Autodesk 2006 Annual Report Download - page 39

2. Cash incentive compensation is designed to motivate executives to attain short-term and longer-term
corporate, business unit and individual management goals. The actual annual cash bonuses received by an
executive depend upon attainment of these specified business goals, together with discretionary analysis of
individual contribution,within the limits ofthe stockholder approved Executive Incentive Plan. Incentive bonuses
for fiscal year 2006 were based upon our financial results, which exceeded the established targets, as well as
the achievement of other corporate and individual goals and related contributions to our success. In setting goals
and measuring performance against those goals, the Compensation and Human Resources Committee considers
compensation practices among companies competing for a common employee pool, as well as general economic
and market conditions. It is the intention of the Compensation and Human Resources Committee in fiscal year
2007 to continue a strong correlation between the achievement of specific financial targets and corporate goals
and the payment of incentive cash compensation to our officers and other executives.
3. Equity-based incentive compensation has been provided to employees and management through our stock
incentive plans. Under these plans, officers and employees are eligible to be granted stock options based on
competitive market data, as well as their responsibilities and position at Autodesk. These options allow
participants to purchase shares of our Common Stock at the market price on the date of the grant, subject to
vesting during the participant’s employment with Autodesk. Employees are also permitted to purchase shares
of our Common Stock, subject to certain limitations, at 85% of fair market value under the Employee Stock
Purchase Plan. The purpose of these stock plans is to instill the economic incentives of ownership and to create
management incentives to improve stockholder value. Our stock option plans utilize vesting periods to encourage
employees and executives to remain with Autodesk and to focus on longer-term results. Further, in December
2004, the Compensation and Human Resources Committee and the full Board of Directors established stock
ownership guidelines for executive officers that are designed to encourage long term stock ownership in the
Company and more closely link executive officer interests with those of our stockholders.
In making compensation determinations, the Compensation and Human Resources Committee utilizes
independent third-party executive compensation surveys as well as analysis of proxy statements for comparably-
sized software companies to assess an appropriate level of pay for performance. The Compensation and Human
Resources Committee believes that Autodesk’s executive compensation program falls within the typical range
of compensation programs offered by comparable high technology companies.
Chief Executive Officer Compensation
In determining Ms. Bartz’s compensation for the fiscal year ended January 31, 2006, the Compensation and
Human Resources Committee reviewed industry proxy statements and surveys of compensation paid to chief
executive officers of comparable companies, with a focus on those companies located in the San Francisco Bay
Area, and evaluated achievement of corporate and individual objectives for the fiscal year.
In addition, like other executive officers, Ms. Bartz was eligible to receive an incentive bonus determined
on the basis of achievement of financial and non-financial individual and corporate goals and contribution to
our success, within the limits of the stockholder approved Executive Incentive Plan. Based on the Company’s
achievement against the financial targets set at the beginning of the fiscal year, Ms. Bartz received a bonus of
$1,700,000 for fiscal year 2006. In recognition of her contribution to Autodesk’s performance, Ms. Bartz was
granted options to buy an aggregate of 500,000 shares of Autodesk stock during fiscal year 2006. Ms. Bartz is
one of the executive officers of the Company covered by the stock ownership guidelines established in December
2004. We believe it is critical to the Company’s long-term success to continue to tie our Chief Executive Officer’s
financial incentives to our performance and to align individual financial interests with those of stockholders.
In accordance with our Corporate Governance Guidelines, which were adopted by the Board of Directors
in December 1995, the Compensation and Human Resources Committee consults with the full Board of Directors
in executive session prior to finalizing Ms. Bartz’s base salary, incentive compensation payout for the prior year,
incentive compensation targets for the current year and stock option grants.
Proxy Materials
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