UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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LAM RESEARCH CORPORATION
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September 28, 201727, 2023
Dear Lam Research Stockholders,
We cordially invite you to attend in person or by proxy, the Lam Research Corporation 20172023 Annual Meeting of Stockholders. The annual meeting will be held on Wednesday,Tuesday, November 8, 2017,7, 2023, at 9:30 a.m. Pacific Standard TimeTime. This year’s annual meeting will be a virtual meeting. You may attend the annual meeting, vote, and submit your questions during the live webcast of the annual meeting by visiting virtualshareholdermeeting.com/LRCX2023 and entering the 16-digit control number included in the Building CA1 Auditorium at the principal executive officesour Notice of Lam Research Corporation, which is located at 4650 Cushing Parkway, Fremont, California 94538.Internet Availability or on your proxy card.
At this year’s annual meeting, stockholders will be asked to elect the teneleven nominees named in the attached proxy statement as directors to serve until the next annual meeting of stockholders, and until their respective successors are elected and qualified; to cast an advisory vote to approve our named executive officer compensation, or “Say on Pay”;compensation; to cast an advisory vote to approve the frequency of holding future stockholder advisory votes on our named executive officer compensation, or “Say on Frequency”;compensation; and to ratify the appointment of theErnst & Young LLP as our independent registered public accounting firm for fiscal year 2018; and to consider, if properly presented at the annual meeting, a stockholder proposal described in the accompanying proxy statement.2024. The boardBoard of directorsDirectors recommends that you vote in favor of each director nominee, Saynominee; for future stockholder advisory votes on Pay, annual Say on Frequency,our named executive officer compensation at a frequency of every one year; and the ratificationfor each of the appointment of the independent registered public accounting firm; and that you vote against the stockholder proposal, if properly presented at the annual meeting.these other proposals. Management will not provide a business update during this meeting; please refer to our latest quarterly earnings report for our currentmost recently-provided outlook.
Please refer to the proxy statement for detailed information about the annual meeting, each director nominee, and each of the proposals, as well as voting instructions.Your vote is important, and we strongly urge you to cast your vote as soon as possible by the internet, telephone, or mail, even if you plan to attend the meeting in person.meeting.
Sincerely yours,
Lam Research Corporation
Stephen G. Newberry
Abhijit Y. Talwalkar
Chairman of the Board
Notice of of Stockholders |
4650 Cushing Parkway
Fremont, California 94538
Telephone: 510-572-0200
Telephone:510-572-0200
Meeting Information
| Category | Details | ||
| Date and Time | |||
| 7, 2023 9:30 a.m. Pacific Standard Time | |||
| Place | Via the Internet at virtualshareholdermeeting.com/ LRCX2023 | ||
| Record Date | Only stockholders of record at the close of business on September 8, 2023, the “Record Date,” are entitled to notice of, and to vote at, the annual meeting. |
Proxy and Annual Report Materials
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2023 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 7, 2023
Our notice of 2023 Annual Meeting of Stockholders, proxy statement, and annual report to stockholders are available on the Lam Research website at investor.lamresearch.com.
Elect Electronic Delivery Save Time, Money & Trees As part of our efforts to be an environmentally responsible corporate citizen, we encourage Lam | ||
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Date of Distribution
This notice, proxy statement and proxy card are first being made available and/or mailed to our stockholders on or about September 27, 2023.
Items of Business
| Proposal | Our Board’s Recommendation | ||||
| 1. | Election of | þ | FOR each | ||
| 2. | Advisory vote to approve our named executive officer (“NEO”) compensation | þ | FOR |
| 3. | Advisory vote to approve the frequency of holding future | þ | ONE YEAR |
| 4. | Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year |
| þ | FOR | |||
Record Date
Only stockholders of record at the close of business on September 11, 2017, the “Record Date,” are entitled to notice of and to vote at the annual meeting.Voting
Voting
Please vote as soon as possible, even if you plan to attend the annual meeting, in person.on all of the voting matters. You have three options for submitting your vote before the annual meeting: by the internet, telephone, or mail.
 |  |  |
| By internet | By phone | By mail |
The proxy statement and the accompanying proxy card
provide detailed voting instructions.
Internet AvailabilityIT IS IMPORTANT THAT YOU VOTE to play a part in the future of Proxy Materials
Our Notice of 2017the Company. Please carefully review the proxy materials for the 2023 Annual Meeting of Stockholders, Proxy Statement, and Annual Report to Stockholders are available on the Lam Research website athttp://investor.lamresearch.com and atwww.proxyvote.com.Stockholders.
By Order of the Board of Directors,
Ava M. Hahn
Secretary
Lam Research Corporation
Sarah A. O’Dowd
Secretary
This proxy statement is first being made available and/or mailed to our stockholders on or about September 28, 2017.
LAM RESEARCH CORPORATION
Proxy Statement for 20172023 Annual Meeting of Stockholders
TABLE OF CONTENTS
To assist you in reviewing the proposals to be acted upon at the annual meeting, we call your attention to the following summarized information about the Company, the proposals and voting recommendations, the Company’s director nominees, and highlights of the Company’sdirectors’ key qualifications, skills and experiences, board composition, corporate governance, executive compensation, and executive compensation. The following description is only a summary.environmental, social and governance (“ESG”) matters. For more complete information about these topics, please review the complete proxy statement.statement before voting. We also encourage you to read our latest annual report on Form 10-K, which is available at investor.lamresearch.com, and our latest ESG report, which is available at lamresearch.com/company/environmental-social-governance/. The content of any website or report referred to in this proxy statement is not a part of nor incorporated by reference in this proxy statement unless expressly noted.
We use the terms “Lam Research,” “Lam,” the “Company,” “we,” “our,” and “us” in this proxy statement to refer to Lam Research Corporation, a Delaware corporation. We also use the term “Board” to refer to the Company’s Board of Directors.
This proxy statement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statements that are not statements of historical fact, including statements regarding our ESG plans and goals. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the expectations expressed, including the risks and uncertainties described in our filings with the U.S. Securities and Exchange Commission (“SEC”), including specifically the Risk Factors described in our annual report on Form 10-K and our quarterly reports on Form 10-Q. You should not place undue reliance on forward-looking statements. We undertake no obligation to update any forward-looking statements.
About Lam Research Corporation
Lam Research is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. We have built a strong global presence with core competencies in areas such as nanoscale applications enablement, chemistry, plasma and fluidics, advanced systems engineering, and a broad range of operational disciplines. Our products and services are designed to help our customers build smaller and better performing devices that are used in a variety of electronic products, including mobile phones, personal computers, servers, wearables, automotive vehicles, and data storage devices.
Our customer base includes leading semiconductor memory, foundry, and integrated device manufacturers that make products such as non-volatile memory, dynamic random-access memory (DRAM), and logic devices. Their continued success is part of our commitment to driving semiconductor breakthroughs that define the next generation. Our core technical competency is integrating hardware, process, materials, software, and process control enabling results on the wafer.
Semiconductor manufacturing, our customers’ business, involves the complete fabrication of multiple dies or integrated circuits on a wafer. This involves the repetition of a set of core processes and can require hundreds of individual steps. Fabricating these devices requires highly sophisticated process technologies to integrate an increasing array of new materials with precise control at the atomic scale. Along with meeting technical requirements, wafer processing equipment must deliver high productivity and be cost-effective.
Demand from cloud computing, the Internet of Things, or “IoT,” and other markets is driving the need for increasingly powerful and cost-efficient semiconductors. At the same time, there are growing technical challenges with traditional two-dimensional scaling. These trends are driving significant inflections in semiconductor manufacturing, such as the increasing importance of vertical scaling strategies like three-dimensional architectures as well as multiple patterning to enable shrinks.
We believe we are in a strong position with our leadership and expertise in deposition, etch, and clean to facilitate some of the most significant innovations in semiconductor device manufacturing. Several factors create opportunity for sustainable differentiation for us: (i) our focus on research and development, with several on-going programs relating to sustaining engineering, product and process development, and concept and feasibility; (ii) our ability to effectively leverage cycles of learning from our broad installed base; (iii) our collaborative focus with semi-ecosystem partners; (iv) our ability to identify and invest in the breadth of our product portfolio to meet technology inflections; and (v) our focus on delivering our multi-product solutions with a goal to enhance the value of Lam’s solutions to our customers.
