Texas Instruments 2014 Annual Report Download - page 94

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88
PROXY STATEMENT
Element Purpose Strategy Terms
Performance bonus To motivate executives and
reward them according to
the company’s relative and
absolute performance and
the executive’s individual
performance
Determined primarily on the basis of one-year
and three-year company performance on
certain measures (revenue growth percent,
operating margin and total shareholder
return1) as compared to competitors and on
our strategic progress in key markets and
with customers. These factors have been
chosen to reflect our near-term financial
performance as well as our progress in
building long-term shareholder value.
The committee aims to pay total cash
compensation (base salary, profit sharing
and bonus) appropriately above median
if company performance is above that of
competitors, and pay total cash compensation
appropriately below the median if company
performance is below competitors.
The committee does not rely on formulas
or performance targets or thresholds.
Instead it uses its judgment based on its
assessment of the factors described above.
Determined by the committee and
paid in a single payment after the
performance year
Long-term compensation, awarded in equity
Stock options
and restricted
stock units
Alignment with
shareholders; long-term
focus; retention, particularly
with respect to restricted
stock units
We grant a combination of nonqualified
stock options and restricted stock units,
generally targeted at the median level of
equity compensation awarded to executives
in similar positions at the Comparator Group.
The terms and conditions of stock
options and restricted stock units
are summarized on pages 102-103.
The committee’s grant procedures
are described on page 95.
Comparator group
The Compensation Committee considers the market level of compensation when setting the salary, bonuses and equity compensation of the
executive officers. The committee targets salary below market median in order to weight total compensation to performance-based elements.
To estimate the market level of pay, the committee uses information provided by its compensation consultant and TI’s Compensation and
Benefits organization about compensation paid to executives in similar positions at a peer group of companies (the “Comparator Group”).
The committee sets the Comparator Group. In general, the Comparator Group companies (1) are U.S.-based, (2) engage in the
semiconductor business or other electronics or information technology activities, (3) have executive positions comparable in complexity
to those of TI and (4) use forms of executive compensation comparable to TI’s.
Shown in the table below is the Comparator Group used for the compensation decisions for 2014.
Analog Devices, Inc.
Applied Materials, Inc.
Broadcom Corporation
Computer Sciences Corporation
eBay Inc.
EMC Corporation
Emerson Electric Co.
Intel Corporation
Motorola Solutions, Inc.
QUALCOMM Incorporated
Seagate Technology
TE Connectivity Ltd.
Western Digital Corporation
Xerox Corporation
1 Total shareholder return refers to the percentage change in the value of a stockholder’s investment in a company over the relevant
time period, as determined by dividends paid and the change in the company’s share price during the period. See page 93.