•be persons of integrity and sound ethical character;
•be able to represent all stockholders fairly;
•have no interests that materially conflict with those of VPG and its stockholders;
•have demonstrated professional achievement;
•have meaningful management, advisory or policy making experience;
•have a general appreciation of the major business issues facing VPG; and
•have adequate time to devote to serve on the Board.
A limited exception to some of these requirements, other than the requirements of integrity and ethics and the absence of material conflict, may be made for a holder of substantial voting power. Directors may not stand for re-election after the age of 75 unless the Board makes an affirmative determination that, because of the importance and value of the continued service of a director, the retirement policy should be waived, except that no director may stand for re-election after age 85. This policy does not apply to any person who controls more than 20% of the voting power of the Company. Mr. Talbert has reached age 75, and the Board has made an affirmative determination to waive the retirement policy with respect to Mr. Talbert for his nomination for re-election at the 2023 Annual Meeting. Mr. Reibstein will reach age 75 prior to the 2023 Annual Meeting, and the Board has made an affirmative determination to waive the retirement policy with respect to Mr. Reibstein for his nomination for re-election at the 2023 Annual Meeting. We also require that a majority of directors be independent; at least three of the directors have the financial literacy necessary for service on the audit committee and at least one of these directors qualifies as an audit committee financial expert; at least some of the independent directors have served as senior executives of public or substantial private companies; and at least some of the independent directors have general familiarity with the major industries in which we operate. Additionally, while the Company does not have a formal policy with respect to the consideration of diversity in identifying director candidates, the benefits of board
diversity are considered in the nominations process, including diversity of background and experience. A copy of the Company’s Policy Regarding Qualifications of Directors is available to stockholders on our website.
Can I recommend a nominationnominee for director?
Yes. The Nominating and Corporate Governance Committee will consider recommendations for director nominations submitted by stockholders entitled to vote generally in the election of directors. Submissions must be made in accordance with the Nominating and Corporate Governance Committee’s procedures, as outlined herein and set forth in materials posted on our website. For each annual meeting of our stockholders, the Nominating and Corporate Governance Committee will accept for consideration only one recommendation per stockholder or affiliated group of stockholders. The Nominating and Corporate Governance Committee will only consider candidates who satisfy our minimum qualifications for director, as summarized in this proxy statement and as set forth in materials posted on our website. Stockholders should be aware, as discussed herein, that it is our general policy to re-nominate qualified incumbent directors and that, absent special circumstances, the Committee will not considernominate other candidates when a qualified incumbent director consents to stand for re-election.
A stockholder wishing to recommend to the Nominating and Corporate Governance Committee a candidate for election as director must submit the recommendation in writing, addressed to the Committee, care of our Corporate Secretary, at Vishay Precision Group, Inc., 3 Great Valley Parkway, Suite 150, Malvern, PA 19355. Submissions must be made by mail, courier, or personal delivery. E-mailed submissions will not be considered. Submissions recommending candidates for election at an annual meeting of stockholders must generally be received no later than 120 calendar days prior to the first anniversary of the date of the proxy statement for the prior annual meeting of stockholders. However, in the event that the date of an annual meeting of stockholders is more than 30 days following the first anniversary date of the annual meeting of stockholders for the prior year, the submission must be made a reasonable time in advance of the mailing of our proxy statement for the current year. Each nominating recommendation must be accompanied by the information called for by our “Procedures for Securityholders’ Submission of Nominating Recommendations,” which is available upon request. This includes specified information concerning the stockholder or group of stockholders making the recommendation and the proposed nominee, any relationships between the recommending stockholder or stockholders and the proposed nominee and the qualifications of the proposed nominee to serve as director. The recommendation must also be accompanied by the consent of the proposed nominee to serve if nominated and elected and the agreement of the nominee to be contacted by the Committee, if the Committee decides in its discretion to do so.
In addition to being entitled to make a recommendation that the Committee nominate a candidate for election as a director, stockholders are also entitled to nominate candidates themselves for election to the Board at a meeting of stockholders, by providing the necessary information by the applicable deadlines. See the discussion under the heading “Stockholder Proposals and Nominations for the 2024 Annual Meeting” below.
-8-
How do stockholders and others communicate with the Board?
VPG stockholders may communicate with the Board, any Committee of the Board or any individual director, and any interested party may communicate with the non-management directors of the Board as a group, by delivering such communications either in writing addressed to our Corporate Secretary at Vishay Precision Group, Inc., 3 Great Valley Parkway, Suite 150, Malvern, PA 19355; or by e-mail to boardofdirectors@VishayPG.com.boardofdirectors@vpgsensors.com. Communications should not exceed 1,000 words.
All communications must be accompanied by the following information: (i) if the person submitting the communication is a securityholder, a statement of the type and amount of the securities of VPG that the person holds; (ii) if the person submitting the communication is not a securityholder and is submitting the communication to the non-management directors as an interested party, the nature of the person’s interest in VPG; (iii) any special interest, meaning an interest not in the capacity as a stockholder of VPG, of the person in the subject matter of the communication; and (iv) the address, telephone number and e-mail address, if any, of the person submitting the communication. Communications addressed to directors may, at the direction of the directors, be shared with VPG’s management.
DIRECTOR COMPENSATION
Concurrent withUnder the annual meeting,Company's 2017 Non-Employee Director Compensation Plan (as amended, the “NEDC Plan”), each non-employee director receives an annual retainer fee of $30,000$40,000 for serving on the Board, excluding the Chairman. Concurrent with the annual meeting, Mr. ZandmanChairman, who receives an annual retainer fee of $75,000$90,000 for serving as non-Executive Chairmanhis service. In addition, under the NEDC Plan, the chair of the Board. DirectorsAudit Committee receives an annual retainer of $15,000, and the chairs of the Compensation Committee and the Nominating and Governance Committee each receive an annual retainer of $10,000 for their services as chair of their respective committees. Under the NEDC Plan, the retainer fees for the independent directors are paid in equal quarterly installments in advance and beginning with a payment due on the date of the annual meeting. Such annual retainer fees are pro-rated for a partial year of service by a non-employee director elected to the board between annual meetings.
Under the NEDC Plan, each of our non-employee directors was granted RSUs worth $70,000 effective immediately upon their election at the 2022 annual meeting. The number of RSUs granted is based on the average closing price of our common stock on the New York Stock Exchange for the five consecutive trading days immediately preceding the date of grant. These grants will vest on the earlier of the next annual meeting date or May 26, 2023 (the first anniversary of their grant date), subject to each non-employee director's continued service on the board. The grant-date fair value of RSUs is recognized over the vesting period. For directors appointed between annual meetings, the amount of the stock grant is pro-rated for a partial year of service by the non-employee director and vests on the date of the first annual meeting after the date of grant subject to the director’s continued service on the board.
Our director who areis also employeesan employee of VPG do(our Chief Executive Officer) did not receive any additional compensation for theirhis service as directors.a director. See the discussion herein under the heading “Executive Compensation.”
At the time of their initial election to the Board in July 2010, our non-employee directors, excluding the Chairman, each received a founder’s equity grant of RSUs worth $30,000 at the time of grant. At the time of his initial election to the Board in July 2010, the non-Executive Chairman received a founder’s equity grant of RSUs worth $75,000 at the time of grant. All founder’s equity grants of RSUs to non-employee directors vest in three equal annual installments beginning on July 6, 2011. In March 2011, our Compensation Committee approved a grant of RSUs worth $10,000 to all of our non-employee directors, other than our Chairman, effective immediately after the 2011 Annual Meeting, and a grant of RSUs worth $25,000 to our Chairman effective immediately after the 2011 Annual Meeting. These grants are subject to each director’s re-election at the 2011 Annual Meeting; the RSUs will vest on the first anniversary of the 2011 Annual Meeting.
The following table provides information with respect to the compensation paid or provided to the Company’s non-management directors during 2010:2022:
| | | | | | | | | | | | | | | | | | | | |
| | | | Stock | | |
| | | | Awards | | |
Name | | Fees Paid | | (1) | | Total |
Janet Clarke | | $ | 47,500 | | | $ | 71,214 | | | $ | 118,714 | |
Wesley Cummins | | $ | 37,500 | | | $ | 71,214 | | | $ | 108,714 | |
Sejal Gulati (2) | | $ | 37,500 | | | $ | 92,991 | | (3) | $ | 130,491 | |
Bruce Lerner | | $ | 37,500 | | | $ | 71,214 | | | $ | 108,714 | |
Saul Reibstein (4) | | $ | 52,500 | | | $ | 71,214 | | | $ | 123,714 | |
Timothy Talbert | | $ | 47,500 | | | $ | 71,214 | | | $ | 118,714 | |
Marc Zandman (5) | | $ | 90,000 | | | $ | 71,214 | | | $ | 161,214 | |
| | | | | | |
| | Fees Earned | | Stock | | | |
| | and | | Awards | | | |
Name | | | Paid in Cash | | (1) | | Total |
Samuel Broydo | | $ | 30,000 | | $ | 30,000 | | $ | 60,000 |
Saul Reibstein | | $ | 30,000 | | $ | 30,000 | | $ | 60,000 |
Timothy Talbert | | $ | 30,000 | | $ | 30,000 | | $ | 60,000 |
Marc Zandman (2) | | $ | 75,000 | | $ | 75,000 | | $ | 150,000 |
________________________________________
(1) | | Each of the directors was granted RSUs in 2010 under the Vishay Precision Group, Inc. 2010 Stock Incentive Program. The RSUs vest in three equal annual installments, beginning on the first anniversary of the spin-off of the Company from Vishay Intertechnology, Inc. The grant-date fair value of RSUs is recognized over the vesting period. | | | | | | |
(1) | | The amounts presented in the table represent the aggregate grant-date fair value of the RSUs computed in accordance with FASB ASC Topic 718.718 and the assumptions as set forth in Note 10 of our consolidated financial statements in our Annual Report on Form 10-K filed with the SEC on March 1, 2023. |
| | |
(2) | | Sejal Gulati became a director of the Company effective January 1, 2022. |
| | |
(3) | | Includes an RSU grant of $21,777, representing the pro-rata award for Ms. Gulati's board service from her appointment on January 1, 2022 until her election at the Company's annual meeting of stockholders held in 2022. |
| | |
(4) | | Saul Reibstein was appointed Non-Executive Chairman.Chairman of the Board effective January 1, 2023. |
| | |
(5) | | Non-Executive Chairman of the Board through December 31, 2022. |
PROPOSAL ONE
ELECTION OF DIRECTORS
All fiveEight directors serving on the Board are nominated for re-election, with a term expiring at the annual meeting of stockholders in 2012.2024. Each of the nominees has consented to serve if elected.