Lam Research Corporation 2023 Proxy Statement 1
Figure 1. Fiscal Year 2023 Financial Highlights
| (1) | Figures for capital returned to stockholders and amounts repurchased include brokerage fees and commissions and excise taxes. |
Figure 2. Proposals and Voting Recommendations
| Voting Matters | Board Vote Recommendation | ||||
| Proposal No. 1: Election of Directors |
| FOR each nominee | |||
| Proposal | |||||
| FOR | |||||
| Proposal | ONE YEAR | ||||
| Proposal | FOR | ||||
| Transaction of such other business as may properly come before the |
Figure 2.3. Summary Information Regarding Director Nominees
You are being asked to vote on the election of the ten director nominees listed in the table below.these eleven directors. The following table provides summary information about each director nominee as of September 11, 2017,8, 2023. Information about nominee diversity is shown in Figure 4 on the following page, information about their key qualifications, skills and experiences is shown in Figure 5, and their biographical information is contained in the “Voting Proposals – Proposal No. 1: Election of Directors – 20172023 Nominees for Director” section beginning on page 65 below.
| Director | Committee Membership | Other Current Public Boards | ||||||||||||
| Name | Age | Since | Independent(1) | AC | CC | NGC | ||||||||
| Martin B. Anstice | 50 | 2012 | No | * | ||||||||||
| Eric K. Brandt | 55 | 2010 | Yes | C/FE | Altaba (formerly Yahoo!), Dentsply Sirona | |||||||||
| Michael R. Cannon | 64 | 2011 | Yes | M/FE | M | Seagate Technology, Dialog Semiconductor | ||||||||
| Youssef A. El-Mansy | 72 | 2012 | Yes | M | ||||||||||
| Christine A. Heckart | 51 | 2011 | Yes | M | ||||||||||
| Young Bum (YB) Koh | 59 | 2017 | Yes | |||||||||||
| Catherine P. Lego | 60 | 2006 | Yes | * | C | M | Cypress Semiconductor, IPG Photonics | |||||||
| Stephen G. Newberry | 63 | 2005 | No | * | Splunk | |||||||||
| Abhijit Y. Talwalkar | 53 | 2011 | Yes (Lead Independent Director) | * | M | C | Advanced Micro Devices, TE Connectivity, iRhythm Technologies | |||||||
| Lih Shyng (Rick L.) Tsai | 66 | 2016 | Yes | MediaTek, USI Corporation | ||||||||||
| Name | Director | Committee Membership(2) | Other Current Public Boards | ||||||||||||||
| Age | Since | Independent(1) | AC | CHC | NGC | ||||||||||||
| Sohail U. Ahmed | 65 | 2019 | Yes | M | |||||||||||||
| Timothy M. Archer | 56 | 2018 | No | * | |||||||||||||
| Eric K. Brandt | 61 | 2010 | Yes | * | C | M | Dentsply Sirona, Gen Digiital, Macerich | ||||||||||
| Michael R. Cannon | 70 | 2011 | Yes | M/FE | C | Seagate Technology | |||||||||||
| John M. Dineen | 60 | 2023 | Yes | Cognizant Technology Solutions, Syneos Health | |||||||||||||
| Ho Kyu Kang | 61 | 2023 | Yes | ||||||||||||||
| Bethany J. Mayer | 61 | 2019 | Yes | M/FE | M | Box, Hewlett Packard Enterprise, Sempra Energy | |||||||||||
| Jyoti K. Mehra | 47 | 2021 | Yes | M | |||||||||||||
| Abhijit Y. Talwalkar | 59 | 2011 | Yes (Chairman) | M | M | Advanced Micro Devices, iRhythm Technologies, TE Connectivity | |||||||||||
| Lih Shyng (Rick L.) Tsai | 72 | 2016 | Yes | M | MediaTek | ||||||||||||
| Leslie F. Varon | 66 | 2019 | Yes | C/FE | Dentsply Sirona, Hamilton Lane | ||||||||||||
| (1) | Independence determined in accordance with Nasdaq rules. |
| (2) | Memberships shown will continue through November 7, 2023, on which date Mr. Dineen will join the audit committee. |
| AC – Audit committee | C – Chair | |||
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Figure 4. Director Nominee Composition Highlights
The Board is committed to diversity and the pursuit of board refreshment and balanced tenure. The following charts show the tenure, age, and diversity of the director nominees. For more information about our Board’s approach to refreshment and diversity, including our board diversity matrix, please refer to the section “ContinuesGovernance Matters - Corporate Governance - Our Approach to Ensuring Board Effectiveness” beginning on next page u11 below.
Figure 5. Director Nominee Key Qualifications, Skills, and Experiences
The table below summarizes the key qualifications, skills, and experiences of our nominees. Not having a mark does not mean the director nominee does not possess that qualification, skill, or experience. The director biographies contained in the “Voting Proposals – Proposal No. 1: Election of Directors – 2023 Nominees for Director” section below describe each director nominee’s background and relevant experience in more detail, and identify those qualifications, skills, and experiences considered most relevant to the decision to nominate candidates to serve on our Board.
| Key Qualifications, Skills & Experiences of Director Nominees | Sohail U. Ahmed | Timothy M. Archer | Eric K. Brandt | Michael R. Cannon | John M. Dineen | Ho Kyu Kang | Bethany J. Mayer | Jyoti K. Mehra | Abhijit Y. Talwalkar | Lih Shyng (Rick L.) Tsai | Leslie F. Varon |
| Industry Knowledge – Knowledge of and experience with our semiconductor and broader technology industries and markets provides our Board members with a deeper understanding of our products and services, the market sectors in which we and our customers compete, and the broader technology end markets that drive demand in our industry. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||
| Customer/Deep Technology Knowledge – Directors who possess deep knowledge and understanding of semiconductor processing equipment technologies, assist our Board in overseeing our business and strategies and enhance the Board’s understanding of our customers’ markets and needs. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||
| ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||
| Leadership Experience – Current or former experience in an executive-level leadership position at a significant business allows our directors to provide the Board with important perspectives and knowledge regarding business strategy, operations, corporate culture, succession planning, and management and leadership best practices. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
Lam Research Corporation 2023 Proxy Statement 3
Table of ContentsFigure 3. Corporate Governance Highlights
| Key Qualifications, Skills & Experiences of Director Nominees | Sohail U. Ahmed | Timothy M. Archer | Eric K. Brandt | Michael R. Cannon | John M. Dineen | Ho Kyu Kang | Bethany J. Mayer | Jyoti K. Mehra | Abhijit Y. Talwalkar | Lih Shyng (Rick L.) Tsai | Leslie F. Varon |
| Finance Experience – Directors with profit and loss (“P&L”) and financing experience as an executive responsible for financial results of a breadth and level of complexity comparable to the Company help our Board oversee the Company’s financial planning, operations, investment strategies, capital allocation, and financial reporting. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||
| Global Business Experience – Experience as a current or former business executive of a business with substantial global operations provides our Board with unique insights on managing an international business, global scale expansion, and understanding cultural norms. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Mergers and Acquisitions (“M&A”) Experience – Directors with M&A and integration experience (including buy- and sell-side and hostile M&A experience) as a public company director or officer provide our Board with key background and insights in assisting management with reviewing strategic alternatives, analyzing potential targets, post-deal integration, and oversight of transactions. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||
| Comparative Board/Governance Experience – Recent or current experience as a director of another public company or significant involvement with the corporate governance requirements and practices of a public company board while serving in a senior leadership position at another public company, provides our Board with an understanding of the board’s role in essential matters, including oversight of strategy, operations, risk, compliance and succession planning, effective interactions with significant stockholders, and the proper dynamics between the board and senior management. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||
| Cybersecurity Experience – An understanding of and/or experience overseeing corporate cybersecurity or information security programs and a history of participation in relevant cyber education, is an increasingly important background for our directors to possess and provides our Board with valuable knowledge in overseeing and navigating cybersecurity threats. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||
| Human Capital Management Experience – Experience serving as a member of the compensation committee of a public company, head of human resources, or as direct manager of the head of human resources, or other experience in setting talent management policies in large organizations, aids our Board in overseeing the management of human capital, including culture, engagement, recruiting, retention, compensation, and succession planning. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||
| Risk Management Experience – Directors with experience serving as a member of the audit committee of a public company, or directly overseeing enterprise risk management or business continuity planning in a large organization, or other experience in managing risk at the enterprise level or in a senior compliance or regulatory role assist our Board in understanding how to effectively evaluate and oversee the management and reporting of enterprise risks. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||
| Manufacturing/Operations Experience – Directors with relevant experience in manufacturing and operations processes or management experience in operations at a company comparable to Lam serve as a valuable asset to our Board and have deeper knowledge of our business, products, services, and customers. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
4
Figure 6. Corporate Governance Highlights
