UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant   ☒                             Filed by a party other than the Registrant   ☐

Check the appropriate box:

ON Semiconductor Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders:

The 2022 Annual Meeting of Stockholders of ON Semiconductor Corporation will be held at its principal executive office, located at 5005 East McDowell Road, Phoenix, Arizona 85008, on Thursday, May 26, 2022 at 8:00 a.m., local time, for the following purposes:

				To elect ten directors nominated by our Board of Directors				To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2022
				To vote on an advisory (non-binding) resolution to approve the compensation of our named executive officers				To transact such other business as may properly come before the meeting and any adjournment or postponement of the meeting

The Board of Directors of ON Semiconductor Corporation has fixed the close of business on March 29, 2022 as the record date for determination of stockholders entitled to notice of, and to vote at, the 2022 Annual Meeting of Stockholders or any adjournment or postponement thereof. For 10 days prior to the 2022 Annual Meeting of Stockholders, a list of stockholders entitled to vote at such meeting will be available for inspection in the office of the Law Department of ON Semiconductor Corporation, located at 5005 East McDowell Road, Phoenix, Arizona 85008, between the hours of 8:30 a.m. and 5:00 p.m., local time, each weekday. Such list will also be available at the 2022 Annual Meeting of Stockholders. Directions to the meeting location and related information may be found on our website at www.onsemi.com/annualmeeting.

Your vote is very important to us. We are providing access to our proxy materials online under the U.S. Securities and Exchange Commission’s “notice and access” rules. As a result, instead of mailing a paper copy of this proxy statement and our 2021 annual report to stockholders, we are mailing a notice to many of our stockholders that contains instructions on how to access documents online and how stockholders can receive a paper copy of our materials, including this proxy statement, our 2021 annual report to stockholders and a proxy card. Those stockholders who do not receive a notice, including stockholders who have previously requested to receive paper copies of our proxy materials, will receive a paper copy of our proxy materials by mail unless they have previously requested delivery of such materials electronically.

Sincerely yours,

Hassane El-Khoury

President and Chief Executive Officer

April 6, 2022

TABLE OF CONTENTS

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5005 East McDowell Road

Phoenix, Arizona 85008

PROXY STATEMENT

This proxy statement and the accompanying notice and proxy card are furnished in connection with the solicitation by the Board of Directors (the “Board” or “Board of Directors”) of ON Semiconductor Corporation (“we,” “onsemi” or the “Company”) of proxies to be used at our 2022 Annual Meeting of Stockholders and at any adjournment or postponement thereof (the “Annual Meeting”).

2022 Annual Meeting of Stockholders

Date and Time: Thursday, May 26, 2022, at 8:00 a.m., local time

Location: 5005 East McDowell Road, Phoenix, Arizona 85008

Record Date: The Board of Directors has fixed the close of business on March 29, 2022 as the record date for determination of stockholders entitled to notice of, and to vote at, the Annual Meeting (the “Record Date”).

Proxy Materials Are Available on the Internet

In accordance with the rules of the U.S. Securities and Exchange Commission (the “SEC”), we are furnishing proxy materials to our stockholders primarily via the internet instead of mailing printed copies of those materials to each stockholder. Unless you elected to receive printed copies of our proxy materials in prior years, you will receive a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) by mail, or if you so elected, by electronic mail. The Internet Notice will tell you how to access and review our proxy materials and how to vote your shares after you have reviewed our proxy materials. If you received the Internet Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions included in the Internet Notice. The Internet Notice is first being sent, and the proxy statement and form of proxy card relating to the Annual Meeting are first being made available, to stockholders on or about April 6, 2022.

As onsemi is committed to creating a cleaner, smarter world, we would like to emphasize that stockholders may elect to receive proxy materials, annual reports and other stockholder communications via electronic mail (“e-Delivery”). Not only is this a way to mitigate the natural resource consumption, paper waste and cost associated with the printing and mailing of such materials and the Internet Notice, but it also will allow stockholders to receive such items sooner than via regular mail. If you are interested in signing up for e-Delivery, please follow the instructions contained in the Internet Notice.

Voting Your Shares

Whether or not you plan to attend the Annual Meeting, the Board encourages you to vote your shares as more fully described below and in the proxy card.

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Proxy Statement

If you are the “record holder” of your shares, meaning that you hold the shares in your own name and not through a bank or brokerage firm (each, a “Broker”), you may vote in one of the following four ways:

If the shares you own are held in “street name” by a Broker, then your Broker, as the record owner, will vote your shares according to your instructions. You will need to follow the directions your Broker provides you. Each share held by you is entitled to one vote.

Proof of Ownership Required for Attending Meeting in Person

You are entitled to attend the Annual Meeting only if you were a stockholder as of the close of business on the Record Date or hold a valid proxy for the Annual Meeting. To be admitted to the Annual Meeting, we may, in our sole discretion, require you to present any one or more of the following documents as proof of ownership of onsemi stock on the Record Date and authority to vote the shares:

We reserve the right not to admit anyone who refuses to provide the applicable documents set forth above.

Proposals and Board Recommendations

All shares represented by valid proxies will be voted as specified. If no specification is made, the proxies will be voted according to the Board’s recommendations below:

We are not aware of any other matters that will be brought before the stockholders for a vote at the Annual Meeting. If other matters properly come before the Annual Meeting, all shares validly represented by proxies will be voted in accordance with the discretion of the appointed proxies.

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Proxy Statement

Record Date and Quorum

As of the Record Date, there were 434,356,597 shares of our common stock outstanding and entitled to vote at the Annual Meeting. The presence, in person or by proxy, of holders of a majority of the shares entitled to vote at the Annual Meeting will constitute a quorum. Abstentions, withheld votes and Broker non-votes are included in determining whether a quorum has been met for the Annual Meeting. Abstentions include shares present in person but not voting and shares represented by proxy but with respect to which the holder has abstained.

Required Vote

With respect to Proposal No. 1 (Election of Directors), each of the members of the Board (collectively, the “Directors,” and individually, a “Director”) standing for election at the Annual Meeting must be elected by a majority of the votes cast by holders of shares entitled to vote at the Annual Meeting with respect to such Director’s election, meaning that the number of votes cast “FOR” such Director must exceed the number of votes cast “AGAINST” that Director.

With respect to Proposal No. 2 (Advisory (Non-Binding) Resolution to Approve Named Executive Officer Compensation) and Proposal No. 3 (Ratification of Selection of Independent Registered Public Accounting Firm), in order for each proposal to be approved, it must receive a “FOR” vote from a majority of the votes cast by the holders of shares entitled to vote at the Annual Meeting.

Abstentions and Broker non-votes are not treated as votes cast and, therefore, will have no effect on the outcomes of any of the proposals. Broker non-votes occur when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power on that item and has not received instructions from the beneficial owner. Under applicable SEC and stock exchange rules, Brokers have discretionary power to vote your shares with respect to “routine” matters but they do not have discretionary power to vote your shares on “non-routine” matters.

Notably, Proposals No. 1 and 2 are considered “non-routine” matters and, as a result, your Broker is NOT able to vote on your behalf with respect to Proposals No. 1 or 2 without specific voting instructions from you. Accordingly, if your shares are held in “street name” and you cannot attend the Annual Meeting in person, we encourage you to vote your shares on all proposals by promptly instructing your Broker as to how to vote on these matters so that your shares will be voted at the Annual Meeting.

No dissenters’ rights are provided under the Delaware General Corporation Law, our charter or our bylaws with respect to any of the proposals described in this proxy statement.

Revocation of Proxies

You may revoke your proxy at any time before it is voted by attending the Annual Meeting and voting in person or by submitting a written notice of revocation or a properly executed proxy bearing a later date to our Secretary at our principal executive office, located at 5005 East McDowell Road, Phoenix, Arizona 85008.

