NVIDIA (NVDA) DEF 14ADefinitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

(Amendment No. )

By Order of the Board of Directors

Timothy S. Teter

Secretary

2788 San Tomas Expressway, Santa Clara, California 95051

April 23, 2021

TABLE OF CONTENTS

PROXY SUMMARY

This summary highlights information contained elsewhere in the proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.

2021 Annual Meeting of Stockholders

Election of Directors (Proposal 1)

The following table provides summary information about each director nominee:

* Previously served as a member of our Board from 1993 until 2006

Recent Refreshment, Board Demographics and Nominee Qualifications

Our director nominees exhibit a variety of competencies, professional experience, and backgrounds, and contribute diverse viewpoints and perspectives to our Board. While the Board benefits from the experience and institutional knowledge that our longer-serving directors bring, it has also brought in new perspectives and ideas by appointing two new directors in the past year: John O. Dabiri, a professor of aeronautics and mechanical engineering at the California Institute of Technology, and Aarti Shah, an IT, digital health, cybersecurity, and advanced analytics & data sciences executive at Eli Lilly and Company. Additionally, James C. Gaither retired from the Board as of the 2020 Meeting.

Nominee Demographics

Nominee Skills, Competencies and Attributes

Below are the skills, competencies and attributes that our NCGC and Board consider important for our directors to have considering our current business and future market opportunities, and the directors who possess them:

Highlights of our corporate governance practices include:  

Advisory Approval of Executive Compensation for Fiscal 2021 (Proposal 2)

We are asking our stockholders to cast a non-binding vote, also known as “say-on-pay,” to approve our NEOs’ compensation. The Board believes that our compensation policies and practices are effective in achieving our goals of paying for performance; providing competitive pay so that we may attract and retain a high-caliber executive team; aligning our executives’ interests with those of our stockholders to create long-term value; and achieving simplicity and transparency with our compensation program. The Board and our stockholders have approved holding our “say-on-pay” votes annually.

Executive Compensation Highlights

Our executive compensation program is designed to pay for performance. We utilize compensation elements that align our NEOs’ interests with those of our stockholders to create long-term value. Our NEO pay is heavily weighted toward performance-based, “at-risk” variable cash and long-term equity awards that are only earned if the Company achieves pre-established corporate financial metrics, but capped at a maximum of 200% of target (or 150% of target for our CEO’s PSUs). For the last several years, over 90% of our CEO’s, and over 50% of our other NEOs’, target pay has been performance-based and at-risk, and 100% of our CEO’s equity awards have been in the form of PSUs only.

At our 2020 Meeting, over 95% of the votes cast approved the compensation paid to our NEOs for Fiscal 2020. After considering this advisory vote and the feedback from our annual stockholder outreach, our CC concluded that our program effectively aligned executive pay with stockholder interests. Therefore, the CC maintained the same general executive compensation structure for Fiscal 2021, but increased the rigor of the performance goals for revenue and Non-GAAP Operating Income by setting the Threshold goals above Fiscal 2020 actual achievement, and increased the proportion of target pay that is “at-risk” to strengthen the link between corporate performance and executive pay.

Financial Performance and Link to Executive Pay

Despite the challenges of the COVID-19 pandemic, in Fiscal 2021, we achieved record revenue for our Gaming and Data Center market platforms and for the overall Company, enhanced our networking technologies by completing the acquisition of Mellanox Technologies, Ltd., launched the NVIDIA Ampere GPU architecture for our Gaming and Data Center platforms, and announced a partnership with Mercedes-Benz to introduce software-defined, intelligent vehicles using end-to-end NVIDIA technology.

As described further in our CD&A, a significant portion of our executive pay opportunities are tied to the achievement of financial measures that drive business value and contribute to our long-term success. While COVID-19 affected our business in both positive and negative ways, the CC determined not to make any changes to our Fiscal 2021 executive compensation performance goals or in certification of actual Fiscal 2021 results as a result of COVID-19. In accordance with the performance goals and methodology established by the CC in early Fiscal 2021, the CC excluded the additional revenue and the estimated unaudited operating income and costs generated by acquisitions completed during Fiscal 2021 in its certification of Fiscal 2021 results. The CC determined the foregoing approach best aligned our executives’ interests with those of our stockholders and remained consistent with our pay for performance philosophy. The table below shows our goals for the applicable period ended Fiscal 2021 and their respective impact on our executive pay.

Ratification of Selection of PwC as our Independent Registered Public Accounting Firm for Fiscal 2022 (Proposal 3)

Although not required, we are asking our stockholders to ratify the AC’s selection of PwC as our independent registered public accounting firm for Fiscal 2022 because we believe it is a matter of good corporate practice. If our stockholders do not ratify the selection, the AC will reconsider the appointment, but may nevertheless retain PwC. Even if the selection is ratified, the AC may select a different independent registered public accounting firm at any time if it determines that such a change would be in the best interests of NVIDIA and our stockholders.

Approval of an Amendment to our Charter to Increase the Number of Authorized Shares of Common Stock from 2 Billion Shares to 4 Billion Shares (Proposal 4)

We are asking our stockholders to approve an amendment to our Charter to increase the number of authorized shares of common stock from two billion shares to four billion shares. The Charter amendment will provide adequate shares of common stock to be used by the Board for general corporate purposes, including, but not limited to, expanding our business through mergers and acquisitions, including shares we would be obligated to issue in connection with the pending acquisition of Arm Limited; stock dividends and/or stock splits; providing equity incentives to employees, officers or directors; and the raising of additional capital.

