Gary Dickerson
APPLIED MATERIALS INC /DEAbout Gary Dickerson
Gary E. Dickerson is President (since 2012) and CEO/Director (since 2013) of Applied Materials. He previously served as CEO and director of Varian Semiconductor (2004–2011) and spent 18 years at KLA-Tencor, culminating as President and COO; earlier roles were in manufacturing/engineering at GM Delco and AT&T Technologies . He is 67, serves as an executive director with no committee assignments, and the Board has an independent Chair separate from the CEO role . Under his leadership, AMAT delivered record FY2024 performance with non-GAAP EPS of $8.65 and strong segment execution (Semiconductor Systems revenue $19.9B; AGS record $6.2B), and 5-year TSR value grew to $316.48 per $100 invested through FY2024, materially outperforming peers .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Varian Semiconductor Equipment Associates | CEO and Director | 2004–2011 | Led the company until its 2011 acquisition by Applied; brought implant leadership into AMAT . |
| KLA-Tencor | Various roles incl. President & COO | 18 years (pre-2004) | Drove product, sales and services P&L; deep process control/yield expertise . |
| General Motors – Delco Electronics; AT&T Technologies | Manufacturing/Engineering management | Not disclosed | Early semiconductor manufacturing/engineering experience; foundation for later executive roles . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| U.S.-China Business Council | Board member (past) | Not disclosed | Government policy experience cited in AMAT proxy biography . |
| Other public company boards | None | — | No other current or past 5-year public directorships disclosed . |
Fixed Compensation
| Fiscal year | Base salary ($) | Notes |
|---|---|---|
| 2022 | 1,030,000 | |
| 2023 | 1,030,000 | |
| 2024 | 1,030,000 | HRCC has not increased CEO salary since Dec 2018 to keep pay predominantly long-term/performance-based . |
Performance Compensation
Annual Incentive (Senior Executive Bonus Plan)
| Metric | 2024 Target/Design | 2024 Actual/Payout |
|---|---|---|
| Initial performance hurdle | Non-GAAP EPS ≥ $5.55 | Achieved $8.65; hurdle met . |
| Corporate scorecard (weighted categories for CEO) | Financial & Market 50%; Products & Growth 30%; Services & Subscription 10%; Customers & Markets 5%; People & Organization 5% . | Modifiers ranged 0.987x–1.07x; TSR relative to peers above target (1.5x on TSR subfactor) . |
| Individual performance modifier | Applied by HRCC | 1.1x for NEOs . |
| Target bonus (% base) | 150% | 150% . |
| Target bonus ($) | 1,545,000 | 1,545,000 . |
| Actual bonus ($) | — | 1,754,734 . |
Long-Term Incentives (LTI) – FY2024 Grants (Dec 7, 2023)
| Item | CEO (2024) |
|---|---|
| Target LTI value ($) | 22,500,000 . |
| Vehicle mix | 75% PSUs / 25% RSUs . |
| PSUs – target units | 113,721 (3-year performance, FY2024–FY2026) . |
| RSUs – units | 37,907 (ratable vest over 3 years) . |
| PSU metrics/weighting | 50% 3-yr non-GAAP operating margin vs goals; 50% 3-yr relative TSR vs S&P 500; threshold/target/max at 0/100/200% for each metric . |
Performance realization on prior cycle:
- FY2022 PSUs (FY2022–FY2024): earned at 161.5% of target driven by avg non-GAAP operating margin 29.6% (130% factor) and TSR 73rd percentile (193% factor); Dickerson earned 127,542 PSUs vs 78,973 target .
Summary Compensation (multi-year)
| Metric ($) | FY2022 | FY2023 | FY2024 |
|---|---|---|---|
| Salary | 1,030,000 | 1,030,000 | 1,030,000 . |
| Stock awards (grant-date fair value) | 17,783,334 | 23,951,048 | 24,861,142 . |
| Non-equity incentive plan comp | 1,358,055 | 1,631,520 | 1,754,734 . |
| All other compensation | 228,583 | 241,976 | 153,336 . |
| Total | 20,399,972 | 26,854,544 | 27,799,212 . |
Perquisites detail (FY2024): residential security equipment/monitoring $124,966 and personal security services $8,332 (plus 401k match $15,525; term life $1,513; charitable match $2,500; wellbeing $500) .
