Chin-Chi Teng
CADENCE DESIGN SYSTEMSAbout Chin-Chi Teng
Senior Vice President and GM of Cadence’s Digital & Signoff Group since September 2018; previously Corporate VP R&D (2015–2018) and VP R&D (2009–2015). Age 59 as of February 20, 2025; education: B.S. Electrical Engineering, National Taiwan University; Ph.D. Electrical and Computer Engineering, University of Illinois Urbana-Champaign . Cadence delivered 13.5% revenue growth in 2024 with record backlog of $6.8B, and TSR increased to $433 from a $100 baseline over five years; compensation design ties >80% of exec pay to long-term stock performance, aligning incentives with TSR and stock price outcomes . Teng’s 2024 executive leadership priorities included proliferating AI initiatives (Cerebrus, >750 tape-outs; 40 new Cerebrus customers; 36 new full-flow logos) and hyperscaler wins, underscoring execution against growth vectors that drive revenue and margin outcomes in the SEBP framework .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cadence Design Systems | Senior Vice President & GM, Digital & Signoff Group | Sep 2018–Present | Leads digital full-flow and signoff; spearheaded AI initiatives and hyperscaler wins |
| Cadence Design Systems | Corporate Vice President, R&D | Jun 2015–Sep 2018 | Drove R&D leadership prior to GM role |
| Cadence Design Systems | Vice President, R&D | Mar 2009–Jun 2015 | Led R&D teams across EDA products |
| Cadence Design Systems | Multiple roles since 2002 | 2002–2009 | Progression through engineering leadership |
External Roles
Not disclosed in company filings for public boards or external directorships .
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $475,000 | $475,000 |
| Target Bonus (% of Salary) | 100% | 100% |
| Actual Bonus Paid ($) | $580,438 | $482,241 |
Performance Compensation
Annual Incentives (SEBP) – 2024 structure and outcomes
| Component | Weight | 1H 2024 Target | 1H 2024 Actual | 1H Company Factor | 2H 2024 Target | 2H 2024 Actual | 2H Company Factor |
|---|---|---|---|---|---|---|---|
| Revenue (USD mm) | 45% | $2,102 | $2,056 | 87.0% | $2,560 | $2,571 | 101.68% |
| Non-GAAP Operating Margin (%) | 55% | 39.7% | 39.5% | 87.0% | 45.3% | 45.4% | 101.68% |
| Individual Performance Factor (Exec Leadership 80%, Culture 20%) | — | Goals set; evaluated semi-annually | Teng focus: AI proliferation, hyperscalers, leadership rotation | — | — | — | — |
| Half | % of Target | Payout ($) |
|---|---|---|
| 1H 2024 | 93.4% | $221,915 |
| 2H 2024 | 109.6% | $260,326 |
2024 Equity Grants (annual program)
| Award Type | Grant Date | Shares/Options | Exercise Price | Vesting | Grant Date Fair Value ($) |
|---|---|---|---|---|---|
| Incentive Stock Award (time- and performance-based) | 3/15/2024 | 9,605 | — | 1/3 at ~12 months; remainder in four semi-annual installments; subject to performance goals | $2,866,516 |
| Stock Options | 3/15/2024 | 14,135 | $298.44 | 1/48 monthly; 7-year term | $1,473,202 |
Long-Term Performance Awards (LTP) – stock price/relative TSR
| Cycle | Key Hurdles | Measurement/Vesting | Status |
|---|---|---|---|
| 2019 LTP | 20-day avg price threshold $77.80; goal $138; relative TSR ≥35th percentile vs S&P MidCap 400 IT & S&P 500 IT (as of 3/15/2019) | 33% cap per measurement; first vest 3/15/2022; subsequent 2023, 2024 | 33% vested 3/15/2022 at $146.72; 34% vested 3/15/2023 at $196.09; remainder vested 3/15/2024 at $304.92; TSR 89th/91st percentile |
| 2022 LTP | 20-day avg price threshold $245; goal $359; relative TSR ≥35th percentile; first measurement 3/15/2025; 33% cap per measurement; 3-month lookback | Earned shares held one year; proration/acceleration rules per CIC/termination | First measurement achieved; 33% vested on 3/15/2025 (lookback threshold $282.62 met on 12/16/2024; TSR 82nd percentile) |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of 3/10/2025) | 123,776 shares; right to acquire within 60 days via options: 30,389 shares; less than 1% of shares outstanding |
| Ownership % | ~0.045% (123,776 / 274,313,598) |
| Options Outstanding (12/31/2024) | Exercisable: 50,477; Unexercisable: 28,872; strike prices spanning $56.57 to $298.44; various expirations 2026–2031 |
| Unvested Stock Awards (12/31/2024) | 2,216; 6,262; 9,605 shares; aggregate market value at $300.46/share: $5,433,218 |
| LTP Awards (unearned as of 12/31/2024) | 110,941 shares; indicative payout value $33,333,333 at $300.46/share |
| 2024 Exercises/Vesting (realized) | Options exercised: 67,942 shares; value realized $12,957,106. Stock awards vested: 52,238 shares; value realized $15,490,388 |
| Ownership Guidelines | 1x base salary for executive officers; all executives met guidelines as of FY2024 year-end |
| Hedging/Pledging Policy | Prohibits hedging, short-sales, and pledges or margin accounts for Cadence stock |
| 10b5-1 Trading Plans (insider selling) | Adopted plans to sell up to 26,390 shares on 3/7/2025 (expires 9/2/2025) , and up to 18,096 shares on 8/7/2025 (expires 1/30/2026) |
