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  x                             Filed by a Party other than the Registrant  ¨

Check the appropriate box:

Illumina, Inc.

(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):

April     , 2016

Notice of Annual Meeting and Proxy Statement

April     , 2014

The Annual Meeting of Stockholders of Illumina, Inc. will be held on Wednesday, May 28, 2014, at 10:00 a.m. Pacific Time.As we have done for previous meetings, thisThis year’s annual meeting will be a completely virtual meeting of stockholders.

The agenda for this year’s annual meeting includes the following items:

Stockholders as of the record date of April 1, 2014,March 21, 2016, are entitled to notice of and to vote on the matters listed in the Proxy Statement.proxy statement.

By Order of the Board of Directors,

CHARLESCHARLES E. DADSWELLDADSWELL

Senior Vice President, General Counsel and Secretary

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be held on May 28, 2014:18, 2016: The Proxy Statementproxy statement and Annual Reportannual report to Stockholders are available atwww.proxyvote.com.

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This summary highlights information contained elsewhere in this Proxy Statement.proxy statement. This summary does not contain all of the information you should consider. You should read the entire Proxy Statementproxy statement carefully before voting.

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This Proxy Statementproxy statement is furnished in connection with the solicitation of proxies by our Board of Directors for the Annual Meeting of Stockholders. This Proxy Statementproxy statement and accompanying proxy are being mailed to our stockholders on or about April     , 2014,2016, concurrently with the mailing of our 2013 Annual Reportannual report on Form 10-K.10-K for the fiscal year ended January 3, 2016.

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How do I vote and what are   the voting deadlines?		Stockholders of Record. If you are a stockholder of record, there are several ways for you to vote your shares.
				Via the Internet.  You may vote atwww.proxyvote.com, 24 hours a day, seven days a week. You will need the 12-digit control number included on your Notice of Internet Availability of Proxy Materials or your proxy card (if you received a printed copy of the proxy materials). Votes submitted through the Internet must be received by 11:59 p.m., Eastern Time, (Eastern time) on May 27, 2014.17, 2016.
				By Telephone.  You may vote using a touch-tone telephone by calling1-800-690-6903, 24 hours a day, seven days a week. You will need the12-digit control number included on your Notice of Internet Availability of Proxy Materials or your proxy card (if you received a printed copy of the proxy materials). Votes submitted by telephone must be received by 11:59 p.m., Eastern Time, (Eastern time) on May 27, 2014.17, 2016.
				By Mail.  If you received printed proxy materials, you may submit your vote by completing, signing, and dating each proxy card received and returning it in the prepaid envelope. Sign your name exactly as it appears on the proxy card. Proxy cards submitted by mail must be received no later than May 27, 2014,17, 2016, to be voted at the annual meeting.
				DuringtheDuring the Annual MeetingMeeting..  Instructions on how to vote while participating in our annual meeting live via the Internet are posted atwww.virtualshareholdermeeting.com/ilmn2014ilmn2016.
		If you vote via the Internet or by telephone, your electronic vote authorizes the named proxies in the same manner as if you signed, dated, and returned your proxy card.If you vote via the Internet or by telephone, do not return your proxy card.
		Beneficial Owners.Owners. If you are a beneficial owner of your shares, you should have received a Notice of Internet Availability of Proxy Materials or voting instructions from the broker or other nominee holding your shares. You should follow the instructions in the Notice of Internet Availability of Proxy Materials or voting instructions provided by your broker or nominee in order to instruct your broker or other nominee on how to vote your shares. The availability of telephone and Internet voting will depend on the voting process of the broker or nominee. Shares held beneficially may not be voted during our annual meeting.

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General

Our certificate of incorporation and bylaws provide for a classified Board of Directors consisting of three classes of Directors with staggered three-year terms. The Board of Directors currently consists of the following tennine Directors, having terms expiring at the respective annual meetings of stockholders noted below:

Election of Three Directors to Hold Office for Three Years until the 20172019 Annual Meeting of Stockholders

Upon the recommendation of the Nominating/Corporate Governance Committee, the Board of Directors has nominated for election at the annual meeting the following slate of three nominees to hold office for three years until the annual meeting of stockholders in the year 20172019 and until their successors are duly elected and qualified:

Election of One Director to Hold Office for Two Years until the 2016 Annual Meeting of Stockholders

Upon the recommendation of the Nominating/Corporate Governance Committee, the Board of Directors has nominated for election at the annual meeting the following nominee to hold office for two years until the annual meeting of stockholders in the year 2016 and until his successor is duly elected and qualified:

Mr. deSouzaDr. Arnold was appointed to the Board of Directors in January 20142016 to fill a newly created position. In accordance with our Corporate Governance Guidelines, any new Directordirector appointed to fill a newly created position on the Board of Directors will stand for election at the first annual meeting of stockholders following such appointment. In accordance with our certificate of incorporation and bylaws, each director is to be elected for a term expiring at the third succeeding annual meeting of

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stockholders after such election. Accordingly, any new director appointed to fill a newly created position on the Board of Directors is assigned to a particularthe class of Directors and is required tothat will stand for election by our stockholders at the first annual meeting of stockholders following such appointment, whether or not the other members of the class of Directors to which he or she was appointed are otherwise standing for election at such annual meeting. At the time of his appointment,appointment.

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Mr. deSouza was assigned to the same class of Directors composed of Drs. Möller and Walt. Accordingly, Mr. deSouza is standing for election at the annual meeting to hold office for two years until the annual meeting of stockholders in the year 2016 and until his successor is duly elected and qualified.

Additional Information

For more information about each nominee and each of the other Directors serving on our Board of Directors, please see “Information about Directors” in this proxy statement. Each of the Board of Directordirector nominees is currently serving as a Director.director. These nominees have agreed to serve if elected, and management has no reason to believe that such nominees will be unable to serve. In the event any of these nominees is unable or declines to serve as a Directordirector at the time of the annual meeting, the proxies will be voted for any nominees who may be designated by the present Board of Directors to fill the vacancy. The persons designated as proxies on the form of proxy card attached to this proxy statement intend to vote such proxyFOR the election of each of the fourthree nominees named above, unless the stockholder validly indicates otherwise on the proxy that the vote should be withheld from any or all of these nominees.proxy.

Vote Required for Approval

A pluralityOur bylaws require that a director nominee will be elected only if he or she receives a majority of the votes ofcast with respect to his or her election in an uncontested election (that is, the shares present in person or represented by proxy at the annual meeting and entitled to vote on the election of Directors is required for the election of Directors. The four nominees receiving the highest number of affirmativeshares voted “FOR” that nominee exceeds the number of votes cast “AGAINST” that nominee). Each of the shares entitled to vote at the annual meeting will be elected toour director nominees currently serves on the Board of Directors. YouIf a nominee who currently serves as a director is not re-elected, Delaware law provides that the director would continue to serve on the Board as a “holdover director.” Under our Corporate Governance Guidelines, each director submits an advance, contingent, irrevocable resignation that the Board may accept if stockholders do not vote for more individuals thanre-elect that director. In that situation, our Nominating/Corporate Governance Committee would make a recommendation to the number nominated. In addition, stockholders may not cumulate votes inBoard about whether to accept or reject the election of Directors.resignation, or whether to take other action.

