¨ | Preliminary Proxy Statement |
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ý | Definitive Proxy Statement |
¨ | Definitive Additional Materials |
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NVIDIA CORPORATION |
(Name of Registrant as Specified In Its Charter) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
ý | No fee required. | ||
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Date and time: | Tuesday, May 23, 2017 at 10:30 a.m. Pacific Daylight Time | |||
Location: | Online at www.virtualshareholdermeeting.com/NVIDIA2017 | |||
Items of business: | • Election of twelve directors nominated by the Board of Directors• Approval of our executive compensation• Approval of the frequency of holding a vote on executive compensation• Ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal year 2018 | |||
Transaction of other business properly brought before the meeting | ||||
Record date: | You can attend, and vote at, the annual meeting if you were a stockholder of record at the close of business on March 24, 2017. | |||
Virtual meeting admission: | We will be holding our annual meeting online only this year at www.virtualshareholdermeeting.com/NVIDIA2017. To participate in the annual meeting, you will need the control number included on your notice of Internet availability of the proxy materials or your proxy card (if you received a printed copy of the proxy materials). | |||
Pre-meeting forum: | The online format for the annual meeting also allows us to communicate more effectively with you via a pre-meeting forum that you can enter by visiting www.proxyvote.com. On our pre-meeting forum, you can submit questions in advance of the annual meeting, and also access copies of our proxy statement and annual report. |
PAGE | |
2007 Plan | NVIDIA Corporation Amended and Restated 2007 Equity Incentive Plan |
2012 ESPP | NVIDIA Corporation Amended and Restated 2012 Employee Stock Purchase Plan |
2016 Meeting | 2016 Annual Meeting of Stockholders |
2017 Meeting | 2017 Annual Meeting of Stockholders |
2018 Meeting | 2018 Annual Meeting of Stockholders |
AC | Audit Committee |
Board | The Company’s Board of Directors |
CC | Compensation Committee |
CD&A | Compensation Discussion and Analysis |
CEO | Chief Executive Officer |
Company | NVIDIA Corporation, a Delaware corporation |
Control Number | Identification number for each stockholder included in Notice or Proxy Card |
Dodd Frank Act | Dodd-Frank Wall Street Reform and Consumer Protection Act |
Exchange Act | Securities Exchange Act of 1934, as amended |
Exequity | Exequity LLP, the CC’s independent compensation consultant |
FASB | Financial Accounting Standards Board |
Fiscal 2016 | The Company’s fiscal year 2016 (January 26, 2015 to January 31, 2016) |
Fiscal 2017 | The Company’s fiscal year 2017 (February 1, 2016 to January 29, 2017) |
Fiscal 2018 | The Company’s fiscal year 2018 (January 30, 2017 to January 28, 2018) |
Form 10-K | The Company’s Annual Report on Form 10-K for Fiscal 2017 filed with the SEC on March 1, 2017 |
GAAP | Generally accepted accounting principles |
Internal Revenue Code | U.S. Internal Revenue Code of 1986, as amended |
Lead Director | Lead independent director |
MY PSUs | PSUs with a three-year performance metric |
NASDAQ | The NASDAQ Stock Market LLC |
NCGC | Nominating and Corporate Governance Committee |
NEOs | Named Executive Officers consisting of our CEO, our chief financial officer and our other three executive officers |
Non-GAAP Operating Income | GAAP operating income adjusted for stock-based compensation expense, product warranty charge (Fiscal 2016 only), legal settlement costs (Fiscal 2017 only), acquisition-related costs, contributions (Fiscal 2017 only) and restructuring and other charges, as the Company reports in its respective earnings materials. The net aggregate adjustment to GAAP operating income for these items for Fiscal 2017 was $287 million, and for Fiscal 2016 was $378 million. Please see Reconciliation of Non-GAAP Financial Measures in our Compensation Discussion and Analysis for a reconciliation between the non-GAAP measures and GAAP results |
Notice | Notice of Internet Availability of Proxy Materials |
NYSE | New York Stock Exchange |
PSUs | Performance stock units |
PwC | PricewaterhouseCoopers LLP |
RSUs | Restricted stock units |
S&P 500 | Standard & Poor’s 500 Composite Index |
SEC | U.S. Securities and Exchange Commission |
Stretch Operating Plan | Maximum goal attainment under the Variable Cash Plan, SY PSUs and MY PSUs |
SY PSUs | PSUs with a single-year performance metric, vesting over four years |
Target Compensation Plan | Target goal attainment under the Variable Cash Plan, SY PSUs and MY PSUs |
Threshold | Threshold goal attainment under the Variable Cash Plan, SY PSUs and MY PSUs |
TSR | Total shareholder return |
Variable Cash Plan | The Company’s variable cash compensation plan |
Date and time: | Tuesday, May 23, 2017 at 10:30 a.m. Pacific Daylight Time |
Location: | Online at www.virtualshareholdermeeting.com/NVIDIA2017 |
Record date: | Stockholders as of March 24, 2017 are entitled to vote |
Admission to meeting: | You will need your Control Number to attend the annual meeting |
Matter | Page | Board Recommendation | Vote Required for Approval | Effect of Abstentions | Effect of Broker Non-Votes | ||||||
Management Proposals: | |||||||||||
Election of twelve directors | FOR each director nominee | More FOR than WITHHOLD votes | None | None | |||||||
Approval of our executive compensation | FOR | Majority of shares present | Against | None | |||||||
Approval of the frequency of holding a vote on executive compensation | 1 YEAR | Majority of shares present | Against | None | |||||||
Ratification of selection of PwC as our independent registered public accounting firm for Fiscal 2018 | FOR | Majority of shares present | Against | None |
Name | Age | Director Since | Occupation | Fiscal 2017 Committees | ||||||||||
AC | CC | NCGC | ||||||||||||
Robert K. Burgess | 59 | 2011 | Independent Consultant | Chair | ||||||||||
Tench Coxe | 59 | 1993 | Managing Director, Sutter Hill Ventures | Member | ||||||||||
Persis S. Drell | 61 | 2015 | Provost, Stanford University | Member | ||||||||||
James C. Gaither | 79 | 1998 | Managing Director, Sutter Hill Ventures | Member | ||||||||||
Jen-Hsun Huang | 54 | 1993 | President & CEO, NVIDIA Corporation | |||||||||||
Dawn Hudson | 59 | 2013 | Chief Marketing Officer, National Football League | Member | ||||||||||
Harvey C. Jones | 64 | 1993 | Managing Partner, Square Wave Ventures | Member | Member | |||||||||
Michael G. McCaffery | 63 | 2015 | Chairman & Managing Director, Makena Capital Management | Member | (1) | |||||||||
William J. Miller (2) | 71 | 1994 | Independent Consultant | Chair | ||||||||||
Mark L. Perry | 61 | 2005 | Independent Consultant | Chair | (1) | |||||||||
A. Brooke Seawell | 69 | 1997 | Venture Partner, New Enterprise Associates | Member | (1) | |||||||||
Mark A. Stevens | 57 | 2008 | (3) | Managing Partner, S-Cubed Capital | Member | Member |
ü Proxy access ü Declassified Board ü Majority voting for directors ü Active Board oversight of risk and risk management ü Stock ownership guidelines for our directors and executive officers ü 75% or greater attendance by each Board member at meetings of the Board and applicable committees | ü Independent Lead Director ü 11 out of 12 Board members independent ü At least annual Board and committee self-assessments ü Annual stockholder outreach, including Lead Director participation ü Independent directors frequently meet in executive sessions |
• | Attend the 2017 Meeting online and vote during the meeting; |
• | Submit another properly completed proxy card with a later date; |
• | Send a written notice that you are revoking your proxy to NVIDIA Corporation, 2701 San Tomas Expressway, Santa Clara, California 95050, Attention: Secretary; or |
• | Submit another proxy by telephone or Internet after you have already provided an earlier proxy. |
Proposal Number | Proposal Description | Vote Required for Approval | Effect of Abstentions | Effect of Broker Non-Votes | ||||
1 | Election of twelve directors | Directors are elected if they receive more FOR votes than WITHHOLD votes | None | None | ||||
2 | Approval of our executive compensation | FOR votes from the holders of a majority of shares present and entitled to vote | Against | None | ||||
3 | Approval of the frequency of holding a vote on executive compensation | The frequency receiving FOR votes from the holders of a majority of shares present and entitled to vote | Against | None | ||||
4 | Ratification of the selection of PwC as our independent registered public accounting firm for Fiscal 2018 | FOR votes from the holders of a majority of shares present and entitled to vote | Against | None |
What am I voting on? Electing the 12 director nominees identified below to hold office until the 2018 Meeting and until his or her successor is elected or appointed. Vote recommendation: FOR the election of each of the 12 director nominees. Vote required: Directors are elected if they receive more FOR votes than WITHHOLD votes. |
Name | Age | Director Since | Occupation | Independent | Other Public Company Boards | ||||||
Robert K. Burgess | 59 | 2011 | Independent Consultant | ü | 2 | ||||||
Tench Coxe | 59 | 1993 | Managing Director, Sutter Hill Ventures | ü | 2 | ||||||
Persis S. Drell | 61 | 2015 | Provost, Stanford University | ü | – | ||||||
James C. Gaither | 79 | 1998 | Managing Director, Sutter Hill Ventures | ü | – | ||||||
Jen-Hsun Huang | 54 | 1993 | President & CEO, NVIDIA Corporation | – | |||||||
Dawn Hudson | 59 | 2013 | Chief Marketing Officer, National Football League | ü | 2 | ||||||
Harvey C. Jones | 64 | 1993 | Managing Partner, Square Wave Ventures | ü | – | ||||||
Michael G. McCaffery | 63 | 2015 | Chairman & Managing Director, Makena Capital Management | ü | – | ||||||
William J. Miller (1) | 71 | 1994 | Independent Consultant | ü | 2 | ||||||
Mark L. Perry | 61 | 2005 | Independent Consultant | ü | 2 | ||||||
A. Brooke Seawell | 69 | 1997 | Venture Partner, New Enterprise Associates | ü | 1 | ||||||
Mark A. Stevens | 57 | 2008 | (2) | Managing Partner, S-Cubed Capital | ü | 1 |
Directors’ Skills, Qualifications and Traits | |
• Integrity and candor• Independence• Senior management and operating experience necessary to oversee our business• Professional, technical and industry knowledge• Financial expertise• Financial community experience (including as an investor in other companies)• Marketing and brand management• Public company board experience• Experience with emerging technologies and new business models• Legal expertise• Diversity, including gender and ethnic background | • Academia experience• Desirability as a member of any committees of the Board• Willingness and ability to devote substantial time and effort to Board responsibilities• Ability to represent the interests of the stockholders as a whole rather than special interest groups or constituencies• All relationships between the proposed nominee and any of our stockholders, competitors, customers, suppliers or other persons with a relationship to NVIDIA• Ability to commit significant time to the Company’s oversight• Overall service to NVIDIA, including past attendance at Board and committee meetings and participation and contributions to the activities of the Board |
Burgess | Coxe | Drell | Gaither | Huang | Hudson | Jones | McCaffery | Miller | Perry | Seawell | Stevens | ||||||||||||
Senior Management and Operations | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||
Industry and Technical | ü | ü | ü | ü | |||||||||||||||||||
Financial/Financial Community | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||
Public Company Board | ü | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||
Emerging Technologies and Business Models | ü | ü | ü | ü | |||||||||||||||||||
Marketing and Brand Management | ü | ü | |||||||||||||||||||||
Legal | ü | ü |
