Lam Research Corp DEF 14A, filed Sep 27, 2023

Lam Research Corp (LRCX)

DEF 14A 2023-09-27 For: 2023-11-07

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Added on June 12, 2026

About this DEF 14A

Lam Research Corp filed this DEF 14A on September 27, 2023.

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	Category	Details
	Date and Time	Tuesday, November 7, 2023 9:30 a.m. Pacific Standard Time
	Place	Via the Internet at virtualshareholdermeeting.com/ LRCX2023
	Record Date	Only stockholders of record at the close of business on September 8, 2023, the “Record Date,” are entitled to notice of, and to vote at, the annual meeting.

#	Proposal	Our Board’s Recommendation
1.	Election of eleven directors to serve until the next annual meeting of stockholders, and until their respective successors are elected and qualified	þ	FOR each Director Nominee
2.	Advisory vote to approve our named executive officer (“NEO”) compensation	þ	FOR
3.	Advisory vote to approve the frequency of holding future advisory votes on NEO compensation	þ	ONE YEAR
4.	Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2024	þ	FOR
Transaction of such other business as may properly come before the annual meeting (including any adjournment or postponement thereof)

Proxy Statement Summary			1
About Lam Research Corporation	1	Director Nominee Key Qualifications, Skills, and Experiences	3
Fiscal Year 2023 Financial Highlights	2		3
Proposals and Voting Recommendations	2	Corporate Governance Highlights	5
Summary Information Regarding Director Nominees	2	Executive Compensation Highlights	6
Director Nominee Composition Highlights	3	ESG Highlights	7
Stock Ownership			9
Security Ownership of Certain Beneficial Owners and Management	9
Governance Matters			11
Corporate Governance	11	Meeting Attendance	16
Corporate Governance Policies	11	Board Committees	16
Our Approach to Ensuring Board Effectiveness	11	Board’s Role and Engagement	18
Board Nomination Policies and Procedures	14	Stockholder Engagement	20
Director Independence Policies	14	Culture and Human Capital Management	21
Leadership Structure of the Board	15	Environmental, Social and Governance Matters	22
Other Governance Practices	15	Director Compensation	25
Compensation Matters			28
Executive Compensation and Other Information	28	CEO Pay Ratio	57
Compensation Discussion and Analysis (see Table of Contents on page 28)	28	Pay Versus Performance	58
	28	Securities Authorized for Issuance under Equity Compensation Plans	61
Compensation Committee Report	47		61
Compensation Committee Interlocks and Insider Participation	47
Executive Compensation Tables	48
Audit Matters			62
Audit Committee Report	62	Fees Billed by Ernst & Young LLP	63
Relationship with Independent Registered Public Accounting Firm	63	Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services	64
Annual Evaluation and Selection of Independent Registered Public Accounting Firm	63	Certain Relationships and Related Party Transactions	64
Voting Proposals			65
Proposal No. 1: Election of Directors	65	Proposal No. 4: Ratification of the Appointment of Ernst & Young LLP as our Independent Registered Public Accounting Firm for Fiscal Year 2024 Other Voting Matters	79
2023 Nominees for Director	66
Proposal No. 2: Advisory Vote to Approve Our Named Executive Officer Compensation	77
	77		79
Proposal No. 3: Advisory Vote to Approve the Frequency of Holding Future Stockholder Advisory Votes on Named Executive Officer Compensation	78
Voting and Meeting Information			80
Information Concerning Solicitation and Voting	80	Other Meeting Information	82
Appendices			84
Appendix A - Information Regarding Non-GAAP Financial Measures	84

	Voting Matters		Board Vote Recommendation
	Proposal No. 1: Election of Directors		FOR each nominee
	Proposal No. 2: Advisory Vote to Approve Our Named Executive Officer Compensation		FOR
	Proposal No. 3: Advisory Vote to Approve the Frequency of Holding Future Stockholder Advisory Votes on Our Named Executive Officer Compensation		ONE YEAR
	Proposal No. 4: Ratification of the Appointment of Ernst & Young LLP as our Independent Registered Public Accounting Firm for Fiscal Year 2024		FOR
	Transaction of such other business as may properly come before the annual meeting (including any adjournment or postponement thereof)

