Alan Edrick
OSI SYSTEMSAbout Alan Edrick
Alan Edrick is Executive Vice President and Chief Financial Officer of OSI Systems, Inc., serving since September 2006. He is 57 years old and holds an MBA from UCLA Anderson and a BA in Economics/Business from UCLA . OSI’s FY2025 performance context under his financial leadership included $1.7B in sales, EPS of $8.71, year-end backlog of $1.8B, and 7,337 employees; pay-versus-performance metrics show FY2025 net income of $149.6M, operating income of $217.5M, and a TSR value of $301.26 for an initial $100 investment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| BioSource International, Inc. | EVP & CFO | 2004–2006 | CFO through the company’s sale to Invitrogen, contributing to capital markets readiness and transaction execution . |
| North American Scientific, Inc. | SVP & CFO | 1998–2004 | Led finance for a medical device/pharma company, including FP&A and compliance . |
| Pricewaterhouse LLP | Senior Manager, Capital Markets; other roles | 1989–1998 | Capital markets, M&A and public accounting experience supporting complex transactions . |
External Roles
Not disclosed in the proxy for Edrick (no current public company board service or external directorships listed) .
Fixed Compensation
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Base Salary ($) | $503,716 | $519,120 | $534,095 |
| Target Bonus (% of Salary) | 100% (corporate NEOs) | 100% (corporate NEOs) | 100% (corporate NEOs) |
| Maximum Bonus (% of Salary) | 150% (CFO) | 150% (CFO) | 150% (CFO) |
| Actual Annual Incentive ($) | $756,000 | $778,680 | $802,041 |
Performance Compensation
Annual Incentive Program (formulaic, based on Adjusted Return on Equity—AROE):
- FY2025 AROE target: 24.35%; actual achieved: 25.31% .
| Component | Metric | Weighting | Target | Actual | Payout |
|---|---|---|---|---|---|
| Annual Cash Incentive (CFO) | Adjusted Return on Equity (AROE) | 100% of formula | 24.35% | 25.31% | $802,041 |
Long-Term Incentive Program (Performance RSUs):
- Structure: 3-year performance RSUs with revenue CAGR (20%) and operating income CAGR/EBIT growth (80%); initial grants vest based on 3-year performance, plus potential additional shares each year for above-threshold performance .
- FY2025 actual performance: Revenue CAGR 7.49% (and 15.76% for a second baseline), Operating Income CAGR 17.47% (and 24.91% for a second baseline); Edrick earned 28,345 additional shares for FY2025 annual performance .
- Grant details (FY2025 awards): Grant date 8/14/2024; target shares 13,559; maximum 37,965; grant-date fair value $1,884,972 .
| Component | Metric | Weighting | Target (3-yr vest grid) | FY2025 Actual | FY2025 Result / Vesting |
|---|---|---|---|---|---|
| Performance RSUs (Initial Grant) | Revenue CAGR | 20% | 5.0% → 100% vest; <2.0% → 0% | 7.49% (and 15.76%) | Contributes toward 3-yr vest; eligible for annual add-on shares |
| Performance RSUs (Initial Grant) | Operating Income (EBIT) CAGR | 80% | 7.0% → 100%; <3.0% → 0% | 17.47% (and 24.91%) | Contributes toward 3-yr vest; eligible for annual add-on shares |
| Annual Add-On Shares | Revenue CAGR | 20% | 7.0%→40%; 8.0%→60% of initial grant as add-ons | 7.49% | Additional shares earned (aggregate with EBIT metric) |
| Annual Add-On Shares | Operating Income (EBIT) CAGR | 80% | 9.0%→40%; 10.0%→60% of initial grant as add-ons | 17.47% | Additional shares earned: 28,345 (Edrick) |
| FY2025 Grant Details (Edrick) | RSU Award | — | Target 13,559; Max 37,965 | — | Grant-date FV $1,884,972; grant 8/14/2024 |
Notes:
- Change-of-control: initial grant vests upon change of control; remaining annual periods assumed at maximum payout for awarding additional units .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 260,427 shares; 1.5% of class as of Oct 15, 2025 . |
| Unvested/Unearned RSUs (6/30/2025) | 47,241 units; market value $10,622,611 (at $224.86) . |
| FY2025 Stock Vested | 45,590 shares; value realized $10,251,367 . |
| Options | No option exercises in FY2025; outstanding awards table shows RSUs (option columns omitted) . |
| Pledging/Hedging | Prohibited by policy; as of the proxy date, no shares pledged by any NEO or director . |
| Ownership Guidelines | Executives must hold ≥5× base salary; prior to attainment, must retain ≥50% of net shares from vest/exercise; each NEO meets or exceeds guidelines . |