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PROXY STATEMENT FOR THE 2021 ANNUAL MEETING OF STOCKHOLDERS - JUNE 3, 2021

____________________________________________________

INFORMATION ABOUT THE MEETING

Your proxy is being solicited for use at the 2021 Meeting on behalf of the Board. Our 2021 Meeting will take place virtually on Thursday, June 3, 2021 at 11:00 a.m. Pacific Daylight Time.

Virtual Meeting Philosophy and Benefits

The Board believes that holding the meeting in a virtual format invites stockholder participation, while reducing the costs to stockholders and the Company associated with an in-person meeting. This balance allows the meeting to remain focused on matters directly relevant to the interests of stockholders in an efficient way. We have designed the virtual format to protect stockholder rights, including by offering multiple opportunities to ask questions, publishing answers to questions received before or during the meeting on our Investor Relations website, and providing an archived copy of the webcast after the meeting.

Meeting Attendance

If you were an NVIDIA stockholder as of the close of business on the April 5, 2021 record date, or if you hold a valid proxy, you can attend, ask questions during, and vote at our 2021 Meeting at www.virtualshareholdermeeting.com/NVIDIA2021. Our meeting will be held virtually; use the Control Number included on your Notice or printed proxy card to enter. Anyone can also listen to the meeting live at www.virtualshareholdermeeting.com/NVIDIA2021.

If you encounter any difficulties accessing the virtual meeting during the check-in or the course of the annual meeting, please call the technical support number available on www.virtualshareholdermeeting.com/NVIDIA2021.

An archived copy of the webcast will be available at www.nvidia.com/proxy through June 17, 2021. Even if you plan to attend the 2021 Meeting virtually, we recommend that you also vote by proxy as described below so that your vote will be counted if you later decide not to attend.

Asking Questions

We encourage stockholders to submit questions through our pre-meeting forum located at www.proxyvote.com (using the Control Number included on your Notice or printed proxy card) as well as during the meeting at www.virtualshareholdermeeting.com/NVIDIA2021. During the meeting, we will answer as many stockholder-submitted questions related to the business of the meeting as time permits. As soon as practicable following the meeting, we will publish and answer questions received, if pertinent to Company business, on our Investor Relations website. We intend to group questions and answers by topic and substantially similar questions will be answered only once. To promote fairness to all stockholders and efficient use of the Company’s resources, we will respond to one question per stockholder.

Your shares will be counted towards the quorum only if you submit a valid proxy or vote at the 2021 Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is not a quorum, a majority of the votes present may adjourn the meeting to another date.

Stockholder of Record

You are a stockholder of record if your shares were registered directly in your name with our transfer agent, Computershare, on April 5, 2021, and you can vote shares, change your vote or revoke your proxy before the final vote at the 2021 Meeting in any of the following ways:

Street Name Holder

If your shares are held through a nominee, such as a bank or broker, as of April 5, 2021, then you are the beneficial owner of shares held in “street name,” and you have the right to direct the nominee how to vote those shares for the 2021 Meeting. The nominee should provide you a separate Notice or voting instructions, and you should follow those instructions to tell the nominee how to vote. To vote by attending the 2021 Meeting virtually, you must obtain a valid proxy from your nominee.

Note that under the rules of the national stock exchanges, any NVIDIA stockholder whose shares are held in street name by a member brokerage firm may revoke a proxy and vote his or her shares at the 2021 Meeting only in accordance with applicable rules and procedures of those exchanges, as employed by the street name holder’s brokerage firm.

Vote Count

Vote Results

Preliminary voting results will be announced at the 2021 Meeting. Final voting results will be published in a current report on Form 8-K, which will be filed with the SEC by June 9, 2021.

Proxy Materials

As permitted by SEC rules, we are making our proxy materials available to stockholders online at www.nvidia.com/proxy. On or about April  22, 2021, we sent stockholders who own our common stock at the close of business on April 5, 2021 (other than those who previously requested electronic or paper delivery) a Notice containing instructions on how to access our proxy materials, vote via the Internet or by telephone, and elect to receive future proxy materials electronically or in printed form by mail.

If you choose to receive future proxy materials electronically (via www.proxyvote.com for stockholders of record and www.icsdelivery.com/nvda for street name holders), you will receive an email next year with links to the proxy materials and proxy voting site.

SEC rules also permit companies and intermediaries, such as brokers, to satisfy Notice and proxy material delivery requirements for multiple stockholders with the same address by delivering a single Notice or set of proxy materials addressed to those stockholders. We follow this practice, known as “householding,” unless we have received contrary instructions from any stockholder at that address.

If you received more than one Notice or full set of proxy materials, then your shares are either registered in more than one name or are held in different accounts. Please vote the shares covered by each Notice or proxy card. To modify your instructions so that you receive one Notice or proxy card for each account or name, please contact your broker. Your “householding” election will continue until you are notified otherwise or until you revoke your consent.

To make a change regarding the form in which you receive proxy materials (electronically or in print), or to request receipt of a separate set of documents to a household, contact our Investor Relations Department (through our website at www.nvidia.com, with an email to shareholdermeeting@nvidia.com, by phone at (408) 486-2000 or by mail at 2788 San Tomas Expressway, Santa Clara, California 95051).

