Compensation Discussion and Analysis
Introduction
This Compensation Discussion and Analysis is designed to provide stockholders with an understanding of Dell's compensation philosophy, its core principles and the compensation in effect for the following executive officers (who are referred to as “Named Executive Officers” or “NEOs”):
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Name
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Position
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Michael S. Dell
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Chairman of the Board, Chief Executive Officer
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Brian T. Gladden
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Senior Vice President, Chief Financial Officer
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Jeffrey W. Clarke
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Vice Chairman and President, Global Operations and End User Computing Solutions
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Stephen J. Felice
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President, Chief Commercial Officer
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Stephen F. Schuckenbrock
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President, Services
(a)
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John A. Swainson
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President, Software
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(a)
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Mr. Schuckenbrock ceased to be an executive officer in the position shown effective December 5, 2012, but remained an employee of Dell through March 31, 2013.
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Executive Compensation Philosophy and Core Objectives
The Leadership Development and Compensation Committee (the “Committee”) is responsible for critically reviewing, approving and administering compensation programs for executive officers that ensure an appropriate link between pay, performance and stock price, while appropriately balancing risk. The Committee seeks to increase stockholder value by rewarding performance with cost-effective compensation and ensuring that Dell can attract and retain the best executive talent through adherence to the following core compensation objectives:
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Providing compensation commensurate with the level of business performance achieved, ranging from above-target overall rewards for performance that exceeds that of peers to below-average compensation for below-target performance;
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Providing a total compensation opportunity that is competitive with companies with which Dell competes for talent;
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Providing appropriate cash and equity-based incentives for achieving Dell's financial goals and strategic objectives;
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Creating a culture of meritocracy by linking awards to individual and company performance;
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Emphasizing long-term, performance-dependent pay to reward executive officers who deliver long-term value creation to Dell's stockholders; and
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Managing fixed costs by combining a conservative approach to base salaries and benefits, with a greater focus on short-term cash incentives and long-term, performance-based equity compensation.
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A substantial portion of NEO pay is directly tied to Dell's performance. Therefore, this pay is at risk, as illustrated by the following charts, which show total compensation broken down into each element of compensation as reported in the Summary Compensation Table for Fiscal 2013. Approximately 93% of the Fiscal 2013 total compensation of Michael Dell and approximately 90% of the Fiscal 2013 total compensation of the other five NEOs consisted of variable compensation components subject to Dell's performance.
The primary components of Dell's compensation program consist of base salary, annual incentive bonus, long-term incentives, benefits and limited perquisites. The compensation program for NEOs is designed to place annual target total compensation (i.e., the sum of base salary, target annual bonus, and target annual equity compensation) between the 50
th
and 75
th
percentiles of the compensation of Dell's Core Comparator Peer Group (as described below) when performance is strong. While designed to target annual total compensation at this level, actual total compensation for each individual executive varies based on individual skills, experience, contributions, and performance achievement, as well as business unit performance (if applicable), internal equity, overall responsibility for company performance, and other factors the Committee may take into account.
Executive Summary
Fiscal
2013
Financial Highlights
In Fiscal
2013
, Dell achieved net revenue of
$56.9 billion
, operating income of
$3.0 billion
and earnings per share of
$1.35
. Dell experienced decreases from Fiscal
2012
in operating income, net income and earnings per share, measured on both a GAAP basis and a non-GAAP basis as shown below. All amounts, except per share amounts, are in millions.
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Fiscal 2013
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Fiscal 2012
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Change
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Net Revenue
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$56,940
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$62,071
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(8)%
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Operating Income
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$3,012
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$4,431
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(32)%
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Net Income
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$2,372
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$3,492
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(32)%
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Earnings Per Share
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$1.35
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$1.88
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(28)%
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Operating Income (non-GAAP)
(a)
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$3,973
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$5,135
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(23)%
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Net Income (non-GAAP)
(a)
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$3,017
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$3,952
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(24)%
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Earnings Per Share (Non-GAAP)
(a)
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$1.72
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$2.13
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(19)%
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(a)
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This measure is not a financial measure calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Non-GAAP Financial Measures” for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.
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Link Between Company Performance and CEO Compensation
The Committee takes a long-term view when analyzing CEO pay and company performance. The Committee considers a variety of factors when evaluating Mr. Dell's performance, including performance against several key financial metrics and performance against certain non-financial objectives such as progress towards Dell's strategic transformation as well as operational and leadership effectiveness goals. In evaluating the link between Mr. Dell's pay and company performance, it is important to consider that Mr. Dell has not received an increase in base salary in over five years, declined a bonus for Fiscal 2008, 2009 and 2010, and declined equity grants from Fiscal 2005 through Fiscal 2010. Partly as a result of these decisions, Mr. Dell's total compensation historically ranked below the median as compared to CEO total compensation for the Core Comparator Peer Group, as described below. In analyzing CEO pay for performance, the Committee considers the fact that Mr. Dell's voluntary refusal to receive bonus payouts and equity grants for previous fiscal years unavoidably exaggerates the year-over-year comparison when more competitive bonus payments and equity grants resume, as is the case for Fiscal
2013
.
The following graphs show the relationship between Mr. Dell's total compensation and company performance as measured by three key financial metrics, which are considered critical components of both Dell's strategy and the measurement of Mr. Dell's
performance. The company believes that these three metrics — revenue, operating income and earnings per share — correlate strongly with long-term stockholder value. The following graphs report revenue, operating income and earnings per share on a GAAP basis, and include the impact on the year-over-year trend line of Mr. Dell's request that he not receive a bonus payment for Fiscal 2009 and 2010. Because the Committee did not calculate a bonus payout for Mr. Dell for Fiscal 2009 or 2010, these graphs assume that Mr. Dell would have received a “Target Bonus” (as defined below) consistent with the application of Dell's corporate performance modifier for the applicable fiscal year. In addition, the graphs highlight the portion of Mr. Dell's Fiscal
2013
compensation that consisted of 100% performance-based restricted stock units (“PBUs”). Although the values of these awards are reflected by disclosing their grant date fair value as shown in the Summary Compensation Table below, the actual amount, if any, Mr. Dell will realize from these awards will depend on the company's performance.
Chairman and CEO Compensation v. Dell Revenue
Chairman and CEO Compensation v. Dell Operating Income
Chairman and CEO Compensation v. Dell EPS
"Total Compensation Excluding Equity" is the total compensation amount minus long-term equity incentives reported for Mr. Dell in the Summary Compensation Table in Dell's prior annual reports on Form 10-K.
“Equity” is the grant date fair value of stock options and PBUs granted to Mr. Dell as reported in the Summary Compensation Table in Dell's prior annual reports on Form 10-K.
"Target Bonus" represents an estimate of the bonus that Mr. Dell would have received if he had not voluntarily declined to receive one. The estimated bonus is calculated based on Mr. Dell's target bonus (two times base salary), times an estimated personal modifier (100%), times the company's corporate performance modifier. The company's corporate modifier for Fiscal 2009 and 2010 was 70%. Since the Committee did not calculate a personal modifier for Mr. Dell for Fiscal 2009 or 2010, the company assumed a 100% personal modifier in calculating the estimated bonus that Mr. Dell voluntarily declined.
Summary of Compensation Decisions for Fiscal
2013
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Chief Executive Officer Compensation —
The Committee approved a
$1,330,000
bonus payment to Mr. Dell under the annual incentive plan, which is 30% below his targeted level. Mr. Dell did not receive an increase in base salary or target bonus for Fiscal
2014
. As discussed below under “Changes to Long-Term Incentive Design,” the Board has decided to delay any decision on Mr. Dell's Fiscal
2014
long-term incentive grant in light of the pendency of Dell's proposed going-private merger transaction which it announced on February 5, 2013 (the "merger").
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Fiscal
2013
Incentive Bonus Plan Payout —
Due to Dell's Fiscal
2013
performance, the NEOs, along with the employee population as a whole, received below-target bonus payouts under the annual incentive bonus plan. As part of its deliberations related to Dell's proposed merger, the full Board, rather than the Committee, assessed the appropriate corporate bonus modifier based on performance for the year. The Board set the corporate bonus modifier at
70%
of target as a result of the shortfall in Dell's performance as measured against both the overall financial objectives and the targets in Dell's corporate scorecard (as discussed below).
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Fiscal
2013
PBU Performance —
Because Dell's Fiscal
2013
cash flow from operations per share performance fell short of target goals, the NEOs earned 80% of their target number of PBUs eligible to be earned for Fiscal 2013 under the PBUs granted in Fiscal 2011 (representing one-third of the PBUs constituting the award). The three-year relative total shareholder return modifier (Fiscal 2011-2013) resulted in NEOs earning 75% of their banked units during the three fiscal years covered by the Fiscal 2011 PBU award.
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NEO Merit Increases —
For Fiscal
2013
, all Named Executive Officers, other than Mr. Dell and Mr. Schuckenbrock, received base salary increases ranging from 3.2% to 3.4% of base salary to better align their base salaries with those of executives at peer companies and to address changes in responsibility and internal equity considerations.
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Changes to the Executive Incentive Bonus Plan Design —
For Fiscal
2014
, the Executive Incentive Bonus Plan's corporate performance metric will be operating free cash flow and will no longer include performance metrics based on revenue or operating income. Of the bonus pool, 75% will be determined based on operating free cash flow and 25% will be determined based on a qualitative assessment of performance against key strategic objectives.
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Changes to Long-Term Incentive Design —
In light of the pendency of Dell's proposed merger, the Board has decided to delay its determinations concerning Fiscal
2014
long-term incentive grants until after closing of that transaction.
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Dividend Policy —
Dell announced a dividend policy on June 11, 2012. In connection with the dividend policy, all outstanding restricted stock unit (“RSU”) and PBU awards were amended to allow dividend equivalents to be credited to unvested awards. Upon vesting of the stock units and achievement of performance requirements, RSU and PBU holders are entitled to receive a dollar amount equal to the per-share cash dividends paid by Dell during the life of the awards, multiplied by the total number of shares issued. Dividend equivalents will be paid in cash upon delivery of the shares underlying the relevant RSU or PBU.
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Compensation Governance Practices
The Committee seeks to implement and maintain sound compensation governance practices to ensure adherence to Dell's pay-for-performance philosophy while appropriately managing risk and aligning Dell's compensation programs with long-term stockholder interests. The following governance practices were in effect during Fiscal
2013
:
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The Committee is composed entirely of directors who satisfy the standards of independence established in Dell's Corporate Governance Principles and NASDAQ listing standards.
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The Committee retains an independent compensation consultant, Meridian Compensation Partners, LLC (“Meridian”), that reports directly to the Committee and performs no other work for Dell.
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Mr. Dell's compensation is reviewed by the Committee in executive session and then, upon the Committee's recommendation, approved by the independent directors of the Board in executive session.
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A substantial amount of NEO pay is subject to specific short-term and long-term performance requirements.
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Dell's incentive programs include limits on maximum payouts to contain the risk of excessive payouts. Fiscal
2013
annual bonus payouts are capped at 281.25% of target amounts and Fiscal 2013 PBU payouts are capped at 200% of target amounts.
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The Committee retains discretion to reduce (but not increase) bonus payouts. This discretion enables it to respond to unforeseen events and adjust bonus payouts downward as appropriate.
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Dell offers only limited perquisites, all of which are for business-related purposes. Dell does not provide tax gross-ups on perquisites other than certain relocation expenses and tax equalization payments for select international arrangements.
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Dell does not offer excessive post-employment benefits such as supplemental executive retirement plans ("SERPs"), pension plans, split-dollar life insurance or other personal benefits.
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NEOs do not have change in control severance protections, except for "double trigger" amendments to equity award agreements adopted in April 2013 providing for accelerated vesting of awards if the NEO's employment with Dell is terminated without cause within two years following a change in control of Dell.
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NEOs do not receive excise tax gross-ups on cash severance or perquisites.
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Dell maintains a compensation recoupment policy applicable to equity and cash-based awards to executive officers in the event of a financial restatement that is more stringent than required by current law.
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Dell maintains stock ownership requirements for both executive officers and directors to link their interests with the interests of other Dell stockholders. Dell also has adopted retention requirements for equity awards that remain in effect until executive officers meet the ownership requirements described below.
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Dell will not reprice underwater stock options without stockholder approval.
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Dell prohibits any employee from trading in derivatives of Dell stock or engaging in short sales of Dell stock.
