Form 4: ONTO Innovation SVP Granted Equity Awards

ONTO Innovation's SVP of Customer Success, Shirley Chen, received grants of restricted stock units and performance stock units on March 2, 2026.

Summary

• Shirley Chen, SVP Customer Success at ONTO Innovation Inc. (ONTO), was granted 2,523 shares of Common Stock in the form of Restricted Stock Units (RSUs).
• The RSUs vest annually in equal 1/3rd increments over a three-year period from the award date of March 2, 2026.
• Additionally, Shirley Chen was granted 2,522 Performance Stock Units (PSUs) in two tranches: 1,261 PSUs expiring on March 2, 2028, and 1,261 PSUs expiring on March 2, 2029.
• The number of PSUs that vest can range from 0% to 200% of the target number, based on specific performance criteria.
• The reported transactions were made pursuant to a Rule 10b5-1(c) plan.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive development, reflecting standard executive compensation practices that align management incentives with long-term company performance and shareholder interests.

Positives

• The equity grants align the interests of the SVP of Customer Success, Shirley Chen, with those of ONTO Innovation's shareholders.
• Performance Stock Units (PSUs) incentivize the executive to achieve specific company performance criteria, potentially driving value creation.
• The grants are a standard component of executive compensation, indicating ongoing commitment and retention of key management.

Risks

• The actual number of shares received from Performance Stock Units (PSUs) may vary from 0% to 200% of the target number, depending on the achievement of specific performance criteria, introducing variability for the executive's compensation.

Future Outlook

The future outlook for the granted equity is tied to the vesting schedules for RSUs over three years and the achievement of specific performance criteria for PSUs, which will determine the final number of shares received by the executive by their respective expiration dates in 2028 and 2029.

Management Comments

• The grants of Restricted Stock Units and Performance Stock Units represent a component of the company's executive compensation strategy, designed to incentivize long-term performance and retention.

Industry Context

StockSavvy.ai notes that the granting of equity awards such as RSUs and PSUs to senior executives is a standard and widespread practice across the technology and semiconductor industries, including companies like Applied Materials, KLA Corporation, and Lam Research, aiming to align management incentives with shareholder value creation and long-term strategic goals.

Comparison to Industry Standards

• The use of both time-based Restricted Stock Units (RSUs) and performance-based Performance Stock Units (PSUs) is a common compensation structure in the technology sector, similar to practices at companies such as Intel and NVIDIA, which utilize a mix of equity types to balance retention and performance incentives.
• The three-year vesting schedule for RSUs is typical for executive grants, comparable to vesting periods seen at peer companies like ASML and Tokyo Electron.
• The potential for PSU payouts to range from 0% to 200% of target is a standard mechanism to link executive compensation directly to the achievement of challenging corporate performance metrics, a practice widely adopted by leading global technology firms.

Stakeholder Impact

• Shareholders: The equity grants are designed to align the executive's financial interests with long-term shareholder value creation, particularly through performance-based units.
• Employees: The compensation structure for senior management can set a precedent or reflect the company's overall approach to incentivizing its workforce.

Next Steps

• Vesting of Restricted Stock Units (RSUs) in annual 1/3rd increments on March 2, 2027, March 2, 2028, and March 2, 2029.
• Evaluation of specific performance criteria for Performance Stock Units (PSUs) leading up to their expiration dates on March 2, 2028, and March 2, 2029, to determine the final number of shares to be awarded.

Key Dates

Keywords

ONTO Innovation, ONTO, Form 4, Insider Transaction, Equity Grant, Restricted Stock Units, Performance Stock Units, Executive Compensation, Shirley Chen, SVP Customer Success