Texas Instruments 2014 Annual Report Download - page 86

Download and view the complete annual report

Please find page 86 of the 2014 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
The Audit Committee met six times in 2014. The Audit Committee holds regularly scheduled meetings and reports its activities to the
board. The committee also continued its long-standing practice of meeting directly with our internal audit staff to discuss the audit plan
and to allow for direct interaction between Audit Committee members and our internal auditors. Please see page 110 for a report of
the committee.
Compensation Committee
All members of the Compensation Committee are independent. From April 19, 2013, to April 17, 2014, the committee members were
Ms. Cox (Chair), Ms. Patsley and Mr. Sanchez. Since April 18, 2014, the committee members have been Mr. Sanchez (chair), Ms. Patsley
and Ms. Whitman. The committee is responsible for:
•฀ Reviewing the performance of the CEO and determining his compensation.
•฀ Setting the compensation of the company’s other executive officers.
•฀ Overseeing administration of employee benefit plans.
•฀ Making recommendations to the board regarding:
○Institution and termination of, revisions in and actions under employee benefit plans that (i) increase benefits only for
officers of the company or disproportionately increase benefits for officers of the company more than other employees of the
company, (ii) require or permit the issuance of the company’s stock or (iii) the board must approve.
○Reservation of company stock for use as awards of grants under plans or as contributions or sales to any trustee of any
employee benefit plan.
•฀ Taking action as appropriate regarding the institution and termination of, revisions in and actions under employee benefit plans
that are not required to be approved by the board.
•฀ Appointing, setting the compensation of, overseeing and considering the independence of any compensation consultant or
other advisor.
The Compensation Committee met seven times in 2014. The Compensation Committee holds regularly scheduled meetings, reports its
activities to the board, and consults with the board before setting annual executive compensation. Please see page 97 for a report of
the committee.
In performing its functions, the committee is supported by the company’s Human Resources organization. The committee has the
authority to retain any advisors it deems appropriate to carry out its responsibilities. The committee retained Pearl Meyer & Partners as
its compensation consultant for the 2014 compensation cycle. The committee instructed the consultant to advise it directly on executive
compensation philosophy, strategies, pay levels, decision-making processes and other matters within the scope of the committee’s
charter. Additionally, the committee instructed the consultant to assist the company’s Human Resources organization in its support
of the committee in these matters with such items as peer-group assessment, analysis of the executive compensation market, and
compensation recommendations.
The Compensation Committee considers it important that its compensation consultant’s objectivity not be compromised by other
engagements with the company or its management. In support of this belief, the committee has a policy on compensation consultants,
a copy of which may be found on www.ti.com/corporategovernance. During 2014, the committee determined that its compensation
consultant was independent of the company and had no conflict of interest.
The Compensation Committee considers executive compensation in a multistep process that involves the review of market information,
performance data and possible compensation levels over several meetings leading to the annual determinations in January. Before
setting executive compensation, the committee reviews the total compensation and benefits of the executive officers and considers the
impact that their retirement, or termination under various other scenarios, would have on their compensation and benefits.
The CEO and the senior vice president responsible for Human Resources, who is an executive officer, are regularly invited to attend
meetings of the committee. The CEO is excused from the meeting during any deliberations or vote on his compensation. No executive
officer determines his or her own compensation or the compensation of any other executive officer. As members of the board, the
members of the committee receive information concerning the performance of the company during the year and interact with our
management. The CEO gives the committee and the board an assessment of his own performance during the year just ended.
He also reviews the performance of the other executive officers with the committee and makes recommendations regarding their
compensation. The senior vice president responsible for Human Resources assists in the preparation of and reviews the compensation
recommendations made to the committee other than for her compensation.