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Executive Officer Compensation
Process for Evaluating Chairman and Chief Executive Officer Compensation
The Committee discusses and makes all recommendations relating to the compensation of Mr. Dell in executive session without Mr. Dell present. In reviewing Mr. Dell's compensation, the Committee considers the performance of the company and his contribution to that performance. This assessment includes a holistic review of financial metrics such as revenue, operating income, earnings per share, cash flow and stock price performance as well as compensation of peer CEOs and progress against strategic initiatives such as net promoter score (“NPS,” explained more fully below), share growth, leadership, brand momentum and health, employee engagement, culture, ethics, compliance, and integrity. Based on this review and input from Meridian, the Committee makes base salary, bonus, and long-term incentive recommendations subject to approval of the independent directors of the Board.
Process for Evaluating Executive Officer Compensation (other than the CEO)
Process
- When making individual compensation decisions for executive officers other than the CEO, the Committee takes many factors into account, including the performance of the company; the performance of an executive officer's business unit (if applicable); the recommendation of the CEO; the individual's performance and experience; the individual's historical compensation; comparisons to other executive officers (both those of Dell and those of the Core Comparator Peer Group, as described below); and any retention concerns.
Compensation Consultants
- The charter of the Committee authorizes the Committee to engage independent consultants at any time at the expense of the company. The Committee retains Meridian as its independent compensation consultant. Meridian reports directly to the Committee and performs no other work for Dell. The Committee assessed the independence of Meridian and concluded that its work did not raise any conflict of interest with Dell. During Fiscal
2013
, Meridian was engaged to:
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Advise the Committee on CEO and executive officer pay decisions;
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Assist in short-term and long-term incentive plan design;
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Recommend composition of the Full Peer Group and the Core Comparator Peer Group;
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Conduct compensation reviews and make recommendations regarding both Dell's executive and director pay structures;
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Provide periodic updates on current trends, technical and regulatory developments and best practices in compensation design; and
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Perform any other tasks which the Committee may request from time to time.
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Consideration of Say-On-Pay Results
- At Dell's
2012
annual meeting of stockholders, Dell held a non-binding advisory vote, commonly referred to as a “say-on-pay” vote, on the compensation of Dell's NEOs as described in the proxy statement for that meeting. Stockholders approved the compensation of the NEOs, with approximately 98% of stockholder votes cast in favor of Dell's Fiscal
2012
say-on-pay resolution. The Board of Directors and the Committee value the opinions of stockholders and are mindful of the strong support stockholders expressed for Dell's pay-for-performance philosophy. As a result of the overwhelming stockholder support for that philosophy at the
2012
annual meeting of stockholders, the Committee decided to retain Dell's general compensation philosophy and core objectives for Fiscal
2013
.
Pay Mix
- Because executive officers are in a position to directly influence Dell's overall performance, a significant portion of their compensation is delivered in the form of performance-based short-term and long-term incentives. The level of performance-based pay varies for each executive based on level of responsibility, market practices, and internal equity
considerations. Dell does not target a fixed mix of pay for individual executive positions, but instead strives to maintain each pay element in its targeted competitive range as described in the "Market Positioning" section below.
Competitive Market Assessment
- The Committee annually reviews compensation for executive officers at similar technology companies and at other large global general industry companies to determine whether the compensation components for Dell's executive officers remain in the targeted ranges described below under "Market Positioning." Management, with the assistance of Meridian, collects and presents to the Committee compensation data for the executive officers from a list of targeted comparable companies as well as data on executive officer compensation from published compensation surveys. These compensation surveys include data on technology and general industry pay practices for executive positions at companies similar in size and complexity to Dell. The compensation assessment includes an evaluation of base salary, target annual incentive opportunities, and long-term incentive grant values for each of the executive officer positions relative to similar positions in the market.
The Committee uses a peer group (the "Full Peer Group") and a core comparator subset of the Full Peer Group (the "Core Comparator Peer Group," in bold in the table below) as a reference basis for market compensation practices. The Committee uses the Core Comparator Peer Group to evaluate executive officer and director compensation, benefits and perquisites, short-term and long-term incentive design, and share usage/dilution and to benchmark corporate governance compensation practices. The Committee uses the Full Peer Group as a secondary benchmark for the foregoing evaluation factors. The Full Peer Group is composed of companies similar in size, consumer product focus and business results to Dell with which Dell competes for talent. The Committee reviews and approves the Full Peer Group annually using an assessment of sales volumes, market capitalization, number of employees, consumer product focus and business results. Companies in the Core Comparator Peer Group are selected based on an assessment of revenue, industry type and position as a market leader or competitor. At the time of the peer group analysis, the median annual revenue for the Full Peer Group was $58 billion and the median market capitalization was $81.5 billion. The Full Peer Group consists of the following 25 companies
:
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• Accenture plc
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• Intel Corporation
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• Amazon.com, Inc.
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• International Business Machines Corporation
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• Apple Inc.
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• Johnson & Johnson
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• AT&T Inc.
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• Microsoft Corporation
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• Best Buy Co., Inc.
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• Oracle Corporation
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• The Boeing Company
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• The Procter & Gamble Company
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• Cisco Systems, Inc.
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• Qualcomm Incorporated
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• EMC Corporation
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• Target Corporation
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• General Electric Company
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• Texas Instruments Incorporated
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• Google Inc.
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• United Technologies Corporation
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• Hewlett-Packard Company
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• Verizon Communications Inc.
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• The Home Depot, Inc.
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• Xerox Corporation
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• Honeywell International Inc.
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Market Positioning
- The Committee does not target individual compensation elements but instead targets total compensation between the 50
th
and 75
th
percentiles when performance is strong. The Committee believes this strategy is consistent with the goals listed above and allows added flexibility to employ pay practices that are best aligned to meet business needs. Targeting a range of total compensation also reflects the reality that actual total compensation for each individual executive will vary based on individual skills, experience, contributions, individual performance, and overall responsibility for Dell's performance, as well as corporate performance, internal equity and other factors that the Committee may take into account.
Individual Compensation Components
Base Salary
Design
- Dell's philosophy is that base salaries should meet the objectives of attracting and retaining the executive officers needed to manage the business. Base salaries varied based on the Committee's judgment with respect to each executive officer's responsibility, performance, experience, retention concerns, historical compensation and internal equity considerations. For Fiscal
2013
, the NEO base salaries ranged from $725,000 to $950,000. During Fiscal
2013
, the Committee carefully considered the input and recommendations of Mr. Dell as CEO when evaluating factors relative to the other executive officers in order to approve base salary adjustments.
Results
- Most executive officer base salaries are between the market median and 75
th
percentile of Dell's Core Comparator Peer Group. In order to better align salaries with market data and to address internal equity considerations, all NEOs, other than Mr. Dell and Mr. Schuckenbrock, received a base salary increase for Fiscal
2013
.
The table below summarizes the base salaries and percentage of base salary increase for the NEOs for Fiscal
2012
,
2013
and
2014
. Due to timing of the pay increases and other payroll processes, the actual base salaries paid for a fiscal year can vary from those shown in the table. Information on amounts actually earned by the NEOs for Fiscal 2011,
2012
and
2013
are shown in the Summary Compensation Table below.
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Named Executive
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Fiscal 2012 Salary
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Percentage Salary Increase
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Fiscal 2013 Salary
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Percentage Salary Increase
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Fiscal 2014 Salary
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Mr. Dell
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$
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950,000
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—%
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$
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950,000
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—%
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$
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950,000
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Mr. Gladden
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730,000
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2.7%
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750,000
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3.3%
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775,000
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Mr. Clarke
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730,000
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6.2%
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775,000
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3.2%
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800,000
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Mr. Felice
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750,000
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3.3%
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775,000
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3.2%
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800,000
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Mr. Schuckenbrock
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750,000
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3.3%
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775,000
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—%
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N/A
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Mr. Swainson
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N/A
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N/A
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725,000
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3.4%
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750,000
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Annual Incentive Bonus
Design
- The annual Executive Incentive Bonus Plan ("EIBP") is designed to align executive officer pay with short-term financial and strategic results that the Committee believes will yield long-term stockholder value. The EIBP rewards the achievement of a positive consolidated net income goal, adjusted for charges related to acquisitions, and such other goals as the Committee determines to be appropriate.
Annual incentives for Fiscal
2013
were established and paid to executive officers under the EIBP. Compensation paid under the EIBP was designed to qualify as tax-deductible under Section 162(m) of the Internal Revenue Code. To qualify such compensation for tax deductibility under Section 162(m), the Board set the maximum payout for Fiscal
2013
for Mr. Dell at
0.20%
of consolidated net income, as adjusted for charges related to acquisitions, and the Committee set the maximum payout for Fiscal
2013
for each of the other Named Executive Officer at
0.10%
of consolidated net income, as adjusted for charges related to acquisitions.
Within the Section 162(m) cap described above, the Committee establishes a target incentive opportunity for each executive officer expressed as a percentage of base salary. These target award opportunities are established based on the competitive market positioning targets described in the "Market Positioning" section above as well as Dell's philosophy of increasing the proportion of pay at risk for those positions with the greatest impact on company results. Mr. Dell, as the executive officer with the greatest overall responsibility for company performance, was granted a larger incentive opportunity in comparison to his base salary in order to weight his annual cash compensation mix more heavily towards performance-based compensation. For the NEOs other than the CEO, the Committee deemed their potential impact on company results as equally significant. Fiscal
2013
target annual incentives for the NEOs were as follows:
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Named Executive
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Target Incentive as % of Base Salary
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Mr. Dell
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200%
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Mr. Gladden
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100%
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Mr. Clarke
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100%
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Mr. Felice
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100%
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Mr. Schuckenbrock
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100%
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Mr. Swainson
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100%
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To arrive at a payout number, the target percentage of salary for each executive officer is multiplied by a formula (illustrated below) based on corporate performance and the achievement of equally weighted individual performance goals. In determining the amount of the actual payout, the Committee may consider the potential payout number produced by the formula and any other factors it deems appropriate.
Corporate Bonus Formula
Corporate Performance Targets
- For Fiscal
2013
, the corporate performance modifier was 75% dependent on the achievement
of two financial performance targets and 25% dependent on the achievement of the corporate scorecard performance objectives described below. The targets for the financial performance metrics and the corporate scorecard objectives are established at the beginning of the fiscal year.
At the end of the fiscal year, the Committee first determines the extent to which corporate performance was achieved, resulting in a calculation of the corporate performance modifier. The corporate performance modifier has a performance range from 0% to 187.5% of the target (the financial metrics have a range from 0% to 200% and the corporate scorecard objectives have a range from 0% to 150%). The Committee then determines the individual performance modifier, which may range from 0% to 150% based on the NEO's individual performance. Application of the two modifiers determines the final bonus payout, resulting in a total maximum opportunity of 281.25% of target.
For Fiscal
2013
, the Committee selected corporate financial performance objectives aimed at driving profitable growth and included net revenue and non-GAAP operating income targets. Net revenue is intended to measure Dell's revenue growth. Non-GAAP operating income is intended to measure profitability of Dell's operations. Non-GAAP operating income is calculated by adjusting Dell's operating income as computed on a GAAP basis to exclude acquisition-related charges, severance and facility actions, and amortization of purchased intangibles incurred in Fiscal
2013
. The weighting of bonus performance goals was designed to provide significant incentive to drive growth once acceptable operating income goals were achieved. These bonus metrics were based on the company's internal and relative performance goals, as follows:
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Threshold
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Target
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Maximum
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Net revenue
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$55.73 billion
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$64.73 billion
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$70.73 billion
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Operating income (non-GAAP)
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$3.897 billion
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$5.097 billion
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$6.297 billion
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Corresponding funding level
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50%
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100%
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200%
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At the beginning of the fiscal year, Mr. Dell and Mr. Gladden, with input from the Committee, established the corporate scorecard containing several key financial and strategic objectives relating to significant transformation initiatives. A description of each initiative, the evaluation criteria and weighting is described in the following table:
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Initiative
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Description
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Key Evaluation Criteria
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Weighting
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Enterprise
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Transforming Enterprise Solutions, including servers, networking and storage products
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• Enterprise revenue, margin and operating income
• Storage and networking orders
• Complexity reduction
• Revenue premium
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20%
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Go To Market
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Transforming go to market strategies, partnerships and alliances
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• Revenue and margin
• Sales productivity
• Multi-line of business expansion
• Enterprise awareness
• Brand health index
• Emerging markets revenue and margin
• Operating expenses % of total revenue
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15%
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Services
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Transforming services offerings to meet customers' needs
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• Services revenue, margin and operating income
• Support and deployment
• Infrastructure
• Applications
• Business process outsourcing
• Security
• Revenue premium
• Services backlog
and deferred services revenue
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15%
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S&P
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Transforming software and peripherals
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• Revenue, margin and operating income
• Software orders
• Complexity reduction
• Displays
• Peripherals revenue mix
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10%
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Online Business
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Directed at building on Dell's online heritage, strength and global presence to deliver rich customized relationships, solutions and social experiences that distinguish Dell from other companies
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• Revenue and margin
• Net satisfaction score
• Infrastructure and quality
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10%
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NPS Score
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A loyalty metric based on how likely customers would recommend Dell to a friend or colleague. Dell classifies customers as promoters, passives or detractors. NPS is calculated by subtracting the percentage of detractors from the percentage of promoters.