Employment Terms
| Element | Summary |
|---|---|
| Plan/Agreement | Participant in Executive Severance Plan; transition agreement governs post-termination terms |
| Triggers | Severance on termination without cause; constructive termination only in CIC window (3 months pre to 13 months post CIC) |
| Cash Severance (No CIC) | $4,000 monthly employment up to one year; COBRA paid for one year; lump sum 1 year base salary (First Transition Payment Date); lump sum 100% base salary at end of transition (Second Transition Payment Date) |
| Equity (No CIC) | Acceleration of time-based awards scheduled to vest in next 12 months; performance-based awards may continue to vest within 12 months if performance period ends and conditions met |
| CIC Treatment (Double Trigger) | 100% immediate vesting of outstanding/unvested equity; additional lump sums equal to 50% base salary at each transition payment date; no tax gross-ups; “best after-tax” alternative |
| Restrictive Covenants | During transition: no competition, employee solicitation, or interference with Cadence relationships; cooperation obligations; violations cease benefits |
| Clawback | Mandatory recovery of erroneously awarded incentive comp after accounting restatement; legacy policy applies pre-10/2/2023 |
Potential Payments (Estimated at 12/31/2024)
| Scenario | Transition Salary ($) | Lump Sum 1 ($) | Lump Sum 2 ($) | COBRA ($) | Option Acceleration ($) | Stock Award/LTP Acceleration ($) | Pre-Tax Total ($) |
|---|---|---|---|---|---|---|---|
| Termination without Cause (No CIC) | $24,000 | $475,000 | $475,000 | $45,841 | $1,372,430 | $14,740,231 | $16,987,762 |
| Termination with Constructive Termination in CIC Window (Double Trigger) | $24,000 | $712,500 | $712,500 | $45,841 | $2,146,769 | $16,433,359 | $20,074,969 |
| Death | — | — | — | — | $1,372,430 | $12,157,121 | $12,157,121 |
| Permanent Disability | $45,841 (COBRA) | — | — | $45,841 | $1,372,430 | $10,784,690 | $12,202,962 |
Performance & Track Record
- 2024: Cadence delivered 13.5% revenue growth; record backlog $6.8B; strength across core EDA, IP, and hardware, with Palladium Z3/Protium X3 driving a record hardware year .
- Teng’s 2024 leadership focus: proliferation of AI (Cerebrus) with >750 tape-outs, 40 new customers; hyperscaler wins; rotation of senior leadership, supporting execution in Digital & Signoff .
- Pay-versus-performance: Cadence’s Compensation Actually Paid shows strong correlation with TSR; five-year total shareholder return value rose to $433 vs $300 peer group, with non-GAAP operating income rising to ~$1.97B in 2024 .
Compensation Structure Analysis
- Mix and risk: Significant portion of pay at risk; options used historically (34% for non-CEO NEOs in 2024), shifting to PSUs and time-based RSUs in 2025 to enhance performance orientation and diversify away from absolute price-only reliance .
- LTP cadence and hurdles: Continued “double” orientation with 2025 LTP requiring thresholds aligned to market value creation; capped value at 2.5x baseline to manage windfall risk .
- Governance-friendly features: Clawback policy, anti-hedging/pledging, no tax gross-ups, double-trigger CIC vesting only; say-on-pay approval ~90% in 2024 and ~91% five-year average .
Equity Ownership & Alignment
| Category | Detail |
|---|---|
| Stock Ownership Guideline | Requires 1x salary; compliant |
| Hedging/Pledging | Prohibited; reduces misalignment risk |
| 10b5-1 Plans | Near-term selling capacity up to 44,486 shares across two plans expiring Sept 2, 2025 and Jan 30, 2026 |
Employment Terms (Non-Compete, Non-Solicit)
- During the transition period post-executive role (up to one year), non-compete and non-solicit restrictions apply, with benefits contingent on compliance; violations terminate unpaid benefits .
Investment Implications
- Alignment: High alignment via multi-year equity and LTP awards with stringent absolute and relative TSR hurdles; anti-hedging/pledging and ownership guidelines reinforce alignment .
- Retention risk: Moderate; severance provides meaningful cash and equity acceleration on double trigger, but no single-trigger CIC and no gross-ups; restrictive covenants in transition period reduce competitive exit risk .
- Trading signals: Two active 10b5-1 plans (up to 44,486 shares) could create periodic selling pressure; these are pre-scheduled under Rule 10b5-1 and may net settle for taxes on vesting events .
- Execution track record: Teng’s leadership in AI-enabled design flows and hyperscaler wins supports revenue/margin outcomes tied to SEBP, increasing probability of continued bonus realizations; option and LTP realizations signal strong historical value creation .
- Governance: Strong say-on-pay support and compensation reforms (PSUs in 2025) indicate responsiveness to shareholder feedback and disciplined pay-for-performance .