AC – Audit committee		C – Chair
CHC – Compensation and human resources committee		M – Member
NGC – Nominating and governance committee		FE – Audit committee financial expert (as determined based on SEC rules) * – Qualifies as an audit committee financial expert (as determined based on SEC rules)

Key Qualifications, Skills & Experiences of Director Nominees	Sohail U. Ahmed	Timothy M. Archer	Eric K. Brandt	Michael R. Cannon	John M. Dineen	Ho Kyu Kang	Bethany J. Mayer	Jyoti K. Mehra	Abhijit Y. Talwalkar	Lih Shyng (Rick L.) Tsai	Leslie F. Varon
*Industry Knowledge* – Knowledge of and experience with our semiconductor and broader technology industries and markets provides our Board members with a deeper understanding of our products and services, the market sectors in which we and our customers compete, and the broader technology end markets that drive demand in our industry.	✓	✓	✓	✓		✓	✓		✓	✓	✓
*Customer/Deep Technology Knowledge* – Directors who possess deep knowledge and understanding of semiconductor processing equipment technologies, assist our Board in overseeing our business and strategies and enhance the Board’s understanding of our customers’ markets and needs.	✓	✓	✓			✓			✓	✓
*Marketing, Disruptive Technology, and Strategy Experience* – Directors with extensive knowledge and experience in business-to-business marketing and sales, and services and/or business development, or experience identifying and developing disruptive technologies and leading corporate strategy, provide value to the Board by offering critical insights and expertise on identifying and understanding new markets, expanding market share, and communicating with customers, particularly where such experience is in a capital equipment industry, and also provide the Board with critical guidance needed to progress in our innovation goals and drive semiconductor breakthroughs.		✓	✓	✓	✓		✓		✓	✓
*Leadership Experience* – Current or former experience in an executive-level leadership position at a significant business allows our directors to provide the Board with important perspectives and knowledge regarding business strategy, operations, corporate culture, succession planning, and management and leadership best practices.	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓

Board and Other Governance Information	As of September 2023
Size of Board as Nominated	11
Number of Independent Nominated Directors	10
Number of Nominated Directors Who Attended ≥75% of Meetings	10	⁽¹⁾
Number of Nominated Directors on More Than Four Public Company Boards	0
Number of Nominated Non-Employee Executive Officer Directors Who Are on More Than Two Public Company Boards	0
Limitations on Director Commitments, Including Other Board and Committee Memberships and Leadership, With Commitments Evaluated Annually (Page 15)	Yes
Directors Subject to Stock Ownership Guidelines (Page 16)	Yes
Hedging and Pledging Prohibited (Page 11)	Yes
Annual Election of Directors (Page 65)	Yes
Voting Standard (Page 65)	Majority
Plurality Voting Carveout for Contested Elections	Yes
Separate Chair and CEO	Yes
Independent Board Chair (Page 15)	Yes
Independent Directors Meet Without Management Present (Page 15)	Yes
Annual Board (Including Individual Director) and Committee Self-Evaluations (Page 12)	Yes
Annual Independent Director Evaluation of CEO (Page 18)	Yes
Risk Oversight by Full Board and Committees (Page 18)	Yes
Commitment to Board Refreshment and Diversity (Page 12)	Yes
Robust Director Nomination Process (Page 14)	Yes
Significant Board Engagement (Page 18)	Yes
Board Orientation/Education Program (Page 13)	Yes
Code of Ethics Applicable to Directors (Page 11)	Yes
Stockholder Proxy Access (Pages 14, 82)	Yes
Stockholder Ability to Act by Written Consent	Yes
Stockholder Engagement Program (Page 20)	Yes
Poison Pill	No
Board Oversight of ESG (including Climate), Human Capital, Information Security & Political Activities (Page 18)	Yes
Publication of Annual ESG Report aligned with SASB and TCFD (Pages 7, 22)	Yes

