Universal Display Corporation 2023 Proxy Statement 10
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What We Do: |
What We Do Not Do: |
Human Capital Committee Independence and Experience: Our Human Capital Committee is composed solely of independent directors who have extensive experience. |
No Re-Pricing of Equity Awards: Our Equity Compensation Plan prohibits repricing of equity awards without shareholder approval. |
Independent Compensation Advisor: Our Human Capital Committee engages its own independent advisor. |
Limited Perquisites: Most of the perquisites provided to our Named Executive Officers are the same as those provided to all of our employees. |
Stock Ownership Guidelines: Our Board of Directors has adopted the following stock ownership guidelines for our Named Executive Officers: Under the guidelines, each Named Executive Officer of the Company is expected to own a number of shares of the Company’s common stock with a market value equal to the amount applicable to their position for as long as he or she remains an executive. Applicable amounts are 6x base salary for our Chief Executive Officer (CEO) or President, 4x base salary for our Chief Financial Officer (CFO) and Executive Vice Presidents, 3x base salary for our Senior Vice Presidents and 2x base salary for our other executives. All of our Named Executive Officers are in compliance with the stock ownership guidelines. Guidelines for our directors have been in place since 2011, requiring directors to own shares of our common stock equal in value to 10x their annual cash compensation for Board service, excluding additional compensation for committee service. Each of the directors is required to comply with such guidelines within five years of joining the Board. |
No Stock Options Granted with an Exercise Price Less than Fair Market Value. All stock options have been granted with an exercise price at the closing price on the date of the grant. |
Require Double-Trigger for Change in Control Agreements: Our change in control agreements contain a “double trigger” requirement, so that benefits are paid following a change in control only if the employee also experiences a qualifying termination of employment. |
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Shareholder Outreach and Say on Pay: In early 2022, for the sixth year in a row, we conducted an outreach program in which we contacted shareholders representing a majority of our outstanding shares of our common stock to invite them to meetings focused on our executive compensation program. The Chair of our Human Capital Committee attended the meetings with those shareholders who accepted meetings and solicited their views with respect to further changes to the Company’s executive compensation program. Our Human Capital Committee received valuable feedback from these engagements and will continue to take these views into consideration as it evaluates the Company’s executive compensation structure in the future. We hold our “say on pay” advisory vote annually. |
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How We Determine Named Executive Officer Compensation
The process of establishing compensation for our Named Executive Officers for 2022 began with a review of the compensation paid to these executive officers in recent years and consideration was given to the shareholder feedback noted above received after the 2021 Say on Pay Advisory Vote. Although we have historically used prior compensation as a starting point because we believe, as a general matter, that executive compensation should remain relatively consistent from year-to-year while providing appropriate incentives for achieving desired results, the Human Capital Committee, with the assistance of Korn Ferry, modified the executive compensation programs as noted above to improve the alignment of executive compensation with Company financial objectives.
In setting 2022 performance target goals, the Human Capital Committee used prior compensation as a baseline and considered the extent to which we achieved our business goals for 2021 as well as the projected 2022 needs and opportunities of the Company. As discussed below under “Short-term Incentive Compensation,” the Human Capital Committee (with the assistance of Korn Ferry) established individual targets for 2022 relating to the short-term incentive program, in accordance with the Universal Display Corporation Annual Incentive Plan (“Annual Incentive Plan”). Under the approved program, each of our Named Executive Officers was eligible to receive cash incentive awards (which we sometimes refer to as bonuses), whereby targets were set as an individually-defined percentage of their base salary with actual target payouts further modified, based on the achievement of pre-established performance goals at threshold, target and maximum levels.
With respect to long-term incentive compensation for 2022, as explained in more detail below, each of our Named Executive Officers received a target long-term incentive award in an amount that is based on their respective base salaries. One-third of each target award granted in 2022 was in the form of time-vesting restricted stock units (“RSUs”) that vest over three years from the date of grant on a pro-rata basis with one-third vesting in each of 2023, 2024 and 2025. The remaining portion of each long-term incentive award for 2022 was in the form of performance stock units (“PSUs”) that will vest in 2025 based on the achievement of pre-established relative performance goals over a three-year performance period from January 2022 through December 2024.
Universal Display Corporation 2023 Proxy Statement 11
Finally, the Human Capital Committee considered other factors that may be relevant to compensation decisions with respect to our Named Executive Officers, including the state of the general economy.
Executive management makes recommendations to our Human Capital Committee regarding all aspects of compensation for our Named Executive Officers. However, final decisions on any major element of compensation, as well as total compensation for our Named Executive Officers, are made by our Human Capital Committee. Our Chief Executive Officer, former Chief Financial Officer and late Founder did not participate in Human Capital Committee or Board deliberations regarding their respective compensation.
In making compensation decisions, the Human Capital Committee considered whether the proposed compensation to our Named Executive Officers is within the range of compensation generally known to be paid to executives at other companies. Other than in any data provided by Korn Ferry, information on the compensation paid to executives at other companies is not tabulated or summarized, and the Human Capital Committee did not engage in any formal form of compensation benchmarking.
In determining executive compensation, the Human Capital Committee considered the current value to our Named Executive Officers of compensation paid or issued to them for prior years. However, the Human Capital Committee has not focused on gains or losses from prior grants or other awards because it believes that those gains or losses are not particularly significant in relation to overall compensation, and that gains or losses from prior awards do not have a substantial effect on the future performance of our Named Executive Officers.
From time to time, we utilize external consultants to assist in determining executive compensation, as we did in 2022 when Korn Ferry assisted the Human Capital Committee in establishing program designs relating to the 2022 short-term and long-term incentive programs.
Shareholder Outreach
Since 2017, we have conducted an annual shareholder outreach program to provide an opportunity for shareholders to have direct discussions with the Company regarding executive compensation. Each year, we have invited shareholders holding at least a majority of the outstanding shares to participate in meetings regarding compensation. Ms. Gemmill, Chair of the Human Capital Committee, attends each of these individual shareholder meetings. We have received valuable feedback in these direct shareholder conversations and have taken views expressed by these shareholders into consideration in devising our executive compensation programs and Company policies.
Elements of Compensation
For 2022, total compensation awarded to our Named Executive Officers consisted of the following elements:
•Short-term incentive compensation in the form of bonus awards under the Annual Incentive Plan;
•Long-term incentive equity compensation awards;
•Supplemental retirement benefits; and
•Perquisites and other benefits.
The above elements, which are more particularly set forth below, provide our Named Executive Officers both cash and non-cash, or equity, compensation. We believe that each of these elements is an important and necessary component of executive compensation.
Base salaries
We believe that there is a general expectation by our Named Executive Officers that their base salaries will remain relatively consistent year-to-year, subject to limited merit-based adjustments. In addition, as we and our industry continue to grow, we believe that there is an expectation among our executive officers that we provide competitive base salaries relative to our industry and geographic scope.
In 2022, the base salaries of our Named Executive Officers were increased by 3.5% over the prior year, the same as all employees. These annual increases in 2022 were intended to offset increases in the cost of living, although no actual survey of cost-of-living indices was conducted. As in prior years, salaries were increased on the annual employment anniversary dates or traditional salary adjustment dates for these individuals.
Consistent with previous years, all adjustments to the salaries of our Named Executive Officers for 2022 were recommended by Company executive management and approved by our Human Capital Committee.
Universal Display Corporation 2023 Proxy Statement 12
As in the past, Mr. Abramson and Mr. Rosenblatt each received the same base salary in 2022. This reflects our historical practice of treating these two individuals equally based on their longstanding dedication and commitment to the Company, their shared responsibility for overall management of the Company, and the comparable value that each of them has provided to our business success.
Short-term Incentive Compensation
Annual Incentive Plan
The Company’s short-term incentive program for Named Executive Officers consists of the Annual Incentive Plan. All senior executives of the Company and its subsidiaries are eligible to participate in the Annual Incentive Plan to earn a bonus based on the achievement of pre-established performance objectives. The Human Capital Committee designates which senior executives will participate in the Annual Incentive Plan for each fiscal year.
Bonus awards under the Annual Incentive Plan are awarded to eligible participants on an annual basis if the performance goals established by the Human Capital Committee are met. At the beginning of each fiscal year, the Human Capital Committee establishes each participant’s target and maximum bonus award, the performance goals applicable to the bonus award, and such other conditions as the Human Capital Committee deems appropriate. In 2022, the performance goals provided for differing amounts to be paid (e.g., threshold, target and maximum amounts) based on differing levels of performance for each performance goal. The performance goals may relate to the financial performance of the Company and its subsidiaries or one or more business units, and, where appropriate, may relate to a participant’s individual performance.
At the end of the fiscal year, the Human Capital Committee, with the assistance of Korn Ferry, determines the extent to which the performance goals and other conditions of the bonus awards have been met and the amount, if any, to be paid to each participant. A participant will not earn a bonus for any portion of the performance goals for a fiscal year under the Annual Incentive Plan if the level of achievement of the performance goals is below the threshold requirement to earn an award, as established by the Human Capital Committee.
Any bonus awards that are earned for a fiscal year are paid shortly after the end of the fiscal year, after the Human Capital Committee certifies attainment of the performance goals and confirms that the participant is otherwise eligible for such payment under the terms of the applicable award program. Bonus awards under the Annual Incentive Plan are payable in cash, shares of our common stock or stock units under the Universal Display Corporation Equity Compensation Plan, or such other form as the Human Capital Committee determines in its discretion.
