What is the primary purpose of the PSU grants announced in this filing?

The primary purpose of the PSU grants is to incentivize and reward KLA Corporation's named executive officers based on the company's future financial performance, specifically its non-GAAP diluted Earnings Per Share (EPS), and their continued service to the company.

How is the vesting of these PSUs determined?

Vesting is determined by two key factors: the Company's achievement of specific non-GAAP diluted EPS targets over defined performance periods (ending in 2024, 2025, and 2026) and the executive's continued employment with KLA through the applicable vesting dates.

What happens to the PSUs in the event of a change of control?

In the event of a change of control, the performance conditions for ongoing tranches will be assessed based on EPS up to the end of the fiscal quarter preceding the change of control. If the PSU awards are assumed or replaced by the acquiring entity, they will continue to be subject to their original vesting terms. If they are not assumed, then any performance-vested PSUs will vest immediately prior to the change of control.

Are dividend equivalents paid on these PSUs?

Yes, executives are entitled to receive dividend equivalents on their PSUs. However, these dividend equivalents are paid in cash and are subject to the same vesting conditions as the underlying PSUs. This means dividend equivalents will only be paid if and when the executive fully satisfies the vesting conditions for the PSUs.

KLAC 8-K: Leadership Changes

Summary

KLA Corporation (KLAC) filed an 8-K on August 4, 2022, disclosing the Compensation Committee's approval of performance-based restricted stock units (PSUs) for its named executive officers. These PSUs are structured into three tranches with multi-year performance periods (ending June 30, 2024, 2025, and 2026). Vesting is contingent on the Company's non-GAAP diluted Earnings Per Share (EPS) performance against set goals, with the potential to earn up to 250% of the target number of PSUs per tranche, and also requires continued service through specific vesting dates. These awards are designed to incentivize long-term executive performance aligned with company financial targets.

Key Highlights

1Grant of performance-based restricted stock units (PSUs) to named executive officers approved on August 4, 2022.
2PSUs are divided into three tranches with performance periods ending in June 2024, June 2025, and June 2026.
3Vesting is tied to the achievement of specific non-GAAP diluted EPS goals and continued service.
4Executives can earn between 0% and 250% of the target number of PSUs per tranche based on performance.
5Vested PSUs will be settled in KLA Corporation common stock.
6The filing also announced a quarterly cash dividend of $1.30 per share, payable on September 1, 2022.

KLA CORP 8-K Report, Executive Changes (Aug 5, 2022)

Summary

Key Highlights

Frequently Asked Questions