Microchip Technology : 2021 Proxy Statement

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(RULE 14a-101)

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Microchip Technology Incorporated

(Name of Registrant as Specified In Its Charter)

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	MICROCHIP TECHNOLOGY INCORPORATED
	2355 West Chandler Boulevard, Chandler, Arizona 85224-6199
	NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
	August 24, 2021
TIME:	9:00 a.m. Mountain Standard Time
PLACE:	Microchip Technology Incorporated
	2355 West Chandler Boulevard
	Chandler, Arizona 85224-6199

ITEMS OF BUSINESS: (1) The election of each of Matthew W. Chapman, Esther L. Johnson, Karlton D. Johnson, Wade F. Meyercord, Ganesh Moorthy, Karen M. Rapp and Steve Sanghi to our Board of Directors to serve for the ensuing year and until their successors are elected and qualified.

1. To approve an amendment and restatement of our Certificate of Incorporation to increase the number of authorized shares of common stock for the purpose of effecting a two-for- one forward stock split.
2. To approve an amendment and restatement of our 2004 Equity Incentive Plan to extend the term of the plan by ten years, to August 24, 2031.
3. To ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm of Microchip for the fiscal year ending March 31, 2022.
4. To hold an advisory (non-binding) vote regarding the compensation of our named executives.
5. To transact such other business as may properly come before the annual meeting or any adjournment(s) thereof.

	The Microchip Board of Directors recommends that you vote FOR each of the foregoing
	items.
RECORD DATE:	Holders of Microchip common stock of record at the close of business on June 28, 2021 are
	entitled to vote at the annual meeting.
ANNUAL REPORT:	Microchip's fiscal 2021 Annual Report, which is not a part of the proxy soliciting material, is
	enclosed.
PROXY:	It is important that your shares be represented and voted at the annual meeting. Whether or not
	you expect to attend the annual meeting in person, please vote your shares as promptly as
	possible using the enclosed proxy card, or via the internet or telephone as instructed in the
	enclosed materials, in order to ensure your representation at the annual meeting. You can
	revoke your proxy at any time prior to its exercise at the annual meeting by following the
	instructions in the accompanying proxy statement.
	/s/ Kim van Herk
	Kim van Herk
	Secretary

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting

of Stockholders to be Held on August 24, 2021

The Microchip Notice of Annual Meeting, Proxy Statement and Annual Report on Form 10-K for the fiscal year ended

March 31, 2021 are available at www.microchip.com/annual_reports.

Chandler, Arizona

July 19, 2021

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Letter from Your Executive Chair and Your CEO and President

This past fiscal year has been a year of remarkable performance and resilience for Microchip. With the rest of the global community, we faced the COVID-19 pandemic and its health, social and economic challenges. Our business focus and Guiding Values remained constant, helping us navigate these challenges. Key among the principles within our Guiding Values is our commitment to people who are our stakeholders - our employees, customers, sales channel partners, supplier partners, investors, and the communities in which we live and work. It is this commitment to people that drives us to connect with them, and work together to empower innovation which enhances the human experience, and in the process meet our corporate goals and stakeholder obligations.

Microchip's Strong Performance In Light of COVID-19

In fiscal 2021, the COVID-19 pandemic adversely impacted people and businesses. There were negative impacts on production, that created supply chain and market disruption, and a global disruption of economic activity. In response to the early indications of the COVID-19 pandemic, we took proactive measures to safeguard the health of our employees. We quickly shifted to a work from home model wherever possible, pivoted to virtual engagement with all of our stakeholders, curtailed business travel, and implemented an enhanced cleaning schedule and other precautions for our facilities.

