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March 25, 2022
Dear Stockholder:
I am pleased to invite you to attend the 2022 Annual Meeting of Stockholders (the “Annual Meeting”)
of Skyworks Solutions, Inc., to be held at:
Time:
11:00 a.m. PDT
Date: Wednesday, May 11, 2022
Web:
www.virtualshareholdermeeting.com/SWKS2022
You will be able to attend and participate in the Annual Meeting online at the web address above,
where you will be able to listen to the meeting live, submit questions, and vote. We look forward to
your participation online or by proxy. The attached Notice of 2022 Annual Meeting of Stockholders
and Proxy Statement describe the matters that we expect to be acted upon at the Annual Meeting.
Whether or not you plan to attend the Annual Meeting online, and regardless of how many shares you
own, it is important that your shares be represented at the Annual Meeting. Accordingly, if you are a
stockholder of record, we urge you to complete the proxy and return it to us promptly in the postage-
prepaid envelope provided, or to complete and submit your proxy by telephone or via the internet in
accordance with the instructions on the proxy card. If your shares are held in “street name,” that is,
held for your account by a broker or other nominee, you will receive instructions from the holder of
record that you must follow for your shares to be voted. If you do attend the Annual Meeting online
and wish to vote at that time, you may revoke a previously submitted proxy by voting at the meeting.
Sincerely yours,
Liam K. Griffin
Chairman, Chief Executive Officer and President
Letter from Lead Independent Director
Dear Stockholder:
First and foremost, on behalf of the Board of Directors, I thank you for your investment in Skyworks
and for the confidence you place in the Board to oversee your interests in our Company. While the
COVID-19 pandemic continued to pose challenges in 2021, we are proud of the Company’s significant
progress executing against its long-term strategy. As we advance through the initial stages of a
multi-year wireless transition, our performance remains strong. Of note, in fiscal year 2021 we
achieved record revenue of $5.1 billion, up 52% year-over-year, delivering significant growth as a
result of our expanded product portfolio. Skyworks is well-positioned to continue making investments
in next-generation technologies to fuel sustainable growth.
The Board is committed to providing critical oversight and helping to ensure that the Company’s
corporate culture is aligned with growing and protecting your investment over the long term. As
directors, we continue to play a leading role in overseeing the strategic direction of the Company and
monitoring execution of this strategy by management. The 2022 Annual Meeting of Stockholders
provides a moment to reflect on some of the Board’s key focus areas, which include:
•
•
Refreshing Our Board with New Perspectives: Our Board includes a diverse, experienced
group of independent directors with a range of relevant qualifications that support the
Company’s strategy and position it for long-term success. Thoughtful, ongoing attention to Board
composition is an important responsibility as we seek to ensure an appropriate mix of tenure and
expertise that balances fresh perspectives and institutional knowledge. Earlier this year, we
appointed Eric J. Guerin and Suzanne “Suzi” E. McBride to the Board. They both bring a wealth of
experience, and we look forward to leveraging their skills and insights as we deliver on our vision
of Connecting Everyone and Everything, All the Time.
Engaging Regularly with Stockholders: Stockholder engagement remains an important part
of the Board’s longstanding commitment to sound governance practices. Our ongoing dialogue
with stockholders throughout the year allows the Board to better understand our stockholders’
priorities and perspectives and to incorporate them into our deliberations and decision making.
Following low support for our executive pay program at the 2021 Annual Meeting, our
Compensation Committee undertook a robust process to review the Company’s executive
compensation structure, taking into account feedback from our stockholders that we gathered
as part of an extensive outreach effort. In the months following the 2021 Annual Meeting, we
proactively reached out to stockholders representing nearly 51% of the Company’s outstanding
common stock and I personally engaged with stockholders representing approximately 34% of
the Company’s outstanding common stock. These efforts resulted in meaningful, responsive
changes to our executive compensation program, as highlighted in the pages that follow. We
continue to believe that one of the Board’s most critical responsibilities is ensuring an executive
compensation program that appropriately attracts, retains, and incentivizes our management
team, and we further believe that the changes made to the compensation program are aligned
with the interests of you, our stockholders.
As we move forward in 2022, I am confident that the Company will continue to build on its momentum
with the Board’s active involvement and stewardship. We look forward to hearing your views at this
year’s Annual Meeting and in the year to come.
With appreciation,
Christine King
Lead Independent Director
Chairman, Compensation Committee
Member, Audit Committee
NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS
Date and Time
May 11, 2022
11:00 a.m. PDT
Location
www.virtualshareholdermeeting.com/
SWKS2022
Record Date
March 17, 2022
Items of Business
1.
To elect eight individuals nominated to serve as directors of the Company with terms expiring at the
2023 Annual Meeting of Stockholders and named in the Proxy Statement;
2.
3.
To ratify the selection by the Company’s Audit Committee of KPMG LLP as the independent
registered public accounting firm for the Company for fiscal year 2022;
To approve, on an advisory basis, the compensation of the Company’s named executive officers;
4-7. To approve four separate amendments to the Company’s Restated Certificate of Incorporation to
eliminate the supermajority vote provisions relating to (a) stockholder approval of a merger or
consolidation, disposition of all or substantially all of the Company’s assets, or issuance of a substantial
amount of the Company’s securities; (b) stockholder approval of a business combination with any
related person; (c) stockholder amendment of charter provisions governing directors; and
(d) stockholder amendment of the charter provision governing action by stockholders;
8.
9.
To consider one stockholder proposal, if properly presented at the Annual Meeting; and
To transact such other business as may properly come before the Annual Meeting.
Your Vote Is Important.
To ensure your representation at the Annual Meeting, please submit your proxy or voting instructions as
soon as possible by using any of the following methods, as described in greater detail on your proxy card
or voter instruction form.
Internet
Phone
Mail
The accompanying Proxy Statement includes further information about how to attend the Annual
Meeting online, vote your shares online during the Annual Meeting, and submit questions online during
the Annual Meeting. A complete list of registered stockholders will be available for examination during
the Annual Meeting at www.virtualshareholdermeeting.com/SWKS2022.
By Order of the Board of Directors,
Robert J. Terry
Senior Vice President, General Counsel and Secretary
Irvine, California • March 25, 2022
PROXY STATEMENT 2022
Table of Contents
Proxy Statement Summary . . . . . . .
Proposal 1: Election of Directors . .
Nominees for Election . . . . . . . . . . . . .
Board Diversity Matrix . . . . . . . . . . . . .
Corporate Governance . . . . . . . . . . . . .
Committees of the Board of Directors . .
Role of the Board of Directors in Risk
Oversight . . . . . . . . . . . . . . . . . . . . . . .
Compensation Committee Interlocks
and Insider Participation . . . . . . . . . . . .
Certain Relationships and Related
Person Transactions . . . . . . . . . . . . . . .
1
8
10
15
16
20
24
25
25
Proposal 2: Ratification of
Independent Registered Public
Accounting Firm . . . . . . . . . . . . . . . . . 26
Audit Fees . . . . . . . . . . . . . . . . . . . . . .
27
Report of the Audit Committee . . . 28
Proposal 3: Advisory Vote on the
Compensation of Our Named
Executive Officers (“Say-on-Pay”
Vote) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Information About Executive and
Director Compensation . . . . . . . . . . 30
Summary and Highlights . . . . . . . . . . .
30
Compensation Discussion and
Analysis . . . . . . . . . . . . . . . . . . . . . . . .
Compensation Tables for Named
Executive Officers . . . . . . . . . . . . . . . . .
Director Compensation . . . . . . . . . . . .
31
44
55
Compensation Committee
Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Proposals 4-7: Approval of
Amendments to Charter to
Eliminate Supermajority Vote
Provisions . . . . . . . . . . . . . . . . . . . . . . . 58
Proposal 8: Stockholder Proposal
Regarding Stockholder Special
Meeting Right . . . . . . . . . . . . . . . . . . . 63
Statement of Opposition by the Board
of Directors . . . . . . . . . . . . . . . . . . . . .
64
Security Ownership of Certain
Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . 66
General Information . . . . . . . . . . . . . 68
Other Proposed Action . . . . . . . . . . 74
Other Matters . . . . . . . . . . . . . . . . . . . 74
Appendix A: Provisions of
Charter Subject to Potential
Amendment . . . . . . . . . . . . . . . . . . . . . 76
Appendix B: Unaudited
Reconciliations of Non-GAAP
Financial Measures . . . . . . . . . . . . . . 83
Discussion Regarding the Use of
Non-GAAP Financial Measures . . . . . . .
84
Proxy Statement
PROXY STATEMENT SUMMARY
This summary highlights financial and other accomplishments during fiscal year 2021, as well as
information generally contained elsewhere in this Proxy Statement. This summary does not contain all of
the information that you should consider in advance of the 2022 Annual Meeting of Stockholders, and we
encourage you to read the entire Proxy Statement before voting your shares.
2022 Annual Meeting of Stockholders
Date and Time
May 11, 2022
11:00 a.m. PDT
Location
www.virtualshareholdermeeting.com/
SWKS2022
Record Date
March 17, 2022
Matters to be Voted Upon
Your vote is very important to us. Please cast your vote on all of the proposals to ensure that your shares
are represented.
Proposal
Required Vote
for Approval
Board
Recommendation
See
Page
1.
Election of Directors
For each director, majority of votes cast
2.
Ratification of Appointment of KPMG LLP
Majority of votes present and entitled to
vote
3.
Advisory Vote to Approve Compensation
of Named Executive Officers
Majority of votes present and entitled to
vote
4 – 7.
Approve Amendments to Certificate of
Incorporation to Eliminate Supermajority
Vote Provisions
80% (or 90% in case of Proposal 5) of
shares outstanding
FOR Each
Nominee
FOR
FOR
FOR
8.
One Stockholder Proposal, if Properly
Presented at the Annual Meeting
Majority of votes present and entitled to
vote
AGAINST
8
26
29
58
63
Proxy Statement
1
Financial Highlights from Fiscal Year 2021
In our fiscal year ended October 1, 2021 (“fiscal year 2021”), the Company delivered strong performance
through the initial stage of a multi-year wireless transition that has been powered by deep customer
relationships and decades of investments in innovative connectivity solutions.
• Achieved net revenue of $5.109 billion, up 52% year over year
• Achieved operating margin of 31.6% on a GAAP basis (38.2% on a non-GAAP basis)1
• Achieved diluted earnings per share of $8.97 on a GAAP basis ($10.50 on a non-GAAP basis)1
• Generated operating cash flow of $1.772 billion, up 47% year over year
• Increased our quarterly dividend from $0.50 per share to $0.56 per share
• Returned $536.2 million to stockholders through repurchasing 1.4 million shares of our common
stock for $195.6 million and through payments of $340.6 million in cash dividends
Quarterly Dividends:
Fiscal Years 2015 — 2021
$1.58
$1.34
$0.44
$2.06
$0.56
$0.50
$1.82
$0.50
$0.44
$0.50
$0.44
$1.16
$0.32
$1.06
$0.28
$0.26
$0.28
$0.26
$0.28
$0.38
$0.32
$0.32
$0.26
$0.28
$0.32
$0.65
$0.26
$0.13
$0.13
$0.13
Q4
Q3
Q2
Q1
$0.38
$0.38
$0.38
$0.44
$0.50
FY15
FY16
FY17
FY18
FY19
FY20
FY21
Please see table on page 83 for a full reconciliation of non-GAAP results to GAAP results.
1
2
Proxy Statement
Driving Long-Term Stockholder Value
The Company’s strong long-term performance is demonstrated in our total stockholder return (“TSR”),
which has outperformed the S&P 500 benchmark over the past three, five, and ten fiscal year periods, as
displayed in the chart below.
Total Stockholder Return (1)
SWKS
S&P 500
973%
385%
88%
57%
135% 121%
3 Year
(FY19-FY21)
5 Year
(FY17-FY21)
10 Year
(FY12-FY21)
(1) Per S&P Capital IQ; represents TSR for Skyworks and the component companies of
the S&P 500 index, for the three-, five-, and ten-year periods ended October 1, 2021
Other Accomplishments from Fiscal Year 2021
During fiscal year 2021, we acquired the Infrastructure and Automotive business of Silicon Laboratories
Inc. (the “Acquisition”). The Acquisition accelerates our expansion into high-growth market segments,
including electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless
infrastructure, optical data communication, data center, automotive, smart home, and several other
applications.
In addition, we broadened our customer set and expanded our suite of applications. Highlights from the
year include:
• Expanded the comprehensive coverage of our Sky5® portfolio, supporting more than 20 5G
smartphone platforms of the leading Tier-1 OEMs
• Extended market leadership in Wi-Fi 6 and 6E connectivity platforms
• Enhanced IoT connected home and security solutions extending range and maximized power
efficiency
• Captured design wins supporting home fitness applications
• Provided power isolation solutions for EV, residential solar, and energy storage systems
• Ramped innovative, cognitive wireless audio solutions powering leading gaming headsets and
home theater systems
• Leveraged wireless infrastructure and small cell portfolio to deploy MIMO base stations with
European and Asian OEMs
• Enabled advanced telematics systems and infotainment solutions for the world’s leading
automakers
• Integrated more than 1 billion BAW filters into transmit and receive applications
Proxy Statement
3
Our Director Nominees
Eight of our currently serving directors have been nominated for election to our Board of Directors (the
“Board”) to serve until the 2023 Annual Meeting of Stockholders and until their successors are elected and
qualified or until their earlier resignation or removal. Additional information on each nominee may be
found below under “Election of Directors.” The following table lists the eight nominees, their age, the year
such nominees were first elected as directors of the Company, their principal occupation, their
independence status, their Board committee memberships as of March 1, 2022, and the number of
other public company boards on which they serve.
Name
Liam K. Griffin
Chairman of the Board
Director
Since
Age
55
2016
Principal Occupation
Independent
Chairman, CEO and President,
Skyworks Solutions
Committee
Memberships
—
Christine King
Lead Independent Director
72
2014
Retired Executive Chairman,
QLogic
Alan S. Batey
59
2019
Kevin L. Beebe
Eric J. Guerin
Suzanne E. McBride
David P. McGlade
63
50
53
61
2004
2022
2022
2005
Retired EVP and President of
North America, General Motors
President and CEO, 2BPartners
CFO, CDK Global
COO, Iridium Communications
Retired Executive Chairman,
Intelsat
Robert A. Schriesheim
61
2006
Chairman, Truax Partners
•
•
•
•
•
•
•
AC, CC (C)
NCGC
NCGC (C)
—
—
AC (C), CC
AC, CC
Other Public
Company
Boards
1
—
—
2
1
1
—
1
“AC” indicates Audit Committee, “CC” indicates Compensation Committee, “NCGC” indicates Nominating and Corporate
Governance Committee, and “(C)” indicates Committee Chair
The eight director nominees standing for reelection to the Board have diverse backgrounds, skills, and
experiences. We believe their varied backgrounds contribute to an effective and well-balanced Board that
is able to provide valuable insight to, and effective oversight of, our senior management team.
Director Independence
Director Tenure
Director Diversity
(Gender and Race/Ethnicity)
> 10 Years
87.5%
Independent
8.5
Years Average
Tenure
5-10 Years
< 5 Years
37.5%
Diverse
4
Proxy Statement
Corporate Governance Highlights
The Company has a proven track record of sound and effective corporate governance practices and
policies, including those highlighted below.
Corporate Governance Best Practices
Annually Elected Directors
All of our directors are elected annually
Majority Vote Standard
In uncontested elections, directors are elected by a majority of votes cast
Lead Independent Director
Initially established in 2014, the Lead Independent Director role has a robust set of
duties set forth in our corporate governance guidelines
Executive Sessions
Our independent directors regularly meet in executive sessions without
management, with the Lead Independent Director presiding
Independent Board Committees
All members of the Board’s three standing committees are independent directors
Board Refreshment
Risk Assessment
Annual Board Assessment
Our Board regularly takes steps to refresh its membership, most recently appointing
Mr. Guerin and Ms. McBride in early 2022
Our Board and its committees regularly review management’s processes for
identifying, assessing, and managing risks
The Nominating and Corporate Governance Committee oversees an annual
evaluation of the effectiveness of the Board, each committee, and individual
directors
Executive Succession Plan
The Board periodically reviews and approves the executive succession plan in
consultation with the Compensation Committee and the Chief Executive Officer
No “Poison Pill”
The Board has not adopted a “poison pill”
Stock Ownership Requirements
All directors and executive officers are subject to robust stock ownership
requirements
Prohibition on Pledging
We prohibit our directors and employees from pledging Company securities
Special Meeting Right
Proxy Access
Our stockholders have the right to call a special meeting of the Company’s
stockholders
Eligible stockholders may nominate their own director nominees to be included in
the Company’s proxy materials
Regular Stockholder Engagement
We regularly conduct outreach to our stockholders to understand their
perspectives on governance matters
Proxy Statement
5
Compensation Highlights
Under our pay-for-performance philosophy, we believe that executive compensation should be strongly
aligned with the interests of our long-term stockholders. As a result, a substantial portion of each
Named Executive Officer’s annual compensation is tied to Company performance and stock price
performance. The charts below show the target total direct compensation mix for fiscal year 2021 for our
Chief Executive Officer and the average for the other Named Executive Officers, in each case reflecting
actual salary, target short-term incentive award, and the grant date fair value of long-term stock-based
compensation awards.
Chief Executive Officer
Other Named Executive Officers
Restricted
Stock Units
31%
Base
Salary
7%
Short-Term
Incentive
12%
Long-Term
Stock-Based
Incentive
81%
Performance
Shares
50%
At Risk
Subject to
Performance
Metrics
Restricted
Stock Units
29%
Base
Salary
13%
Long-Term
Stock-Based
Incentive
76%
Short-Term
Incentive
11%
Performance
Shares
47%
6
Proxy Statement
Stockholder Engagement
Responsiveness to the Company’s stockholders is a critical part of our commitment to good corporate
governance. As noted in the list of best practices above, we regularly conduct outreach to our stockholders
to understand their perspectives on governance matters. Most recently, we engaged in formal
stockholder outreach following the 2021 Annual Meeting. We solicited feedback from more than thirty
of our largest institutional stockholders representing approximately 51% of the Company’s shares
outstanding, and held engagement meetings as follows:
We Held Engagement Meetings
with Stockholders Representing
We Held Engagement
Meetings with
Ms. King Joined Meetings with
Stockholders Representing
39%
of Our Shares
Outstanding
8 of 10
Largest
Stockholders
34%
of Our Shares
Outstanding
The primary topic of conversation in most engagement meetings was the Company’s executive
compensation program. Many stockholders, while supporting the majority of the Company’s compensation
policies, nonetheless suggested modifications to specific plan designs, including to the metrics,
performance periods, and vesting periods under the Company’s long-term stock-based compensation
program. After considering this input from our stockholders, as well as evaluating practices related to
executive compensation by public companies generally, and our peer group specifically, our
Compensation Committee committed to several key responsive changes to the Company’s compensation
program. The following changes were adopted after the conclusion of the Company’s fiscal year 2021
and therefore generally apply beginning with the compensation program for the Company’s fiscal year
ending September 30, 2022 (“fiscal year 2022”):
November 2019 One-Time Awards
No one-time awards granted to Named Executive Officers in 2020 or 2021
and no future one-time grants anticipated
Long-Term Equity: FY 2022 Performance
Share Award Design
Transitioned from design win metric (non-disclosable) to relative EBITDA
margin metric (disclosable)
Compensation Peer Group
Clawback Policy
Extended performance period to two years for relative EBITDA margin metric
Extended vesting period to two years for one-year emerging revenue growth
metric
Set target performance at 55th percentile of peer group for both relative
EBITDA margin and TSR metrics
Adjusted peer group to remove certain large comparator companies and
improve comparability
Adopted a clawback policy that provides for recovery of incentive
compensation from executive officers in the event of a financial restatement
Proxy Statement
7
PROPOSAL 1:
ELECTION OF DIRECTORS
Under this Proposal 1, you are being asked to
consider eight nominees for election to our Board
of Directors to serve until the 2023 Annual
Meeting of Stockholders and until their successors
are elected and qualified or until their earlier
resignation or removal. Each nominee for election
has agreed to serve if elected, and the Board
knows of no reason why any nominee should be
unable or unwilling to serve. If a nominee is unable
or unwilling to serve, the attorneys-in-fact named
in this Proxy Statement will vote any shares
represented at the meeting by proxy for the
election of another individual nominated by the
Board, if any. No nominee or executive officer is
related by blood, marriage, or adoption to any
other director, nominee, or executive officer. No
arrangements or understandings exist between
any director or person nominated for election as
a director and any other person pursuant to which
such person is to be selected as a director or
nominee for election as a director.
Name
Liam K. Griffin, Chairman of the Board
Christine King, Lead Independent Director
Alan S. Batey
Kevin L. Beebe
Eric J. Guerin
Suzanne E. McBride
David P. McGlade
Robert A. Schriesheim
Number of Meetings in FY2021
Director
Since
2016
2014
2019
2004
2022
2022
2005
2006
Timothy R. Furey, age 63, and Kimberly S.
Stevenson, age 59, have served as directors since
1998 and 2018, respectively, and are not director
nominees up for reelection at the Annual Meeting.
As a result, the number of directors constituting
the Board will be reduced from ten (10) to eight
(8) effective upon the election of directors at the
Annual Meeting. Proxies cannot be voted for a
greater number of individuals than the number of
nominees named in this Proxy Statement. The
Nominating and Corporate Governance
Committee is currently conducting a search for
another director with the current intention of
increasing the size of the Board to nine (9) directors
as soon as practicable.
The following table lists the eight nominees for
election as directors, the year such nominees were
first elected as directors of the Company, and
their Board committee memberships as of
March 1, 2022. The table also lists the number of
meetings held by each committee during fiscal
year 2021.
Committee Memberships
Independent
AC
•
•
•
•
•
•
•
•
C
•
8
CC
C
•
•
5
NCGC
•
C
3
“AC” indicates Audit Committee, “CC” indicates Compensation Committee, “NCGC” indicates Nominating and Corporate
Governance Committee, and “C” indicates Committee Chair
8
Proxy Statement
Immediately below this proposal is biographical
information about each of the director nominees,
including information regarding each nominee’s
business experience for the past five years, and the
names of other public companies for which each
nominee has served as a director during the past
five years. In addition to the information
presented below regarding each nominee’s
specific experience, qualifications, attributes, and
skills that led our Nominating and Corporate
Governance Committee and our Board to
conclude that he or she should serve as a director,
we also believe that each of our directors has a
reputation for integrity, honesty, and adherence to
high ethical standards. They have each
demonstrated business acumen, an ability to
exercise sound judgment, knowledge of our
business and industry, and the willingness to
devote the time needed to be an effective director.
Majority Vote Standard for Election of Directors
A nominee for election as a director in an
uncontested election (an election where the
number of nominees for election as directors is
equal to or less than the number of directors to be
elected) will be elected if the number of votes
cast “FOR” such nominee’s election exceeds the
number of votes cast “AGAINST” the nominee’s
election. In a contested election (in which the
number of nominees for election as directors
exceeds the number of directors to be elected at
such meeting), directors are elected by a
plurality of all votes cast in such election. The
election of directors at this Annual Meeting is
uncontested. As a result, each nominee for election
as a director at the Annual Meeting will only be
elected if the votes cast “FOR” such nominee
exceed the number of votes cast “AGAINST” such
nominee. As required by our corporate
governance guidelines, which are available on
the Investor Relations portion of the Company’s
website at www.skyworksinc.com, each incumbent
director who is a nominee for election as a
director at the Annual Meeting submitted to the
Board an irrevocable resignation that would
become effective if the votes cast “FOR” such
nominee’s election do not exceed the votes cast
“AGAINST” such nominee’s election and our Board
determines to accept his or her resignation.
Upon such resignation by a nominee and pursuant
to the procedures set forth in the corporate
governance guidelines, the Nominating and
Corporate Governance Committee will evaluate
the best interests of our Company and
stockholders and will recommend to our Board
the action to be taken with respect to the
resignation. The Board will then decide whether
to accept, reject, or modify the Nominating and
Corporate Governance Committee’s
recommendation, and the Company will publicly
disclose such decision by the Board with respect
to the director nominee.
Shares represented by all proxies received by the
Board that are properly completed, but do not
specify a choice as to the election of directors, will
be voted “FOR” the election of all eight of the
nominees.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE ELECTION OF EACH OF THE EIGHT NOMINEES IN PROPOSAL 1
VOTE
Proxy Statement
9
Nominees for Election
Liam K. Griffin, Chairman, Chief Executive Officer and President
Director since: 2016 • Age: 55
Committee(s)
• None
Other Public Company Boards
Current
• National Instruments Corporation
Past 5 Years
• Vicor Corporation (until 2019)
Prior to his appointment as Chairman of the Board in May 2021,
Mr. Griffin had served as Chief Executive Officer and a director
since May 2016 and as President since May 2014. He served as
Executive Vice President and Corporate General Manager from
November 2012 to May 2014, Executive Vice President and
General Manager, High Performance Analog from May 2011 to
November 2012, and Senior Vice President, Sales and Marketing
from August 2001 to May 2011. Previously, Mr. Griffin was
employed by Vectron International, a division of Dover Corp., as
Vice President of Worldwide Sales from 1997 to 2001 and as Vice
President of North American Sales from 1995 to 1997.
Qualifications: We believe that Mr. Griffin’s qualifications to serve
as a director include his strong relationships with Skyworks’ key
customers, investors, employees, and other stakeholders, as well
as his deep understanding of the semiconductor industry and its
competitive landscape gained through serving in several different
executive positions at Skyworks.
Christine King, Lead Independent Director
Director since: 2014 • Age: 72
Ms. King has been Lead Independent Director since 2019. She
served as Executive Chairman of QLogic Corporation (a publicly
traded developer of high-performance server and storage
networking connectivity products) from August 2015 until
August 2016, when it was acquired by Cavium, Inc. Previously, she
served as Chief Executive Officer of Standard Microsystems
Corporation (a publicly traded developer of silicon-based
integrated circuits utilizing analog and mixed-signal technologies)
from 2008 until the company’s acquisition in 2012 by Microchip
Technology, Inc. Prior to Standard Microsystems, Ms. King was
Chief Executive Officer of AMI Semiconductor, Inc., a publicly
traded company, from 2001 until it was acquired by ON
Semiconductor Corp. in 2008.
Qualifications: We believe that Ms. King’s qualifications to serve
as a director include her extensive management and operational
experience in the high-tech and semiconductor industries as well
as her significant strategic and financial expertise.
Committee(s)
• Audit
• Compensation (Chair)
Other Public Company Boards
Current
• None
Past 5 Years
• Allegro MicroSystems, Inc. (until 2021)
• IDACORP, Inc. (until 2021)
• Cirrus Logic, Inc. (until 2018)
10
Proxy Statement
Alan S. Batey
Mr. Batey served as Executive Vice President and President of
North America for General Motors Company (a publicly traded
automotive manufacturer), as well as the Global Brand Chief for
Chevrolet, a division of General Motors Company, from 2014 until
2019. His career spans more than 39 years with General Motors
where he held various senior management positions in operations,
marketing, and sales around the world.
Qualifications: We believe that Mr. Batey’s qualifications to serve
as a director include his extensive senior management experience
at General Motors, where he developed expertise on a broad set
of complex strategic, operational, and technological matters
involving the automotive industry, an industry that is expected to
be a growth market for the Company.
Director since: 2019 • Age: 59
Committee(s)
• Nominating and Corporate
Governance
Other Public Company Boards
Current
• None
Past 5 Years
• None
Kevin L. Beebe
Director since: 2004 • Age: 63
Mr. Beebe has been President and Chief Executive Officer of
2BPartners, LLC (a partnership that provides strategic, financial,
and operational advice to private equity investors and
management) since 2007. In 2014, Mr. Beebe became a founding
partner of Astra Capital Management (a private equity firm based
in Washington, D.C.). Previously, beginning in 1998, he was Group
President of Operations at ALLTEL Corporation (a
telecommunications services company).
Qualifications: We believe that Mr. Beebe’s qualifications to serve
as a director include his two decades of experience as an
operating executive in the wireless telecommunications industry as
well as his experience and relationships gained from advising
leading private equity firms that are transacting business in the
global capital markets.
Committee(s)
• Nominating and Corporate
Governance (Chair)
Other Public Company Boards
Current
• SBA Communications Corporation
• Frontier Communications Parent, Inc.
(formerly Frontier Communications
Corporation)
Past 5 Years
• Altimar Acquisition Corporation (until
2021)
• Altimar Acquisition Corp. II (until 2021)
• NII Holdings, Inc. (until 2019)
Proxy Statement
11
Eric J. Guerin
Mr. Guerin serves as Executive Vice President and Chief Financial
Officer of CDK Global, Inc. (a publicly traded provider of
integrated technology solutions to the automotive industry), a
position he has held since January 2021. From 2016 to 2021, he
served as Division Vice President and sector Chief Financial Officer
at Corning Glass Technologies, a division of Corning Inc. (a
publicly traded innovator in materials science). Previously, he
served in financial leadership roles at Flowserve Corporation,
Novartis Corporation, Johnson & Johnson Services Inc., and
AstraZeneca PLC, each a publicly traded company or subsidiary
thereof.
Qualifications: We believe that Mr. Guerin’s qualifications to serve
as a director include his financial and operational expertise,
together with his extensive engagements within Asia-Pacific
markets.
Director since: 2022 • Age: 50
Committee(s)
• None
Other Public Company Boards
Current
• Natus Medical Incorporated
Past 5 Years
• None
Suzanne E. McBride
Director since: 2022 • Age: 53
Committee(s)
• None
Other Public Company Boards
Current
• Iridium Communications, Inc.
Past 5 Years
• None
Ms. McBride serves as Chief Operations Officer for Iridium
Communications, Inc. (a publicly traded operator of a satellite-
based global communications network). Prior to rejoining Iridium
in February 2019, where she had previously served from 2007 to
2016 in various leadership roles, Ms. McBride was Senior Vice
President and Chief Operations Officer for OneWeb (a privately
held company building a space-based global communications
network that filed a voluntary petition for Chapter 11 bankruptcy
protection on March 27, 2020) from June 2016 to January 2019.
Earlier in her career, she held a series of increasingly senior
positions in technology and operations with Motorola Solutions,
Inc. (a publicly traded telecommunications company), and General
Dynamics Corporation (a publicly traded aerospace and defense
company).
Qualifications: We believe that Ms. McBride’s qualifications to
serve as a director include her extensive strategy and operations
expertise developed through twenty-five years of experience
within the wireless technology industry.
12
Proxy Statement
David P. McGlade
Director since: 2005 • Age: 61
Mr. McGlade served as Executive Chairman of Intelsat S.A. (a
publicly traded worldwide provider of satellite communication
services) from April 2015 to March 2018, prior to which he had
served as Chairman since April 2013 and Chief Executive Officer
since April 2005. He retired as Chairman of Intelsat in February
2022. Previously, Mr. McGlade served as an Executive Director of
mmO2 PLC and as the Chief Executive Officer of O2 UK (a
subsidiary of mmO2), a position he held from October 2000 until
March 2005.
Committee(s)
• Audit (Chair)
• Compensation
Other Public Company Boards
Current
• None
Past 5 Years
• Intelsat S.A. (until 2022)
Qualifications: We believe that Mr. McGlade’s qualifications to
serve as a director include his significant operational, strategic,
and financial acumen, as well as his knowledge about global
capital markets, developed over more than three decades of
experience in the telecommunications business.
Robert A. Schriesheim
Director since: 2006 • Age: 61
Mr. Schriesheim currently serves as chairman of Truax Partners LLC
(a consulting firm). He served as Executive Vice President and
Chief Financial Officer of Sears Holdings Corporation (a publicly
traded nationwide retailer) from August 2011 to October 2016.
From January 2010 to October 2010, Mr. Schriesheim was Chief
Financial Officer of Hewitt Associates, Inc. (a global human
resources consulting and outsourcing company that was acquired
by Aon Corporation). From October 2006 until December 2009,
he was the Executive Vice President and Chief Financial Officer of
Lawson Software, Inc. (a publicly traded ERP software provider).
Qualifications: We believe that Mr. Schriesheim’s qualifications to
serve as a director include his extensive knowledge of the capital
markets and corporate financial capital structures, his expertise
evaluating and structuring merger and acquisition transactions
within the technology sector, and his experience gained through
leading companies through major strategic and financial
corporate transformations.
Committee(s)
• Audit
• Compensation
Other Public Company Boards
Current
• Houlihan Lokey, Inc.
Past 5 Years
• Frontier Communications Corporation
(until 2021)
• NII Holdings, Inc. (until 2019)
• Forest City Realty Trust (until 2018)
Proxy Statement
13
The table below summarizes the key qualifications
and attributes relied upon by the Board in
nominating eight of our current directors for
election. Marks indicate specific areas of focus or
expertise relied on by the Board. The lack of a
mark in a particular area does not necessarily
signify a director’s lack of qualification or
experience in such area.
B atey
B ee b e
Griffi n
G uerin
Kin g
M cBrid e
M c Gla d e
Schriesheim
Skills and Experience
Other Public Company Boards
Current
Past 5 Years
Executive Leadership
Public Company CEO Experience
Public Company CFO Experience
Other Public Company Executive
Officer Experience1
International Business
Finance
Public Financial Reporting
Audit Committee Financial Expert2
Manufacturing / Operations
Technology
Semiconductors
Wireless Communication
Sales / Marketing
Mergers and Acquisitions
Skyworks Board Tenure
(in Years)
Demographic Background
Age
Gender
Female
Male
Race / Ethnicity
African American or Black
White
2
3
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
1
1
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
18
6
1
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
<1
3
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
8
1
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
1
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
<1
17
1
3
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
16
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
3
59
63
55
50
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
72
(cid:2)
53
(cid:2)
(cid:2)
(cid:2)
61
61
(cid:2)
(cid:2)
(cid:2)
(cid:2)
1. Section 16 Officer under applicable SEC rules
2. Per designation by Skyworks' Board of Directors of current Audit Committee Members
14
Proxy Statement
Board Diversity Matrix
The following matrix includes all directors serving as of March 1, 2022.
Total Number of Directors
10
Board Diversity Matrix (As of March 1, 2022)
Female
Male
Non-Binary
Did Not Disclose
Gender
1
Part I: Gender Identity
Directors
Part II: Demographic Background
African American or Black
Alaskan Native or Native American
Asian
Hispanic or Latinx
Native Hawaiian or Pacific Islander
White
Two or More Races or Ethnicities
LGBTQ+
3
3
6
1
5
Did Not Disclose Demographic Background
1
Proxy Statement
15
Corporate Governance
Stockholder Engagement
Responsiveness to the Company’s stockholders is
a critical part of our commitment to good
corporate governance. As noted in the list of best
practices in the Proxy Statement Summary
further above, we regularly conduct outreach to
our stockholders to understand their perspectives
on governance matters. Most recently, we
engaged in formal stockholder outreach following
the 2021 Annual Meeting. We solicited feedback
from more than thirty of our largest institutional
stockholders representing approximately 51% of
the Company’s shares outstanding. Institutions
representing approximately 45% of the Company’s
shares outstanding, including eighteen of our
twenty largest stockholders, responded to our
outreach. Our Company management held
subsequent engagement meetings with
stockholders representing approximately 39% of
the Company’s shares outstanding, including eight
of our ten largest stockholders, with Ms. King
joining more than a dozen meetings with
stockholders representing approximately 34% of
the Company’s shares outstanding.
Specifically, in addition to covering compensation-
related topics during our subsequent
conversations, as discussed below under
“Compensation Discussion and Analysis,” we
solicited and received feedback from institutional
stockholders on various key governance and
disclosure topics, including the following:
• Board Refreshment: Our institutional
stockholders generally agreed with the
Company’s approach to board refreshment,
including the phased retirement of long-tenured
directors. Many encouraged the Company to
appoint new directors that would add to
the diversity of backgrounds on our Board. In
addition to our recent addition of two new
directors, Mr. Guerin and Ms. McBride, our
Nominating and Corporate Governance
Committee is currently conducting a search for
another director.
• Sustainability Disclosure: Our institutional
stockholders were pleased with the additional
disclosure contained in our sustainability report
released in 2021, which included our first-time
alignment with the Sustainability Accounting
Standards Board (SASB) disclosure framework.
Some stockholders encouraged the Company to
add disclosure in upcoming reports on various
topics, including oversight by the Board of
environmental, social, and governance (“ESG”)
issues, specific environmental targets (such
as carbon emissions reduction), and our efforts
to combat human rights abuses in our supply
chain. We intend to include responsive
disclosures in our next sustainability report,
which is scheduled to be published in spring
2022.
• Workforce Diversity Disclosure: While our
institutional stockholders were pleased with the
disclosure in our sustainability report released
in 2021 regarding gender and ethnic diversity in
our U.S. workforce, several requested that we
also share the data from our annual Employment
Information Report (“EEO-1”) filings with the
Equal Employment Opportunity Commission. In
response, we posted on our website the
Company’s EEO-1 reports for both 2019 and
2020, and we intend to post future reports as
they are finalized.
• Supermajority Voting Provisions: Following the
approval of a stockholder proposal at our
2021 Annual Meeting regarding supermajority
voting provisions in our Restated Certificate of
Incorporation, as amended, which we refer to
as our Charter, our institutional stockholders
generally agreed with the Company’s intention
to include management proposals at the Annual
Meeting in 2022 that would eliminate all
remaining supermajority voting provisions in
our Charter. Those proposals are included as
Proposals 4-7 herein.
16
Proxy Statement
Our Board values the opinions expressed by our
stockholders and will continue to consider the
voting results from stockholder meetings, as well
as feedback obtained through our regular
stockholder engagement efforts, when making
future decisions regarding corporate governance
matters.
Board of Director Meetings
The Board met eight (8) times during fiscal year
2021. During fiscal year 2021, each director
attended at least 75% of the aggregate of the
total number of meetings of the Board and the
total number of meetings held by all committees
of the Board on which he or she served, with the
exception of Mr. Furey, who is not a nominee for
reelection at the Annual Meeting and attended
74% of such aggregate number of meetings. The
Company’s policy with respect to directors’
attendance at the Annual Meeting is included in
our corporate governance guidelines, which are
available on the Investor Relations portion of
the Company’s website at www.skyworksinc.com.
At the 2021 Annual Meeting, each director then
in office was in attendance.
Director Independence
Each year, the Board reviews the relationships
that each director has with the Company and with
other parties. Only those directors who do not
have any of the categorical relationships that
preclude them from being independent within
the meaning of the applicable Listing Rules of the
Nasdaq Stock Market LLC (the “Nasdaq Rules”)
and who the Board affirmatively determines have
no relationships that would interfere with the
exercise of independent judgment in carrying out
the responsibilities of a director are considered
to be independent directors. The Board has
reviewed a number of factors to evaluate the
independence of each of its members. These
factors include its members’ current and historic
relationships with the Company and its
competitors, suppliers, and customers; their
relationships with management and other
directors; the relationships their current and
former employers have with the Company; and
the relationships between the Company and other
companies of which a member of the Company’s
Board of Directors is a director or executive
officer. After evaluating these factors, the Board
has determined that nine of the ten members of
the Board, namely, Alan S. Batey, Kevin L. Beebe,
Timothy R. Furey, Eric J. Guerin, Suzanne E.
McBride, Christine King, David P. McGlade,
Robert A. Schriesheim, and Kimberly S. Stevenson,
do not have any relationships that would interfere
with the exercise of independent judgment in
carrying out their responsibilities as directors and
that each such director is an independent
director of the Company within the meaning of
applicable Nasdaq Rules.
Corporate Governance Guidelines
The Board has adopted corporate governance
practices to help fulfill its responsibilities to the
stockholders in overseeing the work of
management and the Company’s business
results. These guidelines are intended to ensure
that the Board has the necessary authority and
practices in place to review and evaluate the
Company’s business operations, as needed, and
to make decisions that are independent of the
Company’s management. In addition, the
guidelines are intended to align the interests of
directors and management with those of the
Company’s stockholders. A copy of the Company’s
corporate governance guidelines is available on
the Investor Relations portion of the Company’s
website at www.skyworksinc.com.
In accordance with these corporate governance
guidelines, independent members of the Board of
the Company met in executive session without
management present four (4) times during fiscal
year 2021. The Lead Independent Director served
as presiding director for these meetings.
Code of Ethics
We have adopted a written code of business
conduct and ethics that applies to our directors,
officers, and employees, including our principal
executive officer, principal financial officer,
principal accounting officer or controller, or
persons performing similar functions. We make
available our code of business conduct and ethics
Proxy Statement
17
free of charge through our website at
www.skyworksinc.com. We intend to disclose any
amendments to, or waivers from, our code of
business conduct and ethics that are required to
be publicly disclosed by posting any such
amendment or waivers on our website pursuant
to requirements of the Securities and Exchange
Commission (the “SEC”) and Nasdaq Rules.
Executive Officer and Director Stock
Ownership Requirements
As described in detail below under “Compensation
Discussion and Analysis,” we have adopted
Executive Officer and Director Stock Ownership
programs that require our executive officers
(including those Named Executive Officers who
are still currently serving as executive officers) and
non-employee directors to hold a significant
equity interest in Skyworks with the objective of
more closely aligning the interests of our executive
officers and directors with those of our
stockholders. All of our Named Executive Officers
and directors have met the stock ownership
guidelines as of the date hereof (with the exception
of Mr. Guerin and Ms. McBride, who are not
required to comply with the guidelines until the
fifth anniversary of their appointments to the
Board).
Board Leadership Structure
Our Board selects the Company’s Chairman of
the Board and Chief Executive Officer in the
manner it determines to be in the best interests of
the Company at the time. Our former Chairman
of the Board, Mr. Aldrich, served as the Chairman
of the Board from May 2014 until his retirement
in May 2021. Our current Chairman and Chief
Executive Officer, Mr. Griffin, was appointed by our
Board in May 2016 to succeed Mr. Aldrich as
Chief Executive Officer and also to serve as a
director, and was appointed by our Board in
May 2021 to succeed Mr. Aldrich as Chairman of
the Board. The Board believes that this leadership
structure, coupled with a strong emphasis on
Board independence, provides effective
independent oversight of management while
allowing both the Board and management to
benefit from Mr. Griffin’s experience and skills
developed over nearly twenty years at the
Company serving in executive roles.
