Symantec 2009 Annual Report Download - page 46

stock trading plans at a time when they are not aware of material nonpublic information about us, and thereafter sell
shares of our common stock in accordance with the terms of their stock trading plans without regard to whether or
not they are in possession of material nonpublic information about the Company at the time of the sale. All other
executives are strongly encouraged to trade using 10b5-1 plans.
Tax and Accounting Considerations on Compensation
The financial reporting and income tax consequences to the Company of individual compensation elements are
important considerations for the Compensation Committee when it reviews compensation practices and makes
compensation decisions. While structuring compensation programs that result in more favorable tax and financial
reporting treatment is a general principle, the Compensation Committee balances these goals with other business
needs that may be inconsistent with obtaining the most favorable tax and accounting treatment for each component
of its compensation.
Deductibility by Symantec. Under Section 162(m) of the Internal Revenue Code, we may not receive a
federal income tax deduction for compensation that is not performance-based (as defined in the Section 162(m)
rules) paid to the Chief Executive Officer and the next three most highly compensated executive officers to the
extent that any of these persons receives more than $1,000,000 in nonperformance-based compensation in any one
year. While the Compensation Committee considers the Company’s ability to deduct compensation amounts paid or
to be paid to its executive officers in determining appropriate levels or manner of compensation, it may from time to
time approve additional amounts of compensation that are not fully deductible under Section 162(m).
Salaries for officers do not qualify as performance-based compensation; however, as no officer received salary
in excess of $1,000,000 during fiscal 2009, the entire amount of salaries paid to our named executive officers is
deductible. Our executive annual incentive and cash long-term incentive plans are structured so that they are
performance-based and therefore deductible. We believe that all of the stock options granted to the executive
officers under our 1996 Equity Incentive Plan and 2004 Equity Incentive Plan qualify under Section 162(m) as
performance-based compensation and that all amounts of compensation related to options held by our executive
officers should be fully deductible. Our RSU grants vest on a time-based vesting schedule and therefore are not
considered performance-based under the Section 162(m) rules. Accordingly, amounts of compensation related to
RSUs held by our executive officers may not be fully deductible (depending upon the value of our stock, and the
amount of other nonperformance-based compensation an officer has during the year in which any portion of an RSU
vests).
Tax Implications for Officers. Section 409A of the Internal Revenue Code imposes additional income taxes
on executive officers for certain types of deferred compensation that do not comply with Section 409A. The
Company attempts in good faith to structure compensation so that it either conforms with the requirements of or
qualifies for an exception under Code Section 409A. Section 280G of the Internal Revenue Code imposes an excise
tax on payments to executives of severance or change of control compensation that exceed the levels specified in the
Section 280G rules. Our named executive officers could receive the amounts shown in the section entitled “Potential
Payments Upon Termination or Change in Control” (beginning on page 44 below) as severance or change of control
payments that could implicate this excise tax. As mentioned above, we do not offer our officers as part of their
change of control benefits any gross ups related to this excise tax under Code Section 4999.
Accounting Considerations. The Compensation Committee also considers the accounting and cash flow
implications of various forms of executive compensation. In its financial statements, the Company records salaries
and performance-based compensation incentives as expenses in the amount paid, or to be paid, to the named
executive officers. Accounting rules also require the Company to record an expense in its financial statements for
equity awards, even though equity awards are not paid as cash to employees. The accounting expense of equity
awards to employees is calculated in accordance with SFAS 123R. The Compensation Committee believes,
however, that the many advantages of equity compensation, as discussed above, more than compensate for the non-
cash accounting expense associated with them.
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