Rafael Lizardi
About Rafael Lizardi
Rafael Lizardi is Senior Vice President and Chief Financial Officer of Texas Instruments; he is age 52 and has served as an executive officer for more than five years . TI’s 2024 performance under his finance leadership saw revenue decline 10.7% with operating margin at 34.9% and one-year TSR of 13.1%, above median vs Semiconductor Peers . Over 2020–2024, TI’s revenue and EBITDA trended down from the 2022 cycle peak, reflecting industry conditions and elevated depreciation from capacity investments (see table below; values from S&P Global). In committee assessment of 2024 bonuses, the board specifically noted Lizardi’s “financial management of the company” .
TXN multi-year fundamentals (USD millions) – Values retrieved from S&P Global
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Revenues | $14,461* | $18,344* | $20,028* | $17,519* | $15,641* |
| EBITDA | $6,658* | $9,919* | $11,277* | $8,490* | $6,858* |
Disclaimer: Values retrieved from S&P Global*
Fixed Compensation
Multi-year cash compensation (named executive officer disclosures)
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $767,500 | $806,667 | $842,083 |
| Bonus ($) | $1,210,000 | $1,090,000 | $1,035,000 |
| Profit Sharing ($) | $153,500 | $161,333 | $167,911 |
| Perquisites + Personal Benefits ($) | $124,280 | $136,074 | $18,289 (financial counseling, executive physical) |
Program features and policies
- Profit sharing formula common to all employees, based on company operating margin (19.9% of base salary paid for 2024 at 34.9% OPM) .
- No employment contracts; no guaranteed raises/bonuses/equity; no tax gross-ups for perquisites .
- Deferred compensation: 2024 executive contributions $67,367; company contributions $99,322; aggregate year-end balance $585,181 .
Performance Compensation
2024 annual incentive approach and outcomes (committee judgment; no formulaic weights)
| Metric | Committee Framework | 2024 Actual (Absolute) | 2024 Relative vs Semi Peers | Payout Determination |
|---|---|---|---|---|
| Revenue Growth | 1-yr and 3-yr absolute and relative | -10.7% | Below median | Holistic; NEO bonuses down 5% YoY |
| Operating Profit Margin | 1-yr and 3-yr absolute and relative | 34.9% | Above median | Supports payout despite revenue decline |
| Total Shareholder Return (TSR) | 1-yr and 3-yr absolute and relative | 13.1% | Above median | Supports payout |
| Strategic Progress (manufacturing, channels, portfolio) | Qualitative judgment | Strengthened strategic position (300mm capacity, direct channel reach ~80%) | Not rated | Supports payout |
Resulting CFO bonus for 2024 performance: $1,035,000 (paid Feb 2025) .
Comparator Group methodology: equity targeted ~market median; broad group updated July 2024 (added AMD, Lam Research, NXP; removed Accenture, NVIDIA, Western Digital) .
Performance process: Committee uses hindsight assessment over 1- and 3-year windows; no preset targets or weights; clawback applies (Dodd-Frank, 3-year restatement window; fraud/misconduct at committee discretion) .
2024 equity grants (grant date Jan 25, 2024; equal split RSUs/options; CFO)
| Type | Grant Date | Shares | Grant-Date Fair Value ($) | Exercise Price | Vesting | Expiration |
|---|---|---|---|---|---|---|
| Options | 1/25/2024 | 63,997 | $2,400,021 | $167.42 | 25% on 1/25/2025; then 1/3 of remaining on 1/25/2026, 1/25/2027, 1/25/2028 | 1/25/2034 |
| RSUs | 1/25/2024 | 14,336 | $2,400,133 | n/a | Cliff vest 1/31/2028 | n/a |
Outstanding award schedules (as of 12/31/2024)
- RSU vest dates: 1/31/2025 (9,751), 1/30/2026 (10,869), 1/29/2027 (13,786), 1/31/2028 (14,336) .
- Options outstanding (selected grants): 2021 grant (30,405 exercisable; 10,136 unexercisable; $169.23; fully exercisable 1/28/2025) ; 2022 grant (23,867/23,867 at $174.81; half became exercisable 1/27/2025; remainder 1/27/2026) ; 2023 grant (12,956/38,868 at $174.10; 1/26/2025, 1/26/2026, 1/26/2027) ; 2024 grant as above.
