Form 4: Cirrus Logic GC Reports Equity Vesting and New Grants

Cirrus Logic's EVP and General Counsel, Scott Thomas, reported the vesting of performance-based and restricted stock units, alongside new equity grants, aligning executive incentives with shareholder performance.

Summary

• Scott Thomas, EVP, General Counsel of Cirrus Logic, Inc. (CRUS), reported several equity transactions.
• On February 6, 2026, 2,450 shares of common stock vested from performance-based Market Stock Units (MSUs).
• The MSU vesting was based on a 113% payout percentage, determined by Cirrus Logic's Total Shareholder Return (TSR) relative to the Philadelphia Semiconductor Index over a three-year period (Feb 6, 2023 Feb 6, 2026).
• On February 6, 2026, an additional 3,012 shares of common stock vested from Restricted Stock Units (RSUs).
• A total of 1,376 shares were withheld by the company (597 shares and 779 shares) at a price of $142.78 per share to cover tax withholding requirements related to the vested equity.
• Following these transactions, Scott Thomas beneficially owns 30,393 shares of common stock directly.
• On February 5, 2026, new grants were issued: 5,140 Restricted Stock Units and 4,141 performance-based Market Stock Units.
• The new RSUs will vest 100% on February 5, 2029.
• The new MSUs are contingent on achieving pre-established performance metrics, specifically Total Shareholder Return (TSR) relative to the Russell 3000 index, over a three-year period from February 5, 2026, to February 5, 2029.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a routine and generally positive update, reflecting the successful vesting of performance-based awards and the ongoing alignment of executive incentives with long-term shareholder value through new equity grants.

Positives

• Vesting of performance-based Market Stock Units (MSUs) at a 113% payout percentage indicates strong performance relative to the Philadelphia Semiconductor Index over the past three years.
• New equity grants (5,140 RSUs and 4,141 MSUs) demonstrate continued commitment to executive retention and alignment of management's interests with long-term shareholder value.
• The performance metrics for the new MSUs are tied to Total Shareholder Return (TSR) relative to the Russell 3000 index, ensuring executive compensation is directly linked to market performance.

Negatives

• None identified. The reported transactions are routine equity compensation events.

Risks

• None mentioned in this filing.

Future Outlook

The filing indicates future vesting events for newly granted equity, with 5,140 Restricted Stock Units set to vest on February 5, 2029, and 4,141 performance-based Market Stock Units contingent on Total Shareholder Return (TSR) relative to the Russell 3000 index over the three-year period ending February 5, 2029.

Management Comments

• The number of performance-based restricted stock units that we refer to as Market Stock Units (MSUs) that vested was determined based on pre-established performance metrics over a three-year period beginning February 6, 2023, and ending February 6, 2026.
• Cirrus Logic's TSR for the three-year period resulted in a 113% payout percentage.
• No shares were sold; these shares were withheld to satisfy tax withholding requirements.
• The resulting number of shares of common stock acquired upon vesting of the MSUs is contingent upon the achievement of pre-established performance metrics, as approved by the Company's Compensation Committee, over a three-year performance period beginning on February 5, 2026, and ending on February 5, 2029.

Industry Context

StockSavvy.ai notes that the use of performance-based equity awards, specifically Market Stock Units tied to Total Shareholder Return (TSR) relative to industry indices like the Philadelphia Semiconductor Index and the Russell 3000, is a prevalent and effective practice in the technology and semiconductor sectors. This approach directly links executive compensation to the company's market performance and its standing against key competitors and broader market benchmarks, fostering strong alignment with shareholder interests.

Comparison to Industry Standards

• Equity compensation, particularly through Restricted Stock Units (RSUs) and performance-based Market Stock Units (MSUs), is a standard practice for executive compensation across the technology and semiconductor industries.
• Tying MSU vesting to Total Shareholder Return (TSR) relative to a peer group index, such as the Philadelphia Semiconductor Index (SOX) or a broad market index like the Russell 3000, is a common and well-regarded method to incentivize outperformance against competitors and the broader market.
• The 113% payout percentage for the vested MSUs suggests Cirrus Logic's TSR performance exceeded the median of the Philadelphia Semiconductor Index components, indicating strong relative performance within its sector. This is a positive outcome compared to companies where TSR performance might lead to lower or zero payouts.

Stakeholder Impact

• Shareholders: Benefit from executive compensation plans that align management's interests with long-term shareholder value through performance-based equity awards. The 113% payout for past MSUs suggests strong relative performance.
• Employees (Executives): Scott Thomas, as an executive, receives significant equity compensation, incentivizing his continued performance and retention.

Next Steps

• Vesting of 5,140 Restricted Stock Units on February 5, 2029.
• Determination of payout for 4,141 performance-based Market Stock Units based on TSR relative to the Russell 3000 index over the period ending February 5, 2029.

Key Dates

Recommendation

This Form 4 details routine executive compensation activities, including the vesting of previously granted equity and the issuance of new grants. While the vesting of performance-based units at a 113% payout is a positive indicator of past performance, these are expected events within a compensation structure. The filing does not introduce new material information that would fundamentally alter the investment thesis for Cirrus Logic, thus a 'hold' recommendation is appropriate as it reflects ongoing business as usual for executive incentives.

Keywords

CIRRUS LOGIC, CRUS, Form 4, Insider Transaction, Equity Compensation, Restricted Stock Units, Market Stock Units, Executive Compensation, TSR, Philadelphia Semiconductor Index, Russell 3000