Ladies and gentlemen, please welcome Jane Shaw, Chairman of the Board of Directors, and Cary Klafter, Vice President, Corporate Secretary.
The meeting will please come to order. I am Jane Shaw, Chairman of the Board of Intel. It's my pleasure to welcome you to Intel's 2011 Annual Stockholders Meeting. In addition to being in Santa Clara today, the meeting is also being conducted via the Internet through our investor relations website at www.intc.com. We have six proposals in front of us today. First, to elect directors for the coming year. Secondly, to vote on the selection of Intel's auditors. Third, an extension of our 2006 Equity Incentive Plan. To vote on an extension of the 2008 Stock Purchase Plan. We have an advisory vote on executive compensation and an advisory vote on the frequency of an advisory vote on compensation. We will report on the state of the company.
This will be followed by a question- and- answer session, which will be conducted with our live audience here and the audience over the Internet. I would refer you to the printed program for the agenda and the meeting rules. It's now my pleasure to introduce to you Cary Klafter, Corporate Secretary, who will deal with the matters of business today.
Thank you, Jane. Just a couple of protocol matters which we go through every year. We sent out our notice of meeting and our proxy statement on April 4th, and March 21st was our record date for voting. You had to own shares as of March 21st to be eligible to vote at this meeting. We had about 5.4 billion shares outstanding on that date, and we have about 4.4 billion shares which are present either in person or by proxy, primarily by proxy, at this meeting. That is more than sufficient for a quorum to actually hold the meeting. If you've already voted, you don't need to do anything further as far as voting is concerned. If you haven't voted or you want to change your vote, if you're present in person, you can go outside where voting can be held, or you can vote by the Internet.
Jim Wright from American Election Services is here. He's serving as our Inspector of Elections and will report to me later on with respect to the final tally for the election. The polls close at 9:15 A.M., if you haven't voted and you want to vote, vote at that time. This is the good part now for the lawyers. I'm going to talk to you about risk factors. Some of today's presentations, including Paul Otellini's business update, contain forward-looking statements. All statements made during the meeting that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. Please refer to our Q1 earnings release and our Form 10-Q for more information on the risk factors that could cause actual results to differ.
If we use any non-GAAP financial measures during the presentation, you will find on our website, www.intc.com, the required reconciliation to the most directly comparable GAAP financial measure. With that, let me turn the meeting back to Jane.
Thanks, Cary.
Okay.
On behalf of the Board, I would really like to thank stockholders who've returned proxies and those who are here to vote in person today and/or vote online. As I mentioned previously, we have six items to deal with today. The first is election of directors for the coming year. Each nominee must receive a majority of the votes cast. I would like to introduce the nominees to you. As I introduce them, I would ask them to stand and to remain standing until all have been introduced, and I would ask you to hold your applause until all have been introduced. First, Paul Otellini, President and CEO of Intel. Charlene Barshefsky, Senior International Partner at WilmerHale. Susan Decker, Private Investor and Advisor. Reed Hundt, Principal of REH Advisors LLC. Jim Plummer, Professor of Electrical Engineering and Dean of the School of Engineering at Stanford.
David Pottruck, Chairman and CEO of Red Eagle Ventures Incorporated. Frank Yeary, Vice Chancellor of Berkeley. David Yoffie, Professor of International Business Administration at Harvard Business School. Our other nominee, John Donahoe, was unable to attend today's meeting. Ladies and gentlemen, your nominees for director. I would now like to introduce the corporate officers who are in attendance today. Likewise, as I introduce them, I would ask them to stand and remain standing until all have been introduced, and I would ask the audience to hold their applause. First, Andy Bryant, Executive Vice President of Technology, Manufacturing, and Enterprise Services, and our Chief Administrative Officer. Diane Bryant, Vice Chief Information Officer. Doug Davis, our Vice President and General Manager, couldn't be with us today. Neither could Mooly Eden, Vice President and General Manager of the PC Client Group. Erik Huggers, Vice President and General Manager of the Digital Home Group.
Ravi Jacob, Vice President and Treasurer. And Renee James, Senior Vice President, General Manager of the Software and Services Group. Brian Krzanich, Senior Vice President and General Manager of the Manufacturing and Supply Chain. Sean Maloney, Executive Vice President, General Manager of the Intel Architecture Group. Doug Melamed, Senior Vice President and General Counsel. David Perlmutter, Executive Vice President, General Manager of the Intel Architecture Group. Kirk Skaugen, Vice President and General Manager of the Data Center Group. Arvind Sodhani, Executive Vice President of Intel Capital. Stacy Smith, Senior Vice President and Chief Financial Officer. Ladies and gentlemen, our corporate officers that are with us here today. The second item on our agenda today is ratification of the selection of Ernst & Young as Intel's independent auditors for 2011.
From Ernst & Young with us here today, and I would like to introduce them to you, are [Mark Bustos], Craig Smith, please stand, and Matt Sapp. Thank you. The third item on our agenda is the amendment and extension of the 2006 Equity Incentive Plan. This is the plan we use when we grant stock options and restricted stock to our employees. Our policy is to present for renewal this plan every two years so that stockholders can review our use of the plan on a fairly regular basis. The fourth item on the agenda is the amendment and extension of the 2006 Stock Purchase Plan. This is the plan we use giving employees the opportunity to acquire stock through periodic payroll deductions that are applied towards the purchase of Intel common stock at a discount.
The primary purpose of this plan is to provide employees with the opportunity to acquire ownership in the company. Our policy is to present this plan for renewal every five years so that stockholders can review our use of the plan on a regular basis. The fifth item on the agenda is an advisory vote on executive compensation. It's also known as say-on-pay. We voluntarily included a say-on-pay advisory vote in our proxies in 2009 and in 2010. This year, a say-on-pay advisory vote is being required for all public companies under a recently adopted law. We are asking stockholders to approve on an advisory basis the compensation of Intel's listed officers as described in detail in the proxy statement.
While this is an advisory vote only, the Board and the Compensation Committee of the Board will carefully assess the voting results and will consult directly with stockholders to better understand any issues or concerns that are raised through the stockholder vote. The final agenda item today is an advisory vote on the frequency to hold future advisory votes on executive compensation. This item is also a new requirement in federal law. In accord with the law, we are asking stockholders to vote on whether future say-on-pay votes should occur every year, every two years, or every three years. Although, again, this is an advisory vote, the Board will carefully consider the voting results on this proposal and expects to be guided by the alternative that receives the greatest number of votes.
