Bren Higgins
KLAAbout Bren Higgins
Bren Higgins (age 55) is Executive Vice President and Chief Financial Officer of KLA, serving as CFO since August 2013 after joining KLA in 1999; he holds a B.A. from UC Santa Barbara and an MBA (Finance) from UC Davis . Over FY2021–FY2025, KLA scaled revenues to $12.16B (+75.7% vs FY2021) and net income to $4.06B (+95.4% vs FY2021), with free cash flow margin ~30–33% and TSR outperforming the S&P 500 and the Philadelphia Semiconductor Index on 3- and 5-year bases, aligning CFO incentives with value creation . FY2025 performance included revenues $12,156,162K (+23.9% YoY), net income $4,061,643K (+47.1%), and operating cash flow $4,081,903K (+23.4%), supporting strong bonus outcomes and PRSU design linked to relative free cash flow margin versus peers .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| KLA | Executive Vice President & CFO | Aug 2013–Present | Oversees finance, controls, global manufacturing operations, and IR; led multi-year growth and capital returns programs . |
| KLA | Vice President, Corporate Finance | Jan 2012–Aug 2013 | Led treasury/IR and supported business development; strengthened capital allocation and external communications . |
| KLA | Senior Director, Corporate Finance | Aug 2011–Jan 2012 | Advanced corporate finance capabilities and M&A support . |
| KLA | Senior Director, FP&A | Aug 2008–Aug 2011 | Built planning and analysis rigor through industry cycles . |
| KLA | Group Controller, Wafer Inspection Group | 2006–2008 | Drove financial discipline in a key product group . |
| KLA | Product Division Controller & IR/Finance roles | 1999–2006 | Diverse finance leadership across divisions . |
External Roles
- No external public company directorships or disclosed external governance roles for Higgins in the proxy .
Fixed Compensation
| Item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Base Salary ($) | 643,462 | 758,174 | 750,000 |
| Perquisites/Other ($) | 27,660 | 28,649 | 34,988 (financial planning $16,910; 401(k) match $10,250; insurance $6,204; other $1,624) |
Compensation program includes limited perquisites (e.g., company-paid financial/tax planning up to $20,000), broad-based benefits (401(k), ESPP, EDSP), and no stock options granted or exercised in FY2025 .
Performance Compensation
Annual Cash Bonus (Executive Incentive Plan)
| Metric | Weighting/Design | Target | Actual | Company Payout | Individual Multiplier | Higgins Payout |
|---|---|---|---|---|---|---|
| Operating Margin Dollars (CY2024) | Grid-based vs balanced scorecard | $3.93B (≈+13% vs CY2023) | $4.404B (≈+12% vs target) | 144% of target before individual multiplier | 120% (range 80–120%) | $1,433,077 (173% of target) |
| Balanced Scorecard (Financial/Quality/Talent) | Category weights 10–40% (Revenue, GM, OM, WFE share, program execution, talent) | 3+ = meets expectations | 4+ assigned by Board | Incorporated into 144% grid outcome | Included above | Included above |
Higgins’ target bonus rose from 100% (Jan–Jul 2024) to 125% (Aug–Dec 2024) of base salary; FY2025 disclosed CY2024 payout at $1.43M .
Long-Term Incentives (RSUs & PRSUs)
| Award Type | Grant Date | Target Value ($) | Shares (#) | Performance Metric | Vesting Schedule |
|---|---|---|---|---|---|
| RSU (FY2025) | 8/1/2024 | 3,000,000 | 3,633 | N/A (time-based) | 25% per year over 4 years |
| PRSU (FY2025) | 8/1/2024 | 3,000,000 | Threshold 908; Target 3,633; Max 7,266 | Relative Free Cash Flow Margin vs peer group (3-year to 6/30/2027); threshold 30th pct=25%, target 55th=100%, max ≥80th=200% | 100% vests at later of 3rd anniversary or performance determination, subject to service |
| EPS PRSU (Tranche 1) | FY2023 program | N/A | Actual Earned 4,564 | Non-GAAP EPS (two-year); achieved $49.11 → 131% payout | 100% vested 6/30/2025 |
| FY2022 PRSU | 8/4/2022 | N/A | Actual Earned 9,129 | Relative FCF margin (3-year to 6/30/2024); 82nd percentile → 150% payout | 50% vested Aug 2024; 50% Aug 2025 |
No stock options are granted under current practice; none exercised in FY2025 .
