Markus Andrews

When it comes to money, couples face a big question: yours, mine or ours?
A new survey takes a look at how couples are managing their finances.
Experts say there generally isn’t a wrong answer — as long as you communicate.

Jeffrey Hamilton | DigitalVision | Getty Images

When it comes to money, couples face one question: should we keep our money separate, combine it or some combination of both?
A December Bankrate survey finds 62% of couples who are in a committed relationship keep at least some money separate from each other.

Of those couples, 38% rely exclusively on joint accounts they share, the survey of 2,217 adults found. Meanwhile, 34% of couples have a combination of joint and separate accounts and 27% keep their money completely separate.
Younger couples tend to be more in favor of some separation for their money, Bankrate found. The survey found 88% of Gen Zers keep at least some money to themselves, versus 70% of millennials, 59% of Gen Xers and 52% of baby boomers.
Younger couples may gravitate more toward separate accounts because they are marrying later and become used to managing their own incomes, said Ted Rossman, senior industry analyst at Bankrate. Moreover, now that it’s easier to complete banking and shopping transactions online, that has also encouraged separate accounts for younger couples.

Communication is key

Keeping money separate but equal can work, so long as couples agree on the parameters ahead of time, Rossman said.
“That’s really the key for people is you need to communicate about what you’re doing with your money,” Rossman said.

Many financial advisors say the best choice comes down to a couple’s personal preferences, and what works best when it comes to fulfilling their financial goals.
“Unless there’s reason to separate them, it doesn’t much matter,” David Zavarelli, a certified financial planner and financial advisor at LPL, said of how couples manage their accounts.
However, Zavarelli said he is working with a couple who insist on separate accounts for everything, down to his and her vacation and Christmas club accounts. In total, they have 27 accounts, which can be cumbersome to maintain with the firm’s financial planning software, he said. But he’s not worried about the couple’s financial arrangement.
“They’re both on the same page,” Zavarelli said. “We do just kind of have a chuckle and then move on with the plan.”

For all couples, whether or not money becomes an issue comes down to communication, experts say.
Research from Cornell University suggests that a couple’s attitude toward money — whether or not they see problems as solvable — influences how well they communicate about finances. If they don’t feel there’s a solution, they’re less likely to talk about it.
That lack of communication can contribute to financial infidelity, when one or both partners lie about or hide financial information.
Bankrate’s survey found 40% of adults who live with their partners are committing or have committed financial infidelity. Some examples of the secrets they keep include spending more than their partner would want, having secret debt, or keeping a secret credit card, savings account or checking account.
To help prevent that, it helps to take the time to communicate with your partner about both short- and long-term financial goals, according to Rossman.
“I would urge people to set up regular money discussions or dates,” Rossman said.

Don’t miss these insights from CNBC PRO More

By many measures, millennials are doing remarkably well.
Still, very few millennials would consider themselves wealthy.
The disconnect between being rich on paper and feeling well off has been referred to as “phantom wealth.”  

Millennials have come a long way since their days of being called lazy or entitled. Despite reaching key milestones later than their parents once did, they are now wealthier than previous generations were at their age.
“Younger families in the U.S. made remarkable gains,” according to an analysis of 2022 data by the St. Louis Federal Reserve.

Collectively, millennials are now worth about $15.95 trillion, up from $3.94 trillion five years earlier, according to Federal Reserve data. 

Still, very few millennials would consider themselves wealthy. The disconnect between being rich on paper and feeling well off has been referred to as “phantom wealth.”  
For example, gains in the value of a home or a retirement plan can feel like phantom wealth because they are illiquid and have no bearing on day-to-day cash flow. 
Boosted by a strong jobs market and rising wages, many in this age group have purchased homes and benefited from soaring home values. To that point, the St. Louis Fed report found between 2019 and 2022, home prices jumped 44%.
Largely driven by real estate gains, the “median wealth of these younger people more than quadrupled” during this three-year period, the report said.

However, homeownership does not offer the same sort of safety cushion other investments do, noted Michael Liersch, head of advice and planning at Wells Fargo.
“Unless you are willing to downsize, you are really not going to monetize the increase in that asset,” said Liersch, especially in the case of a primary residence. “Millennials, in particular, haven’t been able to use that wealth.”

