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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant ý
Filed by a Party other than the Registrant ¨
Check the appropriate box:
¨    Preliminary Proxy Statement
¨    Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
    Definitive Proxy Statement
¨    Definitive Additional Materials
¨    Soliciting Material under §240.14a-12
ALIGN TECHNOLOGY, INC.
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
ý    No fee required
¨    Fee paid previously with preliminary materials
¨    Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11









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TABLE OF CONTENTS
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Voting Roadmap
Board Risk Oversight
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SECURITY OWNERSHIP AND RELATED PARTY TRANSACTIONS
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Cautionary Note Regarding Forward-Looking Statements

This proxy statement contains forward-looking statements, including those regarding our strategies and financial performance; our development of new and existing products and technologies; and other statements that are not historical fact. Forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Forward-looking statements contained herein are based upon information available to us as of the date hereof. Readers are cautioned that these forward-looking statements reflect our best judgments based on currently known facts and circumstances and are subject to risks, uncertainties, and assumptions that are difficult to predict. As a result, actual results may differ materially and adversely from those expressed in any forward-looking statement.

The foregoing and other risks are detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission on February 28, 2024. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

Unless otherwise expressly stated or context requires otherwise, information in this proxy statement is as of April 9, 2024.
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CEO's Letter to the Stockholders


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"Align is in a unique position to revolutionize the dental industry and help doctors transform and grow their practices with Invisalign® clear aligners, iTero™ scanners, exocad™ CAD/CAM software, and Vivera™ retainers. "





Major milestones: 17 million Invisalign® patients treated—including 4.7 million teens, 4 million Vivera™ retainer cases, 100 thousand iTero™ scanners sold, and 55 thousand exocad CAD/CAM software installations

Total Revenues of $3.9 billion

 Operating Margin of 16.7%, or 21.4% non-GAAP operating margin

Diluted Net Income per share of $5.81, or $8.61 on a non-GAAP basis

Repurchased $600 million of Align common stock




April 9, 2024

Dear Stockholders,

Overall, 2023 reflects our continued progress in leading the digital transformation of the orthodontic and restorative dental industry and our commitment to our purpose of transforming smiles and changing lives by making clear aligner treatment available to everyone through doctors. We offer a powerful suite of innovative digital tools that make up the Align Digital Platform,™ a proprietary combination of software, systems, and services designed to provide a seamless experience and workflow that integrates and connects all users – doctors, labs, patients, and consumers. Align is in a unique position to revolutionize the dental industry and help doctors transform and grow their practices with Invisalign® clear aligners, iTero™ scanners, exocad™ CAD/CAM software, and Vivera™ retainers.

Despite headwinds from continued macro-economic uncertainty and weaker consumer sentiment, we continued to expand our global footprint and reached new markets with Invisalign, iTero and exocad products and services. In 2023, we grew revenues, volumes, and earnings and remained focused on executing our strategic growth drivers and creating value for our stockholders. During the year we achieved several major milestones: 17 million Invisalign® patients treated—including 4.7 million teens, 4 million Vivera™ retainer cases, 100 thousand iTero™ scanners sold, and 55 thousand exocad CAD/CAM software installations. We finished the year with a record 256 thousand cumulative Invisalign trained doctors globally and shipped Invisalign cases to more than 335 thousand doctors around the world.

For 2023, total revenues of $3.9 billion exceeded our prior outlook and increased 3.4%, notwithstanding the impact of unfavorable foreign exchange which reduced reported revenues by approximately $36.3 million or 0.9% points. We also delivered 2023 operating margin of 16.7%, or 21.4% non-GAAP operating margin, and diluted net income per share of $5.81, or $8.61 on a non-GAAP basis. From a balance sheet perspective, as of fiscal 2023, we had no debt and finished the year with $980.8 million in cash, cash equivalents, and short-term and long-term marketable securities -- after we repurchased $600 million of Align common stock.

Today, Invisalign is the most recognized orthodontic brand globally and Invisalign clear aligner treatment is faster and more effective than traditional metal braces, yet the underlying market opportunity remains huge and untapped. Most of the world’s population have some form of malocclusion or crooked teeth, however, only a fraction receives orthodontic treatment because access to care is limited by several factors including the manual nature of traditional orthodontic treatment using metal wires and brackets. By continually innovating and developing digital technologies and services that enable more dental health professionals to easily diagnose and treat patients with crooked teeth, and help them retain their healthy beautiful smiles, we are increasing access to care for millions of people who might not otherwise receive orthodontic treatment.

With more than 22 million annual orthodontic case starts each year globally, teen treatment is the largest segment of the orthodontic market and represents approximately 75% of total case starts. For fiscal 2023, teens and younger patients totaled 809 thousand Invisalign cases, up 8% compared to the prior year, and made up 34% of our 2.4 million total clear aligner shipments. Teen specific consumer marketing and sales programs, along with continued momentum for Invisalign First for kids as young as 6 helped drive adoption globally. Invisalign First is designed to treat a broad range of teeth straightening issues in growing children, and because it’s removable, it’s easier for kids to brush and floss and there’s also no discomfort compared to metal braces.

Innovation has always been at the heart of Align's success, and this past year was no exception. Our focus on research and development has enabled us to introduce new solutions that address the evolving needs of both patients and practitioners. I am especially proud of our focused execution of our product roadmap and innovation pipeline, which resulted in the largest introduction of new products and technologies in our history, further advancing our software, scanning and 3D printing capabilities.

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In September 2023, we announced several new innovations including:
Invisalign® Palatal Expander System, Invisalign Plan Editor, SmartForce® attachment-free aligner activation feature, and new software innovations that will harness the power of data driven insights from more than 17 million Invisalign treated patients to enhance patient satisfaction, and support practice efficiency and digital practice workflows;
Vivera™ Retainer Subscription (VRS) platform direct ship to patient feature that allows doctors to have subsequent retainers sent directly to their patients to meet their ongoing long-term retention needs; and
Align™ Oral Health Suite, an intuitive and visually engaging digital interface available on the iTero Element Plus Series, designed to enhance dental consultations and drive dental treatment acceptance*.

Invisalign® Palatal Expander System is our first direct 3D printed orthodontic device that provides doctors with a solution set to treat the most common skeletal and dental malocclusions in growing children. It is a safe, comfortable, and clinically effective alternative to metal palatal expanders and expands our market opportunity in the teen market by addressing a portion of cases we couldn’t otherwise treat without it. Together with Invisalign First aligners, Invisalign Palatal Expanders can address early intervention treatment, such as Phase 1 or early interceptive treatment, which makes up about 20 percent of orthodontic case starts each year. The addition of the mandibular advancement features to Invisalign aligners also provides doctors with more options for treating skeletal and dental jaw imbalances and bite correction for their growing patients during their teenage years. Essentially, we now have an Invisalign digital treatment solution for every phase of orthodontic treatment.

A key component of Align innovations is enhancing the Invisalign treatment experience across the Align Digital Platform. This includes focusing on the importance of using tooth movement prior to restorative procedures to improve quality of restorations for patients as well as the opportunity to change the standard of care for patients by incorporating tooth movement in everyday dentistry, not only for aesthetics but function.

In 2023, we continued to advance our software product offerings for digital treatment planning for orthodontics and restorative dentistry by providing doctors with greater flexibility, real-time treatment plan modification capabilities and digital solutions to help improve practice productivity and patient experience. This includes: ClinCheck® Live Update for 3D controls, Invisalign® Practice App, Invisalign® Personalized Plan (IPP), and Invisalign Smile Architect,™ iTero-exocad Connector,™ Invisalign® Outcome Simulator Pro, and Invisalign® Virtual Care AI software.

These digital tools are continuing to gain adoption and help doctors gain efficiencies. In 2023, ClinCheck® Live Update was used by 63K doctors on more than 2.3 million cases, reducing time spent in modifying treatment by 18.4%. Invisalign Practice app was actively used by 94.4K doctors with over 21 million photos uploaded during the year via the Invisalign Practice app. Together with our customers, we are developing the future of digital dentistry and digital orthodontics – not just the technology that drives treatment, but the models reshaping how we interact with customers and deliver treatment experiences for their patients. As our scanner portfolio expands and we introduce new products, we increase the opportunities for customers to upgrade, make trade-ins, and purchase certified pre-owned scanners in certain markets. Developing new capital equipment opportunities to meet the digital transformation needs of our customers and DSO partners is a natural progression for our equipment business with a large and growing base of scanners sold.

In addition to these and other incredible innovations in the coming years, we expect to continue to build the Align Digital Platform and add new capabilities to improve clinical outcomes and elevate patient experiences to drive continued practice growth and positive patient experiences. While I am pleased with our results in 2023 and start to the year, I am even more excited about Align innovation in 2024 and our next wave of growth drivers that we believe will continue to revolutionize the orthodontic and dental industry in scanning, software and direct 3D printing.

In January 2024, we unveiled a breakthrough technology — the iTero Lumina™ intraoral scanner - with 3X wider field of capture in a 50% smaller wand that delivers faster scanning, higher accuracy, and superior visualization for greater practice efficiency. iTero Lumina quickly, easily, and accurately captures more data while delivering exceptional scan quality and photorealistic visuals that remove the need for intraoral photos altogether. Doctors can now scan at twice the speed with a wide field of capture, multi angled scanning, and a large capture distance, meaning they can capture more dentition in greater detail throughout the scanning process. Align has filed over 30 patent applications covering technology related to the iTero Lumina intraoral scanner. I believe iTero Lumina has the potential to set a new standard of care for dental practices by simplifying the scanning of complex oral regions, while offering superior chair-side visualization and a more comfortable experience for patients, especially kids.

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With the closing of our acquisition of privately-held Cubicure in January 2024, a pioneer of direct 3D printing solutions for polymer additive manufacturing, we hope to enable the next generation of direct 3D printed products, helping create more sustainable and efficient solutions. We also expect it to extend and scale our printing, materials, and manufacturing capabilities for our 3D printed product portfolio which now includes the Invisalign® Palatal Expander System. And with the commercialization of the Invisalign Palatal Expander in 2024, we have expanded the clinical applicability of the Invisalign system to nearly one hundred percent of orthodontic case starts. The ability to direct 3D print Invisalign Palatal Expander will eventually lead to other direct printed products– with the goal to direct 3D print Invisalign clear aligners --which we hope to achieve within the next couple of years.

In closing, Align has a multi-faceted competitive advantage: technology innovation, where we invest up to $300 million in R&D per year to bring some of the most disruptive products in digital dentistry and orthodontics to the market in a highly regulated industry, a direct sales force that consists of over 5,000 highly trained specialists, a doctor-centered model because we understand the importance of doctor directed care, a billion dollar brand trusted by over 17 million patients worldwide, and global scale and manufacturing to deliver millions of customized clear aligner parts every day.

None of this would have been possible without the dedication and hard work of our talented team, and our doctor partners and their staff. I want to take this opportunity to express my gratitude for your commitment and contributions to our continued growth and success. Each one of you plays a critical role in driving our company forward, and I am continually inspired by your passion for our purpose of transforming smiles and changing lives.


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Joe Hogan
President & CEO
Align Technology
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Notice of 2024 Annual Meeting of Stockholders
The 2024 annual meeting of stockholders of Align Technology, Inc. will be held virtually on
 Wednesday, May 22, 2024 at 10:00 a.m. Mountain Standard Time
ITEMS OF BUSINESS
 
YOUR VOTE IS IMPORTANT

Please vote as promptly as possible by using any of the following methods: You may vote your shares over the Internet or by telephone. If you received a paper copy of a proxy card by mail, you may submit your proxy for the Annual Meeting by completing, signing, dating and returning your proxy card in the pre-addressed envelope provided. For specific instructions on how to vote your shares, please refer to the section entitled, "Voting Information - How do I vote my shares during the Annual Meeting?"
COMPANY PROPOSALS
Proposal 1: Election of ten nominees named in the proxy statement as Directors, each for a term of one year.
For Each Nominee
Proposal 2: Consideration of an advisory vote to approve executive compensation.
For
Proposal 3: Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accountants for fiscal year 2024.
For
STOCKHOLDER PROPOSAL
Proposal 4: Simple Majority Vote; Replacement of all voting requirements in our charter and bylaws that call for greater than a simple majority vote with a simple majority vote.
Against
 
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on May 22, 2024.

The Proxy Statement and Align Technology, Inc.'s Annual Report on Form 10-K are available electronically at http://www.viewproxy.com/aligntech/2024.

Virtual Meeting Admission
All stockholders as of the Record Date (March 25, 2024), or their duly appointed proxies, may attend our virtual Annual Meeting. Online access will begin at 9:30 a.m. Mountain Standard Time, and we encourage you to join early. To be admitted to the Annual Meeting, eligible stockholders must register in advance at http://viewproxy.com/aligntech/2024/htype.asp.

Technical Issues
Contact 866-612-8937 (toll-free) or 973-873-7684 (international) for any technical difficulties or trouble accessing the virtual meeting or if you are unable to locate your digital control number.

Adjournments and Postponements
Any action on the Items of Business may be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting may be properly adjourned or postponed.
OTHER BUSINESS
Consideration of other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
On or about April 10, 2024, we mailed to our beneficial and registered stockholders a Notice of Internet Availability of Proxy Materials (the "Notice") containing instructions on how to access our Proxy Statement and Annual Report and how to vote online. The Notice also contained instructions on how to request and receive a printed paper copy of the Proxy Statement, Proxy Card and Annual Report.
Stockholders of record of Align Technology, Inc. common stock at the close of business on March 25, 2024, are entitled to vote at the meeting and any postponements or adjournments of the meeting.
Thank you for your ongoing support of, and continued interest in, Align Technology, Inc.

    Sincerely,
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Align Technology, Inc.
https://cdn.kscope.io/70c16175132386154e586fc445c34cdc-Picture1.jpgJulie Coletti Executive Vice President, Chief Legal and Regulatory Officer

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Proxy Statement Summary
Voting Roadmap
Our Business
2023 Performance Highlights
Governance Highlights
Director Highlights
Fiscal Year 2023 Executive Compensation Highlights

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Proxy Statement Summary
This Proxy Statement Summary highlights selected information contained elsewhere in this, Align Technology, Inc.'s ("Align" or the "Company") proxy statement. It does not contain all the information you should consider, and as such, we urge you to carefully read this proxy statement in its entirety prior to voting. For additional information, please review our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 available at https://investor.aligntech.com/financial-information/annual-report.
Voting Roadmap
ProposalsFor More InformationBoard Recommendation
COMPANY PROPOSALS
Proposal One: Election of Directors. The Board of Directors (the "Board") and its Nominating and Governance Committee believe that the ten nominated directors (the "Nominees") encompass a range of talents, skills, expertise, diversity of backgrounds and experiences sufficient to provide sound and prudent guidance for Align's operations and interests and the interests of Align's stockholders. See the section entitled "Director Nominees."
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FOR
Proposal Two: Advisory Vote on Named Executive Officer Compensation. Our executive compensation program is designed to align pay with performance, taking into account stockholder feedback and interests. See the section entitled "Executive Compensation - Compensation Discussion and Analysis."
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FOR
Proposal Three: Ratification of Independent Registered Public Accounting Firm. Our Board believes the continued retention of PricewaterhouseCoopers LLP is in the best interests of Align and our stockholders. Our Board submits the selection of PricewaterhouseCoopers LLP to you for ratification as a matter of good corporate practice. See the section entitled "Company Proposal Three Ratification of Appointment of Independent Registered Public Accountants."
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FOR
STOCKHOLDER PROPOSAL
Proposal Four: Simple Majority Vote; Replacement of all voting requirements in our charter and bylaws that call for greater than a simple majority vote with a simple majority vote. Given our strong corporate governance practices and our demonstrated record of responsiveness to stockholders, the limited number of provisions that require a supermajority vote of the stockholders in our charter and bylaws and the vague phrasing of this proposal, we believe this revision is unnecessary and would run counter to the best interests of our stockholders.
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AGAINST
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Our Business
Align is a global medical device company primarily engaged in the design, manufacture and marketing of Invisalign® clear aligners for the treatment of malocclusions, or the misalignment of teeth, by orthodontists and general dental practitioners (“GPs”), ViveraTM retainers for retention, iTeroTM intraoral scanners and services for dentistry, and exocadTM computer-aided design and computer-aided manufacturing (“CAD/CAM”) software for dental laboratories and dental practitioners. Our vision and strategy is to revolutionize orthodontic and restorative dentistry through digital treatment planning and implementation using our Align Digital PlatformTM, an integrated suite of proprietary technologies and services designed to deliver a seamless, end-to-end solution for patients, consumers, orthodontists, GPs and lab partners. We strive to achieve our vision and strategy through key objectives made possible with the proprietary technologies and services of the Align Digital Platform to establish: clear aligners as the principal solution for the treatment of malocclusions with the Invisalign system as the treatment solution of choice by orthodontists, GPs and patients globally, our intraoral scanners as the preferred scanning technology for digital dental scans and our exocad CAD/CAM software as the dental restorative solution of choice for dental labs.
2023 Performance Highlights
In 2023, we remained steadfast in our commitment to our doctor customers and their patients and further extended our leadership in digital orthodontics and restorative dentistry through execution of our strategic priorities:
International ExpansionGeneral Dental Practitioner AdoptionPatient Demand and ConversionOrthodontist Utilization
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Continually increasing the presence of our operations and commercial organization globally, expanding our products and service offerings and training and educating more doctors in more markets.
Making teeth straightening more relevant for GPs by enabling them to effectively scan, identify, treat, and monitor malocclusion.
Making the Invisalign® system the most recognized brand name in orthodontics by creating awareness and preference among consumers and motivating potential patients to start treatment.
Continually innovating in digital orthodontics to increase product applicability and predictability to address a range of malocclusion, especially for teens and growing patients, enabling doctors to confidently diagnose and treat more patients.


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In 2023, we achieved new milestones towards our strategic priorities.
REVENUES AND MILESTONES
$3.9B
Total Net Revenues
Year-over-year 3.4% increase
$3.2B
Clear Aligner Revenues
$662.9M
Imaging Systems and CAD/CAM Services Revenues
Cumulative Invisalign clear aligner patients
17M
(including 4.7M Teens)

100K
iTero Scanners Sold
256K
Doctors Trained

For the full year 2023, total revenues were $3.9 billion, Clear Aligner revenues were $3.2 billion, and Imaging Systems and CAD/CAM Services revenues were $662.9 million. Our 2023 total revenues, Clear Aligner revenues and Imaging Systems and CAD/CAM Services revenues were unfavorably impacted by foreign exchange rates. Our financials in 2023 were also heavily impacted by macroeconomic uncertainty and weaker consumer confidence.

We reached our 17 millionth Invisalign clear aligner patient milestone, which included our 4.7 millionth teen patient. Our percentage of teen patients in 2023 reached a record 33.6% of Invisalign cases shipped for the year. In 2023, we shipped to over 335 thousand doctors and we had a record number of 256 thousand cumulative Invisalign trained doctors globally, reinforcing our commitment to doctor-directed and managed care for clear aligner treatment to achieve the safest, most predictable and best possible clinical treatment outcomes for patients.

