8-KMaterial AgreementsExhibits & Filings

NVIDIA CORP 8-K Report, Material Agreement (May 16, 2005)

Filed May 16, 2005For Securities:NVDA

Summary

NVIDIA Corporation filed an 8-K on May 16, 2005, to report on the adoption of its Fiscal Year 2006 Variable Compensation Plan (the '2006 Plan'). This plan is designed to incentivize executive leadership, including the CEO and senior officers, by linking a portion of their cash compensation to the achievement of pre-defined corporate and individual performance targets. The 2006 Plan allocates 50% of potential variable compensation to corporate objectives and 50% to individual objectives. Corporate performance will be measured against net income or gross margin targets set by the Compensation Committee, or other company-wide goals. Individual performance will be assessed based on specific objectives. Importantly, the Company's Board of Directors and Compensation Committee retain the discretion to modify these goals or award additional compensation even if targets are not met.

Key Highlights

  • 1NVIDIA adopted the Fiscal Year 2006 Variable Compensation Plan (2006 Plan) on May 10, 2005.
  • 2The plan is designed to provide variable cash compensation to the CEO and senior officers.
  • 3Compensation is contingent upon achieving both corporate and individual performance targets.
  • 450% of variable compensation is tied to corporate objectives, and 50% to individual objectives.
  • 5Corporate performance metrics include net income or gross margin targets.
  • 6Individual performance is assessed based on pre-set individual goals.
  • 7The Compensation Committee and Board of Directors have the right to modify goals or award compensation irrespective of target achievement.

Frequently Asked Questions

The main purpose of the 2006 Plan is to incentivize NVIDIA's chief executive officer and senior officers by making a portion of their cash compensation variable and dependent on the achievement of specific corporate and individual performance targets for Fiscal Year 2006.

Variable compensation is determined by a 50/50 split between corporate performance and individual performance. Corporate performance is measured against targets such as net income or gross margin, while individual performance is based on the achievement of personal objectives set by management and the Compensation Committee.

No, the payout is not guaranteed. It is contingent upon the achievement of specific corporate and individual performance targets. However, the Compensation Committee and Board of Directors reserve the right to modify these goals or award additional compensation even if the pre-set performance goals are not met.

The Compensation Committee sets the corporate performance targets, often based on recommendations from the CEO and executive officers. Individual performance targets for the CEO are determined by the Compensation Committee, and for senior management, they are determined by executive officers.