ROBERT K. BURGESS | Robert K. Burgess has served as an independent investor and board member to technology companies since 2005. He was chief executive officer from 1996 to 2005 of Macromedia, Inc., a provider of internet and multimedia software, which was acquired by Adobe Systems Incorporated; he also served from 1996 to 2005 on its board of directors, as chairman of its board of directors from 1998 to 2005 and as executive chairman for his final year. Previously, he held key executive positions from 1984 to 1991 at Silicon Graphics, Inc. (SGI), a graphics and computing company; from 1991 to 1995, served as chief executive officer and a board member of Alias Research, Inc., a publicly traded 3D software company, until its acquisition by SGI; and resumed executive positions at SGI during 1996. Mr. Burgess serves on the board of Adobe and Rogers Communications Inc., a communications and media company, and has served on the boards of several privately-held companies. He was a director of IMRIS Inc., a provider of image guided therapy solutions, until 2013. He holds a BCom degree from McMaster University. Mr. Burgess brings to the Board senior management and operating experience and expertise in the areas of financial- and risk-management. He has a broad understanding of the roles and responsibilities of a corporate board and provides valuable insight on a range of issues in the technology industry. | ||
Independent Consultant | |||
Age: 59 | |||
Director Since: 2011 | |||
Committees: CC | |||
TENCH COXE | Tench Coxe has been a managing director of Sutter Hill Ventures, a venture capital investment firm, since 1989, where he focuses on investments in the IT sector. Prior to joining Sutter Hill Ventures in 1987, he was director of marketing and MIS at Digital Communication Associates. He serves on the board of directors of Mattersight Corp., a customer loyalty software firm, Artisan Partners Asset Management Inc., an institutional money management firm, and several privately held technology companies. Mr. Coxe holds a BA degree in Economics from Dartmouth College and an MBA degree from Harvard Business School. Mr. Coxe brings to the Board expertise in financial and transactional analysis and provides valuable perspectives on corporate strategy and emerging technology trends. His significant financial community experience gives the Board an understanding of the methods by which companies can increase value for their stockholders. | ||
Managing Director, Sutter Hill Ventures | |||
Age: 59 | |||
Director Since: 1993 | |||
Committees: CC | |||
PERSIS S. DRELL | Persis S. Drell has been the Provost of Stanford University since February 2017. A Professor of Materials Science and Engineering and Professor of Physics, Dr. Drell has been on the faculty at Stanford since 2002, and was the Dean of the Stanford School of Engineering from 2014 to 2017. She served as the Director of the U.S. Department of Energy SLAC National Accelerator Laboratory from 2007 to 2012. Dr. Drell is a member of the National Academy of Sciences and the American Academy of Arts and Sciences, and is a fellow of the American Physical Society. She has been the recipient of a Guggenheim Fellowship and a National Science Foundation Presidential Young Investigator Award. Dr. Drell holds a Ph.D. from the University of California Berkeley and an AB degree in Mathematics and Physics from Wellesley College. An accomplished researcher and educator, Dr. Drell brings to the Board expert leadership in guiding innovation in science and technology. | ||
Provost, Stanford University | |||
Age: 61 | |||
Director Since: 2015 | |||
Committees: CC | |||
JAMES C. GAITHER | James C. Gaither has been a partner of Sutter Hill Ventures, a venture capital investment firm, since 2000. He was a partner in the law firm Cooley LLP from 1971 to 2000 and senior counsel to the firm from 2000 to 2003. Prior to practicing law, he served as a law clerk to The Honorable Earl Warren, Chief Justice of the United States Supreme Court, special assistant to the Assistant Attorney General in the U.S. Department of Justice and staff assistant to U.S. President Lyndon Johnson. Mr. Gaither is a former president of the Board of Trustees at Stanford University, former vice chairman of the board of directors of The William and Flora Hewlett Foundation and past chairman of the Board of Trustees of the Carnegie Endowment for International Peace. Mr. Gaither holds a BA degree in Economics from Princeton University and a JD degree from Stanford University Law School. Mr. Gaither brings to the Board expertise in corporate strategy and negotiating complex transactions. He also provides valuable perspectives on the roles and responsibilities of a corporate board, including oversight of a public company’s legal and regulatory compliance and engagement with regulatory authorities. His significant financial community experience gives the Board an understanding of the methods by which companies can increase value for their stockholders. | ||
Managing Director, Sutter Hill Ventures | |||
Age: 79 | |||
Director Since: 1998 | |||
Committees: NCGC | |||
JEN-HSUN HUANG | Jen-Hsun Huang co-founded NVIDIA in 1993 and has since served as president, chief executive officer, and a member of the board of directors. Mr. Huang held a variety of positions from 1985 to 1993 at LSI Logic Corp., a computer chip manufacturer, including leading the business unit responsible for the company’s system-on-a-chip strategy. He was a microprocessor designer from 1984 to 1985 at Advanced Micro Devices, Inc., a semiconductor company. Mr. Huang holds a BSEE degree from Oregon State University and an MSEE degree from Stanford University. Mr. Huang is one of the technology industry’s most respected executives, having taken NVIDIA from a startup to a world leader in visual computing. Under his guidance, NVIDIA has compiled a record of consistent innovation and sharp execution, marked by products that have gained strong market share. | ||
President and Chief Executive Officer, NVIDIA Corporation | |||
Age: 54 | |||
Director Since: 1993 | |||
Committees: None | |||
DAWN HUDSON | Dawn Hudson has served as Chief Marketing Officer for the National Football League since 2014. Previously, she served from 2009 to 2014 as vice chairman of The Parthenon Group, an advisory firm focused on strategy consulting. She was president and chief executive officer of Pepsi-Cola North America, the beverage division of PepsiCo, Inc. for the U.S. and Canada, from 2005 to 2007 and president from 2002, and simultaneously served as chief executive officer of the foodservice division of PepsiCo, Inc. from 2005 to 2007. Previously, she spent 13 years in marketing, advertising and branding strategy, holding leadership positions at major agencies, such as D’Arcy Masius Benton & Bowles and Omnicom. She currently serves on the boards of directors of The Interpublic Group of Companies, Inc., an advertising holding company, and Amplify Snack Brands, Inc., a snack food company. She was a director of P.F. Chang’s China Bistro, Inc., a restaurant chain, from 2010 until 2012, of Allergan, Inc., a biopharmaceutical company, from 2008 until 2014, and of Lowes Companies, Inc., a home improvement retailer, from 2001 until 2015. She holds a BA degree in English from Dartmouth College. Ms. Hudson brings to the board experience in executive leadership. As a longtime marketing executive, she has valuable expertise and insights in leveraging brands, brand development and consumer behavior. She also has considerable corporate governance experience, gained from more than 10 years of serving on the boards of public companies. | ||
Chief Marketing Officer, National Football League | |||
Age: 59 | |||
Director Since: 2013 | |||
Committees: CC | |||
HARVEY C. JONES | Harvey C. Jones has been the managing partner of Square Wave Ventures, a private investment firm, since 2004. Mr. Jones has been an entrepreneur, high technology executive and active venture investor for over 30 years. In 1981, he co-founded Daisy Systems Corp., a computer-aided engineering company, ultimately serving as its president and chief executive officer until 1987. Between 1987 and 1998, he led Synopsys. Inc., a major electronic design automation company, serving as its chief executive officer for seven years and then as executive chairman. In 1997, Mr. Jones co-founded Tensilica Inc., a privately held technology IP company that developed and licensed high performance embedded processing cores. He served as chairman of the Tensilica board of directors from inception through its 2013 acquisition by Cadence Design Systems, Inc. In 2014, coincident with his investment in the company, Mr. Jones joined the board of directors of Tintri Inc., a private company that builds data storage solutions for virtual and cloud environments. In 2016, Mr. Jones joined the board of directors of and invested in TempoQuest, a development stage company seeking to develop advanced weather forecasting systems that exploit accelerated GPU technology. He also served as lead director on the board of directors of Wind River Systems, Inc. from 2006 until its sale to Intel Corporation in 2009. Mr. Jones holds a BS degree in Mathematics and Computer Sciences from Georgetown University and an MS degree in Management from Massachusetts Institute of Technology. Mr. Jones brings to the board an executive management background, an understanding of semiconductor technologies and complex system design. He provides valuable insight into innovation strategies, research and development efforts, as well as management and development of our technical employees. His financial expertise qualifies him to serve as an “audit committee financial expert” within the meaning of SEC rules, and his significant financial community experience gives the Board an understanding of the methods by which companies can increase value for their stockholders. | ||
Managing Partner, Square Wave Ventures | |||
Age: 64 | |||
Director Since: 1993 | |||
Committees: CC, NCGC | |||
MICHAEL G. MCCAFFERY | Michael G. McCaffery is the Chairman and a Managing Director of Makena Capital Management, an investment management firm. From 2005 to 2013, he was the Chief Executive Officer of Makena Capital Management. From 2000 to 2006, he was the President and Chief Executive Officer of the Stanford Management Company, the university subsidiary charged with managing Stanford University’s financial and real estate investments. Prior to Stanford Management Company, Mr. McCaffery was President and Chief Executive Officer of Robertson Stephens and Company, a San Francisco-based investment bank and investment management firm, from 1993 to 2009, and also served as Chairman in 2000. Mr. McCaffery serves on the board of directors, or on the advisory boards, of several privately held companies and non-profits. He was a director of KB Home, a homebuilding company, from 2003 until 2015. Mr. McCaffery is a Trustee of the Rhodes Scholarship Trust. Mr. McCaffery holds a BA degree from the Woodrow Wilson School of Public and International Affairs at Princeton University, a BA Honours degree and an MA degree in Politics, Philosophy and Economics from Merton College, Oxford University, Oxford, England, and an MBA degree from the Stanford Graduate School of Business. Mr. McCaffery brings to the Board a broad array of business, investment and real estate experience and recognized expertise in financial matters, as well as a demonstrated commitment to good corporate governance. His financial expertise qualifies him to serve as an “audit committee financial expert” within the meaning of SEC rules. | ||
Chairman and Managing Director, Makena Capital Management | |||
Age: 63 | |||
Director Since: 2015 | |||
Committees: AC | |||
WILLIAM J. MILLER | William J. Miller has served as an independent consultant since 1999 and is on the board of directors of Waters Corp., a scientific instrument manufacturing company; and Digimarc Corp., a developer and supplier of secure identification products and digital watermarking technology. Mr. Miller served as a director of Glu Mobile, Inc., a publisher of mobile games, from 2007 to March 2017. He was president, chief executive officer and chairman of the board of directors from 1996 to 1999 of Avid Technology, Inc., a provider of digital tools for multimedia. He was chief executive officer and a board director from 1992 to 1995 of Quantum Corp., a mass storage company, where he was chairman for three years. From 1981 to 1992, he held various positions at Control Data Corp., a supplier of computer hardware, software and services, including executive vice president and president, information services. He holds a BA degree in Communications and a JD degree from the University of Minnesota. Mr. Miller brings to the Board considerable leadership and corporate governance experience and an understanding of the roles and responsibilities of a corporate board. His financial expertise qualifies him to serve as an “audit committee financial expert” within the meaning of SEC rules. | ||