	Goals		2022 Progress
	Governance
	• Continue to expand our disclosure and alignment with industry-recognized frameworks and standards		• Our efforts to increase disclosure raised our ratings and rankings with third parties
	Product Innovation
	• 83% of customers measured by emissions set science-based targets (“SBTs”)		• 16.9% of customers measured by emissions have set SBTs
	Sustainable Operations⁽¹⁾
	• Achieve net zero greenhouse gas (GHG) emissions by 2050 by meeting the following targets: – Achieve 100% renewable electricity⁽²⁾by 2030 – Reduce absolute Scope 1 and 2 (market-based) GHG emissions 25% by 2025 and 60.6% by 2030 from a 2019 baseline; by 2040, achieve net zero operations⁽³⁾ – Achieve 12 million kilowatt-hours (kWh) in total energy savings from a 2019 baseline • Achieve zero waste to landfill for hazardous waste • Achieve 17 million gallons of water savings (15%) in water-stressed regions from a 2019 baseline		• Sourced 44% renewable electricity globally in 2022 • 207% increase in Scope 1 and 2 (market-based) GHG emissions • Achieved 6.9 million kWh in energy savings • Diverted 99.99% of hazardous waste from landfills in 2022 • Achieved 46.9 million gallons of water savings in water-stressed regions, surpassing our 2025 goal by more than 175%; our updated goal will be to achieve 80 million gallons of water savings from a 2019 baseline
	Our Workplace
	• Build on our high-performance culture with global employee engagement at the global benchmark, as measured by our annual employee surveys • Maintain an Occupational Safety and Health Administration recordable injury rate at or below 0.4 annually • Increase the proportion of women (globally) and underrepresented employees (U.S.) across the Company		• Ended the year with an engagement score of 78, one point below the global top tier benchmark of 79 • Realized recordable injury rate of 0.35 in 2022 • Increased the proportion of women in our global workforce by 3.0% and underrepresented employees in the U.S. by 5.0% over 2021

	Goals		2022 Progress
	Responsible Supply Chain
	• Achieve more than 90% compliance rate with our social and environmental expectations across our top-tier suppliers • Engage with at least 50% of our top-tier suppliers on environmental sustainability opportunities • Increase engagement with all suppliers on social and environmental topics through assessment, training, and capacity building • 46.5% of suppliers measured by emissions will set SBTs		• Exceeded our goal with 94% of suppliers responding to our conflict minerals survey in 2022 • Exceeded our goal by engaging with 100% of top-tier suppliers in 2022 • Deepened supplier engagement through our inaugural ESG Supplier Forum, new supplier engagement platform, new monthly webinar series and newsletter, and additional trainings via the Responsible Business Alliance (RBA) • 14.5% of suppliers as measured by emissions have set SBTs
	Our Communities
	• Determine key targets for larger-scale impact aligned to a new strategic focus • Implement measurement of outcomes for key program and large-scale grants • Increase annual unique participation rate in all employee giving programs from 10% to 30% • Increase employee volunteer hours by 33% from a 2019 baseline		• Achieved goal by launching new social impact framework with three strategic focus areas to guide our giving and signature program initiatives • Began developing a reporting process and measurement outcomes • Increased annual unique employee participation rate from 10% in 2021 to 18% in 2022 • Achieved and surpassed our goal with employees completing 21,133 volunteer hours in 2022 for a total increase of 58% from a 2019 baseline and set a new goal to achieve 40,000 by end of 2025

Name of Person or Identity of Group	Shares Beneficially Owned (#)⁽¹⁾		Percentage of Class
*5% Stockholders*
The Vanguard Group 100 Vanguard Boulevard Malvern, PA 19355	11,788,267	⁽²⁾	8.92%
BlackRock, Inc. 55 East 52nd Street New York, NY 10055	11,026,970	⁽³⁾	8.34%
*Directors*
Sohail U. Ahmed	2,694		*
Timothy M. Archer (also a Named Executive Officer)	150,646		*
Eric K. Brandt	28,115		*
Michael R. Cannon	18,310		*
John M. Dineen	—		—
Ho Kyu Kang	452		*
Bethany J. Mayer	2,690		*
Jyoti K. Mehra	1,020		*
Abhijit Y. Talwalkar	12,999		*
Lih Shyng (Rick L.) Tsai	7,090		*
Leslie F. Varon	2,465		*
*Named Executive Officers (“NEOs”)*
Douglas R. Bettinger	96,966		*
Patrick J. Lord	17,774		*
Vahid Vahedi	24,712		*
Seshasayee (Sesha) Varadarajan	37,560		*
All current directors and executive officers as a group (17 people)	418,330		*

