DEF 14A 1 proxy2015.htm DEF 14A Proxy 2015

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.    )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [   ]
Check the appropriate box:
[   ]  Preliminary Proxy Statement
[   ]  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[   ]  Definitive Additional Materials
[   ]  Soliciting Material Pursuant to Section 240.14a-12

QUALCOMM INCORPORATED

 (Name of Registrant as Specified In Its Charter)
 (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
 
[X]
No fee required.
[   ]
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
(1)
Title of each class of securities to which transaction applies:
 
(2)
Aggregate number of securities to which transaction applies:
 
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
(4)
Proposed maximum aggregate value of transaction:
 
(5)
Total fee paid:
[   ]
Fee paid previously with preliminary materials.
[   ]
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
(1)
Amount Previously Paid:
 
(2)
Form, Schedule or Registration Statement No.:
 
(3)
Filing Party:
 
(4)
Date Filed:





January 22, 2015

Dear Fellow Stockholder:
You are cordially invited to attend Qualcomm’s 2015 Annual Meeting of Stockholders (the Annual Meeting) on Monday, March 9, 2015. The meeting will begin promptly at 2:00 p.m. Pacific Time at the Irwin M. Jacobs Qualcomm Hall, 5775 Morehouse Drive, San Diego, California 92121. I invite you to arrive early at 1:00 p.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 presentations and a report on Qualcomm’s fiscal 2014 performance.
This year, we are again furnishing the proxy materials to stockholders primarily over the Internet. Therefore, most stockholders will not receive paper copies of our proxy materials. We will instead send these stockholders a notice with instructions for accessing the proxy materials and voting via the Internet. The notice also provides information on how stockholders may obtain paper copies of our proxy materials if they so choose. This method expedites the receipt of your proxy materials, lowers the costs of our annual meeting and helps to conserve natural resources.
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 we recommend.
I look forward to seeing you in San Diego at the Irwin M. Jacobs Qualcomm Hall on Monday, March 9, 2015.
Sincerely,

Steven M. Mollenkopf
Chief Executive Officer




5775 Morehouse Drive
San Diego, California 92121-1714
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On March 9, 2015
To the Stockholders of QUALCOMM Incorporated:
NOTICE IS HEREBY GIVEN that the 2015 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 Monday, March 9, 2015 at 2:00 p.m. Pacific Time for the following purposes:

1.
To elect 15 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 27, 2015.
3.
To approve an amendment to the 2001 Employee Stock Purchase Plan to increase the share reserve by 25,000,000 shares.
4.
To hold an advisory vote to approve our executive compensation.
5.
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 12, 2015 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,


Donald J. Rosenberg
Executive Vice President,
General Counsel and Corporate Secretary
San Diego, California
January 22, 2015




TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
Performance Measurement Comparison of Stockholder Return
 
 
 
 
 
 
 
 

i


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


ii


PROXY SUMMARY
This summary highlights information contained elsewhere in our proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.
2015 ANNUAL MEETING OF STOCKHOLDERS (ANNUAL MEETING)
 
 
 
Date and Time
  
March 9, 2015
2:00 p.m. Pacific Time
Location
  
Irwin M. Jacobs Qualcomm Hall
5775 Morehouse Drive, San Diego, California 92121
Record Date
  
January 12, 2015
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.
Date of First Distribution
of Proxy Materials
  
January 22, 2015
VOTING MATTERS AND BOARD RECOMMENDATIONS
 
 
 
 
 
 
 
Proposal
  
  
  
Board Recommendation
  
Page Reference
PROPOSAL 1
  
Election of Directors
  
FOR each Nominee
  
18
PROPOSAL 2
  
Ratification of the selection of PricewaterhouseCoopers LLP as our independent public accountants for our fiscal year ending September 27, 2015
  
FOR
  
27
PROPOSAL 3
 
Approval of an amendment to the 2001 Employee Stock Purchase Plan to increase the share reserve by 25,000,000 shares
 
FOR
 
29
PROPOSAL 4
  
Advisory vote to approve our executive compensation
  
FOR
  
33

1



DIRECTOR NOMINEES (SEE PAGE 18)
 
 
 
 
 
  
 
  
 
  
 
  
 
  
 
Committee
Memberships
Name
 
Age
 
Director
Since
 
Occupation
 
Independent 
 
AC
 
CC
 
GC
 
FC
Barbara T. Alexander
 
66
 
2006
 
Independent Consultant
 
X
 
 
 
X
 
 
 
 
Donald G. Cruickshank
 
72
 
2005
 
Chairman, 7digital Group plc
 
X
 
X
 
 
 
 
 
 
Raymond V. Dittamore
 
71
 
2002
 
Retired Audit Partner, Ernst &Young LLP
 
X
 
C
 
 
 
 
 
 
Susan Hockfield
 
63
 
2012
 
President Emerita and Professor of Neuroscience, Massachusetts Institute of Technology
 
X
 
 
 
 
 
 
 
X
Thomas W. Horton
 
53
 
2008
 
Former Chairman, American Airlines Group Inc.
 
X
 
X
 
 
 
 
 
 
Paul E. Jacobs
 
52
 
2005
 
Executive Chairman and Chairman of the Board, QUALCOMM Incorporated
 
 
 
 
 
 
 
 
 
 
Sherry Lansing*
 
70
 
2006
 
Founder and Chair, The Sherry Lansing Foundation
 
X
 
 
 
 
 
C
 
 
Harish Manwani
 
61
 
2014
 
Former Chief Operating Officer, Unilever
 
X
 
 
 
 
 
 
 
 
Steven M. Mollenkopf
 
46
 
2013
 
Chief Executive Officer, QUALCOMM Incorporated
 
 
 
 
 
 
 
 
 
 
Duane A. Nelles
 
71
 
1988
 
Self-Employed, Personal Investment Business
 
X
 
 
 
 
 
 
 
C
Clark T. Randt, Jr.
 
69
 
2013
 
President, Randt & Co. LLC
 
X
 
 
 
 
 
X
 
 
Francisco Ros
 
64
 
2010
 
Founder and President, First 
International Partners, S.L.
 
X
 
 
 
 
 
 
 
X
Jonathan J. Rubinstein
 
58
 
2013
 
Former Chairman and CEO, Palm, Inc.
 
X
 
 
 
X
 
 
 
 
Brent Scowcroft
 
89
 
1994
 
President, The Scowcroft Group, Inc.
 
X
 
 
 
 
 
X
 
 
Marc I. Stern
 
70
 
1994
 
Chairman, The TCW Group, Inc.
 
X
 
 
 
C
 
 
 
 
AC    Audit Committee
CC    Compensation Committee
GC    Governance Committee
FC     Finance Committee
C    Committee Chair
*     Presiding Director


2


EXECUTIVE COMPENSATION HIGHLIGHTS (SEE PAGE 40)
 
 
 
 
 
Organization Changes and Special Compensation Actions
Senior Management Changes. During the fiscal year, competition for proven business leaders with expertise in mobile communication technology was intense. Several members of Qualcomm’s senior management team were aggressively targeted by peer companies’ recruiting efforts, some of which were publicly discussed in the business press. Companies with interests in the mobile communications industry appear to view Qualcomm’s senior management team as an attractive source of talent. As a result, Qualcomm lost several senior level employees to other companies. The Board addressed this challenge through a combination of organizational changes and compensation actions to retain key leaders who have worked together to build the Company for over 13 years and have positioned it well for the future.
Immediately after the annual meeting of stockholders on March 4, 2014, Steven M. Mollenkopf began serving as Chief Executive Officer (CEO). Dr. Paul E. Jacobs simultaneously stepped down as CEO and became Executive Chairman. On March 10, 2014, Derek K. Aberle was appointed President. Mr. Mollenkopf, as the CEO, sets corporate strategy, leads the operations of the Company, oversees product development and manages global relationships. Dr. Jacobs focuses on long-term opportunities in emergent areas and manages certain relationships with key partners around the world in addition to his responsibilities as Chairman of the Board. Mr. Aberle oversees all business divisions and continues to formulate and drive key strategies for diversifying and growing the Company in our core businesses as well as new business initiatives.
Front-Loaded and Special Equity Grants. In fiscal 2014, the Compensation Committee implemented a compensation strategy that was designed to defend the Company and achieve the following objectives:
Continue to align pay with long-term stockholder value through continued emphasis on equity-based incentives;
Maintain annualized compensation targets while changing the timing of certain equity compensation awards to increase retention;
Strengthen retention through extending certain equity compensation awards’ future vesting schedules beyond the typical three years; and
In some cases, further strengthen retention through additional equity compensation that is above competitive practices only as necessary to address immediate retention needs.
Qualcomm’s regular senior executive compensation program consists of salaries, cash incentives and long-term equity incentives in the form of performance stock units (PSUs) for a majority of annual grant value and restricted stock units (RSUs) for the remaining value. The fiscal 2014 special pay actions accelerated the timing of RSU grants that otherwise would have been awarded over the next three to five years (depending on the individual) with these “front-loaded” grants subject to extended periods of vesting tied to continued employment. For the recipients of these front-loaded grants, regular compensation in subsequent years will be reduced by the annualized front-loaded grant value and will consist only of salaries, annual cash incentives and PSUs with multi-year performance periods. The Compensation Committee intends that the annualized value of the front-loaded RSUs, excluding the special retention RSUs, will be no more than half of the annualized value of total equity awarded in the future, including PSUs.
Messrs. Mollenkopf and Aberle received front-loaded RSUs with grant date fair values of $30 million and $16.1 million, respectively. These values reflect five years of annual RSU awards and vest in five equal annual installments (rather than the typical three-year annual vesting period) beginning on the first anniversary of the grant date. These grants represent annual values of $6 million for Mr. Mollenkopf and $3.2 million for Mr. Aberle. Messrs. Mollenkopf and Aberle will be eligible to receive annual RSUs again in fiscal 2019 and will have until March 2019 to comply with the previously established stock ownership guidelines for their new roles of 6x and 3x their annual base salaries, respectively.
Dr. Venkata S.M. “Murthy” Renduchintala and Messrs. George S. Davis and Cristiano R. Amon received front-loaded RSUs with grant date fair values of $6.9 million, $6.9 million and $4.1 million, respectively. These values reflect three years of annual RSU awards and vest in five equal annual installments (rather than the typical three-year annual vesting period) beginning on the first anniversary of the grant date. These grants represent annual values of $2.3 million for

3


Dr. Renduchintala and Mr. Davis and $1.4 million for Mr. Amon. Dr. Renduchintala and Messrs. Davis and Amon will be eligible to receive annual RSUs again in fiscal 2017. The stock ownership guideline for Dr. Renduchintala and Messrs. Davis and Amon is 2x their annual base salaries. Dr. Renduchintala and Mr. Amon have until October 2017, and Mr. Davis has until March 2018 to comply.
The Compensation Committee also granted additional special RSUs to further strengthen retention and ownership alignment. Messrs. Mollenkopf and Aberle received additional special RSUs with grant date fair values of $20 million and $10.5 million, respectively, and Dr. Renduchintala and Mr. Amon each received special RSUs with grant date fair values of $3 million. These special RSUs vest in equal installments on the third, fourth and fifth anniversaries of the grant dates, contingent on their continued employment with the Company. These awards were approved after the Compensation Committee discussed potential competitive new hire award values with its independent compensation consultants. The discussion of new hire award values occurred as a result of actual and ongoing competition for the services of key senior Qualcomm executive officers by some of our competitors.
Dr. Jacobs received a front-loaded RSU grant of $45 million that reflects five years of annual RSU awards and vests in equal installments on the third, fourth and fifth anniversaries of the grant date, contingent on his continued employment with the Company, and he must hold the net after-tax shares delivered at vesting until at least one year following retirement or earlier separation of service from the Company. This grant represents an annual value of $9 million. Going forward, for serving as Executive Chairman, Dr. Jacobs will receive an annual salary of $1 and will be eligible for annual grants of PSUs at the Compensation Committee’s discretion. Dr. Jacobs will not be eligible for an annual cash incentive.
The table below illustrates the Compensation Committee’s currently anticipated equity award grants for fiscal 2015 through 2019. The Compensation Committee intends that that grant date fair values of PSUs it awards to the named executive officers (NEOs) for fiscal 2015 through 2019 will be similar to the grant date fair values of the fiscal 2014 awards adjusted to consider then-current competitive practices, company performance, results of advisory votes on executive compensation, changes in roles and any other factors the Compensation Committee may consider.

4


Figure 1: Summary of Fiscal 2014 Equity Awards to NEOs and
Illustration of the Compensation Committee’s Currently Anticipated Grants for Fiscal 2015 - 2019
 
 
Fiscal 2014 Grants
Compensation Committee Currently Anticipated Grants for Fiscal 2015 - 2019
 
 
 
Grant Timing
Name
Grant Type
Grant Date Fair Value ($)
Annualized Value of Front-Loaded Grant ($)
Vesting Schedule
2015
2016
2017
2018
2019
Steven M. Mollenkopf
Chief Executive Officer
Special RSUs
20,000,023
 
(1)
Front-Loaded RSUs
30,000,034
6,000,007
(2)
Annual RSUs
 
 (3)
Annual PSUs
8,000,146
 
(4)
Paul E. Jacobs
Executive Chairman
Front-Loaded RSUs

45,000,011
9,000,002
(1)
Annual RSUs
 
(3)
Annual PSUs
9,000,164
 
(4)
George S. Davis
EVP and Chief Financial Officer
Front-Loaded RSUs
6,900,000
2,300,000
(2)
Annual RSUs
 
(3)
Annual PSUs
2,700,019
 
(4)
Derek K. Aberle
President
Special RSUs
10,500,011
 
(1)
Front-Loaded RSUs
16,100,000
3,220,000
(2)
Annual RSUs
 
(3)
Annual PSUs
3,780,209
 
(4)
Cristiano R. Amon
EVP, QualcommTechnologies, Inc. and Co-President, QCT
Special RSUs
3,000,048
 
(1)
Front-Loaded RSUs
4,140,064
1,380,021
(2)
Annual RSUs
 
(3)
Annual PSUs
3,620,169
 
(4)
Venkata S. M. Renduchintala
EVP, QualcommTechnologies, Inc. and Co-President, QCT
Special RSUs
3,000,048
 
(1)
Front-Loaded RSUs
6,900,000
2,300,000
(2)
Annual RSUs
 
(3)
Annual PSUs
2,700,019
 
(4)

Currently anticipated award granted, vesting annually on the first, second and third anniversaries of the grant date.
Currently anticipated award granted, cliff-vesting following the completion of a 3-year performance period.
(1)
Vests in equal installments on the third, fourth and fifth anniversaries of the grant date. Any unvested RSUs will be forfeited if the recipient voluntarily or involuntarily leaves Qualcomm. Dr. Jacobs’s award provides for prorated vesting of any unvested RSUs upon termination by the Company without cause or by Dr. Jacobs for good reason.
(2)
Vests in five equal annual installments beginning on the first anniversary of the grant date. Any unvested RSUs will be forfeited if the recipient voluntarily or involuntarily leaves Qualcomm.
(3)
Vests in three equal annual installments beginning on the first anniversary of the grant date. Any unvested RSUs will be forfeited if the recipient voluntarily or involuntarily leaves Qualcomm

5


(4)
Three-year cliff vesting upon completion of the three-year performance period. Any unvested PSUs will be forfeited if the recipient voluntarily or involuntarily leaves Qualcomm.
Pay and Performance Alignment
The majority of compensation provided to our CEO and other NEOs is variable and is in the form of annual cash incentives and long-term equity incentives.
Fiscal 2014 Annual Cash Incentive Plan (ACIP). Amounts that may be earned under the ACIP vary by the extent to which we achieve our Non-GAAP revenues and Non-GAAP operating income objectives, representing financial performance that is important for long-term shareholder value creation. We establish challenging financial goals and frequently exceed them.
Our fiscal 2014 financial goals (8% Non-GAAP revenue growth and 13% Non-GAAP operating income growth over fiscal 2013 performance) were at the 75th percentiles relative to our peer companies’ last 4-quarter performance (as of June 30, 2014).
In fiscal 2012 and 2013, our performance exceeded the goals we had established for the year, and in fiscal 2014, we achieved our revenues goal but fell short of our operating income goal.
We place greater weight on operating income performance than revenues. As a result, the fiscal 2014 ACIP funding multiple of 0.71 is lower than the ACIP funding multiples of 1.17 and 1.16 for fiscal 2012 and 2013, respectively. Therefore, the NEOs’ fiscal 2014 ACIP earnings were less than their target cash incentive amounts (see Figure 16) because we did not achieve our overall financial objectives, in contrast to above-target performance and resulting funding multiples in fiscal 2012 and 2013.
Long-Term Equity Incentives. See our discussion above regarding special compensation actions that included front-loaded and special RSUs.
Fiscal 2014 Total Compensation (salary, ACIP earnings and annualized equity awards). The CEO’s and other NEOs’ total compensation disclosed in the Summary Compensation Table includes all front-loaded and additional special RSUs described earlier. Figure 2 sets forth the CEO’s and other NEOs’ annualized total compensation to facilitate comparison of Qualcomm and peer company CEOs’ and other NEOs’ compensation. Figure 2 includes the annualized value of the front-loaded RSUs, but excludes the impact of the special RSUs because the special RSUs were additional awards provided in response to competitors’ outreach to critical members of the senior team. Therefore, those awards supplement the annualized total compensation levels in a manner that is not expected to continue. Accordingly, Mr. Mollenkopf’s annualized total compensation, excluding those special awards, is $16,740,542.

