March 28, 2024
Dear Stockholder:
I am pleased to invite you to attend the 2024 Annual Meeting of Stockholders (the “Annual Meeting”)
of Skyworks Solutions, Inc., to be held at:
Time:
Date:
11:00 a.m. PDT
Tuesday, May 14, 2024
Website: www.virtualshareholdermeeting.com/SWKS2024
You will be able to attend and participate in the Annual Meeting online at the website 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 2024 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 Fellow Stockholder:
On behalf of the entire Board of Directors, I thank you for your continued support of Skyworks. Despite
macroeconomic headwinds, our resilient business model and operational excellence allowed us to deliver
solid results in fiscal year 2023, including generating annual operating cash flow of $1.856 billion, up 30%
year-over-year. In addition, the Company continued making investments in strategic growth areas,
expanding our customer base and diversifying the reach of our business.
The Board remains committed to providing robust oversight of the Company’s strategy, including key risks
and opportunities. As we head toward our 2024 Annual Meeting, I would like to share some important focus
areas from the past year:
•
•
•
Board Oversight of Risk: Our Board is responsible for risk oversight and treats that role with the
utmost importance. While the management team is responsible for day-to-day risk management and
for bringing to our attention any significant risks, the Board regularly engages in both the processes
management utilizes to identify, assess and manage risk and ongoing plans to address any identified
risks. Additionally, we regularly consider business risk in connection with our evaluation of corporate
strategy, including in our annual review of the Company’s strategic plan. Our Board is comprised of
experienced and qualified directors who are well-positioned to oversee long-term corporate strategy
and operational execution, and their diverse qualifications and viewpoints add significant contributions
to our overall risk oversight function.
Regular Engagement with Stockholders: Our Board believes that stockholder engagement is a
fundamental element of sound corporate governance. In 2023, we continued a high level of
engagement with stockholders. The Company proactively reached out to stockholders representing
approximately 51% of our outstanding stock and spoke with every such stockholder that wanted to
engage. Topics of discussion varied and included executive compensation, corporate governance and
sustainability efforts. Notably, coming out of our discussions with stockholders, we made changes to
our compensation program by returning the short-term incentive performance period for fiscal year
2024 from two semi-annual periods to one annual period. Dialogue with stockholders throughout the
year is critical to providing the Board with important feedback needed to better understand our
stockholders’ priorities on a wide range of topics. I look forward to continued engagement with our
stockholders.
Corporate Responsibility and Sustainability: The Board, and in particular our Nominating and
Corporate Governance Committee, oversees corporate responsibility and sustainability. As part of our
commitment, we disclose key initiatives and progress toward our sustainability goals. Last year, we
published our 2022 Sustainability Report, where we provided key updates on many topics, including
environmental responsibility, cybersecurity, supply chain management, health and safety, human
rights, ethics, and human capital management. On environmental topics in particular, we were pleased
to share improvements in water use efficiency, hazardous waste generation rates, and year-over-year
emissions rate reductions in scope 1 and 2 CO2e emissions. We are also excited about our continued
improvements in emissions and water use reductions in 2023 and our focus on driving further emission
and water use reductions throughout 2024 and in the future. During our stockholder engagement in
the fall and winter of 2023, many of our stockholders provided feedback in support of our sustainability
journey and encouraged us to continue on our path.
Thank you for your investment in Skyworks and continued confidence in the Board. We look forward to
continuing our dialogue with you in the year to come.
With appreciation,
Christine King
Lead Independent Director
Chairman, Compensation Committee
Member, Audit Committee
NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS
Date and Time
May 14, 2024
11:00 a.m. PDT
Location
www.virtualshareholdermeeting.com/
SWKS2024
Record Date
March 20, 2024
Items of Business
1.
2.
To elect nine individuals nominated to serve as directors of the Company with terms expiring at
the 2025 Annual Meeting of Stockholders and named in the Proxy Statement;
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 2024;
3.
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;
To approve the Company’s Second Amended and Restated 2015 Long-Term Incentive Plan;
To approve an amendment to the Company’s 2002 Employee Stock Purchase Plan, as amended;
To consider two stockholder proposals, if properly presented at the Annual Meeting; and
To transact such other business as may properly come before the Annual Meeting.
8.
9.
10.
11.
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.
By Order of the Board of Directors,
Robert J. Terry
Senior Vice President, General Counsel and Secretary
Irvine, California • March 28, 2024
PROXY STATEMENT 2024
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
16
17
21
25
26
26
Proposal 2: Ratification of Independent
Registered Public Accounting Firm . . . . . . . 28
Audit Fees . . . . . . . . . . . . . . . . . . . . . . . .
29
Report of the Audit Committee . . . . . . . . . . 30
Proposal 3: Advisory Vote on the
Compensation of Our Named Executive
Officers (“Say-on-Pay” Vote)
. . . . . . . . . . . . 31
Information About Executive and Director
Compensation . . . . . . . . . . . . . . . . . . . . . . . 32
Summary and Highlights . . . . . . . . . . . . .
32
Compensation Discussion and
Analysis . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation Tables for Named
Executive Officers . . . . . . . . . . . . . . . . . .
Pay Versus Performance . . . . . . . . . . . . . .
Director Compensation . . . . . . . . . . . . . .
33
47
58
62
Compensation Committee Report . . . . . . . 64
Proposals 4 – 7: Approval of Amendments
to Charter to Eliminate Supermajority Vote
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Proposal 8: Approval of the Company’s
Second Amended and Restated 2015
Long-Term Incentive Plan . . . . . . . . . . . . . . 71
Proposal 9: Approval of Amendment to
the 2002 Employee Stock Purchase
Plan, as amended . . . . . . . . . . . . . . . . . . . . . 86
Proposal 10: Stockholder Proposal
Regarding Named Executive Officer
Termination Payments . . . . . . . . . . . . . . . . . 92
Statement of Opposition by the Board of
Directors . . . . . . . . . . . . . . . . . . . . . . . . .
94
Proposal 11: Stockholder Proposal
Regarding Adoption of Greenhouse Gas
Emissions Reduction Targets . . . . . . . . . . . . 96
Statement of Opposition by the Board of
Directors . . . . . . . . . . . . . . . . . . . . . . . . .
98
Security Ownership of Certain Beneficial
Owners and Management
. . . . . . . . . . . . . 100
General Information . . . . . . . . . . . . . . . . . . . 102
Other Proposed Action . . . . . . . . . . . . . . . . 108
Other Matters . . . . . . . . . . . . . . . . . . . . . . . . 108
Appendix A: Unaudited Reconciliations of
Non-GAAP Financial Measures . . . . . . . . . . 110
Discussion Regarding the Use of Non-
GAAP Financial Measures . . . . . . . . . . . . . 111
Appendix B: Provisions of Charter Subject
to Potential Amendment . . . . . . . . . . . . . . . 113
Annex 1: Second Amended and Restated
2015 Long-Term Incentive Plan . . . . . . . . . . 120
Annex 2: 2002 Employee Stock Purchase
Plan, as amended . . . . . . . . . . . . . . . . . . . . . 143
Annex 3: Amendment to 2002 Employee
Stock Purchase Plan, as amended . . . . . . . . 152
Proxy Statement
PROXY STATEMENT SUMMARY
This summary highlights financial and other accomplishments during fiscal year 2023, 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 2024 Annual Meeting of Stockholders, and we
encourage you to read the entire Proxy Statement before voting your shares.
2024 Annual Meeting of Stockholders
Date and Time
May 14, 2024
11:00 a.m. PDT
Location
www.virtualshareholdermeeting.com/
SWKS2024
Record Date
March 20, 2024
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.
Required Vote
for Approval
Board
Recommendation
See
Page
Election of Directors
For each director, majority of votes
cast
FOR Each
Nominee
Ratification of Appointment of
KPMG LLP
Majority of votes present and
entitled to vote
Advisory Vote to Approve
Compensation of Named Executive
Officers
Approve Amendments to Restated
Certificate of Incorporation to
Eliminate Supermajority Vote
Provisions
Approve Second Amended and
Restated 2015 Long-Term Incentive
Plan
Approve Amendment to 2002
Employee Stock Purchase Plan, as
Amended
Two Stockholder Proposals, if
Properly Presented at the Annual
Meeting
Majority of votes present and
entitled to vote
80% (or 90% in case of Proposal 5)
of shares outstanding
Majority of votes present and
entitled to vote
Majority of votes present and
entitled to vote
Majority of votes present and
entitled to vote
AGAINST
FOR
FOR
FOR
FOR
FOR
Proposal
1.
2.
3.
4 – 7.
8.
9.
10 – 11.
Proxy Statement
8
28
31
65
71
86
92
1
Financial Highlights from Fiscal Year 2023
During the fiscal year ended September 29, 2023 (“fiscal year 2023”), the Company delivered solid
results despite ongoing macroeconomic volatility, reflecting our resilient business model and operational
excellence. We continued making strategic investments in growth areas, expanded our customer base
and diversified the reach of our business, positioning us to capture new opportunities across a range of
markets benefitting from secular trends.
• Delivered net revenue of $4.8 billion
• Achieved operating margin of 23.6% on a GAAP basis (33.6% on a non-GAAP basis)(1)
• Posted diluted earnings per share of $6.13 on a GAAP basis ($8.52 on a non-GAAP basis)(1)
• Generated annual operating cash flow of $1.856 billion, up 30% year-over-year and free cash
flow of $1.646 billion, up 76% year-over-year
• Raised our quarterly dividend from $0.62 per share to $0.68 per share
• Returned approximately $580 million to stockholders through repurchasing 1.9 million shares of
our common stock for $175 million and through payments of $405 million in cash dividends
• Repaid $900 million of debt
• Total stockholder return over the last 10 years was 360%, compared to 208% for the companies in
the S&P 500 Index(2)
Quarterly Dividends:
Fiscal Years 2015 — 2023
$1.82
$1.58
$0.50
$1.34
$0.44
$2.54
$0.68
$0.62
$2.30
$0.62
$2.06
$0.56
$0.56
$0.50
$0.44
$0.50
$0.44
$0.38
$0.38
$0.62
$0.56
$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
$0.38
$0.44
$0.50
$0.56
$0.62
Q4
Q3
Q2
Q1
$0.65
$0.26
$0.13
$0.13
$0.13
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
(1) Please see table on page 110 for a full reconciliation of non-GAAP results to GAAP results.
(2) Source: FactSet. Represents TSR for the ten-year period ended September 29, 2023.
2
Proxy Statement
Other Accomplishments from Fiscal Year 2023
Throughout fiscal year 2023, our connectivity and analog mixed-signal solutions enabled a broad set of
applications across mobile, IoT, automotive, industrial, data center and 5G wireless infrastructure, providing
essential technologies and products to industry-leading customers throughout the world. Highlights
from the year include:
• Secured high-performance 5G content for premium Android smartphones
• Supported launches of Wi-Fi 6E and 7 platforms for network communication, consumer electronics
and infrastructure applications
• Achieved design wins for onboard chargers, battery management systems and in-vehicle
infotainment systems across leading automotive OEMs
• Ramped timing solutions for AI-enabled data centers at a leading cloud provider
• Delivered 5G small cell deployments with leading global operators
• Enabled next-generation IoT solutions supporting smart energy and factory automation
Non-GAAP Free Cash Flow(3)
$1.6B
$0.8B
$0.4B
FY13
FY18
FY23
(3) Please see table on page 110 for a full reconciliation of non-GAAP results to GAAP results.
Proxy Statement
3
Our Director Nominees
Nine nominees, each of whom currently serves as a director, have been nominated for election to our
Board of Directors (the “Board”) to serve until the 2025 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 nine
nominees, their age, the year such nominees were first elected as directors of the Company, their principal
occupation, their independence status, their Board committee membership(s) as of March 1, 2024, and
the number of other public company boards on which they serve.
Name
Liam K. Griffin
Chairman of the Board
Director
Since
Age
57
2016
Principal Occupation
Independent
Chairman, CEO and President,
Skyworks Solutions
Christine King
Lead Independent Director
74
2014
Retired Executive Chairman,
QLogic
Alan S. Batey
61
2019
Kevin L. Beebe
Eric J. Guerin
Suzanne E. McBride
David P. McGlade
Robert A. Schriesheim
Maryann Turcke
65
52
55
63
63
58
2004
2022
2022
2005
2006
2023
Retired EVP and President of
North America, General Motors
President and CEO, 2BPartners
CFO, RB Global, Inc.
COO, Iridium Communications
Retired Executive Chairman,
Intelsat
Chairman, Truax Partners
Former Chief Operating
Officer, National Football
League
•
•
•
•
•
•
•
•
Committee
Memberships
—
AC, CC (C)
CC
NCGC (C)
AC
NCGC
AC (C), NCGC
AC, CC
NCGC
Other Public
Company
Boards
—
—
—
2
—
1
—
1
2
“AC” indicates Audit Committee, “CC” indicates Compensation Committee, “NCGC” indicates Nominating and Corporate
Governance Committee, and “(C)” indicates Committee Chair
The nine 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)
< 5 Years
88.8%
Independent
9.4
Years Average
Tenure
5-10 Years
> 10 Years
44.4%
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
Executive Sessions
Our Lead Independent Director role has a robust set of duties set forth in our
corporate governance guidelines
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
Executive Succession Plan
Our Board regularly takes steps to refresh its membership, including adding three
new directors since 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
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
Regular Stockholder Engagement
Director Commitments
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
We regularly conduct outreach to our stockholders to understand their
perspectives on governance matters
All directors are subject to our policy on director public company board
commitments and annual review by the Nominating and Corporate Governance
Committee regarding those commitments
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 2023 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
29%
Base
Salary
7%
Short-Term
Incentive
11%
Long-Term
Stock-Based
Incentive
82%
Performance
Shares
53%
At Risk
(gray circle)
Subject to
Performance
Metrics
(blue circle)
Restricted
Stock Units
29%
Base
Salary
11%
Long-Term
Stock-Based
Incentive
80%
Short-Term
Incentive
9%
Performance
Shares
51%
6
Proxy Statement
Stockholder Engagement
Engagement with the Company’s stockholders is a critical part of our commitment to good corporate
governance, and we regularly conduct outreach to our stockholders to understand their perspectives on
governance matters. Most recently, we engaged in formal stockholder outreach following the 2023
Annual Meeting and through December 2023. We initiated outreach to more than twenty of our largest
institutional stockholders representing approximately 51% of the Company’s shares outstanding.
Stockholders representing approximately 36% of the Company’s shares outstanding responded to the
outreach, and we held engagement meetings with those stockholders who wanted to meet. Our Lead
Independent Director also participated in select engagement.
We contacted stockholders
representing 51% of
outstanding shares
Stockholders representing
36% of outstanding
shares responded
to our outreach
Topics of conversation in the engagement meetings included executive compensation, our corporate
governance practices, our sustainability accomplishments and progress, our efforts to eliminate the
supermajority vote provisions from our Restated Certificate of Incorporation, and other topics, with many
stockholders expressing approval of the Company’s strategy, performance and management. In
addition, stockholders broadly shared support for the Company’s demonstrated history of robust
disclosure and stockholder responsiveness, including relating to compensation policies and plan designs.
In some cases, investors asked for, and we provided, more information on the rationale behind our
metrics and performance periods.
Proxy Statement
7
PROPOSAL 1:
ELECTION OF DIRECTORS
Under this Proposal 1, you are being asked to
consider nine nominees for election to our Board
of Directors to serve until the 2025 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
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
Maryann Turcke
Number of Meetings in FY2023
Director
Since
2016
2014
2019
2004
2022
2022
2005
2006
2023
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.
Proxies cannot be voted for a greater number of
individuals than the number of nominees named
in this Proxy Statement.
The following table lists the nine 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, 2024. The table also lists the number of
meetings held by each committee during fiscal
year 2023.
Independent
AC
CC
NCGC
Committee Memberships
•
•
•
•
•
•
•
•
•
•
C
•
8
C
•
•
3
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 nine of the
nominees.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE ELECTION OF EACH OF THE NINE NOMINEES IN PROPOSAL 1
VOTE
Proxy Statement
9
Nominees for Election
Liam K. Griffin, Chairman, Chief Executive Officer and President
Director since: 2016 • Age: 57
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 over the past two decades.
Committee(s)
• None
Other Public Company Boards
Current
• None
Past 5 Years
• National Instruments Corporation
(until 2023)
• Vicor Corporation (until 2019)
Christine King, Lead Independent Director
Director since: 2014 • Age: 74
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)
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: 61
Committee(s)
• Compensation
Other Public Company Boards
Current
• None
Past 5 Years
• None
Kevin L. Beebe
Director since: 2004 • Age: 65
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
Director since: 2022 • Age: 52
Committee(s)
• Audit
Other Public Company Boards
Current
• None
Past 5 Years
• Natus Medical Incorporated (until
2022)
Eric J. Guerin
Mr. Guerin serves as Chief Financial Officer of RB Global (a
publicly traded provider of insights, services and transaction
solutions for commercial assets and vehicles), a role he has held
since January 2024. Previously, Mr. Guerin served as Senior Vice
President and Chief Financial Officer of Veritiv Corporation (a
formerly publicly traded provider of packaging and hygiene
products), from March 2023 to December 2023 and as its Senior
Vice President-Finance from January 2023 to March 2023. Prior to
that, he served as Executive Vice President and Chief Financial
Officer of CDK Global (a formerly publicly traded provider of
integrated technology solutions to the automotive industry) from
2021 to 2022. 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.
Suzanne E. McBride
Director since: 2022 • Age: 55
Committee(s)
• Nominating and Corporate
Governance
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 served from
June 2016 to January 2019 as 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). 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: 63
Mr. McGlade served as Chairman of the Board of Intelsat S.A. (a
publicly traded worldwide provider of satellite communication
services) from April 2013 to February 2022. He served as Executive
Chairman of Intelsat from April 2015 to March 2018, prior to which
he served as Chairman and Chief Executive Officer. 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.
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 approximately four decades of
experience in the telecommunications industry.
Committee(s)
• Audit (Chair)
• Nominating and Corporate
Governance
Other Public Company Boards
Current
• None
Past 5 Years
• Intelsat S.A. (until 2022)
Robert A. Schriesheim
Director since: 2006 • Age: 63
Committee(s)
• Audit
• Compensation
Other Public Company Boards
Current
• Houlihan Lokey, Inc., Lead
Independent Director
Past 5 Years
• Frontier Communications Corporation
(until 2021)
• NII Holdings, Inc. (until 2019)
Mr. Schriesheim has been Chairman of Truax Partners LLC (a
consulting firm) since 2018 and has served as Adjunct Associate
Professor of Finance at the University of Chicago Booth School of
Business since September 2023. 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.
Proxy Statement
13
Maryann Turcke
Director since: 2023 • Age: 58
Ms. Turcke most recently served as a senior advisor at Brookfield
Asset Management from September 2020 to September 2022.
Previously, Ms. Turcke served as Chief Operating Officer of the
National Football League (NFL) from January 2018 to
September 2020 and as a Senior Advisor for the NFL from
September 2020 to May 2021. She joined the league as President
of NFL Network, Digital Media, NFL Films and IT in April 2017.
Prior to the NFL, Ms. Turcke served for more than a decade in
various leadership roles within BCE Inc. (a publicly traded
communications company formerly known as Bell Canada
Enterprises), including serving from April 2015 to February 2017
as president of Bell Media, a division of BCE.
Qualifications: We believe that Ms. Turcke’s qualifications to serve
as a director include her significant operational, management and
financial experience, including in the telecommunications industry.
Committee(s)
• Nominating and Corporate
Governance
Other Public Company Boards
Current
• Frontier Communications Parent, Inc.
• Royal Bank of Canada
Past 5 Years
• Northern Star Investment Corp. II (until
2023)
14
Proxy Statement
The table below summarizes the key qualifications
and attributes relied upon by the Board in
nominating nine 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
T urcke
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
Age
2
3
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
65
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
61
2
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
57
1
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
52
2
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
74
1
(cid:2)
(cid:2)
(cid:2)
(cid:2)
3
(cid:2)
(cid:2)
(cid:2)
55
1
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
63
1
2
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
63
2
1
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
58
1. Current or Former Section 16 Officer under applicable SEC rules
2. Per designation by Skyworks' Board of Directors
3. In her role as Chief Operations Officer of Iridium Communications, Inc., Ms. McBride has had management responsibility for cybersecurity
as of the fourth calendar quarter of 2023
Proxy Statement
15
Board Diversity Matrix
The following matrix includes all directors serving as of March 1, 2024.
Total Number of Directors
9
Board Diversity Matrix (As of March 1, 2024)
Female
Male
Non-Binary
Did Not Disclose
Gender
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+
Did Not Disclose Demographic Background
3
3
6
1
5
16
Proxy Statement
Corporate Governance
Stockholder Engagement
Engagement with the Company’s stockholders is
a critical part of our commitment to good
corporate governance, and we regularly conduct
outreach to our stockholders to better understand
their perspectives on governance matters. Most
recently, we engaged in formal stockholder
outreach following the 2023 Annual Meeting. We
initiated outreach to more than twenty of our
largest institutional stockholders representing
approximately 51% of the Company’s shares
outstanding. Stockholders representing
approximately 36% of the Company’s shares
outstanding responded to the outreach, and we
held engagement meetings with those
stockholders who wanted to meet. Our Lead
Independent Director also participated in select
engagement.
We solicited and received feedback from
institutional stockholders on various key
governance and disclosure topics, including the
following:
• Executive Compensation: Overall, our
institutional stockholders broadly shared
support for the Company’s demonstrated
history of disclosure and stockholder
responsiveness, including relating to
compensation policies and plan designs. In
some cases, investors asked for, and we
provided, more information on the rationale
behind our metrics and performance
periods.The Compensation Committee’s
decision to return the short-term incentive
program for the fiscal year ending
September 27, 2024 (“fiscal year 2024”) from
two semi-annual performance periods to one
annual performance period took into account
feedback from our stockholders.
• Board Refreshment and Diversity: Our
institutional stockholders generally agreed with
the Company’s approach to Board refreshment,
including our prior phased retirement of long-
tenured directors and appointment of new
directors that would add to the diversity of skills
and backgrounds on our Board while
maintaining a balance of tenure on the Board.
In addition, several large stockholders expressed
support for the level of diversity on our Board.
• Sustainability Disclosure: Our institutional
stockholders generally expressed support for
our sustainability journey and appreciated the
additional disclosure contained in our
sustainability report released in 2023, as well as
our overall progress on environmental, social,
and governance (“ESG”) matters, such as specific
short and long-term environmental targets on
greenhouse gas emissions, hazardous waste and
water usage efficiency improvements.
• Human Capital Management: Our institutional
stockholders expressed the importance of
human capital management topics, and many
were pleased with the disclosures we made in
our 2022 Sustainability Report. A few
stockholders had questions about employee
engagement and turnover trends, and we
responded in line with the disclosures we have
made in our 2022 Sustainability Report.
Our Board values the opinions expressed by our
stockholders and will continue to consider voting
results our 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 six (6) times during fiscal year
2023. During fiscal year 2023, 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. 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
Proxy Statement
17
the Company’s website at www.skyworksinc.com.
At the 2023 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 eight of the nine members of
the Board, namely, Alan S. Batey, Kevin L. Beebe,
Eric J. Guerin, Suzanne E. McBride, Christine King,
David P. McGlade, Robert A. Schriesheim, and
Maryann Turcke, 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
met in executive session without management
present four (4) times during fiscal year 2023. The
Lead Independent Director served as presiding
director for these meetings.
Additional Board Service
Directors are expected to commit sufficient time
and attention to the activities of the Board. We
recently amended our corporate governance
guidelines to include a public company board
commitment policy. In accordance with this policy,
except as otherwise approved by the Board:
• an executive officer of the Company who serves
as a director of the Company should not serve
on more than one other public company board;
• a director of the Company who serves as an
executive officer of another public company
should not serve on more than two total public
company boards (including the Company); and
• a director of the Company who does not serve
as an executive officer of any public company
should not serve on more than four total
public company boards (including the
Company).
For purposes of this policy, the term “public
company” means a company with a class of
securities registered pursuant to section 12 of the
Securities Exchange Act of 1934, as amended
(the “Exchange Act”) or subject to the
requirements of section 15(d) of the Exchange
Act.
In addition, the corporate governance guidelines
provide that the Nominating and Corporate
Governance Committee must conduct an annual
review of director commitments to public company
18
Proxy Statement
board service (including any committee chair
role) and any executive officer role (if applicable)
in connection with its recommendation of directors
for election to the Board at the annual meeting
of stockholders. The Nominating and Corporate
Governance Committee conducted a review of
director commitments for our 2024 director
nominees and affirms that all our 2024 director
nominees comply with our public company board
commitment policy.
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
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
guidelines 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, Ms. McBride and Ms. Turcke, 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 current Chairman
and Chief Executive Officer, Mr. Griffin, was
appointed by our Board in May 2016 to serve as
Chief Executive Officer and also as a director, and
was appointed by our Board in May 2021 to be
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 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, 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
Proxy Statement
19
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
• 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.
20
Proxy Statement
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 Exchange Act:
Mr. McGlade (Chairman), Mr. Guerin, 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
Re l at i o n s p o rt i o n o f o u r w e b s i t e 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 2023. The Audit Committee met eight (8)
times during fiscal year 2023.
Audit Committee Financial Expert
The Board has determined that each of the
following members of the Audit Committee 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:
Mr. McGlade (Chairman), Mr. Guerin, Ms. King,
and Mr. Schriesheim.
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. Batey and Mr. Schriesheim.
The Compensation Committee met three (3) times
during fiscal year 2023. 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
Consulting (“Aon”) to assist it in determining the
components and amounts of executive
compensation. The consultant reports directly to
the Compensation Committee, through its
Proxy Statement
21
Chairman, and the Compensation Committee
retains the right to terminate or replace 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), Ms. McBride, Mr. McGlade, and
Ms. Turcke. Mr. Guerin served on the Nominating
and Corporate Governance Committee until
May 10, 2023, when Ms. Turcke was appointed.
The Nominating and Corporate Governance
Committee met three (3) times during fiscal year
2023. 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.
22
Proxy Statement
The committee believes that our Board, taken as a
whole, should embody a diverse set of skills,
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 most recent director search that
culminated with the appointment of Ms. Turcke in
February 2023, 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.
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 For Directors
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 2025 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
notice to the Secretary of the Company at the
address below no earlier than the close of business
on January 14, 2025, and no later than the close
of business on February 13, 2025. In the event that
the 2025 Annual Meeting is advanced by more
than thirty (30) days, or delayed (other than as a
result of adjournment) by more than sixty (60) days,
from the first anniversary of the Company’s 2024
Annual Meeting, then the required notice must be
delivered in writing to the Secretary of the
Company at the address below no earlier than
the close of business on the 120th day prior to the
date of the 2025 Annual Meeting and no later
than the close of business on the later of the 90th
day prior to the 2025 Annual Meeting or the 10th
day following the day on which the public
announcement of the date of the 2025 Annual
Meeting is first made by the Company. For
nominees for election to the Board proposed by
stockholders to be considered, and in accordance
with the Company’s Policy Governing Director
Nominations and Security Holder — Board
Communications 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;
• 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
Proxy Statement
23
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.
In addition to satisfying the advance notice
provisions in our By-laws relating to nominations
of director candidates, including the earlier notice
deadlines set out above, to comply with the
SEC’s universal proxy rule, shareholders who
intend to solicit proxies in support of director
nominees other than the Company’s nominees in
compliance with Rule 14a-19 under the Exchange
Act must also provide notice that sets forth the
information required by Rule 14a-19 no later than
March 17, 2025. If the date of the 2025 Annual
Meeting changes by more than 30 calendar days
from the date of the 2024 Annual Meeting, such
notice must instead be provided by the later of
60 calendar days prior to the date of the annual
meeting or the 10th calendar day following public
announcement by the Company of the date of
the 2025 Annual Meeting.
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 2025
Annual Meeting of Stockholders must be received
in writing by the Secretary of the Company at
the address below no earlier than December 16,
2024, and no later than January 15, 2025. In the
event that the 2025 Annual Meeting is held
more than thirty (30) days before, or more than
sixty (60) days after (other than as a result of
adjournment), the first anniversary of the
Company’s 2024 Annual Meeting, then the
required notice must be received in writing by
the Secretary of the Company at the address below
no earlier than 150 days prior to the date of the
2025 Annual Meeting and no later than the close
of business on the later of the 120th day prior to
the 2025 Annual Meeting or the 10th day
following the day on which the public
announcement of the date of the 2025 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
24
Proxy Statement
Role of the Board of Directors in Risk Oversight
Our Board is responsible for risk oversight and
treats that role with the utmost importance. While
our management team is responsible for risk
management on a day-to-day basis and for
reporting significant risk exposures to the Board,
the Board regularly engages in both the processes
management utilizes to identify, assess and
manage risk and ongoing plans to address any
identified risks. At each of our quarterly Board
meetings and at each of our Committee meetings,
management provides updates on a wide range
of topics relating to risk – including, for example,
cybersecurity initiatives, corporate governance,
sustainability programs, technology development,
operational execution, and capital allocation. In
addition, each committee reports to the Board on
a regular basis, including with respect to the
committee’s risk oversight activities as well as
recommendations on actions requiring approval
of the full Board.
We believe our leadership structure supports the
risk oversight function of the Board. Our
President and Chief Executive Officer, serving as
Chairman of the Board, promotes open
communication between the rest of the
management team and directors regarding risk,
including facilitating direct discussion between
board members and management, as applicable.
