SCHEDULE 14A INFORMATION
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☑ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material under § 240.14a-12 |
Payment of Filing Fee (Check all boxes that apply): | ||
☑ | No fee required. | |
☐ | Fee paid previously with preliminary materials. | |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 | |
![]() |
11409
Valley View Road
Eden Prairie, MN 55344-3617 www.nve.com |
Sincerely, | |
![]() |
|
Daniel A. Baker President and CEO |
![]() |
![]() |
![]() |
www.nve.com/investorEvents | www.nve.com/AnnualReports | www.YouTube.com/NveCorporation |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE 2023 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 3, 2023: 1) The Company’s Proxy Statement for the 2023 Annual Meeting of Shareholders, 2) Shareholder Letter, and 3) Annual Report on Form 10-K for the year ended March 31, 2023 are available at www.nve.com/AnnualReports. |
![]() |
11409
Valley View Road
Eden Prairie, MN 55344-3617 www.nve.com |
(a) | (b) | (c) | ||||
Number
of Securities to be Issued Upon Exercise of Outstanding Options |
Weighted-Average Exercise Price of Outstanding Options |
Number
of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Column (a)) |
||||
Common Stock
that may be issued as of March 31, 2023 |
34,500 | $66.26 | 120,730 |
Name of Beneficial Owner |
Number of Shares Beneficially Owned(1) |
Percentage of Common Stock Outstanding |
|||
Royce & Associates, LP 745 Fifth Avenue, New York, NY 10151 |
517,972 |
(2) | 10.7 | % | |
Kayne Anderson Rudnick Investment Management, LLC 1800 Avenue of the Stars, 2nd Floor, Los Angeles, CA 90067 |
466,555 | (3) | 9.7 | % | |
Daniel A. Baker | 68,686 | (4) | 1.4 | % | |
Peter G. Eames | - | * | |||
Daniel Nelson(5) | - | * | |||
Joseph R. Schmitz(6) | - | * | |||
Patricia M. Hollister | 9,040 |
(7) | * | ||
Terrence W. Glarner | 7,200 | (8) | * | ||
Richard W. Kramp | 7,575 | (9) | * | ||
James W. Bracke | 2,500 | (10) | * | ||
All directors and named executive officers as a group (eight persons) | 95,001 | 2.0 | % |
*Less than 1% |
|
(1) | Includes shares held in trust, by broker, bank or nominee or other indirect
means and over which the individual or member of the group has sole voting or
shared voting and/or investment power. Unless otherwise noted, each individual
or member of the group has sole voting and investment power with respect to the
shares shown in the table above. |
(2) | Based on information contained in Schedule 13F filed with the SEC on
May 4, 2023. According to a Schedule 13G filed with the SEC on January 24,
2023, various Accounts managed by Royce & Associates, LP, have the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of shares of the issuer, and the interest of one account, Royce
Special Equity Fund, amounted to 371,500 shares. |
(3) | Based on information contained in Schedule 13F filed with the SEC on
May 16, 2023. According to that Schedule, Kayne Anderson Rudnick Investment
Management, LLC (“KAR”) had no voting authority for 24,537 shares.