6


Figure 2: Fiscal 2014 Total Compensation, Excluding Special RSUs, and Annualized Total Compensation (1)
Name
Grant Date Fair Value of Front-Loaded RSUs
($)
 
Annualized Value of Front-Loaded RSUs
($)
+
Fiscal 2014 Grant Date Fair Value of Annual PSUs
($)
=
Annualized Value of Long-Term Equity
($) (2)
+
Fiscal 2014 Salary, Bonus, Non-Equity Incentive Plan Compensation and All Other Compensation
($)
=
Total Annualized Compensation (Using Annualized Value of Long-Term Equity
($) (3)
Steven M. Mollenkopf
Chief Executive Officer
30,000,034
÷ 5
6,000,007
 
8,000,146
 
14,000,153
 
2,740,389
 
16,740,542
Paul E. Jacobs
Executive Chairman
45,000,011
÷ 5
9,000,002
 
9,000,164
 
18,000,166
 
2,941,817
 
20,941,983
George S. Davis
EVP and Chief Financial Officer
6,900,000
÷ 3
2,300,000
 
2,700,019
 
5,000,019
 
1,557,523
 
6,557,542
Derek K. Aberle
President
16,100,000
÷ 5
3,220,000
 
3,780,209
 
7,000,209
 
1,725,345
 
8,725,554
Cristiano R. Amon
EVP, QualcommTechnologies, Inc. and Co-President, QCT

4,140,064
÷ 3
1,380,021
 
3,620,169
 
5,000,190
 
951,879
 
5,952,069
Venkata S. M. Renduchintala
EVP, Qualcomm Technologies, Inc. and Co-President, QCT
6,900,000
÷ 3
2,300,000
 
2,700,019
 
5,000,019
 
1,238,552
 
6,238,571
(1)
Excludes the special RSUs granted to Messrs. Mollenkopf, Aberle, Amon and Dr. Renduchintala with grant date fair values of $20 million, $10.5 million, $3 million and $3 million, respectively. See Figure 1.
(2)
The sum of the annualized value of the front-loaded RSUs and the grant date fair value of PSUs awarded in fiscal 2014.
(3)
The sum of salary, non-equity incentive compensation, all other compensation and the annualized value of long-term equity.
Our CEO’s fiscal 2014 annualized total compensation, as calculated above, was in the peer companies’ third quartile relative percentile ranking (i.e., above the median and below the 75th percentile) while our 1-year revenue and operating income growth were in the peer companies’ top quartile (above the 75th percentile). Similarly, our CEOs’ 3-year average annual total compensation, as calculated above (fiscal 2012 and 2013 total compensation for Dr. Jacobs of $20,730,873 and $20,448,940, respectively, and the fiscal 2014 annualized total compensation of $16,740,542 for Mr. Mollenkopf) was at the peer companies’ median while our 3-year revenue and operating income growth was again in the peer companies’ top quartile (i.e., above the 75th percentile).
Figures 3 - 6 depict the consistent relationship of Qualcomm’s top quartile growth and third quartile annual CEO compensation (including only the annualized value of the front-loaded RSUs and excluding the special RSUs) relative to our peer group (i.e., financial growth ranking has been higher than relative CEO pay ranking). The Company and peer company data (which excludes Facebook and Google, for which data was incomplete) reflected in these figures was reported in Standard & Poor’s Compustat reports as of March 31, 2014, the time at which Frederic W. Cook & Co., Inc., our independent compensation consulting firm, prepared the peer company selection analysis used by the Compensation Committee. One- and three-year growth numbers are based on each company’s most recent fiscal year end. Qualcomm’s one-year CEO Pay includes compensation for Mr. Mollenkopf. Qualcomm’s three-year CEO Pay includes one year for Mr. Mollenkopf and two years for Dr. Jacobs.

7


Figure 3: Qualcomm and Peer Company CEO 1-Year Total Compensation Percentile Rankings Relative to 4- Quarter Revenue Growth
Figure 4: Qualcomm and Peer Company CEO 1-Year Total Compensation Percentile Rankings Relative to 4-Quarter Operating Income Growth
 
 
Figure 5: Qualcomm and Peer Company CEO 3-Year Average Total Compensation Percentile Rankings Relative to 12-Quarter Revenue Growth
Figure 6: Qualcomm and Peer Company CEO 3-Year Average Total Compensation Percentile Rankings Relative to 12-Quarter Operating Income Growth
 
 

8


PROXY STATEMENT
In this document, the words “Qualcomm,” “the Company,” “we,” “our,” “ours” and “us” refer only to QUALCOMM Incorporated and its consolidated subsidiaries and not to any other person or entity.
MEETING INFORMATION
 
 
 
 
 
The Board of Directors (Board) of QUALCOMM Incorporated, a Delaware corporation, is soliciting your proxy for use at the 2015 Annual Meeting of Stockholders (Annual Meeting) to be held on Monday, March 9, 2015, at 2:00 p.m. Pacific Time, and at any adjournment or postponement thereof.
VOTING RIGHTS AND OUTSTANDING SHARES
 
 
 
 
 
Only holders of record of common stock at the close of business on January 12, 2015 (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 1,651,909,121 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 no choice is indicated on the proxy, the shares will be voted as described in “How Your Shares Will Be Voted.” 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 22, 2015, 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 2014 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 three 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 you received by mail.
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.

9


If your shares are held by a broker, bank or other stockholder of record, in nominee name or otherwise, exercising fiduciary powers (typically referred to as being held in “street name”), please follow the instructions you receive from them. You may need to contact your broker, bank or other stockholder of record to determine whether you will be able to vote electronically via the Internet or by telephone.
 
PLEASE NOTE THAT IF YOUR SHARES ARE HELD BY A BROKER, BANK OR OTHER STOCKHOLDER OF RECORD AND YOU WISH TO VOTE AT THE ANNUAL MEETING, YOU MUST FIRST OBTAIN A LEGAL PROXY ISSUED IN YOUR NAME FROM THE RECORD HOLDER. 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: 
Proposal 1:   FOR
  
all director nominees (see page 18);
 
 
Proposal 2:   FOR
  
ratification of the selection of PricewaterhouseCoopers LLP as our independent public accountants for our fiscal year ending September 27, 2015 (see page 27);
 
 
Proposal 3: FOR
 
an amendment to the 2001 Employee Stock Purchase Plan to increase the share reserve by 25,000,000 shares (see page 29);
 
 
 
Proposal 4:   FOR
  
our executive compensation (see page 33); and
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.
BROKER NON-VOTES
 
 
 
 
 
A broker non-vote occurs when a broker, bank or other stockholder 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. Abstentions and broker non-votes have no effect on the determination of whether a nominee or the proposal has received the vote of a majority of the shares of common stock present or represented by proxy and voting at the Annual Meeting. 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 selection of independent public accountants. Non-routine matters include the election of directors, actions on stock plans, advisory votes on executive compensation and stockholder proposals.
REVOCABILITY OF PROXIES
 
 
 
 
 
Any person giving a proxy pursuant to this solicitation has the power to revoke it at any time before it is voted. A proxy may be revoked by filing a written notice of revocation or a duly executed proxy bearing a later date with our Corporate Secretary at our principal executive offices, 5775 Morehouse Drive, N-520I, San Diego, California 92121-1714, or it may be revoked by attending the Annual Meeting and voting in person. Attendance at the Annual Meeting will not, by itself, revoke a proxy.

10


PROXY SOLICITATION
 
 
 
 
 
We will bear the entire cost of solicitation of proxies, including 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 & Company to act as a proxy solicitor in conjunction with the Annual Meeting. We have agreed to pay that firm $7,500, plus reasonable out-of-pocket expenses, for proxy solicitation services. Solicitation of proxies by mail may be supplemented by telephone or personal solicitation by our directors, officers or other employees. No additional compensation 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 2016 Annual Meeting of Stockholders is September 24, 2015. Stockholder nominations for director and other proposals that are not to be included in such materials must be received no earlier than November 10, 2015 and no later than the close of business on December 10, 2015. Any such stockholder proposals or nominations for director must be submitted to our Corporate Secretary in writing at 5775 Morehouse Drive, N-520I, San Diego, California 92121-1714. Stockholders are also advised to review our Amended and Restated Bylaws, which contain additional requirements for submitting stockholder proposals and director nominations. See page15 for further information.
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 may receive a single copy of our proxy materials, including the Notice of Internet Availability of Proxy Materials, unless the affected stockholder has notified us that they want to continue receiving multiple copies. This practice is designed to reduce duplicate mailings and save significant 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 Qualcomm 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 separate copies 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 (800) 542-1061, 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. Please note, however, that if you want to receive a paper proxy or voting instruction form or other proxy materials 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.

11


FINANCIAL INFORMATION
 
 
 
 
 
Attached as Appendix 1 is certain financial information from our Annual Report on Form 10-K for fiscal 2014 that we filed with the SEC on November 5, 2014. 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 1 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 2 is a graph that compares total stockholder return on our common stock since September 27, 2009 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 3 is a listing of our executive officers and members of our Board.
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 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 on our website at www.qualcomm.com under the “Corporate Governance” section of our “Investor Relations” page. 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 and CEO Roles
The Board believes that it should maintain flexibility in its ability to establish and revise Qualcomm’s Board leadership structure from time to time. Our charter documents and policies do not prevent our Chief Executive Officer from also serving as our Chairman of the Board. Our 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 of the Board and Chief Executive Officer, the positions are currently held by separate individuals. In March 2014, Mr. Steven M. Mollenkopf commenced his service as our Chief Executive Officer. Dr. Paul E. Jacobs, who stepped down from that position in March 2014, continues to serve as our Chairman of the Board (and continues to serve as an employee of the Company as Executive Chairman).

12


Lead Director Role
Our Board believes that the role of Presiding Director, which pursuant to our Corporate Governance Principles and Practices must be an independent director, provides an appropriate balance in Qualcomm’s leadership. The Presiding Director helps ensure a strong, independent and active Board. Under our Corporate Governance Principles and Practices, the Presiding Director is chosen by rotation among the Chairs of the Audit, Compensation and Governance committees. An individual serves as the Presiding Director for a two-year period. Ms. Sherry Lansing, the Chair of the Governance Committee, is currently the Presiding Director, having commenced her service in this role in March 2013. At the Board meeting following the Annual Meeting, Raymond V. Dittamore, the Chair of the Audit Committee, will commence his term as the Presiding Director. The Presiding Director has the following roles and responsibilities:
Presiding at all Board meetings at which the Chairman is not present, including executive sessions of the independent directors;
Collaborating with the Chairman and the Chief Executive Officer in developing agendas for Board meetings;
Acting as the principal liaison between the independent directors and the Chairman and the Chief Executive Officer;
Communicating with independent directors to ensure that matters of interest are included on agendas for Board meetings;
Communicating with independent directors and management to affirm that appropriate briefing materials are being provided to directors sufficiently in advance of Board meetings to allow for proper preparation and participation in meetings; and
Calling special meetings of the Board, with the concurrence of at least one additional director, as appropriate.
BOARD MEETINGS, COMMITTEES AND ATTENDANCE
 
 
 
 
 
During fiscal 2014, the Board held nine meetings. Board agendas include regularly scheduled sessions for the independent directors to meet without management present, and the Board’s Presiding Director leads those sessions. The Board delegates various responsibilities and authority to different Board committees. We have four standing Board committees: the Audit, Compensation, Governance and Finance 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 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. 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
    
http://investor.qualcomm.com/documentdisplay.cfm?DocumentID=463
 
 
Compensation Committee
    
http://investor.qualcomm.com/documentdisplay.cfm?DocumentID=462
 
 
Governance Committee
    
http://investor.qualcomm.com/documentdisplay.cfm?DocumentID=461
 
 
Finance Committee
    
http://investor.qualcomm.com/documentdisplay.cfm?DocumentID=464
The table below provides current committee membership information for each of the Board committees.

13


 
    
Committees
Name
    
Audit
 
Compensation
 
Governance
  
Finance
Barbara T. Alexander
    
 
  
X
  
 
  
 
Donald G. Cruickshank
    
X
  
 
 
 
  
 
Raymond V. Dittamore
    
C
  
 
 
 
  
 
Susan Hockfield
    
 
 
 
  
 
  
X
Thomas W. Horton
    
X
 
 
 
 
  
 
Paul E. Jacobs
    
 
 
 
 
 
  
 
Sherry Lansing
    
 
 
 
 
C
  
 
Harish Manwani (1)
 
 
 
 
 
 
 
 
Steven M. Mollenkopf
 
 
 
 
 
 
 
 
Duane A. Nelles
    
 
 
 
 
 
  
C
Clark T. Randt, Jr.
 
 
 
 
 
X
 
 
Francisco Ros
    
 
 
 
 
 
  
X
Jonathan Rubinstein
    
 
 
X
 
 
  
 
Brent Scowcroft
    
 
 
 
 
X
  
 
Marc I. Stern
    
 
 
C
  
 
  
 
 
(1)
Mr. Harish Manwani was appointed to the Board on May 4, 2014.
C
Committee Chair
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, and reviews evaluations by management and the independent public accountants of our internal control over financial reporting and the quality of our financial reporting, among other functions. The Audit Committee met nine times during fiscal 2014. All of the members of the Audit Committee are audit committee financial experts as defined by the SEC and 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.
The Compensation Committee. The Compensation Committee determines compensation levels for the Chief Executive Officer, the named executive officers (as listed in the Fiscal 2014 Summary Compensation Table), the other executive officers and Board members, administers and approves stock offerings under our employee stock purchase and long-term incentive plans and performs such other functions regarding compensation as the Board may delegate. The Compensation Committee met seven times during fiscal 2014. All of the members of the Compensation Committee are independent directors within the meaning of NASDAQ Rule 5605 and outside directors within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended.
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 Committee also reviews and evaluates the effectiveness of our executive development and succession planning processes and provides active leadership and oversight with respect to these processes. In addition, the Governance Committee evaluates and recommends nominees for membership on the Board and its committees. The Governance Committee met six times during fiscal 2014. All of the members of the Governance Committee are independent directors within the meaning of NASDAQ Rule 5605.
The Finance Committee. The Finance Committee reviews our financial position, cash management, dividend and stock repurchase programs, securities issuances, acquisitions and other major strategic investment decisions and provides oversight of our budgeting process. The Finance Committee met eight times during fiscal 2014. All of the members of the Finance Committee are independent directors within the meaning of NASDAQ Rule 5605.

