DEF 14A

COGNEX CORPORATION

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held on May 1, 2024

To our Shareholders:

The 2024 Annual Meeting of Shareholders of COGNEX CORPORATION will be held at 9:00 a.m. local time on Wednesday, May 1, 2024, at Cognex’s headquarters located at One Vision Drive, Natick, Massachusetts 01760, for the following purposes:

1.	To elect two Directors to serve for a term of three years;

2.	To ratify the selection of Grant Thornton LLP as our independent registered public accounting firm for fiscal year 2024; and

3.	To cast a non-binding advisory vote to approve executive compensation (“say-on-pay”).

In addition, we will consider any other business that may properly come before the meeting or any adjournments or postponements of the meeting.

The Board of Directors has fixed the close of business on March 1, 2024 as the record date for the meeting. All shareholders of record on that date are entitled to receive notice of and to vote at the meeting.

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE YOUR SHARES BY TELEPHONE, VIA THE INTERNET, OR BY COMPLETING AND RETURNING A PROXY CARD. IF YOU ATTEND THE MEETING, YOU MAY CONTINUE TO HAVE YOUR SHARES VOTED AS INSTRUCTED IN THE PROXY, OR YOU MAY WITHDRAW YOUR PROXY AT THE MEETING AND VOTE YOUR SHARES IN PERSON.

By Order of the Board of Directors,

Mark T. Fennell, Secretary

Natick, Massachusetts

March 15, 2024

Important

Please note that due to security procedures, you may be required to show a form of picture identification to gain access to our headquarters. Please contact the Cognex Department of Investor Relations at (508) 650-3000 if you plan to attend the meeting.

COGNEX CORPORATION

PROXY STATEMENT

INFORMATION ABOUT THE MEETING AND VOTING PROCEDURES

General

This proxy statement is being furnished to you in connection with the solicitation of proxies by the Board of Directors of Cognex Corporation (“Cognex” or the “company”) for use at the 2024 Annual Meeting of Shareholders (the “meeting” or “this meeting”) to be held at 9:00 a.m. local time on Wednesday, May 1, 2024, at our headquarters located at One Vision Drive, Natick, Massachusetts 01760, and at any adjournments or postponements of that meeting. Our telephone number is (508) 650-3000. At this meeting, shareholders will consider and vote on the following proposals:

1.	To elect two Directors to serve for a term of three years;

2.	To ratify the selection of Grant Thornton LLP as our independent registered public accounting firm for fiscal year 2024; and

3.	To cast a non-binding advisory vote to approve executive compensation (“say-on-pay”).

The Board of Directors (the “Board”) recommends that you vote your shares “FOR” each proposal. The Board knows of no other matters to be presented at this meeting.

This proxy statement is first being made available to our shareholders on or about March 15, 2024.

Voting Rights and Quorum

Shareholders of record at the close of business on March 1, 2024 (the “Record Date”) are entitled to receive notice of and to vote at the meeting. As of the close of business on the Record Date, there were 171,821,187 shares of our common stock outstanding and entitled to vote. Each outstanding share of our common stock entitles the record holder to one vote. Shareholders have no right to cumulative voting as to any matter. Our common stock is listed and trades on the NASDAQ Global Select Market.

The holders of a majority of our common stock outstanding on the Record Date are required to be present in person or be represented by proxy at the meeting to constitute a quorum for the transaction of business. Therefore, a quorum will be present if 85,910,594 shares of our common stock are present in person or represented by executed proxies timely received by us at the meeting. Following the determination of a quorum, the vote required for approval of the matters to be considered at the meeting is as follows:

•

Nominees for Director will be elected if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. An incumbent Director who does not receive more votes “for” than “against” his or her election will promptly offer to tender his or her resignation. The resignation would be considered by the Nominating, Governance and Sustainability Committee and acted upon by our Board (without participation by the incumbent Director who tendered his or her resignation) within 90 days of the election. Thereafter, the Board of Directors will promptly disclose its decision whether to accept the Director’s resignation in a Current Report on Form 8-K furnished to the U.S. Securities and Exchange Commission (the “SEC”).

•

Other matters presented at the meeting require the affirmative vote of a majority of votes cast on the matter.

Treatment of Abstentions and Broker Non-Votes

We will count both abstentions and broker “non-votes” as present for the purpose of determining the existence of a quorum for the transaction of business. For the purpose of determining the number of shares voting on a particular proposal, we will not count abstentions and broker “non-votes” as votes cast or shares voting. As a result, abstentions and broker non-votes, if any, will have no effect on the voting results for any of the proposals to be presented at the meeting.

If you are a beneficial owner of shares held in a brokerage account and you do not instruct your broker, bank or other agent how to vote your shares, your broker, bank or other agent may still be able to vote your shares in its discretion. Under the rules of the New York Stock Exchange, which are also applicable to NASDAQ-listed companies, brokers, banks and other securities intermediaries that are subject to New York Stock Exchange rules may use their discretion to vote your “uninstructed” shares on matters considered to be “routine” under New York Stock Exchange rules but not with respect to “non-routine” matters. A broker non-vote occurs when a broker, bank or other agent has not received voting instructions from the beneficial owner of the shares and the broker, bank or other agent cannot vote the shares because the matter is considered “non-routine” under New York Stock Exchange rules. Proposals 1 and 3 are considered to be “non-routine” under New York Stock Exchange rules such that your broker, bank or other agent may not vote your shares on those proposals in the absence of your voting instructions. Conversely, proposal 2 is considered to be “routine” under New York Stock Exchange rules and, thus, if you do not return voting instructions to your broker, your shares may be voted by your broker in its discretion on proposal 2.

Voting Your Shares

If you received a paper copy of the proxy materials, you may vote your shares by submitting the proxy card accompanying the material for use at the meeting. Please complete, date, sign and submit the proxy card as instructed on the card. You may also vote your shares by telephone or via the Internet by following the instructions included on the proxy card or on the Notice of Internet Availability of Proxy Materials. The Internet and telephone voting facilities for shareholders of record will close at 1:00 a.m. Eastern time on May 1, 2024. If you are a shareholder who holds shares through a broker, bank or other similar organization (that is, in “street name”), please refer to the instructions from the broker, bank or other organization holding your shares.

The Board recommends an affirmative vote on all proposals described in the notice for the meeting. Proxies will be voted as specified. If your proxy is properly submitted, it will be voted in the manner that you direct. If you do not specify instructions with respect to any particular matter to be acted upon at the meeting, proxies will be voted in favor of the Board of Directors’ recommendations as set forth in this proxy statement.

You may revoke your proxy at any time before your proxy is voted at the meeting by:

•

Giving written notice of revocation of your proxy to the Secretary of Cognex at the company’s headquarters;

•

Completing and submitting a new proxy card relating to the same shares and bearing a later date;

•

Properly casting a new vote through the Internet or by telephone at any time before the closure of the Internet or telephone voting facilities; or

•

Voting in person at the meeting, although meeting attendance will not, by itself, revoke a proxy.

If a broker, bank or other similar organization holds your shares, you must contact them in order to find out how to revoke or change your vote.

Expense of Solicitation

The cost of this solicitation will be borne by Cognex. It is expected that the solicitation will be made primarily by delivery of these materials, but regular employees or representatives of Cognex (none of whom will receive any extra compensation for their activities) may also solicit proxies by telephone, email, fax and in person and arrange for brokerage houses and other custodians, nominees and fiduciaries to send proxy materials to their principals at our expense.

How to Obtain an Annual Report on Form 10-K

Our Annual Report on Form 10-K, including the financial statements and schedules to such report, required to be filed with the SEC for our most recent fiscal year is available on our website at www.cognex.com under “Company—Investor Information—Financial Reports—SEC Filings.” Shareholders can send a written request to Investor Relations at Cognex Corporation, One Vision Drive, Natick, Massachusetts 01760 or by email at IR@cognex.com and we will provide a printed copy to such person without charge.

The information contained in our website, including any documents referenced herein that appear on our website, is not included as part of, or incorporated by reference into, this proxy statement, and any references to our website are intended to be inactive textual references only.

Householding of Annual Meeting Materials

Some banks, brokers and other nominee record holders may send only one copy of our proxy statement and annual report to multiple shareholders in the same household unless contrary instructions were received. To obtain a copy of either document, please contact Cognex Investor Relations at the mailing address or email address noted above. To receive a copy of either document in the future, or if you are receiving multiple copies and want to receive only one copy per household, you should contact your bank, broker, or other nominee record holder, or you may contact us at the above mailing or email address.

Investor Contact

If you have any questions about the meeting or your ownership of our common stock, please contact Cognex Investor Relations at the above mailing or email address.

STOCK OWNERSHIP

Security Ownership of Certain Beneficial Owners

The following table shows as of the Record Date, any person who is known by us to be the beneficial owner of more than five percent of our common stock. For purposes of this proxy statement, beneficial ownership is defined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, agreement, understanding, relationship or otherwise has or shares the power to vote such security or to dispose of such security.


Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership of Common Stock			Percent of Class (1)
The Vanguard Group, Inc. (and affiliates) 100 Vanguard Blvd. Malvern, PA 19355		17,334,047	(2)		10.1	%
BlackRock, Inc. (and affiliates) 50 Hudson Yards New York, NY 10001		14,840,415	(3)		8.6	%
The Bank of New York Mellon Corporation (and affiliates) 240 Greenwich Street New York, NY 10286		10,520,621	(4)		6.1	%

(1)	Percentages are calculated on the basis of 171,821,187 shares of our common stock outstanding as of March 1, 2024.

(2)

Information regarding The Vanguard Group, Inc. is based solely upon a Schedule 13G/A filed by The Vanguard Group with the SEC on February 13, 2024, which indicates that The Vanguard Group held shared voting power over 59,079 shares, sole dispositive power over 17,092,299 shares and shared dispositive power over 241,748 shares.

(3)	Information regarding BlackRock, Inc. is based solely upon a Schedule 13G/A filed by BlackRock with the SEC on January 25, 2024, which indicates that BlackRock held sole voting power over 14,444,392 shares and sole dispositive power over 14,840,415 shares.

(4)

Information regarding The Bank of New York Mellon Corporation is based solely upon a Schedule 13G/A filed by The Bank of New York Mellon Corporation with the SEC on January 24, 2024, which indicates that: The Bank of New York Mellon Corporation held sole voting power over 7,733,394 shares, shared voting power over 1,455 shares, sole dispositive power over 8,437,942 shares and shared dispositive power over 1,747,842 shares; each of BNY Mellon IHC, LLC and MBC Investments Corporation held sole voting power over 7,066,989 shares, sole dispositive power over 7,729,481 shares and shared dispositive power over 1,734,241 shares; and each of BNY Mellon Investment Management (Jersey) Limited, BNY Mellon Investment Management Europe Holdings limited, BNY Melon International Asset Management Group Limited, BNY Mellon International Asset Management (Holdings) Limited, and Walter Scott and Partners Limited held sole voting power over 6,413,875 shares, sole dispositive power over 7,038,967 shares and shared dispositive power over 1,671,990 shares.

Security Ownership of Directors and Executive Officers

The following information is furnished as of the Record Date, with respect to our common stock beneficially owned within the meaning of Rule 13d-3 of the Exchange Act by each of our Directors, each Director nominee, each of the “named executive officers” (as defined in Item 402(a)(3) of Regulation S-K) and by all of our Directors and executive officers as a group. Unless otherwise indicated, the individuals named held sole voting and investment power over the shares listed below. The address for each individual is c/o Cognex Corporation, One Vision Drive, Natick, Massachusetts 01760.


Name	Amount and Nature of Beneficial Ownership of Common Stock (1)			Percent of Class (2)
Robert J. Willett		804,716	(3)		*
Anthony Sun		475,002	(4)		*
Sheila M. DiPalma		285,726			*
Carl W. Gerst III		255,530			*
Joerg Kuechen		210,821			*
Paul D. Todgham		133,556			*
Dianne M. Parrotte		48,740			*
Sachin Lawande		6,340			*
Marjorie T. Sennett		3,573			*
John T.C. Lee		1,906			*
Angelos Papadimitriou		1,016			*
All Directors and Executive Officers as a group (11 persons)		2,226,926	(5)		1.3	%

*	Less than 1%

(1)

Includes the following shares, which the specified individual has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of March 1, 2024: Mr. Willett, 788,912 shares; Mr. Sun (by Sun Management Associates, LLC, a California limited liability company), 135,400 shares; Ms. DiPalma, 281,724 shares; Mr. Gerst, 248,748 shares; Mr. Kuechen, 202,556 shares; Mr. Todgham, 103,416 shares; and Dr. Parrotte, 39,400 shares.

(2)

Percentages are calculated on the basis of 173,621,343 shares of our common stock outstanding as of March 1, 2024. The total number of shares outstanding used in this calculation assumes that the currently exercisable options or options which become exercisable within 60 days of March 1, 2024, as well as shares issuable upon settlement of restricted stock units (“RSUs”) that are expected to vest within 60 days of March 1, 2024, held by the specified person are exercised or vest, as applicable. Such number of shares outstanding does not include the number of shares of our common stock underlying options or RSUs held by any other person.

(3)	Includes 15,804 shares of common stock held by Willett Parkhill Investment Trust dated August 2, 2010, of which Mr. Willett is a trustee and beneficiary. Mr. Willett has disclaimed beneficial ownership of these securities except to the extent of his pecuniary interest therein.

(4)	Includes 26,608 shares of common stock and 135,400 options held by Sun Management Associates, LLC, a California limited liability company, of which Mr. Sun is a member. Mr. Sun has disclaimed beneficial ownership of these securities except to the extent of his pecuniary interest therein.

(5)	Includes 1,800,156 shares which certain Directors and executive officers have the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of March 1, 2024.

CORPORATE GOVERNANCE

Code of Business Conduct and Ethics

We have a Code of Business Conduct and Ethics that applies to our Board of Directors and our employees, including our named executive officers. Predating this code are our company’s ten corporate values, which include “integrity” and are the basis for ensuring that we maintain the highest ethical standards in all that we do. Copies of our company’s Code of Business Conduct and Ethics are available on our website at www.cognex.com under “Company—Investor Information—ESG—Governance Documents” and our ten core values are available under “Company—Investor Information—ESG—ESG Overview.” We intend to disclose on our website any amendment to, or waiver of, any provision of this code applicable to our Directors and named executive officers that would otherwise be required to be disclosed under the rules of the SEC or The NASDAQ Stock Market LLC (“Nasdaq”).

Director Independence

Our Board of Directors has determined that the Director nominees and other incumbent Directors are “independent” as such term is defined in the applicable listing standards of Nasdaq, except for Robert J. Willett, who is an executive officer of Cognex. In making this determination, the Board considered that Dr. Lee is the President and Chief Executive Officer of MKS Instruments, Inc. and Mr. Lawande is President and Chief Executive Officer of Visteon Corporation, each of which is a company with which Cognex has done a small amount of business, all through arm’s length, ordinary course transactions, in which Dr. Lee and Mr. Lawande, as applicable, have no material interest.

Board Leadership Structure

The positions of Chief Executive Officer and Chairman of the Board of Directors were separated in March 2011. At that time, Mr. Willett was promoted to become our Chief Executive Officer. Anthony Sun was appointed Chairman of the Board of Directors in May 2021. Mr. Sun provides an independent voice on the Board in addition to his deep knowledge of Cognex acquired through his tenure on our Board. Mr. Sun continues to lead executive sessions of the independent Directors, which occur regularly. Our Board believes that this leadership structure (specifically, maintaining the separation of the CEO and Chairman roles), promotes the proper balance of leadership and direction for the Board and management that assists the Board in the administration of its risk oversight responsibilities.

The Board’s Role in Risk Oversight

The role of our Board of Directors in our company’s risk oversight process includes receiving regular reports from management on areas of material risk to our company, including operational, financial, legal, regulatory, strategic and reputational risks, and reviewing the outputs of our company’s “Enterprise Risk Management” program. The Board (or the appropriate committee in the case of risks that are under the purview of a particular committee) receives these reports from the appropriate “risk owner” within our company so that it can understand our risk identification, risk management and risk mitigation strategies. When a committee receives the report, the Chairman of the relevant committee reports on the discussion to the full Board. This enables the Board and its committees to coordinate the risk oversight role. Our Board of Directors also

administers its risk oversight function through the required approval by the Board (or a committee of the Board) of significant transactions and other material decisions, and regular periodic reports from our company’s independent registered public accounting firm and other outside consultants regarding various areas of potential risk, including, among others, those relating to our cybersecurity, internal controls and financial reporting. As part of its charter, the Audit Committee discusses with management and our independent registered public accounting firm significant risks and exposures and the steps management has taken to minimize those risks. The Audit Committee receives reports regarding cybersecurity risks from the company’s Information Security Team on an annual basis. The Audit Committee periodically reports on cybersecurity risk management to the full Board of Directors.