According to a Schedule 13G filed with the SEC on February 14, 2023,
as of December 31, 2022, KAR beneficially owned 448,347 shares; Virtus
Investment Advisers, Inc., 332,350 shares; and Virtus Equity Trust on behalf
of Virtus KAR Small Cap Growth Fund, 273,147 shares. That filing also reported
shared voting and investment powers of KAR, 332,350 shares; Virtus Investment
Advisers, Inc., 332,350 shares; and Virtus Equity Trust on behalf of Virtus
KAR Small Cap Growth Fund, 273,147 shares. |
(4) | Includes 7,500 shares issuable on the exercise of options that are currently
exercisable. |
(5) | Mr. Nelson was appointed Principal Financial Officer effective May 8, 2023. |
(6) | Mr. Schmitz was Chief Financial Officer until May 5, 2023. |
(7) | Includes 8,000 shares issuable on the exercise of options that are currently
exercisable. |
(8) | Includes 6,000 shares issuable on the exercise of options that are currently
exercisable. |
(9) | Includes 7,000 shares issuable on the exercise of options that are currently
exercisable. |
(10) | Includes 2,000 shares issuable on the exercise of options that are currently exercisable. |
1. | Any transaction in which the Company was or is to be a participant
(within the meaning of Securities and Exchange Commission (SEC) Regulation
S-K, Item 404(a)), and a related
person (as defined in Regulation S-K
Item 404(a)) has or will have a direct or indirect material interest (within the
meaning of Regulation S-K Item
404(a)). |
2. | Any contract or other transaction between the Company and one or more directors of the Company, or between the Company and an organization in or of which one or more directors of the Company are directors, officers, or legal representatives or have a material financial interest within the meaning of Minnesota Statutes Section 302A.255. |
1. | The names of all parties and participants involved in the proposed transaction,
including the relationship of all such parties and participants to the Company. |
2. | The basis on which the related person is deemed a related person within the
meaning of Regulation S-K Item
404(a), if applicable. |
3. | The material facts and terms of the proposed transaction. |
4. | The material facts as to the interest of the related person in the proposed
transaction. |
5. | Any other information the audit committee requests concerning the proposed transaction. |
Board Skills, Experience, and Demographics (as of June 9,
2023)
|
||||||||
Terrence W.
Glarner |
Daniel A.
Baker |
Patricia M.
Hollister |
Richard W.
Kramp |
James W.
Bracke |
||||
Skills and Experience | ||||||||
1. | Experience as a director at other publicly-traded companies |
•
|
•
|
•
|
•
|
|||
2. |
Senior executive experience (e.g., CEO or CFO) at a publicly traded company |
•
|
•
|
•
|
•
| |||
3. | Experience
in electronics or semiconductor industries |
•
|
•
|
•
|
•
|
•
| ||
4. | Experience in the medical device industry |
•
|
•
|
•
|
•
|
|||
5. | Experience
with corporate development, mergers, and acquisitions |
•
|
•
|
•
|
•
|
•
| ||
6. | Business-to-business
sales management experience |
•
|
•
|
•
|
||||
7. | Financial expert |
•
|
•
|
•
|
•
|
•
| ||
8. | Cybersecurity experience |
•
|
•
|
•
|
•
|
•
|
||
9. | Experience
managing the effects and risks of climate change |
•
|
•
|
•
|
•
|
•
|
||
10. | Experience
managing human capital and enhancing diversity, equity, and inclusion |
•
|
•
|
•
|
•
|
•
|
||
11. | Experience managing employee health and safety |
•
|
•
|
•
|
•
|
•
|
||
12. | Experience
aligning compensation with strategy and performance |
•
|
•
|
•
|
•
|
•
|
||
13. | Experience
with succession planning and execution |
•
|
•
|
•
|
•
|
•
|
||
14. | Independent of Management |
•
|
•
|
•
|
•
|
|||
Background |
||||||||
NVE Board tenure |
24 years
|
22 years
|
19 years
|
9 years
|
2 years
|
|||
Age |
80
|
65
|
63
|
77
|
76
|
|||
Educational background |
English;
Law |
Engineering;
Business |
Accounting
|
Engineering
|
Microbiology
|
|||
Demographic background |
White
|
White
|
White
|
White
|
White
|
|||
Gender identity |
Male
|
Male
|
Female
|
Male
|
Male
|
Board Diversity Matrix (as of June 9, 2023)
|
||||
Total Number of Directors |
5
|
|||
Female
|
Male
|
Non-
Binary |
Did Not
Disclose Gender |
|
Part I: Gender Identity | ||||
Directors |
1
|
4
|
-
|
-
|
Part II: Demographic Background | ||||
African American or Black |
-
|
-
|
-
|
-
|
Alaskan Native or Native American |
-
|
-
|
-
|
-
|
Asian |
-
|
-
|
-
|
-
|
Hispanic or Latinx |
-
|
-
|
-
|
-
|
Native Hawaiian or Pacific Islander |
-
|
-
|
-
|
-
|
White |
1
|
4
|
-
|
-
|
Two
or More Races or Ethnicities |
-
|
-
|
-
|
-
|
LGBTQ+ |
-
|
|||
Did not Disclose Demographic Background |
-
|
Terrence W.