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MANAGEMENT PROPOSALS

Proposal No. 1: Election of Directors

The Board routinely assesses its size and composition and the skillsets of each Director to ensure an appropriate diversity of perspectives, viewpoints, backgrounds and skills in light of the Company’s current and future business objectives and the evolving nature of the Company’s product offerings and technology in the highly competitive semiconductor industry. Each Director stands for election annually. Once elected, Directors hold office until their terms expire at the next annual meeting of stockholders and until their successors are duly elected and qualified, or until the earlier of their death, resignation or removal. Each nominee for Director will be nominated at the Annual Meeting to serve for a term expiring at the 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”), and each of the nominees has agreed to serve as a Director if elected by the stockholders.

Director Nominees

Each nominee for Director, other than Mr. El-Khoury, has been determined to be “independent,” as that term is defined under applicable rules and regulations of the SEC and The Nasdaq Global Select Market LLC (“Nasdaq”). For an overview of committee membership, please see the “The Board of Directors and Corporate Governance – Committees of the Board” section of this proxy statement. The following is a summary of certain aggregated characteristics and qualities of our Board:

Set forth below is additional information concerning the nominees for Director. In addition to the specific qualifications described below, we believe that each Director has the business acumen and sound judgment required for the proper functioning of our Board and the integrity, honesty and adherence to high ethical standards necessary to set the “tone at the top” for our Company. Most of our Directors also have significant experience on other public company boards of directors that broadens their knowledge of board processes, issues and solutions.

Semiconductor

Public Company Management

International

Manufacturing

Finance

Compliance

Relevant Skills and Qualifications

Marketing

Mergers and Acquisitions

Government Relations

Environmental, Social and Governance (“ESG”)

Sustainability/Climate

Information Security

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Management Proposals

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Management Proposals

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Management Proposals

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Management Proposals

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Management Proposals

Required Vote

Upon recommendation of the Governance and Sustainability Committee of the Board (the “GS Committee”), the Board has concluded that re-nominating each Director named above would strike the appropriate balance of perspectives and qualifications on the Board and align with the Company’s current and future business objectives.

To be elected, each of the nominees for Director must receive the affirmative vote of the majority of votes cast, meaning that the number of votes cast “FOR” a nominee must exceed the number of votes cast “AGAINST” that nominee. Abstentions and Broker non-votes are not treated as votes cast and, therefore, will have no effect on the outcomes of any of the proposals. Unless you withhold your vote or indicate otherwise on your proxy card, and except in a case of an abstention or Broker non-vote, proxies will be voted “FOR” the election of the nominees for Director. The Board has no reason to believe that any of the nominees for Director will be unable to serve. If, however, any one of them should become unavailable, the Board may reduce the size of the Board or designate a substitute nominee. If the Board designates a substitute nominee, shares represented by proxies will be voted for the substitute nominee.

The Board of Directors recommends a vote “FOR” the election of each of the nominees for Director in Proposal No. 1.

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Management Proposals

Proposal No. 2: Advisory (Non-Binding) Resolution to Approve Named Executive Officer Compensation

As required by Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are asking for stockholder approval of the compensation of our named executive officers identified in the “Compensation Discussion and Analysis — Overview” section of this proxy statement (the “NEOs”). The Board of Directors recommends that our stockholders approve such compensation by approving the following advisory resolution:

RESOLVED, that the stockholders of ON Semiconductor Corporation approve, on an advisory basis, the compensation of the Company’s named executive officers identified in the Summary Compensation Table included in this proxy statement as such compensation is described pursuant to Item 402 of Regulation S-K in this proxy statement (which disclosure includes the Compensation Discussion and Analysis and the compensation tables and accompanying footnotes and narratives under the heading “Compensation of Executive Officers” in this proxy statement).

The principal objective of our compensation programs is to attract, retain and motivate highly talented individuals who will deliver competitive financial returns to our stockholders and accomplish our short-term and long-term plans and goals. The Company seeks to accomplish this objective by rewarding performance, both individual and corporate, in a way that is aligned with the short-term and long-term interests of the Company and its stockholders. Consistent with this philosophy, the majority of the total compensation opportunity for each of our NEOs is incentive-based, and a significant portion of such compensation is dependent upon the Company’s or the individual’s achievement of specified and predetermined financial and operational goals. The Company believes that its executive compensation program satisfies the Company’s compensation objectives. We describe our compensation policies and programs in more detail below in this proxy statement, including in the Compensation Discussion and Analysis section of this proxy statement (the “CD&A”).

As an advisory vote, this proposal is not binding upon the Company. However, the Human Capital and Compensation Committee of the Board (the “HCC Committee”), which is responsible for designing and administering the Company’s executive compensation programs, values the opinions expressed by stockholders. If there are a significant number of negative votes, the HCC Committee will seek to understand the concerns that influenced the voting and will consider whether any actions are necessary to address those concerns.

The Board has previously adopted a policy providing for an annual advisory vote to approve the compensation of our NEOs. Unless the Board modifies its current policy, the next advisory vote will be at the 2023 Annual Meeting.

Required Vote

The affirmative vote of a majority of the votes duly cast on this item is required to approve this Proposal No. 2. Abstentions and Broker non-votes are not treated as votes cast and, therefore, will have no effect on the outcome of this Proposal No. 2.

The Board of Directors recommends a vote “FOR” the advisory (non-binding) resolution to approve the compensation of our NEOs in Proposal No. 2.

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Management Proposals

Proposal No. 3: Ratification of Selection of Independent Registered Public Accounting Firm

The Audit Committee of the Board (the “Audit Committee”): (i) has selected PricewaterhouseCoopers LLP (“PwC”) as the independent registered public accounting firm to (1) audit our consolidated financial statements for the year ending December 31, 2022, and (2) render other services as required of them, including to report on the effectiveness of our internal control over financial reporting as of December 31, 2022; and (ii) is seeking ratification of this selection from the stockholders of the Company. PwC has served as the Company’s independent auditor since 2001.

In determining whether to retain PwC as our 2022 independent auditor, the Audit Committee considered, among other things:

Based on this evaluation, the Audit Committee believes that the retention of PwC as our independent auditor for the year ending December 31, 2022 is in the best interest of the Company and our stockholders.

A representative of PwC is expected to be present at the Annual Meeting. If present, the representative will have an opportunity to make a statement, if such representative desires to do so, and will be available to respond to appropriate questions by stockholders.

Stockholder ratification of the selection of PwC as our independent registered public accounting firm is not required by the bylaws of the Company (the “Bylaws”) or otherwise. Nonetheless, the Audit Committee is submitting the selection of PwC to the stockholders for ratification as a matter of good corporate practice and because the Audit Committee values stockholders’ views on our independent auditor.

If the stockholders fail to ratify the selection, the Audit Committee may reconsider the selection of PwC. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a selection would be in our best interest and the best interest of our stockholders.

Audit and Related Fees

The Audit Committee reviews and approves audit and permissible non-audit services performed by PwC, as well as the fees charged by PwC for such services. In its review of non-audit services and fees and its selection of PwC as our independent registered public accounting firm, the Audit Committee considered whether the provision of such services is compatible with maintaining PwC’s independence. The table below sets forth the aggregate fees for audit and other services provided by PwC for each of the past two fiscal years.

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Management Proposals

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services

Under the Audit Committee’s charter, the Audit Committee must pre-approve all audit and permitted non-audit services (including the fees and terms thereof) to be performed by our independent registered public accounting firm, except for any de minimis non-audit services that are approved by the Audit Committee prior to the completion of the audit and that qualify for the de minimis exception under federal securities laws and regulations.

The Audit Committee’s pre-approval policy (the “Pre-Approval Policy”) requires the Audit Committee to pre-approve certain audit, audit-related, tax, tax-related and other services to be performed by our independent registered public accounting firm. With certain exceptions, the term of pre-approval is 12 months from the date of pre-approval. The Audit Committee periodically revises the list of pre-approved services. The Audit Committee may delegate pre-approval authority to one or more of its members, who then must report any pre-approval decisions to the full Audit Committee at its next scheduled meeting, but the Audit Committee may not delegate such decisions to management. In granting any such pre-approvals, the Audit Committee considers the extent to which approved services could impair the independence of our independent registered public accounting firm. With respect to each proposed pre-approved service, the auditor must provide the Audit Committee, upon request, with detailed back-up documentation regarding the specific services to be performed. During 2021 and 2020, all audit and permissible non-audit services were pre-approved by the Audit Committee pursuant to the Pre-Approval Policy and its charter.

