DEF 14A 1 proxy2019.htm DEF 14A Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.    )
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[   ]  Soliciting Material Pursuant to Section 240.14a-12

QUALCOMM INCORPORATED

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 (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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January 24, 2019

Dear Fellow Stockholder:
You are cordially invited to attend Qualcomm’s 2019 Annual Meeting of Stockholders (the Annual Meeting) on Tuesday, March 12, 2019. The meeting will begin promptly at 9:30 a.m. Pacific Time at the Irwin M. Jacobs Qualcomm Hall, 5775 Morehouse Drive, San Diego, California 92121. I invite you to arrive early at 8:30 a.m. to preview our product displays. We will begin the Annual Meeting with a discussion and vote on the matters set forth in the Notice of Annual Meeting of Stockholders, followed by a presentation on Qualcomm’s fiscal 2018 performance.
Whether or not you plan to attend the Annual Meeting, please vote as soon as possible. As an alternative to voting in person at the Annual Meeting, you may vote via the Internet, by telephone, or if you receive a paper proxy card in the mail, by mailing the completed proxy card. Voting by any of these methods will ensure your representation at the Annual Meeting.
Your vote is very important to us. I urge you to vote as our Board of Directors recommends.
Thank you for your support and continued interest in Qualcomm. I look forward to seeing you in San Diego at the Irwin M. Jacobs Qualcomm Hall on Tuesday, March 12, 2019.




Sincerely,

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Steve Mollenkopf
Chief Executive Officer




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5775 Morehouse Drive
San Diego, California 92121-1714

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On March 12, 2019
To the Stockholders of QUALCOMM Incorporated:
NOTICE IS HEREBY GIVEN that the 2019 Annual Meeting of Stockholders (Annual Meeting) of QUALCOMM Incorporated, a Delaware corporation (the Company), will be held at the Irwin M. Jacobs Qualcomm Hall, 5775 Morehouse Drive, San Diego, California 92121, on Tuesday, March 12, 2019 at 9:30 a.m. Pacific Time for the following purposes:

1.
To elect 12 directors to hold office until the next annual meeting of stockholders and until their respective successors have been elected and qualified.
2.
To ratify the selection of PricewaterhouseCoopers LLP as our independent public accountants for our fiscal year ending September 29, 2019.
3.
To approve, on an advisory basis, our executive compensation.
4.
To transact such other business as may properly come before stockholders at the Annual Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on January 14, 2019 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting and at any adjournment or postponement thereof.

By Order of the Board of Directors,

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Donald J. Rosenberg
Executive Vice President,
General Counsel and Corporate Secretary
San Diego, California
January 24, 2019






TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

i


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

ii


PROXY OVERVIEW
This proxy overview is a summary of information that you will find throughout this proxy statement. As this is only an overview, we encourage you to read the entire proxy statement for more information about these topics prior to voting.
2019 ANNUAL MEETING OF STOCKHOLDERS (ANNUAL MEETING)
 
 
 
 
 
Date and Time
 
March 12, 2019
9:30 a.m. Pacific Time
Location
 
Irwin M. Jacobs Qualcomm Hall
5775 Morehouse Drive, San Diego, California 92121
Record Date
 
January 14, 2019
Voting
 
Stockholders of record as of the record date may vote via the Internet at www.proxyvote.com; by telephone at 1-800-690-6903; by completing and returning their proxy card; or in person at the Annual Meeting (see “Voting Methods” section on page 3).
Date of First Distribution
of Proxy Materials
 
January 24, 2019
VOTING MATTERS AND BOARD RECOMMENDATIONS
 
 
 
 
 
The Board of Directors unanimously recommends that you vote as follows:
Proposal
  
 
 
Board Recommendation
 
Page Reference
PROPOSAL 1
 
Election of Directors
 
FOR each Nominee
 
14
PROPOSAL 2
 
Ratification of the selection of PricewaterhouseCoopers LLP as our independent public accountants for our fiscal year ending September 29, 2019
 
FOR
 
21
PROPOSAL 3
 
Approval, on an advisory basis, of our executive compensation
 
FOR
 
23


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DIRECTOR NOMINEES (SEE PAGE 14)
 
 
 
 
 
Name
 
Age
 
Director
Since
 
Occupation / Experience
 
Independent 
Barbara T. Alexander
 
70
 
2006
 
Current: Independent Consultant. Prior experience includes serving as a senior advisor for UBS, managing director of Dillon Read & Co., Inc., and managing director of Salomon Brothers.
 
ü
Mark Fields
 
57
 
2018
 
Current: Senior Advisor at TPG Capital LP. Prior experience includes serving as President and CEO of Ford Motor Company.
 
ü
Jeffrey W. Henderson (1)
 
54
 
2016
 
Current: Advisory Director to Berkshire Partners LLC. Prior experience includes serving as CFO of Cardinal Health Inc.
 
ü
Ann M. Livermore
 
60
 
2016
 
Current: Director of Hewlett Packard Enterprise Company and United Parcel Services. Prior experience includes serving as Executive Vice President of the Enterprise Business at Hewlett-Packard Company.
 
ü
Harish Manwani
 
65
 
2014
 
Current: Global Executive Advisor to Blackstone Private Equity group. Prior experience includes serving as COO of Unilever PLC.
 
ü
Mark D. McLaughlin
 
53
 
2015
 
Current: Vice Chairman of the Board of Palo Alto Networks, Inc. Prior experience includes serving as Chairman of the Board and CEO of Palo Alto Networks, Inc. and serving as President and CEO of VeriSign, Inc.
 
ü
Steve Mollenkopf
 
50
 
2013
 
Current: CEO of Qualcomm Incorporated.
 
 
Clark T. Randt, Jr.
 
73
 
2013
 
Current: President of Randt & Co. LLC. Prior experience includes serving as U.S. Ambassador to the People's Republic of China and as a partner at Shearman & Sterling, an international law firm.
 
ü
Francisco Ros
 
68
 
2010
 
Current: Founder and President of First International Partners, S.L. Prior experience includes serving as the Secretary of State of the Government of Spain and executive management and board positions in telecommunications companies.
 
ü
Irene B. Rosenfeld
 
65
 
2018
 
Current: Director of Qualcomm Incorporated. Prior experience includes Chairman and CEO of Mondelēz International, Inc., Chairman and CEO of Frito-Lay, and President of Kraft Foods North America.
 
ü
Neil Smit
 
60
 
2018
 
Current: Vice Chairman of Comcast Corporation. Prior experience includes serving as President and CEO of Comcast Cable Communications.
 
ü
Anthony J. Vinciquerra
 
64
 
2015
 
Current: Chairman of the Board and CEO of Sony Pictures Entertainment Inc. Prior experience includes serving as the President and CEO of FOX Networks Group.
 
ü
(1)    Chairman of the Board


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PROXY STATEMENT
In this document, the words “Qualcomm,” “the Company,” “we,” “our,” “ours” and “us” refer only to QUALCOMM Incorporated, a Delaware corporation, and its consolidated subsidiaries and not to any other person or entity.
MEETING INFORMATION
 
 
 
 
 
The Board of Directors (Board) of QUALCOMM Incorporated is soliciting your proxy for use at the Company’s 2019 Annual Meeting of Stockholders (Annual Meeting) to be held on Tuesday, March 12, 2019, at 9:30 a.m. Pacific Time and at any adjournment or postponement thereof. Admission to the meeting is restricted to stockholders of record as of January 14, 2019 (Record Date) and/or their designated representatives. All stockholders will be required to show valid picture identification. If your shares are in the name of your bank, broker or other holder of record, you will also need to bring evidence of your stock ownership, such as your most recent brokerage account statement or a copy of your voting instruction form. For security purposes, packages and bags may be inspected and you may be required to check these items. Please arrive early enough to allow yourself adequate time to clear security.
VOTING RIGHTS AND OUTSTANDING SHARES
 
 
 
 
 
Only holders of record of common stock at the close of business on the Record Date will be entitled to notice of and to vote at the Annual Meeting. At the close of business on the Record Date, we had 1,210,199,813 shares of common stock outstanding and entitled to vote. Each holder of record of common stock on the Record Date will be entitled to one vote for each share held on all matters to be voted upon. If you do not provide voting instruction on your proxy, your shares will be voted as described in the section “How Your Shares Will Be Voted” below. All votes will be counted by an independent inspector of election appointed for the Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes.
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS
 
 
 
 
 
We are furnishing proxy materials to our stockholders primarily via the Internet under rules adopted by the U.S. Securities and Exchange Commission (SEC), instead of mailing printed copies of those materials to each stockholder. On January 24, 2019, we commenced mailing to our stockholders (other than those who previously requested electronic delivery or a full set of printed proxy materials) a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including this proxy statement. The Notice of Internet Availability of Proxy Materials also provides instructions on how to access your proxy card to vote via the Internet.

This process is designed to expedite stockholders’ receipt of proxy materials, lower the cost of the Annual Meeting and help
conserve natural resources. If you received the Notice of Internet Availability of Proxy Materials and would prefer to receive
printed proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials via email unless you elect otherwise.

This proxy statement and our Annual Report on Form 10-K for fiscal year 2018 are available at http://www.qualcomm.com.
VOTING METHODS
 
 
 
 
 
If you are a stockholder with shares registered in your name, you may vote by one of the following four options depending on the method of delivery by which you received the proxy materials: 
Vote via the Internet. Go to the web address http://www.proxyvote.com and follow the instructions for Internet voting shown on the proxy card or the Notice of Internet Availability of Proxy Materials mailed to you or the instructions that you received by email.
Vote by Telephone. Dial 1-800-690-6903 and follow the instructions for telephone voting shown on the proxy card or the Notice of Internet Availability of Proxy Materials mailed to you or the instructions that you received by email.

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Vote by Proxy Card. Complete, sign, date and mail the proxy card in the envelope provided. If you vote via the Internet or by telephone, please do not mail your proxy card.
Vote in Person. Complete, sign and date a ballot at the Annual Meeting.
Even if you plan to attend the Annual Meeting in person, we encourage you to vote your shares in advance via the Internet, by telephone or by mailing in your proxy card.
If your shares are held by a bank, broker or other holder of record, in nominee name or otherwise, exercising fiduciary powers, you are the beneficial owner of those shares, which are commonly referred to as being held in “street name.” Most individual stockholders hold their shares in street name. If you are a beneficial owner, please follow the instructions you receive from your bank, broker or other holder of record. You may need to contact your bank, broker or other holder of record to determine whether you will be able to vote electronically via the Internet or by telephone.
PLEASE NOTE THAT IF YOU ARE A BENEFICIAL OWNER OF SHARES HELD IN STREET NAME, SINCE YOUR SHARES ARE HELD BY A BANK, BROKER OR OTHER HOLDER OF RECORD, IF YOU WISH TO VOTE AT THE ANNUAL MEETING YOU MUST FIRST OBTAIN A LEGAL PROXY ISSUED IN YOUR NAME FROM THE HOLDER OF RECORD. OTHERWISE, YOU WILL NOT BE PERMITTED TO VOTE IN PERSON AT THE MEETING.
HOW YOUR SHARES WILL BE VOTED
 
 
 
 
 
Your shares will be voted in accordance with your instructions. If you do not specify voting instructions on your proxy, the shares will be voted as set forth in the table below.
Proposal
 
 
 
Vote
 
Page Reference
PROPOSAL 1
 
Election of Directors
 
FOR each Nominee
 
14
PROPOSAL 2
 
Ratification of the selection of PricewaterhouseCoopers LLP as our independent public accountants for our fiscal year ending September 29, 2019
 
FOR
 
21
PROPOSAL 3
 
Approval, on an advisory basis, of our executive compensation
 
FOR
 
23
In the absence of instructions to the contrary, proxies will be voted in accordance with the judgment of the person exercising the proxy on any other matter properly presented at the Annual Meeting.
See the section entitled “Broker Non-Votes” as well as the “Required Vote and Board Recommendation” sections of the individual proposals for additional information.
VOTING RESULTS
 
 
 
 
 
We will publicly disclose voting results of the Annual Meeting within four business days by filing a Current Report on Form 8-K with the SEC, based on the tabulation of the independent inspector of election.
BROKER NON-VOTES
 
 
 
 
 
A “broker non-vote” occurs when a bank, broker, or other holder of record, in nominee name or otherwise, exercising fiduciary powers (typically referred to as being held in “street name”) submits a proxy for the Annual Meeting, but does not vote on a particular proposal because that holder does not have discretionary voting power with respect to that proposal and has not received voting instructions from the beneficial owner. Broker non-votes (like abstentions) will be counted as present for purposes of determining the presence of a quorum, but will have no effect on the outcome of the voting results. Under the rules that govern brokers who are voting with respect to shares held in street name, brokers have the discretion to vote those shares on routine matters, but not on non-routine matters. Routine matters include ratification of the

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selection of independent public accountants. Non-routine matters include, among others, the election of directors and advisory votes on executive compensation.
DETERMINATION OF QUORUM
 
 
 
 
 
The representation in person or by proxy of a majority of the outstanding shares of stock entitled to vote at the Annual Meeting constitutes a quorum. Under Delaware law, abstentions and broker non-votes are counted as present in determining whether the quorum requirement is satisfied.
REVOCABILITY OF PROXIES
 
 
 
 
 
If your shares are registered in your name, you may revoke your proxy and change your vote prior to the completion of voting at the Annual Meeting by:
submitting a valid, later-dated proxy card in a timely manner;
submitting a later-dated vote by telephone or through the Internet in a timely manner;
giving written notice of such revocation to the Company’s corporate secretary (at 5775 Morehouse Drive, N-585L, San Diego, California 92121-1714) prior to or at the Annual Meeting; or
attending and voting at the Annual Meeting (although attendance at the meeting will not by itself revoke a proxy).
If your shares are held in “street name” (i.e., held of record by a bank, broker or other holder of record) and you wish to revoke a proxy, you should contact your bank, broker or other holder of record and follow its procedures for changing your voting instructions. You also may vote in person at the Annual Meeting if you obtain a legal proxy from your bank, broker or other holder of record.
PROXY SOLICITATION
 
 
 
 
 
We will bear the entire cost of the solicitation of proxies, including the preparation, assembly, printing and mailing of the Notice of Internet Availability of Proxy Materials, this proxy statement, the proxy card and any additional information furnished to stockholders. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding in their names shares of common stock beneficially owned by others to forward to such beneficial owners. We may reimburse persons representing beneficial owners of common stock for their costs of forwarding solicitation materials to such beneficial owners. In addition, we have retained Morrow Sodali to act as a proxy solicitor in conjunction with the Annual Meeting. We have agreed to pay that firm $10,000, plus reasonable out-of-pocket expenses, for proxy solicitation services. Solicitation of proxies by mail may be supplemented by telephone, email, facsimile transmission, electronic transmission or personal solicitation by certain of our directors, officers or other employees. No additional compensation (other than reimbursement for expenses) will be paid to directors, officers or other employees for such services.
STOCKHOLDER PROPOSALS
 
 
 
 
 
The deadline for submitting a stockholder proposal for inclusion in our proxy materials for our 2020 Annual Meeting of Stockholders is September 26, 2019. Stockholder nominations for director that are to be included in our proxy materials under the proxy access provision of our Amended and Restated Bylaws (Bylaws) must be received no earlier than August 27, 2019 and no later than the close of business on September 26, 2019. Stockholder nominations for director and other proposals that are not to be included in such materials must be received no earlier than November 13, 2019 and no later than the close of business on December 13, 2019. Any such stockholder proposals or nominations for director must be submitted to our Corporate Secretary in writing at 5775 Morehouse Drive, N-585L, San Diego, California 92121-1714. Stockholders are advised to review our Bylaws, which contain additional requirements for submitting stockholder proposals and director nominations. See page 10 for further information.


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HOUSEHOLDING
 
 
 
 
 
The SEC allows companies and intermediaries (such as brokers) to implement a delivery procedure called “householding.” Under this procedure, multiple stockholders who reside at the same address will receive a single copy of our proxy materials, including the Notice of Internet Availability of Proxy Materials, unless one of the stockholders has notified us that they want to continue receiving multiple copies. This practice is designed to reduce duplicate mailings, and save printing and postage costs as well as natural resources. Householding for bank and brokerage accounts is limited to accounts within the same bank or brokerage firm. For example, if you and your spouse share the same last name and mailing address and you and your spouse each have two accounts containing Qualcomm stock at two different brokerage firms, your household will receive two copies of the our proxy materials, one from each brokerage firm. To reduce the number of duplicate sets of proxy materials your household receives, you may wish to enroll some or all of your accounts in our electronic delivery program at http://enroll.icsdelivery.com/qcom.
If you received a householded mailing this year and you would like to have a separate copy of our Notice of Internet Availability of Proxy Materials and proxy materials mailed to you, please submit your request to Broadridge ICS, either by calling toll-free 1-866-540-7095 or by writing to Broadridge ICS, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. They will promptly send additional copies of our Notice of Internet Availability of Proxy Materials and proxy materials upon receipt of such request. Once you have received notice from your bank or broker that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. Stockholders may revoke their consent at any time by contacting Broadridge ICS as provided above. Please note, however, that if you want to receive a paper proxy or voting instruction form or other proxy material for purposes of this year’s Annual Meeting, you should follow the instructions included in the Notice of Internet Availability that was sent to you. If you received multiple copies of the proxy materials and would prefer to receive a single copy in the future or if you would like to opt out of householding for future mailings, you may contact Broadridge ICS as provided above.
FINANCIAL INFORMATION
 
 
 
 
 
Attached as Appendix A is certain financial information from our Annual Report on Form 10-K for fiscal 2018 that we filed with the SEC on November 7, 2018. We have not undertaken any updates or revisions to such information since the date it was filed with the SEC. Accordingly, we encourage you to review Appendix A together with any subsequent information we have filed with the SEC and other publicly available information.
PERFORMANCE MEASUREMENT COMPARISON OF STOCKHOLDER RETURN
 
 
 
 
 
Attached as Appendix B is a graph that compares total stockholder return on our common stock from September 29, 2013 to September 30, 2018 to two indices, the Standard & Poor’s 500 Stock Index (S&P 500) and the NASDAQ-100 Index (NASDAQ-100).
CORPORATE DIRECTORY
 
 
 
 
 
Attached as Appendix C is a listing of our executive officers and members of our Board.

