SanDisk 2011 Annual Report Download - page 42

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Executive Compensation Program Objectives and Overview
In structuring the Company’s current executive compensation programs, the Company is guided by the
following basic philosophies:
•Competition. The Company should provide competitive compensation opportunities so that the
Company can attract, retain and motivate qualified executive officers.
•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 executive 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 the Company’s current executive compensation
program for the executive officers include the following: a base salary, an annual cash incentive opportunity, a
long-term share-based incentive opportunity, 401(k) retirement benefits and severance protection for certain
terminations of employment. These individual compensation elements are intended to create a total compensation
package for the executive officers that the Company believes achieves its compensation objectives and provides
competitive compensation opportunities.
The Company’s current executive compensation program is intended to achieve three fundamental
objectives: (1) attract, retain and motivate qualified executive officers; (2) hold executive officers accountable for
their performance; and (3) align executive officers’ interests with the interests of the Company’s stockholders.
The Company believes that each element of its executive compensation program helps the Company to achieve
one or more of its compensation objectives. The table below lists each material element of the Company’s
executive compensation program and the compensation objective or objectives that it is designed to achieve.
Compensation Element Compensation Objectives Designed to be Achieved
Base Salary • Attract, retain and motivate qualified executive
officers
Annual Cash Incentive Opportunity • Hold executive officers accountable for
performance
• Align executive officers’ interests with those of
stockholders
• Attract, retain and motivate qualified executive
officers
Long-Term Share-Based Incentives • Align executive officers’ interests with those of
stockholders
• Hold executive officers accountable for
performance
• Attract, retain and motivate qualified executive
officers
401(k) Retirement Benefits • Attract, retain and motivate qualified executive
officers
Severance and Other Benefits Upon Termination of
Employment in Certain Circumstances
• Attract, retain and motivate qualified executive
officers
30