Form 4: VIAVI Executive Scrivanich Reports Stock Transactions

VIAVI Solutions SVP Luke Scrivanich reported the vesting and tax-related disposal of common stock, alongside new RSU and performance-based Market Stock Unit grants.

Summary

• Luke M. Scrivanich, SVP General Manager OSP of VIAVI Solutions Inc., reported multiple transactions on August 28, 2025.
• He acquired a total of 43,966 shares of common stock through the vesting of Restricted Stock Units (RSUs) at a price of $0 per share.
• Concurrently, 22,328 shares were disposed of at $11.27 per share to cover tax withholding obligations related to the RSU vesting.
• Following these transactions, Scrivanich beneficially owns 78,709 shares of common stock, which includes 1,194 shares purchased via the Employee Stock Purchase Plan (ESPP).
• He was also granted 45,611 Restricted Stock Units (RSUs) and 45,611 Market Stock Units (MSUs) on August 28, 2025.
• The RSUs vest annually in three equal installments, with no expiration date.
• The MSUs vest based on VIAVI's Total Stockholder Return (TSR) relative to the NASDAQ Telecommunications Index over a three-year performance period (fiscal years 2026-2028), with vesting ranging from 0% to 150% of the target amount.

Sentiment

Score: 7

Explanation: The filing indicates a positive alignment of executive incentives with shareholder value through the grant of new performance-based Market Stock Units (MSUs) and the vesting of Restricted Stock Units (RSUs). While there were tax-related share disposals, the overall activity reflects ongoing executive compensation and retention strategies.

Positives

• Vesting of 43,966 Restricted Stock Units (RSUs) indicates successful achievement of prior performance or tenure conditions.
• Grant of 45,611 new Restricted Stock Units (RSUs) and 45,611 Market Stock Units (MSUs) aligns executive incentives with long-term company performance and shareholder value.
• The MSU program's performance-based vesting, tied to relative Total Stockholder Return (TSR) against the NASDAQ Telecommunications Index, demonstrates a commitment to competitive performance.

Negatives

• Disposal of 22,328 shares of common stock at $11.27 to cover tax withholding obligations reduces the executive's direct shareholding.

Risks

• The Market Stock Units (MSUs) are subject to performance risk, as vesting is contingent on VIAVI's Total Stockholder Return (TSR) relative to the NASDAQ Telecommunications Index over a three-year period (FY2026-2028).
• Failure to achieve the 55th percentile of the NASDAQ Telecom Index for each measurement period will result in less than 100% vesting of target MSUs, potentially as low as 0% for performance below the 25th percentile.

Future Outlook

The company's executive compensation structure, particularly for Market Stock Units (MSUs), is tied to future Total Stockholder Return (TSR) performance relative to the NASDAQ Telecommunications Index over fiscal years 2026 through 2028. Vesting of these MSUs will be determined annually by the Compensation Committee based on relative TSR, with potential payouts ranging from 0% to 150% of target shares.

Industry Context

The Market Stock Unit (MSU) program's reliance on the NASDAQ Telecommunications Index for relative Total Stockholder Return (TSR) performance indicates VIAVI Solutions' strategic positioning within the telecommunications sector. This approach ties executive incentives directly to the company's competitive performance against its industry peers, reflecting a common practice in technology and telecom industries to align management with market-driven shareholder value creation.

Comparison to Industry Standards

• The MSU vesting structure, which ties executive compensation to relative Total Stockholder Return (TSR) against a specific industry index (NASDAQ Telecommunications Index), is a common and well-regarded practice in executive compensation.
• Requiring performance at the 55th percentile of the index for 100% target vesting is a standard benchmark, indicating a need for above-average performance within the peer group.
• The linear interpolation for performance between thresholds (e.g., 25th-55th percentile for 0%-100% vesting) provides a fair and transparent mechanism for rewarding incremental performance, similar to programs at companies like Cisco Systems (CSCO) or Juniper Networks (JNPR) which often use relative TSR against a peer group or index.
• The potential for 150% vesting for top-tier performance (55th-100th percentile) incentivizes outperformance, a feature seen in many leading technology companies' long-term incentive plans.

Stakeholder Impact

• Shareholders: The grant of performance-based MSUs aligns executive incentives with shareholder returns, potentially benefiting long-term shareholder value if performance targets are met. The tax-related sales are a routine part of equity compensation.
• Employees: The vesting of RSUs and grant of new equity awards are part of the company's compensation strategy, which can impact employee morale and retention, particularly for key executives.

Next Steps

• The Compensation Committee will determine the actual number of shares that vest from the Market Stock Units (MSUs) after the end of each measurement period (fiscal years 2026, 2027, and 2028) based on VIAVI's relative Total Stockholder Return (TSR).
• The remaining Restricted Stock Units (RSUs) will continue to vest annually in three equal installments.

Key Dates

Recommendation

This Form 4 filing primarily details routine executive compensation activities, including the vesting of existing equity awards, tax-related share disposals, and the grant of new performance-based units. While the new Market Stock Units (MSUs) align executive incentives with shareholder returns, this filing does not provide new fundamental information about the company's operational performance, financial health, or strategic direction that would warrant a change in investment thesis. Therefore, a 'hold' recommendation is appropriate, maintaining current positions while awaiting more substantive corporate updates.

Keywords

VIAVI Solutions, VIAV, Form 4, SEC filing, insider trading, stock transactions, Restricted Stock Units, RSU, Market Stock Units, MSU, executive compensation, stock awards, Total Stockholder Return, TSR, NASDAQ Telecommunications Index, performance-based compensation, Luke M. Scrivanich