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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant Filed by a Party other than the Registrant      

CHECK THE APPROPRIATE BOX:
  Preliminary Proxy Statement
Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
  Definitive Additional Materials
Soliciting Material Under Rule 14a-12

Western Digital Corporation

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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Our Long-Term Value Creation Strategy

Our strategy supports our mission to be recognized as the world’s leading data infrastructure company

We continue to pursue a long-term value-creation strategy underpinned by growth in Big Data applications through our hard disk drive (“HDD”) offerings and Fast Data applications through our flash offerings. Western Digital’s platform is strategically positioned to play a key role in supporting long-term growth trends.

Our strategy is dependent on continuing to build a culture of growth and innovation to accomplish five major strategic pillars:

DRIVE
DIFFERENTIATED
LEADERSHIP IN FLASH
  

DRIVE LEADERSHIP
IN HDD

  

LEAD IN STORAGE
INNOVATION

  

BUILD ON OUR
CUSTOMER VALUE

  

ACCELERATE
OPERATIONAL
EXCELLENCE

Drive portfolio strategy to create a unique role for Western Digital as a leader in the flash market

Increase long-term engagement and through-cycle agreements with key hyperscalers

Expand our partnership with hyperscale customers through innovative offerings

Continue to deliver on our areal density improvement roadmap

Maintain leadership in core storage technologies

Lead in energy-assisted technologies to drive long-term growth in capacity HDD

Lead in flash 3D node transitions, design parameters and capital efficiency

Drive future storage interface standards, architectures and software ecosystems

Expand relationships at our largest customers to enrich our value

Establish ourselves as “The Supplier” for storage in retail, e-tail and distribution channels, while developing the WD online store as a preferred channel

Meet quarter-to-quarter cost down target to improve gross margin while improving inventory

Establish a robust end-to-end supply chain, and enhance responsiveness and service levels

Continue to increase automation in our factories


Culture of Growth and Innovation


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LETTER FROM OUR CHAIRMAN AND LEAD INDEPENDENT DIRECTOR

Dear Fellow Stockholders:

On behalf of our entire Board, we thank you for your investment and trust in us to oversee the long-term success and sustainability of Western Digital. Despite the continued challenges presented by the past year, our Board provided critical oversight in helping the company adapt to near-term uncertainties and nurtured a culture that values protecting and growing your investment over the long term. As directors, we played an integral role in overseeing the strategic direction of the company, monitoring execution by Western Digital’s management and ensuring that the company’s culture continues to support and align with its long-term strategy.

As we approach the 2021 Annual Meeting, we would like to share some of the ways that we are working to provide strong independent oversight and represent your interests.

EXECUTING ON OUR GROWTH AND INNOVATION STRATEGY

An essential role of the Board is to provide effective oversight related to Western Digital’s corporate strategy and execution. We understand that we have a fundamental and strategic oversight role to play in building a resilient enterprise, while also laying the foundation for the company’s future success as an essential building block of the digital economy. We work closely with senior leadership in developing Western Digital’s strategy and positioning us to continue as a leading developer, manufacturer and provider of data storage devices and solutions. As we reflect on fiscal 2021, our results demonstrate continued momentum in our business as we executed on priorities we believe will drive growth.

Western Digital’s strengths in technology and cost leadership, expansive product portfolio and broad routes to market are providing a foundation upon which we are solidifying our position as the leading data infrastructure company. These strengths, combined with our increased operational and strategic focus enabled by our new business unit structure, are driving results. As we continue to face a dynamic environment, we are seeing the benefits of the synergistic value in the breadth of Western Digital’s portfolio, and our unique ability to deliver both hard drive and flash solutions to our diverse end-markets and customer base.

REFRESHING OUR BOARD WITH NEW PERSPECTIVES

Strong independent leadership and ongoing attention to Board composition are critical in our commitment to a thoughtful governance structure that is aligned with our strategic needs. In seeking to ensure an appropriate mix of tenure and expertise that provides a balance of fresh perspectives and institutional knowledge, we routinely evaluate the composition of the Board and strategically refresh our membership to ensure we have a balanced mix of deep subject-matter expertise across a variety of disciplines to guide the company. The Governance Committee invests a substantial amount of time assessing our Board’s composition as part of the annual self-evaluation process, and revisits the topic during the year if the Board sees changes in the company’s governance needs.

Since 2020, we have welcomed two independent directors to our Board, each of whom brings extensive experience and fresh perspectives that enrich our Board’s dialogue and enhance our ability to continue effectively overseeing the business. Following a robust search process, we welcomed Dr. Thomas (Tom) Caulfield and Miyuki Suzuki as our newest independent directors in July 2021. Tom and Miyuki both bring strong track records of professional success and expertise in a wide range of matters relevant to the company, including semiconductor and global operating experience that complements Western Digital’s growth and innovation strategy. Tom and Miyuki are both serving on our Governance Committee.

CONTINUING OUR BOARD-DRIVEN STOCKHOLDER ENGAGEMENT

Year-round engagement with our stockholders remains a key focus for our company and an important part of our Board’s governance commitment. During the past year, we continued our robust Board-driven stockholder engagement program, which allowed us to meet with a broad base of stockholders throughout the year. This dialogue helped us to better understand stockholders’ views on a variety of relevant issues, including company strategy and performance, board diversity and refreshment, executive compensation and corporate responsibility matters.

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Over the past year, we reached out to stockholders representing nearly 60% of shares outstanding. Our engagement team conducted calls with 14 stockholders, composed of investors with a variety of investment styles and geographic locations. These engagements continue to provide us with valuable feedback that allows our Board to better understand our stockholders’ priorities and perspectives and to incorporate them into our deliberations and decision making.

FOCUSING ON CORPORATE RESPONSIBILITY AND SUSTAINABILITY

Sound corporate responsibility in all aspects of our business is a focus of our Board and management team, and we have expanded our sustainability vision for what the company can accomplish in the coming years. We believe that being an industry leader is not just about having talented employees or innovative products, but also about doing business the right way, every day. To ensure our commitment to sound corporate responsibility is deeply rooted in all aspects of our business, we maintain Board-level oversight in the areas of corporate responsibility, sustainability and human capital management.

Earlier this year, we published our 2021 Sustainability Update, which aligns with standards set by both the Sustainability Accounting Standards Board (SASB) and Global Reporting Initiative (GRI). Highlights from our 2021 Sustainability Update can be found on page 23 of the Proxy Statement. We also invite you to review our 2020 Sustainability Report and 2021 Sustainability Update on our Corporate Sustainability page at www.westerndigital.com.

Additionally, in September 2021, we announced that our greenhouse gas emissions reduction goals, which are consistent with the Paris Agreement, were approved by the Science Based Targets initiative (SBTi). The company’s targets are aligned with the ambitious goal to limit global warming to 1.5° C above pre-industrial levels. While our targets were only recently approved by SBTi, we have already accelerated our investments in meaningful emissions reductions.

WE ASK FOR YOUR SUPPORT

We value the trust you place in us through your investment in Western Digital. We appreciate the opportunity to serve Western Digital on your behalf through fiscal 2022 and beyond, and will continue our focus on the sustainable and long-term growth of the company. We look forward to hearing your views at this year’s Annual Meeting and in the year to come.

Your vote is very important to us. We strongly encourage you to read both our proxy statement and annual report in their entirety prior to the Annual Meeting on November 16, 2021, and request that you support our voting recommendations.

Sincerely,

    

MATTHEW E. MASSENGILL
Independent Chairman of the Board

KATHLEEN A. COTE
Lead Independent Director


   
   

Message from the Chairman and the Board

We would also like to take this opportunity to thank Kathleen A. Cote, who will be retiring from the Board at our Annual Meeting, for her two decades of service. We benefited greatly from her insights and contributions as Lead Independent Director and a trusted advisor. We share her optimism about Western Digital’s future and are honored to continue working with management to deliver on that.


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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Western Digital Corporation
5601 Great Oaks Parkway, San Jose, California 95119

    

DATE
November 16, 2021

TIME
Online check-in begins: 7:45 a.m. Pacific Time Meeting begins: 8:00 a.m. Pacific Time

LOCATION
As in 2020, our annual meeting will be a completely virtual meeting of stockholders that will provide stockholders comparable rights and opportunities to participate as they would at an in-person meeting. To participate, vote or submit questions during the annual meeting via live webcast, please visit: www.virtualshareholdermeeting.com/WDC2021. Please see “Virtual Annual Meeting” on the following page for additional information.

WHO CAN VOTE
Stockholders of record at the close of business on September 20, 2021 will be entitled to notice of and to vote at our annual meeting and any postponements or adjournments of the meeting.

VOTING SHARES IN ADVANCE OF THE MEETING
Your vote is very important. Please submit your proxy as soon as possible via the Internet, telephone or mail. Submitting your proxy by one of these methods will ensure your vote will be counted regardless of whether you attend the annual meeting.

    

VIA THE INTERNET
Visit the website listed on your proxy card, notice or voting instruction form

BY PHONE
Call the phone number listed on your proxy card or voting instruction form

BY MAIL
Complete, sign, date and return your proxy card or voting instruction form in the envelope provided

Matters to be voted on

Proposal       Board
Recommendation

1

    

Election of the nine director nominees named in the attached Proxy Statement to serve until our next annual meeting of stockholders and until their respective successors are duly elected and qualified

    
VOTE FOR

2

Approval on an advisory basis of the named executive officer compensation disclosed in the attached Proxy Statement


VOTE FOR

3

Approval of our 2021 Long-Term Incentive Plan


VOTE FOR

4

Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for fiscal 2022


VOTE FOR

At the meeting, we will also consider any other business that may properly come before our annual meeting or any postponement or adjournment of the meeting.

By Order of our Board of Directors,

Michael C. Ray
Executive Vice President, Chief Legal Officer and Secretary
October 4, 2021


Important notice regarding the availability of proxy materials for our annual meeting of stockholders to be held on November 16, 2021:
On or about October 4, 2021, proxy materials for the annual meeting, including the attached Proxy Statement and our Annual Report for the fiscal year ended July 2, 2021, are being furnished to stockholders entitled to vote at the annual meeting. The Proxy Statement and 2021 Annual Report are available on our Investor Relations website at investor.wdc.com. You can also view these materials at www.proxyvote.com by using the control number provided on your proxy card or Notice of Internet Availability of Proxy Materials. A list of stockholders as of the record date for the annual meeting may be accessed during the virtual annual meeting at www.virtualshareholdermeeting.com/WDC2021 by using the 16-digit control number on your Notice of Internet Availability of Proxy Materials, or on your proxy card or voting instruction form that accompanied your proxy materials.

 
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Virtual Annual Meeting

Our 2021 annual meeting of stockholders (the “Annual Meeting”) will be a completely virtual meeting of stockholders conducted via live audio webcast to enable our stockholders to participate from any location around the world. You will be able to attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/WDC2021.

Attendance and Participation at the Virtual Annual Meeting

We believe that the virtual annual meeting format will give stockholders the opportunity to exercise the same rights as if they had attended an in-person meeting and believe that these measures will enhance stockholder access and encourage participation and communication with our Board of Directors and management by enabling all stockholders to participate fully, equally and without cost, using an Internet-connected device from any location around the world. In addition, the virtual annual meeting format increases our ability to engage with all stockholders, regardless of size, resources or physical location.

Attendance at the Annual Meeting is open to the public online at www.virtualshareholdermeeting.com/WDC2021, but only stockholders of record or beneficial owners as of September 20, 2021, the record date, or those holding a valid legal proxy for the Annual Meeting are entitled to vote or ask questions via the online virtual annual meeting platform.

To participate in the Annual Meeting by voting or asking questions, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card or on the instructions that accompanied your proxy materials.

We will have technicians ready to assist you with any technical difficulties you may have accessing the Annual Meeting. If you encounter any difficulties accessing or logging in to the Annual Meeting, please call the technical support number displayed on the login page of the online virtual annual meeting platform.

Questions at the Virtual Annual Meeting

During the Annual Meeting, we will answer as many stockholder-submitted questions as time permits, and any questions that we are unable to address during the Annual Meeting will be published and answered on our website following the meeting with the exception of any questions that are irrelevant to the purpose of the Annual Meeting or our business or that contain inappropriate or derogatory references which are not in good taste. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.


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Disclaimers

Cautionary Note Regarding Forward-Looking Statements

This Proxy Statement contains forward-looking statements, including but not limited to, statements concerning our product and technology portfolio, views with respect to the growth of digital data, our business strategy and strategic priorities, our ability to execute our strategy, our expectations regarding the impact of COVID-19, our director succession plans and plans for our sustainability program, including our science-based targets, policies and reporting in the area of human rights and diversity and inclusion efforts. These forward-looking statements are based on our current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including: future responses to and effects of the COVID-19 pandemic; volatility in global economic conditions; impact of business and market conditions; impact of competitive products and pricing; our development and introduction of products based on new technologies and expansion into new data storage markets; risks associated with cost saving initiatives, restructurings, acquisitions, divestitures, mergers, joint ventures and our strategic relationships; difficulties or delays in manufacturing or other supply chain disruptions; hiring and retention of key employees; our substantial level of debt and other financial obligations; changes to our relationships with key customers; disruptions in operations from cyberattacks or other system security risks; actions by competitors; risks associated with compliance with changing legal and regulatory requirements and the outcome of legal proceedings; and other risks and uncertainties listed in our 2021 Annual Report on Form 10-K and our other reports filed with the Securities and Exchange Commission (the “SEC”), to which your attention is directed. You should not place undue reliance on these forward-looking statements, which speak only as of the date hereof, and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances.

Website References

You may also access additional information about Western Digital at www.westerndigital.com. References to our website throughout this Proxy Statement are provided for convenience only and the content on our website does not constitute a part of this Proxy Statement.

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TABLE OF CONTENTS

Letter from Our Chairman and Lead Independent Director       1
Notice of Annual Meeting of Stockholders 3
Virtual Annual Meeting 4
Disclaimers 5
Proxy Summary 7
Corporate Governance Matters 10
Proposal 1: Election of Directors 10
Nominees for Election 11
Director Skills and Expertise 16
Director Nominations and Board Refreshment 18
Board’s Role and Responsibilities 21
Stockholder Engagement 21
Corporate Responsibility and Sustainability 22
Risk Oversight and Compensation Risk Assessment 25
Board Structure 26
Lead Independent Director 26
Board Processes and Policies 29
Board Evaluation 30
Director Compensation 31
Executive Officers 34
Executive Compensation 36
Proposal 2: Advisory Vote on Executive Compensation 36
Report of the Compensation and Talent Committee 37
Compensation Discussion and Analysis 38
Fiscal 2021 Overview 39
Fiscal 2021 Philosophy, Objectives and Process 40
Fiscal 2021 Decisions and Outcomes 44
Fiscal 2022 Decisions 52
Other Program Features and Policies 53
Executive Compensation Tables and Narratives 55
Fiscal 2019—2021 Summary Compensation Table 55
Fiscal 2021 Grants of Plan-Based Awards Table 56
Description of Compensation Arrangements for Named Executive Officers 57
Outstanding Equity Awards at Fiscal 2021 Year-End Table 58
Fiscal 2021 Option Exercises and Stock Vested Table 59
Fiscal 2021 Non-Qualified Deferred Compensation Table 60
Potential Payments upon Termination or Change in Control 60
CEO Pay Ratio 63
Equity Compensation Plan Information 64
Stock Ownership Information 65
Equity Plan Proposal 67
Proposal 3: Approval of our 2021 Long-Term Incentive Plan 67
Audit Committee Matters 76
Proposal 4: Ratification of Appointment of Our Independent Registered Public Accounting Firm 76
Report of the Audit Committee 77
Additional Information 79
General Information About the Annual Meeting 79
Availability of Annual Report 83
Communication with the Company 83
Appendix A—Non-GAAP Financial Measures A-1
Appendix B—2021 Long-Term Incentive Plan   B-1

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PROXY SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider. We encourage you to read the entire Proxy Statement for more information about these topics prior to voting.

Our Director Nominees

Name and Principal Occupation Independent       Director
Since
      Board
Committees
      Other Current
Public Directorships
KIMBERLY E. ALEXY, 51
Principal, Alexy Capital Management
2018  
Alteryx, Inc.
FireEye, Inc.
Five9, Inc.

DR. THOMAS H. CAULFIELD, 62
CEO, GlobalFoundries Inc.

2021 None

MARTIN I. COLE, 65
Former Chief Executive, Technology of Accenture plc.

2014
The Western Union Company
TUNÇ DOLUCA, 63
Former President and CEO, Maxim Integrated
2018
Analog Devices, Inc.
DAVID V. GOECKELER, 59
CEO, Western Digital Corporation
2020 None
MATTHEW E. MASSENGILL, 60
INDEPENDENT CHAIRMAN OF THE BOARD
Former President and CEO, Western Digital Corporation
2000 None
PAULA A. PRICE, 59
Former Executive Vice President and CFO, Macy’s, Inc.
2020

Accenture plc
Bristol-Myers Squibb Company
DaVita Inc.
STEPHANIE A. STREETER, 64
Former CEO, Libbey Inc.
2018

Goodyear Tire & Rubber Company
Kohl’s Corporation
MIYUKI SUZUKI, 61
Former President, Asia Pacific, Japan and China, Cisco Systems, Inc.
2021 None

Audit       Compensation and Talent       Governance       Executive       Committee Chair

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Board Nominee Highlights

                         
BOARD SNAPSHOT

INDEPENDENCE GENDER DIVERSITY AGE TENURE(1)
89%
Independent
44%
Women
22%
Diverse Members
60 Years
Average Age
5 Years
Average Tenure(1)
8 Independent
1 Non-Independent
4 Women
5 Men
2 members are racially/
ethnically diverse or
LGBTQ+ community
members
4 ≤60 years
5 61–69 years
6 <5 years
2 5–10 years
1 >10 years

(1) Calculation includes Ms. Price’s tenure as a director from July 2014 to February 2019.

                         
WOMEN IN BOARD LEADERSHIP ROLES

Lead Independent Director Audit Committee Chair Governance Committee Chair

Corporate Governance Highlights

Our Board of Directors is committed to maintaining the highest standards of corporate governance. We believe our strong corporate governance practices help promote the long-term interests of our stockholders and build public trust in us.

Corporate Governance Developments

Below is a description of some recent key changes to our corporate governance practices:

Appointment of Two New Independent Directors
The appointments of Dr. Caulfield and Ms. Suzuki in July 2021 add diverse perspectives and backgrounds to our Board and demonstrate our ongoing commitment to Board refreshment
Dr. Caulfield brings to our Board over 30 years of semiconductor experience, including roles in engineering, management and global operations
Ms. Suzuki brings to our Board over 35 years of leadership experience in technology and telecommunications, with deep expertise in the Asia Pacific region
Dr. Caulfield and Ms. Suzuki both serve on the Governance Committee

Amended Corporate Governance Guidelines to Ensure a Diverse Director Candidate Pool

Our Board of Directors recently adopted a provision requiring the Governance Committee to include, and instruct any search firm it engages to include, women and members of underrepresented communities in the pool from which the committee selects director nominees
This provision reflects our Board’s continued commitment to diversity in the boardroom

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Proxy Summary

                         
CORPORATE GOVERNANCE BEST PRACTICES

Robust year-round Board-led stockholder engagement program that informs Board decisions
Independent Board leadership, including a Lead Independent Director with clearly defined roles and responsibilities
Commitment to Board diversity, with our last six independent director appointments including four women, two of whom are from underrepresented communities
All directors elected annually by a simple majority of votes cast
Eight of nine director nominees are independent
Director retirement policy upon reaching age 72
Active Board oversight of strategic planning and risk management
Board-level oversight of corporate responsibility, sustainability and human capital management
Succession planning for directors, our CEO and other key officers
Annual Board and committee self-evaluations
Individual assessments of directors
Code of conduct for directors, officers and employees
All non-employee directors are subject to stock ownership requirements
All executive officers achieved stock ownership requirements pursuant to our guidelines

Year-Round Stockholder Engagement

As a continuation of our robust Board-driven stockholder engagement program, over the past year, we reached out to stockholders representing nearly 60% of shares outstanding and conducted calls with 14 stockholders, composed of investors with a variety of investment styles and geographic locations.