In addition, the independence of our Board, our
Lead Independent Director, and our committee
chairpersons enhances our Board’s ability to
exercise risk oversight. Through the authority of
our Lead Independent Director to consult with the
Chairman of the Board to establish Board
agendas, and call and preside at Board meetings
and executive sessions of our independent
directors as described under “Corporate
Governance — Board Leadership Structure”, our
current Board leadership structure provides
mechanisms to facilitate our Board’s exercise of
its oversight responsibilities, including requiring
management reports on specific risk areas and
requesting additional information regarding
management’s recommendation on any risk
matters as the Board may determine to be
necessary or advisable.
The following table summarizes the key risk
management areas over which the Board and its
committees exercise oversight:
Board of Directors
• business strategy, including product and
technology roadmaps
• capital allocation
• organizational structure
• financial reporting
• financial and accounting controls and
processes
• legal and regulatory compliance
• cybersecurity
• tax matters
• executive compensation programs, policies
and practices
• executive performance
• Board size, composition, leadership
structure, and effectiveness
• corporate governance policies and practices
• ethics policies and practices
Audit Committee
Compensation
Committee
Nominating and
Corporate
Governance
Committee
• operational risks
• acquisitions
• internal audit function
• independent accounting firm
• related-party transactions
• whistleblower reporting
• enterprise risk evaluation processes
• management succession planning
• non-employee director compensation
• director skills, experience and diversity
• corporate responsibility and
sustainability, including related to
human rights and the environment
Proxy Statement
25
Importantly, the Audit Committee plays a key role
in overseeing our annual enterprise risk
management process designed to identify risks
and controls, promote visibility and dialogue, and
facilitate risk response and mitigation strategies.
Important elements of this process include:
• Collecting data from stakeholders throughout
the Company, identifying and categorizing the
likelihood and magnitude of risk events, and
summarizing the results to create a consolidated
risk profile.
• Reviewing this risk profile with our senior
management and seeking input on mitigation
and response strategies and their
implementation.
• Reviewing the consolidated measures of
controls designed to facilitate the employment
of adequate risk mitigation strategies.
In addition, in fiscal year 2023, management
presented three times to the Audit Committee
and once to the Board on the Company’s
cybersecurity program and risks.
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.
• Stock ownership guidelines, executive
compensation recoupment policies, prohibitions
on insider trading and independent oversight
by the Compensation Committee.
Additionally, the Board periodically reviews and
approves the executive succession plan in
consultation with the Compensation Committee
and the Chief Executive Officer.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of
Directors currently consists of Ms. King (Chairman),
Mr. Batey, and Mr. Schriesheim. No member of
this committee was at any time during fiscal year
2023 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 1, 2022, there has not been a
26
Proxy Statement
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
27
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 2024 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 2023 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 2024.
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 2024
VOTE
28
Proxy Statement
Audit Fees
KPMG LLP provided audit services to the
Company consisting of the annual audit of the
Company’s 2023 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 2023. The following
table summarizes the fees of KPMG LLP billed to
the Company for the last two fiscal years.
Fee Category
Audit Fees(1)
Audit-Related Fees(2)
Tax Fees(3)
Total Fees
Fiscal Year
2023 ($)
2,421,240
43,974
32,000
2,497,214
% of
Total (%)
97.0
1.7
1.3
100
Fiscal Year
2022 ($)
2,479,240
—
38,838
2,518,078
% of
Total (%)
98.5
—
1.5
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 2023 and 2022. Fiscal year 2023 and 2022 audit fees included fees for
services incurred in connection with rendering an opinion under Section 404 of the Sarbanes-Oxley Act.
(2) Audit-related fees consist of fees relating to the Company’s real-time system implementation assessment of certain enterprise
resource planning software.
(3) 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 and certain trade and customs forms, accounted for $32,000 and $38,838 of the
total tax fees for fiscal years 2023 and 2022, 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 2023 and our fiscal year ended
September 30, 2022 (“fiscal year 2022”).
Proxy Statement
29
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 or
part of fiscal year 2023. Each member of the
Audit Committee 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 2023, 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 2023, as filed with the SEC.
THE AUDIT COMMITTEE
David P. McGlade, Chairman
Eric J. Guerin
Christine King
Robert A. Schriesheim
30
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 2025 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
31
INFORMATION ABOUT EXECUTIVE AND DIRECTOR
COMPENSATION
Summary and Highlights
Our Executive Compensation Program Reflects Our Pay-for-Performance Philosophy
• 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.
• Engagement with Stockholders on Executive
Compensation. Following our 2023 Annual
Meeting, we engaged in formal outreach to more
than 20 institutional stockholders. Stockholders
representing approximately 36% of the
Company’s shares outstanding responded to
the outreach, and we held meetings with those
stockholders who wanted to meet. In the
meetings, institutional stockholders generally
did not express concerns with the overall
structure of our compensation program and
broadly shared support for the Company’s
demonstrated history of disclosure and
stockholder responsiveness, including relating
to compensation policies and plan designs and
providing information about the rationale
behind our metrics and performance periods.
In addition, our Lead Independent Director also
participated in select engagement.
• 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 2023 for our
Chief Executive Officer and the average for the
other Named Executive Officers. The target total
direct compensation mix for fiscal year 2023
reflects base salary, target short-term incentive
award, and the grant date fair value of the annual
performance share and restricted stock unit
awards.
Chief Executive Officer
Other Named Executive Officers
Restricted
Stock Units
29%
Base
Salary
7%
Short-Term
Incentive
11%
Long-Term
Stock-Based
Incentive
82%
Performance
Shares
53%
At Risk
(gray circle)
Subject to
Performance
Metrics
(blue circle)
Restricted
Stock Units
29%
Base
Salary
11%
Long-Term
Stock-Based
Incentive
80%
Short-Term
Incentive
9%
Performance
Shares
51%
32
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 Section 16
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
Maintain a cash severance limitation policy
applicable to executive officers
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Engagement with Stockholders Regarding Executive Compensation . . . . . . . . . . . 34
Approach for Determining Form and Amounts of Compensation . . . . . . . . . . . . . . 35
Components of Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Severance and Change-in-Control Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Executive Officer Stock Ownership Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Prohibition on Hedging and Certain Other Transactions . . . . . . . . . . . . . . . . . . . . . . 46
Compliance with Internal Revenue Code Section 162(m) . . . . . . . . . . . . . . . . . . . . . 46
Compensation Tables for Named Executive Officers. . . . . . . . . . . . . . . . . . . . . . . . . . 47
Potential Payments Upon Termination or Change in Control . . . . . . . . . . . . . . . . . . . 51
CEO Pay Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Proxy Statement
33
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 2023, as
determined under the rules of the SEC. We
refer to this group of executive officers as our
“Named Executive Officers.”
For fiscal year 2023, our Named Executive
Officers were:
• Liam K. Griffin, Chairman, Chief Executive
Officer and President;
• Kris Sennesael, Senior Vice President and Chief
Financial Officer;
• Reza Kasnavi, Senior Vice President, Technology
and Manufacturing;
• Carlos S. Bori, Senior Vice President, Sales and
Marketing; and
• Robert J. Terry, Senior Vice President, General
Counsel and Secretary.
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. At our 2023 Annual Meeting of
Stockholders, approximately 79% of the votes
cast approved our “say-on-pay” proposal,
reflecting continued support for our compensation
policies and determinations for fiscal year 2022,
including the updates the Compensation
Committee had made for fiscal year 2022 in
response to stockholder feedback. That said, we
recognize that support for say-on-pay reflected a
modest decline from 86% the previous year and
the importance of continued, robust stockholder
engagement and responsiveness to stockholder
input on compensation matters.
Following the 2023 Annual Meeting and through
December 2023, we engaged in formal
stockholder outreach, soliciting feedback from
more than 20 institutional stockholders
representing approximately 51% of the Company’s
shares outstanding. Stockholders representing
approximately 36% of the Company’s shares
outstanding responded to the outreach, either
with written feedback, a request to speak, or by
declining the invitation. Generally, investors who
declined a meeting noted that they did so because
they did not have any concerns to discuss. We
held engagement meetings with each of those
stockholders who requested to meet. The Lead
Independent Director and Chairman of our
Compensation Committee, Ms. King, was actively
involved in stockholder engagement.
During these conversations, institutional
stockholders were interested in discussing a
range of topics beyond executive compensation,
including our corporate governance, our efforts
to eliminate the supermajority vote provisions from
our Restated Certificate of Incorporation, and
our sustainability efforts, among others, with many
expressing approval of the Company’s strategy,
performance, and management. In addition,
stockholders generally did not express concerns
with the overall structure of our compensation
program and broadly shared support for the
Company’s demonstrated history of disclosure
and stockholder responsiveness, including relating
to compensation policies and plan designs. In
some cases, investors asked for more information
on the rationale behind our metrics and
performance periods, including seeking to better
understand our utilization of two semi-annual
performance periods for our short-term incentive
program and our emerging revenue growth
metric in our long-term stock-based compensation
awards. Stockholders found our explanations
helpful and shared that they had a better
understanding of the Company’s design of its
compensation plans following these discussions.
After considering this input from our stockholders,
as well as evaluating best practices related to
executive compensation by public companies
generally, and our peer group specifically, our
Compensation Committee determined that
overall, the Company’s executive compensation
policies and plan designs remained appropriate
and in the best interests of the Company and its
stockholders. To further support the alignment
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Proxy Statement
between the Company and its stockholders, for
fiscal year 2023, the Compensation Committee
modified the peer group, replacing two companies
with larger market capitalizations that were
acquired with two companies with comparable
market capitalizations. In addition, the
Compensation Committee returned the short-term
incentive program for the fiscal year ending
September 27, 2024 (“fiscal year 2024”) from two
semi-annual performance periods to one annual
performance period because the Compensation
Committee believed that it could set appropriately
rigorous performance goals for a one-year
period.
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 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
to assist in determining the components and
amount of executive compensation. Aon 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 has with the Company, the members of the
Compensation Committee and our executive
officers, as well as the policies that Aon has in place
to maintain its independence and objectivity,
and has determined that Aon’s work for the
Compensation Committee has not raised any
conflicts of interest. Company management also
purchases published compensation and benefits
surveys from Aon, and on occasion engages
certain affiliates of Aon 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 and its affiliates in fiscal year 2023 for
these surveys and additional services did not
exceed $120,000.
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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 2023, the
Compensation Committee approved Comparator
Group data consisting of a 50/50 blend of
(i) Aon survey data of semiconductor companies
(where sufficient data was not available in the Aon
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 15
publicly traded semiconductor companies listed
below.
Each year the Compensation Committee engages
Aon to assess the peer group. Using this
information, the Compensation Committee seeks
to create a peer group comprised of
semiconductor companies. Consolidation within
the semiconductor industry over time has resulted
in fewer semiconductor companies that are of
similar market capitalization and revenue as
Skyworks. As a result, when considering companies
to potentially include in the peer group, the
Compensation Committee also considers
companies in adjacent industries, such as the
semiconductor manufacturing equipment
industry, as well as companies with smaller or
greater revenue or market capitalization than the
Company, many of which are business competitors
and companies with which we compete for
executive talent.
Peer Group for Fiscal Year 2023 Compensation (“FY23 Peer Group”)(1)
Advanced Micro Devices
Lam Research
Monolithic Power Systems
QUALCOMM
Analog Devices
Marvell Technology
NXP Semiconductors
Texas Instruments
Entegris
Microchip Technology
ON Semiconductor
Western Digital
KLA Corporation
Micron Technology
Qorvo
(1) For the Company’s fiscal year 2023 compensation program, we made adjustments to our peer group from the prior fiscal
year to improve comparability, in part in response to stockholder feedback. Specifically, we removed Maxim Integrated
Products and Xilinx, both of which were acquired, and added Entegris and Monolithic Power Systems, both of which were
comparable in size to the Company from a market capitalization standpoint and smaller than the Company in terms of revenue.
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, 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 2023. Aon advised
the Compensation Committee that such
components of executive compensation for fiscal
year 2023 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 2023, 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,
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(iv) input from the full Board on our Chief Executive
Officer’s performance, and (v) the length of our
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.
median of the Comparator Group. The base
salary increases for fiscal year 2023 for each
Named Executive Officer, as reflected in the table
below, were based on the market-based salary
adjustments recommended by Aon as well as
recommendations by the Chief Executive Officer
(for Named Executive Officers other than himself).
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 2023, 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 annually
determines a competitive base salary for each
executive officer using the Comparator Group
data and input provided by Aon. Base salaries are
intended to attract and retain talented executives,
recognize individual roles and responsibilities and
provide stable income to executives. In order to
provide flexibility in consideration of differences in
an individual executive’s 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
FY2023
Base Salary ($)
FY2022
Base Salary ($)
Increase
(%)
1,175,000
1,130,000
4.0%
606,000
588,000
3.1%
576,000
557,000
3.4%
541,000
520,000
4.0%
540,000
522,000
3.4%
Liam K.
Griffin
Kris
Sennesael
Reza
Kasnavi
Carlos S.
Bori
Robert J.
Terry
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 Compensation Committee
believes that pre-established performance goals
under the Company’s short-term incentive
compensation plan for executive officers should
generally be measured over a one-year
performance period. Beginning with the
Company’s fiscal year ended October 2, 2020
(“fiscal year 2020”) and continuing through fiscal
year 2023, the Compensation Committee
established annual short-term compensation
incentive plans with two six-month performance
periods as a result of significant market
uncertainties.
With respect to the Fiscal Year 2023 Executive
Incentive Plan (the “Incentive Plan”) adopted by
the Compensation Committee on December 15,
2022, the Compensation Committee determined
that in light of continued uncertainties resulting
from geopolitical concerns and global supply
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37
chain challenges affecting the Company and its
customers, which made forecasting difficult,
semi-annual performance periods would be
appropriate for fiscal year 2023. For the Company’s
upcoming fiscal year 2024, giving consideration
to feedback from the Company’s stockholders, the
Compensation Committee is returning to a one-
year performance period for the short-term
compensation incentive plan despite some
continuing uncertain market conditions. Although
significant macroeconomic challenges persist,
the Compensation Committee’s belief is that it
could set appropriately rigorous performance
goals for a one-year period for fiscal year 2024.
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 2023 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 2022 and May 2023, 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 operating income performance goals,
each of which was weighted at 50% for each
respective performance period. The non-GAAP
operating income performance goal is based on
the Company’s publicly disclosed non-GAAP
operating income(3) after accounting for any
incentive award payments, including those to be
made under the Incentive Plan.
The target level performance goals were
established by the Compensation Committee
under the Incentive Plan after reviewing the
Company’s historical operating results, as well as
the Company’s business outlook and 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 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.
In May 2023, the Compensation Committee
adopted performance goals for the second half
of fiscal year 2023 based primarily on the
Company’s outlook for the remainder of the fiscal
year. Reflecting an unanticipated reduction in
overall market demand and increased
macroeconomic uncertainty, these performance
goals were lower than the preliminary goals that
were based on the Company’s original annual
operating plan for fiscal year 2023. The
performance goals adopted by the Compensation
Committee for the second half of fiscal year
2023 were expected to, and did, present rigorous
(3) Non-GAAP operating income typically excludes from GAAP operating income the following: share-based compensation
expense, acquisition-related expenses, amortization of acquisition-related intangibles, settlements, gains, losses, and
impairments and restructuring-related charges.
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Proxy Statement
achievement hurdles, as reflected in the actual
achievement by the Company (and described
below).
The performance goals established under the
Incentive Plan for fiscal year 2023 were as follows:
Revenue
Non-GAAP
Operating Income
(in millions)
1st Half 2nd Half 1st Half 2nd Half
Threshold
$2,225
$2,250
Target
$2,475
$2,500
Maximum
$2,575
$2,750
$768
$888
$938
$700
$820
$940
The Incentive Plan stipulated that payouts to
executives following the end of the fiscal year,
under either of the metrics, were conditioned
upon the Company achieving full-year non-GAAP
operating income of $1.1 billion.
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
Chief Executive Officer’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 minimum
required 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 goals 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
performance goals. 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 2023, the Company’s
revenue and non-GAAP operating income
achieved were $2,482 million and $877 million,
respectively, resulting in a short-term
compensation award for each Named Executive
Officer with respect to such performance period
equal to 101% of his or her target payment
level. A payment of the target amount was made
to each Named Executive Officer in May 2023, with
the remainder held back for potential payment
following the completion of the fiscal year. For the
second half of fiscal year 2023, the Company’s
revenue and non-GAAP operating income
achieved were $2,290 million and $725 million,
respectively, resulting in a short-term
compensation award for each Named Executive
Officer with respect to such performance period
equal to only 59% of the target payment level.
In November 2023, upon certifying that the
nominal level of non-GAAP operating income
had been achieved for the fiscal year, the
Compensation Committee approved payment of
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39
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.
The following table shows the Company’s
achievement under the Incentive Plan:
Revenue
Operating Income
(in millions) 1st Half 2nd Half 1st Half
2nd Half
Threshold
$ 2,225
$ 2,250
Target
$ 2,475
$ 2,500
Maximum
$ 2,575
$ 2,750
Achieved
$2,482
$2,290
$ 768
$ 888
$ 938
$877
$ 700
$ 820
$ 940
$725
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 2023, the Compensation Committee made
an annual stock-based compensation award to
each of the Named Executive Officers on
November 8, 2022, at a regularly scheduled
Compensation Committee meeting.
Fiscal Year 2023 Stock-Based Compensation
Awards
In making annual stock-based compensation
awards to executive officers for fiscal year 2023,
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 2023 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 60% and 40%,
respectively, of the dollar value of the executive’s
fiscal year 2023 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
interests with those of our stockholders by using
equity awards that will vest only if the Company
achieves pre-established performance goals,
and we believe the Compensation Committee’s
decision to award a portion of the PSAs subject to
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
Reza Kasnavi
Carlos S. Bori
Robert J. Terry
Value of FY23
Stock-Based Award(1)
Number of Shares Subject
to PSAs, at Target(2)
Number of Shares
Subject to
RSUs(2)
$13,000,000
$ 3,700,000
$ 3,910,000
$ 3,910,000
$ 3,220,000
87,976
25,039
26,460
26,460
21,791
58,651
16,692
17,640
17,640
14,527
(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 total shareholder return (“TSR”)
percentile ranking, in accordance with the provisions of ASC 718.
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(2) Reflects the dollar value of the award, divided by $88.66 per share, which was the closing price of the Company’s common
stock on the Nasdaq Global Select Market on November 8, 2022.
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.
FY23 PSAs
The PSAs granted on November 8, 2022 (the
“FY23 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 FY23 PSAs
compares the Company’s performance under
three distinct metrics during the applicable
performance period against a range of pre-
established targets, as follows:
Percentage of
Aggregate
Target Level
Shares
Performance
Period
Vesting
Target Level Shares with Respect to Emerging
Revenue Growth Metric(1)
Target Level Shares with Respect to EBITDA
Margin Percentile Ranking Metric(2)
Target Level Shares with Respect to TSR
Percentile Ranking Metric(3)
25%
Fiscal Year 2023
100% at the End of Year Two
25%
Fiscal Years 2023-2024
100% at the End of Year Two
50%
Fiscal Years 2023-2025
100% at the End of Year Three
(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 EBITDA margin percentile ranking metric measures the Company’s EBITDA margin achieved relative to the companies in
our FY23 Peer Group during a two-year performance period comprising the Company’s fiscal years 2023 and 2024. For
purposes of the EBITDA margin percentile ranking metric, EBITDA margin is calculated by dividing EBITDA by revenue for
the applicable period, where EBITDA is defined as non-GAAP operating income, plus depreciation and amortization, for the
applicable period. With respect to the Company and each FY23 Peer Group company, EBITDA and revenue are calculated
based on publicly reported financial information for the applicable period (which for the FY23 Peer Group companies consists
of the eight-quarter period that ends closest to, but not later than, October 1, 2024).4 When calculating the Company’s
EBITDA margin, the impact of any acquisition or disposition occurring within the performance period is excluded if the revenue
attributable to such acquisition or disposition exceeds $50 million during such period.
(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 S&P 500 Index during the
performance period 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 of the 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 a
significant driver of long-term growth is our ability
4 When calculating the EBITDA margin percentile ranking, the performance of a company in the FY23 Peer Group will be
included if during the performance period such company in the FY23 Peer Group publicly reports quarterly financial results
for at least six consecutive quarters out of the eight applicable quarters.
Proxy Statement
41
to identify and execute on emerging revenue
growth opportunities, the Compensation
Committee believes that retaining emerging
revenue growth as a key metric with a one-year
performance period is appropriate. Moreover,
utilizing only performance periods longer than
one year (e.g. multi-year periods) could limit the
Committee’s ability to focus management on the
most compelling growth opportunities each
year. Accordingly, for the FY23 PSAs, the
Compensation Committee retained emerging
revenue growth as a one-year metric (representing
25% of the target value of the PSAs) to incentivize
our management team on specific emerging
product lines that have higher growth potential
and are intended to drive long-term value creation.
In light of stockholder feedback following the
2021 Annual Meeting of Stockholders, the
Compensation Committee determined that
shares earned pursuant to the emerging revenue
growth metric would not vest until the two-year
anniversary of the grant date.
For 25% of the target value under the FY23 PSAs,
the Compensation Committee retained a two-
year EBITDA margin percentile ranking metric that
measures performance relative to the FY23 Peer
Group. To incentivize above-median performance,
the Compensation Committee set the
target percentile for the EBITDA margin percentile
ranking metric at the 55th percentile of our FY23
Peer Group. As in prior years, the remaining half of
the target value under the FY23 PSAs was based
on a three-year TSR percentile ranking, which the
Compensation Committee believed provides an
appropriate balance to the one-year and two-year
measurement periods.
The specific pre-established performance goals under the emerging revenue growth, EBITDA
margin percentile ranking and TSR percentile ranking metrics are as follows:
Company Metric
1-year Emerging Revenue Growth (%)
2-year EBITDA Margin Percentile Ranking
3-year TSR Percentile Ranking
Threshold Target Maximum
5.0%
55th
55th
2.5%
25th
25th
7.5%
75th
90th
As with the Incentive Plan, the pre-established targets under the FY23 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 5%, representing above-market annual
growth, the maximum level was set at 7.5%, which the Compensation Committee believed represented
outstanding performance that would be difficult to achieve, and the threshold level was set at 2.5% as
a result of continued market uncertainties. The threshold, target and maximum levels vary year to year as
a result of the composition of what, as part of the Company’s product portfolio, comprises emerging
revenue. For fiscal year 2023, emerging revenue growth was based on driving growth in the following
key product categories: automotive, 5G BAW-enabled device (i.e., a 5G product containing at least one
BAW) and next-generation connectivity products (i.e., WiFi 6/6E/7), as well as products sold by Mixed
Signal Solutions, the Infrastructure and Automotive business that the Company acquired from Silicon
Laboratories, Inc. in July 2021 (“MSS”).
• EBITDA Margin Percentile Ranking Metric: Consistent with the prior year’s award, the Compensation
Committee set the target percentile at the 55th percentile of the FY23 Peer Group in order to further
incentivize above-median performance.
• TSR Percentile Ranking Metric: Consistent with the prior year’s award, the Compensation Committee
set the target percentile at the 55th percentile of the applicable peer group in order to further incentivize
above-median performance.
42
Proxy Statement
The number of shares issuable under the FY23 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 EBITDA Margin Percentile Ranking
Metric
% of Target Level Shares Earned with Respect to TSR Percentile Ranking Metric
Performance Achieved
Threshold Target Maximum
100%
200%
50%
50%
50%
100%
100%
200%
300%
The “continued employment” condition of the FY23 PSAs provides that, to the extent that the performance
goals 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 EBITDA Margin Percentile Ranking Metric
% of Shares Earned with Respect to TSR Percentile Ranking Metric
Anniversary of Grant Date(1)
Two Year
100%
100%
Three Year
100%
(1)
In the event of termination by reason of death or permanent disability, the holder of an FY23 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.
During fiscal year 2022, the base period against
which fiscal year 2023 emerging revenue
performance was measured, the Company
achieved revenue in the specified key product
categories of $1,936 million. The base period
emerging revenue included revenue from the
automotive, 5G BAW-enabled device and next-
generation connectivity product categories, as well
as revenue generated by MSS. During fiscal year
2023, the Company achieved revenue in the
specified key product categories of $2,163 million,
representing emerging revenue growth of 12%,
which exceeds the “maximum” level of
performance. This growth was driven by strong
performance in the BAW-enabled and MSS
product categories. This resulted in the Company
achieving 200% of the target level of shares for
such metric. The shares earned under this metric
will be issued in November 2024, provided that the
Named Executive Officer meets the continued
employment condition.
In the period comprising fiscal year 2022 and
fiscal year 2023, the period over which the EBITDA
margin percentile ranking metric was measured,
the Company achieved a margin of 44%, resulting
in its ranking in the 62nd percentile against the
applicable peer group. This resulted in the
Company achieving 133% of the target level of
shares for such metric. The shares earned under
this metric were issued in November 2023.
Outstanding PSAs at the End of Fiscal Year
2023
As summarized in the table below of the annual
PSA grants made to Named Executive Officers
since our fiscal year ended September 28, 2018
(“fiscal year 2018”) (the first year in which the
Compensation Committee awarded PSAs subject
to a metric measured over a three-year
performance period), achievement of the TSR
percentile ranking metric under the FY23 PSAs,
which is subject to a three-year performance
period, will be determined following the
conclusion of the Company’s fiscal year ending
October 3, 2025 (“fiscal year 2025”). During the
three-year performance period under the
fiscal year 2021 PSAs comprising the Company’s
fiscal years 2021, 2022, and 2023, the Company
realized a TSR of -23% resulting in its ranking in
the 4th percentile against the applicable peer
group. As a result of failing to achieve the threshold
TSR percentile ranking metric, no shares were
earned by the Named Executive Officers with
respect to such metric, and all PSAs with respect
to such metric were cancelled.
Proxy Statement
43
PSA Fiscal Year
Grant Date
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
FY21
11/11/2020
Design Wins
Emerging Revenue Growth
FY21
FY21
3-year TSR Percentile Ranking
FY20 — FY22
FY22
11/10/2021
EBITDA Margin Percentile Ranking
FY22 — FY23
3-year TSR Percentile Ranking
FY21 — FY23
Emerging Revenue Growth
FY22
Achieved
(% of Target)
99.8%
0%
0%
74.1%
200%
200%
0%
200%
200%
0%
200%
133%
3-year TSR Percentile Ranking
FY22 — FY24
Perf. Period in Progress(1)
Emerging Revenue Growth
FY23
200%
FY23
11/8/2022
EBITDA Margin Percentile Ranking
FY23 — FY24
Perf. Period in Progress(2)
3-year TSR Percentile Ranking
FY23 — FY25
Perf. Period in Progress(3)
(1) As of January 18, 2024, performance under this metric during the applicable performance period was below the “threshold”
level of performance.
(2) As of January 18, 2024, performance under this metric during the applicable performance period was between the “target”
and “maximum” levels of performance.
(3) As of January 18, 2024, performance under this metric during the applicable performance period was between the “threshold”
and “target” levels of performance.
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 Retirement
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 2023 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 2023, each of the Named Executive
Officers 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
44
Proxy Statement
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
Chief Executive Officer
Chief Financial Officer
Senior Vice President, Technology and Manufacturing
Senior Vice President, Sales and Marketing
Senior Vice President and General Counsel
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
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 officer 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 stock 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. Common stock owned outright
by the Named Executive Officer (or by his or her
spouse or minor children), common stock held
in trust for the benefit of the Named Executive
Officer (or his or her spouse or minor children), or
restricted stock or restricted stock units granted
pursuant to the equity compensation plans of the
Company for which restrictions have lapsed,
count towards the requirement. Unexercised
options, whether or not vested, and restricted
stock and restricted stock units still subject to risk
of forfeiture, as well as any unissued performance
shares, do not count towards the requirement. All
of our Named Executive Officers are in
compliance with the executive officer stock
ownership guidelines as of the date hereof.
Multiple of Annual
Base Salary(1)
6
2.5
2.5
2.5
2.5
Shares
96,900
21,000
19,900
18,600
18,600
Proxy Statement
45
(1) For purposes of the executive officer 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.
Executive Compensation Recoupment
Policies
In March 2022, the Company adopted an
executive compensation recoupment policy (the
“2022 Policy”) that applies to both cash and equity
incentive compensation for executive officers.
Under the 2022 Policy, if we are required to
prepare an accounting restatement for one or
more periods due to the material noncompliance
of the Company with any financial reporting
requirement under the U.S. federal securities laws,
the Board or a committee of independent
directors authorized by the Board will investigate
the circumstances to determine whether an act
or omission of a current or former executive officer,
involving fraud or intentional misconduct,
contributed to the circumstances resulting in the
restatement. Following the investigation, we may
require repayment of certain incentive-based
compensation received by the executive officer in
the three-year period preceding restatement. In
November 2023, the Company adopted a
new executive compensation recovery policy (the
“2023 Policy”) for purposes of complying with
Section 10D of the Exchange Act and Nasdaq
listing standards. The 2023 Policy provides that, in
the event the Company is required to prepare
an accounting restatement on or after October 2,
2023 (the “Effective Date”) due to the material
noncompliance of the Company with any financial
reporting requirement under the U.S. federal
securities laws, the Company will act to recover
the amount of incentive-based compensation
received on or after the Effective Date, by its
current and former Section 16 officers, as
applicable, in excess of the amount of incentive-
based compensation that would have been
received had it been determined based on the
restated amount, subject to limited exceptions. In
the event that an accounting restatement is not
covered by the 2023 Policy but is covered by the
2022 Policy, the 2022 Policy will apply. In the event
that an accounting restatement could be covered
by both the 2022 Policy and 2023 Policy, only
the 2023 Policy will apply.
