ipgp-20240506

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Rule 14a-101)

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.__ )


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CHECK THE APPROPRIATE BOX:
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¨						Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ						Definitive Proxy Statement
¨						Definitive Additional Materials
¨						Soliciting Material Pursuant to Section 240.14a-12

IPG Photonics Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)


Payment of Filing Fee (Check all boxes that apply):
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Notice of Annual Meeting of Stockholders



DATE AND TIME June 18, 2024 10:00 a.m. (Eastern Time)	LOCATION IPG Photonics Corporation 377 Simarano Drive Marlborough, Massachusetts 01752	WHO CAN VOTE Only stockholders of record at the close of business on April 29, 2024 may vote at the Annual Meeting

Voting Items

Proposals

Board Vote Recommendation

For Further Details

Election of eleven directors named in this proxy statement

FOR each nominee

Page 8

Advisory Vote to Approve our Executive Compensation

FOR

Page 33

Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024

FOR

Page 53

Stockholders will also transact any other business that may properly come before the meeting.

You may vote on these matters in person or by proxy. Whether or not you plan to attend the Annual Meeting, we ask that you promptly vote your shares.

By order of the Board of Directors

IPG PHOTONICS CORPORATION

ANGELO P. LOPRESTI
Secretary

April 29, 2024

Marlborough, Massachusetts

How to Vote



INTERNET Go to www.investorvote.com/ipgp or scan the QR code contained in the attached proxy card	TELEPHONE 1-800-652-VOTE (8683)	MAIL Mark, sign, date and promptly mail the enclosed proxy card in the postage-paid envelope



As permitted by the rules of the United States Securities and Exchange Commission (the “SEC”), we are making this Proxy Statement and Annual Report on Form 10-K available to stockholders electronically via the Internet at investor.ipgphotonics.com. On or about May 9, 2024, we will mail to most of our stockholders a notice (the “Notice”) containing instructions on how to access this Proxy Statement and our Annual Report and to vote via the Internet or by telephone. Other stockholders, in accordance with their prior requests, will receive e-mail notifications of how to access our proxy materials and vote via the Internet or by telephone, or will be mailed paper copies of our proxy materials and a proxy card on or about May 9, 2024.

2024 Annual Letter

We continue to focus on our strategy to diversify revenue away from flat sheet cutting in China and grow new products and applications by disrupting existing laser and non-laser technologies. We have a large addressable market in materials processing applications with continued adoption of lasers, and are also exploring new markets and applications where fiber lasers can replace existing tools by improving efficiency, productivity, or enabling technological breakthroughs for our customers. Our technologies are highly relevant to major macro trends, including automation and customer focus on increasing efficiency and reducing environmental impacts.

Our total revenue declined 10% in 2023 as global uncertainties continued to impact industrial demand and capital spending around the world. Revenue in China declined 26% and revenue outside of China was down 2%. I am pleased that revenue in all of our focus areas, such as welding, e-mobility and medical delivered another year of growth and record results. Emerging growth product sales contributed 46% of our total revenue at the end of 2023, unchanged compared to the prior year. Demand for many of these products is driven by global investments in e-mobility and renewable energy, which weakened as the year unfolded. Additionally, sales in flat sheet cutting applications continued to decline as a result of low end-market demand and increased competition in China.

Welding was IPG’s largest application and grew 13% year over year. Welding sales benefited from a rollout of the handheld welder in Europe and increasing adoption of the real-time monitoring and integrated laser welding systems by customers. We are expecting that the adoption will continue this year as laser welding is capable of replacing traditional welding across most industries by providing higher quality and faster process for a broad range of materials.

In e-mobility, IPG remains well positioned to benefit from a global build-out of battery capacity for electric vehicles and our e-mobility sales increased to a new record level and accounted for slightly more than 20% of the total revenue as growth picked up in the U.S., Japan and Korea. We remain optimistic about continued adoption of electric vehicles worldwide and additional investments in battery production in the future. Medical also delivered record revenue, increasing sales by 2% despite inventory management by a large customer. The growth was driven by higher demand outside of North America and growth in disposable medical fibers. We are working on a number of new products that we expect to come to market in the next 2-3 years.

A number of our applications are driven by environmental benefits. Our laser cleaning continued to gain momentum. Laser cleaning is a more environmentally friendly alternative to chemicals and blast media, so many customers are looking at this technology to comply with new regulations. Additionally, we launched a new surface treatment application this year, laser drying, which is built to replace conventional ovens and save energy costs, targeting customers in e-mobility, coatings, and food processing industries.

IPG continued to generate strong cash flow. We finished the year with approximately $1.2 billion in cash and no debt. In 2023, we spent $99 million on research and development and $79 million on net investment in capital expenditures. At the same time, we continued to return capital to shareholders through share repurchases and bought back $223 million of IPG stock.

I would like to thank our dedicated team for continued effort overcoming challenging market conditions and delivering strong execution in a weak environment.

We continue to focus on our strategy to diversify revenue and grow new products and applications by disrupting existing laser and non-laser technologies.