2024 realizations (selling/vesting pressure signal)
- Options exercised: 46,917 shares; value realized $5,215,523 .
- RSUs vested: 12,642 shares; value realized $2,048,636 .
- Late Section 16(a) report: one late filing for an option exercise and sale (administrative error) .
Equity Ownership & Alignment
Beneficial ownership and alignment policies
| Item | Detail |
|---|---|
| Beneficial shares | 239,845 shares (CFO) |
| Shares outstanding | 909,917,820 (record date 2/20/2025) |
| Ownership % | ~0.026% (computed from , ) |
| Shares obtainable within 60 days | 131,790 (options) |
| Unvested RSUs | 48,742 shares (aggregate RSUs) |
| Hedging/short selling | Prohibited for all employees/directors |
| Pledging | Prohibited; none pledged by directors/executive officers |
| Stock ownership guideline | 3× base salary for executive officers; 5 years to comply; RSUs count |
Employment Terms
- No employment contract; executives eligible for standard benefits and programs similar to other U.S. employees .
- Change-in-control: Double-trigger for post-2009 equity awards (accelerates only if involuntarily terminated within 24 months of a change in control) .
- Termination programs: Potential paid leave of up to 12 months under separation agreements in exchange for non-compete/non-solicit and release; “bridge to retirement” unpaid leave possible to age 55 for eligible executives; options continue to vest and RSUs remain in effect during such leave .
- Severance multiples (salary+bonus): Not disclosed.
- Pension/SERP: Not a participant in TI’s defined benefit plans (post-1997 hires); receives defined contribution benefits and may defer compensation .
- Clawback: Mandatory recovery for restatements (3 fiscal years); committee discretion for fraud/misconduct .
Compensation Structure Context
- Mix trends: Equity targeted at market median; RSUs with 4-year cliff vest for retention; options enhance performance orientation (value only if stock rises) .
- Peer group and pay philosophy: Comparator Group reviewed annually; 2024 equity calibrated to market median; bonuses calibrated versus peer performance and strategic progress .
- Say-on-pay: 85% approval in April 2024; committee made no material changes .
- Consultant: Pearl Meyer; committee assessed independence/no conflicts .
Board Governance Linkages
- Compensation Committee: Martin Craighead (Chair), Mark Blinn, Carrie Cox, Ronald Kirk; independent; five meetings in 2024 .
- Policies: No hedging/pledging; insider-trading policy with pre-clearance for executive officers; robust governance and GSR oversight .
Performance & Track Record Signals
- CFO capital allocation and FCF posture: Lizardi reiterated goal to return all free cash flow via dividends/buybacks, with buybacks moderated during peak CapEx; open to M&A if strategically sound; highlighted CHIPS Act benefits (ITC 35% update; ~$1.6B grants) .
- Operational guidance: 2025 CapEx ~$5B; 2026 $2–$5B dependent on revenue growth; 2025 depreciation $1.8–$2.0B; 2026 $2.3–$2.7B, likely lower end .
- Cycle posture: Inventory and utilization managed to support wide range of recovery scenarios; gross margins influenced by depreciation and utilization; emphasized long-term FCF/share narrative .
- Certifications: SOX 302/906 certifications on 10-K and 10-Q filings (2024 10-K; Q2 and Q3 2025) .
Investment Implications
- Alignment: Strong no-hedging/no-pledging rules, ownership guidelines (3× salary), and double-trigger equity terms limit misalignment or opportunistic acceleration risk .
- Selling pressure: 2024 exercises and vesting were sizable ($7.26M value realized), typical for maturities; one late Form 4 filing appears administrative rather than systematic; monitor Form 4 cadence and scheduled vest events into 2025–2028 .
- Pay-for-performance: Bonus down 5% YoY despite above-median OPM/TSR—committee judgment aligns payouts with mixed revenue trends and strategic progress, supporting pay discipline .
- Retention/CoC: No employment contract or severance multiples, but separation programs (paid leave + covenants) and four-year cliff RSUs contribute to retention and staggered vesting; equity accelerates only on involuntary termination post-CoC, lowering immediate deal windfalls .
- Capital strategy: Elevated CapEx/depreciation create near-term margin headwinds; CFO guidance and CHIPS incentives improve medium-term FCF leverage as projects ramp—key to the equity thesis .