2022 Meeting Stockholder Proposals

To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by December 24, 2021 to NVIDIA Corporation, 2788 San Tomas Expressway, Santa Clara, California 95051, Attention: Timothy S. Teter, Secretary or by email to shareholdermeeting@nvidia.com, and must comply with all applicable requirements of Rule 14a-8 promulgated under the Exchange Act. However, if we do not hold our 2022 Meeting between May 4, 2022 and July 3, 2022, then the deadline is a reasonable time before we begin to print and send our proxy materials. If you wish to submit a proposal for consideration at the 2022 Meeting that is not to be included in next year’s proxy materials, you must do so in writing following the above instructions not later than the close of business on March 5, 2022, and not earlier than February 3, 2022. We also advise you to review our Bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.

Proposal 1—Election of Directors

Our Board has 13 members. All of our directors have one-year terms and stand for election annually. Our nominees include 12 independent directors, as defined by the rules and regulations of Nasdaq, and one NVIDIA officer: Mr. Huang, who serves as our President and CEO. Each of the nominees listed below, other than Drs. Dabiri and Shah, is currently a director of NVIDIA previously elected by our stockholders.

The NCGC identifies, reviews and assesses the qualifications of existing and potential directors and selects nominees for recommendation to the Board for approval. The committee is committed to Board diversity and shall consider a nominee’s background and experience to ensure that a broad range of perspectives is represented on the Board. The NCGC may conduct any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates, and may also engage a professional search firm to identify and assist the committee in identifying, evaluating, and conducting due diligence on potential director nominees. The NCGC has not established specific age, gender, education, experience, or skill requirements for potential members, and instead considers numerous factors regarding the nominee taking into account our current and future business models, including the following:

The NCGC and the Board understand the importance of Board refreshment, and strive to maintain an appropriate balance of tenure, diversity, professional experience and backgrounds, skills, and education on the Board. While the Board benefits from the experience and institutional knowledge that our longer-serving directors bring, it has also brought in new perspectives and ideas by appointing two new directors in the past year: John O. Dabiri, a professor of aeronautics and mechanical engineering at the California Institute of Technology, and Aarti Shah, an IT, digital health, cybersecurity, and advanced analytics & data sciences executive at Eli Lilly and Company. Our longer-tenured directors are familiar with our operations and business areas and have the perspective of overseeing our activities from a variety of economic and competitive environments. Our new directors have brought expertise in brand development and cybersecurity and familiarity with technology developments at leading academic institutions that are important to supporting NVIDIA as it enters new markets. Each year, the NCGC and Board review each director’s individual performance, including the director’s past contributions, outside experiences and activities, and committee participation, and determine how his or her experience and skills continue to add value to NVIDIA and the Board.

Below are the skills, competencies and attributes that our Board considers important for our directors to have considering our current business and future market opportunities:

In addition, our Board voluntarily adopted proxy access. As a result, we will include in our proxy statement information regarding the greater of (a) up to two director candidates or (b) up to 20% of the number of directors in office on the last day that a submission may be delivered, if nominated by a stockholder (or group of up to 20 stockholders) owning at least 3% of the voting power of our outstanding capital stock for at least three continuous years. The stockholder(s) must provide timely written notice of such nomination and the stockholder(s) and nominee must satisfy the other requirements specified in our Bylaws. This summary of our proxy access rules is not intended to be complete and is subject to limitations set forth in our Bylaws and Corporate Governance Policies, both of which are available on the Investor Relations section of our website at www.nvidia.com. Stockholders are advised to review these documents, which contain the requirements for director nominations. The NCGC did not receive any stockholder nominations during Fiscal 2021.

The biographies below include information, as of the date of this proxy statement, regarding the particular experience, qualifications, attributes or skills of each director, relative to the skills matrix above, that led the NCGC and Board to believe that he or she should continue to serve on the Board.

Information About the Board of Directors and Corporate Governance

Nasdaq rules and our Corporate Governance Policies (as further described below) require that a majority of our directors not have a relationship that would interfere with their exercise of independent judgment in carrying out their responsibilities and that they meet any other qualification requirements required by the SEC and Nasdaq. After considering all relevant relationships and transactions, our Board determined that, except for Mr. Huang, all of our directors are “independent” as defined by Nasdaq’s rules and regulations. In addition, the Board previously determined that James C. Gaither, a former director who retired from our Board effective June 9, 2020, was independent under applicable Nasdaq listing standards.

The Board also determined that all members of our AC, CC and NCGC are independent under applicable Nasdaq listing standards, and that each of Messrs. McCaffery, Perry and Seawell and Ms. Hudson of the AC are “audit committee financial experts” as defined under applicable SEC rules.

Our Board believes that each of its members should have an equal voice in the affairs and the management of NVIDIA, and therefore, our stockholders are best served at this time by having an independent Lead Director, rather than having a chairperson. Our Lead Director is an integral part of our Board structure and a critical aspect of our effective corporate governance. The independent directors consider the role and designation of the Lead Director on an annual basis, and Mr. Perry was appointed as our Lead Director in 2018. In addition, Mr. Perry serves on both the NCGC and the AC, which affords him increased engagement with Board governance and composition as well as with risk assessment and management, and financial and regulatory matters of the Company. While the CEO has primary responsibility for preparing the agendas for Board meetings and presiding over the portion of the meetings of the Board where he is present, our Lead Director has significant responsibilities, which are set forth in our Corporate Governance Policies, and include, in part:

The active involvement of our independent directors, combined with the qualifications and significant responsibilities of our Lead Director, provide balance on the Board and promote strong, independent oversight of our management and affairs.

