Lam Research Corporation · NASDAQ:LRCX
Lam Research — Proxy Contest (October 2019)
26 slides from Lam Research's proxy contest presentation, Oct 15, 2019
Slide 1: Lam Research Corporation Stockholder Outreach Presentation
Lam Research Corporation Stockholder Outreach Presentation October, 2019
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation and the accompanying discussion contain “forward-looking statements” under U.S. securities laws. Forward-looking statements include any statements that are not statements of historical fact. Examples of forward-looking state
Slide 3: Table of Contents
Lam’s Vision to Create Stockholder Value Board of Directors Say on Pay Executive Compensation Highlights Annual Incentive Program Overview Long-Term Incentive Program Overview Special equity awards in connection with leadership transition Governance Highlights CSR Highlights Table of Contents
Slide 4: Lam's Vision to Create Stockholder Value
Lam’s Vision to Create Stockholder Value
Slide 5: Vision to Drive Value Creation
Vision to Drive Value Creation Solve Our Customers’ Grand Challenges Create and Capture Value Invest in the Future of the Company Deliver Value Creation for Stockholders Deliver disruptive technologies to enable success of customers Compete for and win a greater share of customers’ investments Conti
Slide 6: Capital Allocation Strategy
Capital Allocation Strategy Plan to return at least 50% of Free Cash Flow over the next five years Quarterly dividend at $1.15/share, with a bias to grow over time Have repurchased ~ $5B in shares in calendar year 2018 through end of June 2019 $3B remaining to repurchase from $5B authorization Capit
Slide 7: Board of Directors
Board of Directors
Slide 8: Balance of Tenure, Age and Gender
Balance of Tenure, Age and Gender Tenure New perspectives and ideas balanced with benefit of valuable Company and industry experience Average tenure 5.17 years Diversity Broad range of experiences, areas of substantive expertise and geographic diversity As shown in director biographies and skills/ex
Slide 9: Director Nominees
Name; year of election to Board Sohail U. Ahmed (2019) Timothy M. Archer President and Chief Executive Officer (2018) Eric K. Brandt (2010) Michael R. Cannon (2011) Youssef A. El-Mansy (2012) Catherine P. Lego Compensation & HR Committee Chair (2006) Bethany J. Mayer (2019) Abhijit Y. Talwalkar Lead
Slide 10: Board Nomination Process
Nominating and Governance Committee recommends nominees Independent directors make nominations Refreshment considerations Diversity Balance of tenure – new ideas; experience with Company and industry History of gender diversity Skills & experiences Per matrix Annual evaluations of board, committees
Slide 11: Say on Pay Executive Compensation Highlights
Say on Pay Executive Compensation Highlights Annual Incentive Program Overview Long-Term Incentive Program Overview Special Equity Awards in connection with Leadership Transition
Slide 12: Executive Compensation Highlights
Executive Compensation Highlights What We Do Pay for Performance – Our executive compensation program is designed to pay for performance with 100% of the annual incentive program tied to company financial, strategic and operational performance metrics; 50% of the long-term incentive program tied to
Slide 13: Annual Incentive Program Overview
Design: Attract and retain top talent, while maintaining cost-effectiveness Annual, performance-based compensation Targets based on achievement of pre-set metrics and stretch goals Payout aligned with performance Payouts limited by funding pool based on non-GAAP operating income May exercise negativ
Slide 14: Annual Incentive Program Results
Our annual incentive program goals are established based on our business outlook, which considers our served available market, our market share goals and our operational targets Over the past six years we have steadily raised the Corporate Performance Factor target as our outlook and the industry ha
Slide 15: Long-Term Incentive Program Overview
Design: Attract and retain top talent Provide competitive compensation Align pay with achievement of business objectives and stock performance over a multi-year period Reward outstanding company performance Create stockholder value over the long term Multi-year target opportunity (three-year vesting
Slide 16: Lam Total Stockholder Return Performance
Track record of outperforming benchmarks and delivering value to our stockholders Lam Total Stockholder Return Performance $100 invested on June 29, 2014 in stock or June 30, 2014 in index, including reinvestment of dividends. Indexes calculated on month-end basis. ©2019 Standard & Poor’s, a divisio
Slide 17: Background to Special Equity Awards in connection with Leadership Transition
Former CEO resigned in December 2018 amid allegations of misconduct Special investigation by independent board committee No financial misconduct, no issues of integrity of financial systems or controls. Important to maintain stable leadership at critical time Consistency and stability in leadership
Slide 18: Special Equity Awards – Award Details
Award amounts and vesting terms determined in consultation with Compensation Committee’s compensation consultant Four-year vesting, longer than regular 3-year LTI awards, for increased retention Total compensation consistent with peer group and market survey data CEO award In light of critical need,
Slide 19: Governance Highlights
Governance Highlights
Slide 20: Corporate Governance Highlights
© 2019 Lam Research Corp. 20 Corporate Governance Highlights Board and Other Governance Information Lam Notes Directors Subject to Stock Ownership Guidelines Y Hedging and Pledging Prohibited Y Annual Election of Directors Y Declassified board & annual elections Voting Standard Majority Majority vot
Slide 21: CSR Highlights
CSR Highlights
Slide 22: 2018 Corporate Social Responsibility (CSR) Report
2018 Corporate Social Responsibility (CSR) Report 5th Annual Report - Published June 18, 2019 2018 CSR report: Overview of the company’s products and operations relating to environmental, social, and economic performance Report encompasses four main pillars: Workplace, Operations, Supply Chain, Comm
Slide 23: 2018 CSR Report Overview
2018 CSR Report Overview Enhanced governance and continued commitment to Core Values guiding our CSR activities Operations We manage the social and environmental impacts of our operations Reached 75% of our 2020 energy savings goal Achieved a recordable injury rate of 0.29 – half the industry averag
Slide 24: Explanation regarding non-GAAP operating income
Explanation regarding non-GAAP operating income
Slide 25: Explanation regarding non-GAAP operating income
Non-GAAP operating income is derived from GAAP results, with charges and credits in the following line items excluded from GAAP results for applicable quarters during fiscal years 2013 through 2019: Acquisition-related inventory fair-value impact Acquisition-related costs Amortization related to int
Slide 26: VA A
VA A INNOVATIVE TECHNOLOGY TRUSTED PRODUCTIVITY FAST SOLUTIONS ‘N wy 6«CN