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• Net Promoter Score
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15%
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Tell Dell/Brand
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Based on Dell's people strategy and enhancing the corporate brand
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• Tell Dell Results
• Brand enhancement
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15%
|
At the end of the fiscal year, Mr. Dell and Mr. Gladden, with input from the Committee, rate performance for each objective on a scale of one (worst) to five (best). The objectives are equally weighted and the scores for each objective are averaged and determined as follows:
|
|
|
Average Score
(a)
|
Corporate Scorecard
Pool Funding
|
Less than 2
|
—%
|
2
|
75%
|
3
|
100%
|
4
|
125%
|
5
|
150%
|
|
|
(a)
|
Average scores between points shown result in interpolation.
|
Business Unit
Performance
- Prior to Fiscal
2013
, the bonus formula illustrated above included a business unit performance modifier applicable to employees working for a business unit. Effective for Fiscal 2013, the business unit modifier was
removed from the bonus formula to simplify the bonus calculation and to better align the formula with external financial reporting results.
Individual Performance
- The Committee, with input from Mr. Dell, evaluates individual performance for Dell's executive officers using a mix of objective and subjective performance objectives, established at the beginning of the fiscal year. For Fiscal
2013
, the following objectives were included:
|
|
•
|
Achieving financial targets for the business
|
|
|
•
|
Strategic and transformational objectives relating to each executive officer's function or business unit, including the degree to which the executive officer is driving change in support of Dell's transformation
|
|
|
•
|
Manager effectiveness, employee satisfaction and diversity
|
|
|
•
|
Measurement against net promoter score goals
|
The Committee does not place specific weightings on the objectives noted above but determines the individual performance modifier based on a holistic and subjective assessment of each individual executive officer's performance against these objectives. To the extent an individual meets these objectives, a modifier of 100% is assigned. As performance deviates from this level, payouts vary above or below the 100% modifier subject to the 150% maximum. The Committee believes that the achievement of these performance objectives would correspond to meaningful improvements for the organization and are reasonably difficult to attain.
Results
- As part of its deliberations related to Dell's proposed merger, the full Board, rather than the Committee, assessed the appropriate corporate bonus modifier based on performance for the year. For Fiscal
2013
, Dell achieved non-GAAP operating income of $3.973 billion, which fell between the threshold and target performance objectives, and achieved net revenue of $56.94 billion, which fell between the threshold and target performance objectives. Non-GAAP operating income is calculated in the manner described above. The results for the Corporate Scorecard fell below target performance objectives established for the year, resulting in a Corporate Scorecard modifier of 80%. Based on this level of corporate financial performance and Corporate Scorecard performance, the corporate bonus modifier would have been set at 63% of target. The Board, however, does not believe setting performance at 63% of target is consistent with performance for Fiscal
2013
given the weak global macro-economic conditions that impacted demand for Dell's products and services. A primary driver of the downward trend of the bonus modifier is the related downturn in the global technology market that was not predicted by Dell at the beginning of the year. Dell's annual plan for Fiscal
2013
assumed industry client growth at approximately 5%. However, industry growth was much softer than expected and many of Dell's peers experienced similar unexpected declines in revenue and operating income. Based on a balanced assessment of Dell's performance for Fiscal
2013
taking into account the weakening global macro-economic environment, the Board exercised its discretion to approve a final bonus modifier at
70%
of target.
In evaluating Mr. Dell's bonus payout for Fiscal
2013
, the Committee considered Mr. Dell's leadership and performance for the year as reflected in Dell's financial results and the progress made towards Dell's strategic transformation. Based on these considerations, the Committee recommended and the Board awarded Mr. Dell a
100%
individual modifier, which resulted in Mr. Dell receiving a payout under the EIBP of
$1,330,000
for Fiscal
2013
. The Committee noted the following individual performance highlights for Mr. Dell:
|
|
•
|
Growth performance was mixed with strong results in enterprise solutions and services
|
|
|
•
|
Brand performance exceeded most goals
|
|
|
•
|
Company met or exceeded most cultural objectives including strong performance in execution of the company's people strategy
|
|
|
•
|
Company experienced no significant compliance issues.
|
Individual modifiers and bonus amounts for the NEOs are described below
|
|
|
|
|
|
|
Named Executive
|
Individual Modifier
|
Company Modifier
|
Bonus Payout
|
Mr. Dell
|
100%
|
70%
|
$
|
1,330,000
|
|
Mr. Gladden
|
100%
|
70%
|
523,385
|
|
Mr. Clarke
|
100%
|
70%
|
538,865
|
|
Mr. Felice
|
100%
|
70%
|
540,481
|
|
Mr. Schuckenbrock
|
100%
|
70%
|
540,481
|
|
Mr. Swainson
|
100%
|
70%
|
507,500
|
|
Long-Term Incentives
Design
- Long-term incentive opportunities are the most significant component of total executive officer compensation. These incentives are designed to motivate executive officers to make decisions in support of long-term company financial interests while also serving as the primary tool for attraction and retention. Long-term incentive awards are delivered through a variety of stock and cash vehicles, described below, intended to meet these objectives.
|
|
•
|
Stock options
- align the interests of the executive officers with those of the stockholders by providing a return only if Dell's stock price appreciates.
|
|
|
•
|
Performance-based stock units
- designed to reward participants for the achievement of financial objectives over the long term. PBUs are denominated in full shares of Dell's common stock and thus the amount earned is also dependent on Dell's stock price over the performance period.
|
|
|
•
|
Restricted stock units
- granted as part of an executive's annual award or as part of an executive's new-hire packages in order to replace the approximate value of unvested long-term incentives forfeited at a previous employer.
|
|
|
•
|
Long-term cash awards
- may be granted to deliver a fixed amount of compensation to replace long-term incentives or pension values forgone by executives when officers join Dell. These awards also have been used periodically as an additional retention tool to retain key individuals.
|
Dell currently maintains the following process relating to the granting of equity awards:
|
|
•
|
Options are granted with an exercise price based on the closing price of Dell's common stock on the date of grant as reported on the NASDAQ Stock Market
|
|
|
•
|
All equity grants to executive officers require approval of the Committee
|
|
|
•
|
In general, awards pursuant to Dell's annual long-term incentive grant process are made on predetermined Board meeting dates, and new-hire grants are made on the 15th day of the month following the month an individual commences employment
|
|
|
•
|
Dell does not backdate options or grant options or other equity awards retroactively
|
|
|
•
|
Dell does not purposely schedule option awards or other equity grants prior to the disclosure of favorable information or after the announcement of unfavorable information
|
Dividend Equivalents -
In connection with the announcement of Dell's dividend policy in Fiscal
2013
, all outstanding RSU and PBU awards were amended to allow dividend equivalents to be credited to unvested awards granted to employees and directors. Upon payment of a cash dividend on Dell's common stock, RSU and PBU holders are entitled to receive a dollar amount equal to the per-share cash dividend paid by Dell, multiplied by the total number of shares issued upon vesting or achievement of performance objectives of the stock units. Any dividend equivalent credited to an RSU or PBU award is subject to the same vesting, forfeiture, payment and other terms and conditions as the related stock units.
Fiscal 2013 Long-Term Incentive Awards
- In Fiscal
2013
, the Committee established annual long-term equity incentive opportunities for each eligible executive officer in combinations of RSUs and PBUs based on their estimated value at grant date. Except for Mr. Dell, the Committee established a mix of Fiscal 2013 NEO long-term incentive awards consisting of 50% RSUs and 50% PBUs. This mix was considered appropriate to address the need to reward the NEOs for their performance in Fiscal
2013
, the need to retain them in the future, the need to incentivize financial and stock price performance and the need to enhance the NEOs' alignment with stockholders. The Board established a mix of long-term incentive awards for Mr. Dell of 100% PBUs.
In awarding long-term incentives, the Committee considers level of responsibility, prior experience and achievement of individual performance criteria, competitive market data (especially for Dell's Core Comparator Peer Group), internal equity considerations, retention concerns and the expenses of the grant. In addition, the Committee also considers past grants of long-term incentive awards, as well as current equity holdings. The long-term incentive program is designed to create significant upside potential as well as exposure to downside risk by tying gains in award values to stockholder returns in excess of industry norms, and losses in award values to stockholder returns below industry norms or the failure to obtain other company goals.
Dell uses a three-year average Black-Scholes value to determine the number of stock options an executive officer receives. The stock options vest ratably over three years beginning on the first anniversary of the date of grant. Because the exercise price of the options is equal to the fair market value of Dell's common stock on the date of grant, the stock options will deliver a reward only if the stock price appreciates from the exercise price on the date the stock options were granted.
The size of PBU grants is based on a target dollar value of the award divided by the stock price on the date of grant. For Fiscal
2013
PBU grants, the actual number of shares earned by NEOs will vary from 0% to 200% of the target award based on two performance metrics: (a) 75% of the target number of units will be earned from 0% to 200% based on a three-year cash flow from operations per share metric; and (b) 25% of the target number of units will be earned from 0% to 200% based on a three-year relative total shareholder return (“TSR”) ranking, measured based on Dell's achievement relative to peer companies. Units earned pursuant to PBU awards granted in Fiscal
2013
, if any, are subject to additional time-based vesting requirements and
will vest on the third anniversary of the date of grant, subject to continued employment through that date.
Fiscal
2013
Long-Term Incentive Award Results
- PBUs granted in Fiscal 2011 are subject to three discrete one-year performance periods, as well as a three-year TSR modifier that increases or reduces the final number of units. Performance metrics are set at the beginning of each annual performance period, and subsequent performance periods have the same performance metrics. PBUs granted in Fiscal 2012 are subject to a three-year cash flow from operations per share metric. After the three-year cash flow from operations per share modifier is applied to the target award, the award will be increased or reduced by 50% based on achievement against a three-year TSR ranking.
Attainment of Fiscal
2013
performance goals affects one-third of the PBUs granted in Fiscal 2011. The table below provides threshold, target and maximum performance levels and the percentage of targeted PBUs earned at these levels. The percentage of PBUs earned is prorated within the ranges below based on the performance level.
|
|
|
|
|
Performance Goals
|
Threshold
|
Target
|
Maximum
|
Fiscal 2013 cash flow from operations per share
|
$2.10
|
$2.90
|
$3.70
|
Payout scale (% of target)
|
80%
|
100%
|
120%
|
In Fiscal
2013
, Dell achieved cash flow from operations per share of $1.84 (excluding the effect of share repurchases), which resulted in a performance modifier equal to the minimum payout of 80% of target for awards granted in Fiscal 2011. The total number of units banked from the three one-year performance periods applicable to the PBUs granted in Fiscal 2011 is also subject to a three-year TSR modifier that increases or reduces the final number of units earned by 25%. From Fiscal 2011 through Fiscal
2013
, Dell achieved a three-year relative TSR in the 17
th
percentile, resulting in a 75% TSR modifier. Based on the performance of the three discrete one-year performance periods and the three-year relative TSR modifier, the Fiscal 2011 PBU final payout is at 72% of target.
Fiscal 2014 Long-Term Incentive Awards
- In light of the pendency of Dell's proposed merger, the Board has decided to delay its determinations concerning Fiscal
2014
long-term incentive grants until after closing of that transaction.
2004 Leadership Edge Cash Retention Awards
- In March 2004, the Committee implemented the Fiscal 2005 Top Talent Retention Plan, which included long-term cash engagement awards. This plan was intended to retain key succession candidates and recognize and reward sustained high levels of performance. Mr. Felice is the only Named Executive Officer who received an award under this plan. Amounts earned under this plan for Fiscal 2011 and 2012 by Mr. Felice are reflected in the Summary Compensation Table below.
2007 Long-Term Cash Engagement Awards
- In March 2006, the Committee implemented the 2007 Long-Term Cash Engagement Award Program. All executive officers employed at that time other than Mr. Dell were eligible for cash engagement awards under this program. This program, which provided for cash payments over four years, was intended to better balance Dell's existing long-term compensation programs between cash and equity awards, and to enhance the overall retention value of the compensation. Mr. Felice and Mr. Clarke are the only NEOs who received awards under this program. Amounts earned under this plan for Fiscal 2011 by Mr. Felice and Mr. Clarke are reflected in the Summary Compensation Table below.
