Jack Pacheco
Executive Vice President and Chief Operating Officer; President, Integrated Memory at Penguin Solutions
Executive
About Jack Pacheco
Jack Pacheco is Executive Vice President and Chief Operating Officer of Penguin Solutions (PENG), also serving as President, Integrated Memory. He is 64 and has been COO since September 2020; previously he was SVP/COO/CFO (2011–2020) and CFO (2004–2008). Earlier roles include CFO of Mirion Technologies (2008–2011) and CFO of Ignis Optics (2001–2004). He holds an MBA from Golden Gate University and a BS in Business Administration from Washington State University . Company fiscal 2024 performance used for incentives: net sales $1.17B (84.4% of target) and non‑GAAP operating income $120.3M (66.6% of target); the TSR-based PSU plan measures performance vs the Russell 2000 median over 3 years .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Mirion Technologies, Inc. | Vice President & CFO | 2008–2011 | Led finance at radiation detection company |
| Ignis Optics, Inc. | CFO | 2001–2004 | Built finance function at optical components startup (acquired by Bookham) |
| Penguin Solutions (prior tenure) | CFO; SVP/COO/CFO | 2004–2008; 2011–2020 | Finance and operations leadership across transformation phases |
External Roles
- No additional public company directorships disclosed for Pacheco .
Fixed Compensation
| Component | FY2022 | FY2023 | FY2024 |
|---|---|---|---|
| Base Salary ($) | 460,000 | 475,000 | 475,000 |
| Target Annual Bonus ($) | — | — | 403,750 (≈85% of salary) |
| Actual Short‑Term Incentive Payout ($) | 445,507 | 80,750 | 45,422 |
| Discretionary/Transaction Bonus ($) | — | — | 100,000 (Brazil divestiture bonus) |
Notes:
- FY2024 cash incentive structure weighted 75% financials (non‑GAAP operating income and net sales) and 25% individual/ESG; the fiscal 2024 Financial Performance Factor decelerated to 0%, and Pacheco’s Individual Performance Factor was 45%, resulting in $45,422 payout .
Performance Compensation
Annual Cash Incentive (FY2024)
| Metric | Weight | Target | Actual | Payout impact | Vesting |
|---|---|---|---|---|---|
| Non‑GAAP Operating Income | 75% | $180.8M | $120.3M | 66.6% of target (pre‑decelerator) | Annual cash payout |
| Net Sales | 25% | $1,386.4M | $1,170.8M | 84.4% of target (pre‑decelerator) | Annual cash payout |
| Individual/ESG Goals | 25% of total | N/A | 45% factor (Pacheco) | Contributed to $45,422 payout | Annual cash payout |
Long-Term Equity (FY2024 grants; granted Sept 25, 2023)
| Award type | Metric | Grant date | Shares (target) | Grant-date fair value ($) | Vesting |
|---|---|---|---|---|---|
| PSUs | Relative TSR vs Russell 2000 median | 9/25/2023 | 26,808 | 1,030,231 | Earned 0–200% based on 3‑yr TSR; vest upon Committee certification |
| RSUs | Service | 9/25/2023 | 26,808 | 637,494 | 6.25% on 1/20/2024; then 15 equal quarterly installments |
PSU payout curve: 50% at −25% relative TSR, 100% at median, 200% at +25% vs median; CIC treatment: if within 12 months of grant, vests at target; if >12 months, vests based on actual performance at CIC .
Option Awards (outstanding as of 8/30/2024)
| Grant date | Exercisable | Strike ($) | Expiration |
|---|---|---|---|
| 1/22/2019 | 60,000 | 10.78 | 1/21/2029 |
| 3/12/2020 | 53,334 | 9.20 | 3/11/2030 |
FY2024 activity: Exercised 41,666 options (value realized $529,087) and 34,316 shares vested under stock awards (value $656,509) .
