Symantec 2012 Annual Report Download - page 45

Summary of Compensation Matters During Fiscal 2012
In fiscal 2012, Symantec delivered 9% year-over-year growth in revenue (6% adjusting for currency) and
4% growth in deferred revenue (5% adjusting for currency) driven by strength in our backup business,
Software-as-a Service (SaaS), data loss prevention, and managed security services offerings. Our cash flow from
operations remained strong, increasing 6% compared to fiscal 2011 while our cash and cash equivalents
(including short-term investments) grew 9% year-over-year. Our non-GAAP net income increased by 7% and
non-GAAP diluted earnings per share grew 13% year over year. We spent $893 million to repurchase 51 million
shares, reducing our common stock outstanding by 6.5%, or a net 4.3% after adjusting for the issuance of
employee stock compensation.
As detailed below, during fiscal 2012, we used three core financial metrics, which we believe are strongly
correlated to enterprise value for companies in our sector, to measure company performance under our executive
compensation programs: revenue, non-GAAP earnings per share (“EPS”) and cash flow from operations. In addi-
tion, business unit performance metrics were a factor in the bonus awards of our named executive officers, other
than our former CEO, under our Executive Annual Incentive Plan. Our revenue and non-GAAP EPS in fiscal
2012 were slightly below our targeted level of performance for the full fiscal year. Our cash flow from operations
was higher than our targeted level of performance for fiscal 2012. Our named executive officers were compen-
sated in a manner consistent with our core pay-for-performance compensation philosophy as well as with the
terms of our compensation arrangements. The following are highlights of our named executive officers’ compen-
sation for fiscal 2012 and are discussed in greater detail in this CD&A:
‰While the value of our NEOs’ actual total direct compensation increased from fiscal 2011 to fiscal 2012,
this increase was due to specific events within the company that needed to be addressed: two of the NEOs
were promoted, which resulted in the need to align their compensation with their substantially greater
responsibilities. The other two NEOs were subject to external recruiting efforts from competitors, and
were given retention grants in order to ensure their continued service in a highly competitive environment.
Nevertheless, a significantly higher proportion of their pay was “at- risk” compared to fiscal 2011. The
primary reason for these increases is the larger equity awards given to the NEOs (other than our former
CEO), including the promotional and retention-based grants (other than for our former CEO), which are
described starting on page 47. The larger equity awards were consistent with our philosophy to pay for
performance by emphasizing a more variable compensation target and lower base pay target for all execu-
tives.
‰For fiscal 2012, approximately 91% of our former CEO’s target total direct compensation was at risk and,
on average, approximately 89% of the target total direct compensation for our other NEOs was at risk.
‰For fiscal 2012, our named executive officers received 92.5% to 101.5% of their target payout under our
FY12 Executive Annual Incentive Plans based on our revenue and non-GAAP EPS performance and,
other than our former CEO, the named executive officer’s business unit performance.
‰For fiscal 2012, our operating cash flow target was $1,876 million and we achieved 101% of our target,
resulting in a payout of 105% of target bonus amounts under our FY12 Long Term Incentive Plan
(“LTIP”) for our named executive officers who remain our employees as of the end of fiscal 2014.
‰In fiscal 2012, we ceased granting stock options as a regular part of the annual equity compensation
component of the compensation program for our named executive officers. We granted performance-
based restricted stock units and restricted stock units to our named executive officers. Our performance-
based restricted units program uses non-GAAP EPS and relative total stockholder return as performance
metrics, two metrics strongly tied to long-term stockholder value creation. As a result, approximately 68%
of the target value of our former CEO’s fiscal 2012 equity compensation was in the form of performance-
based restricted stock units and approximately 32% was in the form of time-based restricted stock units.
‰To enhance the alignment between our executive officers and stockholder interests, in April 2012 we
increased the level of our stock ownership guidelines for our executive officers and implemented a hold-
ing requirement of 50% of all net (after-tax) equity grants until the target level of stock ownership is met.
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