The Board is responsible for overseeing risk management at NVIDIA and delegates oversight of appropriate topics to its committees. Our AC has the responsibility to consider and discuss major financial risk exposures and the steps management has taken to monitor and control these exposures. The AC also monitors compliance with certain legal and regulatory requirements and oversees the performance of the internal audit function. Our NCGC monitors the effectiveness of our anonymous tip process and corporate governance guidelines, including whether they are successful in preventing illegal or improper liability-creating conduct, and oversees environmental, social and corporate governance risks, ranging from the impact of artificial intelligence to diversity and inclusion to climate change. Our CC assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking. The Board exercises direct oversight of strategic risks to NVIDIA and other risk areas not delegated to one of its committees, including business continuity and cybersecurity.

Management periodically provides information, including guidance on risk management and mitigation, to the Board or a relevant committee. Each committee also reports to the Board on those matters.

The Board and its committees have received regular reports from management regarding the impact, risks and opportunities of COVID-19 on our business, operations and people. For example, while our Professional Visualization and Automotive market platforms were negatively affected by the pandemic, our Gaming and Data Center market platforms have benefited from stronger demand as people continue to work, learn, and play from home. COVID-19 has also caused volatility and disruption in global financial markets and global economic activity, and has impacted the supply chain, including logistical services and component supply, topics on which the Board and its committees were briefed regularly. Additionally, the Board has overseen the execution of management’s initiatives to protect the health and safety of our workforce, including closure of our offices, compliance with shelter-in-place orders and the temporary prohibition on most business travel, and to support NVIDIANs and their families during a challenging year by moving up our annual focal review to accelerate the timing of raises and implementing a one-week company-wide shut down in December for our people to recharge.

The Board has adopted Corporate Governance Policies to ensure that it has the necessary authority and processes in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The Corporate Governance Policies set forth the practices the Board follows with respect to its composition and selection, regular evaluations of the Board and its committees, Board meetings and involvement of senior management, chief executive officer performance evaluation, and Board committees and compensation. Our Corporate Governance Policies may be viewed under Governance in the Investor Relations section of our website at www.nvidia.com.

Executive Sessions of the Board

As required under Nasdaq’s listing standards, our independent directors have in the past met, and will continue to meet, regularly in scheduled executive sessions at which only independent directors are present, as well as in sessions with the CEO. In Fiscal 2021, our independent directors met in both types of executive sessions at all four of our scheduled quarterly Board meetings.

Director Attendance at Annual Meeting

We do not have a formal policy regarding attendance by members of the Board at our annual meetings. We expect that our directors will attend each annual meeting, absent a valid reason. All Board members as of the 2020 Meeting attended our 2020 Meeting.

Board Self-Assessments

In Fiscal 2021, the NCGC oversaw an evaluation process, conducted at least annually, whereby outside corporate counsel for NVIDIA interviewed each director to obtain his or her evaluation of the Board as a whole, and of the committees on which he or she serves. The interviews solicited ideas from the directors about, among other things, improving the quality of Board and/or committee oversight effectiveness regarding strategic direction, financial and audit matters, executive compensation, acquisition activity and other key matters. The interviews also focused on Board process and identifying specific issues which should be discussed in the future. After these evaluations were complete, our outside corporate counsel summarized the results, reviewed them with our Lead Director, and then submitted the summary for discussion by the NCGC.

In response to the evaluations conducted in Fiscal 2021, our Board determined to focus recruiting efforts on director candidates with diversity of gender and/or racial/ethnic background, to further strengthen our director onboarding programs, and to dedicate additional time to certain Board agenda items such as cybersecurity, diversity and inclusion, and other ESG matters.

Director Orientation and Continuing Education

The NCGC and our General Counsel are responsible for new director orientation and for administering or approving eligible director continuing education programs. Continuing education programs for directors may include a combination of internally developed materials and presentations, programs presented by third parties, and financial and administrative support for attendance at qualifying academic or other independent programs.

Director Stock Ownership Guidelines

The Board believes that directors should hold a significant equity interest in NVIDIA. Our Corporate Governance Policies require each non-employee director to hold shares of our common stock with a total value equal to six times the annual cash retainer for Board service during the period in which he or she serves as a director (or six times his base salary, in

the case of the CEO). The shares may include vested deferred stock, shares held in trust and shares held by immediate family members. Non-employee directors have five years after their Board appointment to reach the ownership threshold. Our stock ownership guidelines are intended to further align director interests with stockholder interests.

Hedging and Pledging Policy

Under our Insider Trading Policy, our directors, executive officers, employees, and their designees may not hedge their ownership of NVIDIA stock, including but not limited to trading in options, puts, calls, or other derivative instruments related to NVIDIA stock or debt to protect against a decline in the value of the Company’s stock. Additionally, directors, executive officers, employees, and their designees may not purchase NVIDIA stock on margin, borrow against NVIDIA stock held in a margin account, or pledge NVIDIA stock as collateral for a loan. We allow for certain portfolio diversification transactions, such as investments in exchange funds.

Outside Advisors

The Board and each of its principal committees may retain outside advisors and consultants of their choosing at our expense. The Board need not obtain management’s consent to retain outside advisors. In addition, the principal committees need not obtain either the Board’s or management’s consent to retain outside advisors.

