SYNOPSYS INC
For the period ended Apr 10, 2024. Filed Feb 16, 2024.
View on SEC.govAbout this filing
What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
Apr 10, 2024 · Filed Feb 16, 2024
Contents
Proxy Statement Summary
This summary highlights certain information in the Proxy Statement, but it does not contain all of the information that you should consider before voting. Please review the entire Proxy Statement and Annual Report on Form 10-K for the year ended October 28, 2023 (2023 Annual Report on Form 10-K) carefully. References in this Proxy Statement to “we,” “us,” “our,” the “Company” or “Synopsys” refer to Synopsys, Inc. The items to be voted on at the Annual Meeting along with the recommendations of our Board of Directors’ (the Board or Board of Directors) are listed below.
| Proposals | Board VoteRecommendation | For FurtherDetails | ||
| 1. | ELECTION OF DIRECTORSThe Board of Directors and the Corporate Governance and Nominating Committee believe that each of the eleven director nominees possess the necessary qualifications, skills and experiences to provide quality advice and counsel to management and to effectively oversee key business and strategy matters, while carefully considering the long-term success of Synopsys and our stockholders. | “FOR” each director nominee | Page 11 | |
| 2. | APPROVAL OF OUR 2006 EMPLOYEE EQUITY INCENTIVE PLAN, AS AMENDEDWe are asking for approval to amend our 2006 Employee Equity Incentive Plan, as amended (the 2006 Employee Plan), in order to, among other things, (i) increase the number of shares of common stock, par value of $0.01 per share, available for issuance under the 2006 Employee Plan by 3,400,000 shares, (ii) eliminate the term of the 2006 Employee Plan and (iii) provide that incentive stock options may be granted without stockholder approval until the ten-year anniversary of the Board of Directors’ approval of the 2006 Employee Plan. We believe equity compensation is a critical tool to attract and retain talent, and the share increase will enable us to continue offering competitive equity compensation to our employees. | “FOR” | Page 38 | |
| 3. | ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATIONWe are asking for approval, on an advisory basis, of the compensation paid to our named executive officers. The Board of Directors believes the compensation of each of our named executive officers motivates and rewards them for work that improves our long-term business performance and increases stockholder value and thus recommends that you vote for the approval of their executive compensation. | “FOR” | Page 49 | |
| 4. | RATIFICATION OF SELECTION OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMThe Board of Directors and the Audit Committee believe it is in the best interests of Synopsys and our stockholders to retain KPMG LLP as Synopsys’ independent registered public accounting firm for fiscal 2024. As a matter of good corporate governance, we are asking stockholders to ratify the Audit Committee’s selection of KPMG LLP. | “FOR” | Page 96 | |
| 5. | STOCKHOLDER PROPOSALIf properly presented at the meeting, stockholders will be asked to vote on a proposal to amend Synopsys' governing documents as needed to require an independent board chair. The Board of Directors recommends that stockholders vote AGAINST this proposal because the Board believes it is not in the best interests of Synopsys and our stockholders. | “AGAINST” | Page 99 | |
A Note about Our Fiscal Year
Our fiscal year ends on the Saturday nearest to October 31. Fiscal 2023, 2022 and 2021 ended on October 28, 2023, October 29, 2022 and October 30, 2021, respectively. Fiscal 2024 will be a 53-week year ending on November 2, 2024.
| 2024 Proxy Statement | 5 |
|---|
Proxy Statement Summary
Director Nominees
| Committee Membership | ||||
| Name, Age and Primary Occupation | Director Since | AC | CC | GC |
|---|---|---|---|---|
| Dr. Aart J. de Geus, 69Executive Chair of the Board of Directors, Synopsys | 1986 | |||
| Roy Vallee, 71 Lead Independent Director, SynopsysChief Executive Officer and Chairman of the Board of Directors (Retired), Avnet, Inc. | 2003 | |||
| Sassine Ghazi, 53President and Chief Executive Officer, Synopsys | 2023 | |||
| Luis Borgen, 53 Chief Financial Officer (Retired), athenahealth, Inc. | 2022 | |||
| Marc N. Casper, 55 President, Chief Executive Officer and director of Thermo Fisher Scientific, Inc. | 2022 | |||
| Janice D. Chaffin, 69 Group President (Retired), Consumer Business Unit, Symantec Corporation (now Gen Digital Inc.) | 2014 | |||
| Bruce R. Chizen, 68 Senior Adviser and PGO Partner, Permira Advisers LLPVenture Partner, Voyager Capital | 2001 | |||
| Mercedes Johnson, 69 Chief Financial Officer (Retired), Avago Technologies, Inc. | 2017 | |||
| Robert G. Painter, 52 President, Chief Executive Officer and director of Trimble Inc. | 2023 | |||
| Jeannine P. Sargent, 59 Senior Advisor, Breakthrough Energy VenturesSenior Advisor, Generation Investment Management LLP | 2020 | |||
| John G. Schwarz, 73 Chief Executive Officer (Retired), Co-founder and Chairman of the Board of Directors, Visier, Inc. | 2007 | |||
| AC | Audit Committee | CC | Compensation and Organizational Development Committee | GC | Corporate Governance and Nominating Committee |
|---|---|---|---|---|---|
| Independent | Member | Chair | |||
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Proxy Statement Summary
Purpose
The primary goal of the amendment of our 2006 Employee Plan, is to provide us with a sufficient reserve of common stock to offer appropriate incentives to our employees. Like other technology companies, we actively compete for highly qualified employees, especially technical employees. Our equity program is a key component of our strategy to attract and retain key individuals, and the share requirements of our equity program have grown along with our company.
