Symantec 2009 Annual Report Download - page 42

For fiscal 2009, our operating cash flow target was $1,870.3 million and we achieved 89% of our target
($1,670.6 million), resulting in a payout of 45% of target bonus amounts for our named executive officers who
remain our employees as of the end of fiscal 2011. Accordingly, John Thompson, Enrique Salem, James Beer,
Gregory Hughes and J. David Thompson will each receive payouts of $900,000, $450,000, $211,500, $148,500 and
$148,500, respectively, if they remain employed by us on such date. This level of achievement against target
compares to our reported decrease in cash flow from operations of approximately 9% from fiscal 2008 to fiscal
2009.
Equity Incentive Awards
The primary purpose of our equity incentive awards is to align the interests of our named executive officers
with those of our stockholders by rewarding the named executive officers for creating stockholder value over the
long-term. By compensating our executives with the Company’s equity, our executives hold a stake in the
Company’s financial future. The gains realized in the long term depend on our executives’ ability to drive the
financial performance of the Company. Equity incentive awards are also a useful vehicle for attracting and retaining
executive talent in our competitive talent market.
Our 2004 Equity Incentive Plan provides for the award of stock options, stock appreciation rights, restricted
stock, and restricted stock units. We granted named executive officers stock options and restricted stock units in
fiscal 2009 (as described in more detail below). The Company offers all employees the opportunity to participate in
an Employee Stock Purchase Plan which allows for purchase of stock at a discount to market through a payroll
deduction process. This plan is designed to comply with Internal Revenue Code Section 423. During fiscal 2009,
two named executive officers participated in our Employee Stock Purchase Plan.
We seek to provide equity incentive awards which are competitive with companies in our peer group and the
other information technology companies that the Compensation Committee includes in its market composite. As
such, we establish target equity incentive award grant guideline levels for the named executive officers based on
market pay assessments. When making annual equity awards to named executive officers, we consider corporate
results during the past year, the role, responsibility and performance of the individual named executive officer, the
competitive market assessment described above, prior equity awards, and the level of vested and unvested equity
awards then held by each participating officer. In making equity awards, we also generally take into consideration
gains recognizable by the executive from equity awards made in prior years. Mercer provides the Compensation
Committee with market data on these matters, as well as providing to the Compensation Committee summaries of
the prior grants made to the individual named executive officers.
For fiscal 2009, approximately 50% of the named executive officers’ equity incentive award value was granted
in the form of restricted stock units and approximately 50% in the form of stock options (other than Mr. Salem,
whose equity incentive award value was weighted more heavily towards options, as noted above).
Burn Rate and Dilution: We closely manage how we use our equity to compensate employees. We think of
“gross burn rate” as the total number of shares granted under all of our equity incentive plans during a period divided
by the average number of shares of common stock outstanding during that period and expressed as a percentage. We
think of “net burn rate” as the total number of shares granted under all of our equity incentive plans during a period,
minus the total number of shares returned to such plans through awards cancelled during that period, divided by the
average number of shares of common stock outstanding during that period, and expressed as a percentage.
“Overhang” we think of as the total number of shares underlying options and awards outstanding plus shares
available for issuance under all of our equity incentive plans at the end of a period divided by the average number of
shares of common stock outstanding during that period and expressed as a percentage. For purposes of these
calculations, each full-value award grant (e.g., restricted stock unit) is treated as the equivalent of the grant of two
options in order to recognize the economic difference in the equity vehicle types. Our annual gross and net burn
rates have been at or below 3% since fiscal 2005. The Compensation Committee targets an annual gross burn rate of
approximately 3% to allow for effective attraction, retention and motivation of senior management and the broader
employee base, while staying within parameters acceptable to stockholders. The Compensation Committee
determines the percentage of equity to be made available for our equity programs with reference to the companies
in our market composite. In addition, the Compensation Committee considers the accounting costs that will be
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