the participant under the plan. All credited amounts are unfunded general obligations of Zebra, and participants have no greater rights to payment than any unsecured general creditor of Zebra. The value of a participant’s account is based upon the performance of a participant’s selected benchmark investment funds. Account balances are paid either in a lump sum or in annual installments. Zebra’s non-qualified deferred compensation plan permits payment upon, among other things, a termination of employment or a change in control of Zebra. Zebra does not make contributions to the plan but pays the costs of administration.
Non-Qualified Deferred Compensation
| Zebra Technologies Corporation I 2024 Proxy Statement | 69 |
Non-Qualified Deferred Compensation
The table below shows the funds available under Zebra’s non-qualified deferred compensation plan and the 2023 rates of return.
Non-Qualified Deferred Compensation
| Fund Name | 2023 Rate of Return (%) | | American Funds New Perspective Fund Class R‑6 (RNPGX) | 25.01% | | American Funds EuroPacific Growth Fund Class R‑6 (RERGX) | 16.05 | | Vanguard Federal Money Market Fund (VMFXX) | 5.09 | | Vanguard FTSE Social Index Fund (VFTAX) | 31.79 | | Vanguard Institutional Target Retirement 2020 Fund | 12.52 | | Vanguard Institutional Target Retirement 2025 Fund | 14.56 | | Vanguard Institutional Target Retirement 2030 Fund | 16.03 | | Vanguard Institutional Target Retirement 2035 Fund | 17.20 | | Vanguard Institutional Target Retirement 2040 Fund | 18.37 | | Vanguard Institutional Target Retirement 2045 Fund | 19.53 | | Vanguard Institutional Target Retirement 2050 Fund | 20.22 | | Vanguard Institutional Target Retirement 2055 Fund | 20.23 | | Vanguard Institutional Target Retirement 2060 Fund | 20.23 | | Vanguard Institutional Target Retirement 2065 Fund | 20.24 | | Vanguard Institutional Target Retirement 2070 Fund | Not Available | | Harbor Large Cap Value Fund Retirement Class (HNLVX) | 19.83 | | Retire Savings Trust III | 2.52 | | PIMCO Inflation Response Multi-Asset Fund Instl (PIRMX) | 6.50 | | PIMCO Total Return Instl (PTTRX) | 6.30 | | Royce Opportunity Fund Institutional Class (ROFIX) | 19.65 | | T. Rowe Price International Discovery (PRIDX) | 13.14 | | T. Rowe Price Small-Cap Stock (OTCFX) | 17.43 | | T. Rowe Price Institutional Large Cap Growth Fund (TRLGX) | 46.21 |
Non-Qualified Deferred Compensation
| 70 | Zebra Technologies Corporation I 2024 Proxy Statement |
Non-Qualified Deferred Compensation for 2023
Non-Qualified Deferred Compensation for 2023 The table below sets forth information regarding the Named Executive Officers’ participation in the Zebra’s non-qualified deferred compensation plan in 2023.
Non-Qualified Deferred Compensation for 2023
| | Executive | Registrant | Aggregate | Aggregate | Aggregate Balance | | | Contributions in | Contributions in | Earnings | Withdrawals/ | at Last Fiscal | | | Last Fiscal Year | Last Fiscal Year | in Last Fiscal | Distributions | Year-End | | Name | ($)(1) | ($) | Year ($)(2) | ($) | ($) | | William Burns | 72,074 | — | 119,640 | — | 636,367 | | Anders Gustafsson | — | — | — | — | — | | Nathan Winters | — | — | — | — | — | | Cristen Kogl | 148,527 | — | 86,212 | — | 665,104 | | Jeffrey Schmitz | 123,108 | — | 75,436 | — | 476,597 | | Joseph White | — | — | — | — | — | | Joachim Heel | 229,505 | — | 276,475 | — | 1,383,293 |
Non-Qualified Deferred Compensation for 2023
| (1) The amount(s) reported in this column are included in the Summary Compensation Table under the “Salary” and “Non-Equity Incentive Plan Compensation” columns. |
Non-Qualified Deferred Compensation for 2023
| (2) The amount(s) reported in this column are not included in the Summary Compensation Table. |
Potential Payments upon Termination of Employment or Change in Control
Potential Payments upon Termination of Employment or Change in Control
Potential Payments upon Termination of Employment or Change in Control
Potential Payments upon Termination of Employment or Change in Control Described below are the potential payments and benefits to which the Named Executive Officers would be entitled from Zebra under their employment agreements, equity award agreements and Zebra’s compensation and benefit plans upon termination of employment if such termination had occurred as of December 31, 2023. Amounts actually received would vary based on factors such as the date on which a Named Executive Officer’s employment terminates and the price of our common stock on such date. The tables exclude payments and benefits that are generally available to full-time salaried employees, such as accrued salary and vacation pay. The Named Executive Officers are not entitled to any payments or benefits as a result of a termination of employment for Cause.
