NVIDIA 2015 Annual Report Download - page 54

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How We Determine Executive Compensation
Role of Our CC, Compensation Consultants, and Management
Our CC meets periodically on a regular schedule throughout the fiscal year to manage our executive compensation
program. Our CC determines the principal components of compensation for our NEOs on an annual basis, typically at the
beginning of each fiscal year. Our CC then meets again mid-year in preparation for the portion of the RSUs that typically
are made in September of each year, and has the opportunity to review and revise equity compensation guidelines at that
time. The CC makes all determinations of the compensation that we pay to our NEOs.
During Fiscal 2015, our CC continued to use Exequity as its independent compensation consultant. Our CC originally
retained Exequity in 2010 after considering a number of other candidates. Our CC selected and continues to use Exequity
for its experiences working with compensation committees at other technology companies, the experience of the senior
consultant at Exequity with our compensation structure and the availability of Exequity to attend CC meetings.
During Fiscal 2015, our CC analyzed whether the work of Exequity as a compensation consultant raised any conflict
of interest, taking into consideration the following factors: (i) the fact that Exequity does not provide any services directly
to NVIDIA (although NVIDIA does pay the cost of Exequity’s services on behalf of the CC); (ii) the amount of fees paid
to Exequity by NVIDIA as a percentage of Exequity’s total revenue; (iii) Exequity’s policies and procedures that are designed
to prevent conflicts of interest; (iv) any business or personal relationship of Exequity or the individual compensation advisors
employed by Exequity with an NEO; (v) any business or personal relationship of the individual compensation advisors with
any member of our CC; and (vi) any NVIDIA stock owned by Exequity or the individual compensation advisors employed
by Exequity. Based on its analysis of these factors, our CC determined that the work of Exequity and the individual
compensation advisors employed by Exequity does not create any conflict of interest.
Exequity reports directly to our CC, advising our CC on all material matters relating to executive and non-employee
director compensation. Exequity took its direction from our CC 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 CC with decisions in
February and March 2014. The data that management gathered was from the Radford Global Technology Survey based on
parameters established by our CC.
Exequity provided our CC with the following services in Fiscal 2015: (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 CC regarding base salary, variable cash compensation and
equity grant levels for our CEO; (iv) advised the CC on initial equity grants to new non-employee directors; (vi) reviewed
and provided feedback on our compensation risk analysis; and (vii) reviewed this CD&A.
With respect to compensation for our CEO, at the beginning of the fiscal year, our CC, 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. In setting compensation for our NEOs (other than the CEO), our CC solicits
the input of our CEO, who recommends to our CC the salary, target variable incentive compensation and equity-based
compensation to be awarded to our NEOs for the new fiscal year. Our CC remains solely responsible for making the final
decisions on compensation for our NEOs, including our CEO. No NEO 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.