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Transforming digital healthcare
for better access and outcomes
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Combating climate change
through electrification, energy management, and industrial automation
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Unlocking human potential
by safely automating factories and transportation
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Connecting humanity
to foster knowledge, understanding, and community
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![]()
VINCENT ROCHE
Chief Executive Officer and Chair of the Board of Directors
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![]() |
![]()
STEPHEN M. JENNINGS
Lead Independent Director and
Chair of the Nominating and
Corporate Governance Committee
|
Items of Business
The 2024 Annual Meeting of Shareholders (Annual Meeting) of Analog Devices, Inc. (ADI) will be held at our offices located at 125 Summer Street, Boston, Massachusetts 02110, on Wednesday, March 13, 2024 at 9:00 a.m. local time. At the Annual Meeting, shareholders will consider and vote on the following matters:
1.
To elect the 11 director nominees named in this Proxy Statement to our Board of Directors, each to serve for a term expiring at the next annual meeting of shareholders;
2.
To approve, by a non-binding “say-on-pay” vote, the compensation of our named executive officers, as described in the
Compensation Discussion and Analysis
, executive compensation tables, and accompanying narrative disclosures in this Proxy Statement;
3.
To ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending November 2, 2024; and
4.
To consider a shareholder proposal regarding simple majority vote, if properly presented at the Annual Meeting.
The shareholders will also act on any other business that may properly come before the Annual Meeting.
Our Board of Directors recommends that you vote FOR each director nominee included in Proposal 1, FOR each of Proposals 2 and 3, and AGAINST Proposal 4. The full text of these proposals is set forth in this Proxy Statement.
Please note that we are furnishing proxy materials and access to our Proxy Statement to our shareholders via our website instead of mailing printed copies to each of our shareholders. By doing so, we save costs and reduce our impact on the environment.
Beginning on January 19, 2024, we will mail to our shareholders a Notice of Internet Availability of Proxy Materials, or Notice, which contains instructions on how to access our proxy materials and vote online. The Notice also contains instructions on how each of our shareholders can receive a paper copy of our proxy materials, including this Proxy Statement, our 2023 Annual Report, and a form of proxy card or voting instruction form. All shareholders who do not receive the Notice, including shareholders who have previously requested to receive paper copies of proxy materials, will receive a paper copy of the proxy materials by mail unless they have previously requested delivery of proxy materials electronically.
Shareholders of record at the close of business on the record date of January 9, 2024 are entitled to vote at the Annual Meeting.
Your vote is important no matter how many shares you own, and we encourage you to vote promptly whether or not you plan to attend the Annual Meeting.
By Order of the Board of Directors,
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DATE AND TIME
Wednesday
, March 13, 2024
9:00 a.m. local time
PLACE
125 Summer Street
Boston, MA 02110
RECORD DATE
Tuesday, January 9, 2024
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How to vote: Your vote is important
VOTE BY PROXY:
BY INTERNET
Go to www.proxyvote.com
You will need the 16-digit control number that appears on your proxy card or the Notice.
BY TELEPHONE
Call 1-800-690-6903
You will need the 16-digit control number that appears on your proxy card or the Notice.
BY MAIL
Mark, sign, date, and mail your proxy card or your voting instruction form. No postage is required if mailed in the United States.
VOTE DURING THE ANNUAL MEETING:
For details on voting your shares during the Annual Meeting, see
Q&A About Annual Meeting and Voting
on page
93
.
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JANENE ASGEIRSSON
Chief Legal Officer, Chief Risk Officer, and Secretary
January 19, 2024
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on March 13, 2024: This Proxy Statement and the
2023
Annual Report are available for viewing, printing and downloading at https://investor.analog.com/financial-info/annual-reports.
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Web links throughout this document are provided for convenience only, and the content on the referenced websites does not constitute a part of this Proxy Statement.
The sum and/or computation of individual numerical amounts or percentages disclosed in this Proxy Statement may not equal the total due to rounding.
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Forward-Looking Statements
This Proxy Statement contains forward-looking statements regarding future events and our future results that are subject to the safe harbor created under the Private Securities Litigation Reform Act of 1995 and other safe harbors under the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” “could” and “will,” and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to
projections regarding our future financial performance and our long-term financial model; our strategy; our anticipated growth and trends in our industry, markets, and businesses; new or improved innovative solutions, products, and technologies, including those related to artificial intelligence and the Intelligent Edge; future investments in research and development; the effects of business, economic, political, legal, and regulatory impacts or conflicts upon our global operations; recruiting or retaining our key personnel; changes to our compensation programs; our future liquidity, capital needs, and capital expenditures; our future market position, expected competitive changes in the marketplace, and changes in demand and supply for our products; the importance of our product offerings and technologies to our customers; our ability to pay dividends or repurchase stock; our ability to service our outstanding debt; our expected tax rate; our ability to successfully integrate acquired businesses and technologies, including Maxim Integrated Products, Inc. (Maxim); environment, social, and governance related goals, commitments, and progress towards such goals and commitments
; and other characterizations of future events or circumstances are forward-looking statements. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: the effects of business, economic, political, legal, and regulatory uncertainty or conflicts upon our global operations; changes in demand for semiconductors and the related changes in demand and supply for our products; products that may be diverted from our authorized distribution channels; manufacturing delays, product availability, and supply chain disruptions; our future liquidity, capital needs, and capital expenditures; our development of technologies and research and development investments; our ability to compete successfully in the markets in which we operate; changes in our estimates of our expected tax rates based on current tax law; adverse results in litigation matters; the risk that we will be unable to retain and hire key personnel; security breaches or other cyber incidents; unanticipated difficulties or expenditures relating to integrating Maxim; uncertainty as to the long-term value of our common stock; and the risk that expected benefits, synergies, and growth prospects of acquisitions, including those from our acquisition of Maxim, may not be fully achieved in a timely manner, or at all. For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to our filings with the Securities and Exchange Commission (SEC), including the risk factors contained in our most recent Annual Report on Form 10-K. Forward-looking statements represent management’s current expectations and are inherently uncertain. Except as required by law, we do not undertake any obligation to update forward-looking statements made by us to reflect subsequent events or circumstances.
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Founded:
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1965 | ||||
Headquarters:
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Wilmington, MA
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Employees:
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~26,000
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Office Locations:
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31 Countries
Worldwide sales, field applications, product development, design, service and technical support
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Products:
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75,000+ SKUs
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Customers:
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125,000+
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Publicly Listed
– Nasdaq:
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ADI
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Design Centers:
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~80
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Global Manufacturing:
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United States (Massachusetts, Oregon, Washington) | Ireland | Philippines | Malaysia | Thailand
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2024 Proxy Statement
|
1 |
Deploying
Capital
Efficiently
|
u
Annual R&D investment of approximately $1.7B with approximately 95% targeted on most attractive B2B opportunities
u
Extracted value from M&A to enhance scale and scope, creating a destination for the world’s best talent: Maxim in FY’21, Linear Technology in FY’17, and Hittite in FY’14
u
Delivered on our commitment to return at least 100% of free cash flow over the long term, distributing $4.6B through share repurchases and dividends
|
||||
Deepening Customer’s Centricity
|
u
Partnered more deeply with customers to deliver complete solutions and breakthroughs at the Intelligent Edge
u
Provided customers with the technical expertise, support, and resources to overcome engineering’s toughest challenges
u
Accelerated innovation engine to develop cutting-edge technologies designed to help make our world safer, more efficient, and sustainable. Opportunity pipeline value achieved record levels in FY’23
|
||||
Capitalizing
on Secular Trends
|
u
Automotive: Electrification, In-Cabin Experience, Advanced Driver Assistance System (Autonomous Mobility)
u
Industrial: Industry 4.0, Digital Healthcare, Space, Sustainable Energy
u
Communications: Advanced Connectivity and High Performance Computing
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||||
$12.3B
|
64.0%
|
31.1%
|
$6.55
|
$4.8B
|
||||||||||
Revenue
|
Gross Margins
|
Operating Margins
|
Diluted Earnings per Share
|
Operating Cash Flow
|
||||||||||
~90%
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72.5%
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48.9%
|
$10.09
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$3.6B
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||||||||||
Business-to-Business Revenue
|
Adjusted Gross Margins*
|
Adjusted Operating Margins*
|
Adjusted Diluted Earnings per Share*
|
Free Cash Flow*
|
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2
|
Highlights
|
u
Carbon Clean 200
|
u
Business Intelligence Group Sustainability Leadership Award 2023
|
u
Investor Business Daily’s 100 Best ESG Companies of 2022
|
||||||
u
2022 JUST Capital Workforce Equity and Mobility Ranking
|
u
2022 Forbes World’s Most Female Friendly Companies
|
u
Global 100 Most Sustainable Corporations by Corporate Knights 2022
|
||||||
u
2023 JUST Capital 100
|
u
50/50 Women on Boards-3+ Women on Company Boards 2022
|
u
Wall Street Journal’s 250 Best-Managed Companies of 2022
|
u
ENVIRONMENT AND SOCIAL
|
||||||||||||||||||||
u
Published our 2022 ESG Report
u
Mapped our ESG Report to GRI (Core Option), SASB, TCFD and the U.N.’s Sustainable Development Goals
u
Reported program updates to CDP Climate Change and Water Security, EcoVadis, and KnowTheChain
u
Published online our most recent EEO-1 reports
u
Set a new target to reduce overall water withdrawn for our operations by 50% normalized to production output by 2027
|
u
Continued to innovate and develop solutions with meaningful environmental benefits for our customers, including our Battery Management Solutions, Energy Storage Systems, precision monitoring for enabling industrial transformation, and leveraging our intelligent sensing systems to continue towards our environmental commitments
u
Remained signatories to the U.N. Global Compact and their campaign, Business Ambition for 1.5°C
u
Achieved ISO 14001 and ISO 45001 certification across all manufacturing sites globally
|
u
Continued to support STEM education programs, including through our collaboration with University of Massachusetts Lowell to create an RF/Microwave Learning Lab
u
Provided community grants and matched employee donations to support 1,300+ unique organizations through the Analog Devices Foundation
u
Achieved 7.2% absolute reduction in Scope 1 and 2 emissions versus 2019 baseline
u
Disclosed Scope 3 emissions, in line with our commitment to be Net Zero by 2050 or sooner
|
GOVERNANCE
|
||||||||||||||||||||
u
Continued to expand the capabilities of the Board of Directors by adding Mr. Stephen M. Jennings, who brings deep corporate governance and strategic experience to our Board of Directors and Dr. Peter B. Henry, who brings foreign affairs, global economics, and international finance experience to our Board of Directors
u
Enhanced the evaluation process of our Board of Directors and its committees, including leveraging the assistance of a third-party facilitator, to align with best governance practices
u
Unanimously appointed Mr. Jennings as Lead Independent Director to continue the Board of Directors’ practice of having a strong and effective independent partner to our CEO and Chair
|
u
Engaged with shareholders representing approximately 33% of our total shares outstanding, with a focus on ESG and compensation practices
u
Refreshed the charter of our management-led cross-functional Cybersecurity Steering Committee to more clearly define its purpose and responsibilities, including overseeing security governance, promoting and supporting cybersecurity best practices, reviewing and prioritizing cyber risks, monitoring potential cyber incidents, and establishing key mitigation initiatives
u
Specifically delegated oversight of cybersecurity matters to the Audit Committee
|
u
Enhanced our product diversion compliance programs by expanding our proactive monitoring and review processes to inhibit prohibited resale of our products and formed a team focused on gray market mitigation efforts
u
Enhanced our global data privacy and compliance programs, by expanding global compliance trainings, further harmonizing policies and procedures, updating data protection notices to all global employees, implementing enhanced due diligence for third-party partners, and expanding our ethics hotline capabilities
|
2024 Proxy Statement
|
3
|
![]()
ADI’s collaborative culture, internally and with customers and ecosystem partners, is the cornerstone of the breakthrough solutions we provide. As a values driven destination for the brightest minds, we’re home to a diverse array of insatiably curious and technical people who engineer good for our planet and society. We are committed to continuous learning and innovation in our technology and as a company, and that spirit drives us to keep building a great place to work around the world together.
|
![]() |
MARIYA TRICKETT
Chief People Officer
|
||||||
![]() |
Empower Innovation and Learning
|
Empowering our teams to innovate and learn across every level and function
|
Teams across departments come together to deliver experiences that quicken onboarding, build managerial skills, and ready employees for more complex roles. We prioritize on-the-job experiences as a way to build skills and drive learning.
To deepen our bench of leadership, we have focused on developing enterprise leaders through our Enterprise Leadership Program, as well as aligning on success criteria for leadership roles. Understanding capabilities and encouraging mobility are keys to a robust and diverse leadership bench.
We also work closely with our business unit leaders and human resources team to provide training that addresses technical skills, ADI’s development processes, and tools used throughout the organization in order for new team members to become productive quickly. More advanced training opportunities are available for team members that are looking to deepen or broaden their skill set.
|
||||||
Amplify Culture through Employee Experiences
|
Role modeling values and behaviors and listening and responding to employee feedback
|
We are intensely focused on amplifying our cultural attributes that drive our growth. We have launched focused culture programming, grounded in our values and behaviors, in support of achieving our vision and sustaining high performing teams.
Throughout the year, we conduct employee surveys and listening activities to gain feedback and learn more about ADI’s strengths as a workplace and opportunities for improvement. This enables us to take action and provide employees the tools they need to grow and prosper.
|
||||||
Foster Inclusion and Promote Equal Opportunity
|
Taking a holistic approach to equity and inclusion
|
We are launching a series of identity-based learning modules to help build cultural competency across the organization. Beginning with modules on neurodiversity, we are helping employees gain the knowledge needed to more effectively engage across their differences and unlock their collective potential.
We also remain committed to building leadership teams that reflect the diversity of our employees and the communities we serve. To support this ambition, we tailor development programs to meet the needs of historically marginalized communities.
|
||||||
Build the Workforce of the Future
|
Evolving our workforce skills to drive innovation and sustain a competitive advantage
|
Our engineering team members continue to run a Software Engineering Reskilling Program, specifically designed to address ADI’s evolving talent needs by expanding the skills of our technical workforce in the software domain.
We hired new key leaders having software and other leading technology experience and skills. Further, to enable ADI to become a system-level solutions provider, our learning and development team has created multiple training programs to expose our team members to new system level development processes and information about industry best practices. For example, our digital design verification program supports our initiative to develop digital components such as microprocessors and digital switches. In addition, we offer multiple software programs to enable team members to broaden their skill sets to address our customers’ growing need for integrated software solutions, including a robust data science, engineering, and analytics program to advance our understanding of the complex problems faced by our customers.
