Bernie Blegen
MONOLITHIC POWER SYSTEMSAbout Bernie Blegen
Bernie Blegen, 67, is Executive Vice President and Chief Financial Officer of Monolithic Power Systems (MPS). He has served as CFO since July 2016 (Corporate Controller from 2011–2016) and previously held executive finance and accounting roles at Xilinx and Credence Systems; he holds a B.A. from the University of California, Santa Barbara . Under the current team, MPS delivered FY2024 revenue of $2.207B (+21.2% YoY), non-GAAP operating income of $764.1M (+19.2% YoY), and 10‑year cumulative TSR of ~1,200%, indicating strong long-term value creation .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Monolithic Power Systems | EVP & Chief Financial Officer | 2016–present | Leads finance, accounting, tax, treasury, investor relations |
| Monolithic Power Systems | Corporate Controller | 2011–2016 | Built finance infrastructure pre/post hyper-growth phases |
| Xilinx, Inc. | Executive finance/accounting positions | pre‑2011 | Public-company finance leadership experience |
| Credence Systems | Executive finance/accounting positions | pre‑2011 | Public-company finance leadership experience |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| — | No public external directorships disclosed in company officer bios | — | — |
Fixed Compensation
Multi-year pay levels and changes (salary rate vs. paid; target bonus changes).
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base salary paid ($) | 365,481 | 400,054 | 471,265 |
| Base salary rate ($) | — | — | 480,000 (effective 2024) |
| Target bonus (% of base) | 200% (prior policy) | 200% (prior policy) | 150% (reduced in 2024) |
| Actual bonus paid ($) | 2,940,000 | 733,537 | 2,750,064 |
Notes:
- In 2024, MPS reduced NEO annual cash incentive targets from 200% to 150% of base salary, aligning with shareholder feedback .
- 2024 base salary increases reflected company scale (>$2B revenue; >$30B market cap) and peer alignment .
Performance Compensation
Short‑Term Incentive (Cash) – 2024 design and payout
- Metric: Company non‑GAAP operating income only; target set from annual operating plan; linear interpolation between thresholds .
- Targets: Minimum 80% of plan → 0%; 100% of plan → 100% payout; ≥120% → 400% max .
- 2024 results: Non‑GAAP operating income $768.1M vs $645.0M target; plan payout 382% of target .
| Item | Value |
|---|---|
| Non‑GAAP operating income target ($M) | 645.0 |
| Non‑GAAP operating income actual ($M) | 768.1 |
| Plan payout (% of target) | 382% |
| Blegen target bonus ($) | 720,000 (150% of $480k) |
| Blegen earned bonus ($) | 2,750,064 |
Long‑Term Incentive (Equity) – 100% PSUs; rigorous multi-factor design
2024 PSU grant structure (three‑year period 2024–2026; cliff vesting 12/31/2026; continued service required; $30/share purchase feature waived if stock price ≥$30 above grant price at period end) .
| Component | Metric | Earn‑out schedule | Blegen 2024 grant (target/max shares) |
|---|---|---|---|
| Revenue outperformance | MPS 3‑yr avg revenue growth minus SIA Analog 3‑yr avg | <3%: 0%; 3%: 50%; 5%: 100%; ≥15%: 300% of target | 5,573 / 27,865 (revenue+ESG combined max) |
| Environmental goal 1 | Reduce combined Scope 1+2 GHG by 25% vs 2022 baseline by 2026 | 100% of target if achieved | Part of max 27,865 |
| Environmental goal 2 | >1/3 of 2026 Automotive revenue from EV manufacturers | 50% of target if achieved | Part of max 27,865 |
| Environmental goal 3 | 2026 revenue from EV powertrain/48‑V products ≥200% of 2023 baseline | 50% of target if achieved | Part of max 27,865 |
Additional terms:
- Maximum PSU payout capped at 500% of target; revenue goal up to 300% + ESG goals up to 200% .
- Dividend equivalents accrue and pay only upon vesting; forfeited if awards don’t vest .
