Ipg Photonics Corp DEF 14A, filed May 9, 2024

Ipg Photonics Corp (IPGP)

DEF 14A 2024-05-09 For: 2024-06-18

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Added on June 12, 2026

About this DEF 14A

Ipg Photonics Corp filed this DEF 14A on May 9, 2024.

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¨						Preliminary Proxy Statement
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þ						Definitive Proxy Statement
¨						Definitive Additional Materials
¨						Soliciting Material Pursuant to Section 240.14a-12


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			Page
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS			1
202 4 ANNUAL LETTER			2
ABOUT IPG			4
PROXY STATEMENT VOTING ROADMAP			5
PROPOSAL 1: ELECTION OF ELEVEN DIRECTOR S			8
Director Qualifications			9
Director Nominees			11
CORPORATE GOVERNANCE			17
Board Practices, Policies and Processes			18
Board Roles and Responsibilities			21
Board Structure			24
Standing Committees and Board Committee Membership			25
DIRECTORS			27
Board Refreshment and Composition			27
Director Compensation			30
PROPOSAL 2: ADVISORY VOTE TO APPROV E OUR EXECUTIVE COMPENSATION			33
Compensation Discussion and Analysis			34
202 3 Compensation of Named Executive Officers			36
Compensation Committee Report			45
Executive Compensation Tables			46
PROPOSAL 3: RATIFY DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2024			53
OTHER INFORMATION			55
Audit Committee Report			55
Common Stock Ownership			56
CEO Pay Ratio			58
Pay Versus Performance			59
Questions and Answers About the Meeting and Voting			63
Additional Information			67


NET SALES			OPERATING INCOME


Welding Revenue			Return of Capital to Stockholders
			$223M Repurchased 2.1 million shares



DATE AND TIME June 18, 2024 10:00 a.m. (Eastern Time)	LOCATION IPG Photonics Corporation 377 Simarano Drive Marlborough, Massachusetts 01752	WHO CAN VOTE Only stockholders of record at the close of business on April 29, 2024 may vote at the Annual Meeting



INTERNET Go to www.investorvote.com/ipgp or scan the QR code contained in the attached proxy card	TELEPHONE 1-800-652-VOTE (8683)	MAIL Mark, sign, date and promptly mail the enclosed proxy card in the postage-paid envelope



As permitted by the rules of the United States Securities and Exchange Commission (the “SEC”), we are making this Proxy Statement and Annual Report on Form 10-K available to stockholders electronically via the Internet at investor.ipgphotonics.com. On or about May 9, 2024, we will mail to most of our stockholders a notice (the “Notice”) containing instructions on how to access this Proxy Statement and our Annual Report and to vote via the Internet or by telephone. Other stockholders, in accordance with their prior requests, will receive e-mail notifications of how to access our proxy materials and vote via the Internet or by telephone, or will be mailed paper copies of our proxy materials and a proxy card on or about May 9, 2024.



This Proxy Statement contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and we intend that such forward-looking statements be subject to the safe harbors created thereby. For this purpose, any statements contained in this Proxy Statement except for historical information are forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. The forward-looking statements included herein are based on current expectations of our management based on available information and involve a number of risks and uncertainties, all of which are difficult or impossible to accurately predict and many of which are beyond our control. As such, our actual results may differ significantly from those expressed in any forward-looking statements. Factors that may cause or contribute to such differences include, but are not limited to, those discussed in more detail in the section titled “Risk Factors” and elsewhere in our Annual Report and other filings with the SEC. We undertake no obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.


DIRECTOR INDEPENDENCE	BOARD REFRESHMENT	AGE	GENDER DIVERSITY


8/11 directors nominees are independent*	8 years Average Tenure	63 years Average Age	36% Female



PRACTICES WE EMPLOY						PRACTICES WE AVOID

ü Align our officer pay with performance ü Balance annual and long-term incentives ü Use long-term incentives to link executive pay to Company performance ü Caps on annual incentive compensation and performance-based equity payouts ü Annual risk assessment of compensation program ü Independent compensation consultant ü Stock ownership requirements ü Clawbacks on executive compensation ü Anti-pledging policy ü Anti-hedging policy applicable to all employees and directors						û No guaranteed annual bonuses û No excise tax gross-ups for change in control payouts û No excessive perquisites û No severance for “cause” terminations û No single-trigger change in control payments or benefits û No stock option repricing without stockholder approval û No supplemental executive retirement plans, executive pensions or excessive retirement benefits


AC Audit Committee	●	Chair
CC Compensation Committee	●	Member
NCGC Nominating and Corporate Governance Committee	*	Appointment expected on June 5, 2024
IND Independent director under Nasdaq and SEC rules



The Board recommends that you vote FOR each director nominee named in this Proxy Statement.