14


During fiscal 2014, each Board member attended at least 75% of the aggregate of the meetings of the Board and of the meetings of 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, respectively.
BOARD’S ROLE IN RISK OVERSIGHT
 
 
 
 
 
Qualcomm does not view risk in isolation, but considers risk as part of its regular evaluation of business strategy and business decisions. Assessing and managing risk is the responsibility of Qualcomm’s 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 the Company’s risk management efforts, either directly or through its committees. Qualcomm approaches risk management by integrating its 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 the Company’s 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 the Company’s 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 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). The Finance Committee assists the Board in fulfilling its risk management oversight responsibilities with respect to risks related to major strategic investment decisions and other financial transactions, treasury functions and policies and budget processes. 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 two members of management, our Executive Chairman and our Chief Executive Officer, serving on the Board, they are able to promote 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 Amended and Restated Bylaws contain provisions that address the process by which a stockholder may nominate an individual to stand for election to the Board at our annual meeting of stockholders. 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 Amended and Restated Bylaws. To recommend a nominee for election to the Board, a stockholder must submit his or her recommendation to the Corporate Secretary at our corporate offices at 5775 Morehouse Drive, N-520I, 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 Amended and Restated 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 nomination 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

15


owners on whose behalf the nomination 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 recommended candidates.
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 and experience 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 candidates with appropriate non-business backgrounds.
Other than the foregoing, there are no stated minimum criteria for director nominees, although the Governance Committee 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 re-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.
MAJORITY VOTING
 
 
 
 
 
Under our Amended and Restated 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

16


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 stockholder meeting. 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. See the “Compensation Program Best Practices” section under “Compensation Discussion and Analysis” for additional information.
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-520I
San Diego, California 92121-1714
Our General Counsel logs 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 Chair of the Governance Committee for distribution to the appropriate members of the Board and/or management.
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 attended our last annual meeting.
DIRECTOR INDEPENDENCE
 
 
 
 
 
The Board has determined that, except for Dr. Paul E. Jacobs and Mr. Steven M. Mollenkopf, all of the members of the Board are “independent directors” within the meaning of NASDAQ Rule 5605.

17


PROPOSAL 1:  ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
 
 
 
 
 
Our Restated Certificate of Incorporation and Amended and Restated Bylaws provide that directors are to be elected at our annual meeting of stockholders to hold office until the next annual meeting 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 is present. 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 is present. 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 Restated Certificate of Incorporation provides that the number of directors shall be fixed exclusively by one or more resolutions adopted from time to time by the Board. The Board has set the number of directors at 15. Therefore, 15 directors will stand for election at the Annual Meeting.
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 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 15 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:  66
 
Director since:  2006
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. (Dillon Read) 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 is past Chairman of the Board of the Joint Center for Housing Studies at Harvard University (the Center) and is currently a member of that board’s executive committee and a senior industry fellow of the Center. Ms. Alexander has been a director of Allied World Assurance Company Holdings, Ltd. since August 2009 and Choice Hotels since February 2012. Ms. Alexander previously served as a director of KB Home from October 2010 to April 2014, Federal

18


Home Loan Mortgage Corporation (Freddie Mac) from November 2004 to March 2010, Centex Corporation from July 1999 to August 2009, Harrah’s Entertainment, Inc. from February 2002 to April 2007 and Burlington Resources, Inc. from January 2004 to March 2006. She 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. Her experience at Freddie Mac has added to her knowledge regarding risk management issues.
DONALD G. CRUICKSHANK
  
Age:  72
 
Director since:  2005
Sir Donald has been Chairman of 7digital Group plc since June 2014. He was Chairman of Audioboo Ltd. from April 2010 to May 2014, Clinovia Group Ltd. from January 2004 to February 2007 and Formscape Group Ltd. from April 2003 to December 2006. He was a member of the Financial Reporting Council, the body in the U.K. responsible for oversight of the Accountancy and Actuarial professions and for corporate governance standards, from June 2001 to June 2007. Sir Donald has extensive experience in a number of areas, including European regulation and telecommunications. His career has included assignments at McKinsey & Co. Inc., Times Newspapers, Virgin Group plc., Wandsworth Health Authority and the National Health Service in Scotland. Sir Donald served as Chairman of the London Stock Exchange plc. from 2000 to 2003 and as Director General of the U.K.’s Office of Telecommunications (Oftel) from 1993 to 1998. From 1997 to 2000, he served as Chairman of Action 2000, the U.K.’s Millennium Bug campaign. In 1998, Chancellor Gordon Brown appointed him as Chairman of the Government’s Review of the U.K. banking sector. From 1999 to 2004, he served as Chairman of SMG plc., one of Scotland’s leading broadcasters. Sir Donald holds an M.A. degree from the University of Aberdeen and an M.B.A. degree from Manchester Business School, the University of Manchester, as well as an honorary L.L.D. degree from the University of Aberdeen. He was a member of The Institute of Chartered Accountants in Scotland between 1967 and 2011. We believe Sir Donald’s qualifications to serve on our Board include his extensive management experience in a diverse range of companies, his many years of experience in working with governmental organizations, his extensive experience in European regulation and telecommunications policies and administration and his broad experience in international business matters. In addition, as a native of the United Kingdom, with significant pan-European experience, Sir Donald brings a non-U.S. centric perspective, which is beneficial to our Board. He has been designated as an audit committee financial expert. Sir Donald has informed us that, assuming he is re-elected to the Board at the Annual Meeting, he does not intend to stand for re-election to the Board in 2016. Accordingly, he would step down from the Board effective as of the Company’s 2016 annual meeting of stockholders.

19


RAYMOND V. DITTAMORE
  
Age:  71
 
Director since:  2002
Mr. Dittamore retired in June 2001 as a partner of Ernst & Young LLP, an international public accounting firm, after 35 years of service. Mr. Dittamore previously served as a director of Life Technologies Corporation from July 2001 to February 2014, Gen-Probe Incorporated from August 2002 to September 2009 and Digirad Corporation from March 2004 to March 2008. Mr. Dittamore holds a B.S. degree in accounting from San Diego State University. We believe Mr. Dittamore’s qualifications to serve on our Board include his many years of financial and accounting experience, including his long service with an international accounting firm as an audit partner and as a member of that firm’s management. In addition, Mr. Dittamore has served on other public company boards, where he has gained extensive audit committee experience as well as additional insight into the practices of other boards and their committees. He has been designated as an audit committee financial expert.
SUSAN HOCKFIELD
  
Age:  63
 
Director since:  2012
Dr. Hockfield has been President Emerita of the Massachusetts Institute of Technology (MIT) since July 2012 and Professor of Neuroscience at MIT since 2004. She was President of MIT from December 2004 to July 2012. Dr. Hockfield joined the faculty of Yale University in 1985 and served as Provost from 2002 to 2004 and dean of the Graduate School of Arts and Sciences from 1998 to 2002. Dr. Hockfield was a member of the scientific staff of the Cold Spring Harbor Laboratory from 1980 to 1985 and a National Institutes of Health (NIH) postdoctoral fellow at the University of California at San Francisco in 1980. Dr. Hockfield has been a director of the General Electric Company since December 2006 and a trustee of the Carnegie Corporation of New York since September 2006. Dr. Hockfield holds honorary degrees from several U.S. and international universities and is a member of the American Academy of Arts and Sciences and a fellow of the American Association for the Advancement of Science. Dr. Hockfield holds a B.A. degree in biology from the University of Rochester and a Ph.D. degree in Anatomy from the Georgetown University School of Medicine. We believe Dr. Hockfield’s qualifications to serve on our Board include her significant management and leadership experience developed and demonstrated as President of MIT, a leading research university, and as Provost and a dean at Yale. Throughout our corporate history, we have valued and benefited from our interaction with academic institutions. Dr. Hockfield’s experience in education and her perspective as a scientist provides us with important insights as we develop and invest in new technologies and evaluate new ideas. In addition, her service on other public company boards brings valuable perspectives to our Board.

20


THOMAS W. HORTON
  
Age:  53
 
Director since:  2008
Mr. Horton was Chairman of American Airlines Group Inc. (formed upon the merger of AMR Corporation (AMR) and US Airways Group, Inc.) from December 2013 to June 2014 and Chairman of American Airlines, Inc. (American) from November 2011 to June 2014. He was Chairman and Chief Executive Officer of AMR and Chief Executive Officer of American from November 2011 to December 2013, and President of AMR and American from July 2010 to December 2013. He served as Executive Vice President and Chief Financial Officer of AMR and American from March 2006 to July 2010. He served as Vice Chairman and Chief Financial Officer of AT&T Corporation (AT&T) from January 2002 to February 2006. Prior to joining AT&T, Mr. Horton was Senior Vice President and Chief Financial Officer of AMR from January 2000 to January 2002 and served in numerous management positions with AMR since 1985. AMR and American filed voluntary petitions for reorganization under Federal bankruptcy laws in November 2011 and emerged from bankruptcy in December 2013. Mr. Horton has been a director of Wal-Mart Stores, Inc. since November 2014. Mr. Horton holds a B.B.A. degree in accounting from Baylor University and an M.B.A. degree from Southern Methodist University. We believe Mr. Horton’s qualifications to serve on our Board include his management, financial and accounting experience, including his former service as President of AMR, as Vice Chairman and Chief Financial Officer of AT&T and as Executive Vice President and Chief Financial Officer of AMR. In particular, Mr. Horton’s roles in operational and financial management at AMR and AT&T bring valuable insights to our Board, as well as providing a useful resource to our senior management. He has been designated as an audit committee financial expert.
PAUL E. JACOBS
  
Age:  52
 
Director since:  2005
Dr. Jacobs is our Executive Chairman and Chairman of the Board of Directors. He has served as Chairman of the Board since March 2009 and as Executive Chairman since March 2014. He served as Chief Executive Officer from July 2005 to March 2014 and as Group President of Qualcomm Wireless & Internet from July 2001 to July 2005. In addition, he served as an executive vice president from February 2000 to June 2005. Dr. Jacobs was a director of A123 Systems, Inc. from November 2002 to July 2012. Dr. Jacobs holds a B.S. degree in electrical engineering and computer science, an M.S. degree in electrical engineering and a Ph.D. degree in electrical engineering and computer science from the University of California, Berkeley. We believe Dr. Jacobs’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 Executive Chairman and his prior service 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.

21


SHERRY LANSING
  
Age:  70
 
Director since:  2006
Ms. Lansing is the Founder and has been the Chair of the Sherry Lansing Foundation, a philanthropic organization focusing on cancer research, health and education, since 2005. From 1992 to 2005, she was the Chair of the Motion Picture Group of Paramount Pictures where she oversaw the release of more than 200 films, including Academy Award® winners Forrest Gump, Braveheart and Titanic. From 1984 to 1990, she operated her own production company, Lansing Productions, and co-founded Jaffe/Lansing Productions. In 1980, she became the film industry’s first female to oversee all aspects of a studio’s motion picture production when she was appointed President of Production at 20th Century Fox. She holds additional trustee, chair and advisory positions with the Friends of Cancer Research, the American Association of Cancer Research, the Carter Center and Stop Cancer, a non-profit philanthropic group she founded in partnership with Dr. Armand Hammer. Ms. Lansing is also a regent of the University of California and serves as Chair of the University Health Services Committee. Ms. Lansing has been a director of RealD Inc. since May 2010 and was a director of Dole Food Company, Inc. from October 2009 to November 2013. She earned the 2004 Horatio Alger Humanitarian Award, the 2003 Woodrow Wilson Award for Corporate Citizenship, a 2003 honorary doctorate in fine arts from the American Film Institute, the 1989 Alfred P. Sloan, Jr. Memorial Award and the 1982 Distinguished Community Service Award from Brandeis University. She holds a B.S. degree in speech, with minors in English and mathematics, from Northwestern University. We believe that Ms. Lansing’s qualifications to serve on our Board include her management and operational experience in the entertainment and content production business. Given the convergence of content and delivery capability, as well as consumer driven technology and device capability, Ms. Lansing’s professional experience is of great value to the Board and Qualcomm. In addition, her past and current service on other public company boards brings valuable insights to our Board.
HARISH MANWANI
  
Age:  61
 
Director since:  2014
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 March 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 February 2004. He served as Unilever’s Senior Vice President, Global Hair and Oral Care from June 2000 to March 2001. He served as a whole time Director on the board of Hindustan Unilever Limited from August 1995 to April 2000, a company he joined 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, Pearson plc since October 2013 and Non-Executive Chairman of Hindustan Unilever Limited since July 2005. He has also been a director of

22


The Economic Development Board (Singapore) since February 2013 and the Indian School of Business since April 2006. Mr. Manwani previously served as a director of ING Group from April 2008 to April 2010, the Citigroup India Advisory Board from November 2010 to February 2013 and the Human Capital Leadership Institute from October 2012 to February 2014. 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.
STEVEN M. MOLLENKOPF
 
Age:  46
 
Director since:  2013
Mr. Mollenkopf has served as our Chief Executive Officer since March 2014. 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, as Executive Vice President and President of QCT from August 2008 to September 2010, as Executive Vice President, QCT Product Management from May 2008 to August 2008, as Senior Vice President, Engineering and Product Management from July 2006 to May 2008 and as Vice President, Engineering from April 2002 to July 2006. 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 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.
DUANE A. NELLES
  
Age:  71
 
Director since:  1988
Mr. Nelles is the President of the Duane Nelles Consulting Company, Inc., a personal investment business he founded in 1987. Prior to that time, he was a partner in the international public accounting firm of Coopers & Lybrand LLP, which he joined in 1968. Mr. Nelles has served as a director of American Assets Trust, Inc. since February 2011. He served as a director of WFS Financial Inc. from July 1995 to March 2006 and Westcorp Inc. from February 2003 to March 2006. He holds a B.A. degree in economics and mathematics from Albion College and an M.B.A. degree from the University of Michigan. We

23


believe Mr. Nelles’s qualifications to serve on our Board include his financial and accounting experience, including his nearly 20 years of service as a partner in an international public accounting firm and his many years as a private investor and businessman. In addition, Mr. Nelles’s service as a director of Qualcomm for over 20 years provides important context and historical perspective to Board deliberations.
CLARK T. “SANDY” RANDT, JR.
  
Age:  69
 
Director since:  2013
Mr. 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. From January 1994 to June 2001, 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 August 1982 to October 1984, Mr. Randt served as First Secretary and Commercial Attaché at the U.S. Embassy in Beijing. In 1974, he was the China representative of the National Council for United States-China Trade, and from August 1968 to March 1972, he served in the U.S. Air Force Security Service. Mr. Randt is a member of the New York bar association and the Council on Foreign Relations. He is also a former governor and first vice president of the American Chamber of Commerce in Hong Kong. Mr. Randt has been a director of Valmont Industries, Inc. since February 2009 and a director of the United Parcel Service, Inc. since August 2010, and he serves on the Advisory Board of the Duke Kunshan University. He is fluent in Mandarin Chinese. Mr. Randt graduated from Yale University with a B.A. degree in English literature and received 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 that Mr. Randt’s qualifications to serve on our Board include his deep understanding of Asia and experience in facilitating business throughout Asia, which is one of the most important regions in the world. He brings to our Board substantial experience in both diplomacy and international trade, including service as the U.S. Ambassador to The People’s Republic of China. His international experience and knowledge of Asian business operations provide valuable insights to our Board.
FRANCISCO ROS
  
Age:  64
 
Director since:  2010
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. From January 2000 to June 2002, he was Chairman and CEO of Alua Broadband Optical Access, a company he co-founded. From May 1996 to October 1998, Dr. Ros served as President and CEO of Unisource (a joint venture among KPN, Telia, Swisscom and Telefónica). From April 1983 to November 1996, Dr. Ros headed several business areas within the Telefónica Group and became Managing Director of the holding company and a member of its Executive Management Board. Dr. Ros has been a director of Elephant Talk Communications Corp. since

24


September 2014 and Non-Executive Chairman of Asurion Europe Limited in Spain since April 2014. He was a director of Proteccion On-Line S.L. from October 2012 to June 2013. In 2011, he was the recipient of the Great Cross of the Order of Civil Merit and the Great Plate of Telecommunications and the Information Society, both granted by the Government of Spain. 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 (MIT) and an advanced management degree from the Instituto de Estudios Superiores de la Empresa (IESE, Business School) in Madrid. We believe Dr. Ros’s qualifications to serve on our Board include his significant experience related to the regulatory environment in Europe for wireless technology, 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.
JONATHAN J. RUBINSTEIN
  
