PRE 14A 1 d317892dpre14a.htm PRE 14A PRE 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

SCHEDULE 14A

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 under §240.14a-12

Dell Technologies Inc.

(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):

 

No fee required.

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 


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LOGO


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LOGO

Dear fellow stockholders:

On behalf of the Board of Directors, it is my pleasure to invite you to Dell Technologies Inc.’s 2022 Annual Meeting of Stockholders. The meeting will be held virtually on Monday, June 27, 2022, at 9:30 a.m., Central Time. The meeting can be accessed by visiting www.virtualshareholdermeeting.com/DELL2022, where you will be able to listen to the meeting live, submit questions and vote online.

 

             
 

“ Along with our customers and partners, we have helped accelerate digital transformation faster than anyone could have predicted, and in the process, we brought our company to a new powerful and relevant position with our customers and the world at large.”

 

MICHAEL S. DELL, CHAIRMAN AND CEO

 

 
   

You will find information regarding the matters to be voted on in the accompanying Notice of Annual Meeting of Stockholders and proxy statement. We are sending many of our stockholders a notice via the internet regarding the availability of the proxy statement, our annual report on Form 10-K for the fiscal year ended January 28, 2022 and other relevant materials. A paper copy of these materials may be requested using one of the methods described in the accompanying proxy statement or the Notice of Internet Availability of Proxy Materials.

You may visit http://investors.delltechnologies.com to access various web-based reports, executive messages and timely information about Dell Technologies’ global business.

Whether or not you plan to attend the annual meeting, please submit your proxy or voting instructions using one of the voting methods described in the accompanying proxy statement. Submitting your proxy or voting instructions by any of these methods will not affect your right to attend the virtual meeting and vote your shares at the virtual meeting if you wish to do so.

If you have questions about the annual meeting, require assistance in submitting your proxy or voting your shares or need additional copies of the accompanying proxy statement or the proxy card, please contact Investor Relations at (512) 728-7800 or investor_relations@dell.com.

If your bank, brokerage firm or other nominee holds your shares, you also should contact your nominee for additional information.

 

LOGO         

Sincerely,

 

Michael S. Dell

Chairman of the Board and

Chief Executive Officer

 

May 17, 2022


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LOGO

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders of Dell Technologies Inc.:

NOTICE IS HEREBY GIVEN that the 2022 Annual Meeting of Stockholders of Dell Technologies Inc., or Dell Technologies, will be held virtually on Monday, June 27, 2022, at 9:30 a.m., Central Time. The annual meeting can be accessed by visiting www.virtualshareholdermeeting.com/DELL2022, where you will be able to listen to the meeting live, submit questions and vote online. The annual meeting is being held for the following purposes:

 

1.

To elect to the Board of Directors the seven nominees for Group I director and the nominee for Group IV director as specified in the accompanying proxy statement

 

2.

To ratify the appointment of PricewaterhouseCoopers LLP as Dell Technologies’ independent registered public accounting firm for the fiscal year ending February 3, 2023

 

3.

To approve, on a non-binding, advisory basis, the compensation of Dell Technologies’ named executive officers as disclosed in the accompanying proxy statement

 

4.

To adopt the Sixth Amended and Restated Certificate of Incorporation of Dell Technologies Inc. in the form attached as Annex B to the accompanying proxy statement

In addition, stockholders will consider and take action upon any other business that may properly come before the annual meeting or any adjournment or postponement thereof.

The holders of record of Dell Technologies’ outstanding common stock as of the close of business on April 28, 2022, which is the record date fixed by the Board of Directors, are entitled to notice of and to vote at the annual meeting or at any adjournment or postponement thereof.

We encourage you to access the annual meeting before the start time of 9:30 a.m., Central Time, on June 27, 2022. Please allow ample time for online check-in, which will begin at 9:15 a.m., Central Time, on June 27, 2022.

A complete list of stockholders entitled to vote at the annual meeting will be available for examination by any stockholder for at least ten days before the meeting during ordinary business hours at our headquarters located at One Dell Way, Round Rock, Texas 78682. In addition, the list will be available to any stockholder during the annual meeting on the meeting website set forth above using the 16 digit control number provided on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials.

Whether or not you plan to attend the annual meeting, your Board of Directors urges you to read the proxy statement and submit proxy or voting instructions for your shares via the internet or by telephone, or complete, date, sign and return your proxy card or voting instruction form in the pre-addressed, postage-paid envelope provided. We encourage you to submit your proxy or voting instructions via the internet, which is convenient, helps reduce the environmental impact of our annual meeting and saves us significant postage and processing costs.

This Notice of Annual Meeting of Stockholders and the proxy statement are accompanied by Dell Technologies’ annual report on Form 10-K for the fiscal year ended January 28, 2022, which is our annual report to stockholders for our 2022 fiscal year.

If you have questions about the annual meeting, require assistance in submitting your proxy or voting your shares or need additional copies of the accompanying proxy statement or the proxy card, please contact Investor Relations at (512) 728-7800 or investor_relations@dell.com.

If a bank, brokerage firm or other nominee holds your shares, you also should contact your nominee for additional information.

By Order of the Board of Directors

 

Richard J. Rothberg

Secretary

May 17, 2022


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YOUR VOTE IS IMPORTANT

Whether or not you plan to attend Dell Technologies’ annual meeting, please submit your proxy or voting instructions as soon as possible. Under New York Stock Exchange rules, if you hold your shares in street name, your bank, brokerage firm or other nominee holding shares on your behalf will NOT be able to vote your shares on Proposal 1 (election of directors), Proposal 3 (advisory vote to approve named executive officer compensation as disclosed in the accompanying proxy statement) or Proposal 4 (adoption of the Sixth Amended and Restated Certificate) unless it receives specific instructions from you. We strongly encourage you to submit your voting instructions.

We encourage you to submit your proxy or voting instructions via the internet, which is convenient and helps reduce the environmental impact of our annual meeting. For instructions on how to submit your proxy or voting instructions and how to vote your shares, please refer to the section entitled “Questions and Answers About the Annual Meeting” beginning on page 63 of the accompanying proxy statement.

 


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Table of Contents

 

Summary Information      1  
Environmental, Social and Governance      5  
Proposal 1 – Election of Directors      7  
Class C Vote for Group IV Director      7  
Director Groups      7  
Director Nominees      7  
Director Qualifications and Information      8  
Stockholder Arrangements      14  
Corporate Governance      15  
Director Compensation      20  
Proposal 2 – Ratification of Appointment of Independent Registered Public Accounting Firm      22  
Proposal 3 – Advisory Vote to Approve Named Executive Officer Compensation      24  
Proposal 4 – Adoption of Sixth Amended and Restated Certificate of Incorporation of Dell Technologies Inc.      25  
Amendment to Add Federal Forum Selection Provision      25  
Amendments to Eliminate Provisions No Longer Effective or Applicable      26  
Equity Compensation Plan Information      28  
Compensation Committee Report      29  
Compensation Discussion and Analysis      30  
Introduction      30  
Named Executive Officers      30  
Highlights of Fiscal 2022 Performance      30  
Other Important Developments in Fiscal 2022      31  
Executive Compensation Philosophy and Core Objectives      31  
Executive Compensation Overview      32  
Individual Compensation Components      33  
Other Compensation Matters      40  
Compensation of Executive Officers      44  
Fiscal 2022 Summary Compensation Table      44  
All Other Compensation Table      45  
Grants of Plan-Based Awards in Fiscal 2022      46  
Outstanding Equity Awards at End of Fiscal 2022      48  
Option Exercises and Stock Vested      50  
Stock Incentive Plan      50  
Other Benefit Plans      51  
Potential Payments Upon Termination of Employment or Change in Control      52  
Pay Ratio Disclosure      53  
Report of the Audit Committee      54  
Security Ownership of Certain Beneficial Owners and Management      55  
Transactions With Related Persons      58  
Policy for Review and Approval of Transactions With Related Persons      58  
Transactions With Michael S. Dell and Other Related Persons      59  
Transactions With VMware      59  
Transactions With Other Principal Stockholders      61  
Relationships and Transactions Under Other Stockholder Agreements and Arrangements      61  
Questions and Answers About the Annual Meeting      63  
Additional Information      71  
Director Nomination Process      71  
Stockholder Proposals for Next Year’s Annual Meeting      72  
Stockholders Sharing the Same Last Name and Address      73  
Availability of Annual Report on Form 10-K      73  
Other Matters      73  
Annex A – Selected Definitions      A-1  
Annex B – Proposed Form of Sixth Amended and Restated Certificate of Incorporation of Dell Technologies Inc.      B-1  
Annex C – Reconciliation of Non-GAAP Financial Measures      C-1  
 


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Summary Information

 

This summary highlights information contained elsewhere in this proxy statement. For more complete information, we encourage you to review the entire proxy statement and Dell Technologies’ annual report on Form 10-K for the fiscal year ended January 28, 2022.

The Notice of Internet Availability of Proxy Materials is first being distributed to stockholders on or about May 17, 2022. On or about May 20, 2022, we will begin mailing a full set of proxy materials to some of our stockholders. All references to “Dell Technologies,” “we,” “us,” “our” and “Company” in this proxy statement refer to Dell Technologies Inc.

Annual Meeting of Stockholders

 

Date:

  Monday, June 27, 2022

Time:

  9:30 a.m., Central Time

Record Date:

  April 28, 2022

Webcast:

  The meeting can be accessed by visiting www.virtualshareholdermeeting.com/DELL2022, where you will be able to listen to the meeting live, submit questions and vote online.

Voting Methods:

 

 
LOGO   LOGO   LOGO   LOGO   LOGO

Submit your proxy or voting instructions

by internet

  Submit your proxy by mobile device   Submit your proxy or voting instructions by telephone  

Submit your proxy or voting instructions

by mail

 

Submit your vote online during

the meeting

Go to www.proxyvote.com and enter the 16 digit control number provided on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials.

 

Scan this QR code

to vote with your

mobile device. You will need the 16 digit control number provided on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials.

 

Call the number on

your proxy card or voting instruction form. You will need the 16 digit control number provided on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials.

 

Complete, sign

and date the proxy card or voting instruction form and mail it in the accompanying

pre-addressed,

postage-paid envelope.

 

See instructions in the section captioned “Webcast” above regarding attendance at the virtual annual meeting to vote online. You will need the 16 digit control number provided on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials.

 

We encourage you to submit your proxy or voting instructions via the internet, which is convenient, helps reduce the environmental impact of our annual meeting and saves us significant postage and processing costs.

 

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Summary Information – continued

 

Meeting Proposals and Voting Recommendations

 

Meeting Proposals

   Board
Recommendation
   Page

 

Election of the seven nominees for Group I director and the nominee for
Group IV director as specified in this proxy statement

  

 

FOR ALL NOMINEES

  

 

7

Ratification of appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending February 3, 2023

  

 

FOR

  

 

22

Non-binding, advisory vote to approve named executive officer compensation
as disclosed in this proxy statement, or Say-on-Pay

  

 

FOR

  

 

24

Vote to adopt the Sixth Amended and Restated Certificate of Incorporation of
Dell Technologies Inc.

  

 

FOR

  

 

25

Except as indicated below with respect to Proposal 1, our outstanding series of Class A common stock, Class B common stock and Class C common stock will vote together as a single class on the meeting proposals and on any other business that properly comes before the stockholders for a vote at the meeting.

 

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Summary Information – continued

 

Election of Director Nominees (Proposal 1)

Of the eight director nominees, seven nominees will be elected as Group I directors by the holders of the shares of all outstanding series of our common stock, voting together as a single class. The remaining director nominee will be elected as the Group IV director by the holders of our outstanding Class C common stock, voting separately as a series.

As discussed below under “Proposal 1—Election of Directors,” the Board of Directors, or Board, is asking holders of our Class A common stock, Class B common stock and Class C common stock to vote “FOR” the election of each of the seven Group I director nominees listed below and holders of our Class C common stock to vote “FOR” the election of the Group IV director nominee listed below. Each nominee will be elected for a term commencing on the date of the nominee’s election and ending on the date on which the nominee’s successor is elected and qualified.

Set forth below is summary information about each director nominee.

 

Nominee and Principle Occupation

   Director
Group
   Age    Director
Since
   Independent    Current Committee
Membership

Michael S. Dell

Chairman and Chief Executive Officer
of Dell Technologies Inc.

   I    57    2013        

  Nominating and Governance (Chair)

David W. Dorman

Founding Partner of Centerview Capital Technology

   I    68    2016      

  Nominating and Governance

Egon Durban

Co-CEO of Silver Lake

   I    48    2013        

  Nominating and Governance

David Grain

Founder and Chief Executive Officer of Grain Management LLC

   I    59    2021        

William D. Green

Former Chairman of Accenture plc

   I
   68
   2016
  
  

  Audit (Chair)

Ellen J. Kullman

President and Chief Executive Officer of Carbon, Inc.

   IV    66    2016      

  Audit

Simon Patterson

Managing Director of Silver Lake

   I    49    2013          

Lynn Vojvodich Radakovich

Former Executive Vice President and Chief Marketing Officer of Salesforce.com, Inc.

   I    54    2019      

  Audit

Ratification of Appointment of Independent Registered Public Accounting Firm (Proposal 2)

The Board of Directors is asking you to vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP, or PwC, as our independent registered public accounting firm for our fiscal year ending February 3, 2023, or Fiscal 2023. All PwC fees incurred in connection with professional services rendered to Dell Technologies during our fiscal year ended January 28, 2022, or Fiscal 2022, and our fiscal year ended January 29, 2021, or Fiscal 2021, are summarized under “Proposal 2 — Ratification of Appointment of Independent Registered Public Accounting Firm.”

 

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Summary Information – continued

 

Say-on-Pay Vote (Proposal 3)

The Board of Directors is asking you to vote, on a non-binding, advisory basis, “FOR” the approval of the compensation of our named executive officers as disclosed in this proxy statement, including the Compensation Discussion and Analysis, the compensation tables and the accompanying narrative disclosures beginning on page 30. The Nominating and Governance Committee and the Board of Directors value the views of the Company’s stockholders and will take the outcome of the advisory vote into account when considering future executive compensation matters.

Adoption of Sixth Amended and Restated Certificate of Incorporation of Dell Technologies Inc. (Proposal 4)

The Board of Directors is asking you to vote “FOR” the adoption of the Sixth Amended and Restated Certification of Incorporation of Dell Technologies Inc. as described under Proposal 4. The Sixth Amended and Restated Certificate of Incorporation of Dell Technologies Inc., which we refer to as the Sixth Amended and Restated Certificate, would (1) amend the existing certificate of incorporation to (a) add a federal forum selection provision and (b) eliminate provisions that ceased to be effective or applicable as of the closing of Dell Technologies’ Class V transaction on December 28, 2018 and make other technical and administrative changes related to and consistent with such amendments, and (2) restate the existing certificate of incorporation to reflect the foregoing amendments. Approval of this proposal will require the affirmative vote of holders of shares representing a majority of the voting power of the outstanding shares of all outstanding series of common stock, voting together as a single class, a majority of the outstanding shares of Class A common stock, voting separately as a series, and a majority of the outstanding shares of Class B common stock, voting separately as a series.

Stockholder Proposals for 2023 Annual Meeting of Stockholders

 

   

Deadline for stockholder proposals to be included in our 2023 proxy statement: January 20, 2023

 

   

Deadline for proposed business and nominations for director that will not be included in our 2023 proxy statement: February 27, 2023 – March 29, 2023

 

   

Deadline for notice under the universal proxy rules of the Securities and Exchange Commission, or SEC, for solicitation of proxies in connection with our 2023 annual meeting in support of director nominees other than the Company’s nominees: April 28, 2023

Important Notice Regarding the Availability of Proxy Materials for the

Annual Meeting of Stockholders To Be Held on Monday, June 27, 2022:

The accompanying notice of Annual Meeting of Stockholders, proxy statement,

form of proxy card and Dell Technologies Annual Report on Form 10-K

for the fiscal year ended January 28, 2022 are available electronically

on our website at http://investors.delltechnologies.com under the

News & Events – Upcoming Events section and at www.proxyvote.com.

 

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Environmental, Social and Governance

 

 

At Dell Technologies, we exist to create technologies that drive human progress, putting our technology, scale and expertise to work where it can do the most good for both people and the planet. We recognize that all of our stakeholders — shareholders, customers, suppliers, employees, and communities — as well as the environment and society, are essential to our business.

We take our opportunity and responsibility to create positive impact seriously, making effective governance and transparency an essential part of our Environmental, Social and Governance, or ESG, strategy. Our Board of Directors oversees the establishment and maintenance of our governance, compliance and risk oversight processes and procedures to promote the conduct of our business with the highest standards of responsibility, ethics and integrity. Our governance framework includes regular updates to the Board of Directors, incorporates ESG goals and metrics into the Company’s overall strategy and involves management committees, including an ESG Steering Committee, tasked with overseeing our ESG strategy and progress. To ensure an integrated perspective and approach to ESG, these management committees are composed of members from various teams across the Company, including representatives from the following functions: sustainability, diversity and inclusion, human resources, giving and social innovation, ethics and privacy, supply chain, corporate affairs, government affairs, audit, legal, risk management, investor relations, accounting, and security. Together, these governance bodies develop, manage and measure our ESG strategy and performance.

As part of Dell Technologies’ overall governance framework, we have established a robust stockholder engagement program which has been enhanced over the past several years. In Fiscal 2022, the Company’s engagement team contacted holders representing more than 43% of our Class C common stock and engaged with holders representing almost 36% of the Class C common stock in addition to several non-holders regarding both the 2020 and 2021 annual meetings. We discussed with our stockholders such matters as recent performance, long-term strategy, corporate governance, Board composition, executive compensation, the COVID-19 response, human capital management, sustainability, and diversity and inclusion.

We are committed to transparency in our effort to drive human progress, and we regularly evaluate the quality and effectiveness of our ESG reporting based on feedback from our stockholders and other stakeholders and conduct a review of other external reporting frameworks. We publish detailed, three-year performance trends on key metrics in various reports, including our annual Progress Made Real, Diversity and Inclusion, and Supply Chain Sustainability reports, available on the Social Impact page of our website. Beginning in Fiscal 2023, these three reports will be consolidated into a single annual ESG Report. This reporting promotes accountability and allows our stakeholders to follow our progress in achieving our goals. We complement this information with online indexes to the Global Reporting Initiative’s (GRI) standards, the World Economic Forum’s (WEF) Stakeholder Capitalism Metrics, and the Sustainability Accounting Standards Board (SASB) standards.

In November 2019, Dell Technologies announced its social impact goals and plan for 2030 called Progress Made Real, or the 2030 Plan. Our goals under the 2030 Plan represent an extension of our purpose as a company — to create technologies that drive human progress. These goals guide social impact strategies as we approach the year 2030. The 2030 Plan has four critical areas of focus:

 

   

Advancing Sustainability – We believe we have a responsibility to protect and enrich our planet together with our customers, suppliers and communities. With the power of our global supply chain, we have the scale and responsibility to pursue the highest standards of sustainability and ethical practices. We work closely with our customers, suppliers and communities to protect and enrich our planet with a focus on climate strategy and circular economy, and we embed sustainability and ethical practices in all we do. We hold ourselves and our partners accountable for our actions while driving improvements wherever possible. We have a responsibility to manage the greenhouse gas emissions associated with our direct and indirect footprint, and technology plays an important role in this undertaking by enabling innovation to improve the repairability and circularity of our products.

 

    

Reducing resource use and addressing growing concerns connected to e-waste are important to our stakeholders and to the future of our business. In Fiscal 2022, Dell Technologies unveiled Concept Luna, a prototype to inspire future sustainable laptop design, exploring ideas to make components readily accessible, replaceable and reusable. Created to test what could be possible, if all the design ideas in Concept Luna were realized, we believe it may be possible to achieve up to an estimated 50% reduction in overall product carbon footprint when compared to a comparable Dell laptop in our current portfolio.

 

   

Cultivating Inclusion – At Dell Technologies, we are a diverse team with unique perspectives and are united in our purpose, vision, strategy, and culture. We view diversity and inclusion as a business imperative that will enable us to build and empower our future workforce. Diversity of leadership increases innovation and ensures that company decisions reflect a wide variety of perspectives. We believe that closing the diversity gap is critical to meeting future talent needs and ensuring that new perspectives reflect our global customer base. We are committed to equal employment opportunity for all and upholding ethics and integrity in all we do and will continue to champion for inclusive policies that support full-spectrum diversity. Our goal is to ensure that employees of different backgrounds feel valued, engaged, and inspired to do their best work.

 

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Table of Contents
                   
                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

    

Dell Technologies has been a leader in flexible work for more than a decade. We prioritize outcomes and connections where team members can drive results and access opportunities. The events of Fiscal 2022 reinforced our belief that remote work helps level the playing field, and the majority of our roles have flexibility with where and when the work can be done. Culture, belonging, and career growth are vital as we envision work in a hybrid environment. We continue to believe work is an outcome, not a time or place. Technology enables collaboration, connection and productivity, while culture and guidance help our people and company thrive.

 

   

Transforming Lives – We believe our scale, support, and the innovative application of our portfolio can play an important role in advancing fundamental human rights and addressing complex societal challenges, including improving health and education for the underserved. We believe there are limitless possibilities when we apply our people, scale, technology and partnerships to solve complex societal challenges. Solar Learning Labs are a force for digital inclusion and have helped over 18,000 students by introducing them to science, technology, engineering, and mathematics (STEM) and the economic opportunities technology can offer. This year Dell transitioned our learning labs to Solar Community Hubs, offering community support beyond education. Depending on community needs, we will work with local partners to offer access to water and electricity, healthcare services and/or biodiversity preservation, as is the case with the Solar Community Hub in the Amazon rainforest, which opened in July 2021.

 

   

Upholding Ethics and Privacy – Ethics and privacy play a critical role in building and maintaining trust with our customers and establishing a strong foundation for positive social impact. We are committed to ensuring that our team members and partners align to our ethical culture. We will continue to invest in our advanced privacy governance and risk-management technology and continue seeking to select, evaluate and do business with third parties who share our level of dedication to ethics and privacy.

 

    

In Fiscal 2021, we launched a new Privacy Dashboard, a self-service center within Dell My Account, so customers can easily access and delete personal data and manage marketing preferences. In Fiscal 2022, we introduced the Dell Technologies Privacy Center, where customers can learn more about our approach to privacy and see our simplified privacy statement. For team members, we expanded privacy resources through the launch of our internal customer Privacy Center of Excellence, which serves as a central location to help our team members embed strong privacy practices in their daily work.

For more information about our commitment to making a positive social impact, our reporting on key indicators from across our business and our 2030 Plan and our progress, please consult our annual report on Form 10-K for Fiscal 2022 as well as the various reports on the Social Impact page of our website.

 

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Proposal 1 – Election of Directors

 

 

Our stockholders are being asked to vote for the election of Michael S. Dell, David W. Dorman, Egon Durban, David Grain, William D. Green, Simon Patterson and Lynn Vojvodich Radakovich to the Board of Directors as Group I directors, and for the election of Ellen J. Kullman to the Board of Directors as the Group IV director. Each director nominee is currently serving as a member of our Board of Directors.

Each of the seven Group I director nominees other than Mr. Grain was elected to the Board of Directors at the 2021 annual meeting of stockholders and is currently serving as a Group I director. The Group IV director nominee was also elected to the Board of Directors at the 2021 annual meeting of stockholders and is currently serving as a Group IV director.

Mr. Grain, who was appointed to the Board of Directors as a Group I director effective on September  30, 2021, was identified as a director candidate by a search firm.

Class C Vote for Group IV Director

Holders of the Class C common stock, voting separately as a series, will elect the Group IV director. We added this voting provision to our certificate of incorporation in connection with the transaction, which we refer to as the Class V transaction, that we completed on December 28, 2018. In the Class V transaction, we paid $14 billion of cash and issued 149,387,617 shares of our Class C common stock, which was newly listed on the New York Stock Exchange, or NYSE, in exchange for all outstanding shares of our Class V common stock. In connection with that transaction, we agreed to implement certain enhancements to our corporate governance that include the right of our Class C stockholders to vote for a director independently from the holders of our other outstanding series of common stock.

