UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

(Rule 14A-101)

INFORMATION REQUIRED IN

PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant  ☑                            Filed by a Party other than the Registrant  ☐

Check the appropriate box:

MKS INSTRUMENTS, INC.

2 Tech Drive, Suite 201

Andover, Massachusetts 01810

March 26, 2021

Dear Shareholder:

You are cordially invited to attend the 2021 Annual Meeting of Shareholders of MKS Instruments, Inc. to be held on Tuesday, May 11, 2021 at 10:00 a.m., Eastern Time, which is being held in a virtual-only meeting format at www.virtualshareholdermeeting.com/MKSI2021 due to the public health impact of the ongoing COVID-19 pandemic and continued governmental restrictions limiting the number of people who may gather together.

The attached notice of Annual Meeting and proxy statement describe the business to be transacted at the Annual Meeting and provide additional information about us that you should know when voting your shares. The principal business at the Annual Meeting will be (i) the election of three Class I Directors, each for a three-year term, (ii) the approval, on an advisory basis, of executive compensation and (iii) the ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2021.

Whether or not you plan to attend the Annual Meeting, please carefully review the attached proxy materials and take the time to cast your vote.

On behalf of MKS, I would like to express our appreciation for your continued interest in our Company.

Sincerely,

JOHN T.C. LEE

President and Chief Executive Officer

MKS INSTRUMENTS, INC.

2 Tech Drive, Suite 201

Andover, Massachusetts 01810

NOTICE OF 2021 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON MAY 11, 2021

To our Shareholders:

The 2021 Annual Meeting of Shareholders of MKS INSTRUMENTS, INC., a Massachusetts corporation, will be held on Tuesday, May 11, 2021 at 10:00 a.m., Eastern Time, in a virtual-only meeting format at www.virtualshareholdermeeting.com/MKSI2021, for the following purposes:

The shareholders will also act on any other business as may properly come before the meeting.

The Annual Meeting is being held in a virtual-only meeting format due to the public health impact of the ongoing COVID-19 pandemic and continued governmental restrictions limiting the number of people who may gather together.

We provide access to our proxy materials over the Internet under the U.S. Securities and Exchange Commission’s “notice and access” rules. As a result, we mail to our shareholders a Notice of Internet Availability of Proxy Materials, which we refer to as the Notice. We are mailing the Notice on or about March 26, 2021, and it contains instructions on how to access the proxy statement and our Annual Report for the fiscal year ended December 31, 2020, which we refer to as the 2020 Annual Report, over the Internet. The Notice also contains instructions on how each of our shareholders can receive a paper copy of our proxy materials, including this proxy statement, our 2020 Annual Report, and a form of proxy card or voting instruction card. All shareholders who do not receive the Notice, including shareholders who have previously requested to receive paper copies of proxy materials, will receive a paper copy of the proxy materials by mail unless they have previously requested delivery of proxy materials electronically.

The Board of Directors has fixed the close of business on March 3, 2021 as the record date for the determination of shareholders entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof. Your vote is important no matter how many shares you own. Whether or not you expect to attend the meeting, we urge you to vote your shares.

If you are a shareholder of record, you may vote by using the Internet as described in the instructions included in your Notice, by calling the toll-free telephone number, or, if you received a paper copy of the proxy materials, by completing, signing, dating and returning your proxy card or voting instruction card. Your prompt response is necessary to ensure that your shares are represented at the meeting. You can change your vote and revoke your proxy any time before the polls close at the meeting by following the procedures described in the accompanying proxy statement.

If your shares are held by a broker, bank or other nominee, you may vote by following the instructions your broker, bank or other nominee provides to you.

By Order of the Board of Directors,

KATHLEEN F. BURKE

Secretary

Andover, Massachusetts

March 26, 2021

TABLE OF CONTENTS

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MKS INSTRUMENTS, INC.

2 Tech Drive, Suite 201

Andover, Massachusetts 01810

PROXY STATEMENT

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of MKS Instruments, Inc., a Massachusetts corporation, for use at the 2021 Annual Meeting of Shareholders to be held on May 11, 2021 at 10:00 a.m., Eastern Time, in a virtual-only meeting format at www.virtualshareholdermeeting.com/MKSI2021, and at any adjournment or postponement thereof, which we refer to as the 2021 Annual Meeting. References in this proxy statement to “we,” “us,” the “Company” or “MKS” refer to MKS Instruments, Inc. and its consolidated subsidiaries.

All proxies will be voted in accordance with the applicable shareholder’s instructions. If no choice is specified in the proxy, the shares will be voted in favor of the matters set forth in the accompanying Notice of 2021 Annual Meeting of Shareholders. Any proxy may be revoked by a shareholder at any time before its exercise by delivery of written revocation to the Secretary of MKS or by voting during the 2021 Annual Meeting. Attendance at the 2021 Annual Meeting will not in itself be deemed to revoke a proxy.

We provide access to our proxy materials over the Internet under the “notice and access” rules of the U.S. Securities and Exchange Commission, which we refer to as the SEC. As a result, we mail to our shareholders a Notice of Internet Availability of Proxy Materials, which we refer to as the Notice. We are mailing the Notice on or about March 26, 2021, and it contains instructions on how to access the proxy statement and our Annual Report for the fiscal year ended December 31, 2020, which we refer to as the 2020 Annual Report, over the Internet. The Notice also contains instructions on how each of our shareholders can receive a paper copy of our proxy materials, including this proxy statement, our 2020 Annual Report, and a form of proxy card or voting instruction card. All shareholders who do not receive the Notice, including shareholders who have previously requested to receive paper copies of proxy materials, will receive a paper copy of the proxy materials by mail unless they have previously requested delivery of proxy materials electronically.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 11, 2021

This proxy statement and the 2020 Annual Report are available for viewing, printing and downloading at investor.mksinst.com/annual-meeting-materials.

A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2020 AS FILED WITH THE SEC, EXCLUDING EXHIBITS, WILL BE FURNISHED WITHOUT CHARGE TO ANY SHAREHOLDER UPON WRITTEN REQUEST TO: INVESTOR RELATIONS DEPARTMENT, MKS INSTRUMENTS, INC., 2 TECH DRIVE, SUITE 201, ANDOVER, MA 01810. EXHIBITS WILL BE PROVIDED UPON WRITTEN REQUEST AND PAYMENT OF AN APPROPRIATE PROCESSING FEE.

VOTING OF SECURITIES AND VOTES REQUIRED

At the close of business on March 3, 2021, the record date for the determination of shareholders entitled to notice of, and to vote at, the 2021 Annual Meeting, there were issued and outstanding and entitled to vote 55,255,097 shares of our common stock, no par value per share, which we refer to as our Common Stock. Each outstanding share entitles the record holder to one vote on each matter submitted at the 2021 Annual Meeting.

In order to transact business at the 2021 Annual Meeting, we must have a quorum. Under our Amended and Restated By-Laws, the holders of a majority of the shares of Common Stock issued and outstanding and entitled to vote at the 2021 Annual Meeting shall constitute a quorum for the transaction of business at the 2021 Annual Meeting. Shares of Common Stock held by shareholders present at the 2021 Annual Meeting or represented by proxy (including “broker non-votes” and shares that abstain or do not vote with respect to a particular proposal to be voted upon) will be counted for purposes of determining whether a quorum exists at the 2021 Annual Meeting. If a quorum is not present, the meeting will be adjourned until a quorum is obtained.

The affirmative vote of the holders of a plurality of the votes cast on the matter is required for the election of directors (Proposal One); provided, however, any director nominee who receives a greater number of withhold votes than affirmative votes, which we refer to as a Majority Withhold Vote, in an uncontested election must offer to tender to the Board of Directors his or her resignation promptly following the certification of election results. The Board of Directors must accept or reject a resignation within 90 days following the certification of election results and publicly disclose its decision. Accordingly, the nominees who receive the highest number of votes of the shares present, in person or by proxy, and entitled to vote shall be elected to the available Class I Director positions, and in the event any nominee receives a Majority Withhold Vote, the resignation policy will apply as summarized here and as set forth in Section B.4 of our Corporate Governance Guidelines, which are posted on our website at investor.mksinst.com in the Corporate Governance tab. The advisory vote on executive compensation (Proposal Two) and the ratification of PricewaterhouseCoopers LLP (Proposal Three) require the affirmative vote of the holders of a majority of the votes cast on the matter. Proposal Two is a non-binding proposal.

Shares held by shareholders who abstain from voting as to a particular matter, and “broker non-votes,” which are shares held in “street name” by banks, brokers or other nominees who indicate on their proxies that they do not have discretionary authority to vote such shares as to a particular non-routine matter, including the election of directors and the advisory vote on executive compensation, will not be counted as votes in favor of, or as votes cast for, a matter. Accordingly, abstentions and broker non-votes will have no effect on the voting on a matter that requires the affirmative vote of a majority of the votes cast on the matter. If the shares you own are held in street name by a bank, brokerage firm or other nominee, your bank, brokerage firm or other nominee, as the record holder of your shares, is required to vote your shares according to your instructions. In order to vote your shares, you will need to follow the instructions your bank, brokerage firm or other nominee provides to you.

For additional details about voting and attending the 2021 Annual Meeting, please see “Voting and Meeting Information” below.

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VOTING AND MEETING INFORMATION

The following sections provide additional details about voting and attending the 2021 Annual Meeting.