Other Compensation Components
New-Hire Packages
In an effort to build a world-class leadership team, Dell strives to offer competitive new-hire compensation packages. Dell considers the following items in developing and recommending executive officer new-hire compensation packages to the Committee:
|
|
•
|
Internal peers' compensation
|
|
|
•
|
Value of annual incentive bonus forgone by new hire in leaving previous employer
|
|
|
•
|
Value of unvested long-term incentives, pensions, SERPs, and other compensation elements forgone by leaving previous employer
|
|
|
•
|
Desire to align interests of new hire with those of Dell's stockholders
|
Mr. Swainson is the only NEO hired during Fiscal
2013
. Mr. Swainson received a $2,000,000 sign-on bonus, of which 50% was payable on the first payroll date following Mr. Swainson's date of hire and 25% is payable on his first and second anniversaries of his date of hire. Mr. Swainson also received stock options for 1,052,632 shares that vest ratably over five years and 86,456 RSUs that vest ratably over three years. For more information about Mr. Swainson's stock options and RSUs, see the “Grants of Plan Based Awards in Fiscal
2013
” below.
Mr. Schuckenbrock's Post-Termination Consulting Agreement
In December 2012, Mr. Schuckenbrock notified Dell that he intended to resign but would assist with the transition of his role following his termination of employment. In connection with Mr. Schuckenbrock's termination of employment on March 31, 2013, Dell and Schuckenbrock Consulting, LLC, a company owned and controlled by Mr. Schuckenbrock (the "Consultant"), entered into a consultancy agreement. Pursuant to the consultancy agreement, the Consultant, through Mr. Schuckenbrock, will provide consulting services to Dell in the area of services and cloud computing through March 31, 2014, unless the agreement is terminated on an earlier date. The Consultant will be paid a lump sum of $500,000 on or before April 30, 2013 and a lump sum of $1,000,000 on April 1, 2014 unless, among other matters, the Consultant terminates the consultancy agreement for any reason, or unless Dell terminates the agreement upon the occurrence of an event constituting "cause" under the agreement, before the applicable payment date. Under the consultancy agreement, cause is defined to include Mr. Schuckenbrock's violation of his non-compete agreement with Dell, including in connection with his acceptance of full-time employment with another entity. If, after April 1, 2013, the Consultant terminates the consultancy agreement or Mr. Schuckenbrock begins full-time employment with another entity that does not violate his non-compete agreement, the consultancy will terminate and Dell will pay the Consultant on April 1, 2014 an amount equal to $19,231 for each week or part of a week that will have elapsed from April 1, 2013 through the earliest of the date on which the termination became effective, the date on which Mr. Schuckenbrock began his employment, or April 1, 2014. In the circumstances referred to in the preceding sentence, the Consultant will not be entitled to any other payments under the consultancy agreement. The Consultant and Mr. Schuckenbrock have agreed with Dell to comply with customary non-compete, non-solicitation, confidentiality and non-disparagement undertakings. Mr. Schuckenbrock will forfeit 60,490 RSUs granted to him during Fiscal 2012 in connection with his relocation from Dell's Round Rock, Texas office to its Plano, Texas office when he became President, Services.
Benefits and Perquisites
Dell executive officers are provided limited benefits and perquisites. While not a significant part of Dell's executive officer compensation, the Committee believes that limited benefits and perquisites are a typical component of total remuneration for executives in industries similar to Dell's and that providing such benefits is important to delivering a competitive package to attract and retain executive officers. Specific benefits and perquisites are described below.
|
|
•
|
Deferred Compensation Plan
- Dell maintains a nonqualified deferred compensation plan that is available to all Dell executives. For a description of the terms of this plan, as well as information about the account balances held by each of the NEOs, see "Other Benefit Plans - Deferred Compensation Plan" below.
|
|
|
•
|
Annual Physical
- Dell pays for a comprehensive annual physical for each executive officer and the executive officer's spouse or domestic partner and reimburses the executive officer's travel and lodging costs, subject to an annual maximum payment of $5,000 per person.
|
|
|
•
|
Financial Counseling and Tax Preparation Services
- Until the elimination of this perquisite by the Committee following the 2011 calendar year, each executive officer was entitled to reimbursement for financial counseling services up to $12,500 annually (including tax preparation).
|
|
|
•
|
Technical Support
- Dell provides executive officers with computer technical support (personal and business) and, in some cases, certain home network equipment. The incremental cost of providing these services is limited to the cost of hardware provided and is insignificant.
|
|
|
•
|
Security
- Dell provides executive officers with security services, including alarm installation and monitoring and, in some cases, certain home security upgrades pursuant to the recommendations of an independent security study. The company provides Mr. Dell only with business-related security protection.
|
|
|
•
|
Relocation Expenses
- Dell maintains a general relocation policy under which the company provides reimbursement for certain relocation expenses to new employees and to any employee whose job function requires his or her relocation. Dell believes it is important to maintain market competitive relocation benefits to ensure that Dell can fill positions that are critical to Dell's business needs. Executive officers are eligible to participate in the general program but at higher benefit levels consistent with external market practice. The relocation expenses may include moving expenses, temporary housing expenses, transportation expenses, home sale and purchase assistance and tax gross-ups on these payments. In limited instances, special provisions (such as shipment of additional household goods) may be made and approved by the CEO if the excepted payment is under $50,000 per employee, per year, or by the Committee if the excepted payment is $50,000 or more. In lieu of direct reimbursement of expenses, Dell may reimburse relocation expenses through cash sign-on bonuses or through the issuance of long-term incentive awards.
|
|
|
•
|
Expatriate Benefits
- Dell maintains a general expatriate policy under which employees sent on foreign assignments receive payments to cover housing, automobile, club membership and other expenses, as well as tax equalization payments. Executive officers are eligible to participate in the general program but at higher benefit levels consistent with external market practice. In limited instances, special provisions may be made and approved by the CEO if the excepted payment is under $50,000 per employee, per year, or by the Committee if the excepted payment is $50,000
|
or more.
|
|
•
|
Spousal Travel Expenses
- Dell pays for reasonable spousal travel expenses if the spousal travel is at the request of Dell to attend Dell sponsored events.
|
|
|
•
|
Other
- The executive officers participate in Dell's other benefit plans on the same terms as other employees. These plans include medical, dental, and life insurance benefits, and Dell's 401(k) retirement savings plan. See "Other Benefit Plans" below.
|
Stock Ownership Guidelines
The Board has established stock ownership guidelines for directors and Dell's executive officers to link their interests more closely with those of other Dell stockholders. Under these guidelines, non-employee directors must maintain ownership of Dell common stock with an aggregate value equal to at least 300% of their annual retainer, the CEO must maintain ownership of stock with an aggregate value equal to at least 600% of his base salary, and all other executive officers must maintain ownership of stock with an aggregate value equal to at least 400% of their base salary. Unvested restricted stock, unvested RSUs and earned PBUs may be used to satisfy these minimum ownership requirements, but unexercised stock options and awards subject to a performance requirement may not.
Prior to September 2011, each individual had three years to attain the specified minimum ownership position once the individual became subject to the guidelines. The guidelines were amended in September 2011 to allow new executive officers five years to meet the ownership guidelines. This change was implemented to reflect the change in PBU design that can result in zero payout if performance is not achieved. In March 2012, the Committee also adopted a new policy that requires executive officers to retain 50% of their shares acquired through stock option exercises or vesting and settlement of other equity awards, after taking into account the sale or withholding of shares to pay taxes or any stock option exercise price, until such time as the executive officer satisfies the applicable stock ownership guidelines. Dell believes these ownership guidelines are consistent with the prevalent ownership guidelines among peer companies. Compliance with these guidelines is evaluated once each year. As of the most recent evaluation, which was conducted in March 2012, all directors and executive officers met their applicable ownership requirements.
Employment Agreements; Severance and Change-in-Control Arrangements
Substantially all Dell employees enter into a standard employment agreement upon commencement of employment. The standard employment agreement primarily addresses intellectual property and confidential and proprietary information matters and does not contain provisions regarding compensation or continued employment.
Executive officers, other than Mr. Dell, receive standard severance agreements approved by the Committee. Under the agreements, if an executive officer's employment is terminated without cause, the executive will receive a severance payment equal to 200% of base salary. The agreements also obligate each executive officer to comply with certain non-competition and non-solicitation obligations for a period of 12 months following termination of employment.
The Committee has authority under the company's stock plans to issue awards with provisions that accelerate vesting and exercisability in the event of a change in control of Dell and to amend existing awards to provide for such acceleration. The Committee had not previously included change-in-control acceleration provisions in any awards. However, on April 17, 2013, in connection with the proposed merger, the committee approved amendments to Dell's equity award agreements for grants of RSUs and PBUs under the company's stock plans which provide for accelerated vesting of existing award grants if the recipient's employment with Dell is terminated without cause within two years following a change in control of Dell. The severance agreements provide important protection to the executive officers, are consistent with the practice of the peer companies and are appropriate for the attraction and retention of executive talent. Additional information about the severance arrangements is set forth below under "Potential Payments Upon Termination or Change in Control."
Retention Cash Bonus Awards
On April 17, 2013, the Committee approved a program to provide special retention awards in the form of performance-based cash bonuses to aid in the retention of certain key Dell employees, including members of the executive leadership team, vice presidents and executive directors of Dell who are critical to the company's future success. The key employees include the Named Executive Officers other than Mr. Dell.
Under the terms of the retention awards, award recipients are entitled to receive a retention award in the form of a performance-based cash bonus ranging from 0% to 100% of their respective base salaries based on Dell's fiscal year 2014 free operating cash flow performance. The retention award will be payable in March 2014 if the award recipient has remained continuously employed by the company through the payment date. If Dell terminates the award recipient's employment prior to the March 2014 payout date “without cause,” the award recipient is entitled to receive 75% of the maximum retention award value as soon as administratively practicable following termination of employment. In addition, the award recipient is obligated to comply
with certain non-competition and non-solicitation obligations until March 31, 2015, and will be required to return the award in the event of non-compliance.
The retention awards provide that if any rights, payments or benefits provided by Dell to an award recipient following a “change in control” of Dell would be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code, payment of the retention award will be reduced or eliminated to the extent necessary to avoid application of the excise tax so long as the reduction or elimination would result in a larger net after-tax payment to the award recipient in connection with the change in control payments.
Indemnification
Under Dell's Certificate of Incorporation and Bylaws, Dell's officers, including the NEOs, are entitled to indemnification from Dell to the fullest extent permitted by Delaware corporate law. Dell has entered into indemnification agreements with each of the NEOs which establish processes for indemnification claims.
Recoupment Policy for Performance-Based Compensation
If Dell restates its reported financial results, the Board will review the bonus and other cash or equity awards made to the executive officers based on financial results during the period subject to the restatement, and, to the extent practicable under applicable law, Dell will seek to recover or cancel any such awards which were awarded as a result of achieving performance targets that would not have been met under the restated financial results.
Other Factors Affecting Compensation
In establishing total compensation for the executive officers, the Committee considers the effect of Section 162(m) of the Internal Revenue Code, which limits the deductibility of compensation paid to each covered employee. Generally, Section 162(m) of the Internal Revenue Code prevents a company from receiving a federal income tax deduction for compensation paid to the chief executive officer and the next three most highly compensated officers (other than the chief financial officer) in excess of $1 million for any year, unless that compensation is performance-based. One of the requirements of "performance-based" compensation for purposes of Section 162(m) is that the compensation be paid pursuant to a plan that has been approved by the company's stockholders. To the extent practicable, the Committee intends to preserve deductibility, but may choose to provide compensation that is not deductible if necessary to attract, retain and reward high-performing executives.
Leadership Development and Compensation Committee Report
The Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on that review and those discussions, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in Dell's
2013
proxy statement and in Dell's Annual Report on Form 10-K for the fiscal year ended
February 1, 2013
. This report is provided by the following independent directors, who constitute the Committee.
THE LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE
SHANTANU NARAYEN, Chair
WILLIAM H. GRAY, III
GERARD J. KLEISTERLEE
Leadership Development and Compensation Committee Interlocks and Insider Participation
No member of the Leadership Development and Compensation Committee is or has been an officer or employee of Dell, and no member of the Committee had any relationships requiring disclosure under Item 404 of the SEC’s Regulation S-K requiring disclosure of certain relationships and related-person transactions. None of Dell’s executive officers served on the board of directors or compensation committee (or other committee serving an equivalent function) of any other entity that has or had one or more executive officers who served as a member of Dell’s Board or the Leadership Development and Compensation Committee during Fiscal
2013
.
