Mark Gitin
IPG PHOTONICSAbout Mark Gitin
Mark M. Gitin, Ph.D., is IPG Photonics’ Chief Executive Officer and a director since June 5, 2024; age 58; education includes a B.S. in Electrical Engineering (UC Davis) and M.Eng./Ph.D. in Electrical Engineering (Cornell) . His 2024 priorities included exiting Russian operations without shipment disruption and acquiring cleanLASER, while refocusing growth across welding, medical, cleaning, and micro‑machining solutions . Company performance in 2024 reflected industry headwinds: net sales of $977M and net income of $(182)M, with cumulative TSR measure at $50 and peer group TSR at $176 in the proxy’s pay‑versus‑performance framework . Despite revenue pressure, IPG ended 2024 with $930.2M cash, strong operating cash flow ($248M), and repurchased $344M of stock, underpinning strategic flexibility under his leadership transition .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| MKS Instruments | Executive Vice President & GM, Photonics Solutions Division; previously VP & GM Photonics; added Instruments & Motion BU responsibility in 2018 | 2017–2024 | Led photonics businesses, integrating adjacent instrumentation/motion to broaden solutions; strategic growth leadership |
| Coherent, Inc. | VP Strategic Marketing; VP Business Development; VP & GM Diodes, Fibers & Systems | 1995–2017 | Built product lines across lasers/optics; marketing and BD roles drove portfolio expansion in diodes, fibers, systems |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| None disclosed | — | — | — |
Fixed Compensation
| Item | 2024 | Notes |
|---|---|---|
| Annual Base Salary | $775,000 | Set in employment agreement dated April 25, 2024 |
| Salary Earned (partial year) | $411,346 | From June 5, 2024 start through year-end |
| New‑Hire Bonus (2024) | $775,000 | 100% of base; paid at same time as AIP payouts; Gitin did not participate in AIP |
| Perquisites | $514,720 | Relocation stipend $500,000; temporary housing $14,720 |
Director service compensation: Gitin receives no additional pay for Board service .
Performance Compensation
| Incentive Type | Metric | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| PSUs (2024 grant) | Organic Revenue Growth | 25% of LTI value (at target) | Targets not disclosed (competitive sensitivity) | Not yet determined; 3‑year period (2024–2026) | Cliff vest on June 5, 2027, subject to achievement |
| PSUs (2024 grant) | Adjusted Operating Margin | 25% of LTI value (at target) | Targets not disclosed (competitive sensitivity) | Not yet determined; 3‑year period (2024–2026) | Cliff vest on June 5, 2027, subject to achievement |
| RSUs (2024 grant) | Time‑based | 50% of LTI value | N/A | N/A | Three equal annual installments starting June 5, 2025 |
Award sizes (2024 grants): RSUs 28,791 shares; PSUs 28,790 target split equally across the two metrics; threshold PSUs shown as 7,197 in outstanding equity table .
Historical PSU outcomes (context for design rigor): 2021 PSU cash‑flow ratio vested at 66.3% of target; 2021 relative TSR PSUs paid 0%; 2022 PSUs (organic revenue and operating margin) paid 0% in March 2025 (below threshold) .
AIP (annual bonus) framework (context): For 2024, IPG revised AIP mid‑year due to macro uncertainty; shifted to 2H net sales only, capped at 62.5% of original target. Gitin did not participate and instead received the fixed new‑hire bonus .
Equity Ownership & Alignment
| Category | Detail |
|---|---|
| Beneficial Ownership (3/31/2025) | 0 shares beneficially owned; no right to acquire within 60 days noted |
| Unvested RSUs | 28,791 shares; $2,093,682 market value at $72.72 (12/31/2024) |
| PSUs Outstanding | Threshold count 7,197 shares; target 28,790 per grant disclosure |
| Stock Options | None outstanding for Gitin |
| Ownership Guidelines (Executives) | CEO must hold 5x salary; unvested time‑based RSUs count; unvested PSUs do not; four‑year phase‑in |
| Guideline Compliance Status | NEOs exceeded or within phase‑in as of 12/31/2024; Gitin within phase‑in window |
| Hedging/Pledging | Prohibited for all directors/officers (anti‑hedging and anti‑pledging policy) |
Insider selling pressure: No Form 4 transactions are disclosed in the proxy for Gitin; potential selling pressure would be driven by time‑based RSU vesting from June 2025 and tax withholding practices, subject to anti‑hedging/pledging restrictions .
Employment Terms
| Term | Detail |
|---|---|
| Start Date & Role | CEO and director effective June 5, 2024 |
| Agreement Term | Initial term through Dec 31, 2025; auto‑renews for successive one‑year periods unless 180‑day notice by either party |
| Base Salary & Annual Bonus Eligibility | Base $775,000; eligible for annual bonus per agreement (2024 new‑hire bonus in lieu of AIP) |
| Initial Equity | $5,000,000 grant‑date fair value, 50% PSUs / 50% RSUs; PSUs same metrics/timing as other NEOs; RSUs vest over 3 years |
| Severance (no cause / good reason) | 24 months salary continuation; pro‑rated bonus based on actuals; up to 24 months health premium reimbursement; full vest of 2024 CEO awards (PSUs at target); RSUs deemed monthly for acceleration |
| Change‑of‑Control (double‑trigger) | Lump‑sum 24 months base pay; up to 24 months health premiums; pro‑rated bonus plus 2x target annual bonus; all equity fully vests at target |
| Non‑Compete / Non‑Solicit | Non‑compete 1 year; non‑solicit 18 months; base salary paid during enforced non‑compete period up to 1 year |
| Clawbacks | Dodd‑Frank compliant clawback (restatements; 3‑year lookback) and prior misconduct‑based policy; award‑level forfeiture for competitive/solicitation/confidentiality breaches |
| Anti‑Hedging/Pledging | Company‑wide prohibitions apply |
Board Governance and Committee Roles
- Board service: Director since 2024; no committee memberships (CEO/director dual role) .
