Paul Morben

About Paul Morben

Paul Morben, age 64, is President of OSI Systems’ Optoelectronics and Manufacturing division (since July 2025). He has 40+ years of experience in optoelectronics and EMS, including 15 years in Asia establishing and leading OSI’s manufacturing operations in Singapore, Indonesia, and Malaysia. He joined OSI in 1983, previously serving as President of OSI Electronics (Oct 2019–Jun 2025) and President/CEO of Masterwork Electronics (2016–2019). Education: MBA, Concordia University Irvine; BS in Business Administration—Management Science, California State University, Northridge. Company performance metrics tied to his compensation include Adjusted Return on Equity (AROE), revenue CAGR, and EBIT CAGR; OSI achieved 25.31% AROE for FY2025, with revenue CAGR of 7.49%/15.76% and EBIT CAGR of 17.47%/24.91% against grant baselines, driving incremental performance share payouts .

Past Roles

External Roles

Fixed Compensation

Notes:

• OSI’s program combines conservative base pay with high variable components; executive fixed compensation ranged ~10–62% of total direct comp in FY2025, with avg variable at 83% across NEOs .

Performance Compensation

Annual Incentive (Cash)

AROE scale (for corporate NEOs): Target 24.35% with graduated payouts up to 200% of base; OSI achieved 25.31% AROE in FY2025. Morben’s division bonus is tied to Optoelectronics & Manufacturing performance (not the corporate AROE formula) .

Long-Term Incentives (Performance RSUs)

Performance outcomes and incremental shares:

• FY2025 company performance delivered revenue CAGR of 7.49% and 15.76% (two baselines) and EBIT CAGR of 17.47% and 24.91%, yielding additional shares for Morben: +1,270 shares for the period .

Stock vesting realized in FY2025:

Equity Ownership & Alignment

Deferred compensation:

Employment Terms

• Role & Appointment: Named Optoelectronics and Manufacturing division President effective July 1, 2025 (following Mansouri’s retirement as division President) .
• Employment Agreements: OSI maintains agreements with Mehra (CEO), Edrick (CFO), and Sze (GC). No active employment agreement is disclosed for Morben (and Mansouri’s expired Jan 1, 2025) .
• Change-of-Control: Equity awards provide single-trigger acceleration—initial grants vest on change-of-control and remaining annual performance is assumed at maximum for purposes of awarding additional shares/units. Morben’s accelerated vesting value on change-of-control is disclosed at $3,374,474 .
• Clawback: Company-adopted clawback policy consistent with SEC/Listing Standards; clawback provisions also in employment agreements for covered executives .
• Non-compete/Non-solicit/Severance: Not specifically disclosed for Morben (severance economics table provided for Mehra/Edrick/Sze only) .

Performance & Track Record

• Operational: 40+ years at OSI; built/manages global manufacturing footprint; 15 years in Asia establishing operations in Singapore, Indonesia, Malaysia—strong execution across geographies and EMS .
• FY2025 Results Tied to Incentives: Corporate AROE of 25.31%; strong multi-year revenue/EBIT CAGR outcomes contributed to incremental performance share awards (Morben +1,270 shares) .
• Division Weighting: For performance shares, Morben measured 70% on division performance and 30% on consolidated performance, sharpening alignment with Optoelectronics & Manufacturing outcomes .

Compensation Structure Analysis

• Mix: Emphasis on variable pay—performance RSUs and divisional bonus; company-wide variable comp averaged ~83% of total direct compensation for NEOs in FY2025, consistent with pay-for-performance philosophy .
• Metric Rigor: AROE annual targets increased vs prior year; long-term program uses multi-year revenue and EBIT CAGR with graduated “additional shares” schedules—designed as challenging yet achievable, with explicit scale-driven payouts .
• Instrument Shift: No options granted in FY2025; NEO equity is 100% performance-vested RSUs (except one time-based RSU tied to impending retirement for another executive), reducing windfall optionality and increasing metric-driven alignment .
• Governance Safeguards: Prohibitions on hedging/pledging; robust clawback; 5x salary ownership guideline and retention until compliance; strong shareholder engagement (say-on-pay 64% approval in 2024—impacted by prior CEO stay bonus; 94% approval in 2023) .

Equity Ownership & Vesting Schedules (Detail)

Risk Indicators & Red Flags

• Single-trigger equity acceleration at change-of-control (initial grant vesting and max-assumed remaining periods) can amplify M&A-related payout leverage; Morben’s accelerated equity value estimated at $3.374M .
• No employment agreement disclosed for Morben—severance protections not explicitly provided, which may increase retention reliance on ongoing performance equity and divisional bonus .
• Hedging/pledging prohibited; no shares pledged—reduces misalignment risk .

Investment Implications

• Strong alignment with divisional performance: Cash bonus tied to Optoelectronics & Manufacturing results and performance-vested RSUs weighted 70% division/30% corporate create direct operational accountability—positive for execution-driven alpha .
• Material unvested performance equity (7,051 units; $1.585M) and incremental shares earned signal retention tethered to multi-year targets; watch vesting events for potential selling pressure as RSUs settle (2,994 shares vested, $673k realized in FY2025) .
• Governance and pay rigor (clawback, ownership guidelines, no options) mitigate risk of misaligned incentives; however, single-trigger change-of-control acceleration elevates event-driven payout sensitivity—relevant for M&A scenarios .
• Modest direct ownership (3,379 shares; <1%) balanced by guideline compliance counting unvested RSUs; monitor continued accumulation via vesting to assess increasing “skin in the game” over time .