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As Of Filer Filing For·On·As Docs:Size Issuer Agent 5/01/17 Intel Corp DEFA14A 5/01/17 1:9.0M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size 1: DEFA14A Additional Definitive Proxy Solicitation Material HTML 62K
| DEFA14A |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☑
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ Preliminary Proxy Statement
☐ Confidential, for use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☐ Definitive Proxy Statement
☑ Definitive Additional Materials
☐ Soliciting Material Pursuant to § 240.14a-12
INTEL CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
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2017 Proxy Statement Supplement
may 2017
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CONTENTS
Page
Executive Summary 3 Strategy and Performance 4 Corporate Governance 8
Stockholder Engagement and Corporate Responsibility 10 Leadership and Executive Compensation 14 Voting Recommendations 19
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Executive Summary
In 2016, we continued to transform from a PC-focused company to one that powers the cloud and billions of smart, connected computing devices that drive a flood of data. While building a strong foundation for growth in 2016, we achieved record revenue of $59.4 billion.
Our active and engaged Board regularly reviews its practices and composition to assure the right breadth and diversity of skills and experience. We have strong independent leadership with a robust lead independent director role and a track record of refreshment, having added 5 of our 11 director nominees in the past 5 years.
Our Board strives to lead in corporate governance. We were one of the first companies to adopt majority voting in director elections, we provided stockholders with an advisory vote on executive compensation several years before it was required by law, and in early 2016, we adopted proxy access.
We are committed to meaningful and transparent engagement with our stockholders. Our integrated outreach team meets with a broad base of investors throughout the year to discuss corporate governance, executive compensation, and corporate responsibility practices.
We remain a leader in corporate responsibility. We set ambitious goals and make strategic investments to drive improvements in environmental sustainability, supply chain responsibility, diversity and inclusion, and social impact and we believe our approach creates long-term value for Intel and our stockholders by helping us mitigate risks, reduce costs, build brand value, and identify new opportunities.
Our executive compensation programs are designed to link pay with performance and encourage the creation of long-term stockholder value.
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Intel is evolving.
To a company that powers the data center and billions of smart, connected devices.
Intel’s Vision:
If it is smart and connected, it is best with Intel.
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2016: Building a strong foundation for growth
Record revenue of $59.4 billion, up 7% from 2015, driven by our acquisition of Altera and growth in
our Data Center Group, Client Computing Group, and Internet of Things Group businesses.
Data Center: significant growth in cloud and networking businesses, and launched products in critical
data center adjacencies, including silicon photonics and Omni-Path Fabric.
Client Computing: began shipping our new 7th Gen Intel® Core™ processors and ramped our XMM™
2016 7360 LTE modem into high volume.
Highlights Internet of Things: record revenue and major design wins.
Altera/Programmable Solutions: sampled our Stratix® 10 FPGAs, the industry’s first 14nm FPGA.
Continued our investment in disruptive memory technologies (3D NAND and Intel® Optane™
memory), 5G connectivity, artificial intelligence, and data-intensive fields such as autonomous
driving, including our announcement in March 2017 of our agreement to acquire Mobileye N.V.
Venkata (Murthy) Renduchintala joins as Executive VP; President, Client and IoT Businesses and
System Architecture Group.
Leadership Robert H. Swan joins as CFO.
Developments Stacy J. Smith becomes Executive VP, Manufacturing, Operations, and Sales.
Diane M. Bryant, General Manager of the Data Center Group, is promoted to Executive VP.
