LAM RESEARCH CORP
For the period ended Nov 3, 2026. Filed Sep 24, 2026.
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Nov 3, 2026 · Filed Sep 24, 2026
Contents
Long-Term Incentive Program
Design
Our LTIP is designed to attract and retain top talent, provide competitive levels of compensation, align pay with achievement of business objectives and with stock performance over a multi-year period, reward our NEOs for outstanding Company performance, and create stockholder value over the long-term.
Under the current LTIP, at the beginning of each multi-year performance period, target award opportunities (expressed as a U.S. dollar value), performance metrics, and the mix of vehicles used are established for the program.
Under the 2026/2028 LTIP, service-based RSUs vest on an annual basis over three years, while Market-based PRSUs cliff vest after three years. Cliff, rather than annual, vesting provides for both retention and for aligning NEOs with longer-term stockholder interests.
Equity Vehicles
The equity vehicles used in our 2026/2028 LTIP are as follows:
2026/2028 LTIP Equity Vehicles
| Equity Vehicles | Vesting | Terms |
|---|---|---|
| Market-based PRSUs •CEO/EVPs: 60% of Target Award Opportunity•SVPs: 55% of Target Award Opportunity | •Awards cliff vest on the third anniversary of the February 27, 2026 grant date (the “Grant Date”), subject to satisfaction of a minimum performance requirement and continued employment. •Awards that vest at the end of the performance period are distributed in shares of our common stock. | •The target number of Market-based PRSUs granted is determined by dividing the applicable percentage of the target opportunity by the 30 trading day average of the closing price of our common stock prior to the Grant Date, $231.13, rounded down to the nearest share. •The number of shares represented by the Market-based PRSUs that can be earned over the performance period is determined according to the performance parameters described in the figure below. |
| Service-based RSUs•CEO/EVPs: 40% of Target Award Opportunity•SVPs: 45% of Target Award Opportunity | •Awards vest one-third on the first, second, and third anniversaries of the Grant Date, subject to continued employment. •Awards are distributed in shares of our common stock upon vesting. | •The number of RSUs granted is determined by dividing the applicable percentage of the target opportunity by the 30 trading day average of the closing price of our common stock prior to the Grant Date, $231.13, rounded down to the nearest share. |
2026/2028 Market-based PRSU Performance Parameters
| Parameter | Terms |
|---|---|
| Performance Period | Three years from the first business day in February (February 2, 2026 through February 1, 2029). |
| Performance Index | PHLX Semiconductor Sector Total Return Index, or "XSOX index" |
| Number of Shares | •Based on our relative TSR performance compared to the TSR performance of the components of the XSOX index, on a percentile rank basis. The TSR performance is measured using the average closing price for the 50 trading days prior to the dates the performance period begins and ends, assuming that any dividends paid are reinvested on the ex-dividend date. Percentile rank is rounded down to the nearest one tenth of a percentile using conventional rounding. •A table reflecting the potential payouts is shown below in the figure below.•The final shares awarded cannot exceed 100% of the target if our TSR is negative over the performance period. |
Market-based PRSU Potential Payouts
| Lam’s TSR Percentile RankCompared to XSOX Index | Market-based PRSUs That Can Be Earned(% of Target)(1) |
|---|---|
| 75th percentile or more | 150 |
| 50th percentile | 100 |
| 25th percentile | 50 |
| Less than 25th percentile | 0 |
(1)The results of the vesting criteria (reflecting the number of Market-based PRSUs that can be earned) are linearly interpolated between the stated percentiles and percentages. The result of the vesting criteria is rounded down to the nearest whole number.
Calendar Year 2026 LTIP Decisions
Calendar Year 2026 decisions for the 2026/2028 LTIP. Under our LTIP, the committee sets a target award opportunity for each participant based on the NEO’s position and responsibilities, Company and individual performance, and an assessment of competitive compensation data. The target award opportunities for each participant are expressed in a U.S. dollar value. On February 27, 2026, the committee made a grant under the 2026/2028 LTIP of Market-based PRSUs and service-based RSUs, on the terms set forth in the tables titled “2026/2028 LTIP Equity Vehicles” and “2026/2028 Market-based PRSU Performance Parameters” above, with a combined value equal to the NEO’s total target award opportunity, as determined by the committee and shown below. The calendar year 2026/2028 target amounts for each NEO were increased from calendar 2025/2027 target opportunities after taking into consideration our NEOs’ contributions and responsibilities, and our desire to continue to incentivize outperformance and to provide appropriate incentive opportunities in a highly competitive market. Market median long-term incentive data across NEO roles increased by approximately 15% year-over-year on average, with more pronounced increases for Mr. Fernandes’ and Dr. Vahedi’s roles. In addition, as was noted above with respect to Mr. Varadarajan, the committee also adjusted his compensation to reflect the broader role and increased responsibilities he was assuming in 2026 in connection with his appointment as Chief Operating Officer.