| Board and Other Governance Information | As of September | |||||
| Size of Board as Nominated | 11 | |||||
| Number of Independent Nominated Directors | 10 | |||||
| Number of Nominated Directors Who Attended | 10 | (1) | ||||
| Number of Nominated Directors on More Than Four Public Company Boards | 0 | |||||
| Number of Nominated Non-Employee Executive Officer Directors Who Are | 0 | |||||
| Limitations on Director Commitments, Including Other Board and Committee Memberships and Leadership, With Commitments Evaluated Annually (Page 15) | Yes | |||||
| Directors Subject to Stock Ownership Guidelines (Page 16) | Yes | |||||
| Hedging and Pledging Prohibited (Page 11) | Yes | |||||
| Annual Election of Directors (Page 65) | Yes | |||||
| Voting Standard (Page 65) | Majority | |||||
| Plurality Voting Carveout for Contested Elections | Yes | |||||
| Separate | Yes | |||||
| Independent | Yes | |||||
| Independent Directors Meet Without Management Present (Page 15) | Yes | |||||
| Annual Board (Including Individual Director) and Committee Self-Evaluations (Page 12) | Yes | |||||
| Annual Independent Director Evaluation of CEO (Page 18) | Yes | |||||
| Risk Oversight by Full Board and Committees (Page 18) | Yes | |||||
| Commitment to Board Refreshment and Diversity (Page 12) | Yes | |||||
| Robust Director Nomination Process (Page 14) | Yes | |||||
| Significant Board Engagement (Page 18) | Yes | |||||
| Board Orientation/Education Program (Page 13) | Yes | |||||
| Code of Ethics Applicable to Directors (Page 11) | Yes | |||||
| Stockholder Proxy Access (Pages 14, 82) | Yes | |||||
| Stockholder Ability to Act by Written Consent | Yes | |||||
| Stockholder Engagement Program (Page 20) | Yes | |||||
| Poison Pill | No | |||||
| Board Oversight of ESG (including Climate), Human Capital, Information Security & Political Activities (Page 18) | Yes | |||||
| Publication of | Yes | |||||
| (1) |
Lam Research Corporation 2023 Proxy Statement 5
Figure 4.7. Executive Compensation Highlights
| What We Do |
| Pay for Performance |
| Three-Year Performance Period for Our |
| Absolute and Relative Performance Metrics (Pages |
| Balance of Annual and Long-Term Incentives – Our incentive programs provide a balance of annual and long-term incentives. |
| Different Performance Metrics for Annual and Long-Term Incentive Programs |
| Capped Amounts |
| Compensation Recovery/Clawback Policy |
| Prohibit Option Repricing – Our stock incentive plans prohibit option repricing without stockholder approval. |
| Stock Ownership Guidelines (Page |
| Independent Compensation Advisor (Page |
| Stockholder Engagement (Page 33) – We engage with stockholders on an annual basis and stockholder advisory firms on an as needed basis to obtain feedback concerning our executive compensation program. |
| What We Don’t Do |
| Tax “Gross-Ups” for Perquisites, for Other Benefits or upon a Change in Control (Pages |
| Single-Trigger Change in Control Provisions (Pages |
| (1) | Our executive officers may receive tax gross-ups in connection with relocation benefits |
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Figure 8. ESG Highlights
ContinuesOur ESG strategy supports the success of our business. It provides a framework for meaningful investments, proactive risk management, and globally focused action. Our approach emphasizes engagement, goal setting, and accountability. Our ESG strategy is composed of six key pillars, which are described in greater detail beginning on next page 22 and in our annual ESG report, available at lamresearch.com/company/environmental-social-governance/. We have set goals aligned with our strategy; these goals are highlighted below, together with some of our recent progress. In 2022, we made important strides forward, including surpassing our 2025 water and volunteer hour goals years ahead of schedule. We also received approval from the Science Based Targets initiative (“SBTi”) for our near-term emissions reduction goals.u1
We aim to achieve each of the following goals by calendar year 2025, unless otherwise stated. In the table below, references to specific years are to calendar, not fiscal, years.
| Goals | 2022 Progress | |||
| Governance |
| • Continue to expand our disclosure and alignment with industry-recognized frameworks and standards | • Our efforts to increase disclosure raised our ratings and rankings with third parties | |||
| Product Innovation | ||||
| • 83% of customers measured by emissions set science-based targets (“SBTs”) | • 16.9% of customers measured by emissions have set SBTs | |||
| Sustainable Operations(1) | ||||
• Achieve net zero greenhouse gas (GHG) emissions by 2050 by meeting the following targets: – Achieve 100% renewable electricity(2) by 2030 – Reduce absolute Scope 1 and 2 (market-based) GHG emissions 25% by 2025 and 60.6% by 2030 from a 2019 baseline; by 2040, achieve net zero operations(3) – Achieve 12 million kilowatt-hours (kWh) in total energy savings from a 2019 baseline • Achieve zero waste to landfill for hazardous waste • Achieve 17 million gallons of water savings (15%) in water-stressed regions from a 2019 baseline | • Sourced 44% renewable electricity globally in 2022 • 207% increase in Scope 1 and 2 (market-based) GHG emissions • Achieved 6.9 million kWh in energy savings • Diverted 99.99% of hazardous waste from landfills in 2022 • Achieved 46.9 million gallons of water savings in water-stressed regions, surpassing our 2025 goal by more than 175%; our updated goal will be to achieve 80 million gallons of water savings from a 2019 baseline | |||
| Our Workplace | ||||
•Build on our high-performance culture with global employee engagement at the global benchmark, as measured by our annual employee surveys •Maintain an Occupational Safety and Health Administration recordable injury rate at or below 0.4 annually •Increase the proportion of women (globally) and underrepresented employees (U.S.) across the Company | •Ended the year with an engagement score of 78, one point below the global top tier benchmark of 79 •Realized recordable injury rate of 0.35 in 2022 •Increased the proportion of women in our global workforce by 3.0% and underrepresented employees in the U.S. by 5.0% over 2021 |
(table continues on next page)
| (1) | Renewable electricity, energy savings, waste and water savings data exclude Lam’s subsidiaries Avonisys, Coventor, Metryx, SemSysco, Solmates, and Talus. Scope 1 and 2 (market-based) GHG emissions data exclude Lam’s subsidiaries Avonisys, Solmates and SemSysco. |
| (2) | Previously, this goal targeted 100% renewable energy by 2030. Lam updated this goal in 2022 per the SBTi verification and approval process. |
| (3) | Previously, the 2030 goal targeted a 46% reduction in Scope 1 and 2 (market-based) GHG emissions. Due to a previously unidentified source of Scope 1 emissions, Lam worked with SBTi to update our 2019 emissions inventory and restate our 2030 goal. |
| 1 | The 2030 GHG emissions goal was validated in 2022 and was subsequently restated in 2023 in alignment with SBTi. |
Lam Research Corporation 2023 Proxy Statement 7
| Goals | 2022 Progress | |||
| Responsible Supply Chain | ||||
•Achieve more than 90% compliance rate with our social and environmental expectations across our top-tier suppliers •Engage with at least 50% of our top-tier suppliers on environmental sustainability opportunities •Increase engagement with all suppliers on social and environmental topics through assessment, training, and capacity building •46.5% of suppliers measured by emissions will set SBTs | •Exceeded our goal with 94% of suppliers responding to our conflict minerals survey in 2022 •Exceeded our goal by engaging with 100% of top-tier suppliers in 2022 •Deepened supplier engagement through our inaugural ESG Supplier Forum, new supplier engagement platform, new monthly webinar series and newsletter, and additional trainings via the Responsible Business Alliance (RBA) •14.5% of suppliers as measured by emissions have set SBTs | |||
| Our Communities | ||||
•Determine key targets for larger-scale impact aligned to a new strategic focus •Implement measurement of outcomes for key program and large-scale grants •Increase annual unique participation rate in all employee giving programs from 10% to 30% •Increase employee volunteer hours by 33% from a 2019 baseline | •Achieved goal by launching new social impact framework with three strategic focus areas to guide our giving and signature program initiatives •Began developing a reporting process and measurement outcomes •Increased annual unique employee participation rate from 10% in 2021 to 18% in 2022 •Achieved and surpassed our goal with employees completing 21,133 volunteer hours in 2022 for a total increase of 58% from a 2019 baseline and set a new goal to achieve 40,000 by end of 2025 |
8
| Stock Ownership |
Security Ownership of Certain Beneficial Owners and Management
The table below sets forth the beneficial ownership of shares of Lam common stock by: (1) each person or entity who we believe, based on our review of filings made with the United States Securities and Exchange Commission, or the “SEC,”SEC, beneficially owned as of September 11, 2017, more than 5% of Lam’s common stock on the date set forth below; (2) each current director of the Company; (3) each NEO identified below in the “Compensation Matters – Executive Compensation and Other Information – Compensation Discussion and Analysis” section; and (4) all current directors and current executive officers as a group. With the exception
of 5% owners, and unless otherwise noted, the information below reflects holdings as of September 11, 2017,8, 2023, which is the Record Date for the 2017 annual meeting2023 Annual Meeting of Stockholders and the most recent practicable date for determining ownership. For 5% owners, holdings are as of the dates of their most recent ownership reports filed with the SEC, which are the most practicable dates for determining their holdings. The percentage of the class owned is calculated using 162,496,503132,222,362 as the number of shares of Lam common stock outstanding on September 11, 2017.