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Corporate Governance

CORPORATE GOVERNANCE
CODE OF ETHICS AND CORPORATE GOVERNANCE PRINCIPLES AND PRACTICES
 
 
 
 
 
The Board has adopted a Code of Ethics applicable to all of our employees, including our executive officers and employees of our subsidiaries, and members of our Board. Any amendments to, or waivers under, the Code of Ethics that are required to be disclosed by SEC rules will be disclosed within four business days of such amendment or waiver on our website at www.qualcomm.com under the “Corporate Governance” section of our “Investor Relations” page, which appears under the “Company” tab. To date, there have not been any waivers by us under the Code of Ethics.
The Board has also adopted Corporate Governance Principles and Practices, which include information regarding the Board’s policies that guide its governance practices, including the roles, responsibilities and composition of the Board, director qualifications, committee matters and stock ownership guidelines, among others.
The Code of Ethics and the Corporate Governance Principles and Practices are available on our website at http://www.qualcomm.com under the “Corporate Governance” section of our “Investor Relations” page.
BOARD LEADERSHIP STRUCTURE
 
 
 
 
 
Chairman of the Board
The Board appoints the Chairman of the Board (Chairman). The Chairman is not required to be an independent director. However, at all times when the Chairman is not an independent director, the Board shall have a “Lead Independent Director” who shall be an “independent” director, as described below. Currently, our Chairman is Jeffrey W. Henderson, who is an independent director.
The Chairman has the following responsibilities and authority:
Help set the overall leadership and strategic direction of the Company.
Help delineate, in consultation with the Chief Executive Officer and the Board, responsibilities of the Board and management.
Authorized to call special meeting of stockholders.
Preside at meetings of stockholders.
Authorized to call special meetings of the Board.
Preside at all meetings of the Board (unless conflicted on a matter).
In collaboration with the Chief Executive Officer and the Lead Independent Director (if one is appointed), develop Board meeting agendas and communicate with independent Board members to ensure that matters of interest are being included.
If an independent director, chair and set agendas for executive sessions of independent directors (unless conflicted on a matter).
With the Chief Executive Officer, represent the Board in outreach to key constituencies.
Work with the Lead Independent Director (if one is appointed) on investor outreach.
Together with the Lead Independent Director (if one is appointed), represent the Board in interactions and negotiations with any company making an acquisition proposal or proxy contest for control of the Board.
Evaluate the Chief Executive Officer’s performance, in coordination with the Governance Committee and the Compensation Committee.
Our charter documents and policies do not prevent our Chief Executive Officer from also serving as our Chairman. The Board evaluates its leadership structure and elects the Chairman and the Chief Executive Officer based on the criteria it deems to be appropriate and in the best interests of the Company and its stockholders, given the circumstances at the time of such election. While we have in the past had one person serve as Chairman and Chief Executive Officer, since March 2014, the positions have been held by separate individuals.

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Corporate Governance

Lead Independent Director
At all times when the Chairman is not an independent director, the Board shall have a Lead Independent Director who shall be an “independent” director. In the event the Chairman is an independent director and the Board elects not to have a Lead Independent Director, the Chairman shall have the responsibilities and authority (as applicable) of the Lead Independent Director set forth below. If the Board decides to elect a Lead Independent Director, at or before each annual meeting of the Board, which follows immediately after the annual meeting of stockholders, (i) the Governance Committee shall recommend the Board member who would serve as Lead Independent Director for the next term, and (ii) the Lead Independent Director shall be elected by a vote of the independent members of the Board. An individual shall serve as the Lead Independent Director for a one-year period, commencing with the annual meeting of the Board. In general, the Board expects that a Lead Independent Director will serve two consecutive terms, but the independent members of the Board may extend a Lead Independent Director’s length of service (on a year-by-year basis) up to four consecutive terms. No Lead Independent Director shall serve more than four consecutive terms.
The Lead Independent Director shall have the following responsibilities and authority:
Preside at all meetings of the Board at which the Chairman is not present.
In collaboration with the Chairman and the Chief Executive Officer, develop agendas for Board meetings, and communicate with independent Board members to ensure that matters of interest are being included on agendas for Board meetings.
Communicate with independent Board members and with management to affirm that appropriate briefing materials are being provided to Board members sufficiently in advance of Board meetings to allow for proper preparation and participation at such meetings.
Authorized, with the concurrence of at least one additional Board member, to call special meetings of the Board.
Lead investor outreach from an independent director perspective.
Together with the Chairman, represent the Board in interactions and negotiations with any company making an acquisition proposal or proxy contest for control of the Board.
Lead the Board in governance matters, coordinating with the Governance Committee.
Principally because our current Chairman is an independent director, who served alongside a Lead Independent Director during the first six months of his tenure as Chairman, the Board has elected not to fill the role of Lead Independent Director at this time.
BOARD MEETINGS, COMMITTEES AND ATTENDANCE
 
 
 
 
 
During fiscal 2018, the Board held twenty-two meetings. Board agendas include regularly scheduled sessions for the independent directors to meet without management present, and the Chairman of the Board leads those sessions. The Board delegates various responsibilities and authority to different Board committees. We have three standing Board committees: the Audit, Compensation and Governance committees. Committees regularly report on their activities and actions to the full Board. Committee assignments are re-evaluated annually and approved by the Board at an annual meeting of the Board that follows the annual meeting of stockholders, typically in March of each year. Each committee acts according to a written charter approved by the Board (and reviewed annually). Copies of each charter can be found on our website at www.qualcomm.com under the “Corporate Governance” section of our “Investor Relations” page as follows:
Name of Committee
    
Website Link
 
 
Audit Committee
    
https://investor.qualcomm.com/committee-details/audit-committee
 
 
Compensation Committee
    
https://investor.qualcomm.com/committee-details/compensation-committee
 
 
Governance Committee
    
https://investor.qualcomm.com/committee-details/governance-committee
 
 
The table below provides current committee membership information for each of the Board committees.

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Corporate Governance

 
Committees
Name
Audit
Compensation
Governance
Barbara T. Alexander
 
Chair
 
Mark Fields
X
 
 
Jeffrey W. Henderson*
Chair
 
 
Thomas W. Horton
 
 
X
Ann M. Livermore
 
 
X
Harish Manwani
 
X
 
Mark D. McLaughlin
 
X
 
Steve Mollenkopf
 
 
 
Clark T. Randt, Jr.
 
 
Chair
Francisco Ros
 
 
X
Irene B. Rosenfeld
 
X
 
Neil Smit
X
 
 
Anthony J. Vinciquerra
X
 
 
Number of Committee Meetings Held in Fiscal 2018
11
10
16
* Chairman of the Board

The Audit Committee. The Audit Committee meets at least quarterly with our management and independent public accountants to review the results of the annual integrated audit and quarterly reviews of our consolidated financial statements and to discuss our financial statements and earnings releases. The Audit Committee selects, engages, oversees and evaluates the qualifications, performance and independence of our independent public accountants, reviews the plans and results of internal audits, reviews evaluations by management and the independent public accountants of our internal control over financial reporting and the quality of our financial reporting, and oversees our IT/cybersecurity programs and procedures, among other functions. All of the members of the Audit Committee are independent directors within the meaning of Rule 5605 of the NASDAQ Stock Market LLC (NASDAQ Rule 5605) and Rule 10A-3(b)(1)(ii) of the Securities Exchange Act of 1934, as amended, and Messrs. Henderson, Smit and Vinciquerra are audit committee financial experts as defined by the SEC.
The Compensation Committee. The Compensation Committee determines compensation levels for the Chief Executive Officer, the other executive officers and directors, administers and approves stock offerings under our employee stock purchase and long-term incentive plans, reviews our employee compensation and talent management policies and practices, administers our incentive recoupment policy, reviews our workforce management policies, programs and initiatives focusing on diversity and inclusion, and reviews executive officer development and succession planning. All of the members of the Compensation Committee are independent directors within the meaning of NASDAQ Rule 5605.
The Governance Committee. The Governance Committee reviews, approves and oversees various corporate governance-related policies and procedures applicable to us, including emergency procedures (such as disaster recovery and security). The Governance Committee oversees our political activity and contributions to ensure consistency with our business objectives and public policy priorities, including reviewing our Political Contributions and Expenditures Policy annually and reviewing a report on our political contributions and expenditures no less than annually. The Governance Committee also reviews succession planning. In addition, the Governance Committee evaluates and recommends nominees, including stockholder nominees, for membership on the Board and its committees. All of the members of the Governance Committee are independent directors within the meaning of NASDAQ Rule 5605.
During fiscal 2018, each director attended at least 75% of the aggregate of the meetings of the Board and the committees on which he or she served and that were held during the period for which he or she was a Board or committee member, except for Mr. Smit, who attended 71% of such meetings. Mr. Smit joined the Board in June 2018 and was unable to attend two meetings due to commitments made prior to joining the Board.

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Corporate Governance

BOARD’S ROLE IN RISK OVERSIGHT
 
 
 
 
 
We do not view risk in isolation but consider risk as part of our regular evaluation of business strategy and business decisions. Assessing and managing risk is the responsibility of our management, which establishes and maintains risk management processes, including action plans and controls, to balance risk mitigation and opportunities to create stockholder value. It is management’s responsibility to anticipate, identify and communicate risks to the Board and/or its committees. The Board oversees and reviews certain aspects of our risk management efforts, either directly or through its committees. We approach risk management by integrating our strategic planning, operational decision making and risk oversight and communicating risks and opportunities to the Board. The Board commits extensive time and effort every year to discussing and agreeing upon our strategic plan, and it reconsiders key elements of the strategic plan as significant events and opportunities arise during the year. As part of the review of the strategic plan, as well as in evaluating events and opportunities that occur during the year, the Board and management focus on the primary success factors and risks for the Company.
While the Board has primary responsibility for oversight of our risk management, the Board’s standing committees support the Board by regularly addressing various risks in their respective areas of oversight. Specifically, the Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to our Enterprise Risk Management program, as well as risk management in the areas of financial reporting, internal controls and compliance with certain public reporting requirements. The Compensation Committee assists the Board in fulfilling its risk management oversight responsibilities with respect to risks arising from compensation policies and programs. The Governance Committee assists the Board in fulfilling its risk management oversight responsibilities with respect to risks related to corporate governance, succession planning and emergency procedures (including disaster recovery and security). Each of the committee chairs reports to the full Board at regular meetings concerning the activities of the committee, the significant issues it has discussed and the actions taken by the committee.
We believe that our leadership structure supports the risk oversight function of the Board. With our Chief Executive Officer serving on the Board, he promotes open communication between management and directors relating to risk. Additionally, each Board committee is comprised solely of independent directors, and all directors are actively involved in the risk oversight function.
DIRECTOR NOMINATIONS
 
 
 
 
 
Our Bylaws contain provisions that address the process (including required information and deadlines) by which a stockholder may nominate an individual to stand for election to the Board at our annual meeting of stockholders. In addition, the “proxy access” provisions of our Bylaws provide that, under certain circumstances, a stockholder or group of up to 20 stockholders may seek to include director nominees in our proxy statement if such stockholder or group of stockholders own at least 3% of our outstanding common stock continuously for at least the previous three years. The number of stockholder nominees appearing in the proxy statement for our annual meeting cannot exceed 20% of the number of directors to be elected. If 20% of the number of directors is not a whole number, the maximum number of stockholder nominees is rounded down to the next whole number. If the number of stockholder nominees exceeds 20%, one nominee from each nominating stockholder or group of stockholders, based on the order of priority provided by such nominating stockholder or group of stockholders, would be selected for inclusion in our proxy materials until the maximum number is reached. The order of priority among nominating stockholders or groups of stockholders would be determined based on the number (largest to smallest) of shares of our common stock held by such nominating stockholders or groups of stockholders. Each nominating stockholder or group of stockholders must provide the information required by our Bylaws, and each nominee must meet the qualifications required by our Bylaws. Requests to include stockholder-nominated candidates in our proxy materials for next year’s annual meeting must be received by the Corporate Secretary at our corporate offices at 5775 Morehouse Drive, N-585L, San Diego, California 92121-1714, no earlier than August 27, 2019 and no later than the close of business on September 26, 2019. Stockholders are advised to review our Bylaws, which contain additional requirements for submitting director nominees.
The Board has also adopted a formal policy concerning stockholder recommendations of Board candidates to the Governance Committee. This policy is set forth in our Corporate Governance Principles and Practices, which is available on our website at www.qualcomm.com under the “Corporate Governance” section of our “Investor Relations” page. Under this policy, the Governance Committee will review a reasonable number of candidates recommended by a single stockholder who has held over 1% of our common stock for over one year and who satisfies the notice, information and consent requirements set forth in our Bylaws. To recommend a nominee for election to the Board, a stockholder must submit his or

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Corporate Governance

her recommendation to the Corporate Secretary at our corporate offices at 5775 Morehouse Drive, N-585L, San Diego, California 92121-1714. A stockholder’s recommendation must be received by us within the time limits set forth above under “Stockholder Proposals.” A stockholder’s recommendation must be accompanied by the information with respect to the stockholder nominee as specified in the Bylaws, including among other things, the name, age, address and occupation of the recommended person, the proposing stockholder’s name and address, the ownership interests of the proposing stockholder and any beneficial owner on whose behalf the recommendation is being made (including the number of shares beneficially owned, any hedging, derivative, short or other economic interests and any rights to vote any shares), and any material monetary or other relationships between the recommended person and the proposing stockholder and/or the beneficial owners on whose behalf the recommendation is being made. The proposing stockholder must also provide evidence of owning the requisite number of shares of our common stock for over one year. Candidates so recommended will be reviewed using the same process and standards for reviewing Governance Committee nominees.
In evaluating director nominees, the Governance Committee considers the following factors:
The appropriate size of the Board;
Our needs with respect to the particular talents, experience and diversity of our directors;
The knowledge, skills and experience of nominees, including experience in technology, business, finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board;
Familiarity with national and international business matters;
Experience in political affairs;
Experience with accounting rules and practices;
Appreciation of the relationship of our business to the changing needs of society;
The nominee’s other commitments, including the other boards on which the nominee serves; and
The desire to balance the considerable benefit of continuity with the periodic injection of the fresh perspective provided by new members.
The Governance Committee’s goal is to assemble a board of directors that brings to us a diversity of perspectives and skills derived from high quality business and professional experience. In doing so, the Governance Committee also considers nominees with appropriate non-business backgrounds.
There are no stated minimum criteria for director nominees, although the Governance Committee considers the foregoing and may also consider such other factors as it may deem are in the best interests of the Company and its stockholders. The Governance Committee does, however, believe it appropriate for at least one, and preferably several, members of the Board to meet the criteria for an “audit committee financial expert” as defined by the SEC, and for a majority of the members of the Board to meet the definition of “independent director” under NASDAQ Rule 5605. The Governance Committee also believes that it is in the best interests of stockholders that at least one key member of our current management participates as a member of the Board. The Governance Committee identifies nominees by first evaluating the current members of the Board willing to continue their service. Current members of the Board with skills and experience that are relevant to our business and who are willing to continue their service are considered for re-nomination, balancing the value of continuity of service by existing members of the Board with that of obtaining a new perspective. If any member of the Board does not wish to continue to serve or if the Governance Committee or the Board decides not to re-nominate a member for election, and if the Board determines not to reduce the Board size as a result, the Governance Committee identifies the desired skills and experience of a new nominee based on the criteria above. Current members of the Governance Committee and Board are polled for suggestions as to individuals meeting the criteria of the Governance Committee. Research may also be performed to identify qualified individuals. We have, in the past, engaged third parties to assist in identifying and evaluating potential nominees.

