UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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INTEL CORPORATION

 

 

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2020 proxy statement notice of annual stockholders' meeting

 

INVESTOR Engagement we heard you speak to see how we responded to your feedback, see page xxx. Total contacted 48.1% 0/s total engaged 38.9% 0/s director engaged 28.0% 0/s We are proud of our long-standing and robust investor engagement program. Our integrated outreach team, led by our investor relation group, corporate responsibility office, and the corporate secretary's office, engages proactively with our stockholders, maintaining a two-way, year-round governance calendar as shown [here][in this graphics. During 2019, our engagement program addressed corporate governance best practices, our executive compensation program, our Board's operation and experience, and our commitment to addressing environmental and social responsibility issues that are critical to our business. Through direct participation in our engagement efforts and through briefings form our engagement teams, our directors are able to monitor developments in corporate governance and social responsibility and benefit from our stockholders' perspectives on these topics. In consultation with our board, we seek to thoughtfully adopt and apply developing practices in a manner that best supports our business and our culture. SUMMER Review annual meeting results to determine appropriate next steps, and prioritize post-annual meeting investor engagement focus areas FALL Hold post-annual meeting investor meetings to solicit feedback and report to the Board and Corporate Governance and Nominating Committee WINTER Incorporate input from investor meetings into annual meeting planning and enhance governance and compensation practices and disclosures when warranted SPRING Conduct pre-annual meeting investor meetings to answer questions and understand investor views on proxy matters ANNUAL STOCKHOLDERS' MEETING Additional detail on specific topics and initiatives we have adopted is discussed under "Investor Engagement" September 30, 2019on page XX.

 

DEAR STOCKHOLDER,

 

 

		2020 PROXY STATEMENT  |  Letter From Your Chairman				3

 

 

4		Letter From Your Chairman  |  2020 PROXY STATEMENT

 

 

		2020 PROXY STATEMENT  |  Letter From Your Chairman				5

 

 

DATE		TIME		RECORD DATE
THURSDAY, MAY 14, 2020		8:30 A.M. PACIFIC TIME		MARCH 16, 2020

 

 

IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD MAY 14, 2020:

THE NOTICE OF 2020 ANNUAL STOCKHOLDERS’ MEETING AND PROXY STATEMENT AND THE 2019 ANNUAL REPORT ON FORM 10-K ARE AVAILABLE AT WWW.INTC.COM/ANNUALS.CFM

 

6		Intel Corporation Notice of 2020 Annual Stockholders’ Meeting  |  2020 PROXY STATEMENT

 

 

3		LETTER FROM YOUR CHAIRMAN
6		NOTICE OF 2020 ANNUAL STOCKHOLDERS’ MEETING
8		PROXY STATEMENT HIGHLIGHTS†										INDEX OF FREQUENTLY REQUESTED INFORMATION
BOARD OF DIRECTORS MATTERS
16		PROPOSAL 1: ELECTION OF DIRECTORS										55		Auditor Fees
22		Director Skills, Experience, and Background										52		Beneficial Ownership Table
25		Board Diversity and Refreshment										26		Board Evaluations
CORPORATE GOVERNANCE MATTERS												27		Board Leadership
27		Board Leadership Structure										102		CEO Pay Ratio
33		Board Responsibilities and Committees										87		Clawback Policies
37		Investor Engagement										51		Code of Conduct
40		OUR CAPITAL†										35		Compensation Consultant
47		DIRECTOR COMPENSATION										32		Corp. Gov. Guidelines
52		SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT										39		Corporate Responsibility
AUDIT COMMITTEE MATTERS												60		Cultural Transformation
54		PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR										33		Director Attendance
56		REPORT OF THE AUDIT COMMITTEE										30		Director Independence
LISTED OFFICER COMPENSATION MATTERS												17		Director Biographies
58		PROPOSAL 3: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION										24		Director Skills Matrix
59		COMPENSATION DISCUSSION AND ANALYSIS										25		Director Tenure
59		Executive Summary										66		Financial Performance
68		2019 Compensation of Our Listed Officers										43		Human Capital
83		Other Aspects of Our Executive Compensation Programs										38		Investor Responsiveness
88		REPORT OF THE COMPENSATION COMMITTEE										32		ISG Framework
89		EXECUTIVE COMPENSATION										60		Leadership Transformation
89		Summary Compensation Table										59		Listed Officers for 2019
93		Grants of Plan-Based Awards										73		Pay-for-Performance
95		Stock Option Exercises and Stock Vested										84		Peer Group
96		Outstanding Equity Awards										86		Perks
97		Pension Benefits										50		Related Party Transactions
98		Non-Qualified Deferred Compensation										28		Risk Oversight
100		Other Potential Post-Employment Payments										86		Stock Ownership Guidelines
ADDITIONAL COMPENSATION MATTERS												14		Strategy Update
102		CEO PAY RATIO										71		Strategic Growth Equity Awards
103		PROPOSAL 4: AMENDMENT AND RESTATEMENT OF THE 2006 EMPLOYEE STOCK PURCHASE PLAN										33		Succession Planning
STOCKHOLDER PROPOSALS												87		Tax Deductibility
108		Proposal 5: Written Consent
110		Proposal 6: Gender/Racial Pay Gap
ADDITIONAL MEETING INFORMATION
112		Online Meeting										†  Information in Proxy Statement Highlights— Introduction to Our Business (page 8), A Year in Review (page 12), Business Overview (page 13), Our Strategy (page 14), and Our Capital (pages 40-46) is reproduced from our 2019 Annual Report on Form 10-K and speaks as of January 24, 2020, the date we filed our Form 10-K.
112		Meeting Admission
112		Vote Before or During the Meeting
OTHER MATTERS
115		Delinquent Section 16(a) Reports
115		2021 Stockholder Proposals or Nominations
117		Communicating with Us
A-1		APPENDIX A: NON-GAAP FINANCIAL MEASURES
B-1		APPENDIX B: AMENDED AND RESTATED 2006 EMPLOYEE STOCK PURCHASE PLAN

 

		2020 PROXY STATEMENT  |  Table of Contents				7

  

We are a world leader in the design and manufacturing of essential products and technologies that power the cloud and an increasingly smart, connected world. Our purpose we create world-changing technology that enriches the lives of every person on earth. Our commitment to corporate responsibility and sustainability leadership is deeply integrated throughout our business. Intel was founded in 1968 and our technology has been at the heart of computing breakthroughs ever since. More than 50 years later, we are a world leader in the design and manufacturing of essential technologies that power the cloud and an increasingly smart, connected world. Intel is transforming from a PC-centric company to a data-centric company, with workload-optimized solutions designed to help a broad set of customers process, move, and store ever-increasing amounts of data. This exponential growth of data is reshaping computing and expanding our opportunity. We are investing to lead data-driven technology inflections that position us to play a bigger role in the success of our customers. These include: the rise of AI, the transformation of networks, the intelligent edge1 emerging with the Internet of Things, and autonomous driving. Intel's ambitions have never been greater: to create world-changing technology that enriches the lives of every person on earth. Our commitment to corporate responsibility and to creating an inclusive environment to support the talent of our amazing people supports our ambitions and makes us stronger. When every employee has a voice and a sense of belonging, Intel can be more innovative, agile, and competitive. "We are at a key inflection point with the exponential growth of data creating massive demand for semiconductors. Cloud workloads are diversifying, networks are transforming, and more computing performance is moving to the edge. We have been on a multi-year journey to reposition the company's portfolio to take advantage of this industry catalyst. Today, we have the product and technology leadership that uniquely positions us to capitalize on these trends, and we are investing in the IP required to help our customers win the inflections of the future." -Bob Swan, Chief Executive Officer 1 Intel's definition is included in "Key Terms" within the Financial Statements and Supplemental Details in our Annual Report on Form 10-K.

 

For the 2020 Annual Stockholders’ Meeting, our Board recommends the following nine director nominees listed below. Our Board considers numerous factors when assessing the qualifications for each Board nominee, such as alignment with the Company’s future strategic direction; independence; understanding of and experience in manufacturing, technology, finance, and marketing; senior leadership experience; international experience; mix of ages; and gender, racial, geographic and ethnic diversity. In this regard, our Board is committed to actively seeking women and minority director candidates for consideration.

 

 

Non-Independent Directors Nominee, 1 of [9] Independent Directors, [8] of [9] ROBERT ("bob") H. SWAN Age: 59 Director Since: 2019 Committees: EC CEO OMAR ISHRAK Age: 64 Director Since: 2017 Committees: CC, CGN*, EC* INDEPENDENT CHAIRMAN 33% of director nominees are women JAMES J. GOETZ Age: 54 Director Since: 2019 Committees: ALYSSA HENRY Age: 49 Director Since: 2020 Committees: 33% of director nominees are ethnically diverse RISA LAVIZZO-MOUREY Age: 65 Director Since: 2018 Committees: CC, CGN TSU-JAE KING LIU Age: 56 Director Since: 2016 Committees: AC, FC* 3.0 YRS average tenure of director nominees GREGORY D. SMITH Age: 53 Director Since: 2017 Committees: AC*, FC ANDREW WILSON Age: 45 Director Since: 2017 Committees: CC*, FC FRANK D. YEARY Age: 56 Director Since: 2009 Committees: AC, CGN*

 

AC  Audit Committee   CC  Compensation Committee   CGN  Corporate Governance & Nominating Committee   EC  Executive Committee

FC  Finance Committee   *  Committee Chair/Co-Chair

 

Effective after the conclusion of Intel’s 2020 Annual Stockholders’ Meeting, provided he/she is re-elected to the Board by stockholders at the meeting.

 

 

 

		2020 PROXY STATEMENT  |  Proxy Statement Highlights				9

 

Our relationship with our stockholders is an important part of our company’s success and we have a long tradition of engaging with our stockholders and obtaining their perspectives. Following a disappointing “say on pay” vote in 2019, which received approximately 60% support, we undertook extensive engagement efforts to better understand the reasons for how our investors voted, as well as to obtain their views on other key corporate governance and disclosure matters, and to determine how best to respond.

 

 

 

Who we met with 48.1% 38.9% 28.0% of shares contacted for engagement of shares engaged with overall of shares engaged by Chairman of the Board An integrated outreach team Corporate Legal + Executive Compensation + Corporate Responsibility + Investor Relations What we discussed Our business Our ESG practices >50 Leadership transition Strategy execution Cultural transformation Financial performance Strategic growth awards Board composition Risk oversight ESG disclosures separate investor meetings throughout the year How we responded Board Composition Added more disclosure on future director recruitment priorities See page XX Board Oversight Added more disclosure on board's oversight of cultural transformation See page XX ESG Disclosures Added more disclosure on how we integrate ESG goals into our pay programs See page XX Continuing to work to align disclosures with SASB/TCFD Strategic Growth Equity Awards Added more disclosure on rationale for awards See page XX Added that the Compensation Committee has no intention to grant additional one-time equity awards to any current executive officers Annual Bonus Plan Added more disclosure on business group operational See page XX Where to find more info See "Investor Engagement" on page XX and "Investor Engagement and the 2019 'Say on Pay' Vote" on page XX

 

*	Environmental, Social, and Governance (ESG); Sustainability Accounting Standards Board (SASB); and Taskforce on Climate-Related Financial Disclosures (TCFD).

 

10		Proxy Statement Highlights  |  2020 PROXY STATEMENT

 

Intel’s executive compensation programs are designed to incentivize the implementation of our growth strategy. There are three key drivers of our executive compensation programs: a competitive pay positioning strategy, a heavy emphasis on incentive-driven pay, and goals that are appropriately aligned with our business strategy (in terms of both selection and attainability).

Our executive compensation programs continue to be tied to the company’s financial performance, support our commitment to good compensation governance, and provide market-based opportunities to attract, retain, and motivate our executives in an intensely competitive market for qualified talent.

LISTED OFFICER PAY OVERVIEW

 

 

 

PAY ELEMENT		PURPOSE				PERFORMANCE PERIOD		PERFORMANCE METRICS
BASE SALARY		Designed to be market-competitive and attract and retain talent				ANNUAL		—
ANNUAL CASH BONUS		Incentivize achievement of Intel’s short-term financial and operational objectives				ANNUAL		•  Net income growth (25%) •  Relative net income growth vs. tech peers (25%) •  Operational goals (50%)
QUARTERLY CASH BONUS		Company-wide program that rewards quarterly profitability based on Intel’s net income relative to company compensation costs				QUARTER		•  Company profitability
RESTRICTED STOCK UNITS		Facilitates stock ownership, executive retention, and stockholder alignment				THREE YEARS		•  Stock price appreciation
PERFORMANCE STOCK UNITS		Designed to reward long-term profitability, long-term performance relative to peers, and alignment with stockholders				THREE YEARS		•  Relative TSR vs. S&P 500 IT Index (50%) •  Cumulative EPS growth compared to a target (50%)

LEADERSHIP TRANSFORMATION

 

 

As described in last year’s proxy statement and discussed extensively with our stockholders both leading up to and following our 2019 Annual Stockholders’ Meeting, following a rigorous and extensive search both internally and externally and after strong performance as interim Chief Executive Officer (CEO), Mr. Swan was appointed our permanent CEO and a member of the Board of Directors in January 2019, with the mandate to carry forward our strategic transformation from a PC-centric to a data-centric company. Following Mr. Swan’s appointment as CEO, we have since appointed a new Chief Financial Officer and a new Chief People Officer, and promoted the head of our largest business group, Client Computing Group.

The Board approved certain promotion- and new hire-related compensation arrangements to facilitate this significant and impactful change in the management team. The Board is confident that our management team is the right group to position the company for continued strong, sustainable growth through this critical time of change. To support successful leadership transitions in 2018 and 2019, the Compensation Committee designed compensation programs that incentivize our executives to deliver on the full potential of our ongoing transformation. For more information regarding our 2019 pay decisions, please see the “Compensation Discussion & Analysis” on page 59.