8, 2023.
Figure 5.9. Beneficial Ownership Table
| Name of Person or Identity of Group | Shares Beneficially Owned (#)(1) | Percentage of Class | ||
| 5% Stockholders | ||||
| The Vanguard Group 100 Vanguard Boulevard Malvern, PA 19355 | 11,788,267 | (2) | 8.92% | |
| BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | 11,026,970 | (3) | 8.34% | |
| Directors | ||||
| Sohail U. Ahmed | 2,694 | * | ||
| Timothy M. Archer (also a Named Executive Officer) | 150,646 | * | ||
| Eric K. Brandt | 28,115 | * | ||
| Michael R. Cannon | 18,310 | * | ||
| John M. Dineen | — | — | ||
| Ho Kyu Kang | 452 | * | ||
| Bethany J. Mayer | 2,690 | * | ||
| Jyoti K. Mehra | 1,020 | * | ||
| Abhijit Y. Talwalkar | 12,999 | * | ||
| Lih Shyng (Rick L.) Tsai | 7,090 | * | ||
| Leslie F. Varon | 2,465 | * | ||
| Named Executive Officers (“NEOs”) | ||||
| Douglas R. Bettinger | 96,966 | * | ||
| Patrick J. Lord | 17,774 | * | ||
| Vahid Vahedi | 24,712 | * | ||
| Seshasayee (Sesha) Varadarajan | 37,560 | * | ||
| All current directors and executive officers as a group (17 people) | 418,330 | * |
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| * | Less than 1% |
Lam Research Corporation 2023 Proxy Statement 9
| (1) | Includes shares subject to outstanding stock options that are now exercisable or will become exercisable within 60 days after September |
| Shares | |||||
| Sohail U. Ahmed | |||||
| Timothy M. Archer | 62,405 | ||||
| Eric K. Brandt | 563 | ||||
| Michael R. Cannon | 563 | ||||
| John M. Dineen | — | ||||
| Ho Kyu Kang | 452 | ||||
| Bethany J. Mayer | 563 | ||||
| Jyoti K. Mehra | 563 | ||||
| Abhijit Y. Talwalkar | 563 | ||||
| Lih Shyng (Rick L.) Tsai | 563 | ||||
| Leslie F. Varon | 563 | ||||
| Douglas R. Bettinger | 3,545 | ||||
| Patrick J. Lord | 6,881 | ||||
| Vahid Vahedi | 1,514 | ||||
| Seshasayee (Sesha) Varadarajan | 15,270 | ||||
| All current directors and executive officers as a group | 98,027 |
The terms of any outstanding stock options that are now exercisable or will become exercisable within 60 days after September 8, 2023, and RSUs that will vest within that time period, are reflected in “Figure 31. FYE201755. Outstanding Equity Awards.Awards at Fiscal Year 2023 Year-End,” except as described in the following sentences. Ava M. Hahn has options covering 3,456 shares, which are unexercised and exercisable within 60 days of September 8, 2023. The grants for Ms. Hahn have terms consistent with the terms reflected in “Figure 55. Outstanding Equity Awards at Fiscal Year 2023 Year-End.”
As discussed in “Governance Matters – Director Compensation” below, the non-employee directors receive an annual equity grantaward as part of their compensation. These grantsawards generally vest on October 31, 2017,2023, subject to continued service on the board as of that date, with immediate delivery of the shares upon vesting. For 2017, Drs. El-Mansy and Tsai;2023, Messrs. Ahmed, Brandt, Cannon, Newberry and Talwalkar; Mses. Mayer, Mehra and Mses. HeckartVaron; and LegoDr. Tsai each received grantsawards of 2,050563 RSUs. TheseDr. Kang, who was appointed as a director following the annual equity grant, received a pro-rated grant for 2023 of 452 RSUs, arewhich is included in the tables above. As of November 11, 2016, Dr. Koh had not yet been appointed to the board of the Company. In accordance with the Company’s non-employee director compensation program, Dr. Koh received a pro-rated equity award of 1,000 RSUs (or 75% of the $200,000 targeted grant date value, with the number of RSUs determined in the same manner as an annual equity award) on May 12, 2017, the first Friday following his first attended board meeting.
| (2) | All information regarding The Vanguard Group |
| (3) | All information regarding BlackRock Inc. |
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| Governance Matters |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers, directors, and people who own more than 10% of a registered class of our equity securities to file an initial report of ownership (on a Form 3) and reports on subsequent changes in ownership (on Forms 4 or 5) with the SEC by specified due dates. Our executive officers, directors, and greater-than-10% stockholders are also required by SEC rules
to furnish us with copies of all section 16(a) forms they file. We are required to disclose in this proxy statement any failure to file any of these reports on a timely basis. Based solely on our review of the copies of the forms that we received from the filers, and on written representations from certain reporting persons, we believe that all of these requirements were satisfied during fiscal year 2017.
Our Board and members of management are committed to responsible corporate governance to manage the Company for the long-term benefit of its stockholders. To that end, the Board and management periodically review and update, as appropriate, the Company’s corporate governance policies and practices. As part of that process, the Board and management consider the requirements of federal and state law, including rules and regulations of the SEC; the listing standards for the Nasdaq Global Select Market or “Nasdaq;”(“Nasdaq”); published guidelines and recommendations of proxy advisory firms; published guidelines of some of our top stockholders; published guidelines of other selected public companies; and any feedback we receive from our stockholders. A list of key corporate governance practices is provided in the “Proxy Statement Summary” above.
