At this time, I would like to turn the conference over to Jeffrey Li. Please go ahead when you are ready.
Thank you. Good morning, everyone, and welcome to Keysight's 2024 Annual Meeting of Shareholders Stockholders. My name is Jeffrey Li, and I'm Senior Vice President, General Counsel, and Secretary of Keysight, and I will chair today's meeting. With me today is Satish Dhanasekaran, our President and Chief Executive Officer. Other directors are participating via teleconference. There are two parts to today's meeting. First, I will cover the official annual meeting, and then Satish will offer his thoughts on Keysight's business and opportunities. Today's meeting is being recorded and will be posted to our investor relations website after the meeting. We will address questions at two points. While the polls are open for voting on the proposals during the official meeting, we will review questions and answer those questions that are relevant to the proposals up for consideration.
Then, after Satish's presentation, we will take general questions related to Keysight business. We will make every effort to respond to all relevant questions. With that, I'll now call Keysight's annual stockholders meeting to order. We are conducting the meeting in accordance with the company's bylaws. The agenda and the rules of procedure for today's meeting are on your seat. Please review them. In order to conduct an orderly meeting and to give all eligible stockholders and proxy holders an opportunity to participate, we ask that you adhere to these rules throughout the meeting. We have seven business items on the agenda today, which were covered in depth in our proxy materials. First, I would like to introduce the Keysight Board of Directors who are joining us by phone today.
Ronald Nersesian, the Chair of our board, joined by , Lead Independent Director, James Cullen, Charles Dockendorff, Richard Hamada, Michelle Holthaus, Paul Lacouture, Joanne Olsen, Robert Rango, and Kevin Stephens. We also re-welcome a representative of John Chevedden, Ms. Elsa Campos, who is here to present a stockholder proposal at the meeting. Lisa Brenton of Computershare Trust Company, N.A., will act as our Inspector of Election for this year's meeting and has executed an oath as Inspector of Election. Computershare has certified that the notice of the meeting and availability of proxy materials was timely provided to all stockholders of record as of January 22, 2024.
The Inspector of Election has informed me that as of January 22, 2024, the record date set by the board for determination of the eligibility to vote at today's meeting, there were 174,668,998 shares of common stock outstanding, each entitled to one vote. Lisa, will you please report next on the shares represented at the meeting?
My examination of the proxies on file shows that there are present by proxy 156 million shares of common stock... I'm sorry, 156,956,811 shares of common stock, all of which are represented by Mr. Nersesian and Mr. Li. The shares present by proxy represent approximately 90% of the shares of common stock outstanding and entitled to vote.
Thank you, Lisa. Please prepare and file a written report on the final count of shares in attendance at the meeting. I will file the report in the records of the company. Since we have a majority of the outstanding shares represented at the meeting, I declare that there is a quorum present and that we may proceed with the transaction of business at the meeting. I will now open the polls for voting. We ask any stockholder who has not previously submitted a proxy and who wishes to vote at today's meeting, to please complete and submit a ballot at this time. If you wish to vote, please raise your hand, and one of our ushers will assist you. When you have completed your ballot, please submit it to the Inspector of Elections.
We have six proposals from the company and one stockholder proposal, if properly presented, that stockholders have been asked to vote on. The first item is the election of directors. You have been asked to elect three Class I directors: Charles Dockendorff, Ronald Nersesian, and Robert Rango. The second item of business is to ratify the Audit and Finance Committee's appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for the 2024 fiscal year. At this time, I'd like to introduce Steve McCann from PricewaterhouseCoopers, who is responsible for the Keysight account. Steve is available if you have any questions. Does anyone have any questions for Steve? The third item of business is an advisory vote to approve the compensation of Keysight's named executive officers for fiscal year 2023.
The fourth item of business is to approve the amendment and restatement of Keysight's 2014 Equity and Incentive Compensation Plan. The fifth item of business is to approve the amendment and restatement of Keysight's Employee Stock Purchase Plan. The sixth item of business is to approve an amendment to Keysight's amended and restated certificate of incorporation to eliminate the supermajority voting requirement.... The seventh item of business is to consider and vote upon a stockholder proposal to adopt a simple majority vote standard under our charter, charter and bylaws. The stockholder proposal, its supporting statement, and the board's statement in opposition to this proposal are set forth in the company's proxy statement, and I will now read the proposal.
Shareholders request that our board take each step necessary so that each voting requirement in our charter and bylaws that is explicit or implicit due to default to state law, that calls for a greater than simple majority vote, be replaced by a requirement for a majority of the votes cast for and against applicable proposals or a simple majority in compliance with applicable laws. If necessary, this means the closest standard to a majority of the votes cast for and against such proposals consistent with applicable laws. This includes making the necessary changes in plain English. The proposal has been submitted by John Chevedden. John Chevedden has authorized Ms. Elsa Campos to serve as his representative and to comment on the resolution. As the chair of the meeting, I recognize Ms.
Campos for a period of 3 minutes, and I'd ask that you respect that time, please, Ms. Campos.