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Corporate Governance

MAJORITY VOTING
 
 
 
 
 
Under our Bylaws, in an uncontested election, if any incumbent nominee for director receives a greater number of “withhold” votes (ignoring abstentions and broker non-votes) than votes cast “for” his or her election, the director shall promptly tender his or her resignation from the Board, subject to acceptance by the Board. In that event, the Governance Committee shall make a recommendation to the Board as to whether to accept or reject the tendered resignation or whether other actions should be taken. In making its recommendation, the Governance Committee will consider all factors it deems relevant, including, without limitation, the stated reasons why stockholders withheld votes from such director, the length of service and qualifications of such director, the director’s past contributions to us and the availability of other qualified candidates for director. The Governance Committee’s evaluation shall be forwarded to the Board to permit the Board to act on it no later than 90 days following the date of the annual meeting of stockholders. In reviewing the Governance Committee’s recommendation, the Board shall consider the factors evaluated by the Governance Committee and such additional information and factors as the Board believes to be relevant. If the Board determines that the director’s resignation is in the best interests of the Company and its stockholders, the Board shall promptly accept the resignation. We will publicly disclose the Board’s decision within four business days in a Current Report on Form 8-K, providing an explanation of the process by which the decision was reached and, if applicable, the reasons for not accepting the director’s resignation. The director in question will not participate in the Governance Committee’s or the Board’s considerations of the appropriateness of his or her continued service, except to respond to requests for information.
STOCK OWNERSHIP GUIDELINES
 
 
 
 
 
We adopted stock ownership guidelines for our directors and executive officers to help ensure that they each maintain an equity stake in the Company and, by doing so, appropriately link their interests with those of other stockholders. The guideline for executive officers is based on a multiple of the executive’s base salary, ranging from two to six times, with the size of the multiple based on the individual’s position with the Company. Only shares actually owned (as shares or as vested deferred stock units) count toward the requirement. Executives are required to achieve these stock ownership levels within five years of becoming an executive officer. Non-employee directors are required to hold a number of shares of our common stock with a value equal to five times the annual retainer for Board service paid to U.S. residents. Non-employee directors are required to achieve this ownership level within five years of joining the Board. In addition to the preceding ownership guidelines, all directors are expected to own shares of our common stock within one year of joining the Board.
COMMUNICATIONS WITH DIRECTORS
 
 
 
 
 
We have adopted a formal process for stockholder communications with the Board. This process is also set forth in our Corporate Governance Principles and Practices. Stockholders who wish to communicate to the Board should do so in writing to the following address:
[Name of Director(s) or Board of Directors]
Qualcomm Incorporated
Attn: General Counsel
5775 Morehouse Drive, N-585L
San Diego, California 92121-1714
Our General Counsel maintains records of all such communications (and the disposition of such communications as set forth below) and forwards those not deemed frivolous, threatening or otherwise inappropriate to the Board, or the appropriate Board committee or members of the Board.
ANNUAL MEETING ATTENDANCE
 
 
 
 
 
Our Corporate Governance Principles and Practices set forth a policy on director attendance at annual meetings. Directors are encouraged to attend absent unavoidable conflicts. All directors then in office planned to attend our last annual meeting on March 6, 2018; however, due to the adjournment to March 23, 2018, Ambassador Randt and Mr. Vinciquerra were unable to attend the annual meeting when it was reconvened.

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Corporate Governance

DIRECTOR INDEPENDENCE
 
 
 
 
 
The Board has determined that, except for Mr. Steve Mollenkopf, all of the members of the Board are independent directors within the meaning of NASDAQ Rule 5605.

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Proposal 1: Election of Directors

PROPOSAL 1: ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
 
 
 
 
 
Our Certificate of Incorporation (Certificate) and our Bylaws (Bylaws) provide that directors are to be elected at our annual meeting of stockholders to hold office until the next annual meeting of stockholders and until their respective successors are elected and qualified. Vacancies on the Board resulting from death, resignation, disqualification, removal or other causes may be filled by either the affirmative vote of the holders of a majority of the then-outstanding shares of common stock or by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum of the Board. Newly created directorships resulting from any increase in the number of directors may, unless the Board determines otherwise, be filled only by the affirmative vote of the directors then in office, even if less than a quorum of the Board. Any director elected as a result of a vacancy shall hold office for a term expiring at the next annual meeting of stockholders and until such director’s successor has been elected and qualified.
Our Certificate provides that the number of directors shall be fixed exclusively by resolutions adopted from time to time by the Board. The Board, upon recommendation of its Governance Committee, has set the number of directors at 12, effective as of the date of the Annual Meeting. Therefore, 12 directors will stand for election at the Annual Meeting to serve as directors until the 2020 annual meeting of stockholders.
In an uncontested election, our Bylaws provide that a director nominee will be elected only if he or she receives a majority
of the votes cast with respect to his or her election (that is, the number of shares voted “for” a director nominee must
exceed the number of “withhold” votes cast against that nominee). Abstentions and broker non-votes will each be counted
as present for purposes of determining the presence of a quorum but will have no effect on the vote. In an uncontested
election, if any nominee for director who is currently serving on the Board receives a greater number of “withhold” votes
than votes “for” his or her election, the director shall promptly tender his or her resignation from the Board, subject to
acceptance by the Board. The process that will be followed by the Board in that event is described above under the heading
“Majority Voting.”

The nominees receiving a majority of votes cast with respect to his or her election will be elected directors of the Company.
Shares of common stock represented by executed proxies will be voted, if authority to do so is not withheld, for the election
of the 12 nominees named below. Each person nominated for election has agreed to serve, if elected, and the Board has no reason to believe that any nominee will be unable to serve.
NOMINEES FOR ELECTION
 
 
 
 
 
BARBARA T. ALEXANDER
Age: 70 Director Since: 2006
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Ms. Alexander has been an independent consultant since February 2004. She was a senior advisor for UBS from October 1999 to January 2004 and a managing director of Dillon Read & Co., Inc. from January 1992 to September 1999. Prior to joining Dillon Read, Ms. Alexander was a managing director in the corporate finance department of Salomon Brothers. Ms. Alexander has been a director of Choice Hotels International, Inc. since February 2012. She previously served as a director of Allied World Assurance Company Holdings, Ltd. from August 2009 to August 2017 and KB Home from October 2010 to April 2014, and has served as a director of a number of other public companies throughout her career. Ms. Alexander holds B.S. and M.S. degrees in theoretical mathematics from the University of Arkansas.
We believe Ms. Alexander’s qualifications to serve on our Board include her significant financial and accounting experience. In addition, she has extensive experience serving on several other public company boards, including in most instances service on the compensation committee and/or the audit committee of those other boards, which provides valuable insights to our Board, including regarding risk management issues.


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Proposal 1: Election of Directors

MARK FIELDS
Age: 57 Director Since: 2018
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Mr. Fields has been a Senior Advisor at TPG Capital LP, a global alternative asset firm, since October 2017. Mr. Fields was President and Chief Executive Officer of Ford Motor Company from July 2014 to May 2017, and Chief Operating Officer from December 2012 to July 2014. Mr. Fields joined Ford in 1989 and served in various leadership positions throughout his tenure, including Executive Vice President and President, Americas; Executive Vice President and Chief Executive Officer, Ford of Europe and Premier Automotive Group (PAG); Chairman and Chief Executive Officer, PAG; and President and Chief Executive Officer, Mazda Motor Corporation. Mr. Fields served as a director of Ford Motor Company from July 2014 to May 2017 and IBM Corporation from March 2016 to April 2018. Mr. Fields holds an M.B.A. degree from Harvard University and a B.A. degree in Business Administration from Rutgers University.
We believe Mr. Fields’ qualifications to serve on our Board include his extensive operational experience in senior positions in the automotive industry, a key growth area for us, including leading complex global business organizations with large workforces and organizations pursuing emerging opportunities through expansion into adjacent areas, which brings valuable insights to our Board as well as provides a useful resource to our senior management. Our Board and senior management also benefit from Mr. Fields’ experience from serving on other public company boards.
JEFFREY W. HENDERSON
Age: 54 Director Since: 2016
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Mr. Henderson has been an Advisory Director to Berkshire Partners LLC, a private equity firm, since September 2015. He served as Chief Financial Officer of Cardinal Health Inc., a health care services company, from May 2005 to November 2014. Prior to joining Cardinal Health, Mr. Henderson held multiple positions at Eli Lilly and General Motors, including serving as President and General Manager of Eli Lilly Canada, Controller and Treasurer of Eli Lilly Inc., and in management positions with General Motors in Great Britain, Singapore, Canada and the U.S. Mr. Henderson has been a director of Halozyme Therapeutics, Inc. since August 2015, a director of FibroGen, Inc. since August 2015, and a director of Becton, Dickinson and Company since August 2018. Mr. Henderson holds a B.S. degree in electrical engineering from Kettering University and an M.B.A. degree from Harvard Business School.
We believe Mr. Henderson’s qualifications to serve on our Board include his financial and operational management experience, including his significant experience in international operations, which is a source of valuable insights to our Board. His experience in senior operational and financial management positions at companies that experienced significant growth and transformation, including into additional business areas, also provides a useful resource to our senior management. He has been designated as an audit committee financial expert.

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Proposal 1: Election of Directors

ANN M. LIVERMORE
Age: 60 Director Since: 2016
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Ms. Livermore served as Executive Vice President of the Enterprise Business at Hewlett-Packard Company (HP) from May 2004 to June 2011 and as Executive Vice President of HP Services from 2002 to May 2004. She joined HP in 1982 and served in a number of management and leadership positions across the company. Ms. Livermore has been a director of United Parcel Services, Inc. since November 1997 and Hewlett Packard Enterprise Company since November 2015. Ms. Livermore was a director of HP from June 2011 to November 2015. Ms. Livermore holds a B.A. degree in economics from the University of North Carolina, Chapel Hill and an M.B.A. degree from Stanford University.

We believe Ms. Livermore’s qualifications to serve on our Board include her extensive operational experience in senior positions, including leading complex global business organizations with large workforces. Her significant experience in the areas of technology, marketing, sales, research and development and business management provide valuable insights to our Board and also provide useful resources to our senior management. Our Board and senior management also benefit from Ms. Livermore’s experience from serving on other public company boards.
HARISH MANWANI
Age: 65 Director Since: 2014
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Mr. Manwani has been a Global Executive Advisor/Senior Operating Partner at Blackstone Private Equity Group since February 2015. Mr. Manwani was the Chief Operating Officer for Unilever PLC, a leading global consumer products company, from September 2011 to December 2014. He served as Unilever’s President, Asia, Africa, Middle East and Turkey, which was later extended to include Central and Eastern Europe, from April 2005 to August 2011. He served as Unilever’s President, Home & Personal Care, North America from March 2004 to April 2005. He served as Unilever’s President, Home & Personal Care, Latin America and as the Chairman of Unilever’s Latin America Advisory Council from April 2001 to March 2004. He served as Unilever’s Senior Vice President, Global Hair and Oral Care from June 2000 to April 2001. He joined Hindustan Unilever Limited as a management trainee in 1976 and subsequently held various general management positions of increasing responsibilities within Unilever globally. Mr. Manwani has been a director of Whirlpool Corporation since August 2011, Nielsen Holdings plc since January 2015, and Gilead Sciences, Inc. since May 2018. He previously served as the Non-Executive Chairman of Hindustan Unilever Limited from July 2005 to May 2018 and as a director of Pearson plc from October 2013 to May 2018. Mr. Manwani holds a B.Sc. honors degree in statistics and an M.M.S. degree in management studies, both from Mumbai University in India. He has also attended the Advanced Management Program at Harvard Business School.
We believe that Mr. Manwani’s qualifications to serve on our Board include his substantial management experience involving international operations, particularly in Asia. His executive management experience, particularly with respect to strategic planning and leadership of complex organizations, provides a valuable resource for our senior management. His experience on the boards of several other companies also brings valuable insights to our Board.

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Proposal 1: Election of Directors

MARK D. McLAUGHLIN
Age: 53 Director Since: 2015
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Mr. McLaughlin has been the Vice Chairman of the Board of Palo Alto Networks, Inc., a network security company, since June 2018. He served as Chairman of the Board and Chief Executive Officer of Palo Alto Networks from August 2016 to June 2018. He served as Chairman of the Board, President and Chief Executive Officer of Palo Alto Networks from April 2012 to August 2016. He joined Palo Alto Networks as President and Chief Executive Officer, and as a director, in August 2011 and became Chairman of the Board in April 2012. Mr. McLaughlin served as President and Chief Executive Officer and as a director of VeriSign, Inc., a provider of Internet infrastructure services, from August 2009 to August 2011 and as President and Chief Operating Officer from January 2009 to August 2009. Mr. McLaughlin served in various other management and leadership roles at VeriSign from February 2000 through November 2007 and provided consulting services to VeriSign from November 2008 to January 2009. Prior to joining VeriSign, Mr. McLaughlin was Vice President, Sales and Business Development at Signio Inc., an internet payments company acquired by VeriSign in February 2000. President Barack Obama appointed Mr. McLaughlin to serve on the National Security Telecommunications Advisory Committee (NSTAC) in January 2011 and to the position of Chairman of the NSTAC in November 2014. Mr. McLaughlin served as a director of Opower, Inc. from October 2013 to June 2016. Mr. McLaughlin holds a B.S. degree from the U.S. Military Academy at West Point and a J.D. from Seattle University School of Law.
We believe Mr. McLaughlin’s qualifications to serve on our Board include his operational and management experience at several technology companies. Mr. McLaughlin’s service on the National Security Telecommunications Advisory Committee, as well as his experience as Chief Executive Officer and a member of the board of directors of a network security company, provide him with significant knowledge regarding the operations and security of telecommunications systems and cybersecurity matters, which bring valuable insights to our Board.
STEVE MOLLENKOPF
Age: 50 Director Since: 2013
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Mr. Mollenkopf has served as our Chief Executive Officer since March 2014 and as a director since December 2013. He served as Chief Executive Officer-elect and President from December 2013 to March 2014 and as President and Chief Operating Officer from November 2011 to December 2013. In addition, he served as Executive Vice President and Group President from September 2010 to November 2011, and as Executive Vice President and President of QCT from August 2008 to September 2010. Mr. Mollenkopf joined Qualcomm in 1994 as an engineer and throughout his tenure at Qualcomm has held several other technical and leadership roles. Mr. Mollenkopf served as a director of General Electric Company from November 2016 to April 2018. Mr. Mollenkopf holds a B.S. degree in electrical engineering from Virginia Tech and an M.S. degree in electrical engineering from the University of Michigan.
We believe Mr. Mollenkopf’s qualifications to serve on our Board include his extensive business, operational and management experience in the wireless telecommunications industry, including his current position as our Chief Executive Officer. His extensive knowledge of our business, products, strategic relationships and opportunities, as well as the rapidly evolving technologies and competitive environment in our industry, bring valuable insights and knowledge to our Board.

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Proposal 1: Election of Directors

CLARK T. “SANDY” RANDT, JR.
Age: 73 Director Since: 2013
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Ambassador Randt has been President of Randt & Co. LLC, a company that advises firms with interests in China, since February 2009. He is a former U.S. Ambassador to the People’s Republic of China, where he served from July 2001 to January 2009. He was a partner resident in the Hong Kong office of Shearman & Sterling, a major international law firm, where he headed the firm’s China practice, from January 1994 to June 2001. Ambassador Randt served as First Secretary and Commercial Attaché at the U.S. Embassy in Beijing from August 1982 to October 1984. He was the China representative of the National Council for United States-China Trade in 1974, and he served in the U.S. Air Force Security Service from August 1968 to March 1972. Ambassador Randt has been a director of Valmont Industries, Inc. since February 2009, a director of the United Parcel Service, Inc. since August 2010 and a director of Wynn Resorts Ltd. since October 2015. He is fluent in Mandarin Chinese. Ambassador Randt holds a B.A. degree in English literature from Yale University and a J.D. degree from the University of Michigan. He also attended Harvard Law School where he was awarded the East Asia Legal Studies Traveling Fellowship to China.
We believe Ambassador Randt’s qualifications to serve on our Board include his deep understanding of Asia and experience in facilitating business in China and more generally throughout Asia, which is one of the most important regions to our business. He brings to our Board substantial experience in diplomacy, international trade and cross-border commercial transactions, including service as the U.S. Ambassador to the People’s Republic of China. His international experience and knowledge of Asian business operations, as well as his experience from serving on other public company boards, provide valuable insights to our Board.
FRANCISCO ROS
Age: 68 Director Since: 2010
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Dr. Ros is President of First International Partners, S.L., a business consulting firm he founded in 2002. He was Secretary of State (vice minister) of the Government of Spain from May 2004 to July 2010. He served as a senior director of business development of Qualcomm from July 2003 to April 2004. He was Chairman and Chief Executive Officer of Alua Broadband Optical Access, a company he co-founded, from January 2000 to June 2002. Dr. Ros served as President and Chief Executive Officer of Unisource (a joint venture among KPN, Telia, Swisscom and Telefónica) from May 1996 to October 1998. Dr. Ros headed several business areas within the Telefónica Group from April 1983 to November 1996 and became Managing Director of the holding company and a member of its Executive Management Board. Dr. Ros was a director of Elephant Talk Communications Corp. from September 2014 to February 2016. Dr. Ros holds an engineering and a Ph.D. degree in telecommunications from the Universidad Politecnica de Madrid, an M.S. degree in electrical engineering and a Ph.D. degree in electrical engineering and computer science from the Massachusetts Institute of Technology and an advanced management degree from the Instituto de Estudios Superiores de la Empresa Business School in Madrid.
We believe Dr. Ros’s qualifications to serve on our Board include his extensive executive management and board experience in telecommunications companies and operators in Europe and Latin America, his significant experience related to the overall telecommunications and IT regulatory environment in Europe (including his service in the Government of Spain at a time when Spain held the Presidency of the European Union), as well as his technical and business background and education. In addition, Dr. Ros brings a non-U.S. perspective to issues facing us, enhancing the understanding of our Board.