For 2022, the Annual Incentive Plan utilized revenue growth (based on percentage growth over the prior year) as the sole performance factor for awards under the Annual Incentive Plan. In future years, performance goals may be based on one or more of the following criteria, either in absolute terms or in comparison to publicly available industry standards or indices: stock price, return on equity, assets under management, EBITDA, earnings per share, price-earnings multiples, net income, operating income, revenues, working capital, accounts receivable, productivity, margin, net capital employed, return on assets, shareholder return, return on capital employed, increase in assets, operating expense, unit volume, sales, internal sales growth, cash flow, market share, relative performance to a comparison group designated by the Human Capital Committee, or strategic business criteria consisting of one or more objectives based on meeting specified revenue goals, market penetration goals, customer growth, geographic business expansion goals, cost targets or goals relating to acquisitions or divestitures.
Awards under the Annual Incentive Plan Paid for 2022 Performance
Each participant’s target and maximum incentive award and the performance goals applicable to the incentive award were based 80% upon Company financial performance factors and 20% upon KPIs. The Company financial performance factor was based on the achievement of specific revenue targets. The target amount for the Company financial performance was set at revenue achievement of $600 million. A revenue threshold level of $588 million was also established, at which 50% of the target payout would be earned. Annual growth below such threshold would generate no payouts under the financial performance factor. A maximum award of 200% of the target payout under the applicable performance factor would be earned in the event revenue exceeded $625 million.
The 20% KPIs were based upon team and individual KPIs using a scorecard. The KPIs were designed to measure the success of each individual Named Executive Officer in the performance of their job functions. The KPIs were intended to measure the performance of the portion of the organization for which the Named Executive Officer had responsibility, as well as the contribution of that portion of the organization to the overall performance of the Company. The KPIs also were intended to define strategic objectives that prioritized critical short-term and long-term actions for the Company to deliver shareholder value.
For example, with respect to our Chief Executive Officer and certain other Named Executive Officers, KPIs included the following:
•Serve our Customers: Provide exceptional service and deliver state of the art technology solutions to our customers;
•Operate with Discipline: Implement industry leading processes to ensure that we operate as a productive, safe and compliant organization, and maximize multinational operational efficiency;
Universal Display Corporation 2023 Proxy Statement 13
•Grow the Enterprise: Grow the organization through organic internal development of innovative new products and by acquiring interests in new promising and complementary businesses;
•Develop our People: Retain, recruit, hire and develop talent that meets and anticipates the changing needs of our business, while fostering an inclusive and diverse workplace; and
•Assure Responsible and Sustainable Operations: Implement and ensure operations that are designed to deliver environmentally sustainable and socially responsible solutions, and which help our customers deliver more energy efficient and environmentally responsible product solutions.
As provided for in more detail below, for 2022 the Named Executive Officers exceeded both their target financial performance objectives and KPI goals and received approximately 173% of their target payouts per the performance scorecard.
The Named Executive Officers’ initial 2022 targets under the Annual Incentive Plan are set forth below:
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Name |
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Base Salary ($) |
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Annual Incentive Target (% of Base) |
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Annual Incentive Target ($) |
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Steven V. Abramson President, Chief Executive Officer and Director |
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858,219 |
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125 |
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1,072,774 |
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Sidney D. Rosenblatt Former Executive Vice President and Chief Financial Officer (Retired) |
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858,219 |
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125 |
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1,072,774 |
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Julia J. Brown, Ph.D. Executive Vice President and Chief Technical Officer |
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663,081 |
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125 |
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828,851 |
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Mauro Premutico Senior Vice President, Planning and General Manager, Patents and Licensing, and Secretary |
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561,328 |
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125 |
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701,660 |
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Janice K. Mahon Senior Vice President, Technology Commercialization and General Manager, Commercial Sales Business |
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456,930 |
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125 |
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571,163 |
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Brian Millard (1) Vice President, Chief Financial Officer and Treasurer |
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425,000 |
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27 |
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113,000 |
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(1) The 2022 annual incentive for Mr. Millard was prorated given his September 6, 2022 hire date.
The Company exceeded the target financial performance metric noted above by achieving $617 million in revenue in 2022, and each of the Named Executive Officers received maximum ratings in their team/individual performance factors (which in large part was reflected in the Company’s strong financial performance), resulting in each of these executives achieving approximately 173% of their respective target bonus award under the Annual Incentive Plan. The awards for 2022 performance under the Annual Incentive Plan approved by our Human Capital Committee on February 21, 2023 and paid to such executives in March 2023 were: Mr. Abramson – $1,857,838; Mr. Rosenblatt – $1,857,838; Dr. Brown – $1,435,412; Mr. Premutico – $1,215,140; Ms. Mahon - $989,143; and Mr. Millard - $195,694. These cash payments were subject to customary tax withholding consistent with applicable requirements.
Given our historical practice of compensating these two individuals equally for the reasons indicated earlier under “Base Salaries”, Mr. Abramson and Mr. Rosenblatt (who retired from his executive position effective as of December 30, 2022) received the same incentive awards for 2022 year-end performance. No additional non-equity performance-based incentive awards were made to the Named Executive Officers for 2022 performance.
Long-term incentive equity compensation awards
2022 Equity Compensation Awards
We use long-term incentive equity compensation awards to link the compensation paid to our Named Executive Officers with our future performance and the future performance of our common stock. We believe that this helps align the interests of our Named Executive Officers with those of our shareholders. We also use these awards to encourage our executive officers to remain with the Company through the applicable vesting period.
In 2022, as in prior years, the Company utilized a long-term incentive equity compensation approach in which equity grants are made annually, consisting of RSUs that vest ratably over a three-year period along with PSUs that vest at the end of a three-year performance period based upon specific performance criteria. Korn Ferry has assisted our Human Capital Committee since 2013 in developing this long-term executive incentive compensation structure, and each year since that time, our Human Capital Committee, with the assistance of Korn Ferry, determines eligibility, target award levels and performance measures.
With respect to long-term incentive awards granted in 2022, our Human Capital Committee and full Board of Directors approved, on an effective date of February 16, 2022, target long-term incentive awards for our Named Executive Officers, with one-third of the total target shares of each award in the form of time-vesting RSUs and the other two-thirds in the form of target PSUs vesting upon the achievement of certain performance criteria over identified performance periods. In prior years, time-vesting RSUs and
Universal Display Corporation 2023 Proxy Statement 14
performance-based PSUs had constituted equal 50% portions of the long-term incentive awards. As noted above, the adjusted ratio reflected the decision by our Human Capital Committee and Board of Directors to reduce the target value of the time-based component of the long-term incentive awards. All such equity awards were issued under the Universal Display Corporation Equity Compensation Plan and are subject to the provisions of such plan as well as to the terms of the applicable RSU and PSU grant letter agreements.
The time-vesting RSU portion of the award granted on February 16, 2022 to the Named Executive Officers was in the following amounts: Mr. Abramson – 13,482; Mr. Rosenblatt – 13,482; Dr. Brown – 9,463; Mr. Premutico – 7,281; and Ms. Mahon – 5,865. Mr. Millard did not receive RSU grants at this time as he was not employed by the Company until September 2022. As with other compensation, Mr. Abramson and Mr. Rosenblatt received the same long-term incentive equity compensation awards. Each of the foregoing awards vested or will vest one-third each year on February 16, 2023, 2024 and 2025, subject to the continued employment of each Named Executive Officer on the applicable vesting date.
The performance-based PSU portion of the award granted on February 16, 2022 to the Named Executive Officers was, as follows: Mr. Abramson – 26,964; Mr. Rosenblatt – 26,964; Dr. Brown – 18,927; Mr. Premutico – 14,563; and Ms. Mahon – 11,731. Mr. Millard did not receive PSU grants in 2022. These PSU awards represent target awards and will vest based on the achievement of pre-established relative performance goals from January 2022 through December 2024. Half of the PSUs awarded in February 2022 will vest based on the achievement of a specified EBITDA performance target for the 2024 fiscal year, with one quarter vesting based on the achievement of total shareholder return relative to total shareholder return of the companies in the Nasdaq Electronics Components Index for the three year period from January 1, 2022 to December 31, 2024, and the other quarter vesting based on the achievement of cash from operations performance targets in 2024. The PSU target awards are subject to a sliding scale multiplier ranging from 0x to 3x based upon the percentile achievement with respect to each relative target. In addition, the PSUs are subject to the continued employment of each Named Executive Officer on the applicable vesting date.
Supplemental retirement benefits
In 2010, our Human Capital Committee and our Board of Directors approved and adopted the Universal Display Corporation Supplemental Executive Retirement Plan, which was amended in 2015 (as amended, the “SERP”). The SERP is a nonqualified deferred compensation plan under the Internal Revenue Code (the “IRC”) and is unfunded. Participants include management or highly compensated employees of the Company, including the Named Executive Officers, who are selected by the Human Capital Committee to receive benefits under the SERP. The Human Capital Committee retained Korn Ferry to assist it in structuring the SERP in 2010 and amending the SERP in 2015.
The SERP was adopted to provide key employees with supplemental retirement benefits and to encourage their continued employment with the Company. Under the SERP, if an executive officer participant resigns or is terminated without cause at or after age 65 and with at least 20 years of continuous service with the Company, he or she will be eligible to receive a SERP benefit, payable in equal amounts over 10 years, based on a present value calculation of the benefit amount for the participant’s actuarial remaining life expectancy, and a percentage of the participant’s combined annual base salary and average annual bonus for the most recent three fiscal years ending prior to the participant’s date of termination of employment. The percentage is 50%, 25% or 15%, depending on the participant’s benefit class. Each of Mr. Abramson, Dr. Brown, Mr. Premutico and Ms. Mahon has been designated as a participant in the SERP in the 50% benefit class. Mr. Millard does not participate in the SERP and the Company does not currently plan on adding additional participants to the SERP in the future. Mr. Rosenblatt retired and began receiving his SERP benefit in 2023.