Policy on Pledging, Hedging and Trading of Cognex Stock

Our insider trading policy governs the timing and type of transactions in Cognex stock by our Board of Directors and certain Cognex employees who have regular access to material non-public information, including our executive officers (collectively, “Insiders”). For example, Insiders are prohibited from trading in Cognex securities during “quiet periods” designated by the company’s Chief Financial Officer. Among other provisions, the policy:

•

prohibits our Directors and any Cognex employee, including our executive officers, from engaging in short sales of Cognex stock (with violators subject to immediate termination);

•

prohibits our Directors and executive officers from trading in exchange-traded options for Cognex stock or any other derivative security designed to hedge or offset risk of a decline in the market value of Cognex stock; and

•

prohibits our Directors and executive officers from pledging Cognex stock as collateral for a loan without the approval of the Compensation/Stock Option Committee of the Board of Directors.

Communications to Directors

Shareholders who wish to communicate with our Board of Directors or with a particular Director may send a letter to the Secretary of Cognex Corporation at One Vision Drive, Natick, Massachusetts 01760. The mailing envelope should contain a clear notation indicating that the enclosed letter is a “Shareholder-Board Communication” or “Shareholder-Director Communication.” The letter should clearly state whether the intended recipients are all members of our Board or certain specified individual Directors. The Secretary will make copies of all letters and circulate them to the appropriate Director(s).

Board Meetings, Committees and Attendance

Our Board of Directors held eight meetings during 2023. During 2023, each Director attended at least 75% of the total number of meetings of the Board of Directors held during the period the Director served on the Board and meetings of the committees on which such Director served during the period the Director served on the Board. Our Directors are strongly encouraged to attend the annual meeting of shareholders or any special meeting in lieu of the annual meeting; however, we do not have a formal policy with respect to attendance at that meeting. All of our Directors attended the 2023 Annual Meeting of Shareholders held on May 3, 2023.

The Board has three standing committees: the Compensation/Stock Option Committee, the Audit Committee and the Nominating, Governance and Sustainability Committee. Each committee acts according to a

written charter approved by the Board. The charters are available on our website at www.cognex.com under “Company—Investor Information—ESG—Governance Documents.” Each Director who served on a Board committee during 2023 was “independent” as such term is defined in the applicable listing standards of Nasdaq and SEC rules. The agenda for committee meetings is determined by its Chairman in consultation with the other members of the committee and management. The Chairman reports the actions and determinations of the committee to the full Board on a regular basis.

The following table provides current committee membership information for each of the Board committees:

Name

Compensation/
Stock Option

Audit

Nominating,
Governance and
Sustainability

Sachin Lawande

John T.C. Lee

Angelos Papadimitriou

Dianne M. Parrotte

Marjorie T. Sennett

Anthony Sun

*	Committee Chairman

X	Committee Member

Theodor Krantz, a former Director whose term on the Board ended on May 3, 2023, served as Chairman of the Compensation/Stock Option Committee and the Audit Committee through the end of his term.

Compensation/Stock Option Committee

In accordance with its written charter, the Compensation/Stock Option Committee:

•

Discharges the Board’s responsibilities relating to the compensation of Cognex’s executives, including the determination of the compensation of our Chief Executive Officer and other executive officers;

•

Oversees our overall compensation structure, policies and programs;

•

Administers our stock option and equity incentive plans;

•

Periodically reviews the level of equity ownership of our named executive officers and Directors to determine compliance with our Stock Ownership Guidelines; and

•

Reviews and makes recommendations to the Board regarding the compensation of our Directors.

Since 2020, the Compensation/Stock Option Committee has engaged the independent compensation consulting services of Pay Governance LLC (“Pay Governance”). Pay Governance reports directly to the Compensation/Stock Option Committee and assists it in evaluating and designing our executive and Director compensation programs and policies. During 2023, Pay Governance reviewed and provided market information and analysis regarding the competitiveness of our executive and Director compensation program design and our award values in relationship to our performance and peer group. Additionally, Pay Governance provided market

data and regulatory updates as well as governance best practices. Pay Governance attends committee meetings, as requested, and communicates with the chairman of the Compensation/Stock Option Committee and our Executive Vice President of Employee Services between meetings; however, the Compensation/Stock Option Committee makes all of our executive compensation decisions. Pay Governance is retained only by the Compensation/Stock Option Committee and does not provide any other consulting services to the company. Additional information about the Compensation/Stock Option Committee’s role in setting executive compensation and the services Pay Governance performed for the Compensation/Stock Option Committee in 2023 is described in our “Compensation Discussion and Analysis” section below.

The Compensation/Stock Option Committee regularly reviews the services provided by Pay Governance and believes that Pay Governance is independent in providing compensation consulting services. The Compensation/Stock Option Committee conducted a specific review of its relationship with Pay Governance in 2023, and determined that Pay Governance’s work for the committee did not raise any conflicts of interest, consistent with the regulations adopted by the SEC and Nasdaq. In addition, Pay Governance delivered a letter to the Compensation/Stock Option Committee certifying to its independence in accordance with the independence standards of the SEC and Nasdaq.

Our Chief Executive Officer, other Cognex executives, and the Cognex Employee Services Department also support the Compensation/Stock Option Committee in its duties and may be delegated authority to fulfill certain administrative duties regarding Cognex’s compensation programs. In addition, our Chief Executive Officer makes recommendations to the Compensation/Stock Option Committee on an annual basis regarding salary increases, potential bonuses, and equity-based awards for each of our other executive officers. Our Chief Executive Officer is not present during voting or deliberations concerning his compensation. Our Chief Executive Officer has also been delegated the authority to approve stock options, restricted stock unit awards and other equity-based awards to non-executive employees of Cognex not to exceed 80,000 shares to any one individual in the aggregate per calendar year.

The Compensation/Stock Option Committee has sole authority under its charter to retain, approve fees for, determine the scope of the assignment of, and terminate advisors and consultants as it deems necessary to assist in the fulfillment of its responsibilities. The Compensation/Stock Option Committee utilizes independent third-party benchmarking surveys acquired by Cognex and, as described above, may retain compensation consultants from time to time.

Committee meetings are regularly attended by our Executive Vice President of Employee Services, Sheila DiPalma, except when her compensation is being discussed, and may also include other executives at the invitation of the Compensation/Stock Option Committee. The Compensation/Stock Option Committee also meets in executive session as appropriate. The Compensation/Stock Option Committee met three times in 2023.

The full Board determines the compensation of our Directors, after considering any recommendations of the Compensation/Stock Option Committee.

Further information regarding the processes and procedures of the Compensation/Stock Option Committee for establishing and overseeing our executive compensation programs is provided under the heading “Compensation Discussion and Analysis.”

Audit Committee

In accordance with its written charter, the Audit Committee’s general responsibilities include, among other things, the following:

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Appointing, compensating, retaining, terminating, and overseeing of the work of Cognex’s independent registered public accounting firm;

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Reviewing the qualifications, performance and independence of Cognex’s independent registered public accounting firm;

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Reviewing our audited and unaudited financial statements;

•

Reviewing the adequacy and effectiveness of our internal control over financial reporting with management and our independent registered public accounting firm;

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Reviewing and authorizing both audit and non-audit services and related fees to be provided to Cognex by its independent registered public accounting firm;

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Reviewing and approving related party transactions; and

•

To the extent deemed necessary by the Audit Committee to carry out its responsibilities, engaging independent counsel and other advisors and determining the compensation payable to them.

For 2023, among other functions, the Audit Committee reviewed with our independent registered public accounting firm the scope of the audit for the year, the results of the audit when completed and the independent registered public accounting firm’s fees for services performed. The Audit Committee also appointed the independent registered public accounting firm and reviewed with management various matters related to our internal controls. The Board delegated responsibility for oversight of risks from cybersecurity threats to the Audit Committee. The Audit Committee receives reports from the company’s Information Security Team on an annual basis. The Audit Committee held five meetings during 2023.

The Board of Directors has determined that all members of the Audit Committee are financially literate, and that Ms. Sennett qualifies as an “audit committee financial expert” under the rules of the SEC.

Nominating, Governance and Sustainability Committee

The Nominating, Governance and Sustainability Committee is responsible for identifying individuals qualified to serve as members of the Board and recommending to the Board nominees for election as Directors at each annual meeting of shareholders and when vacancies in the Board occur for any reason. The Nominating, Governance and Sustainability Committee is also responsible for developing and recommending to the Board a set of corporate governance guidelines to assist and guide the Board in the exercise of its responsibilities, periodically reviewing these guidelines and recommending changes deemed appropriate, and coordinating any evaluations of the Board and its committees. Further, the Committee is responsible for the general oversight of Cognex’s environmental, social and governance (“ESG”) strategy, practices and policies, including the consideration of emerging ESG trends that may affect the business, operations, performance or reputation of Cognex. The Nominating, Governance and Sustainability Committee met three times during 2023.

In February 2024, the Board met and, upon the recommendation of the Nominating, Governance and Sustainability Committee, recommended the Director nominees for election at the meeting. Sachin Lawande and Marjorie T. Sennett have been nominated for election to the Board.

Compensation/Stock Option Committee Interlocks and Insider Participation

During 2023, Dr. Lee, Dr. Parrotte, Mr. Sun and Mr. Krantz (through May 3, 2023, the end of Mr. Krantz’s term on the Board) served on the Compensation/Stock Option Committee. No member of the Compensation/Stock Option Committee served as an officer or employee of Cognex or any of its subsidiaries, nor, other than Dr. Lee as described above, had any business relationship or affiliation with Cognex or any of its subsidiaries during 2023 other than his or her service as a Director.

Certain Relationships and Related Transactions

In accordance with its written charter, the Audit Committee conducts an appropriate review of all related party transactions for potential conflict of interest situations on an ongoing basis, and the approval of the Audit Committee is required for all related party transactions. Since the beginning of 2023, there were no related party transactions, and there are not currently any proposed related party transactions, that would require disclosure under SEC rules. Under our Code of Business Conduct and Ethics, any transaction or relationship engaged in by our employees that reasonably could be expected to give rise to a conflict of interest should be reported promptly to our Compliance Officer, who may notify our Board of Directors or a committee thereof as he or she deems appropriate. Actual or potential conflicts of interest involving a Director or executive officer are required to be disclosed directly to the Chairman of our Board of Directors.

Board Diversity Matrix

The following shows the diversity make-up of the Board as of March 1, 2024.


Board Diversity Matrix (as of March 1, 2024)
Total Number of Directors						7
	Female		Male		Non-Binary		Did Not Disclose Gender
Gender Identity
Directors		2		5		0		0
Demographic Background
African American or Black		0		0
Alaskan Native or Native American		0		0
Asian		0		3
Hispanic or Latinx		0		0
Native Hawaiian or Pacific Islander		0		0
White		1		2
Two or More Races or Ethnicities		0		0
LGBTQ+		0		0
Did Not Disclose Demographic Background		1		0

Director Nominees

When considering a potential candidate for membership on our Board of Directors, the Nominating, Governance and Sustainability Committee will consider any criteria it deems appropriate, including, among other things, the experience and qualifications of any particular candidate as well as such candidate’s past or

anticipated contributions to our Board and its committees. At a minimum, each nominee is expected to have high personal and professional integrity and demonstrated ability and judgment to be effective, with the other Directors and management, in collectively serving the long-term interests of our shareholders. Each nominee is expected to be personable and support our “Work Hard, Play Hard, Move Fast” culture. Further, each nominee is expected to have direct and significant experience in one or more industries or markets in which our company does, or plans to do, business, and/or significant senior-level management experience in functions or roles which are helpful to our company. This includes finance, accounting, legal, human resources, engineering, manufacturing, and sales and marketing.

In addition to the minimum qualifications set forth above, when considering potential candidates for our Board of Directors, the Nominating, Governance and Sustainability Committee seeks to ensure that the Board of Directors is comprised of a majority of independent Directors, that the committees of the Board are comprised entirely of independent Directors, and that at least one member of the Audit Committee qualifies as an “audit committee financial expert” under SEC rules. The Nominating, Governance and Sustainability Committee may also consider any other standards that it deems appropriate.

The Nominating, Governance and Sustainability Committee considers the composition of our Board overall, with the goal of having a combination of backgrounds, skills and knowledge to help promote Cognex’s long-term strategy. In particular, the committee, when recommending director candidates to the full Board for nomination, may consider whether a director candidate, if elected, assists in achieving a mix of Board members that represents a diversity of background and experience.

Board diversity, including with respect to ethnicity, age and gender, continues to be a priority of the Board. In 2017, our Board amended our corporate governance guidelines to require our Nominating, Governance and Sustainability Committee to include women and individuals from minority groups who meet the required qualifications on the initial list of director candidates from which new board nominees are chosen. In addition, any search firm retained by the Nominating, Governance and Sustainability Committee is required to abide by these guidelines. Since these requirements were added to our corporate governance guidelines, Dr. Parrotte (in 2018), Mr. Lawande (in 2021), Ms. Sennett (in 2021), Dr. Lee (in 2022), and Mr. Papadimitriou (in 2023) have been elected to the Board. The Nominating, Governance and Sustainability Committee believes that there will be opportunities over the next one-to-three years to continue to add strong, independent and diverse directors to the Board.

In practice, the Nominating, Governance and Sustainability Committee generally will evaluate and consider all candidates recommended by our Directors, officers and shareholders. The Nominating, Governance and Sustainability Committee intends to consider shareholder recommendations for directors using the same criteria as potential nominees recommended by the members of the Nominating, Governance and Sustainability Committee or others. The Nominating, Governance and Sustainability Committee did not receive any shareholder nominations for director with respect to this Annual Meeting of Shareholders.

Shareholders who wish to submit Director candidates for consideration as nominees for election at our 2025 Annual Meeting of Shareholders should send such recommendations to the Secretary of Cognex Corporation at our executive offices on or before November 15, 2024. These recommendations must include:

•

the name and address of record of the shareholder;

•

a representation that the shareholder is a record holder of our common stock, or if the shareholder is not a record holder, evidence of ownership in accordance with Rule 14a-8(b)(2) of the Exchange Act;

•

the name, age, business and residential address, educational background, current principal occupation or employment, and principal occupation or employment for the preceding ten full fiscal years of the proposed Director candidate;

•

a description of the qualifications and background of the proposed Director candidate which addresses the minimum qualifications described above and any other criteria for Board membership approved by the Board from time to time;

•

a description of all arrangements or understandings between the shareholder and the proposed Director candidate; and

•

the consent of the proposed Director candidate to be named in the proxy statement, to serve as a Director if elected at such meeting, and to give our company the authority to carry out a detailed and thorough investigation of his/her educational, professional, financial and personal history.

Shareholders must also submit any other information regarding the proposed Director candidate that is required to be included in a proxy statement filed pursuant to SEC rules. See also the information under the heading “Shareholder Proposals.”

PROPOSAL 1: ELECTION OF DIRECTORS

Our Board of Directors currently consists of seven Directors and is divided into three classes, with one class being elected each year for a term of three years. We are proposing that Sachin Lawande and Marjorie T. Sennett be elected to serve terms expiring at the 2027 Annual Meeting of Shareholders and in each case until a successor is duly elected and qualified or until his or her earlier death, resignation or removal. Biographical information including the key attributes and skills the director nominees bring to our Board is set forth below.

Recommendation

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF SACHIN LAWANDE AND MARJORIE T. SENNETT.

The persons named in the accompanying proxy will vote, unless a shareholder specifies otherwise, “FOR” the election of the nominees named above. Our Board of Directors anticipates that each nominee, if elected, will serve as a Director. If a nominee is unable to accept election, the persons named in the accompanying proxy will vote for such substitute as our Board of Directors may recommend. There are no family relationships between any incumbent Director or any Director nominee and any executive officer of Cognex or its subsidiaries.