Recommendation

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES SET FORTH ABOVE

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The Audit Committee has selected Ernst & Young LLP as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 28, 2014,January 1, 2017, and the Board of Directors has determined that it would be desirable to request that the stockholders ratify such appointment. Before selecting Ernst & Young LLP, the Audit Committee considered the firm’s qualifications as independent registered public accountants and concluded that, based on Ernst & Young LLP’s prior performance and its reputation for integrity and competence, it was qualified. The Audit Committee also considered whether any non-audit services performed for us by Ernst & Young LLP would impair Ernst & Young LLP’s independence and concluded that they did not. Even if the selection is ratified, the Audit Committee, in its sole discretion, may change the appointment at any time during the fiscal year if it determines that such a change would be in our best interests and that of our stockholders.

A representative of Ernst & Young LLP is expected to be present at the annual meeting, will have an opportunity to make a statement if he or she desires to do so, and is expected to be available to respond to appropriate questions.

Fees Paid to Ernst & Young LLP

During the fiscal years ended January 3, 2016, and December 28, 2014, the aggregate fees billed or accrued by Ernst & Young LLP for professional services were as follows:

Audit fees consist of amounts for professional services rendered in connection with the integrated audit of our consolidated financial statements and related schedule and internal control over financial reporting, review of the interim condensed consolidated financial statements included in quarterly reports, and statutory audits required internationally. For the fiscal years ended January 3, 2016, and December 28, 2014, audit-related fees were primarily incurred for accounting consultations. Tax fees for the fiscal years ended January 3, 2016, and December 28, 2014, related to services rendered for the preparation of foreign tax filings. For the fiscal years ended January 3, 2016, and December 28, 2014, Ernst & Young LLP did not perform any professional services other than as stated under the captions Audit Fees, Audit-Related Fees, and Tax Fees.

Pre-Approval Policies and Procedures

The Audit Committee, as required by the Securities Exchange Act of 1934 (the “Exchange Act”), requires advance approval of all audit services and permitted non-audit services to be provided by our

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independent registered public accounting firm. The Audit Committee must approve the permitted service before the independent registered public accounting firm is engaged to perform it. The services listed as Audit Fees, Audit-Related Fees, and Tax Fees in the table above were pre-approved by our Audit Committee in accordance with this policy.

Vote Required for Approval

Stockholder ratification is not required for making such appointmentto appoint Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 28, 2014,January 1, 2017, because the Audit Committee has responsibility for the appointment of our independent registered public accounting firm. The appointmentNevertheless, our Board of Directors is being submitted for ratificationsubmitting this matter to stockholders in conformance with a view toward soliciting the opinion of stockholders, which opinion will be taken into consideration in future deliberations.good corporate governance practices. No determination has been made as to what action the Board of Directors or the Audit Committee would take if stockholders do not approve the appointment of Ernst & Young LLP. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent audit firm at any time during the year if it is determined that such a change would be in the best interests of the Company and its stockholders. Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm requires the affirmative “FOR” vote of a majority of the shares present in person or represented by proxy and entitled to vote on the proposal.

Recommendation

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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As required by Section 14A of the Securities Exchange Act, of 1934, we are seeking an advisory vote to approve the compensation of the named executive officers as disclosed in the section of this proxy statement titled “Executive Compensation.” Following the 2011 annual meeting of stockholders, and consistent with results of the advisory vote on executive compensation taken by our stockholders at that meeting, the Board of Directors adopted a policy to submit this advisory vote to the stockholders on an annual basis. Accordingly, stockholders are being asked to vote on the following advisory resolution:

RESOLVED, that the compensation paid to Illumina’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion, is hereby APPROVED.

We urge stockholders to read the “Compensation Discussion and Analysis” beginning on page 39 of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensationHR and talent objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, appearing on pages 5458 through 57,61, which provide detailed information on the compensation of our named executive officers. The Board of Directors and the Compensation Committee believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our named executive officers reported in this proxy statement has contributed to our recent and long-term success.

Vote Required for Approval

The advisory resolution set forth above, commonly referred to as a “say-on-pay” resolution, is not binding on the Board of Directors. Although not binding, the Board of Directors and the Compensation Committee will review and consider the voting results when making future decisions regarding executive compensation. Approval of the advisory resolution set forth above requires the affirmative “FOR” vote of a majority of the shares present in person or represented by proxy and entitled to vote on the proposal.

Recommendation

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE FOREGOING RESOLUTION TO APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION OF ILLUMINA’S NAMED EXECUTIVE OFFICERS

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Our Board of Directors is recommending to the stockholders for their approval a proposal to amend our Bylaws to designate Delaware as the exclusive forum for the adjudication of certain disputes. This proposed bylaw would provide as follows:

FORUM FOR ADJUDICATION OF DISPUTES

Unless the Board of Directors of the corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another state court located within the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware) shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the corporation; (ii) any action asserting a claim for breach of a fiduciary duty owed by any director, officer, employee or agent of the corporation to the corporation or the corporation’s stockholders; (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, the certificate of incorporation of the corporation or these bylaws (as any such may be amended from time to time); or (iv) any action asserting a claim governed by the internal affairs doctrine, in each case subject to said court having personal jurisdiction over the indispensable parties named as defendants therein.

The proposed bylaw is intended to assist the Company in avoiding multiple lawsuits in multiple jurisdictions on matters relating to the corporate law of Delaware, our state of incorporation. The proposed bylaw will only regulate the forum where our stockholders may file claims relating to the specified intra-corporate disputes. The proposed bylaw does not restrict the ability of our stockholders to bring such claims, nor the remedies available if such claims are ultimately successful.

Although the Board of Directors believes that the designation of the Delaware Court of Chancery as the exclusive forum for intra-corporate disputes serves the best interests of the Company and our stockholders as a whole, the Board of Directors also believes that we should retain the ability to consent to an alternative forum on a case-by-case basis. Specifically, where the Board of Directors determines that the Company’s interests and those of our stockholders are best served by permitting a dispute to proceed in a forum other than the Delaware Court of Chancery, the proposed bylaw permits the corporation to consent to the selection of such alternative forum.

The Board of Directors believes that our stockholders will benefit from having intra-corporate disputes litigated in the Delaware Court of Chancery. Although some plaintiffs might prefer to litigate such matters in a forum outside of Delaware because they perceive another court as more convenient or more favorable to their claims (among other reasons), the Board of Directors believes that the substantial benefits to us and our stockholders as a whole from designating the Delaware Court of Chancery as the exclusive forum for intra-corporate disputes outweigh these concerns. The Delaware Court of Chancery is widely regarded as the preeminent court for the determination of disputes

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involvingProposal 4: Advisory Vote to Ratify Certain Supermajority Voting Provisions in our Certificate of Incorporation and Bylaws

Introduction

The Board of Directors is seeking stockholder ratification of the retention of certain provisions of the Company’s certificate of incorporation and bylaws that require a corporation’s internal affairsvote of 66 2/3% of the Company’s outstanding stock in termsorder to take certain actions (the “Supermajority Provisions”). The following is a summary of precedent, experience and focus. the Supermajority Provisions:

The Court’s considerable expertise has ledBoard of Directors is submitting these provisions to the developmentstockholders for ratification at the annual meeting.

Purpose of the Supermajority Provisions

Require Broad Stockholder Support for Key Actions

The existing requirements are sound corporate governance principles as they require that any significant changes on the topics listed above are made with broad stockholder support. With respect to the most fundamental aspects of the Company, these requirements ensure stockholders are not subject to the whims of a substantialfew large stockholders. Indeed, by requiring the support of a supermajority

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in order to take these actions, we ensure that changes to our corporate structure truly reflect the stockholders as a group.