We have instituted a variety of policies and procedures to foster and maintain responsible corporate governance, including the following:
Board committee charters. Each of the Board’s audit, compensation,Figure 10. Policies and nominating and governance committees has a written charter adopted by the Board that establishes practices and procedures for the committee in accordance with applicable corporate governance rules and regulations. Each committee reviews its charter annually and recommends changes to the Board, as appropriate. Each committee charter is available on the Investors section of our website athttp://investor.lamresearch.com/corporate-governance.cfm. The content on any website referred to in this proxy statement is not a part of or incorporated by reference in this proxy statement unless expressly noted. Also see “Board Committees” below for additional information regarding these committees.Procedures Summary
| Policy or Procedure | Summary | ||
| Board committee charters* | Each of the Board’s audit, compensation and human resources, and nominating and governance committees has a written charter adopted by the Board that delegates authority and responsibilities to the committee. Each committee reviews its charter, and the nominating and governance committee reviews the charters of all of the committees, annually and recommends changes to the Board, as appropriate. See “Board Committees” below for additional information regarding these committees. | ||
| Corporate governance guidelines* |
Selected provisions of the guidelines are discussed below, including in the “Board Nomination Policies and Procedures,” “Director Independence Policies,” and “Other Governance Practices” sections below. | ||
| Corporate Code of Ethics* | We maintain a code of ethics that applies to all employees, officers, and members of the Board. The code of ethics establishes standards reasonably necessary to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, and full, fair, accurate, timely, and understandable disclosure in the periodic reports we file with the SEC and in other public communications. We will promptly disclose to the public any amendments to, or waivers from, any provision of the code of ethics to the extent required by applicable laws. We intend to make this public disclosure by posting the relevant material on our website, to the extent permitted by applicable laws. | ||
| Global Standards of Business Conduct* | We maintain written standards of business conduct to address a variety of situations that apply to our worldwide workforce. Among other things, these global standards of business conduct address relationships and/or conduct with one another, with Lam (including conflicts of interest, safeguarding of Company assets, and protection of confidential information), and with other companies and stakeholders (including anti-corruption). | ||
| Insider Trading Policy | Our insider trading policy restricts the trading of Company stock by our directors, officers, and employees, and includes provisions addressing insider blackout periods and prohibiting pledges of Company stock, and prohibiting such persons from engaging in hedging transactions, such as “cashless” collars, forward sales, equity swaps and other similar arrangements. Investments in exchange funds are permitted if the fund is broadly diversified and comprises less than 2% of Company stock; exceptions to the 2% threshold may be permitted on a case-by-case basis. |
| * | A copy is available on the Investors section of our website at investor.lamresearch.com/corporate-governance. |
Our Approach To Ensuring Board Effectiveness
As part of the Board’s commitment to responsible corporate governance, we have developed a number of practices that together serve to ensure that, over time, the Board continues to function in an effective manner that serves the long-term interests of the Company and its stockholders. Several of the practices that we consider to be most important are summarized in Figure 11 below, and the practices themselves are described in greater detail below.
Lam Research Corporation 2023 Proxy Statement 11
Figure 11. Board Effectiveness Practices
Board and committee evaluations. Every year, the Board conducts a self-evaluation of the Board, its committees, and the individual directors, overseen by the nominating and governance committee. From time to time, the evaluation is facilitated by an independent third-party consultant. The evaluation solicits the opinions of the directors regarding the effectiveness of the Board, Board committees, and individual directors in fulfilling their obligations. Feedback on Board effectiveness is provided to the full Board for discussion, feedback on each committee’s effectiveness is provided to the committee for discussion, and feedback regarding individual director performance is provided to each individual director. The Board and committees identify and hold themselves accountable for action items stemming from the evaluation. The results of the evaluations are also considered by the nominating and governance committee and the Board. Selected provisionsBoard as part of the guidelines are discussed below, including in the “director nomination process.
Board Nomination Policiescomposition, diversity and Procedures,refreshment.” “Director Independence Policies,” and “Other Governance Practices” sections below. The corporate governance guidelines are available on the Investors section of our website athttp://investor.lamresearch.com/corporate-governance.cfm.
Corporate code of ethics. We maintain a code of ethics that applies to all employees, officers, and members of the Board.
The code of ethics establishes standards reasonably necessary to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, and full, fair, accurate, timely, and understandable disclosure in the periodic reports we file with the SEC and in other public communications. We will promptly disclose to the public any amendments to, or waivers from, any provision of the code of ethics to the extent required by applicable laws. We intend to make this public disclosure by posting the relevant material on our website, to the extent permitted by applicable laws. A copy of the code of ethics is available on the Investors section of our website athttp://investor.lamresearch.com/corporate-governance.cfm.
Global standards of business conduct policy. We maintain written standards of appropriate conduct in a variety of business situations that apply to our worldwide workforce. Among other things, these global standards of business conduct address relationships with one another, relationships with Lam (including conflicts of interest, safeguarding of Company assets, and protection of confidential information), and relationships with other companies and stakeholders (including anti-corruption).
Insider trading policy. Our insider trading policy restricts the trading of Company stock by our directors, officers, and employees, and includes provisions addressing insider blackout periods and prohibiting hedges and pledges of Company stock.
Board Nomination Policies and Procedures
Board membership criteria. Under our corporate governance guidelines, the nominating and governance committee is responsible for assessing the appropriate balance of experience, skills, and characteristics required for the Board and for recommending director nominees to the independent directors.
The guidelines direct the committee to consider all factors it considers appropriate. The committee need not consider all of the same factors for every candidate. Factors to be considered may include but are not limited to: experience; business acumen; wisdom; integrity; judgment; the ability to make independent analytical inquiries; the ability to understand the Company’s business environment; the candidate’s willingness and ability to devote adequate time to board duties; specific skills, background, or experience considered necessary or desirable for board or committee service; specific experiences with other businesses or
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organizations that may be relevant to the Company or its industry; diversity with respect to any attribute(s) the Board considers appropriate, including geographic, gender, age, and ethnic diversity; and the interplay of a candidate’s experiences and skills with those of other Board members.
The specific skills, background, and experiences that are evaluated in connection with board service include (but are not limited to or required):
The Board and the nominating and governance committee regard board refreshment as important, and strive to maintain an appropriate balance of tenure, turnover, diversity, and skills onto meet the needs of the Company and the Board. In consideration of the Company’s evolving strategic priorities and as part of its refreshment planning, the nominating and governance committee regularly evaluates the Board’s composition, skills and experiences and diversity, and directors’ time commitments and committee assignments, to ensure that the Board functions effectively. See “Proxy Statement Summary - Figure 5. Director Nominee Key Qualifications, Skills, and Experiences” and “Proxy Statement Summary - Figure 4. Director Nominee Composition Highlights” for additional information regarding the key qualifications, skills and experiences considered by the Board and the nominating and governance committee in nominating our nominees. Since 2020, the Board has gained three new independent directors, two of whom are diverse in terms of gender identity, ethnicity or race, as shown in Figure 12.
ForFigure 12. Refreshment of Independent Directors Since 2020
The Board is committed to diversity, and for many years, the composition of the Board has reflected that commitment. The Board believes that board diversity is important to serving the Board’s commitmentlong-term interests of the Company’s stockholders. In identifying potential director candidates outside the Company, the nominating and governance committee is committed to diversity. For example,actively seeking out qualified candidates who reflect diverse backgrounds, skills and experiences, including diversity of geography, gender identity, LGBTQ+
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identity, age, race and ethnicity, and classification as a member of an underrepresented minority, to include in the pool from which Board nominees are chosen, and any third-party search firms retained for a related search will be instructed to include such candidates in initial lists of candidates they prepare. Every year since 2006, the Board has had at least two female directors, and since 2006,2019 we have had either three or four female directors. We began asking directors to self-identify their ethnicity/race beginning in 2020 and their gender identity and LGBTQ+ identity beginning in 2022, and have reported those metrics for the current and prior years in Figure 13 below. As illustrated in “Proxy Statement Summary - Figure 4. Director Nominee Composition Highlights”, 64% of our nominees are diverse overall, with 27% of our nominees being diverse on the basis of gender identity and 45% on the basis of ethnicity/race. In addition, over a number of years, the last 10 yearsBoard has appointed directors who have expanded the experiences, and areas of substantive expertise, and geographic and industry diversity of the directors,Board, as illustrated by the information provided in their biographies under “Voting Proposals –- Proposal No. 1: Election of Directors – 2017- 2023 Nominees for Director” below. Most recently,
Figure 13. Board Diversity Matrix(1)
| As of September 8, 2023 | As of September 9, 2022 | ||||||||||
| Total number of directors | 11 | 10 | |||||||||
| Part I: Gender Identity | Female | Male | Non-Binary | Did Not Disclose Gender | Female | Male | Non-Binary | Did Not Disclose Gender | |||
| Directors | 3 | 8 | – | – | 4 | 6 | – | – | |||
| Part II: Demographic Background | |||||||||||
| African American or Black | – | – | – | – | – | – | – | – | |||
| Alaskan Native or Native American | – | – | – | – | – | – | – | – | |||
| Asian | 1 | 4 | – | – | 1 | 3 | – | – | |||
| Hispanic or Latinx | – | – | – | – | – | – | – | – | |||
| Native Hawaiian or Pacific Islander | – | – | – | – | – | – | – | – | |||
| White (not of Hispanic or Latinx origin) | 2 | 4 | – | – | 3 | 3 | – | – | |||
| Two or More Races or Ethnicities | – | – | – | – | – | – | – | – | |||
| LGBTQ+ | – | – | – | – | – | – | – | – | |||
| Did Not Disclose Demographic Background | – | – | – | – | – | – | – | – | |||
| (1) | Diversity is presented according to the categories and definitions specified in Nasdaq Rule 5605(f). |
The Board is also committed to the pursuit of Board has increased its geographic diversity with the appointment of two directors whose careers include significant leadership
experience with major non-U.S. customersrefreshment and who reside in Asia.