Summary Compensation
The following table summarizes the total compensation for Fiscal
2013
, 2012 and 2011 for the following persons: Michael S. Dell (principal executive officer), Brian T. Gladden (principal financial officer), and Jeffrey W. Clarke, Stephen J. Felice, and John A. Swainson (the three other most highly compensated individuals who were serving as executive officers at the end of Fiscal
2013
), as well as Stephen F. Schuckenbrock, who resigned as President, Services on December 5, 2012. These persons are referred to as the “Named Executive Officers.”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Compensation Table
|
|
|
|
|
|
|
Non-Equity
|
|
|
Name and
|
Fiscal
|
|
|
Stock
|
Option
|
Incentive Plan
|
All Other
|
|
Principal Position
|
Year
|
Salary
|
Bonus
(a)
|
Awards
(b)
|
Awards
(c)
|
Compensation
(d)
|
Compensation
(e)
|
Total
|
|
|
|
|
|
|
|
|
|
Michael S. Dell
|
2013
|
$
|
950,000
|
|
—
|
$
|
11,597,790
|
|
—
|
$
|
1,330,000
|
|
$
|
19,122
|
|
$
|
13,896,912
|
|
Chairman and Chief
|
2012
|
986,601
|
|
—
|
9,435,285
|
|
$
|
2,387,721
|
|
3,314,770
|
|
14,121
|
|
16,138,498
|
|
Executive Officer
|
2011
|
950,000
|
|
$
|
750,000
|
|
—
|
—
|
2,635,000
|
|
17,460
|
|
4,352,460
|
|
|
|
|
|
|
|
|
|
|
Brian T. Gladden
|
2013
|
747,692
|
|
—
|
5,850,435
|
|
—
|
523,385
|
|
13,870
|
|
7,135,382
|
|
Senior Vice President and
|
2012
|
753,461
|
|
—
|
4,459,586
|
|
1,662,463
|
|
1,265,815
|
|
38,298
|
|
8,179,623
|
|
Financial Officer
|
2011
|
700,000
|
|
—
|
1,582,396
|
|
1,604,180
|
|
1,251,600
|
|
28,920
|
|
5,167,096
|
|
|
|
|
|
|
|
|
|
|
Jeffrey W. Clarke
|
2013
|
769,808
|
|
—
|
5,824,796
|
|
—
|
538,865
|
|
18,452
|
|
7,151,921
|
|
Vice Chairman and Chief
|
2012
|
719,308
|
|
—
|
4,440,036
|
|
1,662,463
|
|
1,410,465
|
|
20,586
|
|
8,252,858
|
|
Operating Officer
|
2011
|
600,000
|
|
—
|
1,555,770
|
|
1,477,538
|
|
1,162,200
|
|
1,004,790
|
|
5,800,298
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Felice
|
2013
|
772,115
|
|
—
|
5,928,727
|
|
—
|
540,481
|
|
16,459
|
|
7,257,782
|
|
President, Chief Commercial
|
2012
|
771,154
|
|
—
|
5,451,453
|
|
1,899,954
|
|
1,327,927
|
|
201,149
|
|
9,651,637
|
|
Officer
|
2011
|
686,731
|
|
—
|
1,898,567
|
|
1,857,475
|
|
1,227,875
|
|
4,448,443
|
|
10,119,091
|
|
|
|
|
|
|
|
|
|
|
Stephen F. Schuckenbrock
|
2013
|
772,115
|
|
—
|
5,916,713
|
|
—
|
540,481
|
|
34,001
|
|
7,263,310
|
|
Former President, Services
|
2012
|
767,308
|
|
—
|
6,909,637
|
|
1,899,954
|
|
1,204,481
|
|
1,939,443
|
|
12,720,823
|
|
|
2011
|
675,000
|
|
—
|
1,730,129
|
|
1,646,396
|
|
1,373,288
|
|
23,850
|
|
5,448,663
|
|
|
|
|
|
|
|
|
|
|
John A. Swainson
|
2013
|
725,000
|
|
1,000,000
|
|
1,547,118
|
|
6,495,582
|
|
507,500
|
|
88,423
|
|
10,363,623
|
|
President, Software
|
2012
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
2011
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
|
(a)
|
Amount for Mr. Dell for Fiscal 2011 represents a discretionary bonus paid to him in recognition of his performance for Fiscal 2011 and for Mr. Swainson for Fiscal 2013 represents a sign-on bonus paid to him upon commencement of his employment.
|
|
|
(b)
|
Amounts for Mr. Dell, Mr. Gladden, Mr. Clarke, Mr. Felice, Mr. Schuckenbrock and Mr. Swainson represent the probable grant date fair values on the date of grant (100% of the target) of awards of performance-based stock units, as well as restricted stock units and expenses related to the modification of prior awards by adding dividend equivalent rights, computed in accordance with FASB ASC Topic 718, as described below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
PBU - Target
|
PBU Award Modification Target
|
PBU - Assuming Maximum Performance
|
PBU Award Modification Maximum
|
RSU
|
RSU Award Modification
|
Mr. Dell
|
2013
|
$
|
10,863,869
|
|
$
|
733,921
|
|
$
|
18,363,875
|
|
$
|
1,230,643
|
|
—
|
—
|
|
2012
|
9,435,285
|
|
—
|
14,152,937
|
|
—
|
—
|
—
|
|
2011
|
—
|
—
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
Mr. Gladden
|
2013
|
3,015,681
|
|
258,050
|
|
5,038,685
|
|
485,074
|
|
$
|
2,500,009
|
|
$
|
76,695
|
|
|
2012
|
4,459,586
|
|
—
|
6,755,643
|
|
—
|
—
|
—
|
|
2011
|
1,582,396
|
|
—
|
1,842,360
|
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
Mr. Clarke
|
2013
|
2,992,022
|
|
256,070
|
|
5,003,342
|
|
482,983
|
|
2,500,009
|
|
76,695
|
|
|
2012
|
4,440,036
|
|
—
|
6,725,955
|
|
—
|
—
|
—
|
|
2011
|
1,555,770
|
|
—
|
1,893,525
|
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
Mr. Felice
|
2013
|
3,063,017
|
|
289,006
|
|
5,109,407
|
|
529,749
|
|
2,500,009
|
|
76,695
|
|
|
2012
|
5,451,453
|
|
—
|
8,248,787
|
|
—
|
—
|
—
|
|
2011
|
1,898,567
|
|
—
|
2,265,908
|
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
Mr. Schuckenbrock
|
2013
|
3,023,556
|
|
285,706
|
|
5,050,449
|
|
526,265
|
|
2,500,009
|
|
107,442
|
|
|
2012
|
5,409,622
|
|
—
|
8,180,817
|
|
—
|
1,500,015
|
|
—
|
|
2011
|
1,730,129
|
|
—
|
2,103,025
|
|
—
|
—
|
|
—
|
|
|
|
|
|
|
|
|
Mr. Swainson
|
2013
|
—
|
—
|
—
|
—
|
1,500,012
|
|
47,106
|
|
|
|
(c)
|
Represents the aggregate grant date fair value of grants awarded in Fiscal 2013, 2012 and 2011, computed in accordance with FASB ASC Topic 718.
|
|
|
(d)
|
Represents amounts earned pursuant to the Executive Annual Incentive Bonus Plan for each Named Executive Officer.
|
|
|
(e)
|
Includes the cost of providing various perquisites and personal benefits, as well the value of Dell’s contributions to the company-sponsored 401(k) plan and deferred compensation plan, and the amount Dell paid for term life insurance coverage under health and welfare plans. See “Compensation Discussion and Analysis – Other Compensation Components—Benefits and Perquisites” for additional information.
|
The following table provides detail for the aggregate “All Other Compensation” for each of the Named Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
Retirement Plans Matching Contributions
|
Benefit Plans
|
Financial Counseling
|
Annual Physical
|
Security
|
Technical Support
|
Relocation Expenses
|
Long-Term
Cash Award
|
Expatriate Expenses
|
Spousal Travel
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Dell
|
2013
|
$
|
12,500
|
|
$
|
1,622
|
|
—
|
$
|
5,000
|
|
—
|
—
|
—
|
—
|
—
|
—
|
|
2012
|
12,250
|
|
1,871
|
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
2011
|
12,250
|
|
1,123
|
|
—
|
4,087
|
|
—
|
—
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Gladden
|
2013
|
12,577
|
|
1,252
|
|
—
|
—
|
—
|
$
|
41
|
|
—
|
—
|
—
|
—
|
|
2012
|
12,365
|
|
1,216
|
|
$
|
12,500
|
|
4,057
|
|
$
|
7,537
|
|
623
|
|
—
|
—
|
—
|
—
|
|
2011
|
12,250
|
|
1,170
|
|
12,500
|
|
3,000
|
|
—
|
—
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Clarke
|
2013
|
12,673
|
|
1,286
|
|
—
|
|
4,411
|
|
—
|
82
|
|
—
|
—
|
—
|
—
|
|
2012
|
12,750
|
|
1,146
|
|
—
|
|
6,326
|
|
364
|
|
—
|
—
|
—
|
—
|
—
|
|
2011
|
—
|
990
|
|
—
|
3,800
|
|
—
|
—
|
—
|
$
|
1,000,000
|
|
—
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Felice
|
2013
|
12,558
|
|
3,711
|
|
—
|
—
|
—
|
190
|
|
—
|
—
|
—
|
—
|
|
2012
|
12,365
|
|
1,622
|
|
—
|
5,854
|
|
20,110
|
|
289
|
|
—
|
140,828
|
|
$
|
19,913
|
|
$
|
168
|
|
|
2011
|
12,515
|
|
1,757
|
|
12,500
|
|
5,867
|
|
—
|
—
|
—
|
1,940,828
|
|
2,473,570
|
|
1,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Schuckenbrock
|
2013
|
12,497
|
|
1,985
|
|
—
|
1,845
|
|
17,252
|
|
422
|
|
—
|
—
|
—
|
—
|
|
2012
|
12,538
|
|
1,900
|
|
7,500
|
|
5,000
|
|
154
|
|
623
|
|
$1,911,728
|
—
|
—
|
—
|
|
2011
|
12,250
|
|
1,171
|
|
7,500
|
|
2,842
|
|
87
|
|
—
|
—
|
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Swainson
|
2013
|
14,173
|
|
3,081
|
|
—
|
—
|
21,384
|
|
—
|
49,785
|
|
—
|
—
|
—
|
|
2012
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
2011
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
The amounts shown for Financial Counseling represent reimbursement for financial counseling, including tax preparation.
The amounts shown for Security costs represent the amount of company-paid expenses relating to residential security for the Named Executive Officers under a Board-authorized security program.
The Relocation Expenses amount for Mr. Schuckenbrock includes the amount paid by Dell to relocate him from Dell’s Round Rock, Texas office to its Plano, Texas office when he became President, Services. This includes a cash payment of $1,500,000 to compensate him for the loss on the sale of his house in the Austin, Texas area.
The amounts shown for Long-Term Cash Award for Mr. Clarke and Mr. Felice for Fiscal 2011 represent amounts paid (a) pursuant to the vesting of a previously granted award under the 2007 Long-Term Cash Engagement Award (for Mr. Clarke—$
1,000,000
and for Mr. Felice—$1,800,000 ) and (b) pursuant to the vesting of a previously granted award under the 2004 Leadership Edge Cash Retention Awards (for Mr. Felice – $140,828 for Fiscal 2012 and 2011) See “Compensation Discussion and Analysis – Individual Compensation Components – Long-Term Incentives – 2004 Leadership Edge Cash Retention Awards” and “– 2007 Long-Term Cash Engagement Awards.”
The amounts shown under Expatriate Expenses represent amounts paid to cover tax equalizations and living expenses while Mr. Felice was on expatriate assignments. Mr. Felice’s assignment to Singapore ended in Fiscal 2011. His return to the United States resulted in a tax amount of approximately $3,265,845 paid in Fiscal 2011. This tax amount, paid pursuant to the company’s tax equalization policy, related primarily to Singapore foreign exit taxes. The benefit of any foreign tax credits associated with this tax amount accrues to the company. In Fiscal 2012, $420,990 was returned to the company and in Fiscal 2013, $515,079 was returned to the company.
The amount shown for Spousal Travel is the cost to Dell for the executive’s spouse to travel, at Dell’s request, to attend Dell-sponsored events.
