Brian Lorig
KLAAbout Brian Lorig
Executive Vice President, KLA Global Services. Age 51. Joined KLA in 1998; prior leadership roles in Manufacturing Operations and Service, including VP of U.S. Manufacturing & Operations and VP of Global Support & Services Field Operations. Education: B.S. in Supply Chain Management (Arizona State University) and MBA (Santa Clara University) . Company performance context during FY25: revenues $12,156,162 (+23.9% YoY), net income $4,061,643 (+47.1% YoY), service revenues $2,683,308 (+15.2% YoY), cumulative TSR value of $489.42 for a $100 initial investment since FY20 versus $277.82 peer index, and free cash flow margin 30.8% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| KLA | EVP, KLA Global Services | Not disclosed | Leads services enabling high availability/performance of installed base and maximizing long‑term system value |
| KLA | VP, U.S. Manufacturing & Operations | Not disclosed | Manufacturing operations leadership supporting scale and reliability |
| KLA | VP, Global Support & Services Field Operations | Not disclosed | Field services leadership driving customer uptime and support quality |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus % | Notes |
|---|---|---|---|
| 2025 | 543,654 | 100% (calendar 2025) | Target % increased to 100% for 2025 based on market positioning |
| 2024 | 521,251 | 90% / 100% (split CY2024) | 90% Jan–Jul; 100% Aug–Dec |
| 2023 | 496,731 | Not disclosed | — |
| 2024 Bonus Mechanics (Paid in FY25) | Value |
|---|---|
| Target Bonus ($) | 489,808 |
| Payout Multiple (Operating Margin Dollars + Balanced Scorecard) | 144% |
| Bonus Achievement % (Committee multiplier) | 110% |
| Actual Bonus Paid ($) | 775,855 |
| Actual as % of Target | 158% |
Performance Compensation
Annual Equity Grants (FY2025; grant date 8/1/2024)
| Instrument | Target Value ($) | Shares (#) | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|
| RSU | 2,000,000 | 2,422 | 1,831,579 | 25% per year over 4 years |
| PRSU (Relative Free Cash Flow Margin) | 2,000,000 | Threshold: 606; Target: 2,422; Max: 4,844 | 1,831,579 | Earned based on RCFM vs peer group; 100% of earned shares vest at ~3 years post grant/performance determination |
PRSU Metric Design (FY2025 cohort)
| Metric | Threshold | Target | Maximum | Payout at Threshold/Target/Max | Notes |
|---|---|---|---|---|---|
| Relative Free Cash Flow Margin (vs industry peer group, FY25–FY27) | 30th percentile | 55th percentile | 80th percentile+ | 25% / 100% / 200% of target shares | Maximum threshold increased to 80%ile; service vesting updated to single 100% vest at 3 years for FY2025 |
Historical PRSU Outcome (FY2022 cohort; earned in Aug 2024)
| Cohort | Metric | Threshold | Target | Max | Actual Result | Payout | Lorig Earned Shares (#) | Vesting |
|---|---|---|---|---|---|---|---|---|
| FY2022 PRSU | Relative Free Cash Flow Margin | 30th %ile | 55th %ile | 75th %ile | 82nd %ile | 150% of target | 3,844 | 50% Aug 2024; 50% Aug 2025 |
Stock Vested in FY2025 (supply considerations)
| Instrument | Shares Acquired on Vesting (#) | Value Realized ($) |
|---|---|---|
| RSUs/PRSUs (aggregate) | 10,214 | 7,649,334 |
Equity Ownership & Alignment
| Ownership Measure | Value |
|---|---|
| Beneficially Owned Shares | 576.102; less than 1% of outstanding |
| Shares Outstanding Reference | 131,684,530 |
| Stock Ownership Guideline (EVP/SVP) | ≥2x base salary |
| Lorig Guideline Compliance (as of 6/30/2025) | 13,650.773 “total shares” counted for guideline; value $12,227,543; ratio 22.2x |
| Hedging/Pledging | Prohibited for officers/employees |
| Clawback | SEC/NASDAQ‑compliant policy |
Outstanding Equity Awards at FY-end 2025 (unvested and unearned)
| Grant Date | Type | Units (#) | Market/Payout Value ($) | Vesting Notes |
|---|---|---|---|---|
| 8/1/2024 | RSU (unvested) | 2,422.275 | 2,169,729 | 25% per year over 4 years |
| 8/3/2023 | RSU (unvested) | 1,986 | 1,778,940 | 25% per year |
| 8/4/2022 | RSU (unvested) | 1,490 | 1,334,653 | 25% per year |
| 8/5/2021 | RSU (unvested) | 640 | 573,274 | 25% per year |
| 8/1/2024 | PRSU (max unearned) | 4,844.550 | 4,339,457 | Earn based on FY25–FY27 RCFM; 100% vest post performance determination |
| 8/3/2023 | PRSU (max unearned) | 3,973 | 3,558,775 | Earn based on FY24–FY26 RCFM; vest 50% at year 3 and 50% at year 4 |
| 8/4/2022 | PRSU/EPS Awards (max unearned) | 4,471; 8,385 | 4,004,854; 7,510,780 | FY22 PRSU earned at 150% and subject to 50% Aug’24/50% Aug’25 vesting; EPS Awards custom schedule |
Note: Market values based on $895.74 closing price on June 30, 2025 .