Independent Consultant | |||
Age: 71 | |||
Director Since: 1994 | |||
Committees: NCGC | |||
MARK L. PERRY | Mark L. Perry serves on the boards of, and consults for, various companies and non-profit organizations. From 2012 to 2015, Mr. Perry served as an Entrepreneur-in-Residence at Third Rock Ventures, a venture capital firm. He served from 2007 to 2011 as president and chief executive officer of Aerovance, Inc., a biopharmaceutical company. He was an executive officer from 1994 to 2004 at Gilead Sciences, Inc., a biopharmaceutical company, serving in a variety of capacities, including general counsel, chief financial officer, and executive vice president of operations, responsible for worldwide sales and marketing, legal, manufacturing and facilities; he was also its senior business advisor until 2007. From 1981 to 1994, Mr. Perry was with the law firm Cooley LLP, where he was a partner for seven years. He serves on the boards of directors of Global Blood Therapeutics, Inc. and MyoKardia, Inc., both biopharmaceutical companies. Mr. Perry holds a BA degree in History from the University of California, Berkeley, and a JD degree from the University of California, Davis. Mr. Perry brings to the Board operating and finance experience gained in a large corporate setting. He has varied experience in legal affairs and corporate governance, and a deep understanding of the roles and responsibilities of a corporate board. His financial expertise qualifies him to serve as an “audit committee financial expert” within the meaning of SEC rules. | ||
Independent Consultant | |||
Age: 61 | |||
Director Since: 2005 | |||
Committees: AC | |||
A. BROOKE SEAWELL | A. Brooke Seawell has served since 2005 as a venture partner at New Enterprise Associates, and was a partner from 2000 to 2005 at Technology Crossover Ventures. He was executive vice president from 1997 to 1998 at NetDynamics, Inc., an application server software company, which was acquired by Sun Microsystems, Inc. He was senior vice president and chief financial officer from 1991 to 1997 of Synopsys, Inc., an electronic design automation software company. He serves on the board of directors of Tableau Software, Inc., a business intelligence software company, and several privately held companies. Mr. Seawell served on the board of directors of Glu Mobile, Inc., a publisher of mobile games, from 2006 to 2014, and of Informatica Corp., a data integration software company, from 1997 to 2015. Mr. Seawell is a member of the Stanford University Athletic Board and previously served on the Management Board of the Stanford Graduate School of Business. Mr. Seawell holds a BA degree in Economics and an MBA degree in Finance from Stanford University. Mr. Seawell brings to the Board operational expertise and senior management experience, including knowledge of the complex issues facing public companies, and a deep understanding of accounting principles and financial reporting. His financial expertise qualifies him to serve as an “audit committee financial expert” within the meaning of SEC rules and his significant financial community experience gives the Board an understanding of the methods by which companies can increase value for their stockholders. | ||
Venture Partner, New Enterprise Associates | |||
Age: 69 | |||
Director Since: 1997 | |||
Committees: AC | |||
MARK A. STEVENS | Mark A. Stevens has been the managing partner of S-Cubed Capital, a private family office investment firm, since 2012. He was a managing partner from 1993 to 2011 of Sequoia Capital, a venture capital investment firm, where he had been an associate for the preceding four years. Previously, he held technical sales and marketing positions at Intel Corporation, and was a member of the technical staff at Hughes Aircraft Co. Mr. Stevens serves as a member of the board of directors of Quantenna Communications, Inc., a provider of Wi-Fi solutions, and served from 2006 to 2012 as a member of the board of directors of Alpha and Omega Semiconductor Limited. He is a Trustee of the University of Southern California and a part-time lecturer at the Stanford University Graduate School of Business. Mr. Stevens holds a BSEE degree, a BA degree in Economics and an MS degree in Computer Engineering from the University of Southern California and an MBA degree from Harvard Business School. Mr. Stevens brings to the Board a deep understanding of the technology industry, and the drivers of structural change and high-growth opportunities. He provides valuable insight regarding corporate strategy development and the analysis of acquisitions and divestitures. His significant financial community experience gives the Board an understanding of the methods by which companies can increase value for their stockholders. | ||
Managing Partner, S-Cubed Capital | |||
Age: 57 | |||
Director Since: 2008 (previously served 1993-2006) | |||
Committees: AC, NCGC | |||
• | Determining an appropriate schedule of Board meetings, seeking to ensure that the independent members of the Board can perform their duties responsibly while not interfering with the flow of our operations; |
• | Working with the CEO, and seeking input from all directors and other relevant management, as to the preparation of the agendas for Board meetings; |
• | Advising the CEO on a regular basis as to the quality, quantity and timeliness of the flow of information requested by the Board from our management with the goal of providing what is necessary for the independent members of the Board to effectively and responsibly perform their duties, and, although our management is responsible for the preparation of materials for the Board, the Lead Director may specifically request the inclusion of certain material; and |
• | Coordinating, developing the agenda for, and moderating executive sessions of the independent members of the Board, and acting as principal liaison between the independent members of the Board and the CEO on sensitive issues. |
AC | CC | NCGC | ||||||||||
Director | Before 2017 Meeting | After 2017 Meeting | Before 2017 Meeting | After 2017 Meeting | Before 2017 Meeting | After 2017 Meeting | ||||||
Robert K. Burgess | Chair | Chair | ||||||||||
Tench Coxe | Member | Member | ||||||||||
Persis S. Drell | Member | Member | ||||||||||
James C. Gaither | Member | Member | ||||||||||
Jen-Hsun Huang* | ||||||||||||
Dawn Hudson | Member | Member | ||||||||||
Harvey C. Jones | Member | Member | Member | Member | ||||||||
Michael G. McCaffery | Member | Member | ||||||||||
William J. Miller | Chair | Chair | ||||||||||
Mark L. Perry | Chair | Chair | ||||||||||
A. Brooke Seawell | Member | Member | ||||||||||
Mark A. Stevens | Member | Member | Member | Member |
AC | CC | NCGC | |||
Fiscal 2017 Members | Mark L. Perry (Chair) Michael G. McCaffery A. Brooke Seawell Mark A. Stevens | Robert K. Burgess (Chair) Tench Coxe Persis S. Drell Dawn Hudson Harvey C. Jones | William J. Miller (Chair) James C. Gaither Harvey C. Jones Mark A. Stevens | ||
Meetings in Fiscal 2017 | 13 | 6 | 3 | ||
• Oversees our corporate accounting and financial reporting process;• Oversees our internal audit function;• Determines and approves the engagement, retention and termination of the independent registered public accounting firm, or any new independent registered public accounting firm;• Evaluates the performance of and assesses the qualifications of our independent registered public accounting firm;• Reviews and approves the retention of the independent registered public accounting firm to perform any proposed permissible non-audit services;• Confers with management and our independent registered public accounting firm regarding the results of the annual audit, the results of our quarterly financial statements and the effectiveness of internal control over financial reporting;• Reviews the financial statements to be included in our quarterly report on Form 10-Q and annual report on Form 10-K;• Reviews earnings press releases, as well as the substance of financial information and earnings guidance provided to analysts on our quarterly earnings calls;• Prepares the report required to be included by the SEC rules in our annual proxy statement or annual report on Form 10-K; and• Establishes procedures for the receipt, retention and treatment of complaints we receive regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters. | • Reviews and approves our overall compensation strategy and policies;• Reviews and recommends to the Board the compensation of our Board members;• Reviews and approves the compensation and other terms of employment of Mr. Huang and other executive officers;• Reviews and approves corporate performance goals and objectives relevant to the compensation of our executive officers and other senior management;• Reviews and approves the disclosure contained in CD&A and considers whether to recommend that it be included in the proxy statement and Form 10-K;• Administers our stock option and purchase plans, variable compensation plans and other similar programs; and• Assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking. | • Identifies, reviews and evaluates candidates to serve as directors;• Recommends candidates for election to our Board;• Makes recommendations to the Board regarding committee membership and chairs;• Assesses the performance of the Board and its committees;• Reviews and assesses our corporate governance principles and practices;• Monitors changes in corporate governance practices and rules and regulations;• Approves related party transactions;• Establishes procedures for the receipt, retention and treatment of complaints we receive regarding violations of our Code of Conduct; and• Monitors the effectiveness of our anonymous tip process and corporate governance guidelines. |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | Total ($) | |||
Robert K. Burgess | 75,000 | 267,718 | 342,718 | |||
Tench Coxe | 75,000 | 267,718 | 342,718 | |||
Persis S. Drell | 75,000 | 267,718 | 342,718 | |||
James C. Gaither | 75,000 | 267,718 | 342,718 | |||
Dawn Hudson | 75,000 | 267,718 | 342,718 | |||
Harvey C. Jones | 75,000 | 267,718 | 342,718 | |||
Michael G. McCaffery | 75,000 | 267,718 | 342,718 | |||
William J. Miller | 75,000 | 267,718 | 342,718 | |||
Mark L. Perry | 75,000 | 267,718 | 342,718 | |||
A. Brooke Seawell | 75,000 | 267,718 | 342,718 | |||
Mark A. Stevens | 75,000 | 267,718 | 342,718 |
(1) | On May 19, 2016, each non-employee director received his or her 2016 Program RSU grant for 6,213 shares. Amounts shown in this column do not reflect dollar amounts actually received by the director. Instead, these amounts reflect the aggregate full grant date fair value calculated in accordance with FASB Accounting Standards Codification Topic 718, or FASB ASC Topic 718, for awards granted during Fiscal 2017. The assumptions used in the calculation of values of the awards are set forth under Note 2 to our consolidated financial statements titled “Stock-Based Compensation” in our Form 10-K. The grant date fair value per share for these awards as determined under FASB ASC Topic 718 was $43.09. |
Name | RSUs | Stock Options | Name | RSUs | Stock Options | |||||||||
Robert K. Burgess | 16,496 | 66,041 | Michael G. McCaffery | 27,152 | — | |||||||||
Tench Coxe | 3,107 | — | William J. Miller | 28,704 | 167,820 | |||||||||
Persis S. Drell | 24,046 | — | Mark L. Perry | 3,107 | — | |||||||||
James C. Gaither | 16,496 | 47,269 | A. Brooke Seawell | 3,107 | 132,820 | |||||||||
Dawn Hudson | 23,706 | 105,177 | Mark A. Stevens | 3,107 | 120,942 | |||||||||
Harvey C. Jones | 16,496 | — |