Having gone through the business matters of the day, it is now my pleasure to ask Paul to come to the stage and provide a short business update. Paul.
Thank you, Jane. Good morning. Happy to be here today, and thank you all for coming, and thank you on the web for tuning in. I'd like to do a short update on the state of the business. Just as a matter of information, we held our annual Investors or Analyst Day two days ago here in this room, and it was an all-day event, a deep dive in the company. I would encourage any investor who didn't have a chance to see that to go on to intc.com and take a look at it because you'll get a very, very good understanding of the company in much more detail than I'll give you this morning. What I'd like to do is just give you some key messages and tell you a little bit about the strategy of the company.
First of all, the thing that's driving us is really unprecedented demand for computing at both ends of the spectrum, at the device level and in the data center. All those devices have to talk to a server, a networking system, a storage system somewhere. As I look forward and look at the development plans in our product line and our existing business growth, we are incredibly well- positioned as a company to reap the benefits of this explosion in computing. The second point is that as we look at computing, going forward, there are really three essential ingredients that we think are necessary from a company like ours, a building block company, a computing company, to deliver into the marketplace to make computing happen. One has to do with energy-efficient performance, the thing we've done for many, many years, centered around our core microprocessor business.
The second thing is seamless connectivity, making sure that all these devices can talk together very well, but also for the ability to talk to the cloud and for the cloud, all the servers in the infrastructure of the Internet, to be able to work and communicate more efficiently. The third thing, which is of growing importance, is security. All of us are concerned about privacy and security in our lives. This is particularly so when you think about the Internet and the threats to privacy and security that exist on the Internet today. Intel has been focusing on security for a long time. We've made some big bets on security in the last 12 months, and I'll talk a little bit more about those. The fact that we have, as a company, we have put in place very, very broad solutions capability. What do I mean by that?
We're not just a chip company anymore. We've built very substantial assets in software and in systems level of integration that allow us to bring more than just a chip to market. It allows us to take our products, target them for specific devices like phones, like tablets, like PCs, or even network infrastructure, and help our customers get to market faster with both hardware and software solutions tailored to their needs. It's all about velocity. The fourth and last point on here that I want to go through is that we are, once again, a very, very strong growth company. We delivered very good growth last year. We'll deliver very good growth this year, both at revenue and earnings, and we are returning excess cash increasingly to the shareholders, and we'll go through that. The last 12 months since we last met, really three things have happened.
First, I think we've seen strong growth across the business, not just in the core PC area, but in many of our businesses. This, of course, is driven by what I believe is the strongest product line we've ever had in the company's history. It's really second to none in terms of the way we're going after these markets in a very comprehensive fashion. It showed up in the bottom line. Last year, revenue growth was 24% year-on- year. Operating income grew almost 90% year-on- year in 2010. It was the best year in the company's history ever, and our first year ever above $40 billion. It was driven by growth, not just in the PCs. PCs, data center, consumer electronics, embedded, and our NAND businesses all had double-digit growth last year, contributing to the growth and profitability of the company.
The second point is that we continue to invest, to invest to lead in every segment that we're addressing as a company. The most visible element of that is our lead, our extending our lead in silicon process technology. I'll show you an update on that in a couple of slides. We completed two major acquisitions, Infineon Wireless business and McAfee, which is a security company, but we also completed eight other smaller ones. We use these smaller acquisitions to tuck into our business units in terms of filling holes in technology that we may have so that we can get a more complete solution faster than we could develop those solutions on our own. I will reassert to you that phones and tablets are, I know they're on your mind, they're on our mind, they're a matter of intense focus for us.
We gave a deep update on that two days ago, and I'll give you a brief update today. We also did a significant increase in the returns to shareholders in the last 12 months. Most recently, last week, you probably read the news that we've increased the dividend by 16%, and it's now up to $0.84 a unit on 4.3 shares or 5.3 billion shares. That's a tremendous amount of cash going back in dividends, and I'll show you the rate of growth in dividends as we go through the presentation. Some of you are also very focused on buybacks. We bought back $1.5 billion worth of stock in Q4 and $4 billion in the first quarter, so $5.4 billion altogether. We have $10 billion left outstanding in the authorization from the Board to continue buybacks as the opportunity arises. Last 12 months. Looking forward, what drives us?
I said earlier that the thing that gives us optimism for the future is this pervasive and seemingly never-ending growth in computing. Perhaps the best way to demonstrate that is showing what the industry is shipping and what people are buying every year, as measured in quintillions of transistors. For those of you who know scientific notation, a quintillion is 10 to the 18th, right? It's a lot of transistors. What you see on here is an explosion, a knee in the curve, starting in around 2005. This year, the industry will ship 10 billion transistors for every person on Earth. If you don't own or buy 10 billion transistors, you're not doing your fair share as an investor, and we need you to get out there. Intel, of course, doesn't supply the majority of those transistors, but we supply a lot of them.
This really, I think, demonstrates more than anything else this quench for computing that's out there. It's, of course, not just about the United States anymore. It's a global demand. Here, we're addressing a number of markets. Here, I just wanted to talk about the PC market. I didn't even put the United States or Western Europe up here. I showed what's driving the growth this year and for the foreseeable future. It's emerging markets. If you look at this chart, the smallest number on there is China at 12% growth this year. This is this year's growth in PCs. By the way, these are IDC numbers. Intel's numbers may be a little bit more aggressive than these, but this shows where the growth of the market is.
For a very long time, the top three or four markets in the world for computing have been the United States, followed by Japan or Germany or countries like that. Next year, China will be number one. The United States will be number two. Number three, big surprise, Brazil. Brazil will move from number four to number three market in computing for the world. It's about emerging markets. It's about the reach. If you've been coming to these meetings for a number of years, you know that we've talked about emerging markets for well over a decade now. Intel has been in China 26 years. We've been in Brazil more than a decade. We've invested in these markets to bring this kind of growth to the company for quite some time, and it's starting to pay off as growth comes in.
I wanted to use this opportunity to reiterate our guidance for the quarter. We met with the investors two days ago, and I want to once again reiterate that we were very comfortable with our guidance for Q2 and for the growth projections we put out for the year. Everything we've seen still seems very, very positive for this year. We believe we're on track for another 20%+ growth here this year, which would put our revenue, remember I said last year was the first time above $40 billion. This will be the first time above $50 billion as a company. What's driving it is not just the PC, but it's a bunch of devices per user. You probably recognize some of these. I hope you have many of these in your lives. This is the future of computing.
