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Investor Presentaiton

(4) Shown is the aggregate grant date fair value of options granted in 2016 calculated in accordance with ASC 718. The discussion of the assumptions used for purposes of calculating the grant date fair value appears in Note 4 to the financial statements in TI's annual report on Form 10-K for the year ended December 31, 2016. The terms of these options are as set forth on page 15 except that for options granted before 2010, the grant becomes fully exercisable upon a change in control of TI. The table below shows the aggregate number of shares underlying outstanding stock options held by the named individuals as of December 31, 2016. Name R. W. Babb, Jr. M. A. Blinn D. A. Carp J. F. Clark C. S. Cox J. M. Hobby R. Kirk P. H. Patsley R. E. Sanchez W. R. Sanders R. J. Simmons C. T. Whitman Options (in Shares) 69,735 32,828 90,735 9,990 90,735 32,828 90,735 59,733 69,735 40,168 90,735 (5) SEC rules require the disclosure of earnings on deferred compensation to the extent that the interest rate exceeds a specified rate (Federal Rate), which is 120 percent of the applicable federal long-term interest rate with compounding. Under the terms of the Director Plan, deferred compensation cash amounts earn interest at a rate based on Moody's Seasoned Aaa Corporate Bonds. For 2016, this interest rate exceeded the Federal Rate by 1.74 percentage points. Shown is the amount of interest earned on the directors' deferred compensation accounts that was in excess of the Federal Rate. (6) Consists of (a) the annual cost ($40 per director) of premiums for travel and accident insurance policies, (b) contributions under the TI Foundation matching gift program of $6,500 for Mr. Blinn, $20,000 for Ms. Clark, $5,000 for Ms. Cox, $10,000 for Mr. Sanchez and Ms. Simmons, and $1,000 for Ms. Whitman and (c) for Messrs. Carp and Sanders, third-party administration fees for the Director Award Program. Each director whose service commenced prior to June 20, 2002, is eligible to participate in the Director Award Program, a charitable donation program under which we will contribute a total of $500,000 per eligible director to as many as three educational institutions recommended by the director and approved by us. The contributions are made following the director's death. Directors receive no financial benefit from the program, and all charitable deductions belong to the company. In accordance with SEC rules, we have included the company's annual costs under the program in All Other Compensation of the directors who participate. The cost attributable to each of Messrs. Carp and Sanders for their participation in this program was $778. Executive compensation We are providing shareholders the opportunity to cast advisory votes on named executive officer compensation as required by Section 14A of the Securities Exchange Act. Proposal regarding advisory approval of the company's executive compensation The "named executive officers" are the chief executive officer, chief financial officer and the three other most highly compensated executive officers, as named in the compensation tables on pages 31-42. We ask shareholders to approve the following resolution: RESOLVED, that the compensation paid to the company's named executive officers, as disclosed in this proxy statement pursuant to the Securities and Exchange Commission's compensation disclosure rules, including the Compensation Discussion and Analysis, compensation tables and narrative discussion on pages 18-42 of this proxy statement, is hereby approved. We encourage shareholders to review the Compensation Discussion and Analysis section of the proxy statement, which follows. It discusses our executive compensation policies and programs and explains the compensation decisions relating to the named executive officers for 2016. We believe that the policies and programs serve the interests of our shareholders and that the compensation received by the named executive officers is commensurate with the performance and strategic position of the company. TEXAS INSTRUMENTS • 2017 PROXY STATEMENT 17 PROXY STATEMENT
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