If any nominee for director becomes unavailable for election, the proxies will be voted for such substitute nominee(s) as the Board may propose. We have no reason to believe that any of the nominees will be unable or unwilling to serve if elected.
The following table summarizes the Company's current directors:
| | | | | | | | | | | | | | | | | |
Name | | Age | | Director Since |
Janet Clarke | | 70 | | 2016 |
Wesley Cummins | | 45 | | 2017 |
Sejal Shah Gulati | | | 49 | | 2022 |
Bruce Lerner | | 57 | | 2017 |
Saul Reibstein (1) | | 74 | | 2010 |
Ziv Shoshani | | 56 | | 2009 |
Timothy Talbert | | 76 | | 2010 |
Marc Zandman (2) | | 61 | | 2010 |
Name | | | Age | | Director Since: |
Samuel Broydo | | 74 | | 2010 |
Saul Reibstein | | 62 | | 2010 |
Ziv Shoshani | | 44 | | 2009 |
Timothy Talbert | | 64 | | 2010 |
Marc Zandman (1) | | 49 | | 2010 |
________________________________________
(1) | | | | | | | | |
(1) | | Saul Reibstein was appointed Non-Executive Chairman of the Board.Board effective January 1, 2023. |
(2) | | Non-Executive Chairman of the Board through December 31, 2022. |
Nominees for Election as Directors – Terms Expiring 20122024
Marc Zandman isserved as the non-executive Chairman of our Board. Board through December 31, 2022. Mr. Zandman has been Vice was elected ExecutiveChairman of the board of directors of Vishay Intertechnology, Inc. (“("Vishay Intertechnology”Intertechnology") since 2003; a Director of Vishay Intertechnology since 2001;in 2011 and President of Vishay Intertechnology Israel Ltd. since 1998. Mr. Zandman was appointed Chief Administration Officer of Vishay Intertechnology as of January 1, 2007 and served as Group Vice President of Vishay Intertechnology Measurements Group from 2002 to 2004. In addition to these positions, Mr. Zandman has served in various other capacities with Vishay Intertechnology since 1984. He is the son of the late Dr. Felix Zandman, the founder and executive chairmanformer Executive Chairman of Vishay Intertechnology who controls approximately 45% of the voting power of our Company.Intertechnology. Mr. Marc Zandman’s dedicated service to Vishay Intertechnology and extensive knowledge of our business give him valuable experience facing issues relevant to our Company.
Ziv Shoshani. For biographical information concerningShoshani is our Chief Executive Officer and President, and has been since our spin-off as an independent public company in July, 2010. He also serves on the Board. Mr. Shoshani see “Executive Officers.”was Chief Operating Officer of Vishay Intertechnology from January 1, 2007 to November 1, 2009. During 2006, he was Deputy Chief Operating Officer of Vishay Intertechnology. Mr. Shoshani was Executive Vice President of Vishay Intertechnology from 2000 to 2009 with various areas of responsibility, including Executive Vice President of the Capacitors and the Resistors businesses, as well as heading the Measurements Group and Foil Divisions. Mr. Shoshani had been employed by Vishay Intertechnology since 1995. He continues to serve on the Vishay Intertechnology board of directors. Mr. Shoshani is a nephew of Ruta Zandman, the widow of the late Dr. Felix Zandman, the founder of Vishay Intertechnology. Mr. Shoshani’s long-standing dedication to our Company, exemplified by his extensive management experience and experience on the Vishay Intertechnology board of directors, provides him with valuable insight into the business and the operation of our Company and makes him a valuable advisor to the Board.
Samuel Broydo.Janet M. Clarke. Ms. Clarke is the founder of Clarke Littlefield LLC, a marketing technologies advisory firm, and has served as its President since June 2003. Prior to founding Clarke Littlefield, she served in executive and management roles at DealerTrack, Inc., a privately held automotive finance technology services company; KnowledgeBase Marketing, a subsidiary of Young and Rubicam, Inc.; and Citibank for Citigroup’s consumer business. Ms. Clarke has served as a director for Cox Enterprises, Inc., a private company, since 2007, where she
also serves as Chair of the Compensation Committee and as a member of the Audit Committee. Ms. Clarke served as a director for Asbury Automotive Group, Inc. (NYSE: ABG) from April 2005 until April 2015, where she also served as a member of the Audit Committee from April 2005 to January 2009 and from October 2012 to May 2014; as a member of the Human Resources and Compensation Committee from April 2005, and was appointed Chair of the Committee in August 2006, to April 2015; and as a member of the Governance Committee from November 2006 to April 2015. Ms. Clarke was also a director and a member of the Audit Committee and the Chair of the Compensation Committee of ExpressJet Holdings, Inc. (NYSE: XJT) from 2001 to 2011. Ms. Clarke earned a Bachelor Degree in Architecture from Princeton University and has completed the Advanced Management Program at the Harvard Business School. Ms. Clarke offers significant business experience to our Board, particularly in the areas of marketing and marketing technology, as a result of the various executive and management positions she has held in corporations of various sizes. In January 2004, Dr. Broydo retiredaddition, given the public and private company directorships that she has held during her career, Ms. Clarke has a broad range of experience as a director and a deep understanding of board oversight and the exercise of appropriate diligence, which makes her a valuable addition to the VPG Board.
Wesley Cummins. Wes Cummins currently serves as the ManagingCEO and Chairman of Applied Blockchain (OTC: APLD) and is one of that company’s cofounders. Mr. Cummins was also the founder and CEO of 272 Capital LP, a registered investment advisor, which focused primarily on investing in technology hardware, software and services companies. Mr. Cummins sold 272 Capital LP to B. Riley Financial (Nasdaq: RILY) in 2021. Following the sale, he joined B. Riley as President of B. Riley Asset Management, the institutional asset management arm of B. Riley. Mr. Cummins has been a technology investor for over 20 years and held various positions in capital markets including positions at investment banks and institutional asset management firms. Prior to founding 272 Capital, Mr. Cummins led technology investing at Nokomis Capital, L.L.C., an investment advisory firm. Mr. Cummins serves as a member of the Board of Sequans Communications S.A. (NYSE: SQNS), a fabless designer, developer and supplier of cellular semiconductor solutions for massive, broadband and critical Internet of Things (IoT) markets. Mr. Cummins holds a BSBA from Washington University in St. Louis where he majored in finance and accounting. Mr. Cummins’s experience in investment banking and capital markets lends a valuable perspective to the VPG Board.
Sejal Shah Gulati. Ms. Gulati is currently the Chief Growth Officer at NOW™, a B2B payments start-up that helps businesses accelerate invoice payments, and has served in such position since October 2021. From January 2021 to October 2021, Ms. Gulati served as Senior Vice President and Growth Leader at Genpact Limited, a NYSE-listed global services firm focused on delivering digital transformation for hundreds of Fortune 500 companies. From 2017 to 2020, she served as General Manager and Vice President of Global Commercial Services for American Express. From 2016 to 2017, Ms. Gulati served as Chief Marketing Officer for EZETAP, a venture-funded start-up company that facilitated B2B payments. Prior to founding and serving from 2006 to 2016 as Chief Executive Officer of Time Inc. India/TAS Analytical Services, a media analytics company serving Time Inc. and Time Warner, Ms. Gulati was the Director of Technology at Applied MaterialsSales and Marketing for a number of Time Inc., publications, where she earned several industry awards for innovation. Ms. Gulati earned her Bachelor of Arts degree from Princeton University and an MBA from Harvard Business School. She previously served as a leading manufacturerTrustee of semiconductorPrinceton University and was the President of the Harvard Business School Alumni Board. Ms. Gulati’s expertise in digital marketing and business management lend a valuable perspective to the VPG Board.
Dr. Bruce Lerner. Dr. Lerner has served as President and CEO of Norit Corp. a materials science company manufacturing equipment. Priorcarbon materials, since May 2022. From 2020 to joining Applied Materials,May 2022, he served as thePresident of HollyFrontier Lubricants and Specialty Products, a division of HF Sinclair Corporation. From 2014 to 2020, he was President and CEO of PeroxyChem, LLC, a global specialty chemicals company. From 2007 to 2014, he served as Vice President and Global Business Head with FMC Peroxygens. From 1993 through 2007, he held several positions in R&D, Marketing, and Management, including SBU General Management, with Engelhard Corp and, post-acquisition, BASF Corporation. Dr. Lerner holds a Bachelor of Technology at ZyMOS Corporation, a semiconductor manufacturer that pioneered Application Specific Integrated Circuits (ASIC) design methodology, from March 1984 to May 1990. Before ZyMOS, Dr. Broydo served as the VLSI Technology Manager for the Xerox Palo Alto Research Center, a computer technology innovator, from August 1979 to September 1983. Dr. Broydo was also the VLSI Technology Group Supervisor at Bell Telephone Laboratories (Bell Labs), which was then a leading communications and electronics research company, from May 1966 to August 1979. Dr. Broydo studied at the Leningrad Polytechnic Institute and received a Masters Degree in Electrical Engineering from Warsaw Polytechnic Institute; he later earned a Ph.D in Electronics and Electrical EngineeringScience degree from the University of Birmingham, England.Massachusetts at Amherst, Master of Science degree in Industrial Chemistry from the University of Central Florida, and Ph.D. in Inorganic Chemistry from Northwestern University. Dr. Broydo’sLerner’s operating experience as a president and CEO of global companies, combined with his technology expertise in electronics and semiconductor technology enablesextensive international business experience, allows him to understand our business and identify growth opportunities. Dr. Broydo also bringsprovide significant contribution to our board the benefit of relevant management and infrastructure experience in solid state electronic research, design, engineering, manufacturing and problem solving.VPG Board.
