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![]() | ![]() VINCENT ROCHE Chief Executive Officer and Chair of the Board of Directors |
2023 Proxy Statement |
Items of Business The 2023 Annual Meeting of Shareholders of Analog Devices, Inc. (ADI), or Annual Meeting, will be held at our offices located at 125 Summer Street, Boston, Massachusetts 02110, on Wednesday, March 8, 2023 at 9:00 a.m. local time. At the Annual Meeting, shareholders will consider and vote on the following matters: 1.To elect the 11 director nominees named in this Proxy Statement to our Board of Directors, each to serve for a term expiring at the next annual meeting of shareholders; 2.To approve, by a non-binding “say-on-pay” vote, the compensation of our named executive officers, as described in the Compensation Discussion and Analysis, executive compensation tables and accompanying narrative disclosures in this Proxy Statement; 3.To hold a non-binding “say-on-frequency” vote regarding the frequency of future advisory votes on the compensation of our named executive officers; and 4.To ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending October 28, 2023. The shareholders will also act on any other business that may properly come before the Annual Meeting. Our Board of Directors recommends that you vote FOR each director nominee included in Proposal 1, FOR each of Proposals 2 and 4, and for an advisory vote every 1 YEAR in Proposal 3. The full text of these proposals is set forth in this Proxy Statement. Please note that we are furnishing proxy materials and access to our Proxy Statement to our shareholders via our website instead of mailing printed copies to each of our shareholders. By doing so, we save costs and reduce our impact on the environment. Beginning on January 20, 2023, we will mail to our shareholders a Notice of Internet Availability of Proxy Materials, or Notice, which contains instructions on how to access our proxy materials and vote online. The Notice also contains instructions on how each of our shareholders can receive a paper copy of our proxy materials, including this Proxy Statement, our 2022 Annual Report and a form of proxy card or voting instruction form. All shareholders who do not receive the Notice, including shareholders who have previously requested to receive paper copies of proxy materials, will receive a paper copy of the proxy materials by mail unless they have previously requested delivery of proxy materials electronically. Shareholders of record at the close of business on the record date of January 3, 2023 are entitled to vote at the Annual Meeting. Your vote is important no matter how many shares you own, and we encourage you to vote promptly whether or not you plan to attend the Annual Meeting. By Order of the Board of Directors, | |||||||||||
DATE AND TIME Wednesday, March 8, 2023 9:00 a.m. local time PLACE 125 Summer Street Boston, MA 02110 RECORD DATE Tuesday, January 3, 2023 | |||||||||||
How to vote: Your vote is important VOTE BY INTERNET Go to www.proxyvote.com You will need the 16-digit control number that appears on your proxy card or the Notice. VOTE BY TELEPHONE Call 1-800-690-6903 You will need the 16-digit control number that appears on your proxy card or the Notice. VOTE BY MAIL Mark, sign, date, and mail your proxy card or your voting instruction form. No postage is required if mailed in the United States. | |||||||||||
![]() | ![]() JANENE ASGEIRSSON Chief Legal Officer, Chief Risk Officer and Secretary January 20, 2023 | ||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on March 8, 2023: This Proxy Statement and the 2022 Annual Report are available for viewing, printing and downloading at https://investor.analog.com/financial-info/annual-reports. | |||||||||||
Forward-Looking Statements This Proxy Statement contains forward-looking statements regarding future events and our future results that are subject to the safe harbor created under the Private Securities Litigation Reform Act of 1995 and other safe harbors under the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” “could” and “will,” and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections regarding our future financial performance; our anticipated growth and trends in our businesses; new or improved innovative solutions, products, and technologies; the effects of business, economic, political, legal, and regulatory impacts or conflicts upon our global operations; manufacturing delays, product availability, and supply chain disruptions; recruiting or retaining our key personnel and making changes to our compensation programs; our future liquidity, capital needs and capital expenditures; our future market position, expected competitive changes in the marketplace and changes in demand and supply for our products; our ability to pay dividends or repurchase stock; our ability to service our outstanding debt; our expected tax rate; our ability to successfully integrate acquired businesses and technologies, including the acquired business, operations and employees of Maxim Integrated Products, Inc.; environment, social and governance related goals and commitments; and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified in Part I, Item 1A. “Risk Factors” and elsewhere in our most recent Annual Report on Form 10-K. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements, including to reflect events or circumstances occurring after the date of the filing of this Proxy Statement, except to the extent required by law. | |||||
DURING THE ANNUAL MEETING For details on voting your shares during the Annual Meeting, see Q&A About Annual Meeting and Voting on page 88. Web links throughout this document are provided for convenience only, and the content on the referenced websites does not constitute a part of this Proxy Statement. The sum and/or computation of individual numerical amounts or percentages disclosed in this Proxy Statement may not equal the total due to rounding. |
2023 Proxy Statement |
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Founded: | 1965 | ||||
Headquarters: | Wilmington, MA | ||||
Employees: | ~24,450 | ||||
Office Locations: | 31 Countries Worldwide sales, field applications, product development, design, service and technical support | ||||
Products: | ~75,000 SKUs | ||||
Customers: | 125,000+ | ||||
Publicly Listed – Nasdaq: | ADI | ||||
Design Centers: | ~80 | ||||
Global Manufacturing: | United States (Massachusetts, Oregon, Washington) | Ireland | Philippines | Malaysia | Thailand |
2023 Proxy Statement | 1 |
Deploying Capital Efficiently | ÑAnnual R&D investment of $1.7B with 95% targeted on most attractive B2B opportunities ÑExtracting value from M&A to enhance scale and scope, creating a destination for the world’s best talent: Maxim in FY’21, Linear Technology in FY’17 and Hittite in FY’14 ÑDelivered on our commitment to return at least 100% of free cash flow returning $4.6B through share repurchases and dividends | ||||
Deepening Customer’s Centricity | ÑPartnering more deeply with customers to deliver complete solutions ÑStrengthening customer engagement: customers enhancing software focus, leaving more of the increasingly complex hardware challenges to ADI ÑAccelerating innovation engine to develop cutting-edge technologies. Opportunity pipeline value achieved record levels in FY’22 | ||||
Capitalizing on Secular Trends | ÑAutomotive: Electrification, In-Cabin Experience, Advanced Driver Assistance System (Autonomous Mobility) ÑIndustrial: Industry 4.0, Digital Health, Space, Sustainable Energy ÑCommunications: Next-Gen Wireless (5G), Cloud/Edge Computing | ||||
$12B | 62.7% | 27.3% | $5.25 | $4.5B | ||||||||||
Revenue | Gross Margins | Operating Margins | Diluted Earnings per Share | Operating Cash Flow | ||||||||||
~87% | 73.6% | 49.4% | $9.57 | $3.8B | ||||||||||
Business-to-Business Revenue | Adjusted Gross Margins* | Adjusted Operating Margins* | Adjusted Diluted Earnings per Share* | Free Cash Flow* | ||||||||||
2 | Highlights |
ÑForbes 2022 World’s Top Female Friendly Companies | ÑLinkedIn’s Top Companies 2022: Technology & Information | ÑInvestor Business Daily’s 100 Best ESG Companies | ||||||
Ñ2022 JUST Capital Workforce Equity and Mobility Ranking | Ñ50/50 Women on Boards-3+ Women on Company Boards 2022 | ÑNewsweek America’s Most Responsible Companies 2022 | ||||||
Ñ2023 JUST Capital 100 | ÑGlobal 100 Most Sustainable Corporations in the World by Corporate Knights 2022 | Ñ2022 Carbon Clean 200 |
2023 Proxy Statement | 3 |
ÑTRANSPARENCY | ENVIRONMENT | SOCIAL | ||||||||||||||||||
ÑPublished our 2021 ESG Report ÑMapped our ESG Report to GRI (Core Option), SASB, TCFD and the U.N.’s Sustainable Development Goals ÑReported program updates to CDP Climate Change and Water Security, EcoVadis, and KnowTheChain ÑPublished online our most recent EEO-1 reports | ÑContinued to innovate and develop solutions with meaningful environmental benefits for our customers, including our Battery Management Solutions, Energy Storage Systems, precision monitoring for enabling industrial transformation, and leveraging our intelligent sensing systems to continue towards our environmental commitments ÑFolded our legacy Maxim partners into ADI’s strong environmental commitments, including to become carbon neutral by 2030 and achieve net zero emissions by 2050 or sooner, 50% manufacturing water recycling rate by 2025, and zero manufacturing waste to landfill by 2030 ÑRemained signatories to the U.N. Global Compact and their campaign, Business Ambition for 1.5°C | ÑDisclosed new DE&I goals to increase the number of women and people of color in leadership and engineering roles and more broadly ÑPartnered with an institution that is recognized as one of the Historically Black Colleges and Universities (HBCUs) to enhance its engineering curriculum and research efforts ÑContinued to support STEM education programs, including through our collaboration with University of Massachusetts Lowell to create an RF/Microwave Learning Lab ÑProvided community grants and matched employee donations to support 900+ unique organizations through the Analog Devices Foundation |
GOVERNANCE | ||||||||||||||||||||
ÑAppointed Vincent Roche, our CEO, as Chair of the Board of Directors to lead ADI’s ongoing transformation, with James Champy continuing to serve as Presiding Director ÑContinued to focus on active board refreshment by welcoming André Andonian, who brings significant industry, strategic and leadership experience to our Board of Directors | ÑExpanded the role of the Compensation and Talent Committee of the Board of Directors to oversee human capital and diversity initiatives ÑEngaged with shareholders representing nearly 30% of total shares outstanding, with a focus on ESG and compensation practices | ÑFormed a management-led cross-functional steering committee chaired by our Chief Information Security Officer that is charged with security governance, coordination and monitoring of cyber risks, potential cyber incidents and key mitigation initiatives ÑChief Information Officer began providing quarterly cyber and IT reports to the Audit Committee of the Board of Directors ÑEnhanced our global data privacy and compliance programs, including updating policies and procedures, publishing values, expanding data privacy trainings for employees, and centralizing privacy inquiries |
4 | Highlights |
![]() We’ve learned much about our employees and how we work during the challenges of these past three years. As a company whose culture recognizes the importance of continuous learning, we also recognize that the company itself must continually learn and evolve. How we attract and retain innovative talent across the globe, leveraging industry and best practices, presents incredible opportunities for us to solidify our reputation as the destination for the best and brightest minds. | |||||
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![]() | MARIYA TRICKETT Chief People Officer |
Empower Innovation and Learning | Empowering our teams to innovate and learn across every level and function | Our pandemic-inspired ADI Ignite Network “innovates how we innovate” by engaging and gathering novel ideas from all employees. Development teams across departments come together to deliver experiences that quicken onboarding, build managerial skills and ready employees for more complex roles. We prioritize on-the-job experiences as a way to build skills and drive learning. | ||||||
Focus on Social Purpose | Fostering a workplace where the best minds can come together to engineer good | The Analog Devices Foundation is creating a more sustainable future through community grants, employee matching gifts for both direct donations and volunteer hours, and in-kind donations. In collaboration with employees, we are addressing inequities in STEM education through partnership with an institution that is recognized as one of the HBCUs. | ||||||
Drive Engagement through Employee Experience | Listening and responding to employee feedback | Throughout the year, we conduct employee surveys and listening activities to gain feedback and learn more about ADI’s strengths as a workplace and opportunities for improvement. This enables us to take action and provide employees the tools they need to grow and prosper. | ||||||