On the recommendation of the Nominating and Governance Committee, the Board of Directors has unanimously nominated Ellen J. Kullman for election as the Group IV director because of the perspective she brings to corporate governance from her extensive experience as a senior executive, including as a chief executive officer, and her board and committee service as an independent director of Dell Technologies and other major public companies.

Director Groups

The Board of Directors is currently composed of eight members, seven of whom are Group I directors and one of whom is a Group IV director under the terms of our organizational documents.

Under our certificate of incorporation, the number of Group I directors may be no fewer than three or more than 20 directors and will be determined in accordance with our bylaws. The bylaws provide that the number of directors will be fixed by resolution of the Board and may be no fewer than three directors or more than 21 directors, provided that the number of Group I directors may be no fewer than three directors or more than 20 directors and there shall be one director acting as a Group IV director.

Elections of the members of the Board of Directors are held annually at the annual meeting of stockholders. Each director is elected for a term commencing on the date of such director’s election and ending on the date on which the director’s successor is elected and qualified.

Under the certificate of incorporation, each Group I director is elected annually by the holders of all series of our outstanding common stock, voting together as a single class. The Group IV director is elected annually by the holders of Class  C common stock, voting separately as a series.

Director Nominees

The Board of Directors has nominated seven members currently serving as Group I directors for election as Group I directors at the annual meeting, and one member currently serving as a Group IV director for election as the Group IV director at the annual meeting. Each nominee has consented to be named as a nominee in this proxy statement and to serve as a director if elected. If any nominee is unavailable for election or unable to serve upon election, the Company’s proxy holders will vote the shares of common stock for which they have received validly executed proxies for any substitute nominee designated by the Board of Directors, unless the Board chooses to reduce the number of authorized directors in accordance with, and subject to the terms of, our bylaws and certificate of incorporation, or to leave unfilled the resulting vacancy on the Board.

 

 

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Table of Contents
                   
                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

Biographical and qualification information about each of the nominees is included under “ – Director Qualifications and Information.” The Board’s recommendation of its director nominees is based on the terms of the Dell Technologies certificate of incorporation and the Sponsor Stockholders Agreements described below and on the Board’s carefully considered judgment that the qualifications and experience of the nominees, particularly in areas relevant to Dell Technologies’ strategy and operations, make them suitable candidates to serve on the Board.

 

        
LOGO     

The Board of Directors unanimously recommends a vote “FOR” each of the Board’s nominees for director.

 

        

Director Qualifications and Information

Director Qualifications – The Board of Directors believes that individuals who serve on the Board should have demonstrated notable or significant achievements in business, education or public service; should possess the requisite intelligence, education, experience and judgment to make a significant contribution to the Board and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and should have the highest standards of ethics and integrity, a strong sense of professionalism and intense dedication to serving the interests of Dell Technologies’ stockholders. A primary responsibility of the Nominating and Governance Committee is to assess the skills and experiences of director candidates and to propose for nomination those individuals that the committee believes will exercise effective oversight of Dell Technologies’ strategic initiatives. The following are qualifications, experience and skills for Board members that are important to Dell Technologies’ current and future business:

   

Leadership Experience – Dell Technologies seeks directors who demonstrate extraordinary leadership qualities. Strong leaders bring vision, strategic agility, diverse and global perspectives and broad business insight to the Company. They demonstrate practical management experience, skills for managing change, and deep knowledge of industries, geographies and risk management strategies relevant to the Company. They have experience in identifying and developing Dell Technologies’ current and future leaders. The relevant leadership experience Dell Technologies seeks includes a past or current leadership role in a major public company or recognized privately held entity; a past or current leadership role at a prominent educational institution or senior faculty position in an area of study important or relevant to the Company; a past elected or appointed senior government position; or a past or current senior managerial or advisory position with a highly visible non-profit organization.

 

   

Finance Experience – Dell Technologies believes that all directors should possess an understanding of finance and related corporate reporting processes. Dell Technologies also seeks to ensure the Board includes directors who qualify as an “audit committee financial expert,” as defined in the SEC’s rules, for potential service on the Audit Committee. Two of the members of our Audit Committee have been designated by the Board of Directors as an “audit committee financial expert.”

 

   

Industry Experience – Dell Technologies seeks directors who have relevant industry experience. Dell Technologies values experience in areas in which Dell Technologies places strategic importance, including new or expanding businesses, customer segments or geographies, organic and inorganic growth strategies, and existing and new technologies; deep understanding or a special perspective concerning Dell Technologies’ business environments; and experience with, exposure to, or reputation among a broad subset of Dell Technologies’ customer base.

 

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Table of Contents
                   
                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

   

International Experience – Dell Technologies seeks directors who have experience attained through key leadership or management roles in a global business or responsibility for non-U.S. operations.

 

   

Diversity of Background – Dell Technologies believes that our Board should reflect a diversity of perspectives and backgrounds. While the Board of Directors has not established any formal diversity policy to be used to identify director nominees, when assessing a candidate’s background and experience, the Board of Directors takes into consideration a broad range of factors, including a candidate’s gender, age, race and ethnicity.

Director Matrix – The Board of Directors evaluates, selects and nominates qualified candidates for election or appointment to the Board. The matrix below shows how the director nominees contribute the various skills, experiences and perspectives the Board of Directors considers important.

 

                                                                                                                                                                                                                                                                   
  Chief Executive Officer Experience  
              62.5%      
                 
  Public Company Board Experience  
                  100%  
                 
  Financial Literacy  
                  100%  
                 
  Technology Industry Experience  
                  100%  
                 
  Global Mindset, Emerging Markets, Operational Experience  
                  100%  
                 
  Diverse  
          37.5%          

 

 

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Table of Contents
                   
                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

Set forth below is biographical information, as of May 1, 2022, about the persons whom the Board of Directors has nominated for election at the annual meeting and the qualifications, experience and skills the Board considered in determining that each person should serve as a director:

 

                                                                       
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MICHAEL S. DELL

 

Experience:

Mr. Dell serves as Chairman of the Board and Chief Executive Officer of Dell Technologies. Mr. Dell served as Chief Executive Officer of Dell Inc., a wholly-owned subsidiary of Dell Technologies, from 1984 until July 2004 and resumed that role in January 2007. In 1998, Mr. Dell formed MSD Capital, L.P. for the purpose of managing his and his family’s investments, and, in 1999, he and his wife established the Michael & Susan Dell Foundation to provide philanthropic support to a variety of global causes. He is an honorary member of the Foundation Board of the World Economic Forum and is an executive committee member of the International Business Council. Mr. Dell serves as a member of the Technology CEO Council and is a member of the Business Roundtable. He also serves on the advisory board of Tsinghua University’s School of Economics and Management in Beijing, China, on the governing board of the Indian School of Business in Hyderabad, India, and as a board member of Catalyst, a non-profit organization that promotes inclusive workplaces for women. In June 2014, Mr. Dell was named the United Nations Foundation’s first Global Advocate for Entrepreneurship. Mr. Dell is also Chairman of the Board of Directors of VMware, Inc., a cloud infrastructure and digital workspace technology company that was formerly a public majority-owned subsidiary of Dell Technologies, and Non-Executive Chairman of SecureWorks Corp., a global provider of intelligence-driven information security solutions. SecureWorks Corp. is a public majority-owned subsidiary of Dell Technologies. Mr. Dell was a board member of Pivotal Software, Inc., formerly a public majority-owned subsidiary of Dell Technologies that provides a leading cloud native platform, from September 2016 until it merged with VMware, Inc. in December 2019.

 

Qualifications:

The Board selected Mr. Dell to serve as a director because of his leadership experience as founder of Dell Inc. and Chairman and Chief Executive Officer of Dell Technologies and his technology industry experience.

 

 

Group I Director

 

Age: 57

 

Director since: October 2013

 

Board committees:

 

  Nominating and Governance (Chair)

 

       

 

                                                                       
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DAVID W. DORMAN

 

Experience:

Mr. Dorman has been a Founding Partner of Centerview Capital Technology, or Centerview, a private investment firm, since July 2013. Before his association with Centerview, Mr. Dorman served as a Senior Advisor and Managing Director to Warburg Pincus LLC, a global private equity firm, from October 2006 through April 2008, and in a number of positions with AT&T Corp., or AT&T, a global telecommunications company, from 2000 to 2006. Mr. Dorman joined AT&T as President in December 2000 and was named Chairman and Chief Executive Officer in November 2002, a position he held until November 2005, and served as President and a director of AT&T from November 2005 to January 2006. Before his appointment as President of AT&T, Mr. Dorman served as Chief Executive Officer of Concert Communications Services, a global venture created by AT&T and British Telecommunications plc, from 1999 to 2000, as Chief Executive Officer of PointCast Inc., a web-based media company, from 1997 to 1999 and as Chief Executive Officer and Chairman of Pacific Bell Telephone Company from 1994 to 1997. Mr. Dorman has served as Non-Executive Chairman of the Board of CVS Health Corporation, a pharmacy healthcare provider, since May 2011, as a director of CVS Health Corporation since March 2006, and as Chairman of the Board of Infoworks.io, an enterprise software company, since July 2018. He also serves as a director of PayPal Holdings, Inc., a digital payments system operator. Mr. Dorman was a member of the board of directors of Yum! Brands, Inc., a fast-food restaurant company, from January 2005 to May 2017. Mr. Dorman was a member of the board of directors of Expanse, Inc. (formerly Qadium) from May 2016 to December 2020 following its merger with Palo Alto Networks. He serves on the Georgia Tech Foundation Board of Trustees and is a member of the Georgia Tech Advisory Board.

 

Qualifications:

The Board selected Mr. Dorman to serve as a director because of his expertise in management, finance and strategic planning and because of his public company board and committee experience.

 

 

Group I Director

 

Age: 68

 

Director since: September 2016

 

Board committees:

 

  Nominating and Governance

 

       

 

 

 

 

 

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                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

                                                                       
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EGON DURBAN

 

Experience:

Mr. Durban has been a member of the Board of Directors of Dell Technologies since the closing of Dell Inc.’s going-private transaction in October 2013. Mr. Durban is Co-CEO of Silver Lake, a global technology investment firm. Mr. Durban joined Silver Lake in 1999 as a founding principal and is based in the firm’s Menlo Park office. Mr. Durban serves on the boards of directors of Motorola Solutions, Inc., a global provider of communication infrastructure, devices, accessories, software and services, Qualtrics International Inc., a leader in customer experience management platform software, Twitter, Inc., a social networking service, Unity Software Inc., a company that provides a real-time development platform, Endeavor Group Holdings, Inc., an entertainment, sports and content company, where he is Chairman of the board of directors, and VMware, Inc., a cloud infrastructure and digital workspace technology company that was formerly a public majority-owned subsidiary of Dell Technologies. Previously, Mr. Durban served on the boards of directors of SecureWorks Corp., a public majority-owned subsidiary of Dell Technologies and a global provider of intelligence-driven information security solutions, from 2015 to May 2020 and Pivotal Software, Inc., formerly a public majority-owned subsidiary of Dell Technologies that provides a leading cloud native platform, from September 2016 until it merged with VMware, Inc. in December 2019. Mr. Durban currently serves on the Business Council and the Business Roundtable. Before joining Silver Lake, Mr. Durban worked in the investment banking division of Morgan Stanley, a global diversified financial services firm.

 

Qualifications:

The Board selected Mr. Durban to serve as a director because of his experience in technology and finance, his knowledge of and experience in global strategic leadership, and his management of multiple companies.

 

 

Group I Director

 

Age: 48

 

Director since: October 2013

 

Board committees:

 

  Nominating and Governance

 

       

 

                                                                       
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DAVID GRAIN

 

Experience:

Mr. Grain is the founder and Chief Executive Officer of Grain Management LLC, a private equity firm focused on global investments in the media and communications sectors. Before founding Grain Management LLC in 2007, he served as the President of Global Signal, Inc., an independent wireless communication tower company, from 2002 to 2006. From 2000 to 2003, Mr. Grain served as Senior Vice President of the New England Region of AT&T Broadband, the digital video, internet and digital phone service arm of AT&T Inc., a global telecommunications company. Earlier in his career, Mr. Grain worked for over a decade in the financial services industry, most recently at Morgan Stanley, a global diversified financial services firm, from 1992 to 2000. At Morgan Stanley, he focused on the telecommunications, media and technology sectors. Mr. Grain has served since December 2012 as a director of Southern Company, a gas and utility holding company, where he is currently the lead independent director, and since January 2019 as a director of New Fortress Energy Inc., an integrated liquified natural gas company. Mr. Grain is a trustee of the Brookings Institution, a member of the advisory council of the National Museum of African American History and Culture, and a member of the board of the Martha’s Vineyard Museum.

 

Qualifications:

The Board selected Mr. Grain to serve as a director because of his leadership and operating background, his expertise in finance and risk management knowledge, and his experience as a director with publicly traded companies.

 

 

Group I Director

 

Age: 59

 

Director since: September 2021

 

Board committees:

 

  No Board committees

 

       

 

 

 

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                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

                                                                       
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WILLIAM D. GREEN

 

Experience:

Mr. Green served as a director of EMC Corporation, or EMC, from July 2013 to August 2016, before EMC was acquired by Dell Technologies, and as EMC’s independent Lead Director from February 2015 to August 2016. Mr. Green served as Chairman of the Board of Accenture plc, a global management consulting, technology services and outsourcing company, from August 2006 until his retirement in February 2013, and as Chief Executive Officer of that company from September 2004 through December 2010. He was elected as a partner of Accenture plc in 1986. Mr. Green previously served as Co-Chief Executive Officer and Co-Chairman of GTY Technology Holdings Inc., a public sector software-as-a-service (SaaS) company, from September 2016 until February 2019. Mr. Green serves as a director of GTY Technology Holdings Inc., where he has been Chairman of the board of directors since March 2020. Mr. Green is also a member of the boards of directors of S&P Global Inc., a company that provides financial ratings, benchmarks, analytics and data. Mr. Green was a board member of Inovalon Holdings, Inc., a company that provides data analytics, intervention and reporting platforms to the healthcare industry, from 2016 until it merged with Ocala Bidco in November 2021 and of Pivotal Software, Inc., formerly a public majority-owned subsidiary of Dell Technologies that provides a leading cloud native platform, from August 2015 until it merged with VMware, Inc. in December 2019.

 

Qualifications:

The Board selected Mr. Green to serve as a director because of his leadership and operating experience, his understanding of the information technology industry, and his international business expertise.

 

 

Group I Director

 

Age: 68

 

Director since: September 2016

 

Board committees:

 

  Audit (Chair)

       

 

                                                                       
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ELLEN J. KULLMAN

 

Experience:

Mrs. Kullman has served as President and Chief Executive Officer of Carbon, Inc., a 3D printing company, since November 2019, and as a member of its board of directors since 2016. Mrs. Kullman previously served as Chief Executive Officer of E. I. du Pont de Nemours and Company, or DuPont, a provider of basic materials and innovative products and services for diverse industries, from January 2009 to October 2015 and as Chair of DuPont from December 2009 to October 2015. She served as President of DuPont from October 2008 to December 2008 and as Executive Vice President of DuPont from June 2006 through September 2008. Before her service in those positions, Mrs. Kullman was Group Vice President-DuPont Safety & Protection. She has served as Chair of the US-China Business Council, a member of the US-India CEO Forum and on the executive committee of the Business Council. She is a member of the National Academy of Engineering and co-chaired their Committee on Changing the Conversation: From Research to Action. Mrs. Kullman also serves as a director of Amgen Inc., a developer and manufacturer of human therapeutics, and The Goldman Sachs Group, Inc., a global investment banking, securities and investment management firm. Mrs. Kullman was a director of United Technologies Corporation, a provider of high-technology products and services to the building systems and aerospace industries, from 2011 until April 2020. She is a member of the board of trustees of Northwestern University and serves on the board of advisors of Tufts University School of Engineering.

 

Qualifications:

The Board selected Mrs. Kullman to serve as a director because of her leadership and operating experience, her experience with technology and product development, and her expertise implementing global business strategy.

 

 

Group IV Director

 

Age: 66

 

Director since: September 2016

 

Board committees:

 

  Audit

 

       

 

 

 

 

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                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

                                                                       
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SIMON PATTERSON

 

Experience:

Mr. Patterson has been a member of the Board of Directors of Dell Technologies since the closing of Dell Inc.’s going-private transaction in October 2013. Mr. Patterson is a Managing Director of Silver Lake, a global technology investment firm, which he joined in 2005. Mr. Patterson previously worked at Global Freight Exchange Limited, a logistics software company acquired by Descartes Systems Group, the Financial Times and McKinsey & Company, a global management consulting firm. Mr. Patterson serves on the board of directors of Tesco plc, a multinational grocery and general merchandise retailer. He also serves on the boards of trustees of the Natural History Museum in London and The Royal Foundation of The Duke and Duchess of Cambridge. Previously, he served on the boards of directors of Intelsat S.A., a provider of integrated satellite solutions, and N Brown Group plc, a digital fashion retailer.

 

Qualifications:

The Board selected Mr. Patterson to serve as a director because of his knowledge of and experience in finance, technology and global operations.

 

 

Group I Director

 

Age: 49

 

Director since: October 2013

 

Board committees:

 

  No Board committees

 

       

 

                                                                       
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LYNN VOJVODICH RADAKOVICH

 

Experience:

Ms. Vojvodich Radakovich is an advisor to start-up and growth-stage technology companies. She served as Executive Vice President and Chief Marketing Officer of Salesforce.com, Inc., or Salesforce, the world’s fourth largest enterprise software company and a global leader in customer relationship management, from September 2013 to February 2017. Before serving at Salesforce, she was a partner at the venture capital firm Andreessen Horowitz, where she helped portfolio companies accelerate their go-to-market strategies and Global 1000 companies advance their digital agendas. Ms. Vojvodich Radakovich previously held marketing leadership roles at global enterprise software companies, including Microsoft Corporation, BEA Systems, Inc. (before its acquisition by Oracle Corporation) and Terracotta Inc. (before its acquisition by Software AG). Ms. Vojvodich Radakovich began her career as a mechanical engineer working on the design and construction of Gulfstream jets and offshore oil structures, and later worked with Bain & Company, an international consulting firm. Ms. Vojvodich Radakovich currently serves on the boards of directors of Booking Holdings Inc., a global provider of online travel and related services, Ford Motor Company, and Figma, Inc., a web-based design collaboration platform.

 

Qualifications:

The Board selected Ms. Vojvodich Radakovich to serve as a director because of her leadership and operating experience, her understanding of the software industry, and her international business expertise.

 

 

Group I Director

 

Age: 54

 

Director since: April 2019

 

Board committees:

 

  Audit

 

       

 

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                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

Stockholder Arrangements

Certain stockholders have rights to nominate directors and obligations to vote for director nominees under the stockholders agreements described below entered into in connection with the Class V transaction referred to above.

Stockholder Rights to Nominate Directors – Effective as of December 25, 2018, Dell Technologies and certain of its wholly-owned subsidiaries entered into a stockholders agreement, referred to as the MD Stockholders Agreement, with the MD stockholders (as defined in Annex A to this proxy statement), and into a stockholders agreement, referred to as the SLP Stockholders Agreement, with the SLP stockholders (as defined in Annex A to this proxy statement) and other named stockholders. We refer to the MD Stockholders Agreement and the SLP Stockholders Agreement as the Sponsor Stockholders Agreements.

Under the Sponsor Stockholders Agreements, each of the MD stockholders and the SLP stockholders have the right to nominate a number of individuals for election as directors which is equal to (1) in the case where the MD stockholders and the SLP stockholders beneficially own more than 70% of the total voting power for the regular election of directors, the percentage of (x) the total voting power for the regular election of directors beneficially owned by the MD stockholders or by the SLP stockholders, as the case may be, multiplied by (y) the number of directors then on the Board of Directors (and any vacancy thereon) who are not members of the Audit Committee, or (2) in the case where the MD stockholders and the SLP stockholders beneficially own 70% or less of the total voting power for the regular election of directors, the percentage of (x) the total voting power for the regular election of directors beneficially owned by the MD stockholders or by the SLP stockholders, as the case may be, multiplied by (y) the number of directors then on the Board of Directors (and any vacancy thereon), in each case rounded up to the nearest whole number. Further, so long as the MD stockholders or the SLP stockholders each beneficially own at least 5% of all outstanding shares of the common stock entitled to vote generally in the election of directors, each of the MD stockholders or the SLP stockholders, as applicable, are entitled to nominate at least one individual for election to the Board of Directors as a Group I director. Of the Group I director nominees proposed for election at this annual meeting, Mr. Dell, Mr. Dorman, Mr. Green and Mr. Patterson have been designated for nomination by the MD stockholders and Mr. Durban has been designated for nomination by the SLP stockholders.

The SLP Stockholders Agreement provides that, so long as the MD stockholders beneficially own, in the aggregate, common stock representing a majority of the total voting power of the outstanding common stock, the SLP stockholders will use their reasonable best efforts to expand the size of the Board of Directors to up to 21 directors at the request of the MD stockholders. In addition, under the Sponsor Stockholders Agreements, if any person nominated by the MD stockholders or the SLP stockholders ceases to serve on the Board as a Group I director for any reason (except as a result of a reduction in the applicable stockholders’ right to nominate Group I directors under the relevant Sponsor Stockholders Agreement), the stockholders who nominated such Group I director are entitled to nominate a replacement so long as the stockholders are entitled to nominate at least one Group I director to the Board at such time.

Under the MD Stockholders Agreement, for so long as the MD stockholders are entitled to nominate at least one Group I director, the MD stockholders may have at least one of their nominees then serving on the Board of Directors serve on each committee of the Board (except the Audit Committee), to the extent permitted by applicable law and stock exchange rules and subject to certain exceptions. Under the SLP Stockholders Agreement, the SLP stockholders have the same right as the MD stockholders to representation on Board committees for so long as they are entitled to nominate at least one Group I director.

Stockholder Obligations to Vote for Director Nominees – For so long as either the MD stockholders or the SLP stockholders have the right to nominate a Group I director or Group I directors under the applicable Sponsor Stockholders Agreement, each of Dell Technologies, the MD stockholders and the SLP stockholders are obligated to nominate such Group I director or Group I directors for election as part of the slate of directors that is included in Dell Technologies’ proxy statement and to provide the highest level of support for the election of such nominees as any of the foregoing provides to any other individual standing for election as a director. Each of the MD stockholders and the SLP stockholders also are obligated to vote in favor of each Group I director nominated by the MD stockholders or the SLP stockholders in accordance with the MD Stockholders Agreement or the SLP Stockholders Agreement, as applicable, unless the SLP stockholders elect to terminate such arrangements under the SLP Stockholders Agreement. Further, under the Sponsor Stockholders Agreements, none of the MD stockholders or the SLP stockholders may nominate or support any person who is not nominated by the MD stockholders or the SLP stockholders or the then-incumbent directors of Dell Technologies.

 

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Table of Contents
                   
                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

Corporate Governance

Corporate Governance Principles – The Board of Directors is committed to achieving business success and increasing long-term stockholder value with the highest standards of integrity and ethics. In that regard, the Board of Directors has adopted the Dell Technologies Corporate Governance Principles to provide an effective corporate governance framework for the Company. The Corporate Governance Principles reflect a set of core values that provide the foundation for our governance and management systems and our interactions with others. A copy of those principles can be found on our website at http://investors.delltechnologies.com under the Governance & Leadership – Governance Documents section. In addition, the Board of Directors continues to evaluate Dell Technologies’ corporate governance policies and practices to ensure they are consistent with the Company’s focus on long-term value creation for stockholders. In connection with this effort, in recent years, the Board established a Nominating and Governance Committee, approved the constitution of a majority independent Board, and provided for the Group IV director’s annual election solely by the holders of the Class C common stock.

Controlled Company Status – Dell Technologies’ Class C common stock is listed on the NYSE under the ticker symbol “DELL.” As a result, Dell Technologies is subject to governance requirements under NYSE rules.