CEO Pay Ratio
CEO Pay Ratio
CEO Pay Ratio Calculation
CEO Pay Ratio Calculation For 2023,
CEO Pay Ratio Calculation
| ● | the total annual compensation of the employee identified at the median of all of our employees, other than Mr. Burns, our CEO, was $64,037; and |
CEO Pay Ratio Calculation
| ● | Mr. Burns’ annualized total compensation as CEO was $11,333,669. |
CEO Pay Ratio Calculation
| ● | Based on this information, the ratio of the annual total compensation of Mr. Burns to the median of the annual total compensation of all employees was estimated to be 177 to 1. |
CEO Pay Ratio Calculation
Our methodology may differ materially from the methodology used by other companies to prepare their CEO pay ratios, which may contribute to a lack of comparability between our pay ratio and the pay ratio reported by other companies, including those within our industry or peer group.
CEO Pay Ratio Calculation
| Zebra Technologies Corporation I 2024 Proxy Statement | 79 |
Pay Vs Performance
Pay Vs Performance
Pay Vs Performance
| | | | | | Value of Initial Fixed | | | | | | | | | | $100 Investment Based | | Other Performance | | | | CEO Pay | | Other NEO Pay | | On: | | Measures | | | | | | Average | | | | | | | | Summary | | Summary | | | | | | | | Compensation | | Compensation | Average | | Cumulative | | | | | Table Total | Compensation | Table Total | Compensation | Cumulative | Peer Group | Net Income | Net Sales | | | Compensation | Actually Paid(3) | Compensation | Actually Paid(3) | TSR(1) | TSR(2) | (in millions) | (in millions) | | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | 2023 CEO - Burns | 11,259,895 | 11,421,955 | 3,213,206 | 3,348,299 | 107.00 | 219.40 | 296 | 3,665 | | 2023 CEO - Gustafsson | 9,505,801 | 8,505,788 | 3,213,206 | 3,348,299 | 107.00 | 219.40 | 296 | 3,665 | | 2022 | 14,658,743 | (17,540,875) | 3,546,548 | (1,911,451) | 100.38 | 139.00 | 463 | 4,915 | | 2021 | 13,589,616 | 37,632,608 | 3,261,693 | 6,936,499 | 233.01 | 193.58 | 837 | 4,845 | | 2020 | 10,077,727 | 23,907,029 | 1,836,299 | 2,998,842 | 150.46 | 143.89 | 504 | 3,813 |
Pay Vs Performance
| (1) The Cumulative Total Stockholder Return (“TSR”) reflects the value of $100 invested in Zebra common stock on December 31, 2020, assuming the reinvestment of dividends. |
Pay Vs Performance
| (2) The Cumulative Peer Group TSR is market-cap weighted and reflects the TSR for S&P Information Technology Index, which is the peer group that Zebra uses for its industry comparators/index in its Form 10-K. |
Pay Vs Performance
| (3) To calculate Compensation Actually Paid (“CAP”), the following amounts were deducted from and added to Summary Compensation Table (“SCT”) total compensation: |
CEO SCT Total to CAP Reconciliation
| (3) Reflects the value of equity calculated in accordance with the SEC methodology for determining Compensation Actually Paid for each year shown. The equity component of Compensation Actually Paid for each fiscal year listed in the table is further detailed in the supplemental table below. |
Other NEO SCT Total to CAP Reconciliation
| (3) Reflects the value of equity calculated in accordance with the SEC methodology for determining Compensation Actually Paid for each year shown. The equity component of Compensation Actually Paid for each fiscal year listed in the table is further detailed in the supplemental table below. |
Proposal 3 Ratification of Appointment of Independent Auditors