In our recent summer 2021 stockholder engagement, we discussed a variety of topics, including the composition of our executive leadership team, board composition, experience and diversity, our executive compensation philosophy and program, corporate responsibility and sustainability and equity, inclusion and diversity. Stockholders generally provided positive feedback on the diversity of our Board and our executive compensation program. Investors were also very supportive of our progress in sustainability reporting, particularly with respect to our progress toward alignment with the Task Force on Climate-Related Financial Disclosures and our commitment to set science-based targets. These views were shared with our Board and its committees, where applicable, for their consideration.

Corporate Responsibility and Sustainability

We believe responsible and sustainable business practices support our long-term success as a company. Those practices help keep our communities and our environment vibrant and healthy. But they also lead us to more efficient and resilient business operations. They help us meet our customers’ efficiency targets. They reduce risks of misconduct and legal liability. They enhance the reliability of our supply chain. And they improve the health, well-being, engagement and productivity of our employees. We believe that being an industry leader is not just about having talented employees or innovative products. It is also about doing business the right way, every day. That is why our commitment to sound corporate responsibility is deeply rooted in all aspects of our business.

Our 2020 Sustainability Report and 2021 Sustainability Update are located on our Corporate Sustainability page at www.westerndigital.com. The topics covered were selected based on a robust materiality assessment, which incorporated input from investors, customers and other stakeholders, as well as strategic priorities, and the report aligns with both Sustainability Accounting Standards Board (“SASB”) and Global Reporting Initiative (“GRI”) standards. The Governance Committee oversees our corporate responsibility and sustainability policies and programs pursuant to its charter. For more information, please refer to the section entitled “Corporate Responsibility and Sustainability” on page 22.

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CORPORATE GOVERNANCE MATTERS

PROPOSAL 1
ELECTION OF DIRECTORS

All directors elected annually by a simple majority of votes cast
Independent Board leadership, including a Lead Independent Director with clearly defined roles and responsibilities
Eight of nine director nominees are independent
Our Board of Directors recommends a vote FOR each of the nine director nominees named in this Proxy Statement

Our Board of Directors is presenting nine nominees for election as directors at the Annual Meeting. Each of the nominees is currently a member of our Board and, other than Dr. Caulfield and Ms. Suzuki, who joined our Board in July 2021, was elected to our Board at the 2020 annual meeting of stockholders. Each director elected at the Annual Meeting will serve until our 2022 annual meeting of stockholders and until a successor is duly elected and qualified. Each of the nominees has consented to be named in this Proxy Statement and to serve as a director if elected. If any nominee is unable or unwilling for good cause to stand for election or serve as a director if elected, the persons named as proxies may vote for a substitute nominee designated by our existing Board of Directors, or our Board may choose to reduce its size.

In accordance with our retirement policy, Ms. Cote has not been nominated for re-election at the Annual Meeting. Our Board intends to reduce the size of our Board to nine directors immediately following the Annual Meeting. Stockholders may not vote their shares for more than nine director nominees.

Vote Required for Approval

Each director nominee will be elected as a director if the nominee receives the affirmative vote of a majority of the votes cast with respect to his or her election (in other words, the number of shares voted “for” a director must exceed the number of votes cast “against” that director). You may vote FOR, AGAINST or ABSTAIN with respect to each director nominee. Proxies received by our Board of Directors will be voted FOR each director nominee unless specified otherwise.

If a nominee who is serving as a director is not elected at the Annual Meeting by the requisite majority of votes cast, Delaware law provides that the director would continue to serve on our Board of Directors as a “holdover director.” However, under our By-laws, any incumbent director who fails to be elected must offer to tender his or her resignation to our Board. If the director conditions his or her resignation on acceptance by our Board, the Governance Committee will then make a recommendation to our Board on whether to accept or reject the resignation or whether other action should be taken. Our Board will act on the committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date the election results are certified. The director who tenders his or her resignation will not participate in our Board’s or the committee’s decision. Any nominee who was not already serving as a director and is not elected at the Annual Meeting by a majority of the votes cast with respect to such director’s election would not be elected to our Board.

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Corporate Governance Matters

Nominees for Election

Below is information about the experience and other key qualifications and attributes of each of our Board’s nine director nominees.

KIMBERLY E. ALEXY
 INDEPENDENT 

AGE: 51
DIRECTOR SINCE: November 2018
COMMITTEES:

PROFESSIONAL EXPERIENCE

Ms. Alexy is a seasoned financial services professional with more than 25 years of experience in capital markets, corporate finance and investments. She founded Alexy Capital Management, a private investment fund, in 2005 and serves as its principal.
Previously, Ms. Alexy served as a sell-side equity research analyst on Wall Street for nearly a decade, specializing in the technology and corporate finance industries at Prudential Securities, Lehman Brothers and Wachovia Bank.
Within the last five years, Ms. Alexy served as a director of Microsemi Corporation and CalAmp Corp.
Ms. Alexy has a CFA designation.

OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS

Alteryx, Inc.
FireEye, Inc.
Five9, Inc.
BOARD SKILLS, QUALIFICATIONS AND EXPERTISE

Ms. Alexy’s deep expertise in finance, securities and corporate governance at several financial institutions and publicly held companies is directly relevant to our business. Her service on numerous public company boards of directors, including having served as a chair of the audit or governance committees of many of those boards, provides our Board with valuable insights and perspectives. We believe these experiences, qualifications, attributes and skills qualify her to serve as a member of our Board.

COMMITTEE EXPERTISE HIGHLIGHTS

Audit Committee Chair

Ms. Alexy’s financial skills and prior experience as a financial analyst for nearly a decade and her service as a member of several public company audit committees, including serving as chair, qualify her as an audit committee financial expert under SEC rules. In addition, Ms. Alexy contributes her specialized knowledge of cybersecurity issues, which includes a CERT Certificate in Cybersecurity Oversight for corporate directors issued by the CERT Division of the Software Engineering Institute at Carnegie Mellon University.

Governance Committee Member

Ms. Alexy has substantial governance experience serving as a member or chair of the nominating and corporate governance committee at a number of public companies.

DR. THOMAS H. CAULFIELD
 INDEPENDENT 

AGE: 62
DIRECTOR SINCE: July 2021
COMMITTEES:

PROFESSIONAL EXPERIENCE

Dr. Caulfield is the CEO of GlobalFoundries Inc., which provides a broad range of platforms and features with a unique mix of design, development and fabrication services.
Prior to being named CEO of GlobalFoundries in March 2018, Dr. Caulfield was the senior vice president and general manager of its Fab 8 semiconductor wafer manufacturing facility from May 2014 to March 2018. From 2012 to 2014, Dr. Caulfield served as the president and chief operating officer of Soraa, Inc., a lighting products manufacturer. From 2010 through 2012, he served as CEO of Caitin Inc., a clean technology company. From 2009 through 2010, he served as the chief operating officer of Ausra, Inc., a leading provider of concentrated solar power solutions, and from 2005 through 2009, he served as executive vice president of sales, marketing and customer satisfaction at Novellus Systems, Inc., a semiconductor equipment manufacturer. Prior to that, he held various positions of increasing responsibility at International Business Machines Corporation for 16 years, including as vice president of semiconductor operations.

OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS

None
BOARD SKILLS, QUALIFICATIONS AND EXPERTISE

Dr. Caulfield brings many years of experience in the semiconductor industry, spanning engineering, management and global operational leadership, and brings expertise in business leadership, corporate strategy, manufacturing and marketing experience to our Board. He also brings prior public company board experience. We believe these experiences, qualifications, attributes and skills qualify him to serve as a member of our Board.

COMMITTEE EXPERTISE HIGHLIGHTS

Governance Committee Member

Dr. Caulfield has governance experience as a former board member of a public company.

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Corporate Governance Matters

MARTIN I. COLE
 INDEPENDENT 

AGE: 65
DIRECTOR SINCE: December 2014
COMMITTEES:

PROFESSIONAL EXPERIENCE

Mr. Cole served as the chief executive of the technology group of Accenture plc, a leading global management consulting and professional services company, with responsibility for the full range of Accenture’s technology consulting and outsourcing solutions and delivery capabilities, including its global delivery network, from 2012 until he retired in 2014.
Previously, Mr. Cole served as the chief executive of Accenture’s communications, media and technology operating group from 2006 to 2012, the chief executive of its government operating group from 2004 to 2006, the managing partner of its outsourcing and infrastructure delivery group from 2002 to 2004 and in a variety of other capacities at Accenture from 1980.
Within the last five years, Mr. Cole served as a director of Cloudera, Inc. and as its board chairman. He also served as its interim CEO from August 2019 to January 2020.
Mr. Cole currently served as a senior adviser to 3i Group plc.

OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS

The Western Union Company

BOARD SKILLS, QUALIFICATIONS AND EXPERTISE

Mr. Cole brings to our Board extensive senior executive leadership experience across a variety of business sectors and geographies. This demonstrates his ability to provide strategic advice and lead multiple teams across a variety of business sectors, and provides him with wide-ranging insights, including relating to technology solutions, which are an important part of our business. We believe these experiences, qualifications, attributes and skills qualify him to serve as a member of our Board.

COMMITTEE EXPERTISE HIGHLIGHTS

Compensation and Talent Committee Chair

Mr. Cole has significant experience establishing and overseeing executive compensation programs as a former executive, CEO and as a board and compensation committee member at other public companies.

Audit Committee Member

Mr. Cole’s financial skills and prior experience as a CEO qualify him as an audit committee financial expert under SEC rules.

TUNÇ DOLUCA
 INDEPENDENT 

AGE: 63
DIRECTOR SINCE: August 2018
COMMITTEES:

PROFESSIONAL EXPERIENCE

Mr. Doluca served as the president and CEO of Maxim Integrated, which designed, developed, manufactured and marketed a broad range of linear and mixed-signal integrated circuits, until August 2021, when it was acquired by Analog Devices, Inc.
Prior to being named Maxim Integrated’s president and CEO in January 2007, Mr. Doluca served as its group president from 2005 to 2007, senior vice president from 2004 to 2005 and vice president from 1994 to 2004. Prior to 1994, Mr. Doluca served in a number of integrated circuit development positions at Maxim Integrated since joining the company in 1984.
Mr. Doluca is a board member of the Semiconductor Industry Association and served as its chairman from 2017 to 2018.
Within the last five years, Mr. Doluca served as a director of Maxim Integrated.

OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS

Analog Devices, Inc.

BOARD SKILLS, QUALIFICATIONS AND EXPERTISE

Mr. Doluca brings to our Board over 30 years of executive leadership and technical experience in the semiconductor industry, which provides our Board with valuable perspectives directly relevant to our business. As a seasoned CEO and director of a large public technology company, he has expertise in corporate strategy, financial management, operations, marketing and research and development, which are all critical to achieving our strategic objectives. We believe these experiences, qualifications, attributes and skills qualify him to serve as a member of our Board.

COMMITTEE EXPERTISE HIGHLIGHTS

Compensation and Talent Committee Member

Mr. Doluca has significant experience establishing and overseeing executive compensation programs as the former CEO of Maxim Integrated.

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DAVID V. GOECKELER
 CHIEF EXECUTIVE OFFICER 

AGE: 59
DIRECTOR SINCE: March 2020
COMMITTEES:

PROFESSIONAL EXPERIENCE

Mr. Goeckeler has served as our CEO since March 2020.
Prior to that, Mr. Goeckeler served as executive vice president and general manager of the networking and security business of Cisco Systems, Inc., a large, multi-national technology company, from July 2017 to March 2020. From May 2016 to August 2017, Mr. Goeckeler served as senior vice president and general manager for Cisco’s networking and security business group, and served as senior vice president and general manager for its security business from 2014 to 2016.

OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS

None
BOARD SKILLS, QUALIFICATIONS AND EXPERTISE

Mr. Goeckeler’s 20 years of experience in technical and leadership positions at Cisco, including more than six years in senior management positions there, and his current position as our CEO, contributes indispensable knowledge and expertise to our Board. We believe these experiences, qualifications, attributes and skills qualify him to serve as a member of our Board.

COMMITTEE EXPERTISE HIGHLIGHTS

Executive Committee Chair

Mr. Goeckeler serves as our CEO and has held numerous senior executive roles at Cisco, most recently overseeing its networking and security business.

MATTHEW E. MASSENGILL
 INDEPENDENT CHAIRMAN OF THE BOARD 

AGE: 60
DIRECTOR SINCE: January 2000
COMMITTEES:

PROFESSIONAL EXPERIENCE

Mr. Massengill served as the President of Western Digital Corporation from 2000 to 2002, CEO from 2000 to 2005 and Chairman of the Board from 2001 to 2007.
Prior to that, Mr. Massengill served as Western Digital’s Chief Operating Officer from 1999 to 2000 and in various executive capacities since joining our company in 1985.
Within the last five years, Mr. Massengill served as a director of Microsemi Corporation.

OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS

None
BOARD SKILLS, QUALIFICATIONS AND EXPERTISE

Mr. Massengill’s many years of service to Western Digital as an executive and Board member provide our Board with extensive and significant experience directly relevant to our business. As our former CEO, he has a deep understanding of our operations, provides valuable knowledge to our Board on the issues we face to achieve our strategic objectives and has extensive international experience. His prior service on numerous other public company boards of directors also provides our Board with important board-level perspective. We believe these experiences, qualifications, attributes and skills qualify him to serve as a member of our Board.

COMMITTEE EXPERTISE HIGHLIGHTS

Executive Committee Member

Mr. Massengill has extensive and significant experience as an executive, including as a former CEO, Chief Operating Officer and Board member of our company.

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PAULA A. PRICE
 INDEPENDENT 

AGE: 59
DIRECTOR SINCE: June 2020
COMMITTEES:

PROFESSIONAL EXPERIENCE

Ms. Price served as an advisor to Macy’s, Inc., an omni-channel retailer that operates more than 800 stores, from June 2020 to December 2020, after serving as its executive vice president and CFO, from July 2018 to June 2020. Ms. Price has also served as a visiting executive for Harvard Business School since July 2018.
Prior to joining Macy’s, Ms. Price was a senior lecturer for Harvard Business School in the Accounting and Management Unit from July 2014 to July 2018. From 2009 to 2014, Ms. Price served as executive vice president and CFO at Ahold USA, a retailer that operates more than 700 supermarkets and an online grocery delivery service, where she was responsible for finance and accounting, strategic planning, real estate and information technology. From 2006 to 2008, she was the senior vice president, controller and chief accounting officer at CVS Caremark and from 2002 to 2005, she was the senior vice president and CFO for the institutional trust services division of JPMorgan Chase. Prior to that, she held several other senior management positions in the U.S. and the U.K. in the financial services and consumer products industries at Prudential Insurance Co. of America, Diageo and Kraft Foods.
Within the last five years, Ms. Price served as a director of Western Digital (from July 2014 to February 2019) and Dollar General Corporation.
Ms. Price is a certified public accountant.

OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS

Accenture plc
Bristol-Myers Squibb Company
DaVita Inc.
BOARD SKILLS, QUALIFICATIONS AND EXPERTISE

Ms. Price’s numerous years of experience as a certified public accountant, CFO and chief accounting officer provide our Board with valuable experience and insight into accounting and finance matters. She also brings expertise and knowledge of the complexities of growing and managing a global business. She has extensive experience overseeing and integrating merger and acquisition transactions at the executive level, which is experience highly valued by our Board of Directors. We believe these experiences, qualifications, attributes and skills qualify her to serve as a member of our Board.

COMMITTEE EXPERTISE HIGHLIGHTS

Audit Committee Member

Ms. Price’s years of experience as a CFO, chief accounting officer and certified public accountant qualify her as an audit committee financial expert under SEC rules.

STEPHANIE A. STREETER
 INDEPENDENT 

AGE: 64
DIRECTOR SINCE: November 2018
COMMITTEES:

PROFESSIONAL EXPERIENCE

Ms. Streeter served as the CEO of Libbey Inc., a producer of glass tableware and other tabletop products, from 2011 to 2016, where she developed and implemented a new corporate strategy and reconstructed the company’s balance sheet, manufacturing network and cost base.
Prior to that, Ms. Streeter served as the acting CEO of the U.S. Olympic Committee from 2009 to 2010 and served on its board of directors from 2004 to 2009. Previously, Ms. Streeter held numerous senior management positions at Banta Corporation, a global technology, printing and supply-chain management company, where she served as chairman, president and CEO, and at Avery Dennison Corporation, a global materials science and manufacturing company.
Within the last five years, Ms. Streeter served as a director of Olin Corporation.

OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS

Goodyear Tire & Rubber Company
Kohl’s Corporation
BOARD SKILLS, QUALIFICATIONS AND EXPERTISE

Ms. Streeter brings to our Board extensive senior executive leadership experience overseeing companies with manufacturing and operations across the globe. She has served on several public company boards of directors. We believe these experiences, qualifications, attributes and skills qualify her to serve as a member of our Board.

COMMITTEE EXPERTISE HIGHLIGHTS

Governance Committee Chair

Ms. Streeter has substantial governance experience as a director of Goodyear, as a director and former member of the governance and nominating committee of Kohl’s and as a former director and governance committee member of several public companies.

Compensation and Talent Committee Member

Ms. Streeter has significant experience establishing and overseeing executive compensation programs as a former CEO and as a board and compensation committee member at other public companies.

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MIYUKI SUZUKI
 INDEPENDENT 

AGE: 61
DIRECTOR SINCE: July 2021
COMMITTEES:

PROFESSIONAL EXPERIENCE

Ms. Suzuki served as president, Asia Pacific, Japan and China of Cisco Systems, Inc. from January 2018 to February 2021.
Prior to that, Ms. Suzuki served as president and general manager of Cisco Japan from May 2015 to January 2018. From 2011 to 2015, Ms. Suzuki served as president and CEO of Jetstar Japan, a Japanese airline. From 2007 to 2011, she served as president and vice chairman of KVH (now Colt Technology Services), a telecommunications company. Prior to that, she served as president and CEO of LexisNexis Asia Pacific., a legal research company, from 2004 to 2006. From 2002 to 2004, she served as executive vice president and head of consumer business of Japan Telecom. From 2000 to 2002, she served as CEO of CAZH, an online payments company. From 1997 to 2000, she served as managing director of Brokat AG Asia, a professional services and financial software company. Prior to that, she held various positions of increasing responsibility at Thomson Reuters, a multi-national media company, for 16 years, including serving as managing director, South East Asia.
Ms. Suzuki has served as a director of MetLife Japan since January 2019 and Jera Co., Inc. since April 2021. She serves on the nominating, compensation and audit committees at MetLife Japan.

OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS

None
BOARD SKILLS, QUALIFICATIONS AND EXPERTISE

Ms. Suzuki brings to our Board extensive leadership experience in the technology, telecommunications and airline industries. She has deep global operations experience across the Asia Pacific region. We believe these experiences, qualifications, attributes and skills qualify her to serve as a member of our Board.

COMMITTEE EXPERTISE HIGHLIGHTS

Governance Committee Member

Ms. Suzuki has substantial governance experience as a director of two Japanese-based companies.

