Victor Sze
OSI SYSTEMSAbout Victor Sze
Victor S. Sze is Executive Vice President, General Counsel and Secretary of OSI Systems, serving as EVP/GC since September 2004 and as GC/Secretary since November 2002; he has over 30 years of legal experience, including in-house counsel roles at Interplay and prior law firm practice at Wolf, Rifkin & Shapiro, and holds a JD from Loyola Law School and a BA in Economics from UCLA . Age 58 as of the latest proxy, he is a named executive officer and corporate member of the leadership team . Company performance during his tenure includes strong pay-for-performance alignment and robust outcomes in FY2025: record revenues and adjusted EPS, expanded operating margin, record backlog, strong TSR (value of initial $100 investment at $301.26 in 2025), and two strategic acquisitions in Security . Multi-year financials show revenue growth from $1.28B in FY2023 to $1.71B in FY2025 [FY citations below], with EBITDA rising over the same period; quarterly momentum remained solid through Q4 FY2025 and into Q1 FY2026 [FY and quarterly tables below].
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Interplay Entertainment Corp. | Director of Corporate Affairs (in-house counsel) | Not disclosed | Corporate legal and governance support, interactive software industry exposure |
| Wolf, Rifkin & Shapiro (Los Angeles) | Attorney | Not disclosed | Commercial litigation/transactions; foundational legal experience |
External Roles
No public company directorships or external board roles disclosed for Victor Sze in the latest proxy .
Fixed Compensation
| Component | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Base Salary ($) | $434,756 | $448,050 | $460,974 |
| Target Annual Incentive (% of salary) | 100% (corporate NEO schedule) | 100% | 100% |
| Maximum Annual Incentive (% of salary) | 135% | 135% | 135% |
| All Other Compensation ($) | $80,694 | $91,512 | $95,320 |
Performance Compensation
Annual Cash Incentive (AROE)
| Metric | Weighting | FY2025 Target | FY2025 Actual | Payout Schedule | FY2025 Payout |
|---|---|---|---|---|---|
| Adjusted Return on Equity (AROE) | Not disclosed | 24.35% | 25.31% | 0–200% of salary curve; Sze capped at 135% | $623,016 (≈135% of base) |
AROE payout scale (excerpt): 24.35% = 100%; 24.5% = 135%; ≥25.25% = 200%. FY2025 actual 25.31% reached top tier, but Sze’s individual plan capped at 135% of salary .
Long-Term Equity Incentives (Performance RSUs)
Program design: Annual RSU grants with three-year performance period; 100% performance-based vesting tied to compound annual growth in revenue (20% weight) and operating income/EBIT (80% weight), with additional shares earnable based on year-by-year performance thresholds .
| Metric | Weight | Target (100% vesting) | Thresholds (selected) | FY2025 Actual | Result |
|---|---|---|---|---|---|
| Revenue CAGR | 20% | 5.0% = 100% vest | 2.0% (25%), 3.0% (50%), 4.0% (75%) | 7.49% vs baseline | Earned additional shares per annual performance schedule |
| EBIT (Operating Income) CAGR | 80% | 7.0% = 100% vest | 3.0% (10%), 3.5% (30%), 4.0% (50%), 5.0% (70%), 6.0% (85%) | 17.47% vs baseline | Earned additional shares per annual performance schedule |
Awards and vesting details for Sze:
- FY2025 Grants: 8/14/2024 performance RSUs with target 9,893 shares and maximum 27,700 shares; grant-date fair value $1,375,325 .
- FY2025 Earned Additional Shares: 22,449 shares based on FY2025 revenue and operating income CAGR performance .
- FY2025 Vesting/Value Realized: 38,308 shares vested; realized value $8,613,937 (includes multi-year performance vestings) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of 10/15/2025) | 64,738 shares; less than 1.0% of outstanding. Includes 5,639 shares held by Victor So-Mein Sze & Angela Hsin-Chi Hsu Trust . No shares pledged . |
| Unvested/Unearned Equity | 37,415 unearned RSUs as of 6/30/2025; market value $8,413,137 at $224.86/share . |
| Ownership Guidelines | Executives required to hold company stock valued at least 5× base salary; unvested RSUs counted; unearned PSUs and unexercised options not counted. Each NEO meets/exceeds guidelines . |
| Hedging & Pledging | Hedging and pledging prohibited; as of proxy date, no shares pledged by any NEO or director . |
Insider transactions (recent):
- 08/01/2025: RSU grant of 6,490 under the Amended & Restated 2012 Incentive Award Plan (performance-based) .
- 08/26/2025: 22,449 performance RSUs vested; net share settlement of 20,118 shares for tax withholding; no open-market sales; direct ownership post-transaction 87,174, indirect 5,639 .