Foster Inclusion and Promote Equal Opportunity | Taking a global approach to equity and inclusion | We are evolving our mission to include global dimensions of diversity. This means working with our Global Diversity Council and Working Group to understand what marginalization looks like in countries outside the United States so we can customize efforts to address underrepresentation. We are committed to building leadership teams that reflect the diversity of our employees and the communities we serve. To support this ambition, we are tailoring development programs to meet the needs of our underrepresented populations. | ||||||
Build the Workforce of the Future | Evolving our workforce skills to drive innovation and sustain a competitive advantage | Our engineering team members continue to run a Software Engineering Reskilling Program, specifically designed to address ADI’s evolving talent needs by expanding the skills of our technical workforce in the software domain. We are committed to employee growth and development, as well as building high-performing teams. This includes providing essential training such as the Executive Leadership Program and Management Essentials curricula that prepare employees to lead teams today and grow the business tomorrow and offering programs including our Leading ADI Forward program designed to help our leaders build relationships and drive our strategic vision throughout the organization. | ||||||
2023 Proxy Statement | 5 |
Addressing Inequity Through a Holistic and Global Approach | ÑWe continue to transform the way we operate so inclusion and equity remain an integrated part of how we do business. This means redesigning our talent practices to address systemic barriers and building a culture that confronts bias. ÑAt a high level, our focus is on programs that target societal and organizational practices. From a societal perspective, we are establishing new partnerships and launching programs that increase access to STEM education for communities that are historically denied access. From an organizational perspective, we are revising our processes to mitigate bias and customizing our training programs to accelerate the development of underrepresented communities. | ||||
Engaging and Empowering Employees | ÑWe have formed a Global Diversity Council that is made up of senior leaders from across our organization. Together, they represent a mix of business units, regions, genders and races. They meet quarterly to provide feedback on strategic priorities and help to champion organizational change. ÑWe have a growing list of Employee Networks that are the driving force behind our evolving culture. Comprised of over 2,500 members across eight networks and thirty-five chapters, they foster community, build allyship, accelerate professional development and impact organizational policy. Each network has a formalized leadership team and structure, which includes an executive sponsor and annual goals. | ||||
Building Educational and Professional Partnerships | ÑWe continue to expand our outreach and support higher education, including engagement with an HBCU which includes sponsoring a research project enabling students dedicated time to explore and innovate. ÑIn addition, we continue our outreach to professional associations that serve underrepresented communities. We host educational talks and focus on skill building as a way to increase candidate capabilities and foster greater brand and STEM awareness. | ||||
Enhancing and Supporting Diversity | ÑWe recognize that employees of different identities encounter different systemic and cultural challenges. Understanding these unique experiences allows us to create impactful learning programs that build community, drive performance and advance gender and racial equity. ÑOne example is Elevate, our flagship leadership development series for women. Employees in this program build new skills and expand their global networks through an exciting combination of action learning, mentorship and sponsorship. The program places an emphasis on enhancing business insight, increasing customer focus, developing strategic mindsets and improving situational adaptability. The program cohorts were thoughtfully assembled to include representation from technical, sales and corporate functions across Asia, Europe and North America. | ||||
Ensuring Governance and Oversight | ÑThe Nominating and Corporate Governance Committee oversees ADI’s ESG policies, goals and programs, including reviewing our sustainability initiatives and goals, as well as our progress towards achieving those goals. Management regularly reports to our full Board of Directors on ESG topics, providing an update on key metrics and progress. Our Board of Directors provides direct feedback on strategic approach and initiatives once a year. Our Leadership Team, which includes our executive officers and any Senior Vice President reporting to the CEO, is engaged collectively on a semi-annual basis, and individual leaders provide ongoing sponsorship of core initiatives, such as our HBCU partnership and secondary school outreach program. | ||||
6 | Highlights |
Proposal | Items of Business | Board Recommendation | Where to Find Details | ||||||||
1 | Election of 11 directors | FOR each director nominee | 17 | ||||||||
2 | Advisory approval of the compensation of our named executive officers | FOR | 48 | ||||||||
3 | Non-binding “say-on-frequency” vote regarding the frequency of future advisory votes on the compensation of our named executive officers | Every 1 YEAR | 79 | ||||||||
4 | Ratification of the selection of Ernst & Young LLP as independent registered public accounting firm for ADI’s fiscal year ending October 28, 2023 | FOR | 80 | ||||||||
What’s New We continually review our corporate strategy and governance practices to ensure that ADI is in a position to consistently deliver on our commitment to sustaining a culture of innovation, collaboration, solid performance, and fiduciary responsibility. We believe providing a broader understanding of our perspectives on these items will be beneficial to you as you consider this year’s voting matters. Updated items for fiscal year 2022 include: ÑAppointed Vincent Roche, our CEO, as Chair to lead ADI’s ongoing transformation, with James Champy continuing to serve as Presiding Director ÑContinued to focus on active board refreshment by welcoming André Andonian, who brings significant industry, strategic and leadership experience to our Board of Directors ÑExpanded the role of the Compensation and Talent Committee to oversee human capital and diversity initiatives ÑEngaged with shareholders representing nearly 30% of total shares outstanding, with a focus on ESG and compensation practices ÑFormed a management-led cross-functional steering committee chaired by our Chief Information Security Officer that is charged with security governance, coordination and monitoring of cyber risks, potential cyber incidents and key mitigation initiatives ÑChief Information Officer began providing quarterly cyber and IT reports to the Audit Committee ÑEnhanced our global data privacy and compliance programs, including updating policies and procedures, publishing values, expanding data privacy trainings for employees, and centralizing privacy inquiries | ||
2023 Proxy Statement | 7 |
PROPOSAL 1 Election of 11 Directors | |||||
The Board of Directors recommends a vote FOR each director nominee. | ÑSee page 17 | ||||
8 | Proxy Summary |
![]() | VINCENT ROCHE, 62 Director Since: 2013 Principal Occupation: Chief Executive Officer and Chair of the Board of Directors of Analog Devices, Inc. Committee Membership(s): CDC (Chair) | ![]() | KAREN M. GOLZ, 68 Director Since: 2018 Principal Occupation: Former Global Vice Chair of Ernst & Young Other Public Company Board(s): 2 Committee Membership(s): AC (Chair) | ||||||||
![]() | JAMES A. CHAMPY, 80 Director Since: 2003 Principal Occupation: Former Vice President of the Dell/ Perot Systems business unit of Dell, Inc. Committee Membership(s): NCGC (Chair) | ![]() | MERCEDES JOHNSON, 68 Director Since: 2021 Principal Occupation: Former Chief Financial Officer of Avago Technologies (now Broadcom Inc.) Other Public Company Board(s): 3 Committee Membership(s): AC | ||||||||
![]() | ANDRÉ ANDONIAN, 60 Director Since: 2022 Principal Occupation: Chief Executive Officer of Andonian Advisory Pte. Ltd. Other Public Company Board(s): 1 Committee Membership(s): NCGC, CDC | ![]() | KENTON J. SICCHITANO, 78 Director Since: 2003 Principal Occupation: Former Global Managing Partner of PricewaterhouseCoopers LLP Committee Membership(s): NCGC | ||||||||
![]() | ANANTHA P. CHANDRAKASAN, 54 Director Since: 2019 Principal Occupation: Dean of MIT’s School of Engineering and Vannevar Bush Professor of Electrical Engineering and Computer Science Committee Membership(s): NCGC; CDC | ![]() | RAY STATA, 88 Director Since: 1965 Principal Occupation: Co-Founder and Former Chair of the Board of Directors of Analog Devices, Inc. | ||||||||
![]() | EDWARD H. FRANK, 66 Director Since: 2014 Principal Occupation: Executive Chair of Gradient Technologies Other Public Company Board(s): 3 Committee Membership(s): CTC (Chair); CDC | ![]() | SUSIE WEE, 53 Director Since: 2019 Principal Occupation: Vice President, Google Committee Membership(s): CTC | ||||||||
![]() | LAURIE H. GLIMCHER, 71 Director Since: 2020 Principal Occupation: Professor of Medicine at Harvard Medical School and President and Chief Executive Officer of the Dana-Farber Cancer Institute Committee Membership(s): CTC |
AC Audit Committee | NCGC Nominating and Corporate Governance Committee | |||||||
CTC Compensation and Talent Committee | CDC Corporate Development Committee | |||||||
2023 Proxy Statement | 9 |
54% | 99% | 39 | 9 of 11 | ||||||||
of director nominees added in the last 5 years | overall attendance of incumbent directors at Board of Directors and Committee meetings in fiscal year 2022 | Board of Directors and Committee meetings held in fiscal year 2022 | director nominees are independent |
AGE* | INDEPENDENT DIRECTOR TENURE | DIVERSITY | ||||||
![]() | ![]() | ![]() | ||||||
Average Age: 68 years | Average Independent Director Tenure: 7.3 years |
10 | Proxy Summary |
![]() | Executive Leadership: Experienced leadership of complex global businesses | 6/11 | ![]() | ||||||||
![]() | Industry: Insight into key issues affecting ADI | 9/11 | ![]() | ||||||||
![]() | Innovation and Emerging Technologies: Expertise and thought leadership relating to technological innovation in our industry and our end markets | 9/11 | ![]() | ||||||||
![]() | Corporate Governance/Public Company Board: Knowledge of public company governance issues and policies to enhance Board practices | 7/11 | ![]() | ||||||||
![]() | Financial, Accounting, Auditing: Oversight of ADI’s audit function and preparation of financial statements and capital market expertise | 3/11 | ![]() | ||||||||
![]() | International, Large Scale Global Operations, Manufacturing: Insight into the many factors involved in overseeing management of ADI’s global footprint | 9/11 | ![]() | ||||||||
![]() | Government Affairs, Public Policy: Expertise handling government affairs and public policy matters | 3/11 | ![]() | ||||||||
![]() | Strategy: Oversight of management’s development and implementation of strategic priorities | 10/11 | ![]() | ||||||||
![]() | Risk Management, Regulatory, Compliance: Oversight of risks facing ADI and a comprehensive approach to risk management | 2/11 | ![]() | ||||||||
![]() | Cybersecurity, Information Systems: Oversight of our efforts to maintain our customers’ trust and protect the security of their data | 4/11 | ![]() | ||||||||
![]() | Mergers and Acquisitions: Experience evaluating strategic transactions | 4/11 | ![]() | ||||||||
![]() | ESG (Including Sustainability, Human Capital, and Diversity): Knowledge of ESG topics impacting ADI | 3/11 | ![]() |
2023 Proxy Statement | 11 |
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Karen M. Golz | Anantha P. Chandrakasan | Susie Wee | Laurie H. Glimcher | Mercedes Johnson | André Andonian | ||||||||||||
2018 | 2019 | 2019 | 2020 | 2021 | 2022 |
EFFECTIVE BOARD LEADERSHIP, INDEPENDENT OVERSIGHT AND STRONG CORPORATE GOVERNANCE | SHAREHOLDER RIGHTS AND ACCOUNTABILITY | ||||||||||
ÑMajority of directors are independent ÑAverage tenure of independent directors standing for re-election is approximately 7.3 years ÑRegular executive sessions of independent directors ÑClawback policy for our CEO and other named executive officers (NEOs) ÑActive engagement by our Board of Directors in overseeing talent and long-term succession planning for executives | ÑAnnual election of directors of a declassified Board of Directors ÑMajority voting for directors in uncontested director elections ÑProxy access bylaw ÑAnnual Board of Directors and Committee self-evaluations ÑNo dual class of stock or controlling shareholder |
![]() | Winter | ![]() | Spring | ![]() | Summer | ![]() | Fall | ||||||||||||||||||||||||||||