Importantly, the Board has a strong and
empowered Lead Independent Director who
provides an effective independent voice in our
leadership structure. In May 2014, at the time of
Mr. Aldrich’s appointment as Chairman of the
Board, our Board first appointed an independent
director within the meaning of applicable
Nasdaq Rules (see above under “Director
Independence”) to serve as the Lead Independent
Director. Ms. King was appointed in May 2019 to
be the current Lead Independent Director.
The duties of the Lead Independent Director, as
set forth in our corporate governance guidelines,
include the following:
• presiding at all meetings of the Board at which
the Chairman of the Board is not present,
including executive sessions of the independent
directors;
• calling meetings of the independent directors,
as he or she deems appropriate, and assuring
that the independent directors meet
independently at least twice each year;
• providing leadership to the Board if
circumstances arise in which the Chairman of
the Board may be, or may be perceived to be, in
conflict with the interests of the Company and
its stockholders with regard to a particular
matter;
• facilitating communications and serving as a
liaison, when necessary, between the
independent directors and the Chairman of the
Board and/or the Chief Executive Officer;
• consulting with the Chairman of the Board in
the preparation of the schedules, agendas, and
information provided to the Board for each
meeting, and ensuring that there is sufficient
time at each meeting for discussion of all agenda
items;
• retaining independent advisors on behalf of the
Board as the Board or the independent
directors may deem necessary or appropriate;
and
18
Proxy Statement
• being available for consultation and direct
communication upon the reasonable request of
major stockholders.
The Board believes our current leadership
structure is appropriate and that the duties of the
Lead Independent Director appropriately and
effectively complement the duties of the Chairman
of the Board.
Stockholder Communications
Our stockholders may communicate directly with
the Board as a whole or to individual directors
by letter addressed directly to such individual or
individuals at the following address:
c/o Skyworks Solutions, Inc.
5260 California Avenue
Irvine, CA 92617
Attention: Secretary
The Company will forward to each director to
whom such communication is addressed, and to
the Chairman of the Board in his capacity as
representative of the entire Board, any mail
received at the Company’s corporate office to the
address specified by such director and the
Chairman of the Board.
Proxy Statement
19
Committees of the Board of Directors
The Board has a standing Audit Committee,
Compensation Committee, and Nominating and
Corporate Governance Committee.
Audit Committee
We have established an Audit Committee
consisting of the following individuals, each of
whom the Board has determined is “independent”
within the meaning of applicable Nasdaq Rules
and meets the criteria for independence set forth
in Rule 10A-3(b)(1) under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”):
Mr. McGlade (Chairman), Mr. Furey, Ms. King, and
Mr. Schriesheim.
The primary responsibility of the Audit Committee
is the oversight of the quality and integrity of the
Company’s financial statements, the Company’s
internal financial and accounting processes, and
the independent audit process. Additionally, the
Audit Committee has the responsibilities and
authority necessary to comply with Rule 10A-3
under the Exchange Act. The Audit Committee
meets privately with the independent registered
public accounting firm, reviews their performance
and independence from management, and has
the sole authority to retain and dismiss the
independent registered public accounting firm.
These and other aspects of the Audit Committee’s
authority are more particularly described in the
Company’s Audit Committee Charter, which the
Board adopted, is reviewed annually by the
committee, and is available on the Investor
Relations portion of our website at
www.skyworksinc.com.
The Audit Committee has adopted a formal
policy concerning approval of audit and non-audit
services to be provided to the Company by its
independent registered public accounting firm,
KPMG LLP. The policy requires that all services
provided by KPMG LLP, including audit services
and permitted audit-related and non-audit
services, be preapproved by the Audit Committee.
The Audit Committee preapproved all audit and
non-audit services provided by KPMG LLP for fiscal
year 2021. The Audit Committee met eight (8)
times during fiscal year 2021.
Audit Committee Financial Expert
The Board has determined that each of
Mr. McGlade (Chairman), Ms. King, and
Mr. Schriesheim meets the qualifications of an
“audit committee financial expert” under SEC rules
and the qualifications of “financial sophistication”
under the applicable Nasdaq Rules, and
qualifies as “independent” as defined under the
applicable Nasdaq Rules.
Compensation Committee
We have established a Compensation Committee
consisting of the following individuals, each of
whom the Board has determined is “independent”
within the meaning of applicable Nasdaq Rules
and a non-employee director within the meaning
of Rule 16b-3 under the Exchange Act: Ms. King
(Chairman), Mr. McGlade, and Mr. Schriesheim. The
Compensation Committee met five (5) times
during fiscal year 2021. The functions of the
Compensation Committee include establishing
the appropriate level of compensation, including
short- and long-term incentive compensation of
the Chief Executive Officer, all other executive
officers, and any other officers or employees who
report directly to the Chief Executive Officer.
The Compensation Committee also administers
Skyworks’ equity-based compensation plans. The
Compensation Committee’s authority to grant
equity awards to the Company’s executive officers
may not be delegated to the Company’s
management or others. The Board has adopted a
written charter for the Compensation Committee,
and it is available on the Investor Relations portion
of the Company’s website at www.skyworksinc.com.
The Compensation Committee has engaged
Aon/Radford Consulting (“Aon/Radford”) to assist
it in determining the components and amounts
of executive compensation. The consultant reports
directly to the Compensation Committee,
through its Chairman, and the Compensation
Committee retains the right to terminate or replace
20
Proxy Statement
the consultant at any time. The process and
procedures followed by the Compensation
Committee in considering and determining
executive and director compensation are
described below under “Compensation Discussion
and Analysis.”
Nominating and Corporate Governance
Committee
We have established a Nominating and Corporate
Governance Committee consisting of the
following individuals, each of whom the Board
has determined is “independent” within the
meaning of applicable Nasdaq Rules: Mr. Beebe
(Chairman), Mr. Batey, Mr. Furey, and
Ms. Stevenson. The Nominating and Corporate
Governance Committee met three (3) times during
fiscal year 2021. The Nominating and Corporate
Governance Committee is responsible for
evaluating and recommending individuals for
election or reelection to the Board and its
committees, including any recommendations that
may be submitted by stockholders, as well as
the evaluation and recommendation of corporate
governance policies. The Nominating and
Corporate Governance Committee oversees the
annual evaluation process for the Board, each
committee, and individual directors, by soliciting
from each director his or her assessment of the
effectiveness of the Board, the committees on
which he or she serves, and other individual
directors. These and other aspects of the
Nominating and Corporate Governance
Committee’s authority are more particularly
described in the Nominating and Corporate
Governance Committee Charter, which the Board
adopted and is available on the Investor
Relations portion of the Company’s website at
www.skyworksinc.com.
Director Nomination Procedures
The Nominating and Corporate Governance
Committee evaluates director candidates in the
context of the overall composition and needs of
the Board, with the objective of recommending a
group that can best manage the business and
affairs of the Company and represent the interests
of the Company’s stockholders using its diversity
of experience. The committee seeks directors
who possess certain minimum qualifications,
including the following:
• A director must have substantial or significant
business or professional experience or an
understanding of technology, finance,
marketing, financial reporting, international
business, or other disciplines relevant to the
business of the Company.
• A director (other than an employee-director)
must be free from any relationship that, in the
opinion of the Board, would interfere with the
exercise of his or her independent judgment as
a member of the Board or of a Board
committee.
• The committee also considers the following
qualities and skills, among others, in its selection
of directors and as candidates for appointment
to the committees of the Board:
• economic, technical, scientific, academic,
financial, accounting, legal, marketing,
or other expertise applicable to the business
of the Company;
• leadership or substantial achievement in
their particular fields;
• demonstrated ability to exercise sound
business judgment;
• integrity and high moral and ethical
character;
• potential to contribute to the diversity of
viewpoints, backgrounds, or experiences of
the Board as a whole;
• capacity and desire to represent the
balanced, best interests of the Company as
a whole and not primarily a special interest
group or constituency;
• ability to work well with others;
• high degree of interest in the business of
the Company;
• dedication to the success of the Company;
• commitment to the responsibilities of a
director; and
• international business or professional
experience.
The committee believes that our Board, taken as a
whole, should embody a diverse set of skills,
Proxy Statement
21
experiences, and backgrounds in order to better
inform its decisions. The committee considers age,
tenure, gender, race, and ethnicity, in addition to
business experience and other specific areas of
focus or expertise, in its holistic approach to
assessing and identifying director nominees. With
respect to the recent director searches that
culminated with the appointment of Mr. Guerin in
January 2022 and Ms. McBride in February 2022,
the Nominating and Corporate Governance
Committee instructed its retained search firms to
include in the pool of potential director nominees
candidates reflecting gender, racial, and ethnic
diversity. Each of Mr. Guerin and Ms. McBride was
recommended by the retained search firm that
performed the relevant director search. The
Nominating and Corporate Governance
Committee is currently conducting a search,
using a retained search firm, for another director
with the current intention of increasing the size of
the Board to nine (9) directors as soon as
practicable. As with its prior searches, the
Nominating and Corporate Governance
Committee instructed its retained search firm to
include in the pool of potential director nominees
candidates reflecting gender, racial, and ethnic
diversity.
The committee will also take into account the fact
that a majority of the Board must meet the
independence requirements of the applicable
Nasdaq Rules. The Company expects that a
director’s existing and future commitments will
not materially interfere with such director’s
obligations to the Company. For candidates who
are incumbent directors, the committee considers
each director’s past attendance at meetings and
participation in and contributions to the activities
of the Board. The committee identifies candidates
for director nominees in consultation with the Chief
Executive Officer of the Company and the
Chairman of the Board, through the use of search
firms or other advisors or through such other
methods as the committee deems to be helpful
to identify candidates. Once candidates have been
identified, the committee confirms that the
candidates meet all of the minimum qualifications
for director nominees set forth above through
interviews, background checks, or any other means
that the committee deems to be helpful in the
evaluation process. The committee then meets to
discuss and evaluate the qualities and skills of
each candidate, both on an individual basis and
considering the overall composition and needs of
the Board. Based on the results of the evaluation
process, the committee recommends candidates
for director nominees for election to the Board.
Stockholder Nominees
The Nominating and Corporate Governance
Committee will consider director candidates
recommended by stockholders provided such
stockholders follow the procedures set forth
below. The committee does not intend to alter
the manner in which it evaluates candidates,
including the criteria set forth above, based on
whether the candidate was recommended by a
stockholder or otherwise. Stockholders who wish
to nominate director candidates for election at
the 2023 Annual Meeting, but who are not to be
included in the Company’s proxy materials
pursuant to the proxy access provisions in our
By-laws, may do so in accordance with the
provisions of our By-laws by submitting a written
recommendation to the Secretary of the Company
at the address below no earlier than the close of
business on January 11, 2023, and no later than
the close of business on February 10, 2023. In
the event that the 2023 Annual Meeting is held
more than thirty (30) days before or after the first
anniversary of the Company’s 2022 Annual
Meeting, then the required notice must be
delivered in writing to the Secretary of the
Company at the address below no earlier than
120 days prior to the date of the 2023 Annual
Meeting and no later than the later of 90 days prior
to the 2023 Annual Meeting or the 10th day
following the day on which the public
announcement of the date of the 2023 Annual
Meeting is first made by the Company. For
nominees for election to the Board proposed by
stockholders to be considered, the
recommendation for nomination must be in
writing and must include the following information:
• name of the stockholder, whether an entity or
an individual, making the recommendation;
22
Proxy Statement
• a written statement disclosing such stockholder’s
beneficial ownership of the Company’s capital
stock;
• name of the individual recommended for
consideration as a director nominee;
• a written statement from the stockholder
making the recommendation stating why such
recommended candidate would be able to fulfill
the duties of a director;
• a written statement from the stockholder
making the recommendation stating how the
recommended candidate meets the
independence requirements established by the
SEC and the applicable Nasdaq Rules;
• a written statement disclosing the
recommended candidate’s beneficial ownership
of the Company’s capital stock; and
• a written statement disclosing relationships
between the recommended candidate and the
Company that may constitute a conflict of
interest.
A stockholder (or a group of up to twenty
stockholders) who has owned at least
three percent of the Company’s outstanding
shares of common stock continuously for at least
three years, and has complied with the other
requirements in the Company’s By-laws, may
nominate and include in the Company’s proxy
materials a number of director nominees up to the
greater of two individuals or 20% of the Board.
Written notice of a proxy access nomination for
inclusion in our proxy statement for the 2023
Annual Meeting of Stockholders must be
submitted to the Secretary of the Company at the
address below no earlier than the open of
business on December 12, 2022, and no later
than the close of business on January 11, 2023. In
the event that the 2023 Annual Meeting is held
more than thirty (30) days before, or more than
sixty (60) days after, the first anniversary of the
Company’s 2022 Annual Meeting, then the
required notice must be delivered in writing to
the Secretary of the Company at the address below
no earlier than 150 days prior to the date of the
2023 Annual Meeting and no later than the later of
120 days prior to the 2023 Annual Meeting or
the 10th day following the day on which the public
announcement of the date of the 2023 Annual
Meeting is first made by the Company.
Written notice of proxy access nominations and
written recommendations for nomination may be
sent to the General Counsel and Secretary of
the Company via U.S. mail or expedited delivery
service to:
Skyworks Solutions, Inc.
5260 California Avenue
Irvine, California 92617
Proxy Statement
23
Role of the Board of Directors in Risk Oversight
Our Board oversees our risk management
processes directly and through its committees.
Our management team is responsible for risk
management on a day-to-day basis. The role of
our Board and its committees is to oversee the risk
management activities of our management
team. They fulfill this duty by discussing with
management the policies and practices utilized
by management in assessing and managing risks
and providing input on those policies and
practices.
The following table summarizes the key risk
management areas over which the Board and its
committees exercise oversight:
Board of Directors
Audit Committee
• business strategy
• capital allocation
• organizational structure
• financial reporting
• financial and accounting controls and
processes
• legal and regulatory compliance
• cybersecurity
Compensation
Committee
Nominating and
Corporate
Governance
Committee
• executive compensation programs, policies
and practices
• executive performance
• Board size, composition, and effectiveness
• director skills, experience and diversity
• corporate governance policies and practices
• operational risks
• acquisitions
• internal audit function
• independent accounting firm
• related-party transactions
• whistleblower reporting
• enterprise risk assessment
• management succession planning
• non-employee director compensation
• ethics policies and practices
• corporate responsibility and
sustainability (including ESG programs)
Each committee reports to the Board on a regular
basis, including reporting with respect to the
committee’s risk oversight activities as well as
recommendations on actions requiring approval
of the full Board. For example, the Board
periodically reviews and approves the executive
succession plan in consultation with the
Compensation Committee and the Chief
Executive Officer. In addition, from time to time
the Board will request updates on particular focus
areas, such as cybersecurity, sustainability, and
human capital management. During fiscal year
2021, at each regularly scheduled meeting of the
Board, Company management updated the
Board on the impacts of COVID-19 on our business
and workforce.
Our Compensation Committee does not believe
that any risks arising from our employee
compensation policies and practices are
reasonably likely to have a material adverse effect
on our company. Our Compensation Committee
believes that any such risks are mitigated by:
• The multiple elements of our compensation
packages, including base salary, our annual
short-term incentive compensation plan and
(for our executive officers and other key
employees) equity awards that vest (or are
issuable) over multiple years and are intended
to motivate employees to take a long-term view
of our business.
• The structure of our short-term incentive
compensation plan (described in greater detail
in this Proxy Statement under “Compensation
Discussion and Analysis”), which is based on (i) a
number of different financial and operating
performance metrics to avoid employees
placing undue emphasis on any particular
performance metric at the expense of other
aspects of our business, and (ii) performance
targets that we believe are appropriately
aggressive yet will not require undue risk-taking
to achieve. Further, the structure of the
short-term incentive compensation plan aids in
driving sustained long-term financial
performance as the goals and targets from the
prior year’s plan are significant factors used in
determining goals for the current year’s plan.
24
Proxy Statement
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of
Directors currently consists of, and during fiscal
year 2021 consisted of, Ms. King (Chairman),
Mr. McGlade, and Mr. Schriesheim. No member
of this committee was at any time during fiscal year
2021 an officer or employee of the Company,
was formerly an officer of the Company or any of
its subsidiaries, or had any employment
relationship with the Company or any of its
subsidiaries. No executive officer of the Company
has served as a director or member of the
compensation committee (or other committee
serving an equivalent function) of any other entity,
where one of such entity’s executive officers
served as a director of the Company or a member
of the Compensation Committee.
Certain Relationships and Related Person Transactions
Other than compensation agreements and other
arrangements described below under “Information
About Executive and Director Compensation,”
since October 3, 2020, there has not been a
transaction or series of related transactions to
which the Company was or is a party involving an
amount in excess of $120,000 and in which any
director, executive officer, holder of more than
five percent (5%) of any class of our voting
securities, or any member of the immediate
family of any of the foregoing persons, had or will
have a direct or indirect material interest. Our
Board has adopted a written related person
transaction approval policy that sets forth the
Company’s policies and procedures for the review,
approval, or ratification of any transaction
required to be reported in its filings with the SEC.
The Company’s policy with regard to related
person transactions is that all related person
transactions between the Company and any
related person (as defined in Item 404 of
Regulation S-K) or their affiliates, in which the
amount involved is equal to or greater than
$120,000, be reviewed by the Company’s General
Counsel and approved by the Audit Committee.
In addition, the Company’s Code of Business
Conduct and Ethics requires that employees
discuss with the Company’s Compliance Officer
any significant relationship (or transaction)
that might raise doubt about such employee’s
ability to act in the best interest of the Company.
Proxy Statement
25
PROPOSAL 2:
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The Audit Committee has selected KPMG LLP as
the Company’s independent registered public
accounting firm for fiscal year 2022 and has further
directed that management submit the selection
of the independent registered public accounting
firm for ratification by the stockholders at the
Annual Meeting. KPMG LLP was the independent
registered public accounting firm for the
Company for fiscal year 2021, and has been the
independent registered public accounting firm for
the Company since 2002. We are asking the
stockholders to ratify the selection of KPMG LLP
as the Company’s independent registered public
accounting firm for fiscal year 2022.
Representatives of KPMG LLP are expected to
attend the Annual Meeting online. They will have
an opportunity to make a statement if they desire
to do so and will be available to respond to
appropriate stockholder questions.
Stockholder ratification of the selection of KPMG
LLP as the Company’s independent registered
public accounting firm is not required by the
Company’s By-laws or other applicable legal
requirements. However, the Audit Committee is
submitting the selection of KPMG LLP to the
stockholders for ratification as a matter of good
corporate practice. The affirmative vote of a
majority of the shares present online or
represented by proxy at the Annual Meeting and
entitled to vote on such matter at the Annual
Meeting is required to approve the selection of
KPMG LLP as the Company’s independent
registered public accounting firm. In the event
stockholders fail to ratify the appointment, the
Audit Committee may reconsider this
appointment. Even if the appointment is ratified,
the Audit Committee, in its discretion, may direct
the appointment of a different independent
registered public accounting firm at any time
during the year if the Audit Committee determines
that such a change would be in the Company’s
and stockholders’ best interests.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE RATIFICATION OF THE SELECTION OF KPMG LLP AS THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE
COMPANY FOR FISCAL YEAR 2022
VOTE
26
Proxy Statement
Audit Fees
KPMG LLP provided audit services to the
Company consisting of the annual audit of the
Company’s 2021 consolidated financial statements
contained in the Company’s Annual Report on
Form 10-K and reviews of the financial statements
contained in the Company’s Quarterly Reports on
Form 10-Q for fiscal year 2021. The following
table summarizes the fees of KPMG LLP billed to
the Company for the last two fiscal years.
Fee Category
Audit Fees(1)
Tax Fees(2)
Total Fees
Fiscal Year
2021 ($)
2,656,000
210,000
2,866,000
% of
Total (%)
92.7
7.3
100
Fiscal Year
2020 ($)
2,437,150
115,115
2,552,265
% of
Total (%)
95.5
4.5
100
(1) Audit fees consist of fees for the audit of our annual financial statements, review of the interim financial statements included
in our quarterly reports on Form 10-Q, statutory audits and related filings in various foreign locations, and audit procedures
related to acquisition activity during fiscal years 2021 and 2020. Fiscal year 2021 and 2020 audit fees included fees for
services incurred in connection with rendering an opinion under Section 404 of the Sarbanes-Oxley Act. Fiscal year 2021
and 2020 audit fees also included fees for the review of registration statement auditor consents to incorporate by reference
prior year financial statement opinions in Form S-3 and Form S-8 filings, respectively.
(2) Tax fees consist of fees for tax compliance, tax advice, and tax planning services. Tax compliance services, which primarily
relate to the review of our U.S. tax returns, accounted for $210,000 and $104,615 of the total tax fees for fiscal years 2021 and
2020, respectively.
In 2003, the Audit Committee adopted a formal
policy concerning approval of audit and non-audit
services to be provided to the Company by its
independent registered public accounting firm,
KPMG LLP. The policy requires that all services
provided by KPMG LLP, including audit services
and permitted audit-related and non-audit
services, be preapproved by the Audit Committee.
The Audit Committee preapproved all audit and
non-audit services provided by KPMG LLP during
fiscal year 2021 and our fiscal year ended
October 2, 2020 (“fiscal year 2020”).
Proxy Statement
27
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of Skyworks’ Board of
Directors is responsible for providing
independent, objective oversight of Skyworks’
accounting functions and internal controls. Four
directors served on the Audit Committee for all of
fiscal year 2021, each of whom is independent
within the meaning of applicable Nasdaq Rules
and meets the criteria for independence set forth
in Rule 10A-3(b)(1) under the Exchange Act. The
Audit Committee operates under a written charter
approved by the Board.
Management is responsible for the Company’s
internal control and financial reporting process.
The Company’s independent registered public
accounting firm is responsible for performing an
independent audit of Skyworks’ consolidated
financial statements in accordance with generally
accepted auditing standards and for issuing a
report concerning such financial statements. In
addition, the Company’s independent registered
public accounting firm is responsible for
performing an independent audit of the
Company’s internal controls and for issuing an
opinion on the effectiveness thereof. The Audit
Committee’s responsibility is to monitor and
oversee these processes.
In connection with these responsibilities, the
Audit Committee met with management and
representatives of KPMG LLP, the Company’s
independent registered public accounting firm,
and reviewed and discussed the audited financial
statements for fiscal year 2021, results of the
internal and external audit examinations,
evaluations of the Company’s internal controls,
and the overall quality of Skyworks’ financial
reporting. The Audit Committee also discussed
with the independent registered public accounting
firm the matters required to be discussed by
Auditing Standard No. 1301, “Communications
with Audit Committees,” issued by the Public
Company Accounting Oversight Board. In
addition, the Audit Committee has received the
written disclosures from its independent registered
public accounting firm required by applicable
requirements of the Public Company Accounting
Oversight Board and the SEC regarding the
independent accountant’s communications with
the Audit Committee concerning independence
and has discussed with the independent
registered public accounting firm the independent
registered public accounting firm’s independence
from the Company and its management,
including the matters in the written disclosures
that were received by the committee from such
firm.
Based upon the Audit Committee’s review and
discussions described above, the Audit Committee
recommended that the Board include the
audited consolidated financial statements in the
Company’s Annual Report on Form 10-K for fiscal
year 2021, as filed with the SEC.
THE AUDIT COMMITTEE
David P. McGlade, Chairman
Timothy R. Furey
Christine King
Robert A. Schriesheim
28
Proxy Statement
PROPOSAL 3:
ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED
EXECUTIVE OFFICERS (“SAY-ON-PAY” VOTE)
We are providing our stockholders with the
opportunity to vote to approve, on a non-binding
basis, the compensation of our Named Executive
Officers as described below under “Information
About Executive and Director Compensation”
pursuant to Section 14A of the Exchange Act. As
we describe below under “Compensation
Discussion and Analysis,” our executive
compensation program embodies a pay-for-
performance philosophy that supports our
business strategy and aligns the interests of our
executives with our stockholders.
Our Board is asking stockholders to approve a
non-binding advisory vote on the following
resolution:
RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation
paid to the Company’s named executive officers, as disclosed pursuant to the compensation
disclosure rules of the Securities and Exchange Commission, including the Compensation
Discussion and Analysis, the compensation tables, and any related material disclosed in this
Proxy Statement.
As an advisory vote, this proposal is not binding
and will not overrule any decision by the Company
or the Board (or any committee thereof), nor will
it create or imply any change or addition to the
fiduciary duties of the Company or the Board
(or any committee thereof). However, our
Compensation Committee and Board value the
opinions expressed by our stockholders in their
vote on this proposal and will consider the
outcome of the vote when making future
compensation decisions for Named Executive
Officers. The next non-binding “say-on-pay” vote
is scheduled to be held at our 2023 Annual
Meeting of Stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE TO APPROVE THE COMPENSATION OF OUR
NAMED EXECUTIVE OFFICERS BY VOTING “FOR” PROPOSAL 3
VOTE
Proxy Statement
29
INFORMATION ABOUT EXECUTIVE AND DIRECTOR
COMPENSATION
Summary and Highlights
Our Executive Compensation Program Reflects Our Pay-for-Performance Philosophy
• Response to “Say-on-Pay” Vote at 2021
Annual Meeting. Following our 2021 Annual
Meeting, we solicited feedback on our fiscal year
2020 compensation program from our largest
institutional stockholders, with Ms. King, the
chairman of our Compensation Committee,
taking a leading role in our stockholder outreach.
After considering the input received from our
stockholders, as well as evaluating practices
related to executive compensation by public
companies generally, and our peer group
specifically, our Compensation Committee
committed to several key responsive changes
to the Company’s compensation program,
including to the metrics and performance
periods under the Company’s long-term stock-
based compensation program.
• Alignment with Stockholder Interests. We
believe that through the combination of our
equity-based incentive compensation program
and rigorous executive stock ownership
guidelines, the interests of our executives are
strongly aligned with those of our long-term
stockholders — namely, increasing stockholder
value over time.
• High At-Risk Compensation Levels. The only
fixed component of our Named Executive
Officers’ annual compensation is base salary. All
short-term cash incentive awards and long-term
equity incentive awards are tied to Company
performance, stock price performance, or both.
The charts below show the target total direct
compensation mix for fiscal year 2021 for our
Chief Executive Officer and the average for the
other Named Executive Officers. The target total
direct compensation mix for fiscal year 2021
reflects actual salary, target short-term incentive
award, the grant date fair value of the annual
performance share and restricted stock unit
awards, and the grant date fair value of one-
time, non-recurring stock-based compensation
awards.
Chief Executive Officer
Other Named Executive Officers
Restricted
Stock Units
31%
Base
Salary
7%
Short-Term
Incentive
12%
Long-Term
Stock-Based
Incentive
81%
Performance
Shares
50%
At Risk
Subject to
Performance
Metrics
Restricted
Stock Units
29%
Base
Salary
13%
Long-Term
Stock-Based
Incentive
76%
Short-Term
Incentive
11%
Performance
Shares
47%
30
Proxy Statement
Compensation Best Practices
What We Do
What We Don’t Do
Heavily weight executive compensation toward
“at risk,” performance-based compensation
Balance short-term and long-term incentive
compensation
Use multi-year vesting for executive officer equity
awards
Base half of annual performance share award on
three-year relative TSR performance metric
Maintain a clawback policy providing for recovery
of incentive compensation from executive officers
in the event of a financial restatement
Maintain robust stock ownership guidelines for
executive officers and non-executive directors
Structure our executive officer compensation
program to encourage appropriate risk-taking
Benchmark pay practices against selected peer
companies with whom we compete for executive
talent
Solicit advice from the Compensation
Committee’s independent compensation
consultant
Hold annual “say-on-pay” advisory vote
Conduct regular engagement with stockholders
on compensation-related topics
Guarantee bonus payments or base salary
increases
Provide single-trigger change-in-control benefits
Provide excise tax gross-up payments in
connection with a change in control of the
Company
Provide excessive perquisites to our executive
officers
Provide retirement or pension benefits to our
executive officers that are not available to
employees generally
Permit hedging or other forms of speculative
transactions by employees or directors
Permit pledging by employees or directors
Allow for the repricing of stock options without
stockholder approval
Pay dividends or dividend equivalents on
unearned performance shares or restricted
stock units
Include “evergreen” provisions or “liberal”
change-in-control definitions in our equity
incentive award plans
Compensation Discussion and Analysis
Table of Contents
Named Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Engagement with Stockholders Regarding Executive Compensation . . . . . . . . . . . 32
Approach for Determining Form and Amounts of Compensation . . . . . . . . . . . . . . 33
Components of Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Severance and Change-in-Control Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Executive Officer Stock Ownership Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Prohibition on Hedging and Certain Other Transactions . . . . . . . . . . . . . . . . . . . . . . 43
Compliance with Internal Revenue Code Section 162(m) . . . . . . . . . . . . . . . . . . . . . 43
Proxy Statement
31
Named Executive Officers
This Compensation Discussion and Analysis
section discusses the compensation policies and
programs for our Chief Executive Officer, our Chief
Financial Officer, and our three next most highly
paid executive officers during fiscal year 2021, as
determined under the rules of the SEC. We
refer to this group of executive officers as our
“Named Executive Officers.”
For fiscal year 2021, our Named Executive
Officers were:
• Liam K. Griffin, Chairman, Chief Executive
Officer and President;
• Kris Sennesael, Senior Vice President and Chief
Financial Officer;
• Carlos S. Bori, Senior Vice President, Sales and
Marketing;
• Robert J. Terry, Senior Vice President, General
Counsel and Secretary; and
• Karilee A. Durham, Senior Vice President,
Human Resources.
Engagement with Stockholders
Regarding Executive Compensation
In evaluating and establishing our executive
compensation policies and programs, our
Compensation Committee values and actively
considers the opinions expressed by our
stockholders through the “say-on-pay” advisory
vote at each annual stockholder meeting, as well
as through our ongoing stockholder engagement
efforts. In order to better understand the lack of
broad stockholder support for the “say-on-pay”
proposal at our 2021 Annual Meeting of
Stockholders, the chairman of our Compensation
Committee, Ms. King, took a leading role in our
formal post-meeting stockholder outreach, in
which we solicited feedback on our fiscal year
2020 compensation program from more than thirty
of our largest institutional stockholders
representing approximately 51% of the Company’s
shares outstanding. Our Company management
held subsequent engagement meetings with
stockholders representing approximately 39% of
the Company’s shares outstanding, including eight
of our ten largest stockholders, with Ms. King
joining more than a dozen meetings with
stockholders representing approximately 34% of
the Company’s shares outstanding.
During these conversations, our institutional
stockholders generally expressed support for the
Company’s strategy, performance, and
management, with most stockholders who had
voted against the “say-on-pay” proposal noting
that such opposition had been primarily in
response to the one-time stock-based
compensation awards made to the Named
Executive Officers in November 2019 to address
significant retention concerns. Many stockholders,
while supporting the majority of the Company’s
compensation policies, nonetheless suggested
modifications to specific plan designs, including
to the metrics and performance periods under the
Company’s long-term stock-based compensation
program. After considering this input from our
stockholders, as well as evaluating practices
related to executive compensation by public
companies generally, and our peer group
specifically, our Compensation Committee
committed to several key responsive changes to
the Company’s compensation program. The
following changes were adopted after the
conclusion of the Company’s fiscal year 2021,
which is described in this “Compensation
Discussion and Analysis” section, and therefore
generally apply beginning with the Company’s
fiscal year 2022 compensation program:
32
Proxy Statement
November 2019 One-Time Awards
No one-time awards granted to Named Executive Officers in 2020 or 2021
and no future one-time grants anticipated
Long-Term Equity: FY 2022 Performance
Share Award Design
Transitioned from design win metric (non-disclosable) to relative EBITDA
margin metric (disclosable)
Compensation Peer Group
Clawback Policy
Extended performance period to two years for relative EBITDA margin metric
Extended vesting period to two years for one-year emerging revenue growth
metric
Set target performance at 55th percentile of peer group for both relative
EBITDA margin and TSR metrics
Adjusted peer group to remove certain large comparator companies and
improve comparability
Adopted a clawback policy that provides for recovery of incentive
compensation from executive officers in the event of a financial restatement
Approach for Determining Form and
Amounts of Compensation
The Compensation Committee, which is
composed solely of independent directors within
the meaning of applicable Nasdaq Rules and
non-employee directors within the meaning of
Rule 16b-3 under the Exchange Act and is
described above under “Committees of the Board
of Directors,” is responsible for determining all
components and amounts of compensation to be
paid to our Named Executive Officers, as well as
any other executive officers or employees who
report directly to the Chief Executive Officer. The
Compensation Committee sets compensation for
the Named Executive Officers, including base
salary, short-term incentives, and long-term stock-
based incentives, at levels generally intended to
be competitive with the compensation of
comparable executives in semiconductor
companies with which we compete for executive
talent and to link the compensation of our Named
Executive Officers to improvements in the
Company’s financial performance and increases
in stockholder value.
Compensation Program Objectives
The objectives of our executive compensation
program are to attract, retain, and motivate highly
qualified executives to operate our business,
and to link the compensation of those executives
to improvements in the Company’s financial
performance and increases in stockholder value.
Accordingly, the Compensation Committee’s goals
in establishing our executive compensation
program include:
• ensuring that our executive compensation
program is competitive with a group of
companies in the semiconductor industry with
which we compete for executive talent;
• providing a base salary that serves as the
foundation of a compensation package that
attracts and retains the executive talent needed
to achieve our business objectives;
• providing short-term variable compensation
that motivates executives and rewards them for
achieving Company financial performance
targets;
• providing long-term stock-based compensation
that aligns the interest of our executives with
stockholders by rewarding them for long-term
increases in stockholder value; and
• ensuring that our executive compensation
program is perceived as fundamentally fair to
our employees.
Retention of Compensation Consultant
The Compensation Committee has engaged Aon/
Radford to assist in determining the components
and amount of executive compensation. Aon/
Radford reports directly to the Compensation
Committee, through its chairman, and the
Compensation Committee retains the right to
terminate or replace the consultant at any time.
The Compensation Committee has considered the
relationships that Aon/Radford has with the
Company, the members of the Compensation
Committee and our executive officers, as well as
the policies that Aon/Radford has in place to
maintain its independence and objectivity, and
has determined that Aon/Radford’s work for the
Proxy Statement
33
Compensation Committee has not raised any
conflicts of interest. Company management also
purchases published compensation and benefits
surveys from Aon/Radford, and on occasion
engages certain affiliates of Aon/Radford in various
jurisdictions for services unrelated to executive
compensation and benefits, engagements for
which the Company’s management has not sought
the Compensation Committee’s approval. The
fees paid to Aon/Radford and its affiliates in fiscal
year 2021 for these surveys and additional
services did not exceed $120,000.
Use of Comparator Group Data
The Compensation Committee annually compares
the components and amounts of compensation
that we provide to our Chief Executive Officer and
each of the other Named Executive Officers with
“Comparator Group” data for each position and
uses this comparison data to help inform its
review and determination of base salaries,
short-term incentives, and long-term stock-based
compensation awards, as discussed in further
detail below under “Components of
Compensation.” For fiscal year 2021, the
Compensation Committee approved Comparator
Group data consisting of a 50/50 blend of (i) Aon/
Radford survey data of semiconductor companies
(where sufficient data was not available in the
Aon/Radford semiconductor survey data for a
given executive position, the Comparator Group
data also included survey data regarding high-
technology companies), and (ii) data from the
group of 16 publicly traded semiconductor
companies listed below. Our selected peer group
for fiscal year 2021 remained unchanged from
that used by the Compensation Committee for the
prior fiscal year. The peer group includes many
business competitors, as well as certain larger
semiconductor companies with which we compete
for executive talent.
Peer Group for Fiscal Year 2021 Compensation(1)
Advanced Micro Devices
KLA Corporation
Microchip Technology
Qorvo
Analog Devices
Lam Research
Micron Technology
QUALCOMM
Applied Materials
Marvell Technology
NVIDIA
Texas Instruments
Broadcom
Maxim Integrated Products
ON Semiconductor
Xilinx
(1) For the Company’s fiscal year 2022 compensation program, we made adjustments to our peer group to improve comparability.
Specifically, we removed Applied Materials, Broadcom, and NVIDIA, all of which are significantly larger than the Company,
as measured by multiple factors including market capitalization and annual revenue, and added Western Digital and NXP
Semiconductors, both of which are more comparable in size to the Company.
The Compensation Committee generally seeks to
make decisions regarding each Named Executive
Officer’s compensation that are competitive within
the Comparator Group, with consideration given
to the executive’s role, responsibility, performance,
and length of service. After reviewing the
Comparator Group data and considering the
input of Aon/Radford, the Compensation
Committee established (and the full Board was
advised of) the base salary, short-term incentive
target, and stock-based compensation for
each Named Executive Officer for fiscal year
2021. Aon/Radford advised the Compensation
Committee that such components of executive
compensation for fiscal year 2021 were
competitive for chief executive officers and other
executive officers at companies of similar size and
complexity in the semiconductor industry.
In determining the compensation of our Chief
Executive Officer for fiscal year 2021, the
Compensation Committee focused on
(i) competitive levels of compensation for chief
executive officers who are leading a company of
similar size and complexity, (ii) the importance of
retaining and incentivizing a chief executive
officer with the strategic, financial, and leadership
skills necessary to ensure our continued growth
and success, (iii) our Chief Executive Officer’s role
relative to the other Named Executive Officers,
(iv) input from the full Board on our Chief Executive
Officer’s performance, and (v) the length of our
34
Proxy Statement
Chief Executive Officer’s service to the Company.
Our Chief Executive Officer was not present
during the voting or deliberations of the
Compensation Committee concerning his
compensation.
The Compensation Committee considered the
recommendations of the Chief Executive Officer
regarding the compensation of the other Named
Executive Officers and each of his other direct
reports. These recommendations were based on
an assessment of each individual’s responsibilities,
experience, performance, and contribution to
the Company’s performance, and also took into
account internal factors such as scope of role and
level in the organization, in addition to external
factors such as the current environment for
attracting and retaining executives.
Components of Compensation
The key elements of compensation for our
Named Executive Officers are base salary,
short-term incentives, long-term stock-based
incentives, and health and welfare benefits. For
fiscal year 2021, the Compensation Committee
sought to make decisions that would result in each
Named Executive Officer’s target total direct
compensation being competitive within the
Comparator Group, with consideration given to
the executive’s role, responsibility, performance,
and length of service.
Base Salary
The Compensation Committee determines a
competitive base salary for each executive officer
using the Comparator Group data and input
provided by Aon/Radford. In order to provide
flexibility in consideration of differences in
individual executives’ scope of responsibilities,
length of service, and performance, the
Compensation Committee did not target a
specific percentile of the Comparator Group for
executive officer salaries; however, the salaries of
the executive officers were generally near the
median of the Comparator Group. The base salary
for fiscal year 2021 for each Named Executive
Officer, as reflected in the table below, increased
on average 4.5% from the Named Executive
Officer’s base salary in fiscal year 2020, with
increases ranging from 3.9% to 5.7%. Salary
increases were based on the market-based salary
adjustments recommended by Aon/Radford as
well as recommendations by the Chief Executive
Officer (for Named Executive Officers other than
himself).
Liam K. Griffin
Kris Sennesael
Carlos S. Bori
Robert J. Terry
Karilee A. Durham
FY2021
Base Salary ($)
FY2020
Base Salary ($)
1,075,000
1,029,000
560,000
475,000
492,000
450,000
530,000
457,000
473,000
432,000
Short-Term Incentives
Overview
Our short-term incentive compensation plan for
executive officers is established annually by the
Compensation Committee and is intended to
motivate and reward executives by tying a
significant portion of their total cash compensation
to the Company’s achievement of pre-established
performance goals that are generally one year
or less in duration. The Fiscal Year 2021 Executive
Incentive Plan (the “Incentive Plan”) adopted by
the Compensation Committee on December 14,
2020, was based on the Company’s achievement
of corporate performance goals established on
a semi-annual basis during fiscal year 2021.
Consistent with the plan structure from the prior
fiscal year, the Incentive Plan was established with
two six-month performance periods. The
Compensation Committee determined that
semi-annual performance periods remained
appropriate for fiscal year 2021 in light of
continued uncertainties related to the COVID-19
pandemic. As with the prior year, this approach
proved to be appropriate for fiscal year 2021, as
the performance goals set by the Compensation
Committee for the second performance period,
as discussed below, reflected a significantly
improved business outlook that resulted from
greater-than-expected increases in overall
demand for our wireless connectivity products.
Proxy Statement
35
Incentive Opportunities
For each executive officer, short-term incentive
compensation at the “target” level is designed to
be near the median short-term incentive
compensation of the Comparator Group. After
reviewing Comparator Group data, the
Compensation Committee determined that the
target incentive under the Incentive Plan, as
a percentage of base salary, for each of the Named
Executive Officers should not be changed, as
compared to the target incentives under the prior
year’s short-term incentive plan.
The following table shows the range of short-term
incentive compensation that each Named
Executive Officer could earn in fiscal year 2021 as
a percentage of such executive officer’s annual
base salary.
Threshold Target Maximum
Chief Executive Officer
Chief Financial Officer
Other Executive Officers
80%
50%
40%
160%
100%
80%
320%
200%
160%
Performance Goals
In December 2020 and May 2021, the
Compensation Committee established
performance goals for the applicable semi-annual
performance period, with each executive eligible
to earn up to half of his or her annual short-term
incentive compensation with respect to each
six-month period. Under the Incentive Plan, any
unearned amounts with respect to the first
performance period were to be forfeited and
could not be earned later based on performance
during the second performance period or full-
year performance. Payments under the Incentive
Plan were based on achieving revenue and non-
GAAP EBITDA performance goals, each of
which was weighted at 50% for each respective
performance period. EBITDA, for purposes of the
non-GAAP EBITDA performance goal, was
calculated by adding depreciation and
amortization to the Company’s non-GAAP
operating income, as publicly reported in the
Company’s earnings release for the applicable
period.
The target level performance goals were
established by the Compensation Committee
under the Incentive Plan after reviewing the
Company’s historical operating results and growth
rates as well as the Company’s expected future
results relative to peers and were designed
to require significant effort and operational
success on the part of our executives and the
Company. The threshold level performance goals
established by the Compensation Committee
under the Incentive Plan in each case exceeded
the Company’s actual performance during the
corresponding performance period during the
prior fiscal year. The maximum level performance
goals established by the Compensation
Committee have historically been difficult to
achieve and are designed to represent
outstanding performance that the Compensation
Committee believes should be rewarded. The
performance goals established for the second half
of fiscal year 2021 were based on the Company’s
outlook in May 2021 for the remainder of the
fiscal year, which included expectations for
revenue and non-GAAP EBITDA that were
significantly higher than the Company’s original
operating plan, resulting in an upward adjustment
to the metrics from the preliminary metrics
discussed in December 2020.