If a participant resigns after age 65 and with at least 15 years of service, he or she will be eligible to receive a prorated SERP benefit. If a participant is terminated without cause or on account of a disability after at least 15 years of service, he or she will be eligible to receive a prorated SERP benefit regardless of age. The prorated benefit in either case will be based on the participant’s number of years of service (up to 20), divided by 20. In the event a participant is terminated for cause, his or her SERP benefit and any future benefit payments are subject to immediate forfeiture. The ages of the Named Executive Officers designated as participants in the SERP are as follows: Mr. Abramson – 71, Dr. Brown – 62, Mr. Premutico – 57 and Ms. Mahon – 65.
In the event of a change in control of the Company, each participant in the SERP will become immediately vested in his or her benefit under the SERP. Unless the participant’s benefit has already fully vested, if the participant has less than 20 years of service at the time of the change in control, he or she will receive a prorated benefit based on his or her number of years of service (up to 20), divided by 20. If the change in control qualifies as a “change in control event” for purposes of Section 409A of the IRC, then each participant (including former employees who are entitled to SERP benefits) will receive a lump sum cash payment equal to the present value of the benefit immediately upon the change in control.
As an individual with special expertise and institutional knowledge that the Company considers to be highly valuable to the Company’s continued success, Mr. Abramson is designated as a special participant under the SERP. Having reached the age of 65 and with 20 years of continuous service, upon resignation or termination without cause or on account of disability, he will be eligible to receive a SERP benefit. The SERP benefit for Mr. Abramson, as a special participant, is additionally based on the actuarial remaining life expectancy of his surviving spouse, if any, along with his own life. The accumulated benefit under the SERP for Mr. Abramson may change subject to a change in his marital status. Except as described above, Mr. Abramson is subject to the same treatment as other participants in the SERP.
Universal Display Corporation 2023 Proxy Statement 15
Mr. Rosenblatt retired on December 30, 2022, as a special participant under the SERP with more than 20 years of continuous service, and began receiving a full SERP benefit as of January 1, 2023, based on 50% of his annual base salary and 50% of his average annual bonus for the most recent three fiscal years leading up to the date of his retirement, which benefit, to be paid out over 10 years, also is based on the actuarial remaining life expectancy of his life and the life of his surviving spouse.
Special event awards
From time to time, we issue cash and non-cash awards to our employees, including our Named Executive Officers, relating to the occurrence of special events. For example, we have historically awarded a small amount of cash or equity compensation to our employees in connection with the filing and issuance of new patents on which they are named inventors. From time to time, we also have issued cash awards to our employees in connection with their having achieved special recognition in their field or in the industry. We believe these awards are an important component of compensation intended to recognize our employees for special individual accomplishments that are likely to benefit us and our business.
Our Human Capital Committee did not award any special event awards, cash or non-cash, to our Named Executive Officers for 2022 performance.
Perquisites and other benefits
We provide benefits to all of our employees, including our Named Executive Officers. These include paid time off, paid sick time, Company-sponsored life, short-term and long-term disability insurance, individual and family medical and dental insurance, 401(k) plan contributions and other similar benefits. We believe these benefits are an important factor in helping us maintain good relations with our employees and in creating a positive work environment.
For some of these employee benefits, the actual amount provided depends on the employee’s salary, such that our higher-salaried employees, including our Named Executive Officers, receive total benefits that are greater than those of other employees. For example, beginning on January 1, 2017, rather than matching a certain percentage of employee contributions under our 401(k) plan, we started making nonelective employer contributions of 3% of compensation for all employees (up to the permissible limit), resulting in the maximum permissible contribution of $9,150 for all our Named Executive Officers in 2022, except for Mr. Millard who was not eligible to participate in our 401(k) plan until January 1, 2023.
We also made life and disability insurance premium payments on behalf of our Named Executive Officers in 2022. Again, the actual amount of these payments depends in part on the employee’s age and salary, such that payments made on behalf of our older or higher-salaried employees, which includes our Named Executive Officers, will be greater than those made on behalf of other employees. These life insurance premium payments were also higher for our executive officers because they are entitled to a benefit equal to two times their annual base salary, as compared to our other employees who are entitled to a benefit equal to their annual base salary. In addition, we made premium payments for supplemental disability and excess life insurance coverage for Mr. Abramson and Mr. Rosenblatt. However, the dollar value of all of these payments was relatively small compared to the total compensation paid to our Named Executive Officers for the year, and in any event we consider these type of benefits to be standard components of executive compensation at most companies.
In 2022, as in prior years, we provided an automobile allowance of $500 per month to each of Mr. Abramson, Mr. Rosenblatt, Dr. Brown, Mr. Premutico, Ms. Mahon and, after his hire, Mr. Millard, and reimbursed each of them for reasonable expenses associated with the automobiles they used to commute to our offices in Ewing, New Jersey, such as expenses for automobile repairs and insurance. We do not consider this additional benefit to be a substantial component of executive compensation.
At the time of his hire in September 2022, Mr. Millard was paid a “make-whole” cash bonus of $250,000 and provided with a grant of Company restricted stock to compensate him for the value of any unpaid bonus and unvested equity forfeited from his prior employment. The "make-whole" cash bonus was in addition to the award that Mr. Millard received under the Company's Annual Incentive Plan and described above in "Awards under the Annual Incentive Plan Paid for 2022 Performance". The value of the restricted stock, based on 8,301 shares granted on September 29, 2022, was $800,050. The restricted stock will vest over two years, with the first half vesting upon the anniversary of the date of grant (September 29, 2023) and the second half vesting upon the second anniversary of Mr. Millard’s date of hire (September 6, 2024), provided that Mr. Millard is an employee of the Company at the respective date. Mr. Millard also received a relocation expense reimbursement of $12,040 and a tax gross-up on relocation benefits equal to $5,368.
Pay Ratio Disclosure
In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and applicable SEC rules, we are providing the information below about the relationship of our Chief Executive Officer’s compensation to our median employee’s compensation.
The total annual compensation for 2022 was $146,429 for our median employee and $9,779,152 for our Chief Executive Officer. The resulting ratio of our Chief Executive Officer’s pay to the pay of our median employee for 2022 is 67 to 1.
To identify our median employee, we examined the 2020 compensation for all individuals who were employed by us on December 31, 2020, excluding our Chief Executive Officer. For the purpose of identifying the median employee, we included base pay, equity
Universal Display Corporation 2023 Proxy Statement 16
grants, bonus and other non-equity payments given in the year in our calculation of 2020 compensation. We included all world-wide employees, whether employed on a full-time, part-time or seasonal basis. We annualized the compensation for full-time employees who were not employed by us for all of 2020. All non-U.S. employees’ pay was converted into U.S. Dollars using an exchange rate based on our determination date of December 31, 2020.
After identifying our median employee (who is located in the U.S.), we calculated the median employee’s 2022 annual total compensation using the same methodology we used to determine our Named Executive Officers’ total compensation for the Summary Compensation Table in this proxy statement.
Pay-Versus-Performance
In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO Named Executive Officers, or NEOs, and Company performance for the fiscal years listed below. The Human Capital Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.
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Year |
Summary Compensation Table Total for PEO¹ ($) |
Compensation Actually Paid to PEO ¹˒²˒³ ($) |
Average Summary Compensation Table Total for Non-PEO NEOs1 ($) |
Average Compensation Actually Paid to Non-PEO NEOs1,2,3 ($) |
Value of Initial Fixed $100 Investment based on:4 |
Net Income ($ Millions) |
Revenue⁵ ($ Millions) |
TSR ($) |
Peer Group TSR ($) |
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
(i) |
2022 |
9,779,152 |
2,541,697 |
5,664,249 |
803,453 |
53.38 |
140.35 |
210 |
617 |
2021 |
10,531,257 |
2,330,331 |
7,210,927 |
2,027,173 |
80.71 |
216.22 |
184 |
554 |
2020 |
18,246,271 |
10,534,329 |
11,355,265 |
8,225,948 |
111.93 |
142.69 |
133 |
429 |
(1) Steven V. Abramson was our PEO for each year presented. The individuals constituting the Non-PEO NEOs for each year presented are listed below.
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2020 |
2021 |
2022 |
Sidney D. Rosenblatt |
Sidney D. Rosenblatt |
Sidney D. Rosenblatt |
Julia J. Brown, Ph.D. |
Julia J. Brown, Ph.D. |
Julia J. Brown, Ph.D. |
Mauro Premutico |
Mauro Premutico |
Mauro Premutico |
Janice K. Mahon |
Janice K. Mahon |
Janice K. Mahon |
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Brian Millard |
(2) The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below.
(3) Compensation Actually Paid reflects the deductions and additions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Deduction of Stock Awards column are the totals from the Stock Awards column set forth in the Summary Compensation Table. Amounts in the Deduction of Change in Pension Value column reflect the amounts attributable to the Change in Pension Value reported in the Summary Compensation Table. Amounts in the Addition of Pension Service Cost column are based on the service cost for services rendered during the listed year.
