Autodesk 2008 Annual Report Download - page 39

option review, amortization of purchased intangibles and in-process research and development expenses. We
believe that the use of non-GAAP operating margin rather than GAAP operating margin focuses our executives
on the on-going operations of our business, and encourages long term growth strategies such as acquisitions and
investments in-process research and development.
The structure of the plan separates the funding of the awards from the determination of the actual awards, as
described below.
• Funding for Fiscal Year 2008 Awards
The minimum performance for funding EIP awards for fiscal year 2008 was revenue growth of at least 6
percent and non-GAAP operating margin of at least 19.5 percent. For fiscal year 2008, our financial performance
exceeded the minimum funding threshold, and funding of the EIP was accordingly 190 percent of the target
award amounts. If this threshold was not met, there would not have been any EIP funding. This funding
mechanism is a consequence of the structure our EIP, which is intended to qualify as deductible “performance-
based” compensation within the meaning of Section 162(m) of the Internal Revenue Code.
After minimum thresholds are met and the EIP is funded at the maximum amount of 190 percent, the
Compensation Committee uses discretion (sometimes referred to as negative discretion) to determine appropriate
award payouts based on actual achievements, rather than simply funding such awards at the full 190 percent. An
award payout of about 100 percent of target would generally occur when our financial performance achieves our
annual operating plan and division and individual performance objectives have been achieved. For purposes of
this discussion, the terms funded and funding are used to indicate the amount that may be available in the
aggregate under the EIP. The amount that ultimately is paid is discussed below.
• Target Awards
Since our fiscal year 2008 performance thresholds were met, target awards and maximum eligible payouts
for our Named Executive Officers under the EIP were each approximately:
Participant
Target EIP
(percent of Base Salary)
Maximum EIP
(percent of Base Salary)
Carl Bass, Chief Executive Officer and President ..... 100percent 190 percent
Carol Bartz, Executive Chairman ................. Notapplicable Not applicable
Al Castino, Senior Vice President and Chief Financial
Officer .................................... 75percent 143 percent
George M. Bado, Executive Vice President Worldwide
Sales and Services ........................... 17percent 32 percent
Jan Becker, Senior Vice President Human
Resources .................................. 75percent 143 percent
•Actual Awards to Individuals
The Compensation Committee is not obligated to fully allocate the total funded amount. For fiscal year
2008, a 100 percent award was associated with revenue growth of 15 percent and non-GAAP operating margin of
approximately 28 percent. The Compensation Committee determines the actual awards based not only on our
revenue growth and non-GAAP operating margin, but also on an evaluation of each individual’s contributions
relative to our results. Our fiscal year 2008 revenue growth was approximately 18 percent and our non-GAAP
operating margin was approximately 27 percent.
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