Company: AOSL
Filing Date: 2025-09-18
Form Type: DEF 14A
Source: 0001387467-25-000054
Chunk: 79

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-09-18
Form: DEF 14A
Chunk 79
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 our business objectives and correlate to long-term shareholder value.

• Our performance goals are set at levels that we believe are reasonable in light of past performance and market conditions.

• Long-term equity awards tied to the market price of our common shares represent a significant component of executive officer compensation and promote a commonality of interest between the executive officers and our shareholders in increasing shareholder value.

• The use of restricted share units which provide varying levels of compensation as the market price of the Company’s common shares fluctuates over time mitigates the potential risk that options pose in encouraging risk taking in the short term and are less likely to contribute to excessive risk taking. Furthermore, our equity awards are comprised of time-based and performance-based awards that vest, if at all, over a period of years, and that vesting element encourages the award recipients to focus on sustaining our long-term performance.

• Under the annual cash bonus program, an individual target bonus amount is established for each named executive officer at each level of potential goal attainment. Accordingly, at all levels of performance goal attainment, there are limits in place for the potential bonus payout. In addition, a maximum bonus amount is established for each executive officer such that no executive officer may earn more than a fixed percentage of his or her base salary.

• Our share ownership guidelines require our named executive officers to hold a significant level of our common shares so that each executive has personal wealth tied to the long-term success of the Company and is thereby aligned with shareholders’ interests.

• Our Chief Executive Officer is required to hold at least 50% of the shares issued to him (net of shares withheld to cover taxes) under full value awards (i.e., share awards, performance share awards, restricted share units, and performance share units) for a period of one year which further aligns his interests with shareholders’ interests, as described above in the section titled “Executive Compensation Practices – CEO Post-Vesting Holding Requirement”.

Accordingly, our overall compensation structure is not overly-weighted toward short-term incentives, and the Compensation Committee has taken what it believes are reasonable steps to protect against the potential of disproportionately large short-term incentives that might encourage excessive risk taking.

Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code generally disallows a federal income tax deduction for publicly-traded companies such as the Company for compensation paid to its named executive officers and certain other executive officers to the extent that such compensation exceeds one million dollars per officer in any one year.

While the Compensation Committee considers tax deductibility as one of many factors