Regarding tenure, thebalanced tenure. The Board believes that new perspectives and ideas are important to a forward-looking and strategic board, as is the ability to benefit from the valuable experience and familiarity of longer-serving directors. In linedirectors who can leverage their experience with the Board’s pursuit of boardCompany and with the industry and business environment in which the Company operates. Our corporate governance guidelines do not impose a term limit on Board service; however, the Board regularly assesses the directors’ tenure mix and strives to maintain a balance that will ensure both fresh perspectives and experience on the Board. In addition, our corporate governance guidelines impose an age limitation for directors to be nominated to the Board, as described under “Board Nomination Policies and Procedures - Board Membership Criteria” below.
The Board also considers refreshment and balanced tenure including considerationwith respect to the leadership and membership of any resignations,its standing committees, and the nominating and governance committee evaluates short-term and long-term roadmaps for committee membership and leadership on a regular basis. When reviewing committee assignments, the nominating and governance committee considers the rotation of chairs and members with a view toward balancing the benefits derived from the diversity of experience and viewpoints of the various directors. The nominating and governance committee also considers individual directors’ skills, experiences and qualifications, prior committee experience, and other positions and commitments.
Director onboarding and education. To ensure that new directors are able to effectively participate in and contribute to the Board appointed twoas quickly as possible, we provide a comprehensive orientation and onboarding program for our new directors. Upon joining the Board, new directors withinparticipate in an orientation program which includes introductions to other Board members and our senior management team, and in depth learning about our industry, business, technology, operations, culture, people, performance, strategic plans, risk management and corporate governance practices, among other topics. The onboarding process also includes tours of one or more of our manufacturing or lab facilities. These in-person tours were paused during the last fiscal year,COVID-19 pandemic but have recently resumed. First time directors (i.e. those without prior public company board experience) are encouraged to attend an outside course shortly after joining the Board.
Our Board is also committed to ongoing education. Our corporate governance guidelines provide that directors are expected to participate in educational events sufficient to maintain their understanding of their duties as directors and has appointed 12to enhance their ability to fulfill their responsibilities. In addition to any external educational opportunities that the directors find useful, the Company and the board leadership are expected to facilitate such participation by arranging for appropriate educational presentations from time to time. In 2022, our Board heard from external advisors on multiple subjects, including cybersecurity, employee engagement and retention, and the economic and political climate in China.
Lam Research Corporation 2023 Proxy Statement 13
Board Nomination Policies and Procedures
Board membership criteria. Under our corporate governance guidelines, the nominating and governance committee is responsible for recommending nominees to the independent directors, and the independent directors nominate the slate of directors for approval by our stockholders. In making its recommendations, whether for new or incumbent directors, the nominating and governance committee assesses the appropriate balance of experience, skills, and characteristics required for the Board at the time.
Our corporate governance guidelines set out a non-exclusive list of factors to be considered by the nominating and governance committee in recommending nominees, which were selected by the last 10 years.
PriorBoard to recommendingensure proper board composition and effectiveness. These factors are reviewed and updated by the nominationBoard on a regular basis. In May 2023, the factors were updated to include additional diversity attributes. The factors include, but are not limited to:
In addition, our corporate governance guidelines provide that a director may not be nominated for re-election or reappointment to the Board at that time.
after having attained the age of 75 years. To be nominated, a new or incumbent candidate must provide an irrevocable conditional resignation that will be effective upon (1) the director’s failure to receive the required majority vote at an annual meeting at which the nominee faces re-election and (2) the Board’s acceptance of such resignation. In addition, no director, after having attained
Upon the agerecommendations of 75 years, may bethe nominating and governance committee, the independent members of the Board have nominated all of our current directors for re-election or reappointmentto serve on the Board. Each nominee’s key qualifications, skills, and attributes considered most relevant to the Board.nomination of the candidate to serve on the Board are reflected in their biography under “Voting Proposals-Proposal No. 1: Election of Directors - 2023 Nominees for Director” below. For a summary of the key qualifications, skills, and attributes of the nominees to the Board, see “Proxy Statement Summary - Figure 5. Director Nominee Key Qualifications, Skills, and Experiences.”
Nomination procedure. The nominating and governance committee sets specific qualifications for new directors, and identifies, screens, evaluates, and recommends qualified candidates for appointment or election to the Board. The committee considers recommendations from a variety of sources, including search firms, Board members, executive officers, and stockholders. Nominations for election by the stockholders are made by the independent members of the Board. New candidates to join the Board typically meet with our chair, our lead independent director (if applicable), members of the nominating and governance committee, additional board members, and our president and CEO, as well as representatives of the Company’s executive team, prior to being considered for recommendation by the nominating and governance committee for appointment to the Board. See “Voting Proposals –- Proposal No. 1: Election of Directors – 2017- 2023 Nominees for Director” below for additional information regarding the 20172023 candidates for election to the Board.
Certain provisions of ourThe nominating and governance committee will consider for nomination persons properly nominated by stockholders in accordance with the Company’s bylaws apply to theand nomination or recommendation of candidates by a stockholder. For example, in February 2017, the Board amended and restated ourprocedures. Our bylaws to provide that under certain circumstances, a stockholder, or group of up to 20 stockholders, who have maintained continuous ownership of at least three percent (3%) of our common stock for at least three years may nominate and include a specified number of director nominees in our annual meeting proxy statement that cannot exceed the greater of two or 20% of the aggregate number of directors then serving on the Board (rounded down). Information regarding the nomination procedureprocedures is provided in the “Voting and Meeting Information –- Other Meeting Information – Stockholder-Initiated- Stockholder - Initiated Proposals and Nominations for 20182024 Annual Meeting” section below. Subject to then-applicable law, stockholder nominations for director will be evaluated by the Company’s nominating and governance committee in accordance with the same criteria as are applied to candidates identified by the committee or other sources.
Director Independence Policies
Board independence requirements. Our corporate governance guidelines require that a majority of the Board members be independent. The nominating and governance committee annually reviews the independence of each director, including with respect to the Board and each individual committee, and recommends to the Board director independence determinations made with
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respect to continuing and prospective directors. No director will qualify as “independent” unless the Board affirmatively determines that the director qualifies as independent under the Nasdaq rules and has no relationship that would interfere with the exercise of independent judgment as a director. In addition, no non-employee director may serve as a consultant or service provider to the Company without the approval of a majority of the independent directors (and any such director’s independence must be reassessed by the full Board following such approval).
Board member independence. The Board has determined that all current directors and persons who served as directors during any part of fiscal year 2023, other than Messrs. Anstice and Newberry,Mr. Archer, are independent in accordance with Nasdaq criteria for director independence. In making the determination, the Board considered prior employment with the Company, disclosed related party transactions, known familial relationships of directors with employees (not involving immediate family members) and commercial transactions involving other parties with common directorships, none of which qualified as related party transactions or were considered by the Board to interfere with the exercise of independent judgment as a director.
