John Donaghey
ADVANCED ENERGY INDUSTRIESAbout John Donaghey
John Donaghey is Executive Vice President, Global Sales at Advanced Energy Industries (AEIS). He joined AEIS in July 2021 as SVP, Global Sales and was promoted to EVP in July 2022. He is 56 years old and holds a B.S. in Electrical Engineering from Texas A&M University and an MBA from Southern Methodist University . Company performance context during his tenure: AEIS revenue was $1.48B in 2024 (down 10% YoY) with sequential growth every quarter and stronger Q4, and the annual short‑term incentive plan paid out at 92.6% of target for NEOs, reflecting balanced execution amid mixed end‑markets . AEIS’s LTI design emphasizes relative TSR and non‑GAAP gross margin with multi‑year vesting; PSUs for the 2022 plan paid out at 98.1% of target overall (140.3% on rTSR, 0% on gross margin), signaling alignment with shareholder returns over the period .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Advanced Energy Industries, Inc. | EVP, Global Sales | EVP since Jul 2022 | Leads AEIS global sales organization; promoted from SVP after one year |
| Advanced Energy Industries, Inc. | SVP, Global Sales | Jul 2021–Jul 2022 | Joined AEIS to lead global sales; promoted to EVP in 2022 |
| Amkor Technology, Inc. | Global leader of sales; senior sales/business leadership roles | 7 years (dates not specified) | Led global sales at a leading semiconductor packaging and test company |
| Texas Instruments | Various leadership, sales, and marketing roles | 1991–2014 | Broad semiconductor commercial leadership across sales/marketing |
External Roles
No public company board or other external roles disclosed for Donaghey in AEIS’s proxy materials reviewed .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 423,542 | 458,958 | 460,000 |
| Stock Awards ($) | 738,716 | 1,032,133 | 1,673,458 |
| Non‑Equity Incentive Plan Compensation ($) | 514,265 | 392,173 | 362,066 |
| All Other Compensation ($) | 6,431 | 42,219 | 37,437 |
| Total ($) | 2,032,752 | 1,925,483 | 2,532,961 |
| 2024 Annual Bonus Design | Value |
|---|---|
| Base salary | $460,000 |
| Target bonus % of base | 85% |
| Target bonus ($) | $391,000 |
| Corporate achievement factor | 92.6% |
| Actual bonus paid | $362,066 |
All Other Compensation detail (2024): 401(k) match $12,675; non‑qualified deferred compensation company contribution $21,412; executive physical $3,350 .
Performance Compensation
2024 Short‑Term Incentive (STI)
| Metric | Weight | 1H 2024 Target | 1H 2024 Actual | 2H 2024 Target | 2H 2024 Actual | Weighted Achievement |
|---|---|---|---|---|---|---|
| Revenue ($M) | 40% | 733 | 692 | 816 | 790 | 1H: 94.5%; 2H: 96.7% |
| Non‑GAAP Operating Income ($M) | 40% | 65 | 55 | 105 | 95 | 1H: 84.9%; 2H: 90.6% |
| Adjusted Cash Flow ($M) | 20% | 79 | 44 | 85 | 101 | 1H: 55.8%; 2H: 119.2% |
| Period weighting | — | — | — | — | — | 1H weighted result: 32.4%; 2H weighted result: 60.2% |
| Overall corporate achievement | — | — | — | — | — | 92.6% |
STI governance notes: two six‑month performance periods (40%/60% weighting), metrics and weights set at Revenue (40%), Non‑GAAP Operating Income (40%), Adjusted Cash Flow (20%); no individual modifiers used for NEOs in 2024 .
2024 Long‑Term Incentive (LTI) – Grants and Design
| Grant (3/1/2024) | Type | Shares/Target | Vesting | Grant Date Fair Value ($) |
|---|---|---|---|---|
| 2024 LTI award | Time‑based RSUs | 7,837 | 1/3 annually over 3 years | 811,521 |
| 2024 LTI award | PSUs (target) | 7,837 | 3‑year performance period (1/1/2024–12/31/2026); rTSR vs S&P 1000 (70%) with annual “banking” and 36‑month catch‑up; non‑GAAP gross margin (30%) over any 4 consecutive quarters; vest at end of period | 861,937 |
Program metrics and thresholds (2024 PSU): rTSR vs S&P 1000 (threshold −50pp to index; target at index; stretch +50pp), and Non‑GAAP gross margin threshold/target/stretch at 37%/40%/42% . As of YE‑2024, 29.0% of target PSUs were “banked” from 2024 rTSR; none earned on gross margin yet (final vest at period end) .
Historical PSU outcomes: 2022 PSU performance period (1/1/2022–12/31/2024) vested at 98.1% of target overall (rTSR 140.3%, gross margin 0%). John’s 2022 PSUs vested: 4,058 shares in 2024 .
Equity Ownership & Alignment
Beneficial Ownership and Guidelines
- Total beneficial ownership (Feb 1, 2025): 24,060 shares; less than 1% of outstanding; shares outstanding 37,720,277 (≈0.064% by calculation) . Within 60 days: options exercisable 9,760; time‑based RSUs 4,004; PSUs 4,058 (scheduled issuances per plan), included in beneficial ownership per SEC rules .
