2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 428 INTEL CORPORATION 2017 INCENTIVE COMPENSATION PAYOUTS INCENTIVE CASH COMPENSATION The corporate average payout percentage under the annual incentive cash plan for 2017 was 116% of the annual incentive cash target, compared to 101% in 2016. The Compensation Committee decided to use net income, as adjusted for the one-time tax impacts from the recognition of provisional estimates associated with the December 22, 2017 enactment of the U.S. Tax Cuts and Jobs Act (Tax Reform), for purposes of facilitating a better comparison of our current operating performance to that of prior years. Intel’s adjusted net income was up from the previous year, and was supported by strong performance under the operational measures. The link between our financial performance and the listed officers’ annual incentive cash plan is illustrated in the following graph, which shows how the average annual incentive cash payments have varied based on Intel’s net income, and for 2017 adjusted net income, results. TOTAL RETURN PERFORMANCE $12,000 $16,000 $4 $3 $2 $1 $0 $12,942 $11,005 $9,620 $11,704 $11,420 $10,316 $15,045 $2.53 $2.27 $1.45 $2.15 $1.86 $1.56 $8,000 $4,000 $0 2011 2012 2013 Net Income in Millions Listed Officer Average Incentive in Millions 2014 2015 2016 2017 1 $2.30 1 Adjusted net income was used for 2017. The chart above shows our GAAP net income results for each year, except with respect to fiscal 2017 results, which is adjusted net income and excludes the one-time tax impacts from Tax Reform. See the reconciliation of this non-GAAP measure to the comparable GAAP measure in Appendix A of this proxy statement. INCENTIVE EQUITY COMPENSATION For the January 2014 through January 2017 performance period, OSUs vested at 200%, reflecting that Intel’s TSR was 26 percentage points above the peer group median TSR over the performance period. The total payout, including dividend equivalents accrued on earned shares, was 217.1% of target. These payouts are reported in the Stock Option Exercises and Stock Vested in Fiscal Year 2017 table on page 67. 48 Compensation Discussion and Analysis 2018 PROXY STATEMENT Total of 02 pages in section