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 2023, the Company will be unable
to deduct compensation in excess of $1 million
paid to certain executive officers, as specified
under Section 162(m) of the Internal Revenue
Code (“IRC”). The Compensation Committee uses
its judgment to authorize compensation
payments that may be subject to the limit when
the Compensation Committee believes such
payments are appropriate and in the best interests
of the Company and its stockholders.
46
Proxy Statement
Compensation Tables for Named Executive Officers
Summary Compensation Table
The following table summarizes compensation earned by, or awarded or paid to, our Named Executive
Officers for fiscal year 2023, fiscal year 2022, and our fiscal year ended October 1, 2021 (“fiscal year 2021”).
Name and Principal Position
Liam K. Griffin
Chairman, Chief Executive
Officer and President
Kris Sennesael
Senior Vice President and
Chief Financial Officer
Reza Kasnavic(4)
Senior Vice President,
Technology and
Manufacturing
Carlos S. Bori
Senior Vice President,
Sales and Marketing
Robert J. Terry
Senior Vice President,
General Counsel and
Secretary
Year
2023
2022
2021
2023
2022
2021
2023
2022
2023
2022
2021
2023
2022
2021
Stock
Awards
($)(1)
14,554,926
13,087,793
11,612,745
4,142,435
4,131,556
3,589,223
4,377,587
4,013,570
4,377,587
4,013,570
3,061,420
3,605,110
3,305,147
2,850,298
Non-Equity
Incentive
Plan
Compensation
($)(2)
1,509,604
2,423,906
All Other
Compensation
($)(3)
26,404
31,174
3,440,000
486,606
788,306
1,120,000
370,013
597,396
347,530
557,713
760,000
346,887
559,858
787,200
27,453
20,921
17,384
15,203
35,936
33,910
26,162
15,324
17,154
27,150
22,731
16,045
Total
($)
17,261,436
16,667,162
16,150,421
5,254,162
5,522,338
5,281,311
5,357,636
5,198,553
5,290,179
5,101,934
4,311,705
4,517,347
4,406,621
4,143,570
Salary ($)
1,170,502
1,124,289
1,070,223
604,200
585,092
556,885
574,100
553,677
538,900
515,327
473,131
538,200
518,885
490,027
(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 2021, 2022, and 2023, 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 2021: $14,912,691; FY 2022: $16,912,789; FY 2023: $18,454,902), Mr. Sennesael (FY 2021: $4,609,190; FY
2022: $5,339,011; FY2023: $5,252,414), Mr. Kasnavi (FY 2022: $5,886,558; FY 2023: $5,550,558), Mr. Bori (FY 2021:
$3,931,401; FY 2022: $5,186,558; FY 2023: $5,550,558), and Mr. Terry (FY 2021: $3,660,286; FY 2022: $4,271,095; FY 2023:
$4,571,105). For a description of the assumptions used in calculating the fair value of equity awards in fiscal year 2023
under ASC 718, see Note 9 of the Company’s financial statements included in the Company’s Annual Report on Form 10-K
filed with the SEC on November 17, 2023.
(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 2023, it specifically includes $13,200 in Company
contributions to each Named Executive Officer’s 401(k) Plan account, as well as $7,310, $2,500, $20,000, $10,180, and
$9,226 in financial planning benefits for Messrs. Griffin, Sennesael, Kasnavi, Bori and Terry, respectively.
(4) Mr. Kasnavi was not a Named Executive Officer prior to fiscal year 2022.
Proxy Statement
47
Grants of Plan-Based Awards Table
The following table summarizes all grants of plan-based awards made to the Named Executive Officers
in fiscal year 2023, including incentive awards payable under the Incentive Plan.
Name
Liam K. Griffin
Kris Sennesael
Reza Kasnavi
Carlos S. Bori
Robert J. Terry
Grant Date
11/08/2022
11/08/2022
11/08/2022
11/08/2022
11/08/2022
11/08/2022
11/08/2022
11/08/2022
11/08/2022
11/08/2022
Estimated Future Payouts Under Non-
Equity Incentive Plan Awards(1)
Estimated Future Payouts Under Equity
Incentive Plan Awards(2)
Threshold
($)
940,000
Target
($)
1,880,000
Maximum
($)
3,760,000
Threshold
(#)
Target
(#)
Maximum
(#)
43,988
87,976
219,940
303,000
606,000
1,212,000
230,400
460,800
921,600
216,400
432,800
865,600
216,000
432,000
864,000
12,519
25,039
62,597
13,230
26,460
66,150
13,230
26,460
66,150
10,895
21,791
54,477
All Other
Stock
Awards:
Number of
Shares of
Stock Or
Units
(#)(3)
Grant Date
Fair Value
of Stock
and
Option
Awards
($)
58,651
9,354,928(4)
5,199,998(5)
16,692
2,662,552(4)
1,479,913(5)
17,640
2,813,624(4)
1,563,962(5)
17,640
2,813,624(4)
1,563,962(5)
14,527
2,317,146(4)
1,287,964(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 FY23 PSAs granted on November 8, 2022, 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. Each RSU award
vests over four years at a rate of twenty-five percent (25%) per year commencing one year after the grant date 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 FY23 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 $88.66 per share, which was the closing sale price of the Company’s common
stock on the Nasdaq Global Select Market on November 8, 2022, 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 2023 under ASC 718, see Note 9 of the Company’s financial
statements included in the Company’s Annual Report on Form 10-K filed with the SEC on November 17, 2023.
(5) Reflects the grant date fair value of the RSUs granted on November 8, 2022, computed in accordance with the provisions of
ASC 718 using a price of $88.66 per share, which was the closing price of the Company’s common stock on the Nasdaq Global
Select Market on November 8, 2022.
48
Proxy Statement
Outstanding Equity Awards at Fiscal Year End Table
The following table summarizes the unvested stock awards and all stock options held by the Named
Executive Officers as of the end of fiscal year 2023.
Option Awards
Stock Awards
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
Option
Exercise
Price ($)
Option
Expiration
Date
Name
Liam K. Griffin
Kris Sennesael
12,770
—
77.66
11/9/2023
Reza Kasnavi
Carlos S. Bori
Robert J. Terry
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
other Rights
that Have
Not Vested
($)(1)
1,130,630
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares, Units
or other
Rights that
Have Not
Vested (#)
11,468(8)
11,930(9)
1,176,179
87,976(10)
8,673,553
3,544(8)
3,766(9)
25,039(10)
349,403
371,290
2,468,595
3,440(8)
3,658(9)
26,460(10)
339,150
360,642
2,608,691
3,023(8)
3,658(9)
26,640(10)
298,038
360,642
2,608,691
2,815(8)
277,531
3,012(9)
21,791(10)
296,953
2,148,375
Number
of Shares
or Units
of Stock
that
Have
Not
Vested
(#)
10,129(2)
15,291(3)
23,859(4)
58,651(5)
39,726(6)
43,988(7)
3,241(2)
4,726(3)
7,532(4)
16,692(5)
12,540(6)
12,520(7)
2,735(2)
4,586(3)
7,317(4)
17,640(5)
12,183(6)
13,230(7)
2,735(2)
4,030(3)
7,317(4)
17,640(5)
12,183(6)
13,230(7)
2,633(2)
3,752(3)
6,025(4)
14,527(5)
10,033(6)
10,896(7)
Market Value
of Shares or
Units of
Stock
that Have
Not
Vested ($)(1)
998,618
1,507,540
2,352,259
5,782,402
3,916,586
4,336,777
319,530
465,936
742,580
1,645,664
1,236,319
1,234,347
269,644
452,134
721,383
1,739,128
1,201,122
1,304,346
269,644
397,318
721,383
1,739,128
1,201,122
1,304,346
259,587
369,910
594,005
1,432,217
989,153
1,074,237
(1) Reflects a price of $98.59 per share, which was the closing sale price of the Company’s common stock on the Nasdaq Global
Select Market on September 29, 2023.
(2) 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 25% per year on each anniversary of the grant date until it became fully
vested on November 5, 2023.
(3) 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 25% per year on each anniversary of the grant date through November 11,
2024.
(4) Represents shares issuable under an RSU award granted on November 10, 2021, under the Company’s 2015 Long-Term
Incentive Plan. The RSU award vests at a rate of 25% per year on each anniversary of the grant date through November 10,
2025.
Proxy Statement
49
(5) Represents shares issuable under an RSU award granted on November 8, 2022, under the Company’s 2015 Long-Term
Incentive Plan. The RSU award vests at a rate of 25% per year on each anniversary of the grant date through November 8,
2026.
(6) Represents shares issuable under the fiscal year 2022 PSAs (“FY22 PSAs”) (awarded on November 10, 2021) with respect to
the emerging revenue growth metric measured over a one-year performance period consisting of the Company’s fiscal year
2022, assuming achievement at the “maximum” level of performance, one hundred percent (100%) of which were issued
on November 10, 2023. Also represents shares issuable under the FY22 PSAs with respect to the EBITDA margin percentile
ranking metric measured over a two-year performance period consisting of the Company’s fiscal years 2022 and 2023,
assuming achievement with respect to such metric of 133% of the target level of performance, one hundred percent (100%)
of which were issued on November 10, 2023.
(7) Represents shares issuable under the FY23 PSAs (awarded on November 8, 2022, as described above under “Components
of Compensation — Long-Term Stock-Based Compensation”) with respect to the emerging revenue growth metric measured
over a one-year performance period consisting of the Company’s fiscal year 2023, assuming achievement at the “maximum”
level of performance. One hundred percent (100%) of the shares to be earned under the FY23 PSAs with respect to this
metric will be issued on November 8, 2024, to the extent earned and provided that the executive meets the continued
employment condition.
(8) Represents shares issuable under the fiscal year 2021 PSAs (the “FY21 PSAs”) with respect to the TSR percentile ranking
metric, assuming achievement at the “threshold” level of performance. This portion of the FY21 PSAs, which was subject to a
three-year performance period, would have been issued on November 11, 2023, had it been achieved.
(9) Represents shares issuable under the FY22 PSAs with respect to the TSR percentile ranking metric, assuming achievement at
the “threshold” level of performance. This portion of the FY22 PSAs, which is subject to a three-year performance period,
will be issued on November 10, 2024, to the extent earned and provided that the executive meets the continued employment
condition.
(10) Represents shares issuable under the FY23 PSAs (awarded on November 8, 2022, as described above under “Components
of Compensation — Long-Term Stock-Based Compensation”) with respect to the TSR percentile ranking metric, assuming
achievement at the “target” level of performance. This portion of the FY23 PSAs, which is subject to a three-year
performance period, will be issued on November 8, 2025, to the extent earned and provided that the executive meets the
continued employment condition. Also represents shares issuable under the FY23 PSAs with respect to the EBITDA
margin percentile ranking metric measured over a two-year performance period consisting of the Company’s fiscal years
2023 and 2024, assuming achievement at the “maximum” level of performance. This portion of the FY23 PSAs will be issued
on November 8, 2024, to the extent earned and provided that the executive meets the continued employment condition.
Option Exercises and Stock Vested Table
The following table summarizes the Named Executive Officers’ option exercises and stock award vesting
during fiscal year 2023.
Name
Liam K. Griffin
Kris Sennesael
Reza Kasnavi
Carlos S. Bori
Robert J. Terry
Option Awards
Stock Awards
Number of
Shares
Acquired on
Exercise (#)
13,211
40,000
Value
Realized on
Exercise
($)(1)
348,977
1,242,374
—
—
—
—
—
—
Number of
Shares
Acquired on
Vesting (#)
60,765
18,591
16,768
16,503
14,204
Value
Realized on
Vesting
($)(2)
5,649,836
1,729,714
1,566,232
1,533,838
1,324,298
(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.
50
Proxy Statement
Potential Payments Upon Termination
or Change in Control
Mr. Griffin
On May 10, 2023, in connection with the
expiration, in accordance with its terms, of the
Amended and Restated Change in Control /
Severance Agreement between the Company
and Mr. Griffin, the Company entered into a
Second 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 (including awards of restricted stock units),
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
(and provided the provision of such payments will
not violate any applicable nondiscrimination
laws), 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
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 applicable
performance period, such awards would be
deemed earned as to the greater of (i) the target
level of shares for such awards, or (ii) if such
calculation is determined to be practicable by the
Compensation Committee, the number of
shares that would have been earned pursuant to
the terms of such awards based upon performance
Proxy Statement
51
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 remain 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 10,
2023, 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
Directors, of a majority of the Board of Directors
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 of Directors; (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. Kasnavi, Mr. Bori, and
Mr. Terry
The Company entered into Amended and
Restated Change in Control / Severance
Agreements with each of Mr. Sennesael,
Mr. Kasnavi, Mr. Bori, and Mr. Terry on May 10,
2023, respectively. Each such Amended and
Restated Change in Control / Severance
Agreement is referred to herein as a “CIC
Agreement.”
52
Proxy Statement
Each CIC Agreement sets out severance benefits
that become payable if the executive officer
experiences 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 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 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) if such calculation is determined
to be practicable by the Compensation
Committee, 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 commencing not more than sixty (60)
days after such termination and continuing 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 then-current 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 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
Proxy Statement
53
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 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 is eligible to receive any
benefits under the agreement. Each CIC
Agreement also contains non-solicitation
provisions applicable to the executive while he is
employed by the Company and for a period of
twelve (12) months following the termination of his
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
Directors, of a majority of the Board of Directors
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.
54
Proxy Statement
The following table summarizes the payments and benefits that would be made by the Company to the
Named Executive Officers as of September 29, 2023, 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 $98.59 per share, which was the closing sale
price of the Company’s common stock on the Nasdaq Global Select Market on September 29, 2023. The
table does not reflect any equity awards made after September 29, 2023.
Name
Liam K. Griffin(2)
Kris Sennesael(2)
Reza Kasnavi(2)
Carlos S. Bori(2)
Robert J. Terry(2)
Benefit
Salary and Short-Term
Incentive
Accelerated RSUs
Accelerated PSAs(5)
Medical
TOTAL
Salary and Short-Term
Incentive
Accelerated RSUs
Accelerated PSAs(5)
Medical
TOTAL
Salary and Short-Term
Incentive
Accelerated RSUs
Accelerated PSAs(5)
Medical
TOTAL
Salary and Short-Term
Incentive
Accelerated RSUs
Accelerated PSAs(5)
Medical
TOTAL
Salary and Short-Term
Incentive
Accelerated RSUs
Accelerated PSAs(5)
Medical
TOTAL
Termination w/o Cause
Outside Change in
Control ($)(1)
Termination w/o Cause
or for Good Reason,
After
Change in Control ($)
7,307,804(3)
9,134,755(4)
Death/Disability
($)
—
10,640,818
21,367,114
35,842
39,351,578
10,640,818
21,367,114
43,010
41,185,697
606,000(6)
2,113,153(7)
—
—
28,673
634,673
576,000(6)
—
—
8,956
584,956
541,000(6)
—
—
28,673
569,673
540,000(6)
—
—
28,673
568,673
3,173,711
6,331,351
43,010
11,661,225
1,752,698(7)
3,182,288
6,461,687
13,434
11,410,107
1,645,956(7)
3,127,472
6,379,463
43,010
11,195,901
1,665,129(7)
2,655,719
5,317,846
43,010
9,681,704
10,640,818
21,367,114
—
32,007,932
—
3,173,711
6,331,351
—
9,505,062
—
3,182,288
6,461,687
—
9,643,975
—
3,127,472
6,379,463
—
9,506,935
—
2,655,719
5,317,846
—
7,973,565
(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 September 29, 2023, 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 2020, 2021, and 2022, since such average is greater than the “target” short-term cash incentive award for
fiscal year 2023.
(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 September 29,
2023, 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 2020, 2021, and 2022, since such average is greater than the “target” short-term cash
incentive award for fiscal year 2023.
Proxy Statement
55
(5) Represents the value of PSAs that were unvested and outstanding as of September 29, 2023, in accordance with Item 402(j)
of Regulation S-K, using the following assumptions: (a) 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 the
applicable peer group for fiscal years 2021 and 2022 tracking below the “target” level of performance; (b) achievement at
200% of the “target” level of performance for the FY22 PSAs emerging revenue growth metric scheduled to vest on
November 10, 2023, based on the Company’s actual achievement at the “maximum” level of performance with respect to
the performance metric measured over a one-year performance period consisting of the Company’s fiscal year 2022;
(c) achievement at 133% of the “target” level of performance for the FY22 PSAs EBITDA margin percentile ranking metric
scheduled to vest on November 10, 2023, based on the Company’s tracking of achievement between the “target” and
“maximum” levels of performance with respect to the metric measured over a two-year performance period consisting of the
Company’s fiscal year 2022 and fiscal year 2023; (d) achievement at the “target” level of performance for the FY22 PSAs
(3-year TSR percentile ranking metric) scheduled to vest on November 10, 2024, based on the Company’s TSR relative to the
applicable peer group for fiscal year 2022 tracking below the “target” level of performance; (e) achievement at 200% of
the “target” level of performance for the FY23 PSAs emerging revenue growth metric scheduled to vest on November 8, 2024,
based on the Company’s actual achievement at the “maximum” level of performance with respect to the performance
metric measured over a one-year performance period consisting of the Company’s fiscal year 2023; (f) achievement at 192%
of the “target” level of performance for the FY23 PSAs EBITDA margin percentile ranking metric scheduled to vest on
November 8, 2024, based on the Company’s tracking of achievement between the “target” and “maximum” levels of
performance with respect to the metric measured over a two-year performance period consisting of the Company’s fiscal
year 2023 and fiscal year 2024; and (g) achievement at the “target” level of performance for the FY23 PSAs (3-year TSR
percentile ranking metric) scheduled to vest on November 8, 2025, based on the Company’s TSR relative to the applicable
peer group for fiscal year 2023 tracking below the “target” level of performance.
(6) Represents an amount equal to the Named Executive Officer’s annual base salary as of September 29, 2023.
(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 September 29, 2023, 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 2020, 2021, and 2022, since such average is
greater than the Named Executive Officer’s “target” short-term cash incentive award for fiscal year 2023.
56
Proxy Statement
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 2023:
• The annual total compensation of our Chief
Executive Officer was $17,261,436.
• The annual total compensation of our median
compensated employee was $32,457.
• Based on the foregoing, we estimate that our
Chief Executive Officer’s total annual
compensation was approximately 532 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 9,750 as of September 29,
2023, of which approximately 76% 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. The
median employee within our employee
population was identified, consistent with
prior years, as of the last day of our fiscal year,
or September 29, 2023, 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 2023 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 2023.
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.
Proxy Statement
57
Pay Versus Performance
The following tables and related disclosures
provide information about (i) the “total
compensation” of our principal executive officer
(“PEO”) and our other named executive officers
(the “Other NEOs”) as presented in the Summary
Compensation Table (the “SCT Amounts”), (ii) the
“compensation actually paid” to our PEO and
our Other NEOs, as calculated pursuant to the
SEC’s pay-versus-performance rules (the “CAP
Amounts”), (iii) certain financial performance
measures, and (iv) the relationship of the CAP
Amounts to those financial performance measures.
This disclosure has been prepared in accordance
with Item 402(v) of Regulation S-K under the
Exchange Act and does not necessarily reflect
value actually realized by the executives or how
our Compensation Committee evaluates
compensation decisions in light of Company or
individual performance. For further discussion of
how our Compensation Committee seeks to align
pay with performance when making compensation
decisions, please review the Compensation
Discussion and Analysis section of this report.
The Company’s executive compensation program
reflects our pay-for-performance philosophy.
Overall, our executive compensation is closely
aligned with stockholder returns, as a substantial
portion of compensation to our PEO and Other
NEOs is in the form of long-term stock-based
compensation awards, where the potential value
that may be earned fluctuates depending on the
movement of our stock price and/or the
achievement of performance goals.
Summary
Compensation
Table Total
for PEO(1)
(b)
Compensation
Actually
Paid to
PEO(2)
(c)
Average
Summary
Compensation
Table Total
for Non-PEO
Named
Executive
Officers(1)
(d)
Average
Compensation
Actually
Paid to
Non-PEO
Named
Executive
Officers(2)
(e)
Value of Initial
Fixed $100 Investment
Based on:
Total
Shareholder
Return
(f)
Peer Group
Total
Shareholder
Return(3)
(g)
Net Income
(h)
Revenue
($ in millions)
(i)
$17,261,436
$24,905,013
$5,104,831
$7,246,354
$ 71.02
$185.42
$ 982,763,578
$4,772.4
$16,667,162
$ (3,791,369)
$5,057,362
$ (596,664)
$ 59.92
$ 95.60
$1,275,184,583
$5,485.5
$16,150,421
$17,740,729
$4,231,051
$4,521,969
$113.02
$136.11
$1,498,319,703
$5,109.1
Year
(a)
2023
2022
2021
(1) Our PEO was Liam K. Griffin for all years in the table. Our Other NEOs were Kris Sennesael (all years), Carlos S. Bori (all years),
Robert J. Terry (all years), Reza Kasnavi (fiscal years 2023 and 2022) and Karilee A. Durham (fiscal year 2021).
(2) The following table describes the adjustments, each of which is prescribed by SEC rule, to calculate the CAP Amounts from
the SCT Amounts. The SCT Amounts and the CAP Amounts do not reflect the actual amount of compensation earned by or
paid to our executives during the applicable years, but rather are amounts determined in accordance with Item 402 of
Regulation S-K under the Exchange Act.
(3) The peer group is the S&P 500 Semiconductors Index.
58
Proxy Statement
Adjustments
SCT Amounts
Adjustments for stock and
option awards
(Subtract): Aggregate value for
stock awards and option awards
included in SCT Amounts for the
covered fiscal year
Add: Fair value at year end of
awards granted during the
covered fiscal year that were
outstanding and unvested at the
covered fiscal year end
Add (Subtract): Year-over-year
change in fair value at covered
fiscal year end of awards
granted in any prior fiscal year
that were outstanding and
unvested at the covered fiscal
year end
Add: Vesting date fair value of
awards granted and vested
during the covered fiscal year
Add: Change as of the vesting
date (from the end of the prior
fiscal year) in fair value of awards
granted in any prior fiscal year
for which vesting conditions
were satisfied during the
covered fiscal year
(Subtract): Fair value at end of
prior fiscal year of awards
granted in any prior fiscal year
that failed to meet the
applicable vesting conditions
during the covered fiscal year
Add: Dividends or other
earnings paid on stock or option
awards in the covered fiscal year
prior to vesting if not otherwise
included in the SCT Amounts for
the covered fiscal year
2023
2022
2021
PEO
Other
NEOs*
PEO
Other
NEOs*
PEO
Other
NEOs*
$ 17,261,436
$ 5,104,831
$ 16,667,162
$ 5,057,362
$ 16,150,421
$ 4,231,051
$(14,554,926) $(4,125,680) $(13,087,793) $(3,865,961) $(11,612,745) $(2,876,649)
$ 20,516,846
$ 5,815,643
$ 7,240,513
$ 2,138,748
$ 15,499,027
$ 3,839,404
$
309,275
$
88,027
$(16,465,205) $(4,559,564) $ (3,984,069) $(1,101,103)
$
903,977
$ 233,375
$ 1,719,966
$ 438,328
$ 1,646,304
$ 404,850
$
468,405
$ 130,158
$
133,989
$ 194,423
$
41,791
$
24,416
$
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
$
0
0
CAP Amounts (as calculated)
$ 24,905,013
$ 7,246,354
(3,791,369)
(596,664)
17,740,729
4,521,969
*
Amounts presented are averages for the entire group of Other NEOs in each respective year.
The valuation methodology used to calculate fair values in the above table did not materially differ from those used to
calculate fair values at the time of grant as reflected in the SCT Amounts.
Proxy Statement
59
The following table lists the five financial performance measures that, in our assessment, represent the
most important performance measures we use to link the CAP Amounts for our named executive officers
for fiscal year 2023 (our most recently completed fiscal year), to company performance. Of these
measures, we have identified revenue as the most important.
EBITDA margin percentile ranking
Emerging revenue growth
Non-GAAP operating income
Revenue
TSR percentile ranking
The following charts show graphically the relationships over the past three years of the CAP Amounts for
our PEO and Other NEOs as compared to our cumulative total shareholder return (“TSR”), the cumulative
total shareholder return of our peer group (“Peer Group TSR”), net income and revenue, as well as the
relationship between TSR and Peer Group TSR:
Compensa(cid:2)on Actually Paid vs. Net Income
)
M
$
(
d
a
P
y
l
l
i
a
u
t
c
A
n
o
(cid:2)
a
s
n
e
p
m
o
C
$30
$25
$20
$15
$10
$5
$-
$(5)
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
FY 2021
FY 2022
FY 2023
PEO CAP ($M)
Non-PEO NEOs CAP ($M)
Net Income ($M)
)
M
$
(
e
m
o
c
n
I
t
e
N
60
Proxy Statement
)
M
$
(
d
a
P
y
l
l
i
a
u
t
c
A
n
o
(cid:2)
a
s
n
e
p
m
o
C
)
M
$
(
d
a
P
y
l
l
i
a
u
t
c
A
n
o
(cid:2)
a
s
n
e
p
m
o
C
$30
$25
$20
$15
$10
$5
$-
$(5)
$30
$25
$20
$15
$10
$5
$-
$(5)
Compensa(cid:2)on Actually Paid vs. Revenue
FY 2021
FY 2022
PEO CAP ($M)
Non-PEO NEOs CAP ($M)
FY 2023
Revenue
Compensa(cid:2)on Actually Paid vs. TSR vs. Peer Group TSR
FY 2021
FY 2022
FY 2023
PEO CAP ($M)
Non-PEO NEOs CAP ($M)
TSR
Peer Group TSR
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
)
M
$
(
e
u
n
e
v
e
R
$200.00
$180.00
$160.00
$140.00
$120.00
$100.00
$80.00
$60.00
$40.00
$20.00
$0.00
t
n
e
m
t
s
e
v
n
I
0
0
1
$
l
a
(cid:2)
n
i
I
f
o
e
u
a
V
l
Proxy Statement
61
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 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 $90,000
(increased from $80,000 effective February 7,
2024). 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 Corporate
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. Any newly
appointed non-employee director will receive an
initial equity grant of RSUs having a value of
approximately $225,000. The number of shares
subject to a non-employee director’s initial RSU
award or annual award is determined by dividing
the approximate value of the award, as stated
above, by the average closing price per share of
the Company’s common stock as reported on the
Nasdaq Global Select Market (or if the common
stock is not then traded on such market, such other
market on which the common stock is traded)
for each trading day during the 30 consecutive
trading day period ending on, and including, the
grant date. Unless otherwise determined by the
Board, (a) a non-employee director’s initial equity
grant of RSUs will vest in three (3) equal annual
installments on the first three anniversaries of the
date of grant, and (b) a non-employee director’s
annual equity grant of RSUs will vest on the first
anniversary of the date of grant. In the event of
a change in control of the Company, any
outstanding options and RSUs awarded under
the 2008 Director Long-Term Incentive Plan will
become fully exercisable and deemed fully vested,
respectively.
No director who is also an employee receives
separate compensation for services rendered as a
director. Mr. Griffin is currently the only director
who is also an employee of the Company.
62
Proxy Statement
Director Compensation Table
The following table summarizes the compensation paid to the Company’s non-employee directors for
fiscal year 2023.
Name
Christine King, Lead Independent Director
Alan S. Batey
Kevin L. Beebe
Eric J. Guerin
Suzanne E. McBride
David P. McGlade
Robert A. Schriesheim
Maryann Turcke
Fees Earned or
Paid in Cash
($)
165,000
90,000
95,000
90,426
87,500
117,500
105,000
54,481
Stock
Awards
($)(1)(2)
225,006
225,006
225,006
225,006
225,006
225,006
225,006
225,006
Total
($)
390,006
315,006
320,006
315,432
312,506
342,506
330,006
279,487
(1) The non-employee members of the Board who were directors on September 29, 2023, 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
Eric J. Guerin
Suzanne E. McBride
David P. McGlade
Robert A. Schriesheim
Maryann Turcke
Number of
Securities
Underlying
Unexercised
Options
—
—
—
—
—
—
—
—
Number of Shares
Subject to
Unvested RSUs
2,078
2.078
2,078
2,971
2,976
2,078
2,078
4,155
(2) Reflects, for each non-employee director elected at the 2023 Annual Meeting of Stockholders (i.e., Mses. King, McBride, and
Turcke and Messrs. Batey, Beebe, Guerin, McGlade, and Schriesheim), the grant date fair value of 2,078 RSUs granted on
May 10, 2023, computed in accordance with the provisions of ASC 718 using a price of $98.56 per share, which was the closing
sale price of the Company’s common stock on the Nasdaq Global Select Market on May 10, 2023. Upon first being elected
to serve as a director, new directors received a grant having a grant date fair value approximating $225,000, vesting annually
over three years, where the grant date fair value was based on the 30-day average of the stock price on the fifth business
day following the director’s appointment. The value in this column also reflects the grant date fair value of 2,077 RSUs granted
to Ms. Turcke on February 15, 2023 with a price of $121.73 per share on the grant date.
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 $90,000) 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, Ms. McBride and Ms. Turcke, who are
not required to comply with the guidelines until the
fifth anniversary of their respective appointments
to the Board).
Proxy Statement
63
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 2024 Annual Meeting of Stockholders.
THE COMPENSATION COMMITTEE
Christine King, Chairman
Alan S. Batey
Robert A. Schriesheim
64
Proxy Statement
INTRODUCTION TO PROPOSALS 4 – 7:
ELIMINATION OF SUPERMAJORITY VOTE PROVISIONS
FROM OUR CHARTER
The Company’s Restated Certificate of
Incorporation (“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.