Millennials have ‘phantom wealth’

“Phantom wealth is a nonsensical term: assets either exist or they don’t,” said Brett House, an economics professor at Columbia Business School. However, there is a very real phenomenon at work.
As it turns out, “millennials experienced a sharp swing in their relative standing,” the St. Louis Fed report found.
The median wealth of older millennials, between the ages of 36 and 45, was 37% above expectations. The wealth of younger millennials and older Gen Zers, or those aged 26 to 35, exceeded expectations by 39%.
Compared with other generations, millennials are also more likely to say that their income went up over the last few months and that they expect their earnings potential to increase again in the year ahead, according to another report by TransUnion.
More from Personal Finance:IRS announces the start of the 2025 tax seasonWhat the Trump administration could mean for your moneyHouse Republicans push to extend Trump tax cuts
But even as households became wealthier, inflation and instability have left more people in the bucket of so-called HENRYs — “high earners, not rich yet,” House said.
And “the ‘HENRY’ phenomenon isn’t limited to millennials or Gen Z,” he added.
“It’s harder for every generation to feel financially comfortable when the management of so much risk related to employment, healthcare, retirement pensions, insurance, and other components of economic well-being has been shifted to individuals during a period of rapidly rising prices,” House said.

‘There is so much more to achieve’

Many millennials also say it’s harder today to make it on their own than it was for their parents when they were starting out.
They have higher student loan balances, bigger mortgages and car payments, and more expensive child care costs, explained Sophia Bera Daigle, founder and CEO of Gen Y Planning, a financial planning firm for millennials.
“Cash flow has been tight,” she said.
That makes it more difficult to set extra money aside or make long-term plans, said Bera Daigle, a certified financial planner and a member of CNBC’s Advisor Council. “While they are making significant progress on reaching some financial goals, it still feels like there is so much more to achieve.”
However, feeling financially secure is often less about how much money you have and more about the ability to spend less than you make, experts say.

In part, higher prices have fostered the feeling of being overextended, according to CFP Kamila Elliott, co-founder and CEO of Collective Wealth Partners.
Elliott, who is also on CNBC’s FA Council, said clients often ask “Where is my money going?”
“If you feel like a lot of fixed expenses are going up, it may mean you need to cut back on the fun things,” she advised, such as eating out or taking a vacation.
“It’s going to take a little bit of an offset to have more money at the end of the month,” Elliott said.

Don’t miss these insights from CNBC PRO More

Tax season opens for individual filers Monday, and the IRS has started processing 2024 returns.
If you’re eager for a tax refund, there are a few ways to get your payment faster, experts say.

Andreswd | E+ | Getty Images

It’s official: Tax season is open for individual filers, and the IRS has started to process 2024 tax returns.
If you’re expecting a refund, there are key things to know, according to tax experts.

“There are some very simple tips to get the fastest refund possible,” said Mark Steber, chief tax information officer of Jackson Hewitt Tax Services.
For most filers, the federal tax deadline this year is April 15 for returns and balances. The agency expects more than 140 million individual returns before the due date. 
More from Personal Finance:30 million people could qualify to use IRS free Direct File programThis free tax filing option is ‘fast and simple,’ IRS says. Here’s who can use itInvestors may be able to file taxes for free this season. Here’s who qualifies
Typically, you’ll receive a tax refund if you overpaid taxes the previous year. But you could owe money if you didn’t withhold enough from your paycheck or didn’t make payments throughout the year. 
As of Dec. 27, the average refund was $3,138 for the 2024 filing season, which was slightly lower than 2023, according to the IRS.

How to get a faster tax refund 

If you’re eager for your refund, the best way to speed up the process is by filing electronically and picking direct deposit for your payment, former IRS Commissioner Danny Werfel said during a press call in early January.  
“Nine out of 10 taxpayers will see their refund within 21 days, and often sooner,” he said.
You can check the refund status of your current-year, electronic filing with the IRS 24 hours after submitting your return.

Paper refund checks are 16 times more likely to have an issue, such as theft or misdirection, according to the U.S. Department of the Treasury’s Bureau of the Fiscal Service.
However, it’s also important to enter banking details correctly when selecting direct deposit for payment, experts say. You should always double-check routing and account numbers.
During fiscal year 2023, more than 90% of individual taxpayers filed electronically, the IRS reported.  

