Symantec 2014 Annual Report Download - page 40

‰Scott C. Taylor, our Executive Vice President, General Counsel and Corporate Secretary, has been a
strong leader and business partner throughout Symantec’s transformation; and
‰We added several new technology executives, who bring valuable skills in holistic information protection
product design, integrated IT implementation, cloud infrastructure, eCommerce, and global sales, oper-
ations and customer experience.
Michael A. Brown, our interim President and Chief Executive Officer, has been instrumental in maintaining
continuity and improving the company’s performance as the Board actively searches for a permanent President and
Chief Executive Officer. The Board has retained Russell Reynolds (an executive search firm) to assist them in the
search for a permanent chief executive officer who, among other things, understands the technology landscape, has
expertise in growing a multi-product business at scale, and has a strong record of collaborative leadership.
We also implemented a capital allocation strategy through which we strengthened our commitment to return
excess capital to our stockholders using a combination of quarterly cash dividend payments and share
repurchases totaling $918 million, which represented approximately 90% of our free cash flow during fiscal
2014. We returned a total of $418 million in cash dividends and spent $500 million to repurchase 21 million
shares during fiscal 2014.
In fiscal 2014, Symantec delivered revenue of $6.7 billion, a year-over-year decline of 3%. We attribute this
decline to the significant operational changes we implemented in fiscal 2014, including changes to our go-to-
market coverage model. Our non-GAAP net income increased by 8% and non-GAAP diluted earnings per share
increased 9% year over year.
Financial and Compensation Metrics, Performance Achievement and Incentive Plan Earnings
During fiscal 2014, we used three core financial operating metrics as well as total shareholder returns
(“TSR”) relative to the S&P 500 to assess company performance and determine incentive compensation amounts
earned by our officers. The operating metrics used in our executive compensation programs are: non-GAAP
operating income, revenue and non-GAAP earnings per share (“EPS”). These metrics were selected because we
believe they are strongly correlated to enterprise value for companies in our sector and support the appropriate
behaviors for our leadership team to drive company performance. For a significant portion of the long-term
equity incentive compensation component of our regular annual executive compensation program, we also used
two other metrics that more directly align the interests of our executive officers to those of our stockholders: our
stock price and TSR ranking for our company as compared to the S&P 500. In addition, individual performance
was a factor in the potential annual incentive awards of our named executive officers, other than our former
CEO, under our Executive Annual Incentive Plan.
As noted above, our fiscal 2014 financial performance was below our expected levels. For our incentive
plans, performance and resulting earning levels are as follows:
Incentive Plan Fiscal 2014 Performance Incentive Award Outcome
FY14 Executive Annual
Incentive Plan ‰Our non-GAAP operating income(1)
was below our threshold level of
performance for fiscal 2014
‰Zero funding and no payouts for
our executive officers
‰We believe this demonstrates our
commitment to paying for per-
formance
Fiscal 2014 PRU Grants ‰Our non-GAAP EPS(1) was 99% of
our targeted performance level of
$1.89 for the full fiscal year
‰98% of the targeted number of
shares are eligible to be earned,
subject to modification on final
shares earned based on
Symantec’s 2- and 3-year relative
TSR versus the S&P 500
Fiscal 2014 PCSU Grant
(former CEO only) ‰At no point did our 60-day average
stock price achieve the minimum
earning threshold level of $26.79
‰No shares vested based on per-
formance due to our not achieving
the minimum performance hurdle
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