Information Regarding Directors and the Director Nominees

Set forth below is information furnished to us by the Director nominees and the incumbent Directors whose terms will continue after the meeting. The biographical description for each Director and Director nominee includes his or her age, all positions he or she holds with Cognex, his or her principal occupation and business experience over the past five years, and the names of other publicly held companies for which he or she currently serves as a director or has served during the past five years. It also includes the specific experience, qualifications, attributes and skills that led to our Board’s conclusion that the nominee should serve as a director of Cognex or, with respect to each Director who is not standing for election, that the Board would expect to consider if it were making a conclusion currently as to whether he or she should serve as a director.

We believe that all of our Directors have a reputation for integrity, honesty and adherence to high ethical standards. Each has demonstrated business acumen and an ability to exercise sound judgment as well as a commitment of service to Cognex and, to the extent applicable, our Board. Our Board does not currently evaluate whether incumbent Directors who are not standing for election should serve as directors, as the terms for which they were previously elected continue beyond the meeting.

Nominated for a term ending in 2027:

Sachin Lawande, 56, has served as a Director since January 1, 2021. Mr. Lawande is the President and Chief Executive Officer of Visteon Corporation (VC), a leading global technology supplier of vehicle cockpit electronic products. Mr. Lawande has held this position since 2015. Previously, he worked for Harman International Industries, Inc. (HAR), which was an independent public company at the time, for 10 years, where he held a range of leadership positions including president of the company’s largest division with nearly $3 billion in annual sales. Since 2015, Mr. Lawande has served as a Director of Visteon Corporation, a publicly held company listed on Nasdaq. He was also on the board of DXC Technology Company (DXC) from 2015 until

August 2020. Mr. Lawande holds a B.S. from Bombay University, and a Master’s Degree from Southern Illinois University at Edwardsville, in Electrical and Electronics Engineering. We believe Mr. Lawande’s qualifications for sitting on the Board of Directors include his executive leadership experience, including his service as chief executive officer of a large public company, perspective from his service on other public company boards, expertise in the automotive, technology and software industries, and international experience, including experience with manufacturing and engineering operations in India.

Marjorie T. Sennett, 63, has served as a Director and member of the Audit Committee since November 3, 2021. Ms. Sennett currently serves as a member of the Board of Directors and Chair of the Audit Committee of The diaTribe Foundation, a private entity focused on improving the outcomes of people with diabetes. From 2014 to 2018, she was a Director and member of the Audit Committee at QuinStreet, Inc. (QNST), a performance marketing technology company. Named one of “20 Women in Finance You Should Add to Your Company’s Board” by Business Insider, Ms. Sennett previously served as a Managing Director of Farallon Capital Management, LLC where she invested in publicly traded securities for eight years. Before that, she was Chief Financial Officer at eGroups, Inc., where she co-led the sale of the company to then publicly held Yahoo! Inc., and at Amylin Pharmaceuticals, Inc., where she led the company’s initial public offering and multiple follow-on public offerings. Ms. Sennett holds a B.A. from Vanderbilt University and an M.B.A. from Stanford University. We believe Ms. Sennett’s qualifications for sitting on our Board of Directors include her public board experience, extensive knowledge of corporate finance and financial reporting, financial leadership for fast-growing companies in the biotechnology and technology sectors, and experience as an institutional investor.

Serving a term ending in 2026:

Angelos Papadimitriou, 57, has served as a Director since February 17, 2023. Mr. Papadimitriou currently serves as Chairman of the Board of Directors of Athena Ventures, an investment firm focusing on early-stage ventures. Mr. Papadimitriou is also the Executive Chairman of the Board of Director of Celli Group, a global leader in drink dispensing systems, headquartered in Italy. Mr. Papadimitriou has held this position since July 2023. From August 2020 to February 2021, Mr. Papadimitriou was the Co-Chief Executive Officer of Pirelli & C. S.p.A., a public company listed on the Milan Stock Exchange. Mr. Papadimitriou previously led Coesia S.p.A., a group of global industrial and packaging solutions companies as their Chief Executive Officer for ten years. Prior to that, Mr. Papadimitriou spent over fifteen years in the pharmaceutical industry, including as Senior Vice President for Italy and Southeast Europe at GlaxoSmithKline. Mr. Papadimitriou also serves as a board member of several private companies. Mr. Papadimitriou holds an M.B.A. from Harvard Business School and a B.A. in Computer Science and Business Economics from Brown University. We believe Mr. Papadimitriou’s qualifications for sitting on our Board of Directors include his executive leadership experience, including his service as chief executive officer of a large public company, perspective from his service on other company boards and expertise in the packaging machinery and industrial automation industries and European and international markets.

Dianne M. Parrotte, M.D., M.P.H., 74, has served as a Director since 2018. Since 1995, Dr. Parrotte has been an independent consultant to corporations, law firms and insurance companies on human resource matters involving employee health and wellness. She was a trustee of the Shillman Foundation from March 2000 until her resignation in February 2018. From 1989 until 1995, Dr. Parrotte was chief in charge of occupational health at Bath Iron Works (later acquired by General Dynamics). From 1982 to 1988, she was the on-site Medical Director at Polaroid Corporation. Dr. Parrotte served as a Cognex Director from 1981, at the time of the

company’s incorporation, to 1982. In addition to numerous certifications and licenses, Dr. Parrotte holds an M.P.H. from the Medical College of Wisconsin, an M.D. from the Boston University School of Medicine and a B.A. from Boston University. She is Board Certified in Occupational and Environmental Medicine as well as in Internal Medicine. She is a former Fellow of the American College of Occupational and Environmental Medicine. She also completed the Penn State Executive Program. During the past five years, Dr. Parrotte has not served as a member of the Board of Directors of another publicly held company or of a registered investment company. We believe Dr. Parrotte’s qualifications for sitting on our Board of Directors include her experience with a wide range of human resource and organizational matters related to large public companies, as well as her significant knowledge of the history and culture of Cognex.

Serving a term ending in 2025:

John T.C. Lee, 61, has served as a Director since May 4, 2022. Dr. Lee is currently the President and Chief Executive Officer of MKS Instruments, Inc. (Nasdaq: MKSI), a global provider of instruments, systems, subsystems and process control solutions for advanced manufacturing processes. Dr. Lee has held this position since January 2020. He has also served on the MKS Board of Directors since January 2020. From October 2007 to January 2020, Dr. Lee held a series of progressive leadership roles at MKS, including Chief Operating Officer from 2016 to 2019. Prior to joining MKS, Dr. Lee served in various capacities in various technology industries, including semiconductor and solar as well as plasma processing research, at leading technology companies, including Applied Materials, Lucent Technologies and AT&T Bell Labs. He has served as a member of the Executive Committee of the Board of Directors of the Massachusetts High Technology Council since 2021, as their Vice Chair from 2021 to 2023 and as their Chair since 2023. Dr. Lee holds a B.S. from Princeton University and both an M.S.C.E.P. and a Ph.D. from the Massachusetts Institute of Technology, all in Chemical Engineering. We believe Dr. Lee’s qualifications for sitting on the Board of Directors include his executive leadership experience, including his service as chief executive officer of a large public company, perspective from his service on other public company boards, expertise in the semiconductor and technology industries, and international experience.

Anthony Sun, 71, has served as a Director since 1982. Mr. Sun served as a managing general partner and Chief Executive Officer of Venrock Associates, a venture capital partnership, from 1997 until his retirement in 2010. He began his tenure at Venrock in 1979 and was a general partner from 1980 to 1997. Mr. Sun has also served as a member of the Boards of Directors of several private companies. During the past five years, Mr. Sun has not served as a member of the Board of Directors of another publicly held company or of a registered investment company. Mr. Sun holds a B.S. and M.S. in Engineering from the Massachusetts Institute of Technology and an M.B.A. from Harvard University. We believe Mr. Sun’s qualifications for sitting on our Board of Directors include his executive experience, his expertise in the high-technology industry, particularly having served as a member of the Board of Directors of more than a dozen public high-tech companies in the past, and the deep understanding of our company that he has acquired through service on our Board.

Robert J. Willett, 56, has served as a Director and Chief Executive Officer of Cognex since 2011. Mr. Willett joined our company in 2008 as President of the Modular Vision Systems Division and was promoted to President and Chief Operating Officer in 2010. He came to Cognex from Danaher Corporation, where he served as Vice President of Business Development and Innovation for the Product Identification Business Group and as President of Videojet Technologies, a leader in coding and marking products. Prior to that, Mr. Willett served as Chief Executive Officer of Willett International Ltd., a coding and marking company that was sold to

DIRECTOR COMPENSATION

The following table sets forth the compensation earned by or awarded to each Director who served on our Board of Directors in 2023, other than Mr. Willett. Details of Mr. Willett’s compensation is set forth under the heading “Executive Compensation—Summary Compensation Table.”

Director Compensation Table—2023


Name	Fees Earned or Paid in Cash (1) ($)			Stock Awards (2)(3) ($)		Option Awards (4) ($)		All Other Compensation ($)			Total Compensation ($)
Patrick A. Alias (5)	$	—		$	—	$	—	$	98,722	(6)	$	98,722
Theodor Krantz (7)	$	30,000		$	—	$	—	$	—		$	30,000
Sachin S. Lawande	$	64,333		$	271,533	$	—	$	—		$	335,866
John T.C. Lee	$	73,333		$	271,533	$	—	$	—		$	344,866
Dianne M. Parrotte	$	72,000		$	271,533	$	—	$	—		$	343,533
Angelos Papadimitriou	$	70,886		$	236,531	$	—	$	—		$	307,417
Marjorie T. Sennett	$	68,333		$	271,533	$	—	$	—		$	339,866
Anthony Sun	$	128,000	(8)	$	271,533	$	—	$	—		$	399,533

(1)	Fees are presented in the year earned. The payment of such amounts may occur in other years (i.e., 2024).

(2)

In 2023, each Director, other than Mr. Willett, Mr. Papadimitriou, Mr. Alias and Mr. Krantz, was granted 5,826 RSUs. Mr. Papadimitriou was granted 5,075 RSUs upon his appointment to the Board in February 2023. All Director RSU awards began vesting in annual installments of 20%, 30% and 50% on February 21, 2024. All equity award agreements covering the unvested equity awards held by our non-employee Directors provide for such equity awards to vest immediately upon a “change of control” of Cognex, which is defined as a corporate transaction in which the holders of Cognex common stock before the transaction control less than 51% of the stock of Cognex or any successor corporation after the transaction. Amounts listed in this column represent the grant date fair value of RSUs. The methodology and assumptions used to calculate the grant date fair value are described in “Note 16, Stock-Based Compensation” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Cognex recognizes the grant date fair value as an expense for financial reporting purposes over the service-based vesting period. See also the information under the heading “Director Compensation—Elements of Director Compensation.”

(3)

Each Director, other than Mr. Willett, had the following unvested RSUs outstanding on December 31, 2023: Mr. Alias, 4,934 shares; Mr. Krantz, 0 shares; Mr. Lawande, 10,760 shares; Dr. Lee 8,783 shares; Dr. Parrotte, 10,760 shares; Mr. Papadimitriou, 5,075 shares; Ms. Sennett, 9,513 shares; and Mr. Sun, 10,760 shares. Mr. Krantz forfeited 4,934 RSUs in connection with the completion of his term on the Board on May 3, 2023. No other Directors forfeited any RSUs in 2023.

(4)

Each Director, other than Mr. Willett, had the following options outstanding on December 31, 2023: Mr. Alias, 129,231 shares; Mr. Krantz, 0 shares; Mr. Lawande, 0 shares; Dr. Lee 0 shares; Dr. Parrotte, 44,000 shares; Mr. Papadimitriou, 0 shares; Ms. Sennett, 0 shares; and Mr. Sun, 166,000 shares. 12,400 stock options held by Mr. Krantz were terminated in connection with the completion of his term on the Board on May 3, 2023. No other Directors forfeited any stock options in 2023.

(5)	Mr. Alias completed his term on the Board on May 3, 2023 following the 2023 Annual Meeting of Shareholders. Mr. Alias remains an employee of the company in an advisory role. As such, the RSUs and options held by Mr. Alias remain eligible to continue vesting in accordance with their terms.

(6)	Includes Mr. Alias’ salary of $94,087 and a $3,547 bonus under our annual bonus program, both of which were earned by Mr. Alias during 2023 in his capacity as a non-executive employee of Cognex, as well as life insurance premiums of $1,088.

(7)	Mr. Krantz completed his term on the Board on May 3, 2023 following the 2023 Annual Meeting of Shareholders.

(8)	Paid to Sun Management Associates, LLC, a California limited liability company, of which Mr. Sun is a member.

Elements of Director Compensation

The Compensation/Stock Option Committee reviews our non-employee Director compensation on a regular basis. The Compensation/Stock Option Committee considers various factors in making a recommendation to the Board, including a competitive assessment of Director compensation with that of our peer group (as described under the heading “Compensation Discussion and Analysis”), market trends, the responsibilities of our non-employee Directors, the anticipated time commitment and amount of work, the responsibilities of the various committees of the Board, and our ability to attract and retain high caliber non-employee Directors to serve on the Board. The Compensation/Stock Option Committee also retained an independent compensation consultant, Pay Governance, to help benchmark and set non-employee Director compensation for 2023.

We provide a significant portion of the total compensation of our non-employee Directors in the form of equity compensation to align their long-term interests with those of our shareholders. Each non-employee Director is paid an annual cash retainer for their service on their Board and is eligible for a grant of RSUs. We believe that this compensation model has enabled us to create an attractive and market competitive compensation package for Board candidates while reducing dilution and administrative costs to the company as compared to our prior program of granting only options to Directors.

The following table sets forth the elements of cash compensation in 2023 for our non-employee Directors for their service on our Board of Directors and its committees. Mr. Willett, who is an executive officer of Cognex, receives no additional compensation for his service on the Board, and Mr. Alias, who is a non-executive employee of Cognex, received no additional cash compensation for his service on the Board.


Type of Fee	Board of Directors		Compensation/Stock Option Committee (1)		Audit Committee (1)		Nominating, Governance and Sustainability Committee (1)
Annual Cash Retainer	$	50,000	$	8,000	$	10,000	$	5,000
Annual Chairman Retainer	$	60,000	$	20,000	$	20,000	$	10,000

(1)	Annual Committee Chairman retainers are inclusive of the respective Committee cash retainers. For example, the Chairman of the Audit Committee receives $20,000 in total for serving on the Audit Committee, not $30,000.

In 2023, each Director (other than Mr. Krantz, Mr. Alias and Mr. Willett) also received a grant of RSUs in consideration for serving on our Board. RSU grant amounts and vesting schedules are detailed in the “Director Compensation Table—2023” under the heading “Stock Awards.”

Director Stock Ownership Guidelines

In February 2022, the Compensation/Stock Option Committee approved stock ownership guidelines for our Directors based on our belief that stock ownership further aligns the interests of our Directors with those of our shareholders. These guidelines provide that each non-employee Director is expected to accumulate and hold an amount of qualifying shares equal to three times his or her annual cash retainer for service on the Board. Further, each employee Director is expected to accumulate and hold an amount of qualifying shares equal to three times his or her annual base salary. For clarity, the “annual cash retainer” excludes any retainer for serving as a member or as a chairman of any Board committee, or for serving as the Chairman of the Board. The ownership requirement may be satisfied through (i) shares of Cognex common stock (whether granted by the company as an equity award or purchased by the Director independently), and/or (ii) RSUs granted by the company to the Director that vest over a specified time period, in each case the value of which is calculated based on the closing price of our common stock on the date of determining compliance with the minimum stock ownership guidelines. Directors have five years from the later of the adoption of these guidelines or their election to the Board to achieve the requisite level of ownership under these guidelines. Compliance is measured as of the last day of each fiscal year. As of the Record Date, the Board believes that all of our Directors are making satisfactory progress toward compliance with our stock ownership guidelines.

COMPENSATION POLICIES AND PROCEDURES

Cognex’s approach to compensation and performance management is to provide a competitive total compensation package with periodic reviews to encourage ongoing high-quality performance. We strive to hire, retain and promote talented individuals based on their achievements, to reward employees based on their overall contribution to the success of our company, and to motivate employees to increase shareholder value.