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Director Meeting Attendance

During fiscal 2021, our Board of Directors met 24 times. Each of the directors who served during fiscal 2021 attended 75% or more of the aggregate number of Board meetings and meetings of our Board committees on which he or she served during fiscal 2021. Our Board strongly encourages each director to attend our annual meeting of stockholders. All directors standing for election at the 2020 annual meeting of stockholders were in attendance.

                         
STRONG DIRECTOR ENGAGEMENT

Average director attendance at fiscal 2021 Board and committee meetings:

Board Audit Compensation and Talent Governance
96% 100% 100% 97%

Over 97% Board and committee meeting aggregate attendance in fiscal 2021.

Director Skills and Expertise

Our Board of Directors believes our nominees’ breadth of experience, diversity and mix of qualifications, attributes, tenure and skills strengthen our Board’s independent leadership and effective oversight of management.

INDEPENDENCE

    

GENDER

    

DIVERSITY

    

AGE

    

TENURE(1)

89%
Independent

44%
Women

22%
Diverse Members

60 Years
Average Age

5 Years
Average Tenure
(1)

8 Independent
1 Non-Independent

4 Women
5 Men

2 members are racially/
ethnically diverse or
LGBTQ+ community
members

4 ≤60 years
5 61–69 years

6 <5 years
2 5–10 years
1 >10 years

(1)

Calculation includes Ms. Price’s tenure as a director from July 2014 to February 2019.


                         
WOMEN IN BOARD LEADERSHIP ROLES
Lead Independent Director Audit Committee Chair Governance Committee Chair

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DIRECTOR NOMINEE SKILLS, EXPERIENCE AND BACKGROUNDS

     

EXECUTIVE EXPERIENCE
Experience in executive-level positions is important to gain a practical understanding of complex organizations, corporate governance, operations, talent development, strategic planning and risk management

SEMICONDUCTOR EXPERIENCE
Experience in the semiconductor industry is important in understanding our technology, products and operations, which is critical for our future growth

DATA INFRASTRUCTURE EXPERIENCE
Experience in data infrastructure, including related software, hardware and data centers, storage, protection and management is important to understanding the issues and opportunities facing our business

MANUFACTURING
Experience with sophisticated, large-scale manufacturing increases our Board’s understanding of our distribution, supply chain and manufacturing facilities

OPERATIONS AND INFRASTRUCTURE
Experience with complex, global operations assists our Board in fostering our operational excellence and adapting to evolving market conditions

TECHNOLOGY/INNOVATION
Experience in researching, developing or designing leading-edge technologies is critical for the continued growth and innovation of our business

GLOBAL EXPERIENCE
Experience with businesses with substantial international operations provides critical business and cultural perspectives to our Board and is important in understanding the strategic opportunities and risks relating to our business

SALES/MARKETING
Experience developing and executing on strategies to grow sales and market share assists our Board in advising management as we seek to develop new products and new markets for our products

FINANCE AND ACCOUNTING
Experience overseeing accounting and financial reporting is key to our Board’s oversight of our financial reporting process and internal controls

CYBERSECURITY
Experience understanding and managing information technology and cybersecurity threats is increasingly important to mitigate risks to our business

RISK MANAGEMENT
Experience in assessing and managing enterprise risks is critical to our Board’s role in overseeing our enterprise risk management program

CORPORATE SUSTAINABILITY AND RESPONSIBILITY
Experience in assessing corporate social responsibility initiatives is critical to our Board’s role in overseeing our corporate responsibility and sustainability policies and programs

STRATEGY PLANNING EXPERIENCE
Experience setting and executing long-term corporate strategy is critical as we continue to grow our business

HUMAN CAPITAL MANAGEMENT
Experience in human capital management in large organizations assists our Board in overseeing succession planning, talent development and our executive compensation program

MEMBER OF AN UNDERREPRESENTED COMMUNITY
Self-identifies as racially or ethnically diverse, or as a member of the LGBTQ+ community

GENDER
Self-identified gender
Male = M; Female = F; Nonbinary, third gender or other = O

F M M M M M F F F
Indicates “Technical or Managerial Expertise” (expertise derived from direct and hands-on experience or direct managerial experience with the subject matter during his/her career)
Indicates “Working Knowledge” (experience derived through: (i) board or relevant committee membership at our company or another public company; (ii) executive leadership or board membership of a public company in the relevant industry; or (iii)consulting, investment banking, private equity investing or legal experience)

OUR BOARD IS HIGHLY ENGAGED AND WELL QUALIFIED, AND ALL DIRECTOR NOMINEES POSSESS THE SKILLS AND EXPERIENCES NECESSARY TO OVERSEE OUR EVOLVING AND GROWING BUSINESS.


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Director Independence

Our Board of Directors has reviewed and discussed information provided by the directors and our company with regard to each director’s business and personal activities, as well as those of the director’s immediate family members, as they may relate to our company or our management. The purpose of this review is to determine whether there are any transactions or relationships that would be inconsistent with a determination that a director is independent under the listing standards of the Nasdaq Stock Market. Based on its review, our Board has affirmatively determined that, except for serving as a member of our Board, none of our current non-employee directors (Messrs. Caulfield, Cole, Doluca or Massengill, or Mses. Alexy, Cote, Price, Streeter or Suzuki) has any relationship that, in the opinion of our Board, would interfere with such director’s exercise of independent judgment in carrying out his or her responsibilities as a director, and that each such director qualifies as “independent” as defined by the listing standards of the Nasdaq Stock Market. Mr. Goeckeler is currently a full-time, executive-level employee of our company and, therefore, is not “independent” as defined by the listing standards of the Nasdaq Stock Market.

Director Nominations and Board Refreshment

Key Director Criteria

The Governance Committee has adopted a policy regarding critical factors to be considered in selecting director nominees, which include: the nominee’s personal and professional ethics, integrity and values; the nominee’s intellect, judgment, foresight, skills, experience (including understanding of marketing, finance, our technology and other elements relevant to the success of a company such as ours) and achievements, all of which are viewed in the context of the overall composition of our Board of Directors; the absence of any conflict of interest (whether due to a business or personal relationship) or legal impediment to, or restriction on, the nominee serving as a director; having a majority of independent directors on our Board; and representation of the long-term interests of our stockholders as a whole and a diversity of backgrounds and expertise, which are most needed and beneficial to our Board and our company. The Governance Committee is committed to Board diversity and takes into account the personal characteristics, experience and skills of current and prospective directors, including gender, race, ethnicity and membership in another underrepresented community, to ensure that a broad range of perspectives is represented on our Board to effectively perform its governance role and oversee the execution of our strategy.

As further detailed below, the Governance Committee annually evaluates the size and composition of our Board of Directors and assesses whether the composition appropriately aligns with our evolving business and strategic needs. The focus of this exercise is on ensuring that our Board is composed of directors who possess a wide variety of relevant skills, expertise and backgrounds (including gender, race, ethnicity or other characteristics), bring diverse viewpoints and perspectives and effectively represent the long-term interests of stockholders. Through this process, our Board, upon the recommendation of the Governance Committee, develops a list of qualifications, skills and attributes sought in director candidates. Specific director criteria evolve over time to reflect our strategic and business needs and the changing composition of our Board.

Adoption of Diverse Director Candidate Pool Provision

Although it has long been the practice of the Governance Committee to include diverse candidates in the director search process, our Board of Directors recently formalized this process by adopting a provision in our Corporate Governance Guidelines requiring the committee to include, and instruct any search firm it engages to include, women and members of underrepresented communities in the pool from which the committee selects director nominees. The diverse director candidate pool provision reflects our Board’s continued commitment to diversity in the boardroom. Of the last six independent directors to join our Board, four were women, including two from underrepresented communities.

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Director Nomination Process

Thoughtful process to develop criteria
sought in directors, guided by the
Governance Committee
Potential nominees identified,
including women and members of
underrepresented communities

 
Board nominates directors for election
by stockholders
Governance Committee reviews available
information on prospective nominees,
regardless of recommending party

ASSESS
Our Board of Directors, led by the Governance Committee, evaluates the size and composition of our Board at least annually, considering evolving skills, perspective and experience needed on our Board to perform its governance and oversight role as the business transforms and the underlying risks change over time. Among other factors, the committee considers our strategy and needs, as well as our directors’ skills, expertise, experiences, tenure, age and backgrounds, including gender, race, ethnicity and membership in another underrepresented community. After assessing these factors, our Board develops criteria for potential candidates to be additive and complementary to the overall composition of our Board. Specific director criteria evolve over time to reflect our strategic and business needs and the changing composition of our Board. Please see the section entitled “Board Processes and Policies—Board Evaluation” below for additional information on our Board’s self-assessment process.

IDENTIFY
The Governance Committee is authorized to use any methods it deems appropriate for identifying candidates for membership on our Board of Directors, including considering recommendations from incumbent directors, management or stockholders and engaging the services of an outside search firm to identify suitable potential director candidates. The committee will include, and instruct any search firm it engages to include, women and members of underrepresented communities in the pool of director candidates.

EVALUATE
The Governance Committee has established a process for evaluating director candidates that it follows regardless of who recommends a candidate for consideration. Through this process, the committee considers a candidate’s skills and experience and other available information regarding each candidate. For incumbent director candidates, this process includes consideration of the results of the annual Board and committee evaluations. See the section entitled “Board Processes and Policies—Board Evaluation” below. Following the evaluation, the committee recommends nominees to our Board.

NOMINATE
Our Board of Directors considers the Governance Committee’s recommended nominees, analyzes their independence and qualifications and selects nominees to be presented to our stockholders for election to our Board.

Stockholder Recommendations and Nominations of Director Candidates

The Governance Committee may receive recommendations for director candidates from our stockholders. Additionally, our stockholders may nominate director candidates for inclusion in our proxy materials pursuant to the proxy access right set forth in our By-laws or may nominate directors for election at future annual meetings of our stockholders pursuant to the advance notice provisions set forth in our By-laws, in each case as described further below.

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Stockholder Recommendations of Director Candidates

A stockholder may recommend a director candidate to the Governance Committee by delivering a written notice to our Secretary at our principal executive offices and including the following in the notice: the name and address of the stockholder as they appear on our books or other proof of share ownership; the class and number of shares of our common stock beneficially owned by the stockholder as of the date the stockholder gives written notice; a description of all arrangements or understandings between the stockholder and the director candidate and any other person(s) pursuant to which the recommendation or nomination is to be made by the stockholder; the name, age, business address and residence address of the director candidate and a description of the director candidate’s business experience for at least the previous five years; the principal occupation or employment of the director candidate; the class and number of shares of our common stock beneficially owned by the director candidate; the consent of the director candidate to serve as a member of our Board of Directors if appointed or elected; and any other information required to be disclosed with respect to a director nominee in solicitations for proxies for the election of directors pursuant to applicable rules of the SEC.

The committee may require additional information as it deems reasonably required to determine the eligibility of the director candidate to serve as a member of our Board of Directors. Stockholders recommending candidates for consideration by our Board in connection with the next annual meeting of stockholders should submit their written recommendation no later than June 1 of the year of that meeting.

The committee will evaluate director candidates recommended by stockholders for election to our Board in the same manner and using the same criteria as it uses for any other director candidate. If the committee determines that a stockholder-recommended candidate is suitable for membership on our Board of Directors, it will include the candidate in the pool of candidates to be considered for nomination upon the occurrence of the next vacancy on our Board or in connection with the next annual meeting of stockholders.

Proxy Access

Our By-laws provide for proxy access, a means for our stockholders to include stockholder-nominated director candidates in our proxy materials for annual meetings of stockholders. A stockholder, or group of not more than 20 stockholders (collectively, an “eligible stockholder”), meeting specified eligibility requirements is generally permitted to nominate the greater of: (i) two director nominees; and (ii) 20% of the number of directors on our Board. In order to be eligible to use the proxy access process, an eligible stockholder must, among other requirements, have owned 3% or more of our outstanding common stock continuously for at least three years and deliver written notice of the nomination to our Secretary in the manner described in Section 2.14 of our By-laws and within the time periods set forth in this Proxy Statement in the section entitled “Additional Information—General Information About the Annual Meeting—Submission of Stockholder Proposals and Director Nominations.” Use of the proxy access process to submit stockholder nominees is subject to additional eligibility, procedural and disclosure requirements set forth in Section 2.14 of our By-laws.

Other Director Nominations

Stockholders who wish to nominate a person for election as a director in connection with an annual meeting of stockholders (as opposed to making a recommendation to the Governance Committee as described above) and who do not intend for the nomination to be included in our proxy materials pursuant to the proxy access process described above must comply with the advance notice requirement set forth in our By-laws. Pursuant to this advance notice requirement, a stockholder must deliver written notice of the nomination to our Secretary in the manner described in Section 2.11 of our By-laws and within the time periods set forth in this Proxy Statement in the section entitled “Additional Information—General Information About the Annual Meeting—Submission of Stockholder Proposals and Director Nominations.”

Board Refreshment

Our Board of Directors believes that periodic Board refreshment can provide new experiences and fresh perspectives to our Board and is most effective if it is sufficiently balanced to maintain continuity among Board members that will allow for the sharing of historical perspectives and experiences relevant to our company. Our Board seeks to achieve this balance through its director succession planning process and director retirement policy described below. Our Board also utilizes the annual Board and individual director assessment process discussed below under “Board Processes and Policies—

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Board Evaluation” to help inform its assessment of our Board’s composition and Board refreshment needs. In keeping with our commitment to Board refreshment, we have currently engaged an executive search firm to assist us in identifying and evaluating potential independent director nominees to join our Board.

Succession Planning

Our Board of Directors is focused on ensuring that it has members with diverse skills, expertise, experience, tenure, age and backgrounds, including gender, race and ethnicity, because a broad range of perspectives is critical to effective corporate governance and overseeing the execution of our strategy. The Governance Committee has developed a long-range succession plan to identify and recruit new directors, and our Board has appointed four new directors in the past two years. The committee also plans for the orderly succession of the Chairs of our Board’s committees.

In accordance with our retirement policy described below, Ms. Cote, who serves as our Lead Independent Director, has not been nominated for re-election at the Annual Meeting. In anticipation of Ms. Cote’s retirement, the Governance Committee undertook a thoughtful process to identify a successor to serve as our Lead Independent Director. As part of the process, the committee developed selection criteria and each independent director provided input on candidates. In August 2021, the independent directors appointed Ms. Streeter to serve as our Lead Independent Director upon Ms. Cote’s retirement in November 2021. Ms. Streeter’s leadership roles on our special CEO search committee, in successful director searches and as our Governance Committee Chair, as well as her relationship with our CEO and other members of our Board and leadership roles on other public company boards, qualify her to serve as our Lead Independent Director.

Appointment of Dr. Thomas H. Caulfield and Miyuki Suzuki

In July 2021, our Board appointed Dr. Caulfield and Ms. Suzuki as directors. Dr. Caulfield is a demonstrated leader with over 30 years of semiconductor industry experience. He brings to our Board his extensive semiconductor knowledge, from an engineering, manufacturing, management and global operations perspective. Dr. Caulfield was recommended to the Governance Committee by an outside search firm. Ms. Suzuki is an accomplished business executive with over 35 years of leadership experience in the technology, telecommunications and airline industries. Ms. Suzuki brings to our Board her deep global expertise that spans the Asia Pacific region. Ms. Suzuki was referred to the Governance Committee by our CEO. Dr. Caulfield and Ms. Suzuki serve on the Governance Committee.

With these changes, our Board of Directors has sought to refresh its composition while maintaining institutional knowledge with directors of varying lengths of tenure and has implemented forward-looking plans for committee succession. The Governance Committee is committed to continuing to identify and recruit highly qualified director candidates with diverse experiences, perspectives and backgrounds to join our Board.

Retirement Policy

To help facilitate the periodic refreshment of our Board of Directors, our Corporate Governance Guidelines provide that no director shall be nominated for re-election after the director has reached the age of 72, unless our Board determines in a particular instance that longer tenure is in the best interests of our company and our stockholders.

Board’s Role and Responsibilities

Stockholder Engagement

Our Board of Directors and management are committed to regular engagement with our stockholders and soliciting their views and input on important performance, executive compensation, governance, environmental, social, human capital management and other matters.

Board-Driven Engagement. In addition to the Governance Committee’s oversight of the stockholder engagement process and the periodic review and assessment of stockholder input, our directors also engage directly with our stockholders by periodically participating in stockholder outreach.

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Year-Round Engagement and Board Reporting. Our executive management members and directors, together with our investor relations and legal teams, conduct outreach to stockholders throughout the year to obtain their input on key matters and keep our management and Board informed about the issues that our stockholders tell us matter most to them.
Transparency and Informed Compensation Decisions and Governance Enhancements. The Compensation and Talent and Governance Committees routinely review our executive compensation design and governance practices and policies, respectively, with an eye towards continual improvement and enhancements. Stockholder input is regularly shared with our Board, its committees and management, facilitating a dialogue that provides stockholders with transparency into our executive compensation design and governance practices and considerations, and informs our company’s enhancement of those practices.

YEAR-ROUND STOCKHOLDER ENGAGEMENT

As a continuation of our robust Board-driven stockholder engagement program, over the past year, we reached out to stockholders representing nearly 60% of shares outstanding. Our engagement team conducted calls with 14 stockholders, composed of investors with a variety of investment styles and geographic locations. The other stockholders we contacted confirmed that a discussion was not needed at that time or did not respond. Our Chair of the Compensation and Talent Committee, an independent director, led several of these stockholder calls.

SUMMER 2021 STOCKHOLDER ENGAGEMENT AND FEEDBACK

While our discussions with investors covered a variety of topics, there were some key areas of focus in our conversations:

Executive leadership team composition
Board composition, experience and diversity
Executive compensation philosophy and program design, including an overview of how investor feedback influenced various program enhancements
Corporate responsibility and sustainability, particularly with respect to climate change and climate resiliency
Equity, inclusion and diversity at Western Digital, including recent developments and enhanced disclosure in our 2021 Sustainability Update

Stockholders generally provided positive feedback on the diversity of our Board and our executive compensation program. Investors were also very supportive of our progress in sustainability reporting, particularly with respect to our progress toward alignment with the Task Force on Climate-Related Financial Disclosures and our commitment to set science-based targets. These views were shared with our Board and its committees, where applicable, for their consideration.

Corporate Responsibility and Sustainability

We believe responsible and sustainable business practices support our long-term success as a company. Those practices help keep our communities and our environment vibrant and healthy. But they also lead us to more efficient and resilient business operations. They help us meet our customers’ efficiency targets. They reduce risks of misconduct and legal liability. They enhance the reliability of our supply chain. And they improve the health, well-being, engagement and productivity of our employees. We believe that being an industry leader is not just about having talented employees or innovative products. It is also about doing business the right way, every day. That is why our commitment to sound corporate responsibility is deeply rooted in all aspects of our business.

Oversight by Our Board of Directors

Sound corporate responsibility in all aspects of our business is a focus of our Board of Directors. The Governance Committee is responsible for assisting our Board in overseeing our corporate responsibility and sustainability policies and programs. The committee provides Board-level input on our social, environmental and human rights policies and programs. In addition, the Compensation and Talent Committee periodically reviews our human capital management policies, programs and initiatives, including those focusing on culture, diversity and inclusion. The Governance Committee receives updates from our sustainability group and management two to three times each year and discusses implementation of new sustainability initiatives.