Employment Terms
| Plan/Policy | Key Terms | Economics |
|---|---|---|
| 2010 Severance Plan (Change of Control) | Double‑trigger; if terminated without cause or resigns for good reason within 1 year post CoC: 18 months base salary (lump sum), pro‑rated annual incentive (based on most recent year), 100% vesting acceleration of outstanding equity, 12‑month extension for post‑termination option/SAR exercise (not beyond original term) | For Lorig: salary/bonus continuation $825,000; pro‑rated bonus $775,855; accelerated vesting $23,898,079; dividend equivalents $370,487; total $25,869,421 |
| PRSU CoC Treatment | Performance period shortened to most recent fiscal quarter end preceding close; FY2025 PRSUs included at 200% of target for CoC table; EPS Awards included at 147% of target; FY2024 PRSUs included at 150% | |
| Excise Tax Cutback | Best‑net approach to reduce payments if 280G excise tax would apply | |
| Options | Company does not currently grant new options; no option exercises in FY2025 | |
| Ownership Guidelines | EVP/SVP ≥2x salary; compliance reviewed annually; unearned PRSUs not counted; RSUs/earned PRSUs counted | |
| Hedging/Pledging | Prohibited | |
| Clawback | SEC/NASDAQ‑compliant recovery on erroneous incentive comp upon financial restatement | |
| Deferred Compensation | Executive Deferred Savings Plan participation noted for Lorig; nonqualified plan, no Company match | |
| Pension | No pension/SERP; 401(k) generally available; Executive Retiree Medical program limited to certain legacy officers (only CEO eligible as of 6/30/2025) |
Compensation Structure Analysis
- Mix: Significant equity via RSUs and PRSUs; annual cash bonus tied to operating margin dollars and a balanced scorecard; PRSUs linked to Relative Free Cash Flow Margin and EPS Awards (no options) .
- FY2025 PRSU design tightened: higher max payout cap (200%) and tougher max threshold (80th percentile), plus single vest at ~3 years for earned shares—signals stronger long‑term performance focus and retention lock‑in .
- No tax gross‑ups on severance; best‑net excise cutback—shareholder‑friendly .
Equity Ownership & Alignment — Additional Detail
| Item | Detail |
|---|---|
| Beneficial Ownership (Direct/Indirect) | 576.102 shares; “*” indicates <1% |
| Guideline Compliance | 22.2x salary equivalent value vs 2x requirement (as of 6/30/2025) |
| Dividend Equivalents | RSUs/PRSUs carry dividend equivalents payable only upon vesting/settlement |
| Pledging/Hedging | Prohibited by policy |
Employment Contracts & Change‑of‑Control Economics
| Component | Lorig Amount ($) |
|---|---|
| Salary/Bonus Continuation (18 months salary) | 825,000 |
| Pro‑rated Bonus | 775,855 |
| Accelerated Vesting of Equity | 23,898,079 |
| Dividend Equivalents | 370,487 |
| Total (CoC termination) | 25,869,421 |
Risk Indicators & Red Flags
- No hedging/pledging permitted; no severance gross‑ups; double trigger required for CoC benefits—generally lower governance risk .
- Elevated unvested/uneared equity value (>$10m in RSUs; >$19m in PRSUs by market/payout value) creates vesting‑related supply risk windows (Aug anniversaries), but supports retention .
- Company reports strong pay‑for‑performance alignment; clawback in place .
Performance & Track Record Context
| Measure | FY2025 Result |
|---|---|
| Revenues | $12,156,162; +23.9% YoY |
| Net Income | $4,061,643; +47.1% YoY |
| Service Revenues | $2,683,308; +15.2% YoY |
| TSR (fixed $100 since FY2020) | $489.42; peer index $277.82 |
| Free Cash Flow Margin | 30.8% |
Given Lorig’s remit over Global Services, the 15.2% YoY service revenue growth provides supportive context for his domain performance .
Performance Compensation — Detailed Table
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Annual Bonus (CY2024): Operating Margin Dollars & Balanced Scorecard | Not disclosed | Grid‑based; target bonus $489,808 | Payout multiple 144%; bonus achievement 110% | $775,855 (158% of target) | Cash paid per plan |
| PRSU FY2025: Relative Free Cash Flow Margin | Not disclosed | 55th percentile | To be determined FY25–FY27 | 0–200% of target (threshold 25%; max 200%) | 100% vest at ~3 years post performance determination |
| PRSU FY2022: Relative Free Cash Flow Margin | Not disclosed | 55th percentile | 82nd percentile | 150% of target; Lorig 3,844 shares | 50% Aug 2024; 50% Aug 2025 |
Investment Implications
- Alignment: High ownership vs guideline (22.2x) and prohibition of hedging/pledging plus clawback support investor‑friendly alignment; pay design emphasizes cash generation (RCFM) and profitability (operating margin dollars), consistent with KLA’s capital return program .
- Retention vs supply: Large unvested RSU/PRSU balances and three‑year PRSU vesting cadence create retention hooks but also predictable vesting supply near August anniversaries; FY2025 realized vesting of 10,214 shares indicates potential liquidity near vest dates .
- Change‑of‑control economics: Double‑trigger and best‑net excise cutback mitigate headline risk; however, accelerated vesting value ($23.9m) under CoC termination would be material—monitor for M&A scenarios .
- Execution lens: Services growth (+15.2% YoY) aligns with Lorig’s domain; PRSU reliance on RCFM incentivizes cash discipline and durable returns—constructive for long‑term equity holders if sustained .