Equity Ownership & Alignment
| Ownership detail (as of 12/9/2024) | Amount |
|---|---|
| Shares held of record | 176,803 |
| Options exercisable (within 60 days) | 86,666 |
| RSUs scheduled to release (within 60 days) | 7,997 |
| Total beneficial ownership | 271,466 (<1.0% of shares outstanding) |
| Outstanding unvested RSUs (market value at $20.72) | 21,782; $451,323 |
| Outstanding unvested PSUs (target; market value at $20.72) | 26,808; $555,462 |
| Anti‑hedging/pledging policy | Hedging and pledging prohibited for officers/directors |
| Clawback policy | Supplemental clawback adopted, compliant with SEC rules |
Employment Terms
| Provision | Key terms | Economics (as of 8/30/2024) |
|---|---|---|
| Employment agreement | Amended & restated Dec 2017; 1‑yr term auto‑renews annually unless 90‑day notice prior to expiry | N/A |
| Involuntary termination (no CIC) | Severance equal to 75% of base salary; continued health coverage up to 9 months | $356,250 severance; $17,964 health |
| Change in control (CIC) | PSUs vest: within 12 months of grant at target; >12 months based on actual TSR; RSUs follow plan; CIC triggers per plan | See equity treatment |
| Involuntary termination during CIC protection period (double trigger) | Severance = 150% of base salary + 150% of most recent annual bonus; 100% acceleration of unvested equity; continued health coverage up to 18 months | $780,633 cash; $2,857,992 equity; $35,288 health |
| Equity vesting at CIC (no termination) | PSUs vest based on stated CIC rules; value example at $20.72/share shows PSU vesting assumptions at 131%, 168%, 100% for respective PSU grants in aggregate scenario | $1,858,874 estimated equity value |
| Life and disability benefits | Life insurance up to $2,000,000; disability present value estimates as disclosed | $2,000,000 life; $848,249 disability |
Investment Implications
- Pay-for-performance alignment: Pacheco’s LTI is 50% PSUs tied to 3‑year relative TSR, and FY2024 cash incentive paid out only on individual/ESG components after decelerator zeroed financial performance, indicating disciplined linkage to financial outcomes .
- Retention dynamics: Quarterly RSU vesting through late 2027 and existing in‑the‑money options create ongoing vesting events; double‑trigger CIC terms include full acceleration, reducing exit friction in a sale but increasing potential dilution at transaction .
- Governance risk mitigants: Anti‑hedging/pledging and clawback policies lower misalignment risks; strong 2024 Say‑on‑Pay support (97.8%) suggests shareholder acceptance of the program design .
- Ownership: Beneficial ownership is <1%, limiting direct “skin‑in‑the‑game” leverage, but sizable PSU exposure ties outcomes to TSR relative performance .
Multi‑Year Compensation (Summary Compensation Table)
| Metric | FY2022 | FY2023 | FY2024 |
|---|---|---|---|
| Salary ($) | 460,000 | 475,000 | 475,000 |
| Bonus ($) | — | — | 100,000 |
| Share Awards ($) | 999,126 | 1,028,196 | 1,667,726 |
| Non‑equity Incentive ($) | 445,507 | 80,750 | 45,422 |
| All Other Compensation ($) | 43,262 | 23,329 | 25,884 |
| Total ($) | 1,947,895 | 1,607,275 | 2,314,032 |
Additional Context
- Company FY2024 transformation highlights: rebrand to Penguin Solutions, SKT $200M strategic investment, services mix growth; used in committee’s pay design narrative .
- Compensation governance: Independent Compensation Committee; Semler Brossy as independent consultant; PSU/RSU mix and 12‑month bonus performance period established since FY2022 .
Investment Implications
- Payout sensitivity to performance is high (financial factor decelerator to 0% in FY2024), reducing risk of pay for underperformance .
- Double‑trigger CIC cash and full equity acceleration materially increase change‑of‑control costs ($3.6M+ illustrative cash/benefit/equity as of FY2024), pertinent for M&A scenarios .
- Anti‑pledging and clawback frameworks mitigate headline alignment risks; continued RSU vesting and prior option exercises suggest periodic liquidity events, which can create technical selling pressure around vest dates, though policy restricts hedging/pledging .