SanDisk 2013 Annual Report Download - page 42

instituted the following policies, which remained in effect in fiscal year 2013, 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.
• 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. The Company
revised its stock ownership guidelines in March 2014 to, among other things, require certain levels
of outright equity ownership, as discussed in more detail under ‘‘Stock Ownership Guidelines’’
below. 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.
Say-on-Pay
The Board and management value the opinions of the Company’s stockholders. At the 2013 Annual
Meeting of Stockholders, more than 95% of the votes cast on the say-on-pay advisory vote proposal were
in favor of the Company’s executive compensation program. The Board and the Compensation Committee
reviewed the results of the say-on-pay vote and in light of the approval of a substantial majority of the
Company’s stockholders of the executive compensation program, material changes to the executive
compensation program were not made. At the 2011 Annual Meeting of Stockholders, approximately 89%
of the votes cast on the say-on-pay frequency vote proposal were in favor of holding a say-on-pay advisory
vote every year and, consistent with those results, the Board has implemented an annual advisory vote on
the Company’s executive compensation program. The Board and the Compensation Committee recognize
that executive pay practices and notions of sound governance principles continue to evolve, and will
continue to evaluate and adapt the Company’s executive compensation practices.
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