Attending the 2021 Annual Meeting

To be admitted to the 2021 Annual Meeting, you will need to log-in at www.virtualshareholdermeeting.com/MKSI2021 using the 16-digit control number found on your proxy card or voting instruction card.

The live audio webcast of the 2021 Annual Meeting will begin promptly at 10:00 a.m. Eastern Time. Online access to the audio webcast will open 15 minutes prior to the start of the 2021 Annual Meeting to allow time for you to log-in and test your device’s audio system. The virtual 2021 Annual Meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most updated version of the applicable software and plugins. You should ensure you have a strong Internet connection wherever you intend to participate in the 2021 Annual Meeting. You should also allow plenty of time to log-in and ensure that you can hear streaming audio prior to the start of the 2021 Annual Meeting. If you encounter any technical difficulties, please refer to “Technical Assistance” below.

Voting Prior to the Annual Meeting

Internet

You may vote your shares in advance of the 2021 Annual Meeting via the Internet by accessing our online portal at www.proxyvote.com. Proxies submitted over the Internet must be received by 11:59 p.m. Eastern Time on May 10, 2021.

Telephone

You may vote your shares in advance of the 2021 Annual Meeting telephonically by calling 1-800-690-6903 and following the instructions on your proxy card. Proxies submitted by telephone must be received by 11:59 p.m. Eastern Time on May  10, 2021.

Mail

If you received a paper copy of the proxy materials, you may vote your shares in advance of the 2021 Annual Meeting by completing, signing, dating and returning your proxy card or voting instruction card. Proxies submitted via mail must be received by May  10, 2021.

Voting at the Annual Meeting

You may vote your shares during the 2021 Annual Meeting (up until the closing of the polls) by following the instructions that will be available at www.virtualshareholdermeeting.com/MKSI2021. If you have previously submitted your proxy and you vote your shares in accordance with these instructions during the meeting, your previously submitted proxy will be revoked.

Voting Shares Held in “Street Name”

If the shares you own are held in “street name” by a bank, broker or other nominee, your bank, broker or other nominee will provide a vote instruction form to you with this proxy statement, which you may use to direct how your shares will be voted. You must instruct your bank, broker or other nominee how to vote with respect to the election of directors and the executive compensation advisory vote; your bank, broker or other nominee cannot exercise its discretion to vote on these matters on your behalf. Many banks and brokers also offer the option of voting over the Internet or by telephone, instructions for which would be provided by your bank or broker on your vote instruction form.

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Submitting Questions at the Annual Meeting; Rules of Conduct

If you wish to submit a question at the 2021 Annual Meeting, you may do so by logging in at www.virtualshareholdermeeting.com/MKSI2021, typing your question into the “Ask a Question” field, and clicking “Submit” beginning 15 minutes prior to, and during, the 2021 Annual Meeting. Appropriate questions related to the business of the 2021 Annual Meeting will be answered during the 2021 Annual Meeting, subject to time constraints. Any such questions that cannot be answered during the 2021 Annual Meeting due to time constraints will be posted and answered at investor.mksinst.com/annual-meeting-materials as soon as practical after the 2021 Annual Meeting. Additional information regarding the ability of shareholders to ask questions during the 2021 Annual Meeting and related rules of conduct will be available at www.virtualshareholdermeeting.com/MKSI2021.

Proxy Materials

You can view and download our proxy materials and 2020 Annual Report at our online portal, available to shareholders at www.proxyvote.com.

Shareholder List

During the 2021 Annual Meeting, a complete list of our shareholders of record will be available for viewing by shareholders for any purpose germane to the 2021 Annual Meeting at www.virtualshareholdermeeting.com/MKSI2021. A list of our registered holders as of the close of business on the record date will be made available to shareholders promptly after the record date and prior to the meeting; to access such list of registered holders, email Kathleen F. Burke, Esq., Senior Vice President, General Counsel and Secretary of the Company, at Kathleen.Burke@mksinst.com. Shareholders submitting any such request will be asked to include the 16-digit control number found on their proxy card, voting instruction card or Notice.

Technical Assistance

If you encounter any difficulties accessing the 2021 Annual Meeting, please call the technical support number that will be posted at www.virtualshareholdermeeting.com/MKSI2021.

We hope that shareholders will attend the 2021 Annual Meeting. Whether or not you plan to attend, we urge you to vote your shares over the Internet or by telephone, or complete, date, sign and return the proxy card in the accompanying postage-prepaid envelope if you received a printed proxy card. A prompt response will greatly facilitate arrangements for the 2021 Annual Meeting and your cooperation will be appreciated. Shareholders who attend the 2021 Annual Meeting may vote their shares at the 2021 Annual Meeting even if they have previously sent in their proxies.

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PROPOSAL ONE – ELECTION OF DIRECTORS

Our Amended and Restated By-Laws provide for a Board of Directors that is divided into three classes. The term of the Class I Directors expires at the 2021 Annual Meeting, the term of the Class II Directors expires at the 2022 Annual Meeting of Shareholders and the term of the Class III Directors expires at the 2023 Annual Meeting of Shareholders. Our Board of Directors, upon the recommendation of our Nominating and Corporate Governance Committee, has nominated Rajeev Batra, Gerald G. Colella and Elizabeth A. Mora to serve as Class I Directors for a term to expire at the 2024 Annual Meeting of Shareholders. Mr. Batra, Mr. Colella and Ms. Mora currently serve as directors. Each nominee has consented to being named herein and, if elected, to serve as a director until his or her successor is duly elected and qualified.

At our 2020 Annual Meeting of Shareholders, three Class III Directors did not stand for re-election, and two nominees were elected as Class III Directors, leaving one vacancy on the Board. Additionally, on February 24, 2021, Janice K. Henry, who was a Class III Director, resigned from our Board, leaving an additional vacancy on the Board. The Company is actively seeking candidates to fill these vacancies, with the goal of filling one or both of these vacancies shortly after the 2021 Annual Meeting. Our Amended and Restated By-Laws provide that these vacancies shall be filled solely by the affirmative vote of a majority of the remaining directors then in office. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.

Shares represented by all proxies received by the Board of Directors and not so marked as to withhold authority to vote for an individual director will be voted (unless one or more nominees are unable or unwilling to serve) for the election of the nominees named below. The Board of Directors expects that each of the nominees named below will be available for election, but if any of them is not a candidate at the time the election occurs, it is intended that such proxies will be voted for the election of a substitute nominee to be designated by the Board of Directors.

THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL OF THE ELECTION OF RAJEEV BATRA, GERALD G. COLELLA AND ELIZABETH A. MORA TO SERVE AS CLASS I DIRECTORS IS IN THE BEST INTERESTS OF MKS AND OUR SHAREHOLDERS AND THEREFORE RECOMMENDS A VOTE “FOR” ALL NOMINEES.

DIRECTORS

Set forth below are the names and ages of each member of our Board of Directors (including those who are nominees for election as Class I Directors), the positions and offices held, principal occupation and business experience during at least the past five years, the names of other publicly held companies on which the individual currently serves, or in the past five years has served, as a director and the year each member of our Board of Directors joined our Board. We have also included information about each individual’s specific experience, qualifications, attributes, or skills that led the Board of Directors to conclude that he or she should serve as a director of MKS. Information with respect to the number of shares of Common Stock beneficially owned by each individual, directly or indirectly, as of February 10, 2021, appears in this proxy statement under the heading “Security Ownership of Certain Beneficial Owners and Management.”

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6

7

8

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Director Skills, Experience and Background

MKS is a global provider of instruments, systems, subsystems and process control solutions that measure, monitor, deliver, analyze, power and control critical parameters of advanced manufacturing processes to improve process performance and productivity for our customers. Many of the markets for our products are cyclical and highly competitive. As we discuss below under the heading “Corporate Governance – Director Candidates,” the Nominating and Corporate Governance Committee is responsible for evaluating the appropriate skills, experience and background that MKS seeks in Board members in the context of our business and the existing composition of the Board. This evaluation includes numerous factors, such as integrity, business acumen, knowledge of our business and industry, effectiveness, experience, diligence, conflicts of interest and the ability to act in the interests of all shareholders.

Listed below are the skills and experience that we consider important for our directors given our current business and organizational structure. The continuing directors’ and director nominees’ biographies and the matrix below note each director’s and director nominee’s relevant experience, qualifications and skills relative to this list.

Skills/Competencies

A significant portion of our sales are derived from products sold to semiconductor capital equipment manufacturers and semiconductor device manufacturers. In addition, our products are used in the industrial technologies, life and health sciences, as well as research and defense markets. Directors with education and experience in semiconductor technology and other industrial technologies provide valuable perspectives on our research and development efforts, competing technologies, the products and processes we develop, our manufacturing and assembly and the markets in which we compete.

Directors with a background in mergers and acquisitions and business development provide insights into developing and implementing strategies for growing our business. Useful experience in this area includes skills in assessing and analyzing the “fit” of a proposed acquisition with our long-term strategy, valuing transactions and assessing management’s integration plans with existing operations.

Directors who have served in senior leadership positions are important to us because they have the experience and perspective to analyze, shape, and oversee the execution of important operational and policy issues.

Directors with public company board experience understand the dynamics and operation of a corporate board, the relationship of a public company board to the Chief Executive Officer and other executive officers, the legal and regulatory landscape in which public companies must operate, and how to oversee an ever-changing mix of strategic, operational, and compliance-related matters.

