Gregory Smith
TERADYNEAbout Gregory Smith
Gregory S. Smith, age 62, is Teradyne’s President, Chief Executive Officer, and a director (director since 2023). He joined Teradyne in 2006 after early career roles at Raytheon and has led Teradyne’s Semiconductor Test and Robotics businesses before becoming CEO, bringing 18 years of internal leadership across engineering and P&L roles . Under Smith’s leadership, 2024 revenue was $2.82 billion (+~5% YoY), GAAP EPS rose ~22% to $3.32, and non-GAAP EPS increased ~10% to $3.22, supported by +8.5% growth in Semiconductor Test and $672 million in operating cash flow with $474 million in free cash flow . For long-term incentives, 2022 PSUs paid at 50% of target (PBIT achieved 23% = 100% payout; relative TSR -39.6% vs NYSE Composite = 0%), evidencing rigorous pay-for-performance alignment . Recent execution highlights include AI-driven demand in compute and memory and strategic technology M&A (e.g., Quantifi Photonics) positioning Teradyne for optical interconnect test and advanced packaging opportunities .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Teradyne | President, Robotics | Oct 2020–Jul 2023 | Led robotics portfolio repositioning and product initiatives amid industrial automation softness . |
| Teradyne | President, Semiconductor Test | Feb 2016–Oct 2020 | Drove diversification of customer base and growth in core SOC/memory test solutions . |
| Raytheon | Test Engineer (early career) | Pre-2006 | Foundation in complex test systems engineering prior to joining Teradyne . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Technoprobe S.p.A. | Director | May 2024–present | Public company directorship in semiconductor test ecosystem . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $850,000 | $925,000 |
| Target Variable Cash (% of base) | 125% | 125% |
Performance Compensation
2024 Variable Cash Program – Metrics and Outcomes (CEO)
| Metric | Weighting | Threshold | Target | Maximum | Actual | Payout Result |
|---|---|---|---|---|---|---|
| Two-year Rolling Revenue Growth | 29.25% | -6% | 7% | 19% | -5.70% | 3% |
| PBIT (non-GAAP) | 19.5% | 11% | 21% | 39% | 20.4% | 95% |
| Vital Goals (weighted avg of divisional goals) | 48.75% | N/A | N/A | N/A | N/A | 136% |
| Gender Representation (US/global YoY change) | 2.5% | >24.7%/>19% | 24.8%/19.1% | N/A | 24.9%/21.0% | 200% |
| Total Variable Cash Payout vs Target | — | — | — | — | — | 91% |
| CEO Variable Cash Outcome (2024) | Value |
|---|---|
| Target ($) | $1,156,250 |
| Payout (% of target) | 91% |
| Actual Payout ($) | $1,052,188 |
| CEO Profit Sharing (2024) | H1 | H2 | Total |
|---|---|---|---|
| Pro rata % of model cash comp | 7.664% | 9.520% | — |
| Profit sharing distribution ($) | $159,507 | $198,135 | $357,642 |
2024 Equity Awards (granted Feb 1, 2024) – Mix, Terms, and Grant Values
| Award Type | Shares/Options | Vesting | Grant Value ($) |
|---|---|---|---|
| Performance-based RSUs (target) | 58,336 | 3-year cliff; 50% TSR vs NYSE Composite; 50% 3-year cumulative PBIT; 0–200% payout | $5,711,969 |
| Time-based RSUs | 29,168 | 4-year ratable annual vesting | $2,775,044 |
| Stock Options | 24,667 | 4-year ratable; 7-year term | $925,013 |
| Total | — | — | $9,412,026 |
PSU Performance Realization (2012–2024 Cycle Determined Jan 2025)
| Metric | Target Structure | Actual Performance | Payout |
|---|---|---|---|
| Relative TSR vs NYSE Composite | 50% of award; 0–200% scale | -39.6% vs Index (underperformed) | 0% |
| 3-year cumulative PBIT | 50% of award; thresholds 10%/23%/34% | 23.0% | 100% |
| Total PSU Payout | — | — | 50% of target |
| CEO shares earned | — | — | 4,014 |
Program Design Notes and Governance
- 2024 changes reduced PBIT weighting (from 30% to 19.5%) and increased Vital Goals weighting (from 40% to 48.75%); thresholds for revenue and PBIT set at 10th/50th/90th percentile vs “VC Comparison Group” (S&P 500, peer group, and select semis) to maintain rigor .
- Executive compensation practices include double-trigger CIC, clawback per SEC/Nasdaq, robust ownership guidelines, no options repricing/cash-outs, and no excise tax gross-ups .
Equity Ownership & Alignment
| Ownership Item | Detail |
|---|---|
| Beneficial ownership (Mar 14, 2025) | 65,640 shares; <1% of outstanding (160,832,506 shares) . |
| Shares acquirable within 60 days | 28,167 (includes options/RSUs per footnote) . |
| Anti-hedging/anti-pledging | Hedging and pledging prohibited for directors/executives; 10b5-1 trading plans required for insiders . |
| Executive stock ownership guidelines | CEO 3x base salary, increased to 6x starting 2025; 5-year compliance window; CEO has until Jan 2030 to meet updated level . |
| Compliance status (2024 year-end) | NEOs were at/above guidelines except Kumar (until Aug 2028) and Driscoll (until Jan 2029) . |
| Tax withholding on vesting | Company withholds shares to satisfy minimum taxes on RSU vesting; mechanical supply impact vs open-market selling . |
CEO Outstanding Equity at 12/31/2024 (selected items)
| Instrument | Status | Strike | Expiration | Qty |
|---|---|---|---|---|
| Stock options (granted 2021) | Exercisable | $113.48 | 01/29/28 | 2,459; 820 unexercisable |
| Stock options (granted 2022) | 50/50 | $112.12 | 01/28/29 | 1,923 exerc.; 1,923 unexerc. |
| Stock options (granted 2023) | Partially unexercisable | $103.44 | 01/27/30 | 4,584 exerc.; 13,754 unexerc. |
| Stock options (granted 2024) | Unexercisable | $95.14 | 02/01/31 | 24,667 |
| Time-based RSUs (unvested) | Ratable vest | — | — | 29,168 ($3,695,586 MV) |
| PSUs (2023 grant in progress) | In progress | — | — | 43,504 ($5,511,957 MV) |
| PSUs (2024 grant in progress) | In progress | — | — | 58,336 ($7,391,171 MV) |
Note: Market values reflect proxy table presentation at FY-end and are not a recommendation to transact .
