Aart de Geus
SYNOPSYSAbout Aart de Geus
Aart J. de Geus, age 70, is Synopsys’ co‑founder and has served on the Board since 1986; he was CEO from 1994–2023 and became Executive Chair in January 2024, bringing unique industry and company expertise built over 35+ years . Synopsys delivered record fiscal 2024 revenue of $6.127B (+~15% YoY), non‑GAAP operating margin of 38.5%, ~25% non‑GAAP EPS growth, ~$1.4B operating cash flow, and $8.1B backlog, while Company TSR from a fixed $100 investment reached $240.16 and net income was ~$2.236B in fiscal 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Synopsys | Executive Chair | 2024–present | Chairs Board, drives agenda, advises CEO on long-term strategy, maintains strategic relationships . |
| Synopsys | Chief Executive Officer | 1994–2023 | Led diversification across EDA/IP; >100 M&A transactions; established AI and multi‑die design leadership . |
| Synopsys | Co‑CEO (with Chi‑Foon Chan) | 2012–2022 | Shared CEO role during growth and portfolio scaling . |
| Synopsys | President, COO; SVP Engineering; SVP Marketing | 1986–1994 | Early leadership across product and go‑to‑market; foundational operations during scale-up . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Applied Materials, Inc. | Director | 2007–present | Brings public company board experience and semiconductor ecosystem insights to SNPS Board . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $540,000 | $678,750 | $725,000 |
| Actual Cash Incentive Paid ($) | $2,595,000 | $1,958,000 | — (did not participate post-transition) |
| Total Reported Compensation ($) | $10,058,495 | $12,681,076 | $8,963,359 |
- Fiscal 2025 decisions: Target TDC decreased ~41% YoY; base salary down ~69% and target equity down ~38% to reflect Executive Chair role evolution .
Performance Compensation
Annual Cash Incentive (EIP) – FY 2024
- Not applicable for de Geus post-transition; he did not participate in the FY 2024 cash incentive program .
Equity Awards Granted in FY 2024 (Grant date: Dec 12, 2023)
| Award Type | Grant (#) | Vesting Schedule | Notes/Terms |
|---|---|---|---|
| PRSUs | 7,054 target; 13,227 max | 100% cliff after 3‑year period (FY24–FY26), subject to revenue CAGR goal and rTSR modifier vs S&P 500 Info Tech; certification upon performance period completion | rTSR modifier: ≥75th pct →125%; 50th →100%; 25th →75%; <25th →0% . |
| RSUs | 3,527 | Annual installments: 25% per year starting Dec 8, 2024 through Dec 8, 2027, subject to continued service | Time-based retention and alignment to stock price . |
| Stock Options | 10,938 | 25% on 1‑year anniversary; then 6.25% per quarter; fully vested by Dec 12, 2027 | Exercise price $567.06; expiration Dec 12, 2030 . |
Status/Payout of Prior PRSUs (FY 2022 cycle; performance FY22–FY23)
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Revenue CAGR (FY22–FY23) | Multiplier | 13% CAGR | 17.9% achieved | 150% multiplier | 50% vested 12/12/2023; 50% vested 12/8/2024 |
| rTSR vs S&P 500 Info Tech | Modifier | ≥50th percentile target | 95th percentile | 125% modifier | Same schedule |
| Combined Payout Factor | — | — | — | 187.5% (150% × 125%) | See above |
| De Geus PRSUs (shares) | — | 12,169 target | — | 22,817 earned | 11,409 vested 12/12/2023; 11,408 vested 12/8/2024 |
FY 2024 PRSUs Performance Tracking
- FY24–FY26 PRSUs are in progress; as of FY2024 year‑end, aggregate achievement was trending below threshold, with reporting at threshold per SEC rules (final certification post‑FY2026) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (shares) | 587,771 shares; includes 147,834 options exercisable within 60 days; 308,791 under family trust; 14,500 via Mora Investment Partners L.P.; less than 1% of outstanding shares . |
| Unvested Equity – Intrinsic Value (FY2024 year‑end) | $25,639,027 stock awards; $3,600,397 option awards (valued at $518.40/share on Nov 1, 2024) . |
| Stock Ownership Guidelines (Executive Chair) | 12,500 shares and $2,200,000 minimum value; all NEOs and directors were in compliance as of Record Date . |
| Hedging/Pledging | Prohibited for executives and directors (no short sales, derivatives; no margin accounts or pledging) per Insider Trading Policy . |
| Share retention recommendation | Retain up to 25% of net shares acquired via vest/exercise until guidelines met . |
Employment Terms
| Provision | Terms |
|---|---|
| Agreement timing | Employment agreements entered in Dec 2023; effective Jan 1, 2024 . |
| Severance (outside Change of Control) | No severance benefits for Executive Chair outside change of control . |
| Change of Control (double trigger) | If involuntary termination or resignation for good reason within 90 days before or 24 months after a change of control: cash equal to 2× salary and 2× most recent target cash incentive opportunity; 18 months health premiums (lump sum); full acceleration of all unvested equity (PRSUs vest at target); release required; covenants enforced . |
| Equity plan treatment | If awards are not assumed/continued by acquirer, all employee equity awards fully vest at change of control . |
| Clawback | Compensation recovery policy compliant with SEC/Nasdaq; awards subject to clawback/recoupment . |
| Non‑compete / restrictive covenants | Severance rights terminate upon breach of restrictive covenants/willful material breach; standard proprietary information/invention assignment compliance required . |
Board Governance
- Board service history and independence: De Geus has been a director since 1986; he is not independent (Executive Chair), while all committees are fully independent .