Code of Conduct

We expect our directors, executives and employees to conduct themselves with the highest degree of integrity, ethics and honesty. Our credibility and reputation depend upon the good judgment, ethical standards and personal integrity of each director, executive and employee. We have a Code of Conduct that applies to our executive officers, directors and employees, including our principal executive officer, principal financial officer and principal accounting officer. We also have a Financial Team Code of Conduct that applies to our executive officers, directors and members of our finance department. We regularly review our Code of Conduct and related policies to ensure that they provide clear guidance to our directors, executives and employees.

The Code of Conduct and the Financial Team Code of Conduct are available under Governance in the Investor Relations section of our website at www.nvidia.com. If we make any amendments to the Code of Conduct or the Financial Team Code of Conduct or grant any waiver from a provision of either code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website.

Corporate Hotline

We have established an independent corporate hotline to allow any employee to confidentially and anonymously lodge a complaint about any accounting, internal control, auditing, Code of Conduct or other matter of concern (unless prohibited by local privacy laws for employees located in the European Union).

Stockholders who wish to communicate with the Board regarding nominations of directors or other matters may do so by sending electronic written communications addressed to Timothy S. Teter, our Secretary, at shareholdermeeting@nvidia.com. All stockholder communications we receive that are addressed to the Board will be compiled by our Secretary. If no particular director is named, letters will be forwarded, depending on the subject matter, to the chairperson of the AC, CC or NCGC. Matters put forth by our stockholders will be reviewed by the NCGC, which will determine whether these matters should be presented to the Board. The NCGC will give serious consideration to all such matters and will make its determination in accordance with its charter and applicable laws.

The Board met 10 times during Fiscal 2021, including meetings during which the Board discussed the strategic direction of NVIDIA, explored and discussed new business and strategic opportunities and the product roadmap, and other matters facing NVIDIA. We expect each Board member to attend each meeting of the Board and the committees on which he or she serves. Each Board member attended 75% or more of the meetings of the Board and of each committee on which he or she served.

The Board has three standing committees: an AC, a CC and a NCGC. Each of these committees operates under a written charter, which may be viewed under Governance in the Investor Relations section of our website at www.nvidia.com.

The composition and functions of our committees are set forth below. Committee assignments are determined based on background and the expertise which individual directors can bring to a committee. Our Board believes that rotations among committees are a good corporate governance practice which allows its members to be more fully informed regarding the full scope of the Board and our activities, and benefits each committee and the Board as a whole, as a result of diverse perspectives and ideas that are introduced through new committee formations.

Environmental, Social and Corporate Governance

Recruitment

Development and Retention

Compensation, Benefits, and Well-Being

Safety and COVID-19

We support our people and their families in making their health a top priority. We implemented global protocols to slow the spread of COVID-19 and to keep our workforce safe by closing our offices around the world in March 2020 for all except essential workers. We also eliminated most business travel. We provided our employees with resources to work

remotely and continued to pay all employees and contractors. For essential labs and offices that remain open, we instituted appropriate safety protocols and social distancing guidelines. Additionally, we provided resources for employees, including work from home support, enhanced health coverage, reimbursement for certain work from home expenses, and learning and development resources on how to lead and manage remotely.

As of the end of Fiscal 2021, our global workforce was 80% men and 20% women, and 6% of our workforce in the United States was composed of Black or African American, and Hispanic or Latino employees.

We also integrate energy efficiency principles into our products. Whether it is creation of technology to power next-generation notebooks or designs to support high-performance supercomputers, improving energy efficiency is a principal goal in each step of our research, development, and design processes. As a result, graphics processing units (GPUs) are inherently more energy efficient than other ways of computation because they are optimized for throughput and performance per watt rather than absolute performance.

Our Government Relations team engages in public policy advocacy to affect government action on issues of importance to our business, customers, stockholders, and employees, and to provide thought leadership to global governments on issues that directly affect our business. It is also a platform for educating policymakers through demonstrations of NVIDIA’s technology, amplifying our work in targeted areas, and collaborating with various organizations on issues of shared interest. We focus our public policy activities in artificial intelligence (AI), specifically to promote investment in core AI research, support workforce development around AI, and provide educational resources to technology policy advisors. NVIDIA may make expenditures to support or advocate particular viewpoints on public policy issues, including expenditures for intermediaries that advocate on our behalf if it is in our best interest.

NVIDIA does not make contributions of any kind (money, employee time, goods or services or employee expense reimbursements), to political parties or candidates, including any direct contributions to any intermediary organizations, such as political action committees (PAC) or lobbyists, campaign funds, or trade or industry associations and super PACs. This policy applies in all countries and across all levels of government, even where such contributions are permitted by law.

We belong to a number of trade associations worldwide, representing the interests of the technology industry, industries in which we operate and the broader business community. These organizations work to bring about industry consensus and advocacy on major public policy issues. Where required by law, we file lobbying disclosure reports with U.S. federal, state and local governments.

Our NCGC oversees our public policy engagement and accountability. Management reports to the NCGC about our policies and practices in connection with governmental relations, public policy advocacy, and related expenditures.

NVIDIA’s policies and practices related to public policy matters, including lobbying activities, trade association memberships, and related expenditures, are available on our website at https://investor.nvidia.com/governance/governance-documents/default.aspx.

Director Compensation

The CC reviews our non-employee director compensation program each year with the assistance of Exequity LLP, the CC’s independent compensation consultant, who prepares a comprehensive assessment of our program, including comparison to our Fiscal 2020 peer group used for executive compensation purposes, an update on recent trends in director compensation, and a review of related corporate governance best practices. Following this review, the CC recommended no changes to our non-employee director compensation program for the year starting on the date of our 2020 Meeting, which we refer to as the 2020 Program.

