Texas Instruments 2015 Annual Report Download - page 96

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PROXY STATEMENT
The committee set the 2014 base-salary rate for each of the named executive officers in January 2014. In keeping with its strategy, the
committee set the annual base-salary rates to be below the estimated median level of salaries expected to be paid to similarly situated
executives of the Comparator Group in 2014.
In June 2014, the committee increased the salary rate for Mr. Crutcher and Mr. Anderson as they assumed new leadership roles. The
salary adjustments were consistent with the policy described in the preceding paragraph.
The salary differences between the named executive officers were driven primarily by the market rate of pay for each officer, and not
the application of a formula designed to maintain a differential between the officers.
Equity compensation
In 2014, the committee awarded equity compensation to each of the named executive officers. The grants are shown in the Grants
of plan-based awards in 2014 table on page 100. The grant date fair value of the awards is reflected in that table and in the “Stock
Awards” and “Option Awards” columns of the 2014 summary compensation table on page 98. The table below is provided to assist the
reader in comparing the grant date fair values and number of shares for each of the years shown in the summary compensation table.
Officer Year
Grant Date
Fair Value *
Stock Options
(in Shares)
Restricted
Stock Units
(in Shares)
R. K. Templeton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014
2013
2012
$
$
$
9,800,034
9,299,374
9,074,035
602,692
525,000
475,000
111,137
175,000
158,334
K. P. March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014
2013
2012
$
$
$
2,700,039
2,656,964
2,865,478
166,048
150,000
150,000
30,620
50,000
50,000
B. T. Crutcher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014
2013
2012
$
$
$
$
4,500,008
3,985,446
3,581,848
2,760,000 **
276,747
225,000
187,500
—
51,032
75,000
62,500
100,000**
S. A. Anderson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 $
$
2,700,039
2,000,003 ***
166,048
—
30,620
41,745 ***
K. J. Ritchie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014
2013
2012
$
$
$
4,000,015
3,542,630
3,343,079
245,997
200,000
175,000
45,362
66,667
58,334
* See notes 2 and 3 to the summary compensation table on page 98 for information on how grant date fair value was calculated.
** Retention grant made in June 2012, when Mr. Crutcher assumed new responsibilities.
*** Retention grant made in June 2014, when Mr. Anderson assumed new responsibilities.
In January 2014, the committee awarded equity compensation to each of the named executive officers. The committee’s objective was
to award to those officers equity compensation that had a grant date fair value at approximately the median market level, in this case
the 40th to 60th percentile of the 3-year average of equity compensation (including an estimate of amounts for 2014) granted by the
Comparator Group.
In assessing the market level, the committee considered information presented by TI’s Compensation and Benefits organization
(prepared using data provided by the committee’s compensation consultant) on the estimated value of the awards expected to be
granted by the Comparator Group to similarly situated executives. The award value was estimated using the same methodology used for
financial accounting.
For each officer, the committee set the desired grant value. The committee decided to allocate the value equally between restricted
stock units and options for each officer, to give equal emphasis to promoting retention, motivating the executive and aligning his
interests with those of shareholders.