Executive Compensation

The Compensation Committee (the “ Committee ”) of the Board of Directors (the " Board ") of IPG Photonics Corporation (the “ Company ”) has taken the actions described below relating to the compensation of the “named executive officers,” as such term is defined in Item 402(a)(3) of Regulation S-K, of the Company as of December 31, 2017 and certain other executive officers of the Company.

The Committee recently approved merit increases in base salaries, performance measures and target incentive payouts for 2018, and long term equity incentives for the named executive officers and other executive officers.

In accordance with the employment agreements with such executive officers, the Committee annually reviews each executive's performance and base salary in light of comparable data from peer companies and other high-tech publicly held companies, and the Company’s performance and growth. As a result, the Committee determined to increase the salaries as set forth below. The table below sets forth the 2018 base salaries for each named executive officer effective January 1, 2018:

Historically, the Dr. Gapontsev, our Chief Executive Officer, has not received annual grants of stock options, RSUs or PSUs because, as the Company’s founder and the holder of a large number of common stock of the Company, he has the perspective of an owner with a significant financial stake in the Company.

Item 8.01 Other Events

Certain directors and officers of IPG Photonics Corporation (the "Company") adopt from time to time pre-arranged trading plans (each, a "Plan") designed to comply with Rule10b5-1 under the Securities Exchange Act of 1934, as amended, and the Company's policies regarding stock transactions. Under Rule10b5-1, directors, officers and other persons who are not in possession of material non-public information may adopt a plan or contract for pre-arranged sales of Company securities under specified conditions and at specified times. Using these Plans, insiders can gradually diversify their investment portfolios, spread stock trades out over an extended period of time to reduce market impact and avoid concerns about transactions occurring at a time when they might possess inside information.

The Plan adopted by Alex Ovtchinnikov, Senior Vice President, Components, provides for the sale of up to 16,077 shares, including shares acquired upon exercise of stock options, over a period ending March 2019, unless terminated sooner in certain circumstances. Shares will be sold under the Plan on the open market at prevailing market prices, subject to minimum price thresholds. The Company does not undertake to report Plans that may be adopted by any directors or officers of the Company in the future, or to report any modification or termination of any Plan, except to the extent required by law.

About IPG PHOTONICS CORPORATION (NASDAQ:IPGP)

IPG Photonics Corporation is engaged in the design, development, production and distribution of fiber lasers, laser systems, fiber amplifiers and related optical components. The Company offers a line of lasers and amplifiers, which are used in materials processing, advanced communications and medical applications. The Company sells its products globally to original equipment manufacturers (OEMs), system integrators and end users. The Company has sales offices in the United States, Germany, Russia, Italy, Turkey, the United Kingdom, France, Spain, Poland, Czech Republic, China, Japan, South Korea, Singapore and India. The Company’s manufacturing facilities are located in the United States, Germany and Russia. The Company also manufactures complementary products used with its lasers, including optical delivery cables, fiber couplers, beam switches, optical processing heads and chillers. In addition, the Company offers laser-based systems for certain markets and applications.