Proposal seven: Simple majority vote, sponsored by John Chevedden. Shareholders request that our board take each step necessary so that each voting requirement in our charter and bylaws that calls for a greater than simple majority vote be replaced by a requirement for a majority of the votes cast for and against applicable proposals or a simple majority in compliance with applicable laws. If necessary, this means the closest standard to a majority of the votes cast for and against such proposals. This includes making the necessary changes in plain English. Shareholders are willing to pay a premium for shares of companies that have excellent corporate governance. Supermajority voting requirements have been found to be one of six entrenching mechanisms that are negatively related to company performance, according to What Matters in Corporate Governance by Lucian Bebchuk of the Harvard Law School.
Supermajority requirements are used to block initiatives supported by most shareholders but opposed by status quo management. This proposal topic won 74%-88% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw Hill, and Macy's. These votes would have been higher than 74%-88% approval if more shareholders had access to independent proxy voting advice. This proposal topic also received overwhelming 98% support each at the 2023 annual meetings of American Airlines and The Carlyle Group. Simple majority vote would facilitate the adoption of importance to the governance of Keysight Technologies, which has the potential to improve the performance of Keysight Technologies. Simple majority vote is a step forward for the board of directors, management, and shareholders. Please vote yes. Simple majority vote, Proposal Seven.
Thank you, Ms. Campos. The board recommends a vote against this proposal for the reasons set forth in the company's proxy statement. Okay, having outlined the proposals, we will now take questions from any stockholder who has a question concerning these proposals. Each stockholder will be allowed to pose one question of up to three minutes in length. As a reminder, there will be time after Satish's presentation to ask questions about the business of the company. Does anyone have any questions? I'll make a final call for ballots and proxies and ask Lisa to report the preliminary results of the vote. If you have not already voted, please submit your vote now. Votes cannot be counted after the polls have closed. The polls are now closed. Lisa, may I have the preliminary results of the votes?
Thank you. For the election of directors, a majority of the votes cast were voted in favor of the election of each nominee. 154,499,789 shares, or 98% of the shares present, voted in favor of the ratification of the Audit and Finance Committee's appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for fiscal year 2024. 128,927,226 shares, or 91% of the shares present, voted in favor of the approval of the compensation of Keysight's named executive officers for fiscal year 2023, as described in the proxy statement.
131,537,849 shares, or 93% of the shares present, voted to approve the amendment and restatement of Keysight's 2014 Equity and Incentive Compensation Plan. 138,817,777 shares, or 98% of the shares present, voted to approve the amendment and restatement of Keysight's Employee Stock Purchase Plan. 140,845,299 shares, or 99% of the total shares outstanding, voted to approve the amendment to Keysight's amended and restated Certificate of Incorporation to eliminate supermajority requirement. 96,232,013 shares, or 68% of the shares present, voted to approve the stockholder proposal.
... Thank you, Lisa. Based on these preliminary results, I declare that each of the 3 nominees for director have been elected to serve a new 3-year term as Class One directors. Additionally, Proposal 2, ratification of PricewaterhouseCoopers as the company's external auditor. Proposal 3, approval of the compensation of Keysight's named executive officers for fiscal year 2023. Proposal 4, approval of the amended and restatement of Keysight's 2014 equity and incentive compensation plan. And Proposal 5, approval of the amendment and restatement of Keysight's employee stock purchase plan, have all passed. Proposal 6, approval of an amendment to Keysight's amended and restated certificate of incorporation to eliminate the supermajority voting requirement, received support from at least 80% of the shares outstanding and has passed.
In the coming days, Keysight will amend its certificate of incorporation through a filing with the Secretary of State of the State of Delaware. Proposal seven also passed. As an advisory proposal, the board will consider the outcome of the vote of the proposal in light of the fact that Proposal six also passed. In the next few days, Keysight will publicly report the final official results of today's votes. If you are interested, you can review these results through our SEC filings. That concludes the official part of today's stockholder meeting. I declare that the formal part of today's meeting is hereby adjourned. I hope you will stay with us for Satish's discussion of Keysight's business and opportunities. We will also leave time at the end to answer your questions. We will be making forward-looking statements about the performance of the company during Satish's presentation.
These statements are subject to risks and uncertainties and are only valid as of today. We assume no obligation to update them and encourage you to review our recent SEC filings for a more complete view of these risks and other factors. And now, I turn it over to Satish.
Thank you, Jeff, and good morning, everyone, and thank you for joining us today. I want to welcome you to Keysight's 2024 Annual Shareholder Meeting. I want to start by introducing Keysight, the market leader in design, emulation, and test solutions that enable our customers to develop, deploy complex technologies faster, with less risk, and throughout the product life cycle. As a diversified business, we now have broad, broad exposure to end-market innovations in commercial communications, aerospace, defense, and industrial end markets. While we have been a leader in our core markets for decades, Keysight remains future-focused and driven by our purpose of accelerating innovation to connect and secure the world. In fiscal year 2023, Keysight delivered strong financial results.
We finished the year with record revenues, gross margins, and operating profits amidst a challenging macroeconomic environment, even as we experienced normalization of demand from 2022 post-pandemic peak levels. These results demonstrate the durability and resilience of our operating model, along with the commitment of our team to execute under challenging macroeconomic conditions. Our fiscal 2023 performance builds on multiple years of strong financial results since becoming an independent company in 2014. Keysight has delivered strong business results, driven by our transformation to a software-centric solutions company. This transformation has enabled us to deliver a compounded growth of 8%, 930 basis points of improvements in gross margins, 1,200 basis point+ improvement in operating margins, while generating strong free cash flow and strong earnings growth year-over-year.
During this time, Keysight has outperformed the S&P 500, delivering a total shareholder return of 287% through the end of our fiscal year 2023. Keysight's results are delivered by our consistent execution of the software-centric solution strategy that has enabled us to capitalize on market drivers and serve our customers with total solutions that give them a time to market and productivity advantage. We have executed on our strategy. As we have done so, we've gone higher in the technology stack, making us more relevant to our customers by providing greater coverage to their workflow needs. We sustained market leadership in the core business of physical layer instrumentation by focusing the portfolio on the most complex measurement challenges across our end markets. We have expanded into the protocol layer, increasing our served addressable market by pursuing the software layers of test opportunity.
Today, that business is roughly 25% of our revenues, with over 50% of our software in the space. The application layer opportunity is small and nascent, but it offers exciting opportunities as we look ahead. At our recent Investor Day, I outlined four attractive end markets where we have starting to take deeper interest in. These were a result of considerable market research and customer validation that assessed our right to play in these segments and the strategic fit to our portfolio, along with the value creation potential in these markets. Consistent with that, we announced the acquisition of the ESI Group last year, further expanding our software solutions for simulation and emulation. We now have completed the ESI acquisition ahead of schedule and are pleased to welcome 800+ employees of ESI into the Keysight family.
The addition of ESI further strengthens our design engineering software portfolio and expands our addressable market, expands our addressable market in automotive, avionics, smart manufacturing, and human workflows. We view the growth potential of the simulation and emulation market favorably as the virtualization of design and prototyping increases in our end markets. A recent exciting example of the kinds of innovation Keysight is able to enable is the artificial intelligence inflection that's upon us. AI is driving a lot of investment across multiple industries as they recognize the profound potential of this technology. McKinsey estimates U.S. data center demand is to grow double digits through 2030. Data centers are now being redesigned and rearchitected to meet the demands of AI, a massive and complex undertaking.
Keysight solutions are enabling customers to address the challenges and the high cost of implementation, deployment of AI ML workloads, while ensuring customers achieve the performance and latency they desire. Our customers include many companies at the forefront of innovation in the space. This week, we expanded our collaboration with NVIDIA to bring our proven expertise and end-to-end solutions to NVIDIA's 6G research cloud platform for wireless AI research. We are very optimistic of what the future holds in AI and excited to be a participant in this nascent industry to enable acceleration in this area. Keysight has always maintained a customer-centric innovation and go-to-market model, and here is a few quotes from some of our key customers around the types of collaborations that we're engaged in and the contributions we're making to accelerate their innovations.
What ultimately differentiates Keysight today is the Keysight leadership model and the company's durable and sustainable competitive advantages that have enabled our past results and give us confidence in our future moving forward. Keysight's leadership model is our operating system, which has unlocked organizational capability and creativity, enabling us to deliver sustained value creation. To reiterate, what makes Keysight unique and differentiated are the deep, long-term customer relationships, the unmatched technology, expertise, and capabilities, the differentiated first-to-market solutions portfolio, durable and resilient business model, collaborative and high-performance culture. Keysight remains committed to corporate social responsibility. We're proud to be a member of the Dow Jones Sustainability Indices and a constituent of MSCI ESG Leaders Indexes. Keysight has received numerous CSR awards, including 3BL's , 100 Best Corporate Citizens, America's Most Just Companies, Barron's 100 Most Sustainable Companies.
Further, our solutions are helping customers deliver purposeful technologies to meet their CSR goals in areas such as automotive, renewable energy, data security and privacy, health and wellness offerings. 2023, we continued to make progress towards achieving Net Zero Emissions in the company's operations by 2040 and received approval for our Science-Based Targets. Lastly, I wanna highlight Keysight's disciplined and consistent capital allocation approach. We continue to invest to maintain our competitive differentiation in the marketplace and deliver organic growth. Second, we pursue M&A when strict strategic and financial hurdles are met. Third, we have remained focused on returning capital. In fiscal 2023, we repurchased 4.9 million shares for a total consideration of $702 million, or 58% of our free cash flow.
Keysight still has about $800 million remaining from the $1.5 billion share repurchase authorization we announced at our March 2023 Investor Day. With that, I'd like to thank you all for joining us today and for your continued support of Keysight as a shareholder, and your confidence in the future of our business. We remain incredibly focused on executing our long-term plan consistent with our strategic direction and are confident in the company's prospects. We now open it up for any questions you may have.