SanDisk 2013 Annual Report Download - page 40

COMPENSATION DISCUSSION AND ANALYSIS
This section contains a discussion of the material elements of compensation awarded to, earned by or
paid to the following executive officers of the Company: the principal executive officer; the principal
financial officer; and the three other most highly compensated individuals who were serving as executive
officers as of the last day of fiscal year 2013. These individuals are referred to as the ‘‘Named Executive
Officers’’ in this Proxy Statement and include:
• Sanjay Mehrotra—President and Chief Executive Officer (principal executive officer);
• Judy Bruner—Executive Vice President, Administration and Chief Financial Officer (principal
financial officer);
• Sumit Sadana—Executive Vice President and Chief Strategy Officer;
• Dr. Siva Sivaram—Senior Vice President, Memory Technology; and
• Eric S. Whitaker—Senior Vice President and Chief Legal Officer.
The Company’s current executive compensation programs are determined and approved by the
Compensation Committee. None of the Named Executive Officers is a member of the Compensation
Committee.
Executive Summary
SanDisk has a long-standing commitment to a compensation program guided by three basic
philosophies: (1) alignment of compensation with stockholder interests, (2) pay-for-performance, and
(3) compensation opportunities that are competitive so that the Company can attract, retain and motivate
top-tier talent. The Compensation Committee sets a significant portion of the compensation of the
executive officers, including the Named Executive Officers, based on their ability to achieve annual
financial and strategic objectives that advance the Company’s long-term business objectives and that are
designed to create sustainable long-term stockholder value.
The Compensation Committee also takes into consideration the fact that, consistent with the
Company’s compensation philosophy described in more detail below, equity awards increase each Named
Executive Officer’s stake in the Company, thereby reinforcing the incentive to manage the Company’s
business as owners and subjecting a significant portion of the executive officer’s total compensation to
fluctuations in the market price of Common Stock. During fiscal year 2013, a significant percentage of
each Named Executive Officer’s total compensation (as reported in the Summary Compensation Table)
was at-risk, having included (1) annual performance-based cash bonus opportunities, which become
payable only upon the achievement of certain financial and strategic objectives established by the
Compensation Committee, which advance the Company’s near-, medium- and long-term business
objectives and are designed to create sustainable long-term stockholder value, (2) RSUs, the value of
which is directly tied to the value of the Company’s Common Stock over time, and (3) stock options with
exercise prices equal to the fair market value of the Company’s Common Stock on the grant date, which
become valuable only upon realized share appreciation after the grant date.
32