		Shares
	Sohail U. Ahmed	563
	Timothy M. Archer	62,405
	Eric K. Brandt	563
	Michael R. Cannon	563
	John M. Dineen	—
	Ho Kyu Kang	452
	Bethany J. Mayer	563
	Jyoti K. Mehra	563
	Abhijit Y. Talwalkar	563
	Lih Shyng (Rick L.) Tsai	563
	Leslie F. Varon	563
	Douglas R. Bettinger	3,545
	Patrick J. Lord	6,881
	Vahid Vahedi	1,514
	Seshasayee (Sesha) Varadarajan	15,270
	All current directors and executive officers as a group (17 people)	98,027

	Policy or Procedure	Summary
	Board committee charters*	Each of the Board’s audit, compensation and human resources, and nominating and governance committees has a written charter adopted by the Board that delegates authority and responsibilities to the committee. Each committee reviews its charter, and the nominating and governance committee reviews the charters of all of the committees, annually and recommends changes to the Board, as appropriate. See “Board Committees” below for additional information regarding these committees.
	Corporate governance guidelines*	We adhere to written corporate governance guidelines, adopted by the Board and reviewed annually by the nominating and governance committee and the Board. Selected provisions of the guidelines are discussed below, including in the “Board Nomination Policies and Procedures,” “Director Independence Policies,” and “Other Governance Practices” sections below.
	Corporate Code of Ethics*	We maintain a code of ethics that applies to all employees, officers, and members of the Board. The code of ethics establishes standards reasonably necessary to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, and full, fair, accurate, timely, and understandable disclosure in the periodic reports we file with the SEC and in other public communications. We will promptly disclose to the public any amendments to, or waivers from, any provision of the code of ethics to the extent required by applicable laws. We intend to make this public disclosure by posting the relevant material on our website, to the extent permitted by applicable laws.
	Global Standards of Business Conduct*	We maintain written standards of business conduct to address a variety of situations that apply to our worldwide workforce. Among other things, these global standards of business conduct address relationships and/or conduct with one another, with Lam (including conflicts of interest, safeguarding of Company assets, and protection of confidential information), and with other companies and stakeholders (including anti-corruption).
	Insider Trading Policy	Our insider trading policy restricts the trading of Company stock by our directors, officers, and employees, and includes provisions addressing insider blackout periods and prohibiting pledges of Company stock, and prohibiting such persons from engaging in hedging transactions, such as “cashless” collars, forward sales, equity swaps and other similar arrangements. Investments in exchange funds are permitted if the fund is broadly diversified and comprises less than 2% of Company stock; exceptions to the 2% threshold may be permitted on a case-by-case basis.

	As of September 8, 2023				As of September 9, 2022
Total number of directors	11				10
Part I: Gender Identity	Female	Male	Non-Binary	Did Not Disclose Gender	Female	Male	Non-Binary	Did Not Disclose Gender
Directors	3	8	–	–	4	6	–	–
Part II: Demographic Background
African American or Black	–	–	–	–	–	–	–	–
Alaskan Native or Native American	–	–	–	–	–	–	–	–
Asian	1	4	–	–	1	3	–	–
Hispanic or Latinx	–	–	–	–	–	–	–	–
Native Hawaiian or Pacific Islander	–	–	–	–	–	–	–	–
White (not of Hispanic or Latinx origin)	2	4	–	–	3	3	–	–
Two or More Races or Ethnicities	–	–	–	–	–	–	–	–
LGBTQ+	–	–	–	–	–	–	–	–
Did Not Disclose Demographic Background	–	–	–	–	–	–	–	–