We are a global organization with manufacturing, research and development, and sales offices in many countries. We sell our products to thousands of customers worldwide and a significant portion of our revenues are from sales to customers in international markets. Our manufacturing facility locations include Austria, China, France, Germany, Israel, Italy, Mexico, Romania, Singapore, South Korea and the United States. Because of these factors, directors with international experience can provide valuable business, regulatory and cultural perspectives regarding many important aspects of our business.

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Functional Background

Knowledge of financial markets, financing operations, and accounting and financial reporting processes is very important as it assists our directors in understanding, advising on, and overseeing our capital structure, financing and investing activities as well as our financial reporting and internal controls.

Our products incorporate sophisticated technologies to measure, monitor, deliver, analyze, power and control complex semiconductor and advanced manufacturing processes, thereby enhancing uptime, yield and throughput for our customers. We have developed, and continue to develop, new products to address industry trends. Directors with education and experience in engineering and research and development provide valuable perspectives regarding our research and development efforts, competing technologies, the products and processes we develop, our manufacturing and assembly and the markets in which we compete.

Directors with a regulatory, legal or governance background can assist the Board in fulfilling its oversight responsibilities regarding our compliance, engagement with regulatory authorities, and governance structure.

Directors with marketing, brand management and sales experience can provide expertise and guidance as we seek to expand the markets in which we compete, grow sales, and strengthen our brands.

As we operate in many cyclical markets, with rapid demand changes, and have a broad footprint of international manufacturing operations, understanding of and experience with manufacturing and other operational processes are valuable assets to our Board.

The markets we serve increasingly rely on digitization and electronic connectivity as growth drivers, including, for example, the Internet of Things, or IoT. Further, we rely on various information technology networks and systems, some of which are managed by third parties, to process, transmit and store electronic information and to carry out and support a variety of business activities, and the safety and security of our digital information is paramount to our success. Directors who have a sophisticated understanding of global digitization and/or cybersecurity literacy can assist with the Board’s oversight of driving future growth and securing our digital information in the rapidly evolving digital landscape.

Personal Demographics

Representation of a mix of ages, gender and racially diverse perspectives expand the Board’s understanding of the needs and perspectives of our customers, suppliers, employees and shareholders. In addition, we consider the tenure each director has on our Board to ensure the continued independence and effectiveness of the Board.

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Board Skills Matrix

The below matrix and the directors’ biographies note each director’s relevant experience, qualifications and skills relative to the skills and experience we consider important for our directors.

Directors

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2

3

4

5

6

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SKILL/COMPETENCIES

•  Industry Experience

✓

✓

✓

✓

✓

•  M&A/Business Development Experience

✓

✓

✓

✓

✓

•  CEO/COO/CFO Experience

✓

✓

✓

✓

✓

✓

•  Experienced Director

✓

✓

✓

•  International Experience

✓

✓

✓

✓

✓

FUNCTIONAL BACKGROUND

•  Accounting/Finance

✓

•  Engineering/R&D

✓

✓

✓

•  Regulatory/Legal/Governance

✓

✓

•  Marketing/Sales

✓

✓

•  Operations

✓

✓

✓

•  Digitization/Cybersecurity/IoT

✓

✓

PERSONAL DEMOGRAPHICS

•  Tenure (years)

3

7

1

1

5

9

2

•  Age

53

64

62

58

67

60

54

•  Gender (Female/Male/Nonbinary)

M

M

M

M

F

F

F

•  Racial Diversity (Caucasian/Non-Caucasian)

N

C

C

N

C

C

C

Demographic Ratio Graphs

The following demographic ratio graphs show data for our directors.

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PROPOSAL TWO – ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, enables our shareholders to vote to approve, on a non-binding, advisory basis, the compensation of our 2020 Named Executive Officers as disclosed in this proxy statement under the heading “Executive Compensation” including “Compensation Discussion and Analysis,” the tabular disclosure regarding such compensation, and the accompanying narrative disclosure. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our 2020 Named Executive Officers and the philosophy, policies and practices of executive compensation described in this proxy statement. The advisory vote is not a vote on our compensation practices for non-executive employees or our Board of Directors. The Dodd-Frank Act requires the Company to hold the advisory vote on executive compensation at least once every three years, but we have elected to submit the advisory vote to shareholders annually.

As described in detail under the heading “Executive Compensation — Compensation Discussion and Analysis,” our executive compensation program is designed to attract, motivate, and retain our executive officers, who are critical to our success. Under this program, our executive officers are rewarded for the achievement of specific short-term and long-term goals. Please see the “Compensation Discussion and Analysis” for additional details about our executive compensation program and philosophy, including information about the compensation of our 2020 Named Executive Officers.

The Compensation Committee continually reviews the compensation program for our executive officers to ensure it achieves the desired goals of aligning our executive compensation structure with our shareholders’ interests and current market practices.

Our Board of Directors is asking shareholders to approve a non-binding advisory vote on the following resolution:

RESOLVED, that the compensation paid to the Company’s 2020 Named Executive Officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and any related material disclosed in this proxy statement, is hereby approved.

This vote on the compensation of our 2020 Named Executive Officers is advisory, and therefore not binding on the Company, the Compensation Committee or our Board of Directors. Our Board of Directors and our Compensation Committee value the opinions of our shareholders and to the extent there is any significant vote against the 2020 Named Executive Officers’ compensation as disclosed in this proxy statement, we will consider our shareholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.

THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL TO APPROVE, ON A NON-BINDING ADVISORY BASIS, THE EXECUTIVE COMPENSATION CONTAINED IN THIS PROXY STATEMENT IS IN THE BEST INTERESTS OF MKS AND OUR SHAREHOLDERS AND THEREFORE RECOMMENDS A VOTE “FOR” THIS PROPOSAL.

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PROPOSAL THREE – RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

Our Audit Committee has selected PricewaterhouseCoopers LLP, or PwC, as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021. PwC was our independent registered public accounting firm for the fiscal year ended December 31, 2020.

Representatives of PwC are expected to attend the 2021 Annual Meeting. They will have the opportunity to make a statement if they so desire and will be available to respond to appropriate questions from shareholders. In the event that the ratification of the selection of PwC as our independent registered public accounting firm is not obtained at the 2021 Annual Meeting, the Board of Directors will reconsider its appointment.

THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL TO RATIFY THE SELECTION OF PWC AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2021 IS IN THE BEST INTERESTS OF MKS AND OUR SHAREHOLDERS AND THEREFORE RECOMMENDS A VOTE “FOR” THIS PROPOSAL.

CORPORATE GOVERNANCE

Board Independence

The Board of Directors has determined that all of the members of the Board of Directors, other than Mr. Colella and Dr. Lee, are independent as defined under the rules of the Nasdaq Stock Market, or Nasdaq.

Board Leadership Structure

Since 2005, we have separated the roles of Chief Executive Officer and Chairman of the Board of Directors in recognition of the differences between the two roles. The Chief Executive Officer is responsible for setting the strategic direction of the Company and the day-to-day leadership and performance of the Company, while the Chairman of the Board of Directors provides guidance to the Chief Executive Officer, sets the agenda for Board meetings and presides over meetings of the full Board of Directors.

In addition, our Corporate Governance Guidelines provide that during any period in which the Chairman of the Board of Directors is not an independent director, and in such other instances as the Board of Directors may determine from time to time, a Lead Director shall be elected by and from the independent directors. We are currently obligated under our Corporate Governance Guidelines to have a Lead Director, as Mr. Colella, our Chairman of the Board of Directors, is our former Chief Executive Officer and a non-independent member of our Board of Directors. Ms. Moloney has served as our Lead Director since 2020.

The primary role of the Lead Director is to serve as a liaison between the independent directors and the Chairman of the Board of Directors and/or the Chief Executive Officer and to represent the interests of the independent directors, as appropriate. Pursuant to our Corporate Governance Guidelines, which are posted on our website at investor.mksinst.com in the Corporate Governance tab, the Lead Director shall, among other matters:

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Our Board of Directors believes that its leadership structure is appropriate at this time for our Company because it strikes an effective balance between management and independent leadership participation in the Board of Directors’ process.

Communications from Shareholders

The Board of Directors will give attention to written communications that are submitted by shareholders and will respond if appropriate. The Chair of the Nominating and Corporate Governance Committee, with the assistance of our General Counsel, is primarily responsible for monitoring communications from shareholders and for providing copies or summaries to the other directors as he or she considers appropriate. Communications are forwarded to all directors if they relate to important substantive matters and include suggestions or comments that the Chair of the Nominating and Corporate Governance Committee considers to be important for the directors to know. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters as to which we tend to receive repetitive or duplicative communications.

Shareholders who wish to send communications on any topic to the Board of Directors should address such communications to the Board of Directors in care of Kathleen F. Burke, Esq., Senior Vice President, General Counsel and Secretary, MKS Instruments, Inc., 2 Tech Drive, Suite 201, Andover, MA 01810.

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics that applies to all of our directors, officers and employees (including the principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions), which is posted on our website at investor.mksinst.com in the Corporate Governance tab. We intend to disclose on our website any amendments to, or waivers for our executive officers or directors from, our code of business conduct and ethics.