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Proposal 1: Election of Directors

IRENE B. ROSENFELD
Age: 65 Director Since: 2018
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Ms. Rosenfeld served as Chairman of Mondelēz International, Inc., a global snack food and beverage company (which changed its name from Kraft Foods, Inc. in October 2012), from November 2017 to March 2018, as Chairman and CEO from March 2007 to November 2017, and as CEO and a director from June 2006 to March 2007. Prior to that, she served as Chairman and CEO of Frito-Lay, a division of PepsiCo, Inc., a food and beverage company, from September 2004 to June 2006. Ms. Rosenfeld was employed continuously by Mondelēz International and its predecessor companies, in various capacities from 1981 to 2003, including President, Kraft Foods North America; President, Kraft Foods Operations, Technology & Information Systems; and President, Kraft Foods Canada, Mexico and Puerto Rico. She was as a director of AutoNation, Inc. from March 1999 to May 2007. Ms. Rosenfeld holds a B.A. degree in Psychology, an M.S. in Business and a Ph.D. in Marketing & Statistics from Cornell University.
We believe Ms. Rosenfeld’s qualifications to serve on our Board include her extensive management experience, including experience in international operations, which is a source of important insights to our Board and provides a useful resource to our senior management. Her experience with corporate governance matters and service on other public company boards also provide valuable insights to our Board.

NEIL SMIT
Age: 60 Director Since: 2018
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Mr. Smit has been Vice Chairman of Comcast Corporation, a global media and technology company, since April 2017. He was President and Chief Executive Officer of Comcast Cable Communications from November 2011 to April 2017, and President from March 2010 to November 2011. Before joining Comcast, Mr. Smit was President and Chief Executive Officer and a director of Charter Communications, Inc. from August 2005 to March 2010. Charter Communications filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in March 2009 and emerged from Chapter 11 bankruptcy in November 2009. Prior to joining Charter Communications, Mr. Smit was President of AOL Access (AOL/Time Warner) and held various leadership positions at Nabisco and Pillsbury. Mr. Smit holds an M.A. degree in International Business from Tufts University-Fletcher School of Law and Diplomacy and a B.S. degree in Geology from Duke University.
We believe Ms. Smit’s qualifications to service on our Board include his extensive management experience at media and technology companies, which is a source of valuable insights to our Board. His experience in senior operational positions also provides a useful resource for our senior management. He has been designated as an audit committee financial expert.

ANTHONY J. VINCIQUERRA
Age: 64 Director Since: 2015
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Mr. Vinciquerra has been Chairman of the Board and Chief Executive Officer of Sony Pictures Entertainment Inc., where he leads Sony’s television and film division, since June 2017. Mr. Vinciquerra was a Senior Advisor to Texas Pacific Group (TPG) in the Technology, Media and Telecom sectors, where he advised TPG on acquisitions and operations, from September 2011 to June 2017. Mr. Vinciquerra was Chairman of Fox Networks Group, the largest operating unit of News Corporation, from September 2008 to February 2011, and President and Chief Executive Officer from June 2002 to February 2011. Earlier in his career, he held various management positions in the broadcasting and media industry. Mr. Vinciquerra previously served as a director of Pandora Media, Inc. from March 2016 to June 2017, a director of Motorola Mobility Holdings, Inc. from January 2011 to May 2012 and a director of DirecTV from September 2013 to July 2015. Mr. Vinciquerra holds a B.A. degree in marketing from the State University of New York.
We believe Mr. Vinciquerra’s qualifications to serve on our Board include his management experience, including significant experience in operations, which is a source of important insights to our Board, as well as providing a useful resource to our senior management. His prior media industry experience is especially valuable with the convergence of the Internet, wireless, media and computing industries. He has been designated as an audit committee financial expert.

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Proposal 1: Election of Directors

REQUIRED VOTE AND BOARD RECOMMENDATION
 
 
 
 
 
The affirmative vote of a majority of the votes cast at the Annual Meeting at which a quorum is present, either in person or
by proxy, is required to elect each of the 12 nominees for director, meaning that the number of shares cast “for” a
nominee’s election exceeds the number of “withhold” votes cast against that nominee. If you hold your shares in your own
name and abstain from voting on this matter, your abstention will have no effect on the vote. If you hold your shares
through a broker and you do not instruct the broker on how to vote for each of the 12 nominees, your broker will not have
the authority to vote your shares. Abstentions and broker non-votes will each be counted as present for purposes of
determining the presence of a quorum but will not have any effect on the outcome of the vote.

THE BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE ABOVE NOMINEES.


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Proposal 2: Ratification of Selection of Independent Public Accountants

PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee has selected PricewaterhouseCoopers LLP as our independent public accountants for our fiscal year ending September 29, 2019, and the Board has directed that management submit this selection for ratification by the stockholders at the Annual Meeting. PricewaterhouseCoopers LLP has audited our consolidated financial statements since we commenced operations in 1985.
The Audit Committee has evaluated PricewaterhouseCoopers LLP’s qualifications, performance and independence, including that of the lead audit partner. This evaluation was conducted with input from senior management.
Stockholder ratification of the selection of PricewaterhouseCoopers LLP as our independent public accountants is not required by our Bylaws or otherwise. However, the Board is submitting the selection of PricewaterhouseCoopers LLP to stockholders for ratification as a matter of good corporate governance. If stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain PricewaterhouseCoopers LLP. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of different independent public accountants at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.
FEES FOR PROFESSIONAL SERVICES
 
 
 
 
 
The following table presents fees for professional services rendered by PricewaterhouseCoopers LLP during our fiscal years ended September 30, 2018 and September 24, 2017 for the audits of our annual consolidated financial statements and fees for other services. All of the services described in the following table were approved in conformity with the Audit Committee’s pre-approval process described below.
 
Fiscal
2018
Fiscal
2017
Audit fees (1)
$
11,552,000

$
9,144,000

Audit-related fees (2)
1,742,000

4,280,000

Tax fees (3)
1,155,000

787,000

All other fees (4)
42,000

384,000

Total
$
14,491,000

$
14,595,000

(1)
Audit fees consist of fees for professional services rendered for the audit of our annual consolidated financial statements and the effectiveness of our internal control over financial reporting, the reviews of our interim condensed consolidated financial statements included in quarterly reports and audits of certain subsidiaries for statutory, regulatory and other purposes.
(2)
Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or reviews of our consolidated financial statements and are not reported under “audit fees.” This category includes fees principally related to field verification of royalties from certain licensees.
(3)
Tax fees consist of fees for permissible advisory services regarding general tax consulting services, including consulting on tax matters related to merger and acquisition activity.
(4)
All other fees consist of fees for permissible advisory services provided in connection with market condition studies and technical publications purchased from the independent public accountants.
POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES OF INDEPENDENT PUBLIC ACCOUNTANTS
 
 
 
 
 
The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by our independent public accountants. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services and an estimated fee. The Audit Committee has delegated certain pre-approval authority to its Chair and certain members of management when expedition of approval is necessary, and is reported to the Audit Committee at its next meeting. Our independent public accountants and management periodically report to the Audit Committee regarding the extent of services provided by the independent public accountants and the fees for the services performed to date.

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Proposal 2: Ratification of Selection of Independent Public Accountants

REPRESENTATION FROM PRICEWATERHOUSECOOPERS LLP AT THE ANNUAL MEETING
 
 
 
 
 
Representatives of PricewaterhouseCoopers LLP are expected to be present at the Annual Meeting, will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
REQUIRED VOTE AND BOARD RECOMMENDATION
 
 
 
 
 
The affirmative vote of a majority of the votes cast at the Annual Meeting at which a quorum is present is required to approve this proposal. If you hold your shares in your own name and abstain from voting on this matter, your abstention will have no effect on the vote. If you hold your shares through a bank, broker or other holder of record and you do not instruct them on how to vote on this proposal, they will have the authority, but are not required, to vote your shares. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum but will not have any effect on the outcome of the proposal.
THE BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING SEPTEMBER 29, 2019.

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Proposal 3: Advisory Vote for Approval of Our Executive Compensation

PROPOSAL 3: ADVISORY VOTE FOR APPROVAL OF OUR EXECUTIVE COMPENSATION
This stockholder advisory vote, commonly known as “Say-on-Pay,” is required pursuant to Section 14A of the Securities Exchange Act of 1934, as amended, and gives our stockholders the opportunity to approve or not approve, on a non-binding advisory basis, the compensation paid to our named executive officers (NEOs). At the 2014 Annual Meeting of Stockholders, stockholders voted to require that the “Say-on-Pay” vote be held annually.
The Board recommends a vote “FOR” the following resolution:
“Resolved, that the stockholders of QUALCOMM Incorporated hereby approve, on a non-binding advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in this proxy statement, including in the Compensation Discussion and Analysis, compensation tables and narrative disclosures.”
COMPENSATION PROGRAM BEST PRACTICES
 
 
 
 
 
We continued our many ongoing executive compensation practices that promote consistent leadership, decision-making and actions without taking inappropriate or unnecessary risks. These practices are discussed in detail in the Compensation Discussion and Analysis (CD&A) section and include:
A significant portion of our executive officers’ total direct compensation (TDC) varies with Company financial and stock-price performance, and a majority of our regular annual long-term incentive equity award values are performance-based.
We cap earnouts of performance-based compensation granted in the form of annual bonuses and long-term performance stock units (PSUs) at 200% of target awards.
Our compensation decisions are made with both prevalent practices and comparative performance information as background, using objectively selected smaller and larger peers, where the Company is reasonably positioned in the middle of the range.
The Compensation Committee engages an independent compensation consultant to advise on matters including information on trends and regulatory developments, recommendations for potential peer companies, analyses of competitive practices for executive officers and directors, assessment of compensation-related risk and aggregate equity compensation spending.
We have a risk management process that includes compensation, talent management and succession planning.
We have stock ownership guidelines for executive officers and non-employee directors with holding-period requirements until the guidelines are met.
We do not provide tax gross-ups unless they are directly business related and provided under a policy generally applicable to all eligible employees, such as relocation.
We have a clawback policy that applies to cash incentives in the event of a material accounting restatement, as well as provisions allowing Board discretion to cause the forfeiture of outstanding awards if management misconduct resulted in material reputational harm to the Company.
Our insider trading policy includes a prohibition on hedging and pledging of our common stock covering all executive officers and non-employee directors.
EFFECT OF THIS RESOLUTION
 
 
 
 
 
Because your vote is advisory, it will not be binding upon the Company, the Board or the Compensation Committee. However, we value the opinions of our stockholders, and the Compensation Committee will take into account the outcome of this vote when considering future compensation decisions.




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Proposal 3: Advisory Vote for Approval of Our Executive Compensation

REQUIRED VOTE AND BOARD RECOMMENDATION
 
 
 
 
 
The affirmative vote of a majority of the votes cast at the Annual Meeting at which a quorum is present is required to approve this proposal. If you hold your shares in your own name and abstain from voting on this matter, your abstention will have no effect on the vote. If you hold your shares through a bank, broker or other holder of record and you do not instruct them on how to vote on this proposal, they will not have the authority to vote your shares. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum but will not have any effect on the outcome of the proposal.
The Board believes that the compensation of our NEOs, as described in the CD&A, compensation tables and narrative disclosures, is appropriate for the reasons discussed herein.
THE BOARD RECOMMENDS AN ADVISORY VOTE “FOR” APPROVAL OF OUR EXECUTIVE COMPENSATION.

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Stock Ownership of Certain Beneficial Owners and Management

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership of our common stock as of December 17, 2018 by: (i) each stockholder known to us to have greater than a 5% ownership interest (based solely on our review of Schedules 13D and 13G and Forms 13F filed with the SEC); (ii) each of our NEOs; (iii) each current director and nominee for director; and (iv) all of our executive officers and directors as a group.
 
Amount and Nature of Beneficial Ownership (1)
Name of Beneficial Owner
Number of
Shares
Percent of Class
Vanguard Group Inc.
107,554,251

8.89%
P.O. Box 2600, V26
 
 
Valley Forge, PA 19482-2600 (2)
 
 
BlackRock, Inc.
106,949,023

8.84%
55 East 52nd Street
 
 
New York, NY 10055 (3)
 
 
Capital Research & Management Co
89,437,612

7.39%
333 South Hope Street, 55th Fl
 
 
Los Angeles, CA 90071 (4)
 
 
Steve Mollenkopf (5)
678,813

*
George S. Davis (6)
142,448

*
Cristiano R. Amon
50,886

*
James H. Thompson (7)
208,552

*
Donald J. Rosenberg (8)
22,419

*
Barbara T. Alexander (9)
35,798

*
Mark Fields (10)

*
Jeffrey W. Henderson (11)
612

*
Thomas W. Horton (12)
22,735

*
Ann M. Livermore (13)
12,077

*
Harish Manwani (14)
4,383

*
Mark D. McLaughlin (15)
7,000

*
Clark T. Randt, Jr. (16)
748

*
Francisco Ros (17)
8,513

*
Irene B. Rosenfeld (18)

*
Neil Smit (19)

*
Anthony J. Vinciquerra (20)
5,470

*
All Executive Officers and Directors as a Group (20 persons) (21)
1,289,591

*
*
Less than 1%
(1)
The information for officers and directors in this table is based upon information supplied by those officers and directors. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, the Company believes that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 1,209,934,345 shares outstanding on December 17, 2018, adjusted as required by rules promulgated by the SEC.
(2)
This information is as of September 30, 2018 and based on the Schedule 13F filed with the SEC by Vanguard Group Inc. on November 14, 2018.
(3)
This information is as of September 30, 2018 and based on the Schedule 13F filed with the SEC by Blackrock, Inc. on November 9, 2018.

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Stock Ownership of Certain Beneficial Owners and Management

(4)
This information is as of September 30, 2018 and based on the Schedule 13F filed with the SEC by Capital Research & Management Co on November 14, 2018.
(5)
Includes 475,044 shares held in family trusts and 203,769 restricted stock units and related dividend equivalents that will vest within 60 days of December 17, 2018.
(6)
Includes 142,448 shares held in family trusts.
(7)
Includes 4,539 shares held in trusts for the benefit of his children and 90,906 shares held in Grantor Trusts for the benefit of Mr. Thompson and his spouse. Also includes 91,000 shares issuable upon exercise of stock options exercisable within 60 days of December 17, 2018. Dr. Thompson disclaims all beneficial ownership for the shares held in trusts for the benefit of his children.
(8)
Includes 15,031 shares held in family trusts and 7,388 shares held in Grantor Retained Annuity Trusts for the benefit of Mr. Rosenberg.
(9)
Includes 35,521 shares held in family trusts and 277 fully vested deferred stock units and related dividend equivalents to be released within 60 days. Excludes 15,691 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(10)
Excludes 2,843 fully vested deferred stock units and dividend equivalents that settle on April 5, 2021.
(11)
Excludes 13,223 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(12)
Includes 20,235 shares held jointly with his spouse and 2,500 shares issuable upon exercise of stock options exercisable within 60 days. Excludes 13,223 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(13)
Includes 80 shares held in family trusts and 11,997 shares held in Grantor Retained Annuity Trusts for the benefit of Ms. Livermore. Excludes 10,277 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(14)
Includes 4,383 shares held jointly with his spouse. Excludes 13,223 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(15)
Includes 7,000 shares held in family trusts. Excludes 6,831 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant, and 11,331 fully vested deferred stock units and dividend equivalents that settle upon retirement from the Board.
(16)
Includes 748 shares held jointly with his spouse. Excludes 6,207 fully vested deferred stock units and dividend equivalents that settle on March 4, 2020 and 13,223 fully vested deferred stock units and dividend equivalent shares that settle three years after the date of grant.
(17)
Excludes 13,223 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(18)
Excludes 1,566 fully vested deferred stock units and dividend equivalents that settle on April 5, 2021.
(19)
Excludes 2,843 fully vested deferred stock units and dividend equivalents that settle on April 5, 2021.
(20)
Includes 4,559 shares held in family trusts and 911 fully vested deferred stock units and related dividend equivalents to be released within 60 days. Excludes 13,683 fully vested deferred stock units and dividend equivalents that settle upon retirement from the Board.
(21)
Includes 93,500 shares issuable upon exercise of stock options exercisable within 60 days of December 17, 2018. Also includes 204,957 fully vested restricted stock units, deferred stock units and dividend equivalents to be released within 60 days of December 17, 2018 for all directors and executive officers as a group. Excludes 137,387 fully vested deferred stock units and related dividend equivalents.


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Stock Ownership of Certain Beneficial Owners and Management

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
 
 
 
 
Section 16(a) of the Securities Exchange Act requires our directors, executive officers and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Officers, directors and greater-than-10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of copies of such reports furnished to us and written representations that no other reports were required, all Section 16(a) filing requirements were complied with during 2018, except for one late Form 4 that was filed by Dr. Thompson in August 2018 to report six transactions regarding the transfer of interests in shares held as community property to the separate property of Dr. Thompson and his wife, and the transfer of shares from Dr. Thompson and his wife to certain of their Trusts.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
 
 
 
 
None of the members of our Compensation Committee are, or have been, employees or officers of the Company. During fiscal 2018, no member of the Compensation Committee had any relationship with us requiring disclosure under Item 404 of Regulation S-K. During fiscal 2018, none of our executive officers served on the compensation committee (or equivalent) or board of another entity that has or has had one or more executive officers who served on our Compensation Committee or Board.
EQUITY COMPENSATION PLAN INFORMATION
 
 
 
 
 
The following table sets forth information regarding outstanding equity awards and shares reserved for future issuance under our equity compensation plans as of September 30, 2018 (number of shares in thousands):
Plan Category
 
Number of Shares to be Issued Upon Exercise / Vesting of Outstanding Awards
 
Weighted Average Exercise Price of Outstanding Options (1)
 
Number of Shares Remaining Available for Future Issuance
 
Equity compensation plans approved by stockholders (2)
 
33,210

(4)
$44.42
 
118,133

(5)
Equity compensation plans not approved by stockholders (3)
 
61

 
$27.34
 

 
Total
 
33,271

 
$44.21
 
118,133

 
(1)
Weighted Average Exercise Price of Outstanding Options does not include outstanding performance stock units, time-based restricted stock units and performance-based restricted stock units, all of which were granted under equity compensation plans approved by stockholders.
(2)
Consists of three Company plans: the QUALCOMM Incorporated 2006 Long-Term Incentive Plan (2006 Long-Term Incentive Plan), the QUALCOMM Incorporated 2016 Long-Term Incentive Plan (2016 Long-Term Incentive Plan) and the Amended and Restated QUALCOMM Incorporated 2001 Employee Stock Purchase Plan, as amended (ESPP).
(3)
Consists of equity compensation plans assumed in connection with mergers and acquisitions.
(4)
Includes approximately 28,684,000 shares that may be issued pursuant to performance stock units, time-based restricted stock units, performance-based restricted stock units and performance stock options granted under the 2006 Long-Term Incentive Plan and the 2016 Long-Term Incentive Plan. The performance stock units include the maximum number of shares that may be issued.
(5)
Includes approximately 38,858,000 shares reserved for issuance under the ESPP.