Vesting schedule and outstanding awards (as of 12/31/2024)
| Grant | Instrument | Key vesting terms | Blegen unvested/unearned (#) | Vest date |
|---|---|---|---|---|
| 2021 | PSUs | Performance achieved by 12/31/2022; 50% vested Feb‑2023; remainder quarterly to Feb‑2025 | 1,431 | Through Feb‑2025 |
| 2022 | MSUs | Market‑based; cliff vest at end of performance period if price hurdles/TSR met (3‑yr) | 87,690 | 10/24/2025 |
| 2023 | PSUs | Cliff vests at 12/31/2025 if performance met | 38,745 | 12/31/2025 |
| 2024 | PSUs | Cliff vests at 12/31/2026 if performance met | 16,719 | 12/31/2026 |
Realized value context:
- 2024 vestings: Blegen realized value on stock vesting of $40,231,881 across 60,438 shares; dividend equivalents are included in realized values upon vest .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 63,601 shares (includes 52,939 direct; 5,331 to Trust FBO Sarah Blegen; 5,331 to Trust FBO Theodore Blegen) |
| % of shares outstanding | “*” = less than 1% (out of 47,877,352 outstanding on record date) |
| Unvested/unearned equity exposure | As above: 1,431 (2021 PSUs); 87,690 (2022 MSUs); 38,745 (2023 PSUs); 16,719 (2024 PSUs) |
| Stock ownership guidelines | NEOs: 2× base salary (CEO 5×); 5‑year compliance window; all NEOs met guidelines as of 12/31/2024 |
| Hedging/pledging | Hedging prohibited without pre‑approval; short sales prohibited; no margin/pledging allowed |
Implications:
- Pledging risk is structurally mitigated by policy; dividend equivalents further align PSU holders to dividends only upon achievement and service .
Employment Terms
| Provision | Term (CFO) |
|---|---|
| Employment history and role | CFO since July 2016; responsible for finance, accounting, tax, treasury, IR |
| Severance (without cause/for good reason) | 6 months base salary, target annual bonus, and COBRA; equity vests as if 6 months of additional service |
| Change‑in‑control with termination (double‑trigger) | 12 months base salary, target annual bonus, and COBRA; 100% acceleration of unvested equity (PSUs pro‑rated to performance through CIC; MSUs vest if change‑in‑control price exceeds hurdles; relative TSR deemed satisfied) |
| Restrictive covenants | Confidentiality; non‑solicit for 1 year post‑termination |
| Clawback | Dodd‑Frank/Nasdaq‑compliant recoupment of incentive pay upon required restatement (3‑year lookback; applies regardless of misconduct) |
| Insider trading controls | Pre‑clearance for Section 16/designated insiders; blackout windows; 10b5‑1 plan constraints (cool‑offs; single‑trade plan limits) |
| Deferred compensation | 2024 activity: contributions $0; earnings $85,180; balance $1,544,886 (plan allows up to 70% salary/90% bonus deferral) |
Performance & Track Record
Company performance under current leadership:
| Metric | FY2023 | FY2024 |
|---|---|---|
| Revenue ($M) | 1,821.1 | 2,207.1 |
| Non‑GAAP operating income ($M) | 641.1 | 764.1 |
| Non‑GAAP diluted EPS ($) | 11.78 | 14.12 |
| 10‑year cumulative TSR | — | ~1,200% (illustrative) |
Capital returns and investor sentiment:
- Dividends: $3.00 (2022), $4.00 (2023), $5.00 (2024) per share; $242.5M paid in 2024 . In Feb‑2025, quarterly dividend increased 25% to $1.56 (annual $6.24) and a new $500M three‑year buyback was authorized .
- Say‑on‑pay: 97% approval in 2024 (vs. 57% in 2023; 72% in 2022), reflecting program changes and engagement .
Execution in 2025 YTD:
- Q1’25 revenue $637.6M (+39.2% YoY), non‑GAAP operating income $221.5M, non‑GAAP diluted EPS $4.04 .
Compensation Structure Analysis
- Strong at‑risk mix: 2024 CEO/NEO compensation was predominantly performance‑based; only ~6% or less as fixed salary; maximum payouts require exceeding rigorous goals .
- Clear pay‑for‑performance linkages: 2024 cash incentive tied 100% to non‑GAAP operating income; 2024 equity 100% PSUs linked to multi‑year revenue outperformance vs SIA Analog and environmental goals; in Feb‑2025, PSU design added a rigorous TSR percentile vs the PHLX Semiconductor Index with 75th percentile required for max payout .
- Shareholder‑responsive changes: Reduced annual target cash incentive to 150% from 200% in 2024; refined peer group to remove >$100B market‑cap companies; enhanced board governance .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited (no margin accounts; no pledging)—reduces misalignment risk .