We are committed to employee growth and development, as well as building high-performing teams. This means providing essential trainings that prepare employees to lead teams today and grow the business tomorrow. Programs such as our Leading ADI Forward program are designed to help our leaders build relationships and drive our strategic vision throughout the organization.
|
||||||
4
|
Highlights
|
Addressing Inequity Through a Holistic and Global Approach
|
u
We continue to transform the way we operate so inclusion and equity remain an integrated part of how we do business. This means redesigning our talent practices to address systemic barriers and building a culture that confronts bias.
u
At a high level, our focus is on programs that target societal and organizational practices. From a societal perspective, we are establishing new partnerships and launching programs that increase access to STEM education for communities that are historically denied access. From an organizational perspective, we are revising our processes to mitigate bias and customizing our training programs to accelerate the development of underrepresented communities.
|
||||
Engaging and Empowering Employees
|
u
We have a growing list of Employee Networks that are a driving force behind our evolving culture. Comprised of over 3,200 members, our Networks foster community, build allyship, accelerate professional development, and impact organizational policy. Each has a formalized leadership team and structure, which includes an executive sponsor and annual goals.
u
Employee Network members are directly involved in the design of specialized hiring initiatives and the development of identity-based learning modules. This ensures that programs designed to address underrepresentation are co-created with individuals who represent those communities.
|
||||
Building Educational and Professional Partnerships
|
u
We continue to expand our outreach and support higher education, including engagement with one of the Historically Black Colleges and Universities (HBCU) that includes sponsoring a research project enabling students dedicated time to explore and innovate.
u
In addition, we continue our outreach to professional associations that serve underrepresented communities. We host educational talks and focus on skill building as a way to increase candidate capabilities and foster greater brand and STEM awareness.
|
||||
Enhancing and Supporting Diversity
|
u
We recognize that employees of different identities encounter different systemic and cultural challenges. Understanding these unique experiences allows us to create impactful learning programs that build community, drive performance, and advance gender and racial equity.
u
One example is Elevate, our flagship leadership development series for women. Employees in this program build new skills and expand their global networks through an exciting combination of action learning, mentorship, and sponsorship. The program places an emphasis on enhancing business insight, increasing customer focus, developing strategic mindsets, and improving situational adaptability. The program cohorts were thoughtfully assembled to include representation from technical, sales, and corporate functions across Asia, Europe, and North America.
|
||||
Ensuring Governance and Oversight
|
u
The Nominating and Corporate Governance Committee oversees ADI’s ESG policies, goals, and programs and receives quarterly updates on our progress against stated targets, as well as updates on topics such as stakeholder value, risks and opportunities, regulatory preparedness, ESG ratings, and key ESG focus areas. In addition, management regularly reports to our full Board of Directors on ESG topics, providing an update on key metrics and progress. Our Leadership Team, which includes our executive officers and any Senior Vice President reporting to the CEO, is engaged collectively on a semi-annual basis, and individual leaders provide ongoing sponsorship of core DEI initiatives, such as our partnership with an HBCU and a secondary school outreach program.
|
||||
2024 Proxy Statement
|
5
|
Proposal
|
Items of Business
|
Board
Recommendation
|
Where to
Find Details
|
||||||||
1 |
Election of 11 directors
|
FOR
each director nominee
|
|||||||||
2 |
Advisory approval of the compensation of our named executive officers
|
FOR
|
|||||||||
3 |
Ratification of the selection of Ernst & Young LLP as independent registered public accounting firm for ADI’s fiscal year ending November 2, 2024
|
FOR
|
|||||||||
4 |
Consider a shareholder proposal regarding simple majority vote, if properly presented at the Annual Meeting
|
AGAINST
|
|||||||||
What’s New
We continually review our corporate strategy and governance practices to ensure that ADI is in a position to consistently deliver on our commitment to sustaining a culture of innovation, collaboration, solid performance, and fiduciary responsibility. We believe providing a broader understanding of our perspectives on these items will be beneficial to you as you consider this year’s voting matters. Updated items include:
u
Continued to expand the capabilities of the Board of Directors by adding Mr. Jennings, who brings deep corporate governance and strategic experience to our Board of Directors, and Dr. Henry, who brings foreign affairs, global economics, and international finance experience to our Board of Directors
u
Enhanced the evaluation process of our Board of Directors and its committees, including leveraging the assistance of a third-party facilitator, to align with best governance practices
u
Unanimously appointed Mr. Jennings as Lead Independent Director to continue the Board of Directors’ practice of having a strong and effective independent partner to our CEO and Chair
u
Engaged with shareholders representing approximately 33% of our total shares outstanding, with a focus on ESG and compensation practices
u
Refreshed the charter of our management-led cross-functional Cybersecurity Steering Committee to more clearly define its purpose and responsibilities, including overseeing security governance, promoting and supporting cybersecurity best practices, reviewing and prioritizing cyber risks, monitoring potential cyber incidents, and establishing key mitigation initiatives
u
Enhanced our product diversion compliance programs by expanding our proactive monitoring and review processes to inhibit prohibited resale of our products and formed a team focused on gray market mitigation efforts
u
Enhanced our global data privacy and compliance programs by expanding global compliance trainings, further harmonizing policies and procedures, updating data protection notices to all global employees, implementing enhanced due diligence for third-party partners, and expanding our ethics hotline capabilities
u
Specifically designated oversight of cybersecurity matters to the Audit Committee
|
||
PROPOSAL 1
Election of 11 Directors
|
|||||
The Board of Directors recommends a vote
FOR
each director nominee.
|
u
See page
14
|
||||
6
|
Proxy Summary
|
![]() |
VINCENT ROCHE, 63
Director Since:
2013
Principal Occupation:
Chief Executive Officer and
Chair of the Board of Directors of Analog Devices, Inc. |
![]() |
LAURIE H. GLIMCHER, M.D., 72
Director Since:
2020
Principal Occupation:
Professor of Medicine at Harvard Medical School
and President and Chief Executive Officer of the Dana-Farber Cancer Institute
Committee Membership(s):
CTC
|
||||||||
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STEPHEN M. JENNINGS, 62
Lead Independent Director
Director Since:
2023
Principal Occupation:
Former Principal of Deloitte LLP
Committee Membership(s):
CTC, NCGC (Chair)
|
![]() |
KAREN M. GOLZ, 69
Director Since:
2018
Principal Occupation:
Former Global Vice Chair of Ernst & Young
Other Public Company Board(s): 2
Committee Membership(s):
AC (Chair)
|
||||||||
![]() |
ANDRÉ ANDONIAN, 61
Director Since:
2022
Principal Occupation:
Chief Executive Officer of Andonian
Advisory Pte. Ltd.
Other Public Company Board(s): 1
Committee Membership(s):
NCGC, CDC
|
![]() |
PETER B. HENRY, Ph.D., 54
Director Since:
2023
Principal Occupation:
Class of 1984 Senior Fellow at Stanford University’s Hoover Institution; and Senior Fellow at Stanford’s Freeman Spogli Institute for International Studies
Other Public Company Board(s): 2
Committee Membership(s):
AC
|
||||||||
![]() |
JAMES A. CHAMPY, 81
Director Since:
2003
Principal Occupation:
Former Vice President of the Dell/
Perot Systems business unit of Dell, Inc.
Committee Membership(s):
NCGC
|
![]() |
MERCEDES JOHNSON, 69
Director Since:
2021
Principal Occupation:
Former Chief Financial Officer of Avago Technologies (now Broadcom Inc.)
Other Public Company Board(s): 2
Committee Membership(s):
AC
|
||||||||
![]() |
EDWARD H. FRANK, Ph.D., 67
Director Since:
2014
Principal Occupation:
Executive Chair of Gradient Technologies
Other Public Company Board(s): 2
Committee Membership(s):
CTC (Chair), CDC (Chair)
|
![]() |
RAY STATA, 89
Director Since:
1965
Principal Occupation:
Co-Founder and Former Chair of the Board of Directors of Analog Devices, Inc.
|
||||||||
AC
Audit Committee
|
NCGC
Nominating and Corporate Governance Committee
|
|||||||
CTC
Compensation and Talent Committee
|
CDC
Corporate Development Committee
|
|||||||
![]() |
SUSIE WEE, Ph.D., 54
Director Since:
2019
Principal Occupation:
Former Vice President of Google
Committee Membership(s):
CTC
|
2024 Proxy Statement
|
7
|
67%
|
39 |
9 of 11
|
||||||
of independent director nominees added in the last 5 years
|
Board of Directors and Committee meetings held in fiscal year 2023
|
director nominees are independent
|
AGE
|
INDEPENDENT DIRECTOR NOMINEE TENURE
|
DIVERSITY | ||||||
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||||||
Average Age:
67
years
Median Age: 67 years
|
Average Independent Director Nominee Tenure: 4.9 years
|
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Anantha P. Chandrakasan
|
Susie Wee
|
Laurie H. Glimcher
|
Mercedes Johnson
|
André Andonian
|
Stephen M. Jennings | Peter B. Henry | ||||||||||||||
2019
|
2019
|
2020
|
2021
|
2022
|
2023 |
2023
|
8
|
Proxy Summary
|
EFFECTIVE BOARD LEADERSHIP, INDEPENDENT OVERSIGHT, AND STRONG CORPORATE GOVERNANCE
|
SHAREHOLDER RIGHTS AND ACCOUNTABILITY | ||||||||||
u
Majority of directors are independent
u
Average tenure of independent directors standing for re-election is 4.9 years
u
Regular executive sessions of independent directors
u
Clawback policy for CEO and other officers
u
Active engagement by our Board of Directors in overseeing talent and long-term succession planning for executives
|
u
Annual election of directors
u
Majority voting for directors in uncontested director elections
u
Proxy access bylaw
u
Annual Board of Directors and committee self-evaluations
u
No dual class of stock or controlling shareholder
|
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Winter |
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Spring |
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Summer |
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Fall | ||||||||||||||||||||||||||||
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u
Publish Annual Report and Proxy Statement
u
Conduct active outreach with top investors to discuss items to be considered at the annual meeting, if needed, given matters to be considered
u
Annual Meeting
|
u
Evaluate proxy season outcome and trends, corporate governance best practices, and regulatory developments
u
Publish annual ESG report to inform stakeholders, including investors, about recent developments relating to ESG matters
|
u
Conduct active outreach with top investors to understand their top priorities and solicit feedback on governance topics, including ESG and compensation
u
Share investor feedback with our Board of Directors
|
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2024 Proxy Statement
|
9
|
PROPOSAL 2
Advisory Approval of the Compensation of Our Named Executive Officers
|
|||||
The Board of Directors recommends a vote
FOR
this proposal.
|
u
See page
47
|
||||
Pay Element
|
Purpose
|
Time Period
|
Performance Measures
|
||||||||||||||
Base Salary
|
u
Attract and retain executive talent
|
u
Annual
|
u
None
|
||||||||||||||
Short-Term Variable Cash Incentive
|
u
Reward our executive officers for achieving short-term company financial objectives aligned with shareholder value creation
|
u
Annual
|
u
50%: year-over-year revenue growth (measured quarterly)
u
50%: quarterly OPBT margin
u
Minimum OPBT margin required for payout
|
||||||||||||||
Long-Term Equity
Incentives
|
CEO |
Other NEOs
|
u
Align executive officer and shareholder interest to drive superior relative TSR results
|
u
Cumulative three-year performance period
|
u
Relative TSR compared to comparator group, targeting above-median performance
u
Payouts capped at target if absolute TSR is negative
|
||||||||||||
Relative TSR PRSUs
|
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Financial Metric PRSUs
|
u
Align executive officer and shareholder interests with long-term profitability
|
u
One-year, two-year cumulative, and three-year cumulative performance periods
|
u
Non-GAAP operating profit
|
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RSUs
|
u
Attract and retain key executives
|
u
Four-year graded vesting
|
u
None
|
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10
|
Proxy Summary
|
2024 Proxy Statement
|
11
|
Compensation Best Practices
![]() ![]() ![]() ![]()
median of the
comparator
group
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||
12
|
Proxy Summary
|
PROPOSAL 3
Ratification of the Selection of Ernst & Young LLP as Independent Registered Public Accounting Firm for the Fiscal Year Ending November 2, 2024
|
|||||
The Board of Directors recommends a vote
FOR
this proposal
|
u
See page
83
|
||||
PROPOSAL 4
Shareholder Proposal
|
|||||
The Board of Directors recommends a vote
AGAINST
this proposal
|
u
See page
91
|
||||
2024 Proxy Statement
|
13
|
PROPOSAL 1
Election of Directors
Our Board of Directors unanimously recommends that you vote
FOR
the election of each of the below director nominees.
|
||
Name | Position(s) with ADI | ||||
Vincent Roche
|
Chief Executive Officer and Chair of the Board of Directors
|
||||
Stephen M. Jennings
|
Lead Independent Director
|
||||
André Andonian
|
Director
|
||||
James A. Champy
|
Director
|
||||
Edward H. Frank | Director | ||||
Laurie H. Glimcher | Director | ||||
Karen M. Golz | Director | ||||
Peter B. Henry
|
Director
|
||||
Mercedes Johnson
|
Director
|
||||
Ray Stata
|
Director
|
||||
Susie Wee | Director |
14
|
Board of Directors
|
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||||||||||||||
Anantha P. Chandrakasan
|
Susie Wee
|
Laurie H. Glimcher
|
Mercedes Johnson
|
André Andonian
|
Stephen M. Jennings | Peter B. Henry | ||||||||||||||
2019
|
2019
|
2020
|
2021
|
2022
|
2023 |
2023
|
Diversity of Director Nominees | Independence of Director Nominees | ||||||||||||||||
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4 of 11
Directors identify as female,
or 36%
|
While our Board of Directors does not have a specific diversity policy, our Corporate Governance Guidelines and Nominating and Corporate Governance Committee Charter provide that gender, racial, ethnic, and sexual orientation diversity, consistent with the requirement for relevant and diverse experience, skills, and industry familiarity, are important search criteria. Effective application of these criteria is reflected in the diverse composition of our Board of Directors.
|
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9 of 11
Directors are Independent, or 82%
|
Under Nasdaq Rules, a majority of the members of our Board of Directors must be independent directors. To be considered independent, a director must be independent as determined under applicable Nasdaq Rules, and in our Board of Directors’ judgment, the director must not have a relationship with ADI that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
|
||||||||||||||
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3 of 11
Directors identify as ethnically diverse, or 27%
|
|||||||||||||||||
2024 Proxy Statement
|
15
|
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Executive Leadership:
Experienced executive-level leadership of complex global businesses
|
5/11
|
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Industry:
Insight into key issues affecting ADI
|
9/11 |
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Innovation and Emerging Technologies:
Expertise and thought leadership relating to technological innovation in our industry and our end markets
|
10/11
|
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Corporate Governance/Public Company Board:
Knowledge of public company governance issues and policies to enhance Board practices
|
8/11
|
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Financial, Accounting, Auditing:
Experience preparing financial statements and capital market expertise
|
3/11
|
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International, Large Scale Global Operations, Manufacturing:
Insight into the many factors involved in overseeing management of ADI’s global footprint
|
8/11
|
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Government Affairs, Public Policy:
Expertise handling government affairs and public policy matters
|
3/11
|
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Strategy:
Experience in the development and implementation of strategic priorities
|
11/11
|
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Risk Management, Regulatory, Compliance:
Insight into risks facing ADI and a comprehensive approach to risk management
|
2/11
|
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Cybersecurity, Information Systems:
Experience overseeing cybersecurity programs or possessing a deep understanding of cyber threats to organizations
|
3/11
|
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Mergers and Acquisitions:
Experience evaluating strategic transactions
|
5/11
|
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ESG (Including Sustainability, Human Capital, Human Rights, and Diversity):
Knowledge of ESG topics impacting ADI
|
4/11
|
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16
|
Board of Directors |
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||||||||||||||||||||||||||||
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Executive Leadership | l | l | l | l | l | ||||||||||||||||||||||||||||||||
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Industry | l | l | l | l | l | l | l | l | l | ||||||||||||||||||||||||||||
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Innovation and Emerging Technologies | l | l | l | l | l | l | l | l | l | l | |||||||||||||||||||||||||||
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Corporate Governance/Public Company Board | l | l | l | l | l | l | l | l | |||||||||||||||||||||||||||||
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Financial, Accounting, Auditing | l | l | l | ||||||||||||||||||||||||||||||||||
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International, Large Scale Global
Operations, Manufacturing
|
l | l | l | l | l | l | l | l | |||||||||||||||||||||||||||||
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Government Affairs, Public Policy | l | l |
l
|
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Strategy | l | l | l | l | l | l | l | l | l | l | l | ||||||||||||||||||||||||||
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Risk Management, Regulatory, Compliance | l | l | |||||||||||||||||||||||||||||||||||
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Cybersecurity, Information Systems | l |
l
|
l | ||||||||||||||||||||||||||||||||||
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Mergers and Acquisitions | l | l | l | l | l | ||||||||||||||||||||||||||||||||
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ESG (including Sustainability, Human Capital, Human Rights, and Diversity)
|
l | l | l | l |
2024 Proxy Statement
|
17
|
Female | Male | Non-Binary |
Did Not
Disclose Gender |
|||||||||||
Part I: Gender Identity | ||||||||||||||
Directors
|
4
|
9
|
- | - | ||||||||||
Part II: Demographic Background | ||||||||||||||
African American or Black
|
- |
1
|
- | - | ||||||||||
Alaskan Native or Native American | - | - | - | - | ||||||||||
Asian
|
1
|
1
|
- | - | ||||||||||
Hispanic or Latinx | 1 | - | - | - | ||||||||||
Native Hawaiian or Pacific Islander | - | - | - | - | ||||||||||
White
|
2
|
7
|
- | - | ||||||||||
Two or More Races or Ethnicities | - | - | - | - | ||||||||||
LGBTQ+ | - | - | - | - | ||||||||||
Did Not Disclose Demographic Background | - | - | - | - |
Legend | ||||||||||||||
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||||||||||
Executive Leadership
|
Industry
|
Innovation and Emerging Technologies
|
Corporate Governance/Public Company Board
|
Financial, Accounting, Auditing
|
||||||||||
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International, Large Scale Global Operations, Manufacturing
|
Government Affairs, Public Policy
|
Strategy
|
Risk Management, Regulatory, Compliance
|
Cybersecurity, Information Systems
|
||||||||||
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|||||||||||||
Mergers and Acquisitions
|
ESG
|
18
|
Board of Directors |
![]()
Vincent Roche
Chief Executive Officer and Chair of the Board of Directors
|
||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND
Mr. Roche was elected as Chair of our Board of Directors in March 2022. Mr. Roche has served as our President since 2012, and was appointed CEO and elected as a director in May 2013. Mr. Roche began his career with us in 1988 and has served in key positions spanning corporate leadership, worldwide sales, strategic marketing, business development, and product management over his more than 35-year tenure. Mr. Roche was recognized by Forbes in 2019 as one of America’s Most Innovative Leaders while also being a recipient of the 2021 SFI St. Patrick’s Day Science Medal for his contributions in support of the ecosystems in Ireland.
KEY QUALIFICATIONS AND EXPERTISE
Mr. Roche brings to our Board of Directors insights based on his leadership roles and his deep knowledge of our products, markets, customers, culture, and organization.
