SanDisk 2011 Annual Report Download - page 46

of the Company. Key consideration was given by the Compensation Committee to the actions taken by the
Named Executive Officers to improve the Company’s financial results and financial condition and to achieve the
fiscal 2011 EPS goal and the strategic objectives with respect to the Company’s technology, products and
solutions and customers and channels. Based upon the actual achievement against the 2011 EPS goal and the
seven strategic objectives and the weighting of these objectives, the Compensation Committee approved cash
incentive awards above the target bonus levels for the Company’s employees, including its executive officers and
the Named Executive Officers. Similar to the employees of the Company, in determining the Named Executive
Officers’ fiscal 2011 cash incentive awards, the Compensation Committee considered individual performance.
The Compensation Committee determined that the actual cash incentive awards for fiscal 2011 for each Named
Executive Officer who was currently an employee of the Company should be as follows: $1,500,000 for
Mr. Mehrotra (150% of his target bonus); $735,400 for Ms. Bruner (151% of her target bonus); $360,000 for
Mr. Brelsford (131% of his target bonus); and $415,300 for Mr. Sadana (154% of his target bonus). In
connection with Mr. Cedar’s entry into a separation agreement with the Company in November 2011, the
Compensation Committee determined that Mr. Cedar should receive $436,500 (100% of his target bonus) under
the 2011 bonus program. These annual cash incentive awards earned by our Named Executive Officers for fiscal
2011 are also set forth in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation
Table.
Clawback Policy on Cash-Based Incentive Awards
The Section 16 officers, including the Named Executive Officers, are subject to the Company’s clawback
policy, effective as of September 9, 2011. The Company’s clawback policy provides that the Board may require
reimbursement or forfeiture of all or a portion of any cash-based incentive compensation paid to such individual
to the extent that (i) the Company’s financial statements are required to be restated as a result of material
non-compliance with any financial reporting requirements under the federal securities laws (other than a
restatement due to a change in financial accounting rules), (ii) as a result of such restatement, a performance
measure or specified performance target which was a material factor in determining the amount of cash-based
incentive compensation previously earned by the individual is restated, and (iii) upon a determination by the
Board, a lesser payment of cash-based incentive compensation would have been made to the individual based
upon the restated financial results.
Long-Term Share-Based Incentive Awards
The Company’s policy is that the long-term compensation of the executive officers, including the Named
Executive Officers, should be directly linked to the value provided to the Company’s stockholders. Therefore,
100% of the Named Executive Officers’ long-term compensation is currently awarded in the form of share-based
instruments that are in, or valued by reference, to Common Stock. The Company’s share-based awards have been
made in the form of stock options and restricted stock units, although the majority of these awards have
historically been stock options. The number of shares of Common Stock subject to each annual award is intended
to create a meaningful opportunity for stock ownership in light of the Named Executive Officer’s current position
with the Company, the economic value of comparable awards to comparable executive officers at the Company’s
peer companies, the individual’s potential for increased responsibility and promotion over the award term, and
the individual’s performance in recent periods. The Compensation Committee also takes into consideration the
number of unvested share-based incentive awards held by each Named Executive Officer, in order to maintain an
appropriate level of equity incentive for that individual. However, the Compensation Committee does not adhere
to any specific guidelines as to the relative equity award holdings of the Company’s executive officers, including
the Named Executive Officers. Furthermore, similar to the setting of base salaries, the weighting of the above
factors is subjective, and the Compensation Committee does not use a formula to determine the number or value
of share-based incentive awards granted to any executive officer, including the Named Executive Officers.
The Compensation Committee typically grants long-term share-based incentive awards in the first quarter of
the fiscal year, except for awards to new hires and awards related to the promotion and retention of current
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