In the second half of 2023, we announced regulatory approval in the U.S. and Canada of the Invisalign® Palatal Expander System which is intended for use in rapid expansion and subsequent holding of skeletal and dental narrow maxilla (upper jaw) with primary, mixed, or permanent dentition during patient treatment. It provides an alternative to traditional palatal expanders that require the daily manual turning of a screw in the device while in the mouth to achieve expansion. The Invisalign Palatal Expander System is our first direct 3D printed orthodontic device. Additionally, in the first quarter of 2023, we launched the Invisalign Comprehensive 3in3 product. The 3in3 configuration offers doctors Invisalign Comprehensive treatment with a three-year treatment expiration date and three additional clear aligner sets prior to the treatment expiration date, instead of a five-year treatment expiration date with unlimited additional clear aligner sets prior to the treatment end date.

In our Imaging Systems and CAD/CAM Services segment, we continued to develop new capital equipment opportunities to meet the digital transformation needs of our customers and dental support organization partners. Our Imaging Systems and CAD/CAM Services products and technology also enable more relevance to general dentists to increase adoption and utilization of Invisalign clear aligners. As our scanner portfolio expands and we introduce new products, we increase opportunities for customers to upgrade, make trade-ins, and provide refurbished scanners for emerging markets.

For other non-case revenues, which include retention products such as our Vivera™ retainers, clinical training and education, accessories and eCommerce products, and subscription programs such as our Invisalign® Doctor Subscription Program, revenues were up double digits year over year. We began offering the Invisalign Doctor Subscription Program in 2021. In 2023, sales of the Invisalign Doctor Subscription Program associated with “touch up cases” had grown sufficiently that it became material to our business, so we began disclosing it as a portion of
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our total case volumes. During 2023, we announced a number of new products and innovations that further enhanced the Align Digital Platform™, leading the digital transformation of the practice of dentistry.

We continued to focus on the next phase of new platform innovations in scanning, software, and direct 3D printing while prioritizing the needs of our customers for the ultimate benefit of their patients. In addition to launching the Invisalign Palatal Expander System, in the second half of 2023 we also introduced:
Plan Editor in ClinCheck® treatment planning software, a new tool in the Align Digital Workflow that enables enhanced flexibility and customization in Invisalign treatment planning for Invisalign trained orthodontists and general practitioner dentists;
New SmartForce™ feature, an attachment-free aligner activation feature that reduces the need for attachments and offers a more aesthetic solution for an enhanced Invisalign patient experience. The new SmartForce feature with attachment-free aligner activation is under development and expected to be commercially available in the first half of 2024;
New software innovations to accelerate digital practice transformation such as the Align™ Oral Health Suite, including future collaboration with X-Ray Insights, which will aid doctors in identifying and educating patients on oral health conditions and improve their oral health and the iTero-exocad Connector™ release to optimize doctor and lab collaboration and productivity by streamlining case communication in a single channel on the MyiTero™ Portal.

In addition to these and other innovations in the coming years, we intend to continue to build the Align Digital Platform and add new capabilities to improve clinical outcomes and elevate patient experiences to drive continued practice growth and positive patient experiences.

Net Revenues and Operating Income

The following graphs show Align's net revenues and operating income from fiscal year 2017 to 2023.
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Revenue and Profit CAGR

The following graph provides the seven-year compound annual growth rate for our revenue and operating income in comparison to our 2023 peers over the same period.

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(1) Illumina Negative Op Profit in 2022 due to a goodwill impairment. This was due to the divestiture of Grail, Inc.
(2) Insulet Negative Op Profit from 2009-2017, positive since 2018
(3) Revvity - 2023 was first full year as a standalone company. Spunout of PerkinElmer in March 2023
(4) Steris Op Margin negatively impacted in 2023 due to an impairment of Cantel ($491M), their Dental Segment
(5) Dentsply Sirona negative Op Profit in 2023 due to a $302M impairment


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Governance Highlights

We recognize the importance of strong corporate governance as the foundation for long-term stockholder value. Our Board is responsible for ensuring our governance practices are well-designed and appropriate for our business. We continually review and update our corporate governance practices and frequently meet with stockholders to ensure that our policies are aligned with their interests and corporate governance best practices. As of the date of this proxy statement, these best practices include:
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Our CEO and independent Chair of our Board ("Chair") roles are separated
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90% of our directors are independent
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Our Board is made up of seasoned executive leaders with a diversity of viewpoints, backgrounds, races, national origins, and experiences
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40% of our director nominees identify as women and 30% as ethnically diverse. Since 2017, we have added four diverse members to our Board
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We have significant stock ownership requirements and our CEO has purchased $7 million of our common stock since his last sale in 2021 (1)
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Our independent directors hold regular meetings without management present
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Employees and directors are prohibited from engaging in short-selling, hedging or pledging transactions
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Our Board oversees our overall risk management infrastructure
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We promote a culture of integrity and quality that manages risks as part of our corporate strategy and day-to-day operations
(1) To ensure his alignment with the Company's long-term growth objectives and that his interests are closely aligned with those of our stockholders, our CEO purchased $3 million (as valued at the time of each purchase) of our common stock in 2023 with his personal funds and since his last sale of our common stock in 2021, he has purchased $7 million (as valued at the time of each purchase) of our common stock with his personal funds.
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Director Highlights
The Board has nominated ten talented directors with skills, experiences and professional backgrounds representing a diversity of perspectives and characteristics particularly relevant to Align's business and strategies.

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Fiscal Year 2023 Executive Compensation Highlights

Pay for Performance

In 2023, we retained all of the key elements of our long-standing, stockholder-approved, incentive-focused executive management compensation program. As with prior years, the 2023 program directly tied a substantial portion of the target direct compensation of executive management to at risk compensation with 93% and 82% of the target compensation for our CEO and our other named executive officers ("NEOs"), respectively, being at risk. These percentages represent an increase from 91% and 81%, respectively, of the target compensation for our CEO and our other NEOs from the prior year. Base salary remained the only fixed direct compensation component. Highlights of our 2023 executive compensation program are in the table below. For a more detailed understanding of our compensation program see the section "Executive Compensation - Compensation, Discussion and Analysis."

Aligned Pay with Long-Term PerformanceCash Incentives Aligned with Company Performance
CEO Target Pay
CEO Realizable Pay and Stockholder Alignment
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The three-year performance-based MSUs granted to our NEOs in February 2021 paid out at 87.7% of target in February 2024 based on a strong stock performance in 2021, significant stock underperformance in 2022 and a moderate stock performance in 2023, all relative to companies comprising the NASDAQ Composite Index.

In 2023, our annual cash incentive bonus paid out at 66% of target to our NEOs under our short-term cash incentive bonus program. This was aligned with our slight improvements in our actual revenues and operating income compared to 2022, but 2023 results were still short of the rigorous targets set by the Compensation and Human Capital Committee.
In 2023, the MSU portion of our CEO’s long-term incentive increased to 70% and our CEO’s target annual long-term incentive value increased by $2 million to $13.5M in order to incent positive long-term growth. In response to stockholder feedback, target long-term incentive value was reduced by $1 million to $12.5M for the 2024 equity awards.
Our CEO’s cumulative 3-year realizable total direct compensation ("TDC") was 24% less than his cumulative 3-year target TDC and 51% less than his cumulative 3-year reported total compensation, as further discussed in the Realizable Pay section of the Compensation Discussion and Analysis section.







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Alignment with Stockholder Interest and Company Performance

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Base Salary
Rationale
% of Total Target CEO% of Total Target Average NEO
Cash
Provide a fixed, baseline level of compensation that is not contingent upon Align’s performance
Attract and retain talent with competitive pay that reflects each executive’s experience, role and responsibilities

CEO
NEO
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Annual Cash Incentive Compensation
Cash award based primarily on two metrics:
Revenue (60%)
Operating Profit (40%)

Incentivize and reward for achieving and surpassing pre-established financial goals
Reward individual contributions
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Restricted Stock Units (RSUs)
Equity Award
Annual vesting over four years
Encourage long term focus
Provide incentive to grow the value of Align's stock
Reward retention even in the event of decline in share price
Attract and retain talent
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Market Stock Units (MSUs)
Equity Award
100% vesting after 3 years based on the performance of Align's stock compared to the NASDAQ composite index during the 3-year performance period

Encourage long term focus
Provide incentive to grow the value of Align's stock
Reward retention even in the event of decline in share price
Attract and retain talent
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Corporate Governance
Strong Corporate Governance Policies and Practices
Key Policies
Board Structure and Independence
Role of Our Board
Board Risk Oversight
Risk Oversight Program
Committee Responsibilities and Oversight
Annual Committee and Board Evaluations
Board Meetings
Stockholder Communications with the Board

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Corporate Governance
We remain committed to high standards of corporate governance, which we believe are foundational to the success of our business, create stockholder value and maintain our credibility in the marketplace.

Strong Corporate Governance Policies and Practices
Our policies and practices are the framework by which we govern our business. Our Board, along with management, regularly reviews our corporate governance policies and practices to ensure that they are appropriate and reflect our high standards. In reviewing these policies and practices and making recommendations, management and our Board considers the feedback of stockholders to be essential.

We maintain a corporate governance page on our website which includes many of our policies and practices, including our Global Code of Conduct ("Code"), Corporate Governance Guidelines ("Guidelines"), and the charters for each of the standing committees of our Board. The corporate governance page can be found by clicking on the "Corporate Governance" link in the "Investors" section of our website at www.aligntech.com.

The various policies and practices that we maintain and review regularly, including during the fiscal year ended December 31, 2023, foster responsible corporate governance. These policies include the following:

Global Code of Conduct
Corporate Governance Guidelines
Committee Charters
Our Code emphasizes our ongoing commitment to conducting business with integrity. It applies to all our directors, officers and employees. In addition to finding the Code on our website, stockholders may request a free copy of it by writing to Align Technology, Inc., 410 N. Scottsdale Rd., Suite 1300, Tempe, AZ 85288, Attn: Investor Relations or investorinfo@aligntech.com. We post on our website any amendments to the Code, as well as any required waivers pursuant to the rules of the Securities and Exchange Commission ("SEC") or the NASDAQ Stock Market LLC ("NASDAQ").
Our Guidelines establish the size and composition of our Board, director qualifications, independence requirements, nominations and elections, director compensation review and approval, and leadership development and succession among other topics.
Our Committee Charters establish the practices and procedures applicable to each committee. This year, our Board maintained four standing committees: an Audit Committee, a Compensation and Human Capital Committee, a Nominating and Governance Committee and a Technology Committee.

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Key Policies

Our corporate governance polices and practices establish the following key governance requirements:

One share equals one vote
We have a single class of shares with equal voting rights
Annual director elections
All directors are elected annually for a one-year term and our Board is declassified
Majority voting
We have a majority voting standard for uncontested elections of directors
Separation of Chair
and CEO roles
Our CEO is focused on managing Align and our independent Chair of the Board drives accountability at the Board level
Stockholder engagement
We have a longstanding and comprehensive year-round stockholder engagement program
Access to management
Our Board has significant interaction with senior management and access to other employees
Time commitment policy
The Nominating and Governance Committee annually reviews each director’s various time commitments
Succession planning
The Nominating and Governance Committee annually reviews Board and CEO succession planning and provides recommendations to the Board for CEO succession planning. The Compensation and Human Capital Committee regularly reviews executive succession planning for all levels below the CEO
Board, committee, and individual self-evaluations
Our Board, committees, and individual directors conduct annual performance self-evaluations led by our independent Chair
Independent Committees
Only independent directors sit on our committees
Access to Advisors
We pay for the Board and each of its committees to retain outside advisors and consultants at their discretion
Board Training
We support the ongoing development and expansion of knowledge of our directors through regular updates on trends and best practices in areas including governance, compliance, ethics and other topics deemed relevant to the fulfillment of their fiduciary duties and encourage and pay for third party trainings, seminars and workshops
Significant Stock Ownership Guidelines
We maintain meaningful stock ownership guidelines for executive management and non-employee directors. They each have five years after becoming subject to the guidelines to attain the requisite stock ownership. As of December 31, 2023, all such individuals were in compliance with these guidelines(1)
Hedging, pledging, and other transactions
We prohibit short sales, transactions in derivatives, pledging and hedging of our securities by directors, executive officers, and employees
Proxy access
An individual or a group of up to 20 stockholders owning at least 3% of our outstanding shares continuously for three years may nominate directors for election of up to the greater of two directors or 20% of our Board
Global Speak Up Policy
Our Speak Up Policy encourages current and former directors, employees and third-party business partners such as contractors, consultants, suppliers, distributors and even customers to voice their questions and concerns regarding conduct they believe in good faith to be inconsistent with the Code so that we may respond promptly, objectively, fairly, appropriately and without retaliation
Cybersecurity Leadership
We employ a dedicated Chief Information Security Officer ("CISO"), responsible for enterprise wide information security strategy and standards
Corporate Social Responsibility ("CSR") Leadership
We maintain a Vice President of Philanthropy, Inclusion and Wellness, and an Environmental, Social and Governance ("ESG") Strategy Committee
(1) For purposes of this policy, "ownership" includes shares of our common stock directly held or held in trust for the benefit of such director, member of executive management or their family members living in the same household and shares of our underlying restricted stock units held directly, whether or not yet vested. "Ownership" does not include vested or unvested options to purchase our common stock or shares underlying unvested MSUs.
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Board Structure and Independence

Our Board is currently made up of ten directors, two of whom were appointed in December 2023. Our Board has determined that all Board members, other than our President and CEO, Mr. Hogan, are independent under the applicable rules of NASDAQ.

Our Board maintained four standing committees in 2023, an Audit Committee, a Compensation and Human Capital Committee, a Nominating and Corporate Governance Committee and a Technology Committee. Our Board has furthermore determined that under applicable NASDAQ and SEC rules for committee memberships all committee members are independent and each member of the Audit Committee also meets the additional independence criteria set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our Board also has also determined that Ms. Anne Myong qualifies as an “audit committee financial expert” as that term is defined under SEC rules.

The roles of CEO and Chair are separated in recognition of the differences between the two roles. The CEO is responsible for setting our strategic direction and establishing key initiatives after consultation and input from our Board. The CEO furthermore provides our day-to-day leadership and monitors our performance against our initiatives. On the other hand, the Chair provides guidance to the CEO and, in consultation with the CEO and other members of our Board, sets the agenda for Board meetings and presides over meetings of the full Board. We believe this separation of duties allows the CEO and Chair to most efficiently use their time and fulfill their respective responsibilities, which are critical to our success. While our Bylaws and Guidelines do not require the Chair and CEO positions be separate, our Board believes that having separate positions and having an independent outside director serve as Chair is the appropriate leadership structure for us at this time.

Role of Our Board

Our Board is responsible for reviewing our overall performance, overseeing our management, and assuring the long-term interests of stockholders are served. To satisfy its duties, our Board reviews corporate objectives and strategies, evaluates and approves significant policies and proposed major commitments of corporate resources, selects, evaluates and provides for the succession of executive management and, subject to oversight by our Nominating and Governance Committee, nominates individuals for election at annual stockholder meetings to serve as our directors and appoints individuals to fill any vacancies on our Board.
Board Risk Oversight

Our Board takes an active role in overseeing corporate strategy with the intent to secure the long-term interests of stockholders. While management is responsible for the day-to-day management of the risks we face, our Board, as a whole and through its committees, is responsible for overseeing management in the competent and ethical operation of the Company. Our Board does not have a standing risk management committee. Rather, it administers its oversight responsibilities directly through the Board as a whole, as well as through the various standing committees that address risks inherent to their respective areas of oversight. When a committee receives reports, the chair of the committee discusses them with the full Board at subsequent Board meetings, which enables the entire Board to coordinate the risk oversight function.

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Risk Oversight Program
Board of Directors
The Board directly oversees corporate strategy, CEO succession planning, and other matters reserved for the full Board. The Board reviews and discusses with management significant risks affecting the Company. Our directors take a proactive, focused approach to their responsibilities by setting standards to ensure our business success is achieved through the highest standards of responsibility and ethics.
Audit CommitteeCompensation and Human Capital CommitteeNominating and Governance Committee
Technology Committee
Our Audit Committee assists our Board in areas of financial and investment risks, internal financial controls, cybersecurity, data privacy, crisis preparedness, and legal and regulatory requirements.
Our Compensation and Human Capital Committee assists our Board to manage risks arising from our compensation policies and practices.
Our Nominating and Governance Committee assists our Board to manage risks associated with Board membership and organization, long-term and emergency executive management and Board succession planning.
Our Technology Committee assists our Board to manage risks associated with technical and market risks associated with product development and investment and with data and analytics capabilities, and initiatives that leverage these capabilities, including artificial intelligence.
Management
Led by our CEO and executive team, management implements and supervises day-to-day risk management processes and reports significant matters to the Board and its committees. Executive management, other employees, consultants and advisors routinely attend and present at Board meetings and are available to address questions or concerns raised by our Board on risk management-related and other matters.
Internal AuditRisk Management Program
Internal Audit is directly overseen by the Audit Committee. Internal Audit identifies and helps mitigate risk and improve internal controls.
Our Board encourages management to establish a culture that actively promotes risk identification as part of our corporate strategy and day-to-day business operations. Furthermore, our Board encourages full and open communication between it and management. The Chair meets regularly with our CEO and other members of executive management to discuss strategy and the risks we face. Our directors take a proactive, focused approach to their responsibilities by setting standards to ensure our business success is achieved through the highest standards of responsibility and ethics.

Committee Responsibilities and Oversight
During the year, our Board maintained the Audit Committee, the Compensation and Human Capital Committee, the Nominating and Governance Committee and the Technology Committee. Each of the committees assisted our Board with risk management oversight within their areas of responsibility and apprised the full Board of significant matters and management’s response.

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Audit Committee
Audit Committee Report on Page 88
Members(1)
Meetings
Anne M. Myong (Chair)
Kevin J. Dallas
Andrea L. Saia
Greg J. Santora(2)
Warren S. Thaler(2)
9 meetings in 2023
(1) Mojdeh Poul was appointed to the Audit Committee in February 2024..
(2) Greg Santora and Warren Thaler served on the Audit Committee until their terms on the Board ended on May 17, 2023.

Our Audit Committee assists our Board in areas of financial and investment risks, internal financial controls, cybersecurity, data privacy, crisis preparedness, and legal and regulatory requirements, including those related to our employee benefit plans. Our Audit Committee also reviews, approves and monitors our Code and Speak Up Policy.

Financial Reporting and Audits

Our Audit Committee oversees and monitors our accounting and financial reporting processes, our financial statement audits, our internal accounting and financial controls, and our Internal Audit Department. It is responsible for appointing, compensating, retaining, terminating and overseeing the work of our independent auditors and for reviewing the auditors' proposed scope of work, approach and independence. Our Audit Committee also establishes procedures for receiving, retaining and treating complaints regarding accounting, internal accounting controls or auditing matters.