OTHER PUBLIC COMPANY BOARDS
Current:
None
Past 5 Years: Acacia Communications, Inc. (until 2021) |
||||||||||||||
Age:
63
|
Director since:
2013
|
Committee(s):
None
|
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Stephen M. Jennings
Lead Independent Director Independent
|
||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND
Mr. Jennings is a retired senior Strategy Principal of Deloitte LLP (Deloitte), a professional services firm, a role that he served in from 2013 to his retirement in June 2023. During that time, Mr. Jennings also served as a member of the Deloitte U.S. Board of Directors and Deloitte Touche Tohmatsu’s global Board of Directors, each from 2019 to 2023. Before that, Mr. Jennings worked at Monitor Group, LLC, a global professional services firm that provided consulting services to corporations and governmental agencies, most recently serving as managing partner until the firm was acquired by Deloitte in 2013. Mr. Jennings is a certified member of the National Association of Corporate Directors (NACD).
KEY QUALIFICATIONS AND EXPERTISE
Mr. Jennings brings to our Board of Directors extensive experience in corporate governance, enterprise growth, innovation, mergers and acquisitions, organization transformation, and strategy across a diverse set of industries.
OTHER PUBLIC COMPANY BOARDS
Current:
None
Past 5 Years: None |
||||||||||||||
Age:
62
|
Director since:
2023
|
Committee(s):
Compensation and Talent; Nominating and Corporate Governance
|
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|||||||||||
2024 Proxy Statement
|
19
|
![]()
André Andonian
Independent
|
||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND
Mr. Andonian is Chief Executive Officer of Andonian Advisory Pte. Ltd., a consulting firm that he founded in March 2022. In addition, since September 2023, Mr. Andonian has served as Chair of Asia Pacific and Strategic Advisor at Flagship Pioneering, a biotechnology company. Mr. Andonian has served as Special Advisor - Senior Partner Emeritus at McKinsey & Company, a global management consulting company, since June 2022. Mr. Andonian was previously a Senior Partner at McKinsey & Company, most recently as managing partner of McKinsey Korea, advising clients across the firm’s Semiconductors, Advanced Electronics, Automotive & Assembly, Biotechnology, and Aerospace & Defense Practices from January 2021 until June 2022. He was previously managing partner of McKinsey Japan from January 2016 to December 2020.
KEY QUALIFICATIONS AND EXPERTISE
Mr. Andonian brings to our Board of Directors extensive experience in transforming companies into global leaders in the high-tech, advanced industries, aerospace, biotech, and basic materials sectors, and in the assessment and development of talent. Mr. Andonian also has deep global executive leadership experience, previously holding executive leadership roles at McKinsey across Europe, the United States, and Asia over a 30-year career. Further, Mr. Andonian brings significant experience working with senior leaders of companies around the world and across a multitude of industries on a broad range of strategic and operational issues, including driving board effectiveness.
OTHER PUBLIC COMPANY BOARDS
Current:
AEM Holdings Ltd. (SGX:AWK)
Past 5 Years: None |
||||||||||||||
Age:
61
|
Director since:
2022
|
Committee(s):
Nominating and Corporate Governance; Corporate Development
|
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|||||||||||
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James A. Champy
Independent
|
||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND
Mr. Champy retired in 2010 as Vice President of the Dell/Perot Systems business unit of Dell, Inc., a computer and technology services company. Mr. Champy was previously a Vice President and the Chairman of Consulting at Perot Systems Corporation, an informational technology services company, from September 1996 to November 2009. He served as a member of the board of directors of Perot Systems Corporation from September 1996 to February 2004. Mr. Champy is a Life Member of the MIT Corporation, the governing body of the Massachusetts Institute of Technology (MIT), and he also chairs the Dean’s Advisory Council for the MIT School of Engineering.
KEY QUALIFICATIONS AND EXPERTISE
Mr. Champy brings to our Board of Directors deep experience in the computer and technology services sectors and provides our Board of Directors with expertise in corporate strategy development and organizational acumen.
OTHER PUBLIC COMPANY BOARDS
Current:
None
Past 5 Years: None |
||||||||||||||
Age:
81
|
Director since:
2003
|
Committee(s):
Nominating and Corporate Governance
|
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|||||||||||
20
|
Board of Directors |
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Edward H. Frank, Ph.D.
Independent
|
||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND
Since September 2022, Dr. Frank has been the Executive Chair of Gradient Technologies, Inc., a security technologies startup, focused on identity and access management, and was co-founder and CEO of Cloud Parity Inc., a voice of the customer startup, from January 2014 through August 2016. From May 2009 to October 2013, Dr. Frank held the position of Vice President, Macintosh Hardware Systems Engineering at Apple Inc., a company that designs, manufactures, and markets electronic devices. Prior to his tenure at Apple, Dr. Frank served as Corporate Vice President, Research and Development, of Broadcom Corp. Dr. Frank was founding CEO of Epigram, Inc., a developer of integrated circuits and software for home networking, which Broadcom acquired in 1999, and was a Distinguished Engineer at Sun Microsystems, Inc. Since 2000, Dr. Frank has been a Trustee of Carnegie Mellon University and served as vice-chair from 2015 through 2021. Dr. Frank has served on the board of directors of Metallica’s All Within My Hands Foundation since July 2017, where he also served as Executive Director (pro bono) from July 2017 through December 2021. He is a member of the National Academy of Engineering and a Fellow of the IEEE.
KEY QUALIFICATIONS AND EXPERTISE
Dr. Frank brings to our Board of Directors substantial experience in the design, manufacture, sale, and marketing of semiconductors for a broad set of markets, including many of the markets we service and brings extensive executive leadership experience. Dr. Frank also brings significant cybersecurity experience to our Board of Directors.
OTHER PUBLIC COMPANY BOARDS
Current:
SiTime Corp.; Rocket Lab USA, Inc.
Past 5 Years: Cavium, Inc. (until 2018); Amesite, Inc. (until 2020); Quantenna Communications, Inc. (until 2018); Marvell Technology, Inc. (until 2023) |
||||||||||||||
Age:
67
|
Director since:
2014
|
Committee(s):
Compensation and Talent; Corporate Development
|
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|||||||||||
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Laurie H. Glimcher, M.D.
Independent
|
||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND
Dr. Glimcher has served as a Professor of Microbiology and Immunology at Harvard Medical School since May 2017, the Richard and Susan Smith Professor of Medicine at Harvard Medical School and Dana-Farber Cancer Institute since October 2016, an Attending Physician, Department of Cancer Immunology and Virology at Dana-Farber Cancer Institute since October 2016, and the President and Chief Executive Officer of the Dana-Farber Cancer Institute since September 2016. In addition to a number of senior leadership roles held at both Harvard Medical School and Harvard School of Public Health from 1984 to 2011 and from October 2016 to present, she also served as the Stephen and Suzanne Weiss Dean and Professor of Medicine of Weill Cornell Medicine and Provost for Medical Affairs of Cornell University from January 2012 to August 2016. She is a member of the board of trustees at the Dana-Farber Cancer Institute and a member of the U.S. National Academy of Sciences, the National Academy of Medicine, the American Academy of Arts and Sciences, and the American Philosophical Society.
KEY QUALIFICATIONS AND EXPERTISE
Dr. Glimcher brings to our Board of Directors scientific and public health expertise, as well as diversity of technical skills and experience managing large, complex organizations, and as a physician, scientist, and professor.
OTHER PUBLIC COMPANY BOARDS
Current:
None
Past 5 Years: Waters Corporation (until 2020); GlaxoSmithKline plc (until 2022) |
||||||||||||||
Age:
72
|
Director since:
2020
|
Committee(s):
Compensation and Talent
|
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|||||||||||
2024 Proxy Statement
|
21
|
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Karen M. Golz
Independent
|
||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND
Ms. Golz is a retired Partner of Ernst & Young LLP (EY), a public accounting firm, where she was Global Vice Chair, Japan from 2016 to 2017 and previously Global Vice Chair, Professional Practice from 2010 to 2016. Ms. Golz also served on EY’s Global Risk Management Executive Committee, which was charged with risk management across EY’s global network, from 2008 to 2016. Ms. Golz currently serves as Senior Advisor to The Boston Consulting Group’s Audit and Risk Committee, a role she has held since August 2017, and as a Principal for K.M. Golz Associates, LLC, a consulting services company, since August 2017. Ms. Golz also sits on the board of trustees of the University of Illinois Foundation. Ms. Golz is a NACD Board Leadership Fellow.
KEY QUALIFICATIONS AND EXPERTISE
Ms. Golz brings to our Board of Directors accounting and audit expertise, deep enterprise risk management experience, and extensive experience helping large organizations successfully navigate the complexities of international trade and regulation.
OTHER PUBLIC COMPANY BOARDS
Current: Aspen Technology, Inc.; iRobot Corporation Past 5 Years: None |
||||||||||||||
Age:
69
|
Director since:
2018
|
Committee(s):
Audit
|
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|||||||||||
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Peter B. Henry, Ph.D.
Independent
|
||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND
Dr. Henry has served as the Class of 1984 Senior Fellow at Stanford University’s Hoover Institution and Senior Fellow at Stanford’s Freeman Spogli Institute for International Studies since September 2022. Previously, Dr. Henry served at New York University’s Leonard N. Stern School of Business as William R. Berkley Professor of Economics and Finance from January 2018 through August 2022 and as Dean from January 2010 through December 2017. Before that, Dr. Henry was the Konosuke Matsushita Professor of International Economics at the Stanford University Graduate School of Business. Dr. Henry currently serves as Chair of the Board of the National Bureau of Economic Research and is a member of the Council on Foreign Relations. He previously served on the Boards of Directors of General Electric Company, Kraft Foods Inc., and Kraft Foods Group, Inc. as well as the Economic Club of New York. In addition, Dr. Henry leads the Ph.D. Excellence Initiative (PhDEI), a post-baccalaureate program designed to address underrepresentation in economics by mentoring exceptional students from underrepresented backgrounds interested in pursuing doctoral studies in the field. For his founding and leadership of the PhDEI, Dr. Henry received the 2022 Impactful Mentoring Award from the American Economic Association.
KEY QUALIFICATIONS AND EXPERTISE
Dr. Henry brings to our Board of Directors extensive foreign affairs, global economics, and international finance experience.
OTHER PUBLIC COMPANY BOARDS
Current: Citigroup, Inc.; Nike, Inc. Past 5 Years: None |
||||||||||||||
Age:
54
|
Director since:
2023
|
Committee(s):
Audit
|
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|||||||||||
22
|
Board of Directors |
![]()
Mercedes
Johnson
Independent
|
||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND
Ms. Johnson served as interim Chief Financial Officer of Intersil Corporation, a semiconductor company, from April 2013 to September 2013, as Vice President and Chief Financial Officer at Tri Alpha Energy, Inc. (now TAE Technologies, Inc.), a fusion power company, from 2010 to 2011, and as Senior Vice President and Chief Financial Officer of Avago Technologies Limited (now Broadcom Inc.), a semiconductor manufacturing company from December 2005 to August 2008. Prior to joining Avago, Ms. Johnson was Senior Vice President, Finance, of Lam Research Corporation, a supplier of wafer fabrication equipment and related services to the semiconductor industry, from June 2004 to January 2005 and Chief Financial Officer of Lam from May 1997 to May 2004.
KEY QUALIFICATIONS AND EXPERTISE
Ms. Johnson brings to our Board of Directors extensive executive experience in finance, accounting, corporate development, corporate governance, management, and operations. Ms. Johnson provides our Board of Directors with valuable industry experience as a former senior financial executive at semiconductor and semiconductor equipment companies as well as numerous directorships at public global technology companies.
OTHER PUBLIC COMPANY BOARDS
Current: Teradyne, Inc.; Synopsys, Inc. Past 5 Years: Juniper Networks, Inc. (until 2019); Micron Technology, Inc. (until 2019) ; Maxim Integrated Products, Inc. (until 2021); Millicom International Cellular SA (until 2023) |
||||||||||||||
Age:
69
|
Director since:
2021
|
Committee(s):
Audit
|
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|||||||||||
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Ray Stata
|
||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND
Mr. Stata is our co-founder and served as an executive officer from our inception in 1965 until April 2012, including as our CEO from 1973 to November 1996 and as our President from 1971 to November 1991. Mr. Stata also served as the Chair of our Board of Directors from 1973 until March 2022.
KEY QUALIFICATIONS AND EXPERTISE
Mr. Stata brings to our Board of Directors nearly 60 years of experience and leadership in the semiconductor industry, including as our founder, our former Chair of the Board of Directors for 48 years, and our former President for 20 years.
OTHER PUBLIC COMPANY BOARDS
Current: None Past 5 Years: None |
||||||||||||||
Age:
89
|
Director since:
1965
|
Committee(s):
None
|
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|||||||||||
2024 Proxy Statement
|
23
|
![]()
Susie Wee, Ph.D.
Independent
|
||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND
Dr. Wee served as a Vice President at Google, a multinational technology company, from April 2022 to March 2023. From November 2019 to August 2021, Dr. Wee served as Senior Vice President and General Manager of DevNet and CX Ecosystem Success at Cisco Systems Inc., a technology company. Dr. Wee founded and led DevNet, Cisco’s developer program, beginning in October 2013. Dr. Wee began working at Cisco in April 2011, and held leadership roles including Senior Vice President & Chief Technology Officer of DevNet from October 2018 to November 2019, Vice President & Chief Technology Officer of DevNet from October 2013 to October 2018, Vice President & Chief Technology Officer of Networked Experiences from October 2012 to October 2013, and Vice President & Chief Technology and Experience Officer of Cisco’s Collaboration Technology Group from April 2011 to October 2012. Previously, Dr. Wee had a 15-year career at Hewlett Packard Enterprise Company, a technology company, where she held a number of technical and leadership roles, including Vice President and General Manager of the HP Experience Software Business and Lab Director at HP Labs. Dr. Wee is an IEEE fellow and serves on the visiting committee of the MIT Electrical Engineering and Computer Science department.
KEY QUALIFICATIONS AND EXPERTISE
Dr. Wee brings to our Board of Directors extensive experience in information technology and application development, and an established track record of driving software innovation at global technology companies.
OTHER PUBLIC COMPANY BOARDS
Current: None Past 5 Years: None |
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Age:
54
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Director since:
2019
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Committee(s):
Compensation and Talent
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24
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Board of Directors |
Recommendation
|
In considering whether to recommend any candidate for inclusion in the Board of Directors’ slate of recommended director nominees, including candidates recommended by shareholders, the Nominating and Corporate Governance Committee will apply the criteria set forth in our Corporate Governance Guidelines. These criteria include the candidate’s integrity, business acumen, experience, commitment, and diligence; the presence of any conflicts of interest; and the ability of the candidate to act in the interests of all shareholders.
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Diversity
|
The Nominating and Corporate Governance Committee seeks nominees with a broad diversity of experience, professions, skills, geographic representation, and backgrounds. The Nominating and Corporate Governance Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. ADI believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge, and abilities that will allow our Board of Directors to fulfill its responsibilities. While we do not have a policy regarding diversity of our Board members, the Nominating and Corporate Governance Committee Charter provides that gender, racial, ethnic, and sexual orientation diversity are important search criteria, in addition to relevant experience, skills, and industry familiarity. Effective application of these criteria is reflected in the diverse composition of our Board of Directors.
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Evaluation
|
The process followed by the Nominating and Corporate Governance Committee to identify and evaluate candidates includes requests to members of our Board of Directors and others for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by members of the Nominating and Corporate Governance Committee and the Board of Directors. From time to time, the Nominating and Corporate Governance Committee may also seek input from director search firms for identification and evaluation of candidates. Assuming that appropriate biographical and background material is provided for candidates recommended by shareholders on a timely basis, the Nominating and Corporate Governance Committee will evaluate director candidates recommended by shareholders by following substantially the same process, and applying substantially the same criteria, as it follows for director candidates submitted by members of our Board of Directors. Each of Mr. Jennings and Dr. Henry was introduced by a director and, with the recommendation of the Nominating and Corporate Governance Committee, was appointed to our Board of Directors effective June 4, 2023 and December 5, 2023, respectively, and is included in the slate of director nominees nominated by the Board of Directors for election as a director at the Annual Meeting.
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2024 Proxy Statement
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25
|
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At ADI, we’re committed to governance best practices and robust risk oversight. We create value in line with our strategy to lead the Intelligent Edge with an ethical culture at our core. Identification and mitigation of key risks is a focus for both our Leadership Team and our Board of Directors, who receive regular updates on key risks across the company. This is simply how we do business.
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JANENE ASGEIRSSON
Chief Legal Officer, Chief Risk
Officer, and Secretary
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Policy/Practice | Summary | ||||
Corporate Governance Guidelines
|
Our Board of Directors has adopted Corporate Governance Guidelines for ADI that establish a common set of expectations to assist our Board of Directors and its committees in performing their duties. Our Board of Directors reviews these guidelines at least annually and updates them as necessary to reflect changing regulatory requirements and evolving practices.