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ÑPublish Annual Report and Proxy Statement ÑConduct active outreach with top investors to discuss items to be considered at the annual meeting, if needed, given matters to be considered ÑAnnual Meeting | ÑEvaluate proxy season outcome and trends, corporate governance best practices and regulatory developments ÑPublish annual ESG report to inform stakeholders, including investors, about recent developments relating to ESG matters | ÑConduct active outreach with top investors to understand their top priorities and solicit feedback on governance topics, including ESG and compensation ÑShare investor feedback with our Board of Directors |
12 | Proxy Summary |
PROPOSAL 2 Advisory Approval of the Compensation of Our Named Executive Officers | |||||
The Board of Directors recommends a vote FOR this proposal. | ÑSee page 48 | ||||
Pay Element | Purpose | Time Period | Performance Measures | |||||||||||
Base Salary | ÑAttract and retain executive talent | ÑAnnual | ||||||||||||
Variable Cash Incentive | ÑMotivate and reward our executive officers for achieving short-term company financial objectives aligned with value creation | ÑPaid semi-annually, with quarterly corporate financial targets tied to corporate strategy of profitable growth | Ñ50%: quarterly OPBT margin Ñ50%: year-over-year revenue growth (measured quarterly) ÑMinimum OPBT margin required for payout | |||||||||||
Annual Long-Term Incentives | TSR PRSUs ![]() | ÑAlign executive officer and shareholder interest to drive superior relative TSR results | ÑCumulative three-year period | ÑRelative TSR compared to comparator group ÑPayouts capped at target if absolute TSR is negative | ||||||||||
Financial Metric PRSUs ![]() | ÑAlign executive officer and shareholder interests with long-term profitability | ÑOne-year, two-year cumulative and three-year cumulative time periods | ÑNon-GAAP operating profit | |||||||||||
RSUs ![]() | ÑAttract and retain key executives | ÑFour-year graded vesting | ÑNone |
2023 Proxy Statement | 13 |
14 | Proxy Summary |
Compensation Best Practices ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() | ||
2023 Proxy Statement | 15 |
PROPOSAL 3 Non-binding “Say-on-Frequency” Vote Regarding the Frequency of Future Advisory Votes on the Compensation of Our Named Executive Officers | |||||
The Board of Directors recommends a vote for every 1 YEAR for this proposal | ÑSee page 79 | ||||
PROPOSAL 4 Ratification of the Selection of Ernst & Young LLP as Independent Registered Public Accounting Firm for the Fiscal Year Ending October 28, 2023 | |||||
The Board of Directors recommends a vote FOR this proposal | ÑSee page 80 | ||||
16 | Proxy Summary |
PROPOSAL 1 Election of Directors Our Board of Directors unanimously recommends that you vote FOR the election of each of the below director nominees. | ||
Name | Position(s) with ADI | ||||
Vincent Roche | Chief Executive Officer and Chair of the Board of Directors | ||||
James A. Champy | Presiding Director | ||||
André Andonian | Director | ||||
Anantha P. Chandrakasan | Director | ||||
Edward H. Frank | Director | ||||
Laurie H. Glimcher | Director | ||||
Karen M. Golz | Director | ||||
Mercedes Johnson | Director | ||||
Kenton J. Sicchitano | Director | ||||
Ray Stata | Director | ||||
Susie Wee | Director |
2023 Proxy Statement | 17 |
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Karen M. Golz | Anantha P. Chandrakasan | Susie Wee | Laurie H. Glimcher | Mercedes Johnson | André Andonian | ||||||||||||
2018 | 2019 | 2019 | 2020 | 2021 | 2022 |
Diversity of Director Nominees | Independence of Director Nominees | ||||||||||||||||
![]() 4 of 11 Directors identify as female, or 36% | While our Board of Directors does not have a specific diversity policy, our Corporate Governance Guidelines provide that gender, racial, and ethnic diversity, consistent with the requirement for relevant and diverse experience, skills, and industry familiarity, are important search criteria. Effective application of these criteria is reflected in the diverse composition of our Board of Directors. | ![]() 9 of 11 Directors are Independent, or 82% | Under Nasdaq Rules, a majority of the members of our Board of Directors must be independent directors. To be considered independent, a director must be independent as determined under applicable Nasdaq Rules, and in our Board of Directors’ judgment, the director must not have a relationship with ADI that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. | ||||||||||||||
![]() 3 of 11 Directors identify as ethnically diverse, or 27% | |||||||||||||||||
18 | Board of Directors |
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||||||||
![]() | Executive Leadership | l | l | l | l | l | l | |||||||||||||||||||||||||||||||
![]() | Industry | l | l | l | l | l | l | l | l | l | ||||||||||||||||||||||||||||
![]() | Innovation and Emerging Technologies | l | l | l | l | l | l | l | l | l | ||||||||||||||||||||||||||||
![]() | Corporate Governance/Public Company Board | l | l | l | l | l | l | l | ||||||||||||||||||||||||||||||
![]() | Financial, Accounting, Auditing | l | l | l | ||||||||||||||||||||||||||||||||||
![]() | International, Large Scale Global Operations, Manufacturing | l | l | l | l | l | l | l | l | l | ||||||||||||||||||||||||||||
![]() | Government Affairs, Public Policy | l | l | l | ||||||||||||||||||||||||||||||||||
![]() | Strategy | l | l | l | l | l | l | l | l | l | l | |||||||||||||||||||||||||||
![]() | Risk Management, Regulatory, Compliance | l | l | |||||||||||||||||||||||||||||||||||
![]() | Cybersecurity, Information Systems | l | l | l | l | |||||||||||||||||||||||||||||||||
![]() | Mergers and Acquisitions | l | l | l | l | |||||||||||||||||||||||||||||||||
![]() | ESG (including Sustainability, Human Capital, and Diversity) | l | l | l |
2023 Proxy Statement | 19 |
Female | Male | Non-Binary | Did Not Disclose Gender | |||||||||||
Part I: Gender Identity | ||||||||||||||
Directors | 4 | 9 | - | - | ||||||||||
Part II: Demographic Background | ||||||||||||||
African American or Black | - | - | - | - | ||||||||||
Alaskan Native or Native American | - | - | - | - | ||||||||||
Asian | 1 | 1 | - | - | ||||||||||
Hispanic or Latinx | 1 | - | - | - | ||||||||||
Native Hawaiian or Pacific Islander | - | - | - | - | ||||||||||
White | 2 | 8 | - | - | ||||||||||
Two or More Races or Ethnicities | - | - | - | - | ||||||||||
LGBTQ+ | - | - | - | - | ||||||||||
Did Not Disclose Demographic Background | - | - | - | - |
Legend | ||||||||||||||
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Executive Leadership | Industry | Innovation and Emerging Technologies | Corporate Governance/Public Company Board | Financial, Accounting, Auditing | ||||||||||
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International, Large Scale Global Operations, Manufacturing | Government Affairs, Public Policy | Strategy | Risk Management, Regulatory, Compliance | Cybersecurity, Information Systems | ||||||||||
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Mergers and Acquisitions | ESG |
20 | Board of Directors |
![]() Vincent Roche Chief Executive Officer and Chair of the Board of Directors | ||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND Mr. Roche was elected as Chair of our Board of Directors in March 2022. Mr. Roche has served as our President since 2012, and was appointed CEO and elected as a director in May 2013. During Mr. Roche’s tenure as CEO, our total shareholder return is up 300% vs S&P 500 (up 190%) over that time as of the end of fiscal year 2022. Mr. Roche began his career with us in 1988 and has served in key positions spanning corporate leadership, worldwide sales, strategic marketing, business development, and product management over his more than 30-year tenure. Mr. Roche was recognized by Forbes in 2019 as one of America’s Most Innovative Leaders while also being a recipient of the 2021 SFI St. Patrick’s Day Science Medal for his contributions in support of the ecosystems in Ireland. KEY QUALIFICATIONS AND EXPERTISE Mr. Roche brings to our Board of Directors insights based on his leadership roles and his deep knowledge of our products, markets, customers, culture and organization. OTHER PUBLIC COMPANY BOARDS Current: None Past 5 Years: Acacia Communications, Inc. (until March 2021) | ||||||||||||||
Age: 62 | Director since: 2013 | Committee(s): Corporate Development | ![]() | |||||||||||
![]() James A. Champy Presiding Director Independent | ||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND Mr. Champy retired in 2010 as Vice President of the Dell/Perot Systems business unit of Dell, Inc., a computer and technology services company. Mr. Champy was previously a Vice President and the Chairman of Consulting at Perot Systems Corporation, an informational technology services company, from September 1996 to November 2009. He served as a member of the board of directors of Perot Systems Corporation from September 1996 to February 2004. KEY QUALIFICATIONS AND EXPERTISE Mr. Champy brings to our Board of Directors deep experience in the computer and technology services sectors and provides our Board of Directors with expertise in corporate strategy development and organizational acumen. OTHER PUBLIC COMPANY BOARDS Current: None Past 5 Years: None | ||||||||||||||
Age: 80 | Director since: 2003 | Committee(s): Nominating and Corporate Governance | ![]() | |||||||||||
2023 Proxy Statement | 21 |
![]() André Andonian Independent | ||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND Mr. Andonian is Chief Executive Officer of Andonian Advisory Pte. Ltd., a consulting firm that he founded in March 2022. Mr. Andonian has served as Special Advisor - Senior Partner Emeritus at McKinsey & Company, a global management consulting company, since June 2022. Mr. Andonian was previously a Senior Partner at McKinsey & Company, most recently as managing partner of McKinsey Korea, advising clients across the firm’s Semiconductors, Advanced Electronics, Automotive & Assembly, Biotechnology, and Aerospace & Defense Practices from January 2021 until June 2022. He was previously managing partner of McKinsey Japan from January 2016 to December 2020. KEY QUALIFICATIONS AND EXPERTISE Mr. Andonian brings to our Board of Directors extensive experience in transforming companies into global leaders in the high-tech, advanced industries, aerospace, biotech and basic materials sectors, and in the assessment and development of talent. Mr. Andonian also has deep global executive leadership experience, previously holding executive leadership roles at McKinsey across Europe, the U.S. and Asia over a 30-year career. Further, Mr. Andonian brings significant experience working with senior leaders of companies around the world and across a multitude of industries on a broad range of strategic and operational issues, including driving board effectiveness. OTHER PUBLIC COMPANY BOARDS Current: AEM Holdings Ltd. (SGX:AWK) Past 5 Years: None | ||||||||||||||
Age: 60 | Director since: 2022 | Committee(s): Nominating and Corporate Governance; Corporate Development | ![]() | |||||||||||
![]() Anantha P. Chandrakasan Independent | ||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND Dr. Chandrakasan has served as the Dean of the School of Engineering at the Massachusetts Institute of Technology (MIT), a private research university since July 2017, and as Vannevar Bush Professor of Electrical Engineering and Computer Science. Dr. Chandrakasan has co-chaired the MIT-IBM Watson AI Lab, the MIT-Takeda Program, and the MIT and Accenture Convergence Initiative for Industry and Technology. Dr. Chandrakasan also currently serves on the board of directors of the Singapore-MIT Alliance for Research and Technology, or SMART. Dr. Chandrakasan was the director of the Microsystems Technology Laboratories from July 2006 until he became the head of the Department of Electrical Engineering and Computer Science in July 2011, a position that concluded with his appointment as Dean in July 2017. Dr. Chandrakasan joined the MIT faculty in 1994. Dr. Chandrakasan is an Institute of Electrical and Electronics Engineers (IEEE) fellow, and was elected to the National Academy of Engineering in 2015 and to the American Academy of Arts & Sciences in 2019. KEY QUALIFICATIONS AND EXPERTISE Dr. Chandrakasan brings to our Board of Directors a deep understanding of complex technologies and broad experience driving innovation. Dr. Chandrakasan has a deep understanding of the semiconductor industry having previously consulted for a number of semiconductor companies. Mr. Chandrakasan also has experience driving diversity initiatives and is involved with cybersecurity initiatives at MIT and brings these skills to our Board of Directors. OTHER PUBLIC COMPANY BOARDS Current: None Past 5 Years: None | ||||||||||||||
Age: 54 | Director since: 2019 | Committee(s): Nominating and Corporate Governance; Corporate Development | ![]() | |||||||||||
22 | Board of Directors |
