These excerpts taken from the AFFX 10-K filed Apr 30, 2009.
Compensation Committee Report
We have reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based on our review and discussion with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this annual report on Form 10-K and Affymetrix proxy statement on Schedule 14A.
Notwithstanding anything to the contrary set forth in any of the Companys previous filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that incorporate future filings, including this annual report on Form 10-K, in whole or in part, the foregoing Compensation Committee Report shall not be incorporated by reference into any such filings.
We have reviewed and
This excerpt taken from the AFFX DEF 14A filed Apr 30, 2007.
We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussion with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and in Affymetrix Annual Report on Form 10-K for the year ended December 31, 2006.
Notwithstanding anything to the contrary set forth in any of the Companys previous filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that incorporate future filings, including this Proxy Statement, in whole or in part, the foregoing Compensation Committee Report shall not be incorporated by reference into any such filings.
This excerpt taken from the AFFX DEF 14A filed May 1, 2006.
The following Report of the Compensation Committee does not constitute soliciting material and should not be deemed to be filed with the Securities and Exchange Commission (the SEC), and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this proxy statement and irrespective of any general incorporation language in such filing.
The Compensation Committee (the Committee) of the Board of Directors of Affymetrix is responsible for approving all executive officer compensation at Affymetrix, establishing and evaluating performance-based goals for the award of compensation and administering Affymetrix cash-based bonus and equity-based plans. The Committee consists of three directors, Dr. Berg, Dr. Desmond-Hellmann and Mr. Young. Our members are independent directors (as defined under Nasdaq rules), non-employee directors (as defined in Rule 16b-3 promulgated under Section 16 of the Securities and Exchange Act of 1934) and outside directors (as defined in Section 162(m) of the Internal Revenue Code of 1986). Dr. Desmond-Hellmann was appointed to serve on the Committee effective as of February 15, 2006. We operate under a written charter approved by the Board which is attached to this proxy statement as Appendix B and can be accessed electronically at Affymetrix website at www.affymetrix.com. We use the services of an independent compensation consultant and look at peer group company compensation to assist us in carrying out our responsibilities and duties.
We approve all equity grants and cash compensation to executive officers, and in that regard, review the recommendations of the Chief Executive Officer as to compensation and stock grants for executive officers other than the Chief Executive Officer, along with the basis for such recommendations, including performance reviews and competitive compensation survey data. We separately evaluate the performance of the Chief Executive Officer to determine his compensation and stock grants.
We have developed, with the Board, an executive compensation philosophy, pursuant to which compensation amounts are tied to the Companys success in meeting annual short-term and long-term performance goals and individual achievement is rewarded. We seek to offer compensation, in amounts
and type, which will attract and retain highly qualified executives. The Company structures executive compensation to reflect both the technological and business achievements of the Company during the year and the individual performance and contribution of each executive to the Companys performance for the year.
We believe that the compensation for the executive officers must be competitive with the practices of the Companys peer group companies in order to attract and retain valuable contributors. In this regard, we review compensation and benefit surveys for biotechnology and high technology companies that compete with the Company in the recruitment of senior personnel. We also engage an independent executive compensation consultant who provides us with an additional independent perspective on executive compensation issues.
Compensation for senior management consists of (i) cash compensation, including base salary and bonus opportunity, which is based on factors such as the individual officers level of responsibility in the Company for meeting the Companys strategic, technological, and financial objectives and (ii) long-term incentives afforded by equity awards. Historically, the Company has had a practice of granting stock options and is considering alternative equity awards, including restricted stock. The Companys equity awards program is intended to align the interests of executives with the interests of the shareholders with respect to the long-term performance of the Company, and we continue to be committed to such a program going forward. Guidelines for executive equity award grants are developed through analysis of long-term incentive awards based on each individual executives position, responsibilities, performance and contribution to the achievement of the Companys long-term goals and competitive equity award data from biotechnology and high technology companies. The Company is committed to including equity-based awards as a means to create incentives for employees over multi-year periods.