 

		2020 PROXY STATEMENT  |  Proxy Statement Highlights				11

 

Our transformation to a data-centric company continued in 2019, and we experienced strong demand and reached critical product milestones. We achieved record revenue of $72.0 billion, 48% of which was from our data-centric businesses. We invested $13.4 billion in R&D while reducing our spending to 27% of revenue. Additionally, we made capital investments of $16.2 billion, generated $33.1 billion cash from operations and $16.9 billion of free cash flow1, and returned $5.6 billion in dividends to stockholders. We continue to focus on improving supply and supporting our customers’ growth. We increased our wafer capacity during 2019; however, we did not see a commensurate increase in client CPU unit volume as wafer capacity was largely consumed by increases in modem and chipset volumes, and unit die sizes.   Our 10nm manufacturing process entered full production as we launched our first products from this advanced technology. We are accelerating the pace of process node introductions and moving back to a 2- to 2.5-year cadence. We are on track to deliver our first 7nm-based product, a discrete GPU, at the end of 2021. 5G continues to be a strategic priority, and our exit from the 5G smartphone modem business is enabling us to increase the focus of our 5G efforts on the opportunity to modernize network and edge infrastructure.		“We achieved record revenue for the fourth consecutive year, exercised discipline to drive spending efficiencies, and returned capital to our stockholders. Our results reflect a relentless commitment to improve execution that benefits our customers and increases shareholder value.”   — George Davis, Chief Financial Officer

REVENUE

OPERATING INCOME

DILUTED EPS

CASH FLOWS

∎ PC-CENTRIC $B   ∎ DATA-CENTRIC $B

∎ GAAP $B     ∎ NON-GAAP $B

∎ GAAP     ∎ NON-GAAP

∎ OPERATING CASH FLOW $B   ∎ FREE CASH FLOW1 $B

$72.0B

$22.0B

$23.8B

$4.71

$4.87

$33.1B

$16.9B

GAAP

GAAP

non-GAAP1

GAAP

non-GAAP1

GAAP

non-GAAP1

Revenue up 2% from 2018; Data-centric up 3% and PC-centric flat

Operating income down $1.3B or 5% from 2018; 2019 operating margin at 31%

Operating income down $797M or 3% from 2018; 2019 operating margin at 33%

Diluted EPS up $0.23 or 5% from 2018

Diluted EPS up $0.29 or 6% from 2018

Operating cash flow up $3.7B or 13%; operating cash flow to net income at 157%

Free cash flow up $2.7B or 19%; free cash flow to non-GAAP net income at 78%

High-performance product sales in the second half of 2019, partially offset by NAND pricing pressure and decrease in platform2 unit sales

Lower gross margin from decrease in NAND market pricing and lower platform unit sales, partially offset by platform ASP strength

Lower shares outstanding and platform ASP strength, partially offset by a decrease in platform unit sales and lower NAND market pricing

Working capital changes driven by tax and other assets and liabilities, partially offset by lower memory prepayments and inventory build

GOAL (2019 - 2021)

GOAL (2019 - 2021)

GOAL (2019 - 2021)

GOAL (2019 - 2021)

Low single-digit growth over the next three years to $76B-$78B; data-centric businesses high single-digit growth and PC-centric business approximately flat to slightly down

Keep non-GAAP operating margin roughly flat at approximately 32% over the next three years

Grow non-GAAP diluted EPS in line with revenue over the next three years

Achieve free cash flow of approximately 80% of non-GAAP net income by 2021

Progress

Progress

Progress

Progress

Revenue grew 2% from 2018 to 2019, to $72.0B

Non-GAAP operating margin was 33% in 2019

Non-GAAP diluted EPS grew 6% from 2018 to 2019; revenue grew 2% over the same period

Free cash flow was 78% of non-GAAP net income

1	See “Non-GAAP Financial Measures” in Appendix A.

2	See “Our Products” within MD&A in our 2019 Annual Report on Form 10-K.

 

12		Proxy Statement Highlights  |  2020 PROXY STATEMENT

 

 

		2020 PROXY STATEMENT  |  Proxy Statement Highlights				13

 

Data has become a driving force in society. Our customers are asking for solutions to turn data into actionable insights, amazing experiences, and operational efficiencies. Intel platforms provide the foundation for these solutions because we have developed a portfolio of data-centric technologies that span the data center to the edge, enabling us to play a differentiated and growing role in the success of our customers.

MAKE THE WORLD’S BEST SEMICONDUCTORS

 

 

Moore’s Law, a law of economics predicted by Intel’s co-founder Gordon Moore more than 50 years ago, continues to be a strategic priority and differentiator. We make significant investments and innovations in our silicon manufacturing technologies and platforms. Our proprietary technologies make it possible to integrate products and platforms that address evolving customer needs and expand the markets we serve. However, making the best semiconductors requires more than just the best manufacturing process technologies.

LEAD TECHNOLOGY INFLECTIONS

 

 

Our strategic intent is to lead in key technology inflections that are fundamentally changing computing and communications. The most important drivers of change we see today are AI, the transformation of networks spearheaded by the transition to 5G, and the rise of the intelligent edge. We see a future where Intel^® technologies enable our customers to move faster, store more, and process everything—from large complex applications in the cloud, to autonomous cars and small low-power devices on the edge.

BE THE LEADING END-TO-END PLATFORM PROVIDER FOR THE NEW DATA WORLD

 

 

Customers look to Intel for our end-to-end capability to deliver solutions that enable customers to move faster, store more, and process everything. We continue to make investments in optimizing our Intel^® Xeon^® processors in response to our customers’ need for high-performance computing. We continue to develop innovative memory and storage solutions, including Intel^® QLC 3D NAND Technology and Intel^® Optane^™ memory, to provide data center products that are optimized to deliver world-class performance and drive lower total cost of ownership for cloud workloads. Our advancements in FPGAs enable efficient management of the changing demands of next-generation data centers and accelerate the performance of emerging applications.

RELENTLESS FOCUS ON OPERATIONAL EXCELLENCE AND EFFICIENCY

 

 

Underlying our transformation to a data-centric company is a relentless focus on operational excellence and efficiency. This focus includes the elimination of lower growth investments and activities, and the simplification and automation of routine processes and activities. These efforts also extend to our product design processes, where we are striving to reduce the complexity of our designs to improve our efficiency and enhance quality. These improvements enable us to achieve scale in our core operations, providing a stable and cost-effective platform to support additional investments in the design, development, and delivery of new products. Operational excellence helps us fund the expansion of our TAM through big-bet investments.

CONTINUE TO HIRE, DEVELOP, AND RETAIN THE BEST, MOST DIVERSE AND INCLUSIVE TALENT

 

 

At the core of our organization are highly skilled, diverse, and talented people capable of accelerating as one team in everything we do. We are proud of our past and inspired by how our employees are rising to the challenge to evolve our culture. Inclusion is the foundation of this evolution and runs through each of our culture attributes.

Our culture attributes reinforce:

 

CUSTOMER OBSESSED:   Our customer’s success is our success. We listen, learn, and anticipate our customers’ needs to deliver on their ambitions.

ONE INTEL:   We are stronger together and commit to team over individual success.

FEARLESS:   We are bold and innovative. We take risks, fail fast, and learn from mistakes.

TRUTH AND TRANSPARENCY:   We are committed to being open and honest while bringing clarity to complex challenges.

INCLUSION:   We strive to build a culture of belonging and welcome differences, knowing it makes us better.

QUALITY:   Our goal is to deliver quality products and services that our customers and partners can always rely on.

 

14		Proxy Statement Highlights  |  2020 PROXY STATEMENT

 

In line with the International Integrated Reporting Framework’s six capitals concept, we have outlined how we deploy various forms of capital to execute our strategy in a way that seeks to reflect our corporate values, help our customers succeed, and create value for our stockholders. Our six capitals are summarized here, with more detail in the “Our Capital” section of this proxy statement, and further description on our 2019 Annual Report on Form 10-K.

 

CAPITAL		STRATEGY		VALUE
FINANCIAL		Leverage cash flow to invest in ourselves and grow our capabilities, supplement and strengthen our capabilities through acquisitions and strategic investments, and provide returns to stockholders.		We strategically invest financial capital to create long-term value and provide returns to our stockholders in the form of dividends and buybacks.
INTELLECTUAL		Invest significantly in R&D and IP to ensure our process and product technologies are competitive in our strategic pursuit of making the world’s best semiconductors and realizing data-centric opportunities.		We develop IP for our platforms to enable next-generation products, create synergies across our businesses, provide a higher return as we expand into new markets, and establish and support our brands.
MANUFACTURING		Invest timely and at a level sufficient to meet customer demand for current technologies and prepare for future technologies.		Our manufacturing scope and scale enables innovations to provide our customers and consumers with a broad range of leading-edge products.
HUMAN		Develop the talent needed to remain at the forefront of innovation and create a diverse, inclusive, and safe workplace.		We attract and retain talented employees who enable the development of solutions and enhance the intellectual and manufacturing capital critical to helping our customers win the technology inflections of the future.
SOCIAL AND RELATIONSHIP		Build trusted relationships for both Intel and our stakeholders, including employees, suppliers, customers, local communities, and governments.		We collaborate with stakeholders on programs to empower underserved communities through education and technology, and on initiatives to advance accountability and capabilities across our global supply chain, including accountability for the respect of human rights.
NATURAL		Continually strive to reduce our environmental footprint through efficient and responsible use of natural resources and materials used to create our products.		Our proactive efforts help us mitigate climate and water impacts, achieve efficiencies and lower costs, and position us to respond to the expectations of our stakeholders.

 

VALUE WE CREATE   Each of our six forms of capital plays a critical role in our long-term value creation. We consider numerous indicators in determining the success of our capital deployment in creating value. The graphic highlights the value created up to and in 2019.   1 See “Non-GAAP Financial Measures” in Appendix A.

 

		2020 PROXY STATEMENT  |  Proxy Statement Highlights				15

PROXY STATEMENT		INTEL CORPORATION 2200 Mission College Blvd. Santa Clara, CA 95054-1549

Our Board of Directors solicits your proxy for the 2020 Annual Stockholders’ Meeting (and any postponement or adjournment of the meeting) for the matters set forth in the “Notice of 2020 Annual Stockholders’ Meeting.” We made this proxy statement available to stockholders beginning on March 31, 2020.

 

PROPOSAL 1

ELECTION OF DIRECTORS

Upon the recommendation of our Corporate Governance and Nominating Committee, our Board has nominated the nine individuals listed below to serve as directors. Our nominees include eight independent directors, as defined in the rules for companies traded on the Nasdaq Global Select Market* (Nasdaq), and one Intel officer: Robert H. Swan, who became our Chief Executive Officer in January 2019. Omar Ishrak, previously the Board’s independent Lead Director, became the independent Chairman of the Board in January 2020.

Each of our director nominees currently serves on the Board and was elected to a one-year term at the 2019 Annual Stockholders’ Meeting, except for James J. Goetz and Alyssa Henry, who were appointed to the Board in November 2019 and January 2020, respectively. Andy D. Bryant, previously Chairman of the Board and Executive Vice President, and Reed E. Hundt are not standing for re-election at the annual meeting. In addition, since the 2019 Annual Stockholders’ Meeting, Aneel Bhusri retired from the Board and similarly is not standing for re-election at the meeting.

Each director’s term runs from the date of his or her election until our next annual stockholders’ meeting and until his or her successor (if any) is elected or appointed. If any director nominee is unable or unwilling to serve as a nominee at the time of the annual meeting, the individuals named as proxies may vote for a substitute nominee chosen by the present Board to fill the vacancy. Alternatively, the Board may reduce the size of the Board, or the proxies may vote just for the remaining nominees, leaving a vacancy that the Board may fill at a later date. However, we have no reason to believe that any of the nominees will be unwilling or unable to serve if elected as a director.

Our Bylaws require that a director nominee will be elected only if he or she receives a majority of the votes cast with respect to his or her election in an uncontested election (that is, the number of votes cast “for” that nominee exceeds the number of votes cast “against” that nominee). You can vote to “abstain,” but that vote will not have an effect in determining the election results. For more information, see “Additional Meeting Information; Voting Before or During the Meeting” on page 112. If a nominee who currently serves as a director is not re-elected, Delaware law provides that the director would continue to serve on the Board as a “holdover director.” Under our Amended and Restated Bylaws (Bylaws) and the Amended and Restated Board of Directors Guidelines on Significant Corporate Governance Issues (Corporate Governance Guidelines), each director submits an advance, contingent, irrevocable resignation that the Board may accept if stockholders do not re-elect that director. In that situation, our Corporate Governance and Nominating Committee would make a recommendation to the Board about whether to accept or reject the resignation, or whether to take other action instead. Within 90 days from the date that the election results were certified, the Board would act on the Corporate Governance and Nominating Committee’s recommendation and publicly disclose its decision and the rationale behind it.

For each of the nine director nominees standing for election, the following pages set forth certain biographical information, including a description of their principal occupation, business experience, and the primary qualifications, attributes and skills (represented by the icons below) that the Corporate Governance and Nominating Committee considered in recommending them as director nominees, as well as the Board committees on which each director nominee will serve as of the 2020 Annual Stockholders’ Meeting.

 

 

 

		RECOMMENDATION OF THE BOARD The Board recommends that you vote “FOR” the election of each of the following nominees.