![]() Edward H. Frank Independent | ||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND Since September 2022, Dr. Frank has been the Executive Chair of Gradient Technologies, a security technologies startup, focused on identity and access management, and was recently co-founder and CEO of Cloud Parity Inc., a voice of the customer startup, from January 2014 through August 2016. From May 2009 to October 2013, Dr. Frank held the position of Vice President, Macintosh Hardware Systems Engineering at Apple Inc., a company that designs, manufactures and markets electronic devices. Prior to his tenure at Apple, Dr. Frank served as Corporate Vice President, Research and Development, of Broadcom Corp. Dr. Frank was founding CEO of Epigram, Inc., a developer of integrated circuits and software for home networking, which Broadcom acquired in 1999, and was a Distinguished Engineer at Sun Microsystems, Inc. Since 2000, Dr. Frank has been a Trustee of Carnegie Mellon University and served as vice-chair from 2015 through 2021. Dr. Frank has served on the board of directors of Metallica’s All Within My Hands Foundation since July 2017, where he also served as Executive Director (pro bono) from July 2017 through December 2021. He is a member of the National Academy of Engineering and a Fellow of the IEEE. KEY QUALIFICATIONS AND EXPERTISE Dr. Frank brings to our Board of Directors substantial experience in the design, manufacture, sale and marketing of semiconductors for a broad set of markets, including many of the markets we service and brings extensive executive leadership experience. Dr. Frank also brings significant cybersecurity experience to our Board of Directors. OTHER PUBLIC COMPANY BOARDS Current: Marvell Technology, Inc.; SiTime Corp.; Rocket Lab USA, Inc. Past 5 Years: Cavium, Inc. (until 2018); Amesite, Inc. (until 2020); Quantenna Communications, Inc. (until 2018) | ||||||||||||||
Age: 66 | Director since: 2014 | Committee(s): Compensation and Talent; Corporate Development | ![]() | |||||||||||
![]() Laurie H. Glimcher Independent | ||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND Dr. Glimcher has served as a Professor of Microbiology and Immunology at Harvard Medical School since May 2017, the Richard and Susan Smith Professor of Medicine at Harvard Medical School and Dana-Farber Cancer Institute since October 2016, an Attending Physician, Department of Cancer Immunology and Virology at Dana-Farber Cancer Institute since October 2016 and the President and Chief Executive Officer of the Dana-Farber Cancer Institute since September 2016. In addition to a number of senior leadership roles held at both Harvard Medical School and Harvard School of Public Health from 1984 to 2011 and from October 2016 to present, she also served as the Stephen and Suzanne Weiss Dean and Professor of Medicine of Weill Cornell Medicine and Provost for Medical Affairs of Cornell University from January 2012 to August 2016. She is a member of the board of trustees at the Dana-Farber Cancer Institute and a member of the U.S. National Academy of Sciences, the National Academy of Medicine, the American Academy of Arts and Sciences and the American Philosophical Society. KEY QUALIFICATIONS AND EXPERTISE Dr. Glimcher brings to our Board of Directors scientific and public health expertise, as well as diversity of technical skills and experience managing large, complex organizations, and as a physician, scientist and professor. OTHER PUBLIC COMPANY BOARDS Current: None Past 5 Years: Waters Corporation (until 2020); GlaxoSmithKline plc (until October 2022) | ||||||||||||||
Age: 71 | Director since: 2020 | Committee(s): Compensation and Talent | ![]() | |||||||||||
2023 Proxy Statement | 23 |
![]() Karen M. Golz Independent | ||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND Ms. Golz is a retired Partner of Ernst & Young (EY), a public accounting firm, where she was Global Vice Chair, Japan from 2016 to 2017 and previously Global Vice Chair, Professional Practice from 2010 to 2016. Ms. Golz also served on EY’s Global Risk Management Executive Committee, which was charged with risk management across EY’s global network, from 2008 to 2016. Ms. Golz currently serves as Senior Advisor to The Boston Consulting Group’s Audit and Risk Committee, a role she has held since August 2017, and as a Principal for K.M. Golz Associates, LLC, a consulting services company, since August 2017. Ms. Golz also sits on the board of trustees of the University of Illinois Foundation. Ms. Golz is a National Association of Corporate Directors (NACD) Board Leadership Fellow. KEY QUALIFICATIONS AND EXPERTISE Ms. Golz brings to our Board of Directors accounting and audit expertise and extensive experience helping large organizations successfully navigate the complexities of international trade and regulation. OTHER PUBLIC COMPANY BOARDS Current: Aspen Technology, Inc.; iRobot Corporation Past 5 Years: None | ||||||||||||||
Age: 68 | Director since: 2018 | Committee(s): Audit | ![]() | |||||||||||
![]() Mercedes Johnson Independent | ||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND Ms. Johnson served as interim Chief Financial Officer of Intersil Corporation, a semiconductor company, from April 2013 to September 2013, as Vice President and Chief Financial Officer at Tri Alpha Energy, Inc. (now TAE Technologies, Inc.), a fusion power company, from 2010 to 2011, and as Senior Vice President and Chief Financial Officer of Avago Technologies Limited (now Broadcom Inc.), a semiconductor manufacturing company from December 2005 to August 2008. Prior to joining Avago, Ms. Johnson was Senior Vice President, Finance, of Lam Research Corporation, a supplier of wafer fabrication equipment and related services to the semiconductor industry from June 2004 to January 2005 and Chief Financial Officer of Lam from May 1997 to May 2004. KEY QUALIFICATIONS AND EXPERTISE Ms. Johnson brings to our Board of Directors extensive executive experience in finance, accounting, corporate development, corporate governance, management, and operations. Ms. Johnson provides our Board of Directors with valuable industry experience as a former senior financial executive at semiconductor and semiconductor equipment companies as well as numerous directorships at public global technology companies. OTHER PUBLIC COMPANY BOARDS Current: Teradyne, Inc.; Synopsys, Inc.; Millicom International Cellular SA Past 5 Years: Juniper Networks, Inc. (until 2019); Micron Technology, Inc. (until 2019); Maxim Integrated Products, Inc. (until 2021) | ||||||||||||||
Age: 68 | Director since: 2021 | Committee(s): Audit | ![]() | |||||||||||
24 | Board of Directors |
![]() Kenton J. Sicchitano Independent | ||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND Mr. Sicchitano retired from PricewaterhouseCoopers LLP (PwC), a public accounting firm, in July 2001. At the time of his retirement, Mr. Sicchitano was the Global Managing Partner of Independence and Regulatory Matters for PwC. Mr. Sicchitano joined Price Waterhouse LLP, a predecessor firm of PwC, in 1970 and became a partner in 1979. During his 31-year tenure with PwC, Mr. Sicchitano held various positions, including Global Managing Partner of Audit/Business Advisory Services and Global Managing Partner responsible for Audit/Business Advisory, Tax and Financial Advisory Services. KEY QUALIFICATIONS AND EXPERTISE Mr. Sicchitano brings to our Board of Directors extensive experience with public and financial accounting matters for complex global organizations. OTHER PUBLIC COMPANY BOARDS Current: None Past 5 Years: None | ||||||||||||||
Age: 78 | Director since: 2003 | Committee(s): Nominating and Corporate Governance | ![]() | |||||||||||
![]() Ray Stata | ||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND Mr. Stata is our co-founder and served as an executive officer from our inception in 1965 until April 2012, including as our CEO from 1973 to November 1996 and as our President from 1971 to November 1991. Mr. Stata also served as the Chair of our Board of Directors from 1973 until March 2022 and continues to serve on our Board of Directors. KEY QUALIFICATIONS AND EXPERTISE Mr. Stata brings to our Board of Directors more than 50 years of experience and leadership in the semiconductor industry, including as our founder, our former Chair of the Board of Directors for 48 years and our former President for 20 years. OTHER PUBLIC COMPANY BOARDS Current: None Past 5 Years: None | ||||||||||||||
Age: 88 | Director since: 1965 | Committee(s): None | ![]() | |||||||||||
2023 Proxy Statement | 25 |
![]() Susie Wee Independent | ||||||||||||||
PROFESSIONAL EXPERIENCE AND BACKGROUND Dr. Wee has been a Vice President at Google, a multinational technology company, since April 2022. From November 2019 to August 2021, Dr. Wee served as Senior Vice President and General Manager of DevNet and CX Ecosystem Success at Cisco Systems Inc., a technology company. Dr. Wee founded and led DevNet, Cisco’s developer program, beginning in October 2013. Dr. Wee began working at Cisco in April 2011, and held leadership roles including Senior Vice President & Chief Technology Officer of DevNet from October 2018 to November 2019, Vice President & Chief Technology Officer of DevNet from October 2013 to October 2018, Vice President & Chief Technology Officer of Networked Experiences from October 2012 to October 2013, and Vice President & Chief Technology and Experience Officer of Cisco’s Collaboration Technology Group from April 2011 to October 2012. Previously, Dr. Wee had a 15-year career at Hewlett Packard Enterprise Company, a technology company, where she held a number of technical and leadership roles, including Vice President and General Manager of the HP Experience Software Business and Lab Director at HP Labs. Dr. Wee is an IEEE fellow and serves on the visiting committee of the MIT Electrical Engineering and Computer Science department. KEY QUALIFICATIONS AND EXPERTISE Dr. Wee brings to our Board of Directors extensive experience in information technology and application development, and an established track record of driving software innovation at global technology companies. OTHER PUBLIC COMPANY BOARDS Current: None Past 5 Years: None | ||||||||||||||
Age: 53 | Director since: 2019 | Committee(s): Compensation and Talent | ![]() | |||||||||||
26 | Board of Directors |
2023 Proxy Statement | 27 |
Recommendation | In considering whether to recommend any candidate for inclusion in the Board of Directors’ slate of recommended director nominees, including candidates recommended by shareholders, the Nominating and Corporate Governance Committee will apply the criteria set forth in our Corporate Governance Guidelines. These criteria include the candidate’s integrity, business acumen, experience, commitment, and diligence; the presence of any conflicts of interest; and the ability of the candidate to act in the interests of all shareholders. | ||||
Diversity | The Nominating and Corporate Governance Committee seeks nominees with a broad diversity of experience, professions, skills, geographic representation and backgrounds. The Nominating and Corporate Governance Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. ADI believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow our Board of Directors to fulfill its responsibilities. While we do not have a policy regarding diversity of our Board members, the Nominating and Corporate Governance Committee includes gender, racial and ethnic diversity as part of its search criteria, consistent with the requirement for relevant and diverse experience, skills and industry familiarity. Effective application of these criteria is reflected in the diverse composition of our Board of Directors. | ||||
Evaluation | The process followed by the Nominating and Corporate Governance Committee to identify and evaluate candidates includes requests to members of our Board of Directors and others for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by members of the Nominating and Corporate Governance Committee and the Board of Directors. From time to time, the Nominating and Corporate Governance Committee may also seek input from director search firms for identification and evaluation of candidates. Assuming that appropriate biographical and background material is provided for candidates recommended by shareholders on a timely basis, the Nominating and Corporate Governance Committee will evaluate director candidates recommended by shareholders by following substantially the same process, and applying substantially the same criteria, as it follows for director candidates submitted by members of our Board of Directors. Mr. Andonian was introduced by a director and, with the recommendation of the Nominating and Corporate Governance Committee, was elected to our Board of Directors effective June 27, 2022 and is included in the slate of director nominees nominated by the Board of Directors for election as a director at the Annual Meeting. | ||||
28 | Board of Directors |
Policy/Practice | Summary | ||||
Corporate Governance Guidelines | Our Board of Directors has adopted Corporate Governance Guidelines for ADI that establish a common set of expectations to assist our Board of Directors and its committees in performing their duties. Our Board of Directors reviews these guidelines at least annually, and updates them as necessary to reflect changing regulatory requirements and evolving practices. | ||||