Grants of Plan-Based Awards in Fiscal 2013
The following table sets forth certain information about plan-based awards that were made to or modified for the Named Executive Officers during Fiscal
2013
. For more information about the plans under which these awards were granted, see "Compensation Discussion and Analysis" above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grants of Plan-Based Awards in Fiscal 2013 Table
|
|
|
Estimated Future Payouts Under Non-equity Incentive Plan Awards
(a)
|
Estimated Future Payouts Under Equity Incentive Plan Awards
(b)
|
All Other
|
All Other
|
|
|
Name
|
Grant Date
|
Threshold
|
Target
|
Maximum
|
Threshold
|
Target
|
Maximum
|
Stock Awards: Number of Shares of Stock or Units
|
Option Awards: Number of Securities Underlying Options
|
Exercise or Base Price of Option Awards
|
Grant Date Fair Value of Stock and Option Awards
(c)
|
Mr. Dell
|
3/2/12
|
$
|
950,000
|
|
$
|
1,900,000
|
|
$
|
5,788,000
|
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
3/2/12
|
—
|
—
|
—
|
288,019
(d)
|
576,037
(d)
|
1,152,074
(d)
|
—
|
—
|
—
|
$
|
10,863,869
|
|
|
6/11/12
|
—
|
—
|
—
|
288,019
(e)
|
1,058,974
(e)
|
2,238,682
(e)
|
—
|
—
|
—
|
733,921
(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Gladden
|
3/1/12
|
—
|
—
|
—
|
—
|
—
|
—
|
143,844
(f)
|
—
|
—
|
2,500,009
|
|
|
3/2/12
|
375,000
|
|
750,000
|
|
2,894,000
|
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
3/2/12
|
—
|
—
|
—
|
72,006
(d)
|
144,010
(d)
|
288,020
(d)
|
—
|
—
|
—
|
2,715,985
|
|
|
3/2/12
|
—
|
—
|
—
|
—
|
16,898
(g)
|
38,021
(g)
|
—
|
—
|
—
|
299,696
|
|
|
6/11/12
|
—
|
—
|
—
|
72,006
(e)
|
483,417
(e)
|
1,075,953
(e)
|
—
|
—
|
—
|
258,050
(e)
|
|
|
6/11/12
|
—
|
—
|
—
|
—
|
—
|
—
|
143,844
(e)
|
—
|
—
|
76,695
(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Clarke
|
3/1/12
|
—
|
—
|
—
|
—
|
—
|
—
|
143,844
(f)
|
—
|
—
|
2,500,009
|
|
|
3/2/12
|
387,500
|
|
775,000
|
|
2,894,000
|
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
3/2/12
|
—
|
—
|
—
|
72,006
(d)
|
144,010
(d)
|
288,020
(d)
|
—
|
—
|
—
|
2,715,985
|
|
|
3/2/12
|
—
|
—
|
—
|
—
|
15,564
(g)
|
35,019
(g)
|
—
|
—
|
—
|
276,037
|
|
|
6/11/12
|
—
|
—
|
—
|
72,006
(e)
|
473,141
(e)
|
1,062,275
(e)
|
—
|
—
|
—
|
256,070
(e)
|
|
|
6/11/12
|
—
|
—
|
—
|
—
|
—
|
—
|
143,844
(e)
|
—
|
—
|
76,695
(e)
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
Mr. Felice
|
3/1/12
|
—
|
—
|
—
|
—
|
—
|
—
|
143,844
(f)
|
—
|
—
|
2,500,009
|
|
3/2/12
|
387,500
|
|
775,000
|
|
2,894,000
|
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
3/2/12
|
—
|
—
|
—
|
72,006
(d)
|
144,010
(d)
|
288,020
(d)
|
—
|
—
|
—
|
2,715,985
|
|
|
3/2/12
|
—
|
—
|
—
|
—
|
19,567
(g)
|
44,026
(g)
|
—
|
—
|
—
|
347,032
|
|
|
6/11/12
|
—
|
—
|
—
|
72,006
(e)
|
552,259
(e)
|
1,211,968
(e)
|
—
|
—
|
—
|
289,006
(e)
|
|
|
6/11/12
|
—
|
—
|
—
|
—
|
—
|
—
|
143,844
(e)
|
—
|
—
|
76,695
(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Schuckenbrock
|
3/1/12
|
—
|
—
|
—
|
—
|
—
|
—
|
143,844
(f)
|
—
|
—
|
2,500,009
|
|
3/2/12
|
387,500
|
|
775,000
|
|
2,894,000
|
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
3/2/12
|
—
|
—
|
—
|
72,006
(d)
|
144,010
(d)
|
288,020
(d)
|
—
|
—
|
—
|
2,715,985
|
|
|
3/2/12
|
—
|
—
|
—
|
—
|
17,342
(g)
|
39,020
(g)
|
—
|
—
|
—
|
307,571
|
|
|
6/11/12
|
—
|
—
|
—
|
72,006
(e)
|
535,134
(e)
|
1,189,171
(e)
|
—
|
—
|
—
|
285,706
(e)
|
|
|
6/11/12
|
—
|
—
|
—
|
—
|
—
|
—
|
234,589
(e)
|
—
|
—
|
107,442
(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Swainson
|
3/2/12
|
362,500
|
|
725,000
|
|
2,894,000
|
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
3/15/12
|
—
|
—
|
—
|
—
|
—
|
—
|
86,456
(f)
|
—
|
—
|
1,500,012
|
|
|
3/15/12
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
1,052,632
(h)
|
$17.35
(h)
|
6,495,582
|
|
|
6/11/12
|
—
|
—
|
—
|
—
|
—
|
—
|
86,456
(e)
|
—
|
—
|
47,106
(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
All Named Executive Officers participated in the Executive Incentive Bonus Plan ("EIBP"). Under that plan, the threshold to fund a bonus pool is positive consolidated net income, adjusted for charges related to acquisitions. The maximum payout is established at
0.20%
and
0.10%
of consolidated net income, adjusted for charges related to acquisitions, for Mr. Dell and for all other Named Executive Officers, respectively. Within that plan the Leadership Development and Compensation Committee established, based on performance metrics, a threshold (50% of target), target and maximum (281.25% of target) for each officer to determine actual payouts. For Fiscal 2013, the maximum under the EIBP was lower than the maximum established for the officers by the Committee. Based on the Board's evaluation of the performance metrics, the company modifier was set at
70%
for Fiscal 2013. For actual award amounts, see "Summary Compensation Table - Non-Equity Incentive Plan Compensation." For more information on the Executive Incentive Bonus Plan and the evaluation of the performance metrics, see "Compensation Discussion and Analysis - Individual Compensation Components - Annual Incentive Bonus."
|
|
|
(b)
|
For a discussion of the assumptions and methodologies used to calculate the value of the awards shown in this column, see footnote (b) to the “Summary Compensation Table.”
|
|
|
(c)
|
Represents the fair value of equity awards on grant date or modification date computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used to calculate the value of the awards shown in this column, see footnote (b) to the “Summary Compensation Table.”
|
|
|
(d)
|
Under the terms of this agreement, the actual number of units earned will vary from 0% to 200% of the target award based on two performance metrics: (1) 75% of the target number of units will be adjusted from 0% to 200% based on a three-year cash flow from operations per share metric; and (2) 25% of the target number of units will be adjusted 0% to 200% based on a three-year relative total shareholder return (“TSR”) ranking, measured based on Dell's achievement relative to peer companies. Units earned pursuant to PBU awards granted in Fiscal
2013
will vest on March 2, 2015.
|
|
|
(e)
|
This amount represents the number of units modified and the incremental fair value, computed in accordance with FASB ASC Topic 718, of the modification on June 11, 2012, of outstanding PBUs and RSUs to provide for dividend equivalents as discussed under "Compensation Discussion and Analysis - Long Term Incentives - Dividend Equivalents."
|
|
|
(f)
|
Represents restricted stock units that are scheduled to vest and become exercisable ratably over three years beginning on the first anniversary of the date of grant. All unvested restricted stock units will be forfeited upon termination of employment.
|
|
|
(g)
|
Represents the portion of performance-based stock units, above the threshold, awarded on March 26, 2010, that did not meet grant date definition pursuant to FASB ASC Topic 718 until the annual performance metrics were approved in Fiscal 2013 by the Leadership Development and Compensation Committee on March 3, 2012. Under the terms of this award, one-third of the units awarded on March 26, 2010 were subject to Fiscal 2013 performance metrics. The units earned vested on March 26, 2013. Of the share amounts above, the number of units earned will vary from 0% to 225% of target based on an annual cash flow from operations per share metric and a three-year relative TSR metric. Each earned unit represents the right to receive one share of Dell common stock on the date it vests.
|
|
|
(h)
|
Represents stock options that are scheduled to vest and become exercisable ratably over five years beginning on the first anniversary of the date of grant. All unvested options expire upon the termination of employment for any reason other than death or permanent disability. All unvested options vest immediately upon death or permanent disability, and all options expire one year later. If employment is terminated for conduct detrimental to the company, all options (whether or not vested) expire immediately. If employment is terminated as a result of normal retirement, vested options expire on the third anniversary of the retirement date. If employment is terminated for any other reason, all vested options expire 90 days after such termination. In any event, the options expire ten years from the date of grant unless exercised or otherwise expired as described above. All options are transferable to family members under specified circumstances. The exercise price is equal to the closing price of Dell common stock on the date of grant as reported on the NASDAQ Stock Market.
|
Outstanding Equity Awards at Fiscal Year-End 2013
The following table sets forth certain information about outstanding option and stock awards held by the Named Executive Officers as of the end of Fiscal
2013
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
Number of Securities Underlying Unexercised Options
|
|
|
|
|
Equity Incentive Plan Awards
|
Name
|
Exercisable
|
Unexercisable
|
Option Exercise
Price
|
Option Expiration
Date
|
Number of Shares or Units of Stock that Have Not
Vested
|
Market Value of Shares or Units of Stock That Have
Not Vested
(a)
|
Number of Unearned Shares, Units or Other Rights That Have Not
Vested
|
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not
Vested
(a)
|
Mr. Dell
|
400,000
|
|
—
|
$
|
26.19
|
|
3/6/2013
|
—
|
—
|
—
|
—
|
|
400,000
|
|
—
|
34.24
|
|
9/4/2013
|
—
|
—
|
—
|
—
|
|
400,000
|
|
—
|
32.99
|
|
3/4/2014
|
—
|
—
|
—
|
—
|
|
150,997
|
|
301,902
(b)
|
15.73
|
|
3/3/2021
|
—
|
—
|
—
|
—
|
|
—
|
—
|
—
|
—
|
—
|
—
|
1,058,974
(c)
|
$ 14,433,816
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Gladden
|
922,000
|
|
—
|
20.57
|
|
5/20/2018
|
—
|
—
|
—
|
—
|
|
265,010
|
|
—
|
8.39
|
|
3/5/2019
|
—
|
—
|
—
|
—
|
|
211,263
|
|
105,615
(d)
|
14.99
|
|
3/26/2020
|
—
|
—
|
—
|
—
|
|
107,847
|
|
215,629
(e)
|
15.44
|
|
3/2/2021
|
—
|
—
|
—
|
—
|
|
—
|
—
|
—
|
—
|
235,106
(f)
|
$ 3,204,495
(f)
|
392,155
(g)
|
5,345,073
(g)
|
|
|
|
|
|
|
|
|
|
Mr. Clarke
|
270,000
|
|
—
|
26.19
|
|
3/6/2013
|
—
|
—
|
—
|
—
|
|
150,000
|
|
—
|
34.24
|
|
9/4/2013
|
—
|
—
|
—
|
—
|
|
150,000
|
|
—
|
32.99
|
|
3/4/2014
|
—
|
—
|
—
|
—
|
|
150,000
|
|
—
|
35.35
|
|
9/2/2014
|
—
|
—
|
—
|
—
|
|
200,000
|
|
—
|
40.17
|
|
3/3/2015
|
—
|
—
|
—
|
—
|
|
245,000
|
|
—
|
28.95
|
|
3/9/2016
|
—
|
—
|
—
|
—
|
|
312,303
|
|
—
|
22.28
|
|
3/8/2017
|
—
|
—
|
—
|
—
|
|
309,453
|
|
—
|
19.67
|
|
3/4/2018
|
—
|
—
|
—
|
—
|
|
595,948
|
|
—
|
8.39
|
|
3/5/2019
|
—
|
—
|
—
|
—
|
|
194,585
|
|
97,277
(d)
|
14.99
|
|
3/26/2020
|
—
|
—
|
—
|
—
|
|
107,847
|
|
215,629
(e)
|
15.44
|
|
3/2/2021
|
—
|
—
|
—
|
—
|
|
—
|
—
|
—
|
—
|
227,900
(h)
|
3,106, 277
(h)
|
389,085
(i)
|
5,303,229
(i)
|
|
|
|
|
|
|
|
|
|
Mr. Felice
|
24,360
|
|
—
|
26.19
|
|
3/6/2013
|
—
|
—
|
—
|
—
|
|
72,280
|
|
—
|
34.24
|
|
9/4/2013
|
—
|
—
|
—
|
—
|
|
32,515
|
|
—
|
32.99
|
|
3/4/2014
|
—
|
—
|
—
|
—
|
|
29,705
|
|
—
|
35.35
|
|
9/2/2014
|
—
|
—
|
—
|
—
|
|
56,635
|
|
—
|
40.17
|
|
3/3/2015
|
—
|
—
|
—
|
—
|
|
75,000
|
|
—
|
40.63
|
|
8/1/2015
|
—
|
—
|
—
|
—
|
|
280,000
|
|
—
|
28.95
|
|
3/9/2016
|
—
|
—
|
—
|
—
|
|
234,228
|
|
—
|
22.28
|
|
3/8/2017
|
—
|
—
|
—
|
—
|
|
265,245
|
|
—
|
19.67
|
|
3/4/2018
|
—
|
—
|
—
|
—
|
|
244,621
|
|
122,291
(d)
|
14.99
|
|
3/26/2020
|
—
|
—
|
—
|
—
|
|
123,254
|
|
246,432
(j)
|
15.44
|
|
3/2/2021
|
—
|
—
|
—
|
—
|
|
—
|
—
|
—
|
—
|
249,517
(k)
|
3,400,917
(k)
|
446,586
(l)
|
6,086,967
(l)
|
|
|
|
|
|
|
|
|
|
Mr. Schuckenbrock
|
550,000
|
|
—
|
26.29
|
|
1/8/2017
|
—
|
—
|
—
|
—
|
|
243,129
|
|
—
|
28.42
|
|
9/6/2017
|
—
|
—
|
—
|
—
|
|
380,187
|
|
—
|
19.67
|
|
3/4/2018
|
—
|
—
|
—
|
—
|
|
108,395
|
|
108,394
(m)
|
14.99
|
|
3/26/2020
|
—
|
—
|
—
|
—
|
|
—
|
246,432
(n)
|
15.44
|
|
3/2/2021
|
—
|
—
|
—
|
—
|
|
—
|
—
|
—
|
—
|
297,997
(o)
|
4,061,699
(o)
|
441,471
(p)
|
6,017,250
(p)
|
|
|
|
|
|
|
|
|
|
Mr. Swainson
|
—
|
1,052,632
(q)
|
17.35
|
|
3/15/2022
|
—
|
—
|
—
|
—
|
|
—
|
—
|
—
|
—
|
86,456
(r)
|
1,178,395
(r)
|
—
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Value based on the closing price of Dell common stock on
February 1, 2013
(
$13.63
) as reported on the NASDAQ Stock Market.