In addition to salary, total compensation may include overtime pay, commissions, equity-based awards and potential bonuses depending on the employee’s job and level within Cognex. It also includes benefits consistent with our “Work Hard, Play Hard, Move Fast” culture that recognize employee achievement and encourage new levels of success, such as President’s Awards, which reward our top performers, and Perseverance Awards, which reward employee longevity, commitment and loyalty. Other benefits available to employees include company-paid basic group term life insurance, basic accidental death and dismemberment insurance, an employer match of eligible compensation that employees invest in their 401(k) accounts, and tuition reimbursement.

The Compensation/Stock Option Committee oversees the compensation program for Cognex employees. The committee has discussed risk as it relates to our compensation program and does not believe that our compensation program is structured to encourage excessive or inappropriate risk taking for the following reasons:

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Compensation for most salaried employees consists of both fixed and variable components. The fixed portion (i.e., base salary) provides a steady income to our employees regardless of company performance or stock price. The variable portion (i.e., annual company bonus, sales commissions and equity-based awards) is based upon individual, company and stock price performance. This mix of compensation is designed to motivate our employees, including our named executive officers, to produce superior short- and long-term corporate performance without taking unnecessary or excessive risks to the detriment of important business metrics.

•

The company bonus is an annual program and is focused on profitability, while the equity award program generally has a three to five year service-based vesting period and is focused on stock price performance. We believe that these programs provide a check on excessive risk taking because to inappropriately benefit one would be a detriment to the other. For example, focusing solely on profitability would be detrimental to our company over the long term, ultimately harming our stock price and the value of equity-based awards, such as stock options and RSUs.

•

We prohibit all hedging transactions involving Cognex stock by our Board of Directors and certain employees who have regular access to material non-public information, including our named executive officers, so that they cannot insulate themselves from the effects of poor stock performance. Further, any Cognex employee engaged in short sales of Cognex stock is subject to immediate termination.

•

In order for any employee to be eligible for an annual company bonus, Cognex must first achieve certain financial goals that are established annually by the Board of Directors related to our consolidated operating income as a percentage of revenue (we refer to this metric as “operating margin”). We believe that focusing on profitability rather than other measures encourages a balanced approach to performance and emphasizes consistent behavior across the organization.

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Our annual bonus program is capped for each employee at director level and above, which includes our named executive officers, which we believe mitigates excessive risk taking by limiting bonus payouts even if our company dramatically exceeds its operating margin target.

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Our annual bonus program has been structured around attaining a certain level of profitability for many years and we have seen no evidence that it encourages unnecessary or excessive risk taking.

•

The calculation of our operating margin target for purposes of our annual bonus is defined annually by our Board of Directors and is designed to keep it from being susceptible to manipulation by any employee, including our named executive officers. We have a Code of Business Conduct and Ethics that covers, among other things, accuracy of books and records. And, predating this code, is our company’s ten corporate values, which include “integrity” and are the basis for ensuring we maintain the highest ethical standards in all that we do.

•

Our executive stock ownership guidelines require our Directors and named executive officers to hold a substantial amount of qualifying shares, which aligns an appropriate portion of their personal wealth to the long-term performance of Cognex.

•

Our Clawback Policy enables us to recover erroneously awarded incentive-based compensation paid to a named executive officer due to a restatement of previously issued financial statements, thus reducing any incentive to engage in misconduct to meet financial targets.

COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

We maintain a pay-for-performance compensation philosophy that favors variable compensation based on individual, company and stock performance over fixed compensation such as base salary. We target paying our named executive officers, including our CEO, a base salary positioned at only the 25th percentile of our peer group; we establish a potential annual bonus that is market competitive and linked to individual and company performance objectives; and we grant equity awards in a manner that aligns the interests of our named executive officers with those of our shareholders. Compensation is weighted towards equity awards so that our named executive officers adopt an ownership mentality and take a long-term view of the business.

Total compensation for our named executive officers also includes other benefits that are available to Cognex employees generally. This includes Perseverance Awards (which reward employee longevity, commitment and loyalty), company-paid basic group term life insurance and basic accidental death and dismemberment insurance, an employer match of eligible compensation that employees invest in their 401(k) accounts, and tuition reimbursement.

The Compensation/Stock Option Committee, which consists entirely of independent Directors, reviews and approves compensation for our named executive officers, using its judgment and experience in determining the mix of compensation. The committee views salary and bonuses as short-term compensation to reward our named executive officers for meeting annual individual and company performance objectives, and equity-based awards as a reward for increasing shareholder value and improving corporate performance over the long term. The Compensation/Stock Option Committee also believes that our equity award program is instrumental to our ability to recruit, retain and motivate our high caliber employees.

The Compensation/Stock Option Committee is continually working to enhance our compensation programs to help ensure that our performance-based compensation philosophy and long-term perspective perseveres as our company grows. Specifically, in 2022, the Compensation/Stock Option Committee approved a performance-based equity award for our CEO based on relative total shareholder return, as well as stock ownership guidelines for all of our Directors and named executive officers. Further, in 2023, the committee introduced a compensation recovery policy to enable the recoupment of erroneously awarded incentive-based compensation paid to a named executive officer due to a restatement of previously issued financial statements.

Determinations with respect to compensation for a fiscal year are generally made in the first quarter following our Board of Directors’ approval of Cognex’s annual budget for that year, which typically occurs at the end of the previous year.

Say-on-Pay Feedback from Shareholders

At our 2023 Annual Meeting of Shareholders, approximately 85% of the votes cast on the say-on-pay proposal were in favor of the approval of the compensation of our named executive officers, with approximately 15% of the votes cast against such proposal. The Compensation/Stock Option Committee believes that this shareholder vote endorses the compensation philosophy of our company, and the Compensation/Stock Option Committee did not make any significant changes to our executive compensation program for 2023 as a result of

the say-on-pay vote by our shareholders. Based on the voting results at our 2023 Annual Meeting, and consistent with the recommendation of the Board of Directors, we will continue to conduct an advisory vote on the compensation of our named executive officers on an annual basis until the next advisory vote on the frequency of the say-on-pay vote, which we expect will occur at our 2029 Annual Meeting of Shareholders.

2023 Business Results

2023 was a year of perseverance at Cognex. We advanced many high-potential strategic initiatives while navigating a global manufacturing recession. We continued to take important steps toward achieving our strategic priorities and long-term goals.

After growing almost 30% in 2021 fueled by a pandemic-related acceleration in logistics and electronics investments, revenue was slightly down in 2022 and then declined 17% in 2023 from the prior year. Customers have remained cautious with investments resulting in lower spending trends across our factory automation business, most notably in the consumer electronics and semiconductor industries, and we experienced a continued pause in investments by a few large e-commerce logistics customers. Over half of our overall 2023 revenue decline was driven by two large, long-standing customers, who reduced their overall capital expenditures after heavy investment in prior years.

Gross margin as a percentage of revenue remained consistent with the prior year at 72%, as the deleveraging impact of lower sales volume, less favorable revenue mix, and charges related to the acquisition of Moritex Corporation in the fourth quarter of 2023 were offset by lower inventory costs due to a reduction in premiums paid to brokers for the purchase of components.

Operating expenses were relatively flat with the prior year, as the favorable year-over-year impact of losses from the fire at our primary contract manufacturer’s warehouse in 2022 compared to recoveries from the fire in 2023, lower incentive compensation, and cost management were offset by investment in our “Emerging Customer” sales initiative and expenses related to the acquisition of Moritex Corporation in the fourth quarter of 2023.

Operating income decreased to 16% of revenue in 2023 compared to 24% of revenue in 2022 driven by the operating deleveraging resulting from the lower revenue levels.

On October 18, 2023, the company acquired all the outstanding shares of Moritex Corporation, a provider of optical components based in Japan, for an enterprise value of ¥40 billion Japanese Yen, or approximately $270 million U.S. Dollars based on the closing date foreign exchange rate. Additionally, in 2023, Cognex spent approximately $79.8 million to repurchase our common stock and paid approximately $49.1 million in dividends to shareholders.

We remain focused on strict cost management, while continuing to invest in our long-term growth prospects. We launched a record number of new products in 2023 and commenced a multi-year investment in our Emerging Customer initiative to expand our customer base. We believe these actions position us well to capitalize on exciting industry trends as growth returns.

Compensation Program Highlights

Our executive compensation program is designed to be largely performance-based with base salary providing a steady income and the annual company bonus, RSU awards and stock option awards based upon individual, company and stock price performance. In its deliberations of compensation for our named executive officers, the Compensation/Stock Option Committee considers the following:

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Objective competitive market data of peer companies provided by Pay Governance (“Competitive Analysis”);

•

The levels of responsibility associated with each executive’s position;

•

The past performance of the individual executive;

•

The extent to which individual, departmental and company-wide goals have been met;

•

The overall competitive environment and the level of compensation necessary to attract and retain talented and motivated individuals in key positions;

•

The recommendations of our Chief Executive Officer with respect to the salary increases, potential bonuses and equity award grants for those executive officers that report to him;

•

The link between our named executive officers’ compensation and Cognex’s performance (pay-for-performance);

•

Each named executive officer’s compliance, or progress toward compliance during the phase-in period, as applicable, with our Stock Ownership Guidelines; and

•

The outcome of advisory shareholder votes on executive compensation (commonly known as “say-on-pay” proposals).

The Compensation/Stock Option Committee also considers ways to maximize the deductibility of executive compensation under U.S. tax laws, while retaining the discretion of the Compensation/Stock Option Committee as is appropriate to compensate executive officers at levels commensurate with their responsibilities and achievements. Beginning in 2018, U.S. tax legislation has impacted the company’s ability to deduct annual compensation in excess of $1 million for anyone who served as a named executive officer in any year after 2016. The Compensation/Stock Option Committee believes that shareholder interests are best served if its discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in non-deductible compensation expenses.

The Compensation/Stock Option Committee uses the Competitive Analysis to assess our executives’ compensation against the compensation paid to executives in similar positions in our peer group to help ensure that the compensation we pay is competitive and fair to our executives and to our shareholders. To supplement market benchmarking information sourced from the public filings of the peer group summarized below, our Compensation/Stock Option Committee also reviews competitive compensation data representative of our peer group and other similarly-situated high-tech companies provided within Radford’s Global Technology survey suite. We generally target overall compensation opportunities for our executives at the median of the market as an initial benchmark. While we use the Competitive Analysis as a starting point, we also consider the qualitative, unique dimensions of an executive’s role and tenure in the position when setting our executives’ compensation as we do not believe an external benchmark should be the only determinant of compensation.

Compensation Consultant

The Compensation/Stock Option Committee engaged Pay Governance as its independent consultant to assist it in evaluating our executive compensation programs and practices. Pay Governance is a specialist in compensation practices and provides an additional objective perspective as to the reasonableness of our executive compensation programs and practices and their effectiveness in supporting our business and compensation objectives. During 2023, Pay Governance performed the following tasks for the committee:

•

Gathered and reviewed the Competitive Analysis;

•

Evaluated the appropriateness of our peer group (described below);

•

Assessed our compensation practices and levels against those of our peer group;

•

Analyzed our short- and long-term incentive plan designs;

•

Reviewed our equity burn rate and dilution levels relative to market;

•

Updated the Compensation/Stock Option Committee on compensation trends and regulatory developments; and

•

Participated in Compensation/Stock Option Committee discussions related to each of the above tasks.

Annually, the Compensation/Stock Option Committee evaluates Pay Governance’s independence by considering the following six factors: (i) the provision of other services to the company by Pay Governance; (ii) the amount of fees received by Pay Governance from the company as a percentage of Pay Governance’s total revenue; (iii) Pay Governance’s policies and procedures that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the Pay Governance consultant with members of the Compensation/Stock Option Committee; (v) any company stock owned by the Pay Governance consultant managing the relationship with the company; and (vi) any business or personal relationship of the Pay Governance consultant or Pay Governance, as applicable, with any executive officer of the company. After considering these factors, the Compensation/Stock Option Committee determined that Pay Governance was independent and that its work with the committee for 2023 has not raised any conflicts of interest.

Competitive Analysis

The peer group used for the Competitive Analysis consists of 13 publicly-traded U.S. companies, most of which are in the software and services or technology hardware and equipment industries, that have revenues and market capitalizations in a range we believe is appropriate. We believe this group represents the competition for executive talent in our industry. We plan to review the peer group annually to ensure that the companies in the peer group remain relevant and provide meaningful compensation comparisons.

2023 Peer Group


Aspen Technology, Inc.	Manhattan Associates, Inc.	Teledyne Technologies Incorporated
Coherent Corp.	National Instruments Corporation*	Trimble Inc.
Dolby Laboratories, Inc.	Novanta Inc.	Zebra Technologies Corporation
FARO Technologies, Inc.	PTC Inc.
IPG Photonics Corporation	Silicon Laboratories Inc.

*	Emerson Electric Co. acquired National Instruments Corporation in October 2023.

Base Salary

In determining the base salaries paid to our named executive officers for fiscal year 2023, the Compensation/Stock Option Committee considered, in particular, their levels of responsibility, salary increases awarded in the past, the Competitive Analysis, and the executive’s experience and potential. The base salary approved for each of our named executive officers for fiscal year 2023 was determined based on the following criteria:

•

Objective data from the Competitive Analysis, with our named executive officers’ salaries in 2023 positioned near the 25^th percentile of their respective roles;

•

The levels and nature of responsibility associated with each executive’s role;

•

The past performance of the individual executive;

•

The executive’s experience and potential;

•

Salary increases awarded in the past; and

•

The increase in salary levels approved by our Board of Directors in the fourth quarter of 2022 in conjunction with its approval of our annual budget for fiscal year 2023.

Following its investigation and consideration of the above criteria, the Compensation/Stock Option Committee kept Mr. Willett’s annual base salary at $676,000 and increased Mr. Todgham’s annual base salary from $415,000 to $427,000, Ms. DiPalma’s annual base salary from $312,000 to $325,000, Mr. Gerst’s annual base salary from $340,000 to $355,000, and Mr. Kuechen’s annual base salary from $300,000 to $312,000.

Annual Company Bonuses

The Compensation/Stock Option Committee views annual company bonuses as a way to reward employees for meeting individual and company performance objectives. Cognex employees, including our named executive officers, are eligible to participate in the performance-based annual company bonus program except for those employees on a sales commission plan. The Compensation/Stock Option Committee approves the annual company bonus plan in conjunction with our Board of Directors’ approval of Cognex’s annual budget, which typically takes place at the end of the prior fiscal year.

The annual company bonus plan is designed to be variable. In order for any employee to be eligible for an annual company bonus, Cognex must first achieve financial goals set forth in the annual budget related to

budgeted consolidated operating income as a percentage of revenue (we refer to this metric as “operating margin”). Once the operating margin criterion is met, the amount each employee at director level and above, which includes our named executive officers, receives depends upon the achievement of individual performance goals, which are established annually.

The Compensation/Stock Option Committee determined that operating margin is an appropriate metric for our bonus program because the committee believes employee performance is integral in achieving desired levels of company profitability.

In 2023, the Board of Directors approved a one-time variance to the calculation of operating margin for bonus purposes to remove the impact of acquisition costs that exceeded the amount budgeted for the year, and Moritex’s revenue and operating expenses in the fourth quarter of 2023. The Board determined that this one-time variance is appropriate because the Moritex acquisition was not contemplated at the time the Board set the operating margin target for bonus purposes.

In order for any annual cash bonus to be paid to an employee, a minimum level of operating margin for the company must be achieved. Once the minimum level has been achieved, each employee’s eligible bonus is calculated as follows:

•

If the actual operating margin is above the minimum level but below the operating margin target in the annual budget, each employee is eligible to receive up to a pro-rata portion of his or her target bonus.

•

If the actual operating margin is equal to the operating margin target in the annual budget, each employee is eligible to receive up to 100% of his or her target bonus.

•

If the actual operating margin is above the operating margin target in the annual budget, certain employees are eligible to receive an additional amount depending upon his or her employment level up to a maximum amount approved by the Compensation/Stock Option Committee. The bonus payout is scaled in such a way that this additional amount is funded by a portion of the incremental operating income above Cognex’s operating margin target.

