NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS The 2021 Annual Meeting of Stockholders of CADENCE DESIGN SYSTEMS, INC., a Delaware corporation, will be held as follows: When: Where: May 6, 2021 Virtual Meeting 1:00 p.m. Pacific Time www.meetingcenter.io/226058748 Items of Business: The purpose of the 2021 Annual Meeting of Stockholders is to consider and take action on the following: 1. To elect the nine directors named in the proxy statement to serve until the 2022 Annual Meeting of Stockholders and until their successors are elected and qualified, or until the directors’ earlier death, resignation or removal. 2. To vote on an advisory resolution to approve named executive officer compensation. 3. To ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Cadence for its fiscal year ending January 1, 2022. 4. To vote on a stockholder proposal regarding action by written consent, if properly presented at the meeting. 5. To transact such other business as may properly come before the meeting or any adjournment or postponement thereof. These items of business are more fully described in the proxy statement accompanying this notice. Record Date: Holders of Cadence Design Systems, Inc. common stock at the close of business on March 8, 2021 are entitled to notice of and to vote at the 2021 Annual Meeting of Stockholders and any adjournment or postponement thereof. How to Vote: Your vote is important to us. Please cast your vote promptly via the internet, telephone or mail. Specific instructions on how to vote are included in the Notice of Internet Availability of Proxy Materials that Cadence will mail to its stockholders as of the Record Date on or about March 26, 2021. You will also be able to vote your shares electronically during the virtual 2021 Annual Meeting. How to Attend: Due to the public health impact of the COVID-19 pandemic, Cadence’s 2021 Annual Meeting will be held online at www.meetingcenter.io/226058748 via live audio webcast. Stockholders will be able to attend and participate in the annual meeting online, vote their shares electronically, view the list of registered stockholders as of the Record Date and submit questions through the virtual meeting platform during the meeting. Please refer to the “Information About the Annual Meeting” section of this proxy statement for detailed instructions on how to register for and attend the 2021 Annual Meeting. By Order of the Board of Directors, San Jose, California Alinka Flaminia March 26, 2021 Senior Vice President, Chief Legal Officer and Corporate Secretary TABLE OF CONTENTS Proxy Statement ............................................................................. 1 Letter from the Chairman of the Board ........................................................... 1 Corporate Governance ........................................................................ 3 Board of Directors ............................................................................ 7 Stockholder Engagement ...................................................................... 20 Matters to Be Considered at the Annual Meeting ................................................... 23 Proposal 1: Election of Directors ................................................................ 23 Proposal 2: Advisory Resolution to Approve Named Executive Officer Compensation .................... 31 Proposal 3: Ratification of the Selection of the Independent Registered Public Accounting Firm ............ 32 Report of the Audit Committee .................................................................. 33 Fees Billed to Cadence by the Independent Registered Public Accounting Firm During Fiscal 2020 and 2019 .... 34 Proposal 4: Stockholder Proposal ............................................................... 36 Security Ownership of Certain Beneficial Owners and Management ................................... 40 Compensation Discussion and Analysis .......................................................... 43 Compensation Committee Report ............................................................... 57 Compensation Committee Interlocks and Insider Participation ........................................ 58 Compensation of Executive Officers ............................................................. 59 Potential Payments Upon Termination or Change in Control ......................................... 68 Equity Compensation Plan Information ........................................................... 75 Pay Ratio Disclosure .......................................................................... 76 Certain Transactions .......................................................................... 79 Information About the Annual Meeting ............................................................ 82 Other Matters ................................................................................ 89 PROXY STATEMENT LETTER FROM THE CHAIRMAN OF THE BOARD Dear Cadence stockholders: My fellow directors and I have been keenly focused this year on overseeing the execution of Cadence’s business strategy and prudent risk management while navigating the evolving challenges presented by COVID-19. I am pleased to communicate with you about several of the board’s priorities and actions since the 2020 annual meeting. The board of directors of Cadence represents your interests as we work towards creating sustainable long-term value in an uncertain and dynamic environment. Business Strategy and Risk Management Over the past year, the board and management of Cadence oversaw unprecedented adjustments to our operations in order to safeguard the health and well-being of our employees, customers, vendors and our broader communities. As the pandemic unfolded, we transitioned from approximately 50 global sites to a distributed workforce in over 8,000 homes. Our leadership and employees have risen to the challenge and have maintained high levels of innovation and productivity during this difficult time, enabling us to effectively execute on our strategic priorities and achieve outstanding business results. In 2020, we continued to further our Intelligent System Design™ strategy to deliver computational software, hardware and IP offerings to customers that are innovating the next generation of electronic products and systems that keep us safe, healthy and connected. I am proud that the company’s agility and resilience have enabled us to accelerate our momentum at marquee customer accounts, expand our portfolio through compelling acquisitions and organic growth, and win customers in targeted vertical segments. Corporate Social Responsibility and Human Capital Management If there is a silver lining to a year marked by extraordinary macro challenges, it is that it has served as a reminder of the importance of community and connection. Our One Cadence–One Team culture underpins our firm belief that the best ideas come from inclusive collaboration, and that a diverse, highly supported and engaged workforce is critical to the foundation of our business success. The events of this year have prompted us to intensely focus on the physical and mental health of our employees, and further our deep commitment to address gender and racial disparities in our workforce, which remain a particular challenge in our industry. In 2020, we continued to expand and deepen our environmental initiatives. Among our efforts to be a responsible organization that positively impacts society, we are actively investing in initiatives to help combat global climate change by reducing our environmental footprint. Using 2019 as a baseline, we have set a target to reduce our greenhouse gas Scope 1 and Scope 2 emissions by 15% by 2025. In addition, Cadence continues to advance technologies that enable the design of high-performance systems with progressively lower power consumption, an essential driver for the electronics industry that ripples through our ecosystem. I encourage you to review the Corporate Social Responsibility section of this proxy statement, as well as our 2020 Sustainability Report, which is available on the Corporate Social Responsibility page at www.cadence.com, for more information on all of our environmental, social and governance initiatives. 1 Ongoing Board and Management Succession Planning Succession planning at the board and senior management levels remains a key focus. We discuss board refreshment regularly as we work to ensure that the board continues to be comprised of individuals with relevant expertise, integrity, experience, skills, judgment, and diversity of background. In January 2021, we appointed Julia Liuson to the board and its strategy committee. Julia brings to our board deep technology and operational expertise coupled with strong domain knowledge from her long-time service as an executive at Microsoft. We also adjusted the composition of several of our board committees, including appointing Lewis Chew as audit committee chair, in 2020. Earlier this month, our colleague Sue Bostrom decided to step down from the board upon the expiration of her term at the upcoming 2021 annual meeting. My fellow directors and I thank her for her dedicated long-time service, including her steadfast leadership of our strategy committee. Cadence benefited greatly from the perspectives that Sue brought to the boardroom, and as we look to the future of Cadence’s board, we remain committed to seeking out diverse leaders who can apply their unique and valuable experiences to the stewardship of our company.