SanDisk 2013 Annual Report Download - page 43

Executive Compensation Program Overview
Elements of Compensation Program. 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. Furthermore, with the exception of the severance protection, the elements of the executive
officers’ compensation are the same as those of the Company’s broader employee population, which the
Company believes also aligns the interests of the executive officers with the Company as a whole.
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 and retain top-tier talent
Annual Cash Incentive Opportunity • Pay-for-performance
• Align executive officers’ interests with those of
stockholders
• Attract, retain and motivate top-tier talent
Long-term Share-Based Incentives • Align executive officers’ interests with those of
stockholders
• Pay-for-performance
• Attract, retain and motivate top-tier talent
401(k) Retirement Benefits • Attract and retain top-tier talent
Severance and Other Benefits Upon Termination of • Attract and retain top-tier talent
Employment in Certain Circumstances
The material elements described above include both fixed amounts and variable amounts, which serve
distinct purposes. The Company believes that in order to attract and retain top-caliber executive officers, it
needs to provide them with fixed, predictable benefit amounts that reward their continued service, and the
Company provides its executive officers with base salaries, 401(k) retirement benefits and severance and
other termination benefits, which are generally fixed or predictable.
The variable elements, including the Company’s annual cash incentive opportunity, are primarily
intended to hold the executive officers, including the Named Executive Officers, accountable for their
performance, although the Company believes the cash incentive also aligns the interests of the executive
officers with those of the Company’s stockholders and helps the Company attract, retain and motivate the
executive officers. The Company’s long-term share-based incentives are primarily intended to align the
interests of the executive officers, including the Named Executive Officers, with those of the Company’s
stockholders, although the Company believes the share-based incentives also help hold executive officers
accountable for their performance and help the Company attract, retain and motivate executive officers.
The annual cash incentive opportunity and the long-term share-based incentives are designed to reward
performance and the creation of stockholder value, and therefore the value of these benefits is dependent
on performance. The annual cash incentive opportunity is paid out on an annual basis to the executive
officers, including the Named Executive Officers, and is designed to reward performance for that period.
The long-term equity incentives are generally designed to reward performance over one or more years.
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