Autodesk 2013 Annual Report Download - page 49

2013 Proxy Statement 41
to purchase shares of Common Stock or by purchasing
shares of Common Stock in the open market or through the
Autodesk, Inc. Employee Qualified Stock Purchase Plan.
For purposes of satisfying the required stock ownership
level, both vested and unvested shares of restricted stock
and shares of Common Stock subject to outstanding RSU
awards are counted as owned.
As of the end of fiscal 2013, each of the Named Executive
Officers satisfied the mandatory stock ownership
guidelines.
Compensation Recovery Policy
Autodesk has not yet implemented a policy regarding
retroactive adjustments to any cash or equity-based
incentive compensation paid to executive officers and other
employees where the payments were predicated upon the
achievement of financial results that were subsequently the
subject of a financial restatement. The Board intends to
adopt a general compensation recovery, or clawback,
policy covering annual and long-term incentive award
plans and arrangements once the SEC adopts final rules
implementing the requirement of Section 954 of the Dodd-
Frank Wall Street Reform and Consumer Protection Act.
Derivatives Trading and Hedging Policy
Executive officers, members of the Board, and all other
employees are prohibited from investing in derivative
securities related to Autodesk's Common Stock and
engaging in short sales or other short-position transactions
in shares of Autodesk's Common Stock. This policy does
not restrict ownership of company-granted awards, such as
options to purchase shares of Common Stock or PSU or
RSU awards, which have been granted by the Committee.
Autodesk's insider trading policy prohibits the trading of
derivatives or the hedging of Autodesk's common equity
securities by all employees, including the executive
officers, and members of the Board.
Equity Award Grant Policy
All equity awards granted to the executive officers are
approved by the Committee. Approval of the annual equity
awards for the executive officers occurs at the
Committee's regularly-scheduled quarterly meetings.
Regulatory Considerations and Practices
Autodesk continuously reviews and evaluates the impact of
the tax laws and accounting practices and related
interpretations on the executive compensation program.
For example, the Committee considers Financial
Accounting Standards Board Accounting Standards
Codification Topic 718 (“ASC Topic 718”), which results
in recognition of compensation expense for share-based
payment awards, and Section 409A of the Internal Revenue
Code (“Code”), which impacts deferred compensation
arrangements, as it evaluates, structures, and implements
changes to the program.
Deductibility Limitation
Section 162(m) of the Code generally limits the amount of
remuneration that a company may deduct for federal
income tax purposes in any taxable year with respect to the
CEO and each of the next three most highly-compensated
executive officers (excluding the chief financial officer) to
$1 million. Generally, remuneration in excess of $1
million may only be deducted if it is “performance-based
compensation” within the meaning of the Code or satisfies
the conditions of another exemption from the deduction
limit. The compensation income realized upon the exercise
of options to purchase shares of Common Stock granted
under a stockholder-approved employee stock plan
generally will be deductible so long as the options are
granted by a committee whose members are non-employee
directors and certain other conditions are satisfied.
The Autodesk Executive Incentive Plan and the 2012
Employee Stock Plan are structured with the intention that
awards granted under these plans could qualify for tax
deductibility. However, to maintain flexibility and
promote simplicity in the administration of these
arrangements, other compensation that may be awarded
under these plans, such as annual incentive cash payments
and PSU and RSU awards, are sometimes not designed to
qualify for tax deductibility under the Code.
Further, while mindful of the benefit of full deductibility of
the remuneration paid to senior executive officers, the
Committee believes that Autodesk should not be
constrained by the requirements of Section 162(m) where
those requirements would impair flexibility in
compensating the executive officers in a manner that can
best promote Autodesk's objectives, which aligns the
executive officers' interests with the stockholders' interests.
Therefore, Autodesk has not adopted a policy that requires
all compensation to be deductible. The Committee intends
to continue to compensate the executive officers in a
manner consistent with Autodesk's best interests and the
best interests of the stockholders.
Taxation of Deferred Compensation
Section 409A of the Code imposes significant additional
taxes in the event an executive officer, director, or service
provider receives “deferred compensation” that does not
satisfy the restrictive conditions of the provision. Section
409A applies to a wide range of compensation
arrangements, including traditional nonqualified deferred
compensation plans, certain equity awards, and severance
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