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.
The four proposals that did not pass in 2016 and
2020 were again presented at the 2022 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 again engaging in enhanced solicitation
of stockholder votes for the 2022 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 2023
requesting that the Board take steps to remove
the supermajority provisions in the Charter, as well
as the feedback received from stockholders
following the 2023 Annual Meeting, the Board
has directed that the four proposals that did not
pass in 2016, 2020 or 2022 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,
and recommends that the Company’s stockholders
adopt and approve the proposed amendments.
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 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 only approximately 83% 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.
Proxy Statement
65
In line with feedback from many of the Company’s
largest institutional stockholders who expressed
support for the level of effort previously
undertaken by the Company in seeking to have
these four proposals passed at prior annual
meetings, the Company has undertaken a similar
level of enhanced solicitation of stockholder votes
for these proposals as utilized for the 2022
Annual Meeting.
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 B.
66
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 B.
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
67
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 B.
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
68
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 B.
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
69
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 B.
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
70
Proxy Statement
PROPOSAL 8:
APPROVAL OF THE COMPANY’S SECOND AMENDED AND
RESTATED 2015 LONG-TERM INCENTIVE PLAN
We are asking stockholders to approve a second
amendment and restatement of our Amended and
Restated 2015 Long-Term Incentive Plan (which
we refer to as the “Second Amended and Restated
Plan”) at the Annual Meeting. The Second
Amended and Restated Plan amends and restates
the Amended and Restated 2015 Long-Term
Incentive Plan (which we refer to as the “Current
Plan”). Our equity incentive awards are critical to
attracting, retaining, and motivating the most
talented employees in our industry, upon whose
judgment, interest, and special effort the successful
operation of the Company is largely dependent.
We and our Board of Directors understand that
these equity-compensation needs must be
balanced against the dilutive effect of such
programs on our stockholders. As a result, based
on the careful weighing of these considerations,
on February 7, 2024, our Board of Directors
adopted, upon the recommendation of the
Compensation Committee and subject to
stockholder approval, the Second Amended and
Restated Plan.
The Second Amended and Restated Plan
increases the number of shares of our common
stock authorized for issuance under the Current
Plan by 6,000,000 shares (or the equivalent of
4,000,000 shares if all were to be granted subject
to Full Value Awards, as defined below, using
the Company’s fungible share ratio of 1.5), subject
to adjustment in the event of stock splits and
other similar events. No other changes are being
made to the Current Plan.
We intend to utilize the Second Amended and
Restated Plan as we have utilized the Current Plan:
specifically, to grant equity awards to our
employees in order to recruit, incentivize, retain
and reward individuals critical to our success. Our
Compensation Committee determined the
requested number of shares for the Second
Amended and Restated Plan based on projected
new-hire equity awards, annual equity awards,
and motivational and retention awards and an
assessment of the magnitude of the shares
reserved under the Second Amended and
Restated Plan that our stockholders would likely
find acceptable.
If the Second Amended and Restated Plan is
approved by our stockholders, then, subject to
adjustment in the event of stock splits and other
similar events, the total number of shares that may
be issued under the Second Amended and
Restated Plan would be 20,750,000 shares plus
an additional number of shares (up to 22,300,000)
that is equal to the sum of the number of shares
that remained in the pool of shares under the
Company’s Amended and Restated 2005
Long-Term Incentive Plan (which we refer to as
the “Prior Plan”) as of May 19, 2015, which was the
date on which our stockholders originally
approved the Current Plan, plus the number of
shares that were subject to awards outstanding
under the Prior Plan as of May 19, 2015, and that
are subsequently terminated, surrendered,
cancelled, forfeited, or repurchased by us pursuant
to a contractual repurchase right. If approved,
the new shares reserved under the Second
Amended and Restated Plan would represent
approximately 3.7% of our 160,225,891
outstanding shares as of January 1, 2024. Our
Board of Directors believes the proposed dilution
to stockholders as a result of the amendment
and restatement of the Current Plan is judicious
and sustainable and, importantly, critical to meet
our business goals. If this proposal is approved by
our stockholders, we intend to register the
additional shares reserved for issuance under the
Second Amended and Restated Plan by filing a
Registration Statement on Form S-8 as soon as
practicable following approval. The Current Plan
was originally adopted by our Board of Directors
on November 11, 2014, approved by our
stockholders on May 19, 2015, amended by our
Board of Directors on May 8, 2019, amended and
restated by our Board of Directors on
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71
November 11, 2020 and approved by our
stockholders on May 12, 2021.
Highlights of the Second Amended and
Restated Plan
The Board of Directors recommends a vote for
the approval of the Second Amended and
Restated Plan because it believes the Second
Amended and Restated Plan is in the best interests
of the Company and its stockholders and
contains features that are consistent with sound
corporate governance practices, including the
following:
to approval by our stockholders, allowing our
stockholders to have a say in our equity
compensation programs.
• Includes a fungible share pool. Each share of
common stock delivered in settlement of an
award made under the Second Amended and
Restated Plan other than an option, stock
appreciation right (or “SAR”), or other award for
which the participant pays the fair market
value of our common stock as of the date of
grant (each, a “Full Value Award”) will reduce the
number of shares available for issuance by 1.5
shares.
• Does not provide for automatic vesting of
• Does not permit repricings without
outstanding awards upon a change in control
of the Company. Upon a change in control,
all outstanding equity awards granted under the
Second Amended and Restated Plan will
continue to be subject to the same time-based
vesting schedule to which the awards were
subject prior to the change in control (unless
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, in
which case the awards will accelerate in full as of
the change in control). A participant will be
entitled to full accelerated vesting of all of his
or her outstanding equity awards granted under
the Second Amended and Restated Plan in the
event that such participant’s employment is
(i) terminated by the Company without cause,
or (ii) terminated by the participant for good
reason, in either case within the period of time
commencing three (3) months prior to and
ending twelve (12) months following a change
in control.
• Does not include an “evergreen” provision.
The number of shares of our common stock
available for issuance under the Second
Amended and Restated Plan is fixed and will
not be automatically increased based on the
number of our shares outstanding. Therefore,
any increase to the maximum share reserve in the
Second Amended and Restated Plan is subject
stockholder approval. Without stockholder
approval, we may not amend any option or SAR
to reduce the exercise price or replace any
stock option or SAR with cash or any other award
when the exercise price of the stock option or
SAR exceeds the fair market value of the
underlying shares.
• Does not permit liberal share recycling. The
Second Amended and Restated Plan provides
that the following shares may not again be
made available for issuance as awards under
the Second Amended and Restated Plan:
(i) shares used to pay the exercise price of an
option (or other award), (ii) shares delivered to
or withheld by us to pay the withholding taxes
related to an award, (iii) shares that were
subject to a stock-settled SAR and were not
issued upon the net settlement or net exercise
of such SAR, or (iv) shares repurchased on the
open market with the proceeds of an option
exercise.
• Does not provide for payment of dividends
or dividend equivalents on awards until
vesting. Dividends and dividend equivalents
payable in connection with restricted stock
awards, restricted stock units (“RSUs”), or other
awards will only be paid if and when the shares
underlying such awards vest. Dividends and
dividend equivalents payable in connection with
performance-based awards will only be paid
to the extent that the performance-based vesting
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Proxy Statement
conditions are satisfied and the shares
underlying such awards are earned and vest.
• Prohibits providing for dividend equivalents
on options and SARs. The Second Amended
and Restated Plan provides that no dividend
equivalents may be payable with respect
to options or SARs.
• Provides that stock option and SAR exercise
prices will not be lower than the fair market
value of the common stock on the grant
date. The Second Amended and Restated Plan
prohibits granting stock options and SARs with
exercise prices lower than the fair market value
of a share of our common stock on the grant
date.
• Prohibits the grant of options with “reload”
provisions. No options granted under the
Second Amended and Restated Plan may
contain a provision entitling the optionee to the
automatic grant of additional options in
connection with any exercise of the original
options.
• Limits grants. Although no longer required for
purposes of Section 162(m) of the IRC, the
Second Amended and Restated Plan retains the
grant limitations of the Current Plan. The
maximum aggregate number of shares with
respect to awards that may be granted to any
one person during any calendar year is
1.5 million (subject to adjustment for certain
equity restructurings and other corporate
transactions). The maximum aggregate amount
of cash that may be paid in awards payable in
cash to any person during any one calendar year
is $5 million.
• Provides for independent administration.
The Compensation Committee, which consists
of only non-employee directors, or another
committee or subcommittee of our Board of
Directors, administers the Second Amended
and Restated Plan.
As of January 1, 2024, we had under all of our
equity incentive plans (excluding our 2002
Employee Stock Purchase Plan, as amended and
our Non-Qualified Employee Stock Purchase Plan)
an aggregate of (i) 15,727 shares reserved for
issuance pursuant to outstanding stock options,
with a weighted average exercise price of $72.60
and a weighted average life of 4.09 years,
(ii) 2,801,713 issued but unvested shares of
restricted common stock and unissued shares of
common stock under unvested restricted stock
unit awards, (iii) 120,310 unissued shares of
common stock under earned, but unvested,
performance share awards, and (iv) 1,463,717
unissued shares of common stock under
performance share awards for which the
performance periods have not yet been
completed, assuming achievement at the target
level of performance. As of January 1, 2024, the
only equity incentive plans under which we were
able to grant additional awards (excluding our
2002 Employee Stock Purchase Plan, as amended
and our Non-Qualified Employee Stock Purchase
Plan) were the Current Plan and the Company’s
Amended and Restated 2008 Director Long-Term
Incentive Plan, as amended (the “2008 Director
Plan”). As of January 1, 2024, there were 5,693,891
shares of our common stock available for future
awards under the Current Plan and 529,647 shares
of our common stock available for future awards
under the 2008 Director Plan. The Board of
Directors believes that the number of shares
remaining available for grants under the Current
Plan is insufficient to achieve the Company’s
compensation objectives over the coming years.
If the Second Amended and Restated Plan is not
approved by our stockholders, the Company
will continue to make grants under the Current
Plan but expects, based on past grant practice and
the Company’s recent stock price performance,
that the Company will not have enough shares to
make grants beyond the last quarter of calendar
year 2024, although this date could be sooner in
the event of a decrease in the Company’s stock
price, continued workforce growth, grants in
relation to merger and acquisition activity, or
above-target performance under performance
share awards.
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73
Reasons Why Stockholders Should
Approve the Second Amended and
Restated Plan
Incentivizes, Retains and Motivates Talent. It is
critical to our success that we incentivize, retain
and motivate excellent talent in a competitive labor
market. Our equity-based compensation program
has always been, and will continue to be, an
important component in our ability to pay market-
competitive compensation to our employees.
Aligns with Our Pay-for-Performance
Compensation Philosophy. We believe that equity-
based compensation is inherently performance-
based. As the value of our stock appreciates, our
employees receive greater compensation at the
same time that our stockholders are receiving a
greater return on their investment. Conversely,
if the stock price does not appreciate following the
grant of an equity award, then our employees
would not receive any compensation in respect of
stock options and would receive lower
compensation than intended in respect of
restricted stock, restricted stock units and
performance-based shares.
Aligns Employee Interests with Stockholder
Interests. Providing certain of our employees with
compensation in the form of equity directly
aligns the interests of those employees with the
interests of our stockholders. If the Second
Amended and Restated Plan is approved by our
stockholders, we will be able to continue granting
equity-based incentives that fosters this alignment
between our employees and our stockholders.
Consistent with Stockholder Interests and Sound
Corporate Governance. As described above
under the heading “Highlights of the Second
Amended and Restated Plan” and more
thoroughly below, the Second Amended and
Restated Plan was purposefully designed to
include features that are consistent with the
interests of our stockholders and sound corporate
governance practices.
Information Regarding Burn Rate and
Overhang
In its determination to adopt the Second
Amended and Restated Plan, subject to
stockholder approval, our Board of Directors
considered our historical award usage and
anticipated future award needs, advice from Aon,
and guidelines from proxy advisory firms. In
particular, the Board of Directors reviewed the
Company’s “burn rate” and “overhang,” which we
consider to be important metrics of how our
equity compensation program affects our
stockholders.
Burn rate and overhang provide measures of the
potential dilutive impact of our equity award
program. We calculate burn rate by dividing the
number of shares subject to equity awards granted
during the year (at target levels for performance
share awards) by the weighted average number of
shares outstanding. As shown in the table below,
the Company’s three-year average burn rate (for
fiscal years 2021, 2022, and 2023) is 1.1%, which
is (i) just above the median 0.9% three-year
adjusted average burn rate of the Comparator
Group, as provided by Aon, and (ii) below the 2.0%
burn rate cap that ISS applied to the
semiconductor industry for 2024.
FY2023 FY2022 FY2021
3-year
Average
Burn Rate(1)
1.5%
0.9%
0.9%
1.1%
(1) Burn rate is calculated as the sum of all stock option
awards and Full Value Awards (at target level for PSAs)
granted in a given fiscal year divided by the weighted
average number of shares of our common stock
outstanding as of the end of the fiscal year. We have
calculated the burn rate based on the target award level
for PSAs, which we believe provides the best estimate
of our future burn rate. If we were to assume maximum
award levels for PSAs granted in fiscal years 2021, 2022,
and 2023, the Company’s three-year average burn rate
would be 1.6%.
Overhang is a measure of potential dilution,
which we define as the sum of (i) the total number
of shares underlying all equity awards outstanding
and (ii) the total number of shares available for
future award grants, divided by the number of
outstanding shares of common stock. As of
January 1, 2024, our total overhang ranged from
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Proxy Statement
5.2% to a maximum of 6.5%, depending on the
mix of Full Value Awards and stock options or SARs
in future equity award grants using shares
authorized for issuance under the Current Plan
and the 2008 Director Plan. As a comparison, the
median total overhang of the Comparator
Group as provided by Aon for fiscal year 2023
was 7.6% and the 75th percentile overhang of the
Comparator Group was 9.2%. If the Second
Amended and Restated Plan is approved and an
additional 6,000,000 shares (or the equivalent of
4,000,000 shares if all were to be granted
subject to Full Value Awards) consequently
become available for grant, our total overhang
would range from 7.7% to a maximum of 10.2%,
depending on the mix of Full Value Awards and
stock options or SARs awarded under the
Second Amended and Restated Plan and the
2008 Director Plan.
Based on our historical grant practices and our
anticipated needs to support the Company’s
current significant growth, as well as advice from
Aon, we believe that the increase in authorized
shares requested for stockholder approval should
be sufficient to cover equity awards under the
Second Amended and Restated Plan for
approximately two years.
Vote Required to Approve Proposal 8
The proposal to adopt the Second Amended and
Restated Plan will be approved by the stockholders
if it receives the affirmative vote of a majority of
the shares present or represented by proxy at the
Annual Meeting and entitled to vote on the
proposal. If you sign and return your proxy card
or submit your proxy via telephone or the Internet,
your shares will be voted (unless you indicate to
the contrary) to approve the Second Amended and
Restated Plan. Specifically marking “ABSTAIN”
on your proxy card will have the same impact as a
vote that is marked “AGAINST” the proposal.
Description of the Second Amended and Restated Plan
A summary of the principal provisions of the
Second Amended and Restated Plan is set forth
below. The summary is qualified in its entirety by
reference to the full text of the Second Amended
and Restated Plan, which is attached as Annex 1
to this Proxy Statement as filed with the SEC on
March 28, 2024.
For purposes of this proposal and except where
the context otherwise requires, the term
“Company” and similar terms include any of the
Company’s present or future parent or subsidiary
corporations as defined in Section 424(e) or
(f) of the IRC and any other business venture
(including, without limitation, joint venture or
limited liability company) in which the Company
has a controlling interest, as determined by
our Board of Directors.
Administration
Unless otherwise determined by the Board of
Directors, the Second Amended and Restated Plan
will be administered by the Compensation
Committee (the “Administrator”), which will consist
solely of two or more non-employee directors,
each of whom is intended to qualify as a “non-
employee director” as defined by Rule 16b-3
under the Exchange Act and an “independent
director” under the rules of Nasdaq (or other
securities exchange or automated quotation
system on which the Company’s common stock is
listed or traded). To the extent permitted by
applicable law, the Administrator may delegate to
a committee or subcommittee of the Board of
Directors any or all of its powers under the Second
Amended and Restated Plan. In addition, to the
extent permitted by applicable law and the Second
Amended and Restated Plan, the Administrator
may delegate to one or more officers of the
Company the authority to grant or amend awards
under the Second Amended and Restated Plan
to participants other than (i) “executive officers” of
the Company, as defined by Rule 3b-7 under the
Exchange Act, (ii) “officers” of the Company, as
defined by Rule 16a-1 under the Exchange Act,
and (iii) officers to whom the authority to grant or
amend awards under the Second Amended
and Restated Plan has been delegated.
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75
The Administrator will have the authority to
administer the Second Amended and Restated
Plan, including the power to (i) designate
participants under the Second Amended and
Restated Plan, (ii) determine the types of awards
granted to participants under the Second
Amended and Restated Plan, the number of such
awards, and the number of shares of common
stock subject to such awards, (iii) determine and
interpret the terms and conditions of any awards
under the Second Amended and Restated Plan,
including the vesting schedule and exercise price,
(iv) prescribe the form of each award agreement,
and (v) adopt rules for the administration,
interpretation, and application of the Second
Amended and Restated Plan.
Eligibility
Persons eligible to participate in the Second
Amended and Restated Plan include all employees
(including officers of the Company) and
consultants and advisors (as the terms consultants
and advisors are defined and interpreted for
purposes of Form S-8 under the Securities Act of
1933, as amended) of the Company and its
subsidiaries. As of January 1, 2024, approximately
9,700 persons were eligible to receive awards
under the Current Plan, which number consists of
the approximate total number of the Company’s
employees, including six executive officers (who
are current employees) of the Company and
approximately 9,694 employees (excluding
executive officers). As of January 1, 2024, the
Company had no consultants or advisors who
were eligible to receive awards under the Current
Plan. Non-employee directors are not eligible to
participate in the Second Amended and Restated
Plan.
Awards under the Second Amended and Restated
Plan are subject to the discretion of the
Administrator. Therefore, it is not possible to
determine the benefits that will be received in the
future by participants in the Second Amended
and Restated Plan. See “Existing Plan Benefits”
below for a summary of equity awards granted
under the Current Plan.
On March 12, 2024, the last reported sale price of
our common stock on the Nasdaq Global Select
Market was $109.32.
Limitation on Awards and Shares
Available
Subject to adjustment in the event of stock splits
and other similar events, awards may be made
under the Second Amended and Restated Plan for
a number of shares equal to the sum of
(i) 20.75 million shares, and (ii) such additional
number of shares (up to 22.3 million shares) as is
equal to the sum of (x) the number of shares
reserved for issuance under the Prior Plan that
remained available for grant under the Prior Plan
as of May 19, 2015, which was the date on which
our stockholders originally approved the Current
Plan, and (y) the number of shares subject to
awards granted under the Prior Plan which expire,
terminate, or are otherwise surrendered,
cancelled, forfeited, or repurchased by the
Company pursuant to a contractual repurchase
right after May 19, 2015. Each share of common
stock delivered in settlement of a Full Value Award
will reduce the number of shares available for
issuance by 1.5 shares.
Generally, if an award granted under the Second
Amended and Restated Plan or under the Prior
Plan terminates, expires, or lapses for any reason,
the unused shares of common stock subject to
the award will again be made available for issuance
under the Second Amended and Restated Plan.
Each share subject to a Full Value Award that is
forfeited or expires for any reason or is settled for
cash will increase the number of shares that can
be issued under the Second Amended and
Restated Plan by 1.5 shares. Otherwise, each
share subject to an award that is forfeited or
expires for any reason or is settled for cash will
increase the number of shares that can be issued
under the Second Amended and Restated Plan
by one share. However, the following shares may
not again be made available for issuance as awards
under the Second Amended and Restated Plan:
(i) shares used to pay the exercise price of an
option (or other award), (ii) shares delivered to or
withheld by us to pay the withholding taxes
related to an award, (iii) shares that were subject
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Proxy Statement
to a stock-settled SAR and were not issued upon
the net settlement or net exercise of such SAR, or
(iv) shares repurchased on the open market with
the proceeds of an option exercise. The payment
of dividend equivalents in cash in conjunction
with outstanding awards will not be counted
against the shares available for issuance under
the Second Amended and Restated Plan. Awards
settleable only in cash will not be counted
against the shares available for issuance under
the Second Amended and Restated Plan. In
addition, shares issued in assumption of, or in
substitution for, any outstanding awards previously
granted by an entity in connection with a
corporate transaction (“Substitute Awards”) will
not be counted against the shares available for
issuance under the Second Amended and
Restated Plan.
The maximum aggregate number of shares with
respect to awards that may be granted to any one
person during any calendar year is 1.5 million
(not including any Substitute Awards and subject
to adjustment for certain equity restructurings and
other corporate transactions). The maximum
aggregate amount of cash that may be paid to
any person during any one calendar year is
$5 million. For purposes of the foregoing limits,
the combination of an option in tandem with a SAR
is treated as a single award, and the fungible
share counting rules shall not apply and instead
each share subject to any type of award shall be
counted as one share.
Awards
The Second Amended and Restated Plan provides
for the grant of nonqualified stock options,
restricted stock awards, RSUs, performance
awards, dividend equivalents, SARs, and other
stock unit awards. Each award will be evidenced
by a written award agreement with terms and
conditions consistent with the Second Amended
and Restated Plan. Except as otherwise provided
by the Second Amended and Restated Plan,
each award may be made alone or in addition or
in relation to any other award. The terms of each
award need not be identical, and the Administrator
need not treat participants uniformly. Upon the
exercise or vesting of an award, the exercise or
purchase price must be paid in full by one of the
following methods, in the discretion of the
Administrator: cash or check; delivery of a written
or electronic notice that the participant has
placed a market sell order with a broker with
respect to shares then issuable upon exercise or
vesting of an award and that the broker has been
directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction
of the aggregate payments required, provided
that payment of such proceeds is then made to the
Company upon settlement of such sale; subject
to certain requirements, tendering shares of
common stock valued at their fair market value;
and/or by payment of such other lawful
consideration acceptable to the Administrator.
Any tax withholding obligations may be satisfied
in the Administrator’s sole discretion by allowing a
participant to elect to have the Company
withhold shares otherwise issuable under an
award that have a fair market value equal to the
aggregate amount of such liabilities. Except
as otherwise provided in the Second Amended
and Restated Plan, the Administrator may at any
time provide that any award will become
immediately exercisable in full or in part, free of
some or all restrictions or conditions or otherwise
realizable in full or in part, as the case may be.
Nonqualified Stock Options. The exercise price
of nonqualified stock options granted pursuant to
the Second Amended and Restated Plan will not
be less than 100% of the fair market value of the
common stock on the date of grant. Nonqualified
stock options may be subject to vesting conditions
established by the Administrator, including
continued employment or achievement of
performance criteria, and be exercised as
determined by the Administrator, but in no event
after the seven (7) year anniversary of the date
of grant. No option granted under the Second
Amended and Restated Plan may contain any
provision entitling the optionee to the automatic
grant of additional options in connection with any
exercise of the original option.
Restricted Stock. A restricted stock award
granted pursuant to the Second Amended and
Restated Plan is the grant of shares of common
stock at a price determined by the Administrator
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77
(including zero), that is subject to transfer
restrictions and may be subject to substantial risk
of forfeiture until specific conditions are met.
Conditions may be based on continuing
employment or achieving performance goals.
During the period of restriction, participants
holding shares of restricted stock have full voting
rights with respect to such shares. Dividends
paid on the shares prior to vesting will accrue and
will only be paid to the participant if and when
the shares of restricted stock vest.
Restricted Stock Units. RSUs granted pursuant to
the Second Amended and Restated Plan may
be subject to vesting conditions established by
the Administrator including continued
employment or achievement of performance
criteria. Like restricted stock, RSUs may not be sold
or otherwise transferred or hypothecated until
vesting conditions are removed or expire. Unlike
restricted stock, the common stock underlying
RSUs will not be issued until the RSUs have vested,
and recipients of RSUs generally will have no
voting rights and will not receive dividend
payments prior to the time when vesting
conditions are satisfied and the shares subject to
the award are issued to the participant.
Dividend Equivalents. Dividend equivalents are
rights to receive the equivalent value (in cash or
common stock) of dividends paid on common
stock. Dividend equivalents represent the value
of the dividends per share of common stock paid
by the Company, calculated with reference to
the number of shares that are subject to any award
held by the participant. Dividend equivalents are
converted to cash or additional shares of common
stock by such formula and at such time subject
to such limitations as may be determined by the
Administrator. Dividend equivalents are credited
as of dividend payment dates during the period
after the award is granted and before the award
vests and are paid to the participant only if and
when the award vests. Dividend equivalents cannot
be granted with respect to options or SARs.
Stock Appreciation Rights. SARs entitle recipients
to receive common stock determined in whole
or in part by reference to the appreciation in the
value of the common stock over the value of our
common stock on the date of grant of the SAR.
SARs must have a base price that is at least equal
to the fair market value of the common stock
on the grant date and may have a term of no
greater than seven (7) years. SARs will be settled
by the delivery of shares of common stock. SARs
may be issued in tandem with options or as
stand-alone rights.
Other Stock Unit Awards. Under the Second
Amended and Restated Plan, the Board of
Directors has the right to grant other awards of
shares of our common stock and other awards that
are valued in whole or in part by reference to, or
are otherwise based upon, our common stock or
other property. Other stock unit awards have
such terms and conditions as the Board of
Directors may determine, including performance-
based conditions. Other stock unit awards are
available as a form of payment in settlement of
other awards granted under the Second Amended
and Restated Plan or as payment in lieu of
compensation to which a recipient is otherwise
entitled. Other stock unit awards may be paid in
common stock or cash, as determined by the
Board of Directors.
Performance Awards. A restricted stock award,
RSU award, other stock unit award, cash bonus
award, stock bonus award, or any other award
granted under the Second Amended and Restated
Plan may be made subject to achievement of
performance goals.
Performance goals applicable to a performance
award may vary by participant, be different for
different awards, or be particular to a participant
or the subsidiary, division, business unit,
department, branch, or other unit in which the
participant works. The performance goals may be
based on one or more of the following
performance criteria, any of which may be
measured with respect to an individual participant,
the Company, or any one or more of the
Company’s subsidiaries, divisions, or
business units, and in absolute or relative terms:
revenues, net income (loss), operating income
(loss), gross profit, earnings before or after
discontinued operations, interest, taxes,
depreciation and/or amortization, operating profit
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Proxy Statement
before or after discontinued operations and/or
depreciation and/or amortization, earnings (loss)
per share, net cash flow, cash flow from operations,
free cash flow, revenue growth, earnings growth,
gross margins, operating margins, net margins,
inventory management (including, but not limited
to, reductions in inventory, inventory turns, and
inventory levels), working capital (including a
specific component thereof), return on sales,
return on assets, return on stockholders’ equity,
return on investment or working capital, cash or
cash equivalents position, achievement of balance
sheet or income statement objectives or total
stockholder return, stock price, improvement in
financial ratings, completion of strategic
acquisitions/dispositions, manufacturing
efficiency, product quality, customer satisfaction,
market share and/or product design wins, a
specific cost or expense item, and implementation
or completion of a specified key business
project, or any other criteria established by the
Administrator.
In addition, the Administrator may, in its sole
discretion, provide that one or more adjustments
be made to one or more of the performance
goals, including the exclusion of one or more of
the following: extraordinary and/or nonrecurring
items, the cumulative effects of changes in
accounting principles or applicable laws, gains or
losses on the dispositions of discontinued
operations, the write-down of any asset, charges
for restructuring and rationalization programs,
amortization of purchased intangibles associated
with acquisitions, compensation expenses
related to acquisitions, other acquisition-related
charges (including, but not limited to, items
attributable to the business operations of any
entity acquired by the Company during the
applicable performance period), impairment
charges, gain or loss on minority equity
investments, noncash income tax expenses, equity-
based compensation expenses, items relating to
financing activities; other nonoperating items;
items related to the disposal of a business or
segment of a business; items attributable to any
stock dividend, stock split, combination, or
exchange of shares occurring during the
applicable performance period; or any other
adjustments as determined by the Administrator.
Performance awards can be paid in cash, common
stock, or a combination of both. The Administrator
may, in its discretion, adjust the cash or number
of shares of common stock payable pursuant to
any performance award, and the Administrator
may, at any time, waive the achievement of the
applicable performance goals, including in
the case of the death or disability of the participant
or in the event of a change in control of the
Company.
Transferability of Awards
Except as the Administrator may otherwise
determine or provide in an award, awards may
not be sold, assigned, transferred, pledged, or
otherwise encumbered by the person to whom
they are granted, either voluntarily or by operation
of law, except by will or the laws of descent and
distribution and, during the life of the participant,
may only be exercisable by the participant.
Repricing
Unless approved by the Company’s stockholders
or permitted under the Second Amended and
Restated Plan in connection with a change in
capitalization, reorganization event, or change in
control, the Company may not (i) amend any
outstanding option or SAR granted under the
Second Amended and Restated Plan to provide
an exercise price per share that is lower than the
then-current exercise price per share of such
outstanding option or SAR, (ii) cancel any
outstanding option or SAR (whether or not
granted under the Second Amended and Restated
Plan) and grant in substitution new awards
covering the same or a different number of shares
of common stock and having an exercise or
purchase price per share lower than the
then-current exercise price per share of the
cancelled option or SAR, (iii) cancel in exchange
for a cash payment any outstanding option or SAR
with an exercise price per share above the
then-current fair market value of the common
stock, or (iv) take any other action under the
Second Amended and Restated Plan that
constitutes a “repricing” within the meaning of
the rules of Nasdaq (or other securities exchange
Proxy Statement
79
or automated quotation system on which shares
of common stock are listed or traded).
