DEF 14A of Micron Technology Inc, Nov 29, 2023

DEF 14A of Micron Technology Inc

Filed Nov 29, 2023 · FY20230000723125-23-000065

Open on EDGAR

  1. Nominees For Election

    Nominees For Election

  2. Nominees For Election

    | Richard M. Beyer Independent | Professional Experience | | | | - | Chairman and Chief Executive Officer of Freescale Semiconductor, Inc. from 2008 through June 2012; director from 2008 to 2013. | | | - | Prior to Freescale, Mr. Beyer was President, Chief Executive Officer and a director of Intersil Corporation from 2002 to 2008. | | | - | Mr. Beyer previously served in executive management roles at FVC.com, VLSI Technology, and National Semiconductor Corporation, and served three years as an officer in the United States Marine Corps. | | | - | Within the past five years, Mr. Beyer served on the Board of Directors of Dialog Semiconductor. | | | Other Current Public Company Directorships | | | | - | None | | | Board Skills, Qualifications, and Expertise | | | | Mr. Beyer’s experience as the chief executive officer and a director at leading technology companies provides our Board expertise in the technology industry and also in corporate strategy, financial management, operations, marketing, and research and development, all of which are critical to achieving our strategic objectives. We believe these experiences, qualifications, attributes, and skills qualify Mr. Beyer to serve as a member of our Board. | | | Age 75 | Director Since 2013 | Committees Compensation (Chair), Governance and Sustainability, Security | | |

  3. Nominees For Election

    | Lynn A. Dugle Independent | Professional Experience | | | | - | Chairman, Chief Executive Officer, and President of Engility Holdings Inc., an NYSE-listed engineering services firm, from March 2016 to January 2019. | | | - | Prior to Engility, Ms. Dugle was Corporate Vice President, President of Intelligence and Information Systems of Raytheon Company from January 2009 to March 2015. | | | - | Within the past five years, Ms. Dugle served on the Board of Directors of State Street Corporation. | | | Other Current Public Company Directorships | | | | - | EOG Resources, Inc. | | | - | KBR, Inc. | | | - | TE Connectivity Ltd. | | | Board Skills, Qualifications, and Expertise | | | | Ms. Dugle’s experience as chairman and chief executive officer of a public engineering services firm and senior officer of a leading public technology company provides our Board expertise in information, technology, cybersecurity, corporate strategy, operations, and research and development, all of which are critical to achieving our strategic objectives. We believe these experiences, qualifications, attributes, and skills qualify Ms. Dugle to serve as a member of our Board. | | | Age 64 | Director Since 2020 | Committees Audit, Security (Chair) | | |

  4. Nominees For Election

    | Steven J. Gomo Independent | Professional Experience | | | | - | Executive Vice President, Finance and Chief Financial Officer from October 2004 until his retirement in December 2011, and Senior Vice President, Finance and Chief Financial Officer from August 2002 to September 2004 at NetApp, Inc., a storage and data management company. | | | Other Current Public Company Directorships | | | | - | Nutanix, Inc. | | | - | Enphase Energy, Inc. | | | Board Skills, Qualifications, and Expertise | | | | Mr. Gomo’s experience as the chief financial officer of a public technology company provides our Board expertise in the technology industry, particularly in the areas of finance, accounting, treasury, investor relations, and securities, which contribute valuable insights and perspectives to our business and operations. We believe these experiences, qualifications, attributes, and skills qualify Mr. Gomo to serve as a member of our Board. | | | Age 71 | Director Since 2018 | Committees Audit, Finance (Chair) | | |

  5. Nominees For Election

    | Linnie M. Haynesworth Independent | Professional Experience | | | | - | Sector Vice President, Cyber and Intelligence Mission Solutions Division from January 2016 to 2019, and Sector Vice President and General Manager from December 2013 to 2019 at Northrop Grumman, a defense and space company. | | | Other Current Public Company Directorships | | | | - | Truist Financial Corporation | | | - | Automatic Data Processing, Inc. | | | - | Eastman Chemical Company | | | Board Skills, Qualifications, and Expertise | | | | Ms. Haynesworth’s experience as the sector vice president and general manager of a public defense and space company provides our Board expertise in technology integration, cybersecurity (including a Certificate in Cybersecurity Oversight), enterprise strategy, risk management, and large complex system development, delivery, and deployment, and contributes valuable insights and perspectives to our business and operations. Additionally, Ms. Haynesworth became a Member of the Defense Business Board of the United States Department of Defense in November 2021. We believe these experiences, qualifications, attributes, and skills qualify Ms. Haynesworth to serve as a member of our Board. | | | Age 66 | Director Since 2021 | Committees Governance and Sustainability, Security | | |

  6. Nominees For Election

    | Mary Pat McCarthy Independent | Professional Experience | | | | - | Vice Chair of KPMG LLP, the U.S. member firm of the global audit, tax, and advisory services firm, from July 1998 until her retirement in December 2011. Ms. McCarthy joined KMPG in 1977, became a partner in 1987, and held numerous senior leadership positions with the firm during her tenure. | | | Other Current Public Company Directorships | | | | - | Palo Alto Networks, Inc. | | | Board Skills, Qualifications, and Expertise | | | | Ms. McCarthy’s experience advising numerous companies on financial and accounting matters as a Certified Public Accountant (ret.) provides our Board deep technical expertise in financial and accounting matters, and contributes valuable insights and perspectives to our business and operations. We believe these experiences, qualifications, attributes, and skills qualify Ms. McCarthy to serve as a member of our Board. | | | Age 68 | Director Since 2018 | Committees Audit (Chair), Finance | | |

  7. Nominees For Election

    | Sanjay Mehrotra Chief Executive Officer | Professional Experience | | | | - | Mr. Mehrotra has served as Micron’s President, Chief Executive Officer, and Director since May 2017. | | | - | Prior to that, Mr. Mehrotra co-founded and led SanDisk Corporation as a start-up in 1988 until its eventual sale in May 2016, serving as its President and Chief Executive Officer from January 2011 to May 2016 and as a member of its Board of Directors from July 2010 to May 2016. | | | Other Current Public Company Directorships | | | | - | CDW Corporation | | | Board Skills, Qualifications, and Expertise | | | | Mr. Mehrotra has 42 years of experience in the semiconductor memory industry, and as a co-founder of SanDisk, he offers a unique perspective on the industry and has significant senior leadership and technological expertise. In addition, Mr. Mehrotra’s experience provides our Board expertise in finance, corporate development, corporate governance, and business strategy, all of which are critical to achieving our strategic objectives. We believe these experiences, qualifications, attributes, and skills qualify Mr. Mehrotra to serve as a member of our Board. | | | Age 65 | Director Since 2017 | Committee Finance | | |

  8. Nominees For Election

    | Robert E. Switz Independent, Chair of the Board | Professional Experience | | | | - | President and Chief Executive Officer of ADC Telecommunications, Inc., a supplier of network infrastructure products and services, from August 2003 until December 2010 and Chairman from 2008 until December 2010, when Tyco Electronics Ltd. acquired ADC. Mr. Switz joined ADC in 1994 and throughout his career there held numerous leadership positions. | | | - | Within the past five years, Mr. Switz served on the Board of Directors of Gigamon, Inc., and Mandiant, Inc. | | | Other Current Public Company Directorships | | | | - | Marvell Technology Group Ltd. | | | Board Skills, Qualifications, and Expertise | | | | Appointed Chair of Micron’s Board of Directors in 2012, Mr. Switz’s experience as Chief Executive Officer and Chairman of a leading technology company and history and leadership on Micron’s Board provide the Board expertise in the technology industry as well as international business operations, finance, corporate development, corporate governance, and management, all of which are critical to achieving our strategic objectives. We believe these experiences, qualifications, attributes, and skills qualify Mr. Switz to serve as a member of our Board. | | | Age 77 | Director Since 2006 | Committees Compensation, Governance and Sustainability | | |

  9. Nominees For Election

    | MaryAnn Wright Independent | Professional Experience | | | | - | Group Vice President of Engineering and Product Development of Johnson Controls International (“JCI”) from 2013 to 2017. Ms. Wright also served as Vice President and General Manager for Johnson Controls’ Hybrid Systems business and as CEO of Johnson Controls-Saft from 2007 to 2009. | | | - | Prior to joining JCI, Ms. Wright served in the Office of the Chair and was EVP Engineering, Sales and Program Management at Collins & Aikman from 2006 to 2007. | | | - | Prior to that, Ms. Wright held several executive positions at Ford Motor Company, including Chief Engineer, from 2003 to 2005, and Director of Sustainable Mobility Technologies and Hybrid and Fuel Cell Vehicle Programs from 2004 to 2005. | | | - | Within the past five years, Ms. Wright served on the Board of Directors of Maxim Integrated Products, Inc. and Delphi Technologies. | | | Other Current Public Company Directorships | | | | - | Group 1 Automotive, Inc. | | | - | Brunswick Corporation | | | - | Solid Power, Inc. | | | Board Skills, Qualifications, and Expertise | | | | Ms. Wright’s extensive experience in, and knowledge of, the automotive industry (OEM and Tier 1 supplier), public board experience and her expertise in vehicle, advance powertrain, and energy storage system technologies, provide our Board expertise in the technology industry as well as business operations, finance, corporate development, corporate governance, and management, all of which are critical to achieving our strategic objectives. We believe these experiences, qualifications, attributes, and skills qualify Ms. Wright to serve as a member of our Board. | | | Age 61 | Director Since 2019 | Committees Compensation, Governance and Sustainability (Chair) | | |

  10. Nominees For Election

    There are no family relationships between any of our directors or executive officers. The Board recommends voting “FOR” approval of the nominees listed above.

  11. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The Governance and Sustainability Committee oversees the setting of compensation for our non-employee members of the Board and recommends changes, if any, to the full Board for consideration. Each year, the Governance and Sustainability Committee works with the compensation consultant to review and evaluate director compensation for the ensuing fiscal year, in light of prevailing market conditions and to attract, retain, and reward qualified non-employee directors. The compensation consultant gathers and reviews market data for non-employee directors from the same Compensation Peer Group used to evaluate officer compensation. For a discussion concerning the companies that comprised our Compensation Peer Group, please see “Executive Compensation and Related Information – Compensation Discussion and Analysis” below. Upon completion of its review and evaluation, the Governance and Sustainability Committee did not recommend to the Board any changes to the amount of director compensation for fiscal 2024.

  12. Elements of Director Compensation

    Elements of Director Compensation

  13. Fiscal 2023 Director Compensation

    Fiscal 2023 Director Compensation The following table details the total compensation earned by our non-employee directors in fiscal 2023.