Age:  58
 
Director since:  2013
Mr. Rubinstein was Senior Vice President, Product Innovation for the Personal Systems Group of the Hewlett-Packard Company (HP) from July 2011 to January 2012 and Senior Vice President and General Manager, Palm Global Business Unit of HP from July 2010 to July 2011. Mr. Rubinstein was Chief Executive Officer and President of Palm, Inc. (Palm) from June 2009 until its acquisition by HP in July 2010 and Chairman of the Board of Palm from October 2007 through the date of acquisition. He was Senior Vice President, iPod Division of Apple Inc. (Apple) from 2003 to 2006 and Senior Vice President, Hardware Engineering of Apple from 1997 to 2003. Mr. Rubinstein is a member of the National Academy of Engineering. Mr. Rubinstein has been a director of Amazon.com, Inc. since December 2010. Mr. Rubinstein holds B.S. and M.Eng. degrees in electrical engineering from Cornell University and an M.S. degree in computer science from Colorado State University. We believe that Mr. Rubinstein’s qualifications to serve on our Board include his substantial operational and executive management experience at a range of large technology companies, including senior management responsibilities at HP, Palm and Apple. His experience in addressing product development issues in emerging and evolving technology environments provides our Board with valuable knowledge and insights.
BRENT SCOWCROFT
  
Age:  89
 
Director since:  1994
General Scowcroft is the President of The Scowcroft Group, Inc., an international business consulting firm he founded in June 1994. He served as Assistant to the President for National Security Affairs for President George H.W. Bush from January 1989 to January 1993; he also held that position for President Gerald R. Ford during his term. A retired U.S. Air Force Lieutenant General, General Scowcroft served in numerous national security posts in the Pentagon and the White House prior to his appointment as Assistant to the President for National Security Affairs. General Scowcroft holds a B.S. degree in

25


engineering from West Point and M.A. and Ph.D. degrees in political science from Columbia University, as well as numerous honorary degrees. We believe General Scowcroft’s qualifications to serve on our Board include his significant experience in the management of large scale organizations during his years of active military service and his extensive knowledge of international business and governmental affairs, which have been gained at the highest levels of governmental service and through working with numerous international businesses. In particular, General Scowcroft is a recognized expert on China, one of the most important regions in the world.
MARC I. STERN
  
Age:  70
 
Director since:  1994
Mr. Stern is Chairman of The TCW Group, Inc. (TCW), a Los Angeles-based asset-management firm with approximately $155 billion of assets under management, and has served as a director of TCW and TCW Funds, Inc., a registered investment management company, since September 1992. Prior to being named Chairman of TCW in February 2013, Mr. Stern served as TCW’s Vice Chairman from July 2005 to February 2013, Chief Executive Officer from July 2009 to August 2012 and President from May 1992 to October 2005. From May 2007 to February 2013, he was a member of the Management Committee of Société Générale Group and Chairman of Société Générale Global Investment Management and Services (GIMS) North America unit. TCW was acquired by Société Générale in 2001. Société Générale sold its interest in TCW in 2013 to The Carlyle Group and TCW management. Mr. Stern served as President and a director of SunAmerica, Inc., a financial services company, from 1988 to 1990. Prior to joining SunAmerica, Mr. Stern was Managing Director and Chief Administrative Officer of The Henley Group, Inc., a diversified manufacturing company, and prior to that was Senior Vice President of Allied-Signal Inc., a diversified manufacturing company. Mr. Stern served as a director of Rockefeller & Co., Inc., a wealth management firm, from June 2008 to September 2012. Mr. Stern holds a B.A. degree in political science and history from Dickinson College, an M.A. degree in government from the Columbia University Graduate School of Public Law and Government and a J.D. degree from the Columbia University School of Law. We believe that Mr. Stern’s qualifications to serve on our Board include his many years of business, operational and financial management experience. In addition, his current and prior service on other public company boards permits him to contribute valuable strategic management insight to our Board, both with respect to specific governance and compensation related issues, as well as general leadership. Finally, as a member of our Board since 1994, Mr. Stern brings a valuable historical perspective on the development of the Company’s business and its leadership.
REQUIRED VOTE AND BOARD RECOMMENDATION
 
 
 
 
 
If a quorum is present and voting, each of the 15 nominees for director will be elected by a vote of a majority of the votes cast, meaning that the number of shares cast “for” a director’s election exceeds the number of “withhold” votes cast against that director. 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 15 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.

26


PROPOSAL 2:  RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board has selected PricewaterhouseCoopers LLP as our independent public accountants for the fiscal year ending September 27, 2015, and the Board has directed that management submit the selection of independent public accountants 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 Amended and Restated Bylaws or otherwise. However, the Board is submitting the selection of PricewaterhouseCoopers LLP to stockholders for ratification as a matter of good corporate practice. 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 at 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 28, 2014 and September 29, 2013 for the audits of our annual consolidated financial statements and fees for other services. All of the services described in the following fee table were approved in conformity with the Audit Committee’s pre-approval process described below.
 
Fiscal
2014
 
Fiscal
2013
Audit fees (1)
$
6,777,000

 
$
7,094,000

Audit-related fees (2)
3,481,000

 
3,152,000

Tax fees (3)
10,000

 
101,000

All other fees (4)
413,000

 
561,000

Total
$
10,681,000

 
$
10,908,000

 
 
 
 
 
(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 and businesses 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 professional services rendered for transfer pricing advice (2014) and a real estate cost segregation study (2013).
(4)
All other fees consist of fees for permissible advisory services provided in connection with a market condition study (2014), services related to conflict minerals reporting requirements (2014), an operational readiness study (2013) 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 the independent public accountants. These services may include audit services, audit-related services, tax services and other services. Pre-approval

27


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 pre-approval authority to certain committee members when expedition of approval is necessary. The independent public accountants and management periodically report to the full Audit Committee regarding the extent of services provided by the independent public accountants and the fees for the services performed to date.
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, either in person or by proxy, 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 broker and you do not instruct the broker on how to vote on this proposal, your broker will have the authority, but is not required, to vote your shares. Abstentions and any 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 27, 2015.

28


PROPOSAL 3:  APPROVAL OF AMENDMENT TO THE 2001 EMPLOYEE STOCK PURCHASE PLAN TO INCREASE THE SHARE RESERVE BY 25,000,000 SHARES
In December 2000, we adopted the 2001 Employee Stock Purchase Plan (the ESPP), which originally became effective on February 27, 2001. Since then, the ESPP has been amended five times, most recently as of November 30, 2014. On that date, the Compensation Committee of the Board amended the ESPP to increase the number of shares of our common stock available for issuance under the ESPP by 25,000,000 shares, subject to stockholder approval (the ESPP Amendment). If the ESPP Amendment is not approved by stockholders, approximately 4,088,000 shares will remain available for issuance under the ESPP as of March 9, 2015.
The following is a brief summary of the ESPP and the material changes made under the ESPP Amendment. This summary is qualified in its entirety by reference to the full text of the ESPP as restated to include the ESPP Amendment, a copy of which is available to any stockholder upon request and is filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended December 28, 2014.
SUMMARY OF THE ESPP
 
 
 
 
 
Purpose. The purpose of the ESPP is to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward eligible employees and by motivating such persons to contribute to our growth and profitability. The ESPP provides eligible employees with an opportunity to acquire a proprietary interest in the Company through the purchase of stock. The ESPP consists of two components; one is intended to qualify under Section 423(b) of the Internal Revenue Code of 1986, as amended (the Code) (the Section 423(b) Plan) and the other is not so intended (the Non-423(b) Plan).
Administration. The ESPP is administered by the Board and its designees. Accordingly, this summary uses the term “Board” to refer to the Board itself and the Compensation Committee, to which the Board has delegated the authority to administer the ESPP. To the extent determined by the Board or the Compensation Committee, certain authority may be delegated to such officers of the Company as the Board or Compensation Committee specifies. The Board has the power, subject to the provisions of the ESPP, to construe and interpret the ESPP and to determine when and how rights to purchase our common stock (purchase rights) will be granted and the provisions of each offering of such purchase rights (which need not be identical).
Stock Subject to the ESPP. If the ESPP Amendment is approved, the maximum aggregate number of shares of our common stock that may be issued under the ESPP, subject to adjustment as described below in “Effect of Certain Corporate Events,” will be increased by 25,000,000 shares from 46,709,466 shares to 71,709,466 shares, so long as no more than an aggregate of 71,309,466 shares (increased from 46,309,466 shares) may be issued under the Section 423(b) Plan. If an outstanding purchase right for any reason expires or is terminated or canceled, the shares allocable to the unexercised portion of that purchase right will again be available for issuance under the ESPP, except that any such shares allocable to a purchase right that has expired, terminated or been canceled under the Non-423(b) Plan will only be available again for issuance under the Non-423(b) Plan.
Offerings. The ESPP is implemented by sequential “offerings” of the right to purchase shares of our common stock of approximately six months’ duration (an “offering period”). Offering periods are established by the Board in its sole and absolute discretion and may have different durations (not exceeding 27 months) or different commencing and ending dates.
Eligibility. Generally, an employee will be eligible to participate in an offering if he or she, as of the first day of the offering period (the “offering date”), is employed by the Company or any parent or subsidiary corporation designated by the Board as a corporation whose employees may participate in the offering. Unless otherwise required under applicable local law, an employee may not be eligible to participate in an offering if he or she, as of the offering date, either (a) is customarily employed for 20 hours or less per week; (b) is customarily employed for not more than 5 months in any calendar year; or (c) has not completed 30 days of service (or such other service requirement, up to 2 years, which the Board may require). In addition, no employee will be granted a purchase right under the ESPP if, immediately after such grant, the employee would own or hold options to purchase shares of our common stock or of any parent or subsidiary corporation possessing 5% or more of the total combined voting power or value of all classes of stock of such corporation.

29


Employees of any parent or subsidiary corporation of the Company designated to participate in the Non-423(b) Plan are eligible to participate in the Non-423(b) Plan only if they are selected to participate by the Board in its sole discretion. In no event, however, may an officer or director of the Company subject to the requirements of Section 16 of the Securities Exchange Act of 1934, as amended, participate in the Non-423(b) Plan. As of August 1, 2014, the beginning of the current offering period, approximately 27,200 of our employees were eligible to participate in the ESPP.
Participation. Generally, an eligible employee may become a participant in an offering by delivering a properly completed subscription agreement, stating his or her election to participate in the ESPP and authorizing payroll deductions from his or her compensation. A participant automatically participates in the next offering period commencing immediately after the last day of the prior offering period in which he or she participated provided that the participant remains an eligible employee and has not either withdrawn from the ESPP or terminated employment.
Grant of Purchase Rights. Each participant in an offering period will be granted automatically a purchase right consisting of an option to purchase that number of whole shares determined by dividing $12,500 by the fair market value of a share of common stock on the first day of a six-month offering period. For an offering period of any duration other than six months, the number of shares subject to the purchase right is prorated based upon the ratio which the number of months in such offering period bears to six. In addition, no participant will be granted a purchase right which permits his or her right to purchase shares under the ESPP to accrue at a rate which, when aggregated with his or her purchase rights under all other Section 423(b) Plans of the Company, exceeds $25,000 in fair market value of the shares (determined as of the offering date) for each calendar year in which such purchase right is outstanding at any time.
Purchase Price. The Board, in its sole discretion, may establish the purchase price at which each share may be acquired in an offering period upon the exercise of all or any portion of a purchase right; provided, however, that the purchase price cannot be less than 85% of the lesser of (a) the fair market value of a share of common stock on the offering date or (b) the fair market value of a share of common stock on the date shares are purchased, which is typically the last day of the offering period (the “purchase date”). As of January 5, 2015, the fair market value of a share of our common stock, determined by the last reported sale price per share on that date as quoted on the Nasdaq Global Select Market, was $73.93. No fees, commissions or other charges are paid by employees in connection with the purchase of shares under the ESPP.
Payroll Deductions and Additional Contributions. Shares acquired pursuant to the exercise of all or any portion of a purchase right may be paid for only by means of payroll deductions from the participant’s compensation accumulated during the offering period, unless payroll deductions are not permitted under applicable law or administratively feasible. The participant’s subscription agreement sets forth the percentage of his or her compensation to be deducted on each payday during an offering period in whole percentages, up to 15% (or such other rate as the Board determines). During an offering period, a participant may elect to decrease the rate of, or to stop, deductions from his or her compensation. A participant who elects to decrease the rate of his or her payroll deductions to zero will nevertheless remain a participant in the current offering period unless he or she withdraws from the ESPP. All payroll deductions made for a participant are credited to his or her account under the ESPP and deposited with our general funds. No interest will accrue on the payroll deductions from a participant under the ESPP, except as otherwise required by applicable law. If interest is required, the accrued interest will not be used to purchase additional shares on a purchase date, and such accrued interest will be refunded to the participant following such purchase date (or, if applicable, the participant’s withdrawal from the ESPP or termination of employment). The Board may specify in the terms of an offering that a participant under the Non-423(b) Plan may make additional payments into his or her account, so long as such participant has not had the maximum amount withheld during the offering.
Withdrawal. A participant may withdraw from the ESPP by signing and delivering to us a written notice of withdrawal on a form we provide or in such other manner we may authorize. Such withdrawal may be elected up to ten days prior to the end of the applicable offering. Upon a participant’s voluntary withdrawal from the ESPP, his or her accumulated payroll deductions which have not been applied toward the purchase of shares will be refunded to the participant as soon as practicable after the withdrawal, and his or her participation in the ESPP will terminate. A participant who voluntarily withdraws from the ESPP is prohibited from resuming participation in the same offering from which he or she withdrew, but may participate in a subsequent offering. An employee’s withdrawal from the ESPP will not have any effect upon his or her eligibility to participate in subsequent offerings.
Purchase of Stock. On each purchase date, each participant’s accumulated payroll deductions, and other additional payments specifically permitted by the ESPP (without any increase for interest), will be applied to the purchase of whole

30


shares, up to the maximum number of shares permitted pursuant to the terms of the ESPP and the applicable offering, at the purchase price for such offering. If the aggregate number of shares to be purchased upon exercise of purchase rights granted in the offering would exceed the maximum aggregate number of shares available for issuance under the ESPP, the Board would make a pro rata allocation of shares available in a uniform and equitable manner.
Termination of Employment. Upon a participant’s ceasing, prior to a purchase date, to be an employee for any reason, the participant’s participation in the ESPP will terminate immediately, unless local law requires participation to be extended. Upon termination of participation, the participant’s accumulated payroll deductions which have not been applied toward the purchase of shares will, as soon as practicable, be returned (without interest unless required by applicable law) to the participant or, in the case of a participant’s death, to the participant’s legal representative, and all the participant’s rights under the ESPP will terminate.
Restrictions on Transfer. Neither payroll deductions nor a participant’s purchase right may be assigned, transferred, pledged or otherwise disposed of in any manner other than as provided by the ESPP or by will or the laws of descent and distribution.
Effect of Certain Corporate Events. In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification or similar change in our capital structure, or in the event of any merger (including a merger effected for the purpose of changing the Company’s domicile), sale of assets or other reorganization in which the Company is a party, appropriate adjustments will be made in the number and class of shares subject to the ESPP, each purchase right, and in the purchase price.
Effect of Change in Control. In the event of a Change in Control (as defined in the ESPP), the surviving, continuing, successor or purchasing corporation or parent corporation thereof, as the case may be, may assume our rights and obligations under the ESPP. If our rights and obligations under outstanding purchase rights are not assumed, the purchase date of the current offering period will be accelerated to a date before the date of the Change in Control specified by the Board, but the number of shares subject to outstanding purchase rights will not be adjusted. No acceleration will apply to the Non-423(b) Plan unless the Change in Control meets the definition under Section 409A of the Code. All purchase rights that are neither assumed in connection with the Change in Control nor exercised as of the date of the Change of Control will terminate and cease to be outstanding effective as of the date of the Change in Control.
Duration, Amendment and Termination. The Board may at any time amend or terminate the ESPP, subject to certain conditions. A termination will not affect purchase rights previously granted under the ESPP, except as permitted under the plan. No amendment may adversely affect a purchase right previously granted under the ESPP, except as permitted under the plan or as necessary to qualify the Section 423(b) Plan as an employee stock purchase plan under the Code or to obtain qualification or registration of shares under applicable laws. In addition, any amendment that would increase the maximum aggregate number of shares that may be issued under the ESPP or would change the definition of the corporations that may be designated by the Board as participating companies in the ESPP must be approved by our stockholders within 12 months of the adoption of such amendment.
Federal Income Tax Information. The following discussion is intended to be a general summary only of the federal income tax aspects of purchase rights granted under the ESPP and not of state or local taxes that may be applicable. Tax consequences may vary depending on the particular circumstances, and administrative and judicial interpretations of the application of the federal income tax laws are subject to change. Participants in the ESPP who are residents of or are employed in a country other than the United States may be subject to taxation in accordance with the tax laws of that particular country in addition to or in lieu of U.S. federal income taxes.
A participant recognizes no taxable income either as a result of commencing participation in the ESPP or purchasing common stock under the terms of the ESPP. If a participant disposes of shares purchased under the ESPP within either two years from the first day of the applicable offering period or within one year from the purchase date, known as disqualifying dispositions, the participant will realize ordinary income in the year of such disposition equal to the amount by which the fair market value of the shares on the purchase date exceeds the purchase price. The amount of the ordinary income will be added to the participant’s basis in the shares, and any additional gain or resulting loss recognized on the disposition of the shares will be a capital gain or loss, which will be long-term if the participant’s holding period is more than 12 months. If the participant disposes of shares purchased under the ESPP at least two years after the first day of the applicable offering period and at least one year after the purchase date, the participant will realize ordinary income in the year of disposition