Name of Beneficial Owner | Shares Owned | Shares Issuable Within 60 Days | Total Shares Beneficially Owned | Percent | ||||||||
NEOs: | ||||||||||||
Jen-Hsun Huang | 21,481,120 | (1) | 2,090,460 | 23,571,580 | 4.02% | |||||||
Colette M. Kress | 22,999 | 108,812 | 131,811 | * | ||||||||
Ajay K. Puri | 180,246 | 306,748 | 486,994 | * | ||||||||
David M. Shannon | 269,048 | (2) | 84,363 | 353,411 | * | |||||||
Debora Shoquist | 52,027 | 102,925 | 154,952 | * | ||||||||
Directors, not including Mr. Huang: | ||||||||||||
Robert K. Burgess | 45,796 | 76,324 | 122,120 | * | ||||||||
Tench Coxe | 1,459,839 | (3) | — | 1,459,839 | * | |||||||
Persis S. Drell | 3,106 | 10,283 | 13,389 | * | ||||||||
James C. Gaither | 185,074 | (4) | 57,552 | 242,626 | * | |||||||
Dawn Hudson | 6,104 | 105,177 | 111,281 | * | ||||||||
Harvey C. Jones | 834,698 | (5) | 10,283 | 844,981 | * | |||||||
Michael G. McCaffery | 2,361 | 10,283 | 12,644 | * | ||||||||
William J. Miller | 290,000 | (6) | 167,820 | 457,820 | * | |||||||
Mark L. Perry | 109,185 | (7) | — | 109,185 | * | |||||||
A. Brooke Seawell | 130,000 | (8) | 132,820 | 262,820 | * | |||||||
Mark A. Stevens | 1,936,819 | (9) | 120,942 | 2,057,761 | * | |||||||
Directors and executive officers as a group (17 persons) | 27,008,422 | (10) | 3,384,792 | 30,393,214 | 5.17% | |||||||
5% Stockholders: | ||||||||||||
FMR LLC | 69,928,236 | (11) | — | 69,928,236 | 11.96% | |||||||
The Vanguard Group, Inc. | 34,983,002 | (12) | — | 34,983,002 | 5.98% | |||||||
BlackRock, Inc. | 33,570,738 | (13) | — | 33,570,738 | 5.74% |
(1) | Includes (a) 15,945,917 shares of common stock held by Jen-Hsun Huang and Lori Huang, as co-trustees of the Jen-Hsun and Lori Huang Living Trust, u/a/d May 1, 1995, or the Huang Trust; (b) 1,237,239 shares of common stock held by J. and L. Huang Investments, L.P., of which the Huang Trust is the general partner; (c) 557,000 shares of common stock held by The Huang 2012 Irrevocable Trust, of which Mr. Huang and his wife are co-trustees; (d) 769,705 shares of common stock held by The Jen-Hsun Huang 2016 Annuity Trust I, of which Mr. Huang is trustee; (e) 769,705 shares of common stock held by The Jen-Hsun Huang 2016 Annuity Trust II, of which Mr. Huang is trustee; (f) 769,705 shares of common stock held by The Lori Lynn Huang 2016 Annuity Trust I, of which Mr. Huang’s wife is trustee; and (g) 769,705 shares of common stock held by The Lori Lynn Huang 2016 Annuity Trust II, of which Mr. Huang’s wife is trustee. By virtue of their status as co-trustees of the Huang Trust and The Huang 2012 Irrevocable Trust, each of Mr. Huang and his wife may be deemed to have shared beneficial ownership of the shares referenced in (a) - (c), and to have shared power to vote or to direct the vote or to dispose of or direct the disposition of such shares. |
(2) | Includes (a) 30,800 shares of common stock held by the Shannon Revocable Trust, of which Mr. Shannon and his wife are co-trustees and of which Mr. Shannon exercises shared voting and investment power; (b) 40,000 shares of common stock held by The David M. Shannon 2016 Annuity Trust dtd 10/12/16, of which Mr. Shannon is trustee; and (c) 40,000 shares of common stock held by The Maureen M. Shannon 2016 Annuity Trust dtd 10/12/16, of which Mr. Shannon‘s wife is trustee. |
(3) | Includes (a) 171,312 shares of common stock held in a retirement trust over which Mr. Coxe exercises sole voting and investment power, and (b) 1,285,421 shares of common stock held in the Coxe Revocable Trust, of which Mr. Coxe and his wife are co-trustees and of which Mr. Coxe exercises shared voting and investment power. Mr. Coxe disclaims beneficial ownership in the shares held in the retirement trust and by the Coxe Revocable Trust, except to the extent of his pecuniary interest therein. |
(4) | Includes 175,266 shares of common stock held by the James C. Gaither Revocable Trust U/A/D 9/28/2000, of which Mr. Gaither is the trustee and of which Mr. Gaither exercises sole voting and investment power. |
(5) | Includes (a) 756,970 shares of common stock held in the H.C. Jones Living Trust, of which Mr. Jones is trustee and of which Mr. Jones exercises sole voting and investment power, and (b) (i) 21,840 shares of common stock owned by the Gregory C. Jones Trust, of which Mr. Jones is co-trustee and of which Mr. Jones exercises shared voting and investment power, (ii) 21,840 shares of common stock owned by the Carolyn E. Jones Trust, of which Mr. Jones is a co-trustee and of which Mr. Jones exercises shared voting and investment power, and (iii) 21,840 shares of common stock owned by the Harvey C. Jones III Trust, of which Mr. Jones is a co-trustee and of which Mr. Jones exercises shared voting and investment power, or collectively, the Jones Children Trusts. Mr. Jones disclaims beneficial ownership of the 65,520 shares of common stock held by the Jones Children Trusts, except to the extent of his pecuniary interest therein. |
(6) | Represents shares of common stock held by the Millbor Family Trust, of which Mr. Miller and his wife are co-trustees and of which Mr. Miller exercises shared voting and investment power. |
(7) | Includes 50,000 shares of common stock held by The Perry & Pena Family Trust, of which Mr. Perry and his wife are co-trustees and of which Mr. Perry exercises shared voting and investment power. |
(8) | Represents shares of common stock held by the Rosemary & A. Brooke Seawell Revocable Trust U/A dated 1/20/2009, of which Mr. Seawell and his wife are co-trustees and of which Mr. Seawell exercises shared voting and investment power. |
(9) | Includes 1,904,602 shares of common stock held by the 3rd Millennium Trust, of which Mr. Stevens and his wife are co-trustees and of which Mr. Stevens exercises shared voting and investment power. |
(10) | Includes shares owned by all directors and executive officers. |
(11) | This information is based solely on a Schedule 13G/A, dated February 13, 2017, filed with the SEC on February 14, 2017 by FMR LLC, or FMR, reporting its beneficial ownership as of December 30, 2016. The Schedule 13G/A reports that FMR has sole voting power with respect to 14,598,748 shares and sole dispositive power with respect to 69,928,236 shares. FMR is located at 245 Summer Street, Boston, Massachusetts 02210. |
(12) | This information is based solely on a Schedule 13G/A, dated February 9, 2017, filed with the SEC on February 10, 2017 by The Vanguard Group, Inc., or Vanguard, reporting its beneficial ownership as of December 31, 2016. The Schedule 13G/A reports that Vanguard has sole voting power with respect to 837,592 shares and sole dispositive power with respect to 34,054,895 shares. Vanguard is located at 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. |
(13) | This information is based solely on a Schedule 13G/A, dated January 25, 2017, filed with the SEC on January 25, 2017 by BlackRock, Inc., or BlackRock, reporting its beneficial ownership as of December 31, 2016. The Schedule 13G/A reports that BlackRock has sole voting power with respect to 29,046,901 shares and sole dispositive power with respect to 33,570,783 shares. BlackRock is located at 55 East 52nd Street, New York, New York 10055. |
What am I voting on? A non-binding vote, known as “say-on-pay,” to approve our Fiscal 2017 NEO compensation. Vote recommendation: FOR the approval of our Fiscal 2017 NEO compensation. Vote required: A majority of the shares present or represented by proxy. Effect of abstentions: Same as a vote AGAINST. Effect of broker non-votes: None. |
Jen-Hsun Huang | President and Chief Executive Officer |
Colette M. Kress | Executive Vice President and Chief Financial Officer |
Ajay K. Puri | Executive Vice President, Worldwide Field Operations |
David M. Shannon | Executive Vice President, Chief Administrative Officer and Secretary* |
Debora Shoquist | Executive Vice President, Operations |
Table of Contents to Compensation Discussion and Analysis | ||
Page | ||
• | Transitioning equity compensation to 100% PSUs (comprised of 67% SY PSUs and 33% MY PSUs) for our CEO, and 100% RSUs and PSUs (the latter comprised of 91% SY PSUs and 9% MY PSUs) for our other NEOs, in Fiscal 2017 |
• | Increasing the proportion of “at-risk” compensation to total target pay |
• | Introducing MY PSUs based on TSR |
• | Establishing separate financial metrics for each separate type of performance-based compensation |
• | Attracting, motivating and retaining a high-caliber executive team to provide leadership for our success in a dynamic, competitive market–We design our executive compensation program to position NVIDIA competitively among the companies against which we recruit and compete for talent. Our CC considers the total compensation necessary to attract, motivate and retain our NEOs. |
• | Paying for performance–Our NEOs’ compensation is heavily weighted toward “at-risk” compensation in the form of PSUs and variable cash compensation that are only earned upon achievement of pre-determined financial and operating performance metrics. |
• | Aligning our NEOs’ interests with those of our stockholders to create long-term value–Our CC uses cash to reward NEOs for near-term results, and equity to further motivate NEOs to increase and sustain shareholder value in the longer term. Equity compensation aligns the interests of stockholders and NEOs by creating a strong, direct link between stock price appreciation and operational performance (where applicable) and the ultimate value that NEOs realize. Our CC believes that if our NEOs own a significant amount of shares, they will be motivated to maximize longer-term shareholder value instead of short-term gain. Therefore, equity represents a significant portion of the total target value of the annual compensation opportunity for each NEO. |
What We Do | What We Don’t Do | |
üHeavily weight our NEO compensation toward “at-risk”, performance-based compensation üImpose a 12-month minimum vesting requirement for all NEO equity awards üStructure our SY PSUs and RSUs with 4-year vesting (and SY PSUs are additionally subject to an annual performance measure) üStructure our MY PSUs with a 3-year performance measure üEngage at least annually with our stockholders and corporate governance groups to discuss our executive compensation program and make changes to our pay practices based on their feedback üUtilize separate, distinct metrics for the “at-risk” components of our compensation where the amount of the award is subject to achievement of performance criteria üGrant a portion of our PSU awards with a multi-year performance metric for all NEOs üStructure our executive compensation program to minimize inappropriate risk-taking üCap SY PSU, MY PSU and Variable Cash Plan payouts üSelect peer companies with which we compete with for executive talent, and that have a similar business and are of similar size as us, and review their pay practices üSolicit advice from the CC’s independent compensation consultant üRely on long-standing, consistently-applied practices on the timing of equity grants üHave meaningful stock ownership guidelines for NEOs üEnforce “no-hedging” and “no-pledging” policies üMaintain a “clawback” policy for the recovery of performance-based cash and equity compensation üMake internal comparisons among executive officers when determining compensation üHave three or more independent non-employee directors serve on the CC | x Have employment contracts or severance agreements with NEOs providing for specific terms of employment or severance benefits, respectively x Provide change-in-control benefits to our executive officers x Provide for automatic equity vesting upon a change-in-control except for the provisions in our equity plans that are applicable to all of our employees if an acquiring company does not assume or substitute our outstanding stock awards x Offer our NEOs supplemental retirement benefits or perquisites that are not available to all NVIDIA employees x Provide tax gross-ups x Allow for the repricing of stock options without stockholder approval x Use discretion in performance incentive award determination x Pay dividends or dividend equivalents on unearned shares |
Management (CEO, Chief Financial Officer, Human Resources, Legal) |