Senior leadership experience global/international experience industry and it/technical experience financial experience human capital experience operating and manufacturing experience sales marketing and brand management experience emerging technologies and business models experience business development and m&a experience cybersecurity/information security government, legal, and regulatory public company board

 

16		Proposal 1: Election of Directors  |  2020 PROXY STATEMENT

		JAMES J. GOETZ		AGE: 54  DIRECTOR SINCE: 2019  OTHER CURRENT PUBLIC BOARDS: Palo Alto Networks  COMMITTEES: Corporate Governance and Nominating*, Finance*
		SKILLS & EXPERTISE:

EXPERIENCE

James J. Goetz has served as a partner of Sequoia Capital, a venture capital firm, since June 2004. Prior to joining Sequoia, Mr. Goetz co-founded VitalSigns Software, a software design, development, and strategy company, where he assembled and led the team that pioneered end-user performance management. Prior to VitalSigns, he was Vice President of Network Management for Bay Networks. Mr. Goetz previously served on the boards of directors of Barracuda Networks Inc., a data security and storage company from 2009 to 2017; Nimble Storage Inc., a data storage company, from 2007 to 2017; Jive Software Inc., a provider of social business software, from 2007 to 2015; and Ruckus Wireless Inc., a manufacturer of wireless (Wi-Fi) networking equipment, from 2012 to 2015, among others. Mr. Goetz holds a bachelor of science degree in electrical engineering from the University of Cincinnati and a master of science degree in electrical engineering from Stanford University. Mr. Goetz currently serves on the boards of several privately held companies. Mr. Goetz also serves as a member of the board of directors of Palo Alto Networks Inc., a network security solution company, since April 2005.

SKILLS & EXPERTISE

Mr. Goetz brings to the Board senior leadership, industry and information technology (IT), emerging technologies, business development, and cybersecurity experience from his experience as a partner of a venture capital firm, where he focuses on cloud, mobile, and enterprise technology investments, as well as providing guidance and counsel to a wide variety of internet and technology companies, and his prior work in networks, data security and storage, software, and manufacturing through various senior roles and other board experiences. Mr. Goetz’s experience with internet and technology companies brings depth to the Board in areas that are important to Intel’s business as it moves from a PC-centric to data-centric company.

 

		ALYSSA HENRY		AGE: 49  DIRECTOR SINCE: 2020 COMMITTEES: Audit*, Compensation*
		SKILLS & EXPERTISE:

EXPERIENCE

Alyssa Henry has served as Seller Lead for Square, Inc., a provider of software, hardware and financial services for small businesses and individuals, since 2014. She oversees global engineering, product management, design, sales, marketing, partnerships and support for Square’s seller-facing software and financial services products. Prior to Square, she served in various positions with Amazon.com, Inc. from 2006 to 2014, including as Vice President of Amazon Web Services Storage Services, where she led services including Amazon S3, Amazon EBS and Amazon Lambda; and as Amazon’s director of software development for ordering, with responsibility for Amazon’s ordering workflow software and databases. Before Amazon, Ms. Henry spent 12 years at Microsoft Corporation working on databases and data access technologies in a variety of engineering, program management and product unit management roles. Ms. Henry started her career as a developer in the financial services industry. Ms. Henry holds a bachelor of science degree in applied science with a specialization in computing from the University of California, Los Angeles. She has served as a member of the board of directors of Unity Technologies, a privately held video game software development company, since December 2018.

SKILLS & EXPERTISE

Ms. Henry brings senior leadership, industry and IT, emerging technologies and business models, and information security expertise to the Board from her executive experience at a mobile payment process company, including overseeing its expansion into other technology services for small businesses, and by her leadership of the software development segment of a multinational technology company that focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. Ms. Henry’s more than 25 years of experience in software engineering and development of database and storage technologies is particularly useful to the Board as Intel moves from a PC-centric to data-centric company.

 

*

Effective after the conclusion of Intel’s 2020 Annual Stockholders’ Meeting, provided he/she is re-elected to the Board by stockholders at the meeting, Mr. Goetz will join the Corporate Governance and Nominating Committee and Finance Committee; Ms. Henry will join the Audit Committee and Compensation Committee; and Messrs. Smith and Wilson will join the Executive Committee.

 

		2020 PROXY STATEMENT  |  Proposal 1: Election of Directors				17

		OMAR ISHRAK Independent Chairman		AGE: 64  DIRECTOR SINCE: 2017  OTHER CURRENT PUBLIC BOARDS: Medtronic plc  COMMITTEES: Compensation, Corporate Governance and Nominating (Co-Chair), Executive (Chair)
		SKILLS & EXPERTISE:

EXPERIENCE

Dr. Omar Ishrak has been Chairman and CEO of Medtronic plc, a global medical technology company, since 2011. Effective as of April 26, 2020, Dr. Ishrak will retire as CEO, become Executive Chairman, and continue to serve as Chairman of the Board of Medtronic. Prior to joining Medtronic, Dr. Ishrak served as President and CEO of GE Healthcare Systems, a comprehensive provider of medical imaging and diagnostic technology and a division of GE Healthcare, from 2009 to 2011. Dr. Ishrak was President and CEO of GE Healthcare Clinical Systems from 2005 to 2008 and President and CEO of GE Healthcare Ultrasound and BMD from 1995 to 2004. Dr. Ishrak is a member of the Board of Trustees of the Asia Society, a leading educational organization dedicated to promoting mutual understanding and strengthening partnerships among peoples, leaders, and institutions of Asia and the United States (U.S.) in a global context. Dr. Ishrak received his bachelor of science degree and PhD in Electrical Engineering from the University of London, King’s College.

SKILLS & EXPERTISE

Dr. Ishrak brings senior leadership, operating and manufacturing, and international expertise to the Board from his position as Chairman and CEO of Medtronic and his long history of success as a global executive in the medical technology industry. From his role at Medtronic, Dr. Ishrak has extensive experience identifying and developing emerging technologies and has overseen a number of strategic acquisitions, enabling him to bring business development and mergers and acquisitions (M&A) experience to the Board. Dr. Ishrak held various product development and engineering positions at Philips Ultrasound. Dr. Ishrak also provides technical, human capital, and brand marketing expertise from his role as a leader of a global medical technology company.

 

		RISA LAVIZZO-MOUREY		AGE: 65  DIRECTOR SINCE: 2018  OTHER CURRENT PUBLIC BOARDS: General Electric Company and Hess Corporation‡  COMMITTEES: Compensation, Corporate Governance and Nominating
		SKILLS & EXPERTISE:

EXPERIENCE

Dr. Risa Lavizzo-Mourey has been the Robert Wood Johnson Foundation PIK Professor of Population Health and Health Equity at the University of Pennsylvania in Philadelphia, Pennsylvania, since 2018. Dr. Lavizzo-Mourey was President and CEO of the Robert Wood Johnson Foundation, the nation’s largest healthcare-focused philanthropic organization, based in Princeton, New Jersey, from 2003 to 2017, and Senior Vice President of that organization from 2001 to 2003. She previously held various appointments at the University of Pennsylvania Medical School, including Sylvan Eisman Professor of Medicine and Health Care Systems from 1995 to 2001, Director of the Institute on Aging from 1994 to 2002, and Chief of Geriatric Medicine from 1986 to 1992. Dr. Lavizzo-Mourey has also held several government positions, including Deputy Administrator of the Agency for Health Care Research and Quality from 1992 to 1994, Co-Chair of the White House Health Care Reform Task Force from 1993 to 1994, and member of a number of federal advisory committees. She received her MD from Harvard Medical School and MBA from the Wharton School of Business of the University of Pennsylvania. Dr. Lavizzo-Mourey serves on the board of directors of General Electric Company and Hess Corporation^‡. She is also a member of the National Academy of Medicine, American Academy of Arts and Sciences, and The American Philosophical Society.

SKILLS & EXPERTISE

Dr. Lavizzo-Mourey brings senior leadership, strategy, and human capital and talent development expertise to the Board from her leadership of the largest public health philanthropy in the U.S. for almost 15 years and, before that, serving for 15 years as a distinguished professor and administrator at the University of Pennsylvania. She also brings to the Board government experience from her various government appointments. Dr. Lavizzo-Mourey’s board service with other public companies also provides cross-board experience.

 

‡	Dr. Lavizzo-Mourey will not be standing for re-election at Hess Corporation.

 

18		Proposal 1: Election of Directors  |  2020 PROXY STATEMENT

		TSU-JAE KING LIU		AGE: 56  DIRECTOR SINCE: 2016 COMMITTEES: Audit, Finance (Chair)
		SKILLS & EXPERTISE:

EXPERIENCE

Dr. Tsu-Jae King Liu has served as Dean and Roy W. Carlson Professor of Engineering in the College of Engineering at the University of California, Berkeley (UC Berkeley) since 2018. She previously held a distinguished professorship endowed by Taiwan Semiconductor Manufacturing Company, Ltd. (TSMC) in the Department of Electrical Engineering and Computer Sciences at UC Berkeley from July 2014 to July 2018. Dr. Liu has also served as Vice Provost, Academic and Space Planning, and Senior International Officer at UC Berkeley from October 2016 to June 2018. Dr. Liu has over 20 years of experience in higher education in a range of faculty and administrative roles, including Associate Dean for Academic Planning and Development, College of Engineering in 2016, Chair of the Department of Electrical Engineering and Computer Sciences from July 2014 to June 2016, and Associate Dean for Research in the College of Engineering from 2008 to 2012. Her achievements in teaching and research have been recognized by a number of awards, most recently by her induction into the Silicon Valley Engineering Hall of Fame. Dr. Liu was Co-founder and President of Progressant Technologies, a start-up company that developed negative differential resistance transistor technology, from May 2000 to October 2004. She served on the board of the Center for Advancing Women in Technology from October 2014 to May 2016. Dr. Liu received her bachelor of science, master’s degree, and PhD in Electrical Engineering from Stanford University.

SKILLS & EXPERTISE

As a scholar and educator in the field of nanometer-scale logic and memory devices, including advanced materials, process technology, and devices for energy-efficient electronics, Dr. Liu brings to the Board industry and technical experience directly related to Intel’s semiconductor device research and development, and manufacturing. As a Co-founder of Progressant Technologies, which was later acquired by Synopsys, Inc., and while serving on technical advisory boards for multiple start-up companies, Dr. Liu gained business development experience. Her inventions and contributions to the fin-shaped field-effect transistor design, dubbed “FinFET,” have given Dr. Liu extensive experience in emerging technologies. She also brings global and international experience to the Board with her work on establishing strategic international partnerships and agreements for UC Berkeley.

 

		2020 PROXY STATEMENT  |  Proposal 1: Election of Directors				19

		GREGORY D. SMITH		AGE: 53  DIRECTOR SINCE: 2017 COMMITTEES: Audit (Chair), Finance, Executive*
		SKILLS & EXPERTISE:

EXPERIENCE

Gregory D. Smith has been CFO since 2012 and Executive Vice President, Enterprise Performance and Strategy since 2017 at The Boeing Company (Boeing), the world’s largest aerospace company. In his roles at Boeing, Mr. Smith is responsible for the company’s overall financial and strategic management, including the company’s financial reporting, long-range business planning, and program management. Additionally, he oversees Business Operations, Controller, Corporate Development, Strategy, Treasury, and other corporate functions and enterprise projects with the overall goal of accelerating innovation and driving market-based affordability efforts across the company. He also leads Boeing Capital Corporation, the company’s global financing arm. Mr. Smith’s portfolio also includes executing the company’s three business unit strategy with the launch of Boeing Global Services in July 2017, the One Boeing integration of the company’s organizations and initiatives, and assisting the chairman and CEO in setting enterprise goals and developing the senior leadership team. Mr. Smith previously served at Boeing as CFO, Executive Vice President, Corporate Development and Strategy from February 2015 to June 2017; Executive Vice President, CFO from February 2012 to February 2015; Vice President of Finance and Corporate Controller from February 2010 to February 2012; and Vice President of Financial Planning and Analysis from June 2008 to February 2010. Prior to that, he served for four years as Vice President of Global Investor Relations at Raytheon Company.

SKILLS & EXPERTISE

Mr. Smith brings to the Board senior leadership, financial, strategic, operational, human capital, and global expertise from his experience as Executive Vice President, Enterprise Performance and Strategy of the world’s largest aerospace company. He has experience with budgeting, accounting controls, internal audit, financial forecasting, strategic financial planning and analysis, capital commitment planning, competitive analysis and benchmarking, investor relations, and M&A from his work as Boeing’s CFO. Mr. Smith also brings substantial international and business development experience to the Board from his enterprise performance and strategy role at Boeing. Mr. Smith’s portfolio also includes Boeing HorizonX, the venture capital arm of Boeing that identifies and invests in start-ups that are developing emerging technologies and businesses in markets such as cybersecurity, AI and machine learning, and autonomous systems among others. He has continuing experience in dealing with foreign governments, including on issues related to market access and the regulation of business and investment. Mr. Smith also brings operational experience to the Board, having held a number of leadership roles at Boeing in supply chain, factory operations, and program management.

 

		ROBERT (“BOB”) H. SWAN CEO		AGE: 59  DIRECTOR SINCE: 2019  OTHER CURRENT PUBLIC BOARDS: eBay Inc.   COMMITTEES: Executive
		SKILLS & EXPERTISE:

EXPERIENCE

Robert H. Swan has been a director and CEO of Intel since January 2019. Mr. Swan served as the interim CEO and Executive Vice President, CFO of Intel from June 2018 to January 2019, and previously served as Executive Vice President, CFO since joining Intel in October 2016. In his capacity as CFO, he oversaw Intel’s global finance organization—including finance, accounting and reporting, tax, treasury, internal audit, and investor relations—IT, Intel Capital, and the Corporate Strategy Office. Prior to joining Intel, Mr. Swan served as an Operating Partner at General Atlantic LLC, a private equity firm, from September 2015 to September 2016. He also served as Senior Vice President, Finance and CFO of eBay Inc., a multinational e-commerce company, from March 2006 to July 2015. Previously, Mr. Swan served as Executive Vice President, CFO of Electronic Data Systems Corporation, Executive Vice President, CFO of TRW Inc., and as CFO, Chief Operating Officer, and CEO of Webvan Group, Inc. Mr. Swan began his career in 1985 at General Electric (GE), serving for 15 years in numerous senior finance roles. Mr. Swan also serves as a member of the board of directors of eBay Inc. and previously served on the board of directors of Applied Materials, Inc. from 2009 to 2016, and AppDynamics from 2016 to 2017.

