COGNEX CORP

Our executive compensation program is designed to be largely performance-based. In its deliberations of compensation for our executive officers, the Compensation Committee considers the following:

The Compensation Committee uses Competitive Analysis to assess our executives’ compensation against the compensation paid to executives in similar positions in our compensation 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 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 just above the median of the market as an initial benchmark, as described under “Compensation Philosophy” above. While we use Competitive Analysis as a starting point, we also consider the qualitative, unique dimensions of an executive’s role and tenure when setting our executives’ compensation as we do not believe an external benchmark should be the only determinant of compensation.

Total compensation for our named executive officers also includes other benefits that are available to Cognex employees generally. These include 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.

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

What we do

What we don’t do

Compensation Consultant

The Compensation 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 2025, Pay Governance performed the following tasks for the committee:

Annually, the Compensation 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 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 Committee determined that Pay Governance was independent and that its work with the Committee for 2025 has not raised any conflicts of interest.

Competitive Analysis

The compensation peer group used for the Competitive Analysis consists of 14 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 the Compensation Committee believes is appropriate. The Compensation Committee, with the assistance of its independent compensation consultant, reviewed and updated the company’s compensation peer group to remove significantly larger peers and to add four companies of more comparable size. In conducting this review, the Compensation Committee also considered a watch list of potential peers including companies that list Cognex as a peer (“reverse peers”), and peer groups identified by third-parties to ensure relevance and comparability. The Compensation Committee plans to review the peer group annually to ensure that the companies in the peer group remain relevant and provide meaningful compensation comparisons.

2025 Peer Group

Base Salary

In determining the base salaries paid to our named executive officers for fiscal year 2025, the Compensation Committee considered, in particular, levels of responsibility, salary increases awarded in the past, Competitive Analysis, and the executive’s experience and potential. The base salary approved for each of our named executive officers for fiscal year 2025 was determined based on the following criteria:

Following its investigation and consideration of the above criteria, the Compensation Committee made the following adjustments to base salary for 2025:

Annual Company Bonuses

The Compensation Committee views annual company bonuses as a way to reward employees for meeting individual and company performance objectives. The annual bonus program is designed to be variable. Cognex employees, including our named executive officers but excluding employees on a sales commission plan, are eligible to participate in this performance-based annual bonus program. The Compensation Committee approves the annual bonus program following our Board’s approval of Cognex’s annual budget.

For 2025, there were three components to the annual company bonus program (the “Legacy Bonus Program”):

The calculation is as follows:

Target Bonus Amountx Achievement of Adjusted EBITDA Percentage x Individual Goal Achievement= Cash Bonus

As noted, this 2025 bonus scheme is being replaced in 2026 for vice presidents and above with a new bonus scheme based on three publicly disclosed financial metrics.

Target Amounts

The Compensation Committee approves the target bonus amounts for each employee at the vice president level and above, including each named executive officer. For most executives, the target bonus amount (as a percentage of base salary) falls within 10% of the median of our compensation peer group.

The following table sets forth the target bonus amounts for each of our named executive officers:

Company-Wide Financial Target

The financial target for 2025 was calculated in the same way as the company’s adjusted EBITDA percentage to provide consistency between our internal and external metrics. In prior years, we used the company’s operating margin as determined in accordance with generally accepted accounting principles (“GAAP”). The Compensation Committee determined that adjusted EBITDA percentage is an appropriate metric for our bonus program because the Compensation Committee believes that employee performance is integral to achieving desired levels of company profitability. Adjusted EBITDA percentage is calculated by dividing adjusted EBITDA (which is anon-GAAP financial measure calculated as GAAP operating income adjusted for amortization of acquisition-related intangible assets and depreciation, as well as, if applicable, restructuring charges, reorganization charges, acquisition and integration costs andone-time discrete events), by revenue.

In the first quarter of 2025, the Compensation Committee, following the approval of the 2025 budget, set the target adjusted EBITDA percentage at 18.9%. The minimum adjusted EBITDA percentage was set at 65% of the target, or 12.3%. If Cognex’s actual adjusted EBITDA percentage falls below the minimum, no bonus is achieved for our executive officers. If the adjusted EBITDA percentage falls between the minimum and the target (e.g., between 12.3% and 18.9%), the maximum eligible bonus is calculated on a straight-line basis between 0% and 100%.

“Pmax”

If the adjusted EBITDA percentage is above the target (e.g., above 18.9% in 2025), executives are eligible to receive more than 100% of their target bonus based on employment level and up to a maximum percentage of such executives’ target bonus as approved by the Compensation Committee (“Pmax”). The Compensation Committee typically sets Pmax percentages at the beginning of each year following the approval of the annual budget. This additional bonus amount is funded by a portion of the incremental adjusted EBITDA above Cognex’s adjusted EBITDA target at an accelerated rate of funding as approved by the Compensation Committee. In other words, for each dollar above the adjusted EBITDA target, a portion goes to fund the additional bonus. Once the Pmax percentages are reached by employment level, the bonus is achieved at its maximum level and funding stops.