Board’s Role in Risk Oversight

Management is responsible for the day-to-day management of risks the Company faces, while the Board of Directors, as a whole and through its committees, has the ultimate responsibility for the oversight of risk management. Senior management attends quarterly meetings of the Board of Directors, provides presentations on operations, including significant risks, and is available to address any questions or concerns raised by the Board of Directors. Additionally, our three standing board committees assist the Board of Directors in fulfilling its oversight responsibilities in certain areas of risk. Pursuant to its charter, the Audit Committee coordinates the Board of Directors’ oversight of the Company’s internal controls over financial reporting, disclosure controls and procedures, and code of business conduct and ethics. The Audit Committee also is responsible for discussing the Company’s policies with respect to financial risk assessment and financial risk management and overseeing the steps management has taken with respect to data privacy and cybersecurity risk exposure. Management regularly reports to the Audit Committee on these areas. The Compensation Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs as well as succession planning. The Nominating and Corporate Governance Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to the management of risks associated with board organization, membership and structure, succession planning for our directors, corporate

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governance and corporate social responsibility. In addition, from time to time, the Board of Directors may constitute a special committee to focus on a particular matter or risk. When any of the committees receives a report related to material risk oversight, the chair of the relevant committee reports on the discussion to the full Board of Directors.

Transactions with Related Persons

Our code of business conduct and ethics sets forth the general principle that our directors, officers and employees should refrain from engaging in any activity having a personal interest that presents a conflict of interest. The code of business conduct and ethics prohibits directors, officers and employees from engaging in any activity that may reasonably be expected to give rise to a conflict of interest or to adversely affect our interests. The code of business conduct and ethics provides that all employees are responsible for disclosing to the Company any transaction or relationship that reasonably could be expected to give rise to a conflict of interest, and executive officers and directors must report such transactions to the Board of Directors, which shall be responsible for determining whether such transaction or relationship constitutes a conflict of interest.

In addition, our written Related Person Transaction Procedures set forth the procedures for reviewing transactions that could be deemed to be “related person transactions” (defined as transactions required to be disclosed pursuant to Item 404 of Regulation S-K of applicable SEC regulations). In accordance with these procedures, directors and executive officers are required to submit annual certifications regarding interests and affiliations held by them and certain of their family members. We then review our records to determine whether we have engaged in any transactions since the beginning of our prior fiscal year with such affiliated persons and entities or with any person or entity known by MKS to be the beneficial owner of more than 5% of our voting securities, and provide a summary to the Audit Committee of any such material transaction in which the related person has a direct or indirect interest. In accordance with the procedures, the Audit Committee reviews any such transactions (including, but not limited to, transactions constituting related person transactions). In reviewing any such transaction, the Audit Committee considers, among other things, the related person’s interest in the transaction, the approximate dollar value of the transaction, whether the transaction was undertaken in the ordinary course of business, whether the terms of the transaction were at arm’s length, the purpose and potential benefits to the Company of the transaction, and whether the transaction is in the best interests of the Company. The Audit Committee may, in its sole discretion, impose such conditions as it deems appropriate in connection with any related person transaction. In accordance with the Audit Committee charter, the Audit Committee reviews the Related Person Transaction Procedures from time to time.

Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP, and Wellington Management Company LLP, which we refer to collectively as the Wellington Group, collectively beneficially owned approximately 9% of the Company’s outstanding voting shares as of February 10, 2021, based on a filing they have made with the SEC. Wellington Management LLP, an affiliate of the Wellington Group, manages a cash and investment account of MKS in the aggregate amount of approximately $285 million as of December 31, 2020. In 2020, MKS paid Wellington Management LLP approximately $213,000 for these cash and investment management services. Wellington Management LLP must manage this account in accordance with, and subject to, the Company’s Corporate Investment Policy, which establishes clear guidelines for acceptable investments. As part of our Related Person Transaction Procedures, our Audit Committee reviewed the foregoing relationship with Wellington Management LLP.

Board of Director Meetings and Committees of the Board of Directors

The Board of Directors held seven meetings in 2020. During 2020, each director attended at least 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings of all committees of the Board of Directors on which he or she served. Pursuant to our Corporate Governance Guidelines, directors are encouraged to attend our annual meeting of shareholders. All of the directors then serving on the Board of Directors, other than Messrs. Beecher, Bertucci and Hess, whose tenure as directors ended on the date of the 2020 Annual Meeting of Shareholders, attended the 2020 Annual Meeting of Shareholders.

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The Board of Directors has established three standing committees — Audit, Compensation, and Nominating and Corporate Governance — each of which operates under a charter that has been approved by the Board of Directors. Each committee’s current charter is posted on our website at investor.mksinst.com in the Corporate Governance tab.

Audit Committee

The Audit Committee consists of Ms. Mora (Chair), Mr. Donahue and Ms. Moloney. In May 2020, Ms. Henry and Mr. Donahue replaced Ms. Moloney and Gregory R. Beecher, when Ms. Moloney became a member of the Compensation Committee and when Mr. Beecher’s tenure as a director ended. In February 2021, Ms. Mora was elected Chair of the Audit Committee and Ms. Moloney rejoined the Audit Committee, when Ms. Henry resigned as a member of the Board of Directors. The Board of Directors has determined that each of Ms. Mora and Ms. Moloney is an “audit committee financial expert” as defined in applicable SEC regulations. Each member of the Audit Committee also meets the requirements for independence under applicable Nasdaq and SEC rules. The Audit Committee’s responsibilities include:

The Audit Committee held five meetings in 2020.

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Compensation Committee

The Compensation Committee consists of Mr. Batra (Chair), Ms. Moloney and Ms. Mora. Ms. Moloney replaced Rick D. Hess, who served on the Compensation Committee until May 2020 when his tenure as a director ended. Mr. Batra was elected Chair of the Compensation Committee in February 2021 when Ms. Mora assumed the role of Chair of the Audit Committee. Each member of the Compensation Committee meets the requirements for independence under applicable Nasdaq and SEC rules. The Compensation Committee’s responsibilities include:

The Compensation Committee held five meetings in 2020. See the section below entitled “Executive Compensation — Compensation Discussion and Analysis” for further information about the role of the Compensation Committee and the scope of its activities.

Compensation Risk Assessment

Our Compensation Committee engaged its independent compensation consultant, Pearl Meyer & Partners, LLC, or Pearl Meyer, to conduct a risk assessment of our compensation programs and practices to understand if any risks exist that are reasonably likely to have a material adverse effect on our Company, and the results were reviewed by our Compensation Committee. Based on this assessment, our Compensation Committee concluded that our compensation programs and practices, as a whole, are appropriately structured and do not pose a material risk to our Company. Our compensation programs are intended to reward our executive officers and other employees for strong performance over the long-term, with consideration to short-term actions and results that strengthen and grow our Company. We believe our compensation programs provide the appropriate balance between short-term and long-term incentives, focusing on sustainable and profitable growth for our Company.

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Compensation Committee Interlocks and Insider Participation

In 2020, Mr. Batra, Ms. Moloney, Ms. Mora and Mr. Hess served on the Compensation Committee. Ms. Moloney replaced Mr. Hess in May 2020, when Mr. Hess’s tenure as a director ended. None of the members of the Compensation Committee during 2020 were, at any time, officers or employees of MKS or our subsidiaries, and none of them had any relationship with us requiring disclosure under applicable SEC rules and regulations. None of our executive officers serves, or has served, as a member of the Board of Directors or Compensation Committee (or other committee serving an equivalent function) of any other entity which has one or more executive officers serving as a member of our Board of Directors or Compensation Committee.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee consists of Ms. Moloney (Chair), Mr. Batra and Ms. Warner. Each member of the Nominating and Corporate Governance Committee meets the requirements for independence under applicable Nasdaq and SEC rules. The Nominating and Corporate Governance Committee’s responsibilities include:

The Nominating and Corporate Governance Committee held three meetings in 2020.

For information relating to the nomination of directors, see “Director Candidates” below.

Director Candidates

The Nominating and Corporate Governance Committee recommended to the Board of Directors that the director nominees be nominated by the Board of Directors for election as Class I Directors. The Nominating and Corporate Governance Committee utilizes a number of processes to identify and evaluate director candidates, including the engagement of a third-party executive search firm and other resources to identify potential director candidates, as needed. Activities relating to identifying and selecting nominees include Board assessments of each incumbent director nominee for the current year, requests to Board members and others for recommendations of

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potential candidates, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by the members of the Nominating and Corporate Governance Committee and the Board of Directors. The Nominating and Corporate Governance Committee recommended to the Board of Directors the nomination of Mr. Batra, Mr. Colella and Ms. Mora.

In considering whether to recommend any particular candidate for inclusion in the Board of Directors’ slate of recommended director nominees, the Nominating and Corporate Governance Committee applies the criteria attached to the Company’s Corporate Governance Guidelines. These criteria include the candidate’s integrity, business acumen, knowledge of our business and industry, effectiveness, experience, diligence, conflicts of interest and the ability to act in the interests of all shareholders. The Nominating and Corporate Governance Committee does not assign specific weights to particular criteria and no particular criterion is a prerequisite for each prospective nominee. The Nominating and Corporate Governance Committee also assesses the candidate’s professional background and skills against those of the existing Board members to ensure a breadth and diversity of expertise that suits the Company’s current and future business risks, industries and challenges. See “Directors — Board Skills Matrix.” Nominees shall not be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability or any other basis proscribed by law. In considering director candidates, the Nominating and Corporate Governance Committee actively seeks diverse candidates for the pool from which candidates are chosen. While the Nominating and Corporate Governance Committee does not have a formal policy with respect to diversity, the Board of Directors and the Nominating and Corporate Governance Committee believe that it is essential that the members of the Board of Directors represent diverse viewpoints. In considering candidates for the Board of Directors, the Nominating and Corporate Governance Committee considers the entirety of each candidate’s credentials in the context of these standards. We believe that the backgrounds and qualifications of our directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow the Board of Directors to fulfill its responsibilities.