Dell Technologies is a “controlled company” under NYSE corporate governance standards. Accordingly, it qualifies for exemptions from, and is entitled to elect not to comply with, certain corporate governance requirements under NYSE rules, including the requirements that Dell Technologies have a board that is composed of a majority of “independent directors,” as defined under NYSE rules, and a compensation committee and a nominating/corporate governance committee that are each composed entirely of independent directors. Even though Dell Technologies is a controlled company, it is required to comply with the rules of the SEC and the NYSE relating to the membership, qualifications and operations of the Audit Committee, as discussed below. Notwithstanding its eligibility for the exemption from these requirements, Dell Technologies currently has a majority of independent directors serving on the Board of Directors. Dell Technologies has elected not to maintain a compensation committee or a nominating/corporate governance committee that is composed entirely of independent directors.

The NYSE rules define a “controlled company” as a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. Dell Technologies is a controlled company on the basis of Mr. Dell’s beneficial ownership of shares of our Class A common stock and Class C common stock representing more than 50% of the voting power of our shares of common stock eligible to vote in the election of our directors. If Dell Technologies ceases to be a controlled company and the Class C common stock continues to be listed on the NYSE, Dell Technologies will be required to comply with NYSE’s director independence requirements relating to the board of directors, a compensation committee and a nominating/corporate governance committee by the date its status changes or within specified transition periods.

We are not required to maintain compliance with the director independence requirements of the NYSE rules applicable to a listed company that is not a controlled company, including the requirement to have a board that is composed of a majority of independent directors. We may choose to change our Board composition in the future to manage this aspect of our corporate governance in accordance with the controlled company exemption.

Director Independence – The Board of Directors has affirmatively determined that Messrs. Dorman, Grain and Green, Mrs. Kullman and Ms. Vojvodich Radakovich, constituting five of our eight directors, are independent under NYSE rules and the standards for independent directors established in our Corporate Governance Principles, which incorporate the director independence requirements of the NYSE rules. NYSE rules provide that, in order to determine that a director is independent, the Board of Directors must determine that the director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). In accordance with NYSE rules, when assessing the materiality of a director’s relationship (if any) with the Company, the Board of Directors considers materiality both from the standpoint of the director and from the standpoint of persons or organizations with which the director has an affiliation.

Board Leadership – The Dell Technologies bylaws provide that the Chairman of the Board will preside at all meetings of the Board of Directors at which he is present. The Chief Executive Officer has management responsibility for the business and affairs of the Company. Both the Chairman and Chief Executive Officer positions are currently held by Mr. Dell.

The Board of Directors has determined that its current structure, with combined Chairman and Chief Executive Officer roles and, as discussed further below, the exercise of key oversight responsibilities by our independent directors, is in the best interests of Dell Technologies and our stockholders. The Board of Directors believes that combining the Chairman and Chief Executive Officer positions is currently the most effective leadership structure for the Company given Mr. Dell’s in-depth knowledge of Dell Technologies’ business and industry, his ability to formulate and implement strategic initiatives, and his extensive contact with and knowledge of customers. As Chief Executive Officer, Mr. Dell is intimately involved in the day-to-day operations of the Company

 

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                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

and is therefore in a position to elevate the most critical business issues for consideration by the Board’s independent directors. Additionally, Mr. Dell is best positioned to oversee the execution of strategy across each of the Company’s businesses to optimize long-term stockholder value creation for Dell Technologies’ stockholders.

Our Corporate Governance Principles contain several features which the Company believes help to ensure that the Board of Directors maintains effective and independent oversight of management, including the following:

 

   

Executive sessions of the independent directors are held at any time requested by a majority of the independent directors and, in any event, are held at least twice during each fiscal year in connection with regularly scheduled Board meetings. The agenda for each executive session focuses principally on whether management is performing its responsibilities in a manner consistent with the Board’s direction.

 

   

At each executive session of the independent directors, those directors elect an independent director as presiding director to chair the next executive session.

 

   

All members of the Audit Committee are independent directors. The chair of the Audit Committee has and exercises authority to conduct executive sessions of the Audit Committee without management and non-independent directors present.

Board Committees – The Board of Directors maintains two standing committees, which consist of the Audit Committee and the Nominating and Governance Committee. These committees assist the Board of Directors in discharging its oversight responsibilities. The Board of Directors has adopted a written charter for each of the standing committees. These charters form an integral part of our Corporate Governance Principles. A current copy of each charter can be found on Dell Technologies’ website at http://investors.delltechnologies.com under the Governance & Leadership – Governance Documents section. From time to time, the Board considers the composition of each of the standing committees and whether committee members should rotate among the standing committees. Most recently, on September 30, 2021, the Board of Directors appointed Ms. Vojvodich Radakovich to the Audit Committee to succeed Mr. Dorman.

Under the Sponsor Stockholders Agreements, as described above under “– Stockholder Arrangements – Stockholder Rights to Nominate Directors,” for so long as the MD stockholders or the SLP stockholders are entitled to nominate at least one Group I director, such stockholders may have at least one of their nominees then serving on the Board of Directors serve on each committee of the Board other than the Audit Committee, to the extent permitted by applicable law and stock exchange rules and subject to specified exceptions. Mr. Dell serves as a member of the Nominating and Governance Committee as the MD stockholders’ nominee, and Mr. Durban serves as a member of that committee as the SLP stockholders’ nominee.

The following table shows, as of April 28, 2022, the members of the Board of Directors and the committees on which each director serves and indicates the directors determined by the Board of Directors to be independent under NYSE rules and our Corporate Governance Principles. Each committee member shown in the table served on the applicable committee for all or part of Fiscal 2022.

 

Name

   Audit Committee    Nominating and
Governance
Committee
   Independent

Michael S. Dell

      Chair   

David W. Dorman

        

Egon Durban

        

David Grain

        

William D. Green

   Chair      

Ellen J. Kullman

        

Simon Patterson

        

Lynn Vojvodich Radakovich

        

As discussed above under “– Controlled Company Status,” Dell has elected under the controlled company exemptions from certain corporate governance requirements under NYSE rules not to constitute the Nominating and Governance Committee solely with members who qualify as independent directors under such rules.

 

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Table of Contents
                   
                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

Descriptions of the primary responsibilities of each committee are set forth below.

Audit Committee

The Audit Committee has three members and is composed entirely of members of the Board of Directors who satisfy the standards of independence established for independent directors under NYSE rules and the additional independence standards applicable to audit committee members established pursuant to Rule 10A-3 under the Securities Exchange Act of 1934, or Exchange Act, as determined by the Board of Directors. Under NYSE rules, the membership of the Audit Committee is required to consist solely of no fewer than three directors who are qualified as independent directors as described above. The Board of Directors has determined that each member of the Audit Committee meets the “financial literacy” requirement for Audit Committee members under NYSE rules and that two members are an “audit committee financial expert” within the meaning of SEC rules. Effective on September 30, 2021, the Board of Directors appointed Ms. Vojvodich Radakovich to the Audit Committee to succeed Mr. Dorman.

The Audit Committee’s primary responsibilities include, among other matters:

 

   

appointing, retaining, compensating and overseeing a qualified firm to serve as the independent registered public accounting firm to audit Dell Technologies’ financial statements;

 

   

assessing the independence and performance of the independent registered public accounting firm;

 

   

reviewing and discussing the scope and results of the audit and Dell Technologies’ interim and year-end operating results with the independent registered public accounting firm and management;

 

   

establishing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

 

   

reviewing Dell Technologies’ policies on risk assessment and risk management;

 

   

reviewing and, if appropriate, approving or ratifying transactions with related persons;

 

   

obtaining and reviewing a report by the independent registered public accounting firm, at least annually, that describes the accounting firm’s internal quality control procedures, any material issues raised by those procedures or other review or inspection, and any steps taken to deal with those issues; and

 

   

pre-approving all audit and all permissible non-audit services, other than de minimis non-audit services in accordance with SEC rules, to be performed by the independent registered public accounting firm.

In conjunction with the mandatory rotation of the audit firm’s lead engagement partner or partner responsible for reviewing the audit, the Audit Committee and its chair are directly involved in the selection of the independent registered public accounting firm’s new lead engagement partner.

Nominating and Governance Committee

The Nominating and Governance Committee’s primary responsibilities include, among other matters:

 

   

identifying and evaluating potential candidates to be considered for appointment or election to the Board of Directors;

 

   

making recommendations to the Board of Directors regarding the selection and approval by the Board of nominees to be submitted for election by a stockholder vote;

 

   

monitoring and reviewing any issues regarding the independence of our non-employee directors or involving potential conflicts of interest affecting any such directors;

 

   

reviewing the Board committee structure and composition and making recommendations annually to the Board of Directors regarding the appointment of directors to serve as members of each committee;

 

   

reviewing our Corporate Governance Principles periodically and recommending any changes to such principles to the Board of Directors; and

 

   

periodically reviewing and approving changes to our Code of Conduct and other policies with respect to legal compliance, conflicts of interest and ethical conduct.

 

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                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

In addition, the Nominating and Governance Committee acts as the compensation committee of the Board, in which capacity it has the following responsibilities, among others:

 

   

approving the compensation policy for our executive officers and non-employee directors, and such other managers as may be directed by the Board;

 

   

approving the forms of compensation to be provided to each executive officer and non-employee director;

 

   

approving recommendations with respect to compensation guidelines for all other employees;

 

   

evaluating the need for, and provisions of, employment contracts or severance arrangements for our executive officers;

 

   

reviewing our incentive compensation arrangements to determine whether they encourage excessive risk-taking, and evaluating compensation policies and practices that could mitigate any such risk;

 

   

acting as administrator of our equity-based and other compensation plans;

 

   

reviewing and discussing with our management the Compensation Discussion and Analysis disclosure required to be included in the proxy statement for the annual meeting of stockholders or annual report on Form 10-K to be filed with the SEC and, based on such review and discussion, determining whether to recommend to the Board that the Compensation Discussion and Analysis disclosure be included in such filing; and

 

   

preparing the Compensation Committee Report required by SEC rules to be included in the proxy statement for the annual meeting of stockholders or annual report on Form 10-K.

The Nominating and Governance Committee has the authority to delegate any of its responsibilities under its charter, along with the authority to take action in relation to such responsibilities, to subcommittees consisting of one or more members of the committee, as the committee may deem appropriate.

In addition, the Nominating and Governance Committee may delegate to one or more of our executive officers the authority to make grants of equity-based compensation to eligible individuals who are not directors or executive officers and to administer our equity-based compensation plans, in each case subject to compliance with applicable law, NYSE rules and the terms of any applicable compensation plan. The Nominating and Governance Committee may revoke any delegation of authority at any time. Any executive officer to whom the Nominating and Governance Committee may delegate authority to make grants of equity-based compensation is required to report regularly to the committee with respect to any grants made. The Nominating and Governance Committee has delegated to our Chief Human Resources Officer the authority to offer awards under the Dell Technologies Inc. 2013 Stock Incentive Plan to eligible employees who are not directors or executive officers.

For a discussion of the process by which the Nominating and Governance Committee evaluated and determined executive officer compensation for Fiscal 2022, including the role of executive officers in determining or recommending the amount or form of executive compensation, see “Compensation Discussion and Analysis.”

Use of Compensation Consultant During Fiscal 2022, our management retained the services of Mercer (US) Inc., or Mercer, an external compensation consultant. Mercer provided advice to management on the design of compensation programs for our directors, executive officers and other employees for Fiscal 2023, including equity-based compensation programs. The total fees paid to Mercer for these services were $0.17 million.

During Fiscal 2022, our management also retained other business units of Mercer and affiliates of Mercer to provide additional services to the Company, including human resources services, services relating to employee benefit plans and insurance services. The total fees paid to Mercer and its affiliates with respect to services provided during Fiscal 2022 (excluding services provided as compensation consultant as discussed above) were $27.3 million.

The Company has determined that the work of Mercer and its affiliates on matters other than executive compensation did not raise any conflict of interest with Mercer’s services as compensation consultant, taking into account, among other factors, Mercer’s policies and procedures relating to the prevention of conflicts of interest and the use of separate teams for compensation consulting services and other services provided by Mercer and its affiliates.

Compensation Committee Interlocks and Insider Participation – The Nominating and Governance Committee, which is composed of Messrs. Dell, Dorman and Durban, functions as the compensation committee. Mr. Dell is our Chief Executive Officer. During Fiscal 2022, none of Dell Technologies’ executive officers served on the board of directors or compensation committee (or other committee serving an equivalent function) of any other entity that has or had one or more executive officers who served as a member of Dell Technologies’ Board of Directors or the Nominating and Governance Committee. For information concerning

 

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                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

transactions among each of Messrs. Dell and Durban and their associated related persons, on the one hand, and Dell Technologies and its subsidiaries, on the other hand, see “Transactions With Related Persons.”

Board Risk Oversight – The Board of Directors oversees and maintains Dell Technologies’ governance and compliance processes and procedures to promote the conduct of Dell Technologies’ business in accordance with applicable laws and regulations and with the highest standards of responsibility, ethics and integrity. As part of its oversight responsibility, the Board is responsible for the oversight of risks facing the Company and provides guidance with respect to the management and mitigation of those risks. An analysis of strategic and operational risks is presented to the Board in reports submitted by the Chief Executive Officer, the Chief Financial Officer and the General Counsel, as well as by other members of Dell Technologies’ senior management who regularly appear before the Board to provide detailed overviews of the businesses they oversee. Directors have complete and open access to all Dell Technologies employees and are free to communicate, and do communicate, directly with management.

The Board of Directors delegates oversight of the following specific areas of risk to its committees:

 

   

The Audit Committee:

 

  ¡   

maintains responsibility for the oversight of risk policies and processes relating to Dell Technologies’ financial statements and financial reporting processes;

 

  ¡   

reviews and discusses significant risks and exposures to Dell Technologies and the steps management has taken or plans to take to minimize or manage these risks with management, the independent registered public accounting firm and the Senior Vice President of Corporate Audit;

 

  ¡   

maintains responsibility for discussing the policies and guidelines that govern compliance risk assessment and management;

 

  ¡   

maintains responsibility for reviewing and assessing, along with management, Dell Technologies’ major information technology risk exposures (including cybersecurity risk exposures) and risk monitoring and mitigation measures; and

 

  ¡   

meets in executive session with each of the Chief Financial Officer, the Chief Accounting Officer, the Senior Vice President of Corporate Audit, the Senior Vice President for Ethics and Compliance and Dell Technologies’ independent registered public accounting firm at each regular meeting of the Audit Committee.

 

   

The Nominating and Governance Committee:

 

  ¡   

monitors the risks associated with succession planning and development as well as compensation plans and arrangements; and

 

  ¡   

evaluates the effect that our compensation arrangements may have on risk decisions.

Each of the committee chairs reports to the full Board of Directors at its regular meetings concerning the activities of the committee, the significant issues it has discussed and the actions taken by the committee.

While the Board of Directors is responsible for risk oversight, management is responsible for risk management. Dell Technologies seeks to maintain an effective internal control environment and has processes to identify and manage risk. An Executive Risk Steering Committee, which is composed of members of management, exercises oversight with respect to the various risk assessment and monitoring and controls processes across the Company. The Committee’s oversight includes an annual risk assessment process that supports the annual internal audit plan. Dell Technologies also maintains and enforces a Code of Conduct, a Code of Ethics for Senior Financial Officers, an Accounting Code of Conduct, an ethics and compliance program, a comprehensive internal audit process and approved quality standards.

Meetings and Attendance – In Fiscal 2022, the full Board of Directors met nine times, the Audit Committee met eight times and the Nominating and Governance Committee met five times.

In Fiscal 2022, each member of the Board of Directors other than Mr. Durban attended at least 75% of the total number of meetings of the Board and each Board committee held during the period in which such member served as a director of Dell Technologies or as a member of such committee. Mr. Durban attended 71% of the total number of meetings of the Board and the Nominating and Governance Committee held during Fiscal 2022.

 

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                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

Dell Technologies does not have a policy on director attendance at annual meetings of stockholders. Five of the seven directors then serving on the Board of Directors attended last year’s annual meeting held on June 22, 2021.

Communications with Directors – Any interested person (whether or not a Dell Technologies stockholder) may send communications to the Board of Directors as a whole, the independent directors as a group, any Board committee, or any individual member of the Board. Any person who wishes to send such a communication may obtain the appropriate contact information at http://investors.delltechnologies.com under the Governance & Leadership – Contact the Board section.

In addition, any person who has a concern about Dell Technologies’ conduct, accounting, financial reporting, internal controls or auditing matters may communicate that concern directly to the independent directors or to the Audit Committee (through the committee chair). These communications may be made on a confidential and anonymous basis, and may be e-mailed, submitted in writing or reported by phone to the Company’s Global Ethics and Compliance office. Any person who wishes to send this type of communication may obtain the appropriate contact information at http://investors.delltechnologies.com under the Governance & Leadership section. All of these concerns will be forwarded to the appropriate directors for their review and will be simultaneously reviewed and addressed by the Global Ethics and Compliance office in the same manner in which such concerns are addressed by the Company’s management.

The status of all outstanding concerns addressed to the independent directors or the Audit Committee will be reported to the full Board of Directors on a quarterly basis. The independent directors or the Audit Committee may undertake special action, including the retention of outside advisors or counsel, with respect to any concern addressed to them. Our Code of Conduct prohibits retaliation against any person who reports suspected misconduct or assists with an investigation or audit in good faith.

Director Compensation

Our Board of Directors has adopted a compensation program for our independent directors that we believe will enable us to attract and retain qualified directors, provide them with compensation at a level that is consistent with our compensation objectives and encourage their ownership of our common stock to further the alignment of their interests with the interests of our stockholders. For Fiscal 2022, our compensation program for independent directors included the following elements:

 

   

an annual cash retainer with a value of $100,000;

 

   

an annual equity retainer with a value of $225,000 payable in the form of restricted stock units that settle in shares of Class C common stock; and

 

   

an additional annual cash retainer with a value of $25,000 for service as chair of the Audit Committee.

Directors may elect to receive all or a portion of each of the annual cash retainer and the cash retainer for service as Audit Committee chair, as applicable, in the form of cash, deferred stock units that settle in shares of Class C common stock or vested shares of Class C common stock, or a combination of the foregoing.

An independent director elected to the Board of Directors, other than through election at an annual meeting of stockholders, will be awarded a prorated portion of each applicable annual retainer for the director’s initial year of service on the Board of Directors.

All of the equity-based awards are granted under the Dell Technologies Inc. 2013 Stock Incentive Plan (as amended and restated as of July 9, 2019), which we refer to as the Stock Incentive Plan. Each equity-based award vests in full on the first anniversary of the last annual meeting of stockholders, except that (1) the initial equity retainer awards formerly granted to directors on their initial election or appointment vest annually in equal installments over four years from the grant date and (2) deferred stock units will settle in shares of Class C common stock on the earlier of the termination of the applicable director’s Board service for any reason or a change in control of Dell Technologies. The vesting of unvested equity-based awards will be accelerated upon the director’s death or disability, the termination of the director’s service without cause or a change in control of Dell Technologies. Certain restricted stock units, deferred stock units and stock options exercisable for Class C common stock, as well as shares of Class C common stock received in the settlement of such awards, are subject to the applicable terms and conditions of a management stockholders agreement discussed elsewhere in this proxy statement.

We reimburse our directors for their reasonable expenses incurred in attending meetings of our Board of Directors or committees.

We also provide our independent directors with liability insurance coverage for their activities as directors.

Our certificate of incorporation and bylaws provide that all of our directors are entitled to indemnification and advancement of expenses from us to the fullest extent permitted by Delaware law. We have entered into indemnification agreements with each of our directors to afford them contractual assurances regarding the scope of their indemnification and to provide procedures for the determination of a director’s right to receive indemnification.

 

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Table of Contents
                   
                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

The following table sets forth the compensation granted or paid to our independent directors for Fiscal 2022.

Fiscal 2022 Director Compensation

 

Name

  

Fees earned
and paid
in cash

($)

  

Cash fees
elected to be
paid in stock(2)

($)

  

Stock
awards(3)

($)

  

Option
awards(4)

($)

  

Total(1)

($)

David W. Dorman

              99,982        224,938               324,920

David Grain

              100,019        224,938               324,957

William D. Green

              124,952        224,938               349,890

Ellen J. Kullman

              99,982        224,991               324,973

Lynn Vojvodich Radakovich

              99,982        224,938               324,920

 

(1)

During Fiscal 2022, in connection with the VMware Spin-off described below, Dell Technologies implemented an equitable adjustment to outstanding equity awards held by participants in its Stock Incentive Plan using a 1.968055 conversion ratio (“VMware Spin-off Adjustment”). Incremental additional restricted stock units and deferred stock units granted during Fiscal 2022 due to the equitable adjustment are summarized as follows for director compensation in Fiscal 2022.

 

     VMware Spin-off Adjustment

Name

  

Number of
restricted stock
units that have not
vested

(#)

  

Number of

deferred stock

units that have
not vested

(#)

   Total

David W. Dorman

       2,093               2,093

David Grain

              3,024        3,024

William D. Green

       2,093               2,093

Ellen J. Kullman

       524        2,267        2,791

Lynn Vojvodich Radakovich

       2,093               2,093

 

(2)

Directors were entitled to receive up to 100% of the annual cash retainer and, if applicable, cash committee chair retainer in the form of vested shares of Class C common stock or deferred stock units that settle in shares of Class C common stock, in increments of 25%, in each case determined by dividing the applicable portion of the aggregate retainer amount by the closing price of the Class C common stock as reported on the NYSE on September 30, 2021. Deferred stock units will vest on June 22, 2022. For service in Fiscal 2022, (a) Mr. Green received 1,201 vested shares of Class C common stock, (b) Ms. Vojvodich Radakovich received 961 vested shares of Class C common stock, (c) Mr. Grain received 1,892 deferred stock units and (d) each of Mr. Dorman and Mrs. Kullman received 241 vested shares of Class C common stock and 1,417 deferred stock units. In December 2021, to correct an administrative error in the implementation of Mr. Dorman’s election, Mr. Dorman’s 1,417 deferred stock units were canceled and an equal number of vested Class C common stock shares were issued.

 

(3)

Stock awards were made in the form of restricted stock units that settle in shares of Class C common stock, subject to each director’s right to elect to receive a specified portion in deferred stock units that settle in shares of Class C common stock. Restricted stock units and deferred stock units will vest on June 22, 2022. For service in Fiscal 2022, (a) each of Messrs. Dorman and Green and Ms. Vojvodich Radakovich received 4,255 restricted stock units, (b) Mrs. Kullman received 1,065 restricted stock units and 3,191 deferred stock units and (c) Mr. Grain received 4,255 deferred stock units. The aggregate grant date fair value, computed in accordance with U.S. generally accepted accounting principles, of the (i) restricted stock units awarded to each of Messrs. Dorman and Green and Ms. Vojvodich Radakovich was $224,938 and Mrs. Kullman was $56,301 and (ii) deferred stock units awarded to each of Mr. Grain and Mrs. Kullman was $224,938 and $168,690, respectively, in each case determined by dividing the aggregate retainer amount, or applicable portion of the aggregate retainer amount, by the closing price of the Class C common stock as reported on the NYSE on September 30, 2021. As of January 28, 2022, following the VMware Spin-off Adjustment, (A) each of Messrs. Dorman and Green and Ms. Vojvodich Radakovich had an aggregate of 4,255 outstanding restricted stock units and Mrs. Kullman had an aggregate of 1,065 outstanding restricted stock units and (B) Mr. Dorman had an aggregate of 16,252 outstanding deferred stock units, Mr. Grain had an aggregate of 6,147 outstanding deferred stock units and Mrs. Kullman had an aggregate of 43,207 outstanding deferred stock units.

 

(4)

As of January 28, 2022, and following the VMware Spin-off Adjustment, each of Mr. Green and Mrs. Kullman held an aggregate of 272,736 outstanding options and Ms. Vojvodich Radakovich held an aggregate of 84,198 outstanding options. Prior to the VMware Spin-Off, Mr. Dorman exercised all outstanding stock options in the amount of 138,584 options and paid option costs of $4.2 million.

 

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Proposal 2 – Ratification of Appointment of Independent Registered Public Accounting Firm

 

 

The Board of Directors is asking the stockholders to ratify the Audit Committee’s appointment of PricewaterhouseCoopers LLP, or PwC, as Dell Technologies’ independent registered public accounting firm for Fiscal 2023.