The Audit Committee has determined that the provision of services described above is compatible with maintaining PwC’s independence.

Required Vote

The affirmative vote of a majority of the votes duly cast on this item is required to approve this Proposal No. 3. Abstentions are not treated as votes cast and, therefore, will have no effect on this Proposal No. 3.

The Audit Committee and the Board of Directors recommend a vote “FOR” approval of Proposal No. 3.

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THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

The Board met seven times in 2021, and the committees of the Board and the former Science and Technology Committee of the Board (the “Science and Technology Committee”) held a total of 23 meetings. Each incumbent Director serving during 2021 attended more than 75% of all Board and applicable committee meetings held during his or her period of service in 2021. We do not currently have a formal policy with regard to Directors’ attendance at annual meetings of stockholders. Notwithstanding the public health concerns related to the novel coronavirus 2019 (“COVID-19”) pandemic, eight of our ten Directors serving during 2021 attended the annual meeting of stockholders held on May 20, 2021 (the “2021 Annual Meeting”).

Board Diversity

Diversity

We endeavor to have a Board representing diverse experiences in areas that are relevant to the Company’s global activities. In particular, we value international business experience and, as such, our directorship mix reflects that emphasis. With respect to traditional diversity concepts, two of our Board members self-identify as women and two Board members self-identify as Asian. Our non-employee directors (the “Outside Directors”) who have been nominated for re-election to the Board have a balance of tenure (average tenure of 5 years), age (average age of 62 years) and racial, ethnic and gender diversity (approximately 33.3% of the Outside Directors) that provides our Board with an effective mix of experience and fresh perspectives. The Board will continue to evaluate from time to time the addition to the Board of any Director candidate that may complement the knowledge, skills and experience possessed by the nominees for Director to ensure that the composition of the Board appropriately reflects changes in the Company’s evolving business. The Board’s self-evaluations and desire to act on this ability to enhance the composition of the Board through the consideration of additional members have resulted in a refreshment of 50% of the Board over the last 18 months.

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The Board of Directors and Corporate Governance

The GS Committee is required to develop and periodically review criteria for nominees for Director. When the GS Committee considers diversity, as it did in connection with the Board’s 2021 self-evaluation process, it considers diversity of experience, thought, skills and viewpoints, as well as traditional diversity concepts, such as race, ethnicity or gender, as it deems appropriate. Among other matters, the GS Committee may consider the following nomination criteria regarding Board membership:

The Board’s goal is to assemble a diverse set of directors who bring together a variety of perspectives and skills derived from high-quality business, professional and personal experiences. Directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively and should be committed to serve on the Board for an extended period of time. The GS Committee believes that it is appropriate for more than one member of the Board to meet the criteria for an “audit committee financial expert,” as defined by SEC rules, and for the Chief Executive Officer of the Company (the “CEO”) to participate as a member of the Board. Current members of the Board with skills and experience that are relevant to the Company’s business and who are willing to continue in service are considered for re-nomination. If any member of the Board does not wish to continue in service, if the GS Committee decides not to re-nominate a member for re-election or determines to replace that Director or if the Board considers increasing the size of the Board, the Board then identifies the desired skills and experience for a new nominee in light of the criteria described above. Pursuant to its charter, if a stockholder nominates a director in accordance with the Director nomination procedures described in the Bylaws, the GS Committee will consider that nomination and evaluate such stockholder nomination in the same manner as it evaluates other nominees.

Considerations for Independence Determinations

Independence Determination

The Board has determined that the following Directors serving on the Board during all or any portion of 2021 are independent according to the applicable rules of the SEC and the listing standards of Nasdaq: Atsushi Abe, Alan Campbell, Susan K. Carter, Thomas L. Deitrich, Gilles Delfassy, Emmanuel T. Hernandez, Bruce E. Kiddoo, Paul A. Mascarenas, Gregory L. Waters and Christine Y. Yan.

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The Board of Directors and Corporate Governance

Transactions and Relationships Considered in Independence Determinations

Consistent with Nasdaq listing standards, in making its independence determinations, the Board considered transactions occurring since the beginning of 2019 between the Company and the Directors, members of their immediate families and entities associated with the Directors or members of their immediate families. The following table contains the transactions occurring since January 1, 2019 that the Board considered in determining the independence of the current Outside Directors, each of whom is a nominee for Director:

In each applicable instance, the amounts paid to and/or received from each organization (and onsemi) were below the 5% of consolidated revenues of the recipient entity threshold set forth in Nasdaq listing standards. Upon considering the above transactions and associations certain of our Outside Directors have with other companies, including other companies in the semiconductor industry, the Board determined that no “categorical” bars to independence under Nasdaq listing standards applied to any of the Outside Directors and that no relationships exist that, in the opinion of the Board, would impair the independence of any of the Outside Directors.

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The Board of Directors and Corporate Governance

Committees of the Board

Our standing Board committees and membership are as follows:

Each of our standing Board committees has a formal written charter, a copy of which is available on the Investor Relations section of our website at www.onsemi.com. During 2021, as part of its review of the standing committee structure, the Board undertook a review of the charters for each of the standing committees and refreshed them in light of the Company’s evolving business, recent developments in corporate governance (including the Board’s focus on ESG initiatives) and an effort to streamline governance processes within the Company. The adequacy of the charters for each of the Audit Committee, HCC Committee and GS Committee is reviewed at least annually. Below is an overview of the functions served by each standing committee, which contains highlights of the charters available on our website.

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The Board of Directors and Corporate Governance

The Board has determined that each member of the Audit Committee during 2021 and each current member of the Audit Committee is independent within the meaning of applicable SEC rules and Nasdaq listing standards and that each current member of the Audit Committee is financially competent under the current Nasdaq listing standards. The Board has also determined that each of Alan Campbell, Susan K. Carter and Bruce E. Kiddoo, all of whom are independent members of the Audit Committee, meet the qualifications of an “audit committee financial expert” in accordance with SEC rules and similar financial sophistication rules under Nasdaq listing standards.

During 2021, the Board, in conjunction with the members of the GS Committee, took on a more active role in the oversight of the Company’s climate- and sustainability-related initiatives, recognizing the increasing importance of ESG oversight and of the threat presented by climate change. As a reflection of the Board’s enhanced focus on ESG matters, the “Corporate Governance and Nominating Committee” was renamed as the “Governance and Sustainability Committee” in 2021.

The GS Committee may engage in research to identify qualified individuals, which may include engaging a professional search firm from time to time.

The Board has determined that each member of the GS Committee during 2021 and each current member is independent within the meaning of applicable SEC rules and Nasdaq listing standards.

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The Board of Directors and Corporate Governance

Pursuant to its charter, the HCC Committee also prepares a report required by SEC rules for inclusion in our proxy statement. This report is included in this proxy statement immediately following the CD&A.

During 2021, the Board, in conjunction with the members of the HCC Committee, expanded the formal oversight in managing the Company’s approach to human capital management, recognizing the vital role that the Company’s workforce plays in generating its financial and operational success. In turn, the former “Compensation Committee” was expressly tasked with oversight of the Company’s policies and strategies with respect to human capital and was renamed as the “Human Capital and Compensation Committee.”

The Board has determined that each member of the HCC Committee during 2021 and each current member of the HCC Committee is independent within the meaning of applicable SEC rules and Nasdaq listing standards.

Other Committees

The Board, from time to time, has deemed it desirable and in the best interest of the Company to form and/or dissolve various special committees and other independent committees.

The Science and Technology Committee had been responsible for advising the Board as to the scope, health, direction, quality, investment levels and execution of the Company’s technology and innovation strategies. The Science and Technology Committee, which included Ms. Yan and Messrs. Abe, Deitrich, Delfassy and Waters as members, did not meet in 2021. In August 2021, the Board, in consultation with the GS Committee, determined that there was overlap in the roles served by certain of the committees of the Board and, accordingly, dissolved the Science and Technology Committee as part of an effort to streamline the Company’s governance processes.