The Compensation/Stock Option Committee approves the target bonus for each employee at the vice president level and above, which includes our named executive officers, and the amount by which each individual can participate in any increase due to company performance in excess of the operating margin target. The target bonus amount is based upon a percentage of base salary with the percentage based upon the individual’s level of responsibility. Individual performance goals are established annually and generally relate to near-term strategic, financial and operational performance that supports the company’s business objectives. A weighting is assigned to each individual performance goal. In 2023:

•

The target bonus for Robert J. Willett, our President and Chief Executive Officer, was $1,075,000, with the opportunity to earn 0-350% of this amount based on company performance and the achievement of individual performance goals.

•

The target bonus of Paul D. Todgham, our Senior Vice President and Chief Financial Officer, was $300,000, with the opportunity to earn 0-225% of this amount based on company performance and the achievement of individual performance goals.

•

The target bonus of Carl W. Gerst III, our Executive Vice President, ID and Vision Products, was $300,000, with the opportunity to earn 0-250% of this amount based on company performance and the achievement of individual performance goals.

•

The target bonus for Sheila M. DiPalma, our Executive Vice President of Employee Services and Chief Culture Officer, was $220,000, with the opportunity to earn 0-250% of this amount based on company performance and the achievement of individual performance goals.

•

The target bonus for Joerg Kuechen, our Chief Technology Officer, was $210,000, with the opportunity to earn 0-250% of this amount based on company performance and the achievement of individual performance goals.

The Compensation/Stock Option Committee believes that the payment of an annual company bonus based upon the achievement of company and individual performance goals is an appropriate way to reward our named executive officers for meeting performance objectives while also achieving desired levels of company profitability.

For 2023, the operating margin target, as calculated for bonus purposes, was consistent with our long-term financial objectives. The actual operating margin achieved for 2023 bonus purposes for our named executive officers was 16.6%, which was below the target of 24.5%, but above the minimum level of 15.9%. As a result, each employee at director level and above (which includes our named executive officers) was eligible to receive up to 8% of the pro-rata portion of his or her bonus target depending on the achievement of his or her individual performance goals. The annual bonuses for 2023 for our named executive officers are listed under the heading “Executive Compensation—Summary Compensation Table” and were paid in the first quarter of 2024. All other bonus-eligible employees were eligible to receive up to 25% of the pro-rata portion of his or her bonus target.

Equity-Based Awards

Cognex’s equity award program is intended to reward a significant portion of our eligible employees, which includes our named executive officers, for their efforts in building shareholder value and improving corporate performance over the long term. The Compensation/Stock Option Committee believes that granting stock options and RSUs is instrumental in our ability to recruit, retain and motivate our high caliber employees.

The Compensation/Stock Option Committee approves the equity awards granted to our named executive officers on an individual basis. Our Chief Executive Officer has been delegated the authority to approve stock options and other equity-based awards to our non-executive employees not to exceed 80,000 shares to any one individual, in the aggregate, per calendar year.

Each year, Cognex determines the equity-based awards to be granted to current employees in the form of annual grants by considering, among other factors, the impact of the awards on shareholder dilution. We have always been, and will continue to be, sensitive to shareholders’ concerns about the increase in the number of outstanding shares caused by new grants. In that regard, we have kept the number of underlying shares granted each year relatively flat between 2011 and 2019 (disregarding the impact of stock splits effected through the issuance of stock dividends), with decreases commencing in 2020 due primarily to the introduction of RSUs into our equity award program. In 2023, our equity-based awards consisted of only 1.39% of our average outstanding shares. We have also reduced share dilution by repurchasing Cognex stock on the open market during that period.

As a result, the number of outstanding shares has decreased by about 2.38% from 2020 to 2023 (disregarding the impact of stock splits effected through the issuance of stock dividends). We intend to continue to actively manage our use of shares each year.

Each of our named executive officers participated in our annual equity award grants, which were completed in the first quarter of 2023. Grant amounts are determined based on, among other factors, levels of responsibility and the desire to retain our most valuable employees. The annual grants were consistent with the vesting schedules and expiration dates of the majority of grants made to our other employees.

Our policy is to grant equity-based awards on certain fixed dates. If any such date falls within a designated quiet period, then the grants will instead be made on the first Monday following the completion of the quiet period. If Nasdaq is closed on the appropriate Monday as described above, then the grants will instead be made on the next day that Nasdaq is open for trading. The Compensation/Stock Option Committee retains the discretion to grant equity-based awards at such other times as it may otherwise deem appropriate. The exercise price for all stock options granted equals the closing price of our common stock on Nasdaq on the date of grant.

The Compensation/Stock Option Committee believes that the primary purpose of equity-based awards is to align employee interests with the interests of our shareholders, and to provide our employees, including our named executive officers, with incentives to increase shareholder value over time. Each of our named executive officers is eligible to receive an annual grant of (i) stock options that generally vest annually over a period of five years of continuous employment, and (ii) RSUs that vest annually over a period of three years of continuous employment. We believe that this equity compensation model has allowed us to recruit, retain and motivate our senior employees, while reducing dilution and administrative costs to the company as compared to our prior program of granting only options to executive officers.

We also introduced performance-based RSUs (“PRSUs”) for Mr. Willett in 2022. One third of Mr. Willett’s 2023 annual equity grant (based on grant date fair value) was in the form of PRSUs. The vesting of Mr. Willett’s PRSUs is based on the percentile rank of the company’s total shareholder return (“TSR”) against the TSR of the companies within the S&P Composite 1500 Electronic Equipment, Instruments & Components index (or a comparable index if such index is materially changed or discontinued) (“PRSU Index TSR”) over a three-year measurement period. The number of PRSUs earned is calculated by multiplying (i) the Performance Multiplier for the measurement period based on the company’s TSR percentile, as set forth in the table below, by (ii) the target PRSU shares.


Cognex TSR Percentile of the PRSU Index TSR		Performance Multiplier
Below 25th percentile		0%
25th percentile		50%
55th percentile		100%
75th percentile or higher		150%

If the company’s TSR ranks between a designated performance percentile, the performance multiplier will be determined using linear interpolation. If the company’s TSR is a negative percentage, regardless of the percentile achieved, the performance multiplier will be a maximum of 100%. The vesting of the PRSUs in all cases is subject to Mr. Willett’s continued service with the company. We believe that PRSUs further align the interests of Mr. Willett with building shareholder value and improving corporate performance over the long term.

Change of Control Arrangements

Change of control transactions typically represent events where our shareholders are realizing the value of their equity interests in our company. We believe it is appropriate for our named executive officers to share in this realization of shareholder value. All equity award agreements covering the unvested equity awards held by Mr. Todgham and the February 2019 and February 2020 option agreements covering option awards held by Ms. DiPalma provide for such equity awards to vest immediately upon a “change of control” of Cognex, which is defined as a corporate transaction in which the holders of Cognex common stock before the transaction control less than 51% of the stock of Cognex or any successor corporation after the transaction. In providing for the immediate vesting of these equity awards, the Compensation/Stock Option Committee noted that, given their roles with Cognex at the time of the grants, it was unlikely that Mr. Todgham’s or Ms. DiPalma’s employment with Cognex would be continued following a change of control transaction. Further, Mr. Willett’s February 2022 PRSU and 2023 PRSU agreements provide that the PRSUs will vest immediately upon a “change of control” of Cognex, with such number of vested PRSUs to be calculated based on the applicable performance multiplier determined by the percentile rank of the company’s TSR against the PRSU Index TSR over a measurement period concluding on the date immediately prior to such change of control.

Policy Relating to the Recovery of Erroneously Awarded Compensation

In August 2023, the Board adopted a Compensation Recovery Policy (“Clawback Policy”) as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as implemented by Nasdaq listing standards and the SEC’s rules and regulations. The Clawback Policy requires us to recover incentive-based compensation received by an executive officer in the event we are required to prepare a restatement of previously issued company financial statements due to our material noncompliance with any financial reporting requirement under the securities laws, including any required restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (an “Accounting Restatement”). The Clawback Policy covers cash or equity-based compensation that is granted, earned or vested based, in whole or in part, upon the attainment of a company financial reporting measure (including stock price or total stockholder return). Recovery under the Clawback Policy applies to incentive compensation subject to the policy that is received (i) on or after October 2, 2023, (ii) by a person after such individual became an executive officer and (iii) during the three completed fiscal years immediately preceding the date on which we are required to prepare an Accounting Restatement. In addition, recoupment is only required where the executive officer would have received a lower payment based upon the restated financial results.

Executive Stock Ownership Guidelines

In February 2022, the Compensation/Stock Option Committee approved stock ownership guidelines for our named executive officers based on our belief that stock ownership further aligns the interests of our named executive officers with those of our shareholders. These guidelines provide that each named executive officer is expected to accumulate and hold an amount of qualifying shares equal to (i) three times base salary for our CEO and (ii) two times base salary for all other named executive officers. The ownership requirement may be satisfied through (i) shares of Cognex common stock (whether granted by the company as an equity award or purchased by the named executive officer independently), and/or (ii) RSUs granted by the company to the named executive officer that vest over a specified time period, in each case the value of which is calculated based on the closing price of our common stock on the date of determining compliance with the minimum stock ownership guidelines. Named executive officers have five years from the later of the adoption of the policy or their hire or promotion (as applicable) to achieve the requisite level of ownership under these guidelines. Compliance is measured as of the last day of each fiscal year. As of the Record Date, the Board believes that all of our named executive officers are making satisfactory progress toward compliance with our stock ownership guidelines on or before their applicable deadline.

EXECUTIVE OFFICERS

Our executive officers include Robert J. Willett, Paul D. Todgham, Carl W. Gerst III, Sheila M. DiPalma and Joerg Kuechen. Biographical information regarding Mr. Willett is provided in Proposal 1: Election of Directors under the heading “Information Regarding Directors.”

Mr. Todgham, 48, joined Cognex as its Senior Vice President of Finance and Chief Financial Officer in March 2020. Prior to Cognex, Mr. Todgham served as the Senior Vice President of Finance for Levi Strauss & Company (LEVI), a publicly held company listed on the New York Stock Exchange. From 2014 to 2020, Mr. Todgham served in a variety of senior finance and strategy roles at Levi’s involving corporate development, operational planning, and financial oversight. For the three years prior to joining Levi’s, Mr. Todgham worked for Ross Stores, Inc. (ROST), also a publicly held company listed on Nasdaq, in senior finance and strategy roles. Mr. Todgham holds a Bachelor of Arts in Applied Mathematics from Harvard University, a Master of Philosophy in Economics from the University of Cambridge and a Master of Business Administration from Stanford University’s Graduate School of Business. Upon the mutual agreement of Cognex and Mr. Todgham, Mr. Todgham resigned from the company as Chief Financial Officer effective March 15, 2024.

Ms. DiPalma, 57, joined Cognex in 1992 as Senior Reporting Accountant. She served for more than 20 years in a series of roles with increasing responsibility in the Finance Department, including six years as Cognex Treasurer, before transitioning to Employee Services in 2016. Ms. DiPalma was promoted to Senior Vice President of Employee Services and became a named executive officer in 2017. Ms. DiPalma was promoted to Executive Vice President of Employee Services in October 2020. In addition, since 2021, Ms. DiPalma has served as Cognex’s Chief Culture Officer. Prior to joining Cognex, Ms. DiPalma was a member of the audit firm PricewaterhouseCoopers. She holds a Bachelor of Science degree in Accounting from Boston College, a Master of Science degree in Taxation from Bentley College, and is a Certified Public Accountant.

Mr. Gerst, 56, joined Cognex in 1999 and worked in a number of product-focused roles before being promoted to Senior Vice President of the ID Products Business Unit in 2014. Following 2014, Mr. Gerst’s leadership role continued into Vision Products and Global Marketing Communications. He was promoted to Executive Vice President of Vision and ID Products in October 2020. Prior to joining Cognex, Mr. Gerst worked as a hardware engineer, sales engineer and product marketing manager for Hand Held Products, which is now part of Honeywell’s Safety and Productivity Solutions. Mr. Gerst holds a Bachelor of Science in Electrical Engineering from Clarkson University and a Master of Business Administration from the Simon Business School at the University of Rochester.

Mr. Kuechen, 53, joined Cognex in 2003 through the acquisition of Gavitec AG, which Mr. Kuechen founded. At Cognex, Mr. Kuechen has led the acquisition and integration of several technology businesses, while also leading Cognex’s Advanced Vision Technology team. In June 2022, Mr. Kuechen was appointed Chief Technology Officer. Mr. Kuechen holds a Master of Business Administration from the University of Chicago Booth School of Business and a Bachelor of Science in Communications Engineering from RWTH Aachen University.

EXECUTIVE COMPENSATION

Summary Compensation Table—2023

The following table sets forth the total compensation awarded to, earned by or paid to our Chief Executive Officer and our other executive officers in fiscal years 2021, 2022 and 2023 (who we refer to collectively as the “named executive officers”).


Name and Principal Position	Year		Salary (1) ($)		Stock Awards (2) ($)			Option Awards (2) ($)		Non-Equity Incentive Plan Compensation (1) ($)			All Other Compensation ($)			Total Compensation ($)
Robert J. Willett		2023	$	676,000	$	2,065,040	(3)	$	4,133,598	$	73,833		$	11,443		$	6,959,914
President and		2022	$	672,000	$	2,067,044	(3)	$	4,133,755	$	372,397		$	12,228		$	7,257,424
Chief Executive Officer		2021	$	651,334	$	2,033,544		$	4,153,512	$	3,687,250		$	8,880		$	10,534,520
Paul D. Todgham		2023	$	425,154	$	740,446		$	1,499,490	$	—	(4)	$	9,979		$	2,675,069
Senior Vice President and		2022	$	410,385	$	743,220		$	1,500,282	$	97,006		$	11,465		$	2,762,358
Chief Financial Officer		2021	$	384,135	$	745,489		$	749,919	$	487,927		$	9,250		$	2,376,720
Carl W. Gerst III		2023	$	352,692	$	819,444		$	1,669,448	$	16,638		$	12,174		$	2,870,396
Executive Vice President		2022	$	336,154	$	825,452		$	1,667,302	$	94,604		$	13,228		$	2,936,740
Vision and ID Products		2021	$	316,211	$	—		$	—	$	419,973		$	25,966		$	762,150
Sheila M. DiPalma		2023	$	323,000	$	493,615		$	999,671	$	15,367		$	7,529		$	1,839,182
Chief Culture Officer and		2022	$	310,154	$	495,501		$	1,000,176	$	74,651		$	11,159		$	1,891,641
EVP Employee Services		2021	$	301,154	$	—		$	—	$	410,438		$	10,659		$	722,251
Joerg Kuechen⁽⁵⁾		2023	$	310,154	$	592,375		$	1,199,603	$	15,717		$	8,042		$	2,125,891
Chief Technology Officer		2022	$	296,923	$	545,013		$	1,855,419	$	72,520		$	26,035	(6)	$	2,795,910

(1)	Salary and bonus amounts are presented in the year earned. The payment of such amounts may have occurred in other years (i.e., 2024).

(2)

Amounts listed in this column represent the grant date fair value of option awards and RSUs, as applicable. The methodology and assumptions used to calculate the grant date fair value are described in “Note 16, Stock-Based Compensation” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Cognex recognizes the grant date fair value of options and RSUs as an expense for financial reporting purposes over the service-based vesting period. The grant date fair value of PRSUs is calculated using a Monte Carlo simulation model to estimate the probability of satisfying the service and market conditions stipulated in the award grant. No equity award grants to a named executive officer were forfeited in 2021, 2022 or 2023.

(3)

The amount reported in the table for each of 2022 and 2023 is the grant date fair value of Mr. Willett’s PRSU awards, assuming probable achievement. The grant date fair value of Mr. Willett’s PRSU awards, assuming the highest level of performance condition achievement, is $3,196,823 for 2022 and $3,259,851 for 2023.

(4)

Upon the mutual agreement of Cognex and Mr. Todgham, Mr. Todgham resigned from the company as Chief Financial Officer effective March 15, 2024. In connection with his departure from the company, Mr. Todgham did not receive a 2023 bonus, but received a $300,000 retention bonus if he remained employed with the company through the planned resignation date of March 15, 2024, and continued health insurance for 18 months (or if earlier, until the date when he commences other employment).

(5)	Mr. Kuechen was appointed Chief Technology Officer, an executive officer role at Cognex, in June 2022.

(6)	Includes a one-time cash payment of $15,000 for travel, lodging and entertainment for Mr. Kuechen’s 20-year Perseverance Award, which all Cognex employees are eligible to receive.