Compliance and Ethics

Our Audit Committee is responsible for reviewing compliance and ethics risks as well as the steps management takes to understand and mitigate these risks. The Global Compliance and Ethics Officer ("GCEO") is responsible for implementing and maintaining an effective compliance and ethics program, including the Code, Speak Up Policy and other policies, trainings and communications related to key risk areas such as anti-bribery, anti-corruption and ethical interactions with healthcare professionals. The GCEO is responsible for reviewing and assessing the effectiveness of our program against related laws and industry best practices.

Anti-Bribery and Anti-Corruption Compliance

Our Audit Committee oversees and reviews our Global Anti-Bribery and Anti-Corruption ("ABAC") Compliance Program. The Audit Committee receives periodic updates from the GCEO concerning the ABAC Program and related activities. In 2023, the GCEO met with the Audit Committee two times to discuss our ABAC Program.

Cybersecurity

Our Audit Committee is responsible for reviewing cybersecurity and other information technology risks and our cybersecurity program, including our cybersecurity controls, policies and procedures. Our information security team annually performs a cybersecurity enterprise risk assessment and presents the results to management and the Audit Committee. The Audit Committee periodically reports on its review of cybersecurity risks and our cybersecurity program to our Board. To more effectively address cybersecurity threats, we have a dedicated CISO who is responsible for leading enterprise-wide information security strategy, policy, process, and technology. Our information security program includes, among other things, cybersecurity incident response, vulnerability management, antivirus and malware protection, technology compliance and risk management, encryption, identity and access management, application security, and security monitoring. The program also has an information security awareness program, which includes annual training regarding our acceptable use and information classification and handling policies, regular phishing campaigns complemented by additional employee training as appropriate, and communications and companion trainings to keep our users informed on current events. In 2023, the CISO or his team met with the Audit Committee four times to discuss cybersecurity risks and threats.

In the event of an identified cybersecurity incident, we have developed a detailed cybersecurity incident response process, which outlines the steps to be followed from incident detection, analysis, containment, eradication, recovery, and notification, including notifying functional areas (e.g. information technology, legal, finance, operations and privacy), as well as senior leadership and the Audit Committee, as appropriate. Additionally, for critical
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cybersecurity incidents, processes have been established for our legal team to determine the materiality of each incident. In 2023, the Audit Committee reviewed our cybersecurity incident response process and our processes to determine the materiality of each critical cybersecurity incident.

Data Privacy

Our Audit Committee is responsible for overseeing and monitoring the Company’s data privacy risks, controls, and procedures, including the Company's plans to mitigate cybersecurity risks and to respond to data breaches. Our Audit Committee receives periodic updates on our data privacy program and in its oversight role, sets the expectation that the Company must address the risks we face and take action to mitigate those risks. We have various technical, administrative, and physical safeguards in place to help protect against unauthorized access to, use, or disclosure of the customer, consumer, and patient information and data we collect and store. We have dedicated privacy experts who advise the business on privacy risks and assesses the effectiveness of privacy controls and compliance with various legislative and regulatory requirements. In 2023, our Compliance and Privacy Officer met with the Audit Committee two times to discuss data privacy matters.
Compensation and Human Capital Committee
Compensation and Human Capital
Committee Report on Page 64
Members(1)
Meetings
George J. Morrow (Chair)
Anne M. Myong
Andrea L. Saia
Greg J. Santora(2)
8 meetings in 2023
(1) Kevin Conroy was appointed to the Compensation and Human Capital Committee in February 2024.
(2) Greg Santora served on the Compensation and Human Capital Committee until his term on the Board ended on May 17, 2023.

The Compensation and Human Capital Committee assists our Board to manage risks arising from our compensation policies and practices. It ensures that our compensation programs successfully align the interests of employees, including executive management, with those of our stockholders. Align routinely seeks the input of our stockholders regarding our compensation practices through our stockholder engagement program and members of the Compensation and Human Capital Committee join those discussions as appropriate. The Compensation and Human Capital Committee also reviews and administers all compensation arrangements for executive management and reviews general compensation goals and guidelines for our employees and the criteria for which bonuses are determined. It evaluates the various elements of our compensation programs to avoid encouraging, and to mitigate against, excessive risk taking by promoting behaviors that support sustainable value creation. Additionally, our Compensation and Human Capital Committee retains, oversees, and assesses the independence of our compensation consultants and advisors. In 2021, the charter of our Compensation and Human Capital Committee was amended to empower it to oversee our diversity, equity and inclusion initiatives and was further amended in 2022 to provide oversight of human capital management.

Compensation and Human Capital Committee Interlocks and Insider Participation

None of the members of our Compensation and Human Capital Committee is, nor has ever been, a member of our executive management or an employee. None of the members of executive management currently serves, or in the past year has served, as a member of the Compensation and Human Capital Committee or director (or other Board committee performing equivalent functions or, in the absence of any such committee, the entire Board) of any entity that has one or more members of executive management serving on our Compensation and Human Capital Committee or our Board.

Nominating and Governance Committee
MembersMeetings
Joseph Lacob (Chair)
C. Raymond Larkin, Jr.
George J. Morrow
Susan E. Siegel
Warren S. Thaler (1)
4 meetings in 2023
(1) Warren Thaler served on the Nominating and Governance Committee until his term on the Board ended on May 17, 2023.

Our Nominating and Governance Committee assists our Board to manage risks associated with Board membership
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and organization as well as long-term and emergency executive management and Board succession planning.

At the request of our Board, our Nominating and Governance Committee conducts annual reviews and makes recommendations concerning Board and executive management succession. It evaluates the composition, organization and governance of the Board and its committees and identifies, evaluates and recommends nominees to the Board. In 2023, the Nominating and Governance Committee managed the process and search by which two new directors were appointed to our Board following the departure of two longer-tenured directors. Our Nominating and Governance Committee also develops and recommends corporate governance principles applicable to Align and is responsible for the assessment, analysis and implementation of policies, practices and programs involving various aspects of our ESG initiatives.

Technology Committee
Members
Meetings
Kevin J. Dallas (1)
Joseph Lacob
Andrea L. Saia
Susan E. Siegel
Warren S. Thaler(2)
1 meeting in 2023
(1) Kevin Dallas was appointed as the Chair of the Technology Committee in February 2024.
(2) Warren Thaler served on the Technology Committee until his term on the Board ended on May 17, 2023.

Our Technology Committee assists our Board to evaluate major technology plans and strategies, including technical and market risks associated with product development and investment. It reviews our technology and development activities and oversees and advises our Board on matters of innovation and technology. It also reviews and monitors delivery of data and analytics capabilities, and initiatives that leverage these capabilities, including artificial intelligence.
Annual Committee and Board Evaluations

To ensure that our Board and its committees are performing effectively and in our best interests and those of our stockholders, our directors perform an annual assessment of our Board and its committees.

Board Meetings

Our Board holds meetings at least quarterly, and the committees hold meetings at least annually. For the period of their service on the Board and each applicable committee in 2023, each director attended at least 75% of the aggregate of the total number of meetings of our Board and the committees on which they each served. Our Board held six meetings in 2023.

Our Guidelines provide that our independent directors meet in executive session at least twice a year. The independent directors met in executive sessions four times in 2023.

Our Board members are encouraged, but not required, to attend annual meetings of stockholders. Last year, four directors attended our 2023 annual meeting of stockholders.

Stockholder Communications with the Board

Stockholders may communicate directly with our non-management directors by sending an email to Board@aligntech.com. These communications are monitored to ensure appropriate summaries of all received messages are provided to our Board at its regularly scheduled meetings. Where the nature of a communication warrants, our Executive Vice President, Chief Legal and Regulatory Officer may decide to obtain the more immediate attention of an appropriate committee of our Board or a non-management director, executive management or independent advisors. After reviewing stockholder messages, our Board will determine an appropriate response if they deem a response necessary or warranted.
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Stockholder Engagement
Stockholder Outreach and Engagement
Meaningful Compensation and Governance Changes

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Stockholder Engagement

Stockholder Outreach and Engagement

Recognizing that stockholders are the owners of Align, we maintain consistent, frequent and open dialogue as part of our proactive Investor Relations function to actively inform and educate existing and potential stockholders on Align’s business and financial performance, as well as encourage and welcome feedback from stockholders regarding all aspects of our business, including our executive management compensation program and the outreach program itself. Our engagement is year-round day-to-day communication with stockholders and is managed by our Investor Relations Officer (“IRO”). Proactive outreach can include members of our Board and various members of executive management, including our CEO, CFO, IRO and other organizational leaders from select internal organizations, including Finance, Human Resources, Legal, Regulatory Affairs, Quality Assurance, Operations, Sales and Marketing, Research and Development, Clinical, and Product Development. We use this outreach to provide stockholders with timely, accurate, consistent and transparent information on our strategy, products and technology and business performance, as well as addressing issues expressed by our stockholders, sharing our underlying vision, the rationales for our compensation programs and the impact of Board oversight in key areas.

In 2023, in-person and virtual meetings and events remained accessible to our stockholders. During 2023, we contacted stockholders representing more than 57% of our shares outstanding and involved, as available, our Executive Vice President, Global Human Resources, our Executive Vice President, Global Finance and Chief Financial Officer, our Executive Vice President, Chief Legal and Regulatory Officer, our Vice President Global Communications and Investor Relations Officer, our Vice President Associate General Counsel, Corporate Securities, and periodically a member of our Board, including the Chair of the Nominating Governance Committee and the Audit Committee. We spoke with stockholders representing approximately 22% of our shares outstanding. We also engaged with stockholders through in-person and virtual investment analyst-sponsored industry conferences, non-deal roadshows, and field trips and bus tours during the year. We hosted an Investor Day in September 2023 with stockholders representing over 10% of our shares outstanding attending in-person and an additional 260 viewers who attended via the webcast from around the globe.

Input from stockholders, analysts and customers is shared internally, including with our Board and its committees, to be used in future strategic, operational, compensation and governance decisions, as appropriate. Feedback from the majority of stockholders with whom we spoke in 2023 was positive despite worsening macroeconomic conditions. Throughout our many discussions with stockholders, they remained engaged and willing to provide feedback and suggestions regarding our Board structure and composition, executive compensation practices, sustainability policies, human capital management, Board and CEO succession planning, executive management, governance, diversity and inclusion, our return to office working policies and other various topics of importance to them, including our strategy, financial model, business performance, competition, and guidance practices. While several stockholders offered suggestions for alternative ways to structure our executive management compensation program, including diversifying and enhancing our annual cash incentive compensation plan and long-term equity compensation components, none insisted that alterations were required.
















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Meaningful Compensation and Governance Changes Reflects Stockholder Feedback

In recent years, our Board, Nominating and Governance Committee and Compensation and Human Capital Committee have carefully considered feedback from our stockholders and taken action where appropriate. Recent examples include the following:

Appointment of New Board MembersAppointing two new Board members in 2023 that replaced two longer-tenured directors and increased the diversity of our Board
Adoption of Clawback PolicyAdopting a clawback policy that provides for the recoupment of executive compensation in certain circumstances
Reduced CEO Target Pay
Reducing the target value of Mr. Hogan's long term incentive grant from $13.5M in 2023 to $12.5M in 2024, to better align with stockholder expectations
Amend Bylaws
Amending our bylaws to include proxy access provisions and clarifying director nomination requirements. See "Board Composition and Refreshment" below for more information
Amend Charter of NGC
Amending the charter of our Nominating and Governance Committee to assign to it Board oversight of ESG efforts and disclosures
Amend Charter of Compensation Committee
Amending in 2022 the charter of the then Compensation Committee to assign to it oversight responsibilities of human capital management strategies, programs and policies in addition to its oversight of diversity, equity and inclusion initiatives. In doing so, the Board deemed it important to rename the committee as the Compensation and Human Capital Committee in recognition of its additional human capital management oversight responsibilities
Expand ESG Disclosures
Expanding disclosures concerning ESG related matters, including corporate responsibility, sustainability and human capital management, on our website and in our securities filings including, most recently, those set forth in our Annual Report on Form 10-K filed with the SEC on February 28, 2024, and in this proxy statement
Form ESG Strategy Committee
Forming an ESG Strategy Committee overseen by key members of executive management to gather data and develop strategies in ways that allow us to incorporate ESG principles into our strategic objectives
Establish CSR Committee and Oversight
Creating a CSR organization, appointing a full-time dedicated Vice President of Philanthropy, Inclusion and Wellness, and a Vice President of Global Real Estate, Workplace Services and Sustainability, establishing a CSR Committee, and establishing the philosophical pillars of our CSR program
No One-Time Equity Awards to Executives
Pledging not to award significant one-time equity awards to members of executive management, including our CEO, without prior consultation with stockholders
Increase Proxy Engagement
Increasing the focus, frequency, and breadth of stockholder proxy engagement in order to ensure we consistently foster relationships and more effectively capture and address stockholder suggestions and feedback regarding proxy related matters


















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Corporate Social Responsibility
Accountability and Governance
Sustainability
Employees
Community

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Corporate Social Responsibility

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Our vision is to make clear aligner orthodontic treatment accessible to everyone globally and realize our purpose of transforming smiles and changing lives through doctor directed and supervised treatment. We understand our impact is not limited to improving patient health through medically supervised use of a prescription medical device. We are responsible for increasing awareness of the overall health benefits of straighter teeth and better oral hygiene by making clear aligner therapy the standard of care for the treatment of malocclusion in orthodontics and restorative dentistry.

Straightening your teeth is not only about aesthetics and a beautiful smile. It can improve chewing and speech function, ease pain related to TMJ disorder, and reduce the risk of cavities, gum disease and other oral health issues. The majority of the world’s population have some form of malocclusion or crooked teeth, however, only a fraction receive orthodontic treatment because access to care is limited by a number of factors including the manual nature of traditional orthodontic treatment using metal wires and brackets. By continually innovating and developing digital technologies and services that enable more dental health professionals to easily diagnose and treat patients with crooked teeth, and help them retain their healthy beautiful smiles, we are increasing access to care for millions of people who might not otherwise receive orthodontic treatment. We believe the digital transformation of dental practices and treatment modalities has a significant positive impact on people's oral health, overall health, and our society.

It does not stop there, however. We believe that establishing a sound foundational skeletal and dental structure is fundamental for lifetime oral and overall health, equally as important as good oral hygiene and regular check-ups in helping to prevent the oral diseases closely linked to non-communicable diseases such as diabetes, heart disease and a host of other serious conditions that exact a costly toll on people, governments and society. We are driving the evolution of comprehensive digital dentistry from diagnosis and prevention through orthodontic and restorative dental treatments, and treatment monitoring with technologies that improve patient access and outcomes, expand doctors' reach, capacity and accelerate practice efficiencies.

We also understand that as an organization our impact is not limited to improving patient oral and overall health. Interacting ethically and constructively with our employees, customers, patients, suppliers, and stockholders in the
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environment and the communities around the globe in which we operate is fundamental to achieving our purpose and creating value for investors who put their trust in us.

We continuously assess our actions and evaluate our success based on four areas: the standards we set for ourselves and how we hold ourselves and those around us accountable to those standards; environmental sustainability; establishing and maintaining a corporate culture that encourages respect, wellness and the growth of our employees; and contributing to the communities in which we live and work.
Accountability and Governance

Evaluating the impact we have on our employees, our community, our environment and proactively making improvements to create a positive impact

Our Board and senior management believe that for us to fulfill our mission, we must conduct our business ethically and demonstrate our integrity through open and clear disclosures that foster transparency and accountability. This is not only the right thing to do, but it is essential to building the trust and credibility required to generate engagement and loyalty in our employees, deliver against our business goals and improve the lives and health of those we serve. It strengthens our brand, and ultimately increases value for all of our stakeholders.

We focus first on those ESG matters most closely associated with the impact of our operations and products on our customers, patients and employees, and then more broadly on the impact to our communities and the world at large. We then tailor our initiatives to align with our strategic growth drivers, allowing us to also meet the demands placed on us by our stockholders and the constituents we serve. We believe that maintaining ethical, transparent ESG oversight starts at the top with dedicated time and attention from our Board and executive management team.

Our Nominating and Governance Committee oversees our ESG strategy, initiatives, and disclosures and receives regular updates from our CEO and other members of executive management throughout the year.
Our cross-functional ESG Steering Committee - drawn from our Executive Management Committee and senior leadership - is tasked with assessing the regional and global impacts and environmental risks of our operations and the products we produce in the areas of sustainability, climate, human capital management, and philanthropy. The ESG Steering Committee also coordinates the policies, practices and initiatives needed to meet our corporate goals.
Our Compensation and Human Capital Committee is specifically chartered and empowered to oversee our diversity, equity and inclusion initiatives and oversee human capital management.
Our Audit Committee is tasked with overseeing a wide variety of risks related to our operations, including our Code, Speak Up Policy and cybersecurity, amongst many others.
Our Technology Committee is charged with supervision of our artificial intelligence processes, governance, implementation and risk management.

Sustainability

Recognizing resources are finite and should be used wisely with a view to reducing our environmental impact

We are committed to environmental protection and continuously minimizing the environmental impacts of our supply-chain, processes, and services. To help us achieve these commitments, we integrate sustainability into our business operations and products in ways that help manage our environmental impact, mitigate risk, reduce costs and increase stockholder value.

We have embarked on a multi-year strategy to advance our ESG initiatives. In fiscal year 2023, we continued to evaluate our global ESG risks and impacts and continue to have various research, development and operational initiatives underway designed to mitigate climate risks and our environmental footprint. This evaluation phase includes development of a Sustainability Materiality Assessment, an internal review of domestic and international laws governing sustainability, and continuing analysis of various ESG management and reporting frameworks and regulations. Separately, we continued to assess our governance structures for managing ESG topics.

