Form 4: Lam Research Executive Vice President Patrick J. Lord Reports Changes in Beneficial Ownership

Executive Vice President Patrick J. Lord of Lam Research Corporation reports acquisition and disposal of common stock and derivative securities.

Summary

• On March 1, 2024, Patrick J. Lord, an Executive Vice President at Lam Research Corp, reported changes in beneficial ownership.
• These changes involve the acquisition of 1,061 shares of common stock and 3,183 employee stock options, as well as the disposal of shares to cover tax obligations.
• Lord also acquired 3,185 market-based performance restricted stock units.
• Following these transactions, Lord directly owns 7,966 shares of common stock.
• The restricted stock units vest in three equal installments starting March 1, 2025, and the stock options also become exercisable in three equal installments starting the same date.
• The market-based performance restricted stock units will vest between 0% and 150% on 03/01/2027 based on Lam Research's Total Shareholder Return performance relative to the PHLX Semiconductor Total Return Index Total Shareholder Return during the performance period of 02/01/2024 through 01/31/2027.

Sentiment

Score: 7

Explanation: The sentiment is neutral to slightly positive. The transactions reflect standard executive compensation practices and alignment with company performance. There are no overtly negative signals.

Positives

• The acquisition of stock options and restricted stock units indicates a continued investment and alignment of interests between the executive and the company's performance.

Negatives

• The disposal of shares to cover tax obligations reduces the executive's holdings, although this is a common practice.

Risks

• The vesting of market-based performance restricted stock units is contingent on Lam Research's performance relative to the PHLX Semiconductor Total Return Index, introducing performance-related uncertainty.

Future Outlook

The vesting of restricted stock units and exercisability of stock options are tied to future dates and, in the case of market-based units, to the company's performance relative to an industry index.

Industry Context

Executive compensation and stock ownership are common practices in the semiconductor industry to align management interests with shareholder value. Monitoring these filings provides insights into executive sentiment and potential future stock performance.

Comparison to Industry Standards

• Stock option and restricted stock unit grants are standard compensation practices among publicly traded technology companies, including competitors like Applied Materials (AMAT) and ASML Holding (ASML).
• The vesting schedules and performance-based criteria are also typical, designed to incentivize long-term value creation.
• The size of the grants is relative to the executive's position and the overall compensation structure at Lam Research.

Stakeholder Impact

• The transactions have a minor impact on shareholders, reflecting standard executive compensation practices.
• Employees may be indirectly affected by the performance-based vesting of restricted stock units, as it ties executive compensation to company performance.

Key Dates