Form 4: Viavi Solutions Executive Gary W. Staley Reports Stock Transactions

Gary W. Staley, SVP Global Sales at Viavi Solutions, reports the vesting of restricted stock units and market stock units, along with associated tax withholding transactions.

Summary

• Gary W. Staley, a Senior Vice President at Viavi Solutions, filed a Form 4 detailing changes in his beneficial ownership of the company's stock on August 28, 2024.
• The transactions include the vesting of 9,885, 11,655, and 15,152 restricted stock units (RSUs), which convert into common stock.
• A total of 66,137 Market Stock Units (MSUs) and 66,137 Restricted Stock Units (RSUs) were acquired.
• The company withheld 3,890 and 4,587 shares to cover tax obligations related to the vesting of the RSUs at a price of $8.49 per share.
• Staley's total holdings after these transactions amount to 131,119 shares, including 1,122 shares purchased through the ESPP plan.
• The vesting of Market Stock Units (MSUs) will be based on the company's total stockholder return (TSR) relative to the NASDAQ Telecommunications Index over a three-year performance period from fiscal years 2025 through 2027.

Sentiment

Score: 6

Explanation: The sentiment is neutral. It's a routine filing of stock transactions. The vesting of MSUs tied to TSR is a positive, but the tax withholding is a minor negative.

Positives

• The vesting of stock units indicates that Staley is accumulating more shares in the company.
• The vesting of MSUs is tied to the company's performance relative to the NASDAQ Telecom Index, aligning executive compensation with shareholder returns.

Negatives

• The company withheld shares to cover tax obligations, reducing the number of shares Staley directly received.

Risks

• The vesting of MSUs is dependent on the company's TSR performance relative to the NASDAQ Telecom Index, which is subject to market fluctuations and industry-specific risks.
• If the company's TSR does not meet the performance thresholds, the MSUs may not vest at the target amount.

Future Outlook

The vesting of Market Stock Units (MSUs) will depend on the company's TSR performance relative to the NASDAQ Telecom Index over the next three fiscal years (2025-2027).

Industry Context

This filing reflects standard executive compensation practices within the technology industry, where stock-based compensation is used to align executive incentives with shareholder value creation. The use of TSR relative to an industry index is a common performance metric.

Comparison to Industry Standards

• Many technology companies, such as Cisco, Juniper Networks, and Ericsson, use a combination of restricted stock units (RSUs) and performance-based equity awards like market stock units (MSUs) to compensate their executives.
• The vesting schedules and performance metrics for MSUs vary across companies, but TSR relative to an industry index is a common approach.
• For example, Cisco uses a similar TSR-based vesting schedule for its performance stock units, comparing its TSR to that of the S&P 500 Index.
• The percentage of target shares earned based on TSR performance (0% to 150%) is also within the typical range observed in the industry.

Stakeholder Impact

• The vesting of MSUs aligns executive compensation with shareholder returns, potentially benefiting shareholders if the company performs well relative to its peers.
• The tax withholding transactions have a minor impact on the company's cash flow.

Next Steps

• The Compensation Committee will determine the actual number of shares that vest based on the company's TSR performance at the end of each measurement period (fiscal years 2025, 2026, and 2027).

Key Dates