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Year |
Summary Compensation Table Total for PEO ($) |
Deduction of Stock Awards for PEO ($) |
Addition of Pension Service Cost for PEO ($) |
Deduction of Change in Pension Value for PEO ($) |
Addition of Equity Values for PEO ($) |
Compensation Actually Paid to PEO ($) |
2022 |
9,779,152 |
(7,033,223) |
392,538 |
0 |
(596,770) |
2,541,697 |
2021 |
10,531,257 |
(8,078,938) |
392,538 |
0 |
(514,526) |
2,330,331 |
2020 |
18,246,271 |
(8,305,261) |
392,538 |
(8,230,829) |
8,431,610 |
10,534,329 |
Universal Display Corporation 2023 Proxy Statement 17
|
|
|
|
|
|
|
Year |
Average Summary Compensation Table Total for Non-PEO NEOs ($) |
Average Deduction of Stock Awards for Non-PEO NEOs ($) |
Average Addition of Pension Service Cost for Non-PEO NEOs ($) |
Average Deduction of Change in Pension Value for Non-PEO NEOs ($) |
Average Addition of Equity Values for Non-PEO NEOs ($) |
Average Compensation Actually Paid to Non-PEO NEOs ($) |
2022 |
5,664,249 |
(3,925,700) |
372,762 |
0 |
(1,307,858) |
803,453 |
2021 |
7,210,927 |
(5,406,463) |
559,890 |
0 |
(337,179) |
2,027,175 |
2020 |
11,355,265 |
(5,558,150) |
409,642 |
(4,607,397) |
6,626,589 |
8,225,949 |
The amounts in the Addition of Equity Values in the tables above are derived from the amounts set forth in the following tables:
|
|
|
|
|
|
|
|
Year |
Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for PEO ($) |
Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for PEO ($) |
Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for PEO ($) |
Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for PEO ($) |
Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for PEO ($) |
Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for PEO ($) |
Total - Inclusion of Equity Values for PEO ($) |
2022 |
4,939,023 |
(5,276,908) |
0 |
(258,885) |
0 |
0 |
(596,770) |
2021 |
6,090,071 |
(5,512,247) |
0 |
(1,092,350) |
0 |
0 |
(514,526) |
2020 |
11,476,842 |
862,377 |
0 |
(3,907,609) |
0 |
0 |
8,431,610 |
|
|
|
|
|
|
|
|
Year |
Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) |
Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) |
Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) |
Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) |
Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($) |
Average Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Non-PEO NEOs ($) |
Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) |
2022 |
1,976,072 |
(2,360,462) |
0 |
(117,807) |
(805,661) |
0 |
(1,307,858) |
2021 |
4,075,520 |
(3,664,828) |
0 |
(747,871) |
0 |
0 |
(337,179) |
2020 |
7,680,660 |
742,581 |
0 |
(1,796,652) |
0 |
0 |
6,626,589 |
(4) The Peer Group TSR set forth in this table utilizes the Nasdaq Electronic Components Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2022. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the Nasdaq Electronic Components Index, respectively. Historical stock performance is not necessarily indicative of future stock performance.
(5) We determined Revenue to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2022. This performance measure may not have been the most important financial performance measure for years 2021 and 2020 and we may determine a different financial performance measure to be the most important financial performance measure in future years.
Universal Display Corporation 2023 Proxy Statement 18
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”)
The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and the Company’s cumulative TSR over the three most recently completed fiscal years.
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income
The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Net Income during the three most recently completed fiscal years.
Universal Display Corporation 2023 Proxy Statement 19
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Revenue
The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Revenue during the three most recently completed fiscal years.
Description of Relationship Between Company TSR and Peer Group TSR
The following chart compares our cumulative TSR over the three most recently completed fiscal years to that of the Nasdaq Electronic Components Index over the same period.
Universal Display Corporation 2023 Proxy Statement 20
Tabular List of Most Important Financial Performance Measures
The following table presents the financial performance measures that the Company considers to have been the most important in linking Compensation Actually Paid to our PEO and Non-PEO NEOs for 2022 to Company performance. The measures in this table are not ranked.
|
Revenue |
Net Income |
Adjusted EBITDA |
Stock Ownership Guidelines
Executive Stock Ownership Guidelines
On April 4, 2017, the Board of Directors approved stock ownership guidelines for our Named Executive Officers, to further align the long-term interests of the Company’s executive officers with the interests of the Company’s shareholders. Under the guidelines, each Named Executive Officer will be expected to own a number of shares of the Company’s common stock with a market value equal to at least the following amount for as long as he or she remains an executive:
|
|
Title: |
Ownership Threshold: |
Chief Executive Officer or President |
Six times (6x) base salary |
Executive Vice President or Chief Financial Officer |
Four times (4x) base salary |
Senior Vice President |
Three times (3x) base salary |
Other Executives |
Two times (2x) base salary |
For the purpose of meeting the applicable ownership threshold, ownership includes all shares of common stock held beneficially or of record by the executive (or his or her spouse), including restricted stock and stock units (including unvested shares) and shares held by certain trusts and plans. Performance stock units and unexercised options are not included. If an executive is not in compliance with the guidelines, such executive will not be permitted to sell or otherwise dispose of stock until his or her applicable threshold is met.
The holding period requirements set forth in the executive stock ownership guidelines are in addition to any applicable holding period requirement set forth in any equity award agreement to which an executive may be party. Newly appointed executives have a period of five years to achieve stock ownership thresholds consistent with their new position and are deemed to be in compliance with the guidelines during such period. Each of the Named Executive Officers is currently deemed to be in compliance with the stock ownership guidelines for our executive officers.
Director Stock Ownership Guidelines
On December 15, 2011, the Board of Directors of the Company approved stock ownership guidelines for members of the Board who are not officers of the Company. These guidelines require such individuals to own a number of shares of the Company’s common stock equal in value to ten times their annual cash compensation for Board service, excluding additional compensation for Committee service or based on Board meeting attendance. Individuals are allowed five years from the date they are first elected to the Board to comply with these guidelines, and once an individual is determined to be in compliance with these guidelines, that individual will not be considered out of compliance with these guidelines at any future time due solely to a decrease in the share price of the Company’s common stock since the last compliance measurement date.
Compliance with the stock ownership guidelines for these Board members is measured as of the first business day of each calendar year using (1) the highest closing price of the Company’s common stock on the Nasdaq Global Select Market during the immediately preceding calendar year, and (2) the annual cash compensation to the individual for Board service for the immediately preceding calendar year. The highest closing price of the Company’s common stock on the Nasdaq Global Select Market in 2022 was $175.55 per share. The annual cash compensation to each member of the Board who is not an officer of the Company was $74,520 for 2022. On this basis and consistent with the above policy, on the first business day of 2022 (January 3, 2022), except with respect to new directors Ms. Comparin and Ms. Joseph (who have until December 31, 2024 to comply with the Company’s stock ownership guidelines), each member of the Board who was required to own at least 4,245 shares of the Company’s common stock did in fact own such shares.
Clawback Policy for Named Executive Officer Compensation
On April 4, 2017, the Board of Directors approved an executive compensation recovery or “clawback” policy, to promote and maintain a culture of diligent and principled management of the Company and so that an executive officer should not receive an improper benefit of performance compensation. This policy requires that in the event of a Named Executive Officer’s fraud, intentional or willful misconduct, or gross negligence that results in a material restatement of any financial statement during such year or any of the three prior full fiscal years, the Board of Directors shall review the performance compensation paid or awarded
Universal Display Corporation 2023 Proxy Statement 21
to the executive during such period. If the Board of Directors determines that the amount of performance compensation paid or awarded during such period exceeds what would have been paid or awarded in accordance with the restatement, then the Board of Directors in its sole discretion may cause such executive to forfeit unvested or unpaid performance compensation and recover from the executive the performance compensation that was already paid or awarded during such period.
The compensation recovery requirements set forth in our executive compensation recovery policy are in addition to any clawback, recoupment or compensation recovery provisions that are included in any equity award agreement, employment agreement, bonus plan or similar agreement or plan. With respect to short-term compensation, our Annual Incentive Plan provides that any bonuses granted under the Annual Incentive Plan are subject to any applicable clawback or recoupment policy that the Board of Directors may adopt. Likewise, the equity grant award letters evidencing the RSUs and PSUs granted to the Named Executive Officers as part of our long-term incentive program state that such awards are subject to any applicable clawback or recoupment policies implemented by the Board from time to time.
In 2022, the SEC adopted final rules with respect to clawback policies, which require that stock exchanges adopt listing standards requiring listed companies to have clawback policies meeting the criteria set forth in the listing standards. Our clawback policy provides that if either the SEC or Nasdaq adopts final rules or policies with respect to executive compensation recovery, the Board of Directors shall amend or restate our policy as necessary to comply with such final rules or policies. We expect Nasdaq’s listing standards to be adopted and become effective in 2023 and will consider appropriate modifications to our clawback policy at that time.
Change in Control Payments
In April 2003, we entered into change in control agreements with our executive officers. These agreements were amended and restated in November 2008 in order to bring them into compliance with the strict timing and documentary requirements of Section 409A of the IRC and the regulations issued thereunder. Mr. Premutico entered into a change in control agreement on April 16, 2012, and Mr. Millard entered into a change in control agreement on September 6, 2022, to enable each of them to receive change in control benefits commensurate with those offered to our other executive officers. Both the original agreements and the amended and restated agreements were approved by our Board of Directors.
