Symantec 2008 Annual Report Download - page 58

and long-term cash and equity awards. Short-term results are measured by annual financial performance, specif-
ically revenue, earnings per share and, for our business unit leaders, business unit performance. Long-term results
are measured by (a) share price appreciation, and (b) achievement of operating cash flow targets.
Appropriate Market Positioning: Our current policy is to target the base salary and annual short-term cash
incentive structure for named executive officers at the 65th percentile of the relevant market composite, as described
below, with target long-term incentive opportunities and benefits for named executive officers at the 50th percentile
of the relevant market composite. Base salary and short-term cash incentives are positioned at the 65th percentile in
order to attract and retain high caliber talent in the highly competitive technology market. The 50th percentile target
long-term incentive strategy allows us to be competitive in the market, while providing alignment with stockholders
and significant upside through strong performance. As described below, the pay mix for executives emphasizes
long-term performance through a majority of pay opportunity coming in the form of long-term award vehicles. By
using these targets, we believe that upside opportunity in the short- and long-term incentive plans is available with
outstanding financial performance, while keeping our burn rate and dilution, as discussed in more detail below,
within a range that we deem acceptable. The Committee may set the actual components for an individual named
executive officer above or below the positioning benchmark based on factors such as experience, performance
achieved, specific skills or competencies, the desired pay mix (e.g., emphasizing short- or long-term results), and
our budget.
Competitive Market Assessments: Market competitiveness is one factor that the Committee considers
each year in determining an individual named executive officer’s salary, incentive opportunity, long-term equity
awards and pay mix. The Committee relies on various data sources to evaluate the market competitiveness of each
pay element, including publicly-disclosed data from a peer group of companies (see discussion below) and
published survey data from a broader set of information technology companies that are similar in size to Symantec
and that the Committee and its advisors, including Mercer, believe represent Symantec’s competition in the broader
talent market. The peer group’s proxy statements provide detailed pay data for the top five positions. Survey data
provides compensation information from a broader group of information technology companies, with positions
matched based on specific job scope and responsibilities. The Committee considers data from these sources in
developing a market composite which it uses as a framework for making compensation decisions for each named
executive officer’s position.
Peer Group: Symantec is a prominent participant in the information technology industry. This industry is
characterized by rapid rates of change, intense competition from small and large companies, and significant cross-
over in leadership talent needs. As such, we compete for executive talent with leading software and services
companies as well as in the broad information technology industry. Further, because we believe that stockholders
measure our performance against a wide array of technology peers, the Committee uses a peer group that consists of
a broader group of high technology companies in different market segments but of a comparable size to us. The
Committee uses the peer group, as well as other relevant market data, to develop a market composite for purposes of
establishing named executive officer pay levels (as described above). In addition, the peer group performance is
used as input for setting performance targets for our annual incentive plan.
For fiscal 2008, the Committee, based on the advice of Mercer, included the following companies in the peer
group: Adobe Systems, Analog Devices, Apple, Cisco Systems, Computer Associates, Electronic Arts, EMC,
Freescale Semiconductor, Harris Interactive, Juniper Networks, Lexmark, Network Appliance, Oracle, Qualcomm,
Seagate Technology, and Yahoo!
Appropriate Pay Mix: The percentage of an executive officer’s compensation opportunity that is at-risk or
variable instead of fixed is based primarily on the officer’s level of influence at Symantec. Executive officers
generally have a greater portion of their pay at risk through short- and long-term incentive programs than the rest of
our employee population because of their relatively greater responsibility and ability to influence the Company’s
performance. This is achieved by having higher target short-term incentive opportunities and higher equity grant
levels relative to base salary than employees who are not senior executives.
Form and Mix of Long-Term Equity Incentive Compensation: We currently use two forms of equity for
long-term equity incentive compensation: stock options and restricted stock units (RSUs). (See “Equity Incentive
Awards” below for more information regarding the specific features of each form). Starting in fiscal 2007, we
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