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Certain Relationships and Related-Person Transactions

CERTAIN RELATIONSHIPS AND RELATED-PERSON TRANSACTIONS
Our Code of Ethics states that our executive officers and directors, including their immediate family members, are charged with avoiding situations in which their personal, family or financial interests conflict with those of the Company. Our Conflicts of Interest and Outside Activities policy provides additional rules regarding the employment of relatives. In accordance with its charter, the Audit Committee is responsible for reviewing and approving transactions between the Company and any directors or executive officers or any of such person’s immediate family members or affiliates (other than employment and compensation related transactions, which are subject to review by the Compensation Committee), which would be reportable as a related-person transaction under SEC rules. In considering the proposed arrangement, the Audit Committee or Compensation Committee, as appropriate, will consider the relevant facts and circumstances and the potential for conflicts of interest or improprieties.
During fiscal 2018, we employed the family members or other related persons of certain of our executive officers. The Compensation Committee reviewed and approved the related-person transactions below.
Those employees whose compensation (salary, cash incentives and grant date fair value of equity awards) exceeded $120,000 are discussed below, all of whom were adults who did not live with the related director or executive officer, except as otherwise described below. Each family member or other related person is compensated according to our standard practices, including participation in our employee benefit plans generally made available to employees of a similar responsibility level. We do not view any of the executive officers as having a beneficial interest in the compensation of family members or other related person described below that is material to them or the Company. Restricted stock units were granted under our 2016 Long-Term Incentive Plan, and generally vest over three years from the grant date, contingent upon continued service with the Company.
Cristiano Amon’s brother, Rogerio Amon, serves as a Senior Director, Program Management, Qualcomm Technologies, Inc. During fiscal 2018, Rogerio Amon earned $217,246 in base salary and $50,850 in cash incentives and received restricted stock unit grants totaling 1,916 shares with an aggregate grant date fair value of $118,428.
Steve Mollenkopf’s brother, James D. Mollenkopf, serves as a Vice President, Strategic Development, Qualcomm Technologies, Inc. During fiscal 2018, James D. Mollenkopf earned $281,442 in base salary and $88,300 in cash incentives and received restricted stock unit grants totaling 4,773 shares with an aggregate grant date fair value of $295,019.
Michelle M. Sterling, Executive Vice President, Human Resources, shares her household with Mark E. Palamar, who serves as a Senior Director, IPR Enforcement. During fiscal 2018, Mark E. Palamar earned $241,554 in base salary and $55,660 in cash incentives and received restricted stock unit grants totaling 1,942 shares with an aggregate grant date fair value of $120,035.

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Compensation Committee Report

COMPENSATION COMMITTEE REPORT
The Compensation Committee reviewed and discussed the Compensation Discussion and Analysis (CD&A) with management. Based on this review and discussion, the Compensation Committee recommended to the Board that the CD&A be included in our 2019 Proxy Statement.
COMPENSATION COMMITTEE

Barbara T. Alexander, Chair
Harish Manwani
Mark D. McLaughlin
Irene B. Rosenfeld

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Compensation Discussion & Analysis

EXECUTIVE COMPENSATION AND RELATED INFORMATION
COMPENSATION DISCUSSION & ANALYSIS
The Compensation Committee oversees our executive compensation program. This Compensation Discussion and Analysis (CD&A) discusses the program and the compensation earned by or paid to our Named Executive Officers (NEOs) for fiscal 2018.
This CD&A is comprised of the following sections:
 
Page
1. Executive Summary
30
2. Our NEOs for Fiscal 2018
34
3. Program Overview
36
4. Other Compensation Components
43
5. Process and Rationale for Executive Compensation Decisions
47
6. Compensation Program Best Practices
52
Detailed compensation tables that quantify and further explain our NEOs’ compensation follow this CD&A.

EXECUTIVE SUMMARY
 
 
 
 
 
Fiscal 2018 Business Highlights
Fiscal 2018 was a year of transition as we executed on our Cost Plan announced in January 2018 and continued to invest in technology leadership and in adjacent industry segments outside of traditional cellular industries.
Our Cost Plan is designed to align our cost structure to our long-term margin targets, under which we continue to execute on a series of targeted actions across our businesses to reduce annual costs by $1 billion, excluding incremental costs resulting from any future acquisition of a business.
We continue to invest significant resources toward advancements primarily in support of 4G- and 5G-based technologies, as well as other technologies, to extend the demand for our products, including within adjacent industry segments outside traditional cellular industries, such as automotive, the Internet of Things (IoT) and networking, and to generate new or expanded licensing opportunities.
Our QCT (Qualcomm CDMA Technologies) segment results were positively impacted by results from our RF360 Holdings joint venture, which was formed in the second quarter of fiscal 2017, and higher demand from OEMs in China, partially offset by lower modem sales to Apple. Our QTL (Qualcomm Technology Licensing) segment results were negatively impacted by our continued dispute with Apple and its contract manufacturers (who are Qualcomm licensees). We did not record any revenues in fiscal 2018 for royalties due on sales of Apple’s products. QTL revenues in fiscal 2018 included $600 million paid under an interim agreement with another licensee in dispute (which dispute was previously disclosed). This represented a partial payment for royalties due after the second quarter of fiscal 2017 by that other licensee while negotiations continue. This payment does not reflect the full amount of royalties due under the underlying license agreement.
In the fourth quarter of fiscal 2018, we terminated the definitive agreement under which we proposed to acquire NXP Semiconductors N.V. (NXP). In accordance with the terms of the purchase agreement, we paid NXP a termination fee of $2.0 billion, which was recorded as a charge to other expense in the fourth quarter of fiscal 2018. Following the termination of our agreement to acquire NXP, we announced a stock repurchase program authorizing us to repurchase up to $30 billion of our common stock, the large majority of which we expect to complete by the end of fiscal 2019. In August 2018, we completed a tender offer and paid an aggregate of $5.1 billion to repurchase 76.2 million shares of our common stock. In

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Compensation Discussion & Analysis

September 2018, we entered into three accelerated stock repurchase agreements to repurchase an aggregate of $16.0 billion of our common stock resulting in an initial delivery to us of 178.4 million shares of our common stock.
Executive Compensation Highlights
We provided competitive target pay opportunities, where amounts and mix were consistent with peers and stable year over year. Target total direct compensation (TDC) consists of base salary, percent-of-salary target annual bonuses that would be earned for achieving 100% of goals, and annualized long-term incentive grant value. NEOs’ base salaries were unchanged for fiscal 2018, except for an increase for Mr. Amon to align with the market and to recognize his promotion to President and a 2% market adjustment for Dr. Thompson. Percent-of-salary target annual bonuses were unchanged, except for a promotional increase for Mr. Amon and 8% market adjustments for Mr. Davis and Mr. Rosenberg. On-going long-term incentive grant values increased moderately to reflect the market, while Mr. Amon received a special $3 million grant of restricted stock units (RSUs) at the time of his promotion to President. The aforementioned discussion does not include the $6.0 million Performance Stock Option (PSO) granted to Mr. Mollenkopf in fiscal 2018, as the Compensation Committee considers that a one-time award and not part of the Company’s on-going executive compensation program. See page 41 for additional information regarding this grant.

In aggregate, target TDC for our NEOs was slightly above median compared to peers, while individuals varied both higher and lower primarily based on individual performance, experience, internal equity and pay history. However, in a highly performance-based compensation program such as ours, target TDC is no indication of actual earned or delivered pay. The following table quantifies the highly performance-based mix of our target TDC for fiscal 2018:

chart-f1239b57799452e5beea01.jpg    chart-80b7cb630c96514abfea01.jpg

We aligned real pay delivery with performance through rigorous goal-setting and performance measurement. While our target TDC opportunities reflect market practice, our real pay delivery reflects performance. Annual bonuses reward near-term operating financial performance measured by adjusted earnings per share (EPS) and adjusted revenue goals set from our Board-approved annual business plan. Meanwhile, regular annual long-term incentive grants are at least half in performance share units (PSUs) that reward three-year strategic performance measured by relative total shareholder return (RTSR) compared to the NASDAQ-100 and adjusted return on invested capital (ROIC) each weighted 50%. The remainder is in RSUs that are primarily for ownership and retention with the delivered value tied to stock price.
NEOs earned annual bonuses at 100% of target for fiscal 2018. We achieved 102% of our adjusted EPS goal that was weighted 60%, and 97% of our adjusted revenue goal that was weighted 40%. While challenging, fiscal 2018 goals for both financial measures were below fiscal 2017 actual results, reflecting the ongoing impact of Apple’s contract manufacturers not paying royalties owed to us on Apple’s products and another licensee not paying the full amount of royalties owed to us, and limited product revenues from Apple. The Compensation Committee also approved adjustments to annual financial

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Compensation Discussion & Analysis

measures for items that it deemed to be outside management’s line of sight to fairly reward financial performance from operating the business. These adjustments are explained later in detail but are primarily related to the termination of the NXP acquisition that did not go forward because China withheld required regulatory approval, tax restructuring, an interim payment from an agreement with a licensee in dispute, and unplanned stock repurchases. For reference, NEOs earned annual bonuses at 106% of target for fiscal 2017 and 81% of target for fiscal 2016, which the Compensation Committee believed was fair to reward financial operating performance for those years.
NEOs earned 36% of target PSUs for the period ending in fiscal 2018, following three years of zero earned PSUs for the periods ending in fiscal 2015 through fiscal 2017. For the 50% portion of target PSUs measured on relative TSR performance, 72% (36% of the total) were earned based on Qualcomm’s relative TSR ranking at the 49th percentile of the NASDAQ-100 for the performance period covering fiscal 2016-2018. For the 50% portion of target PSUs measured on adjusted ROIC performance, the earned PSUs were zero because performance was below the 11.9% threshold. Earned PSUs compared to target shares for the performance periods ending in each of the last four fiscal years are depicted below:

neopsusnippit.jpg
Performance Period Ending in FY15 Performance Period Ending in FY17 Performance Period Ending in FY18

(1) There were no PSUs with a performance period ending in fiscal 2016.
Successive below-target earned PSUs created concern on the part of the Compensation Committee regarding stock ownership and unvested retention value for our CEO, whose salary and target TDC has been essentially unchanged since he assumed the leadership role in fiscal 2014. The Compensation Committee recognized that any “special” award should be earned only if there is commensurate performance. Consequently, at the end of fiscal 2018, the Compensation Committee approved a one-time grant of performance stock options (PSOs) with a grant date fair value of $6 million to our CEO. The award requires that absolute TSR averages 25% or more, as measured from the September 20, 2018 grant date stock price ($74.60), for 20 consecutive trading days occurring any time within the first two years following the grant date. If such performance target is not met, the PSOs will not become exercisable and will be forfeited, regardless of the other terms of the award.  If such performance target is achieved, the award has a seven-year term and has time-related vesting for continued service that is in three equal annual installments on October 1, 2019, 2020 and 2021.

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Compensation Discussion & Analysis


We engaged with and listened to shareholders, practiced strong governance, and mitigated potential compensation-related risks. Last year’s executive compensation program received 85% approval from our stockholders at the annual meeting in March 2018. As a result, there were no notable changes in delivery or design of the direct compensation components. To facilitate recruiting and encourage employment retention, the Compensation Committee approved an executive officer change in control (CIC) severance plan in May 2018 and a non-CIC severance plan in September 2018. Benefits under the plans are comparable to peers and provisions are stockholder friendly with a prescribed CIC definition, double-trigger CIC vesting acceleration and no gross-ups for excise taxes.


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Compensation Discussion & Analysis

OUR NEOs FOR FISCAL 2018
 
 
 
 
 
Steve Mollenkopf
 
 
mollenkopfpicture.jpg
 
Current position:
  Chief Executive Officer (CEO), since March 2014
Prior Qualcomm positions include:
CEO-Elect and President, December 2013 to March 2014
President and Chief Operating Officer, November 2011 to December 2013

24 years of service with Qualcomm
 
 
 
George S. Davis
 
 
georgedavisa03.jpg
 
Current position:
Executive Vice President and Chief Financial Officer (CFO), since March 2013

6 years of service with Qualcomm
 
 
 
Cristiano R. Amon
 
 
cristianoamoncropa01.jpg
 
Current position:
 President, since January 2018
Prior Qualcomm positions include:
Executive Vice President, Qualcomm Technologies, Inc. and President QCT, November 2015 to January 2018
Executive Vice President, Qualcomm Technologies, Inc. and Co-President QCT, October 2012 to November 2015
 Senior Vice President, Qualcomm Incorporated and Co-President QCT, June 2012 to October 2012
 Senior Vice President, Product Management, October 2007 to June 2012

17 years of service with Qualcomm
 
 
 

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Compensation Discussion & Analysis

James H. Thompson
 
 
jimthompsona01.jpg
 
Current position:
● Executive Vice President, Engineering, Qualcomm Technologies, Inc. and Chief Technology Officer, since March 2017
Prior Qualcomm positions include:
● Executive Vice President, Engineering, Qualcomm Technologies, Inc., October 2012 to March 2017
● Senior Vice President, Engineering, July 1998 to October 2012

27 years of service with Qualcomm
 
 
 
Donald J. Rosenberg
 
 
rosenberg.jpg
 
Current position:
● Executive Vice President, General Counsel and Corporate Secretary, since October 2007

11 years of service with Qualcomm

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Compensation Discussion & Analysis

PROGRAM OVERVIEW
 
 
 
 
 
Primary Compensation Components
Figure 1 is an overview of the primary components of our fiscal 2018 executive compensation program, including the form, type and objective of each component. In structuring our cash and long-term equity incentives, the Compensation Committee continued to use variations of non-GAAP financial performance measures that support our business strategy. See Appendix D for definitions of the various performance measures used in determining our cash and long-term equity incentive awards.
Figure 1: Fiscal 2018 Executive Compensation Program Overview (1)
 
 
 
Objective
Type
Component
Form
Attract and Retain Talent
Pay Delivery Aligned with Stockholders Interests
Performance Measures that Support the Execution of Strategy
Performance Periods that Balance Short- and Long-Term
Fixed Compensation
Salary
Cash
Competitive amounts that attract and retain executives who develop and execute our business strategy
 
 
 
Variable Compensation
Annual Cash Incentive Plan
(ACIP)
Cash
Competitive amounts that attract and retain (through annual potential payouts) executives who develop and execute our business strategy

Aligns a portion of our executive officers’ TDC to achieving the Company’s annual financial objectives
Payouts based on performance targets aligned with annual financial metrics
Adjusted Revenues (weighted 40%)
Adjusted EPS (weighted 60%)
Current fiscal year
Performance Stock Units
(PSUs)
Equity
Competitive amounts that attract and retain (through 3-year cliff vesting) executives who develop and execute our business strategy


Aligns a portion of our executive officers’ TDC to long-term performance targets
Payouts based on performance targets aligned with long-term stock price performance and financial metrics
50% of the award is based on relative total shareholder return (RTSR) compared to the NASDAQ-100 (RTSR PSUs) and 50% is based on an average annual adjusted return on invested capital (ROIC PSUs)
3-year performance period; 3-year cliff vest
Restricted Stock Units
(RSUs)
Equity
Competitive amounts that attract and retain (through annual vesting over a 3-year period) executives who develop and execute our business strategy
Aligns a portion of our executive officers’ TDC to long-term absolute total shareholder return (TSR) since the realized value of the award amount varies based on stock price performance and dividends
Vests based on continued service and value is tied to stock price
Annual vesting over 3 years
(1) In addition to the compensation components listed in this Figure 1, in fiscal 2018 the Compensation Committee granted performance stock options (PSOs) to Mr. Mollenkopf. The PSOs have been excluded from Figure 1 as the Committee views this as a one-time award and not part of the Company’s on-going executive compensation program. See the discussion titled

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Compensation Discussion & Analysis

“Other Equity Awards in Fiscal 2018” under section “2018 Executive Compensation Program” on page 41 for a description of the PSOs.
Additional objectives of our executive compensation program include:
Competitive for the Business. The Compensation Committee aims to set executive compensation at competitive levels to attract, motivate, engage and retain executives. The Compensation Committee considers competitive practices of peer companies as reference points for comparative purposes but does not set specific benchmark percentile objectives.
Internally Fair and Equitable. The Compensation Committee considers business and individual factors to evaluate internal fairness of compensation and monitors the internal compensation relationships among our executive officers. However, the Compensation Committee does not use predetermined formulas as part of this evaluation.
High Standards for Governance and Risk Management. The Compensation Committee has a comprehensive charter that provides for oversight of our entire executive compensation program and includes reviewing, on an annual basis, the amounts of all components of executive compensation and conducting an annual compensation risk assessment. The risk assessment also covers incentive and commission arrangements for our non-executive employees. See the discussion of our risk-assessment process under the section “Compensation Program Best Practices” on page 52 for more details on our compensation-related corporate governance practices.
We also have competitive health and welfare benefits that are generally structured in the same manner for all U.S. executives and/or employees. A summary of these and several other benefits begins on page 44.
2018 Executive Compensation Program
Base Salaries
The Compensation Committee considered peer group data, as well as the contributions of the individual executive, when determining fiscal 2018 base salaries. The fiscal 2018 base salaries for our NEOs, and a comparison of changes from fiscal 2017, are illustrated below in Figure 2. Mr. Amon’s increase was to align with the market and recognize his promotion to President, while Dr. Thompson received a modest market adjustment. No other NEO received a salary increase for fiscal 2018.
Figure 2: NEO Salary
NEO
2018
2017
% Change
Steve Mollenkopf
$1,130,000
$1,130,000
0%
George S. Davis
$760,000
$760,000
0%
Cristiano R. Amon
$900,000
$750,000
20%
James H. Thompson
$740,000
$725,000
2%
Donald J. Rosenberg
$720,000
$720,000
0%
Annual Cash Incentive Plan
2018 ACIP Structure. The overriding objective of the ACIP is to reward annual operating performance that meets or exceeds established targets. The ACIP provides for a cash bonus based on the Company’s achievement of these targets. For fiscal 2018, the Compensation Committee continued the use of the following significant annual financial operating performance measures: (1) Adjusted Revenues and (2) Adjusted EPS. The Adjusted Revenues measure is weighted 40%, and the Adjusted EPS measure is weighted 60% to emphasize the relative importance of profitable growth to stockholder value creation.