31


equal to the lesser of (i) the excess of the fair market value of the shares on the date of disposition over the purchase price or (ii) 15% of the fair market value of the shares on the first day of the applicable offering period. The amount of any ordinary income will be added to the participant’s basis in the shares, and any additional gain recognized upon the disposition after such basis adjustment will be a long-term capital gain. If the fair market value of the shares on the date of disposition is less than the purchase price, there will be no ordinary income and any loss recognized will be a long-term capital loss. If the participant still owns the shares at the time of death, the lesser of (i) the excess of the fair market value of the shares on the date of death over the purchase price or (ii) 15% of the fair market value of the shares on the first day of the offering period in which the shares were purchased will constitute ordinary income in the year of death. Any ordinary income recognized by a participant upon the disqualifying disposition of the shares generally should be deductible by the Company for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code or the regulations thereunder.
PLAN BENEFITS TABLE
 
 
 
 
 
Because participation in the ESPP is voluntary and elective, the benefits or amounts that any participant or group of participants may receive if the ESPP Amendment is approved are not currently determinable. The table below contains the benefits or amounts that the individuals and groups listed below have received under the ESPP since its inception:
Participants
 
Number of Shares Purchased Under the ESPP
Steven M. Mollenkopf
Chief Executive Officer
 
8,673

Paul E. Jacobs
Executive Chairman and Chairman of the Board
 
5,899

George S. Davis
EVP and Chief Financial Officer
 

Derek K. Aberle
President
 
9,132

Venkata S.M. Renduchintala
EVP, Qualcomm Technologies, Inc. and Co-President, QCT
 
4,251

Cristiano R. Amon
EVP, Qualcomm Technologies, Inc. and Co-President, QCT
 

All current executive officers as a group (10 people)
 
65,462

All employees, including all current officers who are not executive officers, as a group (27,146 people)
 
38,827,874


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 approve the ESPP Amendment. 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 on this proposal, 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 proposal.
Should stockholder approval not be obtained, then the ESPP Amendment will not be implemented, and the ESPP will continue in effect pursuant to its current terms. However, the number of shares reserved for issuance will be depleted, and the ESPP will not achieve its objective of helping to attract, retain and reward employees.
The Board believes that the ESPP Amendment is in the best interests of the Company and its stockholders for the reasons stated above. THEREFORE, THE BOARD RECOMMENDS A VOTE “FOR” APPROVAL OF THE PROPOSED ESPP AMENDMENT FOR THE INCREASE IN THE SHARE RESERVE BY 25,000,000 SHARES.

32


PROPOSAL 4:  ADVISORY VOTE FOR APPROVAL OF OUR EXECUTIVE COMPENSATION
In the “Executive Compensation Highlights” section of the Proxy Summary, and in the Compensation Discussion and Analysis (CD&A) section, we note that during fiscal 2014 our senior executives were aggressively targeted in recruiting efforts by other companies. The Compensation Committee and the Board believe that the special compensation actions implemented in fiscal 2014 were effective in addressing this challenge and consistent with our compensation philosophy. We maintained our long-standing policies, procedures and practices, which we discuss in the CD&A.
This stockholder advisory vote, commonly known as “Say-on-Pay,” is required pursuant to 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). The Board recommends a vote for the following resolution:
“Resolved, that the stockholders of QUALCOMM Incorporated approve, on a non-binding advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in this proxy statement, including the Compensation Discussion and Analysis, compensation tables and narrative disclosures.”
SPECIAL COMPENSATION ACTIONS IN RESPONSE TO UNIQUE CHALLENGES
 
 
 
 
 
Qualcomm is an established leader in mobile communications. Our competitors are implementing mobile strategies and investing significantly in the mobile communications industry. These efforts include attempts to recruit members of our management who are essential to our long-term success. Accordingly, the Compensation Committee, at the Board’s request, initiated strategies, consistent with our overall compensation philosophy, to meet these challenges by taking aggressive retention-related compensation actions for key talent to achieve the following objectives:
Continue to align pay with long-term stockholder value through continued emphasis on equity-based incentives;
Maintain annualized compensation targets while changing the timing of certain equity compensation awards to increase retention;
Strengthen retention through extending certain equity compensation awards’ future vesting schedules beyond the typical three years; and
In some cases, further strengthen retention through additional equity compensation that is above competitive practices only as necessary to address immediate retention needs.
COMPENSATION PROGRAM BEST PRACTICES
 
 
 
 
 
We continued the many ongoing practices that promote consistent leadership, decision-making and actions without taking inappropriate or unnecessary risks. These practices are discussed in detail in the CD&A section and include: 
A majority of our long-term incentive equity awards (based on the annualized value of the front-loaded RSUs) are performance-based.
A significant portion of our NEOs’ compensation varies with Company financial and stock performance.
We have a balanced approach to incentive programs including a mix of short- and long-term incentives and performance measures.
We have limits on incentive amounts that may be earned in the event we significantly exceed our annual financial performance objectives or experience exceptional performance relative to peer companies.
We have an enterprise risk management process that includes compensation, talent management and succession planning.

33


We have stock ownership guidelines.
We have no tax gross-ups, except as provided to all eligible employees for business-related expenses, such as relocation.
We have a cash incentive compensation clawback policy in the event of an accounting restatement.
Our insider trading policy includes a prohibition on hedging and pledging of our common stock covering all employees and directors.
Our NEOs do not have severance agreements or employment contracts, and our equity acceleration in the event of a change in control is “double-trigger.”
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.
EFFECT OF THIS RESOLUTION
 
 
 
 
 
Because your vote is advisory, it will not be binding upon the Company, the Board or the Compensation Committee. However, our Board and Compensation Committee value the opinions of our stockholders, and the Compensation Committee will take into account the outcome of this vote when considering future compensation decisions.
BOARD RECOMMENDATION
 
 
 
 
 
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.

34


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 15, 2014 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 where Schedule 13D or 13G information is not available, 13F, filed with the SEC); (ii) each of our executive officers named in the Fiscal 2014 Summary Compensation Table under “Executive Compensation and Related Information” (the Named Executive Officers or 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   
BlackRock, Inc.
107,497,871

 
6.49%
40 East 52nd Street
 
 
 
New York, NY 10022 (2)
 
 
 
Vanguard Group Inc.
99,625,639

 
6.01%
P.O. Box 2600, V26
 
 
 
Valley Forge, PA 19482-2600 (3)
 
 
 
Steven M. Mollenkopf (4)
143,648

 
*
Paul E. Jacobs (5)
2,344,151

 
*
George S. Davis (6)
23,222

 
*
Derek K. Aberle (7)
155,393

 
*
Cristiano R. Amon (8)
68,214

 
*
Venkata S. M. Renduchintala (9)
79,215

 
*
Barbara T. Alexander (10)
41,835

 
*
Donald G. Cruickshank (11)
78,200

 
*
Raymond V. Dittamore (12)
89,085

 
*
Susan Hockfield (13)

 
*
Thomas W. Horton (14)
12,359

 
*
Sherry Lansing (15)
37,938

 
*
Harish Manwani

 
*
Duane A. Nelles (16)
118,999

 
*
Clark T. Randt, Jr. (17)
748

 
*
Francisco Ros (18)
3,607

 
*
Jonathan J. Rubinstein (19)
797

 
*
Brent Scowcroft (20)
459,358

 
*
Marc I. Stern (21)
422,437

 
*
All Executive Officers and Directors as a Group (23 persons) (22)
4,661,340

 
*
 
*
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 1,656,824,822 shares outstanding on December 15, 2014, adjusted as required by rules promulgated by the SEC.
(2)
This information is as of December 31, 2013 and based on the Schedule 13G/A filed with the SEC by BlackRock, Inc. on February 10, 2014.

35


(3)
This information is as of September 30, 2014 and based on the Schedule 13F filed with the SEC by Vanguard Group Inc. on November 12, 2014.
(4)
Includes 143,648 shares held in family trusts.
(5)
Includes 851,430 shares held in family trusts, 368,282 shares held in Grantor Retained Annuity Trusts for the benefit of Dr. Jacobs and his spouse, 397 shares held by his spouse, and 214,949 shares held for the benefit of his children. Also includes 861,400 shares issuable upon exercise of options exercisable within 60 days, of which 168,428 shares are held in trusts for the benefit of Dr. Jacobs and/or his spouse, and 692,972 shares are held in trusts for the benefit of his children. Dr. Jacobs disclaims all beneficial ownership for the shares held in trust for the benefit of his children.
(6)
Includes 23,222 shares held in family trusts.
(7)
Includes 101,051 shares issuable upon exercise of options exercisable within 60 days.
(8)
Includes 63,125 shares issuable upon exercise of options exercisable within 60 days.
(9)
Includes 78,667 shares issuable upon exercise of options exercisable within 60 days.
(10)
Includes 19,597 shares held in family trusts, 22,000 shares issuable upon exercise of options exercisable within 60 days and 238 fully vested deferred stock units and related dividend equivalents to be released within 60 days. Excludes 8,547 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(11)
Includes 8,200 shares held in a pension plan pursuant to which Sir Donald Cruickshank has voting rights or discretion over the holdings in the plan. Also includes 70,000 shares issuable upon exercise of options exercisable within 60 days.
(12)
Includes 7,400 shares held in family trusts and 3,685 held jointly with his spouse. Also includes 78,000 shares issuable upon exercise of options exercisable within 60 days. Excludes 17,169 fully vested deferred stock units and dividend equivalents that settle on December 31, 2020.
(13)
Excludes 5,248 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(14)
Includes 9,859 shares held jointly with Mr. Horton’s spouse and 2,500 shares issuable upon exercise of options exercisable within 60 days. Excludes 6,452 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(15)
Includes 11,183 shares held in family trusts and 26,755 shares issuable upon exercise of options exercisable within 60 days. Excludes 6,452 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(16)
Includes 118,999 shares held in family trusts. Excludes 6,452 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(17)
Includes 748 shares held jointly with Mr. Randt’s spouse.
(18)
Excludes 6,452 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(19)
Includes 797 shares held in family trusts. Excludes 2,423 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(20)
Includes 380,358 shares held in family trusts and 78,000 shares issuable upon exercise of options exercisable within 60 days. Excludes 6,452 fully vested deferred stock units and dividend equivalents that settle three years after the date of grant.
(21)
Includes 344,437 shares owned through a grantor trust, of which Mr. Stern is the trustee. Also includes 78,000 shares issuable upon exercise of options exercisable within 60 days. Excludes 15,369 fully vested deferred stock units and dividend equivalents that settle upon retirement from the Board.
(22)
Includes 1,934,573 shares issuable upon exercise of options exercisable within 60 days. Also includes 238 fully vested deferred stock units and related dividend equivalents to be released within 60 days for all directors and executive officers as a group. Excludes 81,018 fully vested deferred stock units, restricted stock units and related dividend equivalents.

36


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 the 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 fiscal 2014, except for a late Form 4 that was filed in May 2014 to report a sale of shares by Mr. Rosenberg that was reported late by his broker.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION DECISIONS
 
 
 
 
 
None of the members of our Compensation Committee are, or have been, employees or officers of the Company. During fiscal 2014, no member of the Compensation Committee had any relationship with us requiring disclosure under Item 404 of Regulation S-K. During fiscal 2014, none of our executive officers served on the compensation committee (or equivalent) or board of another entity whose executive officer(s) 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 28, 2014 (number of shares in millions): 
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)
74

(4)
$
41.58

 
77

(6)
Equity compensation plans not approved by stockholders (3)
2

(5)
$
28.70

 

  
Total
76

  
$
41.23

 
77

  
 
 
 
 
 
 
 
 
(1)
Weighted Average Exercise Price of Outstanding Options does not include outstanding PSUs, time-based RSUs and performance-based RSUs, which were all granted under an equity compensation plan approved by stockholders.
(2)
Consists of four plans: the Company’s 2001 Stock Option Plan, 2006 Long-Term Incentive Plan, 2001 Non-Employee Directors’ Stock Option Plan and the Amended and Restated 2001 Employee Stock Purchase Plan.
(3)
Consists of the Atheros Communications, Inc. 2004 Stock Incentive Plan, as amended (the Atheros Plan), which was assumed in connection with the acquisition of Atheros in May of 2011, and other plans assumed in connection with mergers and acquisitions.
(4)
Includes approximately 32,859,000 shares that may be issued upon the satisfaction of performance objectives or other conditions pursuant to PSUs, time-based RSUs and performance-based RSUs granted under the 2006 Long-Term Incentive Plan. The PSUs include the maximum number of shares that may be issued.
(5)
Includes 640,000 shares that may be issued under the Atheros Plan.
(6)
Includes approximately 6,338,000 shares reserved for issuance under the Amended and Restated 2001 Employee Stock Purchase Plan.

37


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, which would be reportable as a related-person transaction under SEC rules. The Audit Committee’s charter also provides that the Audit Committee may delegate review and approval of employment-related, related-person transactions to the Compensation Committee. 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 2014, we employed the family members of certain directors and executive officers. The Audit Committee reviewed, and delegated to the Compensation Committee the approval of, such related-person transactions, and the Compensation Committee 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. Each family member 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 directors or executive officers as having a beneficial interest in the compensation of family members described below that is material to them or the Company. Restricted stock units were granted under our 2006 Long-Term Incentive Plan and generally vest over three years from the grant date, contingent upon continued service with the Company.
Duane A. Nelles’s son, Duane A. Nelles III, serves as Vice President, QCT Corporate Development, Qualcomm Technologies, Inc. During fiscal 2014, Duane A. Nelles III earned $281,781 in base salary and $150,000 in cash incentives and received restricted stock unit grants totaling 5,523 shares with an aggregate grant date fair value of $400,057.
Duane A. Nelles’s son, Paul S. Nelles, serves as a Senior Program Manager, Qualcomm Technologies, Inc. During fiscal 2014, Paul S. Nelles earned $127,150 in base salary and $22,850 in cash incentives and received restricted stock unit grants totaling 638 shares with an aggregate grant date fair value of $46,214.
Cristiano Amon’s brother, Rogerio Amon, serves as a Director, Program Management, Qualcomm Technologies, Inc. Rogerio Amon earned $179,113 in base salary and $52,500 in cash incentives during fiscal 2014 and received restricted stock unit grants totaling 1,434 shares with an aggregate grant date fair value of $103,859.
Steven M. Mollenkopf’s brother, James D. Mollenkopf, serves as a Senior Director, Strategic Development, Qualcomm Technologies, Inc. James D. Mollenkopf earned $223,070 in base salary and $94,000 in cash incentives during fiscal 2014 and received restricted stock unit grants totaling 2,905 shares with an aggregate grant date fair value of $211,070.
Donald J. Rosenberg’s son-in-law, Lucian Iancovici, serves as a Manager, Ventures, Qualcomm Technologies, Inc. Lucian Iancovici earned $164,777 in base salary and $72,796 in cash incentives during fiscal 2014 and received restricted stock unit grants totaling 360 shares with an aggregate grant date fair value of $26,077.
Daniel L. Sullivan’s daughter, Megan Delgado, serves as a Staff Manager, Marketing, Qualcomm Technologies, Inc. Megan Delgado earned $84,215 in base salary and $29,900 in cash incentives during fiscal 2014 and received restricted stock unit grants totaling 734 shares with an aggregate grant date fair value of $54,036.