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Declassified Board of Directors
|
Our bylaws provide that each director will serve for a term ending on the date of the annual meeting following the one at which such director was elected.
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Majority Voting for Election of Directors
|
Our bylaws provide for a majority voting standard in uncontested director elections, so a director nominee is elected to our Board of Directors if the votes “for” that director exceed the votes “against” (with abstentions and broker non-votes not counted as for or against the election). If a director nominee does not receive more for votes than against votes, the director must offer his or her resignation, which our Board of Directors must determine whether to accept and publicly disclose that determination.
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Executive Sessions
|
At least twice per year, our Board of Directors holds executive sessions with our independent, non-employee directors, as defined under the Nasdaq Rules. Our Lead Independent Director, Mr. Jennings and prior to that Mr. Champy, presides at these independent director executive sessions. In addition, the committees of our Board of Directors also regularly hold executive sessions without management present and with their advisors.
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No Hedging and No Pledging Policy
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We prohibit all hedging transactions or short sales involving ADI securities by our directors and employees, including our executive officers. Since January 2013, we have prohibited our directors and executive officers from holding any ADI securities in a margin account, and from any future pledging of their ADI securities as collateral for a loan.
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Equity Award Grant Date Policy
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We do not time or select the grant dates of any stock options or stock-based awards in coordination with our release of material non-public information, nor do we have any program, plan or practice to do so. In addition, our Compensation and Talent Committee has adopted specific written policies regarding the grant dates of equity awards made to our directors, executive officers and employees. See
Director Compensation
and
Equity Award Grant Date Policy
below for more information.
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26
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Corporate Governance |
Policy/Practice | Summary | ||||
Executive Stock Ownership Guidelines
|
Under our guidelines, the target stock ownership levels are five times annual base salary for the CEO and three times annual base salary for other executive officers and any Senior Vice President reporting to the CEO, which we collectively refer to as, the Leadership Team. The CEO has four years from the date of his appointment as CEO to achieve his targeted level. Members of the Leadership Team other than the CEO have five years from the date he or she becomes part of the Leadership Team to achieve their targeted level. Shares subject to unexercised options, whether or not vested, and unvested PRSUs whose performance have not yet been certified by the Compensation and Talent Committee will not be counted for purposes of satisfying these guidelines. Restricted stock units (RSUs), restricted stock (whether or not vested), and unvested PRSUs whose performance has been certified by the Compensation and Talent Committee are counted for purposes of satisfying these guidelines. All members of the Leadership Team, other than Mr. Lee, who first joined ADI in fiscal year 2023, are in compliance with our stock ownership guidelines. Mr. Lee is expected to be in compliance with our stock ownership guidelines within the first five years of his appointment to the Leadership Team.
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Compensation Recovery Policy
|
Our compensation recovery policy provides that in the event of an accounting restatement due to the material noncompliance of ADI with any financial reporting requirement under the U.S. federal securities laws, the company will attempt to recover from our CEO and other officers (as defined in Rule 16a-1(f) under the Securities and Exchange Act of 1934, as amended (Exchange Act)), the excess of the amount of incentive-based compensation received by such officer during the three completed fiscal years immediately preceding the required restatement date over the amount of incentive-based compensation that otherwise would have been received had it been determined based on the restated amounts.
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Proxy Access Right
|
Our bylaws allow shareholders that meet standard eligibility requirements to nominate and include in our proxy statement director candidates for election.
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Code of Business Conduct and Ethics
|
We have a Code of Business Conduct and Ethics, which details our commitment to conducting business ethically, in compliance with the law, and in a way that reflects our deeper values. Our Code of Business Conduct and Ethics details our commitment to safeguarding personal data, explains our whistleblower reporting process, and is designed to be consistent with best practices. Our Code of Business Conduct and Ethics provides transparency on our enhanced whistleblower process. Specifically, we affirm our commitment to a consistent and transparent review process, prompt and thorough investigations, assignment of neutral investigators, communication about investigation outcomes, and implementation of appropriate corrective actions.
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Code of Corporate Social Responsibility
|
Our Code of Corporate Social Responsibility details ADI’s policies for itself and its suppliers in the areas of labor and human rights, health and safety, environment, ethics, management systems and data privacy.
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Director Education
|
We encourage our directors to attend director education programs and provide educational opportunities to our directors through a variety of platforms. We reimburse the costs of attending such programs. We also provide members of our Board of Directors a membership to the National Association of Corporate Directors. Further, we include educational topics regularly at our scheduled Board of Directors’ meetings. During such sessions, an outside party presents on a topic that is relevant to our business and strategic objectives, and of interest to our Board of Directors.
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2024 Proxy Statement
|
27
|
In accordance with best practices to ensure independent leadership, the Lead Independent Director has significant responsibilities, including:
u
Leadership of executive sessions of the independent directors or other meetings at which the Chair is not present;
u
Authority to call meetings of the independent directors;
u
Coordinating with the Chair to call Board of Directors’ meetings;
u
Overseeing the annual Board of Directors’ evaluation process;
u
Serving as a liaison between the Chair and the independent directors, as required;
u
Coordinating with the Chair to set and approve the Board of Directors’ meeting schedule and agenda to assure sufficient time for discussion of all agenda items;
u
Determining the appropriate materials to be provided to the Board of Directors;
u
Serving as the focal point for shareholder communications with the independent directors and requests for consultation addressed to independent members of the Board of Directors;
u
The ability to retain outside professionals on behalf of our Board of Directors as our Board of Directors may determine is necessary or appropriate; and
u
Such other functions as our Board of Directors may direct from time to time.
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28
|
Corporate Governance |
Audit
Committee
Members
(1)
Karen M. Golz (Chair)
Anantha Chandrakasan (2)
Peter B. Henry
(3)
Mercedes Johnson
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Meetings in 2023:
9
|
PRINCIPAL RESPONSIBILITIES
The primary purpose of the Audit Committee is to assist our Board of Directors’ oversight of:
u
The integrity of our financial statements, including regulatory requirements to the extent they pertain to financial matters;
u
The qualifications and independence of our independent registered public accounting firm;
u
The performance of our internal audit function and independent registered public accounting firm;
u
The process relating to internal enterprise risk management, control systems, and review of related person transactions;
u
Our capital allocation and structure, including potential issuance of debt and equity securities, credit agreements, letters of credit, guarantees and other financial instruments, investment policy, dividends, stock splits, and stock repurchases;
u
Our significant risks or exposures;
u
Our cybersecurity and information security programs, practices, and risk mitigation efforts;
u
Legal, compliance, and regulatory matters that could have a significant impact on our financial statements; and
u
Our financial outlook and plans for financing our working and long-term capital requirements.
Our Board of Directors has determined that each of Mses. Golz and Johnson qualifies as an “audit committee financial expert” under the rules of the SEC, and that each of Mses. Golz and Johnson and Drs. Chandrakasan and Henry is independent as defined under the Nasdaq Rules and the independence requirements under Rule 10A-3(b)(1) of the Exchange Act. In addition, our Board of Directors has determined that each member of the Audit Committee is able to read and understand financial statements, including ADI’s consolidated balance sheet and its consolidated statements of income, comprehensive income, shareholders’ equity and cash flows, and related notes as required under the Nasdaq Rules. Our Board of Directors has certified that it has at least one member of the Audit Committee who has past employment experience in finance or accounting as required by the Nasdaq Rules.
The responsibilities of our Audit Committee and its activities during fiscal year 2023 are described in the Report of the Audit Committee below.
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2024 Proxy Statement
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29
|
Compensation and Talent
Committee
Members
Edward H. Frank (Chair)
Laurie H. Glimcher Stephen M. Jennings
(1)
Susie Wee ![]()
Meetings in 2023:
10
|
PRINCIPAL RESPONSIBILITIES
The primary responsibilities of the Compensation and Talent Committee are to:
u
Evaluate and set the compensation of our CEO and Leadership Team;
u
Make recommendations to our Board of Directors regarding the compensation of our directors;
u
Review, and make recommendations to our Board of Directors with respect to, incentive compensation plans and equity-based plans, and exercise all rights, authority, and functions with respect to such plans;
u
Oversee our policies, strategies, and programs relating to human capital management, including those with respect to diversity equity, and inclusion, talent recruitment and retention, employee engagement, pay equity practices, workplace health and safety and cultural initiatives;
u
Oversee management of the risks associated with our compensation practices and policies; and
u
Oversee the evaluation and succession planning and development programs for senior executives.
Our Board of Directors has determined that each of Drs. Frank, Glimcher, and Wee and Mr. Jennings is independent as defined under the Nasdaq Rules and the independence requirements under Rule 10C-1 of the Exchange Act.
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30
|
Corporate Governance |
Nominating and Corporate Governance Committee
Members
(1)
Stephen M. Jennings (Chair)
(2)
André Andonian
James A. Champy (2)
Kenton J. Sicchitano
(3)
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Meetings in 2023:
5
|
PRINCIPAL RESPONSIBILITIES
The primary responsibilities of the Nominating and Corporate Governance Committee are to:
u
Identify individuals qualified to become members of our Board of Directors consistent with criteria approved by the Board of Directors;
u
Recommend to the Board of Directors the persons to be nominated by the Board of Directors for election as directors at any meeting of shareholders and the persons to be appointed by the Board of Directors to fill any vacancies on the Board of Directors;
u
In connection with Board of Director succession and refreshment practices, review with the Board of Directors, on an annual basis, the requisite skills and criteria for new directors as well as the composition of the Board of Directors as a whole;
u
Recommend to the Board of Directors the directors to be appointed to each committee of the Board of Directors;
u
Develop and recommend to the Board of Directors a set of corporate governance principles;
u
Oversee the evaluation, background, vetting, orientation, and training of the members of the Board of Directors;
u
Oversee our Code of Business Conduct and Ethics;
u
Oversee and periodically review ADI’s ESG policies, goals, and programs;
u
Oversee and periodically review policies and practices in connection with governmental relations, public policy, and related expenditures; and
u
Oversee risks associated with its areas of responsibility.
Our Board of Directors has determined that each of Messrs. Jennings, Andonian, Champy, and Sicchitano is independent as defined under the Nasdaq Rules.
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2024 Proxy Statement
|
31
|
Corporate Development Committee
Members
(1)
Edward H. Frank (Chair)
(2)
André Andonian
Anantha P. Chandrakasan (3) ![]()
Meetings in 2023:
6
|
PRINCIPAL RESPONSIBILITIES
The primary responsibility of the Corporate Development Committee is to review and make recommendations to the Board of Directors at each full meeting of the Board of Directors, with respect to:
u
Strategic plans, transactions, and investments, including mergers, acquisitions, and divestitures; and
u
The results, performance, and financial impact of material transactions.
All matters approved by the Corporate Development Committee are recommended to and also approved by our Board of Directors.
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32
|
Corporate Governance |
Development of Annual Evaluation Process
Each December, our Lead Independent Director, along with our CEO and Chair and our Chief Legal Officer, discuss the Board of Directors’ evaluation process for the year, considering evolving best practices.
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Written Questionnaires
Each director undertakes an evaluation of the Board of Directors and each of its committees.
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One-on-One Discussions
Our Lead Independent Director or another member of our Nominating and Corporate Governance Committee, working with our Chief Legal Officer, also has conversations with each member of our Board of Directors designed to assess the effectiveness of our Board of Directors, as well as each director’s individual performance and competencies and skills they bring to the Board of Directors.
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Evaluation of Results
Following our annual meeting of shareholders each year, our Lead Independent Director provides summaries of the evaluations to the Board of Directors and engages in a robust discussion with Board members on Board effectiveness and engagement.
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2024 Proxy Statement
|
33
|
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BOARD OF DIRECTORS
u
Receives regular reports from members of senior management on areas of material risk to ADI. Specifically, our Chief Risk Officer, who oversees internal enterprise risk management programs and chairs our Enterprise Risk Management Committee, provides regular reports to our full Board of Directors regarding our management of all enterprise and operational risks and our enterprise risk management program, with periodic updates on focus areas, such as cybersecurity.
u
Receives regular updates from our Audit Committee, Compensation and Talent Committee, Corporate Development Committee, and Nominating and Corporate Governance Committee, which provide our Board of Directors with thorough insight about how ADI manages risk.
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AUDIT COMMITTEE
u
Oversees ADI’s risk assessment and risk management programs, especially as they apply to ADI’s financial statement integrity and reporting and internal controls.
u
Receives regular reports from our Senior Director of Internal Audit on internal audit matters and from our Chief Risk Officer on risk management matters.
u
Receives quarterly updates from our Chief Information Officer and Chief Information Security Officer on key IT projects, enterprise cybersecurity programs, and data protection risks, and mitigation related to such risks.
u
Evaluates capital allocation and structure, including potential issuance of debt and equity securities, credit agreements, other financial instruments, investment policy, dividends, stock splits, and stock repurchases.
u
Reviews our cybersecurity and information security programs, practices, and risk mitigation efforts.
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COMPENSATION AND TALENT COMMITTEE
u
Oversees ADI’s executive compensation program and non-employee director compensation practices.
u
Oversees ADI’s policies, strategies, and programs relating to human capital management.
u
Oversees the evaluation and succession planning and development programs for senior executives.
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NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
u
Leads the Board of Directors with respect to the adequacy of ADI’s governance structure and process of succession planning for our Board of Directors.
u
Oversees ADI’s ESG programs, including reviewing ADI’s sustainability initiatives and goals as well as our progress toward achieving those goals.
u
Oversees and periodically reviews policies and practices in connection with governmental relations, public policy, and related expenditures.
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CORPORATE DEVELOPMENT COMMITTEE
u
Evaluates strategic plans, transactions, and investments, including mergers, acquisitions, and divestitures.
|
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LEADERSHIP TEAM AND MANAGEMENT
u
Our Leadership Team and our CEO and Chair have ownership for risk management, and risk governance is managed by our Enterprise Risk Management Committee, a management-led, cross-functional committee, which is chaired by our Chief Risk Officer.
u
Our Enterprise Risk Management Committee works closely with our Leadership Team, including our CEO and Chair, to identify and mitigate identified risks.
u
Our Chief Risk Officer, and other members of management, report to the Board of Directors (or the appropriate committee as applicable) regarding risk identification, management, and mitigation strategies.
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34
|
Corporate Governance |
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BOARD OF
DIRECTORS |
AUDIT
COMMITTEE |
COMPENSATION
AND TALENT COMMITTEE |
NOMINATING
AND CORPORATE GOVERNANCE COMMITTEE |
CORPORATE
DEVELOPMENT COMMITTEE |
ENTERPRISE
RISK MANAGEMENT COMMITTEE
Chaired by our
Chief Risk Officer |
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2024 Proxy Statement
|
35
|
36
|
Corporate Governance |
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Winter |
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Spring |
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Summer |
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Fall | ||||||||||||||||||||||||||||
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u
Publish Annual Report and Proxy Statement
u
Conduct active outreach with top investors to discuss items to be considered at the annual meeting, if needed, given matters to be considered
u
Annual Meeting
|
u
Evaluate proxy season outcome and trends, corporate governance best practices, and regulatory developments
u
Publish annual ESG report to inform stakeholders, including investors, about recent developments relating to ESG matters
|
u
Conduct active outreach with top investors to understand their top priorities and solicit feedback on governance topics, including ESG and compensation
u
Share investor feedback with our Board of Directors
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WHAT WE DISCUSSED | |||||||||||
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During fiscal year 2023, as part of our annual outreach program, we reached out to shareholders that collectively represented approximately 48% of our total shares outstanding and proxy advisory firms, with an invitation to have discussions with their corporate governance teams.
|
Topics covered in these meetings included:
u
Executive compensation, including equity awards
u
Corporate governance matters, including Board structure and refreshment
u
Other ESG topics, including resiliency, climate, value chain management, human rights, risk management, sustainability programs, diversity, equity, and inclusion, and human capital management
|
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Shareholders representing approximately 33% of our total shares outstanding (up from approximately 30% in fiscal year 2022) and proxy advisory firms accepted our engagement invitation.
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The Chair of our Compensation and Talent Committee participated in meetings with shareholders representing approximately 22% of our total shares outstanding and in meetings with proxy advisory firms.
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These meetings included members of our legal, ESG, compensation, diversity, equity, and inclusion, and investor relations organizations.
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2024 Proxy Statement
|
37
|
WHAT WE HEARD | WHAT WE DID | |||||||
Topic | Feedback |
Approach for Fiscal Year 2023 and Beyond
|
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EXECUTIVE COMPENSATION
|
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Design of Program Generally
|
u
Shareholders were generally pleased with the overall design and framework of our executive compensation program and recommended that we continue to tie compensation to challenging performance goals.
u
Shareholders noted that they prefer compensation programs in which the majority of compensation is tied to performance.
|
u
Did not make significant changes to overall design and framework of our executive compensation program.
u
Increased the weighting of our CEO and Chair, Mr. Roche’s, annual long-term incentive compensation that is tied to challenging long-term performance goals to 75%, up from 65% in fiscal year 2022.