  14. Fiscal 2023 Director Compensation

    | Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Total | | Richard M. Beyer | $136,917 | $249,982 | $386,899 | | Lynn A. Dugle | 128,083 | 249,982 | 378,065 | | Steven J. Gomo | 133,083 | 249,982 | 383,065 | | Linnie M. Haynesworth | 110,417 | 249,982 | 360,399 | | Mary Pat McCarthy | 136,333 | 249,982 | 386,315 | | Robert E. Switz | 242,917 | 249,982 | 492,899 | | MaryAnn Wright | 128,083 | 249,982 | 378,065 |

  15. Fiscal 2023 Director Compensation

    (1)The amounts shown are lower than they otherwise would have been based on our standard Board compensation policy because, as part of the Company's fiscal 2023 cost cutting program, the directors voluntarily reduced their fiscal 2023 cash compensation by 20% for the period from February 1, 2023 through the end of fiscal 2023. (2)On October 13, 2022, each of Messrs. Beyer, Gomo, and Switz, and Mses. Dugle, Haynesworth, McCarthy, and Wright was granted 4,739 shares of restricted stock with a grant date fair value of $249,982 ($52.75 per share). For information on the restrictions associated with these awards, see “Elements of Director Compensation – Equity Award” above. As of August 31, 2023, each of Messrs. Beyer, Gomo, and Switz, and Mses. Dugle, Haynesworth, McCarthy, and Wright had outstanding a grant of 4,739 shares of restricted stock. For information regarding Mr. Mehrotra’s holding of stock as of August 31, 2023, see “Outstanding Equity Awards at Fiscal 2023 Year-End” below.

  16. Fiscal 2024 Compensation Program Changes

    Fiscal 2024 Compensation Program Changes After carefully considering the feedback we received from shareholders, we have made several changes to our long-term incentive plan for fiscal 2024. As shown in the infographic below, the changes aim to enhance the pay-for-performance approach of our program and increase the alignment of our executives' incentives with shareholders’ interests. We have also enhanced our disclosures throughout this Compensation Discussion & Analysis to provide greater visibility regarding our short- and long-term incentive programs, and intend to make further enhancements for fiscal 2024 to provide additional details regarding our EIP goals and related results. The pay mix for our CEO and other Named Executive Officers (on average) for fiscal 2024 closely mirrors that of 2023.

  17. Short-Term Incentives

    Short-Term Incentives Typically, we use the EIP to attract, retain, and reward qualified executives who are important to our success by offering the opportunity to earn cash awards for achieving performance goals set by the Compensation Committee. The Compensation Committee administers the EIP and has the authority to make all decisions and determinations required by the EIP, or as the Compensation Committee deems necessary or advisable to administer the EIP. Due to the challenging nature of the goals set by the Compensation Committee, achievement of EIP goals has historically required significant leadership, effort, and coordination among our leadership team. Due to the challenging business environment the Company faced in 2023, and as part of a significant program to reduce Company costs and operating expenses, the Compensation Committee suspended the participation of our Named Executive Officers in the EIP for fiscal 2023. Accordingly, no Named Executive Officer received any short-term incentive award for fiscal 2023. Notwithstanding the suspension of Named Executive Officers’ participation in the EIP during fiscal 2023, in an effort to respond to shareholders’ requests for enhanced disclosure regarding our EIP structure, in this section we discuss both the EIP structure for fiscal 2024 – for which performance will be measured over, and achievement results will be determinable upon completion of, fiscal 2024 – as well as the EIP as it was initially established for fiscal 2023.

  18. Fiscal 2024 Short-Term Incentive Awards

    Fiscal 2024 Short-Term Incentive Awards In October 2023, the Compensation Committee established fiscal 2024 performance goals and a short-term incentive compensation opportunity (the “Target Awards”) under the EIP for each Named Executive Officer. These Target Awards were made taking into consideration the Market Data median, among other factors, as part of the Compensation Committee’s efforts to make such opportunities reasonable as described above. The Compensation Committee selected Company Performance goals outlined below based on their correlation to the creation of shareholder value and their alignment with our financial and strategic objectives. The EIP awards will be determined following the end of the fiscal 2024 performance period as follows: In response to the feedback we have received from shareholders, we are committed to providing full details regarding fiscal 2024 EIP profitability goals, including the threshold - maximum pay opportunities, and detail regarding our actual performance against the profitability and strategic goals, in next year’s proxy statement. See footnote 7 of “Pay Versus Performance” for a description of non-GAAP net income.

  19. Fiscal 2023 Short-Term Incentive Awards

    Fiscal 2023 Short-Term Incentive Awards Fiscal 2023 EIP – Establishment and Suspension. In October 2022, the Compensation Committee initially set fiscal 2023 performance goals and Target Awards under the EIP for each Named Executive Officer as follows:

  20. Fiscal 2023 Short-Term Incentive Awards

    | Named Executive Officer | Target Award (% of Base Salary) | % Change from Fiscal 2022 | | Sanjay Mehrotra | 215% | 0% | | Mark Murphy | 110% | 0% | | Manish Bhatia | 110% | 0% | | Scott DeBoer | 100% | 0% | | Sumit Sadana | 120% | 0% |

  21. Fiscal 2023 Short-Term Incentive Awards

    Subsequently, in light of the challenging industry environment and as part of a significant program to reduce Company costs and operating expenses, in February 2023, the Compensation Committee suspended the Named Executive Officers’ fiscal 2023 EIP participation. Accordingly, no Named Executive Officer received or was eligible to receive any short-term incentive cash award for fiscal 2023. The remainder of this discussion provides information regarding the fiscal 2023 short-term incentive profitability and strategic goals that would have provided bonus payout opportunities under a structure similar to the fiscal 2024 EIP illustrated above had the fiscal 2023 EIP not been suspended. In light of the EIP suspension, we have not included details regarding the EIP profitability goals for fiscal 2023, but as noted above we commit to providing the fiscal 2024 profitability threshold, target and maximum goals, together with the actual performance ultimately achieved against those goals, in next year’s proxy statement. Our strategic goals involve highly confidential, competitively sensitive information, including forward-looking targets and product-specific strategies that if disclosed could cause irreparable competitive harm to us by providing competitors with insight into our internal processes, know-how, products and business initiatives, particularly as many of our goals build on multi-year achievements in order to execute on our overall business strategies. Revealing such information would allow competitors to leverage it to their competitive advantage, to our detriment and the detriment of our shareholders. However, we understand shareholders' desire for additional detail regarding our strategic goals, and have strived to provide greater visibility into the strategic goal components where possible, while balancing these competitive concerns. Profitability and Strategic Performance Goals. Prior to suspending the EIP, the Compensation Committee established a profitability goal (50% weighting) measured based on the performance of adjusted non-GAAP net income and non-GAAP operating margin and five strategic goal categories (each category with a 10% weighting and together accounting for 50% weighting) for evaluating performance in fiscal 2023. See footnote 7 of “Pay Versus Performance” for a description of non-GAAP net income. The Compensation Committee chose the profitability and strategic goals based on the following criteria: The fiscal 2023 profitability goal would have functioned as a gate with respect to any payout based on achievement of the strategic goals discussed below. Specifically, because actual achievement of the profitability goal was below the threshold performance of 50% of target, no payout could have been earned for the EIP had it not been suspended, regardless of the calculated strategic goal achievement. If the profitability goal achievement had resulted in achievement at or above threshold but below target performance, then the overall strategic goals outcome would have been adjusted to the lesser of the profitability goal results and the pre-adjusted strategic goal results. The profitability goal would have required the Company to achieve pre-established fiscal 2023 adjusted non-GAAP net income or non-GAAP operating margin goals. The Compensation Committee intended these goals to be highly rigorous, as even the minimum threshold targets required performance meaningfully above our fiscal year 2023 business plan. Consistent with such approach, based on the Company’s fiscal 2023 adjusted non-GAAP net income and non-GAAP operating margin, the Company would not have achieved the minimum (50% of target) threshold goals. Accordingly, the payout for the profitability goal would have been zero had the Named Executive Officers’ participation in the EIP not been suspended. The following five strategic goal categories would have accounted for 50% of the overall EIP achievement weighting. Within each goal category, each strategic goal or group of related strategic goals would have provided an opportunity to achieve performance between the minimum threshold of 50% of target and a maximum of 200% of target. Achievement of each of the strategic goals included in the five strategic goal categories would have required significant effort and adept execution, and there was no assurance of achievement with respect to any of the metrics or milestones. The Compensation Committee believed that achieving maximum performance for any strategic goal categories would have been challenging and required extraordinary leadership, effort, and coordination as a team. In the past three fiscal years, none of the current strategic goal categories achieved (or would have achieved, for fiscal 2023) maximum performance. Had the Named Executive Officers’ participation in the EIP for fiscal 2023 not been suspended, the formulaic results of the EIP goals would have been as follows:

  22. Fiscal 2023 Short-Term Incentive Awards

    | Metric | Performance Level Achieved (% of Targeted Goal) | | Profitability (Adjusted non-GAAP Net Income and non-GAAP Operating Margin) | 0% | | Technology and Products | 138% | | Cost | 140% | | Customer | 156% | | Business | 132% | | Environmental, Social and Governance | 160% | | Total Achievement | 0% |

  23. Fiscal 2023 Short-Term Incentive Awards

    Notwithstanding that the strategic goals were achieved, because the fiscal 2023 EIP design required achieving threshold performance under the profitability goals in order for Named Executive Officers to earn any award, no payouts would have been earned under the EIP had it not been suspended.

  24. Long-Term Equity Incentives

    Long-Term Equity Incentives We believe long-term incentive compensation should be tied to our success and help promote increases in long-term shareholder value. Accordingly, performance-based restricted stock unit awards are a significant component of our executive compensation program. We believe these awards are especially aligned with shareholders’ long-term interests because they vest based on achievement of key financial and operational goals and provide an incentive to increase stockholder value because these awards become more valuable to the grantee if our stock price increases. These awards are also intended to help retain key executives and employees as their efforts greatly affect our success as a company. In fiscal 2023, consistent with the pay-for-performance philosophy underlying our compensation program, the Compensation Committee set the long-term incentive mix at 50% performance-based restricted stock units (“PRSUs”) and 50% time-based restricted stock awards (“RSAs”) for all Named Executive Officers. The Compensation Committee believes that making PRSUs a significant portion of the long-term incentive mix furthers Micron’s pay-for-performance philosophy. For fiscal 2024, the Compensation Committee increased the performance-based weighting of the CEO’s long-term incentive mix to award 65% of the value in PRSUs and 35% in RSAs. In determining the amount of the long-term equity incentive awards for our Named Executive Officers, the Compensation Committee took into account various data points including (but not limited to) Market Data and information provided by Mr. Mehrotra related to the other officers’ performance and his recommendation as to the amount of their awards. Although the Market Data and Mr. Mehrotra’s recommendations informed the Compensation Committee’s decision, they were not dispositive. The Compensation Committee also considers the other factors described under the section entitled “Reasonable” above when determining long-term equity incentive awards for our Named Executive Officers. The following table shows the intended target value of our Named Executive Officers’ fiscal 2023 long-term equity incentive awards:

  25. Long-Term Equity Incentives

    | Named Executive Officer | Fiscal 2023 Long-Term Equity Incentives(1) | | Sanjay Mehrotra | $23,750,000 | | Mark Murphy | 7,750,000 | | Manish Bhatia | 8,250,000 | | Scott DeBoer | 6,500,000 | | Sumit Sadana | 8,500,000 |

  26. Long-Term Equity Incentives

    (1) Reflects target grant-date fair value. Based on a review of Market Data, taking into consideration the Market Data median, the Compensation Committee determined that it was appropriate to increase the target award amounts by $250,000 for each Named Executive Officer and $750,000 for Mr. Murphy. We have not, and do not plan to time the grant of long-term incentive awards (or the award or payment of any other compensation) with the release of material, non-public information. Historically, long-term incentive awards have been made in the first quarter of the fiscal year with the exact grant date corresponding with the date of the approval of the Compensation Committee. The Compensation Committee generally approves long-term incentive awards granted to the Named Executive Officers on the same day as the grants to other executive officers. For purposes of our equity plans, fair market value is defined as the closing price of our Common Stock as quoted on Nasdaq for the last market-trading day prior to the date of grant.