Glarner |
Daniel A.
Baker |
Patricia M.
Hollister |
Richard W.
Kramp |
James W.
Bracke |
|
Audit Committee |
•
|
•
|
•
| ||
Compensation Committee |
•
|
•
|
•
|
||
Nominating/Corporate Governance |
•
|
•
|
•
|
•
|
Patricia M. Hollister | Terrence W. Glarner | James W. Bracke |
Name | Fees Earned or Paid in Cash ($) |
Stock Awards ($) |
Option Awards ($)(1) |
All Other Compensation ($) |
Total ($) | ||||||
Terrence W. Glarner | 11,000 | - | 8,204 |
- | 19,204 | ||||||
Patricia M. Hollister | 10,500 | - | 8,204 |
- | 18,704 | ||||||
Richard W. Kramp | 10,000 | - | 8,204 |
- | 18,204 | ||||||
James W. Bracke | 10,000 | - | 8,204 |
- | 18,204 |
(1) | Grant date fair values of option awards are determined using the Black-Scholes-Merton option-pricing model with the assumptions discussed in Note 5 to the Financial Statements in our Annual Report on Form 10-K for the year ended March 31, 2023. As of March 31, 2023, the named directors held options, all of which were exercisable, to purchase the following numbers of shares: Mr. Glarner, 6,000; Ms. Hollister, 8,000; Mr. Kramp, 7,000; and Dr. Bracke, 2,000. |
“RESOLVED, that the compensation paid to the company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables, and narrative discussion is hereby APPROVED.” |
What We Do | What We Don’t Do | |
CEO compensation is aligned with performance. Our CEO compensation is linked to growth and profitability, which we expect to drive shareholder value. Our CEO has significant exposure to our stock price. Although he is not required to do so, our CEO has significant holdings of company stock. As of March 31, 2023, Mr. Baker held company stock with a market value of 17 times his fiscal 2023 salary. |
We don’t overpay. Our Compensation Committee believes our NEO pay is similar or less than most comparable public companies. We don’t unduly dilute our shareholders. We have a low stock option burn rate and overhang. Option awards to our CEO have been modest and we have not awarded options to our other NEOs. We don’t have executive perks. Our NEOs have not received any significant benefits or perquisites other than those offered to all employees. Our NEOs receive no pension benefits, nonqualified deferred compensation, or other post-employment potential payments. We don’t provide “golden parachutes.” Like all our employees, our NEOs are employees at will and don’t have change of control or severance agreements. |
• | Salary to provide a base of compensation. |
|
• | Bonuses under
extraordinary circumstances. |
|
• | Stock options
to provide a longer-term performance incentive and further align the interest
of our CEO with those of shareholders. |
|
• | Performance-based
compensation, which is at-risk compensation to reward growth and profitability. |
|
• | Fringe benefits (designated “other compensation”), which are not excessive, and our NEOs participate in these benefits under the same terms as all other employees. |
Name
and Principal Position |
Fiscal Year Ended March 31 |
Salary ($) |
Bonus ($) |
Option Awards ($)(1)(2) |
Non-equity
Incentive Plan Compensation($)(3) |
All Other Compensation ($)(4) |
Total ($) |
|||||||
Daniel A. Baker | 2023 | 400,000 | - | 26,082 | 616,108 | 13,290 | 1,055,480 | |||||||
President and CEO | 2022 | 380,651 | - | 32,067 | 271,562 | 13,307 | 697,587 | |||||||
Peter G. Eames | 2023 | 215,000 | 20,000 | - | 43,000 | 11,743 | 269,743 | |||||||
Vice President, Advanced Technology | 2022 | 201,755 | - | - | - | 10,883 | 212,859 | |||||||
Daniel Nelson(5) | 2023 | 36,308 | - | - | - | (7) | 36,308 | |||||||
Principal Financial Officer | ||||||||||||||
Joseph R. Schmitz(6) | 2023 | 196,344 | - | - | - | 10,416 | 206,760 | |||||||