The performance goals established under the
Incentive Plan for fiscal year 2021 were as follows:
Revenue
Non-GAAP EBITDA
(in millions)
1st Half 2nd Half 1st Half 2nd Half
Threshold
$1,700
$2,018
Target
$1,835
$2,168
Maximum
$1,900
$2,318
$730
$795
$825
$ 855
$ 940
$1,025
The Incentive Plan stipulated that payouts to
executives following the end of the fiscal year,
under either of the performance metrics, were
conditioned upon the Company achieving full-
year non-GAAP operating income of $650 million,
which is increased from the $500 million
threshold that applied for the prior fiscal year. Non-
GAAP operating income, for purposes of the
Incentive Plan, is based on the Company’s publicly
disclosed non-GAAP operating income — which
is calculated by excluding from GAAP operating
income share-based compensation expense;
acquisition-related expenses; amortization
of acquisition-related intangibles; settlements,
36
Proxy Statement
gains, losses, and impairments; restructuring-
related charges; and certain deferred executive
compensation — after accounting for any incentive
award payments, including those to be made
under the Incentive Plan.
Calculation of Incentive Plan Payments
Under the Incentive Plan, upon completion of the
first six months of the fiscal year, the Compensation
Committee determined the extent to which the
Company’s performance goals for the first
performance period were attained, reviewed the
CEO’s recommended payouts under the Incentive
Plan, and approved the awards to be made
under the Incentive Plan with respect to the first
performance period. Upon completion of the fiscal
year, the Compensation Committee completed
the same process with respect to the second
performance period. Payments with respect to
the first performance period were capped at 100%
of the first half target level attributable to the
applicable metric, with amounts over the target
level held back and paid after the end of the fiscal
year upon certification that the Company had
achieved its nominal level of non-GAAP operating
income for the fiscal year.
Achievement under the performance goals at the
“threshold,” “target,” or “maximum” level
corresponds to payment under the Incentive Plan
at the “threshold,” “target,” or “maximum”
percentage, as applicable, with such percentage
multiplied by the executive’s base salary for the
six-month period and then multiplied by the
weighting assigned to that performance goal. The
payout for achievement under the performance
goals between either the “threshold” and “target”
levels or the “target” and “maximum” levels
would be based on linear interpolation between
the two relevant amounts.
Each executive’s payment under the Incentive
Plan is calculated by evaluating achievement of
each performance goal individually, determining
the portion of the total eligible incentive payment
earned with respect to each such performance
goal, and totaling the resulting amounts. The
Compensation Committee retained the discretion
to make payments, upon consideration of
recommendations by the Chief Executive Officer,
even if the threshold performance metrics were
not met or if the nominal level of non-GAAP
operating income was not met, or to make
payments in excess of the maximum level if the
Company’s performance exceeded the maximum
metrics. While the Compensation Committee
believed it was appropriate to retain this discretion
in order to make short-term incentive
compensation awards in appropriate extraordinary
circumstances, no such adjustments were
actually made.
Fiscal Year Results
For the first half of fiscal year 2021, the Company’s
revenue and non-GAAP EBITDA achieved were
$2,682 million and $1,226 million, respectively,
resulting in a short-term compensation award for
each Named Executive Officer with respect to
such performance period equal to his or her
maximum payment level, or 200% of the target
payment level. A payment of the target amount
was made to each Named Executive Officer in
May 2021, with the remainder held back for
potential payment following the completion of
the fiscal year. For the second half of fiscal year
2021, the Company’s revenue and non-GAAP
EBITDA achieved were $2,367 million and
$1,050 million, respectively, resulting in a
short-term compensation award for each Named
Executive Officer with respect to such performance
period equal to his or her maximum payment
level, or 200% of the target payment level. In
determining the Company’s performance for the
second half of fiscal year 2021, the Company
excluded all impacts to revenue and non-GAAP
EBITDA resulting from the acquisition in July 2021
of Silicon Labs’ Infrastructure and Automotive
business. In November 2021, upon certifying that
the nominal level of non-GAAP operating
income had been achieved for the fiscal year, the
Compensation Committee approved payment
of the short-term incentive achieved with respect
to the second performance period as well as
payment of the remaining portion of the short-term
incentive achieved with respect to the first
performance period, which had been held back.
The Compensation Committee did not exercise
discretion, either upward or downward, to
executives’ payments under the Incentive Plan.
Proxy Statement
37
The following table shows the Company’s
achievement under the Incentive Plan:
Fiscal Year 2021 Stock-Based Compensation
Awards
Revenue
Non-GAAP EBITDA
(in millions) 1st Half 2nd Half 1st Half
2nd Half
Threshold
$ 1,700
$ 2,018
Target
$ 1,835
$ 2,168
Maximum
$ 1,900
$ 2,318
$
$
$
730
795
825
$
$
855
940
$ 1,025
Achieved
$2,682
$2,367
$1,226
$1,050
Long-Term Stock-Based Compensation
Overview
The Compensation Committee generally makes
long-term stock-based compensation awards to
executive officers on an annual basis. Long-term
stock-based compensation awards are intended
to align the interests of our executive officers with
those of our stockholders and to reward our
executive officers for increases in stockholder
value over periods of time greater than one year.
It is the Company’s practice to make stock-based
compensation awards to executive officers in
November of each year at a prescheduled
Compensation Committee meeting. For fiscal
year 2021, the Compensation Committee made
an annual stock-based compensation award to
each of the Named Executive Officers on
November 11, 2020, at a regularly scheduled
Compensation Committee meeting.
In making annual stock-based compensation
awards to executive officers for fiscal year 2021,
the Compensation Committee first reviewed the
Comparator Group grant data by executive
position. The Compensation Committee used that
data to inform its determination of a target
dollar value for the long-term stock-based award
for each executive officer, as set forth in the table
below, targeting awards for fiscal year 2021 that
were competitive within the Comparator Group.
Each executive officer was granted a performance
share award (“PSA”) and a restricted stock unit
(“RSU”) award equivalent to sixty percent (60%)
and forty percent (40%), respectively, of the dollar
value of the executive’s fiscal year 2021 stock-
based award, calculating the number of shares
subject to each award using the fair market value
of the Company’s common stock on the date of
such award and an assumption that the Company
would achieve the “target” level of performance
required to earn the PSA. The Compensation
Committee’s rationale for awarding PSAs is to
further align the executive’s interest with those of
our stockholders by using equity awards that will
vest only if the Company achieves pre-
established performance metrics, and we believe
the Compensation Committee’s decision to
award a portion of the PSAs subject to
performance metrics measured over a multi-year
performance period more closely aligns the
executive’s interests with those of our stockholders.
Name
Liam K. Griffin
Kris Sennesael
Carlos S. Bori
Robert J. Terry
Karilee A. Durham
Value of FY21
Stock-Based Award(1)
Number of Shares Subject
to PSAs, at Target(2)
Number of Shares
Subject to
RSUs(2)
$11,000,000
$ 3,400,000
$ 2,900,000
$ 2,700,000
$ 1,900,000
45,874
14,179
12,094
11,260
7,923
30,583
9,452
8,062
7,506
5,282
(1) The grant date fair values of these stock-based awards as disclosed further below in the “Summary Compensation Table” and
the “Grants of Plan-Based Awards Table” differ from the values stated above due to the grant date fair value of the PSAs
being computed using a Monte Carlo simulation to value the portion of the award related to TSR percentile ranking, in
accordance with the provisions of ASC 718.
(2) Reflects the dollar value of the award, divided by $143.87 per share, which was the closing price of the Company’s common
stock on the Nasdaq Global Select Market on November 11, 2020.
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Proxy Statement
After setting award levels by position and
evaluating our business needs for the attraction
and retention of executives and employees as well
as internal and external circumstances impacting
the Company and its employees, the
Compensation Committee also reviewed the
Comparator Group data to set the aggregate
number of shares of the Company’s common stock
that would be made available for annual equity
awards to eligible non-executive employees of the
Company, as a percentage of the total number
of the outstanding shares of the Company’s
common stock.
FY21 PSAs
The PSAs granted on November 11, 2020 (the
“FY21 PSAs”), have both “performance” and
“continued employment” conditions that must be
met in order for the executive to receive shares
underlying the award.
The “performance” condition of the FY21 PSAs
compares the Company’s performance under
three distinct performance metrics during the
applicable performance period against a range of
pre-established targets, as follows:
Target Level Shares with Respect to Emerging Revenue Growth Metric(1)
Target Level Shares with Respect to Design Win Metric(2)
Target Level Shares with Respect to TSR Percentile Ranking Metric(3)
Percentage of
Aggregate
Target Level
Shares
25%
25%
50%
Performance
Period
Fiscal Year 2021
Fiscal Year 2021
Fiscal Years 2021-2023
(1) The emerging revenue growth metric measures the Company’s year-over-year revenue growth in certain key product
categories, each of which represents an identified longer-term growth market for the Company.
(2) The design win metric measures the success of the Company in achieving specific product design wins with a key customer.
(3) The TSR percentile ranking metric measures the Company’s percentile ranking achieved with respect to its peer group. The
peer group for purposes of the TSR percentile ranking metric includes each of the companies in the Philadelphia
Semiconductor Index as of November 11, 2020, but excludes any such company that during the three-year performance
period is acquired by or merged with (or enters into an agreement to be acquired by or merged with) another entity. For
purposes of the PSA award, TSR for the Company and for each company in the peer group is calculated using a starting price
and ending price, which consist of the average closing prices for each trading day during the sixty (60) consecutive calendar
days ending on, and including, the last trading day before the measurement period begins and the last trading day of the
measurement period, respectively, assuming dividend reinvestment and adjusting for stock splits, as applicable.
The semiconductor industry generally and, in
particular, many of the markets into which the
Company sells its connectivity products, are
characterized by constant and rapid technological
change, continuous product evolution, and short
product life cycles, including annual product
refreshes in some cases. Recognizing that strong
long-term financial performance depends largely
on the Company’s ability to identify, and respond
to, rapid market changes by introducing new and
enhanced products and technologies on a
timely basis, the Compensation Committee
determined that half of the target value under the
FY21 PSAs should be measured based on one-
year performance periods, consistent with the PSA
design from the prior year.
More specifically, the Compensation Committee
retained emerging revenue growth and key
customer design wins as one-year metrics
appropriate for focusing our management team
on long-term value creation, given that revenue
growth over the next several years is highly
dependent on executing in certain higher-growth
product categories, as well as on continued
success with a key customer that typically leads
the market in the adoption of new technologies
and maintains an annual sales cycle. As in
prior years, the remaining half of the target value
under the FY21 PSAs was based on three-year TSR
percentile ranking, which the Compensation
Committee believed provides an appropriate
balance to the one-year measurement periods.
Proxy Statement
39
The specific pre-established targets under the emerging revenue growth and TSR percentile ranking
metrics are as follows:
Company Metric(1)
1-year Emerging Revenue Growth (%)
3-year TSR Percentile Ranking
Threshold Target Maximum
15.0%
55th
30.0%
90th
0.0%
25th
(1) Given both the Company’s contractual confidentiality obligations and the proprietary nature of the specific goals, the
Company cannot publicly disclose the specific threshold, target, and maximum levels of performance established with
respect to the design win metric.
As with the Incentive Plan, the pre-established targets under the FY21 PSAs were established by the
Compensation Committee after reviewing the Company’s historical operating results and growth rates as
well as the Company’s expected future results relative to peers and were designed to require significant
effort and operational success on the part of our executives and the Company:
• Emerging Revenue Growth Metric: The target level was set at 15%, representing above-market annual
growth, the maximum level was set at 30%, which the Compensation Committee believed represented
outstanding performance that would be difficult to achieve, and the threshold level was set at 0% as a
result of continued market uncertainties related to the COVID-19 pandemic.
• Design Win Metric: The Compensation Committee increased the threshold, target, and maximum
levels of performance by 32%, 15%, and 11%, respectively, from the corresponding levels set for the
prior year, in order to incentivize a significant increase over the prior year’s performance.
• TSR Percentile Ranking Metric: The Compensation Committee increased the target percentile to the
55th percentile of the peer group in order to further incentivize above-median performance and in
response to stockholder feedback received in 2020.
The number of shares issuable under the FY21 PSAs corresponds to the level of achievement of the
performance goals, as follows (subject to linear interpolation for amounts between “threshold” and
“target” or “target” and “maximum”):
% of Target Level Shares Earned with Respect to Emerging Revenue Growth Metric
% of Target Level Shares Earned with Respect to Design Win Metric
% of Target Level Shares Earned with Respect to TSR Percentile Ranking Metric
Performance Achieved
Threshold Target Maximum
100%
100%
100%
200%
200%
300%
50%
50%
50%
The “continued employment” condition of the FY21 PSAs provides that, to the extent that the performance
metrics are met, the shares earned under such metrics would vest as follows (provided, in each case,
that the executive remains employed by the Company through each such vesting date):
% of Shares Earned with Respect to Emerging Revenue Growth Metric
% of Shares Earned with Respect to Design Win Metric
50%
50%
50%
50%
% of Shares Earned with Respect to TSR Percentile Ranking Metric
100%
(1)
In the event of termination by reason of death or permanent disability, the holder of an FY21 PSA (or the holder’s estate)
would receive any earned but unissued shares that would have been issuable thereunder during the remaining term of the
award.
Anniversary of Grant Date(1)
One Year
Two Year
Three Year
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Proxy Statement
During fiscal year 2020, the base period against
which fiscal year 2021 emerging revenue
performance was measured, the Company
achieved revenue in the specified key product
categories of $442 million. During fiscal year 2021,
the Company achieved revenue in the specified
key product categories of $996 million,
representing emerging revenue growth of 125%,
exceeding the “maximum” level of performance
and resulting in achievement with respect to such
metric of 200% of the target level of shares. In
calculating emerging revenue for fiscal year 2021,
the Company excluded all revenue resulting
from the acquisition in July 2021 of Silicon Labs’
Infrastructure and Automotive business, consistent
with the terms of the FY21 PSA, which required
exclusion of the impacts on this metric of any
acquisition made by the Company during the
performance period. Performance under this
metric significantly exceeded the Company’s
annual operating plan, primarily as a result of
stronger-than-expected demand for the
applicable products. Also during fiscal year 2021,
the Company achieved design wins with the
specified customer at a level exceeding the
“maximum” level of performance, resulting in
achievement with respect to such metric of 200%
of the target level of shares. The level of actual
achievement under this metric represented a
significant increase from the prior year’s
performance. Accordingly, upon the
Compensation Committee’s certification of the
performance results in November 2021, the
Company issued 50% of the shares earned by
each Named Executive Officer under the FY21
PSAs with respect to the emerging revenue growth
and design win performance metrics. The
remaining shares earned under such metrics will
be issued in November 2022, provided that the
Named Executive Officer meets the continued
employment condition.
Outstanding PSAs at the End of Fiscal Year
2021
As summarized in the table below of the annual
PSA grants made to Named Executive Officers
since fiscal year 2018 (the first year in which the
Compensation Committee awarded PSAs subject
to a performance metric measured over a three-
year performance period), achievement of the TSR
percentile ranking performance metric under
the FY21 PSAs, which is subject to a three-year
performance period, will be determined following
the conclusion of the Company’s fiscal year
2023. During the three-year performance period
under the fiscal year 2019 PSAs comprising the
Company’s fiscal years 2019, 2020, and 2021, the
Company achieved a TSR of 105% resulting in
its ranking in the 44.8th percentile against the
applicable peer group. Accordingly, the Company
issued 74.1% of the “target” level of shares, as
earned by each Named Executive Officer under
the fiscal year 2019 PSAs with respect to the TSR
percentile ranking metric.
PSA Fiscal Year
Grant Date
Performance Metric
FY18
FY19
FY20
11/7/2017
11/6/2018
Non-GAAP EBITDA Growth
3-year TSR Percentile Ranking
Non-GAAP EBITDA Growth
3-year TSR Percentile Ranking
Emerging Revenue Growth
11/5/2019
Design Wins
Performance
Period
FY18
FY18 — FY20
FY19
FY19 — FY21
FY20
FY20
Achieved
(% of Target)
99.8%
0%
0%
74.1%
200%
200%
FY21
11/11/2020
Design Wins
Emerging Revenue Growth
FY21
FY21
200%
200%
3-year TSR Percentile Ranking
FY20 — FY22
Performance Period in Progress(1)
3-year TSR Percentile Ranking
FY21 — FY23
Performance Period in Progress(2)
(1) As of March 1, 2022, performance under this metric during the applicable performance period is between the “threshold”
and “target” levels of performance.
(2) As of March 1, 2022, performance under this metric during the applicable performance period is below the “threshold” level
of performance.
Proxy Statement
41
Other Compensation and Benefits
We provide other benefits to our executive
officers that are intended to be part of a
competitive overall compensation program and
are not tied to any company performance criteria.
Consistent with our objective of having
compensation programs that are considered fair
to our employees, executive officers are eligible to
participate in the Company’s medical, dental,
vision, life, and disability insurance plans, as well
as the Company’s 401(k) Savings and Investment
Plan and Employee Stock Purchase Plan, under
the same terms as such benefits are offered to
other benefits-eligible employees. We do not
provide executive officers with any enhanced
retirement benefits (i.e., executive officers are
subject to the same limits on contributions as other
employees, as we do not offer any supplemental
executive retirement plan or other similar
non-qualified deferred compensation plan), and
they are eligible for 401(k) company-match
contributions under the same terms as other
employees.
We offered executives the opportunity to
participate in a reimbursement program for fiscal
year 2021 providing up to an aggregate of
$20,000 to each executive for the purchase of
financial planning services, estate planning
services, personal tax planning and preparation
services, and/or an executive physical. No tax
gross-up was provided for such reimbursements.
In fiscal year 2021, each of the Named Executive
Officers, with the exception of Ms. Durham,
received reimbursement in connection with such
services.
Severance and Change-in-Control
Benefits
None of our executive officers, including the
Named Executive Officers, has an employment
agreement that provides a specific term of
employment with the Company. Accordingly, the
employment of any such employee may be
terminated at any time. We do provide certain
benefits to our Named Executive Officers upon
certain qualifying terminations of employment and
in connection with terminations of employment
under certain circumstances following a change in
control. A description of the material terms of our
severance and change-in-control arrangements
with the Named Executive Officers can be found
immediately below and further below under
“Potential Payments Upon Termination or Change
in Control.”
The Compensation Committee believes that
severance protections can play a valuable role in
recruiting and retaining superior talent. Severance
and other termination benefits are an effective
way to offer executives financial security to incent
them to forego an opportunity with another
company. These agreements also protect the
Company as the Named Executive Officers are
bound by non-solicit covenants for a period of
twelve (12) months after termination of
employment. Outside of the change-in-control
context, each Named Executive Officer is entitled
to severance benefits if his or her employment
is involuntarily terminated by the Company without
cause and, in the case of the Chief Executive
Officer, if he terminates his own employment for
good reason (as defined in the Chief Executive
Officer’s change-in-control agreement). The level
of each Named Executive Officer’s cash severance
or other termination benefit is generally tied to
his or her annual base salary and short-term
incentive amounts.
Additionally, each Named Executive Officer
would receive enhanced severance benefits and
accelerated vesting of equity awards if his or her
employment were terminated under certain
circumstances in connection with a change in
control of the Company. These benefits are
described in detail further below under “Potential
Payments Upon Termination or Change in
Control.” The Compensation Committee believes
these enhanced severance benefits and
accelerated vesting are appropriate because the
occurrence, or potential occurrence, of a change-
in-control transaction would likely create
uncertainty regarding the continued employment
of executive officers that typically occurs in a
change-in-control context, and such severance
benefits and accelerated vesting encourage the
Named Executive Officers to remain employed
with the Company through the change-in-control
process and to focus on enhancing stockholder
value both before and during the process. In
42
Proxy Statement
addition, the vesting protection helps assure the
Named Executive Officers that they will not lose
the expected value of their equity awards
because of a change in control of the Company.
Executive Officer Stock Ownership
Requirements
We have adopted Executive Stock Ownership
guidelines with the objective of more closely
aligning the interests of our executive officers with
those of our stockholders. Under the Executive
Officer Ownership guidelines, our Named
Executive Officers are each required to hold the
lower of (a) the number of shares with a fair market
value equal to the applicable multiple of such
executive’s current base salary, or (b) the
applicable number of shares, each as set forth in
the table below. All of our Named Executive
Officers are in compliance with the stock
ownership guidelines as of the date hereof.
Chief Executive Officer
Chief Financial Officer
Senior Vice President, Sales and Marketing
Senior Vice President and General Counsel
Senior Vice President, Human Resources
Multiple of Annual
Base Salary(1)
6
2.5
2.5
2.5
2.5
Shares
107,500
23,300
19,800
20,500
18,800
(1) For purposes of the Executive Stock Ownership guidelines, the fair market value of the Company’s common stock is the
average closing price per share of the Company’s common stock as reported on the Nasdaq Global Select Market (or if the
common stock is not then traded on such market, such other market on which the common stock is traded) for the twelve (12)
month period ending with the determination date.
Prohibition on Hedging and Certain
Other Transactions
We prohibit our directors, officers, and employees
(or any of their designees) from directly or
indirectly engaging in the following transactions
with respect to securities of the Company:
• selling short, including short sales “against the
box”;
• buying or selling put or call options; or
• purchasing financial instruments (including
prepaid variable forward contracts, equity swaps,
collars, and exchange funds), or otherwise
engaging in transactions, that hedge or offset,
or are designed to hedge or offset, any decrease
in the market value of securities of the
Company, whether through the use of traded
securities, privately negotiated derivative
securities, or synthetic financial instruments.
In addition, we prohibit our directors, officers, and
employees from purchasing Company securities
on margin, borrowing against Company securities
held in a margin account, or pledging Company
securities as collateral for a loan.
Compliance with Internal Revenue
Code Section 162(m)
For fiscal year 2021, the Company will be unable
to deduct compensation in excess of $1 million
paid to certain executive officers, as specified
under Section 162(m) of the Internal Revenue
Code (“IRC”). The Compensation Committee uses
its judgment to authorize compensation
payments that may be subject to the limit when
the Compensation Committee believes such
payments are appropriate and in the best interests
of the Company and its stockholders.
Proxy Statement
43
Compensation Tables for Named Executive Officers
Summary Compensation Table
The following table summarizes compensation earned by, or awarded or paid to, our Named Executive
Officers for fiscal year 2021, fiscal year 2020, and our fiscal year ended September 27, 2019 (“fiscal year
2019”).
Name and Principal Position
Liam K. Griffin
Chairman, Chief Executive
Officer and President
Kris Sennesael
Senior Vice President and
Chief Financial Officer
Carlos S. Bori
Senior Vice President,
Sales and Marketing
Robert J. Terry
Senior Vice President,
General Counsel and
Secretary
Karilee A. Durham(4)
Senior Vice President,
Human Resources
Year
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
Stock
Awards
($)(1)
11,612,745
17,430,589
11,658,937
3,589,223
5,677,593
3,264,443
3,061,420
4,856,262
3,147,860
2,850,298
4,431,833
1,981,920
2,005,655
3,037,435
Non-Equity
Incentive
Plan
Compensation
($)(2)
3,440,000
3,292,800
1,011,257
1,120,000
1,060,000
322,467
760,000
731,200
222,373
787,200
756,800
230,112
720,000
691,200
All Other
Compensation
($)(3)
27,453
33,162
18,399
15,203
18,591
15,352
17,154
15,444
12,561
16,045
15,994
15,287
13,830
16,531
Total
($)
16,150,421
21,800,439
13,660,593
5,281,311
7,293,376
4,098,262
4,311,705
6,066,095
3,810,994
4,143,570
5,684,023
2,670,019
3,187,616
4,183,074
Salary ($)
1,070,223
1,043,888
972,000
556,885
537,192
496,000
473,131
463,189
428,200
490,027
479,396
442,700
448,131
437,908
(1) The amounts in the Stock Awards column represent the grant date fair values, computed in accordance with the provisions of
FASB ASC Topic 718 — Compensation — Stock Compensation (“ASC 718”), of PSAs and RSUs granted during the applicable
fiscal year, without regard to estimated forfeiture rates. For fiscal years 2019, 2020, and 2021, assuming the highest level of
performance achievement with respect to the PSAs, the grant date fair values of the Stock Awards would be as follows:
Mr. Griffin (FY 2019: $14,658,935; FY 2020: $25,430,512; FY 2021: $14,912,691), Mr. Sennesael (FY 2019: $4,104,438;
FY 2020: $6,637,546; FY 2021: $4,609,190), Mr. Bori (FY 2019: $3,957,856; FY 2020: $5,666,259; FY 2021: $3,931,401),
Mr. Terry (FY 2019: $2,491,891; FY 2020: $5,211,819; FY 2021: $3,660,286), and Ms. Durham (FY 2020: $3,577,434; FY 2021:
$2,575,596). For a description of the assumptions used in calculating the fair value of equity awards in fiscal year 2021
under ASC 718, see Note 10 of the Company’s financial statements included in the Company’s Annual Report on Form 10-K
filed with the SEC on November 24, 2021.
(2) Reflects amounts paid to the Named Executive Officers pursuant to the executive incentive plan adopted by the Compensation
(3)
Committee for each year indicated.
“All Other Compensation” includes the Company’s contributions to the executive’s 401(k) Plan account, the cost of group
term life insurance premiums, and financial planning benefits. For fiscal year 2021, it specifically includes $11,600 in Company
contributions to each Named Executive Officer’s 401(k) Plan account, as well as $11,500 in financial planning benefits for
Mr. Griffin.
(4) Ms. Durham was not a Named Executive Officer prior to fiscal year 2020.
44
Proxy Statement
Grants of Plan-Based Awards Table
The following table summarizes all grants of plan-based awards made to the Named Executive Officers
in fiscal year 2021, including incentive awards payable under our Fiscal Year 2021 Executive Incentive Plan.
Name
Liam K. Griffin
Kris Sennesael
Carlos S. Bori
Robert J. Terry
Karilee A. Durham
Grant Date
11/11/2020
11/11/2020
11/11/2020
11/11/2020
11/11/2020
11/11/2020
11/11/2020
11/11/2020
11/11/2020
11/11/2020
Estimated Future Payouts Under Non-
Equity Incentive Plan Awards(1)
Estimated Future Payouts Under Equity
Incentive Plan Awards(2)
Threshold
($)
860,000
Target
($)
1,720,000
Maximum
($)
3,440,000
Threshold
(#)
Target
(#)
Maximum
(#)
All Other
Stock
Awards:
Number of
Stock Or
Units
(#)(3)
Grant Date
Fair Value
of Stock
and
Option
Awards
($)
280,000
560,000
1,120,000
190,000
380,000
760,000
196,800
393,600
787,200
180,000
360,000
720,000
22,937
45,874
114,685
30,583
7,212,769(4)
4,399,976(5)
7,089
14,179
35,447
6,047
12,094
30,235
5,630
11,260
28,150
3,961
7,923
19,807
9,452
8,062
7,506
5,282
2,229,364(4)
1,359,859(5)
1,901,540(4)
1,159,880(5)
1,770,410(4)
1,079,888(5)
1,245,733(4)
759,921(5)
(1) The amounts shown represent the potential value of awards earned under the Incentive Plan. The amounts actually paid to
the Named Executive Officers under the Incentive Plan are shown above in the “Summary Compensation Table“ under “Non-
Equity Incentive Plan Compensation.” For a more complete description of the Incentive Plan, please see description above
under “Components of Compensation — Short-Term Incentives.”
(2) The amounts shown represent shares potentially issuable pursuant to the FY21 PSAs granted on November 11, 2021, under
the Company’s 2015 Long-Term Incentive Plan, as described above under “Components of Compensation — Long-Term Stock-
Based Compensation.”
(3) Represents shares underlying RSU awards granted under the Company’s 2015 Long-Term Incentive Plan. The RSU award
vests over four years at a rate of twenty-five percent (25%) per year commencing one year after the date of grant and on each
subsequent anniversary of the grant date for the following three years, provided the executive remains employed by the
Company through each such vesting date.
(4) Reflects the grant date fair value of the FY21 PSAs, computed in accordance with the provisions of ASC 718, using (a) a
Monte Carlo simulation (which weights the probability of multiple potential outcomes) to value the portion of the award related
to TSR percentile ranking, and (b) a price of $143.87 per share, which was the closing sale price of the Company’s common
stock on the Nasdaq Global Select Market on November 11, 2020, to value the portion of the award related to emerging
revenue growth and design wins, assuming performance at the “target” level. For a description of the assumptions used in
calculating the fair value of equity awards granted in fiscal year 2021 under ASC 718, see Note 10 of the Company’s financial
statements included in the Company’s Annual Report on Form 10-K filed with the SEC on November 24, 2021.
(5) Reflects the grant date fair value of the RSUs granted on November 11, 2020, computed in accordance with the provisions of
ASC 718 using a price of $143.87 per share, which was the closing price of the Company’s common stock on the Nasdaq
Global Select Market on November 11, 2020.
Proxy Statement
45
Outstanding Equity Awards at Fiscal Year End Table
The following table summarizes the unvested stock awards and all stock options held by the Named
Executive Officers as of the end of fiscal year 2021.
Option Awards
Stock Awards
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
13,211
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
—
Option
Exercise
Price ($)
77.66
Option
Expiration
Date
11/9/2023
Name
Liam K. Griffin
Kris Sennesael
40,000
12,770
—
—
75.22
77.66
8/29/2023
11/9/2023
Carlos S. Bori
Robert J. Terry
502
—
75.91
11/10/2023
Karilee A. Durham
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
other Rights
that Have
Not Vested
($)(1)
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares, Units
or other
Rights that
Have Not
Vested (#)
91,164(10) 14,943,603
11,468(11)
1,879,835
Market Value
of Shares or
Units of
Stock
that Have
Not
Vested ($)(1)
4,411,743
4,981,201
15,566,663
7,519,666
1,015,157
3,966,864
4,981,201
5,013,165
1,235,137
1,593,958
2,324,386
353,739
1,110,722
1,593,794
1,411,351
1,549,372
1,191,043
1,344,800
1,982,448
353,739
1,071,053
1,344,964
1,245,300
1,321,523
749,934
1,294,968
1,845,739
221,128
674,367
1,294,968
996,142
1,230,384
485,203
896,315
1,298,902
725,510
436,355
896,478
664,040
865,825
29,172(10)
4,781,874
3,544(11)
580,932
24,615(10)
3,023(11)
4,034,891
495,530
23,703(10)
3,885,396
2,815(11)
461,435
16,410(10)
2,689,927
1,980(11)
324,562
Number
of Shares
or Units
of Stock
that
Have
Not
Vested
(#)
26,914(2)
30,388(3)
94,965(4)
45,874(5)
6,193(6)
24,200(7)
30,388(8)
30,583(9)
7,535(2)
9,724(3)
14,180(5)
2,158(6)
6,776(7)
9,723(8)
8,610(12)
9,452(9)
7,266(2)
8,204(3)
12,094(5)
2,158(6)
6,534(7)
8,205(8)
7,597(12)
8,062(9)
4,575(2)
7,900(3)
11,260(5)
1,349(6)
4,114(7)
7,900(8)
6,077(12)
7,506(9)
2,960(2)
5,468(3)
7,924(5)
4,426(13)
2,662(7)
5,469(8)
4,051(12)
5,282(9)
46
Proxy Statement
(1) Reflects a price of $163.92 per share, which was the closing sale price of the Company’s common stock on the Nasdaq
Global Select Market on October 1, 2021.
(2) Represents shares issuable under the fiscal year 2019 PSAs (“FY19 PSAs”) with respect to the TSR percentile ranking
performance metric. The shares earned under this portion of the FY19 PSAs, which was subject to a three-year performance
period, were issued on November 6, 2021.
(3) Represents shares issuable under the fiscal year 2020 PSAs (the “FY20 PSAs”) with respect to two performance metrics
measured over a one-year performance period consisting of the Company’s fiscal year 2020. Fifty percent (50%) of the shares
earned under the FY20 PSAs with respect to such metrics were issued on November 5, 2020, and the remaining fifty percent
(50%) of the shares earned with respect to such metrics were issued on November 5, 2021.
(4) Represents shares issuable under the one-time, non-recurring stock-based award granted to Mr. Griffin on November 5,
2019 (as described above under “Components of Compensation — Long-Term Stock-Based Compensation”), with respect to
a non-GAAP EBITDA margin metric measured over the Company’s fiscal year 2020 and fiscal year 2021. During fiscal year
2020, the Company achieved a non-GAAP EBITDA margin of 43%, which put the Company in the 87.5th percentile of the peer
group, resulting in achievement with respect to such metric of 200% of the target level of shares with respect to fiscal year
2020. During fiscal year 2021, the Company achieved a non-GAAP EBITDA margin of 45%, which put the Company in the
68.75th percentile of the peer group, resulting in achievement with respect to such metric of 175% of the target level of shares
with respect to fiscal year 2021. The shares earned under this award were issued on November 5, 2021.
(5) Represents shares issuable under the FY21 PSAs (awarded on November 11, 2020, as described above under “Components
of Compensation — Long-Term Stock-Based Compensation”) with respect to two performance metrics measured over a one-
year performance period consisting of the Company’s fiscal year 2021, assuming achievement at the “maximum” level of
performance. Fifty percent (50%) of the shares earned under the FY21 PSAs with respect to such metrics were issued on
November 11, 2021, and the remaining fifty percent (50%) of the shares earned with respect to such metrics will be issued
on November 11, 2022, provided that the executive meets the continued employment condition.
(6) Represents shares issuable under an RSU award granted on November 7, 2017, under the Company’s 2015 Long-Term
Incentive Plan. The RSU award vested at a rate of twenty-five percent (25%) per year on each anniversary of the grant date
until they became fully vested on November 7, 2021.
(7) Represents shares issuable under an RSU award granted on November 6, 2018, under the Company’s 2015 Long-Term
Incentive Plan. The RSU award vests at a rate of twenty-five percent (25%) per year on each anniversary of the grant date
through November 6, 2022.
(8) Represents shares issuable under an RSU award granted on November 5, 2019, under the Company’s 2015 Long-Term
Incentive Plan. The RSU award vests at a rate of twenty-five percent (25%) per year on each anniversary of the grant date
through November 5, 2023.
(9) Represents shares issuable under an RSU award granted on November 11, 2020, under the Company’s 2015 Long-Term
Incentive Plan. The RSU award vests at a rate of twenty-five percent (25%) per year on each anniversary of the grant date
through November 11, 2024.
(10) Represents shares issuable under the FY20 PSAs with respect to the TSR percentile ranking performance metric, assuming
achievement at the “maximum” level of performance. This portion of the FY21 PSAs, which is subject to a three-year
performance period, will be issued on November 5, 2022, to the extent earned and provided that the executive meets the
continued employment condition.
(11) Represents shares issuable under the FY21 PSAs (awarded on November 11, 2020, as described above under “Components
of Compensation — Long-Term Stock-Based Compensation”) with respect to the TSR percentile ranking performance
metric, assuming achievement at the “threshold” level of performance. This portion of the FY21 PSAs, which is subject to a three-
year performance period, will be issued on November 11, 2023, to the extent earned and provided that the executive
meets the continued employment condition.
(12) Represents shares issuable under an RSU award granted on November 5, 2019, under the Company’s 2015 Long-Term
Incentive Plan. The RSU award vested at a rate of fifty percent (50%) per year on each anniversary of the grant date until they
became fully vested on November 5, 2021.
(13) Represents shares issuable under an RSU award granted on April 9, 2018, under the Company’s 2015 Long-Term Incentive
Plan. The RSU award vests at a rate of twenty-five percent (25%) per year on each anniversary of the grant date through April 9,
2022.
Proxy Statement
47
Option Exercises and Stock Vested Table
The following table summarizes the Named Executive Officers’ option exercises and stock award vesting
during fiscal year 2021.
Name
Liam K. Griffin
Kris Sennesael
Carlos S. Bori
Robert J. Terry
Karilee A. Durham
Option Awards
Stock Awards
Number of
Shares
Acquired on
Exercise (#)
—
—
15,938
1,750
—
Value
Realized on
Exercise
($)(1)
—
—
1,700,702
128,203
—
Number of
Shares
Acquired on
Vesting (#)
62,677
28,055
24,864
20,678
17,105
Value
Realized on
Vesting
($)(2)
9,271,879
4,161,448
3,686,040
3,064,656
2,722,837
(1) The value realized on exercise is based on the amount by which the market price of a share of the Company’s common stock
at the time of exercise exceeded the applicable exercise price per share of the exercised option.
(2) The value realized upon vesting is determined by multiplying (a) the number of shares underlying the stock awards that
vested, by (b) the closing price of the Company’s common stock on the Nasdaq Global Select Market on the applicable vesting
date.
Potential Payments Upon Termination
or Change in Control
Mr. Griffin
On May 11, 2016, in connection with the
appointment of Mr. Griffin as Chief Executive
Officer, the Company entered into an amended
and restated Change in Control / Severance
Agreement with Mr. Griffin (the “Griffin
Agreement”). The Griffin Agreement sets out
severance benefits that become payable if, while
employed by the Company, other than following a
change in control, Mr. Griffin either (i) is
terminated without cause, or (ii) terminates his
employment for good reason. The severance
benefits provided to Mr. Griffin under either of
these circumstances would consist of: (i) a lump-
sum payment equal to two (2) times the sum of
(A) his then-current annual base salary immediately
prior to such termination and (B) the Bonus
Amount (as defined below); (ii) full acceleration of
the vesting of all of Mr. Griffin’s outstanding
stock options, which stock options would become
exercisable for a period of two (2) years after the
termination date (but not beyond the expiration of
their respective maximum terms), full acceleration
of the vesting of all outstanding restricted stock
awards, and the right to receive the number of
performance shares under outstanding PSAs that
are earned but unissued and that he would
have earned had he remained employed through
the end of the applicable performance period;
and (iii) provided he is eligible for and timely elects
to continue receiving group medical coverage,
certain COBRA continuation for him and his
eligible dependents (“COBRA continuation”) for
up to fifteen (15) months after the termination date.
The Bonus Amount is an amount equal to the
greater of (x) the average of the short-term cash
incentive awards received for the three (3) years
prior to the year in which the termination occurs,
and (y) the target annual short-term cash
incentive award for the year in which the
termination occurs.
The Griffin Agreement also sets out severance
benefits that become payable if, within the period
of time commencing three (3) months prior to
and ending two (2) years following a change in
control, Mr. Griffin’s employment is either
(i) terminated by the Company without cause, or
(ii) terminated by him for good reason (a
“Qualifying Termination”). The severance benefits
provided to Mr. Griffin in such circumstances
would consist of the following: (i) a lump-sum
payment equal to two and one-half (21∕2) times the
sum of (A) his annual base salary immediately
prior to the change in control, and (B) the CIC
Bonus Amount (as defined below); (ii) all of
Mr. Griffin’s then-outstanding stock options would
48
Proxy Statement
become exercisable for a period of thirty (30)
months after the termination date (but not beyond
the expiration of their respective maximum
terms); and (iii) COBRA continuation for up to
eighteen (18) months after the termination date.
The CIC Bonus Amount is an amount equal to the
greater of (x) the average of the annual short-term
cash incentive awards received for the three (3)
years prior to the year in which the change of
control occurs and (y) the target annual short-term
cash incentive award for the year in which the
change of control occurs.
The Griffin Agreement also provides that in the
event of a Qualifying Termination, Mr. Griffin is
entitled to full acceleration of the vesting of all of
his outstanding equity awards (including stock
options, restricted stock awards, RSU awards, and
all earned but unissued performance-based
equity awards). At the time of a change in control,
all such outstanding equity awards would
continue to be subject to the same time-based
vesting schedule to which the awards were subject
prior to the change in control (including
performance-based equity awards that are
deemed earned at the time of the change in
control as described below). For performance-
based equity awards where the change in control
occurs prior to the end of the performance
period, such awards would be deemed earned as
to the greater of (i) the target level of shares for
such awards, or (ii) the number of shares that would
have been earned pursuant to the terms of such
awards based upon performance up through and
including the day prior to the date of the change
in control. In the event that the successor or
surviving company does not agree to assume, or
to substitute for, such outstanding equity awards
on substantially similar terms with substantially
equivalent economic benefits as exist for such
award immediately prior to the change in control,
then such awards would accelerate in full as of
the change in control.
In the event of Mr. Griffin’s death or permanent
disability (within the meaning of Section 22(e)(3)
of the IRC), the Griffin Agreement provides for full
acceleration of the vesting of all then-outstanding
equity awards subject to time-based vesting
(including stock options, restricted stock awards,
RSU awards, and all performance-based equity
awards where the performance period has ended
and the shares are earned but unissued). The
Griffin Agreement also provides that if Mr. Griffin’s
death or permanent disability occurs prior to the
end of the performance period of a performance-
based equity award, each such award would be
deemed earned as to the greater of (i) the target
level of shares for such award, or (ii) the number of
shares that would have been earned pursuant to
the terms of such award had he remained
employed through the end of the performance
period, and such earned shares would become
vested and issuable to him after the performance
period ends. In addition, all outstanding stock
options would be exercisable for a period of
twelve (12) months following the termination of
employment (but not beyond the expiration
of their respective maximum terms).
The Griffin Agreement is intended to be exempt
from or compliant with Section 409A of the IRC
and has an initial two (2) year term from May 11,
2016, and thereafter renews automatically on an
annual basis for up to five (5) additional years
unless either the Company or Mr. Griffin timely
provides a notice of non-renewal to the other prior
to the end of the then-current term. The
payments due to Mr. Griffin under the Griffin
Agreement are subject to potential reduction in
the event that such payments would otherwise
become subject to excise tax incurred under
Section 4999 of the IRC, if such reduction would
result in his retaining a larger amount, on an
after-tax basis, than if he had received all of the
payments due.
Additionally, the Griffin Agreement requires that
Mr. Griffin sign a release of claims in favor of the
Company before he is eligible to receive any
benefits under the Griffin Agreement and contains
a non-solicitation provision applicable to
Mr. Griffin while he is employed by the Company
and for twelve (12) months following the
termination of his employment.
The terms “change in control,” “cause,” and “good
reason” are each defined in the Griffin Agreement.
