NVIDIA 2013 Annual Report Download - page 54

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Exequity reports directly to our Compensation Committee, advising our Compensation Committee on all material
matters relating to executive and non-employee director compensation. Exequity took its direction from our Compensation
Committee Chairman and interacted with management (our CEO and legal and human resources departments), as needed,
to understand management proposals and financial objectives and to obtain compensation data that management gathered
for our peer group of companies to assist our Compensation Committee with decisions in February and March 2013. The
data that management gathered was from the Radford Global Technology Survey based on parameters established by our
Compensation Committee, which were to provide benchmark data at the 25th, 50th and 75th percentiles for each executive
officer using our peer group described below under the section Peer Companies and Market Compensation Data.
Exequity provided our Compensation Committee with the following services in fiscal year 2014: (i) reviewed and
provided recommendations on the composition of our peer group; (ii) analyzed the Radford survey data; (iii) conducted an
independent analysis and review of the compensation arrangements for our CEO and advised our Compensation Committee
regarding base salary, variable cash compensation and equity grant levels for our CEO; (iv) reviewed market and peer group
compensation data for chief financial officers and reviewed recommendations to our Compensation Committee regarding
an appropriate compensation package for our new CFO, consisting of annual base salary, variable cash compensation and
certain one-time payments and equity grants; (v) conducted an independent analysis and review of the compensation structure
for non-employee directors; (vi) reviewed and provided feedback on our compensation risk analysis; and (vii) reviewed the
Compensation Discussion and Analysis included in this proxy statement.
With respect to compensation for our CEO, at the beginning of the fiscal year, our Compensation Committee, working
directly with Exequity and without the presence of our CEO, deliberates and makes decisions regarding the salary, variable
incentive compensation level and equity-based compensation opportunity to be awarded to our CEO for the new fiscal year,
as well as variable compensation payouts for the prior fiscal year. Our Compensation Committee reviews and approves the
written individual performance goals for our CEO at that time. Our Compensation Committee evaluates the CEO’s
performance at the end of the fiscal year taking into account a self-assessment prepared by the CEO and our Compensation
Committee’s own evaluation of the results achieved by our CEO as compared to goals established at the beginning of the
fiscal year, as discussed further under the section Elements of Compensation-Variable Cash Compensation below.
In setting compensation for our executive officers (other than the CEO and our new CFO, who was appointed in
September 2013), our Compensation Committee solicits the input of our CEO, who recommends to our Compensation
Committee the salary, target variable incentive compensation and equity-based compensation to be awarded to our executive
officers for the new fiscal year. Our CEO also recommends, subject to the approval of our Compensation Committee, the
individual performance goals for our executive officers under the variable incentive compensation plan, as described below.
The CEO evaluates the performance of the other executive officers at the end of the fiscal year and makes recommendations
on variable compensation payouts for that fiscal year. Our Compensation Committee gives considerable weight to our
CEO’s evaluations because of his direct knowledge of each executive officer’s performance and contributions to the
Company.
Our Compensation Committee remains solely responsible for making the final decisions on compensation for our
executive officers, including our CEO. No executive officer is present during discussions of his or her compensation package
or participates directly in approving the amount of any component of his or her own compensation package.
Factors Used in Determining Executive Compensation
In any given year, when establishing the elements of executive compensation, our Compensation Committee may take
into consideration one or more of the following factors: (i) the philosophy that the total compensation opportunity and the
percentage of total compensation “at risk” should increase with the level of responsibility-for example, because the CEO
has overall responsibility for our entire company, his total compensation opportunity is significantly greater, as is his
percentage of performance-based compensation; (ii) internal pay equity-that is, we assess an executive officer’s
responsibilities, the scope of the executive officer’s position and the complexity of the department or function the executive
officer manages, relative to the executive officer’s internal peers, and set compensation levels within a relatively narrow
band for comparably situated executives; (iii) the Company’s performance, operating budget and expected financial