SKILLS & EXPERTISE

As our CEO and former CFO of Intel’s global finance organization, Mr. Swan brings significant senior leadership, global, industry, financial, human capital, operating experience, business development and M&A experience to the Board. Mr. Swan has gained extensive financial, operating and manufacturing, emerging technologies, M&A, and information security experience from serving as CFO for several international companies with complex business environments, including the 15 years at GE and the nine years he spent at eBay where he oversaw the eBay-PayPal split. As CEO and former CFO of Intel, he has direct knowledge and experience in business development, strategy, and growth. Mr. Swan also brings human capital and technical experience from his various senior leadership roles and board directorships.

 

*

Effective after the conclusion of Intel’s 2020 Annual Stockholders’ Meeting, provided he/she is re-elected to the Board by stockholders at the meeting, Mr. Goetz will join the Corporate Governance and Nominating Committee and Finance Committee; Ms. Henry will join the Audit Committee and Compensation Committee; and Messrs. Smith and Wilson will join the Executive Committee.

 

20		Proposal 1: Election of Directors  |  2020 PROXY STATEMENT

		ANDREW WILSON		AGE: 45  DIRECTOR SINCE: 2017  OTHER CURRENT PUBLIC BOARDS: Electronic Arts Inc.   COMMITTEES: Compensation (Chair), Finance, Executive*
		SKILLS & EXPERTISE:

EXPERIENCE

Andrew Wilson is the CEO of Electronic Arts Inc. (EA), a global leader in digital interactive entertainment. He joined EA in May 2000. He has served as the CEO and a director of EA since September 2013. During his tenure as CEO, EA has launched groundbreaking new games and services, reached record player engagement levels across its global franchises, and transformed into one of the world’s leading digital entertainment companies. Prior to his appointment as CEO, Mr. Wilson held several leadership positions at EA, including Executive Vice President of EA SPORTS and Origin where he oversaw all aspects of the EA SPORTS business and development, as well as EA’s digital PC service from 2011 to 2013. Mr. Wilson serves as chairman of the board for the World Surf League. He is also a member of the United Nations HeForShe IMPACT 10x10x10, a group of 10 global CEOs, 10 heads of state and 10 university presidents committed to being change agents to advance gender equality.

SKILLS & EXPERTISE

Mr. Wilson brings senior leadership, international, human capital, and emerging technologies and business models experience to the Board from his position as CEO and director of a global, digital entertainment company. In addition, Mr. Wilson’s 20 years of experience in a variety of leadership positions at EA provides the Board significant sales, marketing and brand management experience, and industry and technical experience.

 

		FRANK D. YEARY		AGE: 56  DIRECTOR SINCE: 2009  OTHER CURRENT PUBLIC BOARDS: PayPal Holdings, Inc.  COMMITTEES: Audit, Corporate Governance and Nominating (Co-Chair)
		SKILLS & EXPERTISE:

EXPERIENCE

Frank D. Yeary has been Principal of Darwin Capital Advisors LLC, a private investment firm based in Phoenix, Arizona, since 2012. Mr. Yeary served as Executive Chairman of CamberView Partners, LLC, an advisory firm in San Francisco, California providing corporate governance and stockholder engagement advice to public companies, from 2012 to 2018. From 2012 to 2015, Mr. Yeary was Co-founder and Chairman of Level Money, Inc., a financial services company. From 2008 to 2012, Mr. Yeary was Vice Chancellor of UC Berkeley, and also Interim Chief Accounting Officer (CAO) from 2010 to 2011, where he oversaw changes to the university’s financial and operating strategy. Prior to 2008, Mr. Yeary spent nearly 25 years in the finance industry, most recently as Managing Director, Global Head of Mergers and Acquisitions, and a member of the Management Committee at Citigroup Investment Banking. Within the past five years, Mr. Yeary has served as a member of the board of directors of eBay. Mr. Yeary is a member of the board of directors of PayPal Holdings, Inc.

SKILLS & EXPERTISE

Mr. Yeary’s extensive career in investment banking and finance brings to the Board financial strategy and global M&A expertise, including expertise in financial reporting and experience in assessing the efficacy of M&A with international companies on a global scale, and experience attracting and retaining strong senior leaders. Mr. Yeary’s experience as Executive Chairman of CamberView partners and his service on the board of PayPal and his past service as a board member of eBay provides insight into matters relating to corporate governance, shareholder engagement and board best practices. As Vice Chancellor and CAO of a large public research university, Mr. Yeary gained extensive strategic and financial expertise. In addition, as co-founder of Level Money, Mr. Yeary has first-hand experience identifying and developing business models.

 

*

Effective after the conclusion of Intel’s 2020 Annual Stockholders’ Meeting, provided he/she is re-elected to the Board by stockholders at the meeting, Mr. Goetz will join the Corporate Governance and Nominating Committee and Finance Committee; Ms. Henry will join the Audit Committee and Compensation Committee; and Messrs. Smith and Wilson will join the Executive Committee.

 

		2020 PROXY STATEMENT  |  Proposal 1: Election of Directors				21

DIRECTOR SKILLS, EXPERIENCE, AND BACKGROUND

Intel is a large technology company engaged in research, manufacturing, and marketing on a global scale. We operate in highly competitive markets characterized by rapidly evolving technologies and exposure to business cycles. As we discuss below under “Board Committees and Charters,” the Corporate Governance and Nominating Committee is responsible for assessing with the Board the appropriate skills, experience, and background that we seek in Board members in the context of our business and the existing composition of the Board. This assessment includes numerous diverse factors, such as independence; understanding of and experience in manufacturing, technology, finance, and marketing; senior leadership experience; international experience; mix of ages; and gender, racial, geographic and ethnic diversity. The Board then determines whether a nominee’s background, experience, personal characteristics, and skills will advance the Board’s goal of creating and sustaining a Board with a diversity of perspectives and viewpoints that can support and oversee the company’s complex activities. Our Board is committed to actively seeking women and minority director candidates for consideration. As set forth in our Corporate Governance Guidelines, the committee and the Board periodically review and assess the effectiveness of these practices for considering potential director candidates.

Listed below are the skills and experience that we consider important for our directors in light of our current business and structure. The directors’ biographies note each director’s relevant experience, qualifications, and skills relative to this list.

 

				SENIOR LEADERSHIP EXPERIENCE Directors who have served in senior leadership positions are important to us because they have the experience and perspective to analyze, shape, and oversee the execution of important operational and policy issues. These directors’ insights and guidance, and their ability to assess and respond to situations encountered in serving on our Board, may be enhanced by leadership experience at businesses or organizations that operated on a global scale, faced significant competition, or involved technology or other rapidly evolving business models.
				GLOBAL/INTERNATIONAL EXPERIENCE We are a global organization with R&D, manufacturing, assembly, and test facilities, and sales and other offices in many countries. In addition, the majority of our revenue comes from sales outside the U.S. Because of these factors, directors with global experience can provide valuable business and cultural perspective regarding many important aspects of our business.
				INDUSTRY AND IT/TECHNICAL EXPERIENCE Because we design and manufacture technology, hardware, and software that powers the cloud, education or experience in relevant technology is useful for understanding our R&D efforts, competing technologies, the products and processes we develop, our manufacturing and assembly and test operations, and the market segments in which we compete.
				FINANCIAL EXPERTISE Knowledge of financial markets, financing and funding operations, and accounting and financial reporting processes is also important. This experience assists our directors in understanding, advising on, and overseeing Intel’s capital structure, financing, and investing activities, as well as our financial reporting and internal controls.
				HUMAN CAPITAL EXPERIENCE Because the market for senior technology leaders is extremely competitive, experience attracting and retaining top talent, particularly in high-demand areas such as cloud computing, AI, graphics processing units, virtual reality, and autonomous driving, can be an important skill for the Board to possess. In addition, evolving our culture is critical to delivering on our growth strategy and for continuing to attract and retain top talent, so directors with experience overseeing and helping to shape an organization’s culture are a valuable asset to the Board.
				OPERATING AND MANUFACTURING EXPERIENCE Because we are a leader in the design and manufacturing of advanced integrated digital technology platforms, understanding of and experience with manufacturing and other operational processes is a valuable asset to the Board.
				SALES, MARKETING, AND BRAND MANAGEMENT EXPERIENCE Directors with sales, marketing, and brand management experience can provide expertise and guidance as we seek to grow sales and enhance our brand.
				EMERGING TECHNOLOGIES AND BUSINESS MODELS EXPERIENCE Emerging technologies and business models can rapidly disrupt even the most well-thought-out strategy, particularly for technology companies. Directors with experience identifying and developing emerging technologies and business models can be valuable assets to the Board.

 

22		Proposal 1: Election of Directors  |  2020 PROXY STATEMENT

				BUSINESS DEVELOPMENT AND M&A EXPERIENCE Directors with a background in business development and M&A provide insight into developing and implementing strategies for growing our business. Useful experience in this area includes skills in assessing “make” vs. “buy” decisions, analyzing the “fit” of a proposed acquisition with a company’s strategy, valuing transactions, and assessing management’s plans for integration with existing operations.
				CYBERSECURITY/INFORMATION SECURITY Directors who have experience managing cybersecurity and information security risks or who understand the cybersecurity threat landscape can provide valuable knowledge and guidance to the Board in its oversight of the company’s cybersecurity risks.
				GOVERNMENT, LEGAL, AND REGULATORY EXPERIENCE Directors who have served in government positions provide experience and insights that help us work constructively with governments around the world and address significant public policy issues, particularly as they relate to Intel’s operations and to public support for science, technology, engineering, and mathematics education. Directors with a background in law can assist the Board in fulfilling its oversight responsibilities regarding Intel’s legal and regulatory compliance and its engagement with regulatory authorities.
				PUBLIC COMPANY BOARD EXPERIENCE Directors with public company board experience understand the dynamics and operation of a corporate board, the relationship of a public company board to the CEO and other senior management personnel, the legal and regulatory landscape in which public companies must operate, the importance of particular agenda and oversight issues, and how to oversee an ever-changing mix of strategic, operational, and compliance-related matters.
				BACKGROUND Members representing a mix of ages, genders, ethnicities, geographies, cultures, and other perspectives expand the Board’s understanding of the needs and viewpoints of our customers, partners, employees, governments, stockholders, and other stakeholders worldwide.

 

		2020 PROXY STATEMENT  |  Proposal 1: Election of Directors				23

BOARD MATRIX

 

Listed below are the skills and experience that we consider important for our director nominees in light of our current business strategy and structure. The directors’ biographies note each director’s relevant experience, qualifications, and skills relative to this list.

 

Board matrix skills & expertise experience bhusri Bryant hundt ishrak lavizzo-mourey liu smith swan Wilson yeary senior leadership global/international industry and it/technical financial expertise human capital operating and manufacturing sales, marketing, and brand management emerging technologies and business models business development and M&A government, legal, and regulatory public company board background tenure/age/gender years on the board age gender race/ethnicity/nationality African American/black Asian/south Asian white/Caucasian Hispanic/Latino native American born outside of the u.s. tenure age gender ethnic diversity 5.1 yrs average tenure of director nominees 58 yrs average age of director nominees 20% of director nominees are women 40% of director nominees are ethnically diverse 0-4 years 5-9 years 10+ years <54 years 54-64 years 65+ years women men people of color Caucasian 10+ Years

 

24		Proposal 1: Election of Directors  |  2020 PROXY STATEMENT

INDEPENDENT DIRECTOR TENURE

 

The Board generally believes that a mix of long- and short-tenured directors promotes an appropriate balance of views and insights and allows the Board as a whole to benefit from the historical and institutional knowledge that longer-tenured directors possess and the fresh perspectives contributed by newer directors. Our Corporate Governance Guidelines provide that, as an alternative to term limits, the Board seeks to maintain an average tenure of 10 years or less for the independent directors as a group.   If each independent director nominee is elected to the Board, after the 2020 Annual Stockholders’ Meeting, our independent directors will have served an average of 3.3 years on the Board, and six out of eight of our independent directors will have been on the Board for less than that period of time. Overall, our Board, including both independent and employee directors, will have an average tenure of 3.0 years. We believe that this mix of tenure on the Board represents a diversified “portfolio” of new perspectives and deep institutional knowledge.

BOARD DIVERSITY AND REFRESHMENT

 

Our Board is committed to actively seeking women and minority director candidates for consideration. In 2014, the Board formally adopted its commitment to actively seek women and minority candidates for the pool from which board candidates are chosen. In connection with this process, the Governance Committee also seeks input from Intel’s head of Global Diversity and Inclusion. Representation of gender, ethnic, geographic, cultural, or other diverse perspectives expands the Board’s understanding of the needs and viewpoints of our customers, partners, employees, governments, and other stakeholders worldwide. As part of our ongoing commitment to creating a balanced Board with diverse viewpoints and deep industry expertise, we regularly add new directors to infuse new ideas and fresh perspectives in the boardroom.   Our directors reflect diverse perspectives, including a complementary mix of skills, experience, and backgrounds that we believe are paramount to our ability to represent your interests as stockholders. In the last four years, seven new independent directors have been elected or appointed to the Board, three of whom have been women. If each director nominee is elected to the Board, after the 2020 Annual Stockholders’ Meeting, the majority of the Board would be diverse based on directors’ gender, ethnicity, and/or nationality.   Our Board is focused on combining the right mix of skills, experience and perspectives to support Intel’s future strategic direction, including its transformation from a PC-centric to data-centric company. For example, we have recently prioritized cybersecurity, information security and other database technology skills in our director recruitment efforts, as reflected by the recent additions of James J. Goetz and Alyssa Henry to our Board. In addition, recognizing the importance of the Board’s role in overseeing human capital risks as Intel undergoes a cultural transformation, over the past few years we have also added directors with human capital management experience. Intel is committed to focusing on Board diversity more broadly through engagement with key partners. In 2018, Intel joined the Thirty Percent Coalition (Coalition), which focuses on strategies to increase female representation on corporate boards. For 2019, the Coalition has added a specific focus on women of color. Through our partnerships, we aim to not only increase the available talent for our Board, but to also support increased female board representation across our industry.

