Autodesk 2011 Annual Report Download - page 37

As noted above, on December 14, 2010, Mr. Bado announced his intention to resign as our Executive Vice
President, Sales and Services. In connection with Mr. Bado’s resignation, we entered into a Separation
Agreement with Mr. Bado on January 28, 2011. A description of the Separation Agreement is found in
“Executive Compensation—Change in Control Arrangements and Employment Agreements,” below.
Long-term Incentives—Equity-based Compensation
In determining actual grants of stock options and restricted stock units to executive officers, the
Compensation Committee considers several factors, including the unvested option and restricted stock unit
position of each executive officer, the value of those options and restricted stock units compared to other
Company executive officers, the mix of incentives between options and restricted stock units, competitive pay
practices within our peer group and the individual performance of the executive officer.
The Compensation Committee uses “new hire,” “promotion,” and “ongoing” stock grant guidelines in
determining the appropriate size of grants. The stock grant guidelines reflect the range of typical competitive
practices of our peer group. The Compensation Committee has authority to exceed these guidelines within the
limits prescribed under the stock plan approved by stockholders. The current stock plan limits any individual
option grant to 1,500,000 shares and any restricted stock grant (including restricted stock units) to 300,000
shares, except grants to individuals in their first fiscal year of service. In that case, the limit is 3,000,000 shares
for an option grant, and 600,000 shares for a restricted stock awards (including restricted stock units).
All equity grants to executive officers are made by the Compensation Committee. Approval of annual equity
grants for executive officers occur at regularly scheduled quarterly meetings of the Compensation Committee.
Historically, the Compensation Committee has approved equity grants to newly-hired executive officers at
its first quarterly meeting following the executive officer’s hire date, although the Compensation Committee may
also approve equity grants to newly-hired executive officers at the Compensation Committee meeting at which
the appointment of the new executive officer is approved. The Compensation Committee also approves
promotion grants at the Compensation Committee meeting at which the promotion is approved, or at the next
quarterly Compensation Committee meeting following the promotion.
Although long-term incentives through equity awards represented a significant portion of most of our
Named Executive Officers’ total fiscal 2011 compensation, it represents a variable component of compensation
for which full value may not be realized due to stock market conditions, availability of trading windows, vesting
conditions, expiration of the awards and the like.
Equity Incentive Deferral Plan. The Equity Incentive Deferral Plan (the “Deferral Plan”) encourages our
executive officers to maintain equity ownership in the Company, which we believe aligns the interests of our
executive officers with those of our stockholders. Under the Deferral Plan, eligible executive officers, including
certain Named Executive Officers, may elect to defer up to 50% of their cash incentive award earned under the
short-term cash incentive plan, and have any such deferred amounts granted in the form of restricted stock units
(the “Base RSUs”). The Base RSUs are fully vested as of the date of grant and have a distribution date on or
about the third anniversary of the grant date. As an incentive for participating in the Deferral Plan, for every three
Base RSUs purchased by a participating executive, the Company issues one additional restricted stock unit (the
“Premium RSUs”). The Premium RSUs are granted with a vesting date and a distribution date on or about the
third anniversary of the grant date.
Executive officers may make an election to participate in the Deferral Plan no later than the end of the
calendar year immediately prior to the year in which such services are to be performed.
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