	Board of Directors	Audit	Compensation	Nominating and Corporate Governance
Meetings held in 2023	6	9	8	6
Written consents in 2023	7	0	2	0



BOARD OVERSIGHT OF RISK The Board recognizes that effectively monitoring and managing risk are essential to the successful execution of the Company’s strategy. The Board has oversight for risk management at IPG with a focus on the most significant risks facing the Company, including strategic, operational, financial, cybersecurity and compliance risks. In its analysis, the Board rates risks against several criteria including materiality, probability and the speed at which the risk can impact IPG, from short to long-term. The risks are scored and those with the highest ratings are overseen by the Board and its committees, along with mitigation efforts. The scorings may change year to year based upon internal or exogenous factors. After review and recommendation by the NCGC, the Board allocates risk oversight responsibility among the full Board, the independent directors acting as a group and the three standing Board committees as described below. In its review of risks, the Board and its committees may seek the advice of outside advisors or experts depending upon the particular risk. Throughout the year, the Board, the independent directors and the Board committees dedicate a portion of their meetings to review and discuss specific risk topics in greater detail.



FULL BOARD Our Board as a whole reviews risk management practices and a number of significant risks in the course of its reviews of corporate strategy, management reports and reports from outside experts and professional advisors.



AUDIT COMMITTEE The Audit Committee oversees the policies, processes and risk relating to the financial statements, financial reporting processes, auditing and compliance risks. The Audit Committee discusses with management the Company’s risk assessment and risk management practices and, when reviewing and approving the annual audit plan for the Company’s internal audit function, prioritizes audit focus areas based on their potential risk.	COMPENSATION COMMITTEE The Compensation Committee oversees risk associated with management resources, including executive retention and non-CEO succession planning. It reviews the Company’s executive compensation practices, their effectiveness at linking executive pay to performance and aligning the interests of our executives and our stockholders, without encouraging excessive risk taking. The Compensation Committee annually reviews management’s assessment of compensation risk.	NOMINATING AND CORPORATE GOVERNANCE COMMITTEE The NCGC oversees risk related to the Company’s governance structure and processes, and risks arising from related person transactions. It reviews processes and risk related to Board succession planning, authority delegated to management and certain compliance risk. It considers and recommends allocation of risk oversight, including business, ESG and other risks, to the Board.



INDEPENDENT DIRECTORS As a group, the independent directors oversee risks related to CEO succession planning and CEO compensation.


Financial Performance Highlights



Proposal 1			Election of Eleven Directors



MEMBERS			FUNCTIONS:
Jeanmarie Desmond (Chair) Gregory Beecher Gregory Dougherty Agnes Tang Meetings in 2023: 9			•Providing oversight of financial management, the internal auditor function and the independent auditor. •Providing oversight with respect to our internal controls including that management is maintaining an adequate system of internal control such that there is reasonable assurance that assets, systems and processes are safeguarded and that financial reports and certain other datasets are properly prepared; that there is consistent application of generally accepted accounting principles; and that there is compliance with management’s financial reporting policies and procedures. •Pre-approving audit and permissible non-audit services by our independent auditor, reviewing and discussing our annual and quarterly financial statements and related disclosures. •Meeting periodically with the independent auditor, management and internal auditor function (including in private sessions) to review their work and confirm that they are properly discharging their respective responsibilities. •Appointing the independent auditor. For more information on Audit Committee activities in 2023, see the Audit Committee Report on page 55 of this Proxy Statement and Proposal 3: Ratify Deloitte & Touche LLP as Our Independent Registered Public Accounting Firm for 2024 on page 53.



MEMBERS			FUNCTIONS:
Gregory Dougherty (Chair) Jeanmarie Desmond Eric Meurice John Peeler Meetings in 2023: 8			•Reviewing and recommending to the independent directors the CEO’s base salary and opportunities for annual and long-term incentive compensation. •Reviewing and approving compensation recommendations by the CEO for the other executive officers, including base salaries, annual performance bonuses, long-term incentive awards, severance benefits, perquisites and employment agreements. •Setting our compensation philosophy and composition of the group of peer companies used for a comparative analysis of executive compensation. •Reviewing and recommending for approval by the Board the compensation for non-employee directors. •Administering the equity compensation plans under which we compensate our executive officers, other key employees and directors. •Retaining and approving the compensation of an independent compensation consultant firm for matters related to executive officer and director compensation, and outside legal counsel to provide advice on compensation-related matters. •Assessing the independence of any compensation consultant, external legal counsel, accounting or other advisors. •Preparing the Compensation Committee Report included in this Proxy Statement on page 45 and overseeing management’s risk assessment of compensation for all employees and compensation-related risks as delegated by the Board.