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The Board of Directors and Corporate Governance

Annual Board and Committee Self-Evaluations

The Board believes that having good governance principles and practices improves the effectiveness of the Board and correlates to the creation of stockholder value. To measure its own operation against such principles and practices and to identify and act on areas for improvement, each of the Board and its committees performs an annual self-evaluation. The GS Committee is charged with overseeing the self-evaluations, and in 2021, the GS Committee used the following process to conduct the Board’s self-evaluation:

In the Board self-evaluation process, topics and questions for 2021 were grouped into seven categories:

The GS Committee and the Board consider the tools, processes, topics and questions for the self-evaluation as warranted, including consideration of whether to retain an independent third party to facilitate the Board’s self-evaluation. The Board and its committees may perform the annual self-evaluations using different tools and processes in future years. In 2021, the self-evaluation of the committees generally followed the process used by the Board, except that results were sent to committee chairs (as opposed to the Chair of the GS Committee), and committee chairs led the discussions for their respective committees with the Board in executive session.

Annual Director Individual Evaluations

We believe that each of our Directors can and does benefit from candid feedback received from other Board members about his or her individual performance. Accordingly, we conduct annual individual evaluations to obtain information about each Director’s individual performance, contributions and effectiveness. These Director individual evaluations are critical tools that promote more authentic board collaboration, improve the skills and perspectives of our Directors and allow them to receive guidance from esteemed colleagues.

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The Board of Directors and Corporate Governance

2021 Compensation of Directors

Discussion of Director Compensation

The HCC Committee regularly reviews the compensation payable to Outside Directors. In reviewing Board compensation practices, the HCC Committee is advised by its outside consultants from time to time. In May 2021, the Company’s independent compensation consultant, Pearl Meyer & Partners, LLC (“Pearl Meyer”), provided the HCC Committee with an analysis of Outside Director compensation, including a review of director compensation of the Company’s peer group (the “Pearl Meyer Director Compensation Report”). The peer group for this analysis consisted of the same comparator group that is used to evaluate executive compensation.

In determining compensation and benefits for our Directors, the HCC Committee is guided by three goals: (i) to fairly pay Outside Directors for work required relating to Board service at a public company of our size and scope; (ii) to align Outside Directors’ interests with the long-term interests of our stockholders; and (iii) to structure the compensation in a way that is simple, transparent and easy for our stockholders to understand. Generally, the HCC Committee believes that these goals are served by compensating Outside Directors with a balance of cash and equity-based awards. Based on the Pearl Meyer Director Compensation Report and the recommendations therein, in May 2021, the HCC Committee adopted the 2021 compensation program for our Outside Directors (the “Outside Director Compensation Program”), which is described below.

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The Board of Directors and Corporate Governance

Retainers

Under the Outside Director Compensation Program, the annual cash retainers for Outside Directors were increased from $70,000 to $75,000 and an additional cash retainer for the Chair of the Board was increased from $100,000 to $120,000, respectively, but they otherwise remained consistent with the retainers paid during the previous year. Retainers for 2021 were as follows:

Annual cash retainers are generally paid quarterly in arrears, except that the retainers for the fourth quarter are typically paid before year-end.

Equity Compensation

Under the Outside Director Compensation Program, each Outside Director receives an annual award of fully vested stock with a value equal to approximately $205,000, rounded up such that only whole shares are issued. The 2021 annual award for Outside Directors was granted on May 20, 2021, and the amount of such award was based on the closing price of our stock on the grant date ($38.53). Each Outside Director serving on the Board on the grant date therefore received a stock award of 5,321 shares in 2021. In connection with their appointment to the Board, each of Messrs. Kiddoo and Waters also received a stock grant of 2,854 shares in early 2021. The 2021 grants were made under the ON Semiconductor Corporation Amended and Restated Stock Incentive Plan (the “SIP”). Under the Outside Director Compensation Program, if an Outside Director is appointed after the date of the annual grant, the award amount is prorated based on the period of the year during which the Outside Director serves.

Other

We reimburse Outside Directors for reasonable expenses incurred to attend Board and committee meetings and to perform other relevant Board duties. Employee Directors do not receive any additional compensation for their services as members of the Board.

Majority Voting for Directors

Each Director is elected by a majority of the votes cast with respect to that Director’s election at any meeting for the election of Directors at which a quorum is present, except if, as of the 10^th day preceding the date the Company first mails its notice of meeting for such meeting to the stockholders, the number of nominees exceeds the number of Directors to be elected (a “Contested Election”), then the Directors would be elected by the vote of a plurality of the votes cast. For a discussion of the dynamics of the Company’s majority voting system, please refer to the “Required Vote” section of Proposal No. 1.

In the event an incumbent Director fails to receive a majority of the votes cast in an election that is not a Contested Election, the incumbent Director must promptly tender his or her resignation to the Board. The GS Committee, or such other committee designated by the Board for this purpose, will make a recommendation to the Board as to whether to accept or reject the resignation of such incumbent Director, or whether other action should be taken. The Board must act on the resignation, taking into account such committee’s recommendation, and publicly disclose (by a press release and filing an appropriate disclosure with the SEC) its decision regarding the resignation and, if such resignation is rejected, the rationale behind the decision, within 90 days following certification of the election results. The GS Committee in making its recommendation, and the Board in making its decision, each may consider any factors and other information that it considers appropriate.

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The Board of Directors and Corporate Governance

If the Board accepts a Director’s resignation pursuant to these provisions, or if a nominee for Director is not elected and the nominee is not an incumbent Director, then the resulting vacancy may be filled by vote of a majority of the Directors then in office pursuant to Article NINTH, Section 2 of our Certificate of Incorporation.

Other Board Matters

Board Leadership Structure

We currently separate the roles of CEO and Chair of the Board to align the Chair role with our Outside Directors and to further enhance the independence of the Board from management. Our Chair works closely with our CEO and Chief Legal Officer to set the agendas for meetings, facilitate information flow between the Board and management and gain the benefit of the CEO’s Company-specific experience, knowledge and expertise.

The Board’s Role in Risk Oversight

While management is responsible for the day-to-day management of the Company’s risk, the Board plays an ongoing and active role in the oversight of such risk by regularly reviewing and discussing with management areas of material risk to the Company and mitigation measures being taken to address such risks. During the 2021 fiscal year, the Board and its committees regularly discussed the ongoing impacts of the COVID-19 pandemic on the Company and its operations while keeping abreast with developments and pursuing efforts to ensure the health and safety of the Company’s workforce in light of the evolving nature of the pandemic. While the Board has primary responsibility for risk oversight, the Board’s committees support the Board by regularly addressing risks in their respective areas of oversight. Specifically, the Audit Committee’s charter requires the Audit Committee to discuss with management the Company’s major financial and cybersecurity risk exposures. In addition, the GS Committee’s charter requires it to oversee the ERM Program and provide guidance to the Board regarding its risk oversight responsibilities. Also, the HCC Committee’s charter requires it to consider and discuss with management whether compensation arrangements for Company employees incentivize unnecessary and excessive risk-taking, and in designing our compensation programs and structuring awards, the HCC Committee considers the likelihood of undue risk-taking and the impact that such compensation decisions may have on the Company’s risk profile. The chair of the relevant committee then reports on risk discussions to the full Board to the extent appropriate. This dual track of direct Board oversight and oversight through its committees is designed to foster a fulsome discussion of risks facing the Company. The Board’s role in risk oversight has not affected its leadership structure.

Periodic Risk Evaluations. As part of its review of the Company’s material areas of risk, the Board meets with representatives from the ERM Program multiple times per year to discuss areas of material risk to the Company in light of its strategy and evolving business plans. Business unit leaders and the heads of certain administrative function groups provide annual and mid-year status reports to the Board. These reports include risk evaluation and assessment as a matter of course. At least annually, the Board reviews how risk is being managed and reported to the Board and its committees, along with areas where the Board would like additional analysis or discussion. Comprehensive risk analysis is a significant part of such planning.

