Sherri Luther
COHERENTAbout Sherri Luther
Sherri R. Luther is Chief Financial Officer and Treasurer of Coherent (COHR), appointed effective October 11, 2024. She previously served as CFO of Lattice Semiconductor (2019–2024) and earlier held senior finance roles at Coherent, Inc.; she is a CPA, holds an Executive MBA from Stanford GSB, a BBA in Accounting and Finance from Wright State, and serves on the Silicon Labs board; she was 59 at appointment . In fiscal 2025, Coherent delivered record revenue ($5,810.1M) and strong Adjusted EBITDA ($1,350.4M), driving a 170% payout under the GRIP cash plan; the company also reduced debt by $437M; the 2023–2025 PSU cycle paid at 108% on 3-year TSR of 43.73% (Luther did not participate in that PSU cycle) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Lattice Semiconductor | Chief Financial Officer | 2019–2024 | Led public-company finance and capital allocation; recruited to Coherent for transformation execution . |
| Coherent, Inc. (pre-acquisition) | Corporate Vice President of Finance | ~16 years (prior to 2019) | Deep domain finance leadership across lasers/photonics, supporting growth and integration . |
| Quantum; Ultra Network Technologies; Arthur Andersen | Senior finance/accounting roles | N/A | Built foundational FP&A, reporting, and audit expertise . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Silicon Labs | Director | N/A | Public company board; NACD Directorship Certified . |
Fixed Compensation
| Component | FY2025 Terms | Notes |
|---|---|---|
| Base Salary | $625,000 | Set at hire in Oct 2024 . |
| Target Annual Bonus % | 85% of base | Allocated 77% to GRIP, 8% to BIP . |
| Target Total Cash | $1,156,250 | Base + target bonus. |
| GRIP Cash Payout | $818,125 (170% of $481,250 target) | Tied to Revenue/Adj. EBITDA actuals (see Performance Compensation) . |
| BIP Cash Payout | $56,438 (112.8% of $50,000 target) | Tied solely to Adjusted EBITDA . |
| Total Non-Equity Incentive | $874,563 | Matches GRIP + BIP above . |
| Sign-on Cash Bonus | $500,000; repayable if departure before 2nd anniversary (other than CoC Good Reason/No Cause) | Retention clawback structure around 2 years . |
Performance Compensation
Annual Cash Incentives (FY2025 GRIP/BIP)
| Metric | Weight | Threshold (75% of target) | Target (100%) | Maximum (200%) | Actual | Weighted Payout |
|---|---|---|---|---|---|---|
| Revenue | 50% | $4,036.5M | $5,382.0M | $6,189.3M | $5,810.1M | 170% |
| Adjusted EBITDA | 50% | $897.7M | $1,196.9M | $1,376.4M | $1,350.4M | 170% |
| Total Weighted Payout | 170% |
- Plan design: GRIP uses 50% Revenue and 50% Adjusted EBITDA; BIP uses Adjusted EBITDA only; payouts 0–200%, with max at 115% of target performance .
- FY2025 attainment: BIP attainment 112.8% (Adj. EBITDA basis) .
- Governance note: FY2026 consolidates GRIP/BIP into a single EIP for simplicity .
Long-Term Equity (FY2025 Grants at Hire)
| Grant Type | Grant Date | Target Value ($) | Units | Vesting | Performance Metric/Notes |
|---|---|---|---|---|---|
| PSUs (Inducement + FY25) | 10/11/2024 | $10,440,000 | 118,583 target | 3-year cliff (FY2025–FY2027) | Relative TSR vs. S&P Composite 1500 Electronic Equip/Instr/Components; 0% <25th, 50% at 25th, 100% at 50th, 200% at ≥75th; cap 100% if absolute TSR negative . |
| RSUs (Total) | 10/11/2024 | $6,960,000 | 79,056 | Blend: $1.40M 3-year ratable; $5.56M 2-year ratable (approximates forfeited awards timing) | Time-based only; promotes retention . |
| Grant-date Fair Values (ASC 718) | 10/11/2024 | PSU $20,421,178; RSU $8,270,839 | PSUs threshold/target/max 59,292/118,583/237,166 | As disclosed in Grants of Plan-Based Awards table | PSU Monte Carlo per-share $172.21; RSUs at closing price; see footnotes . |
- Inducement overview: total $17.4M sign-on equity, with $3.5M FY2025 annual LTI ($2.1M PSUs/ $1.4M RSUs) and $13.9M make-whole (60% PSUs; 40% RSUs split over 2 years) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (8/31/2025) | 285 shares; “less than 1%” of outstanding; none pledged . |
| Unvested RSUs (excluded from 60-day test) | 94,748 units for Luther not vesting within 60 days of 8/31/2025 . |
| Outstanding PSUs (target) | 118,583 target PSUs from 10/11/2024 grant . |
| Shares Outstanding (context) | 156,917,911 shares as of 8/31/2025 . |
| Stock Ownership Guidelines | CEO: 3x salary; other executives: 1x salary; 3-year phase-in; all NEOs compliant or within phase-in . |
| Hedging/Pledging | Prohibited; includes bans on margin accounts, short sales, options, collars, exchange funds . |
| Clawback | NYSE Rule 10D-1 compliant policy (adopted Oct 2, 2023); restatement-based recovery . |
Vesting cadence and potential selling pressure:
- RSUs: $1.4M 3-year ratable vests annually on each anniversary of 10/11/2024; $5.56M sign-on RSUs vest 50% at ~12 months and 50% at ~24 months (subject to service) .