I am pleased that revenue in all of our focus areas, such as welding, e-mobility and medical delivered another year of growth and record results.

EUGENE SCHERBAKOV, PH.D.

Chief Executive Officer

April 29, 2024

2 NOTICE OF 2024 ANNUAL MEETING AND PROXY STATEMENT

Table of Contents


			Page
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS			1
202 4 ANNUAL LETTER			2
ABOUT IPG			4
PROXY STATEMENT VOTING ROADMAP			5
PROPOSAL 1: ELECTION OF ELEVEN DIRECTOR S			8
Director Qualifications			9
Director Nominees			11
CORPORATE GOVERNANCE			17
Board Practices, Policies and Processes			18
Board Roles and Responsibilities			21
Board Structure			24
Standing Committees and Board Committee Membership			25
DIRECTORS			27
Board Refreshment and Composition			27
Director Compensation			30
PROPOSAL 2: ADVISORY VOTE TO APPROV E OUR EXECUTIVE COMPENSATION			33
Compensation Discussion and Analysis			34
202 3 Compensation of Named Executive Officers			36
Compensation Committee Report			45
Executive Compensation Tables			46
PROPOSAL 3: RATIFY DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2024			53
OTHER INFORMATION			55
Audit Committee Report			55
Common Stock Ownership			56
CEO Pay Ratio			58
Pay Versus Performance			59
Questions and Answers About the Meeting and Voting			63
Additional Information			67



This Proxy Statement contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and we intend that such forward-looking statements be subject to the safe harbors created thereby. For this purpose, any statements contained in this Proxy Statement except for historical information are forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. The forward-looking statements included herein are based on current expectations of our management based on available information and involve a number of risks and uncertainties, all of which are difficult or impossible to accurately predict and many of which are beyond our control. As such, our actual results may differ significantly from those expressed in any forward-looking statements. Factors that may cause or contribute to such differences include, but are not limited to, those discussed in more detail in the section titled “Risk Factors” and elsewhere in our Annual Report and other filings with the SEC. We undertake no obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

About IPG


Financial Performance Highlights


NET SALES			OPERATING INCOME


Welding Revenue			Return of Capital to Stockholders
			$223M Repurchased 2.1 million shares

•Net sales declined 10% in 2023 due to lower industrial demand around the world and continued challenging operating environment in China. The strength of the U.S. dollar reduced net sales by 2%.

•Welding revenue reached a new record, remaining our largest application and contributing 36% of our total revenue in 2023. We benefited from growth in e-mobility, increased sales in handheld welder and further adoption of real-time monitoring by customers.

•Emerging growth products contributed 46% of total revenue in the fourth quarter of 2023, unchanged compared to the prior year, impacted by slowdown in global investments in e-mobility and renewable energy in the second half of the year.

•Gross margin increased in 2023, driven by the absence of inventory provisions and related charges that negatively impacted gross margin in 2022.

•Cash flow increased in 2023 with IPG generating operating net cash of $296.0 million an increase of $83.4 million over 2022.

•IPG finished the year with a strong balance sheet, with cash, cash equivalents and short-term investments of $1.2 billion as of December 31, 2023.

•IPG returned $223 million to stockholders, continuing to repurchase shares opportunistically.

4 NOTICE OF 2024 ANNUAL MEETING AND PROXY STATEMENT

Proxy Statement Voting Roadmap

This voting roadmap highlights information available within our proxy statement.

Proposal
1

Election of Eleven Directors

The Board has nominated the following 11 individuals for election to the Board:

☑

The Board recommends a vote FOR each director nominee named in this Proxy Statement.

Gregory Beecher

Michael Child

Jeanmarie Desmond

Gregory Dougherty

Mark Gitin

Kolleen Kennedy

Eric Meurice

Natalia Pavlova

John Peeler

Eugene Scherbakov

Agnes Tang

See page 8

Director Nominee Qualifications and Attributes


DIRECTOR INDEPENDENCE	BOARD REFRESHMENT	AGE	GENDER DIVERSITY


8/11 directors nominees are independent*	8 years Average Tenure	63 years Average Age	36% Female

* Audit, Compensation and Nominating and Corporate Governance Committees are composed entirely of independent directors.

As announced by the Company on April 30, 2024, Dr. Mark Gitin has been appointed CEO of the Company, with employment commencing on June 5, 2024. Dr. Gitin will join the Board on such date effective on the start of his employment, which is expected prior to the annual meeting of stockholders.

Key Skills and Experience

Lasers and

Technology

Risk
Management

Global

Business

Executive
Leadership

Manufacturing

and Operating

Business
Development
and M&A

See page 9 for a matrix of the nominees' individual strategic skills and core competencies.

Proxy Statement Voting Roadmap

Proposal
2

Advisory Vote to Approve Our Executive Compensation

☑

The Board recommends a vote FOR Proposal 2

See page 33

2023 Executive Compensation Highlights

As further discussed in Compensation Discussion and Analysis starting on page 34, the guiding principles of our executive compensation philosophy are pay-for-performance, accountability for annual and long-term performance, alignment with stockholders’ interests, and providing competitive pay to attract and retain executives. The 2023 compensation program for our named executive officers ("NEOs") had three primary components: annual base salary, annual cash incentives and long-term equity incentives. The amounts below illustrate the allocation of fiscal 2023 compensation components at target for our Chief Executive Officer ("CEO") and the average for our other NEOs as a group.

