NVIDIA DEFA14A 2011
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Commencing May 10, 2011, NVIDIA Corporation communicated the following information to certain stockholders of NVIDIA.
Purpose of the Outreach
At our 2011 Annual Meeting of Stockholders to be held on May 18, 2011, our stockholders will cast an advisory vote to approve the compensation of our named executive officers as disclosed in our proxy statement filed with the Securities and Exchange Commission on April 8, 2011. In connection with the advisory vote, we are making every effort to assist our stockholders in understanding the advisory vote and facilitate prompt voting.
Your vote is important. Our board of directors urges you to vote FOR Proposal 3, the advisory vote on executive compensation.
Our fiscal year ends on the last Sunday of January. Fiscal 2011 refers to our fiscal year starting February 1, 2010 and ending January 30, 2011. Fiscal 2010 refers to our fiscal year starting January 26, 2009 and ending January 31, 2010. Fiscal 2009 refers to our fiscal year starting January 28, 2008 and ending January 25, 2009.
During fiscal 2011, we accomplished the following:
Our Executive Compensation Program
Our executive compensation program has consistently and meaningfully been focused on pay-for-performance principles, and has included salary freezes, salary reductions and lack of variable cash compensation payouts in certain years. Summarized below is a chronology of actions taken by our Compensation Committee to align base salaries and variable cash compensation to our business objectives, performance and the long-term interests of our stockholders.
Variable Compensation Plan
The Compensation Committee took these actions in order to provide motivation to our employees and to provide an attractive incentive for new hire candidates. The variable compensation plan had never before been reset mid-year; however, without these actions, no payout would occur under the variable compensation plan for three straight years. The Compensation Committee also removed the threshold amount in order to ensure that some payout would occur under the variable compensation plan as we needed to retain and motivate existing employees and attract new employees.
Under the new second half payout structure, the corporate component was capped at 120%, rather than 200%, of the corporate target amount, and was also pro-rated so that it could only be earned in respect of 50% of the original corporate target amount rather than 100%. Effectively, the target amount allocable to achievement of the second half corporate performance was 25% of the total annual target award and capped at 30% of the total (both corporate and individual) target cash amount versus 100% under the original structure. The Compensation Committee believes that this was a fair and reasonable reduction in light of the shorter performance period, while still motivating our executive officers and employees to achieve or exceed our corporate goal. The target amount of GAAP net income of $142 million reflected our internal forecast, while the maximum amount of $177 million reflected analyst consensus.
Total GAAP net income for the third and fourth quarters of fiscal 2011 was $256.6 million, an increase of $17.9 million (or 7%) over the same period in fiscal 2010. Total GAAP net income for fiscal 2011 was $253 million, or 42% of the original target level of $603 million, an increase of $321 million as compared to the results for fiscal 2010.
There is a strong link between our performance and Mr. Huangs fiscal 2011 compensation.
The value of Mr. Huangs equity compensation did not increase in fiscal 2011 compared to fiscal 2010.