Shareholders may recommend individuals to the Nominating and Corporate Governance Committee for consideration as potential director candidates by submitting their names, together with appropriate biographical information and background materials and a statement as to whether the shareholder or group of shareholders making the recommendation has beneficially owned at least $2,000 in market value or 1% of our Common Stock, whichever is less, for at least a year as of the date such recommendation is made, to the Nominating and Corporate Governance Committee, in care of Kathleen F. Burke, Esq., Senior Vice President, General Counsel and Secretary, MKS Instruments, Inc., 2 Tech Drive, Suite 201, Andover, MA 01810. Assuming that appropriate biographical and background material has been provided on a timely basis, the Nominating and Corporate Governance Committee will evaluate shareholder-recommended candidates by following substantially the same process, and applying the same criteria, as it does in considering other candidates.

Shareholders also have the right under our Amended and Restated By-Laws to directly nominate director candidates, without any action or recommendation on the part of the Nominating and Corporate Governance Committee or the Board of Directors, by following the procedures set forth under the heading “Deadline for Submission of Shareholder Proposals for the 2022 Annual Meeting” below.

CORPORATE SOCIAL RESPONSIBILITY

In 2020, we significantly enhanced our Corporate Social Responsibility, or CSR, program, which the Board of Directors directly oversees. The Board of Directors and management are committed to executing on our vision and mission in an ethical and sustainable way for our employees, customers, suppliers, communities and shareholders.

We have established a CSR Management System, which outlines our CSR governance structure, how we manage our CSR program, our high-level focus areas and our annual CSR strategy process. Our leadership approach is based on our commitment to conduct business with the highest standards of integrity. Our Code of Business Conduct and Ethics, which is described under “Corporate Governance — Code of Business Conduct and Ethics,” ensures that we deliver on this commitment every day.

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We also have a strong commitment to our people, with an emphasis on diversity, equity and inclusion, learning and development, and safety and well-being. In 2020, as part of our commitment to diversity, equity and inclusion, over 120 of our leaders around the world completed a six-week diversity, equity and inclusion program hosted by a consulting firm recognized as best-in-class in the area of diversity, equity and inclusion capability building. We plan to extend this training to our next level of leaders. In addition, we plan to offer other diversity, equity and inclusion training for all other employees in 2021. We also proactively provide our hiring managers with diverse candidate slates in our employee recruiting process.

Throughout the COVID-19 pandemic, the safety and well-being of our global workforce has been our highest priority. The commitment to this effort is evidenced by the extensive planning and numerous actions we swiftly took to respond to the pandemic, including implementing a number of safety precautions for our employees and a “work from home” policy for a significant portion of our workforce.

We value the environment and the communities in which we live and work. We are committed to sustainable business practices, supporting clean energy development, philanthropy and volunteerism. Another critical part of our CSR strategy is cultivating strong relationships with our supply chain. As part of our responsible and sustainable sourcing strategy, we formalize, standardize and clearly communicate our expectations for suppliers, including our ethical guidelines and how we expect to work together.

In summary, we believe that it is critical to create relationships with our stakeholders that support responsible and ethical business practices, conduct and compliance. It is good for our employees, it is good for our environment, and it is good for our business.

Detailed information regarding our corporate social responsibility activities is available on our website at www.mksinst.com/corporate-social-responsibility.

DIRECTOR COMPENSATION

Cash Compensation

The following table summarizes the cash compensation payable by us to non-employee directors in 2020:

In addition, from time to time, the Board of Directors may establish special committees related to specific matters and may include a retainer for service on such special committees in its discretion.

Equity Compensation

Non-employee directors are eligible for awards under our 2014 Stock Incentive Plan, which is administered by the Compensation Committee. In 2020, under our director compensation program, non-employee directors received automatic grants of restricted stock units, or RSUs, on the date of the 2020 Annual Meeting of Shareholders, with a grant date value of $200,000, which RSUs shall vest in full on the day prior to the 2021 Annual Meeting.

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If a new non-employee director joins our Board of Directors after our annual meeting of shareholders but before January 1st of the following year, he or she will be entitled to an initial RSU grant with a value equal to the annual RSU grant. In the event a non-employee director joins our Board of Directors during the period from January 1st through the date of that year’s annual meeting of shareholders, he or she will not be entitled to an initial RSU grant but will be entitled to the annual RSU grant on the date of the annual meeting of shareholders.

Director Compensation Table for 2020

The following table summarizes compensation paid to non-employee directors in 2020. Dr. Lee is excluded from the table because he was an executive officer in 2020 and his compensation is set forth in the Executive Compensation section below, under the heading “Executive Compensation Tables — Summary Compensation Table for 2020.” Mr. Colella is excluded from the table because he served as Chief Executive Officer through January 1, 2020, and under SEC rules, his director compensation is reported in the Summary Compensation Table.

AUDIT AND FINANCIAL ACCOUNTING OVERSIGHT

Audit Committee Report

The Audit Committee of our Board of Directors has reviewed our audited financial statements for the year ended December 31, 2020 and discussed them with our management.

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The Audit Committee discussed with PricewaterhouseCoopers LLP, or PwC, our independent registered public accounting firm, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Commission.

The Audit Committee has received the written disclosures and the letter from our independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with the independent accountant the independent accountant’s independence.

Based on the review and discussions referred to above, the Audit Committee recommended to our Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2020.

Respectfully submitted,

Joseph B. Donahue

Elizabeth A. Mora

Principal Accountant Fees and Services

For the years ended December 31, 2020 and 2019, aggregate fees for professional services rendered by our independent registered public accounting firm, PwC, in the following categories were as follows:

Audit Fees

Audit fees billed for both years consisted of fees for professional services rendered for: (i) the audit of our annual consolidated financial statements, (ii) statutory audits, (iii) the review of our consolidated financial statements included in our quarterly reports on Form 10-Q, (iv) audit services related to other reports filed with the SEC, and (v) the audit of our internal controls over financial reporting as required by the rules and regulations promulgated under Section 404 of the Sarbanes-Oxley Act of 2002.

Tax Fees

Tax Fees for the years ended December 31, 2020 and December 31, 2019 were for services related to tax compliance, including the preparation of tax returns, and tax planning and tax advice, including assistance with foreign operations and foreign tax audits.

All Other Fees

All Other Fees for the years ended December 31, 2020 were for due diligence services performed in connection with a potential acquisition and for accounting research software. All Other Fees for the year ended December 31, 2019 were for accounting research software.

In 2020 and 2019, all Audit Fees, Tax Fees and All Other Fees were pre-approved pursuant to the Audit Committee’s pre-approval requirements, described below.

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Pre-Approval Policy and Procedures

The Audit Committee’s charter sets forth the Audit Committee’s obligations relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm. The charter provides that we will not engage our independent registered public accounting firm to provide audit or non-audit services unless the service is pre-approved by the Audit Committee. In addition, we will not engage any other accounting firm to provide audit services unless such services are pre-approved by the Audit Committee. It is the Audit Committee’s policy that with respect to services performed or to be performed by PwC in connection with each fiscal year of the Company, the annual fees for non-audit services in such year shall not exceed one half of the aggregate fees payable to PwC for such year, without the prior express approval of the Audit Committee.

In connection with the foregoing, the Audit Committee may approve specific services in advance. In addition, from time to time, the Audit Committee may pre-approve specified types of services that are expected to be provided to us by our independent registered public accounting firm during the next 12 months. Any such pre-approval of types of services is detailed as to the particular service or type of service to be provided and is also generally subject to a maximum dollar amount.

The Audit Committee has also delegated to the Chair of the Audit Committee the authority to approve any audit or non-audit services to be provided to us by our independent registered public accounting firm. Any approval of services by the Chair of the Audit Committee pursuant to this delegated authority is reported on at the next meeting of the Audit Committee.

The Audit Committee has considered and determined that the provision of the non-audit services noted in the foregoing table is compatible with maintaining PwC’s independence.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT

The following table sets forth certain information with respect to the beneficial ownership of our Common Stock by (i) each shareholder known to us to be the beneficial owner of more than 5% of the outstanding shares of our Common Stock; (ii) the Named Executive Officers named in the Summary Compensation Table below; (iii) each of our current directors; and (iv) all of our directors and executive officers as a group. Unless otherwise indicated in the footnotes to the table, all equity amounts set forth in the table are as of February 10, 2021, and the address for each of our directors and executive officers is: c/o MKS Instruments, Inc., 2 Tech Drive, Suite 201, Andover, Massachusetts 01810.

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To our knowledge, there are no voting trusts or similar arrangements among any of the foregoing persons or entities with respect to the voting of shares of Common Stock.