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Compensation Discussion & Analysis

chart-93151cfac29b5d0ca99.jpg
We use Adjusted Revenues because...


...top-line growth is an important factor in stockholder value creation.
We use Adjusted Earnings Per Share because...


...it encourages our executive officers to focus on growing net income, reducing our outstanding share count and managing our share-based compensation expense, which is included in the calculation.

ACIP awards are funded from zero to 200% of individual targets for our executive officers based on achievement of the specified financial objectives. The funded range of zero to 200% is utilized to encompass appropriate upside reward and downside performance risk. The individual targets are determined by the Compensation Committee using a market-based percent-of-salary that considers the practices of our peer companies. For fiscal 2018, the target bonus opportunities for Messrs. Davis and Rosenberg were increased from 130% to 140% of salary and Mr. Amon’s target bonus was increased from 150% to 175% of base salary to align with market. No other NEO received a change in their percent of salary target bonus in fiscal 2018. The Compensation Committee has the authority to apply discretion to individual ACIP earned amounts based on feedback from other Board members, feedback from our CEO and other performance measures. A summary of these factors is discussed in the “Process and Rationale for Executive Compensation Decisions” section beginning on page 47.
The payout schedule for fiscal 2018 is set forth in Figure 3.
Figure 3: Fiscal 2018 ACIP Payout Schedule
Award Level
Achievement of Financial Objective
(% of Target)
ACIP Funding
(% of Target)
(1)
Maximum Award Level
130%
200%
Target Award Level
100%
100%
Threshold Award Level
80%
0%
(1)
The ACIP funding between the award levels interpolates linearly with the achievement of our financial objectives.
This design provides that if certain financial objectives are met, our executive officers may receive up to 2x their target amounts, subject to the Compensation Committee’s negative discretion to pay any amount less than the maximum.
As noted above, the overriding objective of the ACIP is to reward annual operating performance that meets or exceeds established targets. The targets for the fiscal 2018 ACIP were lower than fiscal 2017 actual results due to the full year impact to Adjusted Revenue and Adjusted EPS of the ongoing disputes with certain of our licensees and reduced investment income resulting from our preparation to fund the then assumed acquisition of NXP, which affected Adjusted EPS. Removing the impact of these disputes with certain of our licensees and the reduced investment income, the established targets for fiscal 2018 would have been higher than fiscal 2017 actual results.
To support the objective to reward annual operating performance that meets or exceeds established targets, the Compensation Committee modified Adjusted Revenues and Adjusted EPS in calculating the financial performance on which fiscal 2018 ACIP awards were determined. Modifications are intended to eliminate the distorting effects of certain unusual income or expense items that the Compensation Committee determined, in its discretion, did not reflect a fair measurement of our operating performance. The modifications discussed in this section are incremental to the predefined adjustments to the Company’s GAAP financial statements as defined in the ACIP. See Appendix D for a listing of predefined adjustments.

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Compensation Discussion & Analysis

The excluded items were: the NXP termination fee, which affected Adjusted EPS, because this item is considered unrelated to the Company’s ongoing operating activities and the exclusion aligns with our primary plan objective; the revenues recorded under an interim agreement with a licensee in dispute, which affected both Adjusted Revenues and Adjusted EPS, because excluding this payment is consistent with the Compensation Committee’s determination last year that any resolution of such dispute would not be rewarded through the plan; a tax restructuring benefit, which affected Adjusted EPS, because this benefit is considered unrelated to operating performance; and stock repurchases under our $30 billion stock repurchase plan, which affected Adjusted EPS, because it was not included in establishing our target (which target assumed closing the NXP transaction) and is considered unrelated to operating performance.
None of these items were contemplated in the fiscal 2018 business plan. Accordingly, the Compensation Committee determined that these modifications adjust the actual amounts to reflect a more accurate measurement of the Company’s fiscal 2018 operating financial performance for purposes of the ACIP and were in the best interests of the Company for both retention and incentive purposes. In addition, these modifications were consistent with modifications made to the bonus plan covering our non-executive employees.

Fiscal 2018 ACIP Earnings
Figure 4 shows the objectives and actual performance for Adjusted Revenues and Adjusted EPS and illustrates the following:
Under the terms of the ACIP, Adjusted Revenues was weighted 40%, and Adjusted EPS was weighted 60%.
Without the modifications discussed above, Adjusted Revenues performance was 100% of target and Adjusted EPS performance was 68% of target.
Modified Adjusted Revenues performance was 97% of the target and modified Adjusted EPS performance was 102% of the target.
Accordingly, our weighted performance was 100% [(97% x 40%) + (102% x 60%)], which translates into award funding at 100% of target.

Figure 4: Fiscal 2018 ACIP Financial Objectives and Performance
 
Threshold
 
Target
 
Maximum
 
Performance
 
Weight
 
 
 
Wtg. Perf.
Adjusted Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance Range
$18.2B
 
$22.8B
 
$29.6B
 
97%
 
40%
 
 
 
38.8%
Actual Performance
 
 
$22.1B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EPS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance Range
$2.14
 
$2.68
 
$3.48
 
102%
 
60%
 
+
 
61.2%
Actual Performance
 
 
 
 
 
$2.73
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Performance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance Range
80%
 
100%
 
130%
 
 
 
 
 
=
 
100%
Actual Performance
 
 
 
100%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payout Rate
 
 
 
 
 
 
 
 
 
 
 
Below Target Range
Payout Range % of Target
0%
 
100%
 
200%
 
 
 
At Target
Payout Rate
 
 
 
100%
 
 
 
 
 
 
Above Target Range
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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Compensation Discussion & Analysis

Figure 5: Fiscal 2018 ACIP Target and Earned Amounts
Name
ACIP Target
($)
Weighted Performance Amount (% of target)
Performance-Adjusted Amount
(% of target)
Earned Amount Approved by Compensation Committee
($)
Steve Mollenkopf
2,260,000
100
100
2,260,000
George S. Davis
1,064,000
100
100
1,064,000
Cristiano R. Amon
1,575,000
100
100
1,575,000
James H. Thompson
1,036,000
100
100
1,036,000
Donald J. Rosenberg
1,008,000
100
100
1,008,000

Long-Term Equity Incentives
On September 20, 2018, the Compensation Committee granted equity for fiscal 2018 to our executive officers in the form of RTSR PSUs, ROIC PSUs and RSUs. These awards include dividend equivalent rights that accrue in the form of additional shares with vesting and distribution at the same time as the earned and vested underlying awards. A description of these awards, as well as a description of the one-time special PSO award granted to our CEO, is set forth below.

Figure 6: Equity Awarded to NEOs in Fiscal 2018
chart-6ed8eac82e0955acb55.jpg

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Compensation Discussion & Analysis

2018 RTSR PSUs. The RTSR PSUs allow recipients to earn a variable number of shares of our common stock based on the relative performance over a three-year period (fiscal 2019 - 2021) of our TSR compared to that of the companies comprising the NASDAQ-100, according to the payout schedule set forth in Figure 7. The RTSR PSUs require achievement of performance at the 50th percentile in order to earn the target number of shares, while the maximum shares that could be earned are 2X the target for performance at or above the 90th percentile, and no shares would be earned if performance is below the 25th percentile. The RTSR PSUs also provide that the total number of shares earned may not exceed the target number of shares if our absolute TSR for the entire three-year performance period is negative, regardless of the level of RTSR achieved. This provision considers stockholders’ interests by limiting the number of shares that may be earned in the event relative TSR performance is relatively strong despite a declining stock price.
Figure 7: RTSR PSU Payout Schedule
Award Level
Qualcomm’s TSR Percentile Rank Among the NASDAQ-100
Multiple of Target RTSR PSUs Earned
(1)
Maximum Award Level
90th percentile and above
2x
Target Award Level
50th percentile
1x
Threshold Award Level
25th percentile
0.25x
Below Threshold
Below 25th percentile
No shares earned
(1)
The multiple of target RTSR PSUs earned between the award levels interpolates linearly with our TSR percentile rank among the NASDAQ-100.
2018 ROIC PSUs. The ROIC PSUs allow recipients to earn a variable number of shares of our common stock based on the achievement of a three-year (fiscal 2019 - 2021) Adjusted ROIC target established by the Compensation Committee at the time of grant. We calculate our Adjusted ROIC by averaging over the three-year performance period (a) Adjusted After-Tax Operating Income divided by (b) the sum of average Adjusted Debt and average Adjusted Equity for the relevant year. See Appendix D for the definitions of performance measures to be used in determining the number of ROIC PSUs for the relevant performance period. The payout schedule is set forth in Figure 8. The Compensation Committee intended that the target chosen for measuring performance under the ROIC PSUs would generally present a similar degree of difficulty for achievement in comparison to the target chosen in recent years and would reflect the rigor of our goal-setting overall. The process for determining the target included consideration of our strategic plan, historical performance and peer company benchmarking. In addition to the annual process for determining the ROIC target, the Committee incorporated the effect of our $30 billion share repurchase program to increase the target appropriately.
Figure 8: ROIC PSU Payout Schedule
Award Level
Multiple of Target ROIC PSUs Earned
(1)
Maximum Award Level
2x
Target Award Level
1x
Threshold Award Level
0.33x
Below Threshold
No shares earned
(1)
The multiple of target ROIC PSUs earned between the award levels interpolates linearly with our average annual Adjusted ROIC for the 3-year performance period.
2018 RSUs. These grants represent the right to receive one share of our common stock for each unit subject to the award, based on continued employment until vesting, and generally vest in equal annual installments over three years. The Compensation Committee continued to use RSUs as part of the annual equity grants for our executive officers in order to support ownership-accumulation and employment-retention objectives.
Other Equity Awards in Fiscal 2018. Given Mr. Mollenkopf’s strong leadership and performance during recent extraordinary events, and in order to support his retention with the Company, the Compensation Committee approved a one-time grant

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Compensation Discussion & Analysis

of performance stock options (PSOs) with a grant date fair value of $6 million to Mr. Mollenkopf. The award requires that absolute TSR averages 25% or more, as measured from the September 20, 2018 grant date stock price ($74.60), for 20 consecutive trading days occurring any time within the first two years following the grant date. If such performance target is not met, the PSOs will not become exercisable and will be forfeited, regardless of the other terms of the award.  If such performance target is achieved, the award has a seven-year term and has time-related vesting for continued service that is in three equal annual installments on October 1, 2019, 2020 and 2021.
In addition to the regular annual grants described above, on December 20, 2017, Mr. Amon received a grant of RSUs in connection with his promotion to President. Mr. Amon’s promotional RSUs had a grant date fair value of $3 million and vest in three equal installments on November 20, 2018, 2019 and 2020.

Summary of Grant Date Fair Values of Fiscal 2018 Equity Awards. Figure 9 shows the grant date fair values of the equity awards granted to our NEOs as approved by the Compensation Committee during fiscal 2018. For the fiscal 2018 annual equity awards, the Compensation Committee approved increases in the on-going equity values for certain of our NEOs in order to better align with market and to further support retention and the goal of providing competitive total direct compensation. As a result, the on-going equity grant values for Messrs. Mollenkopf and Davis and Dr. Thompson were increased as follows: Mr. Mollenkopf, from $14.0 to $16.0 million (both of which include the $6M annualized value of his 2014 front-loaded RSUs described below, but exclude his one-time PSO grant described above); Dr. Thompson, from $6.2 million to $7.0 million; and Mr. Davis, from $5.0 million to $5.5 million. The on-going equity grant value for Messrs. Amon and Rosenberg remained the same as in the prior year.
In connection with the previously disclosed retention strategy implemented in fiscal 2014, the Compensation Committee accelerated the timing of RSU grants that it anticipated awarding to Mr. Mollenkopf over the subsequent five years. The vesting schedule for his 2014 RSU award provided for annual vesting over five years rather than the typical three years, and the Compensation Committee indicated that it did not anticipate granting RSUs to Mr. Mollenkopf during that five-year period that ended at the conclusion of fiscal 2018. Accordingly, the Compensation Committee reduced the on-going equity value that it would have otherwise granted to Mr. Mollenkopf in fiscal 2018 by the annualized value of his fiscal 2014 RSU grant, as the Compensation Committee deemed those amounts to be attributable to his fiscal 2018 compensation. The increase of $2.0 million to Mr. Mollenkopf’s total fiscal 2018 on-going equity value was awarded in PSUs to support the Company’s commitment to not grant additional time‐based equity during the period that was covered by his fiscal 2014 awards. This $2.0 million increase does not include the one-time PSO award granted to Mr. Mollenkopf in fiscal 2018.

Figure 9: Grant Date Fair Values of Equity Awarded to NEOs in Fiscal 2018
Name
RTSR PSUs ($)
ROIC PSUs ($)
RSUs ($)
PSOs ($)
Total ($)
Steve Mollenkopf
5,000,007
5,000,065
6,003,095
16,003,167
George S. Davis
1,485,012
1,485,062
2,530,059
5,500,133
Cristiano R. Amon
2,160,025
2,160,043
6,680,042
11,000,110
James H. Thompson
1,890,056
1,890,066
3,220,034
7,000,156
Donald J. Rosenberg
1,215,042
1,215,010
2,070,001
4,500,053

PSUs Vesting in 2018. At the end of fiscal 2015, we granted RTSR PSUs and ROIC PSUs to our executive officers, which were earned and vested at the end of fiscal 2018 based on our performance for fiscal 2016-2018. The RTSR PSU portion of these grants (roughly half) were earned at 72% of the target units, reflecting 49th percentile TSR performance versus the NASDAQ-100 for the period. The ROIC PSU portion of these grants was earned at zero percent of the target units, reflecting adjusted ROIC performance below the 11.9% threshold that was set at time of grant. In total, the earn-out was roughly 36% of the target units ((50% RTSR PSUs x 72%) + (50% of ROIC PSUs x 0%)).


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Compensation Discussion & Analysis

OTHER COMPENSATION COMPONENTS
 
 
 
 
 

In addition to the primary compensation components summarized in Figure 1 on page 36, during fiscal 2018, we had competitive health and welfare benefits that were generally structured the same for all U.S.-based executives and/or employees, plus several other benefits. Figure 10 describes the other benefits that were generally available to U.S.-based executives, and Figure 11 describes the other benefits that were generally available to all U.S.-based employees, including executives.

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Compensation Discussion & Analysis

Figure 10: Fiscal 2018 U.S. Executive Benefits
Component
Form and Purpose
Comment
Executive physicals
A comprehensive physical exam designed to focus on wellness, prevention and early detection of potential health risks. 
Charges are submitted by the provider directly to Qualcomm and paid by Qualcomm.
Nonqualified Deferred Compensation Plan (NQDC Plan) Company match
Company match on employees’ deferred contributions up to a maximum amount based on a predefined formula.
Provide a competitive, nonqualified, tax-efficient defined contribution retirement program for employees deemed to be “highly compensated.”
We do not have a pension plan or other defined benefit retirement program. See the discussion titled “Fiscal 2018 Nonqualified Deferred Compensation” under the section “Compensation Tables and Narrative Disclosures” for a description of the Company match program.
Financial planning reimbursement
Reimbursement of actual expenses, up to a pre-determined maximum amount, incurred for financial, estate and tax planning.
Attract and retain executive-level employees.
We reimburse up to $12,500 for our CEO and up to $8,000 for our other executive officers.
Additional life insurance
Additional coverage, above the amount provided to all employees.
Attract and retain executive-level employees.
The additional coverage is $1,000,000 for our CEO and $750,000 for our other executive officers.
Additional long-term disability
Ÿ  Additional coverage at 90 days of continuous disability, above the amount provided to all employees.
Ÿ  Attract and retain executive-level employees.
Total long-term disability coverage is 75% of regular wages, up to a monthly maximum of $32,500 for our CEO and our President and up to $27,500 for our other executive officers, subject to potential reductions for other types of income received.
Use of corporate aircraft for personal travel (certain executives only)
Facilitate flexible travel arrangements and provide security.
We have a program that limits personal travel on our corporate aircraft such that compensation reportable in the Summary Compensation Table does not exceed $250,000 for our CEO and $650,000 for all of our executive officers in the aggregate.
Severance and Change in Control Benefits
• Provide severance payments and benefits upon a qualifying termination of employment, before or following a change in control of the Company.
• Provide transition income replacement that will allow the executive to focus on business priorities.
We believe the levels of severance provided by our Executive Officer Severance Plan (the “Severance Plan”) and our Executive Officer Change in Control Severance Plan (the “CIC Severance Plan”), are consistent with the practices of our compensation peer group and are necessary to attract and retain key executives. In connection with our CIC Severance Plan, we do not provide for any “single trigger” payments. Our plans do not provide for any gross-ups for excise taxes imposed as a result of severance or other payments deemed made in connection with a change in control. These plans are described in more detail below.