Topics	What we heard from our stockholders	Our Perspective/How we responded
Director Qualifications, Skills and Experiences	Stockholders expressed an interest in better understanding the directors’ skills and experiences and their relevance to the Company.	In keeping with our regular practice, our nominating and governance committee has updated the matrix of director qualifications, skills and experiences, including the addition of several skills and experiences relevant to membership on our Board. In addition, we have newly incorporated into the matrix an explanation of why each identified qualification, skill or experience is valuable to the Company (see Fig. 5 “Director Nominee Key Qualifications, Skills and Experiences Highlights” on page 3).
ESG Oversight	Stockholders provided favorable feedback on the comprehensiveness of our ESG activities and disclosures. They were interested in further understanding the Board’s oversight of ESG.	In our ESG report for calendar year 2022 (available on our website at lamresearch.com/company/environmental-social-governance/), we have provided further disclosures regarding our ESG governance, priorities, long- and short-term goals and progress. We have also provided additional disclosure regarding these topics in this proxy statement (see Fig. 8 “ESG Highlights” on page 7 and “Environmental, Social and Governance Matters” beginning on page 22).
Climate	Stockholders provided favorable feedback on our net zero goals and roadmap. They were interested in further understanding our plan for executing our long-term goals and our approach for Scope 3 emissions.	In our ESG report for calendar year 2022, we have described our progress toward reaching our goal to achieve net zero GHG emissions by 2050, which include achieving Science-Based Targets initiative (“SBTi”) validation in 2022 for our near-term GHG-reduction goals. The ESG Report also further details our efforts in engaging with customers and suppliers on Scope 3 emissions reductions. (See also “Environmental, Social and Governance Matters” beginning on page 22).
Human Capital	Stockholders were interested in understanding the areas of focus at the board level for human capital.	We have continued to expand the scope of the workforce disclosure in our ESG report. We have also provided additional disclosure regarding the board’s oversight of human capital, including the human resource metrics that our compensation and human resources committee monitors on an ongoing basis, in this proxy statement (see “Culture and Human Capital Management” beginning on page 21).
Executive Compensation	See “Compensation Discussion and Analysis – Overview of Executive Compensation – 2022 Say on Pay Voting Results and Stockholder Outreach” beginning on page 33.

Annual Retainers⁽¹⁾	Calendar Year 2023 ($)	Calendar Year 2022 ($)	Fiscal Year 2023 ($)
Non-employee Director	87,500	87,500	87,500
Chair	150,000	150,000	150,000
Audit Committee−Chair	35,000	35,000	35,000
Audit Committee−Member	15,000	15,000	15,000
Compensation and Human Resources Committee−Chair	30,000	30,000	30,000
Compensation and Human Resources Committee−Member	10,000	10,000	10,000
Nominating and Governance Committee−Chair	20,000	20,000	20,000
Nominating and Governance Committee−Member	10,000	10,000	10,000


By internet	By phone	By mail

	Fees Earned or Paid in Cash ($)		Stock Awards ($)⁽¹⁾		All Other Compensation ($)⁽²⁾	Total ($)
Sohail U. Ahmed	103,750	⁽³⁾	278,246	⁽⁴⁾	—	381,996
Eric K. Brandt	127,500	⁽⁵⁾	278,246	⁽⁴⁾	—	405,746
Michael R. Cannon	122,500	⁽⁶⁾	278,246	⁽⁴⁾	—	400,746
Ho Kyu Kang	87,500	⁽⁷⁾	226,086	⁽⁸⁾	—	313,586
Catherine P. Lego⁽⁹⁾	—		—		30,978	30,978
Bethany J. Mayer	115,000	⁽¹⁰⁾	278,246	⁽⁴⁾	—	393,246
Jyoti K. Mehra	100,000	⁽¹¹⁾	278,246	⁽⁴⁾	—	378,246
Abhijit Y. Talwalkar	257,500	⁽¹²⁾	278,246	⁽⁴⁾	—	535,746
Lih Shyng (Rick L.) Tsai	97,500	⁽¹³⁾	278,246	⁽⁴⁾	—	375,746
Leslie F. Varon	122,500	⁽¹⁴⁾	278,246	⁽⁴⁾	—	400,746

	Name	Accumulated Post-Retirement Benefit Obligation, as of June 25, 2023 ($)
	Sohail U. Ahmed	—
	Eric K. Brandt	—
	Michael R. Cannon	—
	John M. Dineen	—
	Ho Kyu Kang	—
	Catherine P. Lego	377,000
	Bethany J. Mayer	—
	Jyoti K. Mehra	—
	Abhijit Y. Talwalkar	—
	Lih Shyng (Rick L.) Tsai	—
	Leslie F. Varon	—