- Stock ownership guidelines: EVPs must hold ≥3× base salary; AEIS states executives either conform or are on track; hedging and pledging are prohibited .
Outstanding Awards at 12/31/2024 (Potential Supply Overhang)
| Instrument | Status | Quantity | Terms / Value |
|---|---|---|---|
| Stock options | Exercisable | 6,507 | Strike $85.97; expiration 3/16/2032 |
| Stock options | Unexercisable | 3,253 | Strike $85.97; expiration 3/16/2032 |
| RSUs | Unvested | 12,717 | Market value $1,470,467 at 12/31/2024 |
| PSUs (unearned) | At target basis | 21,356 | Market/payout value $2,469,394 at 12/31/2024 (final payout depends on performance) |
Scheduled RSU Vesting Tranches (Timing Signals)
| Vesting date | Shares |
|---|---|
| 3/16/2025 (2022 LTI) | 1,377 |
| 3/1/2025 (2023 LTI) | 1,752 |
| 3/1/2026 (2023 LTI) | 1,751 |
| 3/1/2025 (2024 LTI) | 2,613 |
| 3/1/2026 (2024 LTI) | 2,612 |
| 3/1/2027 (2024 LTI) | 2,612 |
2024 vesting activity: 5,591 shares vested for Donaghey with $563,531 value realized; 1,870 shares withheld for taxes; 876 shares deferred via the non‑qualified deferred compensation plan election .
Deferred Compensation (Alignment and Liquidity)
| 2024 Non‑Qualified Deferred Compensation | Amount ($) |
|---|---|
| Executive contributions (deferred comp) | 220,477 |
| Company contributions | 21,412 |
| Aggregate earnings | 84,448 |
| Year‑end balance (12/31/2024) | 724,173 |
Employment Terms
- Agreement structure: AEIS implemented updated executive change‑in‑control (CIC) and general severance agreements in 2024. Benefits require termination without cause or for good reason; CIC window is 18 months after or 90 days before a change in control (double‑trigger) .
- CIC benefits for John Donaghey (assuming termination on 12/31/2024): cash severance 1.5× base ($690,000), 1.5× target bonus ($586,500), continuation of medical benefits for 18 months ($68,235), outplacement up to $15,000, and full accelerated vesting of all RSUs/PSUs (PSUs at assumed maximum) and stock options; equity value illustrated as $5,549,942 at 12/31/2024 .
- General severance (non‑CIC): cash severance 1.0× base ($460,000), pro‑rated target bonus ($391,000), continuation of medical benefits for 12 months ($45,490), outplacement up to $15,000 .
- Death: acceleration of vesting for outstanding equity for 12 months .
- Clawback and trading policies: AEIS maintains a Dodd‑Frank/Nasdaq‑compliant clawback (adopted Nov 2, 2023), prohibits hedging/pledging, and enforces blackout/trading controls under its Insider Trading Policy .
Compensation Structure and Governance Notes
- Pay mix is performance‑weighted: 2024 NEO compensation emphasized STI/LTI; no new stock options granted in 2024; LTI comprised equal parts time‑based RSUs and PSUs .
- PSU metrics and rigor: rTSR vs S&P 1000 (70%) and non‑GAAP gross margin (30%) over multi‑year periods with banking/catch‑up; 2022 plan paid near target overall (98.1%)—above target on rTSR, zero on margin—indicating real performance sensitivity .
- Retention considerations: 2024 LTI target values were increased for some executives to address retention concerns; AEIS cites market competitiveness .
- Shareholder alignment: 2024 say‑on‑pay received ~99% support; strong governance features include robust ownership guidelines, no hedging/pledging, no excise tax gross‑ups, and use of an independent compensation consultant (Compensia) .
- Peer benchmarking: 15‑company peer group spanning semis/electronic equipment (e.g., Entegris, MKS Instruments, Silicon Labs, Power Integrations, Ultra Clean, Coherent, Monolithic Power Systems, etc.) guides AEIS’s market positioning for pay .
Investment Implications
- Alignment: Donaghey’s pay structure ties a large portion to measurable Revenue/Operating Income/Cash Flow (STI) and to multi‑year rTSR and margin (PSUs), with strong governance (clawback, anti‑pledge/hedge, ownership rules), supporting shareholder alignment .
- Retention vs. dilution: Elevated 2024 LTI targets to mitigate retention risk, combined with sizable unvested RSU/PSU balances and scheduled 2025–2027 vesting, imply periodic supply from tax‑withholding/settlement; however, option overhang is modest and uniformly priced ($85.97, 2032 expiry) .
- Transaction protection: Double‑trigger CIC with accelerated vesting at max on PSUs is standard but increases acquisition payout leverage; evaluate in M&A scenarios for potential incremental dilution/cash costs .
- Execution risk and performance signals: 2024 STI paid at 92.6% amid end‑market volatility, and 2022 PSUs settled near target overall; continued PSU banking depends on sustaining competitive TSR and achieving gross margin thresholds—key watch‑items for incentive realization and insider selling pressure around vest dates .