Adjustments to Awards
In the event of any stock split, reverse stock split,
stock dividend, recapitalization, combination of
shares, reclassification of shares, spinoff, or other
similar change in capitalization or any distribution
to holders of common stock (other than ordinary
cash dividends), the Company will make
appropriate adjustments (or substituted awards
may be made if applicable), to the extent
determined by the Board of Directors, to the
aggregate number and kind of shares that may
be issued under the Second Amended and
Restated Plan (including adjustments to award
limits), the number and kind of shares subject to
each outstanding award under the Second
Amended and Restated Plan, the exercise price
or repurchase price of such outstanding award (if
applicable), and the terms and conditions of
any outstanding awards.
Effect of a Reorganization Event
The Second Amended and Restated Plan also
contains provisions addressing the consequences
of a Reorganization Event, which is defined as
(i) any merger or consolidation as a result of which
our common stock is converted into or exchanged
for the right to receive cash, securities, or other
property, or is cancelled, (ii) any exchange of all of
our common stock for cash, securities, or other
property pursuant to a share exchange transaction,
or (iii) any dissolution or complete liquidation of
the Company. In connection with a Reorganization
Event, the Board of Directors will take one or
more of the following actions as to outstanding
awards (other than restricted stock): (i) provide
that awards will be assumed, or substantially
equivalent awards will be substituted, by the
acquiring or succeeding corporation (or an affiliate
thereof), (ii) upon written notice, provide that all
unexercised awards will become exercisable in full
and will terminate immediately prior to the
consummation of the Reorganization Event unless
exercised by the award holder within a specified
period following the date of such notice,
(iii) provide that outstanding awards will become
realizable or deliverable, or restrictions applicable
to an award will lapse in whole or in part prior to
or upon such Reorganization Event, (iv) in the event
of a Reorganization Event under the terms of
which holders of common stock will receive upon
consummation thereof a cash payment for each
share surrendered in the Reorganization Event (the
“Acquisition Price”), make or provide for a cash
payment to an award holder equal to (A) the
number of shares of common stock subject to the
award multiplied by (B) the excess, if any, of the
Acquisition Price over the exercise or purchase
price of such award, less any applicable tax
withholdings, in exchange for the termination of
such awards, and/or (v) provide that, in connection
with a dissolution or complete liquidation of the
Company, awards will convert into the right to
receive liquidation proceeds (if applicable, net of
the exercise or purchase price thereof).
In connection with a Reorganization Event other
than a liquidation or dissolution of the Company,
the repurchase and other rights of the Company
with respect to outstanding awards of restricted
stock will inure to the benefit of the Company’s
successor and will apply to the cash, securities, or
other property which shares of common stock
were converted into or exchanged for in
connection with the Reorganization Event in the
same manner and to the same extent as they
applied to the restricted stock. In connection with
a liquidation or dissolution of the Company,
except to the extent otherwise provided in the
award agreement or other agreement between
the participant and the Company, all restrictions
and conditions on all awards of restricted stock
then outstanding will automatically be deemed
terminated or satisfied.
Effect of a Change in Control
At the time of a change in control, all outstanding
equity awards granted under the Second
Amended and Restated Plan will 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
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Proxy Statement
change in control occurs prior to the end of the
performance period, such awards will 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 (unless the Board of
Directors determines that it would be
impracticable to calculate performance pursuant
to (ii), in which case the awards will be deemed
earned at target). 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 awards immediately prior to the
change in control, then such awards will accelerate
in full as of the change in control. The Second
Amended and Restated Plan also provides that a
participant will be entitled to full accelerated
vesting of all of his or her outstanding equity
awards in the event that such participant’s
employment is (i) terminated by the Company
without cause, or (ii) terminated by the participant
for good reason, in either case within the period
of time commencing three (3) months prior to and
ending twelve (12) months following a change in
control.
The terms “change in control,” “cause,” and “good
reason” are each defined in the Second Amended
and Restated Plan. 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 Directors, of a majority of the Board of
Directors 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: provided the participant timely gives
notice of the event or condition to the Company
and sufficient time for the Company to correct the
event or condition, (i) a reduction of 5% or more
in base salary; or (ii) a change in office location of
more than fifty (50) miles. However, the Second
Amended and Restated Plan provides that if the
participant and the Company are party to an
employment agreement, severance agreement,
change in control agreement or other similar
agreement that contains a definition of cause or
good reason, the definitions in that agreement
shall control.
Death or Permanent Disability
In the event of a participant’s death or permanent
disability (within the meaning of Section 22(e)(3)
of the IRC), the Second Amended and Restated
Plan provides for full acceleration of the vesting of
all then-outstanding equity awards subject to
time-based vesting (including all performance-
based equity awards where the performance
period has ended and the shares are earned but
unissued). The Second Amended and Restated
Plan also provides that for a performance-based
equity award where the participant’s death or
permanent disability occurs prior to the end of
the performance period, such award will 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 participant
remained employed through the end of the
performance period, and such earned shares will
become vested and issuable to the participant
after the performance period ends. In addition,
except as otherwise provided in an employment
agreement, severance agreement, change in
control agreement or similar agreement, in an
award agreement or by action of the Administrator
following the grant of an option, all outstanding
stock options will remain exercisable following the
termination of employment for a period of
twelve (12) months, in the case of death, and for a
period of six (6) months, in the case of permanent
disability (but not beyond the expiration of their
respective maximum terms).
Proxy Statement
81
Substitute Options
In connection with a merger or consolidation of
an entity with us or the acquisition by us of the
property or stock of an entity, the Administrator
may grant options in substitution for any options
or other stock or stock-based awards granted by
such entity or an affiliate thereof. Substitute
options may be granted on such terms as the
Administrator deems appropriate in the
circumstances, notwithstanding any limitations
under the Second Amended and Restated Plan.
Amendment and Termination
The Board of Directors may at any time amend,
suspend, or terminate the Second Amended and
Restated Plan. Without approval of the Company’s
stockholders, no amendment may increase the
number of shares authorized under the Second
Amended and Restated Plan (except as provided
under the Second Amended and Restated Plan
in connection with changes in capitalization),
materially increase the benefits provided under
the Second Amended and Restated Plan,
materially expand the class of participants eligible
to participate in the Second Amended and
Restated Plan, expand the types of awards
provided under the Second Amended and
Restated Plan, or make any other changes that
require stockholder approval under the rules of
Nasdaq (or other securities exchange or
automated quotation system on which shares of
our common stock are listed or traded). In no event
may any award be granted pursuant to the
Second Amended and Restated Plan on or after
November 10, 2030.
Federal Income Tax Consequences
The U.S. federal income tax consequences of the
Second Amended and Restated Plan under current
federal law, which is subject to change, are
summarized in the following discussion of the
general tax principles applicable to the Second
Amended and Restated Plan. This summary
assumes that all awards are exempt from, or
comply with, the rules of Section 409A of the IRC
regarding nonqualifed deferred compensation. In
addition, this summary is not intended to be
exhaustive and, among other considerations,
does not describe state, local, or foreign tax
consequences. Tax considerations may vary from
locality to locality and depending upon individual
circumstances.
Nonqualified Stock Options. A participant will not
have income upon the grant of a nonqualified
stock option. A participant will have compensation
income upon the exercise of a nonqualified
stock option equal to the value of the stock on
the day the participant exercised the option less
the exercise price. Upon sale of the stock, the
participant will have capital gain or loss equal to
the difference between the sales proceeds and the
value of the stock on the day the option was
exercised. This capital gain or loss will be long-term
if the participant has held the stock for more
than one year and otherwise will be short-term.
Restricted Stock. A participant will not have
income upon the grant of restricted stock unless
an election under Section 83(b) of the IRC is made
within 30 days of the date of grant. If a timely
83(b) election is made, then a participant will have
compensation income equal to the value of the
stock less the purchase price, if any. When the
stock is sold, the participant will have capital gain
or loss equal to the difference between the
sales proceeds and the value of the stock on the
date of grant. If the participant does not make an
83(b) election, then when the stock vests the
participant will have compensation income equal
to the value of the stock on the vesting date
less the purchase price, if any. When the stock is
sold, the participant will have capital gain or loss
equal to the sales proceeds less the value of
the stock on the vesting date. Any capital gain or
loss will be long-term if the participant held the
stock for more than one year and otherwise will
be short-term.
Restricted Stock Units. A participant will not have
income upon the grant of a restricted stock unit.
A participant is not permitted to make a
Section 83(b) election with respect to a restricted
stock unit award. When the shares of common
stock are delivered with respect to the restricted
stock units (which may be upon vesting or may be
at a later date), the participant will have income
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Proxy Statement
on the date of delivery in an amount equal to the
fair market value of the stock on such date less the
purchase price, if any. When the stock is sold,
the participant will have capital gain or loss equal
to the sales proceeds less the value of the stock
on the delivery date. Any capital gain or loss will be
long-term if the participant held the stock for
more than one year and otherwise will be
short-term.
Stock Appreciation Rights. A participant will not
have income upon the grant of a SAR. A participant
will have compensation income upon the
exercise of a SAR equal to the fair market value of
the stock received. When the stock distributed
in settlement of the SAR is sold, the participant will
have capital gain or loss equal to the sales
proceeds less the value of the stock on the
exercise date. Any capital gain or loss will be
long-term if the participant held the stock for more
than one year and otherwise will be short-term.
Other Stock Unit Awards. The tax consequences
associated with any other stock unit award will vary
depending on the specific terms of such award.
Among the relevant factors are whether or not the
Plan Benefits
award has a readily ascertainable fair market
value, whether or not the award is subject to
forfeiture provisions or restrictions on transfer, the
nature of the property to be received by the
participant under the award, and the participant’s
holding period and tax basis for the award or
underlying common stock.
Dividend Equivalents; Accrued Dividends. The
grantee generally will not realize taxable income
at the time of the grant of the dividend equivalents
or at the time dividends are accrued on unvested
restricted stock awards. When a dividend
equivalent or accrued dividend is paid upon an
award vesting, the participant will recognize
compensation income.
Tax Consequences to the Company. There will
not be any tax consequences to the Company as
a result of the adoption of the Second Amended
and Restated Plan or the grant of awards
thereunder except that we will be entitled to a
deduction when a participant recognizes
compensation income, subject to the deduction
limitations of Section 162(m) of the IRC.
New Plan Benefits
Existing Plan Benefits
Awards under the Second Amended and Restated
Plan are subject to the discretion of the
Administrator. Therefore, it is not possible to
determine the benefits that will be received in the
future by participants in the Second Amended
and Restated Plan.
Pursuant to SEC rules, the following table sets
forth the number of shares subject to awards
granted under the Current Plan from May 19, 2015
(when the Current Plan was initially approved by
stockholders) through the date hereof. These share
numbers do not take into account the effect of
awards that have been cancelled or that have
expired unexercised.
Proxy Statement
83
Name
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
Reza Kasnavi, Senior Vice President, Technology and
Manufacturing
All current executive officers as a group
All employees (excluding current executive officers)
as a group
Number of
Shares Subject
to Stock
Options (#)
Number
of
Shares of
Restricted
Stock (#)
Number of
Shares Subject
to RSUs (#)
Number of
Shares Subject
to PSAs (#)(1)
168,845
5,460
371,384
616,197
52,770
—
144,843
146,915
17,521
1,201
112,097
144,208
14,942
12,677
266,755
1,000
995
8,656
91,261
117,979
106,697
826,282
133,070
1,158,369
871,055
127,258
7,379,813
3,215,121
(1) Represents shares (a) actually released under PSAs that have been earned and vested; (b) scheduled to be released under
PSAs that have not yet vested but for which the performance condition has been satisfied; and (c) subject to PSAs that have not
yet vested and for which the performance condition has not yet been satisfied, assuming the target level of performance.
Equity Compensation Plan Information
• the 2008 Director Long-Term Incentive Plan
As of September 29, 2023, 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, as
amended
• the Non-Qualified Employee Stock Purchase
Plan
• the 2015 Long-Term Incentive Plan
Except for the Non-Qualified Employee Stock
Purchase Plan (the “Non-Qualified ESPP”), each of
the foregoing equity compensation plans was
approved by the Company’s stockholders. A
description of the material features of the
Non-Qualified ESPP is provided below under the
heading “Non-Qualified Employee Stock Purchase
Plan.”
The following table presents information about these plans as of September 29, 2023.
Plan Category
Equity compensation plans
approved by security holders
Equity compensation plans
not approved by security
holders
TOTAL
Number of Securities to be
Issued Upon Exercise of
Outstanding Options,
Warrants, and Rights (#)(a)
Weighted Average
Exercise Price of
Outstanding Options,
Warrants, and Rights ($)(b)
27,123(1)
—
27,123
71.50
—
71.50
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column (a)) (#)(c)
10,296,058(2)
173,128(3)
10,469,186
(1) Excludes 2,167,957 unvested shares under restricted stock and RSU awards and 1,192,371 unvested shares under PSAs,
which number assumes achievement of performance goals under outstanding PSAs at target levels.
Includes 857,399 shares available for future issuance under the 2002 Employee Stock Purchase Plan, 8,909,012 shares
(2)
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Proxy Statement
available for future issuance under the Current Plan, and 529,647 shares available for future issuance under the 2008
Director Long-Term Incentive Plan. No further grants will be made under the Prior Plan.
(3) Represents shares available under the Non-Qualified ESPP.
Non-Qualified Employee Stock Purchase
Plan
The Company maintains the Non-Qualified ESPP
to provide employees of the Company and
participating subsidiaries with an opportunity to
acquire a proprietary interest in the Company
through the purchase, by means of payroll
deductions, of shares of the Company’s common
stock at a discount from the market price of the
common stock at the time of purchase. The
Non-Qualified ESPP is intended for use primarily
by employees of the Company located outside the
United States. Under the plan, eligible employees
may purchase common stock through payroll
deductions of up to 10% of compensation. The
price per share is the lower of 85% of the market
price at the beginning or end of each six-month
offering period.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THIS PROPOSAL 8
VOTE
Proxy Statement
85
PROPOSAL 9:
APPROVAL OF AMENDMENT TO THE COMPANY’S 2002
EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
The Board of Directors believes it is in the best
interests of the Company to encourage stock
ownership by employees of the Company. The
Company’s 2002 Employee Stock Purchase Plan,
as amended (the “ESPP”), affords employees of the
Company the opportunity to purchase shares of
the Company’s common stock at a discount
through regular payroll deductions. The Company
believes the ESPP enhances its ability to seek
and retain the services of highly skilled persons to
serve as employees of the Company, and at the
same time, encourages employee stock
ownership. Under the ESPP, the Company has
currently reserved 9.88 million shares of common
stock to provide eligible employees with
opportunities to purchase shares. As there would
be an insufficient number of shares available for
continuing the ESPP through the end of fiscal year
2025, on February 7, 2024, the Board of Directors
adopted, upon the recommendation of the
Compensation Committee and subject to
stockholder approval, an amendment to the ESPP
that increases the number of shares of common
stock authorized for purchase under the plan from
9.88 million to 11.38 million (the “ESPP
Amendment”).
We are asking stockholders to approve the ESPP
Amendment. Apart from the ESPP Amendment, no
other terms or conditions of the ESPP will change.
With the approval of the ESPP Amendment by
the stockholders, it is the intention of the Company
to have the ESPP continue to qualify as an
“employee stock purchase plan” under Section 423
of the IRC, which may provide certain tax benefits
to employees as described below. As of
January 1, 2024, and without giving effect to the
ESPP Amendment, there were 706,974 shares
available for future purchase under the ESPP.
In addition, if the ESPP Amendment is approved,
the Company intends to continue providing
non-U.S. employees with the opportunity to
purchase shares of the Company’s common stock
at a discount pursuant to Skyworks’ Non-Qualified
Employee Stock Purchase Plan (“NQ ESPP”) by
taking all necessary action to make available an
additional 400,000 shares of common stock under
the NQ ESPP, which action is not subject to
stockholder approval. If the ESPP Amendment is
not approved by the stockholders, the Company
will not be able to continue to offer employees
an opportunity to participate in the ESPP in the
future once the shares that remain available for
issuance thereunder are exhausted. Further, if the
ESPP Amendment is not approved, the Company
will not take any action to increase the number of
shares available under the NQ ESPP and will
discontinue such plan when the remaining shares
available under the NQ ESPP have been
exhausted.
Vote Required to Approve Proposal 9
The proposal to adopt the ESPP Amendment will
be approved by the stockholders if it receives the
affirmative vote of a majority of the shares
present or represented by proxy at the Annual
Meeting and entitled to vote on the proposal. If
you sign and return your proxy card or submit your
proxy via telephone or the Internet, your shares
will be voted (unless you indicate to the contrary)
to approve the ESPP Amendment. Specifically
marking “ABSTAIN” on your proxy card will have
the same impact as a vote that is marked
“AGAINST” the proposal.
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Proxy Statement
Description of the ESPP as Proposed to be Amended
Below is a brief summary of the ESPP, as proposed
to be amended. The full text of the proposed
amendment, together with the ESPP, are attached
as Annexes 2 and 3 to this Proxy Statement,
respectively as filed with the SEC on
March 28, 2024.
The summary of the ESPP set forth below assumes
the approval of the ESPP Amendment and is
qualified in its entirety by reference to the ESPP
and ESPP Amendment, which are attached
Annexes 2 and 3 to this Proxy Statement. As noted
above, other than the change to the ESPP
proposed to be made by the ESPP Amendment,
no other terms or conditions of the ESPP will
change.
Eligibility
All employees of the Company and its
participating subsidiaries who are employed by
the Company at least ten (10) business days prior
to the first day of the applicable offering period
are eligible to participate in the ESPP, except for
(i) any employee whose customary employment is
for less than twenty (20) hours per week or for
less than five (5) months in any calendar year and
(ii) any employee who owns stock representing
five percent (5%) or more of the total combined
voting power or value of all classes of the
Company’s common stock. An employee’s rights
under the ESPP terminate when he or she ceases
to be an employee. As of January 1, 2024,
approximately 2,023 persons were eligible to
receive awards under the ESPP, which number
consists of the approximate total number of the
Company’s employees in the United States,
including six executive officers (who are current
employees) of the Company and 2,017 employees
(excluding executive officers). The Company’s
non-employee directors are not eligible to
participate in the ESPP.
On March 12, 2024, the last reported sale price of
our common stock on the Nasdaq Global Select
Market was $109.32.
Participation
The number of shares that participants may
purchase under the ESPP is discretionary and the
value of the Company’s common stock purchased
by participants under the ESPP will vary based on
the fair market value of the Company’s common
stock on an offering period’s commencement date
or termination date. Accordingly, the number of
shares that will be purchased by our employees
and executive officers in the future are not currently
determinable.
Offering Periods
The Compensation Committee of the Board of
Directors establishes the offering periods;
however, an offering period may not extend for
more than twenty-four (24) months. Subject to the
foregoing, the offering periods will generally
consist of six-month periods commencing on each
of August 1 and February 1 and terminating on
each of January 31 and July 31, respectively.
Purchase Options
On the commencement date of each offering
period, the Company will grant to each participant
an option to purchase on the termination date of
the offering period at the Option Exercise Price (as
defined below), that number of full shares of
common stock equal to the amount of each
participant’s accumulated payroll deductions
made during the offering period, up to a maximum
of 1,000 shares. This maximum may be increased
or decreased as set forth in the ESPP. If the
participant’s accumulated payroll deductions on
the termination date would result in a purchase of
more than the maximum allowed under the
plan, the excess deductions will be refunded to
the participant, without interest.
The Option Exercise Price for each offering
period is the lesser of: (i) eighty-five percent
(85%) of the fair market value (as defined in the
ESPP) of the common stock on the offering
commencement date, or (ii) eighty-five percent
(85%) of the fair market value of the common stock
Proxy Statement
87
on the offering termination date, in either case
rounded up to the next whole cent. If the
participant’s accumulated payroll deductions on
the last day of the offering period would otherwise
enable the participant to purchase common
stock in excess of the limitation prescribed under
Section 423(b)(8) of the IRC, the excess will be
refunded by the Company, without interest.
Option Exercise
Each participant in the ESPP on the termination
date of each offering period will be deemed to
have exercised his or her option on such date and
to have purchased from the Company such
number of full shares of common stock reserved
for the ESPP as his or her accumulated payroll
deductions on such date will pay for at the Option
Exercise Price (so long as such participant
remained employed at the termination date),
subject to the maximums and limitations set forth
in the ESPP.
Stock Subject to the ESPP
After giving effect to the ESPP Amendment, an
aggregate of 11,380,000 shares of common stock
have been authorized for issuance under the
ESPP since its inception. If there are any
unexercised options granted under the ESPP that
expire or terminate or options that cease to be
exercisable, the unpurchased shares subject to
such option will again be available under the ESPP.
If the number of shares of common stock
available for any offering period is insufficient to
satisfy the requirements for that offering period,
the available shares for that offering period
shall be apportioned among participating
employees in proportion to their options.
Initial Eligibility and Participation
Except as may otherwise be established by ESPP
administrators under generally applicable rules, an
eligible employee may enter the ESPP by
enrolling and authorizing payroll deductions not
later than ten (10) business days before the next
commencement date. Unless the participant
files a revised authorization, or withdraws from
the ESPP, his or her participation under the
enrollment on file will continue as long as the
ESPP remains in effect.
A participant may withdraw in full from the ESPP
prior to the termination date, in which event the
Company will refund without interest the entire
balance of such participant’s deductions not
previously used to purchase common stock under
the ESPP. Except as may otherwise be established
by ESPP administrators under generally
applicable rules, withdrawals will be effective only
if delivered not later than ten (10) business days
before the offering period termination date. Upon
termination of the participant’s employment
because of death, the person(s) entitled to receipt
of the common stock and/or cash shall have the
right to elect, either (i) to withdraw, without interest,
all of the payroll deductions credited to the
participant’s account under the ESPP, or (ii) to
exercise the participant’s option for the purchase
of shares of common stock on the next offering
termination date following the date of the
employee’s death.
The Company will accumulate and hold for the
employee’s account the amounts deducted from
his or her pay. No interest will be paid thereon.
Deduction Amounts
An employee may authorize payroll deductions
from 1% to 15% (in whole number percentages
only) of his or her eligible compensation (as
defined in the ESPP). An employee may not make
any additional payments into such account.
Only full shares of common stock may be
purchased. Any balance remaining in an
employee’s account after a purchase will, to the
extent not refunded as set forth above, be carried
forward to the next offering period. Payroll
deductions may not be increased, decreased or
suspended by a participant during an offering
period.
Termination and Amendment
The ESPP may be terminated at any time by the
Board of Directors or, if sooner, when all of the
shares of Common Stock reserved for the
purposes of the ESPP have been purchased.
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Proxy Statement
The Board of Directors may from time to time
adopt amendments to the ESPP. Without approval
of the Company’s stockholders, no amendment
may increase the number of shares issued under
the ESPP, except as provided under the ESPP in
connection with: (i) increases or decreases by
reason of stock split-ups, subdivisions,
reclassifications, stock dividends, changes in par
value and the like, or (ii) a merger or consolidation
of the Company. Further, without approval of the
Company’s stockholders, no amendment may
change the class of employees eligible to receive
options under the ESPP, if such action would be
treated as the adoption of a new plan for purposes
of Section 423(b) of the Code or cause Rule 16b-3
under the Securities Exchange Act of 1934 to
become inapplicable to the ESPP.
Sale of Stock Purchased Under the ESPP
An employee may sell stock purchased under
the ESPP at any time the employee chooses,
subject to compliance with Company trading
policies, any applicable federal or state securities
laws, and subject to certain restrictions imposed
under the ESPP.
Administration and Cost
The Company bears all costs of administering
and carrying out the ESPP, and the ESPP may be
administered by the Compensation Committee, or
such other committee as may be appointed by
the Board of Directors of the Company.
The Company will indemnify each member of the
Board of Directors and the Compensation
Committee to the fullest extent permitted by law
with respect to any claim, loss, damage or expense
(including counsel fees) arising in connection
with their responsibilities under the ESPP.
Application of Funds
The proceeds received by the Company from the
sale of common stock pursuant to options
granted under the ESPP may be used for any
corporate purposes, and the Company is not
obligated to segregate participating employees’
payroll deductions.
Changes in Common Stock
If the Company should subdivide or reclassify the
common stock, or should declare thereon any
dividend payable in shares of such common stock,
or should take any other action of a similar
nature affecting such common stock, then the
number and class of shares of common stock
which may thereafter be optioned (in the
aggregate and to any individual participating
employee) shall be adjusted accordingly. In
addition, in the event of an increase or decrease
in the number of outstanding shares of common
stock through stock splits, reclassifications,
stock dividends, changes in par value and the
like, an appropriate adjustment will be made in
the number of shares and Option Exercise Price
per share for then outstanding options.
Merger or Consolidation
If the Company should merge into or consolidate
with another corporation, the Board of Directors
may, at its election, either (i) terminate the ESPP
and refund without interest the entire balance
of each participant’s deductions, or (ii) entitle each
participant to receive on the offering termination
date upon the exercise of such option for each
share of common stock as to which such option
shall be exercised the securities or property to
which a holder of one share of the common stock
was entitled upon and at the time of such merger
or consolidation. A sale of all or substantially all of
the assets of the Company shall be deemed a
merger or consolidation for the foregoing
purposes.
Federal Income Tax Consequences
The following summarizes certain United States
federal income tax considerations for employees
participating in the ESPP and certain tax effects to
the Company. This summary, however, does not
address every situation that may result in taxation.
For example, it does not discuss foreign, state,
or local taxes, or any of the tax implications arising
from a participant’s death. This summary is
based on the federal tax laws in effect as of the
date of this proxy statement. The ESPP is intended
to qualify as an “employee stock purchase plan”
Proxy Statement
89
as defined in Section 423 of the IRC. This summary
assumes that the ESPP complies with Section 423
of the IRC. Changes to these laws could alter
the tax consequences described below. This
summary is not intended as a substitute for careful
tax planning, and each employee is urged to
consult with and rely on his or her own advisors
with respect to the possible tax consequences
(federal, state, local and foreign) of exercising his
or her rights under the ESPP.
The amounts deducted from an employee’s pay
under the ESPP will be included in the employee’s
compensation subject to United States federal
income tax, and the Company will withhold taxes
on these amounts. Generally, the employee will
not recognize any additional income at the time
options are granted pursuant to the ESPP or at the
time the employee purchases shares under the
ESPP.
If the employee disposes of shares purchased
pursuant to the ESPP within two years after the first
business day of the offering period in which the
employee acquired such shares or within one year
after the termination date of the offering period
in which the employee acquired the shares, the
employee will recognize ordinary compensation
income (i.e., not capital gain income) at the time
of such disposition in an amount equal to the
excess, of the fair market value of the shares on
the day the shares were purchased over the
amount the employee paid for the shares. In
addition, the employee generally will recognize
capital gain or loss in an amount equal to the
difference between the amount realized upon the
sale of the shares and the employee’s tax basis
in the shares (generally, the fair market value of the
shares on the day of purchase). Capital gain or
loss recognized on a disposition of shares will be
long-term capital gain or loss if the employee’s
holding period for the shares exceeds one year.
The holding period for determining whether the
gain or loss realized is short or long term will
not begin until the employee has purchased
shares under the ESPP.
If the employee disposes of shares purchased
pursuant to the ESPP more than two years after the
first business day of the offering period in which
the employee acquired the shares and more than
one year after the termination date of the
offering period in which the employee acquired
the shares, the employee will recognize ordinary
compensation income at the time of such
disposition in an amount equal to the lesser of:
• the excess, if any, of the fair market value of the
shares at the time of disposition over the
amount the employee paid for the shares; or
• 15% of the fair market value of the shares
measured as of the first business day of the
offering period in which the shares were
purchased.
In addition, the employee generally will recognize
long-term capital gain or loss in an amount
equal to the difference between the amount
realized upon the sale of shares and the
employee’s tax basis in the shares.
If the employee disposes of shares purchased
pursuant to the ESPP within two years after the first
business day of the offering period in which
such shares were purchased or within one year
after the termination date of the offering period in
which such shares were purchased, the Company
generally will be entitled to a deduction for
United States federal income tax purposes in an
amount equal to the ordinary compensation
income recognized by the employee as a result of
such disposition. If the employee disposes of
shares purchased pursuant to the ESPP more than
two years after the first business day of the
offering period in which the employee acquired
the shares and more than one year after the
termination date of the offering period in which
the employee acquired the shares, the Company
will not be entitled to any deduction for United
States federal income tax purposes with respect to
the options or the shares issued upon their
exercise. Any deduction by the Company is
subject to the limitations of Section 162(m) of the
IRC.
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Proxy Statement
Plan Benefits
New Plan Benefits
Existing Plan Benefits
Because benefits under the ESPP will depend on
employees’ elections to participate and the fair
market value of the Company’s common stock at
various future dates, it is not possible to determine
the benefits that will be received by executive
officers and other employees if the ESPP is
approved by the stockholders. Non-employee
directors are not eligible to participate in the ESPP.
Only employees of the Company and its
participating subsidiaries are eligible to participate
in the ESPP. Pursuant to SEC rules, the following
table sets forth the number of shares subject to
stock options granted under the ESPP from
September 25, 2002 (when the ESPP was first
adopted by the Board of Directors) through the
date hereof.
