SanDisk 2010 Annual Report Download - page 50

PROPOSAL NO. 5
ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION OF SANDISK
CORPORATION “SAY ON PAY”
The Company is asking stockholders to approve an advisory resolution on the Company’s compensation of
its Named Executive Officers as reported in this Proxy Statement. As described below in the “Compensation
Discussion and Analysis” section of this Proxy Statement, the Compensation Committee has designed the
Company’s compensation of its Named Executive Officers to align each Named Executive Officer’s
compensation with the Company’s short-term and long-term performance and to provide the compensation and
incentives needed to attract, motivate and retain the Named Executive Officers, who are crucial to the
Company’s long-term success. You are urged to read the “Compensation Discussion and Analysis,” which
describes in more detail the Company’s executive compensation policies, as well as the Summary Compensation
Table and other related compensation tables and narrative, which provide detailed information on the
compensation of the Company’s Named Executive Officers.
The Company’s compensation programs reflect the Company’s continued commitment to
pay-for-performance, with a substantial portion of each Named Executive Officer’s compensation being at-risk
and subject to important performance measures aligned with long-term stockholder value. During 2010, a
significant percentage of each Named Executive Officer’s total compensation (as reported in the summary
compensation table) was at-risk, being comprised of performance-based cash bonus opportunities, performance-
based restricted stock units, and at-the-money stock options, which become valuable to the executive only upon
realized share appreciation. The Compensation Committee sets a significant portion of the compensation of the
Named Executive Officers based on their ability to achieve annual operational objectives that advance the
Company’s long-term business objectives and that are designed to create sustainable long-term stockholder value
in a cost-effective manner. The Company’s performance-based compensation elements are guided by the
Committee’s long-term objectives of maintaining market competitiveness and retention value. In addition, the
Company continues to be committed to good compensation governance practices. The Compensation Committee
believes that the compensation arrangements for Named Executive Officers are consistent with market practice
and provide for compensation that is reasonable in light of the Company’s and each individual officer’s
performance. Moreover, the Compensation Committee does not provide for egregious pay practices, such as
excessive perquisites or tax “gross up” payments as elements of Named Executive Officers’ compensation. The
detailed ways in which the Company links pay with Company and individual performance and structures the
Named Executive Officer compensation arrangements consistent with good governance practices is described in
the “Compensation Discussion and Analysis” section below.
The advisory resolution, commonly known as a “say-on-pay” proposal, gives stockholders the opportunity
to express their views on the Company’s Named Executive Officers’ compensation. This vote is not intended to
address any specific item of compensation, but rather the overall compensation of the Company’s Named
Executive Officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly,
you are being asked to vote on the following resolution at the Annual Meeting:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the
Named Executive Officers, as disclosed in the Company’s Proxy Statement for the 2011 Annual Meeting of
Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission,
including the Compensation Discussion and Analysis, the 2010 Summary Compensation Table and the other
related tables and disclosure.”
38