Texas Instruments 2015 Annual Report Download - page 92

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86
PROXY STATEMENT
Although the outcome of this vote is not binding on the company or the board, the Compensation Committee of the board will consider it
when setting future compensation for the executive officers.
The board of directors recommends a vote FOR the resolution approving the named executive officer compensation for 2014,
as disclosed in this proxy statement.
Compensation Discussion and Analysis
This section describes TI’s compensation program for executive officers. It will provide insight into the following:
•฀ The elements of the 2014 compensation program, why we selected them and how they relate to one another; and
•฀ How we determined the amount of compensation for 2014.
Currently, TI has 10 executive officers. These executives have the broadest job responsibilities and policy-making authority in the
company. We hold them accountable for the company’s performance and for maintaining a culture of strong ethics. Details of
compensation for our CEO, CFO and the three other highest paid individuals who were executive officers in 2014 (collectively called the
“named executive officers”) can be found in the tables beginning on page 98.

•฀ TI’s compensation program is structured to pay for performance and deliver rewards that encourage executives to
think and act in both the short- and long-term interests of our shareholders. The majority of total compensation for our
executives each year comes in the form of variable cash and equity compensation. Variable cash is tied to the short-term
performance of the company, and the value of equity is tied to the long-term performance of the company. We believe our
compensation program holds our executive officers accountable for the financial and competitive performance of TI.
•฀ 2014 compensation decisions for the CEO:
○Base salary was increased by 3.3 percent over 2013.
○The grant date fair value of equity compensation awarded in 2014 was 5 percent higher than in 2013.
○The bonus decision was based primarily on the following performance results in 2014:
2014 Absolute Performance 2014 Relative Performance **
Revenue Growth: Total TI
Revenue Growth without legacy wireless products *
6.9%
11.0%
Median
Above Median
Profit from Operations as a % of Revenue (PFO%) 30.3% Above Median
Total Shareholder Return (TSR) 25.1% Above Median
Year-on-Year Change in CEO Bonus
(2014 bonus compared to 2013) 15% change
* Revenue growth for total TI excluding wireless products that we exited by year-end 2013. See note 3 on page 92.
** Relative to semiconductor competitors as outlined on page 91. Includes estimates and projections of certain competitors’
financial results. See pages 92-93 for details of the Compensation Committee’s assessment of TI’s performance.
•฀ Our executive compensation program is designed to encourage executive officers to pursue strategies that serve the interests of
the company and shareholders, and not to promote excessive risk-taking by our executives. It is built on a foundation of sound
corporate governance and includes:
○Executive officers do not have employment contracts and are not guaranteed salary increases or bonus amounts.
○We have never repriced stock options. We do not grant reload options. We grant equity compensation with double-trigger
change-in-control terms, which accelerate the vesting of grants only if the grantee has been terminated involuntarily within a
limited time after a change in control of the company.