38


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 2015 Proxy Statement.
COMPENSATION COMMITTEE

Marc I. Stern, Chair
Barbara T. Alexander
Jonathan Rubinstein

39


EXECUTIVE COMPENSATION AND RELATED INFORMATION
COMPENSATION DISCUSSION AND ANALYSIS
 
 
 
 
 
OUR NAMED EXECUTIVE OFFICERS FOR FISCAL 2014
 
 
 
 
 
Our Named Executive Officers, or “NEOs,” for fiscal 2014 were as follows:
 
 
 
 
Mr. Steven M. Mollenkopf, Chief Executive Officer (CEO), has 20 years of service with Qualcomm and has been CEO since March 2014.
 
Mr. George S. Davis, Executive Vice President and Chief Financial Officer (CFO), has 2 years of service with Qualcomm.
 
 
 
 
Dr. Paul E. Jacobs, Executive Chairman, has 24 years of service with Qualcomm and has been Executive Chairman since March 2014. He served as CEO from July 2005 to March 2014. Dr. Jacobs has also been Chairman of the Board since March 2009.
 
Mr. Cristiano R. Amon, Executive Vice President, Qualcomm Technologies, Inc. & Co-President, QCT, has 17 years of service with Qualcomm and has been Co-President, QCT since October 2012.
 
 
 
 
Mr. Derek K. Aberle, President, has 14 years of service with Qualcomm and has been President since March 2014.
 
Dr. Venkata S. M. Renduchintala, Executive Vice President, Qualcomm Technologies, Inc. & Co-President, QCT, has 10 years of service with Qualcomm and has been Co-President, QCT since October 2012.
UNIQUE CHALLENGES IN FISCAL 2014 AND SPECIAL COMPENSATION ACTIONS
 
 
 
 
 
In early fiscal 2014, the Board appointed Mr. Mollenkopf to the position of Chief Executive Officer-elect, and he commenced his service as Chief Executive Officer (CEO) immediately following the 2014 annual meeting of stockholders on March 4, 2014. At the same time, Dr. Jacobs stepped down as CEO and assumed the role of Executive Chairman, remaining an employee of the Company and continuing to serve as Chairman of the Board of Directors. On March 10, 2014, Mr. Aberle was appointed President. The Board is pleased to have the talents of these three world-class executives who have worked together building Qualcomm for nearly 14 years and who will continue to grow the Company.

40


Qualcomm is an established leader in mobile communications. The Company’s competitors are implementing mobile strategies and investing significantly in the mobile communications industry. These efforts include attempts to recruit members of Qualcomm management who are essential to the Company’s long-term success. Based on their aggressive recruiting efforts, companies with interests in the mobile communications industry appear to view Qualcomm’s senior management team as an attractive source of talent. As a result, Qualcomm lost several senior level employees to other companies. Accordingly, the Compensation Committee, at the Board’s request, initiated strategies, consistent with our overall compensation philosophy, to meet these challenges by taking aggressive retention-related compensation actions for key talent.
The Compensation Committee, in consultation with its independent compensation consultants, initially considered utilizing employment contracts for retention purposes. However, the Compensation Committee ultimately affirmed our long-standing practice of employing all U.S.-based employees, including all our NEOs, “at will,” without severance agreements or employment contracts. Instead, the Compensation Committee strongly favored equity-based compensation to achieve its objectives to incentivize and retain the management team while aligning the compensation with stockholders’ interests. The Compensation Committee’s retention actions included:
Maintaining annualized total compensation targets for the NEOs while changing the timing of certain of their equity compensation in a way that increases retention without paying above our annualized total compensation targets (by using front-loaded restricted stock units), and
In some cases, further strengthening retention with additional, special equity awards that were determined after considering the competitive practices and the value of sign-on awards offered by potential competitors for executive talent.
Front-Loaded Restricted Stock Units (RSUs). Under the retention strategy, the annual equity compensation targets for each NEO remained the same, only the timing of the anticipated grants was accelerated, and the vesting schedules were restructured to provide for annual vesting over five years rather than the typical three years. The single grant represents the value of the annual RSUs that the Compensation Committee anticipated it would have granted to each NEO over the next three or five years. The three and five year amounts were determined by considering the need to provide meaningful amounts that would also increase potential competitors’ costs to recruit while maintaining a near-term retention focus. The Compensation Committee anticipates that it will again grant RSUs to the NEOs in either three or five years, depending on the time period the front-loaded RSUs were intended to cover for each individual. This approach strengthens the incentives for the NEOs to remain at Qualcomm by increasing the amount of equity that would be forfeited if an NEO was to depart, without increasing the value of compensation paid by the Company over this timeframe. Any unvested RSUs will be forfeited if an NEO voluntarily leaves Qualcomm.
Messrs. Mollenkopf and Aberle received front-loaded RSUs with grant date fair values of $30 million and $16.1 million, respectively. These values reflect five years of annual RSU awards and vest in five equal annual installments beginning on the first anniversary of the grant date, contingent upon continued employment with the Company. These grants represent annual values of $6 million for Mr. Mollenkopf and $3.2 million for Mr. Aberle. They will be eligible to receive RSUs again in fiscal 2019.
Dr. Renduchintala and Messrs. Davis and Amon received front-loaded RSUs with grant date fair values of $6.9 million for Dr. Renduchintala and Mr. Davis and $4.1 million for Mr. Amon. These values reflect three years of annual RSU awards and vest in five equal annual installments beginning on the first anniversary of the grant date, contingent upon continued employment with the Company. These grants represent annual values of $2.3 million for Dr. Renduchintala and Mr. Davis and $1.4 million for Mr. Amon. They will be eligible to receive RSUs again in fiscal 2017.
Additional, special RSUs. These RSUs delay the vesting two years longer than our historical practice of annual vesting over three years. These RSUs are intended to further strengthen retention incentives, alignment with stockholders’ interests and the potential cost for a competitor to recruit key executives who possess unique and critical skills. As with the front-loaded RSUs, unvested special RSUs will be forfeited if an NEO voluntarily leaves Qualcomm.
Messrs. Mollenkopf and Aberle received special RSUs with grant date fair values of $20 million and $10.5 million, respectively, and Dr. Renduchintala and Mr. Amon each received special RSUs with a grant date fair value of $3

41


million. The RSUs vest in equal installments on the third, fourth and fifth anniversaries of the grant dates, contingent upon continued employment with the Company.
Compensation arrangement for Dr. Jacobs, Executive Chairman. Dr. Jacobs’s new compensation arrangement is equity-based with an annual salary of $1 and no annual cash incentive opportunity. The $45 million grant date fair value of his front-loaded RSUs considers his new role and new compensation structure. The Compensation Committee does not anticipate providing Dr. Jacobs with additional RSUs for the next five years. This grant represents an annual value of $9 million when spread over the five-year service period. The RSU award vests in equal installments on the third, fourth and fifth anniversaries of the grant date, contingent upon continued employment with the Company. Dr. Jacobs will forfeit any unvested RSUs if he leaves Qualcomm voluntarily, creating strong incentive for him to remain with Qualcomm. Dr. Jacobs must hold the net shares remaining after required taxes are paid upon vesting (net after-tax shares) from this RSU award until at least one year following his retirement or earlier separation of service from Qualcomm. The award provides for prorated vesting for the number of full years worked from the grant date should he terminate for “good reason” or should the Company terminate him without cause because in those cases he will be deemed to have earned a portion of the front-loaded RSUs.
Alignment with stockholders’ interests. At the times the Compensation Committee approved these compensation arrangements, it affirmed its intent to continue to grant annual performance stock units (PSUs) to the NEOs. PSUs allow the recipient to earn a variable number of shares of our common stock based on the relative performance of our total shareholder return (TSR) compared to that of the NASDAQ-100. The total amount of shares may not exceed the target amount if our TSR for the entire performance period is negative. In determining the annual PSU award amounts, the Compensation Committee may consider anticipated absolute and relative financial performance, absolute and relative TSR, anticipated year-over-year growth for fiscal 2015, results of the stockholders’ “Say on Pay” vote and investor feedback.
Except for the RSUs awarded to Mr. Mollenkopf, the front-loaded RSUs include a requirement that the Company must meet an adjusted GAAP operating income objective in order for them to vest, which is intended to qualify the RSUs for tax deductibility under Section 162(m) of the Internal Revenue Code (Section 162(m)). The RSU awards granted to Mr. Mollenkopf did not include such an objective because the Compensation Committee wanted the award to Mr. Mollenkopf to be absolute and unconditional and to compare favorably to potential competitive offers.
OUR TOTAL COMPENSATION PROGRAM
 
 
 
 
 
Figure 7 depicts the key components of our compensation program.
Figure 7: Graphic Representation of Our Compensation Program

42


Salary. In setting base salary, the Compensation Committee considers competitive practices, internal comparisons and individual performance. Salary amounts reflect each NEO’s level of responsibility, expertise, skills, knowledge and experience. Generally, base salary amounts are effective at the beginning of the fiscal year. The Compensation Committee may adjust base salary amounts during the fiscal year, as it did during fiscal 2014, to reflect changes in roles and responsibilities.
Annual Cash Incentive Plan (ACIP). Cash incentives are based on the Company’s achievement of the ACIP financial performance metrics, the Compensation Committee’s consideration of other strategic and operational achievements and its exercise of negative discretion to pay amounts that are less than the maximum amounts it established for Section 162(m) purposes. To maximize tax deductibility, amounts earned under the ACIP are designed to qualify as performance-based compensation under Section 162(m).
Figure 8 illustrates the calculation of the performance-adjusted ACIP amount that is the foundation upon which the Compensation Committee determined the fiscal 2014 ACIP earned amounts for each NEO.
Figure 8: Process for Determining ACIP Amounts (1)
(1) Sums may not equal totals due to rounding.
During the first quarter of fiscal 2014, the Compensation Committee, after consultation with the CEO and review by the Board of Directors, established Non-GAAP revenues and Non-GAAP operating income objectives for the fiscal 2014 ACIP. Figure 9 illustrates the following:
The growth in our Non-GAAP financial objectives compared to the prior fiscal year results. The fiscal 2014 objectives reflected 8% and 13% growth over fiscal 2013 Non-GAAP revenues and Non-GAAP operating income, respectively. These growth objectives approximate the 75th percentile of our peer companies’ financial performance results for the last 4-quarter performance (as of June 30, 2014). We believe that this demonstrates the Compensation Committee’s desire to set financial performance objectives that reflect robust performance. The most directly comparable GAAP financial measures and information reconciling these Non-GAAP financial measures to our financial results prepared in accordance with GAAP are included in Appendix 4.
The alignment of the Incentive Multiple with overall weighted financial performance. The Incentive Multiple is calculated based on the weighted financial performance and is applied to the target ACIP amount to determine the performance-adjusted ACIP amount for individual awards.-

43


Figure 9: Non-GAAP Revenues and Operating Income Targets and Actual Financial Performance
Consistent with past practice, we applied a relative weighting of 40% to Non-GAAP revenues and 60% to Non-GAAP operating income to emphasize the relative importance of operating income to stockholder value creation. We use Non-GAAP financial objectives because they: (1) are the key metrics we use to manage the business; (2) focus the executive team on the performance and efficiency of our core businesses, including our QCT and QTL segments; (3) provide a direct link between decisions and outcomes; and (4) are key factors that influence stockholder value.
These Non-GAAP objectives exclude the Qualcomm Strategic Initiatives (QSI) segment and certain share-based compensation, acquisition-related items and tax items because we view such items as unrelated to the operating activities and performance of our core businesses, which is consistent with the focus of the ACIP.
Performance Stock Units (PSUs). PSUs allow the recipient to earn a variable number of shares of our common stock based on the relative performance of our total shareholder return (TSR) compared to that of the NASDAQ-100. Eligible participants must also satisfy time-based service requirements. The PSUs are designed to qualify as performance-based compensation under Section 162(m). At its sole discretion, the Compensation Committee determines the mix of equity awards, the target value of PSUs, the achievement of the performance measures and the potential maximum number of PSUs that may be earned.
The number of shares earned through our PSU program is based on both relative and absolute TSR. Relative TSR compares our TSR percentile rank among the companies comprising the NASDAQ-100 within a three-year period. If our TSR is at the 60th percentile, the program would award 100% of the target PSUs, and if our TSR is at the 90th percentile, the program

44


would award 200% of the target PSUs. Below the 33rd percentile, no PSUs would be earned. The percent of the PSU target award amount earned between award levels interpolates linearly with our TSR percentile ranking. If our absolute TSR for the entire three-year performance period is negative, the total number of shares earned may not exceed the target number of shares. We continue to use the NASDAQ-100 as the basis of comparison because it: (1) represents a broader capital market with which we compete for talent; (2) represents the broad range of our business operations, which include licensing of intellectual property and sales of products and services; and (3) is both objectively determined and readily available, and our performance compared to the index can be evaluated by a third party.
Below we provide a summary of the key design features of our PSU programs, the payout multiples for the completed fiscal 2012 - 2014 program and for each NEO except Mr. Davis, Mr. Amon and Dr. Renduchintala, the number and values of shares earned for the fiscal 2012 - 2014 program. Mr. Davis joined Qualcomm in March 2013, and Mr. Amon and Dr. Renduchintala were not executive officers at the time the fiscal 2012 - 2014 program PSUs were awarded, and thus they did not participate in the fiscal 2012 - 2014 program. Figure 10 provides an overview of the key design features of the fiscal 2012 - 2014, fiscal 2014 - 2015 and fiscal 2015 - 2017 PSU programs.
Key features of the fiscal 2015 - 2017 PSU program include:
Our TSR for the performance period must be positive to earn more than the target award amount. The total award amount earned may not exceed the target amount if our TSR for the performance period is negative. This feature limits compensation for positive relative performance against the peer group when stockholders may incur a loss on their investment over the period (as may occur in a volatile or depressed securities market).
The performance period has four separate measurement periods of 18, 24, 30 and 36 months. All measurement periods begin on September 29, 2014 (the first day of fiscal 2015). Measurement Period 1 concludes on March 27, 2016; Measurement Period 2 concludes on September 25, 2016; Measurement Period 3 concludes on March 26, 2017; and Measurement Period 4 concludes on September 24, 2017 (the last day of fiscal 2017). Separate measurement periods help to average volatility, encourage and reward sustained and continuous growth throughout the performance period and align our NEOs’ interests with our stockholders’ interests.
The PSUs will not vest until 10 days after the end of the performance period and until the Compensation Committee has certified the performance results. The PSUs include dividend equivalent rights, which accrue, in the form of additional shares of common stock, on earned shares with vesting and distribution consistent with the vesting and distribution of the underlying shares. No dividends are paid on unvested and unearned PSUs.