It's about connectivity, about security, about mobility, and bringing the computing infrastructure of the world into your pocket, into your car, into your refrigerator, into your house for energy management, into the grid for smart grid management. It's about more and more devices per user worldwide. I said earlier that we have three fundamental building blocks as we look at our infrastructure for computing: energy-efficient performance, connectivity, and security. They've been the basis for our investments for the last four or five years. What are we delivering against those? In the performance area, we're changing the nature of our products. We're focusing on not just the fastest microprocessor out there, but delivering the best experience possible for the end user. We want to give superior battery life. There's no reason that any computing device shouldn't last you all day when you're using it and multiple days in a standby mode.
We know that the world is moving to a more visual computing environment. All of the video is the big driver of Internet traffic today. That's not going to go down. It's going to be higher- content video, HD video, ultimately more and more video conferencing will come to the market. We have to be a leader, not just in microprocessor technology, but in graphics technology and media performance of all types. We need to be able to bring all these features together in a highly integrated fashion into very highly engineered system-on-chips so that we can get them into smaller and smaller devices. In connectivity, the paradigm is always on, always connected. No one wants to boot something up. No one wants to wait for a connection to the Internet. We have to design that into our products.
We also know that there are going to be multiple communication requirements around the world, even in your own life here in the United States. There are times when you want to be on Wi-Fi. There are going to be times when you want to be on the 3G network or the 4G network as that gets built out. You want to have a local communication between devices using Bluetooth or some other near-field communication. We need to have the ability to have what we call multi-comms built into all of our platforms so that we're agnostic and pervasive on connectivity. In security, it's all about, it has been in the past about spyware and malware. That's still a big part of the business. Increasingly, it's about using features in the system to protect you. Things like anti-theft technology.
If you're a CIO or even an individual and your laptop is stolen, wouldn't it be great to be able to turn that device off? It'd be great to find it. If you can't find it, it'd be great to turn it off so that bad guys can't find out what's on there. You can encrypt the data and make it a non-useful device, which also lowers the resale value, which hinders the theft capability. We also focus on identity and privacy protection. Increasingly, I think that's an important feature and factor in people's buying decisions. There are going to be new commerce models where security through electronic payment needs to be enhanced. Wouldn't it be great if we just had one single password for all the devices in our lives and it was secure so you wouldn't have to change passwords or remember which password was on which device?
We're going to build those kinds of technologies in. The way we do it in energy-efficient performance is by using the best transistors on Earth. The way we do it in connectivity is that we're going to design our devices to work across the spectrum of computing so that your phone can talk to your tablet, so it can talk to your PC, and it can talk to the Internet, and maybe even talk to your television. In security, of course, put protection to all the devices. I said I would talk about our newest announcement in silicon technology. We announced the world's first Tri-Gate transistor, 3D transistors. On here is a chart of our silicon technology advancements since 2003. This is moving at the Moore's Law cadence. We bring a new silicon technology to market every 24 months, just like clockwork on here.
We've shown some of the significant advancements we've put into the technology since 2003 when we introduced Strain Silicon. That's still being used in our technology. Other manufacturers are now starting to use that. High-k metal gate, we introduced in 2007. Just now, four years later, you're starting to see the first existence of other competitors using high-k metal gate. This, of course, allows us for a significant process advantage in terms of things like performance, power performance, and leakage in the devices. Last week's announcement on 22 nm is the world's first implementation of a 3D gate. At some point, when you stop being able to shrink things on an XY basis in terms of making them smaller, the only way you can get more oomph, more performance out of the transistor is to build up. That's what we did.
Bill Holt, who runs our Technology and Manufacturing division, likens this to moving from a ranch house to a skyscraper. Just think about that image when you think about how we can start building more complex devices in the same area of silicon. We believe this technology will give us, it will increase our lead in the industry. Today, I think we're about two to three years ahead. I expect that to stay and maybe go out a bit as these factories get more and more expensive and this technology gets more and more complex. I said we also are focusing on changing our product roadmap to enable new compute technologies. Let me just give you a very simplistic view of that. The notebook has been driving the PC market since 2003 when we introduced Centrino. Notebooks have pretty good battery life today. We all own them and use them.
They run about 35 W, and they move up and down from that. Then we introduced a product line called Atom several years ago to go into a new category called Netbooks. Those products are much lower performance, and they're also lower power consumption, which means a little bit longer battery life. We said, why can't we do both? Why can't we give users the best of both worlds? We retargeted our mainstream notebook designs way down to 15 W. Of course, we'll still build higher- performance products for the big desktops and servers that are out there in the world. By taking the target wattage down to 15 W and not compromising on performance either in classic compute performance or in graphics, we can now deliver a very compelling package of computing to individuals. I'll show you an example of that in a few slides.
At the same time, we're taking our Atom line and stretching that in both directions, having that come up a bit for some of the devices, but also going way down to be able to handle, obviously, things like phones and tablets. When you integrate these things, what you have is a common architecture, common instruction set, common technology, common reuse in all of our design areas that allow us to span all the needs of computing from the milliwatt to the megawatt in the data center. I know of no other company, certainly no other semiconductor company, that is focusing on delivering this, and it is, I think, a very compelling value proposition for our customers. I said that we were investing in connectivity to really ensure that we have all communication modes covered.
The left-hand side is a sea of logos of what we support today. There are two on there I want to point out that are relatively new. One is the Infineon Wireless Solutions, which we've renamed to the Intel Mobile Communications business. This has essentially brought a leader in 3G technology into Intel. This group, it's in Munich, principally. It is responsible for 3G and for 4G technologies for Intel. They are a major supplier in the world today, and it's been a very good integration of technology and the division into the company in the last several months. I also want to point out a new technology called Thunderbolt, which is logoed on the left-hand side, but at the lower right-hand side, the picture is the latest MacBook Pro that's come out, and it's the first product to use Thunderbolt technology.
It's a revolutionary way to interconnect computers and devices to each other at a much higher bandwidth to be able to move content back and forth in a very, very effortless fashion. Things that used to take minutes will now take seconds, think of it that way. This technology was developed by Intel. It's owned by Intel. It's our intellectual property. When Kirk Skaugen was up here two days ago, he said in his first year, Thunderbolt alone will be a $100 million business for us. Security has been something we've focused on for a long time and runs sort of left to right on this chart. We started building security into our microprocessors a number of years ago. The technology that most embodies that is something we call vPro. vPro is a technology aimed principally at CIOs or enterprise organizations, and essentially, it's enhanced management and security environment.
