QUALCOMM INCDE

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Say-on-Pay Vote and Stockholder Outreach

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We are appreciative of the stockholder support for our Say-on-Pay result in 2023, with 95% of votes cast in favor of our Say-on-Pay proposal at last year’s annual meeting. This result, we believe, shows the strong alignment of our executive compensation program with stockholder interests. We also appreciate the feedback gained from our stockholder outreach. During fiscal 2023, our Chair of the Board and our Chair of the HR and Compensation Committee continued the open dialogue, reaching out to stockholders representing approximately 40% of the Company’s outstanding shares and directly engaging with our largest stockholders. We gained feedback on a variety of topics including:

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Our strategic planning amid geopolitical risks, diversification priorities and enterprise risk management;

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Our executive compensation program, including our approach to incorporating human capital advancement as a component of our ACIP; and

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The continued focus on ESG, including Board composition, climate plans and human capital advancements.

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Program Overview

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Primary Compensation Components

Figure 1 is an overview of the primary components of our fiscal 2023 executive compensation program. In structuring our ACIP and PSU awards, the HR and Compensation Committee continued to use a variety of non-GAAP financial performance measures that support our business strategy. See Appendix A for definitions of the various performance measures.

Figure 1: Fiscal 2023 Executive Compensation Program Overview

Additional objectives of our executive compensation program include:

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Competitive for the Business. The HR and Compensation Committee aims to set executive compensation at competitive levels to attract, motivate, engage and retain executive officers. We consider practices of peer companies as reference points for comparative purposes but do not set specific percentile objectives.

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Internally Fair and Equitable. The HR and Compensation Committee considers business and individual factors to evaluate internal fairness of compensation and monitors the internal compensation relationships among our executive officers. Predetermined formulas are not part of this evaluation.

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High Standards for Governance and Compensation Risk Management. The HR and Compensation Committee has a comprehensive charter that provides for oversight of our executive compensation program and includes annually reviewing all components of executive compensation, conducting a compensation risk assessment and reviewing advancement of human capital initiatives. The risk assessment also covers talent and compensation program risks for our non-executive employees. See the discussion of our risk-assessment process under the section “Compensation Risk Management” on page 66 for more details on our compensation-related corporate governance practices.

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We also have competitive health, welfare and retirement benefits that are generally structured in the same manner for all U.S. employees. A summary of these and several other benefits begins on page 61.

2023 Executive Compensation Program

Base Salaries

In September 2022, the HR and Compensation Committee approved the fiscal 2023 annual base salaries for our executive officers. The HR and Compensation Committee increased Mr. Amon’s base salary in fiscal 2023 to reflect his strong performance and leadership as well as to remain market competitive. This was Mr. Amon’s first salary increase since becoming CEO and was determined after considering the Company’s record financial results in fiscal 2022 under his leadership. When taking into account his salary increase, Mr. Amon’s target total cash compensation (salary plus target ACIP opportunity) approximates the median of our peer group. The HR and Compensation Committee did not increase the fiscal 2023 annual base salaries for any of our other NEOs as their base salary levels remained competitive to market.

The ending fiscal 2023 and fiscal 2022 annual base salaries for our NEOs are illustrated below in Figure 2.

Figure 2: NEO Base Salaries

Annual Cash Incentive Plan (ACIP)

Fiscal 2023 ACIP Structure. The overriding objective of the ACIP is to reward our executive officers for performance against annual financial objectives, as well as to reward human capital advancements. For fiscal 2023, the HR and Compensation Committee determined that annual cash incentive payouts under the ACIP would be weighted 100% on annual operating performance measures (Adjusted Revenues and Adjusted Operating Income, as defined in Appendix A) with a non-financial performance measure (human capital advancements) modifier. The HR and Compensation Committee selected targets based on our Board-approved annual budget, which takes into consideration prior year results, forward guidance and business outlook. In considering those factors, the HR and Compensation Committee believes the targets set demonstrate rigorous goal setting. The two financial measures were each weighted 50%, and the human capital advancements modifier can adjust the payout by a multiple of 0.9 to 1.1. However, payouts of ACIP awards are capped at a maximum of 200% of target levels.

The overall ACIP funding range is zero to 200% and encompasses both upside reward and downside performance risk typical of peer practices. Each executive officer’s ACIP target is based on a percent-of-salary and is determined by the HR and Compensation Committee based on practices of our peer companies and individual considerations. No changes were made to the target bonus percentages of our NEOs for fiscal 2023. The ACIP payout schedule for fiscal 2023 is set forth in Figure 3.

Figure 3: Fiscal 2023 ACIP Payout Schedule (1)

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Regardless of the level of achievement of the Financial and Non-Financial Objectives, in no event can the ACIP funding exceed 200% of the ACIP target award amount.

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Funding of the ACIP Financial Objectives between award levels interpolates linearly with the achievement of the financial objective.

