Symantec 2014 Annual Report Download - page 49

selected as we believe it is a significant indicator of shareholder value creation, and improving profitability was a
strategic focus in fiscal 2014. It is also a metric that can be measured at various sub-business unit levels within
our company. Any funding generated by the non-GAAP operating income achievement would be modified up or
down based upon revenue achievement versus goals. Revenue was used as a secondary modifier in fiscal 2014
because revenue growth was considered to be a secondary strategic priority as our business underwent its orga-
nization changes as noted in the Executive Summary above.
The determination of achievement of the non-GAAP operating income and revenue metrics is formulaic,
while the individual performance metric is determined based on a qualitative evaluation of the individual’s per-
formance against pre-established objectives with input from our CEO. In rating the individual’s performance, the
Compensation Committee gives weight to the input of our CEO, but final decisions about the compensation of
our named executive officers are made solely by the Compensation Committee. Although the Compensation
Committee has the discretion to adjust awards as appropriate, it did not exercise such discretion for fiscal 2014.
For the non-GAAP operating income metric, for every 1% achievement above target the initial funding of
the named executive officer’s target bonus opportunity increases by 10%; for every 1% underachievement below
target the funding decreases by 6%; there is no funding if the achievement is below 95%; and the funding is
capped at 200% of target for achievement at or above 110%. For the revenue modifier metric, for every 1% ach-
ievement above target the initial funding amount increases by 2.5%; for every 1% achievement under target the
funding decreases by 10%; there is no funding if the achievement is below 95%; and the modifier percentage is
capped at 10% for achievement at or above 104%. The actual individual payouts are further modified based on
the individual performance factor generally in the range of 0-140% based on the performance achievement
against pre-established goals for the fiscal year. The following table summarizes the foregoing discussion of
threshold, target and maximum performance levels and the relative funding levels at each level under the FY14
Executive Annual Incentive Plans:
Non-GAAP
Operating Income
(%)
Revenue Modifier
(%)
Individual
Performance
Modifier (%)
Total Payout
as a Percentage
of Target (%)
Threshold ........................... 70 -40 35 14.7
Target .............................. 100 0 100 100
Maximum ........................... 200 10 140 308
We used the above performance metrics because:
‰Over time, we believe that non-GAAP operating income and revenue measures have strongly correlated
with stockholder value creation for Symantec;
‰the non-GAAP operating income and revenue measures are transparent to investors and are included in
our quarterly earnings releases and supplemental materials;
‰the non-GAAP operating income and revenue measures are designed to balance growth and profitability;
and
‰the performance goals used for the individual performance component align with our operational and stra-
tegic objectives.
Non-GAAP operating income and revenue performance targets were established based on a range of inputs,
including external market economic conditions, growth outlooks for our product portfolio, the competitive envi-
ronment, our internal budgets, and market expectations.
The individual award is determined based on an assessment of individual performance results and impact
against both quantitative and qualitative expectations for the executive’s role.
An executive’s performance is evaluated based on both quantitative and qualitative results in the following
area:
‰financial and operational goals for their area of responsibility and the entire company;
‰leadership qualities as well as functional competencies and knowledge for their area of responsibility; and
‰development and management of their team of employees.
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