You need a ‘complete and accurate’ return

While many taxpayers are itching to file early, it’s important to wait until you have all the necessary tax forms, according to Elizabeth Young, director of tax practice and ethics for the American Institute of Certified Public Accountants.
You want a “complete and accurate tax return,” she said. Otherwise, the IRS could flag your filing for mistakes, which causes delays.
While many tax forms arrive in January, others won’t be ready until mid-February to March or later.
Some common tax return errors include missing or inaccurate Social Security numbers, misspelled names, entering information wrong, and math mistakes, according to the IRS. More

Millions of Social Security beneficiaries have received their first benefit checks for 2025.
That includes a more modest 2.5% cost-of-living adjustment, the lowest increase since 2021.
Still, retirees face a higher cost of living.

Sporrer/Rupp | Image Source | Getty Images

Millions of Social Security beneficiaries have now received their first benefit checks for 2025.
The new 2.5% cost-of-living adjustment — which adds $50 per month to retirement benefits on average — marks the lowest increase since 2021, when inflation spiked shortly thereafter.

With prices still high, many beneficiaries are likely feeling the increase “wasn’t quite enough,” though “every little bit helps,” said Jenn Jones, vice president of financial security at AARP, an interest group representing Americans ages 50 and over.
More from Personal Finance:IRS announces the start of the 2025 tax seasonWhat the Trump administration could mean for your moneyHouse Republicans push to extend Trump tax cuts
“When you’re living on a fixed income, when even what some might think are small or mild increases to everyday expenses happen, they can create a real financial burden for older Americans,” Jones said.
One measure, the Elder Economic Security Standard Index — also known simply as the Elder Index — developed by the Gerontology Institute at the University of Massachusetts in Boston, evaluates just how much it costs older adults to pay for their basic needs and age in place.

Social Security alone doesn’t cover adequate lifestyle

Based on a national average, a single person would need $2,099 per month if they are a homeowner with no mortgage, to cover housing, food, transportation, health care and other miscellaneous expenses, according to 2024 Elder Index data.

That goes up to $2,566 per month necessary for single renters, and $3,249 per month for single homeowners with a mortgage.
An older couple who own a home without a mortgage would need $3,162 per month, according to the index. That increases to $3,629 per month for a couple who rents, and $4,312 per month for a couple who has a mortgage on their home.

Those amounts exceed the average Social Security retirement benefits Americans stand to receive. In 2025, individual retired workers receive an average $1,976 per month, while couples who both qualify for benefits have an average $3,089 per month.
To be sure, those Elder Index thresholds are based on national averages, and in some areas of the country retirees may be able to stretch their incomes further than others. Yet the data typically shows it’s difficult to live just on Social Security benefits.
“What we find with the Elder Index is that there isn’t a single county in the country where the average Social Security benefit covers an adequate lifestyle,” said Jan Mutchler, professor of gerontology at the University of Massachusetts in Boston, of comparisons that were run prior to the 2024 data.

‘Prices might be rising faster’

As a record number of baby boomers turn 65, research from the Alliance for Lifetime Income has found 52.5% of that cohort will rely primarily on Social Security for income in retirement since they have assets of $250,000 or less.
The Social Security cost-of-living adjustment aims to track inflation. Yet because those adjustments are made annually, they come with a lag, according to Laura Quinby, associate director of employee benefits and labor markets at the Center for Retirement Research at Boston College.
As inflation spiked, reaching a peak in 2022, Social Security’s COLAs also reached four-decade highs. In 2022, Social Security beneficiaries saw a 5.9% boost to benefits, which was followed by a higher 8.7% increase in 2023. That subsided to a 3.2% increase in 2024, followed by a more modest 2.5% bump for 2025.
The Social Security COLAs largely made up for the inflation surge that happened in 2022, Quinby said. However, inflation is now ticking up again, she said. The consumer price index rose 0.4% in December, slightly above what had been estimated for the month, and was up 2.9% for the year.
“We’re in another period where prices might be rising faster than the Social Security COLA,” Quinby said.