Lam Research Corporation 2026 Proxy Statement 41
2026/2028 LTIP Award Grants
| Named Executive Officer | Target AwardOpportunity($)(1) | Market-based PRSU Award(#)(2) | Service-basedRSU Award(#) |
|---|---|---|---|
| Timothy M. Archer | 29,500,000 | 76,580 | 51,053 |
| Douglas R. Bettinger | 7,250,000 | 18,820 | 12,547 |
| Seshasayee (Sesha) Varadarajan | 7,250,000 | 18,820 | 12,547 |
| Neil J. Fernandes | 4,250,000 | 10,113 | 8,274 |
| Vahid Vahedi | 4,650,000 | 11,065 | 9,053 |
(1)Target award opportunities (expressed as a U.S. dollar value) are approved by the committee and converted to awards on the grant date as described in the figure above titled “2026/2028 LTIP Equity Vehicles” using the 30 trading day average of the closing price of our common stock prior to the Grant Date. Target award opportunities differ from the amounts shown in “– Executive Compensation Tables” following this CD&A, which represent the grant date fair value of the awards determined in accordance with ASC 718.
(2)The number of Market-based PRSUs awarded is reflected at target. The final number of shares that may be earned will be 0% to 150% of target.
Calendar Year 2023/2025 LTIP Award Payouts. In February 2026, the committee determined the payouts for the calendar year 2023/2025 LTIP Awards of Market-based PRSUs. Prior to our 2025/2027 LTIP, the number of shares represented by the Market-based PRSUs earned over the performance period was based on our relative TSR performance compared to the market price performance of the XSOX index as described in the table below. Starting with our 2025/2027 LTIP, the committee began measuring relative TSR performance for the Market-based PRSUs by the percentile ranking of the Company’s TSR relative to the TSRs for the companies making up the performance index, as described in the table titled “2026/2028 Market-based PRSU Performance Parameters” above.
2023/2025 Market-based PRSU Performance Parameters
| Parameter | Terms |
|---|---|
| Performance Period | Three years from the first business day in February (February 1, 2023 through January 31, 2026). |
| Performance Index | PHLX Semiconductor Sector Total Return Index, or “XSOX index” |
| Number of Shares | •Based on our relative TSR performance compared to the market price performance of the Performance Index, subject to a ceiling as shown in the figure below. The TSR performance or market price performance is measured using the closing price for the 50 trading days prior to the dates the performance period begins and ends, assuming that any dividends paid on our common stock are reinvested on the ex-dividend date (consistent with the treatment of dividends in the Performance Index).•Potential payouts are as shown in the figure below. The result of the vesting formula is rounded down to the nearest whole number. |
2023/2025 Market-based PRSU Potential Payouts
| Lam’s TSR % Change PerformanceCompared to XSOX Index % Change Performance | Market-based PRSUs That Can Be Earned(% of Target)(1) |
|---|---|
| + 25% or more | 150 |
| 10% | 120 |
| 0% (equal to index) | 100 |
| - 10% | 80 |
| - 25% | 50 |
| - 50% or less | 0 |
(1)The results of the vesting formula (reflecting the number of Market-based PRSUs that can be earned) are linearly interpolated between the stated percentages.
Based on the parameters set forth above, the Company’s TSR performance over the three-year performance period was equal to 319.73% and the performance of the XSOX index (based on market price) over the same three-year performance period was equal to 178.75%. Lam’s stock price outperformed the XSOX index by 140.98%, which resulted in the maximum possible performance payout of 150% of the target number of Market-based PRSUs granted to each NEO. Based on such results, the committee made the following payouts to each NEO for the 2023/2025 LTIP Award of Market-based PRSUs.
2023/2025 LTIP Market-based PRSU Award Payouts
| Named Executive Officer | Target Market-based PRSUs (#) | Actual Payout of Market-based PRSUs (150.00% of Target Award Opportunity) (#) |
|---|---|---|
| Timothy M. Archer | 181,020 | 271,530 |
| Douglas R. Bettinger | 51,280 | 76,920 |
| Seshasayee (Sesha) Varadarajan | 35,950 | 53,925 |
| Neil J. Fernandes | 14,380 | 21,570 |
| Vahid Vahedi | 33,180 | 49,770 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.