 

		2020 PROXY STATEMENT  |  Proposal 1: Election of Directors				25

BOARD EVALUATIONS

We are committed to providing transparency about our Board and committee evaluation process. Our Chairman of the Board leads the Board’s self-evaluation process. Each director completes a comprehensive questionnaire evaluating the performance of the Board as a whole, the committees on which the director serves, the director’s own performance, and the performance of each of the director’s peers on the Board. The directors’ responses are aggregated and anonymized to encourage the directors to respond candidly and to maintain the confidentiality of their responses. The Chairman summarizes the directors’ responses about the performance of the Board as a whole and the committees and shares his findings with the Board. The annual evaluation process provides the Board with valuable insight regarding areas where the Board believes it functions effectively and, more importantly, areas where the Board believes it can improve. For example, input generated by Board members in recent years has focused, among other things, on the composition of our Board, which has encouraged and informed our recent Board refreshment efforts.

 

26		Proposal 1: Election of Directors  |  2020 PROXY STATEMENT

 

BOARD LEADERSHIP STRUCTURE

Chairman of the Board: Omar Ishrak

Chief Executive Officer: Robert (“Bob”) H. Swan

Board Leadership Structure. We separate the roles of Board Chairman and CEO to aid in the Board’s oversight of management. This policy is embodied in the Board’s published Corporate Governance Guidelines, and has been in effect since the company began operations. At times, the Chairman has been a former executive of the company and has served as a full-time executive officer, as was the case with Andy Bryant, who served as Executive Chairman until January 2020 and will not be standing for re-election at the annual meeting. In advance of Mr. Bryant stepping down, the Board considered the advisability of next electing an independent director as non-executive Chairman, and in January 2020 elected Dr. Ishrak, an independent director, as Chairman of the Board. Dr. Ishrak has worked closely with Mr. Bryant over the past several months to ensure a smooth transition of Board leadership and continued attention to thoughtful oversight of key matters.

The Board believes that there may be advantages to having an independent chairman, including by helping to facilitate relations between the Board, the CEO, and other senior management, assist the Board in reaching consensus on particular strategies and policies, and foster robust evaluation processes, and by efficiently allocating oversight responsibilities between the independent directors and management. Intel’s Board will consist of eight independent directors and the CEO as of the annual meeting.

Chairman Responsibilities. Our CEO has primary responsibility for the operational leadership and strategic direction of Intel, while our independent Chairman facilitates our Board’s oversight of management, promotes communication between management and our Board, engages with stockholders, and leads our Board’s consideration of key governance matters. As independent Chairman, and not a full-time executive officer of Intel (in contrast to the prior Board chairman), Dr. Ishrak’s responsibilities include:

 

•

presiding over all meetings of the Board;

 

•

developing the schedule and agenda for Board meetings in consultation with the CEO, Corporate Secretary, and other members of the Board;

 

•

assessing the quality, quantity, and timeliness of the information submitted by the company’s management that is necessary or appropriate for the non-employee directors to effectively and responsibly perform their duties;

 

•

calling and presiding over meetings of the independent directors;

 

•

working with the Corporate Governance and Nominating Committee to evaluate potential director candidates, determine the membership of the various Board committees, and select committee chairs;

 

•

managing the Board’s process for annual director self-assessment and evaluation of the Board and of the CEO;

 

•

serving as principal liaison between the Board and the CEO;

 

•

presiding over all meetings of stockholders; and

 

•

serving as the Board’s liaison for consultation and direct communication with stockholders.

The independent directors periodically assess the Board’s leadership structure and will continue to evaluate and implement the leadership structure that they conclude most effectively supports the Board in fulfilling its responsibilities.

 

		2020 PROXY STATEMENT  |  Corporate Governance				27

THE BOARD’S ROLE IN RISK OVERSIGHT AT INTEL

One of the Board’s important functions is oversight of risk management at Intel. Risk is inherent in business, and the Board’s oversight, assessment, and decisions regarding risks occur in the context of and in conjunction with the other activities of the Board and its committees.

Defining Risk. The Board and management consider “risk” to be the possibility that an undesired event could occur that might adversely affect the achievement of our objectives. Risks vary in many ways, including the ability of the company to anticipate and understand the risk, the types of adverse impacts that could result if the undesired event occurs, the likelihood that an undesired event and a particular adverse impact would occur, and the ability of the company to control the risk and the potential adverse impacts. Examples of the types of risks faced by Intel include:

 

•

macro-economic risks, such as inflation, deflation, reductions in economic growth, or recession;

 

•

political risks, such as restrictions on access to markets, confiscatory taxation, or expropriation of assets;

 

•

event risks, such as natural disasters, public health crises or cybersecurity incidents; and

 

•

business-specific risks related to strategy and competition, product demand, global operations, manufacturing, cybersecurity and privacy, intellectual property protection and theft, litigation and regulatory compliance, corporate responsibility and sustainability (including climate risk), and corporate governance risks.

Not all risks can be dealt with in the same way. Some risks may be readily perceived and controllable, while other risks are unknown; some risks can be avoided or mitigated by particular behavior, and some risks are unavoidable as a practical matter. In some cases, a decision may be made that a higher degree of risk may be acceptable because of a greater perceived potential for reward. Intel seeks to align its voluntary risk-taking with company strategy, and Intel understands that its projects and processes may enhance the company’s business interests by encouraging innovation and appropriate levels of risk-taking.

 

28		Corporate Governance  |  2020 PROXY STATEMENT

RISK ASSESSMENT RESPONSIBILITIES AND PROCESSES

 

 

 

The Board The full Board has primary responsibility for risk oversight. The Board executes its oversight duties through: - Assigning specific oversight duties to the Board committees - Periodic briefing and informational sessions by management on: -The types of risks the company faces -Enterprise risk management: risk identification, mitigation, and control For most enterprise risk management issues, such as cybersecurity risks, the Board receives regular and detailed reports from management or the appropriate Board committee regarding its review of the issues. In some cases, such as risks regarding new technology and product acceptance, risk oversight is addressed as part of the full Board's regular oversight of strategic planning. Audit Committee Oversees issues related to financial reporting, internal controls, audit functions, and major financial, product security, and cybersecurity risk exposures Finance Committee Oversees issues related to financial risk management, including the company's risk tolerance in cash-management investments Compensation Committee Oversees management of risks related to the company's compensation programs, including our conclusion that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the company, and human capital management Corporate Governance and Nominating Committee Oversees issues related to risks arising from the company's environmental, social and governance practices as well as corporate responsibility and sustainability initiatives and performance Management Management is primarily responsible for: Identifying risk and risk controls related to significant business activities Mapping the risks to company strategy Developing programs and recommendations to determine the sufficiency of risk identification, the balance of potential risk to potential reward, and the appropriate manner in which to manage risk With respect to the risk assessment of the company's compensation programs, management is primarily responsible for: Reviewing all significant compensation programs, focusing on programs with variable payouts Assessing the company's executive and broad-based compensation and benefits programs to determine whether the programs' provisions and operation create undesired or unintentional material risk. The risk assessment process: - Includes a review of compensation program policies and practices, risk identification and control procedures, the balance of risk to reward, and the significance and risks posed by compensation programs on the company's overall strategy - Takes into account compensation terms and practices that aid in controlling risk, including the compensation mix, payment periods, claw-back provisions, and stock ownership guidelines

 

		2020 PROXY STATEMENT  |  Corporate Governance				29

DIRECTOR INDEPENDENCE AND TRANSACTIONS CONSIDERED IN INDEPENDENCE DETERMINATIONS

Director Independence. The Board has determined that each of the following non-employee directors qualifies as “independent” in accordance with the published listing requirements of Nasdaq: Mr. Goetz, Ms. Henry, Mr. Hundt, Dr. Ishrak, Dr. Lavizzo-Mourey, Dr. Liu, Mr. Smith, Mr. Wilson, and Mr. Yeary. Because Mr. Swan is employed by Intel, he does not qualify as independent. Aneel Bhusri, who served as a director until November 1, 2019, was determined to be independent during the time he served on the Board. Mr. Bryant, who is not standing for re-election, did not qualify as independent because of his former employment by Intel.

The Nasdaq rules have objective tests and a subjective test for determining who is an “independent director.” Under the objective tests, a director cannot be considered independent if:

 

•

The director is, or at any time during the past three years was, an employee of the company;

 

•

The director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for Board or Board committee service);

 

•

A family member of the director is, or at any time during the past three years was, an executive officer of the company;

 

•

The director or a family member of the director is a partner in, a controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceeded 5% of the recipient’s consolidated gross revenue for that year, or $200,000, whichever was greater (subject to certain exclusions);

 

•

The director or a family member of the director is employed as an executive officer of an entity for which at any time during the past three years any of the executive officers of the company served on the compensation committee of such other entity; or

 

•

The director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit.

The subjective test states that an independent director must be a person who lacks a relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has not established categorical standards or guidelines to make these subjective determinations, but considers all relevant facts and circumstances.

In addition to the Board-level standards for director independence, the directors who serve on the Audit Committee each satisfy standards established by the U.S. Securities and Exchange Commission (SEC) and Nasdaq, as no member of the Audit Committee accepts directly or indirectly any consulting, advisory, or other compensatory fee from the company other than their director compensation, or otherwise has an affiliate relationship with the company. Similarly, the members of the Compensation Committee each qualify as independent under SEC and Nasdaq standards. Under these standards, the Board considered that none of the members of the Compensation Committee accept directly or indirectly any consulting, advisory, or other compensatory fee from the company other than their director compensation, and that none have any affiliate relationships with the company or other relationships that would impair the director’s judgment as a member of the Compensation Committee.

Transactions Considered in Independence Determinations. In making its subjective determination that each non-employee director is independent, the Board reviewed and discussed additional information provided by the directors and the company with regard to each director’s business and personal activities as they may relate to Intel and Intel’s management and considered transactions that occurred since the beginning of 2017 between Intel and entities associated with the independent directors or members of their immediate families. The Board considered the transactions in the context of the Nasdaq objective standards, the special standards established by the SEC and Nasdaq for members of audit and compensation committees, and the special SEC and U.S. Internal Revenue Service (IRS) standards for compensation committee members. Based on this review, as required by the Nasdaq rules, the Board made a subjective determination that, based on the nature of the directors’ relationships with the entity and/or the amount involved, no relationships exist that, in the opinion of the Board, impair the directors’ independence. The Board’s independence determinations took into account the following transactions:

Business Relationships. Each of our non-employee directors or one of his or her immediate family members who is, or was during the previous three fiscal years, a non-management director, trustee, advisor, or executive or served in a similar position at another entity that did business with Intel at some time during those years. The business relationships were ordinary course dealings as a supplier or purchaser of goods or services; licensing or research arrangements; facility, engineering, and equipment fees; or commercial paper or similar financing arrangements in which Intel or an affiliate participated as a creditor. Payments to or from each of these entities constituted less than the greater of $200,000 or 1% of each of Intel’s and the recipient’s annual revenue, respectively, in each of the past three years, except as discussed below.

 

•

Mr. Bhusri is CEO and director of Workday, Inc. (Workday), a company with which Intel engages in ordinary course business transactions. The Board carefully reviewed the nature of Intel’s transactions with Workday, which primarily related to human

 

30		Corporate Governance  |  2020 PROXY STATEMENT

resource management solutions contract and software subscription services, and Mr. Bhusri’s position as CEO and executive director at Workday. The fees paid to Workday represented less than 2.5% of Workday’s annual revenue in each of the past three years, and represented less than 0.07% of Intel’s revenue in each year. After considering these fees, the Board (with Mr. Bhusri recused) unanimously determined that Intel’s business transactions with Workday do not impair Mr. Bhusri’s independence.

 

•

Ms. Henry is a member of the board of directors of Unity Technologies (Unity), a company with which Intel engages in ordinary course business transactions. The Board carefully reviewed the nature of Intel’s transactions with Unity, which primarily related to software subscription services and related services, and Ms. Henry’s position as a non-management director at Unity. The fees paid to Unity represented less than 2.1% of Unity’s estimated annual revenue in each of the past three years, and represented less than 0.01% of Intel’s revenue in each year. After considering these fees, the Board (with Ms. Henry recused) unanimously determined that Intel’s business transactions with Unity do not impair Ms. Henry’s independence.

Charitable Contributions. Dr. Lavizzo-Mourey, Dr. Liu, or one of their immediate family members is serving, or has each served during the previous three fiscal years, as an executive, professor, or other employee for one or more colleges or universities or as a director, executive, or employee of a charitable entity that received matching or other charitable contributions from Intel during those years. Charitable contributions to each of these entities (including matching and discretionary contributions by Intel and the Intel Foundation) constituted less than the greater of $120,000 or 1% of the recipient’s annual revenues in each of the past three years, as discussed below.

 

•

Dr. Liu is Dean and Roy W. Carlson Professor of Engineering in the College of Engineering at UC Berkeley. The Intel Foundation contributed less than $59,500 in each of the past three years to match Intel employee charitable contributions to UC Berkeley, amounting to less than 0.003% of UC Berkeley’s consolidated annual revenue for each of the past three years.

 

•

Dr. Lavizzo-Mourey is Robert Wood Johnson Foundation PIK Professor of Population Health and Health Equity at the University of Pennsylvania. The Intel Foundation contributed less than $28,000 in each of the past three years to match Intel employee charitable contributions to the University of Pennsylvania, amounting to less than 0.0001% of the University of Pennsylvania’s consolidated annual revenue for each of the past three years.

 

•

Dr. Lavizzo-Mourey is a member of the Board of Regents of the Smithsonian Institution. The Intel Foundation contributed less than $3,300 in each of the past three years to match Intel employee charitable contributions to the Smithsonian Institution, amounting to less than 0.002% of the Smithsonian Institution’s consolidated annual revenue for each of the past three years, and in 2019, Intel entered into a sponsorship agreement with the Smithsonian Institution, amounting to less than 0.78% of the Smithsonian Institution’s consolidated annual revenue for 2019.