How much retirees are affected by inflation varies based on three factors — how much their assets keep up with rising prices, the amount of debt they have at fixed interest rates and whether they change their savings, investment or work behaviors, the Center for Retirement Research has found.
Mary Johnson, a 73-year-old independent Social Security and Medicare analyst, said her Social Security cost-of-living adjustment for 2025 has mostly been consumed by rising costs. While Social Security represents about 40% of her income, much of her other retirement assets are invested in stocks, which saw record growth last year.
Still, Johnson said she’s grappling with increases to her homeowner’s insurance, home heating and cooling bills, food costs, and drug plan premiums. One bright spot is that she did see her auto insurance decline last year.

‘Biggest game changer this year’

A notable change retirees have to look forward to in 2025 is a new $2,000 annual cap on out-of-pocket Medicare Part D prescription drug costs, that was enacted with the Inflation Reduction Act under President Joe Biden.
“That’s the biggest game changer this year for older Americans,” said AARP’s Jones.
More than 95% of Medicare Part D beneficiaries will benefit from that new out-of-pocket cap, AARP’s research has found.
Before the change, the amount of money Medicare Part D beneficiaries spent on their medications was unlimited, with potentially thousands of dollars in out-of-pocket costs, according to Juliette Cubanski, deputy director of the program on Medicare policy at KFF, a provider of health policy research.

The change provides real financial relief and peace of mind, she said.
“If they’re not taking expensive medications now, but they do in the future, they won’t have to potentially go bankrupt or just simply not fill their prescriptions because they cannot afford the out-of-pocket cost,” Cubanski said.
To be sure, Medicare beneficiaries still face other rising costs, particularly with regard to monthly Part B and Part D premiums. Because those payments can be deducted directly from Social Security checks, they may affect just how much of a COLA increase beneficiaries see.
In 2025, the standard monthly Part B premium is $185 per month, while the average standard Part D premium is $46.50. Notably, higher-income beneficiaries pay more expensive rates, though that may not be as noticeable in their household budgets, Cubanski said.
“For others, the fact that they’re paying premiums for Medicare coverage certainly takes away from the amount of money that they have for other essentials,” Cubanski said. More

Pavlo Gonchar | SOPA Images | Lightrocket | Getty Images

The stock market has been coasting on enthusiasm as President Donald Trump takes the reins, but plenty of questions remain over tax cuts and tariffs. Dividend-paying stocks can offer investors some cushioning if the market becomes rocky.
Amid an uncertain macro backdrop, investors looking for stable returns can add some solid dividend stocks to their portfolios. To select the right dividend stocks, investors can consider insights from top Wall Street analysts, as they analyze a company’s ability to pay consistent dividends, backed by solid cash flows.

Here are three dividend-paying stocks, highlighted by Wall Street’s top pros as tracked by TipRanks, a platform that ranks analysts based on their past performance.
AT&T
This week’s first dividend stock is telecommunications company AT&T (T). Recently, the company announced a quarterly dividend of $0.2775 per share, payable on Feb. 3. AT&T stock offers a dividend yield of nearly 5%.
Recently, Argus Research analyst Joseph Bonner upgraded AT&T stock to buy from hold, with a price target of $27. Bonner’s bullish stance follows AT&T’s analyst day event, where the company discussed its strategy and long-term financial goals.
Bonner noted that management raised its 2024 adjusted EPS outlook and revealed strong estimates for shareholder returns, earnings and cash flow growth, as AT&T “finishes extricating itself from some troublesome acquisitions and focuses on the convergence of wireless and fiber internet services.”
The analyst expects the company’s cost-saving efforts, network modernization, and revenue acceleration to gradually reflect in its performance. He thinks that management’s vision of capturing opportunities arising from the convergence of wireless and fiber, along with the company’s strategic investments, provides a compelling outlook for future growth and shareholder returns.

