MICROCHIP TECHNOLOGY INC appointed Ganesh Moorthy as new CEO

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


As previously announced by Microchip Technology Incorporated ("we," "our" or "Microchip"), effective March 1, 2021, Steve Sanghi transitioned from Chief Executive Officer and Chair of the Board of Directors (the "Board") to an Executive Chair role and Ganesh Moorthy was appointed as Chief Executive Officer and continues to serve as President. In connection with the foregoing, on February 26, 2021, the Compensation Committee of the Board approved changes to the compensation for Mr. Sanghi and Mr. Moorthy. Specially, effective March 1, 2021, Mr. Sanghi's base salary was reduced by 40.0% to $483,556.82 and, effective April 1, 2021, his participation level under our Management Incentive Compensation Plan ("MICP") was reduced from 200% of his base salary to 120% of his base salary. Also, effective May 31, 2021, Mr. Moorthy's base salary was increased by 25.0% to $583,450.00 and, effective April 1, 2021, his participation level under the MICP was increased from 82% of his base salary to 125% of his base salary. The Compensation Committee also determined that Mr. Sanghi would receive lower grants of restricted stock units ("RSUs") under our quarterly evergreen grant program and that Mr. Moorthy would receive higher grants of RSUs beginning with our new fiscal year commencing April 1, 2021 in amounts to be determined each quarter by the Compensation Committee. Any outstanding RSUs held by Mr. Sanghi and Mr. Moorthy will continue to vest on their existing terms.


On February 26, 2021, the Board, upon recommendation from its Nominating and Governance Committee, appointed Karlton Johnson, currently the Chief Executive Officer of DeLaine Strategy Group LLC, as a director of the Company, effective April 1, 2021. Mr. Johnson has not yet been appointed to any committee of the Board. 


There is no arrangement or understanding between Mr. Johnson and any other person pursuant to which Mr. Johnson was appointed as a director. There are no transactions in which Mr. Johnson has an interest requiring disclosure under Item 404(a) of Regulation S-K. 


Mr. Johnson will participate in the Company's standard compensation plan for non-employee directors. The standard compensation plan for non-employee directors is described in the section entitled "Director Compensation" of the Company's definitive proxy statement on Schedule 14A, filed with the Securities and Exchange Commission on July 14, 2020. 

On February 26, 2021, Board member, L.B. Day decided to retire from the Board effective as of the date of our next annual meeting of stockholders to be held in August 2021. 


On February 26, 2021, the Board, upon recommendation from its Compensation Committee, approved amendments to the MICP to, among other things, (i) remove provisions related to Section 162(m) of the Internal Revenue Code in connection with amendments that were made to such provisions of the code, (ii) clarify the authority of the Employee Committee thereunder and (iii) add provisions related to forfeiture events including clawback matters. The foregoing description is qualified in its entirety by reference to the amended MICP attached hereto as Exhibit 10.1 and incorporated herein by reference.