The change in control agreements provide for certain cash payments and other benefits to our Named Executive Officers in the event that their employment is terminated or their responsibilities are substantially reduced, in connection with a change in control of the Company, constituting a “double-trigger” mechanism whereby benefits are not paid unless both conditions are met. We believe these agreements help to reinforce and encourage the continued attention and dedication of our Named Executive Officers to the Company in the event they are asked to help facilitate a change in control.
Under the change in control agreements, our Named Executive Officers would receive benefits equal to two times their base salaries and annual bonuses, plus ancillary benefits relating to life and disability insurance, medical and dental coverage and employment outplacement services. The change in control agreements utilize the “double-trigger” mechanism because we believe our Named Executive Officers should only receive these benefits if they suffer a reduction in employment status associated with a change in control. The agreements also include “gross-up” provisions that would compensate our Named Executive Officers for any taxes they might owe in connection with receipt of these benefits.
We believe the terms of the change in control agreements for our Named Executive Officers are reasonable and appropriate for a company with new and exciting technologies such as ours. More detailed information about these agreements and the specific benefits and compensation payable to our Named Executive Officers in connection with a change in control are set forth elsewhere in this proxy statement.
In addition, in the event of a change in control of the Company, each SERP participant will become immediately vested in his or her SERP benefit. Unless the participant’s benefit has already fully vested, if the participant has less than 20 years of service at the time of the change in control, he or she will receive a prorated benefit based on his or her number of years of service (up to 20), divided by 20. If the change in control qualifies as a “change in control event” for purposes of Section 409A of the IRC, then each participant (including former employees who are entitled to SERP benefits) will receive a lump sum cash payment equal to the present value of the benefit immediately upon the change in control.
Tax Consequences of Our Compensation Program
Internal Revenue Code §409A
Section 409A of the IRC provides that nonqualified deferred compensation benefits are includible in an employee’s income when vested, unless certain requirements are met. If these requirements are not met, employees are also subject to an additional income tax and interest. Our compensation plans and arrangements are drafted to meet any applicable requirements of Section 409A. Change in control agreements with our executive officers were amended in November 2008 to ensure compliance with these requirements. The SERP, as adopted, is intended to comply with the requirements of Section 409A. As a result, all of our executive officers will be taxed when any deferred compensation is actually paid to them, and we will be entitled to a tax deduction at that time.
Internal Revenue Code §280G
Section 280G of the IRC disallows a company’s tax deduction for “excess parachute payments.” Additionally, Section 4999 of the IRC imposes a 20% excise tax on any person who receives excess parachute payments. Presently, all of our Named Executive
Universal Display Corporation 2023 Proxy Statement 22
Officers are entitled to payments upon the termination of their employment in connection with a change in control of the Company, some of which may qualify as “excess parachute payments.” Accordingly, our tax deduction for any such excess parachute payments would be disallowed under Section 280G of the IRC. Moreover, we are required to make additional payments to these individuals to cover any excise taxes imposed on them by reason of the payments they receive in connection with a change in control. As previously indicated, we believe that this tax “gross-up” obligation is reasonable and appropriate given our current size and status.
Summary Compensation Table
The following table provides information on the compensation of our Chief Executive Officer, our Chief Financial Officer and our other three highest-paid executive officers for services in all capacities to the Company and its subsidiaries for 2022, 2021 and 2020. Mr. Rosenblatt served as our Chief Financial Officer through September 6, 2022, at which time Mr. Millard assumed the role. This group is referred to in this proxy statement as the “Named Executive Officers.”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position |
Year |
Salary ($) |
|
Bonus ($) |
|
|
Stock Awards ($) (1) |
|
|
Non-Equity Incentive Plan Compensation ($) (2) |
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
|
|
All Other Compensation ($) |
|
|
Total ($) |
|
Steven V. Abramson |
2022 |
|
842,703 |
|
- |
|
(3) |
|
7,033,223 |
|
(4) |
|
1,857,838 |
|
- |
|
(5) |
|
45,388 |
|
(6) |
|
9,779,152 |
|
President, Chief Executive |
2021 |
|
814,314 |
|
- |
|
(7) |
|
8,078,938 |
|
(8) |
|
1,596,205 |
|
- |
|
(9) |
|
41,800 |
|
(6) |
|
10,531,258 |
|
Officer and Director |
2020 |
|
781,054 |
|
- |
|
(10) |
|
8,305,261 |
|
(11) |
|
881,273 |
|
|
8,230,829 |
|
(12) |
|
47,854 |
|
(6) |
|
18,246,271 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sidney D. Rosenblatt |
2022 |
|
842,703 |
|
- |
|
(3) |
|
7,250,626 |
|
(13) |
|
1,857,838 |
|
- |
|
(5) |
|
47,597 |
|
(14) |
|
9,998,764 |
|
Former Executive Vice |
2021 |
|
814,314 |
|
- |
|
(7) |
|
8,078,938 |
|
(8) |
|
1,596,205 |
|
- |
|
(9) |
|
49,196 |
|
(14) |
|
10,538,653 |
|
President and Chief Financial |
2020 |
|
781,054 |
|
- |
|
(10) |
|
8,305,261 |
|
(11) |
|
881,273 |
|
|
6,260,614 |
|
(12) |
|
48,311 |
|
(14) |
|
16,276,513 |
|
Officer (Retired) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Julia J. Brown, Ph.D. |
2022 |
|
651,697 |
|
- |
|
(3) |
|
4,936,835 |
|
(4) |
|
1,435,412 |
|
- |
|
(5) |
|
17,973 |
|
(15) |
|
7,041,917 |
|
Executive Vice President |
2021 |
|
616,757 |
|
|
1,500 |
|
(7) |
|
5,670,290 |
|
(8) |
|
1,233,267 |
|
- |
|
(9) |
|
18,285 |
|
(15) |
|
7,540,099 |
|
and Chief Technical Officer |
2020 |
|
556,323 |
|
|
7,000 |
|
(10) |
|
5,829,486 |
|
(11) |
|
618,993 |
|
|
5,588,724 |
|
(12) |
|
18,361 |
|
(15) |
|
12,618,887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mauro Premutico |
2022 |
|
555,122 |
|
- |
|
(3) |
|
3,798,540 |
|
(4) |
|
1,215,140 |
|
- |
|
(5) |
|
16,854 |
|
(16) |
|
5,585,656 |
|
SVP, Planning and GM, Patents |
2021 |
|
525,427 |
|
- |
|
(7) |
|
4,362,425 |
|
(8) |
|
1,044,015 |
|
- |
|
(9) |
|
15,579 |
|
(16) |
|
5,947,446 |
|
and Licensing, and Secretary |
2020 |
|
470,234 |
|
- |
|
(10) |
|
4,484,958 |
|
(11) |
|
524,006 |
|
|
3,344,873 |
|
(12) |
|
18,441 |
|
(16) |
|
8,842,512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Janice K. Mahon |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVP, Technology |
2022 |
|
456,335 |
|
- |
|
(3) |
|
3,059,850 |
|
(4) |
|
989,143 |
|
- |
|
(5) |
|
22,471 |
|
(17) |
|
4,527,799 |
|
Commercialization and GM, |
2021 |
|
431,694 |
|
- |
|
(7) |
|
3,514,200 |
|
(8) |
|
849,845 |
|
- |
|
(9) |
|
21,769 |
|
(17) |
|
4,817,508 |
|
Commercial Sales Business |
2020 |
|
387,203 |
|
- |
|
(10) |
|
3,612,894 |
|
(11) |
|
426,549 |
|
|
3,235,377 |
|
(12) |
|
21,124 |
|
(17) |
|
7,683,147 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian Millard |
2022 |
|
120,962 |
|
|
250,000 |
|
(3) |
|
800,050 |
|
(18) |
|
195,694 |
|
- |
|
|
|
17,808 |
|
(19) |
|
1,384,514 |
|
Vice President, Chief Financial |
2021 |
- |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
|
- |
|
Officer and Treasurer |
2020 |
- |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
|
- |
|
(1) For information regarding the assumptions made in the valuations of these amounts, see Footnote 16 to the Company’s financial statements for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K for such year. The grant date fair value of the PSU awards granted in 2022 included in this column was calculated based on achievement of the target amount with respect to each of the performance targets, which was the probable achievement of the performance goals as determined at the date of grant, and assumes that the grant date share price includes reasonable projections of future dividend payments. The highest level of performance that may be achieved for the PSUs would result in the receipt of 3x the number of PSUs receivable at target. The PSU awards granted in 2022 will be eligible to vest after three years based on the achievement of pre-established relative performance goals ending with the 2024 fiscal year. Half of the PSUs awarded will vest based on the achievement of specified EBITDA performance targets for the 2024 fiscal year, with one quarter vesting based on the achievement of total shareholder return relative to total shareholder return of the companies in the Nasdaq Electronics Components Index for the three year period from January 1, 2022 to December 31, 2024, and the other quarter vesting based on the achievement of cash from operations performance targets in 2024. Assuming performance at the maximum level, the grant date fair value of the PSUs granted during 2022 was $12,000,328 for Messrs. Abramson and Rosenblatt, $8,423,461 for Dr. Brown, $6,481,263 for Mr. Premutico and $5,220,882 for Ms. Mahon. Mr. Rosenblatt's PSUs were forfeited after his retirement from the Company on December 30, 2022. Mr. Millard was not granted any PSUs in 2022.
(2) Non-equity incentive plan compensation (bonus awards under the Annual Incentive Plan) earned for 2022, 2021 and 2020 performance was paid in March 2023, February 2022 and March 2021, respectively. For greater detail see the section of this proxy statement entitled “Compensation Discussion and Analysis” under the heading “Short-term Incentive Compensation.”