 

		2020 PROXY STATEMENT  |  Corporate Governance				31

CORPORATE GOVERNANCE GUIDELINES

Intel has long maintained a set of Corporate Governance Guidelines. The Corporate Governance and Nominating Committee reviews the guidelines periodically and recommends amendments to the Board as appropriate. The Board oversees administration and interpretation of, and compliance with, the guidelines and may amend, waive, suspend, or repeal any of the guidelines at any time, with or without public notice subject to legal requirements, as it determines necessary or appropriate in the exercise of the Board’s judgment in its role as fiduciary.

These guidelines, which investors may find on our website at www.intel.com/governance, along with our other corporate governance practices, compare favorably under the Investor Stewardship Group’s (ISG) Corporate Governance Framework for U.S. Listed Companies, as shown in the table below.

 

ISG PRINCIPLE		INTEL PRACTICE
Principle 1 Boards are accountable to stockholders		•  All directors are elected annually   •  Majority voting in uncontested director elections   •  Proxy access with market terms (3% for three years, up to 20% of the Board)   •  Annual Chairman’s letter in proxy statement that describes the Board’s activities over the past year
Principle 2 Stockholders should be entitled to voting rights in proportion to their economic interest		•  No dual-class share structure   •  Each stockholder is entitled to one vote per share
Principle 3 Boards should be responsive to stockholders and be proactive in order to understand their perspectives		•  Management met with investors owning 38.9% of shares outstanding in 2019   •  Engagement topics included Board leadership structure; Board diversity; issues concerning ESG matters; executive compensation; and stockholder-called special meetings   •  The Board has made a number of changes in response to investor feedback, including:   •  enhancing the integration of ESG disclosure into our Form 10-K, proxy statement, and Corporate Responsibility Report;   •  working on aligning human capital and climate risk disclosures with external frameworks;   •  adding three-year EPS as a performance metric for performance-based RSUs; and   •  proactively lowering the stockholder special meeting threshold to 15% from 25%
Principle 4 Boards should have a strong, independent leadership structure		•  Independent Chairman, separate from CEO   •  Board considers appropriateness of its leadership structure at least annually   •  Independent committee chairs   •  Independent directors meet in executive session at least three times per year
Principle 5 Boards should adopt structures and practices that enhance their effectiveness		•  88.9% of the director nominees are independent   •  33% of the director nominees are ethnically diverse, 33% of the director nominees are gender diverse, and we have a policy of seeking out women and minority candidates, as well as candidates with diverse backgrounds, experiences, and skills, as part of each Board search   •  Annual Board and committee self-evaluations   •  Active Board refreshment, with seven new directors joining since 2017, and seek to cap average director tenure at 10 years   •  Limits on outside boards, with no director permitted to serve on more than four public company boards (including Intel)   •  No restrictions on directors’ access to management or employees   •  No independent director is expected to stand for re-election after age 72 without prior Board approval
Principle 6 Boards should develop management incentive structures that are aligned with the long-term strategy of the company		•  Compensation Committee annually reviews and approves incentive program design, goals, and objectives for alignment with compensation and business strategies   •  Annual and long-term incentive programs are designed to reward financial and operational performance that furthers short- and long-term strategic objectives

 

32		Corporate Governance  |  2020 PROXY STATEMENT

DIRECTOR ATTENDANCE

The Board held six regularly scheduled meetings and six special meetings in 2019. As shown in the Board Committee chart below, standing committees of the Board collectively held a total of 30 meetings during 2019, with each committee holding a number of regularly scheduled and special meetings. We expect each director to attend every meeting of the Board and the committees on which he or she serves. Each director attended at least 75% of the meetings of the Board and each committee on which he or she served in 2019 (held during the period in which the director served), and on average directors attended 97% of Board and committee meetings. The Board’s policy is that directors should endeavor to attend the annual stockholders’ meeting, and eight out of 10 of the then-incumbent directors (other than Mr. Hundt and Mr. Wilson) attended the 2019 Annual Stockholders’ Meeting.

BOARD RESPONSIBILITIES AND COMMITTEES

Board Responsibilities. The Board oversees, counsels, and directs management in the long-term interests of the company and our stockholders. The Board’s responsibilities include:

 

•

overseeing the conduct of our business and the assessment of our business and other enterprise risks to evaluate whether the business is being properly managed;

 

•

planning for CEO succession and monitoring management’s succession planning for other senior executives;

 

•

reviewing and approving our major financial objectives, strategy, operating plans, and other significant actions;

 

•

selecting the CEO, evaluating CEO performance, and determining the compensation of the CEO and other executive officers; and

 

•

overseeing our processes for maintaining the integrity of our financial statements and other public disclosures, and our compliance with law and ethics.

The Board and its committees met throughout the year on a set schedule, held special meetings, and acted by written consent from time to time as appropriate. At each Board meeting, time is reserved for the independent directors to meet in executive session without the CEO present. Officers regularly attend Board meetings to present information on our business and strategy, and Board members have worldwide access to our employees outside of Board meetings. Board members are encouraged to make site visits on a worldwide basis to meet with local management; to attend Intel industry, analyst, and other major events; and to accept invitations to attend and speak at internal Intel meetings.

The Board’s Role in Succession Planning. As reflected in our Corporate Governance Guidelines, the Board’s primary responsibilities include planning for CEO succession and monitoring management’s succession planning for other senior executives. The Board’s goal is to have a long-term and continuing program for effective senior leadership development and succession. The Board also has contingency plans in place for emergencies such as the departure, death, or disability of the CEO or other executive officers. In connection with the CEO transition process that commenced in 2018, the Board formed a special committee, chaired by an independent director, which met more than 20 times during 2018 and 2019 as part of its oversight and leadership of the process to identify the candidate with the appropriate skills, vision, and experience to lead Intel into the future.

Board Committees. The Board assigns responsibilities and delegates authority to its committees, and the committees regularly report on their activities and actions to the full Board. The Board has five standing committees: Audit, Compensation, Corporate Governance and Nominating, Executive, and Finance. Each committee can engage outside experts, advisors, and counsel to assist the committee in its work.

Each committee has a written charter approved by the Board. We post each charter in the Corporate Governance section of our website at www.intc.com/committees-charters.

 

		2020 PROXY STATEMENT  |  Corporate Governance				33

The following table identifies the current committee members as of March 16, 2020. As discussed above, the Board has determined that each member of the Audit, Compensation, and Corporate Governance and Nominating Committees is an independent director in accordance with Nasdaq standards.

 

NAME

AUDIT

COMPENSATION

CORPORATE GOVERNANCE AND NOMINATING

EXECUTIVE

FINANCE

Andy D. Bryant

James J. Goetz1

Alyssa Henry2

Reed E. Hundt

Omar Ishrak*

●

●

Risa Lavizzo-Mourey

Tsu-Jae King Liu

●

Gregory D. Smith3

●

Robert (“Bob”) H. Swan

Andrew Wilson3

●

Frank D. Yeary

●

Number of Committee Meetings Held in 2019

9

11

7

1

2

 

*

Chairman

●	Chair/Co-Chair

Member

1	Mr. Goetz will join the Corporate Governance and Nominating Committee and Finance Committee effective after the conclusion of the 2020 Annual Stockholders’ Meeting.

2	Ms. Henry will join the Audit Committee and Compensation Committee effective after the conclusion of the 2020 Annual Stockholders’ Meeting.

3	Messrs. Smith and Wilson will join the Executive Committee effective after the conclusion of the 2020 Annual Stockholders’ Meeting.

AUDIT COMMITTEE

 

Current membership: Gregory D. Smith (Chair), Tsu-Jae King Liu, and Frank D. Yeary

 

•

Assists the Board in its general oversight of our financial reporting, internal controls, and audit functions.

 

•

Appoints and retains our independent registered public accounting firm, managing its compensation, and overseeing its work.

 

•

Reviews and discusses with management our company’s major financial, product security, and cybersecurity risk exposures and the steps management has taken to monitor and control such exposures.

 

•

Receives periodic reports from the Global Director of Ethics and Legal Compliance, no less than annually, on the operation and effectiveness of the company’s corporate compliance program.

 

•

Oversees compliance with our company’s Code of Conduct.

During the past year, the Audit Committee’s oversight focused on, among other things, key financial reporting matters, critical accounting estimates, ethical and legal compliance, and enterprise risk management, including cybersecurity and product security. The Board has determined that Mr. Yeary and Mr. Smith each qualify as an “audit committee financial expert” under SEC rules and that each Audit Committee member is sufficiently proficient in reading and understanding the company’s financial statements to serve on the Audit Committee. The responsibilities and activities of the Audit Committee are described in detail in “Report of the Audit Committee” in this proxy statement and the Audit Committee’s charter.

COMPENSATION COMMITTEE

 

Current membership: Andrew Wilson (Chair), Reed E. Hundt, Omar Ishrak, and Risa Lavizzo-Mourey

 

•

Reviews, recommends, and approves salaries, bonuses, and other matters related to the compensation of our executive officers.

 

•

Reviews and approves the performance measures and goals for our executive officers.

 

•

Reviews and grants equity awards to our executive officers.

 

34		Corporate Governance  |  2020 PROXY STATEMENT

•

Reviews and determines other compensation policies, handles many compensation-related matters, and makes recommendations to the Board and to management on employee compensation and benefit plans.

 

•

Administers Intel’s equity incentive plans.

 

•

Reviews Intel’s programs and practices related to executive workforce diversity and the administration of executive compensation programs in a non-discriminatory manner.

 

•

Oversees the company’s strategies, initiatives and programs with respect to the company’s culture; talent recruitment, development and retention; employee engagement, diversity and inclusion; and management development and succession planning for the company’s CEO and selected senior leaders.

During the past year, the Compensation Committee’s oversight focused on, among other things, compensation program strategy and design, CEO and CFO transition pay, human capital management, succession planning, and leadership development. The Compensation Committee is responsible for determining compensation for Intel executives (including our CEO and our Chairman of the Board), while the Corporate Governance and Nominating Committee recommends to the full Board the compensation for non-employee directors. The Compensation Committee can designate one or more of its members to perform duties on its behalf, subject to reporting to or ratification by the Compensation Committee, and can delegate to other Board members, or an officer or officers of the company, the authority to review and grant stock-based compensation for employees who are not executive officers.

The Compensation Committee engaged Compensia as its independent executive compensation consultant in July 2019. Prior to that, it had retained Pay Governance. The consultant provides input, analysis, and advice about Intel’s executive compensation philosophy, peer groups, pay positioning (by pay component and in total) relative to peer companies, compensation design, equity usage and allocation, and risk assessment under Intel’s compensation programs. The consultant reports directly to the Compensation Committee and interacts with management at the committee’s direction. Neither Compensia nor Pay Governance performed work for Intel in 2019 except under its respective engagement by the Compensation Committee. The Compensation Committee made assessments of its compensation consultants under factors set forth in the SEC’s rules and concluded that each of Compensia and Pay Governance was independent, and that the firms’ work in 2019 for the Compensation Committee did not raise any conflicts of interest.

The CEO makes recommendations to the Compensation Committee on the base salary, annual incentive cash targets, and equity awards for all executive officers other than himself. These recommendations are based on his assessment of each executive officer’s performance during the year and his review of, among other things, compensation surveys, competitive market data, and criticality of each role. For more information on the responsibilities and activities of the Compensation Committee, including the processes for determining executive compensation, see “Compensation Discussion and Analysis,” “Report of the Compensation Committee,” and “Executive Compensation” in this proxy statement, and the Compensation Committee’s charter (available at www.intc.com/committees-charters).

CORPORATE GOVERNANCE AND NOMINATING COMMITTEE

 

Current membership: Omar Ishrak (Co-Chair), Frank D. Yeary (Co-Chair), and Risa Lavizzo-Mourey

 

•

Identifies, evaluates, and recruits individuals to become Board members.

 

•

Reviews matters of corporate governance, corporate responsibility and sustainability performance, such as environmental, sustainability, climate risk, human capital, political contributions, and stakeholder issues, and periodically reports on these matters to the Board.

 

•

Periodically reviews and assesses the effectiveness of the Board’s Corporate Governance Guidelines, recommends to the Board proposed revisions to the Guidelines and committee charters, and reviews the poison pill policy.

 

•

Makes recommendations to the Board regarding the size and composition of the Board and its committees.

 

•

Reviews stockholder proposals and recommends actions on such proposals.

 

•

Advises the Board on compensation for our non-employee directors.

 

•

Periodically reviews and assesses our stockholder engagement process, and reviews and reports stockholder feedback to the Board and works with the Board and management to address.

During the past year, the Corporate Governance and Nominating Committee’s oversight focused on, among other things, board composition and disclosure, director recruitment, Intel’s Corporate Responsibility Report and trends (including environmental

 

		2020 PROXY STATEMENT  |  Corporate Governance				35

sustainability, climate risk, human capital, human rights issues, and political accountability), and investor outreach and feedback. The Corporate Governance and Nominating Committee also establishes procedures for Board nominations and recommends candidates for election to the Board. Consideration of new Board candidates typically involves a series of internal discussions, review of candidate information, and interviews with selected candidates. Board members typically suggest candidates for nomination to the Board. In addition to candidates identified by Board members, the committee considers candidates proposed by stockholders and evaluates them using the same criteria. A stockholder who wishes to suggest a candidate for the committee’s consideration should send the candidate’s name and qualifications to our Corporate Secretary. The Corporate Secretary’s contact information can be found in this proxy statement under the heading “Other Matters; Communicating with Us.” During 2019, the Board retained and paid fees to a third-party search firm to assist the Corporate Governance and Nominating Committee in the processes of identifying and evaluating potential Board candidates, consistent with the committee’s criteria. Our new director nominees, James J. Goetz and Alyssa Henry, were initially recommended to the Corporate Governance and Nominating Committee by a former director and a third-party search firm, respectively.

