SanDisk 2013 Annual Report Download - page 47

accordance with Section 162(m) of the Code, the Compensation Committee established a maximum bonus
amount payable to each of Mr. Mehrotra and Mr. Sadana under the 2013 bonus program of 300% of his
target bonus amount in connection with the achievement of the business objectives described below. The
Compensation Committee also established a maximum bonus amount payable to Ms. Bruner under the
2013 bonus program of 300% of her target bonus amount in connection with the achievement of the
business objectives described below, although the compensation of the principal financial officer is not
subject to Section 162(m) of the Code. Subject to the maximum target bonus amount, the Compensation
Committee has the discretion to vary the individual cash incentive awards or bonuses based on the
performance of the Company and the individual.
The amount of bonuses payable under the 2013 bonus program were based on the following: (1) the
Company’s performance during fiscal year 2013 relative to a non-GAAP EPS target, which constituted
65% of the 2013 bonus program, and (2) the Company’s performance relative to strategic objectives, which
collectively constituted 35% of the 2013 bonus program. The strategic objectives approved by the
Compensation Committee related to (1) memory technology leadership as demonstrated through
next-generation technology development, (2) system technology/product platform competitiveness as
demonstrated through achievement of product development, (3) customer ratings compared to
competitors from top strategic OEM Customers, (4) product launches with respect to certain SSD
products, (5) customer acceptance and revenue objectives with respect to certain SSD products,
(6) revenue targets with respect to new channels or software, and (7) global market share in the retail
market. In the aggregate, the Company exceeded the target performance for the strategic objectives. With
respect to the fiscal year 2013 non-GAAP EPS goal, the minimum non-GAAP EPS target approved by the
Compensation Committee that would have resulted in a payout under the 2013 bonus program was $2.43
per share. The Company’s fiscal year 2013 non-GAAP EPS result was $5.31 per share, above the minimum
EPS target approved by the Compensation Committee. Part II, Item 7 ‘‘Management’s Discussion and
Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures,’’ of the
Company’s Form 10-K for the fiscal year ended December 29, 2013 includes a discussion of the non-GAAP
financial measures used by the Company. The table within the non-GAAP financial measures discussion
reconciles the Company’s non-GAAP net income to the Company’s GAAP-basis net income and shows
how the corresponding per-share amounts were derived. The discussion following that table also includes a
description of the adjustments shown in the table, including income tax adjustments.
After the completion of fiscal year 2013, the Compensation Committee evaluated the fiscal year 2013
performance of the Company and the individual performance of each Named Executive Officer who was
currently an employee of the Company. As a result of the Company’s achievement against the financial
and strategic objectives described above, each of the Named Executive Officers became eligible for the
maximum bonus amount of 300% of his or her target bonus amount (other than Dr. Sivaram and
Mr. Whitaker, whose fiscal year 2013 bonuses were not subject to a maximum limitation, in accordance
with the 2013 bonus program in effect for the broader employee population). The Compensation
Committee also considered the individual performance of each Named Executive Officer, as follows:
• Mr. Mehrotra—The Compensation Committee considered Mr. Mehrotra’s contributions to
overachievement of both the Company’s fiscal year 2013 financial and strategic objectives, as well as
his leadership in key decisions about future strategy.
• Ms. Bruner—The Compensation Committee considered Ms. Bruner’s contributions to the
Company’s financial matters, investor relations and other administrative and infrastructure
functions and corporate management of the Company, particularly with respect to her leadership
on the return of capital strategy executed by the Company as well as the convertible debt offering.
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Proxy Statement