Employment Terms
| Provision | Key Terms |
|---|---|
| CEO Severance Agreement (non-CIC) | 2 years of model compensation (salary + target variable), 2 years continued vesting of time-based equity, 3 years continued vesting of PSUs, 2 years health coverage; subject to release and 3-year post-employment non-compete/non-solicit . |
| Change-in-Control Agreements | Double-trigger; 2 years of model compensation, prorated target cash incentive for year, full accelerated vesting of equity (PSUs at target), 2 years health coverage; no excise tax gross-up . |
| Retirement Vesting Policy | If ≥ age 60 and ≥10 years service, PSUs vest based on actual performance at determination; if ≥65 and ≥10 years service, continued vesting of unvested time-based RSUs/options per Executive Retirement Policy (Jan 2024), subject to post-employment obligations . |
| Clawback Policy | Recoupment of performance-based cash/equity upon financial restatement compliant with SEC/Nasdaq standards . |
| Insider Trading Policy | Mandatory Rule 10b5-1 plans; blackout periods; prohibition of hedging/derivatives and pledging/margin accounts . |
Board Governance and Service
- Board service: Smith is an executive director since 2023; he is not on any Board committees; committee membership is entirely independent directors .
- Dual-role implications: Teradyne separates Chair/CEO; Paul Tufano serves as independent Chair since May 2021, mitigating CEO-chair consolidation risks; independent directors hold executive sessions at each meeting .
- Attendance: The Board met four times in 2024; directors averaged 100% attendance; all then-serving directors attended the 2024 Annual Meeting .
- Director pay: Employee directors do not receive Board compensation; non-employee director pay includes cash retainers and annual RSUs with anti-hedging/pledging and 5x retainer ownership guidelines .
Performance & Track Record
- Strategic initiatives: Smith emphasized AI-driven test demand and acquisitions to strengthen optical and silicon photonics test capabilities (Quantifi Photonics), and roadmap acceleration (e.g., power semiconductors via Infineon deal) .
- Execution: Q3’25 revenue $769M (Semiconductor Test $606M) with AI-related demand expected to drive a 25% sequential sales increase in Q4’25; guidance implies continued EPS expansion .
- Robotics: Repositioning toward logistics/pharma/semiconductor/electronics amid weak macro in Europe auto/metal machining; expects meaningful revenue contribution in 2027 .
Compensation Peer Group, Say-on-Pay, and Shareholder Feedback
- Peer group: 17-peer benchmarking (e.g., Cadence, KLA, Keysight, Rockwell, Microchip, ON, Fortive, etc.); Teradyne was below median in revenue and market cap; awards targeted near the 50th percentile .
- VC Comparison Group for variable cash: thresholds set vs broad comp set at 10th/50th/90th percentiles for revenue growth and PBIT goals to maintain rigor .
- Say-on-Pay: ~89% approval at 2024 Annual Meeting; reflects shareholder support for program; Committee made targeted adjustments for 2024 (e.g., metric weighting) .
Equity Ownership & Alignment Details
| Topic | Governance/Policy |
|---|---|
| Ownership guidelines (executives) | CEO 6x base salary starting 2025; 5-year transition, 50% net shares retention until compliant; excludes unvested RSUs/PSUs and unexercised options; CEO has until Jan 2030 to comply . |
| Hedging/Pledging | Prohibited for all employees/directors; aligns risk and reduces misaligned liquidity actions . |
| Repricing | Prohibited without shareholder approval . |
Employment & Contracts – Additional Notes
| Topic | Details |
|---|---|
| 401(k), ESPP, Supplemental Savings | Broad-based participation; ESPP at 15% discount; Supplemental Savings Plan for IRC limits . |
| No excise tax gross-ups | Shareholder-friendly CIC design . |
| Equity grant timing policy | No grants during filing windows; avoids timing around MNPI; annual grants in Q1 . |
Investment Implications
- Pay-for-performance alignment is strong: PSU results show zero payout on TSR underperformance and 100% payout on PBIT achievement, with net 50% payout; 2024 variable cash paid 91% of target, reflecting tougher revenue growth vs strong PBIT and vital goals .
- Insider selling pressure appears contained: mandatory 10b5-1 plans, anti-pledging, and share withholding for taxes on vesting reduce discretionary selling; however, notable vesting and option expiry cadence through 2026–2031 warrants monitoring for routine settlement-related supply .
- Retention and succession risk mitigated: rigorous severance/CIC terms with non-compete/non-solicit, retirement vesting policy for long-tenured executives, and independent Chair structure limit governance risk from dual roles .
- Execution upside tied to AI cycle: CEO commentary and Q3’25 results suggest continued momentum in AI-related test demand (compute/memory/networking); watch PSU TSR modifier into 2026 and incremental design wins that could improve TSR-based outcomes .
- Governance quality: strong policies (clawback, no repricing/gross-ups, independent committees, robust ownership guidelines) and shareholder support (~89% Say-on-Pay) lower compensation/governance overhangs .