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Compensation Discussion & Analysis

Figure 11: Fiscal 2018 U.S. All-Employee Benefits
Component
Form and Purpose
Comment
401(k) Plan
Provide a tax-efficient retirement savings opportunity.
Attract and retain employees.
The 401(k) Plan is a tax-qualified deferred compensation plan. We match employee contributions in cash using a tiered structure in order to encourage participation among all employees. If an employee contributes the maximum amount permitted under IRS rules, including the maximum catch-up contributions for employees age 50 or older, the Company’s match would be $6,125.
Employee Stock Purchase Plan (ESPP)
Qualcomm stock.
Encourage stock ownership and align employee and stockholder interests.
Attract and retain employees.
The ESPP is a tax-qualified plan available to all U.S.-based employees. Purchases through payroll deductions are limited to $12,500 in fair market value (FMV) of our common stock per 6-month offering period (determined on the first day of each offering period). The purchase price is equal to 85% of the lower of: (1) the FMV on the first day of the offering period or (2) the FMV on the last day of the offering period.
Charitable contribution match
Matching cash paid to the charitable organization.
Encourage and extend employees’ support of cultural, educational and community non-profit organizations.
We match 100% of employee contributions, up to predefined maximum amounts, to qualified tax-exempt non-profit organizations, excluding organizations that further religious doctrine, exclusionary organizations and/or political non-profit organizations. The maximum annual amount we will match is based on the employee’s job level. We will match up to $125,000 for our CEO and our President and up to $100,000 for our other executive officers.

Executive Severance and CIC Benefits

Severance Plan. The Compensation Committee recognizes that the possibility of the termination of an executive officer’s employment, and the uncertainty it creates, may result in the loss or distraction of the executive officer, and present challenges in recruiting potential executive officers, all to the detriment of the Company and its stockholders. The Committee considers the avoidance of such loss, distraction and challenges to be essential to protecting and enhancing the best interests of the Company and its stockholders. To help ensure that the Company has the continued attention and dedication of these executives and the availability of their continued service, to facilitate the Company’s recruiting efforts and to provide severance benefits upon a qualifying termination that are consistent with the Company’s peers, on September 20, 2018, the Committee adopted the Severance Plan. The plan covers our CEO, President and Executive Vice Presidents in circumstances not covered by the CIC Severance Plan (described below). 

Pursuant to the Severance Plan, if a participant’s employment is terminated by the Company without Cause or by the participant for Good Reason (in each case, as defined in the Severance Plan) prior to a change in control or otherwise as not covered in the CIC Severance Plan, then the participant will receive, subject to the participant’s execution and compliance with a separation agreement containing a release and non-disparagement agreement and an Invention Disclosure, Confidentiality and Propriety Rights Agreement:

(i) a severance payment of one and a half times the participant’s annual base salary and target bonus (except the multiplier is two in the case of our CEO); (ii) a pro rata target bonus for the year in which the termination occurs; and (iii) continued payment for the cost of the participant’s premiums for health continuation coverage under COBRA for a period equal to the number of months of severance pay but no longer than the end of the COBRA period (collectively, the ”Severance Payment”); and

Additional vesting of RSUs equal to (i) the number of RSUs under the award multiplied by a fraction, the numerator of which is the number of months from the date of grant through the first anniversary of the date of termination (or the final vesting date of the award, if earlier) and the denominator of which is the full number of months from the date of grant until the final vesting date, minus (ii) the number of RSUs (if any)

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Compensation Discussion & Analysis

that have vested prior to the date of termination; pro rata vesting of PSUs based on length of service and actual performance through the end of the year in which the termination occurs; and pro rate vesting of PSOs based on length of service but only exercisable if the TSR performance objective is achieved within two years.

CIC Severance Plan. The Company maintains the CIC Severance Plan for executive officers (specifically our CEO, President and Executive Vice Presidents). The CIC Severance Plan, which was adopted by the Board in May 2018, supports the Company’s compensation philosophy of attracting and retaining top executive talent and was adopted for the same reasons as articulated under the description of the Severance Plan above. In addition to the type of severance that is provided under the Severance Plan, the CIC Severance Plan provides for additional equity acceleration, as further described below, as a means of focusing executive officers on stockholder interests when considering strategic alternatives.

The CIC Severance Plan is intended to provide change in control severance coverage to the Company’s executive officers who are not covered participants in the Company’s Non-Executive Officer Change in Control Severance Plan that was adopted by the Board in December 2017.

Pursuant to the CIC Severance Plan, if a participant’s employment is terminated by the Company without Cause or by the participant for Good reason (in each case, as defined in the CIC Severance Plan) after a “change in control” (as defined in the 2016 Long Term Incentive Plan), the participant will receive, subject to the participant’s execution and compliance with a separation agreement containing a release, the Severance Payment.

The CIC Severance Plan provides that following a change in control, outstanding PSUs will vest in full upon a qualifying termination of employment. In addition, upon such a termination, the ROIC performance metric will be deemed achieved at target level and the TSR performance metric will be measured based on actual performance. The provision of the CIC Severance Plan related to PSUs applies retroactively to existing award agreements. The PSU award agreements underlying the PSUs granted in September 2018, and future PSU award agreements, will include this provision. Consistent with the CIC Severance Plan, our equity award agreements require a “double-trigger” event for an acceleration of vesting.

The CIC Severance Plan also provides that if a participant would be subject to the excise tax under Section 280G of the Internal Revenue Code, the payments will be reduced so that the participant is not subject to the tax, if such a reduction would place the participant in a better after-tax position than if the participant received the payments and paid the tax.

Please see the “Executive Compensation-Potential Payments Upon Termination or Change-in-Control” section of this Proxy Statement for further information regarding the Severance Plan, the CIC Severance Plan, and details on the treatment of equity awards upon various types of employment terminations. 


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Compensation Discussion & Analysis

PROCESS AND RATIONALE FOR EXECUTIVE COMPENSATION DECISIONS
 
 
 
 
 
The Compensation Committee considers several factors in determining the compensation of our executive officers. The Compensation Committee does not have a predefined framework that determines which of these factors may be more or less important, and the emphasis placed on specific factors may vary among our executive officers. Ultimately, it is the Compensation Committee’s judgment about these factors that forms the basis for determining our executive officers’ compensation.
Late in the fourth quarter of each fiscal year, the Compensation Committee sets salaries and ACIP targets for the next fiscal year and grants annual equity awards for the nearly completed fiscal year. Granting annual equity awards at the end of the fiscal year allows the Compensation Committee to consider anticipated absolute and relative financial performance and TSR for that year. Granting awards after the annual meeting of stockholders (which takes place during the second quarter of the fiscal year) also allows the Compensation Committee to consider feedback from stockholders through the annual “Say-on-Pay” advisory vote and from other stockholder engagement efforts.
In executive session without our CEO or other executive officers present, the Compensation Committee approved our CEO’s and other executive officers’ fiscal 2018 equity award amounts, the fiscal 2018 ACIP earned amounts, and any adjustments to base salaries and ACIP targets for fiscal 2019. In making these decisions, and in determining the amounts and mix of executive compensation, the Compensation Committee considered the following factors, among others:
Feedback from other Board members regarding the leadership contributions of our CEO and other executive officers to our annual and long-term performance;
Feedback from the Compensation Committee members;
Our business performance;
Feedback from our CEO regarding our business performance, his performance and his evaluation of and compensation recommendations for the other executive officers;
The executive officers’ individual performance and contributions to financial and strategic objectives, including expertise, skills and tenure in position;
Labor market conditions and the executive officers’ potential to assume increased responsibilities;
Operational management, such as project milestones, process improvements and expense management;
Internal working and reporting relationships and teamwork among our executive officers (for example, using the same ACIP financial metrics and objectives for all executive officers promotes teamwork and collaboration and our executive officers’ contribution to Company-wide initiatives);
The Compensation Committee’s intention for compensation to be internally fair and equitable relative to roles, responsibilities and relationships, in addition to being competitively reasonable;
Developing and motivating employees (such as establishing processes for identifying and assessing high potential employees) and attracting and retaining employees (such as initiatives to increase the pipeline of women in leadership roles); and
Leadership actions that support our ethical standards and compliance culture.
The Compensation Committee reviews the compensation practices of peer companies with which we compete for talent.
The Compensation Committee identified peer companies to use for competitive analyses, considering recommendations made by FW Cook. The peer companies were identified based on the following characteristics:
Technology, telecommunications and media companies (excluding those that are primarily content producers) based on Global Industry Classification Standard codes; and
Companies of comparable size, with both market capitalization and revenues generally between 0.25x to 4.0x Qualcomm’s market capitalization and revenues.
The Compensation Committee used market capitalization as a quantitative criterion because:

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Compensation Discussion & Analysis

Market capitalization, a key component of which is stock price, is the key driver of equity compensation grant value, and equity compensation grant value is the single largest component of CEO compensation among technology companies with large market capitalizations;
Market capitalization is directly related to stockholder benefit; and
A significant portion of our business is technology licensing, which is a high-margin business, and as such, Qualcomm typically has higher market capitalization and profit than companies with similar revenues.
The Compensation Committee also included revenues as a quantitative criterion because revenues are commonly used as a selection criterion by our peer companies, third-party compensation survey providers and proxy advisory services.
Figure 13 identifies the peer companies that the Compensation Committee approved in September 2018 for purposes of determining our executive officers’ equity grants. The peer companies and Qualcomm are ranked, high-to-low, on revenues, EBITDA (defined as earnings before interest, income taxes, depreciation and amortization) and market capitalization. Compared to the prior year’s peer group, which the Compensation Committee continued to use to determine our executive officers’ salaries and bonus targets at the conclusion of the prior year, Alphabet, Microsoft and Verizon were removed because they were no longer within the size criteria, and they were replaced with Micron Technology, NVIDIA and Salesforce.com, all of which satisfy the defined size and industry criteria and are viewed as relevant labor market competitors.

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Compensation Discussion & Analysis

Figure 13: Qualcomm’s Relative Rankings Among Peer Companies as of September 10, 2018 (1)

Revenue
 
EBITDA
 
Market Cap
Company
Ticker
$ Millions
 
Ticker
$ Millions

 
Ticker
$ Millions
Comcast
CMCSA
$87,179
 
INTC
$28,972
 
FB
$498,392
IBM
IBM
$80,771
 
CMCSA
$28,388
 
V
$311,605
Intel
INTC
$66,230
 
FB
$27,395
 
INTC
$219,576
Cisco
CSCO
$48,619
 
MU
$17,775
 
CSCO
$215,298
Facebook
FB
$48,497
 
IBM
$17,033
 
ORCL
$192,728
Charter
CHTR
$42,571
 
ORCL
$16,346
 
CMCSA
$163,758
T-Mobile
TMUS
$41,524
 
CHTR
$15,600
 
NVDA
$154,019
Oracle
ORCL
$39,831
 
CSCO
$14,494
 
NFLX
$147,193
Sprint
S
$32,374
 
V
$13,674
 
IBM
$133,237
HP Enterprise
HPE
$30,303
 
S
$12,069
 
TXN
$108,409
Micron Technology
MU
$28,089
 
TMUS
$11,103
 
CRM
$108,116
Qualcomm
QCOM
$22,832
 
AVGO
$8,738
 
QCOM
$97,800
Visa
V
$20,030
 
TXN
$7,422
 
AVGO
$88,029
Broadcom Ltd
AVGO
$19,648
 
QCOM
$6,911
 
CHTR
$70,737
Applied Materials
AMAT
$16,484
 
AMAT
$5,078
 
ADP
$62,663
Texas Instruments
TXN
$15,672
 
NVDA
$4,639
 
MU
$57,921
Netflix
NFLX
$13,879
 
EBAY
$3,001
 
TMUS
$56,349
ADP
ADP
$13,326
 
ADP
$2,918
 
AMAT
$44,112
NVIDIA
NVDA
$11,877
 
HPE
$2,895
 
EBAY
$34,169
Salesforce.com
CRM
$11,089
 
NFLX
$1,440
 
S
$25,143
eBay
EBAY
$10,065
 
CRM
$1,045
 
HPE
$23,890
 
 
 
 
 
 
 
 
 
75th Percentile
 
$47,016
 
 
$16,861
 
 
$185,485
Median
 
$29,196
 
 
$11,586
 
 
$108,263
25th Percentile
 
$14,327
 
 
$3,411
 
 
$56,742
QCOM percentile rank
 
44
%
 
 
36
%
 
 
41
%
(1)
Data reflected in Figure 13 represents the latest four quarters of data available on August 21, 2018 reported in Standard & Poor’s Compustat reports, the time at which FW Cook prepared the peer company selection analysis.
FW Cook provides analyses of peer company competitive practices. The Compensation Committee considers these peer company competitive practices, along with the other factors described in this section, when determining the salaries, ACIP targets, long-term equity grant date fair values and the TDC for our CEO and other executive officers.
The Compensation Committee considers the impact of compensation decisions made in prior years.
Fiscal 2014 Front-Loaded RSUs
In fiscal 2014, the Board determined that strong actions were necessary to retain our senior executive team in the intensely competitive mobile communications industry. Accordingly, in fiscal 2014, the Compensation Committee granted front-loaded RSUs, which accelerated future years’ RSU grant values into fiscal 2014, to encourage retention without making above-market grants or increasing related costs or dilution over time. With respect to Mr. Mollenkopf, the 2014 grants provided for annual vesting over five years rather than the typical three years, and the Compensation Committee indicated that it did not anticipate granting additional time-based RSUs to Mr. Mollenkopf during that five-year period, which ended at the conclusion of fiscal 2018. Accordingly, the Compensation Committee reduced the total equity value that it would have otherwise granted to Mr. Mollenkopf in fiscal 2018 by the annualized value of his fiscal 2014 RSU grants, as the

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Compensation Discussion & Analysis

Compensation Committee deemed those amounts to be attributable to his fiscal 2018 compensation. Messrs. Davis, Amon and Rosenberg and Dr. Thompson received front-loaded RSU grants in fiscal 2014 as well, and the Compensation Committee similarly indicated that it did not anticipate granting additional time-based RSUs to them during the relevant period. However, their front-loaded values covered only three years. As a result, they had similar annual equity grant value reductions through fiscal 2016 and received regular RSU grants in fiscal 2018.
Only Performance-Based Equity During Periods Covered by Front-Loaded RSUs
As noted above, the Compensation Committee committed that it would grant only performance-based equity to our executive officers during the periods covered by the fiscal 2014 front-loaded RSUs, and the Compensation Committee fulfilled that commitment.
The Compensation Committee engages independent advisors.
The Compensation Committee has the authority to engage and terminate any independent compensation consultant and to obtain advice and assistance from external legal, accounting and other advisors. As previously described, the Compensation Committee engaged FW Cook, an independent executive compensation consulting firm, to advise it on compensation matters during fiscal 2018. FW Cook reports directly to the Compensation Committee. The Company did not engage FW Cook for any services during fiscal 2018. The Compensation Committee’s engagement of FW Cook did not raise any conflicts of interest. Pursuant to the engagement, FW Cook:
Provided information, insights and advice regarding compensation philosophy, objectives and strategy;
Recommended peer group selection criteria and identified and recommended potential peer companies;
Provided analyses of competitive compensation practices for executive officers and non-employee directors;
Provided analyses of potential risks arising from executive and non-executive compensation programs;
Provided analyses of aggregate equity compensation spending and related dilution;
Reviewed and commented on recommendations regarding executive officer compensation amounts;
Advised the Compensation Committee on specific issues as they arose, including engagement with stockholders; and
Kept the Compensation Committee informed of executive compensation trends and regulatory and governance considerations related to executive compensation.
The Compensation Committee also sought and received advice from our outside legal counsel, DLA Piper LLP. Additional legal advice was sought and received from Jeremy L. Goldstein and Associates, LLP during the implementation of the Executive Officer Severance Plan and the Executive Officer Change in Control Severance Plan. Our human resources department supported the Compensation Committee in its work, collaborated with FW Cook and DLA Piper, conducted additional analyses and managed our compensation and benefit programs.
The Compensation Committee Considers Tax Efficiency.
Prior to its amendment by the Tax Cuts and Jobs Act (the “Tax Legislation”), which was enacted December 22, 2017, Section 162(m) of the Internal Revenue Code disallowed a tax deduction to public companies for compensation paid in excess of $1 million to “covered employees” (generally, such company’s chief executive officer and its three other highest paid executive officers other than its chief financial officer). Prior to the Tax Legislation, there was an exception to this $1 million limitation for performance-based compensation if certain requirements were met. The Compensation Committee historically designed our compensation programs based on its belief that a substantial portion of the compensation payable to the Company’s executive officers should be based on the achievement of performance-based targets or otherwise be designed with the intent that such compensation qualifies as deductible performance-based compensation under Section 162(m). In prior years, awards to these covered individuals under our ACIP and both our annual grants of RSUs and PSUs were intended to satisfy the requirements for qualifying as performance-based compensation under Section 162(m).

