DEF 14A of Microchip Technology Inc, Jul 7, 2023

DEF 14A of Microchip Technology Inc

Filed Jul 7, 2023 · FY20230000827054-23-000104

Open on EDGAR

  1. Compensation Policies and Practices

    | What We Do | What We Don’t Do | | Compensation Committee is comprised 100% of independent directors | No repricing of stock options | | Balance short and long-term incentives, cash and equity and fixed and variable pay elements | No dividends or dividend equivalents on unearned awards | | Performance-based awards comprising approximately 50% of the overall equity allocation to executive officers | No pledging or hedging of Microchip securities | | Require one-year minimum vesting for awards granted under the Amended and Restated 2004 Equity Incentive Plan, subject to certain exceptions | No perquisites or excessive severance benefits | | Solicit an annual advisory vote on executive compensation | No executive pension plans or company contribution to supplemental retirement plans | | Maintain stock ownership guidelines | No dual class or non-voting stock |

  2. Incentive Program – Pay-for-Performance Highlights

    Incentive Program – Pay-for-Performance Highlights As described more fully in the "Executive Compensation — Compensation Discussion and Analysis" section of this proxy statement, our named executive officers are compensated in a manner consistent with our performance-based pay philosophy and corporate governance best practices.

  3. Incentive Program – Pay-for-Performance Highlights

    | TABLE OF CONTENTS | Page | | PROXY SUMMARY | 1 | | PROXY STATEMENT | 2 | | THE BOARD OF DIRECTORS | 5 | | CORPORATE GOVERNANCE GUIDELINES | 5 | | MEETINGS OF THE BOARD | 6 | | BOARD LEADERSHIP STRUCTURE | 6 | | BOARD OVERSIGHT OF RISK MANAGEMENT | 7 | | NOMINATING, GOVERNANCE, AND SUSTAINABILITY COMMITTEE'S OVERSIGHT OF SUSTAINABILITY MATTERS | 7 | | HUMAN CAPITAL, CULTURE AND DIVERSITY | 9 | | AUDIT COMMITTEE OVERSIGHT OF INFORMATION SECURITY | 11 | | COMMUNICATIONS FROM STOCKHOLDERS | 11 | | COMMITTEES OF THE BOARD | 11 | | REPORT OF AUDIT COMMITTEE | 13 | | DIRECTOR COMPENSATION | 14 | | CERTAIN TRANSACTIONS | 15 | | PROPOSAL ONE - ELECTION OF DIRECTORS | 16 | | PROPOSAL TWO - APPROVAL OF AMENDED AND RESTATED 2001 EMPLOYEE STOCK PURCHASE PLAN | 20 | | PROPOSAL THREE - APPROVAL OF AMENDED AND RESTATED 1994 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN | 24 | | PROPOSAL FOUR - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 27 | | PROPOSAL FIVE - APPROVAL OF EXECUTIVE COMPENSATION | 29 | | PROPOSAL SIX - APPROVAL OF FREQUENCY PERIOD OF ADVISORY COMPENSATION VOTE | 30 | | PROPOSAL SEVEN - STOCKHOLDER PROPOSAL REQUESTING THAT OUR BOARD OF DIRECTORS COMMISSION AN INDEPENDENT THIRD-PARTY REPORT, AT REASONABLE EXPENSE AND EXCLUDING PROPRIETARY INFORMATION, ON OUR DUE DILIGENCE PROCESS TO DETERMINE WHETHER OUR CUSTOMERS' USE OF OUR PRODUCTS CONTRIBUTE OR ARE LINKED TO VIOLATIONS OF INTERNATIONAL LAW | 31 | | SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS | 34 | | EXECUTIVE COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS | 36 | | OVERVIEW | 36 | | COMPENSATION POLICY AND OBJECTIVES | 36 | | EXECUTIVE COMPENSATION PROCESS | 36 | | ELEMENTS OF COMPENSATION | 38 | | STOCK OWNERSHIP GUIDELINES | 42 | | OTHER COMPENSATION AND EMPLOYEE BENEFITS | 42 | | NON-QUALIFIED DEFERRED COMPENSATION PLAN | 43 | | EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS | 43 | | TAX DEDUCTIBILITY AND CONCLUSION | 45 | | COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION | 45 | | CEO PAY RATIO DISCLOSURE | 46 |

  4. Incentive Program – Pay-for-Performance Highlights

    | TABLE OF CONTENTS | Page | | PAY VERSUS PERFORMANCE DISCLOSURE | 46 | | COMPENSATION OF NAMED EXECUTIVE OFFICERS | 51 | | SUMMARY COMPENSATION TABLE | 51 | | GRANTS OF PLAN-BASED AWARDS | 53 | | OUTSTANDING EQUITY AWARDS | 57 | | STOCK VESTED | 64 | | NON-QUALIFIED DEFERRED COMPENSATION | 64 | | EQUITY COMPENSATION PLAN INFORMATION | 66 | | CODE OF BUSINESS CONDUCT AND ETHICS | 67 | | OTHER MATTERS | 67 | | APPENDIX A | 69 | | APPENDIX B | 71 | | APPENDIX C | 78 |

  5. Director Compensation

    Director Compensation Procedures Regarding Director Compensation The Board sets non-employee director compensation. Microchip does not pay employee directors for services provided as a member of the Board of Directors. Our program of cash and equity compensation for non-employee directors is designed to achieve the following goals: compensation should fairly pay directors for work required for a company of Microchip's size and scope; compensation should align directors' interests with the long-term interests of stockholders; compensation should be competitive so as to attract and retain qualified non-employee directors; and the structure of the compensation should be simple, transparent and easy for stockholders to understand. Non-employee director compensation is typically reviewed once per year to assess whether any adjustment is needed to further such goals. The Board has not used outside consultants in setting non-employee director compensation. Director Fees During fiscal 2023, non-employee directors received an annual retainer of $83,000, paid in quarterly installments, and $3,000 for each meeting attended in person (or via video conference). Directors do not receive any additional compensation for telephonic meetings of the Board, for meetings of committees of the Board, or for serving as a committee chair. Effective April 1, 2023, the annual retainer was increased to $100,000, and directors will no longer receive any additional fees for attendance at each meeting. Equity Compensation During fiscal 2023, under the terms of our 2004 Equity Incentive Plan, on the date of our annual meeting of stockholders, each non-employee director is automatically granted that number of RSUs equal to $190,000 divided by the fair market value of a share of our common stock on the grant date, which RSUs shall vest in full on the earlier of (i) one day prior to the next annual meeting of stockholders, or (ii) one year from the date of grant. When a non-employee director is first appointed to the Board, the number of RSUs to be granted to such new director shall be pro-rated to reflect the portion of the year that the new director served on the Board. On April 6, 2023, the value of the RSU award for non-employee directors was increased to $200,000 and will be effective for the grant to be made on the date of our 2023 Annual Meeting. All vesting of the above grants is contingent upon the non-employee director maintaining his or her continued status as a non-employee director through the applicable vesting date. In accordance with the foregoing, on August 23, 2022, each of Mr. Chapman, Ms. Johnson, Mr. Johnson, Mr. Meyercord and Ms. Rapp were granted 2,748 RSUs, and Mr. Rango received an initial grant of 1,747 RSUs when he joined the Board on January 3, 2023. The following table details the total compensation for Microchip's non-employee directors for fiscal 2023:

  6. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  7. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Steve Sanghi (2) | — | — | — | — | — | — | | Ganesh Moorthy (2) | — | — | — | — | — | — | | Matthew W. Chapman | 95,000 | 186,672 | — | — | — | 281,672 | | Esther L. Johnson | 95,000 | 186,672 | — | — | — | 281,672 | | Karlton D. Johnson | 95,000 | 186,672 | — | — | — | 281,672 | | Wade F. Meyercord | 95,000 | 186,672 | — | — | — | 281,672 | | Robert A. Rango (3) | 23,750 | 118,254 | — | — | — | 142,004 | | Karen M. Rapp | 95,000 | 186,672 | — | — | — | 281,672 |

  8. DIRECTOR COMPENSATION

    (1)The award of 2,748 RSUs to each of the non-employee directors on August 23, 2022 (other than Mr. Rango) had a fair value on the grant date of $67.93 per share and a market value on the grant date of $69.12 per share with an aggregate market value of each award of approximately $190,000. (2)Mr. Sanghi and Mr. Moorthy are executive officers of Microchip and do not receive any additional compensation for their service on our Board. (3)The initial award of 1,747 RSUs to Mr. Rango on January 3, 2023 was prorated and had a fair value on the grant date of $67.69 per share, and a market value on the grant date of $69.10 per share, with an aggregate market value of approximately $120,000.

  9. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The Board currently consists of eight directors: Matthew W. Chapman, Esther L. Johnson, Karlton D. Johnson, Wade F. Meyercord, Ganesh Moorthy, Robert A. Rango, Karen M. Rapp and Steve Sanghi. Each of the current directors, other than Ms. Johnson, have been nominated for re-election to the Board at the annual meeting and each of the nominated directors has agreed to continue serving if re-elected. The Board plans to reduce the number of authorized directors from eight to seven immediately following the 2023 annual meeting. Ms. Johnson retired from the Board effective as of the date of the 2023 annual meeting. We would like to take this opportunity to thank Ms. Johnson for her years of service on our Board and for her many contributions to Microchip and its shareholders. Unless proxy cards are otherwise marked, the persons named in the proxy card will vote such proxy for the election of the nominees named below. If any of the nominees becomes unable or declines to serve as a director at the time of the annual meeting, the persons named in the proxy card will vote such proxy for any nominee designated by the current Board to fill the vacancy. We do not expect that any of the nominees will be unable or will decline to serve as a director. The Board and the Nominating, Governance, and Sustainability Committee have carefully considered the experience, structure, culture, diversity, operation, interactions, collaboration and performance of the current Board; the talents, expertise and contributions of individual directors; the growth and creation of stockholder value under the Board's leadership; the continued evolution of Microchip; the Board's role in continuing to develop and lead the strategic direction of Microchip; the continued change and consolidation in the semiconductor industry; anticipated future challenges and opportunities facing Microchip; and the Board's ongoing commitment to ensuring the long-term sustainability of Microchip to the benefit of its stockholders. Our Board has determined that each of the following nominees for director is an independent director as defined by applicable SEC rules and NASDAQ listing standards: Mr. Chapman, Mr. Johnson, Mr. Meyercord, Mr. Rango and Ms. Rapp. The term of office of each person who is elected as a director at the annual meeting will continue until the 2024 annual meeting of stockholders and until a successor has been elected and qualified.

  10. Board Diversity Matrix (As of June 30, 2023)*

    Board Diversity Matrix (As of June 30, 2023)*

  11. Board Diversity Matrix (As of June 30, 2023)*

    | Board Diversity | | | | | Female | Male | | Gender Identity | | | | Directors | 2 | 6 | | Demographic Background | | | | African American or Black | — | 1 | | Asian | — | 2 | | White | 2 | 3 | | Directors who are Military Veterans | — | 1 | | Total Number of Directors | 8 | |

  12. Board Diversity Matrix (As of June 30, 2023)*

    * To see our Board Diversity Matrix as of June 30, 2022, please see our proxy statement filed with the SEC on July 14, 2022. Based on these considerations, among others, the Board unanimously recommends that stockholders vote "FOR" the nominees listed below.