This prudent approach to stockholder votes on significant corporate changes is common – many publicly-traded companies also require supermajority votes to take crucial actions.

Protect Minority Stockholders

Simple majority votes allow relatively few, large stockholders to dominate more numerous but smaller stockholders. Those large stockholders could act either unwisely or in outright self-interest if they go unchecked by higher vote requirements. Supermajority requirements demand consensus across many stockholders and influential bodyprotect small stockholders from being overwhelmed by large stockholders.

Furthermore, our bylaws require only that the holders of case law interpreting Delaware’sa majority of stock be present at a meeting in order to transact the business of the Company — without these provisions, a simple majority ofthat majority (i.e., 25.1% of all outstanding shares) could impose radical changes on our corporate law. This provides usstructure and our stockholders with more predictability regarding the outcome of intra-corporate disputes. In addition, the Delaware Court of Chancery has developed streamlined procedures and processes that help provide relatively quick decisions for litigating parties. This accelerated schedule can limit the time, cost, and uncertainty of litigation for all parties.functionality.

The selectionBoard of Directors has a fiduciary duty to pursue the Delaware Courtbest interests of Chancery as the exclusive forumall stockholders. By reserving certain fundamental functions for intra-corporate disputes would reduce the risks that we could be forced to waste resources defending against duplicative suits and that the outcomesupermajority votes, these provisions insulate us from self-interested or misguided votes by a minority of cases in multiple jurisdictions could be inconsistent, even though each forum purports to follow Delaware law. We experienced firsthand the inefficiencies involved in duplicative litigation across multiple jurisdictions during the tender offer by Roche for our outstanding common stock in 2012. Following the announcementstockholders holding a majority of the tender offer, lawsuits were filed in three jurisdictions, in addition to in the Delaware Court of Chancery, all relating to similar facts and claims. Had these lawsuits not been dismissed shortly after Roche terminated its tender offer, the simultaneous defense of these actions would have not only been expensive, but also would have required a significant amount of management time and attention. Accordingly,shares present.

Promote Long-Term Corporate Management

Robust vote requirements enable stockholders, the Board of Directors, recommendsand third parties to make long-term plans and investments in the Company. Although changes to these provisions may be appropriate over time, by requiring a supermajority to make changes we ensure that such changes will not be sudden, nor will they be quickly reversed. Although this permanence is not necessary for all aspects of our structure and governance, it is beneficial and appropriate for these elements.

Limited Scope

The Board of Directors recognizes that a simple majority vote is appropriate for many stockholder actions. We do not require more than a simple majority unless it is appropriate and necessary to protect the interests of small stockholders. By requiring a supermajority vote only in these limited circumstances, we can empower stockholders approveto take many actions by a simple majority while ensuring that changes to certain sensitive provisions occur if and only if there is a broad consensus among stockholders that such changes are beneficial. The existing provisions allow stockholders the proposed exclusive forum bylaw set forth above.power to make changes to our governing documents without concentrating that power in the hands of only the largest stockholders.

The Board of Directors regularly considers corporate governance developments and best practices, and discusses whether any changes are appropriate.

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Vote Required for Approval

Stockholder approval is not required for Board of Directors to amend our bylaws; however, the Board of Directors believes that stockholder support of the proposed bylaw is important. Approval of the bylaw amendmentadvisory resolution set forth above requires the affirmative “FOR” vote of a majority of the shares present in person or represented by proxy and entitled to vote on the proposal. Although not binding, the Board of Directors will review and consider the voting results when making future decisions regarding our corporate governance practices, including with respect to our certificate of incorporation and bylaws.

Recommendation

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE FOREGOING RESOLUTION TO APPROVE AN AMENDMENT TORATIFICATION OF THE SUPERMAJORITY VOTING PROVISIONS IN OUR BYLAWS ESTABLISHING DELAWARE AS THE EXCLUSIVE FORUM FOR ADJUDICATIONCERTIFICATE OF CERTAIN DISPUTES

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The following table sets forth the names, ages, committee assignments, and positions of our Directors as of April     , 2014.2016. Our Directors’ respective backgrounds and a discussion of the specific experience, qualifications, attributes, or skills of our Directors that led the Board of Directors to conclude that each such person should serve as Directora director are described following the table.

Name

Age

Position with the Company

Audit Committee

Compensation Committee

Nominating/ Corporate Governance Committee

Diagnostics Advisory Committee

Age

Position with the Company

Audit Committee

Compensation Committee

Nominating/ Corporate Governance Committee

William H. Rastetter, Ph.D.

65

Chairman

Jay T. Flatley

61

CEO

Jay T. Flatley(1)

63

Chairman and CEO

A. Blaine Bowman

69

Lead Independent Director

Francis A. deSouza

43

President

45

President

A. Blaine Bowman

67

Director

Frances Arnold, Ph.D.

59

Director

Daniel M. Bradbury

52

Director

54

Director

Karin Eastham, CPA

64

Director

66

Director

Robert S. Epstein, M.D.

58

Director

60

Director

Gerald Möller, Ph.D.

70

Director

David R. Walt, Ph.D.

61

Director

David R. Walt, Ph.D.(2)

63

Director

Roy A. Whitfield

60

Director

62

Director

Number of Meetings in 2013

8

6

6

4

Number of Meetings in 2015

11

7

4

   Chair       Member       Audit Committee Financial Expert (for purposes of Section 407 of Sarbanes-Oxley Act)

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Board of Directors

Our business is managed under the direction of the Board of Directors. Our certificate of incorporation and bylaws provide for a classified Board of Directors consisting of three classes of Directors with staggered three-year terms. The Board has determined that a majority of the members of the Board, specifically Dr. Arnold, Mr. Bradbury, Mr. Bowman, Ms. Eastham, Dr. Epstein, Dr. Möller, Dr. Rastetter, Dr. Walt, and Mr. Whitfield, are independent Directors under the rules of The NASDAQ Global Select Market.

The Board of Directors intends to hold executive sessions of the non-management Directors following each regularly scheduled in-person meeting of the Board of Directors. Executive sessions do not include any employee Directors of the Company. At its meetings during the fiscal year ended December 29, 2013January 3, 2016 (“fiscal 2013”2015”), the Board of Directors regularly met in executive sessions of non-employee Directors.

The Board of Directors has adopted Corporate Governance Guidelines outlining its duties. These guidelines can be viewed on our website atwww.illumina.com by clicking on “Company,” then “Investor Relations,” and then onunder “Corporate Governance.” The Board of Directors meets regularly to review significant developments affecting the Company and to act on matters requiring Board of Directors’ approval. The Board of Directors held 10eight formal meetings during fiscal 2013 and acted two times by written consent.2015. Board members are requested to make attendance at Board and Board committee meetings a priority, to come to meetings prepared, having read any materials provided to the Board of Directors prior to the meeting, and to participate actively in the meetings.

Attendance at Meetings

During fiscal 2013,2015, each Directordirector attended, in person or by telephone, at least 75% of the total number of meetings of both the Board of Directors and Board committees on which such Directordirector served during the period. Board members are invited to attend our annual meetings of stockholders, but they are not required to do so. We reimburse the travel expenses of any Directordirector who travels to attend the annual meetings. SixTwo members of the Board of Directors attended our 20132015 annual meeting of stockholders.