Due to uncertainties related to the impact of the COVID-19 pandemic, in April 2020, we implemented a salary reduction program for our management and many other employees, as well as reducing cash bonuses and other discretionary expenses. The salary reduction program was comprised of a 20% salary reduction for our executive management, and a 10% reduction for U.S. non-manufacturing employees. Our Board also took a 20% cut in their cash compensation. In our U.S. factories some employees took salary reductions and others had rotating time off depending on the factory loading levels. Cost reduction actions in our non-U.S. locations depended on local law requirements in certain jurisdictions and employee consent for salary cuts in other jurisdictions. We believe it is a testament to our strong culture of shared sacrifices and shared rewards that about 98% of our worldwide team voluntarily participated in these expense reduction programs. Incredibly, about 5% of our worldwide team volunteered to take temporary salary reductions above the levels asked of them as a show of solidarity with Microchip at a time of extreme business uncertainty! As the uncertainties related to the COVID-19 virus abated and business conditions improved, board and management compensation reductions were reinstated later in the year.

In the second half of fiscal 2021, business conditions were very strong as businesses and individuals adapted to the effects of the pandemic. Supply chains, however, were stressed as many suppliers were not expecting the level of economic strength that occurred. Nonetheless, with this improvement in business conditions, Microchip was able to achieve records for net sales and non-GAAP gross margins, operating income, net income and EPS in fiscal 2021. It was heartening to see the "One World, One Microchip" spirit of our employees, and this spirit continues to give us strength and resolve to navigate the opportunities and challenges ahead of us.

It is unfortunate that the impact of the COVID-19 pandemic on individuals and in certain locations in which we operate remains uncertain, and the ultimate impact of the pandemic will depend on many factors, such as the effectiveness of the pandemic containment efforts, including the use and effectiveness of vaccines. We regularly monitor new information regarding the severity of COVID-19 and the ability to contain, treat, or prevent it, and continue to take precautions in our facilities to safeguard the health of our employees and communities.

Our CEO Transition

Succession planning at all levels is the hallmark of companies that are built to last. We have been working together in a shared leadership model for many years in order to effect a seamless transition for Microchip when the time was right.

As part of our succession planning process, effective March 1, 2021, Mr. Sanghi transitioned to an Executive Chair role and Mr. Moorthy was appointed CEO with a continuing role as President. Mr. Moorthy has been with Microchip since

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2001 and during this time has provided strong leadership and strategic development that have enabled Microchip to grow and continue to be an industry leader. Mr. Moorthy has a deep knowledge of Microchip's technology, industry, people and culture. Our Board is confident that Mr. Moorthy, and the rest of our leadership team, will deliver on our vision to be the very best embedded control solutions company ever!

Board Member Changes

Our board desires diversity in the background and experience of its members. We choose nominees whose

backgrounds, attributes and experiences, taken as a whole, will contribute to the high standard of board service at Microchip. We actively seek women and minority candidates for the pool from which board candidates are chosen. As a result of our recent process we were able to identify and appoint three new members to our Board: Mr. Moorthy and Ms. Rapp in January 2021, and Mr. Johnson in April 2021. Mr. Day is retiring from the Board effective on the date of the annual meeting and as such was not nominated for re-election to the Board.

Our board, and our executive management are committed to fostering an environment where a diversity of perspectives is heard. Our board nominees at our 2021 annual meeting include 43% people of color and 29% female. Each of our board nominees brings extensive experience and their own perspectives to board discussions. With respect to our new board members, Mr. Moorthy, our current CEO, brings his extensive knowledge of Microchip and our industry, Ms. Rapp brings her background in finance and financial reporting, and Mr. Johnson is well-grounded in cyber and data security matters as well as government procurement.

ESG / Sustainability

In fiscal 2021, we established an ESG Steering Committee to assist in the development and coordination of our corporate ESG Goals. It is a matrixed team, comprised of executives and senior managers from various disciplines such as compliance, facilities, finance, human resources, legal, marketing communications, operations, sales, and technology. Our ESG Steering Committee has oversight of programs, training and goal setting for our ESG areas, and in fiscal 2021 focused on our programs related to environmental sustainability, supply chain transparency, combatting forced labor, and diversity and inclusion. For more information on our programs, please see our website, and our 2020 Sustainability Report at https:// www.microchip.com/en-us/about/corporate-responsibility/sustainability.

Thank you for your continued support of Microchip.

Steve Sanghi	Ganesh Moorthy
Executive Chair	President and CEO