The CC subsequently recommended, and the Board approved, a mix of cash and equity awards for each non-employee director with an approximate annual value of $300,000, which was slightly below the median total annual compensation paid by similarly sized technology peer companies to their non-employee directors. We do not pay additional fees for serving as a Lead Director, chairperson or member of Board committees or for meeting attendance. Directors who are also employees do not receive fees or equity compensation for service on the Board.

The cash portion of the annual retainer, representing $75,000 on an annualized basis, was paid quarterly. Each of Drs. Dabiri and Shah were paid the pro-rata portion of the annual cash retainer for service on the Board from the date of appointment to the date of our 2021 Meeting.

Equity Compensation

The value of the annual equity award, in the form of RSUs, or the 2020 Program RSUs, was $225,000. The number of shares subject to each RSU award equaled this value, divided by the average closing market price of our common stock over the 60 calendar days ending the business day before the 2020 Meeting. The RSUs were granted on the first trading day following the date of our 2020 Meeting.

To correlate the vesting of the RSUs to the non-employee directors’ service on the Board and its committees over the following year, 50% of the 2020 Program RSUs vested on November 18, 2020 (the third Wednesday in November 2020) and the remaining 50% will vest on May 19, 2021 (the third Wednesday in May 2021). If a non-employee director’s service terminates due to death, his or her RSU grants will immediately vest in full for the benefit of his or her beneficiary. Non-employee directors do not receive dividend equivalents on unvested RSUs.

In connection with Dr. Dabiri’s appointment to the Board in July 2020, he was granted on August 10, 2020: (a) an initial RSU grant with a value of $225,000, which vests as to 1/6th of the shares approximately every six months, or the Initial Dabiri RSUs, and (b) an annual RSU grant equal to the grant value of the 2020 Program RSUs, pro-rated for the period of time from Dr. Dabiri’s appointment in July 2020 to the date of our 2021 Meeting, which vest on the same schedule as the 2020 Program RSUs, with the pro-rated amount vesting on November 18, 2020 and the remainder vesting on May 19, 2021, or the 2020 Program Dabiri RSUs. The number of shares subject to the Initial Dabiri RSUs equaled the value of the grant, divided by the average closing market price of our common stock over the 60 calendar days ending the business day before Dr. Dabiri’s appointment to the Board. The number of shares subject to the 2020 Program Dabiri RSUs equaled the number of shares that would have been granted to him pursuant to the 2020 Program RSUs had Dr. Dabiri been in service as of the 2020 Meeting, but pro-rated to reflect the period of service between the date of appointment of Dr. Dabiri to the Board and the date of the 2021 Meeting. If Dr. Dabiri’s service terminates due to death, his RSU grants will immediately fully vest. He does not receive dividend equivalents on unvested RSUs. The grants to Dr. Dabiri occurred on the sixth business day of the calendar month following the date of his appointment, in alignment with our typical grant procedures for new employees.

In connection with Dr. Shah’s appointment to the Board in November 2020, she was granted on December 8, 2020: (a) an initial RSU grant with a value of $225,000, which vests as to 1/6th of the shares approximately every six months, or the Initial Shah RSUs, and (b) an annual RSU grant equal to the grant value of the 2020 Program RSUs, pro-rated for the period of time from Dr. Shah’s appointment in November 2020 to the date of our 2021 Meeting, which will vest in full on May 19, 2021, or the 2020 Program Shah RSUs. The number of shares subject to the Initial Shah RSUs equaled the value of the grant, divided by the average closing market price of our common stock over the 60 calendar days ending the business day before Dr. Shah’s appointment to the Board. The number of shares subject to the 2020 Program Shah RSUs equaled the number of shares that would have been granted to her pursuant to the 2020 Program RSUs had Dr. Shah been in service as of the 2020 Meeting, but pro-rated to reflect the period of service between the date of appointment of Dr. Shah to the Board and the date of the 2021 Meeting. If Dr. Shah’s service terminates due to death, her RSU grants will immediately fully vest. She does not receive dividend equivalents on unvested RSUs. The grants to Dr.

Shah occurred on the sixth business day of the calendar month following the date of her appointment, in alignment with our typical grant procedures for new employees.

Deferral of Settlement

Non-employee directors could elect to defer settlement of RSUs upon vesting for tax planning purposes, to be issued on the earliest of (a) the date of the director’s “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)), unless a six month delay would be required under such Section, (b) the date of a change in control of NVIDIA that also would constitute a “change in control event” (as defined under Treasury Regulation Section 1.409A-3(i)(5)), and (c) the third Wednesday in March of the year elected by the director, which year must have been or be no earlier than (i) 2022 for the 2020 Program Dabiri RSUs and 2020 Program Shah RSUs, (ii) 2022 for the 2020 Program RSUs, or (ii) 2024 for the Initial Dabiri RSUs and Initial Shah RSUs. Messrs. Jones, McCaffery, and Neal, Dr. Shah and Ms. Hudson elected to defer settlement of the RSUs granted to them in Fiscal 2021.

Other Compensation/Benefits

Our non-employee directors are reimbursed for expenses incurred in attending Board and committee meetings and continuing educational programs pursuant to our Corporate Governance Policies. However, we do not offer change-in-control benefits to our directors, except for the vesting acceleration provisions in our equity plans that apply to all holders of stock awards under such plans in the event that an acquirer does not assume or substitute for such awards.