In screening director candidates, regardless of whether they are identified by current Board members, stockholders, or third-party search firms, the committee considers the diversity of skills, experience, and background of the Board as a whole and, based on that analysis, determines whether it would strengthen the Board to add a director with a certain type of background, experience, personal characteristics, or skills. In particular, the committee considers factors such as independence; understanding of and experience in manufacturing, technology, cybersecurity/information security, finance, and marketing; senior leadership experience; international experience; age; and gender, racial, geographic and ethnic diversity, which includes its commitment to actively seek women and minority candidates for the pool from which board candidates are chosen. In connection with this process, the committee also seeks input from Intel’s head of Global Diversity and Inclusion.

EXECUTIVE COMMITTEE

 

Current membership: Omar Ishrak (Chair), Andy D. Bryant, Reed E. Hundt, and Robert (“Bob”) H. Swan

 

•

Exercises the authority of the Board between Board meetings, except as limited by applicable law.

FINANCE COMMITTEE

 

Current membership: Tsu-Jae King Liu (Chair), Gregory D. Smith and Andrew Wilson

 

•

Assist the Board in its oversight of global treasury activities; derivatives transactions; financial risk management; off-balance sheet arrangements; mergers, acquisitions, divestitures and strategic investments; capital structure and capital allocation strategy; financing requirements; capital expenditures; dividends; stock repurchase authorizations; investor relations activities; insurance and self-insurance programs; and retirement plans.

 

•

Annually reviews and approves on behalf of the company and its subsidiaries the company’s decisions to enter into swaps that are exempt from mandatory exchange execution and clearing pursuant to the Commodity Exchange Act “end-user” and “treasury affiliate” exceptions.

 

36		Corporate Governance  |  2020 PROXY STATEMENT

INVESTOR ENGAGEMENT

Our relationship with our stockholders is an important part of our company’s success and we have a long tradition of engaging with our stockholders and obtaining their perspectives. During 2019, our integrated outreach team led by our Investor Relations group, Corporate Responsibility office, Executive Compensation team, and the Corporate Secretary’s office, met to discuss a wide variety of issues with investors representing an aggregate of almost 40% of our outstanding shares. We believe that our approach to engaging openly with our investors on topics such as financial issues, corporate governance, executive compensation, and corporate responsibility drives increased corporate accountability, improves decision making, and ultimately creates long-term value. We are committed to:

 

•

Accountability. Drive and support leading corporate governance and board practices to ensure oversight, accountability, and good decision making.

 

•

Transparency. Maintain high levels of transparency on a range of financial, governance, and corporate responsibility issues to build trust and sustain two-way dialogue that supports our business success.

 

•

Engagement. Proactively engage with stockholders and stakeholder groups in dialogue on a range of topics to identify emerging trends and issues to inform our thinking and approach.

In addition to our regular integrated outreach team engagements, we hold a series of meetings every year with many of our institutional stockholders focused on environmental, social and governance performance and disclosure. We pursue multiple avenues for stockholder engagement, including in-person and teleconference meetings with our stockholders, participating at various conferences, and issuing periodic reports on our activities. Through these activities, we discuss and receive input, provide additional information, and address questions on our corporate strategy, executive compensation programs, corporate governance, and other topics of interest to our stockholders, such as our corporate responsibility activities discussed above. These engagement efforts with our stockholders allow us to better understand our stockholders’ priorities and perspectives, and provide us with useful input concerning our corporate strategy and our compensation and corporate governance practices. We actively engage with our stockholders on a year-round basis and integrate the information we learn through these activities into our governance calendar, as reflected below.

INVESTOR ENGAGEMENT CYCLE

 

 

SUMMER Review annual meeting results to determine appropriate next steps, and prioritize post-annual meeting investor engagement focus areas FALL Hold post-annual meeting investor meetings to solicit feedback and report to the Board and Corporate Governance and Nominating Committee WINTER Incorporate input from investor meetings into annual meeting planning and enhance governance and compensation practices and disclosures when warranted SPRING Conduct pre-annual investor meetings to answer questions and understand investor views on proxy matters ANNUAL STOCKHOLDERS' MEETING

The feedback we receive from stockholders and stakeholder groups through these activities is communicated to the Corporate Governance and Nominating Committee on a regular basis throughout the year, and to our full Board once a year. After careful review, our Corporate Governance and Nominating Committee recommends to the Board whether enhancements to our company’s policies and practices are required to meet stockholder expectations relating to new issues or emerging trends.

 

 

Total Contacted Total Engaged Director Engaged

 

		2020 PROXY STATEMENT  |  Corporate Governance				37

Below is a summary of the feedback we received through our 2019 investor engagement program and how we responded.

 

WHAT WE HEARD FROM INVESTORS		OUR PERSPECTIVE / HOW WE RESPONDED
Board composition: would like to see more disclosure around our priorities for future director recruitment		•  We formally adopted the Rooney Rule (ensuring diverse candidates in the pool as part of each Board search) to promote diversity in 2014 and remain committed to maintaining gender, ethnic, geographic, cultural, and other diverse perspectives on our Board •  In 2018, Intel joined the Thirty Percent Coalition (Coalition), which focuses on strategies to increase female representation on corporate boards, and in 2019, the Coalition has added a specific focus on women of color •  We provide substantial disclosure around the composition of our current Board and the skill sets we consider important for our directors to have as well as our process for identifying and evaluating potential director candidates •  Based on investor feedback, this year we have added more information to our proxy statement about our priorities for future director recruitment, which includes ESG oversight experience and diversity (see “Board Diversity and Refreshment” on page 25)
ESG disclosure and governance: continue to view our ESG disclosures as best-in-class, but would like to see more disclosure around how our board oversees ESG, including with respect to human capital management and culture		•  We have worked, and are continuing to work, to integrate our ESG and SEC reporting and align our ESG disclosures with external frameworks such as SASB and TCFD •  We established formal board-level oversight responsibility for corporate responsibility in 2003. Our independent Corporate Governance and Nominating Committee is primarily responsible for these matters, with additional environmental, social and governance matters reviewed by other committees (e.g. the Compensation Committee is responsible for oversight of human capital issues and the Audit Committee is responsible for oversight of our corporate ethics and compliance program) •  Based on investor feedback, this year we have added more information to our proxy statement about our Board processes for overseeing ESG (see “Corporate Responsibility” on page 39) and to our Corporate Responsibility Report about the connection between our ESG program and our strategy and value creation
Specific ESG topics: would like to see more information about how we manage climate and water risks; human capital, pay equity and inclusion; and technology-related ethics and human rights issues		•  We are in the process of completing our 2020 corporate responsibility goals and working to develop new goals for 2030 that we plan to announce soon following further engagement with our stakeholders on these issues •  We are working to evaluate emerging issues related to technology and developing appropriate management and oversight processes •  Based on investor feedback, this year we have added more information to our Corporate Responsibility Report about our approach to climate change and human capital management, and we began publishing additional information on our gender and racial pay equity
ESG and pay: would like to see more disclosure around how we integrate ESG into our compensation programs		•  We are committed to corporate responsibility and sustainability and, as part of that commitment, since 2008 we have linked a portion of employee and executive pay to corporate responsibility factors •  Based on investor feedback, this year we have added more information to our proxy statement about this linkage, including explaining how these goals factor into compensation decisions and identifying the specific ESG goals we use for our executives (see “Impact of ESG Metrics” on page 78)
For a discussion of additional feedback we received on our executive compensation program, see “Investor Engagement and the 2019 ‘Say on Pay’ Vote” on page 63.

COMMUNICATIONS FROM STOCKHOLDERS TO DIRECTORS

The Board recommends that stockholders initiate communications with the Board, the Chairman, or any Board committee by writing to our Corporate Secretary. You can find the address in the “Other Matters” section of this proxy statement. This process assists the Board in reviewing and responding to stockholder communications. The Board has instructed our Corporate Secretary to review correspondence directed to the Board and, at the Corporate Secretary’s discretion, to forward items that she deems to be appropriate for the Board’s consideration.

 

38		Corporate Governance  |  2020 PROXY STATEMENT

 

Our commitment to corporate responsibility and sustainability—built on a strong foundation of transparency, governance, and ethics—creates value for Intel and our stockholders by helping us mitigate risks, reduce costs, build brand value, and identify new market opportunities. We set ambitious goals for our company and make strategic investments to advance progress in the areas of environmental sustainability, supply chain responsibility, diversity and inclusion, and social impact that benefit the environment and society. Through our technology, we enable more people to harness the power of data to help address society’s most complex issues—from climate change and energy efficiency, to economic empowerment and human rights.

We established formal Board-level oversight responsibility for corporate responsibility in 2003 and, since 2008, have linked a portion of employee and executive pay to corporate responsibility factors. This year, we arrive at an important milestone in our journey as we finalize our 2020 corporate responsibility goals and launch new 2030 goals and aspirations for the next decade. We are proud of the results we have achieved to date—but as we look toward the next decade we know that even greater leadership will be required. We look forward to sharing our new 2030 goals later this year, enabling Intel to continue our leadership and to collaborate with others to achieve wider global impact.

A foundational element of our approach to corporate responsibility is our commitment to transparency, and we regularly evaluate the effectiveness of our reporting on our ESG reporting based on review of external reporting frameworks and direct feedback from our stockholders and other stakeholders. For more information on how our focus on corporate responsibility creates value for Intel and our stockholders, see the ”Our Capital” section on page 40 and in our 2019 Annual Report on Form 10-K, as well as our most recent Corporate Responsibility Report.

 

		2020 PROXY STATEMENT  |  Corporate Responsibility				39

 

In line with the International Integrated Reporting Council’s six capitals concept, we have outlined how we deploy capital to execute our transformation strategy in ways that reflect our corporate values, delight our customers, and create value for our stockholders.

 

  FINANCIAL CAPITAL

Our financial capital allocation strategy focuses on building stockholder value. We have returned approximately 90% of free cash flow to investors over the past five years and expect to return approximately 100% in 2020.

            CASH FROM OPERATING ACTIVITIES $B            

 

 

 

¹ See “Non-GAAP Financial Measures” in Appendix A.

OUR FINANCIAL CAPITAL ALLOCATION DECISIONS ARE DRIVEN BY THREE PRIORITIES

 

 

 

40		Our Capital  |  2020 PROXY STATEMENT

  INTELLECTUAL CAPITAL

RESEARCH AND DEVELOPMENT

R&D is a critical factor in achieving our strategic objectives to make the world’s best semiconductors, to lead technology inflections, and to provide leading end-to-end platform solutions. Successful R&D efforts can lead to new products and technologies or improvements to existing ones, which we seek to protect through our IP rights. We may augment our R&D initiatives through the following methods: acquiring or investing in companies, entering into R&D agreements, and directly purchasing or licensing technology.

 

PRODUCT TECHNOLOGY

Every year we make significant investments in R&D and we have intensified our focus on six engineering pillars to advance our product capabilities. Our objective is to improve user experiences and value through advances in performance, power, cost, connectivity, security, form factor, and other features with each new generation of products. We are also focused on reducing our design complexity to improve our efficiency, including a significant reduction of design rules for future process nodes.

Process. Development of next-generation manufacturing processes remains a critical and fundamental pillar. We announced that we are planning multiple waves of 10nm process, progressively increasing transistor performance. We also announced advances in our nextgeneration 2.5D (EMIB) and 3D (Foveros) packaging technology which will enable us to mix and match chips made on different processes into a single SiP, enabling new design flexibility and new device form factors. The Intel 10nm product era is underway, as we began shipping our new 10th generation Intel^® Core™ processors, previously referred to as Ice Lake.

Architecture. We are designing products for four major computing architectures—CPU, GPU, AI accelerator, and FPGA products—as we move toward a model of providing multiple “xPU” compute platforms for a more diverse era of computing. We shipped the 10th generation Intel^® Core™ processors with our next-generation CPU microarchitecture, which has architectural extensions designed for special-purpose computing tasks such as AI and cryptography, among other features. These processors also include the next generation of graphics microarchitecture, with performance and feature upgrades. We also continue to make progress on the development of our first discrete GPU.

Memory. With our Intel^® 3D NAND technology and Intel^® Optane™ technology, we are developing products to disrupt the memory and storage hierarchy. The 4th generation of Intel^®-based SSDs are scheduled to launch in 2020 with 144-layer QLC memory technology. These SSDs are also Intel’s first NAND memory technology created independently by Intel since the conclusion of our partnership with Micron Technology, Inc. (Micron). The 2nd generation Intel^® Optane™ SSDs for data centers are scheduled to start shipping samples in 2020, and are designed to deliver three times the throughput while reducing application latency by four times. In addition, the second-generation Intel^® Optane™ DC persistent memory is expected to achieve PRQ in 2020, and is designed for use with our future Intel^® Xeon^® CPUs.

Interconnect. We have a broad portfolio of interconnect solutions, ranging from silicon to the data center to wireless. Our silicon photonics technology integrates lasers into silicon to create high-speed optical connections that can help remove networking bottlenecks in the data center. We announced two initiatives to help influence the industry—USB4 and CXL. USB4 advances the speed and capability for interconnect in client platforms. CXL, an open interconnect technology, creates a high-speed, low latency interconnect between the CPU and accelerators, such as GPUs, FPGAs, and networking.

Security. We continue to make significant investments in security technologies. We created the Intel Security Architecture and Technologies Group to serve as a center for security architecture across our products to design world-class product security architecture for the years ahead.

Software. The performance potential of our hardware products is unlocked with software. Our vision is to unify our software abstractions across all our xPU platforms. We are developing a project called oneAPI to simplify programming for developers across our CPU, GPU, FPGA, AI accelerator, and other accelerator products, providing a unified portfolio of developer tools for mapping software to the hardware that can best accelerate the code.

IP RIGHTS

We own and develop significant IP and related IP rights around the world that support our products, services, R&D, and other activities and assets. Our IP portfolio includes patents, copyrights, trade secrets, trademarks, mask work, and other rights. We actively seek to protect our global IP rights and to deter unauthorized use of our IP and other assets. For a detailed discussion of our IP rights, see “Intellectual Property Rights and Licensing” in our 2019 Annual Report on Form 10-K.