The Tax Legislation generally amended Section 162(m) to eliminate the exception for performance-based compensation, effective for the Company in fiscal 2019. The $1 million compensation limit was also expanded to apply to a public company’s chief financial officer and apply to certain individuals who were covered employees in years other than the then-current taxable year. The Tax Legislation provides for “grandfathering” of awards in effect as of November 2, 2017 if certain conditions are met, including lack of modification of the terms of the awards. As in prior years, the Compensation Committee will continue to take into account the tax and accounting implications (including with respect to the expected

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Compensation Discussion & Analysis

lack of deductibility under the revised Section 162(m)) when making compensation decisions, but reserves its right to continue to make compensation decisions based on other factors if it determines that it is in the best interests of the Company and its stockholders to do so. Further, considering the elimination of the exception for performance-based compensation, the Compensation Committee may determine to make changes or amendments to the Company’s existing compensation programs in order to revise aspects of our executive compensation programs that were initially designed to comply with Section 162(m) but that may no longer serve as an appropriate incentive measure for our executive officers. Finally, interpretations of and changes in applicable tax laws and regulations, as well as other factors beyond the control of the Compensation Committee, may affect deductibility of compensation, and there can be no assurance that compensation paid to our executive officers who are covered by Section 162(m) will be deductible in the future.


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Compensation Discussion & Analysis

COMPENSATION PROGRAM BEST PRACTICES
 
 
 
 
 
Our compensation program is market-based and supports our business strategy. We have avoided problematic pay practices and have implemented compensation plans that reinforce a performance-based company culture.
What We Do
þ
A significant portion of our executive officers’ compensation varies with the Company’s performance. For fiscal 2018, 94% of our CEO’s target TDC and 90% of our other NEOs’ aggregate target TDC was based on Company performance (see page 31 in the Executive Summary of the CD&A).
 
þ
We have a balanced approach to incentive programs with differentiated measures and time periods. Our ACIP is based on annual Adjusted Revenues and annual Adjusted EPS performance. PSUs are based on 3-year relative TSR and ROIC performance periods and have a 3-year cliff vest. RSUs vest annually over three years.
þ
We have limits on the amounts of variable compensation that may be earned. Earned amounts under our ACIP are limited to 2x target amounts, and earned PSUs are limited to 2x the target shares. We further limit earned RTSR PSUs to no more than 1x the target shares if absolute TSR is negative over the three-year performance period regardless of the level of relative TSR.
 
þ
We have a cash incentive compensation repayment (“clawback”) policy. We require executive officers to repay to us earned amounts under our ACIP if required by our clawback policy, SEC regulations or stock exchange rules.
þ
We have robust stock ownership guidelines. Our CEO is
required to own 6x his salary, our President is required to
own 3x his salary, and our other executive officers are
required to own 2x their respective salaries in our
common stock. All NEOs have met their stock ownership guidelines. Additional information regarding stock ownership of management is contained in the “Stock Ownership of Certain Beneficial Owners and
Management” section on page 25.
 
þ
We manage potential compensation-related risks to the Company. We perform annual risk assessments for our executive compensation program, as well as incentive arrangements below the executive level. This review is conducted by FW Cook, the Compensation Committee’s independent compensation consultant.
þ
Our 2006 Long-Term Incentive Plan (LTIP), 2016 LTIP and CIC Severance Plan include a “double-trigger” provision for vesting of equity in connection with a change in control. In the event of a change in control where the acquirer assumes our outstanding unvested equity awards, the vesting of an executive officer’s awards would accelerate only if the executive officer was involuntarily terminated other than for Cause or the executive officer voluntarily resigned for Good Reason during a specified period after the change in control. If the awards are not assumed, the awards will vest in accordance with the terms of the LTIP.
 
þ
We engage independent advisors. We obtain advice and assistance from external legal, accounting and other advisors. Our independent compensation consultant, FW Cook, provides information and advice regarding compensation philosophy, objectives and strategy, including trends and regulatory and governance considerations related to executive compensation.
What We Don’t Do
ý
Our executive officers are restricted in certain stock trading activities. Our insider trading policy, as applicable to executive officers, including NEOs and non-employee directors, prohibits the hedging and pledging of our common stock and trading in put and call options and other types of equity derivatives.
 
ý
All of our U.S. employees, including all of our executive officers, are employed “at will,” permitting termination of employment with or without Cause.
ý
Our executive officers do not receive unique tax gross-ups. We do not provide tax gross-ups for benefits unless they are provided under a policy generally applicable to all U.S.-based employees, such as relocation.
 
ý
Our executive officers are not covered by “single trigger” change-in-control provisions. We do not have severance arrangements that trigger solely by virtue of a change in control (i.e., no “single trigger” payments) or excise tax gross-ups for change-in-control payments.

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COMPENSATION RISK MANAGEMENT
One element of the Compensation Committee’s engagement of FW Cook, the Compensation Committee’s independent compensation consultant, was for FW Cook to collaborate with Qualcomm’s human resources staff to assess potential risks that may arise from our compensation programs. Based on this assessment, the Compensation Committee concluded that our policies and practices do not encourage excessive or unnecessary risk taking that would be reasonably likely to have a material adverse effect on Qualcomm. The assessment included executive and non-executive programs and focused on the variable components of cash incentives and equity awards. Our compensation programs are designed and administered by our corporate compensation and benefits staff and are substantially identical among business units, corporate functions and global locations (with modifications to comply with local regulations as appropriate). The risk-mitigating factors considered in this assessment included:
The alignment of pay philosophy, peer group companies and compensation levels relative to competitive practices to support our business objectives;
Effective balance of cash and equity, short- and long-term performance periods, limits on performance-based award schedules, Company financial metrics with consideration of individual performance factors and Compensation Committee discretion; and
Ownership guidelines, a clawback policy, an insider trading policy, an equity award approval authorization policy and independent Compensation Committee oversight.

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Compensation Tables and Narrative Disclosures

COMPENSATION TABLES AND NARRATIVE DISCLOSURES
The following tables, narratives and footnotes describe the total compensation and benefits awarded to, earned by or paid to our NEOs during fiscal 2018.
SUMMARY COMPENSATION TABLE
 
 
 
 
 
The following table shows information regarding compensation of each NEO for fiscal 2018, 2017 and 2016, except in the case of Mr. Amon and Dr. Thompson, who were not NEOs in fiscal 2016, and Mr. Rosenberg, who was not an NEO in fiscal 2016 or 2017.
Fiscal 2018 Summary Compensation Table (1)(2)
Name and Principal Position
Year
Salary
($) (3)
Stock
Awards
($) (4)
Option Awards ($) (5)
Non-Equity Incentive Plan Compensation
($) (6)
All Other Compensation
($) (7)
Total
($)
Steve Mollenkopf
Chief Executive Officer 
2018
1,390,739

10,000,072

6,003,095

2,260,000

321,566

19,975,472

2017
1,156,079

8,000,035


2,260,000

175,196

11,591,310

2016
1,138,694

8,000,114


1,762,000

165,204

11,066,012

George S. Davis
Executive Vice President and Chief Financial Officer
2018
875,083

5,500,133


1,064,000

122,990

7,562,206

2017
760,011

5,000,083


1,050,000

181,149

6,991,243

2016
760,011

2,700,080


870,640

163,419

4,494,150

Cristiano R. Amon
President
2018
916,964

11,000,110


1,575,000

132,825

13,624,899

2017
750,006

6,675,108


1,250,000

74,627

8,749,741

2016
 
 
 
 
 


James H. Thompson
Executive Vice President, Engineering, Qualcomm Technologies, Inc. and Chief Technology Officer
2018
905,634

7,000,156


1,036,000

194,792

9,136,582

2017
723,102

6,200,077


1,100,000

169,396

8,192,575

2016
 
 
 
 
 
 
Donald J. Rosenberg
Executive Vice President and General Counsel
2018
886,170

4,500,053


1,008,000

202,436

6,596,659

2017
 
 
 
 
 
 
2016
 
 
 
 
 
 

(1)
We do not offer a pension plan or other defined benefit retirement plan to our executive officers. We do not provide above-market or preferential earnings on deferred compensation, nor do we provide dividends on stock in the Non-Qualified Deferred Compensation (NQDC) Plan at a rate higher than dividends on our common stock. Accordingly, the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column has been omitted from the Fiscal 2018 Summary Compensation Table.
(2)
No bonuses were granted to our NEOs in fiscal 2018. Accordingly, the “Bonus” column has been omitted from the Fiscal 2018 Summary Compensation Table.
(3)
Salaries for NEOs as presented in this column may include vacation match payments payable under our vacation policy, as well as payments for amounts reflecting accrued vacation in connection with the Company’s change in policy to eliminate the accrual of vacation time for certain employees. This column also includes portions of our NEOs’ salaries that they may have deferred pursuant to the NQDC Plan. See “Fiscal 2018 Nonqualified Deferred Compensation” table.

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Compensation Tables and Narrative Disclosures

(4)
Stock awards granted to NEOs include annual grants and may include special grants for new hires, promotions and/or retention. The amounts in this column represent the grant date fair values of PSUs and RSUs granted during the applicable fiscal year. The grant date fair values of RSUs and ROIC PSUs were determined based on the fair value of our common stock on the date of grant. The grant date fair values of RTSR PSUs were determined based on a Monte Carlo simulation (which probability weights multiple potential outcomes). The amounts may not be indicative of the realized value of the awards if and when they vest. See the “Compensation Discussion and Analysis” section and the “Fiscal 2018 Grants of Plan-Based Awards” table for details on the stock awards granted to our NEOs during fiscal 2018. If we assume that the highest level of performance conditions will be achieved with respect to the PSUs (and thus the maximum number of shares will be issued under the PSUs), using the fair value of our common stock on the grant date for such shares, the fiscal 2018 stock awards would be as follows: $20,000,145 for Mr. Mollenkopf; $8,470,207 for Mr. Davis; $15,320,179 for Mr. Amon; $10,780,278 for Dr. Thompson; and $6,930,106 for Mr. Rosenberg.
(5)
The grant date fair values of the Performance Stock Options (PSOs) were determined based on a Monte Carlo simulation (which probability weights multiple potential outcomes). The amounts may not be indicative of the realized value of the awards if and when they vest. See the “Compensation Discussion and Analysis” section and the “Fiscal 2018 Grants of Plan-Based Awards” table for details on the PSOs granted to Mr. Mollenkopf during fiscal 2018.
(6)
The amounts in this column represent cash awards earned under our annual cash incentive plan (ACIP) for performance during the applicable fiscal year. The Compensation Committee approved the fiscal 2018 ACIP amounts on December 9, 2018, and our NEOs received payment in December 2018. See the “Compensation Discussion and Analysis” section and the “Fiscal 2018 Grants of Plan-Based Awards” table for a description of the ACIP and the payments made thereunder. This column includes portions of our NEOs’ ACIP amounts that they may have deferred pursuant to the NQDC Plan. See the “Fiscal 2018 Nonqualified Deferred Compensation” table.
(7)
See the “Fiscal 2018 All Other Compensation” table for an itemized account of all other compensation reported in this column for fiscal 2018.
ALL OTHER COMPENSATION
 
 
 
 
 
We provide our NEOs with other compensation that is reasonable and consistent with our executive compensation program and supports our efforts to attract and retain executive-level employees. The cost of these benefits are disclosed in the All Other Compensation column of the “Fiscal 2018 Summary Compensation Table” and are itemized in the “Fiscal 2018 All Other Compensation” table below.
Fiscal 2018 All Other Compensation
Name
Perquisites and Other Personal Benefits
($) (1)
Nonqualified Deferred Compensation Plan
($) (2)
Charitable Match
($) (3)
Company Matching 401k Contributions
($) (4)
Life Insurance Premiums
($) (5)
All Other Compensation Total
($)
Steve Mollenkopf
182,021

56,500

75,000

5,525

2,520

321,566

George S. Davis
10,019

72,400

29,000

5,631

5,940

122,990

Cristiano R. Amon
10,226

80,924

34,800

5,525

1,350

132,825

James H. Thompson
12,707

73,140

100,000

5,525

3,420

194,792

Donald J. Rosenberg
14,080

70,801

100,000

6,125

11,430

202,436

(1)
Perquisites and other personal benefits for an NEO are excluded if the total value of all of such perquisites and personal benefits is less than $10,000. If the total value of all perquisites and personal benefits for an NEO is $10,000 or more, then each perquisite or personal benefit, regardless of its amount, is identified by type. Each perquisite or personal benefit that exceeds the greater of $25,000 or 10% of the total amount of perquisites and personal benefits for that NEO is identified by type and quantified.
The amounts in this column include: Mr. Mollenkopf - $174,327 for the personal use of our corporate aircraft and the remainder for other insurance premiums; Mr. Davis - for other insurance premiums and financial planning; Mr. Amon - for the personal use of our corporate aircraft, other insurance premiums and financial planning; Dr. Thompson - for other insurance premiums, financial planning and personal expenses related to travel; and Mr. Rosenberg - for the

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Compensation Tables and Narrative Disclosures

personal use of our corporate aircraft, other insurance premiums, home office costs and financial planning. Under certain circumstances, our executive officers may utilize our corporate aircraft for personal use. In those instances, the value of the benefit is based on the aggregate incremental cost to the Company. Incremental cost is calculated based on the variable costs to the Company, including fuel costs, mileage, certain maintenance costs, universal weather-monitoring costs, on-board catering, landing/ramp fees and certain other miscellaneous costs. Fixed costs that do not change based on usage, such as pilot salaries, are excluded.
(2)
The amounts disclosed represent the cash match of our NEOs’ contributions made in the 2017 calendar year. See the Nonqualified Deferred Compensation discussion for a description of the NQDC Plan and the Company match program thereunder.
(3)
We match 100% of an employee’s contributions, up to predetermined maximum amounts, to encourage and extend employees’ support of qualified tax-exempt non-profit organizations, excluding organizations that further religious doctrine, exclusionary organizations or political organizations. The amounts disclosed represent our matching contributions for NEO contributions to cultural, education and community non-profit organizations. We will match up to $125,000 for our CEO and our President and up to $100,000 for our other executive officers.
(4)
Our 401(k) plan is a voluntary, tax-qualified deferred compensation plan available to all U.S. employees. We match employee contributions in cash, up to certain limits, using a tiered structure in order to encourage participation among our U.S.-based employees. This program provides a tax-efficient retirement savings opportunity. The amounts disclosed represent the cash value of the Company match of our NEO’s contributions to the 401(k) plan.
(5)
We provide our executive officers additional life insurance above the amounts provided to other employees (executive life insurance). The additional coverage is $1 million for our CEO and $750,000 for our other executive officers. The amounts disclosed represent the premiums paid for such executive life insurance, as well as group term life insurance greater than $50,000.
CEO PAY RATIO
 
 
 
 
 

We are providing the following information regarding the relationship of the annual total compensation of our CEO compared to the annual total compensation of our median employee.

For fiscal 2018, our last completed fiscal year:

the annual compensation of our CEO, as reported in the Summary Compensation Table included on page 54 of this proxy statement, was $19,975,472;
the annual total compensation of our median employee was $85,592; and
the resulting ratio was 233 : 1.

Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K using data and assumptions summarized below.

To identify our median employee, we first determined our employee population (excluding our CEO) as of September 30, 2018 (the Determination Date). We had 35,400 employees located in 36 countries, representing all full-time, part-time, seasonal and temporary workers as of the Determination Date. This number does not include any independent contractors or “leased” workers, as permitted by the applicable SEC rules.

We then measured the employee population’s total direct compensation in fiscal 2018 for our consistently applied compensation measure based on information from our Human Resources management systems. This compensation measurement was calculated by totaling, for each employee, his or her annual base salary as of the Determination Date, target annual bonus in fiscal 2018 and the grant date fair value of equity granted in fiscal 2018. Once we identified our median employee, we then determined the annual total compensation of this median employee. We believe this is a reasonable estimate of the relationship between the pay of our CEO and the pay of our median employee.

56qclogofltrgbbluposcrop.jpg2019 Proxy Statement


Compensation Tables and Narrative Disclosures

GRANTS OF PLAN-BASED AWARDS
 
 
 
 
 
The following table shows information regarding the incentive awards granted to our NEOs in 2018. See the “Compensation Discussion and Analysis” section for detailed information regarding our annual cash incentive plan and equity award programs.
Fiscal 2018 Grants of Plan-Based Awards (1)(2)
Name
Type of Award
Grant Date
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
Estimated Future Payouts Under Equity Incentive Plan Awards
All other Stock Awards: Number of shares of stock or units
(#)
All Other Option Awards: Number of Securities Underlying Options (#) (3)
Exercise Price of Option Awards ($/Sh)
Grant Date Fair Value of Stock and Option Awards
 ($) (4)
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Steve Mollenkopf
ACIP
 
22,600

2,260,000

4,520,000

 
 
 
 
 
 
 
Performance Stock Option
09/20/18
 
 
 
 
 
 
 
496,397

74.60
6,003,095
RTSR PSUs
09/20/18