The following table provides information regarding the aggregate number of unvested RSUs and unexercised stock options held by each of our non-employee directors as of January 31, 2021:

Review of Transactions with Related Persons

It is our policy that all employees, officers and directors must avoid any activity that is in conflict with, or has the appearance of conflicting with, our interests. This policy is included in our Code of Conduct and our Financial Team Code of Conduct. We conduct a review of all related party transactions for potential conflict of interest situations on an ongoing basis and all transactions involving executive officers or directors must be approved by the NCGC in compliance with the Company’s policies and the Listing Standards of The Nasdaq Global Select Market. Except as discussed below, we did not conduct any transactions with related persons in Fiscal 2021 that would require disclosure in this proxy statement or approval by the NCGC.

We have entered into indemnity agreements with our executive officers and directors which provide, among other things, that we will indemnify such executive officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, executive officer or other agent of NVIDIA, and otherwise to the fullest extent permitted under Delaware law and our Bylaws. We intend to execute similar agreements with our future executive officers and directors.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information as of March 22, 2021 as to shares of our common stock beneficially owned by each of our NEOs, each of our directors, all of our directors and executive officers as a group, and all known by us to be beneficial owners of 5% or more of our common stock. Beneficial ownership is determined in accordance with the SEC’s rules and generally includes voting or investment power with respect to securities as well as shares of common stock subject to options exercisable, or PSUs or RSUs that will vest, within 60 days of March 22, 2021.

This table is based upon information provided to us by our executive officers and directors. Information about principal stockholders, other than percentages of beneficial ownership, is based solely on Schedules 13G/A filed with the SEC. Unless otherwise indicated and subject to community property laws where applicable, we believe that each of the stockholders named in the table has sole voting and investment power with respect to the shares indicated as beneficially owned. Percentages are based on 622,345,126 shares of our common stock outstanding as of March 22, 2021, adjusted as required by SEC rules.

Proposal 2—Approval of Executive Compensation

In accordance with Section 14A of the Exchange Act, we are asking our stockholders to vote on an advisory basis, commonly referred to as “say-on-pay”, to approve the Fiscal 2021 compensation paid to our NEOs as disclosed in the CD&A, the compensation tables and the related narrative disclosure contained in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this proxy statement.

In response to our stockholders’ preference, our Board has adopted a policy of providing for annual “say-on-pay” votes.

This advisory proposal is not binding on the Board or us. Nevertheless, the views expressed by the stockholders, whether through this vote or otherwise, are important to management and the Board and, accordingly, the Board and the CC intend to consider the results of this vote in making determinations in the future regarding NEO compensation arrangements.

The Board recommends that our stockholders adopt the following resolution:

Executive Compensation

Our CC solicits the input of Mr. Huang and the CC’s independent compensation consultant, Exequity, which reports directly to our CC. The roles of our CC, Exequity, and management, including our CEO, CFO, and Human Resources and Legal departments, in setting our Fiscal 2021 NEO compensation program are summarized below.

At the CC’s direction, Exequity and management recommended a peer group for our program, which was approved by the CC. Management then gathered peer data from the Radford Global Technology Survey, which was considered by Exequity in its analysis of Mr. Huang’s compensation, and by Mr. Huang in his recommendations on our other NEOs’ compensation, for Fiscal 2021. The CC considered Exequity’s advice, Mr. Huang’s recommendations, and management’s proposed Fiscal 2021 performance goals prior to making its final and sole decision on all Fiscal 2021 NEO compensation. Exequity also advised the CC on the Fiscal 2021 compensation risk analysis prepared by management. Finally, the CC also certified performance-based compensation payouts for the applicable periods ended Fiscal 2021.

During Fiscal 2021, our CC continued to use Exequity for its experience working with our CC and with compensation committees at other technology companies. Our CC analyzed whether Exequity’s role raised any conflict of interest, considering: (i) Exequity does not provide any services directly to NVIDIA (although we pay Exequity on the CC’s behalf), (ii) the percentage of Exequity’s total revenue resulting from fees paid by us on the CC’s behalf, (iii) Exequity’s conflict of interest policies and procedures, (iv) any business or personal relationship between Exequity and an NEO, or between Exequity’s individual compensation advisors and an NEO or any member of our CC, and (v) any NVIDIA stock owned by Exequity or its individual compensation advisors. After considering these factors, our CC determined that Exequity’s work did not create any conflict of interest.

Peer Companies and Market Compensation Data

We believe our peers should be companies that (1) compete with us for executive talent; (2) have established businesses, market presence, and complexity similar to us; and (3) are generally of similar size to us, as measured by revenue and/or market capitalization at roughly 0.5-3.5x of us. At the time our CC determined our Fiscal 2021 peer group in December 2019, our revenue and market capitalization, compared to the median of our peer group companies, was as follows:

After consultation with management, the CC determined that the existing peer group continued to be appropriate and did not make changes to our peer group for Fiscal 2021:

Our CC reviews market practices and compensation data from the Radford survey for peer companies’ comparably situated executives when determining the components of our executive compensation program as well as total compensation. The CC compares the total compensation opportunity for our NEOs and similarly situated executives at the 50th percentile of peer company data, and also considers the factors below in determining NEO compensation opportunities.

Factors Used in Determining Executive Compensation

In addition to peer data, our CC considers the following factors in making executive compensation decisions. The weight given to each factor may differ among NEOs and each component of pay, and is subject to the CC’s sole discretion.

