Notice of Exempt Solicitation


NAME OF REGISTRANT: Applied Materials






WRITTEN MATERIALS: The attached written materials are submitted pursuant to Rule 14a-6(g)(1) (the “Rule”) promulgated under the Securities Exchange Act of 1934,* in connection with a proxy proposal to be voted on at the Registrant’s 2024 Annual Meeting. *Submission is not required of this filer under the terms of the Rule but is made voluntarily by the proponent in the interest of public disclosure and consideration of these important issues.




January 31, 2024


Dear Applied Materials Shareholders,


We are writing to urge you to VOTE “FOR” PROPOSAL 5 on the proxy card, which asks the Company to report on unadjusted and statistically adjusted pay gaps across race and gender. The Proposal makes the following request:


Resolved: Shareholders request Applied Materials report on both quantitative median and adjusted pay gaps across race and gender, including associated policy, reputational, competitive, and operational risks, and risks related to recruiting and retaining diverse talent. The report should be prepared at reasonable cost, omitting proprietary information, litigation strategy and legal compliance information.


Racial/gender pay gaps are defined as the difference between non-minority and minority/male and female median earnings expressed as a percentage of non-minority/male earnings (Wikipedia/OECD, respectively).



We believe shareholders should vote “FOR” the Proposal for the following reasons:


1.Median pay is considered the valid way of measuring gender pay inequity by the United States Census Bureau, Department of Labor, OECD, and International Labor Organization. While the Company committed to disclosing statistically adjusted pay gaps in its opposition statement, it has failed to commit to disclosing median pay gaps. Pay gaps are literally defined as the median pay of minorities compared to non-minorities and the median pay of women compared to men. Therefore, that is the data investors seek. While diversity data and statistically-adjusted-pay audits represent progress, that data is not a stand in for median pay gap disclosures. The definition is clear.


2.Best practice pay equity reporting consists of two parts:
1.unadjusted pay gaps: median gaps assess how jobs are distributed by race and gender, and which groups hold the high-paying jobs- the data requested in this proposal.
i.The median pay of minorities/women working full time versus non-minorities/ men working full time. This is literally the definition of the pay gap.




ii.Black workers in the U.S. earn 81 cents on the dollar versus white workers on this basis.
iii.Women in the U.S. earn 83 cents on the dollar versus men on this basis.
iv.United Kingdom and Ireland-based companies are mandated to report median pay.
2.adjusted gaps, a statistical assessment of pay between minorities/non-minorities, women/men, performing similar roles- data we pressed Applied Materials to commit to begin reporting in 2024.
i.What minorities and women are paid versus their direct peers, statistically adjusted for factors such as job, seniority, and geography.
ii.Glassdoor reports there is a 4.9% adjusted gender pay gap in the United States.1
iii.Adjusted pay gaps are often smaller and easier to remedy than median pay gaps.


3.Median pay gap disclosures can improve performance and provide a baseline to investors for measuring progress moving forward.


1.A 2019 study cited in the Harvard Business Review found that wage transparency, in countries that mandate it, narrowed the median wage gap. Refinitive reports companies reporting no gender pay gaps outperformed companies reporting negative pay gaps from 2016-2021, with a 58.16% spread for their FTSE All-World portfolio and a 135.92% spread for their FTSE North American portfolio.
2.Citigroup was the first US company to publish its global gender and US minority median pay gaps in January 2019. It has since shrunk those gaps 3 cents and 2 cents, respectively. Many large companies including Microsoft, Adobe, Visa, and Disney have since adopted the same best practice disclosures for not just U.K., but U.S. and global operations.
3.There are many ways to shrink racial/gender pay gaps at a company – improving diversity, conducting statistically-adjusted pay audits, and advancing women/minorities into higher-paying roles and positions of leadership – but the only benchmark to measure whether the pay gap is actually shrinking from these various levers is to publish the median pay gap itself.


4.Applied Materials is not keeping pace with other companies on racial and gender pay gap disclosures. More companies are disclosing racial and gender median pay gaps, committing to an honest accounting of pay equity that will strengthen their diversity and talent retention. In 2022 and 2023 alone, Amalgamated Bank, Best Buy, BlackRock, Chipotle, Disney, Home Depot, Target, Thermo Fisher, and Visa committed to expanding their pay gap disclosures to include median pay. Applied Materials lags these companies in its pay equity disclosures.


Board Opposition Statement


1. Statistically-adjusted pay numbers and representation data are not a substitute for median pay gap reporting.


The Board contends the median pay disclosure is not a meaningful metric for disclosure. The Company fails to understand the unique value of median pay gaps, arguing this number will not be useful as it “does not accurately demonstrate whether women and racial-minority employees are being paid equitably for similar roles.” While statistically-adjusted numbers measure whether there is equal pay within similar positions, median pay provides insight into how jobs are distributed within the Company across race and gender. Both numbers are critical for a comprehensive pay gap disclosure as they provide transparency into the Company’s overall Diversity, Equity, and Inclusion (DEI) performance.







Relying on statistically-adjusted numbers to improve DEI performance can be a misleading exercise if not complemented with the median pay gap number. While statistically-adjusted pay gaps can be remediated with a handful of pay adjustments within certain employment categories, such actions may not broadly impact employees and the company at-large. Remediating median pay gaps requires hiring, developing, and promoting minorities/women into higher-paying positions across the firm. Therefore, both data points are critical to understand a Company’s DEI and pay equity performance.


Additionally, disclosure of representation data does not replace the need for median pay data. As opposed to representation data, median pay data shows us, quite literally, how companies assign value to their employees through the roles they inhabit and the pay they receive. Further, it provides a digestible data point for investors to compare progress year over year.



2.Median Pay Disclosure will complement Applied Materials’ DEI programs.


Applied Materials describes its DEI programs and goals to justify its obfuscation of median pay data. While these initiatives are important, median pay statistics will complement the company’s efforts and allow Applied Materials to benchmark its progress toward its DEI goals. Applied Materials’ refusal to publish unadjusted pay gap data is reflective of a lack of transparency and accountability to investors and employees.




For all the reasons provided above, we strongly urge you to support the Proposal. Pay transparency has been shown to lead to narrower pay gaps and improved diversity of companies that disclose them, which we believe is in the long-term financial best interest of shareholders.


Please contact Julia Cedarholm at for additional information.







Natasha Lamb

Arjuna Capital


This is not a solicitation of authority to vote your proxy. Please DO NOT send us your proxy card. Arjuna Capital is not able to vote your proxies, nor does this communication contemplate such an event. The proponent urges shareholders to vote for Proxy Item 5 following the instruction provided on the management’s proxy mailing.


The views expressed are those of the authors and Arjuna Capital as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be a forecast of future events or a guarantee of future results. These views may not be relied upon as investment advice. The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. This piece is for informational purposes and should not be construed as a research report.