Company: AAOI
Filing Date: 2025-04-18
Form Type: PRE 14A
Source: 0001104659-25-036344
Chunk: 33

Company: APPLIED OPTOELECTRONICS, INC.
Filing Date: 2025-04-18
Form: PRE 14A
Chunk 33
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ominated in NTD (New Taiwan dollars) and RMB (Chinese Yuan Renminbi) on the date the increase was approved), due to the market study by Aon which presented a below market cash basis for our executives. • Annual Cash Bonuses — Established two targets based on critical business objectives that were rigorous, aggressive, and challenging. • Long-Term Incentive Compensation — Established performance-based and time-based equity grants. The performance-based awards have a minimum, reduced, target and maximum award levels for each of our executive officers based on a dollar value with performance goals based on the attainment of a stock price hurdle and TSR over a three-year period compared to the Company’s peer group. The compensation committee set the total target pay mix set for our CEO and our other NEOs as follows: Say-on-Pay Vote and Stockholder Engagement on Compensation Our say-on-pay resolution received 90.17% approval at our 2024 annual meeting of stockholders (the “2024 Annual Meeting”). The compensation committee interpreted stockholder approval of the executive compensation program at such a high level as indicating that a substantial majority of stockholders viewed the Company’s executive compensation program, plan design and governance as continuing to be well aligned with stockholder interests, their investor experience and business outcomes. 22

TABLE OF CONTENTS

Elements of 2024 Compensation Program We structure the annual compensation of our NEOs using three principal elements: base salary, annual performance-based cash bonus opportunities, and time-based and performance-based equity opportunities. The compensation committee retains the flexibility to change the proportions as between these elements each year, to allow us to take into account the varying importance of our primary compensation objectives based on facts and circumstances each year.

| Element               | ​ | ​ | Fixed orVariable | ​ | ​ | Purpose                                                                                                                                                                                                                                                     | ​ |
| Base Salary           | ​ | ​ | Fixed            | ​ | ​ | To attract and retain executives by offering fixed compensation that is competitive with market opportunities and that recognizes each executive’s position, role, responsibility, and experience.                                                          | ​ |
| Annual Cash Incentive | ​ | ​ | Variable         | ​ | ​ | To attract and retain our executive officers consistent with market practice, to reward our executive officers for achievement of our corporate objectives, and to recognize outstanding individual contributions.                                          | ​ |
| Equity Awards         | ​ | ​ | Variable         | ​ | ​ | To align executives’ interests with the long-term interests of stockholders through equity-based compensation with performance-based and time-based vest