Texas Instruments 2015 Annual Report Download - page 97

Download and view the complete annual report

Please find page 97 of the 2015 Texas Instruments annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

 
PROXY STATEMENT
Before approving the grants, the committee reviewed the amount of unvested equity compensation held by the officers to assess its
retention value. In making this assessment, the committee used its judgment and did not apply any formula, threshold or maximum.
This review did not result in an increase or decrease of the awards.
The exercise price of the options was the closing price of TI stock on January 23, 2014, the second trading day after the company
released its annual and fourth quarter financial results for 2013. All grants were made under the Texas Instruments 2009 Long-Term
Incentive Plan, which shareholders approved in April 2009.
In addition to the January 2014 awards described above, the committee awarded restricted stock units to Mr. Anderson as he assumed
new and broader responsibilities in June 2014. The award was intended to increase the retention value of his outstanding equity
compensation. In setting the value, the committee applied its judgment following a review of the current retention value.
All grants have the terms described on pages 102-103. The differences in the equity awards between the named executive officers
were primarily the result of differences in the applicable estimated market level of equity compensation for their positions, and not the
application of any formula designed to maintain differentials between the officers.
Bonus
In January 2015, the committee set the 2014 bonus compensation for executive officers based on its assessment of 2014 performance.
In setting the bonuses, the committee used the following performance measures to assess the company:
•฀ The relative one-year and three-year performance of TI as compared with competitor companies, as measured by
○revenue growth,
○operating profit as a percentage of revenue,
○total shareholder return; and
•฀ The absolute one-year and three-year performance of TI on the above measures.
In addition, the committee considered our strategic progress by reviewing how competitive we are in key markets with our core
products and technologies, as well as the strength of our relationships with customers.
One-year relative performance on the three measures and one-year strategic progress were the primary considerations in the
committee’s assessment of the company’s 2014 performance. In assessing performance, the committee did not use formulas,
thresholds or multiples. Because market conditions can quickly change in our industry, thresholds established at the beginning of a
year could prove irrelevant by year-end. The committee believes its approach, which assesses the company’s relative performance
in hindsight after year-end, gives it the insight to most effectively and critically judge results and encourages executives to pursue
strategies that serve the long-term interests of the company and its shareholders.
In the comparison of relative performance, the committee used the following companies (the “competitor companies”):2
Advanced Micro Devices, Inc.
Altera Corporation
Analog Devices, Inc.
Atmel Corporation
Broadcom Corporation
Fairchild Semiconductor International, Inc.
Freescale Semiconductor, Ltd.
Infineon Technologies AG
Intel Corporation
Intersil Corporation
Linear Technology Corporation
Marvell Technology Group Ltd.
Maxim Integrated Products, Inc.
Microchip Technology Incorporated
NVIDIA Corporation
NXP Semiconductors N.V.
ON Semiconductor Corporation
QUALCOMM Incorporated
STMicroelectronics N.V.
Xilinx, Inc.
This list includes both broad-based and niche suppliers that operate in our key markets or offer technology that competes with our
products. The committee considers annually whether the list is still appropriate in terms of revenue, market capitalization and changes
in business activities of the companies. In July 2014, the committee removed LSI Corporation from the list following its acquisition by
another company. The committee made no other change to the list of competitor companies in 2014.
2 To the extent the companies had not released financial results for the year or most recent quarter, the committee based its
evaluation on estimates and projections of the companies’ financial results for 2014.