This excerpt taken from the WDC DEF 14A filed Dec 15, 2006.
Chief Executive Officer Compensation
Mr. Massengill served as Chief Executive Officer until October 1, 2005 when he was succeeded as Chief Executive Officer by Arif Shakeel. Mr. Massengill remains a full-time employee of Western Digital in his position as Chairman of the Board of Directors. The compensation arrangements of Mr. Massengill and Mr. Shakeel are described below and have been designed to encourage both short-term and long-term performance of Western Digital as well as to align their interests with the interests of Western Digitals stockholders. The majority of Mr. Massengills and Mr. Shakeels compensation, including stock options and other stock-based compensation and annual incentive bonuses, will ultimately be based upon the financial performance of Western Digital and how that performance is reflected in Western Digitals stock price.
The Committee reviews and approves corporate goals and objectives for the compensation of the Chief Executive Officer, evaluates the Chief Executive Officers performance in light of those goals and objectives, and determines and approves the Chief Executive Officers compensation level. On behalf of the Committee, the Governance Committee and the independent members of the Board may, as it and the Committee determine appropriate, provide input to the Committee on the performance of the Chief Executive Officer. Western Digitals overall performance and the Chief Executive Officers individual performance are critical factors in the Committees determination.