NVIDIA 2015 Annual Report Download - page 55

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Factors Used in Determining Executive Compensation
In any given year, when establishing the elements of executive compensation, our CC may take into consideration one
or more of the following factors. The relative weight, if any, given to each of the factors below varies with each individual
NEO and with respect to each element of compensation at the sole discretion of our CC.
Factors we Consider
The need to attract new talent to our executive team and retain
existing talent in a highly competitive industry The need to motivate NEOs to address particular business challenges that are unique to any given year
An NEO’s past performance and expected contribution to future
results A review of an NEO’s current total compensation
The Company’s performance, operating budget and expected
financial constraints Our CEO’s recommendations, because of his direct knowledge of the results delivered and leadership demonstrated by each NEO
The trends in compensation paid to similarly situated officers at
our peer companies The independent judgment of the members of our CC
The 25th, 50th and 75th percentiles of compensation paid to
similarly situated NEOs at our peer companies based on the the
data gathered from the Radford Global Technology Survey
The total compensation cost and stockholder dilution resulting
from executive compensation actions, as we believe this helps us
maintain a responsible cost structure for our compensation
programs*
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
Internal pay equity-that is, we assess an NEO’s responsibilities,
the scope of the NEO’s position and the complexity of the
department or function the NEO manages, relative to the NEO’s
internal peers, and set compensation levels within a relatively
narrow band for comparably situated executives
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* For a discussion of stock-based compensation cost, see Note 2 to our consolidated financial statements titled “Stock-Based Compensation” in our Form
10-K.
Peer Companies and Market Compensation Data
In late Fiscal 2014, Exequity and our human resources department recommended, and our CC approved, our peer
companies for Fiscal 2015 which are companies that (i) we generally think we compete with for executive talent, (ii) have
an established business, market presence, and complexity similar to us, and (iii) are of similar size to us as measured by
revenue (at roughly 0.5-2.0x NVIDIA) and market capitalizations (at roughly 0.5-3.5x NVIDIA). Our peer group for Fiscal
2015 remained the same as it was for Fiscal 2014. The median revenue and market capitalization for our peer group was
approximately $4.2 billion and $12.0 billion, respectively, which closely approximates our aggregate revenue of $4.1 billion
for Fiscal 2014 and market capitalization of approximately $9.0 billion in late Fiscal 2014.
Our CC reviews market practices for compensating our desired talent pool, including data from our peer group, for the
three major components of our compensation program and total target compensation. When reviewing and analyzing the
amount of each major component and the total compensation opportunity for our NEOs, our CC reviews each component
at the 25th, 50th and 75th percentiles for our peer companies for guidance. Our CC reviews these pay levels as reference
points in its overall decision making, as indicative of the level of compensation necessary to attract, retain and motivate our
NEOs. Our CC sets the actual amount of each element of compensation and the total compensation opportunity of each
NEO based in part on its review of peer group data and in part on the factors discussed above and below in Compensation
Actions for Fiscal 2015 in respect of actual decisions for Fiscal 2015.