Alan Reid
SANMINAAbout Alan Reid
Alan McW. Reid is Executive Vice President, Global Human Resources at Sanmina (SANM) and a named executive officer (NEO). Fiscal 2024 company performance was mixed: revenue declined 15.3%, non‑GAAP operating margin was 5.4%, and non‑GAAP diluted EPS was $5.28; cash flow from operations was $340 million, and the TSR index value stood at 259 vs peer group 297, reflecting underperformance versus peers for the period . Reid has a long tenure with Sanmina, evidenced by a severance agreement originally dated March 28, 2008 (as amended) .
Fixed Compensation
Base Salary (multi-year)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $376,250 | $385,000 | $385,000 |
Annual Bonus (FY 2024)
| Item | Value |
|---|---|
| Target bonus (% of base) | 80% |
| Corporate performance factor | 105% (80 pts from revenue/operating margin; +25 pts from cash flow modifier) |
| Actual bonus paid ($) | $323,400 |
| Plan metrics | Revenue; Non‑GAAP operating margin; Cash flow from operations (modifier) |
Performance Compensation
Short-Term Incentive (FY 2024) – metric outcomes and payout
| Metric | Target (disclosed?) | Actual | Weighting (disclosed?) | Impact on Payout | Vesting/Timing |
|---|---|---|---|---|---|
| Revenue (FY24) | Target levels set in plan (numeric not disclosed) | $7.57B | Not disclosed | Contributed to base corporate factor (80%) | One-year performance period (FY24) |
| Non‑GAAP Operating Margin (FY24) | Target levels set in plan (numeric not disclosed) | 5.4% | Not disclosed | Contributed to base corporate factor (80%) | One-year performance period (FY24) |
| Cash Flow from Operations (modifier) | Modifier ranges set in plan | $340M | Modifier only | +25 percentage points to corporate factor | Applies to FY24 bonus |
Long-Term Equity Grants (FY 2024)
| Grant Type | Grant Date | Shares (Target) | Payout Range | Performance Metric | Vesting |
|---|---|---|---|---|---|
| PSUs | 12/15/2023 | 12,000 | 70%–130% of target | 3‑year cumulative non‑GAAP EPS | Measured over FY2024–FY2026 |
| RSUs | 12/15/2023 | 13,000 | N/A | Service only | Approx. 70% over first two anniversaries and ~30% on third anniversary |
| Total FY2024 Stock Awards (Fair Value) | $1,287,250 (ASC 718) |
PSU design removed Compensation Committee TSR discretion beginning with 2023 grants; older awards could include up to ±15% TSR adjustment at Committee discretion .
Recent Vesting and Performance Realization
| Item | FY 2024 |
|---|---|
| Shares vested (stock awards) | 36,000 |
| Value realized on vesting ($) | $1,813,620 |
Outstanding Equity (FY 2024 year-end)
| Award | Grant Date | Unvested/Unearned Units (#) | Market/Payout Value at 9/27/2024 ($) | Vesting Terms |
|---|---|---|---|---|
| RSU | 12/15/2021 | 4,000 | $275,480 | One-third annually over 3 years |
| PSU (target) | 12/15/2021 | 18,000 | $1,239,660 | 3‑year EPS with ±20% adj and potential TSR discretion; 120% of target vested post‑FY24 |
| RSU | 12/15/2022 | 6,000 | $413,220 | Vest in full after 2 years |
| PSU (target) | 12/15/2022 | 10,000 | $688,700 | 3‑year EPS with up to ±30% adj and potential TSR discretion |
| RSU | 12/15/2023 | 4,500 | $309,915 | Vest in full 1 year from grant (12/15/2024) |
| RSU | 12/15/2023 | 4,500 | $309,915 | Vest in full 2 years from grant (12/15/2025) |
| RSU | 12/15/2023 | 4,000 | $275,480 | Vest in full 3 years from grant (12/15/2026) |
| PSU (target) | 12/15/2023 | 12,000 | $826,440 | 3‑year EPS (FY2024–FY2026), 70%–130% payout |
Note: Market values use $68.87 closing price on 9/27/2024 .
Equity Ownership & Alignment
- Executive stock ownership guidelines: 2× base salary for non‑CEO NEOs; all NEOs currently satisfy guidelines .
- Hedging and pledging: Prohibited for officers and directors .
- Options: No outstanding option awards for any NEO at FY2024 year-end (including Reid) .
Beneficial Ownership
| Holder | Shares Beneficially Owned | % of Shares Outstanding |
|---|---|---|
| Alan Reid | 20,002 | <1% |
Employment Terms
Change-in-Control Plan (double-trigger; below-median levels; no tax gross-up)
| Component | Amount (if CIC + qualifying termination, as of FY2024 year-end) |
|---|---|
| Salary multiple | 1.5× base salary = $577,500 |
| Target bonus multiple | 1.0× target bonus = $308,000 |
| Accelerated equity value | $4,338,810 (assumes $68.87 stock price) |
| COBRA (18 months) | $29,172 |
| Total | $5,253,482 |
- CIC definitions, triggers, and treatment of performance awards are detailed in the 2019 Equity Incentive Plan; awards may be assumed/substituted by a successor; if not, vesting accelerates based on actual performance through the shortened measurement period .
Individual Severance Agreement
- Alan Reid’s March 28, 2008 (as amended) agreement provides, upon termination without cause or for good reason, a lump sum equal to 12 months of then-current salary and certain relocation benefits .
Clawback
- SEC-compliant clawback policy adopted October 2, 2023; applies to cash and equity incentives for all executive officers .
Deferred Compensation (FY 2024)
| Item | Amount |
|---|---|
| Executive contributions | $144,375 |
| Aggregate earnings | $251,118 |
| Aggregate balance | $1,790,480 |
Compensation Structure Notes
- Program emphasizes pay-for-performance with simplified STI (revenue, non‑GAAP operating margin; cash flow modifier) and PSUs based on 3‑year cumulative non‑GAAP EPS; RSUs used to support retention .
- No hedging/pledging; no option repricing; no tax gross-ups; CEO holding requirement and minimum 1‑year vesting in equity plan, subject to limited exceptions .
Say-on-Pay & Peer Benchmarking
- 2024 say‑on‑pay support ~80% .
- Compensation peer group considered: Amphenol, Arrow, Avnet, Benchmark, Celestica, Curtiss‑Wright, Fabrinet, Flex, Jabil, Keysight, Plexus, Seagate, TTM, Western Digital .
Investment Implications
- Alignment: Significant use of PSUs tied to 3‑year non‑GAAP EPS and STI metrics linked to revenue/margins/cash flow favors performance‑based outcomes; hedging/pledging prohibited; executive ownership guidelines met .
- Retention and supply: Multiple RSU tranches vest over 1–3 years (e.g., 12/15/2024, 12/15/2025, 12/15/2026), creating periodic sellable supply; 36,000 shares vested in FY2024 with $1.81M value realized .
- Risk and protections: CIC severance is moderate (1.5× salary + 1× bonus) with double‑trigger and no gross‑ups; clawback in place; no outstanding options reduce in‑the‑money exercise pressure .
- Performance track record signal: 2021 PSU tranche vested at 120% of target post‑FY2024, indicating above‑target EPS delivery over the period, though company TSR lagged peers (259 vs 297), suggesting equity grant outcomes are driven more by earnings than market relative return .