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2021 Sustainability Update

As a reflection of the increasing importance of sustainability to our business, we are transitioning our annual sustainability reporting to align with our financial reporting. Our 2020 Sustainability Report covered calendar year 2019, which included the first half of fiscal 2020, and our 2021 Sustainability Update covers the second half of fiscal 2020. Beginning with our report for fiscal 2021, we plan to publish our reports and the underlying data after the close of our fiscal year. The 2020 Sustainability Report and the 2021 Sustainability Update can be found on our Corporate Sustainability page at www.westerndigital.com.

Our 2021 Sustainability Update topics were selected based on a materiality assessment completed in 2020, which incorporated input from investors, customers and other stakeholders, as well as strategic priorities. The update aligns with both SASB and GRI standards. Below are notable highlights from our program:

Human Rights and Labor     Energy and Emissions     Lifecycle Impacts

Respecting human rights is a foundational aspect of how we do business. We work diligently to foster a working environment where Western Digital employees and employees of our suppliers can be treated with respect and dignity and are provided with fair and safe working conditions.

Completed a global human rights impact assessment
Expanded our disclosure of human rights and labor management practices in our Modern Slavery Compliance Statement
Enhanced human rights-related training to our supply chain

We aim to do our part in helping build an environmentally sustainable future by reducing our energy consumption, investing in conservation projects and managing our impacts on the environment.

Set science-based targets, which were recently approved by the Science Based Targets initiative
Achieved a year-over-year 3.8% reduction in energy use and a 25% reduction in energy intensity
Completed a climate-scenario analysis aligned with TCFD recommendations
Completed a robust Scope 3 emissions data analysis to support emissions reduction targets

We care for our world at every step, everywhere we operate. Because our products are used widely throughout the world, we are committed to delivering products designed and manufactured with long-term sustainability in mind.

Enabled the diversion of over four metric tons of waste from landfills since the launch of our product takeback program in April 2020
Completed several ISO-conformant lifecycle assessments to evaluate the impacts of our products
Kicked off new initiatives to reduce packaging and increase use of recycled packaging materials
 
Diversity and Inclusion Health and Safety/COVID-19 Integrity

Our people are Western Digital’s most valuable resource. We believe we can achieve the best business outcomes by empowering our diverse and talented employees to make an impact, together.

Committed to expanding our pay equity analysis to include 75% of our workforce
Recognized for the third consecutive year by Women’s Choice Award as a Best Company for Millennials, and received a perfect score from Human Rights Campaign in their Corporate Equality Index
Promoted a Global Anti-Harassment and Discrimination Policy with associated training worldwide
Expanded live training on unconscious bias

As a company that has positioned itself to be the world’s leading data infrastructure company, we remain committed to providing essential infrastructure to support our world community during this worldwide pandemic. We do so with the health and safety of our employees as our first priority.

Phased return-to-site plan based on local guidance and global best practice
Encouraged employees to get vaccinated, including through vaccine drives in India, Thailand, Malaysia and the Philippines
Provide paid leave for employees impacted by COVID-19

As a global company operating across a wide range of geographies, Western Digital is committed to doing business fairly and legally. We set a consistent tone across our organization to form our global culture of integrity.

Recognized by Ethisphere Institute for the third consecutive year as one of the World’s Most Ethical Companies
100% of operations assessed for risks related to corruption since 2016
Zero reportable breaches of personal data in 2020 or to date in 2021

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Unified Culture

Our employees drive our success and shape our future. To continue leading the data storage infrastructure industry, we rely on highly skilled individuals to drive our culture of innovation. We work diligently to foster a working environment where all of our employees, regardless of where in the world they are located or what roles they have, can be treated fairly and with respect and dignity, and are provided with safe working conditions. We strive to create an environment where employees feel connected and committed to our mission and vision: to be recognized as the world’s leading data infrastructure company, architecting how data enables the world to solve its biggest challenges.

In fiscal 2021, we implemented a continuous employee listening platform to collect feedback to better understand and improve the employee experience and identify opportunities to strengthen our employee engagement. We had a 92% employee participation rate and identified key strengths including that employees have a sense of belonging at Western Digital, they feel their work is meaningful and are excited about our future.

To promote our culture of inclusion and integrity, we designated approximately 100 culture advocates representing our employees around the world and 20 culture champions selected by members of our executive leadership team to represent our culture attributes at the leadership level. With the support of our culture advocates and champions, our business leaders and employees have been embracing the attributes and bringing them to life.

One of our culture attributes focuses on giving back to the communities that support our employees and operations. Our Global Giving and Doing program is committed to maintaining Western Digital’s reputation as a good corporate citizen. Our charitable donations and volunteerism track the issues that mean the most to us, including equality, environmental preservation, hunger relief and STEM education.

As part of our Culture Journey and focus on people strategy, we also regularly review our talent attraction strategy, including our employer brand and competition for talent. Our goal is to continue our positive track record of attracting and retaining talent.

Equity, Inclusion and Diversity

Western Digital is committed to creating a culture of belonging for all of our employees—all genders, races, ages and any other underrepresented groups, such as racially or ethnically diverse groups or LGBTQ+ community members—across all levels of our organization, starting with our Board of Directors. We believe that the fusion of various ideas results in greater innovation and better business outcomes and we know we are at our absolute best when we leverage the diversity of our employees around the world.

Embracing this philosophy, we continued executing on our global equity, inclusion and diversity strategy and have made additional progress in a number of key areas. For example, we launched our Advancing Women in Leadership program to help women enhance their leadership skills and rise to the top ranks of leadership within the organization. We delivered unconscious bias training in the U.S. equipping leaders to lead inclusively and help all employees identify unconscious bias. We enhanced our parental leave program in the U.S. to provide additional support for new parents and we expanded our Employee Assistance Program for fiscal 2022 to cover all employees globally and align our focus on wellbeing. We continued enhancing our business resource groups, which work with our Equity, Inclusion and Diversity team and business leaders to raise awareness of equity and diversity issues and advocate for equality in general. In the U.S., we conduct pay equity reviews annually to assess the fairness of pay to women and underrepresented ethnic groups. In 2020, we expanded our pay equity review process to include Israel and Malaysia. With the addition of Thailand and India in 2021, our review process covered approximately 48,000 employees, or 75% of our workforce.

We have a dedicated Equity, Inclusion and Diversity team that helps identify global equity, diversity and inclusion initiatives, ensures we carry out our initiatives and monitors progress in our inclusion efforts. The team partners closely with our CEO and Chief People Officer, who report progress to our Board of Directors on a regular basis. Additionally, the Compensation and Talent Committee oversees human capital issues and policies, including those focusing on equity, inclusion and diversity.

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Risk Oversight and Compensation Risk Assessment

Board’s Role in Risk Oversight

Our Board of Directors’ role in risk oversight involves both our full Board and its committees. Individual committees are charged with ensuring that reasonable information and reporting systems exist to identify potential risks to our company encountered through their respective committee work and with exercising appropriate oversight of those risks. Potential risks are raised to the Audit Committee and full Board for inclusion in our enterprise risk management (“ERM”) process. Our Board believes that the processes it has established for overseeing risk would be effective under a variety of leadership frameworks, and therefore such processes do not materially affect its choice of leadership structure as described in the section entitled “Board Structure—Board Leadership Structure” below.


     

BOARD OF DIRECTORS

Our Board meets periodically with our chief audit executive to review our overall ERM program and policies. Throughout the year, our Board receives updates on specific risks and mitigating measures in the course of its review of our strategy and business plan, and through reports to our Board by its respective committees and senior members of management.

     



 
AUDIT
COMMITTEE
                            
Oversees our ERM process and policies and chief audit executive
Oversees the following risk topics:
Financial reporting, accounting, internal controls and fraud
Legal and regulatory compliance
Cybersecurity (receives quarterly updates from our Chief Information Security Officer)
Tax and transfer pricing matters
General business risks
COMPENSATION AND
TALENT COMMITTEE
                            
Oversees the following risk topics:
Compensation programs, policies and practices
Equity and other incentive plans
Recruiting, engagement and retention
Human capital management, including equity, inclusion and diversity
GOVERNANCE
COMMITTEE
                            
Oversees the following risk topics:
Board and committee composition, including Board leadership structure
Director succession planning
Corporate governance policies and practices
Corporate responsibility and sustainability policies and programs
 
 


MANAGEMENT

Each of our major business unit and functional area heads, with the assistance from their staff, work with our internal audit and ERM function to identify risks that could affect achievement of business goals and strategy and develop risk mitigation measures, contingency plans and a consolidated risk profile. The risk profile is then reviewed and discussed with our CEO and CFO before presentation to the Audit Committee. On a regular basis, senior management reviews the risk profile and action plan progress and provides updates to the Audit Committee, which are also made available to our Board and used by our internal audit function in developing its internal audit plan.

    

Compensation Risk Assessment

Consistent with SEC disclosure requirements, we reviewed our fiscal 2021 compensation policies and practices to determine whether they encourage excessive risk taking. We concluded that our compensation programs do not create risks that are reasonably likely to have a material adverse effect on our company.

Chief Executive Officer Evaluation and Succession Planning

Evaluation

The Compensation and Talent Committee reviews and approves our CEO’s goals and objectives. Our Compensation and Talent Committee Chair leads the evaluation of our CEO’s performance in light of those goals and objectives by seeking input from each non-employee director, which is then discussed with our Board. Following the evaluation of our CEO’s performance, the Compensation and Talent Committee determines and approves our CEO’s compensation.

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Ongoing Succession Planning

Our Board of Directors oversees CEO and key management personnel succession planning. Our Board periodically reviews potential internal candidates, including the qualifications, experience and development priorities for these individuals. Directors engage with potential CEO and key management personnel successors at Board and committee meetings and in less formal settings to allow directors to personally assess candidates. Furthermore, our Board periodically reviews the overall composition of our key management personnel’s qualifications, tenure and experience.

Emergency Succession

Our Board of Directors has also adopted an emergency CEO succession plan. The plan will become effective in the event our CEO becomes unable to perform his or her duties in order to minimize potential disruption or loss of continuity to our business and operations. Our emergency CEO succession plan is reviewed annually by the Governance Committee and our Board.

Board Structure

Board Leadership Structure

Our Board of Directors does not have a policy with respect to whether the roles of Chairman of the Board and CEO should be separate and, if they are to be separate, whether our Chairman of the Board should be selected from our directors who are not our employees (referred to in this Proxy Statement as our “non-employee directors”) or should be an employee. We currently separate the roles of CEO and Chairman of the Board, with Mr. Massengill currently serving as Chairman of the Board. Our Board believes this is the appropriate leadership for our company at this time because it permits Mr. Goeckeler, as our CEO, to focus on setting our strategic direction, day-to-day leadership and our performance, while permitting our Chairman of the Board to focus on providing guidance to our CEO and setting the agenda for Board meetings. Our Board also believes that the separation of our CEO and Chairman of the Board roles assists our Board in providing robust discussion and evaluation of strategic goals and objectives.

Our Corporate Governance Guidelines provide that our Board will appoint a Lead Independent Director if our Chairman of the Board is not an independent director under the Nasdaq Stock Market listing standards or if our Board otherwise deems it appropriate. Although our Board has determined that Mr. Massengill is independent under the Nasdaq Stock Market listing standards, because he is a former executive Chairman of the Board, President and CEO of our company, our Board determined it was appropriate to appoint Ms. Cote as our Lead Independent Director. Upon Ms. Cote’s retirement in November 2021, Ms. Streeter will become our Lead Independent Director. See page 21 for a discussion of Ms. Streeter’s qualifications and our succession planning process.

Our Board of Directors acknowledges that no single leadership model is right for all companies at all times. As such, our Board periodically reviews its leadership structure and may, depending on the circumstances, choose a different leadership structure in the future.

Lead Independent Director

The duties of our Lead Independent Director include:

Acting as a liaison between our independent directors and management
Assisting our Chairman of the Board in establishing the agenda for Board meetings
Coordinating the agenda for, and chairing, the executive sessions of our independent directors
Presiding at any Board meeting at which our Chairman is not present
Reviewing and approving goals for and evaluating the performance of our CEO with our Chairman of the Board and Compensation and Talent Committee Chair
Overseeing our stockholder engagement efforts and being available for engagement with stockholders as appropriate
Performing such other duties as may be specified by our Board of Directors from time to time

Our independent directors also meet regularly in executive sessions without management to review, among other things, our strategy, financial performance, management effectiveness and succession planning.

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Committees

Our Board of Directors has standing Audit, Compensation and Talent, Governance and Executive Committees. Each of the standing committees operates pursuant to a written charter that is available on our website under “Leadership & Governance” at investor.wdc.com. Our Board has affirmatively determined that all members of the Audit, Compensation and Talent and Governance Committees are independent as defined under the listing standards of the Nasdaq Stock Market and applicable SEC rules.

AUDIT COMMITTEE
COMMITTEE MEMBERS KEY RESPONSIBILITIES
Kimberly E.
Alexy (Chair)
Martin I.
Cole
Directly responsible for appointing, compensating and overseeing independent accountants, with input from management
Pre-approves all audit and non-audit services
Reviews annual and quarterly financial statements
Reviews adequacy of accounting and financial personnel resources
Oversees and appoints our chief audit executive and reviews our internal audit plan and internal controls
Reviews and discusses with management risk assessment and enterprise risk management policies, including risks related to financial reporting, accounting, internal controls, fraud, legal and regulatory compliance and cybersecurity
Oversees ethics and compliance program

Our Board has affirmatively determined that all members are “audit committee financial experts” as defined by rules of the SEC.

Paula A.
Price

Meetings Held in Fiscal 2021: 10

Committee Report page 77


COMPENSATION AND TALENT COMMITTEE
COMMITTEE MEMBERS KEY RESPONSIBILITIES
Martin I.
Cole (Chair)
Kathleen A.
Cote
Evaluates and approves executive officer compensation
Reviews our human capital management programs and initiatives
Reviews and makes recommendations on non-employee director compensation
Reviews and approves corporate goals and objectives for our CEO’s compensation and evaluates our CEO’s performance in light of those goals and objectives
Oversees incentive and equity-based compensation plans
Reviews and recommends changes to benefit plans requiring Board approval
Reviews and approves any compensation recovery (clawback) policy or stock ownership guidelines applicable to executive officers
Tunç
Doluca
Stephanie A.
Streeter

Meetings Held in Fiscal 2021: 8

Committee Report page 37


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GOVERNANCE COMMITTEE
COMMITTEE MEMBERS KEY RESPONSIBILITIES
Stephanie A. Streeter (Chair)
Kimberly E. Alexy
Develops and recommends a set of corporate governance principles
Evaluates and recommends the size and composition of our Board and committees and functions of committees
Develops and recommends Board membership criteria
Identifies, evaluates and recommends director candidates
Reviews corporate governance issues and practices
Manages annual Board and committee evaluation process
Oversees evaluation of our CEO by our Board and the Compensation and Talent Committee
Develops and oversees our CEO succession planning process
Assists our Board in overseeing corporate responsibility and sustainability policies and programs
Reviews and oversees responses regarding stockholder proposals relating to corporate governance, corporate responsibility or sustainability matters
Dr. Thomas H. Caulfield
Kathleen A. Cote
Miyuki Suzuki
 

Meetings Held in Fiscal 2021: 21


EXECUTIVE COMMITTEE
COMMITTEE MEMBERS KEY RESPONSIBILITIES
David V.
Goeckeler

(Chair)
Kimberly E.
Alexy
Has powers of our Board in management of our business affairs in between meetings of our Board, subject to applicable law or the rules and regulations of the SEC or the Nasdaq Stock Market and specific directions given by our Board
Matthew E.
Massengill

Meetings Held in Fiscal 2021:
None

Equity Awards Committee

Our Board of Directors has also established an Equity Awards Committee as a Board committee with limited delegated authority to approve and establish the terms of restricted stock unit (“RSU”) and performance stock unit (“PSU”) awards granted to eligible participants. Mr. Goeckeler is currently the sole director serving on the committee.

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Board Processes and Policies

Corporate Governance Guidelines and Code of Business Ethics

Our Board of Directors has adopted Corporate Governance Guidelines, which provide the framework for governance of our company and represent our Board’s current views with respect to selected corporate governance issues considered to be of significance to stockholders, including:

The role and responsibilities of our Lead Independent Director

Director nomination procedures and qualifications

Director independence

Policies related to board refreshment and limitations on other board service

Director orientation and continuing education

Annual performance evaluations of our Board and committees

Succession planning and management development

Our Board of Directors has also adopted a Code of Business Ethics that applies to all of our directors, employees and officers, including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The current versions of the Corporate Governance Guidelines and the Code of Business Ethics are available on our website under “Leadership & Governance” at investor.wdc.com. To the extent required by applicable rules and regulations of the SEC or the Nasdaq Stock Market, we intend to promptly disclose future amendments to certain provisions of the Code of Business Ethics, or waivers of such provisions granted to executive officers and directors, on our website under “Leadership & Governance” at investor.wdc.com.

Communication with Management

We have devoted significant effort in recent years to enhancing communication between our Board and management and have adopted the following practices to promote clear, timely and regular communication between directors and management.

Business Updates. Between Board meetings, management provides our Board with updates on our business performance.

Meeting Agendas and Presentations. Our Chairman of the Board and committee Chairs regularly communicate with management to discuss the development of meeting agendas and presentations.

Developing Matters. Between Board meetings, directors receive prompt updates from management on developing matters affecting our company and our business.

Reference Materials. Directors also regularly receive quarterly strategy updates, securities analysts’ reports, investor communications, company publications, news articles and other reference materials.

Director Orientation and Education

All incoming directors participate in an extensive director orientation program, which includes engagement with members of the executive team and senior management to review matters relevant to our business, including technology, finance, internal audit and enterprise risk, corporate governance policies and practices, our Global Code of Conduct and legal matters. We also implemented a mentorship program to pair new directors with longer tenured directors to facilitate a smooth transition onto our Board of Directors. We believe our director orientation program provides new directors with a strong foundation to understand our business. When directors accept new or additional responsibilities on our Board or on committees, they are provided additional orientation and educational opportunities on relevant topics.

Because our Board believes that ongoing director education is vital to the ability of directors to fulfill their roles, directors are encouraged to participate in external continuing director education programs, and we reimburse directors for their expenses associated with this participation. We also invite speakers to present at least annually during Board meetings on director education topics, such as emerging corporate governance matters, the geopolitical environment and cybersecurity.

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Board Evaluation

Our Board of Directors believes that it is important to assess the performance of our Board, its committees and individual directors and to solicit and act upon the feedback received. Accordingly, the Governance Committee oversees an annual performance evaluation process.

                         
BOARD AND COMMITTEE EVALUATIONS

Comprehensive evaluation questionnaires

Each director completes a written questionnaire covering various topics, including:

Effectiveness of Board materials and meetings, including scheduling, discussion and participation

Board involvement in strategy, particularly in response to significant events

Board composition, including size and the mix of skills and experience on our Board

Communication and relationships with management

Management and Board succession planning

Committee performance

Overall Board effectiveness

Discussions with each director

An outside firm compiles and analyzes the results of each written evaluation, which our Governance Committee Chair discusses with each director to solicit further feedback on issues raised.

Results discussed with each committee and the full Board

The full Board and each respective committee discuss the performance evaluation results, and, if determined appropriate, act on the feedback received.

                         
INDIVIDUAL DIRECTOR ASSESSMENTS

As part of the annual performance evaluation process, each director also completes a written self-evaluation covering various topics, including:

Meeting attendance, preparation and participation

Understanding of our business and strategy

Relationships with management and other directors

Our Chairman of the Board discusses individual self-evaluation responses with each director.

