Sensata Technologies Defines Performance Criteria for CEO’s Inducement Equity Awards Under NYSE Rule 303A.08
Sensata Technologies Holding plc (NYSE: ST) announced today the establishment of specific performance benchmarks tied to the performance-based restricted stock units (PRSUs) awarded to the company’s newly appointed Chief Executive Officer, Stephan von Schuckmann. These awards, which had been previously disclosed, are part of a broader compensation package designed to attract and retain top executive leadership, and were issued as a material inducement in connection with Mr. von Schuckmann’s appointment as CEO in January 2025.
The two equity awards granted to Mr. von Schuckmann comprise a total of 150,548 ordinary shares of Sensata Technologies, allocated in two separate PRSU packages covering 20,073 shares and 130,475 shares, respectively. These awards were not granted under the company’s existing 2021 Equity Incentive Plan (the “2021 Plan”), but they are subject to the same terms and conditions that typically govern executive awards under that plan. The awards were issued pursuant to New York Stock Exchange (NYSE) Listed Company Manual Rule 303A.08, which allows companies to grant equity incentives outside of shareholder-approved plans as a material inducement for executive employment.
Performance Metrics Driving PRSU Vesting
The structure of the PRSU awards is grounded in Sensata’s commitment to aligning executive compensation with long-term shareholder value and operational excellence. The PRSUs are designed to vest based on rigorous, multi-year performance outcomes, divided into two key metrics:
- Relative Total Shareholder Return (TSR):
Half of the PRSUs (50%) will vest based on Sensata Technologies’ TSR over a three-year period, measured against a peer group of 12 comparable industrial and technology companies. This relative performance evaluation ensures that Sensata’s leadership is held accountable to external benchmarks and not solely internal milestones. - Return on Invested Capital (ROIC):
The remaining 50% of the PRSUs will vest based on Sensata’s ROIC over the same three-year performance period. ROIC is a critical indicator of how efficiently the company uses its capital to generate returns, and it reflects the long-term value creation strategy driven by the CEO and executive team.
Both metrics are calculated according to detailed methodologies defined within the PRSU award agreements. In the event Sensata’s performance significantly exceeds the predefined targets, the awards can vest at up to 150% of the original grant amount. This feature provides an upside incentive for extraordinary performance, aligning Mr. von Schuckmann’s compensation with superior shareholder outcomes.
Provisions for Termination Scenarios
The PRSU awards also include specific provisions for potential employment termination events. According to the terms outlined in Mr. von Schuckmann’s employment agreement, if his employment with Sensata is involuntarily terminated without cause or he voluntarily resigns for good reason, as defined in his contract, the vesting of the PRSUs will be accelerated. In such a case, the number of shares vested will be based on the greater of the target amount or actual performance up to the date of termination, subject to the determination of Sensata’s Compensation Committee.
This structure is designed to ensure a fair and competitive treatment of equity awards in the case of an unexpected leadership change, while maintaining performance accountability.
Compliance with NYSE and Corporate Governance Standards
While the awards are governed by the terms of Sensata’s 2021 Equity Incentive Plan, they were issued outside of that plan in accordance with NYSE Listed Company Manual Rule 303A.08. This rule allows companies to issue equity-based awards as a material inducement to new executives without shareholder approval, provided the details are publicly disclosed in a timely manner.
The inducement grant approach is commonly used across publicly traded companies to attract highly qualified executives in competitive labor markets. Sensata’s use of this mechanism underscores its strategic focus on securing experienced leadership capable of driving innovation, operational excellence, and growth in an increasingly complex global environment.
Background on Stephan von Schuckmann
Mr. von Schuckmann joined Sensata Technologies as CEO in January 2025, bringing with him extensive leadership experience in automotive technology, electrification, and digital transformation. Prior to joining Sensata, he held senior leadership roles at ZF Friedrichshafen AG, a global leader in driveline and chassis technology. His appointment signaled Sensata’s strategic pivot toward advancing its capabilities in electrification, connected vehicles, and smart sensor technologies.
The decision to tie a substantial portion of Mr. von Schuckmann’s compensation to multi-year performance targets reflects the Board’s confidence in his ability to deliver long-term value while navigating complex global market conditions. Sensata’s emphasis on ROIC and relative TSR as performance indicators also demonstrates a clear alignment with shareholder interests and capital discipline.
Investor and Governance Implications
The transparent disclosure of performance criteria associated with these PRSU awards is part of Sensata’s broader commitment to strong corporate governance practices. Executive compensation continues to be a focal point for institutional investors and proxy advisory firms, who expect public companies to maintain clear links between pay and performance. By establishing measurable and challenging goals for vesting, Sensata reinforces its accountability to investors.
Moreover, the company’s use of inducement grants under NYSE Rule 303A.08, paired with performance hurdles and clawback provisions consistent with the 2021 Plan, signals a robust and disciplined approach to executive compensation strategy.
As Sensata Technologies continues its transformation into a more agile, innovative, and diversified industrial technology leader, the leadership of Mr. von Schuckmann will play a pivotal role. The PRSU awards announced today provide both the incentives and accountability necessary for a CEO tasked with steering the company through a dynamic technological and economic landscape.
The next several years will reveal the full impact of this performance-based compensation structure, as investors track both the company’s financial results and its relative performance in the market. Sensata’s approach sets a high bar for executive leadership and positions the company for sustained growth and innovation in the years to come.
