SanDisk 2014 Annual Report Download - page 36

Elements of Compensation Program. As described in more detail below, the material elements of the
Company’s current executive compensation program for the executive officers include the following: a base
salary, an annual cash bonus opportunity, a long-term share-based incentive opportunity, 401(k)
retirement benefits and severance protection for certain terminations of employment. These individual
compensation elements are intended to create a total compensation package for the executive officers that
the Company believes achieves its compensation objectives and provides competitive compensation
opportunities. Furthermore, with the exception of the severance protection, the elements of the executive
officers’ compensation are the same as those of the Company’s broader employee population, which the
Company believes also aligns the interests of the executive officers with the Company as a whole.
Objectives of Compensation Program The table below lists each material element of the Company’s
executive compensation program and the compensation objectives that it is designed to achieve:
Compensation Element Compensation Objectives Designed to be Achieved
Base Salary • Attract and retain top-tier talent
Annual Cash Bonus Opportunity • Pay-for-performance
• Align executive officers’ interests with those of
stockholders
• Attract, retain and motivate top-tier talent
Long-term Share-Based Incentives • Pay-for-performance
• Align executive officers’ interests with those of
stockholders
• Attract, retain and motivate top-tier talent
401(k) Retirement Benefits • Attract and retain top-tier talent
Severance and Other Benefits Upon Termination of • Attract and retain top-tier talent
Employment in Certain Circumstances
The material elements described above include both fixed amounts and variable amounts, which serve
distinct purposes. The Company believes that in order to attract and retain top-caliber executive officers, it
needs to provide them with fixed, predictable benefit amounts that reward their continued service, and the
Company provides its executive officers with base salaries, 401(k) retirement benefits and severance and
other termination benefits, which are generally fixed or predictable.
The variable elements, including the Company’s annual bonus opportunity, are primarily intended to
hold the executive officers, including the Named Executive Officers, accountable for their performance,
although the Company believes the bonus also aligns the interests of the executive officers with those of
the Company’s stockholders and helps the Company attract, retain and motivate the executive officers.
The Company’s long-term share-based incentives are primarily intended to align the interests of the
executive officers, including the Named Executive Officers, with those of the Company’s stockholders,
although the Company believes the share-based incentives also help hold executive officers accountable for
their performance and help the Company attract, retain and motivate executive officers. The annual bonus
opportunity and the long-term share-based incentives are designed to reward performance and the
creation of stockholder value, and therefore the value of these benefits is dependent on performance. The
annual bonus opportunity is paid out on an annual basis to the executive officers, including the Named
Executive Officers, and is designed to reward performance for that period. The long-term equity incentives
are generally designed to reward performance over one or more years.
Continued Commitment to Good Compensation Governance. The Company endeavors to maintain good
governance standards with respect to its executive compensation program. The Company has instituted the
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