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EXECUTIVE OFFICERS

The following is a brief summary of the background of each of our current executive officers, other than Dr. Lee, whose background is described under the heading “Directors” above:

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Our executive officers are appointed by the Board of Directors on an annual basis and serve until their successors are duly appointed and qualified. There are no family relationships among any of our executive officers or directors.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Introduction

The purpose of this section of our proxy statement is to provide an overview of our executive compensation program, our compensation philosophy and objectives, and the material decisions we made with respect to each element of our executive compensation program.

On January 1, 2020, John T.C. Lee succeeded Gerald G. Colella as Chief Executive Officer and continued to serve as President. Upon Mr. Colella’s retirement on January 1, 2020, Mr. Colella continued to serve on our Board of Directors and assumed the role of Chairman of the Board in May 2020.

Throughout this proxy statement, we refer to the “2020 Named Executive Officers” listed below.

Following this Compensation Discussion and Analysis, you will find a series of tables containing specific information about the compensation earned or paid in 2020 to our 2020 Named Executive Officers. Mr. Colella’s Employment Agreement provided Mr. Colella with certain retirement benefits. As a result, we did not make any compensation decisions with respect to Mr. Colella during 2020 as he was not eligible for a salary adjustment or a 2020 cash bonus, and he did not receive any equity awards other than in his capacity as a non-employee director of the Company. For this reason, Mr. Colella is not included in the discussion that follows. We refer to our 2020 Named Executive Officers who did serve through December 31, 2020 as the “Named Executive Officers” throughout the discussion below. References to “2020 Named Executive Officers” include Mr.  Colella.

Executive Summary

Our Business

We are a global provider of instruments, systems, subsystems and process control solutions that measure, monitor, deliver, analyze, power and control critical parameters of advanced manufacturing processes to improve process performance and productivity for our customers. Our products are derived from our core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, electronic control technology, reactive gas generation and delivery, power generation and delivery, vacuum technology, lasers, photonics, optics, precision motion control, vibration control and laser-based manufacturing systems solutions. We also provide services relating to the maintenance and repair of our products, installation services and training. Our primary served markets include semiconductor, industrial technologies, life and health sciences, and research and defense.

Company Performance in 2020

We reported record revenue and operating cash flow in 2020, despite facing unprecedented disruptions resulting from the global COVID-19 pandemic and associated economic headwinds.

Our foremost priority when the COVID-19 pandemic started was the safety and well-being of our global workforce, and it continues to be our main priority. We responded swiftly at the onset of the pandemic and implemented a number of safety precautions for our employees, while also shifting to a “work from home” environment for a significant portion of our workforce. We also remained steadfast in delivering on the needs of our customers during this challenging time. Our team worked tirelessly to ensure continuity of operations by swiftly responding to disruptions at our factories and supply chain partners, while adhering to stringent safety protocols.

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Our strong performance in 2020 was led by robust demand in our Semiconductor Market and a continued recovery in our Advanced Markets. In our Semiconductor Market, our results were a function of broad-based demand from our OEM customers and from our end-user customers. Our results also underscore the increasing importance of our unique Surround the Chamber^® strategy, which enabled us to outperform growth in industry Wafer Fab Equipment spending organically by 200 basis points over the past decade.

While MKS’ Advanced Markets were negatively impacted by COVID-19 disruptions and economic headwinds, MKS returned to year-over-year organic growth in the second half of 2020, led by a recovery in our Research and Defense Market resulting from the reopening of university and research labs following COVID-19 related shutdowns and–more notably–an acceleration in demand in Advanced Electronics applications, where we are well-positioned with our Surround the Workpiece^® portfolio.

In 2020, key results include:

2020 Compensation Outcomes

Our executive compensation program is designed to reward our Named Executive Officers for performance and to align their interests with those of our shareholders. As a result of our financial results in 2020, our Named Executive Officers received 200% of their target variable cash compensation tied to non-GAAP operating income and 144% of their target performance-based equity compensation tied to non-GAAP EBITDA. We believe these financial performance metrics are important to our shareholders because each is an indicator of how well we manage the operations and profitability of our Company. The successful alignment of our financial performance goals with our incentive payout opportunities for 2020 is evidenced by the fact that both our annual cash incentive plan and our performance-based equity awards paid out above target in a year where our Company achieved record revenue and operating cash flow and we achieved net income of $350 million compared to $140 million in 2019.

Consideration of 2020 Advisory Vote on Executive Compensation

At our 2020 Annual Meeting of Shareholders, held on May 11, 2020, we submitted to our shareholders an advisory vote on executive compensation. Although annual advisory “say-on-pay” votes are non-binding, our Compensation Committee has considered, and will continue to consider, the outcome of this vote each year when making compensation decisions for our Named Executive Officers. At the 2020 Annual Meeting, our shareholders overwhelmingly approved our executive compensation, with approximately 98.3% of the votes cast voting in favor of the “say-on-pay” proposal.

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The Compensation Committee considered the results of the 2020 say-on-pay vote, and based upon the strong shareholder support, does not believe that our executive compensation program requires material changes. However, when the Compensation Committee evaluated our executive compensation program in 2020, it undertook a comprehensive review of the perquisites we offered to our executive officers, including a market analysis of the current practices of our peer group. Based on this market analysis, the Compensation Committee elected to discontinue perquisites, as described under “Elements of Compensation — Perquisites” below. The Compensation Committee will continue to consider the views of our shareholders in connection with our executive compensation program and will consider changes based upon evolving best practices, market compensation information and changing regulatory requirements. The Compensation Committee believes that the 2020 shareholder vote was an endorsement of our compensation and pay decisions made in relation to our performance.

Compensation Philosophy and Objectives

The primary objectives of our executive compensation program are to:

We target each of the various compensation elements, including base salary, annual cash incentive compensation, and long-term equity incentive compensation, to be within a competitive range around median levels for the individual position in the market. The competitive range is considered alongside other key factors when setting compensation levels, and final values may range from approximately the 25th percentile to approximately the 75th percentile, as appropriate. In considering the compensation of our Named Executive Officers relative to the market, we also look qualitatively at the individual’s overall performance, tenure and potential contributions to MKS’ ongoing growth. Currently, all of our Named Executive Officers are paid within the competitive range of our peer group, with the exception of our Chief Executive Officer, who, as a newly appointed chief executive officer, is paid outside of the competitive range of our peer group but above the 25th percentile.

Base salaries are designed to provide executives with a level of predictability and stability with respect to a portion of their total compensation package. Base salaries are a relatively small component in the overall pay packages of our Named Executive Officers because we believe the significant majority of executive compensation should be variable and based on performance.

Our annual cash incentive compensation program is designed to reward the attainment of short-term earnings goals that drive the long-term growth of MKS. We believe that our program goals are aligned with significant value creation, and that our plan creates a strong link between pay and performance while providing meaningful incentive for our Named Executive Officers to exceed our financial goals.

We provide our Named Executive Officers with long-term equity incentive compensation in the form of restricted stock units, or RSUs, approximately half of which are performance-based, in order to:

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In order to further underscore our compensation values, and enhance the efficacy of our pay programs, we have also implemented the following practices:

The following charts show the components of total target compensation for our Chief Executive Officer and our other Named Executive Officers as a group for 2020.

When the Compensation Committee met in July 2019 to review peer companies to be used to determine 2020 executive compensation, the Committee elected to remove the following six companies: Cypress Semiconductor Corp. and Finisar Corp., which were in the process of being acquired, Advanced Energy Industries, Inc. and Kulicke and Soffa Industries, Inc., which were below our targeted revenue range and had

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negative forecasted growth, and Plantronics, Inc. and Viavi Solutions Inc., which had lower revenue and a different business focus. To replace them, the Compensation Committee elected to add the following five companies: II-VI Incorporated, IPG Photonics Corporation, Skyworks Solutions, Inc., Trimble Inc. and Zebra Technologies Corporation. The 17 peer companies are U.S. publicly traded companies that were primarily selected based on similar industry and size. Similar size companies were generally considered if such companies had a revenue range relative to our trailing 12-month revenue as of June 30, 2019 between approximately .5 to 2.5 times and a market capitalization range relative to our market capitalization as of June 30, 2019 between approximately .3 and 3 times. The Compensation Committee also considered secondary factors including other relevant peer groups, commonality of peers, other performance considerations and whether a company is a competitor for talent. Publicly available compensation data from the following comparable peer companies was used in determining executive compensation for 2020:

In certain instances where robust proxy benchmark data was not available, our Compensation Committee utilized size and industry-appropriate broad survey data from the 2020 Radford Global Technology Survey.

Elements of Compensation

The following summarizes the compensation elements for our Named Executive Officers:

Base Salary

When our Compensation Committee set 2020 annual executive compensation in February 2020, it approved a salary increase of approximately 6% for each of Mr. Bagshaw, our Senior Vice President, Chief Financial Officer and Treasurer, and Ms. Burke, our Senior Vice President, General Counsel and Secretary, and a salary increase of approximately 3% for Mr. Schreiner, our Senior Vice President and Chief Operating Officer, who had recently joined our Company in September 2019. These increases were based on the compensation data collected from our peer group and took effect on March 22, 2020. The 2020 salary for Dr. Lee, our President and Chief Executive Officer, was set by the Compensation Committee in October 2019 in connection with his promotion to Chief Executive Officer effective January 1, 2020.    

Listed below is the base salary for Dr. Lee, our President and Chief Executive Officer, in 2019 and 2020.