  27. Performance-based RSUs Granted in Fiscal 2023

    Performance-based RSUs Granted in Fiscal 2023 For fiscal 2023, the Compensation Committee awarded three types of PRSUs:

  28. Performance-based RSUs Granted in Fiscal 2023

    | Metric Category | Name | Performance Metric | Percentage of 2023 PRSU Award Value | | Operational | 2023 DRAM PRSU Awards | DRAM revenue or percentage of DRAM revenue from high-growth, stable segments (automotive, industrial multi-market, networking, data center, and graphics applications) | 25% | | Operational | 2023 NAND PRSU Awards | NAND bits shipped or percentage of NAND bits shipped into the data center segment, to drive increased NAND profitability and return on investment (ROI) | 25% | | Financial | 2023 rTSR PRSU Award | Relative TSR growth of the Company’s stock price versus the median of the PHLX Semiconductor Sector Index. | 50% |

  29. Performance-based RSUs Granted in Fiscal 2023

    We refer to the 2023 NAND PRSU Awards and the 2023 DRAM PRSU Awards collectively as the “2023 Operational PRSU Awards,” and, together with the 2023 rTSR PRSU Award, as the “2023 PRSU Awards.” PRSU awards are eligible to be earned (or “banked”) during the second and third years of the three-year period covering fiscal 2023, 2024, and 2025 (the “Performance Period”) based upon results against performance metrics set at the beginning of the Performance Period. The actual number of PRSUs that will be banked and become eligible to vest under the 2023 PRSU Awards is determined by the product of each Named Executive Officer’s target number of PRSUs and the payout factor that results from actual performance versus pre-established performance metrics (the “Payout Factor”) and is subject to the caps discussed below.

  30. 2023 Operational PRSU Awards

    2023 Operational PRSU Awards The 2023 Operational PRSU Awards tie 50% of each Named Executive Officer target performance-based long-term incentive compensation opportunity to the 2023 DRAM PRSU Awards and 2023 NAND PRSU Awards, as noted above. The 2023 Operational PRSU Awards also have two additional earnings opportunities for stretch components based on product development milestones and targeted product revenue. Performance for the 2023 DRAM PRSU Awards requires DRAM revenue from high-growth, stable segments (automotive, industrial multi-market, networking, data center, and graphics applications) to exceed a specified absolute threshold or percentage of the total Company DRAM revenue for fiscal year 2024 and fiscal 2025, respectively. Achievement below the threshold will result in no payout. As DRAM revenue from the defined high-growth, stable segments or percentage of total Company DRAM revenue achievement increases above the threshold, payout also increases up to a maximum of 200% of the target number of PRSUs. Performance for the 2023 NAND PRSU Awards is measured by exceeding a threshold for fiscal year shipments of NAND products, including components and SSDs, into the data center segment (“Data Center NAND”) measured as an absolute number of exabytes shipped or as a percentage of total Company NAND shipments for fiscal 2024 and fiscal 2025, respectively. Achievement below the threshold will result in no payout. As Data Center NAND shipments or percentage of the total Company NAND shipments increase above the threshold, payout also increases up to a maximum of 200% of the target number of PRSUs. For the 2023 Operational PRSU Awards, the maximum payout for achieving these targets is 200% of the target number of PRSUs under each award, subject to any increases for achieving the additional earning opportunities described below, but capped by the 200% Limit described above. 2023 Operational PRSU Awards do not bank unless performance meets or exceeds the established thresholds. When performance results in achievement above the threshold and between performance levels, the applicable Payout Factor will be determined based on interpolation between performance levels. In addition, the 2023 Operational PRSU Awards also include two additional earning opportunities tied to stretch components that relate to the development of high bandwidth memory products and associated revenue and Compute Express Link-related products that the Compensation Committee believes would represent significant progress that will enhance long-term shareholder value. Achievement of these additional 2023 Operational PRSU performance conditions increases the number of operational 2023 PRSU Awards earned and requires a significant level of execution and effort. Achievement is subject to the 200% Limit noted above. Operational PRSU Goals Require Strong Performance. In setting the targets for the 2023 Operational PRSU Awards, the Compensation Committee believed that achievement of these goals at target would require a stretch performance and challenging level of execution and effort on the part of our Named Executive Officers. The established target for DRAM revenue from high-growth, stable segments as a percentage of total Company DRAM revenue set by the Compensation Committee requires performance that is superior to prior fiscal years, including fiscal 2022. The Data Center NAND shipment threshold set by the Compensation Committee for number of exabytes shipped into the data center segment is higher than actual shipments achieved in any prior fiscal year. When the Compensation Committee set the 2023 Operational PRSU Award goals, it believed that achievement of even the threshold level of performance was uncertain. Determination of Payout. Achievement levels with respect to the Payout Factor applicable to the 2023 Operational PRSU Awards will be measured at the end of the second and third fiscal years of the Performance Period. No later than 60 days after the end of the second and third fiscal years in the Performance Period (each, a “Certification Date”), the Compensation Committee determines and certifies the resulting Payout Factors for the applicable fiscal year as set forth above. PRSUs that have achieved the requisite performance will become banked.

  31. 2023 rTSR PRSU Award

    2023 rTSR PRSU Award The 2023 rTSR PRSU Award ties 50% of each Named Executive Officer’s target performance-based long-term incentive compensation opportunity to the Company’s share price growth as compared to the TSR of the companies in the SOX index, which is composed of companies primarily involved in the design, distribution, manufacture, and sale of semiconductors, over the three-year Performance Period. The TSR component is measured in year two and year three of the Performance Period. For fiscal 2023, the Compensation Committee set the target goal at the median of the SOX index calculated based on the difference between the Company’s and the median SOX index company’s 60-day average three-year TSR compounded annual growth rate performance. After taking shareholders’ feedback into consideration, the Compensation Committee has increased the fiscal 2024 target to the 55th percentile of the SOX index. Payout Factor. The Payout Factor for the 2023 rTSR PRSU Award is based on the average of the Company’s three-year rTSR for each of the 60 days trailing the applicable measurement date (inclusive of the measurement date), expressed as a compounded annual growth rate (the “TSR CAGR”), relative to the TSR CAGR (“rTSR CAGR”) of the median company in the SOX index (the “Median SOX Company”). The rTSR CAGRs of the Company versus the Median SOX Company will be measured on each day starting on the first day of fiscal 2024 through the last day of the Performance Period (each, a “measurement date”). The following table sets forth the levels of rTSR CAGR required to be achieved under the 2023 rTSR PRSU Award to result in the Payout Factors specified below:

  32. 2023 rTSR PRSU Award

    | rTSR CAGR Achieved on a Measurement Date | Payout Factor for the rTSR CAGR | | Less than -50 percentage points (“pp”) | 0% | | -50pp (“rTSR Threshold”) | 50% | | 0pp (“rTSR Target”) | 100% | | +25pp (“rTSR Maximum”) | 150% | | Greater than +25pp | 150% |

  33. 2023 rTSR PRSU Award

    If the rTSR CAGR achieved is between the rTSR Threshold and rTSR Target levels or the rTSR Target and rTSR Maximum levels, the Payout Factor will be determined using interpolation between the applicable levels. For fiscal 2024, the Compensation Committee increased the rTSR Maximum to +50pp so that our payout slope is symmetrical for increases (and decreases) above (and below) the rTSR Target, significantly increasing the level of outperformance required to achieve the rTSR Maximum. Cap on rTSR PRSUs. The maximum number of rTSR PRSUs that may be earned and vested is equal to 150% of the target number of 2023 rTSR PRSUs granted and is further limited by the total 200% Limit discussed under “Overall Combined Cap on PRSU Earning and Vesting” above. In addition, beginning in fiscal 2024, to further the alignment of the rTSR PRSU Award with shareholders’ experience, payouts will be capped at the rTSR Target in the event that the Company’s absolute TSR is negative, notwithstanding the level of relative performance achieved. Determination of Payout. As of any measurement date, the number of PRSUs under a 2023 rTSR PRSU Award that are considered banked through such date will equal the product of the Payout Factor determined based on the greatest rTSR CAGR achieved during the Performance Period through such date, and the target number of PRSUs subject to the 2023 rTSR PRSU Award. Accordingly, once PRSUs under a 2023 rTSR PRSU Award become banked on a measurement date (due to achievement of a particular rTSR CAGR level), additional PRSUs can become banked only if a greater rTSR CAGR level is achieved on a later measurement date. Such additional PRSUs banked, if any, will be equal to the excess of the Payout Factor determined using the new, greater rTSR CAGR achieved, over the Payout Factor determined using the next greatest rTSR CAGR previously achieved, multiplied by the target PRSUs subject to the 2023 rTSR PRSU Award. Following completion of each of fiscal 2024 and 2025, the Compensation Committee will certify the extent of achievement of the Payout Factors as set forth above during fiscal 2024 and 2025, respectively.

  34. PRSU Vesting

    PRSU Vesting PRSUs will not vest under the 2023 PRSU Awards (if at all) until the Certification Date that immediately follows the end of fiscal 2024, when 50% of PRSUs that have been earned will vest. The remaining 50% of PRSUs earned upon the first Certification Date are banked and will vest upon the second Certification Date that immediately follows the end of fiscal 2025. Any incremental PRSUs that become earned during fiscal 2025 will also vest in full on the second Certification Date, as illustrated below. If a Named Executive Officer terminates employment with the Company for any reason other than a termination by the Company for cause, any banked shares will continue to vest on the vesting schedule described above. No further PRSUs under the 2023 PRSU Awards will vest following a Named Executive Officer’s termination for cause. For purposes of the 2023 PRSU Awards, “cause” is as defined in the agreement between a Named Executive Officer and the Company governing the terms of such Named Executive Officer’s employment or termination thereof, or if not so defined, as defined in the equity incentive plan under which the award was granted.