Change in control means, in summary: (i) the
acquisition by a person or a group of 40% or more
of the outstanding stock of the Company;
(ii) a change, without approval by the Board, of a
Proxy Statement
49
majority of the Board of the Company; (iii) the
acquisition of the Company by means of a
reorganization, merger, consolidation, or asset
sale; or (iv) stockholder approval of a liquidation
or dissolution of the Company. Cause means, in
summary: (i) deliberate dishonesty that is
significantly detrimental to the best interests of
the Company; (ii) conduct constituting an act of
moral turpitude; (iii) willful disloyalty or
insubordination; or (iv) incompetent performance
or substantial or continuing inattention to or
neglect of duties. Good reason means, in
summary: (i) a material diminution in his base
compensation, authority, duties, responsibilities,
or budget over which he retains authority; (ii) a
requirement that Mr. Griffin report to a corporate
officer or employee instead of reporting directly to
the Board; (iii) a material change in his office
location; or (iv) any action or inaction constituting
a material breach by the Company of the terms
of the agreement.
Mr. Sennesael, Mr. Bori, Mr. Terry, and
Ms. Durham
The Company entered into Change in Control /
Severance Agreements with each of Mr. Sennesael,
Mr. Bori, Mr. Terry, and Ms. Durham on August 29,
2016, November 9, 2016, November 10, 2016,
and April 13, 2018, respectively. Each such Change
in Control / Severance Agreement is referred to
herein as a “CIC Agreement.”
Each CIC Agreement sets out severance benefits
that become payable if, within the period of time
commencing three (3) months prior to and
ending twelve (12) months following a change in
control, the executive officer’s employment is
either (i) terminated by the Company without
cause, or (ii) terminated by the executive for good
reason (for each such executive, a “Qualifying
Termination”). The severance benefits provided to
the executive in such circumstances would
consist of the following: (i) a lump sum payment
equal to one and one-half (11∕2) times the sum of
(A) his or her annual base salary immediately
prior to the change in control, and (B) the CIC
Bonus Amount; (ii) all of the executive’s then-
outstanding stock options would remain
exercisable for a period of eighteen (18) months
after the termination date (but not beyond the
expiration of their respective maximum terms);
and (iii) COBRA continuation for up to
eighteen (18) months after the termination date.
Each CIC Agreement also provides that in the
event of a Qualifying Termination, the executive is
entitled to full acceleration of the vesting of all
of his or her outstanding equity awards (including
stock options, restricted stock awards, RSU
awards, and all earned but unissued performance-
based equity awards). At the time of a change in
control, all such outstanding equity awards would
continue to be subject to the same time-based
vesting schedule to which the awards were subject
prior to the change in control (including
performance-based equity awards that are
deemed earned at the time of the change in
control as described below). For performance-
based equity awards where the change in control
occurs prior to the end of the performance
period, such awards would be deemed earned as
to the greater of (i) the target level of shares for
such awards, or (ii) the number of shares that would
have been earned pursuant to the terms of such
awards based upon performance up through and
including the day prior to the date of the change
in control. In the event that the successor or
surviving company does not agree to assume, or
to substitute for, such outstanding equity awards
on substantially similar terms with substantially
equivalent economic benefits as exist for such
award immediately prior to the change in control,
then such awards would accelerate in full as of
the change in control.
Each CIC Agreement also sets out severance
benefits outside a change in control that become
payable if the executive’s employment is
terminated by the Company without cause. The
severance benefits provided to the executive
under such circumstance would consist of the
following: (i) biweekly compensation continuation
payments for a period of twelve (12) months,
with each such compensation continuation
payment being equal to the aggregate payment
amount divided by twenty-six (26), where the
aggregate payment is equal to the sum of (x) his
or her annual base salary, and (y) any short-term
cash incentive award then due; (ii) all then-
vested outstanding stock options would remain
exercisable for a period of twelve (12) months after
50
Proxy Statement
the termination date (but not beyond the
expiration of their respective maximum terms);
and (iii) COBRA continuation coverage for up to
twelve (12) months after the termination date.
In the event of the executive’s death or permanent
disability (within the meaning of Section 22(e)(3)
of the IRC), each CIC Agreement provides for full
acceleration of the vesting of all then-
outstanding equity awards subject to time-based
vesting (including stock options, restricted
stock awards, RSU awards, and all performance-
based equity awards where the performance
period has ended and the shares are earned but
unissued). Each CIC Agreement also provides that
for a performance-based equity award where
the executive’s death or permanent disability
occurs prior to the end of the performance period,
such award would be deemed earned as to the
greater of (i) the target level of shares for such
award, or (ii) the number of shares that would have
been earned pursuant to the terms of such
award had the executive remained employed
through the end of the performance period, and
such earned shares would become vested and
issuable to the executive after the performance
period ends. In addition, all outstanding stock
options would remain exercisable for a period of
twelve (12) months following the termination of
employment (but not beyond the expiration
of their respective maximum terms).
Each CIC Agreement is intended to be exempt
from or compliant with Section 409A of the IRC
and has an initial two (2) year term, and thereafter
renews automatically on an annual basis for up
to five (5) additional years unless either the
Company or the executive timely provides a
notice of non-renewal to the other prior to the
end of the then-current term. The payments due
to each executive under his or her CIC Agreement
are subject to potential reduction in the event
that such payments would otherwise become
subject to excise tax incurred under Section 4999
of the IRC, if such reduction would result in the
executive retaining a larger amount, on an after-tax
basis, than if he or she had received all of the
payments due.
Additionally, each CIC Agreement requires that
the executive sign a release of claims in favor of
the Company before he or she is eligible to receive
any benefits under the agreement. Each CIC
Agreement also contains non-solicitation
provisions applicable to the executive while he or
she is employed by the Company and for a
period of twelve (12) months following the
termination of his or her employment.
The terms “change in control,” “cause,” and “good
reason” are each defined in the CIC Agreements.
Change in control means, in summary: (i) the
acquisition by a person or a group of 40% or more
of the outstanding stock of the Company; (ii) a
change, without approval by the Board, of a
majority of the Board of the Company; (iii) the
acquisition of the Company by means of a
reorganization, merger, consolidation, or asset
sale; or (iv) stockholder approval of a liquidation
or dissolution of the Company. Cause means, in
summary: (i) deliberate dishonesty that is
significantly detrimental to the best interests of
the Company; (ii) conduct constituting an act of
moral turpitude; (iii) willful disloyalty or
insubordination; or (iv) incompetent performance
or substantial or continuing inattention to or
neglect of duties. Good reason means, in
summary: (i) a material diminution in the
executive’s base compensation, authority, duties,
or responsibilities; (ii) a material diminution in the
authority, duties, or responsibilities of the
executive’s supervisor; (iii) a material change in
the executive’s office location; or (iv) any action or
inaction constituting a material breach by the
Company of the terms of the agreement.
Proxy Statement
51
The following table summarizes the payments and benefits that would be made to the Named Executive
Officers as of October 1, 2021, in the following circumstances as of such date:
• termination without cause outside of a change in control;
• termination without cause or for good reason in connection with a change in control; and
• in the event of a termination of employment because of death or disability.
The accelerated equity values in the table reflect a price of $163.92 per share, which was the closing sale
price of the Company’s common stock on the Nasdaq Global Select Market on October 1, 2021. The
table does not reflect any equity awards made after October 1, 2021.
Name
Liam K. Griffin(2)
Kris Sennesael(2)
Carlos S. Bori(2)
Robert J. Terry(2)
Karilee A. Durham(2)
Benefit
Salary and Short-Term
Incentive
Accelerated RSUs
Accelerated PSAs(5)
Medical
TOTAL
Salary and Short-Term
Incentive
Accelerated RSUs
Accelerated PSAs(5)
Medical
TOTAL
Salary and Short-Term
Incentive
Accelerated RSUs
Accelerated PSAs(5)
Medical
TOTAL
Salary and Short-Term
Incentive
Accelerated RSUs
Accelerated PSAs(5)
Medical
TOTAL
Salary and Short-Term
Incentive
Accelerated RSUs
Accelerated PSAs(5)
Medical
TOTAL
Termination w/o Cause
Outside Change in
Control ($)(1)
Termination w/o Cause
or for Good Reason,
After
Change in Control ($)
5,875,814(3)
7,344,767(4)
Death/Disability
($)
—
14,976,387
44,142,836
27,458
65,022,495
14,976,387
44,142,836
32,950
66,496,940
560,000(6)
1,715,904(7)
—
—
24,426
584,426
475,000(6)
—
—
24,426
499,426
492,000(6)
—
—
24,426
516,426
450,000(6)
—
—
24,426
474,426
6,018,978
8,783,161
36,639
16,554,682
1,315,121(7)
5,336,580
7,643,590
36,639
14,331,930
1,360,413(7)
4,416,988
6,729,900
36,639
12,543,940
1,264,453(7)
3,588,209
4,644,673
36,639
9,533,974
14,976,387
44,142,836
—
59,119,223
—
6,018,978
8,783,161
—
14,802,139
—
5,336,580
7,643,590
—
12,980,170
—
4,416,988
6,729,900
—
11,146,888
—
3,588,209
4,644,673
—
8,232,882
(1) For Mr. Griffin, includes amounts payable pursuant to a termination for good reason outside of a change in control.
(2) Excludes the value of accrued vacation/paid time off required by law to be paid upon termination.
(3) Represents an amount equal to two (2) times the sum of (A) Mr. Griffin’s annual base salary as of October 1, 2021, and (B) an
Incentive Plan payment, which is equal to the three (3) year average of the actual incentive payments made to Mr. Griffin
for fiscal years 2018, 2019, and 2020, since such average is greater than the “target” short-term cash incentive award for fiscal
year 2021.
(4) Represents an amount equal to two and one-half (21∕2) times the sum of (A) Mr. Griffin’s annual base salary as of October 1,
2021, and (B) an Incentive Plan payment, which is equal to the three (3) year average of the actual incentive payments made
to Mr. Griffin for fiscal years 2018, 2019, and 2020, since such average is greater than the “target” short-term cash incentive
award for fiscal year 2021.
52
Proxy Statement
(5) Represents the value of PSAs that were unvested and outstanding as of October 1, 2021, in accordance with Item 402(j) of
Regulation S-K, using the following assumptions: (a) achievement at the “target” level of performance for the FY19 PSAs (3-year
TSR percentile ranking metric) scheduled to vest on November 6, 2021, based on the Company’s actual TSR relative to
peers for fiscal years 2019-2021 falling below the “target” level of performance; (b) achievement at 200% of the “target”
level of performance for the FY20 PSAs (emerging revenue growth and design wins metrics) scheduled to vest on November 6,
2021, based on the Company’s actual achievement at the “maximum” level of performance with respect to both performance
metrics measured over a one-year performance period consisting of the Company’s fiscal year 2020; (c) achievement at
127.78% of the “target” level of performance for the FY20 PSAs (3-year TSR percentile ranking metric) scheduled to vest on
November 5, 2022, based on the Company’s TSR relative to peers for fiscal years 2020 and 2021; (d) achievement at 200% of
the “target” level of performance for the FY21 PSAs (emerging revenue growth and design wins metrics)) scheduled to vest
on November 11, 2021, and November 11, 2022, based on the Company’s actual achievement at the “maximum” level of
performance with respect to both performance metrics measured over a one-year performance period consisting of the
Company’s fiscal year 2021; (e) achievement at the “target” level of performance for the FY21 PSAs (3-year TSR percentile
ranking metric) scheduled to vest on November 11, 2023, based on the Company’s TSR relative to peers for fiscal year 2021
falling below the “target” level of performance; and (f) achievement at 187.5% of the “target” level of performance for the
one-time, non-recurring stock-based award granted to Mr. Griffin scheduled to vest on November 5, 2021, based on the
Company’s actual achievement at the “maximum” level of performance with respect to fiscal year 2020 and at 175% of the
“target” level of performance with respect to fiscal year 2021.
(6) Represents an amount equal to the Named Executive Officer’s annual base salary as of October 1, 2021.
(7) Represents an amount equal to one and one-half (11∕2) times the sum of (A) the Named Executive Officer’s annual base
salary as of October 1, 2021, and (B) an Incentive Plan payment, which is equal to the three (3) year average of the actual
incentive payments made to the Named Executive Officer for fiscal years 2018, 2019, and 2020, since such average is greater
than the Named Executive Officer’s “target” short-term cash incentive award for fiscal year 2021.
Proxy Statement
53
CEO Pay Ratio
Following is an estimate, prepared under
applicable SEC rules, of the ratio of the annual
total compensation of our Chief Executive Officer
to the median of the annual total compensation
of our other employees. For fiscal year 2021:
• The annual total compensation of our Chief
Executive Officer was $16,150,421.
• The annual total compensation of our median
compensated employee was $17,409.
• Based on the foregoing, we estimate that our
Chief Executive Officer’s total annual
compensation was approximately 928 times
that of our median employee.
To determine the median of the annual total
compensation of our employees, we applied the
following methodology and material assumptions:
• We did not use the de minimis exception to
exclude any non-U.S. employees. We have a
globally diverse workforce with total headcount
of approximately 11,000 as of October 1,
2021, of which approximately 77% are located
outside the United States, primarily in locations
employing large direct labor forces such as
Mexico and Singapore where wages are
significantly lower than in the United States. As
permitted under SEC rules, we excluded
from our headcount approximately 340
employees who became employees of the
Company during fiscal year 2021 due to our
acquisition of Silicon Labs’ Infrastructure and
Automotive business. The median employee
within our employee population was identified,
consistent with prior years, as of the last day
of our fiscal year, or October 1, 2021, and is a full-
time employee in our Mexicali, Mexico facility.
• To identify the median employee, we used a
consistently applied compensation measure that
included total taxable earnings paid to our
employees in the most recently completed
taxable year in their respective jurisdictions. This
included base salary, overtime pay, shift
premiums, recognition bonuses, annual cash
incentive awards, and long-term stock-based
incentive awards. We annualized the
compensation of permanent, full-time, and part-
time employees who were hired after the
beginning of the most recently completed
taxable year in their respective jurisdictions.
• Using this consistently applied compensation
measure, we identified an employee at the
median and calculated such employee’s total
compensation for fiscal year 2021 in accordance
with Item 402(c)(2)(x) of Regulation S-K.
• We did not use any cost-of-living adjustments in
identifying the median employee.
• The annual total compensation of our Chief
Executive Officer is the amount reported in the
“Total” column of our Summary Compensation
Table for fiscal year 2021.
We believe our pay ratio presented above is a
reasonable estimate calculated in a manner
consistent with Item 402(u) of Regulation S-K. The
SEC rules for identifying the median compensated
employee and calculating the pay ratio based
on that employee’s annual total compensation
allow companies to adopt a variety of
methodologies, to apply certain exclusions, and
to make reasonable estimates and assumptions.
As a result, the pay ratio reported by other
companies may not be comparable to the pay
ratio reported above, as other companies may
have different employment and compensation
practices and may utilize different methodologies,
exclusions, estimates, and assumptions in
calculating their own pay ratios.
54
Proxy Statement
Director Compensation
The Board sets the compensation for the
Company’s non-employee directors, after
receiving the recommendations of the
Compensation Committee. In formulating its
recommendations, the Compensation Committee
seeks and receives input from Aon/Radford
related to the amounts, terms, and conditions of
director cash compensation and stock-based
compensation awards, with the goal of
establishing non-employee director compensation
that is similar to, and competitive with, the
compensation of non-employee directors at peer
companies in the semiconductor industry.
Cash Compensation
Non-employee directors are paid, in quarterly
installments, an annual retainer of $80,000 (which
increased from $75,000 as of February 2022).
Additional annual retainers for Chairman, Lead
Independent Director, and/or committee service
(paid in quarterly installments) are as follows: any
non-employee Chairman of the Board ($130,000);
the Lead Independent Director, if one has been
appointed ($50,000); the Chairman of the Audit
Committee ($30,000); the Chairman of the
Compensation Committee ($20,000); the
Chairman of the Nominating and Governance
Committee ($15,000); non-chair member of Audit
Committee ($15,000); non-chair member of
Compensation Committee ($10,000); and non-
chair member of Nominating and Corporate
Governance Committee ($7,500). In addition, the
Compensation Committee continues to retain
discretion to recommend to the full Board that
additional cash payments be made to a non-
employee director for extraordinary service during
a fiscal year.
Equity Compensation
Currently, following each annual meeting of
stockholders, each non-employee director who is
reelected will receive a grant of RSUs having a
value of approximately $225,000 (which increased
from $200,000 as of February 2022). Any newly
appointed non-employee director will receive an
initial equity grant of RSUs having a value of
approximately $225,000 (which increased from
$200,000 as of February 2022). The number of
shares subject to a non-employee director’s initial
RSU award or annual award is determined by
dividing the approximate value of the award, as
stated above, by the average closing price per
share of the Company’s common stock as reported
on the Nasdaq Global Select Market (or if the
common stock is not then traded on such market,
such other market on which the common stock
is traded) for each trading day during the 30
consecutive trading day period ending on, and
including, the grant date. Unless otherwise
determined by the Board, (a) a non-employee
director’s initial equity grant of RSUs will vest in
three (3) equal annual installments on the first three
anniversaries of the date of grant, and (b) a non-
employee director’s annual equity grant of RSUs
will vest on the first anniversary of the date of
grant. In the event of a change in control of the
Company, any outstanding options and RSUs
awarded under the 2008 Director Long-Term
Incentive Plan will become fully exercisable and
deemed fully vested, respectively.
No director who is also an employee receives
separate compensation for services rendered as a
director. Mr. Griffin is currently the only director
who is also an employee of the Company.
Proxy Statement
55
Director Compensation Table
The following table summarizes the compensation paid to the Company’s non-employee directors for
fiscal year 2021.
Name
David J. Aldrich, Former Chairman of the Board(3)
Christine King, Lead Independent Director
Alan S. Batey
Kevin L. Beebe
Timothy R. Furey
David P. McGlade
Robert A. Schriesheim
Kimberly S. Stevenson
Fees Earned or
Paid in Cash
($)
126,154
160,000
82,500
90,000
97,500
115,000
100,000
82,500
Stock
Awards
($)(1)(2)
—
175,099
175,099
175,099
175,099
175,099
175,099
175,099
Total
($)
126,154
335,099
257,599
265,099
272,599
290,099
275,099
257,599
(1) The non-employee members of the Board who held such positions on October 1, 2021, held the following aggregate
number of unexercised stock options and unvested RSU awards as of such date:
Name
Christine King, Lead Independent Director
Alan S. Batey
Kevin L. Beebe
Timothy R. Furey
David P. McGlade
Robert A. Schriesheim
Kimberly S. Stevenson
Number of
Securities
Underlying
Unexercised
Options
—
—
—
—
—
—
—
Number of Shares
Subject to
Unvested RSUs
1,084
1,924
1,084
1,084
1,084
1,084
1,084
(2) Reflects the grant date fair value of 1,084 RSUs granted on May 12, 2021, to each non-employee director elected at the
2021 Annual Meeting of Stockholders, computed in accordance with the provisions of ASC 718 using a price of $161.53 per
share, which was the closing sale price of the Company’s common stock on the Nasdaq Global Select Market on May 12,
2021.
(3) Mr. Aldrich served as Chairman of the Board and as a director until the 2021 Annual Meeting of Stockholders on May 12,
2021.
Director Stock Ownership Requirements
We have adopted Director Stock Ownership
guidelines with the objective of more closely
aligning the interests of our directors with those
of our stockholders. The minimum number of
shares of the Company’s common stock that the
Director Stock Ownership guidelines require non-
employee directors to hold while serving in their
capacity as directors is the director base
compensation (currently $80,000) multiplied by
five (5), divided by the fair market value of the
Company’s common stock (rounded to the nearest
100 shares). For purposes of the Director Stock
Ownership guidelines, the fair market value of the
Company’s common stock is the average closing
price per share of the Company’s common stock
as reported on the Nasdaq Global Select Market
(or if the common stock is not then traded on such
market, such other market on which the common
stock is traded) for the twelve (12) month period
ending with the determination date. All of our
directors have met the stock ownership guidelines
as of the date hereof (with the exception of
Mr. Guerin and Ms. McBride, who are not required
to comply with the guidelines until the fifth
anniversary of their appointments to the Board).
56
Proxy Statement
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis
included herein with management, and based on the review and discussions, the Compensation
Committee recommended to the Board that the Compensation Discussion and Analysis be included in
this Proxy Statement for the 2022 Annual Meeting of Stockholders.
THE COMPENSATION COMMITTEE
Christine King, Chairman
David P. McGlade
Robert A. Schriesheim
Proxy Statement
57
INTRODUCTION TO PROPOSALS 4-7:
and recommends that the Company’s stockholders
adopt and approve the proposed amendments.
ELIMINATION OF SUPERMAJORITY VOTE PROVISIONS
FROM OUR CHARTER
The Charter currently includes a number of
supermajority voting provisions. At the Company’s
2016 Annual Meeting, we presented five
Company proposals that, if approved by the
stockholders, would have removed all existing
supermajority voting provisions from the Charter.
However, despite the recommendation of the
Board in favor of all five proposals, only one of the
five proposals (which required the affirmative
vote of only two-thirds of the shares of the
Company’s outstanding common stock) passed.
Different voting standards apply to the various
provisions proposed to be amended and,
accordingly, different votes are required for the
approval of Proposals 4-7, as specified in each
proposal below. We are submitting these
amendments to our stockholders as separate
items so that our stockholders are able to express
their views on each amendment separately.
None of the proposals is conditioned upon
approval of any other proposal; each proposal
may be approved or rejected independently.
The four proposals that did not pass in 2016 were
again presented at the 2020 Annual Meeting for
stockholder approval. However, despite the
recommendation of the Board once again in favor
of all four proposals, as well as the Company
engaging in enhanced solicitation of stockholder
votes for the 2020 Annual Meeting with the
goal of increasing the number of shares
represented at the meeting, none of the four
proposals passed.
After taking into consideration the approval by
our stockholders of a stockholder proposal in 2021
requesting that the Board take steps to remove
the supermajority provisions in the Charter, as well
as the feedback received from stockholders
following the 2021 Annual Meeting, the Board
has directed that the four proposals that did not
pass in 2016 or in 2020 be again presented at the
Annual Meeting for stockholder approval.
Specifically, our Board has adopted and approved
amendments to our Charter to remove the
supermajority voting provisions and to make
certain other changes as described below, subject
to approval by the Company’s stockholders as
set forth in the Charter.
The Board believes that the changes set forth in
Proposals 4-7 are advisable and in the best
interests of our stockholders. The Board, upon
the recommendation of the Nominating and
Corporate Governance Committee, has
unanimously approved the proposed
amendments and declared them to be advisable,
The Company recognizes the high voting
thresholds that must be surpassed in order to
approve Proposals 4-7 (80% of shares outstanding,
in the case of Proposals 4, 6, and 7, and 90% of
shares outstanding, in the case of Proposal 5) and
that fewer than 80% of the Company’s outstanding
shares of common stock were present in person
or represented by proxy at our most recent annual
meeting. In order to increase the number of
shares represented at the Annual Meeting and
with the objective of obtaining sufficient votes to
approve Proposals 4-7, the Company has engaged
a proxy solicitor, D.F. King & Co., to undertake a
targeted solicitation of both institutional and retail
investors.
The proposals that are approved by our
stockholders at the Annual Meeting will be
reflected in a Certificate of Amendment to our
Restated Certificate of Incorporation, as amended,
filed with the Secretary of State of the State of
Delaware following the meeting. Our Board
reserves the right, at any time prior to the
effectiveness of the filing of the Certificate of
Amendment, to abandon the proposed
amendments.
The following description of the proposed
amendments to our Charter is a summary and is
qualified by the full text of the proposed
amendments, which is attached to this Proxy
Statement as Appendix A.
58
Proxy Statement
PROPOSAL 4:
APPROVAL OF AMENDMENT TO THE CHARTER TO
ELIMINATE THE SUPERMAJORITY VOTE PROVISIONS
RELATING TO STOCKHOLDER APPROVAL OF A MERGER OR
CONSOLIDATION, DISPOSITION OF ALL OR SUBSTANTIALLY
ALL OF OUR ASSETS, OR ISSUANCE OF A SUBSTANTIAL
AMOUNT OF OUR SECURITIES
The Charter currently requires, in addition to any
other vote required by law, another provision of the
Charter, or a contract to which we are party, the
affirmative vote of holders of at least 80% of the
shares of all classes of our stock entitled to vote for
the election of directors, considered for this
purpose as one class of stock, (a) for the adoption
of any agreement for the merger or consolidation
of the Company with or into any Other Corporation
(as defined in the Charter), or (b) to authorize
any sale, lease, exchange, mortgage, pledge, or
other disposition of all, or substantially all, of the
assets of the Company or any Subsidiary (as
defined in the Charter) to any Other Corporation,
or (c) to authorize the issuance or transfer by
the Company of any Substantial Amount (as
defined in the Charter) of securities of the
Company in exchange for the securities or assets
of any Other Corporation. This supermajority
vote is not required if the transaction has been
approved by members of the Board who were
directors prior to the time any such Other
Corporation involved in the proposed transaction
became a Beneficial Owner (as defined in the
Charter) of 5% or more of the outstanding shares
of stock of the Company entitled to vote for the
election of directors. The Charter also requires the
affirmative vote of holders of at least 80% of the
shares of all classes of our stock entitled to vote
for the election of directors, considered for this
purpose as one class of stock, to amend the
Charter provisions relating to stockholder approval
of such a transaction.
If stockholders approve this Proposal 4, the
Charter will be amended to eliminate these
supermajority voting requirements, and the voting
requirement in the future would be the affirmative
vote of the holders of at least a majority of the
shares of all classes of our stock entitled to vote
for the election of directors, considered for this
purpose as one class of stock.
The amendment to the Charter that would be
effected by approval of this Proposal 4 is shown
in the text of Article ELEVENTH, Paragraphs 1 and
5, of the Charter provisions attached to this
Proxy Statement as Appendix A.
Vote Required to Approve Proposal 4
Approval of this amendment at the Annual
Meeting requires the affirmative vote of the
holders of at least 80% of the shares of our
outstanding common stock.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
“FOR” THIS PROPOSAL 4
VOTE
Proxy Statement
59
PROPOSAL 5:
APPROVAL OF AMENDMENT TO THE CHARTER TO
ELIMINATE THE SUPERMAJORITY VOTE PROVISIONS
RELATING TO STOCKHOLDER APPROVAL OF A BUSINESS
COMBINATION WITH ANY RELATED PERSON
The Charter currently requires the affirmative vote
of holders of at least 90% of the shares of all
classes of our stock entitled to vote for the election
of directors, considered for this purpose as one
class of stock, to approve a Business Combination,
which, as defined in the Charter, requires that
such Business Combination be with a Related
Person or an Affiliate of a Related Person (each as
defined in the Charter), in addition to any other
vote required by law or the Charter. The Charter
also requires the affirmative vote of holders of at
least 90% of the shares of all classes of our
stock entitled to vote for the election of directors,
considered for this purpose as one class of
stock, to amend the Charter provisions relating to
stockholder approval of such a Business
Combination.
If stockholders approve this Proposal 5, the
Charter will be amended to eliminate these
supermajority voting requirements, and the
voting requirement in the future would be the
affirmative vote of the holders of at least a majority
of the shares of all classes of our stock entitled
to vote for the election of directors, considered for
this purpose as one class of stock.
The amendment to the Charter that would be
effected by approval of this Proposal 5 is shown
in the text of Article TWELFTH, Paragraph 2, and
Article TENTH, Paragraph 1(B), subpart (ii), of the
Charter provisions attached to this Proxy
Statement as Appendix A.
Vote Required to Approve Proposal 5
Approval of this amendment at the Annual
Meeting requires the affirmative vote of the
holders of at least 90% of the shares of our
outstanding common stock.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
“FOR” THIS PROPOSAL 5
VOTE
60
Proxy Statement
PROPOSAL 6:
APPROVAL OF AMENDMENT TO THE CHARTER TO
ELIMINATE THE SUPERMAJORITY VOTE PROVISION
RELATING TO STOCKHOLDER AMENDMENT OF CHARTER
PROVISIONS GOVERNING DIRECTORS
The Charter currently requires the affirmative vote
of holders of at least 80% of the shares of all
classes of our stock entitled to vote for the election
of directors, considered for this purpose as one
class of stock, to amend the Charter provisions
governing the duties, number, term, election,
removal, and liability of our directors.
If stockholders approve this Proposal 6, the
Charter will be amended to eliminate this
supermajority voting requirement, and the voting
requirement in the future would be the affirmative
vote of the holders of at least a majority of the
shares of all classes of our stock entitled to vote
for the election of directors, considered for this
purpose as one class of stock.
The amendment to the Charter that would be
effected by approval of this Proposal 6 is shown
in the text referring to Article SEVENTH within
Article TENTH, Paragraph 1(B), subpart (i), of the
Charter provisions attached to this Proxy Statement
as Appendix A.
Vote Required to Approve Proposal 6
Approval of this amendment at the Annual
Meeting requires the affirmative vote of the
holders of at least 80% of the shares of our
outstanding common stock.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
“FOR” THIS PROPOSAL 6
VOTE
Proxy Statement
61
PROPOSAL 7:
APPROVAL OF AMENDMENT TO THE CHARTER TO
ELIMINATE THE SUPERMAJORITY VOTE PROVISION
RELATING TO STOCKHOLDER AMENDMENT OF THE
CHARTER PROVISION GOVERNING ACTION BY
STOCKHOLDERS
The Charter currently requires the affirmative vote
of holders of at least 80% of the shares of all
classes of our stock entitled to vote for the election
of directors, considered for this purpose as one
class of stock, to amend the Charter provision
requiring that an action taken by stockholders be
effected at an annual or special meeting, and
not by written consent.
If stockholders approve this Proposal 7, the
Charter will be amended to eliminate this
supermajority voting requirement, and the voting
requirement in the future would be the affirmative
vote of the holders of at least a majority of the
shares of all classes of our stock entitled to vote
for the election of directors, considered for this
purpose as one class of stock.
The amendment to the Charter that would be
effected by approval of this Proposal 7 is shown
in the text referring to Article THIRTEENTH within
Article TENTH, Paragraph 1(B), subpart (i), of the
Charter provisions attached to this Proxy
Statement as Appendix A.
Vote Required to Approve Proposal 7
Approval of this amendment at the Annual
Meeting requires the affirmative vote of the
holders of at least 80% of the shares of our
outstanding common stock.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
“FOR” THIS PROPOSAL 7
VOTE
62
Proxy Statement
PROPOSAL 8:
STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER
SPECIAL MEETING RIGHT
In accordance with SEC rules, we have set forth
below a stockholder proposal from Mr. John
Chevedden, 2215 Nelson Avenue, No. 205,
Redondo Beach, CA 90278. Mr. Chevedden has
notified us that he is the beneficial owner of 50
shares of the Company’s common stock and that
he intends to present the following proposal at
the Annual Meeting. The stockholder proposal will
be voted upon at the Annual Meeting if properly
presented. The Company assumes no
responsibility for the content or accuracy of the
text of the stockholder’s resolution or the
statement and graphic the stockholder furnished
to us in support thereof, which appear below
exactly as submitted. The stockholder proposal
includes some assertions the Company believes
are incorrect.
Proposal 8 — Special Shareholder
Meeting Improvement
FOR
Shareholder
Rights
Shareholders ask our board to take the steps
necessary to amend the appropriate company
governing documents to give the owners of a
combined 10% of our outstanding common stock
the power to call a special shareholder meeting.
One of the main purposes of this proposal is to
give shareholders the right to formally participate
in calling for a special shareholder meeting
regardless of their length of stock ownership to
the fullest extent possible.
It currently takes a theoretical 25% of shares to
call a special shareholder meeting. And it keeps
getting worse from here for shareholders.
This theoretical 25% of shares equal 34% of
shares that vote at the annual meeting. It would
be hopeless to think that they shares that do not
have the time to vote at the annual meeting would
have the time to take the special procedural
steps to call for a special shareholder meeting.
Then all shares not owned for a full year are
prohibited from participation in the call for a
special shareholder meeting. Thus the 34% of
shares could determine that they own 44% of
shares that vote when all their shares are included
regardless of length of stock ownership.
Then all share not held long are prohibited from
participation in the call for a special shareholder
meeting. Thus the 44% of shares could determine
that they own 50% of shares when their shares are
include that are not held long. A theoretical 25%
of shares to call a special shareholder meeting that
can easily descend into a requirement of 50% of
shares. A 50% requirement is nothing for Skyworks
Solutions management to brag about.
It is also important to adopt this proposal to make
up for our complete lack of a shareholder right
to act by written consent. Many companies provide
for a shareholder right to call a special shareholder
meeting and a shareholder right to act by
written consent.
Skyworks Solutions shareholders gave 44%-
support to a shareholder right to act by written
consent at the 2020 annual meeting. This 44%-
suport was likely 51% support from the shares that
have access to independent proxy voting advice.
This is a corporate governance improvement
proposal like the 2021 shareholder proposal to
eliminate our undemocratic 80% shareholder vote
requirement from all shares outstanding (that
descends into an outrageous 109% vote
requirement from the shares that typically vote at
our annual meeting) that won outstanding 96%
support from Skyworks Solutions shareholders.
Please vote yes:
Special Shareholder Meeting
Improvement — Proposal 8
Proxy Statement
63
Statement of Opposition by the Board of Directors
In 2018, the Board amended the Company’s
By-laws to provide a stockholder special meeting
right because it believes, as a matter of good
corporate governance, that stockholders should
be permitted to request special meetings in
appropriate circumstances. The existing
stockholder special meeting right, and its 25%
required ownership threshold, was ratified
by stockholders at the 2018 Annual Meeting of
Stockholders.
The Board has carefully reviewed and considered
the stockholder’s proposal and has concluded
that reducing the special meeting ownership
threshold to 10% would not be in the best interests
of the Company’s stockholders. The Board
recommends a vote AGAINST the proposal for
the following reasons:
Our existing stockholder special meeting right
strikes the appropriate balance between
enhancing the rights of all stockholders and
preventing the waste of corporate resources
and associated disruptions
Organizing and preparing for a special meeting
results in significant costs to the Company in legal,
administrative, printing, distribution, and other
fees. It also requires considerable attention from
our senior executives, diverting their focus
from performing their primary functions of
overseeing and operating our business in the
best interests of all stockholders. Consequently,
the Board believes that special meetings should
be called only to consider matters deemed by a
significant portion of our stockholders to warrant
immediate attention and that cannot be deferred
for consideration until the next annual meeting.
A low ownership threshold could allow small
groups of stockholders to misuse the special
meeting right to advance narrow or short-term
interests that might not be shared by our broader
stockholder base. A 10% ownership threshold
could be met by a single current stockholder,
while our existing 25% ownership threshold could
be met by no fewer than four of our current
stockholders acting together.
In line with our commitment to strong corporate
governance practices, our existing stockholder
special meeting right is consistent with public
company best practices
The Board is committed to sound principles of
corporate governance, as described throughout
this Proxy Statement. Our corporate governance
practices and policies, including our stockholder
special meeting right, annual election of all
directors, and regular board refreshment, promote
accountability to protect the interests of our
stockholders and are aligned with mainstream
governance practices. Our existing 25% ownership
threshold reflects prevailing public company
trends. Among S&P 500 companies, based on
FactSet data as of February 2022, 33.3% do not
allow stockholders to call special meetings at all
and 36.9% maintain a stockholder special meeting
right with a threshold of 25% or higher, while
only 12.0% have adopted a threshold of 10% or
lower. Furthermore, our Charter already requires,
in line with applicable Nasdaq requirements
and Delaware laws, that certain significant matters
be presented for a stockholder vote, such as
mergers, large acquisitions, and share issuances,
providing additional protection for our
stockholders. As described in Proposals 4
through 7 above, the Board is recommending
that stockholders approve amendments to our
Charter that would eliminate applicable
supermajority voting provisions therein. Our
robust corporate governance framework makes
the proponent’s proposal unnecessary.
Regular stockholder engagement remains an
important source of feedback that informs our
corporate decisions and is significantly more
cost effective than a special meeting
As noted in this Proxy Statement, we meet with
stockholders throughout the year to solicit their
perspectives on corporate governance, among
other topics. In addition to regular formal
engagement with our institutional stockholders,
we maintain open lines of communication by which
all stockholders are permitted to communicate
64
Proxy Statement
directly with members of our Board. We value the
views of our stockholders, and the input we
receive is a cornerstone of our corporate
governance practices, as demonstrated by the
actions our Board has taken in response to
discussions with stockholders, such as the
implementation of majority voting for directors in
uncontested elections, significant additions to
our sustainability disclosures, and the executive
compensation changes described in this Proxy
Statement. Importantly, our institutional
stockholders did not express concern regarding
the existing 25% ownership threshold in our
engagement meetings following the 2021 Annual
Meeting.
For these reasons, the Board considers the
proponent’s proposal not to be in the best
interests of the Company’s stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
“AGAINST” THE STOCKHOLDER PROPOSAL
VOTE
Proxy Statement
65
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
To the Company’s knowledge, the following table sets forth the beneficial ownership of the Company’s
common stock as of March 1, 2022, by the following individuals or entities: (i) each person or entity who
beneficially owns five percent (5%) or more of the outstanding shares of the Company’s common stock as
of March 1, 2022; (ii) the Named Executive Officers (as defined above under “Information About Executive
and Director Compensation”); (iii) each director and nominee for director; and (iv) all current executive
officers and directors of the Company, as a group.
Beneficial ownership is determined in accordance with the rules of the SEC, is not necessarily indicative
of beneficial ownership for any other purpose, and does not constitute an admission that the named
stockholder is a direct or indirect beneficial owner of those shares. As of March 1, 2022, there were
161,980,339 shares of the Company’s common stock issued and outstanding.
In computing the number of shares of Company common stock beneficially owned by a person and
the percentage ownership of that person, shares of Company common stock that are subject to stock
options or other rights held by that person that are currently exercisable or that will become exercisable
within sixty (60) days of March 1, 2022, are deemed outstanding. These shares are not, however, deemed
outstanding for the purpose of computing the percentage ownership of any other person.
Names and Addresses of Beneficial Owners(1)
The Vanguard Group, Inc.
BlackRock, Inc.
Alan S. Batey
Kevin L. Beebe
Carlos S. Bori
Karilee A. Durham
Timothy R. Furey
Liam K. Griffin
Eric J. Guerin
Christine King
Suzanne E. McBride
David P. McGlade
Robert A. Schriesheim
Kris Sennesael
Kimberly S. Stevenson
Robert J. Terry
All current directors and executive officers as a group (15 persons)
Number of Shares
Beneficially Owned(2)
Percent of Class
17,932,949(3)
14,307,628(4)
11.07%
8.83%
3,821
56,870
25,982(5)
18,191
18,758
88,507(5)
—
17,995
—
39,932
80,418
129,322
6,451
9,196(5)
506,309(5)
(*)
(*)
(*)
(*)
(*)
(*)
—
(*)
—
(*)
(*)
(*)
(*)
(*)
(*)
Less than 1%
*
(1) Unless otherwise set forth in the following notes, each person’s address is the address of the Company’s principal executive
offices at Skyworks Solutions, Inc., 5260 California Avenue, Irvine, CA 92617, and stockholders have sole voting and sole
investment power with respect to the shares, except to the extent such power may be shared by a spouse or otherwise
subject to applicable community property laws.
Includes the number of shares of Company common stock subject to stock options held by that person that are currently
exercisable or will become exercisable within sixty (60) days of March 1, 2022 (the “Current Options”), as follows:
Mr. Griffin — 13,211 shares under Current Options; Mr. Sennesael — 52,770 shares under Current Options; Mr. Terry — 502
shares under Current Options; current directors and executive officers as a group (15 persons) — 66,483 shares under Current
(2)
66
Proxy Statement
Options. Also includes the number of shares of Company common stock to be issued upon the vesting of restricted stock units
within sixty (60) days of March 1, 2022 (the “Vesting RSUs”), as follows: Ms. Durham — 4,426 shares under Vesting RSUs;
current directors and executive officers as a group (15 persons) — 4,426 shares under Vesting RSUs.
The table does not reflect the number of shares of Company common stock to be issued pursuant to unvested restricted
stock units (the “Unvested RSUs”) and earned, but unissued, performance share awards subject to time-based vesting only
(the “Unvested PSAs”) that are not scheduled to vest within sixty (60) days of March 1, 2022, as follows: Mr. Batey — 1,924 shares
under Unvested RSUs; Mr. Beebe — 1,084 shares under Unvested RSUs; Mr. Bori — 24,539 shares under Unvested RSUs and
20,680 shares under Unvested PSAs; Ms. Durham — 14,389 shares under Unvested RSUs and 12,137 shares under Unvested
PSAs; Mr. Furey — 1,084 shares under Unvested RSUs; Mr. Griffin — 87,108 shares under Unvested RSUs and 70,656 shares
under Unvested PSAs; Mr. Guerin — 1,340 shares under Unvested RSUs; Ms. King — 1,084 shares under Unvested RSUs;
Ms. McBride — 1,348 shares under Unvested RSUs; Mr. McGlade — 1,084 shares under Unvested RSUs; Mr. Schriesheim — 1,084
shares under Unvested RSUs; Mr. Sennesael — 27,002 shares under Unvested RSUs and 22,152 shares under Unvested
PSAs; Ms. Stevenson — 1,084 shares under Unvested RSUs; Mr. Terry — 20,986 shares under Unvested RSUs and 17,679 shares
under Unvested PSAs; current directors and executive officers as a group (15 persons) — 209,666 shares under Unvested
RSUs and 164,818 shares under Unvested PSAs.
(3) Consists of shares beneficially owned by The Vanguard Group, Inc. (“Vanguard”), which has sole voting power with respect to
zero shares, shared voting power with respect to 269,138 shares, sole dispositive power with respect to 17,259,548 shares
and shared dispositive power with respect to 673,401 shares. With respect to the information relating to Vanguard, the
Company has relied on information supplied by Vanguard on a Schedule 13G/A filed with the SEC on February 10, 2022. The
address of Vanguard is 100 Vanguard Blvd., Malvern, PA 19355.