- Clawback: Robust, restatement‑based recovery irrespective of fault—mitigates windfall risk .
- Tax gross‑ups: None since 2008—shareholder‑friendly practice .
- Option repricing: Not indicated; equity is PSUs/MSUs with rigorous hurdles .
- Litigation overlay: A securities class action was filed Feb 4, 2025 against MPS and certain executives (alleging misstatements related to business, including Nvidia relationship); the company intends to defend vigorously .
Equity Ownership & Upcoming Vesting (Selling Pressure Watchlist)
- Beneficial ownership: 63,601 shares (<1%); unvested/unearned exposure from 2022–2024 awards remains significant .
- Near‑term vest events:
- 2022 MSUs: performance period ends and vests 10/24/2025 if conditions met .
- 2023 PSUs: potential cliff vest on 12/31/2025 if performance achieved .
- 2024 PSUs: potential cliff vest on 12/31/2026 if performance achieved .
- Implication: End‑2025 could be a concentrated vesting window (MSUs and PSUs), which may create incremental selling pressure absent 10b5‑1 plans or retention holds .
Compensation & Ownership Detail Tables
Summary Compensation (Blegen)
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 365,481 | 400,054 | 471,265 |
| Stock awards (grant‑date fair value) | 3,626,424 | 3,486,353 | 3,435,420 |
| Non‑equity incentive (cash) | 2,940,000 | 733,537 | 2,750,064 |
| All other compensation | — | — | 673 |
| Total | 6,931,905 | 4,619,944 | 6,657,422 |
2024 Bonus Mechanics & Payout
| Metric | Target | Actual | Payout |
|---|---|---|---|
| Non‑GAAP operating income ($M) | 645.0 | 768.1 | 382% |
| Blegen’s cash incentive ($) | 720,000 | — | 2,750,064 |
Outstanding & Unearned Equity (12/31/2024)
| Grant | Type | Unvested/Unearned (#) | Market/Payout value ($) | Vest timing |
|---|---|---|---|---|
| 2021 PSUs | Performance earned; time vesting | 1,431 | 862,178 | Through Feb‑2025 |
| 2022 MSUs | Market‑based | 87,690 | 52,057,169 | 10/24/2025 |
| 2023 PSUs | Performance‑based | 38,745 | 21,902,549 | 12/31/2025 |
| 2024 PSUs | Performance‑based | 16,719 | 9,418,927 | 12/31/2026 |
Say‑on‑Pay, Peer Group, and Program Governance
- Say‑on‑Pay approval: 97% in 2024; prior: 57% (2023), 72% (2022) .
- Peer group refresh: 2024 cohort focuses on semiconductor peers with revenue 50%–300% of MPS, excluding >$100B companies (e.g., AMD, AMAT, NVIDIA removed); adds Diodes, Marvell, Microchip, Entegris .
- Independent consultant: Radford; assessed as independent by the Compensation Committee .
Investment Implications
- Alignment: High proportion of at‑risk, multi‑year PSU design (revenue outperformance vs SIA Analog + ESG goals; added relative TSR in 2025) ties management wealth to durable growth, sustainability outcomes, and shareholder returns; prohibition on hedging/pledging improves alignment quality .
- Retention risk: Severance is modest (6 months cash; 12 months on CIC) but equity acceleration is meaningful (100% on double‑trigger CIC; pro‑rata performance for PSUs), which balances retention and transaction alignment; sizable unvested PSU/MSU exposure into 2025–2026 supports continued service .
- Selling pressure watch: Potential year‑end 2025 vesting (2022 MSUs, 2023 PSUs) may create supply; monitor 10b5‑1 plans and post‑vesting disposition patterns .
- Pay‑for‑performance: 2024 cash payout (382% of target) matches above‑plan non‑GAAP operating income; 100% PSUs with maximum 500% earn‑out cap heightens upside tied to strategic outcomes (revenue/EV/ESG) and TSR percentile, indicating confidence but with rigorous hurdles .
- Governance quality: Clawback policy, no tax gross‑ups since 2008, anti‑hedging/pledging, and strong shareholder engagement (program changes and declassification proposal) suggest generally shareholder‑friendly practices .
Blockquote Key figures and disclosures for this analysis are sourced from MPWR’s 2025 DEF 14A, FY2024 10‑K, and Q1’25 Form 8‑K earnings materials, as cited above.