Declassified Board of Directors | We have a declassified Board of Directors and our bylaws provide that each director will serve for a term ending on the date of the annual meeting following the one at which such director was elected. | ||||
Majority Voting for Election of Directors | Our bylaws provide for a majority voting standard in uncontested director elections, so a director nominee is elected to our Board of Directors if the votes “for” that director exceed the votes “against” (with abstentions and broker non-votes not counted as for or against the election). If a director nominee does not receive more for votes than against votes, the director must offer his or her resignation, which our Board of Directors must determine whether to accept and publicly disclose that determination. | ||||
Executive Sessions | At least twice per year, our Board of Directors holds executive sessions with our independent, non-employee directors, as defined under the Nasdaq Rules. Our Presiding Director, Mr. Champy, presides at these independent director executive sessions. In addition, the committees of our Board of Directors also regularly hold executive sessions without management present and with their advisors. | ||||
No Hedging and No Pledging Policy | We prohibit all hedging transactions or short sales involving ADI securities by our directors and employees, including our executive officers. Since January 2013, we have prohibited our directors and executive officers from holding any ADI securities in a margin account, and from any future pledging of their ADI securities as collateral for a loan. | ||||
Equity Award Grant Date Policy | We do not time or select the grant dates of any stock options or stock-based awards in coordination with our release of material non-public information, nor do we have any program, plan or practice to do so. In addition, our Compensation and Talent Committee has adopted specific written policies regarding the grant dates of equity awards made to our directors, executive officers and employees. See Director Compensation and Equity Award Grant Date Policy below for more information. | ||||
Executive Stock Ownership Guidelines | Under our guidelines, the target stock ownership levels are five times annual base salary for the CEO and three times annual base salary for other executive officers and any Senior Vice President reporting to the CEO, which we collectively refer to as, the Leadership Team. The CEO has four years from the date of his appointment as CEO to achieve his targeted level. Members of the Leadership Team other than the CEO have five years from the date he or she becomes part of the Leadership Team to achieve their targeted level. Shares subject to unexercised options, whether or not vested, and unvested performance-based RSUs whose performance have not yet been certified by the Compensation and Talent Committee will not be counted for purposes of satisfying these guidelines. RSUs and restricted stock (whether or not vested) and unvested performance-based RSUs whose performance has been certified by the Compensation and Talent Committee are counted for purposes of satisfying these guidelines. All members of the Leadership Team, other than Ms. Asgeirsson, who first joined ADI in fiscal year 2021, were in compliance with our stock ownership guidelines as of the end of fiscal year 2022. Ms. Asgeirsson is expected to be in compliance with our stock ownership guidelines within the first five years of her appointment to the Leadership Team. | ||||
Clawback Policy | Our clawback policy provides that in the event of a material restatement of our financial results, the Compensation and Talent Committee may, as appropriate, seek to recover from our CEO and other named executive officers whose fraud or willful misconduct caused or partially caused such restatement, all or a portion of the performance-based compensation awarded to such named executive officer that was in excess of the amount that would have been awarded based on the restated financial results. We will amend our compensation clawback policy so that it is compliant with the regulations mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act when corresponding listing standards become effective. |
2023 Proxy Statement | 29 |
Policy/Practice | Summary | ||||
Adoption of Proxy Access Right | Our Board of Directors approved a bylaw amendment implementing proxy access, which allows shareholders that meet standard eligibility requirements to nominate and include in our Proxy Statement director candidates for election. | ||||
Code of Business Conduct and Ethics | We have a Code of Business Conduct and Ethics, which details our commitment to conducting business ethically, in compliance with the law, and in a way that reflects our deeper values. Our Code of Business Conduct and Ethics details our commitment to safeguarding personal data, explains our whistleblower reporting process, and is designed to be consistent with best practices. Our Code of Business Conduct and Ethics provides transparency on our enhanced whistleblower process. Specifically, we affirm our commitment to a consistent and transparent review process, prompt and thorough investigations, assignment of neutral investigators, communication about investigation outcomes, and implementation of appropriate corrective actions. | ||||
Code of Corporate Social Responsibility | Our Code of Corporate Social Responsibility details ADI’s policies for itself and its suppliers in the areas of labor and human rights, health and safety, environment, ethics, management systems and data privacy. | ||||
Director Education | We encourage our directors to attend director education programs and provide educational opportunities to our directors through a variety of platforms. We reimburse the costs of attending such programs. We also provide members of our Board of Directors a membership to the National Association of Corporate Directors. Further, we include educational topics regularly at our scheduled Board of Directors’ meetings. During such sessions, an outside party presents on a topic that is relevant to our business and strategic objectives, and of interest to our Board of Directors. |
30 | Corporate Governance |
In accordance with best practices, the Presiding Director has significant responsibilities, including: ÑLeadership of executive sessions of the independent directors or other meetings at which the Chair is not present; ÑAuthority to call meetings of the independent directors; ÑCoordinating with the Chair to call Board of Directors’ meetings; ÑOverseeing the annual Board of Directors’ evaluation process; ÑServing as a liaison between the Chair and the independent directors, as required; ÑCoordinating with the Chair to set and approve the Board of Directors’ meeting schedule and agenda to assure sufficient time for discussion of all agenda items; ÑDetermining the appropriate materials to be provided to the Board of Directors; ÑServing as the focal point for shareholder communications with the independent directors and requests for consultation addressed to independent members of the Board of Directors; ÑThe ability to retain outside professionals on behalf of our Board of Directors as our Board of Directors may determine is necessary or appropriate; and ÑSuch other functions as our Board of Directors may direct from time to time. | ||
2023 Proxy Statement | 31 |
Audit Committee Members Karen M. Golz (Chair) Bruce R. Evans(1) Mercedes Johnson ![]() Meetings in 2022: 9 | PRINCIPAL RESPONSIBILITIES The primary purpose of the Audit Committee is to assist our Board of Directors’ oversight of: ÑThe integrity of our financial statements, including regulatory requirements to the extent they pertain to financial matters; ÑThe qualifications and independence of our independent registered public accounting firm; ÑThe performance of our internal audit function and independent registered public accounting firm; ÑThe process relating to internal enterprise risk management, control systems, and review of related person transactions; ÑEvaluating capital allocation and structure, including potential issuance of debt and equity securities, credit agreements, letters of credit, guarantees and other financial instruments, investment policy, dividends, stock splits and stock repurchases; ÑEvaluating our significant financial exposures and liabilities; and ÑReviewing our financial outlook and plans for financing our working and long-term capital requirements. Our Board of Directors has determined that each of Mses. Golz and Johnson and Mr. Evans qualifies as an “audit committee financial expert” under the rules of the U.S. Securities and Exchange Commission, or SEC, each is independent as defined under the Nasdaq Rules and the independence requirements under Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, or Exchange Act. In addition, our Board of Directors has determined that each member of the Audit Committee is able to read and understand financial statements, including ADI’s consolidated balance sheet and its consolidated statements of income, comprehensive income, shareholders’ equity and cash flows and related notes as required under the Nasdaq Rules. Our Board of Directors has certified that it has at least one member of the Audit Committee who has past employment experience in finance or accounting as required by the Nasdaq Rules. The responsibilities of our Audit Committee and its activities during fiscal year 2022 are described in the Report of the Audit Committee below. | ||||
32 | Corporate Governance |
Compensation and Talent Committee Members(1) Edward H. Frank (Chair) Laurie H. Glimcher Susie Wee ![]() Meetings in 2022: 10 | PRINCIPAL RESPONSIBILITIES The primary responsibilities of the Compensation and Talent Committee are to: ÑEvaluate and set the compensation of our CEO, our other executive officers and any senior executive reporting to our CEO; ÑMake recommendations to our Board of Directors regarding the compensation of our directors; ÑReview, and make recommendations to our Board of Directors with respect to, incentive compensation plans and equity-based plans, and exercise all rights, authority and functions with respect to such plans; ÑOversee our policies, strategies and programs relating to human capital management; ÑOversee management of the risks associated with our compensation practices and policies; and ÑOversee the evaluation and succession planning and development programs for senior executives. Our Board of Directors has determined that each of Drs. Frank, Glimcher, and Wee is independent as defined under the Nasdaq Rules and the independence requirements under Rule 10C-1 of the Exchange Act. | ||||
2023 Proxy Statement | 33 |
Nominating and Corporate Governance Committee Members James A. Champy (Chair) André Andonian Anantha P. Chandrakasan Kenton J. Sicchitano ![]() Meetings in 2022: 5 | PRINCIPAL RESPONSIBILITIES The primary responsibilities of the Nominating and Corporate Governance Committee are to: ÑIdentify individuals qualified to become members of our Board of Directors consistent with criteria approved by the Board of Directors; ÑRecommend to the Board of Directors the persons to be nominated by the Board of Directors for election as directors at any meeting of shareholders and the persons to be elected by the Board of Directors to fill any vacancies on the Board of Directors; ÑIn connection with Board of Director succession and refreshment practices, review with the Board of Directors, on an annual basis, the requisite skills and criteria for new directors as well as the composition of the Board of Directors as a whole; ÑRecommend to the Board of Directors the directors to be appointed to each committee of the Board of Directors; ÑDevelop and recommend to the Board of Directors a set of corporate governance principles; ÑOversee the evaluation, background, vetting, orientation, and training of the members of the Board of Directors; ÑOversee our Code of Business Conduct and Ethics; ÑOversee and periodically review ADI’s ESG policies, goals and programs; and ÑOversee risks associated with its areas of responsibility. Our Board of Directors has determined that each of Messrs. Champy, Andonian, and Sicchitano and Dr. Chandrakasan is independent as defined under the Nasdaq Rules. | ||||
Corporate Development Committee Members Vincent Roche (Chair) André Andonian Anantha P. Chandrakasan Bruce R. Evans(1) Edward H. Frank ![]() Meetings in 2022: 6 | PRINCIPAL RESPONSIBILITIES The primary responsibility of the Corporate Development Committee is to review and make recommendations to the Board of Directors at each full meeting of the Board of Directors, with respect to: ÑStrategic plans, transactions and investments, including mergers, acquisitions and divestitures; and ÑThe results, performance and financial impact of material transactions. All matters approved by the Corporate Development Committee are recommended to and also approved by our Board of Directors. | ||||
34 | Corporate Governance |