Corporate Governance

The Board of Directors and our management believe that good corporate governance is an important component in enhancing investor confidence in the Company and increasing stockholder value. The imperative to continue to develop and implement best practices throughout our corporate governance structure is fundamental to our strategy to enhance performance by creating an environment that increases operational efficiency and ensures long-term productivity and growth. Sound corporate governance practices also ensure alignment with stockholder interests by promoting fairness, transparency, and accountability in business activities among employees, management, and the Board of Directors.

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We maintain a corporate governance page on our website that includes key information about our corporate governance initiatives, including our Corporate Governance Guidelines, Code of Ethics, and charters for each of the committees of the Board of Directors, including the Audit Committee, the Compensation Committee, and the Nominating/Corporate Governance Committee, and the Diagnostics Advisory Committee. The corporate governance page can be found on our website atwww.illumina.com by clicking on “Company,” then “Investor Relations,” and then onunder “Corporate Governance.”

Board Leadership Structure

We separate the positionsCurrently, our Board leadership structure consists of Chief Executive Officera Lead Independent Director, a Chairman (who is also our CEO), and Chairman of the Board in recognition of the differences between the two roles. Our Chief Executive Officer is responsiblestrong committee chairs. This structure allows one person to speak for setting the strategic direction forand lead both the Company and its day-to-daythe Board, while also providing for effective independent board oversight through an independent lead director. At a Company growing as rapidly as Illumina and serving increasingly diverse markets, we believe the CEO is in the best position to focus the independent directors’ attention on the issues of greatest importance to the Company and our stockholders. We also believe that our structure provides independent Board leadership and performance,engagement while providing the Chairmanbenefit of having our CEO, the Board provides guidance toindividual with primary responsibility for managing the Chief Executive Officer, reviews the schedules and agendas forCompany’s day-to-day operations, chair regular Board meetings as key business and presides over meetings of the full Board. The Board of Directors believes that this leadership structure is best for the Company at the current time, as it appropriately balances the need for the Chief Executive Officer to run the Company on a day-to-day basis with significant involvement and authority vested in an outside independent board member. In addition, the Board of Directors believes that therestrategic issues are advantages to having an independent Chairman for matters such as communications and relations between the Board, the Chief Executive Officer, and other members of senior management; in assisting the Board in reaching consensus on particular strategies and policies; and in facilitating robust Director, Board, and Chief Executive Officer evaluation processes. Under our Corporate Governance Guidelines, our independent Chairman is responsible for:

In performing the duties described above, our independent Chairman is expected to consult with the Chairs of the appropriate Board committees and solicit their participation in order to avoid diluting the authority and responsibilities of such Committee Chairs.discussed.

Board’s Role in Risk Oversight

Risk Oversight Generally

The Board of Directors is responsible for overseeing our risk management. To assist its oversight function, the Board has delegated many risk oversight functions to the Audit Committee. Under its charter, the Audit Committee is responsible for providing advice to the Board with respect to our risk evaluation and mitigation processes, including, in particular, the processes utilized by management for identifying, evaluating, and mitigating strategic, financial, operational, regulatory, and external

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risks inherent in our business. The Audit Committee also oversees our internal audit function. In addition to the Audit Committee’s work in overseeing risk management, our full Board regularly engages in discussions of the most significant risks that we face and how these risks are being managed, and the Board receives reports on risk management from our senior officers and outside consultants engaged to provide an enterprise-level review of the risks facing the Company.

Our senior executives provide the Board of Directors and its committees with regular updates about our strategies and objectives and the risks inherent within them at Board and committee meetings and in regular reports. Board and committee meetings also provide a venue for Directors to discuss issues of concern with management. The Board of Directors and committees call special meetings when necessary to address specific issues or matters that should be addressed before the next regularly scheduled meeting. In addition, our Directors have access to our management at all levels to discuss any matters of interest, including those related to risk. Those members of management most knowledgeable about the applicable issues attend Board meetings to provide additional insight into items being discussed, including exposures and mitigation strategies with respect to various risks. In addition, the Company’s General Counsel and the Company’s Chief Financial Officer report directly to our Chief Executive Officer, providing him with visibility to our risk profile. The Board of Directors believes that the work undertaken by the Audit Committee, together with the work of the full Board and the Chief Executive Officer,CEO, enables the Board to effectively oversee our risk management function.

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Compensation Programs

The Compensation Committee, together with senior management, reviews compensation programs and benefits plans affecting employees generally (in addition to those applicable to our executive officers), and we have concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. We also believe that our incentive compensation arrangements provide incentives that do not encourage risk-taking beyond our ability to effectively identify and manage significant risks; are compatible with effective internal controls and our risk management practices; and are supported by the oversight and administration of the Compensation Committee with regard to executive compensation programs.

Committees of the Board of Directors

The Board of Directors has fourthree standing committees to facilitate and assist the Board in the execution of its responsibilities. These committees are currently the Audit Committee, the Compensation Committee, and the Nominating/Corporate Governance Committee, and the Diagnostics Advisory Committee. In accordance with The NASDAQ Global Select Market listing standards, allAll of the committees are composed solely of non-employee, independent Directors. Charters for each committee are available on our website atwww.illumina.com by first clicking on “Company,under “Committee Composition.” then “Investor Relations,” and then on “Corporate Governance.” The charter of each committee is also available in print to any stockholder who requests it.

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Audit Committee

The Audit Committee represents and assists the Board by providing oversight of the Company’s accounting and financial reporting processes and audits of its financial statements on behalf of the Board of Directors and provides advice with respect to the Company’s risk evaluation and mitigation processes. The Audit Committee’s duties and responsibilities under its charter include monitoring and advising the Board on:

The Board of Directors has unanimously determined that all Audit Committee members are financially literate under current NASDAQ listing standards, and at least one member has financial sophistication under NASDAQ listing standards. In addition, the Board of Directors has unanimously determined that all Audit Committee members qualify as an “audit committee financial expert” under SEC rules and regulations. Designation as an “audit committee financial expert” is an SEC disclosure requirement and does not impose any additional duties, obligations, or liability on any person so designated.

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Compensation Committee

The primary function of the Compensation Committee is to discharge the Board’s duties and responsibilities relating to compensation of our non-employee Directors and executive officers, and oversee the design and management of our equity and other compensation plans. The Compensation Committee’s duties and responsibilities under its charter with respect to the compensation of our Directors and executive officers include:

The Compensation Committee’s primary goal under its charter is to align closely the interests of our executive officers with those of our stockholders by its efforts to:

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The Chief Executive OfficerCEO may not participate in or be present during any deliberations or determinations of the Compensation Committee regarding his compensation or individual compensation objectives.

Mr. Flatley, our Chief Executive Officer,The CEO has been delegated limited authority to grant stock options and restricted stock units to any employee who has a title of or below the rank of “Vice President,” who is not designated as a “Section 16 Officer,” and who does not report directly to him. Mr. FlatleyThe CEO may exercise this authority without any further action required by the Compensation Committee; however, the Compensation Committee approves grant ranges based on employee job levels to guide Mr. Flatleythe CEO in the exercise of his authority and sets a maximum number of sharesindividual award values that may be granted under this authority. The purpose of this delegation of authority is to enhance the flexibility of equity administration and to facilitate the timely grant of equity awards to non-management employees, particularly new employees, within the specified limits approved by the Compensation Committee. At least annually, Mr. Flatleythe Compensation Committee reviews this authority and grant guidelines to ensure alignment with market and good governance practices. The CEO reports at least annually to the Compensation Committee on his exercise of this delegated authority duringauthority. In addition, the preceding 12 months.Compensation Committee reviews our equity award usage forecast on a quarterly basis as part of its administration duties within our stockholder-approved 2015 Stock and Incentive Plan.