  13. Board Diversity Matrix (As of June 30, 2023)*

    | | Steve Sanghi transitioned to Executive Chair of our Board in March 2021. He served as Chief Executive Officer from October 1991 to March 2021 and as Chair of the Board since October 1993. He served as President from August 1990 to February 2016 and has served as a director since August 1990. Mr. Sanghi holds an M.S. degree in Electrical and Computer Engineering from the University of Massachusetts and a B.S. degree in Electronics and Communication from Punjab University. Mr. Sanghi was elected to the Board of Directors of Impinj, Inc. in March 2021 and was appointed as Board Chair in June 2022. Impinj, Inc. is a publicly traded company which offers a platform that wirelessly connects individual items and delivers data about the connected items to business and consumer applications. Mr. Sanghi served on the board of Mellanox Technologies Ltd., a publicly traded supplier of end-to-end Ethernet and InfiniBand intelligent interconnect solutions and services for servers, storage, and hyper-converged infrastructure, from February 2018 through April 2020. Mr. Sanghi has previously served on the boards of other publicly traded technology companies over the years. Mr. Sanghi is 67 years old as of June 30, 2023. |

  14. Board Diversity Matrix (As of June 30, 2023)*

    The Board concluded that Mr. Sanghi should be nominated to serve as a director since he previously served as Chief Executive Officer of Microchip for over 30 years and has provided very strong leadership to Microchip over this period. The Board believes that Mr. Sanghi's management skills and technology and industry experience have been instrumental to Microchip's extraordinary growth and profitability over the past 30 years and to the strong position Microchip has attained in its key markets. The Board believes that these skills make him well-suited to serve as the Chair of Microchip’s Board.

  15. Board Diversity Matrix (As of June 30, 2023)*

    | | Ganesh Moorthy was appointed as President and Chief Executive Officer in March 2021 and to the Board of Directors in January 2021. Mr. Moorthy served as President and Chief Operating Officer since February 2016, and Chief Operating Officer since June 2009. He also served as Executive Vice President from October 2006 to August 2012 and as a Vice President in various roles since he joined Microchip in 2001. Prior to this time, he served in various executive capacities with other semiconductor companies. Mr. Moorthy holds an M.B.A. in Marketing from National University, a B.S. degree in Electrical Engineering from the University of Washington and a B.S. degree in Physics from the University of Mumbai, India. Mr. Moorthy was elected to the Board of Directors of Rogers Corporation in July 2013 and serves on the Audit Committee and as the Nominating, Governance, and Sustainability Committee Chairperson of the Board of Directors of Rogers Corporation. He also represents Microchip on the Board of Directors of the Semiconductor Industry Association and the Global Semiconductor Association. Mr. Moorthy is 63 years old as of June 30, 2023. |

  16. Board Diversity Matrix (As of June 30, 2023)*

    The Board concluded that Mr. Moorthy should be nominated to serve as a director since he has served in leadership positions with Microchip for over 20 years and has provided very strong leadership to Microchip over this period. The Board believes that Mr. Moorthy's management skills and technology and industry experience have been instrumental to Microchip's extraordinary growth and profitability for many years and to the strong position Microchip has attained in its key markets.

  17. Board Diversity Matrix (As of June 30, 2023)*

    | | Matthew W. Chapman has served as a director of Microchip since May 1997. After serving for over 11 years, Mr. Chapman retired in February 2018 from his position as Chief Executive Officer of Northwest Evaluation Association, a not-for-profit education services organization providing computer adaptive testing for millions of students throughout the United States and in 140 other countries. In his career, Mr. Chapman has served as CEO and Chairman of Concentrex Incorporated, a publicly held company specializing in supplying software solutions and service to U.S. financial institutions. He holds a J.D. degree from the University of Oregon School of Law, and a B.S. degree in Economics from the University of Portland. Mr. Chapman is 72 years old as of June 30, 2023. |

  18. Board Diversity Matrix (As of June 30, 2023)*

    The Board concluded that Mr. Chapman should be nominated to serve as a director due to his significant CEO-level experience at several corporations. The Board also recognizes Mr. Chapman's experience in financial matters, management and public company governance. This background establishes him as an audit committee financial expert under applicable rules and makes him well-suited to serve as Chair of the Audit Committee of the Board.

  19. Board Diversity Matrix (As of June 30, 2023)*

    | | Karlton D. Johnson has served as a director of Microchip since April 2021. He is currently the Chief Executive Officer of DeLaine Strategy Group LLC, a strategic advisory practice providing counsel to C-suite leaders in the public, private, non-profit and government sectors. A decorated combat veteran, Mr. Johnson previously served as the Chief Information Officer (CIO) for the Multinational Security Transition Command-Iraq, and in his final posting, served with distinction as the Senior U.S. military executive/CIO and lead cyberspace expert adviser to the 4-star Commander at United States Forces-Korea, Seoul, Republic of Korea. In 2014, Mr. Johnson retired from U.S.A.F. Active Duty as a Colonel after 26 years of honorable service, and he has held senior leadership roles within the Fortune 500 marketplace. Additionally, he serves in senior leadership positions on other private boards, and he holds several Master’s Degrees and executive Graduate Certifications from various institutions to include George Washington University, National Defense University, West Virginia University, ISACA and the U.S. government. Mr. Johnson is 57 years old as of June 30, 2023. |

  20. Board Diversity Matrix (As of June 30, 2023)*

    The Board concluded that Mr. Johnson should be nominated to serve as a director due to his visionary leadership and subject matter expertise in strategic leadership and risk, partnership creation, organizational excellence, mission assurance, aerospace and defense industries, cybersecurity and enterprise communications technologies. The Board believes that Mr. Johnson's background makes him well-suited to serve on the Board's Audit Committee and the Compensation Committee.

  21. Board Diversity Matrix (As of June 30, 2023)*

    | | Wade F. Meyercord has served as a director of Microchip since June 1999, and as Lead Independent Director since June 2023. Since October 2002, he has served as President of Meyercord & Associates, Inc., a privately held management consulting firm specializing in executive compensation matters and stock plan consulting for technology companies, a position he previously held part time beginning in 1987. Mr. Meyercord served as a member of the Board of Directors of Endwave Corporation, a publicly held company, from March 2004 until it was acquired in 2011. Mr. Meyercord served as a member of the Board of Directors of California Micro Devices Corporation, a publicly held company, from January 1993 to October 2009, and Magma Design Automation, Inc., a publicly held company, from January 2004 to June 2005. He holds an M.B.A. degree in Engineering Administration from Syracuse University, and a B.S. degree in Mechanical Engineering from Purdue University. Mr. Meyercord is 82 years old as of June 30, 2023. |

  22. Board Diversity Matrix (As of June 30, 2023)*

    The Board concluded that Mr. Meyercord should be nominated to serve as a director due to his significant experience as a senior executive and board member of a number of companies in the technology industry. Mr. Meyercord gained further industry experience through his consulting practice. The Board believes that Mr. Meyercord's background makes him well-suited to serve on the Board's Nominating, Governance, and Sustainability Committee and as Chair of the Compensation Committee.

  23. Board Diversity Matrix (As of June 30, 2023)*

    | | Robert A. Rango has served as a director of Microchip since January 2023. From 2016 to 2022, Mr. Rango served as President and CEO of Enevate Corp., a privately held corporation that develops fast-charging and high-density battery technology for the electric vehicle market. Mr. Rango is currently a member of the Board of Directors of two other publicly traded companies: KLA Corporation and Keysight Technologies, Inc., and he was previously on the Board of Directors of Integrated Device Technologies, Inc. Prior to joining Enevate, Mr. Rango was Executive Vice President of Broadcom Corp.’s Mobile and Wireless Group, and held executive positions with AT&T Microelectronics, Lucent Technologies and Agere Systems. He holds an M.E. degree in Electrical Engineering from Cornell University and a B.E. degree in Electrical Engineering from State University of New York at Stony Brook. Mr. Rango is 65 years old as of June 30, 2023. |

  24. Board Diversity Matrix (As of June 30, 2023)*

    The Board concluded that Mr. Rango should be nominated to serve as a director due to his significant executive-level experience in the technology industry. The Board also recognizes the knowledge and experience Mr. Rango has gained through his service on the boards of various public companies. The Board believes that Mr. Rango’s management skills and technology and industry experience make him well-suited to serve on the Board’s Compensation Committee.

  25. Board Diversity Matrix (As of June 30, 2023)*

    | | Karen M. Rapp has served as a director of Microchip since January 2021. From 2017 through January 2023, she served as Chief Financial Officer of National Instruments Corporation ("NI"), a publicly traded company specializing in automated test and measurement systems. From January 2023 through May 2023, Ms. Rapp served as Strategic Advisor to the CEO of NI. Ms. Rapp served as Senior Vice President of Corporate Development of NXP Semiconductors N.V. ("NXP"), a Dutch global semiconductor manufacturer, after NXP acquired Freescale Semiconductor in December 2015. Ms. Rapp previously served in several positions at Freescale, including serving as Vice President and Chief Information Officer from April 2013 to December 2015 and as Director of Operations and Finance, Global Sales and Marketing from April 2010 to April 2013. Ms. Rapp holds a bachelor’s degree in Finance from Northern Illinois University, and an M.B.A. from the University of Texas at Austin. Ms. Rapp has served as a member of the Board of Directors and as a member of the Audit Committee and Compensation Committee at Plexus Corp. since March 2018. Ms. Rapp is 55 years old as of June 30, 2023. |

  26. Board Diversity Matrix (As of June 30, 2023)*

    The Board concluded that Ms. Rapp should be nominated to serve as a director due to her significant experience as a senior executive and board member of a number of companies in the technology industry. The Board believes that Ms. Rapp's background makes her well-suited to serve on the Board's Audit Committee and Chair of the Nominating, Governance, and Sustainability Committee. The Board also recognizes her experience in financial matters and that her background establishes her as an audit committee financial expert under applicable rules.