Grants of Plan-Based Awards Table—2023

The following table sets forth information regarding non-equity incentive plans and equity award grants to our named executive officers in fiscal year 2023.


			Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)						Estimated Future Payouts Under Equity Incentive Plan Awards (2)						All Other Stock Awards: Number of Shares of Stock or Units (#)		All Other Option Awards: Number of Securities Underlying Options (#)		Exercise Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards (3) ($)
Name	Grant Date		Thres- hold ($)		Target ($)		Maximum ($)		Thres- hold (#)		Target (#)		Maximum (#)						Exercise Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards (3) ($)
Robert J. Willett		—	$	0	$	1,075,000	$	3,762,500		—		—		—		—		—		—		—
		2/21/2023		—		—		—		23,017		46,033		69,050		—		—		—	$	2,065,040
		2/21/2023		—		—		—		—		—		—		—		233,484	$	47.21	$	4,133,598
Paul D. Todgham		—	$	0	$	300,000	$	675,000		—		—		—		—		—		—		—
		2/21/2023		—		—		—		—		—		—		15,887		—		—	$	740,446
		2/21/2023		—		—		—		—		—		—		—		84,698	$	47.21	$	1,499,490
Carl W. Gerst III		—	$	0	$	300,000	$	750,000		—		—		—		—		—		—		—
		2/21/2023		—		—		—		—		—		—		17,582		—		—	$	819,444
		2/21/2023		—		—		—		—		—		—		—		94,298	$	47.21	$	1,669,448
Sheila M. DiPalma		—	$	0	$	220,000	$	550,000		—		—		—		—		—		—		—
		2/21/2023		—		—		—		—		—		—		10,591		—		—	$	493,615
		2/21/2023		—		—		—		—		—		—		—		56,466	$	47.21	$	999,671
Joerg Kuechen		—	$	0	$	210,000	$	525,000		—		—		—		—		—		—		—
		2/21/2023		—		—		—		—		—		—		12,710		—		—	$	592,375
		2/21/2023		—		—		—		—		—		—		—		67,759	$	47.21	$	1,199,603

(1)

The amounts shown in the threshold, target and maximum columns reflect the minimum, target and maximum amounts, respectively, that are payable under Cognex’s annual company bonus program as described under the heading “Compensation Discussion and Analysis.” The actual payout with respect to 2023 for each named executive officer is shown in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation.”

(2)	The amounts shown in the threshold, target and maximum columns reflect the minimum, target and maximum vesting amounts, respectively, of the PRSUs as described under the heading “Compensation Discussion and Analysis.”

(3)

Amounts listed in this column represent the grant date fair value of option awards, RSUs and PRSUs, as applicable. The methodology and assumptions used to calculate the grant date fair value are described in “Note 16, Stock-Based Compensation” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Cognex recognizes the grant date fair value of options and RSUs as an expense for financial reporting purposes over the service-based vesting period. The grant date fair value of PRSUs is calculated using a Monte Carlo simulation model to estimate the probability of satisfying the service and market conditions stipulated in the award grant.

Discussion of Summary Compensation and Grants of Plan-Based Awards Tables

Compensation to our named executive officers consists primarily of salary, bonus and equity-based awards as well as other benefits which are also available to Cognex employees generally. These benefits include company-paid basic group term life insurance, basic accidental death and dismemberment insurance, an employer match of eligible compensation that employees invest in their 401(k) accounts, tuition reimbursement, and benefits consistent with our “Work Hard, Play Hard, Move Fast” culture such as Perseverance Awards, which reward employee longevity, commitment, and loyalty. Cognex’s executive compensation policies, pursuant to which the compensation set forth in the Summary Compensation Table and Grants of Plan-Based Awards Table was paid or awarded, are described under the heading “Compensation Discussion and Analysis.”

During 2023, we kept Mr. Willett’s annual base salary at $676,000 and increased Mr. Todgham’s annual base salary from $415,000 to $427,000, Ms. DiPalma’s annual base salary from $312,000 to $325,000, Mr. Gerst’s annual base salary from $340,000 to $355,000, and Mr. Kuechen’s annual base salary from $300,000 to $312,000.

Cognex provides each named executive officer with the opportunity to earn a cash bonus pursuant to a performance-based annual company bonus program that is based first on the achievement of the consolidated financial goal set forth in Cognex’s annual budget related to operating income as a percentage of revenue (we refer to this metric as “operating margin”), and then on the achievement of individual performance goals, which are also established annually. The Compensation/Stock Option Committee approves the target bonus for each named executive officer. For 2023, the target bonus for Mr. Willett was $1,075,000, with the opportunity to earn 0-350% of this amount; the target bonus for Mr. Todgham was $280,000, with the opportunity to earn 0-225% of this amount; the target bonus for Ms. DiPalma was $215,000, with the opportunity to earn 0-250% of this amount; the target bonus for Mr. Gerst was $280,000, with the opportunity to earn 0-250% of this amount; and the target bonus for Mr. Kuechen was $200,000, with the opportunity to earn 0-225% of this amount.

Cognex’s actual consolidated operating margin for 2023 bonus purposes was 16.6%, which was below the target percentage as determined by the Board of 24.5%, but above the minimum. As a result, each of our named executive officers was eligible to receive up to 8% of the pro-rata portion of his or her bonus target depending on the achievement of his or her individual performance goals.

During 2023, each of our named executive officers participated in our annual equity award grants, which were completed in the first quarter of 2023. Grant amounts are determined based on, among other factors, levels of responsibility and the desire to retain our most valuable employees. The annual grants were consistent with the vesting schedules and expiration dates of the majority of grants made to our other employees. A total of 2,344,182 options and RSUs (including the PRSUs awarded to Mr. Willett (at target)) were granted to Cognex employees in fiscal year 2023.

Option Exercises and Stock Vested Table—2023

The following table sets forth the amounts realized in fiscal year 2023 by our named executive officers as a result of option exercises or vesting of RSUs.


	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise (1) ($)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting (2) ($)
Robert J. Willett		—	$	—		6,782	$	375,112
Paul D. Todgham		—	$	—		16,481	$	802,896
Carl W. Gerst III		—	$	—		2,586	$	121,077
Sheila M. DiPalma		—	$	—		1,553	$	72,711
Joerg Kuechen		—	$	—		3,311	$	168,766

(1)

The value realized on exercise represents the difference between the exercise price of the stock option and the trading price of our common stock on Nasdaq upon exercise of the stock option, multiplied by the number of shares underlying the option exercised. None of the named executive officers exercised stock options in 2023.

(2)	The value realized on vesting represents the closing market price of our common stock on Nasdaq on the vesting date of the RSUs, multiplied by the number of shares vesting.

Outstanding Equity Awards at Fiscal Year-End—2023

The following table sets forth the number of RSUs and options to purchase shares of our common stock held by our named executive officers on December 31, 2023.


	Option Awards								Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date		Number of RSUs That Have Not Vested (#)		Market Value of Shares Underlying Restricted Stock Units That Have Not Vested (1) ($)		Equity Incentive Plan Awards: Number of Unearned Restricted Stock Units That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Restricted Stock Units That Have Not Vested (2) ($)		Footnote
Robert J. Willett		180,000		—	$	38.39		2/21/2027		—	$	—		—	$	—		—
		90,000		—	$	56.44		2/20/2028		—	$	—		—	$	—		—
		144,000		36,000	$	51.49		2/19/2029		—	$	—		—	$	—		3
		108,000		72,000	$	50.94		2/18/2030		—	$	—		—	$	—		4
		49,409		74,112	$	90.50		2/16/2031		—	$	—		—	$	—		5
		37,051		148,203	$	64.43		2/22/2032		—	$	—		—	$	—		6
		—		233,484	$	47.21		2/21/3033		—	$	—		—	$	—		7
		—		—	$	—		—		11,304	$	471,829		—	$	—		8
		—		—	$	—		—		—	$	—		33,078	$	1,380,676		9
		—		—	$	—		—		—	$	—		46,033	$	1,921,417		10
Paul D. Todgham		23,100		46,900	$	57.70		4/29/2030		—	$	—		—	$	—		11
		8,922		13,380	$	90.50		2/16/2031		—	$	—		—	$	—		5
		13,447		53,788	$	64.43		2/22/2032		—	$	—		—	$	—		6
				84,698	$	47.21		2/21/2033		—	$	—		—	$	—		7
		—		—	$	—		—		4,144	$	172,971		—	$	—		8
		—		—	$	—		—		9,312	$	388,683		—	$	—		12
		—		—	$	—		—		15,887	$	663,123		—	$	—		13
Carl W. Gerst III		20,000		—	$	56.44		2/20/2028		—	$	—		—	$	—		—
		40,000		20,000	$	51.49		2/19/2029		—	$	—		—	$	—		3
		40,000		40,000	$	50.94		2/18/2030		—	$	—		—	$	—		4
		60,000		90,000	$	65.90		10/30/2030		—	$	—		—	$	—		14
		14,944		59,776	$	64.43		2/22/2032		—	$	—		—	$	—		6
		—		94,298	$	47.21		2/21/3033		—	$	—		—	$	—		7
		—		—	$	—		—		10,343	$	431,717		—	$	—		12
		—		—	$	—		—		17,582	$	733,873		—	$	—		13
Sheila M. DiPalma		12,500		—	$	38.39		2/21/2027		—	$	—		—	$	—		—
		64,000		—	$	62.48		11/1/2027		—	$	—		—	$	—		—
		48,000		16,000	$	51.49		2/19/2029		—	$	—		—	$	—		3
		48,000		32,000	$	50.94		2/18/2030		—	$	—		—	$	—		4
		48,000		52,000	$	65.90		10/30/2030		—	$	—		—	$	—		15
		8,965		35,858	$	64.43		2/22/2032		—	$	—		—	$	—		6
		—		56,466	$	47.21		2/21/3033		—	$	—		—	$	—		7
		—		—	$	—		—		6,208	$	259,122		—	$	—		12
		—		—	$	—		—		10,591	$	442,068		—	$	—		13


	Option Awards								Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date		Number of RSUs That Have Not Vested (#)		Market Value of Shares Underlying Restricted Stock Units That Have Not Vested (1) ($)		Equity Incentive Plan Awards: Number of Unearned Restricted Stock Units That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Restricted Stock Units That Have Not Vested (2) ($)		Footnote
Joerg Kuechen		12,500		—	$	38.39		2/21/2027		—	$	—		—	$	—		—
		30,000		—	$	56.44		2/20/2028		—	$	—		—	$	—		—
		30,000		15,000	$	51.49		2/19/2029		—	$	—		—	$	—		3
		48,000		32,000	$	50.94		2/18/2030		—	$	—		—	$	—		4
		11,795		17,691	$	90.50		2/16/2031		—	$	—		—	$	—		5
		9,906		39,624	$	64.43		2/22/2032		—	$	—		—	$	—		6
		—		39,894	$	47.95		8/4/2032		—	$	—		—	$	—		16
		—		67,759	$	47.21		2/21/3033		—	$	—		—	$	—		7
		—		—	$	—		—		2,698	$	112,615		—	$	—		8
		—		—	$	—		—		6,767	$	282,455		—	$	—		12
		—		—	$	—		—		12,710	$	530,515		—	$	—		13

(1)	Market value of RSUs in this column are determined by multiplying the number of RSUs that have not vested by $41.74, the closing price of Cognex’s common stock on December 29, 2023, the last trading day of the year.

(2)	Market value of PRSUs in this column are determined by multiplying the target number of PRSUs by $41.74, the closing price of Cognex’s common stock on December 29, 2023, the last trading day of the year.

(3)	Options become exercisable in five equal annual installments beginning on February 19, 2020.

(4)	Options become exercisable in five equal annual installments beginning on February 18, 2021.

(5)	Options become exercisable in five approximately equal annual installments beginning on February 16, 2022.

(6)	Options become exercisable in approximately five equal annual installments beginning on February 22, 2023.

(7)	Options vest in five approximately equal annual installments beginning on February 21, 2024.

(8)	RSUs vest in annual installments of approximately 20%, 30%, and 50% beginning on February 16, 2022.

(9)

PRSUs vest on February 22, 2025 based on the percentile rank of the company’s TSR against the PRSU Index TSR over a three-year measurement period. The number of PRSUs earned for the measurement period is calculated as follows: if the company’s TSR is below the 25th percentile of the PRSU Index TSR, none of the PRSUs will vest; if the company’s TSR is at the 25th percentile of the PRSU Index TSR, 50% of the target PRSU shares will vest; if the company’s TSR is at the 55th percentile of the PRSU Index TSR, 100% of the target PRSU shares will vest; if the company’s TSR is at or above the 75th percentile of the PRSU Index TSR, 150% of the target PRSU shares will vest; and if the company’s TSR ranks between a designated performance percentile, the performance multiplier will be determined using linear interpolation. If the company’s TSR is a negative percentage, regardless of the percentile achieved, the performance

multiplier will be a maximum of 100%. The vesting of the PRSUs in all cases is subject to Mr. Willett’s continued service with the company.

(10)

PRSUs vest on February 21, 2026 based on the percentile rank of the company’s TSR against the PRSU Index TSR over a three-year measurement period. The number of PRSUs earned for the measurement period is calculated as follows: if the company’s TSR is below the 25th percentile of the PRSU Index TSR, none of the PRSUs will vest; if the company’s TSR is at the 25th percentile of the PRSU Index TSR, 50% of the target PRSU shares will vest; if the company’s TSR is at the 55th percentile of the PRSU Index TSR, 100% of the target PRSU shares will vest; if the company’s TSR is at or above the 75th percentile of the PRSU Index TSR, 150% of the target PRSU shares will vest; and if the company’s TSR ranks between a designated performance percentile, the performance multiplier will be determined using linear interpolation. If the company’s TSR is a negative percentage, regardless of the percentile achieved, the performance multiplier will be a maximum of 100%. The vesting of the PRSUs in all cases is subject to Mr. Willett’s continued service with the company.

(11)	Options become exercisable in three approximately equal annual installments beginning on April 29, 2023.

(12)	RSUs vest in annual installments of approximately 20%, 30%, and 50% beginning on February 22, 2023.

(13)	RSUs vest in annual installments of approximately 20%, 30%, and 50% beginning on February 21, 2024.

(14)	100,000 options become exercisable in five equal annual installments beginning on October 30, 2021, and the remaining 50,000 options become exercisable in one installment on October 30, 2025.

(15)	80,000 options become exercisable in five equal annual installments beginning on October 30, 2021, and the remaining 20,000 options become exercisable in one installment on October 30, 2025.

(16)	Options become exercisable in two equal annual installments beginning on August 4, 2026.

EMPLOYMENT AGREEMENT WITH ROBERT J. WILLETT

We entered into an employment agreement with Mr. Willett in June 2008 when he joined our company as Executive Vice President and President of the Modular Vision Systems Division, which entitles him to receive benefits that are available to all Cognex employees generally.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

All equity award agreements covering the unvested equity awards held by Mr. Todgham and the February 2019 and February 2020 option agreements covering option awards held by Ms. DiPalma provide for such equity awards to vest immediately upon a “change of control” of Cognex, which is defined as a corporate transaction in which the holders of Cognex common stock before the transaction control less than 51% of the stock of Cognex or any successor corporation after the transaction. In providing for the immediate vesting of these equity awards, the Compensation/Stock Option Committee noted that, given their roles with Cognex at the time of the grants, it was unlikely that Mr. Todgham’s or Ms. DiPalma’s employment with Cognex would be continued following a change of control transaction. Further, Mr. Willett’s February 2022 PRSU and 2023 PRSU agreements provide that the PRSUs will vest immediately upon a “change of control” of Cognex, with such number of vested PRSUs to be calculated based on the applicable performance multiplier determined by the percentile rank of the company’s TSR against the PRSU Index TSR over a measurement period concluding on the date immediately prior to such change of control.