- PSUs: Single 3-year cliff based on relative TSR through FY2027; no interim vesting .
- Insider trading policy requires preclearance and prohibits trading during blackout windows; reduces opportunistic selling risk .
Employment Terms
| Term | Key Economics/Provisions |
|---|---|
| Start Date/Status | Appointed CFO & Treasurer effective Oct 11, 2024; at-will; reports to CEO . |
| Location | Primarily Santa Clara, CA; reasonable business travel . |
| Severance Plan | Participant in Revised Executive Severance Plan (RESP) with restrictive covenants (best efforts, non-compete, non-solicit, confidentiality); restricted period 12 months (non-CIC termination) or 24 months (CIC period termination) . |
| Change-in-Control Mechanics | Double-trigger equity vesting when awards are assumed; if not assumed/converted/replaced at CIC, awards accelerate per plan . |
| Acceleration Values (illustrative) | If terminated without cause/for good reason in connection with a CIC: RSU $7,052,586; PSU $10,578,789; total $17,631,375. Non-CIC involuntary or good reason: RSU $5,653,773; PSU $7,052,497; total $12,706,270. Death/Disability: RSU $7,052,586; PSU $3,526,293; total $10,578,879 . |
| Severance Cap Policy | Company committed to limit future cash severance to ≤3x base salary + target bonus (shareholder responsiveness) . |
| Indemnification | Standard indemnification agreement executed at start . |
Compensation Structure Analysis
- Mix and risk: Program shifted to 60% PSUs/40% RSUs for FY2025 to increase performance orientation; PSUs tied 100% to relative TSR, with a negative TSR cap at 100% payout to avoid windfalls .
- Annual incentive rigor: Thresholds set at 75% and maximum at 115% of target for both Revenue and Adjusted EBITDA; FY2025 outperformance drove a 170% payout .
- Make-whole design: Large sign-on equity ($13.9M) mirrors forfeited awards’ structure and vesting, increasing retention but front-loads equity; sign-on cash includes 2-year repayment protection .
- Governance: Double-trigger vesting, clawback, anti-hedging/pledging, ownership guidelines, and a commitment to severance caps reflect alignment with shareholder-friendly practices .
Compensation Peer Group (Benchmarking)
| Peer Group (FY2025) | Notes |
|---|---|
| AME, ANET, CIEN, GLW, ETN, ENTG, ITW, IPGP, KEYS, KLAC, LHX, LFUS, MKSI, ON, LITE, ROK, SWKS, TDY, TER, TRMB, WOLF, ZBRA, QRVO | Coherent revenue ranked at the 56th percentile vs. peers; used for compensation reference points . |
Equity Ownership & Alignment (Detail Table)
| Category | Amount |
|---|---|
| Common Shares Beneficially Owned (8/31/2025) | 285; “less than 1%” . |
| Unvested RSUs (excluded from 60-day vest window) | 94,748 . |
| Target PSUs Outstanding (grant 10/11/2024) | 118,583 . |
| Shares Outstanding (context) | 156,917,911 . |
| Shares Pledged | None . |
| Ownership Guidelines | 1x salary within 3 years (executives); phase-in applies . |
Governance and Committee
- Compensation and Human Capital Committee (FY2025): Michelle Sterling (Chair), Steve Pagliuca, Elizabeth A. Patrick, Sandeep Vij, Howard H. Xia .
- Practices: Independent consultant, fixed equity grant caps, annual say-on-pay, risk assessment, shareholder engagement .
Investment Implications
- Alignment: Elevated performance linkage via 60% TSR-based PSUs, double-trigger vesting, ownership guidelines, and anti-hedging/pledging are positive for alignment and reduce agency risk .
- Retention and selling pressure: Significant make-whole equity vests over 2–3 years with an initial 12-month cliff for sizable RSU tranches, creating near- and mid-term vesting events that could introduce scheduled selling windows; prohibitions and preclearance mitigate opportunistic sales .
- Pay-for-performance: FY2025 outperformance (Revenue/Adj. EBITDA) produced a 170% cash bonus payout; PSU design includes a negative TSR cap, moderating payouts in down markets .
- Downside protection boundary: Company’s commitment to severance caps (≤3x) and standardized RESP terms temper change-in-control cost risk; disclosed acceleration values quantify potential equity exposure under various termination scenarios .
- Execution track: Luther’s prior CFO tenure and domain familiarity, combined with FY2025 financial improvements and debt reduction, support confidence in ongoing repositioning; nonetheless, TSR-contingent PSUs concentrate risk to relative share performance through FY2027 .