This document summarizes key points from a CIO roundtable discussion on compensation trends: 1) Economic growth remains sluggish in the US while unemployment rates are dropping slightly. Hiring and turnover rates vary by region and industry with life sciences seeing higher salaries on average than technology. 2) Stock prices have recovered close to 12-month highs while certain industries like cloud computing and mobile are adding more jobs in Silicon Valley. Voluntary turnover is increasing, especially in San Diego. 3) Salary increase budgets remain steady with life sciences slightly ahead of technology. Cash incentives focus on both company and individual performance with top performers receiving larger bonuses. 4) Technology companies use more restricted stock for equity

1. CIO Breakfast Roundtable
Compensation Trends Discussion
Ken Wechsler
Director; Southern California Market Leader
October 11, 2012

2. Topics for Today
> Key indicators
> Hiring and turnover trends
> Salary budgets
> Cash incentive plans
> Equity strategies and practices
> Questions and answers
1

3. Key Indicators

4. US Economic Forecasts
> Overall economic growth remains sluggish: Q4 2011 growth rate 4.1%;
Q1 2012 growth rate 2.0%; Q2 2012 growth rate only 1.5%
> The overall unemployment rate is dropping, but for those unemployed,
they may stay unemployed longer
Category 2008 2009 2010 2011 2012
GDP Year-Over-Year -0.3% -3.5% 3.0% 1.7% 1.8%*
Unemployment % 5.8% 9.3% 9.6% 8.9% 8.3%**
*Q2 2012 US Commerce Department, July 2012
**July 2012
Sources: United States Bureau Economic Analysis,
3
Congressional Budget Office and Bureau of Labor Statistics

5. Unemployment Rates
> Both California and San Diego County unemployment rates have been higher than
the overall US rates for the last few years, yet they are clearly improving
12.5%
12.5% 12.0%
11.7%
11.5%
10.3% 10.7%
10.4%
10.4%
10.5%
9.3%
9.5% 9.8%
9.7%
8.5% 9.0%
8.2%
7.5%
6.5%
5.5%
Dec
Jan
Mar
Dec
Mar
Dec
Mar
May
Jan
May
Jan
May
Jan
Mar
May
Jul
Aug
Sep
Oct
Jul
Aug
Sep
Oct
Jul
Aug
Sep
Oct
Feb
Apr
Feb
Apr
Jun
Feb
Apr
Feb
Apr
Jun
Nov
Nov
Jun
Nov
Jun
2009 2010 2011 2012
California Overall United States San Diego
4
Source: United States Bureau of Labor Statistics

6. Stock Price Recovery
> The Dow Jones (DJI), NASDAQ (IXIC) and Biotech Indices (NBI) are close to 12-month
highs
> Apple recently set a record for company value at $660B. Previous record was Microsoft
at $621B in December 1999
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
DJI IXIC NBI
Stock price performance relative to 7/31/2009 5
Source: Yahoo! Finance

7. Hiring and Turnover

8. Hiring Trends – Life Sciences and Technology
> San Diego companies are now in competitive talent wars, yet slightly less aggressive
Life Sciences Technology
San Overall San Overall
Method Diego* Bay Area US Diego* Bay Area US
Hiring
0% 1% 2% 3% 0% 2%
Freeze
Very
Selective 35% 35% 38% 36% 27% 30%
Hiring
Normal
55% 43% 42% 46% 53% 51%
Hiring
Aggressive
10% 21% 18% 15% 20% 17%
Hiring
*55% of life sciences and 49% of technology companies anticipate growing their
workforce over the next 12 months; conversely only 6% of life sciences
companies and 14% of technology firms expect their workforce to decrease in
size
7
Source: Radford Trends Report – Q2 2012

9. Turnover – April 2011- April 2012
> Voluntary turnover is rapidly increasing, especially for the San Diego market
22.0%
20.9%
20.0%
18.0% 17.2% 17.1%
16.6% 16.4%
8.0%
16.0%
14.5%
14.0% 5.9%
6.6%
7.0% 6.9%
12.0% 4.4%
10.0%
8.0%
12.9%
6.0%
11.3%
10.1% 10.5%
9.6% 9.5%
4.0%
2.0%
0.0%
San Diego Bay Area Overall US San Diego Bay Area Overall US
Life Sciences Technology
Voluntary Invountary
8
Source: Radford Trends Report – Q2 2012

10. Silicon Valley Sees Growth in Jobs
> Current unemployment stands at 8.3%
> 2012 Silicon Valley Index found job growth far outpaced
the country as a whole
- Regionally added 42,000 or nearly 4% compared to
nationwide increase of 1%
> Key industries adding jobs include cloud computing,
mobile devices, mobile apps, internet companies and
social media
> Silicon Valley non-technology workers still feeling the pain
of the economic collapse
Source: Associated Press 6/8/2012 9