All stock option and RSU agreements covering unvested time-based RSU and option awards held by Mr. Willett, as well as the October 2020, February 2022 and February 2023 option agreements covering option awards held by Ms. DiPalma and Mr. Gerst, the February 2022 and February 2023 RSU agreements covering RSUs held by Ms. DiPalma and Mr. Gerst, the August 2022 and February 2023 option agreements covering option awards held by Mr. Kuechen, and the February 2023 RSU agreement covering RSUs held by Mr. Kuechen, provide for any unvested portion of such equity awards held by each respective executive officer to become fully vested if the following two conditions are met: 1) there is a “change of control” of Cognex (as defined above) and 2) one’s employment is involuntarily terminated within twelve months following such transaction. One’s employment will be considered to be involuntarily terminated if Cognex terminates one’s employment without “cause” or the executive resigns his or her employment for “good reason.” “Cause” means the willful and continued failure to perform substantially his or her duties with Cognex (other than any failure resulting from incapacity due to physical or mental illness), or his or her willful engagement in illegal conduct or gross misconduct which is materially injurious to Cognex. “Good reason” means a material diminution in his or her duties or responsibilities (excluding for this purpose any diminution related solely to Cognex ceasing to be a public reporting company), or the requirement to be based at any office or location that is more than 50 miles from his or her current office.

For all executive officer grants other than CEO PRSU grants under the Cognex Corporation 2023 Stock Option and Incentive Plan, the Compensation/Stock Option Committee plans to provide for any unvested portion of such equity awards to become fully vested if the following two conditions are met: 1) there is a “change of control” of Cognex (as defined above) and 2) such executive officer’s employment is involuntarily terminated within twelve months following such transaction.

The following table indicates the amount of unvested options and restricted stock units held by each named executive officer that would become fully vested assuming a change of control of Cognex occurred on December 31, 2023, and, with respect to the options and time-based RSUs granted to Mr. Willett, the options granted to Ms. DiPalma and Mr. Gerst in October 2020, February 2022 and February 2023, the RSUs granted to Ms. DiPalma and Mr. Gerst in February 2022 and February 2023, the options granted to Mr. Kuechen in August 2022 and February 2023, and the RSUs granted to Mr. Kuechen in February 2023, the termination of the executive’s employment occurred in the circumstances described above on December 31, 2023 following a change of control. These amounts are estimates only and do not necessarily reflect the actual number of shares that would vest or their value, which would only be known at the time that the individual becomes entitled to the accelerated vesting of his or her options and RSUs.


Name	Number of Restricted Stock Units That Would Have Accelerated Vesting (1)(2) (#)		Value of Restricted Stock Units That Would Have Accelerated Vesting (3)(4) ($)		Number of Option Shares That Would Have Accelerated Vesting (#)		Value of Option Shares That Would Have Accelerated Vesting (5) ($)
Robert J. Willett		11,304	$	471,829		563,799	$	—
Paul D. Todgham		29,343	$	1,224,777		198,766	$	—
Carl W. Gerst III		27,925	$	1,165,590		244,074	$	—
Sheila M. DiPalma		16,799	$	701,190		192,324	$	—
Joerg Kuechen		12,710	$	530,515		107,653	$	—

(1)	PRSUs shown in this column reflect the target number of PRSUs multiplied by the performance multiplier applicable to the percentile rank of the company’s TSR against the PRSU Index TSR as of December 29, 2023, the last business day of the year.

(2)	RSUs shown in this column reflect the number of unvested RSUs held by the named executive officer on December 29, 2023, the last business day of the year.

(3)

Amount shown in this column is based on multiplying (i) with respect to all RSUs granted to Mr. Todgham, the number of RSUs that would have accelerated vesting assuming a change of control of Cognex occurred on December 29, 2023, the last business day of the year, or (ii) with respect to the time-based RSUs granted to Mr. Willett, the RSUs granted to Mr. Gerst and Ms. DiPalma in February 2022 and February 2023 and the RSUs granted to Mr. Kuechen ain February 2023, the number of RSUs that would have accelerated vesting assuming a change of control of Cognex occurred within the twelve months prior to December 29, 2023, the last business day of the year, and the executive’s employment was involuntarily terminated on December 29, 2023, the last business day of the year (as described above), by $41.74, the closing price of our common stock on Nasdaq on December 29, 2023, the last trading day of the year.

(4)

Amount shown in this column with respect to the PRSUs granted to Mr. Willett, is based on multiplying (i) the target number of PRSUs multiplied by the performance multiplier applicable to the percentile rank of the company’s TSR against the PRSU Index TSR as of December 29, 2023, the last business day of the year, by (ii) $41.74, the closing price of our common stock on Nasdaq on December 29, 2023, the last business day prior to such change of control.

(5)

Amounts shown in this column are based on multiplying (i) with respect to all the option awards granted to Mr. Todgham and the option awards granted to Ms. DiPalma in February 2019 and February 2020, the number of option shares that would have accelerated vesting assuming a change of control of Cognex occurred on December 29, 2023, the last business day of the year, or (ii) with respect to all the option awards granted to

CEO PAY RATIO

As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Robert J. Willett, our President and Chief Executive Officer. For 2023, our last completed fiscal year:

•

The median of the annual total compensation of all employees of our company (other than our Chief Executive Officer) was $80,925; and

•

The annual total compensation of our Chief Executive Officer, as reported in the Summary Compensation Table included elsewhere in this proxy statement, was $6,959,914.

Based on this information, for 2023, the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all employees was approximately 86 to 1.

We believe our CEO Pay Ratio for 2023 demonstrates our pay-for-performance philosophy. Our compensation program consists of both fixed and variable components and is designed to motivate all employees to produce superior short- and long-term corporate performance. The ratio of our CEO’s salary to the salary of our median employee was approximately 9 to 1, which is significantly lower than the total compensation ratio above, because the fixed portion of our CEO’s compensation is positioned near the 25th percentile of the company’s peer group. Given our CEO’s level of responsibility, experience and potential, the Compensation/Stock Option Committee awards him a mix of compensation with a higher variable component (i.e., annual bonus and stock option awards) that is based upon individual, company and stock price performance. As a result, a substantial percentage of our CEO’s total compensation is at risk every year, providing him with greater incentive to increase shareholder value and improve corporate performance over the long term.

To identify the “median employee”, we took the following steps:

•

We selected October 2, 2023, which is within the last three months of 2023, as the date upon which we would identify the median employee to allow sufficient time to identify the median employee given the global scope of our operations.

•

We determined that, as of October 2, 2023, our employee population consisted of approximately 2,626 employees, working for Cognex and its consolidated subsidiaries, with approximately 42% of these individuals located in the Americas, 30% in Asia and 29% in Europe. This population consisted of our full-time, part-time and temporary employees. We do not have seasonal employees, and we excluded independent contractors.

•

To identify the median employee from our employee population, we used a consistently applied compensation measure consisting of annual base salary, annual bonus target and target annual sales commissions for 2023 for all full-time, part-time and temporary employees employed by Cognex and its consolidated subsidiaries at the start of business on October 2, 2023. We believe these pay elements are appropriate because it was impractical to gather actual data from multiple payroll systems utilized to pay our worldwide workforce, and the actual achievement of the variable portion of compensation can vary widely from year to year.

•

No adjustments were made for cost-of-living differences.

PAY VERSUS PERFORMANCE

As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation

S-K,

we are providing the following information about the relationship between total compensation actually paid to Robert J. Willett, our President and Chief Executive Officer, and our named executive officers (as calculated in accordance with Item 402(v) of Regulation

S-K)

and certain financial performance measures.


Year	Summary compensation table total for CEO (1)		Compensation actually paid to CEO (1)(2)(3)			Average summary compensation table total for non-CEO named executive officers (NEOs) (4)		Average compensation actually paid for non-CEO NEOs (3)(4)(5)			Value of initial fixed $100 investment based on:
Year	Summary compensation table total for CEO (1)		Compensation actually paid to CEO (1)(2)(3)								Total shareholder return (TSR) (6)		Peer group TSR (6)		Net Income		Operating Margin (7)
2023	$	6,959,914	$	3,092,562		$	2,377,635	$	1,313,623		$	79.95	$	129.10	$	113,234,000	15.6%
2022	$	7,257,424	$	(3,658,243	)	$	2,596,662	$	(2,512,158	)	$	89.67	$	100.58	$	215,525,000	24.4%
2021	$	10,534,520	$	9,476,831		$	1,019,293	$	1,022,790		$	147.25	$	165.34	$	279,881,000	30.4%
2020	$	3,507,561	$	10,822,671		$	3,217,496	$	6,041,660		$	151.56	$	139.59	$	176,186,000	21.0%

(1)	Our CEO in all of 2020, 2021, 2022 and 2023 was Robert J. Willett.

(2)	Mr. Willett’s compensation “actually paid” as presented above is calculated by deducting and adding the following amounts, in each case in accordance with Item 402(v)(2)(C) of Regulation S-K:


CEO Compensation “Actually Paid”	2023			2022			2021			2020
Summary Compensation Table total for the covered fiscal year	$	6,959,914		$	7,257,424		$	10,534,520		$	3,507,561
Less, Grant date fair value of awards reported in the Summary Compensation Table for the covered fiscal year	$	6,198,638		$	6,200,799		$	6,187,056		$	3,322,440
Plus, Year-end fair value of awards granted for the covered fiscal year that were outstanding and unvested as of the end of the covered fiscal year	$	4,188,941		$	3,294,711		$	4,781,517		$	7,043,400
Plus, Change in fair value of awards granted in prior years that were outstanding and unvested as of the end of the covered fiscal year (from prior fiscal year-end to covered fiscal year-end)	$	(2,154,769	)	$	(6,805,316	)	$	(363,960	)	$	4,023,900
Plus, Change in fair value of awards granted in prior years that vested in the covered fiscal year (from prior fiscal year-end to vesting date)	$	297,114		$	(1,204,263	)	$	711,810		$	(429,750	)

Total Adjustments	$	(3,867,352	)	$	(10,915,667	)	$	(1,057,689	)	$	7,315,110

(3)

In 2020, 2021, 2022 and 2023, neither our CEO nor any

non-CEO

NEO had any awards that vested in the same year that they were granted, any awards granted in prior years that failed to meet the applicable vesting conditions, or any dividends or other earnings paid on equity awards in the covered fiscal year prior to vesting that are not reflected in total compensation for the applicable year, and therefore, no adjustments for those items were included in calculating compensation “actually paid.” Further, in 2020, 2021, 2022 and 2023, neither our CEO nor any

non-CEO

NEO received any benefit under any defined benefit and actuarial plans and therefore, no adjustments for those items were included in calculating compensation “actually paid.”

(4)	Our non-CEO NEOs for each of the fiscal years presented above were:

•

2023: Paul D. Todgham, Carl W. Gerst III, Sheila M. DiPalma and Joerg Kuechen

Table of Contents

•

2022: Paul D. Todgham, Carl W. Gerst III, Sheila M. DiPalma and Joerg Kuechen

•

2021: Robert J. Shillman, Paul D. Todgham, Carl W. Gerst III and Sheila M. DiPalma

•

2020: Robert J. Shillman, Paul D. Todgham, Carl W. Gerst III, Sheila M. DiPalma and Laura A. MacDonald

(5)	Average non-CEO NEO compensation “actually paid” as presented above is calculated by deducting and adding the following amounts, in each case in accordance with Item 402(v)(2)(C) of Regulation S-K:


Average Non-CEO Compensation “Actually Paid”	2023			2022			2021			2020
Summary Compensation Table total for the covered fiscal year	$	2,377,635		$	2,596,662		$	1,019,293		$	3,217,496
Less, Grant date fair value of awards reported in the Summary Compensation Table for the covered fiscal year	$	2,003,523		$	2,158,091		$	373,852		$	2,682,912
Plus, Year-end fair value of awards granted for the covered fiscal year that were outstanding and unvested as of the end of the covered fiscal year	$	1,564,037		$	1,382,138		$	297,237		$	4,517,875
Plus, Change in fair value of awards granted in prior years that were outstanding and unvested as of the end of the covered fiscal year (from prior fiscal year-end to covered fiscal year-end)	$	(662,444	)	$	(3,519,480	)	$	(183,252	)	$	1,098,685
Plus, Change in fair value of awards granted in prior years that vested in the covered fiscal year (from prior fiscal year-end to vesting date)	$	37,918		$	(813,386	)	$	263,363		$	(109,485	)

Total Adjustments	$	(1,064,012	)	$	(5,108,820	)	$	3,497		$	2,824,163

(6)

Total shareholder return (“TSR”) of Cognex and the peer group are calculated by assuming that an investment of $100 was made in each of our common stock and in the Nasdaq Lab Apparatus & Analytical, Optical, Measuring & Controlling Instrument (SIC 3820-3829 US Companies) Index (“Peer Index”) starting from the market close on December 31, 2019, which is the last trading day before our fiscal year 2020, through and including the end of each fiscal year shown. Total shareholder return includes reinvestment of dividends into shares of common stock of the applicable company. Data for the Peer Index was provided to Cognex by Research Data Group, Inc.

(7)

Operating margin is defined as our operating income as a percentage of revenue. While we consider numerous financial and

non-financial

performance measures for the purpose of evaluating and determining executive compensation, we consider operating margin, which is a primary factor used to determine annual cash incentive compensation for our NEOs, to be the most important performance measure used to link compensation “actually paid” to the NEOs to company performance.

Table of Contents

Relationship Between Compensation “Actually Paid” and Performance Measures

The following chart shows the relationship between the compensation “actually paid” (“CAP”) to our CEO, CAP to our

non-CEO

NEOs, Cognex’s TSR, and the Peer Index TSR.

The following chart shows the relationship between CAP to our CEO, CAP to our

non-CEO

NEOs, and Cognex’s net income.

Table of Contents

The following chart shows the relationship between CAP to our CEO, CAP to our

non-CEO

NEOs, and Cognex’s operating margin.

Tabular List of Most Important Financial Performance Measures

For Mr. Willett, the financial performance measures that the company has determined are most important to link his compensation actually paid to the company’s performance are:

•

revenue;

•

operating income;

•

operating margin; and

•

relative TSR.

For our

non-CEO

NEOs, the financial performance measures that the company has determined are most important to link compensation actually paid to the company’s performance are:

•

revenue;

•

operating income; and

•

operating margin.

Analysis of the Information Presented in the Pay Versus Performance Table

In October 2020, Mr. Gerst and Ms. DiPalma each received a

one-time

special stock option grant in consideration of their respective promotions to Executive Vice President on October 30, 2020. Because of these special grants, neither Mr. Gerst nor Ms. DiPalma was eligible to receive an annual equity award in 2021. The decrease in average compensation to our

non-CEO

NEOs between 2020 and 2021 was impacted by (i) the special stock option grant to Mr. Gerst and Ms. DiPalma in 2020, and (ii) Mr. Gerst and Ms. DiPalma being ineligible to receive an annual equity award in 2021.

Further information regarding our executive compensation program is provided above under the heading “Compensation Discussion and Analysis.”

PROPOSAL 2: RATIFICATION OF SELECTION OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has appointed Grant Thornton LLP (“Grant Thornton”) as Cognex’s independent registered public accounting firm to examine the consolidated financial statements of Cognex and its subsidiaries for the fiscal year ending December 31, 2024. Grant Thornton has served as Cognex’s independent registered public accounting firm since 2007. Although ratification by shareholders is not required by law or by our Amended and Restated By-Laws (“By-Laws”), the Audit Committee believes that submission of its selection to shareholders is a matter of good corporate governance. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time if the Audit Committee believes that such a change would be in the best interests of our company and its shareholders. If our shareholders do not ratify the selection of Grant Thornton, the Audit Committee will take that fact into consideration, together with such other factors as it deems relevant, in determining its next selection of an independent registered public accounting firm. A representative of Grant Thornton is expected to be present at our 2024 Annual Meeting of Shareholders, and will have the opportunity to make a statement if he or she so desires and to respond to appropriate questions.

Recommendation

OUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF THE SELECTION OF GRANT THORNTON LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2024.

Fees Paid to Independent Registered Public Accounting Firm and Other Matters

The aggregate fees charged or expected to be charged by Grant Thornton and its affiliates for services rendered during 2022 and 2023 are as follows:


Type of Fee	2023		2022
Audit Fees	$	1,402,415	$	1,238,023
Audit-Related Fees	$	—	$	—
Tax Fees	$	2,856	$	4,950
All Other Fees	$	—	$	—

Audit Fees. These are fees for services rendered in connection with the audit of the annual financial statements included in our Annual Report on Form 10-K; the review of the financial statements included in our Quarterly Reports on Form 10-Q; the audit of our internal control over financial reporting; and for services that are normally provided by an independent auditor in connection with statutory and regulatory filings or engagements. For 2023, these fees included audit services associated with our acquisition of Moritex Corporation.