 

		2020 PROXY STATEMENT  |  Our Capital				41

  MANUFACTURED CAPITAL

We are an integrated device manufacturer (IDM). Unlike many other semiconductor companies, we primarily design and manufacture our products in our own manufacturing facilities, and we see our in-house manufacturing as an important advantage. We continue to develop new generations of manufacturing process technology as we seek to realize the benefits from Moore’s Law. Realizing Moore’s Law results in economic benefits as we are able to either reduce a chip’s cost as we shrink its size, or increase functionality and performance of a chip while maintaining the same cost with higher density. This makes possible the innovation of new products with higher performance while balancing power efficiency, cost, and size to meet customers’ needs. Our ability to optimize and apply our manufacturing expertise to deliver more advanced, differentiated products is foundational to our current and future success.

We improved our 10nm factory production, yield, and volume during 2019, and launched 10th-generation Intel^® Core™ processors, our first 10nm volume product, and Intel^® Agilex™, our first 10nm FPGA. We expect to deliver initial production shipments of our first 10nm-based Intel^® Xeon^® Scalable product, Ice Lake, in the latter part of 2020.

We are on track to deliver our first 7nm-based product, a data center-focused discrete GPU, at the end of 2021. We are approaching next-generation process nodes with a focus on striking an optimal balance between schedule, performance, power, and cost and will continue to drive intra-node advancement.

NETWORK AND SUPPLY CHAIN

We previously announced multiple manufacturing site expansions with multi-year construction activities that began in 2019. In addition to expanding our own manufacturing capability, we are increasing our use of foundries to enable our differentiated manufacturing to produce more CPU products. We use third-party foundries to manufacture wafers for certain components and leverage subcontractors to augment capacity to perform assembly and test in addition to our in-house manufacturing, primarily for chipsets and adjacent products. As we considered the estimated $300 billion TAM¹ opportunity ahead of us, it was imperative that we prepare our global manufacturing network to be responsive to changes in demand. However, despite increasing 14nm wafer capacity, we did not see a commensurate increase in client CPU unit volume as wafer capacity was largely consumed by increases in modem and chipset volumes, and unit die sizes. Our focus on capacity expansion and meeting customer expectations is critical as we move into 2020.

 

We have nine manufacturing sites—six are wafer fabrication and three are assembly/test facilities. The map marks our manufacturing sites and the countries where we have a significant R&D or sales and marketing presence.   The majority of our logic wafer manufacturing is conducted in the U.S. We incur factory start-up costs as we ramp facilities for new process technologies. We ramped the 10nm process node in Oregon and Israel in 2019, and began production in Arizona in our 2020 fiscal year. We also expanded our memory facilities in Dalian, China.

Our manufacturing facilities are primarily used for silicon wafer manufacturing of our platform and memory products. These facilities are built following a “copy exactly” methodology, whereby new process technologies are transferred identically from a central development fab to each manufacturing facility. This enables fast ramp of the operation as well as better quality control. These wafer fabs operate in a network of manufacturing facilities integrated as one factory to provide the most flexible supply capacity, allowing us to better analyze our production costs and adapt to changes in capacity needs.

In 2019, we ramped 96-layer 3D NAND technology and prepared to begin manufacturing our 144-layer 3D NAND technology in 2020 in our facility in Dalian, China. The next generation of Intel^® Optane™ technology and SSDs are being developed in New Mexico following the sale of our non-controlling interest in IMFT to Micron on October 31, 2019. We will continue to purchase product manufactured by Micron at the IMFT facility under established supply agreements.

¹ Source: Intel calculated 2024 TAM derived from industry analyst reports.

 

42		Our Capital  |  2020 PROXY STATEMENT

  HUMAN CAPITAL

 

Evolving our culture is critical to delivering on our growth strategy and for continuing to attract and retain top talent needed to support our transformation to a data-centric company. We have an amazing legacy of innovation and a powerful culture, yet our ambitions have grown. Together, we are evolving our culture to build an even brighter future. Our global workforce of 110,800 is highly educated, with approximately 90% of our people working in technical roles. We invest in creating a diverse, inclusive, and safe work environment where our employees can deliver their workplace best every day.   All employees are responsible for upholding the Intel Values, Intel Code of Conduct, and Intel Global Human Rights Principles, which form the foundation of our policies and practices. For over a decade, we have tracked and publicly reported on key human capital metrics, including workforce demographics, diversity and inclusion data, turnover, and training data.				“Tapping into the richness of our diverse workforce is key to driving future growth. Intel will continue to be transparent about our progress and our challenges, so we can partner with our customers and ecosystem to find better solutions together.”   —Sandra Rivera, Executive Vice President and Chief People Officer

DIVERSITY AND INCLUSION

To shape the future of technology, we must be representative of that future. A diverse and inclusive workforce is a business imperative and key to our long-term success. We committed $300 million to advance diversity and inclusion in our workforce and in the technology industry. We achieved our goal of full representation in our U.S. workforce two years ahead of schedule, meaning our workforce now reflects the percentage of women and underrepresented minorities available in the skilled labor market in the U.S. This achievement was the result of a comprehensive strategy that considered hiring, retention, and progression. Though we are proud of what we have accomplished to advance diversity in our workforce, we still have work to do, including beyond the walls of Intel. We took action by joining 11 other companies to fund an initiative to double the number of women of color graduating with computing degrees in the U.S. by 2025. We also continue to look for and implement partnerships and programs to increase retention and advancement of women and underrepresented populations within our workplace. The breakout of employees by gender provides our current global gender diversity.

COMPENSATION AND BENEFITS

We strive to provide pay, benefits, and services that help meet the varying needs of our employees. Our generous total rewards package includes market-competitive pay, broad-based stock grants and bonuses, an Employee Stock Purchase Plan, healthcare and retirement benefits, paid time off and family leave, parent reintegration, fertility assistance, flexible work schedules, sabbaticals, and on-site services. In 2019, we announced that we achieved gender pay equity globally by closing the gap in average pay between employees of different genders in the same or similar roles after accounting for legitimate business factors that can explain differences, such as performance, time at grade level, and tenure. We also continued to advance transparency in our pay and representation data by publicly releasing our 2017 and 2018 EEO-1 survey pay data mandated by the U.S. Equal Employment Opportunity Commission. The results reflected representation gaps and point to work that lies ahead. However, due to our diversity and inclusion efforts, there is promising growth of our junior female and underrepresented talent from which our future leadership will be drawn. Our challenge now is to create an environment that better helps our female and underrepresented employees develop and progress in their careers, while also ensuring we are expanding our hiring and retention of diverse talent at more senior, higher-paying positions.

 

GROWTH AND DEVELOPMENT   We invest significant resources to develop the talent needed to remain at the forefront of innovation and make Intel an employer of choice. We deliver training annually and provide rotational assignment opportunities. We launched a new performance management system to support our culture evolution and increase focus on continuous learning and development. Over the past five years, our undesired voluntary turnover rate has been at or below 5%.   COMMUNICATION AND ENGAGEMENT   Our success depends on employees understanding how their work contributes to the company’s overall strategy. We use a variety of channels to facilitate open and direct communication, including open forums with executives; employee experience surveys; and engagement through more than 30 different employee resource groups, including the Women at Intel Network, the Network of Intel African American Employees, the Intel Latino Network, and others.

HEALTH, SAFETY, AND WELLNESS

We are committed to the safety of our employees, customers, and communities, from operations to product development to supplier partnerships. Our ultimate goal is to achieve zero serious injuries through continued investment in and focus on our core safety programs and injury-reduction initiatives. We provide access to a variety of innovative, flexible, and convenient health and wellness programs, including on-site health centers.

 

		2020 PROXY STATEMENT  |  Our Capital				43

  SOCIAL AND RELATIONSHIP CAPITAL

We are committed to developing trusted relationships, giving back to our communities, and engaging in corporate responsibility and sustainability initiatives. Collaboration with stakeholders and investments in social impact initiatives, like the United Nations Sustainable Development Goals, led to our reputation as a leading corporate citizen and creates value in the form of consistent stakeholder support.

ECONOMIC, SOCIAL, AND HUMAN RIGHTS IMPACT

The health of our company and local economies depends on continued investments in innovation. We provide high-skill, high-paying jobs around the world. Many of these are manufacturing and R&D jobs located in our own domestic and international factories. We also impact economies through our R&D ecosystem spending, sourcing activities, consumer spending by our employees, and tax revenue. We make sizable capital investments and provide leadership in public-private partnerships to spur economic growth and innovation.

We are at the forefront of new technologies that are increasingly being used to empower individuals, companies, and governments around the world to solve major societal challenges. Simultaneously, we are empowering people through education and advancing social impact initiatives to create new career pathways into the technology industry, helping us build trust with key external stakeholders and support the interests of our employees. Our employees actively share their expertise and skills through volunteer initiatives, and contributed 1 million hours of service in the communities where we operate in 2019.

We are committed to maintaining and improving processes to avoid human rights violations related to our operations, supply chain, and products. While we do not always know nor can we control what products our customers create or the applications end-users may develop, we do not support or tolerate our products being used to violate human rights. Where we become aware of a concern that Intel products are being used by a business partner in connection with abuses of human rights, we will restrict or cease business with the third party until and unless we have high confidence that Intel’s products are not being used to violate human rights.

SUPPLY CHAIN RESPONSIBILITY

We have robust programs to educate and engage suppliers that support our global manufacturing operations to drive responsible and sustainable practices throughout the supply chain. Actively managing our supply chain creates business value for Intel and our customers by helping to reduce risk, improve product quality, achieve environmental and social goals, and raise the overall performance of our suppliers. Over the past five years, we completed more than 600 supplier audits using the Responsible Business Alliance Code of Conduct standard. We actively collaborate with other companies and lead industry initiatives on key issues such as advancing responsible minerals sourcing, improving transparency around climate and water impacts in the global electronics supply chain, and addressing risks of forced and bonded labor. Our commitment to building a diverse and inclusive workforce extends to the expectations we set for our suppliers—a diverse supply chain supports greater innovation and value for our business. We continue working toward our 2020 goal of reaching $1.0 billion in annual spending with diverse-owned suppliers. We also announced the “Intel Rule” to help improve diversity in the legal profession: Beginning in 2021, we will not retain or use outside law firms in the U.S. that are average or below average on diversity for their equity partners. We are applying a similar rule to firms used by our tax department, including non-legal firms.

 

44		Our Capital  |  2020 PROXY STATEMENT

  NATURAL CAPITAL

Driving to the lowest environmental footprint possible helps us achieve efficiency, lower costs, and respond to the needs of our

stakeholders. We invest in conservation projects and set company-wide environmental targets, seeking to drive reductions in greenhouse gas emissions, energy use, water use, and waste generation. We focus on building energy efficiency into our products to help our customers lower their own emissions and energy costs. We also collaborate with policymakers and other stakeholders to identify opportunities to apply technology to environmental challenges such as climate change and water conservation.

CLIMATE AND ENERGY

We focus on reducing our own direct climate “footprint” and over the past two decades have reduced our direct emissions and electricity-generated emissions. Since 2012, we have invested more than $200 million in energy conservation projects in our global operations, resulting in cumulative savings of more than 4.5 billion kWh and cost savings of more than $500 million. In addition to conserving energy, we invest in green power and on-site alternative energy projects that provide power directly to our buildings and design all new buildings to LEED* standards. In 2019, we opened a LEED Platinum building in Israel with sensors that monitor lighting, temperature, ventilation, parking, and other building services and systems that enable and foster smart innovation. It also employs stormwater runoff collection and injection wells to avoid groundwater runoff. We also focus on increasing our “handprint”—the ways in which Intel technologies can help others reduce their footprints, including Internet of Things solutions that enable intelligence in machines, buildings, supply chains, and factories, and make electrical grids smarter, safer, and more efficient.

We are leveraging a leading framework developed by TCFD to communicate our approach to climate governance, strategy, risk management, and metrics and targets. In terms of governance and strategy, we follow an integrated approach to addressing climate change, with multiple teams responsible for managing climate-related activities, initiatives, and policies, including manufacturing and operations, government and public affairs, supply chain, and product teams. Strategies and progress toward goals are reviewed with senior executives and the Board’s Corporate Governance and Nominating Committee. We describe our overall risk management processes within this proxy statement, and we describe our climate-related risks and opportunities in our annual Corporate Responsibility Report, the Intel Climate Change Policy, and “Risk Factors” in our 2019 Annual Report on From 10-K. Regarding metrics and goals, for two decades we have set aggressive GHG reduction goals, including our 2020 goal to reduce our direct GHG emissions by 10% on a per-unit basis from 2010 levels, which we are on track to achieve. Additional detail on our proactive efforts to address climate change is included in our Corporate Responsibility Report, as well as our CDP Climate Change Survey, both available on our website¹.

WATER STEWARDSHIP

Water is essential to the semiconductor manufacturing process. We use ultrapure water to remove impurities from our silicon wafers, and we use industrial and reclaimed water to run our manufacturing facility systems. Over the last two decades, our sustainable water management efforts and partnerships have enabled us to conserve billions of gallons of water, and over the last decade we have returned approximately 80% of our water back to our communities. We continue to work toward our goal to restore 100% of our global water use by 2025, with more than 20 projects funded in collaboration with environmental and community partners through the end of 2019. We expect to restore approximately 1.5 billion gallons of water each year to local watersheds once these projects are complete.

CIRCULAR ECONOMY AND WASTE MANAGEMENT

We have long been committed to waste management, recycling, and circular economy strategies that enable the recovery and productive re-use of waste streams. We achieved our 2020 goal of recycling 90% of our non-hazardous waste ahead of schedule. We continue to work toward our 2020 goal of sending zero hazardous waste to landfills. Our aim is to continue to invest in reducing the amount of waste we generate while increasing the amount recycled and identifying re-use solutions that reduce costs and environmental impact.

 

1	The contents of our website and our Corporate Responsibility Report, Climate Change Policy, and CDP Climate Change Survey are referenced for general information only and are not incorporated by reference in this proxy statement.

 

		2020 PROXY STATEMENT  |  Our Capital				45