Board committee independence. All members of the Board’s audit, compensation and human resources, and nominating and governance committees must be non-employee or outside directors and independent in accordance with applicable Nasdaq criteria as well as in the case of the compensation committee, applicable rules under section 162(m) of the Internal Revenue Code of 1986, as amended, or the “Code,” and Rule 16b-3 ofunder the Securities Exchange Act of 1934, as amended, or the “Exchange Act.” See “Board Committees” below for additional information regarding these committees.
Lead independent director. Our corporate governance guidelines authorize the Board to designate a lead independent director from among the independent members. Mr. Talwalkar was appointed the lead independent director, effective August 27, 2015. SeeAs described below under “Leadership Structure of the Board,” below for information regarding the responsibilitiesan independent director, Mr. Talwalkar, currently serves as chairman of the Board, and as a result, the Board has not designated a lead independent director.
Executive sessions of independent directors. The Board and its audit, compensation and human resources, and nominating and governance committees hold meetings of the independent directors and committee members, without management present, as part of each regularly scheduled meeting and at any other time at the discretion of the Board or committee, as applicable.
Board access to independent advisors. The Board as a whole, and each standing Board committee separately, has the complete authority to retain, at the Company’s expense, and terminate, in their discretion, any independent consultants, counselors, or advisors as they deem necessary or appropriate to fulfill their responsibilities.
Board education program. Our corporate governance guidelines provide that directors are expected to participate in educational events sufficient to maintain their understanding of their duties as directors and to enhance their ability to fulfill their responsibilities. In addition to any external educational
opportunities that the directors find useful, the Company and the board leadership are expected to facilitate such participation by arranging for appropriate educational presentations from time to time.
Leadership Structure of the Board
The currentCompany’s governance framework provides the Board with the authority and flexibility necessary to select the appropriate leadership structure for the Board. In making determinations about the leadership structure, the Board considers many factors, including the specific needs of the business and what is in the best interests of the Company’s stockholders.
Under our corporate governance guidelines, the Board’s leadership structure includes a chair and may also include a separate lead independent director. Currently, Mr. Talwalkar, an independent director, serves as chairman of the Board, consists ofand as a chairman andresult, the Board has not designated a lead independent director.
The chairman, Mr. Newberry, served as chief executive officer of the Company from June 2005 to January 2012. The Board believes that this is the appropriate board leadership structure at this time. Lam and its stockholders benefit from having Mr. Newberry as its chairman, as he brings to bear his experience as CEO as well as his other qualifications in carrying out his responsibilities as chairman, whichchair’s duties include (1) preparing the agenda for the Board meetings with input from the CEO, the Board, and the committee chairs; (2) upon invitation, attending meetings of any of the Board committees onof which he isthey are not a member; (3) conveying to the CEO, together with the chair of the compensation and human resources committee, the results of the CEO’s performance evaluation; (4) reviewing proposals submitted by stockholders for action at meetings of stockholders and, depending on the subject matter, determining the appropriate body, among the Board or any of the Board committees, to evaluate each proposal, and making recommendations to the Board regarding action to be taken in response to such proposal; (5) as requested by the Board, providing reports to the Board on the chair’s activities; (6) coordinating and developing the agenda for, and moderating executive sessions of the Board’s independent directors; (7) conveying to the CEO, as appropriate, discussions from executive sessions of the Board’s independent directors; and (8) performing such other duties as the Board may reasonably request from time to time; and (6) providing reports to the Board on the chairman’s activities under his agreement. The Company and its stockholders also benefit from having a lead independent director to provide independent board leadership. The lead independent director is responsible for: (1) coordinating the activities of the independent directors; (2) consulting with the chairman regarding matters such as (a) schedules of and agendas for Board meetings, (b) the quality, quantity, and timeliness of the flow of information from management, and (c) the retention of consultants who report directly to the Board; and (3) developing the agenda for and moderating executive sessions of the Board’s independent directors.time.
In addition to the principal policies and procedures described above, we have established a variety of other practices to enhance our corporate governance, including the following:
Board and committee assessments. Every year, the Board conducts a self-evaluation of the Board, its committees, and the individual directors, overseen by the nominating and governance committee and generally led by the lead independent director and the chairman of the Board. From time to time, the evaluation is facilitated by an independent third-party consultant. The evaluation solicits the opinions of the directors regarding the effectiveness of the Board, committees, and individual directors in fulfilling its/their
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obligations. Feedback on Board and committee effectiveness is provided to the full Board for discussion, and feedback regarding individual director performance is provided to each individual director. The Board and committees identify and hold themselves accountable for any action items stemming from the assessment. The results of the evaluations are also considered as part of the director nomination process.
Director resignation or notification of change in executive officer status. Under our corporate governance guidelines, any director who is also an executive officer of the Company must offer to submit his or hertheir resignation as a director to the Board if the director ceases to be an executive officer of the Company. The Board may accept or decline the offer, in its discretion. The corporate governance guidelines also require a non-employee director to notify the nominating and governance committee if the director changes or retires from his or hertheir executive position at another public company. The nominating and governance committee reviews the appropriateness of the director’s continuing Board membership under the circumstances, and the director is expected to act in accordance with the nominating and governance committee’s recommendations.
Limitations on director commitments, including other board and committee memberships.memberships and leadership. The Board believes that it is critical that directors dedicate sufficient time to their service on the Board. Under our corporate governance guidelines, the nominating and governance committee considers a director’s other board and committee leadership positions and
Lam Research Corporation 2023 Proxy Statement 15
memberships that may affect a director’s ability to contribute effectively to the Board, and evaluates director commitments at least annually. In particular, our corporate governance guidelines provide that Board members may not serve on more than four public company boards (including service on the Company’s Board). Non-employee directors who are sitting executivesexecutive officers at other public companies may not serve on more than threetwo public company boards (including the Company’s Board). The nominating and governance committee will review the appropriateness of continued Board membership if a non-employee director who is a sitting executive serves on more than two such boards, and the director is expected to follow the recommendation of the nominating and governance committee. In addition, non-employee directors may not serve on more than three audit committees of public company boards (including the Company’s audit committee)., unless approved by the nominating and governance committee. Finally, the Company’s CEO may not serve on more than one other public company board without obtaining prior approval of such directorship by the nominating and governance committee. All of our directors are currently in compliance with the limitations on director commitments in our corporate governance guidelines.
Director and executive stock ownership. Under the corporate governance guidelines, each non-employee director is expected to own at least the lesser of five times the value of the annual cash retainer (not including any committee chair or other supplemental retainers for directors) or 5,000 shares of Lam common stock, by the fifth anniversary of his or hertheir initial election to the Board. The requirements are specified in the alternative of shares or dollars to allow for stock price volatility. The dollar alternative is translated into a number of shares by dividing the applicable multiple of the annual cash retainer by the average closing price of our common stock for the 30 trading days through June 30 of the most recently-completed fiscal year as of the measurement date. Guidelines for stock ownership by designated members of the executive management team are described below under “Compensation Matters –- Executive Compensation and Other Information –- Compensation Discussion and Analysis.” All of our directors and designated members of our executive management team were in compliance with the Company’s applicable stock ownership guidelines at the end of fiscal year 20172023 or have a period of time remaining under the programguidelines to do so.meet the requirements.
Communications with Boardboard members. Any stockholder who wishes to communicate directly with the Board, with any Board committee, or with any individual director regarding the
Company may write to the Board, the committee, or the director c/o Secretary, Lam Research Corporation, 4650 Cushing Parkway, Fremont, California 94538. TheSubject to certain exceptions specified in our corporate governance guidelines, the Secretary will forward all such communications to the appropriate director(s).
Any stockholder, employee, or other person may communicate any complaint regarding any accounting, internal accounting control, or audit matter to the attention of the Board’s audit committee by sending written correspondence by mail (to Lam Research Corporation, Attention: Board Audit Committee, P.O. Box 5010, Fremont, California 94537-5010) or by telephone (855-208-8578) or internet (through the Company’s third-party provider website atwww.lamhelpline.ethicspoint.com)www.lamhelpline.ethicspoint.com). The audit committee has established procedures to ensure that employee complaints or concerns regarding audit or accounting matters will be received and treated anonymously (if the complaint or concern is submitted anonymously and if permitted under applicable law).
