NVIDIA 2015 Annual Report Download - page 60

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(2) Represents cash payable upon achievement of Target performance under our Variable Cash Plan. Based on our Non-GAAP Operating
Income achievement at Maximum performance, Ms. Shoquist earned a maximum award of $300,000.
(3) Based on the target aggregate fair value of equity awards at the time of CC approval.
(4) Target equity opportunity was $1.4 million (87,000 shares), set based on Ms. Shoquist’s increasing responsibilities, market data,
overall CC objectives and internal pay equity. 40% of target shares (or 35,000 shares) were allocated to RSUs and 60% of target
shares (or 52,000 shares) were allocated to PSUs (where 13,000 shares were eligible to vest upon Threshold performance and 104,000
shares were eligible to vest upon Maximum performance). Based on our Non-GAAP Operating Income achievement at Maximum
performance, 200% of the target PSUs (or 104,000 shares) became eligible to vest over a four year period beginning on the date of
grant (with 25% vesting on March 18, 2015).
(5) Market position of target total compensation was slightly above 75th percentile among peer operations executives which the CC
determined to be appropriate based on Ms. Shoquist’s expanding responsibilities, impact on Company results and internal pay equity
with other NEOs.
Additional Executive Compensation Practices, Policies and Procedures
Compensation Recovery Policy
In April 2009, our Board adopted a Compensation Recovery Policy which covers all of our employees. Under this
policy, if we are required to prepare an accounting restatement to correct an accounting error on an interim or annual financial
statement included in a report on Form 10-Q or Form 10-K due to material noncompliance with any financial reporting
requirement under the federal securities laws, or a Restatement, and if the Board or a committee of independent directors
concludes that our CEO, CFO or any other officer or employee received a variable compensation payment that would not
have been payable if the original interim or annual financial statements reflected the Restatement, then under the
Compensation Recovery Policy:
• Our CEO and CFO will be required to disgorge the net after-tax amount of that portion of the variable compensation
payment that would not have been payable if the original interim or annual financial statements reflected the
Restatement; and
• The Board or the committee of independent directors may require any other officer or employee to repay all (or a
portion of) the variable compensation payment that would not have been payable if the original interim or annual
financial statements reflected the Restatement, as determined by the Board or such committee in its sole discretion.
In using its discretion, the Board or the independent committee may consider whether such person was involved
in the preparation of our financial statements or otherwise caused the need for the Restatement and may, to the
extent permitted by applicable law, recoup amounts by (1) requiring partial or full repayment by such person of
any variable or incentive compensation or any gains realized on the exercise of stock options or on the open-market
sale of vested shares, (2) canceling (in full or in part) any outstanding equity awards held by such person and/or
(3) adjusting the future compensation of such person.
We will review and update the Compensation Recovery Policy as necessary for compliance with the clawback policy
provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act when the final regulations related to that
policy are issued.
Tax and Accounting Implications
Section 162(m) of the Internal Revenue Code limits the amount that we may deduct from our federal income taxes for
remuneration paid to our CEO and three most highly compensated executive officers (other than our CFO) to $1 million
per person covered per year, unless certain requirements are met. Section 162(m) of the Internal Revenue Code provides
an exception from this deduction limitation for certain forms of “performance-based compensation”. While our CC is
mindful of the benefit to NVIDIA’s performance of full deductibility of compensation, our CC believes that it should not
be constrained by the requirements of Section 162(m) of the Internal Revenue Code where those requirements would impair