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New Hire Award to NEO
|
u
While some shareholders expressed a concern with the value of the new hire award granted during fiscal year 2022 to one of our NEOs, most shareholders understood the rationale behind the new hire award and appreciated the disclosure in our 2023 Proxy Statement and additional supplemental proxy materials.
|
u
Did not grant any special off cycle awards during fiscal year 2023 and enhanced our disclosure explaining individual executive compensation decisions and rationale in this Proxy Statement.
u
To the extent the Compensation and Talent Committee and Board of Directors determine that it is in our best interest to grant similar awards in the future, we will transparently describe the rationale and decision-making process.
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Design of Equity Awards
|
u
Some shareholders asked why we set one-, two-, and three-year cumulative targets for our three-year Financial Metric PRSUs.
u
A few shareholders recommended increasing the difficulty of achievement for target performance of our Relative TSR PRSUs.
|
u
Our compensation programs are designed to support our long-term business objectives. The Financial Metric PRSUs cliff vest after the third year, so the executive will only receive a payout after the cumulative long-term results are determined. The Compensation and Talent Committee believes that setting one-, two-, and three-year cumulative targets provides better line of sight and focus to the participants to achieve our long-term objectives and enables the Compensation and Talent Committee to set meaningful targets that do not quickly become obsolete and lose their incentive characteristics.
u
Increased the percentile achievement required for target performance of our Relative TSR PRSUs to the 55th percentile, up from the 50th percentile, beginning with the Relative TSR PRSUs granted in fiscal year 2023.
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38
|
Corporate Governance |
WHAT WE HEARD | WHAT WE DID | |||||||
Topic | Feedback |
Approach for Fiscal Year 2023 and Beyond
|
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EXECUTIVE COMPENSATION
|
||||||||
Compensation Linked to ESG
|
u
Shareholders asked if compensation elements are linked to ESG metrics.
|
u
ESG is more than just an initiative at ADI – it is critical to our strategy. Our Leadership Team understands the close relationship between ESG, financial performance, and long-term sustainable growth and incorporates it into our strategy. While the Compensation and Talent Committee continues to evaluate whether to link compensation elements to ESG metrics, it determined to make no changes during fiscal year 2023 given the intense company focus on ESG performance as part of its short- and long-term strategy. The financial metrics underlying our incentive compensation and PRSUs not only drive our Leadership Team to achieve those specified financial metrics, but also ESG performance given the strong alignment between the two.
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CORPORATE GOVERNANCE
|
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Combined CEO and Chair Role
|
u
Shareholders appreciated that our Board of Directors enhanced the responsibilities of the Lead Independent Director under our Corporate Governance Guidelines.
|
u
Our Board of Directors believes the combined CEO and Chair role continues to be the appropriate structure given our strategic objectives.
|
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Board Refreshment and Tenure
|
u
Shareholders were interested in our Board of Directors’ refreshment practices and skills.
|
u
Our Board of Directors continues its focus on refreshment practices to align with our strategic visions and objectives, including welcoming Mr. Jennings to the Board of Directors in June 2023 and Dr. Henry in December 2023. Mr. Jennings brings significant experience in corporate governance, enterprise growth, innovation, mergers and acquisitions, organization transformation, and strategy across a broad set of industries to our Board of Directors. Dr. Henry brings foreign affairs, global economics, and international finance experience to our Board of Directors.
u
In January 2024, our Board of Directors unanimously appointed Mr. Jennings as our Lead Independent Director, continuing the Board of Directors’ practice of having a strong and effective independent partner to our CEO and Chair.
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ESG MATTERS
|
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ESG Report and Targets
|
u
Shareholders commended our ESG practices and reporting, including enhanced transparency and ambitious environmental targets, but expressed a desire to see all metrics in one place.
|
u
Continued to enhance our disclosure in our 2022 ESG Report issued in July 2023, adding robust and consolidated disclosure capturing all of our ESG metrics in one table.
u
Added a new target to reduce overall water withdrawn for our operations by 50% normalized to production output.
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Supply Chain and Product Diversion
|
u
Shareholders inquired about our supply chain and product diversion compliance programs and practices.
|
u
Enhanced our product diversion compliance programs by expanding our proactive monitoring and review processes to inhibit prohibited resale of our products and formed a team focused on gray market mitigation efforts.
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2024 Proxy Statement
|
39
|
40
|
Corporate Governance |
2024 Proxy Statement
|
41
|
Compensation Element | Annual Cash Compensation | ||||||||||
Board Chair Retainer
|
$ | 250,000 |
(1)
|
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Board Member Retainer
|
$ | 90,000 |
|
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Lead Independent Director Retainer
|
$ | 40,000 |
(2)
|
Annual Cash Compensation | |||||||||||||||||
Committee | Chair | Member | |||||||||||||||
Audit Committee | $30,000 | $15,000 | |||||||||||||||
Compensation and Talent Committee | $20,000 | $10,000 | |||||||||||||||
Nominating and Corporate Governance Committee | $20,000 | $10,000 | |||||||||||||||
Corporate Development Committee
|
$15,000 |
|
$10,000 |
|
Annual Equity Grant | $ Value of Annual Equity Grant | ||||
Restricted Stock Unit Grant
|
$225,000 |
42
|
Director Compensation |
Name
(1)
|
Fees Earned or
Paid in Cash ($) (2) |
Stock Awards
($) (3)(4) |
All Other
Compensation ($) |
Total
($) |
|||||||||||||
Stephen M. Jennings
(5)
|
40,342 | 167,202 | — | 207,544 | |||||||||||||
André Andonian
|
110,000 | 225,019 | — | 335,019 | |||||||||||||
James A. Champy
|
150,000 | 225,019 | — | 375,019 | |||||||||||||
Anantha P. Chandrakasan | 113,247 | 225,019 | — | 338,265 | |||||||||||||
Tunç Doluca
(6)
|
32,143 | — | — | 32,143 | |||||||||||||
Bruce R. Evans
(6)
|
41,071 | — | — | 41,071 | |||||||||||||
Edward H. Frank
|
120,637 | 225,019 | — |
|
345,656 | ||||||||||||
Laurie H. Glimcher | 100,000 | 225,019 | — | 325,019 | |||||||||||||
Karen M. Golz | 120,000 | 225,019 | — | 345,019 | |||||||||||||
Mercedes Johnson
|
105,000 | 225,019 | — | 330,019 | |||||||||||||
Kenton J. Sicchitano | 100,000 | 225,019 | — | 325,019 | |||||||||||||
Ray Stata
|
90,000 | 225,019 | 15,893 |
(7)
|
329,693 | ||||||||||||
Susie Wee | 100,000 | 225,019 | — | 325,019 |
Name
|
Number of Shares Subject
to Option Awards Held as of October 28, 2023 |
Number of RSUs that
have not Vested as of October 28, 2023 |
||||||
Stephen M. Jennings
(a)
|
— | 888 | ||||||
André Andonian
|
— | 1,228 | ||||||
James A. Champy
|
16,100 | 1,228 | ||||||
Anantha P. Chandrakasan | — | 1,228 | ||||||
Tunç Doluca
(b)
|
— | — | ||||||
Bruce R. Evans
(b)
|
— | — | ||||||
Edward H. Frank | — | 1,228 | ||||||
Laurie H. Glimcher | — | 1,228 | ||||||
Karen M. Golz | — | 1,228 | ||||||
Mercedes Johnson
|
— | 1,228 | ||||||
Kenton J. Sicchitano | 7,640 | 1,228 | ||||||
Ray Stata | 25,760 | 1,228 | ||||||
Susie Wee | — | 1,228 |
2024 Proxy Statement
|
43
|
What Counts as Ownership | What Does Not Count as Ownership | ||||
u
Time-based RSUs (whether or not vested)
|
u
Shares subject to unexercised options, whether or not vested
|
||||
u
Restricted stock (whether or not vested)
|
u
Any shares that have been pledged as collateral for a loan
|
44
|
Director Compensation |
![]() |
VINCENT ROCHE,
63
,
Chief Executive Officer and Chair of the Board of Directors
Mr. Roche was elected as Chair of our Board of Directors in March 2022. Mr. Roche has served as our President since 2012, and was appointed CEO and elected as a director in May 2013. Mr. Roche began his career with us in 1988 and has served in key positions spanning corporate leadership, worldwide sales, strategic marketing, business development, and product management over his more than 30-year tenure. Mr. Roche was recognized by Forbes in 2019 as one of America’s Most Innovative Leaders while also being a recipient of the 2021 SFI St. Patrick’s Day Science Medal for his contributions in support of the ecosystems in Ireland.
|
||||
![]() |
JANENE ASGEIRSSON,
53
,
Senior Vice President, Chief Legal Officer, Chief Risk Officer, and Secretary
Ms. Asgeirsson has served as our Senior Vice President, Chief Legal Officer, Chief Risk Officer, and Secretary since August 2021. Ms. Asgeirsson leads our worldwide legal, governance, trade, and compliance functions, including mergers and acquisitions, litigation, intellectual property, and other corporate matters and acts as a strategic advisor to ADI’s executive leadership team and Board of Directors. Additionally, Ms. Asgeirsson is responsible for our internal audit and risk functions in her capacity as Chief Risk Officer and is responsible for the governance of our ESG programs. Ms. Asgeirsson has over two decades of combined experience in private practice at American Lawyer-ranked international law firms and in senior and executive level roles at publicly traded technology companies. Prior to joining ADI, Ms. Asgeirsson worked at Acacia Communications, Inc., an optical networking and strategy technology company, from April 2015 to August 2021, as its Vice President, General Counsel and Secretary from April 2015 to January 2019, and then as its Chief Legal Officer, Chief Compliance Officer and Secretary, from February 2019 to August 2021, leading global teams with diverse responsibilities.
During her tenure at Acacia, she accomplished several significant transactions, including Acacia’s initial public offering (IPO), the best-performing U.S. IPO of 2016, and Acacia’s multi-billion-dollar sale to Cisco Systems. While in private practice, Ms. Asgeirsson provided strategic and legal counsel to several companies across multiple industries, ranging in size from start-ups to multi-billion-dollar, complex global organizations. Ms. Asgeirsson holds a Bachelor’s degree in Accountancy, summa cum laude, from the University of San Diego and a Juris Doctor from Northeastern University School of Law.
|
||||
![]() |
GREGORY BRYANT,
55
,
Executive Vice President and President of Business Units
Mr. Bryant has served as our Executive Vice President and President of Business Units since March 2022. In this role, Mr. Bryant is responsible for growing the business and ensuring close alignment between long-term strategic goals and the evolving technology trends, market needs, and customer priorities. Mr. Bryant has three decades of experience leading and scaling large organizations to deliver profitable growth. Most recently, Mr. Bryant was Executive Vice President and General Manager, Client Computing Group at Intel Corporation, a semiconductor and technology company, from September 2019 to January 2022, where he was responsible for setting Intel’s PC vision and strategy, delivering six consecutive years of growth in its global PC ecosystem, and collaborating across its global ecosystem to co-engineer and deliver leading consumer and commercial PC platforms that empower people and organizations. Mr. Bryant served as Intel’s Senior Vice President, Client Computing Group from June 2017 to September 2019 and previously held a variety of leadership positions at Intel, including General Manager of Asia Pacific and Japan and General Manager of the Business Client Platform Division. Mr. Bryant holds a Bachelor of Science degree in Electrical Engineering from the University of Kansas and a Master’s degree in Program and Systems Management from Golden Gate University.
|
||||
![]() |
JOHN HASSETT,
65
,
Senior Vice President and Chief Operating Officer, Maxim Business
Mr. Hassett has served as our Senior Vice President and Chief Operating Officer for the Maxim business since August 2021 where he leads our strategic and operational efforts to integrate Maxim. Mr. Hassett brings extensive experience as a business leader having run our largest revenue-generating business group and operational expertise leveraging his previous global operations and technology leadership, in addition to his various engineering management roles with us. Previously, Mr. Hassett was Senior Vice President, Corporate Integration Management where he led significant efforts in M&A transactions and was responsible for developing strategies that drove the integration of multi-billion-dollar transactions from due diligence to fully integrated entities from December 2020 to July 2021. Previously, Mr. Hassett was Senior Vice President
of Industrial and Consumer Group
from November 2019 to December 2020 where he led growth initiatives which leverage our extensive franchise capability in measurement, sensing and testing and was Senior Vice President of Global Operations & Technology from May 2015 to November 2019, where he was instrumental in setting and executing our manufacturing strategy and creating a world-class, scalable supply chain to deliver outstanding quality for our customers. Mr. Hassett joined ADI in 1982 after graduating from the University of Limerick where he earned a Bachelor of Science degree in Manufacturing Engineering. Mr. Hassett also holds a Master of Business Administration from the University of Limerick.
|
||||
2024 Proxy Statement
|
45
|
![]() |
VIVEK JAIN,
64
,
Executive Vice President of Global Operations and Technology
Mr. Jain has served as our Executive Vice President of Global Operations & Technology since May 2022, where he is responsible for global manufacturing and supply chain operation, and previously served as our Senior Vice President of Global Operations and Technology from August 2021 to May 2022. Mr. Jain assumed this position following our acquisition of Maxim, where he served in a similar capacity as the Senior Vice President of the Technology and Manufacturing Group from June 2009 to August 2021. After joining Maxim in 2007 as Vice President of Fab Operations, Mr. Jain led the transformation of many aspects of Maxim’s manufacturing supply chain to make it more flexible, nimble, and resilient. Mr. Jain’s additional experience includes serving as a Plant Manager at Intel's Technology Development and Manufacturing facility, where he oversaw the process technology development and high-volume manufacturing of deep sub-micron logic and Flash memory technologies. Mr. Jain holds a Bachelor of Science degree in Chemical Engineering from the Indian Institute of Technology Delhi, a Master of Science degree in Chemical Engineering from Penn State University, and a Master’s degree in Electrical Engineering from Stanford University. He is also a 2014 graduate of the Stanford Graduate School of Business Executive Program.
|
||||
![]() |
ALAN LEE, 56,
Senior Vice President and
Chief Technology Officer
Mr. Lee has served as our Chief Technology Officer since April 2023. In this role, Mr. Lee develops and leads our long-term technology strategy for applications across our end markets, working closely with our global business units and manufacturing operations to drive our competitive advantage. Mr. Lee is responsible for identifying, sourcing, and cultivating new business, technology, and research opportunities, as well as developing foundational technology capabilities in support of the current and future needs of our markets and customers. Mr. Lee has over 20 years of experience in the technology industry. Before joining ADI, Mr. Lee served as Corporate Vice President of Research and Advanced Development at Advanced Micro Devices, Inc., a global semiconductor company, where he oversaw the company’s worldwide research and advanced technology labs, university engagements, and external research contracting. Mr. Lee also led extreme-scale computing technology at AMD, where he drove the software and hardware engineering efforts to build the world’s fastest platforms for machine learning, industrial, and scientific applications.
|
||||
![]() |
JAMES MOLLICA, 58,
Interim Chief Financial Officer
Mr. Mollica has served as our Interim Chief Financial Officer since October 2023. Mr. Mollica guides our financial strategy and oversees our global finance organization, with responsibility for financial management, planning, controls, and reporting. Mr. Mollica has served at ADI for 35 years in roles of increasing responsibility. Before being appointed as Interim Chief Financial Officer, Mr. Mollica served as our Vice President, Finance, Global Customer Officer from December 2021 to October 2023. Before that, Mr. Mollica served as Maxim’s chief financial officer from August 2021 to December 2021, and as Vice President, FP&A and Treasurer from December 2017 to August 2021. Mr. Mollica holds a Bachelor of Science from Stonehill Collage and a Master of Business Administration degree from Bentley University.
|
||||
![]() |
ANELISE SACKS,
45
,
Executive Vice President and Chief Customer Officer
Ms. Sacks has served as our Executive Vice President and Chief Customer Officer since April 2023 where she is responsible for our customer strategy, enabling frictionless delivery of cutting-edge solutions to a diverse, global customer base, and delivering and capturing value for our technology. Ms. Sacks oversees our global sales, solutions and ecosystems, marketing, and digital transformation, with a focus on delivering a superior end-to-end customer experience and expanding our go-to-market strategies across channels and ecosystems. Ms. Sacks previously served as our Senior Vice President and Chief Customer Officer from March 2021 to April 2023. Before that, Ms. Sacks worked for Texas Instruments Incorporated, a semiconductor company, where she held a variety of leadership roles over 15 years where she grew their portfolio of analog, digital and software technologies, most recently as Vice President and General Manager, DLP Products for Texas Instruments from December 2017 to December 2020. During her 15-year tenure at Texas Instruments, Ms. Sacks was responsible for investment strategy, product roadmap definition, new product and technology development, marketing, systems, and application engineering. Ms. Sacks brings a diverse blend of expertise across geographies, technologies, and functions including sales and business unit leadership, has lived on three continents and speaks five languages. Ms. Sacks holds an Electric and Electronic Engineering degree from the Federal University in Rio de Janeiro. She also holds a Master of Business Administration degree with merit from the Open University Business School in the U.K. and has executive education from Harvard Business School and INSEAD.
|
||||
![]() |
MARIYA TRICKETT,
41
,
Senior Vice President and Chief People Officer
Ms. Trickett has served as our Senior Vice President and Chief People Officer since May 2022. Ms. Trickett is responsible for supporting ADI’s growth and evolution, driving best practices across all aspects of human resources. In this role, she leads the human resources and talent functions, including employee engagement, talent acquisition, talent management, learning and development, total rewards, succession planning, and organizational development. For nearly 20 years, Ms. Trickett has successfully led business and cultural transformations across a wide range of organizations. She has extensive experience building global high-performance companies focused on innovation, agility, and customer-centricity across technology, software, R&D, manufacturing, and services. From September 2018 to April 2022, Ms. Trickett was Senior Vice President and Chief Human Resources Officer at Aptiv, PLC, an industrial-tech company with over 180,000 employees, spanning 44 countries and 221 sites. Prior to Aptiv, she was Senior Vice President of Human Resources at Dana Incorporated, a drive train and EV supplier with more than 35,000 employees. Ms. Trickett holds a Bachelor of Science degree in history and law from Kirovograd State University in
Ukraine and a Master of Science degree in Human Resource Management from Temple University in Philadelphia. She is also a graduate of the Advanced Management Program at the University of Navarra’s IESE Business School in Barcelona.
|
||||
46
|
Leadership Team |
PROPOSAL 2
Advisory Approval of the Compensation of ADI’s Named Executive Officers
We are requesting shareholder approval of the compensation of the executive officers named in our
Summary Compensation Table
below, who we refer to as our NEOs. We are required to provide our shareholders with the opportunity to vote to approve, on an advisory (non-binding) basis, the compensation of our NEOs as disclosed in this Proxy Statement in accordance with the SEC’s rules. At the 2023 annual meeting of shareholders, our shareholders voted in favor of holding future “say-on-pay” votes every year. In accordance with the results of that vote, our Board of Directors determined to submit “say-on-pay” proposals to our shareholders every year until the next vote on the preferred frequency of advisory votes on the compensation of our NEOs, which will occur at the 2029 annual meeting of shareholders.