EMS. We have implemented an environmental management system (EMS) at our large manufacturing locations. The system is modeled after the ISO 14001:2015 standard and managed by our Environmental, Health and Safety (EHS) staff.
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Renewable Energy. Our transition to renewable energy sources is significant. We continue to move away from fossil fuels and other non-renewable energy sources by increasing procurement of energy from renewable sources and expanding the use of on-site solar photovoltaic (PV) systems.
Renewable Energy Procurement. We have entered into agreements to procure renewable electricity for large portions of our operations, increasing our sourced renewable energy by 13% year-over-year. Renewable energy currently comprises approximately 68% of our total power consumed.
Energy Generation. We have added 600Kw to our overall PV systems and increased our solar capacity by 47% to over 2,000 MWh annually, generating close to $400K in annual utility savings. Pending final regulatory approvals to activate additional installed PV systems, we expect to double our solar capacity to roughly 4,000 Kw, which we expect will drive more than $1 million in annualized utility savings. Furthermore, we are evaluating plans to bring online additional PV capacity generating in the future.
Strategically Leveraging Proximity and Smart Building. We continue to bring operations closer to our customers, and are expanding production at our newest manufacturing facility in Wroclaw, Poland. This site further diversifies our manufacturing operations to mitigate the risk of unexpected operating shutdowns or delays at our facilities in Mexico and China and is also expected to reduce the overall costs and impact of transporting raw materials to our facilities and finished products to our customers. We are also investing in energy-efficient building designs and controls along with adopting Leadership in Energy and Environmental Design (LEED) principles for all new or modified workspaces, which we expect to reduce energy usage, costs and greenhouse gas emissions.
Water Conservation. We have implemented initiatives to conserve water, including outfitting most of our facilities with low-flow toilets and faucet sensors, recycling water for vegetation and grey water use and installing catch basins to collect and use rainwater for operations at our manufacturing location in Juarez, Mexico. Our Best Management Practices and Policy (BMP) promotes the sharing of innovative sustainability programs and ideas company-wide. These efforts have not only reduced our environmental impact but also led to cost savings.
Materials and Waste reduction and Recycling. We have made substantial progress in waste reduction by implementing comprehensive recycling and composting programs, using sustainable materials, minimizing single-use items, and encouraging responsible consumption among employees. We have and are implementing programs to reduce waste from our operations, including:
We have focused on our plastic waste management efforts with our customer base and continue to build a comprehensive recycle program to address the entire waste profile (manufacturing and customer/patient). Seventy percent of Align’s total plastic waste is generated in manufacturing with greater than 95% of this waste being sent to an energy recovery partner.
We have spent in excess of $100 million on processes that we expect will materially reduce the amount of resin used in the manufacturing of our products, including our recent acquisition of Cubicure, GmbH, a company whose direct fabrication technologies and processes will improve the functionality of our products. Since 2016, product design and manufacturing innovations have enabled a roughly 50% reduction in the polymer content used in our aligner fabrication process and a 33% reduction in the amount of resin used in our aligner molding. We expect further reductions as we deploy Cubicure's direct fabrication capabilities at scale.
Expanding the use of intraoral scanners such as our iTero scanners to decrease the time required to deliver our products to customers while reducing the need for traditional polyvinyl-siloxane impressions, the mining of the materials used to make those impressions and the costs and environmental impacts of shipping those impressions.
Separating water from resin waste prior to water leaving the manufacturing site to reduce the risks of groundwater contamination.
Powering the operations of a strategic third-party incinerator using the majority of our scrap and waste generated by our manufacturing processes, significantly reducing the amount of waste entering landfills.
Repurposing scrap and waste plastics generated at our manufacturing location in China for reuse in floor tiles.
Redesigning our packaging materials to decrease the environmental impact of the materials used in the packaging and shipment of our products.
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Piloting Invisalign clear aligner recycling programs that encourage customers and their patients to return used aligners for recycling.
Working to eliminate single use plastics in our facilities.
Responsible Procurement Practices. Our suppliers are essential to all aspects of our business and our supplier relationships are based on trust and shared commitments to ethical and legal conduct. We select key suppliers that have implemented sustainable business practices to serve our core business processes.
We expect our supply partners to follow the highest standards in the industry, such as ISO 14001, and we require our suppliers to adhere to responsible sourcing. We prohibit our suppliers from profiting from the sale of tantalum, tin, tungsten, and gold ("conflict minerals") that funds conflict in the Democratic Republic of the Congo and adjoining countries and require them to source such minerals from socially responsible suppliers.
Our suppliers are asked to comply with our Code through which we expect them to respect human rights and treat others fairly, including complying with labor and employment laws, namely minimum wages, overtime, forced and child labors, not unlawfully confiscating immigration documents, and respecting the rights of individuals to return to their home countries.

Employees

Prioritizing our employees' development, wellness and safety, and valuing our employees' differences and perspectives

We believe our success is driven by a diverse workforce characterized by differing backgrounds, beliefs, perspectives and skills. We also strongly believe that the motivation, support, safety, and well-being of employees is fundamental to our success. Our employees must comply with our Code and are regularly asked to read and acknowledge their obligations under the Code. We also strengthen our organization by creating and following values that honor our employees:

Authenticity and Integrity. We are committed to a culture in which we conduct our business ethically, responsibly and transparently and inform our employees of our expectations through well-designed policies and procedures that start with our Code.
Listening and Empathizing. We encourage active listening and development of healthy and respectful relationships in which employees can openly and honestly express their thoughts, opinions, hopes and concerns for the betterment of the organization and all its stakeholders. We value our employees' collective voices and as a result utilize a continuous employee listening strategy that includes globally managed pulse surveys, employee lifecycle surveys, and a self-service feature to support listening efforts for our global employees have a continuous listening strategy. We leverage survey results and comments to seek ways to make positive changes throughout the organization.
Developing our Talent. We have confidence in our employees and encourage them to actively manage their own careers and development using our learning and development resources. Align University Online enables our global employee population to access a diverse portfolio of approximately one thousand self-directed courses in up to 80 languages. We also offer a full suite of custom leadership development programs, beginning with aspiring leaders, continuing with managers and directors, and culminating with executive development opportunities. Our global initiative, Voyage, offers a set of tools, resources and a new mindset, empowering employees to start thinking differently about career growth by embracing development opportunities in new and sometimes unexpected ways. Voyage helps employees experience their career through four distinct lenses: Self, Networks, Experience and Skills. Since its launch, 45% of our employee population has interacted with Voyage with over 108,000 total visits. In addition to our navigation site, we host two Voyage Set Sail weeks annually, where we offer experiential learning for individuals and teams utilizing activities that helps keep development as a focus for our employees. This helps us attract and retain an engaged and productive workforce.
Balanced and Fair. We welcome differences as opportunities for learning, overcoming challenges and thinking creatively. We serve customers and patients in over 100 countries, making inclusion, diversity and belonging essential for our growth. We are committed to building a workforce of diverse cultural backgrounds and life experiences through fair and balanced policies and practices. A variety of employee resources and standards embody our commitment to inclusion and diversity, including our employee
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resource groups that focus on the professional development, recruitment, and cultural awareness of underrepresented groups. We were recognized in Newsweek’s list of America’s Greatest Workplaces for Diversity in 2024.
Health, Wellness and Safety. We prioritize the health, safety and well-being of our employees and their families.
We have implemented extensive training programs focused on keeping our employees safe while on our premises and while working remotely.
We offer compensation that is competitive in our industry so employees can feel financially secure and can in turn contribute to the well-being of their families and the economies and communities in which they live.
We offer a wide variety of robust programs and initiatives designed to promote the overall health and welfare of all our employees and their families. Every year, we have a month dedicated to well-being, called Month of Wellness. Throughout the Month of Wellness, employees participate in a variety of activities such as informational sessions and health fairs and receive useful resources aligned to our wellness pillars - mental resilience, physical well-being and healthy living, social/family connections, and financial wellness. This provides our employees with a variety of meaningful ways to embrace wellness and well-being including mindfulness, meditation, nutrition and mental wellness activities, exercise, hikes, yoga, volunteer activities, financial education sessions, social events, and stress management.

We have received numerous awards for our positive work environment and culture. Some of the certifications, awards and recognitions recognized or received in 2023 and 2024 include:

U.S. News & World Report - Best Companies to Work For and Best Companies to Work For in the Health Care Industry
Forbes - World’s Best Employers
Great Places to Work and Best Places to Work based on our employee-validated great workplaces in the following countries, Australia, Brazil, China, Costa Rica, Germany, India, Italy, Korea, Singapore, Taiwan, Thailand, UK, Vietnam and United States (Raleigh, North Carolina)
Best Places to Work for Women in Korea
Computerworld - Best Place to Work in IT, based on its survey of organizations across the U.S. to identify those that provide the best benefits and amenities for IT professionals
Dun & Bradstreet - Top Tech Companies to Work for in Israel
LinkedIn - Top Companies to Grow Your Career in Israel and Poland
Mercer - Outstanding Women Care Award in China

For further discussions of our diversity and inclusion initiatives as well as our many employee policies, benefits, achievements and awards please see "Human Capital" under Part I, Item 1 (Business) of our Annual Report on Form 10-K filed with the SEC on February 28, 2024.
Community

Contributing to the communities in which we live and work by using our talents and resources

Contributing to our communities is important in our culture. Our overall philanthropic philosophy is to support organizations whose visions tie closely to our own - transforming smiles, supporting and educating youth/teens, and advancing technology through research and other partnerships with learning institutions and/or foundations. We also focus on the needs of our communities, employees, customers and their patients, and healthcare workers in general.

Launched in 2020, the Align Foundation provides a structured means by which significant donations are directed from a donor-advised fund overseen by Fidelity Charitable, with the flexibility to provide smaller monetary donations, processes to donate our products, as well as an organized way to involve our employees in giving activities. We and our employees made significant donations of money, materials and effort in 2023:
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We were honored as a “Technology Partner of the Year” by Junior Achievement, an organization that delivers hands on, immersive learning in work readiness, financial health, entrepreneurship, sustainability, STEM, economics, and more. In addition, we engaged in several volunteer activities with Junior Achievement including hosting the first artificial intelligence career summit for around 200 high school students in our San Jose, California office.
Since 2013, we have been a proud supporter of Operation Smile, a global medical nonprofit providing hundreds of thousands of free surgeries for people born with cleft lips and cleft palates in low and middle-income countries. For the third year, we sponsored Operation Smile’s International Student Leadership Conference, a powerful opportunity for high schoolers around the world to change lives and change their own. As part of our sponsorship, we provided scholarships for 24 participants from 8 different countries plus an additional 10 scholarships for students personally impacted with a cleft condition. As of December 31, 2023, we had donated approximately $2.7 million to Operation Smile.
For 16 years we have supported America’s ToothFairy, an organization with a mission to increase access to oral health care and education for underserved children in the United States by supporting nonprofit clinics and community partners. As of December 31, 2023, we have provided almost $2 million for the foundation’s operational expenses and children’s oral health programs. With our support in 2023, more than 1.3 million children living with restricted access to care in communities across the country received dental care and/or oral health instruction through America’s ToothFairy programs and the safety-net dental clinics they support, a 54% increase over the prior year.
We have also established programs to support our doctors that treat patients who may not be well-suited for wearing and managing fixed appliances due to health issues, allergies, disabilities or specific health disorders through discounted fees and other support.
We held our 6th annual Month of Smiles in October 2023, where each of our more than 22,000 employees are encouraged to participate and make a positive difference through volunteerism, charitable donations, fundraising activities, and intentional acts of goodness. Although the Month of Smiles happens in October, the giving continues through the rest of the year and we are continuously amazed with the participation by and impact of our employees.
Our partnership with Benevity, a corporate purpose platform, continues to transform our workplace, culture, and the communities where we live and work. It is a platform where employees can find ways to make a difference through volunteer activities, donation opportunities, charitable education, ad hoc matching programs, and volunteer rewards.
In both Canada and the United States, Invisalign® product donation programs bring smiles to young individuals. Through Align’s Acts of Random Kindness (ARK) program, Invisalign-trained doctors collaborate to provide a straight smile to young patients dealing with health conditions. Since 2019, Align has extended a helping hand to over 200 patients by waiving the lab fees for their treatments through the ARK program. In 2023, Align established a partnership with two non-profit organizations: Smiles Change Lives and Smile for a Lifetime. These organizations offer an affordable option for families who cannot bear the full cost of teeth straightening treatment for their children. As part of this program, Align waives lab fees and enables treatments through Invisalign-trained doctors who donate their time, skills, and practice resources.
Employees at our site in Juarez, Mexico which represents our largest aggregate employee population, have a longstanding partnership with United Way Chihuahua, an organization that advocates for the health, education, and financial stability of every person in every community. Through our site’s voluntary payroll deduction program, our Juarez employees generously contributed over $85,000 USD to support United Way Chihuahua. Beyond monetary contributions, Juarez employees engaged in numerous volunteer events with United Way which served as avenues for employees to directly engage with the community, fostering meaningful connections and making tangible differences in the lives of those in need; and
We partnered with universities, dental schools, hospitals, and clinics that support education, leadership and diversity among current and future GP doctors and orthodontists. In 2010, Align began the Research Award Program with the goal to support clinical and scientific orthodontic and dental research in universities across the globe. Since its inception in 2010, we have funded over approximately $3 million in research awards. Research has provided insights into various areas including tooth movement efficacy with clear aligner therapy, oral hygiene and microbial bacteria presence or absence with clear aligners, and comparisons in quality of life with aligners as compared to fixed appliances. We have committed $300,000 that will be awarded to university faculty for scientific and technological research initiatives in 2024 to advance patient care in the fields of orthodontics and dentistry.
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Directors
Board Composition and Refreshment
Director Nominees
Board Diversity Matrix

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Directors

Our Board consists of a diverse group of highly qualified leaders in their respective fields, all of whom have senior leadership experience at large domestic and multinational companies. In these positions, they have gained significant and diverse management experience, including strategic and financial planning, public company financial reporting, compliance, risk management, and leadership development. They also have in-depth public company experience serving as executive officers, or on boards of directors and board committees, and have a robust understanding of corporate governance practices and trends. Our Board and Nominating and Governance Committee believes the skills, qualities, attributes, and experiences of our directors provide us with business acumen and a diverse range of perspectives to effectively address our evolving needs and represent the best interests of our stockholders.
Board Composition and Refreshment

Our Board considers its composition and refreshment annually and our Nominating and Governance Committee is tasked with managing succession planning and recruitment.

Qualifications and Diversity

Our Nominating and Governance Committee has specified the following minimum qualifications it believes must be met by a nominee for a position on our Board:

the highest personal and professional ethics and integrity;
proven achievement and competence in the nominee's field and the ability to exercise sound business judgment;
skills and experience that are complementary to those of the existing directors;
the ability to assist and support management and make significant contributions to our success; and
an understanding of the fiduciary responsibilities required of a member of our Board, including care, loyalty, and good faith along, with the commitment of time and energy necessary to diligently seek out, oversee and make decisions consistent with those responsibilities.

Our Board seeks directors who represent a mix of backgrounds, skills, and experiences, including candidates of diverse gender, race and ethnicity, that will enhance the quality of deliberations and decisions. Moreover, our directors have diverse business and professional backgrounds, including experience in finance and accounting, venture capital, medical device, consumer products, technology, cybersecurity, brand management and international sales, marketing and operations. Such diversity considerations are discussed by our Nominating and Governance Committee in connection with the general qualifications of each potential nominee.

Identifying Nominees

Our Nominating and Governance Committee considers candidates for Board membership suggested by our Board, executive management and stockholders. Our Nominating and Governance Committee also periodically retains third-party executive search firms to identify independent director candidates. In 2023, our Nominating and Governance Committee retained a third-party executive search firm to assist with the identification and evaluation of potential independent director candidates following the end of terms for two Board members not standing for re-election at the 2023 Annual Meeting. In considering candidates for director nominees, our Nominating and Governance Committee generally assembles information regarding a candidate's background and qualifications. Our Nominating and Governance Committee, in its discretion, may designate one or more of its members to interview any candidate. In addition, our Nominating and Governance Committee may seek input from executive management or other members of our Board, who may interview any candidate. Our Nominating and Governance Committee recommends nominees on its assessment of the backgrounds, experiences and overall suitability to serve on our Board in accordance with our policy regarding nominations and qualifications of directors.

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Under our Guidelines, our Nominating and Governance Committee considers candidate recommendations from stockholders holding at least 1% of the total outstanding shares of our common stock continuously for at least 12 months prior to the date they submit their recommendation. Our Nominating and Governance Committee will consider persons recommended by our stockholders in the same manner as nominees recommended by our Board, individual board members or executive management. A stockholder may also nominate a person directly for election to our Board at an annual meeting of our stockholders provided their proposal meets the requirements set forth in our Bylaws and the rules and regulations of the SEC related to stockholder proposals.

Pursuant to our proxy access provisions, a stockholder (or a group of not more than 20 stockholders) holding at least 3% of our outstanding common stock continuously for at least three years is entitled to nominate and include in our proxy materials director nominees constituting up to the greater of two individuals or 20% of our Board, provided that the nominating stockholder(s) and the nominee(s) satisfy the requirements specified in our bylaws, including providing us with advance notice of the nomination and other ownership requirements. The required notice must include the information and documents set forth in the bylaws and, with respect to our 2025 annual meeting of stockholders, must be provided to the Corporate Secretary at the address listed above between November 10, 2024 and December 10, 2024.

Any notice of director nomination submitted to Align other than as described above must include the additional information required by Rule 14a-19(b) under the Exchange Act. The process for properly submitting a stockholder proposal, including a proposal to nominate a person for election to our Board at an annual meeting, is described below in the answer to the question, "Is there any information that I should know regarding future annual meetings?"

Board Refreshment

In 2023, our Board added two new independent directors, and since 2017 it has added five new independent directors, each of whom has brought valuable and diverse backgrounds and perspectives to our Board overall. Moreover, since 2021, three longer-tenured directors have rotated off the Board. As an innovative technology company in the highly regulated medical device industry, our directors bring considerable experience overseeing sales and marketing, operations, finance and accounting, research and development, legal, regulatory and compliance and corporate governance, all practices essential to our success. Our refreshment process reflects a balanced approach that allows us to benefit from our valued tenured members who know and understand our company, while also seeking new members with experiences that add future value. We are committed to maintaining a Board that blends a diversity of backgrounds with strategic expertise in varying fields and who offer perspectives in areas key to our mission, vision and strategic growth and expansion of our business into key domestic and international markets, including technology, cybersecurity, healthcare, life sciences, medical devices, e-commerce, consumer products and manufacturing.

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Director Nominees
Kevin T. Conroy
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Age: 58
Director Since: 2023
Roles: Independent Director
Committees: Compensation and Human Capital Committee
Experience:
2009 - Present

2005 - 2008

2004 - 2005

Prior

CEO and Chairman of the Board (2014), Exact Sciences Corp. (molecular diagnostics company)
President and CEO, Third Wave Technologies, Inc. (molecular diagnostics company)
General Counsel, Third Wave Technologies, Inc. (molecular diagnostics company)
Various Leadership Positions at GE Healthcare (medical technology company)
Other Board Positions
Adaptive Biotechnologies Corporation (2019-2023)
Epizyme, Inc. (2017-2022)
CM Life Sciences II Inc. (2021)
SomaLogic, Inc. (2021)
Arya Sciences Acquisition Corp. (2018-2020)

Notable Experience and Key Board Contributions
Mr. Conroy has extensive experience creating stockholder value as a business, legal, corporate strategy, and executive leader and has significant experience in the healthcare and the molecular diagnostics industries.
At Exact Sciences, Mr. Conroy has developed Cologuard and the company has grown to $2.5B in revenue while serving 4 million patients.
At Third Wave, Mr. Conroy developed and brought a novel cervical cancer screening test, Cervista, to patients.

Education
B.S. in Electrical Engineering from Michigan State University
J.D. from the University of Michigan Law School


Kevin J. Dallas
https://cdn.kscope.io/70c16175132386154e586fc445c34cdc-Kevin Dallas.jpgAge: 60
Director Since: 2018
Roles: Independent Director Chair of Technology Committee
Committees: Technology Committee; Audit Committee

Experience:
2023 - Present
2020 - 2022

1996 - 2020

Prior

CEO, EnterpriseDB Corporation (software company)
CEO, Wind River Systems, Inc. (software company)
Corporate Vice President, Cloud & AI Business Development, Microsoft (software company)
Various Positions, NVIDIA Corporation (technology company)
Various Positions, NVIDIA Corporation and National Semiconductor, now Texas Instruments Inc. (technology company)

Notable Experience and Key Board Contributions
Mr. Dallas brings more than 25 years of experience driving digital innovation and growth at technology companies and expertise in the digital transformation of customers and partners.
At Microsoft, Mr. Dallas enabled the digital transformation of customers and partners across a range of industries including: connected/autonomous vehicles, industrial IoT, discrete manufacturing, retail, financial services, media and entertainment, and healthcare.