Bonner noted that at the analyst day event, AT&T indicated that neither dividend hikes nor M&A are under consideration while the company invests in 5G and fiber broadband networks and continues to reduce its debt. That said, management is committed to protecting its dividend payments after reducing them by almost half in March 2022. Bonner highlighted that AT&T plans to return $40 billion to shareholders in 2025-2027 via $20 billion in dividends and $20 billion in share repurchases.
Bonner ranks No. 310 among more than 9,300 analysts tracked by TipRanks. His ratings have been profitable 67% of the time, delivering an average return of 14.1%. See AT&T Stock Buybacks on TipRanks.
Chord Energy
We move to Chord Energy (CHRD), an independent oil and gas company operating in the Williston Basin. Under its capital returns program, Chord Energy aims to return more than 75% of its free cash flow. The company recently paid a base dividend of $1.25 per share and a variable dividend of 19 cents per share.
Ahead of Chord Energy’s Q4 2024 results, Mizuho analyst William Janela reiterated a buy rating on the stock with a price target of $178, calling CHRD a Top Pick. The analyst said that his Q4 2024 estimates for CFPS (cash flow per share) and EBITDX (earnings before interest, tax, depreciation and explorations costs) are essentially in line with the Street’s estimates.
Janela added that compared to its peers, there is more visibility in Chord Energy’s outlook for this year, as it has already issued its preliminary guidance. Further, he expects the company to show enhanced capital efficiencies on a year-over-year basis, given that it has fully integrated the assets from the Enerplus acquisition.
“A more defensive balance sheet (~0.2x net debt/EBITDX, one of the lowest among E&P peers) also leaves CHRD well-positioned in a volatile oil price environment,” said Janela.
While CHRD stock underperformed its peers in 2024, the analyst noted that shares are now trading at a wider discount to peers on EV/EBITDX and FCF/EV basis, which he thinks underappreciates the company’s improved scale and high-quality inventory in the Bakken basin following the Enerplus acquisition. Finally, based on his Q4 2024 free cash flow (FCF) estimate of $235 million, Janela expects about $176 million of cash return, including $76 million in base dividends. He expects the majority of the variable FCF portion to reflect share buybacks, like in the third quarter.
Janela ranks No. 656 among more than 9,300 analysts tracked by TipRanks. His ratings have been profitable 52% of the time, delivering an average return of 19.2%. See Chord Energy Insider Trading Activity on TipRanks.
Diamondback Energy
Another Mizuho analyst, Nitin Kumar, is bullish on Diamondback Energy (FANG), an independent oil and natural gas company that is focused on reserves in the Permian Basin. The company paid a base dividend of 90 cents a share for Q3 2024.
The company is scheduled to announce its results for the fourth quarter of 2024 in late February. Kumar expects FANG to report Q4 2024 EBITDA, free cash flow, and capital expenditure of $2.543 billion, $1.243 billion and $996 million, against Wall Street’s consensus of $2.485 billion, $1.251 billion, and $1.004 billion, respectively.
The analyst stated that the fact that FANG has maintained its preliminary outlook for 2025, which it issued while announcing the Endeavor Energy Resources acquisition in February 2024, reflects strong execution and modest cost savings.
Overall, Kumar reaffirmed a buy rating on FANG stock with a price target of $207. He highlighted that “FANG is a leader in cash return payouts, with 50% of free cash now returned to investors, including a high base dividend yield.”
He added that the company’s high dividend yield reflects its superior cost control and unit margins. Moreover, the analyst thinks that with the completion of the Endeavor acquisition, the scale and quality of the combined asset base are impressive.
Kumar ranks No. 119 among more than 9,300 analysts tracked by TipRanks. His ratings have been profitable 67% of the time, delivering an average return of 14.1%. See Diamondback Ownership Structure on TipRanks. More

If you’re nearing retirement, key changes for 2025 could affect your finances, according to advisors.
Starting in 2025, there’s a higher 401(k) plan catch-up contribution for workers ages 60 to 63.
Plus, there are new rules for inherited individual retirement accounts and boosted Social Security benefits for certain public workers.

Miniseries | E+ | Getty Images

Leverage the 401(k) ‘super catch-up’

For 2025, investors can save more with higher 401(k) plan limits. Employees can defer $23,500 into 401(k) plans, up from $23,000 in 2024. The catch-up contribution limit is $7,500 for workers ages 50 and older.
But thanks to Secure 2.0, there’s a “super catch-up” for investors ages 60 to 63, said certified financial planner Michael Espinosa, president of TrueNorth Retirement Services in Salt Lake City. 

The catch-up contribution for employees ages 60 to 63 jumps to $11,250 for 2025. That brings the total deferral limit to $34,750 for these workers.
“This could be huge” for deferring taxes in 2025, Espinosa said.
Some 15% of eligible participants made catch-up contributions in 2023, according to Vanguard’s 2024 How America Saves report, based on data from 1,500 qualified plans and nearly 5 million participants.