| Robert J. Armstrong Chief Marketing Officer Age: 42 | Mr. Armstrong was appointed Chief Marketing Officer in March of 2023. Mr. Armstrong previously served as Zebra’s Senior Vice President of Integrated Marketing & Channels, where he was responsible for go-to-market strategy and downstream marketing execution for the full Zebra portfolio, inclusive of customer segment marketing, product marketing, channel marketing, digital marketing, media relations, brand strategy, channel development, pricing and analytics. He brings nearly 20 years of experience within the B2B technology industry and has held strategy, business development, and marketing responsibilities in all four regions — NA, LA, APAC & EMEA. Before his time at Zebra, he served in various marketing director positions at Motorola. Mr. Armstrong holds a B.S. in Electrical Engineering from the University of Notre Dame, and currently serves as a Board Member for FIRST Illinois Robotics, Bernie’s Book Bank and serves on the Forbes Communications Council. | | Michael Cho Chief Strategy Officer Age: 55 | Mr. Cho joined Zebra in 2010 and has served as Zebra’s Chief Strategy Officer since February 2013. Mr. Cho served as Vice President, Strategy from 2010 until 2011 and Vice President, Corporate Development from 2011 until 2013. From 2008 to 2010 he served as Vice President, Business Development, of the Healthcare division of Amcor Limited, a global packaging company. Prior to that, Mr. Cho served from 2007 to 2008 as Vice President, Business Development of CommScope Inc., a global communications solutions company. From 2005 to 2007, Mr. Cho served as Vice President, Business Development of the Antenna & Cable Products Group at Andrew Corporation, which he joined in 2004 as Director, Corporate Development & Strategy. From 1999 to 2004 Mr. Cho was a consultant with McKinsey & Company. Mr. Cho received an MBA from Harvard Business School and a B.S. in Finance from the University of Illinois at Urbana-Champaign. | | Tamara D. Froese Chief Supply Chain Officer Age: 45 | Ms. Froese was appointed Chief Supply Chain Officer in November of 2022. Tami joined Zebra in 2020. She is a leader in supply chain management practices with extensive experiences cross-functionally in Procurement, Operations, Manufacturing and Engineering during her 20-year career at General Motors. She believes in strong partnerships internally and with Zebra’s global supply base to accelerate the growth for Zebra and to build a resilient Supply Chain. Ms. Froese holds a B.A. in Supply Chain Management from Michigan State University and an MBA from Oakland University. To further her leadership journey, she also achieved her Six Sigma Black Belt certification and graduated from leadership development programs with Harvard University and University of Michigan. | | Richard E. Hudson Chief Revenue Officer Age: 56 | Mr. Hudson was named Chief Revenue Officer, Zebra Technologies in November 2023 following his role as Senior Vice President and General Manager for Europe, Middle East & Africa (EMEA) which he assumed in 2017. He has over 20 years of experience in the technology sector. As Chief Revenue Officer, Mr. Hudson is responsible for the sales and services of products and solutions globally. Prior to joining Zebra, he held various roles with increasing responsibility including Vice President, EMEA Channels and Solutions at Motorola. Mr. Hudson has built a strong track record as a trusted advisor to customers and partners in Zebra’s vibrant core as well as our high-growth adjacent and expansion markets. Mr. Hudson has a bachelor’s degree in mechanical engineering from Brunel University London. |
Proposal 3 Ratification of Appointment of Independent Auditors
| Cristen L. Kogl Chief Legal Officer, General Counsel & Corporate Secretary Age: 58 | Ms. Kogl joined Zebra in 2015 and currently serves as its Chief Legal Officer, General Counsel & Corporate Secretary. Ms. Kogl has served as Zebra’s top Legal Officer, through various titles, since September 2018. Prior to her current position, Ms. Kogl held a variety of progressive positions including Vice President, Corporate Counsel and Vice President, Assistant General Counsel and Assistant Corporate Secretary. Before joining Zebra, Ms. Kogl was the Executive Vice President and General Counsel at National Express LLC — North American division of National Express Plc. Ms. Kogl held Vice President and Corporate Secretary positions at The ServiceMaster Company where she was also Deputy General Counsel and W.W. Grainger, Inc. where she was also Chief Compliance Officer. Earlier in her career, at Spyglass, Inc., she held the roles of Vice President and General Counsel. Ms. Kogl currently serves on the Board of Directors of Crane NXT, Co. and the U.S. Chamber of Commerce, she is also a member of the Board of Trustees at Lake Forest College, and a member of the Leadership Council on Legal Diversity. Ms. Kogl received her Juris Doctor degree