|
|
|
(b)
|
Non-qualified stock options, of which 150,951 vested on March 3, 2013. The remaining 150,951 options will vest on March 3, 2014.
|
|
|
(c)
|
The unearned portion (based on target performance) of performance-based restricted stock units granted on March 8, 2011 and March 2, 2012. The grants are scheduled to vest as follows: 482,937 units will vest on March 8, 2014 and 576,037 units will vest on March 2, 2015.
|
|
|
(d)
|
Non-qualified stock options that vested on March 26, 2013.
|
|
|
(e)
|
Non-qualified stock options, of which 107,815 options vested on March 2, 2013. The remaining 107,814 options will vest on March 2, 2014.
|
|
|
(f)
|
Represents, as of fiscal year-end, restricted stock units and earned performance-based units no longer subject to performance metrics, of which 47,958 units vested on March 1, 2013, and 91,262 units vested on March 26, 2013. The remaining 95,886 units will vest as follows: 47,943 units on March 1 of 2014 and 2015.
|
|
|
(g)
|
Represents, as of fiscal year-end, the unearned portion (based on target performance) of performance-based restricted stock units granted on March 26, 2010, March 8, 2011, and March 2, 2012. Based on Fiscal 2013 performance, no additional shares were earned and 38,872 shares were canceled. The March 8, 2011 grant will vest on March 8, 2014 and the March 2, 2012 grant will vest on March 2, 2015. Both grants remain subject to future performance metrics.
|
|
|
(h)
|
Represents, as of fiscal year-end, restricted stock units and earned performance-based units no longer subject to performance metrics, of which 47,958 units vested on March 1, 2013, and 84,056 units vested on March 26, 2013. The remaining 95,886 units will vest as follows: 47,943 units on March 1 of 2014 and 2015.
|
|
|
(i)
|
Represents, as of fiscal year-end, the unearned portion (based on target performance) of performance-based restricted stock units granted on March 26, 2010, March 8, 2011, and March 2, 2012. Based on Fiscal 2013 performance, no additional shares were earned and 35,802 shares were canceled. The March 8, 2011 grant will vest on March 8, 2014 and the March 2, 2012 grant will vest on March 2, 2015. Both grants remain subject to future performance metrics.
|
|
|
(j)
|
Non-qualified stock options, of which 123,216 options vested on March 2, 2013. The remaining 123,216 options will vest on March 2, 2014.
|
|
|
(k)
|
Represents, as of fiscal year-end, restricted stock units and earned performance-based units no longer subject to performance metrics, of which 47,958 units vested on March 1, 2013, and 105,673 units vested on March 26, 2013. The remaining 95,886 units will vest as follows: 47,943 units on March 1 of 2014 and 2015.
|
|
|
(l)
|
Represents, as of fiscal year-end, the unearned portion (based on target performance) of performance-based restricted stock units granted on March 26, 2010, March 8, 2011, and March 2, 2012. Based on Fiscal 2013 performance, no additional shares were earned and 45,009 shares were canceled. The March 8, 2011 grant will vest on March 8, 2014 and the March 2, 2012 grant will vest on March 2, 2015. Both grants remain subject to future performance metrics.
|
|
|
(m)
|
Non-qualified stock options that vested on March 26, 2013. Because Mr. Schuckenbrock resigned from Dell effective March 31, 2013, this grant will expire on June 30, 2013.
|
|
|
(n)
|
Non-qualified stock options, of which 123,216 options vested on March 2, 2013. The remaining 123,216 options were scheduled to vest on March 2, 2014. Because Mr. Schuckenbrock resigned from Dell effective March 31, 2013, this grant will expire on June 30, 2013.
|
|
|
(o)
|
Represents, as of fiscal year-end, restricted stock units and earned performance-based units no longer subject to performance metrics, of which 47,958 units vested on March 1, 2013, and 93,663 units vested on March 26, 2013. The remaining 156,376 units were scheduled to vest as follows: 47,943 units on March 1 of 2014 and 2015, and 30,245 units on July 13 of 2013 and 2014. Because Mr. Schuckenbrock resigned from Dell effective March 31, 2013, the unvested units were forfeited.
|
|
|
(p)
|
Represents, as of fiscal year-end, the unearned portion (based on target performance) of performance-based restricted stock units granted on March 26, 2010, March 8, 2011, and March 2, 2012. Based on Fiscal 2013 performance, no additional shares were earned and 39,894 shares were canceled. The March 8, 2011 grant was scheduled to vest on March 8, 2014, and the March 2, 2012, grant was scheduled vest on March 2, 2015. Both grants remained subject to future performance metrics. Because Mr. Schuckenbrock resigned from Dell effective March 31, 2013, the unvested units were forfeited.
|
|
|
(q)
|
Non-qualified stock options, of which 210,526 shares vested on March 15, 2013. The remaining 842,106 options will vest as follows: 210,526 options on March 15 of 2014 through 2016 and 210,528 options on March 2017.
|
|
|
(r)
|
Represents restricted stock units of which 28,825 units vested on March 15, 2013, and the remaining 57,631 units will vest as follows: 28,816 on March 15, 2014, and 28,815 on March 15, 2015.
|
Option Exercises and Stock Vested During Fiscal 2013
The following table sets forth certain information about option exercises and vesting of restricted stock during Fiscal
2013
for the Named Executive Officers who exercised options or had restricted stock or restricted stock units vest during Fiscal
2013
.
|
|
|
|
|
|
|
|
|
|
|
Option Exercises and Stock Vested During Fiscal 2013 Table
|
|
Option Awards
|
|
Stock Awards
|
Name
|
Number of Shares Acquired on Exercise
|
Value Realized upon Exercise
|
|
Number of Shares Acquired on Vesting
|
Value Realized on Vesting
(a)
|
Mr. Gladden
|
43,750
|
$
|
394,901
|
|
|
358,761
|
$
|
6,185,040
|
|
Mr. Clarke
|
—
|
—
|
|
|
358,761
|
6,185,040
|
|
Mr. Felice
|
640,644
|
5,720,665
|
|
|
388,642
|
6,700,567
|
|
Mr. Schuckenbrock
|
627,630
|
3,976,425
|
|
|
389,016
|
6,554,604
|
|
|
|
(a)
|
Computed using the average of the high and low sales price of the common stock on the vesting date based on NASDAQ Stock Market reporting.
|
Other Benefit Plans
401(k) Retirement Plan
Dell maintains a 401(k) retirement savings plan that is available to substantially all U.S. employees. Dell matches 100% of each participant's voluntary contributions up to 5% of the participant's compensation, and a participant vests immediately in the matching contributions. Participants may invest their contributions and the matching contributions in a variety of investment choices, including a Dell common stock fund, but are not required to invest any of their contributions or matching contributions in Dell common stock.
Deferred Compensation Plan
Dell also maintains a nonqualified deferred compensation plan that is available to executives. Under the terms of this plan, Dell matches 100% of each participant's voluntary deferrals up to 3% of the participant's compensation that exceeds the qualified plan compensation limit. A participant may defer up to 50% of the participant's base salary and up to 100% of the participant's annual incentive bonus. Matching contributions vest ratably over the first five years of employment (20% per year) and thereafter matching contributions vest immediately. A participant's funds are distributed upon the participant's death or retirement (at age 65 or older) or, under certain circumstances and at the request of the participant, during the participant's employment, and can be taken in a lump sum or installments (monthly, quarterly, or annually) over a period of up to ten years. Vested funds may be withdrawn, with potential penalties, at the participant's request upon proof of financial hardship. The investment choices for the deferred compensation plan contributions generally are the same as those available in the broader 401(k) retirement savings plan except that there is no Dell common stock fund in this plan. Upon a corporate merger, consolidation, liquidation, or other type of reorganization that would constitute a change of control of Dell under the plan, the plan will be terminated and all benefits will be paid.
The following table describes the contributions, earnings, and balance at the end of Fiscal
2013
for each Named Executive Officer who participates in the deferred compensation plan.
|
|
|
|
|
|
|
|
|
|
|
Nonqualified Deferred Compensation at Fiscal Year-End 2013 Table
|
Name
|
Executive Contributions in Last Fiscal Year
|
Registrant Contributions in Last Fiscal Year
|
Aggregate Earnings in Last Fiscal Year
a
|
Aggregate Withdrawals/
Distributions
|
Aggregate Balance at Last Fiscal Year-end
|
Mr. Dell
|
—
|
—
|
$
|
971,212
|
|
—
|
$
|
6,819,318
|
|
Mr. Clarke
|
—
|
—
|
$
|
1,054,166
|
|
—
|
$
|
9,561,667
|
|
|
|
(a )
|
Not reported as compensation to the Named Executive Officers for tax purposes.
|
Potential Payments Upon Termination or Change in Control
All equity awards contain provisions that accelerate the vesting of the awards upon the death or permanent disability of the holder. These provisions are generally applicable to all Dell employees, including executive officers. As described above under "Compensation Discussion and Analysis — Employments Agreements; Severance and Change-in-Control Arrangements," on April 17, 2013, the Committee approved amendments to Dell's equity award agreements for grants of RSUs and PBUs (other than RUSs and PBUs held by Mr. Dell and the Board) under the company's stock plans which provide for accelerated vesting if the recipient's employment is terminated without cause within two years following a change in control of Dell. In addition, as described above under "Compensation Discussion and Analysis — Employment Agreements; Severance and Change-in-Control Arrangements," Dell has severance agreements with each of the Named Executive Officers other than Mr. Dell. As described above under "Compensation Discussion and Analysis — Retention Cash Bonus Awards," the Named Executive
Officers other than Mr. Dell are entitled to receive cash bonus awards in specified circumstances, including upon a qualifying termination.
The following table sets forth, for each of the Named Executive Officers, (1) potential severance payments assuming a
February 1, 2013
termination of employment and assuming that the Retention Cash Bonus Awards had been awarded and were in effect prior to such date, (2) the aggregate value of the equity and cash awards that were subject to vesting acceleration at the end of Fiscal
2013
, assuming that death or permanent disability occurred on
February 1, 2013
, and (3) the aggregate value of RSU and PBU awards that would accelerate assuming a February 1, 2013 change in control of Dell and qualifying termination and assuming that the equity award agreement amendments described above were in effect prior to such date. Severance payments are generally made in lump sums.