Equity Ownership & Alignment
Beneficial Ownership and Guidelines
- Shares beneficially owned (12/31/2024): 1,097,943; less than 1% of outstanding shares (811,197,923) . Approximate ownership = 0.14% (1,097,943/811,197,923) based on disclosed totals .
- CEO stock ownership guideline: 6x base salary; all officers and directors in compliance as of 12/31/2024 .
- Hedging and pledging: Prohibited for directors and Section 16 officers; no holding in margin or pledging allowed .
- Clawback: 2023 recovery policy for erroneously awarded incentive-based compensation upon restatement (3-year lookback, no-fault), plus legacy misconduct-based policy for earlier periods .
Outstanding Equity Awards (as of FY2024 year-end)
| Grant date | Award | Unvested/Unearned units (#) | Market value ($) at $186.52 | Vesting/notes |
|---|---|---|---|---|
| 12/7/2023 | RSUs | 37,907 | 7,070,414 | 1/3 vested 12/19/2024; 1/3 on 12/19/2025; 1/3 on 12/19/2026 (3). |
| 12/12/2022 | RSUs | 31,240 | 5,826,885 | 1/2 vested 12/19/2024; 1/2 vests 12/19/2025 (4). |
| 12/2/2021 | RSUs | 8,775 | 1,636,713 | Vested in full 12/19/2024 (5). |
| 12/7/2023 | PSUs (target) | 113,721 | 21,211,241 | 3-yr performance ends FY2026 . |
| 12/12/2022 | PSUs (target) | 140,578 | 26,220,609 | Performance cycle in progress/complete per program; awards shown as unearned at 10/25/24 . |
| 12/2/2021 | PSUs (target) | 78,973 | 14,730,044 | FY2022 award; actual payout realized at 161.5% (127,542 earned) . |
| 12/3/2020 | PSUs (target) | 116,145 | 21,663,365 | Legacy cycle as of measurement date . |
Near-term vesting and potential selling pressure (supply)
| Vesting date | Source grant | Units scheduled |
|---|---|---|
| 12/19/2025 | 12/7/2023 RSUs (1/3) | 12,636 (one-third of 37,907) (3). |
| 12/19/2025 | 12/12/2022 RSUs (remaining half) | 15,620 (half of 31,240) (4). |
| 12/19/2026 | 12/7/2023 RSUs (final 1/3) | 12,636 (one-third of 37,907) (3). |
Notes: PSUs deliver at the end of performance periods based on results; FY2022 grant paid at 161.5% (already realized), and FY2024–FY2026 PSUs could deliver 0–200% based on outcomes .
Employment Terms
| Topic | Disclosure |
|---|---|
| Employment agreement | CEO agreement dated Aug 14, 2013; if terminated without cause (non-death/disability), lump sum severance = 275% of base salary, subject to release, non-solicit, non-disparagement . |
| Severance amount (as of 10/25/2024) | $2,832,500 (275% of $1,030,000) if terminated without cause on 10/25/2024 . |
| Change-in-control (CIC) arrangements | No separate CIC agreements; equity under Stock Plan accelerates if not assumed in CIC or upon double-trigger (termination without cause/for good reason within 12 months post-CIC) . |
| Equity acceleration values (CIC scenario) | $98,359,270 estimated acceleration value at 10/25/2024 (based on closing price $186.52) . |
| Value Creation Awards (VCA) acceleration (involuntary, no cause) | $43,326,731 estimated acceleration value for CEO (as of 10/25/2024) . |
| Qualified retirement provisions | As of FY2024, CEO eligible (age ≥60, ≥5 yrs service). Partial RSU acceleration and PSU payout (pro-rata at actual performance) would be $53,618,531 if retired on 10/25/2024; VCAs excluded . |
| Deferred compensation | No CEO deferrals in FY2024 (DCP table shows “—” for CEO) . |
| Non-compete/other | Non-compete specifics not disclosed; Company uses non-solicit in severance agreement . |
Board Governance
- Board service: Director since 2013; executive director with no committee assignments .