- Committee roles: As Executive Chair, he is not a member of the Audit, Compensation, or Governance committees; those are chaired by independent directors (Audit: Mercedes Johnson; Compensation: Robert Painter post‑meeting; Governance: Janice Chaffin) .
- Leadership structure: Chair and CEO roles are separated (Executive Chair and CEO); a Lead Independent Director (John Schwarz post‑meeting) provides counterbalance through executive sessions and agenda setting .
- Board activity: Six Board meetings in FY2024; each director attended >75%; independent directors met in executive session four times .
- Director pay: Employee directors (including de Geus) receive no additional Board compensation; non‑employee director retainer $125,000 plus committee/lead premiums; annual restricted stock ~$200,000 (356 shares) .
Compensation Structure Analysis
- Mix and risk: Executive compensation emphasizes equity; for de Geus in FY2024, awards included PRSUs ($4.23M fair value), RSUs ($2.00M), and options (~$2.00M), with no cash incentive post‑transition, aligning with long‑term value creation .
- Performance linkage: PRSUs tied to multi‑year revenue CAGR with rTSR modifier and mandatory downward adjustment below median, supporting pay‑for‑performance .
- Governance safeguards: No hedging/pledging; no repricing; no dividends on unvested equity; no golden parachute tax gross‑ups; clawback policy in place .
Say‑on‑Pay & Peer Group
- Say‑on‑Pay support: Approximately 93% of voted shares approved NEO compensation at the prior annual meeting .
- Compensation peer group: 2024 peers include Akamai, Analog Devices, Autodesk, Cadence, CrowdStrike, EA, Fortinet, Intuit, Keysight, KLA, Marvell, Microchip, NetApp, OpenText, Palo Alto Networks, ServiceNow, Splunk, Workday .
Risk Indicators & Red Flags
- No related‑party transactions >$120,000 for executives/directors since start of FY2024 (outside normal compensation) .
- Dual‑role implications: De Geus is Executive Chair and long‑tenured founder; independence mitigants include Lead Independent Director, fully independent committees, regular executive sessions, and separate CEO role .
- Equity acceleration: Large unvested equity could accelerate under change‑of‑control, implying potential deal‑related supply; FY2024 intrinsic values illustrate magnitude .
- Pledging/hedging prohibited: Reduces alignment risks tied to collateralized or hedged positions .
Performance Compensation – Metric Table (Detail)
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| FY22–FY23 Revenue CAGR | Multiplier | 13% | 17.9% | 150% | 50% 12/12/2023; 50% 12/8/2024 |
| FY22–FY23 rTSR | Modifier | ≥50th percentile | 95th percentile | 125% | Same |
| FY24–FY26 Revenue CAGR | Multiplier | Confidential until FY2026 | In progress | — | 100% cliff after 3 years |
| FY24–FY26 rTSR | Modifier | ≥50th percentile target | Trending; threshold reporting at FY2024 | — | With PRSU cliff |
Vesting Schedules and Potential Insider Selling Pressure
- RSUs vest annually in December (first tranche Dec 8, 2024), then annually through Dec 8, 2027, potentially creating predictable vest-related selling to cover taxes .
- Options vest quarterly after year‑1 cliff through Dec 12, 2027; PRSUs cliff‑vest post‑FY2026 certification, concentrating vest/date‑driven supply in late calendar 2026/early 2027 .
Equity Ownership & Alignment – Summary Table
| Component | Shares/Value |
|---|---|
| Beneficially owned (total) | 587,771 shares (<1%) |
| Options exercisable within 60 days | 147,834 shares |
| Trust holdings | 308,791 shares |
| Mora Investment Partners L.P. | 14,500 shares |
| Unvested stock awards intrinsic value | $25,639,027 |
| Unvested options intrinsic value | $3,600,397 |
| Guideline (Executive Chair) | 12,500 shares; $2,200,000 minimum |
| Policy | No hedging/pledging; clawback in place |
Employment Terms – Economics Table
| Scenario | Cash | Equity | Benefits | Conditions |
|---|---|---|---|---|
| Involuntary termination in connection with change of control (double trigger) | 2× salary; 2× most recent target cash incentive opportunity | Full acceleration; performance awards at target | 18 months health premiums (lump sum) | Release; restrictive covenants; benefits denied for cause/voluntary exit |
| Change of control (awards not assumed/continued) | — | Full vesting of all employee equity awards | — | Applies company‑wide |
| Outside change of control | No severance (Executive Chair) | — | — | Standard agreements |
Investment Implications
- Alignment and retention: High mix of performance equity (multi‑year revenue CAGR + rTSR) and ownership guidelines, plus anti‑hedging/pledging, support alignment; multi‑year PRSU cliff and RSU schedules provide retention anchors .
- Event risk: Double‑trigger severance at 2× salary and 2× target cash incentive, plus full equity acceleration at target, could create meaningful payout under a transaction; equity not assumed would vest in a change of control, raising potential supply considerations .
- Governance: Dual‑role Executive Chair is mitigated by separated CEO role, Lead Independent Director, independent committees, and regular executive sessions, reducing independence concerns .
- Pay‑for‑performance signal: Strong FY22–FY23 PRSU payout (187.5%) on top‑tier rTSR and above‑target revenue CAGR indicates robust value creation; FY24–FY26 PRSUs remain in progress, tying future payout to sustained growth and relative returns .
- Trading signals: Annual December RSU tranches and 2026 PRSU cliff create predictable vest dates that may coincide with tax‑related selling; options vest quarterly post year‑1, spreading potential exercises through 2025–2027 .
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