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Annual Cash Incentive Compensation

For 2020, the Compensation Committee did not make any changes to our annual cash incentive program compared to 2019. Under our annual cash incentive plan, each Named Executive Officer was eligible to receive a performance bonus based on a specified percentage of eligible earnings, which is defined as eligible W-2 earnings received during the 2020 calendar year (i.e., base salary, including regular, holiday, vacation and sick pay, but excluding bonus payments). Bonus payouts in 2020 were based entirely on non-GAAP operating income after bonus and excluded any charges or income not related to the operating performance of the Company.

In 2020, payouts under the annual cash incentive plan were determined by multiplying a Named Executive Officer’s “Target Bonus Amount” by the Company’s percentage achievement of the financial performance objective, each as discussed below. Target Bonus Amount is the amount determined by multiplying each Named Executive Officer’s eligible earnings in 2020 by the Target Bonus Percentages determined by our Compensation Committee each year. In October 2019, our Compensation Committee approved a 15% increase in Dr. Lee’s Target Bonus Percentage effective for 2020 in connection with his promotion to Chief Executive Officer. When our Compensation Committee set 2020 annual executive compensation in early 2020, it approved a 5% increase in the Target Bonus Percentage for Mr. Bagshaw and Ms. Burke. Mr. Schreiner, who had recently joined the Company, did not receive an increase in his Target Bonus Percentage.

Listed below is the 2020 Target Bonus Percentage for each Named Executive Officer.

In 2020, our Compensation Committee approved goals and associated incentive payout opportunities related to our 2020 non-GAAP operating income performance. As we operate in the highly cyclical semiconductor market, our Compensation Committee views it of paramount importance to set financial performance goals that are rigorous but attainable given the outlook for the semiconductor market and the other markets in which we serve for the coming year. The successful alignment of our financial performance goals with our incentive payout opportunities for 2020 is evidenced by the fact that our annual cash incentive plan paid out above target in a year where we had record revenue and operating cash flow and we increased net income by 150% as compared to 2019.

In 2020, participants in the annual cash compensation plan would not receive any portion of their Target Bonus Amount if non-GAAP operating income for the Company (excluding the Equipment and Solutions Division) was less than $182.0 million, or the “Threshold Bonus Amount.” Participants would receive 50% of their Target Bonus Amount if such non-GAAP operating income was $182.0 million, would receive 100% of their Target Bonus Amount if such non-GAAP operating income was $364.0 million, and would receive the maximum 200% if such non-GAAP operating income was $396.6 million or more, with proportional payments for achievement in between these levels. If non-GAAP operating income before the calculation of bonus was greater than the Threshold Bonus Amount, but the inclusion of the bonus would result in an amount lower than the Threshold Bonus Amount, then only the portion of pre-bonus operating income above the Threshold Bonus Amount would be payable to participants on a pro rata basis. In 2020, non-GAAP operating income was $491.3 million. As a result, participants were eligible to receive 200% of their Target Bonus Amounts under this formula. The 2020 non-GAAP operating income excludes restructuring charges, acquisition and integration costs, amortization of intangible assets, asset impairment costs as a result of the write-down of long-lived assets related to the pending closure of a facility in Europe and an inventory charge related to the exit of certain product groups.

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Listed below are our Named Executive Officers’ earned cash bonus payouts for 2020.

Our Compensation Committee has the authority to make other cash bonus awards to our executive officers as it deems appropriate. In May 2020, in recognition of the extraordinary efforts managing our business during the COVID-19 pandemic, the members of our COVID-19 response team, including our Named Executive Officers, were awarded discretionary cash bonuses. Our COVID-19 response team’s top priority during the pandemic has been and continues to be protecting the health and safety of our employees and their families, our customers and our community. The commitment to this effort was evidenced by the extensive planning and numerous actions this team swiftly took to respond to the pandemic, including the development and implementation of an infectious disease playbook, a work from home program, health check protocols and screenings for all employees working on site, new process workflows at physical sites to ensure reduced contact for employees working on site, contact tracing processes and protocols, quarantining and testing protocols, travel guidelines and protocols to ensure employees who must travel for work can do so safely, and phased return-to-work plans and approval processes to enable non-manufacturing employees to return to work when permitted by local government regulations. As members of our COVID-19 response team, our Named Executive Officers received the following discretionary cash bonuses, grossed up for taxes:

Incorporation of Profit Improvement Bonus Plan for Calendar Years Beginning in 2020

In February 2020, our Board of Directors, upon the recommendation of our Compensation Committee, approved a profit improvement component to our annual cash incentive plan designed to incentivize profitability improvements during cyclical downturns in our business. Individuals who are eligible to participate in our annual incentive bonus plan are also eligible for the profit improvement cash bonus plan. In order to receive any payout under this plan, MKS must achieve specified profit enhancements or cost reductions by the end of the applicable calendar year. A participant’s maximum bonus under this plan is 25% of his or her Target Bonus Amount (using the same definition as used in our annual cash incentive plan). Participants are only eligible to receive a payout under the profit improvement cash bonus plan if the participant receives less than 100% of his or her Target Bonus Amount under our annual incentive bonus plan, and any payout under the profit improvement cash bonus plan is capped such that the combined payout under our annual incentive bonus plan and under the profit improvement cash bonus plan will not exceed an amount equal to 100% of the participant’s Target Bonus Amount under our annual incentive bonus plan. In 2020, our Named Executive Officers were not eligible to receive any payouts under the profit improvement cash bonus plan because our annual incentive bonus plan paid out at over 100%.

Our Compensation Committee did not make any design changes to our annual cash incentive program for 2021 except that the financial performance of the Company’s Equipment and Solutions Division, which division was formed as a result of the Company’s acquisition of Electro Scientific Industries, Inc., will no longer be excluded.

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Long-Term Equity Incentive Compensation

When our Compensation Committee set 2020 annual executive compensation in early 2020, it awarded the following time-based and performance-based RSUs to our Named Executive Officers. These RSUs vest in three equal annual installments. The performance-based RSUs are subject to a one-year performance metric described below.

With respect to performance-based RSUs, our goal is to select a Company financial performance metric that best aligns with our Company objectives. Prior to 2020, our Company financial performance metric for performance-based RSUs was non-GAAP cash flow from operations (defined as net income plus depreciation, amortization and non-cash stock-based compensation and excluding any charges or income not related to the operating performance of the Company) set at varying revenue levels. For 2020, the Compensation Committee elected to change our Company financial performance metric from non-GAAP cash flow from operations to non-GAAP EBITDA (defined as the Company’s GAAP operating income excluding any charges or income not related to the operating performance of the Company plus depreciation and stock compensation expense). The rationale for this change was to remove the impact of taxes, interest and other non-operating costs from the measure of how effectively we manage the operations of our Company, while continuing to recognize the cyclical nature of the markets we serve, as well as to drive continued improvement in our Company’s operating model independent of revenue levels.

We use RSUs as our form of equity incentive compensation because we believe RSUs help to ensure that our executive officers’ interests are aligned with our shareholders’ interests in both a rising and a declining stock market. We believe RSUs are preferable to options, which have a relatively high accounting cost as compared to their potential value to the executive officer, and are also preferable to restricted stock, which gives the executive officer voting and dividend rights prior to full vesting. Also, because RSUs are worth more than options on the date of grant, we are able to grant fewer of these as compared to options, resulting in less dilution to shareholders’ holdings.

In 2020, our Named Executive Officers would have forfeited all of their performance-based RSUs if our non-GAAP EDITDA was less than $302.8 million at a revenue level of $1.85 billion, or if such non-GAAP EBITDA was less than $485.6 million at a revenue level of $2.5 billion (with intermediate non-GAAP EBITDA minimum thresholds at different revenue levels in between). However, if we did achieve these non-GAAP EBITDA threshold levels at the respective revenue levels identified, our Named Executive Officers would receive 50% of their target performance-based RSUs. If our non-GAAP EBITDA was at or above $409.0 million at a revenue level of $1.85 billion, or was at or above $655.0 million at a revenue level of $2.5 billion (with proportional thresholds in between), then our Named Executive Officers would receive the maximum of 150% of their target performance-based RSUs. Proportional achievement levels would be made for non-GAAP EBITDA between the minimum and maximum levels. In 2020, because our revenue was $2.3 billion and our non-GAAP EBITDA was $601.4 million, after excluding restructuring charges, acquisition and integration costs, amortization of intangible assets, depreciation of fixed assets, stock-based compensation expense, COVID-19 related costs and credits that consisted of payroll-tax credits for maintaining our workforce during the pandemic offset by shift premiums and bonuses, asset impairment costs as a result of the write-down of long-lived assets related to the pending closure of a facility in Europe and an inventory charge related to the exit of certain product

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groups, our Named Executive Officers received 144% of their target performance-based RSUs. These performance-based RSUs, along with the time-based RSUs granted to our Named Executive Officers, vest in equal annual installments over three years from the original date of grant.

It is our practice to make an initial equity-based grant to all of our Named Executive Officers at the time they commence employment in an amount that is consistent with amounts granted to other executive officers in the industry at similar levels of seniority. In addition, we typically make an annual grant of equity-based compensation to our Named Executive Officers during the first fiscal quarter of each year. Discretionary equity-based awards may also be made throughout the year to provide an incentive to achieve a specific goal or to reward a significant achievement or for other reasons that the Compensation Committee determines. Our Compensation Committee did not make any discretionary equity-based awards to our Named Executive Officers in 2020. Our Compensation Committee did not make any design changes to our 2021 annual equity incentive program except for increasing the performance-based RSU achievement cap from 150% of target to 200% of target. This change was made after our Compensation Committee, with the assistance of its independent compensation consultant, undertook a market analysis of the current practices of our peer group and determined the 150% cap was below market practice.

