SanDisk 2006 Annual Report Download - page 14

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Compensation Committee
The Compensation Committee of the Board of Directors is responsible for establishing and governing the
compensation and benefit practices of the Company. The Compensation Committee consists of Directors Feder-
man, Marks and Meindl. The Compensation Committee establishes the general compensation policies of the
Company, reviews and approves compensation of the executive officers of the Company and oversees all of the
Company’s employee benefit plans. The Compensation Committee Charter, which was adopted by the Board of
Directors in February 2003 and was amended in February 2007, requires that the Compensation Committee consist
of no fewer than two (2) Board members who satisfy the independence requirements of NASDAQ and applicable
law. At all times during fiscal 2006, the Compensation Committee consisted of at least two (2) Board members, each
of whom the Board has affirmatively determined satisfies these independence requirements.
The Compensation Committee Charter sets forth the purpose of and other matters pertaining to the Com-
pensation Committee. The Compensation Committee Charter is available through the Investor Relations section of
the Company’s website at www.sandisk.com. Pursuant to its Charter, the Compensation Committee’s responsi-
bilities include the following:
• review and approve the corporate goals and objectives relevant to the compensation of the Chief Executive
Officer and, in consultation with the Chief Executive Officer, other executive officers;
• evaluate the Chief Executive Officer’s performance (and, in consultation with the Chief Executive Officer,
the other executive officers’ performance) in light of such goals and objectives;
• set officers’ compensation levels based on such evaluation and other factors deemed appropriate, including
the Company’s performance and relative stockholder return, the value of incentive awards to executive
officers at comparable companies and the awards given to the Company’s officers in past years;
• review and approve significant employment, separation, severance and other contracts having any com-
pensatory effect or purpose;
• review and assist the Board in developing succession plans for executive officers;
• review and recommend to the Board appropriate director compensation programs for non-employee
directors;
• develop and periodically assess the Compensation Committee’s compensation policies;
• approve stock option grants and other share-based or incentive awards;
• have sole authority to retain and terminate any compensation consulting firm used to evaluate executive or
director compensation, including to approve the consulting firm’s fees and other retention terms;
• timely review and approve the disclosures on executive compensation and prepare a report to the Board
recommending that such disclosure be included in the Company’s annual proxy statement; and
• perform any other activities consistent with the Charter.
Our Chief Executive Officer recommends to the Compensation Committee salary, annual bonus and long-term
compensation levels for less senior officers, including the other Named Executive Officers (as defined below under
“Compensation Discussion and Analysis”), in accordance with the Compensation Committee Charter. Our
President and Chief Operating Officer assists the Chief Executive Officer in reviewing performance and formu-
lating these recommendations to the Compensation Committee. Other Named Executive Officers, including our
Chief Financial Officer, provide financial and other information to the Compensation Committee to assist in
determining appropriate compensation levels. Our other executive officers, including the other Named Executive
Officers, do not currently have any role in determining or recommending the form or amount of compensation paid
to our Named Executive Officers and our other senior executive officers.
The Board has delegated concurrent authority to the Compensation Committee and the Special Option
Committee to grant share-based awards (including stock options and stock units) to employees who are not subject
to Section 16 of the Securities Exchange Act of 1934, as amended (“Section 16 officers”). The Special Option
Proxy Statement
7