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Nominating/Corporate Governance Committee

The Nominating/Corporate Governance Committee is responsible for overseeing matters of corporate governance, including the evaluation of the performance and practices of the Board of Directors. In particular, the Nominating/Corporate Governance Committee’s duties and responsibilities under its charter include:

Diagnostics Advisory Committee

The purpose of the Diagnostics Advisory Committee isBoard of the Company;

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Compensation Committee Interlocks and Insider Participation

Our executive compensation program has been administered byNo member of the Compensation Committee of our Board of Directors. None of the members of the Compensation Committeeis, or ever has been, an officer or employee of ours. Nonethe Company. Furthermore, during fiscal 2015, none of our current executive officers has ever served as a member of a board of directors or compensation committee (or other board committee performing equivalent functions) of any otheranother entity that has or has had one or morewhere an executive officers servingofficer of such entity served as a member of our Board of Directors or Compensation Committee during fiscal 2013.Committee.

Code of Ethics

We have adopted a code of ethics that applies to all of our Directors, officers, and employees, including our principal executive officer and principal financial officer. This code of ethics is reviewed by the Nominating/Corporate Governance Committee of our Board of Directors on an annual basis and modified as deemed necessary. Our code of ethics is available for download from our website,www.illumina.com, by first clicking on “Company,” then “Investor Relations,” and then on under “Corporate Governance.” A copy of the Code of Ethics may also be obtained free of charge, from us upon a request directed to Illumina, Inc., 5200 Illumina Way, San Diego, California 92122, Attention: Investor Relations. We will disclose within four business days any substantive changes in or waivers of the Code of Ethics granted to our principal executive officer, principal financial officer, principal accounting officer, or controller, or persons performing similar functions, by posting such information on our website as set forth above rather than by filing a Form 8-K with the SEC.

Criteria for Board Membership

The Board of Directors has delegated to the Nominating/Corporate Governance Committee the responsibility for reviewing and recommending to the Board nominees for Director.Board membership. In accordance with our Corporate Governance Guidelines, the Nominating/Corporate Governance Committee, in evaluating Board candidates, considers factors such as depth and breadth of

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experience, wisdom, integrity, ability to make independent analytical inquiries, understanding of our business environment, and willingness to devote adequate time to Board duties, all in the context of an assessment of the needs of the Board at the time. The Nominating/Corporate Governance Committee seeks to ensure that at least a majority of Directors are independent under the rules of The NASDAQ Global Select Market, that members of our Audit Committee meet the financial literacy and sophistication requirements under the rules of The NASDAQ Global Select Market, and at least one of them qualifies as an “audit committee financial expert” under the rules of the SEC.

The Nominating/Corporate Governance Committee’s objective is to maintain a board of individuals of the highest personal character, integrity, and ethical standards, and that reflects a range of professional backgrounds and skills relevant to our business. For each of the nominees to the Board, the biographies shown above highlight the experiences and qualifications that were viewed as being among the most important by the Nominating/Corporate Governance Committee in concluding that

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the nominee should serve as a Directordirector of the Company. The Nominating/Corporate Governance Committee considers diversity as one of many, but not dispositive, factors in identifying nominees for Director,director, including personal characteristics such as race and gender, as well as diversity in the experience and skills that contribute to the Board’s performance of its responsibilities in the oversight of a complex and highly-competitive global business. The Nominating/Corporate Governance Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees.

Process for Identifying and Evaluating Nominees

The Nominating/Corporate Governance Committee believes we are well-served by our current Directors. In the ordinary course, absent special circumstances or a material change in the criteria for Board membership, the Nominating/Corporate Governance Committee will re-nominate incumbent Directors who continue to be qualified for Board service and are willing to continue as Directors. If an incumbent Directordirector is not standing for re-election, or if a vacancy on the Board occurs between annual stockholder meetings, the Nominating/Corporate Governance Committee will seek out potential candidates for Board appointment who meet the criteria for selection as a nominee and have the specific qualities or skills being sought. In addition, from time to time the Board may seek to expand its ranks to bring in new Board members with special skills and/or experience relevant and useful to us at our particular stage of development. Director candidates will be selected based on input from members of our Board of Directors, our senior management, and, if the Nominating/Corporate Governance Committee deems appropriate, a third-party search firm. The Nominating/Corporate Governance Committee will evaluate each candidate’s qualifications and check relevant references; in addition, such candidates will be interviewed by at least one member of the Nominating/Corporate Governance Committee. Candidates meriting serious consideration will meet with all members of the Board of Directors. Based on this input, the Nominating/Corporate Governance Committee will evaluate which of the prospective candidates is qualified to serve as a Directordirector and whether the committee should recommend to the Board that this candidate be appointed to fill a current vacancy on the Board or presented for the approval of the stockholders, as appropriate.

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Stockholder Nominees

The Nominating/Corporate Governance Committee will consider written proposals from stockholders for nominees for Directordirector under the same criteria described above but, based on those criteria, may not necessarily recommend those nominees to the Board of Directors. Any such nominations should be submitted to the Nominating/Corporate Governance Committee, via the attention of our Secretary, and should include the following information:

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Nominations should be submitted in the timeframe described in our bylaws and under the caption “Stockholder Proposals for our 20152017 Annual Meeting” below.

From time to time, we have retained and may in the future retain the services of an independent third-party search firm to assist the Nominating/Corporate Governance Committee in identifying and evaluating potential candidates.

All interested parties who wish to communicate with the Board of Directors or any of the non-management Directors may do so by sending a letter to the Corporate Secretary, Illumina, Inc., 5200 Illumina Way, San Diego, California 92122, and should specify the intended recipient or recipients. All such communications will be forwarded to the appropriate Directordirector or Directorsdirectors for review, except for spam, junk mail, mass mailings, product complaints or inquiries, job inquiries, surveys, business solicitations or advertisements, or patently offensive or otherwise inappropriate material.

In addition, you may send, in an envelope marked “Confidential,” a written communication to the Chair of the Audit Committee, via the attention of our Corporate Secretary, at Illumina, Inc., 5200 Illumina Way, San Diego, California 92122. All such envelopes will be delivered unopened to the Chair of our Audit Committee.

The Board of Directors, acting on the recommendation of the Compensation Committee, has adopted stock ownership guidelines that are applicable to each of our non-employee Directors, each of our executive officers who is subject to the restrictions of Section 16 of the Securities Exchange Act, of 1934, and each of our officers having a title of “Senior Vice President” or above. Under the ownership guidelines each individual subject to the guidelines is expected to own and hold shares of our common stock having an aggregate value at least equal to:

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Under the ownership guidelines, each individual subject to the guidelines is required to achieve compliance with the applicable ownership levels set forth above within three years from the date such individual Directordirector or officer first became subject to the guidelines, which is typically from the latereither as a result of when such individual joined the Companya new hire or March 8, 2010 (the effective date of the ownership guidelines).promotion.

Unvested shares of restricted stock, unvested restricted stock units (“RSUs”), unvested performance stock units (“PSUs”), and unvested stock options do not count towards satisfaction of the ownership guidelines. Because we do not count such unvested awards, even if such awards are time-vesting-only, we believe that our ownership policy is more robust than ownership policies adopted by other companies that may have higher ownership thresholds but count unvested awards if the passage of time is the only vesting requirement.