Those are hardware-based security features with some software on top of them. We're now leveraging those same feature sets by adding new technologies around them. The second one from the left is Intel Anti-Theft Technology, which is in notebooks today. It allows you to do what I said earlier in terms of being able to recover or disable the data in a notebook. The next one over is Intel Insider, which is a means of us using the hardware and the software we've developed to allow high-value content owners like DreamWorks or Warner Brothers or Bollywood to be able to take their content directly from their sites. You can go to the Warner Brothers site or the Best Buy site that has Warner Brother movies and download a movie, and it's end-to-end protected in a highly- encrypted fashion onto your Sandy Bridge-based notebook.
You can even then wirelessly now show that on your television or your big screen in your living room. This is really very interesting technology because it's not just secure. It changes the business model. The content owners can now go directly to end users without having to go through the pit stop of an iTunes. They can decide their own pricing. They can decide their own terms and so forth. It's very exciting as we talk to the studios around the world about enabling this kind of technology into their websites, and there were a large number of studios endorsing it. The last one here is McAfee. McAfee was an acquisition that closed in the first quarter. It will contribute a significant amount of revenue to the company this year, and on a non-GAAP basis, is accretive in its first year in terms of earnings.
Our plan has been for quite some time to be working with McAfee on using their software technology and their security expertise to activate features in our hardware to make for a more secure platform by combining the benefits of hardware-based security and software-based security into a more robust solution. We've got a very good roadmap. The first of these products is shipping sort of now, and there's a rollout over the next year to two years of more advanced feature sets that we think will bring not just value to the McAfee franchise, but value to the Intel franchise and increase what I would describe as service-based or annuity-based revenues for the company, which we haven't traditionally had a lot of. The next thing I wanted to talk about is the PC and reinventing the PC. We all know what a notebook looks like today.
It doesn't really look like this. This, I think, is what we're trying to do. It's not just make PC thinner. That's easy. We can do that. We want to make the PC substantially better. We want to make it more like a consumer electronics device. Some of the characteristics we'll be building into the machines will be all-day battery life. We're not going to compromise on performance. We're going to be able to run every operating system that's out there. It will have instant on. It will be always connected. It'll have more robust security. It'll have great graphics. It'll be at today's price points. Our goal is to enable this new paradigm of more consumer-friendly computing into PCs without raising the prices. This means it's a lot of technology. It's a lot of heavy lifting in the industry, but we're committed to it.
You'll see the first instantiations of this kind of device holiday of this year. It gets better for Holiday of next year, and it gets really good, and the full vision is implemented by holiday of 2013. There's been a lot of talk about other segments outside the PC, and we are focusing and investing on these as well. Let me start right to left on this slide. The embedded segment is a big business for us today. The embedded businesses, as we do our financial reporting, the other Intel architecture businesses are over $3 billion a year and are very profitable, are among our fastest growing businesses. Why?
What we're doing here is we're leveraging our standard microprocessor technology increasingly around Atom at the system-on-chip level, where we put in place the peripheral devices, peripheral functions needed for these individual devices on the same chip, targeting specific high-growth markets like digital signage, home energy control, and even in-vehicle infotainment. Atom is now the standard for what's called GENIVI , or the global in-vehicle infotainment standard, which means you'll start seeing Intel inside your Mercedes, your BMW, and all the Japanese cars over the next few years. These cars will now have the benefits of the Internet, very graphical computing, better GPS kind of navigation capabilities, and so forth, deeply integrating the Internet into the infotainment systems of the car. Smart TV was something that we have been working on, for seven years or so, and in the last year, it's really started to take off.
I think Intel has been the standard bearer on this. In fact, Intel coined the name Smart TV, and you're starting to see this really hit mainstream market price points. It launched in the U.S. under the Google TV banner last year with six or seven vendors. You'll see a second version of the second generation of Google TV shipping for Holiday of this year from a number of vendors on a global basis. What's been more interesting is watching Europe adopt this. In France, a company called Free is the fastest growing set-top box Internet provider in France, and Telecom Italia in Italy as well. We're shipping Smart TV capabilities at 10,000 units a day now. That's a lot. I think over the next several years, every digital television will increasingly have this kind of capability built into it.
Right now, Intel is the leader, and we're the ones that are in the pole position to win this. Tablets, of course, are subject to a lot of debate in the industry. You'll see Intel-based tablets in the market today running Win 7, and you'll see Intel-based tablets in the market in the second half of this year on the newest version of Android, which is called Honeycomb. Next year, as Windows comes out with this next generation of Windows, you'll see Intel-based tablets running that as well. We're very, very focused on this market. In smartphones, another market which is subject to a lot of discussion, we are focused on this as well. A number of you know that we had a very public engagement with Nokia for several years.
Nokia broke off that engagement at the altar last February, and they told us that they're not going to go with Intel. They're going to switch. Essentially, it was an operating system decision. They decided to switch from MeeGo, which was an operating system for phones that we were co-developing with them, to Windows Phone 7. When that change happened, our design win went out the window. Of course, we didn't just stop and sulk. We pivoted. We've taken that design. We've repurposed it. It's now focused on Android, and we're shopping it to a number of other phone companies around the world, handset manufacturers around the world. We are having good success there, and you'll see the first Intel-based phones in the market early next year. Next to last slide is how do we get paid?
Several years ago, gosh, more than that, five, six years ago, I talked about the Internet running on Intel. This was in the days of when Sun looked like they were still very, very strong and so forth, and Intel was increasingly winning the data center. As I look forward now, it's all about the mobile Internet. What I see happening and unfolding is that the mobile Internet is also running on Intel. The obvious part is the right-hand picture there. The data center, which is one of our highest growth businesses, it's a $10 billion business for us this year and very highly profitable, is growing at 15% per year, which means it'll be a $20 billion business by 2015, doubling one of the most profitable large businesses in the company inside of five years.
That's because of the explosion of the data center requirements, not just app servers, but app servers, media servers, storage, networking infrastructure, all running on our Xeon microprocessors principally. Every time you use a smartphone, every time you use a tablet, every time you use a PC, those bits are going through an Intel server somewhere on the data center, or at least a very, very high fraction of them are. It's also important to get paid in devices, which are the two pictures on the left. If you think about the PC industry today, where we've done fairly well, we get paid twice. We get paid for the manufacturing capability we have that other companies would have to use a foundry for, because we are an integrated device manufacturer, and we get paid for the architectural feature set that we embed on those wafers.