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Named Executive Officer
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Severance Payment
(a)
|
Acceleration Benefit Upon Death or Permanent Disability
(b)
|
Acceleration of RSUs and PBUs Upon Change in Control and Termination
(c)
|
Mr. Dell
|
—
|
|
$
|
14,433,816
|
|
—
|
|
Mr. Gladden
|
$
|
2,062,500
|
|
8,549,568
|
|
$
|
8,549,568
|
|
Mr. Clarke
|
2,131,250
|
|
8,409,506
|
|
8,409,506
|
|
Mr. Felice
|
2,131,250
|
|
9,487,884
|
|
9,487,884
|
|
Mr. Schuckenbrock
(d)
|
1,550,000
|
|
10,078,949
|
|
10,078,949
|
|
Mr. Swainson
|
1,993,750
|
|
1,178,395
|
|
1,178,395
|
|
|
|
(a)
|
Severance payments under the executive officer severance agreements and the retention cash bonus award program are only payable if the executive's employment is terminated "without cause." In general, an executive is deemed to be terminated without cause under these arrangements unless the executive is terminated for violating confidentiality obligations, violating certain laws, committing a felony or making a plea of guilty or nolo contendere with respect to a felony, engaging in acts of gross negligence or insubordination, refusing to implement directives issued by the executive's manager, breaching a fiduciary duty to Dell, violating Dell's Code of Conduct, unsatisfactory job performance, chronic absenteeism, or misconduct.
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Under the executive officer severance agreements, executive officers are obligated to comply with certain non-competition and non-solicitation obligations for a period of 12 months following termination of employment as a condition of receiving severance payments. Under the retention cash bonus award program, executive officers are obligated to comply with certain non-competition and non-solicitation obligations until March 15, 2015, and will be required to return the cash bonus award in the event of non-compliance with these obligations.
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(b)
|
Represents the sum of (1) the in-the-money value of unvested stock options that are subject to vesting acceleration in the event of death or permanent disability, (2) the value of unvested restricted stock, restricted stock units, and performance-based restricted stock units that are subject to vesting acceleration in the event of death or permanent disability, and (3) the value of unvested long-term cash awards. All values, computed as of the end of Fiscal
2013
, are based on the closing price of Dell common stock as reported on the NASDAQ Stock Market on the last day of Fiscal
2013
(
$13.63
).
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(c)
|
Represents the value of unvested restricted stock units and performance-based restricted stock units that are subject to vesting acceleration if the executive's employment is terminated "without cause" within two years following a change in control of Dell. In general, an executive is deemed to be terminated without cause under the amended award agreements in the same circumstances described in note (a) above. All values, computed as of the end of Fiscal 2013, are based on the closing price of Dell common stock as reported on the NASDAQ Stock Market on the last day of Fiscal 2013 ($13.63).
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(d)
|
Mr. Schuckenbrock resigned as President, Services in December 2012 and his employment with the Dell ended on March 31, 2013. Mr. Schuckenbrock and Schuckenbrock Consulting, LLC, a company owned and controlled by Mr. Schuckenbrock, entered into a consultancy agreement with Dell on February 22, 2013. For a description of the terms of the agreement and the amounts payable thereunder by Dell, see "Compensation Discussion and Analysis - Other Compensation Components - Mr. Schuckenbrock's Post-Termination Consulting Agreement."
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Director Compensation
Mr. Dell, as the only member of the Board who is also a Dell employee, does not receive any compensation for service on the Board. This section describes the Fiscal
2013
compensation of Dell’s non-employee directors.
Annual Retainer Fee —
Each non-employee director receives an annual retainer fee, which for Fiscal
2013
was $75,000. The chair of the Audit Committee receives an additional annual retainer fee of $25,000; the chair of each of the other standing Board committees receives an additional annual retainer fee of $15,000; and the Lead Director receives an additional annual retainer fee of $25,000. Each director may elect to receive the retainer in cash, or in the form of non-qualified stock options or restricted stock units in lieu of cash. Directors also may defer all or a portion of the retainer into a deferred compensation plan. Any such deferred amounts are payable in a lump sum or in installments beginning upon termination of service as a director. The number of options or restricted stock units received in lieu of the annual retainer fee (or the method of computing the number) and the terms and conditions of those awards are determined from time to time by the Leadership Development and Compensation Committee. The annual retainers are payable at the first Board meeting after the annual meeting of stockholders for all members elected by the stockholders. For new members appointed by the Board, the retainer is prorated based on the remaining number of Board meetings during the “Service Year” (a period beginning at the immediately preceding annual meeting of stockholders and ending at the next annual meeting of stockholders) and is payable at the first Board meeting attended by the new director.
Option and Restricted Stock Unit Awards —
Each non-employee directors is also eligible for annual stock option and restricted stock unit awards. The number of options and restricted stock units awarded, as well as the other terms and conditions of the awards (such as vesting and exercisability schedules and expiration provisions), are generally within the discretion of the Leadership Development and Compensation Committee, except that (1) no non-employee director may receive awards (not including awards in lieu of the annual cash retainer) covering more than 50,000 shares of common stock in any Service Year (other than the Service Year in which the director joins the Board, when the limit is two times the normal annual limit), (2) the exercise price of any option may not be less than the fair market value of the common stock on the date of grant, and (3) no option may become exercisable, and no restricted stock unit may become transferable, earlier than six months from the date of grant.
Option and restricted stock unit awards are granted at the first Board meeting after the annual meeting of stockholders for all members elected by the stockholders. New members appointed by the Board receive a director grant that is equal to the director annual option and restricted stock unit awards prorated based on the remaining number of Board meetings during the year (ending at the next annual meeting of stockholders).
Computer Hardware and Technical Support —
Dell provides directors personal computers and equipment for their use in connection with their Board service and for personal use. Dell also provides from time to time personal technical support to directors.
Other Benefits —
Dell reimburses directors for reasonable expenses associated with attending Board and committee meetings and when requested by the company and reasonable expenses for their spouses to attend a Dell sponsored event, and provides them with liability insurance coverage for their activities as directors.
Indemnification —
Under Dell's Certificate of Incorporation and Bylaws, the directors are entitled to indemnification from Dell to the fullest extent permitted by Delaware corporate law. Dell has entered into indemnification agreements with each of the non-employee directors which establish processes for indemnification claims.
Director Compensation for Fiscal
2013
The following table sets forth the compensation paid to the non-employee directors for Fiscal
2013
. Thomas W. Luce, III retired from the Board at the time of the 2012 annual meeting of stockholders.
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Name
|
Fees Earned
or
Paid in Cash
|
|
Stock Awards
(a)
|
|
All Other
Compensation
(b)
|
|
Total
|
Mr. Breyer
|
$
|
90,000
|
|
(c)
|
$
|
210,007
|
|
|
$
|
2,416
|
|
|
$
|
302,423
|
|
Mr. Carty
|
75,000
|
|
|
210,007
|
|
|
2,549
|
|
|
287,556
|
|
Ms. Clark
|
75,000
|
|
|
210,007
|
|
|
2,416
|
|
|
287,423
|
|
Ms. Conigliaro
|
75,000
|
|
|
210,007
|
|
|
1,896
|
|
|
286,903
|
|
Mr. Duberstein
|
75,000
|
|
|
210,007
|
|
|
2,416
|
|
|
287,423
|
|
Mr. Gray
|
90,000
|
|
|
210,007
|
|
|
4,543
|
|
|
304,550
|
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Mr. Kleisterlee
|
75,000
|
|
(c)
|
210,007
|
|
|
18,858
|
|
|
303,865
|
|
Mr. Luce
|
—
|
|
|
—
|
|
|
1,416
|
|
|
1,416
|
|
Mr. Luft
|
75,000
|
|
|
210,007
|
|
|
2,574
|
|
|
287,581
|
|
Mr. Mandl
|
125,000
|
|
|
210,007
|
|
|
2,416
|
|
|
337,423
|
|
Mr. Narayen
|
90,000
|
|
|
210,007
|
|
|
2,416
|
|
|
302,423
|
|
Mr. Perot
|
75,000
|
|
(c)
|
210,007
|
|
|
2,416
|
|
|
287,423
|
|
|
|
(a)
|
Represents, for each director, other than Mr. Luce, the total grant date fair value, computed in accordance with FASB ASC Topic 718, of a grant of 17,046 restricted stock units. The grant date fair value of $210,007 was based on the closing price of the common stock as reported on the NASDAQ Stock Market on the date of grant ($12.32). The awards were granted on July 13, 2012, which was the date of the first Board meeting following the 2012 annual meeting of stockholders.
|
The awards vest on July 1, 2013, so long as the director remains a member of the Board. If the director ceases to be a member of the Board (other than by reason of mandatory retirement, death or permanent disability), any units scheduled to vest within 30 days of such termination will accelerate and vest upon such termination. Any remaining unvested units will expire immediately. All unvested restricted stock units vest immediately upon mandatory retirement, death or permanent disability. At the election of the director, the director may elect to defer the settlement of the grant until a later date. Mr. Carty, Mr. Duberstein and Mr. Gray elected to defer settlement of their Fiscal 2013 grants, which will pay out ratably over five years beginning on the date each director ceases his service on the Board.
The following table sets forth the number of shares of unvested restricted stock or restricted stock units and the number of shares underlying stock options held by each of the non-employee directors as of the end of Fiscal 2013.
|
|
|
|
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Name
|
Restricted
Stock/Restricted
Stock Units
|
|
Stock Options
|
Mr. Breyer
|
22,596
|
|
—
|
Mr. Carty
|
22,596
|
|
498,047
|
Ms. Clark
|
17,046
|
|
—
|
Ms. Conigliaro
|
17,046
|
|
—
|
Mr. Duberstein
|
17,046
|
|
—
|
Mr. Gray
|
22,596
|
|
40,403
|
Mr. Kleisterlee
|
19,924
|
|
—
|
Mr. Luce
|
—
|
|
28,798
|
Mr. Luft
|
22,596
|
|
42,802
|
Mr. Mandl
|
22,596
|
|
48,302
|
Mr. Narayen
|
22,596
|
|
—
|
Mr. Perot
|
22,596
|
|
31,341
|
The information for Mr. Carty includes 455,245 stock options he was awarded in his capacity as Vice Chairman and Chief Financial Officer in Fiscal 2007 and 2009.
|
|
(b)
|
Represents imputed income amounts attributable to certain benefits or perquisites to the directors, as described below.
|
The expense to Dell for providing a Dell XPS 13 computer ($1,416) to each of Mr. Breyer, Mr. Carty, Ms. Clark, Ms. Conigliaro, Mr. Duberstein, Mr. Gray, Mr. Kleisterlee, Mr. Luce, Mr. Mandl, Mr. Narayen and Mr. Perot and the expense to Dell for providing a Dell XPS 13 computer ($2,574) to Mr. Luft in Germany. Also represents the expense to Dell for providing a Dell Latitude 10 tablet ($1,000) to each of Mr. Breyer, Mr. Carty, Ms. Clark, Mr. Duberstein, Mr. Gray, Mr. Kleisterlee, Mr. Mandl, Mr. Narayen and Mr. Perot.
The expense to Dell for providing a personal technical support to Mr. Carty ($133).
The expense to Dell of travel expenditures for Ms. Conigliaro's spouse ($480), Mr. Gray's spouse ($2,127), and Mr. Kleisterlee's spouse ($16,442) to attend a Dell sponsored meeting.
|
|
(c)
|
Each of Mr. Breyer, Mr. Kleisterlee and Mr. Perot elected to receive his annual retainer (
$90,000
for Mr. Breyer and $
75,000
for Mr. Kleisterlee and Mr. Perot), payable on July 13, 2012, in the form of restricted stock units. The restricted stock units were fully vested at the date of the grant. The number of shares was calculated based on the fair market value of the common stock on the date of grant ($12.32), as measured by the closing price of the common stock as reported on the NASDAQ Stock Market.
|
The following table sets forth the number of restricted stock units, as well as the grant date fair value of individual awards, of the Fiscal 2013 grants. The grant date fair values of these awards are not included in the Stock Awards column of the above table because the forgone cash amounts are included in the Fees Earned or Paid in Cash column.
|
|
|
|
|
|
Name
|
Restricted
Stock Units in
Lieu of
Annual
Retainer
|
Grant Date
Fair Value
|
Mr. Breyer
|
7,306
|
$
|
90,010
|
|
Mr. Kleisterlee
|
6,088
|
75,004
|
|
Mr. Perot
|
6,088
|
75,004
|
|