During such time as a covered officer or Directordirector is not in compliance with his or her applicable ownership guidelines, such officer or Director:director:

Our Directors play a critical role in guiding our strategic direction and overseeing the management of the Company. Ongoing developments in corporate governance and financial reporting have resulted in an increased demand for such highly qualified and productive public company directors. The many responsibilities and risks and the substantial time commitment of being a director of a public

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company require that we provide adequate incentives for our Directors’ continued performance by paying compensation commensurate with our Directors’ workload. Our non-employee Directors are compensated based upon their respective levels of Board participation and responsibilities, including service on Board committees. Directors who are our employees, such as Messrs. Flatley and deSouza, receive no separate compensation for their services as Directors.

Our Directordirector compensation is overseen by the Compensation Committee of our Board of Directors, which makes recommendations to the Board of Directors on the appropriate amount and structure of our programs in light of then-current competitive practice. The Compensation Committee typically receives advice and recommendations from an independent compensation consultant with respect to its determination on Directordirector compensation matters.

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We use a combination of cash and stock-based compensation to attract and retain qualified candidates to serve on the Board of Directors.

Cash Compensation

Annual Retainer

During fiscal 2013,2015, each of our non-employee Directors was eligible to receive an annual cash retainer of $50,000,$55,000, and the Chairman of the Board, if not an employee of the Company, was eligible to receive an additional $50,000 (increased from $20,000 effective immediately following the 2013 annual meeting of stockholders on May 29, 2013). The Board of Directors approved this increase, in part, because the Board determined that effective immediately following the 2013 annual meeting of stockholders the Chairman would be limited to serving on no more than one Board committee of the Chairman’s choosing and as a non-voting, ex officio member of all other Board committees. The Board of Directors has determined not to make any changes to the amount of the annual retainers for the fiscal year ending on December 28, 2014.$50,000.

Committee Fees

In addition, during fiscal 20132015 each of our non-employee Directors serving on one or more Board committees was eligible to receive the applicable fees set forth below.

The Board of Directors has determined not to make any changes to the foregoing applicable fees for the fiscal year ending on December 28, 2014.

Stock in Lieu of Cash Compensation

Non-employee Directors may elect to receive shares of our common stock in lieu of all, but not less than all, cash retainers and Board committee fees (discussed above) otherwise payable by the Company to such Directordirector in a given calendar year. Shares issued to an eligible Directordirector electing to receive cash compensation in the form of shares will not be subject to vesting or forfeiture restrictions and will be issued on a quarterly basis. The number of shares issued to an eligible Directordirector electing to receive shares in lieu of cash will equal the amount of cash compensation otherwise payable by the Company to such Directordirector for the immediately preceding calendar quarter, divided by the weighted average closing price of our common stock during the immediately preceding calendar quarter (calculated by reference to each trading day during such quarter). No fractional shares will be issued, and in lieu of fractional shares, the Company will pay to such electing Directordirector an amount of cash equal to any such fractional share multiplied by the weighted average closing price of our common stock during the immediately preceding calendar quarter (calculated by reference to each trading day during such quarter).

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Equity Compensation

Annual Awards

In connection with our 2013 annual meeting of stockholders, each of our non-employee Directors received a stock option grant of 7,600 shares and an award of 2,500 RSUs, in each case granted under our Amended and Restated 2005 Stock and Incentive Plan. Each stock option grant has an exercise price equal to the fair market value of our common stock on the grant date, May 29, 2013, which was the date of our 2013 annual meeting of stockholders. Both the stock options and the RSUs vest on the earlier of (i) the one year anniversary of the grant date of the option or award and (ii) the date immediately preceding the date of the annual meeting of our stockholders for the year following the year of grant of the option or award.

In January 2014, the Board of Directors, acting on the recommendation of the Compensation Committee, determined to adopt a value-based approach to awarding annual equity grants pursuant to which the number of shares to be granted will be determined by reference to a target value divided by the closing price of our common stock on the date of grant. For the fiscal year ending on December 28, 2014, each of our non-employee Directors will beis eligible to receive a RSUrestricted stock unit (RSU) award having an award value of $400,000 (as determined based on the fair market value of the Company’s common stock on the date of grant), which award is to be made automatically on the date of the 2014such annual meeting of stockholders. Such annual RSU awards will vest on the earlier of the first anniversary of the grant date or the day prior to the annual meeting of stockholders immediately following the annual meeting at which the award is granted, in both cases subject to continued service as a board member through the vesting date.date

Accordingly, in connection with our 2015 annual meeting of stockholders, on May 27, 2015, each of our non-employee Directors who were serving at the time of the 2015 annual meeting received an award of 1,910 RSUs (having an award value of $400,088 based on the closing price of our common stock on May 27, 2015, of $209.47). The RSUs will vest on the earlier of (i) the one year anniversary of the grant date of the award and (ii) the date immediately preceding the date of the 2016 annual meeting of stockholders.

Awards Upon First Joining the Board of Directors

In January 2014, the Board of Directors, acting on the recommendation of the Compensation Committee, determined that for theDuring fiscal year ending on December 29, 2013,2015 each non-employee director upon first joining the Board, of Directors, each non-employee Director iswhether through election by our stockholders or appointment by our Board to fill a vacancy, was eligible to receive a one-time RSU award having an award value of $1,070,000 (as determined based on the fair market value of the Company’s common stock on the date of grant), which will become effective on the date on which such person becomes a non-employee Director, whether through election by our stockholders or appointment by our Board of Directors to fill a vacancy.. An employee Directordirector who ceases to be an employee but remains a Directordirector will not receive this initial RSU award. Such initial RSU award will vest over a four-year period, with 25% of the RSU vesting on each of the first four anniversaries of the grant.

In January 2016, the Board of Directors, acting on the recommendation of the Compensation Committee, determined that each non-employee director upon first joining the Board after January 28, 2016, whether through election by our stockholders or appointment by our Board to fill a vacancy, would be eligible to receive a one-time RSU award having an award value of two times the annual RSU award (currently $800,000 based on an annual award value of $400,000), as determined based on the fair market value of the Company’s common stock on the date of grant.

Additional Benefits

Directors who receive RSUs are given the opportunity, at the time they execute award agreements providing for the RSU grant, to elect to receive, at the time the RSU vests, a portion of the award in cash rather than in shares in order to enable the Directordirector to satisfy his or her obligation to pay the federal income tax that becomes due at the time of such vesting.

In addition to the cash and equity compensation described above, we reimburse our non-employee Directors for their expenses incurred in connection with attending Board and committee meetings. We do not provide Directors with additional compensation for attending Board or committee meetings.

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Non-Employee Director Compensation

The following table summarizes the total compensation paid by the Company to theour non-employee Directors for the fiscal 2013.2015.

The following table shows the total number of unvested RSUs and total stock options held by each of our non-employee Directors as of December 29, 2013:January 3, 2016:

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The following table sets forth the number of shares of our common stock beneficially owned by each of our Directorsdirectors and Directordirector nominees and each executive officer named in the Summary Compensation Table (the “named executive officers”), and by all of our Directors, Directordirectors, director nominees, and executive officers as a group.

The information set forth below is as of February 28, 2014,2016, and is based upon information supplied or confirmed by the named individuals. The address of each person named in the table below is c/o Illumina, Inc., 5200 Illumina Way, San Diego, California 92122.