That gives us very, very good margins in the PC space. As we go into device spaces where the sales prices may be lower, like phones or tablets, these capabilities work even more to our advantage. Being an integrated device manufacturer allows us to be able to compete at the same price level as, let me say, the ARM chips that are out there in phones and tablets, but to be able to recover the manufacturing margin for ourselves that they have to pay to people like TSMC as their foundries. I also believe that by using and focusing on Intel architecture for these key segments, we can create an incremental value add that will allow us to have an architectural and feature margin over and above the silicon margin.
I think just like we're in the PC space, we get paid three times today, we're going to get paid three times tomorrow as the mobile Internet develops. We are acutely aware of your desire to get paid as well. This is a chart that shows the steadily increasing dividend of the company, 33% CAGR from 2003 to 2011, and I'm told that's the best in the S&P. Kevin, is that right? Yeah. The top 20 in the S&P. I spoke earlier about the 16% increase that we announced a week ago. Our target allocation is that dividend ought to consume about 40% of our free cash flow, and we plan to therefore increase it at about the rate of EPS growth going forward. Dividend yield as of yesterday, I guess, was 3.3%. That's not the only way we return cash to shareholders. We also repurchase.
I said earlier that we bought back $5.5 billion between Q4 and Q1. $10 billion left. That is a net result of reducing the shares outstanding by 1.2 billion shares since 2000, and we will use repurchase as a means of also returning cash to shareholders over and above our capital needs in the company and dividend needs. I couldn't let this go by without talking a little bit about corporate responsibility, and I just picked some simple examples here. For all of the investors that are here today, there's an executive summary of our corporate social responsibility report outside. There is a 100-page version of this on the web if you'd care to look in more detail. It's really one of the best of class that's out there, and I would encourage you to read it. We're very, very proud of what's in here.
Last year, we invested almost a quarter billion dollars in training for our employees. Our employees, on the other hand, 48% of all of our employees volunteered in their communities last year. We think that's one of the things that we encourage. It's an Intel value to some extent. Over a million hours of volunteerism back to the communities worldwide. That's the third year in a row we've surpassed the million-hour mark. We continue to be the largest purchaser of green power on the planet and have been since 2008. We have major programs in recycling of both water and chemical waste in the factories that we can talk to you about if you have any questions later on. Perhaps the most visible program for Intel in our philanthropy is our educational efforts. Inside of those, the most visible is Intel Teach.
We've now trained over 9 million teachers worldwide on curriculum improvement and how to bring the benefits of technology into their classroom and, more importantly, how to use technology to improve the learning process, particularly as it relates to math and science in the K through 12 systems around the world. Last week, we, of course, had the Intel International Science and Engineering Fair, which is a wonderful worldwide global science fair. I would encourage you to go on our website and take a look at that. These kids are inspirational. Anytime you feel down about the future of Earth, just go to one of these science fairs, and you're going to feel pretty good about our future. Lastly, in summary, what it's all about for Intel, it's all about winning and growing. We're going to extend our silicon leadership into all segments of computing.
We're going to evolve the notebook and change its model to ultra-simple, ultra-thin, ultra-versatile device. We will deliver best-of-class solutions for tablets and smartphones. We're going to extend our architecture into all of these adjacencies that are just ripe for Intel silicon and Intel software solutions. With that, thank you very much, and let me invite our Chairman back up. Can you sit?
Paul, thank you for that great presentation, a great summary of what's happened in the last year, and a great look at the future and what's ahead for Intel, a very, very promising future. We will now be taking questions both from the room and from the web. For those of you who are watching on the web, if we don't get to your question, we will try to answer it in the future and post the answers on the web where you can access them.
In this room, there are microphones in each of the aisles. If you have a question, I would ask you to come to the microphone, first state your name before asking the question. We will limit speaking time to two minutes and on any one topic to five minutes, so that we can give an opportunity for other questions to be asked. Let me take the first question here from the left.
First, thanks for the slides from the analyst meeting from Tuesday. They're great. I came to this meeting because I'm concerned about the stock price that has underperformed the S&P for a decade and because I'm very fascinated by the growth opportunities of the extreme mobile market. That market, smartphones, tablets, et cetera, is growing very fast. It's very big, and there are players out there who are getting extremely wealthy in that market. Yet our company, which has the Atom, which has 80% market share in a lot of CPUs, has been very weak in that department and two, three years behind some of the competition. I have a two-part question. Why did we hit the market so slow, so late?
I suppose that we have some of the greatest market and product development people in the world who have access to some of the greatest resources, like our internal venture capital group, our software development group that works with lots of companies, our partners who are customers who have to compete against some of those players in the extreme market. Also, we have connections to Google, which has the Android. My second question is, what do you think is the scale of this extreme market to Intel? Is it significant?
Of which market?
Of the extreme in the tablets and smartphones.
Other devices, you mean?
Yeah.
OK.
Thank you.
You want to take that?
Yes.
Be happy to, unless you do.
Oh.
OK.
Thank you.
Hi, Tony. Welcome back. We were in smartphones early, as you may remember. The first BlackBerry was based upon a 386. Then we acquired the StrongARM business from Digital Equipment Corporation more than a decade ago, and that was also a BlackBerry design and sold that to Marvell several years ago. Marvell has that design but is losing it from BlackBerry. We concluded several years ago that smartphones were important. I can't say that we saw tablets coming. No one really did, except perhaps Steve Jobs. We saw smartphones as being an important segment of the business and at the time derived strategy based upon Atom to go into these market segments. We had a belief that the first phone chip that would really be competitive would be our 32-nanometer chip called Medfield. We targeted that.
We ended up having a very strong design relationship with Nokia, which, as I said earlier, terminated in the January-February timeframe. We will still bring that product to market at the platform level in phones. Those phones will come to market Q1 of next year. At the time they ship, they'll be the only 32-nanometer phone chips out there that we believe. We think the 28-nanometer from TSMC and others is beyond Q1. We believe that we know we've already measured the part. It's very competitive. It's right in the sweet spot on battery, and it's very high performance on media. It will have, of course, all the Intel architecture advantages of running everything on the web on it. Your question was also partially on Google. We are working deeply with Google. Of course, Google runs on Intel. The infrastructure of Google is all x86-based servers for the most part.