Audit-Related Fees. These are fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements or our company’s internal control over financial reporting.

Tax Fees. These are fees for tax compliance, planning and preparation, and tax consulting and advice.

All Other Fees. These are fees for any service not included in the first three categories.

Audit Committee’s Pre-Approval Policies

The Audit Committee pre-approves all auditing services and the terms of such services and non-audit services provided by Cognex’s independent registered public accounting firm, but only to the extent that the non-audit services are not prohibited under applicable law and the Audit Committee reasonably determines that the non-audit services do not impair the independence of the independent registered public accounting firm. The authority to pre-approve non-audit services may be delegated to one or more members of the Audit Committee, who present all decisions to pre-approve an activity to the full Audit Committee at its first meeting following such decision.

The pre-approval requirement is waived with respect to the provision of non-audit services for Cognex if:

•

the aggregate amount of all such non-audit services provided to us constitutes not more than 5% of the total amount of fees paid by us to the independent registered public accounting firm during the fiscal year in which such non-audit services were provided;

•

those services were not recognized at the time of the engagement to be non-audit services; and

•

those services are promptly brought to the attention of the Audit Committee and approved prior to the completion of the audit by the Audit Committee or by one or more of its members to whom authority to grant such approvals has been delegated by the Audit Committee.

The Audit Committee approved all audit and audit-related services provided to Cognex by Grant Thornton during fiscal years 2022 and 2023. There were no non-audit services provided to Cognex by Grant Thornton for fiscal years 2022 and 2023 that required review by the Audit Committee.

PROPOSAL 3: EXECUTIVE COMPENSATION (“SAY-ON-PAY”)

We are providing our shareholders with the opportunity to vote on a non-binding, advisory resolution to approve the compensation paid to our named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to express their views on our named executive officers’ compensation. At our 2023 Annual Meeting, a majority of votes were cast in favor of holding annual say-on-pay votes. Based on these results, and consistent with the recommendation of the Board of Directors, we plan to continue to conduct an advisory vote on the compensation of our named executive officers on an annual basis, until the next advisory vote on the frequency of such say-on-pay votes, which we expect will occur at our 2029 Annual Meeting of Shareholders.

This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we will ask our shareholders to vote “FOR” the following resolution at the meeting:

“RESOLVED, that the compensation paid to Cognex’s named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

Total compensation for our named executive officers consists primarily of salary, bonus and equity-based awards as well as other benefits which are also available to all Cognex employees generally. Salary and bonuses are viewed as short-term compensation to reward our named executive officers for meeting individual and company performance objectives, and stock option and restricted stock unit awards are viewed as a reward for increasing shareholder value and improving corporate performance over the long term. We also believe that stock option and restricted stock unit awards promote the retention of talented employees. Determinations with respect to compensation for a fiscal year are generally made in conjunction with our Board of Directors’ approval of Cognex’s annual budget for that year, which typically takes place at the end of the prior fiscal year.

The compensation philosophy and programs for our named executive officers are set forth under the headings “Compensation Discussion and Analysis” and “Executive Compensation.”

Recommendation

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THIS “SAY-ON-PAY” PROPOSAL.

The resolution that is the subject of this proposal is advisory in nature and, therefore, is not binding on Cognex, the Compensation/Stock Option Committee or our Board of Directors. However, the Compensation/Stock Option Committee intends to take the results of the vote on this proposal into account when considering future decisions regarding the compensation of our named executive officers.

REPORT OF THE AUDIT COMMITTEE

The following is the report of the Audit Committee with respect to Cognex’s audited financial statements for the fiscal year ended December 31, 2023. The Audit Committee acts pursuant to a written charter. Each of the members of the Audit Committee qualifies as an “independent” Director under the applicable listing standards of Nasdaq and rules of the SEC.

The Audit Committee has reviewed and discussed Cognex’s audited financial statements with management. The Audit Committee has discussed with Grant Thornton, Cognex’s independent registered public accounting firm, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the Securities and Exchange Commission. The Audit Committee has also received the written disclosures and the letter from Grant Thornton required by applicable requirements of the PCAOB regarding Grant Thornton’s communications with the Audit Committee concerning independence, and has discussed with Grant Thornton the independent registered public accounting firm’s independence.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that Cognex’s audited financial statements be included in Cognex’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

The foregoing report has been approved by all members of the Audit Committee.

AUDIT COMMITTEE

Marjorie T. Sennett, Chairwoman

Sachin Lawande

John T.C. Lee

Angelos Papadimitriou

SHAREHOLDER PROPOSALS

Under regulations adopted by the SEC, any proposal submitted for inclusion in our proxy statement relating to our 2025 Annual Meeting of Shareholders must be received at our principal executive offices in Natick, Massachusetts on or before November 15, 2024. Our receipt of any such proposal from a qualified shareholder in a timely manner will not ensure its inclusion in the proxy material because there are other requirements in the proxy rules for such inclusion.

In addition to the SEC’s requirements regarding shareholder proposals, our By-laws contain provisions regarding matters to be brought before shareholder meetings. If shareholder proposals, including proposals regarding the election of Directors, are to be considered at the 2025 Annual Meeting of Shareholders, notice of them must be given by personal delivery or by U.S. mail, postage prepaid, to the Secretary of Cognex Corporation not later than the close of business on January 31, 2025 nor earlier than the close of business on January 1, 2025. However, in the event that the date of the annual meeting is advanced by more than 30 days before or delayed by more than 60 days after the first anniversary of the preceding year’s annual meeting, such notice must be delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. The notice must set forth certain information concerning the shareholder making the proposal, the business or nominees for election subject to the proposal, and related information as described in our By-laws. Shareholders should refer to our By-Laws, as the same may be amended from time to time, with respect to the notice requirements, required information and other procedures for submitting a shareholder proposal, including a proposal with respect to the election of Directors.

In addition, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than Cognex’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 2, 2025. Shareholder proposals with respect to the election of Directors must also contain other information set forth in our By-laws. Proxies solicited by our Board of Directors will confer discretionary voting authority with respect to these proposals subject to the SEC’s rules governing the exercise of this authority. We suggest that any shareholder proposal be submitted by certified mail, return receipt requested.

NOTICE OF AMENDMENTS TO AMENDED AND RESTATED BY-LAWS

BY THE BOARD OF DIRECTORS PURSUANT TO SECTION 10.20 OF CHAPTER 156D OF THE MASSACHUSETTS GENERAL LAWS

On August 2, 2023, in connection with certain recent changes to SEC rules and a periodic review of corporate governance matters, the Board approved amendments to the company’s By-Laws, which were effective immediately. The amendments to the By-Laws (1) addressed matters relating to Rule 14a-19 under the Exchange Act, (2) provided that any shareholder soliciting proxies use a proxy card color other than white, which is reserved for the exclusive use of the Board, (3) enhanced the informational and procedural requirements in connection with shareholder proposals and shareholder director nominations, (4) enhanced the informational and procedural requirements in connection with a request for a special meeting of shareholders by one or more shareholders in accordance with the By-Laws, (5) clarified the powers of the Board and the presiding officer at a

shareholder meeting to prescribe rules and regulations for the conduct of the meeting, and (6) made various updates throughout to conform to the Massachusetts Business Corporation Act and to make ministerial changes, clarifications (including changes to clarify the company’s ability to conduct business by means of remote or electronic communication), and other conforming revisions.

In addition, the By-Laws were amended to provide that, unless the company consents in writing to the selection of an alternative forum, (a) Massachusetts State Court is the sole and exclusive forum for any derivative action or proceeding brought on behalf of the company, any action asserting a claim of, or a claim based on, a breach of a fiduciary duty owed by any current or former Director, officer or other employee or shareholder of the company to the company or its shareholders, any action asserting a claim arising pursuant to any provision of the Massachusetts General Laws or the Company’s organizational documents, or any action asserting a claim governed by the internal affairs doctrine, and (b) the federal district courts of the United States shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, the Exchange Act, or the respective rules and regulations thereunder. These amendments were intended to avoid subjecting Cognex to the expense and other burdens of multiple lawsuits in separate jurisdictions on matters governed by the corporate law of Massachusetts, our state of incorporation, or federal securities laws and in light of those courts’ relative expertise in matters arising under those laws.

The full text of Cognex’s By-Laws, as amended, is filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 3, 2023. Shareholders also can send a written request to Investor Relations at Cognex Corporation, One Vision Drive, Natick, Massachusetts 01760 or by email at IR@cognex.com and we will provide a copy of the By-Laws to such person without charge.

OTHER MATTERS

Management knows of no matters which may properly be and are likely to be brought before the meeting other than the matters discussed in this proxy statement. However, if any other matters properly come before the meeting, the persons named in the enclosed proxy will vote in accordance with their best judgment.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Shareholders are cautioned that statements in this proxy statement, which are not strictly historical statements, constitute forward-looking statements, including, without limitation, statements regarding Cognex’s future performance, operating results and financial condition, strategic and operating plans, compensation plans, market and industry trends, new product offerings, sales initiatives, cost management, acquisitions, and management’s future expectations, beliefs, goals, plans or prospects. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “goal,” “target”, “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” and similar expressions intended to identify forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materiality from those anticipated by the forward-looking statements, including the risks detailed in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and other filings with the SEC. The company assumes no obligation to update any forward-looking information contained in this proxy statement.

By Order of the Board of Directors,

Mark T. Fennell, Secretary

Natick, Massachusetts

March 15, 2024

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C123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext ENDORSEMENT LINE SACKPACK 000000000.000000 ext 000000000.000000 ext MR A SAMPLE DESIGNATION (IF ANY) 000001 ADD ADD 3 2 ADD 1 ADD 4 ADD 5 ADD 6 –Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Votes submitted electronically must be received by 1:00 a.m., EDT, on May 1, 2024. Online Go to www.envisionreports.com/CGNX or scan the QR code – login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/CGNX Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. 2024 Annual Meeting of Shareholders Proxy Card IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. The Board of Directors recommends a vote FOR the nominees listed in Proposal 1 and FOR Proposals 2 and 3. 1. Nominees: Nominated for a term ending in 2027: 01 - Sachin Lawande 02 - Marjorie T. Sennett 2. To ratify the selection of Grant Thornton LLP as our independent registered public accounting firm for fiscal year 2024. 3. To approve, on an advisory basis, the compensation of Cognex’s named executive officers, as described in the proxy statement including the Compensation Discussion and Analysis, compensation tables and narrative discussion (“say-on-pay”). Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. A Election of Directors For Against Abstain For Against Abstain For Against Abstain For Against Abstain B Authorized Signatures – This section must be completed for your vote to count. Please date and sign below. . 1234 5678 9012 345 C 1234567890 J N T 140 MR A CHARACTERS) SAMPLE (THISAREAMR A SAMPLE IS SET AND UP TOMR ACCOMMODATE A SAMPLE AND MMMMMMM649832-003 06Mar242 2 17:00D M 6 0 4 4Page9 6 MRMR AA SAMPLESAMPLE ANDAND MRMR AA SAMPLESAMPLE ANDAND MRMR AA SAMPLESAMPLE AND AND

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2024 Annual Meeting of Shareholders Admission Ticket 2024 Annual Meeting of Cognex Corporation Shareholders May 1, 2024 at 9:00 a.m. Local Time Cognex Corporation One Vision Drive Natick, Massachusetts 01760 Upon arrival, please present this admission ticket and photo identification at the registration desk. DIRECTIONS TO COGNEX CORPORATION One Vision Drive Natick, MA 01760 Please note: Guest parking is available in front of the building. From Route 90 West (Mass Turnpike) (From Boston and Logan Airport): • Merge onto Route 90 West (Mass Turnpike) toward Worcester • Take Exit 123A (I-95/Route 128) toward Providence • Follow “From Route 128 (I-95)” From Route 128 (I-95): • Take Exit 36B (Route 9 West) toward Framingham/Worcester • Follow “From Route 9 West” From Route 495: • Take Exit 58 Route 90 East (Mass Turnpike) toward Boston • Follow “From Route 90 East (Mass Turnpike) (From Albany, NY and Worcester)” From Route 90 East (Mass Turnpike) (From Albany, NY and Worcester): • Take Exit 117 (Natick - Route 30) • Follow left ramp towards Natick (Route 30 East) • Merge onto Cochituate Road (Route 30 East) • Take first right onto Speen Street • Follow signs to Route 9 East • Follow “From Route 9 East” From Route 9 West: • Follow Route 9 West • Look for an Audi dealership on your right as you head up a hill. At the crest of that hill, Vision Drive is 0.1 miles past Wethersfield Rd. • Turn right onto Vision Drive. Cognex is on the left of Vision Drive. From Route 9 East: • Follow Route 9 East • Make U-turn at the left lane U-turn signal near Natick McDonald’s • Follow “From Route 9 West” Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/CGNX Notice of 2024 Annual Meeting of Shareholders Proxy Solicited by Board of Directors for Annual Meeting – May 1, 2024 Important Notice Regarding the Availability of Proxy Materials for the 2024 Annual Meeting of Shareholders to be held on May 1, 2024: The proxy statement and annual report to shareholders are available at: www.envisionreports.com/CGNX. The undersigned hereby appoints Robert J. Willett and Mark T. Fennell, and each of them, with full power of substitution, as proxies to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the 2024 Annual Meeting of Shareholders of Cognex Corporation to be held on May 1, 2024 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted as directed by the shareholder. If no such directions are indicated, the shares represented by this proxy will be voted FOR the election of the nominees listed on the reverse side for the Board of Directors and FOR Proposals 2 and 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side) Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting. Proxy – Cognex Corporation Change of Address – Please print new address below. C Non-Voting Items IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Comments – Please print your comments below



☒		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.


Information about the Meeting and Voting Procedures			1

• General			1

• Voting Rights and Quorum			1

• Treatment of Abstentions and Broker Non-Votes			2

• Voting Your Shares			2

• Expense of Solicitation			3

• How to Obtain an Annual Report on Form 10-K			3

• Householding of Annual Meeting Materials			3

• Investor Contact			3

Stock Ownership			4

• Security Ownership of Certain Beneficial Owners			4

• Security Ownership of Directors and Executive Officers			5

Delinquent Section 16(a) Beneficial Ownership Reports			6

Corporate Governance			7

• Code of Business Conduct and Ethics			7

• Director Independence			7

• Board Leadership Structure			7

• The Board’s Role in Risk Oversight			7

• Policy on Pledging, Hedging and Trading of Cognex Stock			8

• Communications to Directors			8

• Board Meetings, Committees and Attendance			8

• Compensation/Stock Option Committee Interlocks and Insider Participation			12

• Certain Relationships and Related Transactions			12

• Board Diversity Matrix			12

• Director Nominees			12

Proposal 1: Election of Directors			15

• Recommendation			15

• Information Regarding Directors and the Director Nominees			15

Director Compensation			19

• Director Compensation Table			19

• Elements of Director Compensation			20

• Director Stock Ownership Guidelines			21

Compensation Policies and Procedures			22

Compensation Discussion and Analysis			24

• Executive Summary			24

• Say-on-Pay Feedback from Shareholders			24

• Business Results			25

• Compensation Program Highlights			26

• Policy Relating to the Recovery of Erroneously Awarded Compensation			32

• Executive Stock Ownership Guidelines			33


Compensation/Stock Option Committee Report			34

Executive Officers			35

Executive Compensation			36

• Summary Compensation Table			36

• Grants of Plan-Based Awards Table			37

• Discussion of Summary Compensation and Grants of Plan-Based Awards Tables			38

• Option Exercises and Stock Vested Table			39

• Outstanding Equity Awards at Fiscal Year-End			40

Employment Agreement with Robert J. Willett			43
Potential Payments Upon Termination or Change of Control			43

CEO Pay Ratio			46

Pay Versus Performance			48

• Relationship Between Compensation “Actually Paid” and Performance Measures			50

• Tabular List of Most Important Financial Performance Measures			51

• Analysis of the Information Presented in the Pay Versus Performance Table			51

Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm			52

• Recommendation			52

• Fees Paid to Independent Registered Public Accounting Firm and Other Matters			52

Proposal 3: Executive Compensation (“Say-on-Pay”)			54

• Recommendation			54

Report of The Audit Committee			55

Shareholder Proposals			56

Notice of Amendments to Amended and Restated By-Laws			56

Other Matters			57

Note Regarding Forward-Looking Statements			58