Autodesk 2010 Annual Report Download - page 42

impairment charges. We believe that the use of a non-GAAP operating margin rather than a GAAP operating
margin focuses our executive officers on the on-going operations of our business and encourages long-term
growth strategies such as acquisitions and in-process research and development investments.
Elements of EIP performance criteria include financial performance targets and individual performance. All
participants share the same financial performance goals, which are focused on annual revenue growth and
profitability, as described in greater detail below. All participants also have annual non-financial unique
individual performance goals that consist of specific business objectives and management effectiveness goals.
Although the financial performance targets are objective and quantitative, the individual performance goals are
subjective, qualitative and permit the Compensation Committee to use discretion in determining the success of
these criteria.
For fiscal 2010, the Compensation Committee set financial performance targets that increased funding with
an increase of revenue and non-GAAP operating margin. For each of the first and second halves of fiscal 2010
the following represents funding at two financial performance levels. Anything below the “Baseline
Performance” target would have resulted in less than 65% funding, and anything above the “Stretch
Performance” target would have resulted in more than 100% funding.
First Half of Fiscal 2010 Targets (“Baseline Performance”—funding at 65% of target funding)
• Revenue: $840 million
• Non-GAAP Operating Margin: 12.4%
First Half of Fiscal 2010 Targets (“Stretch Performance”—funding at 100% of target funding)
• Revenue: $840 million
• Non-GAAP Operating Margin: 16.0%
Second Half of Fiscal 2010 Targets (“Baseline Performance”—funding at 65% of target funding)
• Revenue: $860 million
• Non-GAAP Operating Margin: 17.6%
Second Half of Fiscal 2010 Targets (“Stretch Performance”—funding at 100% of target funding )
• Revenue: $860 million
• Non-GAAP Operating Margin: 22.0%
The Compensation Committee also set target award amounts for each eligible participant.
For the first half of fiscal 2010, the Company’s revenue was approximately $841 million and non-GAAP
operating margin was approximately 14%. For the second half of fiscal 2010, the Company’s revenue was
approximately $873 million and non-GAAP operating margin was approximately 19%. The achievement of these
financial targets resulted in an overall annual bonus funding at 82% of the otherwise target bonuses which are
described below. In addition, the Compensation Committee increased such amount by 8% in recognition of a
challenging fiscal year that required a significant commitment from its executive officers and employee base, and
an increasingly stabilizing business as the year progressed.
For fiscal 2010, the Compensation Committee assessed each participant’s individual goals, including
management effectiveness and achievement of developmental goals, as well as organizational goals. Based on
these factors, including the financial performance targets outline above, a participant may receive an actual bonus
that is larger or smaller than his or her target award amount, or may receive no bonus whatsoever. The actual
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