SanDisk 2007 Annual Report Download - page 40

Download and view the complete annual report

Please find page 40 of the 2007 SanDisk annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 157

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157

Non-Equity Incentive Plan Award
Each non-equity incentive plan award granted to our Named Executive Officers in fiscal 2007 consisted of an
annual cash incentive opportunity under the 2005 Plan. The award provided for the payment of a cash bonus based
on the Company’s performance for fiscal 2007 in the area of earnings per share.
The amount of each Named Executive Officer’s award (before any application of the Compensation
Committee’s discretion to reduce the payout under any award) is (i) the Named Executive Officer’s target incentive
amount times (ii) a multiplier determined based on the Company’s performance. The target incentive amount is
expressed as a percentage of the Named Executive Officer’s rate of base salary as of December 31, 2007. The target
incentive amounts for the Named Executive Officers were 125% of base salary for Dr. Harari, 95% of base salary for
Mr. Mehrotra 85% of base salary for Ms. Bruner and 75% of base salary for the remaining Named Executive
Officers. In addition to establishing target incentive amounts, the Compensation Committee approved a range of
multipliers of the target amount based on the level of the Company’s achievement of the earnings per share
performance goal. The maximum multiplier ranged from 0% of target for performance below a threshold level,
37.5% of target for performance at a threshold level, 150% of target at the achievement of the target performance
level and a maximum of 225% of target for exceptional performance. Based on the Company’s achievement of the
performance goals in fiscal 2007 and the range of multipliers established by the Compensation Committee, the
maximum multiplier for fiscal 2007 was 129% of target. Under the terms of the cash incentive awards, the
Compensation Committee may exercise discretion to reduce (but not increase) the amount of the bonus otherwise
payable to a Named Executive Officer based on the formula described above. For fiscal 2007, the Compensation
Committee exercised its discretion to pay bonuses at a rate less than the maximum multiplier based on the
Company’s fiscal 2007 performance. Specifically, for fiscal 2007, the Compensation Committee approved bonuses
at 86% of target for the Named Executive Officers employed by the Company at year-end. In determining whether
to exercise this discretion, the Compensation Committee considered the factors discussed above under “Current
Executive Compensation Program Elements — Annual Cash Incentive Award” in the Compensation Discussion
and Analysis section.
In February 2008, the Compensation Committee reviewed the Company’s performance with respect to
earnings per share for fiscal 2007, certified the level of performance achieved and approved incentive payouts under
the awards based on its review. The amount of the payout approved by the Compensation Committee under each
Named Executive Officer’s incentive award for fiscal 2007 is presented in column (g) of the Summary Compen-
sation Table — Fiscal 2006 and 2007 above.
37