45


Figure 10: Overview of PSU Programs Key Design Features
 
Fiscal 2012 - 2014 Program
Fiscal 2014 - 2015 Program
Fiscal 2015 - 2017 Program
Status as of 9/28/14
Completed
Awards approved by Compensation Committee. No completed measurement periods.
Awards approved by Compensation Committee. No completed measurement periods.
Performance Period
Fiscal 2012 - 2014 (9/26/2011 - 9/26/2014)
Fiscal 2014 - 2015 (9/30/2013 - 9/27/2015)
Fiscal 2015 - 2017 (9/29/2014 - 9/24/2017)
Interim Measurement Periods End Dates
3/29/2013
9/27/2013
3/28/2014
9/26/2014
3/29/2015
9/27/2015
3/27/2016
9/25/2016
3/26/2017
9/24/2017
Maximum Award
200% of target award if relative TSR is 133% or more of the NASDAQ-100
200% of target award if relative TSR is at or above the 90th percentile among the NASDAQ-100
Target Award
100% of target award if relative TSR is 100% of the NASDAQ-100
100% of target award if relative TSR is at the 60th percentile among the NASDAQ-100
Threshold Award
33% of target award if relative TSR is 66% of the NASDAQ-100
33% of target award if relative TSR is at the 33rd percentile among the NASDAQ-100
Minimum Award
0% of target award if relative TSR is less than 66% of the NASDAQ-100
0% of target award if relative TSR is below the 33rd percentile among the NASDAQ-100
Absolute TSR Provision
If our TSR for the Performance Period is negative, the total award may not exceed the target amount so that high relative performance is not over-rewarded in a down market.
Dividend Equivalents
Provides dividend equivalent rights that accrue, in the form of additional shares of our common stock, on earned PSUs (but not on unearned PSUs) and that vest at the same time as the underlying earned PSUs.
The fiscal 2012 - 2014 and fiscal 2015 - 2017 PSU programs included four measurement periods of 18, 24, 30 and 36 months, and the fiscal 2014 - 2015 PSU program included two measurement periods of 18 and 24 months. For the fiscal 2012 - 2014 and 2015 - 2017 PSU programs, we allocated 25% of the target PSU award to each measurement period, and for the fiscal 2014 - 2015 program, we allocated 50% of the target PSU award to each measurement period. For the fiscal 2014 - 2015 program, the Compensation Committee changed the timing of granting PSUs from the first quarter to the fourth quarter of the fiscal year, which resulted in a 22-month period (rather than the historical 12-month period) between PSU grants (from November 2011 to September 2013) for our NEOs. Accordingly, the Compensation Committee reduced the PSU period from the 36-month period established in prior PSU programs to a 24-month period to align the vest date with what would have been the vest date had the PSUs been granted under the former schedule. For the fiscal 2015 - 2017 program, we resumed the 36-month performance period. Our TSR is compared to that of the NASDAQ-100 at the end of each measurement period, and an award is determined according to the relevant payout schedule. The number of shares of our common stock earned for a completed measurement period could be adjusted if our absolute TSR for the entire performance period is negative. The number of shares of our common stock to be distributed to each participant at the end of the multi-year performance period is the sum of the shares earned for each measurement period and may include dividend equivalents as described above.
The fiscal 2012 - 2014 PSU program is 100% complete, and earned shares, including dividend equivalents on earned shares for the program, are vested and settled. The percentages of target awards earned for each completed measurement period for the fiscal 2012 - 2014 program are presented in Figure 11, and the PSU award amounts, including the number and values of shares earned as of the end of fiscal 2014, are presented in Figure 12. No measurement periods have been completed for the fiscal 2014 - 2015 and 2015 - 2017 programs.

46


Figure 11: Summary of Percent of Target Award Earned for Completed Measurement Periods
PSU Measurement Period Results
 
Percent of Target Award Earned
Fiscal Years Program
1st Measurement Period
2nd Measurement Period
3rd Measurement Period
4th Measurement Period
Overall
2015 - 2017
not yet completed
not yet completed
not yet completed
not yet completed
not yet completed
2014 - 2015
not yet completed
not yet completed
n/a
n/a
not yet completed
2012 - 2014
112.0%
90.0%
84.0%
66%
88%
Figure 12: Summary of PSU Awards and Earned Shares for the Fiscal 2012 -2014 Program (1)
Name
Fiscal Year of Grant
Target Shares Granted (#)
Grant Date Fair Value of Target Shares
($)
Shares Earned for the fiscal 2012 - 2014 Program (#)
Value of Shares Earned at Fiscal 2014 Year End ($)
 Steven M. Mollenkopf
2012
 
58,577

3,779,974

51,549
3,869,268
2012
(2)
41,841

2,700,000

36,822
2,763,859
 Paul E. Jacobs
2012
 
125,523

8,099,999

110,462
8,291,278
 Derek K. Aberle
2012
 
41,841

2,700,000

36,822
2,763,859
2012
(2)
33,473

2,160,013

29,459
2,211,193
(1)
Excludes Mr. Davis because he joined Qualcomm in fiscal 2013 and Dr. Renduchintala and Mr. Amon because they were not executive officers at the time the fiscal 2012 - 2014 program PSUs were awarded.
(2)
In fiscal 2012, the Compensation Committee granted to Messrs. Mollenkopf and Aberle annual PSUs and additional, special PSUs to recognize their promotions to President & Chief Operating Officer and Executive Vice President & Group President, respectively. These additional, special PSUs vest on the third, fourth and fifth anniversaries of the grant dates, whereas the annual PSUs cliff vest upon completion of the 3-year performance period.
Restricted Stock Units (RSUs). A fixed number of shares of common stock may be earned subject to eligible participants satisfying time-based service requirements and, for some awards, performance conditions. At its sole discretion, the Compensation Committee determines the mix of equity awards, the value of RSU awards granted each year and any provisions to qualify for tax deductibility under Section 162(m).
All Other Compensation. These programs include tax-deferred retirement savings, financial planning services, insurance and personal use of a corporate jet, among others. The Compensation Committee is responsible for the design of all compensation and benefit plans.
THE OBJECTIVES OF OUR COMPENSATION PROGRAM
 
 
 
 
 
Our compensation program is designed to attract, retain, motivate and engage highly talented and experienced executives by focusing on the following six objectives:

47


Align the interests of our NEOs and long-term stockholders
The majority of compensation we deliver to our NEOs is in the form of long-term equity awards. Ultimately, the value that each NEO may realize at the time equity awards vest increases with the appreciation in our stock price, thus motivating our NEOs to build stockholder value.
Variable compensation from year to year based on the Company’s performance (“pay for performance”)
Our NEOs’ ACIP earnings vary with our financial performance compared to our annual financial goals. The amount of compensation delivered with RSUs varies with the price of our common stock. The amount of compensation delivered with PSUs varies with our TSR relative to the NASDAQ-100 and includes threshold, target and maximum amounts.
Competitively reasonable and appropriate compensation for our business needs and circumstances
The Compensation Committee considers competitive compensation practices of other companies as reference points for comparative purposes. The Compensation Committee does not target specific benchmark percentiles.
Internally fair and equitable compensation relative to roles, responsibilities and work relationships
The Compensation Committee considers certain business and individual performance factors to evaluate internal fairness and equitibility and monitors the internal compensation relationships among the NEOs, but it does not attempt to establish specific internal relationships.
Reflect high standards for corporate governance and compensation-related risk management
Our compensation programs are subject to a thorough evaluation process that includes Compensation Committee review and approval of program design and practices as well as advice from an independent compensation consultant engaged by the Compensation Committee. We have many practices that promote sound leadership, decision-making and actions among our executives that are consistent with our values of innovation, execution and partnership without taking inappropriate or unnecessary risks.
Tax efficiency for the Company
Our compensation program is designed with the intent of complying with the requirements of Sections 162(m), except where noted, and 409A of the Internal Revenue Code.
Section 162(m). Section 162(m) places a $1 million annual limit on the amount that a public company may deduct for compensation paid to the NEOs, excluding the CFO. The $1 million limit does not apply if the compensation meets Section 162(m) requirements for performance-based compensation. Compliance with Section 162(m) did not influence the allocation of compensation among base salary, target annual cash incentives and long-term incentives for fiscal 2014. From time to time, we may pay compensation to our Section 162(m) covered officers that may not be tax deductible if there are compelling business reasons to do so.
We designed and administered our fiscal 2014 ACIP as cash-denominated performance units granted under the 2006 Long Term Incentive Plan (LTIP) to be eligible for tax deductions to the extent permitted by the relevant tax regulations, including Section 162(m).
All shares distributed or to be distributed under the fiscal 2012 - 2014, fiscal 2014 - 2015 and fiscal 2015 -2017 PSU programs are structured to be performance-based compensation, and therefore qualify as deductible compensation under Section 162(m).
Except for the grants to Mr. Mollenkopf, the RSUs granted to our executive officers in fiscal 2014 are structured to be performance-based compensation, and therefore qualify as deductible compensation under Section 162(m).

48


Section 409A. Under Section 409A, a nonqualified deferred compensation plan (such as our Qualcomm Non-Qualified Deferred Compensation (QNQDC) Plan) must comply with certain requirements related to the timing of deferral and distribution decisions. Otherwise, amounts deferred under the plan could be included in gross income when earned and be subject to additional penalty taxes. We administer the QNQDC Plan and equity awards in accordance with Section 409A requirements. Nonqualified stock options are generally exempt from Section 409A if the options satisfy certain requirements. PSUs and RSUs have been designed to be exempt from Section 409A.
HOW THE KEY COMPONENTS OF OUR COMPENSATION PROGRAM ALIGN WITH THESE OBJECTIVES
 
 
 
 
 
The key components of our compensation program align with the objectives outlined above:
The ACIP and equity awards align the interests of our NEOs with stockholders, provide compensation that varies from year to year based on Company and individual performance and are tax efficient for the Company. These programs provide a balance of annual and long-term performance focus using different performance metrics.
Salary, ACIP earnings and equity awards provide reasonable and appropriate compensation that is internally fair and equitable in order to attract and retain experienced and successful executives.
We believe all components of our compensation program are designed and administered to reflect high standards of corporate governance and compensation-related risk management.
HOW WE DETERMINE THE AMOUNT OF COMPENSATION FOR EACH NEO
 
 
 
 
 
We consider several factors in determining the compensation levels of our executive officers, including: (1) competitive practices and retention considerations; (2) internal relationships and equitibility in light of business and individual performance factors; (3) the results of stockholder advisory votes on executive compensation and communications with stockholders; (4) the CEO’s recommendations for the other NEOs; and (5) the perspectives provided by the Compensation Committee’s independent compensation consultant.
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 the NEOs. Ultimately, it is the Compensation Committee’s judgment about these factors along with the other factors discussed in this section that forms the basis for determining our executive officers’ compensation.
We discuss each of these factors in the following sections.
We review the compensation practices of other companies with whom we compete.
The Compensation Committee identified the peer companies to use for competitive analyses, taking into account the recommendations made by the Compensation Committee’s independent compensation consultant. The peer companies were identified based on the following characteristics:
Principal business in technology, telecommunications and media (excluding those that are primarily content producers) based on the Global Industry Classification System (GICS);
Generally comparable in both market capitalization and revenues using a guideline of one-quarter to four times our market capitalization and revenues;
We believe that market capitalization is appropriate as the primary quantitative criterion because:
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 capitalization;

49


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.
We also include revenues as a secondary quantitative criterion because revenues are commonly used as a selection criterion by our peer companies, third-party compensation survey providers and proxy advisory services.
Comparable compensation model; and
Peers of peers (i.e., the peer companies disclosed by the companies we use as peers).
In May 2014, the Compensation Committee selected the following peer companies:
Figure 13: Peer Companies
ADP
Amazon.com
Broadcom
Cisco
Comcast
DirecTV
eBay
EMC
Facebook (new)
Google
Honeywell
IBM (new)
Intel
Lockheed Martin
Microsoft
Oracle
Texas Instruments
Time Warner Cable
United Technologies
Yahoo!
Compared to the prior year’s peer group, Corning was removed because its market capitalization was below the threshold, and it is not considered a relevant labor-market competitor. Broadcom and Yahoo! had market capitalization values slightly below the threshold but were retained in the peer group for continuity and to maintain a sufficiently robust sample size. Facebook and IBM were added because they meet the selection criteria and are prominent technology companies and potential labor-market competitors.
Figure 14 sets forth Qualcomm’s percentile rankings among the peer group and illustrates that our market capitalization is strongly supported by our net income and EBITDA margin, which in turn reinforces the prioritization of the peer selection criteria. Relative to our peer companies, we are below median for revenues and above median for the other metrics. Data reflected in Figure 14 represents the latest four quarters of data available on March 31, 2014 reported in Standard & Poor’s Compustat reports as of March 31, 2014, the time at which Frederic W. Cook & Co., Inc. (FWC), our independent executive compensation consulting firm, prepared the peer company selection analysis used by the Compensation Committee.
Figure 14: Qualcomm’s Relative Rankings Among Peer Companies as of March 31, 2014
Metric
Qualcomm’s
Percentile Ranking
Metric
Qualcomm’s
Percentile Ranking
Revenues (latest available 4 quarters)
38th percentile
EBITDA Margin (latest available 4 quarters)
76th percentile
GAAP Net Income (latest available 4 quarters)
68th percentile
Market Capitalization
(3/31/14)
69th percentile
EBITDA (latest available 4 quarters)
60th percentile
Market Capitalization
(12-month average from 4/30/13 - 3/31/14)
62nd percentile
FWC provides analyses of peer company competitive practices. The Compensation Committee considers these peer company competitive analyses, along with the other factors described in this section, when determining the base salaries, ACIP targets, long-term equity grant date fair values and the total direct compensation for the CEO, other NEOs and the other executive officers.
We consider internal relationships and equitibility in light of business and individual performance factors.
The Compensation Committee intends our compensation amounts to be internally fair and equitable relative to roles, responsibilities and relationships among our NEOs, in addition to being competitively reasonable and appropriate.

50


Accordingly, the Compensation Committee also considers the following factors in the process of determining compensation levels for each NEO: (1) the Compensation Committee’s evaluation of the NEO; (2) individual performance and contributions to financial goals; (3) labor market conditions, the need to retain and motivate the NEOs and each NEO’s potential to assume increased responsibilities and contribute long-term value to the Company; (4) management succession plans and bench strength; (5) operational management, such as project milestones and process improvements; (6) internal working and reporting relationships and our desire to encourage partnership and teamwork among our NEOs; (7) individual expertise, skills, knowledge and tenure in position; (8) leadership and compliance with our Code of Ethics and our Code of Business Conduct; and (9) leadership, including developing and motivating employees, collaborating within Qualcomm, attracting and retaining employees and personal development.
We consider the results of stockholder advisory votes on executive compensation and communication with stockholders.
The Compensation Committee considered the 95% “FOR” voting results of the non-binding advisory vote on executive compensation (“Say-on-Pay”) at the 2014 annual meeting of stockholders on March 4, 2014 (relating to the fiscal year ended September 29, 2013) and determined that the modifications to the compensation program and practices implemented in fiscal 2013 had the intended outcomes and that the “Say-on-Pay” vote suggested that no further changes to our compensation programs and practices were appropriate at this time.
We discuss with the CEO his recommendations for the other NEOs and other executive officers.
The Compensation Committee and the CEO discuss (1) our business performance; (2) the CEO’s performance; and (3) the CEO’s evaluation of and compensation recommendations for the other NEOs and other executive officers. The Compensation Committee, without the CEO present, determines the base salaries, ACIP amounts and RSU and PSU awards for the CEO, other NEOs and other executive officers.
We engage independent compensation consultants and other advisors to obtain advice and assistance.
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. During fiscal 2014, the Compensation Committee engaged an independent executive compensation consulting firm, FWC, to advise it on compensation matters. FWC reports directly to the Compensation Committee. We did not engage FWC for any additional services during fiscal 2014 beyond its support of the Compensation Committee, and the engagement did not raise any conflicts of interest. Pursuant to this engagement, FWC:
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 our executive and non-executive compensation programs;
Provided analyses of aggregate equity compensation spending and related dilution;
Reviewed and commented on recommendations regarding NEO compensation;
Advised the Compensation Committee on specific issues as they arose, including retention strategies and compensation for our Executive Chairman and our new CEO; and
Kept the Compensation Committee informed of executive compensation trends and regulatory and governance considerations related to executive compensation.
Representatives from FWC attended all Compensation Committee meetings during fiscal 2014 and interacted with the Committee Chair, members of our human resources staff and outside legal counsel prior to and following Compensation

51


Committee meetings. We incurred $435,000 in fees for FWC’s services during fiscal 2014 (compared to $242,810 during fiscal 2013), all for work that was directly in support of the Compensation Committee and the Committee’s execution of its responsibilities under its charter.
The Compensation Committee also sought and received advice from our outside legal counsel, DLA Piper LLP. Our human resources department supported the Compensation Committee in its work, collaborated with FWC and DLA Piper, conducted analyses and managed our compensation and benefit programs.
THE AMOUNTS OF COMPENSATION OUR NEOs RECEIVED FOR FISCAL 2014
 
 
 
 
 
Members of the Compensation Committee, in their committee and Board of Director roles, regularly engage with our executive officers through various briefings and discussions, providing them opportunities to consider the leadership the CEO and the other NEOs contribute to the Company’s annual and longer-term performance. In July 2014, the Compensation Committee conducted its regularly scheduled annual review of our peer companies’ compensation practices, noting FWC’s analysis that our executive officers’ salaries and target total cash incentives are in a median range and that the annualized equity grants are generally positioned between the median and 75th percentile of our peer companies. Following this review, the CEO, in collaboration with the EVP of Human Resources, prepared recommendations for the fiscal 2014 ACIP earnings and PSU amounts and the fiscal 2015 base salary and ACIP targets. In September 2014, the Compensation Committee reviewed these recommendations and also considered the CEO’s and the other NEOs’ self-evaluations, which highlight key strategic and operational accomplishments and leadership actions that communicate, promote and support Qualcomm’s ethical standards and compliance culture. The CEO also provided the Compensation Committee an oral assessment of his and the other NEOs’ accomplishments and opportunities for improvement, including an assessment of each NEO’s overall performance and potential for future roles. It is with these perspectives that the Compensation Committee, in executive session without the CEO present, considered the CEO’s and the other NEOs’ fiscal 2014 PSU award amounts (for the fiscal 2015 - 2017 performance period), any application of negative discretion for the fiscal 2014 ACIP earned amounts and any adjustments to base salaries and ACIP targets for fiscal 2015.
Contribution of certain pay components to annualized total compensation for fiscal 2014
Figure 15 provides an overview of the contribution of certain pay components to each NEO’s annualized total compensation (salary, ACIP earnings and annualized value of front-loaded RSUs and PSUs). In fiscal 2014, 83% of Mr. Mollenkopf’s annualized total compensation was in the form of long-term compensation (the annualized grant date fair value of RSUs and the grant date fair value of PSUs), and 92% was variable (ACIP earnings, annualized grant date fair value of front-loaded RSUs and grant date fair value of PSUs). Of the other NEOs’ annualized total compensation, an average of 81% was in the form of long-term compensation, and an average of 89% was variable.