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The HR and Compensation Committee has the authority to apply discretion to ACIP earned amounts based on feedback from other Board members, feedback from our CEO and other considerations. A summary of these factors is discussed in the “Process and Rationale for Executive Compensation Decisions” section beginning on page 63. Any such discretionary modifications would be incremental to the predefined adjustments to the Company’s GAAP financial results as defined in the ACIP. See Appendix A for a listing of predefined adjustments. No discretionary modifications were made by the HR and Compensation Committee in determining fiscal 2023 ACIP payouts.

Fiscal 2023 ACIP Earnings

Figure 4 shows the objectives and actual performance for Adjusted Revenues and Adjusted Operating Income and illustrates the following:

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Financial performance was weighted 50% Adjusted Revenues and 50% Adjusted Operating Income.

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Non-financial performance was evaluated based on human capital advancements.

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Adjusted Revenues performance was 84.9% of target, Adjusted Operating Income performance was 82.9% of target and the non-financial modifier for human capital advancements was determined to have a multiple of 1.0x.

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As a result, our financial weighted performance was 84.0% ( (84.9% x 50%) + (82.9% x 50%) ) and our non-financial modifier was a multiple of 1.0, which translated into award funding of 20% based on the predefined formula in the 2023 ACIP.

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The final payout of 20% target is significantly below the fiscal 2022 ACIP payout (119% of target), which reflects lower financial achievement against budgeted financials in fiscal 2023 due to cyclical headwinds in the semiconductor industry and weakness in the macroeconomic environment (which negatively impacted consumer demand for smartphones and other devices that incorporate our products and technologies). This outcome underscores the rigor of our goal setting process and commitment to paying for performance.

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Figure 4: Fiscal 2023 ACIP Objectives and Performance

Human Capital Advancements Performance

The 2023 ACIP includes a non-financial performance measure as a modifier. This approach complements our strategy to deliver financial results in a sustainable manner and to position the Company for long-term success. For fiscal 2023, the HR and Compensation Committee’s framework to evaluate performance focused on human capital advancements. The framework considers holistic performance across several areas including execution of senior leader development activities, turnover statistics at a Company level and in key areas, as well as trends and progress in the areas of culture, morale and inclusion.

The HR and Compensation Committee reviewed progress in these areas with management, both during the fiscal year as well as in the first quarter of fiscal 2024, in connection with finalizing rewards for fiscal 2023. Given the results across the key areas, the HR and Compensation Committee determined that the Company met expectations and approved the non-financial performance modifier equal to 1.0x.

Figure 5: Fiscal 2023 ACIP Target and Earned Amounts

Equity Awards

Equity Awards and Shift in Grant Timing

Historically, we have granted annual equity awards to our executive officers in September, the last month of our fiscal year. In fiscal 2021, the Board of Directors and management changed the timing of the Board’s review of our strategic plan financials from the fourth quarter of our fiscal year to the first quarter of our fiscal year to allow for the most current information to be used in the preparation of our strategic plan financials. This timing also aligns with the Board’s approval of our annual financial budget in the first quarter of our fiscal year.

In fiscal 2022, the HR and Compensation Committee decided to correspondingly shift the timing of the grant of equity awards to our executive officers from the fourth quarter of our fiscal year to the first quarter of our subsequent fiscal year so that it had the benefit of our final, Board-approved budget and our strategic plan financials, prior to setting performance goals for the executive officers’ PSUs. As a result of this change, (1) no annual equity awards were granted to our NEOs during fiscal 2022 (other than to Ms. Chaplin, who joined the Company in fiscal 2022), and (2) annual equity awards for fiscal 2023 were granted in December 2022. Similarly, annual equity awards for fiscal 2024 were granted in December 2023, and we anticipate that our executive officers will continue to receive their annual equity awards in the first quarter of each subsequent fiscal year.

Consistent with recent fiscal years, the HR and Compensation Committee chose RTSR and Adjusted EPS for the fiscal 2023 PSUs because it believed these were the best indicators of the achievement of our long-term financial plan and provided balance by measuring both relative and absolute performance on important metrics. In addition, the HR and Compensation committee granted time-based equity awards to our NEOs in the form of RSUs. These awards, described in greater detail below, include dividend equivalent rights that accrue in the form of additional shares with vesting and distribution at the same time as the earned and vested underlying awards.

Fiscal 2023 RTSR PSUs. The RTSR PSUs allow recipients to earn a variable number of shares of our common stock based on our TSR performance over a three-year period (fiscal 2023-2025) compared to companies comprising the NASDAQ-100, using the payout schedule set forth in Figure 6. The RTSR PSUs require achievement of performance at the 55 th percentile in order to earn the target number of shares, while the maximum number of shares that can be earned are 2x the target for performance at or above the 90 th percentile. No shares would be earned if performance is below the 25 th percentile. The RTSR PSUs also provide that the total number of shares earned may not exceed the target number of shares if our absolute TSR for the entire three-year performance period is negative, regardless of the level of RTSR achieved.