PwC is a registered independent public accounting firm and has served as the independent auditors of the Company or its predecessor since 1986. Although current law, rules and regulations, as well as the Audit Committee’s charter, require Dell Technologies’ independent registered public accounting firm to be engaged, retained and supervised by the Audit Committee, the Board of Directors considers the selection of an independent registered public accounting firm to be an important matter of stockholder concern and considers a proposal for stockholders to ratify this selection to be an opportunity for stockholders to provide direct feedback to Dell Technologies on an important issue of corporate governance. If the stockholders do not ratify the selection of PwC, the Audit Committee will take the vote into consideration in determining whether to retain PwC and whether to engage the firm in future years, but may continue to retain PwC. If the appointment is ratified by stockholders, the Audit Committee in its discretion nevertheless may change the appointment at any time during the current fiscal year if it determines that a change would be in the best interests of the Company and its stockholders.

Representatives of PwC are expected to be present at the annual meeting and available to respond to appropriate questions, and will have an opportunity to make a statement if they desire to do so.

 

        
LOGO     

The Board of Directors unanimously recommends a vote “FOR” the ratification of PwC as Dell Technologies’ independent registered public accounting firm for Fiscal 2023.

 

        

In addition to retaining PwC to conduct an independent audit of the consolidated financial statements, Dell Technologies engages PwC from time to time to perform other permissible services. The following table sets forth all fees incurred in connection with professional services rendered to Dell Technologies by PwC during Fiscal 2022 and Fiscal 2021.

Independent Registered Public Accounting Firm Fees (in millions)

 

Fee Type

   Fiscal 2022    Fiscal 2021

Audit Fees(a)

     $ 27.1      $ 26.0

Audit-Related Fees(b)

       7.2        1.5

Tax Fees(c)

       0.5        0.8

All Other Fees(d)

       1.1        0.4

Total

     $ 35.9      $ 28.7

 

(a)

This category includes fees incurred for professional services rendered in connection with the audit of the annual financial statements, for the review of the quarterly financial statements, for comfort letters and consents, for the statutory audits of international subsidiaries, and for other procedures.

 

(b)

This category includes fees incurred for professional services rendered in connection with assurance and other activities reasonably related to the audit or review of Dell Technologies’ financial statements, including the audits of Dell Technologies’ employee benefit plans, contract compliance reviews, spin-off related audit work and procedures, carve-out audit work, and accounting research.

 

(c)

This category includes fees incurred for domestic and international income tax compliance and tax audit assistance, and for corporate-wide tax planning services.

 

(d)

This category consists of fees for all products and services other than the services reported in notes (a) through (c) above, and includes fees incurred for general and financial training services, assessments relating to service organization controls, assessment of contract compliance by third-party vendors, and other permissible advisory services.

 

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Table of Contents
                   
                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

The Audit Committee has determined that the provision of the non-audit services described in notes (c) and (d) to the table above was compatible with maintaining PwC’s independence.

The Audit Committee pre-approved PwC’s performance of the foregoing services that were required to be pre-approved under SEC rules. The Audit Committee has adopted a policy requiring pre-approval by the committee of all services (audit and non-audit) to be provided by Dell Technologies’ independent registered public accounting firm other than in accordance with a limited exception provided under SEC rules. In accordance with that policy, the Audit Committee has given its pre-approval for the provision of audit services by PwC for Fiscal 2023, including PwC’s audit fees, and has also given its pre-approval for up to one year in advance for the provision by PwC of particular categories or types of audit-related, tax and other permitted non-audit services. In circumstances in which the services proposed to be provided by PwC are not covered by one of those pre-approvals, the Audit Committee may delegate authority to the chair or other designated members of the Audit Committee to pre-approve those services. Any pre-approvals granted under this delegated authority must be communicated to the full Audit Committee.

 

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Proposal 3 – Advisory Vote to Approve Named Executive Officer Compensation

 

 

In this Proposal 3, in accordance with Section 14A of the Exchange Act and the SEC’s rules thereunder, the Board of Directors is asking stockholders to approve, on a non-binding, advisory basis, the compensation of Dell Technologies’ named executive officers as disclosed in this proxy statement, including the Compensation Discussion and Analysis, the compensation tables and the accompanying narrative disclosures beginning on page 30.

 

        
LOGO     

The Board of Directors unanimously recommends a vote “FOR” approval of Dell Technologies’ compensation of its named executive officers as disclosed in this proxy statement.

 

        

As described below in the sections of this proxy statement under “Compensation Discussion and Analysis” and “Compensation of Executive Officers,” the Nominating and Governance Committee, which acted as the Board’s compensation committee for purposes of executive compensation determinations for Fiscal 2022, has structured Dell Technologies’ executive compensation program to emphasize long-term, performance-dependent pay to motivate and reward long-term value creation for Dell Technologies’ stockholders. Dell Technologies’ executive compensation program has a number of features designed to ensure adherence to the Company’s pay-for-performance philosophy.

The Board of Directors encourages stockholders to read the Compensation Discussion and Analysis below, which describes in detail how Dell Technologies’ executive compensation practices operate and are designed to achieve Dell Technologies’ core executive compensation objectives. The Board also encourages stockholders to review the Fiscal 2022 Summary Compensation Table and other compensation tables and the narrative disclosures accompanying the tables appearing under “Compensation of Executive Officers,” which provide detailed information about the compensation of our named executive officers. The Nominating and Governance Committee and the Board of Directors believe that the compensation practices described in the Compensation Discussion and Analysis are effective in achieving Dell Technologies’ core executive compensation objectives and that the compensation of its named executive officers as disclosed in this proxy statement reflects and supports the appropriateness of Dell Technologies’ executive compensation philosophy and practices.

In accordance with Section 14A of the Exchange Act and the SEC’s rules thereunder, Dell Technologies is asking stockholders to approve this proposal by approving the following non-binding resolution:

RESOLVED, that the compensation paid to Dell Technologies’ named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative disclosures, is hereby APPROVED.

A vote on this resolution, commonly referred to as a Say-on-Pay resolution, is not binding on the Nominating and Governance Committee or the Board of Directors. Although the vote is advisory in nature and non-binding, the Nominating and Governance Committee and the Board of Directors value the views of the Company’s stockholders and will take the outcome of the advisory vote into account when considering future executive compensation matters.

 

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Table of Contents

 

Proposal 4 – Adoption of Sixth Amended and Restated Certificate of Incorporation of Dell Technologies Inc.

 

 

 

In this Proposal 4, the Board of Directors is asking stockholders to adopt the Sixth Amended and Restated Certificate of Incorporation of Dell Technologies Inc. in the form attached as Annex B to this proxy statement, which we refer to as the Sixth Amended and Restated Certificate. The Sixth Amended and Restated Certificate would amend the existing Fifth Amended and Restated Certificate of Incorporation of Dell Technologies Inc., which we refer to as the existing Company certificate, to

 

   

add a federal forum provision for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, or the Securities Act, and

 

   

eliminate provisions that ceased to be effective or applicable as of the closing of the Company’s Class V transaction on December 28, 2018 and make other technical and administrative changes related to and consistent with such amendments,

and restate the existing Company certificate to reflect the foregoing amendments.

The Board of Directors approved the Sixth Amended and Restated Certificate and recommended its adoption by stockholders on April 27, 2022. If adopted by the stockholders, the Sixth Amended and Restated Certificate would become effective upon filing of this document with the Secretary of State of the State of Delaware. Dell Technologies intends to make the filing promptly after the annual meeting.

 

        
LOGO     

The Board of Directors unanimously recommends a vote “FOR” adoption of the Sixth Amended and Restated Certificate of Incorporation of Dell Technologies Inc.

 

        

The form of the Sixth Amended and Restated Certificate is attached as Annex B to this proxy statement and shows all proposed amendments and related textual changes to the provisions of the existing Company certificate. Text that is proposed to be added to the existing Company certificate is underlined and text that is proposed to be deleted from the existing Company certificate is struck through. The following summary description of the Sixth Amended and Restated Certificate is qualified by reference to the full text of the Sixth Amended and Restated Certificate, which we encourage you to review carefully.

Amendment to Add Federal Forum Selection Provision

We are seeking stockholder approval to amend Article XIII of the existing Company certificate to provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. We refer to this provision as the federal forum selection provision and to the proposed amendment as the federal forum selection amendment.

Summary of Amendment

If the federal forum selection amendment is approved by stockholders and becomes effective, the federal forum selection provision would be in addition to terms of our existing forum selection provision in Article XIII. The existing provision states that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or stockholders to us or our stockholders, (c) any action asserting a claim against us or any of our directors, officers or stockholders arising pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation or bylaws, or (d) any action asserting a claim against us or any of our directors, officers or stockholders governed by the internal affairs doctrine shall be a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware). Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules or regulations thereunder. Accordingly, the existing forum selection provision in Article XIII does not apply to actions arising under the Exchange Act or such rules and regulations.

 

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Table of Contents
                   
                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

Set forth below is the text of our existing forum selection provision as it is proposed to be amended by the addition of the federal forum selection provision. Text that is proposed to be added to existing Article XIII is underlined.

ARTICLE XIII

Unless the Corporation consents in writing to the selection of an alternative forum, (i) the sole and exclusive forum for (A) any derivative action or proceeding brought on behalf of the Corporation, (B) any action asserting a claim of breach of a fiduciary duty owed by any director or officer or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, (C) any action asserting a claim against the Corporation or any director or officer or stockholder of the Corporation arising pursuant to any provision of the DGCL or this Certificate of Incorporation or the Bylaws, or (D) any action asserting a claim against the Corporation or any director or officer or stockholder of the Corporation governed by the internal affairs doctrine, shall be a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware), and (ii) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Any Person purchasing or otherwise acquiring any interest in any security of the Corporation shall be deemed to have notice of and consented to this Article XIII.

Purpose and Effects of Amendment

The Board of Directors believes that Dell Technologies and its stockholders would benefit from having any causes of action arising under the Securities Act resolved in the federal district courts of the United States. In determining to approve the federal forum selection amendment and recommend its adoption by stockholders, the Board of Directors considered that the federal forum selection provision could promote efficiencies in the Company’s management of Securities Act litigation by:

 

   

limiting forum-shopping in state court by plaintiffs;

 

   

enabling the Company to avoid litigating actions involving the same matter in state and federal courts, with the associated duplication of litigation expenses and the possibility of inconsistent outcomes, and to obtain consolidation of multi-jurisdictional litigation; and

 

   

facilitating submission of Securities Act claims for resolution by federal courts, which have experience and expertise in adjudicating such claims.

The Board also considered the increasing trend towards adoption of forum selection provisions in response to multi-forum litigation and that the Company would retain the ability to consent to an alternative forum if it wished to do so.

If the federal forum selection amendment becomes effective, it may have a number of potential effects in addition to the effects discussed above. The federal forum selection provision could discourage claims under the Securities Act or limit stockholders’ ability to bring such claims in a judicial forum that they consider advantageous. Further, the provision could require stockholders to incur litigation costs in bringing any action to contest the provision’s enforceability, as well as to incur additional litigation costs in pursuing claims in federal court in accordance with the terms of the provision.

Amendments to Eliminate Provisions No Longer Effective or Applicable

Upon the closing of the Class V transaction on December 28, 2018, we paid $14 billion of cash and issued 149,387,617 shares of our Class C common stock in exchange for all outstanding shares of our Class V common stock. The existing Company certificate was filed with the Secretary of State of the State of Delaware and became effective immediately before the closing. The Board of Directors recommends amendment of the existing Company certificate to eliminate provisions that ceased to be effective or applicable as of the closing of the Class V transaction and to make other technical and administrative changes related to and consistent with such amendments.

Purpose, Summary and Effects of Amendments

The amendments proposed to be made by the Sixth Amended and Restated Certificate are summarized below and would have the effects on the existing Company certificate described below.

 

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Table of Contents
                   
                   Summary Information   Environmental, Social and Governance   Proposal 1   Proposal 2   Proposal 3   Proposal 4   Equity Compensation Plan Information  

Compensation Committee

Report

  Compensation Discussion and Analysis                   
                   

 

Elimination of Authorized Class V Common Stock

The authorized capital stock provisions of the existing Company certificate would be amended to eliminate the Class V common stock as the fifth authorized series of Dell Technologies common stock. No shares of Class V common stock were outstanding immediately after the closing of the Class V transaction or have been outstanding at any time since such closing. Although it authorizes 343,025,308 shares of Class V common stock, the existing Company certificate prohibits Dell Technologies from issuing any shares of Class V common stock.

Consistent with the elimination of authorized Class V common stock, the existing Company certificate also would be amended to eliminate all provisions that specify the voting powers, preferences, designations, rights, qualifications, limitations or restrictions of the Class V common stock. The elimination of such provisions would include removal of all references to “DHI Common Stock,” “DHI Group” and “Class V Group” and related concepts and terms that ceased to have effect upon the retirement of all outstanding Class V common stock and the effectiveness of the prohibition on any future issuance of Class V common stock.

Related Amendment to Authorized Capital Stock

In connection with the elimination of authorized Class V common stock, the existing Company certificate also would be amended to decrease the total number of shares of capital stock which Dell Technologies would be authorized to issue by 343,025,308 shares from a total of 9,144,025,308 shares under the existing Company certificate to a total of 8,801,000,000 shares under the Sixth Amended and Restated Certificate. The decrease from the number of authorized shares of common stock under the existing Company certificate would reflect solely the elimination of the 343,025,308 formerly authorized shares of Class V common stock. Of the total authorized shares under the Sixth Amended and Restated Certificate, 1,000,000 shares would consist of authorized shares of preferred stock (as under the existing Company certificate) and 8,800,000,000 shares would consist of authorized shares of common stock.

Under the Sixth Amended and Restated Certificate, Dell Technologies would continue to have the four other existing authorized series of common stock, consisting of the Class A common stock, the Class B common stock, the Class C common stock and the Class D common stock. The proposed amendments to the existing Company certificate would not change the number of authorized shares of any of the four such series of common stock, as noted above, or any of the voting powers, preferences, designations, rights, qualifications, limitations or restrictions of any such series that are currently effective or applicable.

Other Technical and Administrative Changes

The existing Company certificate would be further amended to remove obsolete provisions relating to Board structure, including the classification of Group II Directors and Group III directors, and director voting rights that ceased be operative upon the closing of the Class V transaction. That closing constituted an “IPO” and “Designation Rights Trigger Event” in the existing Company certificate and resulted in the replacement of the prior Board structure and director voting rights with the Board governance arrangements that are now in effect and have been in place since December 28, 2018 or thereafter as specified in the existing Company certificate. The Sixth Amended and Restated Certificate also would make other technical and administrative amendments to the existing Company certificate related to and consistent with the foregoing amendments.

All of the foregoing amendments, including amendments to remove obsolete language and make other technical and administrative changes referred to above, are shown in the marked copy of the existing Company certificate attached as Annex B to this proxy statement.

Effective as of the time of effectiveness of the Sixth Amended and Restated Certificate, the Board of Directors will approve amendments to provisions of the Company’s bylaws that will be consistent with the amendments discussed in this proposal.

The Board of Directors has reserved the right to abandon the Sixth Amended and Restated Certificate before or after stockholder adoption thereof, without further action by the stockholders, at any time before the filing of the Sixth Amended and Restated Certificate with the Secretary of State of the State of Delaware.

 

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Table of Contents

 

Equity Compensation Plan Information

 

 

The following table sets forth certain information about our equity compensation plans as of the end of Fiscal 2022.

 

Plan Category

   Number of
securities to
be issued upon
exercise
of outstanding
options,
warrants and
rights(2)
   Weighted-average
exercise price of
outstanding options,
warrants and
rights(3)
   Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
first column) (4)

Equity compensation plans approved by security holders (1)

       62,151,290      $ 9.62        45,674,713

Equity compensation plans not approved by security holders (1)

       751      $ 0.37        (5)

Total: (1)

       62,152,041      $ 9.62        45,674,713

 

(1)

On November 1, 2021, Dell Technologies Inc. completed a special distribution of all of the shares of common stock of its former subsidiary, VMware, Inc., that it beneficially owned to its stockholders on a pro rata basis. In connection with the transaction, Dell Technologies implemented an equitable adjustment to outstanding equity awards held by participants in its Stock Incentive Plan using a 1.968055 conversion ratio (“VMware Spin-off Adjustment”). The amounts shown represent the number of shares following this equitable adjustment both for the table above and in the footnotes.

 

(2)

The number of securities to be issued upon exercise of outstanding options, warrants and rights set forth in this column represents, as of the end of Fiscal 2022, (a) with respect to equity compensation plans approved by security holders, the aggregate number of shares of Class C common stock that were issuable upon the exercise or settlement of outstanding time-based and performance-based options and time-based and performance-based restricted stock units, or RSUs, granted under the Stock Incentive Plan, and (b) with respect to equity compensation plans not approved by security holders, the number of shares of Class C common stock that were issuable upon the exercise of outstanding time-based options granted under the Dell Inc. Amended and Restated 2002 Long-Term Incentive Plan. The number of securities to be issued under equity compensation plans approved by security holders reported in this column consists of the aggregate number of securities that may be issued in connection with 823,325 time-based options to purchase Class C common stock, 2,001,367 performance-based options to purchase Class C common stock, 48,050,872 time-based RSUs that may be settled in Class C common stock, 11,210,120 performance-based RSUs that may be settled in Class C common stock and 65,606 time-based deferred stock units that may be settled in Class C common stock. The number of securities to be issued under equity compensation plans not approved by security holders reported in this column consists of the aggregate number of securities that may be issued in connection with 751 time-based options to purchase Class C common stock.

 

(3)

Weighted-average exercise prices do not reflect shares issuable in connection with the settlement of RSUs or deferred stock units, as RSUs and deferred stock units have no exercise price.

 

(4)

The number of securities remaining available for future issuance reported in this column with respect to equity compensation plans approved by security holders represents the aggregate number of shares of Class C common stock that were available for issuance in connection with grants of options, time-based and performance-based restricted stock, service-based and performance-based RSUs and deferred stock units, and other types of equity awards authorized under the Stock Incentive Plan. The maximum number of shares of Class C common stock issuable under the Stock Incentive Plan (subject to adjustment under the plan) is 165,465,515, which may be issued in the form of any such awards.

 

(5)

As of the end of Fiscal 2022, no shares remained available for future awards under the Dell Inc. Amended and Restated 2002 Long-Term Incentive Plan.

 

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Table of Contents

 

Compensation Committee Report

 

 

The Nominating and Governance Committee of the Board of Directors of Dell Technologies Inc., acting as the compensation committee of the Board of Directors for the fiscal year ended January 28, 2022, has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K. Based on such review and discussion, the Nominating and Governance Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into Dell Technologies Inc.’s annual report on Form 10-K for the fiscal year ended January 28, 2022.

NOMINATING AND GOVERNANCE COMMITTEE

Michael S. Dell, Chair

David W. Dorman

Egon Durban

 

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Table of Contents

 

Compensation Discussion and Analysis

 

 

CD&A Table of Contents

 

Introduction

This Compensation Discussion and Analysis is intended to provide our stockholders with an understanding of Dell Technologies’ compensation philosophy, its core principles, and the compensation in effect for Fiscal 2022 for our named executive officers, which we also refer to as NEOs.

Dell Technologies’ compensation programs are designed to attract, reward and retain high-quality talent and to provide appropriate incentives for achieving Dell Technologies’ financial goals and strategic objectives. Dell Technologies’ compensation programs are focused on both Company and individual performance to create a culture of meritocracy that rewards our named executive officers and other executive officers for their work in achieving performance objectives and aligns their interests with the interests of our stockholders. We emphasize performance-based variable pay programs to drive Company and individual performance and promote this alignment, and we incorporate time-based incentives to achieve targeted goals, such as attracting and retaining key talent.

Named Executive Officers

The named executive officers for Fiscal 2022 were:

 

LOGO          LOGO          LOGO          LOGO          LOGO

Michael S. Dell

Chairman and Chief Executive Officer

   

Thomas W. Sweet

Chief Financial Officer

   

Jeffrey W. Clarke

Co-Chief Operating Officer and Vice Chairman

   

Anthony Charles Whitten

Co-Chief
Operating Officer

   

William F. Scannell

President, Global Sales and Customer Operations

Highlights of Fiscal 2022 Performance

During Fiscal 2022, Dell Technologies played a central role in helping our customers keep our society, our economy, and our lives moving forward. We delivered strong financial results in Fiscal 2022 despite the challenging environment by leveraging the depth and breadth of our portfolio and executing with discipline, speed and precision.

 

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Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Our full-year financial results for Fiscal 2022 included the following highlights:(1)

 

                   

Operating Income

   

Non-GAAP Operating Income

   

Net Income

$4.7B

   

$7.8B

   

$4.9B

     

up 26% over the prior year

   

up 12% over the prior year

   

up 120% from the prior year

             
       
                   

Non-GAAP Net Income

   

Cash Flow from Operations

   

Repayment of Net Debt

$4.9B

   

$10.3B

   

$16.5B

     

up 31% over the prior year

   

down 10% over the prior year

   

achievement of an investment
grade credit rating from three
major credit rating agencies

             

 

(1)

The results of VMware, Inc., excluding Dell Technologies’ resale of VMware, Inc. offerings, are presented as discontinued operations in the Consolidated Statements of Income and, as such, have been excluded from results shown above. The Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations and include VMware, Inc. cash flows through the date of the VMware Spin-off described below.

This discussion and analysis refers to non-GAAP net revenue, non-GAAP operating income and non-GAAP net income, which are financial measures not calculated in accordance with GAAP. A reconciliation of such non-GAAP financial measures to the most comparable GAAP financial measures is set forth in Annex C to this proxy statement.

Other Important Developments in Fiscal 2022

 

   

On November 1, 2021, the Company completed a spin-off of VMware, Inc. by means of a special stock dividend of VMware, Inc. Class A common stock to Dell Technologies stockholders, which we refer to as the VMware Spin-off. The VMware Spin-off constituted a corporate restructuring event under the terms of the Dell Technologies Inc. 2013 Stock Incentive Plan (“Stock Incentive Plan”), and consistent with the terms of the Stock Incentive Plan, the authorized share pool under the Stock Incentive Plan and stock awards that were outstanding at the time of the VMware Spin-off were adjusted using a conversion ratio based on the trading price of Dell Technologies common stock before and after the VMware Spin-off.

 

   

In August 2021, Dell Technologies welcomed Mr. Anthony Charles Whitten as the Company’s new Co-Chief Operating Officer, and Mr. Whitten was appointed by the Board of Directors as an executive officer. In connection with Mr. Whitten’s appointment, the Board also approved his compensation package, which is described below.

 

   

Dell Technologies continues to monitor the COVID-19 pandemic and its impact on our employees, customers, business partners, and communities. We are deploying return-to-site processes in certain regions based on ongoing assessments of local conditions by our management team. We will continue to monitor regional conditions and utilize remote work practices to ensure the health and safety of our employees, customers, and business partners.

Executive Compensation Philosophy and Core Objectives

The Nominating and Governance Committee (“Committee”) acts as the compensation committee of the Board and is composed of Mr. Dell, as Chair of the Committee, Egon Durban and David Dorman.

Our core compensation objectives that reinforce our strong pay-for-performance philosophy include:

 

   

aligning the interests of our named executive officers and other executive officers with those of Dell Technologies’ stockholders by emphasizing long-term, performance-dependent compensation;

 

   

creating a culture of meritocracy by linking pay to individual and Company performance;

 

   

providing appropriate cash or equity incentives for achieving Dell Technologies’ financial goals and strategic objectives; and

 

   

providing compensation opportunities that are competitive with companies with which Dell Technologies competes for executive talent.

 

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Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Executive Compensation Overview

Elements of Total Compensation Package – The primary components of Dell Technologies’ compensation program for named executive officers consist of base salary, annual incentive bonuses, equity incentives that are time-based and performance-based, and limited benefits and perquisites. Dell Technologies does not target a fixed mix of pay for executive officers, but instead evaluates each executive officer individually, and may consider such factors, among others, as individual level of responsibility, market practices and internal equity considerations.

