Visa 2007 Annual Report Download - page 176

Table of Contents
of the transitional nature of fiscal 2007, actual annual incentive awards for Messrs. Partridge, Sheedy and Floum were based on their individual performance
as against qualitative metrics and their actual long-term awards were based on Visa U.S.A.'s achievement of corporate goals. Both awards were approved by
the compensation committee of Visa U.S.A. Mr. Saunders's actual annual and long-term incentive awards were determined based on the achievement of his
performance measures outlined in his executive chairman letter. See "—Employment Arrangements."
In fiscal 2008, we anticipate that annual incentive awards will be based on the executive's individual performance and our attainment of certain
quantitative and qualitative corporate goals, which we currently expect to set in February 2008. Beginning in fiscal 2008, long-term incentive awards will be
made in the form of equity grants with the amount of the awards based on results from the annual benchmark review, a review of the appropriate mix of
compensation elements, the experience and performance of each executive and any employment agreement. See "—Employment Arrangements." Actual 2008
compensation will be recommended by Mr. Saunders, our Chief Executive Officer, and approved by our compensation committee (except for Mr. Saunders,
whose compensation is determined and approved by our compensation committee).
In 2007, we awarded a special bonus to our named executive officers, along with other eligible employees, upon completion of our reorganization. This
was a discretionary bonus award, which was in addition to each executive's ongoing total compensation and did not impact the determination of each
compensation component. See "—Special Bonus Program."
Base Salary
The purpose of base salary is to reward demonstrated experience, skills and competencies relative to the market value of the job. Our compensation
committee approves base salaries of all of our executive officers. Base salaries are targeted at the median of the compensation peer group for comparable
skills and experience, but we allow for flexibility in salaries above or below the median based on area of expertise, performance or proficiency.
During its review of base salaries for executive officers, the compensation committee will consider:
• market data provided by our outside consultants;
• internal review of the executive officer's compensation, both individually and relative to other executive officers; and
• individual performance of the executive officer.
Salary levels are typically considered annually as part of our performance review process, as well as upon a promotion or other change in job
responsibilities.
Annual Incentive Programs
Our annual cash bonus programs consist of: (i) the Visa U.S.A. annual incentive plan, pursuant to which bonuses were awarded in fiscal 2006 and fiscal
2007, but which was terminated at the end of fiscal 2007; and (ii) the Visa Inc. annual incentive plan, which governs cash awards in fiscal 2008 and in the
future.
Visa U.S.A. Annual Incentive Plan. Prior to the completion of the reorganization, Visa U.S.A. (and its majority-owned subsidiary, Inovant) maintained
annual incentive plans that provided for annual cash bonuses based on the achievement of pre-established performance targets and goals in addition to
individual performance. The use of pre-established performance targets and goals assisted in aligning an executive officer's compensation with the entity's
operating and financial results. However, Visa U.S.A. recognized that important aspects of executive officers' contributions to Visa's success were not
properly evaluated based solely on achievement of performance targets and goals, especially in light of the challenges and uncertainties presented by the
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