Figure 6: Fiscal 2023 RTSR PSU Payout Schedule

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The multiple of target RTSR PSUs earned between award levels interpolates linearly with our RTSR percentile rank among the NASDAQ-100.

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Fiscal 2023 EPS PSUs. The EPS PSUs allow recipients to earn a variable number of shares of our common stock based on the achievement of a three-year (fiscal 2023-2025) average Adjusted EPS goal established by the HR and Compensation Committee. With the support of Pay Governance, the HR and Compensation Committee assessed the challenge of achieving the Adjusted EPS goal in a variety of ways, including comparing the goal with post fiscal 2022 market consensus for fiscal 2023, fiscal 2024 and fiscal 2025, historical performance levels and external guidance of the Company and our compensation peers. The HR and Compensation Committee intended that the goal chosen for measuring performance under the EPS PSUs would generally present a similar or higher degree of difficulty for achievement in comparison to the Adjusted EPS goals chosen in recent years and reflect the rigor of our goal setting. The fiscal 2023 EPS PSU goal will be disclosed along with actual results following completion of the performance period, similar to the disclosure of both goal and actual results for the fiscal 2020 EPS PSUs on page 59. See Appendix A for the definitions of performance measures to be used in determining the number of EPS PSUs for the performance period. The payout schedule is set forth in Figure 7.

Figure 7: Fiscal 2023 EPS PSU Payout Schedule

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The multiple of target EPS PSUs earned between award levels interpolates linearly with our average Adjusted EPS for the three-year performance period.

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Fiscal 2023 RSUs. RSUs represent the right to receive one share of our common stock for each unit awarded, based on continued employment during the vesting period, which is in equal annual installments over three years. We use RSUs as part of the annual equity awards for our executive officers in order remain competitive with the practices of our peer companies, to support alignment with our stockholders and to further our retention objectives.

Summary of Grant Date Fair Values of Fiscal 2023 Equity Awards. Figure 8 shows the grant date fair values of the equity awards granted to our NEOs in fiscal 2023. The HR and Compensation Committee set fiscal 2023 equity awards at these levels in order to provide competitive compensation opportunities, support our pay for performance philosophy and to align the interests of our NEOs with those of our stockholders. The incremental increases in target grant values between fiscal 2021 and fiscal 2023 reflect multiple factors listed below:

Market adjustments based on our executive compensation assessment intended to position individual executive long-term incentive opportunities closer to or at the market median.

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Qualcomm’s strong financial performance results during fiscal 2022.

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The one-time delay in grant timing (from September to December) due to the shift in grant timing described above, which represented approximately a 5% increase from target values. The approximate 5% increase was determined by using the length of delay (approximately 2 months) compared to the length of the performance period (36 months).

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Figure 8: Grant Date Fair Values of Equity Awarded to NEOs in Fiscal 2023

Fiscal 2020 PSUs with Performance Periods Ending in Fiscal 2023. In September 2020, the HR and Compensation Committee granted RTSR PSUs and EPS PSUs to our then executive officers, including Messrs. Amon, Palkhiwala and Rogers and Dr. Thompson, which vested in October 2023 and were earned based on our performance for fiscal 2021-2023. The value of these awards at the time of grant was allocated 50% to RTSR PSUs and 50% to EPS PSUs. After application of a Monte Carlo valuation to determine the number of RTSR shares, the mix of target shares was 48% RTSR PSUs and 52% EPS PSUs.

RTSR PSUs were earned at 25% of target, reflecting our 4% TSR and 25th percentile TSR performance versus the NASDAQ-100 for the performance period. EPS PSUs were earned at 200% of target, reflecting Adjusted EPS performance of $9.76, above the $7.81 maximum for the performance period. In the aggregate, our NEOs earned 121% of target of the fiscal 2020 RTSR PSUs and EPS PSUs.

RTSR PSUs and EPS PSUs together represent a balance of relative and absolute measures in our long-term incentive awards, and they measure performance differently. The ending TSR used for determining the final payout for the RTSR PSUs was based on the last 20 trading days of fiscal 2023, while the payout for the EPS PSUs was based on an average of three years of Adjusted EPS results. EPS PSU performance was higher, largely due to our exceptional financial performance in fiscal 2022. While our RTSR PSUs were tracking above target for much of the three-year period, our stock price declined during fiscal 2023 resulting in a payout below target. Although the outcomes did vary between awards, we believe the aggregate payouts are commensurate with our performance over the three-year period.

Figure 9: Fiscal 2020 PSUs Awarded to NEOs with Performance Periods Ending in Fiscal 2023 (1)

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Ms. Chaplin is not included in the table above as she was not employed at Qualcomm in September 2020 when the applicable PSUs were granted.

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Excludes accrued dividend equivalent shares received upon release of the PSUs.

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