Our Board of Directors is asking shareholders to approve the following non-binding advisory vote:
VOTED, that the compensation paid to the company’s NEOs, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and accompanying narrative disclosures in this Proxy Statement, is hereby approved.
As required by the Dodd-Frank Act, this is an advisory vote, which means that this proposal is not binding on us. Our Compensation and Talent Committee, however, values the opinions expressed by our shareholders and will carefully consider the outcome of the vote when making future compensation decisions for our NEOs. You may vote for, against, or abstain from voting on this matter. At our 2023 annual meeting of shareholders, our compensation program for our NEOs received the support of 80.7% of the total votes cast. Given the varied feedback we heard and in light of our say-on-pay vote receiving the support from holders of a significant majority of our outstanding shares, the Compensation and Talent Committee determined not to make significant changes to the overall design and framework of our executive compensation program in fiscal year 2023. For additional information about the feedback we received from shareholders and the actions we took in response, please see the
Shareholder Engagement
section beginning on page
37
of this Proxy Statement.
As described in detail in the
Compensation Discussion and Analysis
section of this Proxy Statement, ADI’s executive compensation program is significantly performance-based and designed to attract, retain, and motivate high caliber executives to lead our complex, global organization and to align their interests with those of our shareholders. We seek to provide total compensation to our executive officers, including our NEOs, that is competitive with our peers, and we believe that our executive compensation program is designed to encourage the most talented individuals to grow their careers at ADI.
ADI has a longstanding philosophy and practice of pay for performance. In order to align our pay practices with shareholder interests, we tie a significant percentage of each executive’s compensation to ADI’s performance, in the form of executive performance incentive plan payments, and equity awards that are subject to performance vesting and rise in value only if our stock price increases. In fiscal year 2023 we delivered strong revenue performance. As a result, the variable cash incentive payout factor under our executive performance incentive plan was 182% of target in fiscal year 2023, compared to 293% in fiscal year 2022 and 253% in the fiscal year ended October 30, 2021 (fiscal year 2021).
We believe that our executive compensation program is working as intended and appropriately aligns executive pay with company performance and shareholder value creation.
Our Board of Directors unanimously recommends that you vote
FOR
approval of the compensation of our named executive officers as disclosed in this Proxy Statement.
|
||
2024 Proxy Statement
|
47
|
![]() |
![]() |
![]() |
![]() |
||||||||
VINCENT ROCHE
Chief Executive Officer and Chair of the Board of Directors
|
GREGORY BRYANT
Executive Vice President and President of Business Units
|
VIVEK JAIN
Executive Vice President of Global Operations and Technology
|
ANELISE SACKS
Executive Vice President and Chief Customer Officer
|
$12.3B
|
64.0%
|
31.1%
|
$6.55
|
$4.8B
|
||||||||||
Revenue
|
Gross Margins
|
Operating Margins
|
Diluted Earnings per Share
|
Operating Cash Flow
|
||||||||||
~90%
|
72.5%
|
48.9%
|
$10.09
|
$3.6B
|
||||||||||
Business-to-Business Revenue
|
Adjusted Gross Margins*
|
Adjusted Operating Margins*
|
Adjusted Diluted Earnings per Share*
|
Free Cash Flow*
|
||||||||||
48
|
Executive Compensation
|
Fiscal Year 2022
|
Fiscal Year 2023
|
||||
![]() |
![]() |
2024 Proxy Statement
|
49
|
u
Create alignment between executive and shareholder interests
|
u
Pay for performance by ensuring incentives are tied to multiple business performance metrics
|
u
Provide market competitive compensation to attract and retain top executive talent
|
||||||
|
Performance-Based Incentives | |||||||||||||||||||
Base Salary |
Variable Cash Incentive
|
Time-Based RSUs |
Relative TSR
PRSUs |
Financial Metric
PRSUs |
![]() |
TARGET COMP
VALUE |
||||||||||||||
Short-term | Long-term |
50
|
Executive Compensation
|
Pay Element
|
Purpose
|
Time Period
|
Performance Measures
|
||||||||||||||
Base Salary
|
u
Attract and retain executive talent
|
u
Annual
|
u
None
|
||||||||||||||
Short-Term Variable Cash Incentive
|
u
Reward our executive officers for achieving short-term company financial objectives aligned with shareholder value creation
|
u
Annual
|
u
50%: year-over-year revenue growth (measured quarterly)
u
50%: quarterly OPBT margin
u
Minimum OPBT margin required for payout
|
||||||||||||||
Long-Term Equity
Incentives
|
CEO |
Other NEOs
|
u
Align executive officer and shareholder interest to drive superior relative TSR results
|
u
Cumulative three-year performance period
|
u
Relative TSR compared to comparator group, targeting above-median performance
u
Payouts capped at target if absolute TSR is negative
|
||||||||||||
Relative TSR PRSUs
|
|||||||||||||||||
![]() |
![]() |
||||||||||||||||
Financial Metric PRSUs
|
u
Align executive officer and shareholder interests with long-term profitability
|
u
One-year, two-year cumulative, and three-year cumulative performance periods
|
u
Non-GAAP operating profit
|
||||||||||||||
![]() |
![]() |
||||||||||||||||
RSUs
|
u
Attract and retain key executives
|
u
Four-year graded vesting
|
u
None
|
||||||||||||||
![]() |
![]() |
||||||||||||||||
WHAT WE DO | WHAT WE DON’T DO | ||||||||||
u
Review compensation practices of peers aligned with ADI’s business
u
Provide for annual cash incentives that are based solely on our financial performance
u
Design compensation programs to align a significant portion of equity awards to long-term performance achievement
u
Tie incentive awards to challenging performance targets aligned with our corporate strategy
u
Cap payouts for relative TSR-based awards for instances of negative absolute TSR and provide for target performance at above median relative TSR performance
u
Provide for compensation clawbacks pursuant to a clawback policy for our CEO and other officers
u
Require significant share ownership by executive officers pursuant to stock ownership guidelines
u
Conduct an annual “say-on-pay” vote
|
u
No hedging and pledging of ADI securities
u
No excessive perquisites to our executive officers
u
No gross-ups or compensation paid to officers or directors for any income tax owed for approved travel
|
2024 Proxy Statement
|
51
|
Role of the Compensation Consultant
|
u
In June 2022, Pearl Meyer recommended a peer group of companies for the purpose of assessing our executive compensation program, which was approved by the Compensation and Talent Committee. Pearl Meyer then gathered compensation information of these companies and provided market-based findings on pay levels and practices to the Compensation and Talent Committee.
|
||||
Role of Management
|
u
Mr. Roche reviewed the competitive market data for our NEOs, other than himself, as well as their performance in preparing recommendations for the Compensation and Talent Committee’s consideration.
|
||||
Role of the Compensation and Talent Committee
|
u
The Compensation and Talent Committee considered Pearl Meyer’s advice, Mr. Roche’s recommendations for those executive officers reporting to him, and management’s proposed fiscal year 2023 performance goals prior to making its final and sole decision on all fiscal year 2023 executive compensation. At the Compensation and Talent Committee’s direction, Pearl Meyer provided a risk analysis of our executive compensation program. Finally, the Compensation and Talent Committee also certified performance-based compensation payouts for the applicable periods ended in fiscal year 2023.
|
||||
52
|
Executive Compensation
|
2023 Peer Group
|
||||||||
Advanced Micro Devices, Inc.
Agilent Technologies, Inc.
Applied Materials, Inc.
Boston Scientific Corporation
Broadcom Inc.
Intel Corporation
|
KLA Corporation
Lam Research Corporation
Marvell Technology, Inc.
Microchip Technology Incorporated
Micron Technology, Inc.
|
NVIDIA Corporation
NXP Semiconductors N.V.
QUALCOMM Incorporated
Skyworks Solutions, Inc.
Texas Instruments Incorporated
|
||||||
2024 Proxy Statement
|
53
|
Pay Mix / Structure
![]() |
We structure our pay to consist of both fixed and variable compensation with short- and long-term horizons. We believe that the variable elements of compensation, which represented 95% and 91% of the total target compensation for our CEO and other NEOs, respectively, excluding new-hire equity awards, for fiscal year 2023, are a sufficient percentage of overall compensation to motivate executives to produce superior short- and long-term corporate results and to achieve company goals, while the fixed element is also sufficiently high that the executives are not encouraged to take unnecessary or excessive risks in doing so.
|
||||
Metrics
![]() |
We believe that our focus on both OPBT margin and year-over-year revenue growth through our executive performance incentive plan, and non-GAAP operating profit and stock price performance through our equity compensation program, provides a check on excessive short-term risk taking. That is, even if our executives could inappropriately increase OPBT margin or revenue by excessively reducing expenses or adding new revenue sources that are inconsistent with our business model, this could ultimately harm our stock price and the value of their equity awards. Conversely, if our executives were to add revenue sources at low margins in order to generate a higher growth multiple and increased stock prices, it could decrease OPBT margin and the value of their variable cash incentive payments. Our OPBT margin and year-over-year revenue growth targets are applicable to our executives and employees alike, which we believe encourages consistent behavior across the organization, and reflects goals that are challenging, but not so high that they require performance outside of what the Compensation and Talent Committee believes is reasonable for us or could motivate our executives and employees to take actions in which we assume unreasonable levels of risk.
|
||||
Driving Profitability
![]() |
We cap our variable cash incentive payout factors. Even if we dramatically exceed our OPBT margin or year-over-year revenue growth targets, variable cash incentive payments are limited. In fiscal year 2023, the variable cash incentive payment factor cap was 300% of target. Conversely, we also have a floor on the OPBT margin target so that profitability at or below a certain level will result in no variable cash incentive payments for that performance period, regardless of revenue growth levels. We believe this avoids incentivizing management to drive revenue levels without regard to profitability.
|
||||
Stock Ownership Guidelines
![]() |
Our stock ownership guidelines provide an incentive for management to consider ADI’s long-term interests because a portion of their personal investment portfolio consists of ADI stock.
|
||||
54
|
Executive Compensation
|
Compensation Best Practices
![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() |
||
BASE SALARY
|
![]() |
SHORT-TERM VARIABLE
CASH INCENTIVE
|
![]() |
LONG-TERM
EQUITY
INCENTIVES
|
![]() |
RETIREMENT
AND OTHER
EMPLOYEE BENEFITS
|
||||||||||||||
u
Attract and retain executive talent
u
Provide stable source of income
|
u
Link pay and short-term company performance
u
Reward executives for achieving short-term company financial objectives aligned with value creation
|
u
Link pay and long-term company performance
u
Align the interests of executives with shareholders by rewarding long-term stock price appreciation
|
u
Retain executive talent by providing financial protection and security
|
2024 Proxy Statement
|
55
|
BASE SALARY
|
![]() |
INDIVIDUAL
TARGET VARIABLE CASH INCENTIVE
PERCENTAGE
|
![]() |
VARIABLE CASH INCENTIVE
PAYOUT
FACTOR
|
![]() |
VARIABLE CASH INCENTIVE PAYOUT
|
56
|
Executive Compensation
|
OPBT Margin | Revenue | |||||||||||||
OPBT Margin by Qtr.
|
Variable Cash Incentive Payout Factor
|
YTY Growth by Qtr.
|
Variable Cash Incentive Payout Factor
|
|||||||||||
≤ 40.0%
|
0 | ≤ 0% | 0 | |||||||||||
42.0%
|
1.0x |
8.0%
|
1.0x | |||||||||||
45.0%
|
2.0x |
15.0%
|
2.0x | |||||||||||
≥ 50.0%
|
3.0x |
≥ 22%
|
3.0x | |||||||||||
If OPBT margin <=40% the entire variable cash incentive will pay at 0% regardless of revenue attainment
|
OPBT Margin (50% weight) | Revenue Growth (50% weight) | |||||||||||||||||||
Quarter |
OPBT Margin
(by quarter)
|
Variable Cash Incentive Payout
Factor (by quarter)
|
YOY Revenue
Growth (by quarter)
|
Variable Cash Incentive Payout
Factor (by quarter)
|
Quarterly Variable Cash Incentive
Payout Factor (average)
|
|||||||||||||||
Q1
|
51.1% | 300% | 21.1% | 287% | 293% | |||||||||||||||
Q2
|
51.2% | 300% | 9.8% | 126% | 213% | |||||||||||||||
Q3
|
47.8% | 257% | (1.1)% | —% | 128% | |||||||||||||||
Q4
|
44.7% | 190% | (16.4)% | —% | 95% |
2024 Proxy Statement
|
57
|
Name of Executive |
Fiscal Year
2022
Base
Salary
|
Fiscal Year
2023
Base
Salary
|
%
Increase
|
Fiscal Year
2022
Individual
Target Variable
Cash Incentive
as % of
Base Salary
|
Fiscal Year
2023
Individual
Target Variable
Cash Incentive
as % of
Base Salary
|
%
Increase
|
||||||||||||||||||||
Vincent Roche
Chief Executive Officer and
Chair of the Board of Directors
|
$ | 1,100,000 | $ | 1,200,000 | 9.09 | % | 200 | % | 200 | % | — | % | ||||||||||||||
Prashanth Mahendra-Rajah
(1)
Former Executive Vice President,
Finance and Chief Financial Officer
|
$ | 670,000 | $ | 700,000 | 4.48 | % | 125 | % | 125 | % | — | % | ||||||||||||||
Gregory Bryant
Executive Vice President and President of Business Units
|
$ | 750,000 | $ | 750,000 | — | % | 150 | % | 150 | % | — | % | ||||||||||||||
Vivek Jain
Executive Vice President of Global Operations and Technology
|
$ | 625,000 | $ | 650,000 | 4.00 | % | 125 | % | 125 | % | — | % | ||||||||||||||
Anelise Sacks
Executive Vice President and Chief Customer Officer
|
$ | 600,000 | $ | 625,000 | 4.17 | % | 125 | % | 125 | % | — | % |
58
|
Executive Compensation
|
Equity
Award Type |
Percentage of
CEO Annual
Grant
|
Percentage of Other NEO
Annual Grant |
Purpose | Time Period |
Performance
Metrics |
Payout | ||||||||||||||
Relative TSR PRSUs |
![]() |
![]() |
Align executive officers’ and shareholders’ interests to drive superior TSR relative to comparator group
|
3-year performance period
|
ADI’s 3-year TSR compared to a comparator group
|
0–200%
|
||||||||||||||
Financial Metric PRSUs |
![]() |
![]() |
Align executive officers’ and shareholders’ interests in long-term profitability
|
1-year, 2-year cumulative, and 3-year cumulative performance periods; earned shares (if any) vest on 3rd anniversary of grant date. 3-year cliff vesting
|
1-year, 2-year cumulative, and 3-year cumulative non-GAAP operating profit (in dollars)
|
0–200%
|
||||||||||||||
Time-Based RSUs |
![]() |
![]() |
Attract and retain key executives
|
4-year graded vesting
|
None
|
100% value in line with stock price performance
|
2024 Proxy Statement
|
59
|
Percentile Attainment | PRSU Payout % | ||||
< 25
th
percentile
|
0 | % | |||
25
th
percentile
|
50 | % | |||
55
th
percentile
|
100 | % | |||
75
th
percentile
|
200 | % |
ADI TSR | PRSU Payout % | ||||
Equal to or greater than 66.67% above the comparator group median TSR
|
200% | ||||
Equal to comparator group median TSR
|
100% | ||||
Equal to or less than -66.67% below the comparator group median TSR
|
0% |
60
|
Executive Compensation
|
Synergy Performance Goal Attained
|
% of Target to Vest | ||||
$275 million
|
0 | % | |||
$325 million | 100 | % | |||
$375 million
|
150 | % |
2024 Proxy Statement
|
61
|
Name |
Time-
based RSUs |
Relative
TSR PRSUs |
Financial
Metric PRSUs |
Target Grant Value | |||||||||||||
Vincent Roche | 26,572 | 29,113 | 42,879 | $ | 20,000,000 | ||||||||||||
Prashanth Mahendra-Rajah
(1)
|
10,416 | 6,987 | 10,505 | $ | 5,600,000 | ||||||||||||
Gregory Bryant
|
14,880 | 9,982 | 15,008 | $ | 8,000,000 | ||||||||||||
Vivek Jain | 9,765 | 6,550 | 9,849 | $ | 5,250,000 | ||||||||||||
Anelise Sacks | 9,300 | 6,239 | 9,380 | $ | 5,000,000 |
![]() |
![]() |
![]() |
||||||||||||||||||||||||
1
![]() |
2
![]() |
3
![]() |
||||||||||||||||||||||||
First, we ensure our executive compensation is competitive
and attracts and retains top executive talent by understanding how the total target compensation (consisting of base salary, variable cash incentive compensation, and annual long-
term incentive compensation) of each of our executive officers compares to the target total compensation of those in similar positions within our peer group.
