DEF: MACOM Sets 2026 Annual Meeting, Highlights Strong Executive Pay Performance

MACOM Technology Solutions Holdings, Inc. announces its 2026 Annual Meeting of Stockholders to vote on director elections, executive compensation, and auditor ratification, while showcasing strong performance-based executive compensation payouts for fiscal year 2025.

Summary

• MACOM Technology Solutions Holdings, Inc. will hold its 2026 Annual Meeting of Stockholders on March 5, 2026, at 3:00 p.m. ET in Chelmsford, Massachusetts.
• Stockholders will vote on the election of eight directors, an advisory resolution to approve executive compensation for fiscal year 2025, and the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending October 2, 2026.
• The Board of Directors recommends a "FOR" vote for all proposals.
• As of the record date, January 12, 2026, there were 75,010,891 shares of common stock outstanding and entitled to vote.
• The company's corporate sustainability efforts include an annual sustainability report (most recent August 2025) and a Combined Heating and Cooling Power (CCHP) plant, which went online in October 2022, expected to reduce carbon emissions by up to 1,900 metric tons per year.
• Executive compensation for fiscal year 2025 saw base salary increases ranging from 3.8% to 10.5% for named executive officers.
• Short-term cash incentives for fiscal year 2025 resulted in an aggregate payout of 103.5% of the target annual cash incentive opportunity, driven by strong adjusted operating income performance.
• Long-term equity incentives for fiscal year 2025 included performance-based restricted stock units (PSUs) tied to Adjusted EPS growth and relative Total Shareholder Return (rTSR), which achieved maximum or above-target payouts.
• Adjusted EPS growth for the FY2025 tranche of PSUs was 36%, resulting in a 300% payout, and rTSR rank for the FY2023-2025 tranche was 77%, resulting in a 200% payout.
• The ratio of the CEO's (Stephen Daly) annual total compensation ($10,102,699) to the median employee's annual total compensation ($113,620) for fiscal year 2025 was approximately 89 to 1.

Sentiment

Score: 8

Explanation: The filing reveals strong operational performance and effective executive incentive alignment, leading to significant payouts for Adjusted EPS and relative Total Shareholder Return, which both substantially outperformed targets and the PHLX Semiconductor Index. The company also demonstrates robust corporate governance and sustainability initiatives. However, the reported negative GAAP net income for fiscal year 2025 presents a notable concern despite strong Adjusted EPS.

Positives

• Strong stockholder support for executive compensation, with 97.3% approval at the 2025 annual meeting.
• Successful implementation of a Combined Heating and Cooling Power (CCHP) plant in October 2022, contributing to reduced electricity consumption and an expected reduction of up to 1,900 metric tons of carbon emissions per year.
• High employee engagement survey response rate of 88% in February 2025, indicating a committed workforce.
• Executive compensation programs are designed to attract and retain top talent, motivate achievement of financial goals, and align with stockholder interests.
• Fiscal year 2025 short-term cash incentives resulted in an aggregate payout of 103.5% of target, reflecting strong performance against adjusted operating income goals.
• Exceptional performance in Adjusted EPS growth for the FY2025 tranche of performance-based restricted stock units (PSUs), achieving 36% growth and a 300% payout.
• Above-target performance for the FY2024-2025 tranche of Adjusted EPS PSUs (13% growth, 167% payout) and above-threshold for FY2023-2025 tranche (7% growth, 72% payout).
• Maximum payout achieved for rTSR performance-based restricted stock units (FY2023-2025 tranche) with a 77% rTSR rank, resulting in a 200% payout.
• The company's cumulative Total Shareholder Return (TSR) of $376.95 (from a $100 investment in Oct 2020) significantly outperformed the PHLX Semiconductor Index ($296.42) in fiscal year 2025.
• All named executive officers are either in compliance with stock ownership guidelines or within the phase-in period.

Negatives

• Net income for fiscal year 2025 was negative at $(54,210) thousand, a significant decrease from $76,859 thousand in fiscal year 2024.
• Two late Form 4 filings for Section 16(a) beneficial ownership reporting compliance were noted for Mrs. Ocampo and Mr. Dennehy, although attributed to clerical errors and resolved.

Risks

• The semiconductor industry is highly competitive, cyclical, and characterized by constant and rapid technological change, evolving standards, short product lifecycles, and significant fluctuations in supply and demand, which may materially impact the business and employee compensation.
• Downturns in the semiconductor industry may be prolonged and difficult to predict, potentially leading to decreases in revenue, profitability, cash flows, and stock price.
• Intense competition for attracting and retaining qualified talent within the semiconductor industry.
• Failure to meet pre-determined targets for short-term cash incentives means that no cash incentive payments would be made.
• Potential for distraction of the President and Chief Executive Officer from performing duties due to the prospect of employment termination.
• Potential for executives to be distracted by a potential change in control without appropriate severance protection.

Future Outlook

The company expects to continue its corporate sustainability initiatives, including reducing its climate footprint and enhancing energy efficiency. Executive compensation programs are designed to motivate future achievement of financial and business goals, with performance targets adjusted based on changing business conditions in the cyclical semiconductor industry. The board will review and consider stockholder voting results on executive compensation for future decisions.