Information Security Risk Management. Management and the Board consider and evaluate from time to time the risk of cybersecurity breaches and vulnerabilities and how best to mitigate such risks. Pursuant to its charter, the Audit Committee has the responsibility for overseeing the Company’s cybersecurity posture, risk assessment, strategy and mitigation and making recommendations as to how to address and resolve any breaches or issues related to the protection or privacy of the Company’s data. The Audit Committee receives regular reports from our Corporate Internal Audit Department on internal audit matters and receives reports at least quarterly from our Chief Information Officer and/or Chief Information Security Officer and our Chief Privacy Officer on information security and data privacy and protection, including on trends in cyber threats and the status of initiatives intended to bolster the Company’s security systems and employees’ cyber readiness. Additionally, under the Company’s Insider Trading Policy (the “Insider Trading Policy”), the Company’s Securities Compliance Officer may impose a black-out on securities trading in the event of a cybersecurity breach or attack. Under such circumstances, as a further measure to promote compliance with the trading black-out, the Insider Trading Policy also imposes a duty upon the Securities Compliance Officer to notify the CEO and our Chief Financial Officer (the “CFO”) of the black-out at or before the time it is imposed.

onsemi adopted the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework in 2014. The NIST Cybersecurity Framework provides an intuitive and comprehensive set of control objectives that align with a number

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of other standard frameworks such as ISO 27001:2013 and COBIT 5. The Company has implemented a number of methods to train employees and management on data protection and malware detection, including a robust information security training and compliance program. As part of this program, the Company regularly sends artificially created phishing emails that test employees’ understanding of the tactics commonly used by scammers and hackers. This effort to increase employee information security proficiency has occurred in tandem with an enhancement in the Company’s system-wide security measures. No identified information security breaches were reported in 2021 despite the turbulent data landscape, nor has any such breach occurred in the last three years. Meanwhile, the Company’s Information Security team collaborated with the Company’s Treasury Department and obtained cybersecurity insurance, which would reimburse for certain costs that may be incurred in the event that the Company was required to respond to and recover from a data breach. The Information Security Program at the Company has also established a Cyber Incident Response Team comprised of subject matter experts from the Company’s global IT team that is tasked with responding quickly in the event of a serious or material data breach, and contracted with Verizon’s RISK (Research, Investigations, Solutions, Knowledge) team and IBM’s X Force IRIS (Incident Response and Intelligence Services) to provide security and forensic expertise in the case of such an event. Lastly, the Company’s Information Security Risk team updates its strategy each year to align with developments in the Company’s business strategy and by considering and adapting to the legal and regulatory mandates relevant to the business and countries in which the Company operates.

The Board’s Role in Diversity, Equity and Inclusion Oversight

We push innovation to create intelligent power and sensing technologies that solve the most challenging customer problems. Our employees are inspired to go above and beyond to increase stakeholder value through high quality and high value products and services. The Company’s mission is supported by a strong company culture focused on welcoming diversity of opinion and celebrating stakeholders from all walks of life. Pursuant to its charter, the GS Committee has the responsibility of overseeing matters related to ESG, subject to any specific matter connected to ESG initiatives that is expressly assigned to another committee of the Board. Meanwhile, pursuant to its charter, the HCC Committee has the responsibility of overseeing the Company’s policies and strategies in respect of human capital, which include those regarding diversity, equity and inclusion. In turn, each of the GS Committee and the HCC Committee plays a role in the Company’s management and oversight of diversity, equity and inclusion. The HCC Committee considers diversity, equity and inclusion in its broader review of pay equity within the Company. In turn, the HCC Committee designed certain of the goals tied to the 2021 Bonus Program (as defined below) to align with organizational improvements to the Company’s diversity and inclusion initiative and, in 2020 and certain prior years, elected to use the achievement of a specified level of diversity within the Company’s workforce as a performance measure for the compensation of NEOs under the Company’s short-term incentive compensation program.

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The Board of Directors and Corporate Governance

Corporate Governance Principles

Our Corporate Governance Principles (the “Principles”) provide guidance for a variety of corporate governance matters and are available on our website at www.onsemi.com. The GS Committee reviews the Principles annually and recommends amendments to the Board, as appropriate. Below is a summary of certain of our corporate governance practices, many of which are addressed in the Principles and our Bylaws:

The Role of the Board and Management

Our business is conducted by our employees and officers, under the direction of the CEO and the oversight of the Board, to enhance the long-term value of the Company for its stockholders. Both our Board and management recognize that the long-term interests of stockholders are advanced by responsibly addressing the concerns of other stakeholders and interested parties, including employees, recruits, customers, suppliers, creditors, onsemi communities, government officials and the public at large.

Functions of the Board

The Board has at least four regularly scheduled meetings per year at which it reviews and discusses reports by management on our performance, plans and prospects and immediate issues facing the Company. The Board may choose to schedule additional meetings in accordance with our Bylaws. In addition to general oversight of management, the Board, acting directly or through its various committees, also performs specific functions, including, among other things: (i) selecting, evaluating and compensating the CEO and other senior executives and overseeing CEO succession planning; (ii) reviewing, monitoring and, where appropriate, approving fundamental financial and business strategies and major corporate actions; (iii) providing oversight for the ERM Program, including the establishment of corporate risk appetite parameters and management’s implementation of processes for assessing and managing risks affecting the Company; (iv) ensuring that processes are in place for maintaining the integrity of the Company, financial statements, compliance with law and ethics, relationships with customers and suppliers and relationships with other stakeholders; and (v) performing such other functions as are prescribed by law or our Bylaws.

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Qualifications

Directors should possess the highest personal and professional ethics, integrity and values and be committed to serving on the Board for an extended period of time. They must also have an inquisitive and objective perspective, practical wisdom and mature judgment. We endeavor to have a Board representing diverse experiences in areas that are relevant to the Company’s global activities and strategies in order to guide the Company in meeting its legal, financial and operational objectives.

Independence of Directors

We will have, at a minimum, a sufficient number of independent Directors to comply at all times with relevant and applicable SEC, Nasdaq and other rules and regulations.

Compensation of the Board

The Board has delegated responsibility for determining Outside Director compensation to the HCC Committee, and such responsibility is codified in the HCC Committee’s charter. For a discussion of the compensation provided to Outside Directors, please refer to the “The Board of Directors and Corporate Governance — 2021 Compensation of Directors” section of this proxy statement.

Director and Officer Stock Ownership and Retention Guidelines

In order to align Directors’ and officers’ interests and objectives with those of our stockholders, and to further promote the Company’s longstanding commitment to sound corporate governance, the Company has established the following guidelines for Company stock ownership and retention:

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The Board of Directors and Corporate Governance

If compliance would create a severe hardship or for other good reasons, these guidelines may be waived for: (i) Outside Directors other than the Chair of the Board, at the discretion of the Chair of the Board; (ii) the Chair of the Board and the CEO, at the discretion of the HCC Committee; and (iii) officers, at the discretion of the HCC Committee and the CEO. It is expected that these instances will be rare.

Other Matters

The Principles include a discussion of Board size and selection, the determination of the Board agenda, access to senior management and independent advisors and other matters typical of boards of directors of other publicly traded semiconductor or peer companies.

Ethics and Compliance Program

We are committed to having and maintaining a strong and effective global ethics and compliance program. In 2022, for the seventh consecutive year, the Company was named a World’s Most Ethical Company^® by the Ethisphere Institute, a global leader in defining and advancing the standards of ethical business practices. The designation recognizes organizations that align principle with action by working tirelessly to make integrity part of their corporate DNA. These efforts shape future industry standards by introducing tomorrow’s best practices today. Notably, the Company was one of only four companies honored in the semiconductor industry in 2022, highlighting its leadership among global companies in ethical business standards and practices. The GS Committee has the responsibility under its charter to review and oversee matters related to ethics matters, while the Audit Committee has the responsibility under its charter to review and oversee legal compliance matters.