 

LOGO

The pay breakdown reflected here does not include the CEO or NEOs onboarded in Fiscal 2022. Mr. Dell does not receive equity incentives, and 98% of Mr. Whitten’s pay is at-risk, time-based and performance-based pay.

Compensation Consultants – The Committee did not engage any compensation consultant to advise on executive officer compensation matters for Fiscal 2022. The Committee has relied on the general knowledge and experience of its members, as well as peer group data, analysis and recommendations presented by management and developed in consultation with Mercer, the external compensation consultant engaged by management. For information about management’s use of a compensation consultant, see “Proposal 1 – Election of Directors – Corporate Governance – Use of Compensation Consultant.”

Process for Evaluating and Determining Executive Officer Compensation – Dell Technologies conducts a thorough evaluation of the performance of each named executive officer and each other executive officer annually based on a number of subjective and objective factors and then makes a recommendation to the Committee regarding such officer’s compensation for the current year. After input from management, including the Chief Executive Officer and/or the Co-Chief Operating Officers, and the human resources department, the Committee determines the individual cash compensation elements and associated amounts for each executive officer other than Mr. Dell. When making individual compensation decisions for an executive officer, the Committee considers a variety of factors, including:

 

   

the annual performance of Dell Technologies and the executive officer’s business unit, if applicable;

 

   

the executive officer’s performance, experience and ability to contribute to Dell Technologies’ long-term strategic goals, including modernizing our core offerings, pursuing key growth opportunities, and making contributions towards our social impact goals;

 

   

the executive officer’s historical compensation;

 

   

internal pay equity; and

 

   

retention considerations.

Mr. Dell’s compensation is subject to review and approval by the Board of Directors, rather than the Committee. Equity compensation for each named executive officer is subject to review and approval by the Board of Directors.

Compensation Risk Oversight – The Committee has undertaken a review of the Company’s material compensation processes, policies and programs for all employees across the following categories: compensation mix; short-term and long-term incentive plan design; performance measures; performance slope; clawback and recoupment policies; ownership requirements and severance or change in control policies under the executive compensation programs; and oversight. Based on its review, the Committee has determined that those processes, policies and programs do not encourage unnecessary or excessive risk-taking, manipulation of financial measures to impact personal financial rewards, or behavior that focuses on short-term results at the expense of long-term value creation.

Consideration of Annual Say-On-Pay Results – At our annual meeting of stockholders in 2021, the Fiscal 2021 compensation for our named executive officers as disclosed in our proxy statement for that annual meeting received approximately 99% support in our Say-on-Pay vote. With this strong level of support in mind, the Committee continues to discuss our executive compensation program with stockholders and reviews the program for potential areas of enhancement.

 

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Table of Contents

 

               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Individual Compensation Components

Base Salary

We use base salary to attract and retain talented executive officers needed to manage the business. Base salaries for each named executive officer (other than Mr. Dell) are determined annually by the Committee. The base salaries of our executive officers vary based on each executive officer’s level of responsibility, performance, experience, retention considerations, historical compensation and internal equity considerations.

Mr. Dell’s base salary is established at an annual rate of $950,000 in accordance with his employment agreement. Under his employment agreement, Mr. Dell’s base salary is subject to annual review by the Board of Directors and subject to increase, but not decrease. For additional information concerning Mr. Dell’s employment agreement, see “ – Other Compensation Matters – Employment Agreements; Severance and Change-in-Control Arrangements – Employment Agreement With Michael S. Dell.”

The table below summarizes the annual base salary rate of each named executive officer for Fiscal 2022. Base salaries were increased in Fiscal 2022 for all of our NEOs who were NEOs in Fiscal 2021, except for Mr. Dell, for whom the annual rate of his base salary is determined by his employment agreement and remained unchanged. The increases were recommended by management based on an evaluation of NEO base salaries in comparison to base salaries of similarly-situated executives at our peer companies and in recognition of each executive’s contributions to the business and the Company’s broader strategic objectives. As a result of payroll processes, the actual base salaries paid for the fiscal year may vary from those shown below.

 

Name

  

Fiscal 2022 Base
Salary Rate
(February 2021 to March 2021)

($)

  

Fiscal 2022 Base
Salary Rate
(April 2021 to Fiscal Year End)

($)

Michael S. Dell

       950,000        950,000 (1) 

Thomas W. Sweet

       750,000        800,000

Jeffrey W. Clarke

       881,160        941,160

Anthony Charles Whitten

              900,000 (2) 

William F. Scannell

       750,000        800,000

 

(1)

Mr. Dell’s annual base salary rate remained unchanged from Fiscal 2021, at $950,000. However, in light of the COVID-19 pandemic, Mr. Dell voluntarily agreed to forgo receipt of his base salary for a portion of Fiscal 2021. Due to the timing of the reinstatement of his salary, Mr. Dell’s actual base salary for Fiscal 2022 was $931,731.

(2)

Mr. Whitten began employment with the Company on August 16, 2021. As such, his salary was prorated, and Mr. Whitten’s actual base salary for Fiscal 2022 was $398,077.

Annual Bonus Plans

In Fiscal 2022, all of Dell Technologies’ executive officers participated in the Incentive Bonus Plan, or IBP.

Incentive Bonus Plan

The IBP is designed to align executive officer pay with Dell Technologies’ short-term financial and strategic results, while also serving to attract, retain and motivate executive officers. For each element described below, determinations are made by the Committee for the named executive officers other than Mr. Dell. For Mr. Dell, determinations are made by the Board of Directors.

IBP Formula

 

       

 

Eligible
Earnings

   ×   

Target
Annual
Incentive
Opportunity

 

   ×   

 

Corporate
Performance
Modifier

   ×   

 

Individual Performance Modifier

   =   

 

IBP
Payout

The Committee may consider the potential payout produced by the formula and such other factors as it deems appropriate, including macroeconomic conditions and significant corporate transactions, to ensure that the actual bonus payout appropriately takes into account those factors.

 

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Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

IBP Target Incentive Opportunity

The Committee establishes a target incentive opportunity annually for each executive officer expressed as a percentage of eligible earnings for that fiscal year. Under his employment agreement, Mr. Dell is eligible for an annual bonus with a target opportunity equal to 200% of his base salary. For Fiscal 2022, target annual incentives for our named executive officers were as follows:

 

Name

   Target Annual Incentive
Opportunity
as Percentage of Eligible  Earnings(1)

Michael S. Dell

       200 %

Thomas W. Sweet

       100 %

Jeffrey W. Clarke

       150 %

Anthony Charles Whitten

       150 %

William F. Scannell

       100 %

 

  (1)

Eligible earnings used to calculate annual bonuses are based on actual base salary received.

IBP Corporate Performance Modifier

The Committee establishes corporate performance measures and target goals annually. For Fiscal 2022, the designated corporate performance measures and target goals were designed to drive profitable growth and achieve strategic objectives. The Committee chose to keep the same performance measures used for the Fiscal 2021 plan, consisting of adjusted non-GAAP revenue and adjusted non-GAAP operating income, as the two performance measures for the Fiscal 2022 plan. Adjusted non-GAAP revenue and adjusted non-GAAP operating income for purposes of the IBP exclude the results of certain subsidiaries and are not the same as externally reported non-GAAP revenue or externally reported non-GAAP operating income for Dell Technologies. These measures were selected for the incentive program as key elements of our long-term financial framework. The targets for the IBP were intended to be “stretch” goals that could not be easily achieved.

The Committee retains discretion to adjust IBP measures as it determines appropriate. The Fiscal 2022 IBP goals were as follows:

 

Performance Measures

   Weighting   Threshold   Plan
(Target)
   Above
Plan(1)

Adjusted non-GAAP revenue (2)(4)

       60 %     $ 75.7B     $ 84.2B      $ 105.5B

Adjusted non-GAAP operating income (3)(4)

       40 %     $ 6.0B     $ 6.7B      $ 8.4B

IBP modifier (4)

             70 %       100 %        175 %

 

(1)

For Fiscal 2022, there was no cap on the IBP corporate performance modifier, which would increase on a linear basis for performance above target.

 

(2)

For purposes of the IBP, adjusted non-GAAP revenue generally is calculated by adjusting Dell Technologies’ net revenue as computed on a GAAP basis to exclude the impact of purchase accounting. Adjusted non-GAAP revenue for this purpose is not the same as externally reported non-GAAP revenue for Dell Technologies as the IBP measure excludes the results of certain subsidiaries.

 

(3)

For purposes of the IBP, adjusted non-GAAP operating income generally is calculated by adjusting Dell Technologies’ operating income as computed on a GAAP basis to exclude the impact of purchase accounting, amortization of intangibles, transaction-related expenses, stock-based compensation expense and other corporate expenses. Adjusted non-GAAP operating income for this purpose is not the same as externally reported non-GAAP operating income for Dell Technologies as the IBP measure excludes the results of certain subsidiaries.

 

(4)

On November 1, 2021, the Company completed the VMware Spin-off. For purposes of the IBP, planned target results for adjusted non-GAAP revenue and adjusted non-GAAP operating income were not revised for the impacts of the VMware Spin-off. As-reported amounts were therefore adjusted as necessary in order to provide a comparable basis for bonus attainment. Adjusted non-GAAP revenue and adjusted non-GAAP operating income for this purpose are not the same as externally reported non-GAAP revenue and non-GAAP operating income for Dell Technologies as the IBP measure excludes the results of certain subsidiaries.

Dell Technologies achieved strong financial results for Fiscal 2022. Dell Technologies exceeded the IBP target adjusted non-GAAP revenue goal and target adjusted non-GAAP operating income goal for Fiscal 2022. For Fiscal 2022, after excluding the results of VMware, Inc., SecureWorks Corp., RSA Security LLC, Virtustream and Boomi, Inc. in calculating the IBP corporate performance modifier, Dell Technologies achieved adjusted non-GAAP revenue of $95.3 billion and adjusted non-GAAP operating income of $8.2 billion.

 

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Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Consistent with our philosophy of rewarding performance that achieves and exceeds Dell Technologies’ annual financial goals, while taking into account macroeconomic uncertainty, the Committee exercised discretion to set the final corporate performance modifier for Fiscal 2022 at 135% of target.

IBP Individual Performance Modifier

In view of the executive officers’ potential to influence corporate performance, the Committee (or, in regard to Mr. Dell, the Board of Directors) takes into account personal performance in determining executive officers’ bonus amounts, assigning each executive officer an individual modifier from 0% to 150% following the end of each fiscal year.

In determining individual performance modifiers, the Committee considered such factors as achievement of financial targets for the business, cost management, strategic and transformational objectives relating to the executive officer’s business unit or function, and ethics and compliance. The Committee also considered factors based on environmental, social and governance, or ESG, efforts, and progress made in advancing sustainability and cultivating a diverse and inclusive workforce. The Committee does not place specific weightings on any such objective, but assigns each individual executive officer an individual performance modifier based on a holistic and subjective assessment of the officer’s performance.

IBP Payouts for Fiscal 2022

Following the end of Fiscal 2022, the Board of Directors approved Mr. Dell’s bonus amount and the Committee approved the bonus amounts of the other named executive officers. The individual and corporate performance modifiers for the named executive officers are shown below along with the corresponding bonus payment amounts:

 

Name

  

Target IBP

($)

  

Corporate
Modifier

(%)

  

Individual
Modifier

(%)

  

Bonus
Payment

($)

Michael S. Dell

       1,863,462        135        100        2,515,673

Thomas W. Sweet

       790,385        135        130        1,387,125

Jeffrey W. Clarke

       1,394,433        135        130        2,447,230

Anthony Charles Whitten

       597,116        135        120        967,327

William F. Scannell

       790,385        135        130        1,387,125

Equity Incentives

Overview

Equity incentive opportunities are the most significant component of executive officer total target compensation. The provision of equity incentive opportunities is consistent with our compensation philosophy and reflects our core compensation objectives by aligning compensation with stockholders’ interests, creating a culture of meritocracy, and enhancing our ability to attract and retain executive talent.

Except for Mr. Dell, who did not receive any equity incentives, all of our NEOs who were NEOs in Fiscal 2021 received a combination of time-based and performance-based RSUs as equity incentive opportunities for Fiscal 2022. The allocation between time-based RSUs and performance-based RSUs for Fiscal 2022 remained consistent with the allocation for Fiscal 2021, with our named executive officers receiving 70% of their long-term incentive awards in the form of performance-based RSUs and 30% in the form of time-based RSUs. Information on Fiscal 2022 equity awards can be found in the Grants of Plan-Based Awards in Fiscal 2022 table.

In connection with the VMware Spin-off, consistent with the terms of the Stock Incentive Plan, the authorized share pool under the Stock Incentive Plan and stock awards that were outstanding at the time of the VMware Spin-off were adjusted using a conversion ratio of 1.968055 to 1. The adjustment, which we refer to as the VMware Spin-off Adjustment, resulted in an increase of approximately 30 million restricted stock units and 2 million stock options, and the addition of 55 million shares to the share pool under the Stock Incentive Plan. The exercise price of unexercised stock options was also adjusted in accordance with the terms of the Stock Incentive Plan using the conversion ratio of 1.968055 to 1.

In connection with Mr. Whitten’s commencement of employment with the Company and to secure his services, the Company awarded Mr. Whitten a $45 million new hire equity award in the form of time-based RSUs with five-year ratable vesting. Vesting is subject to continued service, except in the case of termination by the Company without cause, by Mr. Whitten for good reason or by reason of Mr. Whitten’s death or disability.

 

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Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Except as described above with respect to Mr. Whitten’s new hire equity award, the Fiscal 2022 awards had the same vesting provisions as those granted in Fiscal 2021. Time-based RSUs vest ratably over a three-year period. Performance-based RSUs are subject to cliff vesting three years after the grant date, based on achievement measured against a combination of (1) annual financial performance measures, which are defined each year during the three-year period (collectively weighted 50%), and (2) relative total shareholder return, or rTSR, which we define as the cumulative total shareholder return measured against a peer group of companies belonging to the Standard & Poor’s Information Technology Index over a three-year performance period (also weighted 50%). We believe our use of companies in the Standard & Poor’s Information Technology Index to calculate rTSR promotes transparency and consistency, and allows for accurate measurement of the Company’s performance against a broad, capital market standard, as one of the leading companies in the technology sector.

Performance-based RSUs have a maximum vesting opportunity of up to 200% of the target number of shares. There is no guaranteed level of performance, so if performance is below threshold across each of the performance measures, the entire amount of performance-based RSUs could be forfeited. We believe our use of three one-year performance periods for financial performance measures in combination with one three-year rTSR measure effectively aligns our executives with the Company’s short-term and long-term financial goals and adjusts for potentially volatile factors outside the Company’s control.

Fiscal 2022 Performance-Based RSUs

Annual Financial Performance Measures

Annual financial performance measures are set each year and are collectively weighted at 50%. Achievement against targets is measured each year, and RSUs vest on the three-year anniversary of the grant date, subject to continued service.

 

          Goals ($ in billions)(1)            

Performance Measure

   Weight    Threshold   

Plan

(Target)

  

Above Plan

(Maximum)

   Results    Percentage
of Target
Financial
Funding
 

Year 1 (Fiscal 2022)

 

Non-GAAP Revenue

   30%    91.0    95.8    105.3    107.0   

 

 

 

200%(2)

 

 

Non-GAAP Operating Income

   20%    8.0    8.9    10.2    10.6

Funding Percentage

      50%    100%    200%      

 

(1)

Financial performance goals for Fiscal 2022 were approved by the Committee in March 2021 and modified in December 2021 to account for the VMware Spin-off and its impact on non-GAAP revenue and non-GAAP operating income. Financial performance results for Fiscal 2022 are not the same as externally reported results as they are not presented on a continuing operations basis. Financial performance results include VMware, Inc. results through the date of the VMware Spin-off.

 

(2)

Modifier is applicable to one-sixth of the Fiscal 2022 awards, reflecting a 50% weighting of annual financial performance measures for year one of the three one-year performance periods. A corresponding number of RSUs will be eligible to vest on March 15, 2024, subject to continued service.

Relative Total Shareholder Return

rTSR is measured over a three-year performance period and is weighted at 50%. RSUs vest on the three-year anniversary of the grant date, subject to continued service.

 

      rTSR Percentile Achieved    Percentage of Target

Maximum

   85th percentile    200%

Target

   50th percentile    100%

Threshold

   25th percentile    50%

 

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Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Fiscal 2021 Performance-Based RSUs

Annual Financial Performance Measures

Annual financial performance measures are set each year and are collectively weighted at 50%. Achievement against targets is measured each year, and RSUs vest on the three-year anniversary of the grant date, subject to continued service.

 

          Goals ($ in billions)(1)          

Performance Measure

   Weight    Threshold   

Plan

(Target)

  

Above Plan

(Maximum)

   Results    Percentage
of Target
Financial
Funding

Year 1 (Fiscal 2021)

                             

Non-GAAP Revenue

   25%    89.3    94.0    103.4    94.4   

 

168%(2)

Non-GAAP Operating Income

   25%    10.7    9.3    8.4    10.8

Year 2 (Fiscal 2022)

                             

Non-GAAP Revenue

   30%    91.0    95.8    105.3    107.0   

 

200%(2)

Non-GAAP Operating Income

   20%    8.0    8.9    10.2    10.6

Funding Percentage

      50%    100%    200%      

 

(1)

Financial performance goals for Fiscal 2022 were approved by the Committee in March 2021 and modified in December 2021 to account for the VMware Spin-off and its impact on non-GAAP revenue and non-GAAP operating income. Financial performance results for Fiscal 2022 are not the same as externally reported results as they are not presented on a continuing operations basis. Financial performance results include VMware, Inc. results through the date of the VMware Spin-off.

 

(2)

Each modifier is applicable to one-sixth of the Fiscal 2021 awards, reflecting a 50% weighting of annual financial performance measures for years one and two of the three one-year performance periods. A corresponding number of RSUs will be eligible to vest on March 15, 2023, subject to continued service.

Relative Total Shareholder Return

rTSR is measured over a three-year performance period and is weighted at 50%. RSUs vest on the three-year anniversary of the grant date, subject to continued service.

 

      rTSR Percentile Achieved    Percentage of Target

Maximum

   85th percentile    200%

Target

   50th percentile    100%

Threshold

   25th percentile    50%

 

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Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Fiscal 2020 Performance-Based RSUs

Annual Financial Performance Measures

Annual financial performance measures are set each year and are collectively weighted at 50%. Achievement against targets is measured each year, and RSUs vest on the three-year anniversary of the grant date, subject to continued service.

 

          Goals ($ in billions)(1)          

Performance Measure

   Weight    Threshold   

Plan

(Target)

  

Above Plan

(Maximum)

   Results    Percentage
of Target
Financial
Funding

Year 1 (Fiscal 2020)

                             

Non-GAAP Revenue

   15%    90.3    95.0    104.5    92.5   

 

135%(2)

Non-GAAP Operating Income

   35%    8.5    9.4    10.8    10.1

Year 2 (Fiscal 2021)

                             

Non-GAAP Revenue

   25%    89.3    94.0    103.4    94.4   

 

168%(2)

Non-GAAP Operating Income

   25%    10.7    9.3    8.4    10.8

Year 3 (Fiscal 2022)

                             

Non-GAAP Revenue

   30%    91.0    95.8    105.3    107.0   

 

200%(2)

Non-GAAP Operating Income

   20%    8.0    8.9    10.2    10.6

Funding Percentage

      50%    100%    200%      

 

(1)

Financial performance goals for Fiscal 2022 were approved by the Committee in March 2021 and modified in December 2021 to account for the VMware Spin-off and its impact on non-GAAP revenue and non-GAAP operating income. Financial performance results for Fiscal 2022 are not the same as externally reported results as they are not presented on a continuing operations basis. Financial performance results include VMware, Inc. results through the date of the VMware Spin-off.

 

(2)

Each modifier is applicable to one-sixth of the Fiscal 2020 awards, reflecting a 50% weighting of annual financial performance measures for years one, two and three of the three one-year performance periods. A corresponding number of RSUs vested on March 15, 2022.

Relative Total Shareholder Return

rTSR is measured over a three-year performance period and is weighted at 50%. RSUs vest on the three-year anniversary of the grant date, subject to continued service.

 

      rTSR Percentile Achieved    Percentage of Target

Maximum

   85th percentile    200%

Target

   50th percentile    100%

Threshold

   25th percentile    50%

RTSR Goal Attainment

         
   73rd percentile    166%

 

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Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Historical Management Equity Program

Before Fiscal 2020, our executive officers other than Mr. Dell participated in the Management Equity Program, or MEP. MEP awards were made in the form of either stock option awards or full-value awards in the form of restricted stock or restricted stock units, and typically consisted of a combination of time-based vesting awards and performance-based vesting awards. The Committee’s allocation of MEP awards between time-based and performance-based awards for each executive officer varied, but generally at least one-half of an executive officer’s MEP award was in the form of a performance-based award.

Mr. Scannell, the only NEO who held an unvested MEP award in Fiscal 2022, vested fully in the final portion of his MEP performance-based full-value award in Fiscal 2022.

Vesting was based on the level of return achieved on the Dell Technologies equity investment of Mr. Dell and the SLP stockholders (as defined in Annex A to this proxy statement) in connection with our acquisition of EMC Corporation in September 2016, referred to as return on equity and determined based on an initial value of $27.50 per share of Class C common stock, subject to adjustment for certain events. Return on equity was measured on specified measurement dates or upon the occurrence of specified events related to Dell Technologies, and the number of performance-based MEP full-value shares eligible to test for vesting varied depending upon the measurement date or event. The Committee believed this vesting design aligned the interests of the executive officer with the interests of Dell Technologies’ stockholders by compensating the executive officer only if a minimum level of return on equity was achieved. The performance-based MEP full-value award was required to achieve a threshold return on equity of at least 2x in order for 25% of the award to vest and 3.5x in order for 100% of the award to vest, with ratable vesting based on achievement between the two threshold measures.

Other Compensation Components

Benefits and Perquisites

Dell Technologies provides limited benefits and perquisites to its executive officers. While such benefits and perquisites are not a significant part of Dell Technologies’ executive officer compensation on a dollar value basis, the Committee (or, with respect to Mr. Dell, the Board of Directors) believes that these elements of compensation are important to delivering a competitive package to attract and retain qualified executive officers. Benefits and perquisites include those described below.

 

   

Annual Physical – Dell Technologies pays for a comprehensive annual physical for each executive officer and the executive officer’s spouse or domestic partner and reimburses the executive officer’s related travel and lodging costs, each subject to an annual maximum payment of $5,000 per person.

 

   

Technical Support – Dell Technologies provides executive officers with computer technical support and, in some cases, certain home network equipment. The incremental cost to Dell Technologies of providing these services is limited to the cost of hardware provided and is not material.

 

   

Security – Dell Technologies provides executive officers with security services, including alarm installation and monitoring and, in some cases, certain home security upgrades in accordance with the recommendations of an independent security study. Mr. Dell reimburses the Company for costs related to personal security protection provided to Mr. Dell and his family.

 

   

Financial Counseling and Tax Preparation Services – Under the terms of his employment agreement, Mr. Dell is entitled to reimbursement for financial counseling services (including tax preparation) of up to $12,500 annually. Other executive officers are entitled to reimbursement of up to $15,000 annually for financial counseling services (including tax preparation).

 

   

Travel Expenses – Dell Technologies pays for reasonable travel expenses for the executive officer’s spouse or domestic partner to attend Dell Technologies-sponsored events if the travel is at the request of Dell Technologies.

 

   

Other – The executive officers participate in Dell Technologies’ other benefit plans on the same terms as other employees. These plans include medical, dental and life insurance benefits, and the Dell Inc. 401(k) Plan. For additional information, see “Compensation of Executive Officers Other Benefit Plans.”

For more information about Dell Technologies’ arrangements with Mr. Dell with respect to security, travel and certain other benefits, see “Transactions With Related Persons Transactions With Michael S. Dell and Other Related Persons.”

 

Dell Technologies    /    2022 Proxy Statement    /    39


Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Other Compensation Matters

Stock Ownership Guidelines

The Board of Directors has not adopted stock ownership requirements for our directors or executive officers. The Board of Directors and the Committee believe that at this time the design of Dell Technologies’ equity compensation strategy for executive officers links the interests of executive officers closely with those of other Dell Technologies stockholders. Additionally, Mr. Dell’s ownership in the Company already reflects his full alignment with the long-term performance of Dell Technologies.

Policy on Hedging Transactions and Pledging of Securities

Dell Technologies maintains a securities trading policy that applies to our directors and employees, including executive officers and other officers, and prohibits certain activities relating to specified securities, as described below. The policy also generally applies to family members who reside with any director or employee, any other person who lives in the director’s or employee’s household, and any other family members whose transactions in securities are directed by, or subject to the influence or control of, the director or employee, as well as entities, such as a corporation, partnership or trust, controlled by the director or employee.

The activities prohibited by the policy include (1) hedging and monetization transactions that would permit any such person to continue to own the securities without the full risks and rewards of ownership, (2) transactions in put options, call options or other derivative securities on an exchange or in any other organized market and (3) the holding of the securities in a margin account or other pledging of the securities as collateral for a loan. The policy prohibits hedging and monetization transactions without regard to the means by which they are accomplished, whether through the use of financial instruments such as prepaid variable forwards, equity swaps, collars or exchange funds or otherwise, including short sales, option positions and pledges arising from certain types of hedging transactions.

The foregoing provisions of the securities trading policy apply to transactions in all securities, including equity securities, issued by Dell Technologies or specified subsidiaries, including SecureWorks Corp., that are held by any person covered by the policy. Equity securities subject to the policy include awards granted under equity compensation plans, as well as derivative securities that are not issued by the foregoing entities, such as exchange-traded put or call options or swaps relating to those entities’ securities.

The administrator of the policy has the discretion, on a case-by-case basis and in appropriate circumstances, to waive or modify the restrictions and prohibitions on the hedging and other transactions described above.

Recoupment of Compensation

Recoupment Policy for Performance-Based Compensation

If Dell Technologies restates its reported financial results, the Board of Directors will review the bonus and other cash or equity awards made to the executive officers, including the named executive officers, based on financial results during the period subject to the restatement and, to the extent practicable under applicable law, Dell Technologies will seek to recover or cancel any of these awards that were awarded as a result of achieving performance targets that would not have been met under the restated financial results.

Recoupment Provisions for Anthony Charles Whitten Sign-on Bonus

In connection with the commencement of his employment in August 2021, Mr. Whitten was granted a cash sign-on bonus of $5 million. In accordance with the terms of his sign-on bonus, if Mr. Whitten’s employment with Dell Technologies ends within the first 24 months after his hire date because he resigns without “good reason” or because he is terminated with “cause” (in each case as these terms are described below), Mr. Whitten will repay a prorated portion of the $5 million calculated based on the number of months during such 24-month period for which he was no longer employed.

 

Dell Technologies    /    2022 Proxy Statement    /    40


Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Employment Agreements; Severance and Change-in-Control Arrangements

Employment Agreement With Michael S. Dell

Mr. Dell’s employment is subject to an employment agreement with Dell Technologies and Dell Inc. pursuant to which Mr. Dell serves as Chief Executive Officer and as Chairman of the Board of Directors of Dell Technologies. Under the employment agreement, Mr. Dell may resign for any or no reason or the Board of Directors may terminate him at any time for “cause” (as defined below). In addition, following a change in control of Dell Technologies (as defined below) or a qualified initial public offering (as defined in the agreement), the Board of Directors may terminate Mr. Dell for any or no reason.

Under the employment agreement, Mr. Dell is entitled to an annual base salary of $950,000 and is eligible for an annual bonus with a target opportunity equal to 200% of his base salary. Mr. Dell’s base salary is subject to annual review by the Board of Directors and subject to increase, but not decrease. Further, as discussed under “ –Individual Compensation Components – Other Compensation Components – Benefits and Perquisites,” Dell Technologies reimburses Mr. Dell for financial counseling and tax preparation up to $12,500 per year, an annual physical (for himself and his spouse) up to $5,000 per person and all travel and business expenses reasonably incurred by Mr. Dell. Dell Technologies also provides Mr. Dell and his family with business-related security protection.

As a result of his substantial stock ownership, Mr. Dell believes that he is appropriately incentivized and that his interests are appropriately aligned with stockholders’ interests. Mr. Dell did not receive any stock-based compensation from the Company in Fiscal 2022.

Mr. Dell is subject to a covenant of indefinite duration not to disclose confidential information and an obligation to assign to Dell Technologies and Dell Inc. any intellectual property created by Mr. Dell during his employment.

Under the employment agreement, “cause” is generally defined as any of the following events:

 

   

the conviction of Mr. Dell for a felony resulting in his incarceration; or

 

   

the legal incapacity of Mr. Dell to serve as (1) a director of Dell Technologies or certain subsidiaries of Dell Technologies or (2) the chief executive officer of Dell Technologies or certain subsidiaries of Dell Technologies.

Under the employment agreement, a “change in control” is generally defined as any of the following events:

 

   

a sale or disposition of all or substantially all of the assets of Dell Technologies and its subsidiaries, taken as a whole, to any person, entity or group;

 

   

any person, entity or group (other than Mr. Dell, the SLP stockholders or certain related parties) becomes the beneficial owner of capital stock representing 50% or more of the total voting power of Dell Technologies’ outstanding capital stock, other than pursuant to a merger or consolidation of Dell Technologies with or into any other entity that does not constitute a “change in control” under the following change-in-control event; or

 

   

any merger or consolidation of Dell Technologies with or into any other entity unless the holders of Dell Technologies’ outstanding voting securities immediately before the closing directly or indirectly beneficially own capital stock representing a majority of the total voting power of the resulting entity in substantially the same proportions as their ownership in Dell Technologies immediately before such a transaction.

 

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Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Severance and Change-in-Control Arrangements With Other Named Executive Officers

Each of the other named executive officers, consisting of Messrs. Sweet, Clarke, Whitten and Scannell, has entered into a severance agreement with Dell Technologies, pursuant to which, if the executive’s employment is terminated without “cause,” or if the executive resigns for “good reason” (each as defined below), the executive will receive a severance payment equal to 300% of the executive’s then-current annual base salary. Two-thirds of this severance amount will be payable following termination of employment and the remainder will be payable on the one-year anniversary of such termination. Each of the severance agreements obligates the executive to comply with certain non-competition and non-solicitation obligations for a period of 12 months following termination of employment and also provides that each executive may not use or disclose certain confidential information of Dell Technologies as set forth in the agreement at any time during or after the executive’s employment. Mr. Whitten is entitled to receive the severance amounts described above, subject to the terms and conditions set forth above, upon a termination of employment without “cause” or for “good reason” on or after the final vesting event in 2026 of his new hire equity grant.

Unvested equity awards will be forfeited upon termination of employment, except in the case of termination due to death or disability. The awards provide no exception to this treatment in the case of a termination of employment following a change in control of Dell Technologies. In the case of termination due to death or disability, the outstanding, unvested portion of such named executive officer’s time-based vesting awards and the portion of such named executive officer’s performance-based awards for which performance has been determined will vest and the portion of such named executive officer’s performance-based awards for which performance has not been determined will vest at the target level.

Mr. Whitten’s new hire equity award will be forfeited upon termination of employment, except in the case of termination due to death, disability, without “cause,” or for “good reason,” as such terms are defined below.

Dell Technologies believes that the severance benefits it provides to the foregoing named executive officers are appropriate in light of the severance protections available to similarly-situated executive officers at companies that compete with Dell Technologies for executive talent. Dell Technologies believes the severance benefits help it to attract and retain key executives who may be presented with alternative employment opportunities that might appear to be more attractive absent these protections.

Under the severance agreements, “cause” generally is defined as any of the following events:

 

   

a violation of confidentiality obligations;

 

   

acts resulting in being charged with a criminal offense that constitutes a felony or involves moral turpitude or dishonesty;

 

   

conduct that constitutes gross neglect, insubordination, willful misconduct or breach of Dell Technologies’ code of conduct or the executive’s fiduciary duty; or

 

   

a determination that the executive violated laws relating to the workplace environment.

Under the severance agreements, “good reason” generally is defined as any of the following events, if in each case not timely cured:

 

   

a material reduction in base salary;

 

   

a material adverse change in title or reduction in authority, duties or responsibilities; or

 

   

a change in the executive’s principal place of work of more than 25 miles.

With respect to Mr. Whitten, “good reason” also includes the following additional events:

 

   

from his start date until August 15, 2024, no longer reporting to the Company’s Chief Executive Officer; or

 

   

from August 16, 2024 through his employment termination, no longer reporting to Mr. Dell.

Under the severance agreements, “change in control” has the meaning set forth in the Stock Incentive Plan, which generally defines the term to include any of the following events:

 

   

the sale or disposition, in one or a series of related transactions, to any person or group (as such term is used for purposes of Section 14(d)(2) of the Exchange Act), other than to the Sponsor Stockholders or any of their respective affiliates or to any person or group in which any of the foregoing is a member, of all or substantially all of the consolidated assets of Dell Technologies;

 

Dell Technologies    /    2022 Proxy Statement    /    42


Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

   

any person or group (as such term is used for purposes of Section 14(d)(2) of the Exchange Act), other than the Sponsor Stockholders or any of their respective affiliates or any person or group in which any of the foregoing is a member, is or becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the outstanding shares of Dell Technologies common stock, other than as a result of any merger or consolidation that does not constitute a change in control pursuant to the event immediately set forth below;

 

   

any merger or consolidation of Dell Technologies with or into any other person, unless the holders of the Dell Technologies common stock immediately prior to such merger or consolidation beneficially own (within the meaning of Rule 13d-3 under the Exchange Act) a majority of the outstanding shares of the common stock (or equivalent voting securities) of the surviving or successor entity (or the parent entity thereof); or

 

   

prior to an initial public offering of the Class C common stock that is registered under the Securities Act of 1933, the Sponsor Stockholders and their respective affiliates cease to have the ability to cause the election of that number of members of the Board who would collectively have the right to vote a majority of the aggregate number of votes represented by all of the members of the Board, and any person or group (as such term is used for purposes of Section 14(d)(2) of the Exchange Act), other than the Sponsor Stockholders and their respective affiliates or any person or group in which any of the foregoing is a member, beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act) outstanding voting stock representing a greater percentage of voting power with respect to the general election of members of the Board than the shares of outstanding voting stock which the Sponsor Stockholders and their respective affiliates collectively beneficially own (within the meaning of Rule 13d-3 under the Exchange Act).

For purposes of this provision of the Stock Incentive Plan, the term Sponsor Stockholders refers collectively to the MD stockholders (as defined in Annex A to this proxy statement) and the SLP stockholders (as defined in Annex A to this proxy statement).

For more information about potential payments to Mr. Dell under his employment agreement and to our other named executive officers under their severance agreements, see Compensation of Executive Officers – Potential Payments Upon Termination of Employment or Change in Control.”

 

Dell Technologies    /    2022 Proxy Statement    /    43


Table of Contents

 

Compensation of Executive Officers

 

 

Fiscal 2022 Summary Compensation Table

The following table summarizes the total compensation paid or granted for the fiscal years indicated by Dell Technologies to the following persons, each of whom was serving as an executive officer of Dell Technologies as of January 28, 2022, which was the last day of Fiscal 2022:

 

   

Michael S. Dell, who served as our principal executive officer

 

   

Thomas W. Sweet, who served as our principal financial officer

 

   

Jeffrey W. Clarke, Anthony Charles Whitten and William F. Scannell, who are our three other most highly compensated executive officers

We refer to these executive officers as our named executive officers.

 

Name and principal position

   Fiscal
Year
    

Salary

($)

   

Bonus

($)

   

Stock
awards

($)(1)

   

Non-equity
incentive plan
compensation

($)(2)

    

All other
compensation

($)

    

Total

($)

 

Michael S. Dell

Chairman and Chief Executive Officer

     2022        931,731 (3)                  2,515,673        19,943        3,467,347  
     2021        255,769 (4)                  665,000        9,646        930,415  
     2020        950,000                   2,394,000        15,058        3,359,058  

Thomas W. Sweet

Chief Financial Officer

     2022        790,385             8,393,267 (5)      1,387,125        41,530        10,612,307  
     2021        750,000             5,241,221       1,267,500        44,472        7,303,193  
     2020        732,692             5,354,646       1,153,990        45,705        7,287,033  

Jeffrey W. Clarke

Co-Chief Operating Officer and Vice Chairman

     2022        929,622             13,837,995 (5)      2,447,230        45,706        17,260,553  
     2021        881,160             12,637,502       1,489,160        49,847        15,057,669  
     2020        860,391             7,072,202       1,355,115        46,391        9,334,099  

Anthony Charles Whitten

Co-Chief Operating Officer

     2022        398,077 (6)      5,000,000 (7)      44,999,984 (8)      967,327        61,524        51,426,912  
                 

William F. Scannell

President, Global Sales and Customer Operations

     2022        790,385       545 (9)      8,393,267 (5)      1,387,125        40,428        10,611,750  
     2021        750,000             10,241,206       1,072,500        39,720        12,103,426  
     2020        732,692       4,666,667       13,640,018       877,033        27,239        19,943,649  

 

(1)

Stock award values represent both time-based and performance-based RSUs. To estimate the fair value of performance-based RSUs containing a market condition, the Company uses the Monte Carlo valuation model. The assumptions used to calculate this type of fair value are incorporated herein by reference to Note 16 to our consolidated financial statements in our annual report on Form 10-K for the fiscal year ended January 28, 2022, filed with the SEC on March 24, 2022, which we refer to as our 2022 Form 10-K. The fair value of all other stock awards is generally based on the closing price of the Class C common stock price as reported on the NYSE on the grant date or the trade date immediately preceding the grant date, if the grant date falls on a non-trading day.

 

(2)

Amounts represent payments under the IBP.

 

(3)

Mr. Dell’s annual base salary rate remained unchanged from Fiscal 2020, at $950,000. Due to the timing of the reinstatement of his salary, Mr. Dell’s actual base salary for Fiscal 2022 was $931,731. See note 4 below.

 

(4)

Amount reflects Mr. Dell’s voluntary agreement to forgo receipt of his base salary for a portion of Fiscal 2021 in light of the COVID-19 pandemic and represents Mr. Dell’s paid salary as a result of such agreement.

 

(5)

Stock awards represent March 2021 grants consisting of (a) time-based RSUs, (b) performance-based RSUs based on rTSR for the three-year period from Fiscal 2022 through Fiscal 2024, and (c) performance-based RSUs based on Fiscal 2022 non-GAAP revenue and non-GAAP operating income for Dell Technologies, as adjusted for the VMware Spin-off. Stock awards also include portions of performance-based RSUs granted in March 2020 and March 2019 based on Fiscal 2022 non-GAAP revenue and non-GAAP operating income for Dell Technologies, as adjusted for the VMware Spin-off.

 

(6)

Amount represents Mr. Whitten’s prorated salary from his commencement of employment with the Company on August 16, 2021 through the end of Fiscal 2022.

 

(7)

Represents new hire cash sign-on bonus paid upon commencement of employment.

 

(8)

Stock award shown reflects new hire award consisting of time-based RSUs granted in August 2021.

 

(9)

Represents Inspire Service award points to celebrate 35 years of service with the Company.

 

Dell Technologies    /    2022 Proxy Statement    /    44


Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

All Other Compensation Table

The following table summarizes the information included in the All Other Compensation column for Fiscal 2022 in the Fiscal 2022 Summary Compensation Table.

 

Name

  

Retirement
plans
matching
contribution

($)

  

Benefit
plans

($)

  

Annual
physical

($)

  

Security

($)

 

Imputed
income(1)

($)

  

Other

($)

 

Total

($)

Michael S. Dell

       11,885        8,058                                  19,943

Thomas W. Sweet

       7,731        11,484               227       1,408        20,680 (2)        41,530

Jeffrey W. Clarke

       7,731        7,482        4,705              1,130        24,658 (3)        45,706

Anthony Charles Whitten

       2,077        1,104               33,343 (4)               25,000 (5)        61,524

William F. Scannell

       7,731        7,790        4,743                     20,164 (6)        40,428

 

(1)

Represents the incremental cost of personal travel or travel by spouses and attendance by the executive officers and spouses at Dell Technologies-sponsored events, as applicable. For additional information, see “Compensation Discussion and Analysis – Individual Compensation Components – Other Compensation Components – Benefits and Perquisites.”

 

(2)

Represents tax and financial planning expenses of $15,000 and contribution by Dell Technologies to match the executive officer’s charitable contribution of $5,680.

 

(3)

Represents tax and financial planning expenses of $15,000, contribution by Dell Technologies to match the executive officer’s charitable contribution of $8,768, fitness program reimbursements of $300 and earnings under the activity perquisites programs of $590.

 

(4)

Amount represents cost of security services provided in connection with Mr. Whitten’s onboarding, which services are consistent with those provided to other NEOs and were based on the recommendations of an independent security study.

 

(5)

Represents tax and financial planning expenses of $15,000 and contribution by Dell Technologies to match the executive officer’s charitable contribution of $10,000.

 

(6)

Represents tax and financial planning expenses of $15,000, contribution by Dell Technologies to match the executive officer’s charitable contribution of $5,000 and $164 to cover tax payments related to Mr. Scannell’s Inspire Service award.

 

Dell Technologies    /    2022 Proxy Statement    /    45


Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Grants of Plan-Based Awards in Fiscal 2022

The following table sets forth certain information about grants of plan-based awards that Dell Technologies made to the named executive officers during Fiscal 2022. For more information about the plans under which these awards were granted, see “Compensation Discussion and Analysis – Individual Compensation Components – Annual Bonus Plans – Incentive Bonus Plan” and “ – Equity Incentives.”

 

                Estimated future payouts under
non-equity incentive plan
awards(3)
    Estimated future payouts
under equity incentive plan
awards(4)(5)
   

All
other
stock
awards:
Number
of
shares
of stock
or units

(#)(5)

   

Grant date
fair value
of stock
and option
awards

($)

 

Name

  Type of
award(1)
  Grant
date
  Award
date(2)
 

Threshold

($)

   

Target

($)

   

Maximum

($)

   

Threshold

(#)

   

Target

(#)

   

Maximum

(#)

 

Michael S. Dell

  IBP               1,863,462                                      

Thomas W. Sweet

  IBP               790,385                                      
  PSU-rTSR(6)   3/15/2021   3/15/2021                       23,141       46,281       92,562             3,151,394  
  PSU-FIN(7)   3/15/2021   3/15/2021                       7,714       15,428       30,856             700,042  
  PSU-FIN(7)   3/15/2021   3/15/2020                       19,159       38,317       76,634             1,738,624  
  PSU-FIN(7)   3/15/2021   3/15/2019                       11,054       22,108       44,216             1,003,145  
  RSU   3/15/2021                                           39,671 (8)      1,800,062  

Jeffrey W. Clarke

  IBP               1,394,433                                      
  PSU-rTSR(6)   3/15/2021   3/15/2021                       40,781       81,561       163,122             5,553,701  
  PSU-FIN(7)   3/15/2021   3/15/2021                       13,595       27,189       54,378             1,233,694  
  PSU-FIN(7)   3/15/2021   3/15/2020                       28,137       56,273       112,546             2,553,373  
  PSU-FIN(7)   3/15/2021   3/15/2019                       14,601       29,201       58,402             1,324,988  
  RSU   3/15/2021                                           69,912 (8)      3,172,239  

Anthony Charles Whitten

  IBP               597,116                                      
  RSU   8/16/2021                                           888,735 (9)      44,999,984  

William F. Scannell

  IBP               790,385                                      
  PSU-rTSR(6)   3/15/2021   3/15/2021                       23,141       46,281       92,562             3,151,394  
  PSU-FIN(7)   3/15/2021   3/15/2021                       7,714       15,428       30,856             700,042  
  PSU-FIN(7)   3/15/2021   3/15/2020                       19,159       38,317       76,634             1,738,624  
  PSU-FIN(7)   3/15/2021   3/15/2019                       11,054       22,108       44,216             1,003,145  
  RSU   3/15/2021                                           39,671 (8)      1,800,062  

 

(1)

Of the awards shown in the table:

 

   

“IBP” refers to the Incentive Bonus Plan.

 

   

“PSU–rTSR” refers to Fiscal 2022 performance-based stock units eligible to vest based on achievement measured against the rTSR performance goal for Fiscal 2022-2024.

 

   

“PSU–FIN” refers to Fiscal 2022 performance-based stock units eligible to vest based on achievement measured against financial performance goals for Fiscal 2022. See note 5 below.

 

   

“RSU” refers to time-based restricted stock units.

 

(2)

This column reflects the date on which the Committee approved all material terms of each grant of performance-based stock units, except performance targets for subsequent fiscal years, which were approved at the later date reflected in the “Grant date” column. For financial reporting purposes, awards are measured at fair value on the grant date as defined by FASB ASC Topic 718.

 

(3)

Each named executive officer participated in the IBP. Awards under this plan were funded at 135% based on the corporate modifier. An individual modifier was applied for Messrs. Sweet, Clarke, Whitten and Scannell.

 

(4)

The amounts shown in the Threshold, Target and Maximum columns reflect the minimum, target and maximum number, respectively, of Fiscal 2022 performance-based stock units that are eligible to vest subject to the achievement of Fiscal 2022-2024 performance goals. The threshold number of shares is 50% of the target number of shares and the maximum number of shares is 200% of the target number of shares. If any of these units become eligible to vest, they will vest in Fiscal 2024. For more information about these performance-based stock units, see “Compensation Discussion and Analysis – Individual Compensation Components – Equity Incentives – Fiscal 2022 Performance-Based RSUs.”

 

Dell Technologies    /    2022 Proxy Statement    /    46


Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

(5)

The amounts shown represent the number of shares following the VMware Spin-off Adjustment.

 

(6)

The amounts shown represent the shares subject to restricted stock unit awards that may be eligible to vest based on rTSR for Fiscal 2022-2024. The weighted-average grant date fair value is $68.09 and was determined utilizing a Monte Carlo valuation model and was adjusted in connection with the VMware Spin-off using a 1.968055 conversion ratio.

 

(7)

The amounts shown represent the shares subject to RSUs that may be eligible to vest upon achievement of the financial performance goals of non-GAAP revenue and non-GAAP operating income for Fiscal 2022 only. The grant date fair value is $45.37 and was based on the closing price of the Class C common stock as reported on the NYSE on March 15, 2021 and adjusted in connection with the VMware Spin-off using a 1.968055 conversion ratio. Achievement with respect to these restricted stock units was fixed at 200% of the target number of shares covered by the awards based on performance for Fiscal 2022. The Fiscal 2023 financial performance goals were approved in March 2022 and will be presented in the proxy statement for the 2023 annual meeting of stockholders. The Fiscal 2024 financial targets, for the March 2021 award, will be approved in Fiscal 2023 and will be presented in the proxy statement for the 2024 annual meeting of stockholders.

 

(8)

One-third of these units vested on March 15, 2022 and the remaining two-thirds will vest in equal installments on March 15, 2023 and March 15, 2024.

 

(9)

These RSUs will vest in equal installments of 20% each on August 16, 2022, August 16, 2023, August 16, 2024, August 16, 2025 and August 16, 2026.

 

Dell Technologies    /    2022 Proxy Statement    /    47


Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Outstanding Equity Awards at End of Fiscal 2022

The following table sets forth certain information about outstanding stock awards held as of the end of Fiscal 2022 by the named executive officers.

