Gary L. Fischer
AXTAbout Gary L. Fischer
Gary L. Fischer is Vice President, Chief Financial Officer and Corporate Secretary of AXT since August 2014. He is 74 years old (2025 proxy), holds a B.A. from UC Santa Barbara and an M.B.A. from Santa Clara University, and previously served in senior finance and operating roles at eRide and Integrated Silicon Solution, Inc. . Company performance context: revenue was $95.4M in FY2020, $137.4M in FY2021, $141.1M in FY2022, fell to $75.8M in FY2023, then improved to $99.4M in FY2024; EBITDA turned negative in 2023 and 2024 as the industry entered an “inventory correction” downcycle [GetFinancials: Revenues, citations in table]. Total shareholder return in pay-versus-performance disclosures was indexed at 92.06 (2021), 45.77 (2022), and 25.08 (2023) on a fixed $100 basis, reflecting cyclicality .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| AXT, Inc. | VP, CFO & Corporate Secretary | Aug 2014–Present | Finance leadership for compound semiconductor substrate maker; oversees operating plan metrics tied to exec incentives |
| eRide, Inc. | VP & CFO; later Consultant | 2005–2009 (VP & CFO); 2009–2014 (Consultant) | Led finance at fabless GPS/location company; continued as consultant post-acquisition |
| Integrated Silicon Solution, Inc. | President & COO; various roles | 1993–2005 | Senior operations leadership at advanced memory solutions provider |
Fixed Compensation
| Metric (USD) | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| Base Salary | $320,000 | $354,000 | $354,000 | $354,000 |
| Non-Equity Incentive Plan Bonus | $197,000 | $171,000 | $0 | $0 |
| Stock Awards (ASC 718 grant-date fair value) | $709,697 | $178,480 | $76,824 | $166,538 |
| Option Awards | $0 | $0 | $0 | $0 |
| All Other Compensation | $24,204 | $24,861 | $24,862 | $24,862 |
| Total Compensation | $1,250,901 | $728,341 | $455,686 | $545,400 |
Notes: 401(k) match and life insurance premiums included in “All Other Compensation” ($14,160 and ~$10.7K for Fischer in 2022–2024) .
Performance Compensation
| Program Component | Metric | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Executive Incentive Plan (annual, paid quarterly) | Corporate: Total Revenue, Gross Profit, OpEx, Net Income | 60% total; 10% each for revenue, gross profit, OpEx; 30% net income | Operating Plan per quarter | 2021: paid 112% of target ($197K); 2022: paid ~81% ($171K); 2023: 0% (industry downcycle); 2024: Q1 cash paid $63K; Q2–Q4 converted to 4-year RSAs | N/A (cash or RSA conversion) |
| Executive Incentive Plan | Individual performance | 40% | Committee objectives per quarter | Assessed quarterly; capped at 150% for individual portion | N/A |
| Long-Term Incentive | Restricted Stock Awards (RSAs) | N/A | Annual grants; 50% time-based, 50% performance-based tied to annual revenue | 2023: time-based grant 38,800 sh (11/10/23); perf-based 38,800 sh target (3/20/23), forfeited due to revenue below threshold; 2024: time-based grants 17,645 sh (8/20/24), 13,009 sh (10/29/24); perf-based target 38,800 sh (11/11/24) | 25% each anniversary over 4 years |
| Performance Metric Curve (example 2023) | Company Revenue (GAAP) | N/A | Target $110M; scaling from 0% ≤$95M to 200% ≥$125M | Revenue achieved $75.8M; at-risk shares forfeited | N/A |
Additional detail (2024): Fischer’s annualized target bonus was 60% of base ($212,400). Actual calculated bonus was $181,561 (85% of target) with $63,000 paid in cash (Q1) and the remainder converted to RSAs vesting over four years .
Equity Ownership & Alignment
| Date (as of) | Beneficial Shares | % of Shares Outstanding | Key Footnotes |
|---|---|---|---|
| Mar 24, 2023 | 564,373 | <1% | Includes RSAs/options exercisable within 60 days per SEC rules |
| Mar 22, 2024 | 614,728 | <1% | Includes RSAs/options exercisable within 60 days |
| Mar 21, 2025 | 671,615 | <1% | Includes 413,507 RSAs/converted shares and 258,108 options exercisable within 60 days |
Outstanding equity awards detail (examples):
- Options exercisable (selected grants): 10,280 sh @ $2.18 exp. 11/02/25; 65,685 sh @ $5.21 exp. 10/28/26; 34,203 sh @ $9.50 exp. 10/27/27; 55,500 sh @ $5.77 exp. 11/05/28; 71,256 sh exercisable and 21,184 unexercisable @ $3.06 exp. 11/06/29 .
- Unvested RSAs (market value at 12/31/2023): 38,800 sh valued $93,120 for Fischer (price $2.40) .
Policies:
- Anti-hedging and anti-pledging: hedging transactions, short sales, margin accounts and pledges prohibited for executives .
- Clawback: forfeiture/recoupment provisions in 2015 Plan; formal clawback policy adopted in 2023 .
Employment Terms
- Employment Agreement (Aug 11, 2014): If terminated without cause, payment limited to salary and earned compensation through termination date, plus any severance under company plan or as granted by Compensation Committee .