(4) Consists of shares beneficially owned by BlackRock, Inc. (“BlackRock”), in its capacity as a parent holding company of various
subsidiaries under Rule 13d-1(b)(1)(ii)(G). In its capacity as a parent holding company or control person, BlackRock has
sole voting power with respect to 12,652,553 shares and sole dispositive power with respect to 14,307,628 shares which are
held by the following of its subsidiaries: BlackRock Life Limited, BlackRock Advisors, LLC, Aperio Group, LLC, BlackRock
(Netherlands) B.V., BlackRock Institutional Trust Company, National Association, BlackRock Asset Management Ireland Limited,
BlackRock Financial Management, Inc., BlackRock Japan Co., Ltd., BlackRock Asset Management Schweiz AG, BlackRock
Investment Management, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada
Limited, BlackRock Asset Management Deutschland AG, BlackRock (Luxembourg) S.A., BlackRock Investment Management
(Australia) Limited, BlackRock Advisors (UK) Limited, BlackRock Fund Advisors, BlackRock Asset Management North Asia
Limited, BlackRock (Singapore) Limited, and BlackRock Fund Managers Ltd. With respect to the information relating to
BlackRock and its affiliated entities, we have relied on information supplied by BlackRock on a Schedule 13G/A filed with the
SEC on February 1, 2022. The address of BlackRock is 55 East 52nd Street, New York, NY 10055.
Includes shares held in the Company’s 401(k) Savings and Investment Plan as of March 1, 2022.
(5)
Proxy Statement
67
GENERAL INFORMATION
Q. How do we refer to Skyworks in this Proxy
Statement?
The terms “Skyworks,” “the Company,” “we,”
“us,” and “our” refer to Skyworks Solutions, Inc.,
a Delaware corporation, and its consolidated
subsidiaries.
Q. When and where is our Annual Meeting?
The Annual Meeting will be held on
Wednesday, May 11, 2022, at 11:00 a.m.
Pacific Daylight Time. The Annual Meeting will
be held in a virtual format. You will be able
to attend and participate in the Annual
Meeting online by visiting
www.virtualshareholdermeeting.com/SWKS2022.
We believe that hosting a virtual meeting will
facilitate stockholder attendance and
participation at our Annual Meeting by
enabling stockholders to participate remotely
from any location around the world. We
have designed the virtual Annual Meeting to
provide the same rights and opportunities to
participate as stockholders would have at an
in-person meeting, including the right to vote
and ask questions through the virtual
meeting platform.
Q. What is the purpose of the Annual
Meeting?
At the Annual Meeting, stockholders will
consider and vote on the following matters:
• Proposal 1: The election of the eight
nominees named in this Proxy Statement to
our Board of Directors to serve until the
2023 Annual Meeting of Stockholders.
• Proposal 2: The ratification of the selection
of KPMG LLP as our independent
registered public accounting firm for fiscal
year 2022.
• Proposal 3: The approval, on a non-binding
basis, of the compensation of our Named
Executive Officers, as described above
under “Compensation Discussion and
Analysis,” and in the executive compensation
tables and accompanying narrative
disclosures in this Proxy Statement.
• Proposals 4, 5, 6, and 7: The approval of
various amendments to the Company’s
Restated Certificate of Incorporation
regarding elimination of supermajority vote
provisions.
• Proposal 8: A non-binding stockholder
proposal regarding our stockholder special
meeting right, if properly presented at the
Annual Meeting.
The stockholders will also act on any other
business that may properly come before the
meeting.
Q. What is included in our proxy materials?
The Company’s Annual Report, which includes
financial statements and “Management’s
Discussion and Analysis of Financial Condition
and Results of Operation” for fiscal year
2021, accompanies this Proxy Statement. This
Proxy Statement and form of proxy, and/or
notice of access thereto, are being first mailed
to stockholders on or about March 25, 2022.
The Proxy Statement and the Company’s
Annual Report are available at
www.skyworksinc.com/annualreport.
Q. Who can vote at our Annual Meeting?
Only stockholders of record at the close of
business on March 17, 2022 (the “Record
Date”), are entitled to notice of and to vote at
the Annual Meeting. As of the Record Date,
there were 161,670,997 shares of Skyworks’
common stock issued and outstanding.
Pursuant to Skyworks’ Restated Certificate of
Incorporation and By-laws, and applicable
Delaware law, each share of common stock
entitles the holder of record at the close of
business on the Record Date to one vote on
each matter considered at the Annual
Meeting.
68
Proxy Statement
Q.
Is my vote important?
Yes. Your vote is important no matter how
many shares you own. Please take the time to
vote in the way that is easiest and most
convenient for you, and cast your vote as
soon as possible.
Q. How do I vote if I am a stockholder of
record?
As a stockholder of record, you may vote in
one of the following three ways whether or not
you plan to attend the Annual Meeting
online: (a) by completing and submitting your
proxy via the Internet at the website address
listed on the proxy card, (b) by completing and
submitting your proxy using the toll-free
telephone number listed on the proxy card,
or (c) by completing, signing, and dating the
proxy card and returning it in the postage-
prepaid envelope provided for that purpose.
If you attend the Annual Meeting online,
you may vote online at the Annual Meeting
even if you have previously submitted your
proxy by mail or telephone, or via the Internet
(and your vote at the Annual Meeting will
automatically revoke your previously
submitted proxy, although mere virtual
attendance at the meeting without voting will
not have that result).
Q. How do I vote if I am a beneficial owner of
shares held in “street name”?
If your shares are held on your behalf by a
third party such as your broker or another
person or entity who holds shares of the
Company on your behalf and for your benefit,
which person or entity we refer to as a
“nominee,” and your broker (or other nominee)
is the stockholder of record of such shares,
then you are the beneficial owner of such
shares and we refer to those shares as being
held in “street name.” As the beneficial owner
of your “street name” shares, you are entitled
to instruct your broker (or other nominee) as to
how to vote your shares. Your broker (or
other nominee) will provide you with
information regarding how to instruct your
broker (or other nominee) as to the voting of
your “street name” shares.
Q. How do I vote if I am a participant in the
Skyworks 401(k) Savings and Investment
Plan?
If you are a participant in the Skyworks 401(k)
Savings and Investment Plan (the “401(k)
Plan”), you will receive an instruction card for
the Skyworks shares you own through the
401(k) Plan. That instruction card will serve as
a voting instruction card for the trustee of
the 401(k) Plan, and your 401(k) Plan shares
will be voted as you instruct.
Q. Can I change my vote after I have voted?
Any proxy given pursuant to this solicitation
may be revoked by the person giving it at any
time before it is voted at the Annual Meeting.
Proxies may be revoked by (a) delivering to the
Secretary of the Company, before the taking
of the vote at the Annual Meeting, a written
notice of revocation bearing a later date
than the proxy, (b) duly completing a later-
dated proxy relating to the same shares and
delivering it to the Secretary of the Company
before the taking of the vote at the Annual
Meeting, or (c) attending the Annual Meeting
online and voting (although virtual attendance
at the Annual Meeting will not in and of
itself constitute a revocation of a proxy). Any
written notice of revocation or subsequent
proxy should be delivered to the Company’s
executive offices at Skyworks Solutions,
Inc., 5260 California Avenue, Irvine, CA 92617,
Attention: Secretary, before the taking of the
vote at the Annual Meeting. If you vote your
shares over the Internet prior to the Annual
Meeting, only your latest Internet vote
submitted prior to the Annual Meeting will be
counted at the Annual Meeting.
Q. How do I virtually attend the Annual
Meeting?
You are invited to attend the Annual Meeting
online by visiting
www.virtualshareholdermeeting.com/SWKS2022,
where you will be able to listen to the
Proxy Statement
69
meeting live, submit questions, and vote. The
meeting will begin at 11:00 a.m. Pacific
Daylight Time. In order to participate in the
meeting, you will need the multi-digit number
included in your proxy card, voter instruction
form, or notice. Instructions on how to attend
and participate online, including how to
demonstrate proof of stock ownership, will be
posted at
www.virtualshareholdermeeting.com/SWKS2022.
Online check-in will begin at 10:45 a.m.
Pacific Daylight Time on May 11, 2022, and
you should allow ample time for the online
check-in proceedings. We will have technicians
standing by and ready to assist you with any
technical difficulties you may have accessing
the virtual meeting starting at 10:45 a.m.
Pacific Daylight Time on May 11, 2022. If you
encounter any difficulties accessing the virtual
meeting during the check-in time or meeting
time, please call the phone number that will be
listed at that time at
www.virtualshareholdermeeting.com/SWKS2022.
Q.
If I vote by proxy, how will my vote be
cast?
The persons named as attorneys-in-fact in this
Proxy Statement, Liam K. Griffin and Robert
J. Terry, were selected by the Board and are
officers of the Company. As attorneys-in-fact,
Messrs. Griffin and Terry will vote any shares
represented at the meeting by proxy. Each
executed proxy card returned by a stockholder
of record or proxy vote recorded via
telephone or the Internet by a stockholder of
record in the manner provided on the
proxy card prior to the taking of the vote at
the Annual Meeting will be voted. Where a
choice has been specified in an executed
proxy with respect to the matters to be acted
upon at the Annual Meeting, the shares
represented by the proxy will be voted in
accordance with the choices specified.
Q. How will my shares be voted if I do not
give specific voting instructions when I
deliver my proxy?
If you are a stockholder of record and deliver
a proxy but do not give specific voting
instructions, then the proxy holders will vote
your shares as recommended by the Board.
If your shares are held in “street name,” your
broker (or other nominee) is required to vote
those shares in accordance with your
instructions. If you do not give instructions to
your broker (or other nominee), your broker (or
other nominee) will only be entitled to vote
your shares with respect to “discretionary”
matters, as described below, but will not be
permitted to vote the shares with respect to
“non-discretionary” matters. If you
beneficially own shares that are held in
“street name” by your broker (or other
nominee), we strongly encourage you to
provide instructions to your broker (or other
nominee) as to how to vote on the election
of directors and all of the Proposals by
signing, dating, and returning to your
broker (or other nominee) the instruction
card provided by your broker (or other
nominee).
If you are a participant in the 401(k) Plan, the
trustee of the 401(k) Plan may not vote your
401(k) Plan shares if the trustee does not
receive voting instructions from you by
11:59 p.m. Eastern Daylight Time on May 6,
2022, unless otherwise required by law.
Q. What is a “broker non-vote”?
A “broker non-vote” occurs when your broker
(or other nominee) submits a proxy for your
shares (because the broker (or other nominee)
has either received instructions from you on
one or more proposals, but not all, or has not
received instructions from you but is entitled
to vote on a particular “discretionary” matter)
but does not indicate a vote “FOR” a
particular proposal because the broker (or
other nominee) either does not have authority
to vote on that proposal and has not received
voting instructions from you or has
70
Proxy Statement
“discretionary” authority on the proposal but
chooses not to exercise it. “Broker non-votes”
are not counted to determine the number of
votes present for the particular proposal, nor
are they counted as votes “FOR” or
“AGAINST” the proposal in question or as
abstentions. We count “broker non-votes” for
the purpose of determining a quorum for
the Annual Meeting. If your shares are held in
“street name” by your broker (or other
nominee), please check the instruction card
provided by your broker (or other nominee) or
contact your broker (or other nominee) to
determine whether you will be able to vote
by telephone or via the Internet.
Q. What vote is required for each matter?
Election of Directors. Pursuant to the
Company’s By-laws, a nominee will be elected
to the Board if the votes cast “FOR” the
nominee’s election at the Annual Meeting
exceed the votes cast “AGAINST” the
nominee’s election (as long as the only
director nominees are those individuals set
forth in this Proxy Statement). Abstentions and
“broker non-votes” will not count as votes
“FOR” or “AGAINST.” If the shares you own
are held in “street name,” your broker (or other
nominee), as the record holder of your
shares, is required to vote your shares
according to your instructions. Proposal 1 is
not considered to be a “discretionary” matter
for certain brokers. If you do not instruct your
broker how to vote with respect to this
item, your broker may not vote your shares
with respect to the election of directors.
In such case, a “broker non-vote” may occur,
which will have no effect on the outcome of
Proposal 1.
Ratification of Independent Registered Public
Accounting Firm. The affirmative vote of a
majority of the shares present, or represented
by proxy, at the Annual Meeting, and entitled
to vote on such matter at the Annual Meeting,
is required to approve Proposal 2. Proposal 2
involves a matter on which a broker (or other
nominee) does have “discretionary” authority
to vote. If you do not instruct your broker
how to vote with respect to this item, your
broker may still vote your shares with
respect to this proposal in its discretion. With
respect to Proposal 2, a vote of “ABSTAIN”
will have the same effect as a vote of
“AGAINST.”
Say-on-Pay Vote; Stockholder Proposal. The
affirmative vote of a majority of the shares
present online, or represented by proxy at the
Annual Meeting, and entitled to vote on
such matter at the Annual Meeting, is required
to approve Proposals 3 and 8. Proposals 3
and 8 are not considered to be “discretionary”
matters for certain brokers. If you do not
instruct your broker how to vote with
respect to these items, your broker may
not vote your shares with respect to these
proposals. In such case, a “broker non-vote”
may occur, which will have no effect on the
outcome of Proposals 3 and 8. Votes that are
marked “ABSTAIN” are counted as present
and entitled to vote with respect to Proposals
3 and 8 and will have the same impact as a
vote that is marked “AGAINST” for purposes
of Proposals 3 and 8.
Approval of Amendments to the Company’s
Restated Certificate of Incorporation.
Approval of Proposals 4, 5, 6, and 7 requires
the affirmative vote of the holders of at least
the following percentages of the shares of
our outstanding common stock, respectively:
80%, 90%, 80%, and 80%. Proposals 4-7 are
not considered to be “discretionary” matters
for certain brokers. If you do not instruct your
broker how to vote with respect to one or
more of these items, your broker may not
vote your shares with respect to such
proposals. In such case, a “broker non-vote”
may occur, which will have the same effect as a
vote that is marked “AGAINST” for purposes
of such proposal. Votes that are marked
“ABSTAIN” as to any of Proposals 4-7 are
counted as present and entitled to vote with
respect to such proposal and will have the
same impact as a vote that is marked
“AGAINST” for purposes of such proposal.
Proxy Statement
71
Q. How does the Board recommend that I
vote?
The Board recommends that you vote:
FOR the election of each of the eight director
nominees (Proposal 1).
FOR the ratification of the selection of KPMG
LLP as our independent registered public
accounting firm for fiscal year 2022
(Proposal 2).
FOR the approval, on a non-binding basis, of
the compensation of our Named Executive
Officers, as described above under
“Compensation Discussion and Analysis,” and
in the executive compensation tables and
accompanying narrative disclosures
(Proposal 3).
FOR the approval of amendments to the
Company’s Restated Certificate of
Incorporation (Proposals 4-7).
AGAINST the approval, on a non-binding
basis, of a stockholder proposal regarding our
stockholder special meeting right (Proposal 8).
Q. How will the votes cast at our Annual
Meeting be counted?
Broadridge Financial Solutions, Inc., and our
independent inspector of elections will
tabulate the votes at the Annual Meeting. The
vote on each matter submitted to stockholders
will be tabulated separately.
your vote (including in connection with the
pursuit or defense of a legal or administrative
action or proceeding), or (2) there is a
contested election for the Board. The inspector
of elections will forward any written comments
that you make on the proxy card to
management without providing your name,
unless you expressly request on your proxy
card that your name be disclosed.
Q. What is the quorum requirement for our
Annual Meeting?
The holders of a majority of the issued and
outstanding stock of the Company present
either in person or by proxy at the Annual
Meeting constitute a quorum for the
transaction of business at the Annual Meeting.
Shares present virtually during the Annual
Meeting will be considered shares of common
stock represented in person at the meeting.
Shares that abstain from voting on any
proposal and “broker non-votes” will be
counted as shares that are present for
purposes of determining whether a quorum
exists at the Annual Meeting. If a “broker non-
vote” occurs with respect to any shares of
the Company’s common stock on any matter,
then those shares will be treated as not
present and not entitled to vote with respect
to that matter (even though those shares are
considered entitled to vote for purposes of
determining whether a quorum exists because
they are entitled to vote on other matters)
and will not be voted.
Q. Where can I find the voting results of our
Meeting?
Q. How do I submit a question at the Annual
Annual Meeting?
We expect to announce the preliminary
voting results at our Annual Meeting. The final
voting results will be reported in a Current
Report on Form 8-K that will be filed with the
SEC within four business days after the end of
our Annual Meeting and will be posted on
our website.
Q. Will my vote be kept confidential?
Yes. We will keep your vote confidential
unless (1) we are required by law to disclose
If you wish to submit a question, beginning at
10:45 a.m. Pacific Daylight Time on May 11,
2022, you may log into the virtual meeting
platform at
www.virtualshareholdermeeting.com/SWKS2022,
type your question into the “Submit a
Question” field, and click “Submit.” Our virtual
meeting will be governed by our Annual
Meeting Rules of Conduct which will include
rules on permissible topics for stockholder
questions and will be posted at
www.virtualshareholdermeeting.com/SWKS2022.
72
Proxy Statement
Questions received from stockholders during
the virtual Annual Meeting that are deemed
appropriate under our Annual Meeting Rules
of Conduct will be posted, along with the
Company’s responses, on the Investor
Relations portion of the Company’s website at
www.skyworksinc.com as soon as practicable
following the Annual Meeting.
Q. When will Skyworks next hold an advisory
vote on the frequency of “say-on-pay”
votes?
Skyworks currently conducts an annual
“say-on-pay” vote. The next advisory vote on
the frequency of “say-on-pay” votes is
expected to be held at our 2023 Annual
Meeting of Stockholders.
Q. What is “householding”?
Some brokers (or other nominees) may be
participating in the practice of “householding”
proxy statements and annual reports. This
means that only one copy of this Proxy
Statement and our Annual Report may have
been sent to multiple stockholders in your
household. If you are a stockholder and your
household or address has received only one
Annual Report and one Proxy Statement, the
Company will promptly deliver a separate
copy of the Annual Report and the Proxy
Statement to you, upon your written request
to Skyworks Solutions, Inc., 5260 California
Avenue, Irvine, CA 92617, Attention: Investor
Relations, or oral request to Investor
Relations at (949) 231-3433. If you would like
to receive separate copies of our Annual
Report and Proxy Statement in the future, you
should direct such request to your broker
(or other nominee). Even if your household or
address has received only one Annual
Report and one Proxy Statement, a separate
proxy card should have been provided for
each stockholder account. Each individual
proxy card should be signed, dated, and
returned in the postage-prepaid envelope (or
completed and submitted by telephone or
via the Internet, as described on the proxy
card). If your household has received multiple
copies of our Annual Report and Proxy
Statement, you can request the delivery of
single copies in the future by contacting your
broker (or other nominee), or the Company
at the address or telephone number above.
Proxy Statement
73
OTHER PROPOSED ACTION
As of the date of this Proxy Statement, the
directors know of no other business that is
expected to come before the Annual Meeting.
However, if any other business should be properly
OTHER MATTERS
Solicitation Expenses
presented to the Annual Meeting, the persons
named as proxies will vote in accordance with their
judgment with respect to such matters.
Skyworks will bear the expenses of the preparation
of the proxy materials and the solicitation by the
Board of proxies. Proxies may be solicited on
behalf of the Company in person or by telephone,
e-mail, facsimile, or other electronic means by
directors, officers, or employees of the Company,
who will receive no additional compensation for
any such services. We have retained D.F. King &
Co. to assist in the solicitation of proxies, at a
total cost to the Company of approximately
$30,000 to $50,000. This increase in expense
from prior years results from the Company’s
decision to solicit stockholder votes for the Annual
Meeting more actively than it has done so in the
past, as described above under “Introduction to
Proposals 4-7: Elimination of Supermajority Vote
Provisions from Our Charter.”
Electronic Delivery of Proxy Materials
We are able to distribute our Annual Report and
this Proxy Statement to our stockholders in a fast
and efficient manner via the Internet. This
reduces the amount of paper delivered to a
stockholder’s address. Stockholders may elect to
view all future annual reports, proxy statements,
and notices on the Internet instead of receiving
them by mail. You may make this election when
voting your proxy this year. Simply follow the
instructions to vote via the Internet to register your
consent. Your election to view proxy materials
online is perpetual unless you revoke it later. Future
proxy cards will contain the Internet website
address and instructions to view the materials.
You will continue to have the option to vote your
shares by telephone, mail, or via the Internet.
Annual Report on Form 10-K and Stockholder List
A copy of our 2021 Annual Report accompanies
this Proxy Statement. You also may obtain, free of
charge, a copy of the Company’s Annual Report
on Form 10-K for fiscal year 2021, as filed with the
SEC, via the Company’s website at
www.skyworksinc.com, or upon written request
addressed to Investor Relations:
Skyworks Solutions, Inc.
5260 California Avenue
Irvine, CA 92617
A list of stockholders of record as of March 17,
2022, will be available for inspection during
ordinary business hours at our executive offices in
Irvine, CA, from April 29, 2022, to May 11, 2022,
as well as online during our Annual Meeting.
74
Proxy Statement
Stockholder Proposals
Proposals to be considered for inclusion in the
proxy materials for the Company’s 2023 Annual
Meeting of Stockholders pursuant to Rule 14a-8
under the Exchange Act must meet the
requirements of Rule 14a-8 and be delivered in
writing to the General Counsel and Secretary of
the Company at its executive offices at 5260
California Avenue, Irvine, CA 92617, no later than
November 25, 2022. The submission of a
stockholder proposal does not guarantee that it
will be included in the proxy materials for the
Company’s 2023 Annual Meeting.
According to the applicable provisions of our
By-laws, if a stockholder wishes to present a
proposal at our 2023 Annual Meeting outside the
processes of Rule 14a-8, with such proposal not
to be considered for inclusion in the proxy
materials for such meeting, then the stockholder
must give written notice to the Secretary of the
Company at the address noted above no earlier
than the close of business on January 11, 2023,
and no later than the close of business on
February 10, 2023. In the event that the 2023
Annual Meeting is held more than thirty (30) days
before or after the first anniversary of the
Company’s 2022 Annual Meeting, then the
required notice must be delivered in writing to
the Secretary of the Company at the address above
no earlier than 120 days prior to the date of the
2023 Annual Meeting and no later than the later of
90 days prior to the 2023 Annual Meeting or the
10th day following the day on which the public
announcement of the date of the 2023 Annual
Meeting is first made by the Company. A proposal
that is submitted outside of these time periods
will not be considered to be timely and, pursuant
to Rule 14a-4(c)(1) under the Exchange Act and
if a stockholder properly brings the proposal
before the meeting, the proxies that management
solicits for that meeting will have “discretionary”
authority to vote on the stockholder’s proposal.
Even if a stockholder makes timely notification, the
proxies may still exercise “discretionary” authority
in accordance with the SEC’s proxy rules.
Our Board encourages stockholders to attend
the Annual Meeting online. Whether or not
you plan to attend, you are urged to submit a
proxy promptly in one of the following ways:
• by completing and submitting your proxy
via the Internet by visiting the website
address listed on the proxy card;
• by completing and submitting your proxy
using the toll-free telephone number listed
on the proxy card; or
• by completing, signing, and dating the
proxy card and returning it in the postage-
prepaid envelope provided for that
purpose.
A prompt response will greatly facilitate
arrangements for the meeting and your
cooperation will be appreciated.
Proxy Statement
75
Appendix A:
PROVISIONS OF CHARTER SUBJECT TO POTENTIAL
AMENDMENT
The following provisions of our Charter are those implicated by Proposals 4-7. In this Appendix A,
deletions and additions that would be effected by the proposed amendments are indicated by
strikethroughs and underlining, respectively:
SEVENTH:
The business and affairs of the Corporation shall be managed by or under the direction of the
1.
Board of Directors. The number of directors shall be fixed from time to time exclusively by the Board of
Directors pursuant to a resolution adopted by a majority of the total number of authorized directors
(whether or not there exist any vacancies in previously authorized directorships at the time any such
resolution is presented to the Board of Directors for adoption).
2.
Except as otherwise provided by law and except as hereinafter otherwise provided for filling
vacancies, the directors of the Corporation shall be elected at each annual meeting of stockholders.
Each director so elected shall hold office until the annual meeting of stockholders following the annual
meeting at which such director was elected and until a successor is duly elected and qualified, or until such
director’s earlier death, resignation or removal. The terms of office of each director serving the
Corporation as of immediately prior to the effectiveness of the filing of this Certificate of Amendment
under the General Corporation Law of the State of Delaware (the “Effective Time”) whose term of office
did not expire at the 2011 annual meeting of stockholders of the Corporation shall nonetheless expire at
the Effective Time, such that the directors elected at the 2011 annual meeting of stockholders of the
Corporation effective upon the Effective Time to succeed such directors shall commence their term of
office at the Effective Time, for a term expiring at the next annual meeting of stockholders, with each such
director to hold office until his or her successor shall have been duly elected and qualified.
Vacancies resulting from any increase in the authorized number of directors or any vacancies in the
3.
Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or
other cause may be filled only by a majority vote of the directors then in office, though less than a
quorum, or by a sole remaining director and directors so chosen shall hold office for a term expiring at
the next annual meeting of stockholders to occur following their election. No decrease in the number of
authorized directors shall shorten the term of any incumbent director.
4.
Subject to the rights of the holders of any series of Preferred Stock or any other series or class of
stock, as provided herein or in any Preferred Stock Designation, to elect additional directors under specific
circumstances, any director may be removed from office at any time, with or without cause by the
affirmative vote of the holders of at least a majority of the shares of all classes of stock of the Corporation
entitled to vote for the election of directors, considered for the purposes of this Article Seventh as one
class of stock.
5. No director of the Corporation shall be liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty
of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware
General Corporation Law, or (iv) for any transaction from which the director derived an improper personal
benefit. No repeal or modification of this paragraph, directly or by adoption of an inconsistent provision
76
Appendix A
of this Certificate of Incorporation, by the stockholders of the Corporation shall be effective with respect
to any cause of action, suit, claim or other matter that, but for this paragraph, would accrue or arise prior to
such repeal or modification.
TENTH:
1. AMENDMENT OF CERTIFICATE OF INCORPORATION. The corporation reserves the right to
amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner
hereafter set forth, and all rights conferred upon stockholders herein are granted subject to this
reservation.
A. Except as provided in paragraphs 1(B) and (2) of this Article Tenth and in Article Eleventh, any
provision of this Certificate of Incorporation may be amended, altered, changed or repealed in
the manner now or hereafter prescribed by the statutes of the State of Delaware.
B. Notwithstanding any of the provisions of this Certificate of Incorporation or any provision of law
which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of
holders of any particular class or series of stock of the Corporation required by law or this
Certificate of Incorporation, the affirmative vote of the holders of at least the following percentages
of the shares of all classes of stock of the Corporation entitled to vote for the election of directors,
considered for this purpose as one class of stock, shall be required to amend, alter, change or
repeal, or to adopt any provisions inconsistent with, the indicated provisions of this Certificate of
Incorporation:
(i) 80% (1) in the case of Article Seventh orand (2) in the case of Article Thirteenth; and
(ii) 90% (3) in the case of Article Twelfth.
The foregoing paragraphs 1(B)(i) and (ii) of this Article Tenth may not be amended so as to alter the
stockholder vote required by either such paragraph or to adopt any provisions inconsistent with these
provisions, except by an amendment that is itself approved by the affirmative vote of the holders of at least
the percentage of all shares of all classes of stock of the Corporation as is required to amend the
provision or provisions of this Certificate of Incorporation to which such amendment relates.
2.
BY-LAWS. The Board of Directors is expressly authorized to adopt, alter, amend and repeal the
By-laws of the Corporation, in any manner not inconsistent with the laws of the State of Delaware or of
the Certificate of Incorporation of the Corporation, subject to the power of the holders of capital stock of
the Corporation to adopt, alter or repeal the By-laws made by the Board of Directors; provided, that
any such adoption, amendment or repeal by stockholders shall require the affirmative vote of the holders
of at least a majority of the shares of all classes of stock of the Corporation entitled to vote for the
election of directors, considered for this purpose as one class of stock. This paragraph 2 of Article Tenth
may not be amended so as to alter the stockholder vote specified hereby, nor may any provisions
inconsistent with these provisions be adopted, except by an amendment that is itself approved by the
affirmative vote of the holders of at least a majority of the shares of all classes of stock of the Corporation
entitled to vote for the election of directors, considered for this purpose as one class of stock.
ELEVENTH:
1.
Except as set forth in paragraph 2 of this Article Eleventh, the affirmative vote or consent of the
holders of 80%at least a majority of the shares of all classes of stock of the Corporation entitled to vote
(1)
(2)
(3)
If Proposal 6 is approved, insert “a majority”; otherwise retain current threshold of 80%.
If Proposal 7 is approved, insert “a majority”; otherwise retain current threshold of 80%.
If Proposal 5 is approved, insert “a majority”; otherwise retain current threshold of 90%.
Appendix A
77
for the election of directors, considered for the purposes of this Article as one class, shall be required
(a) for the adoption of any agreement for the merger or consolidation of the Corporation with or into any
Other Corporation (as hereinafter defined), or (b) to authorize any sale, lease, exchange, mortgage,
pledge or other disposition of all, or substantially all of the assets of the Corporation or any Subsidiary
(as hereinafter defined) to any Other Corporation, or (c) to authorize the issuance or transfer by the
Corporation of any Substantial Amount (as hereinafter defined) of securities of the Corporation in
exchange for the securities or assets of any Other Corporation. Such affirmative vote or consent shall be
in addition to the vote or consent of the holders of the stock of the Corporation otherwise required by law,
the Certificate of Incorporation of the Corporation or any agreement or contract to which the Corporation
is a party.
2.
The provisions of paragraph 1 of this Article Eleventh shall not be applicable to any transaction
described therein if such transaction is approved by resolution of the Board of Directors of the Corporation;
provided that a majority of the members of the Board of Directors voting for the approval of such
transaction were duly elected and acting members of the Board of Directors prior to the time any such
Other Corporation may have become a Beneficial Owner (as hereinafter defined) of 5% or more of the
shares of stock of the Corporation entitled to vote for the election of directors.
3.
For the purposes of paragraph 2 of this Article, the Board of Directors shall have the power and
duty to determine for the purposes of this Article Eleventh, on the basis of information known to such
Board, if and when any Other Corporation is the Beneficial Owner of 5% or more of the outstanding shares
of stock of the Corporation entitled to vote for the election of directors. Any such determination shall
be conclusive and binding for all purposes of this Article Eleventh.
4. As used in this Article Eleventh, the following terms shall have the meanings indicated:
“Other Corporation” means any person, firm, corporation or other entity, other than a subsidiary of the
Corporation.
“Subsidiary” means any corporation in which the Corporation owns, directly or indirectly, more than 50%
of the voting securities.
“Substantial Amount” means any securities of the Corporation having a then fair market value of more
than $500,000.
An Other Corporation (as defined above) shall be deemed to be the “Beneficial Owner” of stock if such
Other Corporation or any “affiliate” or “associate” of such Other Corporation (as those terms are defined in
Rule 12b-2 promulgated under the Securities Exchange Act of 1934 (15 U.S.C. 78 aaa et seq.), as
amended from time to time), directly or indirectly, controls the voting of such stock or has any options,
warrants, conversion or other rights to acquire such stock.
This Article Eleventh may not be amended, revised or revoked, in whole or in part, except by the
5.
affirmative vote or consent of the holders of 80%at least a majority of the shares of all classes of stock of
the Corporation entitled to vote for the election of directors, considered for the purposes of this
Article Eleventh as one class of stock.
TWELFTH:
1.
The following definitions shall apply for the purpose of this Article Twelfth only:
A.
“Announcement Date” shall mean the date of first public announcement of the proposal of a
Business Combination.
78
Appendix A
B.
“Business Combination” shall mean:
(i) any merger or consolidation of the Corporation or any Subsidiary with (a) any Related
Person, or (b) any other corporation (whether or not itself a Related Person) which is, or after
such merger or consolidation would be, an Affiliate of a Related Person; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction
or a series of transactions) to or with any Related Person or any Affiliate of any Related
Person of any assets of the Corporation or any Subsidiary having an aggregate Fair Market
Value of $500,000 or more; or
(iii) the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series
of transactions) of any securities of the Corporation or any Subsidiary to any Related Person or
any Affiliate of any Related Person in exchange for cash, securities or other property (or a
combination thereof) having an aggregate Fair Market Value of $500,000 or more; or
(iv) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation
proposed by or on behalf of any Related Person or any Affiliate of any Related Person; or
(v) any reclassification of securities (including any reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or
any other transaction (whether or not with or into or otherwise involving the Related Person)
which has the effect, directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by any Related Person or any Affiliate of any
Related Person.
C.
“Consideration Received” shall mean the amount of cash and the Fair Market Value, as of the
Consummation Date, of consideration other than cash received by the stockholder. In the event
of any Business Combination in which the Corporation survives, the consideration other than cash
shall include shares of any class of outstanding Voting Stock retained by the holders of such
shares.
D.
“Consummation Date” shall mean the date upon which the Business Combination is consummated.
E.
“Continuing Director” shall mean any member of the Board of Directors of the Corporation who
is unaffiliated with the Related Person and who was a member of the Board of Directors prior to the
time that the Related Person became a Related Person, and any successor of a Continuing
Director who is unaffiliated with the Related Person and is recommended to succeed a Continuing
Director by a majority of the Continuing Directors then on the Board of Directors.
F.
“Determination Date” shall mean the date upon which a Related Person became a Related
Person.
G.
“Exchange Act” shall mean the Securities Exchange Act of 1934 as in effect on May 1, 1983.
H.
“Fair Market Value” shall mean: (i) in the case of stock, the highest closing sale price during the
30-day period immediately preceding the date in question of a share of such stock on the principal
United States securities exchange registered under the Exchange Act on which such stock is
listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period preceding the date in question on the
Appendix A
79
National Association of Securities Dealers, Inc. Automated Quotations System or any system then
in use or, if no such quotations are available, the fair market value on the date in question of a
share of such stock as determined by the Board of Directors in good faith; and (ii) in the case of
property other than cash or stock, the fair market value of such property on the date in question as
determined by the Board of Directors in good faith.
“Related Person” shall mean any individual, firm, corporation or other entity (other than the
Corporation or any Subsidiary) which, together with its Affiliates and Associates (as such terms
are defined in Rule 12b-2 under the Exchange Act) and with any other individual, firm, corporation
or other entity (other than the Corporation or any Subsidiary) with which it or they have any
agreement, arrangement or understanding with respect to acquiring, holding or disposing of
Voting Stock, beneficially owns (as defined in Rule 13d-3 of the Exchange Act, except that such
term shall include any Voting Stock which such person has the right to acquire, whether or not such
right may be exercised within 60 days), directly or indirectly, more than twenty percent of the
voting power of the outstanding Voting Stock.
“Subsidiary” shall mean any corporation in which a majority of the capital stock entitled to vote
generally in the election of directors is owned, directly or indirectly, by the Corporation.
“Voting Stock” shall mean all of the then outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of directors.
I.
J.
K.
2.
In addition to the affirmative vote otherwise required by law or any provision of this Certificate of
Incorporation (including without limitation Article Eleventh), except as otherwise provided in paragraph 3,
any Business Combination shall require the affirmative vote of the holders of 90%at least a majority of
all Voting Stock, voting together as a single class.
Such affirmative vote shall be required notwithstanding any other provision of this Certificate of
Incorporation or any provision of law or of any agreement with any national securities exchange which
might otherwise permit a lesser vote or no vote, and such affirmative vote shall be required in addition to
any affirmative vote of the holders of any particular class or series of the Voting Stock required by law or
by this Certificate of Incorporation.
3.
The provisions of paragraph 2 of this Article Twelfth shall not be applicable to any particular
Business Combination, and such Business Combination shall require only such affirmative vote as is
required by law, any other provision of this Certificate of Incorporation (including Article Eleventh), or
any agreement with any national securities exchange, if, in the case of a Business Combination that does
not involve any Consideration Received by the stockholders of the Corporation, solely in their respective
capacities as stockholders of the Corporation, the condition specified in the following paragraph A is met,
or, in the case of any other Business Combination, the conditions specified in either of the following
paragraphs A and B are met:
A. The Business Combination shall have been approved by a majority of the Continuing Directors,
it being understood that this condition shall not be capable of satisfaction unless there is at least
one Continuing Director.
B. All of the following conditions shall have been met:
(i) The form of the Consideration Received by holders of shares of a particular class of
outstanding Voting Stock shall be in cash or in the same form as the Related Person has paid
for shares of such class of Voting Stock within the two-year period ending on and including
80
Appendix A
the Determination Date. If, within such two-year period, the Related Person has paid for
shares of any class of Voting Stock with varying forms of consideration, the form of
Consideration Received per share by holders of shares of such class of Voting Stock shall be
either cash or the form used to acquire the largest number of shares of such class of Voting
Stock acquired by the Related Person within such two-year period.
(ii) The aggregate amount of Consideration Received per share by holders of each class of
Voting Stock in such Business Combination shall be at least equal to the higher of the
following (it being intended that the requirements of this paragraph B(ii) shall be required to
be met with respect to every such class of Voting Stock outstanding, whether or not the
Related Person has previously acquired any shares of that particular class of Voting Stock):
(a)
(if applicable) the highest per share price (including any brokerage commissions,
transfer taxes and soliciting dealers’ fees) paid by the Related Person for any shares of
that class of Voting Stock acquired by it within the two-year period immediately prior to
the Announcement Date or in the transaction in which it became a Related Person,
whichever is higher; or
(b) the Fair Market Value per share of such class of Voting Stock on the Announcement
Date; or in the case of any class of preferred stock, the highest preferential amount per
share to which the holders of shares of such class of Voting Stock are entitled in the event
of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation.
(iii) After such Related Person has become a Related Person and prior to the consummation of
such Business Combination: (a) except as approved by a majority of the Continuing Directors,
there shall have been no failure to declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on any outstanding preferred stock; (b) there
shall have been (I) no reduction in the annual rate of dividends paid on the Common Stock
(except as necessary to reflect any subdivision of the Common Stock), except as approved by
a majority of the Continuing Directors, and (II) an increase in such annual rate of dividends
as necessary to reflect any reclassification (including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the effect of reducing the number of
outstanding shares of the Common Stock, unless the failure so to increase such annual rate
is approved by a majority of the Continuing Directors; and (c) such Related Person shall have
not become the beneficial owner of any newly issued share of Voting Stock directly or
indirectly from the Corporation except as part of the transaction which results in such Related
Person becoming a Related Person.
(iv) After such Related Person has become a Related Person, such Related Person shall not have
received the benefit, directly or indirectly (except proportionately, solely in such Related
Person’s capacity as a stockholder of the Corporation), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or other tax advantages provided by
the Corporation, whether in anticipation of or in connection with such Business Combination
or otherwise.
(v) A proxy or information statement describing the proposed Business Combination and
complying with the requirements of the Exchange Act and the rules and regulations
thereunder (or any subsequent provisions replacing such act, rules or regulations) shall be
mailed to all stockholders of the Corporation at least 30 days prior to the consummation of
such Business Combination (whether or not such proxy or information statement is required to
be mailed pursuant to the Exchange Act or subsequent provisions). Such proxy or
Appendix A
81
information statement shall contain on the front thereof, prominently displayed, any
recommendation as to the advisability or inadvisability of the Business Combination which
the Continuing Directors, or any of them, may have furnished in writing to the Board of
Directors.
4. A majority of the total number of authorized directors (whether or not there exist any vacancies in
previously authorized directorships at the time any determination is to be made by the Board of Directors)
shall have the power and duty to determine, on the basis of information known to them after reasonable
inquiry, all facts necessary to determine compliance with this Article Twelfth including, without limitation,
(1) whether a person is a Related Person, (2) the number of shares of Voting Stock beneficially owned by
any person, (3) whether the applicable conditions set forth in paragraph (2) of Section C have been
met with respect to any Business Combination, and (4) whether the assets which are the subject of any
Business Combination or the Consideration Received for the issuance or transfer of securities by the
Corporation or any Subsidiary in any Business Combination have an aggregate Fair Market Value of
$500,000 or more.
5. Nothing contained in this Article Twelfth shall be construed to relieve any Related Person from any
fiduciary obligation imposed by law.
THIRTEENTH: Any action required or permitted to be taken by the stockholders of the Corporation
must be effected at an annual or special meeting of stockholders of the Corporation and may not be
effected by any consent in writing by such stockholders.
82
Appendix A
Appendix B:
UNAUDITED RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURES
GAAP operating income
Share-based compensation expense(a)
Acquisition-related expenses
Amortization of acquisition-related intangibles
Settlements, gains, losses, and impairments
Restructuring and other charges
Non-GAAP operating income
GAAP operating margin %
Non-GAAP operating margin %
Year Ended
Oct. 1, 2021
(In millions, except
per share amounts)
1,612.7
191.9
60.2
75.6
10.9
1.8
$1,953.1
31.6%
38.2%
Oct. 1, 2021 Oct. 2, 2020 Sep. 28, 2018* Oct. 2, 2015* Sep. 28, 2012*
Year Ended
GAAP net income per share, diluted
$ 8.97
$ 4.80
Share-based compensation expense(a)
Acquisition-related expenses (benefit)
Amortization of acquisition-related intangibles
Settlements, gains, losses, and impairments
Restructuring and other charges
Deferred executive compensation benefit
Interest expense on seller-financed debt
1.15
0.36
0.45
0.08
0.01
—
—
0.92
0.01
0.21
0.26
0.01
—
—
Tax adjustments(b)
(0.52)
(0.08)
$ 5.01
0.59
(0.01)
0.11
0.01
0.02
(0.01)
—
1.50
$ 4.10
$ 1.05
0.51
0.04
0.17
0.01
0.02
—
0.01
0.41
0.38
0.05
0.17
0.03
0.04
—
—
0.18
$1.90
Non-GAAP net income per share, diluted
$10.50
$6.13
$7.22
$5.27
*
(a)
Prior period amounts have been reclassified to conform to later period presentation.
The following table summarizes the expense recognized in accordance with ASC 718 — Compensation, Stock Compensation
(in millions):
Year Ended
Cost of goods sold
Research and development
Selling, general, and administrative
Oct. 1, 2021 Oct. 2, 2020 Sep. 28, 2018 Oct. 2, 2015 Sep. 28, 2012
$14.4
$28.9
$14.5
$23.2
$ 9.4
85.7
77.3
68.7
64.7
42.6
50.8
45.5
39.9
28.0
34.8
(b)
Included in these amounts for the fiscal year ended September 28, 2018, is a one-time charge of $224.6 million related to
the mandatory deemed repatriation tax on foreign earnings and a one-time charge of $18.3 million related to the revaluation
of deferred tax assets and liabilities related to tax reform.