Education
B.S.c. in Electrical and Electronic Engineering from Staffordshire University

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Joseph M. Hogan
https://cdn.kscope.io/70c16175132386154e586fc445c34cdc-Joe Hogan_ALIGNTECH_June2021-6260.jpgAge: 66
Director Since: 2015
Roles: Director, President and CEO of Align Technology, Inc.

Experience:
2015 - Present

Prior


President and CEO, Align Technology Inc. (dental technology company)
CEO, ABB at Cutlass Capital (technology company)
Various Positions including CEO of GE Healthcare, General Electric (a medical technology company)


Other Board Positions
Supervisory Board of avateramedical N.V. (2019-2021)

Notable Experience and Key Board Contributions
At Align, Mr. Hogan has overseen significant financial and operating performance over the last eight years.
Mr. Hogan is a proven leader serving as an integral connection between our board of directors and management. He brings to Align significant leadership experience from large public companies, with strategic business, market development and sales acumen, and expertise in strategic and operational aspects of complex, international organizations.
During his five years at ABB, Mr. Hogan oversaw a 25% increase in revenues.
As CEO of GE Healthcare, Mr. Hogan drove significant geographic and market portfolio expansion and more than doubled revenues from $7 billion to $16 billion.

Education
B.S. in Business and Economics from Geneva College
M.B.A. from Robert Morris University

Joseph Lacob
https://cdn.kscope.io/70c16175132386154e586fc445c34cdc-Joe Lacob_ALIGNTECH_June2021-6913.jpgAge: 68
Director Since: 1997
Roles: Independent Director
Chair of Nominating and Governance Committee
Committees: Nominating and Governance Committee; Technology Committee

Experience:
2010 - Present
 

1987 - 2010

Prior

Governor, Co-Executive Chairman and CEO, Golden State Warriors (basketball team) and Golden State WNBA (basketball team)
Partner, Kleiner Perkins Caufield & Byers (venture capital firm)
Various Positions, Cetus Corporation, now Chiron Corporation (biotechnology company)
Various Positions, FHP International (health maintenance organization)
Various Positions, Booz, Allen & Hamilton (consulting firm)

Other Board Positions
Golden State Warriors (2010-present)
NeuroPace, Inc. (1997-present)
Orexigen Therapeutics, Inc. (2004-2012)

Notable Experience and Key Board Contributions
Mr. Lacob brings expertise in evaluating and developing strategic opportunities, specifically in the technology, healthcare and life sciences industries.
Mr. Lacob also has significant consumer marketing, financial, strategic investment and mergers and acquisition experience.
Mr. Lacob was closely involved with KPCB's investments in more than 50 life science companies, including the startup or incubation of a dozen ventures, and with KPCB's medical technology practice, which includes more than 30 therapeutic and diagnostic medical device companies.

Education
B.S. in Biological Sciences from the University of California at Irvine
Masters in public health from the University of California at Los Angeles
M.B.A. from Stanford University


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C. Raymond Larkin, Jr.
https://cdn.kscope.io/70c16175132386154e586fc445c34cdc-Ray Larkin_ALIGNTECH_June2021-6821.jpgAge: 75
Director Since: 2004
Roles: Independent Director Chairman of the Board
Committees: Nominating and Governance Committee
 

Experience:
1999 - 2010
2003 - 2007
Prior

Principal, Group Outcome L.L.C. (merchant banking)
CEO, Eunoe, Inc. (medical device company)
Venture Partner, Venture Partner at Cutlass Capital (venture capital firm)
President and CEO, Nellcor Puritan Bennett, Inc. (respiratory products companies)


Other Board Positions
Shockwave Medical, Inc., Chair (2019-present)
Neuropace (2008-2019)
Heartware, Inc., Chair (2008-2018)
Reva Medical, Inc., Chair (2008-2018)

Notable Experience and Key Board Contributions
Mr. Larkin brings significant leadership experience at large public companies, a deep knowledge and authority in the medical device and healthcare fields, extensive public and private company board experience, and strong strategic business development and tactical implementation skills.
Mr. Larkin has unique experience with the growth and maturation of a medical device company. He grew Nellcor to nearly $1 billion in revenues through the development and introduction of pulse oximetry into worldwide use for patient safety monitoring, setting the standard of care for the respiratory-impaired patient.
Mr. Larkin served in the United States Marine Corps, rising to the level of Captain.

Education
B.S. in Industrial Management from LaSalle University
George J. Morrow
https://cdn.kscope.io/70c16175132386154e586fc445c34cdc-George Morrow_ALIGNTECH_June2021-5706.jpgAge: 72
Director Since: 2006
Roles: Independent Director
Chair of Compensation and Human Capital Committee
Committees: Nominating and Governance Committee; Compensation and Human Capital Committee
 

Experience:
2003 - 2011

2001 - 2003

Prior

Executive Vice President, Global Commercial Operations, Amgen Inc. (biotechnology company)
Executive Vice President of Worldwide Sales and Marketing, Amgen Inc. (biotechnology company)
Various Positions including President and Chief Executive Officer of Glaxo Wellcome Inc., GlaxoSmithKline Inc. (biopharma company)

Other Board Positions
Neurocrine Biosciences, Inc. (2015-present)
Vical, Inc. (2012-2019)
Otonomy, Inc. (2015-2018)
Human Genome Sciences, Inc.
Glaxo Wellcome, Inc.
Safeway, Inc.
National Commerce Bank

Notable Experience and Key Board Contributions
Mr. Morrow brings significant leadership experience in sales, marketing and operational global ownership, a valuable understanding of medical device regulatory and compliance, financial, and corporate governance, and expertise in growth driven sales compensation strategies and risk mitigation controls.
As Executive Vice President of Amgen, Mr. Morrow oversaw all commercial functions for Amgen's broad spectrum of products in more than 50 countries.

Education
B.S. in Chemistry from Southampton College, Long Island University
M.B.A. from Duke University
M.S. in Biochemistry from Bryn Mawr College
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Anne M. Myong
https://cdn.kscope.io/70c16175132386154e586fc445c34cdc-Anne Myong_ALIGNTECH_June2021-6332.jpgAge: 56
Director Since: 2019
Roles: Independent Director
Chair of Audit Committee
Committees: Audit Committee; Compensation and Human Capital Committee

 

Experience:
2021 - 2023
2020 - 2021

2014 - 2017


2011 - 2014

Prior

President, Amyris, Inc. (biotechnology company)
Chief Executive Officer and Chief Financial Officer, Aura Financial (financial services company)
Senior Vice President and Chief Financial Officer, Walmart Global eCommerce (eCommerce segment of retail corporation)
Senior Vice President, Chief Financial and Administrative Officer, Walmart China Retail (retail corporation)
Vice President and Chief Financial Officer, Agilent Technologies China (life science software and supplies company)

Other Board Positions
Goodwill Industries International, Inc. (2016-2022)

Notable Experience and Key Board Contributions
Ms. Myong brings extensive experience in global operations, finance and accounting with a unique knowledge of international markets, a deep understanding of financial reporting and organizational risks, controls and monitoring, and expertise in consumer products, omnichannel retailing, digital marketing, and scaling industry-transforming innovations.
As Senior Vice President and Chief Financial Officer of Walmart Global eCommerce, Ms. Myong accelerated the growth, profitability, and digital transformation of Walmart’s retail and e-commerce operations in the United States, China, and Brazil.

Education
B.B.A. in Computer Information Systems from James Madison University
M.B.A. from Harvard Business School
Mojdeh Poul
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Age: 61
Director Since: 2023
Roles: Independent Director
Committees: Audit Committee

Experience:
2019 - 2022

2011 - 2018


2005 - 2011

Prior

Executive Vice President and Group President, 3M Healthcare Business Group (global healthcare products company)
Various Global Executive Leadership Positions, 3M Healthcare Business Group (global healthcare solutions company) and 3M (diversified global company)    
Various Global Business Leadership Positions, Medtronic (global medical technology company)
Various Marketing Leadership Positions, ev3 (medical device company)
Various Global Marketing Leadership Positions, Medtronic (global medical technology company)
Various Global Marketing Leadership Positions, Boston Scientific (global medical technology company)
Various Management Positions, Teleflex Medical (global medical device company)
Various Engineering Positions, GE Plastics (global engineering plastics company)

Other Board Positions
iRhythm Technologies (2023-present)
CeramTec Advisory Committee (2022 – Present)
Stanley Black and Decker (2021-present)

Notable Experience and Key Board Contributions
Ms. Poul has 27 years of experience in various segments of the healthcare industry. She has a proven track record of delivering business growth and performance though portfolio transformation, value-creating innovation, and impactful capital allocation.
Ms. Poul has deep expertise in corporate strategy, mergers and acquisitions, global profit and loss and operations management, and commercial excellence.

Education
M.B.A. from the University of North Carolina, Chapel Hill
Masters in Mechanical Engineering from the University of Louisville
B.S. in Mechanical Engineering from the University of Louisville


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Andrea L. Saia
https://cdn.kscope.io/70c16175132386154e586fc445c34cdc-Andrea Saia_ALIGNTECH_June2021-5627.jpgAge: 66
Director Since: 2013
Roles: Independent Director
Committees: Compensation and Human Capital Committee; Audit Committee; Technology Committee


 

Experience:
2011 - 2012

2008 - 2011

2002 - 2008



Prior

Global Head of Alcon Vision Care, Novartis AG (pharmaceutical company)
President and CEO, CibaVision Corporation, (contact lens company)
Various Positions including President of Europe, Middle East, and Africa, President of the Global Lens Business and Global Head of Marketing, CibaVision Corporation (contact lens company)
Various Positions, Unilever (consumer goods company)
Various Positions, Procter & Gamble (consumer goods company)
Various Positions, Revlon (beauty supply company)

Other Board Positions
Outset Medical, Inc. (2021-present)
LivaNova PLC (2016-2023)
Coca-Cola Enterprises, Inc. (2012-2016)

Notable Experience and Key Board Contributions
Ms. Saia brings 40 years of global experience within the healthcare, medical device and consumer products industries and expertise in global sales and marketing and strategic business development.
Ms. Saia has worked with technologically driven companies dedicated to developing new solutions that significantly improve the health and well-being of consumers.

Education
B.S. in Business Administration from Miami University
M.B.A. from J.L. Kellogg Graduate School of Business


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Susan E. Siegel
https://cdn.kscope.io/70c16175132386154e586fc445c34cdc-Susan Siegel_ALIGNTECH_June2021-7136.jpgAge: 63
Director Since: 2017
Roles: Independent Director
Committees: Nominating and Governance Committee; Technology Committee


 

Experience:
2017 - 2019
2012 - 2017
Prior

Chief Innovation Officer, GE (conglomerate company)
CEO, GE Ventures and Licensing (conglomerate company)
General Partner, Mohr Davidow Ventures (multidisciplinary investment firm; Ms. Siegel focused investments in personalized medicine, life sciences and digital health)
Director and President, Affymetrix (genomics company)

Other Board Positions
Illumina, Inc. (2019 - present)
Nevro Corporation (2020 - present)
The Engine (2016 - 2020), Chair (2020 - present)
KFF (formerly Kaiser Family Foundation) (2019 - present)
National Venture Capital Association (2012 - 2016)
Pacific Biosciences, Inc. (2006 - 2013)
Tech Interactive (2003 - 2007)
Affymetrix (2000 - 2006)

Notable Experience and Key Board Contributions
Ms. Siegel brings extensive experience in identifying, funding, pioneering, and implementing industry-shifting innovations in the life sciences, biomedical research, and healthcare industries.
Ms. Siegel led Affymetrix, one of the fastest growing genomics companies of its time. She led it from a pre-revenue startup to a multi-billion dollar publicly listed company that helped shape the emerging genomics industry, including addressing the bioethical issues of its day.
Ms. Siegel has been recognized in Fortune’s “34 Leaders Who Are Changing Health Care,” as one of “The 100 Most Influential Women in Silicon Valley,” “Fierce Biotech’s Top 10 Women in Medical Devices,” and was awarded the “Lifetime Achievement Award” by Global Corporate Venture in 2020. She is an Aspen Institute Henry Crown Fellow and is a featured “Multiplier” in the bestselling book: “Multipliers: How the Best Leaders Make Everyone Smarter.”

Education
B.S. in Biology from the University of Puerto Rico
M.S. in Biochemistry and Molecular Biology from Boston University Medical School.
There are no family relationships between any director and any of our executive officers.

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Board Diversity Matrix
The following matrix is provided to illustrate the demographic diversity and tenure distribution of the members that serve on our Board as of March 25, 2024:

Kevin Conroy
Kevin Dallas
Joseph Hogan
Joseph Lacob
Raymond Larkin
George Morrow
Anne Myong
Mojdeh Poul
Andrea Saia
Susan Siegel
Part I: Gender Identity
Male
Female
Non-Binary
Did Not Disclose Gender
Part II: Demographic Information
African American or Black
Alaskan Native or Native American
Asian
Hispanic or Latino
Native Hawaiian or Pacific Islander
White or Caucasian
Two or More Races or Ethnicities
LGBTQ+
Did Not Disclose Demographic Information
Tenure
0-7 Years
8-15 Years
16+ Years
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Director Compensation
Cash Compensation
Equity Compensation
Total Compensation

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Director Compensation

Our director compensation program is designed both to attract and fairly compensate highly qualified, non-employee directors to represent and act in the best interests of our stockholders, employees, and the communities we serve. For the purpose of determining non-employee director compensation for 2023, our Compensation and Human Capital Committee engaged Compensia, an independent third party consulting firm that specializes in analyzing compensation practices and trends, to evaluate the competitiveness of our program. As part of its analysis for 2023, our Compensation and Human Capital Committee considered the following:

the corporate governance environment as well as recent trends and developments relating to director compensation;
amounts payable under, and the various components of, our director compensation program; and
the aggregate director compensation cost, in comparison to boards of directors of the same group of peer companies used in determining executive management compensation1.

Following its review, the Compensation and Human Capital Committee determined that our non-employee director compensation practices continued to be, in aggregate, generally aligned with market norms and emerging best practices and, as such, no changes were necessary for our 2023 non-employee director compensation program.


Cash Compensation
Our 2023 non-employee directors cash compensation program was as follows and paid in quarterly installments:

DescriptionCurrent Fee
Annual Retainer for Board Membership (other than the Chair of our Board)$50,000 
Annual Retainer for membership on the Compensation and Human Capital Committee and the Audit Committee (other than the Chairs of each)$13,500 
Annual Retainer for Chairs of the Compensation and Human Capital Committee and the Audit Committee$27,000 
Annual Retainer for membership on the Nominating and Governance Committee (other than the Chair) and the Technology Committee$5,000 
Annual Retainer for the Chair of Nominating and Governance Committee$10,000 
Annual Retainer for the Chair of our Board (1)
$100,000 
(1)The Chair of our Board is not compensated for membership on any committee.


Equity Compensation
In March 2023, our Compensation and Human Capital Committee approved an annual equity grant of RSUs to our then-current board members (other than the Chair of our Board, Mr. Larkin) having a long-term incentive value equivalent to $300,000. For Mr. Larkin's additional responsibilities as Chair of our Board, the Compensation and Human Capital Committee approved an annual RSU grant of $400,000. The actual number of shares under the RSU awards was calculated using the closing price of our common stock on the date of our 2023 annual meeting of stockholders. Accordingly, on May 17, 2023, each non-employee director other than Mr. Larkin was granted 1,029 RSUs and Mr. Larkin was granted 1,372 RSUs based on the closing per share price of our common stock on that date of $291.36. Each of these RSU awards vests 100% upon the earlier of (i) the one-year anniversary of the grant
1 For further details on our peer group, see the discussion of our "How We Determine Compensation" in the Compensation Discussion and Analysis section below)
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date or (ii) the date of the next annual meeting of stockholders following the grant date. Assuming the continued service of each non-employee director, each of these equity awards are expected to fully vest on May 17, 2024.

Mr. Conroy and Ms. Poul, both of whom joined our Board on December 5, 2023, were each granted an initial award of RSUs having a long term incentive value equivalent to $300,000 that was prorated from the date of their appointment through the anticipated date of our 2024 annual meeting of stockholders (approximately 5 months). This resulted in an award of 660 RSUs to each of Mr. Conroy and Ms. Poul based on the 30-trading day average closing price of our common stock for the period ending December 5, 2023 of approximately $215.35. Each award is expected to fully vest on May 22, 2024, the date of our Annual Meeting, assuming their continued service on the Board through such date.

Total Compensation
The table below summarizes the compensation paid to our non-employee directors for the year ended December 31, 2023. The compensation of our President and CEO, Mr. Hogan, is shown in the Summary Compensation Table of this proxy statement.
NameFees Earned or Paid in Cash ($)
Stock Awards ($)(1)
Total ($)
Kevin T. Conroy(2)
4,167142,131 146,298 
Kevin J. Dallas
68,500299,809 368,309 
Joseph Lacob
65,000299,809 364,809 
C. Raymond Larkin, Jr.
100,000399,746 499,746 
George J. Morrow
82,000299,809 381,809 
Anne M. Myong
84,875299,809 384,684 
Mojdeh Poul(2)
4,167142,131 146,298
Andrea L. Saia
82,000299,809 381,809 
Greg J. Santora(3)
37,708— 37,708 
Susan E. Siegel
60,000299,809 359,809 
Warren S. Thaler(4)
30,625— 30,625 
(1)The amounts reflect the aggregate grant date fair value of RSU awards computed in accordance with FASB ASC Topic 718. There can be no assurance that the grant date fair value amounts will ever be realized. The RSUs are time-based awards and are not subject to performance or market conditions.
(2)Mr. Conroy and Ms. Poul were appointed to the Board on December 5, 2023. The cash amounts reflected represent the pro rata amounts of our quarterly Board member retainer from that date through December 31, 2023. The value of the stock awards represent the pro rata amount of the RSU award from the date of their appointment through our anticipated date of our 2024 annual meeting of stockholders.
(3)Mr. Santora did not stand for re-election in 2023. As a result, the cash amount shown is prorated for his membership on the Board, Audit and Compensation and Human Capital Committees from January 1, 2023 to May 17, 2023.
(4)Mr. Thaler did not stand for re-election in 2023. As a result, the cash amount shown is prorated for his membership on the Board, Audit, Nominating and Governance, and Technology Committees from January 1, 2023 to May 17, 2023.


