Form 4: Viavi Solutions CFO Ilan Daskal Awarded Market Stock Units and Restricted Stock Units

EVP and CFO of Viavi Solutions, Ilan Daskal, receives market stock units (MSUs) and restricted stock units (RSUs) on August 28, 2024, with MSU vesting tied to the company's total stockholder return (TSR) relative to the NASDAQ Telecommunications Index.

Summary

• Ilan Daskal, EVP and CFO of Viavi Solutions, was granted 165,343 Market Stock Units (MSUs) and 165,343 Restricted Stock Units (RSUs) on August 28, 2024.
• The MSUs' vesting is contingent upon Viavi Solutions' total stockholder return (TSR) compared to the NASDAQ Telecommunications Index over three performance periods: fiscal years 2025, 2026, and 2027.
• The TSR will be measured against the period of August 1, 2024, to September 15, 2024.
• The MSU award is divided into three equal tranches, each linked to one of the measurement periods.
• The number of shares vesting can range from 0% to 150% of the target amount for each period, based on relative TSR performance.
• To vest in 100% of the target MSUs, Viavi's TSR must be at the 55th percentile of the NASDAQ Telecom Index for each measurement period.
• The RSUs vest annually in three equal installments.
• Each earned unit converts into one share of common stock on the vesting date.

Sentiment

Score: 7

Explanation: The document is a standard SEC filing related to executive compensation. The sentiment is neutral to slightly positive as it indicates continued investment in management and alignment of interests with shareholders.

Positives

• The MSU structure incentivizes management to improve Viavi Solutions' TSR relative to its peers in the NASDAQ Telecommunications Index.
• The vesting schedule of the RSUs provides a steady stream of equity compensation over three years.

Risks

• If Viavi Solutions' TSR underperforms relative to the NASDAQ Telecommunications Index, the number of MSUs that vest could be significantly reduced.
• The specific vesting schedule and terms of the MSUs are detailed in Exhibit 99 FY25 MSU, which should be reviewed for a complete understanding of the award.

Future Outlook

The number of MSUs that will ultimately vest depends on Viavi Solutions' TSR performance relative to the NASDAQ Telecommunications Index over the next three fiscal years (2025-2027).

Industry Context

Stock-based compensation, including MSUs and RSUs, is a common practice in the technology industry to align management's interests with those of shareholders and incentivize long-term value creation. The use of TSR relative to an industry index is a standard benchmark for performance-based equity awards.

Comparison to Industry Standards

• Many technology companies use TSR as a metric for vesting of performance-based equity awards.
• Comparing Viavi's TSR performance against the NASDAQ Telecommunications Index is a common approach to benchmark against industry peers.
• Companies like Cisco, Juniper Networks, and Ericsson also utilize similar performance-based equity compensation plans.

Stakeholder Impact

• Shareholders: The MSU structure aims to align management's interests with shareholder value creation.
• Employees: The equity awards can boost employee morale and retention.

Next Steps

• The Compensation Committee will determine the actual number of shares earned at the end of each year of the MSU Performance Period (fiscal years 2025, 2026, and 2027).
• The earned units will convert into shares of common stock on the vesting date.

Key Dates