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As of February 28, 2014,2016, the following are the only persons known to us to be the beneficial owner of more than five percent of our common stock:

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of the our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Executive officers, directors, and greater than 10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms that they file.

To the our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended January 3, 2016, all Section 16(a) filing requirements applicable to our executive officers, directors, and greater than 10% beneficial owners were complied with, except the following:

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The following table sets forth the names, ages, positions, and business experience during the past five years of our executive officers as of April 1, 2014:February 28, 2016:

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The Compensation Committee of the Board of Directors determines the compensation for our executive officers. The Compensation Committee considers, adopts, reviews, and revises executive officer compensation plans, programs, and guidelines, and reviews and determines all components of each executive officer’s compensation. Compensation programs, and the compensation components, for the Chief Executive OfficerCEO are, additionally, subject to approval by the Board of Directors. The Compensation Committee also consults with management and Illumina’s employee compensation and benefits group regarding both executive and non-executive employee compensation plans and programs, including administering our equity incentive plans.

This section of the proxy statement explains how our executive compensation programs are designed and operate with respect to Illumina’s “named executive officers,” who are the CEO, CFO, and the three other most highly compensated executive officers in a particular year. For fiscal 2013,2015, our named executive officers are:

Recent “Say-on-Pay” Vote

In May 2013,2015, we held a stockholder advisory vote to approve the compensation of our named executive officers, commonly referred to as a “say-on-pay” vote. We received favorable consideration, with over 82%96% of stockholder votes cast approving the proposal. As a result, the Compensation Committee decided to retain our general approach in the 20142015 fiscal year. The Compensation Committee will consider the outcome of the annual say-on-pay votes when making future compensation decisions.

Compensation Philosophy and Objectives

Our executive compensation and benefit programs aim to encourage our executive officers to continually pursue strategic opportunities, while effectively managing our day-to-day operations. Specifically, we have created a compensation package that combines short- and long-term components (cash and equity, respectively) at the levels we believe are most appropriate to motivate and reward our executive officers. The Compensation Committee and our management believe that the proportion of at-risk, performance-based compensation should rise as an employee’s level of responsibility increases.

Our executive compensation program is designed to achieve four primary objectives:

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Use of Market Data and Benchmarking

We strive to set executive compensation at competitive levels. This involves, among other things, establishing compensation levels that are generally consistent with levels at other companies with which we compete for talent.

During fiscal 2013,2015, the Compensation Committee retained an independent compensation consultant from Radford, an Aon Hewitt Company, as the Compensation Committee’s advisor reporting directly to the Chairperson. After considering all of the factors required by applicable NASDAQ rules, the Compensation Committee is satisfied with Radford’s independence.has concluded that no conflict of interest exists that would prevent Radford from serving as an independent consultant to the Compensation Committee. The Compensation Committee maintains sole authority to retain and determine the work to be performed by Radford. DuringWith respect to fiscal 2013,2015 compensation, the Compensation Committee directed Radford to conduct a comprehensive formal review and analysis of our executive compensation and incentive programs relative to competitive benchmarks. This review consisted of a benchmarking analysis of our executive compensation philosophy and practices against prevailing market practices of identified peer group companies and broader industry trends. The analysis included the review of the total direct compensation (inclusive of salary, cash bonuses,incentives, and equity awards) of our executive officers. It was based on an assessment of market trends covering available public information in addition to proprietary data provided by Radford. The

As our product and industry roadmap evolves and diversifies, we compete increasingly with technology sector companies for talent with the experience of integrating hardware, software, and science. This trend led the Compensation Committee to consider broadening the Company’s peer group was developed consideringto include companies withinwhose talent reflect the next generation of leaders required to support the transformation, at the clinician level, in genomics cloud computing and real-time data. Also, in light of our significantly increased market capitalization, accelerating growth rate, and evolving business characteristics, the Compensation Committee asked Radford to conduct an analysis to inform the Committee’s consideration of including relevant, high-growth companies as input for the compensation peer group for fiscal 2015.

The criteria used in the review included taking a broader industry that have similar business challengesview as well as emphasizing revenue growth, actual revenue (0.5x to 4x Illumina), market capitalization (0.5x to 4x Illumina), total shareholder return, and complexities where we might recruitresearch and lose executive talent.

development investment as a percentage of revenues. The Compensation Committee considered a numberalso considers criteria applied by corporate governance groups. The revised criteria resulted in Illumina’s placement between the 25^th and 75^th percentiles of factorspeer group companies for both revenue and market capitalization, whereas the previous peer group resulted in definingIllumina being at the 25^th percentile for revenue growth and above the market 75^th for market capitalization. Radford compiled relevant companies from the Pharmaceutical, Biotech and Tools; Technology Hardware and Equipment; Semiconductor and Semiconductor Equipment; and Software and Software Services sectors. The result was 13 new additions to the peer group includingfor fiscal 2015, with

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four of these companies being outside our traditional industry competitors ofgroup but whose executive officers manage similar revenue range, market capitalization,strategic and organization complexity, that we believe reflects the market for talent and stockholder investment.operating complexities. Many of companies comprising the industry competitorsupdated peer group are located in geographic areas in which we compete for talent, which reflectsincludes high cost-of-living areas and therefore impacts rates of pay.

The following companies made up theCompensation Committee reviews compensation practices and program design at peer group for fiscal 2013:companies to inform its decision-making process so it can set total compensation levels that it believes are commensurate with the Company’s scope and performance. The Compensation Committee believes that market data is one factor, and its executive compensation determinations are the result of many factors, including the Compensation Committee’s business judgment, which is informed by the experiences of the members of the Compensation Committee as well as input from, and peer group data provided by, the Compensation Committee’s independent compensation consultant.

** In February 2014, Life Technologies Corporation was acquired by Thermo Fisher Scientific Inc.

WeGenerally, we target our total direct compensation, when you considerconsidering base salary and shortshort- and long-term incentives, for executive officers between the 60th and 75th percentiles of compensation paid to executives within our compensation peer group. The Compensation Committee reviews on an annual basis each pay element, and total direct compensation, in a range between the 25th and 75th percentiles. This provides the Compensation Committee with an understanding of the distribution of pay in the market assuming similar levels of experience, as well as individual and company performance. We aim to deliver total direct compensation between the 60th and 75th percentiles assuming achievement of our business goals and performance under our long-term incentive plan. We have set this target above the 50th percentile as a reflection of the level of stretch in the business plan as approved by our Board of Directors. Our focus on pay for performance ensures that we then only provide above market pay if we outperform the market.

The largest component of total direct compensation is delivered through equity-based awards, which, at greater than 75%, represents a larger percentage

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of total direct compensation than that of our peer group and serves to retain our executives and align their interests with those of our stockholders such that higher compensation is realized only for exceptional performance. We believe that our targeted compensation percentiles range appropriately reflectsreflect our position and historical and anticipated growth rates, in each case relative to those in our peer group. We may deviate from these general target levels to reflect the executive’s experience, the executive’s sustained performance level, and market factors as deemed appropriate by the Compensation Committee. The Compensation Committee reviews the information prepared by management from the Radford assessment, reviews each component of an executive’s compensation during the current year and prior years, and considers an executive’s contribution to the achievement of our strategic goals and objectives, the executive’s overall compensation, and other factors to determine the appropriate level and mix of compensation. An executive’s compensation is not determined by formula but, instead, in comparison to the market and within our companyIllumina to positions with similar responsibility and impact on operations.

