SanDisk 2012 Annual Report Download - page 57

Proxy Statement
2012 peer companies, including equity award practices. Compensia did not provide any other services to the
Company. The Company’s Chief Executive Officer has not met or consulted with Compensia individually, nor
has he met with Compensia with respect to his individual compensation.
Continued Commitment to Good Compensation Governance. The Company endeavors to maintain good
governance standards with respect to its executive compensation program. The Compensation Committee
believes that the compensation arrangements for the executive officers, including the Named Executive Officers,
are consistent with market practice and provide for compensation that is reasonable based on the Company’s and
each individual executive officer’s performance. The Company has instituted the following policies, which
remained in effect in fiscal year 2012, to ensure that its executive compensation program is consistent with good
governance standards:
• In general, the executive officers will not be entitled to guaranteed, non-performance based bonuses or
salary increases.
• In general, the executive officers will not be entitled to tax reimbursement or tax gross-up payments in
respect of perquisites or other compensation.
• The Company maintains a clawback policy pursuant to which each Section 16 Officer, including each
Named Executive Officer, may be required to reimburse or forfeit all or a portion of any cash-based
incentive compensation received if the Company’s financial statements are required to be restated as a
result of material non-compliance with any financial reporting requirements.
• To align the interests of the Company’s executive officers with the interests of the Company’s
stockholders, the Company maintains stock ownership guidelines (set forth in the Company’s
Corporate Governance Principles, which are available on the Company’s website) that require that each
executive officer retain a minimum equity ownership interest in the Company. In addition, the
Company’s insider trading policy prohibits the Company’s executive officers from short-selling the
Company’s Common Stock, trading in derivative securities related to the Company’s securities,
including the Company’s Common Stock, or otherwise engaging in activities designed to hedge against
the Company’s Common Stock.
• Perquisites and other personal benefits do not constitute a significant portion of the compensation for
the executive officers. The Company’s executive officers participate in broad-based Company-
sponsored health and welfare benefits programs on the same basis as other regular employees.
• The Company does not currently offer, nor does the Company have plans to provide, defined benefit
pension arrangements or nonqualified deferred compensation plans or arrangements to its executive
officers.
Elements of the Current Executive Compensation Program
Base Salaries
The Compensation Committee generally reviews the base salaries of the executive officers, including the
Named Executive Officers, in the first quarter of each year. To assist with that review, management has in the
past provided the Compensation Committee with a summary of the base salary levels in effect for comparable
executive officers at the Company’s peer companies (based on their published prior fiscal year’s data). The
Compensation Committee has typically considered such summary, as well as internal comparables, individual
performance and the Company’s financial performance, in reviewing the executive officers’ base salary levels.
The weighting of these factors by the Compensation Committee has been subjective, and not formulaic. The
Compensation Committee does not use a formula for determining the executive officers’ base salaries and other
forms of compensation and does not benchmark compensation at any specific levels relative to the peer
companies.
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