Our Board of Directors met nine times and its committees collectively held thirty meetings in fiscal year 2022 (including by telephone and video conference). During fiscal year 2022, overall attendance by incumbent directors at Board of Directors and committee meetings was 99% and each of our incumbent directors attended 96% or more of the total number of meetings of the Board of Directors and the committees on which he or she served. The independent directors met in executive session without Messrs. Roche, Doluca or Stata at three Board of Directors meetings during fiscal year 2022. Our Corporate Governance Guidelines set forth our policy that directors are expected to attend annual meetings of shareholders. Eleven directors attended our 2022 Annual Meeting of Shareholders. | ![]() |
Development of Annual Evaluation Process Each December, our Presiding Director along with our CEO and Chair and our Chief Legal Officer discuss the Board of Directors’ evaluation process for the year, considering evolving best practices. | ![]() | Written Questionnaires Each director undertakes an evaluation of the Board of Directors. | ![]() | One-on-One Discussions Our Presiding Director, working with our Chief Legal Officer, also has conversations with each member of our Board of Directors designed to assess the effectiveness of our Board of Directors, as well as competencies and skills each director brings to the Board of Directors. | ![]() | Evaluation of Results In March of each year, our Presiding Director provides summaries of the evaluations to the Board of Directors and engages in a robust discussion with Board members on Board effectiveness and engagement. | ||||||||||||||||||||
2023 Proxy Statement | 35 |
![]() | BOARD OF DIRECTORS ÑReceives regular reports from members of senior management on areas of material risk to ADI. Specifically, our Chief Risk Officer, who oversees internal enterprise risk management programs and chairs our Enterprise Risk Management Committee, provides regular reports to our full Board of Directors regarding our management of all enterprise and operational risks and our enterprise risk management program, with periodic updates on focus areas, such as cybersecurity. ÑReceives regular updates from our Audit Committee, Compensation and Talent Committee, Corporate Development Committee and Nominating and Corporate Governance Committee, which provide our Board of Directors with thorough insight about how ADI manages risk. | ![]() | ||||||||||||
![]() | AUDIT COMMITTEE ÑHas oversight responsibility with respect to ADI’s risk assessment and risk management programs, especially as they apply to ADI’s financial statement integrity and reporting and internal controls. ÑReceives regular reports from our Director of Internal Audit on internal audit matters and from our Chief Risk Officer on risk management matters. ÑReceives quarterly reports from our Chief Information Officer on information security and technology and from our head of compliance regarding data privacy and protection. ÑEvaluates capital allocation and structure, including potential issuance of debt and equity securities, credit agreements, other financial instruments, investment policy, dividends, stock splits and stock repurchases. | ![]() | ||||||||||||
![]() | COMPENSATION AND TALENT COMMITTEE ÑOversees ADI’s executive compensation program and non-executive director compensation practices. ÑOversees ADI’s policies, strategies and programs relating to human capital management. ÑOversees the evaluation and succession planning and development programs for senior executives. | ![]() | ||||||||||||
![]() | NOMINATING AND CORPORATE GOVERNANCE COMMITTEE ÑLeads the Board of Directors with respect to the adequacy of ADI’s governance structure and process of succession planning for our Board of Directors. ÑOversees ADI’s ESG programs, including reviewing ADI’s sustainability initiatives and goals as well as our progress toward achieving those goals. | ![]() | ||||||||||||
![]() | CORPORATE DEVELOPMENT COMMITTEE ÑEvaluates strategic plans, transactions, and investments, including mergers, acquisitions and divestitures. | ![]() | ||||||||||||
![]() | LEADERSHIP TEAM AND MANAGEMENT ÑOur Leadership Team and our CEO and Chair have ownership for risk management and risk governance is managed by our Enterprise Risk Management Committee, a management-led, cross-functional committee, which is chaired by our Chief Risk Officer. ÑOur Enterprise Risk Management Committee works closely with our Leadership Team, including our CEO and Chair, to identify and mitigate identified risks. ÑOur Chief Risk Officer, and other members of management, report to the Board of Directors (or the appropriate committee as appropriate) regarding risk identification, management and mitigation strategies. | ![]() | ||||||||||||
36 | Corporate Governance |
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BOARD OF DIRECTORS | AUDIT COMMITTEE | COMPENSATION AND TALENT COMMITTEE | NOMINATING AND CORPORATE GOVERNANCE COMMITTEE | CORPORATE DEVELOPMENT COMMITTEE | ENTERPRISE RISK MANAGEMENT COMMITTEE Chaired by our Chief Risk Officer | |||||||||||||||||||||||||||||||||||||||||||||
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2023 Proxy Statement | 37 |
![]() | Winter | ![]() | Spring | ![]() | Summer | ![]() | Fall | ||||||||||||||||||||||||||||
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ÑPublish Annual Report and Proxy Statement ÑConduct active outreach with top investors to discuss items to be considered at the annual meeting, if needed, given matters to be considered ÑAnnual Meeting | ÑEvaluate proxy season outcome and trends, corporate governance best practices and regulatory developments ÑPublish annual ESG report to inform stakeholders, including investors, about recent developments relating to ESG matters | ÑConduct active outreach with top investors to understand their top priorities and solicit feedback on governance topics, including ESG and compensation ÑShare investor feedback with our Board of Directors |
WHO WE CONTACTED | WHAT WE DISCUSSED | |||||||
![]() | During fiscal year 2022, as part of our annual outreach program, we reached out to our top 20 shareholders and additional shareholders that voted against say-on-pay in 2022, collectively representing nearly 50% of our total shares outstanding, with an invitation to have discussions with their corporate governance teams. Shareholders representing approximately 30% of our outstanding shares accepted our engagement invitation. | Topics covered in these meetings included: ÑExecutive compensation, including one-time awards ÑCorporate governance matters, including Board structure and refreshment ÑOther ESG topics, including supply chain, human rights, risk management, sustainability programs, DE&I and human capital management | ||||||
38 | Corporate Governance |
WHAT WE HEARD | WHAT WE DID | |||||||
Topic | Feedback | Changes for Fiscal Year 2022 and Beyond | ||||||
EXECUTIVE COMPENSATION | ||||||||
Design of Program Generally | Shareholders were generally pleased with the overall design and framework of our executive compensation program | ÑThe Compensation and Talent Committee did not significantly revise the design of our executive compensation program for fiscal year 2022, other than as noted under Notable Compensation Decisions for Fiscal Year 2022, and does not plan to significantly revise the program in fiscal year 2023 based on the feedback received | ||||||
Special One-Time Award to CEO | While some shareholders expressed a concern with the granting of a one-time special award during fiscal year 2021 to our CEO, most shareholders understood the rationale behind the special one-time award and appreciated the disclosure in our 2022 Proxy Statement | ÑThe Compensation and Talent Committee confirms that it does not intend to make future special awards to our CEO and Chair outside of our ongoing annual incentive program while the current grant remains outstanding | ||||||
CORPORATE GOVERNANCE | ||||||||
Combined CEO and Chair Role | Shareholders appreciated that our Board of Directors enhanced the responsibilities of the Presiding Director under our Corporate Governance Guidelines | ÑOur Board of Directors believes the combined CEO and Chair role is the appropriate structure given our strategic objectives | ||||||
Board Refreshment and Tenure | Shareholders were interested in our Board of Directors’ refreshment practices | ÑOur Board of Directors continues its focus on refreshment practices to align with our strategic visions and objectives, including welcoming André Andonian to the Board of Directors in June 2022. Mr. Andonian brings significant industry, strategic and leadership experience to our Board of Directors | ||||||
ESG MATTERS | ||||||||
ESG Report and Targets | Shareholders commended our ESG practices and reporting, including enhanced governance structure and ambitious environmental targets | ÑContinued to enhance our disclosure in our 2021 ESG Report issued in June 2022 and plan to continue to provide robust disclosure in our 2022 ESG Report | ||||||
Human Capital Matters | Shareholders inquired about attrition, DE&I objectives and human capital topics, and noted that we have robust DE&I practices | ÑOur Board of Directors enhanced the purview of the Compensation and Talent Committee to specifically include oversight of human capital management and diversity | ||||||
2023 Proxy Statement | 39 |
40 | Corporate Governance |
2023 Proxy Statement | 41 |
Compensation Element | Annual Cash Compensation | |||||||
Board Chair Retainer | $250,000 | (1) | ||||||
Board Member Retainer | $90,000 | (2) | ||||||
Presiding Director Retainer | $40,000 | (3) |
Annual Cash Compensation | |||||||||||||||||
Committee | Chair | Member | |||||||||||||||
Audit Committee | $30,000 | $15,000 | |||||||||||||||
Compensation and Talent Committee | $20,000 | $10,000 | |||||||||||||||
Nominating and Corporate Governance Committee | $20,000 | $10,000 | |||||||||||||||
Corporate Development Committee | $15,000 | (1) | $10,000 |
Annual Equity Grant | $ Value of Annual Equity Grant | |||||||
Restricted Stock Unit Grant | $225,000 | (5) |
42 | Director Compensation |
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | All Other Compensation ($) | Total ($) | |||||||||||||
James A. Champy | 143,750 | 221,111 | — | 364,861 | |||||||||||||
André Andonian(4) | 37,775 | 157,315 | 195,090 | ||||||||||||||
Anantha P. Chandrakasan | 107,500 | 221,111 | — | 328,611 | |||||||||||||
Tunç Doluca | 87,500 | 221,111 | — | 308,611 | |||||||||||||
Bruce R. Evans | 112,500 | 221,111 | — | 333,611 | |||||||||||||
Edward H. Frank | 117,500 | 221,111 | $2,696 | (5) | 341,307 | ||||||||||||
Laurie H. Glimcher | 97,500 | 221,111 | — | 318,611 | |||||||||||||
Karen M. Golz | 117,500 | 221,111 | — | 338,611 | |||||||||||||
Mercedes Johnson | 102,500 | 221,111 | — | 323,611 | |||||||||||||
Mark Little(6) | 33,489 | — | — | 33,489 | |||||||||||||
Kenton J. Sicchitano | 97,500 | 221,111 | — | 318,611 | |||||||||||||
Ray Stata(7) | 142,489 | 221,111 | $14,846 | (8) | 378,446 | ||||||||||||
Susie Wee | 97,500 | 221,111 | — | 318,611 |
Name | Number of Shares Subject to Option Awards Held as of October 29, 2022 | Number of RSUs that have not Vested as of October 29, 2022 | ||||||
James A. Champy | 25,760 | 1,495 | ||||||
André Andonian(a) | 1,015 | |||||||
Anantha P. Chandrakasan | — | 1,495 | ||||||
Tunç Doluca | — | 1,495 | ||||||
Bruce R. Evans | — | 1,495 | ||||||
Edward H. Frank | — | 1,495 | ||||||
Laurie H. Glimcher | — | 1,495 | ||||||
Karen M. Golz | — | 1,495 | ||||||
Mercedes Johnson | — | 1,495 | ||||||
Mark Little(b) | — | — | ||||||
Kenton J. Sicchitano | 16,100 | 1,495 | ||||||
Ray Stata | 37,620 | 1,495 | ||||||
Susie Wee | — | 1,495 |
2023 Proxy Statement | 43 |
What Counts as Ownership | What Does Not Count as Ownership | ||||
ÑTime-based RSUs (whether or not vested) | ÑShares subject to unexercised options, whether or not vested | ||||
ÑUnvested PRSUs whose performance has been certified by the Compensation and Talent Committee | ÑUnvested PRSUs whose performance has not yet been certified by the Compensation and Talent Committee | ||||
ÑRestricted stock (whether or not vested) | ÑAny shares that have been pledged as collateral for a loan |
44 | Director Compensation |
2023 Proxy Statement | 45 |
![]() | VINCENT ROCHE, 62, Chief Executive Officer and Chair of the Board of Directors Mr. Roche was elected as Chair of our Board of Directors in March 2022 and has served as our President and Chief Executive Officer since May 2013 and as our President since November 2012. Mr. Roche began his career at ADI in 1988, progressively gaining responsibility over his tenure. Prior to November 2012, Mr. Roche served as Vice President, Strategic Segments Group and Global Sales from October 2009 to November 2012; Vice President, Worldwide Sales from March 2001 to October 2009; Vice President and General Manager, Silicon Valley Business Units and Computer & Networking from 1999 to March 2001; Product Line Director from 1995 to 1999; and Product Marketing Manager from 1988 to 1995. Mr. Roche serves on the boards of the Semiconductor Industry Association, the MIT Presidential CEO Advisory Board, and is a member of the Massachusetts High Tech Leadership Council. Mr. Roche holds a Bachelor’s degree in Electronic Systems and an honorary Doctor of Science (Eng.) from the University of Limerick in Ireland. | ||||
