Autodesk 2013 Annual Report Download - page 36

2013 Proxy Statement 28
Consistent with fiscal 2013 business results, the Committee took the following actions in March 2013:
Base Salary The base salaries for the CEO and other Named Executive Officers were increased by 4%. The Committee
made these increases to recognize the performance of the Named Executive Officers and to maintain the
desired balance in their compensation mix between cash and equity.
Annual Cash Incentive
Awards Annual cash incentive awards for fiscal 2013 were awarded based on fiscal 2013 achievement of financial performance targets established by the Committee under the Autodesk Incentive Plan. Through these pre-
established targets, the bonus pool was funded at 92.3% of the target annual cash incentive award opportunity
for the CEO and at 92.3% of the target annual cash incentive award opportunity for each of the other Named
Executive Officers, below fiscal 2012 levels. The decision to pay these amounts was based on the positive
relative TSR performance of Autodesk's stock despite Autodesk achieving below target internal financial
results. The percentage of target bonus attainment was based upon a predetermined formula blending the
lower than targeted revenue growth and the near targeted non-GAAP operating margin.
Equity Awards In March 2013, the Committee granted the Named Executive Officers equity awards in the form of
performance stock unit awards (60% for the CEO; 50% for the other NEOs) and time-based restricted stock
unit awards (40% for the CEO; 50% for the other NEOs). As described above, the value and earned amounts
of the performance stock unit awards will be contingent upon achievement of revenue growth and non-GAAP
operating margin performance targets and Autodesk relative TSR performance, aligning these awards with
the long-term interests of the stockholders.
In determining the size of these equity awards, the Committee considered the practices of the companies in
Autodesk's compensation peer group as well as the proper mix of cash and equity compensation to ensure
that the equity awards motivate long-term value creation while satisfying the Committee's retention
objectives. A significant influence on the size of these awards was the performance of the individuals in
attaining financial and non-financial performance targets for fiscal 2013.
In addition, in response to stockholder feedback, the Committee and the CEO agreed to amend a
performance-based restricted stock award previously granted to the CEO, discussed at page 38, to align the
performance metrics more closely with the interests of stockholders. Rather than use metrics relating to the
implementation of a strategic plan and talent management, the Committee and the CEO agreed to modify the
metrics and vesting criteria to match those used for the newly adopted performance-based stock program.
Fiscal 2012 Business Summary
Because several of the compensation elements contained in
the Summary Compensation Table for this Proxy Statement
relate to Autodesk's performance in fiscal 2012, summary
information about fiscal 2012 is presented here to provide
context regarding the relevant compensation decisions by
the Committee. In fiscal 2012, Autodesk successfully
executed on many of its most critical business objectives,
as reflected by strong absolute financial results:
• Revenue was $2.2 billion, an increase of 14%
compared to fiscal 2011 revenue of $2.0 billion.
• GAAP operating margin increased approximately 210
basis points to 16%, compared to 14% in fiscal 2011.
• Non-GAAP operating margin increased approximately
260 basis points to 24%, compared to 21% in fiscal
2011.*
• GAAP diluted EPS increased 36% to $1.22, compared
to $0.90 in fiscal 2011. Non-GAAP diluted EPS
increased 32% to $1.74, compared to $1.31 in fiscal
2011.*
• Despite these strong fiscal 2012 financial results,
Autodesk's stock declined 12% from the end of fiscal
2011 to the end of fiscal 2012.
________________
* A reconciliation of GAAP to non-GAAP financial
measures and other related information is available on pages
46-47 of Autodesk's Annual Report on Form 10-K for the
fiscal year ended January 31, 2013.
Executive Compensation Decisions for Fiscal 2012
Performance
In recognition of Autodesk's strong absolute financial
performance in fiscal 2012, in March 2012, the Committee
determined to reward the executive officers for their
effective management of the business. Given the greater
use of performance-based equity awards among the
companies in Autodesk's compensation peer group, the
Committee introduced the use of performance stock unit
awards for the executive officers. By doing so, the
Committee ensured that a majority of the long-term
compensation for the executive officers for fiscal 2012 was
performance-based. Base salaries were increased between
4% and 13% reflecting performance and competitive
practices, and actual cash incentive awards were
determined based on achievement of pre-established
performance targets for non-GAAP operating margin and
revenue growth. This compensation structure better