Former Chief Financial Officer | 2022 | 33,750 | - | - | - | (7) | 33,750 |
(1) | Option awards are based on the fair value on the grant date determined
from the Black-Scholes-Merton option-pricing model with the assumptions discussed
in Note 5 to the Financial Statements in our Annual Report on Form
10-K for the year ended March 31, 2023. |
(2) | Option awards have a one-year vesting period. |
(3) | Paid based on performance achieved during the fiscal year under
plans approved by our Compensation Committee at the beginning of the fiscal years. |
(4) | Includes Company contributions made to 401(k) savings plans and
Health Savings Accounts on behalf of NEOs, and life and long-term disability insurance
premiums paid on behalf of NEOs. NEOs participate in these benefit programs under
the same terms as all other employees. |
(5) | Mr. Nelson joined the Company in September 2022 and was promoted
to Principal Financial Officer effective May 8, 2023. |
(6) | Mr. Schmitz was Chief Financial Officer from January 20, 2022
through May 5, 2023. |
(7) | Less than $10,000. |
Year
Ended March 31 |
Summary Compensation Table Total for CEO($) |
“Actually
Paid” CEO Compensation ($)(1) |
Average
Summary Comp. Table Total for Non-CEO NEOs($)(2) |
Average
Comp. Actually Paid to Non-CEO NEOs($)(1)(2) |
Value of
Initial Fixed $100 Investment Based on Total Shareholder Return($)(3) |
Company Net Income($) |
Company Income from Operations ($)(4) |
|||||||
2023 | 1,055,480 |
1,081,798 | 238,252 | 238,252 | 157.18 | 22,694,458 | 25,644,182 | |||||||
2022 | 697,587 | 675,995 | 212,859 |
212,859 |
85.05 | 14,507,501 | 16,328,685 |
(1) | “Actually paid” compensation is defined as “total compensation”
as reported in the Summary Compensation Table except the value of Option Awards
calculated as follows: (i) for new option awards granted during the fiscal year,
the fair value as of the earlier of the vesting date or the last day of the fiscal
year; plus (ii) for awards granted in prior fiscal years (and not vested as of
the first day of the covered fiscal year), the change in fair value (positive
or negative) from the end of the last fiscal year to the earlier of the vesting
date or the end of the covered fiscal year. Fair value is determined from the
Black-Scholes-Merton option-pricing model with the assumptions discussed in Note 5
to the Financial Statements in our Annual Report on Form
10-K for the year ended March 31, 2023. |
(2) | Fiscal 2023 averages exclude Mr. Nelson, and fiscal 2022 averages exclude
Mr. Schmitz because they were not employees for the entire year. |
(3) | Based on an initial fixed $100 investment at the beginning of the fiscal year. |
(4) | We use income from operations as an important financial metric to link compensation to financial performance. |
By Order of the Board of Directors | |
![]() |
|
Daniel A. Baker President and CEO June 19, 2023 |
1. | Elect five directors. | |||||
01 | Terrence W. Glarner | 03 | Patricia M. Hollister | 05 | James W. Bracke | |
02 | Daniel A. Baker | 04 | Richard W. Kramp | |||
[ ] | Vote FOR all nominees (except as marked) |
[ ] | Vote WITHHELD from all nominees |
|||
Instructions: To withhold authority to vote for any nominee, strike a line through the name(s). |
2. | Advisory approval of named executive officer compensation. | |||
[ ] FOR | [ ] AGAINST | [ ] ABSTAIN | ||
3. | Advisory vote on the frequency of votes on executive compensation. | |||
[ ] 1 YEAR | [ ] 2 YEARS | [ ] 3 YEARS | [ ] ABSTAIN | |
4. | Ratify the selection of Boulay PLLP as our independent registered public accounting firm for the fiscal year ending March 31, 2024. | |||
[ ] FOR | [ ] AGAINST | [ ] ABSTAIN | ||
(please sign on the other side) |