Sheila DiPalma
COGNEXAbout Sheila DiPalma
Sheila M. DiPalma is Chief Culture Officer and Executive Vice President of Employee Services at Cognex; she joined the company in 1992, moved from Finance to Employee Services in 2016, was promoted to SVP in 2017, EVP in October 2020, and has served as Chief Culture Officer since 2021. She is 58, holds a B.S. in Accounting from Boston College, an M.S. in Taxation from Bentley College, and is a CPA; earlier in her career she worked at PricewaterhouseCoopers . As context for incentive alignment, Cognex’s 2024 revenue grew 9% (1% ex-Moritex), operating margin fell to 13%, adjusted EBITDA percentage was 17.1% (vs 19.6% target), and the company returned $119M to shareholders via dividends/buybacks . Over the 2020–2024 pay-versus-performance window, a $100 investment in CGNX was worth $69.20 at 2024 year-end (Peer Index: $114.14) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Cognex | Chief Culture Officer | Since 2021 | Leads culture initiatives to align with “Work Hard, Play Hard, Move Fast” ethos |
| Cognex | EVP, Employee Services | Promoted Oct 2020 | Oversees employee services; executive leadership of people, culture, communications, facilities |
| Cognex | SVP, Employee Services | Promoted 2017 | Executive people leadership; became a named executive officer |
| Cognex | Transition from Finance to Employee Services | 2016 | Broadened remit from Finance to human capital leadership |
| Cognex | Finance leadership (incl. Treasurer) | >20 years; Treasurer for six years (years not specified) | Treasury and finance leadership over multi‑decade tenure |
| Cognex | Senior Reporting Accountant | Joined 1992 | Early Finance role following external audit experience |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| PricewaterhouseCoopers | Auditor | Prior to 1992 | Early career at PwC; CPA credential |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base salary ($) | $310,154 | $323,000 | $335,000 |
| Target bonus ($) | — | $220,000 | $227,000 |
| Actual annual bonus paid ($) | $74,651 | $15,367 | $141,172 |
Performance Compensation
Annual bonus mechanics (2024)
- Program formula: Target Bonus × Corporate “Adjusted EBITDA %” achievement × Individual goal achievement; with a maximum “Pmax” by level . For DiPalma, Pmax was 250% of target in 2024 .
- Corporate metric: Adjusted EBITDA percentage; target 19.6%, minimum 12.7%, actual 17.1% → corporate payout factor 64% of target .
- Individual goals: 80% objective, 20% subjective; DiPalma’s 2024 individual achievement was 97.17% .
| Component | Weighting/Target | Actual 2024 | Payout/Result |
|---|---|---|---|
| Adjusted EBITDA % (corporate) | Target 19.6%; min 12.7% | 17.1% | 64% corporate factor |
| Individual goals | 80% objective / 20% subjective | 97.17% | Applied to bonus formula |
| Pmax cap | 250% of target for EVP level | Not reached (corporate < target) | Capped by corporate factor |
| Cash bonus outcome | Target $227,000 | — | $141,172 paid in Q1 2025 |
2024 equity grants (time-based)
| Grant type | Grant date | Shares/Options | Exercise price | Vesting | Grant-date fair value ($) |
|---|---|---|---|---|---|
| RSUs | 2/20/2024 | 12,678 | — | 20%/30%/50% annually beginning 2/20/2025 | $500,020 |
| Stock options | 2/20/2024 | 68,541 | $39.44 | 5 approx. equal annual installments beginning 2/20/2025 | $1,000,013 |
Compensation governance notes
- Committee/consultant: Independent Compensation/Stock Option Committee; Pay Governance LLC serves as independent advisor; independence reviewed, no conflicts found .
- Say‑on‑pay: 2024 support was ~65%; company responded by enhancing disclosures and adding PRSUs in 2025 for executives (broader than CEO) .
Equity Ownership & Alignment
Beneficial ownership and guidelines
| Item | Detail |
|---|---|
| Total beneficial ownership | 358,275 shares; <1% of outstanding |
| Near‑term acquirable (within 60 days) | 347,691 shares via options/RSUs (included in above) |
| Shares outstanding (record date) | 169,370,136 |
| Executive stock ownership guideline | 2× base salary for executive officers; 5‑year compliance period; executives making satisfactory progress as of record date |
| Hedging/pledging policy | Hedging prohibited; pledging prohibited without committee approval; trading windows/quiet periods apply |
Unvested RSUs at 12/31/2024 (market value at $35.86)
| RSU tranche | Unvested RSUs (#) | Market value ($) |
|---|---|---|
| Feb 2023 grant (20/30/50 schedule) | 3,880 | $139,137 |
| Feb 2024 grant (20/30/50 schedule) | 12,678 | $454,633 |
| Feb 2022/2024 earlier tranche | 8,472 | $303,806 |
Selected option tranches outstanding at 12/31/2024
| Grant | Exercisable | Unexercisable | Exercise price | Expiration |
|---|---|---|---|---|
| Feb 20, 2024 options | — | 68,541 | $39.44 | 2/20/2034 |
| Oct 30, 2020 options | 64,000 | 36,000 | $65.90 | 10/30/2030 |
| Feb 18, 2020 options | 64,000 | 16,000 | $50.94 | 2/18/2030 |
| Feb 22, 2022 options | 17,930 | 26,893 | $64.43 | 2/22/2032 |
Insider selling plan (10b5‑1)
| Adoption date | Plan term | Scope |
|---|---|---|
| March 3, 2025 | Through December 31, 2025 | Exercise of vested stock options to sell up to 4,002 shares under Rule 10b5‑1 plan |
Employment Terms
Change‑in‑control and clawback
- Change‑in‑control equity acceleration: For DiPalma’s applicable option/RSU agreements (Oct 2020, Feb 2022, Feb 2023, Feb 2024), unvested time‑based equity vests on a “double trigger” (CIC + involuntary termination within 12 months) .