There are three big software efforts at Google. One is the Chrome OS project, which is only on Intel and was co-developed. That OS was co-developed by Intel. We contributed much of the software there with them. The second is Google TV, which is also a Linux-based off of our MeeGo operating system that we contributed half the code on. The third, of course, is Android, which started out based upon ARM because that was the only phone chips around. Now you're seeing we have ports of Android for tablets. We have Froyo shipping today. I said earlier, we'll have Honeycomb shipping in the second half of this year. You'll see the first phones that are out on Intel will also be based on Android, on the most recent software from Google. There is a very strong partnership with Google in phones. We're well aware of that.
Could we or should we have gone faster? It would have been wonderful. We've had our hands full with the PC market, which has been pretty good the last few years. As you know, chips don't take six months to build. They take several years to build. The second one was on scale. How big do I think these things are? The smartphone business this year is 250 million units. The average selling price for a chip that goes in an Apple processor in a smartphone is $12. Today, you're talking about a business which is a couple of billion dollars, and it's probably 30% margin. Even if we had 50% of that business, it would be $500 million of operating income on a company that makes $17.5 billion or so this year. From a financial standpoint, it is not critical right now.
Going forward, as smartphones grow and as PCs and computers and tablets all sort of morph together, it's critical. As that happens, you'll see Intel in the middle of it.
Thank you for that question. It also marries in with the first question that just popped up on the web, and I think we answered it. The question was, with a continuous increase of smartphones and tablets in the market, what is Intel's strategy for participating in those segments? I think.
I think we did.
We answered.
I'd give the same answer.
You give the same answer. Thank you for that.
At least I'd hope they give the same answer.
We have a question on the right here.
Hi, my name is [Christian Grant], and the question is related to the tablet and smartphone market. You mentioned that you are enabling Android on Intel processors. When looking, for example, at NVIDIA, they have a very aggressive roadmap. I think they have a chart on the site where they say we will have 70x the performance or 70 cores. I'm not sure what it was by 2013, a very aggressive roadmap for performance. I don't know if I need that much on a smartphone, but maybe on a tablet. One question is, can you compete with that? The other question is, do you have any commitments with phone handset manufacturers, important handset manufacturers on the Android side, such as, I don't know, Samsung, HTC, Motorola, some of the big ones? The third question is also very short. You had an initiative called MeeGo.
Is that still being pursued, and what are the challenges in terms of MeeGo, not just tablets, but phones?
OK. I'm going to start out with NVIDIA and tablets. Not to worry. We have a roadmap too. We don't make it nearly as public as they do, but [Vadati] shared much of that yesterday. He showed what we're doing on Atom-based graphics and integer performance. You can't get into a core war thing because today an Atom core is roughly slightly faster than two of the ARM cores. You get into this four-core and one-core or two-core thing. It's really about the system-level performance. Our commitment on graphics, as you'll see, is another 10x, 12x over the next several years in graphics as well. When we use the best silicon technology and the best architecture, I'm quite convinced that we'll be able to compete handily with NVIDIA. On phone, yes, we have a number of commits. I'm not at liberty to talk about those at this point in time.
Those customers will announce them when they're ready. Typically, they talk about them when the design is complete and the phone goes into IoT or interoperability testing. If you think about it, I said we'd be shipping phones in the first quarter. You back up from that. Those IoT testings start in the fourth quarter, September-October timeframe. That's when it becomes obvious to people that there's an Intel phone, a new phone on the network of XYZ carrier. That's the likely time that those would be announced. You'll have to trust me until then. On MeeGo, MeeGo, as you may recall, grew out of a long-term effort in Linux that we've had. Its most recent instantiation before MeeGo was called Moblin. Moblin, MeeGo is the, it continues.
It is the foundational Linux operating system for Intel in embedded systems, in in-vehicle infotainment, in smart TVs, Android work, Chrome work, et cetera. The question is, will the tablet and phone version of MeeGo come to market as a standalone operating system? We still believe that will happen. Obviously, when Nokia left, that was a big blow. As that door closed, a number of other doors opened. The people that didn't want to work with Nokia, who were their competitors, walked in and said, hello, we're interested. You'll see some announcements around that in the next several weeks that will build momentum around MeeGo in phones and tablets.
Nokia, they have announced that they are coming out with one MeeGo handset this year. Are you involved in that?
No. I think it's going to be their first and only MeeGo, as I can tell. It was already in flight. It's a TI ARM-based machine.
Thank you. Next, we'll go to the web for another question. I will read it. It says, I still don't understand the purchase of McAfee. Could someone from Intel please provide a non-technical explanation for the reason behind this purchase? When will we see that the McAfee purchase was good for Intel? Do you want to take that one?
I'd be happy to do it, but I think it'd be good for Renee to answer that one. Renee James runs our Software and Services Group, and she shepherded the acquisition of McAfee.
Renee.
Yes, thank you, Paul. First of all, as Paul said, security is one of the core pillars of computing across all segments, from the data center to devices. At the foundation of security is software technologies around how you detect what's going on, the malicious attacks, and in combination with a cloud database, are able to secure, clean, locate, etc. All of those assets work in conjunction with secure features we've put into our silicon to actually create hardened security. As we had built all these features into our silicon and we were very excited about the enhancements to security we could bring to market, we realized that in order to turn them on, we needed to have the software assets. In order to serve mobile devices long term, many of the questions that are being asked today, we needed to have the cloud asset.
The third piece of that that's quite important is that McAfee had a very robust patent portfolio in security, which is important to us on a forward-looking basis for our ongoing R&D in security. All of those assets in combination with the fact that you heard from the discussion, it's an accretive deal on its own basis of the business. It's a very healthy business. We felt that it created long-term differential value for Intel silicon. We know that it's a core piece of the value proposition that users are willing to pay us a differential payment for and that it was a good business.
Thank you, Renee. Great explanation. We have a question here, I think, at the microphone. Please state your name.
My name is [Daniel Goldsmith]. I have a question, something that puzzles me. Your business is better than ever. You're given an extremely bright outlook for the future, but the stock price is where it was several years ago, and in fact, is less than one-third of where it was over a decade ago. Why is that it hasn't kept up?
There are two parts of stock price. One is the earnings, and one is the price-earnings ratio. I can speak to earnings. Earnings are better than ever and are on a very strong growth curve. We restructured the company in 2006, 2007, and 2008, and we're reaping the benefits for that for the next decade. To some extent, I think our growth in the reality of the numbers hasn't caught, has not yet been reflected in the increase in the PE. Our PE is one of the lowest in the S&P and certainly one of the lowest in technology. I think there's a lot of reasons for that. I can speculate. Who knows? There's no one that decides PE. The market decides PE, right? I think that there's a concern that PCs are our old hat and that the future is phones and that we're not in phones.