	Named Executive Officer		Position(s)
	Timothy M. Archer		President and Chief Executive Officer
	Douglas R. Bettinger		Executive Vice President and Chief Financial Officer
	Patrick J. Lord		Executive Vice President and Chief Operating Officer
	Vahid Vahedi		Senior Vice President and Chief Technology Officer
	Seshasayee (Sesha) Varadarajan		Senior Vice President, Global Products Group

	Table of Contents	Page
I.	Overview of Executive Compensation	29
	Our Business, Our Industry Environment, and Our Financial Performance	30
	Executive Compensation Philosophy and Program Design	31
	2022 Say on Pay Voting Results and Stockholder Outreach	33
II.	Executive Compensation Governance and Procedures	34
	Role of the Compensation and Human Resources Committee	34
	Role Of Committee Advisors	34
	Role of Management	35
	Peer Group Practices and Survey Data	35
	Assessment of Compensation Risk	36
	Tax and Accounting Considerations	36
III.	Primary Components of NEO Compensation; CY2022 Compensation Payouts; CY2023 Compensation Targets and Metrics	36
	Base Salary	36
	Annual Incentive Program	37
	Long-Term Incentive Program	43
	Compensation Recovery, or “Clawback” Policy	46
	Stock Ownership Guidelines	46
	Severance/Change in Control Arrangements	46
	Other Benefits Not Available to All Employees	46

Element	How it is Paid	Purpose/Design
Base Salary	Cash	We believe the purpose of base salary is to provide competitive compensation to attract and retain top talent and to provide employees, including our NEOs, with a fixed and fair amount of compensation for the jobs they perform. Accordingly, we seek to ensure that our base salary levels are competitive in reference to peer group practice and market survey data.
Annual Incentive Program (AIP)	Cash	Our annual incentive program is designed to provide annual, performance-based compensation that is based on the achievement of pre-set annual financial, strategic, and operational objectives aligned with outstanding performance, and will allow us to attract and retain top talent, while maintaining cost-effectiveness to the Company. For more details regarding the design of the annual incentive program, see “III. Primary Components of NEO Compensation; CY2022 Compensation Payouts; CY2023 Compensation Targets and Metrics - Annual Incentive Program” below.
Long-Term Incentive Program (LTIP)	A combination of: • market-based performance restricted stock units (“Market-based PRSUs”); • stock options; and • service-based RSUs	Our long-term incentive program is designed to attract and retain top talent, provide competitive levels of compensation, align pay with stock performance over a multi-year period, reward our NEOs for outstanding Company performance, and create stockholder value over the long-term. The program design provides that the target award opportunity is awarded in a combination of Market-based PRSUs, stock options, and service-based RSUs. For more details regarding the design of the LTIP, see “III. Primary Components of Named Executive Officer Compensation; Calendar Year 2022 Compensation Payouts; Calendar Year 2023 Compensation Targets and Metrics−Long-Term Incentive Program−Design” below.

Metric	Lam Research ($M)	Target for Peer Group	Peer Group Median ($M)
Revenue (last completed reported four quarters as of July 5, 2022)	16,737	Approximately 0.33 to 3 times Lam	18,918
Market Capitalization (30-day average as of July 5, 2022)	64,664	Approximately 0.33 to 3 times Lam	75,385

Advanced Micro Devices, Inc.	Broadcom Inc.	Microchip Technology Incorporated	Qualcomm Incorporated
Agilent Technologies, Inc.	Corning Incorporated	Micron Technology, Inc.	Seagate Technology Holdings Plc
Analog Devices, Inc.	Intel Corporation	NVIDIA Corporation	Texas Instruments Inc.
Applied Materials, Inc.	KLA Corporation	NXP Semiconductors N.V.	Western Digital Corporation

Named Executive Officer	Annual Base Salary 2023 ($)	Annual Base Salary 2022⁽¹⁾ ($)
Timothy M. Archer	1,150,000	1,150,000
Douglas R. Bettinger	705,000	705,000
Patrick J. Lord	577,661	577,661
Vahid Vahedi	537,151	537,151
Seshasayee (Sesha) Varadarajan	537,151	537,151