  27. DIRECTORS AND EXECUTIVE OFFICERS

    DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth information concerning the beneficial ownership of our common stock as of June 23, 2023 for: (a) each director and director nominee, (b) our CEO, our CFO and the three other most highly compensated executive officers named in the "Summary Compensation Table," (c) all directors and executive officers as a group, and (d) each person who is known to us to own beneficially more than 5% of our common stock. Except as otherwise indicated in the footnotes to this table, and subject to applicable community property laws and joint tenancies, the persons named in this table have sole voting and investment power with respect to all shares of common stock held by such person:

  28. DIRECTORS AND EXECUTIVE OFFICERS

    | Name and Address of Beneficial Owner | Number of Shares Beneficially Owned (1) | Percent of Common Stock (1) | | The Vanguard Group, Inc. (2) | 66,300,914 | 12.18 | | BlackRock, Inc. (3) | 43,244,463 | 7.94 | | Steve Sanghi (4) | 10,113,869 | 1.86 | | Ganesh Moorthy (5) | 778,562 | * | | Matthew W. Chapman (6) | 38,430 | * | | Wade F. Meyercord (7) | 30,817 | * | | Esther L. Johnson (6) | 25,502 | * | | Karen M. Rapp (6) | 6,154 | * | | Karlton D. Johnson (6) | 3,721 | * | | Robert A. Rango (8) | 1,747 | * | | Richard Simoncic (9) | 127,775 | * | | Stephen V. Drehobl (10) | 86,115 | * | | J. Eric Bjornholt (11) | 36,140 | * | | All directors and executive officers as a group (11 people) (12) | 11,248,832 | 2.07 |

  29. DIRECTORS AND EXECUTIVE OFFICERS

    * Represented less than 1% of the outstanding shares of common stock as of June 23, 2023. Our shares of common stock outstanding at June 23, 2023 were 544,333,965. (1)For each individual and group included in the table, the number of shares beneficially owned includes shares of common stock issuable to the identified individual or group pursuant to RSUs that will vest within 60 days of June 23, 2023. With respect to RSUs that will vest within 60 days of June 23, 2023, the full vesting amount of shares has been included in the table, however, the actual shares issued are expected to be lower as the shares actually issued will be net of taxes. In calculating the percentage of ownership of each individual or group, share amounts that are attributable to RSUs that vest within 60 days of June 23, 2023 are deemed to be outstanding for the purpose of calculating the percentage of shares of common stock owned by such individual or group, but are not deemed to be outstanding for the purpose of calculating the percentage of shares of common stock owned by any other individual or group. Unless otherwise indicated, the address for each stockholder listed is: c/o Microchip Technology Incorporated, 2355 West Chandler Boulevard, Chandler, Arizona 85224-6199. (2)Address is 100 Vanguard Boulevard, Malvern, PA 19355. All information is based solely on the Schedule 13G/A filed by The Vanguard Group, Inc. on February 9, 2023, with the exception of the percentage of common stock held which is based on shares outstanding at June 23, 2023. Such Schedule 13G/A indicates that The Vanguard Group, Inc. (i) has sole power to dispose of or direct the disposition of 64,010,455 shares of common stock and shared power to dispose of or direct the disposition of 2,290,459 shares of common stock; and (ii) has shared power to vote or direct the vote of 813,613 shares of common stock. (3)Address is 55 East 52nd Street, New York, NY 10055. All information is based solely on the Schedule 13G/A filed by BlackRock, Inc. on February 3, 2023, with the exception of the percentage of common stock held which is based on shares outstanding at June 23, 2023. Such Schedule 13G/A indicates that BlackRock, Inc. (i) has sole power to dispose of or direct the disposition of 43,244,463 shares of common stock; and (ii) has sole power to vote or direct the vote of 39,376,663 shares of common stock. (4)Includes 4,182,993 shares held of record by The Sanghi Trust (the "Sanghi Trust"), 5,905,872 shares held of record by The Sanghi Family Limited Partnership (the "Family Limited Partnership"), and includes an aggregate of 25,004 shares subject to RSUs that vest within 60 days of June 23, 2023. Steve Sanghi and Maria T. Sanghi are the sole trustees of the Sanghi Trust. The Sanghi Trust is the sole member of the Sanghi LLC which is the sole general partner of the Family Limited Partnership. (5)Includes 766,614 shares held of record by Ganesh Moorthy and Hema Moorthy as trustees, and includes an aggregate of 11,948 shares subject to RSUs that vest within 60 days of June 23, 2023. (7)Includes 28,069 shares held of record by Wade F. Meyercord and Phyllis Meyercord as trustees, and 2,748 shares subject to RSUs that vest within 60 days of June 23, 2023. (8)Includes an aggregate of 1,747 shares subject to RSUs that vest within 60 days of June 23, 2023. (9)Includes an aggregate of 124,005 shares held of record by Richard Simoncic and Melody Simoncic as trustees, and 3,770 RSUs that vest within 60 days of June 23, 2023. (10)Includes an aggregate of 5,656 shares subject to RSUs that vest within 60 days of June 23, 2023. (11)Includes 32,004 shares held of record by J. Eric Bjornholt as trustee, and includes an aggregate of 4,136 shares subject to RSUs that vest within 60 days of June 23, 2023. (12)Includes an aggregate of 66,001 RSUs that vest within 60 days of June 23, 2023.

  30. COMPENSATION DISCUSSION AND ANALYSIS

    At our last annual meeting of stockholders held in August 2022, our stockholders approved an advisory (non-binding) proposal concerning our executive compensation program with approximately 91.49% of the votes cast in favor of the proposal. The Compensation Committee considered the results of this vote in establishing the compensation program for fiscal 2024. Elements of Compensation Our executive compensation program is currently comprised of four major elements: •annual base salary, •incentive cash bonuses, •equity compensation, and •compensation and employee benefits generally available to all of our employees. The retirement benefits and other benefits offered to our executive officers are largely the same as those we provide to a broad base of employees. While our executive officers' level of participation in our management incentive compensation plans and equity incentive plans is typically higher than for our non-executive employees, based on the officers' level of responsibility and industry experience, the plans in which our executive officers are eligible to participate are very similar to those for many of our other employees. The Compensation Committee reviews each element of compensation separately and total compensation as a whole, other than those benefits which are available to all employees. The Compensation Committee determines the appropriate mix of elements to meet our compensation objectives and to help ensure that we remain competitive with the compensation practices in our industry and market. Although our executive officers are entitled to certain severance and change of control benefits (as described below), the Compensation Committee does not consider such benefits to be elements of compensation for purposes of annual compensation reviews because such benefits may never be paid. Base Salaries. When setting base salaries, we review the business and financial objectives for Microchip as a whole, as well as the objectives for each of the individual executive officers relative to their respective areas of responsibility. In particular, we consider our overall level of net sales and demand and the level of net sales and demand in our strategic business units, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income per diluted share, cash flow from operating activities, expected capital expenditures and other financial considerations in setting our budgets for salaries. We also consider the individual performance of our named executive officers including the officer's level of responsibility, performance, overall contribution to the results of the organization, the officer's base salary relative to the salaries of our other officers, salary relative to comparable positions in the industry and market, the officer's overall compensation including incentive cash bonuses and equity compensation and the officer's performance relative to expectations. We do not assign any specific weight to any such factor but consider such factors as a whole for each executive. This review encompasses the objectives for both the immediately preceding fiscal year and the upcoming fiscal year. Based on the foregoing, effective April 4, 2022, the base salary of our CEO, Mr. Moorthy was increased by 10% to $641,845. There was no change in the base salary of our Executive Chair, Mr. Sanghi from fiscal 2022 to fiscal 2023. Effective April 4, 2022, the base salaries of our other executive officers were increased from 6.0% to 10.0%. Incentive Cash Bonuses. The Compensation Committee sets performance goals which, if met, result in quarterly payments to our executive officers under the MICP. The Compensation Committee establishes performance goals which it believes are challenging, require a high level of performance and motivate participants to drive stockholder value, but which goals are expected to be achievable in the context of business conditions anticipated at the time the goals are set. When setting the performance goals, the Compensation Committee places more emphasis on the overall expected financial performance of Microchip rather than on the achievement of any one individual goal. The Compensation Committee believes that this focus on the overall payout incentivizes outstanding performance across the corporation and drives the overall financial success of the corporation. In addition to the performance metrics in the MICP, there is a discretionary component which the Compensation Committee uses to help achieve the overall objectives of the program. A portion of the discretionary component of the MICP is tied to the amount of progress achieved on our annual ESG operating plan goals. The performance metrics under the MICP are determined by the Compensation Committee at the beginning of each quarter and may be based on GAAP financial results, non-GAAP financial results or other metrics at the discretion of the Compensation Committee. For fiscal 2023, certain of our performance metrics under the MICP such as those based on gross profit as a percentage of net sales, operating expenses as a percentage of net sales, operating income as a percentage of net sales and diluted net income per common share were based on non-GAAP financial results which are adjusted, as applicable, for the effect of share-based compensation, expenses related to our acquisition activities (including intangible asset amortization, severance, and other restructuring costs, and legal and other general and administrative expenses associated with acquisitions including legal fees and expenses for litigation and investigations related to our Microsemi acquisition), professional services associated with certain legal matters and losses on the settlement of debt. Each of the performance metrics is reviewed each quarter but may be the same for multiple quarters. The Non-GAAP diluted net income per common share metric changes each quarter. The tables below set forth the target performance metrics under the MICP for each quarter of fiscal 2023 and our actual performance with respect to such metrics for such periods.

  31. COMPENSATION DISCUSSION AND ANALYSIS

    | Performance Metric (1) | Actual Results | | | | | | | | | | Q1 FY23 | | Q2 FY23 | | Q3 FY23 | | Q4 FY23 | | | | Actual | Bonus Payout % | Actual | Bonus Payout % | Actual | Bonus Payout % | Actual | Bonus Payout % | | Sequential net sales growth | 6.47% | 53.13% | 5.58% | 47.20% | 4.63% | 40.87% | 2.93% | 29.53% | | Non-GAAP gross profit percentage | 67.10% | 28.50% | 67.74% | 30.90% | 68.12% | 28.58% | 68.32% | 29.33% | | Non-GAAP operating expenses as a percentage of net sales | 21.52% | 24.91% | 20.89% | 28.04% | 20.65% | 26.74% | 20.67% | 26.65% | | Non-GAAP operating income as a percentage of net sales | 45.58% | 28.95% | 46.85% | 32.13% | 47.47% | 29.93% | 47.65% | 30.38% | | Non-GAAP diluted net income per common share | $1.37 | 16.96% | $1.46 | 16.30% | $1.56 | 15.32% | $1.64 | 16.15% | | Discretionary (non-ESG) | N/A | 117.55% | N/A | 140.43% | N/A | 153.56% | N/A | 162.96% | | Discretionary based on ESG goals | N/A | 5.00% | N/A | 5.00% | N/A | 5.00% | N/A | 5.00% | | MICP Total | N/A | 275.00% | N/A | 300.00% | N/A | 300.00% | N/A | 300.00% |

  32. COMPENSATION DISCUSSION AND ANALYSIS

    (1)During fiscal 2023, all of the elements of our internal performance and executive and employee compensation metrics were based on net sales and non-GAAP operating results. The total amount payable to each executive under the MICP is based on a percentage of the executive's base salary at the beginning of the quarter. The participation percentage for each executive is determined at the beginning of the fiscal year based on the executive's base salary at that time and typically stays at the same level for each quarter of the fiscal year. However, the Compensation Committee may change the participation level of an executive each quarter to reflect changes in the performance or responsibilities of the executive or other factors. The dollar amount of the target bonus for each executive is based on assumed achievement of all performance metrics under the MICP (as disclosed in the tables above) and payment of 20% under the discretionary component of the MICP (as disclosed in the tables above). The aggregate budgeted bonus pool under the various management incentive compensation plans is calculated by multiplying each eligible executive officer's bonus target percentage by the executive's base salary. The actual awards under the MICP are based on our actual quarterly financial performance compared to the performance metrics (or such lesser amount as determined in the discretion of our Compensation Committee) and the amount of the discretionary component under the MICP is determined in the discretion of our Compensation Committee (which can be significantly higher or lower than the 20% target). For example, due to our strong financial results, the Compensation Committee approved a discretionary amount significantly above the 20% target for each quarter of fiscal 2023. The actual awards are calculated by multiplying the overall award percentage payout for the quarter by the applicable percentage of the executive's salary at the end of the fiscal quarter that the award relates to. Thus, if an executive's salary or participation percentage changes during the year, up or down, this would affect the executive's actual bonus payment during the fiscal year. For fiscal 2023, the specific total bonus percentages under the MICP for each of our named executive officers were as follows: for Mr. Moorthy it was 150% of his salary; for Mr. Sanghi it was 120% of his salary; for Mr. Drehobl it was 46% of his salary; for Mr. Simoncic it was 46% of his salary; and for Mr. Bjornholt it was 41% of his salary. The bonus percentage for our CEO, Mr. Moorthy increased from 125% of his base salary to 150% of his base salary in fiscal 2023 compared to fiscal 2022. There was no change in the bonus percentage for our Executive Chair, Mr. Sanghi from fiscal 2022 to fiscal 2023. The bonus percentages for our executives, other than our Executive Chair and our CEO, increased from 0 to 4 percentage points for fiscal 2023 compared to fiscal 2022. As indicated in the above table, for the first quarter of fiscal 2023, 20% of the quarterly MICP target was based on Microchip achieving sequential net sales growth of 1.5%. Accordingly, if Microchip's sequential net sales growth for the first quarter was 1.5%, then each executive would be paid the corresponding 20% of the MICP target bonus amount for that quarter. The net sales performance metric doubles if growth exceeds the 1.5% target by 3 percentage points, which would require 4.5% sales growth. The net sales performance metric goes to zero if growth is below the 1.5% target by 3 percentage points, which would require -1.5% sales growth. If Microchip's sequential net sales growth for the first quarter was 0.75%, then each executive would be paid a corresponding 15% of the target bonus amount for that quarter and if Microchip's sequential net sales growth for the first quarter was 3%, then each executive would be paid a corresponding 30.0% of the target bonus amount for that quarter. A similar methodology with a different set of ranges is applied each quarter to each of the performance metrics listed in the above table. As set forth in the above tables and the footnotes to the tables, during fiscal 2023, our CEO and our other executive officers received cash bonuses under the MICP. Applying the award percentages to each named executive officer's participation level in the plans, for fiscal 2023, the total bonus payments under the MICP for our named executive officers, other than Mr. Moorthy, ranged from $378,797 to $1,704,538. In fiscal 2023, Mr. Moorthy earned an aggregate MICP bonus payment of $2,828,128. Please see footnote 4 to the "Summary Compensation Table" on page 51 of this Proxy Statement which sets forth the actual amount of the MICP awards for each named executive officer for fiscal 2023. The differences in the levels of compensation under these programs for the various executive officers are based upon their relative contribution, performance, experience, and responsibility level within the organization. Equity Compensation. Equity compensation, such as RSUs, constitutes a significant portion of our incentive compensation program because we believe that executive officers and key employees should hold a long-term equity stake in Microchip to align their interests with the interests of our stockholders. Accordingly, in fiscal 2023, equity grants in the form of RSUs were a significant portion of our executive officers' total compensation package. We typically make equity compensation grants to executive officers and key employees in connection with their initial employment, and we also typically make quarterly evergreen grants of equity to incentivize employees on a continuing basis as their initial equity awards vest. In setting the amount of the equity compensation grants, the estimated value of the grants is considered, as well as the intrinsic value of the outstanding equity compensation held by the executive officer. In setting these amounts and any performance goals, the Compensation Committee uses its judgment after considering the effect of the overall RSU amounts and the percentage of RSUs granted to executive officers in connection with the overall financial results and performance of Microchip. Beginning with the evergreen grants of RSUs for the fourth quarter of fiscal 2020, 50% of the evergreen awards were subject to performance vesting based on the relative total shareholder return of our common stock compared to a peer group of twenty companies over a two or three-year period. In October 2021, the Compensation Committee changed the performance vesting to be based on our non-GAAP operating income as a percentage of net sales over a period of twelve quarters. The performance goal was used with respect to 50% of the evergreen RSU grants ("PSUs") and the other 50% of the RSU grants are subject to time-based vesting and will only vest subject to the continued service of the officer on the vesting date which is approximately four years from the grant date. Under this performance-based criteria, Mr. Moorthy was granted 51,042 PSUs and our other executive offers were granted from 12,408 PSUs to 37,338 PSUs for fiscal 2023, and each executive was also granted time-based RSUs in an amount equal to the number of PSUs granted to such executive. Grants of RSUs in fiscal 2023 typically were scheduled to vest approximately four years from the grant date. RSUs do not have a purchase price and therefore have immediate value to recipients upon vesting. On March 31, 2023, approximately 65% of our employees worldwide were eligible to receive RSUs under our 2004 Equity Incentive Plan. For more than ten years, RSUs have been the principal equity compensation vehicle for Microchip executive officers and key employees. Grants of RSUs may also be made in connection with promotions, other changes in responsibilities or in recognition of other individual or Microchip developments or achievements.

  33. COMPENSATION DISCUSSION AND ANALYSIS

    In granting equity compensation awards to executive officers, we consider numerous factors, including: •the individual's position, experience, and responsibilities, •the individual's future potential to influence our mid- and long-term growth, •the vesting schedule of the awards, and •the number and value of awards previously granted. We do not separately target the equity element of our executive officer compensation programs at a specific percentage of overall compensation. However, overall total compensation is structured to be competitive so that we can attract and retain executive officers. In setting equity award levels, we also take into consideration the impact of the equity-based awards on the dilution of our stockholders' ownership interests in our common stock. As a result of Microchip’s share repurchase program activity in fiscal 2023, the impact of ownership dilution from equity-based awards was more than offset by the number of shares of common stock repurchased. The Compensation Committee grants RSUs to executive officers and current employees on a quarterly basis in an attempt to more evenly record stock-based compensation expense. Grants of RSUs to new employees (other than executives) are made once per month by the Employee Committee at a meeting of such committee. The Employee Committee was appointed by our Board and our Compensation Committee and is comprised of our Executive Chair, our President and CEO, and our Senior Vice President of Global Human Resources. Grants of RSUs to any new executive officer would be made at the first meeting of the Compensation Committee following the election of such officer. Microchip does not have any program, plan or practice to time grants of RSUs in coordination with the release of material non-public information. Microchip does not time, nor do we plan to time, the release of material non-public information for the purposes of affecting the value of executive compensation. See the table under "Grants of Plan-Based Awards for Fiscal Year Ended March 31, 2023" at page 53 for information regarding RSUs granted during fiscal 2023 to our named executive officers. Stock Ownership Guidelines for Key Employees and Directors. To help ensure alignment of the interests of our management and Board with those of our stockholders, we have put in place a stock holding policy that applies to each member of our management and Board. This policy was proposed by our Nominating, Governance, and Sustainability Committee and ratified by our Board in October 2003 and was amended in March 2022. The table below summarizes the specified minimum level of ownership of our stock, in an amount at least equal to the lower of the dollar value or minimum number of shares, that our directors and executive officers must hold during their tenure in their respective office or position. They must meet the ownership threshold ratably over the first four years of their appointment or promotion, and then maintain this ownership threshold for the remainder of their tenure in the position. During fiscal 2023, all of our executive officers and directors were in compliance with the terms of the policy.

  34. COMPENSATION DISCUSSION AND ANALYSIS

    Microchip's insider trading policy prohibits executive officers from speculating in Microchip stock, which includes a prohibition on short selling, buying and selling options (including writing covered calls) or hedging or any type of arrangement that has a similar economic effect. For more information on our minimum stock ownership and insider trading policies, please see https://www.microchip.com/en-us/about/investors/investor-information/mission-statement. Other Compensation and Employee Benefits Generally Available to All Employees. We maintain compensation and employee benefits that are generally available to all Microchip employees, including: •our employee stock purchase plans, •medical, dental, vision, employee assistance program, flexible spending, and disability insurance, •life insurance benefits, •a 401(k) retirement savings plan, •an employee cash bonus plan, and •vacation and paid time off. Since these programs are generally available to all employees, these forms of compensation are not independently evaluated by the Compensation Committee in connection with the determination of executive officer compensation. Employee Stock Purchase Plans. Our 2001 Employee Stock Purchase Plan is a Section 423 qualified employee stock purchase plan that allows all U.S. employees the opportunity to purchase our common stock through payroll deductions at 85% of the fair market value at the lower of the price as of the opening of the two-year offering period, or at the end of any six-month purchase period. A significant portion of our international employees have the ability to participate in our 1994 International Employee Stock Purchase Plan that allows them the opportunity to purchase our common stock through payroll deductions at 85% of the fair market value at the lower of the price as of the opening or the end of any six-month offering period. Medical, Dental, Vision, Employee Assistance Program, Flexible Spending, Disability Insurance and Accidental Death and Dismemberment. We make medical, dental, vision, employee assistance program, flexible spending, and disability insurance generally available to all of our employees through our active benefit plans. Under these generally available plans, our named executive officers are eligible to receive between $1,000 and $10,000 per month in long-term disability coverage depending on which plan they elect. Short-term disability coverage is provided which allows for 100% of base salary to be paid for six months in the event of disability. Accidental death and dismemberment insurance, which is generally available to our U.S. employees, is provided by Microchip to our executives with a benefit of one times the executive's annual salary. Since all of our U.S. employees participate in these plans on a non-discriminatory basis, the value of these benefits to our named executive officers is not required to be included in the "Summary Compensation Table" on page 51 pursuant to SEC rules and regulations. Life Insurance. In fiscal 2023, we provided life insurance coverage to our named executive officers in the amount up to one and a half times the executive's annual salary (up to a maximum of $500,000). The named executive officers may purchase supplemental life insurance at their own expense. 401(k). We maintain a 401(k) plan for the benefit of all of our U.S. employees to allow our employees to save for retirement. We contribute to our 401(k) plan each year based on our profitability during the year, subject to maximum contributions and other rules prescribed by federal law governing such plans. Our named executive officers are permitted to participate in the plans to the same extent as our other U.S. employees. Our Compensation Committee approved discretionary matching contributions for each quarter of fiscal 2023 equal to $0.75 for each dollar contributed by the employee for the first 6% of their salary contributions. Employee Cash Bonus Plan. All of our employees worldwide participate in our Employee Cash Bonus Plan ("ECBP"). The ECBP is a discretionary bonus plan designed to allow our full-time employees, not just our executive officers, to share in the success of the company. The target bonus under the ECBP is 2.5 days of base salary per quarter, or on an annual basis, two weeks of annual base salary which may be granted by the Compensation Committee if certain Microchip operating profitability objectives are achieved. Under the ECBP, the Compensation Committee can set the eligibility requirements and targets and has discretion to pay more or less than the stated target. Other eligibility terms also apply, such as an attendance requirement and a performance requirement. The payout under the ECBP is approved by the Compensation Committee based on our actual quarterly operating results. For the first, second, third and fourth quarters of fiscal 2023, bonus awards were paid out to executives and other employees who participate in such plan at 275%, 300%, 300% and 300% of target, respectively. The level of payments under the ECBP for each quarter of fiscal 2023 reflects Microchip’s strong financial results for such periods. For each such quarter, an additional award was paid out to selected employees on a discretionary basis based on performance achievements by such employees during the quarter. Under the ECBP, for fiscal 2023, our named executive officers other than our CEO received total payments ranging from $36,894 to $54,633 and, Mr. Moorthy received $75,599. Vacation and Paid Time-Off Benefits. We provide vacation and other paid holidays to all of our employees, including our named executive officers. We believe our vacation and holidays are comparable to others in the industry. Non-Qualified Deferred Compensation Plan. We maintain a non-qualified deferred compensation plan for certain employees, including our named executive officers, who receive compensation in excess of the 401(k) contribution limits imposed under the Internal Revenue Code and desire to defer more compensation than they would otherwise be permitted under a tax-qualified retirement plan, such as our 401(k) plan. Microchip does not make contributions to this non-qualified deferred compensation plan. This plan allows our executive officers to make pre-tax contributions to this plan which would be fully taxed to the executive officers after the executive officer's termination of employment with Microchip. We do not have pension plans or other retirement plans for our named executive officers or our other U.S. employees. Employment Contracts, Termination of Employment and Change of Control Arrangements. We do not have employment contracts with our Executive Chair, CEO, CFO or any of our executive officers, nor agreements to pay severance on involuntary termination (other than as stated in the change of control agreements described below) or upon retirement. Our CEO, our Executive Chair, our CFO, and our other executive officers have entered into change of control agreements with us.

  35. COMPENSATION DISCUSSION AND ANALYSIS

    The change of control agreements were designed to help ensure the continued services of our key executive officers in the event that a change of control of the company is effected, and to assist our key executive officers in transitioning from Microchip if, as a result of a change of control, they lose their positions. We believe that the benefits provided by these agreements help to ensure that our management team will be incentivized to remain employed with Microchip during a change of control. Capitalized terms used herein and not defined shall have the meanings set forth in the change of control agreements. Additionally, our 2004 Equity Incentive Plan has a change of control provision which provides that any successor company shall assume each outstanding award or provide an equivalent substitute award; however, if the successor fails to do so, vesting of awards shall accelerate. The Compensation Committee considered prevalent market practices in determining the severance amounts and the basis for selecting the events triggering payment in the agreements. With respect to our Executive Chair and CFO, if the executive officer's employment terminates for reasons other than Cause within the Change of Control Period, the executive officer will be entitled to receive severance benefits consisting of the following primary components: •a one-time payment of the executive's base salary in effect immediately prior to the Change of Control or termination date, whichever is greater, for the following periods: (1) in the case of the Executive Chair, two years; (2) in the case of the CFO, one year; •a one-time payment of the executive's bonuses for which the executive was or would have been eligible in the year in which the Change of Control occurred or for the year in which termination occurred, whichever is greater, for the following periods: (1) in the case of the Executive Chair, two years; (2) in the case of the CFO, one year; •a continuation of medical and dental benefits (subject to any required employee contributions) for the following periods: (1) in the case of the Executive Chair, two years; (2) in the case of the CFO, one year; provided in each case that such benefits would cease sooner if and when the executive officer becomes covered by the plans of another employer; and •a payment to cover any excise tax that may be due under Section 4999 of the Code, if the payments provided for in the change of control agreement constitute "parachute payments" under Section 280G of the Code and the value of such payments is more than three times the executive officer's "base amount" as defined by Section 280G(b)(3) of the Code. With respect to our Executive Chair and the CFO, immediately prior to a Change of Control (regardless of whether the executive officer's employment terminates), all equity compensation held by the executive officer shall become fully vested. With respect to our executive officers other than the Executive Chair and the CFO, if the executive officer terminates his or her employment for Good Reason, or the executive's employment is terminated for reasons other than Cause within the Change of Control Period, the executive officer will be entitled to receive severance benefits consisting of the following primary components: •a one-time payment of the executive's base salary in effect immediately prior to the Change of Control or termination date, whichever is greater, for one year; •a one-time payment of the bonuses for which the executive was or would have been eligible in the year in which the Change of Control occurred or for the year in which termination occurred, whichever is greater, for one year; •a continuation of medical and dental benefits (subject to any required employee contributions) for one year (provided in each case that such benefits would cease sooner if and when the executive officer becomes covered by the plans of another employer); and •a payment to cover any excise tax that may be due under Section 4999 of the Code, if the payments provided for in the change of control agreement constitute "parachute payments" under Section 280G of the Code and the value of such payments is more than three times the executive officer's "base amount" as defined by Section 280G(b)(3) of the Code. With respect to our executive officers other than the Executive Chair and CFO, immediately upon termination during the Change of Control Period other than for Cause, all equity compensation held by the executive officer shall become fully vested. The following table sets forth the aggregate dollar value of payments, to the extent calculable, in the event of a termination of a named executive officer on March 31, 2023, the last business day of our last completed fiscal year.

  36. COMPENSATION DISCUSSION AND ANALYSIS

    | Name | Salary $ | Bonus $ | Equity Compensation Due to Accelerated Vesting $(1) | Tax Gross-up on Change of Control $(2) | Continuation of Certain Benefits (3) | | Ganesh Moorthy, CEO and President (4) | 641,845 | 987,454 | 31,562,457 | — | 1 year | | Steve Sanghi, Executive Chair (5) | 967,114 | 1,197,734 | 27,763,360 | — | 2 years | | Stephen V. Drehobl, Senior VP, MCU8 and MCU16 Business Units (4) | 334,036 | 166,505 | 10,715,909 | — | 1 year | | Richard Simoncic, Executive VP, Analog Power and Interface Business Unit (4) | 319,225 | 159,122 | 7,860,647 | — | 1 year | | J. Eric Bjornholt, Senior VP and CFO (4) | 314,518 | 141,049 | 8,438,977 | — | 1 year |

  37. COMPENSATION DISCUSSION AND ANALYSIS

    (1)Value represents the gain that our named executive officers would receive, calculated as the amount of unvested RSUs and PSUs multiplied by our stock price on March 31, 2023. (2)This payment covers any excise tax that may be payable under Section 4999 of the Code if the payments provided for under the change of control agreement constitute "parachute payments" under Section 280G of the Code and the value of the payments is more than three times the executive officer's "base amount" as defined by Section 280G(b)(3) of the Code. (3)Benefits continued under the change of control agreements are limited to company-paid medical, dental, vision and life insurance coverage at the same level of coverage the executive was provided immediately prior to termination of employment with Microchip. Amounts are not determinable at this time and are dependent on each executive officer's individual circumstances. (4)The change of control payment includes an amount equal to one times the annual salary of the executive plus a bonus equal to the targeted annual amounts payable to such executive under our MICP and our ECBP. (5)The change of control payment includes an amount equal to two times the annual salary of the executive plus a bonus equal to two times the targeted annual amount payable to such executive under our MICP and our ECBP. Performance-Based Compensation and Financial Restatement To date, Microchip has not experienced a financial restatement and has not considered or implemented a policy regarding retroactive adjustments to any cash or equity-based incentive compensation paid to its executive officers and other employees where such payments were predicated upon the achievement of certain financial results that would subsequently be the subject of a restatement. Tax Deductibility The Internal Revenue Code disallows a corporate income tax deduction for executive compensation in excess of $1.0 million paid to certain of our named executive officers. To maintain flexibility in compensating Microchip's executive officers in a manner designed to promote varying corporate goals, it is not the policy of the Compensation Committee that executive compensation must be tax deductible. We intend to review the deductibility of executive officer compensation from time to time to determine whether any actions are advisable to obtain deductibility. Conclusion We believe that our executive team provided outstanding service to Microchip in fiscal 2023. We will work to assure that the executive compensation programs continue to meet Microchip's strategic goals as well as the overall objectives of the compensation program.

  38. CEO PAY RATIO DISCLOSURE

    CEO PAY RATIO DISCLOSURE As required by Section 953(b) of the Dodd-Frank Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our "median employee" and that of our CEO, Ganesh Moorthy. We believe the pay ratio information provided below is a reasonable estimate calculated in a manner consistent with the pay ratio disclosure rules. However, because the SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, exemptions, estimates and assumptions, this pay ratio disclosure may not be comparable to the pay ratio reported by other companies. We are a global company with more than 69% of our employees located outside the U.S. and we have significant manufacturing operations. As a result, our employee population is different than that of many other companies. Our median employee works in the U.S. as a full-time Production Specialist, which is a non-technology position. As of fiscal year-end, we had 22,600 worldwide employees, and approximately 92% of our U.S. employees' total direct compensation exceeded our median employee's total direct compensation. For fiscal 2023, our last completed fiscal year: •The annual total compensation of our CEO, as reported in the "Summary Compensation Table" presented on page 51 of this proxy statement, was $12,276,315. •The estimated median of the annual total compensation of all our worldwide employees, excluding our CEO, was $51,229. The ratio of the annual total compensation of our CEO to the median of the annual total compensation of worldwide employees was 240 to 1. •The estimated median of the annual total compensation of all our U.S. based employees, excluding our CEO, was $107,676. The ratio of the annual total compensation of our CEO to the median of the annual total compensation of U.S.-based employees was 114 to 1. To identify the median of the annual total compensation of all of our worldwide employees, as well as to determine the annual total compensation of the "worldwide median employee," the methodology and the material assumptions, adjustments, and estimates that we used were as follows: •We selected January 1, 2023 as the date upon which we identified the median employee. We compiled a list of all full-time, part-time, temporary and seasonal employees who were employed on that date, including employees working both within and outside of the U.S. •We identified the "worldwide median employee" by taking all employees on this list (including international employees, but excluding the CEO), and ranking them based on a consistently applied compensation measure that incorporated the adjusted gross wages paid over the twelve-month period preceding the determination date (including the grant date value of equity, as opposed to realized equity values). We converted pay for international employees to U.S. Dollars using the exchange rates on January 1, 2023, and we annualized the pay for full and part time employees who were hired during the period. •After identifying a representative "worldwide median employee," we identified and calculated the elements of such employee's compensation for fiscal 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. •With respect to the annual total compensation for our CEO, we used the amount reported in the "Total" column of our 2023 "Summary Compensation Table." To identify the median of the annual total compensation of our employees located within the U.S., as well as to determine the annual total compensation of the "U.S.-based median employee," we followed the same methodology outlined above.

  39. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE This disclosure has been prepared in accordance with the SEC’s pay versus performance rules in Item 402(v) of Regulation S-K under the Securities Exchange Act of 1934, as amended, and does not necessarily reflect the value of compensation actually realized by the named executive officers (NEOs) or how the Compensation Committee evaluates compensation decisions. Amounts included as "compensation actually paid" do not represent the value of cash compensation and equity awards actually received by the NEOs, but rather is an amount calculated under SEC rules that includes, among other things, the year-over-year changes in the "fair value" of unvested equity-based awards. For a discussion of how the Compensation Committee seeks to align pay with performance when making compensation decisions, please review the Compensation Discussion and Analysis beginning on page 36. The following table shows the information for the past three fiscal years of: (i) the Summary Compensation Table total compensation (see page 51) for our principal executive officer(s) (PEOs) and, on an average basis, our Non-PEO NEOs, (ii) the "compensation actually paid" to our PEO(s) and, on an average basis, our Non-PEO NEOs (in each case, as determined in accordance with SEC rules), (iii) our total shareholder return, (iv) our peer group total shareholder return, (v) our net income, and (vi) our non-GAAP operating income.

  40. PAY VERSUS PERFORMANCE

    | Pay Versus Performance Table | | | | | | | | | | | | Year | Summary Compensation Table Total | | | Compensation Actually Paid (1)(2) | | | Value of initial fixed $100 investment based on: | | GAAP Net income (in millions) $ | Non-GAAP Operating Income (in millions) $(7)* | | | PEO Ganesh Moorthy $(3)(4) | PEO Steve Sanghi $(3) | Non-PEO NEOs $(3) | PEO Ganesh Moorthy $(3)(4) | PEO Steve Sanghi $(3) | Non-PEO NEOs $(3) | TSR $(5) | Peer group TSR $(6) | | | | 2023 | 12,276,315 | | 4,470,204 | 18,075,158 | | 6,952,662 | 257.73 | 223.07 | 2,237.7 | 3,959.8 | | 2022 | 12,759,667 | | 3,861,570 | 9,925,324 | | 1,781,606 | 227.23 | 233.18 | 1,285.5 | 2,965.3 | | 2021 | 3,891,467 | 9,289,912 | 1,565,347 | 17,506,955 | 38,326,571 | 6,600,301 | 231.89 | 209.98 | 349.4 | 2,154.1 |

  41. PAY VERSUS PERFORMANCE

    * Refer to the reconciliation of these non-GAAP operating results to the comparable GAAP financial measure in Appendix A beginning on page 69 of this proxy statement. (1)The dollar amounts reported represent the amount of "compensation actually paid," as calculated in accordance with SEC rules. The dollar amounts do not reflect the actual amounts of compensation paid to our executives during the applicable year. In accordance with SEC rules, certain adjustments were made to the "Summary Compensation Table" total compensation to determine the amount of "compensation actually paid," including adding (i) the year-end fair value of equity awards granted during the reported year, and (ii) the change in the fair value of equity awards that were unvested at the end of the prior year, measured through the date the awards vested or were forfeited, or through the end of the reported fiscal year. For purposes of calculating "compensation actually paid," the fair value of equity awards is calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC Topic 718) using the same assumption methodologies used to calculate the grant date fair value of awards for purposes of the "Summary Compensation Table" (see page 51 for additional information). (2)The following table shows the adjustments to the Summary Compensation Table total compensation to arrive at the Compensation Actually Paid to our PEO(s) and the average Compensation Actually Paid to our Non-PEO NEOs for each of the required fiscal years.

  42. PAY VERSUS PERFORMANCE

    | Adjustments to Reported Summary Compensation Table Total for PEO and Non-PEO Named Executive Officers | 2023 | | 2022 | | 2021 | | | | | PEO Ganesh Moorthy $ | Non-PEO NEOs $ | PEO Ganesh Moorthy $ | Non-PEO NEOs $ | PEO Steve Sanghi $ | PEO Ganesh Moorthy $ | Non-PEO NEOs $ | | Summary Compensation Table Total | 12,276,315 | 4,470,204 | 12,759,667 | 3,861,570 | 9,289,912 | 3,891,467 | 1,565,347 | | Grant date fair value of equity awards reported in summary compensation table | (8,714,501) | (3,305,357) | (10,538,056) | (2,951,513) | (7,384,078) | (3,170,379) | (1,200,869) | | Year-end fair value of awards granted during the year which were unvested at year-end | 11,547,993 | 4,376,401 | 10,038,862 | 2,754,243 | 11,009,092 | 4,747,577 | 1,798,949 | | Year-over-year change in fair value of outstanding and unvested awards | 2,933,878 | 1,389,363 | (1,396,136) | (1,126,361) | 19,162,790 | 9,156,007 | 3,365,905 | | Year-over-year change in fair value of awards granted in prior years which vested during the year | 122,240 | 95,375 | (83,697) | (67,011) | 6,248,855 | 2,882,283 | 1,070,969 | | Value as of prior year-end for awards forfeited during the year | (90,767) | (73,324) | (855,316) | (689,322) | — | — | — | | Total Adjustments | 5,798,843 | 2,482,458 | (2,834,343) | (2,079,964) | 29,036,659 | 13,615,488 | 5,034,954 | | Compensation Actually Paid | 18,075,158 | 6,952,662 | 9,925,324 | 1,781,606 | 38,326,571 | 17,506,955 | 6,600,301 |

  43. PAY VERSUS PERFORMANCE

    (3)The following table shows the PEO(s) and Non-PEO NEOs for each of fiscal 2023, 2022 and 2021:

  44. PAY VERSUS PERFORMANCE

    | Year | PEO(s) | Non-PEO NEOs | | 2023 | Ganesh Moorthy | Steve Sanghi, Eric Bjornholt, Steve Drehobl and Richard Simoncic | | 2022 | Ganesh Moorthy | Steve Sanghi, Eric Bjornholt, Steve Drehobl and Richard Simoncic | | 2021 | Steve Sanghi; Ganesh Moorthy (4) | Eric Bjornholt, Steve Drehobl and Richard Simoncic |

  45. PAY VERSUS PERFORMANCE

    (4)Effective March 1, 2021, Mr. Sanghi transitioned from PEO and Chair of the Board of Directors to an Executive Chair role, and Mr. Moorthy was appointed as PEO and continued to serve as President. (5)Pursuant to SEC rules, the Microchip TSR and Peer Group TSR are determined based on the value of an initial fixed investment of $100 on March 31, 2020 through the end of the listed fiscal year. (6)Our peer group is comprised of the component companies of the PHLX Semiconductor Index (the "Peer Index") for each applicable fiscal year. (7)Our Company-Selected Measure, as required by Item 402(v) of Regulation S-K, is non-GAAP operating income, which, in our assessment, represents the most important financial performance measure linking fiscal 2023 NEO compensation actually paid to company performance.

  46. Fiscal 2023 Performance Measures

    Fiscal 2023 Performance Measures In accordance with SEC rules, the following table lists the financial performance measures that, in our assessment, represent the unranked, but most important financial performance measures used to link "compensation actually paid" to our NEOs to company performance for fiscal 2023, as further described in our Compensation Discussion and Analysis within the sections titled "Elements of Compensation - Base Salary" and "Elements of Compensation - Equity Compensation" (see page 38).

  47. Fiscal 2023 Performance Measures

    | Important Financial Performance Measures | | Net Sales | | Operating Income (Non-GAAP) | | Gross Profit Percentage (Non-GAAP) | | Operating Expenses (Non-GAAP) | | Cash Flow from Operating Activities | | Diluted Net Income Per Common Share (Non-GAAP) |

  48. Relationship Between "Compensation Actually Paid" and Performance Measures

    Relationship Between "Compensation Actually Paid" and Performance Measures In accordance with SEC rules, the chart below illustrates how "compensation actually paid" (CAP) to our NEOs aligns with our financial performance as measured by our total shareholder return, and our peer group total shareholder return. In accordance with SEC rules, the chart below illustrates how "compensation actually paid" (CAP) to our NEOs aligns with our GAAP net income, and our non-GAAP operating income, which is the company selected measure.

  49. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE The following table lists the annual compensation for our CEO and President, our CFO and our three other most highly compensated executive officers (referred to as the "named executive officers") earned in the last three fiscal years:

  50. SUMMARY COMPENSATION TABLE

    | Name and Principal Position | Year | Salary ($) (1) | Bonus ($) (2) | Stock Awards ($) (3) | Non-Equity Incentive Plan Compensation ($) (4) | All Other Compensation ($) (5) | Total ($) | | Ganesh Moorthy, CEO and President | 2023 | 643,126 | 75,599 | 8,714,501 | 2,828,128 | 14,961 | 12,276,315 | | | 2022 | 565,862 | 46,006 | 10,538,056 | 1,595,494 | 14,249 | 12,759,667 | | | 2021 | 421,014 | 12,792 | 3,170,379 | 277,510 | 9,772 | 3,891,467 | | Steve Sanghi, Executive Chair | 2023 | 484,886 | 54,633 | 6,374,625 | 1,704,538 | 21,813 | 8,640,495 | | | 2022 | 484,882 | 38,126 | 3,735,961 | 1,269,336 | 18,272 | 5,546,577 | | | 2021 | 702,087 | 22,086 | 7,384,078 | 1,168,596 | 13,065 | 9,289,912 | | Stephen V. Drehobl, Senior VP, MCU8 and MCU16 Business Units | 2023 | 334,797 | 39,184 | 2,594,008 | 451,366 | 17,265 | 3,436,620 | | | 2022 | 314,481 | 26,212 | 3,201,643 | 315,250 | 14,023 | 3,871,609 | | | 2021 | 275,943 | 8,384 | 1,477,531 | 102,034 | 7,824 | 1,871,716 | | Richard Simoncic, Executive VP, Analog Power and Interface Business Unit | 2023 | 319,862 | 37,599 | 2,126,398 | 431,352 | 15,497 | 2,930,708 | | | 2022 | 289,384 | 23,799 | 2,312,929 | 263,595 | 11,968 | 2,901,675 | | | 2021 | 252,891 | 7,684 | 982,099 | 83,346 | 7,126 | 1,333,146 | | J. Eric Bjornholt, Senior VP and CFO | 2023 | 315,212 | 36,894 | 2,126,398 | 378,797 | 15,692 | 2,872,993 | | | 2022 | 293,338 | 24,449 | 2,555,519 | 241,667 | 11,445 | 3,126,418 | | | 2021 | 257,391 | 7,821 | 1,142,976 | 76,553 | 6,437 | 1,491,178 |

  51. SUMMARY COMPENSATION TABLE

    (1)Represents the base salary earned by each executive officer in the specified fiscal year. (2)Represents bonuses earned by each executive officer in the specified fiscal year under our ECBP. (3)Represents the aggregate grant date fair value of awards of RSUs and PSUs made in the specified fiscal year computed in accordance with ASC 718 Compensation - Stock Compensation. For information on the valuation assumptions made with respect to the grants of RSUs and PSUs in fiscal 2023, please refer to Note 13, "Share-Based Compensation" to Microchip's audited financial statements for the fiscal year ended March 31, 2023 included in our Annual Report on Form 10-K filed with the SEC on May 25, 2023. (4)Represents the aggregate amount of cash bonuses earned by each executive officer in the specified fiscal year. For fiscal 2023 and fiscal 2022, the bonuses were under our MICP and, for fiscal 2021, the bonuses were awarded under our Executive Management Incentive Compensation Plan ("EMICP"). In fiscal 2022 and fiscal 2021, a portion of the amounts earned under the MICP and EMICP, as applicable, were paid in RSUs and not in cash. Such RSUs are not included in the "Non-Equity Incentive Plan Compensation" column in the above table; however, all of such RSU grants made during fiscal 2022 and fiscal 2021 are included in the Stock Awards column in the above table and such outstanding RSUs are also included in the "Outstanding Equity Awards at 2023 Fiscal Year End" table. Each executive officer received the following cash payments under each of such plans in the specified fiscal year:

  52. SUMMARY COMPENSATION TABLE

    | Named Executive Officer | Year | MICP ($) | EMICP ($) | | Ganesh Moorthy, CEO and President | 2023 | 2,828,128 | — | | | 2022 | 1,595,494 | — | | | 2021 | — | 277,510 | | Steve Sanghi, Executive Chair | 2023 | 1,704,538 | — | | | 2022 | 1,269,336 | — | | | 2021 | — | 1,168,596 | | Stephen V. Drehobl, Senior VP, MCU8 and MCU16 Business Units | 2023 | 451,366 | — | | | 2022 | 315,250 | — | | | 2021 | — | 102,034 | | Richard Simoncic, Executive VP, Analog Power and Interface Business Unit | 2023 | 431,352 | — | | | 2022 | 263,595 | — | | | 2021 | — | 83,346 | | J. Eric Bjornholt, Senior VP and CFO | 2023 | 378,797 | — | | | 2022 | 241,667 | — | | | 2021 | — | 76,553 |