We always strive to comply with the law and have adopted policies and practices that go beyond what the law requires in order to foster an ethical culture. To that end, we have established within the Law Department of the Company an ethics and compliance program (the “Ethics and Compliance Program”) designed to prevent, detect and respond to violations of the onsemi Code of Business Conduct (the “Code of Business Conduct”) and related policies and procedures, other standards of conduct and the law. A major goal of the Ethics and Compliance Program is to promote an organizational culture that aligns with our core values while encouraging ethical conduct and a commitment to compliance.

We have also established avenues for parties external to the Company to raise ethics and compliance concerns regarding our employees, Directors and third parties doing business with the Company directly to our Chief Compliance Officer. Reports may be made anonymously where allowed by local law (or on a non-anonymous basis) by:

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Environmental and Social Initiatives

Overview of Environmental, Social and Sustainability Initiatives

In addition to the information contained in this proxy statement, we publish an annual report detailing our social and sustainability initiatives, accomplishments and objectives (the “Sustainability Report,” formerly the “Corporate Social Responsibility Report”). In March 2022, in connection with the Company’s recent commitment to becoming net zero (discussed below), we united our ESG activities and corporate social responsibility efforts by launching the “Tomorrow, today” campaign. Our 2020 Corporate Social Responsibility Report and a more thorough discussion of the “Tomorrow, today” campaign are available on our website at www.onsemi.com, and the Company intends to publish the 2021 Sustainability Report on our website in June 2022. Below are a few of the highlights of our social and sustainability practices and policies:

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The Board of Directors and Corporate Governance

Commitment to Fighting Climate Change

In August 2021, onsemi announced that it plans to achieve net-zero emissions by 2040. Today, the industrial and automotive end-markets are responsible for a majority of the world’s greenhouse gas emissions, so the Company sees its position as a market leader in intelligent power and sensing technologies as offering an opportunity to help steward these end-markets toward a more sustainable future. Through targeting energy efficiency and displacing other, less efficient semiconductor components being employed in its target end-markets, onsemi seeks to deter the negative impacts of climate change and encourage proactive measures to save our planet. Achieving net-zero emissions means the Company will eliminate emissions from our energy use and pursue deep decarbonization in our operations. All non-electricity emissions that cannot be eliminated will be offset by high-quality offset projects. To accomplish this goal, onsemi plans to capitalize on efficiencies that will reduce overall emissions, transition to renewable energy to ensure clean energy use and invest in high-quality carbon off-sets for non-electricity emissions. The Company will achieve its net-zero goal through the pursuit of a strategy formed by three pillars:

The GS Committee has taken express oversight of climate- and sustainability-related initiatives and other Company actions associated with the environment, explicitly incorporating this responsibility into its charter. As the Company forges ahead as a leader in combatting climate change in the semiconductor and manufacturing spaces, the GS Committee will assist the Board in providing guidance and oversight in respect of strategy, risk management, capital expenditures, opportunities and investments in the context of climate change.

Code of Business Conduct

We have adopted a Code of Business Conduct that is applicable to all of our Directors, officers and employees, and we believe the Code of Business Conduct satisfies the standards promulgated by the SEC and Nasdaq. The Code of Business Conduct is available free of charge on our website at www.onsemi.com, or a paper copy is available upon request by writing to our Investor Relations Department, ON Semiconductor Corporation, 5005 East McDowell Road, Phoenix, Arizona 85008, calling our Investor Relations Department at (602) 244-3437 or emailing your request to investor@onsemi.com.

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Legal Compliance

Working closely with the Corporate Internal Audit Department, the Law Department implements and manages ethics and legal compliance programs designed to prevent and detect violations of the Code of Business Conduct, related standards of conduct and the law by employees or third parties. Allegations of non-compliance with laws or regulations are thoroughly investigated and remediated, as appropriate.

Our Audit Committee has compliance oversight responsibility, which entails obtaining reports from the Corporate Internal Audit Department and the Law Department regarding any known material non-compliance with the law, advising the Board with respect to the Company’s legal compliance policies and procedures and discussing with the Law Department potentially material legal matters, including material inquiries received from regulators or government agencies. For more information on the Board’s oversight responsibilities, including its responsibility to oversee risk and our ERM Program, see “The Board of Directors and Corporate Governance — Other Board Matters — The Board’s Role in Risk Oversight.”

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COMPENSATION DISCUSSION AND ANALYSIS

Overview

This CD&A contains material information about our compensation objectives and policies and explains the material elements of the disclosures that are contained in this proxy statement with respect to the compensation of our NEOs. For 2021, our NEOs were:

Significant 2021 Compensation Changes

We undertook the following actions in 2021 to increase the pay-for-performance elements of our NEOs’ compensation and drive alignment with longer-term results:

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Compensation Discussion and Analysis

Compensation Program Highlights

The HCC Committee believes that the features of our 2021 compensation program and our 2021 compensation actions advanced the Company’s 2021 strategic priorities and were consistent with market practices. Below are a few of the highlights of our compensation practices and policies for our 2021 NEO compensation:

CEO Realizable Pay-for-Performance Relative to Peer Group

In the course of reviewing our overall executive compensation program each year, Pearl Meyer reviews the relationship between realizable total direct compensation (“TDC”) and our performance. This analysis influences the compensation decisions made by the HCC Committee as the HCC Committee routinely reviews realizable pay to assess program effectiveness. Given the shift that has occurred as a result of Mr. El-Khoury’s appointment as CEO in the end of 2020 and the new direction the Company has pursued under his leadership, we have elected to exclude the more thorough analysis of realizable pay-for-performance. Nevertheless, the HCC Committee prioritizes a compensation structure that aligns with its pay-for-performance philosophy and establishes a competitive pay structure amongst the Company’s peers. As a Company looking to push the boundaries of intelligent power and sensing technologies in fast-growing markets, such as electric vehicles, the HCC Committee sees the pay-for-performance compensation design as providing a results-based incentive to encourage management to strive toward achieving the Company’s ambitious goals.

Compensation Philosophy and Guiding Principles

Our HCC Committee is responsible for establishing and implementing our compensation philosophy and guiding principles and for monitoring their effectiveness. Our compensation philosophy is focused on the following core principles:

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Compensation Discussion and Analysis

Purpose of Compensation

The goal of our compensation programs is to enhance stockholder value by delivering a competitive compensation package consisting of base salary, short-term incentives and long-term incentives. Taking into account these three components, but excluding other benefits described in the Summary Compensation Table below, approximately 91% of Mr. El-Khoury’s target TDC during 2021 was incentive-based compensation. The target TDC of all other NEOs (other than Bernard Gutmann) as a group during 2021 was approximately 84% incentive-based compensation.

STI: Short-term incentive LTI: Long-term incentive				STI: Short-term incentive LTI: Long-term incentive

Short-term incentives in our compensation program are cash-based. Such incentives are intended to promote superior operational performance, disciplined cost management and increased productivity and efficiency that contribute significantly to positive results for our stockholders. Long-term incentives in our compensation program are stock-based. The aim of the long-term incentives is to motivate long-term performance while promoting employee retention. The long-term incentive grants also afford each NEO the opportunity to increase stock ownership, which further aligns the NEO’s interest with those of our stockholders and assists the NEO in complying with our stock ownership guidelines. While our emphasis in determining the total reward package for each NEO is on performance incentives, we also provide elements

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that are not solely performance-based, including base salary, time-based equity awards and limited perquisites. The HCC Committee considers peer group and market practices in determining the appropriate level of performance-based and non-performance-based elements in our compensation programs.

Processes and Procedures for Considering and Determining Executive Compensation

Among other responsibilities, our HCC Committee is primarily responsible for establishing the compensation programs for our NEOs and other senior executives, including the CEO, as well as monitoring, annually reviewing and approving the goals and objectives relevant to these programs.

Our Stockholder Engagement Program. We emphasize transparency in our approach to stockholder communications and seek out engagement and feedback from current and prospective stockholders on corporate strategy, executive compensation, corporate governance and other topics of importance. Through these engagements with our stockholders, we have received feedback in support of our existing executive compensation program and, in particular, the HCC Committee’s decision to further drive accountability and reinforce our culture of compliance, diversity, equity and inclusion, commitment to ESG principles and ethics. These discussions, our say-on-pay voting results, the alignment of the Company’s vision and strategic goals and other factors are key drivers in our ongoing assessment of our compensation programs and help shape future programs.