Saul V. Reibstein. Since 2004, Mr. Reibstein has served as the non-executive Chairman of our Board since January 1, 2023. From December 1, 2013 to December 31, 2016, he served as Executive Vice President, Chief Financial Officer and Treasurer of Penn National Gaming, Inc. (NASDAQ: PENN), now PENN Entertainment, Inc. ("PENN") where he
also served on the board of directors and as chairman of the audit committee from June 2011 until his appointment as Senior Vice President and Chief Financial Officer in November 2013. Mr. Reibstein was employed as an executive advisor by PENN during 2017, after which he retired. Effective March 21, 2018, Mr. Reibstein was again appointed to the board of directors of PENN where he also serves on the audit and compensation committees. From 2004 until joining PENN Entertainment, Inc. as an executive, Mr. Reibstein served as a member of the senior management team of CBIZ, Inc., a New York Stock Exchange-listed professional services company, where, as Executive Managing Director, he manages nine business units in CBIZ’swas responsible for the management of the CBIZ New York City Financial Services Groupoffice operations and the overall international activities of the Financial Services Group. Mr. Reibstein is responsiblethe majority owner of S3 Living, formally named NCP Ventures, LLC, an independent advisory service for acquisitions of accounting firms for CBIZ on a national basis.senior citizens, helping them to identify, select and negotiate the transition to Continuing Care Retirement Communities and 55 and Over Communities. Mr. Reibstein has over 3540 years of public accounting experience, including 11 years serving as a partner in BDO Seidman, a national accounting services firm, where he was the partner in charge of the Philadelphia office from June 1997 to December 2001 and Regional Business Line Leader from December 2001 until September 2004. Mr. Reibstein is a licensed CPA in Pennsylvania and received a Bachelor of Business Administration from Temple University. Mr. Reibstein qualifies as an audit committee financial expert satisfying the rules of the SEC. Mr. Reibstein’s qualification as an audit committee financial expert, as well as his extensive experience as a public accounting partner, make him highly qualified to serve both as a director of our company and a financial expert on the Audit Committee. Mr. Reibstein also has relevant, long-standing experience as a manager of an NYSE-listed company that he will draw upon in advising us with respect to our listing and filing compliance.
-10-
Timothy V. Talbert. Mr. Talbert has served as Senior Vice President of Credit and Originations for Lease Corporation of America (“LCA”), a national equipment lessor, sincefrom July 2000 to the end of 2018, and President of the LCA Bank Corporation, a bank that augments LCA’s funding capacity, sincefrom its founding in January 2006.2006 to the end of 2018. He has retired from both of these positions. Previously, Mr. Talbert was Senior Vice President and Director of Asset Based Lending and Equipment Leasing of Huntington National Bank from 1997 to 2000; and prior to that, served in a variety of positions with Comerica Bank for more than 25 years. Mr. Talbert also serves as a director of Vishay Intertechnology. Mr. Talbert previously served on the board of directors and was a member of the audit committee of Siliconix Incorporated, a NASDAQ-listed manufacturer of power semiconductors of which Vishay Intertechnology owned an 80.4% interest, from 2001 until Vishay Intertechnology acquired the noncontrolling interests in 2005. Mr. Talbert received a Bachelor’s Degree in Economics from University of the Pacific and an MBA from the University of Notre Dame. Mr. Talbert’s previous service as a director and member of the audit and compensation committees of a publicly traded company, as well as his current service on the board of another publicly traded company, allows him to bring an important perspective to the Board. Additionally, Mr. Talbert’s prior service as the president of a federally regulated institution gives him relevant understanding of compliance with complex regulations and current accounting rules adding invaluable expertise to our Board.
-11-The Board of Directors unanimously recommends a vote “FOR ALL” the nominees for election as directors.
REPORT OF THE AUDIT COMMITTEE
Management is responsible for maintaining effective internal control over financial reporting, for assessing the effectiveness of internal control over financial reporting, and for preparing our combined and consolidated financial statements. Our independent registered public accounting firm is responsible for, among other things, performing an independent audit of our combined and consolidated financial statements in accordance with standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and issuing a report thereon. It is the responsibility of the Audit Committee to monitor and oversee these processes.
In fulfilling its oversight duties, the Audit Committee reviewed and discussed with management and our independent registered public accounting firm Ernstfor the fiscal year ended December 31, 2022, Brightman Almagor Zohar & Young LLP,Co., a firm in the Deloitte global network ("Brightman Almagor Zohar & Co."), (a) the audited financial statements for the fiscal year ended December 31, 20102022, (b) the effectiveness of our internal control over financial reporting, and discussed with(c) the independent auditorsother matters required to be discussed under Statement on Auditing Standards No. 61, Communications with Audit Committees, as amended and as adopted bythe applicable requirements of the PCAOB in AU Section 380.and the SEC. These required communications addressed, among other topics, the independent registered public accounting firm’s responsibility under the standards of the PCAOB; critical accounting policies and practices; judgments and accounting estimates; alternative accounting treatments; any significant audit adjustments; any disagreements or difficulties encountered in performing the audit; and other material communications between the independent registered public accounting firm and management. The Audit Committee received from the independent auditors written disclosures regarding the auditor’s independence required by PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, and has discussed with the independent auditors, the independent auditor’s independence. The Audit Committee also considered the compatibility of non-audit services provided to VPG by ErnstBrightman Almagor Zohar & Young LLP,Co., the member firms of Deloitte Touche Tohmatsu Limited and their related entities, and the fees and costs billed or to be billed for these services, with the maintenance of the independent registered public accounting firm’s independence. The Committee has concluded that the provision of the non-audit services by ErnstBrightman Almagor Zohar & Young LLPCo., the member firms of Deloitte Touche Tohmatsu Limited and their related entities in 20102022 did not impair the independent registered public accounting firm’s independence. Under the Audit and Non-Audit Services Pre-Approval Policy that wasas adopted by the Audit Committee, in July 2010, the Audit Committee must pre-approve all audit and non-audit services provided to VPG by the independent registered public accounting firm. The policy sets forth the procedures and conditions for pre-approval of these services. All of the audit and non-audit services provided by the independent registered public accounting firm since adoption of the Audit and Non-Audit Services Pre-Approval Policy were pre-approved by the Committee in accordance with such policy.
Based upon this review and discussions with management and the independent registered public accounting firm, the Audit Committee recommended to the Board of Directors that our audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 20102022 for filing with the Securities and Exchange Commission. The Audit Committee has also appointed ErnstBrightman Almagor Zohar & Young LLPCo. as our independent registered public accounting firm for fiscal year 2011,2023, but the Committee has determineddecided to submit the appointment for ratification by stockholders (see Proposal Two).
Respectfully submitted,
The Audit Committee of the Board of Directors
Saul Reibstein, Chairman
Dr. Samuel Broydo
Chair
Janet Clarke
Timothy Talbert
Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act or the Exchange Act that might incorporate this proxy statement or futurein such filings with the SEC, in whole or in part, the above report shall not be deemed to be “soliciting material” or “filed” with the SEC and shall not be deemed to be incorporated by reference into any such filing.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board is responsible for the selection of our independent registered public accounting firm. The Committee has determined to reappoint the public accounting firm of ErnstBrightman Almagor Zohar & Young LLPCo., a firm in the Deloitte global network ("Brightman Almagor Zohar & Co."), as the independent registered public accounting firm to audit our financial statements for the fiscal year ending December 31, 2011,2023, as well as to audit the effectiveness of our internal control over financial reporting. ErnstBrightman Almagor Zohar & Young LLPCo. has served as our independent registered public accounting firm since the spin-off from Vishay Intertechnology.2019. Although stockholder approval for the appointment of the independent registered public accounting firm is not required, we are submitting the selection of the independent registered public accounting firm to stockholders for their ratification.
Representatives of the firm of ErnstBrightman Almagor Zohar & Young LLPCo. are expected to be present at the annual meeting2023 Annual Meeting and will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions from stockholders.
Under the Audit and Non-Audit Services Pre-Approval Policy that wasas adopted by the Audit Committee, in July 2010, the Audit Committee must pre-approve all audit and non-audit services provided to VPG by the independent registered public accounting firm. The policy sets forth the procedures and conditions for pre-approval of these services. The Audit Committee has pre-approved generally the engagement of the independent registered public accounting firm for services relating to our filings with the SEC (including comfort letters, comment letters and consents for securities offerings); acquisition or disposition related diligence activities; internal control review and compliance; interpretation and compliance with accounting and accounting-related disclosure rules and standards; certain attest services; domestic and international tax planning and compliance; and risk management.
The following table sets forth the aggregate fees billed by ErnstBrightman Almagor Zohar & Young LLP for auditCo., the member firms of Deloitte Touche Tohmatsu Limited and non-audit services rendered to VPGtheir related entities in 20102022 and 2009.2021. These fees are categorized as audit fees, audit-related fees, tax fees, and all other fees. The nature of the services provided in each category is described following the table.
| | | | | | | | | | | |
| 2022 | | 2021 |
Audit fees | $ | 1,765,559 | | | $ | 1,626,429 | |
Audit-related fees | — | | | — | |
Tax fees | 66,662 | | | 2,000 | |
All other fees | 25,102 | | 6,040 | |
Total fees | $ | 1,857,323 | | | $ | 1,634,469 | |
____________________ | | | |
| 2010 | | 2009(1) |
Audit fees | $ | 1,242,000 | | $ | 3,356,000 |
Audit-related fees | | - | | | - |
Tax fees | | 129,000 | | | 230,000 |
All other fees | | 3,000 | | | - |
Total fees | $ | 1,374,000 | | $ | 3,586,000 |
____________________ | | | | | |
(1) | | Fees were not billed separately to VPG for the services set forth herein for the fiscal year ended December 31, 2009. As a result, the amounts included in the table reflect the allocation, as reasonably determined by management, of fees to VPG based on the work performed by Ernst & Young LLP. These amounts relate to Ernst & Young’s audit of the Company’s stand-alone financial statements for the three years ended December 31, 2009. Such services were performed in 2009 in conjunction with the Company’s separation from Vishay Intertechnology. The amounts set forth in this table do not necessarily reflect the fees that would have been billed to us as a separate, publicly-traded company for the fiscal year ended December 31, 2009. |
Audit fees. These fees generally consist of professional services rendered for the audits of the combined and consolidated financial statements of VPG, quarterly reviews, subsidiary or equity investmentstatutory audits, issuance of consents, income tax provision procedures, and assistance with and review of documents filed with the SEC.