- Independence: Gitin is not independent; Board is led by a non‑executive independent Chair (John Peeler); 7 of 10 nominees are independent; Audit and Compensation Committees are fully independent .
- Executive sessions: Independent directors meet at least quarterly without management; Board/committees held 7/8/9 meetings in 2024; all incumbent directors attended ≥75% of aggregate meetings .
- CEO outside boards: Policy limits CEO to no more than one other public company board; none disclosed for Gitin .
Director Compensation (context): Non‑employee directors receive cash retainers and annual RSUs; Gitin receives no additional compensation for Board service as CEO .
Compensation Structure Analysis
- Mix shift: For 2024, Gitin’s “at‑risk” share was lower due to the fixed new‑hire bonus; otherwise CEO pay is majority variable with 50% performance‑based LTI (PSUs) .
- PSU metrics: Emphasis on organic revenue growth and operating margin aligns with long‑term value drivers; targets undisclosed to avoid competitive harm; payout caps at 200% .
- Annual incentive governance: Mid‑year AIP revision capped payouts at 62.5% due to macro uncertainty; Gitin excluded and received fixed bonus per agreement, highlighting retention orientation in transition year .
- Practices: No single‑trigger CIC benefits; no option repricing; no excise tax gross‑ups; anti‑hedging/pledging; independent comp consultant (FW Cook) .
Say‑On‑Pay & Shareholder Feedback
- Say‑on‑pay approval: Over 96% support in 2024; Committee maintained core pay‑for‑performance philosophy while accommodating CEO transition .
Expertise & Qualifications
- Technical and industry depth: 30+ years in lasers/optics; leadership across product, marketing, BD, and GM roles; education from UC Davis and Cornell .
- Board qualifications: Technology/lasers domain expertise; executive leadership; manufacturing/operating experience; risk management competence .
Equity and Award Detail (Grant Mechanics)
| Grant | Date | RSUs (#) | PSUs at Target (#) | Notes |
|---|---|---|---|---|
| CEO New‑Hire Equity | June 5, 2024 | 28,791 | 28,790 | PSUs cliff vest June 5, 2027; RSUs vest annually over 3 years |
Outstanding at 12/31/2024:
| Type | Count | Market/Payout Value Basis |
|---|---|---|
| Unvested RSUs | 28,791; $2,093,682 at $72.72 | Market value based on 12/31/2024 close price |
| PSUs (threshold) | 7,197; $523,366 | PSU outstanding reported at threshold; vesting subject to performance |
Performance & Track Record
- Strategic actions: Completed Russia divestiture in Aug 2024; acquired cleanLASER in Dec 2024; prioritized diversification to welding/medical/cleaning/micro‑machining, cost optimization, and manufacturing footprint efficiency .
- Financial posture: Cash/cash equivalents/short‑term investments of $930.2M; operating cash flow $248M; share repurchases $344M in 2024 .
- Market context: Net sales declined 24% in 2024 amid industrial/e‑mobility downturn; gross margin 35% impacted by inventory provisions and lower absorption; AIP adjusted to reflect macro reality .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited—reduces misalignment risk .
- CIC/Severance: Double‑trigger vesting and capped structure; no excise tax gross‑ups—shareholder‑friendly .
- Clawbacks: Robust Dodd‑Frank compliant policy with prior misconduct recoupment clauses; award‑level forfeiture provisions .
- Related party oversight: Audit Committee policy for >$120k transactions; 2025 registration rights with Gapontsev Trusts noted; independent committees oversee risks .
Compensation Peer Group (2024)
Peer set includes Advanced Energy, Albany International, Allegro MicroSystems, Barnes Group, Cognex, Coherent, Dolby, Donaldson, FormFactor, Graco, IDEX, ITT, Kadant, Littelfuse, Lumentum, MKS Instruments, Nordson, Novanta, Onto Innovation, OSI Systems, Watts Water. Committee does not target a fixed percentile; uses judgment with FW Cook inputs .
Investment Implications
- Alignment and retention: Gitin’s structure emphasizes long‑term PSUs linked to organic revenue and margin, with RSUs vesting over three years; robust clawbacks and anti‑hedging/pledging lower governance risk, while double‑trigger CIC limits windfalls .
- Near‑term selling pressure: Beginning June 2025, RSU vesting and standard tax withholding could prompt routine dispositions; no pledging/hedging permitted; beneficial ownership currently zero, with alignment building via RSUs/PSUs .
- Execution risk vs. incentives: PSU calibration historically stringent (recent PSU payouts at/below threshold), aligning upside to performance recovery; macro‑sensitive AIP adjustments show discipline, but highlight market cyclicality in core end‑markets .
- Governance structure: Non‑executive Chair and fully independent key committees mitigate dual‑role risks; strong investor support (96% say‑on‑pay) suggests confidence in pay design during leadership transition .