  53. SUMMARY COMPENSATION TABLE

    (5)Consists of company-matching contributions under our 401(k) retirement savings plan and the full dollar value of premiums paid by Microchip for life insurance for the benefit of the named executive officer in the amounts shown below:

  54. SUMMARY COMPENSATION TABLE

    | Named Executive Officer | Year | 401(k) ($) | Life Insurance ($) | | Ganesh Moorthy, CEO and President | 2023 | 10,575 | 4,386 | | | 2022 | 10,025 | 4,224 | | | 2021 | 5,725 | 4,047 | | Steve Sanghi, Executive Chair | 2023 | 14,006 | 7,807 | | | 2022 | 10,754 | 7,518 | | | 2021 | 5,725 | 7,340 | | Stephen V. Drehobl, Senior VP, MCU8 and MCU16 Business Units | 2023 | 12,888 | 4,377 | | | 2022 | 10,074 | 3,949 | | | 2021 | 5,260 | 2,564 | | Richard Simoncic, Executive VP, Analog Power and Interface Business Unit | 2023 | 12,233 | 3,264 | | | 2022 | 9,419 | 2,549 | | | 2021 | 5,036 | 2,090 | | J. Eric Bjornholt, Senior VP and CFO | 2023 | 13,841 | 1,851 | | | 2022 | 9,793 | 1,652 | | | 2021 | 5,126 | 1,311 |

  55. Grants of Plan-Based Awards During Fiscal 2023

    Grants of Plan-Based Awards During Fiscal 2023 The following table sets forth information with respect to our MICP and our ECBP, as well as RSUs and PSUs granted to our named executive officers under our 2004 Equity Incentive Plan, including the grant date fair value of the RSUs and PSUs. Amounts listed in the "Estimated Future Payouts Under Non-Equity Incentive Plan Awards" column are annual targets based on the salaries of the named executive officers at the end of fiscal 2023. Actual payments for our bonus plans in fiscal 2023 are reflected in the "Summary Compensation Table" above. Equity awards in the table below were granted in fiscal 2023.

  56. GRANTS OF PLAN-BASED AWARDS

    GRANTS OF PLAN-BASED AWARDS

  57. Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year Ended March 31, 2023 Table Discussion

    Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year Ended March 31, 2023 Table Discussion Based on the data in the "Summary Compensation Table," the level of salary, bonus, non-equity incentive plan compensation, and other compensation in proportion to total compensation ranged from approximately 24.5% to 29.0% for our named executive officers in fiscal 2023. See the "Executive Compensation - Compensation Discussion and Analysis" section of this proxy statement for further discussion of overall compensation and how compensation is determined. We do not have employment contracts with our named executive officers, nor agreements to pay severance on involuntary termination (other than as stated in the change of control agreements discussed above under the heading "Employment Contracts, Termination of Employment and Change of Control Arrangements") or retirement. For a discussion of the material terms of the awards listed in the "Grants of Plan-Based Awards Table for Fiscal Year Ended March 31, 2023," see our discussion of the equity awards and incentive cash bonuses in the "Executive Compensation - Compensation Discussion and Analysis" section of this proxy statement under the headings "Incentive Cash Bonuses," "Equity Compensation," and "Employee Cash Bonus Plan." Microchip has not made any material modifications to any equity-based awards during the last fiscal year.

  58. Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year Ended March 31, 2023 Table Discussion

    | OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END | | | | | | Name | Stock Awards | | | | | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | | Ganesh Moorthy, CEO and President | | | 5,080(2) | 425,602 | | | | | 4,680(3) | 392,090 | | | | | 6,106(4) | 511,561 | | | | | 13,244(5) | 1,109,582 | | | | | 12,808(6) | 1,073,054 | | | | | 5,080(7) | 425,602 | | | | | 11,114(8) | 931,131 | | | | | 4,680(9) | 392,090 | | | | | 14,572(10) | 1,220,842 | | | | | 51,232(11) | 4,292,217 | | | | | 19,194(12) | 1,608,073 | | | | | 25,398(13) | 2,127,844 | | | | | 23,400(14) | 1,960,452 | | | 3,052(15) | 255,697 | | | | | 5,671(16) | 475,116 | | | | | 4,239(17) | 355,143 | | | | | 6,344(18) | 531,500 | | | | | 12,486(18) | 1,046,077 | | | | | 11,948(19) | 1,001,003 | | | | | 11,752(20) | 984,583 | | | | | 5,836(21) | 488,940 | | | | | 8,004(22) | 670,575 | | | | | 6,088(23) | 510,053 | | | | | 5,864(24) | 491,286 | | | | | 2,540(24) | 212,801 | | | | | 4,576(25) | 383,377 | | | | | 2,340(26) | 196,045 | | | | | 6,104(27) | 511,393 | | | | | 6,620(28) | 554,624 | | | | | 6,404(29) | 536,527 | | | | | 2,540(30) | 212,801 | | | | | 5,556(31) | 465,482 | | | | | 2,340(32) | 196,045 | | | | | 7,286(33) | 610,421 | | | | | 51,228(34) | 4,291,882 | | | | | 9,596(35) | 803,953 | | | | | 12,699(36) | 1,063,922 | | | | | 11,699(37) | 980,142 | | |

  59. Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year Ended March 31, 2023 Table Discussion

    | OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END | | | | | | Name | Stock Awards | | | | | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | | Steve Sanghi, Executive Chair | | | 3,716(2) | 311,326 | | | | | 3,424(3) | 286,863 | | | | | 4,924(4) | 412,533 | | | | | 10,676(5) | 894,435 | | | | | 10,328(6) | 865,280 | | | | | 3,716(7) | 311,326 | | | | | 8,960(8) | 750,669 | | | | | 3,424(9) | 286,863 | | | | | 10,660(10) | 893,095 | | | | | 14,040(12) | 1,176,271 | | | | | 18,580(13) | 1,556,632 | | | | | 17,116(14) | 1,433,978 | | | 6,388(15) | 535,187 | | | | | 11,868(16) | 994,301 | | | | | 8,871(17) | 743,212 | | | | | 13,274(18) | 1,112,096 | | | | | 26,132(18) | 2,189,339 | | | | | 25,004(19) | 2,094,835 | | | | | 24,596(20) | 2,060,653 | | | | | 12,212(21) | 1,023,121 | | | | | 16,750(22) | 1,403,315 | | | | | 12,744(23) | 1,067,692 | | | | | 12,276(24) | 1,028,483 | | | | | 1,858(24) | 155,663 | | | | | 9,580(25) | 802,612 | | | | | 1,711(26) | 143,348 | | | | | 4,922(27) | 412,365 | | | | | 5,338(28) | 447,218 | | | | | 5,162(29) | 432,472 | | | | | 1,858(30) | 155,663 | | | | | 4,480(31) | 375,334 | | | | | 1,711(32) | 143,348 | | | | | 5,329(33) | 446,464 | | | | | 7,020(35) | 588,136 | | | | | 9,289(36) | 778,232 | | | | | 8,558(37) | 716,989 | | |

  60. Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year Ended March 31, 2023 Table Discussion

    | OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END | | | | | | Name | Stock Awards | | | | | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | | Stephen V. Drehobl, Senior VP, MCU8 and MCU16 Business Units | | | 1,798(2) | 150,636 | | | | | 1,656(3) | 138,740 | | | | | 1,856(4) | 155,496 | | | | | 4,028(5) | 337,466 | | | | | 3,896(6) | 326,407 | | | | | 1,798(7) | 150,636 | | | | | 3,378(8) | 283,009 | | | | | 1,656(9) | 138,740 | | | | | 4,124(10) | 345,509 | | | | | 15,584(11) | 1,305,628 | | | | | 5,432(12) | 455,093 | | | | | 7,188(13) | 602,211 | | | | | 6,622(14) | 554,791 | | | 1,445(15) | 121,062 | | | | | 2,686(16) | 225,033 | | | | | 2,008(17) | 168,230 | | | | | 2,860(18) | 239,611 | | | | | 5,912(18) | 495,307 | | | | | 5,656(19) | 473,860 | | | | | 5,564(20) | 466,152 | | | | | 2,762(21) | 231,400 | | | | | 3,788(22) | 317,359 | | | | | 2,882(23) | 241,454 | | | | | 2,776(24) | 232,573 | | | | | 898(24) | 75,234 | | | | | 2,166(25) | 181,467 | | | | | 827(26) | 69,286 | | | | | 1,856(27) | 155,496 | | | | | 2,012(28) | 168,565 | | | | | 1,946(29) | 163,036 | | | | | 898(30) | 75,234 | | | | | 1,689(31) | 141,504 | | | | | 827(32) | 69,286 | | | | | 2,061(33) | 172,671 | | | | | 15,568(34) | 1,304,287 | | | | | 2,715(35) | 227,463 | | | | | 3,593(36) | 301,022 | | | | | 3,310(37) | 277,312 | | |

  61. Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year Ended March 31, 2023 Table Discussion

    | OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END | | | | | | Name | Stock Awards | | | | | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | | Richard Simoncic, Executive VP, Analog Power and Interface Business Unit | | | 1,474(2) | 123,492 | | | | | 1,358(3) | 113,773 | | | | | 1,340(4) | 112,265 | | | | | 2,908(5) | 243,632 | | | | | 2,812(6) | 235,589 | | | | | 1,474(7) | 123,492 | | | | | 2,438(8) | 204,256 | | | | | 1,358(9) | 113,773 | | | | | 3,380(10) | 283,176 | | | | | 11,232(11) | 941,017 | | | | | 4,452(12) | 372,989 | | | | | 5,892(13) | 493,632 | | | | | 5,428(14) | 454,758 | | | 921(15) | 77,161 | | | | | 1,713(16) | 143,515 | | | | | 1,280(17) | 107,238 | | | | | 2,002(18) | 167,728 | | | | | 3,940(18) | 330,093 | | | | | 3,770(19) | 315,851 | | | | | 3,708(20) | 310,656 | | | | | 1,762(21) | 147,620 | | | | | 2,416(22) | 202,412 | | | | | 1,838(23) | 153,988 | | | | | 1,770(24) | 148,291 | | | | | 736(24) | 61,662 | | | | | 1,382(25) | 115,784 | | | | | 678(26) | 56,803 | | | | | 1,338(27) | 112,098 | | | | | 1,452(28) | 121,649 | | | | | 1,404(29) | 117,627 | | | | | 736(30) | 61,662 | | | | | 1,219(31) | 102,128 | | | | | 678(32) | 56,803 | | | | | 1,690(33) | 141,588 | | | | | 11,242(34) | 941,855 | | | | | 2,226(35) | 186,494 | | | | | 2,945(36) | 246,732 | | | | | 2,713(37) | 227,295 | | |

  62. Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year Ended March 31, 2023 Table Discussion

    | OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR END | | | | | | Name | Stock Awards | | | | | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | | J. Eric Bjornholt, Senior VP and CFO | | | 1,474(2) | 123,492 | | | | | 1,358(3) | 113,773 | | | | | 1,482(4) | 124,162 | | | | | 3,216(5) | 269,436 | | | | | 3,112(6) | 260,723 | | | | | 1,474(7) | 123,492 | | | | | 2,698(8) | 226,038 | | | | | 1,358(9) | 113,773 | | | | | 3,380(10) | 283,176 | | | | | 12,448(11) | 1,042,893 | | | | | 4,452(12) | 372,989 | | | | | 5,892(13) | 493,632 | | | | | 5,428(14) | 454,758 | | | 1,111(15) | 93,080 | | | | | 2,065(16) | 173,006 | | | | | 1,545(17) | 129,440 | | | | | 1,816(18) | 152,144 | | | | | 4,322(18) | 362,097 | | | | | 4,136(19) | 346,514 | | | | | 4,068(20) | 340,817 | | | | | 2,020(21) | 169,236 | | | | | 2,914(22) | 244,135 | | | | | 2,216(23) | 185,656 | | | | | 2,136(24) | 178,954 | | | | | 736(24) | 61,662 | | | | | 1,666(25) | 139,577 | | | | | 678(26) | 56,803 | | | | | 1,482(27) | 124,162 | | | | | 1,606(28) | 134,551 | | | | | 1,554(29) | 130,194 | | | | | 736(30) | 61,662 | | | | | 1,349(31) | 113,019 | | | | | 678(32) | 56,803 | | | | | 1,690(33) | 141,588 | | | | | 12,430(34) | 1,041,385 | | | | | 2,226(35) | 186,494 | | | | | 2,945(36) | 246,732 | | | | | 2,713(37) | 227,295 | | |

  63. Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year Ended March 31, 2023 Table Discussion

    | (1) Represents the number of RSUs and PSUs multiplied by $83.78, the closing price of our common stock on March 31, 2023. | | (2) Amount reflects estimated PSU achievement based on performance status as of March 31, 2023 (200% of target). The actual number of shares that may be earned, if any, is contingent upon the achievement of pre-established performance metrics over the two-year period ending September 30, 2024. Vested PSUs are contingent on continuation of service through November 15, 2024. The number of shares that may be earned is between 0% and 200% of the target number of shares. |

  64. Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year Ended March 31, 2023 Table Discussion

    | (3) Amount reflects estimated PSU achievement based on performance status as of March 31, 2023 (200% of target). The actual number of shares that may be earned, if any, is contingent upon the achievement of pre-established performance metrics over the two-year period ending December 31, 2024. Vested PSUs are contingent on continuation of service through February 17, 2025. The number of shares that may be earned is between 0% and 200% of the target number of shares. | | (4) Amount reflects estimated TSR achievement based on performance status as of March 31, 2023 (100% of target). The actual number of shares that may be earned, if any, is contingent upon the achievement of pre-established performance metrics over the three-year period ending March 31, 2024. Vested PSUs based on TSR are contingent on continuation of service through May 15, 2025. The number of shares that may be earned is between 0% and 200% of the target number of shares. | | (5) Amount reflects estimated TSR achievement based on performance status as of March 31, 2023 (200% of target). The actual number of shares that may be earned, if any, is contingent upon the achievement of pre-established performance metrics over the three-year period ending June 30, 2024. Vested PSUs based on TSR are contingent on continuation of service through August 15, 2025. The number of shares that may be earned is between 0% and 200% of the target number of shares. | | (6) Amount reflects estimated PSU achievement based on performance status as of March 31, 2023 (200% of target). The actual number of shares that may be earned, if any, is contingent upon the achievement of pre-established performance metrics over the three-year period ending September 30, 2024. Vested PSUs are contingent on continuation of service through November 15, 2025. The number of shares that may be earned is between 0% and 200% of the target number of shares. | | (7) Amount reflects estimated PSU achievement based on performance status as of March 31, 2023 (200% of target). The actual number of shares that may be earned, if any, is contingent upon the achievement of pre-established performance metrics over the three-year period ending September 30, 2025. Vested PSUs are contingent on continuation of service through November 17, 2025. The number of shares that may be earned is between 0% and 200% of the target number of shares. | | (8) Amount reflects estimated PSU achievement based on performance status as of March 31, 2023 (200% of target). The actual number of shares that may be earned, if any, is contingent upon the achievement of pre-established performance metrics over the three-year period ending December 31, 2024. Vested PSUs are contingent on continuation of service through February 15, 2026. The number of shares that may be earned is between 0% and 200% of the target number of shares. | | (9) Amount reflects estimated PSU achievement based on performance status as of March 31, 2023 (200% of target). The actual number of shares that may be earned, if any, is contingent upon the achievement of pre-established performance metrics over the three-year period ending December 31, 2025. Vested PSUs are contingent on continuation of service through February 16, 2026. The number of shares that may be earned is between 0% and 200% of the target number of shares. | | (10) Amount reflects estimated PSU achievement based on performance status as of March 31, 2023 (200% of target). The actual number of shares that may be earned, if any, is contingent upon the achievement of pre-established performance metrics over the three-year period ending March 31, 2025. Vested PSUs are contingent on continuation of service through May 15, 2026. The number of shares that may be earned is between 0% and 200% of the target number of shares. | | (11) Amount reflects estimated PSU achievement based on performance status as of March 31, 2023 (200% of target). The actual number of shares that may be earned, if any, is contingent upon the achievement of pre-established performance metrics over the three-year period ending September 30, 2024. These awards vest in quarterly installments from November 15, 2024 through August 15, 2026, subject to continued service on such dates. The number of shares that may be earned is between 0% and 200% of the target number of shares. | | (12) Amount reflects estimated PSU achievement based on performance status as of March 31, 2023 (200% of target). The actual number of shares that may be earned, if any, is contingent upon the achievement of pre-established performance metrics over the three-year period ending June 30, 2025. Vested PSUs are contingent on continuation of service through August 17, 2026. The number of shares that may be earned is between 0% and 200% of the target number of shares. | | (13) Amount reflects estimated PSU achievement based on performance status as of March 31, 2023 (200% of target). The actual number of shares that may be earned, if any, is contingent upon the achievement of pre-established performance metrics over the three-year period ending September 30, 2025. Vested PSUs are contingent on continuation of service through November 16, 2026. The number of shares that may be earned is between 0% and 200% of the target number of shares. | | (14) Amount reflects estimated PSU achievement based on performance status as of March 31, 2023 (200% of target). The actual number of shares that may be earned, if any, is contingent upon the achievement of pre-established performance metrics over the three-year period ending December 31, 2025. Vested PSUs are contingent on continuation of service through February 15, 2027. The number of shares that may be earned is between 0% and 200% of the target number of shares. | | (15) Amount reflects TSR achievement of 38.13% of target during the two-year measurement period ended March 31, 2022, subject to continuation of service through May 15, 2024. |

  65. Summary Compensation Table and Grants of Plan-Based Awards for Fiscal Year Ended March 31, 2023 Table Discussion

    | (16) Amount reflects TSR achievement of 96.68% of target during the two-year measurement period ended September 30, 2022, subject to continuation of service through November 15, 2024. | | (17) Amount reflects TSR achievement of 92.60% of target during the two-year measurement period ended December 31, 2022, subject to continuation of service through February 15, 2025. | | (18) The award vested in full on May 15, 2023. | | (19) The award vests in full on August 15, 2023, subject to continued service on such date. | | (20) The award vests in full on November 15, 2023, subject to continued service on such date. | | (21) The award vests in full on February 15, 2024, subject to continued service on such date. | | (22) The award vests in full on May 15, 2024, subject to continued service on such date. | | (23) The award vests in full on August 15, 2024, subject to continued service on such date. | | (24) The award vests in full on November 15, 2024, subject to continued service on such date. | | (25) The award vests in full on February 15, 2025, subject to continued service on such date. | | (26) The award vests in full on February 17, 2025, subject to continued service on such date. | | (27) The award vests in full on May 15, 2025, subject to continued service on such date. | | (28) The award vests in full on August 15, 2025, subject to continued service on such date. | | (29) The award vests in full on November 15, 2025, subject to continued service on such date. | | (30) The award vests in full on November 17, 2025, subject to continued service on such date. | | (31) The award vests in full on February 15, 2026, subject to continued service on such date. | | (32) The award vests in full on February 16, 2026, subject to continued service on such date. | | (33) The award vests in full on May 15, 2026, subject to continued service on such date. | | (34) The award vests in quarterly installments from November 15, 2023 through August 15, 2026, subject to continued service on such dates. | | (35) The award vests in full on August 17, 2026, subject to continued service on such date. | | (36) The award vests in full on November 16, 2026, subject to continued service on such date. | | (37) The award vests in full on February 15, 2027, subject to continued service on such date. |

  66. STOCK VESTED

    STOCK VESTED

  67. Non-Qualified Deferred Compensation for Fiscal Year 2023

    Non-Qualified Deferred Compensation for Fiscal Year 2023 All of our U.S. employees in director-level and above positions, including our executive officers, are eligible to defer a portion of their salary and cash bonuses into our Non-Qualified Deferred Compensation Plan (the "Deferred Compensation Plan"). Pursuant to the Deferred Compensation Plan, eligible employees can defer up to 50% of their base salary and/or cash bonuses. In general, deferral elections are made prior to January of each year for amounts to be earned in the upcoming year. Participants may invest amounts in various funds available under the Deferred Compensation Plan (in general, any of those funds traded on a nationally recognized exchange). Plan earnings are calculated by reference to actual earnings of mutual funds or other securities chosen by individual participants. Except for a change in control or certain unforeseeable emergencies (as defined under the Deferred Compensation Plan), benefits under the plan will not be distributed until a "distribution event" has occurred. The distribution event occurs upon termination of employment. We incur incidental expenses for administration of the Deferred Compensation Plan, and the receipt of any tax benefit we might obtain based on payment of a participant's compensation is delayed until funds (including earnings or losses on the amounts invested pursuant to the plan) are eventually distributed. We do not pay any additional compensation or guarantee minimum returns to any participant in the Deferred Compensation Plan. The following table shows the non-qualified deferred compensation activity for each named executive officer for the fiscal year ended March 31, 2023.

  68. NON-QUALIFIED DEFERRED COMPENSATION

    NON-QUALIFIED DEFERRED COMPENSATION

  69. NON-QUALIFIED DEFERRED COMPENSATION

    | Name | Executive Contributions in Last FY ($) (1) | Company Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) (1) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) (1) | | Ganesh Moorthy, CEO and President | — | — | (48,456) | — | 429,283 | | Steve Sanghi, Executive Chair | — | — | — | — | — | | Stephen V. Drehobl, Senior VP, MCU8 and MCU16 Business Units | 83,327 | — | (154,593) | — | 1,723,858 | | Richard Simoncic, Executive VP, Analog Power and Interface Business Unit | — | — | — | — | — | | J. Eric Bjornholt, Senior VP and CFO | — | — | (51,750) | — | 533,686 |

  70. NON-QUALIFIED DEFERRED COMPENSATION

    (1)The executive contribution amounts shown in the table were previously reported in the "Summary Compensation Table" as salary and/or bonus for fiscal 2023 or prior fiscal years. The earnings amounts shown in the table were not previously reported for fiscal 2023 or prior years under applicable SEC rules as such earnings were not under a defined benefit or actuarial pension plan and there were no above-market or preferential earnings on such amounts made or provided by Microchip.