(3) There were no special event bonuses awarded for 2022 performance. Mr. Millard received a cash bonus of $250,000 at the time of his hire in September 2022 to compensate him for the value of any unpaid bonus forfeited from his prior employment. For greater detail see the sections of this proxy statement entitled “Compensation Discussion and Analysis” under the headings “Special event awards” and "Perquisites and other benefits".
(4) This amount is based on the aggregate grant date fair value of the restricted share units and performance share units granted to this Named Executive Officer on February 16, 2022. These stock awards are discussed in greater detail in the section of this proxy statement entitled “Compensation Discussion and Analysis” under the heading “Long-term incentive equity compensation awards” and below under the section “Grants of Plan-Based Awards.”
(5) This amount is based on the difference between the actuarial present value of the accrued benefit under the SERP as of December 31, 2021, using a discount rate of 2.16%, and the actuarial present value of the accrued benefit under the SERP as of December 31, 2022, using a discount rate of 4.94%. In 2022, the value of the SERP decreased, which has been reflected as a zero increase
Universal Display Corporation 2023 Proxy Statement 23
in the value of this benefit, as a result of the large increase in the discount rate, which significantly lowered its actuarial present value. The changes in the actuarial present values of the Named Executive Officers’ SERP benefits do not constitute cash payments to the Named Executive Officers. None of the Named Executive Officers actually received any cash payment with respect to this benefit in 2022.
(6) This amount is based on (a) auto expense reimbursements and allowance of $7,837, $6,304 and $14,775, (b) life and disability insurance premium payments of $28,401, $26,797 and $24,530 and (c) nonelective employer 401(k) plan contributions of $9,150, $8,700 and $8,550, in each case for 2022, 2021 and 2020, respectively.
(7) There were no special event bonuses awarded for 2021 performance. Dr. Brown received a bonus of $1,500 relating to patent awards in 2021. For greater detail see the section of this proxy statement entitled “Compensation Discussion and Analysis” under the heading “Special event awards.”
(8) This amount is based on the aggregate grant date fair value of the restricted share units and performance share units granted to this Named Executive Officer on March 2, 2021. These stock awards are discussed in greater detail in the section of this proxy statement entitled “Compensation Discussion and Analysis” under the heading “Long-term incentive equity compensation awards” and below under the section “Grants of Plan-Based Awards.”
(9) This amount is based on the difference between the actuarial present value of the accrued benefit under the SERP as of December 31, 2020, using a discount rate of 1.54%, and the actuarial present value of the accrued benefit under the SERP as of December 31, 2021, using a discount rate of 2.16%. In 2021, the value of the SERP decreased, which has been reflected as a zero increase in the value of this benefit, as a result of an increase in the discount rate, which lowered the SERP’s actuarial present value, and a larger bonus previously paid for extraordinary Company performance dropping out of the final average salary calculation for purposes of determining the future accrued benefit. As described in detail in the section of this proxy statement entitled “Compensation Discussion and Analysis” under the heading “Supplemental retirement benefits,” the value of the SERP benefit includes a percentage of the average annual bonus for the most recent three fiscal years ending prior to the participant’s date of termination of employment. The changes in the actuarial present values of the Named Executive Officers’ SERP benefits do not constitute cash payments to the Named Executive Officers. None of the Named Executive Officers actually received any cash payment with respect to this benefit in 2021.
(10) There were no special event bonuses awarded for 2020 performance. Dr. Brown received a bonus of $7,000 relating to patent awards in 2020. For greater detail see the section of this proxy statement entitled “Compensation Discussion and Analysis” under the heading “Special event awards.”
(11) This amount is based on the aggregate grant date fair value of the restricted share units and performance share units granted to this Named Executive Officer on March 6, 2020. These stock awards are discussed in greater detail in the section of this proxy statement entitled “Compensation Discussion and Analysis” under the heading “Long-term incentive equity compensation awards.”
(12) This amount is based on the difference between the actuarial present value of the accrued benefit under the SERP as of December 31, 2019, using a discount rate of 2.64%, and the actuarial present value of the accrued benefit under the SERP as of December 31, 2020, using a discount rate of 1.54%. The increase in value of the SERP benefit for 2020 is due to the inclusion of the larger bonus amounts paid out in March 2020 for extraordinary 2019 performance. These one-time awards were in addition to the annual bonuses paid under the Annual Incentive Plan and were provided in view of the Company’s exceptional 2019 performance which far exceeded the targets under the Annual Incentive Plan. As described in detail in the section of this proxy statement entitled “Compensation Discussion and Analysis” under the heading “Supplemental retirement benefits,” the value of the SERP benefit includes a percentage of the average annual bonus for the most recent three fiscal years ending prior to the participant’s date of termination of employment. The changes in the actuarial present values of the Named Executive Officers’ SERP benefits do not constitute cash payments to the Named Executive Officers. None of the Named Executive Officers actually received any cash payment with respect to this benefit in 2020.
(13) This amount is based on the aggregate grant date fair value of the restricted share units and performance share units granted to this Named Executive Officer on February 16, 2022, the vast majority of which Mr. Rosenblatt is no longer eligible to receive as the result of his retirement as an employee of the Company effective as of December 30, 2022, and an award of shares with a total value of $217,403 which was approved by the Board of Directors on December 8, 2022 and will be issued in quarterly installments at the end of each quarter in 2023 for Mr. Rosenblatt's service as a non-employee director during 2023. These stock awards are discussed in greater detail in the section of this proxy statement entitled “Compensation Discussion and Analysis” under the heading “Long-term incentive equity compensation awards” and below under the section “Grants of Plan-Based Awards.”
(14) This amount is based on (a) auto expense reimbursements and allowance of $2,071, $3,471 and $2,293, (b) life and disability insurance premium payments of $36,376, $37,025 and $37,468 and (c) nonelective employer 401(k) plan contributions of $9,150, $8,700 and $8,550, in each case for 2022, 2021 and 2020, respectively.
(15) This amount is based on (a) auto expense reimbursements and allowance of $744, $1,921 and $2,907, (b) life and disability insurance premium payments of $8,079, $7,664 and $6,904 and (c) nonelective employer 401(k) plan contributions of $9,150, $8,700 and $8,550, in each case for 2022, 2021 and 2020, respectively.
(16) This amount is based on (a) auto expense reimbursements and allowance of $1,274, $2,203 and $5,850, (b) life and disability insurance premium payments of $6,429, $4,676 and $4,041 and (c) nonelective employer 401(k) plan contributions of $9,150, $8,700 and $8,550, in each case for 2022, 2021 and 2020, respectively.
(17) This amount is based on (a) auto expense reimbursements and allowance of $5,114, $5,189 and $5,599, (b) life and disability insurance premium payments of $8,207, $7,880 and $6,975 and (c) nonelective employer 401(k) plan contributions of $9,150, $8,700 and $8,550, in each case for 2022, 2021 and 2020, respectively.
(18) This amount is based on the award of 8,301 restricted share units granted on September 29, 2022 to compensate Mr. Millard for the value of any unvested equity forfeited from his prior employment, which award is subject to a time based vesting restriction, with one-half of the total share amount vesting on the one-year anniversary from the date of grant (September 29, 2023) and the other half vesting on the second anniversary of Mr. Millard's date of hire (September 6, 2024), respectively.
(19) This amount is based on (a) auto expense reimbursements and allowance of $130 (b) life and disability insurance premium payments of $271, (c) relocation expense reimbursements of $12,040 and (d) a tax gross-up on relocation expenses of $5,368, in each case for 2022.
