Prabu Raja
APPLIED MATERIALS INC /DEAbout Prabu Raja
Prabu G. Raja, Ph.D. is President of Applied Materials’ Semiconductor Products Group (SPG), leading the company’s semiconductor process equipment businesses and global field organization . He holds a Ph.D. in Plasma Physics from IIT Delhi, with post-doctoral research at Ehime University (Japan) and the University of Iowa; he has 150+ patents and is an Applied Fellow recognized for technical contributions . Morningstar lists his age as 62 . In fiscal 2024, Semiconductor Systems revenue reached $19.9 billion and company non-GAAP EPS was $8.65, while PSUs for the 2022 grant paid out at 161.5% on a three-year scorecard of non-GAAP operating margin (29.6%) and relative TSR (73rd percentile) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Applied Materials | Joined as process engineer (PVD); led Ionized Metal Plasma Ti/TiN and Encore Tantalum/Copper products | 1995–2009 | Drove dominant PVD market share through product leadership . |
| Applied Materials | Applied Fellow | 2010 | Recognized for outstanding technical contributions; foundation for leadership roles . |
| Applied Materials | Corporate VP & GM, Etch/MDP/ALD; Group VP & GM, Patterning & Packaging | 2010s (pre-2017) | Won key inflections (metal gate); expanded share across CVD/ALD/Etch/Selective Removal . |
| Applied Materials | Senior Vice President, Semiconductor Products Group | Since Nov 15, 2017 | Scaled SPG; expanded co-optimized integrated solutions; reinforced leadership at key inflections . |
| Applied Materials | President, Semiconductor Products Group | Current | Leads SPG globally; positioned for substantial growth at device architecture and packaging inflections . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| IIT Delhi | Distinguished Alumni Award (Industry & Corporate Leadership) | 2025 | Recognition for industry transformation; ecosystem building across academia/industry/government . |
| U.S.-India Business Council | Board of Directors | Current | Strengthens international semiconductor collaboration and policy engagement . |
| India Semiconductor Mission | Industry Advisor | Current | Supports national ecosystem development and capacity building . |
Fixed Compensation
Multi-year compensation (fiscal years ended Oct):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 679,615 | 740,000 | 792,308 |
| Target Bonus ($) | $924,750 (target) | $1,012,500 (target) | $1,080,000 (target) |
| Target Bonus (% of Salary) | — | 135% | 135% |
| Actual Annual Bonus ($) | 819,791 | 1,091,475 | 1,229,580 |
| Annual LTI Award (Stock Awards, $) | 5,372,622 | 6,636,826 | 6,968,612 |
| All Other Compensation ($) | 18,682 | 18,073 | 19,303 |
| Total Compensation ($) | 6,890,710 | 8,486,374 | 9,009,803 |
Deferred compensation details (FY 2024):
| Metric | FY 2024 |
|---|---|
| Deferred Compensation Contributions ($) | 1,290,742 |
| Aggregate Earnings ($) | 1,607,782 |
| Aggregate Balance at FY End ($) | 11,537,440 |
Performance Compensation
Annual LTI grant sizing and vehicles (Dec 7, 2023 grant for FY 2024):
| Metric | FY 2024 |
|---|---|
| Target Award Value ($) | 6,550,000 |
| PSUs Target (#) | 22,071 |
| RSUs Target (#) | 22,071 |
| LTI Mix | 50% PSUs / 50% RSUs for non-CEO NEOs |
PSU performance framework and payout (Fiscal 2022 grant, 3-year period FY2022–FY2024):
| Metric | Threshold | Target | Max | Actual Result | Payout Factor |
|---|---|---|---|---|---|
| Non-GAAP Operating Margin | 26.4% | 28.4% | 32.4% | 29.6% | 130% |
| Relative TSR (vs S&P 500) | 25th %ile | 50th %ile | 75th %ile | 73rd %ile | 193% |
| Total PSU Payout Factor | — | — | — | — | 161.5% |
| PSUs Earned (Raja) | — | 16,725 target | — | — | 27,011 earned |
RSU/PSU vesting schedules (as disclosed):
- RSUs: 12/7/2023 grant vests one-third on each of Dec 19, 2024; Dec 19, 2025; Dec 19, 2026 . 12/12/2022 grant vests half on Dec 19, 2024 and half on Dec 19, 2025 . 12/2/2021 RSUs vested in full on Dec 19, 2024 .
- PSUs: 12/7/2023 grant scheduled to vest Dec 19, 2026 subject to performance . 12/12/2022 scheduled to vest Dec 19, 2025 subject to performance . 12/4/2020 scheduled to vest Oct 26, 2025 subject to performance .
- Additional shares became eligible to vest in Dec 2024 due to performance goal achievement: 10,286 (Raja, 2021 PSU grant) .
Equity Ownership & Alignment
Beneficial ownership and guidelines:
- Shares beneficially owned (as of Dec 31, 2024): 338,061; percent of class: <1% (811,197,923 shares outstanding reference) .
- Stock ownership guidelines for Section 16 officers: 3× base salary; officers may not sell below guideline; all officers in compliance as of Dec 31, 2024 .
- Hedging and pledging prohibitions: Directors and Section 16 officers are prohibited from hedging and from pledging or margining company stock .