Management Comments

• Our board of directors recommends that you vote FOR the director nominees set forth in Proposal 1, and FOR Proposals 2 and 3.
• Your vote is very important. Please vote your shares promptly, whether or not you expect to attend the meeting in person.
• We endeavor to integrate corporate sustainability practices that we believe will create long-term economic value for our stockholders, employees, communities and other constituents.
• We strive to create a sense of community and well-being that encourages our employees to focus on both their and the Company's long-term success.
• Our compensation committee believes that we have no compensation programs that give rise to excessive risk-taking.
• We believe that the total compensation provided to our named executive officers in fiscal year 2025 was generally slightly below market median to market median in the aggregate, assuming achievement of our target performance goals... and market median to above market median in the aggregate, assuming achievement of our maximum performance goals.
• Our compensation committee believes that balancing the objective financial measures of the Adjusted EPS PSUs with restricted stock units subject to an rTSR component will further incentivize our named executive officers to focus on outperforming our peers over a longer period in a highly competitive marketplace and further align their interests with those of our stockholders.
• We believe that our stockholders strongly support our executive compensation program, as reflected by the approval of, on an advisory basis, the compensation of our named executive officers by 97.3% of the shares voted at our 2025 annual meeting of stockholders.

Industry Context

The semiconductor industry is characterized by intense competition, cyclicality, rapid technological change, evolving standards, short product lifecycles, and significant fluctuations in supply and demand. MACOM's executive compensation programs are structured to account for these dynamics, including using performance-based equity and short-term cash incentives with six-month performance periods to allow for target adjustments based on changing business conditions. The company's strong relative Total Shareholder Return (TSR) performance, outperforming the PHLX Semiconductor Index, indicates effective navigation of this challenging environment.

Comparison to Industry Standards

• The company's cumulative Total Shareholder Return (TSR) of $376.95 (from a $100 investment from Oct 2, 2020) significantly outperformed the weighted cumulative TSR of the PHLX Semiconductor Index ($296.42) for the same period, demonstrating strong relative stock performance.
• The company's relative positioning within its peer group (semiconductor, electric components, communications equipment, and electronic manufacturing industries) was at the 13th percentile of trailing twelve months revenue and the 63rd percentile of market capitalization as of June 1, 2024, indicating a smaller revenue base but a higher market valuation relative to some peers.
• Executive compensation for fiscal year 2025 was generally slightly below market median to market median at target performance, and market median to above market median at maximum performance, aligning with competitive levels within the industry.
• The rTSR PSUs are explicitly benchmarked against component companies of the PHLX Semiconductor Index, with a 77% rTSR rank for the FY2023-2025 tranche resulting in a maximum 200% payout, indicating superior performance against industry peers.

Management Changes

Corporate Governance

Related Party Transactions

• The company is party to a Second Amended and Restated Investor Rights Agreement (IRA) with entities affiliated with Mrs. Ocampo, a former director and beneficial owner of more than 5% of voting securities. This agreement grants certain stockholders registration rights for their shares.
• The audit committee charter requires review and approval or ratification of any related person transactions as defined under Regulation S-K Item 404.
• The Code of Business Conduct and Ethics prohibits directors and officers from engaging in conflict of interest transactions without disclosure and approval.

Stakeholder Impact

• Shareholders: Direct impact through voting on director elections, executive compensation, and auditor ratification. Benefit from strong TSR performance and performance-based executive compensation alignment. Potential negative impact from negative GAAP net income.
• Employees: Benefit from competitive and balanced compensation programs, healthcare, 401(k) matching, parental leave, and professional development opportunities. Employee engagement survey results indicate a positive corporate culture.
• Customers/Suppliers: Impacted by the company's commitment to environmentally responsible practices and ethical business conduct (Code of Conduct).
• Communities: Benefit from the company's global charitable giving program, employee volunteerism, and environmental stewardship initiatives (e.g., CCHP plant reducing carbon emissions).
• Executives: Directly impacted by compensation decisions, including base salary increases, short-term cash incentives, and long-term equity awards, which are tied to company performance. Subject to stock ownership guidelines and clawback policies.

Next Steps

• Hold the 2026 Annual Meeting of Stockholders on March 5, 2026.
• Elect eight directors to serve until the 2027 annual meeting.
• Conduct an advisory vote on executive compensation for fiscal year 2025.
• Ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending October 2, 2026.
• Announce voting results by filing a Current Report on Form 8-K within four business days after the Annual Meeting.
• Continue to integrate corporate sustainability practices and publish annual sustainability reports.
• Executive officers to achieve applicable stock ownership guidelines within 48 months of December 21, 2021, or their designation date.
• Hold future advisory votes on named executive officer compensation annually, with the next expected at the 2027 annual meeting.

Key Dates

Recommendation

The filing reveals strong operational performance and effective executive incentive alignment, leading to significant payouts for Adjusted EPS and relative Total Shareholder Return, which both substantially outperformed targets and the PHLX Semiconductor Index. While GAAP net income was negative, the focus on Adjusted EPS as a key performance metric, coupled with outperformance against industry benchmarks, suggests underlying business strength and effective strategy execution in a competitive industry. The robust corporate governance, sustainability efforts, and high stockholder approval for executive compensation further support a positive outlook. The company's ability to generate strong shareholder returns relative to its peers, despite a challenging industry, indicates a well-managed entity with potential for continued growth.

Keywords

MACOM Technology Solutions, SEC Filing, Proxy Statement, Annual Meeting, Director Election, Executive Compensation, Auditor Ratification, Corporate Governance, Semiconductor Industry, Adjusted EPS, Total Shareholder Return, Risk Management, Sustainability, Compensation Committee, Board of Directors, Stockholder Vote, DEF 14A