Appendix B
83
Discussion Regarding the Use of Non-GAAP Financial Measures
Our annual report and this proxy statement
contain some or all of the following financial
measures that have not been calculated in
accordance with United States Generally Accepted
Accounting Principles (“GAAP”): (i) non-GAAP
operating income and operating margin, and
(ii) non-GAAP diluted earnings per share. As set
forth in the “Unaudited Reconciliations of Non-
GAAP Financial Measures” table above, we derive
such non-GAAP financial measures by excluding
certain expenses and other items from the
respective GAAP financial measure that is most
directly comparable to each non-GAAP financial
measure. Management uses these non-GAAP
financial measures to evaluate our operating
performance and compare it against past periods,
make operating decisions, forecast for future
periods, compare our operating performance
against peer companies and determine payments
under certain compensation programs. These
non-GAAP financial measures provide
management with additional means to understand
and evaluate the operating results and trends in
our ongoing business by eliminating certain
non-recurring expenses and other items that
management believes might otherwise make
comparisons of our ongoing business with prior
periods and competitors more difficult, obscure
trends in ongoing operations or reduce
management’s ability to make forecasts.
We provide investors with non-GAAP operating
income and operating margin and non-GAAP
diluted earnings per share because we believe it
is important for investors to be able to closely
monitor and understand changes in our ability to
generate income from ongoing business
operations. We believe these non-GAAP financial
measures give investors an additional method
to evaluate historical operating performance and
identify trends, an additional means of evaluating
period-over-period operating performance and a
method to facilitate certain comparisons of our
operating results to those of our peer companies.
We also believe that providing non-GAAP
operating income and operating margin allows
investors to assess the extent to which our
ongoing operations impact our overall financial
performance. We further believe that providing
non-GAAP diluted earnings per share allows
investors to assess the overall financial
performance of our ongoing operations by
eliminating the impact of share-based
compensation expense, acquisition-related
expenses, amortization of acquisition-related
intangibles, settlements, gains, losses, and
impairments, restructuring-related charges, and
certain tax items which may not occur in each
period presented and which may represent
non-cash items unrelated to our ongoing
operations. We believe that disclosing these non-
GAAP financial measures contributes to
enhanced financial reporting transparency and
provides investors with added clarity about
complex financial performance measures.
We calculate non-GAAP operating income by
excluding from GAAP operating income, share-
based compensation expense, acquisition-related
expenses, amortization of acquisition-related
intangibles, settlements, gains, losses, and
impairments, and restructuring-related charges.
We calculate non-GAAP diluted earnings per share
by excluding from GAAP diluted earnings per
share, share-based compensation expense,
acquisition-related expenses, amortization of
acquisition-related intangibles, settlements, gains,
losses, and impairments, restructuring-related
charges, and certain tax items.
We exclude the items identified above from the
respective non-GAAP financial measure
referenced above for the reasons set forth with
respect to each such excluded item below:
Share-Based Compensation — because (1) the
total amount of expense is partially outside of our
control because it is based on factors such as
stock price volatility and interest rates, which may
be unrelated to our performance during the
period in which the expense is incurred, (2) it is an
expense based upon a valuation methodology
premised on assumptions that vary over time, and
84
Appendix B
(3) the amount of the expense can vary significantly
between companies due to factors that can be
outside of the control of such companies.
Acquisition-Related Expenses — including such
items as, when applicable, amortization of
acquired intangible assets, fair value adjustments
to contingent consideration, fair value charges
incurred upon the sale of acquired inventory, and
acquisition-related expenses, because they are
not considered by management in making
operating decisions and we believe that such
expenses do not have a direct correlation to our
future business operations and thereby including
such charges does not necessarily reflect the
performance of our ongoing operations for the
period in which such charges or reversals are
incurred.
Restructuring-Related Charges — because these
charges have no direct correlation to our future
business operations and including such charges or
reversals does not necessarily reflect the
performance of our ongoing operations for the
period in which such charges or reversals are
incurred.
Settlements, Gains, Losses, and Impairments —
because such settlements, gains, losses, and
impairments (1) are not considered by
management in making operating decisions,
(2) are infrequent in nature, (3) are generally not
directly controlled by management, (4) do not
necessarily reflect the performance of our ongoing
operations for the period in which such charges
are recognized and/or (5) can vary significantly in
amount between companies and make
comparisons less reliable.
Certain Income Tax Items — including certain
deferred tax charges and benefits that do not
result in a current tax payment or tax refund and
other adjustments, including but not limited
to, items unrelated to the current fiscal year or
that are not indicative of our ongoing business
operations.
The non-GAAP financial measures presented in
the table above should not be considered in
isolation and are not an alternative for the
respective GAAP financial measure that is most
directly comparable to each such non-GAAP
financial measure. Investors are cautioned against
placing undue reliance on these non-GAAP
financial measures and are urged to review and
consider carefully the adjustments made by
management to the most directly comparable
GAAP financial measures to arrive at these non-
GAAP financial measures. Non-GAAP financial
measures may have limited value as analytical
tools because they may exclude certain expenses
that some investors consider important in
evaluating our operating performance or ongoing
business performance. Further, non-GAAP
financial measures are likely to have limited value
for purposes of drawing comparisons between
companies as a result of different companies
potentially calculating similarly titled non-GAAP
financial measures in different ways because non-
GAAP measures are not based on any
comprehensive set of accounting rules or
principles.
Appendix B
85
(This page has been left blank intentionally.)
FISCAL YEAR 2021 ANNUAL REPORT AND
CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
Cautionary Statement . . . . . . . . . . .
Introduction . . . . . . . . . . . . . . . . . . . .
Industry Background . . . . . . . . . . .
Business Overview . . . . . . . . . . . . .
Management’s Discussion and
Analysis of Financial Condition
and Results of Operations . . . . . .
89
91
92
93
96
Quantitative and Qualitative
Disclosures About Market Risk . . 105
Consolidated Financial
Statements
Consolidated Statements of Operations
107
Consolidated Statements of
Comprehensive Income . . . . . . . . . . . .
108
Consolidated Balance Sheets . . . . . . . .
109
Consolidated Statements of Cash Flows
110
Consolidated Statements of
Stockholders’ Equity . . . . . . . . . . . . . . .
111
Notes to Consolidated Financial
Statements . . . . . . . . . . . . . . . . . . . . . 112
Report of Independent
Registered Public Accounting
Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure . . . . . . . . 142
Management’s Annual Report on
Internal Control over Financial
Reporting . . . . . . . . . . . . . . . . . . . . . . 142
Market for Registrant’s Common
Equity, Related Stockholder
Matters and Issuer Purchases of
Equity Securities . . . . . . . . . . . . . . . . 143
Comparative Stock Performance
Graph . . . . . . . . . . . . . . . . . . . . . . . . . . 144
CAUTIONARY STATEMENT
This Annual Report contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as
amended (the “Exchange Act”), and is subject to the “safe harbor” created by those sections. Any
statements that are not statements of historical fact should be considered to be forward-looking
statements. Words such as “anticipates”, “believes”, “continue”, “could”, “estimates”, “expects”, “intends”,
“may”, “plans”, “potential”, “predicts”, “projects”,
”seek”, “should”, “targets”, “will”, “would”, and similar
expressions or variations or negatives of such words are intended to identify forward-looking statements,
but are not the exclusive means of identifying forward-looking statements in this Annual Report.
Additionally, forward-looking statements include, but are not limited to:
• our plans to develop and market new products, enhancements, or technologies and the timing of
these development and marketing plans;
• our estimates regarding our capital requirements and our needs for additional financing;
• our estimates of our expenses, future revenues, and profitability;
• our estimates of the possible impacts of the COVID-19 pandemic;
• our estimates of the size of the markets for our products and services;
• our expectations related to the rate and degree of market acceptance of our products; and
• our estimates of the success of other competing technologies that may become available.
Although forward-looking statements in this Annual Report reflect the good faith judgment of our
management, such statements can only be based on facts and factors currently known and understood
by us. Consequently, forward-looking statements involve inherent risks and uncertainties, and actual
financial results and outcomes may differ materially and adversely from the results and outcomes discussed
in or anticipated by the forward-looking statements. A number of important factors could cause actual
financial results to differ materially and adversely from those in the forward-looking statements. We urge
you to consider the risks and uncertainties discussed elsewhere in this report and in the other
documents filed by us with the Securities and Exchange Commission (“SEC”) in evaluating our forward-
looking statements. We have no plans, and undertake no obligation, to revise or update our forward-
looking statements to reflect any event or circumstance that may arise after the date of this report. We
caution readers not to place undue reliance upon any such forward-looking statements, which speak only
as of the date made.
This Annual Report also contains estimates made by independent parties and by us relating to market
size and growth and other industry data. These estimates involve a number of assumptions and limitations
and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions,
and estimates of our future performance and the future performance of the industries in which we
operate are necessarily subject to a high degree of uncertainty and risk due to a variety of important
factors, including those described in “Management’s Discussion and Analysis of Financial Condition and
Results of Operations”. These and other factors could cause results to differ materially and adversely
from those expressed in the estimates made by the independent parties and by us.
In this document, the words “we”, “our”, “ours”, “us”, “Skyworks”, and “the Company” refer only to Skyworks
Solutions, Inc., and its consolidated subsidiaries and not any other person or entity. In addition, the
following is a list of industry terms that may be referenced throughout the document:
• 5G (Fifth Generation): next-generation cellular network technology
• ASoC (Analog System on Chip): combines the required electronic circuits of various computer
components into a single, integrated chip
Annual Report
89
• BAW (Bulk Acoustic Wave): electrical input signal is converted to an acoustic wave for filtering and
converted back into an electrical signal by a metal-piezo-metal vertical structure
• DC (Direct Current): unidirectional flow of an electrical charge
• IoT (Internet of Things): the interconnection of uniquely identifiable embedded computing
devices within the existing internet infrastructure
• LED (Light Emitting Diode): a two-lead semiconductor light source
• MIMO (Multiple In, Multiple Out): a method for multiplying the capacity of a radio link using
multiple transmission and receiving antennas to exploit multipath propagation; more commonly, it
refers to LTE, 5G, and Wi-Fi techniques to send more than one data signal (also known as data
layers) with encoded information to increase capacity in modern telecommunications systems
• RF (Radio Frequency): electromagnetic wave frequencies that lie in the range extending from
around 3 kHz to 300 GHz
• SAW (Surface Acoustic Wave): electrical input signal is converted to an acoustic wave for filtering
and converted back into an electrical signal by interdigitated transducers on a piezoelectric substrate
• TC-SAW (Temperature Compensated Surface Acoustic Wave): SAW filters that have been designed
to reduce shift in frequency over temperature
Skyworks and the Skyworks symbol are trademarks or registered trademarks of Skyworks Solutions, Inc.
or its subsidiaries in the United States and other countries. Third-party brands and names are for
identification purposes only and are the property of their respective owners.
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Annual Report
INTRODUCTION
Skyworks Solutions, Inc., together with its consolidated subsidiaries (“Skyworks” or the “Company”), is
empowering the wireless networking revolution. The Company’s highly innovative analog semiconductors
are connecting people, places, and things, spanning a number of new and previously unimagined
applications within the aerospace, automotive, broadband, cellular infrastructure, connected home,
entertainment and gaming, industrial, medical, military, smartphone, tablet, and wearable markets.
Our key customers include Amazon, Apple Inc. (“Apple”), Arris, Bose, Cisco, DJI, Ericsson, Foxconn,
Garmin, Gemalto (a Thales company), General Electric, Fibocom, Google, Honeywell, Itron, Lenovo, LG
Electronics, Microsoft, Motorola, Netgear, Northrop Grumman, OPPO, Rockwell Collins, Samsung, Sierra
Wireless, Sonos, Technicolor, VIVO, Xiaomi, and ZTE. Our competitors include Analog Devices, Broadcom,
Cirrus Logic, Murata Manufacturing, NXP Semiconductors, Qorvo, and Qualcomm.
We operate worldwide with engineering, manufacturing, sales, and service facilities throughout Asia,
Europe, and North America. Our Internet address is www.skyworksinc.com. We make available free of
charge on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, and amendments to those reports as soon as practicable after we electronically submit such
material to the SEC. The information contained on our website is not incorporated by reference in this
Annual Report. Our SEC filings are also available to the public at www.sec.gov.
In July 2021, we acquired the Infrastructure and Automotive business of Silicon Laboratories Inc. (the
“Acquisition”). The Acquisition accelerates our expansion into high-growth market segments, including
electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical
data communication, data center, automotive, smart home, and several other applications.
Annual Report
91
INDUSTRY BACKGROUND
Wireless connectivity is expanding on a global basis, underscoring the critical nature of our mission of
connecting everyone and everything, all the time. A widening range of use cases is driving an insatiable
demand for ubiquitous wireless data across a broad array of applications, including remote work,
entertainment, fitness, virtual education and meetings, telemedicine, factory automation, connected
cars, mobile internet, cloud gaming, and AR/VR technology. This results in an extraordinary need for faster
speeds, increased bandwidth and capacity, significantly lower latency, and more reliable and secure
wireless connectivity.
The speed and ultra-low latency characteristics inherent in 5G technology are dramatically altering
wireless connectivity, creating a market for diverse and transformative applications, and changing how
individuals live, work, play, and learn. Most of the world’s largest economies are implementing commercial
5G networks, and the world’s leading smartphone manufacturers have launched multiple generations
of 5G-enabled devices.
Concurrently, connectivity is rapidly expanding into an adjacent set of IoT markets, rapidly proliferating
the number of connected devices. ABI Research IoT Market Tracker forecasts 23 billion IoT connections by
2026. We are enabling these opportunities with highly customized solutions supporting a broad set of
wireless systems and protocols including cellular, 5G, Wi-Fi®, GPS, Bluetooth®, Accutime™, HD-Radio™,
LoRa®, Thread®, and Zigbee®. In addition, next-generation Wi-Fi 6 and 6E products are emerging as
the standard offering across enterprise, carrier, and retail segments and are expected to accelerate the
deployment of IoT devices.
Looking forward, we see significant growth opportunities for our industry and for Skyworks. The key
catalysts are the increasing demand for wireless data and the profitable usage model, as each connection
becomes more valuable and the world embraces 5G and other advanced connectivity technologies.
Solving Connectivity Challenges
Highly integrated semiconductor solutions are playing an increasingly essential and pivotal role in the
deployment of next generation standards by resolving the daunting analog and RF complexities that are
challenging the capabilities of existing hardware and the supporting network infrastructure. Delivering
on these design challenges requires broad competencies including signal transmission and conditioning,
the ability to ensure seamless hand-offs between multiple standards, power management, voltage
regulation, battery charging, advanced filtering, and tuning.
We are at the forefront of this new era of connectivity, delivering the solutions that help enable the true
potential of 5G and the IoT. We have a rich heritage in analog systems design and have spent years
investing in key technologies and resources. Our strength is underpinned by world-class performance
and scale across a broad array of capabilities that include advanced TC-SAW and BAW filters, an expanded
family of MIMO, ultra-high band, and diversity receive modules, timing devices, and digital power
isolators. From our breakthrough Sky5® unifying platform to our 5G small cell solutions, our approach
across both infrastructure and user equipment facilitates powerful, high-speed end-to-end 5G connectivity.
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Annual Report
BUSINESS OVERVIEW
Our ambitious vision is to connect everyone and everything, all the time. Major elements of our strategy
include:
Industry-Leading Technology
As the industry migrates to more complex 5G architectures across a multitude of wireless applications,
we are well-positioned to help mobile device manufacturers handle growing levels of system complexity
across both the transmit and receive chains. The trend towards increasing front-end and analog design
challenges in smartphones and other platforms plays directly into our core strengths and positions us to
address these challenges. We believe that we offer the broadest portfolio of radio and analog solutions
from the transceiver to the antenna as well as all required manufacturing process technologies. We also
hold strong technology leadership positions in passive devices, advanced integration including
proprietary shielding and 3-D die stacking as well as SAW, TC-SAW, and BAW filters. Our product portfolio
is reinforced by a library of approximately 4,500 worldwide patents and other intellectual property that
we own and control. Together, our industry-leading technology enables us to deliver the highest levels of
product performance and integration.
Customer Relationships
Given our scale and technology leadership, we are engaged with all of the major original equipment
manufacturers (“OEMs”), smartphone providers, and baseband reference design partners. Our customers
value the scale of our global supply chain, our innovative technology, and our system engineering
expertise, resulting in deep customer loyalty. We partner with our customers to support their long-term
product road maps and are valued as a system solutions provider rather than just a point product vendor.
Diversification
We are diversifying our business by expanding our addressable markets and broadening our product
portfolio to reach a wider array of global customers. With the increasing adoption of 5G and the
opportunity to enable more applications, we are growing our business beyond mobile devices (where
we support all top-tier manufacturers, including the leading smartphone suppliers and key baseband
vendors) into additional high-performance analog markets, including automotive, home and factory
automation, data center, electric and hybrid vehicles, solar, wireless infrastructure, aerospace and defense,
medical, smart energy, and wireless networking. In these markets we leverage our scale, intellectual
property, and worldwide distribution network, which spans over 6,000 customers and over 3,000 analog
components.
Delivering Operational Excellence
We vertically integrate our supply chain where we can differentiate with highly specialized internal
manufacturing capabilities or enter into alliances and strategic relationships for leading-edge technologies.
This hybrid manufacturing model allows us to better balance our manufacturing capacity with the
demand of the marketplace. Our internal capacity utilization remains high, resulting in stable gross
margins and strong return on invested capital on a broader range of revenue.
Additionally, we continue to drive reductions in product design and manufacturing cycle times and
further improve product yields. The combination of agile, flexible capacity and world-class module
manufacturing and scale advantage allows us to achieve low product costs while integrating multiple
technologies into highly sophisticated multi-chip modules and helping to ensure stable supply to our
global customer base.
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Maintaining a Performance-Driven Culture
We consider our people and corporate culture to be a competitive advantage and a key component of
our corporate strategy. We create key performance indicators that align employee efforts and link
responsibilities with performance measurement. Accountability is paramount, and we compensate our
employees through a pay-for-performance methodology. We strive to be an employer-of-choice among
peer companies and have created a work environment in which turnover is below geographic and
industry averages.
Generating Superior Operating Results and Shareholder Returns
We believe our manufacturing scale, broad product portfolio, strong profitability, and consistent cash
flow generation position us to provide superior results and strong returns to our shareholders.
Our Product Portfolio
Our extensive product portfolio includes:
• Amplifiers: the modules that strengthen the signal so that it has sufficient energy to reach a base
station
• Antenna Tuners: aperture and impedance tuning products that improve antenna performance
across frequencies
• Attenuators: circuits that allow a known source of power to be reduced by a predetermined factor
(usually expressed as decibels)
• Automotive Tuners and Digital Radios: tuners, data receivers, and digital radio coprocessors used
in automotive infotainment systems
• Circulators/Isolators: ferrite-based components commonly found on the output of high-power
amplifiers used to protect receivers in wireless transmission systems
• Wireless ASoC: an intelligent 2.4 GHz and 5GHz wireless radio integrated circuit that includes all
the analog and digital functions optimized for building cognitive wireless audio headsets,
headphones, and wireless speaker systems
• DC/DC Converters: an electronic circuit which converts a source of direct current from one voltage
level to another
• Demodulators: a device or an RF block used in receivers to extract the information that has been
modulated onto a carrier or from the carrier itself
• Detectors: devices used to measure and control RF power in wireless systems
• Digital Power Isolators: energy efficient solutions used in industrial control, solar inverters and hybrid/
electric automotive drive trains
• Diodes: semiconductor devices that pass current in one direction only
• Directional Couplers: transmission coupling devices for separately sampling the forward or
backward wave in a transmission line
• Diversity Receive Modules: devices used to improve receiver sensitivity in high data rate
applications
• Filters: devices for recovering and separating mixed and modulated data in RF stages, including
SAW, TC-SAW, and BAW filters
• Front-end Modules: two or more functions co-packaged to optimize the performance, cost, and
application suitability in products, including intermediate or radio frequency signal paths
• Hybrid: a type of directional coupler used in radio and telecommunications
• LED Drivers: devices which regulate the current through a light-emitting diode or string of diodes
for the purpose of creating light
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• Low-Noise Amplifiers: devices used to reduce system noise figure in the receive chain
• Mixers: devices that enable signals to be converted to a higher or lower frequency signal and
thereby allowing the signals to be processed more effectively
• Modulators: devices that take a baseband input signal and output a radio frequency modulated
signal
• Optocouplers/Optoisolators: semiconductor devices that allow signals to be transferred between
circuits or systems while ensuring that the circuits or systems are electrically isolated from each other
• Phase Locked Loops: closed-loop feedback control system that maintains a generated signal in a
fixed phase relationship to a reference signal
• Phase Shifters: designed for use in power amplifier distortion compensation circuits in base station
applications
• Power Dividers/Combiners: utilized to equally split signals into in-phase signals as often found in
balanced signal chains and local oscillator distribution networks
• Receivers: electronic devices that change a radio signal from a transmitter into useful information
• Switches: components that perform the change between the transmit and receive function, as well
as the band function for cellular handsets
• Synthesizers: devices that provide ultra-fine frequency resolution, fast switching speed, and low
phase-noise performance
• Timing Devices: wireless clocks and oscillators used in optical networking, data center and
wireless base stations
• Technical Ceramics: polycrystalline oxide materials used for a wide variety of electrical, mechanical,
thermal, and magnetic applications
• Voltage Controlled Oscillators/Synthesizers: fully integrated, high performance signal source for
high dynamic range transceivers
• Voltage Regulators: generate a fixed level which ideally remains constant over varying input
voltage or load conditions
We believe we possess broad technology capabilities and one of the most complete wireless
communications product portfolios in the industry.
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95
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read
in conjunction with our consolidated financial statements and related notes that appear elsewhere in this
Annual Report. In addition to historical information, the following discussion contains forward-looking
statements that are subject to risks and uncertainties. Actual results may differ substantially and adversely
from those referred to herein due to a number of factors, including, but not limited to, those described
below and elsewhere in this Annual Report.
OVERVIEW
We, together with our consolidated subsidiaries, are empowering the wireless networking revolution.
Our highly innovative analog semiconductors are connecting people, places, and things spanning a
number of new and previously unimagined applications within the aerospace, automotive, broadband,
cellular infrastructure, connected home, entertainment and gaming, industrial, medical, military,
smartphone, tablet, and wearable markets.
Impact of COVID-19
The COVID-19 pandemic and the resulting economic downturn are affecting business conditions in our
industry. The duration, severity, and future impact of the pandemic, including as a result of more contagious
variants of the virus that causes COVID-19, continue to be highly uncertain and could still result in
significant disruptions to our business operations, as well as negative impacts to our financial condition.
The semiconductor industry is experiencing various supply constraints due to the pandemic. While we are
working with our global supply chain partners to mitigate this risk, the duration and extent of the supply
chain disruptions remain uncertain.
RESULTS OF OPERATIONS
Fiscal Years Ended October 1, 2021, October 2, 2020, and September 27, 2019.
The following table sets forth the results of our operations expressed as a percentage of net revenue.
See Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended October 2, 2020, filed with
the SEC on November 17, 2020, as amended by Amendment No. 1 to such Annual Report on Form
10-K, filed with the SEC on January 29, 2021, for Management’s Discussions and Analysis of Financial
Condition and Results of Operations for the fiscal year ended September 27, 2019.
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Annual Report
Net revenue
Cost of goods sold
Gross profit
Operating expenses:
Research and development
Selling, general, and administrative
Amortization of intangibles
Restructuring, impairment, and
other charges
Total operating expenses
Operating income
Interest expense
Other income (expense), net
Income before income taxes
Provision for income taxes
Net income
General
October 1,
2021
100.0%
October 2,
2020
100.0%
September 27,
2019
100.0%
50.8
49.2
10.3
6.3
0.7
0.2
17.6
31.6
(0.3)
—
31.3
2.0
29.3%
51.9
48.1
13.7
6.9
0.4
0.4
21.5
26.6
—
—
26.6
2.3
24.3%
52.5
47.5
12.5
5.9
0.7
0.2
19.3
28.2
—
0.3
28.5
3.2
25.3%
During the fiscal year ended October 1, 2021, the following key factors contributed to our overall results
of operations, financial position, and cash flows:
• Net revenue increased 52.3% to $5,109.1 million, as compared to fiscal 2020. This increase in
revenue was driven primarily by an increase in overall demand for wireless connectivity products
coupled with the onset of technology upgrade cycles, including for 5G and Wi-Fi 6 solutions.
Additionally, our average content per device for these next-generation solutions increased.
• Our ending cash, cash equivalents, and marketable securities balance increased 4.8% to
$1,027.2 million as of October 1, 2021, from $980.0 million as of October 2, 2020. The increase in
cash, cash equivalents, and marketable securities during fiscal 2021 was primarily due to cash
generated from operations of $1,772.0 million, the borrowing of $1,000.0 million in Term Loans,
$500.0 million of Senior Notes due 2023 (the “2023 Notes”), $500.0 million of Senior Notes due
2026 (the “2026 Notes”), and $500.0 million of Senior Notes due 2031 (the “2031 Notes” and,
together with the 2023 Notes and the 2026 Notes, the “Notes”), partially offset by payments for
acquisitions of $2,751.0 million, capital expenditures of $637.8 million, dividend payments of
$340.6 million, repayments of Term Loans of $250.0 million, and the repurchase of 1.4 million shares
of common stock for $195.6 million.
Net Revenue
Fiscal Years Ended
(dollars in millions)
Net revenue
October 1,
2021
$5,109.1
Change
52.3%
October 2,
2020
$3,355.7
Change
(0.6)%
September 27,
2019
$3,376.8
We market and sell our products directly to OEMs of communications and electronics products, third-party
original design manufacturers and contract manufacturers, and indirectly through electronic components
distributors. We generally experience seasonal peaks during our fourth and first fiscal quarters (which
correspond to the second half of the calendar year), primarily as a result of increased worldwide production
Annual Report
97
of consumer electronics in anticipation of increased holiday sales, whereas our second and third fiscal
quarters are typically lower and in line with seasonal industry trends.
The increase in net revenue in fiscal 2021, as compared to fiscal 2020, was driven by an increase in
overall demand for wireless connectivity products coupled with the onset of technology upgrade cycles,
including for 5G and Wi-Fi 6 solutions. Additionally, our average content per device for these next-
generation solutions increased.
For information regarding net revenue by geographic region and customer concentration, see Note 15
of this Annual Report.
Gross Profit
(dollars in millions)
Gross profit
% of net revenue
Fiscal Years Ended
October 1,
2021
Change
October 2,
2020
Change
September 27,
2019
$2,512.4
55.8%
$1,612.9
0.6%
$1,603.8
49.2%
48.1%
47.5%
Gross profit represents net revenue less cost of goods sold. Our cost of goods sold consists primarily of
purchased materials, labor, and overhead (including depreciation and share-based compensation
expense) associated with product manufacturing. As part of our normal course of business, we intend to
improve gross profit with efforts to increase unit volumes, improve manufacturing efficiencies, lower
manufacturing costs of existing products, and by introducing new and higher value-added products.
The increase in gross profit in fiscal 2021, as compared to fiscal 2020, was primarily the result of a favorable
product mix and higher unit volumes with a gross profit impact of $950.2 million, partially offset by
lower average selling prices and an increase in amortization of acquisition intangibles, including inventory
step-up, as a result of the Acquisition completed during the period. Gross profit as a percentage of net
revenue is estimated to decrease in fiscal 2022 due to amortization of intangibles acquired during fiscal
2021.
Research and Development
Fiscal Years Ended
(dollars in millions)
October 1,
2021
Change
October 2,
2020
Research and development
$532.3
14.7%
$464.1
% of net revenue
10.4%
13.8%
Change
9.4%
September 27,
2019
$424.1
12.6%
Research and development expenses consist primarily of direct personnel costs including share-based
compensation expense, costs for pre-production evaluation and testing of new devices, masks,
engineering prototypes, and design tool costs.
The increase in research and development expense in fiscal 2021, as compared to fiscal 2020, was
primarily related to headcount-related expenses, including share-based compensation, as a result of our
increased investment in developing new technologies and products.
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Annual Report
Selling, General, and Administrative
Fiscal Years Ended
(dollars in millions)
October 1,
2021
Change
October 2,
2020
Selling, general, and administrative
$322.5
39.4%
$231.4
% of net revenue
6.3%
6.9%
Change
16.7%
September 27,
2019
$198.3
5.9%
Selling, general, and administrative expenses include legal and related costs, accounting, treasury,
human resources, information systems, customer service, bad debt expense, sales commissions, share-
based compensation expense, advertising, marketing, costs associated with business combinations
completed or contemplated during the period, and other costs.
The increase in selling, general, and administrative expenses in fiscal 2021, as compared to fiscal 2020,
was primarily related to increases in costs associated with the Acquisition completed during the period
and increases in headcount-related expenses, including share-based compensation.
Amortization of Intangibles
(dollars in millions)
Amortization of intangibles
% of net revenue
Fiscal Years Ended
October 1,
2021
$36.0
0.7%
Change
205.1%
October 2,
2020
$11.8
0.4%
Change
(47.8)%
September 27,
2019
$22.6
0.7%
The increase in amortization expense for fiscal 2021, as compared to fiscal 2020, was primarily due to
additional intangible assets acquired during fiscal 2021. See Note 3 of this Annual Report for a detailed
discussion of intangible assets acquired. Amortization expense is estimated to increase in fiscal 2022 due
to amortization of intangibles acquired during fiscal 2021.
Restructuring, Impairment, and Other Charges
(dollars in millions)
Restructuring, impairment, and other
charges
% of net revenue
Fiscal Years Ended
October 1,
2021
Change
October 2,
2020
Change
September 27,
2019
$8.9
0.2%
(35.5)%
$13.8
102.9%
0.4%
$6.8
0.2%
Restructuring, impairment, and other charges incurred in fiscal 2021 were primarily related to an
impairment on property, plant, and equipment.
Restructuring, impairment, and other charges incurred in fiscal 2020 were primarily related to the
abandonment of a previously capitalized in-process research and development (“IPR&D”) project.
Interest Expense
(dollars in millions)
Interest expense
% of net revenue
Annual Report
Fiscal Years Ended
October 1,
2021
$(13.4)
(0.3)%
Change
100.0%
October 2,
2020
$—
—%
Change
—%
September 27,
2019
$—
—%
99
The increase in interest expense for fiscal 2021, as compared to fiscal 2020, was due to the issuance of
the Notes in May 2021 and the borrowing of the Term Loans (as defined below) in July 2021. Interest
expense is estimated to increase in fiscal 2022 as our average borrowings outstanding are expected to be
higher than in fiscal 2021.
Provision for Income Taxes
(dollars in millions)
Provision for income taxes
% of net revenue
Fiscal Years Ended
October 1,
2021
$100.4
2.0%
Change
30.6%
October 2,
2020
$76.9
2.3%
Change
(28.4)%
September 27,
2019
$107.4
3.2%
The annual effective tax rate for fiscal 2021 of 6.3% was less than the United States federal statutory rate
of 21.0% resulting primarily from foreign earnings taxed at rates lower than the federal statutory rate, a
benefit related to a change in the reserve for uncertain tax positions, a benefit from foreign-derived
intangible income deduction (“FDII”), windfall tax deductions, research and development credits, and
foreign tax credits, partially offset by a tax on global intangible low-taxed income (“GILTI”).
The decrease in the effective tax rate for fiscal 2021, as compared to the 11.2% effective rate for fiscal
2020, was primarily due to benefits related to favorable changes in the reserves for uncertain tax positions.
During fiscal 2021, we concluded an IRS examination of our federal income tax returns for fiscal 2015
and 2016. With the conclusion of the audit, we decreased the reserve for uncertain tax positions, including
interest and penalties, which resulted in the recognition of an income tax benefit of $34.8 million in
fiscal 2021. In addition, the statute of limitations expired on the federal income tax return for fiscal 2017
and, as a result, we decreased the related reserve for uncertain tax positions of $25.5 million.
The increase in income tax expense in fiscal 2021, as compared to fiscal 2020, was primarily due to
increased income from operations, partially offset by a decrease in the reserve for uncertain tax positions.
See Note 9 of this Annual Report for additional information regarding income taxes.
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Annual Report
LIQUIDITY AND CAPITAL RESOURCES
Set forth below is a summary of our cash flows for the periods indicated:
(in millions)
Cash and cash equivalents at beginning of period
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Cash and cash equivalents at end of period
Cash provided by operating activities:
October 1,
2021
$ 566.7
1,772.0
(3,133.2)
1,677.4
$ 882.9
Fiscal Years Ended
October 2,
2020
September 27,
2019
$ 851.3
1,204.5
(581.4)
(907.7)
$ 566.7
$ 733.3
1,367.4
(336.9)
(912.5)
$ 851.3
Cash provided by operating activities consists of net income for the period adjusted for certain non-cash
items and changes in certain operating assets and liabilities. The $567.5 million increase in cash provided
by operating activities for fiscal 2021, as compared to fiscal 2020, was primarily related to a $683.5 million
increase in net income, partially offset by $170.4 million of unfavorable changes in working capital, due
primarily to an increase in accounts receivable which resulted from higher revenue during the period
Cash used in investing activities:
Cash used in investing activities consists primarily of cash paid for acquisitions, capital expenditures,
purchased intangibles, and marketable securities, offset by cash received related to the sale or maturity
of marketable securities. The $2,551.8 million increase in cash used in investing activities for fiscal 2021, as
compared to fiscal 2020, was primarily related to a $2,751.0 million increase in cash paid for acquisitions
and a $248.4 million increase in cash used for capital expenditures, partially offset by $452.8 million
cash provided by the net sales of marketable securities.
Cash provided by financing activities:
Cash provided by financing activities consists primarily of proceeds and payments related to our
long-term borrowings and cash transactions related to equity. The $2,585.1 million increase in cash
provided by financing activities for fiscal 2021, as compared to fiscal 2020, was primarily related to an
increase of $2,488.1 million in long-term debt issued and a decrease of $451.9 million in stock repurchase
activity, partially offset by repayments of Term Loans of $250.0 million, a decrease of $45.5 million in net
proceeds from employee stock option exercises, an increase of $33.6 million in dividend payments, and an
increase of $22.1 million related to the minimum statutory payroll tax withholdings upon vesting of
employee performance and restricted stock awards.
Liquidity:
Cash, cash equivalents, and marketable securities totaled $1,027.2 million as of October 1, 2021,
representing an increase of $47.3 million from October 2, 2020. We have outstanding $500.0 million of
Notes Due 2023, $500.0 million of Notes Due 2026, and $500.0 million of Notes Due 2031. We have a term
credit agreement (the “Term Credit Agreement”) providing for a $1.0 billion term loan facility (the “Term
Loan Facility”). On July 26, 2021, the Company borrowed $1.0 billion in aggregate principal amount of
term loans (the “Term Loans”) under the Term Loan Facility to finance a portion of the purchase price for
the Acquisition and to pay fees and expenses incurred in connection therewith. During fiscal 2021, the
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101
Company repaid $250.0 million of outstanding borrowings under the Term Loans. As of October 1,
2021, there were $750.0 million of borrowings outstanding under the Term Credit Agreement. We have
a Revolving Credit Agreement (the “Revolving Credit Agreement”) under which we may borrow up to
$750.0 million for general corporate purposes and working capital needs of the Company and its
subsidiaries. As of October 1, 2021, there were no borrowings outstanding under the revolving credit
facility (the “Revolver”). The Revolving Credit Agreement expires July 26, 2026.
For a description of contractual obligations, such as taxes, leases, and debt, see Note 9, Note 11, and
Note 17 of this Annual Report, respectively.
Based on our historical results of operations, we expect that our cash, cash equivalents, and marketable
securities on hand, and the cash we expect to generate from operations, and funds from our Revolver, will
be sufficient to fund our short-term and long-term liquidity requirements primarily arising from: research
and development, capital expenditures, potential acquisitions, working capital, quarterly cash dividend
payments (if such dividends are declared by the Board of Directors), outstanding commitments, and other
liquidity requirements associated with existing operations. However, we cannot be certain that our cash
on hand, cash generated from operations, and funds from our Revolver will be available in the future to
fund all of our capital and operating requirements. In addition, any future strategic investments and
significant acquisitions may require additional cash and capital resources. If we are unable to obtain
sufficient cash or capital to meet our needs on a timely basis and on favorable terms, our business and
operations could be materially and adversely affected.
Our invested cash balances primarily consist of highly liquid marketable securities that are available to
meet near-term cash requirements including: term deposits, certificates of deposit, money market funds,
U.S. Treasury securities, agency securities, corporate debt securities, and commercial paper.
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Annual Report
CRITICAL ACCOUNTING ESTIMATES
The discussion and analysis of our financial condition and results of operations are based upon our
consolidated financial statements, which have been prepared in accordance with generally accepted
accounting principles (“GAAP”). The preparation of these financial statements requires us to make
estimates and judgments in applying our most critical accounting policies that can have a significant
impact on the results we report in our financial statements. The SEC has defined critical accounting policies
as those that are both most important to the portrayal of our financial condition and results and which
require our most difficult, complex, or subjective judgments or estimates. Based on this definition, our
most critical accounting policies include revenue recognition, which impacts the recording of net revenue;
inventory valuation, which impacts the cost of goods sold and gross margin; business combinations,
which impacts the fair value of acquired assets and assumed liabilities; and income taxes, which impacts
the income tax provision. These policies and significant judgments involved are discussed further
below. We have other significant accounting policies that do not generally require subjective estimates
or judgments or would not have a material impact on our results of operations. Our significant accounting
policies are described in Note 2 of this Annual Report.
Revenue Recognition. We recognize revenue in accordance with the Financial Accounting Standards
Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606 Revenue from Contracts with Customers
net of estimated reserves. Our revenue reserves contain uncertainties because they require management
to make assumptions and to apply judgment to estimate the value of future credits to customers for product
returns, price protection, price adjustments, and stock rotation for products sold to certain electronic
component distributors. We base these estimates on the expected value method considering all
reasonably available information, including our historical experience and current expectations, and are
reflected in the transaction price when sales are recorded.
Inventory Valuation. We value our inventory at the lower of cost or net realizable value. Reserves for
excess and obsolete inventory are established on a quarterly basis and are based on a detailed analysis
of aged material, salability of our inventory, market conditions, and product life cycles. Once reserves are
established, write-downs of inventory are considered permanent adjustments to the cost basis of
inventory. Our reserves contain uncertainties because the calculation requires management to make
assumptions and to apply judgment regarding historical experience, market conditions, and technological
obsolescence. Changes in actual demand or market conditions could adversely impact our reserve
calculations.
Income Taxes. The application of tax laws and regulations to calculate our tax liabilities is subject to
legal and factual interpretation, judgment, and uncertainty in a multitude of jurisdictions. Tax laws and
regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation,
the evolution of regulations, and court rulings. We recognize potential liabilities for anticipated tax audit
issues in the United States and other tax jurisdictions based on our estimate of whether, and the extent to
which, additional taxes and interest will be due. We record an amount as an estimate of probable
additional income tax liability at the largest amount that we feel is more likely than not, based upon the
technical merits of the position, to be sustained upon audit by the relevant tax authority.
Business Combinations. We allocate the fair value of the purchase consideration of a business
acquisition to the tangible assets, liabilities, and intangible assets acquired, including IPR&D, based on
their estimated fair values. The excess of the fair value of purchase consideration over the fair values of
these identifiable assets and liabilities is recorded as goodwill. IPR&D is initially capitalized at fair value as
an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D
project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized
Annual Report
103
over the asset’s estimated useful life. Our valuation of acquired assets and assumed liabilities requires
significant estimates, especially with respect to intangible assets. The valuation of intangible assets, in
particular, requires that we use valuation techniques such as the income approach. The income approach
includes the use of a discounted cash flow model, which includes discounted cash flow scenarios and
requires the following significant estimates: future expected revenue, expenses, capital expenditures and
other costs, and discount rates. We estimate the fair value based upon assumptions we believe to be
reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ
from estimates. For finite-lived intangible assets valued during fiscal 2021, a hypothetical change of
ten percent to our valuation estimate would impact amortization of acquisition intangibles by
$106.0 million over a weighted-average amortization period of 4.4 years. Estimates associated with the
accounting for acquisitions may change as additional information becomes available regarding the assets
acquired and liabilities assumed. Acquisition-related expenses are recognized separately from the
business combination and are expensed as incurred.
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Annual Report
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to overall financial market risks, such as changes in market liquidity, credit quality,
investment risk, interest rate risk, and foreign exchange rate risk as described below.
Investment and Interest Rate Risk
Our exposure to interest rate and general market risks relates to our Term Credit Facility, which has
variable interest rates, and our investment portfolio. As of October 1, 2021, there were $750.0 million of
borrowings outstanding under the Term Credit Agreement and a potential change in the associated
interest rates would be immaterial to the results of our operations. Our investment portfolio consists of
cash and cash equivalents (money market funds and marketable securities purchased with less than ninety
days until maturity) that total approximately $882.9 million, and marketable securities (U.S. Treasury and
government securities, corporate bonds and notes, municipal bonds) that total approximately
$137.2 million and $7.1 million within short-term and long-term marketable securities, respectively, as of
October 1, 2021.
The main objectives of our investment activities are liquidity and preservation of capital. Our cash
equivalent investments have short-term maturity periods that dampen the impact of market or interest
rate risk. Our marketable securities consist of short-term and long-term maturity periods between 90 days
and two years. Credit risk associated with our investments is not material because our investments are
diversified across several types of securities with high credit ratings, which reduces the amount of credit
exposure to any one investment.
Based on our results of operations for the fiscal year ended October 1, 2021, a hypothetical reduction in
the interest rates on our cash, cash equivalents, and other investments to zero would result in an
immaterial reduction of interest income with a de minimis impact on income before taxes.
Given the low interest rate environment, the objectives of our investment activities, and the relatively low
interest income generated from our cash, cash equivalents, and other investments, we do not believe
that investment or interest rate risks currently pose material exposures to our business or results of
operations.