MEMBERS			FUNCTIONS:
Eric Meurice (Chair) Gregory Beecher Michael Child John Peeler Meetings in 2023: 6			•Overseeing matters of corporate governance, including the evaluation of the performance and practices of the Board. •Developing and recommending criteria for Board membership. •Reviewing possible candidates for the Board and recommending director nominees to the Board for approval. •Overseeing the process for the performance evaluations of the Board and its committees. •Engaging in Board succession planning to ensure boardroom skills are aligned with IPG’s long-term strategic plan. •Reviewing and recommending director orientation, stock ownership guidelines, delegation of authority to management and insider trading policy, and considering questions of possible conflict of interest, including related party transactions, as such questions arise. •Reviewing and recommending risk oversight responsibilities, including ESG matters, of the Board and its committees and of the independent directors as a group.



DIRECTOR TENURE AND RETIREMENT AGE POLICIES •Our Board recognizes the importance of periodic Board refreshment and maintaining an appropriate balance of tenure, experience and perspectives on the Board. •We believe it is desirable to maintain a mix of longer-tenured, experienced directors with institutional memory and understanding of our business and culture and newer directors with fresh perspectives. However, we do not impose director tenure limits. •The Board believes that directors should not have an expectation of being re-nominated annually and that the NCGC’s assessment is a key component of its director nomination process. •In connection with the Board’s annual self-assessment and director nomination processes, the NCGC considers upcoming retirements, the average tenure and overall mix of individual director tenures of the Board, the overall mix of the skills, knowledge, experience and diversity, each individual director’s performance and contributions to the work of the Board and its committees, the personal circumstances and other time commitments of directors, along with other factors the Board deems appropriate. •The Board believes that, as an alternative to term limits, non-management directors should submit their resignation from the Board upon attaining the age of 72 and on each subsequent anniversary. The Board then considers the needs and circumstances confronting the Board and, upon recommendation of the NCGC, determines whether to accept or reject the resignation. •Our Board’s age resignation policy is intended to facilitate our Board’s recruitment of new directors with appropriate skills, experience and backgrounds and provides for an orderly transition of leadership on our Board, while also taking into consideration the importance of institutional knowledge and unique perspectives.



Character and Integrity			Must be an individual of the highest character and integrity
Leadership Experience			Demonstrated excellence, leadership and significant experience in their field of endeavor
Financial Literacy and Commitment to Representing Stockholders			Ability to read and understand financial statement fundamentals and commitment to representing the long-term interests of the Company’s stockholders, while keeping in perspective the interests of the Company’s customers, employees and the public
Independence and Constructive Collegiality			Must have a demonstrated ability to think and act independently as well as the ability to work constructively in a collegial environment. Must satisfy independence criteria of the SEC and Nasdaq, where independence is desired
Age			A potential director (excluding any incumbent) cannot be less than 21 or greater than 72 years of age (unless a waiver of the requirement is obtained)
Limit on Other Public Boards			Independent directors – 3 (or 4 with Board approval) CEO - 1


Board Diversity Matrix

		As of April 29, 2024		As of April 29, 2023
Total Number of Directors		10		10
Part I: Gender Identity		Female	Male	Female	Male
	Directors	4	6	3	7
Part II: Demographic Background
	Asian	1	—	1	—
	White	3	6	2	7


	Amount
Board Retainer	$	40,000
Non-Executive Chair Retainer	$	80,000
Audit Committee Retainers
Chair	$	25,000
Non-Chair	$	12,500
Compensation Committee Retainers
Chair	$	22,500
Non-Chair	$	10,000
NCGC Retainers
Chair	$	17,500
Non-Chair	$	7,500
Annual Equity Award	$	250,000


Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)(1)	Total ($)
Gregory Beecher(2)	59,648	374,857	434,505
Michael Child	47,500	249,957	297,457
Jeanmarie Desmond	73,125	249,957	323,082
Gregory Dougherty	75,000	249,957	324,957
Kolleen Kennedy(2)	20,000	249,988	269,988
Eric Meurice	61,425	249,957	311,382
Natalia Pavlova	40,000	249,957	289,957
John Peeler	136,667	249,957	386,624
Thomas Seifert(3)	6,042	—	6,042
Agnes Tang	51,459	249,957	301,416