                         
EVALUATION RESULTS

Utilized by our Board of Directors in making decisions on:

Board structure

Board and committee responsibilities

Agendas and meeting schedules

Changes in the performance or functioning of our Board

Continued service of individual directors on our Board

In response to director feedback, we:

Developed an annual Board agenda to provide directors with greater visibility into all Board and committee functions throughout the year

Undertook a review of the allocation of risk oversight by our Board and its committees

Communicating with Directors

Our Board of Directors provides a process for stockholders to send communications to our Board or to individual directors or groups of directors. In addition, interested parties may communicate with our Chairman of the Board or Lead Independent Director (who presides over executive sessions of our independent directors) or with our independent directors as a group. Our Board recommends that stockholders and other interested parties initiate any communications with our Board (or individual directors or groups of directors) in writing. These communications should be sent by mail to our Secretary (please see page 83 for contact information). This centralized process will assist our Board

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in reviewing and responding to stockholder and interested party communications in an appropriate manner. The name of any specific intended Board recipient or recipients should be clearly noted in the communication (including whether the communication is intended only for our non-executive Chairman of the Board, Lead Independent Director or for the non-management directors as a group). Our Board of Directors has instructed our Secretary to forward such correspondence only to the intended recipients; however, our Board has also instructed our Secretary, prior to forwarding any correspondence, to review such correspondence and not to forward any items deemed to be of a purely commercial or frivolous nature (such as spam) or otherwise obviously inappropriate for the intended recipient’s consideration. In such cases, our Secretary may forward some of the correspondence elsewhere within our company for review and possible response.

Transactions with Related Persons

Policies and Procedures for Approval of Related Person Transactions

Our Board of Directors has adopted a written Related Person Transactions Policy. The purpose of this policy is to describe the procedures used to identify, review, approve and disclose, if necessary, any transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which: (i) we were, are or will be a participant; (ii) the aggregate amount involved exceeds or is expected to exceed $120,000 in any fiscal year; and (iii) a related person has or will have a direct or indirect material interest. For purposes of the policy, a related person is: (i) any person who is, or at any time since the beginning of our last fiscal year was, one of our directors or executive officers or a nominee to become a director; (ii) any person who is known to be the beneficial owner of more than 5% of our common stock; or (iii) any immediate family member of any of the foregoing persons.

Under the policy, once a related person transaction has been identified, the Audit Committee must review the transaction for approval or ratification. In determining whether to approve or ratify a related person transaction, the committee is to consider all relevant facts and circumstances of the related person transaction available to the committee. The committee may approve only those related person transactions that are in, or not inconsistent with, our best interests and the best interests of our stockholders, as the committee determines in good faith. No member of the committee will participate in any consideration of a related party transaction with respect to which that member or any member of his or her immediate family is a related person.

Certain Transactions with Related Persons

We have not participated in any transaction with a related person since the beginning of fiscal 2021.

Director Compensation

Executive Summary

We believe that it is important to attract and retain exceptional and experienced directors who understand our business, and to offer compensation opportunities that further align the interests of our directors with those of our stockholders. Our Board of Directors works with the independent compensation consultant to the Compensation and Talent Committee to regularly assess the competitiveness and reasonableness of our directors’ compensation. To that end, we established a compensation program for fiscal 2021 for each of our non-employee directors that consisted of a combination of annual cash retainers and RSUs.

We also permit directors to participate in our Deferred Compensation Plan. Any director who is employed by us is not entitled to additional compensation under our director compensation program for serving as a director.

The Compensation and Talent Committee, with the assistance of the independent compensation consultant, regularly reviews our non-employee director compensation and market trends in director compensation (including non-employee director compensation practices at a group of peer companies) and evaluates the competitiveness and reasonableness of the compensation program in light of general trends and practices. The committee makes recommendations based on such review to our Board, which determines whether any changes should be made to our non-employee director compensation program. No changes were made to our non-employee director compensation program from fiscal 2018 through fiscal 2021.

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Fiscal 2021 Director Compensation Program

The following section describes the elements and other features of our director compensation program for fiscal 2021 for non-employee directors.

Non-Employee Director Cash Retainer Fees

Cash retainer fees are paid to our non-employee directors based on Board and committee service from annual meeting to annual meeting and are paid in a lump sum immediately following the annual meeting marking the start of the year. The following table sets forth the schedule of annual cash retainer and committee membership fees for non-employee directors for fiscal 2021.

      Current Annual Fee
Type of Fee ($)
Annual Cash Retainer 75,000
Additional Non-Executive Chairman of the Board Cash Retainer 100,000
Additional Committee Member Cash Retainers
Audit Committee 15,000
Compensation and Talent Committee 12,500
Governance Committee 10,000
Additional Committee Chair Cash Retainers
Audit Committee 25,000
Compensation and Talent Committee 22,500
Governance Committee 12,500

A non-employee director serving as Chair of a Board committee receives both the Additional Committee Chair Cash Retainer and the Additional Committee Member Cash Retainer for that committee. Directors who are appointed to our Board, a Board committee, or to one of our Chair positions noted above during the year are paid a pro rata amount of the annual retainer fees for that position based on service to be rendered for the remaining part of the year after appointment.

Non-employee directors do not receive a separate fee for each Board or committee meeting they attend. We reimburse our non-employee directors for reasonable out-of-pocket expenses incurred to attend each Board or committee meeting.

Non-Employee Director Equity Awards

Under our Non-Employee Director Restricted Stock Unit Grant Program, each of our non-employee directors automatically received for fiscal 2021 an award of RSUs equal in value to $240,000 (or, in the case of our non-employee director serving as Chairman of the Board, $290,000, or, in the case of our Lead Independent Director, $270,000). Non-employee directors receive the awards immediately following the annual meeting of stockholders if he or she has been re-elected as a director at that meeting. In the case of a non-employee director who is newly elected or appointed after the date of the annual meeting, we grant a prorated award of RSUs for the year in which he or she is elected or appointed.

The RSUs granted in fiscal 2021 vest 100% upon the earlier of: (i) November 18, 2021 (the first anniversary of the grant date); and (ii) immediately prior to the first annual meeting of stockholders held after the grant date.

Deferred Compensation Plan for Non-Employee Directors

We permit each non-employee director to defer payment of up to 80% of his or her annual cash compensation in accordance with our Deferred Compensation Plan. We also permit non-employee directors to defer payment of any RSUs awarded under our Non-Employee Director Restricted Stock Unit Grant Program beyond the vesting date of the award. RSUs and other amounts deferred in cash by a director are generally credited and payable in the same manner as amounts deferred by our executive officers and other participants in our Deferred Compensation Plan as further described in the “Fiscal 2021 Non-Qualified Deferred Compensation Table.”

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Director Compensation Table for Fiscal 2021

The table below summarizes the compensation for fiscal 2021 for each of our non-employee directors serving on our Board in fiscal 2021. Mr. Goeckeler was a named executive officer for fiscal 2021 and did not receive any additional compensation for his services as a director during fiscal 2021. Information regarding his compensation for fiscal 2021 is presented in the “Fiscal 2019–2021 Summary Compensation Table” and the related explanatory tables. Dr. Caulfield and Ms. Suzuki joined our Board in July 2021 and did not receive any compensation in fiscal 2021.

Name       Fees Earned or
Paid in Cash
($)
      Stock Awards
($)(1)
      Total
($)
Kimberly E. Alexy 125,000 239,984 364,984
Martin I. Cole 125,000 239,984 364,984
Kathleen A. Cote 97,500 269,981 367,481
Tunç Doluca 87,500 239,984 327,484
Matthew E. Massengill 175,000 289,994 464,994
Paula A. Price 90,000 239,984 329,984
Stephanie A. Streeter 112,500 239,984 352,484
(1)

The amounts shown reflect the aggregate grant date fair value of equity awards granted in fiscal 2021 computed in accordance with Accounting Standards Codification 718 (“ASC 718”) using the closing price of our common stock on the grant date. On the date of our 2020 annual meeting of stockholders (November 18, 2020), each non-employee director at that time was automatically granted 5,648 RSUs (6,825 RSUs for our Chairman of the Board and 6,354 RSUs for our Lead Independent Director).

The following table presents the aggregate number of shares of our common stock covered by stock awards (and corresponding dividend equivalents that may be settled in stock) held by each of our non-employee directors on July 2, 2021:


Name       Aggregate
Number of Unvested
Restricted Stock Units
     Aggregate
Number of Deferred
Stock Units
Kimberly E. Alexy 5,648
Martin I. Cole 5,648
Kathleen A. Cote 6,354 29,188
Tunç Doluca 5,648
Matthew E. Massengill 6,825
Paula A. Price 5,648
Stephanie A. Streeter 5,648

Director Stock Ownership Guidelines

Under our director stock ownership guidelines, directors are generally prohibited from selling any shares of our common stock unless they own “qualifying shares” with a market value of at least $375,000, which include common stock, RSUs, deferred stock units and common stock beneficially owned by the director by virtue of being held in a trust, by a spouse or by the director’s minor children. Shares the director has a right to acquire through the exercise of stock options (whether or not vested) do not count towards the stock ownership requirement.

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EXECUTIVE OFFICERS

Listed below are our executive officers, followed by a brief account of their business experience. Executive officers are normally appointed annually by our Board of Directors at a meeting immediately following the annual meeting of stockholders. There are no family relationships among these officers nor any arrangements or understandings between any officer and any other person pursuant to which an officer was selected.


      DAVID V. GOECKELER  59, CHIEF EXECUTIVE OFFICER
Mr. Goeckeler has served as our CEO since March 2020. Biographical information regarding Mr. Goeckeler is set forth in the section entitled “Corporate Governance Matters—Proposal 1: Election of Directors.”


      ROBERT K. EULAU  59, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
Mr. Eulau joined our company in April 2019 and has served as our Executive Vice President and CFO since May 2019.
Prior to that, Mr. Eulau served as CEO and director of Sanmina Corporation, an electronics manufacturing services provider, from October 2017 to August 2018, and as its executive vice president and CFO from September 2009 to October 2017. From March 2006 to June 2008, Mr. Eulau served as executive vice president, chief operating officer and CFO of Alien Technology Corporation, a developer of radio frequency identification products, and as senior vice president and CFO of Rambus Inc., a technology licensing company, from May 2001 to March 2006. Mr. Eulau previously served over 15 years with Hewlett Packard Company in various leadership roles, including vice president and CFO of its business customer organization and vice president and CFO of its computing products business.


      SRINIVASAN SIVARAM  61, PRESIDENT, TECHNOLOGY AND STRATEGY
Dr. Sivaram has served as our President, Technology and Strategy, since August 2019, having previously served as our Executive Vice President, Silicon Technology and Manufacturing, from November 2017 to August 2019 and our Executive Vice President, Memory Technology, from May 2016 to November 2017.
Prior to that, Dr. Sivaram served as SanDisk’s executive vice president, memory technology, from February 2015 until our acquisition of SanDisk in May 2016, senior vice president, memory technology, from June 2013 to February 2015 and vice president, technology, from January 2006 to March 2007. Dr. Sivaram previously served as chief operating officer for Matrix Semiconductor, Inc. from November 1999 until it was acquired by SanDisk in January 2006. From July 1986 to October 1999, Dr. Sivaram held various engineering and management positions at Intel Corporation. Dr. Sivaram also served as CEO of Twin Creeks Technologies, Inc. from January 2008 to December 2012.

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      ROBERT W. SODERBERY  55, EXECUTIVE VICE PRESIDENT AND GENERAL MANAGER, FLASH BUSINESS
Mr. Soderbery has served as our Executive Vice President and General Manager, Flash Business, since September 2020.
Prior to that, Mr. Soderbery served as president and board member of UpLift, Inc., a travel finance company, from May 2017 to September 2020. He has also served as an advisor to Rockwell Automation, Inc. since May 2017 and as managing member of Acclimate Ventures LLC, a consulting, advisory and investment firm, since October 2016. Mr. Soderbery previously served as senior vice president and general manager, enterprise products, and in other senior leadership roles at Cisco Systems from October 2009 to October 2016. Prior to that, he served as senior vice president, storage and availability management group, and in other leadership roles at Symantec Corporation.


      MICHAEL C. RAY  54, EXECUTIVE VICE PRESIDENT, CHIEF LEGAL OFFICER AND SECRETARY
Mr. Ray has served as our Executive Vice President, Chief Legal Officer and Secretary since November 2015, having previously served as our Senior Vice President, General Counsel and Secretary from April 2011 to November 2015, our Vice President, General Counsel and Secretary from October 2010 to April 2011, and in a number of positions in our legal department, ranging from Senior Counsel to Vice President, Legal Services, from September 2000 to October 2010.
Prior to that, Mr. Ray served as corporate counsel for Wynn’s International, Inc. from September 1998 to September 2000. Mr. Ray previously served as a judicial clerk to the U.S. District Court, Central District of California, and practiced law at O’Melveny & Myers LLP.

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EXECUTIVE COMPENSATION

PROPOSAL 2
ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Compensation and Talent Committee and our Board of Directors have designed an executive compensation program that provides:

Strong linkage between management and stockholders’ interests
Excellent pay for performance alignment and rewards for long-term value creation
Robust oversight by our Board and the Compensation and Talent Committee
Our Board of Directors recommends a vote FOR this Proposal 2 to approve on an advisory basis the named executive officer compensation

Proposal Details

You have the opportunity to cast a non-binding, advisory “Say on Pay” vote every year as required by Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Please read the section entitled “Executive Compensation—Compensation Discussion and Analysis” (and the various compensation tables and narratives accompanying those tables included under “Executive Compensation Tables and Narratives”) for information necessary to inform your vote on this Proposal 2.

Board Recommendation and Vote Required for Approval

Board Recommendation

Our Board of Directors recommends that you vote FOR approval, on a non-binding advisory basis, of our executive compensation program for our named executive officers as disclosed in this Proxy Statement:

RESOLVED, that the compensation paid to the named executive officers, as disclosed in this Proxy Statement pursuant to the SEC’s executive compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and the narrative discussion that accompanies the compensation tables), is hereby approved.

The next advisory vote on the compensation of our named executive officers will occur at our 2022 annual meeting of stockholders.

Vote Required for Approval

The affirmative vote of a majority of the shares of our common stock represented in person or by proxy at the Annual Meeting and entitled to vote on this proposal is required to approve this Proposal 2. You may vote FOR, AGAINST or ABSTAIN on this proposal. Proxies received by our Board of Directors will be voted FOR this Proposal 2 unless specified otherwise.

While this vote is nonbinding on our company and our Board of Directors and will not be construed as overruling a decision by our company or our Board or creating or implying any additional fiduciary duty for our company or our Board, our Board and the Compensation and Talent Committee value the opinions of our stockholders and will consider the outcome of the vote when making future compensation decisions for named executive officers under our executive compensation program.

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Executive Compensation

Report of the Compensation and Talent Committee

The Compensation and Talent Committee, comprised of independent directors, reviewed and discussed the following Compensation Discussion and Analysis with management. Based on that review and discussion, the committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in the Proxy Statement for our 2021 annual meeting of stockholders and incorporated by reference into our 2021 Annual Report on Form 10-K.

THE COMPENSATION AND TALENT COMMITTEE

MARTIN I. COLE KATHLEEN A. COTE TUNÇ DOLUCA STEPHANIE A. STREETER
Chair

Compensation and Talent Committee Interlocks and Insider Participation

Each of the committee members whose names appear on the Compensation and Talent Committee Report above, other than Ms. Streeter, were members of the committee during all of fiscal 2021. Ms. Streeter was appointed to the committee in September 2021. All members of the committee during fiscal 2021 were independent directors and none of them were our employees or former employees or had any relationship with us requiring disclosure of certain transactions with related persons under SEC rules. There are no compensation committee interlocks between us and other entities in which one of our executive officers served on the compensation committee (or equivalent body) or the board of directors of another entity whose executive officer(s) served on the committee or our Board of Directors.

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Executive Compensation

Compensation Discussion and Analysis

Our Named Executive Officers

When we refer to our “named executive officers,” we mean:

DAVID V.
GOECKELER
Chief Executive
Officer
      ROBERT K. EULAU
Executive Vice
President and Chief
Financial Officer
      SRINIVASAN
SIVARAM
President,
Technology
and Strategy
      ROBERT W.
SODERBERY
Executive Vice
President and
General Manager,
Flash Business
      MICHAEL C. RAY
Executive Vice
President, Chief
Legal Officer
and Secretary

Contents

Fiscal 2021 Overview       39
Fiscal 2021 Philosophy, Objectives and Process 40
Fiscal 2021 Decisions and Outcomes 44
Fiscal 2022 Decisions 52
Other Program Features and Policies 53

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Executive Compensation

Fiscal 2021 Overview

Business Highlights

Our company executed on its fiscal 2021 targets despite headwinds associated with the global pandemic and restrictions on sales to certain entities in China. This dynamic environment required agility from our management team. We implemented a new business unit structure to bring greater focus to our flash and HDD businesses and to strengthen performance and business outcomes. Our updated organizational structure helped the management team deliver on our fiscal 2021 targets. The charts below summarize our performance in key financial and operational metrics.

                                                                                                                                      
NON-GAAP OPERATING INCOME(1) FLASH EXABYTES SHIPPED HDD EXABYTES SHIPPED
($M) (Exabytes) (Exabytes)
(1) See Appendix A to this Proxy Statement for a reconciliation of GAAP operating income to non-GAAP operating income.

Paying for Performance: Fiscal 2021 Performance Results and Payouts

Our incentive plans’ performance reflects our financial and market performance. The fiscal 2021 short-term incentive plan (“STI”) paid out at an average of 149% of target for our named executive officers, reflecting our strong financial and operating performance this past year in the context of the global pandemic. Despite a rebound in our stock price during fiscal 2021, our total stockholder return (“TSR”) was low relative to many of our technology peers and the payout on the fiscal 2019–2021 PSUs under our long-term incentive (“LTI”) program reflects this lower performance, with our named executive officers receiving a payout at 41% of target. The incentive plan payouts align with the Compensation and Talent Committee’s pay-for-performance philosophy. The committee did not adjust outstanding incentive awards to address any COVID-19 impacts or government-imposed restrictions on our sales to entities within China.

Award       Fiscal 2021 Payouts       Page
STI Payout for Fiscal 2021
Fiscal 2021 STI(1) 149% 47
LTI Payout for Fiscal 2021
Fiscal 2019–2021 PSUs 41% 51
(1) STI payout represents average payout for our named executive officers based on our corporate performance and each named executive officer’s individual performance component payout.

