This excerpt taken from the AMAT DEF 14A filed Feb 13, 2008.
Breakdown of Weighted Score Formula:
After the end of fiscal 2007, the Committee compared Applieds actual performance to the targeted performance for the year specified by the Committee in early fiscal 2007, and applied the fiscal 2007 bonus formula under the Senior Executive Bonus Plan to this actual performance. As a result, actual bonuses earned in fiscal 2007 varied in accordance with the levels of performance actually achieved. As noted above, the Committee has the authority to decrease, but not increase, bonuses under the Senior Executive Bonus Plan. In determining whether to exercise this authority, the Committee consulted with Mr. Splinter. Mr. Splinter provided his evaluation of individual performance to the Committee and recommended adjustments to bonuses payable under the Senior Executive Bonus Plan. For fiscal 2007, management recommended, and the Committee approved, a downward adjustment to the bonuses payable under the Senior Executive Bonus Plan. The Committee reduced the total stockholder return adder (described above under Additional Performance Hurdles) in order to make the total stockholder return adder used under the Senior Executive Bonus Plan for the NEOs the same as the adder used under the bonus plans for other Applied employees. The effect was to reduce the bonuses paid to NEOs by an average of 9%.
The actual bonuses paid to the NEOs other than Mr. Splinter for fiscal 2007 were above their target bonus amounts because Applied achieved above-target performance overall. In fiscal 2007, Applied, on average, exceeded performance targets specified for fiscal 2007 for certain of the corporate scorecard goals, including goals relating to business unit and corporate strategic objectives, financial results, retention of key talent and corporate earnings per share. However, Applied, on average, did not achieve the performance targets specified by the Committee for relative revenue growth and certain other strategic objectives. Applying the pre-established bonus formula to this financial performance resulted in bonuses to NEOs (other than for Ms. Handel and Dr. Moghadam) at a weighted average of approximately 114% of target levels. Bonuses paid to these NEOs under the Senior Executive Bonus Plan for fiscal 2007 were: