01—Abstract
Summary
Summary of the 10-K/A filed January 27, 2014. Cited figures are marked; the original filing is the authoritative source.
This Part III filing, which refers to itself as a Form 10-K/A, provides Skyworks Solutions, Inc.'s directors, executive officers, executive and director compensation, security ownership, related-party policies, and principal accountant fees for fiscal year 2013, which ended September 27, 2013.
Ownership and officer information is stated as of January 15, 2014. David J. Aldrich serves as President and Chief Executive Officer and David J.
McLachlan as Chairman of the Board. Christine King joined the Board in January 2014. The Board determined that a majority of its members are independent under NASDAQ rules.
Shares outstanding were 188,930,302 as of January 15, 2014. On compensation, the filing reports that about 94%a of votes cast at the 2013 Annual Meeting approved the Named Executive Officers' compensation, and the Compensation Committee chose not to make significant changes afterward. Short-term incentive payouts for fiscal 2013 totaled approximately 97.23% of target.
The first-half non-GAAP operating income and gross margin goals fell between target and maximum, while the second-half gross margin goal fell between threshold and target. Mr. Aldrich's total fiscal 2013 compensation is reported as $5,800,648b. Performance share awards granted in November 2012 achieved 93.55% of the maximum performance level.
The filing also describes change-of-control and severance arrangements for the Named Executive Officers. Ownership and fees data show FMR LLC holding 19,105,443 shares (10.11%) and BlackRock, Inc. holding 12,867,675 shares (6.81%). KPMG LLP's total billed fees were $1,563,650c for fiscal 2013, compared with $1,734,100 for fiscal 2012, with audit fees accounting for 93% of the fiscal 2013 total.
02—Key points
Key Highlights
- Board and leadership: David J. McLachlan is Chairman of the Board and David J. Aldrich is President, CEO and a director. Christine King joined the Board in January 2014. The Audit Committee is chaired by Robert A. Schriesheim.
- Say-on-pay support: Approximately 94% of votes cast at the 2013 Annual Meeting approved Named Executive Officer compensation, and the Compensation Committee made no significant changes to its policies afterward.
- Incentive payouts: Fiscal 2013 short-term incentive payments totaled approximately 97.23% of target. The first-half payout was capped at 80% of the award earned, with 20% held back until year-end.
- CEO pay: Mr. Aldrich's fiscal 2013 total compensation is reported as $5,800,648, including salary of $677,846, stock awards of $2,482,480 and option awards of $1,634,185.
- Performance shares: The FY13 performance share awards achieved 93.55% of the maximum performance level, with 25% of earned shares issued on November 8, 2013.
- Ownership: FMR LLC reported 19,105,443 shares (10.11%) and BlackRock, Inc. reported 12,867,675 shares (6.81%), against 188,930,302 shares outstanding as of January 15, 2014.
- Auditor fees: KPMG LLP's total billed fees were $1,563,650 for fiscal 2013, down from $1,734,100 for fiscal 2012, with audit fees at 93% of the fiscal 2013 total.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Skyworks Solutions kept $0.16.
- Revenue$1.79B100.0%
- Cost of revenue−$1.03B57.2%
- Gross profit$766.6M42.8%
- Operating costs−$421.5M23.5%
- Operating income$345.1M19.3%
- Interest, other & tax−$67.0M3.7%
- Net income$278.1M15.5%
Where FY2013 revenue went
$1.79B- Cost of revenue: $1.03B, 57% of revenue
- Net income: $278.1M, 16% of revenue
- R&D: $226.3M, 13% of revenue
- SG&A: $159.7M, 8.9% of revenue
- Other operating costs: $35.5M, 2.0% of revenue
- Interest, other & tax: $67.0M, 3.7% of revenue
Kept 16% as net incomeOther operating costs $35.5M · 2.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2013filed January 27, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $1.79B$1.57B | +14.2% |
| Cost of Revenue | $1.03B$901.50M | +13.7% |
| Gross Profit | $766.60M$667.10M | +14.9% |
| R&D Expenses | $226.30M$212.50M | +6.5% |
| SG&A Expenses | $159.70M$158.40M | +0.8% |
| Operating Expenses | $421.50M$411.50M | +2.4% |
| Operating Income | $345.10M$255.60M | +35.0% |
| Interest Expense | $0$600K | −100.0% |
| Net Income | $278.10M$202.00M | +37.7% |
| EPS (Basic) | $1.48$1.09 | +35.8% |
| EPS (Diluted) | $1.45$1.05 | +38.1% |
| Shares Outstanding (Basic) | 187.50M185.80M | +0.9% |
| Shares Outstanding (Diluted) | 192.20M191.80M | +0.2% |
05—Questions
Frequently Asked Questions
Who are the Named Executive Officers and how were their pay levels set?
The Named Executive Officers are David J. Aldrich (President and CEO), Donald W. Palette (VP and CFO), Liam K. Griffin (EVP and Corporate General Manager), Bruce J. Freyman (SVP, Worldwide Operations) and Mark V.B. Tremallo (VP, General Counsel and Secretary). The Compensation Committee, advised by Aon/Radford, targeted base salaries generally at the Comparator Group median. The Comparator Group blends Aon/Radford survey data of 28 semiconductor companies with peer data for 19 publicly traded semiconductor companies.
How is equity compensation structured for executives?
Long-term awards are granted annually in November. Forty percent of the grant value is delivered as stock options, valued using Black-Scholes, and sixty percent as performance share awards (PSAs) valued at fair market value at target performance. The FY13 PSAs measure non-GAAP operating margin and key product design wins, each weighted 50%, and vest in installments over three years if the performance metrics are met.
What change-of-control protections do executives have?
Mr. Aldrich's agreement provides a lump sum of two and one-half times the sum of base salary and short-term incentive if he is terminated without cause or resigns within two years after a change of control. The other Named Executive Officers receive two times that sum if terminated within twelve months after a change of control. Outstanding options and restricted stock fully vest upon a change of control, and PSAs partially vest. Excise tax gross-ups are capped at $500,000 for executives other than Mr. Aldrich.
What stock ownership requirements apply to executives and directors?
The CEO must hold the lower of shares worth six times base salary or 382,200 shares. The CFO, EVP and SVP Worldwide Operations must hold the lower of 2.5 times base salary or 89,800, 95,000 or 92,500 shares, respectively. The VP and General Counsel must hold the lower of two times base salary or 65,000 shares. As of January 15, 2014, all Named Executive Officers were in compliance. Non-employee directors must hold a minimum of 11,500 shares, and all directors were in compliance except Ms. King, who has until her fifth anniversary on the Board.
06—Continue