Avoid a penalty for inherited IRAs

An inherited individual retirement account could boost your nest egg. However, some heirs may face an IRS penalty for missed required withdrawals in 2025, experts say. 
With more focus on shifting economic policy, “it’s easy to see how this one could get buried,” said CFP Edward Jastrem, chief planning officer at Heritage Financial Services in Westwood, Massachusetts.
Since 2020, certain inherited accounts must follow the “10-year rule,” meaning heirs must empty inherited IRAs by the 10th year after the original owner’s death. This applies to heirs who are not a spouse, minor child, disabled, or chronically ill, and certain trusts.
Starting in 2025, the IRS will enforce the penalty on heirs for missed required minimum distributions, or RMDs. The penalty is 25% of the amount that should have been withdrawn. But it’s possible to reduce that penalty if your RMD is “timely corrected” within two years, according to the IRS.
Heirs must take yearly withdrawals if the original IRA owner had reached their RMD age before death.

Social Security benefit change is ‘significant’

If you or your spouse work in public service and expect to receive a pension, new legislation could mean higher Social Security benefits in retirement.
Enacted by former President Joe Biden in January, the Social Security Fairness Act ended two provisions — the Windfall Elimination Provision and Government Pension Offset — that lowered benefits for certain government employees and their spouses.
“This change is significant for many retirees who had their benefits eliminated or reduced,” said CFP Scott Bishop, partner and managing director of Presidio Wealth Partners, based in Houston.
The Social Security Administration is working on the timeline for the new legislation and will update its website when more details are available. More

Qorvo logo of a US semiconductor company is seen displayed on a smartphone and pc screen.
Sopa Images | Lightrocket | Getty Images

Company: Qorvo Inc (QRVO)

Business: Qorvo is a global supplier of semiconductor solutions. The company operates through three segments: High Performance Analog (HPA), Connectivity and Sensors Group (CSG) and Advanced Cellular Group (ACG). The HPA segment is a global supplier of radio frequency (RF), analog mixed signal and power management solutions. The CSG segment is a global supplier of connectivity and sensor solutions. The ACG segment is a global supplier of cellular RF solutions for smartphones, wearables, laptops, tablets and other devices.
Stock Market Value: ~$8.41B ($88.94 per share)

Stock chart icon

Qorvo shares over the past 12 months

Activist: Starboard Value

Ownership: 7.71%
Average Cost: $70.92
Activist Commentary: Starboard is a very successful activist investor and has extensive experience helping companies focus on operational efficiency and margin improvement. Starboard has initiated activist campaigns at 13 prior semiconductor companies, and the firm’s average return on these situations is 85.87% versus an average of 28.91% for the Russell 2000 during the same time periods.

What’s happening

Behind the scenes

Qorvo is a global semiconductor company that specializes in manufacturing radio frequency (RF) chips for applications across mobile devices, wireless infrastructure, aerospace and defense, and other end markets. The company is organized into three operating and reportable segments: (i) High Performance Analog (HPA) supplying RF, analog mixed signal and power management solutions; (ii) Connectivity and Sensors Group (CSG) supplying connectivity and sensor solutions; and (iii) Advanced Cellular Group (ACG) supplying cellular RF solutions for smartphones and other devices. In 2024, Qorvo generated $3.77 billion of revenue, of which approximately 75% was attributable to ACG. While the company is diversified across multiple industries, it is particularly reliant on RF sales for mobile devices, with 46% and 12% of total revenue attributable to just Apple and Samsung, respectively, in FY24.