Individual Goals

The final component of Cognex’s Legacy Bonus Program is individual achievement. In the first quarter of each year, executives, with the CEO, set individual goals. CEO goals are typically approved by Anthony Sun, the company’s Board chair. Goals are specific to each individual and function, but often relate to and support Cognex’s company-wide strategic priorities. For named executive officers, 80% of individual goals are objective and only 20% are subjective. Examples of objective individual goals (80%) include revenue targets derived from new product introduction, on-time product releases and new technology development milestones. Individual goals are not disclosed publicly for competitive reasons. Examples of subjective goals (20%) include professional development milestones and contributions to Cognex culture. Our CEO assesses the subjective goals of our executive officers following each fiscal year, and our Board chair assesses the subjective goals of our CEO.

2025 Corporate Achievement

For 2025, the actual adjusted EBITDA percentage was 21.5%, which was above our target of 18.9%. However, this percentage included aone-time benefit from the Commercial Partnership as defined above. Although revenue derived from the Commercial Partnership was recognized upfront pursuant to applicable accounting rules, actual payments are expected to be received over the duration of the partnership, resulting in unbilled revenue. Given this, our named executive officers believed it was unfair to fund their bonuses to the extent of thisone-time benefit. Therefore, each named executive officer voluntarily forfeited his or her portion of the bonus attributed to thisone-time benefit as set forth below. The Compensation Committee accepted the named executives’ decision.

The components of bonus achievement for our named executive officers in 2025 were as follows:

The 2025 annual bonuses for our named executive officers are also listed under the heading “Executive Compensation—Summary Compensation Table” and were paid in the first quarter of 2026. For executives to be eligible to receive their annual bonus, they must be employed on the date the bonus is actually paid.

2026 Bonus

The Compensation Committee believes that the payment of an annual company bonus based upon the achievement of company goals is an appropriate way to reward our named executive officers for meeting performance objectives while also achieving desired levels of company profitability. For 2026, the Compensation Committee is replacing the Legacy Bonus Program with a new bonus program for

(non-Sales)

vice presidents and above (the “Executive Bonus Plan”), including our named executive officers. This new Executive Bonus Plan will tie the annual cash bonus solely to three financial metrics: (i) Revenue; (ii) Adjusted Operating Expense (which is a

non-GAAP

financial measure calculated as operating expense adjusted for amortization of acquisition-related intangible assets, as well as, if applicable, restructuring charges, reorganization charges, acquisition and integration costs and

discrete events); and (iii) Adjusted EBITDA Percentage. The portion of the executive’s bonus tied to each metric will be approximately equal. An executive can earn between 0% and 200% of his or her target bonus depending on the company’s performance relative to a minimum threshold, target (100%) and maximum threshold for each metric. For clarity, beginning in 2026, no executive will be able to earn more than 200% of his or her target bonus.

Equity-Based Awards

Cognex’s equity award program is intended to reward a meaningful 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 Committee believes that granting stock options, restricted stock units (RSUs) and performance restricted stock units (PRSUs) is instrumental to our ability to recruit, retain and motivate our high caliber employees.

The Compensation Committee approves the equity awards granted to our named executive officers on an individual basis. Each of our named executive officers participated in our annual equity award program, which was completed in the first quarter of 2025. Mr. Moschner received two additional equity awards in 2025 in connection with his promotion to President and Chief Operating Officer on February 20, 2025, and subsequent appointment to Chief Executive Officer on June 27, 2025. Grant amounts are determined based on, among other factors, Competitive Analysis, levels of responsibility and the desire to retain our most valuable employees. Vesting schedules and expiration dates relating to equity-based awards for our executives were consistent with the majority of grants made to our other employees.

Share Dilution

Each year, Cognex determines the equity-based awards to be granted to current employees 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 dilutive impact of new equity-based grants. In 2025, our equity-based awards consisted of only about 1.6% of our average outstanding shares. We have also reduced share dilution by repurchasing Cognex stock on the open market. As a result, the number of outstanding shares has decreased by about 3.9% from 2022 to 2025. On February 11, 2026, the Board authorized the repurchase of an additional $500,000,000 of Cognex’s common stock in compliance with applicable securities laws. We intend to continue to actively manage our use of shares to offset dilution over the long term.

Equity Grant Practices

Annual grants of equity awards to our named executive officers are approved by the Compensation Committee at a

pre-scheduled

meeting in the first quarter of the fiscal year, and

new-hire,

promotional or special recognition equity grants are generally made on a quarterly basis. Our general 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 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.

During fiscal 2025, no executive officer received a grant of stock options during the period beginning four business days before, and ending one business day after, the filing of a periodic report on Form

10-Q

or

Form 10-K,

or the filing or furnishing of a current report on Form

8-K

that discloses material nonpublic information.

