SanDisk 2009 Annual Report Download - page 36

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COMPENSATION DISCUSSION AND ANALYSIS
This section contains a discussion of the material elements of compensation awarded to, earned by or paid to
the principal executive and principal financial officers of the Company and our two other most highly
compensated individuals who were serving as executive officers as of the last day of the fiscal year ending
January 3, 2010 (referred to herein as “fiscal 2009”). These individuals are referred to as the “Named Executive
Officers” in this Proxy Statement.
The Company’s current executive compensation programs are determined and approved by the
Compensation Committee of the Board. None of the Named Executive Officers is a member of the
Compensation Committee. As contemplated by the Charter of the Compensation Committee, the Company’s
Chief Executive Officer recommends to the Compensation Committee the base salary, annual bonus and long-
term equity compensation levels for the other Named Executive Officers. Our President and Chief Operating
Officer assists the Chief Executive Officer in reviewing performance and formulating recommendations to the
Compensation Committee. Our other executive officers, including the other Named Executive Officers, do not
have any role in determining or recommending the form or amount of compensation paid to our Named
Executive Officers other than providing such financial or other information as the Compensation Committee may
request from time to time.
Executive Compensation Program Objectives and Overview
The Company’s current executive compensation programs are intended to achieve three fundamental
objectives: (1) attract, retain and motivate qualified executives; (2) hold executives accountable for performance;
and (3) align executives’ interests with the interests of our stockholders. In structuring our current executive
compensation programs, we are guided by the following basic philosophies:
•Competition. The Company should provide competitive compensation opportunities so that we can
attract, retain and motivate qualified executives.
•Alignment with Stockholder Interests. A substantial portion of compensation should be contingent on
the Company’s performance. As an executive officer’s level of responsibility increases, a greater
portion of the officer’s total compensation should be dependent on the Company’s performance and
stock price appreciation.
•Pay for Performance. A substantial portion of compensation should be tied to Company and individual
performance.
As described in more detail below, the material elements of our current executive compensation program for
Named Executive Officers include a base salary, an annual cash incentive opportunity, a long-term share-based
incentive opportunity, 401(k) retirement benefits and severance protection for certain actual or constructive
terminations of the Named Executive Officers’ employment.
We believe that each element of our executive compensation program helps us to achieve one or more of
our compensation objectives. The table below lists each material element of our executive compensation program
and the compensation objective or objectives that it is designed to achieve.
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