 

          Stock Awards  

Name

   Award Date and
Award Type
  

Number of
shares or units
of stock that
have not vested(1)

(#)

   

Market value of
shares or units of
stock held that have
not vested(2)

($)

    

Equity incentive
plan awards:
number of
unearned shares,
units or other rights
that have not vested(1)

(#)

   

Equity incentive
plan awards:
market or payout
value of unearned
shares, units or
other rights that
have not vested(2)

($)

 

Michael S. Dell

                            

Thomas W. Sweet

   3/15/2019 RSU      18,951 (3)      1,065,804               
   3/15/2019 PSU-FIN      111,212 (4)      6,254,563               
   3/15/2019 PSU-rTSR                   66,332 (9)      3,730,512  
   3/15/2020 RSU      65,692 (5)      3,694,518               
   3/15/2020 PSU-FIN      141,027 (6)      7,931,359        38,315 (6)      2,154,835  
   3/15/2020 PSU-rTSR                   114,962 (10)      6,465,463  
   3/15/2021 RSU      39,671 (7)      2,231,097               
   3/15/2021 PSU-FIN      30,856 (8)      1,735,341        30,853 (8)      1,735,173  
   3/15/2021 PSU-rTSR                   46,281 (11)      2,602,843  
   Total      407,409       22,912,682        296,743       16,688,826  

Jeffrey W. Clarke

   3/15/2019 RSU      25,030 (3)      1,407,687               
   3/15/2019 PSU-FIN      146,885 (12)      8,260,812               
   3/15/2019 PSU-rTSR                   87,608 (9)      4,927,074  
   3/15/2020 RSU      96,477 (5)      5,425,867               
   8/20/2020 RSU      131,951 (13)      7,420,924               
   3/15/2020 PSU-FIN      207,114 (6)      11,648,091        56,270 (6)      3,164,625  
   3/15/2020 PSU-rTSR                   168,834 (10)      9,495,224  
   3/15/2021 RSU      69,912 (7)      3,931,851               
   3/15/2021 PSU-FIN      54,378 (8)      3,058,219        54,374 (8)      3,057,994  
   3/15/2021 PSU-rTSR                   81,561 (11)      4,586,990  
   Total      731,747       41,153,451        448,647       25,231,907  

Anthony Charles Whitten

   8/16/2021 RSU      888,735 (14)      49,982,456               

William F. Scannell

   3/15/2019 RSU      18,951 (3)      1,065,804               
   12/9/2019 RSU      165,208 (15)      9,291,298               
   3/15/2019 PSU-FIN      111,212 (4)      6,254,563               
   3/15/2019 PSU-rTSR                   66,332 (9)      3,730,512  
   3/15/2020 RSU      65,592 (5)      3,694,518               
   8/20/2020 RSU      131,951 (13)      7,420,924               
   3/15/2020 PSU-FIN      141,027 (6)      7,931,359        38,315 (6)      2,154,835  
   3/15/2020 PSU-rTSR                   114,962 (10)      6,465,463  
   3/15/2021 RSU      39,671 (7)      2,231,097               
   3/15/2021 PSU-FIN      30,856 (8)      1,735,341        30,853 (8)      1,735,173  
   3/15/2021 PSU-rTSR                   46,281 (11)      2,602,843  
   Total      704,568       39,624,904        296,743       16,688,826  

 

(1)

The units shown represent the number of RSUs following the VMware Spin-off Adjustment, and, if applicable, earned performance achievement units. Incremental RSUs granted during Fiscal 2022 due to the equitable adjustment are summarized as follows:

 

Dell Technologies    /    2022 Proxy Statement    /    48


Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

     VMware Spin-off Adjustment  

Name

  

Number of shares
or units of stock
that have not
vested

(#)

    

Number of
unearned shares,
units or other rights
that have not vested

(#)

     Total  

Michael S. Dell

                    

Thomas W. Sweet

     163,089        145,963        309,052  

Jeffrey W. Clarke

     304,520        220,683        525,203  

Anthony Charles Whitten

     437,155               437,155  

William F. Scannell

     309,257        145,963        455,220  

 

(2)

The dollar amounts shown are determined by multiplying the number of shares or units shown by $56.24, the closing price of Dell Technologies Class C common stock as reported on the NYSE on January 28, 2022, the last trading day of Dell Technologies’ fiscal year.

 

(3)

These shares vested on March 15, 2022.

 

(4)

Following the completion of the final achievement measurement, 111,212 shares vested on March 15, 2022.

 

(5)

One-half of these shares vested on March 15, 2022 and the remaining shares will vest on March 15, 2023, subject to continued service.

 

(6)

These awards will vest on March 15, 2023, subject to performance and continued service.

 

(7)

One-third of the shares subject to these RSUs vested on March 15, 2022 and the remaining two-thirds will vest in equal installments on March 15, 2023 and March 15, 2024, subject to continued service.

 

(8)

This award will vest on March 15, 2024, subject to performance and continued service.

 

(9)

Based on the achievement of the rTSR performance goal for the period March 15, 2019 to March 14, 2022, 166% of the target RSUs as adjusted for the VMware Spin-off vested on March 15, 2022.

 

(10)

These awards will vest on March 15, 2023, subject to rTSR performance for the Fiscal 2021-2023 period and continued service.

 

(11)

These awards will vest on March 15, 2024, subject to rTSR performance for the Fiscal 2022-2024 period and continued service.

 

(12)

Following the completion of the final achievement measurement, 146,885 shares vested on March 15, 2022.

 

(13)

49,481 shares will vest on August 20, 2022 and 82,470 shares will vest on August 20, 2023, subject to continued service.

 

(14)

These RSUs will vest in equal installments of 20% each on August 16, 2022, 2023, 2024, 2025 and 2026, subject to continued service.

 

(15)

This award will vest on December 9, 2022, subject to continued service.

 

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Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Option Exercises and Stock Vested

The following table sets forth certain information about option exercises and vesting of restricted stock or restricted stock units during Fiscal 2022 for each of the named executive officers on an aggregate basis.

 

     Option Awards      Stock Awards  

Name

  

Number of shares
acquired on exercise

(#)

    

Value realized
on exercise

($)(1)

    

Number of shares
acquired on vesting

(#)

   

Value realized
on vesting

($)(2)

 

Michael S. Dell

                          

Thomas W. Sweet

     881,818        72,444,550        26,321       2,337,831  

Jeffrey W. Clarke

     113,946        7,212,998        53,992       4,919,608  

Anthony Charles Whitten

                          

William F. Scannell

                   409,564 (3)      33,150,439  

 

(1)

Represents the difference between the exercise price and the price of our Class C common stock, as reported on the NYSE, at the time of exercise for each option.

 

(2)

Represents the closing price of our Class C common stock as reported on the NYSE on the immediately preceding trading date, multiplied by the number of shares of stock vesting on the applicable vesting date.

 

(3)

Includes 201,272 shares of the final portion of Mr. Scannell’s MEP performance-based full-value award and 83,945 time-based RSUs (165,209 RSUs following the VMware Spin-off Adjustment) which vested subsequent to the VMware Spin-off.

Stock Incentive Plan

The purpose of the Dell Technologies Inc. 2013 Stock Incentive Plan (as amended and restated as of July 9, 2019), which we refer to as the Stock Incentive Plan, is to aid Dell Technologies in recruiting and retaining employees, directors and other service providers of outstanding ability and to motivate these persons to exert their best efforts on behalf of the Company by providing incentives through the granting of stock-based awards with respect to shares of Class C common stock and the granting of cash-denominated awards.

The Stock Incentive Plan authorizes the issuance of an aggregate of 165.5 million shares of the Company’s Class C common stock including approximately 55 million shares automatically added to the share pool pursuant to the equitable adjustment provisions relating to the VMware Spin-off. As of January 28, 2022, there were approximately 46 million shares of Class C common stock available for future grants under the Stock Incentive Plan.

Employees, consultants, non-employee directors, and other service providers of the Company and its affiliates approved by the Committee are eligible to receive stock awards under the Stock Incentive Plan, subject to certain limits provided by law with respect to the granting of incentive stock options. The Committee has the full authority to determine who will be granted awards under the Stock Incentive Plan.

The Stock Incentive Plan provides for the grant of any of the following types of stock awards (or any combination thereof): options to purchase shares (incentive or nonqualified); stock appreciation rights to acquire shares; or other stock-based awards providing for the delivery of shares. Other stock-based awards the Company may grant include restricted stock, restricted stock units, deferred stock units and dividend equivalent rights.

Shares of Class C common stock acquired pursuant to awards granted under the Stock Incentive Plan are subject to transfer restrictions set forth in the Stock Incentive Plan.

If Dell Technologies undergoes a change in control, as defined in the Stock Incentive Plan, the Committee, at its discretion, may accelerate the vesting or cause any restrictions to lapse with respect to outstanding awards, may cancel such awards for fair value, or may provide for the issuance of substitute awards.

Subject to certain limitations specified in the Stock Incentive Plan, the Board of Directors may amend or terminate the Stock Incentive Plan. Unless earlier terminated, the Stock Incentive Plan will terminate ten years following its effective date, or October 29, 2023, but any awards outstanding under the Stock Incentive Plan as of the termination date will remain outstanding in accordance with their terms.

 

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Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Other Benefit Plans

401(k) Retirement Plans

During Fiscal 2022, all named executive officers were eligible to participate in the Dell Inc. 401(k) Plan and receive matching contributions of up to 6% of the participant’s eligible compensation, up to a maximum amount for the Dell Inc. 401(k) Plan year. Participants in the Dell Inc. 401(k) Plan may invest their contributions and the matching contributions in a variety of investment choices.

Deferred Compensation Plans

Dell Technologies maintains a nonqualified deferred compensation plan pursuant to which designated managerial or highly compensated employees, including the named executive officers, may elect to defer the receipt of a portion of the base salaries and/or cash bonuses that they otherwise would have received when earned.

Dell Technologies does not make any matching or other contributions under the plan. The plan is intended to give participants the ability to defer receipt of certain income to a later date, which may be an attractive tax planning feature and the availability of which assists in the attraction and retention of executive talent. Participants’ account balances reflect gains and losses in the plan’s investment funds.

The following table shows the executive contributions, earnings and account balances in the deferred compensation plans for the named executive officers for Fiscal 2022.

Fiscal 2022 Nonqualified Deferred Compensation Table

 

Name

    

Executive
contributions
in last FY

($)

    

Registrant
contributions
in last FY

($)

    

Aggregate
earnings
in last FY

($)(1)

    

Aggregate
withdrawals/
distributions

($)

    

Aggregate
balance at
last FYE

($)

Michael S. Dell

                        

Thomas W. Sweet

                        

Jeffrey W. Clarke

                        

Anthony Charles Whitten

                        

William F. Scannell

               (34)           27,699

 

(1)

The aggregate earnings have been reduced to reflect the deduction of an annual administrative fee of $37.

 

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Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Potential Payments Upon Termination of Employment or Change in Control

The following table sets forth the amount of compensation that would become payable to each named executive officer under existing plans and arrangements if one of the events described in the table had occurred on January 28, 2022, based on the named executive officer’s compensation as of such date and, if applicable, based on the amount of outstanding stock-based awards held by the named executive officer as of such date and the fair market value as of such date of the Class C common stock. These benefits are in addition to benefits available before the occurrence of any termination of employment or change in control of Dell Technologies, including then-exercisable stock options, and benefits available generally to salaried employees, such as distributions under the Dell Inc. 401(k) Plan. In addition, in connection with any actual termination of employment or change-in-control transaction, Dell Technologies may determine to enter into an agreement or to establish an arrangement providing additional benefits or amounts, or altering the terms of benefits described below, as the Board of Directors determines appropriate.

The actual amounts that would be paid upon a named executive officer’s termination of employment or in connection with a change in control can be determined only at the time of any such event. Because of the number of factors that affect the nature and amount of any benefits, any actual amounts paid or distributed may be higher or lower than reported below. Factors that could affect these amounts include the timing during the year of any such event, the named executive officer’s current position and salary, the amount of stock-based awards held by the named executive officer and the fair market value of the Class C common stock.

For information about the events that constitute a “change in control” under Mr. Dell’s employment agreement, see “Compensation Discussion and Analysis – Other Compensation Matters – Employment Agreements; Severance and Change-in-Control Arrangements – Employment Agreement With Michael S. Dell.” For information about the events that constitute a “change in control” or a qualifying termination of employment under the severance agreements with the other named executive officers, see “Compensation Discussion and Analysis – Other Compensation Matters – Employment Agreements; Severance and Change-in-Control Arrangements – Severance and Change-in-Control Arrangements With Other Named Executive Officers.”

 

Name

    

Severance
payment(1)

($)

      

Acceleration
benefit upon
death or
disability(2)

($)

      

Acceleration
upon
change in
control

($)

    

Acceleration
upon change in
control and
qualifying
termination(3)

($)

      

Acceleration
upon
qualifying
termination(3)

($)

 

Michael S. Dell

                                        

Thomas W. Sweet

       2,400,001          39,601,508                         

Jeffrey W. Clarke

       2,823,480          66,385,359                         

Anthony Charles Whitten

       2,700,000          49,982,456               49,982,456          49,982,456  

William F. Scannell

       2,400,001          56,313,713                         

 

(1)

Represents estimated lump sum severance payments payable by Dell Technologies.

 

(2)

Represents the value of unvested restricted shares that are subject to vesting acceleration in the event of death or permanent disability, based on the closing price of $56.24 of the Class C common stock on January 28, 2022 as reported on the NYSE.

 

(3)

In the case of a material reduction in Mr. Whitten’s authority, duties or responsibilities directly related to the occurrence of a change in control, employment may not be terminated for good reason until the first date that follows the six-month anniversary of such change in control.

 

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Table of Contents
               
                   Compensation Discussion and Analysis   Compensation of Executive Officers   Security Ownership of Certain Beneficial Owners and Management   Report of the Audit Committee   Additional Information   Annex A   Annex B                   
               

 

Pay Ratio Disclosure

In accordance with SEC rules, we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee, excluding our CEO. For Fiscal 2022, as determined under Item 402 of the SEC’s Regulation S-K, the annual total compensation for our CEO was $3,467,347, the annual total compensation for our median employee was $70,562, and the ratio of our CEO’s annual total compensation to our median employee’s annual total compensation for Fiscal 2022 was 49 to 1.

Based on the Company’s belief that there have not been any changes to our workforce, our employee compensation arrangements, or the Fiscal 2021 median employee’s circumstances that would result in a significant change to the pay ratio, we used the same median employee used for our Fiscal 2021 pay ratio calculation to calculate our Fiscal 2022 pay ratio. In identifying our median employee, we calculated annual total target cash compensation of each employee as of November 13, 2020 for the 12-month period that ended on January 29, 2021. Total target cash compensation for this purpose consisted of base salary and target annual bonus and commission incentive and was calculated using internal human resources records. As of November 13, 2020, we employed 122,760 people worldwide. For our employees who were paid in currency other than U.S. dollars, these amounts were converted into U.S. dollars at the applicable exchange rate on December 31, 2021. We annualized the compensation for full-time and part-time employees that were not employed by us for all of Fiscal 2021. We did not make cost-of-living adjustments or any other assumptions, adjustments or estimates.

We believe the ratio presented above is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

 

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Table of Contents

 

Report of the Audit Committee

 

 

The Audit Committee assists the Board of Directors in its oversight of the financial reporting process of Dell Technologies Inc. (the “Company”). The Audit Committee’s responsibilities are more fully described in its charter, which is accessible on the Company’s website.

Management has the primary responsibility for the preparation and integrity of the Company’s financial statements, accounting and financial reporting principles and internal controls and procedures. The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP (“PwC”), is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion thereon.

The Audit Committee reports that it has:

 

   

reviewed and discussed with the Company’s management the audited consolidated financial statements for the fiscal year ended January 28, 2022;

 

   

discussed with PwC the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC;

 

   

received the written disclosures and the letter from PwC required by applicable requirements of the Public Company Accounting Oversight Board regarding PwC’s communications with the Audit Committee concerning independence, and has discussed with PwC its independence from the Company; and

 

   

based on the review and discussions referred to herein, recommended to the Board of Directors, and the Board of Directors has approved, that the audited consolidated financial statements be included in the Company’s annual report on Form 10-K for the fiscal year ended January 28, 2022, for filing with the Securities and Exchange Commission.

AUDIT COMMITTEE

William D. Green, Chair

Ellen J. Kullman

Lynn Vojvodich Radakovich

 

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Table of Contents

 

Security Ownership of Certain Beneficial Owners and Management

 

 

The following table presents as of April 28, 2022, except as otherwise indicated below, certain information based on our records and filings with the SEC regarding the beneficial ownership of our common stock by:

 

   

each director and director nominee;

 

   

each executive officer named in the Fiscal 2022 Summary Compensation Table under “Compensation of Executive Officers”;

 

   

all of our directors and executive officers as a group; and

 

   

each person known by us to own beneficially more than 5% of the outstanding shares of any class of our common stock.

We are authorized under our certificate of incorporation to issue shares of the following classes of common stock that were outstanding as of April 28, 2022:

 

   

600,000,000 shares of Class A common stock, of which 378,480,523 shares were issued and outstanding as of April 28, 2022;

 

   

200,000,000 shares of Class B common stock, of which 95,350,227 shares were issued and outstanding as of April 28, 2022; and

 

   

7,900,000,000 shares of Class C common stock, of which 274,315,114 shares were issued and outstanding as of April 28, 2022.

The Class C common stock is registered under the Exchange Act and listed on the NYSE. No other class of our common stock is registered under the Exchange Act or listed on any securities exchange.

The calculation of beneficial ownership is made in accordance with SEC rules. Under such rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. Beneficial ownership as of any date includes any shares as to which a person has the right to acquire voting or investment power as of such date or within 60 days thereafter through the exercise of any stock option or other right or the vesting of any RSU, without regard to whether such right expires before the end of such 60-day period or continues thereafter. Under our certificate of incorporation, any holder of Class A common stock or Class B common stock has the right at any time to convert all or any of the shares of such Class A common stock or Class B common stock into shares of Class C common stock on a one-to-one basis. The numbers of shares beneficially owned and applicable percentage ownership amounts set forth in the following table under the heading “Class C Common Stock” do not reflect conversion of any shares of Class A common stock or Class B common stock into shares of Class C common stock. If two or more persons share voting power or investment power with respect to specific securities, all of such persons may be deemed to be beneficial owners of such securities.

The percentage of beneficial ownership as to any person as of April 28, 2022 (except as otherwise indicated below) is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power as of or within 60 days after April 28, 2022, by the sum of the number of shares outstanding as of April 28, 2022 plus the number of shares as to which such person has the right to acquire voting or investment power as of or within 60 days after April 28, 2022. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, Dell Technologies believes that the beneficial owners of the common stock listed below, based on information furnished by the beneficial owners in SEC filings or otherwise, have sole voting and investment power with respect to the shares shown.

 

 

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Table of Contents
                   
                  

Compensation

of Executive Officers

 

Report of

the Audit Committee

 

Security Ownership of Certain Beneficial Owners and

Management

  Transactions With Related Persons   Questions and Answers About the Annual Meeting   Additional Information   Annex A   Annex B   Annex C                   
                   

 

     Class A
Common Stock
    Class B
Common Stock
    Class C
Common Stock
    Percentage
Ownership of
All
Outstanding
Dell
Technologies
Common
Stock
 

Name of Beneficial Owner

   Number      Percent(1)     Number      Percent(1)     Number      Percent(1)  

Executive Officers and Directors:

                 

Michael S. Dell (2)

     345,834,081        91.4                  5,951,255        2.2     47.0

Thomas W. Sweet

                               198,387        *       *  

Jeffrey W. Clarke (3)

                               644,549        *       *  

David W. Dorman (4)

                               175,779        *       *  

Egon Durban

                                             

David Grain (5)

                               6,147        *       *  

William D. Green (6)

                               300,186        *       *  

Ellen J. Kullman (7)

                               321,292        *       *  

Simon Patterson

                                             

William F. Scannell

                                             

Lynn Vojvodich Radakovich (8)

                               78,392        *       *  

Anthony Charles Whitten

                                             

All directors and executive officers as a group (16 persons) (9)

     345,834,081        91.4                  8,103,471        2.9     47.3

Other Stockholders:

                 

SLD Trust (10)

     32,390,896        8.6                               4.3

SLP Stockholders (11)

                  95,350,227        100     84,058        *       12.8

Dodge & Cox (12)

                               33,476,762        12.2     4.5

BlackRock, Inc. (13)

                               20,380,718        7.4     2.7

The Vanguard Group (14)

                               17,196,572        6.3     2.3

 

*

Less than 1%.

 

(1)

Represents the percentage of Class A common stock, Class B common stock or Class C common stock beneficially owned by each stockholder included in the table based on the number of shares of each such class outstanding as of April 28, 2022 and without giving effect to the conversion of any shares of Class A common stock or Class B common stock into shares of Class C common stock, as described in the introduction to this table.

 

(2)

The shares of Class A common stock shown as beneficially owned by Mr. Dell do not include 32,390,896 shares of Class A common stock beneficially owned by Susan Lieberman Dell Separate Property Trust (the “SLD Trust”) and Susan L. Dell, of which Mr. Dell may be deemed the beneficial owner. Mr. Dell’s address is c/o Dell Technologies Inc., One Dell Way, Round Rock, Texas 78682.

 

(3)

The shares of Class C common stock shown as beneficially owned by Mr. Clarke include 200,000 shares of Class C common stock held by family trusts of which Mr. Clarke and his spouse serve as co-managing trustees, as to which Mr. Clarke has shared voting power and shared dispositive power.

 

(4)

The shares of Class C common stock shown as beneficially owned by Mr. Dorman include 4,255 shares of Class C common stock that Mr. Dorman will acquire upon the vesting of restricted stock units as of or within 60 days after April 28, 2022 and 16,252 shares of Class C common stock issuable pursuant to deferred stock units.

 

(5)

The shares of Class C common stock shown as beneficially owned by Mr. Grain include 6,147 shares of Class C common stock issuable pursuant to deferred stock units that will vest as of or within 60 days after April 28, 2022.

 

(6)

The shares of Class C common stock shown as beneficially owned by Mr. Green include 272,736 shares of Class C common stock that Mr. Green may acquire upon the exercise of vested stock options and 4,255 shares of Class C common stock that Mr. Green will acquire upon vesting of restricted stock units as of or within 60 days after April 28, 2022.

 

(7)

The shares of Class C common stock shown as beneficially owned by Mrs. Kullman include 272,736 shares of Class C common stock that Mrs. Kullman may acquire upon the exercise of vested stock options, 1,065 shares of Class C common stock that Mrs. Kullman will acquire upon vesting of restricted stock units as of or within 60 days after April 28, 2022 and 43,207 shares of Class C common stock issuable pursuant to deferred stock units that have vested or will vest as of or within 60 days after April 28, 2022.

 

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Table of Contents
                   
                  

Compensation

of Executive Officers

 

Report of

the Audit Committee

 

Security Ownership of Certain Beneficial Owners and

Management

  Transactions With Related Persons   Questions and Answers About the Annual Meeting   Additional Information   Annex A   Annex B   Annex C                   
                   

 

(8)

The shares of Class C common stock shown as beneficially owned by Ms. Vojvodich Radakovich include 66,024 shares of Class C common stock that Ms. Vojvodich Radakovich either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days after April 28, 2022 and 4,255 shares of Class C common stock that Ms. Vojvodich Radakovich will acquire upon vesting of restricted stock units as of or within 60 days after April 28, 2022.

 

(9)

The shares shown as beneficially owned by all directors and executive officers as a group include 611,496 shares of Class C common stock that members of the group either may acquire upon the exercise of vested stock options or will be able to acquire upon the exercise of stock options vesting as of or within 60 days of April 28, 2022, 13,830 shares of Class C common stock that members of the group will acquire upon vesting of restricted stock units as of or within 60 days of April 28, 2022 and 65,606 shares of Class C common stock issuable to members of the group pursuant to deferred stock units that have vested or will vest as of or within 60 days after April 28, 2022.

 

(10)

The information concerning the SLD Trust is based on a Schedule 13G/A filed with the SEC on February 10, 2022 by the SLD Trust, Susan L. Dell, Hexagon Trust Company (the “Trustee”) and Marc R. Lisker (collectively, the “SLD Filing Persons”). The SLD Filing Persons report that, as of December 31, 2021, the SLD Trust is the record holder of the 32,390,896 shares of Class A common stock shown as beneficially owned, and that each of the SLD Trust, Ms. Dell, the Trustee and Mr. Lisker had shared voting power and shared dispositive power over 32,390,896 shares of Class A common stock. The SLD Filing Persons further report that Ms. Dell is the beneficiary of the Trust, the Trustee is the trustee of the Trust and each of Ms. Dell and the Trustee may be deemed to beneficially own the securities beneficially owned by the SLD Trust. The SLD Filing Persons also report that Mr. Lisker is the President of, and may be deemed to beneficially own the securities beneficially owned by, the Trustee. The address of each of the SLD Filing Persons is c/o Hexagon Trust Company, One Liberty Lane East, Hampton, New Hampshire 03842.