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Commitment to Stockholder returns while investing in our business
350
300 Dividend
Dividend and Share Repurchases
250
Share
Repurchase $97B since 2006
$B 200 150
R & D R & D and Capital Expenditure
100 $180B since 2006
50 Capital Expenditure
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Intel 6
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Total stockholder return OutPerformance
3 YEAR STOCKHOLDER RETURN
As of 12/30/2016 60%
50%
40%
INTC
30%
S&P 100 20% DOW 30
10%
0%
2014 2015 2016
PORTFOLIO 3 YEAR (GRAPH) 1 YEAR
Intel 56% 6% Dow 30 30% 13% S&P 100 32% 10%
Source: Factset. TSR was calculated as of the stock price end of day 12/30/16 (INTC stock price was $36.60). 7
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Corporate governance best practices
Board
Strong independent Lead Director Annual self-evaluation of individual directors and Board as a whole
Board search process that includes actively seeking diverse Board oversight of robust investor engagement program
board candidates Limits to how many other boards on which directors may serve
Board planning for CEO succession and monitoring and Director retirement age policy
advisement on management’s succession planning for Corporate Governance and Nominating Committee review and reporting
other executives to the Board on corporate responsibility and sustainability issues
Board oversight of risk management
Stockholder Rights and Engagement
Robust two-way dialogue with investors Special meeting rights for stockholders
Majority voting for all directors Annual Say-On-Pay vote
Proxy access for stockholders Biennial vote on 2006 Equity Incentive Plan
Pay Practices
Performance-based pay that uses a variety of performance Independent Compensation Committee and independent
measures and performance periods compensation consultant
Annual compensation review and risk assessment Limit on maximum incentive payouts
Robust stock ownership guidelines for all executive officers Anti-hedging policy
and directors A portion of every executive’s and employee’s compensation linked
Claw-back policy for both annual incentive cash plan and to corporate responsibility factors since 2008
equity incentive plan
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Intel Board of Directors NOMINEES
Andy D. Brian M. CharleneAneel
Bryant Krzanich BarshefskyBhusri
Chairman of the CEO, Senior InternationalIndependent Lead
Board of Intel Partner, Wilmer CutlerDirector-Elect,
Directors, Corporation Pickering Hale andCo-Founder and
Intel Corporation Dorr LLPCEO, Workday, Inc.
Reed E. Omar Tsu-JaeDavid S.
Hundt Ishrak King LiuPottruck
Principal, REH Chairman Professor,Chairman and CEO,
Advisors LLC and CEO, University ofRed Eagle
Medtronic plc California, BerkeleyVentures, Inc.
Gregory D. Frank D. David B.
Smith Yeary Yoffie
CFO, EVP Corporate Executive Professor,
Development and Chairman, Harvard
Strategy, The CamberView Business
Boeing Company Partners LLC School
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Skilled, Engaged and Evolving Board
Active Oversight. Our Board engages in active discussion and oversight of the strategy behind Intel’s actions, including the process of capturing opportunities and leading with innovation while balancing possible risks with returns for stockholders. Many of the Board’s strategic conversations in 2016 focused on how best to allocate resources for long-term stockholder value. The company has made progress in allocating more resources to growing and emerging businesses, seeking to expand market opportunities in areas such as memory and autonomous driving while continuing to invest in areas that extend our leadership in “Moore’s Law.”
Focus on Refreshment. With an eye to Intel’s future, the Board regularly reviews its practices and composition to ensure the necessary breadth and diversity of skills and experience. That is why, in 2016, we added a new director, Dr. Tsu-Jae King Liu, with nearly 20 years of experience in higher education in a range of faculty and administrative roles, bringing to the Board industry and technical experience. In 2017, we added two additional new directors, Messrs. Omar Ishrak and Gregory D. Smith, who each brings deep leadership experience at innovative, global companies.
DIRECTOR SKILLS AND EXPERIENCE
SENIOR LEADERSHIP EXPERIENCE PUBLIC COMPANY BOARD EXPERIENCE BUSINESS DEVELOPMENT AND M&A EXPERTISE
FINANCIAL EXPERTISE
INDUSTRY AND IT/TECHNICAL EXPERTISE
Operational and Manufacturing EXPERTISE
Brand/Marketing Expertise Government Expertise Global/International Expertise Legal/Regulatory Expertise
8.8 Years:
Average Director Tenure
9 of 11
Director Nominees are Independent
Directors
11+ yrs. Directors 37% 1-4 yrs.
45%
Directors 5-10 yrs.
18%
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Investor Engagement and Outreach
Spring: Conduct Summer: Review
pre-annual meeting annual meeting results,
stockholder meetings to determine any next step
answer questions actions and plan post-
and obtain annual meeting feedback stockholder engagement Annual Stockholder Meeting Fall: Conduct post-annual meeting
Winter: Incorporate
stockholder meetings
input from stockholder
to review company
meetings into annual
performance, discuss
meeting planning
governance matters,
and obtain feedback
During 2016, our integrated outreach team led by our Investor Relations group, Corporate Responsibility office, and the Corporate Secretary’s office, met with investors on a wide variety of issues. We believe that engaging openly with our investors drives increased corporate accountability, improves decision making and ultimately creates long-term value. We are committed to:
Accountability. Drive and support leading corporate governance and Board practices to ensure oversight, accountability, and good decision making.