Multi‑Year Compensation Summary (Total Mix and Outcomes)
| Component ($) | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Stock Awards (grant-date fair value) | 9,737,890 | 5,855,158 | 5,494,737 |
| Non-Equity Incentive (Bonus) | 875,741 | 810,569 | 1,433,077 |
| Total Compensation | 11,284,753 | 7,452,550 | 7,712,802 |
Design emphasizes pay-for-performance with different short-vs-long metrics (Operating Margin Dollar + balanced scorecard for annual; Relative FCF margin and EPS for PRSUs), clawback policy, no hedging/pledging, double-trigger CoC, and no tax gross-ups .
Equity Ownership & Alignment
| Item | Data |
|---|---|
| Beneficial Ownership | 12,989.933 shares; <1% of outstanding . Outstanding shares 131,684,530 . |
| Ownership Guidelines | Exec VP/SVP must hold ≥2x salary in KLA stock; Higgins holds 25,093.814 “Total Shares” (RSUs + PRSUs with performance met), valued $22,477,533, equal to 30.0x salary (well above guideline) . |
| Anti-Hedging & Pledging | Company policy prohibits hedging and pledging; dividend equivalents accrue only upon vesting . |
| Vested vs Unvested Supply (as of 6/30/2025) | Unvested RSUs: 2,980 (8/4/2022, $2,669,305), 4,371 (8/3/2023, $3,915,280), 3,633.412 (8/1/2024, $3,254,592) . Unearned PRSUs/EPS: 20,968 ($18,781,428), 8,943 ($8,010,603), 8,742 ($7,830,559), 7,266.826 ($6,509,187) . |
The RSU 25%-per-year cadence and PRSU cliff vesting in 2026–2027 indicate ongoing vest events that can create periodic insider sale windows (subject to trading policy) .
Employment Terms
| Provision | Key Terms |
|---|---|
| Severance Plan | Higgins participates in the Amended & Restated 2010 Executive Severance Plan; benefits only upon qualifying termination within 1 year post‑change‑of‑control (double trigger) . |
| CoC Benefits (illustrative, if event occurred 6/30/2025) | Salary continuation $1,125,000; pro‑rated bonus $1,433,077; 100% acceleration of outstanding equity awards ($48,684,031) plus dividend equivalents ($795,675); total $52,037,783 . |
| Equity Treatment on CoC | Performance awards use shortened measurement period to nearest fiscal quarter; then follow vest or accelerate per plan; RSUs/PRSUs carry dividend equivalents payable only upon vest . |
| Clawback | SEC/NASDAQ‑compliant recovery policy effective 10/2/2023 for erroneously awarded incentive compensation . |
| Restrictions | Receipt of severance conditioned on release and non-solicitation covenants during payment period; no tax gross-ups; anti-hedging/pledging policy applies . |
| Deferred Compensation | EDSP balance $2,006,720; FY2025 contribution $423,750; aggregate earnings $232,135; no company match . |
Compensation Structure Analysis
- Strong pay-for-performance: majority at risk via bonus and PRSUs tied to operating margin dollars, balanced scorecard, relative free cash flow margin, and non-GAAP EPS; no options; clawback in place .
- Equity mix shifts to RSUs/PRSUs with three/four-year vesting, reinforcing retention and alignment; FY2025 PRSU maximum increased to 200% with higher threshold (80th percentile), raising performance bar .
- Say‑on‑pay support robust (92.5% FOR in 2024), indicating shareholder alignment with program design .
- No hedging/pledging and no gross-ups mitigate red‑flag risks; double‑trigger CoC benefits standard for sector .
Investment Implications
- Alignment: Higgins materially exceeds ownership guidelines (30x salary), with significant unvested equity and high-performance PRSU hurdles, indicating strong alignment and lower misalignment risk .
- Retention and selling pressure: Multi-year vest schedule (RSUs annually; PRSUs cliff in 2026–2027) implies periodic Form 4 activity but structured under trading windows; sizeable unearned PRSUs tied to peer‑relative FCF margin create retention hooks and performance sensitivity .
- Pay-for-performance linkage: CY2024 bonus driven by Operating Margin Dollar and a 4+ balanced scorecard demonstrates operational execution; FY2023/2022 PRSU/EPS outcomes (131% and 150% payouts) reflect sustained financial delivery, supporting confidence in management execution amid cyclical WFE dynamics .
