Texas Instruments Incorporated (TXN) Earnings Call Transcript & Summary

Good morning. Welcome to the Texas Instruments Inc. Annual Meeting of Stockholders. I would now like to turn the meeting over to Rich Templeton.

[Audio Gap] the inspector to conduct the vote at this meeting. Cynthia has advised me that holders of about 90% of the outstanding common stock are represented at the meeting in person or by proxy. This constitutes a quorum. All nominees for election to the TI Board are also with us this morning. In addition to myself, those nominees are Mark Blinn, Todd Bluedorn, Janet Clark, Carrie Cox, Martin Craighead, Jean Hobby, Mike Hsu, Ron Kirk, Pam Patsley and Robert Sanchez. All were elected at last year's annual meeting. Each of these nominees and their qualifications are listed in your proxy statement. TI's bylaws require advance notice of proposed Director nominations. Since no notice of other nominations has been submitted in accordance with the bylaws, the nominations are closed. Our purpose at this meeting today is to vote on Directors, 2 company proposals and 1 stockholder proposal. The polls are open for voting. Stockholders of record who have not already submitted their votes or who wish to change a previously submitted vote may do so now on the website used to access the meeting. Please remember that if you have already voted, it is not necessary to vote again. This would be an appropriate time to submit questions on ballot items. On the ballot for today's meeting are 3 company proposals, a vote to elect Director nominees, an advisory vote on named executive officer compensation, and a vote to ratify appointment of Ernst & Young as the company's independent registered public accounting firm for 2021. The full text of these items are in your proxy statement. The Board of Directors ask for a vote in favor of each item. Also, on the ballot for today's meeting is 1 stockholder proposal submitted by Mr. John Chevedden, which will be presented by his representative, Cam Franklin. Ms. Franklin will have 3 minutes for remarks regarding the proposal.

Good morning. Shareholder Right to Act by Written Consent, Proposal #4, sponsored by John Chevedden. Shareholders request that our Board of Directors the necessary steps to permit written consent by the shareholders entitled to cast the minimum number of votes that would be necessary to authorize an action at a meeting at which all shareholders entitled to vote thereon were present and voting. Hundreds of major companies enable shareholder action by written consents. This proposal topic won majority shareholder support at 13 large companies in a single year. This included 67% support at Allstate. This proposal topic also won 63% support at Cigna Corp. in 2019. This proposal topic would be -- would have received higher votes than 63% to 67% at these companies if more shareholders had access to objective proxy voting advice. It is important to adopt this proposal because Texas Instrument shareholders also do not have the right to call a special shareholder meeting to raise important matters between annual meetings. With this proposal, shareholders could use written consent to raise important matters outside the normal annual meeting cycle, like the election of a new Director. A Shareholder Right to Act by Written Consent, might be a way to motivate some of the directors. For instance, Ms. Carrie Cox and Mr. Todd Bluedorn each received more than 297 million votes again at the 2019 Annual Meeting. This pares unfavorably to the $2 million against votes that Martin Craig had received. The Bank of New York Mellon Corporation set it adopted written consent in 2019 after 45% support, clearly less than a majority vote, for written consent shareholder proposal. It is also important to adopt written consent to make up for loss of the right of shareholders to an in-person annual shareholder meeting. With the near universal use of online annual shareholder meetings starting in 2020, shareholders no longer have the right to discuss concerns with other shareholders and with their Directors at a shareholders meeting. Shareholders also are severely restricted in making their views known at online shareholder meetings because all critical questions and comments can be screened out at an online meeting. For instance, Goodyear management hit the mute button right in the middle of a formal shareholder proposal presentation at its 2020 Shareholder Meeting due to a well-deserved critical statement that Goodyear management did not want hear. Please vote yes to Shareholders Right to Act by Written Consent, Proposal #4. Thank you very much.

Thank you, Ms. Franklin. For the reasons detailed in the proxy statement, the Board of Directors recommends against -- a vote against this proposal. I will now take a few minutes to address shareholder questions submitted today, if we have any, about the ballot items. Cynthia, are there any questions?

Yes. Thank you. Yes, Mr. Chairman, we do have a couple of questions. The first question is, what is the amount of fees paid to EY in 2020 and 2019? The -- and I will answer the first part of this. The fees for EY in 2019 are in the proxy. And Rich, if you can provide the answer for 2020.

The total fees in 2020 were $13.048 million, representing both audit, audit-related fees and tax fees.

Okay. Thank you. Our next question is, how much did TI's CEO make in 2020? Rich, do you want to answer that?

I can -- I just want to make sure I've got the precise number that's in front of me, Cynthia. If you got that, go ahead.

Yes. Okay. I'll go ahead and answer that one. In 2020, our CEO earned about $19.1 million in total compensation. That includes base salary, bonus, equity, profit sharing and health and retirement benefits. And that concludes the questions that we have submitted, Rich.

Okay. Cynthia, thank you. It appears that we have no more votes coming in since everybody has had the opportunity to vote. The polls are now closed. I will note that the votes of our 401(k) participants and the votes submitted prior to the start of this meeting, either by mail, phone or Internet, already have been counted. We have the preliminary results of the voting. And according to our independent inspector, all proposals have passed. We will report the final voting results in an 8-K filing with the SEC within the ordinary course. With that, the annual meeting is adjourned. Thank you for joining today.

Thank you. The Annual Meeting of Stockholders for Texas Instruments has now come to an end. For any further details, please visit Texas Instruments IR website, investor.ti.com. Thank you for attending. You may now disconnect.