If we were shipping 100 million phone chips a year and making as much money as we make in PCs, I suspect the PE would be different. My job is to grow earnings and then get to ship as many phone chips per year as we can and at least take that shadow off the perception of the company.
You're saying that the slowing PC sales and the period that it'll take to ramp into phones and tablets isn't really going to hurt the company then?
First of all, I don't think PC sales will certainly slow from last year, which was one of the great years of all time. Our view of PC sales is that this year is 400 million units a year, something in that range, or pretty close to it. That number will grow to 500 or 600 million units a year over the next four or five years. PCs are not going to go away. They're going to grow at 10% or 12% per year for the foreseeable future, driven by that emerging market phenomena of first-time buyers that I showed. That provides a wonderful base for growth for the company and earnings for the company. On top of that, we will layer in data center growth. We'll layer in growth in these embedded businesses and then tablets and phones.
That's why it's still puzzling to me why the price doesn't reflect that.
It's puzzling to me too, and I would consider it a buying opportunity.
Talking about a disconnect here, we're talking perhaps about a disconnect between performance and stock price. There's another disconnect question that comes over the web. It reads, it seems like some of your large customers are struggling in PCs, and yet you have a healthy outlook. Why this disconnect?
First of all, I have to be careful because only two of our customers have announced their earnings. I don't want to pre-announce others. If you look at the pattern, what we said is strong in Q1 and what will be strong in Q2 and what's happened so far, we said starting in the fourth quarter of last year, the consumer notebooks in mature markets were weak. That's after two very strong years, very, very strong years for consumer markets in the West in the middle of the recession, which was contra for recessionaries. We talked about that last year at the analyst meeting and the investor meeting. It is natural that consumer purchases will slow down a bit, all things considered. The machines they bought are only a year, year and a half old. What is very strong is enterprise sales and sales in countries like China and Brazil.
Our customers that are well positioned in enterprise sales and/or in those countries are doing very well. You saw Dell's results yesterday. They had very strong numbers as a result of their growth in enterprise sales, which improved their numbers and their margin. Their consumer sales in the West were weak. The same pattern. I think you saw a similar pattern from HP. As the other manufacturers, you also saw a pre-announcement from Acer, who is uniquely dependent as a company on consumer markets in Europe and to some extent the United States, which are the weakest part of the business. They have no large-scale business in China or in enterprise. They are in the weak part of the market.
It is not really a tale of two markets. It is a tale of Intel supplying technology to all the markets and some of them at this point in time being stronger than others. Some of our customers are focused more strongly on the growth elements of the market today than on markets that are not growing as fast.
Good answer. Thank you. We have another question.
First of all, congratulations on making Booz Allen's list of top 1,000 innovators at number 10.
Thank you.
I put a 30-year financial history together on the company, and I noticed something about the return on equity. When the company transitioned from DRAM to microprocessor, return on equity in 1987 was about 19%. In 1993 and 1997, it had high watermarks at about 42%. In 2000, it was 32.5%. From 2001 through 2009, the numbers were substantially below that, sometimes in a couple of cases, single digits. Last year, you were back at 27.5%, a respectable number. Can you talk about what kind of return on equity we can anticipate moving forward? I'm trying to get at the essence of the analyst valuation of the company and some of the metrics they might be looking at.
Sure.
Another just a very short question. Mr. Goel, who was accused of Mr. Goel.
Yeah, yeah.
Insider trading, can you put some of the security features to work internally?
We have a pretty good compliance program, but you can't stop people from talking on the phone. I suppose if we wanted to monitor phone calls, we could, but that would be inappropriate and illegal. We're chagrined by Mr. Goel. Is that his last name?
Goel.
Goel. I hope he gets what he deserves. On the ROE question, let me ask Andy to address that.
What?
Because we take a goal of being, we really think in terms of ROIC, even though if you look at the math, it'll get almost exactly ROE. Our goal is to be in the top 20%, which we are back now. I agree much of the 2000s we were not. Our goal is to maintain ourselves in the top 20%. We're comfortably there now. Quite frankly, the things Paul is talking about, assuming we continue to have our success, we should improve our position as opposed to not. I know you're getting at, how do the analysts look at it? I really don't think they're valuing us on ROE. If they were, they're thinking the stock price would be different. They're valuing us on something we're not sure we understand. Our goal is to be in the top 10% of all technology companies, top 20% of S&P 500.
We're back there finally.
Thanks, Andy. We'll take another question from the web. It says, Intel has demonstrated great execution and outstanding results. What are the biggest issues going forward? What are the risks in the way of future good execution?
The question of the way of reading this execution risks as opposed to market risks.
Yeah.
Execution risk, obviously, is, you know, can we build the chips that we envision for phones and tablets and be successful in those markets? I think that's got to be a big one. Another big one is that the growth in the PC market is not to be taken for granted. If we don't revitalize it through making much better products, more interesting products, products that are more consumer-friendly, that growth will, as someone suggested earlier, it will not materialize. I think that the two things that we have to focus on, I'm very comfortable in our silicon process technology machine, the manufacturing machine. I'm comfortable with our ability in terms of go-to-market and marketing. It really is around those two vectors of us being able to successfully enter, in a very big way, the two markets that are two big markets we're not in today.
The other is to continue to be able to benefit from the growth of the PC business by reinventing it.
We need to take good care of our people.
Yeah, that's not a risk.
That's not a risk. We have another question here on the left.
Yes, I do have a question. I'd like to make a quick comment ahead of time. I am a shareholder. I own 5,500 shares personally.
Your name is?
My name is [Paul Schwartzbach]. I'm sorry. An opinion of mine, this is a unique audience. These people here, for the most part, purchase shares out of earned savings. They had to write a check to buy the shares. Much of the community that has access to senior management doesn't fall into that camp. Institutional investors rarely own your shares. Many of the senior management and directors receive their shares without having to write a check. In fact, some board members have never purchased a share with a check. I think it's a shame that shareholders who have purchased their shares from their savings, who intuitively and empirically, there's evidence, tend to be very well-informed, concerned shareholders have very little access to management. That's just a concern I'd like to state related to my question. If I can proceed to the question. Regards compensation and incentives.
