What is the purpose of the Fiscal Year 2012 Variable Compensation Plan?

The plan is designed to provide variable cash compensation to NVIDIA's chief executive officer and other senior officers. The goal is to incentivize these executives by linking a portion of their compensation to the achievement of pre-set corporate net income targets and individual performance goals during fiscal year 2012.

How is the variable compensation calculated under the 2012 Plan?

The variable cash compensation is split equally between corporate and individual performance. Fifty percent (50%) of a participant's potential award is tied to achieving corporate targets (like net income), and the other fifty percent (50%) is tied to achieving individual targets. For each component, participants can earn up to 200% of their target award if maximum performance is achieved.

Who is the new principal accounting officer and what are their key compensation elements?

Michael Byron has been appointed as the new Vice President of Finance and principal accounting officer. His compensation package includes an annual base salary of $340,000, a potential bonus of up to $115,000 to offset a previous signing bonus obligation, 20,000 restricted stock units vesting over four years, and a stock option to purchase 50,000 shares vesting over four years.

Does NVIDIA retain flexibility in its compensation decisions?

Yes, the Board of Directors and Compensation Committee reserve the right to provide variable compensation outside of the 2012 Plan, modify compensation targets and criteria, or grant additional variable cash compensation even if performance targets are not met. This provides the company with flexibility in executive compensation.

NVDA 8-K: Leadership Changes

Summary

NVIDIA Corporation (NVDA) has filed an 8-K report detailing two significant personnel and compensation-related events. Firstly, the company's Compensation Committee approved the Fiscal Year 2012 Variable Compensation Plan, designed to provide performance-based cash compensation to the CEO and other senior officers. Payouts under this plan are contingent upon achieving pre-set corporate net income targets and individual performance goals, with each component contributing 50% to the total potential award, and each allowing for up to 200% of the target award upon maximum achievement. Secondly, NVIDIA announced the appointment of Michael Byron as Vice President of Finance and principal accounting officer, effective March 21, 2011. Mr. Byron brings extensive experience, including prior roles at NVIDIA and Cisco Systems. His compensation package includes a base salary of $340,000, potential bonus to cover a prior signing bonus obligation, and significant equity awards in the form of restricted stock units (RSUs) and stock options, all vesting over a four-year period. These developments indicate a focus on executive compensation alignment with performance and strengthening the finance leadership team.

Key Highlights

1NVIDIA approved the Fiscal Year 2012 Variable Compensation Plan to incentivize CEO and senior officers with cash bonuses tied to corporate net income and individual performance.
2The 2012 Variable Compensation Plan allocates 50% of potential awards to corporate targets and 50% to individual targets, with potential payouts up to 200% for each component.
3The company appointed Michael Byron as Vice President of Finance and principal accounting officer, effective March 21, 2011.
4Michael Byron's compensation includes an annual base salary of $340,000.
5Mr. Byron will receive a potential lump sum bonus of up to $115,000 if required to repay his previous Cisco signing bonus.
6He was granted 20,000 restricted stock units (RSUs) vesting over four years.
7Mr. Byron also received a stock option to purchase 50,000 shares of common stock, with vesting over four years.

NVIDIA CORP 8-K Report, Executive Changes (Mar 25, 2011)

Summary

Key Highlights

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