• Our Chief Financial Officer and Human Resources and Legal departments (along with our Lead Director) conducted annual stockholder outreach efforts• Gathered peer group compensation data from the Radford Global Technology Survey based on parameters established by the CC• Developed and recommended to the CC performance goals for incentive plans based on annual financial operating plan, prior year results and market expectations• Conducted annual analysis and potential risk assessment related to compensation plans and structure and presented to the CC• Our CEO recommended to the CC the salary, target variable cash and target equity-based compensation to be awarded to our other NEOs |
Exequity |
• Reviewed and provided recommendations to the CC on the composition of our peer group• Analyzed the Radford survey data• Reviewed peer group and Radford data against our CEO’s pay• Conducted an analysis and review of our CEO’s compensation and advised our CC regarding his pay components• Advised the CC on equity grants to non-employee directors• Reviewed and provided feedback to the CC on our compensation risk analysis |
CC |
• Deliberated and made decisions regarding our CEO’s fiscal year salary, target variable cash and target equity-based compensation, as well as performance-based compensation payouts for the prior fiscal year• Solicited the input of the CEO in setting compensation for our other NEOs• Solely responsible for making all final NEO compensation decisions |
• | Exequity does not provide any services directly to NVIDIA (although NVIDIA does pay the cost of Exequity’s services on behalf of the CC) |
• | The amount of fees paid to Exequity by NVIDIA as a percentage of Exequity’s total revenue |
• | Exequity’s policies and procedures that are designed to prevent conflicts of interest |
• | Any business or personal relationship of Exequity or its individual compensation advisors with an NEO |
• | Any business or personal relationship of the individual compensation advisors with any member of our CC |
• | Any NVIDIA stock owned by Exequity or its individual compensation advisors |
• | With which we think we generally compete for executive talent; |
• | That have an established business, market presence, and complexity similar to us; and |
• | That are of similar size to us as measured by revenue and market capitalization at roughly 0.5-3.5x NVIDIA. |
Fiscal 2017 Peer Group (1) | |||
Activision Blizzard | Autodesk, Inc. | Juniper Networks, Inc. | Symantec Corporation |
Adobe Systems, Incorporated | Citrix Systems Inc. | Lam Research (2) | Tesla Motors, Inc. (3) |
Advanced Micro Devices | Electronic Arts, Inc. | Micron Technology, Inc. | VMWare (3) |
Agilent Technologies, Inc. | Intuit, Inc. | Network Appliance, Inc. | Xilinx |
Analog Devices, Inc. |
ü | The need to attract new talent to our executive team and retain existing talent in a highly competitive industry | ü | The need to motivate NEOs to address particular business challenges that are unique to any given year | |
ü | Feedback from our stockholders regarding our executive pay practices | ü | A review of an NEO’s current total compensation | |
ü | An NEO’s past performance and expected contribution to future results | ü | The CEO’s recommendations (other than for himself), because of his direct knowledge of the results delivered and leadership demonstrated by each NEO | |
ü | The Company’s performance and forecasted financial results | ü | The independent judgment of the members of our CC | |
ü | The trends in compensation paid to similarly situated officers at our peer companies | ü | The philosophy that the total compensation opportunity and the percentage of total compensation “at-risk” should increase with the level of responsibility | |
ü | The 25th, 50th and 75th percentiles of compensation paid to similarly situated executives at our peer companies based on the data gathered from the Radford Global Technology Survey | ü | The total compensation cost and stockholder dilution from executive compensation actions, in order to help us maintain a responsible cost structure for our compensation programs* | |
ü | Internal pay equity–an NEO’s responsibilities, the scope of each NEO’s position and the complexity of the department or function the NEO manages, relative to the NEO’s internal peers, compared to similarly situated executives |
“Fixed” Compensation | “At-Risk” Compensation | |||||||||
Base Salary | Variable Cash | SY PSUs | MY PSUs | RSUs (1) | ||||||
Form | Cash | Cash | Equity | Equity | Equity | |||||
Who Receives | All NEOs | All NEOs | All NEOs | All NEOs | All NEOs except the CEO | |||||
When Granted or Determined | Annually in Fiscal Q1 | Annually in Fiscal Q1 | On 3rd Wednesday in March | On 3rd Wednesday in March | On 3rd Wednesday in March and 6th business day of September (2) | |||||
When Paid or Earned | Paid retroactively to start of fiscal year, via biweekly payroll | Earned after fiscal year end, paid the following April, if performance threshold achieved | Shares eligible to vest determined after fiscal year end based on performance metric achievement | Shares eligible to vest determined after 3rd fiscal year end based on performance metric achievement | On each vesting date, subject to the NEO’s continued service on each such date | |||||
Performance Measure | N/A | Revenue (determines cash payout) | Non-GAAP Operating Income (determines number of shares eligible to vest) | TSR relative to the S&P 500 (determines number of shares eligible to vest) | N/A | |||||
Performance Period | N/A | 1 year | 1 year | 3 years | N/A | |||||
Vesting | N/A | N/A | If performance threshold achieved, 25% on approximately the 1-year anniversary of the date of grant; 12.5% semi-annually thereafter | If performance threshold achieved, 100% on approximately the 3-year anniversary of the date of grant | For March 2016 awards, 25% on approximately the 1-year anniversary of the date of grant; 12.5% semi-annually thereafter For September 2016 awards, 25% on approximately the 1-year anniversary of the date of grant; 6.25% quarterly thereafter (3) | |||||
Timeframe Emphasized | Annual | Annual | Long-term because of 4-year vesting schedule | Long-term because of 3-year performance period | Long-term because of 4-year vesting schedule | |||||
Maximum Amount That Can Be Earned | N/A | 200% of Variable Compensation Target | 200% of Target Compensation Plan SY PSU amount (capped at 150% for the CEO) Ultimate value delivered depends on stock price on date earned shares vest | 200% of Target Compensation Plan MY PSU amount (capped at 150% for the CEO) Ultimate value delivered depends on stock price on date earned shares vest | 100% of grant Ultimate value delivered depends on stock price on date shares vest |
Objectives of Fiscal 2017 Compensation Program | |
ü | Demonstrate our commitment to stockholder engagement and consideration by continuing features of our executive compensation program that they support |
ü | Increase focus on “at-risk” pay, particularly long-term PSUs that only become eligible to vest based on achievement of specific performance goals |
ü | Motivate our NEOs to achieve maximum results by giving them increased opportunity for reward upon financial, operational and stock price performance achievements |
ü | Achieve strong alignment of our NEOs’ interests with those of our stockholders with the use of MY PSUs that only become eligible to vest based on our relative multi-year TSR performance against a widely-recognized benchmark |
ü | Use different performance metrics for variable cash compensation, SY PSUs and MY PSUs to reward our NEOs separately for each performance achievement goal |
ü | Maintain pay practices competitive with our peers by granting PSUs and RSUs, which helps us manage dilution and retain our NEOs |
ü | Provide effective retention incentive award levels by granting equity to our NEOs in the form of RSUs and SY PSUs that are subject to a 4-year vesting schedule and MY PSUs that cliff vest after 3 years |
ü | Reinforce our culture of stock ownership by increasing the value of equity granted to our NEOs |
Variable Cash Plan | SY PSUs | MY PSUs | ||||
Performance Metric | Revenue | Non-GAAP Operating Income (see Definitions above) | TSR relative to the S&P 500 | |||
Performance Timeframe | 1 year | 1 year | 3 years | |||
CC’s Rationale for Performance Metric | Key indicator of our annual performance which drives value and contributes to Company’s long-term success Our executive team focuses on growth in the Company's specialized markets where our technologies did not previously exist; revenue growth is the best predictor of the Company's future success Distinct, separate metric from Non-GAAP Operating Income | Key indicator of our annual performance which drives value and contributes to Company’s long-term success Reflects both our annual revenue generation and effective management of operating expenses To ensure long-term performance emphasis, structured to vest over a 4-year period | Aligns directly with shareholder value creation over a 3-year period Provides direct comparison of our stock price performance (including dividends) against an index that represents a broader capital market with which we compete Relative (as opposed to absolute) nature of goals accounts for macroeconomic factors impacting the broader market and do not require financial forecasting | |||
Threshold Goal (25% payout for MY PSUs, 50% payout for Variable Cash and SY PSUs) (1)(2) | $4,800 million | $900 million | 25th percentile | |||
Target Compensation Plan Goal (100% payout) (2) | $5,200 million | $1,180 million | 50th percentile | |||
Stretch Operating Plan Goal (200% payout) (2)(3) | $5,700 million | $1,435 million | 75th percentile |
(1) | Achievement less than the Threshold goal would result in no payout. |
(2) | For achievement between Threshold and Target Compensation Plan and between Target Compensation Plan and Stretch Operating Plan, payouts would be determined using straight-line interpolation. |
(3) | Our CEO’s SY PSU and MY PSU payouts were capped at 150% of Target Compensation Plan to help manage internal pay equity. |
Variable Cash Plan | SY PSUs | MY PSUs | |||
Stretch Operating Plan goals require significant achievement; only possible with strong market factors and a very high level of management execution and corporate performance | ü | ü | ü | ||
Target Compensation Plan goals: | |||||
• Attainable with significant effort and success in execution, and was not certain | ü | ü | ü | ||
• Include budgeted investments in future growth businesses and revenue growth (as well as, for SY PSUs and MY PSUs, gross margin growth) that take into account both macroeconomic conditions and reasonable but challenging growth estimates for our ongoing and new businesses | ü | ü | ü | ||
• Set higher than Fiscal 2016 actual revenue and actual Non-GAAP Operating Income, as applicable, to recognize strong growth performance | ü | ü | |||
• Relative TSR performance must be at or above 50th percentile of market to earn awards at competitive compensation levels | ü | ||||
Threshold goals appropriately decelerate payout below Target Compensation Plan; set at attainable levels, high enough to create modest value, but not certain | ü | ü | ü |
(1) | Fiscal 2017 Threshold was set close to Fiscal 2016 actual achievement. Thus, our CC provided a greater Fiscal 2017 Threshold payout opportunity of 50% (compared to 25% in Fiscal 2016). |
(1) | Fiscal 2017 Threshold was set close to Fiscal 2016 actual achievement. Thus, our CC provided a greater Fiscal 2017 Threshold payout opportunity of 50% (compared to 25% in Fiscal 2016). |
(2) | See Definitions above. |
Fiscal 2016 Pay ($) | Fiscal 2017 Pay ($) | Change | Fiscal 2017 Pay Relative to Peer Group (percentile) | Fiscal 2017 Shares | |||||||||||||
Threshold | Target Compensation Plan | Stretch Operating Plan | |||||||||||||||
Target Cash | 2,000,000 | 2,000,000 | — | ||||||||||||||
Base Salary | 1,000,000 | 1,000,000 | |||||||||||||||
Target Variable Cash | 1,000,000 | 1,000,000 | (1) | ||||||||||||||
Target Equity | 7,000,000 | 8,640,000 | up 23% | ||||||||||||||
SY PSUs | 4,600,000 | 5,760,000 | 95,000 | 190,000 | 285,000 | (2) (3) | |||||||||||
