8-KLeadership ChangesOther EventsExhibits & Filings

NVIDIA CORP 8-K Report, Executive Changes (Apr 8, 2009)

Filed April 8, 2009For Securities:NVDA

Summary

NVIDIA Corporation (NVDA) filed an 8-K on April 7, 2009, primarily detailing adjustments to its executive compensation for Fiscal Year 2010 and the final approval of settlements for shareholder derivative lawsuits. The company's Compensation Committee decided not to establish corporate performance targets for FY2010 compensation, citing the prevailing economic environment and cost-reduction efforts. Furthermore, most executive officers, including the CEO, will not be eligible for individual performance payouts in FY2010, with the exception of the newly appointed CFO, David White. In addition, the filing confirms the final approval and dismissal with prejudice of all shareholder derivative lawsuits concerning historical stock option practices. These settlements, previously disclosed, involved no admission of wrongdoing by NVIDIA or its leadership. The company has agreed to implement certain corporate governance changes as part of the settlement. The total attorneys' fees awarded to plaintiffs across the three jurisdictions (Delaware, California federal, and California state) amount to approximately $7.25 million.

Key Highlights

  • 1NVIDIA's Compensation Committee will not set corporate performance targets for Fiscal Year 2010 compensation due to economic conditions and cost-saving initiatives.
  • 2Most executive officers, including the CEO, are ineligible for individual performance-based cash compensation in FY2010, excluding the new CFO, David White.
  • 3The Fiscal Year 2010 Variable Compensation Plan (the '2010 Plan') has been approved, designed for variable cash compensation upon achieving pre-set individual targets.
  • 4The company has received final court approval for the settlement of all shareholder derivative lawsuits related to historical stock option practices.
  • 5The settlements involved no admission of wrongdoing or fault by NVIDIA, its board, or executive officers.
  • 6As part of the settlement, NVIDIA's board will continue to implement specified corporate governance enhancements.
  • 7Total attorneys' fees approved by the courts for the plaintiffs in the derivative lawsuits aggregate approximately $7.25 million.

Frequently Asked Questions

NVIDIA's Compensation Committee decided to forgo corporate performance targets for FY2010 compensation due to the challenging current economic environment and the company's ongoing cost reduction efforts. This decision aimed to align compensation practices with the prevailing business conditions.

Yes, while most executive officers, including the CEO, are not eligible for individual performance payouts in FY2010 as part of cost-saving measures, the newly appointed Chief Financial Officer, David White, is an exception and remains eligible.

The shareholder derivative lawsuits concerning NVIDIA's historical stock option practices have received final court approval in both the Delaware Chancery Court and the U.S. District Court for the Northern District of California, as well as dismissal in the related California state action. The dismissals are with prejudice, meaning these cases are now closed and cannot be refiled.

No, the settlement agreements explicitly state that they do not contain any admission of wrongdoing or fault on the part of NVIDIA, its board of directors, or its executive officers. The settlements are structured without an admission of liability.