- Change-in-Control (within 12 months, involuntary separation): Severance equal to one year of then-current annual salary, 12 months of group health coverage continuation, and acceleration of stock options and any other equity awards .
- Non-compete requirement as part of release of claims: prohibition on working in AXT’s industry for the greater of one year from termination or two years from the date of the change-in-control .
- No tax gross-ups: AXT states it does not provide 280G/4999 or 409A gross-ups; equity awards structured to comply with applicable requirements .
Company Performance Context
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Revenue (USD) | $95.4M [GetFinancials]* | $137.4M [GetFinancials]* | $141.1M [GetFinancials]* | $75.8M | $99.4M [GetFinancials]* |
| EBITDA (USD) | $8.3M* | $20.0M* | $20.7M* | -$12.8M* | -$5.8M* |
*Values retrieved from S&P Global. 2023 revenue figure also disclosed in proxy operating plan achievement .
Pay-versus-performance (fixed $100 investment TSR index and net income):
- TSR index: 92.06 (2021), 45.77 (2022), 25.08 (2023) .
- Net income: $14,575K (2021), $15,811K (2022), -$17,882K (2023) .
Compensation Peer Group and Say-on-Pay
- Peer group targeting: Committee generally targets the 50th percentile of peer group for salary, target cash bonus, and long-term incentives; Compensia engaged as independent consultant .
- 2024 peer group examples: Alpha & Omega Semiconductor, Amtech Systems, Applied Optoelectronics, Cambium Networks, CEVA, EMCORE, FARO Technologies, GSI Technology, Intevac, Iteris, among others .
- Say-on-Pay results: Approved with over 85% support in 2023 , and 92.5% in 2024 (vote held May 16, 2024) .
| Year | Say-on-Pay Approval (%) |
|---|---|
| 2023 | >85% |
| 2024 | 92.5% |
Insider Trading Activity and Vesting-Driven Pressure
- Filed Form 4s in 2024–2025 indicating transactions; at least one filing references 10b5‑1(c) plan mechanics .
- Earlier (2020) Form 4 sales were effected pursuant to a Rule 10b5‑1 trading plan adopted Feb 24, 2020 .
- 2024 bonus conversion: Q2–Q4 calculated cash bonuses were converted into RSAs with four-year vesting, which typically spreads potential selling into vesting dates rather than immediate cash payouts .
Compensation Structure Analysis
- Cash vs equity mix: No cash bonuses for 2023 despite partial target achievements; long-term awards continued but performance RSAs were forfeited when revenue missed threshold .
- Shift to RSAs: AXT has not granted options since 2019; LTIs are restricted stock with 50% performance-based shares linked to annual revenue and four-year vesting .
- Discretionary actions: 2023 bonuses eliminated at Board/Committee discretion amid downcycle; 2024 calculated bonuses after Q1 converted to RSAs to reinforce long-term alignment .
- Clawback and anti-hedging/pledging: Policies mitigate misalignment and risk-taking .
Equity Ownership & Alignment Flags
- Ownership guideline disclosures: Not specified in proxies reviewed (no explicit multiple of salary requirement found).
- Pledging/hedging: Explicitly prohibited, reducing collateralization risk .
Employment Terms Summary (Severance and Change-of-Control Economics)
| Scenario | Cash Severance | Health Benefits | Equity Treatment | Non-Compete/Release |
|---|---|---|---|---|
| Termination without cause | Salary and earned compensation through termination; any plan-based severance | Per company plan/policy | As per plan; no acceleration specified without CoC | Release required; may include non-compete |
| CoC + involuntary separation within 12 months | One year of current annual salary | 12 months group health continuation | Acceleration of options and other equity awards | Non-compete for two years from CoC; release required |
Performance & Track Record
- 2021–2022: Revenue grew; net income positive; TSR index >45; bonuses paid near/below target reflecting plan achievements .
- 2023: Industry downcycle (“inventory correction”) drove revenue to $75.8M and a net loss; performance RSAs forfeited; no cash bonuses paid .
- 2024: “Almost all” financial metrics met/exceeded; Committee and management chose to forgo cash awards after Q1, converting calculated bonuses to four-year RSAs, emphasizing long-term alignment .
Investment Implications
- Alignment: Strong governance features (clawback, anti-hedging/pledging) and performance-linked RSAs improve pay-for-performance alignment; 2024 conversion of bonuses to RSAs reinforces retention and long-term focus .
- Retention risk: CoC protections for Fischer are modest (1x salary + 12 months health) versus typical 1–2x cash multiples, but full equity acceleration under CoC mitigates risk; no tax gross-ups .
- Selling pressure: Four-year RSA vesting and evidenced 10b5‑1 usage suggest paced sales rather than lump-sum cash bonuses; monitor Form 4s around quarterly vest dates .
- Execution risk: Cyclical exposure demonstrated in 2023 with forfeited performance awards and zero bonuses; 2024 recovery in metrics and continued pay-for-performance structure are positives, but EBITDA remained negative, indicating margin challenges through the recovery period [GetFinancials: EBITDA*].
S&P Global disclaimer: EBITDA and certain revenue values marked with an asterisk were retrieved from S&P Global.