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The aggregate number of stock awards granted to each non-employee director during the fiscal year ended December 31, 2023, were as follows:

NameStock Awards
Kevin T. Conroy(2)
660 
Kevin J. Dallas
1,029 
Joseph Lacob
1,029 
C. Raymond Larkin, Jr.
1,372 
George J. Morrow
1,029 
Anne M. Myong
1,029 
Mojdeh Poul(2)
660 
Andrea L. Saia
1,029 
Greg J. Santora(1)
— 
Susan E. Siegel
1,029 
Warren S. Thaler(1)
— 
(1) Messrs. Santora and Thaler did not stand for re-election in 2023 and were not granted stock awards in 2023.
(2) Mr. Conroy and Ms. Poul were each appointed to the Board on December 5, 2023. The amounts reflected represent the pro rata amounts of our annual Board member equity award of $300,000 from the date of their appointment through the expected date of our Annual Meeting on May 22, 2024.








































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Executive Compensation – Compensation Discussion And Analysis
Named Executive Officers
Executive Summary
Our Executive Compensation Program
How We Implement and Manage Our Executive Compensation Program
The Principal Elements of Executive Compensation
Severance and Change of Control Arrangements
2023 Stockholder Say-On-Pay Vote Results
Compensation and Human Capital Committee of the Board Report

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Executive Compensation – Compensation Discussion And Analysis

This section explains how we compensate our NEOs although much of the discussion also applies to all our executive management whose titles are executive vice president and above.

Named Executive Officers
Our NEOs for fiscal year 2023 include our CEO, CFO and our three other most highly compensated executive officers who were serving as executive officers as of the end of the last completed fiscal year. They are:
https://cdn.kscope.io/70c16175132386154e586fc445c34cdc-Joe Hogan.jpg
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Joseph HoganJohn MoriciEmory Wright
President and CEO
CFO and Executive Vice President, Global Finance
Executive Vice President, Global Operations
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Julie ColettiStuart Hockridge
Executive Vice President, Chief Legal and Regulatory Officer
Executive Vice President, Global Human Resources
For more information on our NEOs' background and experience, see Item 1, Business, of our Annual Report on Form 10-K filed with the SEC on February 28, 2024.

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Executive Summary

Continued Emphasis on Pay for Performance

We believe the design of our executive compensation program is instrumental in helping us successfully execute our strategic growth drivers and reward financial performance commensurate with actual results. 2023 was a year of stronger performance relative to 2022 that exceeded our initial 2023 operating margin guidance. However, we fell short of our incentive plan’s financial goals. Accordingly, our 2023 executive management compensation program payouts, for both cash and equity, are all below target as set forth below.

Key Executive Compensation Design Changes and Results

2023 Executive Compensation Design Changes
The Compensation and Human Capital Committee believed achievement of our rigorous objectives described later in this proxy statement, and a greater quantum of performance-based compensation for our CEO, would in the aggregate drive an appreciable increase in the price of our common stock over the 3 years of our long-term incentive awards. As seen in the realizable pay section below, these changes improved on a compensation program that has historically tied pay outcomes to value creation and stockholder return. In 2023, we:
_
increased our CEO's target long-term incentive by $2 million, and increased the percentage of at-risk performance-based MSUs from 67% of his equity award in 2022 to 70% in 2023;
_
increased the at-risk portion of the annual target total direct compensation ("TDC") of our CEO's and, on average, our other NEOs' from 91% and 81%, respectively, in 2022 to 93% and 82%, respectively, in 2023; and
_
increased the weighting of our CEO's and, on average, our other NEOs' compensation awarded in the form of market stock units ("MSUs") from 52% and 45%, respectively, in 2022, to 57% and 46%, respectively, in 2023.
2023 Executive Compensation Results
Our financial performance improved in 2023 relative to 2022, but nonetheless resulted in below target results and payouts under both our annual cash bonus and three-year equity based long-term incentive

Cash Bonus

(66% of Target)
Despite year-over-year improvements in our actual revenues and operating income that exceeded the operating margin guidance we announced in February of 2023, results for 2023 fell short of the rigorous targets set by the Compensation and Human Capital Committee, resulting in executive compensation cash bonus payouts at 66% of target
MSUs

(87.7% of Target)
MSUs for our CEO and our other NEOs awarded in February 2021 vested at 87.7% of target due to our stock underperformance relative to the NASDAQ Composite Index over the three year period ending February 2024


2024 Executive Compensation Preview
In 2024, to better align with stockholder expectations, we reduced our CEO’s long-term incentive grant target value by $1 million.

Target Pay and Reported Value

The target value of the MSUs and RSUs granted to our CEO in 2023 was $13.5M. However, the value reported in the Summary Compensation Table is $26.2M, due primarily to a 198% premium placed on the value of our TSR-linked equity awards as assessed under the applicable accounting and SEC rules. This value premium is largely the result of a large run-up in our stock price immediately pre-grant which correspondingly inflated the reported value of equity granted to our other NEOs as well.

Notwithstanding this reported value, our MSUs, which make up the vast majority of the 2023 long-term incentive, vest only after positive performance over 3 years. As a result, realizable pay is dependent on generating positive stockholder outcomes over 3 years and is not tied to the point-in-time value assessed by the accounting rules. As
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shown in the following section, realizable TDC has averaged 47% of reported TDC over the past three years, and 3-year cumulative realizable TDC has been 49% of 3-year cumulative reported TDC.

Realizable Pay

Realizable pay reflects the real value of equity awards, which increases or decreases with fluctuations in market value. We believe it is important to consider the effect of the year-end value of our stock on those awards over time in addition to the grant date fair values included in the Summary Compensation Table. Considering approximately 82% of our CEO’s and 69% of our other NEOs’ target TDC for 2023 was equity-based, we consider realizable pay an essential component of evaluating the effectiveness of our pay for performance philosophy.

As shown below, for 2023, our CEO’s cumulative 3-year realizable TDC was 76% of his cumulative 3-year target TDC and 49% of his cumulative 3-year reported TDC, which is heavily driven by the reported grant date values of our equity-based long-term incentive. Further, as shown below, in the comparisons of target pay, realizable pay, and our TSR, positive real pay delivery for our executives is heavily dependent on the creation of stockholder value. Just as positive returns and the generation of stockholder value can increase pay above target, depressions in stock price can drive realizable total direct compensation below target. The Compensation and Human Capital Committee believes that this correlation between real pay delivery and stock price, visible in the following charts, demonstrates that our equity compensation programs are working as intended, providing meaningful incentives for our executive officers to drive strong stockholder returns relative to our peer group over the long-term.

CEO Realizable TDC v. Target TDC and Reported TDC
Realizable Pay
Target TDC(1)
Reported TDC(4)
Realizable TDC(2)
% of Target TDC% of Reported TDC
2023$16.89M$28.95M2023$16.14M96%56%
2022$14.73M$18.68M2022$7.44M51%40%
2021$12.58M$21.59M2021$10.03M80%46%
3-Year Cumulative$44.19M$69.22M3-Year Cumulative$33.61M76%49%
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(1)    Target TDC: Target TDC is the sum of our CEO’s base salary as disclosed in the Compensation Discussion and Analysis sections of this and prior proxy statements, the target annual incentive amount (which is the target bonus percentage multiplied by the respective base salary) and the target value of the CEO’s long-term incentive awards (which is the amount used to determine the number of shares underlying such awards). No other amounts are included.
(2)    Realizable TDC: Realizable TDC is the sum of our CEO’s actual earned base salary, non-equity incentive plan compensation, equity award values of RSUs and performance shares granted (calculated for performance shares as described in the following sentence) with such equity award values multiplied by the closing stock price per share on the last day of fiscal year 2023 of $274.00, and all other compensation disclosed in the Summary Compensation Table for the applicable fiscal year. Equity award values for performance shares are based on: (i) for completed performance periods that began in fiscal year 2021, the number of shares actually issued for the applicable performance period following certification of results; and (ii) for performance periods that began in fiscal years 2022 and 2023 that are not yet complete, target amounts under the relative TSR Goal.
(3)    Indexed TSR: Indexed TSR is calculated by taking the stock price per share on the last day of fiscal years 2021 to 2023 of $657.18, $210.90, and $274.00, respectively, and dividing each by the stock price per share on the last day of fiscal year 2020 of $534.38.
(4) Represents the total compensation figures reported in the Summary Compensation Table with respect to each year. As described in the Target Pay and Reported Value section, above, these figures are heavily impacted by the reportable valuation of our TSR-linked awards, which is often more than the price of our stock on the date of grant.

Our Executive Compensation Program

Our program is designed to closely align executive compensation with investors' interests. The program provides a mix of annual cash and equity, heavily weighted towards longer-term incentives and ties the majority of the compensation paid to our executive management to the achievement of performance goals. The intent of the compensation mix is to attract and retain high-caliber executives in a competitive market for talent and encourage our executive management to implement strategies and take actions in the long-term best interest of the Company and our stockholders.

Executive Compensation Philosophy and Core Objectives

The objective of our Executive Compensation Program is to encourage our corporate leaders to achieve our financial and strategic objectives, thereby creating long-term value for our stockholders. We remain committed to this longstanding philosophy. We do this by emphasizing performance-based pay. Our compensation program is structured to pay more when our financial and strategic performance is robust and less when, as in 2023, we underperformed relative to our expectations, providing built-in flexibility in the management of our operating expenses and enabling us to preserve and alter strategic programs when economic conditions are unfavorable or warrant adjustments. In designing our compensation program, the Compensation and Human Capital Committee adheres to compensation governance best practices, including the following:

Offer competitive compensation
We seek to provide competitive compensation opportunities to attract, retain and incentivize superior talent
Reward performance
A significant portion of the target total direct compensation of our NEOs is tied to the achievement of financial and strategic objectives, supporting our pay-for-performance philosophy by directly and substantially linking rewards to achievement of measurable financial targets and a shared set of critical strategic priorities. By also rewarding individual performance, we seek to recognize outstanding individual contributions
Link the interests of executive management with those of our stockholders
A significant portion of the target total direct compensation of our NEOs is in the form of long-term equity-based compensation. This structure is designed to focus decision-making and behavior on goals consistent with our overall strategy over a period of years
Solely Independent Directors
The Compensation and Human Capital Committee is composed solely of independent directors, and it retains an independent compensation consultant directly
Annual Say-on-Pay Votes
We submit annual proposals on the compensation of our NEOs ("say-on-pay") to stockholders for advisory votes, with approximately 82% of votes cast in favor of our compensation plan in 2023. The Compensation and Human Capital Committee considers the outcome of the vote in future compensation decisions
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Stock Ownership(1) Guidelines
We maintain meaningful stock ownership guidelines for executive management and non-employee directors as a matter of good corporate governance and to demonstrate that the interests of executive management and non-employee directors are consistent with those of our stockholders. In 2023, each member of executive management other than our CEO was subject to a stock ownership guideline equal to 3x their annual base salary.

Our CEO was subject to a stock ownership guideline equal to 6x his annual base salary. He has purchased $7 million of our common stock since his last sale in 2021.(2)
No "single-trigger" on Cash or Equity Compensation
All of our post-employment cash compensation arrangements in the event of a change in control of the Company are "double-trigger" arrangements requiring both a change in control and a qualifying termination of employment before any cash payments are paid. In addition, the employment agreements entered into by our CEO and CFO, as well as others who join or are promoted to an executive management role after September 2016, provide that such individuals will only receive accelerated vesting of their outstanding and unvested equity awards if they are terminated without cause or for convenience within 18 months of a change of control (double trigger).
Annual Compensation-Related Risk Assessment
Our compensation policies are structured to discourage inappropriate risk-taking. There are no guarantees that bonuses will be paid or paid in the amounts anticipated under our annual cash bonus incentive program (none were paid in 2022 and the payout in 2023 was only 66% of target) and we cap the maximum bonus awards in part to discourage excessive risk-taking. The Compensation Risk Assessment located below in this proxy statement describes the Compensation and Human Capital Committee's assessment that the risks arising from our company-wide compensation programs are reasonable, in the best interest of our stockholders, and unlikely to have a material adverse effect on us.
No Hedging or Pledging of Our Stock
Employees (including officers) and directors may not directly or indirectly engage in transactions intended to hedge or offset the market value of our common stock that they own. In addition, our Insider Trading Policy prohibits employees (including officers) and directors from directly or indirectly pledging our common stock as collateral for any obligation.
Careful Management of Equity Burn Rates
We are committed to carefully managing the dilutive impact of equity compensation awards. Management and the Human Capital Committee regularly evaluate share utilization levels by reviewing the dilutive impact of stock compensation. For 2023, our overall equity-award-based gross burn rate for our 2005 Incentive Plan was 0.77%. Gross burn rate is defined as the number of equity awards granted in the year divided by shares outstanding. While we no longer issue stock options and do not have any vested or unvested stock options outstanding, were we to do so, we have pledged to not reprice, buyout or exchange underwater stock options and there is no liberal counting or recycling of shares.
Clawback Policy
We have a clawback policy that provides for the recoupment of executive compensation in certain circumstances as required by Dodd-Frank
Regular Stockholder Outreach
We have an extensive and continuous stockholder outreach program through which we regularly connect members of our Board, executive management and other senior leaders with our stockholders for input and suggestions on a wide variety of topics, including our pay practices and governance. See section entitled "Stockholder Outreach and Engagement" for more information.
(1) For purposes of this policy, "ownership" includes shares of our common stock directly held or held in trust for the benefit of such director, member of executive management or their family members living in the same household and shares of our underlying restricted stock units held directly, whether or not yet vested. "Ownership" does not include vested or unvested options to purchase our common stock or shares underlying unvested MSUs.
(2) In 2023, our CEO purchased $3 million (as valued at the time of each purchase) of our common stock with his personal funds and has since his last sale of our common stock in 2021, purchased $7 million (as valued at the time of each purchase).

Compensation Program Evaluation and Risk Management

Our Compensation and Human Capital Committee evaluates the various elements of our compensation programs to avoid encouraging, and to mitigate against, excessive risk taking, by promoting behaviors that support sustainable value creation. The Compensation and Human Capital Committee annually assesses the various
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components of our compensation programs and believes our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

In performing its assessment, the Compensation and Human Capital Committee monitors and evaluates our compensation programs to ensure that:

We provide a mix of cash and equity, that in the aggregate are heavily weighted towards longer-term incentives to encourage strategies and actions in the long-term best interests of the Company and our stockholders;
We set base salaries consistent with each employee's responsibilities so that they are not motivated to take excessive risks to achieve a reasonable level of financial security;
We set appropriate performance goals that we believe:
are reasonable in light of past performance and market conditions, and
encourage success without encouraging excessive risk-taking to achieve short-term results.
We set annual cash incentive plan performance goals that are Company-wide in order to encourage sound decision-making and performance throughout the Company and that are in the best long-term interests of the Company and our stockholders as a whole;
We do not employ an “all-or-nothing” approach. Under our annual cash incentive plan, achievement of performance goals at levels below full target goals reduces only the payout related to that goal, not the other goals;
We cap the amount executive management can receive under our cash incentive compensation plan at a maximum of their targets to avoid incentivizing excessive risk-taking; and
We use a portfolio of equity-based awards for executive management that incentivize performance over a variety of time periods with respect to several balanced goals. For example:
RSUs retain value even in depressed markets making it less likely employees will take unreasonable risks to get, or keep, their equity awards "in the money;"
Performance-based MSUs measure relative stockholder return over a three-year performance cycle, thereby potentially retaining value even if the price of our common stock decreases in a market downturn, provided that the decrease is not more than 33 percentage points greater than other companies;
The number of shares potentially earned are capped at a maximum of 250% of the number of target shares to limit stockholder dilution; and
Executive management is subject to material stock ownership guidelines.

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How We Implement and Manage Our Executive Compensation Program
The Compensation and Human Capital Committee, their consultants and executive management contribute to the implementation of the Executive Compensation Program. The table below specifies the responsible parties and their respective roles in determining our NEOs' compensation:

Responsible PartyRoles and Responsibilities
Compensation and Human Capital Committee
Sets our overall compensation philosophy, which our Board reviews and approves
Reviews and approves our compensation programs; designs and monitors the execution of these programs
Reviews and approves all forms of compensation for executive management (other than our CEO)
Reviews and recommends to our Board all forms of compensation for our CEO
No member of the Compensation and Human Capital Committee is a former or current officer of the Company or any of our subsidiaries. No member of executive management serves as a member of the Board or the Compensation Committee of any entity that has any members of executive management serving on our Board or the Compensation and Human Capital Committee.
Consultant to the Compensation and Human Capital Committee (Compensia, Inc. an independent executive compensation consulting firm retained directly by the Compensation and Human Capital Committee to assist it in performing its responsibilities)
Compensia attends meetings of the Compensation and Human Capital Committee and communicates outside of meetings with its members and management with respect to the design and assessment of compensation packages for executive management. In 2023, Compensia provided the services below for, or at the request of, the Compensation and Human Capital Committee:
Analyzed whether the elements of compensation and target total direct compensation of executive management were consistent with our compensation philosophy and the competitive market (as defined by our compensation peer group) companies;
Assisted in defining the appropriate peer group of comparable companies;
Assisted in the design of our incentive compensation programs for executive management and compensation arrangements for Board members, including discussing evolving compensation trends;
Provided advice on stock ownership guidelines for executive management and non-employee directors;
Compiled and provided competitive market data to assist in our compensation philosophy, establishing plan parameters and selecting corporate performance measures;
Conducted a comprehensive review of Board compensation and provided recommendations to the Compensation and Human Capital Committee and Board regarding non-employee director pay structure;
Provided updates on NASDAQ listing standards, say-on-pay results, and regulatory developments;
Provided advice on the creation of our clawback policy; and
Assisted with the strategy for developing disclosure in support of our say-on-pay proposal.
In addition, the Compensation and Human Capital Committee conducted a formal review of Compensia’s independence and is satisfied with the qualifications, performance and independence of Compensia. Compensia performed no other work for us.
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Executive Management (Assisted by company staff)

Management's role is to advise the Compensation and Human Capital Committee regarding the alignment and weighting of our performance measures under our annual cash incentive compensation plan with our overall strategy, the impact of the design of our equity incentive awards on our ability to attract, motivate and retain highly talented executives and the competitiveness of our compensation programs. Our CEO plays a significant role in setting the compensation for our executive management. The CEO conducts performance reviews for the other NEOs and makes recommendations to the Compensation and Human Capital Committee with respect to the other NEOs' compensation. The Compensation and Human Capital Committee has the discretion to accept, reject, or modify the CEO's recommendations. Ultimately all decisions regarding executive management compensation are made by the Compensation and Human Capital Committee or in the case of our CEO's compensation, the independent members of our Board upon the Compensation and Human Capital Committee's recommendation.

How We Determine Compensation

Within the overall framework of the objectives and principles discussed above, the Compensation and Human Capital Committee exercises its judgment when making executive management compensation decisions. The Compensation and Human Capital Committee considers the individual's competitive position, market data, the Company's performance and the individual's performance.

Competitive Positioning

The Compensation and Human Capital Committee takes into consideration the unique roles played by each member of executive management and seeks to individually tailor their compensation to align their pay based on market compensation data (peer group data and survey data) and other factors, including:

the scope of the individual's role;
the individual's experience, qualifications, skills, and performance during the fiscal year (see discussion below under "Role of Individual Performance");
internal equity; and
our operational and financial performance.

After reviewing these various competitive positioning factors (none of which is determinative), the Compensation and Human Capital Committee relies upon the judgment of its members to make appropriate adjustments and recommendations to the compensation of executive management to meet our corporate objectives.

