Austin, Texas-based semiconductor company Silicon Laboratories Inc. (NASDAQ:SLAB) announced the approval of severance agreements for key executives, including CEO Matt Johnson. The Compensation Committee of the Board of Directors finalized the agreements on Monday, which outline the benefits and payments executives would receive upon termination in various scenarios.
The agreements, effective until October 31, 2027, are similar to the previous ones set to expire at the end of October 2024. They detail severance terms for both Change in Control Termination and Non-Change in Control Termination. Change in Control Termination refers to the termination of an executive’s employment in connection with a change in company ownership.
Under these terms, the CEO would receive 200% of their annual base salary and target variable compensation, while other executives would receive 100% of the same. Additionally, all would be entitled to any earned but unpaid bonuses, a prorated portion of target variable compensation for the fiscal year of termination, and accelerated vesting of stock options and units. The CEO would also receive a lump sum equal to 24 months of COBRA healthcare continuation coverage costs, with other executives receiving 12 months' worth.
The Non-Change in Control Termination benefits include a year's base salary and target variable compensation, any earned but unpaid bonuses from the preceding fiscal year, a prorated bonus for the termination year, and accelerated vesting of certain stock units. Additionally, a lump sum equivalent to 12 months of COBRA coverage costs is provided.
In other recent news, Silicon Labs has shown promising developments with its first-quarter revenues surpassing expectations and a forecast for accelerated growth in the second quarter. The company's revenue reached $106 million, exceeding their guidance midpoint. Looking forward, Silicon Labs projects second quarter revenue to be between $135 and $145 million.
In addition, Needham, a well-known investment firm, has upgraded Silicon Labs' stock from a Hold to a Buy status, setting a new price target of $150. The upgrade comes amid expectations of a semiconductor cyclical recovery, which Silicon Labs is believed to be well-positioned for. Needham's analysis suggests that investors might be willing to pay a premium for the company's shares during the semiconductor industry's cyclical upturn.
These recent developments underscore Silicon Labs' strong performance and the anticipated broader market recovery. The company's positioning in the rapidly expanding Internet of Things (IoT) market is a key factor in these positive outlooks. Needham projects that Silicon Labs will experience double-digit percentage top-line growth leading into the calendar year 2026, supported by the company's strong performance and the anticipated broader market recovery.
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