Audit-related fees. These fees generally consist of assurance and other services related to the performance of the audit or review of VPG’s financial statements or that are traditionally performed by the independent registered public accounting firm, issuance of consents, and consultations concerning financial accounting and reporting standards.
Tax fees. These fees generally relate primarily to tax compliance, including review and preparation of corporate tax returns, assistance with tax audits, review of the tax treatment for certain expenses, extra-territorial tax analysis, and taxtax-related due diligence relating to acquisitions.diligence. They also include fees for state and local tax planning and consultations with respect to various domestic and international tax matters.
All other fees. These fees generally consist of reviews for compliance with various government regulations, risk management and treasury reviews, and assessments and audits of various contractual arrangements.arrangements, consulting services and subscription to online accounting research tools.
In 2022, VPG did not make use in 2010 of the rule that waives pre-approval requirements for non-audit services in certain cases if the fees for these services constitute less than 5% of the total fees paid to the independent registered public accounting firm during the year.
-13-
The Board recommendof Directors unanimously recommends that you vote “FOR”
the ratification of the appointment of ErnstBrightman Almagor Zohar & Young LLPCo. as our independent registered
public accounting firm for the year ending December 31, 2011.2023.
-14-
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
On April 18, 2011,March 27, 2023, VPG had outstanding _______12,576,178 shares of common stock, each of which entitles the holder to one vote, and _______ 1,022,887shares of Class B common stock, each of which entitles the holder to 10 votes. Voting is not cumulative.
The following table shows the number of shares of VPG common stock and Class B common stock beneficially owned by (a) each director and director nominee, (b) each “Named Executive Officer” identified under “Executive Compensation,” (c) the directors and executive officers of VPG as a group and (d) any person owning more than 5% of VPG common stock or the Class B common stock.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Common Stock | | Class B Common Stock | | |
| | | | | | Right to | | | | | | | | | | |
| | | | | | Acquire | | | | | | | | | | |
| | | | Restricted | | Ownership | | | | | | | | | | |
| | | | Stock Units | | Under | | | | | | | | | | |
| | | | Scheduled | | Options | | | | | | | | | | |
| | | | to vest | | Exercisable | | | | | | | | | | |
| | Shares of | | within 60 | | within 60 | | Percent | | Shares | | Percent of | | Voting |
Name | | Stock (1) | | days | | days | | of Class | | of Stock | | Class | | Power (2) |
Directors and Named Executive Officers | | | | | | | | | | | | | | | | |
Marc Zandman | | 13,283 | (3) | 2,362 | | - | | * | | | 615,593 | (4) | 60.2 | % | | | 27.1 | % |
Ziv Shoshani | | 210,683 | (3) | - | | - | | 1.7 | % | | | 615,487 | (5) | 60.2 | % | | | 27.9 | % |
Saul V. Reibstein | | 16,949 | | 2,362 | | - | | * | | | - | | | | | |
Timothy V. Talbert | | 18,520 | | 2,362 | | - | | * | | | - | | | | | |
Janet Clarke | | 12,179 | | 2,362 | | - | | * | | | - | | | | | |
Bruce Lerner | | 10,036 | | 2,362 | | - | | * | | | - | | | | | |
Wesley Cummins | | 5,624 | | 2,362 | | - | | * | | | - | | | | | |
William M. Clancy | | 29,068 | | - | | - | | * | | | - | | | | | |
Amir Tal | | 7,374 | | - | | - | | * | | | - | | | | | |
Sejal Shah Gulati | | 595 | | 2,362 | | - | | * | | | | | | | | |
| | | | | | | | | | | | | | | | |
All Directors and Executive Officers | | | | | | | | | | | | | | | | |
as a group (10 Persons) | | 321,301 | | 16,534 | | - | | 2.7 | % | | | 615,593 | | 60.2 | % | | | 28.5 | % |
c/o Vishay Precision Group, Inc. | | | | | | | | | | | | | | | | |
3 Great Valley Parkway, Suite 150 | | | | | | | | | | | | | | | | |
Malvern, PA 19355 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Mrs. Ruta Zandman | | 3,010 | (3) | | | | | * | | | 787,096 | (6) | 76.9 | % | | | 34.5 | % |
c/o Vishay Intertechnology, Inc. | | | | | | | | | | | | | | | | |
63 Lancaster Avenue | | | | | | | | | | | | | | | | |
Malvern, PA 19355 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Dimensional Fund Advisors LP (7) | | 948,648 | | | | | | 7.5 | % | | | | | | | | 4.2 | % |
Palisades West, Building One | | | | | | | | | | | | | | | | |
6300 Bee Cave Road | | | | | | | | | | | | | | | | |
Austin, TX 78746 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | Common Stock | | Class B Common Stock |
| | | | | | Right to | | | | | | | | |
| | | | | | Acquire | | | | | | | | |
| | | | Restricted | | Ownership | | | | | | | | |
| | | | Stock Units | | Under | | | | | | | | |
| | | | Scheduled | | Options | | | | | Amount and | | | |
| | | | to vest | | Exercisable | | | | | Nature of | | | |
| | | | within 60 | | within 60 | | Percent | | Beneficial | | Percent of |
Name | | Shares of Stock | | days | | days | | of Class | | Ownership | | Class |
Directors and Executive Officers | | | | | | | | | | �� | | | | |
| | | | | | | | | | | | | | |
Marc Zandman (1) | | 543 | | - | | - | | * | | | 106 | | * | |
Ziv Shoshani | | 12,065 | | 1,255 | | 12,550 | | * | | | - | | - | |
Samuel Broydo | | - | | - | | - | | * | | | - | | - | |
Saul V. Reibstein | | - | | - | | - | | * | | | - | | - | |
Timothy V. Talbert | | 71 | | - | | - | | * | | | - | | - | |
William M. Clancy | | 981 | | - | | - | | * | | | - | | - | |
Thomas P. Kieffer | | 3,261 | | - | | - | | * | | | - | | - | |
| | | | | | | | | | | | | | |
All Directors and Executive Officers | | 16,921 | | 1,255 | | 12,550 | | * | | | 106 | | * | |
as a group (7 Persons) | | | | | | | | | | | | | | |
c/o Vishay Precision Group, Inc. | | | | | | | | | | | | | | |
3 Great Valley Parkway, Suite 150 | | | | | | | | | | | | | | |
Malvern, PA 19355 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Dr. Felix Zandman (2) | | 3,010 | | - | | - | | * | | | 1,018,663 | | 99.4 | % |
c/o Vishay Intertechnology, Inc. | | | | | | | | | | | | | | |
63 Lancaster Avenue | | | | | | | | | | | | | | |
Malvern, PA 19355 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Fidelity Investments (3) | | 1,361,266 | | - | | - | | 11.1 | % | | - | | - | |
82 Devonshire Street | | | | | | | | | | | | | | |
Boston, MA 02109 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Gates Capital Management, Inc. (4) | | 1,162,717 | | - | | - | | 9.4 | % | | - | | - | |
1177 Avenue of the Americas | | | | | | | | | | | | | | |
New York, NY 10036 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
BlackRock Inc. (8) | | 923,538 | | | | | | 7.3 | % | | | | | | | | 4.0 | % |
55 East 52nd Street | | | | | | | | | | | | | | | | |
New York, NY 10022 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Renaissance Technologies LLC (9) | | 638,314 | | | | | | 5.1 | % | | | | | | | | 2.8 | % |
800 Third Avenue | | | | | | | | | | | | | | | | |
New York, NY 10022 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Harvey Partners, LLC (10) | | 707,208 | | | | | | 5.6 | % | | | | | | | | 3.1 | % |
120 White Plains Road, Suite 430 | | | | | | | | | | | | | | | | |
Tarrytown, NY 10591 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Eugenia A. Ames (11) | | | | | | | | | | | 91,161 | | 8.9 | % | | | 4.0 | % |
c/o Mr. Leroy Rachlin | | | | | | | | | | | | | | | | |
Janney Montgomery Scott | | | | | | | | | | | | | | | | |
780 Route 37 West, Suite 130 | | | | | | | | | | | | | | | | |
Toms River, NJ 08755 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Deborah S. Larkin | | | | | | | | | | | 59,016 | | 5.8 | % | | | 2.6 | % |
c/o Mr. Bruce Auerbach | | | | | | | | | | | | | | | | |
World Financial Center | | | | | | | | | | | | | | | | |
270 Madison Avenue, Suite 1503 | | | | | | | | | | | | | | | | |
New York, NY 10016 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Barbara J. Winslow | | | | | | | | | | | 51,873 | | 5.1 | % | | | 2.3 | % |
90 Eighth Avenue, Apt. 8B | | | | | | | | | | | | | | | | |
Brooklyn, NY 11213 | | | | | | | | | | | | | | | | |
____________________
* | | | | | |
* | Represents less than 1% of the outstanding shares of such class or the total voting power, as the case may be. |
(1) | In addition to the amounts shown, each share of Class B common stock held by such holder, if applicable, may be converted into one share of common stock upon the election of such holder. |
(1) (2) | The percentage of total voting power represents voting power with respect to all shares of common stock and Class B common stock, as a single class, calculated on the basis of 10 votes per share of Class B common stock and one vote per share of common stock. |
(3) | Includes 3,010 shares of commons stock held in a family trust, of which Mrs. Ruta Zandman, Mr. Marc Zandman, and Mr. Ziv Shoshani are co-trustees and have shared voting power. |
(4) | Includes 615,487 shares of Class B common stock held in a family trust, of which Mrs. Ruta Zandman, Mr. Marc Zandman, and Mr. Ziv Shoshani are co-trustees and have shared voting power; 53 shares of Class B common stock directly owned by Marc ZandmanMr. Zandman; and 53 shares of Class B common stock owned by MarcMr. Zandman’s minor child. |
-15-
(2)(5) | Includes 44,052615,487 shares of Class B common stock directly owned by Dr. Felix Zandman; 571,435 shares held in family trusts, of which Dr. Zandman is the trustee and over which Dr. Zandman shares voting and dispositive control with Mrs. Ruta Zandman; and 403,176 shares held in a votingfamily trust, of which Dr.Mrs. Ruta Zandman, Mr. Marc Zandman, and Mr. Ziv Shoshani are co-trustees and have shared voting power. |
(6) | Includes 615,487 shares of Class B common stock held in a family trust, of which Mrs. Ruta Zandman, Mr. Marc Zandman, and Mr. Ziv Shoshani are co-trustees and have shared voting power. Pursuant to an agreement relating to the family trust, each of Mrs. Zandman and Messrs. Zandman and Shoshani is required to cause shares controlled by the trusteetrust to be voted in support of the election of Mr. Zandman and overMr. Shoshani as directors of the Company. Also includes 171,609 shares of Class B common stock held by third parties that are subject to a voting agreement pursuant to which Dr.Mrs. Zandman has sole voting control. The shares held inthe power to direct the voting trust consist of 223,862 shares deposited by the Estate of Mrs. Luella B. Slaner and 179,314 shares deposited by Mrs. Slaner’s children and various trusts for the benefit of Mrs. Slaner’s children and grandchildren. The voting trust agreement that governs the voting trust will remain in effect until the earlier of (x) February 1, 2050 or (y) the death or resignation or inability to act of Dr. Zandman, or (z) Dr. Zandman’s election to terminate the trust.such shares. |