11. Salary Budgets

12. 2012 Overall Salary Increase Budgets
> Budgets in life sciences historically (and still in 2012) run slightly ahead of technology
San Diego Bay Area Overall US
Life Life Life
Method Sciences Tech Sciences Tech Sciences Tech
75th Percentile 4.0% 3.9% 4.0% 4.0% 4.0% 4.0%
50th Percentile 3.6% 3.0% 4.0% 3.4% 3.5% 3.0%
25th Percentile 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Average 3.8% 3.3% 3.7% 3.4% 3.6% 3.4%
*Undiluted
11
Source: Radford Trends Report – Q2 2012

13. Cash Incentive Plans

14. Cash Incentives
> Almost all participants are expecting to pay bonuses in 2012
Life
Criteria Tech Sciences
Companies Expecting to Pay Bonuses in 2012 96% 96%
% of Total Population Receiving Bonus
64% 76%
Payment (down around 10 percentage points)
Life
Size of Payments Relative to Last Year Tech Sciences
Similar 67% 71%
Larger 18% 18%
Smaller 15% 11%
Source: Radford Practices Reports 2012 13

15. Cash Incentives – Individual Payouts
> Most companies emphasize both overall company and individual performance
based on the level within the organization when determining actual award
payouts
Life Sciences Technology
Level Company Individual Company Individual
CEO 85% 15% 80% 20%
Executives 70% 30% 75% 25%
Directors 55% 45% 60% 40%
All Other Employees 40% 60% 50% 50%
> Individual award segments should have enough differentiation to adequately
reward top performers
% of Individual Target
Performance Rating Award Level
Top 10% 125% to 150%
Next 20% 110% to 125%
Middle 50% 75% to 100%
Bottom 10% No Awards Issued
Source: Radford 2012 Overall Practices Report 14

16. Equity Strategies and Practices

17. Equity Vehicle Mix
> Technology companies have shifted to using more restricted stock in
their annual equity programs, with general industry companies placing
an even larger emphasis on restricted stock
Market Equity Vehicle Mix – Ongoing Grants
Technology General Industry
Stock Stock
Options RSUs Options RSUs
Level Only Only Both Only Only Both
Executive 20% 35% 45% 5% 60% 35%
Director 20% 50% 30% 5% 80% 15%
Manager 15% 80% 5% 5% 85% 10%
Senior IC 15% 80% 5% 1% 94% 5%
IC 4% 95% 1% 1% 94% 5%
Support 2% 97% 1% 1% 94% 5%
Source: Radford 2012 Global Long-Term Incentives Report 16
(Cal companies).

18. Grant Sizes
> Similar to base salaries, long-term incentive values are higher in the
technology industry than in the general industry
Ongoing Equity Grants - 50th Percentile
Technology General Industry
As a % of As a % of
Level Value Salary Value Salary
Executive $585,000 175% $535,000 140%
Director $43,500 25% $27,000 18%
Manager $19,500 16% $10,000 10%
Senior IC $22,000 16% $12,500 10%
IC $9,000 10% $5,000 6%
Support $1,000 2.5% $3,000 5%
Source: Radford 2012 Global Long-Term Incentives Report 17
(Cal companies).

19. Equity Vesting
> The vesting schedules between technology and general industry are
comparable with the majority having a 4-year vest
Ongoing Vesting Schedule
Level Technology General Industry
> 5-year vest - 6% > 5-year vest - 9%
Stock Options > 4-year vest - 77% > 4-year vest - 68%
> 3-year vest - 17% > 3-year vest - 18%
> 5-year vest - 6% > 5-year vest - 11%
Restricted Stock > 4-year vest - 58% > 4-year vest - 50%
> 3-year vest - 32% > 3-year vest - 39%
Source: Radford 2012 Global Technology Practices Report 18
(Cal companies).

20. Equity Vehicle Prevalence – Technology
> Companies located in Southern Calif. are utilizing RSUs more so than companies
located in the Bay Area
> Additionally, as you move lower in the organization we see companies in both regions
placing a higher emphasis on RSUs
Percent of Employees Receiving Different Vehicles
Southern Calif. Bay Area
Options RSUs Options RSUs
Position/Level Only Only Both Only Only Both
CEO 6% 44% 50% 17% 35% 48%
Senior Vice President 8% 50% 42% 16% 38% 46%
Vice President 9% 56% 35% 12% 42% 47%
Director 19% 77% 4% 13% 62% 25%
Manager 8% 88% 4% 8% 88% 4%
Senior Individual Contributor 1% 98% 1% 9% 89% 2%
Individual Contributor 2% 97% 1% 4% 95% 1%
Source: 2012 Radford Global Long-Term Incentive Report 19