Transparency. Maintain high levels of transparency on a range of financial, governance and corporate responsibility issues to build trust and sustain two-way dialogue that supports our business success.
Engagement. Proactively engage with stockholders and stakeholder groups in dialogue on a range of topics to identify emerging trends and issues to inform our thinking and approach.
We pursue multiple avenues for stockholder engagement, including in-person and teleconference meetings with our stockholders, participating at various conferences, and issuing periodic reports on our activities, which are available at www.intc.com and www.intel.com/responsibility.
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Corporate Responsibility at Intel
We set ambitious goals and make strategic investments to drive improvements in environmental sustainability, supply chain responsibility, diversity and inclusion, and social impact that benefit the environment and society.
Our integrated approach to corporate responsibility—built on a strong foundation of transparency, governance, and ethics—creates long-term value for Intel and our stockholders by helping us mitigate risks, reduce costs, build brand value, and identify new opportunities.
Environmental Sustainability Supply Chain Responsibility Diversity and InclusionSocial Impact
We continue to drive toward the Our proactive approach to To shape the future ofOur social impact initiatives
lowest environmental footprint supplier accountability and technology, we must beempower the next generation of
possible for our own operations, capability-building creates representative of that future. Weinnovators, helping to build
and work with others to find value by reducing risk, have committed $300 million totrust with key stakeholders,
ways that technology can be improving product quality, and support our goal to achieve fullsupport our long-term talent
used as a tool to address raising the overall representation of women andand diversity objectives, and
environmental challenges. performance of our suppliers. underrepresented minorities insupport expansion of future
our U.S. workforce by 2020.market opportunities.
Read our most recent Corporate Responsibility Report at: www.intel.com/responsibility 12
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Doing the Right Things Right
Intel has a long history of being recognized for our corporate responsibility and sustainability performance and leadership. We have been included in many third-party lists and rankings for more than a decade.
Barron’s. World’s Most Respected Companies
Corporate Knights. Global 100 Most Sustainable Corporations
Corporate Responsibility Magazine. 100 Best Corporate Citizens
Diversity MBA magazine. 50 Out Front Best Places for Women and Diverse Managers to Work
Dow Jones’ Sustainability Indices. North America Index
Ethisphere Institute. World’s Most Ethical Companies
Forbes. World’s Most Reputable Companies and Most Valuable Brand
Fortune magazine. Change the World List and World’s Most Admired Companies FTSE Group. Listed on the FTSE4Good Index Gartner. Top 25 Supply Chains Human Rights Campaign. Corporate Equality Index Interbrand. Best Global Brands Newsweek. Top 500 Green Companies in America and the World U.S. EPA. 100% Green Power Users List and Sustained Excellence in Green Power Award Working Mother magazine. 100 Best Companies for Working Mothers
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Principle Elements of Executive officer Compensation1
ELEMENT
Base Salary
Incentive Cash Compensation
Incentive Equity Awards
PHILOSOPHY
Reflects job responsibilities and competitive with industry norms
Focuses on annual financial and operational goals to incentivize the achievement of results that should ultimately drive stockholder value creation
Create long-term alignment with stockholders and incentivize long-term performance achievement
VEHICLE PERFORMANCE METRIC
Cash N/A; salaries reviewed annually
Absolute and relative annual net income performance, Cash group-specific annual operational goals
RSUs Stock price appreciation; (40%) 3-year vesting period
OSUs 3-year relative total (60%) stockholder return
Approx. 92% of CEO targeted total direct pay is performance -based
1Our newly hired executive officers also received cash sign-on bonuses and new-hire RSUs to offset in part the value foregone by these officers in separating from their prior employers to join Intel.