Chief Executive Officers Compensation
In determining Dr. Fodors 2005 compensation, we considered the policies described above, as well as Dr. Fodors overall compensation package relative to the effectiveness of Dr. Fodors leadership of the Company and the resulting success of the Company in attainment of specific strategic and financial objectives. These objectives were to achieve financial targets, including product and product related revenue, operating profit and earnings per share; grow our customer base and applications; redefine the competitive landscape via scientific leadership; accelerate innovation to market; drive standardization; and optimize our organization for sustainable growth. We believe that the total compensation of Dr. Fodor is competitive with compensation packages for chief executive officers at peer companies based on the Companys performance in 2005.
In reviewing Dr. Fodors overall compensation package, we considered Dr. Fodors base salary and bonus opportunity, his accumulated stock option gains, the dollar value of his benefits and perquisites and the cost to Affymetrix of his compensation package in the aggregate. In 2005, Dr. Fodors base salary was $568,462, compared to his base salary of $542,789 in 2004. Based upon the Companys corporate performance measured against the Companys 2005 financial and strategic goals, Dr. Fodor did not receive a bonus payment for 2005.
Compensation of Other Executive Officers
The 2005 compensation of other executive officers of the Company also took into account the above policies, including the individual contribution of each executive to the Companys performance during the year. With respect to cash compensation payable to its executive officers for 2005, after taking into account company performance, we targeted the Companys total target cash compensation structure (which
includes base salary plus annual bonus target) at the 75th percentile relative to peer companies. The Companys annual bonus program is designed to reward participants based on the Companys attainment of specified levels of financial and strategic goals as well as subjective factors related to the individual participants employment performance. The Companys financial goals are based on specified targets for product and product related revenue, operating profit and earnings per share. Under the bonus program, each executive officer position has an assigned target bonus level, expressed as a percent of base salary earnings for the fiscal year. Bonus targets for the other executive officers range from 50% to 60% of their base salary earnings for the fiscal year. The potential payout of bonus compensation is based on a percentage of the executive officers target bonus and is dependent on the achievement of corporate financial and strategic goals and individual performance. Based upon the Companys corporate performance measured against the Companys 2005 financial and strategic goals, the Company did not pay bonuses to the group of Named Executive Officers for 2005. We believe compensation for the Companys executive officers is competitive with the compensation paid to executives with comparable qualifications, experience and responsibilities in the same or similar businesses of comparable size and achieving comparable results. Our objective is to achieve equitable relationships both among the compensation of individual officers and between the compensation of officers and other employees throughout the Company.
Perquisites and Certain Other Benefits
To remain competitive in the market for a high caliber management team, Affymetrix provides its executive officers, including the CEO, with certain fringe benefits. We periodically review fringe benefits made available to the Companys executive officers, including the CEO, to ensure that they are in line with market practice. In this regard, we approved in 2004 the use of private jet service for business and personal travel by the CEO at an annual cost not to exceed $150,000, and we continue to believe such benefit is appropriate. We also approved in 2004 the use of a car service for its General Counsel for use in connection with her daily commute to and from the Companys headquarters, at an annual cost (prior to an applicable tax gross-up) not to exceed $50,000.
Deferred Compensation Plan
In December 2004, we approved the implementation of a deferred compensation plan that allows certain of the Companys employees, including executive officers, to defer the receipt of cash compensation starting in fiscal 2005. This plan has been structured to comply with Section 409A of the Internal Revenue Code of 1986, as amended. This is not a funded plan. Other than the deferred compensation and 401(k) plans, the Company does not offer any pension plan or other retirement benefits to any executive officer.
The Companys policy generally is to utilize available tax deductions whenever appropriate, and we, when determining executive compensation programs, consider all relevant factors, including the tax deductions that may result from such compensation. Stock options granted under our stock plans generally are intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended, which limits the deductibility of non-performance-based compensation paid to certain covered employees that exceeds $1 million in any year. The Board of Directors believes that the best interests of the Company and its stockholders are served by executive compensation programs which encourage and promote the Companys principal compensation objective, enhancement of shareholder value, and permit us to exercise discretion in the design and implementation of compensation packages. Accordingly, the Company may from time to time pay compensation to its executive officers that may not
be fully deductible. We will continue to review the Companys executive compensation plans periodically to determine what changes, if any, should be made as the result of the limitation on deductibility.
(1) Dr. Desmond-Hellmann joined the Compensation Committee on February 15, 2006.