- Chair/independence: Independent Chair (Thomas J. Iannotti); roles of Chair and CEO separated; regular executive sessions of independent directors .
- Board meeting cadence/attendance: Four full Board meetings in FY2024; each director attended >75% of Board/committee meetings .
- Committee structure: Audit, HRCC, Governance, and Strategy & Investment; all committee members are independent .
Director Compensation (as it applies to CEO)
- Employee directors (including the CEO) receive no additional pay for Board service; director retainers/equity apply only to non-employee directors .
Compensation Committee, Peer Group, Say-on-Pay
- HRCC and consultant: Human Resources & Compensation Committee (independent) engages Semler Brossy; independence confirmed, no conflicts .
- Peer group (FY2024): AMD, Analog Devices, Broadcom, Cisco, Corning, Intel, IBM, KLA, Lam, Micron, NVIDIA, NXP, Qualcomm, Texas Instruments, Western Digital, Motorola Solutions (last two later removed for FY2025 peer list) .
- Targeting: HRCC uses peers as reference; does not target a specific percentile for any element .
- Say-on-Pay: 91% support at 2024 Annual Meeting .
Performance & Track Record (Pay vs Performance context)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 |
|---|---|---|---|---|
| PEO “Compensation Actually Paid” ($) | 144,856,918 | (22,058,266) | 71,918,135 | 86,080,922 . |
| Total Shareholder Return ($ value of $100) | 226.06 | 149.67 | 221.11 | 316.48 . |
| GAAP Net Income ($mm) | 5,888 | 6,525 | 6,856 | 7,177 . |
| Non-GAAP EPS ($) | 6.84 | 7.70 | 8.05 | 8.65 . |
Segment highlights FY2024: Semi Systems revenue $19.9B; AGS record $6.2B; Display/Adjacents $885M; improvements in cash flow and margins .
Risk Controls and Red Flags Checklist
- Clawbacks in place (no-fault restatement policy) .
- Hedging/pledging prohibited for directors/Section 16 officers .
- No guaranteed bonuses; payout caps; diversified metrics; no dividends on unvested LTI .
- No tax gross-ups (except relocation/expatriate), no executive pensions .
- Strong governance: independent Chair; annual say-on-pay; shareholder rights and active engagement .
Board Service History and Dual-Role Implications
- Board tenure: Director since 2013; Executive Director (not independent) .
- Committee roles: None (CEO does not sit on committees) .
- Leadership structure: Independent Chair (Iannotti) and regular independent director executive sessions mitigate CEO dual-role concerns and strengthen oversight .
Suggested “Insider Selling Pressure” Watchlist Dates
- RSU vests: Dec 19, 2025 (≈28,256 units across 2022 and 2023 grants) and Dec 19, 2026 (≈12,636 units from 2023 grant), subject to continued service (3)(4).
- PSU deliveries: FY2024–FY2026 PSU tranche can deliver post-FY2026 based on performance (0–200%) .
Investment Implications
- Alignment: 96% of CEO pay variable with 90% delivered in long-term equity; PSU metrics (operating margin/relative TSR; shifting to economic profit + TSR for FY2025–2027) tightly link outcomes to shareholder value .
- Retention vs. flexibility: Large unvested PSUs/RSUs and retirement provisions support retention; severance is salary-only (2.75x) with no CIC cash agreements, but equity accelerates on double-trigger CIC, implying material equity sensitivity to corporate events ($98.4M CIC equity acceleration; VCA $43.3M on involuntary termination) .
- Selling pressure: Predictable RSU vests in late CY2025/CY2026 could create periodic incremental supply; hedging/pledging bans and ownership guidelines reduce adverse alignment risks (3)(4) .
- Governance/support: Independent Chair, strong shareholder rights, and steady 91% Say-on-Pay reduce governance discount risk; HRCC uses an independent advisor and diversified scorecard discouraging short-termism .
- Track record: Multi-year TSR outperformance and consistent EPS delivery under Dickerson suggest continued execution capability; PSU overachievement in the 2022–2024 cycle (161.5%) evidences strong relative and operational performance, but sets a high bar for future cycles .