 

(11)

The information concerning the SLP stockholders is based on Amendment No. 3 to Schedule 13D filed with the SEC on July 1, 2021 and certain subsequent Form 4s filed by the SLP stockholders reporting that the SLP stockholders may be deemed to be the beneficial owners, in the aggregate, of 95,350,227 shares of Class B common stock. The shares of Class B common stock shown as beneficially owned by the SLP stockholders consist of 36,614,924 shares of Class B common stock owned of record by SL SPV-2, L.P., 37,587,060 shares of Class B common stock owned of record by Silver Lake Partners IV, L.P., 553,031 shares of Class B common stock owned of record by Silver Lake Technology Investors IV, L.P., 20,345,826 shares of Class B common stock owned of record by Silver Lake Partners V DE (AIV), L.P. and 249,386 shares of Class B common stock owned of record by Silver Lake Technology Investors V, L.P. The shares of Class C common stock shown as beneficially owned by the SLP stockholders consist of 84,058 shares of Class C common stock owned of record by Silver Lake Group L.L.C. The general partner of SL SPV-2, L.P. is SLTA SPV-2, L.P. and the general partner of SLTA SPV-2, L.P. is SLTA SPV-2 (GP), L.L.C. (“SLTA SPV GP”). The SLP stockholders report that the general partner of each of Silver Lake Partners IV, L.P. and Silver Lake Technology Investors IV, L.P. is Silver Lake Technology Associates IV, L.P., and the general partner of Silver Lake Technology Associates IV, L.P. is SLTA IV (GP), L.L.C. (“SLTA IV”). The SLP stockholders further report that the general partner of each of Silver Lake Partners V DE (AIV), L.P. and Silver Lake Technology Investors V, L.P. is Silver Lake Technology Associates V, L.P., and the general partner of Silver Lake Technology Associates V, L.P. is SLTA V (GP), L.L.C. (“SLTA V”). The SLP stockholders also report that the managing member of each of SLTA SPV GP, SLTA IV and SLTA V is Silver Lake Group, L.L.C. and that Silver Lake Group, L.L.C. may be deemed to have beneficial ownership of the securities held by the SLP stockholders. The SLP stockholders have advised that the managing members of Silver Lake are Egon Durban, Kenneth Hao, Gregory Mondre and Joseph Osnoss. The address of each of the SLP stockholders and entities named above is 2775 Sand Hill Road, Suite 100, Menlo Park, California 94025.

 

(12)

The information concerning Dodge & Cox is based on a Schedule 13G/A filed with the SEC on February 14, 2022. Dodge & Cox reports that, as of December 31, 2021, of the shares of Class C common stock shown as beneficially owned, it had sole voting power over 31,874,681 shares and sole dispositive power over 33,476,762 shares and that Dodge & Cox Stock Fund, an investment company registered under the Investment Company Act of 1940, had an interest in 20,046,917 of the shares. The address of Dodge & Cox is 555 California Street, 40th Floor, San Francisco, California 94104.

 

(13)

The information concerning BlackRock, Inc. is based on a Schedule 13G/A filed with the SEC on February 1, 2022. BlackRock, Inc. reports that, as of December 31, 2021, of the shares of Class C common stock shown as beneficially owned, it had sole voting power over 16,417,681 shares and sole dispositive power over 20,380,718 shares. BlackRock, Inc. reports that it is the parent holding company of subsidiaries identified in the Schedule 13G/A that hold shares of the Class C common stock reported in the Schedule 13G/A. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.

 

(14)

The information concerning The Vanguard Group is based on a Schedule 13G/A filed with the SEC on February 9, 2022. The Vanguard Group reports that, as of December 31, 2021, of the shares of Class C common stock shown as beneficially owned, it had shared voting power over 259,559 shares, sole dispositive power over 16,599,195 shares and shared dispositive power over 597,377 shares. The Vanguard Group, Inc. reports that its clients, including investment companies registered under the Investment Company Act of 1940 and other managed accounts, have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities it reports as beneficially owned. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.

 

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Transactions With Related Persons

 

 

Policy for Review and Approval of Transactions With Related Persons

The Audit Committee, in accordance with its charter and with a written policy adopted by the Board of Directors, is charged with the responsibility to review and approve any transactions with related persons.

Under our policy, such a transaction, which we refer to as a related person transaction, encompasses any of the following transactions, arrangements or relationships:

 

   

any transaction, arrangement or relationship in an amount exceeding $120,000 in which Dell Technologies or any of its subsidiaries is a participant and in which a “related person” has a direct or indirect material interest within the meaning of Item 404 of the SEC’s Regulation S-K and that would be required to be disclosed by Dell Technologies in its SEC filings under Item 404;

 

   

any transaction, arrangement or relationship constituting a “related party transaction” for purposes of NYSE rules; and

 

   

any other transaction, arrangement or relationship (1) in which Dell Technologies or any of its subsidiaries is a participant, (2) which might potentially give rise to a conflict of interest and (3) which the Audit Committee determines it would be advisable, and in the best interests of Dell Technologies and its stockholders, to review and approve in accordance with the policy.

For purposes of the policy, a “related person” is a director (including a director nominee) or executive officer of Dell Technologies, a person known by us to be the beneficial owner of more than 5% of any class of our voting securities at the time of the occurrence or existence of the transaction, or an immediate family member (as defined in Item 404) of any of the foregoing persons.

In determining whether to approve a related person transaction, the Audit Committee is required to consider, among other factors, the following factors to the extent relevant to the transaction:

 

   

whether the terms are fair to Dell Technologies or its subsidiary and on the same basis that would apply if the transaction did not involve a related person;

 

   

whether there are business reasons for Dell Technologies or its subsidiary to enter into the transaction;

 

   

whether the transaction is consistent with the interests of Dell Technologies and its subsidiaries;

 

   

whether a transaction in which a director has a direct or indirect material interest would impair the independence of a non-employee director under NYSE and SEC standards or, to the extent applicable, the director’s status as a “non-employee director” pursuant to Rule 16b-3 under the Exchange Act; and

 

   

whether the transaction would present an improper conflict of interest for any director or executive officer, taking into account the size of the transaction, the overall financial position of the director, executive officer or other related person, the direct or indirect nature of the interest in the transaction of the director, executive officer or other related person, the ongoing nature of any proposed relationship, and any other factors the Audit Committee deems relevant.

Related persons referred to in the following description of certain relationships and transactions include the following persons based on their beneficial ownership of more than 5% of a class of our outstanding common stock during Fiscal 2022, or their affiliates or other related entities: Michael S. Dell; the MD stockholders (as defined in Annex A to this proxy statement); the SLP stockholders (as defined in Annex A to this proxy statement); Dodge & Cox; BlackRock, Inc.; and The Vanguard Group. See “Security Ownership of Certain Beneficial Owners and Management” for information about the beneficial ownership of our outstanding common stock as of April 28, 2022 (except as otherwise indicated). Mr. Dell also serves as the Chairman and Chief Executive Officer of Dell Technologies.

Unless the context indicates otherwise, reference in this section to “we,” “us,” “our,” the “Company” and “Dell Technologies” means Dell Technologies Inc. and its consolidated subsidiaries and “VMware” means VMware, Inc. and its consolidated subsidiaries.

 

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Table of Contents
                   
                  

Compensation

of Executive Officers

 

Report of

the Audit Committee

 

Security Ownership of Certain Beneficial Owners and

Management

  Transactions With Related Persons   Questions and Answers About the Annual Meeting   Additional Information   Annex A   Annex B   Annex C                   
                   

 

Transactions With Michael S. Dell and Other Related Persons

Under a long-standing Dell Technologies policy, Mr. Dell is required to fly privately when traveling. Mr. Dell owns a private aircraft through a wholly-owned limited liability company. For Mr. Dell’s business flights, Dell Technologies leases the plane from the limited liability company and engages a third-party flight services company to act as its agent in operating the aircraft, providing flight personnel and performing other services. Dell Technologies pays the flight services company a fee attributable to Mr. Dell’s business travel on the aircraft and also pays monthly rent to the limited liability company that owns the aircraft. During Fiscal 2022, Dell Technologies paid approximately $1.0 million for Mr. Dell’s business travel through these arrangements. Mr. Dell directly pays all of the costs of operating the aircraft for all personal flights.

Mr. Dell reimburses Dell Technologies for costs related to his or his family’s personal security protection. Reimbursements for this purpose in Fiscal 2022 totaled approximately $1.7 million.

Entities affiliated with MSD Capital, L.P., the investment firm that exclusively manages the capital of Mr. Dell and his family, including portfolio companies of MSD Capital, L.P. or its affiliates, the Michael & Susan Dell Foundation and other entities affiliated with Mr. Dell, purchase products or services from Dell Technologies on standard commercial terms available to comparable unrelated customers. These transactions totaled approximately $1.6 million for products and services in Fiscal 2022.

Transactions With VMware

VMware Spin-off. On November 1, 2021, Dell Technologies completed the spin-off of all shares of common stock of VMware, Inc. that were beneficially owned by Dell Technologies or certain of its subsidiaries, by means of a special stock dividend of the VMware, Inc. shares to Dell Technologies stockholders of record as of the dividend record date. As a result of the spin-off, the businesses of VMware were separated from the businesses of Dell Technologies. The spin-off was effectuated pursuant to a Separation and Distribution Agreement, dated as of April 14, 2021, between Dell Technologies and VMware, Inc. As part of the transaction, VMware, Inc. paid a special cash dividend, pro rata, to each holder of VMware, Inc. common stock in an aggregate amount equal to $11.5 billion, of which Dell Technologies received $9.3 billion. Immediately after the completion of the spin-off, Mr. Dell beneficially owned approximately 36.9% of the issued and outstanding shares of Class A common stock of VMware, Inc., which was the sole class of VMware, Inc. common stock outstanding after the spin-off.

In connection with, and upon completion of the spin-off, Dell Technologies and VMware entered into a Commercial Framework Agreement, or CFA. The CFA provides a framework under which Dell Technologies and VMware will continue their commercial relationship after the spin-off. The CFA has an initial term of five years, with automatic one-year renewals occurring annually thereafter, subject to certain terms and conditions. Pursuant to the CFA, Dell Technologies will continue to act as a distributor of VMware’s standalone products and services and purchase such products and services for resale to end-user customers. Dell Technologies also will continue to integrate VMware’s products and services with Dell Technologies’ offerings and sell them to end users.

In addition, in connection with and upon completion of the spin-off, Dell Technologies or a subsidiary and VMware entered into additional agreements, including the following:

 

   

a Transition Services Agreement, or TSA, under which each party has agreed to provide the other with certain services for specified fees, as described below;

 

   

a Covenant Not to Sue and Release, under which each party has agreed on behalf of itself and its controlled affiliates not to sue the other party or its controlled affiliates, customers, resellers, channel partners or distributors for infringement of such party’s patents that existed as of the date of the spin-off closing as they relate to products available at the time of the closing;

 

   

an Amendment and Termination of 2007 Intellectual Property Agreement, under which VMware and EMC Corporation, a wholly-owned subsidiary of Dell Technologies, terminated the specified intellectual property agreement and all licenses and rights set forth in such intellectual property agreement relating to the parties’ patents, and agreed that other intellectual property licenses and rights would survive for purposes set forth in the new agreement; and

 

   

a Tax Matters Agreement, which governs the respective rights and obligations of Dell Technologies and VMware, both for pre-spin-off periods and post spin-off periods, regarding income and other taxes, and related matters, including tax liabilities and benefits, attributes, and returns.

 

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Table of Contents
                   
                  

Compensation

of Executive Officers

 

Report of

the Audit Committee

 

Security Ownership of Certain Beneficial Owners and

Management

  Transactions With Related Persons   Questions and Answers About the Annual Meeting   Additional Information   Annex A   Annex B   Annex C                   
                   

 

Tax Matters. In connection with the spin-off, Dell Technologies and VMware agreed to terminate the tax sharing agreement as amended on December 30, 2019, referred to together with the Tax Matters Agreement as the Tax Agreements. Net payments received from VMware pursuant to the Tax Agreements were $36 million during Fiscal 2022 and related to VMware’s portion of federal income taxes on Dell Technologies’ consolidated tax return as well as state tax payments for combined states. The timing of the tax payments due to and from the other party is governed by the Tax Agreements. VMware’s portion of the mandatory one-time transition tax on accumulated earnings of foreign subsidiaries, or the Transition Tax, is governed by a letter agreement between VMware and Dell Technologies entered into on April 1, 2019.

As a result of the activity under the Tax Agreements with VMware, amounts due from VMware were $621 million as of January 28, 2022 and primarily related to VMware’s estimated tax obligation resulting from the Transition Tax. Dell Technologies expects VMware to pay the remainder of its Transition Tax over a period of four years.

Upon completion of the spin-off, Dell Technologies recorded net income tax indemnification receivables from VMware related to certain income tax liabilities for which Dell Technologies is jointly and severally liable, but for which it is indemnified by VMware under the Tax Matters Agreement. The amounts that VMware may be obligated to pay Dell Technologies could vary depending on the outcome of certain unresolved tax matters, which may not be resolved for several years. The net receivable as of January 28, 2022 was $144 million.

Commercial Transactions. Dell Technologies and VMware engage in the following ongoing commercial transactions:

 

   

Pursuant to original equipment manufacturer and reseller arrangements, Dell Technologies integrates or bundles VMware’s products and services with Dell Technologies’ products and sells them to end-users. Dell Technologies also acts as a distributor, purchasing VMware’s standalone products and services for resale to end-user customers. Where applicable, costs under these arrangements are presented net of rebates received by Dell Technologies.

 

   

Dell Technologies procures products and services from VMware for its internal use.

 

   

Dell Technologies sells and leases products and sells services to VMware.

 

   

Dell Technologies and VMware also enter into joint marketing, sales, and branding arrangements, for which both parties may incur costs.

 

   

Dell Financial Services and its affiliates, referred to as DFS, provide financing to certain of VMware’s end users. Upon acceptance of the financing arrangement by both VMware’s end users and DFS, DFS recognizes amounts due to related parties on Dell Technologies’ consolidated statements of financial position. Associated financing fees are recorded to net revenue on the consolidated statements of income.

 

   

Dell Technologies and VMware enter into agreements to collaborate on technology projects in which one party pays the corresponding party for services or the reimbursement of costs.

 

   

Dell Technologies provides support services and support from Dell Technologies personnel to VMware in certain geographic regions where VMware does not have an established legal entity. These employees, or seconded employees, are managed by VMware but Dell Technologies incurs the costs for these services. The costs incurred by Dell Technologies on VMware’s behalf to these employees are charged to VMware.

 

   

In accordance with the TSA entered into in connection with and upon completion of the spin-off, Dell Technologies and VMware provide the other party various support services, including investment advisory services, certain support services from Dell Technologies personnel, and other transitional services, for specified fees.

For Fiscal 2022, Dell Technologies recorded the following amounts on its statements of consolidated income related to its commercial transactions with VMware: net revenue of $200 million from sales and leases of products and services to VMware; and total expense of $4,005 million, consisting of cost of net revenue of $4,064 million related to the purchase of VMware products and services for resale, offset by net expense of $(59) million related to the purchase of VMware products and services for internal use, consideration received from VMware for joint marketing, sales, and branding, consideration received from VMware for seconded employees and collaborative technology and other projects, and consideration received under the TSA arrangement with VMware.

As of January 28, 2022, Dell Technologies recorded the following amounts in its statements of consolidated financial position related to both commercial transactions and tax matters: $131 million due from VMware, net, current; $710 million due from VMware, net, non-current, consisting of the non-current portion of net receivables from VMware under the Tax Agreements; $1,414 million due to VMware, current, which includes amounts due to VMware that are generally settled in cash within 60 days of each quarter-end; and $2,571 million in other current assets and $2,311 million in other non-current assets, both representing deferred costs related to VMware products and services for resale.

 

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Table of Contents
                   
                  

Compensation

of Executive Officers

 

Report of

the Audit Committee

 

Security Ownership of Certain Beneficial Owners and

Management

  Transactions With Related Persons   Questions and Answers About the Annual Meeting   Additional Information   Annex A   Annex B   Annex C                   
                   

 

Transactions With Other Principal Stockholders

Entities affiliated with Silver Lake, including portfolio companies of the SLP stockholders or their affiliates, purchase products or services from Dell Technologies on standard commercial terms available to comparable unrelated customers. These transactions totaled approximately $3.9 million for products and services in Fiscal 2022. In addition, Dell Technologies purchases products and services from these entities in the ordinary course of business and reimburses certain expenses under the SLP Stockholders Agreement, as described below. These transactions totaled approximately $83.7 million in Fiscal 2022.

Dodge & Cox purchases products or services from Dell Technologies on standard commercial terms available to comparable unrelated customers. These transactions totaled approximately $0.8 million for products and services in Fiscal 2022.

BlackRock, Inc. and certain of its affiliates purchase products or services from Dell Technologies on standard commercial terms available to comparable unrelated customers. These transactions totaled approximately $7.3 million for products and services in Fiscal 2022.

The Vanguard Group purchases products or services from Dell Technologies on standard commercial terms available to comparable unrelated customers. These transactions totaled approximately $69.3 million for products and services in Fiscal 2022.

Relationships and Transactions Under Other Stockholder Agreements and Arrangements

In connection with the Company’s Class V transaction, the Company entered into new stockholders agreements and amended and restated some existing stockholders agreements and other arrangements with the MD stockholders, the SLP stockholders, and the Company’s executive officers, among others. For more information about the Class V transaction, see “Proposal 1 – Election of Directors – Class C Vote for Group IV Director.”

MD Stockholders Agreement; SLP Stockholders Agreement – Effective as of December 25, 2018, Dell Technologies entered into the MD Stockholders Agreement and the SLP Stockholders Agreement described under “Proposal 1 – Election of Directors – Stockholder Arrangements.” The MD stockholders are parties to the SLP Stockholders Agreement solely with respect to the specified provisions relating to transfers of securities, certain representations, and provisions relating to certain tax matters. The Sponsor Stockholders Agreements contain provisions relating to rights, obligations and agreements of the parties as the owners of Dell Technologies common stock, including provisions relating to the composition of the Board of Directors and its committees and provisions relating to transfers of Dell Technologies securities.

Under the Sponsor Stockholders Agreements, as described under “Proposal 1 – Election of Directors – Stockholder Arrangements,” each of the MD stockholders and the SLP stockholders have specified rights to nominate directors and to have their nominees serve on Board committees and have specified obligations to vote for director nominees.

The SLP Stockholders Agreement permits the SLP stockholders to terminate certain governance-related provisions of the agreement, including the director nomination and support obligations, in their sole discretion at any time at which they beneficially own less than 5% of the issued and outstanding shares of Class C common stock (after giving effect to the conversion of all shares of common stock owned by the SLP stockholders into Class C common stock). The MD Stockholders Agreement permits the MD stockholders to terminate the agreement if the SLP Stockholders Agreement is terminated. The MD Stockholders Agreement also provides that any termination, amendment or waiver of certain of Dell Technologies’ rights under the agreement will require the consent of each Group I director.

Under the Sponsor Stockholders Agreements, the MD stockholders and the SLP stockholders are subject to provisions that, with specific exceptions, restrict the sale or other transfer of “DTI securities,” which consist of outstanding shares of the Class A common stock, Class B common stock, Class C common stock and (if and when issued) Class D common stock, any equity or debt securities of Dell Technologies exercisable or exchangeable for, or convertible into, our common stock, or any option, warrant or other right to acquire any of our common stock or such equity or debt securities.

The Sponsor Stockholders Agreements provide for a renunciation of corporate opportunities presented to any director or officer of Dell Technologies or any of its subsidiaries who is also a director, officer, employee, managing director or other affiliate of (1) MSD Partners L.P. or its affiliates or other MSD Partners stockholders (as defined in Annex A to this proxy statement) (other than Michael Dell for so long as he is an executive officer of Dell Technologies or any specified subsidiary), under the MD Stockholders

 

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Table of Contents
                   
                  

Compensation

of Executive Officers

 

Report of

the Audit Committee

 

Security Ownership of Certain Beneficial Owners and

Management

  Transactions With Related Persons   Questions and Answers About the Annual Meeting   Additional Information   Annex A   Annex B   Annex C                   
                   

 

Agreement, or (2) Silver Lake Management Company III, L.L.C., Silver Lake Management Company IV, L.L.C. and their respective affiliated management companies and investment vehicles, including the SLP stockholders, under the SLP Stockholders Agreement.

Under the MD Stockholders Agreement, Dell Technologies is obligated, and required to cause specified subsidiaries, to pay directly or reimburse the ongoing reasonable out-of-pocket costs and expenses incurred by the MD stockholders in connection with their investment in the Company, including fees, expenses and reasonable out-of-pocket disbursements of independent accountants, outside legal counsel, consultants and other independent professionals and organizations and other services retained by the MD stockholders or any of their affiliates. In Fiscal 2022, Dell Technologies paid directly or reimbursed a total of $3.3 million of costs and expenses incurred by the MD stockholders or their affiliates pursuant to the MD Stockholders Agreement.

Under the SLP Stockholders Agreement, Dell Technologies is obligated, and required to cause specified subsidiaries, to pay directly or reimburse (1) the ongoing reasonable out-of-pocket costs and expenses incurred by the SLP stockholders in connection with their investment in Dell Technologies, including fees, expenses and reasonable out-of-pocket disbursements of independent accountants, outside legal counsel, consultants and other independent professionals and organizations and other services retained by the SLP stockholders or any of their affiliates, (2) the reasonable out-of-pocket costs and expenses of the SLP stockholders or their affiliates for their “value creation” personnel and/or employees, to the extent that Dell Technologies has requested such personnel and/or employees to provide such services to Dell Technologies, and (3) the costs and expenses for such “value creation” personnel and/or employees. In Fiscal 2022, Dell Technologies paid directly or reimbursed a total of approximately $0.09 million of costs and expenses incurred by the SLP stockholders or their affiliates pursuant to the SLP Stockholders Agreement.

Dell Technologies is obligated, and required to cause specified subsidiaries, subject to certain exceptions, to indemnify the MD stockholders and specified affiliated persons under the MD Stockholders Agreement, and the SLP stockholders and specified affiliated persons under the SLP Stockholders Agreement against all losses and liabilities incurred by the indemnified persons that arise out of any action, cause of action, suit, arbitration or claim arising directly or indirectly out of, or in any way relating to, ownership of securities of Dell Technologies, or the ability to control or influence Dell Technologies or its subsidiaries, by the MD stockholders or their affiliated persons or the SLP stockholders or their affiliated persons, as applicable.

Registration Rights Agreement – Dell Technologies is a party to a Second Amended and Restated Registration Rights Agreement, dated as of December 25, 2018, as amended, referred to as the Registration Rights Agreement, with the MD stockholders, the SLP stockholders, and the management stockholders party thereto, among others. The Registration Rights Agreement provides that the stockholder parties thereto, their affiliates and certain of their transferees have the right, under certain circumstances and subject to certain restrictions, to require Dell Technologies to register for resale the shares of the Class C common stock (including shares of Class C common stock issuable upon any conversion of the Class A common stock, the Class B common stock and the Class D common stock) to be sold by them. The parties to the Registration Rights Agreement have entered into amendments to the Registration Rights Agreement to extend the deadline, most recently to June 30, 2022, by which Dell Technologies is required to effect such a registration. The deadline may be extended for additional periods of up to three months each upon the written consent of the Company and the SLP stockholders.

Management Stockholders Agreement – Dell Technologies is a party to a Second Amended and Restated Management Stockholders Agreement, dated as of December 25, 2018, referred to as the Management Stockholders Agreement, with the MD stockholders, the SLP stockholders and the management stockholders parties thereto. The Management Stockholders Agreement imposes restrictions on the transfer of certain Dell Technologies securities held by the management stockholders and, among other requirements, obligates the management stockholders to refrain from entering into specified types of voting arrangements with respect to such securities.

 

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Table of Contents

 

Questions and Answers About the Annual Meeting

 

 

The following summary answers some questions you may h