MY PSUs | 2,400,000 | 2,880,000 | 47,500 | 95,000 | 142,500 | (2) | |||||||||||
Target Total | 9,000,000 | 10,640,000 | up 18% | 50th | (4) |
(1) | Based on our revenue achievement of 200% of Target Compensation Plan, Mr. Huang earned $2,000,000. |
(2) | Stretch Operating Plan payout capped at 150% of Target Compensation Plan to help manage internal pay equity. |
(3) | Based on Non-GAAP Operating Income achievement, the Stretch Operating Plan number of SY PSUs became eligible to vest over a four-year period beginning on the date of grant, with 25% vesting on March 15, 2017. |
(4) | Market position of target total compensation was set at the median as a result of the CC’s objective to balance internal pay equity with other NEOs and external market competitiveness with other peer CEOs. Mr. Huang’s Fiscal 2017 target equity compensation reflected an increase to bring it closer to market practices for our peer companies’ CEOs, while still remaining at the median of market, which the CC determined was appropriate to emphasize performance-based equity compensation in particular for Mr. Huang due to his responsibility as CEO. |
Fiscal 2016 Pay ($) (1) | Fiscal 2017 Pay ($) | Change | Fiscal 2017 Pay Relative to Peer Group (percentile) | Fiscal 2017 Shares | ||||||||||||||
Threshold | Target Compensation Plan | Stretch Operating Plan | ||||||||||||||||
Target Cash | 1,050,000 | 1,050,000 | — | |||||||||||||||
Base Salary | 775,000 | 775,000 | ||||||||||||||||
Target Variable Cash | 275,000 | 275,000 | (2) | |||||||||||||||
Target Equity | 2,392,335 | 3,011,500 | up 26% | |||||||||||||||
SY PSUs | 1,358,610 | 1,811,797 | 27,750 | 55,500 | 111,000 | (3) | ||||||||||||
MY PSUs | 147,675 | 195,870 | 3,000 | 6,000 | 12,000 | |||||||||||||
RSUs | 886,050 | 1,003,833 | (4) | |||||||||||||||
Target Total | 3,442,335 | 4,061,500 | up 18% | 50th | (5) |
(1) | Excludes an anniversary bonus of $1.0 million earned in Fiscal 2016 pursuant to Ms. Kress’ offer letter. The CC determined that this special bonus was necessary to attract Ms. Kress, in consideration of her compensation opportunity at her prior employer. |
(2) | Based on our revenue achievement of 200% of Target Compensation Plan, Ms. Kress earned $550,000. |
(3) | Based on Non-GAAP Operating Income achievement, the Stretch Operating Plan number of SY PSUs became eligible to vest over a four-year period beginning on the date of grant, with 25% vesting on March 15, 2017. |
(4) | In Fiscal 2017, Ms. Kress was granted a total of 30,750 RSUs. |
(5) | Market position of target total compensation was set at the median as a result of the CC’s objective to provide external market competitiveness with other peer chief financial officers. The target total compensation increase for Fiscal 2017 was structured primarily in the form of performance-based equity, to further align Ms. Kress’ interests with stockholders and long-term company performance. |
Fiscal 2016 Pay ($) | Fiscal 2017 Pay ($) | Change | Fiscal 2017 Pay Relative to Peer Group (percentile) | Fiscal 2017 Shares | ||||||||||||||
Threshold | Target Compensation Plan | Stretch Operating Plan | ||||||||||||||||
Target Cash | 1,350,000 | 1,400,000 | (1) | up 4% | ||||||||||||||
Base Salary | 875,000 | 900,000 | ||||||||||||||||
Target Variable Cash | 475,000 | 500,000 | ||||||||||||||||
Target Equity | 2,549,855 | 3,119,350 | up 22% | |||||||||||||||
SY PSUs | 1,417,680 | 1,878,143 | 28,750 | 57,500 | 115,000 | (2) | ||||||||||||
MY PSUs | 147,675 | 195,980 | 3,000 | 6,000 | 12,000 | |||||||||||||
RSUs | 984,500 | 1,045,227 | (3) | |||||||||||||||
Target Total | 3,899,855 | 4,519,350 | up 16% | 75th | (4) |
(1) | Mr. Puri’s base salary and target variable cash were increased in Fiscal 2017 due to his level of responsibility as head of worldwide field operations; a greater proportion of his cash increase was in the form of variable cash to further align his interest with our stockholders. Based on our revenue achievement of 200% of Target Compensation Plan, Mr. Puri earned $1,000,000. |
(2) | Based on Non-GAAP Operating Income achievement, the Stretch Operating Plan number of SY PSUs became eligible to vest over a four-year period beginning on the date of grant, with 25% vesting on March 15, 2017. |
(3) | In Fiscal 2017, Mr. Puri was granted a total of 32,000 RSUs. |
(4) | Market position of total target compensation was set at the 75th percentile due to Mr. Puri’s revenue-generating position as head of worldwide field operations and his role in helping the Company enter into new markets. The target total compensation increase for Fiscal 2017 was structured largely in the form of performance-based equity, to further align Mr. Puri’s interests with our stockholders and long-term company performance. |
Fiscal 2016 Pay ($) | Fiscal 2017 Pay ($) | Change | Fiscal 2017 Pay Relative to Peer Group (percentile) | Fiscal 2017 Shares | ||||||||||||||
Threshold | Target Compensation Plan | Stretch Operating Plan | ||||||||||||||||
Target Cash | 1,000,000 | 1,000,000 | — | |||||||||||||||
Base Salary | 800,000 | 800,000 | ||||||||||||||||
Target Variable Cash | 200,000 | 200,000 | (1) | |||||||||||||||
Target Equity | 1,506,285 | 1,365,300 | down 9% | |||||||||||||||
SY PSUs | 984,500 | 1,046,730 | 17,250 | 34,500 | 69,000 | (2) | ||||||||||||
MY PSUs | 78,760 | 84,952 | 1,400 | 2,800 | 5,600 | |||||||||||||
RSUs | 443,025 | 233,618 | (3) | |||||||||||||||
Target Total | 2,506,285 | 2,365,300 | down 6% | 50th | (4) |
(1) | Based on our revenue achievement of 200% of Target Compensation Plan, Mr. Shannon earned $400,000. |
(2) | Based on Non-GAAP Operating Income achievement, the Stretch Operating Plan number of SY PSUs became eligible to vest over a four-year period beginning on the date of grant, with 25% vesting on March 15, 2017. |
(3) | In Fiscal 2017, Mr. Shannon was granted a total of 7,700 RSUs, representing the first 50% of the RSU value to be delivered. No additional RSU grant was made to Mr. Shannon after he announced his planned retirement. |
(4) | Market position of total target compensation was set at the median due to responsibility and scope as head of human resources and legal, but decreased from Fiscal 2016 due to Mr. Shannon’s planned retirement. |
Fiscal 2016 Pay ($) | Fiscal 2017 Pay ($) | Change | Fiscal 2017 Pay Relative to Peer Group (percentile) | Fiscal 2017 Shares | ||||||||||||||
Threshold | Target Compensation Plan | Stretch Operating Plan | ||||||||||||||||
Target Cash | 850,000 | 850,000 | — | |||||||||||||||
Base Salary | 700,000 | 700,000 | ||||||||||||||||
Target Variable Cash | 150,000 | 150,000 | (1) | |||||||||||||||
Target Equity | 1,752,410 | 2,104,850 | up 20% | |||||||||||||||
SY PSUs | 984,500 | 1,272,700 | 19,500 | 39,000 | 78,000 | (2) | ||||||||||||
MY PSUs | 118,140 | 130,533 | 2,000 | 4,000 | 8,000 | |||||||||||||
RSUs | 649,770 | 701,617 | (3) | |||||||||||||||
Target Total | 2,602,410 | 2,954,850 | up 14% | 65th | (4) |
(1) | Based on our revenue achievement of 200% of Target Compensation Plan, Ms. Shoquist earned $300,000. |
(2) | Based on Non-GAAP Operating Income achievement, the Stretch Operating Plan number of SY PSUs became eligible to vest over a four-year period beginning on the date of grant, with 25% vesting on March 15, 2017. |
(3) | In Fiscal 2017, Ms. Shoquist was granted a total of 21,500 RSUs. |
(4) | Market position of total target compensation was set at the 65th percentile due to responsibility and scope as head of chips and systems operations, facilities and information technology. The target total compensation increase for Fiscal 2017 was structured primarily in the form of performance-based equity, to further align Ms. Shoquist’s interests with stockholders and long-term company performance. |
• | Our CEO and our Chief Financial Officer will be required to disgorge the net after-tax amount of that portion of the variable compensation payment that would not have been payable if the original interim or annual financial statements reflected the Restatement; and |
• | The Board or the committee of independent directors may require any other officer or employee to repay all (or a portion of) the variable compensation payment that would not have been payable if the original interim or annual financial statements reflected the Restatement, as determined by the Board or such committee in its sole discretion. In using its discretion, the Board or the independent committee may consider whether such person was involved in the preparation of our financial statements or otherwise caused the need for the Restatement and may, to the extent permitted by applicable law, recoup amounts by (1) requiring partial or full repayment by such person of any variable or incentive compensation or any gains realized on the exercise of stock options or on the open-market sale of vested shares, (2) canceling (in full or in part) any outstanding equity awards held by such person and/or (3) adjusting the future compensation of such person. |
Fiscal 2017 | Fiscal 2016 | ||||||||||
GAAP operating income | $ | 1,934 | $ | 747 | |||||||
Stock-based compensation expense | 248 | 205 | |||||||||
Legal settlement costs | 16 | — | |||||||||
Acquisition-related costs | 16 | 22 | |||||||||
Contributions | 4 | — | |||||||||
Restructuring and other charges | 3 | 131 | |||||||||
Product warranty charge | — | 20 | |||||||||
Non-GAAP Operating Income | $ | 2,221 | $ | 1,125 |
Compensation Design Features that Guard Against Excessive Risk-Taking | |
ü | Our compensation program encourages our employees to remain focused on both our short-term and long-term goals |
ü | We design our variable cash and PSU compensation programs for executives so that payouts are based on achievement of corporate performance targets, and we cap the potential award payout |
ü | We have internal controls over our financial accounting and reporting which is used to measure and determine the eligible compensation awards under our Variable Cash Plan and our SY PSUs |
ü | Financial plan target goals and final awards under our Variable Cash Plan and our SY PSUs are approved by the CC and consistent with the annual operating plan approved by the full Board each year |
ü | MY PSUs are designed with a relative goal |
ü | We have a compensation recovery policy applicable to all employees that allows NVIDIA to recover compensation paid in situations of fraud or material financial misconduct |
ü | All executive officer equity awards have multi-year vesting |
ü | We have stock ownership guidelines that we believe are reasonable and are designed to align our executive officers’ interests with those of our stockholders |
ü | We enforce a “no-hedging” policy and a “no-pledging” policy involving our common stock which prevents our employees from insulating themselves from the effects of NVIDIA stock price performance |
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($) | Total ($) | |||||||||||||||
Jen-Hsun Huang | 2017 | 996,216 | — | 9,188,400 | 2,000,000 | 9,622 | (3) | 12,194,238 | ||||||||||||||
President and Chief Executive Officer | 2016 | 1,018,941 | — | 7,456,900 | 1,490,566 | 4,694 | (4) | 9,971,101 | ||||||||||||||
2015 | 998,418 | — | 6,896,000 | 1,400,000 | 2,622 | (5) | 9,297,040 | |||||||||||||||
Colette M. Kress | 2017 | 769,609 | — | 3,299,770 | 550,000 | 4,286 | (6) | 4,623,665 | ||||||||||||||
Executive Vice President and Chief Financial Officer | 2016 | 789,680 | 1,000,000 | (7) | 2,692,935 | 409,906 | 3,710 | (6) | 4,896,231 | |||||||||||||
2015 | 773,774 | 1,500,000 | (8) | 2,247,920 | 550,000 | 3,210 | (6) | 5,074,904 | ||||||||||||||
Ajay K. Puri | 2017 | 889,573 | — | 3,378,130 | 1,000,000 | 11,283 | (9) | 5,278,986 | ||||||||||||||
Executive Vice President, Worldwide Field Operations | 2016 | 891,574 | — | 2,865,555 | 708,019 | 10,096 | (9) | 4,475,244 | ||||||||||||||
2015 | 873,616 | — | 1,734,325 | 750,000 | 9,024 | (6) | 3,366,965 | |||||||||||||||
David M. Shannon | 2017 | 794,435 | — | 1,442,128 | 400,000 | 10,225 | (6) | 2,646,788 | ||||||||||||||
Executive Vice President, Chief Administrative Officer and Secretary* | 2016 | 815,153 | — | 1,688,220 | 298,113 | 9,656 | (6) | 2,811,142 | ||||||||||||||
2015 | 798,735 | — | 1,455,830 | 400,000 | 6,511 | (6) | 2,661,076 | |||||||||||||||