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Executive Compensation

Our Compensation Principles

 
WHAT WE DO
Pay for performance by tying a substantial portion of executive compensation to performance goals
Actively engage with stockholders and consider their feedback in the future design of our executive compensation program
Link our executive compensation program to our long-term corporate strategy and sustainable stockholder value creation
Use a mix of performance measures, cash- and equity-based vehicles, and short- and long-term incentive opportunities that hold our executive officers accountable for executing on our long-term corporate strategy
Cap maximum vesting or payout levels under our incentive awards, which are aligned with competitive market practices
Engage an independent compensation consultant to evaluate and advise the Compensation and Talent Committee on our executive compensation program design and pay decisions
Evaluate executive compensation data and practices of our peer group companies as selected annually by the Compensation and Talent Committee with guidance from the independent compensation consultant
Maintain executive stock ownership guidelines
Maintain a compensation recovery (clawback) policy applicable in the event an officer’s misconduct leads to an accounting restatement and provide for forfeiture of incentives in the event of an officer’s termination of employment due to misconduct
Provide limited executive perquisites
WHAT WE DON’T DO
No tax gross-up payments in connection with severance or change in control pay
No single trigger vesting of equity awards upon a change in control
No repricing of stock options without stockholder approval (other than equitable adjustments permitted under our plans)
No hedging, pledging or short-sale or derivative transactions by executive officers or directors
No dividend equivalent payments on equity awards until they are earned and vested
 

Fiscal 2021 Philosophy, Objectives and Process

Our compensation philosophy is designed to accomplish three goals: (i) attract, retain and motivate premier talent, (ii) pay for performance and (iii) align the interests of our executives with our stockholders. The summary below provides the key objectives of our program:

Attract, retain and motivate premier talent necessary to accelerate our growth and drive financial and market performance
Provide competitive target compensation relative to the technology industry in which we compete for business and talent
Encourage accountability by tying a substantial portion of each executive officer’s compensation opportunity to individual, corporate and market-based objectives that we expect to create long-term value for our stockholders
Pay for performance by providing a substantial portion of compensation in the form of at-risk, variable incentive awards that reward superior individual, corporate and market performance and that reduce pay for underperformance
Align the interests of our executives with our stockholders through our pay-for-performance compensation design and by granting long-term equity awards that include multi-year performance and/or service requirements

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Executive Compensation

Elements of Our Fiscal 2021 Executive Compensation Program

We believe our emphasis on variable compensation is aligned with our focus on operating excellence, allowing our executive compensation levels to reflect our performance.

Our actual pay positioning varies by executive, considering peer group and survey market data, competitive pay levels, each executive’s role, past performance, scope of responsibility and expected contributions.

In addition to the elements reflected below, we also provide executives with relatively few perquisites and certain other indirect benefits, as described in the section below entitled “Other Program Features and Policies.”

                 Element of Our
CEO’s Fiscal 2021
Target Total Direct
Compensation
     Element of Our Other
Named Executive
Officers’ Fiscal 2021
Target Total Direct
Compensation
     Characteristics      Purpose      Performance Link/Key Benchmark
    BASE SALARY
Fixed compensation
Attracts, retains and motivates premier executive talent
Compensates executives for sustained individual performance
Competitive with market and industry practices
Adjusted for experience, responsibility, potential and performance
   
STI
Annual performance-based cash incentive compensation
Motivates executives to accelerate our growth and drive financial performance
Encourages accountability by rewarding achievement of individual and corporate objectives
Non-GAAP operating income (50% weighting)
Flash exabytes shipped (12.5% weighting)*
HDD exabytes shipped (12.5% weighting)*
Individual Performance (25% weighting)*
 
LTI

PSUs

Performance-based equity compensation
3-year performance period for 100% of award*
60% of our CEO’s LTI are PSUs; 50% of our other named executive officers’ LTI are PSUs
Encourages accountability by rewarding achievement of corporate and market-based objectives
Creates direct alignment with stockholder interests by focusing executives on long-term value creation through multi-year financial objectives
Revenue and non-GAAP EPS goals are each weighted at 25%; financial metrics are subject to automatic adjustment pursuant to a relative market performance adjustment (“MPA”) factor (as described on page 49 below)
Relative TSR goal is weighted at 50%; for PSUs based on relative TSR, payout capped at 100% if absolute TSR is negative
   
RSUs
Variable long-term equity compensation
Vests ratably over 4 years
Provides alignment with stockholder interests by focusing executives on long-term value creation
Provides retention value
Value based on stock price
   
* New for fiscal 2021

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Executive Compensation

Process for Determining Executive Compensation

The Compensation and Talent Committee reviews and determines compensation for our executive officers. The committee reviews the performance and compensation of our executive officers on an annual basis and at the time of hiring, promotion or other change in responsibilities. The committee’s annual review typically occurs near the end of the prior fiscal year and beginning of the new fiscal year.

The committee considers stockholders’ views and input received from our stockholder engagement efforts when making determinations regarding our compensation programs. Stockholders supported our compensation programs last year with the advisory vote on executive compensation receiving the support of 92% of the votes cast.

The committee’s executive compensation decisions are informed by several factors, including:

EXTERNAL AND INTERNAL FACTORS

Our compensation philosophy and objectives
Our pay positioning relative to our peer group
The executive’s role, experience, performance and contributions
Internal pay equity
Succession planning and retention objectives
Current and historical company performance and strategic and financial goals
Market performance and general economic conditions
    

COMPENSATION CONSULTANT

Views from the independent compensation consultant
Survey and peer group company market data prepared by the independent compensation consultant
         
    

MANAGEMENT

Our CEO’s recommendations for other executive officers (not including our CEO)
Our CFO’s (or designee’s) input on financial targets for our performance-based executive compensation program, data regarding the impact of the program on our financial results and actual results against targets
Internal and external compensation data provided by our Chief People Officer (or designee)
         
    

STOCKHOLDERS

Feedback received during stockholder engagement

For fiscal 2021, the Compensation and Talent Committee retained Willis Towers Watson (“WTW”) as its independent compensation consultant. WTW reports directly to the committee. WTW also communicated with management to gather information and review management proposals as needed. WTW attended all regularly-scheduled meetings of the committee during fiscal 2021 and their responsibilities for fiscal 2021 generally included:

Reviewing and advising on executive compensation, including the performance measures to be used under the executive compensation program

Providing recommendations regarding the composition and selection of our peer group companies

Analyzing pay survey data

Providing advice regarding executive compensation practices and trends

Advising on the Compensation and Talent Committee’s charter

The committee assessed the independence of WTW pursuant to applicable rules and regulations of the SEC and the Nasdaq Stock Market and concluded that the engagement of WTW did not raise any conflicts of interest during fiscal 2021 and currently does not raise any conflicts of interest.

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Comparative Market Data

The Compensation and Talent Committee determines the composition of our peer group and reevaluates this group on an annual basis with input from WTW.

For fiscal 2021, market data was also collected from the Radford Executive Survey, an independently published survey, and WTW’s High-Tech Compensation Survey. The survey data was filtered for high-technology companies and adjusted to screen for revenue size. With input from the independent compensation consultant, the committee uses market data and industry practices during its annual review of the competitiveness of compensation levels and the appropriate mix of compensation elements for our named executive officers. This market data provided the committee a reference point, which was one of several factors that it used to make compensation decisions during its fiscal 2021 annual compensation review.

Fiscal 2021 Peer Group Companies

The peer group for fiscal 2021 consists of technology companies that compete with us for talent and have the size (primarily based on revenue) and business characteristics that we believe are comparable to ours. Like us, most companies included in our fiscal 2021 peer group are included in the Dow Jones U.S. Technology Hardware & Equipment Index.

In choosing peer group companies, the Compensation and Talent Committee focused primarily on industry, talent market and revenue size. Revenue is a commonly used proxy for organizational size and complexity and is relatively stable from year-to-year, making it a valuable metric when selecting peers for compensation purposes. As part of its decision process, the committee also references other metrics for informational purposes.

 
 
 

Advanced Micro Devices, Inc.

Applied Materials, Inc.

Broadcom Inc.

Cisco Systems, Inc.

Flex Ltd

Hewlett Packard Enterprise Company

HP Inc.

Intel Corporation

     

Lam Research Corporation

Micron Technology, Inc.

Motorola Solutions, Inc.

NetApp, Inc.

NVIDIA Corporation

ON Semiconductor Corporation

QUALCOMM Incorporated

Seagate Technology plc

Texas Instruments Incorporated

      WESTERN DIGITAL COMPARED TO PEER GROUP
(1) Represents annual revenue for the most recent fiscal year for which data was available through SEC filings as of August 31, 2021.

Peer Group Changes for Fiscal 2022

During fiscal 2021, following the Compensation and Talent Committee’s annual review of our peer group with WTW, and reflecting input from our investors, the committee revised our peer group for fiscal 2022 by removing Intel Corporation and Flex Ltd. and adding Analog Devices, Inc. The committee removed Intel Corporation due to its large size relative to Western Digital in terms of revenue and market capitalization and removed Flex Ltd. due to its different business focus as a contract manufacturer with a much larger employee population and manufacturing footprint than Western Digital. The committee added Analog Devices, Inc. due to its business model as an in-house semiconductor manufacturer and revenue size relative to Western Digital.

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Executive Compensation

Fiscal 2021 Decisions and Outcomes

Base Salary

In August 2020, the Compensation and Talent Committee approved a base salary increase for Dr. Sivaram to reflect his strong performance, his critical role in our flash business and his key relationships with our joint venture partner.

Named Executive Officer       Base Salary Level(1)
($)
      Increase from
Fiscal 2020
David V. Goeckeler 1,250,000 0%
Robert K. Eulau 715,000 0%
Srinivasan Sivaram 750,000 7%
Robert W. Soderbery(2) 710,000
Michael C. Ray 625,000 0%
(1) Table reflects annualized base salary in effect at the end of fiscal 2021 for each named executive officer.
(2) Mr. Soderbery joined Western Digital in September 2020.

Short-Term Incentives

Fiscal 2021 Target Incentive Level Opportunities

In August 2020, the Compensation and Talent Committee approved an increase in Dr. Sivaram’s target incentive opportunity in connection with his base salary adjustment described above. The increased target enhances Dr. Sivaram’s performance compensation opportunity and reflects the committee’s determination that he performs a critical role for our company and was a strong performer.

Named Executive Officer       Annual Target
Incentive Opportunity
(as Percentage of Base Salary)
      Increase from
Fiscal 2020
David V. Goeckeler 175% 0%
Robert K. Eulau 110% 0%
Srinivasan Sivaram 120% 9%
Robert W. Soderbery 120%
Michael C. Ray 85% 0%

Fiscal 2021 Design and Performance

FISCAL 2021 DESIGN

The fiscal 2020 STI plan funded based on a single metric: non-GAAP net income. The Compensation and Talent Committee updated the STI plan for fiscal 2021 to better align with our core operations and to add operational metrics and an individual performance component, as reflected below.

Non-GAAP
Operating Income

50% Weighting

+

Flash Exabytes
Shipped

12.5% Weighting

+

HDD Exabytes
Shipped

12.5% Weighting

+

Individual
Performance

25% Weighting

=

Individual
Final Payout

(Capped at
200%)


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In updating the STI plan for fiscal 2021, the committee considered the following factors:

Non-GAAP operating income better reflects our core operating results than non-GAAP net income by excluding interest and taxes.

Exabytes shipped provides the executive team with tangible operational goals and the metric aligns with our short-term strategy. This metric is a primary driver for maintaining our market share and, given our fixed assets, shipping more exabytes improves our utilization of those assets. The inclusion of profit metrics in both the STI plan and LTI plan helps ensure that management does not ship exabytes unprofitably to maximize this metric.

The individual performance component provides the committee with the ability to differentiate performance among executives and reward our strongest contributors. Weighting the metric at 25% ensures that the majority of each executive’s incentive opportunity is tied to financial and corporate objectives.

FISCAL 2021 CORPORATE PERFORMANCE

                         
NON-GAAP OPERATING INCOME(1)
($M)


Non-GAAP Operating Income(1) (50% Weighting)
Performance STI Payout Performance
Performance Achievement       (% Target)       (% Target)       ($ millions)
Maximum              130 %          200 %           $ 2,074
Target 100 % 100 % $ 1,595
Threshold 75 % 50 % $ 1,196
Actual 120 % 165 % $ 1,906
(1) See Appendix A to this Proxy Statement for a reconciliation of GAAP operating income to non-GAAP operating income.

                         
FLASH EXABYTES SHIPPED


Flash Exabytes Shipped (12.5% Weighting)
Performance STI Payout Performance
Performance Achievement       (% Target)       (% Target)       (Exabytes)
Maximum               105 %            200 % 75.8
Target 100 % 100 % 72.2
Threshold 95 % 50 % 68.6
Actual 102 % 134 % 73.4

                         
HDD EXABYTES SHIPPED


HDD Exabytes Shipped (12.5% Weighting)                  
Performance STI Payout Performance
Performance Achievement (% Target) (% Target) (Exabytes)
Maximum                  110 %          200 % 544
Target 100 % 100 % 495
Threshold 90 % 50 % 445
Actual 94 % 70 % 467

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Executive Compensation

The weighted average payout for the corporate metrics is 144% of target:

Non-GAAP Operating       Flash Exabytes       HDD Exabytes       Aggregate Corporate
Income Payout % Shipped Payout % Shipped Payout % Payout %
(50% Weighting) (12.5% Weighting) (12.5% Weighting) (75.0%)
165% 134% 70% 144%

FISCAL 2021 INDIVIDUAL PERFORMANCE COMPONENT (“IPC”)

In early fiscal 2021, the Compensation and Talent Committee reviewed with our CEO the approach to managing and assessing the IPC for named executive officers. The committee agreed to split the measures into an equal weight for leadership and execution. Our named executive officers (other than our CEO) worked with our CEO to prepare draft individual goals in early fiscal 2021 and management submitted those goals for review by the committee; the committee provided feedback to our CEO on those goals and agreed to evaluate each named executive officer’s IPC performance after the close of fiscal 2021.

Prior to the committee meeting that was designated to approve IPC payout percentages, our CEO submitted recommended IPC payout percentages for each named executive officer, excluding himself. Our CEO’s recommendations included his assessment of each named executive officer’s performance relative to the executive’s fiscal 2021 IPC goals and included our CEO’s narrative assessment of that executive’s performance. Our CEO also submitted a self-evaluation of his performance relative to his fiscal 2021 key objectives for the committee‘s review.

In an August 2021 meeting, the committee reviewed and discussed with our CEO the proposed IPC payout percentage for each named executive officer, excluding our CEO, under the fiscal 2021 STI plan. The committee discussed our CEO’s fiscal 2021 performance in executive session without participation of any members of our management team. Following the executive session, the committee approved IPC payout percentages for each of our named executive officers as outlined below.

Mr. Goeckeler:

Prior to the committee meeting to approve IPC payout percentages, our Compensation and Talent Committee Chair met with each non-employee member of our Board of Directors to solicit input on Mr. Goeckeler’s fiscal 2021 performance relative to his key objectives for the year. This input was then discussed by our Board and, based on feedback received during those discussions, the committee set Mr. Goeckeler’s IPC rating in the “exceeds” category, consistent with our Board’s view of his contributions to Western Digital’s strong performance during the fiscal year. In making this determination, the committee focused on the following factors:

Our 25% increase in non-GAAP operating income and 50% increase in non-GAAP EPS relative to fiscal 2020

Mr. Goeckeler’s strong leadership in navigating a global pandemic that impacted our supply chain and our customers

Mr. Goeckeler’s strong leadership in navigating a geopolitical environment in which we were unable to sell products to certain customers in China

Mr. Goeckeler reorganized Western Digital to drive agility and business results for our flash and HDD portfolios and the committee determined the reorganization helped us deliver strong fiscal 2021 financial and operational results and positioned our company for future success

Mr. Goeckeler attracted and retained top talent to execute on our business strategy within the new business unit structure

Mr. Goeckeler managed well the relationship with key customers and partners, including our important joint venture partner (Kioxia Holdings Corporation)

In evaluating our other named executive officers, the committee considered the following factors:

Mr. Eulau:

Built capability to support our new business unit structure and related reporting

Drove progress on our entity rationalization efforts, including the deployment of critical business information systems


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Dr. Sivaram:

Enabled, supported and mentored new leaders coming into our company to accelerate their effectiveness in the organization, including the leaders of our new business units

Continued the development of a market-leading flash storage roadmap

Played an active and critical role in our relationship with Kioxia with respect to the joint venture partnership

Took an increased role in investor communications to the benefit of our company

Mr. Soderbery:

Exhibited strong leadership in our flash business unit that allowed us to transition smoothly to our new business model

Quickly built a high-performing team to accelerate our flash business unit performance

Built a NAND portfolio strategy and investment plan to optimize growth and profitability

Mr. Ray:

Led Western Digital to recognition by the Ethisphere Institute for the third year in a row as one of the World’s Most Ethical Companies

Played an active and critical role in our relationship with Kioxia with respect to the joint venture partnership

Established a new Government Relations capability to the benefit of our company

After assessing these factors, the committee approved the following IPC payout percentages:

Named Executive Officer       IPC Target Weighting       IPC Payout %(1)
David V. Goeckeler                            25 %                 180 %
Robert K. Eulau 25 % 113 %
Srinivasan Sivaram 25 % 180 %
Robert W. Soderbery 25 % 175 %
Michael C. Ray 25 % 163 %
(1) Each named executive officer’s IPC payout could range from 0% to 200% of target.

FISCAL 2021 STI PAYOUTS

Corporate Payout % IPC Payout % Aggregate Payout STI Payout
Named Executive Officer       (75% Weighting)       (25% Weighting)       %       ($)
David V. Goeckeler                          144 %                   180 %                     153 % $ 3,346,875
Robert K. Eulau 144 % 113 % 136 % $ 1,070,623
Srinivasan Sivaram 144 % 180 % 153 % $ 1,366,408
Robert W. Soderbery(1) 144 % 175 % 152 % $ 994,546
Michael C. Ray 144 % 163 % 149 % $ 789,570
(1) Mr. Soderbery participated in the fiscal 2021 STI plan on a prorated basis.

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Executive Compensation

Long-Term Incentives: Fiscal 2021 Equity Awards

Fiscal 2021 LTI Awards

Our named executive officers received the following LTI awards in September 2020. Each named executive officer’s fiscal 2021 LTI award consists of a mix of PSUs and RSUs. Except for Mr. Soderbery’s sign-on RSU award, the RSUs are scheduled to vest in four equal annual installments. Mr. Soderbery’s sign-on RSU award is scheduled to vest in two equal annual installments. The vesting provisions of the PSUs are described below.

Total Awarded
Grant Value LTI Vehicle Mix
Named Executive Officer ($)(1) PSUs RSUs
David V. Goeckeler       12,000,000          60 %         40 %
Robert K. Eulau 3,575,000 50 % 50 %
Srinivasan Sivaram 3,750,000 50 % 50 %
Robert W. Soderbery(2) 9,050,000 20 % 80 %
Michael C. Ray 2,187,500 50 % 50 %
(1) The differences between the target grant values approved by the Compensation and Talent Committee (as reflected in the table above) and the grant date fair values of the awards as determined for financial reporting purposes (as reflected in the Summary Compensation Table and the Grants of Plan-Based Awards Table below) are attributable to the use of a Monte Carlo simulation to determine the grant date fair value of the relative TSR PSUs for financial reporting purposes.
(2) Mr. Soderbery’s fiscal 2021 LTI award included an annual LTI award of $3,550,000 (50% PSUs, 50% RSUs) and a sign-on RSU award of $5,500,000. In approving Mr. Soderbery’s sign-on RSU, the Compensation and Talent Committee intended to accelerate Mr. Soderbery’s transition into our equity program and provide sufficient equity holding power through his first two years before his PSU awards begin to vest. Given the strong market for talent in the technology industry, the committee believes it is important that our key executives have sufficient retention hold over the next few years. Mr. Soderbery also forfeited substantial equity held at his prior employer to join Western Digital and his sign-on awards helped offset the potential upside gains that he left behind to join our company.

Fiscal 2021 Retention RSU Awards

In April 2021, the Compensation and Talent Committee approved retention RSUs for Dr. Sivaram and Mr. Ray in the amounts of $4,000,000 and $1,500,000, respectively. The RSUs vest in substantially equal annual installments over two years and the award amounts align with market data for retention awards granted to comparable executives. No other executive officers received retention awards during fiscal 2021. In approving the retention awards for Dr. Sivaram and Mr. Ray, the committee considered the following factors:

Dr. Sivaram

Dr. Sivaram serves in a critical role for our flash technology strategy, focusing on technology developments that will enhance our product portfolio and maintain our position as a market leader in this space.

