Autodesk 2015 Annual Report Download - page 53

2015 Proxy Statement 47
Base Salary
Base salary is used to provide the executive officers with a fixed amount of annual cash compensation. The Committee views
base salary as a reliable source of income for the executive officers and an important recruiting and retention tool. The
Committee sets base salaries at a competitive level that recognizes the scope, responsibility, and skills required of each position,
as well as market conditions and internal pay equity.
In March 2014, the Committee considered an analysis of the base salary for each role, the CEO’s assessment of each executive
officer’s experience, skills and performance level, and Autodesk’s performance. For the CEO, the Committee consulted the full
Board to conduct a similar assessment of his experience, skills and performance. Based on those factors, the executive officers’
base salaries were increased by approximately 3% to 4% for fiscal 2015.
Annual Short-Term Incentive Compensation
At the beginning of each fiscal year, the Committee establishes target award opportunities, payout metrics and performance
targets for the annual cash incentive plans. These plans are intended to motivate and reward participants for achieving
company-wide annual financial and non-financial objectives as well as individual objectives.
Target Award Opportunities
The Committee sets the target annual cash incentive award opportunity for each eligible executive officer based on competitive
assessments, the executive’s particular role, and internal parity considerations. Based on the Committee’s review of these
factors, the Committee set the fiscal 2015 cash incentive target for each of the NEOs at the same percentage as it was in fiscal
2014. These target opportunities are expressed as a percentage of the executive officer’s annualized base salary, and range from
50% for Mr. Blum (who also is eligible for commission payments) to 125% for Mr. Bass. An executive officer may receive an
actual award that is greater or less than the target award opportunity, depending upon Autodesk’s performance.
Executive Incentive Plan
In fiscal 2015, bonus awards for each of our NEOs were funded under the Autodesk, Inc. Executive Incentive Plan (“Fiscal
2015 EIP”). Cash bonuses under this plan are generally intended to qualify as tax deductible “performance-based
compensation” to the extent allowed under Section 162(m) of the Internal Revenue Code. At the beginning of the fiscal year,
the Committee established funding performance thresholds, which, if achieved, would establish maximum Fiscal 2015 EIP
funding at 190% of target. For fiscal 2015, the Committee selected revenue, cash flow from operating activities, and absolute
TSR as the funding performance metrics. Autodesk’s fiscal 2015 revenue of $2.5 billion, cash flow from operating activities of
$708 million, and TSR of 9.9% (based on a 31-day average stock price at the beginning and at the end of fiscal 2015) exceeded
the funding thresholds, resulting in the maximum bonus award funding for each executive. The Committee then exercised its
negative discretion to reduce the actual bonus awards for each of the participants based on pre-established performance
measures (as described below).
Company Performance Measures and Performance
At the beginning of fiscal 2015, the Committee approved Fiscal 2015 EIP performance measures to align our NEOs’ bonus
opportunities with the Company’s strategic priorities of increasing subscriptions, billings and deferred revenue. In its exercise
of negative discretion, the Committee considered the performance attainment versus specific targets to determine payouts. For
the CEO, the Committee assessed the financial and operational performance of the Company based 56% on billings, 24% on
subscriptions, and 20% on deferred revenue against targets set at the beginning of the fiscal year; award could be from 0% to
150% of target, depending on achieved performance level. This yielded a bonus payout of 108.7% of target, as shown below:
Weighting Actual Target Payout Multiplier
Billings 56% 18.1% growth 8.6% growth 108.7%
Subscriptions 24% 2.23 million 2.08 million 107.5%
Deferred Revenue 20% $1.16 billion $1.05 billion 110.1%
Total 100% 108.7%
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