Name	Unvested Restricted Stock Units (#)	Total Number of Shares Underlying Option Awards Held (#)
Gregory Beecher	2,999	—
Michael Child	2,188	17,078
Jeanmarie Desmond	2,188	—
Gregory Dougherty	2,188	3,259
Kolleen Kennedy	2,296	—
Eric Meurice	2,188	14,378
Natalia Pavlova	2,188	—
John Peeler	2,188	7,576
Agnes Tang	2,188	—



1	2	3
The Compensation Committee engages independent compensation consultant to review compensation of non-employee directors as compared to peer group	The Compensation Committee evaluates the independent compensation consultant's report, compensation trends and need to retain and attract high caliber non-employee directors consistent with comparable companies	The Board considers changes to non-employee directors compensation program recommended by the Compensation Committee



Proposal 2			Advisory Vote to Approve Our Executive Compensation



The Board recommends that you vote FOR approval of our executive compensation.


EUGENE SCHERBAKOV, PH.D.			Chief Executive Officer
TIMOTHY P.V. MAMMEN			Senior Vice President and Chief Financial Officer
ANGELO P. LOPRESTI			Senior Vice President, General Counsel and Secretary
TREVOR D. NESS			Senior Vice President, Sales and Strategic Business Development
ALEXANDER OVTCHINNIKOV, PH.D.			Senior Vice President, Chief Technology Officer



PRACTICES WE EMPLOY						PRACTICES WE AVOID
ü Align our NEO Pay with Performance: Strong links of compensation to Company performance and stockholder returns for annual and long-term incentives. Annual bonus tied to revenue and net income and long-term incentives include PSUs. ü Balance Annual and Long-Term Incentives: Incentive programs provide an appropriate balance of annual and long-term incentives and include multiple measures of performance. ü Use Long-Term Incentives to Link Executive Pay to Company Performance: Over half of NEO pay consists of long-term incentives. ü Cap Annual Incentive Compensation and Performance-Based Equity Payouts. ü Annual Risk Assessment of Compensation Program. ü Independent Compensation Consultant: The Compensation Committee retains a compensation consultant, who is independent and without conflicts of interest with the Company. ü Stock Ownership Requirements: Officers and directors are subject to stock ownership guidelines to further align their interests with those of our stockholders. All of our NEOs substantially exceed the ownership guidelines. ü Clawbacks on Executive Compensation: We maintain a compensation recovery policy covering cash and equity. ü Anti-Pledging Policy. ü Anti-Hedging Policy Applicable to All Employees and Directors.						û No Guaranteed Annual Bonuses: Our annual incentive compensation plan is performance-based and does not include any minimum payout levels. û No Excise Tax Gross-Ups: We do not provide excise tax gross reimbursements for change in control payouts. û No Excessive Perquisites: We provide limited perquisites to our NEOs. û No Severance For “Cause” Terminations. û No Single-Trigger Change in Control Payments or Benefits. Severance and equity acceleration for NEOs generally require a “double-trigger” of both a change-in-control and qualifying termination of employment. û No Stock Option Repricing without Stockholder Approval. Our equity plans prohibit repricing underwater stock options. û No Supplemental Executive Retirement Plans, Executive Pensions or Excessive Retirement Benefits.


Stockholder Feedback
At our 2023 annual meeting of stockholders, our stockholders overwhelmingly approved our executive compensation structure in a “say-on-pay” advisory vote, with nearly 97% of votes cast in favor of our executive compensation structure. After considering the results of the 2023 vote, the Compensation Committee determined to maintain its general pay philosophy and practices. At our annual meeting in 2023, our stockholders recommended an advisory "say-on-frequency" proposal to hold “say-on-pay” advisory votes every year and, therefore, we elected to submit the advisory “say-on-pay” proposal to our stockholders on an annual basis. Proposal 2 described herein is the "say-on-pay" advisory vote.						Say-on-pay approval during last stockholder vote (2023)


		Target(1)							Actual
	Annual Base Salary	Target Annual Incentive %		Corporate Performance Target (weighting)		Personal Performance Target (weighting)		Target Annual Incentive $	Financial			Personal		Final Award as % of Target		Final Award $
									Performance %			Performance %
Eugene Scherbakov	$864,889	110	%	75	%	25	%	$951,378	—	%	+	70	%	17.5	%	$166,491
Timothy Mammen	$538,700	80	%	75	%	25	%	$430,960	—	%	+	95	%	23.8	%	$102,353
Angelo Lopresti	$485,500	80	%	75	%	25	%	$388,400	—	%	+	95	%	23.8	%	$92,245
Trevor Ness	$477,100	80	%	75	%	25	%	$381,680	—	%	+	95	%	23.8	%	$90,649
Alexander Ovtchinnikov	$481,000	80	%	75	%	25	%	$384,800	—	%	+	95	%	23.8	%	$91,390


