COHU INC

Company Overview

Cohu, Inc. is a global supplier of semiconductor test, interface, automation, inspection/metrology and software solutions operating in the Semiconductor Test & Inspection segment. Its product mix spans ATE platforms (Diamond x, PAx), handlers and thermal subsystems (including proprietary T‑Core), interface consumables (contactors, probe heads/pins), vision/metrology (NV‑Core) and analytics/subscription software (DI‑Core), with recurring revenue rising to 65% of sales in 2024. The business is R&D‑intensive (R&D ~21% of sales in 2024), has a significant Asia manufacturing footprint and recent strategic acquisitions (MCT, EQT, Tignis) that broaden automation, consumables and AI analytics capabilities. Cohu is exposed to semiconductor cyclicality, customer concentration, inventory/reserve risk and global trade/export controls, all of which materially affect orders, backlog and near‑term financials.

Executive Compensation Practices

Given Cohu’s business mix and the 2024–2025 MD&A, compensation is likely driven by product development/design‑wins, recurring revenue growth (subscriptions/consumables), gross margin ex‑acquisition amortization, backlog/order intake and operating cash flow or free cash flow to reflect liquidity preservation. In line with Technology / Semiconductor Equipment & Materials peers, pay packages typically combine base salary with annual cash incentives tied to near‑term financial metrics (revenue, margins, cash flow) and equity (time‑vested RSUs and performance‑based awards) to retain engineering and sales talent and align long‑term value creation (e.g., successful integrations of MCT/EQT/Tignis and margin recovery). Management’s emphasis on cost control, restructuring savings and R&D-led product launches suggests performance metrics will include margin improvement, inventory reserve management and successful acquisition integration milestones. Given material amortization and potential impairment/DTA risks, compensation plans may also rely on non‑GAAP measures (gross margin ex‑amortization, adjusted operating income) and include clawback/change‑in‑control provisions common in the sector.

Insider Trading Considerations

Insider activity at Cohu will tend to cluster around high‑information events: quarterly earnings, order/design‑win announcements, large consumable/contact wins, acquisition or integration news, restructuring updates and share‑repurchase program disclosures. The company’s sensitivity to semiconductor capex cycles, backlog volatility, inventory reserve charges and export control developments means insiders may possess material nonpublic information for extended periods, so blackout windows and documented 10b5‑1 plans are especially relevant. Watch Form 4 filings for option exercises, equity grants and insider buys/sells following repurchase programs—insider purchases can signal confidence in a turnaround, while sales near earnings or acquisition closings may reflect timing of vesting or tax planning. Key metrics to monitor that correlate with insider decisions: backlog/order intake, operating cash flow, recurring revenue percentage, R&D/design‑win milestones, gross margin ex‑amortization and inventory reserve activity.