- Estimated CIC acceleration amounts (as of 12/31/2024): 25,030 RSUs (≈$897,576 at $35.86) and 192,606 option shares would have accelerated; all unvested options had exercise prices above $35.86 at year‑end (i.e., OTM) .
- Clawback: Dodd‑Frank–compliant policy requires recovery of incentive compensation upon financial restatement; covers stock price/TSR–linked pay, three completed fiscal years lookback .
Performance & Track Record (context)
| Measure | 2024 outcome |
|---|---|
| Revenue growth | +9% YoY (1% ex‑Moritex) |
| Gross margin | 68.4%; down ~3 pts YoY |
| Operating margin | 13% of revenue (vs 16% in 2023) |
| Adjusted EBITDA % | 17.1% (vs 19.6% target used for bonuses) |
| Capital returns | $119M via dividends and repurchases |
| TSR (pay‑vs‑performance table base $100 at 12/31/2019) | $69.20 at 2024 year‑end; Peer Index $114.14 |
Compensation Structure Analysis
- Mix and trend: For 2024, DiPalma received $500,020 in RSUs and $1,000,013 in options (time‑based), broadly consistent with 2023 equity value; cash bonus rebounded to $141,172 from $15,367 in 2023, driven by a 64% corporate factor and 97.17% individual achievement .
- Pay‑for‑performance: Annual bonus tied to adjusted EBITDA % produced below‑target payouts in 2024 (64% corporate factor), demonstrating downside alignment; individual goals remain a meaningful modifier (97.17% for 2024) .
- 2025 program evolution: Company added PRSUs for executive officers (beyond CEO) and reduced option weighting, responding to 65% say‑on‑pay support in 2024 and investor feedback .
Risk Indicators & Red Flags
- 10b5‑1 plan adoption for up to 4,002 shares through 12/31/2025 suggests orderly, pre‑planned sales versus discretionary selling; monitor executions against plan cadence .
- Pledging/hedging: Prohibited for insiders (pledging requires committee approval); no pledges disclosed for DiPalma .
- Option repricing: No repricing disclosed; all unvested options OTM at $35.86 as of 12/31/2024, limiting immediate in‑the‑money value and near‑term selling pressure from options .
- Related‑party transactions: None requiring disclosure since the beginning of 2024 .
- Say‑on‑pay: 65% approval in 2024 indicates tepid support; company adjusted program in 2025 .
Compensation Peer Group (program benchmarking)
| Selected peers (2024) |
|---|
| Aspen Technology; Coherent; Dolby; IPG Photonics; Manhattan Associates; Novanta; Onto Innovation; PTC; Silicon Labs; Symbotic; Teledyne; Trimble; Zebra; National Instruments (used historically; dropped post‑acquisition) |
Equity Ownership & Beneficial Ownership Table (proxy snapshot)
| Holder | Beneficial ownership | % of class |
|---|---|---|
| Sheila M. DiPalma | 358,275 shares (incl. 347,691 acquirable within 60 days) | <1% |
Employment & Committee Process Notes
- Committee process: DiPalma, as EVP Employee Services, regularly attends Compensation/Stock Option Committee meetings except when her compensation is discussed; CEO not present for his own pay .
- Stock ownership guidelines for executives: 2× salary; 5‑year phase‑in; executives making satisfactory progress as of record date .
Investment Implications
- Alignment: Heavy equity mix, with sizeable option grants that were OTM at 2024 year‑end, limits immediate monetization and aligns upside to future stock appreciation; 2025 introduction of PRSUs for executives should strengthen performance linkage over multi‑year periods .
- Selling pressure: A modest 10b5‑1 plan to sell up to 4,002 shares through 2025 suggests limited near‑term selling overhang; monitor Form 4s for executions against plan .
- Retention/CIC: Double‑trigger vesting on change‑in‑control supports retention while mitigating single‑trigger windfalls; at 12/31/2024 an estimated 25,030 RSUs and 192,606 options would accelerate if CIC + qualifying termination occurred (options OTM at $35.86) .
- Governance risk: No related‑party transactions or pledging disclosed; say‑on‑pay at 65% in 2024 is a watch item but accompanied by 2025 program changes responsive to shareholders .