Employment Terms
| Provision | Key Terms |
|---|---|
| Agreement Type & Term | Amended and Restated Employment Agreement (executed 4/29/2024); one-year term; auto-renews annually unless 30 days’ prior notice of non-renewal . |
| Base Salary in Agreement | Initial base salary in agreement set at $448,050 (later annual salary changes per Compensation Committee review) . |
| Bonus Eligibility | Eligible for company bonus pool and incentive plans . |
| Restrictive Covenants | Confidentiality protections; non-solicit for 18 months post-termination (executives, supervisors, managers) . |
| Clawback | Incentive/performance pay subject to clawback for restatements per SEC/Nasdaq; clawback also embedded in agreement . |
| Severance (No CIC) | If terminated without cause/non-renewal or resigns for good reason: 24 months’ salary at then-current base; plus 2× the average of the highest three annual bonuses paid in prior five years; continuation of car allowance for 6 months; $6,000 outplacement; acceleration of time-based awards; performance awards vest at target; option exercise extended to 1 year (not beyond expiry) . |
| Severance (With CIC) | If terminated without cause or for good reason within 90 days prior to or 12 months after a change in control: (i) same severance but performance awards vest at maximum, or (ii) alternate amount per IRC §280G calculation, at executive’s election . |
| Illustrative Potential Payments (as of 6/30/2025) | No CIC: Salary $922,984; Bonus $1,210,589; Accelerated vesting $8,413,137; Car $6,000; Outplacement $6,000; Total $10,558,710 . With CIC: Salary $922,984; Bonus $1,210,589; Accelerated vesting $17,707,725; Car $6,000; Outplacement $6,000; Total $19,853,298 . |
Company Performance Context
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Revenues ($) | $1,278,427,000 [FY table sourced below] | $1,538,758,000 [FY table sourced below] | $1,713,166,000 [FY table sourced below] |
| EBITDA ($) | $181,358,000* | $237,661,000* | $259,932,000* |
| Metric | Q2 FY2025 | Q3 FY2025 | Q4 FY2025 | Q1 FY2026 |
|---|---|---|---|---|
| Revenues ($) | $419,820,000 [quarterly table sourced below] | $444,354,000 [quarterly table sourced below] | $504,985,000 [quarterly table sourced below] | $384,623,000 [quarterly table sourced below] |
| EBITDA ($) | $68,819,000* | $69,039,000* | $82,258,000* | $46,063,000* |
Values retrieved from S&P Global.*
Source data (GetFinancials): Annual revenues FY2023–FY2025 and quarterly revenues Q2–Q4 FY2025 and Q1 FY2026 , FY2024 , FY2023 ; quarterly citations: Q4 FY2025 , Q3 FY2025 , Q2 FY2025 , Q1 FY2026 ].
Additional qualitative context for FY2025: record revenues/adjusted EPS, expanded operating margin, strong bookings/backlog, and two Security division acquisitions .
Compensation Structure Analysis
- Equity mix and at-risk pay: FY2025 NEO equity was 100% performance-based RSUs (except one time-based award for a retiring executive); variable compensation comprised ~38–90% of NEO pay, with average variable of 83%—consistent with pay-for-performance .
- Annual incentive tightening: AROE targets raised (target 24.35% vs. prior 23.35%), reflecting increased performance expectations; actual AROE 25.31% .
- Long-term performance calibration: Three-year CAGR thresholds emphasize sustained revenue and EBIT growth; change-of-control terms accelerate awards, with performance awards at maximum under CIC severance .
- Governance hygiene: No hedging/pledging permitted; robust clawback; strong stock ownership guidelines (5× salary); director independence and committee oversight .
Say-on-Pay & Peer Group
- Say-on-Pay: 2024 approval approximately 64%; Compensation Committee maintained approach for FY2025 while noting outlier CEO stay bonus in 2024 influenced vote .
- Peer group: Diverse mid-cap technology/industrial and healthcare set (e.g., Cognex, Novanta, Varex Imaging, Masimo, Viavi, Lumentum, etc.); used for market practices context; no explicit target percentile disclosed .
Risk Indicators & Red Flags
- Hedging/pledging ban; no shares pledged by NEOs/directors .
- Clawback policy per SEC/Nasdaq; embedded in employment agreements .
- Related party oversight: ECIL-Rapiscan JV interests disclosed for senior leaders; fees to law firm affiliated with a director reviewed for independence; Audit Committee reviews related transactions >$75,000 .
- Insider trading compliance: Section 16(a) compliance generally strong, with minor late filings for two directors; no late filings noted for Sze .
Equity Event Timing & Insider Selling Pressure
- Sze’s vest events are performance-based RSU vestings; recent 08/26/2025 vest used net share settlement for taxes (20,118 shares), not open-market sales—reducing tradable supply but not signaling discretionary selling .
- RSU grant 08/01/2025 aligns with annual LTI cycle; performance vesting limits near-term liquidation risk absent performance satisfaction .
Investment Implications
- Alignment: Sze’s pay structure is heavily performance-contingent (AROE annual plan and 3-year revenue/EBIT CAGR PSUs), with strong ownership and no hedging/pledging—favorable alignment signal for investors .
- Retention risk: Severance provides 24 months’ salary plus 2× bonus and full acceleration (target; max under CIC), mitigating departure risk but creating CIC acceleration exposure investors should model in scenarios .
- Trading signals: Insider net settlement at vest dates suggests routine tax withholding rather than discretionary selling; monitor upcoming vest cycles for supply effects, but recent filings show no open-market sales .
- Performance trajectory: FY2025 AROE at 25.31%, revenue/EBIT CAGR exceeding 100% vest thresholds, and company TSR of ~$301 on $100 base underscore operational momentum supportive of PSU vesting and incentive payouts; investors should monitor sustainability of EBIT growth and backlog conversion .
Appendix: Financial Performance Tables (Source: S&P Global via GetFinancials)
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Revenues ($) | $1,278,427,000 | $1,538,758,000 | $1,713,166,000 |
| EBITDA ($) | $181,358,000* | $237,661,000* | $259,932,000* |
| Metric | Q2 FY2025 | Q3 FY2025 | Q4 FY2025 | Q1 FY2026 |
|---|---|---|---|---|
| Revenues ($) | $419,820,000 | $444,354,000 | $504,985,000 | $384,623,000 |
| EBITDA ($) | $68,819,000* | $69,039,000* | $82,258,000* | $46,063,000* |
Values retrieved from S&P Global.*