Form 4: Lam Research Corp: Senior Vice President Neil J. Fernandes Reports Changes in Beneficial Ownership

Senior Vice President Neil J. Fernandes reports transactions involving Lam Research Corp stock, including acquisition of restricted stock units and shares withheld for tax obligations.

Summary

• On February 28, 2025, Neil J. Fernandes, a Senior Vice President at Lam Research Corp, reported changes in beneficial ownership of the company's stock.
• Fernandes acquired 19,913 shares of common stock and 24,339 market-based performance restricted stock units.
• A total of 4,926 shares were disposed of to cover tax withholding obligations related to vesting restricted stock units at a price of $76.74 per share.
• Following these transactions, Fernandes directly owns 70,864 shares of common stock and indirectly owns 1,015.419 shares through a 401(k) plan.
• The market-based performance restricted stock units will vest between 0% and 150% on 2/28/2028, based on Lam Research's Total Shareholder Return relative to the PHLX Semiconductor Total Return Index.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the acquisition of shares and performance-based equity awards by a senior executive, indicating confidence in the company's future. The disposal of shares for tax obligations is a neutral event.

Positives

• Acquisition of 19,913 shares of common stock by a Senior Vice President signals confidence in the company.
• Grant of 24,339 market-based performance restricted stock units incentivizes long-term performance aligned with shareholder returns.

Negatives

• Disposal of 4,926 shares to cover tax obligations, although a standard practice, slightly reduces the executive's direct holdings.

Risks

• The vesting of the market-based performance restricted stock units is contingent on Lam Research's Total Shareholder Return relative to the PHLX Semiconductor Total Return Index, introducing performance risk.
• Fluctuations in the stock price could impact the value of the restricted stock units.

Future Outlook

The market-based performance restricted stock units will vest between 0% and 150% on 2/28/2028, based on Lam Research's Total Shareholder Return relative to the PHLX Semiconductor Total Return Index during the performance period of 02/03/2025 through 02/02/2028.

Industry Context

Insider transactions are common in publicly traded companies and are closely monitored by investors for signals about a company's prospects. Acquisition of shares and performance-based equity awards are generally viewed positively, indicating management's confidence in the company's future performance. Lam Research operates in the semiconductor industry, which is cyclical and sensitive to global economic conditions.

Comparison to Industry Standards

• Granting restricted stock units with performance-based vesting is a common practice among semiconductor companies like Applied Materials (AMAT) and ASML Holding (ASML) to align executive compensation with shareholder value.
• The vesting schedule of the restricted stock units (three equal installments) is fairly standard.
• The use of Total Shareholder Return (TSR) relative to an index (PHLX Semiconductor Total Return Index) as a performance metric is also a common benchmark in the industry.

Stakeholder Impact

• The acquisition of shares by a senior executive could positively influence shareholder sentiment.
• The performance-based equity awards align management's interests with those of shareholders, potentially driving long-term value creation.

Key Dates