|
We then consider a variety of factors
,
including the scope of the role, tenure in the position, and the performance and experience of the individual when deciding how to position each executive officer’s total target compensation to the total target compensation of those in similar positions within our peer group.
|
We structure our compensation package to align our executive officers’ interests with those of our shareholders
by tying a significant portion of their total compensation directly to ADI’s short- and long-term performance. For executive officers, this is measured by OPBT, OPBT margin, year-over-year revenue growth, absolute stock price appreciation, and relative TSR, which all drive shareholder value creation.
|
62
|
Executive Compensation
|
![]() |
2024 Proxy Statement
|
63
|
64
|
Executive Compensation
|
Cash Compensation | Fiscal Year 2023 Target Value | Rationale | ||||||
Base Salary | $1,200,000 |
u
Increase of $100,000 (9.1%), to align target total cash compensation at market competitive levels in recognition of Mr. Roche’s strong leadership
|
||||||
Variable Cash Incentive Target Percentage
|
200% |
u
No change from fiscal year 2022
|
Equity Compensation | 2023 Target Value | Vesting | Rationale | ||||||||
Time-Based RSUs
|
$5,000,000 (25% weighting of long-term incentives)
|
Annual installments of a
4-year period (25% per year)
|
Reduced weighting of time-based RSUs while continuing to promote retention and leadership continuity
|
||||||||
Financial Metric PRSUs
|
$8,000,000 (40% weighting of long-term incentives)
|
Three-year cliff vesting based on financial metrics
|
Increased weighting of performance-based equity to drive continued long-term performance aligned to our aggressive strategy
|
||||||||
Relative TSR PRSUs
|
$7,000,000 (35% weighting of long-term incentives)
|
Three-year cliff vesting based on relative TSR metrics
|
Increased relative TSR target performance (for 100% payout) to the 55th percentile of comparators
|
2024 Proxy Statement
|
65
|
66
|
Executive Compensation
|
Position | Multiple | ||||
CEO
|
5 times annual base salary
|
||||
Other members of the Leadership Team | 3 times annual base salary |
What Counts as Ownership | What Does Not Count as Ownership | ||||
u
Time-based RSUs (whether or not vested)
|
u
Shares subject to unexercised options, whether or not vested
|
||||
u
Unvested PRSUs whose performance has been certified by the Compensation and Talent Committee
|
u
Unvested PRSUs whose performance have not yet been certified by the Compensation and Talent Committee
|
||||
u
Restricted stock (whether or not vested)
|
u
Any shares that have been pledged as collateral for a loan
|
2024 Proxy Statement
|
67
|
New-Hire Grants:
|
The grant date of all awards to newly hired executive officers and employees is the 15th day of the month after the date on which the individual commences employment with us (or the next succeeding business day that Nasdaq is open).
|
||||
Annual Grants:
|
The grant date of all annual awards is the first business day of April that Nasdaq is open (or the next succeeding business day that Nasdaq is open) or such other date as determined by the Compensation and Talent Committee.
|
||||
Other Grants:
|
All other awards granted to existing executive officers and employees throughout the year (off-cycle awards) have a grant date of the 15th day of the month (or the next succeeding business day that Nasdaq is open) provided the award is approved on or prior to such grant date.
|
||||
Foreign Registrations:
|
Any awards requiring registration or approval in a foreign jurisdiction will have a grant date of the 15th day of the month (or the next succeeding business day that Nasdaq is open) following the effective date of that registration or approval.
|
||||
Blackout Periods:
|
Our Compensation and Talent Committee does not approve off-cycle awards to our executive officers during the quarterly blackout periods under our insider trading policy.
|
||||
68
|
Executive Compensation
|
Name and
Principal Position |
Fiscal
Year |
Salary
($) (1) |
Bonus
($)
|
|
Stock
Awards ($) (2) |
Option
Awards ($) (3) |
Non-Equity
Incentive Plan Compensation ($) (4) |
All Other
Compensation ($) (5) |
Total
($) |
|||||||||||||||||||||||||||||||||||||||||
Vincent Roche
Chief Executive Officer & Chair of the Board of Directors
|
2023
|
$ | 1,128,846 | $ | — | $ | 19,997,672 | $ | — | $ | 4,071,924 | $ | 345,193 | $ | 25,543,635 | |||||||||||||||||||||||||||||||||||
2022
|
$ | 1,075,000 | $ | — | $ | 15,000,172 | $ | — | $ | 5,560,731 | $ | 462,392 | $ | 22,098,295 | ||||||||||||||||||||||||||||||||||||
2021
|
$ | 1,050,000 | $ | — | $ | 8,591,204 | $ | 17,118,004 | $ | 3,981,115 | $ | 84,000 | $ | 30,824,323 | ||||||||||||||||||||||||||||||||||||
Prashanth Mahendra-Rajah
(6)
Former Executive Vice President, Finance & Chief Financial Officer
|
2023
|
$ | 685,577 | $ | — | $ | 5,599,222 | $ | — | $ | 1,544,799 | $ | 104,873 | $ | 7,934,471 | |||||||||||||||||||||||||||||||||||
2022
|
$ | 622,500 | $ | — | $ | 5,500,292 | $ | — | $ | 2,081,597 | $ | 61,898 | $ | 8,266,287 | ||||||||||||||||||||||||||||||||||||
2021
|
$ | 575,000 | $ | — | $ | 5,024,568 | $ | 744,775 | $ | 1,453,423 | $ | 57,200 | $ | 7,854,966 | ||||||||||||||||||||||||||||||||||||
Gregory Bryant
(7)
Executive Vice President & President of Business Units
|
2023
|
$ | 735,577 | $ | — | $ | 7,999,186 | $ | — | $ | 2,025,866 | $ | 77,646 | $ | 10,838,275 | |||||||||||||||||||||||||||||||||||
2022
|
$ | 475,962 | $ | — | $ | 31,500,396 |
(8)
|
$ | — | $ | 2,141,827 | $ | 49,277 | $ | 34,167,462 | |||||||||||||||||||||||||||||||||||
Vivek Jain
(9)
Executive Vice President of Global Operations & Technology
|
2023
|
$ | 637,500 | $ | — | $ | 5,249,301 | $ | — | $ | 1,424,075 | $ | 52,200 | $ | 7,363,076 | |||||||||||||||||||||||||||||||||||
2022
|
$ | 579,212 | $ | — | $ | 5,000,181 | $ | — | $ | 1,936,907 | $ | 40,738 | $ | 7,557,038 | ||||||||||||||||||||||||||||||||||||
Anelise Sacks
Executive Vice President & Chief Customer Officer
|
2023
|
$ | 600,962 | $ | — | $ | 4,999,551 | $ | — | $ | 1,367,801 | $ | 50,719 | $ | 7,019,033 | |||||||||||||||||||||||||||||||||||
2022
|
$ | 512,500 | $ | — | $ | 4,700,101 | $ | — | $ | 1,735,039 | $ | 205,102 | $ | 7,152,742 | ||||||||||||||||||||||||||||||||||||
2021
|
$ | 294,231 | $ | 400,000 | $ | 2,673,979 | $ | 333,805 | $ | 769,250 | $ | 323,619 | $ | 4,794,884 |
2024 Proxy Statement
|
69
|
Name |
Company
401(k) and DCP Payments ($) (a) |
Healthcare
Savings Account ($) |
Service
Awards
($)
(b)
|
Tax
Planning
($)
(c)
|
Vacation
Payout |
Corporate
Aircraft Use (d) |
Cybersecurity
Protection
Services
(e)
|
Total
($) |
||||||||||||||||||
Vincent Roche | 90,308 | — | 500 | 3,585 | — | 243,200 | 7,600 | 345,193 | ||||||||||||||||||
Prashanth Mahendra-Rajah
(f)
|
54,846 | 2,307 | — | 10,000 | 30,120 | — | 7,600 | 104,873 | ||||||||||||||||||
Gregory Bryant | 58,846 | 1,200 | — | 10,000 | — | — | 7,600 | 77,646 | ||||||||||||||||||
Vivek Jain | 51,000 | 1,200 | — | — | — | — | 52,200 | |||||||||||||||||||
Anelise Sacks | 48,077 | 1,200 | — | 1,442 | — | — | — | 50,719 |
70
|
Executive Compensation
|
Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards (1) |
Estimated Future Payouts Under
Equity Incentive Plan Awards (2) |
All Other
Stock Awards: Number of Shares of Stock or Units(#) (3) |
Grant Date Fair
Value of Stock Awards ($) |
||||||||||||||||||||||||||||||||
Name
|
Grant Date
|
Threshold
($) |
Target
($) |
Maximum
($) |
Threshold
(#) |
Target
(#) |
Maximum
(#) |
||||||||||||||||||||||||||||
Vincent Roche
|
— | — | 2,400,000 | 7,200,000 | — | — | — | — | — | ||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | 42,879 | 85,758 | — | 7,998,220 |
(4)
|
||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | 29,113 | 58,226 | — | 6,999,930 |
(4)
|
||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | — | — | 26,572 | 4,999,522 |
(5)
|
||||||||||||||||||||||||||
Prashanth Mahendra-Rajah
(6)
|
— | — | 875,000 | 2,625,000 | — | — | — | — | — | ||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | 10,505 | 21,010 | — | 1,959,498 |
(4)
|
||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | 6,987 | 13,974 | — | 1,679,954 |
(4)
|
||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | — | — | 10,416 | 1,959,770 |
(5)
|
||||||||||||||||||||||||||
Gregory Bryant
|
— | — | 1,125,000 | 3,375,000 | — | — | — | — | — | ||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | 15,008 | 30,016 | — | 2,799,442 |
(4)
|
||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | 9,982 | 19,964 | — | 2,400,072 |
(4)
|
||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | — | — | 14,880 | 2,799,672 |
(5)
|
||||||||||||||||||||||||||
Vivek Jain
|
— | — | 812,500 | 2,437,500 | — | — | — | — | — | ||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | 9,849 | 19,698 | — | 1,837,134 |
(4)
|
||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | 6,550 | 13,100 | — | 1,574,882 |
(4)
|
||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | — | — | 9,765 | 1,837,285 |
(5)
|
||||||||||||||||||||||||||
Anelise Sacks
|
— | — | 781,250 | 2,343,750 | — | — | — | — | — | ||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | 9,380 | 18,760 | — | 1,749,651 |
(4)
|
||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | 6,239 | 12,478 | — | 1,500,105 |
(4)
|
||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | — | — | 9,300 | 1,749,795 |
(5)
|
Name |
Actual Payout under Non-Equity
Incentive Plans for Fiscal Year 2023
|
|||||||
Vincent Roche | $ | 4,071,924 | ||||||
Prashanth Mahendra-Rajah
(a)
|
|
$ | 1,544,799 | |||||
Gregory Bryant | $ | 2,025,866 | ||||||
Vivek Jain | $ | 1,424,075 | ||||||
Anelise Sacks | $ | 1,367,801 |
2024 Proxy Statement
|
71
|
72
|
Executive Compensation
|
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||
Name | Grant Date |
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(1)
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(2)
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
(3)
|
Number
of Shares
or Units/
Awards of
Stock That
Have Not
Vested (#)
(4)
|
Market Value
of Shares or
Units/Awards
of Stock That
Have Not
Vested ($)
(5)
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units,
or Other
Rights That
Have Not
Vested (#)
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have Not Vested ($)
|
|||||||||||||||||||||||||||||||
Vincent
Roche
|
3/8/2017 | 80,000 | — | — |
83.48
|
3/8/2027 | — | — | — | — | |||||||||||||||||||||||||||||||
3/29/2018 | 90,017 | — | — |
91.13
|
3/29/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||
3/13/2019 | 100,803 | — | — |
108.08
|
3/13/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||
3/11/2020 | 134,620 | 33,655 | — |
94.41
|
3/11/2030 | 6,842 | 1,098,620 | — | — | ||||||||||||||||||||||||||||||||
12/15/2020 | — | — | 308,200 |
144.06
|
12/15/2030 |
(6)
|
— | — | — | — | |||||||||||||||||||||||||||||||
12/15/2020 | — | 151,800 | — |
144.06
|
12/15/2030 |
(6)
|
— | — | — | — | |||||||||||||||||||||||||||||||
3/10/2021 | 35,393 | 35,393 | — |
147.11
|
3/10/2031 | 9,681 | 1,554,478 | 38,722 |
(7),(8)
|
6,217,592 | |||||||||||||||||||||||||||||||
4/4/2022 | — | — | — | — | — | 25,047 | 4,021,797 | 54,938 |
(8),(9)
|
8,821,395 | |||||||||||||||||||||||||||||||
4/3/2023 | — | — | — | — | — | 26,572 | 4,266,666 | 71,992 |
(8),(10)
|
11,559,755 | |||||||||||||||||||||||||||||||
Prashanth Mahendra-Rajah
(11)
|
3/11/2020 | — | 8,751 | — |
94.41
|
1/28/2024 |
(12)
|
1,779 | 285,654 | — | — | ||||||||||||||||||||||||||||||
3/10/2021 | 9,653 | 9,653 | — |
147.11
|
1/28/2024 |
(12)
|
2,641 | 424,065 | 10,562 |
(7),(8)
|
1,695,940 | ||||||||||||||||||||||||||||||
4/4/2022 | — | — | — | — |
—
|
9,184 | 1,474,675 | 20,145 |
(8),(9)
|
3,234,683 | |||||||||||||||||||||||||||||||
4/3/2023 | — | — | — | — |
—
|
10,416 | 1,672,497 | 17,492 |
(8),(10)
|
2,808,690 | |||||||||||||||||||||||||||||||
Gregory Bryant
|
3/15/2022 | — | — | — | — |
—
|
61,308 | 9,844,226 | 160,092 |
(13)
|
25,705,972 | ||||||||||||||||||||||||||||||
4/4/2022 | — | — | — | — |
—
|
12,524 | 2,010,979 | 27,469 |
(8),(9)
|
4,410,697 | |||||||||||||||||||||||||||||||
4/3/2023 | — | — | — | — |
—
|
14,880 | 2,389,282 | 24,990 |
(8),(10)
|
4,012,644 | |||||||||||||||||||||||||||||||
Vivek Jain
|
9/1/2020 | — | — | — | — |
—
|
5,745 | 922,475 | — | — | |||||||||||||||||||||||||||||||
8/24/2021 | — | — | — | — |
—
|
9,158 | 1,470,500 | — | — | ||||||||||||||||||||||||||||||||
4/4/2022 | — | — | — | — |
—
|
8,349 | 1,340,599 | 18,313 |
(8),(9)
|
2,940,519 | |||||||||||||||||||||||||||||||
4/3/2023 | — | — | — | — |
—
|
9,765 | 1,567,966 | 16,399 |
(8),(10)
|
2,633,187 | |||||||||||||||||||||||||||||||
Anelise Sacks
|