Universal Display Corporation 2023 Proxy Statement 24
Grants of Plan-Based Awards
The following table summarizes each grant of an award made to Named Executive Officers in 2022. These awards were made as discussed above in the “Compensation Discussion and Analysis” section under the headings “Short-term incentive compensation” and “Long-term incentive equity compensation awards.” No stock options, stock appreciation rights (“SARs”) or other similar instruments were awarded to the Named Executive Officers during 2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts Under Non- Equity Incentive Plan Awards (1) |
Estimated Future Payouts Under Equity Incentive Plan Awards (2) |
|
|
|
|
|
Name |
Grant Date |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
All Other Stock Awards: Number of Shares of Stock (#) (3) |
All Other Option Awards: Number of Securities Underlying Options (#) |
Exercise or Base Price of Option Awards ($) |
Grant Date Fair Value of Stock and Option Awards ($) |
Steven V. Abramson |
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Plan |
— |
536,387 |
1,072,774 |
2,145,548 |
— |
— |
— |
— |
|
— |
— |
— |
RSUs |
2/16/2022 |
— |
— |
— |
— |
— |
— |
13,482 |
|
— |
— |
2,000,055 |
PSUs |
2/16/2022 |
— |
— |
— |
1,685 |
26,964 |
80,892 |
— |
|
— |
— |
5,033,168 |
Sidney D. Rosenblatt |
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Plan |
— |
536,387 |
1,072,774 |
2,145,548 |
— |
— |
— |
— |
|
— |
— |
— |
RSUs (4) |
2/16/2022 |
— |
— |
— |
— |
— |
— |
13,482 |
|
— |
— |
2,000,055 |
PSUs (4) |
2/16/2022 |
— |
— |
— |
1,685 |
26,964 |
80,892 |
— |
|
— |
— |
5,033,168 |
Julia J. Brown, Ph.D. |
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Plan |
— |
414,426 |
828,851 |
1,657,703 |
— |
— |
— |
— |
|
— |
— |
— |
RSUs |
2/16/2022 |
— |
— |
— |
— |
— |
— |
9,463 |
|
— |
— |
1,403,836 |
PSUs |
2/16/2022 |
— |
— |
— |
1,183 |
18,927 |
56,781 |
— |
|
— |
— |
3,532,999 |
Mauro Premutico |
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Plan |
— |
350,830 |
701,660 |
1,403,320 |
— |
— |
— |
— |
|
— |
— |
— |
RSUs |
2/16/2022 |
— |
— |
— |
— |
— |
— |
7,281 |
|
— |
— |
1,080,136 |
PSUs |
2/16/2022 |
— |
— |
— |
910 |
14,563 |
43,689 |
— |
|
— |
— |
2,718,404 |
Janice K. Mahon |
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Plan |
— |
285,581 |
571,163 |
1,142,325 |
— |
— |
— |
— |
|
— |
— |
— |
RSUs |
2/16/2022 |
— |
— |
— |
— |
— |
— |
5,865 |
|
— |
— |
870,073 |
PSUs |
2/16/2022 |
— |
— |
— |
733 |
11,731 |
35,193 |
— |
|
— |
— |
2,189,777 |
Brian Millard |
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Plan |
— |
N/A |
113,000 |
226,000 |
— |
— |
— |
— |
— |
— |
— |
— |
RSUs |
9/29/2022 |
— |
— |
— |
— |
— |
— |
8,301 |
|
— |
— |
800,050 |
PSUs |
— |
— |
— |
— |
— |
— |
— |
— |
|
— |
— |
— |
(1) These columns reflect the range of potential awards under the Annual Incentive Plan available to be earned by the Named Executive Officer for 2022. The actual amounts earned for 2022 under the Annual Incentive Plan are set forth in the Summary Compensation Table under “Non-Equity Incentive Plan Compensation.” Each Named Executive Officer earned an award of approximately 173% of the target amount under the Annual Incentive Plan for 2022 performance, which was paid in March 2023. For further detail, see “Compensation Discussion and Analysis—Short-term Incentive Compensation.”
(2) Consists of an award of PSUs, which vest based on the achievement of pre-established relative performance goals. Half of the PSUs awarded will vest based on the achievement of specified EBITDA performance targets for the 2024 fiscal year, with one quarter vesting based on the achievement of total shareholder return relative to total shareholder return of the companies in the Nasdaq Electronics Components Index for the three year period from January 1, 2022 to December 31, 2024, and the other quarter vesting based on the achievement of cash from operations performance targets in 2024. The PSU target awards are subject to a multiplier ranging from 0x to 3x based upon the percentile achievement with respect to each relative target. These awards are subject to the continued employment of the Named Executive Officers on the applicable vesting date. For further detail, see “Compensation Discussion and Analysis—Long-term incentive equity compensation awards.”
(3) For Mr. Abramson, Mr. Rosenblatt, Dr. Brown, Mr. Premutico and Ms. Mahon, consists of an award of time-based RSUs, which vested or will vest ratably one-third each year over three years on February 16, 2023, 2024 and 2025. For Mr. Millard, who joined the Company in September 2022, consists of an award of time-based RSUs which will vest ratably one-half on the anniversary of the date of grant (September 29, 2023) and one-half on the second anniversary of his date of hire (September 6, 2024). The awards are subject to the continued employment of the Named Executive Officers on the applicable vesting date. For further detail, see “Compensation Discussion and Analysis—Long-term incentive equity compensation awards.”
(4) These awards were forfeited by Mr. Rosenblatt after his retirement from the Company on December 30, 2022.
Universal Display Corporation 2023 Proxy Statement 25
Outstanding Equity Awards at Fiscal Year-End Table
The following table summarizes the outstanding equity awards granted to the Named Executive Officers as of December 31, 2022. None of the Named Executive Officers holds any outstanding stock options.
|
|
|
|
|
|
|
|
|
|
|
Stock Awards |
|
Equity Incentive Plan Awards |
Name |
Grant Date |
Number of Shares of Stock that Have Not Vested (#) (1) |
|
Market Value of Shares of Stock that Have Not Vested ($) (1) (2) |
|
Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3) |
|
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (2) (3) |
Steven V. Abramson |
3/6/2020 |
8,555 |
|
924,282 |
|
25,666 |
|
2,772,955 |
|
3/2/2021 |
12,432 |
|
1,343,153 |
|
18,649 |
|
2,014,838 |
|
2/16/2022 |
13,482 |
|
1,456,595 |
|
26,964 |
|
2,913,191 |
Sidney D. Rosenblatt |
12/8/2022 |
1,888 |
(4) |
203,980 |
|
— |
|
— |
Julia J. Brown, Ph.D. |
12/12/2019 |
5,120 |
|
553,165 |
|
— |
|
— |
|
3/6/2020 |
6,005 |
|
648,780 |
|
18,015 |
|
1,946,341 |
|
3/2/2021 |
8,726 |
|
942,757 |
|
13,089 |
|
1,414,136 |
|
2/16/2022 |
9,463 |
|
1,022,383 |
|
18,927 |
|
2,044,873 |
Mauro Premutico |
12/12/2019 |
2,560 |
|
276,582 |
|
— |
|
— |
|
3/6/2020 |
4,620 |
|
499,145 |
|
13,860 |
|
1,497,434 |
|
3/2/2021 |
6,713 |
|
725,273 |
|
10,070 |
|
1,087,963 |
|
2/16/2022 |
7,281 |
|
786,639 |
|
14,563 |
|
1,573,387 |
Janice K. Mahon |
12/12/2019 |
2,560 |
|
276,582 |
|
— |
|
— |
|
3/6/2020 |
3,721 |
|
402,017 |
|
11,165 |
|
1,206,267 |
|
3/2/2021 |
5,408 |
|
584,280 |
|
8,112 |
|
876,420 |
|
2/16/2022 |
5,865 |
|
633,655 |
|
11,731 |
|
1,267,417 |
Brian Millard |
9/29/2022 |
8,301 |
|
896,840 |
|
— |
|
— |
(1) RSUs for the Named Executive Officers, except with respect to Mr. Millard, vest over three years with one-third vesting on the first three anniversaries of the date of grant. The RSUs granted to Mr. Millard at the time of his hire vest over two years, with the first half vesting on the anniversary of the date of grant and the second half vesting on the second anniversary of Mr. Millard's date of hire.
(2) Based on the closing price of the Company’s common stock on the Nasdaq Global Select Market as of December 31, 2022 ($108.04).
(3) PSUs granted March 6, 2020 are eligible to vest based on the achievement of pre-established relative performance goals over a three-year performance period from January 2020 through December 2022. PSUs granted March 2, 2021 are eligible to vest based on the achievement of pre-established relative performance goals over a three-year performance period from January 2021 through December 2023. PSUs granted February 16, 2022 are eligible to vest based on the achievement of pre-established relative performance goals over a three-year performance period from January 2022 through December 2024.
(4) This award was approved by the Board of Directors on December 8, 2022 and will be issued in quarterly installments at the end of each quarter in 2023 for Mr. Rosenblatt's service as a non-employee director during 2023. All awards previously held by Mr. Rosenblatt were forfeited upon his retirement from the Company on December 30, 2022.
Stock Vested Table
The following table summarizes the vesting of stock, including restricted stock, restricted stock units, performance stock units, and similar instruments, for the Named Executive Officers during 2022. None of the Named Executive Officers exercised any stock options, SARs or other similar instruments during 2022.
|
|
|
|
|
Name |
|
Number of Shares Acquired on Vesting (#) |
|
Value Realized on Vesting ($) (1) |
Steven V. Abramson |
|
31,209 |
|
4,907,446 |
Sidney D. Rosenblatt |
|
31,209 |
|
4,907,446 |
Julia J. Brown, Ph.D. |
|
18,042 |
|
2,841,553 |
Mauro Premutico |
|
12,267 |
|
1,933,145 |
Janice K. Mahon |
|
10,395 |
|
1,637,434 |
Brian Millard |
|
- |
|
- |
(1) Based on the closing price of our common stock on the Nasdaq Global Select Market on the date of vesting.
Universal Display Corporation 2023 Proxy Statement 26
For each of the Named Executive Officers, the shares shown as vesting above include PSUs and RSUs vesting under long-term incentive equity awards made in 2019, 2020 and 2021, and for Dr. Brown, Mr. Premutico and Ms. Mahon, the shares shown as vesting above also include restricted stock awards (“RSAs”) vesting under long-term equity awards made in December 2019.
Pension Benefits Table
The following table provides information regarding the Company’s Supplemental Executive Retirement Plan, or SERP. For further detail, see “Compensation Discussion and Analysis—Supplemental retirement benefits.” Mr. Millard is not a participant in the SERP.
|
|
|
|
|
|
|
|
Name |
Plan Name |
|
Number of Years Credited Service (#) |
|
Present Value of Accumulated Benefit ($)(1) |
Payments During Last Fiscal Year ($) |
Steven V. Abramson |
SERP |
|
26 |
|
18,920,233 |
|
- |
Sidney D. Rosenblatt |
SERP |
|
26 |
|
15,483,897 |
|
- |
Julia J. Brown, Ph.D. |
SERP |
|
24 |
|
9,851,711 |
|
- |
Mauro Premutico |
SERP |
|
11 |
|
2,916,986 |
|
- |
Janice K. Mahon |
SERP |
|
26 |
|
7,433,834 |
|
- |
(1) For information regarding the assumptions made in the valuations of these amounts, see Footnote 17 to the Company's financial statements for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K for such year.