- Change-of-control economics: Double-trigger design, meaningful equity acceleration, and no gross-ups align with best practices; potential CoC outlays (illustrative $52.0M) are largely equity-based and sensitive to stock price and performance determinations, reducing fixed cash risk .
Appendix: Detailed Tables
CY2024 Bonus Mechanics and Outcome (Company-Level)
| Category | Weight | Outcome | Score |
|---|---|---|---|
| Revenue | 20% | $10.847B; above plan | 4 |
| Gross Margin | 15% | 61.4%; slightly below plan | 3 |
| Operating Margin | 15% | 40.6%; slightly above plan | 4 |
| WFE Share & Program Execution | 40% | Share above plan; milestones met | 4+ |
| Talent (Turnover/Engagement/Hiring/Inclusion) | 10% | Low turnover; improved engagement; exceeded hiring goals | 4+ |
| Board Balanced Scorecard | — | Assigned | 4+ |
| Operating Margin Dollars | — | $4.404B | Grid → 144% |
Outstanding Equity Awards (Higgins, as of 6/30/2025)
| Grant | Type | Unvested/Unearned Shares (#) | Market Value ($) |
|---|---|---|---|
| 8/4/2022 | RSU | 2,980 | 2,669,305 |
| 8/3/2023 | RSU | 4,371 | 3,915,280 |
| 8/1/2024 | RSU | 3,633.412 | 3,254,592 |
| 8/4/2022 | PRSU (max) | 20,968 | 18,781,428 |
| 8/4/2022 | EPS Award (max) | 8,943 | 8,010,603 |
| 8/3/2023 | PRSU (max) | 8,742 | 7,830,559 |
| 8/1/2024 | PRSU (max) | 7,266.826 | 6,509,187 |
Ownership and Guidelines Compliance (as of 6/30/2025)
| Executive | Total Shares (#) | Value ($) | Ratio vs Salary |
|---|---|---|---|
| Bren Higgins | 25,093.814 | 22,477,533 | 30.0x |
Beneficial Ownership (as of 9/10/2025)
| Name | Shares Beneficially Owned | % of Outstanding Shares* |
|---|---|---|
| Bren Higgins | 12,989.933 | ~0.0099% (12,989.933 / 131,684,530) |
*Based on outstanding shares per proxy; computed from cited inputs .
Severance/Change‑of‑Control (Illustrative, if event at 6/30/2025)
| Component | Amount ($) |
|---|---|
| Salary Continuation | 1,125,000 |
| Pro‑Rated Bonus | 1,433,077 |
| Accelerated Vesting (Equity) | 48,684,031 |
| Dividend Equivalents | 795,675 |
| Total | 52,037,783 |
Deferred Compensation (EDSP, FY2025)
| Item | Amount ($) |
|---|---|
| Executive Contributions | 423,750 |
| Aggregate Earnings | 232,135 |
| Aggregate Balance (6/30/2025) | 2,006,720 |
Notes on Program Design and Peer Benchmarking
- Peer group includes AMD, Applied Materials, Lam Research, Texas Instruments, Broadcom, NVIDIA, Micron, Keysight, Teradyne, Microchip, ON Semiconductor, Skyworks, Qorvo, Marvell, Corning, GLOBALFOUNDRIES; Semler Brossy is the independent advisor; pay decisions reference peer market data without rigid formulas .
- FY2025 PRSU design increased maximum to 200% and raised max threshold to 80th percentile; RSUs/PRSUs carry dividend equivalents payable only upon vesting .
Risk Indicators & Governance
- Clawback policy effective 10/2/2023; insider trading policy prohibits hedging and pledging; anti‑gross‑up stance; double‑trigger CoC; robust stockholder outreach and high say‑on‑pay support .
Investment Implications
- High ownership and long‑dated vesting reduce near‑term misalignment risk; persistent vest cadence can create intermittent supply (monitor trading windows and Form 4s). Bonus construct tied to OM dollars and balanced scorecard plus PRSUs anchored to relative FCF margin and EPS provide strong linkage to cash generation and capital returns—key value drivers for KLA’s cycle-resilient model . CoC economics are predominantly equity‑sensitive and shareholder‑friendly (double trigger, no gross-ups), with clear retention hooks; overall signals suggest management confidence and disciplined capital allocation under Higgins’ finance leadership .