Dr. Sivaram also plays a key role with Kioxia with his deep operational knowledge and expertise and key relationships with Kioxia.

The committee periodically reviews the value of equity awards held by our executives that are scheduled to vest over the next few fiscal years and Dr. Sivaram’s equity holding during the next two fiscal years was low relative to other executive officers within Western Digital. Lower equity vesting values makes it easier for a competitor to “buy out” our executives’ current equity holdings with a sign-on award.

We face increased competition for engineering talent following the pandemic, with many of our competitors for talent able to offer substantial equity grants given their high valuations.

Given the foregoing factors, the committee approved a retention award for Dr. Sivaram that increases the holding power of his equity awards during the next two fiscal years.


Mr. Ray

Mr. Ray has critical operational knowledge regarding Western Digital legal constructs and business relationships, including the relationship with Kioxia.

Most of our executive team joined Western Digital since the beginning of fiscal 2018 and Mr. Ray’s long tenure with our company (exceeding 20 years) and key operational knowledge and business relationships are invaluable to the executive team.


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As with Dr. Sivaram, Mr. Ray’s equity holding power over the next few fiscal years was lower than other executive officers.
As with engineering talent, we face increased competition for key talent in other areas of our business, including key executive talent.
Given the foregoing factors, the committee approved a retention award for Mr. Ray that increases the holding power of his equity awards during the next two fiscal years.
The retention award approved in April 2021 differs from the compensation enhancements the committee approved for Mr. Ray in August 2019 to induce him to remain with our company after he received an employment offer from another large technology company.

Named Executive Officer       Total Awarded
Grant Value
($)
Srinivasan Sivaram 4,000,000
Michael C. Ray 1,500,000

Long-Term Incentives: PSU Design and Performance

Fiscal 2021–2023 PSU Awards

The fiscal 2021–2023 PSU awards include the following performance metrics, each of which is measured over a three-year period covering fiscal 2021 through fiscal 2023.

The Compensation and Talent Committee selected these performance metrics because revenue focuses our executives on sustainable long-term corporate growth, non-GAAP EPS measures the effectiveness of our capital allocation strategy, and the relative TSR metric aligns our executives with our stockholders by rewarding our named executive officers based on our stock performance relative to the broader equities market.

Financial Metrics. The PSU financial metrics are cumulative annual targets established at grant and measured over the three-year performance period. The cumulative PSU financial goals are subject to a pre-established, objective adjustment at the end of the performance period in a relative proportion (up or down) by which the total market for our products (measured by revenue) during the period exceeds or falls short of the total market forecast approved by the committee at the time the goals are established, as reported by industry analysts. We refer to the relative market performance adjustment in this Proxy Statement as “relative MPA.”

Relative MPA is a pre-established modifier approved at the time the performance goals are set by the committee and not subject to discretion as to whether the adjustment should be applied.
Rationale: We believe the relative MPA is an important element of our PSU program to help ensure we are paying for performance relative to the market demand and opportunity available to us and not due to unforeseen swings in the market. For example, if there is a significant demand in the market that was not forecasted at the beginning of the performance period when the committee approved the performance goals, the adjustment factor would automatically increase the goals – and make them harder to achieve – to ensure that our executives are not benefitting from the unforeseen upswing in demand.

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Relative TSR Metric. The relative TSR metric measures our stock performance, assuming reinvestment of dividends to the extent there are any distributed during the period, relative to S&P 500 constituent companies as of the beginning of the performance period. The percentage of relative TSR PSUs that can be earned at the end of the three-year performance period is set forth below.

Rationale: The committee believes that S&P 500 constituent companies is the right peer group for the fiscal 2021–2023 PSUs because it compares our performance relative to the broader equity market, which motivates our executives with a relative TSR peer group that is visible and provides them with a clear line of sight. Our prior custom TSR peer group had a much smaller number of companies than the S&P 500 constituents and consolidation within that custom TSR peer group impacted our performance and payout curves disproportionately relative to a broader TSR peer group such as the S&P 500 constituents. Among the companies in our peer group that use relative TSR in their LTI programs, S&P 500 constituents is the most common TSR peer group.

Western Digital’s Relative TSR Results for the Measurement Period       Portion of the PSUs Subject to the
Award that Become Eligible to Vest
75th percentile or greater 200%
50th percentile 100%
25th percentile 25%
Less than the 25th percentile 0%

Straight-line interpolation is used if performance falls between two points. Additionally, if our absolute TSR is negative during the performance period, the relative TSR PSUs will be capped at a target payout (100%).

Performance of Prior-Year PSUs

Fiscal 2019-2021 PSUs and Fiscal 2020-2022 PSUs. The PSUs granted in each of fiscal 2019 and fiscal 2020 include the following design:

Financial Performance Metrics (50% Weighting)
Each of the fiscal 2019–2021 and fiscal 2020–2022 PSUs include a mix of two-year and three-year performance periods for the financial metrics (revenue and non-GAAP EPS), with a three-year service period to vest in the award.
The financial metrics are subject to the relative MPA modifier, similar to the fiscal 2021–2023 PSUs.
The actual market for our products was lower than anticipated when the fiscal 2019–2021 and fiscal 2020–2022 PSU goals were established, thus applying the relative MPA modifier there is a decrease in the target level of performance for both revenue and non-GAAP EPS metrics relative to the targets established at grant for the PSU performance periods that ended in fiscal 2021.
As a basis of comparison, due to a higher than projected total market for our products as of the grant date, the relative MPA modifier incorporated into PSUs that vested in fiscal 2018 and fiscal 2019 increased the financial targets relative to those established at grant.
Relative TSR Metric (50% Weighting)
The PSUs include a three-year TSR metric that measures our stock performance, assuming reinvestment of dividends, relative to a bespoke peer group consisting of the constituents of the PHLX Semiconductor Sector Index and the S&P 500 Technology Hardware & Equipment Index. In each case, the constituents were as of the beginning of the performance period.

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Performance Periods and Payouts

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022
Fiscal 2019-2021
PSUs
2-Year Performance Period (12.5%)
Performance period ended in fiscal 2020 and the
Compensation and Talent Committee certified payout at 92%
of target, as described in our 2020 proxy statement.
3-Year Performance Period (87.5%) Performance Period Ended in Fiscal 2021
The Compensation and Talent Committee certified payout in August 2021 for financial metrics
at 79% of target and the relative TSR metric at 0%, as described below.
Fiscal 2020-2022
PSUs
2-Year Performance Period (12.5%)
Performance Period Ended in Fiscal 2021
The Compensation and Talent Committee certified payout in
August 2021 at 40% of target, as described below.
3-Year Performance Period (87.5%)
Performance period ends in fiscal 2022.

                         
FISCAL 2019-2021 PERFORMANCE PERIOD ACHIEVEMENT

Three-Year Financial Metrics

Financial Metrics (37.5% Weighting)         Threshold
(50%)
($)
        Original
Target
(100%)
($)
        Maximum
(200%)
($)
        Target After
Applying Relative
MPA Modifier
(100%)
($)
        Actual
Performance
($)
        Achievement
Rate
        Payout %
3-Year Revenue (18.75%) (in millions) 55,284 65,040 74,796 53,298 50,227 94% 86%
3-Year Non-GAAP EPS (18.75%)(1) 25.27 33.69 43.80 14.77 12.43 84% 72%
Weighted Payout: 79%
(1) See Appendix A to this Proxy Statement for a reconciliation of GAAP EPS to non-GAAP EPS.

Three-Year Relative TSR Metric

Relative TSR
(50% Weighting)
        Custom Peer Group
Relative TSR
(1)
        Relative TSR Units
Payout %
        WDC 3-Year Relative TSR         WDC Percentile
Relative to Custom
Peer Group
        Payout %
75th percentile 162.39% 200%
50th percentile 82.02% 100% -5.28% 2nd percentile 0%
25th percentile 35.52% 25%
(1) The custom peer group included constituents of the PHLX Semiconductor Sector Index and the S&P 500 Technology Hardware & Equipment Index, each as constituted at the beginning of fiscal 2019. The peer group included 45 companies as of the grant date.

                         
FISCAL 2019-2021 PSUs: PAYOUTS

Fiscal 2019–2021 PSUs         2-Year
Financial Metrics
(1)
        3-Year
Financial Metrics(2)
        3-Year
Relative TSR(2)
        Aggregate
Award Payout
Weighting 12.5% 37.5% 50% 100%
Payout % 92% 79% 0% 41%
(1) The Compensation and Talent Committee certified performance for the two-year financial metrics in September 2020, following the end of fiscal 2020. Our named executive officers who received those awards generally remained subject to a one-year service period during fiscal 2021 to vest in that portion of the award.
(2) The Compensation and Talent Committee certified performance for the three-year financial and TSR metrics in August 2021, following the end of fiscal 2021.

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NAMED EXECUTIVE OFFICER PAYOUTS ON FISCAL 2019-2021 PSUs

Named Executive Officer(1)         Threshold Payout
(37.5%)
(# of Shares)
        Target Payout
(100%)
(# of Shares)
        Maximum Payout
(200%)
(# of Shares)
        Actual Payout
(# of Shares)(2)
Srinivasan Sivaram 9,259 24,690 49,380 10,153
Michael C. Ray 5,964 15,901 31,802 6,539
(1) Dr. Sivaram and Mr. Ray were the only named executive officers who received fiscal 2019–2021 PSUs.
(2) Pursuant to the terms of the award, the named executive officers also received dividend equivalents accrued with respect to the number of shares paid.

                         
FISCAL 2020-2021 PERFORMANCE PERIOD ACHIEVEMENT

2-Year Financial Metrics         Threshold
(50%)
($)
        Original
Target
(100%)
($)
        Maximum
(200%)
($)
        Target After
Applying Relative
MPA Modifier
(100%)
($)
        Actual
Performance
($)
        Achievement
Rate
        Final
Payout
Rate
(1)
2-Year Revenue (6.25%) (in millions) 32,042 37,696 43,351 36,216 33,658 93% 80%
2-Year Non-GAAP EPS (6.25%)(2) 10.01 13.35 17.35 12.18 7.59 62% 0%
Weighted Overall Payout: 40%
(1) Payout under this award will be made following fiscal 2022. Our named executive officers generally remain subject to a one-year service period requirement during fiscal 2022 to vest in that portion of the award.
(2) See Appendix A to this Proxy Statement for a reconciliation of GAAP EPS to non-GAAP EPS.

Fiscal 2022 Decisions

Fiscal 2022 LTI Awards

The Compensation and Talent Committee granted the following LTI awards to our named executive officers in fiscal 2022 as part of our regular annual LTI program:

Named Executive Officer Total Awarded
Grant  Value
($)
LTI Vehicle Mix
                PSUs         RSUs
David V. Goeckeler 15,000,000 60% 40%
Robert K. Eulau 3,575,000 50% 50%
Srinivasan Sivaram 3,750,000 50% 50%
Robert W. Soderbery 3,550,000 50% 50%
Michael C. Ray 2,187,500 50% 50%

Fiscal 2022 Compensation Enhancement

In August 2021, the Compensation and Talent Committee approved an increase in Mr. Ray’s target STI award from 85% of base salary to 100% of base salary. In approving this change, the committee considered market data for Mr. Ray’s role and his target cash positioning relative to other executives within Western Digital.

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Other Program Features and Policies

                                  
Perquisites      

We provide our executive officers with few perquisites, consisting principally of a $5,000 annual allowance for financial planning services (net of taxes), which is available to other officers, and a monthly transitional housing and travel allowance. The monthly transitional housing and travel allowance is provided to a small number of officers and is limited in duration as a transition into employment with our company. None of our named executive officers received this allowance in fiscal 2021.

We did not provide any tax gross-up payments to our named executive officers, except as to the modest financial planning services allowance in accordance with the terms of the program and applicable tax law.

401(k) Plan
Benefits

We provide retirement benefits to our executive officers and other eligible employees under the terms of our 401(k) Plan. Eligible employees may contribute up to 75% of their annual cash compensation up to a maximum amount allowed by the Internal Revenue Code, and are also eligible for matching contributions, which vest over a two-year service period. Our executive officers participate in our 401(k) Plan on substantially the same terms as our other participating employees. We do not maintain any defined benefit supplemental retirement plans for our executive officers.

Deferred
Compensation
Opportunities

Our executives and certain other key employees who are subject to U.S. federal income taxes are eligible to participate in our Deferred Compensation Plan. Participants can elect to defer certain compensation without regard to the tax code limitations applicable to tax-qualified plans. We did not make any company matching or discretionary contributions to our Deferred Compensation Plan on behalf of participants in fiscal 2021.

Severance
Protections

Outside a change in control context, we view severance protections as only appropriate in the event an executive is involuntarily terminated without “cause.” These severance benefits are appropriate considering severance protections available to executives at our peer group companies and are an important component of each executive’s overall compensation.

Please see the section entitled “Executive Compensation Tables and Narratives—Potential Payments upon Termination or Change in Control” for a description and quantification of the potential payments that may be made to our named executive officers in connection with their termination of employment or a change in control.

Change in Control
Protections

A change in control transaction creates uncertainty regarding the continued employment of executive officers. To encourage executives to remain employed with us during an important time when their prospects for continued employment following the transaction are often uncertain, we provide our executives with additional severance protections under our Change in Control Severance Plan. We also provide these severance protections to help ensure that executives can objectively evaluate change in control transactions that may be in the best interests of stockholders despite the potential negative consequences such transactions may have on them personally.

Please see the section entitled “Executive Compensation Tables and Narratives—Potential Payments upon Termination or Change in Control” for a description and quantification of the potential payments that may be made to our named executive officers in connection with their termination of employment or a change in control.

Employment
Agreements

None of our executive officers is currently party to an employment agreement with us.


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Compensation
Recovery
(Clawback) Policy
     

Our Board of Directors previously adopted by resolution a compensation recovery (clawback) policy where in the event of a restatement of our audited financial statements involving misconduct by an executive officer, a Board committee will consider whether such officer engaged in intentional financial accounting misconduct such that the officer should disgorge any equity award proceeds (including PSUs, RSUs and stock options) or cash bonuses attributable to such misconduct.

Misconduct
Policies

We maintain several policies relating to employee misconduct. In the event an executive’s employment is terminated for cause due to the executive’s misconduct or violation of company policy, among other reasons, the executive will forfeit all outstanding incentives, including unearned or unvested LTI and STI awards. In addition, the executive would not be eligible for severance benefits.

Policies Prohibiting
Hedging, Pledging
and Short Sale
or Derivative
Transaction
Our insider trading policy prohibits our executive officers (as well as our other employees and members of our Board of Directors) from engaging in hedging transactions or speculative transactions involving our company’s securities and from pledging company securities. Prohibited transactions include hedging or monetization transactions, such as prepaid variable forwards, equity swaps, collars and exchange funds that are designed to hedge or offset any decrease in the market value of our company’s securities, shorts sales, transactions in derivative securities, such as publicly traded options, related to our company’s securities and margining our company’s securities in a margin account or otherwise pledging company securities as collateral for a loan.
Executive Stock
Ownership
Guidelines

We established executive stock ownership guidelines covering our senior officers, including our named executive officers, to help link the interests of our stockholders with those of our executive officers. The guidelines provide that each officer must achieve ownership of a number of “qualifying shares” with a market value equal to the specified multiple of the officer’s base salary in effect upon the date he or she first becomes subject to the guidelines shown below.

Position

Multiple

Chief Executive Officer

6 x Salary

President, Chief Financial Officer and Division Presidents

3 x Salary

Executive Vice Presidents

2 x Salary

Senior Vice Presidents

1 x Salary

Each officer must achieve ownership of the required market value of shares within three years of becoming subject to the guidelines. Common stock, RSUs, PSUs, deferred stock units and common stock beneficially owned by the officer all count towards the requirement, but shares the officer has a right to acquire through exercising stock options (whether or not vested) are not counted. All of our current officers who are subject to these guidelines have met their required ownership level as of the date of this Proxy Statement.


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Executive Compensation Tables and Narratives

Fiscal 2019—2021 Summary Compensation Table

The following table presents information regarding compensation earned for fiscal 2019, 2020 and 2021 by our named executive officers.

Name and Principal Position       Fiscal
Year
      Salary
($)
      Bonus
($)
      Stock
Awards
($)(1)
      Non-Equity
Incentive Plan
Compensation
($)(2)
      All Other
Compensation
($)(3)
      Total
($)
DAVID V. GOECKELER 2021 1,250,000 12,487,789 3,346,875 8,700 17,093,364
Chief Executive Officer 2020 408,654 3,500,000 31,140,040 673,077 1,605 35,723,376
ROBERT K. EULAU 2021 715,000 3,696,053 1,070,623 8,686 5,490,362
Executive Vice President 2020 721,135 250,000 4,667,943 778,123 25,564 6,442,765
and Chief Financial Officer 2019 134,615 250,000 1,999,970 3,231 2,387,816
SRINIVASAN SIVARAM 2021 744,231 7,876,938 1,366,408 26,741 10,014,318
President, Technology 2020 719,712 4,667,943 776,875 22,432 6,186,962
and Strategy 2019 625,000 3,038,291 10,158 3,673,449
ROBERT W. SODERBERY 2021 546,154 1,000,000 (4)  9,215,426 994,546 8,700 11,764,826
Executive Vice President and
General Manager, Flash Business
MICHAEL C. RAY 2021 625,000 500,000 (5)  3,761,581 789,570 7,603 5,683,754
Executive Vice President, 2020 631,250 500,000 (5)  3,646,792 526,346 7,491 5,311,879
Chief Legal Officer and Secretary
(1)

The amounts shown reflect the aggregate grant date fair value of stock awards granted in the applicable fiscal year computed in accordance with ASC 718. These amounts were calculated based on the assumptions described in Note 13 in the Notes to Consolidated Financial Statements included in our 2021 Annual Report on Form 10-K, but exclude the impact of estimated forfeitures related to service-based vesting conditions.

The following amounts represent the grant date fair value of PSU awards granted to our named executive officers during fiscal 2019, 2020 and 2021 assuming the probable outcome of the awards on the grant date (which we considered the target level of performance for PSUs other than relative TSR PSUs, and determined using a Monte Carlo simulation in the case of relative TSR PSUs) and assuming maximum performance under the awards for fiscal 2021. The dollar value of the awards included in the Summary Compensation Table for the year of grant is based on the probable outcome of the awards on the grant date and do not reflect actual payouts.

 

  Grant Date Fair Value of PSU Awards Based on
Probable Outcome on the Grant Date for:
Grant Date Fair Value of PSU Awards
at Maximum Performance for:
  Named Executive Officer       Fiscal 2019
($)
      Fiscal 2020
($)
      Fiscal 2021
($)
      Fiscal 2021
($)
      David V. Goeckeler 21,140,062 7,687,796 11,287,782
  Robert K. Eulau 2,667,988 1,908,561 2,802,288
  Srinivasan Sivaram 1,475,845 2,667,988 2,001,976 2,939,446
  Robert W. Soderbery 1,940,476 2,827,965
  Michael C. Ray 2,084,336 1,167,846 1,714,716
(2) Reflects each named executive officer’s STI payment for the corresponding fiscal year. Note that STI for fiscal 2021 included 53 weeks of eligible earnings.

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(3) The table below summarizes all other compensation to each of our named executive officers for fiscal 2021:

      Name       Perquisites
($)
      401(k)Plan
Company Matching
Contributions
($)
David V. Goeckeler 8,700
Robert K. Eulau 8,686
Srinivasan Sivaram 18,191 (a) 8,550
Robert W. Soderbery 8,700
Michael C. Ray 7,603
      (a) The amount shown reflects a taxable life insurance benefit of $7,524, reimbursed financial planning services of $9,917 and a patent bonus of $750.
(4) In connection with his appointment as Executive Vice President and General Manager, Flash Business, in July 2020, Mr. Soderbery received a sign-on cash award of $1,000,000.
(5) To induce Mr. Ray to remain with our company after receiving an employment offer from another large technology company, Mr. Ray received a cash retention award in the amount of $2,000,000, payable with respect to $500,000 in each of fiscal 2020–2023.