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Compensation Mix Links Pay to Performance
CEO Pay Mix*
Total Direct Compensation Chart –Legacy Listed Officers**
Total Direct Compensation Chart –Newly Hired Listed Officers**
Base Salary 8%
Non-Equity Incentive Compensation 22%
Equity Awards 70%
100% 90% 30% 80% 39% 39% 43% 42% 44% 70% 60% 28% 50% 24% 32% 26% 27% 28% 40% 30%
28% 26% 20% 20% 22% 18% 16% 10% 14% 12% 12% 11% 11% 8% 0%
Brian M. Andy D. Stacy J. Diane M. William M. Gregory R. Krzanich Bryant Smith Bryant Holt Pearson
Salary Incentive Cash RSUs OSUs
100% 90% 80% 40% 70% 65% 60% 50% 18% 40% 14% 30% 20%
20% 12%
10% 9% 11%
0% 6% 5% Robert H. Swan Venkata (Murthy) Renduchintala
Salary Incentive Cash RSUs Sign-On Cash OSUs New-Hire RSUs
*Based on pay reported in the Summary Compensation Table on page 59 of the 2017 Proxy. Does not include “Change in
Pension Value and Non-Qualified Deferred Compensation Earnings” or “All Other Compensation.“ 15 **Source: page 45 of the 2017 Proxy.
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Leadership Developments AND Key Compensation Decisions
We expect that the perspectives our new and current executive officers bring to the company will help accelerate our transformation from a PC company to a cloud and smart, connected device company
Brian M. Our CEO has over 31 years of service with Intel and brings senior leadership,
Krzanich experience, and a unique perspective on the company. His 2016 salary and annual
Third Year equity grant value were increased in order to bring his total compensation to the
as CEO median of market.
An industry expert and former Qualcomm executive, Mr. Renduchintala joined Intel in
Venkata late 2015, bringing a unique blend of technical, operations, business, and customer
(Murthy) relationship-building skills, as well as extensive expertise from his long career in the
Renduchintala system-on-chip, mobile, and Internet of Things areas. His new-hire compensation
Key New Hire included a sign-on bonus and new-hire RSUs to offset in part the value given up in
separating from his prior employer and to encourage him to join Intel.
Mr. Swan, a former private equity partner and CFO of eBay, joined Intel in late 2016 and
Robert H. provides a wealth of financial acumen and strategic insight for Intel’s continuing
Swan transformation. His new-hire compensation included a sign-on bonus and new-hire
New CFO RSUs to offset in part the value given up in separating from his prior employer and to
encourage him to join Intel.
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Leadership Developments AND Key Compensation Decisions
We expect that the perspectives our new and current executive officers bring to the company will help accelerate our transformation from a PC company to a cloud and smart, connected device company
Stacy J. Our former CFO moved into a new role in late 2016, assuming responsibility for
overseeing manufacturing, operations, and sales. Mr. Smith had received a 3% increase
Smith in salary and 5% increase in annual equity grant value for 2016, in line with market
Critical New Role trends for his role as our then CFO.
The general manager of our Data Center Group was promoted to Executive Vice
Diane M. President and was appointed as an executive officer in 2016, reflecting the elevated role
Bryant of our cloud and data center businesses as growth drivers for the company. Ms. Bryant’s
Enhanced Role salary and annual cash incentive target were increased as a result of her promotion, and
she received a promotional grant of RSUs.
Andy D. Our former CAO and CFO provides critical Board leadership. His role has transitioned to
focus primarily on supporting and guiding the Board, and his 2016 salary, annual cash
Bryant incentive target, and annual equity grant value were reduced to reflect this change in his
Board Leadership role.
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Equity Compensation at Intel
Intel has a long-standing practice of granting equity awards not only to its executives and directors, but also broadly among its employees. Approximately 84% of Intel’s employees received an equity award in 2016. Participants are selected by the Compensation Committee or its delegate, consistent with the objectives of the 2006 Equity Incentive Plan (2006 EIP).
We carefully manage our share usage under the 2006 EIP. Over the last three years, our annual gross burn rate has averaged 1.1%.
2016 2015 2014 Average
Net Burn Rate 0.9% 0.7% 0.8% 0.8% Gross Burn Rate 1.1% 0.9% 1.2% 1.1% Overhang 7.3% 8.9% 9.6% 8.6%
In Proposal 4 at the 2017 Annual Stockholders’ Meeting, we are seeking stockholder approval of our amended and restated 2006 EIP, primarily to extend the term of the plan to 2020 and to add 33 million shares to the plan. Approval would also enable Intel to satisfy certain French law requirements for granting tax-qualified RSUs to employees of our French subsidiaries.