Qorvo was formed as a result of a merger of equals in an all-stock transaction between RF Micro Devices (RFMD) and TriQuint Semiconductor (TQNT) that was announced in February 2014 and completed in January 2015. Starboard is quite familiar with Qorvo considering that the firm was a 13D filer on TriQuint in 2013.  On Oct. 29, 2013, Starboard sent a letter to TriQuint outlining the company’s undervaluation, underperformance, and put forward value-enhancing proposals. On Dec. 2, 2013, Starboard nominated a majority slate of six director candidates to the board for the 2014 annual meeting. However, the engagement never went to a proxy fight, as Starboard issued a letter supporting TriQuint’s proposed merger with RFMD in March 2014 and exited its 13D. In under a year of engagement, Starboard made a 113.15% return on their investment versus 23.80% for the Russell 2000.
The merger was pitched to shareholders as an opportunity to create new growth opportunities in mobile devices, network infrastructure, and aerospace and defense, bolstered by the new company’s scale advantages, product portfolio, improved operating model and $150 million in cost synergies. The announcement was met with tremendous excitement, as shares of TriQuint and RFMD rocketed approximately 200% from the day prior to the announcement up to their combination.  However, one-year post-transaction the newly-formed Qorvo was down 27.7%. For functionally a decade, from merger completion to the day prior to Starboard Value disclosing its 7.71% stake, the stock traded flat, up just a mere 4.5%. This is quite staggering underperformance when semiconductors have been the beneficiaries of tremendous secular tailwinds in recent years. Over the same time period, the Philadelphia SE Semiconductor Index is up over 650%.
The opportunity to improve value at Qorvo is simple, operationally focused and something Starboard has done many times at many semiconductor companies: margin improvement. Despite Qorvo’s excellent product portfolio and competitiveness with peers Broadcom and Skyworks Solutions, the company’s gross and operating margins have been inferior. Last fiscal year, Qorvo had a gross margin of 39.5% and an operating margin of 8.3%, whereas its peer Skyworks boasted margins of 44.2% and 24.9% respectively. Despite having roughly similar levels of revenue ($4.7 billion for Skyworks and $3.8 billion for Qorvo), Qorvo spends 10.3% of revenue on selling, general and administrative expenses versus 6.6% for Skyworks and 18.1% of revenue in R&D versus 12.7% for Skyworks. Moreover, Qorvo spends an additional $104 million (2.8% of revenue) on “other operating expenses.” This is a blaring signal of a board and management team that need discipline and one of the main reasons Qorvo received such a high vulnerability rating in 13D Monitor’s Company Vulnerability Ratings database.
Every activist has a different style with varying levels of success across industries and strategies, but it is hard to find a more successful combination than Starboard at a semiconductor company with margin improvement opportunities. Starboard has previously commenced activist campaigns at the following 13 semiconductor companies: Actel, Microtune, Zoran, DSP Group, MIPS Technologies, Integrated Device Technology, Tessera, TriQuint Semiconductor, Micrel, Integrated Silicon Solution, Marvell, Mellanox Technologies and On Semiconductor. In all of these campaigns, Starboard has had a positive return on its investment and its average return on the 13 is 85.87% versus an average of 28.91% for the Russell 2000 during the same time periods. Starboard’s modus operandi in these situations has been take board seats if necessary, institute a philosophy of discipline that leads to more efficient SG&A and targeted R&D and helps improve operating margins. Additionally, at companies like On Semiconductor that were operating at low utilization levels, Starboard helped size capacity for more realistic manufacturing levels by consolidating fabs and using outside foundries for flexibility. The same opportunity exists here, which could lead to additional margin improvement.
We have no doubt that Starboard will want board seats, and we believe this should be a quick settlement for several reasons. First, Starboard’s experience and track record with semiconductor companies described above is unimpeachable. Second, it is indefensible to be a semiconductor company in 2025 that has deprived its shareholders of any real return over the past ten years. Third, Starboard already has relationships with three of Qorvo’s eight directors including its chairman, all of whom were directors of TriQuint when Starboard engaged there: Walden C. Rhines (chairman), David H. Y. Ho and Roderick D. Nelson. Fourth, of the company’s eight directors, five have sat on the board for the 10 years since the TriQuint /RFMD merger, and one (David H. Y. Ho) has informed the company of his intention to retire and not stand for reelection at the company’s next annual meeting. Once on the board, Starboard’s representatives and the remainder of the board will have the opportunity to evaluate whether this is the right management team to turnaround Qorvo’s recent performance. If they decide that new management is needed, it is important to note that there has been a tremendous amount of consolidation in the semiconductor industry in recent years, which has resulted in many senior and talented operators on the sidelines.
Qorvo’s director nomination window does not open until March 16, 2025, and we would be very surprised if a settlement is not reached before then.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. More