We provide medical, vision, dental, and accidental death and disability insurance as well as time off and paid holidays for our NEOs, on the same basis as our other employees. Like other employees, our NEOs are eligible to participate in our 2012 ESPP, unless otherwise prohibited by the rules of the Internal Revenue Service, and our 401(k) plan, which included a Company match of salary deferral contributions of up to $6,500 for calendar 2020, which increased to up to $7,000 for calendar 2021. For Fiscal 2021, Mr. Puri, Mr. Teter and Ms. Kress each received a $7,000 401(k) match, while Mr. Huang and Ms. Shoquist each received matches of $6,500.

Stockholder Outreach and Feedback

We value stockholder feedback and conduct an annual stockholder outreach program. During the Fall of 2019, in preparing for Fiscal 2021 compensation decisions, we contacted our top institutional holders who held 1% or more of our stock (with the exception of brokerage firms and index funds who we know do not engage in direct conversations), with an aggregate ownership of approximately 31% of our common stock outstanding. Members of management and the Board, including our Lead Director, ultimately discussed executive compensation with representatives of stockholders holding an aggregate of approximately 19% of our common stock. Our stockholders generally provided positive feedback on our pay for performance alignment and the simplicity of our executive compensation program design.

Total Target Compensation Approach

The CC concluded that, given Mr. Huang’s position as CEO, 100% of his equity grants should be at-risk and performance-based, tightly aligning his interests with stockholders. Consistent with its practice in recent years, the CC granted Mr. Huang’s target equity opportunity 100% in the form of SY PSUs (which value is aligned with Non-GAAP Operating Income performance) and MY PSUs (which value is aligned with relative stock price performance). For each of our other NEOs, the CC provided 40% of the target equity opportunity in the form of RSUs and 60% of the target equity opportunity in the form of PSUs. The CC, after considering our CEO’s recommendations, determined this mix provided an appropriate balance, by placing a greater emphasis on awards contingent upon performance goal achievement while still providing a meaningful amount of time-vesting RSUs to encourage retention and to reward our other NEOs, in line with our stock performance over the long-term.

The CC evaluated market positioning, internal pay equity, individual performance, and level of unvested equity to determine a target equity opportunity value for our NEOs. Because our CEO’s target equity opportunity value had been kept constant for the preceding three years, the CC felt it was appropriate to increase the value for Fiscal 2021 to bring that portion of pay closer to the median of peer company chief executive officers, representing an increase of 51% from Fiscal 2020. The target equity opportunity values for our other NEOs represented an average increase of 111% from Fiscal 2020, which the CC felt was appropriate due to their increased responsibilities and scope, to bring those portions of pay closer to the median of peer company executives, as well as to provide for retention. To determine actual shares awarded, the CC used the eight-week trailing average of our stock price ending the week prior to the date of grant, reducing the impact of daily volatility on compensation decisions. This average stock price determined the number of RSUs and the target numbers of SY PSUs and MY PSUs.

The target numbers of SY PSU and MY PSU shares were eligible to vest upon our achievement of the Base Operating Plan Non-GAAP Operating Income performance goal for Fiscal 2021, and the Target TSR performance goal relative to the S&P 500 over a 3-year period starting at the beginning of Fiscal 2021, respectively. No shares were eligible to vest if at least Threshold performance was not achieved. Shares underlying any PSUs that are not earned are cancelled.

If the Company achieved at least Threshold performance, the minimum number of shares eligible to vest was 50% of the SY PSU target opportunity and 25% of the MY PSU target opportunity. If the Company achieved at least Stretch Operating Plan performance for SY PSUs (or Stretch performance for MY PSUs), the maximum number of shares eligible to vest was capped at 150% of Mr. Huang’s, and 200% of our other NEOs’ respective, PSU target opportunities.

Goals for and Achievement of Performance-Based Compensation

Based on the Fiscal 2021 strategic plan as approved by the Board, the CC set performance metrics and goals, and certified the Company’s performance achievement with resulting payouts to our NEOs, as set forth below:

Stock Ownership Guidelines

The Board believes that executive officers should hold a significant equity interest in NVIDIA. Our Corporate Governance Policies require the CEO to hold shares of our common stock valued at six times his base salary, and our other NEOs to hold shares of our common stock valued at the NEO’s respective base salary. NEOs have up to five years from appointment to reach the ownership threshold. The stock ownership guidelines are intended to further align NEO interests with stockholder interests. Each NEO currently exceeds the stock ownership requirements.

Compensation Recovery (“Clawback”) Policy

We maintain a Compensation Recovery Policy for all employees. Under this policy, if we are required to prepare an accounting restatement to correct an accounting error on an interim or annual financial statement included in a report on Form 10-Q or Form 10-K due to material noncompliance with any financial reporting requirement under the federal securities laws, or a Restatement, and if the Board or a committee of independent directors concludes that our CEO, our CFO or any other employee received a variable compensation payment that would not have been payable if the original interim or annual financial statements had reflected the Restatement, which we refer to as the Overpayment, then:

We will review and update the Compensation Recovery Policy as necessary for compliance with the clawback policy provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act when the final regulations related to that policy are issued.

Tax and Accounting Implications

Under Section 162(m) of the Internal Revenue Code, or Section 162(m), compensation paid to each of the Company’s “covered employees” that exceeds $1 million per taxable year is generally non-deductible unless the compensation qualifies for certain grandfathered exceptions (including the “performance-based compensation” exception) for certain compensation paid pursuant to a written binding contract in effect on November 2, 2017 and not materially modified on or after such date.