Form 4: Applied Materials CEO Awarded Equity Compensation

Applied Materials' President and CEO, Gary E. Dickerson, acquired performance share units and restricted stock units as part of his compensation package.

Summary

• Gary E. Dickerson, President and CEO of Applied Materials, Inc. (AMAT), acquired 82,004 performance share units (PSUs) on December 11, 2025, which are scheduled to vest on December 19, 2025, subject to continued employment.
• An additional 81,912 performance share units were acquired on December 11, 2025, with vesting scheduled for December 19, 2028, contingent on achieving specified performance goals and continued employment. The actual number of shares vesting can range from 0% to 200% of this target amount.
• 27,304 restricted stock units (RSUs) were also acquired on December 11, 2025, scheduled to vest in three equal annual installments beginning December 19, 2026, subject to continued employment.
• Following these transactions, Mr. Dickerson beneficially owns 1,908,959 shares of common stock, which includes previously reported unvested performance share units and restricted stock units.
• The total number of previously reported unvested units is 451,922, with various vesting schedules between December 2025 and December 2027, some of which are performance-based with a 0% to 200% payout range.

Sentiment

Score: 7

Explanation: The filing indicates a routine executive compensation event involving equity awards, which generally aligns management's interests with shareholders. This is a neutral to slightly positive event, reflecting standard corporate governance practices rather than a significant operational or financial development.

Positives

• The acquisition of performance share units and restricted stock units aligns the CEO's long-term interests with those of the shareholders, as a significant portion of his compensation is tied to company performance and stock value.
• The equity awards are part of a structured compensation plan, indicating a clear framework for executive incentives.

Risks

• The actual number of shares received from performance share units can range from 0% to 200% of the target amount, depending on the achievement of specified performance goals, introducing variability in the CEO's ultimate compensation.
• All vesting of the acquired units is subject to continued employment through the respective vesting dates, posing a risk of forfeiture if employment ceases.

Future Outlook

The filing primarily details future vesting schedules for equity awards, with specific dates in December 2025, December 2026, December 2027, and December 2028. The actual number of shares for performance-based units will depend on future achievement of specified performance goals.

Industry Context

This filing represents a routine disclosure of executive equity compensation, a common practice in the semiconductor equipment industry and broader technology sector to incentivize leadership and align their interests with long-term company performance.

Comparison to Industry Standards

• The use of performance share units (PSUs) and restricted stock units (RSUs) as a significant component of executive compensation is a standard practice across major technology and manufacturing companies, including peers in the semiconductor industry.
• The structure, including multi-year vesting schedules and performance-based criteria, is consistent with corporate governance best practices aimed at retaining key executives and driving long-term value creation, similar to compensation plans observed at companies like ASML Holding N.V. or Lam Research Corporation.

Stakeholder Impact

• Shareholders: The equity awards align the CEO's financial incentives with the company's stock performance and long-term value creation, potentially benefiting shareholders.
• Employees: No direct impact on general employees is indicated by this filing, though executive compensation structures can indirectly influence overall compensation philosophy.

Next Steps

• Vesting of 82,004 performance share units on December 19, 2025.
• Vesting of previously reported performance share units and restricted stock units in installments from December 2025 through December 2027.
• First installment vesting of 27,304 restricted stock units on December 19, 2026, with subsequent installments in 2027 and 2028.
• Vesting of 81,912 performance share units on December 19, 2028, contingent on performance goals.

Key Dates

Recommendation

This Form 4 details routine executive compensation through equity awards, which aligns the CEO's interests with shareholders. While positive for governance, it does not provide new fundamental information to alter an investment thesis, thus a 'hold' recommendation is appropriate based solely on this filing.

Keywords

Applied Materials, AMAT, Gary E. Dickerson, CEO compensation, performance share units, restricted stock units, equity awards, insider ownership, SEC Form 4, semiconductor equipment