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Fiscal 2015 Compensation Peer Group

The following companies made up the compensation peer group for fiscal 2015:

The following 11 companies were removed from our prior compensation peer group for fiscal 2015:

The following 13 companies were added to our compensation peer group for fiscal 2015:

Role of the Compensation Committee

The Compensation Committee has overall responsibility for approving and evaluating our executive officer compensation plans, policies, and programs. The Board of Directors has determined that each member of the Compensation Committee is independent within the meaning, and meets the requirements, of Rule 16b-3 of the Securities Exchange Act of 1934 and the rules of The NASDAQ Global Select Market. The Compensation Committee functions under a written charter, which was adopted by the Board of Directors. The charter is reviewed annually and updated as appropriate. A copy of the charter is available on our website atwww.illumina.com by clicking on “Company,” then “Investor Relations,” and then on “Corporate Governance. under “Committee Composition.”

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The primary responsibilities of the Compensation Committee are to:

The Compensation Committee meets as often as it considers necessary to perform its duties and responsibilities. The Compensation Committee held sixfive meetings during fiscal 2013,2015, and it has held one meetingtwo meetings so far in 20142016 to review and finalize compensation elements related to fiscal 2013.2015. The Chairperson works with the Chief Executive OfficerCEO and the Senior Vice Presidenthead of Human Resources

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our human resources department to establish the meeting agenda in advance of each meeting. The Compensation Committee typically meets with the Chief Executive Officer, Chief Financial Officer,CEO, CFO, General Counsel, Senior Vice Presidenthead of Human Resources,our human resources department, our external counsel, and, on occasion, with an independent compensation consultant retained by the Compensation Committee. When appropriate, such as when the Compensation Committee is discussing or evaluating compensation for the Chief Executive Officer,CEO, the Compensation Committee meets in executive session without management. The Compensation Committee receives and reviews materials in advance of each meeting. These materials include information that the independent compensation consultant and management believe will be helpful to the Compensation Committee, as well as materials that the Compensation Committee has specifically requested, including benchmark information, historical compensation data, performance metrics and criteria, the Board of Directors’ assessment of our performance against our goals, and the Chief Executive Officer’sCEO’s assessment of each executive’s performance against pre-determined, individual objectives.

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Components and Analysis of Fiscal 20132015 Executive Compensation

For fiscal 2013,2015, the principal elements of our executive compensation program are summarized in the following table and described in more detail below.

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Compensation Mix

The following charts show the mix of base salary, cash incentives, and long-term equity compensation for each of our CEO and our other named executive officers (NEOs) for fiscal 2015:

The following charts show the mix of performance-based compensation (cash incentives and PSUs) and non-performance based compensation (base salary and RSUs) for each of our CEO and our other named executive officers (NEO) for fiscal 2015:

Base Salary

Base salary is the primary fixed component of our executive compensation program. In general, executive officers with the highest level of responsibility have a lower percentage of their compensation fixed as base salary and a higher percentage of their compensation at risk.at-risk, being tied to performance. Base salary represented a relatively small percentage of total compensation (13%(14% in 2013)2015) for the named executive officers, as set forth under “Compensation Mix” on page 49.officers.

Salary levels are considered as part of our annual executive performance review process, as well as upon promotion or other material change in job responsibility. The Chief Executive OfficerOur CEO makes recommendations to the Compensation Committee for base salary changes for executive officers (excluding himself) based on performance and current pay relative to market practices for executive officers, other than himself. The Compensation Committee reviews these recommendations, makes any adjustments it considers necessary, and then approves the salary changes. The Compensation Committee

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recommends to the Board of Directors the base salary for our Chief Executive OfficerCEO based on performance and his current pay relative to other chief executives in our peer group. The Compensation Committee believes that increases to base salary should reflect the executive’s performance for the preceding year and pay level relative to similar positions in our peer group. Base salary increases also reflect anticipated future contributions of the executive.

Fiscal 20132015 Base Salaries

The average salary increase for all named executive officers in fiscal 2013 was 2.7%, which is consistent with the actions that were taken more broadly for employee compensation, generally, in the Company.

The increase in fiscal 2015 salaries reflects strong operational and financial performance during the prior fiscal year overseen by our executive management team. In addition, the increase in Mr. Flatley’s and Mr. Stapley’s salaries reflects the positioning of our CEO and CFO compensation, respectively, relative to market and the updated compensation peer group for fiscal 2015. The increase in Mr. deSouza’s salary also reflects additional responsibilities assumed by Mr. deSouza with respect to our commercial operations during fiscal 2015.

Performance-Based Cash Compensation

Overview

In general, annualthe first quarter of 2015, the Compensation Committee approved a performance-based cash bonusescompensation funding mechanism for our executive officers are paid outthat operates under our Executive Variable Compensationthe terms of the Illumina, Inc. 2015 Stock and Incentive Plan, or eVCP. The eVCP is an “at-risk” bonus compensation program designedapproved by stockholders in May 2015, pursuant to foster a performance-oriented culture, where individual performance is aligned with organizational objectives. The eVCP provides guidelines for the calculation of annual non-equity, incentive-based compensation, subject towhich the Compensation Committee’s oversight and modification. Any executive officer that is hired duringCommittee sets pre-established financial performance goals at the year on or prior to October 1st is eligible to participate inbeginning of the eVCP for thatfiscal year. Any bonus received by such executive is proratedThe Compensation Committee then determines whether a cash incentive opportunity has been earned based on achievement of the amountpre-established performance goals following the filing of timethe applicable annual report on Form 10-K. This funding mechanism is intended to qualify cash incentive payments as performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986; however, the Company makes no assurances regarding final determinations under Section 162(m).

For fiscal year 2015, the Compensation Committee approved a funding mechanism goal for the executive officer served duringcash incentive program of at least $719,000,000 in non-GAAP operating income. Additionally, the plan year.Compensation Committee approved financial performance goals of at least $2,115,000,000 in revenue and $719,000,000 in non-GAAP operating income for our variable compensation program, which is the non-executive officer bonus program for eligible employees. The initial payout recommendations for the executive officer cash incentive program are based on the

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Target Amounts and Weighted Components

Formetrics of the non-executive officer bonus program. However, in no event would the actual payout recommendations exceed the maximum funded amounts as determined under the executive officer funding mechanism. Following the Compensation Committee’s determination of achievement of the pre-established financial performance goal of non-GAAP operating income for fiscal 2013,2015 under the executive officer cash incentive program, the Compensation Committee establishedfunded a maximum of $3,000,000 for the CEO and a maximum of $1,500,000 for each other named executive officer. The Compensation Committee then applied negative discretion to determine final payments considering such factors as (i) achievement of the financial performance goals set forth in the variable compensation program, (ii) the executive officer’s target cash bonus amounts under the eVCP,incentive amount, calculated as a percentage of each executive officer’s base salary. For our Chief Executive Officer, Mr. Flatley,salary, and (iii) the target cash bonus amount as a percentage of his base salary was 100%, which remained unchanged for fiscal 2013 as compared to fiscal 2012. For each of our named executive officers, other than Messrs. Flatleyofficer’s individual performance, contribution, and deSouza, the target cash bonus amount as a percentage of base salary was 55%, which also remained unchanged for fiscal 2013 as compared to fiscal 2012. Mr. deSouza was not eligible for a bonus under the eVCP plan for fiscal 2013 because he joined Illumina after the eVCP eligibility cut-off date of October 1, 2013.impact.