  35. Fiscal 2022 PRSUs Achievement

    We refer to the 2022 Market Segment NAND PRSU Awards and the 2022 High-Value NAND PRSU Awards collectively as the “2022 Operational PRSU Awards.” The 2022 rTSR PRSU Award is structured very similarly to the 2023 rTSR PRSU Award except that the applicable performance period is fiscal 2022, 2023 and 2024. Thus, the 2022 rTSR PRSU Award (as with the 2023 awards) provide for the earning and banking or vesting of shares based on the Company’s share price growth as compared to the median TSR of the companies in the SOX index over a three-year performance period. The rTSR goals and potential payout factors are the same as shown above in the table for the 2023 rTSR PRSU Award (with the exception of the applicable performance period). For the 2022 Market Segment NAND PRSU Awards, separate thresholds apply for each of fiscal year 2023 and 2024 for both absolute exabytes and percentage of total NAND bits shipped. For the 2022 High-Value NAND PRSU Awards, thresholds apply for the percentage of total NAND bits shipped. Achievement below the threshold will result in no payout. In addition to the Data Center NAND and High-Value NAND performance metrics, the 2022 Operational PRSU Awards also include two additional earning opportunities tied to performance conditions relating to the development of high bandwidth memory products and associated revenue, Compute Express Link-related products, and leading-edge DRAM products that the Compensation Committee believes represent significant progress that will enhance long-term shareholder value. Each of these two additional 2022 Operational PRSU performance conditions may increase the number of the 2022 PRSU Awards earned, although total 2022 PRSU Award payouts may not exceed the 200% Limit noted above. Achievement of the additional performance conditions requires a significant level of execution.

  36. PRSU Payout Formula

    PRSU Payout Formula For each of the PRSU Awards we granted for fiscal years 2021, 2022 and 2023, a Payout Factor (that varies based on actual performance versus the goals and that may be zero, resulting in no payout) is used to determine the number of shares that are earned and banked (but not necessarily vested). In October 2023, the Compensation Committee reviewed the Company’s performance relative to the 2022 PRSU Award metrics and applied the applicable 2022 Payout Factors. This review was the first measurement year provided under the 2022 PRSU Awards; the final measurement will be performed following fiscal year 2024. The Compensation Committee determined that the Company’s performance versus the goals as of the end of fiscal year 2023 was as follows:

  37. PRSU Payout Formula

    | Fiscal 2022 PRSU Award Payout Factors | | | | | | | | | | | Operational - 50% Weight | | | | | | Financial - 50% Weight | | | | High-Value NAND | | Market Segment NAND | | Additional Performance Conditions | | rTSR CAGR | | | Fiscal Year | Actual Result | Payout Factor | Actual Result | Payout Factor | Actual Result | Payout Factor | Actual Result | Payout Factor | | 2023 | below threshold | 0% | below threshold | 0% | Achieved high bandwidth memory revenue goal | 33% | -7ppts | 93% |

  38. PRSU Payout Formula

    Performance also will be measured after the end of fiscal 2024 and additional shares may be earned, although there is no guarantee any additional shares will be earned. Following the completion of fiscal year 2024, the Company intends to provide additional information regarding the goals, their achievement, and whether additional shares were earned. The Compensation Committee certified that the following shares had been earned and vested or banked by our Named Executive Officers under the 2022 PRSU Awards:

  39. PRSU Payout Formula

    | | FY22 High-Value NAND Shares | | | FY22 Market Segment NAND Shares | | | FY22 rTSR Shares | | | | Executive | Earned for FY23 | Vested | Banked | Earned for FY23 | Vested | Banked | Earned for FY23 | Vested | Banked | | Sanjay Mehrotra | 14,529 | 7,264 | 7,265 | 14,529 | 7,264 | 7,265 | 68,770 | 34,385 | 34,385 | | Mark Murphy | 7,430 | 3,715 | 3,715 | 7,430 | 3,715 | 3,715 | 34,765 | 17,382 | 17,383 | | Manish Bhatia | 4,946 | 2,473 | 2,473 | 4,946 | 2,473 | 2,473 | 23,411 | 11,705 | 11,706 | | Scott DeBoer | 3,864 | 1,932 | 1,932 | 3,864 | 1,932 | 1,932 | 18,289 | 9,144 | 9,145 | | Sumit Sadana | 5,100 | 2,550 | 2,550 | 5,100 | 2,550 | 2,550 | 24,143 | 12,071 | 12,072 |

  40. PRSU Payout Formula

    Fiscal 2021 PRSUs Achievement For fiscal 2021, the Compensation Committee awarded PRSUs under performance metrics that measure relative TSR growth (the “2021 rTSR PRSU Award”) and the percentage of bits shipped as part of certain high-value NAND products (the “2021 High-Value NAND PRSU Award” and, together with the 2021 rTSR PRSU Award, the “2021 PRSU Awards”), each representing 50% of the total target PRSU opportunity for each Named Executive Officer. The 2021 rTSR PRSU Award had the same design as the 2023 rTSR PRSU Award and the 2022 rTSR PRSU Award, except that the performance period for the 2021 rTSR PRSU Award was fiscal 2021, 2022 and 2023. Performance for the 2021 High-Value NAND PRSU Award required exceeding a threshold with respect to percentage of NAND bits shipped as High-Value NAND, then meeting certain incremental pre-established targets to achieve increased payouts, subject to a maximum payout of 200%. In addition, the 2021 High-Value NAND PRSU Award also included two additional earnings opportunities tied to performance conditions relating to achievement of targeted high bandwidth memory revenue and 3DXP solutions revenue that the Compensation Committee believed represented significant progress that would enhance long-term shareholder value. Each of the two additional performance conditions could have increased the number of 2021 NAND PRSU Awards earned, although the total 2021 PRSU Award payouts may not have exceeded the 200% Limit. The additional performance conditions were not achieved and therefore did not impact the 2021 High-Value NAND PRSU Award earned. In October 2022 and October 2023, the Compensation Committee reviewed the Company’s actual performance relative to the 2021 PRSU Award metrics and applied the applicable 2021 Payout Factors. Actual results and the Payout Factors as certified by the Compensation Committee were as follows:

  41. PRSU Payout Formula

    | Fiscal 2021 PRSU Award Payout Factors | | | | | | | Operational | | Financial | | | | High-Value NAND | | rTSR CAGR | | | Fiscal Year | Actual Result | Payout Factor | Actual Result | Payout Factor | | 2022 | above maximum | 200% | -8ppts | 92% | | 2023 | N/A | N/A | -7ppts | 93% | | Total Combined Payout | | 200% | | 93% |

  42. PRSU Payout Formula

    Based on these actual results and Payout Factors, the Compensation Committee certified that a number of incremental shares were earned and vested in fiscal 2023 under the 2021 PRSU Awards, as set forth in the table below. The table also indicates the number of shares previously earned and either vested or banked based on fiscal 2022 performance.

  43. PRSU Payout Formula

    | Executive(1) | FY21 NAND | | | | FY21 rTSR | | | | | | Shares Earned & Vested in FY22 | Shares Banked in FY22 & Vested in FY23 | Incremental Shares Earned & Vested for FY23 | Total Shares Earned & Vested | Shares Earned & Vested in FY22 | Shares Banked in FY22 & Vested in FY23 | Incremental Shares Earned & Vested for FY23 | Total Shares Earned & Vested | | Sanjay Mehrotra | 89,045 | 89,045 | — | 178,090 | 34,610 | 34,611 | 752 | 69,973 | | Manish Bhatia | 28,879 | 28,879 | — | 57,758 | 11,225 | 11,225 | 244 | 22,694 | | Scott DeBoer | 24,066 | 24,066 | — | 48,132 | 9,354 | 9,354 | 204 | 18,912 | | Sumit Sadana | 31,286 | 31,286 | — | 62,572 | 12,160 | 12,161 | 264 | 24,585 |

  44. PRSU Payout Formula

    (1) Mr. Murphy joined the Company in April 2022 and, as a result, did not receive any 2021 PRSU Awards

  45. Time-Based RSAs

    Time-Based RSAs Time-based restricted stock awards (“RSAs”) support retention and are linked to shareholder value and ownership. Annual RSAs granted in fiscal 2023 over three years from the date of grant, with one third vesting on the first anniversary date of grant and the remainder vesting ratably in eight quarterly installments, subject to continued employment. In fiscal 2023, RSAs comprised 50% of the target value of the long-term incentive awards granted.

  46. Engagement of Compensation Consultant

    Engagement of Compensation Consultant The Compensation Committee annually engages a compensation consultant to provide a comprehensive review of executive compensation matters and meets with the compensation consultant at least quarterly. This compensation consultant provided the Compensation Committee with information for our executive officers on cash and non-cash compensation elements and historical and trend payment data. The Compensation Committee has established procedures intended to keep its compensation consultant’s advice objective and free of influence from our management. These procedures include: a direct reporting relationship to the Compensation Committee; a provision in the Compensation Committee’s engagement letter with the compensation consultant specifying what information, data, and recommendations can be shared with management; and an annual update to the Compensation Committee on the compensation consultant’s relationship with the Company, including a summary of the work performed during the preceding 12 months. For fiscal 2023, the specific activities undertaken by the compensation consultant for the Compensation Committee included: •review the Compensation Peer Group (as defined in this Compensation Discussion and Analysis) and recommend any changes to its members; •evaluate target total direct compensation and its components (base salary, target short-term incentives, and target long-term incentives) of our executive officers using several data sources; •evaluate our historical “pay-for-performance” relationship; •review the metrics and targets associated with the annual short-term incentives and long-term incentive compensation plans; •review the proposed equity awards to be granted to our executive officers, along with vesting recommendations; •assist with a risk assessment of our compensation policies and practices; •review a draft of the Compensation Discussion and Analysis section of our definitive proxy statement; and •attend the Compensation Committee meetings in which executive compensation matters are discussed. Compensia, Inc. (“Compensia") was the Compensation Committee’s compensation consultant in fiscal 2023. Compensia provided services related exclusively to the executive and non-employee director compensation consulting work performed for the Compensation Committee and for the Governance and Sustainability Committee. The Compensation Committee considered Compensia’s independence in light of SEC rules and Nasdaq Listing Rules. The Compensation Committee received a letter from Compensia addressing its independence, including the following factors: (i) other services provided to us by them; (ii) fees paid by us as a percentage of their total annual revenue; (iii) policies or procedures maintained by them that are designed to prevent a conflict of interest; (iv) any business or personal relationships between the individual consultants involved in the engagement and any member of the Compensation Committee; (v) whether the individual consultants involved in the engagement owned shares of our Common Stock; and (vi) any business or personal relationships between our executive officers and them or the individual consultants involved in the engagement. The Compensation Committee concluded that there were no conflicts of interest with Compensia.

  47. “Market Data” Defined

    “Market Data” Defined The Compensation Committee, with the support of Compensia, reviews and approves the Compensation Peer Group annually to ensure that it reflects industry or economic changes and core selection criteria. Our current criteria includes comparable revenue and market capitalization size; industry, with a focus on semiconductor companies and other broad technology industry companies that are market leaders in their space; as well as other talent competitors and companies with similar business strategies. Our Compensation Peer Group for fiscal 2023 was comprised of the following 16 companies, which we believe are companies with which we are likely to compete for executive talent. In consultation with Compensia, the Compensation Committee did not make any changes to the Compensation Peer Group for fiscal 2023.

  48. Compensation Peer Group Data

    Compensation Peer Group Data Compensia gathers data from the proxy statements publicly filed by our Compensation Peer Group and from published compensation surveys. The relevant survey and Compensation Peer Group data for fiscal 2023, each as discussed below, were weighted equally by the Compensation Committee and are collectively referred to throughout this Compensation Discussion and Analysis as the “Market Data.” When collecting and assessing market compensation data, Compensia collects data based on job descriptions first. This permits the Compensation Committee to match positions held by our executives with those of our Compensation Peer Group and, as described more fully below, deviate from the Market Data based on the factors described earlier. If the Compensation Committee is not able to match positions to a reasonable number of companies within the Compensation Peer Group, it looks to the rank of the person involved and matches ranks, e.g., our third-highest paid executive officer could be compared to the third-highest paid executive officer at each company within the Compensation Peer Group.

  49. Severance and Change in Control Arrangements

    Severance and Change in Control Arrangements

  50. Severance Agreements

    Severance Agreements President and Chief Executive Officer At the time of his hire, we entered into an executive agreement with Mr. Mehrotra (the “Executive Agreement”) providing for severance benefits in certain circumstances. The Executive Agreement provides that if Mr. Mehrotra’s employment is terminated (i) as result of his death or “disability,” (ii) by us without “cause” or (iii) as a result of Mr. Mehrotra’s resignation for “good reason,” then in addition to receiving his accrued base salary, accrued vacation pay, and other earned and vested employee benefits, Mr. Mehrotra will receive the following severance benefits: •salary continuation equal to two times Mr. Mehrotra’s salary in effect upon the date of termination paid in installments during the one-year period following termination (or paid in a lump sum if Mr. Mehrotra’s termination of employment occurs on, or within 12 months after, a “Change in Control”); •a pro-rated annual bonus under the EIP for the year of termination, subject to achievement of applicable performance criteria, paid in accordance with the terms of the EIP; •an additional bonus of two times Mr. Mehrotra’s target annual bonus under the EIP for the year of termination paid on the one-year anniversary of Mr. Mehrotra’s termination; •continued vesting (and exercisability) of any options, restricted stock or other time-based, and, subject to achievement of applicable performance criteria, performance-based equity awards for the one-year period following Mr. Mehrotra’s termination of employment; and •a cash payment equal to the additional cost of COBRA for continuation of benefits Mr. Mehrotra would have incurred and the employer qualified plan matching contributions Mr. Mehrotra would have received had Mr. Mehrotra remained a participant for an additional two years, paid in a lump sum following termination. If Mr. Mehrotra’s severance benefits become payable on account of his “good reason” resignation prior to a “Change in Control” and Mr. Mehrotra becomes employed within one year of his termination of employment, the unpaid portion of his salary continuation benefit will be forfeited. The Executive Agreement also includes a “cut-back” provision, which provides that Mr. Mehrotra’s benefits under the Executive Agreement will be reduced so that no excise tax will apply under Section 280G of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), if such reduction will result in a higher net after-tax benefit to Mr. Mehrotra. The Executive Agreement does not provide a tax gross-up for any such tax. Mr. Mehrotra’s entitlement to the benefits provided under the Executive Agreement are conditioned on Mr. Mehrotra signing a release of claims in favor of Micron and on Mr. Mehrotra’s compliance with terms of our non-competition, non-solicitation, and non-disclosure agreement. Other Named Executive Officers Each of our other Named Executive Officers has a severance agreement (together, the “Named Executive Officer Severance Agreements”). The Named Executive Officer Severance Agreements provide for severance benefits upon certain terminations of employment. These benefits begin upon a “separation of service” as defined in Section 409A of the Code, regardless of when a termination of employment or loss of officer status occurs, and ends after one year (or 18 months if termination occurs on or within 12 months following a Change in Control). We believe severance agreements for certain of our officers are in the best interests of us and our shareholders, in that they help us attract and retain qualified executive talent, promote candid discussion among our officers, help provide for a smooth transition when there is a change in management, provide the officer with benefits in consideration of a promise not to compete with us after termination of employment, and release us, and our officers, directors, employees, and agents from any and all claims. Provided a Named Executive Officer complies with post-employment obligations and restrictions described below and all other terms of the Named Executive Officer Severance Agreement, the Named Executive Officer is entitled to receive compensation during the 12- or 18-month period following termination of employment equivalent to the compensation and benefits customarily provided to such Named Executive Officer while employed including, but not limited to, salary, executive bonus, and in certain cases, continued vesting of outstanding stock options and restricted equity awards, and amounts with respect to 401(k) plan matching contributions and COBRA premiums. With respect to cash and equity awards that are performance-based, the Named Executive Officer is entitled to receive such awards only if the goals are achieved before or during the 12- or 18-month period following termination of employment. Terminated Named Executive Officers are not entitled to receive any new awards under our equity plans or the EIP or to the payment of any compensation that would be deferred past the 12- or 18-month period following termination of employment due to payment criteria of an incentive program, as those criteria exist as of the date of termination. Notwithstanding the discussion above, the Named Executive Officer Severance Agreement for Dr. DeBoer that was in place for fiscal 2023 did not provide for enhanced benefits upon separation in connection with a Change in Control. The Named Executive Officer Severance Agreements for Messrs. Murphy, Bhatia and Sadana provide that upon certain terminations of employment on or within 12 months following a Change in Control, all of the Named Executive Officer’s outstanding stock options and restricted equity awards will be treated as vested and earned. Mr. Murphy’s Named Executive Officer Severance Agreement also provides that in connection with certain terminations of employment any unvested shares granted as part of his new hire equity award will continue to vest at the same time and in the same amounts as if he had remained an employee through the applicable vesting date. Terminated Named Executive Officers are subject to the following post-termination obligations and restrictions: •a one-year non-competition obligation; •confidentiality obligations related to our proprietary and confidential information that last indefinitely; •a non-disparagement and confidentiality obligation surrounding the reasons for, and circumstances of, the Named Executive Officer’s termination of employment or change in officer status that lasts indefinitely. However, we may disclose such information if we determine, in our sole discretion, it is either required by law to be disclosed or necessary to be disclosed to serve a valid business purpose; and •non-solicitation and non-interference provisions relating to our employees and business partners that last at least one year. Upon receipt of all benefits under the Named Executive Officer Severance Agreement, we and the Named Executive Officer are considered to have settled, waived, and voluntarily released any and all claims each has or may have against the other, inclusive of any of our affiliates, officers, directors, employees or agents, both individually and in their official capacities, which claims are accruing prior to the end of the 12- or 18-month period following termination of employment. We entered into an amended and restated Severance Agreement with Dr. DeBoer after the close of our fiscal 2023. In contrast to the agreement with Dr. DeBoer in effect during fiscal 2023, which is described above, the amended and restated Severance Agreement: •clarifies that a qualifying termination that entitles Dr. DeBoer to severance is limited to a termination by us without “cause” or a resignation by Dr. DeBoer for “good reason”;

  51. Severance Agreements

    •caps at fiscal 2023 levels (prior to reduction) the salary and target bonus used to determine the compensation payable to Dr. DeBoer during the 12-month period following termination of employment in the event of a qualifying termination in the absence of a “Change in Control”; •provides that, in the event of Dr. DeBoer’s retirement, any such severance payments will be pursuant to a consulting agreement that will terminate upon Dr. DeBoer’s return from retirement; •provides that, in the event of Dr. DeBoer’s qualifying termination upon or within 12 months following a “Change in Control”, Dr. DeBoer will vest in full in his outstanding unvested options, with any unresolved performance conditions deemed to be met at target levels.

  52. Estimated Severance Payments

    Estimated Severance Payments See “Potential Payments Upon Termination or Change in Control” on page 69 for a description of the estimated severance amounts as of the end of fiscal 2023 for Messrs. Mehrotra, Murphy, Bhatia, DeBoer, and Sadana. Any cash severance amounts that would be payable to our executive officers are subject to the Executive Officer Cash Severance Policy described below.

  53. Change in Control Arrangements

    Change in Control Arrangements We do not have separate Change in Control agreements for our Named Executive Officers and directors. The Executive Agreement and the Named Executive Officer Severance Agreements referenced above provide for transitional benefits in the event of termination of employment, including following a Change in Control. In addition, under the terms of our EIP and our equity compensation plans, awards may be substituted, assumed, or accelerated upon a Change in Control, depending upon the circumstances. Our equity plans provide for “double-trigger” vesting provisions in the event of a Change in Control. As a result, if awards are assumed by a successor in connection with a Change in Control, such awards will not automatically vest and pay out solely as a result of the Change in Control. Instead, vesting for such awards will accelerate if within one year after the effective date of the Change in Control, the participant’s employment is terminated without cause or, in the case of certain participants including our Named Executive Officers, if the participant resigns for good reason. The compensation that Named Executive Officers could receive if a Change in Control occurs is intended to enable them to objectively evaluate whether a potential Change in Control is in the best interest of us and our shareholders. The estimated value that the Named Executive Officers could receive from our Change in Control provisions can be found in “Potential Payments Upon Termination or Change in Control” on page 69.

  54. FISCAL 2023 SUMMARY COMPENSATION TABLE

    FISCAL 2023 SUMMARY COMPENSATION TABLE The following table details the total compensation earned by our Named Executive Officers in fiscal 2023, 2022, and 2021.

  55. FISCAL 2023 SUMMARY COMPENSATION TABLE

    | Name and Principal Position | Year | Salary(1) | Bonus (2) | Stock Awards(3)(4) | Non-Equity Incentive Plan Compensation(5) | All Other Compensation(6) | Total | | Sanjay Mehrotra | 2023 | $1,255,476 | $— | $23,750,005 | $— | $271,472 | $25,276,953 | | President and Chief | 2022 | 1,409,893 | — | 23,499,965 | 3,435,275 | 495,676 | 28,840,809 | | Executive Officer | 2021 | 1,350,000 | — | 18,499,995 | 4,800,600 | 666,114 | 25,316,709 | | Mark Murphy | 2023 | 639,827 | — | 7,749,991 | — | 14,284 | 8,404,102 | | Executive Vice President and | 2022 | 266,538 | 250,000 | 12,631,963 | 326,555 | 99,986 | 13,575,042 | | Chief Financial Officer | | | | | | | | | Manish Bhatia | 2023 | 667,020 | — | 8,250,009 | — | 17,118 | 8,934,147 | | Executive Vice President, | 2022 | 725,607 | — | 7,999,991 | 904,511 | 8,887,720 | 18,517,829 | | Global Operations | 2021 | 695,000 | — | 5,999,969 | 1,235,710 | 622,194 | 8,552,873 | | Scott DeBoer | 2023 | 571,046 | — | 6,500,022 | — | 18,352 | 7,089,420 | | Executive Vice President, | 2022 | 621,203 | — | 6,249,944 | 703,968 | 17,450 | 7,592,565 | | Technology and Products | 2021 | 595,000 | — | 4,999,957 | 1,057,910 | 15,700 | 6,668,567 | | Sumit Sadana | 2023 | 715,007 | — | 8,500,024 | — | 16,500 | 9,231,531 | | Executive Vice President | 2022 | 777,809 | — | 8,250,001 | 1,057,727 | 15,893 | 10,101,430 | | and Chief Business Officer | 2021 | 745,000 | — | 6,500,005 | 1,457,071 | 14,500 | 8,716,576 |

  56. FISCAL 2023 SUMMARY COMPENSATION TABLE

    (1)Our fiscal year is the 52-week period ending on the Thursday closest to August 31. Fiscal 2023, 2022, and 2021 each contained 52 weeks. (2)Mr. Murphy received a cash signing bonus in fiscal 2022 upon joining the Company. (3)The grant date fair values for the stock awards are based on the closing price on the last market trading day prior to the date of grant. The grant date fair value of the performance-based awards granted in fiscal 2023, 2022, and 2021 was computed by multiplying (i) the target number of restricted shares or units awarded to each Named Executive Officer, which was the assumed probable outcome as of the grant date, by (ii) either (a) the closing price of our Common Stock on the last market trading day prior to the date of grant; or (b) the fair value per share as calculated by the use of a Monte Carlo simulation, which represents the most likely value, if the award had a market condition performance goal. Although the assumed probable outcome as of the grant date was achievement at the target level, the terms of the awards for performance-based restricted stock unit awards granted in fiscal 2023, 2022, and 2021 also provide for achievement of up to 200% of the target amount (“maximum”). The table below presents the aggregate grant date fair value of stock awards for the periods presented assuming achievement at the maximum level for such performance-based awards. Grant date fair values for both the target and maximum levels are consistent with the amounts used to determine compensation cost under Accounting Standards Codification 718.

  57. FISCAL 2023 SUMMARY COMPENSATION TABLE

    | | 2023 | | | 2022 | | | 2021 | | | | Executive Officer | Time-based Stock Award | Performance-based Stock Award at Maximum Level | Total Stock Awards | Time-based Stock Award | Performance-based Stock Award at Maximum Level | Total Stock Awards | Time-based Stock Award | Performance-based Stock Award at Maximum Level | Total Stock Awards | | Sanjay Mehrotra | $11,874,975 | $21,731,347 | $33,606,322 | $11,749,992 | $21,502,435 | $33,252,427 | $9,249,995 | $16,927,511 | $26,177,506 | | Mark Murphy | 3,875,015 | 7,091,239 | 10,966,254 | 6,315,978 | 11,558,203 | 17,874,181 | | | | | Manish Bhatia | 4,124,997 | 7,548,803 | 11,673,800 | 3,999,997 | 7,319,981 | 11,319,978 | 3,000,002 | 5,489,918 | 8,489,920 | | Scott DeBoer | 3,249,980 | 5,947,570 | 9,197,550 | 3,125,031 | 5,718,586 | 8,843,617 | 2,499,976 | 4,574,983 | 7,074,959 | | Sumit Sadana | 4,250,015 | 7,777,478 | 12,027,493 | 4,125,031 | 7,548,641 | 11,673,672 | 3,249,990 | 5,947,520 | 9,197,510 |

  58. FISCAL 2023 SUMMARY COMPENSATION TABLE

    (4)Amount shown for Mr. Murphy for fiscal 2022 includes $9,999,999 in respect of his new hire equity awards, in the form of both time-based restricted stock and performance-based restricted units. (5)The EIP for fiscal 2023 for all Named Executive Officers was suspended in February 2023 and no amounts were paid. (6)Includes matching contributions paid by us pursuant to our 401(k) plan. For fiscal 2023, $16,500 was contributed for each of Messrs. Mehrotra, Bhatia, DeBoer, and Sadana, and $12,746 for Mr. Murphy. Includes matching contributions paid by us for health savings accounts in fiscal 2023 for Messrs. Murphy, and DeBoer and de minimis non-cash benefits and related tax gross-ups paid by us for each of Messrs. Mehrotra, Murphy, Bhatia, and DeBoer. All Other Compensation also includes the following for the Named Executive Officers mentioned below: •Amount for Mr. Mehrotra’s fiscal 2023 compensation includes $71,567 for the use of Company aircraft for personal travel and $183,065 for personal security arrangements paid by us. While we do not consider personal security measures to be a personal benefit, but instead appropriate expenses for the benefit of the Company that arise out of our executive’s employment responsibilities and that are necessary to his or her job performance and to ensure the safety of our executives and their families, SEC regulations require the costs of certain personal security arrangements to be reported as personal benefits. In determining to authorize these security arrangements, the Compensation Committee evaluated the need to respond to specific incidents and threats, and reviewed recommendations from a leading security firm. In addition, the Compensation Committee has established a policy to review personal security costs quarterly. The Security Committee also has an annual process for oversight of the nature of security measures and will discontinue, adjust, or enhance security as appropriate. •Amount for Mr. Bhatia’s fiscal 2022 compensation includes a tax equalization of $8,388,304 to be paid by us for him and we expect to recover $6,783,325 for fiscal 2023 and all or a portion of the remaining $1,604,979 over the next few years with foreign tax credits or Singapore tax refund. Employees who participate in our expatriate programs are responsible for substantially the same income tax liability as they would have been had they worked exclusively in the United States. Each expatriate employee is responsible for a hypothetical U.S. income tax liability based on an estimate of their anticipated U.S. income tax liability on their stay-at-home income, and we are responsible for income tax liabilities associated with the assignment or host country taxes, as applicable, and any additional taxes attributed to the international assignment. To the extent that tax years differ from the fiscal year in which the compensation was earned that gave rise to the expatriates’ income tax liability, or in the case that we have not reached the end of the tax year, the amount of tax equalization has been estimated. Mr. Bhatia received no net benefit from tax equalization (when considered together with the impact of his overseas assignment) in 2021 because his hypothetical U.S. tax exceeded his actual and/or estimated global (U.S. and international) taxes in each year. Mr. Bhatia completed his expatriate assignment in Singapore in fiscal 2022. As a result, he is subject to the deemed exercise rule upon exit with respect to his unvested restricted equity awards granted during his Singapore expatriate assignment and is required to pay Singapore taxes as if gains were realized. All or most of the taxes paid on his unvested awards are expected to be recovered when those restricted equity awards granted during his Singapore expatriate assignment vest or forfeit.

  59. GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023

    GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023 The table below sets forth the plan-based award grants to our Named Executive Officers in fiscal 2023.

  60. GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023

    | Name | Grant Date | Estimated Future Payouts under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(3) | Grant Date Fair Value of Stock (or Units)(4) | | | | Threshold | Target | Max | Threshold | Target | Max | | | | Sanjay Mehrotra | NA | $1,524,350 | $3,048,700 | $6,097,400 | | | | | | | | 10/13/22 | | | | 44,383 | 201,325 | 402,650 | | $11,875,031 | | | 10/13/22 | | | | | | | 225,118 | 11,874,975 | | Mark Murphy | NA | 385,000 | 770,000 | 1,540,000 | | | | | | | | 10/13/22 | | | | 14,483 | 65,695 | 131,390 | | 3,874,976 | | | 10/13/22 | | | | | | | 73,460 | 3,875,015 | | Manish Bhatia | NA | 401,363 | 802,725 | 1,605,450 | | | | | | | | 10/13/22 | | | | 15,417 | 69,934 | 139,868 | | 4,125,011 | | | 10/13/22 | | | | | | | 78,199 | 4,124,997 | | Scott DeBoer | NA | 312,375 | 624,750 | 1,249,500 | | | | | | | | 10/13/22 | | | | 12,147 | 55,100 | 110,200 | | 3,250,042 | | | 10/13/22 | | | | | | | 61,611 | 3,249,980 | | Sumit Sadana | NA | 469,350 | 938,700 | 1,877,400 | | | | | | | | 10/13/22 | | | | 15,885 | 72,053 | 144,106 | | 4,250,009 | | | 10/13/22 | | | | | | | 80,569 | 4,250,015 |

  61. GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023

    (1)The EIP for fiscal 2023 was suspended in February 2023 and no bonuses were paid. As required by SEC rules, the amounts shown in the table represent estimated possible payouts for fiscal 2023 under the EIP prior to its suspension. Payment of bonuses under the EIP would have been dependent upon meeting specified performance goals. A description of the performance milestones associated with such bonuses is included in the “Compensation Discussion and Analysis.” (2)Represents restricted stock units awarded in fiscal 2023 under the 2007 Plan with performance-based and market-based restrictions. The threshold amounts shown relate solely to the 2023 rTSR PRSU Award. For the 2023 DRAM Market Segment PRSU Awards and the 2023 NAND Market Segment PRSU Awards, achievement at the relevant threshold level results in no payout. For all PRSU awards, achievement between the threshold level and the maximum level is paid out based on interpolation between performance levels. Information related to the performance-based and market-based restrictions associated with these shares is contained in “Compensation Discussion and Analysis.” All of the PRSUs include the potential to receive dividends at the same rate as other holders of Common Stock. Any such dividends initially will be unvested and will accumulate and pay out in cash only if and when the underlying PRSUs vest. (3)Represents restricted stock awarded in fiscal 2023 under the 2007 Plan with time-based restrictions. Time-based restrictions on these awards lapse in three equal installments over a three-year period from the date of the award. The restricted stock includes the potential to receive dividends at the same rate as other holders of Common Stock. Any such dividends initially will be unvested and will accumulate and pay out in cash only if and when the underlying shares of restricted stock vest. (4)The value shown is based on the fair value as of the date of grant and was computed by multiplying (i) the target number of restricted shares or units awarded to each Named Executive Officer by (ii) either (a) the closing price of our Common Stock on the last market-trading day prior to the date of grant; or (b) the fair value per share as calculated by the use of a Monte-Carlo simulation, which represents the most likely value if the award had a market condition performance goal.

  62. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END The following table provides information with respect to outstanding stock options, restricted stock, and restricted stock units held as of August 31, 2023, by our Named Executive Officers.

  63. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | | Option Awards | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Options | | Option Exercise Price ($) | Option Expiration Date | Shares or Units of Stock That Have Not Vested | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested($)(1) | | Name | Exercisable (#) | Unexercisable (#) | | | Number (#) | Market Value($)(1) | | | | Sanjay Mehrotra | 471,976 | | $28.20 | 5/8/2025 | 59,363(2) | $4,151,848 | 34,611(3) | $2,420,693 | | | 59,308 | | 41.56 | 10/24/2025 | 117,406(4) | 8,211,376 | 89,045(5) | 6,227,807 | | | | | | | 225,118(6) | 15,744,753 | 44,027(7) | 3,079,248 | | | | | | | | | 44,027(8) | 3,079,248 | | | | | | | | | 73,946(9) | 5,171,783 | | | | | | | | | 56,280(10) | 3,936,223 | | | | | | | | | 56,280(11) | 3,936,223 | | | | | | | | | 88,765(12) | 6,208,224 | | Mark Murphy | | | | | 60,041(13) | 4,199,268 | 22,515(7) | 1,574,699 | | | | | | | 73,460(6) | 5,137,792 | 22,515(8) | 1,574,699 | | | | | | | | | 37,382(9) | 2,614,497 | | | | | | | | | 18,365(10) | 1,284,448 | | | | | | | | | 18,365(11) | 1,284,448 | | | | | | | | | 28,965(12) | 2,025,812 | | Manish Bhatia | 53,317 | | 41.56 | 10/24/2025 | 19,253(2) | 1,346,555 | 11,225(3) | 785,077 | | | | | | | 39,968(4) | 2,795,362 | 28,879(5) | 2,019,797 | | | | | | | 78,199(6) | 5,469,238 | 14,988(7) | 1,048,261 | | | | | | | | | 14,988(8) | 1,048,261 | | | | | | | | | 25,173(9) | 1,760,600 | | | | | | | | | 19,550(10) | 1,367,327 | | | | | | | | | 19,550(11) | 1,367,327 | | | | | | | | | 30,834(12) | 2,156,530 | | Scott DeBoer | 8,770 | | 41.56 | 10/24/2025 | 16,044(2) | 1,122,117 | 9,354(3) | 654,219 | | | | | | | 31,225(4) | 2,183,877 | 24,066(5) | 1,683,176 | | | | | | | 61,611(6) | 4,309,073 | 11,709(7) | 818,927 | | | | | | | | | 11,709(8) | 818,927 | | | | | | | | | 19,666(9) | 1,375,440 | | | | | | | | | 15,403(10) | 1,077,286 | | | | | | | | | 15,403(11) | 1,077,286 | | | | | | | | | 24,294(12) | 1,699,122 | | Sumit Sadana | 14,031 | | 41.56 | 10/24/2025 | 20,857(2) | 1,458,739 | 12,161(3) | 850,540 | | | | | | | 41,217(4) | 2,882,717 | 31,286(5) | 2,188,143 | | | | | | | 80,569(6) | 5,634,996 | 15,456(7) | 1,080,993 | | | | | | | | | 15,456(8) | 1,080,993 | | | | | | | | | 25,960(9) | 1,815,642 | | | | | | | | | 20,142(10) | 1,408,731 | | | | | | | | | 20,142(11) | 1,408,731 | | | | | | | | | 31,769(12) | 2,221,924 |

  64. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    (1)Calculated by multiplying the number of shares of restricted stock or restricted stock units by $69.94, the closing price of our Common Stock on August 31, 2023. (2)Restrictions on shares lapsed on October 16, 2023. (3)Represents the banked number of 2021 rTSR PRSU Awards. Performance-based restrictions on stock units lapsed in October 2023 based on the achievement of an rTSR goal through fiscal 2023. (4)Restrictions on shares lapsed or will lapse, as applicable, in equal installments on October 13, 2023 and October 13, 2024. (5)Represents the banked number of 2021 High-Value NAND PRSU Awards. Performance-based restrictions on stock units lapsed in October 2023 based on the achievement of a high-value NAND shipment goal through fiscal 2022. (6)Restrictions on shares lapsed or will lapse, as applicable, on 33.33% of the units on October 15, 2023 and on 8.33% each quarter thereafter over the remaining two years. (7)Represents the target number of 2022 High-Value NAND PRSU Awards. Performance-based restrictions on stock units lapsed or will lapse, as applicable, in October 2023 and October 2024 based on the achievement of a high-value NAND shipment goal through fiscal 2023 and 2024. (8)Represents the target number of 2022 Market Segment NAND PRSU Awards. Performance-based restrictions on stock units lapsed or will lapse, as applicable, in October 2023 and October 2024 based on the achievement of a NAND market segment goal through fiscal 2023 and 2024. (9)Represents the target number of 2022 rTSR PRSU Awards. Performance-based restrictions on stock units lapsed or will lapse, as applicable, in October 2023 and October 2024 based on the achievement of a rTSR goal through fiscal 2023 and 2024. (10)Represents the target number of 2023 DRAM PRSU Awards. Performance-based restrictions on stock units lapse in October 2024 and October 2025 based on the achievement of a DRAM market segment goal through fiscal 2024 and 2025. (11)Represents the target number of 2023 NAND PRSU Awards. Performance-based restrictions on stock units lapse in October 2024 and October 2025 based on the achievement of a NAND market segment goal through fiscal 2024 and 2025. (12)Represents the target number of 2023 rTSR PRSU Awards. Performance-based restrictions on stock units lapse in October 2024 and October 2025 based on the achievement of a rTSR goal through fiscal 2024 and 2025. (13)Restrictions on shares will lapse, as applicable, in equal installments on April 18, 2024 and April 18, 2025.

  65. OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023

    OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023 The following table sets forth information related to the number of options and restricted awards held by each of the Named Executive Officers that were exercised or vested in fiscal 2023 and the value realized.

  66. OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise | Value Realized on Exercise(1) | Number of Shares Acquired on Vesting(2) | Value Realized on Vesting(3) | | Sanjay Mehrotra | 81,000 | $2,132,730 | 345,198 | $21,152,256 | | Mark Murphy | — | — | 54,832 | 3,608,088 | | Manish Bhatia | — | — | 114,173 | 6,990,493 | | Scott DeBoer | — | — | 91,741 | 5,631,197 | | Sumit Sadana | — | — | 122,079 | 7,473,444 |

  67. OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023

    (1)Calculated as the aggregate value of the number of options exercised multiplied by the difference between the fair market value per share at the time of the exercise and the exercise price of the option. (2)Includes performance-based restricted units vested in October 2023 based on performance completed by the end of fiscal 2023 and performance-based restricted units for which time-based restrictions lapsed in fiscal 2023 but for which the performance condition had been met in prior years. Excludes performance-based restricted units vested in October 2022 based on performance completed by the end of fiscal 2022 and performance-based restricted units with time-based restrictions that had met the performance-based condition but for which the time-based restriction had not lapsed by the end of fiscal 2023. (3)Value calculated by multiplying number of shares by the market value per share on the vesting date.

  68. 2023 NONQUALIFIED DEFERRED COMPENSATION

    2023 NONQUALIFIED DEFERRED COMPENSATION Mr. Mehrotra is the only Named Executive Officer who has participated in the Micron Technology, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”) through the end of fiscal 2023.

  69. 2023 NONQUALIFIED DEFERRED COMPENSATION

    | Name | Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings (Losses) in Last Fiscal Year ($) | Aggregate Withdrawals/Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($) | | Sanjay Mehrotra | $1,788,922(1) | $— | $1,185,320 | $(2,103,225) | $8,064,548(2) |

  70. 2023 NONQUALIFIED DEFERRED COMPENSATION

    (1)$357,558 included in the Summary Compensation table in the “Salary” column for fiscal 2023 and $1,431,364 included in the “Non-Equity Incentive Plan Compensation” column for fiscal 2022. (2)Balance as of the beginning of fiscal 2023 was $7,193,531.

  71. CHIEF EXECUTIVE OFFICER PAY RATIO

    CHIEF EXECUTIVE OFFICER PAY RATIO In accordance with Item 402(u) of Regulation S-K, we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of our median compensated employee. •The annual total compensation of our median compensated employee for fiscal 2023 was $54,570. •The annual total compensation of our CEO for fiscal 2023 was $25,276,953. •The ratio of the annual total compensation of our CEO to that of our median employee for fiscal 2023 was estimated to be 463 to 1. The median compensated employee generally is the employee whose annual total compensation is at the midpoint of our employees (excluding our CEO), ranked in order of their compensation amounts. As permitted by the SEC rules, we used base salary, bonuses, and grant date fair value of equity awards granted to employees in fiscal 2023, as reported in our payroll data, to identify our median employee. When calculating our median compensation for fiscal 2023, we utilized our global employee population and exchange rates as of August 31, 2023. As of August 31, 2023, our employee population was approximately 43,000. This includes all regular, part-time, and temporary employees. No exclusions were made for countries, employee types, or acquisitions. The median compensated employee for fiscal 2023 was a Manufacturing Engineer in Taiwan. We determined actual annual total compensation in accordance with Item 402(c)(2)(x) of Regulation S-K and in the same manner as our CEO in the Summary Compensation Table using the daily average Taiwan dollar exchange rates for compensation paid to the median compensated employee during fiscal 2023. We compared this value to the annual total compensation of our CEO for purposes of the ratio set forth above. We did not make any cost of living adjustments. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios. Based on the above, the ratio shown of the annual total compensation of our CEO to the annual total compensation of the median compensated employee for fiscal 2023 is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.

  72. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The following tables quantify the estimated payments and benefits for each of the continuing Named Executive Officers pursuant to the Executive Agreement and NEO Severance Agreements and in the event of a Change in Control as described in the “Severance and Change in Control Arrangements” section of the “Compensation Discussion and Analysis.” The amounts listed for the continuing Named Executive Officers are estimated amounts that were calculated as if a Change in Control occurred on August 31, 2023, or the Named Executive Officers separated from service on August 31, 2023, the last day of fiscal 2023.

  73. Potential Payment upon Termination without Change in Control

    Potential Payment upon Termination without Change in Control All the continuing Named Executive Officers have severance agreements. Payments and benefits upon termination for Messrs. Mehrotra, Murphy, Bhatia and Sadana are payable only if their employment with the Company terminates as a result of death or disability, the Company terminates their employment without cause, or they resign for good reason. The “Salary” portion of severance payments is paid on our regular bi-weekly payroll schedule during the officer’s one-year Transition Period subject to the possibility of a six-month delay that may be required by Section 409A of the Code (“Section 409A”). If Section 409A imposes a six-month delay, payments subject to the delay would be accumulated and paid to the officer on the first day of the seventh month following the Named Executive Officer’s separation from service. The remaining payments would then be paid according to our regular payroll schedule. The “Bonus” portion of the severance payments includes a component that is paid only if the applicable performance goals are achieved before or during the applicable Transition Period. Such payments are made at the same time that the other officers participating in the applicable bonus plan receive their payments, if any, and typically would occur during our first fiscal quarter. Mr. Mehrotra would receive a separate bonus severance payment equal to two times his target annual bonus under the EIP for the year of termination paid on the anniversary of his termination. The “Cash In Lieu of Benefits” portion of the severance payments is calculated based on the difference between the amount of premiums the Named Executive Officer paid each month for benefits coverage as our employee and the estimated premiums the Named Executive Officer would need to pay each month for the same or similar coverage as a former employee. This monthly amount is multiplied by the number of months in the Named Executive Officer’s Transition Period and is grossed-up for taxes, with the exception of Mr. Mehrotra, who would receive two times this amount. All gross-up calculations and payments are based on the standard supplemental withholding rates provided by federal and state guidelines. We do not use the Named Executive Officer’s actual tax rate for these calculations. These “Cash in Lieu of Benefits” payments will be made in a lump sum within 30 or 60 days after the Named Executive Officer’s separation from service for Dr. DeBoer or Mr. Mehrotra, respectively, and in roughly equal installments over the Transition Period for our other Named Executive Officers, subject to the possibility of a six-month delay that may be required by Section 409A. If Section 409A imposes a six-month delay, the payment would be made to the Named Executive Officer (or commence, for our Named Executive Officers other than Dr. DeBoer and Mr. Mehrotra) on the first day of the seventh month following the officer’s separation from service.

  74. Potential Payment upon Termination without Change in Control

    | Name | Salary(1) | Bonus(2) | Cash in Lieu of Benefits Payment(3) | Value of Extended Option Exercise Term (4) | Value of Extended Restricted Stock Vesting(5) | Value of Unearned Performance -Based Stock Awards(6) | Total | | Sanjay Mehrotra | $2,836,000 | $5,398,547 | $389,026 | $1,053,556 | $17,441,917 | $12,122,071 | $39,241,117 | | Mark Murphy | 700,000 | — | 113,036 | — | 5,096,668 | 1,735,351 | 7,645,055 | | Manish Bhatia | 729,750 | — | 93,209 | 173,083 | 5,934,619 | 3,986,510 | 10,917,171 | | Scott DeBoer | 624,750 | — | 117,676 | 28,470 | 4,727,594 | 3,261,442 | 8,759,932 | | Sumit Sadana | 782,250 | — | 86,676 | 45,549 | 6,187,102 | 4,258,087 | 11,359,664 |

  75. Potential Payment upon Termination without Change in Control

    (1)Represents one year of the Named Executive Officer’s salary as of August 31, 2023, except for Mr. Mehrotra, which represents two years of salary as of August 31, 2023. As agreed with the Named Executive Officers at the time of their salary reductions for fiscal 2023, upon a termination in fiscal 2023, salary severance benefits would be based on salaries in effect for fiscal 2023 prior to reduction. (2)Represents for Mr. Mehrotra a bonus severance payment equal to two times his target annual bonus, subject to the maximum award limit imposed by the EIP. This column also includes the actual EIP bonus paid for fiscal 2023 for each Named Executive Officer. As discussed above, the EIP for fiscal 2023 was suspended in February 2023, so none of our Named Executive Officers received a bonus for fiscal 2023. (3)Represents a cash payment in an amount estimated to allow the Named Executive Officer to purchase during the Transition Period benefits similar to those received while an employee, except for Mr. Mehrotra, which represents twice that amount. The amount listed includes a gross-up calculation for the tax impact of the payment. (4)Represents the value resulting from an extension of the exercise period for stock options through the 12-month Transition Period plus thirty days, or, if shorter, the remaining life of the options, for options that were outstanding as of August 31, 2023. The incremental fair value of each option award is estimated as of August 31, 2023 using the Black-Scholes option valuation model. The expected volatilities utilized are based on implied volatility from traded options on our stock. The expected lives are based on the shorter of the length of the Transition Period plus thirty days or the remaining life of the option. The risk-free interest rates utilized are based on the U.S. Treasury yield as of August 31, 2023. (5)Represents the value resulting from the additional vesting of restricted shares during the Named Executive Officer’s Transition Period. The amount shown is calculated as the number of additional shares that would vest during the Transition Period multiplied by $69.94, our closing stock price on August 31, 2023. (6)Represents the value resulting from the vesting of performance based restricted awards during the Named Executive Officer’s Transition Period. The amount shown is calculated as the number of additional shares that would vest during the Transition Period based on actual attainment of performance goals through August 31, 2023, multiplied by $69.94, our closing stock price on August 31, 2023.

  76. Potential Payment under Termination with Change in Control

    | Name | Salary(1) | Bonus(2) | Cash in Lieu of Benefits Payment(3) | Value of Options(4) | Value of Stock Awards(5) | Total | | Sanjay Mehrotra | $2,836,000 | $5,398,547 | $389,026 | $— | $62,220,023 | $70,843,596 | | Mark Murphy | 1,050,000 | 703,810 | 169,553 | — | 19,695,664 | $21,619,027 | | Manish Bhatia | 1,094,625 | 733,722 | 139,813 | — | 21,181,399 | 23,149,559 | | Scott DeBoer | 624,750 | — | 117,676 | — | 13,260,158 | 14,002,584 | | Sumit Sadana | 1,173,375 | 858,008 | 130,014 | — | 22,050,613 | 24,212,010 |

  77. Dr. DeBoer’s Amended and Restated Severance Agreement

    | Name | Salary(1) | Bonus(2) | Cash in Lieu of Benefits Payment(3) | Value of Extended Option Exercise Term (4) | Value of Extended Restricted Stock Vesting(5) | Value of Unearned Performance -Based Stock Awards(6) | Total | | Scott DeBoer | $624,750 | $624,750 | $74,665 | $28,470 | $4,727,594 | $3,261,442 | $9,341,671 |

  78. Dr. DeBoer’s Amended and Restated Severance Agreement

    | Name | Salary(1) | Bonus(2) | Cash in Lieu of Benefits Payment(3) | Value of Options(4) | Value of Stock Awards(5) | Total | | Scott DeBoer | $624,750 | $624,750 | $74,665 | $— | $16,833,719 | $18,157,884 |

  79. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE

  80. PAY VERSUS PERFORMANCE

    | | | | | | Value of Initial Fixed $100 Investment Based on:(4) | | | Company Selected Measure: Non-GAAP Net Income (Loss)(7) (in millions) | | Fiscal Year | Summary Compensation Table for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(2) | Company Total Shareholder Return (“TSR”) | Peer Group TSR(5) | Net Income (Loss)(6) (in millions) | | | 2023 | $25,276,953 | $42,535,802 | $8,414,800 | $13,652,768 | $153.10 | $164.30 | $(5,833) | $(4,862) | | 2022 | 28,840,809 | 13,451,732 | 10,446,440 | 4,217,817 | 124.42 | 117.53 | 8,687 | 9,475 | | 2021 | 25,316,709 | 68,023,777 | 7,697,877 | 19,558,088 | 159.70 | 152.68 | 5,861 | 6,976 |

  81. PAY VERSUS PERFORMANCE

    (1)Our Principal Executive Officer (“PEO”) for each of the fiscal years shown in the table is Sanjay Mehrotra. Amounts reflect the compensation reported in the “Total” column of the Summary Compensation Table for our PEO for the corresponding fiscal year. (2)Amounts reflect the Compensation Actually Paid (“CAP”) of our PEO, or the average of the CAP of our Non-PEO Named Executive Officers (“Non-PEO NEOs”), for each fiscal year. CAP does not necessarily reflect amounts of compensation actually earned, realized, or received in each fiscal year. Rather, CAP is calculated starting with the amount of compensation reported in the “Total” column of the Summary Compensation Table for our PEO or Non-PEO NEOs, as applicable, for each fiscal year (and averaged for our Non-PEO NEOs), as adjusted in accordance with the requirements of Item 402(v) of Regulation S-K. The following adjustments were made to the amount of compensation reported in the “Total” column of the Summary Compensation Table for our PEO and the average of the amounts of compensation reported in the “Total” column of the Summary Compensation Table for our Non-PEO NEOs:

  82. PAY VERSUS PERFORMANCE

    | | Fiscal 2023 | | Fiscal 2022 | | Fiscal 2021 | | | | PEO | Average Non-PEO NEOs | PEO | Average Non-PEO NEOs | PEO | Average Non-PEO NEOs | | Summary Compensation Table Total | $25,276,953 | $8,414,800 | $28,840,809 | $10,446,440 | $25,316,709 | $7,697,877 | | - grant date fair value of awards granted in fiscal year | (23,750,005) | (7,750,012) | (23,499,965) | (7,771,995) | (18,499,995) | (5,624,972) | | + fair value of outstanding and unvested awards at fiscal year end that were granted in fiscal year | 30,945,387 | 10,097,981 | 19,866,074 | 5,492,754 | 26,043,233 | 7,918,513 | | +/- change, from prior fiscal year end, in fair value of awards granted in any prior fiscal year outstanding and unvested | 8,473,475 | 2,455,380 | (9,033,074) | (2,077,206) | 26,370,283 | 8,310,020 | | + fair value as of vesting date of equity awards granted and vested in the year | — | — | — | — | — | — | | +/- change, from prior fiscal year end, in fair value at vesting date of any awards granted in any prior fiscal year for which all applicable vesting conditions were satisfied at end of or during fiscal year | 1,168,408 | 309,198 | (3,060,411) | (761,113) | 8,793,547 | 1,256,650 | | - fair value at end of prior fiscal year of any awards granted in any prior fiscal year that failed to meet applicable vesting conditions during fiscal year | — | — | — | (1,170,912) | — | — | | + value of dividends or other earnings paid on stock or option awards not otherwise reflected in fair value or total compensation | 421,584 | 125,421 | 338,299 | 59,849 | — | — | | Total Equity Award Adjustments | 17,258,849 | 5,237,968 | (15,389,077) | (6,228,623) | 42,707,068 | 11,860,211 | | Compensation Actually Paid | $42,535,802 | $13,652,768 | $13,451,732 | $4,217,817 | $68,023,777 | $19,558,088 |

  83. PAY VERSUS PERFORMANCE

    (3)Amounts reflect the average of the amounts of compensation reported in the “Total” column of the Summary Compensation Table for our Non-PEO NEOs for the corresponding fiscal year. Our Non-PEO NEOs for each of the fiscal years shown in the Pay Versus Performance Table are:

  84. PAY VERSUS PERFORMANCE

    | 2023: | M. Murphy, M. Bhatia, S. DeBoer, and S. Sadana | | 2022: | M. Murphy, M. Bhatia, M. Bokan, S. DeBoer, S. Sadana, and D. Zinsner (former CFO) | | 2021: | M. Bhatia, S. DeBoer, S. Sadana, and D. Zinsner |

  85. PAY VERSUS PERFORMANCE

    (4)The total shareholder return, or TSR, of each of the Company and the Peer Group is calculated by assuming that an investment of $100 is made in our common stock and in the Peer Group, respectively, starting from the market close on Sept. 3, 2020, which is the last trading day before the end of the fiscal year shown. Total shareholder return includes reinvestment of dividends into shares of common stock of the applicable company. Historical stock performance is not necessarily indicative of future stock performance. Disclosure of the TSRs is required by Item 402(v) of Regulation S-K and is not intended to forecast or be indicative of possible future performance of our common stock or the Peer Group. (5)The Peer Group is based on the Philadelphia Semiconductor Index, one of the indices identified in the Stock Price Performance Graph included in our Annual Report on Form 10-K for our fiscal year 2023. (6)Amounts reflect the Company’s net income as reflected in the audited financial statements for each covered fiscal year. (7)Amounts reflect the Company’s non-GAAP net income (loss) which is the audited net income (loss) plus adjustments for stock-based compensation, restructure and asset impairments, goodwill impairment, gains and losses from settlements and patent license charges, gains and losses on debt repurchases and conversions, initial impact of inventory accounting policy change to FIFO and change in inventory cost absorption, and estimated tax effects of the above and other tax adjustments.