Name	Equity Incentive as a Percentage of Base Salary (%)	Service-Based Restricted Stock Units (#)	Operating Margin PSUs (at Target) (#)	Operating Margin PSUs Range (Based upon Achievement) (#)	Organic Revenue Growth PSUs (at Target) (#)	Organic Revenue Growth PSUs Range (Based upon Achievement) (#)
Eugene A. Scherbakov	525	16,837	8,418	0 - 16,836	8,418	0 - 16,836
Timothy P.V. Mammen	300	6,160	3,080	0 - 6,160	3,080	0 - 6,160
Angelo P. Lopresti	275	5,089	2,544	0 - 5,088	2,544	0 - 5,088
Trevor Ness	275	5,001	2,500	0 - 5,000	2,500	0 - 5,000
Alexander Ovtchinnikov	275	5,042	2,521	0 - 5,042	2,521	0 - 5,042



Advanced Energy Industries, Inc.	Albany International Corp.	Barnes Group, Inc.

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IDEX Corporation	ITT, Inc.	Kadant Inc.

Littlefuse, Inc.	Lumentum Holdings Inc.	MKS Instruments, Inc.

National Instruments, Inc.	Nordson Corporation	Novanta, Inc.

Onto Innovation Inc.	Watts Water Technologies, Inc.


Name and Principal Position	Year	Salary ($)	Stock Awards ($)(1)	Non-Equity Incentive Plan Compensation ($)(2)	All Other Compensation ($)(3)	Total ($)
Eugene Scherbakov Chief Executive Officer(4)(5)	2023	864,890	4,416,887	166,491	277,284	5,725,552
	2022	785,174	4,999,721	540,200	310,425	6,635,520
	2021	803,200	4,406,457	1,919,896	155,298	7,284,851
Timothy Mammen Chief Financial Officer and Senior Vice President	2023	538,700	1,616,014	102,353	11,832	2,268,899
	2022	520,500	1,561,276	270,900	11,082	2,363,758
	2021	505,300	1,534,952	909,600	10,632	2,960,484
Angelo Lopresti Senior Vice President, General Counsel and Secretary	2023	485,500	1,334,917	92,245	15,444	1,928,106
	2022	469,100	1,289,844	244,100	12,762	2,015,806
	2021	455,400	1,267,921	819,700	12,312	2,555,333
Trevor Ness Senior Vice President, Sales and Strategic Business Development	2023	477,100	1,311,831	90,649	11,832	1,891,412


Alexander Ovtchinnikov Senior Vice President, Chief Technology Officer	2023	481,000	1,322,718	91,390	15,444	1,910,552
	2022	464,700	1,277,805	241,800	14,694	1,998,999
	2021	451,200	1,256,284	812,100	14,244	2,533,828


Name	Grant Date	Estimated Possible Payouts Under Non-Equity Incentive Plan Awards ($)(1)(2)			Estimated Future Payouts Under Equity Incentive Plan Awards (#)(3)			All Other Stock Awards: Number of Shares of Stock or Units (#)(4)	Grant Date Fair Value of Stock and Option Awards ($)(5)
		Threshold	Target	Maximum	Threshold	Target	Maximum
Eugene Scherbakov	2/17/2023	465,310	951,378	2,140,600	—	—	—	—	—
	2/17/2023	—	—	—	8,418	16,836	33,672	—	2,208,378
	2/17/2023	—	—	—	—	—	—	16,837	2,208,509
Timothy Mammen	2/17/2023	188,545	430,960	969,660	—	—	—	—	—
	2/17/2023	—	—	—	3,080	6,160	12,320	—	808,007
	2/17/2023	—	—	—	—	—	—	6,160	808,007
Angelo Lopresti	2/17/2023	169,925	388,400	873,900	—	—	—	—	—
	2/17/2023	—	—	—	2,554	5,088	10,176	—	667,393
	2/17/2023	—	—	—	—	—	—	5,089	667,524
Trevor Ness	2/17/2023	166,985	381,680	858,780	—	—	—	—	—
	2/17/2023	—	—	—	2,500	5,000	10,000	—	655,850
	2/17/2023	—	—	—	—	—	—	5,011	655,981
Alexander Ovtchinnikov	2/17/2023	168,385	384,880	865,980	—	—	—	—	—
	2/17/2023	—	—	—	2,521	5,042	10,084	—	661,359
	2/17/2023	—	—	—	—	—	—	5,042	661,359