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Investor Presentaiton

This table shows the annual rate of base salary as set by the committee. In the summary compensation table, the "Salary" column shows the actual salary paid in the year. This table has separate columns for profit sharing and bonus. In the summary compensation table, profit sharing and bonus are aggregated in the column for "Non-Equity Incentive Plan Compensation," in accordance with SEC requirements. Please see notes 1 and 2 to the summary compensation table for information about how grant date fair value was calculated. For Mr. Crutcher, the "Total" for 2016 was higher than for 2015 primarily due to the higher bonus in 2016, reflecting his growth in his role as Executive Vice President and the increased impact he had on the performance of the company. For the other officers, including Mr. Templeton, the "Total" for 2016 increased slightly from 2015 because of increases in base salary, as well as increased profit sharing, reflecting the increased profits of the company. Both the bonus for 2016 and the value of 2016 equity compensation granted to each of these other officers were held flat. The compensation decisions shown above resulted in the following 2016 compensation mix for the named executive officers: 2% 23% CEO 8% 22% 2% Other NEOS* 11% Equity dilution Base Salary 67% Equity Compensation 65% Profit Sharing Bonus * Average data for the named executive officers other than Mr. Templeton The Compensation Committee's goal is to keep net annual dilution from equity compensation under 2 percent. "Net annual dilution" means the number of shares under equity awards granted by the committee each year to all employees (net of award forfeitures) as a percentage of the shares of the company's outstanding common stock. Equity awards granted in 2016 resulted in 1.2 percent net annual dilution. Process for equity grants The Compensation Committee makes grant decisions for equity compensation at its January meeting each year. The dates on which these meetings occur are generally set three years in advance. The January meetings of the board and the committee generally occur in the week or two before we announce our financial results for the previous quarter and year. On occasion, the committee may grant stock options or restricted stock units to executives at times other than January. For example, it has done so in connection with job promotions and for purposes of retention. We do not back-date stock options or restricted stock units. We do not accelerate or delay the release of information due to plans for making equity grants. If the committee meeting falls in the same month as the release of the company's financial results, the committee's practice is to make grants effective (i) after the results have been released or (ii) on the meeting day if later. In other months, its practice is to make them effective on the day of committee action. The exercise price of stock options is the closing price of TI stock on the effective date of the grant. TEXAS INSTRUMENTS • 2017 PROXY STATEMENT 27 27 PROXY STATEMENT
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