Foreign Exchange Rate Risk
Substantially all sales to customers and arrangements with third-party manufacturers provide for pricing
and payment in United States dollars, thereby reducing the impact of foreign exchange rate fluctuations
on our results. A percentage of our international operational expenses are denominated in foreign
currencies and exchange rate volatility could positively or negatively impact those operating costs. For
the fiscal years ended October 1, 2021, October 2, 2020, and September 27, 2019, we had foreign
exchange losses of $0.5 million, $5.9 million, and $6.2 million, respectively. Increases in the value of the
United States dollar relative to other currencies could make our products more expensive, which could
negatively impact our ability to compete. Conversely, decreases in the value of the United States dollar
relative to other currencies could result in our suppliers raising their prices to continue doing business with
us. Given the relatively small number of customers and arrangements with third-party manufacturers
denominated in foreign currencies, we do not believe that foreign exchange volatility has a material
impact on our current business or results of operations. However, fluctuations in currency exchange rates
could have a greater effect on our business or results of operations in the future to the extent our
expenses increasingly become denominated in foreign currencies.
We may enter into foreign currency forward and options contracts with financial institutions to protect
against foreign exchange risks associated with certain existing assets and liabilities, certain firmly
Annual Report
105
committed transactions, forecasted future cash flows and net investments in foreign subsidiaries.
However, we may choose not to hedge certain foreign exchange exposures for a variety of reasons,
including, but not limited to, accounting considerations and the prohibitive economic cost of hedging
particular exposures. For the fiscal year ended October 1, 2021, we had no outstanding foreign currency
forward or options contracts with financial institutions.
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Annual Report
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
Net revenue
Cost of goods sold
Gross profit
Operating expenses:
Research and development
Selling, general, and administrative
Amortization of intangibles
Restructuring, impairment, and other charges
Total operating expenses
Operating income
Interest expense
Other income (expense), net
Income before income taxes
Provision for income taxes
Net income
Earnings per share:
Basic
Diluted
Weighted average shares:
Basic
Diluted
Fiscal Years Ended
October 1,
2021
October 2,
2020
September 27,
2019
$5,109.1
2,596.7
2,512.4
532.3
322.5
36.0
8.9
899.7
1,612.7
(13.4)
(0.6)
1,598.7
100.4
$1,498.3
$
$
9.07
8.97
165.2
167.0
$3,355.7
1,742.8
1,612.9
$3,376.8
1,773.0
1,603.8
464.1
231.4
11.8
13.8
721.1
891.8
—
(0.1)
891.7
76.9
424.1
198.3
22.6
6.8
651.8
952.0
—
9.0
961.0
107.4
$ 814.8
$ 853.6
$
$
4.84
4.80
168.5
169.9
$
$
4.92
4.89
173.5
174.5
See accompanying Notes to Consolidated Financial Statements.
Annual Report
107
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(In millions)
Net income
Other comprehensive income, net of tax
Fair value of investments
Pension adjustments
Comprehensive income
Fiscal Years Ended
October 1,
2021
$1,498.3
October 2,
2020
$814.8
(0.5)
0.4
0.1
—
$1,498.2
$814.9
September 27,
2019
$853.6
0.3
0.5
$854.4
See accompanying Notes to Consolidated Financial Statements.
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Annual Report
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts)
ASSETS
Current assets:
Cash and cash equivalents
Marketable securities
Receivables, net of allowances of $0.7 and $0.6, respectively
Inventory
Other current assets
Total current assets
Property, plant, and equipment, net
Operating lease right-of-use assets
Goodwill
Intangible assets, net
Deferred tax assets, net
Marketable securities
Other long-term assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
Accrued compensation and benefits
Other current liabilities
Total current liabilities
Long-term debt
Long-term tax liabilities
Long-term operating lease liabilities
Other long-term liabilities
Total liabilities
Commitments and contingencies (Note 12)
Stockholders’ equity:
As of
October 1,
2021
October 2,
2020
$ 882.9
137.2
756.2
885.0
204.1
2,865.4
1,501.6
166.1
2,176.7
1,698.6
119.5
7.1
55.7
$8,590.7
236.0
135.3
287.2
658.5
2,235.6
222.8
144.5
32.2
3,293.6
$ 566.7
408.1
358.5
806.0
178.4
2,317.6
1,249.5
167.9
1,189.8
53.5
55.3
5.2
67.9
$ 5,106.7
226.9
113.5
108.0
448.4
—
311.3
150.7
32.1
942.5
Preferred stock, no par value: 25.0 shares authorized, no shares issued
Common stock, $0.25 par value: 525.0 shares authorized; 165.3 shares issued and
165.3 shares outstanding at October 1, 2021, and 232.3 shares issued and 165.6
shares outstanding at October 2, 2020
Additional paid-in capital
Treasury stock, at cost
Retained earnings
Accumulated other comprehensive loss
Total stockholders’ equity
Total liabilities and stockholders’ equity
—
—
41.3
79.6
(1.7)
5,185.8
(7.9)
5,297.1
41.4
3,403.7
(4,093.5)
4,820.4
(7.8)
4,164.2
$8,590.7
$ 5,106.7
See accompanying Notes to Consolidated Financial Statements.
Annual Report
109
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by
operating activities:
Share-based compensation
Depreciation
Amortization of intangible assets, including inventory step-up
Deferred income taxes
Asset impairment charges
Amortization of debt discount and issuance costs
Changes in fair value of contingent consideration
Other, net
Changes in assets and liabilities:
Receivables, net
Inventory
Accounts payable
Other current and long-term assets and liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Capital expenditures
Purchased intangibles
Purchases of marketable securities
Sales and maturities of marketable securities
Payments for acquisitions
Net cash used in investing activities
Cash flows from financing activities:
Repurchase of common stock — payroll tax withholdings on equity
awards
Repurchase of common stock — stock repurchase program
Dividends paid
Net proceeds from exercise of stock options
Proceeds from employee stock purchase plan
Proceeds from issuance of long-term debt, net
Debt financing costs
Payments of debt
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Supplemental cash flow disclosures:
Income taxes paid
Interest paid
Incentives paid in common stock
Non-cash investing in capital expenditures, accrued but not paid
Retirement of treasury stock
Fiscal Years Ended
October 1,
2021
October 2,
2020
September 27,
2019
$ 1,498.3
$ 814.8
$ 853.6
191.9
332.2
104.5
(59.5)
7.1
1.1
—
0.2
(397.7)
(41.2)
59.6
75.5
1,772.0
(637.8)
(14.3)
(500.8)
770.7
(2,751.0)
(3,133.2)
(55.2)
(195.6)
(340.6)
11.6
24.8
2,488.2
(5.8)
(250.0)
1,677.4
316.2
566.7
$ 882.9
$ 184.0
2.2
$
27.5
$
$
29.3
$ 4,342.6
156.6
318.3
46.0
(13.4)
11.8
—
—
3.8
76.8
(190.4)
61.1
(80.9)
1,204.5
(389.4)
(9.1)
(790.5)
607.6
—
(581.4)
(33.1)
(647.5)
(307.0)
57.1
22.8
—
—
—
(907.7)
(284.6)
851.3
$ 566.7
$ 110.8
—
$
—
$
78.7
$
—
$
80.1
314.9
56.7
(6.1)
—
—
(3.1)
16.8
228.8
(119.6)
(33.0)
(21.7)
1,367.4
(398.4)
(25.0)
(360.5)
447.0
—
(336.9)
(22.8)
(657.6)
(273.9)
22.1
19.7
—
—
—
(912.5)
118.0
733.3
$ 851.3
$ 124.4
$
—
0.7
$
$ 101.5
—
$
See accompanying Notes to Consolidated Financial Statements.
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Annual Report
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions)
Balance at September 28, 2018
177.4
$44.4
51.0
$(2,732.5) $ 3,061.0
$3,732.9
$(8.8)
$4,097.0
Shares of
common
stock
Par
value of
common
stock
Shares of
treasury
stock
Value of
treasury
stock
Additional
paid-in
capital
Retained
earnings
Accumulated
other
comprehensive
income (loss)
Total
stockholders’
equity
Balance at September 27, 2019
170.1
$42.5
60.1
$(3,412.9) $ 3,188.0
$4,312.6
$(7.9)
$4,122.3
Net income
Exercise and settlement of share-based awards,
net of shares withheld for taxes
Share-based compensation expense
Stock repurchase program
Dividends declared
Other comprehensive loss
—
1.6
—
—
0.3
—
(8.9)
(2.2)
—
—
—
—
—
0.3
—
8.9
—
—
Net income
Exercise and settlement of share-based awards,
net of shares withheld for taxes
Share-based compensation expense
Stock repurchase program
Dividends declared
Other comprehensive income
—
1.8
—
—
0.5
—
(6.3)
(1.6)
—
—
—
—
—
0.3
—
6.3
—
—
—
—
853.6
(22.8)
—
(657.6)
—
—
42.2
82.5
2.2
—
—
(33.1)
—
(647.5)
—
—
79.4
134.7
1.6
—
—
—
—
—
(273.9)
—
—
—
(307.0)
—
—
814.8
—
0.8
—
0.1
—
—
—
—
—
—
—
—
—
—
Balance at October 2, 2020
165.6
$41.4
66.7
$(4,093.5) $ 3,403.7
$4,820.4
$(7.8)
Net income
Exercise and settlement of share-based awards,
net of shares withheld for taxes
Share-based compensation expense
Stock repurchase program
Retirement of treasury stock
Dividends declared
Pre-combination service on replacement awards
Other comprehensive income
—
1.1
—
—
0.3
—
(1.4)
(0.4)
—
0.4
—
1.4
—
—
1,498.3
(55.2)
—
(195.6)
63.6
158.1
0.4
—
—
—
—
—
—
—
—
—
—
—
(68.5)
4,342.6
(3,550.3)
(792.3)
—
—
—
—
—
—
—
—
4.1
—
(340.6)
—
—
$
(1.7) $
79.6
$5,185.8
—
—
—
—
—
—
—
(0.1)
$(7.9)
Balance at October 1, 2021
165.3
$41.3
853.6
19.8
82.5
(657.6)
(273.9)
0.8
814.8
46.8
134.7
(647.5)
(307.0)
0.1
$4,164.2
1,498.3
8.7
158.1
(195.6)
—
(340.6)
4.1
(0.1)
$5,297.1
See accompanying Notes to Consolidated Financial Statements.
Annual Report
111
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS
Skyworks Solutions, Inc., together with its consolidated subsidiaries (“Skyworks” or the “Company”), is
empowering the wireless networking revolution. The Company’s analog semiconductors are connecting
people, places, and things, spanning a number of new applications within the aerospace, automotive,
broadband, cellular infrastructure, connected home, entertainment and gaming, industrial, medical,
military, smartphone, tablet, and wearable markets.
2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Principles of Consolidation
All Skyworks subsidiaries are included in the Company’s consolidated financial statements and all
intercompany balances are eliminated in consolidation. Certain items in the fiscal years 2019 and 2020
financial statements have been reclassified to conform to the fiscal 2021 presentation.
Fiscal Year
The Company’s fiscal year ends on the Friday closest to September 30. Fiscal 2021 and 2019 each
consisted of 52 weeks and ended on October 1, 2021, and September 27, 2019, respectively. Fiscal
2020 consisted of 53 weeks and ended on October 2, 2020.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates
and assumptions that affect the amounts of assets, liabilities, revenue, expenses, comprehensive income,
and accumulated other comprehensive loss during the reporting period. The Company evaluates its
estimates on an ongoing basis using historical experience and other factors, including the current
economic environment. Judgment is required in determining the reserves for and fair value of items such
as overall fair value assessments of assets and liabilities, particularly those classified as Level 2 or
Level 3 in the fair value hierarchy, marketable securities, inventory, intangible assets associated with
business combinations, share-based compensation, revenue reserves, loss contingencies, and income
taxes. In addition, judgment is required in determining whether a potential indicator of impairment of long-
lived assets exists and in estimating future cash flows for any necessary impairment testing. Actual
results could differ significantly from these estimates.
Cash and Cash Equivalents
The Company invests excess cash in time deposits, certificates of deposit, money market funds, U.S.
Treasury securities, agency securities, other government securities, corporate debt securities, and
commercial paper. The Company considers highly liquid investments as cash equivalents including
money market funds and investments with maturities of 90 days or less when purchased.
Investments
The Company classifies its investment in marketable debt securities as “available-for-sale.” Available-for-
sale securities are carried at fair value with unrealized holding gains or losses recorded in other
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Annual Report
comprehensive income, net of tax. Gains or losses are included in earnings in the period in which they
are realized. The cost of securities sold is determined based on the specific identification method. The cost
of available-for-sale debt securities is adjusted for premiums and discounts, with the amortization or
accretion of such amounts included as a portion of interest. Available-for-sale debt securities with an
original maturity date greater than three months and less than one year are classified as current
investments. Available-for-sale debt securities with an original maturity date exceeding one year are
classified as long-term.
Fair Value
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a
liability (an exit price) in the principle or most advantageous market in an orderly transaction between
market participants at the measurement date. Applicable accounting guidance provides a hierarchy for
inputs used in measuring fair value that prioritize the use of observable inputs over the use of unobservable
inputs, when such observable inputs are available. The three levels of inputs that may be used to
measure fair value are as follows:
• Level 1 — Quoted prices in active markets for identical assets or liabilities.
• Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or
liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active
markets), or model-driven valuations in which all significant inputs are observable or can be derived
principally from, or corroborated with, observable market data.
• Level 3 — Fair value is derived from valuation techniques in which one or more significant inputs
are unobservable, including assumptions and judgments made by the Company.
It is the Company’s policy to maximize the use of observable inputs and minimize the use of unobservable
inputs when developing fair value measurements. When available, the Company uses quoted market
prices to measure fair value. If market prices are not available, the Company is required to make judgments
about assumptions market participants would use to estimate the fair value of a financial instrument.
The Company measures certain assets and liabilities at fair value on a recurring basis in three levels, based
on the market in which the assets and liabilities are traded and the reliability of the assumptions used to
determine fair value. It recognizes transfers within the fair value hierarchy at the end of the fiscal quarter in
which the change in circumstances that caused the transfer occurred.
The carrying value of cash and cash equivalents, accounts receivable, other current assets, accounts
payable, and accrued liabilities approximates fair value due to the short-term maturities of these assets
and liabilities.
Inventory
Inventory is stated at the lower of cost or net realizable value on a first-in, first-out basis. Reserves for
excess and obsolete inventory are established on a quarterly basis and are based on a detailed analysis
of aged material, salability of our inventory, market conditions, and product life cycles. Once reserves are
established, write-downs of inventory are considered permanent adjustments to the cost basis of
inventory.
Property, Plant, and Equipment
Property, plant, and equipment are carried at cost less accumulated depreciation, with significant
renewals and betterments being capitalized and retired equipment written off in the respective periods.
Maintenance and repairs are expensed as incurred.
Annual Report
113
Depreciation is calculated using the straight-line method over the estimated useful lives, which range
from five to thirty years for buildings and improvements and three to ten years for machinery and
equipment. Leasehold improvements are depreciated over the lesser of the economic life or the life of
the associated lease.
Leases
The Company determines if an arrangement is a lease at its inception. Right-of-use (“ROU”) assets and
liabilities are recognized at the lease commencement date based on the present value of lease payments
over the lease term. The Company uses its estimated incremental borrowing rate in determining the
present value of lease payments considering the term of the lease, which is derived from information
available at the lease commencement date. The lease term includes renewal options when it is reasonably
certain that the option will be exercised and excludes termination options. To the extent that the
Company’s agreements have variable lease payments, the Company includes variable lease payments
that depend on an index or a rate and excludes those that depend on facts or circumstances occurring
after the commencement date, other than the passage of time.
Lease expense for these leases is recognized on a straight-line basis over the lease term. The Company
has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less)
leases for any class of underlying asset. Operating leases are included in operating lease ROU assets,
other current liabilities, and long-term operating lease liabilities in the Company’s condensed consolidated
balance sheet.
Valuation of Long-Lived Assets
Definite lived intangible assets are carried at cost less accumulated amortization. Amortization is
calculated based on the pattern of benefit to be recognized from the underlying asset over its estimated
useful life. Carrying values for long-lived assets and definite lived intangible assets are reviewed for
possible impairment as circumstances warrant. Factors considered important that could result in an
impairment review include significant underperformance relative to expected, historical or projected
future operating results, significant changes in the manner of use of assets or the Company’s business
strategy, or significant negative industry or economic trends. In addition, impairment reviews are
conducted at the judgment of management whenever asset values are deemed to be unrecoverable
relative to future undiscounted cash flows expected to be generated by that particular asset group. The
determination of recoverability is based on an estimate of undiscounted cash flows expected to result from
the use of an asset group and its eventual disposition. Such estimates require management to exercise
judgment and make assumptions regarding factors such as future revenue streams, operating
expenditures, cost allocation and asset utilization levels, all of which collectively impact future operating
performance. The Company’s estimates of undiscounted cash flows may differ from actual cash flows due
to, among other things, technological changes, economic conditions, changes to its business model, or
changes in its operating performance. If the sum of the undiscounted cash flows is less than the carrying
value of an asset group, the Company would recognize an impairment loss, measured as the amount
by which the carrying value exceeds the fair value of the asset group.
Goodwill and Indefinite-Lived Intangible Assets
Goodwill and indefinite-lived intangible assets are not amortized but are tested at least annually as of
the first day of the fourth fiscal quarter for impairment or more frequently if indicators of impairment exist
during the fiscal year. The Company assesses its conclusion regarding segments and reporting units in
conjunction with its annual goodwill impairment test and has determined that it has one reporting unit for
the purposes of allocating and testing goodwill.
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Annual Report
The Company’s impairment analysis compares its fair value to its net book value to determine if there is
an indicator of impairment. In the Company’s calculation of fair value, it considers the closing price of its
common stock on the selected testing date, the number of shares of its common stock outstanding
and other marketplace activity such as a related control premium. If the calculated fair value is determined
to be less than the book value of the reporting unit, an impairment loss is recognized equal to that
excess; however, the loss recognized should not exceed the total amount of goodwill allocated to that
reporting unit.
Business Combinations
The Company uses the acquisition method of accounting for business combinations and recognizes
assets acquired and liabilities assumed at their fair values on the date acquired. Goodwill represents the
excess of the purchase price over the fair value of the acquired identifiable net assets. The fair values
of the assets and liabilities acquired are determined based upon the Company’s valuation using a
combination of market, income, or cost approaches. The valuation involves making significant estimates
and assumptions, which are based on detailed financial models including the projection of future cash
flows, the weighted average cost of capital, and any cost savings that are expected to be derived in the
future from the viewpoint of a market participant.
Revenue Recognition
The Company derives its revenue primarily from the sale of semiconductor products under individual
customer purchase orders, some of which have underlying master sales agreements that specify terms
governing the product sales. In the absence of a sales agreement, the Company’s standard terms and
conditions apply. Revenue is recognized when control of the promised goods or services is transferred to
the Company’s customers, in an amount that reflects the consideration to which the Company expects
to be entitled in exchange for those goods or services. The Company applies a five-step approach as
defined in FASB ASC 606, Revenue from Contracts with Customers (Topic 606), in determining the amount
and timing of revenue to be recognized: (1) identifying the contract with a customer; (2) identifying the
performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction
price to the performance obligations in the contract; and (5) recognizing revenue when the corresponding
performance obligation is satisfied.
Each distinct promise to transfer products is considered to be an identified performance obligation for
which revenue is recognized at a point in time upon transfer of control of the products to the customer.
Transfer of control occurs upon shipment to the distributor or direct customer or when products are pulled
from consignment inventory by the customer. Point in time recognition is determined as products
manufactured under non-cancellable orders create an asset with an alternative use to the Company.
Returns under the Company’s general assurance warranty of products have not been material, and
warranty-related services are not considered a separate performance obligation.
Pricing adjustments and estimates of returns are treated as variable consideration for purposes of
determining the transaction price. Sales returns are generally accepted at the Company’s discretion or
from distributors with stock rotation rights. Stock rotation allows distributors limited levels of returns and
is based on the distributor’s prior purchases. Price protection represents price discounts granted to
certain distributors and is based on negotiations on sales to end customers. Variable consideration is
estimated using the expected value method considering all reasonably available information, including
the Company’s historical experience and its current expectations, and is reflected in the transaction price
when sales are recorded. The Company records net revenue excluding taxes on its sales to trade
customers.
Annual Report
115
Accounts receivable represents the Company’s unconditional right to receive consideration from its
customer. Substantially all payments are collected within the Company’s standard terms, which do not
include a significant financing component. To date, there have been no material impairment losses on
accounts receivable. There were no material contract assets or contract liabilities recorded on the
consolidated balance sheet in any of the periods presented. All incremental customer contract acquisition
costs are expensed as they are incurred as the amortization period of the asset that the Company
otherwise would have recognized is one year or less in duration.
Share-Based Compensation
The Company recognizes compensation expense for all share-based payment awards made to employees
and directors including non-qualified employee stock options, share awards and units, employee stock
purchase plan, and other special share-based awards based on estimated fair values.
The fair value of share-based payment awards is amortized over the requisite service period, which is
defined as the period during which an employee is required to provide service in exchange for an award.
The Company generally uses a straight-line attribution method for all grants that include only a service
condition. Awards with both performance and service conditions are expensed over the service period for
each separately vesting tranche.
Share-based compensation expense recognized during the period includes actual expense on vested
awards and expense associated with unvested awards. Forfeitures are recorded as incurred.
The determination of fair value of restricted and certain performance stock awards and units is based on
the value of the Company’s stock on the date of grant with performance awards and units adjusted for
the actual outcome of the underlying performance condition.
For more complex performance awards including units with market-based performance conditions the
Company employs a Monte Carlo simulation valuation method to calculate the fair value of the awards
based on the most likely outcome. Under the Monte Carlo simulation, a number of variables and
assumptions are used including, but not limited to: the expected stock price volatility over the term of
the award, a correlation coefficient, the risk-free rate, and dividend yield.
Research and Development Costs
Research and development costs are expensed as incurred.
Loss Contingencies
The Company records its best estimates of a loss contingency when it is considered probable and the
amount can be reasonably estimated. When a range of loss can be reasonably estimated with no best
estimate in the range, the minimum estimated liability related to the claim is recorded. As additional
information becomes available, the Company assesses the potential liability related to the potential
pending loss contingency and revises its estimates. Material loss contingencies are disclosed if there is at
least a reasonable possibility that a loss or an additional loss may have been incurred and include
estimated legal costs.
Restructuring
A liability for post-employment benefits is recorded when payment is probable and the amount is
reasonably estimable. Contract exit costs include contract termination fees and future contractual
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Annual Report
termination commitments for lease payments. A liability for contract exit costs is recognized in the
period in which the Company terminates the contract or on the cease-use date for leased facilities.
Foreign Currencies
The Company’s functional currency is the United States dollar. Gains and losses related to foreign
currency transactions and conversion of foreign denominated cash balances are included in current
results.
Income Taxes
The Company uses the asset and liability method of accounting for income taxes. Under the asset and
liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax basis. This method also requires the recognition of future tax benefits
such as net operating loss carry forwards, to the extent that realization of such benefits is more likely than
not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
The carrying value of the Company’s net deferred tax assets assumes the Company will be able to
generate sufficient future taxable income in certain tax jurisdictions, based on estimates and assumptions.
If these estimates and related assumptions change in the future, the Company may be required to
record additional valuation allowances against its deferred tax assets resulting in additional income tax
expense in its Consolidated Statement of Operations. Management evaluates the realizability of the
deferred tax assets and assesses the adequacy of the valuation allowance quarterly. Likewise, in the event
the Company were to determine that it would be able to realize its deferred tax assets in the future in
excess of their net recorded amount, an adjustment to the deferred tax assets would increase income in
the period such determination was made.
The determination of recording or releasing tax valuation allowances is made, in part, pursuant to an
assessment performed by management regarding the likelihood that the Company will generate future
taxable income against which benefits of its deferred tax assets may or may not be realized. This assessment
requires management to exercise judgment and make estimates with respect to its ability to generate
revenues, gross profits, operating income, and taxable income in future periods. Amongst other factors,
management must make assumptions regarding overall business and semiconductor industry conditions,
operating efficiencies, the Company’s ability to develop products to its customers’ specifications,
technological change, the competitive environment, and changes in regulatory requirements which may
impact its ability to generate taxable income and, in turn, realize the value of its deferred tax assets.
The calculation of the Company’s tax liabilities includes addressing uncertainties in the application of
complex tax regulations and is based on the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return.
The Company recognizes liabilities for anticipated tax audit issues in the United States and other tax
jurisdictions based on its recognition threshold and measurement attribute of whether it is more likely
than not that the positions the Company has taken in tax filings will be sustained upon tax audit, and the
extent to which, additional taxes would be due. If payment of these amounts ultimately proves to be
unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period in
which it is determined the liabilities are no longer necessary. If the estimate of tax liabilities proves to be
Annual Report
117
less than the ultimate assessment, a further charge to expense would result. The Company recognizes
any interest or penalties, if incurred, on any unrecognized tax liabilities or benefits as a component of
income tax expense.
Earnings Per Share
Basic earnings per share are computed using the weighted average number of common shares
outstanding during the period. Diluted earnings per share incorporate the potentially dilutive incremental
shares issuable upon the assumed exercise of stock options, the assumed vesting of outstanding
restricted stock units, and the assumed issuance of common stock under the stock purchase plan using
the treasury share method. Shares issuable upon the vesting of performance stock awards are likewise
included in the calculation of diluted earnings per share as of the date the condition(s) have been
satisfied.
Treasury Stock
The Company accounts for treasury stock using the cost method. The Company accounts for the
retirement of treasury stock by charging any excess of cost over par value as a deduction from additional
paid-in capital and the remaining excess as a deduction to retained earnings on the consolidated
balance sheets. Retired treasury shares revert to the status of authorized but unissued shares.
Recently Issued Accounting Guidance
In December 2019, the Financial Accounting Standards Board (the “FASB”) issued an accounting
standards update that simplifies the accounting for income taxes by eliminating certain exceptions
related to the approach for intraperiod tax allocation and modified the methodology for calculating
income taxes in an interim period. The guidance also clarifies and simplifies other aspects of the accounting
for income taxes. The guidance is effective for the Company beginning in the first quarter of fiscal 2022.
The new standard is not expected to have a material effect on the Company’s consolidated financial
statements.
3. BUSINESS COMBINATIONS
On July 26, 2021, the Company acquired the Infrastructure and Automotive (“I&A”) business of Silicon
Laboratories Inc. (the “Asset Purchase”). The Asset Purchase accelerated the Company’s expansion into
high-growth segments, including electric and hybrid vehicles, industrial and motor control, power supply,
5G wireless infrastructure, optical data communication, data center, automotive, smart home, and
several other applications.
The Company acquired the business for total cash consideration of $2.75 billion. Net revenue and net
income from this acquisition have been included in the Consolidated Statements of Operations from the
acquisition date through the end of the fiscal year on October 1, 2021, and the impact of the acquisition
to the ongoing operations on the Company’s net revenue and net income was not material. The Company
incurred $40.7 million in transaction-related costs during the fiscal year ended October 1, 2021, which
were included within the selling, administrative, and general expense.
The allocation of the purchase price to the assets and liabilities recognized in the Company’s acquisition
of the I&A business was considered final at the time of filing this Annual Report. The allocation of the
purchase price is based on the estimated fair values of the assets acquired and liabilities assumed by major
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Annual Report
class related to the Asset Purchase and are reflected, as of the acquisition date, in the accompanying
financial statements as follows (in millions):
Purchase Price
Cash consideration
Fair value of partially vested equity awards
Total purchase consideration
Allocation
Inventory, including step up
Property, plant, and equipment
Other long-term assets
Intangible assets
Goodwill
Liabilities assumed
Estimated fair value of net assets acquired
As of
July 26, 2021
$2,750.0
4.1
2,754.1
$
56.3
4.4
0.7
1,708.3
986.2
(1.8)
$2,754.1
Goodwill is primarily attributable to the assembled workforce and planned growth in strategic markets.
This goodwill is expected to be deductible for tax purposes.
Intangible Assets
Developed technology
Backlog
Customer relationships and tradename
Total identified finite-lived intangible assets
In-process research and development (“IPR&D”)
Total identified intangible assets
As of
July 26, 2021
$ 960.1
154.6
2.5
1,117.2
591.1
$1,708.3
Developed semiconductor technology relates to timing products including clocks and oscillators, power
products including isolation and power-over-ethernet devices, and broadcast products including
consumer and automotive radio devices.
Developed technology was valued using the multi-period excess earnings method under the income
approach. This method reflects the present value of the projected cash flows that are expected to be
generated by the developed technology less charges representing the contribution of other assets to
those cash flows. The weighted-average amortization period of approximately four years was determined
based on the technology cycle related to each developed technology, as well as the cash flows over the
forecast period.
Customer relationships and backlog represent the fair value of future projected revenue that will be
derived from sales of products to existing customers of the I&A business. Backlog was valued using the
multi-period excess earnings method under the income approach, and customer relationships were valued
using the replacement cost method under the cost approach. The cost approach estimates the amount
of money required to replace the investment or asset with another having equivalent utility. The weighted-
average amortization period of the customer relationships was determined based on historical customer
Annual Report
119
acquisition rates under a distributor model and was fully amortized as of October 1, 2021. The weighted-
average amortization period of the backlog of approximately two years was determined based on the
expected life of the backlog and the cash flows over the forecast period.
Tradename relates to the “Silicon Laboratories” trade name. The fair value was determined by applying
the relief-from-royalty method under the income approach. This method is based on the application of a
market royalty rate to forecasted revenue under the trade name. The weighted-average amortization
period was determined based on the expected life of the trade name and was fully amortized as of
October 1, 2021.
The fair value of IPR&D was determined using the multi-period excess earnings method under the
income approach. This method reflects the present value of the projected net cash flows that are expected
to be generated by the IPR&D, less charges representing the contribution of other assets to those cash
flows.
The unaudited pro forma financial results for the fiscal years ended October 1, 2021, and October 2,
2020, combine the historical results of Skyworks with the unaudited historical results of the I&A business
for the fiscal years ended October 1, 2021, and October 2, 2020, respectively. The results include the
effects of unaudited pro forma adjustments as if the I&A business was acquired at the beginning of the
prior fiscal year. The unaudited pro forma results presented include amortization charges for acquired
intangible assets, adjustments for increases in the fair value of acquired inventory, interest expense, other
charges, and related tax effects. The pro forma financial results presented below do not include any
anticipated synergies or other expected benefits of the acquisition. These unaudited results are presented
for informational purposes only and are not necessarily indicative of future operations (in millions):
(unaudited)
Revenue
Net income
Fiscal Years Ended
October 1,
2021
October 2
2020
$5,440.0
$3,735.4
1,514.3
637.8
4. MARKETABLE SECURITIES
The Company’s portfolio of available-for-sale marketable securities consists of the following (in millions):
Available-for-sale:
U.S. Treasury and government
Corporate bonds and notes
Municipal bonds
Total
Current
Noncurrent
October 1,
2021
October 2,
2020
October 1,
2021
October 2,
2020
$ 7.6
117.0
12.6
$137.2
$129.4
276.8
1.9
$408.1
$6.0
—
1.1
$7.1
$5.0
—
0.2
$5.2
The contractual maturities of noncurrent available-for-sale marketable securities were due within
two years or less. There were no gross unrealized gains or losses as of October 1, 2021. There were
gross unrealized gains of $0.3 million on U.S. Treasury securities and $0.2 million on corporate bonds
and notes as of October 2, 2020.
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5. FAIR VALUE
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis
The Company measures certain assets and liabilities at fair value on a recurring basis such as its financial
instruments. There have been no transfers between Level 1, 2, or 3 assets or liabilities during the fiscal
year ended October 1, 2021.
Assets and liabilities recorded at fair value on a recurring basis consisted of the following (in millions):
As of October 1, 2021
As of October 2, 2020
Fair Value
Measurements
Fair Value
Measurements
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Assets
Cash and cash equivalents*
$ 882.9
$882.9
$
—
$—
$566.7
$561.2
$ 5.5
$—
U.S. Treasury and government
securities
Corporate bonds and notes
Municipal bonds
Total
13.6
117.0
13.7
2.6
—
—
11.0
117.0
13.7
—
—
—
134.4
276.8
2.1
43.2
—
—
91.2
276.8
2.1
—
—
—
$1,027.2
$885.5
$141.7
$—
$980.0
$604.4
$375.6
$—
*
Cash equivalents included in Levels 1 and 2 consist of money market funds and corporate bonds and notes, commercial
paper, and agency securities purchased with less than ninety days until maturity.
Assets Measured and Recorded at Fair Value on a Nonrecurring Basis
The Company’s non-financial assets and liabilities, such as goodwill, intangible assets, and other long-
lived assets resulting from business combinations, are measured at fair value using income approach
valuation methodologies at the date of acquisition and are subsequently re-measured if there are indicators
of impairment. During fiscal 2021, there were no indicators of impairment identified.
6. INVENTORY
Inventory consists of the following (in millions):
Raw materials
Work-in-process
Finished goods
Finished goods held on consignment by customers
Total inventory
As of
October 1,
2021
October 2,
2020
$ 62.2
$ 37.8
595.9
224.4
2.5
566.4
198.9
2.9
$885.0
$806.0
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121
7. PROPERTY, PLANT, AND EQUIPMENT, NET
Property, plant, and equipment, net consists of the following (in millions):
Land and improvements
Buildings and improvements
Furniture and fixtures
Machinery and equipment
Construction in progress
Total property, plant, and equipment, gross
Accumulated depreciation
Total property, plant, and equipment, net
As of
October 1,
2021
October 2,
2020
$
11.9
$
11.8
470.7
60.2
2,990.2
177.0
3,710.0
424.8
46.5
2,556.1
140.7
3,179.9
(2,208.4)
(1,930.4)
$ 1,501.6
$ 1,249.5
8. GOODWILL AND INTANGIBLE ASSETS
The Company’s goodwill balance was $2,176.7 million and $1,189.8 million as of October 1, 2021, and
October 2, 2020, respectively. Goodwill increased by $986.9 million in fiscal 2021 due to acquisitions
completed during the period. See Note 3 of this Annual Report for a detailed discussion of goodwill
acquired. The Company performed an impairment test of its goodwill as of the first day of the fourth fiscal
quarter in accordance with its regularly scheduled testing. The results of this test indicated that the
Company’s goodwill was not impaired. There were no other indicators of impairment noted during the
fiscal year ended October 1, 2021.
Intangible assets consist of the following (in millions):
As of
October 1, 2021
As of
October 2, 2020
Weighted
average
amortization
period (years)
Gross
carrying
amount
Accumulated
amortization
Net
carrying
amount
Gross
carrying
amount
Accumulated
amortization
Net
carrying
amount
Customer relationships
and backlog
Developed technology
and other
Trademarks
Technology licenses
IPR&D
Total intangible
assets
2.5
4.2
3.0
2.6
$ 174.3
$ (44.0)
$ 130.3
$ 18.2
$ (15.8)
$ 2.4
1,036.9
1.0
48.4
594.9
(88.0)
(1.0)
(23.9)
—
948.9
101.0
—
24.5
594.9
1.6
26.3
19.5
(81.6)
(1.5)
(14.2)
—
19.4
0.1
12.1
19.5
$1,855.5
$(156.9)
$1,698.6
$166.6
$(113.1)
$53.5
Fully amortized intangible assets are eliminated from both the gross and accumulated amortization
amounts in the first quarter of each fiscal year.
Annual amortization expense for the next five fiscal years related to definite-lived intangible assets,
excluding IPR&D, is expected to be as follows (in millions):
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Annual Report
Amortization expense, cost of goods sold
$156.1
$144.0
$129.5
$115.1
$100.8
Amortization expense, operating expense
$110.3
$ 40.3
$ 5.4
$ 2.3
$ 1.1
Total amortization expense
$266.4
$184.3
$134.9
$117.4
$101.9
$298.8
$
—
$298.8
2022
2023
2024
2025
2026
Thereafter
9. INCOME TAXES
Income before income taxes consists of the following components (in millions):
United States
Foreign
Income before income taxes
Fiscal Years Ended
October 1,
2021
October 2,
2020
September 27,
2019
$ 804.7
794.0
$1,598.7
$435.9
455.8
$891.7
$427.2
533.8
$961.0
The provision for income taxes consists of the following components (in millions):
Current tax expense (benefit):
Federal
State
Foreign
Deferred tax expense (benefit):
Federal
State
Foreign
Fiscal Years Ended
October 1,
2021
October 2,
2020
September 27,
2019
$ 87.5
$ 44.4
$ 85.3
—
70.7
158.2
(45.8)
(0.1)
(11.9)
(57.8)
—
49.5
93.9
(6.8)
—
(10.2)
(17.0)
(0.1)
23.5
108.7
(0.4)
—
(0.9)
(1.3)
Provision for income taxes
$100.4
$ 76.9
$107.4
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123
The actual income tax expense is different than that which would have been computed by applying the
federal statutory tax rate to income before income taxes. A reconciliation of income tax expense as
computed at the United States federal statutory income tax rate to the provision for income tax expense
is as follows (in millions):
Tax expense at United States statutory rate
Foreign tax rate difference
Tax on deemed repatriation
Effect of stock compensation
Research and development credits
Change in tax reserve
Global Intangible Low-Taxed Income
Foreign Derived Intangible Income
Other, net
Provision for income taxes
Fiscal Years Ended
October 1,
2021
October 2,
2020
September 27,
2019
$ 335.7
(155.2)
—
(13.5)
(27.0)
(51.5)
69.0
(79.7)
22.6
$187.3
(86.6)
0.2
(10.3)
(23.0)
9.6
35.9
(41.2)
5.0
$ 201.8
(115.3)
8.1
(1.6)
(25.7)
18.4
54.3
(41.5)
9.0
$ 100.4
$ 76.9
$ 107.4
The Company operates in foreign jurisdictions with income tax rates lower than the United States tax rate
of 21.0% for the fiscal years ended October 1, 2021, and October 2, 2020. The Company’s tax benefits
related to foreign earnings taxed at a rate less than the United States federal rate were $155.2 million,
$86.6 million, and $115.3 million for the fiscal years ended October 1, 2021, October 2, 2020, and
September 27, 2019, respectively.
The Company’s federal income tax returns for fiscal 2018 and fiscal 2019 are currently under Internal
Revenue Service (“IRS”) examination. During fiscal 2021, the Company concluded an IRS examination of
its federal income tax returns for fiscal 2015 and 2016. With the conclusion of the audit, the Company
decreased the reserve for uncertain tax positions, including accrued interest and penalties, which
resulted in the recognition of an income tax benefit of $34.8 million.
On October 2, 2010, the Company expanded its presence in Asia by launching operations in Singapore.
The Company operates under a tax holiday in Singapore, which is effective through September 30,
2030. The current tax holiday is conditioned upon the Company’s compliance with certain employment
and investment thresholds in Singapore. The impact of the tax holiday decreased Singapore’s taxes by
$99.5 million, $63.1 million, and $32.8 million for the fiscal years ended October 1, 2021, October 2,
2020, and September 27, 2019, respectively, which resulted in tax benefits of $0.60, $0.37, and $0.19 of
diluted earnings per share, respectively. These tax benefits were partially offset by an increase in tax
expense on GILTI.
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Annual Report
Deferred income tax assets and liabilities consist of the tax effects of temporary differences related to the
following (in millions):
Deferred tax assets:
Inventory
Accrued compensation and benefits
Product returns, allowances, and warranty
Share-based and other deferred compensation
Net operating loss carry forwards
Non-United States tax credits
State tax credits
Operating leases
Prepayments
Property, plant, and equipment
Other, net
Deferred tax assets
Less valuation allowance
Net deferred tax assets
Deferred tax liabilities:
Property, plant, and equipment
Intangible assets
Operating leases
Other, net
Net deferred tax liabilities
Total net deferred tax assets
Fiscal Years Ended
October 1,
2021
October 2,
2020
$ 15.8
$ 12.1
12.7
0.9
31.8
7.1
17.0
126.9
45.4
42.1
35.8
15.0
350.5
(150.0)
200.5
(38.6)
(5.3)
(40.4)
(15.6)
(99.9)
10.1
0.4
25.9
7.4
16.5
115.5
43.4
—
24.3
5.9
261.5
(137.4)
124.1
(26.4)
(7.6)
(41.5)
(7.5)
(83.0)
$ 100.6
$ 41.1
The deferred tax assets and liabilities based on tax jurisdictions are presented on our Consolidated
Balance Sheets as follows:
Deferred tax assets
Deferred tax liabilities
Net deferred tax asset
As of
October 1,
2021
October 2,
2020
$119.5
(18.9)
$100.6
$ 55.3
(14.2)
$ 41.1
In accordance with GAAP, management has determined that it is more likely than not that a portion of
the Company’s historic and current year income tax benefits will not be realized. As of October 1, 2021,
the Company has a valuation allowance of $150.0 million. This valuation allowance is comprised of
$126.9 million related to United States state tax credits, $3.3 million related to United States state net
operating loss carry forwards, and $19.8 million related to foreign deferred tax assets. The state tax credits
relate primarily to California research tax credits that can be carried forward indefinitely, for which the
Company has provided a full valuation allowance. The Company does not anticipate sufficient taxable
income or tax liability to utilize these state and foreign credits. If these benefits are recognized in a future
Annual Report
125
period, the valuation allowance on deferred tax assets will be reversed and up to a $150.0 million
income tax benefit may be recognized. The Company will need to generate $351.7 million of future
United States federal taxable income to utilize its United States deferred tax assets, excluding state
deferred tax assets with a full valuation allowance, as of October 1, 2021. The Company believes that future
reversals of taxable temporary differences, and its forecast of continued earnings in its domestic and
foreign jurisdictions, support its decision to not record a valuation allowance on other deferred tax assets.
The Company will continue to assess its valuation allowance in future periods. The net valuation
allowance increased by $12.6 million and $8.3 million in fiscal 2021 and fiscal 2020, respectively, primarily
related to increases for foreign and state net operating loss and tax credit carryovers.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in
millions):
Balance at October 2, 2020
Decreases based on positions related to prior years
Increases based on positions related to current year
Decreases relating to settlements with taxing authorities
Decreases relating to lapses of applicable statutes of limitations
Balance at October 1, 2021
Unrecognized
tax benefits
$117.6
(28.6)
5.4
(13.6)
(25.5)
$ 55.3
Of the total unrecognized tax benefits at October 1, 2021, $35.9 million would impact the effective tax
rate, if recognized. The remaining unrecognized tax benefits would not impact the effective tax rate, if
recognized, due to the Company’s valuation allowance and certain positions that were required to be
capitalized.