Debora Shoquist | 2017 | 695,131 | — | 2,278,170 | 300,000 | 10,024 | (6) | 3,283,325 | ||||||||||||||
Executive Vice President, Operations | 2016 | 713,259 | — | 1,977,660 | 223,585 | 9,524 | (6) | 2,924,028 | ||||||||||||||
2015 | 698,893 | — | 1,510,205 | 300,000 | 9,024 | (6) | 2,518,122 |
(1) | Amounts shown in this column do not reflect dollar amounts actually received by the NEO. Instead, these amounts reflect the aggregate full grant date fair value calculated in accordance with FASB ASC Topic 718 for the respective fiscal year. The assumptions used in the calculation of values of the awards are set forth under Note 2 to our consolidated financial statements titled “Stock-Based Compensation” in our Form 10-K. With regard to the NEOs’ stock awards with performance-based vesting conditions, the reported grant date fair value assumes the probable outcome of the conditions at Target Compensation Plan, determined in accordance with applicable accounting standards. Based on the performance that was actually achieved for SY PSUs in Fiscal 2017, the grant date fair values of all stock awards would be $12,161,900 for Mr. Huang, $5,036,920 for Ms. Kress, $5,177,880 for Mr. Puri, $2,521,978 for Mr. Shannon and $3,498,870 for Ms. Shoquist. |
(2) | As applicable, reflects amounts earned in Fiscal 2017, 2016 and 2015 and paid in March or April of each respective year pursuant to our Variable Cash Plan for each respective year. For further information please see our Compensation Discussion and Analysis above. |
(3) | Represents an award for the filing of patents of which Mr. Huang is a named inventor with the U.S. Patent and Trademark Office, a contribution to a health savings account and imputed income from life insurance coverage. These benefits are available to all eligible NVIDIA employees. |
(4) | Represents a contribution to a health savings account and imputed income from life insurance coverage. These benefits are available to all eligible NVIDIA employees. |
(5) | Represents imputed income from life insurance coverage, which we provide to all eligible NVIDIA employees. |
(6) | Represents a match of contributions to our 401(k) savings plan and imputed income from life insurance coverage, which we provide to all eligible employees. |
(7) | Represents an anniversary bonus paid in Fiscal 2015 that was earned in Fiscal 2016. |
(8) | Represents a sign-on bonus paid in Fiscal 2014 that was earned in Fiscal 2015. |
(9) | Represents a match of contributions to our 401(k) savings plan, a contribution to a health savings account and imputed income from life insurance coverage, which we provide to all eligible employees. |
Name | Grant Date | Approval Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($) (2) | |||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||
Jen-Hsun Huang | 3/16/16 | 3/8/16 | (3) | — | 95,000 | 190,000 | 285,000 | — | 5,947,000 | (4) | |||||||||||||||||||||
3/16/16 | 3/8/16 | (5) | — | 47,500 | 95,000 | 142,500 | — | 3,241,400 | |||||||||||||||||||||||
3/8/16 | 3/8/16 | 500,000 | 1,000,000 | 2,000,000 | — | — | — | ||||||||||||||||||||||||
Colette M. Kress | 3/16/16 | 3/8/16 | (3) | — | 27,750 | 55,500 | 111,000 | — | 1,737,150 | (4) | |||||||||||||||||||||
3/16/16 | 3/8/16 | (5) | — | 3,000 | 6,000 | 12,000 | — | 259,860 | |||||||||||||||||||||||
3/16/16 | 3/8/16 | — | — | 19,250 | (6) | 602,525 | |||||||||||||||||||||||||
9/15/16 | 8/24/16 | — | — | 11,500 | (7) | 700,235 | |||||||||||||||||||||||||
3/8/16 | 3/8/16 | 137,500 | 275,000 | 550,000 | — | — | — | ||||||||||||||||||||||||
Ajay K. Puri | 3/16/16 | 3/8/16 | (3) | — | 28,750 | 57,500 | 115,000 | — | 1,799,750 | (4) | |||||||||||||||||||||
3/16/16 | 3/8/16 | (5) | — | 3,000 | 6,000 | 12,000 | — | 259,860 | |||||||||||||||||||||||
3/16/16 | 3/8/16 | — | — | 20,000 | (6) | 626,000 | |||||||||||||||||||||||||
9/9/16 | 8/24/16 | — | — | 12,000 | (7) | 692,520 | |||||||||||||||||||||||||
3/8/16 | 3/8/16 | 250,000 | 500,000 | 1,000,000 | — | — | — | ||||||||||||||||||||||||
David M. Shannon | 3/16/16 | 3/8/16 | (3) | — | 17,250 | 34,500 | 69,000 | — | 1,079,850 | (4) | |||||||||||||||||||||
3/16/16 | 3/8/16 | (5) | — | 1,400 | 2,800 | 5,600 | — | 121,268 | |||||||||||||||||||||||
3/16/16 | 3/8/16 | — | — | 7,700 | (6) | 241,010 | |||||||||||||||||||||||||
3/8/16 | 3/8/16 | 100,000 | 200,000 | 400,000 | — | — | — | ||||||||||||||||||||||||
Debora Shoquist | 3/16/16 | 3/8/16 | (3) | — | 19,500 | 39,000 | 78,000 | — | 1,220,700 | (4) | |||||||||||||||||||||
3/16/16 | 3/8/16 | (5) | — | 2,000 | 4,000 | 8,000 | — | 173,240 | |||||||||||||||||||||||
3/16/16 | 3/8/16 | — | — | 13,500 | (6) | 422,550 | |||||||||||||||||||||||||
9/9/16 | 8/24/16 | — | — | 8,000 | (7) | 461,680 | |||||||||||||||||||||||||
3/8/16 | 3/8/16 | 75,000 | 150,000 | 300,000 | — | — | — |
(1) | Represents range of awards payable under our 2017 Variable Cash Plan. |
(2) | Amounts shown in this column do not reflect dollar amounts actually received by the NEO. Instead, these amounts reflect the aggregate full grant date fair value calculated in accordance with FASB ASC Topic 718 for the awards. The assumptions used in the calculation of values of the awards are set forth under Note 2 to our consolidated financial statements titled “Stock-Based Compensation” in our Form 10-K. With regard to the stock awards with performance-based vesting conditions, the reported grant date fair value assumes the probable outcome of the conditions at Target Compensation Plan, determined in accordance with applicable accounting standards. |
(3) | Represents range of possible shares able to be earned with respect to SY PSUs. |
(4) | Based on the performance that was actually achieved for Fiscal 2017, the grant date fair value for the NEOs’ SY PSUs would be: $8,920,500 for Mr. Huang, $3,474,300 for Ms. Kress, $3,599,500 for Mr. Puri, $2,159,700 for Mr. Shannon and $2,441,400 for Ms. Shoquist. |
(5) | Represents range of possible shares able to be earned with respect to MY PSUs. |
(6) | Represents RSUs granted to Messrs. Puri and Shannon and Mses. Kress and Shoquist in the first quarter of Fiscal 2017 pursuant to the 2007 Plan. The CC approved these grants on March 8, 2016 for grant on March 16, 2016, the same day that semi-annual grants were made to all of our other eligible employees. |
(7) | Represents RSUs granted to Mr. Puri and Mses. Kress and Shoquist in the third quarter of Fiscal 2017 pursuant to the 2007 Plan. The CC approved these grants on August 24, 2016 for grant on September 9, 2016, the same day that semi-annual grants were made to all of our other eligible employees. Due to a trading window closure, Ms. Kress’ RSUs were instead granted on September 15, 2016. |
Name | Option Awards | Stock Awards | |||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) (1) | Option Expiration Date | Number of Units of Stock That Have Not Vested (#) | Market Value of Units of Stock That Have Not Vested ($) (2) | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares That Have Not Vested ($) (2) | ||||||||||||||||||
Jen-Hsun Huang | 83,336 | — | 18.10 | 3/16/2017 | — | — | — | — | |||||||||||||||||
250,000 | — | 10.56 | 9/14/2020 | — | — | — | — | ||||||||||||||||||
250,000 | — | 17.62 | 3/17/2021 | — | — | — | — | ||||||||||||||||||
250,000 | — | 14.465 | 9/20/2021 | — | — | — | — | ||||||||||||||||||
300,000 | — | 14.46 | 3/20/2022 | — | — | — | — | ||||||||||||||||||
300,000 | — | 13.71 | 9/18/2022 | — | — | — | — | ||||||||||||||||||
222,656 | 14,844 | (3) | 12.62 | 3/19/2023 | — | — | — | — | |||||||||||||||||
192,968 | 44,532 | (4) | 16.00 | 9/17/2023 | — | — | — | — | |||||||||||||||||
— | — | — | — | 24,312 | (5) | 2,717,352 | — | — | |||||||||||||||||
— | — | — | — | 225,000 | (6) | 25,148,250 | — | — | |||||||||||||||||
— | — | — | — | 206,250 | (7) | 23,052,563 | — | — | |||||||||||||||||
— | — | — | — | 285,000 | (8) | 31,854,450 | — | — | |||||||||||||||||
— | — | — | — | — | — | 110,000 | (9) | 12,294,700 | |||||||||||||||||
— | — | — | — | — | — | 95,000 | (10) | 10,618,150 | |||||||||||||||||
Colette M. Kress | — | — | — | — | 55,000 | (11) | 6,147,350 | — | — | ||||||||||||||||
— | — | — | — | 9,750 | (12) | 1,089,758 | — | — | |||||||||||||||||
— | — | — | — | 58,125 | (6) | 6,496,631 | — | — | |||||||||||||||||
— | — | — | — | 13,000 | (13) | 1,453,010 | — | — | |||||||||||||||||
— | — | — | — | 14,063 | (14) | 1,571,822 | — | — | |||||||||||||||||
— | — | — | — | 86,250 | (7) | 9,640,163 | — | — | |||||||||||||||||
— | — | — | — | 16,875 | (15) | 1,886,119 | — | — | |||||||||||||||||
— | — | — | — | 111,000 | (8) | 12,406,470 | — | — | |||||||||||||||||
— | — | — | — | 19,250 | (16) | 2,151,573 | — | — | |||||||||||||||||
— | — | — | — | 11,500 | (17) | 1,285,355 | — | — | |||||||||||||||||
— | — | — | — | — | — | 7,500 | (9) | 838,275 | |||||||||||||||||
— | — | — | — | — | — | 6,000 | (10) | 670,620 |
Ajay K. Puri | 39,505 | — | 17.53 | 3/15/2021 | — | — | — | — | |||||||||||||||||
38,806 | — | 14.465 | 9/20/2021 | — | — | — | — | ||||||||||||||||||
56,662 | — | 13.71 | 9/18/2022 | — | — | — | — | ||||||||||||||||||
43,125 | 2,875 | (3) | 12.62 | 3/19/2023 | — | — | — | — | |||||||||||||||||
37,375 | 8,625 | (4) | 16.00 | 9/17/2023 | — | — | — | — | |||||||||||||||||
— | — | — | — | 3,450 | (18) | 385,607 | — | — | |||||||||||||||||
— | — | — | — | 6,900 | (11) | 771,213 | — | — | |||||||||||||||||
— | — | — | — | 6,563 | (12) | 733,547 | — | — | |||||||||||||||||
— | — | — | — | 48,750 | (6) | 5,448,788 | — | — | |||||||||||||||||
— | — | — | — | 8,750 | (13) | 977,988 | — | — | |||||||||||||||||
— | — | — | — | 12,500 | (14) | 1,397,125 | — | — | |||||||||||||||||
— | — | — | — | 90,000 | (7) | 10,059,300 | — | — | |||||||||||||||||
— | — | — | — | 22,500 | (15) | 2,514,825 | — | — | |||||||||||||||||
— | — | — | — | 115,000 | (8) | 12,853,550 | — | — | |||||||||||||||||
— | — | — | — | 20,000 | (16) | 2,235,400 | — | — | |||||||||||||||||
— | — | — | — | 12,000 | (17) | 1,341,240 | — | — | |||||||||||||||||
— | — | — | — | — | — | 7,500 | (9) | 838,275 | |||||||||||||||||
— | — | — | — | — | — | 6,000 | (10) | 670,620 | |||||||||||||||||
David M. Shannon | 6,250 | — | 13.71 | 9/18/2022 | — | — | — | — | |||||||||||||||||
7,462 | 2,488 | (3) | 12.62 | 3/19/2023 | — | — | — | — | |||||||||||||||||
7,462 | 7,463 | (4) | 16.00 | 9/17/2023 | — | — | — | — | |||||||||||||||||
— | — | — | — | 2,988 | (18) | 333,969 | — | — | |||||||||||||||||
— | — | — | — | 5,975 | (11) | 667,826 | — | — | |||||||||||||||||
— | — | — | — | 4,875 | (12) | 544,879 | — | — | |||||||||||||||||
— | — | — | — | 43,500 | (6) | 4,861,995 | — | — | |||||||||||||||||
— | — | — | — | 6,500 | (13) | 726,505 | — | — | |||||||||||||||||
— | — | — | — | 7,032 | (14) | 785,967 | — | — | |||||||||||||||||
— | — | — | — | 62,500 | (7) | 6,985,625 | — | — | |||||||||||||||||
— | — | — | — | 8,438 | (15) | 943,115 | — | — | |||||||||||||||||
— | — | — | — | 69,000 | (8) | 7,712,130 | — | — | |||||||||||||||||
— | — | — | — | 7,700 | (16) | 860,629 | — | — | |||||||||||||||||
— | — | — | — | — | — | 4,000 | (9) | 447,080 | |||||||||||||||||
— | — | — | — | — | — | 2,800 | (10) | 312,956 | |||||||||||||||||
Debora Shoquist | 5,000 | — | 14.46 | 3/20/2022 | — | — | — | — | |||||||||||||||||
10,000 | — | 13.71 | 9/18/2022 | — | — | — | — | ||||||||||||||||||
10,781 | 2,157 | (3) | 12.62 | 3/19/2023 | — | — | — | — | |||||||||||||||||
10,781 | 6,469 | (4) | 16.00 | 9/17/2023 | — | — | — | — | |||||||||||||||||
— | — | — | — | 2,588 | (18) | 289,261 | — | — | |||||||||||||||||
— | — | — | — | 5,175 | (11) | 578,410 | — | — | |||||||||||||||||
— | — | — | — | 6,563 | (12) | 733,547 | — | — | |||||||||||||||||
— | — | — | — | 39,000 | (6) | 4,359,030 | — | — | |||||||||||||||||
— | — | — | — | 8,750 | (13) | 977,988 | — | — | |||||||||||||||||
— | — | — | — | 10,313 | (14) | 1,152,684 | — | — | |||||||||||||||||
— | — | — | — | 62,500 | (7) | 6,985,625 | — | — | |||||||||||||||||
— | — | — | — | 12,375 | (15) | 1,383,154 | — | — | |||||||||||||||||
— | — | — | — | 78,000 | (8) | 8,718,060 | — | — | |||||||||||||||||
— | — | — | — | 13,500 | (16) | 1,508,895 | — | — | |||||||||||||||||
— | — | — | — | 8,000 | (17) | 894,160 | — | — | |||||||||||||||||