| |
(3) (7) | Based on information provided in a Schedule 13G13G/A filed on February 14, 20112023 by Fidelity Investments.Dimensional Fund Advisors LP. According to the Schedule 13G, Fidelity Investments13G/A, Dimensional Fund Advisors LP, in its capacity as an investment advisor, may be deemed to have the sole power to vote or to direct the vote with respect to 1,361,266932,391 shares of common stock;stock and may also be deemed to have the sole power to dispose or direct the disposition with respect to 1,361,266 shares.of 948,648 shares of common stock. |
|
(4)(8) | Based on information provided in a Schedule 13G13G/A filed on February 11, 2011January 31, 2023 by Gates Capital Management,BlackRock, Inc. According to the Schedule 13G, Gates Capital Management,13G/A, BlackRock, Inc. may be deemed to have sole power to vote or direct the vote with respect to 1,162,717897,582 shares of common stock;stock and may also be deemed to have the sole power to dispose or direct the disposition with respect to 1,162,717923,538 shares of common stock. |
(9) | Based on information provided in a Schedule 13G/A filed on February 13, 2023 by Renaissance Technologies LLC. According to the Schedule 13G/A Renaissance Technologies LLC may be deemed to have sole power to vote or direct the vote with respect to 595,473 shares of common stock and may also be deemed to have the sole power to dispose or direct the disposition with respect to 638,314 shares of common stock. |
(10) | Based on information provided in a Schedule 13G/A filed on February 14, 2023 by Harvey Partners, LLC. According to the Schedule 13G/A Harvey Partners, LLC may be deemed to have sole power to vote or direct the vote with respect to 668,780 shares of common stock and may also be deemed to have the sole power to dispose or direct the disposition with respect to 707,208 shares of common stock. |
(11) | Includes 91,161 shares of Class B common stock that are subject to a voting agreement pursuant to which Mrs. Ruta Zandman may direct the voting of such shares. |
Delinquent Section 16(a) Beneficial Ownership Reporting Compliance
Reports
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers and persons who beneficially own more than ten percent of our common stock to report their ownership of, and transactions in, our stock in filings with the SEC. Copies of these reports are also required to be supplied to VPG. VPG believes, based solely on a review of the copies of such reports received, that our directors and executive officers and persons who beneficially own more than ten percent of our common stock complied with all applicable Section 16(a) reporting requirements during the year ended December 31, 2010.2022, except that Mr. Cummins filed one late Form 4 reporting a purchase of shares due to administrative error.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee was at any time during 20102022 an officer or employee of VPG or any of the Company’s subsidiaries nor was any such person a former officer of VPG or any of the Company’s subsidiaries. In addition, no Compensation Committee member is an executive officer of another entity at which one of the Company’s executive officers serves on the board of directors.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Information ConcerningThis Compensation Discussion and Analysis describes the Company’s executive compensation program and explains how the Compensation Committee made compensation decisions for our Named Executive Officers
The named executive officers of VPG, along with their respective ages and positions with VPG, as of April 18, 2011, (the “NEOs”) who are as follows:
identified below:
Name | | Age | | Position | |
|
Named Executive Officer | Position |
Ziv Shoshani | | 44 | | President and Chief Executive Officer and Director |
William M. Clancy | | 48 | | Executive Vice President and Chief Financial Officer |
Thomas P. KiefferAmir Tal | | 58 | | Senior Vice President and Chief TechnologyAccounting Officer |
Ziv Shoshani is our President and Chief Executive Officer. He also serves on our Board. Mr. Shoshani was Chief Operating Officer of Vishay Intertechnology from January 1, 2007 to November 1, 2009. During 2006, he was Deputy Chief Operating Officer. Mr. Shoshani was Executive Vice President of Vishay Intertechnology from 2000 until July, 2010 with various areas of responsibility, including Executive Vice President of the Capacitors and the Resistors businesses, as well as heading the Measurements Group and Foil Divisions. Mr. Shoshani was employed by Vishay Intertechnology since 1995 until July, 2010 and has been a member of the Vishay Intertechnology board of directors since 2001. Mr. Shoshani is a nephew of Dr. Felix Zandman, the founder and executive chairman of Vishay Intertechnology who controls approximately 45% of the voting power of our Company.
William M. Clancy is our Executive Vice President and Chief Financial Officer. Mr. Clancy was Corporate Controller of Vishay Intertechnology from 1993 to November 1, 2009. He became a Vice President of Vishay Intertechnology in 2001 and a Senior Vice President of Vishay Intertechnology in 2005. Mr. Clancy also has served as Corporate Secretary of Vishay Intertechnology from 2006 to 2009 and was Assistant Corporate Secretary of Vishay Intertechnology from 2002 to 2006. From June 16, 2000 until May 16, 2005 (the date Vishay Intertechnology acquired the noncontrolling interest in Siliconix Incorporated), Mr. Clancy served as the principal accounting officer of Siliconix. Mr. Clancy was employed by Vishay Intertechnology from 1988 until July 2010.
Thomas P. Kieffer is our Senior Vice President and Chief Technical Officer. Mr. Kieffer was promoted to the position of Senior Vice President – Corporate R&D for Vishay Intertechnology’s Measurements Group and Foil Resistors Division on January 1, 2008. Prior to that, Mr. Kieffer was Senior Vice President of Vishay Intertechnology’s Micro-Measurements and Load Cells Divisions. He became Division Head of Vishay Intertechnology’s Measurements Group Division in 2000 and from 2002 through 2005 was involved in several acquisitions of measurements businesses. Mr. Kieffer was employed by Vishay Intertechnology from 1984 until July, 2010.
Officers serve, at the discretion of the Board, until the meeting of the Board next following each annual meeting of stockholders, subject to their rights under any contracts of employment described under “Compensation Discussion and Analysis.”
Compensation Discussion and Analysis
Overview
Until July 6, 2010, when we were spun off as an independent public company, we were a subsidiary of Vishay Intertechnology. Prior to the spin-off, the compensation and strategic affairs committees of Vishay Intertechnology’s board of directors (the “VSH committees”) developed our compensation framework, which is influenced by historical practices at Vishay Intertechnology as well as by recommendations from compensation consultants retained by the VSH committees in anticipation of the spin-off. Please see the discussion under the heading “Role of the Compensation Consultant” herein.
Since July 6, 2010, the Compensation Committee, in consultation with our Board, has been responsible for reviewing and recommending to the Board employment agreements with our executive officers; reviewing and approving annual corporate goals and objectives for our executive officers; determining annual base salaries, performance bonuses and long-term incentive awards for our executive officers; and administering our equity-based plans.
Compensation Philosophy Generallyand Objectives
In formulating the compensation arrangements for our executive officers, the VSH committeeswere guided generally by the executive compensation philosophy adopted by the Vishay Intertechnology compensation committee. The VSH committees believed that VPG’s compensation packages should combine base salary with an opportunity for annual cash bonuses and include long-term equity awards designed to align the interests of senior management with the long-term interests of our stockholders. In developing the compensation of our executive officers, however, the VSH committees also took into account the fact that following the spin-off, we would be a substantially smaller company than our former parent. In the case of Mr. Shoshani, the VSH committees took into special consideration the opportunities that Mr. Shoshani chose to forego at Vishay Intertechnology in order to lead VPG, his demonstrated ability to run our Company and serve as our chief executive officer, and the incentives necessary to retain Mr. Shoshani going forward.
-17-
Our Compensation Committee, which was formed immediately after the spin-off, reviewed the VSH committees’ executive compensation determinations. The Compensation Committee, with the approval of our full Board, implemented the executive compensation arrangements approved by the VSH committees by entering into formal employment agreements with each of our executive officers. See the discussion under the headings “Compensation Components” and “Employment Agreements” for a description of the terms of the employment agreements.
Our executive compensation packages, including severance benefits, areprogram is designed to assist us in recruiting, retaining and motivating key employees who can function effectively both in periods of recessionour NEOs and economic strength, and provideproviding our executivesNEOs with an appropriate level of job security,compensation, commensurate with their contributions to the Company and their tenure.Company. The Compensation Committee believes that the elements of our executive compensation program, as well as the mix of these elements in relation to total compensation, reward intrinsically sound management decisions and do not encourage undue risk taking to enhance short-term profitability at the expense of the long-term financial health and viability of the enterprise. EachCompany. The Compensation Committee seeks to mitigate any compensation-related risk by:
•providing a meaningful portion of total compensation in the form of equity incentives that are earned over multiple years (to encourage a long-term focus); and
•capping annual cash bonuses for our NEOs at 200% of base salary for Mr. Shoshani, at 105% of base salary for Mr. Clancy, and at 75% for Mr. Tal (to provide appropriate balance between short- and long-term objectives).
Please see the discussion below under the headings “Performance Bonus” and “Equity Compensation” for further detail regarding performance bonus and long-term equity incentive targets.