Name
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
Reza Kasnavi, Senior Vice President, Technology and Manufacturing
All current executive officers as a group
All employees (excluding current executive officers) as a group
Number of Shares Subject to
Stock Options (#)
13,038
1,829
3,903
20,719
6,475
45,964
9,127,062
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
“FOR” THIS PROPOSAL 9
VOTE
Proxy Statement
91
PROPOSAL 10:
STOCKHOLDER PROPOSAL REGARDING NAMED EXECUTIVE
OFFICER TERMINATION PAYMENTS
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 10 — Shareholder Opportunity
to Vote on Excessive Golden Parachutes
accelerated, or a performance condition waived,
due to termination.
FOR
Shareholder
Rights
Shareholders request that the Board adopt a
policy to seek shareholder approval of senior
managers’ new or renewed pay package that
provides for golden parachute payments with an
estimated value exceeding 2.99 times the sum of
the executive’s base salary plus target short-term
bonus. This proposal only applies to Named
Executive Officers.
Golden parachute payments include cash, equity
or other compensation that is paid out or vests
due to a senior executive’s termination for any
reason. Payments include those provided under
employment agreements, severance plans, and
change-in-control clauses in long-term equity
plans, but not life insurance, pension benefits, or
deferred compensation earned and vested prior
to termination.
“Estimated total value” includes: lump-sum
payments; payments offsetting tax liabilities;
perquisites or benefits not vested under a plan
generally available to management employees;
post-employment consulting fees or office
expense; and equity awards if vesting is
The Board shall retain the option to seek
shareholder approval at an annual meeting after
material terms are agreed upon.
This proposal is relevant even if there are current
golden parachute limits. A limit on golden
parachutes is like a speed limit. A speed limit by
itself does not guarantee that the speed limit will
never be exceeded. Like this proposal the rules
associated with a speed limit provide
consequences if the limit is exceeded. With this
proposal the consequences are a non-binding
shareholder vote is required for unreasonably high
golden parachutes.
This proposal places no limit on long-term equity
pay or any other type pay. This proposal thus
has no impact on the ability to attract executive
talent or discourage the use of long-term equity
pay because it places no limit on golden
parachutes. It simply requires that extra large
golden parachutes be subject to a non-binding
shareholder vote at a shareholder meeting already
scheduled for other matters.
This proposal is relevant because the annual say
on executive pay vote does not have a separate
section for approving or rejecting golden
parachutes.
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Proxy Statement
This proposal is an additional step in improving
Skyworks Solutions corporate governance which is
ranked a dismal 9 — with 10 being worst.
Skyworks Solutions shareholders took a 2023
step toward improving corporate governance in
giving 4-to-l support to the 2023 shareholder
proposal calling for a simple majority voting
standard — as opposed to 80% voting
standards — absurd when less than 80% of SWKS
shares typically vote.
Please vote yes:
Shareholder Opportunity to Vote on
Excessive Golden Parachutes —
Proposal 10
Proxy Statement
93
Statement of Opposition by the Board of Directors
The Board recommends a vote AGAINST the
proposal for the following reasons:
The Board and Compensation Committee have
carefully reviewed and considered the stockholder
proposal and have concluded that the Company’s
current agreements with named executive
officers already place reasonable limits on
payments in the event of a change in control or
termination of employment. Moreover, the
Company has adopted a policy providing for
stockholder ratification of new agreements or
arrangements providing for cash severance
benefits payable to named executive officers that
exceed 2.99 times the sum of the named
executive officer’s base salary and target bonus
(as each such term is defined in the policy). For
these and the other reasons discussed below, the
proposal is neither necessary nor in the best
interests of the Company’s stockholders.
The Company’s existing change in control /
severance agreements with its named executive
officers contain reasonable and appropriate
limits consistent with market practice, and the
Company has adopted a policy regarding
stockholder ratification of new agreements or
arrangements providing for certain cash
severance payments.
The existing change in control / severance
agreements with our named executive officers are
designed to provide those executives with
reasonable compensation if their employment is
terminated for qualifying reasons. These
agreements already limit cash severance
payments in the event of a qualifying termination
in connection with a change in control to an
amount equal to 2.5 times the sum of his base
salary plus CIC Bonus Amount (as defined above)
in the case of our Chief Executive Officer and
1.5 times the sum of the executive’s base salary
plus CIC Bonus Amount (as defined above) in the
case of our other named executive officers.
In addition, our current agreements limit cash
severance payments in connection with certain
qualifying terminations other than in connection
with a change in control to an amount equal to 2.0
times his base salary plus Bonus Amount (as
defined above) in the case of our Chief Executive
Officer and 12 months base salary plus any
short-term cash incentive award then due in the
case of our other named executive officers. Please
refer to the above “Potential Payments Upon
Termination or Change in Control” for additional
information.
Further, we have adopted a cash severance policy
providing that the Company will not enter into
any new employment, severance or separation
agreement with our named executive officers, or
establish any new severance plan or policy
covering any named executive officer, in each
case that provides for cash severance benefits
exceeding 2.99 times the sum of the named
executive officer’s base salary and target bonus,
without seeking stockholder ratification of
such agreement, plan or policy.
Because our existing change in control / severance
agreements with our named executive officers
already appropriately limit cash severance, and
our cash severance policy provides for a
shareholder ratification vote for new agreements
that would exceed the above-referenced 2.99
threshold, the proposal is unnecessary.
Our stockholders have an opportunity to
express their approval of our compensation
program, which includes termination
arrangements, annually.
We already give our stockholders the opportunity
to voice their opinions on executive compensation
through our annual “say-on-pay” vote. That
annual advisory vote relates to matters disclosed
pursuant to the compensation disclosure rules of
the SEC, which include disclosures regarding
termination arrangements and potential related
payments. In addition, in the event of a merger,
acquisition or other similar event, stockholders
would have an opportunity to express their views
on any compensation to our named executive
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Proxy Statement
officers in connection with the transaction. An
additional stockholder vote on these payments is
therefore unnecessary.
By introducing additional requirements on the
Compensation Committee’s ability to formulate
appropriate compensation arrangements for
key executives, particularly with regard to the
use of long-term equity, the proposal could
impair the Company’s ability to attract and
retain executive talent, placing us at a
competitive disadvantage.
We believe our Board and our Compensation
Committee — comprised entirely of independent
directors and advised by an independent
compensation consultant — are in the best
position to design and implement executive
compensation packages that align the interests of
our named executive officers with those of our
stockholders. The proposal would unduly burden
our Compensation Committee’s ability to
implement executive compensation packages
that are appropriately balanced with current
market practices and the financial, operational,
and other business goals of the Company.
In particular, given the proposal includes the
value of outstanding equity awards that accelerate
upon a termination, we believe it could have an
adverse impact on our ability to recruit and retain
executive talent, as it would put us at a
competitive disadvantage against other
companies who do not face similar requirements.
For example, a potential key hire may decide to
accept another position rather than being subject
to the uncertainty of having his or her potential
change in control / severance arrangements
submitted for stockholder approval (even where
such vote is advisory only). Additionally, if
implemented, the proposal could significantly
affect our ability to retain key employees, including
our named executive officers, during a potential
change-in-control transaction as the stockholder
approval requirement could cause delays and
uncertainty regarding payments under previously
granted equity awards.
Given the Company’s cash severance policy
requiring stockholder ratification of any new
severance agreement, plan or policy covering a
named executive officer for cash severance
benefits exceeding 2.99 times the sum of such
named executive officer’s base salary and target
bonus; the Company’s current agreements
with executive officers already placing reasonable
limits on payments in the event of a change in
control or termination of employment; and the
need for a compensation program that attracts
and retains talent, 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” THIS STOCKHOLDER PROPOSAL 10
VOTE
Proxy Statement
95
PROPOSAL 11:
STOCKHOLDER PROPOSAL REGARDING ADOPTION OF
GREENHOUSE GAS EMISSIONS REDUCTION TARGETS
In accordance with SEC rules, we have set forth
below a stockholder proposal from Green Century
Funds, 114 State Street, Boston, MA 02109.
Representatives from Green Century Funds have
notified us that the entity is the beneficial owner of
at least $25,000 worth of shares of the Company’s
common stock and that they intend 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, which appears
below exactly as submitted.
Ambitious Emissions Reduction Targets
Whereas: Climate change is creating systemic risks
to the economy, and immediate, sharp emissions
reductions are required.(1) Publicly-traded
corporations both contribute emissions that
augment climate change and are subject to
multiple risks created by climate change. Lack of
comprehensive efforts to curtail emissions
threatens investor value, particularly for diversified
holders, for whom climate change poses an
undiversifiable and unhedgeable risk.(2)
More than 6,500 companies, representing a
broad range of industries, have set or committed
to set science-based greenhouse gas reduction
targets, covering their Scopes 1 — 3 emissions and
aligned with a 1.5 degrees Celsius scenario, with
the Science Based Targets initiative (SBTi). SBTi
provides third-party validation of corporate
targets.
By contrast, Skyworks doesn’t track or disclose its
value chain (Scope 3) emissions and hasn’t set
comparable targets nor sought third party
validation of existing targets. The Company’s
current target is a 30% reduction of emissions by
2030. However, its target is limited to operational
(Scope 1 and 2) emissions and is not aligned
with a 1.5 degrees Celsius scenario.(3)
Meanwhile, peers, Analog Devices, NXP
Semiconductors, Qualcomm, and Murata
Manufacturing, have set or committed to set
near-term science-based 1.5 degrees Celsius-
aligned targets with SBTi, inclusive of full value
chain emissions. Moreover, Analog devices
committed to set and Qualcomm has set 1.5
degrees Celsius-aligned net-zero by 2050 and
2040 targets, respectively.
Skyworks’ largest customer, Apple, launched an
initiative in 2020 to decarbonize supply chain
emissions associated with Apple product
manufacturing and announced in September 2023
that 300 manufacturers had committed to
sourcing 100% clean energy for producing Apple
products by 2030.(4)
Electricity consumption represents the majority of
Skyworks’ operational emissions, and its new
commitment to Apple’s Supplier Clean Energy
Program, could accelerate renewable energy
adoption while the Company works to expand
renewable energy access for its factories in Mexico,
Japan, and Singapore.
By adopting ambitious targets and enhancing
value chain disclosures, Skyworks could better
align with investor expectations, further prepare
(1) https://report.ipcc.ch/ar6wg3/pdf/IPCC_AR6_WGIII_FinalDraft_FullReport.pdf
(2) https://www.unepfi.org/fileadmin/documents/universal_ownership_full.pdf. Pg4.
(3) https://www.skyworksinc.com/-/media/SkyWorks/Documents/Brochures/SustainabilityReport2022.pdf. Pg27.
(4) https://www.apple.com/newsroom/2023/09/apple-advances-supplier-clean-energy-commitments/
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Proxy Statement
the Company to succeed in a low-carbon
economy, and enhance its reputation.
Taking into consideration approaches used by
advisory groups like SBTi;
Resolved: Shareholders request that Skyworks
adopt independently verified short-, medium- and
long-term science-based greenhouse gas
emissions reduction targets, inclusive of emissions
from its full value chain, in order to achieve net-
zero emissions by 2050 in line with the Paris
Agreement’s goal of limiting global temperature
rise to 1.5 degrees Celsius.
• Developing a transition plan that shows how
the Company plans to meet its goals, taking into
consideration criteria used by advisory groups
such as the Task Force for Climate Related
Financial Disclosures
• Consideration of supporting targets for
renewable energy, supply chain management,
reduction of fluorinated gases, and other
measures deemed appropriate by management.
Proxy Statement
97
Statement of Opposition by the Board of Directors
The Board has carefully reviewed and considered
the stockholder’s proposal and has concluded
that it is unnecessary and not in the best interests
of the Company’s stockholders. The Board
recommends a vote AGAINST the proposal.
While Skyworks is exploring the steps to
identify and determine our Scope 3 CO2e
emissions, the Board believes the actions
requested by this proposal are premature and
not the best use of Company resources.
Skyworks takes the issue of environmental
sustainability seriously and is proud of the
progress that it has made on its sustainable
business practices, including with respect
to greenhouse gas emissions disclosure and
reduction.
Skyworks is already focused on and committed to
greenhouse gas emissions management and
reduction, which the Company has demonstrated
through setting and continuing to set thoughtful
and meaningful targets and transparently
communicating about its greenhouse gas
emissions management efforts, targets, and
continued progress.
We have disclosed our Scope 1 and Scope 2
CO2e emissions annually since our 2019
Sustainability Report. In 2021, we publicly
communicated our long-term target of reducing
absolute Scope 1 and Scope 2 carbon dioxide
equivalent (CO2e) emissions from our major
manufacturing locations by 30% by 2030 (from a
baseline year of 2018). Skyworks plans to achieve
this Scope 1 and Scope 2 CO2e emissions
reduction target by sourcing renewable energy.
Further, as highlighted in our 2022 Sustainability
Report, we have progressed our initiatives in this
area by having our Scope 1 and Scope 2 CO2e
emissions data verified by Cameron-Cole, an
independent environmental services firm.
The processes and methodologies for calculating
Scope 3 CO2e emissions (and validating targets
in respect thereof) are varied and continue to
evolve.
Like many of our peers, we await the finalization
and effectiveness of the SEC’s new climate-related
disclosure requirements and intend to comply
with applicable disclosure requirements under
California’s Climate Corporate Data Accountability
Act and Climate Related Financial Risk Act. To
avoid confusion due to varying methodologies,
assumptions, and estimates for calculating
and disclosing Scope 3 emissions, and to utilize
our resources most efficiently, we believe that it
would be prudent to see if and how the SEC will
mandate disclosure of Scope 3 emissions and
what regulations the California Air Resources
Board issues regarding the reporting of Scope 3
emissions.
Implementing the reporting requested by the
proposal would divert time, effort and resources
from our current and planned initiatives and
possibly deviate from the final regulatory reporting
requirements, thereby limiting our ability to
target our efforts on areas that will provide the
most meaningful impact in mitigating climate
change and the most value to our stockholders.
Thus, the Board believes that focusing on the SEC’s
and California’s ultimate disclosure requirements
would be more beneficial to our stockholders.
Overall, our dedicated efforts and conscientious
approach are having an impact. In 2023, we were
able to achieve year-over-year reductions of
total gross CO2e emissions from Scope 1 and
Scope 2 of 22% and 23%, respectively. In addition,
we are proud that our largest customer has
publicly named us as a committed partner under
its Supplier Clean Energy Program.
Skyworks maintains strong sustainability
oversight and has received positive stockholder
feedback on sustainability-related matters.
Beyond greenhouse gas emissions reduction, we
are committed to sustainable business practices
more broadly. We have established a Sustainability
Council, consisting of a cross-functional team of
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Proxy Statement
employees from throughout the Skyworks
organization, who are responsible for our
day-to-day sustainability initiatives.
With regard to climate change, our Sustainability
Council leverages expertise from professionals
across our operations, environment, health and
safety, legal, human resources, sourcing and
supply chain organizations to identify risks,
establish improvement initiatives for CO2e
emissions, water recycling and other sustainability
measures, coordinate renewable energy sourcing
efforts, track our progress, and drive
improvements. Progress toward various
sustainability-related business objectives is
monitored monthly at the business level using
detailed performance scorecards, is reviewed
quarterly with the senior vice president of
technology and manufacturing and other senior
executives, and is reported to the Nominating and
Corporate Governance Committee or full Board
of Directors on a periodic basis.
As part of our stockholder outreach efforts, we
have discussed our sustainability program with
many of our largest stockholders, including the
steps we are taking to reduce our greenhouse gas
emissions and to position us to set meaningful
greenhouse gas emissions targets. These
engagement efforts have allowed us to better
understand our stockholders’ priorities and
perspectives with respect to these initiatives.
Based on these engagement efforts, we believe
that our stockholders recognize our progress and
generally support our deliberate and thoughtful
approach to these matters. We also have met with
the proponent to hear its perspective and share
our progress in these areas.
Given Skyworks’ existing goals, initiatives and
disclosures, as well as the evolving Scope 3 CO2e
emissions landscape, the Board believes the
proposal is not in the best interests of the
Company’s stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
“AGAINST” THIS STOCKHOLDER PROPOSAL 11
VOTE
Proxy Statement
99
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, 2024, 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, 2024; (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, 2024, there were
160,444,374 shares of the Company’s common stock 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, 2024, 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
Liam K. Griffin
Eric J. Guerin
Reza Kasnavi
Christine King
Suzanne E. McBride
David P. McGlade
Robert A. Schriesheim
Kris Sennesael
Robert J. Terry
Maryann Turcke
All current directors and executive officers as a group (14 persons)
Number of Shares
Beneficially Owned(2)
Percent of Class
18,656,173(3)
14,750,420(4)
11.63%
9.19%
7,645
51,855
48,185(5)
142,294(5)
2,794
20,330(5)
20,979
2,799
42,916
84,236
100,584
17,134(5)
693
559,971(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.
(2) 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, 2024, as follows: Mr. Batey — 2,078 shares
under Unvested RSUs; Mr. Beebe — 2,078 shares under Unvested RSUs; Mr. Bori — 38,028 shares under Unvested RSUs and
13,230 shares under Unvested PSAs; Mr. Griffin — 130,206 shares under Unvested RSUs and 43,988 shares under Unvested
100
Proxy Statement
PSAs; Mr. Guerin — 2,524 shares under Unvested RSUs; Mr. Kasnavi — 38,306 shares under Unvested RSUs and 13,230
shares under Unvested PSAs; Ms. King — 2,078 shares under Unvested RSUs; Ms. McBride — 2,527 shares under Unvested
RSUs; Mr. McGlade — 2,078 shares under Unvested RSUs; Mr. Schriesheim — 2,078 shares under Unvested RSUs;
Mr. Sennesael — 36,912 shares under Unvested RSUs and 12,520 shares under Unvested PSAs; Mr. Terry — 31,558 shares
under Unvested RSUs and 10,896 shares under Unvested PSAs; Ms. Turcke — 3,462 shares under Unvested RSUs; current
directors and executive officers as a group (14 persons) — 313,901 shares under Unvested RSUs and 100,632 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 203,684 shares, sole dispositive power with respect to 17,980,820 shares
and shared dispositive power with respect to 675,353 shares. With respect to the information relating to Vanguard, the
Company has relied on information disclosed by Vanguard on a Schedule 13G/A filed with the SEC on February 13, 2024. 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 13,506,111 shares and sole dispositive power with respect to 14,750,420 shares which are
held by the following of its subsidiaries: BlackRock Life Limited, BlackRock International 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 (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 disclosed by BlackRock on a Schedule 13G filed with the SEC on January 24, 2024. The address
of BlackRock is 50 Hudson Yards, New York, NY 10001.
Includes shares held in the Company’s 401(k) Savings and Retirement Plan as of February 29, 2024.
(5)
Proxy Statement
101
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 Tuesday,
May 14, 2024, 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/SWKS2024.
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 nine
nominees named in this Proxy Statement to
our Board of Directors to serve until the
2025 Annual Meeting of Stockholders.
• Proposal 2: The ratification of the selection
of KPMG LLP as our independent
registered public accounting firm for fiscal
year 2024.
• 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: The approval of the Company’s
Second Amended and Restated 2015
Long-Term Incentive Plan.
• Proposal 9: The approval of an amendment
to the Company’s 2002 Employee Stock
Purchase Plan, as amended.
• Proposal 10: A non-binding stockholder
proposal regarding Named Executive
Officer Termination Payments, if properly
presented at the Annual Meeting.
• Proposal 11: A non-binding stockholder
proposal regarding adoption of greenhouse
gas emissions reductions targets, 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 2023,
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 28, 2024.
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 20, 2024 (the “Record
Date”), are entitled to notice of and to vote at
the Annual Meeting. As of the Record Date,
there were 160,445,374 shares of Skyworks’
common stock issued and outstanding.
102
Proxy Statement
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.
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 Retirement
Plan?
If you are a participant in the Skyworks 401(k)
Savings and Retirement 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.
Proxy Statement
103
Q. How do I virtually attend the Annual
Meeting?
represented by the proxy will be voted in
accordance with the choices specified.
You are invited to attend the Annual Meeting
online by visiting
www.virtualshareholdermeeting.com/SWKS2024,
where you will be able to listen to the
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/SWKS2024.
Online check-in will begin at 10:50 a.m.
Pacific Daylight Time on May 14, 2024, 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 10:50 a.m.
Pacific Daylight Time on May 14, 2024. 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/SWKS2024.
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
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 or,
if no recommendation is given, in their own
discretion.
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 9,
2024, 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)
104
Proxy Statement
but does not indicate a vote on a particular
proposal because the broker (or other
nominee) does not have authority to vote on
that proposal and has not received voting
instructions from you. “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; Approval of Second
Amended and Restated 2015 Long-Term
Incentive Plan; Approval of Amendment to
2002 Employee Stock Purchase Plan, as
Amended; and Stockholder Proposals. 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
Proposals 3 and 8 — 11. Proposals 3 and
8 — 11 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 — 11. Votes that
are marked “ABSTAIN” are counted as
present and entitled to vote with respect to
Proposals 3 and 8 — 11 and will have the same
impact as a vote that is marked “AGAINST”
for purposes of Proposals 3 and 8 — 11.
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.
Proxy Statement
105
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.
Q. How does the Board recommend that I
vote?
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.
Q. Where can I find the voting results of our
The Board recommends that you vote:
Annual Meeting?
FOR the election of each of the nine director
nominees (Proposal 1).
FOR the ratification of the selection of KPMG
LLP as our independent registered public
accounting firm for fiscal year 2024
(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).
FOR the approval of the Company’s Second
Amended and Restated 2015 Long-Term
Incentive Plan (Proposal 8).
FOR the approval of the amendment to the
2002 Employee Stock Purchase Plan, as
amended (Proposal 9).
AGAINST the approval, on a non-binding
basis, of a stockholder proposal regarding
named executive officer termination payments
(Proposal 10).
AGAINST the approval, on a non-binding
basis, of a stockholder proposal regarding
adoption of greenhouse gas emissions
reductions targets (Proposal 11).
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
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 entitled to
vote at the Annual Meeting 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
106
Proxy Statement
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. How do I submit a question at the Annual
Meeting?
If you wish to submit a question, beginning at
10:50 a.m. Pacific Daylight Time on May 14,
2024, you may log into the virtual meeting
platform at
www.virtualshareholdermeeting.com/SWKS2024,
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/SWKS2024.
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 2029 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) 508-0973. 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
107
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 at 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, plus reasonable out-of-pocket
expenses. This increase in expense from the
prior year results from the Company’s decision to
solicit stockholder votes for the Annual Meeting
more actively than it has, 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 list of stockholders of record as of March 20,
2024, will be available for inspection during
ordinary business hours at our executive offices in
Irvine, CA, from May 3, 2024, to May 13, 2024.
A copy of our 2023 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 2023, 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
108
Proxy Statement
Stockholder Proposals
Proposals to be considered for inclusion in the
proxy materials for the Company’s 2025 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 28, 2024. The submission of a
stockholder proposal does not guarantee that it
will be included in the proxy materials for the
Company’s 2025 Annual Meeting.
According to the applicable provisions of our
By-laws, if a stockholder wishes to present a
proposal at our 2025 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 14, 2025,
and no later than the close of business on
February 13, 2025. In the event that the 2025
Annual Meeting is advanced by more than
thirty (30) days, or delayed (other than as a result
of adjournment) by more than sixty (60) days, from
the first anniversary of the Company’s 2024
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 2025 Annual
Meeting and no later than the later of 90 days prior
to the 2025 Annual Meeting or the 10th day
following the day on which the public
announcement of the date of the 2025 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.
See “Stockholder Nominees For Directors”
section of this Proxy Statement for additional
information regarding nominees for election to
the Board proposed by stockholders.
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
109
Appendix A:
UNAUDITED RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURES
(in millions)
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 %
(in millions)
GAAP net income per share, diluted
Share-based compensation expense(a)
Acquisition-related expenses (benefit)
Amortization of acquisition-related intangibles
Settlements, gains, losses, and impairments
Restructuring and other charges
Tax adjustments
Non-GAAP net income per share, diluted
Twelve Months Ended
Sep. 29, 2023
$1,125
185
11
202
65
14
$1,602
23.6%
33.6%
Twelve Months Ended
Sep. 29, 2023
$ 6.13
1.15
0.07
1.26
0.42
0.08
(0.59)
$ 8.52
(a)
The following table summarizes the expense recognized in accordance with ASC 718 — Compensation, Stock Compensation
(in millions):
(in millions)
Cost of goods sold
Research and development
Selling, general, and administrative
Total share-based compensation
Twelve Months Ended
Sep. 29, 2023
$ 21
95
69
$185
(in millions)
Sep. 29, 2023
Sep. 30, 2022
Sep. 28, 2018
Sep. 27, 2013
GAAP net cash provided by operating activities
Capital expenditures
Non-GAAP free cash flow
$1,856
(210)
$1,646
$1,425
(489)
$ 936
$1,261
(422)
$ 839
$ 500
(124)
$ 376
Twelve Months Ended
110
Appendix A
Discussion Regarding the Use of Non-GAAP Financial Measures
Our annual report and this proxy statement
contains 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, (ii) non-
GAAP diluted earnings per share, and (iii) non-
GAAP free cash flow. As set forth in the “Unaudited
Reconciliations of Non-GAAP Financial Measures”
tables found 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, non-GAAP diluted
earnings per share, and non-GAAP free cash
flow 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 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
also 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 further believe that providing non-
GAAP free cash flow provides insight into our
liquidity, our cash-generating capability, and the
amount of cash potentially available to return to
stockholders. 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 (benefit),
amortization of acquisition-related intangibles,
settlements, gains, losses, and impairments,
restructuring and other charges, and certain tax
items. We calculate non-GAAP free cash flow by
deducting capital expenditures from GAAP net
cash provided by operating activities.
We exclude certain 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:
Appendix A
111
Share-Based Compensation Expense — 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 (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 (Benefit) and
Amortization of Acquisition-Related Intangibles —
including such items as, when applicable, fair
value adjustments to contingent consideration,
fair value charges incurred upon the sale of
acquired inventory, acquisition-related expenses,
and amortization of acquired intangible assets
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.
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.
Restructuring and Other 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.
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.
112
Appendix A
Appendix B:
PROVISIONS OF CHARTER SUBJECT TO POTENTIAL
AMENDMENT
The following provisions of our Charter are those implicated by Proposals 4 – 7. In this Appendix B,
deletions and additions that would be effected by the proposed amendments are indicated by
strikethroughs and underlining, respectively:
SEVENTH:
1. The business and affairs of the Corporation shall be managed by or under the direction of the 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.
3. Vacancies resulting from any increase in the authorized number of directors or any vacancies in the
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
Appendix B
113
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% 6 in the case of Article Seventh ofand 7 in the case of Article Thirteenth; and
(ii) 90% 8 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.
(6)
(7)
(8)
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%.
114
Appendix B
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
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.
5. This Article Eleventh may not be amended, revised or revoked, in whole or in part, except by 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 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:
Appendix B
115
A.
“Announcement Date” shall mean the date of first public announcement of the proposal of a
Business Combination. 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
116
Appendix B
respect to a share of such stock during the 30-day period preceding the date in question on the
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
Appendix B
117
for shares of such class of Voting Stock within the two-year period ending on and including
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
(c)
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
118
Appendix B
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
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.
Appendix B
119
FISCAL YEAR 2023 ANNUAL REPORT AND
CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
Cautionary Statement . . . . . . . . . . . . 123
Introduction . . . . . . . . . . . . . . . . . . . . . 125
Industry Background . . . . . . . . . . . . . 126
Business Overview . . . . . . . . . . . . . . . 127
Management’s Discussion and
Analysis of Financial Condition
and Results of Operations . . . . . . . . 130
Quantitative and Qualitative
Disclosures About Market Risk . . . . 138
Consolidated Financial
Statements
Consolidated Statements of Operations . . 140
Consolidated Statements of
Comprehensive Income . . . . . . . . . . . . . . 141
Consolidated Balance Sheets . . . . . . . . . . 142
Consolidated Statements of Cash Flows . . 143
Consolidated Statements of Stockholders’
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Notes to Consolidated Financial
Statements . . . . . . . . . . . . . . . . . . . . . . 145
Report of Independent Registered
Public Accounting Firm . . . . . . . . . . 171
Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure . . . . . . . . . 173
Controls and Procedures . . . . . . . . . 173
Market for Registrant’s Common
Equity, Related Stockholder
Matters and Issuer Purchases of
Equity Securities . . . . . . . . . . . . . . . . . 175
Comparative Stock Performance
Graph . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
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 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
• AI (Artificial Intelligence): the theory and development of computer systems able to perform tasks
that normally require human intelligence, such as visual perception, speech recognition, decision-
making, and translation between languages
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123
• ASoC (Analog System on Chip): combines the required electronic circuits of various computer
components into a single, integrated chip
• 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
• LTE (Long-Term Evolution): 4th generation (“4G”) radio technologies designed to increase the
capacity and speed of mobile telephone networks
• 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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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 and mixed-
signal 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, defense, entertainment and gaming, industrial, medical, smartphone, tablet, and
wearable markets.
Over the past two decades, Skyworks has made critical investments to power this connectivity
transformation, addressing key network technologies from cellular to advanced Wi-Fi®, enhanced GPS,
and Bluetooth®, among others. Capitalizing on both organic growth and strategic acquisitions, we are
targeting high-growth verticals, while at the same time, seeking to diversify our revenue and customer
set.
Targeted investments in next-generation technology and solutions, exceptional technical talent, and world-
class fabrication capabilities have accelerated 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.