— | — | — | — | — | — | 6,000 | (9) | 670,620 | |||||||||||||||||
— | — | — | — | — | — | 4,000 | (10) | 447,080 |
(1) | Unless otherwise noted, represents the closing price of our common stock as reported by NASDAQ on the date of grant which is the exercise price of stock option grants made pursuant to our 2007 Plan. |
(2) | Calculated by multiplying the number of RSUs or PSUs by the closing price ($111.77) of NVIDIA’s common stock on January 27, 2017, the last trading day before the end of our Fiscal 2017, as reported by NASDAQ. |
(3) | The option vested as to 25% of the shares on March 20, 2014, and vested as to 6.25% at the end of each quarterly period thereafter such that the option was fully vested on March 20, 2017. |
(4) | The option vested as to 25% of the shares on September 18, 2014, and vests as to 6.25% at the end of each quarterly period thereafter such that the option will be fully vested on September 18, 2017. |
(5) | The RSU was earned on January 26, 2014 based on achievement of a pre-established performance goal. The RSU vested as to 25% of the shares on March 19, 2014, and vested as to 12.50% approximately every six months thereafter over the next three years such that the RSU was fully vested on March 15, 2017. |
(6) | The RSU was earned on January 25, 2015 based on achievement of a pre-established performance goal. The RSU vested as to 25% of the shares on March 18, 2015, and vests as to 12.50% approximately every six months thereafter over the next three years such that the RSU will be fully vested on March 21, 2018. |
(7) | The RSU was earned on January 31, 2016 based on achievement of a pre-established performance goal. The RSU vested as to 25% of the shares on March 16, 2016, and vests as to 12.50% approximately every six months thereafter over the next three years such that the RSU will be fully vested on March 20, 2019. |
(8) | The RSU was earned on January 29, 2017 based on achievement of a pre-established performance goal. The RSU vested as to 25% of the shares on March 15, 2017, and vests as to 12.50% approximately every six months thereafter over the next three years such that the RSU will be fully vested on March 18, 2020. |
(9) | Represents the number of shares based on achieving Target Compensation Plan performance goals. The number of PSUs that will be earned, if at all, is based on our TSR relative to the S&P 500 from January 26, 2015 through January 28, 2018. If the pre-established performance goal is achieved, the shares earned will vest as to 100% on March 21, 2018. If the Threshold performance goal is achieved, 27,500 shares will be earned by Mr. Huang, 1,875 shares will be earned by Ms. Kress, 1,875 shares will be earned by Mr. Puri, 1,000 shares will be earned by Mr. Shannon, and 1,500 shares will be earned by Ms. Shoquist. If the Stretch Operating Plan performance goal is achieved, 165,000 shares will be earned by Mr. Huang, 15,000 shares will be earned by Ms. Kress, 15,000 shares will be earned by Mr. Puri, 8,000 shares will be earned by Mr. Shannon, and 12,000 shares will be earned by Ms. Shoquist. |
(10) | Represents the number of shares based on achieving Target Compensation Plan performance goals. The number of PSUs that will be earned, if at all, is based on our TSR relative to the S&P 500 from February 1, 2016 through January 27, 2019. If the pre-established performance goal is achieved, the shares earned will vest as to 100% on March 20, 2019. If the Threshold performance goal is achieved, 47,500 shares will be earned by Mr. Huang, 3,000 shares will be earned by Ms. Kress, 3,000 shares will be earned by Mr. Puri, 1,400 shares will be earned by Mr. Shannon, and 2,000 shares will be earned by Ms. Shoquist. If the Stretch Operating Plan performance goal is achieved, 142,500 shares will be earned by Mr. Huang, 12,000 shares will be earned by Ms. Kress, 12,000 shares will be earned by Mr. Puri, 5,600 shares will be earned by Mr. Shannon, and 8,000 shares will be earned by Ms. Shoquist. |
(11) | The RSU vested as to 25% on September 17, 2014, and vests as to 12.50% approximately every six months thereafter over the next three years such that the RSU will be fully vested on September 20, 2017. |
(12) | The RSU vested as to 25% on March 18, 2015, and vests as to 12.50% approximately every six months thereafter over the next three years such that the RSU will be fully vested on March 21, 2018. |
(13) | The RSU vested as to 25% on September 16, 2015, and vests as to 12.50% approximately every six months thereafter over the next three years such that the RSU will be fully vested on September 19, 2018. |
(14) | The RSU vested as to 25% on March 16, 2016, and vests as to 12.50% approximately every six months thereafter over the next three years such that the RSU will be fully vested on March 20, 2019. |
(15) | The RSU vested as to 25% on September 21, 2016, and vests as to 12.50% approximately every six months thereafter over the next three years such that the RSU will be fully vested on September 18, 2019. |
(16) | The RSU vested as to 25% on March 15, 2017, and vests as to 12.50% approximately every six months thereafter over the next three years such that the RSU will be fully vested on March 18, 2020. |
(17) | The RSU will vest as to 25% on September 20, 2017, and vests as to 6.25% approximately every three months thereafter over the next three years such that the RSU will be fully vested on September 16, 2020. |
(18) | The RSU vested as to 25% on March 19, 2014, and vested as to 12.50% approximately every six months thereafter over the next three years such that the RSU was fully vested on March 15, 2017. |
Name | Option Awards | Stock Awards | ||||||||||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (2) | |||||||||||||
Jen-Hsun Huang | 666,664 | (3) | 23,896,310 | 322,373 | (4) | 15,134,764 | ||||||||||
Colette M. Kress | — | — | 172,562 | (5) | 8,222,811 | |||||||||||
Ajay K. Puri | 120,081 | (6) | 3,541,997 | 128,738 | (7) | 6,074,343 | ||||||||||
David M. Shannon | 318,475 | (8) | 8,313,940 | 96,668 | (9) | 4,533,821 | ||||||||||
Debora Shoquist | 55,304 | 1,152,435 | 97,600 | (10) | 4,589,888 |
(1) | The value realized on cashless exercise represents the difference between the exercise price per share of the stock option and either (a) the fair market value of our common stock as reported by NASDAQ at cashless exercise or (b) the closing price of our common stock as reported by NASDAQ on the trading day prior to the date of cash exercise, multiplied by the number of shares of common stock underlying the stock options exercised. The exercise price of each such stock option was equal to the closing price of our common stock as reported by NASDAQ on the date of grant. The value realized was determined without considering any taxes that may have been owed. |
(2) | The value realized on vesting represents the number of shares acquired on vesting multiplied by the fair market value of our common stock as reported by NASDAQ on the date of vesting. |
(3) | Mr. Huang exercised stock options and sold an aggregate of 660,391 shares during Fiscal 2017. Mr. Huang also exercised stock options for an additional 6,273 shares during Fiscal 2017 for an aggregate exercise price of $99,992. |
(4) | The number of shares acquired on vesting includes an aggregate of 168,217 shares that were withheld to pay taxes due upon vesting. |
(5) | The number of shares acquired on vesting includes an aggregate of 85,627 shares that were withheld to pay taxes due upon vesting. |
(6) | Mr. Puri exercised stock options and sold an aggregate of 94,842 shares during Fiscal 2017. Mr. Puri also exercised stock options for an additional 25,239 shares during Fiscal 2017 for an aggregate exercise price of $368,615. |
(7) | The number of shares acquired on vesting includes an aggregate of 62,768 shares that were withheld to pay taxes due upon vesting. |
(8) | Mr. Shannon exercised stock options and sold an aggregate of 303,025 shares during Fiscal 2017. Mr. Shannon also exercised stock options for an additional 15,450 shares during Fiscal 2017 for an aggregate exercise price of $241,189. |
(9) | The number of shares acquired on vesting includes an aggregate of 47,801 shares that were withheld to pay taxes due upon vesting. |
(10) | The number of shares acquired on vesting includes an aggregate of 50,936 shares that were withheld to pay taxes due upon vesting. |
Name | Unvested In-the-Money Options, RSUs and PSUs at January 29, 2017 (#) (1) | Total Estimated Benefit ($) | ||
Jen-Hsun Huang | 909,938 | 95,067,315 | ||
Colette M. Kress | 352,813 | 39,433,909 | ||
Ajay K. Puri | 313,913 | 34,911,774 | ||
David M. Shannon | 200,759 | 22,288,027 | ||
Debora Shoquist | 226,390 | 25,172,885 |
Name | Estimated SY PSUs at Target Compensation Plan | Actual SY PSUs Eligible to Vest | ||
Jen-Hsun Huang | 190,000 | 285,000 | ||
Colette M. Kress | 55,500 | 111,000 | ||
Ajay K. Puri | 57,500 | 115,000 | ||
David M. Shannon | 34,500 | 69,000 | ||
Debora Shoquist | 39,000 | 78,000 |
What am I voting on? A non-binding vote, known as “say-on-frequency,” to approve how frequently we should solicit an advisory vote on our NEO compensation. Vote recommendation: for ONE YEAR. Vote required: A majority of the shares present or represented by proxy. Effect of abstentions: Same as a vote against. Effect of broker non-votes: None. |
What am I voting on? Ratification of the selection of PwC as our independent registered public accounting firm for Fiscal 2018. Vote recommendation: FOR the ratification of PwC. Vote required: A majority of the shares present or represented by proxy. Effect of abstentions: Same as a vote AGAINST. Effect of broker non-votes: None (because this is a routine proposal, there are no broker non-votes). |
Fiscal 2017 | Fiscal 2016 | |||||||
Audit Fees (1) | $ | 4,390,711 | $ | 4,083,453 | ||||
Audit-Related Fees (2) | — | 300,000 | ||||||
Tax Fees (3) | 394,680 | 309,974 | ||||||
All Other Fees (4) | 3,600 | 3,600 | ||||||
Total Fees | $ | 4,788,991 | $ | 4,697,027 |
(1) | Audit fees included fees for the audit of our consolidated financial statements, the audit of our internal control over financial reporting, reviews of our quarterly financial statements and annual report, reviews of SEC registration statements and related consents, fees related to statutory audits of some of our international entities, and comfort letter fees related to our corporate bond offering in Fiscal 2017. |
(2) | Audit-related fees in Fiscal 2016 consisted of fees for accounting consultation in connection with a build-to-suit operating lease financing arrangement. |
(3) | Tax fees consisted of fees for tax compliance and consultation services. |
(4) | All other fees consisted of fees for products or services other than those included above, including payment to PwC related to the use of an accounting regulatory database. |
AUDIT COMMITTEE |
Mark L. Perry, Chairperson |
Michael G. McCaffery |
A. Brooke Seawell |
Mark A. Stevens |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights ($) (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | ||||||||
Equity compensation plans approved by security holders (1) | 7,429,315 | 14.47 | (2) | 73,877,178 | (3) | ||||||
Equity compensation plans not approved by security holders | — | — | — | ||||||||
Total | 7,429,315 | 14.47 | (2) | 73,877,178 | (3) |
(1) | This row includes our 2007 Plan and our 2012 ESPP. Under our 2012 ESPP, participants are permitted to purchase our common stock at a discount on certain dates through payroll deductions within a pre-determined purchase period. Accordingly, the number of shares to be issued upon exercise of outstanding rights under our 2012 ESPP as of January 29, 2017 is not determinable. |
(2) | Represents the weighted-average exercise price of outstanding stock options only. |
(3) | As of January 29, 2017, the number of shares that remained available for future issuance under the 2007 Plan is 21,582,192, and the number of shares that remained available for future issuance under the 2012 ESPP is 52,294,986, of which up to a maximum of 26,595,000 shares may be purchased in the current purchase period which runs until August 31, 2017 under the 2012 ESPP. |