As a number of shareholders here have expressed some discontent with the stock having languished for the last couple of years, I understand. I personally am not concerned with that as long as execution and operations proceed. Someday the share will reflect the value the company is offering. Nevertheless, shareholders have had to be patient for the last decade now. It concerns me that the board of directors gave themselves what could amount to be in excess of a $500,000 reward through 20,000 shares and with very little justification in the proxy. I was hoping you could elaborate on that. Tied to that, I don't understand exactly why you would set up incentive programs contingent on the share price. As you alluded to, and as I agree, the share price is going to behave. Sooner or later, I think it will reflect value.
That's something that is generally accepted in finance. You can't control the share price. You can control operations. Why are you rewarding yourself with an incentive program that gives you a lot of shares, even if the stock doesn't perform, and a lot more if it does perform?
I think there were sort of three issues. One is access to management. You'd like to feel like you had better access to management.
That's really more of an opinion.
All right.
If you have a comment on that, I'd love to hear it. If not, I just wanted to.
We're just delighted to see you here today. This is indicative of how you can, in fact, access management. We introduced many of them that were sitting here in the audience today. A second question or a second comment was related to board compensation. Board compensation is the responsibility of our Corporate Governance and Nominating Committee, and David Yoffie is Chairman of that committee. I'll ask him to comment on that. Overall, the incentive programs that you say, why do we anchor them to stock price? I'll ask David Pottruck to answer that question in his capacity as Chair of the Compensation Committee. Maybe first we could start with David Yoffie addressing the issue of board compensation.
Thank you for the question. We obviously have looked very carefully at these issues. It is true that this year, for the first time ever, we did do a one-time grant of 20,000 shares to all directors that actually vests over a three-year period of time. Part of the rationale behind this was that roughly half our board has been recruited in the last five years. What we really wanted to do was accelerate the shareholdings of our directors and therefore align directors much more closely to shareholders. Just as you said, shareholders buy stock with their own money. We wanted to have our own directors more deeply invested more quickly in the stock.
In addition to that, we've asked all the directors, even though we didn't make it a requirement, that they hold on to the stock and they not sell it so that they will feel and act like shareholders. Another aspect of this was that we do surveys every year of our compensation and how we compare with our peers, both broadly in the S&P and in Silicon Valley. For the last 10 years or so, the Intel board of directors has been underpaid. It was a conscious decision to underpay because of the performance of the company. We've been underpaying relative to our Silicon Valley peers by as much as 30%. Part of the purpose of this grant was to bring us closer in line with the peers in the Valley.
Even after this one-time grant, again, it only lasts three years, vests over three years, we will still be below the average of our peers. Finally, it's important to make two last points. The first is this is a one-time grant. It will not be repeated either this year or any time in the near future. I've been on the board for 22 years. What I can tell you is the workload for the directors has never been greater. The combination of Sarbanes-Oxley, increased reporting requirements by the Audit Committee, by the Compensation Committee, increased compliance requirements on corporate social responsibility, globalization, the sheer workload has increased dramatically, even though we actually had not done any significant increase in director pay over the last 15 years or 20 years. Cash compensation also did not change over this period.
Thank you. David Pottruck, would you like to comment on our incentive programs and why they're set to stock price?
Our incentive programs have many elements to them. About 90% of our employee compensation is tied to the performance of the company, and it's tied to the financial performance and operating performance of the company. Our annual bonus plans are driven by the actual earnings, earnings growth, the achievement of our roadmap, et cetera, because our employees don't control the stock price. It's focused on that. Over time, however, it's important to shareholders that while we achieve the roadmap and we achieve financial results, we also see our stock perform, particularly compared to the peers, what we call the Tech 15, the big technology companies that are kind of like Intel. We want to see our stock do as well or better over time as we grow compared to our competitors. That's important to everybody in this audience.
One of the problems of equity programs that involve restricted stock is that the employees vest in that restricted stock, and you get paid for basically staying in your job. We wanted to have something that had a little more leverage to it, a little more performance component. We gave our employees something we called outperformance stock units, where they got shares in the company that vest over time. If our share performance outperforms, even in a down market, if we outperform our Tech 15 competitors, we would award our employees an incremental number of shares for their achievement of those kind of outstanding results. We wanted to incent them to outperform, to do better.
It's that kind of careful engineering of our compensation program that we think has the right mix of performance elements, economic elements, financial performance, stock performance that really rewards all the different stakeholders of the company. That's how we try to do it.
A follow-on to that, David. Mr. Otellini can engineer the utilization of a piece of equipment or a fab. He can't engineer the stock price. Is there a concern amongst the board? There is among me that there's going to become incentives that are perverse and potentially earnings management or accounting issues that when you have an incentive to control a share price, you're controlling things that aren't fundamental to the business.
Right. Short answer, David, because we're at the top.
OK. There actually now is a whole process for going through our comp plans to make sure that we don't have those kinds of incentive risks to do the wrong thing, to take too many risks, to bet the company because the bonus plan incents the wrong kinds of behaviors. Those kinds of tests are actually part of the process we go through with both our auditors and our comp consultants.
Thank you. Ladies and gentlemen, I'm sorry we are now out of time. This concludes our question and answer segment. Thank you, everybody, for participating. I'd like to invite Cary Klafter back to the stage to read the preliminary voting results.
Thank you, Jane. Our voting results did not actually change very much from earlier this morning. We had a few votes come in, but most of our votes were in by last night. We had approximately 81% of our votes of all shares voted. That was about 4.4 billion shares. For the board of directors, as you know, each of the directors is voted on yes or no, and each director has to get a majority of yes votes to be reelected. All of the directors received between 88% and 99% yes votes on the votes voted for the individual directors. Each of our nominees has been reelected. With respect to our other items, Ernst & Young was ratified with approximately 98% positive vote. The equity incentive plan was approved with approximately 86% positive vote. The stock purchase plan was reapproved with approximately 97% positive vote.
The advisory vote on executive compensation was approved with approximately 95% vote. With regard to the advisory vote on the frequency of the advisory vote on executive compensation, approximately 75% of the votes were in favor of an annual vote on, say, on pay. Approximately 2% were in favor of a two-year cycle, and the remainder 21% were in favor of a three-year cycle. Those are the voting results. We will have the final voting results posted on our website and filed with the SEC early next week.
Thank you, Cary. As Cary mentioned, I would refer you to Intel's investor relations website. That's at www.intc.com for the final voting results and for financial updates throughout the year. I think that completes our agenda for today. Do I have a motion to adjourn the meeting? Second? Our meeting is adjourned. On behalf of Intel, I would thank you for attending the meeting and look forward to seeing you next year. Thank you.