Our key customers include Amazon, Apple Inc. (“Apple”), Arcadyan, Arris, Bose, Ciena, Cisco, DJI, Ericsson,
Fibocom, Garmin, Gemalto (a Thales company), General Electric, Google, Honeywell, Itron, Lenovo,
LG Electronics, Microsoft, Motorola, NETGEAR, Nokia, Northrop Grumman, OPPO, Rockwell Collins,
Sagemcom, Samsung, Schneider Electric, Sierra Wireless, Sonos, Sony, Technicolor, Telit, Tesla, TP-Link,
VIVO, Xiaomi, and ZTE. Our competitors include Analog Devices, Broadcom, Cirrus Logic, Murata
Manufacturing, NXP Semiconductors, Qorvo, Qualcomm, and Texas Instruments.
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 file such
material with, or furnish it 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.
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125
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. The advancement of 5G
adoption, IoT, connectivity for everyone, automotive electrification and safety, as well as augmented
reality and virtual reality technology, all demand 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.
We see a continued expansion in data consumption, dependent on seamless, reliable, and ubiquitous
wireless connectivity. A few statistics illustrate this point. According to the 2023 Ericsson Mobility Report,
global mobile data is expected to double every three years, driven by new users, innovative services,
and the convergence of AI and 5G technology. Machine-to-machine connections, the fastest-growing IoT
category, is expected to soon surpass 15 billion devices. By 2030, we anticipate 650 million connected
cars worldwide, each consuming 25 times the data seen in today’s smartphones.
Skyworks helps facilitate these opportunities with highly customized solutions that support a broad set of
wireless systems and protocols including cellular, 5G, Wi-Fi®, GPS, Bluetooth®, Accutime™, HD-Radio™,
LoRa®, Thread®, and Zigbee®. Additionally, Wi-Fi® 7, the next generation of Wi-Fi® technology,
complements 5G by providing high-speed wireless connectivity in local environments. These faster data
rates and improved efficiency cater to the growing number of devices reliant on wireless networks.
We believe AI can be a catalyst for more efficient wireless communications. From endpoint devices to
data centers, generative AI applications will drive the need for higher speed and higher bandwidth
Ethernet networks. We expect this will help increase the demand for our precision timing solutions.
Finally, with the rapid transition towards electrification and advanced safety in vehicles, we are focused
on high growth segments and content opportunities, including (i) power isolation chips for on-board
chargers, powertrain, and for battery management systems in electric vehicles, (ii) connectivity, with
telematics and other solutions being enabled by 4G/5G cellular engines, Wi-Fi®, Bluetooth®, Ultra-wide
band, Ethernet, and GPS, and (iii) in-vehicle infotainment systems, driven by digital radio coprocessors,
and solutions supporting advanced driver-assistance systems and autonomous driving.
Solving Connectivity Challenges
Highly integrated semiconductor solutions are pivotal in deploying next-generation standards, resolving
analog, mixed-signal, and RF complexities that challenge existing hardware and network infrastructure.
Addressing these design challenges requires diverse competencies including signal transmission,
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 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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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 poised to help our customers 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. The forthcoming releases of 5G technologies
offer significant upgrades for smartphones and IoT devices. These advancements will deliver more
bandwidth, faster speeds, and enable applications like virtual reality, augmented reality, live video
streaming, and seamless IoT connectivity. Crucially, they aim to bring us closer to achieving reliable low
latency, ideal for massive machine communications, and introduces non-terrestrial networks that enable
satellite connectivity for emergency applications.
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
4,900 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 leading original equipment
manufacturers (“OEMs”), smartphone providers, and baseband reference design partners in the analog
and mixed-signal semiconductor industry. Our customers value the scale of our global supply chain, our
innovative technology, our ability to curate and deliver unique solutions, 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 the reach of our business by expanding our addressable markets and broadening
our product portfolio to serve 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 leading 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, 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 more than 8,000 customers and 8,500 unique products.
Delivering Operational Excellence
We vertically integrate our supply chain where we can differentiate ourselves with highly specialized
internal manufacturing capabilities or enter into alliances and strategic relationships for leading-edge
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127
technologies. This hybrid manufacturing model allows us to better balance our manufacturing capacity
with the demand of the marketplace, resulting in a 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.
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.
Generating Superior Operating Results and Stockholder 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 stockholders.
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
• 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
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• 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
• 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
• Power over Ethernet: enables both data and power to be sent over standard ethernet cable.
• Power Isolators: digital, analog isolators, and isolated gate drivers used in industrial control, solar
inverters, hybrid/electric automotive systems and charging stations
• ProSLIC® family of subscriber line interface circuits: provides complete analog telephone interfaces
for premise equipment and enterprise
• Receivers: electronic devices that change a radio signal from a transmitter into useful information
(including broadcast receivers)
• System In Package: complete system in a package, including modem, RF front-end, filtering,
matching, timing generation — typically, fully certified by regulatory bodies, industry bodies and
multi-service operators
• 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: clock generators, oscillators, jitter attenuators, and buffers used in optical
networking, data center, wireless base stations, industrial, and automotive 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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129
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 and mixed-signal 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, defense, entertainment and gaming,
industrial, medical, smartphone, tablet, and wearable markets.
Impact of COVID-19
The COVID-19 pandemic has affected 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 uncertain and could still result in significant disruptions to our business
operations, as well as negative impacts to our financial condition.
RESULTS OF OPERATIONS
Fiscal Years Ended September 29, 2023, September 30, 2022, and October 1,
2021.
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 September 30, 2022, filed
with the SEC on November 23, 2022, as amended by Amendment No. 1 to such Annual Report on
Form 10-K, filed with the SEC on January 27, 2023 (the “2022 10-K”), for Management’s Discussions and
Analysis of Financial Condition and Results of Operations for the fiscal year ended October 1, 2021.
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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
September 29,
2023
100.0%
Fiscal Years Ended
September 30,
2022
100.0%
October 1,
2021
100.0%
55.8
44.2
12.7
6.6
0.7
0.6
20.6
23.6
(1.3)
0.4
22.6
2.0
52.5
47.5
11.3
6.0
1.8
0.6
19.7
27.8
(0.9)
—
26.9
3.7
50.8
49.2
10.3
6.3
0.7
0.2
17.6
31.6
(0.3)
—
31.3
2.0
20.6%
23.2%
29.3%
During the fiscal year ended September 29, 2023, the following key factors contributed to our overall
results of operations, financial position, and cash flows:
• Net revenue decreased 13.0% to $4,772.4 million in fiscal 2023, as compared to $5,485.5 million
in fiscal 2022, driven primarily by a decrease in demand for our mobile products from smartphone
customers in the Android ecosystem and for our connectivity solutions in consumer and enterprise
markets.
• Our ending cash, cash equivalents, and marketable securities balance increased 26% to
$738.5 million in fiscal 2023, as compared to $586.8 million in fiscal 2022. The increase in cash,
cash equivalents, and marketable securities during fiscal 2023 was primarily due to cash generated
from operations of $1,856.4 million, partially offset by repayments of debt of $900.0 million,
dividend payments of $405.2 million, and capital expenditures of $210.3 million.
Net Revenue
(dollars in millions)
Net revenue
September 29,
2023
$4,772.4
Change
(13.0)%
Fiscal Years Ended
September 30,
2022
Change
October 1,
2021
$5,485.5
7.4%
$5,109.1
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
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.
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131
The decrease in net revenue in fiscal 2023, as compared to fiscal 2022, was driven primarily by a decrease
in demand for our mobile products from smartphone customers in the Android ecosystem and for our
connectivity solutions in consumer and enterprise markets.
For information regarding net revenue by geographic region and customer concentration, see Note 14
of this Annual Report.
Gross Profit
(dollars in millions)
Gross profit
% of net revenue
Fiscal Years Ended
September 29,
2023
Change
September 30,
2022
Change
October 1,
2021
$2,107.3
(19.1)%
$2,604.3
3.7%
$2,512.4
44.2%
47.5%
49.2%
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, share-based compensation, and
amortization of acquisition intangibles, including inventory step-up expense) associated with product
manufacturing. Erosion of average selling prices of established products is typical of the semiconductor
industry. Consistent with trends in the industry, we anticipate that average selling prices for our established
products will continue to decline over time. As part of our normal course of business, we intend to
improve gross profit with efforts to increase unit volumes, reduce material costs, improve manufacturing
efficiencies, lower manufacturing costs of existing products, and by introducing new and higher
value-added products.
The decrease in gross profit in fiscal 2023, as compared to fiscal 2022, was primarily the result of lower
unit volumes, impairment charges on long-term supply capacity deposits, and lower average selling prices
with a gross profit impact of $572.0 million, $47.5 million, and $41.8 million, respectively, partially offset
by a favorable product mix with a gross profit impact of $261.2 million.
Research and Development
(dollars in millions)
Research and development
% of net revenue
Fiscal Years Ended
September 29,
2023
$606.8
12.7%
Change
(1.8)%
September 30,
2022
Change
October 1,
2021
$617.9
11.3%
16.1%
$532.3
10.4%
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, non-production
masks, engineering prototypes, and design tool costs.
The decrease in research and development expense in fiscal 2023, as compared to fiscal 2022, was
primarily related to a decrease in headcount-related expenses.
Selling, General, and Administrative
(dollars in millions)
Selling, general, and administrative
% of net revenue
September 29,
2023
$314.0
6.6%
Change
(4.8)%
September 30,
2022
Change
October 1,
2021
$329.8
6.0%
2.3%
$322.5
6.3%
Fiscal Years Ended
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Annual Report
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 decrease in selling, general, and administrative expenses in fiscal 2023, as compared to fiscal 2022,
was primarily related to a decrease in headcount-related expenses, including share-based compensation.
Amortization of Intangibles
(dollars in millions)
Amortization of intangibles
% of net revenue
Fiscal Years Ended
September 29,
2023
$33.2
0.7%
Change
(66.4)%
September 30,
2022
Change
October 1,
2021
$98.9
1.8%
174.7%
$36.0
0.7%
The decrease in amortization expense for fiscal 2023, as compared to fiscal 2022, was primarily due to
certain intangible assets that were acquired in prior fiscal years reaching the end of their useful lives.
Restructuring, Impairment, and Other Charges
(dollars in millions)
Restructuring, impairment, and other
charges
% of net revenue
Fiscal Years Ended
September 29,
2023
Change
September 30,
2022
Change
October 1,
2021
$28.3
0.6%
(7.8)%
$30.7
244.9%
0.6%
$8.9
0.2%
Restructuring, impairment, and other charges incurred in fiscal 2023 were primarily due to employee
severance costs and impairment charges on divested assets.
Restructuring, impairment, and other charges incurred in fiscal 2022 were primarily related to the
abandonment of previously capitalized in-process research and development projects.
Interest Expense
(dollars in millions)
Interest expense
% of net revenue
Fiscal Years Ended
September 29,
2023
$64.4
1.3%
Change
34.4%
September 30,
2022
Change
October 1,
2021
$47.9
0.9%
100.0%
$13.4
0.3%
The increase in interest expense for fiscal 2023, as compared to fiscal 2022, was due to an increase in the
variable interest rate associated with the borrowing on the Term Loans, partially offset by a lower
average balance of debt outstanding.
Other Income (Expense), net
(dollars in millions)
Other income (expense), net
% of net revenue
Annual Report
Fiscal Years Ended
September 29,
2023
$18.2
0.4%
Change
828.0%
September 30,
2022
Change
October 1,
2021
$(2.5)
—%
316.7%
$(0.6)
—%
133
The increase in other income for fiscal 2023, as compared to fiscal 2022, was due to an increase in
interest income as a result of higher interest rates.
Provision for Income Taxes
(dollars in millions)
Provision for income taxes
% of net revenue
Fiscal Years Ended
September 29,
2023
Change
September 30,
2022
Change
October 1,
2021
$96.0
2.0%
(52.3)%
$201.4
100.6%
$100.4
3.7%
2.0%
We recorded a provision for income taxes of $96.0 million (which consisted of $62.0 million and
$34.0 million related to United States and foreign income taxes, respectively) and $201.4 million (which
consisted of $132.8 million and $68.6 million related to United States and foreign income taxes,
respectively) for fiscal 2023 and fiscal 2022, respectively.
The decrease in income tax expense for fiscal 2023, as compared with the corresponding period in fiscal
2022, was primarily due to lower income from operations, a decrease in tax on global intangible low-
taxed income (“GILTI”), an increase in the benefit from foreign-derived intangible income deduction
(“FDII”), partially offset by a current period shortfall in tax deductions for share-based compensation,
compared to windfall deductions in the prior year.
In August 2022, the U.S. government enacted the Inflation Reduction Act, which imposes a corporate
alternative minimum tax (“CAMT”) of 15% on corporations with three-year average annual adjusted
financial statement income exceeding $1.0 billion, as well as a 1% excise tax on corporate stock
repurchases made after December 31, 2022. We are currently evaluating the impact this law may have
on our effective tax rate. CAMT is effective for the Company in fiscal year 2024.
See Note 8 of this Annual Report for additional information regarding income taxes.
134
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 (used in) provided by financing activities
Cash and cash equivalents at end of period
Cash provided by operating activities:
Fiscal Years Ended
September 29,
2023
September 30,
2022
$ 566.0
1,856.4
(224.4)
(1,479.2)
$ 718.8
$ 882.9
1,424.6
(378.9)
(1,362.6)
$ 566.0
October 1,
2021
$ 566.7
1,772.0
(3,133.2)
1,677.4
$ 882.9
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 $431.8 million increase in cash provided
by operating activities for fiscal 2023, as compared to fiscal 2022, was primarily related to favorable
changes in working capital of $988.5 million, due primarily to a decrease in accounts receivable and
inventory, partially offset by lower net income.
Cash used in investing activities:
Cash used in investing activities consists primarily of capital expenditures and cash paid related to the
purchase of marketable securities, offset by cash received related to the sale or maturity of marketable
securities. The $154.5 million decrease in cash used in investing activities for fiscal 2023, as compared to
fiscal 2022, was primarily related to a decrease of $279.1 million in cash used for capital expenditures,
partially offset by a decrease of $117.9 million in the net sale of marketable securities.
Cash used in financing activities:
Cash used in financing activities consists primarily of proceeds and payments related to our long-term
borrowings and cash transactions related to equity. The $116.6 million increase in cash used in financing
activities for fiscal 2023, as compared to fiscal 2022, was primarily related to an increase of $850.0 million
for the repayment of debt, an increase of $32.1 million in dividend payments, partially offset by a decrease
of $711.5 million in stock repurchase activity, and a decrease of $52.6 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 $738.5 million as of September 29, 2023,
representing an increase of $151.7 million from September 30, 2022.
We have outstanding $500.0 million of Notes Due 2026 and $500.0 million of Notes Due 2031 (the
“Notes”). 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 of the Infrastructure and Automotive business of Silicon
Laboratories Inc. and to pay fees and expenses incurred in connection therewith. During fiscal 2023,
2022, and 2021, we repaid $400.0 million, $50.0 million, and $250.0 million, of outstanding borrowings
Annual Report
135
under the Term Loans, respectively. As of September 29, 2023, there were $300.0 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 September 29, 2023, 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, purchase commitments, and debt, see
Note 8, Note 10, Note 11, and Note 16 of this Annual Report, respectively.
Based on our historical results of operations, we expect that our cash, cash equivalents, and marketable
securities on hand, 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: money market funds, U.S. Treasury securities, municipal
bonds, and agency securities.
136
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
estimates 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 estimates include revenue recognition, which impacts the recording of net
revenue; inventory valuation, which impacts the cost of goods sold and gross margin; 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. Changes in actual demand or market conditions
could adversely or beneficially impact our reserve calculations.
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.
Annual Report
137
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 September 29, 2023, there were $300.0 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 $718.8 million, and marketable securities (U.S. Treasury
and government securities, and municipal bonds) that total approximately $15.6 million and $4.1 million
within short-term and long-term marketable securities, respectively, as of September 29, 2023.
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 September 29, 2023, 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.
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 September 29, 2023, September 30, 2022, and October 1, 2021, we had foreign
exchange gains of $1.7 million and foreign exchange losses of $1.4 million and $0.5 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 in international markets. 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
committed transactions, forecasted future cash flows, and net investments in foreign subsidiaries.
138
Annual Report
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. As of September 29, 2023, we had no outstanding foreign currency forward or
options contracts with financial institutions.
Annual Report
139
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
September 29,
2023
September 30,
2022
October 1,
2021
$4,772.4
2,665.1
2,107.3
606.8
314.0
33.2
28.3
982.3
1,125.0
(64.4)
18.2
1,078.8
96.0
$ 982.8
$
$
6.17
6.13
159.4
160.3
$5,485.5
2,881.2
2,604.3
617.9
329.8
98.9
30.7
1,077.3
1,527.0
(47.9)
(2.5)
1,476.6
201.4
$1,275.2
$
$
7.85
7.81
162.4
163.3
$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
See accompanying Notes to Consolidated Financial Statements.
140
Annual Report
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(In millions)
Net income
Other comprehensive income (loss), net of tax:
Fair value of investments
Pension adjustments
Comprehensive income
Fiscal Years Ended
September 29,
2023
September 30,
2022
$982.8
$1,275.2
October 1,
2021
$1,498.3
—
(0.8)
$982.0
(0.2)
3.3
(0.5)
0.4
$1,278.3
$1,498.2
See accompanying Notes to Consolidated Financial Statements.
Annual Report
141
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 $0.8 and $0.8, 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
Current portion of long-term debt
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 11)
Stockholders’ equity:
As of
September 29,
2023
September 30,
2022
$ 718.8
$ 566.0
15.6
864.3
1,119.7
461.1
3,179.5
1,390.1
205.4
2,176.7
1,222.1
192.3
4.1
56.5
20.3
1,094.0
1,212.1
337.5
3,229.9
1,604.8
223.0
2,176.7
1,444.7
52.7
0.5
141.5
$8,426.7
$8,873.8
$ 159.2
$ 274.2
94.3
299.4
402.8
955.7
992.9
162.8
188.7
43.9
2,344.0
114.3
499.2
339.2
1,226.9
1,689.9
213.5
206.9
67.6
3,404.8
—
40.0
11.9
5,421.9
(4.8)
5,469.0
$8,873.8
Preferred stock, no par value: 25.0 shares authorized, no shares issued
—
Common stock, $0.25 par value: 525.0 shares authorized; 159.5 shares issued and
outstanding at September 29, 2023, and 160.2 shares issued and outstanding at
September 30, 2022
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Total stockholders’ equity
Total liabilities and stockholders’ equity
39.9
172.4
5,876.0
(5.6)
6,082.7
$8,426.7
See accompanying Notes to Consolidated Financial Statements.
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Annual Report
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
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
Other
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 (used in) provided by 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
September 29,
2023
Fiscal Years Ended
September 30,
2022
October 1,
2021
$ 982.8
$ 1,275.2
$ 1,498.3
185.1
387.8
225.9
(151.2)
64.5
4.0
(3.5)
229.8
90.8
(87.1)
(72.5)
1,856.4
(210.3)
(25.8)
(288.8)
294.0
—
6.5
(224.4)
(35.9)
(175.3)
(405.2)
5.1
32.1
—
—
(900.0)
(1,479.2)
152.8
566.0
$ 718.8
$ 228.9
62.3
$
19.2
$
12.0
$
195.2
394.4
295.7
68.4
20.7
4.0
(1.5)
(337.8)
(337.3)
31.3
(183.7)
1,424.6
(489.4)
(20.3)
(97.2)
220.3
—
7.7
(378.9)
(88.5)
(886.8)
(373.1)
6.4
29.4
—
—
(50.0)
(1,362.6)
(316.9)
882.9
$ 566.0
$ 230.0
44.4
$
32.2
$
43.2
$
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
$
See accompanying Notes to Consolidated Financial Statements.
Annual Report
143
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions)
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 October 2, 2020
165.6
$41.4
66.7
$(4,093.5) $ 3,403.7
$4,820.4
$(7.8)
—
—
—
—
—
—
(0.1)
$(7.9)
—
—
—
—
—
$4,164.2
1,498.3
8.7
158.1
(195.6)
(340.6)
4.1
(0.1)
$5,297.1
1,275.2
(20.4)
173.9
(886.8)
(373.1)
3.1
Net income
Exercise and settlement of share-based awards,
net of shares withheld for taxes
Share-based compensation expense
—
1.1
—
—
0.3
—
—
0.4
—
—
—
1,498.3
(55.2)
—
63.6
158.1
—
—
Stock repurchase program
(1.4)
(0.4)
(67.1)
4,147.0
(3,549.9)
(792.3)
Dividends declared
Pre-combination service on replacement awards
Other comprehensive income
—
—
—
—
—
—
Balance at October 1, 2021
165.3
$41.3
Net income
Exercise and settlement of share-based awards,
net of shares withheld for taxes
Share-based compensation expense
—
1.4
—
—
0.3
—
—
—
—
—
—
0.6
—
—
—
—
—
4.1
—
(340.6)
—
—
$
(1.7) $
79.6
$5,185.8
—
—
1,275.2
(88.5)
—
67.8
173.9
—
—
Repurchase and retirement of common stock
(6.5)
(1.6)
(0.6)
90.2
(309.4)
(666.0)
Dividends declared
Other comprehensive loss
—
—
—
—
Balance at September 30, 2022
160.2
$40.0
Net income
Exercise and settlement of share-based awards,
net of shares withheld for taxes
Share-based compensation expense
—
1.2
—
—
0.3
—
—
—
—
—
0.4
—
Repurchase and retirement of common stock
(1.9)
(0.4)
(0.4)
Dividends declared
Other comprehensive income
—
—
—
—
Balance at September 29, 2023
159.5
$39.9
—
—
—
—
—
—
—
(35.9)
—
35.9
—
—
—
$
$
(373.1)
—
—
—
3.1
$
11.9
$5,421.9
$(4.8)
$5,469.0
—
982.8
56.3
191.5
—
—
(87.3)
(123.5)
—
—
(405.2)
—
$ 172.4
$5,876.0
—
—
—
—
—
(0.8)
$(5.6)
982.8
20.7
191.5
(175.3)
(405.2)
(0.8)
$6,082.7
See accompanying Notes to Consolidated Financial Statements.
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Annual Report
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 and mixed-signal semiconductors
are connecting people, places, and things, spanning a number of new applications within the aerospace,
automotive, broadband, cellular infrastructure, connected home, defense, entertainment and gaming,
industrial, medical, 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 2022 and 2021
financial statements, including certain account groupings in the tax reconciliation disclosure, have been
reclassified to conform to the fiscal 2023 presentation.
Fiscal Year
The Company’s fiscal year ends on the Friday closest to September 30. Fiscal years 2023 , 2022, and
2021 each consisted of 52 weeks and ended on September 29, 2023, September 30, 2022, and October 1,
2021, respectively.
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 that are reported 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, indefinite-lived intangible assets, and goodwill 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 money market funds, U.S. Treasury securities, agency securities,
other government securities, and corporate debt securities. 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
Annual Report
145
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.
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Depreciation is calculated using the straight-line method over the estimated useful lives, which range
from five to forty years for buildings and improvements and five 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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147
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. The Company recognizes shipping fees, if any, received from customers in revenue and
includes the related shipping and handling costs in cost of revenue.
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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 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.
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.
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 are recognized in the
period in which the Company terminates the contract.
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149
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 in the jurisdiction that generated the deferred tax assets. 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
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.
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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, assuming the end of the reporting period was the end of the contingency period.
Stock Repurchase
The Company accounts for stock repurchases in the consolidated balance sheet by reducing common
stock for the par value of the shares, reducing paid-in capital for the amount in excess of par to zero during
the period in which the shares are repurchased, and recording the residual amount, if any, to retained
earnings. Excise tax on stock repurchases is recorded as part of the cost basis of shares acquired in the
consolidated statement of stockholders’ equity.
Government Assistance
The Company receives government assistance for qualifying capital investments, research and
development, and other activities as defined by the relevant government entities awarding the incentive.
Incentives provided by government entities are recognized when the Company has reasonable
assurance that it will comply with the conditions of the incentive and the incentive will be received. The
Company records capital-related incentives as a reduction to property, plant and equipment and
recognizes a reduction to depreciation expense over the useful life of the corresponding asset. Incentives
for specific operating activities are offset against the related expense in the period the expense is
incurred. As of September 29, 2023, the Company has recognized $10.2 million of receivables in other
short-term assets with a corresponding reduction to the carrying amounts of the qualifying manufacturing
assets, recorded as a reduction to cost of goods sold as the related assets depreciate. The Company
recognized an immaterial benefit in the consolidated statement of operations in fiscal 2023 for grants
related to operating activities.
Recently Adopted Accounting Pronouncements and Other Developments
In November 2021, the Financial Accounting Standards Board issued ASU 2021-10 — Government
Assistance (Topic 832): Disclosures by Business Entities about Government Assistance (“ASU 2021-10”)
to increase transparency of government assistance received by most business entities. The standard
requires annual disclosures of the nature of the transactions, including the commitments, contingencies,
and the terms and conditions attached to the grant, the form in which the assistance was provided, the
accounting policies used to account for the transactions and the effect of the transactions on the entity’s
financial statements. The Company adopted ASU 2021-10 in fiscal 2023 and the adoption did not have a
significant impact on the consolidated financial statements.
In August 2022, the U.S. government enacted the CHIPS and Science Act, which provides funding for
manufacturing grants and research investments and establishes a 25% investment tax credit for certain
investments in U.S. semiconductor manufacturing that is placed in service after December 31, 2022. This
new law did not have a material impact to the Company in fiscal 2023.
In August 2022, the U.S. government enacted the Inflation Reduction Act, which imposes a corporate
alternative minimum tax (“CAMT”) of 15% on corporations with three-year average annual adjusted
Annual Report
151
financial statement income exceeding $1.0 billion, as well as a 1% excise tax on corporate stock
repurchases made after December 31, 2022. The Company did not incur an excise tax on stock
repurchases in fiscal 2023 and is currently evaluating the provisions of CAMT and its potential impact to
the Company. CAMT is effective for the Company in fiscal 2024.
3. MARKETABLE SECURITIES
The Company’s portfolio of available-for-sale marketable securities consists of the following (in millions):
U.S. Treasury and government
Corporate bonds and notes
Municipal bonds
Total marketable securities
Current
Noncurrent
September 29,
2023
September 30,
2022
September 29,
2023
September 30,
2022
$15.1
—
0.5
$15.6
$13.1
0.2
7.0
$20.3
$4.1
—
—
$4.1
$0.5
—
—
$0.5
The contractual maturities of noncurrent available-for-sale marketable securities were within two years or
less of issuance of the applicable securities. Neither gross unrealized gains and losses nor realized
gains and losses were material as of September 29, 2023, and September 30, 2022, respectively.
4. 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 fiscal
2023.
Assets and liabilities recorded at fair value on a recurring basis consisted of the following (in millions):
As of September 29, 2023
As of September 30, 2022
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(1)
$718.8
$718.5
$ 0.3
$—
$566.0
$565.7
$ 0.3
$—
U.S. Treasury and government
securities
Corporate bonds and notes
Municipal bonds
19.2
—
0.5
—
—
—
19.2
—
0.5
—
—
—
13.6
0.2
7.0
3.6
10.0
—
—
0.2
7.0
—
—
—
Total assets at fair value
$738.5
$718.5
$20.0
$—
$586.8
$569.3
$17.5
$—
(1) Cash equivalents included in Levels 1 and 2 consist of money market funds and corporate bonds and notes, US Treasury and
government securities, 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
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Annual Report
valuation methodologies at the date of acquisition and are subsequently re-measured if there are
indicators of impairment. During fiscal 2023, the Company recorded impairment charges of $64.5 million
primarily due to reduced overall market demand related to long-term supply capacity deposits of
$47.5 million recorded within cost of goods sold and a loss on divested assets of $12.3 million recorded
within restructuring, impairment, and other. During the fiscal years ended September 30, 2022, and
October 1, 2021, the Company recorded impairment charges of $20.7 million and $7.1 million,
respectively.
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. The carrying value of the Term Loans approximates its fair value as the Term
Loans are carried at a market observable interest rate that resets periodically.
The carrying amount and estimated fair value of debt under Senior Notes 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
5. INVENTORY
Inventory consists of the following (in millions):
Raw materials
Work-in-process
Finished goods
Total inventory
As of
September 29,
2023
September 30,
2022
Carrying
Amount
Estimated
Fair Value
Carrying
Amount
Estimated
Fair Value
$
—
$
—
$ 499.2
$ 488.5
497.7
495.2
444.5
390.4
496.8
494.5
431.2
377.6
$992.9
$834.9
$1,490.5
$1,297.3
As of
September 29,
2023
September 30,
2022
$
57.2
$
81.3
746.8
315.7
805.3
325.5
$1,119.7
$1,212.1
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153
6. 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
September 29,
2023
September 30,
2022
$
11.8
$
11.9
588.2
74.8
3,389.3
107.6
4,171.7
555.6
70.1
3,316.3
157.2
4,111.1
(2,781.6)
$ 1,390.1
(2,506.3)
$ 1,604.8
7. GOODWILL AND INTANGIBLE ASSETS
The Company’s goodwill balance was $2,176.7 million as of each of September 29, 2023, and
September 30, 2022. The Company performed an impairment test of its goodwill and its indefinite-lived
intangible assets as of the first day of the fourth fiscal quarter in accordance with its regularly scheduled
testing. The results of these tests indicated that the Company’s goodwill and indefinite-lived intangible
assets were not impaired. There were no indicators of impairment noted during the fiscal year ended
September 29, 2023.