Important Features of the 2006 Employee Plan
We also note that our 2006 Employee Plan includes additional provisions that are designed to protect our stockholders’ interests and to reflect corporate governance best practices, including:•Stockholder approval required for additional shares.•No discounted stock options or stock appreciation rights.•Repricing and cash-out of underwater options not allowed.•No liberal share recycling.•Seven-year maximum term for equity awards.•Full-value awards deplete share reserve at a higher multiple.•Limitations on dividends and dividend equivalents.•No liberal corporate transaction provisions.•Limit on stock awards granted to any participant.•No automatic grant provisions to any participant.•No tax gross-up provisions.
| 2024 Proxy Statement | 7 |
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Proxy Statement Summary
Compensation Governance and Our Compensation Philosophy
We have designed our executive compensation program to attract, motivate and retain a team of highly qualified executives who will drive our success. To motivate and reward our named executive officers (NEOs) for work that improves our long-term business performance and increases stockholder value, we have set out the following objectives:
| Pay for Performance | Internal Pay Equity | Competitiveness |
|---|---|---|
| Align executive compensation to the success of our business objectives | Promote teamwork among executives by considering internal pay equity in setting compensation levels | Provide competitive compensation that attracts and retains top-performing executives |
| Outperformance | Stockholder Alignment | Balance |
| Motivate executives to achieve results that exceed our strategic targets | Align interests of executives with stockholder interests through the managed use of long-term incentives | Set performance goals that reward an appropriate balance of near- and long-term results |
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Proxy Statement Summary
Fiscal 2023 NEO Compensation Details
Our three core elements of NEO direct compensation are base salary, an annual cash incentive opportunity and annual equity awards. The graphic below reflects the approximate general distribution of these three core elements of NEO target total direct compensation (Target TDC) awarded during fiscal 2023 as determined by our Compensation and Organizational Development Committee (the Compensation Committee).
| Chief Executive Officer - Dr. de Geus(1) | Average of Other NEOs(1)(2) |
|---|
(2)Excludes Ms. Glaser’s new hire equity awards but includes her fiscal 2023 annual equity awards. Excludes compensation of Mr. Pham, who retired in January 2023 and did not receive a cash incentive opportunity or equity awards in fiscal 2023 due to his retirement.
Our Compensation Practices
| What We Do | What We Don’t Do |
|---|---|
| ü Substantial Portion of Compensation is Performance-Based and/or At-Riskü Balanced Mix of Performance Goalsü Double Trigger Change of Control Benefitsü Maximum Payout Caps ü Clawback Policy Covering Cash and Equityü Robust Stock Ownership Guidelinesü Independent Compensation Committeeü Independent Compensation Consultantü Annual Advisory Say-on-Pay Voteü Equity Burn Rate Management | û No Excessive Risksû No Excessive Change of Control Paymentsû No Golden Parachute Tax Gross Upsû No Excessive Perks û No Hedging or Pledging of Our Stock û No Repricing or Cash-out of Underwater Options and Stock Appreciation Rightsû No Dividends on Unvested Equity Awardsû No Executive Pension Plans or SERPs |
| 2024 Proxy Statement | 9 |
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Proxy Statement Summary
Fees and Services of Independent Registered Public Accounting Firm
The following table presents fees for professional audit services rendered by KPMG LLP for the audit of our annual financial statements and fees billed for all other services rendered by KPMG LLP during the following fiscal years.
| Fiscal Year Ended | ||
|---|---|---|
| Oct. 28, 2023 (in thousands) | Oct. 29, 2022 (in thousands) | |
| Audit Fees(1) | $5,852 | $5,185 |
| Audit-Related Fees(2) | 230 | 175 |
| Tax Fees(3) | 163 | 63 |
| All Other Fees(4) | 20 | 42 |
| TOTAL FEES | $6,265 | $5,465 |
(1)Audit fees consist of fees for the audit of Synopsys’ consolidated financial statements in our 2023 Annual Report on Form 10-K, review of Synopsys’ interim condensed consolidated financial statements in each of our Quarterly Reports on Form 10-Q, and services that are normally provided by KPMG LLP in connection with statutory and regulatory filings or engagements.
(2)Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of Synopsys’ consolidated financial statements and not reported under “Audit Fees.” This category includes fees related to the performance of attestation services not required by statute or regulations.
(3)Tax fees consist of fees for professional services for tax compliance, tax advice and tax planning. This category includes fees primarily related to assistance with international tax compliance services pertaining to certain foreign subsidiaries.
(4)All other fees consist of permitted services other than audit or tax services, and includes fees related to a subscription to KPMG LLP’s research tools and other general advisory services.
We received a stockholder proposal that asks our Board of Directors to amend our governing documents as needed to require an independent board chair. For the reasons set forth following the proponent’s proposal, our Board of Directors opposes adoption of the proposal and recommends that you vote AGAINST the proposal.
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