Fiscal 2021 Grants of Plan-Based Awards Table

The following table presents information regarding all grants of plan-based awards made to our named executive officers during fiscal 2021.

Estimated Possible Payouts
Under Non-Equity
Incentive Plan Awards


Estimated Future Payouts
Under Equity Incentive Plan
Awards

All Other
Stock Awards:
Number of
Shares of
Stock or Units
(#)

Date Fair
Grant Value
of Stock and
Option
Awards
($)(1)
Name    Award
Type
   Grant
Date
   Threshold
($)
   Target
($)
   Maximum
($)
   Threshold
(#)
   Target
(#)
   Maximum
(#)
     
David V. STI 1,093,750 2,187,500 4,375,000
Goeckeler PSUs — Financial (2)  9/3/20 47,732 95,465 190,930 3,599,985
PSUs — TSR (3)  9/3/20 23,866 95,465 190,930 4,087,811
RSUs (4)  9/3/20 127,287 4,799,993
Robert K. STI 393,250 786,500 1,573,000
Eulau PSUs — Financial (2)  9/3/20 11,850 23,700 47,400 893,727
PSUs — TSR (3)  9/3/20 5,925 23,700 47,400 1,014,834
RSUs (4)  9/3/20 47,401 1,787,492
Srinivasan STI 446,538 893,077 1,786,154
Sivaram PSUs — Financial (2)  9/3/20 12,430 24,860 49,720 937,471
PSUs — TSR (3)  9/3/20 6,215 24,860 49,720 1,064,505
RSUs (4)  9/3/20 49,721 1,874,979
RSUs (5)  4/22/21 60,368 3,999,984
Robert W. STI 327,692 655,385 1,310,769
Soderbery PSUs — Financial (2)  9/21/20 12,295 24,591 49,182 887,489
PSUs — TSR (3)  9/21/20 6,147 24,591 49,182 1,052,987
RSUs (4)  9/21/20 49,182 1,774,978
RSUs (5)  9/21/20 152,396 5,499,972
Michael C. STI 265,625 531,250 1,062,500
Ray PSUs — Financial (2)  9/3/20 7,251 14,502 29,004 546,870
PSUs — TSR (3)  9/3/20 3,625 14,502 29,004 620,976
RSUs (4)  9/3/20 29,004 1,093,741
RSUs (5)  4/22/21 22,638 1,499,994
(1) The amounts shown reflect the grant date fair value of the award computed in accordance with ASC 718. These amounts were calculated based on the assumptions described in Note 13 in the Notes to Consolidated Financial Statements included in our 2021 Annual Report on Form 10-K. The grant date fair value for such PSU awards subject to financial goals, at the target level, is based on the closing price of our common stock on September 3, 2020 ($37.71) for all named executive officer awards with the exception of Mr. Soderbery’s, and September 21, 2020 ($36.09) for Mr. Soderbery’s award. The grant date fair value for such PSU awards subject to relative TSR performance, at the probable outcome, is based on the value of our common stock on September 3, 2020 using a Monte Carlo simulation, which resulted in a simulated award value of $42.82 per share based on certain assumptions.

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(2) Represents an annual LTI PSU award granted to the named executive officer for the three-year performance period covering fiscal 2021 through 2023, subject to cliff vesting at September 3, 2023, based on our achievement of specified revenue and non-GAAP EPS performance goals that correspond to specific payout percentages ranging between 0% and 200% of the target number of stock units subject to the award.
(3)

Represents an annual LTI PSU award granted to the named executive officer for the three-year performance period covering fiscal 2021 through 2023, subject to cliff vesting at September 3, 2023, based on our relative TSR performance that corresponds to specific payout percentages ranging between 0% and 200% of the target number of stock units subject to the award and capped at 100% if our absolute TSR is negative over the three-year performance period.

(4)

Represents an annual LTI RSU award granted to the named executive officer, which is scheduled to vest ratably over four years.

(5)

Represents retention RSUs (in the case of Dr. Sivaram and Mr. Ray) and sign-on RSUs (in the case of Mr. Soderbery) that are scheduled to vest ratably over two years.

Description of Compensation Arrangements for Named Executive Officers

Non-Equity Incentive Plan Compensation and Awards

Our named executive officers are eligible to receive cash incentive awards on an annual basis under the STI plan. See the section entitled “Executive Compensation—Compensation Discussion and Analysis” for a more detailed description of the STI plan.

Equity-Based Awards

Each RSU and PSU award reported in the “Fiscal 2021 Grants of Plan-Based Awards Table” was granted by the Compensation and Talent Committee under, and is subject to, the terms of our 2017 Performance Incentive Plan.

Our named executive officers are not entitled to voting rights with respect to their stock units (PSUs and RSUs). However, if we pay an ordinary cash dividend on our outstanding shares of common stock, the named executive officer will have the right to receive a dividend equivalent with respect to any unpaid stock unit (whether vested or not) held as of the record date for the dividend payment.

Additional information regarding the vesting acceleration provisions applicable to equity awards granted to our named executive officers is included in the section entitled “Potential Payments upon Termination or Change in Control” below.

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Outstanding Equity Awards at Fiscal 2021 Year-End Table

The following table presents information regarding the current holdings of stock options and stock awards (and corresponding dividend equivalents) held by each of our named executive officers as of July 2, 2021. The amount shown for the market value of the stock awards is based on the closing price of our common stock on July 2, 2021 ($70.21).

Option Awards Stock Awards
Name    Grant
Date
   Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
   Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
   Option
Exercise
Price
($)
   Option
Expiration
Date
   Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
   Market
Value
of Shares
or Units of
Stock That
Have Not
Vested
($)
   Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)
   Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have Not
Vested
($)
David V. Goeckeler 3/9/2020 106,731 (1)  7,493,584 437,599 (2)  30,723,826
9/3/2020 127,287 (3)  8,936,820      190,930 (4)  13,405,195
190,930 (5)  13,405,195
Robert K. Eulau 4/22/2019 19,133 (3)  1,343,328
9/4/2019 25,984 (3)  1,824,337 17,323 (6)  1,216,248
1,732 (7)  121,604 6,496 (8)  456,084
9/3/2020 47,401 (3)  3,328,024 47,400 (4)  3,327,954
47,400 (5)  3,327,954
Srinivasan Sivaram 5/12/2016 11,380 40.63 2/16/2022
8/3/2016 32,606 44.78 8/3/2023
8/2/2017 3,219 (3)  226,006
8/30/2018 13,218 (3)  928,036
10,871 (9)  763,253
9/4/2019 25,984 (3)  1,824,337 17,323 (6)  1,216,248
1,732 (7)  121,604 6,496 (8)  456,084
9/3/2020 49,721 (3)  3,490,911 49,720 (4)  3,490,841
49,720 (5)  3,490,841
4/22/2021 60,368 (1)  4,238,437
Robert W.
Soderbery
9/21/2020 152,396 (1)  10,699,723 49,182 (4)  3,453,068
49,182 (3)  3,453,068 49,182 (5)  3,453,068
Michael C. Ray 9/11/2014 22,524 100.06 9/11/2021
8/4/2015 6,460 84.39 8/4/2022
11/3/2015 7,248 68.53 11/3/2022
8/2/2017 3,219 (3)  226,006
8/30/2018 8,512 (3)  597,628
7,001 (9)  491,540
9/4/2019 20,301 (3)  1,425,333 13,533 (6)  950,152
1,353 (7)  94,994 5,075 (8)  356,316
9/3/2020 29,004 (3)  2,036,371 29,004 (4)  2,036,371
29,004 (5)  2,036,371
4/22/2021 22,638 (1)  1,589,414
(1) This RSU award is scheduled to vest in substantially equal annual installments over two years.
(2)

This PSU award is scheduled to vest on March 8, 2023 based on achievement of specified relative TSR for the three-year performance period from March 9, 2020 to March 8, 2023. The award will be payable in shares of our common stock on the vesting date based on our achievement of the specified goals that correspond to specific payment percentages ranging between 0% and 150% of the target number of stock units subject to the award. The numbers above reflect payment at target level, which is 100% of the target number of stock units.

(3)

These RSU awards are scheduled to vest in substantially equal annual installments over four years.


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(4)

These PSU awards are scheduled to vest on September 3, 2023 based on achievement of specified relative TSR for the three-year performance period covering fiscal 2021 through 2023. The awards will be payable in shares of our common stock on the vesting date based on our achievement of the specified goals that correspond to specific payment percentages ranging between 0% and 200% of the target number of stock units subject to the awards. The numbers above reflect payment at maximum level, which is 200% of the target number of stock units.

(5)

These PSU awards are scheduled to vest on September 3, 2023 based on achievement of specified revenue and non-GAAP EPS goals for the three-year performance period covering fiscal 2021 through 2023. The awards will be payable in shares of our common stock on the vesting date based on our achievement of the specified goals that correspond to specific payment percentages ranging between 0% and 200% of the target number of stock units subject to the awards. The numbers above reflect payment at maximum level, which is 200% of the target number of stock units.

(6)

These PSU awards are scheduled to vest on September 4, 2022 based on achievement of specified relative TSR for the three-year performance period covering fiscal 2020 through 2022. The awards will be payable in shares of our common stock on the vesting date based on our achievement of the specified goals that correspond to specific payment percentages ranging between 0% and 200% of the target number of stock units subject to the awards. The numbers above reflect payment at target level, which is 100% of the target number of stock units.

(7)

Reflects the portion of a PSU award that has been credited based on achievement of the performance goals but remains subject to a service requirement through September 4, 2022.

(8)

These PSU awards are scheduled to vest on September 4, 2022 based on achievement of specified revenue and non-GAAP EPS goals for the three-year performance period covering fiscal 2020 through 2022. The awards will be payable in shares of our common stock on the vesting date based on our achievement of the specified goals that correspond to specific payment percentages ranging between 0% and 200% of the target number of stock units subject to the awards. The numbers above reflect payment at threshold level, which is 50% of the target number of stock units.

(9)

Reflects the portion of PSU awards that had been credited based on achievement of the performance goals but remained subject to a service requirement through August 30, 2021.

Fiscal 2021 Option Exercises and Stock Vested Table

The following table presents information regarding the amount realized upon the exercise of stock options and the vesting of stock unit awards for our named executive officers during fiscal 2021.

Option Awards Stock Awards
Name       Number of
Shares Acquired
on Exercise
(#)
      Value Realized
on Exercise
($)(1)
      Number of
Shares Acquired
on Vesting
(#)
      Value Realized
on Vesting
($)(2)
David V. Goeckeler 106,731 7,399,680
Robert K. Eulau 18,229 964,431
Srinivasan Sivaram 56,114 2,182,723
Robert W. Soderbery
Michael C. Ray 8,773 131,595 22,839 935,443
(1)

The value realized upon exercise is based on the spread between the market price of our common stock at the time of exercise and the exercise price.

(2)

The value realized on the vesting of stock awards (and corresponding dividend equivalents) is based on the closing price of our common stock on the applicable vesting date (or, for PSUs, the applicable payment date) of the awards.


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Fiscal 2021 Non-Qualified Deferred Compensation Table

We permit our named executive officers and other key employees to elect to receive a portion of their compensation reported in the “Fiscal 2019–2021 Summary Compensation Table” on a deferred basis under our Deferred Compensation Plan. Under the plan, each participant may elect to defer up to 80% of his or her eligible compensation that may be earned during the following year. Amounts may be deferred until a specified date, retirement, disability or death. Emergency hardship withdrawals are also permitted under the plan.

The following table presents information regarding the contributions to, investment earnings, distributions and total value of our named executive officers’ balances under our Deferred Compensation Plan during fiscal 2021, including as to RSUs that vested but as to which payment was deferred.

Name       Executive
Contributions
in Fiscal 2021
($)
      Registrant
Contributions
in Fiscal 2021
($)
      Aggregate
Earnings in
Fiscal 2021
($)(1)
      Aggregate
Withdrawals/
Distributions
($)
      Aggregate
Balance at
July 2, 2021
($)(2)
David V. Goeckeler
Robert K. Eulau
Srinivasan Sivaram 403,057 416,213 332,463 1,950,216
Robert W. Soderbery
Michael C. Ray
(1)

The amounts reported are not considered to be at above-market rates under applicable SEC rules and were therefore not included in the “Fiscal 2019–2021 Summary Compensation Table” above.

(2)

The balances reported represent compensation already reported in the “Fiscal 2019–2021 Summary Compensation Table” above and its equivalent table in prior years’ proxy statements, except for the earnings on contributions that are not considered to be at above-market rates and for amounts earned while the individual was not a named executive officer.

Potential Payments upon Termination or Change in Control

Change in Control—Termination without Cause or For Good Reason

Our named executive officers may be entitled to severance benefits under our Change in Control Severance Plan. Generally, the severance benefits are payable if we terminate the named executive officer’s employment without “cause” or the named executive officer voluntarily terminates employment for “good reason” within twelve months after a change in control.

For these purposes:

“Change in control” generally means an acquisition by any person or group of more than one-third of our stock, certain majority changes in our Board of Directors over a period of not more than two years, mergers and similar transactions that result in a 50% or greater change in our ownership, and certain liquidations and dissolutions of our company

“Cause” generally means the commission of certain crimes by the executive, the executive’s willful engagement in fraud or dishonest conduct, refusal or failure to perform certain duties, breach of fiduciary duty, or breach of certain other violations of company policy

“Good reason” generally means a material diminution in the executive’s authority, duties or responsibilities, a material diminution in the executive’s base compensation, certain relocations of the executive’s employment, or a material breach by us (or our successor) with respect to our obligations under our Change in Control Severance Plan

For each of our named executive officers, the severance benefits generally consist of the following as a “Tier 1” participant:

A lump sum payment equal to two times the sum of the executive’s annual base compensation plus the target STI as in effect immediately prior to the change in control or as in effect on the date of notice of termination of the executive’s employment with us, whichever is higher, plus any earned but not yet paid STI payments in respect of completed performance periods


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100% vesting of any unvested outstanding equity awards granted to the executive by us, with any performance-based equity awards as to which the applicable performance period has not ended becoming vested at the target level (or, if more favorable, as otherwise provided in the agreement providing for change in control)
A lump sum payment equal to the applicable COBRA premium payments for a period of 24 months following the executive’s termination

Involuntary Termination without Cause—No Change in Control

Our Executive Severance Plan, in conjunction with the terms and conditions of our equity awards, provides the following severance benefits to our named executive officers as Tier 1 participants in the event their employment is terminated without “cause” (generally as defined above).

A lump sum cash payment of the executive’s monthly base salary multiplied by 24
Any earned but not yet paid STI payments in respect of completed performance periods and a pro rata STI payment based on the number of days in the applicable performance period during which the executive was employed at target performance
For PSU awards, a prorated portion of the PSUs subject to the award will vest, if at all, based on actual achievement of the performance goals over the entire performance period
For RSU awards granted beginning in fiscal 2020, acceleration of vesting of a prorated amount of RSUs
For RSU awards granted in fiscal 2019, if the executive is retirement-eligible, the more favorable of: (i) acceleration of vesting of an amount of RSUs that would have vested if the executive had remained employed for an additional six months; and (ii) acceleration of vesting of a prorated amount of RSUs, and if the executive is not retirement eligible, then acceleration as described in clause (i)
For RSU awards granted prior to fiscal 2019, acceleration of vesting of an amount of the outstanding award that would have vested if the executive had remained employed for an additional six months
Outplacement services at our expense for 12 months following the executive’s termination of employment
A lump sum payment equal to the applicable COBRA premium payments for a period of 18 months following the executive’s termination

Payment of severance benefits under our Change in Control Severance Plan and Executive Severance Plan is conditioned upon the executive’s execution of a valid and effective release of claims. In addition, no executive is entitled to a duplication of benefits under our Executive Severance Plan and any other severance plan, including our Change in Control Severance Plan.

Qualified Retirement

For RSUs granted beginning with the fiscal 2019 annual grant to the fiscal 2022 annual grant, in the event an executive meets certain retirement criteria, a pro rata portion of the RSUs will accelerate. RSUs granted beginning with the fiscal 2022 annual grant no longer contained the acceleration benefit for an eligible retirement.

For PSUs granted beginning with the fiscal 2019 annual grant, a pro rata portion of the target number of PSUs will remain outstanding and eligible to vest based on actual achievement of the performance goals over the performance period.

To be eligible for retirement, the executive must have five years of credited service with us and must also be at least age 55 at the time of retirement and his or her age plus total years of credited service must be at least 70.

Death

In the event of an executive’s death, a pro rata portion of the RSUs will accelerate and a pro rata portion of the target number of PSUs will remain outstanding and eligible to vest based on actual achievement of the performance goals over the performance period.

Termination for Cause/Misconduct

In the event an executive’s employment is terminated for cause due to the executive’s misconduct or violation of company policy, among other reasons, the executive will forfeit all outstanding incentives, including unearned or unvested LTI and STI awards. In addition, the executive would not be eligible for severance benefits.

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Calculation of Potential Payments upon Termination or Change in Control

The table below presents our estimate of the benefits payable to our named executive officers under the arrangements described above based on the following assumptions:

Qualifying termination of employment and/or change in control occurred on July 2, 2021
The price per share of our common stock is equal to the closing price of our common stock on July 2, 2021 ($70.21), the last trading day in fiscal 2021
In the case of a change in control, our company does not survive the change in control, and all outstanding incentive awards are cashed out and terminated in the transaction
Not included in the table below are payments each named executive officer earned or accrued prior to termination, such as the balances under our Deferred Compensation Plan and previously vested equity and non-equity incentive awards, which are more fully described and quantified in the tables and narratives above

Name       Compensation Element       Change in
Control-No
Termination
(Awards Not
Assumed)
($)
(1)
      Change in
Control-With
Termination
Without Cause
or For Good
Reason
($)
      Involuntary
Termination
Without
Cause-No
Change in
Control
($)(2)
      Qualified
Retirement
($)(3)
      Death
($)(2)
David V. Goeckeler Cash Severance 6,875,000 4,687,500
RSU Acceleration(4) 16,430,423 16,430,423 9,345,762 4,220,179
PSU Acceleration(5) 44,129,004 44,129,004 35,192,206 17,964,427
Continuation of Benefits(6) 34,444 25,833
Value of Outplacement Services 5,960
TOTAL 60,559,427 67,468,871 49,257,261 22,184,606
Robert K. Eulau Cash Severance 3,003,000 2,216,500
RSU Acceleration(4) 6,495,708 6,495,708 1,192,998 1,325,275
PSU Acceleration(5) 5,760,448 5,760,448 2,836,866 2,836,866
Continuation of Benefits(6) 34,256 25,692
Value of Outplacement Services 4,125
TOTAL 12,256,156 15,293,412 6,276,181 4,162,141
Srinivasan Sivaram Cash Severance 3,150,000 2,325,000
RSU Acceleration(4) 10,707,736 10,707,736 2,334,256 2,245,222
PSU Acceleration(5) 7,760,851 7,760,851 4,728,677 4,728,677
Continuation of Benefits(6) 50,251 37,688
Value of Outplacement Services 4,125
TOTAL $18,468,587 21,668,838 9,429,746 6,973,899
Robert W. Soderbery Cash Severance 3,124,000 2,075,385