Intangible assets consist of the following (in millions):
As of
September 29, 2023
As of
September 30, 2022
Weighted
average
amortization
period
(years)
2.3
6.1
2.8
Customer relationships
and backlog
Developed technology
and other
Technology licenses
In-process research and
development
Gross
carrying
amount
Accumulated
amortization
Net
carrying
amount
Gross
carrying
amount
Accumulated
amortization
Net
carrying
amount
$ 154.6
$(154.6)
$
—
$ 154.6
$(122.3)
$
32.3
1,290.4
75.8
(379.4)
(36.0)
911.0
1,280.9
39.8
105.1
(209.2)
(45.2)
1,071.7
59.9
271.3
—
271.3
280.8
—
280.8
Total intangible assets
$1,792.1
$(570.0)
$1,222.1
$1,821.4
$(376.7)
$1,444.7
Fully amortized intangible assets are eliminated from both the gross and accumulated amortization
amounts in the first quarter of each fiscal year. During fiscal 2023 and fiscal 2022, $9.5 million and
$293.5 million, respectively, of IPR&D assets were transferred to definite-lived intangible assets, and are
being amortized over their useful lives of 12 years. Amortization expense related to definite-lived intangible
assets was $225.9 million, $288.4 million, and $86.8 million for the fiscal years ended September 29,
2023, September 30, 2022, and October 1, 2021, respectively.
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Annual Report
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):
Amortization expense
8. INCOME TAXES
2024
2025
2026
2027
2028
Thereafter
$179.1
$155.7
$127.8
$112.6
$89.9
$285.7
Income before income taxes consists of the following components (in millions):
United States
Foreign
Income before income taxes
Fiscal Years Ended
September 29,
2023
September 30,
2022
October 1,
2021
$ 484.9
593.9
$1,078.8
$ 663.0
$ 804.7
813.6
794.0
$1,476.6
$1,598.7
The provision for income taxes consists of the following components (in millions):
Current tax expense:
Federal
State
Foreign
Deferred tax expense (benefit):
Federal
State
Foreign
Provision for income taxes
Fiscal Years Ended
September 29,
2023
September 30,
2022
October 1,
2021
$ 164.4
0.1
74.4
238.9
(102.4)
(0.1)
(40.4)
(142.9)
$ 96.0
$ 88.7
0.1
51.5
140.3
43.9
0.1
17.1
61.1
$ 87.5
—
70.7
158.2
(45.8)
(0.1)
(11.9)
(57.8)
$201.4
$100.4
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):
Annual Report
155
Tax expense at United States statutory rate
Foreign tax rate difference
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
September 29,
2023
September 30,
2022
October 1,
2021
$226.5
(90.7)
16.0
(29.7)
8.1
16.3
(65.9)
15.4
$ 310.1
(105.3)
$ 335.7
(111.7)
(13.1)
(26.1)
7.4
36.1
(39.9)
32.2
(6.7)
(27.0)
(51.5)
25.5
(79.7)
15.8
$ 96.0
$ 201.4
$ 100.4
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 September 29, 2023, September 30, 2022, and October 1, 2021.
The Company had accrued $34.9 million and $105.8 million of the deemed repatriation tax in short-term
and long-term liabilities within the consolidated balance sheet, respectively, as of September 29, 2023.
The Company had accrued $18.6 million and $139.7 million of the deemed repatriation tax in short-term
and long-term liabilities within the consolidated balance sheet, respectively, as of September 30, 2022.
The remaining repatriation tax is payable over the next three years: $34.9 million in 2024, $47.6 million in
2025, and $58.2 million in 2026.
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 taxes owed
by $66.0 million, $96.6 million, and $99.5 million for the fiscal years ended September 29, 2023,
September 30, 2022, and October 1, 2021, respectively, which resulted in tax benefits of $0.41, $0.59,
and $0.60 of diluted earnings per share, respectively. These tax benefits were partially offset by an increase
in tax expense on GILTI.
Deferred income tax assets and liabilities consist of the tax effects of temporary differences related to the
following (in millions):
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Annual Report
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
R&D capitalization
Intangible assets
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
September 29,
2023
September 30,
2022
$ 24.1
$ 21.4
14.4
7.0
24.5
12.2
15.7
140.0
45.6
95.3
34.0
34.5
13.9
461.2
(164.2)
297.0
(52.8)
(9.6)
(44.3)
(7.1)
(113.8)
$ 183.2
11.6
1.5
27.8
14.0
17.0
138.0
56.8
—
20.4
31.4
8.7
348.6
(161.4)
187.2
(59.2)
(4.7)
(51.5)
(39.7)
(155.1)
$ 32.1
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
September 29,
2023
September 30,
2022
$192.3
(9.1)
$183.2
$ 52.7
(20.6)
$ 32.1
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 September 29,
2023, the Company has a valuation allowance of $164.2 million. This valuation allowance is comprised of
$140.0 million related to United States tax credits, $4.0 million related to United States state net operating
loss carry forwards, and $20.2 million related to foreign deferred tax assets. The United States 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 the United States and foreign credits. If these benefits are recognized in a
future period, the valuation allowance on deferred tax assets will be reversed and up to a $164.2 million
income tax benefit may be recognized. The Company will need to generate $656.6 million of future United
Annual Report
157
States federal taxable income to utilize its United States deferred tax assets, net of deferred tax liabilities
and excluding state deferred tax assets with a full valuation allowance, as of September 29, 2023. 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 $2.8 million and $11.4 million in fiscal 2023 and fiscal
2022, respectively, primarily related to increases in state tax credit carryovers.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in
millions):
Balance at September 30, 2022
Increases based on positions related to prior years
Decreases based on positions related to prior years
Increases based on positions related to current year
Decreases based on settlements with taxing authorities
Balance at September 29, 2023
Unrecognized
tax benefits
$ 62.5
25.4
(21.7)
3.7
(12.0)
$ 57.9
Of the total unrecognized tax benefits at September 29, 2023, $40.4 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. Although
the Company cannot predict the timing of resolution with taxing authorities, if any, the Company
believes it is reasonably possible that its unrecognized tax benefits will be reduced by $13.1 million in
the next 12 months due to expiration of the applicable statute of limitations. During fiscal 2023 and fiscal
2022, the Company recognized $2.9 million and $1.2 million, respectively, of interest or penalties
related to unrecognized tax benefits. During fiscal 2021, the Company recognized an $11.6 million
benefit for interest and penalties related to unrecognized tax benefits. Accrued interest and penalties of
$6.2 million and $5.7 million related to uncertain tax positions have been included in long-term tax
liabilities within the consolidated balance sheet as of September 29, 2023, and September 30, 2022,
respectively.
During fiscal 2023, the Company concluded an Internal Revenue Service examination of its federal
income tax returns for the fiscal year ended September 28, 2018 (“fiscal 2018”) and the fiscal year ended
September 27, 2019 (“fiscal 2019”). The Company agreed to various adjustments to fiscal 2018 and
fiscal 2019 tax returns that resulted in the recognition of net tax expense of $1.6 million during fiscal 2023.
The Company’s major tax jurisdictions as of September 29, 2023, are the United States, California,
Canada, Mexico, Japan, and Singapore. For the United States, the Company has open tax years dating
back to fiscal 2020. For California, the Company has open tax years dating back to fiscal 2004. For Canada,
the Company has open tax years dating back to fiscal 2016. For Mexico, the Company has open tax years
dating back to fiscal 2013. For Japan, the Company has open tax years dating back to fiscal 2016. For
Singapore, the Company has open tax years dating back to fiscal 2019. 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
9. STOCKHOLDERS’ EQUITY
Common Stock
At September 29, 2023, the Company is authorized to issue 525.0 million shares of common stock, par
value $0.25 per share, of which 159.5 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 September 29, 2023, the
Company had no shares of preferred stock issued or outstanding.
Stock Repurchase and Retirement
On January 31, 2023, the Board of Directors approved a stock repurchase program (“January 31, 2023
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 through February 1, 2025, on the open market or in privately
negotiated transactions, in compliance with applicable securities laws and other legal requirements. The
January 31, 2023 stock repurchase program succeeds in its entirety the stock repurchase program
approved by the Board of Directors on January 26, 2021 (“January 26, 2021 stock repurchase program”).
The timing and amount of any shares of the Company’s common stock that are repurchased under the
January 31, 2023 stock repurchase program will be determined by the Company’s management based on
its evaluation of market conditions and other factors. The January 31, 2023 stock repurchase program
may be suspended or discontinued at any time. The Company currently expects to fund the January 31,
2023 stock repurchase program using the Company’s working capital.
During the fiscal year ended September 29, 2023, the Company paid approximately $175.3 million
(including commissions) in connection with the repurchase of 1.9 million shares of its common stock
(paying an average price of $90.60 per share) all of which shares were repurchased pursuant to the
January 26, 2021 stock repurchase program. As of September 29, 2023, $2.0 billion remained available
under the January 31, 2023 stock repurchase program.
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159
During the fiscal year ended September 30, 2022, the Company paid approximately $886.8 million
(including commissions) in connection with the repurchase of 6.5 million shares of its common stock
(paying an average price of $136.32 per share) all of which shares were repurchased pursuant to the
January 26, 2021, stock repurchase program. 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) all of which shares
were repurchased pursuant to the January 30, 2019 stock repurchase program.
During the fiscal years ended September 30, 2022 and October 1, 2021, the Board of Directors approved
the retirement of 6.2 million and 68.5 million treasury shares at an aggregate historical cost of
$893.4 million and $4,342.6 million, respectively. Upon retirement, the shares assumed the status of
authorized and unissued. All future repurchases of shares will assume the status of authorized and
unissued.
Dividends
On November 2, 2023, the Company announced that the Board of Directors had declared a cash
dividend on the Company’s common stock of $0.68 per share. This dividend is payable on December 12,
2023, to the Company’s stockholders of record as of the close of business on November 21, 2023.
Future dividends are subject to declaration by the Board of Directors. The dividends charged to retained
earnings in fiscal 2023 and 2022 were as follows (in millions except per share data):
First quarter
Second quarter
Third quarter
Fourth quarter
Fiscal Years Ended
September 29,
2023
September 30,
2022
Per Share
Total
Per Share
Total
$0.62
$ 99.4
$0.56
$ 92.5
0.62
0.62
0.68
98.6
98.7
108.5
0.56
0.56
0.62
91.2
90.0
99.4
$2.54
$405.2
$2.30
$373.1
Employee Stock Benefit Plans
As of September 29, 2023, 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 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 September 29, 2023, a total of 37.5 million shares are authorized for grant under the Company’s
share-based compensation plans. The number of common shares reserved for future awards to employees
and directors under these plans was 10.5 million at September 29, 2023. The Company currently grants
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Annual Report
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 8.9 million shares were available for new grants as of September 29,
2023. 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 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
0.5 million shares were available for new grants as of September 29, 2023. The maximum contractual
term of options granted under the plan is ten years from the date of grant. Options granted under the plan
generally vest ratably 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 15% 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 September 29, 2023, September 30, 2022,
and October 1, 2021, were 0.3 million, 0.3 million, and 0.2 million, respectively. At September 29, 2023,
there were 1.0 million shares available for purchase. The Company recognized compensation expense
of $10.9 million, $9.2 million, and $8.7 million for the fiscal years ended September 29, 2023,
September 30, 2022, and October 1, 2021, respectively, related to the employee stock purchase plan.
The unrecognized compensation expense on the employee stock purchase plan at September 29, 2023,
was $3.5 million. The weighted average period over which the cost is expected to be recognized is
approximately four months.
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 September 30, 2022
Granted(1)
Vested
Canceled/forfeited
Non-vested awards outstanding at September 29, 2023
Shares
(in millions)
Weighted average
grant date fair value
2.4
2.6
(1.2)
(0.4)
3.4
$139.63
$ 92.86
$123.60
$112.15
$112.69
(1)
includes performance stock awards granted and earned assuming target performance under the underlying performance
metrics
Annual Report
161
The weighted-average grant date fair value per share for awards granted during the fiscal years ended
September 29, 2023, September 30, 2022, and October 1, 2021, was $92.86, $151.20, and $148.96,
respectively.
The following table summarizes the total intrinsic value for awards vested (in millions):
Awards
Valuation and Expense Information
Fiscal Years Ended
September 29,
2023
September 30,
2022
October 1,
2021
$111.9
$249.6
$167.4
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 expense (benefit)
Capitalized share-based compensation expense at period end
Fiscal Years Ended
September 29,
2023
September 30,
2022
October 1,
2021
$ 20.7
94.8
69.6
$185.1
$ 9.1
$ 14.5
$ 26.9
$ 28.9
93.8
74.5
$195.2
$ (20.1)
$ 6.8
85.7
77.3
$191.9
$ (13.5)
$ 9.8
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
September 29, 2023:
Awards
Unrecognized
compensation cost for
unvested awards
(in millions)
Weighted
average remaining
recognition period
(in years)
$242.3
2.6
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 2023, fiscal 2022, and fiscal 2021 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:
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Annual Report
Volatility of common stock
Average volatility of peer companies
Average correlation coefficient of peer companies
Risk-free interest rate
Dividend yield
10. LEASES
Fiscal Year Ended
September 29,
2023
September 30,
2022
October 1,
2021
45.71%
40.74%
0.65
4.51%
2.80%
44.04%
46.28%
0.65
0.79%
1.40%
43.20%
45.96%
0.65
0.25%
1.39%
The Company’s lease arrangements consist primarily of corporate, manufacturing, design, and other
facility agreements as well as various machinery and office equipment agreements. The leases expire at
various dates through 2061, some of which include options to extend the lease term. The longest potential
total lease term consists of a 40-year land lease in Osaka, Japan.
During the fiscal years ended September 29, 2023, September 30, 2022, and October 1, 2021, the
Company recorded $39.8 million, $43.6 million, and $33.9 million of operating lease expense, and
$19.2 million, $12.3 million, and $3.2 million of variable lease expense, respectively.
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
Operating leases are classified as follows (in millions):
Other current liabilities
Long-term operating lease liabilities
Total lease liabilities
Fiscal Year Ended
September 29,
2023
September 30,
2022
October 1,
2021
$34.0
$11.1
$32.0
$84.6
$32.5
$24.8
As of
September 29,
2023
September 30,
2022
$ 28.3
188.7
$217.0
$ 18.5
206.9
$225.4
Annual Report
163
Maturities of lease liabilities under operating leases by fiscal year are as follows (in millions):
2024
2025
2026
2027
2028
Thereafter
Total lease payments
Less: imputed interest
Present value of lease liabilities
Less: current portion (included in other current liabilities)
Total
As of
September 29, 2023
$ 20.6
32.7
29.3
28.5
26.3
123.9
261.3
(44.3)
217.0
(28.3)
$188.7
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
September 29,
2023
September 30,
2022
12.3
3.6%
12.1
3.3%
11. 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. 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
164
Annual Report
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.
Purchase Commitments
The Company purchases materials primarily pursuant to individual purchase orders, some of which have
underlying master purchase agreements. Some of these purchase commitments are cancellable, and
some are non-cancelable, depending on the terms with each individual supplier. In the event of
cancellation, the Company may be required to pay costs incurred through the date of cancellation or
other fees. When cancellation would result in incurring costs or other fees, the Company has historically
sought to negotiate amended terms to the original agreements and orders to limit its exposure and, as
such, the Company believes that purchase commitments as of any particular date may not be a reliable
indicator of future commitments.
The Company maintains certain minimum purchase commitments under long-term capacity reservation
agreements primarily with foundries for the purchase of wafers. Under these agreements, the Company
agreed to pay refundable deposits to the suppliers in exchange for reserved manufacturing production
capacity over the term of the agreements. During fiscal 2023, the Company recorded impairment charges
of $47.5 million within cost of goods sold due to reduced overall market demand related to long-term
supply capacity deposits. As of September 29, 2023, the remaining deposits under the long-term capacity
reservation agreements were $43.0 million and $16.0 million recorded within other current assets and
other long-term assets, respectively.
12. 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
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.
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165
13. 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
September 29,
2023
September 30,
2022
October 1,
2021
$982.8
$1,275.2
$1,498.3
159.4
0.9
160.3
$ 6.17
$ 6.13
0.1
162.4
0.9
163.3
7.85
7.81
0.7
$
$
165.2
1.8
167.0
9.07
8.97
—
$
$
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 September 29, 2023, September 30, 2022, and October 1, 2021, 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.
14. 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,
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):
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Annual Report
United States
China
Taiwan
Europe, Middle East, and Africa
South Korea
Other Asia-Pacific
Total
Net revenue by sales channel is as follows (in millions):
Distributors
Direct customers
Total
Fiscal Years Ended
September 29,
2023
September 30,
2022
October 1,
2021
$3,603.9
$3,685.7
$3,228.1
358.3
344.4
204.2
198.3
63.3
599.6
430.4
235.8
458.2
75.8
994.2
404.2
180.1
264.5
38.0
$4,772.4
$5,485.5
$5,109.1
Fiscal Years Ended
September 29,
2023
September 30,
2022
October 1,
2021
$4,235.7
536.7
$4,772.4
$4,488.1
$4,539.7
997.4
569.4
$5,485.5
$5,109.1
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
Singapore
Mexico
United States
Rest of world
Concentrations
As of
September 29,
2023
September 30,
2022
$ 606.4
$ 679.7
307.5
233.1
219.7
23.4
363.3
296.7
246.0
19.1
$1,390.1
$1,604.8
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 2023, 2022, and 2021, Apple, through sales to multiple distributors, contract manufacturers, and
direct sales for multiple applications including smartphones, tablets, desktop, and notebook computers,
watches and other devices, in the aggregate accounted for 66%, 58%, and 59% of the Company’s net
revenue, respectively.
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167
At September 29, 2023, the Company’s three largest accounts receivable balances comprised 83% of
aggregate gross accounts receivable. This concentration was 79% at September 30, 2022, and 70% at
October 1, 2021.
15. SUPPLEMENTAL FINANCIAL INFORMATION
Other current assets consist of the following (in millions):
Prepaid expenses
Other
Total other current assets
Other current liabilities consist of the following (in millions):
Accrued customer liabilities
Accrued taxes
Short-term operating lease liabilities
Other
Total other current liabilities
16. DEBT
Debt consists of the following (in millions, except percentages):
As of
September 30,
2022
October 1,
2021
$306.0
155.1
$461.1
$242.3
95.2
$337.5
As of
September 29,
2023
September 30,
2022
$270.9
$226.9
58.8
28.3
44.8
48.8
18.5
45.0
$402.8
$339.2
0.90% Senior Notes due 2023
1.80% Senior Notes due 2026
3.00% Senior Notes due 2031
Term Loans due 2024
Unamortized debt discount and issuance costs
Total debt
Less: current portion of long-term debt
Total long-term debt
Senior Notes
As of
Effective Interest
Rate
September 29,
2023
September 30,
2022
—%
1.97%
3.13%
6.37%
$
—
$ 500.0
500.0
500.0
300.0
(7.7)
1,292.3
299.4
$ 992.9
500.0
500.0
700.0
(10.9)
2,189.1
499.2
$1,689.9
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
168
Annual Report
3.00% Senior Notes due 2031 (the “2031 Notes” and, together with the 2026 Notes, the “Notes”). During
fiscal 2023, the Company repaid $500.0 million of the 2023 Notes at maturity. 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 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
September 29, 2023, the Company considered the likelihood of acceleration related to the 2026 and
2031 Notes and recorded the Notes as long-term debt. The Notes are recorded 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. As of September 29, 2023,
the Company was in material compliance with all debt covenants under the Senior Notes.
Term Credit Agreement
On May 21, 2021, the Company entered into a term credit agreement (as amended, 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 of the Infrastructure and
Automotive business of Silicon Laboratories Inc. and to pay fees and expenses incurred in connection
therewith. During fiscal 2023, 2022, and 2021 the Company repaid $400.0 million, $50.0 million, and
$250.0 million, respectively, of outstanding borrowings under the Term Loans. As of September 29, 2023,
there were $300.0 million of borrowings outstanding under the Term Credit Agreement.
Borrowings under the Term Loan Facility are not currently guaranteed by any of the Company’s
subsidiaries. Interest on the Term Loans is payable either monthly or quarterly elected at the Company’s
discretion 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 remedies, the lenders may accelerate the maturity of the indebtedness and other obligations under
Annual Report
169
the Term Credit Agreement. As of September 29, 2023, the Company was in material compliance with all
debt covenants under the Term Credit Agreement.
Revolving Credit Agreement
On May 21, 2021, the Company entered into a revolving credit agreement (as amended, 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 September 29, 2023,
there were no borrowings outstanding and the Company was in material compliance with all debt
covenants under the Revolver.
17. SUBSEQUENT EVENT
On October 4, 2023, the Company repaid $150.0 million of outstanding borrowings under the Term
Loans. As of October 4, 2023, there were $150.0 million of borrowings outstanding under the Term Credit
Agreement.
170
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 September 29, 2023 and September 30, 2022, the related consolidated
statements of operations, comprehensive income, cash flows, and stockholders’ equity for each of
the years in the three-year period ended September 29, 2023, and the related notes (collectively, the
consolidated financial statements). We also have audited the Company’s internal control over financial
reporting as of September 29, 2023, 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 September 29, 2023 and September 30, 2022, and
the results of its operations and its cash flows for each of the years in the three-year period ended
September 29, 2023, 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
September 29, 2023 based on criteria established in Internal Control — Integrated Framework (2013) issued
by the Committee of Sponsoring Organizations of the Treadway Commission.
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
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
Annual Report
171
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.
Application of tax laws and regulations
As discussed in Note 2 and Note 8 to the consolidated financial statements, the Company recorded an
income tax provision of $96.0 million for the year ended September 29, 2023, which is comprised of
current and deferred taxes on domestic and foreign income. The application of tax laws and regulations to
calculate 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 identified the evaluation of the application of tax laws and regulations in certain jurisdictions as a
critical audit matter. Challenging auditor judgment and the involvement of tax professionals with
specialized skills and knowledge were required due to the Company’s application of the tax laws and
regulations within the manually prepared income tax provision.
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
income tax process, including controls relating to the application of the tax laws and regulations. We
involved tax professionals with specialized skills and knowledge, who assisted in evaluating the Company’s
application of the tax laws and regulations in certain jurisdictions, including the resulting calculations,
within the manually prepared income tax provision.
/s/ KPMG LLP
We have served as the Company’s auditor since 2002.
Irvine, California
November 17, 2023
172
Annual Report
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
Controls and Procedures
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 September 29, 2023. 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 September 29, 2023, 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.
Changes in Internal Control Over Financial Reporting
There are no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act) that occurred during the fourth quarter of fiscal 2023 that have materially
affected or are reasonably likely to materially affect our internal control over financial reporting.
Annual Report
173
Director and Officer Trading Arrangements
A significant portion of the compensation of the Company’s directors and officers (as defined in
Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) is in the form
of equity awards and, from time to time, directors and officers engage in open-market transactions with
respect to the securities acquired pursuant to such equity awards or other Company securities, including
to satisfy tax withholding obligations when equity awards vest or are exercised, and for diversification
or other personal reasons.
Transactions in Company securities by directors and officers are required to be made in accordance with
the Company’s insider trading policy, which requires that the transactions be in accordance with
applicable U.S. federal securities laws that prohibit trading while in possession of material nonpublic
information. Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables directors
and officers to prearrange transactions in the Company’s securities in a manner that avoids concerns about
initiating transactions while in possession of material nonpublic information.
The following table describes contracts, instructions or written plans for the sale or purchase of Company
securities adopted by our directors and officers during the fourth quarter of fiscal 2023 that are intended
to satisfy the affirmative defense conditions of Rule 10b5-1(c) (a “Rule 10b5-1 trading arrangement”):
Name and Title
Karilee Durham, Senior Vice
President, Human Resources
Date of
Adoption
August 9, 2023
Aggregate Number of
Securities to Be Purchased
or Sold
Sale of up to 5,000 shares
Duration of Rule 10b5-1
Trading Arrangement
Until August 9, 2024, or such
earlier date upon which all
transactions are completed
or expire without execution
None of our directors or officers terminated a Rule 10b5-1 trading arrangement or adopted or terminated
a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the fourth
quarter of fiscal 2023.
174
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 2, 2023, was 8,175. On
November 2, 2023, the Company announced that the Board of Directors had declared a cash dividend
of $0.68 per share of common stock, payable on December 12, 2023, to stockholders of record as of
November 21, 2023. We pay, and intend to continue to pay, quarterly dividends subject to capital
availability and periodic determinations made by our Board of Directors 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
investments and acquisitions, 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
three months ended September 29, 2023:
Period
7/1/23-7/28/23
7/29/23-8/25/23
8/26/23-9/29/23
Total
Number of
Shares
Purchased
12,567(2)
8,549(2)
—
21,116
Average
Price Paid
per Share
$112.71
$105.62
$ 0.00
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 February 6, 2023 that our Board of Directors had approved a stock repurchase program on January 31,
2023, 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, in compliance with applicable securities laws and other legal requirements, and which is
scheduled to expire on February 1, 2025.
(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
175
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 28, 2018, 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 Solutions, Inc.
S&P 500 Index
S&P 500 Semiconductors
S
R
A
L
L
O
D
300
200
100
0
09/28/18
09/27/19
10/02/20
10/01/21
9/30/22
9/29/23
Years Ending
Total Return to Stockholders
(Includes reinvestment of dividends)
ANNUAL RETURN PERCENTAGE
Company Name / Index
09/27/19
10/02/20
10/01/21
09/30/22
09/29/23
Skyworks Solutions, Inc.
S&P 500 Index
S&P 500 Semiconductors
(12.75)
3.72
1.22
92.54
15.25
50.06
13.02
32.06
36.11
(46.98)
(16.43)
(29.76)
18.53
21.62
93.95
Years Ended
INDEXED RETURNS
Company Name / Index
Skyworks Solutions, Inc.
S&P 500 Index
S&P 500 Semiconductors
Base Period
9/28/18
100
100
100
09/27/19
10/02/20
10/01/21
09/30/22
09/29/23
87.25
103.72
101.22
168.00
119.54
151.90
189.87
157.86
206.75
100.67
131.92
145.22
119.32
160.44
281.65
Years Ended
176
Annual Report
The stock performance graph shall not be deemed soliciting material or to be filed with the SEC or
subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange
Act, nor shall it be incorporated by reference into any past or future filing under the Securities Act of
1933 or the Exchange Act, except to the extent we specifically request that it be treated as soliciting
material or specifically incorporate it by reference into a filing under the Securities Act of 1933 or the
Exchange Act.
Annual Report
177
Your Vote Counts!
2024 Annual Meeting of
SKYWORKS SOLUTIONS, INC.
May 14, 2024, at 11:00 a.m. PDT
Exclusively via live audio webcast at
www.virtualshareholdermeeting.com/SWKS2024
Vote by 11:59 p.m. EDT on May 13, 2024
for shares held directly and by 11:59 p.m. EDT
on May 9, 2024 for shares held in the 401(k) Plan.
SKYWORKS SOLUTIONS, INC.
ATTN: CORPORATE SECRETARY
5260 CALIFORNIA AVENUE
IRVINE, CA 92617-3073
V35453-P07975-Z87140
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders To Be Held on May 14, 2024
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 30, 2024. 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 and
vote without entering a
control number
Vote Virtually at the Meeting*
May 14, 2024
11:00 a.m. PDT
Virtually at:
www.virtualshareholdermeeting.com/SWKS2024
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.
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 nine 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
1i. Maryann Turcke
2.
3.
4.
5.
6.
7.
8.
9.
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 2024.
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 the Company’s Second Amended and Restated 2015 Long-Term Incentive Plan.
To approve an amendment to the Company’s 2002 Employee Stock Purchase Plan, as amended.
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
10. To approve a stockholder proposal regarding named executive officer termination payments.
11. To approve a stockholder proposal regarding adoption of greenhouse gas emissions reduction targets.
Against
Against
Prefer to receive an email instead? While voting on www.ProxyVote.com, be sure to click “Delivery Settings”.
V35454-P07975-Z87140
SAMPLE
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Annual Report and Proxy Statement are available at www.proxyvote.com.
V35372-P07975-Z87140
SKYWORKS SOLUTIONS, INC.
Annual Meeting of Stockholders
May 14, 2024, 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 14, 2024, held virtually at
www.virtualshareholdermeeting.com/SWKS2024, 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 by the proxy holders in accordance with the Board of Directors’ recommendations, or if no
recommendation is given, in their own discretion.
Continued and to be signed on reverse side
SAMPLE SKYWORKS SOLUTIONS, INC.
ATTN: CORPORATE SECRETARY
5260 CALIFORNIA 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 13, 2024 for shares held
directly and by 11:59 p.m. Eastern Daylight Time on May 9, 2024 for shares held in the
401(k) 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/SWKS2024
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 13, 2024 for shares held directly and by
11:59 p.m. Eastern Daylight Time on May 9, 2024 for shares held in the 401(k) 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.
V35371-P07975-Z87140
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 9, AND "AGAINST"
PROPOSALS 10 AND 11.
1.
To elect the following nine 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
1i. Maryann Turcke
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 2024.
For Against Abstain
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To approve, on an advisory basis, the compensation of the
Company’s named executive officers, as described in the
Company’s Proxy Statement.
!
!
!
4.
5.
6.
7.
8.
9.
10.
11.
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 the Company’s Second Amended and Restated 2015
Long-Term Incentive Plan.
To approve an amendment to the Company’s 2002 Employee Stock
Purchase Plan, as amended.
To approve a stockholder proposal regarding named executive
officer termination payments.
To approve a stockholder proposal regarding adoption of
greenhouse gas emissions reduction targets.
For Against Abstain
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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