Our Board held a total of sixfive meetings during fiscal year 2017.2023. The number of committee meetings held is shown in Figure 6.below under “Board Committees”. All of the directors attended at least 75% of the aggregate number of Board meetings and meetings of Board committees on which they served during their tenure in fiscal year 2017, with the exception of Mr. Cannon due to medical reasons. We expect his attendance going forward to be consistent with prior years.2023.
We expect our directors to attend the annual meeting of stockholders each year unless unusual circumstances make attendance impractical. All but one of the individuals who were directors as of the 20162022 annual meeting of stockholders attended that meeting.
The Board has three standing committees: an audit committee, a compensation and human resources committee, and a nominating and governance committee. The purpose,functions, membership, and charter of each are described below. Copies of each committee’s charter are available on the Investors section of our website at investor.lamresearch.com/corporate-governance.
Figure 6.Audit Committee Membership
| Current Committee Memberships | ||||||
| Name | Audit | Compensation | Nominating and Governance | |||
| Eric K. Brandt | Chair | |||||
| Michael R. Cannon | x | x | ||||
| Youssef A. El-Mansy | x | |||||
| Christine A. Heckart | x | |||||
| Catherine P. Lego | Chair | x | ||||
| Abhijit Y. Talwalkar | x | Chair | ||||
| Total Number of Meetings Held in FY2017 | 9 | 6 | 4 | |||
Key responsibilities:
Audit committee. The purpose of the audit committee is to oversee the Company’s accounting and financial reporting processes, internal audit program, and the audits of ourits financial statements, including the system of internal controls. As part of its responsibilities,controls;
| 2 | Mr. Ahmed joined the committee on November 7, 2022. |
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The Board concluded that all members of the audit committee, and persons who served as members of the audit committee during any part of fiscal year 2023, are non-employee directors who are independent in accordance with the Nasdaq listing standards and SEC rules for audit committee member independence and thatindependence. Furthermore, each audit committee member is able to read and understand fundamental financial statements as required by the Nasdaq listing standards. Thestandards, and the Board alsohas determined that Messrs. BrandtMr. Cannon and Cannon (both members of the committee)Mss. Mayer and Varon are each and Messrs. Anstice, Newberry, and Talwalkar and Ms. Lego (members of the Board) each qualify as, an “audit committee financial expert” as defined in the SEC rules.
Compensation committee. The purposeEffective November 7, 2023, John M. Dineen will become a member of the audit committee.
Compensation and Human Resources Committee
Membership as of September 8, 2023:3Eric K. Brandt (Chair), Jyoti K. Mehra, Abhijit Y. Talwalkar, and Lih Shyng (Rick L.) Tsai Meetings held in fiscal year 2023: Five
Key responsibilities:
The Board concluded that all members of the compensation and human resources committee, and persons who served as members of the committee during any part of fiscal year 2023, are non-employee directors who are independent in accordance with Rule 16b-3 ofunder the Exchange Act and the Nasdaq criteria for director and compensation committee member independence and who are outside directors for purposes of section 162(m) of the Code.independence.
Nominating and governance committee. The purposeGovernance Committee
Membership as of the nominatingSeptember 8, 2023:4Eric K. Brandt, Michael R. Cannon (Chair), Bethany J. Mayer, and governance committee is to Abhijit Y. Talwalkar Meetings held in fiscal year 2023: Four
Key responsibilities:
The Board concluded that all members of the nominating and governance committee, charter is available onand persons who served as members of the Investors section of our website athttp://investor.lamresearch.com/corporate-governance.cfm.
The Board concluded that all nominating and governance committee membersduring any part of fiscal year 2023, are non-employee directors who are independent in accordance with the Nasdaq criteria for director independence.
| 3 | Ms. Mehra joined the committee on November 7, 2022. |
| 4 | Ms. Mayer joined the committee on November 7, 2022. |
The nominating and governance committee will consider for nomination persons properly nominated by stockholders in accordance with the Company’s bylaws and other procedures described below under “Voting and Meeting Information – Other Meeting Information – Stockholder-Initiated Proposals and Nominations for 2018 Annual Meeting.” Subject to then-applicable law, stockholder nominations for director will be evaluated by the Company’s nominating and governance committee in accordance with the same criteria as is applied to candidates identified by the nominating and governance committee or other sources.Lam Research Corporation 2023 Proxy Statement 17
Board’s Role and Engagement
General. The Board directs and oversees the management of the business and affairs of the Company. In this oversight role, the Board serves as the ultimate decision-making body of the Company, except for those matters reserved for the stockholders. Board agendas facilitate dialogue between the Board and management regarding drivers of long-term stockholder value and key strategic and operational risks. The Board’s and its committees’ agendas include both regular, recurring topics as well as time for special agenda topics that are scheduled on an as-needed basis by the Board or committee chairs, as applicable.
The Board and its committees have the primary responsibilities of:
for:
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Risk Oversight. Effective and comprehensive risk management processesis critical to our Company’s success, given the dynamic economic, geopolitical, and programs, describedsocial landscape in further detail below.
Risk oversight. Thewhich we operate. Our Board is actively engaged in risk oversight. Management regularly reports to the Board onoversight both directly and through its risk assessments and risk mitigation strategies for the major risks of our business. Generally,committees. As a general matter, the Board exercises its oversight responsibility directly; however,directly, including overseeing management’s implementation of the Company’s Enterprise Risk Management (“ERM”) program. In addition, the Board delegates oversight of certain risks to its various committees as further detailed below. The Board, and as applicable, each of its committees, oversees the Company’s risk profile by regularly reviewing management’s assessment of the Company’s material risks and evaluating management’s risk mitigation strategies.
The Company’s ERM program is a enterprise-wide program designed to leverage existing management processes to enable effective identification of critical enterprise risks, design and implementation of appropriate risk mitigation strategies, and regular assessment of the status of risks and mitigation plans. The ERM program (i) establishes a comprehensive, enterprise-wide system to identify, evaluate, manage, and report risks, (ii) clearly defines management’s roles and responsibilities by allocating responsibility for specific risks to specific members of our senior management team, and (iii) facilitates dialogue between senior management and the Board regarding the Company’s top risks.
As part of the ERM framework, our management team seeks to create a comprehensive index of the Company’s top enterprise risks by gathering information and input regarding specific categories of risk from designated individuals representing each of the Company’s business units on a quarterly basis. The ERM process involves both identification and ranking of the Company’s top risks. The imminence and timeframe of each relevant enterprise risk informs, in part, the relevant risk mitigation strategy and response time. Further, risks are evaluated based on their likelihood and impact, and appropriate risk mitigation strategies are designed based on such evaluation. On an as needed basis, we employ outside advisors to aid in assessing specific risks, providing benchmarking data, or providing information regarding trends or recent regulatory changes applicable to the Company’s risk profile.
Management provides the Board with annual reports regarding the critical enterprise risks, including an assessment of the likelihood and impact of each identified risk and related risk mitigation strategies. Updates on critical risks are also provided through regular reports to the Board related to the Company’s business operations, strategy, and financial results. In addition, our Chief Information Security Officer and Chief Compliance Officer provide quarterly reports to the Audit Committee on relevant information security
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and compliance issues, respectively, and annually report to the Board regarding the Company’s information security and ethics and compliance programs. Further, members of our Internal Audit function provide the Audit Committee with quarterly reports regarding the effectiveness and adequacy of the Company’s controls, risk management, compliance, financial reporting, and governance processes that are designed by the Company.
In specific cases, suchthe Board has delegated its risk oversight responsibility has been delegated to committees of the Board.Board based on each committees’ respective areas of responsibility and expertise, as described in further detail above in “Board Committees” and in the charters of the respective committees. Committees that have been charged with risk oversight regularly report to the Board on those risk matters within their areas of responsibility. Risk oversight responsibility has been delegated to committees ofallocated between the Board and its committees as set forthsummarized in Figure 14 and described in more detail below.