52


Figure 15: Contribution of Certain Pay Components to Annualized Total Compensation for Fiscal 2014 (1)

(1)
All other compensation was less than 3% of annualized total compensation for each NEO.
(2)
The grant date fair values of front-loaded RSUs have been annualized, and the grant date fair values of special RSUs have been excluded.
Fiscal 2014 salaries
In September 2013, the Compensation Committee approved the fiscal 2014 base salaries for our executive officers, including the base salaries for our NEOs, as follows: $865,000 for Mr. Mollenkopf; $1,250,000 for Dr. Jacobs; $725,000 for Mr. Davis; $750,000 for Mr. Aberle; $475,000 for Mr. Amon; and $650,000 for Dr. Renduchintala. At the time the Compensation Committee approved these amounts, the base salaries were in the median to 75th percentile of peer company competitive practices, except for Dr. Renduchintala, whose base salary was set above the 75th percentile as part of a strategy to strengthen retention. Effective December 12, 2013, in connection with Mr. Mollenkopf’s appointment to the position of CEO-elect, the Compensation Committee increased his base salary to $1,100,000. Effective May 5, 2014, following Dr. Jacobs’s appointment to the position of Executive Chairman, the Compensation Committee approved an all-equity compensation arrangement for him and reduced his base salary to $1. Effective March 10, 2014, in connection with Mr. Aberle’s appointment to the position of President, the Compensation Committee increased his base salary to $780,000. Except for Dr. Jacobs, base salaries at the end of fiscal 2014 did not exceed the 75th percentile of peer company competitive practices. Dr. Jacobs’s $1 base salary precludes meaningful comparison to competitive practices.
Fiscal 2014 ACIP earnings
Figure 16 discloses the calculations for determining the fiscal 2014 performance-adjusted amounts and earned amounts for each NEO.

53


Figure 16: Fiscal 2014 ACIP Target, Performance-Adjusted Amounts and Earned Amounts
Name
ACIP Target Award
$
X
Incentive Multiple
=
Performance-Adjusted Amount
$
 
Earned Amount Awarded by Compensation Committee
$
 
Variance of Earned Amount vs Performance-Adjusted Amount
%
 Steven M. Mollenkopf (1)
2,200,000

 
0.71
 
1,562,000
 
1,550,000
 
-1%
 Paul E. Jacobs (2)
1,862,981

 
0.71
 
1,322,717
 
1,300,000
 
-2%
 George S. Davis
942,500

 
0.71
 
669,175
 
665,000
 
-1%
 Derek K. Aberle (3)
1,018,500

 
0.71
 
723,135
 
720,000
 
0%
 Cristiano R. Amon
475,000

 
 0.71
 
337,250
 
460,000
 
36%
 Venkata S. M. Renduchintala
650,000

 
0.71
 
461,500
 
460,000
 
0%
(1)
The target amount for Mr. Mollenkopf (200% of his base salary of $1,100,000) was approved by the Compensation Committee in December 2013.
(2)
The target amount for Dr. Jacobs was approved by the Compensation Committee in May 2014 and is prorated to reflect his service as CEO with an ACIP target of $3,125,000 (250% of his base salary of $1,250,000) from September 30, 2013 through May 4, 2014 and $0 from May 5, 2014 through September 28, 2014.
(3)
The target amount for Mr. Aberle was approved by the Compensation Committee in May 2014 and is prorated to reflect his service as President with ACIP targets of $975,000 (130% of his base salary of $750,000) from September 30, 2013 through May 4, 2014 and $1,053,000 (135% of his base salary of $780,000) from May 5, 2014 through September 28, 2014.
The Compensation Committee is authorized under the fiscal 2014 ACIP to adjust reported Non-GAAP revenues and Non-GAAP operating income for calculating financial performance on which fiscal 2014 cash incentives were determined. Adjustments are intended to eliminate the distorting effect of certain unusual income or expense items on year-over-year growth percentages if the Compensation Committee determines, in its discretion, that the items do not reflect a fair measurement of our operating performance. The Committee did not make any such adjustments for fiscal 2014. For both Mr. Amon and Dr. Renduchintala, the ACIP target is 100% of base salary, but their base salaries differ resulting in initial ACIP target amounts of $475,000 and $650,000, respectively. Because they serve as co-presidents of QCT, the Compensation Committee, at its discretion, adjusted Mr. Amon’s ACIP award to align with that of Dr. Renduchintala.
Fiscal 2014 equity awards
RSU Awards. See our discussion regarding special compensation actions that included front-loaded and special RSUs in the “Unique Challenges in Fiscal 2014 and Special Compensation Actions” section.
PSU awards. The Compensation Committee approved PSU awards it considered appropriate for annual equity compensation, taking into consideration the annualized value of the front-loaded RSUs awarded to the NEOs earlier in the fiscal year (see Figure 1) as well as anticipated absolute and relative financial performance, absolute and relative TSR and anticipated year-over-year growth from fiscal 2014 to fiscal 2015.

54


Figure 17: Grant Date Fair Values of PSUs Awarded to NEOs
Name
Grant Date Fair Value of Annual PSUs
Steven M. Mollenkopf
8,000,146
Paul E. Jacobs
9,000,164
George S. Davis
2,700,019
Derek K. Aberle
3,780,209
Cristiano R. Amon
3,620,169
Venkata S. M. Renduchintala
2,700,019

COMPENSATION DECISIONS FOR THE NEOs FOR FISCAL 2015
 
 
 
 
 
In September 2014, the Compensation Committee approved the fiscal 2015 base salary and ACIP targets (as a percentage of base salary) for our executive officers as set forth in Figure 18. The base salary increases reflect the Compensation Committee’s consideration of current competitive practices and its intent that base salaries and total target cash compensation should be competitive.
Figure 18: Fiscal 2014 and 2015 Base Salary and ACIP Targets (1) (2)
 
Base Salary
ACIP Target %
ACIP Target $
Target Total Cash
Name
2014
($)
2015
($)
2014
(%)
2015
(%)
2014
($)
2015
($)
2014
($)
2015
($)
Steven M. Mollenkopf
1,100,000

1,130,000

200%
200%
2,200,000

2,260,000

3,300,000

3,390,000

Paul E. Jacobs
1

1

1,862,981


2,832,965

1

George S. Davis
725,000

760,000

130%
130%
942,500

988,000

1,667,500

1,748,000

Derek K. Aberle
780,000

800,000

135%
135%
1,018,500

1,080,000

1,798,500

1,880,000

Cristiano R. Amon
475,000

525,000

100%
100%
475,000

525,000

950,000

1,050,000

Venkata S. M. Renduchintala
650,000

670,000

100%
100%
650,000

670,000

1,300,000

1,340,000

(1)
The fiscal 2014 base salaries and ACIP targets for Dr. Jacobs and Messrs. Mollenkopf and Aberle are the rates that were in effect at the end of fiscal 2014. See the sections “Fiscal 2014 Salaries” and “Fiscal 2014 ACIP Earnings” for discussions of changes to base salaries and ACIP targets approved by the Compensation Committee during fiscal 2014.
(2)
The fiscal 2014 target total cash amounts for Dr. Jacobs and Mr. Aberle reflect the prorated amounts that were approved by the Compensation Committee and that are described in the footnotes for Figure 16.
COMPENSATION PROGRAM BEST PRACTICES
 
 
 
 
 
The preceding discussion and analysis of the components and total compensation for our CEO and other NEOs reflects what we believe to be compensation program best practices. We listed these best practices in Proposal 4, the advisory vote on executive compensation. In this section, we provide a more thorough description of these best practices.

55


A significant portion of our NEOs’ compensation varies with the Company’s performance.
On average,79% of our NEOs’ fiscal 2014 annualized total compensation was attributable to the annualized grant date fair value of the front-loaded RSUs and the grant date fair value of PSUs, and 87% of their fiscal 2014 annualized total compensation was variable in the form of ACIP amounts, the annualized grant date fair value of the front-loaded RSUs and the grant date fair value of PSUs.
We have a balanced approach to incentive programs with differentiated measures.
We have both short-term (Non-GAAP revenues and Non-GAAP operating income) and multi-year (relative TSR) performance measures. We have a balance of time horizons for our annual incentive awards, including an annual cash incentive program (ACIP), overlapping multi-year PSU performance periods with interim measurement periods and RSUs that generally require three years of service to become fully vested, except for the front-loaded and additional, special RSUs granted to the executive officers in fiscal 2014, which vest over five years.
We have limits on the amounts of variable compensation that may be earned.
We limit the potential ACIP amounts that the NEOs may earn to 2x the target amount. We limit the potential number of shares of our common stock that our NEOs may earn under the PSU program to 2x the target amount and 1x if absolute TSR is negative over the three-year performance period regardless of the level of relative TSR.
We have a cash incentive compensation repayment (“clawback”) policy.
We require executive officers, including NEOs, to repay to us the amount of any earned annual cash incentive that was paid to the extent that:
The amount of such payment was based on the achievement of certain financial results that were subsequently the subject of a restatement that occurred within 12 months of such payment;
The executive officer had engaged in theft, dishonesty or intentional falsification of documents or records that resulted in the obligation to restate our financial results; and
A lower annual cash incentive would have been paid to the executive officer based upon the restated financial results.
The Compensation Committee is responsible for the interpretation and enforcement of this clawback policy. We plan to amend this policy as needed to comply with the additional requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) after the SEC adopts new regulations implementing those requirements.
We have robust stock ownership guidelines.
Our stock ownership guidelines for our executive officers, including our NEOs, help ensure that they maintain an equity stake in the Company, and by doing so, provide another link of their interests with those of other stockholders. Only shares actually owned and deferred stock units under the QNQDC Plan count toward the stock ownership requirement. Outstanding unexercised stock options and unvested PSUs and RSUs do not count toward the requirement. NEOs have five years from the applicable date (i.e., date of hire, appointment as an executive officer or appointment to an executive officer position with a different ownership guideline) to meet the applicable ownership guideline amount.
Dr. Jacobs has met his ownership guidelines.
Messrs. Mollenkopf and Aberle had met their applicable ownership guidelines prior to their promotions to CEO and President, respectively. They will be required to meet their respective new ownership guidelines by March 2019, the fifth anniversary of commencing their roles as CEO and as President, respectively. Dr. Renduchintala and Mr. Amon will be required to meet their ownership guidelines by October 2017. Mr. Davis will be required to meet his ownership guidelines by March 2018.

56


If an NEO has not met the applicable guideline by the deadline, we require that the NEO retain at least 50% of the net shares remaining after required tax withholdings upon payment of any full-value award or upon stock option exercise until they meet the minimum guideline. The guidelines are as follows:
Figure 19: Stock Ownership Guidelines for Executive Officers
Role
 
Multiple of Base Salary
 
CEO
6x
President
3x
All other executive officers
2x
The stock ownership guideline for Dr. Jacobs is 6x his base salary when he stepped down as CEO. The net after-tax shares from Dr. Jacobs’s fiscal 2014 RSU award must be held until at least one year following retirement or earlier separation of service from Qualcomm.
Our insider trading policy includes a prohibition on pledging of our common stock.
Our insider trading policy as applicable to executive officers and non-employee directors prohibits the pledging of our common stock and trading in put and call options or other types of derivative transactions.
Our compensation arrangements for the NEOs do not include severance agreements or employment contracts, and our equity acceleration in the event of a change in control is “double-trigger.”
We employ almost all U.S.-based employees, including all of our NEOs, “at will” without severance agreements or employment contracts. This is consistent with our objective of providing compensation related to individual contributions that improve our market leadership, competitive advantage and stockholder value. It enables us to terminate employment with discretion as to the terms and conditions of any separation. Our CEO and other NEOs do not have guaranteed arrangements for cash compensation or severance upon a change in control or excise tax gross-ups for change-in-control payments. In the event of a change in control in which the acquirer assumed outstanding unvested equity awards, the vesting of an NEO’s awards would accelerate only if the NEO was involuntarily terminated or the NEO voluntarily resigned for “good reason” during a specified period after the change in control.
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 includes an assessment by the Compensation Committee’s independent compensation consultant, FWC.
We do not provide tax gross-ups for non-business related benefits.
There are no tax gross-up payments on executive perquisites, such as financial planning reimbursements, except for benefits provided in a policy applicable to all eligible employees, such as relocation.
COMPENSATION RISK MANAGEMENT
The Compensation Committee engaged FWC to collaborate with Qualcomm’s human resources staff to conduct an assessment of 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 and unnecessary risk taking that would be reasonably likely to have a material adverse effect on Qualcomm. The assessment included executive, non-executive and sales incentive programs and focused on the variable components of cash incentives and equity awards. Our compensation programs are designed and administered through a corporate total rewards management office 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:

57


The alignment of pay philosophy, peer group companies and compensation amounts 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.

58


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 2014.
SUMMARY COMPENSATION TABLE
 
 
 
 
 
The following table shows information regarding compensation of each named executive officer for fiscal 2014, 2013 and 2012, except in the cases of Mr. Davis, who joined the Company in fiscal 2013 and thus was not a named executive officer in fiscal 2012, and Mr. Amon and Dr. Renduchintala, who were not named executive officers in fiscal 2013 or 2012.
Fiscal 2014 Summary Compensation Table (1)(2)
Name and Principal Position
Year
Salary
($) (3)
Bonus
($) (4)
Stock
Awards
($) (5)
Non-Equity Incentive Plan Compensation
($) (6)
All Other Compensation
($) (7)
Total
($)
Steven M. Mollenkopf
Chief Executive Officer (8)
2014
1,069,239


58,000,203

1,550,000

121,150

60,740,592

2013
815,006

1,500

12,000,079

1,325,000

166,481

14,308,066

2012
805,582


11,999,974

1,300,000

143,960

14,249,516

Paul E. Jacobs
Executive Chairman (9)
2014
969,984

21,375

54,000,175

1,300,000

650,458

56,941,992

2013
1,200,014

8,325

15,000,069

3,480,000

760,532

20,448,940

2012
1,189,246

2,775

14,999,985

3,400,000

1,138,867

20,730,873

George S. Davis
Executive Vice President and Chief Financial Officer
2014
724,043


9,600,019

665,000

167,555

11,156,617

2013
363,463

1,000,000

11,500,110

590,000

192,023

13,645,596

2012






Derek K. Aberle
President
2014
772,734


30,380,219

720,000

230,706

32,103,659

2013
728,321


8,000,053

1,045,000

284,061

10,057,435

2012
720,548


9,000,026

1,100,000