Outstanding equity awards (Fiscal 2024 year-end – Prabu G. Raja):
| Grant Date | Unvested RSUs (#) | Market Value of Unvested RSUs ($) | Unearned PSUs (#, target) | Market/Payout Value of Unearned PSUs ($) |
|---|---|---|---|---|
| 12/7/2023 | 22,071 | 4,116,683 | 22,071 | 4,116,683 |
| 12/12/2022 | 18,287 | 3,410,891 | 27,430 | 5,116,244 |
| 12/2/2021 | 5,575 | 1,039,849 | 16,725 | 3,119,547 |
| 12/4/2020 | — | — | 33,769 | 6,298,594 |
Stock vested and withholding (FY 2024):
| Metric | Value |
|---|---|
| Shares acquired on vesting (#) | 72,646 |
| Value realized on vesting ($) | 11,792,625 |
| Shares withheld for taxes (#) | 36,021 |
Insider activity around vesting dates (indicative for selling pressure monitoring):
- Morningstar transaction log shows an Oct 26, 2025 disposition of 32,830 shares and acquisition of 33,769 shares by Prabu G. Raja (consistent with vesting cycles) .
Employment Terms
- No stand-alone employment agreement or cash severance for NEOs other than the CEO; thus Dr. Raja has no separate severance cash entitlement .
- Double-trigger change-of-control equity acceleration: Equity awards accelerate if not assumed/substituted upon CoC, or if terminated without cause/resigns for good reason within 12 months post-CoC; estimated acceleration value for Raja was $27,218,491 as of Oct 25, 2024 .
- Value Creation Awards (special performance-based awards granted in fiscal 2021): provide accelerated vesting upon involuntary termination without cause; estimated acceleration value for Raja was $12,597,188 as of Oct 25, 2024 .
- Qualified retirement provisions (age ≥60 and ≥5 years service): partial RSU acceleration and partial PSU payout at actual performance; Raja met conditions as of fiscal year-end; estimated value $15,430,054 as of Oct 25, 2024 .
- Compensation recovery (clawback) policy compliant with SEC listing standards, covering incentive-based compensation upon accounting restatement; legacy clawback also applies to misconduct-driven restatements .
Performance & Track Record
- FY 2024 leadership highlights: Delivered record Semiconductor Systems revenue of $19.9 billion (fifth consecutive year of growth) and grew gross margin; maintained leadership in foundry-logic, DRAM, packaging and ICAPS; strengthened positions at key device architecture inflections (Gate-All-Around, Backside Power Distribution, 4F², 3D-DRAM, advanced packaging) .
- Company FY 2024 non-GAAP EPS: $8.65; non-GAAP gross margin: 47.6% .
- PSU performance alignment: FY2022–FY2024 PSU cycle paid 161.5%, reflecting non-GAAP operating margin of 29.6% and relative TSR at 73rd percentile .
Expertise & Qualifications
- Education: Ph.D. in Plasma Physics, IIT Delhi; post-doctoral research at Ehime University (Japan) and University of Iowa .
- Technical credentials: Applied Fellow (2010) and 150+ patents; product leadership across PVD, Etch, ALD, patterning, and advanced packaging .
Compensation Structure Analysis
- Pay mix and LTI design: For non-CEO NEOs, LTI is split 50% PSUs and 50% RSUs, directly tying realized equity to multi-year non-GAAP operating margin and relative TSR performance while maintaining retention through time-based RSUs .
- FY 2024 annual bonus rigor: Initial non-GAAP EPS hurdle of $5.55 (actual $8.65), corporate scorecard modifiers 0.987–1.07, and uniform 1.1 individual performance factor; Raja’s actual bonus $1,229,580 on an $800,000 bonus-eligible base (135% target) .
- No tax gross-ups and no hedging/pledging; broad clawback coverage enhances alignment and governance discipline .
Equity Ownership & Alignment Indicators
- Ownership level: 338,061 shares; less than 1% of shares outstanding; meets 3× salary guideline, and selling below guideline is prohibited .
- Upcoming vesting: RSU schedules in 2025 and 2026 may result in tax withholding-related share reductions and potential discretionary sales; withheld shares in FY 2024 totaled 36,021 .
- Insider trade monitoring: Oct 26, 2025 disposition of 32,830 shares reported by Morningstar, proximate to PSU vesting events; monitor December and October windows for liquidity dynamics .
Investment Implications
- Strong pay-for-performance linkage: 50% PSU weighting with non-GAAP operating margin and relative TSR, and above-target PSU payout (161.5%) in the FY2022–FY2024 cycle, indicates incentive alignment with margin expansion and shareholder returns .
- Retention risk mitigants vs early retirement flexibility: Retirement eligibility triggers partial RSU acceleration and partial PSU payout ($15.43M as of FY2024), creating balanced incentives but some timing optionality; continued multi-year PSU exposure supports ongoing engagement .
- Change-of-control economics: No separate CoC cash severance, but double-trigger equity acceleration ($27.22M estimate) limits windfall risk while protecting earned value in strategic scenarios .
- Near-term selling pressure watch: Annual December and October vesting cycles, tax withholding, and observed October 2025 disposition suggest predictable liquidity events; monitor Form 4 filings around vest dates for incremental pressure .