Stock Options and Restricted Stock Units

In 2025, as part of our annual equity award program each of our named executive officers was eligible to receive an annual grant of (i) stock options that generally vest over a period of five years of continuous employment (20% per year), (ii) RSUs that vest over a period of three years of continuous employment (20% in year one, 30% in year two, and 50% in year three), and (iii) PRSUs based on a target Adjusted EBITDA Margin Percentage over a three-year measurement period. These executives received equity awards in terms of total economic value (based on grant date fair value) whereby

of the economic value was represented by stock options,

of the economic value was represented by RSUs, and

of the economic value was represented by PRSUs. For example, if an executive received an annual equity award worth $1,500,000 on the grant date, such award would consist of stock options with a grant date fair value of ~$500,000, RSUs with a grant date fair value of ~$500,000, and PRSUs with a grant date fair value of ~$500,000. In addition to participating in Cognex’s annual equity award program, Mr. Moschner received a

option award in connection with his promotion to President and Chief Operating Officer, and a

option award in connection to

his

appointment to Chief Executive Officer.

Although the company is awarding fewer stock options than in years past, Cognex continues to grant more stock options than many of its peers. The Compensation Committee continues to utilize stock options because, upon vesting, stock options have zero value to the executive unless value has been created for shareholders following the grant date (by virtue of stock price appreciation). Cognex continues to believe that executives who hold a significant number of stock options are highly motivated to build shareholder value and improve corporate performance over the long term. We believe that this equity compensation model has allowed us to recruit, retain and motivate our senior employees. That being said, the Compensation Committee acknowledges that market volatility is not always dispositive of actual operating performance and, therefore, continues to decrease the number of stock options executive officers receive relative to the officer’s total equity-based award.

Performance Restricted Stock Units (“PRSUs”)

Prior to 2025, only the Chief Executive Officer had received PRSUs that vested based upon relative total shareholder return (“TSR”). In 2025, the Compensation Committee expanded the use of PRSUs beyond the Chief Executive Officer to include our executive officers, including our named executive officers. In addition, the Compensation Committee replaced the PRSU relative TSR metric with Adjusted EBITDA Percentage as described below because the Compensation Committee acknowledged that market volatility is not always dispositive of actual operating performance.

For PRSUs granted in 2025, the number of PRSUs that vest will be determined following a three-year performance measurement period ending December 31, 2027, and will equal the executive’s target award multiplied by the Performance Multiplier. The Performance Multiplier shall be determined as follows:

If the Average Adjusted EBITDA Percentage for the three-year performance measurement period is between 17.1% and 18.9%, or 18.9% and 20.7%, then the Performance Multiplier shall be determined by using linear interpolation, respectively. For clarity, (i) in no event shall the percentage of the target award that vests exceed 120%; and (ii) in the event the Average Adjusted EBITDA Percentage does not exceed 17.1%, no portion of the target award shall vest.

Adjusted EBITDA Percentage is operating income adjusted for amortization of acquisition-related intangible assets and depreciation, as well as, if applicable, restructuring charges, reorganization charges, acquisition and integration costs andone-time discrete events.

The vesting of Mr. Willett’s 2023 and 2024 PRSUs was 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 was 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.

If the company’s TSR ranked between a designated performance percentile, the performance multiplier would be determined using linear interpolation. If the company’s TSR was a negative percentage, regardless of the percentile achieved, the performance multiplier would be capped at 100%. In February 2026, the Compensation Committee determined that zero PRSUs from Mr. Willett’s 2023 PRSU grant would vest due to the company’s TSR percentile being below the 25 th percentile of the PRSU Index TSR at the conclusion of the measurement period.

The Compensation Committee will continue to examine PRSU metrics to help ensure PRSUs further align the interests of our executives with building shareholder value and improving corporate performance over the long term. The vesting of PRSUs in all cases is subject to continued service with the company through the vesting date.

Change of Control Arrangements

Change of control transactions typically represent events where our shareholders are realizing the value of their equity interests in the company. We believe it is appropriate for our named executive officers to share in this realization of shareholder value. 2025 PRSU agreements entered into by Mr. Moschner, Mr. Willett, Mr. Fehr, Ms. DiPalma, Mr. Gerst, and Mr. Kuechen provide that the PRSUs will 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), with such number of vested PRSUs to be calculated based on the applicable performance multiplier period concluding on the date immediately prior to such change of control. The performance multiplier would be based on the Average Adjusted EBITDA Percentage for all applicable years within that period. For example, if a change in control occurs in the first quarter of 2027, the Average Adjusted EBITDA Percentage will be calculated by adding the Adjusted EBITDA Percentage for 2025 and 2026 and dividing the total by two. The earned award (i.e., the Target Award multiplied by the applicable Performance Multiplier) will vest as of the date of the change of control.

As of December 31, 2025, all stock option and (time-based) RSU agreements entered into by Mr. Moschner in February 2025 and May 2025, as well as all stock option and (time-based) RSU agreements entered into by Mr. Fehr, the February 2022, February 2023, February 2024, and February 2025 option and RSU agreements entered into by Ms. DiPalma and Mr. Gerst, the August 2022 option agreement and the February 2023, February 2024, and February 2025 option and RSU agreements entered into by Mr. Kuechen are subject to immediate vesting if there is both a change of control of Cognex, and the respective executive officer’s employment is involuntarily terminated within twelve months following such transaction.