01—Abstract
Summary
Summary of the 10-K/A filed January 28, 2022. Cited figures are marked; the original filing is the authoritative source.
This Part III section of Skyworks Solutions, Inc.'s annual report on Form 10-K, filed January 28, 2022, covers governance, executive and director compensation, security ownership, and auditor fees for fiscal year 2021, which ended October 1, 2021.
Liam K. Griffin serves as Chairman, Chief Executive Officer and President, and his fiscal 2021 total compensation was $16,150,421a. The filing estimates his pay at approximately 928 times that of the median employee, whose total compensation was $17,409.
The Board has seven independent directors out of eight members. Christine King is Lead Independent Director and chairs the Compensation Committee. The filing reports that shareholders gave limited support to the say-on-pay proposal at the 2021 annual meeting, mainly due to one-time stock awards granted to named executive officers in November 2019.
In response, the Compensation Committee eliminated future one-time awards, moved the long-term performance share design to a relative EBITDA margin metric with a two-year performance period, and committed to adopting a clawback policy. Fiscal 2021 short-term incentive payouts reached the maximum level for both half-year periods. Revenue was $2,682 millionb in the first half and $2,367 million in the second half, and non-GAAP EBITDA was $1,226 million and $1,050 million, respectively.
Payouts excluded the impact of the July 2021 acquisition of Silicon Labs' Infrastructure and Automotive business. As of January 21, 2022, there were 166,691,622 common shares outstanding.
The Vanguard Group, Inc. held 10.75% and BlackRock, Inc. held 9.17%, according to filings they supplied to the Company. KPMG LLP's total fees were $2,866,000c for fiscal 2021, compared with $2,552,265 for fiscal 2020, with audit fees accounting for 92.7% of the fiscal 2021 total.
02—Key points
Key Highlights
- Fiscal 2021 CEO total compensation was $16,150,421, and the CEO-to-median-employee pay ratio was estimated at approximately 928 to 1.
- Shareholders gave limited support to the 2021 say-on-pay vote; outreach to more than thirty of the largest institutional holders, representing approximately 51% of shares outstanding, led to changes including no future one-time awards and a relative EBITDA margin performance metric.
- Fiscal 2021 short-term incentive awards were paid at the maximum level, with revenue of $2,682 million and non-GAAP EBITDA of $1,226 million in the first half, and revenue of $2,367 million and non-GAAP EBITDA of $1,050 million in the second half.
- Key-customer emerging revenue reached $996 million in fiscal 2021 versus $442 million in fiscal 2020, a stated increase of 125%, and design win performance also reached the maximum level.
- Board independence: seven of the eight directors are independent under Nasdaq rules, and the Audit Committee includes three members identified as audit committee financial experts.
- Shares outstanding were 166,691,622 as of January 21, 2022; Vanguard reported 10.75% ownership and BlackRock reported 9.17%.
- KPMG LLP fees totaled $2,866,000 for fiscal 2021, of which audit fees were $2,656,000 (92.7%).
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Skyworks Solutions kept $0.29.
- Revenue$5.11B100.0%
- Cost of revenue−$2.60B50.8%
- Gross profit$2.51B49.2%
- Operating costs−$899.7M17.6%
- Operating income$1.61B31.6%
- Interest, other & tax−$114.4M2.2%
- Net income$1.50B29.3%
Where FY2021 revenue went
$5.11B- Cost of revenue: $2.60B, 51% of revenue
- Net income: $1.50B, 29% of revenue
- R&D: $532.3M, 10% of revenue
- SG&A: $322.5M, 6.3% of revenue
- Other operating costs: $44.9M, 0.9% of revenue
- Interest, other & tax: $114.4M, 2.2% of revenue
Kept 29% as net incomeOther operating costs $44.9M · 0.9%Interest, other & tax $114.4M · 2.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2021filed January 28, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $5.11B$3.36B | +52.3% |
| Cost of Revenue | $2.60B$1.74B | +49.0% |
| Gross Profit | $2.51B$1.61B | +55.8% |
| R&D Expenses | $532.30M$464.10M | +14.7% |
| SG&A Expenses | $322.50M$231.40M | +39.4% |
| Operating Expenses | $899.70M$721.10M | +24.8% |
| Operating Income | $1.61B$891.80M | +80.8% |
| Interest Expense | -$13.40M$0 | — |
| Net Income | $1.50B$814.80M | +83.9% |
| EPS (Basic) | $9.07$4.84 | +87.4% |
| EPS (Diluted) | $8.97$4.80 | +86.9% |
| Shares Outstanding (Basic) | 165.20M168.50M | −2.0% |
| Shares Outstanding (Diluted) | 167.00M169.90M | −1.7% |
05—Questions
Frequently Asked Questions
How much did the CEO earn in fiscal 2021, and how does that compare with other employees?
Liam K. Griffin's total fiscal 2021 compensation was $16,150,421, including $11,612,745 in stock awards and $3,440,000 in non-equity incentive compensation. The Company estimates his pay was approximately 928 times that of its median employee, whose total annual compensation was $17,409.
Why did shareholders not broadly support the say-on-pay proposal, and what changed?
The filing states that opposition was primarily tied to one-time stock-based awards granted to named executive officers in November 2019 to address retention concerns. The Compensation Committee responded by stating that no one-time awards were granted in 2020 or 2021 and none are anticipated, switching the performance share metric to relative EBITDA margin, extending performance periods, setting target performance at the 55th percentile for relative EBITDA margin and total stockholder return, adjusting the peer group, and committing to a clawback policy.
How did the fiscal 2021 incentive plan perform?
The Company reported first-half revenue of $2,682 million and non-GAAP EBITDA of $1,226 million, and second-half revenue of $2,367 million and non-GAAP EBITDA of $1,050 million. Each named executive officer earned the maximum payment level, or 200% of target, for both periods. Results excluded the impact of the July 2021 acquisition of Silicon Labs' Infrastructure and Automotive business.
Who are the largest shareholders and how much stock is outstanding?
As of January 21, 2022, there were 166,691,622 shares of common stock outstanding. The Vanguard Group, Inc. beneficially owned 17,911,518 shares (10.75%), and BlackRock, Inc. beneficially owned 15,290,274 shares (9.17%). All current directors and executive officers as a group beneficially owned 521,189 shares.
What were the auditor fees and how were they divided?
KPMG LLP billed total fees of $2,866,000 for fiscal 2021, compared with $2,552,265 for fiscal 2020. Audit fees were $2,656,000 (92.7% of the total), and tax fees were $210,000 (7.3%). The Audit Committee preapproved all services provided by KPMG during both years.
06—Continue