| Deferred Compensation Plan | Edrick contributions $370,216; Company match $53,409; aggregate earnings $1,022,075; aggregate balance $9,230,747 (FY2025) . |
Employment Terms
| Provision | Key Terms |
|---|---|
| Agreement Structure | Amended & Restated Employment Agreement executed Apr 29, 2024; one-year term, auto-renews annually unless notice of non-renewal ≥30 days before expiry . |
| Base Salary (Initial under agreement) | $519,120 (agreement baseline; actual FY2025 salary $534,095) . |
| Bonus Eligibility | Eligible from bonus pool and incentive programs established by the Company . |
| Restrictive Covenants | Post-employment non-solicit for 18 months; confidentiality protections . |
| Clawback | Agreement includes clawback tied to restatements; Company-wide clawback adopted Oct 2023 per SEC/Nasdaq rules . |
| Severance (Without Cause / Good Reason) | 24 months’ base salary + 2× average of highest three annual bonuses in prior five years; 6 months car allowance; $6,000 outplacement; accelerated vesting at target for unvested equity; extended option exercise to 1 year (not beyond expiry) . |
| Change-in-Control (Double Trigger) | If terminated without cause or for good reason within 90 days prior to or 12 months after a change in control: either (i) above severance with equity vesting at maximum or (ii) alternative amount under IRC 280G; no excise tax gross-ups policy . |
| Estimated Payouts (as of 6/30/2025) | Good Reason / Without Cause: Salary $1,069,388; Bonus $1,557,814; Accelerated Equity $10,622,611; Car $6,000; Outplacement $6,000; Total $13,261,813. With CoC: Salary $1,069,388; Bonus $1,557,814; Accelerated Equity $22,585,388; Car $6,000; Outplacement $6,000; Total $25,224,590 . |
Compensation Structure and Trends (Edrick)
| Component | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Salary ($) | $503,716 | $519,120 | $534,095 |
| Stock Awards ($) | $1,683,126 | $1,683,168 | $1,884,972 |
| Non-Equity Incentive ($) | $756,000 | $778,680 | $802,041 |
| All Other Compensation ($) | $91,133 | $87,641 | $109,028 |
| Total ($) | $3,033,975 | $3,068,609 | $3,330,136 |
Observations:
- Mix continues to be heavily at-risk: performance RSUs and formulaic cash incentive tied to AROE and multi-year CAGR metrics .
- No options granted in FY2025; equity vehicle is primarily performance RSUs, aligning with governance best practices and shareholder feedback .
- Perquisites are modest (car, insurance, medical reimbursement), with detailed breakdowns disclosed .
Compensation Peer Group and Say-on-Pay Context
- Peer group includes diversified tech/security/healthcare equipment firms (e.g., AAR, Cognex, Enovis, F5, Haemonetics, IPG Photonics, Kratos, Novanta, Varex, Viavi, Vishay, etc.) used for context and market alignment; peers updated over time .
- 2024 say-on-pay approval ~64%; Company attributed lower support largely to a one-time “stay bonus” paid to prior CEO; program retained pay-for-performance design for FY2025 .
Risk Indicators & Alignment
- Hedging and pledging prohibited; none pledged by NEOs or directors .
- Robust clawback compliant with SEC/Nasdaq; individual agreements also include clawback .
- Ownership guideline of 5× salary; Edrick meets/exceeds .
- Related-party and independence policies governed via Audit Committee charter; no Edrick-specific related party transactions disclosed .
Investment Implications
- Strong alignment: CFO’s incentives are tied to capital efficiency (AROE) and multi-year revenue/EBIT growth, with 100% performance-based RSUs and double-trigger change-of-control vesting; this supports long-term TSR while discouraging short-term risk-taking .
- Retention risks appear mitigated: auto-renew employment agreement, meaningful severance protections, substantial unvested RSU value ($10.6M as of 6/30/25) and ownership guidelines compliance provide “golden handcuffs” that reduce near-term departure risk .
- Trading/overhang considerations: Significant annual RSU vesting (45,590 shares, $10.25M in FY2025) can create periodic supply; however, hedging/pledging bans and holding requirements prior to guideline attainment help dampen misalignment concerns .
- Change-of-control economics: Double-trigger acceleration at maximum could materially increase equity vesting ($22.6M estimated for Edrick), which is standard but can contribute to deal-related dilution; absence of excise tax gross-ups is shareholder-friendly .