01—Abstract
Summary
Summary of the 10-K/A filed January 30, 2017. Cited figures are marked; the original filing is the authoritative source.
This filing is Part III of Skyworks Solutions, Inc.'s Form 10-K for fiscal year 2016 (ended September 30, 2016), covering governance and compensation rather than financial results.
It sets out the directors and executive officers as of January 16, 2017, led by David J. Aldrich as Executive Chairman and Liam K. Griffin as President and Chief Executive Officer.
Kris Sennesael joined as Senior Vice President and Chief Financial Officer in August 2016, succeeding Donald W. Palette, who retired from that role. The filing states that KPMG LLP served as auditor, with total fees of $1,889,085a for fiscal 2016.
Compensation for fiscal 2016 reflects a year of leadership change. The Company failed to achieve its nominal non-GAAP operating margin goal, so no short-term incentive awards were paid to Named Executive Officers. Griffin's base salary was set at $850,000b upon his promotion, and Aldrich's was reduced to $800,000 as Executive Chairman.
Stockholders approved the named executive officer compensation at the 2016 annual meeting with approximately 96%c of votes cast. The filing lists 184,800,343 shares outstanding as of January 16, 2017, and identifies Capital Research Global Investors (10.60%) and The Vanguard Group (8.90%) as the largest beneficial owners.
For investors, the key governance points are the executive transition, the change-in-control and severance arrangements, and the absence of short-term incentive payouts for fiscal 2016. The filing also notes that one late Section 16(a) Form 4 was filed by Mr. Gammel.
02—Key points
Key Highlights
- No short-term incentive awards were paid to Named Executive Officers for fiscal 2016, because the Company missed its nominal non-GAAP operating margin goal.
- Liam K. Griffin became President and Chief Executive Officer on May 11, 2016, and David J. Aldrich moved to Executive Chairman, with his base salary reduced to $800,000.
- Kris Sennesael joined in August 2016 as Senior Vice President and Chief Financial Officer, succeeding Donald W. Palette, who retired from the role effective August 29, 2016.
- Approximately 96% of votes cast at the 2016 Annual Meeting approved the named executive officer compensation.
- Fiscal 2016 PSAs achieved 36.9% of the target level of performance, with the first 25% of earned shares issued on November 9, 2016.
- KPMG LLP total fees were $1,889,085 for fiscal 2016, of which audit fees were $1,769,135.
- As of January 16, 2017, there were 184,800,343 shares outstanding, with Capital Research Global Investors holding 10.60% and The Vanguard Group holding 8.90%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, Skyworks Solutions kept $0.28.
- Revenue$3.65B100.0%
- Cost of revenue−$1.81B49.6%
- Gross profit$1.84B50.4%
- Operating costs−$588.0M16.1%
- Operating income$1.25B34.3%
- Interest, other & tax−$243.6M6.7%
- Net income$1.01B27.7%
Where FY2017 revenue went
$3.65B- Cost of revenue: $1.81B, 50% of revenue
- Net income: $1.01B, 28% of revenue
- R&D: $355.2M, 9.7% of revenue
- SG&A: $204.6M, 5.6% of revenue
- Other operating costs: $28.2M, 0.8% of revenue
- Interest, other & tax: $243.6M, 6.7% of revenue
Kept 28% as net incomeOther operating costs $28.2M · 0.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2017filed January 30, 2017Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $3.65B$3.29B | +11.0% |
| Cost of Revenue | $1.81B$1.62B | +11.4% |
| Gross Profit | $1.84B$1.67B | +10.6% |
| R&D Expenses | $355.20M$312.40M | +13.7% |
| SG&A Expenses | $204.60M$195.90M | +4.4% |
| Operating Expenses | $588.00M$546.50M | +7.6% |
| Operating Income | $1.25B$1.12B | +12.1% |
| Net Income | $1.01B$995.20M | +1.5% |
| EPS (Basic) | $5.48$5.27 | +4.0% |
| EPS (Diluted) | $5.41$5.18 | +4.4% |
| Shares Outstanding (Basic) | 184.30M188.70M | −2.3% |
| Shares Outstanding (Diluted) | 186.70M192.10M | −2.8% |
05—Questions
Frequently Asked Questions
Did Skyworks executives receive short-term bonuses for fiscal 2016?
No. The filing states that the Company failed to achieve the nominal non-GAAP operating margin performance goal in fiscal 2016, so no short-term compensation awards were paid to the Named Executive Officers.
How did executive leadership change during fiscal 2016?
David J. Aldrich transitioned from Chief Executive Officer to Executive Chairman effective May 11, 2016, and Liam K. Griffin was promoted from President to President and Chief Executive Officer on the same date. Kris Sennesael became Chief Financial Officer on August 29, 2016, replacing Donald W. Palette, and Mark V.B. Tremallo retired as General Counsel effective November 10, 2016.
What severance and change-in-control protections do the top executives have?
Mr. Aldrich's agreement provides a lump sum of two times his base salary plus bonus amount on a qualifying termination outside a change in control, and two and one-half times on a qualifying termination within two years after a change of control. Mr. Griffin's agreement provides two times the same components outside a change in control and two and one-half times following a change in control. Other executives' change-in-control agreements generally provide two times salary plus bonus, with full acceleration of equity awards granted after January 22, 2015.
Who are the largest shareholders according to this filing?
The filing lists Capital Research Global Investors with 19,580,784 shares (10.60%), The Vanguard Group, Inc. with 16,443,350 shares (8.90%), and BlackRock, Inc. with 12,036,014 shares (6.51%), as of January 16, 2017.
Who are the independent directors and audit committee members?
The filing states that Kevin L. Beebe, Timothy R. Furey, Balakrishnan S. Iyer, Christine King, David J. McLachlan, David P. McGlade and Robert A. Schriesheim are independent directors. The Audit Committee consists of Robert A. Schriesheim (Chairman), Kevin L. Beebe, Balakrishnan S. Iyer and David J. McLachlan, and the Board designated Schriesheim, Iyer and McLachlan as audit committee financial experts.
06—Continue