Stockholder Approval of our Compensation Decisions. At the 2021 Annual Meeting, the Company’s stockholders approved the advisory (non-binding) vote on executive compensation by 89.8% of the votes cast. The HCC Committee considers this vote, as well as the Company’s record 2021 performance, a validation of its compensation philosophy and approach to executive compensation, and generally has continued its compensation processes and philosophy in making 2022 executive compensation decisions.

Role of Compensation Consultants. In May 2012, the HCC Committee engaged Pearl Meyer as its primary independent compensation consultant to assist in recommending the form and amount of executive and director compensation. The HCC Committee has reviewed the performance of Pearl Meyer annually since that date and continues to engage Pearl Meyer as its primary compensation consultant. Among other things, with respect to our 2021 compensation programs, Pearl Meyer was requested to:

After considering the independence of Pearl Meyer in light of SEC rules and Nasdaq listing standards regarding compensation consultants, the HCC Committee concluded that Pearl Meyer’s work for the HCC Committee has not raised any conflict of interest.

In determining compensation for our Outside Directors and executive officers, the HCC Committee considers information and advice provided by Pearl Meyer. The HCC Committee believes that Pearl Meyer has the requisite skills, knowledge, industry expertise and experience, as well as the necessary resources, to provide a comprehensive approach to executive and non-employee director compensation planning, strategy and governance. While the HCC Committee considers the advice and recommendations of its independent consultant, ultimately, the HCC Committee has the decision-making authority with respect to our compensation programs, including the specific amounts paid to our executive officers.

Role of Senior Executives in Determining Executive Compensation. The HCC Committee made all compensation decisions related to our NEO compensation in 2021. However, our CEO and other senior executives regularly provide information and recommendations to the HCC Committee on the compensation and performance of other officers. The senior executives also assist the HCC Committee in determining the level of achievement of the performance targets underlying performance-based awards and incentives and provide other information specifically requested by the HCC Committee from time to time. With respect to the compensation of the CEO, the independent consultant works directly with the HCC Committee. The CEO does not make, and the HCC Committee does not seek from him, recommendations on the level of his compensation, nor does any NEO or any other member of management.

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Compensation Discussion and Analysis

Use of Market Data. The HCC Committee considers competitive market data, among other factors, in determining the individual elements of our compensation programs and in allocating between cash and non-cash compensation and between short-term and long-term incentive compensation. Although the peer company or other survey data is a starting point and a significant factor in the HCC Committee’s compensation determinations, it is not the only factor. In late 2020, Pearl Meyer conducted an executive compensation study and made recommendations regarding changes to compensation design for the 2021 program (the “Pearl Meyer Report”). The HCC Committee used data provided in the Pearl Meyer Report to assist in structuring the 2021 compensation packages for our NEOs. Based on a peer group update prepared by Pearl Meyer in August 2020, the HCC Committee considered changes to the peer group in light of consolidation within the semiconductor industry and changes to the revenue and market capitalization of our peer group companies. Criteria used to screen the peer group generally included:

After considering these criteria, the HCC Committee determined that the peer group identified in 2020 for 2021 compensation decisions (the “2021 Peer Group”) would consist of:

Information provided by Pearl Meyer comparing certain Company information to the 25th percentile, 50th percentile, 75th percentile and average of the 2021 Peer Group follows:

All amounts in the table above are U.S. dollars in millions except for percentages.

In evaluating the competitiveness of the Company’s compensation program, the Pearl Meyer Report compared the compensation of senior executives to that of their functional matches (e.g., CFO compensation is compared to the compensation of peer company CFOs). The Pearl Meyer Report included information on each executive’s competitive position for base salary, total cash compensation at target (base salary and target bonus), actual total cash compensation, long-term incentives (based on grant date fair value) and TDC at target and actual (base salary, bonus and equity). In determining market data, Pearl Meyer utilized proxy statement data for the 2021 Peer Group, as well as data from three compensation surveys — the 2020 Radford Executive Survey, the 2020 Pearl Meyer Executive and Senior Management

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Compensation Discussion and Analysis

Survey and the 2020 Equilar Compensation Survey – that are primarily reflective of companies in the semiconductor industry, broader technology segments and general industry.

Among other things, the Pearl Meyer Report summarized 2020 target and actual compensation for the NEOs, which analyzes how each NEO’s compensation varies from the competitive median. In the table below, negative amounts indicate that our compensation is below the competitive median and positive amounts indicate our compensation is above the competitive median.

Other Factors. In addition to the market data provided by Pearl Meyer, the HCC Committee also assesses other factors when making compensation decisions, including, but not limited to, the executive’s individual responsibilities, skills, expertise and value added through performance, as well as prior award accumulation. Our CEO presents the HCC Committee with an individual performance overview for each executive officer, describing the officer’s accomplishments for the prior year, as well as his or her strengths, areas of improvement and development plans. The HCC Committee separately reviews CEO performance based on, among other factors considered relevant, Company performance, including revenue growth, earnings growth, gross margin improvement, free cash flow and earnings per share, and further considers downturns or volatility in general economic conditions and other issues facing the Company.

Prior Compensation. In considering awards and other adjustments to the total compensation of each NEO, the HCC Committee considers the value of previous compensation, including then-outstanding equity grants. On a quarterly basis, management also provides the HCC Committee with information concerning expectations regarding the vesting of outstanding long-term incentive awards. The HCC Committee uses this data to evaluate whether the NEO’s compensation and existing incentive opportunities from prior awards reflect Company operating performance and stockholder value, as well as the particular officer’s performance, the extent to which they continue to motivate the officer and whether adjustments are required to the program or an individual officer’s compensation.

Contractual Commitments. The HCC Committee also considers contractual commitments in determining or recommending executive pay. The employment agreements for our NEOs generally provide for an initial level of annual salary, a target percentage of annual salary that can be earned pursuant to our short-term cash incentive plans and limited perquisites.

Use and Availability of Equity. When considering equity awards to our officers, including the NEOs, the HCC Committee considers our equity availability and usage, the potential voting power dilution to our stockholders and the projected impact on our earnings per share for the relevant years. The Company believes that its share usage and potential dilution have generally been conservative compared to its peer group.

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Compensation Discussion and Analysis

Internal Pay Equity. While the HCC Committee considers internal pay equity in making compensation decisions, we do not have a policy requiring any set levels of internal pay differentiation. As previously discussed, we generally target the compensation levels among our executives to be competitive with market median. As compensation is competitively determined, the HCC Committee believes that the differentiation between the pay of Mr. El-Khoury and the other NEOs was appropriate.

Risk Analysis. The HCC Committee considers the potential for unacceptable risk-taking in its compensation design and performs periodic risk assessments with respect to its duties and actions. The HCC Committee believes that the design of our executive compensation program does not unduly incentivize our executives to take actions that may conflict with our long-term best interests. Material risk in our compensation design is mitigated in several ways, including as follows:

Elements of Our Compensation Program

Our compensation program is designed to provide a competitive total compensation package consistent with our performance in the marketplace and our desire to retain talented management. The 2021 compensation program for each of our NEOs includes:

While executives have more of their total compensation at risk than other employees, we believe that corporate and individual performance drive incentive compensation and the principles that serve as the basis for executive compensation practices generally apply to the compensation plans for all employees.

Base Salary. The primary objectives for the base salary component were to: (i) reward and retain our NEOs; and (ii) provide fixed compensation that was competitive in our market and commensurate with each NEO’s level of responsibility. The HCC Committee generally targets executive pay, including short-term and long-term incentive compensation, at the median of benchmarked market data. In addition, differences in salary among officers are based on market median data and other factors as described in this CD&A.

