Symantec 2009 Annual Report Download - page 40

award opportunity are otherwise uncapped in amount, in that overachievement of performance goals can result in
payments in excess of target, although the Executive Annual Incentive Plan has an overall cap of $5 million that any
single named executive officer may be paid for a single fiscal year.
Executive Annual Incentive Plan Performance Measures and Target Setting: Executive Annual Incentive
Plan performance targets are established on or about the beginning of each plan year. Our management develops
proposed goals with reference to a variety of factors, including our historical performance, internal budgets, market
and peer performance, and external expectations for our performance. The Compensation Committee reviews,
adjusts as necessary, and approves the goals, the range of performance, and the weighting of the goals. Following the
end of each fiscal year, the Compensation Committee reviews our actual performance against the performance
measures established in the fiscal year’s Executive Annual Incentive Plans (after making any appropriate adjust-
ments to such measures for the effects of corporate events that were not anticipated in establishing the performance
measures), determines the extent of achievement and approves annual cash incentives, if warranted. In determining
the achievement of performance goals for fiscal 2009 the Compensation Committee made adjustments for several
acquisitions made during the year. The determination of awards for named executive officer incentives is formulaic,
though the Compensation Committee has the discretion to reduce awards. The Compensation Committee did not
exercise such discretion for fiscal 2009.
The performance measures in the Fiscal Year 2009 Executive Annual Incentive Plans for the named executive
officers were as reported non-GAAP earnings per share (EPS) and non-GAAP revenue achievement which, for our
CEO, CFO and COO, were weighted equally. For our Group Presidents who are responsible for a business unit (i.e.,
J. David Thompson), in addition to revenue and EPS metrics, the FY09 Executive Annual Incentive Plans also
included business unit performance against budget as a performance metric. For J. David Thompson, the IT and
Services group performance against budget metric had a 30% weighting, with the revenue and EPS metrics equally
weighted at 35%. Mr. Hughes became our Group President, Enterprise Products in January 2009 after serving as
Chief Strategy Officer (a position that does not contain a business unit performance metric) for the first three
quarters of fiscal 2009. As a result, Mr. Hughes’s FY09 Executive Annual Incentive Plan did not include a business
unit performance metric.
We used the above performance metrics because:
• Over time, EPS and revenue measures have strongly correlated with stockholder value creation for
Symantec;
• Improvement in EPS and revenue measures aligns with our overall growth strategy;
• The EPS and revenue measures are transparent to investors and are included in our quarterly earnings
releases;
• The EPS and revenue measures balance growth and profitability; and
• The business unit performance metrics drive behavior in a manner that aligns enterprise and business unit
results.
For the non-GAAP revenue and non-GAAP EPS metrics for fiscal 2009, the Compensation Committee
established a threshold and target performance level that represents 80% and 100% of target funding levels,
respectively. Target performance objectives are established based on a range of inputs, including external market
economic conditions, growth outlooks for our product portfolio, the competitive environment, our internal budgets,
and market expectations. If results for a goal are below threshold, the funding level for that goal is 0%, and
participants will be paid no incentive compensation for that goal. At threshold, the goal is funded at the 80% level.
At target, the goal is funded at the 100% level. Below target, the payout for revenue achievement decreases by 5% of
the target opportunity for each additional 1% below target revenue achievement levels (assuming the threshold is
met). Above target, the payout for revenue achievement increases by 10% of the target opportunity for each
additional 1% above target achievement levels. Results above target EPS provide an additional 10% payout for each
additional 2.06% above target EPS achievement levels.
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