The Use of Market Comparison Data

In connection with the Compensation and Human Capital Committee's continuing assessment of the competitiveness of executive management's pay levels and practices relative to its peers, the Compensation and Human Capital Committee considers compensation data gathered from: (i) a selected peer group of companies, and (ii) published surveys with data from a broader mix of technology and life science companies.

Peer Group. The Compensation and Human Capital Committee reviews our peer group at least annually and makes adjustments to its composition, taking into account changes in both our business and the businesses of the companies in the peer group. For compensation decisions applicable to 2023, the Compensation and Human Capital Committee, with the assistance of Compensia, reviewed and approved a peer group that consists entirely of medical device and technology product companies, which are the industries from which we primarily recruit and compete for executive talent. The peer group was chosen based on the following selection criteria:

Industry - medical device companies and medical technology companies, which are the industries from which we primarily recruit executive talent;
Market Capitalization - companies with a market capitalization between approximately $6.7 billion and $107 billion based upon the companies’ trading ranges at the time of selection which approximated 0.25 to 4.0 times our market capitalization at that time; and
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Revenue - companies with revenue between approximately $1.3 billion to $12.1 billion based upon the last four quarters of revenue at the time of selection which approximated 0.3 to 3.0 times our rolling four quarters of revenues at that time.

As a result of its review of the foregoing criteria, the Compensation and Human Capital Committee elected to remove Abiomed and Bio-Techne and add Avantor and STERIS to the peer group used for executive management compensation comparisons. Abiomed and Bio-Techne were removed because their revenues were significantly below the range set by the Compensation and Human Capital Committee. At the time of the Compensation and Human Capital Committee's assessment of potential peers performed in the second quarter of 2022, we compared to the 2023 peer group as follows:

Revenue ($B)Market Capitalization ($B)Market Capitalization as a Multiple of Revenue
Peer Group 50th Percentile$4$21.35.9
Align$4$26.8
6.7
Percentile Rank50th59th58th

Based on its analysis, the Compensation and Human Capital Committee determined that the following peer group constituted an appropriate comparative reference for determining executive management compensation for 2023:

Align's Peer Group
Agilent TechnologiesIDEXX LaboratoriesRevvity
AvantorIlluminaSTERIS
Bio-Rad LaboratoriesInsuletTeleflex
Dentsply SironaIntuitive SurgicalThe Cooper Companies
DexComMasimoWaters
Edwards LifesciencesMettler-ToledoZimmer Biomet Holdings
HologicResMed

Reference Peers. The Compensation and Human Capital Committee also considers the compensation data of other companies as reference peers, which are companies identified by management as key business or labor market comparators. The compensation data of these companies was used for informational purposes only and was not used in setting executive management compensation levels because the financial profiles of these companies are outside the peer group development parameters.

Survey Data. When peer data is unavailable, the Compensation and Human Capital Committee reviews various pay surveys, including the Radford Technology Survey. In addition, the Compensation and Human Capital Committee may review the data separately to understand pay differences, if any, by industry or business segment and to assess whether any changes in pay data from year to year reflect true market trends.

Role of Competitive Data and the Compensation and Human Capital Committee's Discretion. The Compensation and Human Capital Committee uses the following percentiles of peer group and survey data as reference points for assessing appropriate base salary, target total cash compensation and equity compensation for our executive officers:

Element of CompensationTarget Percentile
Base salary
50th percentile
Target total cash compensation
65th to 75th percentile
Equity compensation
50th to 75th percentile

While we believe that comparisons to market data are useful, the Compensation and Human Capital Committee does not believe it appropriate to establish executive management compensation levels based solely on a comparison to market data. Due to the variations between companies reporting and the roles for which compensation for these companies is ultimately disclosed, directly comparable information is not always available from each peer group company with respect to each of our NEOs. In considering market compensation data, the
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Compensation and Human Capital Committee recognizes that executive management roles at different companies can vary significantly, with different responsibilities and scopes of work, even though they may hold similar titles or nominal positions. The Compensation and Human Capital Committee therefore uses the market data only as a reference point and incorporates flexibility into our compensation programs and in the assessment process to respond to and adjust for the evolving business environment and other subjective elements described in the competitive positioning factors above. After reviewing these various factors, the Compensation and Human Capital Committee relies upon the judgment of its members to adjust executive management compensation below or above these percentile ranges as it deems appropriate and to make recommendations to the independent members of our Board about the compensation of our CEO.

Role of Company Performance

The Compensation and Human Capital Committee believes that executive management should be rewarded based on their success as a team. Consistent with this belief, the achievement of shared financial and critical strategic goals, which we describe below under “Annual Cash Incentive Compensation” is the primary factor in determining whether and how much members of executive management are eligible to receive as cash incentive payments.

Role of Individual Performance

Although the Compensation and Human Capital Committee believes that the largest portion of the target total direct compensation of each member of executive management should be based on their success as a team and thus based on achievement of shared financial and critical strategic goals, it also believes there should be some flexibility to reward individual contributions. To evaluate individual performance, the Compensation and Human Capital Committee considers annual individual goals set for each member of executive management. These include shared financial and strategic objectives as well as objectives directly related to each individual's specific business function. Except with respect to his own performance, this assessment is based on our CEO's recommendation to the Compensation and Human Capital Committee on how well an individual performed their job, and such assessment is largely (although not exclusively) qualitative, not quantitative, in nature. There is no specific weight given to any one individual goal or objective. This subjective evaluation of the impact of the individual contributions on actual compensation is not a formula-based process resulting in a quantifiable amount of impact, but rather involves the exercise of discretion and judgment. This enables the Compensation and Human Capital Committee to differentiate among individuals and emphasize the link between personal performance and compensation.

The Use of Tally Sheets

The Compensation and Human Capital Committee uses tally sheets to understand executive management total annual compensation and to provide perspective on wealth accumulation from our compensation programs. Compensation previously paid to each individual, including amounts realized or not realized under prior equity-based compensation awards, did not affect the Compensation and Human Capital Committee's compensation decisions for 2023. The Compensation and Human Capital Committee believes that compensation should reflect an individual's performance and the market value of their services and does not want to create a disincentive for exceptional performance.
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The Principal Elements of Executive Compensation

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* Target Total Direct Compensation reflects annual base salary, annual cash incentive opportunity and the the target value of equity awards. The amounts indicated do not reflect realized value of compensation actually paid to our NEOs.

The principal elements of the target total direct compensation package of each member of executive management are:
base salary;
annual cash incentive awards; and
long-term incentive compensation in the form of equity awards.

In determining the mix of compensation among these elements, the Compensation and Human Capital Committee does not assign specific ratios. Instead, it typically structures compensation so that a significant portion of the target total direct compensation is "at-risk" or performance-based, with the actual value realized subject to the achievement of short-term or long-term corporate and financial performance goals. By linking a significant portion of the compensation payable to each member of executive management to performance, the Compensation and Human Capital Committee emphasized incentive-based variable pay, which is consistent with our pay-for-performance philosophy and creates a strong alignment with long-term stockholder value creation.

Consistent with this pay-for-performance orientation, we believe that annual cash incentive (bonus) awards and long-term equity awards should together represent the most significant portion of each executive's target total direct compensation. As a result, a larger portion of executive management's target total direct compensation is at risk relative to that of our employees generally. The Compensation and Human Capital Committee believes this is appropriate because the members of executive management bear the greatest responsibility for our results and can exert the greatest influence on our performance.
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Base Salary

Base salary is intended to provide a fixed, baseline level of compensation that is not contingent upon our performance. Consistent with our pay-for-performance philosophy, base salaries generally represent a modest proportion of the target total direct compensation opportunity for each member of executive management. In January 2023, the Compensation and Human Capital Committee reviewed the base salaries of our NEOs, comparing their salaries to the base salary levels of companies in our peer group, as well as considering the roles and responsibilities and potential performance of the NEOs and their positioning for other elements of their compensation. After this review, the Compensation and Human Capital Committee made the adjustments to base salaries set forth in the table below.

Name
2022 Base Salary
2023 Base Salary
Percentage Increase
Joseph M. Hogan
$1,295,000 $1,359,750 5.0%
John F. Morici
$600,000 $620,000 3.3%
Emory Wright
$530,000 $550,000 3.8%
Julie Coletti
$520,000 $570,000 9.6%
Stuart Hockridge
$480,000 $500,000 4.2%

The base salary of each NEO reflects the role of each NEO, their salary relative to the market, their contributions to the Company during their tenures and the Compensation and Human Capital Committee's expectations for future performance. In the case of Mr. Hogan, his base salary reflects his position as our most senior executive officer, his years of successful leadership since joining us as our CEO, our strong performance throughout much of his tenure, his passion and dedication to the success of the Company and the recognition of the salary that someone with his proven ability and track record could command in the competitive market.

Annual Cash Incentive Compensation

We use an annual cash incentive compensation plan (the "Bonus Plan") to reward executive management, including our NEOs, for achieving and potentially surpassing pre-established financial goals that the Compensation and Human Capital Committee believes will lead to short term strategic benefits. In February 2023, the Compensation and Human Capital Committee conducted its annual review of our Bonus Plan. Based on its review, the Compensation and Human Capital Committee determined that the pool of funds available to pay awards to our executive management for performance in 2023 would continue to be based on the extent to which we met or exceeded predetermined goals under selected financial metrics. Consistent with prior years, the Compensation and Human Capital Committee selected two financial metrics, weighted as in prior years and identified below, for purposes of funding the overall Bonus Plan pool for 2023:

Revenue - 60%
Operating Income - 40%

Considered in the aggregate, the Compensation and Human Capital Committee believes these metrics are strong indicators of our overall performance and our ability to create stockholder value. These measures balance propelling growth while encouraging efficiency and are aligned with our strategic priorities of international expansion, GP adoption, patient demand and conversion and orthodontist utilization.

Determining Bonuses

In determining actual bonuses to be awarded to each member of executive management, bonus amounts are adjusted, either up or down, based on each individual's overall performance and contribution to the achievement of the performance goals pre-established by our Compensation and Human Capital Committee.
Target Bonus Percentagex
Company Multiplier
x
Individual Performance Factor
Bonus Payout
Base SalaryxTarget Bonus PercentageNet Revenues - 60%Operating Income - 40%

Individual Goals
=
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The Compensation and Human Capital Committee has the discretion, but not the obligation, to adjust actual results of the cash incentive award (up or down) to reflect the impact of certain extraordinary items or events to more accurately reflect the overall performance of the management team. The Compensation and Human Capital Committee may adjust for (i) significant and/or extraordinary items not indicative of our core operating performance separately stated on our financial statements; (ii) items identified as non-GAAP in our earnings announcements; and (iii) other discrete items as necessary that may result in unintended gain or loss under the Bonus Plan. The Compensation and Human Capital Committee believes that the items listed above are not indicative of our core operating performance and therefore, at its discretion, may adjust the cash incentive awards. No adjustment was made to our 2023 Bonus Plan results.

In addition, our Board retains authority to pay additional discretionary bonuses outside the Bonus Plan if warranted by performance not measured under the Bonus Plan. In 2023, neither our Board nor the Compensation and Human Capital Committee authorized any such discretionary bonus payments to our NEOs.

Target Bonus Percentage

The Bonus Plan target award opportunity is the amount of cash compensation that each member of executive management could expect to earn if we achieved our financial and strategic performance goals for the year. The incentive targets for members of executive management were set by the Compensation and Human Capital Committee based on the scope and significance of their roles as our leaders, with our CEO receiving the highest target due to his greater responsibilities. The 2023 target award as a percentage of base salary for each member of executive management (other than our CEO) was 70% of base salary, consistent with 2022. Mr. Hogan's 2023 target award opportunity also remained unchanged at 150% of his base salary. In order to appropriately encourage and reward a range of acceptable performance and contributions in 2023, our awards were structured so that the actual payout to a member of executive management could be as low as 0% up to a maximum of 240% of target.

Company Multiplier

The Company Multiplier is the same for all members of executive management. It is determined based on pre-established goals under selected financial targets. For 2023, the Compensation and Human Capital Committee reviewed the structure of the Bonus Plan for purposes of funding the overall bonus pool and selected two financial metrics it believed appropriately focused executive management on the Company's strategic objectives: (1) revenue growth and (2) profitability. These were the same metrics approved by the Compensation and Human Capital Committee in prior years. Management typically recommends the performance targets for funding the Bonus Plan based on our annual operating plan as well as reference to historical performance and revenue and operating profit growth rates at select comparable medical device companies, but the targets are ultimately approved by the Compensation and Human Capital Committee and reviewed by our Board.

Individual Performance Factor

The Individual Performance Factor (expressed as a percentage ranging from 0% to 200%) reflects the Compensation and Human Capital Committee's assessment of the specific performance of each member of executive management in light of the achievement of their individual goals. There is no specific weight given to any one individual goal or performance criterion. The Compensation and Human Capital Committee considers the views of our CEO regarding how well each individual performed, and such assessment is qualitative, not quantitative, in nature. Our CEO does not provide input regarding his own performance. Individual performance that meets expectations yields a 100% multiplier.

2023 Bonus Plan Financial Targets and Attainment

The Compensation and Human Capital Committee seeks to motivate executive management to continuously improve financial performance and achieve strategic objectives through a cash incentive (bonus) plan that rewards higher performance with increased incentive opportunities. This variable expense structure helps to reduce our compensation costs in challenging times such as 2022 and 2023 and reward achievements only when business conditions and results warrant. In determining the design of our targets for our Bonus Plan, we consider our annual operating plan as well as historical performance and revenue and operating profit growth rates at select comparable medical device companies. When establishing the 2023 executive compensation cash bonus targets in February of 2023, the Compensation and Human Capital Committee considered our disappointing 2022 results, our long-term business strategy and desire to return to historical levels of growth, continuing macroeconomic dynamics, inflation expectations and customer and consumer demand among other things. To incentivize a return to higher long-term
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growth in 2023, the Compensation and Human Capital Committee set rigorous target goals and objectives intended to reward executive management for exceeding the operating margin estimates we provided in our earnings call on February 1, 2023. We also set 2023 financial goals above 2022 results, reflecting our belief that operating conditions would improve in 2023. For 2023, the Compensation and Human Capital Committee established at target Bonus Plan funding on revenues between $3,945 million and $4,005 million and GAAP operating income between $643 million and $701 million.

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*For 2020, the Compensation and Human Capital Committee reset performance targets in light of the significantly adverse operational and financial impacts of COVID in the first half of 2020 to focus solely on objectives for the second half of 2020 of $1,343 million and $262 million for revenue and operating income, respectively. The Compensation and Human Capital Committee correspondingly reduced the potential cash bonus opportunity by 50%.

As discussed above, our 2023 financial results exceeded our initial 2023 operating margin guidance, but were below the target goals set by the Compensation and Human Capital Committee, resulting in a payout under the Bonus Plan at 66% of target.

The table below shows the performance metrics used in 2023 and our level of performance with respect to these metrics.
Measure/Weight
Why do we use this measure?
Target (2023)
(in millions)
Achievement (2023)
(in millions)
 Impact on
Company
Multiplier
Revenues (1) (60%)
Improvement in this measure aligns with our overall growth strategy
$3,945 - $4,005
$3,862
49.6%(1)
Operating income (1) (40%)
Directly links incentive payments to profitability and provides incentives to employees (including management) to share in our profitability. Because profitability encompasses both revenues and expense management, the Compensation and Human Capital Committee believes this measure encourages a balanced, holistic approach to managing our business. The Compensation and Human Capital Committee considers operating profit before taxes because management cannot predict or directly affect our taxes or our tax rate.
$643- $701
$643
100%(1)
COMPANY MULTIPLIER:
66%(2)
(1) The level of performance at which the funding for that particular financial performance measure is determined as follows:
A rating of zero if achievement for the revenues and operating income targets were lower as compared to 2022. Performance below target automatically reduces only the payout related to that goal, not the other goal, as we want executive management to have the same incentive to achieve other financial goals as well as their individual performance goals even if our performance tracks below the target during the course of the year;
A rating of 100% for the performance metrics if the performance was in the established range. For 2023, the Compensation and Human Capital Committee set the target on revenue and operating margin at a range instead of a point estimate because of the uncertain global macro-economic environment conditions. However, the upper end of the target range was set at a point that would have previously paid at 150% in prior years bonus plan designs;
A rating ranging below 100% for the performance metrics if performance was below the established range; and
A rating of 101% and above if achievement exceeds the target performance level. Each individual financial metric is uncapped; however, once the Company Multiplier reaches 240% in the aggregate the Bonus Plan is fully funded. Therefore, in the aggregate, the Bonus Plan for our NEOs will not exceed 240% funding.
(2) As part of the design of the Bonus Plan, the final Company multiplier paid was an amount that ensured that operating income was accretive on a year over year basis.

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2023 Bonus Plan Individual Performance Factor Attainment

The Compensation and Human Capital Committee determined that, for 2023, our executives continued to perform in line with expectations in the context of a difficult macroeconomic environment, and graded all our executives’ individual performance factor at target.

2023 Bonus Plan Results

The following chart shows attainment under our cash bonus plan for each of our executives. The Compensation and Human Capital Committee did not exercise its discretion to increase or decrease the formulaic payout of our Bonus Plan.

NameTarget Incentive Award (as % of Base Salary)
Target Incentive Award
Company MultiplierIndividual Multiplier
Actual Incentive Award
Actual Award as % of Target
Joseph M. Hogan
150%$2,040,000 
66%
100%$1,346,200 
66%
John F. Morici
70%$434,000 
66%
100%$286,000 
66%
Emory Wright
70%$385,000 
66%
100%$254,000 
66%
Julie Coletti
70%$399,000 
66%
100%$263,000 
66%
Stuart Hockridge
70%$350,000 
66%
100%$231,000 
66%

Long-Term, Incentive Compensation

We use equity awards to align our executive management's long-term interests with those of our stockholders and to attract and retain high-caliber executives through recognition of anticipated future performance. We determine appropriate award amounts, if any, by reviewing competitive market data, individual performance assessments and business objectives with the Compensation and Human Capital Committee at least annually.