The Company anticipates reversals within the next 12 months related to items such as the lapse of the
statute of limitations, audit closures, and other items that occur in the normal course of business. Due to
open examinations, an estimate of anticipated reversals within the next 12 months cannot be made. During
fiscal 2021, the Company recognized an $11.6 million benefit for interest or penalties related to
unrecognized tax benefits. During fiscal 2020 and 2019, the Company recognized $4.6 million and
$6.0 million, respectively, of interest or penalties related to unrecognized tax benefits. Accrued interest
and penalties of $4.5 million and $16.1 million related to uncertain tax positions have been included in
long-term tax liabilities within the consolidated balance sheet as of October 1, 2021, and October 2, 2020,
respectively.
The Company’s major tax jurisdictions as of October 1, 2021, are the United States, California, Canada,
Mexico, Japan, and Singapore. For the United States, the Company has open tax years dating back to fiscal
2018. For California, the Company has open tax years dating back to fiscal 1999 due to the carry forward
of tax attributes. For Canada, the Company has open tax years dating back to fiscal 2014. For Mexico,
the Company has open tax years back to fiscal 2015. For Japan, the Company has open tax years back to
fiscal 2014. For Singapore, the Company has open tax years dating back to fiscal 2015. The Company is
subject to audit examinations by the respective taxing authorities on a periodic basis, of which the results
could impact its financial position, results of operations, or cash flows.
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Annual Report
10. STOCKHOLDERS’ EQUITY
Common Stock
At October 1, 2021, the Company is authorized to issue 525.0 million shares of common stock, par value
$0.25 per share, of which 165.3 million shares are issued and outstanding.
Holders of the Company’s common stock are entitled to dividends in the event declared by the Company’s
Board of Directors out of funds legally available for such purpose. Dividends may not be paid on
common stock unless all accrued dividends on preferred stock, if any, have been paid or declared and
set aside. In the event of the Company’s liquidation, dissolution or winding up, the holders of common
stock will be entitled to share pro rata in the assets remaining after payment to creditors and after payment
of the liquidation preference plus any unpaid dividends to holders of any outstanding preferred stock.
Each holder of the Company’s common stock is entitled to one vote for each such share outstanding in the
holder’s name. No holder of common stock is entitled to cumulate votes in voting for directors. The
Company’s restated certificate of incorporation as amended to date (the “Certificate of Incorporation”)
provides that, unless otherwise determined by the Company’s Board of Directors, no holder of stock has
any preemptive right to purchase or subscribe for any stock of any class which the Company may issue
or sell.
Preferred Stock
The Company’s Certificate of Incorporation has authorized and permits the Company to issue up to
25.0 million shares of preferred stock without par value in one or more series and with rights and
preferences that may be fixed or designated by the Company’s Board of Directors without any further
action by the Company’s stockholders. The designation, powers, preferences, rights and qualifications,
limitations, and restrictions of the preferred stock of each series will be fixed by the certificate of designation
relating to such series, which will specify the terms of the preferred stock. At October 1, 2021, the
Company had no shares of preferred stock issued or outstanding.
Stock Repurchase
On January 26, 2021, the Board of Directors approved a stock repurchase program, pursuant to which
the Company is authorized to repurchase up to $2.0 billion of its common stock from time to time prior to
January 26, 2023, on the open market or in privately negotiated transactions as permitted by securities
laws and other legal requirements. This authorized stock repurchase program replaced in its entirety the
January 30, 2019, stock repurchase program. The timing and amount of any shares of the Company’s
common stock that are repurchased under the repurchase program are determined by the Company’s
management based on its evaluation of market conditions and other factors.
During the fiscal year ended October 1, 2021, the Company paid approximately $195.6 million (including
commissions) in connection with the repurchase of 1.4 million shares of its common stock (paying an
average price of $138.85 per share) under the January 30, 2019, stock repurchase plan. As of October 1,
2021, $2.0 billion remained available under the January 26, 2021, stock repurchase plan.
During the fiscal year ended October 1, 2021, the Board of Directors approved the retirement of
68.5 million shares of treasury stock at an aggregated historical cost of $4,342.6 million.
During the fiscal year ended October 2, 2020, the Company paid approximately $647.5 million (including
commissions) in connection with the repurchase of 6.3 million shares of its common stock (paying an
Annual Report
127
average price of $102.74 per share). During the fiscal year ended September 27, 2019, the Company
paid approximately $657.6 million (including commissions) in connection with the repurchase of 8.9 million
shares of its common stock (paying an average price of $74.26 per share).
Dividends
On November 4, 2021, the Company announced that the Board of Directors had declared a cash
dividend on the Company’s common stock of $0.56 per share. This dividend is payable on December 14,
2021, to the Company’s stockholders of record as of the close of business on November 23, 2021.
Future dividends are subject to declaration by the Board of Directors. The dividends charged to retained
earnings in fiscal 2021 and 2020 were as follows (in millions except per share data):
First quarter
Second quarter
Third quarter
Fourth quarter
Fiscal Years Ended
October 1,
2021
October 2,
2020
Per Share
Total
Per Share
Total
$0.50
$ 83.0
$0.44
$ 75.1
0.50
0.50
0.56
82.6
82.5
92.5
0.44
0.44
0.50
74.9
73.5
83.5
$2.06
$340.6
$1.82
$307.0
Employee Stock Benefit Plans
As of October 1, 2021, the Company has the following equity compensation plans under which its equity
securities were authorized for issuance to its employees and/or directors:
• the 2002 Employee Stock Purchase Plan
• the Non-Qualified Employee Stock Purchase Plan
• the 2005 Long-Term Incentive Plan
• the 2008 Director Long-Term Incentive Plan
• the 2015 Long-Term Incentive Plan
Except for the Non-Qualified Employee Stock Purchase Plan, each of the foregoing equity compensation
plans was approved by the Company’s stockholders.
As of October 1, 2021, a total of 81.8 million shares are authorized for grant under the Company’s share-
based compensation plans, with 0.2 million options outstanding. The number of common shares
reserved for future awards to employees and directors under these plans was 16.3 million at October 1,
2021. The Company currently grants new equity awards to employees under the 2015 Long-Term Incentive
Plan and to non-employee directors under the 2008 Director Long-Term Incentive Plan.
2015 Long-Term Incentive Plan. Under this plan, officers, employees, and certain consultants may be
granted stock options, restricted stock units, performance stock units, and other share-based awards. The
plan has been approved by the stockholders. Under the plan, up to 24.5 million shares have been
authorized for grant. A total of 14.0 million shares are available for new grants as of October 1, 2021. The
maximum contractual term of options under the plan is seven years from the date of grant. Options
granted under the plan at the determination of the compensation committee generally vest ratably over
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Annual Report
four years. Restricted stock units granted under the plan at the determination of the compensation
committee generally vest over three or more years. No dividends or dividend equivalents are accumulated
or paid with respect to restricted stock unit awards or other awards until the shares underlying such
awards vest and are issued to the award holder. Performance stock units are contingently granted
depending on the achievement of certain predetermined performance goals and generally vest over one
or more years.
2008 Director Long-Term Incentive Plan. Under this plan, non-employee directors may be granted stock
options, restricted stock units, and other share-based awards. The plan has been approved by the
stockholders. Under the plan a total of 1.5 million shares have been authorized for grant. A total of
0.6 million shares are available for new grants as of October 1, 2021. The maximum contractual term of
options granted under the plan is ten years from the date of grant. Options granted under the plan are
generally exercisable over four years. Restricted stock units granted under the plan generally vest over
one or more years.
Employee Stock Purchase Plans. The Company maintains a domestic and an international employee
stock purchase plan. Under these plans, eligible employees may purchase common stock through payroll
deductions of up to 10% of their compensation. The price per share is the lower of 85% of the fair
market value of the common stock at the beginning or end of each offering period (six months). The
plans provide for purchases by employees of up to an aggregate of 11.6 million shares. Shares of common
stock purchased under these plans in the fiscal years ended October 1, 2021, October 2, 2020, and
September 27, 2019, were 0.2 million, 0.3 million, and 0.3 million, respectively. At October 1, 2021, there
are 1.6 million shares available for purchase. The Company recognized compensation expense of
$8.7 million, $6.6 million, and $5.8 million for the fiscal years ended October 1, 2021, October 2, 2020,
and September 27, 2019, respectively, related to the employee stock purchase plan. The unrecognized
compensation expense on the employee stock purchase plan at October 1, 2021, was $3.1 million. The
weighted average period over which the cost is expected to be recognized is approximately four months.
Stock Options
The following table represents a summary of the Company’s stock options:
Shares
(in millions)
Weighted
average
exercise price
Weighted average
remaining
contractual life
(in years)
Aggregate
intrinsic
value
(in millions)
Balance outstanding at October 2, 2020
Granted
Exercised
Canceled/forfeited
Balance outstanding at October 1, 2021
Exercisable at October 1, 2021
0.4
—
(0.2)
—
0.2
0.2
$ 70.28
$143.87
$ 66.35
$ 31.88
$ 74.68
$ 74.12
1.8
1.7
$16.7
$16.2
The weighted-average grant date fair value per share of employee stock options granted during the
fiscal years ended October 1, 2021, October 2, 2020, and September 27, 2019, was $39.63, $24.49, and
$21.74, respectively.
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129
Restricted and Performance Awards and Units
The following table represents a summary of the Company’s restricted and performance awards and units:
Non-vested awards outstanding at October 2, 2020
Granted(1)
Vested
Canceled/forfeited
Non-vested awards outstanding at October 1, 2021
Shares
(in millions)
Weighted average
grant date fair value
2.9
1.5
(1.1)
(0.6)
2.7
$ 94.77
$148.96
$102.94
$105.34
$118.90
(1)
includes performance stock awards granted and earned assuming target performance under the underlying performance
metrics
The weighted-average grant date fair value per share for awards granted during the fiscal years ended
October 1, 2021, October 2, 2020, and September 27, 2019, was $148.96, $99.68, and $78.41, respectively
The following table summarizes the total intrinsic value for stock options exercised and awards vested
(in millions):
Awards
Options
Valuation and Expense Information
Fiscal Years Ended
October 1,
2021
October 2,
2020
September 27,
2019
$167.4
$ 18.6
$100.9
$ 44.2
$67.7
$26.4
The following table summarizes pre-tax share-based compensation expense by financial statement line
and related tax benefit (in millions):
Cost of goods sold
Research and development
Selling, general and administrative
Total share-based compensation expense
Share-based compensation tax benefit
Capitalized share-based compensation expense at period end
Fiscal Years Ended
October 1,
2021
October 2,
2020
September 27,
2019
$ 28.9
$ 23.2
85.7
77.3
$191.9
$ 13.5
$ 9.8
68.7
64.7
$156.6
$ 10.3
$ 10.6
$13.0
41.6
25.5
$80.1
$ 1.6
$ 4.7
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Annual Report
The following table summarizes total compensation costs related to unvested share-based awards not
yet recognized and the weighted average period over which it is expected to be recognized at October 1,
2021:
Awards
Options
Unrecognized
compensation cost for
unvested awards
(in millions)
Weighted
average remaining
recognition period
(in years)
$202.0
$ 0.1
2.9
1.3
The fair value of the restricted stock units is equal to the closing market price of the Company’s common
stock on the date of grant.
The Company issued performance stock unit awards during fiscal 2021, fiscal 2020, and fiscal 2019 that
contained market-based conditions. The fair value of these performance stock unit awards was estimated
on the date of the grant using a Monte Carlo simulation with the following weighted average
assumptions:
Volatility of common stock
Average volatility of peer companies
Average correlation coefficient of peer companies
Risk-free interest rate
Dividend yield
Fiscal Year Ended
October 1,
2021
October 2,
2020
September 27,
2019
43.20%
45.96%
0.65
0.25%
1.39%
32.22%
33.96%
0.61
1.62%
1.78%
32.65%
37.07%
0.47
2.98%
1.84%
The fair value of each stock option is estimated on the date of the grant using the Black-Scholes option
pricing model with the following weighted average assumptions:
Expected volatility
Risk-free interest rate
Dividend yield
Expected option life (in years)
Fiscal Years Ended
October 1,
2021
October 2,
2020
September 27,
2019
39.65%
34.26%
34.47%
0.13%
1.39%
4.0
1.65%
1.78%
4.0
2.76%
1.84%
4.0
The Company used a historical volatility calculated by the mean reversion of the weekly-adjusted closing
stock price over the expected life of the options. The risk-free interest rate assumption is based upon
observed treasury bill interest rates appropriate for the expected life of the Company’s employee stock
options. The dividend yield was calculated based on the annualized dividend and the stock price on the
date of grant.
The expected life of employee stock options represents a calculation based upon the historical exercise,
cancellation, and forfeiture experience for the Company across its demographic population. The
Company believes that this historical data is the best estimate of the expected life of a new option and
that generally all groups of the Company’s employees exhibit similar behavior.
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131
11. LEASES
The Company’s lease arrangements consist primarily of corporate, manufacturing, and other facility
agreements as well as various machinery and office equipment agreements. The leases expire at various
dates through 2033, some of which include options to extend the lease term. The options with the
longest potential total lease term consist of options for extension of up to three five-year periods following
expiration of the original lease term.
During the fiscal years ended October 1, 2021, and October 2, 2020, the Company recorded $33.9 million
and $28.1 million of operating lease expense and $3.2 million and $7.6 million of variable lease expense,
respectively. During the fiscal year ended September 27, 2019, the Company recorded $18.7 million
of rent expense. The Company’s finance leases and short-term leases are immaterial.
Supplemental cash information and non-cash activities related to operating leases are as follows (in
millions):
Operating cash outflows from operating leases
Operating lease assets obtained in exchange for new lease liabilities
Fiscal Year Ended
October 1,
2021
October 2,
2020
$32.5
$24.8
$25.4
$31.0
Maturities of lease liabilities under operating leases by fiscal year are as follows (in millions):
2022
2023
2024
2025
2026
Thereafter
Total lease payments
Less: imputed interest
Present value of lease liabilities
Less: current portion (included in other current liabilities)
Total
As of
October 1,
2021
$ 31.9
29.4
24.4
22.3
21.7
69.1
198.8
(21.3)
177.5
(33.0)
$144.5
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Annual Report
Weighted-average remaining lease term and discount rate related to operating leases are as follows:
Weighted-average remaining lease term (years)
Weighted-average discount rate
As of
October 1,
2021
October 2,
2020
7.5
3.1%
8.2
3.3%
12. COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, various lawsuits, claims and proceedings have been, and may in the future be,
instituted or asserted against the Company, including those pertaining to patent infringement, intellectual
property, environmental hazards, product liability and warranty, safety and health, employment, and
contractual matters.
The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property
rights. From time to time, third parties have asserted and may in the future assert patent, copyright,
trademark, and other intellectual property rights to technologies that are important to the Company’s
business and have demanded and may in the future demand that the Company license their technology.
The outcome of any such litigation cannot be predicted with certainty and some such lawsuits, claims,
or proceedings may be disposed of unfavorably to the Company. Generally speaking, intellectual property
disputes often have a risk of injunctive relief, which, if imposed against the Company, could materially
and adversely affect the Company’s financial condition or results of operations. From time to time the
Company may also be involved in legal proceedings in the ordinary course of business.
The Company monitors the status of legal proceedings and other contingencies on an ongoing basis to
ensure loss contingencies are recognized and/or disclosed in its financial statements and footnotes. The
Company does not believe there are any pending legal proceedings that are reasonably possible to
result in a material loss. The Company is engaged in various legal actions in the normal course of business
and, while there can be no assurances, the Company believes the outcome of all pending litigation
involving the Company will not have, individually or in the aggregate, a material adverse effect on its
business or financial statements.
13. GUARANTEES AND INDEMNITIES
The Company has made no significant contractual guarantees for the benefit of third parties. However,
the Company generally indemnifies its customers from third-party intellectual property infringement
litigation claims related to its products and, on occasion, also provides other indemnities related to
product sales. In connection with certain facility leases, the Company has indemnified its lessors for certain
claims arising from the facility or the lease.
The Company indemnifies its directors and officers to the maximum extent permitted under the laws of
the state of Delaware. The duration of the indemnities varies, and in many cases is indefinite. The
indemnities to customers in connection with product sales generally are subject to limits based upon the
amount of the related product sales and in many cases are subject to geographic and other restrictions.
In certain instances, the Company’s indemnities do not provide for any limitation of the maximum potential
Annual Report
133
future payments the Company could be obligated to make. The Company has not recorded any liability
for these indemnities in the accompanying consolidated balance sheets and does not expect that such
obligations will have a material adverse impact on its financial statements.
14. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share (in millions,
except per share amounts):
Net income
Weighted average shares outstanding — basic
Dilutive effect of equity-based awards
Weighted average shares outstanding — diluted
Net income per share — basic
Net income per share — diluted
Anti-dilutive common stock equivalents
Fiscal Years Ended
October 1,
2021
October 2,
2020
September 27,
2019
$1,498.3
$814.8
$853.6
165.2
1.8
167.0
9.07
8.97
—
$
$
168.5
1.4
169.9
$ 4.84
$ 4.80
0.1
173.5
1.0
174.5
$ 4.92
$ 4.89
1.4
Basic earnings per share are calculated by dividing net income by the weighted average number of
shares of the Company’s common stock outstanding during the period. The calculation of diluted earnings
per share includes the dilutive effect of equity-based awards that were outstanding during the fiscal years
ended October 1, 2021, October 2, 2020, and September 27, 2019, using the treasury stock method.
Shares issuable upon the vesting of performance stock awards are likewise included in the calculation of
diluted earnings per share as of the date the condition(s) have been satisfied, assuming the end of the
reporting period was the end of the contingency period. Certain of the Company’s outstanding share-
based awards, noted in the table above, were excluded because they were anti-dilutive, but they could
become dilutive in the future.
15. SEGMENT INFORMATION AND CONCENTRATIONS
The Company has a single reportable operating segment which designs, develops, manufactures, and
markets similar proprietary semiconductor products, including intellectual property. In reaching this
conclusion, management considers the definition of the chief operating decision maker (“CODM”), how
the business is defined by the CODM, the nature of the information provided to the CODM, and how that
information is used to make operating decisions, allocate resources, and assess performance. The
Company’s CODM is the president and chief executive officer. The results of operations provided to and
analyzed by the CODM are at the consolidated level and accordingly, key resource decisions and
assessment of performance are performed at the consolidated level. The Company assesses its
determination of operating segments at least annually.
Disaggregation of Revenue and Geographic Information
The Company presents net revenue by geographic area based upon the location of the OEMs’
headquarters and sales channel as it believes that doing so best depicts how the nature, amount, timing,
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Annual Report
and uncertainty of revenue and cash flows are affected by economic factors. Individually insignificant
OEMs are presented based on sales region. Net revenue by geographic area is as follows (in millions):
United States
China
Taiwan
South Korea
Europe, Middle East, and Africa
Other Asia-Pacific
Total
Net revenue by sales channel is as follows (in millions):
Distributors
Direct customers
Total
Fiscal Years Ended
October 1,
2021
October 2,
2020
September 27,
2019
$3,228.1
$2,012.8
$1,860.4
994.2
404.2
264.5
180.1
38.0
700.7
240.4
254.6
122.9
24.3
718.7
271.1
365.5
134.9
26.2
$5,109.1
$3,355.7
$3,376.8
Fiscal Years Ended
October 1,
2021
October 2,
2020
September 27,
2019
$4,539.7
$2,599.8
569.4
755.9
$5,109.1
$3,355.7
$2,330.9
1,045.9
$3,376.8
The Company’s revenue from external customers is generated principally from the sale of semiconductor
products. Accordingly, the Company considers its product offerings to be similar in nature and therefore
not segregated for reporting purposes.
Net property, plant, and equipment balances, based on the physical locations within the indicated
geographic areas are as follows (in millions):
Japan
Mexico
Singapore
United States
Rest of world
Concentrations
As of
October 1,
2021
October 2,
2020
$ 598.9
$ 507.0
362.9
340.0
183.5
16.3
364.9
237.4
124.8
15.4
$1,501.6
$1,249.5
Financial instruments that potentially subject the Company to concentration of credit risk consist
principally of trade accounts receivable. Trade accounts receivable are primarily derived from sales to
manufacturers of communications and consumer products and electronic component distributors. The
Company performs ongoing credit evaluations of customers.
In fiscal 2021, 2020, and 2019, Apple, through sales to multiple distributors, contract manufacturers, and
direct sales for multiple applications including smartphones, tablets, desktop, and notebook computers,
Annual Report
135
watches and other devices, in the aggregate accounted for 59%, 56%, and 51% of the Company’s net
revenue, respectively.
At October 1, 2021, the Company’s three largest accounts receivable balances comprised 70% of
aggregate gross accounts receivable. This concentration was 70% and 67% at October 2, 2020, and
September 27, 2019, respectively.
16. SUPPLEMENTAL FINANCIAL INFORMATION
Other current liabilities consist of the following (in millions):
Accrued taxes
Operating lease liability
Accrued customer liabilities
Other
Total other current liabilities
Other income (expense), net consists of the following (in millions):
As of
October 1,
2021
October 2,
2020
$ 88.6
$ 31.2
33.0
119.7
45.9
28.2
20.3
28.3
$287.2
$108.0
Interest income
Net gains (losses) on marketable securities
Other income
Other expense
Total other income (expense), net
17. DEBT
Fiscal Years Ended
October 1,
2021
October 2,
2020
September 27,
2019
$ 1.2
0.1
4.2
(6.1)
$(0.6)
$ 9.6
$ 18.8
0.1
6.8
(16.6)
$ (0.1)
—
5.5
(15.3)
$ 9.0
Long-term debt consists of the following (in millions, except percentages):
0.90% Senior Notes due 2023
1.80% Senior Notes due 2026
3.00% Senior Notes due 2031
1.38% Term Loans due 2024
Unamortized debt discount and issuance costs
Total debt
136
As of
Effective Interest
Rate
October 1,
2021
October 2,
2020
1.15%
1.97%
3.13%
1.50%
$ 500.0
$—
500.0
500.0
750.0
(14.4)
—
—
—
—
$2,235.6
$—
Annual Report
Senior Notes
On May 26, 2021, the Company issued $500.0 million of its 0.90% Senior Notes due 2023 (the “2023
Notes”), $500.0 million of its 1.80% Senior Notes due 2026 (the “2026 Notes”), and $500.0 million of its
3.00% Senior Notes due 2031 (the “2031 Notes” and, together with the 2023 Notes and the 2026 Notes,
the “Notes”). The Notes are senior unsecured obligations of the Company and rank equally in right of
payment with all of its existing and future senior unsecured debt but effectively junior to any of the
Company’s senior secured debt to the extent of the value of collateral securing such debt, and are
structurally subordinated to all existing and future obligations of the Company’s subsidiaries. The Notes
will mature on each respective maturity date, unless earlier redeemed in accordance with their terms.
Interest on the Notes is payable on June 1 and December 1 of each year.
The Company may redeem all or a portion of the 2023 Notes at any time after June 1, 2022, and all or a
portion of the 2026 Notes and the 2031 Notes at any time and from time to time prior to maturity, in whole
or in part, for cash at the applicable redemption prices set forth in the respective supplemental indenture.
If the Company undergoes a change of control repurchase event, as defined in the indenture governing
the Notes (as supplemented, the “Indenture”), holders may require the Company to repurchase the Notes
in whole or in part for cash at a price equal to 101% of the principal amount of the Notes to be purchased,
plus any accrued and unpaid interest. As of October 1, 2021, the Company considered the likelihood
of acceleration and recorded the Notes as long-term debt, net of discount and issuance costs, which are
amortized to interest expense over the respective terms of these borrowings.
The Indenture contains customary events of default, including failure to make required payments of
principal and interest, certain events of bankruptcy and insolvency, and default in the performance or
breach of any covenant or warranty contained in the Indenture or the Notes.
Term Credit Agreement
On May 21, 2021, the Company entered into a term credit agreement (the “Term Credit Agreement”)
providing for a $1.0 billion term loan facility (the “Term Loan Facility”). On July 26, 2021, the Company
borrowed $1.0 billion in aggregate principal amount of term loans (the “Term Loans”) under the Term Loan
Facility to finance a portion of the purchase price for the Asset Purchase and to pay fees and expenses
incurred in connection therewith. During fiscal 2021, the Company repaid $250.0 million of outstanding
borrowings under the Term Loans. As of October 1, 2021, there were $750.0 million of borrowings
outstanding under the Term Loan Facility.
Borrowings under the Term Loan Facility are not currently guaranteed by any of the Company’s
subsidiaries. Interest on the Term Loans is payable monthly and is based on the applicable floating
interest rate, plus an applicable margin based on the Company’s public debt credit ratings. The Term
Loans mature on July 26, 2024, and all amounts then-outstanding under the Term Loans, together with
accrued and unpaid interest thereon, are repayable at maturity. There is no premium or penalty for
prepayment.
The Term Credit Agreement contains customary representations and warranties and covenants, including
restrictions on the incurrence of indebtedness by non-guarantor subsidiaries and the creation of liens,
and a financial covenant consisting of a limitation on leverage, defined as consolidated total indebtedness
divided by consolidated earnings before interest, taxes, depreciation, and amortization for the period
of four consecutive quarters not to exceed a ratio of 3.0 to 1.0. The Term Credit Agreement also contains
customary events of default, which include failure to make required payments of principal and interest,
breaches of representations and warranties, changes of control or failures to pay money judgments and
certain defaults in respect of specified material indebtedness, upon the occurrence of which, among other
Annual Report
137
remedies, the lenders may accelerate the maturity of the indebtedness and other obligations under the
Term Credit Agreement.
Revolving Credit Agreement
On May 21, 2021, the Company entered into a revolving credit agreement (the “Revolving Credit
Agreement”) providing for a $750.0 million revolving credit facility (the “Revolver”). The proceeds of the
Revolver will be used for general corporate purposes and working capital needs of the Company and its
subsidiaries.
The Revolver provides for revolving credit borrowings and letters of credit, with sublimits for letters of
credit. The Revolver may be increased in specified circumstances by up to $250.0 million at the discretion
of the lenders. The Revolver matures on July 26, 2026, and all unpaid borrowings, together with accrued
and unpaid interest thereon, are repayable at maturity.
The Revolving Credit Agreement contains customary representations and warranties and covenants,
including restrictions on the incurrence of indebtedness by non-guarantor subsidiaries and the creation
of liens, and a financial covenant consisting of a limitation on leverage, defined as consolidated total
indebtedness divided by consolidated earnings before interest, taxes, depreciation, and amortization
for the period of four consecutive quarters not to exceed a ratio of 3.0 to 1.0. As of October 1, 2021, there
were no borrowings outstanding under the Revolver.
Fair Value of Debt
The Company’s debt is carried at amortized cost and is measured at fair value quarterly for disclosure
purposes. The estimated fair values are based on Level 2 inputs as the fair value is based on quoted prices
for the Company’s debt and comparable instruments in inactive markets. The carrying value of the Term
Loan approximates its fair value as the Term Loan is carried at a market observable interest rate that resets
periodically.
The estimated fair value of debt consists of the following (in millions):
0.90% Senior Notes due 2023
1.80% Senior Notes due 2026
3.00% Senior Notes due 2031
Total debt under Senior Notes
As of
October 1,
2021
October 2,
2020
$ 501.0
507.5
514.6
$1,523.1
$—
—
—
$—
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Annual Report
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
Skyworks Solutions, Inc.:
Opinions on the Consolidated Financial Statements and Internal Control
Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Skyworks Solutions, Inc. and
subsidiaries (the Company) as of October 1, 2021 and October 2, 2020, the related consolidated
statements of operations, comprehensive income, cash flows, and stockholders’ equity for each of
the years in the three-year period ended October 1, 2021, and the related notes (collectively, the
consolidated financial statements). We also have audited the Company’s internal control over financial
reporting as of October 1, 2021, based on criteria established in Internal Control — Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of the Company as of October 1, 2021 and October 2, 2020, and the
results of its operations and its cash flows for each of the years in the three-year period ended October 1,
2021, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of October 1,
2021 based on criteria established in Internal Control — Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
Change in Accounting Principle
As discussed in Note 2 to the consolidated financial statements, the Company changed its method of
accounting for leases in fiscal 2020 due to the adoption of the Financial Accounting Standards Board’s
(FASB) Accounting Standards Codification (ASC) Topic 842, Leases.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining
effective internal control over financial reporting, and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management’s Annual Report on Internal
Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s
consolidated financial statements and an opinion on the Company’s internal control over financial
reporting based on our audits. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect
to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement, whether due to error or fraud, and whether effective
internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks
of material misstatement of the consolidated financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our
audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our
Annual Report
139
audit of internal control over financial reporting included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also
included performing such other procedures as we considered necessary in the circumstances. We believe
that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal
control over financial reporting includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets
that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the
consolidated financial statements that was communicated or required to be communicated to the audit
committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of a critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it
relates.
Evaluation of the acquisition-date fair value of developed technology and in-process research and
development intangible assets
As discussed in Note 3 to the consolidated financial statements, on July 26, 2021, the Company acquired
the Infrastructure and Automotive business of Silicon Laboratories, Inc. (the “Asset Purchase”). As a
result of the Asset Purchase, the Company acquired tangible and intangible net assets, including
developed technology and in-process research and development (IPR&D) with an estimated fair value of
$960.1 million and $591.1 million, respectively.
We identified the evaluation of the acquisition-date fair value of developed technology and IPR&D
acquired in the Asset Purchase as a critical audit matter. Subjective auditor judgment was required to
evaluate the forecasted revenue growth rates and discount rate used in the valuation model to calculate
the acquisition-date fair value of the developed technology and IPR&D. Limited observable market
information was available, and the fair value of the developed technology and IPR&D was sensitive to
changes to these assumptions.
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Annual Report
The following are the primary procedures we performed to address this critical audit matter. We evaluated
the design and tested the operating effectiveness of certain internal controls over the Company’s
acquisition-date fair value process, including controls over the forecasted revenue growth rates and the
discount rate. We evaluated the forecasted revenue growth rates used to determine the fair value of
acquired developed technology and IPR&D in relation to the past performance of the acquired business
as well as current industry forecasts. In addition, we involved valuation professionals with specialized skills
and knowledge, who assisted in evaluating the Company’s discount rate, by comparing it against a
discount rate that was developed using publicly available market data for comparable entities.
/s/ KPMG LLP
We have served as the Company’s auditor since 2002.
Irvine, California
November 24, 2021
Annual Report
141
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
Management’s Annual Report on Internal Control Over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal
control over financial reporting for the Company. Internal control over financial reporting is defined in
Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the
supervision of, the Company’s principal executive and principal financial officers and effected by the
Company’s Board of Directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and includes those policies and
procedures that:
• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the assets of the Company;
• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with authorizations of management
and directors of the Company; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
The Company’s management assessed the effectiveness of the Company’s internal control over financial
reporting as of October 1, 2021. In making this assessment, the Company’s management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
2013 Internal Control-Integrated Framework.
Based on their assessment, management concluded that, as of October 1, 2021, the Company’s internal
control over financial reporting is effective based on those criteria.
The Company’s independent registered public accounting firm has issued an audit report on the
effectiveness of the Company’s internal control over financial reporting as stated within their report
which appears herein.
142
Annual Report
Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
Market Information and Dividends
Our common stock is traded on the Nasdaq Global Select Market under the symbol “SWKS”.
The number of stockholders of record of our common stock as of November 4, 2021, was 9,729. On
November 4, 2021, the Company announced that the Board of Directors had declared a cash dividend
of $0.56 per share of common stock, payable on December 14, 2021, to stockholders of record as of
November 23, 2021. We intend to continue to pay quarterly dividends subject to capital availability
and our view that cash dividends are in the best interests of our stockholders. Future cash dividends may
be affected by, among other items, our views on potential future capital requirements, including those
relating to research and development, creation and expansion of sales distribution channels and
investments and acquisitions, legal risks, stock repurchase programs, debt issuances and repayments,
changes in federal and state income tax law, and changes to our business model.
Issuer Purchases of Equity Securities
The following table provides information regarding repurchases of common stock made during the
fiscal quarter ended October 1, 2021:
Period
7/3/21-7/30/21
7/31/21-8/27/21
8/28/21-10/1/21
Total
Number of
Shares
Purchased
—
Average
Price Paid
per Share
—
9,117(2)
$180.66
—
9,117
—
Total Number
of Shares
Purchased
as Part of
Publicly
Announced
Plans
or Programs(1)
—
—
—
—
Approximate
Dollar Value of
Shares that
May Yet Be
Purchased
Under the
Plans
or Programs(1)
$2.0 billion
$2.0 billion
$2.0 billion
(1) We announced on January 28, 2021, that our Board of Directors had approved a stock repurchase program on January 26,
2021, which authorizes the repurchase of up to $2.0 billion of our common stock from time to time on the open market or in
privately negotiated transactions as permitted by securities laws and other legal requirements and which expires on
January 26, 2023.
(2) Represents shares repurchased by us at the fair market value of the common stock as of the applicable purchase date, in
connection with the satisfaction of tax withholding obligations under equity award agreements.
Annual Report
143
Comparative Stock Performance Graph
The following graph shows the change in Skyworks’ cumulative total stockholder return for the last five
fiscal years, based upon the market price of Skyworks’ common stock, compared with the cumulative total
return on: (i) the Standard & Poor’s 500 Index and (ii) the Standard & Poor’s 500 Semiconductor Index.
The graph assumes a total initial investment of $100 on September 30, 2016, and shows a “Total Return”
that assumes reinvestment of dividends, if any, and is based on market capitalization at the beginning
of each period.
Comparison of Cumulative Five-Year Total Return
Skyworks Solution, Inc.
S&P 500 Index
S&P 500 Semiconductors
S
R
A
L
L
O
D
400
300
200
100
0
09/30/16
09/29/17
09/28/18
09/27/19
10/02/20
10/01/21
Years Ended
Total Return to Stockholders
(Includes reinvestment of dividends)
ANNUAL RETURN PERCENTAGE
Company Name / Index
09/29/17
09/28/18
09/27/19
10/02/20
10/01/21
Skyworks Solutions, Inc.
S&P 500 Index
S&P 500 Semiconductors
35.54
18.61
26.71
(9.80)
17.91
27.59
(12.75)
3.72
1.22
92.54
15.25
50.06
13.02
32.06
36.11
Years Ended
INDEXED RETURNS
Company Name / Index
Skyworks Solutions, Inc.
S&P 500 Index
S&P 500 Semiconductors
Base Period
9/30/16
100
100
100
09/29/17
09/28/18
09/27/19
10/02/20
10/01/21
135.54
118.61
126.71
122.26
139.85
161.66
106.67
145.06
163.64
205.39
167.18
245.56
232.13
220.77
334.23
Years Ended
144
Annual Report
50068_Skyworks_2021_AR_Cover.indd 1
50068_Skyworks_2021_AR_Cover.indd 1
3/25/22 8:51 AM
3/25/22 8:51 AM
Your Vote Counts!
2022 Annual Meeting of
SKYWORKS SOLUTIONS, INC.
May 11, 2022, at 11:00 a.m. PDT
Exclusively via live audio webcast at
www.virtualshareholdermeeting.com/SWKS2022
Vote by 11:59 p.m. EDT on May 10, 2022
for shares held directly and by 11:59 p.m. EDT
on May 6, 2022 for shares held in a Plan.
SKYWORKS SOLUTIONS, INC.
ATTN: CORPORATE SECRETARY
5260 CALFORNIA AVENUE
IRVINE, CA 92617-3073
D71197-P69582-Z82064
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders To Be Held on May 11, 2022
You invested in SKYWORKS SOLUTIONS, INC. and it’s time to vote!
You have the right to vote on proposals being presented at the Annual Meeting.
Get informed before you vote
View the Annual Report and Proxy Statement online by visiting www.ProxyVote.com OR you can receive a free paper or email
copy of the proxy material(s) by requesting prior to April 27, 2022. If you would like to request a copy of the proxy material(s)
for this and/or future stockholder meetings, you may (1) visit www.ProxyVote.com, (2) call 1-800-579-1639 or (3) send an email
to sendmaterial@proxyvote.com. If sending an email, please include your control number (indicated below) in the subject line.
Unless requested, you will not otherwise receive a paper or email copy.
For complete information and to vote, visit www.ProxyVote.com
Control #
Smartphone users
Point your camera here to
access the proxy materials
and vote without entering a
control number
Vote Virtually at the Meeting*
May 11, 2022
11:00 a.m. PDT
Virtually at:
www.virtualshareholdermeeting.com/SWKS2022
You can vote by mail by requesting a paper copy of the materials, which will include a proxy card.
*Please check the meeting materials for any special requirements for meeting attendance.
V1.1
SAMPLE Vote at www.ProxyVote.com
THIS IS NOT A VOTABLE BALLOT
This is an overview of the more complete proxy materials that
are available to you on the Internet. We encourage you to access
and review all of the important information contained in the
proxy materials before voting.
Voting Items
1. To elect the following eight individuals nominated to serve as directors of the Company with terms expiring at the next
Annual Meeting of Stockholders.
Board
Recommends
Nominees:
1a. Alan S. Batey
1b. Kevin L. Beebe
1c. Liam K. Griffin
1d. Eric J. Guerin
1e. Christine King
1f. Suzanne E. McBride
1g. David P. McGlade
1h. Robert A. Schriesheim
2. To ratify the selection by the Company’s Audit Committee of KPMG LLP as the independent registered public accounting
firm for the Company for fiscal year 2022.
3. To approve, on an advisory basis, the compensation of the Company’s named executive officers, as described in the
Company’s Proxy Statement.
4. To approve an amendment to the Company’s Restated Certificate of Incorporation to eliminate the supermajority vote
provisions relating to stockholder approval of a merger or consolidation, disposition of all or substantially all of the
Company’s assets, or issuance of a substantial amount of the Company’s securities.
5. To approve an amendment to the Company’s Restated Certificate of Incorporation to eliminate the supermajority vote
provisions relating to stockholder approval of a business combination with any related person.
6. To approve an amendment to the Company’s Restated Certificate of Incorporation to eliminate the supermajority vote
provision relating to stockholder amendment of charter provisions governing directors.
7. To approve an amendment to the Company’s Restated Certificate of Incorporation to eliminate the supermajority vote
provision relating to stockholder amendment of the charter provision governing action by stockholders.
For
For
For
For
For
For
For
For
For
For
For
For
For
For
8. To approve a stockholder proposal regarding the Company’s stockholder special meeting right.
Against
Prefer to receive an email instead? While voting on www.ProxyVote.com, be sure to click “Sign up for E-delivery”.
D71198-P69582-Z82064
SAMPLE
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Annual Report and Proxy Statement are available at www.skyworksinc.com/annualreport.
D71172-P69582-Z82064
SKYWORKS SOLUTIONS, INC.
Annual Meeting of Stockholders
May 11, 2022, 11:00 a.m. PDT
This proxy is solicited by the Board of Directors
The stockholder(s) hereby appoint(s) Liam K. Griffin and Robert J. Terry, or either of them, as proxies, each with the
power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse
side of this ballot, all of the shares of common stock of SKYWORKS SOLUTIONS, INC. that the stockholder(s) is/are
entitled to vote at the Annual Meeting of Stockholders to be held at 11:00 a.m., PDT on May 11, 2022, held virtually at
www.virtualshareholdermeeting.com/SWKS2022, and any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this
proxy will be voted in accordance with the Board of Directors' recommendations.
Continued and to be signed on reverse side
SAMPLE SKYWORKS SOLUTIONS, INC.
ATTN: CORPORATE SECRETARY
5260 CALFORNIA AVENUE
IRVINE, CA 92617-3073
VIEW MATERIALS & VOTE w
SCAN TO
VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of
information. Vote by 11:59 p.m. Eastern Daylight Time on May 10, 2022 for shares
held directly and by 11:59 p.m. Eastern Daylight Time on May 6, 2022 for shares held
in a Plan. Have your proxy card in hand when you access the website and follow the
instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/SWKS2022
You may attend the meeting via the Internet and vote during the meeting. Have
the information that is printed in the box marked by the arrow available and follow
the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m.
Eastern Daylight Time on May 10, 2022 for shares held directly and by 11:59 p.m.
Eastern Daylight Time on May 6, 2022 for shares held in a Plan. Have your proxy card
in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we
have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way,
Edgewood, NY 11717.
SKYWORKS SOLUTIONS, INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR
NAMED IN PROPOSAL 1, "FOR" PROPOSALS 2 THROUGH 7,
AND “AGAINST” PROPOSAL 8.
1.
To elect the following eight individuals nominated to serve
as directors of the Company with terms expiring at the next
Annual Meeting of Stockholders.
Nominees:
1a. Alan S. Batey
1b. Kevin L. Beebe
1c.
Liam K. Griffin
1d. Eric J. Guerin
1e. Christine King
1f.
Suzanne E. McBride
1g. David P. McGlade
1h. Robert A. Schriesheim
D71171-P69582-Z82064
For Against Abstain
!
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!
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2.
3.
4.
5.
6.
7.
8.
To ratify the selection by the Company’s Audit Committee of
KPMG LLP as the independent registered public accounting
firm for the Company for fiscal year 2022.
To approve, on an advisory basis, the compensation of the
Company’s named executive officers, as described in the
Company’s Proxy Statement.
To approve an amendment to the Company’s Restated
Certificate of Incorporation to eliminate the supermajority
vote provisions relating to stockholder approval of a merger
or consolidation, disposition of all or substantially all of the
Company’s assets, or issuance of a substantial amount of the
Company’s securities.
To approve an amendment to the Company’s Restated
Certificate of Incorporation to eliminate the supermajority
vote provisions relating to stockholder approval of a business
combination with any related person.
To approve an amendment to the Company’s Restated
Certificate of Incorporation to eliminate the supermajority
vote provision relating to stockholder amendment of charter
provisions governing directors.
To approve an amendment to the Company’s Restated
Certificate of Incorporation to eliminate the supermajority
vote provision relating to stockholder amendment of the
charter provision governing action by stockholders.
To approve a stockholder proposal regarding the Company's
stockholder special meeting right.
For Against Abstain
!
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!
!
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!
!
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should
each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
Signature [PLEASE SIGN WITHIN BOX]DateSignature (Joint Owners)DateTO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:KEEP THIS PORTION FOR YOUR RECORDSDETACH AND RETURN THIS PORTION ONLYTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.SAMPLE