Considerations for Setting 2022 Compensation
The Compensation Committee considered a number factors when setting each NEO’s compensation, including competitive market data derived from our peer group, individual and Company performance, and the NEO’s role and responsibilities. The Compensation Committee reviewed competitive market data that was derived from our 2022 compensation peer group, which is composed of the following companies
| | | | | |
Badger Meter, Inc. | Mercury Systems, Inc. |
CSW Industrials, Inc. | ONTO Innovation Inc. |
CTS Corp. | Hurco Companies, Inc. |
Daktronics Inc. | Luna Innovations, Inc. |
Faro Technologies Inc. | Amtech Systems, Inc. |
ESCO Technologies Inc. | nFlight, Inc. |
| |
| |
| |
The Compensation Committee did not align NEOs’ compensation to a particular benchmark level but considered pay data as one point of reference when setting NEO compensation.
Role of the Compensation Consultant
As permitted under its charter, the Compensation Committee retained Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant for 2022. In particular, Meridian advised the Compensation Committee on our 2020 compensation peer group and provided the Compensation Committee an assessment of the compensation of our Senior Vice President and Chief Accounting Officer against peer group practices.
The Compensation Committee determined that the work performed by Meridian did not give rise to a conflict of interest and that Meridian was independent of management. In making this determination, the Compensation Committee considered the factors outlined in the NYSE listing standardsrelating to compensation consultant independence, including whether the compensation consultant has provided other services to the Company, the magnitude of the projected fees payable to the compensation consultant in the context of the compensation consultant's total revenues, the absence of personal or business relationships between members of the Compensation Committee or the Company’s executive officer’s targetofficers and the compensation consultant, and whether any member of the compensation consultant’s team owns, or otherwise has an investment or interest in, the Company’s common stock.
Compensation Components
The following are the primary components of our executive compensation program:
•Base salary;
•Annual performance bonus (payable in cash); and
•Annual long-term equity incentive compensation is equal(payable in RSUs).
In addition to his target short-term performance bonus, with the exceptionforegoing, our NEOs are eligible to receive severance, certain perquisites and customary welfare and retirement benefits. Each of the primary components of our CEO, whose target long-term equity incentiveexecutive compensation exceeds his target performance bonus. Theprogram, and the methodology used to determine the amounts, and mix, of such compensation, are discussed below.
Base Salaries
Minimum base salaries for our NEOs are established in their respective employment agreements, the material terms of which are summarized below under the heading “Employment Agreements.” Each year, the Compensation Committee believesreviews the appropriateness of each NEO’s base salary. In determining whether to increase base salary of an NEO, the Compensation Committee considers the following factors: competitive market data derived from our peer group, individual and Company performance, and the NEO’s role and responsibilities. We believe that this mixsetting our NEOs' base salaries based on the foregoing factors helps us to retain our NEOs, while appropriately motivating them to fulfill their core responsibilities and duties.
Variations in base salary among our NEOs reflect the differences in their respective positions, duties and responsibilities.
Effective January 1, 2022, the annual base salaries for our NEOs were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| 2022 | 2021 | | |
Executive | | Base Salary | | Base Salary | | % increase (3) |
Ziv Shoshani | | | | | | |
President and Chief Executive Officer (1) | | $ | 720,053 | | | $ | 705,270 | | | 6.0 | % |
William M. Clancy | | | | | | |
Executive Vice President and Chief Financial Officer | | $ | 391,250 | | | $ | 376,202 | | | 4.0 | % |
Amir Tal | | | | | | |
Senior Vice President and Chief Accounting Officer (2) | | $ | 294,010 | | | $ | 265,437 | | | 15.0 | % |
____________________
| | | | | |
(1) | Pursuant to Mr. Shoshani’s employment agreement, his 2022 base salary was 2,420,092 New Israeli Shekels ("NIS") and his 2021 base salary was 2,283,106 NIS. The U.S. Dollar amount shown in the table is based on the weighted average exchange rate for 2022 of 3.36099 and for 2021 of 3.23721. |
(2) | Pursuant to Mr. Tal's employment agreement, his 2022 base salary was 988,165 NIS and his 2021 base salary was 859,274. The U.S. Dollar amount shown in the table is based on the weighted average exchange rate for 2022 of 3.36099 and for 2021 of 3.23721. |
(3) | Percentage increase is based on local currency amounts. |
Effective January 1, 2023, Mr. Shoshani received an increase in his base salary to 2,516,896 NIS, or $770,400, converted using a weighted average budgeted exchange rate for 2023 of long-term equity incentive compensation3.267; Mr. Clancy received an increase in
his base salary to $406,900; and shorter-term performance bonus opportunity discourages excessive risk-takingMr. Tal received an increase in the short term and rewards appropriate focus on achievementhis base salary to 1,027,692 NIS or $314,567, converted using a weighted average budgeted exchange rate for 2023 of both short-term and long-term objectives.3.267.
Annual Performance Philosophy
Cash Bonus
Our compensation philosophy is intended2022 annual performance cash bonus program was designed to dovetail withincent our philosophy regarding evaluation of operating performance.
NEOs to achieve certain predetermined objectives set by the Compensation Committee and the Board.
The 2022 annual performance bonuses and long-term equity incentive awards for our executive officers arecash bonus payouts were based on achievement of objectivestwo equally weighted corporate objectives: adjusted operating margin and adjusted EBITDA. The target levels of adjusted operating margin and adjusted EBITDA for 2022 were set forth in their respective employment agreements. Our executive officers’ employment agreements provide that their 2010 performance bonusesat $48.5 million and long-term equity incentive awards will be determined based on two measures of Company performance: “adjusted operating margin” and “adjusted EBITDA.” $65.6 million, respectively.
Adjusted operating margin and adjusted EBITDA mean, respectively, operating margin and earnings before interest, taxes, depreciation and amortization, in each case determined in accordance with U.S. GAAP accounting principles generally accepted in the United Statesand adjusted to exclude various items that management believes are not indicative of the intrinsic operating performanceoutside of our business,core operations, including purchase accounting inventory adjustments, COVID-19 impacts, start-up costs, restructuring and related severance costs, fixed asset or inventory write-downs and related purchase commitment charges, impairment charges for goodwill or indefinite-lived intangible assets,foreign exchange gains and individually material one-time gains or charges.
In 2011 and going forward, the performance bonuses and long-term equity incentive awards for Messrs. Shoshani and Clancy will continue to be based onlosses. The Board determined that adjusted operating margin and adjusted EBITDA for 2022 should exclude the impact of $1.6 million for purchase accounting adjustments, $0.2 million for start-up costs, $1.5 million in accordancerestructuring costs, and $0.1 million impact of government subsidies, net with costs incurred by the termsCompany as a result of their respective employment agreements. Pursuant to Mr. Kieffer’s employment agreement, his performance bonuses and long-term equity incentive awards will be based on adjusted operating margin andthe COVID-19 pandemic. Additionally, adjusted EBITDA as well as certain individualexcludes the impact of $(3.6) million of foreign currency exchange rates on assets and financialliabilities.
These performance goals approved by the Compensation Committee and relating to operations for which he is responsible.
The Compensation Committee, in consultation with the Chairman of the Board, undertakes an annual review of the executive compensation program to ensure that it continues to encourage and reward satisfaction of our operational and financial objectives. The Compensation Committee also consults with our Chief Executive Officer regarding compensation of our other executive officers.
Role of the Compensation Consultant
To assist in formulating the initial compensation arrangements of our executive officers in connection with the spin-off, the VSH committees retained the services of two compensation consulting firms, PricewaterhouseCoopers LLP (“PwC”) and Farient Advisors LLC (“Farient”). In the course of their engagement, these compensation consultants also met with Mr. Shoshani and members of the management of Vishay Intertechnology to obtain their input and views. In 2009 and early 2010, the consultants assisted the VSH committees in the formulation of the compensation arrangements for our executive officers, particularly for Mr. Shoshani. They assessed the reasonableness and interrelation of the individual elements of the compensation packages and provided input to the VSH committees with respect to then current compensation practices among comparable public companies and in comparable transactions. PwC had been previously engaged by the Vishay Intertechnology compensation committee to assist it in executive compensation matters. Farient was recommended to the VSH committees by management of Vishay Intertechnology.
Our Compensation Committee reviewed the executive compensation determinations of the VSH committees and ratified the executive compensation framework developed by them. The Compensation Committee continues to review our executive compensation packages and expects to engage independent compensation consultants as the Compensation Committee deems appropriate.
Compensation Components
The primary components of the compensation packages for our executive officers, as prescribed by their employment agreements, are:
Base salary;
Annual performance bonus (payable in cash); and
Annual long-term equity incentive compensation (payable in RSUs).
-18-
In addition to the foregoing, our executive officers are eligible to receive severance and customary welfare and retirement benefits. Each of the primary components of executive compensation, and the methodology used to determine the amounts and mix of such compensation, are discussed herein.
Base Salaries
The base salaries of our executive officers were determined based on an analysis of executive compensation at comparable public companies identified by the compensation consultants identified herein. We believe that setting our executive officers’ base salaries within a market-competitive range of base salaries offered to similarly situated executives of comparable public companies will help us to retain our executive officers, while appropriately motivating them to fulfill their core responsibilities within VPG. Based on input from the compensation consultants in 2009 and early 2010, the market-competitive ranges were determined by the VSH committees as the 25th and 75th percentiles of compensation data for such comparable companies. These ranges were: $367,000 to $463,000 for the chief executive officer; $216,000 to $259,000 for the chief financial officer; and $192,000 to $307,000 for the chief technology officer. The variations in base salary of each of our executive officers reflect the differences in their respective positions, duties and responsibilities.
The base salaries approved for our executive officers for 2010 are as follows:
| | 2010 Base |
Name | | | Salary (1) |
Ziv Shoshani | | | | |
President and Chief Executive Officer | | $ | 435,000 | (2) |
William M. Clancy | | | | |
Executive Vice President and Chief Financial | | | | |
Officer | | | 250,000 | |
Thomas P. Kieffer | | | | |
Senior Vice President and Chief Technical Officer | | | 225,000 | |
____________________
(1) | 2010 Base Salaries for our executive officers became effective on July 6, 2010 (the date that we completed our spin-off from Vishay Intertechnology). |
|
(2) | Pursuant to Mr. Shoshani’s employment agreement, his base salary is paid in New Israeli Shekels (NIS) based on a fixed exchange rate determined in accordance with his employment agreement. |
On March 15, 2011, the Compensation Committee of the Board approved the following base salaries for our executive officers, effective January 1, 2011: $478,500 (Mr. Shoshani); $262,500 (Mr. Clancy); and $230,625 (Mr. Kieffer).