CEO

NEOs

Stockholder-Minded Compensation Practices



PRACTICES WE EMPLOY						PRACTICES WE AVOID

ü Align our officer pay with performance ü Balance annual and long-term incentives ü Use long-term incentives to link executive pay to Company performance ü Caps on annual incentive compensation and performance-based equity payouts ü Annual risk assessment of compensation program ü Independent compensation consultant ü Stock ownership requirements ü Clawbacks on executive compensation ü Anti-pledging policy ü Anti-hedging policy applicable to all employees and directors						û No guaranteed annual bonuses û No excise tax gross-ups for change in control payouts û No excessive perquisites û No severance for “cause” terminations û No single-trigger change in control payments or benefits û No stock option repricing without stockholder approval û No supplemental executive retirement plans, executive pensions or excessive retirement benefits

6 NOTICE OF 2024 ANNUAL MEETING AND PROXY STATEMENT

Proxy Statement Voting Roadmap

Proposal
3

Ratify Deloitte & Touche LLP as Our Independent Registered Public Accounting Firm for 2024

☑

The Board recommends a vote FOR Proposal 3

See page 53

The Audit Committee has appointed Deloitte & Touche LLP, an independent registered public accounting firm, as the independent auditors to perform an audit of the Company's consolidated financial statements and internal control over financial reporting for the year ended December 31, 2024. The Board believes obtaining stockholder ratification of the appointment is a sound corporate governance practice and recommends that stockholders ratify the appointment of Deloitte & Touche LLP because it continues to perform at a high level and remains independent and objective.



Proposal 1			Election of Eleven Directors

Stockholders are being asked to elect the following 11 directors to terms ending with the annual meeting to be held in 2025, until a successor is elected and qualified or until his or her earlier death, resignation or removal. The Board nominated each of these individuals for election at the 2024 annual meeting of stockholders upon the recommendation of the Nominating and Corporate Governance Committee (the “NCGC"). Each nominee, other than Dr. Gitin, is currently a director of our Company. As announced by the Company on April 30, 2024, Dr. Gitin has been appointed CEO of the Company, with employment commencing on June 5, 2024. Dr. Gitin will also join the Board on the such date, subject to commencing employment as CEO. If Dr. Gitin does not commence employment as CEO of the Company, the Board will remove Dr. Gitin as a director nominee and will file a supplement to these proxy materials announcing the same. All of the director nominees set forth in the proxy card have consented to being named in this Proxy Statement and to serving if elected. Please see the following pages for additional information on the director nominees.

Director Nominees

Committee Membership

Name and Principal Occupation

Age

Director Since

NCGC

Gregory Beecher IND

Former CFO, Teradyne, Inc.

2023

●

Michael Child IND

Senior Advisor, T.A. Associates, Inc.

2000

●

Jeanmarie Desmond IND

Former EVP and CFO, DuPont de Nemours, Inc.

2021

●

Gregory Dougherty IND

Former CEO, Oclaro, Inc.

2019

●

Mark Gitin, Ph.D.

Chief Executive Officer elect

2024*

Kolleen Kennedy IND

Former President, Proton Solutions & Chief Growth Officer at Varian Medical Systems

2023

Eric Meurice IND

Former President, CEO and Chairman, ASML Holding NV

2014

●

Natalia Pavlova

Significant stockholder

2021

John Peeler IND, Non-Executive Chair of the Board

Former Chairman and CEO, Veeco Instruments, Inc.

2012

●

Eugene Scherbakov, Ph.D.

Chief Executive Officer

2000

Agnes Tang IND

Partner, Ducera Partners LLC

2022

●


AC Audit Committee	●	Chair
CC Compensation Committee	●	Member
NCGC Nominating and Corporate Governance Committee	*	Appointment expected on June 5, 2024
IND Independent director under Nasdaq and SEC rules

8 NOTICE OF 2024 ANNUAL MEETING AND PROXY STATEMENT


Director Qualifications

The NCGC is responsible for identifying and evaluating nominees for director and for recommending to the Board a slate of nominees for election at the Annual Meeting. In considering each director nominee and the composition of the Board as a whole, the NCGC evaluates members based on their expertise and diverse perspectives, experiences, qualifications, attributes and skills because the NCGC believes that these attributes enable a director nominee to make significant contributions to the Board, IPG and our stockholders.

The following chart summarizes the strategic skills and experience that the Board considers valuable to effective governance and successful oversight of our corporate strategy and illustrates how the director nominees individually and collectively represent these key skills and experiences. Descriptions of the skills and experience are on the following page. The lack of an indicator for a particular item does not mean that the director does not possess that skill or experience; rather, the indicator represents that the item is a core skill or experience of that director. The chart also provides the personal attributes of the director nominees.

SEC Form DEF 14A filed by IPG Photonics Corporation