![]() | JANENE ASGEIRSSON, 52, Senior Vice President, Chief Legal Officer, Chief Risk Officer and Secretary Ms. Asgeirsson has served as our Senior Vice President, Chief Legal Officer, Chief Risk Officer and Secretary since August 2021. Ms. Asgeirsson leads our worldwide legal, governance, trade, and compliance functions, including mergers and acquisitions, litigation, intellectual property, and other corporate matters and acts as a strategic advisor to ADI’s executive leadership team and Board of Directors. Additionally, Ms. Asgeirsson is responsible for our internal audit and risk functions in her capacity as Chief Risk Officer and is responsible for the governance of our ESG programs. Ms. Asgeirsson has over two decades of combined experience in private practice at American Lawyer-ranked international law firms and in senior and executive level roles at publicly traded technology companies. Prior to joining ADI, Ms. Asgeirsson worked at Acacia Communications, an optical networking and strategy technology company, from April 2015 to August 2021, as its Vice President, General Counsel and Secretary from April 2015 to January 2019, and then as its Chief Legal Officer, Chief Compliance Officer and Secretary, from February 2019 to August 2021, leading global teams with diverse responsibilities. During her tenure at Acacia, she accomplished several significant transactions, including Acacia’s initial public offering (IPO), the best-performing U.S. IPO of 2016, and Acacia’s multi-billion-dollar sale to Cisco Systems. While in private practice, Ms. Asgeirsson provided strategic and legal counsel to several companies across multiple industries, ranging in size from start-ups to multi-billion-dollar, complex global organizations. Ms. Asgeirsson holds a Bachelors in Accountancy, summa cum laude, from the University of San Diego and a Juris Doctor from Northeastern University School of Law. | ||||
![]() | GREGORY BRYANT, 54, Executive Vice President and President of Business Units Mr. Bryant has served as our Executive Vice President and President of Business Units since March 2022. In this role, Mr. Bryant is responsible for growing the business and ensuring close alignment between long-term strategic goals and the evolving technology trends, market needs, and customer priorities. Mr. Bryant has three decades of experience leading and scaling large organizations to deliver profitable growth. Most recently, Mr. Bryant was Executive Vice President and General Manager, Client Computing Group at Intel Corporation, a semiconductor and technology company, from September 2019 to January 2022, where he was responsible for setting Intel’s PC vision and strategy, delivering six consecutive years of growth in its global PC ecosystem, and collaborating across its global ecosystem to co-engineer and deliver leading consumer and commercial PC platforms that empower people and organizations. Mr. Bryant served as Intel’s Senior Vice President, Client Computing Group from June 2017 to September 2019 and previously held a variety of leadership positions at Intel, including General Manager of Asia Pacific and Japan and General Manager of the Business Client Platform Division. Mr. Bryant holds a Bachelor of Science degree in Electrical Engineering from the University of Kansas and a Master’s degree in Program and Systems Management from Golden Gate University. | ||||
![]() | JOHN HASSETT, 64, Senior Vice President and Chief Operating Officer, Maxim Business Mr. Hassett has served as our Senior Vice President and Chief Operating Officer for the Maxim business since August 2021 where he leads our strategic and operational efforts to integrate Maxim. Mr. Hassett brings extensive experience as a business leader having run our largest revenue-generating business group, operational expertise leveraging his previous Global Operations & Technology leadership, in addition to his various engineering management roles with us. Previously, Mr. Hassett was Senior Vice President, Corporate Integration Management where he led significant efforts in M&A transactions and was responsible for developing strategies that drove the integration of multi-billion-dollar transactions from due diligence to fully integrated entities from December 2020 to July 2021. Previously, Mr. Hassett was Senior Vice President of Industrial and Consumer Group from November 2019 to December 2020 where he led growth initiatives which leverage our extensive franchise capability in measurement, sensing and testing and was Senior Vice President of Global Operations & Technology from May 2015 to November 2019, where he was instrumental in setting and executing our manufacturing strategy and creating a world-class, scalable supply chain to deliver outstanding quality for our customers. Mr. Hassett joined ADI in 1982 after graduating from the University of Limerick where he earned a Bachelor of Science degree in Manufacturing Engineering. Mr. Hassett also holds a Master of Business Administration from the University of Limerick. | ||||
46 | Leadership Team |
![]() | VIVEK JAIN, 63, Executive Vice President of Global Operations and Technology Mr. Jain has served as our Executive Vice President of Global Operations & Technology since May 2022, where he is responsible for global manufacturing and supply chain operation, and previously served as our Senior Vice President of Global Operations and Technology from August 2021 to May 2022. Mr. Jain assumed this position following our acquisition of Maxim, where he served in a similar capacity as the Senior Vice President of the Technology and Manufacturing Group from June 2009 to August 2021. After joining Maxim in 2007 as Vice President of Fab Operations, Mr. Jain led the transformation of many aspects of Maxim’s manufacturing supply chain to make it more flexible, nimble, and resilient. Mr. Jain’s additional experience includes serving as a Plant Manager at Intel's Technology Development and Manufacturing facility, where he oversaw the process technology development and high-volume manufacturing of deep sub-micron logic and Flash memory technologies. Mr. Jain holds a Bachelor of Science degree in Chemical Engineering from the Indian Institute of Technology Delhi, a Master of Science degree in Chemical Engineering from Penn State University, and a Master’s degree in Electrical Engineering from Stanford University. He is also a 2014 graduate of the Stanford Graduate School of Business Executive Program. | ||||
![]() | PRASHANTH MAHENDRA-RAJAH, 52, Executive Vice President, Finance and Chief Financial Officer Mr. Mahendra-Rajah has served as our Executive Vice President, Finance and Chief Financial Officer since June 2022 and as our Senior Vice President, Finance and Chief Financial Officer from 2017 to June 2022. Mr. Mahendra-Rajah sets our financial strategy and oversees ADI’s global finance organization, with responsibility for financial management, planning, controls, and reporting. Mr. Mahendra-Rajah has been recognized by Institutional Investor magazine as a Top CFO in Semiconductors in 2020, 2021 and 2022 by equity research analysts. Mr. Mahendra-Rajah is also a member of CNBC’s Global CFO Council. Prior to joining ADI, Mr. Mahendra-Rajah was Chief Financial Officer of WABCO Holdings Inc., a global supplier of commercial vehicle technologies, from June 2014 to September 2017. He previously served as Division CFO and in other financial leadership roles at Applied Materials, Visa, and United Technologies. Mr. Mahendra-Rajah is a member of the board of directors of the Goodyear Tire & Rubber Company, where he serves on the audit committee and committee on corporate responsibility and compliance. Mr. Mahendra-Rajah holds a Bachelor of Science degree in Chemical Engineering from the University of Michigan, a Master of Science degree in Engineering from Johns Hopkins University, and a Master of Business Administration degree from the Krannert School of Management at Purdue University. | ||||
![]() | ANELISE SACKS, 44, Senior Vice President and Chief Customer Officer Ms. Sacks has served as our Senior Vice President and Chief Customer Officer since March 2021 where she is responsible for our customer strategy, enabling frictionless delivery of cutting-edge solutions to a diverse, global customer base, and delivering and capturing value for our technology. Ms. Sacks oversees our global sales, solutions and ecosystems, marketing, and digital transformation, with a focus on delivering a superior end-to-end customer experience and expanding our go-to-market strategies across channels and ecosystems. Previously, Ms. Sacks worked for Texas Instruments, a semiconductor company, where she held a variety of leadership roles over 15 years where she grew their portfolio of analog, digital and software technologies, most recently as Vice President and General Manager, DLP Products for Texas Instruments from December 2017 to December 2020. During her 15-year tenure at Texas Instruments, Ms. Sacks was responsible for investment strategy, product roadmap definition, new product and technology development, marketing, systems, and application engineering. Ms. Sacks brings a diverse blend of expertise across geographies, technologies, and functions including sales and business unit leadership, has lived on three continents and speaks five languages. Ms. Sacks holds an Electric and Electronic Engineering degree from the Federal University in Rio de Janeiro. She also holds a Master of Business Administration degree with merit from the Open University Business School in the U.K. and has executive education from Harvard Business School and INSEAD. | ||||
![]() | MARIYA TRICKETT, 40, Senior Vice President and Chief People Officer Ms. Trickett has served as our Senior Vice President and Chief People Officer since May 2022. Ms. Trickett is responsible for supporting ADI’s growth and evolution, driving best practices across all aspects of human resources. In this role, she leads the human resources and talent functions, including employee engagement, talent acquisition, talent management, learning and development, total rewards, succession planning, and organizational development. For nearly 20 years, Ms. Trickett has successfully led business and cultural transformations across a wide range of organizations. She has extensive experience building global high-performance companies focused on innovation, agility, and customer-centricity across technology, software, R&D, manufacturing, and services. From September 2018 to April 2022, Ms. Trickett was Senior Vice President and Chief Human Resources Officer at Aptiv, PLC, an industrial-tech company with over 180,000 employees, spanning 44 countries and 221 sites. Prior to Aptiv, she was Senior Vice President of Human Resources at Dana Incorporated, a drive train and EV supplier with more than 35,000 employees. Ms. Trickett holds a Bachelor of Science degree in history and law from Kirovograd State University in Ukraine and a Master of Science degree in Human Resource Management from Temple University in Philadelphia. She is also a graduate of the Advanced Management Program at the University of Navarra’s IESE Business School in Barcelona. | ||||
2023 Proxy Statement | 47 |