Calendar Year	Average NEO’s Annual Incentive Payout as % of Target Award Opportunity	Business Environment
2022	96	Strong revenue, profitability, and operating cash generation performance despite global supply chain constraints and inflationary pressures. Our installed base grew, and semiconductor investments increased across both memory and foundry/logic segments.
2021	168	Strong revenue, profitability, and operating cash generation performance, with growth in our served available market, market share, and installed base. Semiconductor equipment investments increased across both memory and foundry/logic segments.
2020	137	Strong revenue and profitability performance, with growth in our served available market, market share, and installed base. Demand for semiconductor equipment increased across both memory and foundry/logic segments.

Named Executive Officer	Target Award Opportunity (% of Base Salary)	Target Award Opportunity ($)⁽¹⁾
Timothy M. Archer	200	2,300,000
Douglas R. Bettinger	115	810,750
Patrick J. Lord	110	635,427
Vahid Vahedi	100	537,151
Seshasayee (Sesha) Varadarajan	100	537,151

	Rationale for Inclusion	Contribution to Individual Performance Factor
Corporate Scorecard Weighted Achievement	Reflects the Company’s performance relative to corporate-level annual operating plan goals, weighted according to the expected contributions of individual NEOs (and the organizations managed by them)	80%
Individual Achievement	Reflects the extent to which individual NEOs provide exceptional contributions during the year	20%

Corporate Goal Area	Objectives	Score
Market Performance and Execution	Relate to: growth in our served addressable market; success of new product launches; penetration of new market opportunities and defense of established positions; and achievement of market share targets.	97%
Safety, Quality and Customer Satisfaction	Relate to: safety; quality; growth of Customer Support Business Group revenue; on-time delivery of products; and customer satisfaction.	93%
Human Capital Management & ESG	Relate to: employee engagement, as measured by employee survey; employee inclusion, as measured by employee survey; employee diversity; talent retention; and recognition of ESG progress through continued inclusion in the Dow Jones Sustainability Index for North America.	95%
Financial Performance	Relate to: operating income; earnings per share; and gross margin.	93%

	Individual Weightings
	Market Performance and Execution	Safety, Quality and Customer Satisfaction	Human Capital Management & ESG	Financial Performance	Corporate Scorecard Weighted Achievement
Douglas R. Bettinger	20%	20%	20%	40%	93.8%
Patrick J. Lord	20%	40%	20%	20%	93.8%
Vahid Vahedi	30%	30%	20%	20%	94.2%
Seshasayee (Sesha) Varadarajan	30%	30%	20%	20%	94.2%

Named Executive Officer	Corporate Scorecard Weighted Achievement (80%)		Individual Achievement (20%)		Individual Performance Factor
Timothy M. Archer	n/a	⁽¹⁾	n/a	⁽¹⁾	0.954
Douglas R. Bettinger	93.8%		100%		0.950
Patrick J. Lord	93.8%		100%		0.950
Vahid Vahedi	94.2%		100%		0.954
Seshasayee (Sesha) Varadarajan	94.2%		100%		0.954

Named Executive Officer	Target Award Opportunity ($)⁽¹⁾	Maximum Payout under Funding Factor (225.0% of Target Award Opportunity) ($)⁽²⁾	Individual Performance Factor	Corporate Performance Factor	Actual Payouts ($)⁽³⁾
Timothy M. Archer	2,300,000	5,175,000	0.954	0.970	2,212,600
Douglas R. Bettinger	810,750	1,824,188	0.950	0.970	778,320
Patrick J. Lord	635,427	1,429,711	0.950	0.970	610,010
Vahid Vahedi	537,151	1,208,590	0.954	0.970	516,739
Seshasayee (Sesha) Varadarajan	537,151	1,208,590	0.954	0.970	516,739

	Named Executive Officer	Target Award Opportunity (% of Base Salary)
	Timothy M. Archer	200
	Douglas R. Bettinger	115
	Patrick J. Lord	110
	Vahid Vahedi	100
	Seshasayee (Sesha) Varadarajan	100