Performance Bonus
Annual performance bonuses are designed to incent our executive officers to achieve certain predetermined objectives set by the Compensation Committee and Board. Similar to base salary, the VSH committees believed that it would be appropriate and desirable to establish target performance bonuses within a market-competitive range of bonuses granted to similarly situated executives at comparable public companies. We believe that setting target performance bonuses in this fashion is necessary to attract and retain executive officers, as well as to appropriately motivate them to make meaningful contributions to our business.
The performance bonuses for our executive officers for 2010 were based on achievement of two corporate objectives, consisting of our adjusted operating margin and our adjusted EBITDA. The target levels of adjusted operating margin and EBITDA for 2010 were set at $18 million and $28 million, respectively, and one-half of the bonus potential for each executive officer is attributable to the achievement of each of these performance objectives. These targets were intended to represent challenging, but reasonable, goals, the achievement of which will contribute meaningfully to long-term stockholder value creation as well as the short-term success of our business.
Each executive was eligible to receive a performance bonus, for each 2010 performance objective, if our performance with respect to that objective equaled at leastIf less than 80% of the targeted amount.target for a performance goal were attained, the NEOs would not receive any portion of their performance bonus tied to such performance goal. The table hereinbelow sets forth the payments that each executive officer wasof Messrs. Shoshani, Clancy, and Tal would have been eligible to receive (expressed as a percentage of his base salary) pursuant to our annual performance bonus plan and his respective employment agreement with respect to each 20102022 performance objective, based upon various levels of actual performance.
Potential Performance Bonus Payments for Messrs. Shoshani, Clancy, and Tal for Each Performance Objective, in Relation to Target Performance*
| | Percentage of Target Performance Objective | | | | | |
| | Achieved | | | Maximum |
| | | | | | | | | | | | | | | | Performance |
| | 80% of | | 80—100% of | | 100—150% of | | Bonus for |
| | Target | | Target | | Target | | Each |
| | Performance | | Performance | | Performance | | Performance |
Executive | | | Objective | | Objective | | Objective | | Objective |
Ziv Shoshani | | | | | | | | | | | | | | | | | | | |
President and Chief | | 25 | % | | | | 25—37.5 | % | | | | 37.5—100 | % | | | | 100 | % | |
Executive Officer | | | | | | | | | | | | | | | | | | | |
William M. Clancy | | | | | | | | | | | | | | | | | | | |
Executive Vice | | 13.35 | % | | | | 13.35—20 | % | | | | 20—40 | % | | | | 40 | % | |
President and Chief | | | | | | | | | | | | | | | | | | | |
Financial Officer | | | | | | | | | | | | | | | | | | | |
Thomas P. Kieffer | | | | | | | | | | | | | | | | | | | |
Senior Vice President | | 10 | % | | | | 10—15 | % | | | | 15—30 | % | | | | 30 | % | |
and Chief Technical | | | | | | | | | | | | | | | | | | | |
Officer | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Percentage of Target Performance Objective | | | |
| | | Achieved | | Maximum |
| | | | | | | | | | | | | | | Performance |
| | | 80% of | | 80—100% of | | 100—150% of | | Bonus for |
| | | Target | | Target | | Target | | Each |
| | Performance | | Performance | | Performance | | Performance | | Performance |
Executive | | Objective | | Objective | | Objective | | Objective | | Objective |
Ziv Shoshani | | | | | | | | | | | | | | | | | |
President and | | Adjusted EBITDA | | 25 | % | | | 25-50 | % | | | | 50-100 | % | | 100 | % | |
Chief Executive Officer | | Adjusted Operating Margin | | 25 | % | | | 25-50 | % | | | | 50-100 | % | | 100 | % | |
| | | | | | | | | | | | | | | | | |
William M. Clancy | | | | | | | | | | | | | | | | | |
Executive Vice President | | Adjusted EBITDA | | 21.7 | % | | | 21.7-32.5 | % | | | | 32.5-52.5 | % | | 52.5 | % | |
and Chief Financial Officer | | Adjusted Operating Margin | | 21.7 | % | | | 21.7-32.5 | % | | | | 32.5-52.5 | % | | 52.5 | % | |
| | | | | | | | | | | | | | | | | | |
Amir Tal | | Adjusted EBITDA | | 13.35 | % | | | 13.35-25 | % | | | | 25-37.5 | % | | 37.5 | % | |
Senior Vice President and | | Adjusted Operating Margin | | 13.35 | % | | | 13.35-25 | % | | | | 25-37.5 | % | | 37.5 | % | |
Chief Accounting Officer | | | | | | | | | | | | | | | | | | |
____________________
* | | | | | |
* | All performance bonus payments set forth in this table are expressed as a percentage of the applicable executive officer’s base salary and represent the potential payments to our executive officers with respect to each performance objective. In 2010, there were two performance objectives for our executive officers: adjusted operating margin and adjusted EBITDA. |
The aggregate target performance bonuses for each of Messrs. Shoshani, Clancy, and Kieffer,Tal, pursuant to their respective employment agreements and taking into account both 2010all 2022 performance objectives, were 75%100%, 40%65%, and 30%50% of their respective base salaries. The maximum 20102022 performance bonuses payable to Messrs. Shoshani, Clancy, and KiefferTal were 200%, 80%105%, and 60%75% of their respective base salaries. We believe that the target and maximum performance bonus levels and the corresponding payouts are such that they do not encourage excessive risk-taking and represent appropriate compensation in light of each executive officer’s responsibilities.
The Board and the Compensation Committee determined that in 2010, our 2022 adjusted operating marginEBITDA was $19.8$62.0 million (or 110.17%94.5% of the target) and our 2022 adjusted EBITDAoperating margin was $29.5$47.2 million (or 105.27%97.2% of the target). In March 2011,Accordingly, for the executive officersadjusted EBITDA target, Messrs. Shoshani Clancy and Tal each received a cash bonus equal to 43.1%, 29.5%, and 21.8% of their respective base salaries. For the adjusted operating margin target, Messrs. Shoshani, Clancy, and Tal each received a cash bonus equal to 46.5%, 31.0% and 23.4% of their respective base salaries.
The total of these performance bonuses with respect to 2010 performance that arefor Messrs. Shoshani, Clancy and Tal is reflected under the “Non-Equity Incentive Compensation Plan” column of the Summary Compensation Table herein.
Equity Compensation
Our executive compensation frameworkprogram uses the grant of long-term equity awards as the primary tool for aligning the interests of our executive officersNEOs with the long-term interests of our stockholders. In establishingThe NEOs’ employment agreements established the following target and maximum valuesvalue of long-termtheir respective annual equity grants.
•On or about January 1 of each year, each NEO receives equity awards ("Annual Equity Grant"), with an aggregate value equal to the VSH committees used as a reference pointfollowing percentages of their base salary: 175% (with respect to Mr. Shoshani), 75% (with respect to Mr. Clancy), and 40% (with respect to Mr. Tal). The Annual Equity Grant, which is in the market-competitive rangeform of long-term equity awards granted to similarly situated executive officers of comparable public companies. The long-term equity award targets for our executive officers were established to compensate each of them at the appropriate market-competitive median level according to their respective positions, duties and responsibilities, as well as to recognize their individual ability to affect stockholder value creation.
Like the performance bonuses described herein, the 2010 long-term equity incentive awards wererestricted stock units (“RSUs”), is sized based on achievementthe average closing price of our stock on the New York Stock Exchange for the five consecutive trading days immediately preceding January 1 of the same two corporate objectives discussed herein with respect to 2010 performance bonuses. Each executive is eligible to receive a long-term equity award, payable in RSUs, for each 2010 performance objective, if actual performance with respect to that objective equaled at least 80%year of grant.
•50% of the targeted performance. The table herein sets forthAnnual Equity Grant is in the awards that each executive officer is eligible to receive (expressed as a percentageform of his base salary) with respect to each 2010 performance objective, based upon various levels of actual performance.
-20-
Potential Long-Term Equity Incentive Award for Each Performance Objective, in Relation to Target Performance*
| | Percentage of Target | | | | |
| | Performance Objective | | Maximum |
| | Achieved | | Performance |
| | 80% of | | 80—100% of | | Bonus for |
| | Target | | Target | | Each |
| | Performance | | Performance | | Performance |
Executive | | | Objective | | Objective | | Objective |
Ziv Shoshani | | | | | | | | | | | | | |
President and Chief | | 25 | % | | | 25—50 | % | | | | 50 | % | |
Executive Officer | | | | | | | | | | | | | |
William M. Clancy | | | | | | | | | | | | | |
Executive Vice | | | | | | | | | | | | | |
President and Chief | | 10 | % | | | 10—20 | % | | | | 20 | % | |
Financial Officer | | | | | | | | | | | | | |
Thomas P. Kieffer | | | | | | | | | | | | | |
Senior Vice President | | | | | | | | | | | | | |
and Chief Technical | | 7.5 | % | | | 7.5—15 | % | | | | 15 | % | |
Officer | | | | | | | | | | | | | |
____________________
* | The long-term equity incentive awards set forth in this table are expressed as a percentage of the applicable executive officer’s base salary and represent the potential awards to our executive officers with respect to each performance objective. In 2010, there were two performance objectives for our executive officers: adjusted operating margin and adjusted EBITDA. |
Pursuant to each employment agreement, 25%performance-based RSUs ("PBRSUs") which vest on January 1 of the third year following the date of grant, but only to the extent that performance criteria have been achieved and provided the executive remains continuously employed by us through such date. The performance criteria are determined by the Compensation Committee and are based on metrics set forth in the 2022 Stock Incentive Plan.
•50% of the Annual Equity Grant is in the form of time-vested RSUs granted in respect of any long-term incentive equity award willwhich vest on the applicable grant date and the remaining RSUs will vest in three equal annual installments beginning on the first anniversaryJanuary 1 of the third year following the date of grant date,provided the executive remains continuously employed by us through such date.
•The Annual Equity grant is subject to accelerated vesting upon a change of control of the Company, an event giving rise to a severance entitlement, death or disability.