Potential Payments Upon Termination in Connection with a Change in Control
In April 2003, the Company entered into Change in Control Agreements with the following Named Executive Officers: Mr. Abramson, Mr. Rosenblatt, Dr. Brown and Ms. Mahon (the “Original CIC Agreements”). These agreements provided for certain cash payments and other benefits to the Named Executive Officers upon a qualifying employment termination event in connection with a “Change in Control” of the Company. In November 2008, the Original CIC Agreements were amended and restated to bring them into compliance with Section 409A of the IRC and regulations issued thereunder.
The Amended and Restated CIC Agreements with each of Mr. Abramson, Mr. Rosenblatt, Dr. Brown and Ms. Mahon, and the Amended and Restated Change in Control Agreement entered into with Mr. Premutico in April 2012 and the Amended and Restated Change in Control Agreement entered into with Mr. Millard in September 2022 (collectively, “Amended CIC Agreements”) utilize a “double-trigger” mechanism whereby benefits are not paid to an executive as a result of the Change in Control unless he or she also experiences a qualifying termination event in connection with the Change in Control (i.e., termination or substantial reduction in responsibilities).
Under the Amended CIC Agreements, if a Named Executive Officer’s employment is terminated in connection with a Change in Control, such Named Executive Officer would be entitled to the following benefits:
•a lump-sum payment equal to two times the sum of the average annual base salary and the annual bonus to the individual, including any authorized deferrals, salary reduction amounts and any car allowance, and including the fair market dollar value equivalent of any bonus amounts paid in the form of stock options, SARs, warrants, stock awards or performance units;
•a lump-sum payment equal to the estimated after-tax premium cost to the individual of continuing any Company-sponsored life, travel or accident insurance and disability insurance coverage for the individual (and where applicable, his or her spouse and dependents), based on coverage levels in effect immediately prior to the termination date (less any contributions that would have been required by the individual), for two years;
•a lump-sum payment equal to the Company-provided contributions to which the individual would be entitled under the Company’s 401(k) savings and retirement plans, assuming the individual continued working for the Company for two years at his or her annual base salary;
•effective immediately preceding the Change in Control (but contingent upon the consummation of the Change in Control), full vesting of all outstanding, unvested equity awards held by the individual immediately preceding the Change in Control that have not yet become vested (and exercisable to the extent applicable), except the awards which vest based on the attainment of performance criteria would not automatically vest but would instead be governed by the terms of the plan or agreement evidencing the award;
•continued group hospitalization, health and dental care coverage, at the level in effect as of the termination date (or generally comparable coverage) for the individual and, where applicable, the individual’s spouse and dependents, for two years assuming the individual continued working for the Company;
•a lump-sum payment equal to $10,000 for outplacement assistance services for two years;
•applicable SERP benefit payout; and
•an additional payment to cover any excise tax imposed on the individual by reason of the individual receiving the payments and benefits specified above.
Universal Display Corporation 2023 Proxy Statement 27
The estimated payments and benefits that the Company would provide to each Named Executive Officer under the Amended CIC Agreements are set forth in the following table, based on the assumption that his or her employment is terminated in connection with a Change in Control which took place on December 31, 2022. Mr. Rosenblatt is not included in the table due to his retirement from the Company on December 30, 2022, at which time he received no payouts as contemplated in this table.
|
|
|
|
|
|
|
|
|
|
|
|
Name |
Lump Sum Payment of Two Times Annual Base Salary (1) ($) |
Lump Sum Payment of Two Times Annual Bonus (2) ($) |
Lump Sum Payment for Accrued and Unused Paid Time Off and Sick Time ($) |
Lump Sum Payment of Estimated After-Tax Cost to Continue Life, Travel and Disability Insurance for Two Years ($) |
Estimated Value of Ongoing Contributions Under Long- Term Incentive, Savings and Retirement Plans for Two Years ($) |
Estimated After-Tax Value of Ongoing Payments to Continue Group Medical, Health and Dental Care Coverage for Two Years ($) |
Estimated Value of Unvested Stock Options and Stock Awards Subject to Accelerated Vesting (3) (4) ($) |
Payment for Outplacement Assistance Services ($) |
SERP Payout ($) |
Value of Tax Reimbursement Payments on Account of Excise or Other Taxes ($) |
Total Payments and Benefits ($) |
Steven V. Abramson |
1,728,438 |
7,592,614 |
197,924 |
56,802 |
18,300 |
43,289 |
11,425,014 |
10,000 |
18,920,233 |
20,051,071 |
60,043,685 |
Julia J. Brown, Ph.D. |
1,338,162 |
5,332,946 |
142,523 |
16,159 |
18,300 |
32,008 |
8,572,434 |
10,000 |
9,851,711 |
12,339,518 |
37,653,761 |
Mauro Premutico |
1,134,656 |
3,611,662 |
122,977 |
11,032 |
18,300 |
43,289 |
6,446,423 |
10,000 |
2,916,986 |
6,457,158 |
20,772,483 |
Janice K. Mahon |
925,860 |
2,939,948 |
80,694 |
16,414 |
18,300 |
32,008 |
5,246,638 |
10,000 |
7,433,834 |
9,363,008 |
26,066,704 |
Brian Millard |
853,000 |
- |
9,458 |
2,361 |
- |
2,214 |
896,841 |
10,000 |
- |
1,186,140 |
2,960,013 |
(1) Under the Amended CIC Agreements, this is to be based on the highest monthly base salary paid or payable to the employee during the twenty-four (24) months prior to December 31, 2022, including any amounts earned but deferred. It is also to include any annual car allowance. For purposes of this calculation, the employee’s bi-weekly salary as of the payment period ended on December 31, 2022 was utilized. Also, an annual car allowance of $6,000 is included for Mr. Abramson, Mr. Rosenblatt, Dr. Brown, Mr. Premutico and Ms. Mahon, and a prorated car allowance of $1,500 is included for Mr. Millard.
(2) Under the Amended CIC Agreements, this is to be based on the highest annual bonus to the employee for the last three full fiscal years prior to December 31, 2022, and is to include the fair market dollar value equivalent of any stock, restricted stock or stock options issued as bonus consideration, determined as of the date of issuance and without regard to any restrictions or vesting conditions.
(3) Assumes all unvested or restricted stock options and stock awards, including performance-based grants, vest on termination of employment in connection with a Change of Control. See table under “Outstanding Equity Awards at Fiscal Year-End Table” for further detail. This amount does not include restricted stock (RSUs and PSUs) awarded in March 2023 as long-term incentive compensation.
In consideration of receiving these payments and benefits, each Named Executive Officer has agreed not to compete with the Company for six months following his or her termination in connection with a Change in Control. Each Named Executive Officer has further agreed that, for two years following his or her termination he or she will not knowingly (i) solicit or recruit any of the Company’s employees to compete with the Company, or (ii) divert or unreasonably interfere with the Company’s business relationships with any of its suppliers, customers, partners or joint venturers with whom the individual had any involvement. In addition, each Named Executive Officer is required to execute a general release of all employment-related claims he or she may have against the Company in order to receive the payments and benefits specified under the Amended CIC Agreements. (Such restrictive covenants are in addition to, and not in lieu of, restrictive covenants to which each Named Executive Officer is subject in other agreements with the Company, such as equity grant agreements.)
As used in the Amended CIC Agreements, a Change in Control of the Company would occur if:
•any person (or affiliated group of persons) first becomes the beneficial owner of securities of the Company (not including securities previously owned by such person(s) or any securities acquired directly from the Company) representing 30% or more of the then-outstanding voting securities of the Company;
•the individuals who constitute our Board of Directors at the beginning of any 24-month period cease, for any reason other than death, to constitute at least a majority of our Board of Directors;
•the Company consummates a merger or consolidation with any other corporation, except where the voting securities of the Company outstanding immediately prior to the merger or consolidation continue to represent at least 50% of the voting securities of the Company (or the surviving entity of the merger or consolidation or its parent), or where no person first becomes the beneficial owner of securities of the Company representing 30% or more of the then-outstanding voting securities of the Company;
•the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company, or an agreement is consummated for the sale or disposition by the Company of all or substantially all of its assets, excluding a sale or disposition by the Company of all or substantially all of its assets to an entity, at least 50% of the voting securities of which are owned by persons in substantially the same proportion as their ownership of the Company immediately prior to the sale; or
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•any person consummates a tender offer or exchange for voting stock of the Company and, directly or indirectly, becomes (in one or more transactions) the “beneficial owner” of securities of the Company representing a majority of the voting securities of the Company.
As used in the Amended CIC Agreements, a termination of a Named Executive Officer in connection with a Change in Control of the Company would include a termination of the Named Executive Officer’s employment:
•by the Company at the time of or within two years after a Change in Control, other than for the individual’s death or incapacity for a period of 12 consecutive months, or for cause;
•by the individual within two years after a Change in Control for (i) the Company’s breach of the Amended CIC Agreement or any other material obligation of the Company to the individual, (ii) any significant reduction by the Company of the individual’s authority, duties or responsibilities, (iii) any demotion or removal of the individual from his or her employment grade, compensation level or officer positions, or (iv) a relocation by more than 50 miles of the offices of the Company at which the individual principally works; and
•by either the Company or the individual during the one-year period immediately preceding a Change in Control, unless the Company establishes by clear and convincing evidence that the termination was for good faith business reasons not related to the Change in Control.