Form 4: ONTO Innovation COO Ramil Yaldaei Reports Stock and Performance Unit Awards

Ramil Yaldaei, Chief Operating Officer of ONTO Innovation Inc., reports the acquisition of restricted stock units (RSUs) and performance stock units (PSUs).

Summary

• On March 3, 2025, Ramil Yaldaei, the Chief Operating Officer of ONTO Innovation Inc., reported transactions involving the company's stock.
• Yaldaei acquired 3,769 shares of common stock through restricted stock units (RSUs) at a price of $0.00.
• These RSUs vest in equal 1/3rd increments annually over a three-year period from the award date.
• Yaldaei also acquired 1,884 performance stock units (PSUs) that vest on 03/03/2027 and another 1,884 PSUs that vest on 03/03/2028, each representing a contingent right to receive one share of ONTO common stock.
• The number of PSUs that vest may vary from 0% to 200% of the target number, based on performance criteria from the award date through the expiration date.
• Following these transactions, Yaldaei directly owns 12,617 shares of ONTO common stock, 1,884 PSUs vesting on 03/03/2027 and 1,884 PSUs vesting on 03/03/2028.

Sentiment

Score: 7

Explanation: The sentiment is neutral to slightly positive as it reflects standard executive compensation practices. The vesting of PSUs based on performance is a positive incentive.

Positives

• The acquisition of RSUs and PSUs by the COO aligns his interests with those of the shareholders.
• The vesting schedule of the RSUs encourages long-term commitment.
• The performance-based vesting of PSUs incentivizes the achievement of specific performance criteria.

Risks

• The actual number of PSUs that vest could be significantly lower than the target number if performance criteria are not met.
• The value of the acquired stock is subject to market fluctuations.

Future Outlook

The vesting of RSUs and PSUs is contingent upon continued employment and, in the case of PSUs, the achievement of specific performance criteria.

Industry Context

Stock and performance-based compensation are common practices in the technology industry to incentivize executives and align their interests with those of shareholders. ONTO Innovation is using these tools to motivate its COO.

Comparison to Industry Standards

• Many technology companies, such as Applied Materials and Lam Research, use a combination of stock options, restricted stock units, and performance-based equity awards to compensate their executives.
• The vesting schedules and performance criteria for these awards vary depending on the company's specific goals and circumstances.
• The use of performance stock units (PSUs) with vesting contingent on performance metrics is a common practice to align executive compensation with company performance.

Stakeholder Impact

• Shareholders: Aligns executive compensation with company performance.
• Employees: Provides insight into executive compensation structure.
• Executives: Incentivizes performance and long-term commitment.

Key Dates