3/15/2021 | 4,183 | 4,183 | — | 151.00 | 3/15/2031 | 1,145 | 183,853 | 4,578 |
(7),(8)
|
735,089 | ||||||||||||||||||||||||||||||
4/4/2022 | — | — | — | — |
—
|
7,848 | 1,260,153 | 17,214 |
(8),(9)
|
2,764,052 | |||||||||||||||||||||||||||||||
4/3/2023 | — | — | — | — |
—
|
9,300 | 1,493,301 | 15,619 |
(8),(10)
|
2,507,943 |
Grant Date |
Vest
Date |
Vincent
Roche
|
Prashanth Mahendra-Rajah |
Gregory
Bryant |
Vivek
Jain
|
Anelise
Sacks
|
||||||||||||||
3/11/2020 | 3/15/2024 | 33,655 | — | — | — | — | ||||||||||||||
12/15/2020 | variable | 460,000 | — | — | — | — | ||||||||||||||
3/10/2021 | 3/15/2024 | 17,696 | — | — | — | — | ||||||||||||||
3/15/2025 | 17,697 | — | — | — | — | |||||||||||||||
3/15/2021 | 3/15/2024 | — | — | — | — | 2,091 | ||||||||||||||
3/15/2025 | — | — | — | — | 2,092 |
2024 Proxy Statement
|
73
|
74
|
Executive Compensation
|
Option Awards | Stock Awards | ||||||||||||||||
Grant Date
|
Number of Shares
Acquired on Exercise (#)
|
Value Realized
on Exercise
($)
(1)
|
Number of Shares
Acquired on Vesting (#)
|
Value Realized
on Vesting
($)
(2)
|
|||||||||||||
Vincent Roche | 55,000 | 5,437,953 | 105,826 | 19,400,073 | |||||||||||||
Prashanth Mahendra-Rajah
(3)
|
65,592 | 5,946,552 |
|
67,371 | 11,435,021 | ||||||||||||
Gregory Bryant | — | — | 12,880 | 2,356,138 | |||||||||||||
Vivek Jain | — | — | 29,548 | 4,874,168 | |||||||||||||
Anelise Sacks | — | — | 25,942 | 4,219,043 |
2024 Proxy Statement
|
75
|
Name
|
Executive
Contributions in
Last Fiscal
Year
($)
|
ADI
Contributions in
Last Fiscal
Year
($)
(1)
|
Aggregate
Earnings in
Last Fiscal
Year
($)
(2)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate
Balance at Last Fiscal Year End
($)
(3)
|
||||||||||||
Vincent Roche | 93,846 | 7,508 | 542,081 | — | 11,045,713 | ||||||||||||
Prashanth Mahendra-Rajah
(4)
|
131,801 | 10,690 | 268,862 | — | 2,123,928 | ||||||||||||
Gregory Bryant | 321,880 | 1,004 | (7,700) | — | 340,020 | ||||||||||||
Vivek Jain | — | — | — | — | — | ||||||||||||
Anelise Sacks | — | — | — | — | — |
Name |
Previously Reported for
Fiscal Year 2022 ($) |
Previously Reported for
Fiscal Year 2021 ($) |
||||||
Vincent Roche | — | 743,915 | ||||||
Prashanth Mahendra-Rajah | 35,238 | 133,754 | ||||||
Gregory Bryant | 2,596 | — | ||||||
Vivek Jain | — | — | ||||||
Anelise Sacks | — | — |
76
|
Executive Compensation
|
2024 Proxy Statement
|
77
|
Involuntary not for cause
termination or good reason
following change in control
($)
|
Death
($) |
Disability
($) |
||||||||||||||||||
Vincent Roche | ||||||||||||||||||||
Cash Severance
(1)
|
$ | 3,588,000 | $ | — | $ | — | ||||||||||||||
Variable Cash Incentive
(2)
|
$ | 15,652,653 | $ | — | $ | — | ||||||||||||||
Value of Accelerated Vesting of Equity Awards
(3)(4)
|
$ | 47,837,907 | $ | 46,409,625 | $ | 46,409,625 | ||||||||||||||
Value of Medical and Other Benefits
(5)
|
$ | 15,256 | $ | — | $ | — | ||||||||||||||
Excise Tax Gross Up
(6)
|
$ | 26,286,236 | $ | — | $ | — | ||||||||||||||
Total | $ | 93,380,052 | $ | 46,409,625 | $ | 46,409,625 | ||||||||||||||
Prashanth Mahendra-Rajah
(7)
|
||||||||||||||||||||
Cash Severance
(1)
|
$ | 2,093,000 | $ | — | $ | — | ||||||||||||||
Variable Cash Incentive
(2)
|
$ | 5,924,559 | $ | — | $ | — | ||||||||||||||
Value of Accelerated Vesting of Equity Awards
(3)(4)
|
$ | 12,305,100 | $ | 14,341,224 | $ | 14,341,224 | ||||||||||||||
Value of Medical and Other Benefits
(5)
|
$ | 46,125 | $ | — | $ | — | ||||||||||||||
Excise Tax Gross Up | $ | — | $ | — | $ | — | ||||||||||||||
Total | $ | 20,368,784 | $ | 14,341,224 | $ | 14,341,224 | ||||||||||||||
Gregory Bryant | ||||||||||||||||||||
Cash Severance
(1)
|
$ | 2,242,500 | $ | — | $ | — | ||||||||||||||
Variable Cash Incentive
(2)
|
$ | 7,913,869 | $ | — | $ | — | ||||||||||||||
Value of Accelerated Vesting of Equity Awards
(3)(4)
|
$ | 48,373,800 | $ | 49,985,178 | $ | 49,985,178 | ||||||||||||||
Value of Medical and Other Benefits
(5)
|
$ | 46,125 | $ | — | $ | — | ||||||||||||||
Excise Tax Gross Up | $ | — | $ | — | $ | — | ||||||||||||||
Total | $ | 58,576,294 | $ | 49,985,178 | $ | 49,985,178 | ||||||||||||||
Vivek Jain | ||||||||||||||||||||
Cash Severance
(1)
|
$ | 1,943,500 | $ | — | $ | — | ||||||||||||||
Variable Cash Incentive
(2)
|
$ | 5,523,343 | $ | — | $ | — | ||||||||||||||
Value of Accelerated Vesting of Equity Awards
(3)(4)
|
$ | 10,875,246 | $ | 11,951,506 | $ | 9,558,531 | ||||||||||||||
Value of Medical and Other Benefits
(5)
|
$ | 32,734 | $ | — | $ | — | ||||||||||||||
Excise Tax Gross Up | $ | — | $ | — | $ | — | ||||||||||||||
Total | $ | 18,374,823 | $ | 11,951,506 | $ | 9,558,531 | ||||||||||||||
Anelise Sacks | ||||||||||||||||||||
Cash Severance
(1)
|
$ | 1,868,750 | $ | — | $ | — | ||||||||||||||
Variable Cash Incentive
(2)
|
$ | 5,303,513 | $ | — | $ | — | ||||||||||||||
Value of Accelerated Vesting of Equity Awards
(3)(4)
|
$ | 8,984,423 | $ | 10,362,102 | $ | 10,362,102 | ||||||||||||||
Value of Medical and Other Benefits
(5)
|
$ | 46,125 | $ | — | $ | — | ||||||||||||||
Excise Tax Gross Up | $ | — | $ | — | $ | — | ||||||||||||||
Total | $ | 16,202,811 | $ | 10,362,102 | $ | 10,362,102 |
78
|
Executive Compensation
|
2024 Proxy Statement
|
79
|
Value of Initial Fixed $100
Investment Based On: |
||||||||||||||||||||||||||||||||
Year
(1)
|
Summary
Compensation
Table Total
for PEO
|
Compensation
Actually Paid to PEO
(2)
|
Average Summary
Compensation
Table Total
for non-
PEO NEOs
|
Average
Compensation
Actually Paid to non-
PEO NEOs
(2)
|
Total
Shareholder Return |
Peer Group
Total
Shareholder
Return
(3)
|
Net Income
(in millions) |
OPBT Margin
%
(4)
|
||||||||||||||||||||||||
2023 |
$
|
$
|
$ |
|
$ |
|
$
|
$
|
$
|
|
% | |||||||||||||||||||||
2022 |
$
|
$
|
$ |
|
$ |
|
$
|
$
|
$
|
|
% | |||||||||||||||||||||
2021 |
$
|
$
|
$ |
|
$ |
|
$
|
$
|
$
|
|
% |
2023
|
2022
|
2021
|
||||||||||||||||||||||||
PEO
($) |
Average of
non-
PEO NEOs
($)
|
PEO
($) |
Average of non-
PEO NEOs
($)
|
PEO
($) |
Average of
non-
PEO NEOs
($)
|
|||||||||||||||||||||
Summary Compensation Table Total |
|
|
|
|
|
|
||||||||||||||||||||
Adjustments for Stock and Option Awards:
|
||||||||||||||||||||||||||
Subtraction: Value of "Stock Awards" and "Option Awards" reported in Summary Compensation Table |
(
|
(
|
(
|
(
|
(
|
(
|
||||||||||||||||||||
Addition: Year-end fair value of equity awards granted during the covered fiscal year that were outstanding and unvested at the covered fiscal year end
|
|
|
|
|
|
|
||||||||||||||||||||
Addition (Subtraction): Year-over-year change in fair value at covered fiscal year end of equity awards granted in prior fiscal years that were outstanding and unvested at the covered fiscal year end
|
|
|
(
|
|
|
|
||||||||||||||||||||
Addition (Subtraction): Change as of the vesting date (from the end of the prior fiscal year) in fair value of equity awards granted in prior fiscal years that vested in the covered fiscal year
|
|
|
(
|
(
|
|
|
||||||||||||||||||||
Compensation Actually Paid (as calculated) |
|
|
|
|
|
|
80
|
Executive Compensation
|
2024 Proxy Statement
|
81
|
82
|
Executive Compensation
|
PROPOSAL 3
Ratification of the Selection of Ernst & Young LLP as Independent Registered Public Accounting Firm for the Company’s Fiscal Year Ending November 2, 2024
Our Audit Committee is directly responsible for the appointment, compensation, retention and oversight of ADI’s independent registered public accounting firm. To execute this responsibility, the Audit Committee engages in an annual evaluation of the independent registered public accounting firm’s qualifications, performance and independence and whether the retention of the independent public accounting firm is in the best interests of the company and our shareholders.
Our Board of Directors unanimously recommends that you vote
FOR
the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2024.
|
||
2024 Proxy Statement
|
83
|
Name |
Fiscal Year
2023
|
Fiscal Year
2022
|
||||||||||||
Audit Fees | $ | 7,743,000 | $ | 7,213,000 | ||||||||||
Audit-Related Fees | $ | 139,000 | $ | 104,000 | ||||||||||
Tax Fees | $ | 3,160,000 | $ | 3,975,000 | ||||||||||
All Other Fees | $ | 8,000 | $ | 135,000 | ||||||||||
Total Fees | $ | 11,050,000 | $ | 11,427,000 |
84
|
Audit Matters |
2024 Proxy Statement
|
85
|
Name and Address of Beneficial Owner |
Shares
Beneficially
Owned
|
Percent of
Common Stock
Beneficially
Owned
(1)
|
||||||
5% Shareholders: | ||||||||
Vanguard Group Inc.
(2)
|
|
|
||||||
100 Vanguard Boulevard
|
|
|
||||||
Malvern, Pennsylvania 19355
|
46,000,666 | 9.3 | % | |||||
BlackRock Inc.
(3)
|
|
|
||||||
55 East 52nd Street
|
|
|
||||||
New York, New York 10055
|
41,660,333 | 8.4 | % |
86
|
Beneficial Ownership of Common Stock |
Name and Address of Beneficial Owner
(1)
|
Shares
Beneficially Owned (2) |
Shares
Acquirable Within 60 Days (3) |
Total
Beneficial Ownership |
Percent of
Common Stock Beneficially Owned (4) |
||||||||||
André Andonian | 928 | 1,228 | 2,156 | * | ||||||||||
Gregory Bryant
|
7,645 | — | 7,645 | * | ||||||||||
James A. Champy
(5)
|
44,687 | 8,868 | 53,555 | * | ||||||||||
Anantha P. Chandrakasan | 7,625 | 1,228 | 8,853 | * | ||||||||||
Edward H. Frank
(6)
|
10,020 | 1,228 | 11,248 | * | ||||||||||
Laurie H. Glimcher | 3,530 | 1,228 | 4,758 | * | ||||||||||
Karen M. Golz | 8,679 | 1,228 | 9,907 | * | ||||||||||
Peter B. Henry
|
— | 314 | 314 | * | ||||||||||
Vivek Jain
|
5,848 | 1,436 | 7,284 | * | ||||||||||
Stephen M. Jennings
|
— | 888 | 888 | * | ||||||||||
Mercedes Johnson | 6,608 | 1,228 | 7,836 | * | ||||||||||
Prashanth Mahendra-Rajah
(7)
|
47,575 | — | 47,575 | * | ||||||||||
Vincent Roche
(8)
|
60,713 | 377,178 | 437,891 | * | ||||||||||
Anelise Sacks
|
14,500 | 4,183 | 18,683 | * | ||||||||||
Kenton J. Sicchitano | 27,489 | 8,868 | 36,357 | * | ||||||||||
Ray Stata
(9)
|
822,047 | 26,988 | 849,035 | * | ||||||||||
Susie Wee
|
5,751 | 1,228 | 6,979 | * | ||||||||||
All directors and executive officers as a group (18 persons, consisting of
6 executive officers and 12 non-employee directors) (9) |
1,076,610 | 437,319 | 1,513,929 | * |
2024 Proxy Statement
|
87
|
88
|
Beneficial Ownership of Common Stock |
2024 Proxy Statement
|
89
|
(a) | (b) | (c) | |||||||||||||||||||||||||||
Plan Category |
Number of Securities to
be Issued Upon Exercise of Outstanding Options, Warrants, and Rights |
Weighted-Average
Exercise Price of Outstanding Options, Warrants, and Rights |
Number of Securities
Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) |
||||||||||||||||||||||||||
Equity compensation plans approved by shareholders | 6,344,153 |
(1)
|
|
$ | 75.77 |
(2)
|
|
19,625,705 |
(3)
|
||||||||||||||||||||
Equity compensation plans not approved by shareholders
(4)
|
1,297,282 |
(4)
|
|
$ | — | 8,530,457 |
(4)
|
||||||||||||||||||||||
Total | 7,641,435 | $ | 75.77 |
(2)
|
|
28,156,162 |
90
|
Beneficial Ownership of Common Stock |
PROPOSAL 4
Simple Majority Vote
Our Board of Directors unanimously recommends that you vote
AGAINST
this shareholder proposal.
|
||
2024 Proxy Statement
|
91
|
92
|
Shareholder Proposal
|
2024 Proxy Statement
|
93
|
94
|
Q&A About Annual Meeting and Voting |
2024 Proxy Statement
|
95
|
96
|
Q&A About Annual Meeting and Voting |
2024 Proxy Statement
|
97
|
98
|
Additional Information |
2024 Proxy Statement
|
99
|
Twelve months ended October 28, 2023
|
||||||||
Gross margin | $ | 7,877,218 | ||||||
Gross margin percentage | 64.0 | % | ||||||
Acquisition related expenses | 1,047,309 | |||||||
Adjusted gross margin | $ | 8,294,527 | ||||||
Adjusted gross margin percentage | 72.5 | % | ||||||
Operating income | $ | 3,823,112 | ||||||
Operating margin | 31.1 | % | ||||||
Acquisition related expenses | 2,023,532 | |||||||
Acquisition related transaction costs | 7,069 | |||||||
Special charges, net | 160,710 | |||||||
Adjusted operating income | $ | 6,014,423 | ||||||
Adjusted operating margin | 48.9 | % | ||||||
Diluted EPS | $ | 6.55 | ||||||
Acquisition related expenses | 3.97 | |||||||
Acquisition related transaction costs | 0.01 | |||||||
Special charges, net | 0.32 | |||||||
Tax related items | (0.77) | |||||||
Adjusted diluted EPS | $ | 10.09 |
Twelve months ended October 28, 2023
|
||||||||
Revenue | $ | 12,305,539 | ||||||
Net cash provided by operating activities | $ | 4,817,634 | ||||||
% of revenue | 39 | % | ||||||
Capital expenditures | $ | (1,261,463) | ||||||
Free cash flow
(1)
|
$ | 3,556,171 | ||||||
% of revenue | 29 | % |
100
|
Appendix A: Reconciliation of GAAP Measures to Non-GAAP Measures
|
2024 Proxy Statement
|
101
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
Customers
Customer name | Ticker |
---|---|
NACCO Industries, Inc. | NC |
Science Applications International Corporation | SAIC |
Texas Instruments Incorporated | TXN |
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|