All of our full-time and part-time employees, where legally eligible to participate, and our non-employee directors are eligible to participate in the 2006 EIP, our sole active plan for granting equity awards. As of December 31, 2016, there were 106,000 full-and part-time employees and 9 non-employee directors eligible to participate in the 2006 EIP. As of December 31, 2016, there were 914 employees of our French subsidiaries eligible to participate in the 2006 EIP.
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Board of Directors Voting Recommendations
Annual Meeting Agenda and Voting
Voting Recommendation Proposal of the Board
1. Election of the 11 directors named in the proxy statement FOR EACH DIRECTOR NOMINEE
2. Ratification of selection of Ernst & Young LLP as our independent registered public accounting firm for 2017 FOR
3. Advisory vote to approve executive compensation FOR
4. Approval of amendment and restatement of the 2006 Equity Incentive Plan FOR
5. Advisory vote on the frequency of holding future advisory votes to approve executive compensation ONE YEAR
Stockholder Proposals
6. Stockholder proposal requesting an annual advisory vote on political contributions, if properly presented AGAINST
Stockholder proposal requesting that votes counted on stockholder proposals exclude abstentions,
7. AGAINST if properly presented
Our Board asks for your support at our 2017 Annual Stockholders’ Meeting
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Board Perspective on Stockholder Proposals
Advisory Vote on Political Contributions
Policymaker decisions profoundly impact our industry, and Intel has strong policies and disclosure practices in place. Intel already:
Is a “trendsetter” ranked in the Top 5 by the CPA-Zicklin Index of Corporate Political Disclosure and Accountability
Provides significant disclosure about our political contributions in line with best practices
Does not use corporate funds to make political contributions of the type in Citizens United
Publishes data on our political contributions on our website and in our annual Corporate Responsibility Report
We believe the steps Intel already takes are the most practical and effective approaches to addressing this issue.
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Board Perspective on Stockholder Proposals
Adopting an Alternative Voting Standard for Stockholder Proposals
Intel is committed to good corporate governance standards. Intel already: Employs a majority voting standard in uncontested director elections Has no supermajority voting provisions in its governing documents Provides for the annual election of all directors
Was one of the first large public companies to provide stockholders the opportunity to vote on an advisory basis to approve our executive compensation and now provides that voting opportunity on an annual basis
We believe our corporate governance practices, including our existing vote counting standards, empower and appropriately recognize all stockholders.
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2017 Annual STOCKholders’ MEETING
This information is being provided to stockholders in addition to the proxy statement filed by Intel with the Securities Exchange Commission on April 6, 2017.
Please read the complete proxy statement and accompanying materials carefully before you make a voting decision. Voting instructions and proxies may be revoked at any time in the manner described in more detail in the proxy statement.
The proxy statement is available free of charge at www.intc.com and at www.sec.gov.
Intel, the Intel logo, Intel Core, XMM, Stratix, and Intel Optane are trademarks of Intel Corporation in the U.S. and/or other countries. *Other names and brands may be claimed as the property of others.
Forward-Looking Statements
Statements in these supplemental materials that refer to forecast, future plans, and expectations are forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” “expects,” “intends,” “goals,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” “will,” “would,” “should,” “could,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements that refer to or are based on projections, uncertain events, or assumptions also identify forward-looking statements. Such statements are based on management’s expectations as of May 1, 2017 and involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements. Important factors that could cause actual results to differ materially from the company’s expectations are set forth in Intel’s earnings release dated April 27, 2017, which is included as an exhibit to Intel’s Form 8-K furnished to the SEC on such date. Additional information regarding these and other factors that could affect Intel’s results is included in Intel’s SEC filings, including the company’s most recent reports on Forms 10-K and 10-Q. Copies of Intel’s Form 10-K, 10-Q and 8-K reports may be obtained by visiting our Investor Relations website at www.intc.com or the SEC’s website at www.sec.gov.
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| This ‘DEFA14A’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
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| Filed on / Effective on: | 5/1/17 | |||
| 4/27/17 | 10-Q, 3, 4, 8-K | |||
| 4/6/17 | DEF 14A, DEFA14A | |||
| 12/31/16 | 10-K | |||
| List all Filings | ||||
