SanDisk 2011 Annual Report Download - page 22

Chief Executive Officer and Executive Vice President, Administration and Chief Financial Officer, no other
executive officer currently has a role in determining or recommending the form or amount of compensation paid
to the executive officers, other than providing financial and other information requested by the Compensation
Committee from time to time. The performance of each executive officer is reviewed annually by the
Compensation Committee based on whether various performance objectives were met during the preceding
review period. Each executive officer is given a performance rating based on such review that is presented to the
Compensation Committee and used in the Compensation Committee’s review and analysis of such executive
officer’s overall compensation.
The Board has delegated concurrent authority to the Compensation Committee and a committee that may
consist of one or more Directors (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 Exchange Act (the “Section 16
officers”). The Special Option Committee may not grant share-based awards to Directors. In fiscal 2011, the
Special Option Committee consisted of Mr. Mehrotra. The Board has also delegated authority to a Secondary
Executive Committee to grant stock options (but not stock units or other equity awards) to non-Section 16
officers and non-Directors. The Secondary Executive Committee may be comprised of one or more officers of
the Company. Concurrent with Mr. Mehrotra’s appointment to the Special Option Committee in July 2010,
Mr. Mehrotra resigned from the Secondary Executive Committee. In fiscal 2011, the Secondary Executive
Committee consisted of Judy Bruner, the Company’s Executive Vice President, Administration and Chief
Financial Officer, and James F. Brelsford, the Company’s Chief Legal Officer and Senior Vice President of IP
Licensing, who was appointed to the Secondary Executive Committee in March 2011. Share-based awards to the
Section 16 officers are made exclusively by the Compensation Committee.
Independent Compensation Consultant. Pursuant to its charter, the Compensation Committee has the
power, in its discretion, to retain at the Company’s expense, independent counsel and other advisors and experts
as it deems necessary or appropriate to carry out the Compensation Committee’s duties. Under its charter, the
Compensation Committee has the express authority to decide whether to retain a compensation consultant to
assist in the evaluation of the Company’s compensation programs. If the Compensation Committee decides, in its
discretion, to retain a compensation consultant, the Board delegates to the Compensation Committee the sole
authority to retain and terminate such consultant engaged to assist in the evaluation of the compensation of the
Company’s executive officers (including all of the Named Executive Officers, as defined below in
“Compensation Discussion and Analysis”). In fiscal 2011, the Compensation Committee did not retain any
outside compensation consultants. From time to time, management has retained and consulted with its own
outside advisors, including compensation consultants, to assist in analyzing the Company’s peer companies and
preparing recommendations to the Compensation Committee regarding compensation programs and levels.
Compensation Committee Interlocks and Insider Participation. No current member of the Compensation
Committee is a current or former executive officer or employee of the Company or had any relationships
requiring disclosure by the Company under the SEC’s rules requiring disclosure of certain relationships and
related-party transactions. None of the Company’s executive officers served as a director or a member of a
compensation committee (or other committee serving an equivalent function) of any other entity, the executive
officers of which served as a Director or member of the Compensation Committee during the fiscal year ended
January 1, 2012.
Analysis of Risk in Compensation Programs. In setting compensation, the Compensation Committee also
considers the risks to the Company’s stockholders, and the Company as a whole, arising out of the Company’s
compensation programs. In March 2012, the Company’s management met with the Company’s external legal
counsel to discuss and assess the risk profile of the Company’s compensation programs. Their review considered
risk-influencing characteristics of the overall structure and individual components of the Company’s
compensation program, including the Company’s base salaries, incentive plans and equity plans. A report
regarding management’s findings was provided to the Compensation Committee for its review and consideration.
Following this review and consideration, the Compensation Committee concurred with management’s
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