Due to the continued impact of COVID-19 on the Company’s operations and outlook, as well as the recency of Mr. El-Khoury’s and Mr. Trent’s joining the Company, the HCC Committee determined not to increase base salaries for

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Compensation Discussion and Analysis

the 2021 fiscal year at the time of its customary annual review in February 2021. During a review of the executive pay conducted by the HCC Committee in June 2021, however, the HCC Committee determined that the base salary for each of Messrs. Hopkin and Keeton would be significantly and adversely impacted by economic conditions and the marketplace for key talent such that the resulting effect would be that this compensation component for Messrs. Hopkin and Keeton would be significantly below market levels. Given that the base salary for each of Messrs. Hopkin and Keeton was positioned between the 25^th percentile and median of the market, the HCC Committee approved certain awards designed to align the base salaries of Messrs. Hopkin and Keeton more closely with the median of the benchmarked data. The retention measures included an increase in the annual base salary for each of Messrs. Hopkin and Keeton to $500,000. The Company believes that the retention measures taken with respect to Messrs. Hopkin and Keeton, including the base salary increases described above, were reasonable in magnitude and represent an isolated practice.

Short-Term Cash Incentive Program. The primary objectives of the 2021 short-term incentive award program (the “2021 Bonus Program”) were to:

Summary of Features. The 2021 Bonus Program had the following features:

Alignment with New Company Strategy. In designing the 2021 Bonus Program, the HCC Committee considered its primary short-term compensation objectives, including maximizing total return to stockholders, the expectations of Company performance, projected market expectations and expectations regarding individual performance and the Company’s objectives for 2021. In particular, to directly align the 2021 Bonus Program with the Company’s 2021 strategic and transformation objectives and encourage our executives to maximize profitability, growth and operational efficiency, the HCC Committee determined to include the following components in the 2021 Bonus Program: revenue, EBIT and gross margin (the “Individual Financial Components”); and certain other metrics specifically tailored to each NEO’s area of expertise and strategic focus, including non-financial goals and other metrics based on the definition and deployment of management’s new corporate strategy and the planning and execution of certain transformation initiatives (the “Individual Strategic Components”). As further described below, the interplay between the Corporate Multiplier and each NEO’s Individual Goal Achievement Percentage highlights the Company’s compensation philosophy, which is based on both Company and individual performance. The Company’s performance is embedded in the Corporate Multiplier. Meanwhile, a portion of the Individual Goal Achievement Percentage (between 40% and 50%) is tied to Company-wide financial targets and the remaining portion of the Individual Goal Achievement Percentage (between 50% and 60%) is tied to individualized performance targets pertaining to each NEO’s execution of strategic initiatives.

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Compensation Discussion and Analysis

Under the 2021 Bonus Program, a NEO’s payout was determined according to the formula below:

2021 Bonus Program Formula

Corporate Multiplier Component of the 2021 Bonus Program. As structured, cash bonuses under the 2021 Bonus Program were only payable if the minimum financial targets comprising the Corporate Multiplier (i.e., each of the revenue and EBIT targets) were met or exceeded (up to a maximum Corporate Multiplier attainment of 100%). The scoring of the financial targets comprising the Corporate Multiplier was based on the levels of achievement of the revenue growth and EBIT growth set forth in the table below, with straight line interpolation between the threshold and target levels. For 2021, the Company achieved revenue of $6.74 billion and EBIT of $1,478 million, resulting in a Corporate Multiplier of 100%.

Individual Goal Achievement Percentage Component of 2021 Bonus Program. In addition to the Corporate Multiplier, each NEO received a score based on the level of achievement of each Individual Financial Component and each Individual Strategic Component, as described below. The aggregate scores, including all Individual Financial Components and all Individual Strategic Components, were then translated to the Individual Goal Achievement Percentage that the HCC Committee utilized in calculating the total bonus payout.

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Compensation Discussion and Analysis

The scoring of the Individual Financial Components was based on the level of achievement of revenue, EBIT and non-GAAP gross margin described in the table below. Once above-threshold levels were achieved, results of the Individual Financial Components could result in attainment of up to 200% for results at or above the stretch levels, with straight-line interpolation between the threshold and target levels and between the target and stretch levels. For each of Messrs. El-Khoury, Trent and Cave, each of the threshold, target and stretch financial metrics were determined based on Company-wide revenue, EBIT and non-GAAP gross margin growth. For each of Messrs. Hopkin, Keeton and Jatou, each of the threshold, target and stretch financial metrics were determined based on revenue, EBIT and non-GAAP gross margin growth within ASG, PSG and ISG, respectively. For 2021, the Company and each of ASG, PSG and ISG attained the financial performance for 2021 set forth in the table below, resulting in a 200% achievement for the Individual Financial Components for each of Messrs. El-Khoury, Trent, Hopkin, Keeton and Cave and a 194.8% achievement for the Individual Financial Components for Mr. Jatou.

The non-GAAP financial metrics utilized for the 2021 Bonus Program were calculated consistent with the methods applied to the company’s financial statements for the production of its earnings releases. Generally, the above adjustments are not fixed and are intended to be conceptually consistent with the Company’s earnings release calculations for adjusted non-GAAP earnings per share. The HCC Committee believed that non-GAAP metrics should be used for the 2021 Bonus Program rather than GAAP metrics to prevent payments under the 2021 Bonus Program from being significantly impacted (positively or negatively) by extraordinary or unusual events or non-cash items. The HCC Committee also considered adjustments eliminating the effect of certain non-cash items to be appropriate, believing that the adjusted numbers are a better indicator of current actual Company operating performance.

The Individual Strategic Components included in the Individual Goal Achievement Percentage were scored: (i) for certain binary metrics, at either 0% or 100% attainment without linear interpolation between the attainment levels, or (ii) at up to 100% attainment, with linear interpolation for attainment between the threshold and target levels. The Individual Strategic Components were tailored to the specific initiatives focused upon by each NEO within the broader context of the Company’s strategy. The individual targets varied by NEO and consisted of items that management recommended, and the HCC Committee determined, were integral to the success of the Company, including financial, ESG, new product, quality improvement, human capital and operational initiatives. Each portion of the Individual Strategic Components was weighted with a specific point value based on its strategic importance to the Company and/or the level of complexity involved in achieving the goal. Particular scoring metrics used to determine whether a given target had been achieved were also established in advance. At the end of the fiscal year, the NEOs “scored” themselves with respect to the achievement of their individualized targets based on the scoring parameters previously communicated. Their scores were reviewed, adjusted as needed, and approved by the CEO. This scoring was then reviewed by the HCC Committee and used as a basis for its determination of each NEO’s individual bonus.

In addition, in connection with its review and scoring of the Individual Goal Achievement Percentage in January 2022 and as a result of the Company’s record financial results for fiscal year 2021 and its commitment to a pay-for-performance philosophy, the HCC Committee determined to exercise its discretion to allocate an additional 20% achievement to the Individual Goal Achievement Percentage (the “Additional Individual Goal Achievement Percentage”) for each Company employee who participates in the 2021 Bonus Program, including the NEOs. The HCC Committee also determined that

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Compensation Discussion and Analysis

the Additional Individual Goal Achievement Percentage should serve as a retention incentive and therefore that the additional 20% will be paid to employees who remain with the Company as of the payment date in July 2022.

The table below sets forth each NEO’s achievement for the Individual Strategic Components, as well as each NEO’s Individual Goal Achievement Percentage:

Target Bonus Percentage for 2021. On February 11, 2021, the HCC Committee considered the award opportunity for each NEO other than Messrs. Trent and Gutmann, and in each case, determined to retain the 2020 target as a percent of Eligible Earnings (as defined below). When the HCC Committee conducted its review of executive pay in June 2021, it was determined that the compensation of Messrs. Hopkin, Keeton and Jatou should be adjusted in order to align more closely with market levels. As a result, and as reflected in the table below, the HCC Committee approved an increase in the target annual cash bonus performance incentive opportunity for each of Messrs. Hopkin, Keeton and Jatou from 75% to 85%. In making determinations regarding these bonus opportunity levels, the HCC Committee considered, among other factors, information from Pearl Meyer and management.

40     onsemi 2022 Proxy Statement

Compensation Discussion and Analysis

Bonus Payout under the 2021 Bonus Program. The payouts under the 2021 Bonus Program for each of our NEOs were as follows: