Good morning, it's 9:00 A.M. The 2023 annual meeting of the stockholders of Microchip Technology Incorporated will please come to order. That clock is wrong. I'll go by my phone. I'm Steve Sanghi, Executive Chair of the board of Microchip Technology. I would also like to introduce additional members of the audience. First, I will introduce the other members of the board of directors. Ganesh Moorthy, our President and CEO of Microchip Technology; Matt Chapman, Retired CEO of software assessment company, Northwest Evaluation Association; Karlton Johnson, CEO of DeLaine Strategy Group LLC; Wade Meyercord, President of Meyercord & Associates; Karen Rapp, Retired CFO of National Instruments; Robert Rango, Retired President and CEO of Enevate Corp. Next, I will introduce the company's executive staff that are in attendance today. Rich Simoncic, Executive Vice President, Analog Power and Interface Business Unit. Eric Bjornholt, Senior Vice President, Chief Financial Officer.
Steve , Senior Vice President, MCU8 and MCU16 Business Units. Matthew Bunker, Senior Vice President of Back-end Operations. Lauren Carr, Senior Vice President of Global Human Resources. Mike Finley, Senior Vice President of Fab Operations. Patrick Johnson, Senior Vice President, Mixed Signal, Timing and FPGA Business Units. Joseph Krawczyk, Senior Vice President, Worldwide Client Engagement. Sumit Mitra, Senior Vice President, 32-bit MCU, MPU, and Wireless Business Unit. Mitchell Obolsky, Senior Vice President, Networking and Data Center Business Unit. Mark Reiten, Corporate Vice President, Technology Licensing Business Unit. Two partners of the firm of Ernst & Young, the company's independent registered public accounting firm, are also here today. They're Ron Butler and John Gaylord. I would also like to introduce Rob Suffoletta in the back, a partner with the law firm of Wilson Sonsini Goodrich & Rosati, who serves as the company's outside legal counsel.
Pursuant to the company's bylaws, I have been appointed by the board of directors to serve as chair of the meeting. Rob Suffoletta will serve as the secretary of the meeting. Notice of this meeting, stating the time, place, and purposes, was mailed on or about July 14th, 2023, postage prepaid to each stockholder of record at the close of business on June 23, 2023. Affidavits of mailing, affidavits of mailing have been received by the company and are available for inspection at this meeting. 544,333,965 shares of common stock were outstanding at the close of business on June 23rd, 2023, and are entitled to vote at this meeting.
Now, with respect to the voting of your shares, if you have already mailed in your proxy and you do not want to change your vote, then you do not need to do anything at this time. If you did not turn in your proxy, if you wish to change a proxy you previously submitted, or if you hold a proxy to vote the shares of another stockholder, please submit those proxies to us at this time. Marcy, please collect these proxies now. Anybody with a proxy in hand? Anybody who wants to change their vote? Lastly, if there is anyone here who did not submit a proxy and who wishes to vote their shares in person, please raise your hand, and Marcy will distribute a ballot to you. Does anybody need a ballot?
We will collect those ballots when we open the polls for voting in a few moments. In accordance with the provisions of Delaware law, the board of directors has appointed Rob Suffoletta to serve as the Inspector of Election at this meeting, and he subscribed the oath of his office prior to the meeting. Rob has informed me that a quorum is present, and I declare the meeting open for business. If there are any questions that relate directly to one of the proposals, I would like to receive that question at the time that we consider each of the proposals. Otherwise, we have reserved time after we complete the business matters of the meeting for a company presentation and a question-and-answer period. Please hold all questions not related to the proposal until that question-and-answer period.
The first proposal is the election of the company's Directors to serve for the ensuing year and until their successors are elected and qualified. A nominee for Director shall be elected if the votes cast for such nominee's election exceed the votes cast against such nominee's election. Nominations for Directors will now be received. I recognize Eric Bjornholt.
My name is Eric Bjornholt. I nominate Steve Sanghi, Matthew W. Chapman, Karlton D. Johnson, Wade F. Meyercord, Ganesh Moorthy, Robert A. Rango, and Karen M. Rapp for the election as directors of the company.
Rich Simoncic.
I second that nominations.
Since no other nominations were received, the nominations are now closed. The second proposal is to approve an amendment and restatement to our 2001 Employee Stock Purchase Plan to extend the term of the plan by 10 years to August 31st, 2034. The affirmative vote of the holders of the majority of the votes cast affirmatively or negatively at the meeting is required to approve this proposal. Is there any discussion on this proposal? A motion calling for a vote on this proposal will now be received. I recognize Rich Simoncic.
My name is Rich Simoncic. I move for the adoption of the following resolution. Resolved to approve an amendment and restatement of our 2001 Employee Stock Purchase Plan to extend the term of the plan by 10 years to August 31st, 2034.
Lauren Carr?
I second the motion.
The third proposal is to approve an amendment and restatement of our 1994 International Employee Stock Purchase Plan to extend the term of the plan by 10 years to November 30th, 2034. The affirmative vote of the holders of the majority of the votes cast affirmatively or negatively at the meeting, is required to approve the proposal. Is there any discussion on this proposal? A motion calling for a vote on this proposal will now be received. I recognize Lauren Carr.
My name is Lauren Carr. I move for the adoption of the following resolution. Resolved to approve an amendment and restatement of our 1994 International Employee Stock Purchase Plan to extend the term of the plan by 10 years to November 30, 2034.
Matthew Bunker?
I second the motion.
The fourth proposal is to ratify the appointment of Ernst & Young LLP, as the independent registered public accounting firm of Microchip for the fiscal year ending March 31st, 2024. The affirmative vote of the holders of the majority of the votes cast affirmatively or negatively at the meeting, is required to adopt the proposal. Is there any discussion on this proposal? A motion calling for a vote on this proposal will now be received. I recognize Matthew Bunker.
My name is Mathew Bunker. I move for the adoption of the following resolution. Resolved to ratify the appointment of Ernst & Young LLP, as the independent registered public accounting firm of Microchip for the fiscal year ending March 31st, 2024.
Mike Finley.
I second the motion.
The fifth proposal is to hold an advisory non-binding vote regarding the compensation of our named executives. The affirmative vote of the holders of the majority of the votes cast affirmatively or negatively at the meeting, is required to approve this proposal. Is there any discussion on this proposal? A motion calling for a vote on this proposal will now be received. I recognize Michael Finley.
My name is Mike Finley. I move for the adoption of the following resolution. Resolved to approve an advisory non-binding basis, the compensation of our named executives.
Joseph Krawczyk.
I second the motion.
The sixth proposal is to hold an advisory non-binding vote regarding the frequency period of the advisory executive compensation vote to be held every one, two, or three years. Is there any discussion on this proposal? A motion calling for a vote on this proposal will now be received. I recognize Joseph Krawczyk.
My name is Joseph Krawczyk. I move for the adoption of the following resolution. Resolved an advisory non-binding vote regarding the frequency period of the advisory executive compensation vote be held every year.
Patrick Johnson.
I second the motion.
The seventh proposal is a shareholder proposal requesting that our board of directors commission an independent third-party report at reasonable expense and excluding proprietary information on our due diligence process, to determine whether our customers' use of our products contribute or are linked to violations of international law. The affirmative vote of the holders of the majority of the votes cast affirmatively or negatively at the meeting, is required to approve this proposal. At this time, I would like to introduce Mr. Rob Fohr. He's the Director of Faith-Based Investing and Corporate Engagement, Presbyterian Church (USA), who's a representative of the proponent of this shareholder proposal. Mr. Fohr will have 4 minutes to present the shareholder proposal. Would Mr. Fohr step up here, introduce himself, and make the proposal?
Thank you, Mr. Chair. Good morning. My name is Rob Fohr, and as the chair said, I am the Director of Faith-Based Investing and Corporate Engagement for the Presbyterian Church (U.S.A.). I am here on behalf of the Presbyterian Church (U.S.A.), and as a representative of the lead filer, the Presbyterian Church (U.S.A.), who, through our investing agencies, is a long-term shareholder of Microchip Technology. Proposal 7 asks Microchip Technology's board of directors to commission an independent third-party report on our company's due diligence process to determine whether customers' use of its products and services contribute or are linked to violations of international law. Like everyone here, our church is deeply saddened and shocked by Russia's unprovoked invasion, war of aggression, and occupation of democratic Ukraine.
Every day, the Russian military commits war crimes, including the targeting of civilians and civilian infrastructure, such as hospitals, schools, apartment buildings, and resulting in the deaths of more than 9,000 civilians and displacements of millions more. The United States government and its allies and partners have deployed an unprecedented number of economic sanctions against the Russian state and its affiliated companies, and is in the process of tightening export controls related to Russia and Iran's ability to procure microelectronics. Our company states that it is complying with current sanctions and trade regulations, but this is the legal minimum required in the face of Russian aggression.
If nonprofit organizations like the Royal United Services Institute are able to trace the use of our company's products from the point of manufacture to the point of prohibited end use by the Russian military in Ukraine, we expect Microchip to do everything in its power to limit its contributions to human rights violations in Ukraine and related financially material risks for the company and its investors. Our company has also noted that the complexity and volume of multi-tiered global electronic supply chains make 100% traceability of semiconductor products unachievable. We understand and accept these complexities. We are not compl-, we're not requesting, nor do we expect complete traceability. However, in response to the Russian invasion, peer semiconductor and other tech companies have taken steps beyond basic sanctions compliance to address the human rights and financially material risks raised in this proposal.
As investors, we are asking our company to commission a third-party report to better assess the escalating legal, regulatory, reputational, and moral risks through heightened human rights and know your customer due diligence processes in Russia, Ukraine, and Ukraine, and across conflict-affected and high-risk areas. There are demands of the law and demands of human decency. Our company and its peers across the microelectronics industry must endeavor to meet both in Ukraine, Russia, and wherever their products are misused in violation of international law. Again, I want to underscore that sanctions compliance should be the floor of corporate action, not the aspirational ceiling. This proposal will assist our company in doing just that. We therefore urge shareholders to vote for its passage. Thank you.
You can stay here and give a response. You can make the proposal.
Yeah.
In quick response, Microchip does not support- Sorry. Microchip does not support or condone the use of our products in Russian weapon systems or other weapon systems used against civilians. The U.S. government issued sanctions and export controls targeting at preventing advanced semiconductors from being used in weapons production by the Russian defense industry. As a result, U.S. exports of semiconductors to Russia plunged by more than 90%, according to the U.S. government. Microchip is committed to having robust export controls in place so that our products are used appropriately and in alignment with our guiding values. Further, Microchip voluntarily stopped selling our products into Russia and Belarus in March of 2022, before the new sanctions were implemented, because we are against the actions of Russia against the Ukrainian people.
Because we have corporate policies and practices addressing human rights and export controls, after careful consideration, our board concluded that adoption of this proposal is not necessary. We support regulatory and industry-driven efforts to appropriately limit the distribution of our products to authorized parties for permissible uses. We have described our efforts more fully in the proxy, and the board recommends a vote against this proposal. Is there any further discussion on this proposal? If not, a motion calling for a vote on this proposal will now be received. I recognize Mr. Fohr.
Thank you. I move for the adoption of the following resolution. Resolved that Microchip Board of Directors commission an independent third-party report at a reasonable expense, excluding proprietary information, on its due diligence process to determine whether its customers' use of its products contribute or are linked to violations of international law, as more fully described in the company's proxy statement dated July seventh, 2023.
Thank you. Is there a second to this motion? Although there is no second to this motion, I hereby use my discretion as chair of this meeting to allow a vote on this proposal to proceed. The polls are now open for voting on the proposals before the meeting. The time and date of the opening of the polls is 9:17 A.M. today, August 22, 2023. Missy, please collect the ballots of those stockholders who wish to vote in person. If you have a ballot, please raise your hand so that we can collect them. Anyone needs a ballot? Anyone need? Okay, the polls are now closed. The time and date of the closing of the polls is 9:18 A.M. today, August 22nd, 2023. Will the Inspector of Election please announce the vote?
With regard to Proposal One, I hereby declare that all the nominees have been duly elected as directors of the company to serve for the ensuing year and until their successors are elected and qualified. With respect to Proposal Two, I hereby declare that the proposal to approve an amendment and restatement of Microchip's 2001 Employee Stock Purchase Plan to extend the term of the plan by 10 years to August 31, 2034, has been approved. With regard to Proposal Three, I hereby declare that the proposal to approve an amendment and restatement of Microchip's 1994 International Employee Stock Purchase Plan, to extend the term of the plan by 10 years to November 30, 2034, has been approved.
With regard to Proposal Four, I hereby declare that the proposal to ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm of Microchip for the fiscal year ending March 31st, 2024, has been adopted. With regard to Proposal Five, I hereby declare the compensation of the named executive officers has been approved by non-binding advisory vote. With respect to Proposal Six, I hereby declare that the frequency period of the executive compensation vote of one year has been approved by non-binding advisory vote. With respect to Proposal Seven, I hereby declare that the stockholder proposal, requesting that the Microchip board of directors commission an independent third party report at reasonable expense and excluding proprietary information on its due diligence process to determine whether its customers' use of its products contribute or are linked to violations of international law, has not been approved.
This concludes the formal portion of our meeting. After I adjourn the meeting, please stay seated and there'll be a company presentation right after that. Before I adjourn the meeting, is there any further business? If not, I will entertain a motion to adjourn. Sumit Mitra?
I move that the meeting be adjourned.
Mr. Obolsky, ?
I second the motion.
All in favor, say, "Aye.
Aye.
Opposed, say, "No." Ayes have it. The meeting is adjourned. At this time, Mr. Ganesh Moorthy, President and CEO of Microchip, will provide a company presentation, and afterwards, we will entertain questions from stockholders. Mr. Moorthy?
Okay, good morning, everybody. I will try to give you a quick update on our company, where we've been, what we're doing, and where we're headed. Before I get started, I have the Safe Harbor. During the course of this presentation, we're gonna be making projections and other forward-looking statements regarding the future events and the future financial performance of the company. We wish to caution everyone that such statements are predictions and that the actual results and events may differ materially, and we refer you to our public filings with the SEC, in which identify important risk factors that may impact Microchip's business and results of operations. You know, what, what drives us every day, 22,500 employees worldwide, is our purpose.
Our purpose is, how do we figure out to empower the innovation of the 100,000-plus customers we have, and that innovation, which will enhance the human experience. We do that by providing them with building blocks that have smart, connected, and secure technology solutions. Nice words. Let me give you a picture of what does that mean. Here's a broad representation in many different markets. You can go from industrial, to automotive, to data center, to space, to defense, to communications. Every day, our customers are finding ways to provide all kinds of innovative solutions, things that make your lives, our lives, better. That's what we do, is, we wake up to try to find what is it that we can do to give them the enabling building blocks to empower their innovation.