21. Equity Vehicle Mix – Technology
> Companies have been reluctant to move performance-based RSUs beyond the Vice
President level in the organization
Value Delivered via Each Vehicle (Average Mix)
Southern Calif. Bay Area
Stock Time Perf. Stock Time Perf.
Position/Level Options RSUs RSUs Options RSUs RSUs
CEO 34% 47% 19% 41% 42% 17%
Senior Vice President 31% 49% 20% 38% 45% 17%
Vice President 27% 59% 14% 34% 50% 16%
Director 23% 73% 4% 23% 67% 10%
Manager 11% 88% 1% 10% 82% 8%
Senior Individual
4% 96% 0% 10% 90% 0%
Contributor
Individual Contributor 3% 97% 0% 5% 95% 0%
Source: 2012 Radford Global Long-Term Incentive Report 20

22. Annual Value Delivered – Technology
> Below the executive level, Southern Calif. companies are delivering more
value to their employees on an annual basis than Bay Area companies
> The values as a percent of base salary in Southern Calif. are also higher than
in the Bay Area
Annual Value Delivered ($000s) – 50th Percentile
Southern Calif. Bay Area Southern
Calif. as a
Value as a % Value as a Mult. of
Position/Level Value of Salary Value % of Salary Bay Area
CEO $1,801.8 265% $2,726.8 463% 0.7x
Senior Vice President $479.0 132% $724.9 192% 0.7x
Vice President $443.7 154% $461.0 152% 1.0x
Director $56.4 35% $39.0 23% 1.4x
Manager $27.1 24% $17.0 14% 1.6x
Senior Individual
$32.5 27% $13.5 12% 2.4x
Contributor
Individual Contributor $20.6 21% $7.6 9% 2.7x
Source: 2012 Radford Global Long-Term Incentive Report 21

23. New-Hire Value – Technology
> Similar to the ongoing grants, Southern Calif. companies are providing more
equity value to employees at the time of hire than Bay Area companies
> In Southern Calif., companies are generally providing new hire awards that are
between 1.5x and 2.5x the ongoing awards while in the Bay Area the new hire
grants are roughly between 2x and 3x the ongoing grants
New-Hire Value ($000s) - 50th Percentile
Southern Calif. Bay Area
Southern
Multiple of Multiple of Calif. as a
Annual Annual Mult. of
Position/Level Value Value Value Value Bay Area
Director $77.7 1.4x $85.7 2.2x 0.9x
Manager $63.0 2.3x $39.3 2.3x 1.6x
Senior Individual
$73.3 2.3x $36.7 2.7x 2.0x
Contributor
Individual
$35.3 1.7x $24.8 3.2x 1.4x
Contributor
Source: 2012 Radford Global Long-Term Incentive Report 22

24. Continued Emphasis on RSUs
> It has been a slow-and-steady transition but RSUs have replaced stock
options as the vehicle of choice
Historical RSU Allocation as a Percent of Total Pool
(using 3:1 option to RSU conversion ratio)
80%
69%
70%
62%
60% 57%
53%
50% 46%
40%
30%
20%
10%
0%
2007 2008 2009 2010 2011 YTD
Source: Radford’s Burn Rate/Overhang Proprietary Database 23

25. Chief Information Officer
Compensation Program Trends

26. CIO Compensation Trends
> While overall cash compensation has remained flat, there has been a
wholesale shift towards greater use of equity, equally spilt between
stock options and restricted stock units (RSUs).
Compensation Package Change
2010 2012
Component 25th 50th 75th 25th 50th 75th
Base Salary $ 216.2 $ 250.0 $ 300.0 $ 210.1 $ 250.0 $ 310.0
Bonus Target 34.4% 40.0% 50.0% 30.0% 40.0% 55.0%
Total Cash $ 284.1 $ 354.3 $ 441.7 $ 274.1 $ 354.2 $ 473.5
Annual Equity
$ 97.9 $ 185.8 $ 373.0 $ 116.7 $ 245.3 $ 519.5
Grant *
Total Direct
$ 336.0 $ 456.4 $ 724.0 $ 332.8 $ 473.4 $ 860.9
Comp
Source: Radford 2010 & 12 Global Technology Survey 25
* Equity eligibility: 91.7% - 2010 and 83.8% 2012

27. CIO Compensation – By Organization Size
> Clearly the compensation package varies significantly by the size of
the organization.
Compensation Package
Annual Revenues
Component < $200M $200M-$1B > $1B
Base Salary $208.0 $ 245.0 $300.0
Target Bonus 30.0% 35.0% 50.0%
Target Total Cash $254.2 $ 325.3 $462.0
Annual Equity
$55.8 $ 130.6 $177.1
Grant *
Total Direct Comp $259.9 $ 458.1 $641.1
Source: Radford 2012 Global Technology Survey 26
* Equity eligibility: 83.8% 2012

28. Questions?
Thank You!
Ken Wechsler, ken.wechsler@radford.com, + 1.858.755.8675