from the University of Wisconsin-Madison Law School and her B.A. in Political Science from Lake Forest College. | | Colleen M. O’Sullivan SVP Chief Accounting Officer Age: 56 | Ms. O’Sullivan joined Zebra in 2016 as Chief Accounting Officer. Prior to joining Zebra, Ms. O’Sullivan held a variety of positions including Vice President and Controller, Senior Vice President, Controller and Chief Accounting Officer, and most recently as Senior Vice President, Chief Financial Officer at Career Education Corporation. Previously, she held various finance and accounting positions at Hewitt Associates and Sears Holdings Corporation. Earlier in her career, she served as an Audit Partner at Arthur Andersen. Ms. O’Sullivan received a B.S. from the University of Illinois and is a certified public accountant. | | Jeffrey F. Schmitz Chief People Officer Age: 60 | Mr. Schmitz was named Chief People Officer, Zebra Technologies in March 2023. He has more than 30 years of experience in general management, marketing and human resources, and he joined Zebra in 2016. In his previous role as Chief Marketing Officer, Mr. Schmitz launched Zebra’s award-winning PartnerConnect program and led a major brand refresh. In 2020, Mr. Schmitz also took on the role of Chief Human Resources Officer. As CMO/CHRO, he focused on attracting, developing, and retaining top talent and creating opportunities for growth and development within Zebra’s inclusive culture and diverse workforce, and he continues to focus on these areas today as Chief People Officer. Prior to joining Zebra, Mr. Schmitz served in growing levels of responsibility for Spirent Communications, including General Manager of Networks & Applications, Chief Marketing Officer and, most recently, Executive Vice President. Prior to Spirent, Mr. Schmitz served as Senior Vice President of Sales and Marketing at Rivulet Communications, a medical imaging company, Vice President of Marketing & Product Management at Visual Networks, an enterprise software company, and Tellabs, where he held various executive positions. Mr. Schmitz currently serves on the Forbes HR Council. He holds a B.S. in electrical engineering from Marquette University and an M.S. in computer science from the Illinois Institute of Technology. |
Proposal 3 Ratification of Appointment of Independent Auditors
| Joseph R. White Chief Product & Solutions Officer Age: 54 | Mr. White has more than 30 years of product development experience leading adoption of new enterprise technologies over his career. He became the Chief Product & Solutions Officer in March 2023 and oversees the strategy, investments and development of Zebra’s expansive portfolio of products and solutions. Prior to joining Zebra, Mr. White served in various leadership roles at Motorola, Motorola Solutions, CAIS Internet and Digex and has a degree from the University of Maryland. Mr. White has received numerous awards recognizing his contributions to the industry. In 2018, Mr. White received the Employer Support of the Guard and Reserve Patriot Award, from the Office of the Secretary of Defense, for his support of Zebra employees who serve in the Nation’s Armed Forces. In 2019 Mr. White was recognized by AIM Global as the recipient of the Richard R Dilling award which is presented to executives, scientists, and engineers in recognition of outstanding contributions that have furthered the growth of the industry. | | Nathan A. Winters Chief Financial Officer Age: 45 | Mr. Winters was appointed Chief Financial Officer of Zebra in January 2021. Mr. Winters served as Zebra’s Acting Chief Financial Officer from August 2020 through January 2021. Mr. Winters joined Zebra in 2018 as Vice President of Corporate Financial Planning & Analysis and Business Operations. Prior to Zebra, Mr. Winters served as the Chief Financial Officer, Global Supply Chain at GE Healthcare from 2016 to 2018. In addition to that position at GE Healthcare, he held the position of Chief Financial Officer, Life Science BioProcess and previously held various finance positions of growing levels of responsibility at GE Healthcare and General Electric. Mr. Winters serves on the board of directors for the Junior Achievement of Chicago and accounting advisory board for the University of Kentucky Gatton College of Business and Economics. Mr. Winters holds a B.A. in finance and economics from the University of Kentucky. |