Perquisites

Historically, we offered certain perquisites to our executive officers, including our Named Executive Officers, to allow executives to focus on corporate strategy and enhancing shareholder value and to provide competitive pay packages. These perquisites included a company-leased car or car allowance, company paid health and life insurance, reimbursement of certain out-of-pocket healthcare costs, golf club memberships, financial planning benefits and executive physicals. We believed offering these benefits was important to maintaining a competitive position in attracting and retaining key personnel and these benefits were consistent with market practices.

In 2020, our Compensation Committee undertook a comprehensive review of the perquisites we offered to our executive officers, including a market analysis of the current practices of our peer group. Based on this market analysis, our Compensation Committee elected to discontinue perquisites effective December 31, 2020, with the exception that any Named Executive Officer could retain a company-leased car until the expiration of the lease to avoid lease cancellation costs. To recognize the elimination of perquisites, a one-time adjustment was made when determining 2021 base salaries and, for any Named Executive Officer whose lease is set to expire at some future date, a subsequent adjustment will be made to his or her base salary in the year after such lease expiration. Our Compensation Committee believes the discontinuation of perquisites allows us to simplify and more consistently align our compensation and benefits offerings with other employees, while placing greater focus on performance-based compensation.

Severance and Change-in-Control Provisions

Each of our Named Executive Officers is entitled to certain payments and benefits in the event his or her employment terminates under specified circumstances as described in the applicable agreement. In exchange for these payments and benefits, each Named Executive Officer is restricted from competing with the Company during and following his or her termination of employment for a twelve-month period. In addition, RSU agreements with our Named Executive Officers provide for acceleration of vesting in the event the executive’s employment is terminated without cause or the executive resigns for good reason within 24 months after a change-in-control. The severance and change-in-control provisions are designed to be competitive in the marketplace, to provide security for our Named Executive Officers in the event that we are acquired and his or her respective position is impacted and to provide an incentive for the Named Executive Officer to stay with us through such a change-in-control event. These provisions are also intended to protect us from competitive harm, by compensating our Named Executive Officers for agreeing to substantial non-compete provisions after employment termination. See “Executive Compensation Tables — Potential Payments Upon Termination or Change-in-Control” for more information about these agreements.

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Compensation of our Chief Executive Officer

We entered into an employment agreement with Dr. Lee upon his becoming Chief Executive Officer in October 2019. The terms of Dr. Lee’s employment agreement reflected his role as the leader of our Company and the experience he brought to the position having served more than 13 years in various roles at MKS. For a detailed discussion of the material compensation terms of Dr. Lee’s employment agreement, including all amendments to this employment agreement, see “Executive Compensation Tables — Potential Payments Upon Termination or Change-in-Control.”

Compensation of our Other Named Executive Officers

We have entered into employment agreements with each of our other Named Executive Officers. For a detailed discussion of the material compensation terms of these executive employment agreements, including all amendments to these employment agreements, see “Executive Compensation Tables — Potential Payments Upon Termination or Change-in-Control.”

Compensation Consultant

We engage a compensation consultant to serve as an independent advisor to the Compensation Committee regarding compensation for our directors and our executive officers. The Compensation Committee utilizes the compensation consultant in the following ways:

Since May 2019, the Compensation Committee has engaged Pearl Meyer as its compensation consultant. The Compensation Committee has determined that the engagement of Pearl Meyer as a compensation consultant does not raise any conflicts of interest with MKS.

Role of our Chief Executive Officer

Our Chief Executive Officer reviews with the Compensation Committee the performance of all other Named Executive Officers and makes recommendations relating to compensation of such executive officers. Management develops proposed company financial goals for review and approval by the Compensation Committee for the annual cash incentive plan and long-term performance-based equity incentive compensation, develops proposals relating to potential changes in compensation programs for review and approval by the Compensation Committee and provides the Compensation Committee and its advisors with information necessary to evaluate and implement compensation proposals and programs. Our Chief Executive Officer does not participate in discussions regarding his own compensation.

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Governance Policies

Stock Ownership Guidelines

The Stock Ownership Guidelines, which are applicable to members of the Board of Directors, the Chief Executive Officer and any other person who is or was a named executive officer while the guidelines are effective, provide that:

These guidelines are based, in each case, on values in effect as of December 31 of the applicable year. The Stock Ownership Guidelines provide for a phase-in period over five years to achieve the respective ownership goals. All Named Executive Officers and directors were in compliance with the Stock Ownership Guidelines as of December 31, 2020.

Clawback Policy

Our Clawback Policy, which is applicable to incentive-based compensation (specifically our cash incentive plan and our performance-based RSUs) that is awarded to our current and former executive officers, provides that in the event we are required to prepare an accounting restatement due to material noncompliance with financial reporting requirements, we will use reasonable efforts to recover any amount in excess of what would have been paid to such executive officers (or such former executive officers) under the accounting restatement for any such incentive-based compensation during the three-year period preceding the restatement.

Prohibition on Hedging and Pledging

Our Insider Trading Policy prohibits any of our directors or employees from engaging in transactions involving financial instruments that are designed to hedge or offset any decrease in the market value of our securities (including pre-paid variable forward contracts, equity swaps, collars and exchange funds), and prohibits such individuals from purchasing our securities on margin or pledging such securities as collateral for a loan.

Impact of Tax on Executive Compensation

Impact of ASC 718

We account for stock-based compensation in accordance with the requirements of ASC 718. The Compensation Committee considers the impact of ASC 718 on our use of equity incentives as a key retention tool. The Compensation Committee regularly reviews its choice of equity incentives, taking into account both tax and accounting considerations.

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the “Compensation Discussion and Analysis” required by Item 402(b) of Regulation S-K with management. Based on such review and discussions, the Committee recommended to the Board of Directors that the “Compensation Discussion and Analysis” be included in this proxy statement.

Respectfully submitted,

Elizabeth A. Mora, Chair

Rajeev Batra

Jacqueline F. Moloney

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EXECUTIVE COMPENSATION TABLES

Summary Compensation Table for 2020

The following table sets forth the aggregate amounts of compensation earned by our Named Executive Officers in the years ended December 31, 2020, 2019 and 2018. On January 1, 2020, Mr. Colella retired as our Chief Executive Officer.

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Health and Disability Benefits include Company-paid medical, dental, vision, short-term and long-term disability and life insurance, a Company-paid annual physical and reimbursement for certain out-of-pocket health care costs capped at $4,500 annually (except for Mr. Colella, whose costs are capped at $6,000 annually upon his retirement). With respect to the “Health & Disability Benefits” column, the amount indicated for Mr. Colella for 2020 consists of $23,077 in retiree medical benefits for himself and his spouse, which were made in connection with his retirement as Chief Executive Officer. Mr. Colella receives retiree medical benefits for life for himself and his spouse, which had a net present value of $671,764 as of December 31, 2020. With respect to the “Other” column, the amount indicated for Mr. Colella for 2020 includes the following compensation: (i) $127,802 in fees earned or paid in cash for his service as a director, which includes $10,000 in consideration for services on a special committee of the Board of Directors, consisting of a flat fee of $3,000 for up to five meetings and $1,000 per meeting thereafter up to a maximum of $10,000, and (ii) a payment of $66,775 for unused vacation in connection with his retirement as Chief Executive Officer; the amount indicated for Mr. Colella for 2018 represents a service award; and the amount indicated for Mr. Schreiner for 2020 relates to moving expenses.

CEO Pay Ratio

We are required by Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K to disclose the ratio of our median employee’s annual total compensation to the annual total compensation of our principal executive officer.

The purpose of this disclosure is to provide a measure of the equitability of pay within our Company. We believe our compensation philosophy and process yield an equitable result for all of our employees. During 2020, our principal executive officer was our Chief Executive Officer, John T.C. Lee. For 2020, the combined annual total compensation for Dr. Lee was $6,127,026, and for our median employee was $64,178, resulting in a pay ratio of approximately 95:1.

In accordance with applicable SEC rules, we identified the median employee as of December 18, 2019 (the median employee determination date) by (i) aggregating for each applicable employee (A) annual base salary for salaried employees (or hourly rate multiplied by expected annual work schedule for hourly employees), (B) the actual bonus, commissions and overtime or double-time received for 2019, and (C) the accounting value of any equity granted during 2019, and (ii) ranking this compensation measure for our employees from lowest to highest. This calculation was performed for all employees, excluding Mr. Colella, our principal executive officer as of the median employee determination date, whether employed on a full-time, part-time, or seasonal basis. For purposes of identifying the median employee, we converted amounts paid in foreign currencies to United States

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Dollars based on the applicable 2019 average exchange rates as of December 18, 2019. Due to anomalous compensation characteristics of our 2019 median employee related to COVID-19 premium pay for a temporary period of time during 2020 as well as associated overtime compensation, we substituted our 2019 median employee with another employee with substantially similar compensation to that of our 2019 median employee based on the compensation measure used to select the median employee in 2019.

The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described above. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

Grants of Plan-Based Awards Table in Fiscal Year 2020

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Outstanding Equity Awards at 2020 Fiscal Year-End Table