Equity Vehicles	Vesting	Terms
Market-based PRSUs • CEO/EVPs: 60% of Target Award Opportunity • SVPs: 55% of Target Award Opportunity	• Awards cliff vest three years from the March 1, 2023 grant date (the “Grant Date”) subject to satisfaction of a minimum performance requirement and continued employment. • Awards that vest at the end of the performance period are distributed in shares of our common stock.	• The number of Market-based PRSUs granted is determined by dividing the applicable percentage of the target opportunity by the 30 trading day average of the closing price of our common stock prior to the Grant Date, $497.18, rounded down to the nearest share. • The number of shares represented by the Market-based PRSUs that can be earned over the performance period is determined according to the performance parameters described in Figure 44 below.
Stock Options • CEO/EVPs: 20% of Target Award Opportunity • SVPs: 15% of Target Award Opportunity	• Awards vest one-third on the first, second, and third anniversaries of the Grant Date, subject to continued employment. • Awards are exercisable upon vesting. • Expiration is on the seventh anniversary of the Grant Date.	• The number of stock options granted is determined by dividing the applicable percentage of the target opportunity by the 30 trading day average of the closing price of our common stock prior to the Grant Date, $497.18, rounded down to the nearest share and multiplying the result by three. The ratio of three options for every RSU is based on a Black Scholes fair value accounting analysis. • The exercise price of stock options is the closing price of our common stock on the Grant Date.
Service-based RSUs • CEO/EVPs: 20% of Target Award Opportunity • SVPs: 30% of Target Award Opportunity	• Awards vest one-third on the first, second, and third anniversaries of the Grant Date, subject to continued employment. • Awards are distributed in shares of our common stock upon vesting.	• The number of RSUs granted is determined by dividing the applicable percentage of the target opportunity by the 30 trading day average of the closing price of our common stock prior to the Grant Date, $497.18, rounded down to the nearest share.

Parameter	Terms
Performance Period	Three years from the first business day in February (February 1, 2023 through January 31, 2026).
Performance Index	PHLX Semiconductor Sector Total Return Index, or “XSOX index”
Number of Shares	•	Based on our “total return” stock price performance compared to the market price performance of the Performance Index, subject to a ceiling as described below. The stock price performance or market price performance is measured using the average closing price for the 50 trading days prior to the dates the performance period begins and ends, assuming that any dividends paid on our common stock are reinvested on the ex-dividend date (consistent with the treatment of dividends in the Performance Index).
	•	The target number of shares represented by the Market-based PRSUs is increased by 2% of target for each 1% that our stock price performance exceeds the market price performance of the Performance Index; similarly, the target number of shares represented by the Market-based PRSUs is decreased by 2% of target for each 1% that our stock price performance trails the market price performance of the Performance Index. The result of the vesting formula is rounded down to the nearest whole number.
	•	A table reflecting the potential payouts depending on various comparative results is shown below in Figure 45.
Award Ceiling/Minimum	The final shares awarded cannot exceed 150% of target (requiring a positive percentage change in our stock price performance compared to that of the market price performance of the Performance Index equal to or greater than 25 percentage points) and can be as little as 0% of target (requiring a percentage change in our stock price performance compared to that of the market price performance of the Performance Index equal to or lesser than negative 50 percentage points).

	Lam’s Total Return % Change Performance Compared to XSOX Index % Change Performance	Market-based PRSUs That Can Be Earned (% of Target)⁽¹⁾
	+ 25% or more	150
	10%	120
	0% (equal to index)	100
	-10%	80
	-25%	50
	-50% or less	0

	Target Award Opportunity ($) by Long-Term Incentive Program
Named Executive Officer	2020/2022⁽¹⁾		2021/2023⁽²⁾	2022/2024⁽³⁾	2023/2025⁽⁴⁾
Timothy M. Archer		9,500,000	11,000,000	15,000,000	15,000,000
Douglas R. Bettinger		2,750,000	3,050,000	3,750,000	4,250,000
Patrick J. Lord		2,500,000	2,500,000	3,000,000	3,500,000
Vahid Vahedi		2,150,000	2,250,000	2,750,000	3,000,000
Seshasayee (Sesha) Varadarajan		2,150,000	2,250,000	2,750,000	3,250,000