DEF 14A of Zebra Technologies Corp

Virtual Meeting Website: www.virtualshareholdermeeting.com/ZBRA2024

Election of Directors

Election of Directors

Election of Directors

Election of Directors

Election of Directors

Compensation Program Highlights

Oversight of Risks Arising Out of Zebra’s Compensation Policies and Practices

Stockholder Engagement

Climate & Resource Conservation

Biographical Information of Zebra’s Director Nominees and Continuing Directors

Nominees for Director

Nominees for Director

Nominees for Director

Nominees for Director

Nominees for Director

Nominees for Director

Nominees for Director

Continuing Directors

Continuing Directors

Continuing Directors

Continuing Directors

Continuing Directors

Continuing Directors

Continuing Directors

Continuing Directors

Continuing Directors

Continuing Directors

Continuing Directors

Continuing Directors

Continuing Directors

Continuing Directors

Continuing Directors

Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Director Compensation

2023 Non-Employee Director Compensation

2023 Non-Employee Director Compensation

2023 Non-Employee Director Compensation

2023 Non-Employee Director Compensation

2023 Non-Employee Director Compensation

2023 Non-Employee Director Compensation

Executive Summary

2023 Compensation Highlights

2023 Compensation Highlights

Compensation Governance Practices

Compensation Governance Practices

Compensation Governance Practices

Role of the Independent Compensation Consultant

Role of the Independent Compensation Consultant

Role of the Independent Compensation Consultant

Role of the Independent Compensation Consultant

Role of the Independent Compensation Consultant

Role of the Independent Compensation Consultant

Role of the Independent Compensation Consultant

Compensation Components

Compensation Components

Mr. Burns

Mr. Burns

Mr. Burns

Mr. Burns

2023 Annual Cash Incentive Awards

Target Awards

Target Awards

Annual Cash Incentive Plan Performance Metrics

Annual Cash Incentive Plan Performance Metrics

Annual Cash Incentive Plan Performance Metrics

Annual Cash Incentive Plan Performance Metrics

Annual Cash Incentive Plan Performance Metrics

Annual Cash Incentive Plan Performance Metrics

Annual Cash Incentive Plan Performance Metrics

Annual Cash Incentive Plan Performance Metrics

Annual Cash Incentive Plan Performance Metrics

Annual Cash Incentive Plan Performance Metrics

Annual Cash Incentive Plan Performance Metrics

2023 Financial Performance Results and Payout Percentage