Coherent has put $100m of stock in front of five executives, and not one unit pays out unless the share price compounds at 10 percent a year for four years and beats its index while it does

One hundred million dollars of target value, five names, and a price the shares have never touched.

Coherent Corp. disclosed on Monday morning that its Compensation and Human Capital Committee approved special incentive awards on 27 August. James R. Anderson, the chief executive, has a target value of $50m. Sherri Luther, the chief financial officer, Julie Eng, the chief technology officer and executive vice president for optical components, and Rob Beard, the chief strategy and legal affairs officer, have $15m each. Jeffrey Place, the chief supply chain officer, has $5m.

The awards are performance stock units and nothing else. There is no restricted stock in them, no options, and no time-vesting portion that pays for showing up.

Two locks on the same door

The filing sets four price hurdles, each measured as an average over 60 consecutive calendar days at any point in the four years from the grant date. A 10 percent compound annual growth rate corresponds to $454.43 and earns half the target. Fifteen percent, $542.86, earns all of it. Twenty percent, $643.61, earns 150 percent. Twenty-five percent, $757.77, earns 200 percent.

A price alone is not enough. Each tranche also requires that Coherent's total shareholder return sits above the 50th percentile of the S&P Composite 1500 Electronic Equipment, Instruments and Components Index at the moment the price hurdle is met. The filing is explicit that the two conditions have to hold simultaneously, and that nothing is earned if they do not. Between the hurdles there is no interpolation, so a share price that finishes the period at $540 earns the 50 percent tranche and not a unit more.

The document does not state the price these compound from. It can be recovered from the table. Dividing $454.43 by 1.10 to the fourth power gives $310.38, and that figure reproduces the other three hurdles to within two cents, which is a rounding difference rather than a discrepancy. On that base the award pays at target only if the stock is 74.9 percent higher, and pays double only 144.1 percent higher.

Earned in four years, sold in five

No portion vests before the four-year performance period ends, whatever the price does in year one. Vested units then sit under a further one-year holding period, so an executive who clears every hurdle in 2027 cannot sell any of it until 2031.

The forfeiture terms are stricter than the usual. Termination without cause preserves only the tranches whose milestones were already hit, and even those wait for the end of the period. Everything unearned is forfeited in full, and the filing says that includes death and disability. Voluntary departure or a termination for cause takes the whole award.

A change in control unwinds most of this. The performance period ends, achievement is measured against the per share consideration in the deal with linear interpolation applied, earned units convert to time-based awards with double-trigger acceleration, and the holding period disappears.

What the committee says it was doing

The filing carries the committee's own reasoning rather than leaving it to be inferred. It says the awards are not part of the regular compensation program and were judged necessary to retain the team. It says that since Mr Anderson became chief executive in June 2024 the company has delivered over 300 percent in total shareholder returns and achieved record revenue in fiscal 2026, which ended on 30 June.

It also says something that cuts the other way, and says it plainly. The committee took into account that the stock is trading near all-time highs with significant volatility, and set the milestones at the rigorous end of the range its independent consultant found for comparable grants. Starting a four-year compounding clock at a peak is the hardest version of this structure, and the filing does not pretend otherwise.

What the document does not give is unit counts. Target values are dollars, and the number of shares behind them will not be public until the form of award agreement is filed with the next periodic report.