With respect to each performance criterion, and as illustrated below, (i) 50% of the total number of PBRSUs subject to such criterion will vest if 80% of the applicable objective is met, and (ii) an additional 2.5% of the total number of PBRSUs subject to such criterion will vest for each additional full 1% (between 80% and 100%) of the applicable performance objective that is met.
2022 Annual Equity Grant Components
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Performance-Based RSUs for Each Performance Objective |
Executive | | Time-Vested RSUs (# of RSUs) | | 80% of Target (# of PBRSUs) | | 80—100% of Target (# of PBRSUs) |
Ziv Shoshani | | 18,266 | | 4,566.75 | | 4,566.75 | - | 9,133.5 |
William M. Clancy | | 3,944 | | 986 | | 986 | - | 1,972 |
Amir Tal | | 1,705 | | 426 | | 426 | - | 853 |
Vesting of the PBRSUs is subject to the achievement over the three-year performance period ending on December 31, 2024 of two equally weighted corporate objectives: cumulative Adjusted Net Earnings and cumulative Adjusted Free Cash.
“Adjusted Net Earnings” means the Company’s net profits after taxes, including the impact of acquisitions, if any, adjusted for reconciling items as set forth in the associated years' annual reports to stockholders. “Adjusted Free Cash” means the amount of cash generated from the Company’s operations in excess of capital expenditures and net of proceeds from the sale of assets, including the impact of acquisitions, if any.
The maximum aggregatetarget levels of Adjusted Net Earnings and Adjusted Free Cash over that three-year period from 2022-2024 were set at $118,292,000 and $77,663,000, respectively. The Company's achieved performance against each of these performance goals determines the vesting for fifty percent (50%) of the total number of PBRSUs granted to each
NEO. These targets are intended to represent challenging, but reasonable, goals, the achievement of which will contribute meaningfully to long-term equity incentive awards payablestockholder value creation as well as the long-term success of our business.
Each executive who received a 2022 Annual Equity Grant is eligible to Messrs. Shoshani, Clancyvest in a portion of the PBRSUs included within the 2022 Annual Equity Grant to the extent that our performance with respect to one or both of the objectives equals at least 80% of the targeted amount. If the 80% threshold target for a performance goal is not attained, the executive would not receive any portion of the PBRSUs attributable to such target and Kieffer,that portion of the grant would be forfeited. The table above sets forth the vesting of the PBRSUs that each executive officer would be eligible to receive (expressed as a number of shares) pursuant to theirhis respective employment agreements, are equalagreement with respect to each 2022 performance objective, based upon various levels of actual performance.
The Annual Equity Grants awarded to each of the target amounts of such awards: 100%, 40% and 30% of their respective base salaries. In March 2011, the Compensation Committee and the Board approved grants to the executive officersNEOs in accordance with the target (and maximum) awards provided for in the executive officers’ respective employment agreements. These awards2022 are included in the “Stock Awards” column in the Summary Compensation Table herein.
In January 2020, Mr. Shoshani, Mr. Clancy and Mr. Tal were granted PBRSUs that were subject to vesting based on two performance conditions - Adjusted Net Earnings and Adjusted Free Cash - measured over a three-year period ended December 31, 2022. The Compensation Committee determined, after reviewing the Company’s performance during this measurement period, that the Company had achieved 88.3% of the target for Free Cash and 108.7% of the target for Adjusted Net Earnings. Accordingly, for the PBRSUs granted to our NEOs in January 2020, 88.3% of the PBRSUs for the Free Cash target vested and 100% of the PBRSUs for the Adjusted Net Earnings target vested.
Employment Agreements
The Company entered into employment agreements in 2011, which have been subsequently amended, with Messrs. Shoshani Clancy, and Kieffer that are consistent withClancy. In March 2020, the terms set forth in offer lettersCompany entered into by the Company and eachan employment agreement with Mr. Tal. Each of the executives (as disclosed in the Company’s Registration Statement on Form 10 and approved by the VSH committees). The employment agreements provideprovides for the specific targets and payment opportunities, as expressed as a percentage of the applicable employee’s respective base salary, in connection with each element of our executive compensation package discussed hereinabove under the heading “Compensation Components.headings “Annual Performance Cash Bonus” and “Equity Compensation.”
Each employment agreement became effective on July 6, 2010Upon expiration of the current applicable term, Messrs. Shoshani's, Clancy's, and has an initial term of three years. TheTal's employment agreements automatically renew for terms of one additional year unless earlier terminated by the Company or by the executive officer. Each of the employment agreements provides for certain severance payments to the executive officers in the event of termination of their employment as described in greater detail under the heading “Potential Payments Upon a Termination or Change in Control.”
The employment agreements also contain customary non-solicitation and non-competition covenants, which remain in effect for 24 months following termination of employment with respect to Mr. Shoshani and for 12 months following termination of employment with respect to Messrs. Clancy and Kieffer.Tal. The agreements also entitle the executives to additional perquisites and other personal benefits as the Board, through its Compensation Committee, determine are reasonable and consistent with the Company’s overall compensation program.
Special Spin-Off Payments and Awards
In connection with the spin-off, each of our executive officers received a “founder’s equity grant” in the form of RSUs with an aggregate value of $800,000 (with respect to Mr. Shoshani) or $100,000 (with respect to each of Messrs. Clancy and Kieffer). The number of RSUs granted in connection with each founder’s equity grant was calculated, in accordance with the term sheets entered into with each executive officer, by dividing the aggregate value of the award by the average closing price of our common stock on the New York Stock Exchange during the 10 consecutive trading days immediately following the spin-off from Vishay Intertechnology. Messrs. Clancy and Kieffer’s awards were approved by the Board and granted shortly after the spin-off. Mr. Shoshani’s grant, the terms of which are included in his employment agreement, was deferred to accommodate resolution of certain Israeli tax matters, including receipt of a ruling from the Israeli tax authorities relating to the income tax treatment of Mr. Shoshani’s equity compensation. These founder’s equity grants are shown under the caption “Stock Awards” in the Summary Compensation Table herein.
In addition to the founder’s equity grant, and pursuant to the terms of his employment agreement, Mr. Shoshani received a cash bonus of $400,000 in connection with completion of the spin-off. Pursuant to the Employee Matters Agreement discussed under the heading “Certain Relationships and Related Party Transactions,” Mr. Shoshani was also awarded stock options and RSUs under the Company’s 2010 Stock Incentive Program which replace certain stock options and RSUs issued to him by Vishay Intertechnology that were cancelled in connection with the spin-off. These replacement options and RSUs were issued to Mr. Shoshani in March 2011, after the resolution of certain Israeli tax matters.
Deferred Compensation and Pension Plans
Vishay Intertechnology maintained, among other benefit plans, a non-qualified defined benefit plan (the “Vishay Non-Qualified Retirement Plan”); a qualified defined contribution plan (the “Vishay Employee Savings Plus Plan”); and a non-qualified deferred compensation plan (the “Vishay Key Employee Wealth Accumulation Plan” or “VSH KEWAP”), for highly compensated employees, including executive officers. In anticipation of the spin-off, we formed parallel plans that provide for substantially similar benefits. In connection with the spin-off, Vishay Intertechnology caused the accounts and underlying assets and liabilities under the Vishay Intertechnology plans for our employees who were participating in those plans to be transferred to our corresponding plans or, in the case of Vishay Non-Qualified Retirement Plan and VSH KEWAP assets, from a rabbi trust established by Vishay Intertechnology to a rabbi trust that we established. In addition, prior to the spin-off, Vishay Intertechnology, through a subsidiary, maintained the Measurements Group Inc. Tax Deferred Savings Plan (a qualified defined contribution plan) that was transferred in its entirety to us in connection with the spin-off.
With the exception of Mr. Clancy, none of our executive officersNEOs participated in the Vishay Non-Qualified Retirement Plan. The Vishay Non-Qualified Retirement Plan was frozen effective December 31, 2008, and no further benefits have accrued beyond that date. In connection with the spin-off, we established a corresponding plan, the “VPG Non-Qualified Retirement Plan”,Plan,” to preserve the benefits accumulated by certain of our employees under the Vishay Non-Qualified Retirement Plan. Only active employees who participated in the Vishay Non-Qualified Retirement Plan as of December 31, 2008 are eligible to participate in the parallel VPG plan. In connection with the freezing of
the Vishay Non-Qualified Retirement Plan, Mr. Clancy became eligible to participate in a supplemental matching program under the Vishay Employee Savings Plus Plan, pursuant to which amounts were deposited in his VSH KEWAP account. This supplemental matching program will continuecontinues under the corresponding VPG plans.
Every “highly compensated” employee (as such term is defined under ERISA),who has been designated as an Eligible Executive by the administrator of the plan, including our executive officers, is eligible to participate in our non-qualified deferred compensation plan (the “VPG KEWAP”). The VPG KEWAP permits eligible employeesexecutives to make voluntary contributions and provides for discretionary Company contributions. In addition, we are required to make contributions on behalf of Mr. Clancy to his VPG KEWAP account as described above.
Perquisites
We provide executive officers with perquisites and other personal benefits that VPG and the Compensation Committee believebelieves are reasonable and consistent with our overall executive compensation program. These perquisites are not intended, however, to constitute a material portion of the executive’s compensation packages.package. In general, the perquisites, while not integral to the performance of an executive’s duties, must bear some relationship to the executive’s employment and be of perceived benefit to VPG. The Compensation Committee periodically reviews the levels of perquisites and other personal benefits provided to named executive officers.our NEOs.
Individual Considerations
Compensation among the Company’s senior executivesNEOs reflects a general assessment of their contributions to the Company’s current performance and its prospects for growth in the future. Our successes have always been fueled by the drivers of technological innovation, continuous efficiency improvement and synergistic acquisition. Mr. Shoshani leads in all these areas and his compensation reflects a perception by the Compensation Committee that the areas of his responsibility will continue to be the key drivers of our future performance.
Other Considerations Regarding Executive Compensation
Israeli benefits
Mr.Messrs. Shoshani isand Tal are employed by Vishay Advanced Technologies, Ltd., an Israeli subsidiary of VPG, and is a residentare residents of Israel. As a result, he isthey are entitled to certain benefits that are generally available to employees in Israel on a non-discriminatory basis, but are not afforded to the other named executive officers,Mr. Clancy, including:
-22-
- •advanced training fund, 7.5% of base salary