PROPOSAL 2 Advisory Approval of the Compensation of ADI’s Named Executive Officers We are requesting shareholder approval of the compensation of the executive officers named in our Summary Compensation Table below, who we refer to as our NEOs. We are required to provide our shareholders with the opportunity to vote to approve, on an advisory (non-binding) basis, the compensation of our NEOs as disclosed in this Proxy Statement in accordance with the SEC’s rules. At the 2017 annual meeting of shareholders, our shareholders voted in favor of holding future “say-on-pay” votes every year. In accordance with the results of that vote, our Board of Directors determined to submit “say-on-pay” proposals to our shareholders every year until the next vote on the preferred frequency of advisory votes on the compensation of our NEOs, which will occur at the Annual Meeting and is the subject of the non-binding advisory vote in Proposal 3. Our Board of Directors is asking shareholders to approve the following non-binding advisory vote: VOTED, that the compensation paid to the company’s NEOs, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and accompanying narrative disclosures in this Proxy Statement, is hereby approved. As required by the Dodd-Frank Act, this is an advisory vote, which means that this proposal is not binding on us. Our Compensation and Talent Committee, however, values the opinions expressed by our shareholders and will carefully consider the outcome of the vote when making future compensation decisions for our NEOs. You may vote for, against or abstain from voting on this matter. At our 2022 annual meeting of shareholders, our compensation program for our NEOs received the support of 77.3% of the total votes cast. In light of the support received and additional feedback received from our shareholders, our Compensation and Talent Committee did not make significant changes to our executive compensation program. As described in detail in the Compensation Discussion and Analysis section of this Proxy Statement, ADI’s executive compensation program is significantly performance-based and designed to attract, retain and motivate strong executives to lead our complex, global organization and to align their interests with those of our shareholders. We seek to provide total compensation to our executive officers, including our NEOs, that is competitive with our peers, and we believe that our executive compensation program is designed to encourage the most talented individuals to grow their careers at ADI. ADI has a longstanding philosophy and practice of paying executives for performance. In order to align our pay practices with shareholder interests, we tie a significant percentage of each executive’s compensation to ADI’s performance, in the form of executive performance incentive plan payments, and equity awards that are subject to performance vesting and rise in value only if our stock price increases. In fiscal year 2022 we delivered record financial results for both revenue and operating profit. As a result aggregate payments under our executive performance incentive plan were made at 293% of target in fiscal year 2022, compared to 253% in fiscal year 2021 and 77% in fiscal year 2020. We believe that our executive compensation program is working as intended and appropriately aligns executive pay with company performance and shareholder value creation. Our Board of Directors unanimously recommends that you vote FOR approval of the compensation of our Named Executive Officers as disclosed in this Proxy Statement. | ||
48 | Executive Compensation |
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VINCENT ROCHE Chief Executive Officer and Chair of the Board of Directors | PRASHANTH MAHENDRA-RAJAH Executive Vice President, Finance and Chief Financial Officer | GREGORY BRYANT Executive Vice President and President of Business Units | VIVEK JAIN Executive Vice President of Global Operations and Technology | ANELISE SACKS Senior Vice President and Chief Customer Officer |
$12B | 62.7% | 27.3% | $5.25 | $4.5B | ||||||||||
Revenue | Gross Margins | Operating Margins | Diluted Earnings per Share | Operating Cash Flow | ||||||||||
~87% | 73.6% | 49.4% | $9.57 | $3.8B | ||||||||||
Business-to-Business Revenue | Adjusted Gross Margins* | Adjusted Operating Margins* | Adjusted Diluted Earnings per Share* | Free Cash Flow* | ||||||||||
2023 Proxy Statement | 49 |
2021 | 2022 | ||||
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50 | Executive Compensation |
ÑCreate alignment between executive and shareholder interests | ÑPay for performance by ensuring incentives are tied to multiple business performance metrics | ÑProvide market competitive compensation to attract and retain top executive talent | ||||||
Performance-Based Incentives | ||||||||||||||||||||
Base Salary | Cash Bonus | Time-Based RSUs | Relative TSR Performance-Based RSUs | Financial Metric Performance-Based RSUs | ![]() | TARGET COMP VALUE | ||||||||||||||
Short-term | Long-term |
2023 Proxy Statement | 51 |
Pay Element | Purpose | Time Period | Performance Measures | |||||||||||
Base Salary | ÑAttract and retain executive talent | ÑAnnual | ||||||||||||
Variable Cash Incentive | ÑMotivate and reward our executive officers for achieving short-term company financial objectives aligned with value creation | ÑPaid semi-annually, with quarterly corporate financial targets tied to corporate strategy of profitable growth | Ñ50%: quarterly OPBT margin Ñ50%: year-over-year revenue growth (measured quarterly) ÑMinimum OPBT margin required for payout | |||||||||||
Annual Long-Term Incentives | TSR PRSUs ![]() | ÑAlign executive officer and shareholder interests to drive superior relative TSR results | ÑCumulative three-year period | ÑRelative TSR compared to comparator group ÑPayouts capped at target if absolute TSR is negative | ||||||||||
Financial Metric PRSUs ![]() | ÑAlign executive officer and shareholder interests with long-term profitability | ÑOne-year, two-year cumulative and three-year cumulative time periods | ÑNon-GAAP operating profit | |||||||||||
RSUs ![]() | ÑAttract and retain key executives | ÑFour-year graded vesting | ÑNone |
WHAT WE DO | WHAT WE DON’T DO | ||||||||||
ÑReview compensation practices of peers aligned with ADI’s business ÑProvide for annual cash incentives that are based solely on our financial performance ÑDesign compensation programs to align a significant portion of equity awards to long-term performance achievement ÑTie Incentive awards to rigorous performance targets aligned with our corporate strategy ÑCap payouts for relative TSR-based awards for instances of negative absolute TSR ÑProvide for compensation clawbacks pursuant to a clawback policy for our CEO and other named executive officers in the event of a material financial restatement due to fraud or willful misconduct ÑRequire significant share ownership by executive officers pursuant to stock ownership guidelines ÑConduct an annual “say-on-pay” vote | ÑNo hedging and pledging of ADI securities ÑNo excessive perquisites to our executive officers ÑNo gross-ups or compensation paid to officers or directors for any income tax owed for approved travel |
52 | Executive Compensation |
Role of the Compensation Consultant | ÑIn June 2021, Pearl Meyer and management recommended a peer group of companies for the purpose of assessing our executive compensation program, which was approved by the Compensation and Talent Committee. | ||||
Role of Management | ÑManagement then gathered data from these companies, which was considered by Pearl Meyer in its analysis of Mr. Roche’s compensation. Further, Mr. Roche considered this information, in addition to data from the Radford Global Technology Survey, in his recommendations on our other executive officers’ compensation. | ||||
Role of the Compensation and Talent Committee | ÑThe Compensation and Talent Committee considered Pearl Meyer’s advice, Mr. Roche’s recommendations for those executive officers reporting to him, and management’s proposed fiscal year 2022 performance goals prior to making its final and sole decision on all fiscal year 2022 executive compensation. At the Compensation and Talent Committee’s direction, Pearl Meyer provided a risk analysis of our executive compensation program. Finally, the Compensation and Talent Committee also certified performance-based compensation payouts for the applicable periods ended fiscal year 2022. | ||||
2023 Proxy Statement | 53 |
Additions: + | 2022 Peer Group | |||||||
Intel Corporation Micron Technology, Inc. NXP Semiconductors N.V. QUALCOMM Incorporated | Advanced Micro Devices, Inc. Agilent Technologies, Inc. Applied Materials, Inc. Boston Scientific Corporation Broadcom Inc. Intel Corporation KLA Corporation Lam Research Corporation | Marvell Technology, Inc. Microchip Technology Incorporated Micron Technology, Inc. NVIDIA Corporation NXP Semiconductors N.V. QUALCOMM Incorporated Skyworks Solutions, Inc. Texas Instruments Incorporated | ||||||
Removals: - | ||||||||
Maxim Integrated Products, Inc. NetApp, Inc. Xilinx, Inc. |
54 | Executive Compensation |
![]() | Pay Mix /Structure | We structure our pay to consist of both fixed and variable compensation with short- and long-term horizons. We believe that the variable elements of compensation, which represented 94% and 91% of the total target compensation for our CEO and other NEOs, respectively, excluding new-hire equity awards, for fiscal year 2022, are a sufficient percentage of overall compensation to motivate executives to produce superior short- and long-term corporate results and to achieve company goals, while the fixed element is also sufficiently high that the executives are not encouraged to take unnecessary or excessive risks in doing so. | ||||||
![]() | Metrics | We believe that our focus on both OPBT margin and year-over-year revenue growth through our executive performance incentive plan, and non-GAAP operating profit and stock price performance through our equity compensation program, provides a check on excessive short-term risk taking. That is, even if our executives could inappropriately increase OPBT margin or revenue by excessively reducing expenses or adding new revenue sources that are inconsistent with our business model, this could ultimately harm our stock price and the value of their equity awards. Conversely, if our executives were to add revenue sources at low margins in order to generate a higher growth multiple and increased stock prices, it could decrease OPBT margin and the value of their cash bonus payments. Our OPBT margin and year-over-year revenue growth targets are applicable to our executives and employees alike, which we believe encourages consistent behavior across the organization, and reflects goals that are challenging, but not so high that they require performance outside of what the Compensation and Talent Committee believes is reasonable for us or could motivate our executives and employees to take actions in which we assume unreasonable levels of risk. | ||||||
![]() | Driving Profitability | We cap our bonus payout factors. Even if we dramatically exceed our OPBT margin or year-over-year revenue growth targets, bonus payments are limited. In fiscal year 2022, the bonus payment factor cap was 300% of target. Conversely, we also have a floor on the OPBT margin target so that profitability at or below a certain level will result in no bonus payments for that performance period, regardless of revenue growth levels. We believe this avoids incentivizing management to drive revenue levels without regard to profitability. | ||||||
![]() | Stock Ownership Guidelines | Our stock ownership guidelines provide an incentive for management to consider ADI’s long-term interests because a portion of their personal investment portfolio consists of ADI stock. | ||||||
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2023 Proxy Statement | 55 |
Compensation Best Practices ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() | ||
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1 ![]() | 2 ![]() | 3 ![]() | ||||||||||||||||||||||||
First, we ensure our executive compensation is competitive and attracts and retains top executive talent by understanding how the total target compensation (consisting of base salary, variable cash incentive target, and annual long-term incentive compensation) of each of our executive officers compares to the total target compensation of those in similar positions within our peer group. | We then consider a variety of factors, including the scope of the role, tenure in the position, and the performance and experience of the individual when deciding how to position each executive officer’s total target compensation to the total target compensation of those in similar positions within our peer group. | We structure our compensation package to align our executive officers’ interests with those of our shareholders by tying a significant portion of their total compensation directly to ADI’s short- and long-term performance. For executive officers, this is measured by OPBT, OPBT margin, year-over-year revenue growth, absolute stock price appreciation, and relative TSR, which all drive shareholder value. |
56 | Executive Compensation |
2023 Proxy Statement | 57 |
BASE SALARY | ![]() | ANNUAL CASH INCENTIVE | ![]() | LONG-TERM EQUITY COMPENSATION | ![]() | RETIREMENT AND OTHER EMPLOYEE BENEFITS | ||||||||||||||
ÑAttract and retain executive talent ÑProvide stable source of income | ÑLink pay and short-term company performance ÑMotivate and reward executives for achieving short-term company financial objectives aligned with value creation | ÑLink pay and long-term company performance ÑAlign the interests of executives with shareholders by rewarding long-term stock price appreciation | ÑRetain executive talent by providing financial protection and security |
BASE SALARY | ![]() | INDIVIDUAL TARGET BONUS PERCENTAGE | ![]() | BONUS PAYOUT FACTOR | ![]() | BONUS PAYOUT |
58 | Executive Compensation |
1H FY22 ADI Bonus Plan Targets (1) | 2H FY22 ADI Bonus Plan Targets (1) | |||||||||||||||||||||||||||||||
OPBT Margin | Revenue | OPBT Margin | Revenue | |||||||||||||||||||||||||||||
OPBT Margin by Qtr. | Bonus Payout Factor | YTY Growth by Qtr. | Bonus Payout Factor | OPBT Margin by Qtr. | Bonus Payout Factor | YTY Growth by Qtr. | Bonus Payout Factor | |||||||||||||||||||||||||
≤ 36.0% | 0 | ≤ 0% | 0 | ≤ 40.0% | 0 | ≤ 0% | 0 | |||||||||||||||||||||||||
39.0% | 1.0x | 5.0% | 1.0x | 42.0% | 1.0x | 8.0% | 1.0x | |||||||||||||||||||||||||
42.0% | 2.0x | 10.0% | 2.0x | 45.0% | 2.0x | 15.0% | 2.0x | |||||||||||||||||||||||||
≥ 45.0% | 3.0x | ≥ 15% | 3.0x | ≥ 50.0% | 3.0x | ≥ 22% | 3.0x | |||||||||||||||||||||||||
If OPBT margin <=36% the entire bonus will pay at 0% regardless of revenue attainment | If OPBT margin <=40% the entire bonus will pay at 0% regardless of revenue attainment |