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Award Type
Rationale for 2023 Portfolio
Vesting Detail
Why RSUs?We believe RSUs reward retention (even in the event of a decline in the price of our common stock) and provide an incentive to grow the value of our common stock. In addition, RSUs enable our executive management to accumulate ownership of our common stock, which reinforces the alignment of their objectives with those of our stockholders.
Typically vest over four-years with 25% vesting annually
Why MSUs?
We believe MSUs provide a consistent value delivery that also aligns the long-term interests of executive management and stockholders by rewarding executive management for our performance measured in relation to other companies over a specified period. The actual number of shares eligible to vest will be determined based on a comparison of our stock price performance relative to the performance of the constituents of the NASDAQ Composite index over the three-year performance period, up to a maximum of 250% of the number of target shares. The number of shares that vest will be based on our relative total stockholder return compared to the stock price of the constituents of the NASDAQ Composite index in the period beginning on the date the performance-based vesting restricted stock units were granted and ending three years after, as follows:

Relative Total Stockholder Return    Shares Subject to the Award
Below 25th percentile 0%
25th percentile 50%
50th percentile 100%
90th percentile 250%

Linear interpolation will be used to determine the percentage of the shares subject to the MSU awards that are earned and will vest between each threshold. The number of shares that vest may not exceed 100% if total stockholder return is less than zero.
Three-year performance period with vesting ranging from 0% - 250% of target, with any vesting occurring entirely at the end of year three

2023 Awards

In 2023, the Compensation and Human Capital Committee reviewed our MSU program and concluded that the program, as designed, was generally aligned with market practices. In reviewing the equity portfolio for our non-CEO NEOs for 2023 annual focal awards, the Compensation and Human Capital Committee determined that a mix of 67% MSUs and 33% RSUs closely aligned their compensation with the interests of our stockholders. For the mix of MSUs and RSUs for our CEO in 2023, the Compensation and Human Capital Committee adjusted the ratio from 67% and 33% to 70% and 30%, respectively, to reflect an increased correlation between our long-term growth and our CEO's compensation. The Compensation and Human Capital Committee calculated the target values for equity awards to achieve this desired mix using a look back price that was based on the 30-trading day average closing price of our common stock for the period ending February 15, 2023. Based on this price per share, the total number of targeted shares was determined, then split between time-based RSUs and performance-based MSUs for non-CEO executive management and our CEO in the aforementioned ratios, each rounded down to the nearest whole share.

The target value of the equity awards granted to our NEOs is based on the grant date fair value of those shares. The realized value of the shares on vesting will deviate based on changes in our stock price on the dates of vesting over four years for our RSUs and the TSR of our stock as compared to the NASDAQ Composite Index on February 15th of the third year after the original year of grant of our MSUs.

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The table below sets forth the target value and number of shares of common stock awarded to the NEOs in fiscal 2023:

Name
Target Value
(RSUs)
RSU
(Shares)
Target Value
(MSUs) (1)
Target MSUs (1)
(Shares)
Joseph M. Hogan
$4,049,886 14,690 $9,449,826 34,227 
John F. Morici
$791,782 2,872 $1,607,824 5,832 
Emory Wright
$593,836 2,154 $1,205,868 4,374 
Julie Coletti
$593,836 2,154 $1,205,868 4,374 
Stuart Hockridge
$461,781 1,675 $937,897 3,402 
(1)    The number of MSUs set forth in this column represents the number of shares at target; however, the actual number of shares that may be earned, if any, is determined based on the formula set forth in the MSU Agreement up to a maximum of 250% of the amount of the Target Shares. The Target Value of RSUs may not reflect the realized value of those RSUs upon vesting. The Target Value and Target MSUs shares awarded may not reflect the actual number of MSUs shares that ultimately vest, if any.

Equity awards are tied to the value of our common stock and were impacted by underperformance

The actual values received by our NEOs under our annual equity awards vary based on our stock price performance. In particular, the amounts vesting under MSUs awarded to executive management are earned based on our relative stockholder return over a three-year performance period compared to the NASDAQ Composite Index, with the earned shares eligible to vest only at the end of three years. Due in part to increases in our revenues and operating performance in 2023 compared to 2022, the per share price of our common stock increased 30% in the calendar year. Over the three-year period including 2023, our TSR was -51.53% which was at the 43.8th percentile of our peer group. Accordingly, for MSUs granted in February 2021 that vested in February 2024, our NEOs vested at 87.7% of target following strong stock price appreciation in 2021 and 2023, offset by our stock's underperformance against the NASDAQ Composite Index in 2022.

The following graph shows our one year and three year total stockholder returns compared to our peers, the S&P 500 and NASDAQ composite as of December 31, 2023.

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Other Compensation Arrangements

Welfare and Other Employee Benefits

We maintain a tax-qualified Section 401(k) retirement plan with a matching contribution by the Company for all U.S. employees, including members of executive management.
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In addition, we provide health and welfare benefits to executive management on the same basis as our full-time employees in the country in which they are resident. These benefits may include medical, dental and vision benefits, medical and dependent care flexible spending accounts, short-term and long-term disability insurance, accidental death, basic life insurance coverage, and participation in our employee stock purchase plan. We design our employee benefits programs to be affordable and competitive in relation to the market, as well as compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon regular monitoring of applicable laws and practices and the competitive market.

Perquisites and Other Personal Benefits

Executive management may be reimbursed for travel by a non-employee companion (e.g., spouse) to customer events and certain other corporate events where appropriate and it is in our interest that the member of executive management have a companion join them. See "2023 Summary Compensation Table" below for more information concerning these benefits, if any. In the future, we may provide perquisites or other personal benefits in limited circumstances, such as where we believe it appropriate to assist a member of executive management in the performance of their duties, to make them more efficient and effective, and for recruitment, motivation, or retention purposes. All future practices with respect to perquisites or other personal benefits are approved and subject to periodic review by the Compensation and Human Capital Committee.

Corporate Tax Deduction on Compensation in Excess of $1 Million a Year

Section 162(m) of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act of 2017, generally disallows a deduction for federal tax purposes to any publicly traded corporation for any remuneration in excess of $1,000,000 paid in any taxable year to its covered employees for that taxable year, who consist of its CEO, CFO, up to three other members of executive management who are among the corporation’s five most highly compensated executive officers for that taxable year, and any individual who was a covered employee for any preceding taxable year beginning after December 31, 2016. While we consider the deductibility of awards in determining compensation payable to executive management, the Compensation and Human Capital Committee’s reserves flexibility to provide one or more covered executive officers with the opportunity to earn compensation that is nondeductible under Section 162(m) when the Compensation and Human Capital Committee believes that such compensation is appropriate to attract and retain executive talent.

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Severance and Change of Control Arrangements

Each NEO is eligible to receive payments and benefits under certain conditions in accordance with their respective employment agreement, RSU or MSU agreements. Each such agreement provides for payments and benefits upon:

a change of control of the Company; and
termination without cause or for convenience.

In adopting the change of control provisions in these agreements, the Compensation and Human Capital Committee's primary objective was to ensure members of executive management have sufficient security such that they are not biased against a sale of the Company in the event a stockholder favorable merger and acquisition transaction is presented. If we pursue a change of control transaction beneficial to our stockholders, the Compensation and Human Capital Committee believes that executive management's active support of the transaction through closing would be critical to ensuring the success of such a transaction.

The severance payments and benefits are intended to provide consideration for executive management's service to Align and the expected length of time until subsequent employment is secured. The severance provisions also assist in recruiting members of executive management given that their roles tend to carry higher risks.

The Compensation and Human Capital Committee periodically reviews the terms and conditions of our change of control and severance compensation practices against those of our peers. As industry trends and best practices have evolved over the years, the Compensation and Human Capital Committee modifies its approach to change of control and severance compensation by looking for opportunities to prospectively implement modifications for new members of executive management and for members of executive management with existing agreements when circumstances allow. For instance, in September 2016, the Compensation and Human Capital Committee materially changed our practices regarding change of control payments and benefits. Prior to September 2016, agreements with members of executive management allowed for the acceleration of vesting of outstanding and unvested equity awards upon a change of control alone ("single trigger"). Beginning in and after September 2016, the change of control acceleration benefits for new members of executive management also requires a termination of employment after a qualifying change of control event ("double trigger").

The amounts that each of our current NEOs would have been entitled to if one of the termination or change of control events described above occurred on December 31, 2023, are set forth in “Potential Payment Upon Termination or Change of Control” below.

Change of Control Only

Though the cash severance amounts payable to Messrs. Hogan, Wright and Hockridge in connection with a change of control are subject to a "double trigger" (meaning to get paid out the cash portion of their change of control arrangement, first there has to be a change of control and then the employment of the individual must be terminated without cause or for convenience within a specified period of time of such change of control), Mr. Hogan's RSU and MSU agreements and Messrs. Wright's and Hockridge's pre-September 2016 employment agreements, RSU and MSU agreements include a "single trigger" for these individuals whereby the vesting of outstanding and unvested equity awards would be accelerated upon a change of control. Mr. Hogan's RSUs and MSUs will vest pro rata as of the date a change of control and Messrs. Wright and Hockridge's MSUs will vest pro rata as of the date a change of control and the vesting of their RSUs will be accelerated by one year upon a change of control.

With respect to Mr. Morici and Ms. Coletti (as well as any other individual who joins us or is promoted to an executive management position after September 2016), the Compensation and Human Capital Committee eliminated all single trigger severance and equity acceleration provisions. Rather, severance payments and equity acceleration for these members of executive management are subject to "double trigger" arrangements that require both a change of control plus a qualifying termination event before any cash payments are paid or any equity award acceleration occurs.

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Termination Following a Change of Control

In the event any of the NEOs are terminated without cause or for convenience within 18 months (12 months in the cases of Messrs. Wright and Hockridge) of a change of control ("double trigger"), 100% of all remaining outstanding and unvested equity awards would be accelerated and a cash severance payment would be made.

Termination Unrelated to a Change of Control

For termination of employment without cause or for convenience unrelated to a change of control, the vesting of equity awards held by Messrs. Wright and Hockridge, is immediately accelerated by one year and a cash severance payment will be made. Messrs. Hogan and Morici and Ms. Coletti (as well as any other individual who joins us or is promoted to an executive management position after September 2016), would receive only a cash severance payment (no equity acceleration) if their employment is terminated without cause or for convenience unrelated to a change of control.

Death or Disability

In the event Mr. Hogan's employment terminates as a result of his death or disability, he (or his estate) will immediately vest in 100% of his outstanding and unvested 2020 RSU award.

Retirement

In 2023, we revised our RSUs and MSUs to provide for continued vesting for our executive officers upon their retirement from Align subject to the following terms: (i) the executive officer is required to provide 12 months advance written notice of their desire to retire with such notice being subject to our CEO’s written pre-approval; (ii) the executive officer must be 55 years or older and have a minimum of 10 years of service at the time they provide their notice to the CEO; and (iii) the executive officer must have a minimum of 6 months of service after an equity grant award for such grant to be eligible for continued vesting under this retirement provision (collectively, the “Retirement Eligibility Terms”). If each of the Retirement Eligibility Terms are met, (i) each outstanding RSU award belonging to an executive officer will continue to vest for 12 months after the executive officer’s date of retirement from Align; (ii) for each outstanding MSU award belonging to the executive officer will be entitled to receive a pro-rated vesting of shares at the end of the applicable MSU performance period based on the date of retirement and subject to the conditions for vesting and release of shares under the original terms of the MSU are achieved in accordance with the terms of the applicable MSU award. The pro-rated vesting shall be based on the amount of time the executive officer was employed during the performance period and any vesting of shares under a RSU award and MSU award are subject to the executive officer complying with lawful non-compete, non-solicit, confidentiality and release of claims provisions set forth in the agreement. We added the Retirement Eligibility Terms to help better ensure retention of retiring executives through the hiring of their replacements and a smoother transition upon retirement. It also recognizes the service of the retiring executive to Align. As of December 31, 2023, none of our NEOs were 55 years or older and had a minimum of 10 years of service at Align so the executives were not eligible for this benefit.

2023 Stockholder Say-on-Pay Vote Results

At our Annual Meeting of Stockholders in May 2023 (the "2023 Meeting"), our stockholders were asked to cast a non-binding advisory vote ("say-on-pay") to approve the compensation for our 2022 named executive officers ("2022 NEOs"). At the 2023 Meeting, approximately 82% of the votes cast by our stockholders were in support of our "say-on-pay" proposal. Based on the results of this vote and our regular stockholder outreach and engagement, the Compensation and Human Capital Committee believes our stockholders understand its philosophy on executive compensation, recognize how our compensation program aligns with our strategic goals and objectives and support our approach to executive compensation.



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Compensation and Human Capital Committee of the Board Report

The Compensation and Human Capital Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with management. Based on the Compensation and Human Capital Committee's review and discussion with management, the Compensation and Human Capital Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.
THE COMPENSATION AND HUMAN CAPITAL COMMITTEE
George J. Morrow, Chair
Kevin T. Conroy
Anne M. Myong
Andrea L. Saia

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Compensation Tables
Summary Compensation Table for Fiscal Year Ended 2023
Grants of Plan-Based Awards for Fiscal Year Ended 2023
Outstanding Equity Awards at Fiscal 2023 Year End
Option Exercises and Stock Vested During Fiscal Year Ended 2023
Potential Payment Upon Termination or Change of Control
Other Compensation Matters

image (10).jpg

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Summary Compensation Table for Fiscal Year Ended 2023

The following Summary Compensation Table sets forth certain information regarding the compensation of (i) our President and Chief Executive Officer, (ii) our Chief Financial Officer, and (iii) our three next most highly compensated executive officers during fiscal 2023 and for each of the two immediately preceding years. 

Name and Principal
Position
YearSalary
($)
Stock Awards
($) (1)
Non-Equity
Incentive Plan
Compensation
($)
All Other
Compensation
($)(2)
Total
($)
Joseph M. Hogan,
20231,354,769 26,230,870 1,346,200 20,572 28,952,411
President and Chief Executive Officer 20221,290,385 17,375,927 — 17,732 18,684,044 
20211,230,385 15,836,576 4,446,000 78,439 21,591,400 
John F. Morici,
2023618,461 4,581,010 286,000 77,410 5,562,881
Chief Financial Officer and Executive Vice President, Global Finance2022597,308 3,626,393 — 15,183 4,238,884 
2021563,077 3,833,391 949,200 122,353 5,468,021 
Emory Wright,
2023548,462 3,435,758 254,000 10,977 4,249,197 
Executive Vice President, Global Operations2022527,692 2,870,354 — 10,318 3,408,364 
2021498,462 2,999,671 840,000 9,802 4,347,935 
Julie Coletti,
Executive Vice President, Chief Legal and Regulatory Officer
2023566,154 3,435,758 263,000 11,016 4,275,928 
2022517,692 2,718,963 — 10,296 3,246,951 
2021486,923 2,498,958 823,200 58,734 3,867,815 
Stuart Hockridge,
2023498,462 2,672,150 231,000 10,879 3,412,491 
Executive Vice President, Global Human Resources2022478,462 2,114,814 — 17,165 2,610,441 
2021458,462 2,332,454 772,800 67,623 3,631,339 

(1)The amounts shown in this column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Assumptions used in the calculations of these amounts are included in Note 1 - Summary of Significant Accounting Policies, Stock-Based Compensation and Note 9 - Stockholders' Equity (collectively, "Notes 1 and 9") to our audited financial statements for the year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the SEC on February 28, 2024. This same method was used for the years ended December 31, 2022 and 2021.
(2)For a further description of the amounts included in this column, please see the paragraph entitled "All Other Compensation" below.

The grant date fair value of the MSU awards reflected in the Stock Awards column and the tables below is computed based on the probable outcome of the performance conditions as of the grant date. This amount is consistent with the estimate of aggregate compensation cost we expect to recognize over the three-year performance period of the award determined as of the grant date under FASB ASC Topic 718. Refer to Notes 1 and 9 of our audited financial statements for the year ended December 31, 2023, included in our Annual Report on Form 10-K filed with the SEC on February 28, 2024, for the assumptions used to value the RSU and MSU awards. The amounts shown in the Stock Awards Column and the tables below exclude the impact of estimated forfeitures and there can be no assurance that the grant date fair value amounts will ever be realized.

Name
Fiscal Year 2023 RSUs
Fiscal Year 2023 MSUs
Joseph M. Hogan
$4,652,470 $21,578,400 
John F. Morici
$909,591 $3,671,419 
Emory Wright
$682,193 $2,753,564 
Julie Coletti
$682,193 $2,753,564 
Stuart Hockridge
$530,489 $2,141,661 

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Assuming that the highest level of performance conditions is achieved, the aggregate fair value of the MSU awards at the grant date is as follows:

Name
Value of Fiscal Year 2023 MSUs Assuming Maximum Performance
Joseph M. Hogan
$53,946,000 
John F. Morici
$9,178,547 
Emory Wright
$6,883,911 
Julie Coletti
$6,883,911 
Stuart Hockridge
$5,354,153 

Total Compensation

The NEOs' increase in total compensation in 2023 compared to 2022 was due to the grant date fair value of equity awarded, cash bonus paid for 2023 and an increase in base salary for each of the officers. For additional information regarding the amounts included in the Summary Compensation Table, see "Executive Compensation - Compensation Discussion and Analysis" above.

Stock Awards

Stock awards include time-based RSUs that typically vest over a four-year period, as well as MSUs which are earned based on a comparison of our stock price performance to the NASDAQ Composite index over a three-year performance period and vest at the end of the third year.

Non-Equity Incentive Plan Compensation

The amounts shown in this column represent employee annual Bonus Plan payments and are reported for the year in which they were earned, though they were paid in the following year. The material terms of our incentive cash bonus plan are described under "Compensation Discussion and Analysis – Annual Cash Incentive Compensation" above.

All Other Compensation

The amounts shown in this column and detailed in the tables below represent the aggregate dollar amount for each NEO for life insurance and accidental death and dismemberment premiums, our 401(k) matching program, as well as health spending account contributions, reimbursements for medical expenses, relocation expenses, personal and travel companion airfare expenses, and Invisalign treatment.

NameDollar Value of Life Insurance PremiumsMatching contributions
under our 401(k) Plan
Airfare for travel (1)
Relocation (2)
Other
Mr. Hogan
$1,728 $9,900 $6,273 $— 
$2,671 (3)
Mr. Morici
$1,152 $9,900 $— $65,063 
$1,295(4)
Mr. Wright
$1,077 $9,900 $— $— $— 
Ms. Coletti
$1,116 $9,900 $— $— $— 
Mr. Hockridge
$979 $9,900 $— $— $— 
(1) Includes travel cost of $3,614 with the remainder to make the travel cost tax neutral.
(2) Includes relocation cost of $37,834 with the remainder to make the relocation cost tax neutral.
(3) Includes payments for Invisalign treatment and a medical expense reimbursement plan.
(4) Includes payment for a medical reimbursement plan.
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Grants of Plan-Based Awards for Fiscal Year Ended 2023

The following table shows all plan-based awards granted to the NEOs during 2023 including:

cash amounts that could have been received in 2023 by our NEOs under the terms of our Bonus Plan; and
time-vested RSUs and performance-based MSUs awards granted to our NEOs in 2023 reflected on an individual grant basis.

2023 Grants of Plan-Based Awards
 
 Type
of
Award
Grant
Date
Approval
Date
Estimated
Future
Payouts
Under
Non-Equity
Incentive Plan
Awards
 Non-equity IncentiveEstimated Future
Payouts Under
Equity Incentive Plan
Awards
All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#)
Grant Date
Fair value
of Awards ($)
NameTarget
($)
Maximum ($)Target
(#)
Maximum
(#)
Joseph M. Hogan
Bonus Plan
2,040,000 4,896,000 
RSU2/20/20231/23/202314,690 4,652,470 
MSU2/20/20231/23/202334,277 85,693 21,578,400 
John F. Morici
Bonus Plan
434,000 1,041,600 
RSU2/20/20231/23/20232,872 909,591 
MSU2/20/20231/23/20235,832 14,580 3,671,419 
Emory Wright
Bonus Plan
385,000 924,000 
RSU2/20/20231/23/20232,154 682,193 
MSU2/20/20231/23/20234,374 10,935 2,753,564 
Julie Coletti
Bonus Plan